EVERSPIN TECHNOLOGIES INC. Q1 FY2026 earnings call

• Announced a new two and a half year, $40 million agreement with a US prime contractor as a subcontractor, providing process technology and engineering services. - First quarter results: revenue at high end of guidance range, driven by industrial automation, transportation, and data center applications. - Product development: formally introduced Unisys MRAM family at Embedded World, designed for embedded systems. - Work with IBM on FCM4 and FCM5 modules in data center. - Transportation segment growth from design wins to production for rail applications.

In the first quarter, revenue was $14.9 million. MRAM product sales, including toggle and STT MRAM, were $14.1 million, accounting for a significant portion of the revenue. Other income was $0.8 million. GAAP gross margin increased to 52.7% due to higher capacity utilization. Industrial automation grew with customer demand recovery, transportation saw growth from design wins to production, and data center growth continued with work on IBM modules.

• Excluding impact of new subcontractor agreement, Q2 total revenue expected in range of $15.5 million to $16.5 million. - GAAP results for fully diluted share: net loss between $0.12 to $0.07. - Non-GAAP basis: between break-even and net income of $0.03 per fully diluted share. These non-GAAP figures exclude patent litigation costs and stock-based compensation expense.

Forward-looking statements based on estimates, judgments, etc., may differ materially. Actual results may differ due to financial closing procedures, final adjustments, etc. Need to review company's SEC filings for risk factors associated with investing.

Q: About the $40 million contract, shape of revenue layering and milestones?

A: No guidance yet on that contract but expect significant positive impact.

Q: What drove gross margin strength?

A: Higher capacity utilization and efforts to reduce costs and improve yields.

Q: About contract interrelation?

A: RFI for 300-millimeter MRAM line independent of other contracts; $14.6 million contract, microchip foundry agreement, and new contract are separate.

Q: About CapEx and microchip agreement?

A: Capital spend flurry related to Chandler facility improvements will settle, Foundry Services Agreement with Microchip will have significant capital spend over next two years.

Q: About new product market share?

A: Unisys MRAM family's market target is $3 billion TAM, goal to capture 5-10% early on but qualification takes 18-24 months so early on after that period