QuickLogic(US:QUIK)2024-02-28 02:40Financial Data and Key Metrics Changes - Q4 revenue increased 83% year-over-year to $7.5 million, driven by record high IP revenue [5][36] - Full-year revenue increased 31% to $21.2 million, with new products representing 86% of total revenue [11][41] - Non-GAAP gross margin in Q4 was 78.3%, compared to 53.2% in Q4 2022 [38] - Non-GAAP net income reached a record $2.6 million in Q4, compared to a net loss of $544,000 in Q4 2022 [40][44] Business Line Data and Key Metrics Changes - New product revenue in Q4 was approximately $6.8 million, up 12% from the previous quarter and up 140% from Q4 2022 [37] - Mature product revenue was approximately $0.7 million, an increase of 15% from the previous quarter but down from $1.2 million in Q4 2022 [37][41] - Non-GAAP operating expenses in Q4 were approximately $3.1 million, lower than the previous quarter due to timing of payments [39] Market Data and Key Metrics Changes - The company anticipates a return to the funding rate of a government contract, which has a total potential of $72 million [14] - The Chiplet market is projected to grow from a few billion dollars in 2023 to $107 billion in 2033, representing a 10-year CAGR of over 42% [30] Company Strategy and Development Direction - The company is focused on expanding its IP business across new customers and market sectors, with a record $168 million opportunity funnel [12][55] - A strategic shift is being made to allocate a higher percentage of contract revenue to IP versus engineering services [47] - The company aims to leverage its core capabilities as a silicon supplier to provide turnkey solutions for IP customers [54] Management's Comments on Operating Environment and Future Outlook - Management is confident in achieving greater than 30% revenue growth in 2024, supported by a strong opportunity funnel [12][48] - The timing and cadence of large IP contracts may push revenue recognition into the second half of 2024, but cash flow from IP contracts will remain unaffected [15][47] - The company expects to maintain profitability and positive cash flow for the full year 2024 [51][53] Other Important Information - Total cash at the end of 2023 was $24.6 million, an increase from $19.2 million at the end of 2022 [45] - Non-GAAP operating expenses are expected to be approximately $3.5 million in Q1 2024, reflecting a modest increase to support new programs [49][93] Q&A Session Summary Question: What percentage of revenue should be expected in the second half of the year? - Management indicated that greater than 50% of revenue will be recognized in the second half of the year, but not as high as 70% or 80% [64] Question: Is the new contract expected to produce tens of millions of dollars in revenue? - Management clarified that the new contract is with a different customer than the one previously referenced [66] Question: What is the trend regarding larger IP contracts? - Management confirmed that the average size of IP contracts is trending upwards, reflecting an appreciation of the value proposition [82] Question: Will storefront and royalty revenues contribute significantly this year? - Management expects storefront revenue to start contributing in 2025, but not to be a major contributor in 2024 [90] Question: How will operating expenses be managed throughout the year? - Management plans to keep operating expenses around $3.5 million, with some increases to support new hires and growth opportunities [93][96]