Q4 2024 Earnings Summary
- Significant anticipated revenue growth in Q2 2025, driven by new eFPGA IP contracts, including a $1.1 million contract and a mid-7-figure deal related to Intel 18A, leading to expected Q2 revenue north of $6 million, resulting in non-GAAP profitability and positive cash flow.
- The acquisition of Flex Logix by Analog Devices removes a major competitor, and with the hiring of their former VP of IP Sales, Andy Jaros, QuickLogic is poised to capture new eFPGA customers, accelerating sales and expanding into industrial, communications, and consumer markets beyond its traditional aerospace and defense sector.
- QuickLogic is uniquely positioned as the only provider of eFPGA hard IP optimized for Intel's 18A process node, with significant interest from the U.S. government and defense sectors for onshore advanced process capabilities, expecting to win more than one customer this year, enhancing growth prospects.
- Revenue guidance for Q1 2025 is lower than anticipated due to delays in contract awards, highlighting potential volatility and dependence on government contracts.
- Revenue from the strategic rad-hard FPGA government contract is expected to be flat or slightly less than last year, indicating limited growth in this key area.
- Management is moving away from providing quantitative metrics on its sales funnel, which may reduce transparency for investors.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | 24% decline (from $7.48M in Q4 2023 to $5.69–5.70M in Q4 2024) | The overall revenue fall is driven primarily by a 32% drop in New Products revenue and a 65% decline in eFPGA IP revenue, which more than offset gains from other segments; previous period strong new product performance contributed to higher revenue that did not carry forward. |
New Products | 32% decline (from $6.83M in Q4 2023 to $4.63M in Q4 2024) | The steep drop in New Products revenue is mainly due to the timing of deliverables for large eFPGA IP contracts, a sharp contrast to Q4 2023 when contract deliverables were recognized, resulting in significantly lower revenue this period. |
Hardware Products |
| A dramatic surge in Hardware Products revenue suggests a shift in the revenue mix, as customers may have redirected orders from the delayed new product segment; this reallocation contrasts the previous period's modest hardware contribution. |
eFPGA IP Revenue | 65% decline (from $8.94M to $3.09M) | The eFPGA IP segment suffered a pronounced revenue drop largely due to the postponement of deliverables on key large contracts, which had contributed robustly in Q4 2023 and now have shifted timing. |
Mature Products | 63% increase (from $0.65M to $1.06M) | Mature Products revenue improved significantly, indicating stronger-than-expected performance in legacy product sales and royalties, a positive offset amid declines in new product segments compared to the previous period. |
North America Revenue | 29% decline (from $6.90M to $4.88M) | North America, the key market, saw revenue fall due to reduced new product sales and delayed contract deliverables, a reversal from Q4 2023 where timely new product revenue boosted North America’s share. |
Europe Revenue | 87% increase (from $0.15M to $0.28M) | Although Europe remains a small segment, its revenue nearly doubled, likely reflecting incremental gains in mature and hardware product sales that contrasted with broader declines; however, its overall contribution is still modest compared to North America. |
Asia Pacific Revenue | 26% increase (from $0.43M to $0.54M) | Asia Pacific experienced a moderate boost in revenue, driven by improved regional performance and an evolving customer base, marking a positive change from the previous period. |
Net Income | Shift from profit of $2,042K to a loss of $(1,747)K | The reversal in net income is attributed to the overall revenue decline—especially the severe drop in eFPGA IP and new product revenues—and the resulting margin compression, which turned prior profitability into a loss. |
Operating Income | Shift from profit of $2,116K to a loss of $(1,570)K | Operating income turned negative as the 36% decline in total revenue due to delayed deliverables and increased costs (notably higher operating expenses) eroded the operating profits enjoyed in Q4 2023. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue Guidance | Q1 2025 | no prior guidance | Approximately $4 million (New Products: $3.4 million; Mature Products: $0.6 million) | no prior guidance |
Non‐GAAP Gross Margin | Q1 2025 | no prior guidance | Approximately 50% (±5 percentage points) | no prior guidance |
Non‐GAAP Operating Expenses | Q1 2025 | no prior guidance | Approximately $3.2 million (±5%) | no prior guidance |
Non‐GAAP Net Loss | Q1 2025 | no prior guidance | Approximately $1.2M–$1.4M or $0.07–$0.09 per share | no prior guidance |
Stock‐Based Compensation | Q1 2025 | no prior guidance | Approximately $0.9 million | no prior guidance |
Cash Flow | Q1 2025 | no prior guidance | “Highly dependent on timing of large contracts; confident of being cash flow positive in Q2 and for full-year 2025” | no prior guidance |
Revenue Guidance | Q4 2024 | Approximately $6 million (±10%; New Products: $5 million; Mature Products: $1 million) | no current guidance | no current guidance |
Non‐GAAP Gross Margin | Q4 2024 | Approximately 60% (±5 percentage points) | no current guidance | no current guidance |
Non‐GAAP Operating Expenses | Q4 2024 | Approximately $3.3 million (±10%) | no current guidance | no current guidance |
Non‐GAAP Net Income | Q4 2024 | Approximately $0.35M–$0.48M or $0.02–$0.03 per share | no current guidance | no current guidance |
Cash Usage Guidance | Q4 2024 | Expected to be under $500,000 | no current guidance | no current guidance |
Non‐GAAP Gross Profit Margin | FY 2024 | Approximately 60% | no current guidance | no current guidance |
Non‐GAAP Net Income | FY 2024 | Approximately $0.33M–$0.45M or $0.02–$0.03 per share (based on 14.5M diluted shares) | no current guidance | no current guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
eFPGA Technology and Intel 18A Leadership | Q1–Q3 consistently emphasized early investments, exclusive eFPGA hard IP development, and the promise to be the sole supplier for Intel 18A. | Q4 confirmed their strategic positioning as the only company offering eFPGA hard IP optimized for Intel 18A with expectations of early contract awards and future revenue. | Consistent emphasis with a strengthened strategic positioning and continued leadership commitment. |
Revenue Growth Projections vs Contract Award Delays | Across Q1–Q3, the company set high revenue growth expectations (30% in Q1) but noted delays in contract awards that pushed revenue recognition into later periods. | Q4 acknowledged that contract delays pushed Q1 2025 revenue below expectations while forecasting a significant rebound in Q2 2025; guidance remains volatile yet optimistic on long‐term growth. | Short‑term volatility persists amid delays, but long‑term revenue growth remains optimistic. |
Competitive Landscape Shifts | Q1 did not mention acquisitions and Q2 provided no details on competitive shifts; Q3 detailed the impact of Analog Devices’ Flex Logix acquisition on market dynamics. | Q4 expanded on this with a clear reference to the Flex Logix acquisition by Analog Devices and highlighted a key executive hire (Andy Jaros) to capture new market opportunities. | Emerging as a prominent focus from Q3 onward, reinforcing competitive advantage with strategic hires and market realignment. |
Dependence on Government and Defense Contracts | Q1 stressed that while government contracts were important, budget uncertainties were minimal due to non-multi-year awards; Q2 and Q3 noted reliance on defense contracts with some timing challenges. | Q4 continued to emphasize significant government and defense contracts (including a Strategic Radiation Hardened FPGA contract) but also noted ongoing efforts to diversify; little explicit focus on budget risk was added. | Stable reliance is observed with incremental acknowledgment of timing challenges, yet diversification efforts are also emerging. |
Pipeline Transparency and Sales Funnel Management | Q1 reported a $179 million funnel with a focus on near-term opportunities; Q2 and Q3 provided more granular details (growing to $189 million, diversification of prospects, and adjustments in pipeline transparency). | Q4 shifted to a qualitative disclosure—no specific numbers but noted growth due to new eFPGA opportunities, driven by investor feedback and market evolution. | A progression from quantitative reporting to a more qualitative, transparency-focused approach, reflecting maturation of sales funnel management. |
Market Diversification | Q1 briefly mentioned opportunities beyond core sectors and Q2 did not cover this explicitly; Q3 began detailing active contracts in industrial, communications, and consumer-adjacent sectors. | Q4 emphasized accelerated expansion beyond aerospace and defense, citing new industrial, communications, and consumer opportunities alongside diversification enabled by new market engagements. | Increased focus on expanding beyond traditional markets, reflecting a strategic shift toward broader diversification. |
Chiplet and Storefront Revenue Opportunities | Q1 referenced proposals exceeding $40 million and potential for storefront models; Q2 provided detail on chiplet proposals, partnerships (e.g. with YorChip), and long-term revenue potential; Q3 reinforced merchant chiplet design advancements. | Q4 reiterated significant long-term revenue potential from chiplet solutions and storefront models, while acknowledging risks from delayed large IP contracts and revenue push‐outs into 2025. | Consistent commitment to these opportunities with an increased focus on managing long‑term pipeline risks and capturing extended revenue streams. |
Profitability and Cash Flow | Q1 reported strong non‑GAAP profitability, robust gross margins, and positive cash flow expectations; Q2 noted a dip in margins and some short‑term cash challenges; Q3 maintained optimism with short‑term negative cash flows offset by future runway. | Q4 forecast a near‑term non‑GAAP net loss in Q1 2025 but projected a rebound starting in Q2 2025 driven by new contracts, improved margins, and disciplined expense management. | Short‑term fluctuations continue, but overall sentiment remains optimistic for a rebound in profitability and cash flow in the near future. |
SensiML and AI Acceleration Initiatives | Q1 and Q2 highlighted active product development, significant contracts, and innovative AI acceleration features via SensiML; Q3 further emphasized product launches and collaborations supporting AI acceleration. | Q4 signaled a declining focus on SensiML by noting that the Board is exploring strategic options, including a potential sale, while AI acceleration continues via eFPGA applications. | A notable shift in emphasis: while earlier periods stressed active growth in SensiML and AI acceleration, Q4 represents a strategic de-emphasis on SensiML assets. |
-
Revenue Rebound and Profitability
Q: When will revenue rebound and how will profitability look in 2025?
A: Management anticipates a significant rebound in revenue and profitability beginning in Q2 2025, expecting revenue to be north of $6 million in that quarter. They forecast solid revenue growth, non-GAAP profitability, and positive cash flow for the full year 2025. -
Delayed Contracts Impact on Q1
Q: Why is Q1 revenue guidance lower than anticipated?
A: The lower Q1 revenue guidance of approximately $4 million, plus or minus 10%, is due to delays in certain large IP contracts that were expected to be awarded late in Q4 2024. These delays have pushed revenue recognition into future quarters, but the company expects significant rebound starting in Q2 as these contracts are finalized. -
Intel 18A Opportunities
Q: What are the opportunities with Intel 18A and related concerns?
A: QuickLogic is uniquely positioned as the only company currently offering eFPGA hard IP optimized for Intel 18A. They expect to be awarded two eFPGA hard IP contracts with a combined value in the mid-7 figures, anticipating revenue recognition in Q2 2025. Management is confident in the demand for 18A, especially from defense and government sectors, and believes in their success regardless of any potential changes at Intel. -
Competition and Flex Logix Acquisition
Q: How does Flex Logix's acquisition affect QuickLogic?
A: The acquisition of Flex Logix by Analog Devices creates a market void that QuickLogic can fill. They have hired Flex Logix's former VP of Sales, Andy Jaros, as their new VP of IP Sales. Andy is leveraging his relationships to convert former Flex Logix customers to QuickLogic, already contributing to a $1.1 million eFPGA hard IP contract win. -
Strategic Rad-Hard Revenue
Q: How will strategic rad-hard revenue compare to past years?
A: Management expects revenue contribution from the strategic radiation-hardened FPGA government contract to be about the same as last year, plus or minus a little bit. They are excited about the developments but are awaiting permission to share more details. -
Diversification and End Markets
Q: How is QuickLogic diversifying its end markets?
A: QuickLogic is expanding into markets beyond aerospace and defense, including industrial, communications, and consumer sectors. They plan to extend their fabrication process coverage, targeting nodes like TSMC, and anticipate winning new contracts that will further diversify their end markets during 2025. -
Edge AI Inferencing with eFPGA
Q: What's the potential of eFPGA in Edge AI inferencing?
A: Collaborating with ETH Zurich, QuickLogic demonstrated that using eFPGA can reduce energy consumption for AI inferencing by 20x, which is significant for battery-powered systems. This has drawn interest from customers, including a large international company evaluating eFPGA for designs targeting commercial and industrial IoT AI applications on TSMC's 12nm process. -
Use of Funnel Metric
Q: Will you continue using the funnel metric to track progress?
A: Management has decided to move away from disclosing quantitative numbers for the funnel and will focus more on discussing hard IP contracts as a measure of progress. Qualitatively, the funnel has grown, particularly in the eFPGA segment of the business. -
Cash Flow and Capital Plans
Q: What's the outlook on cash flow and capital needs?
A: Cash flow for Q1 2025 is highly dependent on the timing of certain large contracts. They are confident about being cash flow positive in Q2 and for the full year 2025. To manage potential variability, they plan to put an ATM (At-The-Market offering) in place for improved flexibility.
Research analysts covering QUICKLOGIC.