Sign in

You're signed outSign in or to get full access.

QC

QUICKLOGIC Corp (QUIK)·Q4 2019 Earnings Summary

Executive Summary

  • Revenue of $2.87M declined year-over-year (vs. $3.23M in Q4 2018) but rose sequentially from $2.16M in Q3; non-GAAP gross margin expanded to 65.6% (GAAP 64.9%), aided by mix shift and SaaS/IP contributions .
  • Non-GAAP net loss improved to $2.41M ($0.29/share) vs. $2.59M ($0.38/share) in Q4 2018; GAAP net loss was $3.06M ($0.37/share) .
  • Announced ~30% headcount reduction and annualized OpEx savings of ~$4.0M, targeting non-GAAP breakeven/ profitability in 2020; Q1 2020 revenue guided to $2.3M ±10% and non-GAAP GM ~64% ±3% .
  • Catalysts: Kyocera EOS S3 design win (Torque G04 smartphone), streaming/SmartTV voice remote ramp (Q2 start), SensiML customer base up to 44, and open-source tooling initiative with a mega-cap partner driving broader EOS S3/eFPGA adoption .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded sharply: non-GAAP GM 65.6% in Q4 vs. 52.6% in Q4 2018, driven by mature product mix and SaaS/IP; management highlighted “higher mix of mature product revenue and additional SaaS business” .
  • Strategic wins: EOS S3 selected by Kyocera for Torque G04; expanded partner ecosystem (STMicro partner program, Flex/Infineon FLEXino kit, Antmicro/Renode support) to scale AI/edge deployments .
  • Restructuring accelerates path to profitability: ~$4M annualized savings by Q2 run-rate with Q1 restructuring expense ~$600k; CEO: “leaner organization puts us on a trajectory to achieve our profitability goals” .

What Went Wrong

  • New product revenue fell to $0.7M (vs. $1.3M YoY), reflecting display bridge declines and eFPGA license pushouts; hearables/China headwinds and AVS software shifts delayed ramps .
  • Revenue YoY decline and ongoing losses: Q4 revenue $2.87M vs. $3.23M LY; GAAP net loss $3.06M; non-GAAP net loss $2.41M despite sequential improvement .
  • Coronavirus impacts: management adopted a conservative 2020 stance, citing slower schedules in China and limited face-to-face engagement, tempering near-term hearables contribution .

Financial Results

Summary Financials (Trailing 3 Quarters)

MetricQ2 2019Q3 2019Q4 2019
Revenue ($USD Millions)$2.087 $2.158 $2.871
GAAP Gross Margin (%)49.0% 48.2% 64.9%
Non-GAAP Gross Margin (%)49.8% 48.9% 65.6%
GAAP Operating Expenses ($USD Millions)$5.555 $5.234 $4.791
Non-GAAP Operating Expenses ($USD Millions)$4.800 $4.500 $4.200
GAAP Net Loss ($USD Millions)$4.634 $4.271 $3.063
Non-GAAP Net Loss ($USD Millions)$3.841 $3.523 $2.407
GAAP Diluted EPS ($USD)$(0.05) $(0.04) $(0.37)
Non-GAAP Diluted EPS ($USD)$(0.04) $(0.03) $(0.29)

Q4 Sequential and YoY Comps

MetricQ4 2018Q3 2019Q4 2019
Revenue ($USD Millions)$3.233 $2.158 $2.871
GAAP Gross Margin (%)51.7% 48.2% 64.9%
Non-GAAP Gross Margin (%)52.6% 48.9% 65.6%
GAAP Net Loss ($USD Millions)$3.065 $4.271 $3.063
Non-GAAP Net Loss ($USD Millions)$2.591 $3.523 $2.407
GAAP Diluted EPS ($USD)$(0.45) $(0.04) $(0.37)
Non-GAAP Diluted EPS ($USD)$(0.38) $(0.03) $(0.29)

Segment Breakdown

Segment Revenue ($USD Millions)Q2 2019Q3 2019Q4 2019
New Products$0.7 $1.0 $0.7
Mature Products$1.4 $1.1 $2.2

KPIs and Operational Metrics

KPIQ2 2019Q3 2019Q4 2019
Non-GAAP R&D ($USD Millions)$2.7 $2.6 $2.2
Non-GAAP SG&A ($USD Millions)$2.1 $1.9 $1.9
Cash & Cash Equivalents ($USD Millions)$28.2 $24.8 $21.5
Revenue by Geography (% of Total)APAC 26%, NA 51%, EU 23% APAC 25%, NA 70%, EU 5% APAC 19%, NA 37%, EU 44%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q4 2019$3.0 ±10% Reaffirmed $3.0 ±10% Maintained
Non-GAAP Gross Margin (%)Q4 2019~60 ±3% Reaffirmed (implicit) Maintained
Non-GAAP OpEx ($USD Millions)Q4 2019~$4.2 ±$0.3 Reaffirmed (implicit) Maintained
Revenue ($USD Millions)Q1 2020N/A$2.3 ±10% New
New Product Revenue ($USD Millions)Q1 2020N/A~$0.6 New
Mature Product Revenue ($USD Millions)Q1 2020N/A~$1.7 New
Non-GAAP Gross Margin (%)Q1 2020N/A~64 ±3% New
Non-GAAP OpEx ($USD Millions)Q1 2020N/A~$3.9 ±$0.3; Q2 run-rate ~$3.5 New
Stock-based Comp ($USD)Q1 2020N/A~$850k New
Cash Usage ($USD Millions)Q1 2020N/A$2.3–$2.7 New
FY Revenue (directional)FY 2020N/AMid-to-high teens New
FY Gross Margin (directional)FY 2020N/AMid-60s New
Profitability TargetFY 2020N/ANon-GAAP breakeven/profitability near year-end New
Restructuring SavingsFY 2020 (Q2 run-rate)N/A~$4.0M annualized New

Earnings Call Themes & Trends

TopicQ2 2019 (Prev)Q3 2019 (Prev)Q4 2019 (Current)Trend
AI/SensiML traction12 customers; targeting 50–100 by YE19 26 customers; most on eval; STMicro partner program 44 customers; 4 Fortune 500; Nordic and ST partnerships broaden reach Up, expanding ecosystem
EOS S3 product momentumJapanese smartphones ramp late Q4; feature phone Q2’20 4 smartphones by YE; remote control design; Infineon IAS module Kyocera Torque G04 design win; remote shipments targeted Q2’20 Up, visible OEM ramps
eFPGA strategyMTLA with prime contractor; scalable GTM under development Nations Technologies win; Alibaba/Pingtogue Swordless template Mega-cap open-source tooling and broader exposure; licenses pushed but expected Building, larger platform reach
Supply chain/tariffsChina tariffs delay CE launches; manufacturing moving to Vietnam Trade conflict delays hearables/CE ramps Coronavirus conservatism; limited China presence but lingering schedule impacts Headwinds moderating; cautious near term
Regional mixAPAC 26%, NA 51%, EU 23% APAC 25%, NA 70%, EU 5% APAC 19%, NA 37%, EU 44% Europe surged; NA down
Gross margin trajectory~50% non-GAAP ~49% non-GAAP ~66% non-GAAP on mix/SaaS Up meaningfully

Management Commentary

  • “The bottom line result of these actions is that our leaner organization puts us on a trajectory to achieve our profitability goals, which is by far our highest priority this year.”
  • “We expect revenue growth this year will be in stair-step increases starting in Q2… revenue for fiscal 2020 could end in the mid-to-high teens… gross profit margin for the year in the mid-60s… we should be close to non-GAAP operating income breaking even or becoming profitable towards the end of the year… I am very confident we will not need to raise capital to achieve profitability.”
  • “SensiML closed Q4 with a total of 44 customers, 4 of which are Global Fortune 500… most are still using the evaluation version… planning on this contributing to a significant percentage of our expected revenue growth in 2020.”
  • “Kyocera has chosen our EOS S3 platform for its Torque G04 smartphone… we are now designed into three released phones, up from zero just two quarters ago.”
  • “We announced a significant restructuring… about $4 million in annualized savings once fully implemented in the middle of our second quarter… positive impact to our COGS.”

Q&A Highlights

  • Mature product run-rate modeled at ~$1.7M per quarter; supports steady baseline while new products ramp .
  • New product growth drivers prioritized: EOS S3 (Kyocera, streaming TV remote via Flex/Infineon channel), then SensiML SaaS, then eFPGA licensing; Kyocera opportunity modeled around ~$2M in 2020 depending on launch timing .
  • Gross margin sustainability: management modeling mid-60% GM for 2020; Q1 guide ~64% ±3% .
  • Breakeven math: revenue ~$6M per quarter at mid-60% GM and ~$3.5M OpEx run-rate to reach non-GAAP breakeven .
  • eFPGA revenue framing: licensing could be “couple of million” in 2020; royalties more likely in 2021 .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2019 EPS and revenue was unavailable due to data access limits; therefore, beats/misses vs. consensus cannot be determined at this time. Values retrieved from S&P Global were unavailable.*

Key Takeaways for Investors

  • Margin story improving: mix shift toward mature products and SaaS/IP lifted non-GAAP GM to ~66%; management guides mid-60% GM for 2020—supportive for leverage upon revenue ramps .
  • Restructuring is a near-term catalyst: ~$4M annualized savings and Q2 OpEx run-rate ~$3.5M raise confidence in reaching non-GAAP breakeven without capital raises .
  • Product ramps visible: Kyocera Torque G04 and voice-enabled remotes (Q2 timing) provide tangible EOS S3 revenue drivers; European region exposure surged in Q4 .
  • SensiML momentum and ecosystem partnerships (STMicro, Nordic, Flex/Infineon, mega-cap open-source) broaden funnel; conversion pace remains the focus for SaaS revenue scaling .
  • eFPGA positioned for platform-scale adoption via Alibaba/Pingtogue and mega-cap partner; licensing timing remains variable but could contribute meaningfully in 2020 .
  • Near-term caution: Coronavirus-related delays and China uncertainties temper Q1 outlook; expect “stair-step” increases starting Q2—trade accordingly around execution milestones (remote launch, Kyocera model additions) .
  • Cash runway adequate: $21.5M cash at Q4 end (incl. line of credit), declining cash usage guided for Q1; management does not expect equity raise to achieve profitability .

Please note: Share and per-share data reflect the 1-for-14 reverse split effective December 24, 2019 .