Everspin Technologies Reports Q1 FY2026: Revenue Beats, EPS Misses, and a $40M DoD Contract Boost

Everspin Technologies reported Q1 FY2026 revenue of $14.9 million, a 1.9% beat over the street estimate of $14.6 million. This marks a 14% year-over-year (YoY) increase and a 0.5% sequential increase from the previous quarter. The company's revenue has shown a steady recovery from the lows of 2024, with a particularly strong performance in the MRAM product segment, which includes both Toggle and STT-MRAM revenue. According to CFO William Cooper, "MRAM product sales, which include both Toggle and STT-MRAM revenue, were $14.1 million, an increase of 28% over the first quarter of the prior year and up 5% sequentially."

The company's gross margin improved to 52.7% in Q1 FY2026, up from 51.4% in the first quarter of 2025. However, licensing, royalty, patent, and other revenue decreased to $0.8 million from $2.1 million in Q1 FY2025, primarily due to fewer currently active projects.

Despite the revenue beat, Everspin Technologies reported a GAAP net loss of $0.01 per diluted share, missing the street estimate of $0.01. On a non-GAAP basis, the company reported net income of $2.6 million or $0.11 per diluted share, which was at the high end of the guidance range of $0.07 to $0.12 per share. CFO William Cooper highlighted the strong performance: "We recorded fourth [sic] [first] quarter non-GAAP net income of $2.6 million or $0.11 per diluted share based on 23.1 million weighted average diluted shares outstanding. This was at the high end of our guidance range of non-GAAP net income of $0.07 to $0.12 per share and compares to non-GAAP net income of $0.4 million or $0.02 per share in the first quarter of 2025."

Operating expenses were $10.6 million, up from $8.7 million in the first quarter of 2025, primarily due to litigation costs, higher compensation costs for new and existing employees, and professional fees. The company ended the quarter with cash and cash equivalents of $40.5 million, down $4 million from the $44.5 million at the end of the prior quarter. Cash flow generated from operations decreased to $0.5 million for the first quarter from $2.6 million in the fourth quarter, primarily due to litigation costs and increased working capital needs.

For Q2 FY2026, Everspin Technologies expects total revenue to be in the range of $15.5 million to $16.5 million, with GAAP results per fully diluted share expected to be between a net loss of $0.12 to a loss of $0.07. On a non-GAAP basis, the company anticipates results to be between breakeven and net income of $0.03 per fully diluted share.

The company remains on track to qualify its 128-megabit and 256-megabit high-reliability parts, with high-volume availability expected in the second half of this year.

One of the most significant highlights of the quarter was the announcement of a new 2.5-year $40 million agreement with a U.S. prime contractor. This contract is expected to provide a significant boost to the company's revenue and strategic position in the aerospace and defense market. The company has already recognized $2.1 million in other income in the first quarter and $12.8 million to date from the $14.6 million contract it has with the DoD contractor to develop a sustainment plan for its MRAM manufacturing facilities.

Everspin Technologies is also making progress with its UNISYST product line, which is expected to address a total addressable market (TAM) of $3 billion by 2026. According to Richard Shannon, "If I took the notes here, and I seem to recall them being consistent with what I've heard in the past regarding the UNISYST product line here, you talked about this being a $3 billion TAM." The company expects to have product samples available in Q4 of 2026, with production ramping in Q1 or Q2 of 2027. CEO Sanjeev Aggarwal noted, "So let's say, we have the product available samples in Q4 of '26, production, let's say, Q1 or Q2 of '27, and you basically have another 18 months before it's going to ramp to production."

However, the UNISYST product line is not expected to contribute significantly to the company's $100 million revenue target in the next 3 to 5 years.

The tone of the earnings call remained positive, with a sentiment score of 0.22, which is consistent with the previous quarter. The guidance tone, however, showed a slight decline, dropping from 0.26 in Q4 FY2025 to 0.13 in Q1 FY2026. The prepared sentiment and QA sentiment both improved slightly, with prepared sentiment increasing from 0.22 to 0.27 and QA sentiment increasing from 0.16 to 0.22. The company's AI optimism score saw a significant improvement, rising from 0.08 to 0.56. The uncertainty index decreased from 56.3 to 54.7, and the QA evasiveness index dropped from 3.1 to -13.8, indicating a more straightforward and transparent call.

For a detailed look at the tone history, see the tone history.

Everspin Technologies does not have any significant customers or suppliers that are publicly traded, which limits the read-throughs from this quarter's results. However, the company's focus on the aerospace and defense market, particularly with the new $40 million contract, positions it well for future growth in this segment.

In the broader memory subsector, Everspin Technologies' revenue of $14.9 million and gross margin of 52.7% are modest compared to its peers. For example, Micron Technology (MU) reported revenue of $41.5 billion and a gross margin of 84.6%, while Western Digital (WDC) reported revenue of $3.3 billion and a gross margin of 50.2%. However, Everspin's focus on niche, high-reliability MRAM products differentiates it from these larger players, and the company's recent contract wins and product developments suggest a strong position in its target markets.

Everspin Technologies' Q1 FY2026 results reflect a mixed performance, with revenue beating estimates but EPS missing. The company's gross margin improvement and the significant $40 million contract with a U.S. prime contractor are positive indicators of its future growth potential. The UNISYST product line, while not expected to contribute significantly to the $100 million revenue target in the next 3 to 5 years, represents a substantial market opportunity. The company's strategic focus on high-reliability MRAM products and its strong position in the aerospace and defense market position it well for long-term success.