GuruFocus -
- Revenue: $12.1 million for Q3 2024, compared to $16.5 million in Q3 2023.
- MRAM Product Sales: $10.4 million in Q3 2024, down from $13.5 million in Q3 2023.
- Licensing, Royalty, Patent, and Other Revenue: $1.7 million in Q3 2024, compared to $2.9 million in Q3 2023.
- Gross Margin: 49.2% for Q3 2024, down from 60.2% in Q3 2023.
- GAAP Operating Expenses: $8.1 million in Q3 2024, compared to $7.9 million in Q3 2023.
- GAAP Net Income: $2.3 million or $0.10 per diluted share in Q3 2024, compared to $2.4 million or $0.11 per diluted share in Q3 2023.
- Adjusted EBITDA: $4.2 million in Q3 2024, compared to $4 million in Q3 2023.
- Cash and Cash Equivalents: $39.6 million at the end of Q3 2024, up from $36.8 million at the end of the prior quarter.
- Cash Flow from Operations: $2.8 million for Q3 2024.
- Q4 2024 Revenue Guidance: Expected to be in the range of $12 million to $13 million.
- Q4 2024 GAAP Net Income Guidance: Expected to be between breakeven and $0.05 per diluted share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Everspin Technologies Inc (NASDAQ:MRAM) reported third-quarter revenue of $12.1 million, in line with guidance, and EPS of $0.10, ahead of expectations.
- The company secured key wins, including the selection of its one gigabit persist STT-MRAM for IBM (NYSE:IBM)'s FlashCore Module 4 and a persist toggle MRAM for Lucid Motors' Gravity SUV.
- Everspin ended the quarter with a strong balance sheet, holding $39.6 million in cash.
- The company began recognizing revenue from a new $9.25 million contract with Frontgrade Technologies, a Department of Defense contractor.
- Everspin received a $14.6 million award from a DoD contractor to develop a sustainment plan for its MR manufacturing facility, contributing to other income.
- Year-over-year revenue decreased from $16.5 million in Q3 2023 to $12.1 million in Q3 2024, primarily due to a decline in product sales.
- Gross margin decreased to 49.2% from 60.2% in the previous year, impacted by lower product sales and licensing revenue.
- The company experienced a decline in licensing, royalty, patent, and other revenue, dropping from $2.9 million in Q3 2023 to $1.7 million in Q3 2024.
- Challenges in the Japanese and European markets, particularly Germany, are impacting revenue growth.
- The persist STT-MRAM product line, despite design wins, is not expected to significantly contribute to revenue until 2025 due to long qualification times.
A: Matthew Tenorio, Interim Chief Financial Officer: We analyzed the contract and our performance obligations against the revenue recognition standard ASC 606 and found that it did not fit within that framework. Therefore, we decided to recognize it as other income below the line.
Q: Gross margin was relatively flat sequentially despite an increase in licensing revenue. Can you explain what kept margins flat?
A: Matthew Tenorio, Interim Chief Financial Officer: We continue to see the effect of lower demand for our toggle products, which run through the Chandler fab facility. We are absorbing the fixed costs associated with that facility against a smaller amount of units flowing through it. We expect this to improve moving forward.
Q: How is the DoD contractor award being recognized, and how does it fit into your guidance for the fourth quarter?
A: Matthew Tenorio, Interim Chief Financial Officer: We will recognize it over 2.5 years based on efforts and milestones in the agreement. It contributes to our guidance, along with other rad hard projects and continued STT-MRAM data center strength.
Q: Can you clarify the differences between Persist, Unisys, and Agile product lines and their specific use cases?
A: Sanjeev Aggarwal, President and CEO: The Persist family is for fast read/write and high endurance applications like industrial automation and aerospace. Unisys is for fewer read/write cycles, suitable for automotive and industrial applications. Agile is in research, focusing on fast data logging and zero standby current for AI solutions.
Q: Can you provide more details on the Purdue program and its expected contributions?
A: Sanjeev Aggarwal, President and CEO: We haven't signed the contract yet, so financial contributions are unclear. The project aims to tune our STT-MRAM technology for AI solutions, focusing on fast read/write and high signal margins. The project will not directly lead to product solutions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.