Everspin Technologies’ Mixed Earnings Call Insights

Everspin Technologies Inc ((MRAM)) has held its Q4 earnings call. Read on for the main highlights of the call.

Everspin Technologies Inc. recently held its earnings call, presenting a mixed sentiment. While the company showcased strong fourth-quarter results, including design wins and successful partnerships, the full-year performance was marred by a decline in revenue, decreased licensing income, and lower gross margins. Despite these challenges, the company’s robust cash position and ongoing projects offer a positive outlook for the future.

Strong Fourth Quarter Performance

Everspin Technologies reported impressive fourth-quarter revenue of $13.2 million, surpassing expectations, with an EPS of $0.05 at the high end of guidance. This strong performance was driven by product revenue and RadHard projects, highlighting the company’s operational strengths.

Significant Design Wins

The company achieved a remarkable 178 design wins in 2024, showcasing strong momentum in product adoption across various industries, including aerospace, military, and automotive sectors. This indicates a growing acceptance and demand for Everspin’s innovative solutions.

Successful Partnership with Lattice Semiconductor

Everspin’s collaboration with Lattice Semiconductor proved fruitful, as their STT-MRAM persist family was validated for configuration across all Lattice Semiconductor FPGAs. This partnership enhances Everspin’s role as a reliable configuration memory device provider.

Strong Cash Position

Everspin ended the quarter with a solid cash position of $42.1 million, an increase of $2.5 million from the previous quarter, while maintaining a debt-free status. This financial strength provides the company with flexibility for future investments and growth.

Ongoing RadHard Projects

Everspin continues to make progress on its RadHard projects, including a significant contract with Purdue University to advance AI hardware. Additionally, ongoing revenue recognition from a $9.25 million Frontgrade Technologies project underscores the company’s commitment to innovation.

Year-over-Year Revenue Decline

Despite the strong quarterly performance, Everspin faced a 21% decline in total revenue for the full year, amounting to $50.4 million. This drop was primarily due to lower product shipments, especially in the distribution channel.

Decreased Licensing and Other Revenue

Licensing, royalty, patent, and other revenue decreased significantly in the fourth quarter to $2.2 million from $4.3 million in Q4 ’23. This decline was attributed to the completion of certain projects.

Lower Gross Margin

The GAAP gross margin for the fourth quarter fell to 51.3% from 58.1% in Q4 ’23, primarily due to lower volumes. This decrease highlights the challenges Everspin faces in maintaining profitability amid fluctuating demand.

Projected First Quarter Loss

Everspin’s guidance for the first quarter of 2025 projects a net loss per basic share between $0.10 and $0.05, reflecting lower expected other income and typical seasonality. The company anticipates revenue between $12 million and $13 million, with a strategic focus on scaling their business and converting design wins into revenue.

Forward-Looking Guidance

The management provided cautious guidance for Q1 2025, projecting total revenue between $12 million and $13 million, with a GAAP net loss per basic share ranging from $0.10 to $0.05. Everspin plans to shift its non-GAAP metrics to align with industry standards and focus on scaling their business, particularly emphasizing RadHard projects and collaborations, such as the one with Purdue University.

In summary, Everspin Technologies Inc.’s earnings call painted a mixed picture, with strong quarterly results overshadowed by a challenging full-year performance. The company’s robust cash position and strategic projects offer a positive outlook, despite the projected first-quarter loss. Investors will be keenly watching Everspin’s ability to convert design wins into revenue and navigate the ongoing challenges in the market.