QuickLogic Corporation

Ladies and gentlemen, good afternoon. At this time, I would like to welcome everyone to QuickLogic Corporation's second quarter fiscal 2026 earnings results conference call. As a reminder, today's call is being recorded for replay purposes. I would now like to turn the conference over to Ms. Alison Ziegler of Darrow Associates. Ms. Ziegler, you may begin.

Thank you, operator, and thank you to all of you for joining us. Our speakers today are Brian Faith, President and Chief Executive Officer, and Elias Nader, Senior Vice President and Chief Financial Officer. As a reminder, some of the comments QuickLogic makes today are forward-looking statements that involve risks and uncertainties, including but not limited to statements regarding our future profitability, revenue growth and cash flows, expectations regarding our future business, and statements regarding the timing, milestones and payments related to our government contracts. Statements regarding expected contracts and the expected magnitude of such contracts and statements regarding expected adoption rates and or orders by our customers. Actual results may differ due to a variety of factors including delays in the market acceptance of the company's new product, the ability to convert design opportunities into customer revenue, our ability to replace revenue from end-of-life products The level and timing of customer design activity The market acceptance of our customers' products The risk that new orders may not result in future revenue Our ability to introduce and produce new products based on advanced wafer technology on a timely basis Our ability to adequately market the low-power competitive pricing and short time to market of our new products Intense competition by competitors Our ability to hire and retain qualified personnel Changes in product demand or supply General Economic Conditions, Political Events, International Trade Disputes, Natural Disasters, and Other Business Interruptions That Could Disrupt Supply or Delivery of or Demand for the Company's Products, and Changes in Tax Rates and Exposure to Additional Tax Liabilities. For more detailed discussions on the risks, uncertainties, and assumptions that could result in these differences, please refer to the risk factors discussed in QuickLogic's most recently filed periodic reports with the SEC. but Logic assumes no obligation to update any forward-looking statements or information which speak as of the respective dates of any new information or future events. In today's call, we will be reporting non-GAAP financial measures. You may refer to the earnings release we issued today for a detailed reconciliation of our GAAP and non-GAAP results and other financial statements. We have also posted an updated financial table on our IR webpage that provides current and historical non-GAAP data. Please note, QuickLogic uses its website, the company blog, corporate Twitter account, Facebook page, and LinkedIn page as channels of distribution of information about its business. Such information may be deemed material information, and QuickLogic may use these channels to comply with its disclosure obligations under Regulation FD. A copy of the prepared remarks made on today's call will be posted on QuickLogic's IR webpage shortly after the conclusion of today's earnings. And now I'd like to turn the call over to Brian. Go ahead.

Thank you, Alison. Good afternoon, everyone, and thank you all for joining our second quarter 2026 conference call. Since our last conference call, we have made significant progress towards achieving our 2026 goals and have narrowed our full year growth outlook to a range of 70% to 80%. With this anticipated growth, we are continuing to model non-GAAP profitability and cash flow positive operations for the second half of 2026. In addition to contributions from Storefront and RadPro, we anticipate our second half growth will be driven in part by new customers and new market sectors, including automotive, robotics, and commercial satellite applications. We also believe there is good potential to sign an ESPGA IP architectural license late this year. The short story is, 2026 is on target to be a very successful year for QuickLogic, and our accomplishments are positioning us well to continue our growth and market penetration trends in 2027 and beyond. Before I go into what has elevated our confidence in full-year 2026 revenue growth, Let's take a moment to touch on what weighed on Q2 and why we will guide for flat revenue in Q3. We anticipated finalizing a seven-figure extension of an existing customer contract in late Q2. The revenue for this extension was forecasted to be recognized in Q2 and Q3. This contract extension has been delayed as the customer is reevaluating what functions it wants to put in embedded FPGA versus the functions that will be locked down in the fixed portion of its ASIC prior to finalizing the design. This delay is the sole reason why Q2 revenue is at the low end of our guidance range and the forecast flat Q3 revenue. We remain confident in securing this contract extension, but this delay removes it from our 2026 forecast. In addition to this delayed contract extension, we are removing a commercial ASIC design targeting Intel 18A from our second half 2026 forecast. Several uncertainties involving this design arose recently, and in the best case scenario, the eFPGA hard IP contract for this ASIC will be a 2027 opportunity. While these two changes lead us to forecast flat revenue for Q3, the value of contracts and orders that we have on the books and the progress we are realizing in other areas gives us the confidence to raise the low end of our full year outlook. At the foundation of our anticipated Q4 growth is our ongoing contract with the U.S. government, which was increased last year to a total ceiling value of $89 million. We are forecasting revenue recognition from this contract will contribute a significant percentage of total Q4 revenue. In addition to this, we have a sound base of mature product business, continued demand for RADPro dev kits, and ongoing IP contracts that are already on the books scheduled for Q4. Since our last conference call, we have continued to receive and deliver orders for our RADPro dev kit. We expect this trend to continue, and with a number of evaluations already underway, we are very optimistic that we'll see initial storefront device demand in 2027. We are continuing our work on the contracts targeting Global Foundry's 12OP process that we discussed in our last conference call. This includes the receipts of discrete FPGA test chips that we taped out for the contract with a $2.7 million ceiling value that we announced May 13th. Within the scope of this contract, QuickLogic will be provided test chips that we will characterize and include in a new 12LP eval kit that is scheduled to release in Q4. The eval kit will be compatible with common third-party development environments used by both DIV and commercial customers. This enables customers to accelerate evaluations of discrete and chiplet designs that we can provide as storefront solutions. Beyond these scheduled contributions is an anticipated extension of our $1 million LEP contract to target Intel 18AP and pending contracts with new customers I mentioned earlier. The majority of our development and customer design activity in Intel 18A has shifted to Intel 18AP. Intel 18AP is capable of delivering over 9% higher performance at isotropic power or more than 18% lower power at isotropic performance. Given the fact we have been able to leverage the development work we completed for Intel 18A, the time and cost to develop eFPGA hard IP for Intel 18AP will be de minimis. As a matter of fact, We anticipate receiving a follow-on contract from the customer that funded our 1 million LUT developments in Intel 18A for an Intel 18AP implementation that we are targeting for Q4 delivery. We will continue working with some customers on Intel 18A designs, but we expect most will transition to Intel 18AP and that it will also be the focus for new design activity. We believe the release of Intel 18 AP will likely accelerate design activity, and with that, opportunities for our eFPGA hard IP. In addition to the follow-on $1 million left contract, we are working closely with several new customers on ASIC designs that target the incorporation of our eFPGA hard IP. Two of these potential contracts are in late-stage negotiation. The first is a design targeting automotive, industrial automation, and robotic applications. The second is an international customer that is developing an ASIC for a LEO satellite application. We are also working closely with a new customer that has interest in an ESPGA architectural license. Earlier this year, We were awarded a five-figure feasibility study contract to evaluate our eFPGA IP for a particular use case. We had recently completed the contract and the customer is now investigating if a custom implementation of our IP targeting its proprietary process will meet its PPA requirements. The initial results look promising and if successful, this will lead to an eFPGA IP architectural license late this year. As most of you are aware, QuickLogic's initial FPGA devices leveraged one-time programmable anti-fuse technology. This is the highly reliable technology used in mature products we have been supplying to defense and aerospace contractors for decades. Beyond the ongoing demand for our mature products, which have recently been designed into new programs, certain have shown an interest in our existing devices in smaller packages than we currently offer. One in particular has contracted with us to fund and qualify this smaller package for new designs. Our evaluation of this opportunity suggests it could become a new multi-million dollar market for QuickLogic that only requires a minimal ongoing operational investment. We are working closely with this DIB and are in discussions with other DIBs and aerospace companies to fully leverage this opportunity. In 2025, we launched our digital proof-of-concept strategy as a very cost-effective way for both QuickLogic and prospective chiplet customers to execute evaluations. This strategy has led to more than five active proposals that include chiplets targeting GlobalFoundries 12LP, Intel 18A and Intel 18AP fabrication processes. The 12LP eval kit I mentioned earlier will enhance these efforts by enabling customers to rapidly move beyond software simulations to real hardware evaluations. I believe these and other proposals on the horizon will lead to meaningful chiplet revenue beginning in 2027. With that, I will turn the call over to Elias for his presentation of financial data.