Netlist Inc

Good day and welcome to the NETLIST fourth quarter 2025 earnings conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Mike Smarjassi, Investor Relations. Please go ahead, sir.

Thank you, Nick, and good day, everyone. Welcome to NetList's fourth quarter 2025 conference call. Leading today's call will be Chuck Hong, Chief Executive Officer of NetList, and Gail Sasaki, Chief Financial Officer. As a reminder, you can access the earnings release and a replay of today's call on the Investor section of the NetList website at netlist.com. Before we start the call, I would note that today's presentation of netlist results and the answers to questions may include forward-looking statements, which are based on current expectations. The actual results could differ materially from those projected in the forward-looking statements because of the number of risks and uncertainties that are expressed in the call, annual and current SEC filings, and the cautionary statements contained in today's press release. NETLIS assumes no obligation to update forward-looking statements. I will now turn the call over to Chuck.

Thank you, Mike, and hello, everyone. In 2025, we strengthened NETLIS's long-term strategic position as we made substantial progress across product and IP initiatives. We saw significant improvement in full-year financial results, both the top and bottom line. and we ended 2025 with revenue more than doubling in the fourth quarter. Financial performance was driven by strong demand for memory in the second half of 2025 and the strong execution of our sales and marketing teams in delivering the value of our products to customers across key markets. Rapid growth in AI has created a supply-demand imbalance leading to a global memory chip shortage and sharp price increases across all product categories. These industry dynamics are expected to persist through this year and into 2027, when new fab capacity is expected to come online and increase supply of memory chips. In the current environment, Netlist is well positioned to grow its product business. Sales volume for Lightning, Netlist's overclocked and low latency DDR5 line of products is ramping up nicely in the system integrator market segment. Adding to this, we've completed qualifications at a global server OEM, and they in turn are currently in testing with many of their end customers. We anticipate continued growth of our existing customers, as well as new customers in high-frequency trading, and high performance computing applications. On the legacy products front, industrial and networking customers continue to require DDR4 based Netlist custom solutions. We will support these customers through 2026 and into 2027 through last time by agreements that were concluded in 2025. As AI workloads continue to drive demand for higher performance and higher capacity memory, we are investing in strategic R&D for next generation technologies. Those include CXL NV DEM and low power MR DEM. We are sampling our CXL NV DEM proof of concept products to Intel and AMD for testing and validation on next generation platforms. NVDIMM was invented by NETLESS over a decade ago, and we are now moving this storage backup solution onto the CXL channel. As DDR5 DIMM speech continue to increase, MRDIMM and LPMRDIMM are projected to become the primary memory module used in high capacity, high performance server applications. NETLESS is developing a unique solution in this space, which takes LPDDR5 DRAMs currently used in mobile devices and deploying them in high-end servers via our unique LPMR-DIMM design. On the IP front, we continue our defense of multiple favorable jury verdicts. We secured important appellate affirmances of the validity of our patents and expanded enforcement actions covering next-generation DDR5 and HBM technologies that are foundational to AI computing. In December, the ITC, or the U.S. International Trade Commission, instituted an investigation into Samsung, Google, and Supermicro based on the complaint netlist filed in September. The investigation centers on the importation of Samsung memory products that infringe on six netlist patents, the 366, the 731, the 608, 523, 035, and 087. Each of these patents reads on one or more of the following products, DDR5 memory modules, such as DDR5 RDEM, UDEM, SODEM, and MRDEM, and high bandwidth memory, HBM. In 2025, the validity of Netlases 608 and 523 patents were affirmed by the U.S. Court of Appeals for the Federal Circuit, upholding the PTAB's IPR decisions. As a result, Samsung is not able to challenge the validity of these patents going forward. The ITC has assigned the investigation to an administrative law judge and the procedural schedule has been set. The Markman hearing is scheduled for April and the trial set to start on November. A ruling in Netlist's favor would direct US Customs and Border Protection to stop Samsung memory products that infringe these patents from entering the US. The discovery phase of the ITC investigation will take place over the coming months. In the federal courts, Netlist filed four separate actions in 2025 in the US District Court for the Eastern District of Texas against Samsung and Micron and their distributor Avnet. In these actions, Netlist is asserting newly issued patents covering DDR5 memory modules and HBM for AI computing. They include the 087, 731, and 366 patents, which read on memory products that represents tens of billions in annual revenue for these defendants. In the breach of contract case against Samsung in March 2025, the federal court for the Central District of California found that Samsung materially breached the joint development and license agreement net list that Samsung signed in 2015. This was actually the third separate time Samsung has lost this case. Samsung filed its appeal appellate brief in December. and NETLIS will file its brief in the coming weeks. We estimate that the briefing process will be completed this summer with a possible hearing before the U.S. Court of Appeals for the Ninth Circuit before year end. In other appellate activity, Micron's appeal of the $445 million jury award to NETLIS is in the briefing process with oral arguments expected in mid-2027. In the $303 million damages award against Samsung, the appeal has been companioned with the IPR appeals of netlaces 319, 918, 054, 106, and 064 patents, which were asserted in this case. Oral arguments on these appeals will be heard on March 6, 2026, this Friday. in Washington, D.C. Regarding other IPRs, in late February, the Federal Court of Appeals affirmed the October 23 final written decision by the PTAB upholding the validity of Netlis' 314 patent in an IPR brought by Micron. Micron has 90 days from the CAFC's judgment to file a petition to the U.S. Supreme Court. This is the third time within the past 12 months that the First Circuit Appellate Court has affirmed the validity of NETLESS patents asserted against Micron and or Samsung. These affirmances of the validity of these patented technologies attest to the NETLESS's role as a technology leader in memory subsystems. The 314 and the 508 patent, which was also affirmed by the CAFC, are asserted in Nuttless' case against Micron in the U.S. District Court for the Western District of Texas, which has currently stayed. Finally, we expect oral arguments before the CAFC for the 912 and the 417 patents later this year. Nuttless continues to advocate for the rights of patent owners, from meeting government officials to urging Congress to take action on proposed patent reform legislation. In the fall, we provided our comments in support of the Patent and Trademark Office's Notice of Proposed Rulemaking, NPRM. The proposed rules seek to level the playing field between small technology innovators and big tech in the patent dispute process, especially when it comes to IPRs. We will be participating in the upcoming IP Watchdog Conference in Arlington, Virginia at the end of March. The conference will bring together leaders in the intellectual property community and will feature speakers from the USPTO leadership, as well as district court judges. I look forward to being part of the panelists' discussions. In summary, 2025 was a year of progress for NETLIS, We enter 2026 wealth position to build on our success and capitalize on the transition to next generation memory through our products and IP assets. I will now turn the call over to Gail for the financial review.