Q2 2024 Earnings Summary
- QuickLogic is experiencing an increasing win rate in IP contracts and aims to achieve 10 IP contracts for the year, which could significantly boost revenue.
- The company plans to be the first eFPGA company to offer Hard eFPGA IP on Intel's 18A node, potentially providing a competitive advantage and opening up significant revenue opportunities.
- QuickLogic has significant potential revenue from chiplet and storefront opportunities not fully reflected in the current sales funnel, including $40 million in potential chiplet deals and a Strategic Radiation Hardened FPGA development contract that could lead to several hundred million dollars in future storefront revenue.
- The company lowered its full-year growth projection from 30% to 15% due to delays in contracts and customer push outs, indicating potential challenges in meeting growth targets.
- Approximately $3 million of revenue is being pushed into next year because of delays not under the company's control, impacting current year revenue.
- A significant portion of the company's $189 million sales funnel includes opportunities with revenues beyond the next two years, creating uncertainty in near-term revenue realization and possible pressure on short-term financial performance.
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Revenue Guidance Reduction
Q: Is $3 million revenue pushed to next year due to customer delays?
A: Yes, about $3 million of revenue is being pushed into next year because of customer delays not under our control. -
Guidance Decrease Explanation
Q: Is the growth reduction from 30% to 15% split equally between factors?
A: It's close to half and half between different factors contributing to the lowered guidance from 30% to 15% growth. -
Future Revenue Acceleration
Q: Will revenues from the Strategic Rad Hard program increase in '25 and '26?
A: Yes, as we move into manufacturing and testing, revenues from the program will accelerate significantly in 2025 and 2026. -
Pipeline and Win Rate
Q: How many proposals are in the funnel, and what's the expected win rate?
A: Our win rate is increasing. We aim to win 10 IP contracts this year and expect to close more deals by early fall. -
Storefront and Chiplet Opportunities
Q: How will storefront and chiplet deals contribute to growth next year?
A: About 25% of IP opportunities now include device development and storefront responsibility. We received $8 million in development deals recently, indicating increased interest in storefront-oriented designs. -
Sales Funnel Composition
Q: What percentage of the $189 million funnel is storefront deals?
A: More than half of the $189 million sales funnel is related to storefront deals. Actual storefront revenue potential is significantly higher outside the 2-year window. -
November 2022 Customer Delay
Q: Is the November '22 customer delaying due to funding or resources?
A: Yes, they are pushing their needs into 2025 due to subcontractor delays. Delays are mainly due to funding and rescheduling. -
CTG Partnership Impact
Q: How will the CTG partnership affect your sales funnel?
A: CTG will help accelerate funnel growth by pre-qualifying opportunities, especially in the Defense Industrial Base, leading to increased demand for both storefront and IP. -
First eFPGA on Intel 18A
Q: Will you be first to offer eFPGA Hard IP on Intel 18A node?
A: Yes, that is our target, and we believe we will be the first eFPGA company on Intel 18A node. -
Operating Expenses Outlook
Q: How should we think about OpEx for the year?
A: OpEx was $2.9 million in Q2, and we expect it to remain flat quarter-over-quarter through the end of the year. -
$40 Million Chiplet Deals
Q: Is the $40 million in chiplet deals included in the $189 million funnel?
A: No, the $40 million chiplet proposals are not entirely included in the $189 million funnel, as one project extends beyond the 2-year window. -
Connectivity Revenue Outlook
Q: Is connectivity revenue expected to improve or decline?
A: Some connectivity revenue was pushed from Q2 to the second half due to customer funding delays, but we expect it to improve going forward. -
Strategic Rad Hard Program Transition
Q: How will the Strategic Rad Hard deal change after the third tranche?
A: After development, we aim to become the storefront supplier of the resulting device, with market potential of several hundred million dollars beyond the $72 million development contract. -
Assurance of Deliverables
Q: Are deliverables on track despite the lowered guidance?
A: Yes, we have not lost any contracts to competitors, and we're performing on or ahead of schedule on all contracts.
Research analysts covering QUICKLOGIC.