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01/11 04:07
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call revealed a mixed outlook. While there are promising advancements in technology and partnerships, the financial performance showed increased losses, and there were delays in key projects. The Q&A session highlighted uncertainties, especially with STMicro's decision and lack of clear timelines for transformative projects. The financial health appears strained with rising expenses, and cash reserves are decreasing. These factors, combined with the lack of immediate revenue catalysts and unclear guidance, suggest a negative sentiment towards the stock in the short term.
GAAP net loss for Q3 2025 $5.6 million or $0.17 per share, compared to a net loss of $4.6 million or $0.17 per share in Q3 2024. The increase in net loss was due to higher operating expenses, particularly in R&D and G&A.
GAAP operating expenses for Q3 2025 $5.7 million, an increase of $857,000 from $4.8 million in Q3 2024. This was driven by a $544,000 increase in R&D expenses and a $353,000 increase in G&A expenses, primarily due to higher stock compensation expense.
Non-GAAP net loss for Q3 2025 $4.4 million, compared to $3.9 million in Q3 2024. The increase was primarily due to a $423,000 rise in non-GAAP operating expenses, reflecting higher R&D expenses.
Stock compensation expense for Q3 2025 $1.3 million, compared to $907,000 in Q3 2024. The increase reflects the adoption of performance-based RSUs (PSUs) for executive equity-based compensation, which vest over 3 years and are tied to shareholder returns relative to the Russell 2000 Index.
Cash and cash equivalents as of September 30, 2025 $20.3 million, compared to $22 million as of June 30, 2025. The decrease was due to $3.4 million of cash used in operating activities during Q3, partially offset by $2 million raised under the ATM facility.
MST implementation: Atomera discovered a new MST implementation validated through TCAD simulations that doubled performance improvement without reducing device lifetime.
Gallium Nitride (GaN) initiative: Collaboration with Sandia National Labs is progressing, with device fabrication highlighting improved electrical performance. Prior results confirmed MST's ability to enhance GaN growth on silicon substrates.
STMicroelectronics partnership: STMicroelectronics decided to discontinue development on 200-millimeter wafers and focus on 300-millimeter BCD110 platform. They will not incorporate MST in the BCD110 launch but continue to explore MST in other areas.
Customer engagements: Atomera is working with multiple large customers across power devices, Gate-All-Around logic, DRAM, and RF-SOI areas. A record number of wafers were processed this quarter.
Revenue prioritization: Atomera is focusing on MST starting wafer products for faster market entry and revenue generation. They are also pursuing high-revenue potential applications like Gate-All-Around logic and DRAM.
Financial performance: GAAP net loss for Q3 2025 was $5.6 million, with a cash balance of $20.3 million as of September 30, 2025. Non-GAAP net loss was $4.4 million.
Strategic OEM partnership: Partnership with a leading capital equipment company is advancing MST's validation for advanced nodes, including reducing contact resistance and improving channel reliability.
New VP of Sales: Wei Na was hired as the new VP of Sales to grow sales and convert opportunities into licenses.
STMicroelectronics Collaboration: The collaboration with STMicroelectronics faced challenges as the MST technology failed to meet reliability specifications for their 200-millimeter platform. Despite finding a new implementation that improved performance without reducing device lifetime, ST decided not to incorporate it due to their aggressive BCD110 launch schedule. This resulted in the loss of a potential royalty revenue stream from ST for this program.
Revenue Generation Challenges: The company faces delays in revenue generation as MST technology integration into production processes is complex and time-consuming. This includes challenges in qualifying MST starting wafers and integrating MST into the middle of production lines, which requires significant validation cycles.
Financial Performance: The company reported a GAAP net loss of $5.6 million for Q3 2025, an increase from the previous year. Operating expenses, particularly in R&D and G&A, have risen, reflecting higher costs in device fabrication and stock compensation.
Customer Adoption and Market Penetration: While Atomera is engaged with multiple large customers across various segments, the adoption of MST technology is not guaranteed. The company faces competitive pressures and the need to demonstrate clear value to potential customers to secure licenses and revenue.
Supply Chain and Manufacturing: The company relies on external partnerships and collaborations for R&D and manufacturing, which could pose risks related to supply chain disruptions or delays in achieving milestones.
Future MST Implementation and Market Opportunities: Atomera has developed a high-performance MST implementation that eliminates the performance-reliability trade-off, which is being actively discussed with other market players. The company is engaging with customers in the power device market, including a large existing customer and a new engagement initiated this past quarter. Customers are evaluating MST for power devices between 5 volts and 48 volts.
Customer Engagements and Market Segments: Atomera is working with or in discussions with all major players in the Gate-All-Around space, two out of three large DRAM manufacturers, and multiple fabs and a fabless player in the RF-SOI area. The company processed a record number of wafers for customers in the last three months.
Revenue Prioritization and MST Starting Wafers: Atomera is prioritizing applications that use MST deposited on starting wafers to accelerate revenue. These applications include RF-SOI, GaN, and potentially next-generation DRAM. MST starting wafers allow for easier integration and shorter paths to revenue.
Strategic OEM Partnership: The partnership with a leading capital equipment company is advancing engagements in Gate-All-Around logic, memory, and power. Joint customer visits are planned to showcase MST's ability to solve manufacturing issues.
GaN Technology Development: Atomera is completing device fabrication in collaboration with Sandia National Labs to highlight improved electrical performance. The company plans to release a complete data set later this year as a precursor to a full-scale rollout.
New Material Innovations: Atomera is developing new materials enabled by MST for applications in quantum computing, AI server power, high-bandwidth memory architectures, and other areas. Several initiatives are in early investigation stages, with potential near-term disruptive technology announcements.
AI and Data Center Market Trends: The demand for power efficiency and thermal management in AI infrastructure and data centers is driving interest in MST's capabilities to boost performance and reliability.
Financial Guidance: Atomera expects to recognize $75,000 to $125,000 of NRE revenue in Q4 2025 from wafer shipments. Non-GAAP operating expenses for the full year 2025 are projected to be between $17.25 million and $17.50 million.
PSUs vesting conditions: PSUs will only vest if we deliver shareholder returns that meet minimum targets relative to the Russell 2000 Index.
The earnings call revealed a mixed outlook. While there are promising advancements in technology and partnerships, the financial performance showed increased losses, and there were delays in key projects. The Q&A session highlighted uncertainties, especially with STMicro's decision and lack of clear timelines for transformative projects. The financial health appears strained with rising expenses, and cash reserves are decreasing. These factors, combined with the lack of immediate revenue catalysts and unclear guidance, suggest a negative sentiment towards the stock in the short term.
The earnings call reflects mixed sentiments. The partnership with STMicro and interest from other companies are positive, but the financial performance shows increasing losses and uncertain revenue guidance. The Q&A reveals confidence in milestone payments and other companies' interest, but there's uncertainty in the timeline and execution risks. The unclear management responses and regulatory uncertainties add to the neutral sentiment. Without a clear market cap, the prediction remains neutral, indicating a potential stock price movement between -2% to 2%.
The earnings call revealed a missed EPS target and lack of future revenue guidance, which are negative indicators. While a new partnership was announced, its impact is limited due to non-disclosure of the partner's identity. The Q&A highlighted competitive and partnership risks, with unclear management responses adding to uncertainty. These factors suggest a negative sentiment, likely leading to a stock price decline of -2% to -8%.
The earnings call reveals several negative factors: a net loss increase, higher operating expenses, no revenue in Q1 2025, and cash flow challenges. Despite optimistic guidance and R&D progress, the reliance on a few key customers and competitive pressures pose risks. The Q&A highlights management's lack of transparency, further unsettling investors. The ATM facility and cash position offer some stability, but overall, the financial health and market uncertainties suggest a negative outlook for the stock price.
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