Everspin Technologies, Inc.

Good afternoon and welcome to Everspin Technologies second quarter 2025 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 now like to turn the conference over to Monica Gold, investor relations for Everspin.

Thank you, Operator, and good afternoon, everyone. Everspin released results for the second quarter 2025 ended June 30, 2025, this afternoon after market close. I'm Monica Gould, Investor Relations for Everspin. And with me on today's call are Sanjeev Agarwal, President and Chief Executive Officer, and Bill Cooper, Chief Financial Officer. Before we begin, 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 expectations for Everspin's future business, financial performance, and goals, customer and industry adoption of MRAM technology, successfully bringing to market and manufacturing products in Everspin'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 Everspence. All forward-looking statements are made as of the date of this call, and except as required by law, the company undertakes no obligation to update or alter any forward-looking statement 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 and 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 non-GAAP net income, which provide additional details. A copy of the press release is posted on the Investor Relations section of Everspin's website at www.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, Monica. And thanks everyone for joining us on the call today. Turning to our second quarter results. We are pleased to report our second quarter results with revenue of 13.2 million and non-GAAP earnings per share of 3 cents with revenue toward the high end of our guidance range. Our performance this quarter was driven by strength across all products, specifically in data center, industrial automation, and low earth orbital or LEO applications. We saw high single digit sequential growth in the data center business. This growth was driven by strong demand on redundant array of independent disks or RAID from a broad selection of data center customers, including Dell, Supermicro and others. We saw good momentum from our customers who build industrial automation equipment like programmable logic controllers or PLCs with sequential growth in excess of 20% from the first quarter. Aversman has a significant historical business here, and we are seeing momentum from current customers and recent design wins with our industrial X byproduct. We saw good traction in the space and aerospace segments that continue to value the benefits of MRAM as a reliable, persistent, non-volatile memory for LEO deployments. During the second quarter, we reached a steady state of revenue from the sale of a persist 1 gigabit STTM RAM into IBM's Flash Core Module 4, or FCM4, for data center applications and continue to anticipate product revenue from this ongoing project to remain consistent for the remainder of the year. We continue to ship and recognize revenue for our Persyst MRAM solution from Lucid Motors for their Gravity SUV and expect volumes to increase as the automaker ramps production. We shipped engineering samples for the two new products we announced last quarter as part of our X-Pi family, the Persyst EM064LX-HR and EM064LX-HR. 128 LXHR. These parts feature an expanded temperature range to address the growing demand for persistent high-speed memory in aerospace, defense, and extreme industrial environments, and provide designers with a robust, fast, and scalable alternative to static RAM or NORFLASH. We remain on track to ramp to full production in late 2025. turning to our licensing, royalty, patent, and other revenue. We completed the first phase of the front-grade project successfully, meeting all our deliverables in Q2. During this phase, we recognized revenue related to delivering the process design kit, or PDK. This contract allows for the award of future optional phases based upon successful performance of all parties contributing to this phase, and at the discretion of the US government. As a reminder, the goal of the project is to enable production of embedded radiation hard STT MRAM macros for use in aerospace applications. We saw a sequential uptake in revenue from our contract with QuickLogic for our innovative Agilis MRAM technology in the second quarter. As a team, we continue to advance the development and demonstration of strategic, radiation-hardened, high-reliability FPGA technology. At the end of this phase, we will have validated the design on silicon. Our contract with Purdue University to provide our state-of-the-art STTM&M technology to support energy-efficient AI solutions has reached a steady state. We are making good progress to develop low-power magnetic channel junction, or MTJ, devices and continue to share these results with Purdue University. Lastly, we continue to recognize revenue from our ongoing project with the leading provider of sensor devices to provide foundry services for their latest generation TMR sensor device on our MRAM line in our Chandler facility. With respect to below the line items, we recognize 0.8 million in other income in the second quarter and 7.4 million to date from the 14.6 million contract we have with the DOD contractor to develop a sustainment plan for our MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to their aerospace and defense customers. We expect this business to pick up meaningfully in the fourth quarter. In order to ensure that we meet the future demand for our products, we are expanding our executive team with the addition of a dedicated VP of sales, Sean Dougherty, who joined us recently from Intel. With Sean's addition, David Schrenk, who has been our VP of sales and business development for the last three years, will be able to focus his efforts exclusively on business development. Our outlook for 2025 remains consistent. We continue to expect the year to be waited more heavily towards the second half of 2025 due to our typical seasonality and do not expect a direct material impact from our tariffs on our results. I will now turn it over to our CFO, Bill Cooper, who will walk you through our second quarter financials and third quarter 2025 guidance. Bill?