Everspin Technologies(MRAM) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenue of $13.1 million for Q1 2025, exceeding the guidance range of $12 million to $13 million, driven by stronger-than-expected product revenue [5][14] - Non-GAAP EPS was $0.02, above the guidance range of a non-GAAP net loss of $0.05 to breakeven [16] - GAAP gross margin was 51.4%, slightly up from 51.3% in Q4 2024 but down from 56.5% in Q1 2024 due to a lower mix of high-margin licensing revenue [15][16] - The company ended the quarter with cash and cash equivalents of $42.2 million, a slight increase from $42.1 million in the previous quarter [17] Business Line Data and Key Metrics Changes - MRAM product sales, including both Toggle and STT MRAM revenue, were $11 million, consistent with Q4 2024 and slightly up from $10.9 million in Q1 2024 [14][15] - Licensing, royalty, patent, and other revenue decreased to $2.1 million from $3.6 million in Q1 2024, attributed to lower revenue from the Front Grade project [15] Market Data and Key Metrics Changes - The company is experiencing increased interest in its products, as evidenced by strong customer engagement at the Embedded World event in Germany [10] - The company anticipates that product revenue from ongoing projects will remain consistent for the remainder of the year [6] Company Strategy and Development Direction - The company is focused on scaling its business and converting design wins into revenue while maintaining financial discipline [19] - Everspin is committed to advancing its MRAM technology, with ongoing projects in various sectors, including automotive and aerospace [6][13] Management's Comments on Operating Environment and Future Outlook - Management expects 2025 to be weighted more heavily towards the second half of the year due to typical seasonality [14][18] - The company does not anticipate a direct material impact from tariffs on its results, as direct sales to China are not significant [22][24] Other Important Information - The company is entering the second phase of its project with Front Grade Technologies to develop a custom radiation-hardened STT MRAM macro [7] - Everspin has partnered with Blue Origin for a lunar mission and is involved in projects with AstroDigital for deep space missions [13] Q&A Session Summary Question: Impact of tariffs on products manufactured in the U.S. and shipped to China - The company indicated that while some wafers are sourced from GlobalFoundries, direct sales to China are not significant, thus minimizing tariff risk [22][24] Question: Signs of cyclical recovery in the industrial segment - Management noted an improvement in backlog and traction on STT products, indicating signs of cyclical recovery [30][40] Question: Guidance for second quarter revenue split between products and licensing - The company expects overall revenue to move upward but did not provide specific guidance on the split [33] Question: Commentary on gross margins and expectations for the rest of the year - Management stated that gross margins are expected to remain consistent at around 51% for the rest of the year [37] Question: Expectations for operating expenses throughout the year - Operating expenses are expected to remain in the same range, with some increases due to product development work [46]