Everspin Technologies (NASDAQ:MRAM) reported robust third-quarter 2023 financial results, surpassing previous guidance with revenue of $16.5 million, reflecting an 8% increase year-over-year (YoY). The company also revealed new product developments and progress in its FPGA programs during its earnings call.
Key takeaways from the call include:
- Everspin's revenue for Q3 2023 stood at $16.5 million, exceeding expectations and marking an 8% YoY increase.
- The company achieved its tenth consecutive quarter of positive net income, with Q3 net income at $2.4 million.
- Everspin announced the availability of the X5 family of STT-MRAM products and has entered into agreements to develop reliability models for strategic radiation hard and Toggle MRAM.
- Despite some uncertainty in the Industrial Automation segment, particularly in China, the company maintains a positive business outlook with a healthy product backlog for the rest of 2023 and early 2024.
- The company expects Q4 2023 revenue to be in the range of $15.4 million to $16.4 million.
- Everspin is making progress on its FPGA programs, which can also be applied to AI inference engines, particularly for Edge AI applications.
The company's Q3 performance was fueled by strong revenue growth, particularly in licensing and royalty. This increase was largely due to the QuickLogic (NASDAQ:QUIK) deal and a third RAD-hard deal related to Toggle reliability. Product sales also demonstrated robust performance.
Representative Anuj Aggarwal discussed the company's progress in RAD-Hard applications, stating that new wins and licensing deals have been secured, and products are on track for production by the end of next year.
Despite some macroeconomic uncertainty and changing customer behavior impacting the backlog, Aggarwal emphasized that the pipeline of design wins remains healthy. He also noted that lead times have reduced, with customers booking within the lead time.
On the product development front, Everspin announced the availability of the X5 family of STT-MRAM products. The company is also making progress with its FPGA development programs, including a program with QuickLogic and SkyWater, and another with a different CMOS vendor. These programs aim to replace traditional NOR Flash memory with Everspin's STT-MRAM products in commercial FPGA applications.
Sanjeev Aggarwal, another company representative, discussed the applicability of the company's FPGA solution for AI inference engines, particularly for Edge AI applications. He reiterated that the company's products meet the density requirements for such applications.
Everspin ended the quarter with a cash balance of $34.9 million, and expects Q4 to be relatively flat compared to Q3. The company remains optimistic about its future performance and product development, with updates expected in the next quarter.
InvestingPro Insights
Everspin Technologies' Q3 2023 financial results show a promising upward trend, and InvestingPro data and tips provide further insights into the company's financial health and potential.
InvestingPro Tips highlight that Everspin Technologies has high earnings quality, with free cash flow exceeding net income, and holds more cash than debt on its balance sheet. This suggests a strong financial position and is a positive sign for investors. Additionally, the company has seen a high return over the last year, further indicating its strong performance.
InvestingPro Data also provides valuable information. The company's Market Cap stands at 184.55M USD, and it has a P/E Ratio of 25.29. The company's revenue for the last twelve months as of Q2 2023 was 61.52M USD, demonstrating substantial growth.
These data points and tips from InvestingPro, which offers even more detailed insights and tips for its users, indicate that Everspin Technologies is a strong investment prospect. Its financial health and growth potential make it a company to watch in the tech sector.
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