Everspin’s MRAM revenues spin down a tad

MRAM supplier Everspin saw its first FY2024 quarter make a loss after 11 consecutive profitable quarters.

Everspin’s Magneto-resistive RAM (STT-MRAM) is non-volatile memory with DRAM-level speed, and comes in two formats: Toggle MRAM combining the non-volatility of flash with the speed and endurance of SRAM, and STT-MRAM (spin-transfer torque MRAM) which needs less switching energy than Toggle MRAM and enables higher densities and lower costs. Like Optane, MRAM has not been able to make much progress outside specialist low volume markets.

Revenues of $14.4 million in the quarter ended March 31 were 3 percent down on a year ago but towards the high end of Everspin’s forecast. However a loss of $200,000 was not forecast. 

The first quarter-on-quarter revenue decline since FY2022.

President and CEO Sanjeev Aggarwal said: “Our first quarter revenue came in near the high end of our expectations while our GAAP net income came in below our expectations.”

On the bright side: “We are very pleased with some of our recent wins, most notably with IBM for our PERSYST STT-MRAM solution, which will be used in their FCM4 FlashCore Module, and we are entering into an agreement with a commercial customer to provide foundry services. Looking ahead, we expect our Toggle and STT-MRAM design wins to ramp in the second half of 2024.”

CFO Anuj Aggarwal had said at the previous quarter close that “Profitability [was] a key focus for the company.”  This time he said: “We are pleased to end the quarter with a strong balance sheet and solid gross margin. We are encouraged by the traction our products have had, as evidenced by our recent design wins, and we remain confident in our ability to scale the business and convert those design wins to revenue.”

Next quarter’s outlook is for revenues between $10 and $11 million, which would represent a 33.333 percent drop on the year-ago Q2, and another loss. CEO Aggarwal said in the earnings call: “Looking ahead, we expect to see flattish product revenue in the second quarter compared to Q1 due to continued weakness in Asia Pacific and in industrial, consumer and auto end markets.” 

With FY2024 revenues weighted to the second half there is doubt of FY2024 being a growth year.

CFO Aggarwal said: “We anticipate revenue for the first half of 2024 to be lower than our typical seasonality. This has proven true for our first quarter and we expect our second quarter to be down from the first quarter, reflecting flattish Toggle revenue and lower RAD-Hard revenue.”

RAD-Hard refers to a strategic radiation-hardened FPGA and a project renewal has been delayed because of changes in a US government agency’s funding schedule. CEO Aggarwal said: “We met all our deliverables in Q1, so we fully expect to get that project going sometime in Q2 or as soon as the funding comes through.”

As for the outlook for all of 2024, CEO Aggarewal said: “We expect the year to be weighted more heavily towards the second half as we continue to experience a slower start to the year. This slower start can be attributed to continued economic weakness in Asia Pacific, as well as higher interest rates which have driven customers to focus on lean inventory practices along with shifting project schedules for some government contracts.”

The IBM FlashCore Module win is excellent for Everspin but it could really do with more sales in this area.