EVERSPIN TECHNOLOGIES INC. (MRAM)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $13.1M, up sequentially and above guidance ($12–$13M) on stronger-than-expected product sales; non-GAAP EPS was $0.02, above guidance (breakeven to $0.05), while GAAP EPS was $(0.05) .
• Versus S&P Global consensus, revenue beat ($13.1M vs $12.5M*), but EPS was a minor miss ($0.02 vs $0.03*); the EPS shortfall reflects a lower mix of high-margin licensing/other revenue YoY (51.4% GM vs 56.5% YoY) despite stable sequential GM .
• Management reiterated 2H-weighted 2025 on backlog improvement and conversion of STT-MRAM design wins; Q2 2025 outlook: revenue $12.5–$13.5M and GAAP basic EPS of $(0.05) to $0.00; non-GAAP basic EPS breakeven to $0.05. Guidance excludes potential China tariff impacts given exemptions/shipping terms .
• Catalysts: continued IBM FCM4 ramp, auto wins (Lucid Gravity) and high-reliability xSPI launches (EM064LX/EM128LX HR), plus DoD/Frontgrade/QuickLogic/Purdue programs expected to pick up in 2H 2025 .

What Went Well and What Went Wrong

• What Went Well

  • Product revenue outperformed internal expectations, driving the revenue beat vs guidance; non-GAAP EPS above guidance on “prudent expense management.” “We are pleased to report our first quarter results with revenue of $13.1 million and non-GAAP EPS of $0.02, both above our guidance range… higher than expected product revenue.” .
  • Strategic/mission-critical design traction: continued IBM FCM4 ramp; auto (Lucid Gravity) shipments; Blue Origin/Astro Digital deep-space wins; announced new automotive-grade xSPI HR parts (AEC-Q100 Grade 1) .
  • Balance sheet strength: cash and equivalents rose to $42.2M; operating cash flow was $1.4M in Q1 .

• What Went Wrong

  • YoY top-line and margin pressure: revenue down 9% YoY and gross margin down 510 bps YoY on lower high-margin licensing mix; GAAP loss widened YoY to $(1.2)M .
  • Licensing/royalty/other revenue fell YoY to $2.1M (from $3.6M), reflecting lumpy timing on programs like Frontgrade .
  • EPS vs consensus modestly light: non-GAAP EPS of $0.02 vs $0.03* consensus, as mix shifted toward product vs licensing YoY (though GM held ~flat sequentially at ~51%) .

Financial Results

Overall performance (YoY and QoQ context; all $USD):

Q1 2025 vs S&P Global consensus

Segment/line-item mix

Key KPIs

Notes: Q1 2025 revenue declined 9% YoY and 1% QoQ; GAAP operating margin was (14.7)%; non-GAAP operating margin (2.7%) . Management attributed YoY GM compression to lower mix of high-margin licensing/other revenue .

Guidance Changes

Management reiterated that 2025 is expected to be 2H-weighted on seasonality, backlog improvement, and program ramps; they expect gross margins to remain 50%+ through the year .

Earnings Call Themes & Trends

Management Commentary

• “We are pleased to report our first quarter results with revenue of $13.1 million and non-GAAP EPS of $0.02, both above our guidance range… due to strength in product revenue.”
• “We did not experience any tariff related impact on our Q1 results… our guidance for the second quarter does not include potential impact from tariffs… we are monitoring it closely.”
• “Our GAAP gross margin was 51.4%… down from 56.5% in Q1 ’24. The decrease… was due to lower mix of high-margin licensing and other revenue.”
• “Backlog is improving, and… traction on some of the STT products has also been improved.”
• “We announced two new products as part of our xSPI family… AEC‑Q100 Grade 1… addressing demand in aerospace, defense and extreme industrial environments.”

Q&A Highlights

• Tariffs/China exposure: Low direct China sales; importer bears tariffs; wafers sourced in Germany/U.S./Taiwan; final assembly in Taiwan; guidance excludes tariff effects .
• Demand/backlog: Early signs of recovery; backlog improving; STT‑MRAM traction increasing; expect 2H weighting as inventory digestion ends .
• Mix/margins: GM steady ~51% sequentially; expect 50%+ GM for the year; product vs licensing split not guided .
• DoD/other income cadence: Q1 lighter vs Q4 due to milestones; activity to increase from Q2 and more in 2H 2025 .
• OpEx: Elevated by product development work; expected to remain broadly in similar range through 2025 .

Estimates Context

• Revenue beat vs S&P Global consensus: $13.14M vs $12.50M*; EPS slight miss: $0.02 vs $0.03*; coverage remains thin (2 revenue estimates; 1 EPS estimate)*.
• Q4 2024 also topped revenue consensus ($13.24M vs $12.50M*), with EPS notably above consensus ($0.126 vs $0.06*) given other‑income contribution *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Revenue and non-GAAP EPS came in above company guidance; mix shift away from licensing continues to cap margins vs prior year, but sequential GM stability and commentary point to ~50%+ GM through 2025 .
• Narrative remains 2H‑weighted: improving backlog, STT‑MRAM design conversions, and ramping government/defense programs suggest stronger exits; this is a potential setup for estimate revisions later in 2025 if execution holds .
• Secular/mission‑critical use cases are broadening (data center, automotive, aerospace/defense); new automotive‑grade xSPI launches and IBM/Lucid momentum support medium‑term growth optionality .
• DoD/Amentum/Frontgrade/QuickLogic/Purdue programs are lumpy but provide diversified, partially non‑dilutive funding that can augment P&L and cash in 2H 2025; monitor “other income” cadence .
• Near‑term trading: Expect investors to weigh revenue beat vs EPS miss to consensus and limited direct tariff risk; stock likely reacts to signs of H2 backlog conversion and incremental design-win disclosures .
• Risk checks: Licensing revenue lumpiness; industrial recovery timing; tariff/regulatory uncertainty; execution on product qualifications and sampling to production .
• Watch Q2 print for: mix trajectory (product vs licensing), gross margin ≥50%, backlog/proxy indicators, and updates on H2 ramps (DoD milestones, xSPI HR sampling/POs) .

Footnotes:
*Values retrieved from S&P Global.