NLST

• Overall Financial and Product Performance

  • Delivered two consecutive quarters of strong top- and bottom-line growth, with H1 2026 total revenue exceeding $200 million and total gross profit exceeding $45 million, driven by strong industry demand and constrained memory product supply that is projected to continue into 2027.
  • The Lightning portfolio of overclocked, low-latency DDR5 solutions continues to gain market traction, with Netlist-branded products already generating low double-digit millions in revenue.
  • Next-generation CXL NV Vault is currently sampling with SOC vendors, hyperscalers, and major OEMs; Netlist has partnered with industry groups to drive adoption and will showcase collaborative work at the upcoming CXL Mini DevCon 2026.
  • Development of MRDEM high-performance server memory (designed to overcome conventional DDR5 bandwidth limits) is ongoing; the addressable MRDEM market is forecast to hit $100 billion by 2030, and Netlist holds over a dozen foundational MRDEM patents.

• Intellectual Property and Litigation Progress

  • In June 2026, Netlist expanded legal actions against Samsung at the ITC and the U.S. District Court for the Eastern District of Texas, alleging infringement of two newly issued patents covering HBM, DDR5 RDIMMs, and MRDIMMs.
  • The ITC has voted to institute the second Samsung investigation, with a procedural schedule expected in August 2026; the evidentiary hearing for the first ITC case against Samsung (covering 6 patents for DDR5 modules and HBM) is scheduled for late November 2026. A favorable ITC ruling could block importation of infringing Samsung products and prohibit commercial activity by named customers including Google, NVIDIA, Supermicro, and Broadcom.
  • Three new commissioners have filled all ITC seats, ending prior bandwidth constraints and delays; Netlist believes the new commissioners are strongly pro-IP and will address efficient infringement by large foreign technology firms.
  • Oral arguments for the appeal of the 2023 Eastern District of Texas $303 million jury verdict against Samsung were held in March 2026, with a decision expected soon. Appellate briefing for the appeal of the breach of contract case against Samsung (which Samsung has lost three times on the merits) is complete, with a hearing expected in the coming months.
  • Oral arguments for the appeal of the 2024 Eastern District of Texas $445 million jury verdict against Micron, as well as Netlist's appeal of PTAB invalidity findings for the 912 patent, are scheduled for September 9, 2026. Netlist argues the 912 patent has been subject to abusive serial reexaminations and expects the verdict to be upheld.
  • The U.S. DOJ and PTO have filed supportive statements of interest in Netlist's ITC cases against Samsung, marking the first time the two agencies have jointly supported a complainant, aligning with the current administration's pro-IP enforcement policies. Netlist continues to advocate for patent reform legislation at the federal level.

• Financial Position

  • Ended Q2 2026 with $40.7 million in cash, cash equivalents, and restricted cash, with minimal debt. Received $10.5 million in warrant exercise proceeds in Q2 2026, maintains a $10 million working capital line of credit, and has approximately $74 million available on an equity line of credit, providing significant liquidity and financial flexibility.
  • Operational cash management remains strong, with day sales outstanding under 3 days, average inventory turns of 10 days, and an average optimal cash cycle of 15 days.

• Netlist does not provide formal fixed quarterly guidance, but based on current visibility into third quarter 2026 bookings and shipments to date, management expects Q3 2026 product revenue to be similar to Q2 2026's $109.8 million, maintaining the current strong revenue level.

The call does not break out formal segment-level financial results with specific revenue contribution percentages for each product segment. Total company Q2 2026 revenue was $109.8 million, up 163% year-over-year (YoY). Total company gross profit for Q2 2026 was $22.9 million, up 1544% YoY. H1 2026 total revenue was $214.7 million (a threefold increase YoY), and H1 2026 total gross profit was $45.3 million, up 1582% YoY. Most Q2 2026 revenue came from DRAM resale; Netlist-branded products (including the Lightning portfolio) generated low double-digit millions in revenue during the period.

• Ongoing memory industry supply constraints create uncertainty around Netlist's ability to continue sourcing DRAM products for its resale business at sufficient volumes to maintain current revenue levels.
  • Litigation outcomes are inherently uncertain; even with a strong legal position, there is no guarantee of favorable rulings in the multiple ongoing patent and contract cases against Samsung and Micron, which could impact Netlist's ability to enforce its IP rights and secure licensing revenue.
  • Forward-looking statements around product adoption, market growth, and litigation timelines and outcomes are subject to material unforeseen changes that could lead to actual results differing materially from current projections.

Q: What is the current status of the Hynix license agreement, and have there been any renewal or broader business discussions? / A: Netlist holds regular discussions with both existing and potential licensees, and management reports good progress across all ongoing discussions. No specific details about the Hynix agreement or renewal talks can be shared due to confidentiality privileges.

Q: What connection exists between the various Samsung court cases and ITC proceedings? / A: Most cases across venues (ITC, Eastern District of Texas, Delaware) involve overlapping patents covering Samsung's memory products. The Delaware declaratory judgment case brought by Samsung is currently stayed. When the ITC institutes proceedings on a set of patents, corresponding cases covering the same patents in the Eastern District of Texas are automatically stayed under standard procedure.

Q: How much revenue currently comes from Netlist's own branded products, and when will the main new product opportunities see revenue inflection? / A: Netlist's own branded products including the Lightning DDR5 portfolio already generate low double-digit millions in revenue and are continuing to gain traction. Development and customer engagement for next-generation products including MRDEM and CXL NV Vault are ongoing with major OEMs and hyperscalers, but no specific timeline for revenue inflection was provided.

Q: What is the risk to resale revenue from ongoing industry-wide DRAM supply constraints? / A: Netlist's 25-year industry presence has allowed it to build a strong global sourcing network. The company continues to receive reliable supply support from Hynix for both short-supplied DDR4 and DDR5 products, so Netlist is in a relatively better position than most peers to source constrained DRAM products.