QuickLogic Q3 Earnings Call Highlights

Key Points

• QuickLogic forecast a sharp fourth-quarter rebound, projecting revenue of $8 million (±10%) and non-GAAP net income of about $1.3 million. The outlook depends on closing roughly five contracts and receiving an expected funding tranche under its U.S. government development contract.
• Third-quarter revenue rose 153% year over year to $5.1 million but fell short of the guidance midpoint; the non-GAAP net loss narrowed to $1.3 million from $3.2 million a year earlier. Gross margin was 41%, below expectations, partly due to lower revenue and higher R&D costs allocated to cost of revenue.
• QuickLogic is pursuing longer-term growth through storefront devices and eFPGA IP, including a new automotive and industrial robotics design win. It expects initial storefront device demand in 2027, with production quantities potentially available later that year.

QuickLogic NASDAQ: QUIK expects fourth-quarter revenue to rise sharply and return to non-GAAP profitability, as it anticipates a new tranche of funding under a U.S. government contract and seeks to close several other agreements before the end of the fiscal year.

The company reported third-quarter revenue of $5.1 million, up 153% from a year earlier but down 6% from the preceding quarter. Revenue fell below the midpoint of its guidance because negotiations on a follow-on contract were expanded to include a storefront provision, President and CEO Brian Faith said.

QuickLogic expects to finalize the approximately $1 million contract, which targets Intel’s 18A-P manufacturing process, and recognize intellectual property revenue in the fourth quarter. Faith said the additional storefront provision delayed the agreement but could expand its long-term revenue potential.

Fourth-quarter forecast depends on contract awards

QuickLogic guided for fourth-quarter revenue of $8 million, plus or minus 10%, with $7.3 million expected from new products and $0.7 million from mature products. The company said its outlook implies approximately 72% revenue growth for fiscal 2026.

The forecast also calls for fourth-quarter non-GAAP gross margin of approximately 55%, plus or minus 5%, and non-GAAP net income of approximately $1.3 million, or $0.07 per share. QuickLogic expects non-GAAP profitability for the second half of 2026 and positive operating cash flow for the full year.

During the question-and-answer session, Faith said roughly five contracts need to close to contribute to fourth-quarter revenue. Much of that revenue would be recognized ratably rather than in the full amount of the contracts, he said.

A significant portion of the fourth-quarter forecast is expected to come from a new tranche under QuickLogic’s U.S. government development contract, which has an $89 million ceiling value. Faith said the timing of funding is not known until it arrives, describing the process as “somewhat of an opaque process.” He added that the government has generally contracted on time over the past four years.

The anticipated tranche would fund, among other expenses, two device tape-outs planned for early 2027. Faith said the development contract does not include future storefront device sales, which would be separate.

Third-quarter loss narrowed

New product revenue was $4 million in the third quarter, up 324% year over year, while mature product revenue rose 2% to $1.1 million. CFO Jim Sullivan said revenue associated with the RadPro contract was approximately $3.4 million to $3.5 million.

Non-GAAP gross margin was 41%, below the company’s outlook. Sullivan attributed the shortfall to lower revenue reducing absorption of fixed costs and a larger-than-expected allocation of research and development expenses to cost of revenue.

QuickLogic reported a non-GAAP net loss of $1.3 million, or $0.07 per share, compared with a loss of $3.2 million, or $0.19 per share, a year earlier. Non-GAAP operating expenses were approximately $3.3 million, below the midpoint of the company’s outlook.

At quarter-end, net cash was $14.2 million, excluding a $5 million drawdown from the company’s line of credit. Sullivan said third-quarter cash flow benefited from the timing of payments made in the fourth quarter. The $10.4 million increase in net cash during the first nine months included approximately $9.5 million in net proceeds from sales under QuickLogic’s at-the-market program.

Storefront and product opportunities

Faith said QuickLogic expects its IP business and new storefront offerings to contribute to growth in 2027. The company has received and delivered orders for its RadPro development kit and expects initial storefront device demand next year, with production quantities potentially available in late 2027.

QuickLogic also announced its first embedded FPGA Hard IP win in the automotive and industrial robotics sectors. Revenue from that contract will be recognized ratably beginning in the fourth quarter, with royalties expected once the customer’s chip enters production.

The company is pursuing additional contracts, including a biomedical application and a defense-related design. It is also negotiating an extension of a contract with a $2.7 million ceiling value that would involve co-developing a chiplet with YorChip. Faith said that opportunity remains pending.

For mature products, QuickLogic is developing smaller packages for existing one-time programmable devices, funded by a customer. Faith said initial revenue is expected in the first half of 2027 and that internal models show mature product revenue could reach $10 million annually through new wins, though he did not specify a timeframe.

About QuickLogic (NASDAQ:QUIK)

QuickLogic Corporation is a fabless semiconductor company that develops low-power, programmable semiconductor solutions and embedded FPGA (eFPGA) intellectual property. Its technology is designed to allow customers to add configurable logic to application-specific integrated circuits (ASICs) and systems-on-chip (SoCs), helping support customization, connectivity, sensor processing and other functions without requiring a separate FPGA device. The company offers eFPGA IP, customer-specific standard products (CSSPs), and related development tools and design services.

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