EVERSPIN TECHNOLOGIES INC. Q4 FY2024 earnings call

• Sanjeev welcomed Bill Cooper as Chief Financial Officer and thanked Matt Tenorio for his interim role. - Q4 results showed revenue of $13.2M above expectations, EPS of $0.05 at the high end of guidance. - Progress on RadHard deals, including contract with Purdue University, project with QuickLogic, and validation of MRAM for Lattice Semiconductor FPGAs. - 178 design wins in 2024, pipeline of new design wins strong. - Recognized revenue from various projects including with Purdue, QuickLogic, and a DOD contractor. - Update on awards contributing to future revenue, including the Purdue contract and others.

Fourth quarter revenue was $13.2 million, above the guidance range of $12M to $13M. Full year 2024 total revenue was $50.4 million, down 21% year-over-year due to lower product shipments, primarily into the distribution channel. MRAM product sales in the fourth quarter were $11 million, compared to $12.4 million in Q4 '23. Licensing, royalty, patent and other revenue in the fourth quarter decreased to $2.2 million compared to $4.3 million in Q4 '23. GAAP gross margin for the fourth quarter was 51.3%, up from 49.2% in the third quarter but down from 58.1% in Q4 '23. For the full year, GAAP gross margin was 51.8%, down from 58.4% in 2023.

• Expect 2025 to be weighted more heavily towards the second half due to seasonality and Asian inventory. - Q1 2025 total revenue expected in the range of $12 million to $13 million. - GAAP net loss per basic share anticipated between a loss of $0.10 and $0.05 per share. - Non-GAAP net loss per basic share anticipated between $0.05 to break even.

• Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially. - Revenue from milestone-based projects like the DOD contract is volatile based on achievement of technical tasks and deliverables.

Q: How does the first quarter guidance differ from the fourth quarter, especially regarding other income?

A: The momentum program in Q1 is lighter than in Q4 due to milestone-based revenue, with other income being significantly lower. Q1 will have more than a million dollars less in other income compared to Q4.

Q: Can you characterize the Lattice Semiconductor partnership and its revenue contribution?

A: The Lattice partnership with the Lattice radiant software suite makes it easier for customers to use Lattice FPGA with Everspin's PERSYST MRAM, but there is no direct revenue exchange with Lattice. It is expected to accelerate design wins and qualifications but no specific revenue number can be put directly to this collaboration.

Q: What's the visibility on the contract with Purdue University and revenue recognition?

A: The project with Purdue is over four years, DOD reviews progress annually for renewal. The total value to Everspin is ~$10.5 million with ~$4 million for the first year. Revenue is milestone-based, congruent with achieved milestones.

Q: What are the risks and opportunities in RadHard projects given exposure to defense markets?

A: There is limited visibility on future DOD policies. Current RadHard projects like with QuickLogic, Frontgrade, and Purdue are moving forward without issues, but new projects may be affected by policy decisions. Opportunities exist as projects continue to advance, but near-term risks are uncertain due to lack of visibility on upcoming policies.