QuickLogic Corporation (QUIK) Earnings

Management highlights

• Core Operational Progress - The company has made significant progress toward 2026 goals, and narrowed its full-year 2026 revenue growth outlook to 70% to 80% from earlier ranges, maintaining the midpoint of prior guidance despite two delayed projects. - Q2 2026 non-GAAP gross margin hit 46.8%, up from 31% in Q2 2025 and 39.6% in Q1 2026, above the midpoint of guidance. Non-GAAP net loss narrowed to $1.1 million ($0.06 per share) from $1.5 million ($0.09 per share) in Q2 2025. - The $2.7 million ceiling GlobalFoundries 12OP process contract has received taped-out discrete FPGA test chips; a new 12LP eval kit for customer evaluations is scheduled to launch in Q4 2026, compatible with common third-party development environments for both defense and commercial customers. - Three full-year 2026 tapeouts are planned: one is already complete, with two additional tapeouts scheduled for late 2026. One of these late tapeouts will produce enough devices to support initial 2027 storefront production orders. • New Business and Customer Development - Two large potential eFPGA hard IP contracts are in late-stage negotiation: one for automotive, industrial automation, and robotics applications, and one for a low-earth orbit (LEO) satellite ASIC from an international customer. - A five-figure post-quantum cryptography feasibility study for a potential ESPGA IP architectural license was completed; initial results are promising, and management expects a full license could be signed by the end of 2026. - RadPro dev kit orders and deliveries continue, with multiple evaluations currently underway; management expects initial RadPro storefront device demand to begin in 2027, and the opportunity set for RadPro has expanded since the Q1 call as more customer groups have joined evaluations. - A new contract was awarded to qualify a smaller package option for existing mature one-time programmable anti-fuse FPGA products, which management expects will open a new multi-million dollar market with minimal ongoing investment. - The digital proof-of-concept strategy for chiplet customers has generated more than five active proposals across GlobalFoundries 12LP, Intel 18A, and Intel 18AP processes, with the 12LP eval kit expected to accelerate these opportunities. • Technology Transition - Most customer development work originally targeting Intel 18A has shifted to the upgraded Intel 18AP process, which delivers 9% higher performance at isotropic power or 18% lower power at isotropic performance. Porting costs for the existing Intel 18A eFPGA development to 18AP are de minimis, as existing work can be fully leveraged. - Management expects a follow-on $1 million contract for an Intel 18AP implementation from the customer that funded the original 18A 1 million LUT development, targeted for Q4 2026 delivery. Most new design activity will now focus on 18AP, with gradual transition for existing 18A projects.

Guidance

- Full-year 2026 revenue guidance: Narrowed to a 70% to 80% year-over-year growth range, with the midpoint unchanged from prior guidance even after two projects were pushed to 2027, as underlying pipeline progress offset these delays. - Q3 2026 revenue guidance: Flat sequentially at $5.5 million, plus or minus 10%, composed of $4.7 million new product revenue and $0.8 million mature product revenue. - Full-year 2026 mature product revenue guidance revised to flat with 2025 at ~$3.3 million, down from prior expectations of second half growth. - Non-GAAP gross margin guidance: Q3 expected to be ~47% plus or minus 5%; full-year 2026 expected to be approximately 51%. - Non-GAAP operating expense guidance: Q3 expected to be ~$3.6 million plus or minus 5%; full-year guidance raised to a range of $13.7 million to $13.9 million, representing 17% year-over-year growth, far outpaced by expected 70% to 80% revenue growth demonstrating operational leverage. - Q3 2026 non-GAAP net loss guidance: ~$900,000 ($0.05 per share). - Profitability and cash flow guidance: Management maintains guidance for non-GAAP profitability and positive operating cash flow in the second half of 2026. Q3 cash use is expected to be ~$400,000, with a closing net cash balance of slightly over $13 million. - Q4 2026 is expected to drive most full-year 2026 growth, with the U.S. government ceiling contract ($89 million total) contributing a significant percentage of total Q4 revenue.

Segment performance

QuickLogic reports two product segments for Q2 fiscal 2026: 1. New Products: Total Q2 revenue of $4.7 million, which represents 85.5% of total Q2 revenue. This is an increase of 59.7% year-over-year (vs Q2 2025) and an increase of 8.6% quarter-over-quarter (vs Q1 2026). 2. Mature Products: Total Q2 revenue of $0.8 million, which represents 14.5% of total Q2 revenue. This is an increase of 6.9% year-over-year (vs Q2 2025) and an increase of 8.8% quarter-over-quarter (vs Q1 2026). Aggregate Q2 2026 total revenue was $5.5 million, up 48.7% year-over-year and up 8.5% quarter-over-quarter. For Q3 2026, the expected revenue mix remains unchanged at $4.7 million in new product revenue and $0.8 million in mature product revenue. Full-year 2026 mature product revenue is now expected to be flat with 2025 at approximately $3.3 million.

Risks & headwinds

- Contract execution and timing risk: Delays in customer contract finalization or design decisions can push projected revenue into future periods, as seen with the delayed seven-figure existing customer contract extension and commercial ASIC design targeting Intel 18A, both pushed out of 2026 to 2027. - Technology ecosystem transition risk: A broader industry shift from Intel 18A to Intel 18AP could lead to temporary delays for existing 18A projects as customers re-evaluate design plans. - Regulatory, macroeconomic and competitive risks: Forward-looking results are subject to standard risks including delays in new product market acceptance, inability to convert design opportunities into revenue, supply chain disruptions, competition, ability to hire and retain staff, changes in tax rules, geopolitical trade disputes, natural disasters, and general economic conditions that can impact product demand and delivery. - Revenue recognition milestone risk: Q4 2026 growth depends on meeting contracted delivery milestones, which could slip to 2027 if execution timelines change. - NDA constraints: The company cannot disclose full details of many defense and customer programs, limiting transparency into near-term revenue opportunity scale.

Analyst Q&A

• Q: Analyst Neil Young asked about timing risk for Q4 2026 revenue, noting that most full-year growth is concentrated in Q4, and asked if any of this revenue is contingent on milestones that could slip into 2027. He also asked if the shift from Intel 18A to 18AP would delay existing 18A revenue. /

  A: Management stated engineering resources are already prioritized and scheduled to hit all required Q4 revenue recognition milestones, with engineering teams already aligned and in some cases starting pre-work on pending contracts. The only open item is finalizing a small number of new contracts on the business side. For the Intel 18A to 18AP transition, existing development work is fully leveraged, so porting is low-cost and fast. Most customers will transition gradually as the 18AP ecosystem matures, but some customers far along in 18A designs will still move forward, and the company has good coverage for all transition scenarios. (668 characters)

• Q: Analyst Tyler Burmeister asked if the RadPro opportunity set has changed since the Q1 call, after management noted more dev kits are shipping to customers for evaluation. /

  A: Management confirmed that the opportunity set has expanded, as the availability of real silicon and dev kits has drawn interest from customers that previously were in a wait-and-see position. More customer groups are now engaged than at the time of the Q1 call, which management views as an encouraging sign for future 2027 storefront revenue. The company cannot disclose exact numbers due to non-disclosure agreements for these programs. (397 characters)

• Q: Analyst Gus Richard asked for an update on the U.S. government RadHard contract, and asked what eFPGA IP revenue can be expected for the second half of 2026, after the delayed contract extension was removed from guidance. /

  A: Management confirmed the current $13 million tranche of the government contract will be fully recognized in fiscal 2026, with the majority of this recognition coming in Q4. Management expects a new tranche to be secured before the end of 2026. Total eFPGA IP revenue (including government work) for the second half of 2026 is expected to be between $8 million and $10 million, and the company does not need to win all late-stage negotiations to hit full-year guidance. (467 characters)

• Q: Analyst Rick Neaton asked how QuickLogic's eFPGA technology fits into post-quantum cryptography (PQC), and what the opportunity timeline and end markets look like. /

  A: Management explained that PQC algorithms are still evolving, so system operators want flexibility to update cryptography after chip deployment, which is a perfect use case for eFPGA. Interest comes from both defense and non-defense critical infrastructure, reinforced by recent U.S. government requirements. The current collaboration is with commercial companies (unlike earlier academic research projects) and is much closer to generating real near-term revenue for QuickLogic. (412 characters)