Everspin Tech Q3 Earnings Call Highlights

Key Points

• Record Q3 performance: Revenue rose 47% year over year to $20.6 million, driven by stronger MRAM product sales and non-product revenue. Everspin expects fourth-quarter revenue of $21.5 million to $22.5 million.
• Growth across strategic markets: Demand increased in industrial automation, data centers, medical devices and energy management, while aerospace and defense—particularly low-Earth-orbit satellites—were identified as major longer-term opportunities.
• Costs and technology investments remain key considerations: Litigation expenses pressured operating results, though price increases are expected to support product margins. Everspin remains debt-free with $43 million in cash and is advancing new Toggle, STT-MRAM, xSPI and CXL-related products through 2027–2029.

Everspin Tech NASDAQ: MRAM reported record third-quarter revenue of $20.6 million, up 47% from a year earlier and slightly above its guidance range, as product sales and non-product revenue increased. The company also issued fourth-quarter revenue guidance of $21.5 million to $22.5 million.

Chief Executive Officer Sanjeev Aggarwal said the quarter marked the highest revenue in the company’s history. Non-GAAP earnings were $0.12 per diluted share, within the company’s prior outlook of $0.10 to $0.15 per share.

Product Sales Rise Across Key Markets

MRAM product revenue, including Toggle and STT-MRAM products, totaled $16.9 million, rising 34% year over year and 11% sequentially. Aggarwal attributed the growth to demand from industrial automation, data center, medical and energy-management applications.

Industrial automation demand continued to recover, particularly in Japan, while data-center demand was supported by RAID storage configurations. In Europe, energy-management design wins transitioned into production shipments during the quarter, Aggarwal said.

The company also highlighted increased medical-device adoption. According to Aggarwal, Everspin’s MRAM is being used in applications requiring reliability, endurance and data retention during power loss, including dialysis machines, infusion pumps, portable diagnostic devices, defibrillators and patient-monitoring equipment. He said the company saw a “significant uptick” in revenue from the segment, supported by new design wins and additional customer demand.

During the question-and-answer session, Aggarwal identified low-Earth-orbit satellite applications in aerospace and defense, along with data centers, as the company’s most promising growth areas over the next several years. Industrial automation in Japan and Europe also remains a growing market, he said.

Non-Product Revenue and Margins

Licensing, royalty, engineering-services and other revenue rose to $3.7 million from $1.4 million in the prior-year quarter. Chief Financial Officer Bill Cooper said the increase was primarily tied to continued revenue recognition under a $40 million subcontract agreement with a U.S. prime contractor.

GAAP gross margin was 51.4%, compared with 51.3% a year earlier. Higher-margin non-product revenue helped support overall margins, but elevated manufacturing and production costs weighed on product gross margin.

Cooper said Everspin began implementing price increases during the fourth quarter to address higher costs for materials and services. The company expects product margins to improve sequentially and continues to target long-term gross margins above 50%.

Cooper said licensing, royalty and engineering-services revenue should remain a high-margin category, though the exact level will depend on the mix of royalties, foundry services, licensing and engineering work. He described a range of roughly 70% to 90% as a useful framework for the category’s gross margin.

Expenses, Cash and Fourth-Quarter Outlook

GAAP operating expenses increased to $18.5 million from $8.8 million a year earlier, largely because of $6 million in litigation costs. Non-GAAP operating expenses were $8.5 million, up 13% from the prior-year period, reflecting greater spending on customer engagement and marketing initiatives.

Cooper said litigation costs are expected to remain substantial in the fourth quarter but should be somewhat lower than in the third quarter. He added that the matter is expected to go before an administrative law judge near the end of the year and that litigation expenses should decline significantly in 2027.

The company’s non-GAAP net income was $3.1 million, or $0.12 per diluted share, compared with $1.5 million, or $0.06 per diluted share, in the third quarter of 2025. Everspin said its non-GAAP results exclude stock-based compensation, litigation expenses and a regulatory provision.

On the regulatory provision, Cooper said the company recorded an estimate related to a potential export-controls fine from the Bureau of Industry and Security within the Department of Commerce. The matter has not been settled, he said.

Everspin ended the quarter debt-free with $43 million in cash and cash equivalents, down from $45 million at the end of the prior quarter. Operating cash flow rose to $0.9 million from $0.2 million in the second quarter.

• Fourth-quarter revenue guidance: $21.5 million to $22.5 million.
• Fourth-quarter GAAP loss guidance: $0.08 to $0.13 per diluted share.
• Fourth-quarter non-GAAP earnings guidance: $0.13 to $0.18 per diluted share.

Technology Roadmap and New Partnerships

Everspin said it remains on schedule to deliver first qualified silicon for Toggle and sensor products at Microchip’s Gresham, Oregon facility during the second half of 2027. The company expects first qualified STT products in the first half of 2028.

The company also said it expects a prototype of its 256-megabit xSPI product, based on TSMC’s 16-nanometer FinFET process, in the first half of 2027. The product is planned as the first offering in its UNISYST family, which Everspin expects to expand to one-gigabit, two-gigabit and eight-gigabit densities. Potential applications include satellite secure boot memory, FPGA configuration memory and flight-control systems.

Everspin recently entered a partnership with Teledyne HiRel Semiconductors, under which Teledyne HiRel will offer Everspin’s 64-megabit, 128-megabit and 256-megabit PERSYST STT-MRAM products for military and aerospace customers.

The company also demonstrated what it described as the world’s first CXL-connected MRAM at a September Storage Networking Industry Association developer conference. Aggarwal said customer response to the demonstration was positive, with follow-up discussions underway to identify applications. He said Everspin hopes to identify opportunities in the fourth quarter or first quarter.

Separately, Everspin led the formation of a JEDEC task group focused on LPDDR persistent memory. Aggarwal said standards work could take roughly 18 to 24 months, with the company targeting LPDDR6 MRAM samples by the end of 2028 and early revenue in 2029.

About Everspin Tech (NASDAQ:MRAM)

Everspin Technologies, Inc develops and supplies magnetic random-access memory (MRAM) products. Its nonvolatile memory solutions retain data when power is removed and are designed for applications that require fast performance, high endurance and reliable data retention.

The company offers MRAM products based on toggle and spin-transfer torque (STT) technologies, including parallel and serial-interface memory devices, as well as higher-density solutions for embedded and storage applications.

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