Hi, thanks to everybody for joining us. Our next speaker is Sanjeev Agarwal. He's the president and CEO of Everspin. Sanjeev's been with Everspin, I think, nearly 20 years in a number of leadership roles, but the last five as CEO. And then he's joined by Bill Cooper, Everspin CFO. He joined Everspin, I think, a couple of years ago. He's got a pretty long tech resume, most recently at AMD before he joined Everspend. So welcome, gentlemen. It's great to have you. Sanjeev, I'll turn the floor over to you and maybe we can save Q&A for after the presentation. So thanks and I'll turn it to you.

Thank you, Rick, for the introduction and thanks to Oppenheimer for this opportunity. So I have a few prepared slides that we can go through and then open it up for Q&A. So to begin with, I've just mentioned that, you know, any forward-looking statements that I make in this presentation, you know, you're not held liable for that. Anyway, after that, what is Everspin? Everspin is actually a semiconductor manufacturing company that makes memories using magnetic materials. And because of that, it is actually radiation hard. It's actually very fast access, and it's actually very reliable in extreme environments, whether it's radiation or extreme temperatures. So we've been in business since 2008. We actually spun out of Freescale in 2008, and we've been building these memories for mission-critical applications in data center, in industrial automation applications, in IoT, in automotive, and like I mentioned, in radiation-hardened applications as well. We have a fab over here, an 8-inch factory, that is housed in NXP, and then we recently made an announcement to increase our capacity, so we actually signed a Foundry Services Agreement with Microchip to duplicate our NXP fab that we have over here in Microchip, which is in Gresham, Oregon. We also have a joint development agreement with global foundries that was signed in 2014 timeframe. And we use them as a foundry for our spin transfer door for our second-generation MRAM technology. And at the end of this year, we're actually going to bring on DSMC as a foundry as well for spin transfer door camera. So we will have resiliency in our supply chain, both for toggle and 8-inch SDK MRAM, as well as 12-inch STDM RAM with these two foundries across the world. Like Rick mentioned, we have about 20-plus years in production. I've been with the company that long. We have shipped about 200 million-plus units since our inception. And the good news over there is that we are very, very quality conscious, so we can actually count any returns, you know, a handful of returns since being a very high-quality technology and product that we've been shipping since 2008 We have a diverse base of customers, 2000 plus, and then also we're very focused on our IP. So we have about 700 plus patterns and applications worldwide that we have licensed to various customers, including global families, to allow them to ship embedded MRAM while they build a standalone MRAM for us. And on this chart over here, it basically shows you the various locations that Everspin satellite offices. Our headquarters are actually over here in Chandler, Arizona. We do have a design center in Austin, Texas. And then we have worldwide sales and marketing people. And obviously we have some people here in Singapore, which is where we manufacture our SVT MRAM with global families. Very top-level highlights. One thing I would like to highlight is we are the singular domestic provider of MRAM for mission-critical applications. So there is no company in the U.S. other than us that can actually build toggle M-RAM or spin transfer dock M-RAM for the U.S. government for mission-critical applications. And like I mentioned in the previous slide, we have a diversified customer base. It goes all the way from IBM, Siemens, Schneider, you mentioned a few, Mitsubishi. So pretty diversified blue-chip customers across markets and applications. And we have a large market opportunity, about $4.3 billion by 2029. So it's a large dam that we can actually address, and we have the products and technology available to actually address that market, and we'll get into that in the next slide. We have a proven management team with extensive expertise from various segments of the industry. Bill Cooper, for example, comes to us from AMD. We have people that come to us from Samsung and LSI, like Kalbun Barakat. He's our VP of operations. and then also our sales and marketing team that comes to us with experience from Intel, Marvel, and such. We have a very strong financial position with zero debt. We have been cash flow positive from operations for the last few years, and we have about $43, $44 billion in the bank, and we'll get into that a little bit later in this presentation. So this is what we bring to the table. So what is the value proposition of EMRA? So for those of you that are technical, you know, it's basically a CPU-attached memory, like an SRAM or DRAM, that brings the non-volulability of flash. So it's a non-volulability memory, so it's persistent, so you don't need any batteries. So you can turn the power off, come back after 10 years, and the information is still there. You can read and write to it unlimited number of times, so it's basically very, very durable, strong endurance. Read-write cycles go all the way up to 1E12 to 1E16, so unlimited read-write cycles. In terms of performance, we are almost as fast as S-RAM and D-RAM. You know, some of the S-RAMs go down to 5 nanoseconds, but we are in the order of 25 to 30 nanoseconds, so pretty compatible, so pretty fast read-and-write memory. And in terms of reliability, we are best-in-class robustness in extreme temperatures, in extreme environments, and we don't have a single failure because of any reliability issues. It's the only technology that actually delivers all these attributes and therefore I say it comes pretty close to a universal memory. It's the only thing that does come close to that, although it is not a universal memory, but it's pretty close. With that, I'll hand it over to Bill to talk about our market opportunity.

Thank you, Sanjeev. So what this chart represents on the left, you can see the classic market that Everspint has played in with its Persist products. The Toggle product is the originating product. And then we moved into the SDT product as well. And you can see on the right, primarily those markets tend to be in industrial, enterprise, casino gaming, transportation, those types of verticals. We are actually coming out with a new product, a Unisys product. And that product will take out later this year. And that is really geared toward going after the Norflash market. And as you can see in the chart on the right, that Norflash market is significantly larger, on the order of, you know, $3 to $4 billion. And Everspin's product, the MRAM, is actually significantly faster. It's orders of magnitude faster than Norflash. it also is is being much faster but it also has better data retention properties as well so we will bring out that new product we expect to take that out later this year and we'll bring it out next year we'll start producing it in mid next year and we should start to see some revenues manifest themselves later in 2027 so pretty exciting for us in terms of bringing that product out to market and that product will actually be uh produced in conjunction with tsmc so very pleased to see that and then if we go to the next slide and so one of the things that we've also been very uh we've gone public about is uh everspin has has been in the 50 to 55 million dollar range of revenues for the last two years um but we expect to see that grow to 100 million or more by fiscal year 2029 and as you can see here you know the mainstay products the originating products the persist products toggle mrm sdt mrm and that persist family of products will form the base of that growth and we have seen very good growth we had the highest revenue quarter ever in q2 of 26 at 18.7 million and then we actually guided higher to 19 and a half to 20 and a half million Q3 of 26. But as we look forward, we'd say we're on track to meet that $100 million target in 2029. And again, what you see is the Persis product, the Unisys product that we're going to take out later this year and bring to market with production and revenue by later in 2027, that product will also contribute. And then one of the also very important areas is we do actually see licensing royalties as well as engineering service revenue that's under the NRE category and we just signed an agreement with a prime contractor to the U.S. government we did that earlier this year in April of 2026 that's a 40 million dollar agreement and we'll recognize that over the next couple of years but we expect that licensing and royalty and services revenue to be in the 10 to 15 percent category. So even as we grow over time, we expect that to also grow with us. But at the end of the day, Everspin is a product company and the Persist products as well as this Unisys products form a really strong foundation. And one thing that I just want to mention is the Unisys family, right, the actual application of that particular product is really geared toward the aerospace and the data center market. And we do have products in the Persist family that also plan in those spaces, but the Unis' part will open up new opportunities for us because it is going to be a higher density part, 256 megabit initially, and then we expect to scale that all out from one gigabit to two gigabit and even higher. So finally, we want to show you some of the financial information here. As you can see, fiscal year from fiscal year 21 to 23, we were in the pandemic area saw a little bit of a drop in fiscal year 24 on up to 25 we saw growth there the 55 million in revenue plus 4 million in other income under a dod contract so starting to see that that upturn obviously in 2026 we're on a path to do uh much better than that much further north than the 60 million dollars um and then as you look at gross margins again very strong you know selling everything we could during the pandemic period 21 to 23 what we see here in 24 or 25 and what the company is is we publicly committed to is we expect to see gross margins 50 percent or greater as we vote today and as we go forward and then on the right the company has been very strong and spending off cash flow and we've seen some reduction in that we've put in some additional capital into our channeler facility and then we have some capital requirements under the new deal that we signed the boundary service agreement with microchip but that capital we feel like we're very well capitalized for all of the commitments that we have with 43.9 million 44 million in the bank as of the end of q226 and no debt for the company so finally one of the questions we get quite a bit is, hey, you know, tell me a little bit about your, you know, the breakdown of your revenues. How does it split by market? And so on the left, we do see how it's primarily going to be, again, product revenues under the Persist family, both Toggle initially, but also the SPT and random products, and then some of the licensing, right? So again, kind of in that 10 to 15% for licensing but 80 to you know 85 to 90 percent for products which is again we even as we go forward we expect to see that so for 2025 uh what you see is the middle arrow uh low earth orbit satellites market at the 10 range uh enterprise in the 30 range i industrial automation and that's sort of a classic um arena for the company uh classic market and then casino games actually also a very strong market for us and again that has to do with the speed capability of the NRAAM as well as the persistence of NRAAM so you know really really strong performance in that segment as well but as we go forward we'd expect to see a bit more enterprise and a bit more on the middle arrow and aerospace as well as data center and enterprise So with that, I think we've covered all the slides, and Rick, I don't know if you want to jump into Q&A.

Yeah, Bill, that sounds great. So thanks for that, and those are some good slides. So it brought up a few questions for me anyway, and the first is, you know, you mentioned the $100 million revenue target by 29, and I think, Bill, you also mentioned you've kind of been range-bound the last few years, kind of between 50 and 60, but clearly breaking out of that, right? Clearly accelerating with your guide. I mean, you're right there. That's an $80 million run rate right there as we looked at, you know, Calendar 3Q. So I don't know if you could spend just a couple more minutes talking about, and you just mentioned some of those drivers. So I don't know if it's Mill Aero that stands out as a driver there or if it's the enterprise stuff or if you could just kind of walk us through what some of those drivers are. And then maybe the second part of that question And just kind of trying to think about sustainability of that ramp, sort of whether that's in terms of backlog, order patterns, revenue funnels, you know, like basically trying to get a sense of what your visibility on this, you know, is on the sustainability of this, what looks to be a real breakout or a real acceleration in the top line.

Yeah, great point. Happy to expand on that. So we see very solid growth in the business. We actually saw 38% growth in our product revenue from Q2 of 25 to Q2 of 26. So we saw that 38% growth. We saw 28% growth in Q1 25 to Q1 26 on the product side. We saw 9% growth from Q4 of 25 into Q1 of 26. And then from Q1 26 to Q2 26, we saw another 9%. So really strong, healthy growth just on the product side itself. And again, you know, I can't particularly pick maybe one segment, but I would say, again, we see very good growth in the enterprise segment, in the industrial segment. Casino gaming continues to do well, but again, some of the growth drivers in the aerospace arena as well. And then we did see a pretty significant jump in our non-product revenues from Q1 to Q2. That was driven by the $40 million subcontract agreement that we signed with a prime contractor for the MRAM process and engineering services. So, again, really strong, healthy demand. What I would also say, and I've said this publicly, is from Q2 to Q3, we guided up to the midpoint of $20 million revenue in Q3. So you're right, times four, that gives you an $80 million revenue runway. So well on our way toward the $100 million for sure. But in our revenue at $18.7 million in Q2, so $18.7 to call it roughly $20 million in Q3, most of that growth we do expect to be driven by product revenues. And I just think that that's really a very important point to provide.

Thanks for that. And then, you know, you highlighted Unisys, and it seems to be one of the biggest opportunities that I saw on the slides out there, $3 billion TAM. I know you've talked about, or I believe you've talked about, 5% to 10% capture on that business. I don't know if you've given a timeframe on that. My impression was that Unisys, you did put another chart up and show Unisys contributing to the 100 by 29. But it looked like a relatively small piece of that, and I could have misread the chart. So I'm trying to get a sense of, you know, how excited should we get about Unisys in the next couple of years? I mean, is it more of a 28, 29, 30 kind of a ramp or, you know, kind of when do we see the 5% to 10% penetration start to show up in your model?

Yeah, I'll start with this one and then I'll let Sanjee sort of supplement as well and add to it. But what I would say is, yes, we are very excited about this particular product and this particular opportunity. um you know bringing out this uh 256 meg part we're going to take that out at the end of this year um that is again uh expands into this this much broader chain for us with the norflash you know sort of competitive market but again norflash tends to be at the lower densities they and and in ranking uh when we take this part out we'll be able to compete at the higher densities and again very sort of excellent applications in the aerospace and the data center marketplace as well but we often get asked hey what are the milestones right so the milestones are we're going to take it out at the end of this year we'll start production mid next year is when we expect and then we look to for it to start contributing you know some level of revenue maybe by the end of 2027, but really ramp to production volumes, and it should start to contribute meaningfully in 2028 and on into 2029, you know, and again, I think we're well on our way to the 100 million, but I don't want to declare victory just yet, but we feel we are very excited about that particular part and the contributions that it'll make.

Yeah, so Rick, I think, like you pointed out, right, I mean, Unisys is actually going to be a large portion of our product revenue, and the question is when, right? So the challenge obviously is that in the industrial automation space, the typical design cycle is 12 to 18 months. So when we take out our prototype at the end of this year and we have some engineering samples available for our customers, let's say Q12 next year, that's where you can start the clock of 12 months to 18 months. And that's the reason why I think you'll start seeing meaningful revenue only in 2028. So I think we will hit this $100 million number with the majority of the contribution for Persist and the licensing revenue with a small contribution from the U.S. But if you look at 2030 and 2031, I think we will start overtaking the Persist and the licensing portion of the revenue here.

Got it. And if I could pivot just a little bit, because you mentioned it a couple of times, but the $40 million, I believe, Sanjeev, it's like a two and a half year revenue capture on that government contract. So please correct. Thank you. Yeah, please correct me if I'm wrong. And I'm just I'm curious because I believe you're recognizing that. I think Bill might have mentioned that you're recognizing that as NRE. So I just wanted to kind of get a sense of what the what the margin implications are as that comes in. And then what is the slope of that capture look like as you ramp it? You know, I mean, are there certain milestones or hurdles that you have to meet along the way? Because it seemed like the implied guide for 3Q, and I could have misread that, was sort of flattish. So maybe it's not just a linear ramp for that two-and-a-half-year time period. So I don't know what that looks like, that revenue ramp.

Yeah, I'll just make a comment and then turn it over to Bill for the specifics on the gross margins and the revenue ramp. But the bottom line is that this contract that we got awarded as a subcontract to one of the U.S. prime contractors, It's basically to provide engineering services to transfer the learning that we have on our toggle M-RAM to this amend them subcontractor, to the prime contractor amend them. And by that, they will have a blue book, basically, that basically tells them how to build this technology in case they need it, and then they have all the know-how to be able to build this line, and they will be involved in our learnings that we have at MyTeacher that we share with that alternative to actually talk about specifics of the NRE and the responses and stuff.

Right, right. Yeah, again, great question. What I would say is, won't necessarily be linear, but what I would say is it's probably a bit more like a bell curve that you would see. And yes, there certainly are milestones that are very objective that we have to track to along the way, but it's going to be based in engineering service efforts on the toggle MRI process.

And the final thing I would say is, yes, we do expect it to be or it is margin accretive to the overall corporate gross margins. All right, thanks. And so when you say bell curve, should we think sort of the bulk of it is captured in calendar 27? Would that be the right way to think of it?

Yeah, I mean, I think, again, it has to do with the efforts that we have to make and the milestones we have to hit um so you'll see some you know decent you know obviously it'll be more in 2027 than it was in 26 because we didn't start essentially late april may of 2026 um and so you'll have a full year in 2027 so we'll see more revenue then uh and some of the more efforts you know sort of again as we go through time uh and then on into 28 as well we'll recognize it you you know, won't necessarily be a full year, even in 2028. So yeah, 27 will probably, will definitely be the biggest. And that's where you kind of get this bell curve as well, partly.

No, thank you for that. And then since we're talking about gross margin, just real quickly, I'm curious. I know you've said you're getting gross margin back above 50 and sustainably. I didn't know if you had laid out, you know, longer term like targets where you want gross margin to settle, you know, in your perfect world. And, and, and maybe if you could include off margin target, you're just kind of getting a loose idea of where, where, when this model's really humming, sort of where you, where you see it.

Yeah, I would say, again, we would, we would expect margins to be, you know, greater than 50%. I mean, I think, you know, as we, as we ramp, right, we've got, you know, different areas of the business that contribute in different ways. again, the subcontract agreement is margin accretive against the 50%. You know, I would say again, right, we would expect that gross margin. I mean, in Q2 of 26, we had 53.9% gross margins, right, on a gap basis. And so, again, you know, we're already kind of seeing some, you know, gross margins in I mean, I think that's a reasonable gross margin for the company. you know ultimately we're going to be looking to push for ways to improve that but there's a lot of moving parts as you might imagine so again very comfortable with the 50% plus gross margins we're kind of seeing it in that 54% range today I think you know again anything in that arena we reconsider somewhat reasonable and then as far as off profit margins again you know it depends on the mix of revenues and products and so forth but yeah I mean we're definitely going to expect to be, you know, 10% or so, you know, as we move forward. And obviously, everything I say, you know, I hope that we overachieve or, you know, we'll work to overachieve. But I think there's some areas where, you know, again, we're making a lot of investments on the product development roadmap. And sometimes you have to make those investments that your profit might suffer or show, you know, less optimal periods of time, but, you know, we're going to do what we need to do. And again, we have lots of exciting opportunities, you know, in the data center and aerospace markets. I mean, it's really, it's really quite fascinating.

No, absolutely. So thanks for that. I didn't know, if you could pivot to basically a couple of the fab projects, I'm curious on the microchip project, if there was anything you could, you mentioned it in your prepared remarks or in your presentation, but But I just was curious if you'd add any more color, you know, basically when, and if I missed it, I apologize. But when you expect a complete, you know, phase one, move into phase two with the microchip project and, you know, kind of, I know you briefly mentioned CapEx. And so just trying to get a handle on, you know, sort of how long, you know, let's call it elevated CapEx. And maybe that's a mischaracterization, but, you know, how long we kind of run at these kind of CapEx levels.

Yeah, I think it's okay. I'll just give you a quick answer from Sanjeev. You know, we do see, under that particular arrangement, we'd expect to see, we had something like $14.5 million of spend to sort of bring this up. This is, again, public information as part of the A.K. And about a third of that is going to be NRE, and about two-thirds of that will be capital expenditure. So if you think about $5 million a year for the next couple of years related to the microchip, it's probably not terribly far off. But, again, some of it will be, you know, at different times, right, because you've got to get all the pieces and parts in place and spun up. So, again, you know, nothing that, you know, again, we feel the company is well capitalized and certainly able to meet them all of our commitments, including that particular commitment to bring up the process, in-ramp process at Microjib.

So Rick, on that one, phase one versus phase two, and the time to bring first silicon from the Microchip fab. Basically, in phase one, we're basically transferring or bringing up the toggle and RAM technology at the Microchip fab. And for that, we're using the standard copper tools that Microchip has. And then there are some specialized tools that we use for our and RAM technology. So we basically identified those tools. We're installing those tools at this time. And then we are basically starting to qualify the copper process, the standard copper process, like microchip. So I think all of that, the initial processing, will probably be done in nine to 12 months time frame. And we'll have our first qualified silicon over there from 18 to 24 months. So one and a half to two years. And then somewhere in the middle of it, we will start bringing up the spin transfer talk process as well. So sometime in Q2, Q3, or 2027 is when we can expect to start bringing up the 8-inch spin-off process that we have over here in Chandler at the Microsoft FAB.

Got it. Thanks. And then just quickly on Nokia, just with their purchase of the NXP FAB that they're in Chandler, what, if anything, changes for you guys? And sort of where does that relationship sit now with new owners?

Yeah. So we traditionally have a very, very good relationship with free scale as well as NXP, right? And even when NXP has been looking for buyers, they have been very upfront about talking to the buyers about our existence in the fab. So Nokia was well aware of Everspin's operations in the NXP fab, and getting specific on the sale, the ownership doesn't transfer from NXP to Nokia until Q1 of 20.9. So it's almost two years out. so there is no disruption of our operations at least through that time and then we have talked to nokia about continuing our operations over here our initial introductions have been you know our conversations have gone very well so the hope is that we can you know continue our operations over here of course determined by the business opportunity that we have right as long as our product revenue keeps going like it's going today absolutely we would like to keep our operations over here going so and it looks uh pretty promising i think nokia is open to us being here.

That's great. And maybe I might just ask one more if that's okay, because I know you've got the litigation with Avalanche. And I didn't know with litigation, it's always hard to comment too much. And we all understand that. But I didn't know how much you could share around that. I know in the first half, I think it was close to about 6 million in litigation costs. And And I believe it's four expected in 3Q. And I think, I don't want to put words in either one of your mouths, but I believe you kind of said that four a quarter is sort of probably like a near term for the next few quarters run rate. And so I was just trying to get a sense of sort of where that is and then, you know, kind of trying to get an expectation, maybe what litigation costs look like and as best you can, right, in 2027, calendar 2027.

I'll comment on the litigation itself that would be great in January of this year Avalanche brought in a lawsuit on Averspan claiming that we were infringing four of their patents for the magnetic materials that we're using in our products since then we've gone through some review and we believe that we have very strong defenses basically we have prior art some of the claims are actually not do not apply to our products as well so we believe that we are in a very good position and also some of the patents are actually they did not pay the appropriate fees for those patents in the patent office so technically they are not enforceable so that is something that we have highlighted at the ITC and the patent office is actually working with Avalanche to sort that out so overall I think the defenses are going very well I think we feel that we're in a good position. And, you know, the ITC case is very well defined in terms of schedule. So we'll have a hearing at the end of November, early December, and that's when you start seeing the litigation costs going down. And then the decision is actually due in July or August of 2027. So I think that's the, you know, similar line to the club that will actually be done either way in the middle of 2027. But hopefully we can get a conversation going between Avalanche and Erospin before then to minimize or avoid all these costs that are ongoing right now. Bill, I'll turn it over to you for...

Yeah, I think just to add to that, I mean, I think, you know, certainly the litigation is expensive, right? It's challenging. It's complex, right, because of the IP pieces involved. But, you know, we feel very strongly in our IP and in our position and we're going to defend ourselves and, you know, we'll continue to see it through.

Well, that's great. Well, once again, it was great seeing you guys and really appreciate you attending the show. And it was great to, again, great to give you the update for all of us. So thanks a lot.

Thank you for the opportunity to do it.

Yeah, thank you. Thank you.