Everspin Technologies(MRAM) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenue of $13.2 million for Q2 2025, which is at the high end of the guidance range of $12.5 million to $13.5 million [6][13] - Non-GAAP earnings per share were $0.03, a significant improvement from a non-GAAP net loss of $0.03 per share in Q2 2024 [16] - GAAP gross margin was 51.3%, slightly down from 51.4% in Q1 2025 but up from 49% in Q2 2024 [14] - Cash and cash equivalents increased to $45 million, up $2.8 million from the previous quarter [17] Business Line Data and Key Metrics Changes - MRAM product sales, including both Toggle and STT MRAM revenue, were $11.1 million, compared to $9.9 million in Q2 2024 and $11 million in Q1 2025 [13] - Licensing, royalty, patent, and other revenue increased to $2.1 million, up from $0.7 million in Q2 2024, driven by the ramp in the contract with Purdue [14] Market Data and Key Metrics Changes - The data center business experienced high single-digit sequential growth, driven by strong demand from customers like Dell and Supermicro [6] - Industrial automation saw sequential growth in excess of 20% from Q1 2025, indicating strong momentum in this segment [6] - The company noted a depletion of inventories at customers globally, particularly in the Asian region, which is expected to lead to increased orders [30] Company Strategy and Development Direction - The company is focused on expanding its executive team to enhance sales efforts, with the addition of a dedicated VP of Sales [12] - Everspin aims to ramp up production of new products in the XPy family by late 2025, targeting aerospace, defense, and extreme industrial environments [8] - The company continues to expect 2025 to be weighted more heavily towards the second half of the year due to typical seasonality [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for MRAM technology and the successful execution of their business plan [2] - The company does not expect a material impact from tariffs on its results in the coming quarters [17] - Management anticipates total revenue for Q3 2025 to be in the range of $13.5 million to $14.5 million, with non-GAAP net income per share expected between $0.02 and $0.07 [18] Other Important Information - The company recognized $800,000 in other income related to a strategic award for developing a long-term plan for manufacturing services in aerospace and defense [15] - Everspin continues to ship and recognize revenue from its ongoing project with Lucid Motors for their gravity SUV, expecting volumes to increase as production ramps up [8] Q&A Session Summary Question: Inquiry about product gross margins - Management acknowledged that product gross margins are slightly lower than previous quarters but are working on improving yields and margins [20][22] Question: Expectations for new product contributions - Management indicated that new products are ramping up, particularly in the aerospace segment, and expect to see contributions in Q3 and Q4 [25][28] Question: Dynamics in broader industrial markets - Management noted a depletion of inventories at customers globally, particularly in Asia, leading to increased orders in automation and data center applications [30] Question: Update on specific contracts - Management confirmed a pickup in activity related to the Amentum contract expected in the second half of the year [32][34] Question: Status of QuickLogic relationship - Management stated that they completed the first phase of the QuickLogic project and are awaiting renewal for the next phase [41][42] Question: Progress with Lattice Semiconductor - Management reported ongoing evaluation activities with Lattice Semiconductor, with parts available for customer evaluation [45]