Everspin Tech NASDAQ: MRAM reported first-quarter 2026 results at the high end of its guidance range and highlighted a newly announced $40 million, two-and-a-half-year agreement with a U.S. prime contractor focused on defense-related Toggle MRAM process technology and engineering services.
New $40 million defense-related agreement announced
President and CEO Sanjeev Aggarwal said the company announced “a new two-and-a-half year, $40 million agreement with a U.S. prime contractor” after market close. Under the agreement, Everspin will act as a subcontractor on an existing prime contract, providing “Toggle MRAM process technology capabilities and engineering services for U.S. defense industrial-based customers,” according to Aggarwal.
Aggarwal also said Everspin will provide “engineering and foundry services for U.S. Department of War, or DOW, products” through its recently announced foundry services agreement with Microchip. He positioned the deal as an extension of Everspin’s history in military and aerospace applications where “performance, reliability, longevity, and domestic production are critical.”
Asked about how revenue will be recognized and the timing of contributions, CFO Bill Cooper said the company was not yet providing guidance tied to the subcontract agreement. “The ink on that is just drying,” Cooper said, adding that Everspin expects a “significant positive impact over the next 2.5 years” and that management would provide better guidance as the contract kicks off and the company progresses through the second quarter.
Cooper said he would expect the contract to have “a bit of a beneficial impact to margin as well,” while reiterating the company’s target of 50%-plus gross margins.
Q1 results: revenue up 14% year over year
For the quarter ended March 31, 2026, Everspin reported revenue of $14.9 million, up 14% year over year and near the high end of its $14 million to $15 million guidance range. Aggarwal said the quarter’s performance was driven by strength in “industrial automation, transportation, and data center applications.”
Cooper said MRAM product sales (including Toggle and STT MRAM) were $14.1 million, up 28% year over year and up 5% sequentially. Licensing, royalty, patent, and other revenue fell to $0.8 million from $2.1 million in the first quarter of 2025, which Cooper attributed to “fewer currently active projects.”
GAAP gross margin increased to 52.7% from 51.4% in the year-ago quarter. Cooper attributed margin performance primarily to higher capacity utilization and ongoing yield and cost improvements, noting that increased top-line volume can drive utilization benefits.
GAAP operating expenses were $10.6 million versus $8.7 million a year ago, driven “primarily to litigation costs” along with higher compensation and professional fees, Cooper said.
End-market drivers: industrial, transportation, and data center
Aggarwal said industrial automation growth reflected a recovery in customer demand, including in Japan, as inventory levels normalized. In transportation, he said growth came from design wins moving into production at several customers, including two rail applications.
He highlighted one customer described as a railroad operator in Asia using Everspin’s MRAM for “critical railway signal applications, such as train axle counters.” Aggarwal said axle counters must operate in harsh vibratory conditions, and that MRAM can withstand those conditions better than other memory technologies. He also said modern axle counters use MRAM to store diagnostic and maintenance data for real-time monitoring and predictive maintenance, and that MRAM supports high safety integrity levels (SIL four) for axle counter systems.
Aggarwal also cited a “leading embedded computing company in Asia” that selected Everspin’s MRAM solutions for rail transit systems because they preserve critical data during power loss and support “unlimited erase and write cycles.”
In the data center segment, Aggarwal said growth continued to be driven by Everspin’s work with IBM on “the FCM4 and FCM5 modules” and a RAID reference design at top-five hyperscale operators.
Other income and defense-related work
Aggarwal said Everspin recognized $2.1 million in other income in the first quarter and has recognized $12.8 million to date from a $14.6 million contract with a DoD contractor tied to developing a sustainment plan for MRAM manufacturing facilities to provide “continuous onshore MRAM capabilities” for aerospace and defense customers.
He said the $14.6 million effort is expected to wind down over the coming quarters, with estimated completion in the first half of 2027. In the Q&A, Aggarwal clarified that revenue from this effort was recognized “below the line,” and said the contract was intended to improve the supply chain for Toggle MRAM for the U.S. government and involved capital expenditures and supply chain robustness.
Product roadmap and manufacturing expansion
Aggarwal said the company formally introduced its UNISYST MRAM family at Embedded World in early March, describing it as “a new generation of unified memory solutions” aimed at changing how embedded systems store and access code and data. He said UNISYST is intended to deliver high read/write bandwidth in a non-volatile device, enabling fast boot and predictable performance.
Everspin expects to initially offer UNISYST in densities ranging from 128 Mb to two gigabits using an XSPI interface up to octal SPI at 200 MHz. Target use cases include AI at the edge, military and aerospace, automotive, industrial, and casino gaming. Engineering samples are expected to be available in the fourth quarter of 2026, Aggarwal said.
Aggarwal also said UNISYST would address the high-density standalone NOR flash market, which he estimated would expand Everspin’s addressable market by about $3 billion. He said the company’s goal is to capture 5% to 10% of that market “in the early years and then grow further.” Later in the Q&A, he noted that UNISYST is not expected to “strongly contribute” to Everspin’s previously discussed $100 million revenue target over the next three to five years because customer qualification can take 18 to 24 months after product availability. He suggested that if samples are available in Q4 2026 and production begins in early 2027, it could take another 18 months to ramp.
On other product efforts, Aggarwal said customers have Everspin’s PERSYST 64 Mb XSPI STT-MRAM devices and are engaged in design activity. He added that the company remains on track to qualify 128 Mb and 256 Mb high-reliability parts and expects them to be available in high volume in the second half of 2026, with customers already evaluating engineering samples.
Aggarwal also reiterated a strategic manufacturing agreement with Microchip to create a second domestic source of supply. Under a 10-year agreement, Everspin plans to establish an MRAM line at Microchip’s Oregon fab to manufacture MRAM and TMR sensor products currently produced in Chandler, Arizona, with first shipments expected in the second half of 2027.
Responding to questions on capital spending, Cooper said recent elevated CapEx reflected “a unique period of capital spend” tied to Chandler facility improvements “across a couple of different contracts.” He said that activity should settle down until the company reaches “the real heart” of the Microchip foundry services agreement. Cooper added that there will be “some significant capital spend over the next two years,” spread over time, but not so large that the company cannot manage it, and generally in line with historical annual spend.
Cash, litigation costs, and Q2 guidance
Everspin ended the quarter with $40.5 million in cash and cash equivalents, down from $44.5 million at the end of the prior quarter, and Cooper said the company remains debt-free. Operating cash flow was $0.5 million in Q1, down from $2.6 million in Q4, driven by litigation costs and increased working capital needs.
Cooper said the company believes its cash position is sufficient to support capital needs related to the Microchip foundry services agreement and continued product development investment.
For the second quarter of 2026, excluding any impact from the newly announced subcontractor agreement, Everspin guided to total revenue of $15.5 million to $16.5 million. The company expects GAAP results per diluted share to be a net loss of $0.12 to $0.07, and non-GAAP results ranging from breakeven to net income of $0.03 per diluted share. Cooper said the non-GAAP outlook excludes stock-based compensation and patent litigation costs.
On litigation spending, Cooper said Everspin incurred $1.6 million in litigation costs in Q1 and expects it to continue “in that range for at least… the next couple of quarters,” while noting the ultimate trajectory remains uncertain.
About Everspin Tech NASDAQ: MRAM
Everspin Technologies, Inc NASDAQ: MRAM is a semiconductor company specializing in the design, development and marketing of magnetoresistive random access memory (MRAM) solutions. Established in 2008 as a spin-out from Freescale Semiconductor, the company pioneered commercial MRAM products and continues to advance the technology through successive generations, including Toggle MRAM and spin-transfer torque (STT) MRAM. Everspin's non-volatile memory devices offer a unique combination of performance, endurance and data retention for a variety of applications.
The company's product portfolio includes discrete MRAM chips, embedded MRAM IP for integration into system-on-chip (SoC) designs and companion devices that leverage MRAM's fast write speeds and low power consumption.
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