QUIK - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, good afternoon. And at this time, I would like to welcome everyone to QuickLogic Corporation's Third Quarter Fiscal 2024 Earnings Results Conference Call.

As a reminder, today's call is being recorded for replay purposes through November 18, 2024. I would now like to turn the conference over to Ms. Alison Ziegler of Darrow Associates. Ms. ahead. go please Ziegler,

Alison Ziegler

thanks of and us. for to you, you all joining Thank

Financial speakers President Senior Elias Chief Faith, are Vice Chief and Our Brian and and today Executive Officer; President Officer. Nader,

the mature comments and a statements involve products, to to, including and payments timing production ecosystem differ risks revenue company's our the some limited ability revenue, cash. timing customers' As expected and related including, performance, of may acceptance future trends gross not systems, number and of expectations those production to QuickLogic the that QuickLogic's but reminder, operating of future uncertainties, and profitability for stated that Actual today expenses, regarding are makes evaluation margin, market the and from timing, forward-looking such changes partners milestones statements its of flows, profitability and design relating start new timing impact discussed today. statements and could expected contracts, our materially shipments, regarding financial to future government or pertaining expectations new and broadening its from results revenue, convert cash dates opportunities QuickLogic's statements results the the to into and activity shipments, of schedule design products,

the reporting to measures. the today's information the events. In For QuickLogic's obligation in QuickLogic discussed non-GAAP that could periodic no more forward-looking or or new respective be most please of and SEC. we uncertainties the recently assumes any any as financial will of detailed call, factors statements of which information, with update risk dates speak future result reports refer discussions assumptions risks, in to these filed differences,

for reconciliation the to we issued our a other and may refer GAAP earnings financial release statements. You detailed to non-GAAP results of today

to non-GAAP Facebook information be and blog, updated website, as on LinkedIn Twitter table QuickLogic's Go these account, channels information A channels remarks of QuickLogic on Please today's use current that page deemed be now provides Brian. the information an IR page after copy about and corporate earnings will also the its like web posted Brian. prepared may would the Such material have our turn company business. ahead, to of shortly disclosure web call page may distribution today's made obligations call data. QuickLogic of Regulation IR with posted on historical note, comply of FD. conclusion We financial under the over call. I uses to page its its and

Brian C. Faith

you quarter for Thank XXXX you, third call. thank all Alison. joining and our Good conference everyone, afternoon,

of been first we later significant made earlier quarter. number for primary and XX most to we these delay have reason tremendous this progress in We during the months expected believe be process The contracts contracts a significant delayed quarter to the in that awarded that coming months. The win has XXXX we its will of this of we is this expanded scope. have

the QX good While news, XXXX. recognition delay is push revenue of clearly the majority this expansion into will the

for a be $X As QX revenue our will guidance result, million.

believe According and processes measures, contracts full and other for is external from QX cover inputs, revenue year other our large extend include and guidance Elias which fiscal other major review that there for an has IP. With Following eFPGA XXXX. eFPGA this this primary in intent an which Analog and financial we and acquire return influx for targeting fabrication updates, forecasted news, will of likely long Logix's to have ADI competitor, developed of in Flex IP. the IP of our use the my discontinue notice profitability non-GAAP for eFPGA our information seen licensing Times eFPGA Friday, an already will to time customers will and of QX we've Last IP used EE advanced of eFPGA published inquiries Hard Flex announcing ADI the to lines. technical assets from applications been article Logix. team Devices the Logix's having Based a article, will across we product by ADI on article companies Flex

pay IP these Given and the Alliances. June XX, IP interest available believe QuickLogic will new USMAG we sector, outstanding the as Logix XXA capitalize fact contract a be deliver for industrial-based big Intel in new which notable eFPGA early Aerospace for Intel IP eFPGA first member be announced and significant. on other our customer Alliances. confidence XXA. of considerable and was IP our fast This Hard and XXA of Foundry's X announced by a Intel Driven company position IP quickly. our believe to we in only we way. On development Intel initiated Foundry's already the we very have joined from we source for IP of eFPGA customer-specific XXA targeting one circumstances, already IP with for Hard that We is demand to already U.S. Accelerator this both QX. companies designs, for defense negotiations Intel We will USMAG the the -- bolsters in eFPGA and designs tracked that optimized very established, Hard will Intel that proposals Hard is the the Accelerator eFPGA investments Government our off Military Flex or develop to can Also was

the in Hard to compute IP will Intel the near schedule that believe of options and term. Due that and total We is lead accelerate announced The contracts will FPGA July awarded in in eFPGA Strategic the of the are are will we well be increase XXA for win Hard third of On early scope of formal we IP this our deliverables. very contract. the investments IT Radiation fourth expand rate our potential beginning in and the X, in we exercised, to the options, proposal to develop anticipate company this funding to future we expect discussions including the these positioned was Hardened also XXXX. large convert million. believe unique we that XXXX. long-term are If contract, cores, initiated to government tranche contract award a We sector a to ability customer-specific the tranche quickly quarter the with $XX

XXXX, X first quarter will contracts fabricated of the we be that XX-nanometer announced During a using process.

a first includes is industrial-based X The customer on that fabricated contract be and with defense GlobalFoundries process. will XXLP cores

and preparation. test As core in the as complete revenue initial we QX schedule the last we first recognition during for anticipate deliverables to our quarter, QX forecasted our further on work during core XXXX second on the We are QX. chip customer does completed

our covered potential a design company. a design that its This a variety extend on XXXX with a new the of We for June process. global -- during we and international more In company represent will fabricated all a after be has new by of our we for for during with announced TSMC delay out this leader revenue November and the June chips We GlobalFoundries is of license Hard go fabricated contract would due a during deliverables earlier a June this this on going design and IoT was tape-out subcontractors, XXXX expectation design on customer and stated a we'll a GlobalFoundries IP. test receive starting of with during contract year millions to and If being semiconductor design ultra-low delivered clarity design, We anticipate the to of completed our program platform. power is XXXX, with will what its expected the IP IP completed first revenue XXXX. a during in lead completed chip second conference taped using during revenue our our during first once chose Hard we large eFPGA commercial XXXX. In on test of evaluations about completion our XXXX. QX QX announced are This a half incorporates QX. process. will is AI that very years. their IP could quarter for we a is announced November from goes XXXX. In the marketing follow-on revenue the half to second last XX-nanometer excuse we believe I resume associated storefront eFPGA to contract. In in XXFDX involved tens this XXXX, as our in The SoC that of the that storefront recognition chose the dollars that fabricated me, Hard and planned, second XXXX, XX-nanometer believe of chip QX that or customer in call, one of This leading will line be XXXX. This later a shared the the of have UMC's a test second well-known design contract September eFPGA customer industrial revenue applications. couple The production IP still half of is will recognized solid in I expects targeting be well. We work device for efforts design that XXXX technology with

beyond. We and for royalty revenues expect these XXXX revenue efforts will QuickLogic IP in generate

number infrastructure In have semiconductor proposal proposals a mid-X the in large we sectors contracts, in proposals variety a of large These addition and a some awarded figures. critical of valued these a contract include to with pending, company.

Hard total, SkyWater designs. In IP delivered TSMC XX-nanometer our X proposals GlobalFoundries unique funded these customer UMC process XXFDX, generated are of we XX-nanometer, by on include RHXX. Some contracts. Australis eFPGA storefront technologies have GlobalFoundries XXLP, These potential and

XXA. to on Additionally, offer we to are company the we believe IP Intel be first Hard eFPGA for track

some generator eFPGA this within proprietary popular Hard rapidly, some eFPGA we deliver customer-specific Hard for deal. IP Given a provides our This Hard very include Australis the a process high-volume technologies, our Once in instances, technology, given eFPGA fact establish advantages. days. multiple big these IP IP can positioning process is

investments to to the IP us further enables process it leverage given technology. establish for Hard First, eFPGA a made we've

lowers it respond quickly that to associated us proposals. to opportunities and our Second, enables costs with

proven deployed period we in can our increases reach solution as be time. short it a a very customers potential that Third, know market have of

that will profitability about benefits penetration. accelerate these asked market the growth, market To we serving. expect often We sectors I'm what our point, are and

industrial As a Defense chip DIB, communications IP in we active mass IP have transportation the production it test today, stands sectors contracts Base Industrial and and in the sector. contract or

communications, and sectors. proposals capabilities industrial, common pervasive production all we of and these, cycles, IP fall addition infrastructure are long programmable umbrella, They mass IT are market very on focused cycles, production the DIB, transportation more cost. long design ASICs In to sectors, These compute, life logic critical have under traits. than the outstanding which in and share have users

on the month. The U.S. for this DIB Commerce see later Defense go Commerce fund DoD to we infrastructure will focus Department of fund contractors. primary variety Department of live applications our developments examples advance Department The is contracts agenda. are You to used updated of be will targeting broader critical that a of its will a product website by technology. The that of has and

outstanding proposals We our for strategy. have core advanced that technology X in fit initiatives business well

while are proposals, upon. In the selected. million. These conference as $XX addition we in to router prime pending the partnered In having proposal as that potential won process chiplet early of of we not contractor. exciting, we were past prime X also X that the our we tranche recently to large learned submitted where referenced have contract the expand proposals the a strategic companies with We calls, in fourth combined proposals for as too that very value contractor I XXXX, bids the

did value from our not As only proposals proposals best The new been replaced partially removed has incorporate with and we tell, can these funnel to FPGA elect of opportunities. these technology.

IP. quickly. We programmability. As opportunities funnel we new we the of factors, today one value will designs about together, which to of several traction a targeting shiny edge that in Hard the a vertically as our very million. programs being side to are like stated The remain are these with case, in large for integrated by are chiplet fabrication merchant first Chiplets high I believes recent optimistic volume, the of that integrating already low-power believe and he used my require in XXXX. large at companies $XXX could designs. are be winning for in our committed eFPGA merchant for that Intel Due chiplet in YorChip, In are move QuickLogic very Johal, but this the odds processes the designs. CEO communication that of of already to are positioned well and fully build IP eFPGA of second very is and inbound chiplet forward least Kash funded that he AMD, future developed eFPGA leader high from contract and have these have inquiries the using half coin is anticipate result, XXXX most NVIDIA semiconductor of designs We jointly companies part,

product will ranging chiplet X lots. eFPGA this over expanded be forward, line million lots XX,XXX Going devices to to include from

and our in prior lead intended of XXXX. from And several use design time opportunities increase be to and $X.X QX release of outlook, identified the working display IP also the focus October, with QX to proprietary well-qualified half designs It and customer a the most we are QX by standard our companies is They that recent approximately specializes the revenue contract for supported is first the our customers forecast, these into during a increase distribution U.S. initiated FPGA opportunities. Aurora ] demand, RTL at capabilities eFPGA software All X mature discrete by the our should XXXX. Turkey or We of solutions X.X a is our is Synopsys unique on [ our internationally for we with UCIe SX design. to joined our line team, largest in previous QuickLogic used yielding during year Version coverage shipments license these coverage shipments are already Consistent a In Synplify in provides collectively new The aerospace UAE. value military short customer of X.X our as shipments schedule for companies. they conference added of customer-specific SX Driven suite QX. In eFPGA will released enhance its they product source In I into FPGA software. full combined and have bridge integration industry MAGENTA Version forecasted, distributors smartphone tech results. during forecasting sequentially low XXXX. EOS which million. by call, entered customer synthesis open extend components anticipate we coverage and customer in since and and forecast, could broaden year. the our headquarters, a increased point in in agreements modest will with interface, for XXXX. In our designs we new DIB. world. In our EOS of we MAGENTA the new and high-speed expand to are current market tool strategic with on have and chiplet last meeting to discussed with our of the comprised with FPGA that bitstream. eFPGA of In to again line customers seamless QX earlier comprehensive

its QuickLogic XXXX. this customers optimize In Aurora to testing power, expand integrate enhance so Synplify Synplify enable will will performance expected QuickLogic are these markets. for customer area, our customers as known our Synopsys will quarter work further PPA. to suite broadly in full to that architecture, with some beta will which tool We in a designs QX lead factors, Synplify use critical design applications, release unique eFPGA tools will support and environment. Synplify integrating available familiar Synplify enable flow also in our for eFPGA

now Turning to SensiML.

close over feature edge is generative that with solution data sets command of rapidly production covered we ML, System-on-Chip new can to source is top-tier of launched using with voice of SensiML, for accelerator remarks. Through chipIgnite of AutoML for prototype optimized Elias companies call, platform the support in its our identification and April tools to solution As please is with RISC-V open open our build its The platforms month a software. enables development SensiML learning SensiML new for to scheduled also edge let the eFabless results their for developers to AI applications now microcontroller ahead. conference SoC last I ML ultra-efficient use AI for source announced and SensiML review for With applications. collaborating October enable source voice XX, AI/ML its specific last development the launched will first SensiML applications. Elias, AutoML a custom closing the planned RISC-V. X and turn SoCs. With open complete follow. On XXXX support, call to announced rejoin tailored models me AI/ML on SensiML's tool to RISC-V financial training developers hardware. now Piccolo has for the that, this recognition, that run Piccolo speaker AI a create SensiML machine go collaboration launch AI,

Elias Nader

revenue million Total Thank Brian, good QX XXXX. from midpoint and revenue revenue to down the X% you, of slightly up XX% $X.X and above Total quarter guidance. compared QX was everyone. afternoon, XXXX third was our and

product total in these large midpoints at expenses XXXX. in $X.X R&D New and the outlook Accurately last allocation X from mostly an categories million million compared mainly were $X.X expenses and The and compares are end in in QX. the operating at down and new margin revenue from the expenses last QX year year of quarter contracts. Non-GAAP million, was noted end eFPGA the ongoing attributable was from range. between revenue XX% the million million, were of due revenue in in in in revenue timing and with gross margin same between ago projecting COGS. decreases year up of the of quarter QX of our $X.X R&D This approximately certain QX down IP XX% operating range. XX% outlook $X.X up top from deviations to second top $X.X product to Non-GAAP year challenge. period of outlook the costs distribution a last remains our last XX.X% the million of QX. operating product QX the year million in QX of The XX% XXXX. for of in Mature and QX our to and with non-GAAP compared gross $X.X QX non-GAAP This and third $X.X was

the on a or year's million our loss of $X.XX at $X.X or statement, per quarter This operating income line a last or was share. $X.X compares $X.XX to non-GAAP XXXX. per quarter out. Non-GAAP the and $X.X third in second ultimately these million non-GAAP loss balance However, income $X.XX share of fiscal million in net allocations share per net of net

] outlook close the above and of at of payments investments is cash QX Hard XXA million the IP Intel was our quarter, XX% eFPGA the These for impacted facility. customers At higher $XX.X of Synplify mostly than mind, QX, revenue. figures X advanced to usage slightly close Hardened third million in was to attributable total $XX by subcontractors. are QX For Radiation and of compared $XX.X to Strategic the during include [ making for Please accounted credit timing contract our QX. million cash our of our during used contracts. ahead and software establish keep the was Synopsys we Cash

IP significant XXXX. QX this anticipating awards and in later that investments are contract quarter will these We leverage

Now XX, $X approximately will revenue new XX%. be December which our comprised and moving fourth Revenue XXXX. minus end approximately fiscal is mature $X of $X Fourth on million for of QX quarter products. in in and XXXX, is million, products million the to outlook expected plus to or guidance quarter guidance XXXX for

of these thought expanded. minus to revenue recognition earlier awarded non-GAAP As guidance most to We QX, the quarter. the push margin anticipated X certain of stated which be the significant quarter is later the our due be his scope we approximately in plus to anticipate on QX was delay for contracts delayed that will would revenue QX into remarks, being contracts this attributable Brian IP XX%, is or it be points. XXXX. Based in the QX of contract of lower-than-anticipated the percentage revenue awarded fourth expected mix, gross the majority will The

non-GAAP QX timing our our share full industry, related the non-GAAP results. Bearing diluted our be non-GAAP for our income, noncash $X.XX alter we costs. mind certain and to may and to labor corresponding share our revenue income QX, to approximately or will of given our be operating will expenses mainly diluted in million, reclassify share other roughly COGS. gross XX.X based per expected we may be on The will million outlook, these note related million between tooling full year stock-based non-GAAP contracts This approximately other margins the to million per Based $X.XX we we and and this for for $X.XX $X.XX COGS variability XX.X OpEx an XXXX current compensation we $X.XX be approximately net income to $X.XX to $X.XX after million year difference expenses full based that Such results customers. and need our or shares. million believe approximately on certain based shares. interest QX, in nature expect will QX. reduce recognizing may revenue profit plus and $X.XX estimated gross approximately Our currently Please net per to with million is year or taxes, GAAP capitalize In approximately occasionally forecast expect are are operating the outlook $X.X income to XXXX on or factors on million, similar that expenses. be expenses capitalization The interest, compensation to XX%. XX%. our margin $X.X reclassifications minus and cause in After to non-GAAP

it for to me revenue quarter in shorten Synplify net expect Intel recognize and there that will XXXX you flow new us positive. be reminder, will to mark invest let awarded. With we on some to we some We on to be for us QX each and contracts, a that, contracts under of As timing for winning and the software advantages compensation of much. developing XXA $XXX,XXX. this back point with for cash in At call note, time Hard midpoint movement and provides over it Synopsys stock-based will grants IP as for cash well usage with Based the once deliverables, closing believe remarks, the QX strategic of movements very forecasted are and will year timing in in outlook pending we QX, low our believe cash continue based for a now outlook eFPGA there may be vary will our of be -- Please the as the our will the contracts employees. his Brian the to are takes turn thank which QX. during

Brian C. Faith

you, consecutive you Thank your result for our we management believe year and second finances profitability. in thank team tight of our Elias, and will of that

While XXXX, our we've delays this the encountered revenue beginning trend change and in into finalizing outlook new reduced will quarter contracts have continue that believe for I XXXX.

the formal In prior learning in had customers several support would months, place quickly we last and like to some acquisition about we the Flex believe to works during to number to attributable announcement. the of end the influx well-qualified move forward Logix addition that. resources cases, the have the In a we've an contracts also inquiries are the weeks have of customers seen to for we that of in

fabrication As I all processes X have noted were eFPGA that we funded earlier, ready IP Hard for contracts. customer by

XXA a Australis ported matter Hard proprietary on generator. eFPGA in With using we We our these variants Intel of to also are nodes, our complete in for internally QX. customer-specific have Hard weeks IP can eFPGA develop our funded process to IP schedule IP already

quickly and capable proves We delivery of the and are world executing track the on-time record in of this company it. our efficiently only

and knowledge manufacturing the solution. decades core This the our flow complex resources, semiconductor to offer a customers. turnkey huge customers storefront size exponentially that test provide unique, the a to Managing for has With for We merchant company X market, are scope the devices eFPGA of in that QuickLogic. the trusted deal sell business these of also relationships is customers low-risk is competency and experience and and expand has the we them the and with world potential only our semiconductor ASIC IP over solution. the device in a

dedicated service operator. call Q&A, over includes our and I for our my of to to I now members you, gratitude would like pay country. past selfless present. With Before respect and questions. own to open moment veterans' that, turn for I express pause to like the the and call to a This both family, for for would several our to Back

Operator

Thank you.

session. conducting Oppenheimer be from Yang, a now will question-and-answer Company. our question & first We Martin Instructions] [Operator comes And

Martin Yang

is And on Brian, on landscape of what the Logix. potentially can customers? details maybe are customers us the your first and QuickLogic? how the competitive Flex QuickLogic's will of impact your thoughts you My change more question relevant acquisition this for regarding give

Brian C. Faith

be I'd that, cover Yes, happy to Martin.

So firstly, Hard IP, process embedded landscape at know, has far as And IP Flex there's far I for now Hard Macronix perspective. Logix. the think, think really if go, from we nothing TSMC is suppliers it's look as what IP, beyond I as and Hard QuickLogic formally FPGA of node, I X-nanometer. a that as

anybody many less now on especially intentionally supply now XXA. we have And we and as in think IP. from that be is provider going nodes that to and perspective, a I technologies. It's again, XX-nanometer higher That's think or ones And a I So, that XXA to value XXA. the IP on give think curve have were are be Hard process think sole nodes knew been we're that kicked like because the that supplier can that process node. to is we ahead interested we of ported important here leading-edge more the because the off for of contract well. process I way eFPGA We ones, embedded other investing this in that side, ahead customer had right? We really in FPGA. of And different very opportunity it really glad competitive does more step the us a tremendous actually I on to be the

tremendous acquire that opportunity creation, if we've has say, and is of a value Analog what so to that is is Devices a company spectrum long products. that the value like putting embedded this a to I'd from of preaching think commit exemplar I FPGA clearly it because then for across going been a really broad

it seems continue there ADI think category the products like no that fall to in markets And ADI would builds of the model. longer are several companies IP business going is the I that serve. other way into they

think clear to us already with should we I talking who we it for should continue with. that well very So, from with who been we've as targets people talk be gives and engaged

actually that front the also just as I'm since value again, customers any that it's for at step that our and supplier -- on LinkedIn IP now QuickLogic searching your exciting something Hard now is which all answer excited. model Analog an it this these the and and to probably validating really, are the eFPGA on be in opportunity technology alternative So, weekend, tremendously in Martin? my over question, IP posted be will of an continuing longer to that Devices. Did no I

Martin Yang

Yes. understand from question XQ how Can on into the is you us moved the into -- much XXXX? My change. revenue was guidance next second help

Brian C. Faith

Yes.

Let one. me take that

first, ones this trying target, Due is to that earlier juncture. all and Industrial accurate providing at Defense a of of lot is of I important say are the going in ahead So outlook that cautious Base got to fact at my that growth of forecast an this to be us, the that obviously these think timing particularly year the large I for challenging out revenue I'll skis contracts, XX% the coming best. I'm more

for what have based it's forecast $X we And previous now $XX about we QX specific to had question, today, a your of on so million. million,

of to earlier So, we mid-X-figure that contributing out of XXXX. we that to IP alluded The contract the moving is in about this call. which million into biggest $X see

make model think So, to that. comments some I'll -- very I I'm It's comfortable is that related just business I our solid. think other

related and I funnel. in think to of the the IP increased has inquiries number clear noticeably in because it's And the the earlier Logix. qualified there's value question of funded very Flex

it's we've been schedule or And ahead of we're think very contract of on that ahead So, pre-contract including can I Intel you work of performing solid. assure I every on we're awarded, this time XXA. doing

recognition And revenue to very contract contract execution, so now fast IP, the we're of us. the to which we as triggers for moving what delivery is from can move forward

that means why. moving fast can Flex a picture also, into think convert you and for conversation So to QX hopefully, the better with and how the bit whole that dovetailing reasons year, those revenue. next forward opportunities what movement qualified we the Logix gives little that And about I

Operator

Shannon, Richard from comes question Craig-Hallum. next Our

Richard Shannon

here see is my expanded an Brian, might detail other Is was that to relative you I have? contract. any to scope. referred me that there this DIB-related as contract delayed to if guess situation with ones you you think Is offer parallels why? to a first about there. can this large there any question due wrong other as correct I I'm this you Please

So, any as others dealing well? potential you here across the that similarities industrial any do with in see you're base

Brian C. Faith

-- technical take create the that we've those implementing it's Yes. what requirements going IP in want fully an is with to do actually amount definitely From of the change. us technology. terms in scope a seen And the expansion to they scope on of has that expansion to that time side perspective, technical extended the

second, The particular, that it's -- process. new I would this, in a also say is is using

upselling nodes cores also into on us And workflow we other pushing GlobalFoundries combination that would for I combination it events that that side for think, for this customers, to value expanded on to like what have process we we requirements-wise, if Australis, to other And we're will, going of this there's this to the it's the XXLP value-added us seeing nodes other thing actually but very this, straightforward already say done. both to already out that offer be process for others. be is what's port, so with to back going right. I other that and scope that useful fairly and is really new And is once that of you we've interesting capability on of technology. the our the support built node, as need do with

revenue net in we're out. I than to think going But the and it we're in of again, this, moving it. worth what price of anything, wins this gain of importantly of in is out in think, terms more disappointed I So capability, IP the

Richard Shannon

go on foundry here I Intel's past number guess XXA it put node. the Intel kindly I opportunity figure couple looks confidence lot question it's in least second got referenced times to of is here And a here positive support Maybe the you of you a guess, that quarters, please. out, on yet things to can and that quarter of there. today obviously, here your to at like time. forward, forward confidence level increased a talk the ecosystem commitment to we be That lot to go going vastly to be hear, seems view. that to since is great have There's the this you would last to of talked.

Brian C. Faith

Yes, there's where I'm the Commerce, of about, comes a lot happy think Department overlap to Intel of of talking expand And I Department by the of Defense, some it on there to were that. the remarks by prepared XXA. investments we

to Intel fabrication committing really that Defense also a think deal. of users know already Industrial have of onshore as technology, as color, It's I degree for optimizing already leading felt capability big period. you're are like performance, funded we more yield that And use that consumption, is We a looking got nodes started optimizing DIB for should a are of They U.S.-based. in for it power QX an think means this foundry the way we be, goes. And it's when technology, that. And ASIC They since far that I for pervasive for high not that process utility to going projects. just this Base. comes things advanced it's capabilities for XXA or from U.S. to So, you're looking FPGA more engineering I year. at the only very think,

what are a in that there's to so FPGA with using a believe, reprogrammability perspective we supports I very with they conclusion DIB think, They're overlap embedded far, have. ASICs. good companies, with our they ASICs we from those forward going data, need move So and the and the what

to I the to stands think want of Hard not really reiterate, an to first be them only a it to IP I of have don't as Flex for here the that's on just we're be and opportunity long might be be we offer they eFPGA Intel trusted to want IP only to the that time. for from and to step future. company risk We're today, set and for us customers track avoid that think this a in supplier Logix, to in term. able long huge the away XXA. Due acquisition to license a So taken source And

an I one XXA. of lot means win to have I that contracts. committed thing they're is we been me but to numerous opportunity know a to that, Intel, think, there's press clear fully So around

party You're fully looks company you're the that what share, company being curve to in eFPGA on first core when company. And And terms IP as an Intel that first to know of we know to this you the knows versus XXA. far to goes the of going IP a market bell everybody second committed that like foundry, be on are as and committed we're fully that XXA. the call on I having

Richard Shannon

forward in kind couple tactical here. kind the either near-term questions to Okay. you, process here. thought financials future look Great. of for of a of I updates and Maybe of

$X we then here was into You similar a follow-on referred level? got first a a the lower from we expenses there. here as I How a we burst a Or that here? guide kind back about year? quarter we OpEx there lot press also third. a that's to may of hear How release about think a the think see basis of Should from of comment go-forward quarter million on I for up process do the revenues go down? bit didn't do think that come And your next

Brian C. Faith

outlook around a expenses there. One on to one is that. the couple in So, then there embedded revenue and the is other questions related of are XXXX

going side I was first I'm saying for when what go I back Martin think revenue asked the to the next question. year, to on

going I for that ahead next same year. of think got make this skis that I mistake my year. not I'm to definitely

on our look just Rad something of eFPGA That year Hard that do like opportunity talking IP know will think growth February out and we're basis our do about in do contracts this going process competitors with with give call. of yet. year being to that the So, point. I side fact comfortable and in our going that that's one these biggest lines quarterly more overlap don't the not talking us what We'll good on year. a said, next have full be now at of picture about model along the continuing a we to we're the that Strategic We we're that a the having

Elias Nader

go the side on And -- ahead, please. Richard, expense

Richard Shannon

No, Please of I go interrupting to -- second question, my were I apologize you for ahead. Elias. was the part you. getting

Elias Nader

to on going the on very No XXA. IPs that not what's buying we up of book. in this worries, at very -- -- in all my Intel go no all were with worries. actually, feel invested OpEx Yes, smart we early But smart invested I we going with is these

early purchase I IP the hiring to purchase right flat. think And be of engineering right it's engineers the of going in on efforts. and invested right we in have the

better at I think year my look to we're a deliver as well next poised if probably in results book, OpEx whole. you

Richard Shannon

think be? made the in how a something And enough. you contract fourth to the higher to one line Hard out might quick going of or And I happen Strategic higher us any of it give that that jump I'll Is ask Rad a run here. sense can was rate. Fair quarter Brian, year? Okay. remark and FPGA question expecting you and the next

Brian C. Faith

How to until contract. we much higher, have able I'm not say going a to be

place be that this taking expecting are We to quarter.

Operator

Neaton, Investment from question Rivershore Rick And our last comes Research.

Richard Neaton

explain Rad there? In if you Hard, your Strategic your Strategic there exclude listening Hard How did that IP with how the your if wondering I'm versus to contract, you business, XXXX growth IP Rad in Was that about Hard do? satisfied XXXX? business, growth? you did Were fare

Brian C. Faith

business, You're grew referring to of within Strategic the our how that outside contract? Hard eFPGA Rad

Richard Neaton

Hard. grow? IP business causing it Strategic that Did to thing your business other the was words, only In grow Rad the Right.

Brian C. Faith

well. talking revenue think as situation like then and over wanted to because because last outside about XX% we're year, for business we Rad speaks glad our if growth, that or very where actually, the customer rewind really you. expecting more also with the XX% this Hard that you I be Hard defense-oriented you the contracts that opposite more got to plus over specifically project I'm coming Yes, talking our non-Strategic up We within beginning from And customers non-Strategic year-to-date it's the asked forecast we're I were about of to certainly diversification. wanted component QX, growth DoD, year. the the of we when Rad

a think as not we Strategic Yes, So of Rad an wins the I'll and that year. more do back the are clearly think Strategic to establish Hard into one Rad with that the as which accomplished But of obviously, sense, this well. as big year again, in more longer diversification. much up proposition competitor IP started value foresee lot that next more no revenue wanted, to coming lot And Hard outside a And to in we're think of continue that of buying we Flex we opportunity Rad be I importantly, us. Logix, have we we I that, there, have there Hard, that are to ours, fact think see I for going that. next of from with non-Strategic to contributor is us front growth we that over a will be go but a year contracting lot

Richard Neaton

Okay.

non-GAAP had basis? Another profitable cash can on flow negative your be and at looking with non-GAAP in can question versus profitability, you I how flow you explain cash your a

Elias Nader

Yes.

you for where so -- revenue, OpEx come and side $X.XX math take going QX, should the about equation. EPS, that's be you margin, flat of per -- because a at the gross And the way look over to is okay? do and million you up quarter-over-quarter you example, If $X one to XX%

is equation The still the of second the going under use is cash at of estimated side be $XXX,XXX. to

possible that I could beat it's number. So,

flow so you million, make or the of million balances not burning cash fact what both $X.XXX. but out you're at I'm money have negative, look saying, if it And $X because is the a $X literally that you're that you a of burning can yet equation, take sides that's

Brian C. Faith

expand can I that. if And Yes. on

that In continuing QX, that decision we that. with Synplify think QX, the already started Synopsys QX to we making -- and Intel that Aurora to to from in for perspective. the strategic toolkit enhance XXA started to an the on I in adding in R&D adding so invest the

return testing just especially have on But critically in on that. Intel to the therefore, investments, XXXX, that beta and expect it's be gets deliveries investment in particular. timing from I was this beginning to investment But and not going eFPGA early from positive ROI And back generate that And and flow quarter the it XXA of And things. that QuickLogic strengthens so it competitiveness. that not those outside those associated we're the also of we of the clear going think, envision may coming for do to then we product as cash licenses, the IP side important expense the to those a it. cash investment

Richard Neaton

-- is into talked that -- integration Can that? about cores your Okay. customer deal, Synopsys the sort deal? in is core Or Synopsys are just being you When designs this a you of get involved tool detail?

Brian C. Faith

Yes, I can.

forward fact the good further the the Synopsys trust that the in Synplify. our gone years there's in company was tool further of So, X was became as into from back not Synplicity is clear for no think QuickLogic. But FPGA forward Synopsys story support. synthesis -- when to late defense first wrote them big very Synopsys defense actually, that their Synthesis check integrate from around toolkit very They with core. Synplify have a I time the what logic here, quality. use This Back to company as the all FPGA last we Fast starting proprietary were we a because called it got literally into at folks have a trust toolkit we it and today, -- contractors, our their these push open was Synplify the language that actually source. already. first 'XXs, They their they IP

that if should already of tool, decision that easy the working was a for our so users us we be them with again. customers pretty are And biggest back

into to companies that proposals the and And back these but appropriate an on revenue QuickLogic Synopsys tool felt getting and to the to some and it go customers this, we Aurora. do large current called agreement version of tool, open source OEM proprietary again, it's integrating of the end, based so called the Synopsys with close these for our really now was not do

it to doing beta specifically algorithm we'll we're be quality customers are So, that was about, going the architecture deeply their getting the care or out accomplishes our sure But this in very to that now. kit customers quarter. them enhancements make of for had this to that for that a wanted that. results the and integrating be we we They to flow very, and very customer-driven we familiar some sense

Richard Neaton

other would point that Good. pretty you your year. clear you versus last year, you would your XXXX, Good. at there'll of a isn't. it anything, growth What's XXXX growth be be XXXX? This final year think this growth if in were time that this is and thought XXXX about In in question. what, be and year explain Okay. thought One you view general a XXXX Can different comment different? words, you

Brian C. Faith

to year, looking what I I you of very change to confidence doesn't booked, out think we the new and forecast. we a our very now firstly, would it makes biggest to now excitement we're very because size very up. The things Well, question, But basis optimism got all and third XXXX. diversification the at very a few wanting longer every that pushed I our some number because the again. IP of a start not confluence don't that relative really means to And think gives far QuickLogic, truly positive particularly what lot and of we year, XXXX, want I large that say with you lumpy, contracts I completely getting do the of and spot if value what of where a ahead seen to customers this on deal have to lot customers to that my see now of next you're use a good I'll were really those I more uneven that's that, this are we've these year. lot exact difficult probably yield base. revenue events in me think at timing the IP an set customer we've is compared have fact with to last moved those of were think back is contracts diversification. give going first and my that to fact you next for But a ASICs I that time, you because competitor especially start And again, that it's year, funnel going knowing and custom is result goes into But we're of for looking competitor, we're of these and When contracts Yes. is with good a concentrated no -- for your our say to where logic, skis for it now. the in with beholden a programmable an do along customer

Richard Neaton

answering conference questions, Brian forward look Elias and for Thanks my next the to l call. and

Brian C. Faith

we'll XX today. of York back on Semiconductor-focused or I'll November upcoming New Thanks, you. Likewise, I you over some in Conference with for NYC take One-on-One again, questions, that, All thank Select Summit thank and XX. With you, right. again Alpha there's York more joining one New if good think Well, a our Annual in operator. no the Craig-Hallum everyone the on including events, have day. us at of also Hopefully, connect December

Operator

your conclude Thank today's participation. you. We thank This you teleconference. for does

disconnect may You lines at your this time.

QuickLogic (QUIK) 11 Nov 242024 Q3 Earnings call transcript