Intevac Q4 2023 Earnings Call Transcript

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Provided by Quartr
February 5, 2024

There are 8 speakers on the call.

Operator

Good day, and welcome to Intevac's 4th Quarter and Full Year 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, February 5, 2024. At this time, I would like to turn the call over to Claire McAdams, Investor Relations

Speaker 1

Thank you, Sherry, and good afternoon to everyone on today's call. Thank you for joining us today to discuss Intevac's financial results for the Q4 and full year 2023, which ended on December 30th. In addition to discussing the company's recent results, we will discuss our outlook looking forward. Joining me on today's call are Nigel Hunton, President and Chief Executive Officer and Kevin Solsby, Chief Financial Officer. Nigel will begin with an overview of our business and outlook, and then Kevin will review our financial results before turning the call over to Q and A.

Speaker 1

I'd like to remind everyone that today's conference call contains certain forward looking statements, including but not limited to statements regarding financial results for the company's most recently completed fiscal quarter year, which remains subject to adjustment in connection with the preparation of our Form 10 ks, as well as comments regarding future events and projections about the future financial performance of Intevac. These forward looking statements are based upon our current expectations and actual results could differ materially as a result of various risks and uncertainties relating to these comments and other risk factors discussed in documents filed by us with the Securities and Exchange Commission, including our annual report on Form 10 ks and quarterly reports on Form 10 Q. The contents of this February 5 call include time sensitive forward looking statements that represent our projections as of today. We undertake no obligation to update the forward looking statements made during this conference call. I will now turn the call over to Nigel.

Speaker 1

Nigel?

Speaker 2

Thanks, Claire, and good afternoon. Intibac posted strong results for the Q4, marking a solid finish That was a key year of growth and execution in 2023. Q4 revenues totaled nearly $13,000,000 well ahead of our expectations entering the quarter. As evident by our record level of upgrades in 2023, InterVac is a key technology enabler in the hard drive industry's transition to HAMR. The Q4 was another period of accelerated demand from our leading customer as they ramp to deliver production quantities of HAMR drives.

Speaker 2

The key role of Intevac in enabling this ramp resulted in very strong 47% growth in revenues for fiscal 2023, and we achieved a full year record in annual sales for our equipment business. The resulting favorable revenue mix drove strong gross margin performance exceeding our guidance at 46% for the 4th quarter and 38% for the full year. With continued diligence controlling discretionary spending, we sharply reduced our net losses both for Q4 and the full year compared to the prior year periods. Protecting the balance sheet remains a key priority for the company, and we ended the year with over $72,000,000 of total cash and investment. This will remain a key focus in 2024.

Speaker 2

The year end balance was just below our previous guidance solely due to late payments of receivables by 1 customer. Total backlog at year end was $42,000,000 reflecting the continued strong order activity for HAMR upgrades. In Q4, these orders included the successful rebooking 200 to 200 Leans in favor of additional HAMR process module upgrades. As a reminder, these two systems have been in backlog for the past 6 quarters and were originally aimed at enhancing capacity as opposed to technology. We are pleased with the renegotiation of order backlog towards HAMR initiatives As these are clearly the priority in the industry right now and from a financial perspective, while upgrades carry less revenue compared to total sales, the rebooking is to have a minimal impact on our forecast for gross profit.

Speaker 2

Finally, as we reflect on fiscal 2023, it was a critical year for the knowledgeable development and commercial launch of our groundbreaking Trio platform. We successfully completed the development phase of our JDA and achieved system qualification as promised by year end. This is a key milestone in the growth trajectory of Intevac As the Trio achieved key performance metrics as part of the evaluation process that will enable Intevac to address market opportunities far larger than our existing hard drive business. We see the Trio as having enormous potential with an estimated $1,000,000,000 served market And the achievements in 2023 are key steps forward in our plan to diversify and grow our product portfolio and customer base, which brings me to a discussion of our perspectives on the future and our strategies to deliver consistent and profitable growth in the years ahead. The important developments unfolded in fiscal 2023 within each of our primary markets have underscored 2 key attributes of our business.

Speaker 2

1st and foremost is that Intibac plays a critical role in the global electronics manufacturing industry and that we are uniquely capable of producing equipment that addresses the needs of technologically challenging thin film processes in highly demanding, high volume manufacturing environments and within industries that require extremely low cost of ownership. This is especially evident during the challenging macroeconomic environment of 2023, a year when our customers faced enormous headwinds financially and operationally never diverted their attention from the strategic manufacturing priorities in close partnership with Intevac. But it's the same headwinds that manifest in the second reality for Intevac's leadership team in 2023, and that is The undue influence that our large customers can exact on our short term financial results, which is an issue that today we are addressing head on. As we enter the New Year, we are steadfast in taking a long term focus on improving the underlying financial performance of Intermac. They're always going to be focused on critical aspects of our financial performance such as revenue volumes and our cash position.

Speaker 2

At this juncture, however, we have made a determination temporarily redirect our focus away from short term metrics, just quarterly revenue and cash targets, in order to set up a stronger long term value proposition for our stakeholders, which means we have made the decision to temporarily withdraw near term financial guidance in order to enable our focus to reside primarily on the long term and specifically on improving our longer term growth, profitability and cash flow profile. This has implications for each of our served markets. 1st, in our primary HDD market, The revenue ramp we achieved in 2023 demonstrates our operational agility and our ability to meet customer time lines for HAMR upgrades. Even more importantly, Intevac has emerged as the enabling technology partner for the adoption of HAMR, And our revenue results in 2023 demonstrate that we are a direct beneficiary of the HDD Media Technology Upgrade initiatives currently underway. We have demonstrated our critical role for the hard disk drive industry at the same time as we've supported the strength of our customers' financial position at the expense of our own.

Speaker 2

Our cash conversion cycle has slowed to historical lows and collection delays have become pervasive or a quarterly norm, we encountered an unprecedented order cancellation more than 8 months ago, but slightly yet to resolve the transfer of inventory and material receipts off our balance sheet. For this quarter, we have made the decision to temporarily suspend our fulfillment of HDD orders Intellect customer fulfilled their obligations regarding payables and inventory. We are confident that we can get the business back in alignment with our standard terms, But we are not using Intevac's cash to fund our customers. I know our investors will understand the position we have taken. Next, turning to the actions we're taking in the display market.

Speaker 2

The recently completed qualification of our Trio system is testament for the quality of engineering resources resident within Intevac and our ability to meet key performance specifications for a very demanding and exacting customer. Upon achieving qualification and the successful completion of our joint development agreement, we engaged with our JDA partner in negotiations for a commercial agreement for multiple systems. While we are not able to complete such agreement by year end as we had originally had hoped, We expect such negotiations to conclude by the end of the Q1. As we said before, the supply chain for display cover glass for high volume consumer device applications is highly complex, to say the least. Meanwhile, conditions in the display market have become more challenging the face of slowing customer demand, which is manifesting itself in conservative financial planning by our JDA partner in the short term.

Speaker 2

It's also quite apparent to us there is significant customer pull coming from the end devices OEMs to rapidly deploy Trio systems in volume manufacturing environments that the benefits of our tool can be realized on multiple device types. Whether through the originally contemplated exclusive arrangement with our current partner, which is tied to a minimum purchase of multiple systems Estimated approximately $100,000,000 over a 5 year period or through other customer sales, we will work towards maximizing the long term potential of Trio, which means by withdrawing near term guidance, we'll be firm in our negotiations regarding any commercial terms for the Trio have long range implications. While we work through this process within each of our markets, I'll also note there's been no material change in the demand written to be vindicated when previously providing our preliminary outlook for 2024, which we shared on the last two earnings calls. For purposes of annual revenue guidance, our outlook for the full year is largely unchanged at the $50,000,000 level. Furthermore, we expect to end 2024 with a similar balance of cash and investments as year end 2023.

Speaker 2

However, given our decision to halt the deployment of certain of Intevac's resources in the short term in favor of maximizing the company's longer term potential, We're not providing official guidance ranges for margins or profitability or a specific revenue range for Q1. And with that, I'll turn the call over to Kevin for his Q4 review.

Speaker 3

Thank you, Nigel. Turning to our results. Q4 revenues totaled $12,900,000 which exceeded the midpoint of guidance by $2,700,000 due to the acceleration of HAMR upgrades during the quarter. For the full year, revenues grew to $52,700,000 up 47% from 2022 sales of $35,800,000 2023 sales included a record level of TV upgrades as well as one new 200 Lean and 1 refurbished 200 Lean system. Q4 gross margin benefited from favorable mix and exceeded our forecast at 46%.

Speaker 3

For the full year, Gross margin was 38.4%. Q4 operating expenses were $7,800,000 down both sequentially and year over year, reflecting the restructuring of our business and leaner operating structure. As a result, we were able to reduce our operating and net loss both for Q4 and the full year compared to the year ago periods. Turning to the balance sheet. We ended the quarter with cash and investments, including restricted cash of $72,200,000 equivalent to $2.74 per share based on 26,400,000 shares at quarter end.

Speaker 3

As Nigel mentioned, we would have ended the year with total cash in the range of $75,000,000 to $80,000,000 if not for the persistent delay in collections from 1 large customer. Cash flow from operations was a positive $5,900,000 during the quarter. Q4 capital expenditures were $500,000 And our non cash costs for the quarter included $1,000,000 of stock based compensation and $400,000 of depreciation in amortization. This completes the formal part of our presentation. Operator, we are ready for questions.

Operator

Thank Our first question is from Mark Miller with The Benchmark Company. Please proceed.

Speaker 4

You mentioned that the Trio negotiations, you expect them to be complete this quarter. I'm just wondering, could you provide any more color on what's discussed?

Speaker 2

If you take the JDA agreement we have, The plan for that was to go from the JDA agreement and then negotiate a commercial agreement for ongoing supply. So we're in the middle of negotiating a sales and purchase agreement for the future. So that's what have been involved in the negotiations.

Speaker 4

So we're still looking at roughly $100,000,000 at least in sales for Trio?

Speaker 2

We're looking to conclude that negotiation in this quarter and the outcome of that negotiation will cover on the next earnings call.

Speaker 4

Any thoughts about the trio that was just qualified in terms of being revenued?

Speaker 2

The JDA wants its qualification then moves to a negotiation on the commercial agreement. At this time, we want to get the best outcome for the best interest of our shareholders, just probably not best to discuss specific outcomes of that item.

Speaker 4

Western Digital during its recent conference call indicated that they were going to wait until 4 terabytes per platter To Faisonheimer, do you have any feeling when that would be? Will that be later this year or 2025?

Speaker 2

I think Western Digital's announcement was very positive for us. I think as you see the industry move towards HAMR was particularly focused really around one customer. I think now you're seeing the industry following. And I think on prior calls, we've sort of said that WD might be a year behind. I think we'll see towards the end of this year, into 2025.

Speaker 2

Think it's a very positive thing for the company.

Speaker 5

Thank you.

Operator

Our next question is from Hendi Susanto with Gabelli Funds. Please proceed.

Speaker 5

Good afternoon, Nigel and Kevin.

Speaker 2

Nigel,

Speaker 5

I would like to ask your perspective the latest forecast of 2024 hard Disk drive market and then the outlook for HAMR upgrade. And then second, I'm wondering whether you can share some color of On like what kind of timing or cyclicality of hammer upgrades? Does it tend to be lumpy? Or Can it be somewhat like linear and incremental?

Speaker 2

I think as we've said on the Praful, we've got In store base of around 140 systems with over 10% of our upgraded towards HAMR. We see that continuing through the next 3 to 4 years. So we see the HAMR opportunity It's being significantly large. And as Mark Miller commented that we're actually seeing now a level of interest from WD coming in as well. The key for us is really is making sure we are ready to support the hammer ramp, Making sure we're able to actually support that business.

Speaker 2

We've been a key enabler. The technology has helped prove The establishment of that is a step change in technology. The critical thing for now is to make sure we make the right decisions for the business. And therefore, that's focusing on getting our one of our key customers back into standard terms, getting our cash position back to where it should be is a key focus at the moment. And then we'll once we get that done and resolved, then we'll look to continuing further shipments.

Speaker 2

Hence, we've postponed guidance for this quarter and while we've resolved that because we do believe fundamentally, Hamra has got a great future.

Speaker 5

And then may I verify for like hammer upgrade, can it be lumpy from 1 quarter to another?

Speaker 2

I think as you've seen, it will depend on the uptake and demand and how fast the takeoff of that product is. So I think it will be Over the next couple of years, it will be, and we've talked about, roughly $35,000,000 to $40,000,000 a year. But that quarter to quarter, we are at a level of lumpiness depending on what upgrades are pulled in and the timing of those investments.

Speaker 5

And then in order to position Intifac to support the HAMR Ram, Any advice on how we should be thinking about the inventories?

Speaker 2

A key thing for us is to, One, resolve the inventories around the age system cancellation. That's a key aspect of our focus. And as we look at actually building the business, we've got to actually make sure we actually minimize inventory, look at the best use of our cash and ensure we can deploy that industry against those key hammer shipments as we get orders for them moving forward. I think our inventory is sort of split Roughly a third, a third, a third of the month between HDD, Freo Systems and the cancellation. So we've got a lot do on inventory to reduce inventory, make sure we actually turn that return inventory to our customer for the cancellations and then deploy our inventory to maximize our business moving forward.

Speaker 5

Can you use the cancellation inventories for hammer upgrade?

Speaker 2

One of the key things that happened last quarter, we talked about in the prepared remarks was to actually successfully negotiate and exchange 2 of the systems into HAMR upgrades and by using the relevant parts of those systems, we can actually then move them into HAMR upgrades pretty successfully. That's one of the things why it was a successful renegotiation to transfer those 2 systems into HAMR upgrades. And actually, as you rightly point out, we can leverage and actually transfer a significant part of that into HAMR.

Speaker 5

Okay. And then I don't know whether you can answer these questions. Can you indicate how many installed base units that received the HAMR upgrades in Q3. And then I'm also wondering when Intifax had like record sales of Hammer upgrades, whether you can quantify what the magnitude of the Hammer upgrade in dollar terms?

Speaker 2

I think what we said on prior calls is 2023 saw us complete around probably about 15 or 16 HAMMER upgrades. And that was the amount we did through the year. And that's sort of the number we're giving for 2023. And as we've said on many occasions, the HAMR upgrades, The value of those depend on the upgrade of the system. Some systems need additional process modules, if it's going from a 5 process module to a 7 process module, And then the addition of the cooling and heating stations and other key upgrade systems or some have already got 7 process modules and it's just some of the key upgrades around and cooling.

Speaker 2

So the range of upgrades can between $1,000,000 to $2,000,000 So it changes depending on the mix of the system that we're upgrading, which is again adds to some of the lumpiness quarter to quarter.

Speaker 5

And Nigel, one last question for me. When it comes to negotiation for like to your system sales, any background on the likelihood of The customers buying 1, 2 or 3. In other words, what will drive customers to buy 2 instead of 1 or 3 instead of 2? I think in the past you mentioned that customers has like multiple locations. But besides location, are there other factors that drive the decisions in terms of the number of system that they want to purchase?

Speaker 2

I think the key message at the moment was the sort of the original JDA we completed, the Treo system was qualified. And the critical next step is to finalize a formal agreement for Treotil shipments. And I said we had hoped to conclude that for the end of December. However, the arting negotiations are ongoing now. And we really can't send anymore at this stage, other than to confirm we expect to ship multiple systems in 2024.

Speaker 5

Okay. Thank you, Nigel. Thank you, Kevin.

Speaker 2

Thank you. Our

Operator

next question is from Peter Wright with

Speaker 6

Thank you, Peter. I have three questions. The first one is on your shift to long term focus on the financial model and think that makes sense just on number of customers and it's easy to understand. But what I'm hoping you can do is kind of reflect On this comment, if I look at your backlog helping to guide kind of services and call that about $40,000,000 and across the 4, 5 year cycle, you're looking at about 10 Hard disk drive tools and about 20 tools on the contract with your existing one customer there, it averages about $30,000,000 a year. To be lumpy and it's tough to figure that out.

Speaker 6

But that's about a $70,000,000 average cross cycle revenue run rate. Given kind of where your expenses are now that that's suggesting to me about a $4,000,000 or $5,000,000 free cash flow yield on an annualized basis On a cross cycle, is there anything I'm missing there at a high level of what your long term guidance and picture would look like?

Speaker 2

Yes. I mean, I think for me, it's critical that we focus our time at the moment, ensuring we actually optimize the long term and get the right deals and the right negotiation and get the right forecast for the future. So I don't really want to comment on the detail within the agreements. We're actually in the middle of negotiating. But if you take the base from prior announcements, I think that's it's probably a logical analysis of what we've announced on prior earnings calls.

Speaker 2

I don't know whether Kevin you want to add anything to that?

Speaker 3

No, I would agree that that's consistent with what we said in the last couple of quarters.

Speaker 6

Yes. Okay. Fantastic. And if I look at the one comment you made on end market pull, can you give us a little more color of what it is that some of these end market customers are looking at what they specifically like about your glass.

Speaker 2

There's a couple of key points there. 1, the capability of the Trio and the Qualification being completed has proven that we have a machine that has great capability. The ability to deliver hard scratch resistant and anti reflective coatings on substrates It's critical and that has been proven. And if you look at the market opportunities, whether that be in the consumer device market, where it's very apparent, the need for those sort of coatings and those sorts of applications. As we've sort of looked beyond that and started to talk to some key automotive customers and some of the coating people in that sector.

Speaker 2

In a similar way, the Deployment of glass across the auto sector, whether it be touch screens in cars, whether it be looking at Applications externally, where they have accurate and anti chip coatings on some of those substrates around The cameras on that external cars, LiDAR, etcetera, etcetera approving that the opportunities in auto are going to come through and come through over the next, I think, 3 to 5 year period pretty strongly as well. So we see sort of multiple applications now For the Trio platform, we see it being able to be expanded beyond consumer devices into multiple other sectors And the ability of the tool to put specialized coatings with the key attributes that we've proven Onto multiple materials is also going to prove benefits long term. So I think we've proven a phenomenal tool. It's taken us over 18 months of development time and focus, but having got that tool to a point where it's now fully qualified, It's absolutely the right time and to think about the long term opportunity for that. And the feedback we've been getting about this quality of the coatings gives you more and more confidence on the future.

Speaker 6

I could infer from your last press release and the naming of your partner in it that Clearly, they see your value in this equation. Can you help us understand in these negotiations, Is there a certain element that you're more excited about or has changed over the course of last year, whether it be From consumer electronics to consumer electronics plus, whether it be an evolution of the business model from equipment to equipment plus Or, are the negotiations at this point on the Trio side primarily about numbers?

Speaker 2

I think we've proven that we have great technology. And the work we've done around the material science, What we've done is developing the Trio platform to meet the key market needs. It's shown me that we've got a capability to not just deliver high quality coatings into consumer devices but into other sectors. So as we look to in the negotiation, I don't want to get into details of that today Because clearly, it's a very key time in the negotiation. It's about making sure we do the right for the company, the right decisions, End up with the right agreement for the long term that's going to maximize value for Intevac.

Speaker 2

And that's my key focus is how do we actually ensure We have an agreement that enables us to take Intevac forward on a much stronger growth trajectory and with key partners. So I'm pretty excited about the opportunities with existing partners, but I'm also equally excited about the opportunities we're seeing outside of that.

Speaker 6

Fantastic. My last question is, it just seems that no matter what you do, the market is not giving you credit for your cash. What are the best uses of your cash when you look forward here? Is it organic, inorganic? When you look at the balance sheet, even though it might be done a little bit on the collections, it's still an extremely large number On the balance sheet, what is the uses in 2024 that you'll be sharing with us that you're most excited about?

Speaker 2

I think the opportunity to continue to protect this business and continue to protect the balance sheet is a key focus for me. We've done that pretty successfully through 2023. There are some mine uses we need to expand some of our capabilities Around inspection and test equipment, I think one of the things that we've got to absolutely be expert at It says we do world class coatings. It has the capability in house to do key testing and key understandings of the materials, Whether that be into the optics, into the hardness, into the material science. So there will be some use of that cash, but not significant around enhancing our capability for in house metrology.

Speaker 2

As we look at other feedback, Customers see the strength of our balance sheet as a key asset. And therefore, a company our size is maintaining that strong balance sheet is critical to protect the company moving forward. We've got to look to how we actually grow the company. And as we actually think through What the key strategic moves we have to do to take the company forward, then we'll think about how we actually optimize that cash and use it effectively. But the first focus at the moment is absolutely protecting the balance sheet and protecting that cash position.

Speaker 6

Fantastic. Thank you for the call.

Speaker 3

Thanks, Peter.

Operator

Thank you. Our next question is from Dan Weston with West Capital Management. Please proceed.

Speaker 7

Yes. Hi, thank you very much for taking the questions, most of which have been answered. Just some Clarity relating to the receivables that you discussed, in that collection process, is there Any dispute with your customer on what the receivable number is?

Speaker 2

No. There is absolute clarity on what the number is. Yes. And we have a long term relationship. This was something that we will this will be worked through with them.

Speaker 2

They've been a key partner of ours. We've helped enable a successful evolution to HAMR. So there's no dispute on the receivables.

Speaker 7

Okay. So this is what you would classify as more of a timing issue as opposed to a dispute of The number?

Speaker 2

Correct.

Speaker 7

Fine. I appreciate that. Also, Nigel, Just to get some additional clarity, not to belabor the point, but I think you mentioned on your last call that the successful completion of the evaluation would then trigger the shipment of the first system. So I assume that did not trigger the shipment of the first system. Maybe you can just add a little color For us in terms of what took place, in other words, weren't the terms already outlined in the JDA That would define exactly what the numbers were once the qualification was completed?

Speaker 2

The original JDA, The way that was written and that was completed successfully by the end of December. The next step Within the JADA is once successful completion of the JADA was done, the next step is to then complete a formal agreement for Trio tool shipments. We had hoped to conclude that as well, but before the end of December. However, those negotiations are still ongoing. Probably, I cannot say anything more at this stage, other than to confirm that we expect to still ship multiple trios in 2024.

Speaker 2

But the process was goes it goes from JDA, goes qualification, JDA completion, then we go into a formal agreement for sales and purchase. So that's the key steps.

Speaker 7

Okay. Okay, fine. And then back to your HDD business, just to make sure I'm very clear here since there's no guidance that you're offering for the quarter. Did I hear you right in that your company will not be providing any upgrades until the receivables are collected? Just some clarity on that, please.

Speaker 2

Correct. So we will not be supplying any materials until we've actually got resolution on the receivables.

Speaker 7

Okay. Got it. And I guess, I mean, is there a way that you can predict what the timing would be to resolve that receivable issue?

Speaker 2

I think it's best if we actually leave that for me to resolve the foreseeable issue without putting a timeline against that.

Speaker 7

Okay, okay. Fair enough. I appreciate your candor and best of luck.

Speaker 2

Thank you.

Speaker 3

Thank you.

Operator

Our next question is a follow-up from Hendi Susanto with Gabelli Funds. Please proceed.

Speaker 5

Hi, again, Nigel. So Nigel, when let's say the negotiation of TreoSystem has been concluded and you have the agreements, how soon can the sales of TRYO system take place? And then, I'm also wondering, upon the Completion of the negotiation, whether or not InterFAC will file like an SEC filing?

Speaker 2

I think if you as we said, we are in the middle of those negotiations. We are confident Those negotiations will get concluded. We're pretty clear that as we move forward, we have Time is to do updates on revenues and performance on a quarterly basis. And therefore, The next earnings call, hopefully, we can share a lot more progress we've made. We have a very clear policy when it comes to Orders and system orders, when we get system orders, normally we would actually do Press releases against orders when received in the company and that is our basic custody policy that we've been following for many years.

Speaker 2

So I don't see any change to that Happening. So my aim is to conclude negotiations, Secure orders for this company, drive InterVac forward, profitably and into the future. And as we get orders to announce them under the sort of existing practice we have as a company as we did with all the 200 lien orders, I don't see any change to that as a Thank you.

Operator

With no further questions at this time, I would like to turn the call back over to Nigel Henson for closing remarks.

Speaker 2

Thank you, and thank you for all the questions. I wish to thank all of our employees, as well as their counterparts with our industry partners, For all the hard work and dedication as we proceeded through a critical milestone in 2023, which was achieving qualification for the Trio, while at the same time achieving a significant growth year as a key technology enabler in the HDD industry's transition to HAMR, So overall, an amazing achievement. I also wish to thank our investors for their ongoing support. And as always, please reach out to Claire directly, who would like to follow-up with us and look forward to updating you all on our Q1 call in early May. With that, I will conclude today's call.

Operator

Thank you. This does conclude today's conference. You may now disconnect.

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Key Takeaways

  • Intevac posted Q4 revenues of $12.9 M and full-year 2023 sales of $52.7 M—up 47% year-over-year—driven by accelerated HAMR upgrade demand from its leading HDD customer.
  • Strong product mix and record upgrades led to Q4 gross margins of 46% and full-year margins of 38.4%, while operating expenses were reduced sequentially and net losses narrowed.
  • The company ended 2023 with a cash and investment balance of $72.2 M (just below prior guidance due to late receivable payments) and a backlog of $42 M, underscoring a focus on protecting its balance sheet.
  • Intevac achieved system qualification for its next-generation Trio platform by year-end, targeting a $1 B served market, and is negotiating a commercial supply agreement expected to conclude in Q1.
  • To enhance long-term value, management withdrew near-term financial guidance, plans to resolve customer receivable and inventory issues (including pausing new HDD shipments until payments clear), and will prioritize sustainable growth, profitability, and cash flow.
A.I. generated. May contain errors.
Earnings Conference Call
Intevac Q4 2023
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