Everspin Technologies(US:MRAM)2024-02-28 23:52Financial Data and Key Metrics Changes - The company reported record annual revenue of $63.8 million for 2023, a 6% increase year-over-year [10][34] - Fourth quarter revenue was $16.7 million, exceeding guidance of $15.4 million to $16.4 million [10][34] - Gross margin for Q4 2023 was 58.1%, up from 51.4% in Q4 2022, while the full year gross margin was 58.4%, an increase from 56.6% in 2022 [10][36] - Net income for 2023 was $9.1 million, with Q4 net income at $2 million or $0.09 per diluted share, compared to $0.6 million or $0.03 per diluted share in Q4 2022 [34][38] - The company ended the year with a cash balance of $36.9 million, the highest in its history [10][39] Business Line Data and Key Metrics Changes - MRAM product sales in Q4 2023 were $12.4 million, down from $14.6 million in Q4 2022 [35] - Licensing royalties and other revenue increased to $4.3 million in Q4 2023, compared to $1.1 million in Q4 2022 [35] Market Data and Key Metrics Changes - The company noted weakness in the industrial and automotive sectors, particularly in APAC regions like Japan and China [15][21] - The first half of 2024 is expected to be muted due to economic challenges in China and inventory digestion among customers [15][40] Company Strategy and Development Direction - The company aims to maintain its leadership in MRAM technology, focusing on design wins and new product qualifications [12][42] - A key focus is on distributed MRAM (DMRAM), which is expected to enhance energy efficiency and scaling [14] - The company is optimistic about the second half of 2024, anticipating revenue growth from design wins in STT and Toggle MRAM products [25][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties while maintaining profitability [38][42] - The company expects to recognize revenue from design wins in the second half of 2024, despite a slower start to the year [33][41] Other Important Information - The company achieved positive cash flow from operations, totaling $13.1 million for the full year, up from $9.5 million in 2022 [39] - The company has entered into new radiation hard program agreements to develop reliability models and license technology for strategic applications [13] Q&A Session Summary Question: About the gross margin number in the fourth quarter - The management provided insights on the year-over-year change in gross margin and discussed the sequential decline despite strong licensing revenue [45][46] Question: Weakness in industrial automation in China - Management confirmed that challenges in the industrial and automotive sectors persisted, particularly in APAC regions, affecting revenue guidance [20][21][24] Question: Guidance for revenue across segments - The company expects Q1 revenue to be between $13.5 million and $14.5 million, with a strong outlook for licensing but a decline in product revenue due to APAC challenges [23][24]