QUICKLOGIC Corp Q1 FY2025 earnings call

• Intel 18A eFPGA Hard IP: First contract awarded, test chip delivered for Intel 18A test chip, second contract delayed but customer engagements accelerating. Presented at Intel Foundry Direct Connect 2025.
• Faraday FlashKit 22RRAM SoC: Inclusion of eFPGA Hard IP in development platform, potential for production eFPGA Hard IP license revenue in H2 2025 and royalties in future years.
• Strategic Radiation Hardened FPGA contract: $6.6 million award, $1.4 million incremental funding, development for strategic and space applications with customer interest in storefront use.
• eFPGA Hard IP contracts: Progress on GF 12-LP, TSMC 12-nanometer, GF 22FDX nodes, with storefront potential for some contracts.
• Chiplets: Early discussions for COTS market digital proof of concept leveraging proprietary software tools.
• SensiML: Board exploring options for sale, no contributions to full-year outlook.

Total first quarter revenue was $4.3 million, with new product revenue at $3.8 million and mature product revenue at $0.6 million. Non-GAAP gross margin in Q1 was 45.7%. Non-GAAP operating expenses in Q1 were approximately $3 million. Non-GAAP net loss was $1.1 million, or $0.07 per diluted share. Cash at the close of Q1 was $17.6 million, inclusive of a $15 million credit facility.

• Q2 2025 revenue guidance: Approximately $4 million, plus or minus 10%, with new products ~$3.4M and mature products ~$0.6M. Q2 non-GAAP gross margin expected ~50% ±5%, non-GAAP operating expenses ~$3M ±5%, non-GAAP net loss ~$1.1M to $1.2M.
• Full-year outlook: Solid revenue growth, non-GAAP profitability, positive cash flow.

• Delays in market acceptance of new products.
• Ability to convert design opportunities to customer revenue.
• Replacement of revenue from end-of-life products.
• Timing of customer design activity.
• Market acceptance of customers' products.
• New orders not leading to future revenue.
• Timely introduction of new products based on advanced wafer technology.
• Marketing of new products' low-power, pricing, time-to-market.
• Intense competition.
• Hiring and retaining qualified personnel.
• Changes in product demand/supply.
• General economic conditions, political events, international trade disputes, natural disasters.
• Changes in tax rates and exposure to additional tax liabilities.

Q: Quinn Bolton from Needham & Company asked about the ramp of Intel 18A and revenue/royalties.

A: Brian Faith responded about Intel 18A progress, TRL curve, and revenue/royalties timeline, mentioning 18A license revenue forecasted this fiscal year with storefront and royalty potential.

Q: Rick Neaton from Rivershore Investment Research asked about storefront opportunities and Faraday.

A: Brian Faith discussed storefront opportunities, Faraday's relation to UMC, and future nodes, noting Faraday was a spin-off and opportunities for next nodes like 12-nanometer.

Q: Richard Shannon from Craig Hallam asked about Rad-Hard program storefront revenues and Faraday.

A: Brian Faith responded about Rad-Hard program timeline and Faraday's role in underscoring the storefront business model, with Elias Nader adding on full-year outlook expectations.

Q: Martin Yang from Oppenheimer asked about Faraday's go-to-market and end markets.

A: Brian Faith answered about Faraday being the primary interface to customers for embedded FPGA sales and applicable end markets in low power, industrial, and IoT applications.