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01/10 19:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue $13.2 million, up from $9.9 million in Q2 '24. This increase was driven by strength across all products, particularly in data center, industrial automation, and LEO applications.
MRAM Product Sales $11.1 million, compared to $9.9 million in Q2 '24. The growth was attributed to strong demand for Toggle and STT-MRAM products.
Licensing, Royalty, Patent, and Other Revenue $2.1 million, compared to $0.7 million in Q2 '24. This increase was driven by the ramp in the contract with Purdue University.
Gross Margin 51.3%, up from 49% in Q2 '24. The increase was due to a larger mix of high-margin licensing and other revenue.
GAAP Operating Expenses $8.7 million, up from $8.0 million in Q2 '24. The increase was not attributed to specific reasons in the transcript.
Non-GAAP Net Income $0.7 million or $0.03 per diluted share, compared to a non-GAAP net loss of $0.6 million or a loss of $0.03 per share in Q2 '24. This improvement was due to increased revenue and financial discipline.
Cash and Cash Equivalents $45.0 million, up $2.8 million from $42.2 million at the end of the prior quarter. The increase was driven by improved accounts receivable collections.
Cash Flow from Operations $5.0 million, up from $1.4 million in the first quarter. This increase was driven by improved accounts receivable collections.
Revenue from PERSYST 1 gigabit STT-MRAM: Steady revenue from IBM's FlashCore Module 4 for data center applications, expected to remain consistent for the year.
New xSPI family products: Shipped engineering samples for PERSYST EM064LX HR and EM128LX HR, targeting aerospace, defense, and extreme industrial environments. Full production expected in late 2025.
Automotive MRAM solution: Continued revenue from Lucid Motors for Gravity SUV, with expected volume increase as production ramps.
Data center growth: High single-digit sequential growth driven by RAID demand from customers like Dell and Supermicro.
Industrial automation: Over 20% sequential growth in programmable logic controllers (PLCs) and momentum in industrial xSPI product.
Aerospace and defense: Traction in space and aerospace segments for MRAM in LEO deployments and radiation-hard STT-MRAM macros.
Revenue growth: Q2 revenue of $13.2 million, at the high end of guidance, with $11.1 million from MRAM product sales.
Gross margin: GAAP gross margin of 51.3%, up from 49% in Q2 2024 due to high-margin licensing revenue.
Cash flow: Cash flow from operations increased to $5.0 million, up from $1.4 million in Q1.
Executive team expansion: Hired Sean Dougherty as VP of Sales to focus on scaling business and enhancing sales efforts.
Government contracts: Progress in DoD contract for MRAM manufacturing sustainment and Purdue University collaboration for energy-efficient AI solutions.
Tariff-related impact: The company did not experience any tariff-related impact in the second quarter and does not expect any material tariff-related impact in the coming quarters. However, this is contingent on further guidance from the Trump administration, indicating potential regulatory uncertainty.
Seasonality of revenue: The company expects 2025 revenue to be more heavily weighted towards the second half of the year due to typical seasonality, which could pose challenges in maintaining consistent cash flow and operational stability in the earlier quarters.
Dependence on specific contracts: Revenue from contracts such as the DoD contractor and Purdue University projects is significant. Any delays or issues in these contracts could adversely impact financial performance.
Product ramp-up timelines: The company plans to ramp up production of new products in late 2025. Delays in this timeline could impact revenue growth and market competitiveness.
Economic uncertainties: The company is utilizing cash reserves as a hedge against macroeconomic uncertainty, indicating potential risks from broader economic conditions.
Regulatory and compliance risks: The company is involved in government contracts and projects, such as with the DoD contractor and Purdue University, which may carry regulatory and compliance risks.
Revenue Expectations: The company expects Q3 2025 total revenue to be in the range of $13.5 million to $14.5 million.
Net Income Projections: GAAP net loss per fully diluted share is expected to be between $0.05 and breakeven. On a non-GAAP basis, net income per fully diluted share is anticipated to be between $0.02 and $0.07.
Seasonality Impact: The company expects 2025 to be more heavily weighted towards the second half of the year due to typical seasonality.
Product Revenue: Revenue from the PERSYST 1 gigabit STT-MRAM into IBM's FlashCore Module 4 is expected to remain consistent for the remainder of the year. Volumes for the PERSYST MRAM solution for Lucid Motors' Gravity SUV are expected to increase as production ramps.
New Product Launches: The company plans to ramp to full production of the PERSYST EM064LX HR and EM128LX HR products in late 2025.
Contract Revenue: The company expects meaningful pickup in revenue from the $14.6 million DoD contract in the fourth quarter of 2025.
The selected topic was not discussed 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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