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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. 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.
Revenue $14.1 million, up 16% year-over-year, driven by higher product sales.
MRAM Product Sales $12.7 million, up 22% over the third quarter of last year, attributed to increased demand for Toggle and STT-MRAM products.
Licensing, Royalty, Patent and Other Revenue $1.4 million, decreased from $1.7 million in Q3 '24, due to the completion of projects in Q4 '24 and Q1 '25 that were active in Q3 '24.
Gross Margin 51.3%, up just over 200 basis points from 49.2% in Q3 2024, due to improving yields on STT products driven by process improvements.
GAAP Operating Expenses $8.8 million, increased from $8.1 million in Q3 2024, attributed to slight sequential increases.
Other Income $1.2 million, related to a strategic award for developing a long-term plan for Aerospace and Defense manufacturing services.
Non-GAAP Net Income $1.5 million or $0.06 per diluted share, decreased from $3.8 million or $0.17 per share in Q3 2024, due to lower other income from lumpiness in DoD MRAM contract services.
Cash and Cash Equivalents $45.3 million, up $0.3 million from $45 million at the end of the prior quarter.
Cash Flow from Operations $0.9 million, decreased from $5 million in the second quarter, driven by higher collections on receivables and a change in distributors.
Revenue from PERSYST 1 gigabit STT-MRAM: Remained consistent with the prior quarter, used in IBM's FlashCore Module 4 for data center applications.
PERSYST MRAM solution for Lucid Motors: Continued shipments for Gravity SUV, with expected volume increase as production ramps.
Engineering samples of PERSYST EM064LX HR and EM128LX HR: Shipped to several LEO satellite customers, with full production expected in Q4 2025.
LEO satellite market: Expected rapid growth; Everspin MRAM is well-suited for extreme conditions. Design wins with Astro Digital and Blue Origin.
Data center market: Continued demand for Toggle MRAM products for RAID applications from customers like Dell and Supermicro.
Automotive, industrial, and edge applications: Strategic collaboration with Quintauris to enhance RISC-V-based platforms with MRAM offerings.
Gross margin improvement: Improved to 51.3% in Q3 2025, up from 49.2% in Q3 2024, due to process improvements.
Cash and cash equivalents: Increased to $45.3 million, up $0.3 million from the prior quarter.
Operational cash flow: Decreased to $0.9 million in Q3 from $5 million in Q2, due to changes in receivables and distributors.
Collaboration with Quintauris: Focused on enhancing reliability and safety of RISC-V-based platforms for critical applications.
DoD contract: $14.6 million contract to develop a sustainment plan for MRAM manufacturing facilities, with meaningful revenue expected in Q4.
LEO Satellite Market Dependency: The company's reliance on the LEO satellite market, which has a short lifespan of 3 to 5 years for satellites, poses a risk due to the need for continuous design wins and market growth to sustain revenue.
Revenue Concentration: Revenue from specific projects, such as IBM's FlashCore Module 4 and Lucid Motors' Gravity SUV, is consistent but limited in growth, which could impact financial performance if these projects do not scale as expected.
Licensing and Royalty Revenue Decline: Licensing, royalty, and other revenue decreased year-over-year, reflecting the completion of prior projects and potential challenges in securing new contracts.
DoD Contract Lumpiness: The company's revenue from the Department of Defense (DoD) contract is subject to variability, which could lead to financial unpredictability.
Automotive Market Ramp-Up Risk: The expected increase in volumes for Lucid Motors' Gravity SUV is contingent on the automaker's production ramp-up, which introduces uncertainty.
Supply Chain and Production Risks: The company’s reliance on process improvements and collaboration with foundry partners for STT products introduces risks related to supply chain and production consistency.
Economic and Market Conditions: General economic uncertainties and market conditions could impact demand for the company's products across various sectors.
LEO Satellite Market Growth: The LEO satellite market is expected to grow rapidly in the coming years. Everspin MRAM, with its reliability at extreme temperatures and harsh ambient conditions, is ideally suited for these deployments. Design wins in this market with multiple Everspin MRAM parts per satellite are expected to translate into meaningful revenue as the market grows.
PERSYST 1 Gigabit STT-MRAM Revenue: Revenue from the sale of PERSYST 1 gigabit STT-MRAM into IBM's FlashCore Module 4 for data center applications is anticipated to remain consistent for the remainder of the year.
Lucid Motors Gravity SUV Production: Everspin continues to ship and recognize revenue for its PERSYST MRAM solution from Lucid Motors for their Gravity SUV and expects volumes to increase as the automaker ramps production.
PERSYST EM064LX HR and EM128LX HR Production: Everspin remains on track to ramp to full production of the PERSYST EM064LX HR and EM128LX HR in the fourth quarter of 2025, following continued shipment of engineering samples to several LEO satellite customers.
DoD MRAM Manufacturing Contract: Everspin expects business from its $14.6 million contract with a DoD contractor to develop a sustainment plan for MRAM manufacturing facilities to pick up meaningfully in the fourth quarter.
Q4 2025 Revenue and Earnings Guidance: Everspin expects Q4 total revenue in the range of $14 million to $15 million, and GAAP net income per fully diluted share to be between $0.02 and $0.07. On a non-GAAP basis, net income per fully diluted share is anticipated to be between $0.08 and $0.13.
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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