Netlist OTCMKTS: NLST executives said the company made progress in 2025 on both its memory-product business and its intellectual property enforcement efforts, while benefiting from a sharp rise in memory pricing driven by AI-related demand and a global shortage of chips.
Management cites 2025 progress and a tight memory market
Chief Executive Officer Chuck Hong said Netlist “strengthened” its long-term strategic position in 2025 with advances across product and IP initiatives, alongside “significant improvement” in full-year financial results. Hong attributed performance to strong memory demand in the second half of 2025, the execution of the sales and marketing teams, and industry pricing tailwinds.
Hong said rapid AI growth has created a supply-demand imbalance that has led to a global memory chip shortage and “sharp price increases across all product categories.” He said those dynamics are expected to persist through 2027, when new fab capacity is anticipated to come online.
In response to an analyst question about what is driving the shortage, Hong said the tightness is largely AI-driven. He said the company is feeling the impact of limited access to DRAM “raw material” (and some NAND), and described the current production environment as “a zero-sum game” in which allocating more supply to one segment reduces availability elsewhere until new capacity arrives, which he expects toward the second half of 2027.
Product update: Lightning DDR5 ramp and legacy DDR4 support
Hong highlighted momentum for Lightning, Netlist’s overclocked and low-latency DDR5 product line. He said Lightning sales volume is “ramping up nicely” in the system integrator market, and that Netlist has completed qualifications at a “global server OEM” that is now testing the products with end customers.
Hong said Netlist anticipates growth from both existing and new customers, including in high-frequency trading and high-performance computing applications. In the question-and-answer session, he said the OEM qualification and validation process has been ongoing for “six to nine months” and is nearing completion, while system integrator shipments are already occurring in “good volume” and ramping.
On legacy products, Hong said industrial and networking customers still require DDR4-based custom solutions. He said Netlist plans to support those customers through 2026 and into 2027 through last-time buy agreements concluded in 2025.
Next-generation R&D: CXL NVDIMM and low-power MRDIMM
Hong said the company is investing in strategic R&D tied to higher-performance and higher-capacity memory needs driven by AI workloads. He highlighted two areas:
- CXL NVDIMM: Hong said Netlist is sampling proof-of-concept CXL NVDIMM products to Intel and AMD for testing and validation on next-generation platforms, describing NVDIMM as a Netlist invention from over a decade ago that is now being moved onto the CXL channel.
- MRDIMM and LP-MRDIMM: Hong said MRDIMM and LP-MRDIMM are projected to become primary modules in high-capacity, high-performance server applications as DDR5 speeds increase. He said Netlist is developing a design that uses LPDDR5 DRAMs, commonly used in mobile devices, in high-end servers via its LP-MRDIMM approach.
IP and legal matters: ITC investigation and multiple appeals
Hong devoted a substantial portion of remarks to Netlist’s IP enforcement activity. He said the company continues to defend favorable jury verdicts and has expanded enforcement actions that cover DDR5 and high bandwidth memory (HBM) technologies used in AI computing.
Hong said that in December the U.S. International Trade Commission instituted an investigation into Samsung, Google, and Super Micro based on Netlist’s September complaint. According to Hong, the ITC matter centers on the importation of Samsung memory products alleged to infringe six Netlist patents: the ’366, ’731, ’608, ’523, ’035, and ’087. He said those patents read on DDR5 module products (including DDR5 RDIMM, UDIMM, SO-DIMM, and MRDIMM) and HBM. Hong said the procedural schedule has been set, with a Markman hearing in April, trial scheduled to start in November, and that a ruling in Netlist’s favor could direct U.S. Customs and Border Protection to stop infringing Samsung products from entering the U.S.
In federal district court actions, Hong said Netlist filed four separate cases in 2025 in the Eastern District of Texas against Samsung and Micron and their distributor, Avnet, asserting newly issued patents including the ’087, ’731, and ’366 that he said read on memory products representing “tens of billions” in annual revenue for the defendants.
Hong also addressed several appellate matters:
- Samsung breach of contract: Hong said a March 2025 ruling in the Central District of California found Samsung materially breached a 2015 joint development and license agreement. He said Samsung filed its appellate brief in December, and Netlist expects briefing to complete in the summer, with a possible Ninth Circuit hearing before year-end.
- Micron appeal: Hong said Micron’s appeal of a $445 million jury award is in briefing, with oral arguments expected mid-2027.
- Samsung $303 million award and IPR appeals: Hong said oral arguments on the companioned appeal and related IPR appeals involving multiple patents are scheduled for March 6, 2026 in Washington, D.C.
- Patent validity affirmances: Hong said the Federal Circuit affirmed the PTAB’s IPR decisions on the validity of the ’608 and ’523 patents in 2025, and that Samsung cannot challenge those patents going forward. He also said the appellate court affirmed the PTAB decision upholding the validity of Netlist’s ’314 patent in an IPR brought by Micron, noting Micron has 90 days to petition the U.S. Supreme Court.
During Q&A, Hong said Netlist’s outside counsel expects to take steps to seek to unstay a case against Micron in the Western District of Texas now that patents have been affirmed on appeal. Chief Financial Officer Gail Sasaki said the company expects 2026 litigation expense to be “about the same” as 2025, adding that management does not expect court cases to occur in 2026 and that ITC-related activity will be spread throughout the year.
Financial results: higher revenue, lower operating expense, stronger liquidity
Sasaki reported that for the 12 months ended December 27, 2025, revenue was $188.6 million, up 28% from 2024. She said results reflected solid demand from OEM and resale customers and significant price increases that supported gross margin improvement.
Netlist does not provide formal guidance, Sasaki said, but based on bookings and shipping to date and current visibility, the company expects first-quarter 2026 revenue to improve further from the fourth quarter of 2025.
Operating expense for full-year 2025 declined 36%, which Sasaki attributed to reduced IP legal fees and SG&A cost controls. Netlist ended 2025 with $42.1 million in cash, cash equivalents, and restricted cash, compared with $28.8 million at the end of the third quarter, and Sasaki said the company had minimal debt. She noted Netlist raised $10 million through a registered direct offering during the fourth quarter and said the company has a $10 million working capital line of credit and approximately $74 million available on its equity line of credit.
Sasaki also said Netlist improved its operational cash cycle, with inventory churn improving by 32 days versus 2024 and days sales outstanding improving by about a week year over year.
In closing remarks, management said Netlist enters 2026 positioned to build on its product momentum and IP portfolio as the industry transitions to next-generation memory technologies amid continued supply constraints.
About Netlist OTCMKTS: NLST
Netlist, Inc is a technology company specializing in the design and development of high-performance memory and storage subsystems for enterprise and data center applications. The company's product portfolio encompasses advanced memory modules, nonvolatile memory express (NVMe) solid-state drives and intelligent memory expansion systems. These solutions are engineered to boost memory density, bandwidth and overall system performance in hyperscale, cloud computing and high-performance computing environments.
Headquartered in Irvine, California, Netlist serves customers across the Americas and Asia through a combination of direct sales and channel distribution partners.
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