Everspin: Fiscal 2Q18 Financial Results
Revenue and net loss increasing
This is a Press Release edited by StorageNewsletter.com on August 13, 2018 at 2:18 pm| (in $ million) | 2Q17 | 2Q18 | 6 mo. 17 | 6 mo. 18 |
| Revenue | 8.9 | 10.8 | 16.8 | 25.6 |
| Growth | 21% | 52% | ||
| Net income (loss) | (5.2) | (6.6) | (11.3) | (7.9) |
Everspin Technologies, Inc. announced financial results for the second quarter ended June 30, 2018.
Second Quarter Highlights
• Flash array customer qualification of 40nm 256Mb STT-MRAM for use in NVMe storage array as highlighted at MRAM Developer Day and the Flash Memory Summit
• Extension of 200mm Toggle fab lease into 2021
• Total revenue of $10.8 million
• Ending quarter cash balance of $32.7 million
“I’m pleased to announce the results of our second quarter. This was our first full quarter of STT-MRAM production shipments, in which the qualification of our 256Mb STT-MRAM was completed by a leading enterprise storage provider. We also continued to drive the adoption of STT-MRAM through our partnership with SMART Modular,” said Kevin Conley, president and CEO.
“Everspin and our partners showcased this exciting STT-MRAM technology in product applications at the inaugural MRAM Developer Day and Flash Memory Summit in Santa Clara this week. Most notably, our flash array customer unveiled its newest NVMe storage array, clearly demonstrating the value of our technology’s low latency and data persistence. The increased attention on MRAM at these events highlights the importance of MRAM technology as it is adopted into mainstream applications. We are encouraged by this enthusiastic interest and the high level of activity, which we believe demonstrates the meaningful progress MRAM is making as an emerging technology.
“Our focus in the coming quarter is on growing and maturing customer engagements around our 256Mb STT-MRAM parts and continued improvements in our Toggle manufacturing capabilities.”
Second Quarter Results
• Revenue for the second quarter of 2018 was $10.8 million compared with $8.9 million in the second quarter of 2017 and $14.9 million in the first quarter of 2018, which included $5.5 million of licensing, royalty and other revenue.
• Gross margin for the second quarter of 2018 was 49.0%, compared with 65.0% in the second quarter of 2017 and 67.0% in the previous quarter. The sequential and year-over-year decline in gross margin was primarily attributable to lower licensing, royalty and other revenue in the second quarter of 2018.
• Operating expenses for the second quarter of 2018 were $11.8 million, compared with $10.6 million in the year-ago quarter and $11.1 million in the previous quarter.
• Net loss per share for the second quarter of 2018 was $6.6 million, or ($0.40) per share, based on 16.6 million weighted-average shares outstanding, compared with a net loss of $5.2 million, or ($0.42) per share, in the second quarter of 2017 and a net loss of $1.3 million, or ($0.09) per share, in the first quarter of 2018. The sequential change in loss per share in the second quarter of 2018 reflects a reduction in licensing revenue compared with the previous quarter.
• Cash and cash equivalents as of June 30, 2018 were $32.7 million as compared to $33.9 million at the end of the first quarter of 2018, reflecting the licensing payment collected from the Alps agreement signed at the end of the first quarter, offset by cash used in operations.
Business Outlook
For the third quarter of 2018, Everspin expects revenue to range between $10.6 million and $11.0 million. This revenue range reflects expectations for MRAM revenue to grow approximately 8% sequentially, offsetting an anticipated decline in legacy product sales. Net loss per share is expected to range between ($0.34) and ($0.30) based on an average-weighted share count of 16.9 million shares outstanding.
Comments
Abstract of the earnings call transcript:
Kevin Conley, president and CEO:
"With regard to our financial performance during the second quarter compared to the same quarter a year ago, our revenue increased over 20%, total product revenue grew over 30%, and the product revenue from our core focus MRAM products experienced 40% growth.
"Revenue for the quarter ended slightly below our guidance range.
"Our facility lease with NXP has been extended into 2021.
"IBM has qualified our 256Mb STT-MRAM component in a recently launched all flash array.
"We have continued on track with our 1Gb STT-MRAM which we target for selective customer sampling at the end of this year."
Jeff Winzeler, CFO:
"Revenue in the quarter was up 21% year-over-year to 10.8 million from 8.9 million in the second quarter of 2017 but was down sequentially from the 14.9 million in the first quarter of 2018 which included over $5 million licensing, royalty, and other revenues. Products sales represented 88% of total revenue or 9.4 million which was up from 7.2 million during the same quarter last year and comparable with the previous quarter. Licensing, royalties, and other revenue contributed approximately 1.3 million in the quarter compared to 1.7 million in the second quarter of 2017 and 5.5 million in the previous quarter largely due to our sensor technology licensing agreement with our selectors.
"For MRAM products which include Toggle and STT-MRAM revenue in the second quarter was 9.1 million, a 40% increase from the 6.5 million in the second quarter of 2017 and a 2% increase from the 8.9 million in the previous quarter. During the quarter we experienced lower manufacturing yields on Toggle MRAM products which constrained our output and limited our revenue in the quarter. Our backlog for Toggle remains strong and the demand will carry over into the third quarter."
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