EVERSPIN TECHNOLOGIES INC. Q3 FY2024 earnings call

• Key wins included selection of 1 gigabit PERSYST STT-MRAM for IBM's FlashCore Module 4 and Lucid Gravity SUV. • Started recognizing revenue for PERSYST 1 gigabit STT-MRAM in IBM's FCM4 for data centers, expecting parts supply for next 2 years. • Modest growth in Toggle MRAM PERSYST products, with signs of inventory consumption and distributor inventory decrease. • Strong traction with 4 megabit to 128 megabit STT-MRAM PERSYST products, optimistic about adoption. • Announced $9.25 million contract with Frontgrade for radiation hardened STT-MRAM, 2 other RadHard programs on track. • Shipped Toggle MRAM for Lucid Gravity SUV prototypes, expect revenue for next 2 years. • Won project with Purdue University for AI hardware, expect revenue in Q4 2024. • Attended automotive chiplet forum, supporting SST-MRAM chiplets in automotive sector. • Progressing well with TMR sensor project, expect NRE and foundry revenue in Q4.

For the third quarter of 2024, MRAM product sales were $10.4 million, down from $13.5 million in Q3 2023. Licensing, royalty, patent and other revenue was $1.7 million, down from $2.9 million in Q3 2023. GAAP gross margin was 49.2% in Q3 2024, compared to 60.2% in Q3 2023. Revenue of $12.1 million was in line with guidance, and EPS was $0.10 ahead of the guidance range.

• Q3 revenue was $12.1 million, in line with guidance; EPS $0.10 ahead of guidance range. • Q4 total revenue expected in range of $12 million to $13 million; GAAP net income per diluted share between breakeven and $0.05. • Product revenue expected to be essentially flat with Q3; expect inventory consumption to drive additional demand in coming quarters.

• Forward-looking statements involve risks and uncertainties affecting actual results. • Risks related to MRAM technology adoption, product market entry, and business plan execution. • Uncertainties in meeting DOD contract technical tasks and deliverables. • Currency dynamics and market conditions in Europe and Japan impacting revenue.

Q: On the onshore MRAM strategic award, why is it recognized in other income?

A: Analyzed against ASC-606, it didn't fit revenue recognition criteria, so recognized as other income.

Q: Why did gross margin stay flat despite licensing revenue?

A: Lower demand for toggle products led to absorbing fixed costs with fewer units.

Q: Product revenue flat in Q4 guidance?

A: PERSYST STT-MRAM product ramp in 2025; existing products have modest growth, conservatism in plan; Japan and Europe markets challenging.

Q: Differences between PERSYST, Unisys, AgILYST?

A: PERSYST for fast reads/writes and unlimited cycles; Unisys for fewer reads/writes but fast; AgILYST research for zero standby current and SRAM speeds for AI.

Q: Details on Purdue program?

A: No signed contract, learning to tune STT-MRAM for AI, no immediate product solutions from project.