Everspin Technologies, Inc.

Good afternoon and welcome to the EverSpend Technologies' fourth quarter and full year 2024 financial results conference call. At this time, all participants are in a listen-only mode. At the conclusion of management's prepared remarks, instructions will be provided for the question and answer session. As a reminder, this conference call is being recorded. I would like to turn the conference over to Faye Hoffman, Investor Relations for EverSpend.

Thank you, Operator, and good afternoon, everyone. Everspin released results for the fourth quarter and full year 2024, ended December 31st, 2024, this afternoon after market closed. I'm Faye Hoffman, Investor Relations for Everspin, and with me on today's call are Ursin Cheep Agarwal, President and Chief Executive Officer, and Bill Cooper, Chief Financial Officer. Before we begin the call, I would like to remind you that today's discussion may contain forward-looking statements regarding future events, including, but not limited to, the company's expectation for Everspen's future business, financial performance, and goals, customer industry adaptation of MRAM technology, successfully bringing to market a manufacturing product in Everspen's design pipeline, and executing on its business plan. These forward-looking statements are based on estimates, judgments, current trends, and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We would encourage you to review the company's SEC filings, including the annual report on Form 10-K and other SEC filings made from time to time, in which the company may discuss risk factors associated with investing in Everspen. All forward-looking statements are made as of the day of this call, and except as required by law, the company undertakes no obligation to update or alter any forward-looking statements made on this call, whether as a result of new information, future events, or otherwise. The financial results discussed today reflect the company's preliminary estimates are based on the information available as of the date hereof and are subject to further review by Everspin and its external auditors. The company's actual results may differ materially from these estimates as a result of the completion of financial closing procedures, final adjustments, and other developments arising between now and the time that the financial results for this period are finalized. Additionally, the company's press release and statements made during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP net income to adjusted EBITDA, which provide additional details. A copy of the press release is posted on the Investor Relations section of Everspin's website at everspin.com. And now, I'd like to turn the call over to Everspin's President and CEO, Sanjeev Agarwal. Sanjeev, please go ahead.

Thank you, Faye, and thanks, everyone, for joining us on the call today. Before I discuss our results, I would like to take a moment to welcome Bill Cooper to Everspin as our Chief Financial Officer. Bill joined Everspin in early January, coming from Advanced Micro Devices, where he held various executive finance positions. On behalf of the board and management team, I also would like to thank Matt Tenorio for stepping back in over the past several months as our interim chief financial officer. Turning to our fourth quarter results, we are pleased to report our fourth quarter results with revenue of 13.2 million above our expectations and EPS of 5 cents at the high end of our guidance range. Our outperformance this quarter was due to strength in product revenue which came in higher than expected, plus some additional uplift from our ongoing RadHard projects. During the quarter, EverSpin continued to make progress on a number of wins and advancements that we outlined in prior quarters. Most notably, we saw strong momentum in our RadHard deals. For example, we signed a contract with Purdue University to advance artificial intelligence hardware through the Microelectronic Commons program administered by the Silicon Crossroads Micro-Electronic Commons or SCMC hub. We also executed the next phase of the project with QuickLogic to develop a strategic radiation hard field programmable gate array or FPGA. Our 4 megabit to 128 megabit STTM RAM persist family is now validated for configuration across all lattice semiconductor FPGAs. Enabled through the Lattice Radiant software suite This validation highlights MRAM's role as a robust and reliable configuration memory device for a wide range of applications in industries such as industrial, aerospace, military, and automotive. When we designed the latest high-density persist MRAM, including NOR interface support, we anticipated the need for frequent, fast, and reliable FPGA configuration. With multiple design engagements already underway, This partnership showcases how our MRAM solutions deliver the performance and reliability required across diverse applications. The shift from traditional flash memory to MRAM in FPGA configuration reflects the growing demands of modern applications. These key advancements demonstrate the strength of a product portfolio and technology. On the product side, we had a total of 178 design wins in 2024. Our pipeline of new design wins for our MRAM products remains strong and reflects the high quality of our products, which have continued to generate interest and win designs despite the pressure on customer R&D budgets in 2024. We are also seeing continued interest in our toggle MRAM and the 4 megabit to 128 megabit XPI SCT MRAM product family. We expect our design wins with the newer MRAM customers to convert to production later in 2025 post-qualification of our industrial STTM RAM products. Turning to our results, I will start by discussing products for which we recognize revenue in the quarter before discussing new wins and other projects with future revenue potential. During the fourth quarter, we continued to ramp revenue from the sale of a persist one gigabit STTM RAM into IBM's Flash Core Module 4 or FCM4 for data center applications. As a reminder, this is the fourth generation of IBM's FCM that has featured our one gigabit STTM RAM solution. Our persist solution delivers 2.7 gigabytes per second of both read and write bandwidth, coupled with non-volatility with a DDR4-like interface. We are pleased with our progress and anticipate a continued uplift in our product revenue from this ongoing project. We are pleased to have recognized initial revenue from the Persist MRAM prototypes we shipped to Lucid Motors for their Gravity SUV. Looking ahead, we expect to continue recognizing revenue from this project over the next two years, depending upon the customer reception of the SUV in the marketplace. While the total market is small due to the low number of Lucid SUVs in the market, we believe the design win is a clear demonstration of the reliability and performance that our MRAM products deliver in demanding environments. We are seeing good traction with the persist 4 megabit to 128 megabit SCT MRAM product family in multiple sectors across geographies. For example, our design wins in Asia Pacific are in the network and casino gaming industry. In EMEA, the design wins include aerospace, industrial automation, and automotive transportation industry. In the Americas, our design wins are focused on aerospace, oil and gas, industrial automation, and FPGA applications. Turning to our licensing, royalty, patent, and other revenue. We continue to recognize revenue from the 9.25 million front-grade technologies project that was announced in August of last year to develop a custom radiation-hardened STTM-RAM macro for embedded solutions using our persist STTM-RAM technology. As a reminder, the deal will support current and future DoD strategic radiation-hardened and low-Earth orbital space systems. The project remains on target and is meeting all milestones. We are pleased to see a growing trend to use commercial off-the-shelf products in LEO applications as the LEO market is expected to grow at a CAGR of 13%, significantly increasing from approximately $10 billion to $23 billion by 2029. We expect Everspins MRM products to support and be a part of this market leading to expanding adoption of our persist X5 products. We have two other ongoing RadHard programs that utilize our STTM RAM technology. The first program relates to an ad hoc 64 megabit STTM RAM project, and the second is focused on building a strategic RadHard FPGA. We continue to recognize revenue from both programs and saw a meaningful sequential increase in revenue from our contract with QuickLogic. As a reminder, under this contract, we are providing our innovative Agilist MRAM technology, logic design, and back-end offline manufacturing services to advance the development and demonstration of strategic, radiation-hardened, high-reliability FPGA technology. This initiative supports both current and future DoD strategic and space system requirements. We are pleased to share that we recognize founder revenue from the initial production of order from our ongoing project with the leading provider of sensor devices to provide foundry services for the latest generation TMR sensor device on our MRAM line in our Chandler facility. We also recognize non-recurring engineering or NRE revenue for helping with the qualification. Turning to below the line items, last quarter we were awarded 14.6 million contract for the next two and a half years from a DOD contractor to develop a sustainment plan for our MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to their aerospace and defense customers. During the fourth quarter, we recognized 2.1 million from this project in other income. Before I turn the ball over to Bill, I would like to provide an update on some of our recent awards that we believe will contribute to revenue in future quarters. As I mentioned earlier, we signed a contract with Purdue University and will be providing our state-of-the-art STTM RAM technology optimized for fast switching and high read margins to support energy efficient AI solutions. And we'll also deploy our manufacturing expertise to fabricate reliable STTM RAM arrays. During the initial phase of the project, we have shared our design information with Purdue and have started running the efforts to calibrate the performance of the current magnetic stack while they do process development for phase two of the project, which is estimated to begin next year. We expect to recognize initial revenue from the project in the first quarter. Now, I would like to take a few minutes to discuss Everspin's MRAM technology our vision, and where we believe our products are expected to impact the memory industry and adjacent markets. As we have discussed in the past, we believe STTM RAM is the optimal candidate to replace or scale NOR flash devices at densities greater than 256 megabits. When designed to replace NOR flash devices, STTM RAM provides a simpler architecture for systems for system designers with 100x faster writes and 10x to 100x higher write endurance. Everspin has 4-megabit to 128-megabit STTM RAM with an XPI interface in production for addressing the North Flash market. We are in the process of designing a 1-gigabit STTM RAM product with a goal of providing early samples in 25. There is a strong interest in these high-density parts from the FPGA as well as the automotive industry given the trend of electrification of automotive vehicles. We are part of the consortiums mentioned in our previous calls that are being formed to address these market needs, and in some cases, at the forefront. Everspin also has extensive experience in tuning STDM RAM technology to make the end device look like a SRAM or DRAM. For example, we have four megabit to 128 megabit SRAM-like parts in production offered as part of a persist family. These parts have unlimited read-write endurance, retain data for greater than 10 years in extreme temperature ranges, and are used by our customers for data logging applications in industrial automation, IoT, and the casino gaming industry. We have been further tuning this technology to improve the read-write speeds down to less than 10 nanoseconds while trading off the data retention for 10 years to weeks to keep the read-write endurance. There is a strong interest for these features driven by microcontroller and edge AI applications. We expect this segment to grow significantly over the next few years as the major players start adopting STD MRAM as discrete chips or as chiplets in a packaging solution. As you're aware, Everspin also has DRAM-like MRAM shipping into the storage industry. We have 256 megabit to 1 gigabit parts with DDR-like interfaces shipping into the data center market. As a next step, we are in the process of demonstrating Computer Express Link, or CXL, STDM RAM. We are assembling 512 megabytes and 1 gigabyte small outlying dual inline memory module, or SO DIMS, and DIMS using our existing 1 gigabit DDR4-like STDM RAM for this demonstration, providing persistent memory functionality. CXL is an ideal interface for MRAM as it allows utilization of the full range of MRAM benefits, whether directly attached or in shared architectures, to enable resource sharing within a CXL network. Use cases include high-performance persistent scratchpad memory and write cache, high-speed data logging and capture, coalescence buffer for data staging, and accelerator memory, especially for offload accelerators, whether in HPC or Edge AI use cases. Turning to our outlook for 2025, we expect the year to be weighted more heavily towards the second half of 2025 due partially to our typical seasonality and as our Asian customers continue to work through their inventory. I will now turn it over to our CFO, Bill Cooper, who will take you through our fourth quarter financials and first quarter 2025 guidance. Bill?