Executive Summary

Q3 FY2019 revenue was $2.16M, down 38% year over year and up 3% sequential; non-GAAP gross margin was 48.9% and non-GAAP EPS was $(0.03) .
Management cut FY2019 revenue outlook to $10.4M ±$0.3M and guided Q4 revenue to $3.0M ±10% with non-GAAP GM ~60% ±3%; reductions driven by customer pushouts in hearables (Amazon AVS), eFPGA licensing and military shipments .
CEO outlined catalysts starting early 2020: a mega-cap partner IoT dev platform on EOS S3, TV remote-control design wins with Atmosic/Retune DSP, Nations Technologies eFPGA win, and expanding SensiML SaaS customers (26 at Q3, seven Fortune 500) .
Management targets non-GAAP operating breakeven by end of Q1 2020 and breakeven/profit in Q2 2020; breakeven requires ~$6M quarterly revenue and GM above low 60% with OpEx near ~$4.0–$4.2M .

What Went Well and What Went Wrong

What Went Well

Japanese smartphone OEM broadened integration: first phone launched in August; EOS S3 pre-production shipped for three additional models targeted before year-end, pointing to ramp in 2020 (“we have now shipped pre-production orders… three additional phones… total number of models to four”) .
Strategic ecosystem wins: Atmosic and Retune DSP partnerships yielding two voice-enabled TV remote control design wins with several hundred-thousand unit potential in 2020; Nations Technologies selected ArcticPro eFPGA for next-gen low-power IoT SoC .
SensiML momentum: 26 customers at Q3 (up from 12 in Q2, three in Q1); majority industrial use cases with longer, more predictable revenue stream (“SensiML closed Q3 with a total of 26 customers… seven… Global Fortune 500”) .

What Went Wrong

FY outlook cut: revenue reduced by ~$3M vs prior plan due to pushes in hearables (Amazon AVS software change and Amazon’s own TWS launch, -$1.1M), eFPGA license (-$0.75M), military (-$0.4M), and SensiML conversions (-$0.5M) .
Q3 revenue mix headwinds: mature products fell to $1.1M (vs $2.0M LY) and display bridge declines weighed; non-GAAP net loss widened to $3.52M despite cost controls .
SensiML conversion delays: evaluation-to-SaaS timelines longer than anticipated, pushing some revenue into 2020; management hired a director of software sales to accelerate closures .

Financial Results

Metric	Q3 2018	Q1 2019	Q2 2019	Q3 2019
Revenue ($USD Millions)	$3.510	$3.194	$2.087	$2.158
GAAP EPS ($)	$(0.03)	$(0.04)	$(0.05)	$(0.04)
Non-GAAP EPS ($)	$(0.03)	$(0.03)	$(0.04)	$(0.03)
GAAP Gross Margin (%)	49.7%	62.0%	49.0%	48.2%
Non-GAAP Gross Margin (%)	50.5%	62.8%	49.8%	48.9%
Non-GAAP Operating Expenses ($USD Millions)	$4.5	$4.8	$4.8	$4.5

Segment breakdown:

Metric	Q1 2019	Q2 2019	Q3 2019	Q3 2018
New Products Revenue ($USD Millions)	$0.7	$0.7	$1.0	$1.5
Mature Products Revenue ($USD Millions)	$2.5	$1.4	$1.1	$2.0

Revenue by geography:

Metric	Q3 2018	Q2 2019	Q3 2019
Asia Pacific (% of Revenue)	50%	26%	25%
North America (% of Revenue)	39%	51%	70%
Europe (% of Revenue)	11%	23%	5%

KPIs:

Metric	Q1 2019	Q2 2019	Q3 2019
Customers ≥10% of Sales (count)	2	2	4
Quarter-end Cash ($USD Millions)	$23.2	$28.2	$24.8
Weighted Avg Shares (Millions)	96.824	99.226	116.387

Notes on non-GAAP adjustments and impact: Q3 non-GAAP excludes stock-based compensation (CoR $15k, R&D $521k, SG&A $212k) and equipment write-off; GM uplift ~0.7 percentage points from GAAP to non-GAAP .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Millions)	FY 2019	$13.0–$13.5	$10.4 ± $0.3	Lowered (~$3M)
Non-GAAP Gross Margin (%)	FY 2019	Low 60s	High 50s	Lowered
Total Revenue ($USD Millions)	Q4 2019	~$5.5–$6.5 (implied)	$3.0 ±10%	Lowered
Non-GAAP Gross Margin (%)	Q4 2019	Mid to high 60s	~60% ±3%	Lowered
Non-GAAP OpEx ($USD Millions)	Q4 2019	High $4M range (decline from Q3)	~$4.2 ±$0.3	Maintained range
Stock-based Compensation ($USD Thousands)	Q4 2019	Mid-$700s	~760	Maintained
Cash Usage ($USD Millions)	Q4 2019	>50% decline vs Q3	$2.8–$3.2	Quantified lower

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2019)	Previous Mentions (Q2 2019)	Current Period (Q3 2019)	Trend
Hearables & Amazon AVS	Early design wins; QuickAI HDK + SaaS; expectations for ramp from consumer introductions	AVS Certification/Qualification path via Retune DSP; reference design slated for Amazon AVS page; delays reduce 2019 outlook by ~$1.2M	Amazon released proprietary voice software; customers waiting for integration; Amazon’s TWS launch; Q4 revenue -$1.1M; ramp expected Q1 2020	Pushouts near-term, ramp 2020
Trade/tariffs (China)	N/A	Tariffs delayed consumer OEM launch to Q1 2020; some manufacturing moving to Vietnam	Continued delays impacting EOS S3 OEMs; expectation of 2020 cycle	Headwind easing in 2020
Japanese smartphone OEM	4 smartphones + 1 feature phone designed; ramp in H2 2019	First phone release late Q3; additional phones delayed to late Q4; feature phone Q2 2020	First phone shipped in August; pre-production for three more; broader integration across models	Broadening adoption; volume ramps 2020
TV remote control (voice-enabled)	N/A	First design scheduled for Dec 2019; hundreds of thousands units in 2020	Two remote-control wins via Atmosic/Retune; schedules shifted to Q2 2020; hundreds of thousands units expected	Growing pipeline; later launch
eFPGA IP	ETH test chip; DoD contractor license anticipated	License with prime military contractor finalized; enhanced scalable GTM; Q4 2019 significant license targeted	Nations Tech selection; Alibaba (Pingtogue/C-Sky) ecosystem inclusion; large IP deal pushed to 2020 but higher aggregate value via mega-cap initiative; royalties likely start 2021	Platform-driven adoption building
SensiML SaaS	First 3 customers; forecast 10–16 in Q2	12 customers; plan 25–35 Q3; 50–100 by YE; distributor webinars driving leads	26 customers; conversion slower; target ~40 by YE; hired director of software sales	Momentum with longer sales cycles
Infineon IAS	Reference design launch; module planned by YE 2019	Module intro late Q4; OEM evaluations ongoing	Module scheduled for early 2020; shipments to build systems in Q4; broader launch pushed	Slight pushout; pipeline intact
Mature military products	Strong Q1 demand	$2M pushouts; rebound expected Q4 onward	Some orders returning but slower pace; balance in Q2 2020	Recovery into 2020
Mega-cap IoT dev platform	N/A	N/A	Joint EOS S3-based open-source IoT platform with mega-cap; thousands of kits before end of Q1 2020; catalyst across EOS S3, SensiML, eFPGA	New growth vector
NASDAQ compliance/reverse split	N/A	Extension to Jan 13, 2020 for bid price compliance	Preliminary proxy for reverse split approval if needed; board undecided	Monitoring listing status

Management Commentary

CEO on FY outlook reset and path to breakeven: “Currently, our fiscal 2019 guidance is for total revenue of $10.4 million plus or minus $300,000… we should be close to non-GAAP operating income breakeven at the end of Q1 2020, and we anticipate being breakeven or profitable in Q2 2020.” .
On hearables delay drivers: “Amazon has released their own proprietary voice software… customers… wait for the integration… Amazon releasing their own TWS headphones… resulted in $1.1 million in lower revenue.” .
On mega-cap platform initiative: “We have signed an agreement… to jointly develop… an IoT development platform… EOS S3 as the host processor… launch thousands of low-cost development kits… before the end of Q1 2020.” .
On Alibaba/Pingtogue (C-Sky) inclusion: “We are the only eFPGA company included in their recently announced template SoC, codenamed Swordless… targeted for tape out in 2020.” .
CFO on Q4 guide details: “Revenue guidance… $3.0 million, plus or minus 10%… non-GAAP gross margin… approximately 60% ±3%… non-GAAP operating expenses… ~$4.2 million ±$300,000… non-GAAP net loss… ~$2.4 million, or $0.02 per share.” .

Q&A Highlights

Breakeven math clarified: ~$6M quarterly revenue with GM above low 60% and OpEx at similar levels to Q4 guide (about $4.2M) to reach non-GAAP operating breakeven .
eFPGA revenue cadence: licensing revenue “couple of million” range in 2020; royalties likely begin 2021 given program timelines .
Japanese smartphone volumes: below earlier unit expectations by “a few hundred thousand”; four phones on track for 2019, next wave in 2020 .
Hearables dynamics: AVS free software adoption and Amazon’s own TWS increased near-term delays, but management expects broader OEM white-label activity .
SensiML conversions: customers remain engaged; new software release and push to use QuickLogic dev kits to speed evaluation; dedicated SaaS/AI sales lead hired .

Estimates Context

Wall Street consensus (S&P Global) for Q3 2019 EPS and revenue was unavailable due to data access limits at the time of this analysis; we attempted retrieval but hit the daily limit (“Daily Request Limit… Exceeded”). As a result, we cannot formally benchmark Q3 actuals vs consensus and note this unavailability explicitly [GetEstimates error].

Key Takeaways for Investors

FY2019 reset and Q4 guide reflect temporary customer timing issues; near-term numbers are weak, but mix should inflect in Q1/Q2 2020 on SaaS/eFPGA/IP and consumer launches .
The mega-cap EOS S3 platform and Alibaba/Pingtogue template inclusion are strategic catalysts that can scale developer adoption and drive higher-margin IP/SaaS revenue; watch for kits launch by Q1 2020 and license agreements in 2020 .
Hearables remain strategic; AVS integration and Amazon’s own product altered timing but expanded market validation—expect OEM white-label ramp in 1H20 .
Japanese OEM adoption is broadening across phone models, with feature phone ramp potential in 2020; this supports EOS S3 unit volumes and revenue diversification .
Military mature products should recover into 2020, smoothing seasonality versus consumer-oriented businesses .
Cash position of $24.8M with revolver provides runway; Q4 cash usage $2.8–$3.2M and minimal burn targeted by Q1, breakeven Q2—reduces financing risk; NASDAQ listing compliance monitored via potential reverse split .
Trading implications: near-term weakness and guidance cut could pressure shares; 2020 catalysts (mega-cap platform, remote controls, eFPGA licenses, SensiML conversions) are key to rerating—focus on evidence of Q1/Q2 revenue acceleration and GM >60% to validate breakeven trajectory .

Appendix: Documents Read

Q3 2019 Form 8-K and press release with full tables and non-GAAP reconciliations .
Q3 2019 earnings call transcript (full) –.
Q2 2019 Form 8-K and press release –; Q2 2019 earnings call transcript –.
Q1 2019 Form 8-K and press release –; Q1 2019 earnings call transcript –.

No other Q3 2019 press releases were found in the specified window [ListDocuments none].

QUICKLOGIC Corp (QUIK)·Q3 2019 Earnings Summary