QuickLogic(US:QUIK)2023-02-28 01:20Financial Data and Key Metrics Changes - Revenue for Q4 2022 was $4.1 million, an increase of 18% from $3.5 million in the previous quarter and a 10% increase from $3.7 million in Q4 2021 [27] - Total revenue for fiscal 2022 was $16.2 million, up 28% from $12.7 million in fiscal 2021 [42] - Non-GAAP gross margin in Q4 was 53.2%, compared to 49.8% in the prior quarter and 60.1% in the same quarter of 2021 [40] - Non-GAAP net loss was $0.5 million, or a loss of $0.04 per share, compared to a net loss of $0.9 million in the previous quarter [41] Business Line Data and Key Metrics Changes - New product revenue was approximately $2.8 million in Q4, up 26% from $2.3 million in the previous quarter and up 7% from $2.7 million in Q4 2021 [39] - Mature product revenue was approximately $1.2 million in Q4, consistent with Q3 and up from $1 million in Q4 last year [39] - New product revenue for fiscal 2022 was $11.7 million, compared to $7.8 million in the prior year, driven by eFPGA IP professional services and SensiML AI Software Platform revenue [42] Market Data and Key Metrics Changes - The sales funnel now exceeds $118 million, the largest in the company's history, including both eFPGA IP and bespoke device development opportunities [21] - The company expects to recognize revenue from a new government-focused eFPGA IP-based contract targeting a 12 nanometer process node throughout 2023 [23] - The smartphone business is expected to see a sequential decline of around $500,000 due to inventory digestion by the primary customer [25] Company Strategy and Development Direction - The company is focusing on non-consumer markets such as aerospace, defense, industrial, and IoT, which are expected to drive growth [22] - The strategy includes leveraging automation in eFPGA IP development to enhance profitability and reduce operating expenses [34] - The company aims to capture a share of the several hundred million dollar market for strategic radiation-hardened FPGA technology [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive non-GAAP operating income by mid-2023 and annual profitability for fiscal 2023 [55] - The company anticipates a revenue guidance for Q1 of approximately $4.3 million, reflecting a decline in mature product segments [43] - Management noted that the current economic environment is impacting demand for mature products, but eFPGA-related design wins are expected to drive future growth [37] Other Important Information - The company signed its largest eFPGA contract ever in 2022 and became a prime performer for the U.S. Government in developing new strategic radiation-hardened FPGA technology [33] - Non-GAAP operating expenses for Q4 2022 were approximately $2.4 million, lower than forecasted due to reclassifications related to R&D expenses [61] - Total cash at the end of Q4 was $19.2 million, down from $20 million in the prior quarter [62] Q&A Session Summary Question: What is the earliest time frame for royalty contributions from FPGA customers? - Management indicated that royalties from earlier licenses could start to be seen towards the end of the year [46] Question: Can you discuss the $118 million funnel and its timeline? - Management clarified that the funnel is primarily geared towards the next two years, with a portion spanning the full four years of the contract [69] Question: How does the company view competition in the AI space? - Management stated that SensiML is not directly competing with AI models like ChatGPT, as it focuses on AI at the edge rather than heavy-duty compute tasks [73] Question: What is the outlook for the mix of new and mature products? - Management expects mature product revenue to decline in Q1, similar to trends seen across the industry [76] Question: How is the sales funnel expected to expand? - Management anticipates a more predictable growth rate in the sales funnel due to an expanded sales force and larger opportunities [78]