Everspin Technologies(MRAM) - 2023 Q4 - Annual Results

Financial Highlights and Overview Everspin Technologies achieved strong, record-breaking financial performance in Q4 and full year 2023, marked by increased revenue, profitability, and cash reserves Q4 2023 and Full Year 2023 Performance Summary Everspin Technologies achieved strong, record-breaking financial performance in Q4 and full year 2023, marked by increased revenue, profitability, and cash reserves - The company's Q4 2023 performance exceeded expectations across the board, primarily driven by strong product and RAD Hard revenue[2] - Full year 2023 achieved record revenue and profitability, with improved gross margin through operational excellence[2] - The company achieved its 11th consecutive profitable quarter, maintaining a strong financial position with no debt and a record-high cash balance[5] Q4 2023 Highlights In Q4 2023, the company exceeded guidance for total revenue and diluted EPS, achieved a significant increase in gross margin, and reached a record-high cash balance Key Financial Metrics for Q4 2023 | Metric | Q4 2023 (USD) | Q4 2022 (USD) | Change (YoY) | | :-------------------------------- | :--------------- | :--------------- | :---------- | | Total Revenue | $16.7 million | $15.7 million | +6% | | Diluted EPS (GAAP) | $0.09 | $0.03 | +200% | | Gross Margin | 58.1% | 51.4% | +6.7 pp | | Adjusted EBITDA | $3.6 million | $2.1 million | +71.4% | | Cash and Cash Equivalents (End of Period) | $36.9 million | - | Record High | - MRAM product sales were $12.4 million, compared to $14.6 million in Q4 2022[4] - Licensing, royalties, patent, and other revenue totaled $4.3 million, up from $1.1 million in Q4 2022[4] Full Year 2023 Highlights For the full year 2023, the company achieved growth in both revenue and profitability, with significant improvements in gross margin and Adjusted EBITDA, alongside 217 design wins Key Financial Metrics for Full Year 2023 | Metric | Full Year 2023 (USD) | Full Year 2022 (USD) | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :---------- | | Total Revenue | $63.8 million | $60.0 million | +6% | | Diluted EPS (GAAP) | $0.42 | $0.29 | +44.8% | | Gross Margin | 58.4% | 56.6% | +1.8 pp | | Adjusted EBITDA | $15.3 million | $11.8 million | +29.7% | - 217 design wins were achieved for the full year 2023[2] - MRAM product sales were $53.1 million, compared to $55.0 million in 2022[4] - Licensing, royalties, patent, and other revenue totaled $10.6 million, up from $5.0 million in 2022[4] Detailed Financial Results This section provides a comprehensive breakdown of Everspin's financial performance for Q4 and full year 2023, highlighting key revenue and profitability metrics Fourth Quarter 2023 Results In Q4 2023, Everspin achieved year-over-year growth in total revenue, significant improvements in gross margin and net income, and a substantial increase in Adjusted EBITDA Q4 2023 Financial Data | Metric | Q4 2023 (Millions USD) | Q4 2022 (Millions USD) | Change (YoY) | | :-------------------------------- | :-------------------------- | :-------------------------- | :---------- | | Total Revenue | 16.7 | 15.7 | +6% | | MRAM Product Sales | 12.4 | 14.6 | -15.1% | | Licensing, Royalties & Other Revenue | 4.3 | 1.1 | +290.9% | | Gross Margin | 58.1% | 51.4% | +6.7 pp | | GAAP Operating Expenses | 8.1 | 7.5 | +8% | | GAAP Net Income | 2.0 | 0.6 | +233.3% | | Diluted EPS (GAAP) | 0.09 | 0.03 | +200% | | Adjusted EBITDA | 3.6 | 2.1 | +71.4% | - Cash and cash equivalents balance reached a record $36.9 million at the end of Q4 2023[4] Full Year 2023 Results For the full year 2023, Everspin demonstrated robust growth in total revenue and net income, alongside notable enhancements in gross margin and Adjusted EBITDA, reflecting improved operational efficiency Full Year 2023 Financial Data | Metric | Full Year 2023 (Millions USD) | Full Year 2022 (Millions USD) | Change (YoY) | | :-------------------------------- | :-------------------- | :-------------------- | :---------- | | Total Revenue | 63.8 | 60.0 | +6% | | MRAM Product Sales | 53.1 | 55.0 | -3.5% | | Licensing, Royalties & Other Revenue | 10.6 | 5.0 | +112% | | Gross Margin | 58.4% | 56.6% | +1.8 pp | | GAAP Operating Expenses | 31.4 | 27.7 | +13.4% | | GAAP Net Income | 9.1 | 6.1 | +49.2% | | Diluted EPS (GAAP) | 0.42 | 0.29 | +44.8% | | Adjusted EBITDA | 15.3 | 11.8 | +29.7% | Business Outlook Everspin provides its financial guidance for Q1 2024 and includes cautionary statements regarding the inherent risks and uncertainties of forward-looking statements Q1 2024 Guidance Everspin projects Q1 2024 total revenue to range between $13.5 million and $14.5 million, with diluted earnings per share expected to be between break-even and $0.05 Q1 2024 Performance Guidance | Metric | Q1 2024 Guidance | | :--------------------- | :------------------- | | Total Revenue | $13.5 million - $14.5 million | | Diluted EPS (GAAP) | Break-even - $0.05 | - This outlook is based on Everspin's current expectations and may be influenced by external conditions[6] Cautionary Statement Regarding Outlook The company advises investors that forward-looking statements involve risks and uncertainties, with actual results potentially differing materially from expectations due to various external factors - The outlook relies on Everspin's current expectations and may be impacted by external conditions such as COVID-19 and its variants, supply chain disruptions, the military conflict in Ukraine, Middle East instability, market volatility, and a semiconductor industry downturn[6] - Actual results may differ materially from forward-looking statements due to risk factors described in the company's 10-K and 10-Q reports filed with the SEC[13] - Everspin undertakes no obligation to update or revise these forward-looking statements in the future, except as required by law[13] Non-GAAP Financial Measures This section defines Adjusted EBITDA as a non-GAAP financial metric, explaining its calculation and management's use for performance evaluation and planning Adjusted EBITDA Reconciliation and Definition Everspin utilizes Adjusted EBITDA as a non-GAAP financial metric to assess operational performance, trends, and for budgeting and planning, derived by adjusting net income for specific non-cash and non-operating items - Adjusted EBITDA is defined as net income adjusted for interest expense, taxes, depreciation and amortization, stock-based compensation expense, and restructuring costs, if any[7] - Management and the Board of Directors use Adjusted EBITDA to understand and evaluate operating performance and trends, prepare and approve annual budgets, and develop short-term and long-term operating and financing plans[8] - Adjusted EBITDA is a non-GAAP financial measure, intended to supplement, not substitute, GAAP net income, and its definition may vary across companies, limiting comparability[8] Company Information This section provides an overview of Everspin Technologies as a leading MRAM provider and details for the upcoming analyst and investor conference call About Everspin Technologies Everspin Technologies is a leading global provider of Magnetoresistive Random Access Memory (MRAM), offering high-performance non-volatile memory solutions for critical applications - Everspin Technologies, Inc. is the world's leading provider of Magnetoresistive Random Access Memory (MRAM)[11] - Everspin MRAM offers the most robust and highest-performance non-volatile memory for industrial IoT, data centers, and other mission-critical applications where data persistence is crucial[11][12] - Headquartered in Chandler, Arizona, the company provides commercial MRAM solutions to a broad and diverse customer base[12] Conference Call and Investor Relations Everspin will host an analyst and investor conference call on February 28, 2024, providing details for dial-in, webcast access, and investor relations contacts - Everspin will host an analyst and investor conference call on February 28, 2024, at 5:00 PM ET[9] - A live webcast of the conference call will be accessible on the company's website at investor.everspin.com, with an archived replay available approximately two hours after the live broadcast for twelve months[10] - Investor Relations contact: Monica Gould, The Blueshirt Group, Phone: 212-871-3927, Email: ir@everspin.com[14] Unaudited Financial Statements This section presents Everspin's unaudited balance sheets, income statements, cash flow statements, and Adjusted EBITDA reconciliation for the specified periods Balance Sheets As of December 31, 2023, Everspin's balance sheet shows significant growth in cash and cash equivalents, an increase in total assets and stockholders' equity, and a decrease in total liabilities Key Balance Sheet Data (As of December 31, in thousands USD) | Metric | 2023 | 2022 | Change (YoY) | | :----------------------- | :------- | :------- | :---------- | | Cash and Cash Equivalents | 36,946 | 26,795 | +37.9% | | Total Current Assets | 57,879 | 44,747 | +29.3% | | Total Assets | 67,303 | 55,333 | +21.6% | | Total Current Liabilities | 8,778 | 10,875 | -19.3% | | Total Liabilities | 13,382 | 16,669 | -19.7% | | Total Stockholders' Equity | 53,921 | 38,664 | +39.4% | Statements of Income and Comprehensive Income In 2023, Everspin experienced growth in total revenue, gross profit, and net income, with a notable increase in diluted earnings per share, reflecting enhanced profitability Key Statements of Income and Comprehensive Income Data (As of December 31, in thousands USD) | Metric | 2023 | 2022 | Change (YoY) | | :-------------------------------- | :------- | :------- | :---------- | | Product Sales | 53,123 | 55,032 | -3.5% | | Licensing, Royalties & Other Revenue | 10,642 | 4,953 | +114.9% | | Total Revenue | 63,765 | 59,985 | +6.3% | | Cost of Sales | 26,520 | 26,040 | +1.8% | | Gross Profit | 37,245 | 33,945 | +9.7% | | Operating Expenses | 31,360 | 27,718 | +13.1% | | Operating Income | 5,885 | 6,227 | -5.5% | | Net Income | 9,052 | 6,129 | +47.7% | | Diluted EPS | 0.42 | 0.29 | +44.8% | - Stock-based compensation expense totaled $5,005 thousand in 2023, up from $4,408 thousand in 2022[18] Statements of Cash Flows In 2023, Everspin saw a significant increase in cash flow from operating activities, reduced cash outflow from investing activities, and a substantial rise in net cash and cash equivalents Key Statements of Cash Flows Data (As of December 31, in thousands USD) | Metric | 2023 | 2022 | Change (YoY) | | :--------------------------- | :------- | :------- | :---------- | | Net Cash from Operating Activities | 13,128 | 9,493 | +38.3% | | Net Cash Used in Investing Activities | (1,385) | (2,586) | -46.4% | | Net Cash Used in Financing Activities | (1,592) | (1,521) | +4.7% | | Net Increase in Cash & Equivalents | 10,151 | 5,386 | +88.5% | | Cash and Cash Equivalents, End of Period | 36,946 | 26,795 | +37.9% | - Purchases of property and equipment were $1,404 thousand in 2023, down from $2,788 thousand in 2022[20] - Repayments of long-term debt were $2,790 thousand in 2023, up from $2,400 thousand in 2022[20] Reconciliation of Adjusted EBITDA In 2023, Everspin's Adjusted EBITDA, reconciled from GAAP net income, showed significant growth, reflecting the core profitability of the company's operations Reconciliation of Adjusted EBITDA (As of December 31, in thousands USD) | Metric | 2023 | 2022 | Change (YoY) | | :----------------------- | :------- | :------- | :---------- | | Net Income | 9,052 | 6,129 | +47.7% | | Depreciation and Amortization | 1,205 | 982 | +22.7% | | Stock-based Compensation Expense | 5,005 | 4,408 | +13.5% | | Interest Expense | 63 | 274 | -77.0% | | Income Tax (Benefit) Expense | (16) | 14 | -214.3% | | Adjusted EBITDA | 15,309 | 11,807 | +29.7% |