Everspin Reports Unaudited Second Quarter 2022 Financial Results

Rhea-AI Summary

Everspin Technologies, Inc. (NASDAQ: MRAM) announced its preliminary financial results for Q2 2022, reporting a revenue increase of 24% year-on-year to $14.7 million. This marks a 3% rise from Q1 2022. Net income stood at $1.7 million, slightly down from $1.9 million in Q1 2022 but up from $0.3 million in Q2 2021. Adjusted EBITDA improved to $3.3 million. The gross margin was 58.4%, down from 60.7% in Q2 2021 due to supplier price increases. Everspin projects Q3 2022 revenue between $14.4 million and $15.4 million, acknowledging potential supply constraints.

Positive

• Revenue increased 24% year-on-year to $14.7 million.
• Adjusted EBITDA improved to $3.3 million.
• Net income increased from $0.3 million in Q2 2021 to $1.7 million in Q2 2022.

Negative

• Net income decreased from $1.9 million in Q1 2022 to $1.7 million in Q2 2022.
• Gross margin decreased to 58.4% from 60.7% in Q2 2021.
• Expected industry supply constraints may impact future revenue.

The Company continues growth and profitability in the first half of 2022 with strong second quarter results

CHANDLER, Ariz.--(BUSINESS WIRE)-- Everspin Technologies, Inc. (NASDAQ: MRAM), the market leader in MRAM, today announced preliminary unaudited financial results for the second quarter of 2022.

Second Quarter 2022 Highlights

• Q2’22 revenue increased $0.4 million, or 3%, to $14.7 million from $14.3 million for Q1’22. Q2’22 revenue increased $2.9 million, or 24% from $11.8 million in Q2’21.
• The Company reported net income of $1.7 million for Q2’22, compared to $1.9 million for Q1’22, and $0.3 million in Q2’21.
• Adjusted EBITDA for Q2’22 improved to $3.3 million, compared to $3.1 million for Q1’22, and $1.5 million in Q2’21.
• Basic EPS for Q2’22 was $0.08 compared to $0.10 for Q1’22, and $0.01 for Q2’21.
• Ended Q2’22 with cash and cash equivalents of $23.1 million, an increase from $19.9 million at the end of Q1’22.

“Everspin delivered quarterly revenue of $14.7 million, an increase of 24% year-on-year and above the high end of guidance. Our team continues to successfully navigate changing supply to meet customer demand, which continues to be strong with existing and new design wins on our Toggle products,” said Sanjeev Aggarwal, President & CEO. “We have started sampling our new xSPI family of Low Density STT-MRAM products (8Mb to 128Mb) to drive growth across industrial, IoT and FPGA markets.”

Second Quarter 2022 Results

Total revenue for the second quarter of 2022 was $14.7 million, an increase of 3% from the $14.3 million reported in the first quarter of 2022. This is an increase of 24% compared to $11.8 million of revenue in the second quarter of 2021.

MRAM product sales in the second quarter of 2022, which includes both Toggle and STT-MRAM revenue, was $13.2 million compared to $12.7 million in the first quarter of 2022 and $10.2 million in the second quarter of 2021.

Licensing, Royalties, Patents and Other revenue in the second quarter of 2022 was $1.5 million compared to $1.7 million in the first quarter of 2022 and $1.7 million in the second quarter of 2021.

The increase in total revenue for the second quarter of 2022 compared to the second quarter of 2021 was due to strong toggle demand and sales.

Gross margin for the second quarter of 2022 was 58.4%, compared to 58.0% in the first quarter of 2022, and 60.7% in the second quarter of 2021. The decrease in gross margin compared to the second quarter of 2021 was attributable to price increases from suppliers.

GAAP operating expenses was $6.9 million in the second quarter of 2022, compared to $6.3 million in the first quarter of 2022 and $6.7 million in the second quarter of 2021. GAAP operating expenses increased in the second quarter of 2022 compared to the first quarter of 2022 as a result of increased costs to support the new STT industrial product.

GAAP net income for the second quarter of 2022 was $1.7 million, or $0.08 per basic share, based on 20.1 million weighted-average basic common shares outstanding. This compares to a net income of $1.9 million, or $0.10 per basic share, in the first quarter of 2022 and a net income of $0.3 million, or $0.01 per basic share, in the second quarter of 2021.

Business Outlook

For the third quarter 2022, Everspin expects total revenue in a range of $14.4 million to $15.4 million. Everspin expects industry supply constraints to limit supply and push some unfulfilled customer demand to future quarters. Everspin expects GAAP net income per basic share to be between breakeven and $0.05, primarily influenced by expenses related to next generation 28nm STT MRAM product development and price increases from our suppliers.

This outlook is dependent on Everspin's current expectations, which may be impacted by, among other things, evolving external conditions, such as the resurgence of COVID-19 and its variants, local safety guidelines, worsening impacts due to supply chain constraints or interruptions, including due to the recent military conflict in Ukraine and recent market volatility, and the other risk factors described in Everspin's filings with the Securities and Exchange Commission (the "SEC"), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its Quarterly Reports on Form 10-Q filed with the SEC during 2022, as well as in its subsequent filings with the SEC.

Use of Non-GAAP Financial Measures

Everspin supplements the reporting of its financial information determined under generally accepted accounting principles in the United States of America (GAAP) with Adjusted EBITDA, which is a non-GAAP financial measure. Everspin defines Adjusted EBITDA as net income adjusted for interest expense, taxes, depreciation and amortization, stock- based compensation expense, and restructuring costs if any.

Everspin’s management and board of directors use Adjusted EBITDA to understand and evaluate its operating performance and trends, to prepare and approve its annual budget and to develop short-term and long-term operating and financing plans. Accordingly, Everspin believes that Adjusted EBITDA provides useful information for investors in understanding and evaluating its operating results in the same manner as its management and board of directors. Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, net income reported in accordance with GAAP. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. Everspin encourages investors to review its financial statements and publicly- filed reports in their entirety and not to rely on any single financial measure.

Conference Call

Everspin will host a conference call for analysts and investors on Thursday, August 11, 2022, at 5:00 p.m. Eastern Time. Interested participants can pre-register online to receive a telephone number and a unique passcode at:

https://register.vevent.com/register/BIfe7f479f52fa42c082550ca25061f4e1.

The conference call will be broadcast live in listen-only mode at:

https://edge.media-server.com/mmc/p/7befjdfe.

The registration link and archived webcast will be available in the Investor Relations section of the company’s website at investor.everspin.com.

About Everspin Technologies

Everspin Technologies, Inc. is the world’s leading provider of Magnetoresistive RAM (MRAM). Everspin MRAM delivers the industry’s most robust, highest performance non-volatile memory for Industrial IoT, Data Center, and other mission-critical applications where data persistence is paramount. Headquartered in Chandler, Arizona, Everspin provides commercially available MRAM solutions to a large and diverse customer base. For more information, visit www.everspin.com. NASDAQ: MRAM.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding future results that involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to the statements made under the caption “Business Outlook.” Forward-looking statements are identified by words such as “expects”, or similar expressions. These include, but are not limited to, Everspin’s future financial performance, including the outlook for third quarter 2022 results. Actual results could differ materially from these forward-looking statements as a result of certain risks and uncertainties, including, without limitation, the risks set forth under the caption “Risk Factors” in Everspin’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 9, 2022, and its Quarterly Reports on Form 10-Q filed with the SEC during 2022, as well as in its subsequent filings with the SEC. Any forward-looking statements made by Everspin in this press release speak only as of the date on which they are made and subsequent events may cause these expectations to change. Everspin disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

EVERSPIN TECHNOLOGIES, INC.
Condensed Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
		June 30,				December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents		$	23,051			$	21,409
Accounts receivable, net			9,283				8,193
Inventory			6,376				6,396
Prepaid expenses and other current assets			800				762
Total current assets			39,510				36,760
Property and equipment, net			2,594				973
Right-of-use assets			3,649				913
Other assets			62				734
Total assets		$	45,815			$	39,380
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	2,689			$	1,776
Accrued liabilities			2,165				3,579
Deferred revenue			—				832
Current portion of long-term debt			3,761				3,370
Lease liabilities			910				724
Other liabilities			29				50
Total current liabilities			9,554				10,331
Long-term debt, net of current portion			—				1,529
Lease liabilities, net of current portion			2,782				68
Long-term income tax liability			214				214
Total liabilities		$	12,550			$	12,142
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021			—				—
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 20,137,520 and 19,858,460 shares issued and outstanding as of June 30, 2022, and December 31, 2021			2				2
Additional paid-in capital			182,488				180,067
Accumulated deficit			(149,225	)			(152,831	)
Total stockholders’ equity			33,265				27,238
Total liabilities and stockholders’ equity		$	45,815			$	39,380

EVERSPIN TECHNOLOGIES, INC.
Condensed Statements of Operations and Comprehensive Income (Loss)
(In thousands, except share and per share amounts)
(Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
Product sales		$	13,223			$	10,187			$	25,894			$	19,255
Licensing, royalty, patent, and other revenue			1,484				1,661				3,160				2,873
Total revenue			14,707				11,848				29,054				22,128
Cost of product sales			5,793				4,329				11,545				8,586
Cost of licensing, royalty, patent, and other revenue			323				323				595				361
Total cost of sales			6,116				4,652				12,140				8,947
Gross profit			8,591				7,196				16,914				13,181
Operating expenses:1
Research and development			2,699				3,357				5,135				5,796
General and administrative			2,860				2,338				5,589				5,181
Sales and marketing			1,292				1,045				2,426				2,032
Total operating expenses			6,851				6,740				13,150				13,009
Income from operations			1,740				456				3,764				172
Interest expense			(70	)			(144	)			(145	)			(296	)
Other income (expense), net			1				(12	)			(13	)			(27	)
Net income (loss) before income taxes			1,671				300				3,606				(151	)
Income tax expense			—				(44	)			—				(53	)
Net income (loss) and comprehensive income (loss)		$	1,671			$	256			$	3,606			$	(204	)
Net income (loss) per common share:
Basic		$	0.08			$	0.01			$	0.18			$	(0.01	)
Diluted		$	0.08			$	0.01			$	0.17			$	(0.01	)
Weighted average shares of common stock outstanding:
Basic			20,069,444				19,313,162				19,983,526				19,203,374
Diluted			20,424,283				19,726,064				20,626,547				19,203,374
1Operating expenses include stock-based compensation as follows:
Research and development		$	462			$	265			$	795			$	446
General and administrative			647				305				1,018				790
Sales and marketing			202				134				322				211
Total stock-based compensation		$	1,311			$	704			$	2,135			$	1,447

EVERSPIN TECHNOLOGIES, INC.
Condensed Statement of Cash Flows
(In thousands)
(Unaudited)
		Six Months Ended June 30,
		2022				2021
Cash flows from operating activities
Net income (loss)		$	3,606			$	(204	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			462				756
Gain on sale of property and equipment			(167	)			—
Stock-based compensation			2,135				1,447
Non-cash warrant revaluation			(21	)			5
Non-cash interest expense			62				168
Changes in operating assets and liabilities:
Accounts receivable			(1,090	)			(2,776	)
Inventory			20				(850	)
Prepaid expenses and other current assets			(38	)			49
Other assets			664				—
Accounts payable			(201	)			861
Accrued liabilities			(1,414	)			(126	)
Deferred revenue			(832	)			1,815
Lease liabilities			164				(64	)
Net cash provided by operating activities			3,350				1,081
Cash flows from investing activities
Purchases of property and equipment			(996	)			(554	)
Proceeds received from sale of property and equipment			202				—
Net cash used in investing activities			(794	)			(554	)
Cash flows from financing activities
Payments on long-term debt			(1,200	)			(1,200	)
Proceeds from exercise of stock options and purchase of shares in employee stock purchase plan			286				293
Net cash used in financing activities			(914	)			(907	)
Net increase (decrease) in cash and cash equivalents			1,642				(380	)
Cash and cash equivalents at beginning of period			21,409				14,599
Cash and cash equivalents at end of period		$	23,051			$	14,219
Supplementary cash flow information:
Interest paid		$	83			$	128
Operating cash flows paid for operating leases		$	635			$	814
Financing cash flows paid for finance leases		$	5			$	—
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities		$	3,350			$	—
Right-of-use assets obtained in exchange for finance lease liabilities		$	36			$	—
Purchases of property and equipment in accounts payable and accrued liabilities		$	783			$	—
Bonus settled in shares of common stock		$	—			$	364

EVERSPIN TECHNOLOGIES, INC.
Adjusted EBITDA Reconciliation
(In thousands)
(Unaudited)
		Three Months Ended
		June 30, 2022			March 31, 2022			June 30, 2021
Adjusted EBITDA reconciliation:
Net income		$	1,671		$	1,935		$	256
Depreciation and amortization			204			258			373
Stock-based compensation expense			1,311			824			704
Interest expense			70			75			144
Income tax expense			-			-			44
Adjusted EBITDA		$	3,256		$	3,092		$	1,521

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220811005270/en/

Company Contact:

Anuj Aggarwal, CFO

T: 480-347-1082

E: anuj.aggarwal@everspin.com

Source: Everspin Technologies, Inc.

FAQ

What were Everspin's Q2 2022 earnings results?

Everspin reported Q2 2022 revenue of $14.7 million, net income of $1.7 million, and Adjusted EBITDA of $3.3 million.

What is the revenue outlook for Everspin in Q3 2022?

Everspin expects total revenue in Q3 2022 to range from $14.4 million to $15.4 million.

What challenges is Everspin facing in the upcoming quarters?

Everspin anticipates industry supply constraints that may affect unfulfilled customer demand.

How did Everspin's gross margin change in Q2 2022?

The gross margin for Q2 2022 was 58.4%, down from 60.7% in Q2 2021.

What influenced Everspin's net income in Q2 2022?

Net income for Q2 2022 was influenced by increased operating expenses and pricing pressures from suppliers.