Executive Summary

Q1 2020 revenue was $2.16M, down 25% QoQ and 32% YoY; GAAP gross margin contracted to 51.7% (vs 64.9% in Q4), and GAAP net loss was $3.17M ($0.38 per share) .
Management guided Q2 2020 revenue to $2.5M ±10% with non-GAAP GM ~61% and OpEx ~$3.5M, expecting sequential revenue increases through 2020 despite COVID-related delays .
Strategic highlights: Kyocera smartphone programs remain on track and are the key near-term driver for new products; one major streaming-TV remote engagement removed always-on voice for its 2020 bundle due to COVID-related engineering delays, reducing expected 2020 revenue .
Liquidity supported by $15M LOC and ~$1.2M PPP loan (received May 8), with Q2 cash usage guided to $1.7–$2.2M; restructuring lowers OpEx run-rate starting Q2 .

What Went Well and What Went Wrong

What Went Well

Kyocera smartphone programs: “Kyocera is definitely the big driver” of the rebound in new product revenue into Q2; a fourth phone launched in Q1 with additional phones expected later in 2020 .
eFPGA IP licensing: Signed a license for a radiation-hardened application; modest revenue in Q2 with future royalties, underpinning the IP strategy .
Cost actions and margin outlook: Restructuring lowers OpEx to ~$3.5M starting Q2; non-GAAP gross margin expected to rebound to low 60s in Q2; breakeven model at ~$6M quarterly revenue with low-to-mid 60% GM .

What Went Wrong

COVID-19 impact on customer launches: A large streaming/smart TV customer removed always-on voice from its 2020 remote bundle due to lab access and logistics delays, cutting expected revenue .
QoQ revenue and margin compression: Q1 revenue fell 25% QoQ to $2.16M; GAAP GM declined to 51.7% due to mix, with some higher-margin mature revenue moving into Q2 .
Supply chain/assembly constraints: Philippine assembly partner operated at reduced capacity under strict transportation policies, creating near-term fulfillment challenges, though improving .

Financial Results

Sequential trend (last three quarters)

Metric	Q3 2019	Q4 2019	Q1 2020
Revenue ($USD Millions)	$2.158	$2.871	$2.158
GAAP Gross Margin %	48.2%	64.9%	51.7%
Non-GAAP Gross Margin %	48.9%	65.6%	52.2%
GAAP Net Loss ($USD Millions)	$(4.271)	$(3.063)	$(3.165)
Non-GAAP Net Loss ($USD Millions)	$(3.523)	$(2.407)	$(3.084)
GAAP OpEx ($USD Millions)	$5.234	$4.791	$4.177
Non-GAAP OpEx ($USD Millions)	$4.5	$4.2	$4.1
GAAP EPS	$(0.04)*	$(0.37)	$(0.38)
Non-GAAP EPS	$(0.03)*	$(0.29)	$(0.37)

*Q3 2019 EPS reflects pre–reverse split share count; Q4 2019 and Q1 2020 reflect the 1-for-14 reverse split as disclosed .

YoY comparison

Metric	Q1 2019	Q1 2020
Revenue ($USD Millions)	$3.194	$2.158
GAAP Gross Margin %	62.0%	51.7%
Non-GAAP Gross Margin %	62.8%	52.2%
GAAP Net Loss ($USD Millions)	$(3.476)	$(3.165)
GAAP EPS	$(0.50)	$(0.38)
Non-GAAP Net Loss ($USD Millions)	$(2.525)	$(3.084)
Non-GAAP EPS	$(0.37)	$(0.37)

Segment breakdown (Revenue)

Segment Revenue ($USD Millions)	Q1 2019	Q3 2019	Q4 2019	Q1 2020
New Products	$0.69	$1.00	$0.70	$0.54
Mature Products	$2.50	$1.10	$2.20	$1.70
New Products Mix (%)	22%	47%	25%	23%
Mature Products Mix (%)	78%	53%	75%	77%

KPIs and balance sheet

KPI	Q3 2019	Q4 2019	Q1 2020
Cash and Equivalents ($USD Millions)	$24.722	$21.448	$18.898
Revolving Line of Credit Draw ($USD Millions)	$15.0	$15.0	$15.0
PPP Loan Received ($USD Millions)	—	—	$1.19 loan executed May 6; funds received May 8 (~$1.2)

Performance vs Estimates

Metric	Q1 2019	Q4 2019	Q1 2020	Consensus (Q1 2020)	Surprise
Revenue ($USD Millions)	$3.194	$2.871	$2.158	N/A – S&P Global consensus unavailable at time of retrieval	N/A
GAAP EPS	$(0.50)	$(0.37)	$(0.38)	N/A – S&P Global consensus unavailable at time of retrieval	N/A

Note: We attempted to retrieve Wall Street consensus via S&P Global; data was unavailable due to an API request limit at the time. Estimate comparisons are therefore omitted.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q1 2020	$2.3 ±10%	Actual $2.16	—
Revenue ($USD Millions)	Q2 2020	—	$2.5 ±10%	New
New Product Revenue ($USD Millions)	Q2 2020	—	~$1.1	New
Mature Product Revenue ($USD Millions)	Q2 2020	—	~$1.4	New
Non-GAAP Gross Margin %	Q1 2020	~64% ±3%	Actual 52.2%	Lower (actual)
Non-GAAP Gross Margin %	Q2 2020	—	~61% ±3%	New
Non-GAAP OpEx ($USD Millions)	Q1 2020	~$3.9 ±0.3	Actual ~$4.1	—
Non-GAAP OpEx ($USD Millions)	Q2 2020	—	~$3.5 ±0.3	Lower
Non-GAAP Net Loss ($USD Millions)	Q2 2020	—	≈$2.0; $(0.23)/sh	New
Cash Usage ($USD Millions)	Q2 2020	—	$1.7–$2.2	New
FY 2020 Revenue Growth View	FY 2020	Mid-to-high teens	Lower-to-mid teens; ~20% impact vs Feb views	Lower
FY 2020 GM % View	FY 2020	Mid-60s	Expect improvement through year (Q2 ~61%)	Maintained trend context

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2019)	Previous Mentions (Q4 2019)	Current Period (Q1 2020)	Trend
AI/technology initiatives	SensiML growth; ST/Nordic partnerships; Nations Tech eFPGA; SiFive DesignShare	Open-source tooling with mega-cap; FLEXino kit with Flex/Infineon; Kyocera EOS S3 wins	Launching QuickFeather OSHW board; broader mega-cap initiative imminent; hundreds of boards expected in Q2	Expanding ecosystem; near-term developer scale-up
Supply chain & operations	—	COVID risk noted; conservative outlook	Assembly constraints in Philippines; lab access/logistics delaying customer testing; supply chain partners improving	Temporary constraints; improving cadence
Product performance (consumer)	—	Streaming TV remote opportunity expected in 2020	Remote drops always-on voice feature for 2020 bundle; engineering delays; pursuit of other remote engagements	Near-term headwind from one program
Smartphones (Kyocera)	—	3 phones designed; TAM context; 2020 contribution ~$2M	Fourth phone launched; additional designs ramping; limited COVID impact	Strengthening driver of new product revenue
Earbuds/hearables	—	AVS-compliant solution; China ODMs tempered due to COVID	Mix of Tier 2 ODMs; one Tier 1; AVS certification targeted by end of Q2	Pipeline intact; certification timing critical
eFPGA IP	Nations Tech (Q3)	Multiple licenses contemplated	Radiation-hardened license signed; royalties later	Progressing; defense-linked applications
Cost & profitability	—	Restructuring to $4M annualized savings; breakeven ~$6M/qtr with mid-60% GM	Q2 OpEx ~$3.5M; GM rebound guided; “$6M gets us to non-GAAP profitability”	On track post-restructuring

Management Commentary

“Despite this revenue impact, we are still forecasting not only a sequential revenue increase for Q2, 2020. But also stair-step increases, through the remainder of the year.”
“The remote control will now be shipping without any always-on voice recognition technology, and therefore will not include our device. This change is the primary reason for the reduction in our annual revenue outlook.”
“We plan to formally announce this effort [mega-cap initiative] and provide more detail via a press release and blog posts in the coming weeks.”
“Revenue of around $6 million should get us to non-GAAP profitability.”
“We successfully secured a Paycheck Protection Program… loan… approximately $1.2 million… received on May 8th… We will use the funds primarily for employee payroll and benefits.”

Q&A Highlights

New product revenue drivers: More than half of Q2’s ~$1.1M new product revenue is Kyocera; remainder includes IP licensing and smaller deals .
Kyocera trajectory: No material COVID impact; launches typical in spring and fall with multiple phones concurrently shipping later in 2020 .
Streaming remote setback: Customer reverted to prior remote without always-on voice due to delayed user testing/logistics; QuickLogic reusing engineering work with other customers .
AVS certification: Documentation submitted; lab time scheduling underway; aim to complete by quarter end, subject to social distancing–related lab constraints .
Supply chain: Wafer fab stable; assembly in Philippines constrained but recovering; temporary dorms established to maintain operations .
QuickFeather demand: Anticipated several hundred board shipments in Q2 with potential to reach ~1,000 as launch proceeds .
eFPGA pipeline: 2020 license count target “fingers and a thumb on one hand” (~5) would be a good outcome; COVID impact limited for eFPGA .
Gross margin and breakeven: Q2 non-GAAP GM guided to ~61%; breakeven at ~$6M quarterly revenue with low-to-mid 60s GM and ~$3.5M OpEx .

Estimates Context

S&P Global consensus (revenue and EPS) for Q1 2020 was unavailable at time of retrieval due to an API request limit. As a result, estimate comparisons and surprises are not provided. Management did not cite specific Street estimates on the call [GetEstimates error; see note above].

Key Takeaways for Investors

Q1 showed COVID-impacted execution with a removed consumer remote engagement and mix-driven margin compression; watch for sequential rebound in Q2 as guided (revenue ~$2.5M, GM ~61%) .
Kyocera smartphone programs are the most tangible near-term catalyst for new product revenue growth; multiple phones in market and pipeline mitigate consumer gadget delays .
eFPGA IP licensing has begun contributing (radiation-hardened license), adding higher-margin, less supply-chain-dependent revenue streams; potential for additional licenses in 2020 .
Cost structure reset is material: OpEx run-rate to ~~$3.5M in Q2; breakeven sensitivity (~~$6M revenue, mid-60% GM) provides a clear profitability path if pipeline converts .
Liquidity is adequate near term with ~$18.9M cash at Q1, $15M revolver drawn, and ~$1.2M PPP loan; Q2 cash usage guided to $1.7–$2.2M as inventory is built for EOS S3 .
Execution watch items for 2H: AVS lab certification timing, scaling QuickFeather/mega-cap initiative, and conversion of SensiML evaluations to paid SaaS; these can shift mix and margins favorably .
COVID-19 remains the key risk to consumer launch timing and assembly throughput; management indicates supply chain normalization is progressing, but timelines remain fluid .

QUICKLOGIC Corp (QUIK)·Q1 2020 Earnings Summary