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01/10 19:12
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook: strong financial performance with revenue exceeding guidance, but a decline in licensing revenue and net income. Product development and strategic partnerships are positive, but challenges like supply chain issues and competitive pressures exist. The lack of a shareholder return plan and unclear management responses in the Q&A add uncertainty. While financial health is stable, the absence of guidance adjustments and potential market risks suggest a neutral stock price reaction.
Revenue $13,100,000, up from $12,000,000 to $13,000,000 guidance range, driven by stronger than expected product revenue.
MRAM Product Sales $11,000,000, consistent with Q4 2024 and up from $10,900,000 in Q1 2024.
Licensing, Royalty, Patent and Other Revenue $2,100,000, down from $3,600,000 in Q1 2024 due to lower revenue from the Front Grade project.
GAAP Gross Margin 51.4%, slightly up from 51.3% in Q4 2024, but down from 56.5% in Q1 2024 due to a lower mix of high margin licensing and other revenue.
GAAP Operating Expenses $8,700,000, down from $8,800,000 in Q1 2024.
Non-GAAP Net Income $400,000 or $0.02 per diluted share, down from $1,500,000 or $0.07 per diluted share in Q1 2024 due to lower licensing revenue.
Cash and Cash Equivalents $42,200,000, up $100,000 from $42,100,000 at the end of the prior quarter.
Cash Flow from Operations $1,400,000 for the first quarter.
Inventories Increased sequentially due to stock for existing and new products and uncertainty in macro business conditions.
New Products: Everspin announced two new products as part of the xPy family, the Persist EM064LX HR and EM128LX HR, featuring an expanded temperature range of -40°C to +125°C, meeting AEC Q100 grade one standard for automotive applications. Engineering samples will be available in June 2025, with full production scheduled for late 2025.
Market Expansion: Everspin continues to ship and recognize revenue from its Persist MRAM solution for Lucid Motors' Gravity SUV, which is currently accepting orders. The company has also secured design wins with Bugatti and is utilized by five companies in the auto industry for data capture.
Licensing Revenue: Everspin completed the first phase of a $9,250,000 project with Front Grade Technologies to develop a custom radiation-hardened STT MRAM macro, entering the second phase to validate the design on silicon.
Operational Efficiencies: Everspin's GAAP gross margin was 51.4% for Q1 2025, slightly up from 51.3% in Q4 2024, but down from 56.5% in Q1 2024 due to a lower mix of high-margin licensing revenue.
Production Capacity: Everspin completed qualification and is now at a steady state of production for a leading provider of sensor devices, providing foundry services for their latest generation TMR sensor device.
Strategic Partnerships: Everspin is partnered with Blue Origin for the Blue Moon Mark One lander mission and has been selected by AstroDigital for their deep space mission, utilizing Everspin's MRAM for critical satellite operations.
Regulatory Issues: The company is monitoring the fluid situation regarding tariffs, particularly those affecting shipments to China, although they do not expect a direct material impact on their results.
Supply Chain Challenges: There is uncertainty in macro business conditions affecting inventory levels, as the company increased stock for existing and new products.
Economic Factors: The company noted a potential impact from trade rhetoric and actions, which could affect their operations and financial results.
Competitive Pressures: The company faces competition in the MRAM market, particularly as they aim to convert design wins into revenue.
Project Execution Risks: The company is entering the second phase of several projects, which involves risks associated with validating designs on silicon and meeting project milestones.
Market Demand Fluctuations: The company is experiencing a backlog improvement, but there are still uncertainties regarding the timing and volume of orders in the industrial segment.
Product Revenue: Everspin reported product revenue of $11,000,000 in Q1 2025, driven by sales of the Persist one gigabit STTM RAM into IBM’s FlashCore Module 4.
Licensing and Other Revenue: The company completed the first phase of a $9,250,000 project with Front Grade Technologies and signed the next phase with QuickLogic.
New Product Launches: Everspin announced two new products in the xPy family, the Persist EM064LX HR and EM128LX HR, with engineering samples available in June 2025.
Strategic Partnerships: Everspin is partnered with Blue Origin for the Blue Moon Mark one lander mission and AstroDigital for deep space missions.
Q2 2025 Revenue Guidance: Everspin expects Q2 2025 total revenue in the range of $12,500,000 to $13,500,000.
2025 Outlook: The company anticipates a stronger second half of 2025 due to typical seasonality and increased traction in product sales.
Gross Margin Expectations: Everspin expects gross margins to remain consistent at around 51% for the remainder of the year.
Non-GAAP Net Income Guidance: For Q2 2025, Everspin anticipates non-GAAP net income per basic share to be between breakeven and $0.05.
Shareholder Return Plan: Everspin Technologies did not announce any share buyback program or dividend program during the call.
The earnings call presents a mixed outlook. While there is a positive increase in revenue and product sales, the dependency on specific markets, revenue concentration, and potential risks in automotive ramp-up and supply chain pose concerns. The Q&A session highlighted some financial uncertainties and vague explanations, particularly in licensing and royalty revenues. Although there's optimism in product development and gross margin improvements, the lack of strong positive catalysts or guidance adjustments results in a neutral sentiment for the stock price movement.
Everspin's earnings call indicates strong financial performance with increased revenue and gross margins, driven by demand in key sectors. New product launches and strategic partnerships with companies like Blue Origin are promising. Despite some uncertainties in contract timelines and regulatory risks, the guidance remains optimistic, expecting growth in the latter half of 2025. The Q&A session revealed management's focus on improving margins and expanding product contributions. Overall, the positive revenue growth, strategic developments, and optimistic guidance suggest a positive stock price movement in the near term.
The earnings call presents a mixed outlook: strong financial performance with revenue exceeding guidance, but a decline in licensing revenue and net income. Product development and strategic partnerships are positive, but challenges like supply chain issues and competitive pressures exist. The lack of a shareholder return plan and unclear management responses in the Q&A add uncertainty. While financial health is stable, the absence of guidance adjustments and potential market risks suggest a neutral stock price reaction.
The earnings call presents a mixed picture: while revenue slightly exceeded guidance, licensing revenue dropped significantly. The guidance suggests a potential improvement in the second half of 2025, but competitive pressures and economic uncertainties pose risks. The Q&A revealed limited exposure to China tariffs and some backlog improvement, but management's lack of clarity on margins and product/licensing splits raises concerns. With no share repurchase program and a lack of strong catalysts, the stock price is likely to remain stable, resulting in a neutral sentiment.
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