QuickLogic Misses Q1 Revenue and EPS Estimates, but Sees Q2 Improvement

QuickLogic's Q1 FY2026 revenue of $5.1 million represents a 16.8% increase year-over-year (YoY) and a 35.3% increase quarter-over-quarter (QoQ). While this growth is positive, it fell short of the company's guidance, which was $450,000 below the midpoint. The revenue shortfall was attributed to inventory reserves of about $300,000 and $198,000, as CFO Elias N. Nader noted: "The shortfall was due to inventory reserves of about $300 thousand $198 thousand."

The company's gross margin for Q1 was 36.5%, down significantly from 43.4% in Q1 FY2025 and 18.1% in Q4 FY2025. This decline in gross margin is a concern, as it indicates higher costs relative to revenue. The company expects the gross margin to improve in Q2 to approximately 42%, plus or minus 5%, driven by an increase in mature product revenue.

Non-GAAP operating expenses in Q1 were $3.3 million, up from $3.0 million in Q1 FY2025 and down from $3.5 million in Q4 FY2025. This increase is in line with the company's strategy to invest in growth initiatives. Stock-based compensation for Q1 was $858,000, compared to $904,000 in Q1 FY2025 and $744,000 in Q4 FY2025.

The company reported a non-GAAP net loss of $1.3 million, or a loss of $0.08 per share, in Q1 FY2026. This compares to a non-GAAP net loss of $1.1 million, or a loss of $0.07 per share, in Q1 FY2025 and a non-GAAP net loss of $2.8 million, or a loss of $0.17 per share, in Q4 FY2025. Despite the higher loss, the company raised $3.2 million through its ATM program, increasing net cash by $2.2 million.

For Q2 FY2026, QuickLogic expects total revenue to be $6.0 million, plus or minus 10%, with new product revenue of $5.2 million and mature product revenue of $800,000. The company anticipates a Q2 net loss of about $800,000, or a loss of approximately $0.04 per share, and expects non-GAAP operating expenses to be $3.3 million, plus or minus 5%.

The company is still expecting full-year non-GAAP operating expenses to be approximately $13.5 million, representing a 14% increase over 2025. This forecast supports the company's anticipated 50% to 100% revenue growth in 2026.

QuickLogic continues to make progress in its product development and market expansion efforts. CEO Brian C. Faith highlighted the company's recent contract wins, stating: "While these initial contracts have been smaller, their total value is now nearly $2 million." The company also announced an eFPGA hard IP contract with a new defense industrial-based customer valued at $1.1 million, which will be fabricated on the GF 12LP process.

In Q1, new product revenue was $4.3 million, up 14.2% from Q1 FY2025 and 50.7% compared to Q4 FY2025. Mature product revenue was $800,000, and the company expects an increase in mature product revenue during the second half of the year, driving the full-year total to approximately $4 million. Brian C. Faith noted: "And if you think about what we did in Q1 plus our guide for Q2, that is already 80% of last year just in the $11 million in the first half versus $13 million something last year."

The tone of QuickLogic's Q1 FY2026 earnings call was more positive compared to the previous quarter, with a sentiment score of 0.29, up from 0.20 in Q4 FY2025. The guidance tone also improved, increasing from 0.17 to 0.29. The prepared sentiment score rose slightly from 0.35 to 0.38, while the QA sentiment improved from 0.06 to 0.14. The AI optimism score increased from 0.23 to 0.37, indicating a more optimistic outlook.

However, the uncertainty index rose from 60.5 to 69.1, and the QA evasiveness index increased from -52.0 to -44.1. These metrics suggest that while the company's overall tone is more positive, there is still some uncertainty and a slight increase in evasiveness in the Q&A session. For a detailed history of the company's call delivery, see the tone history.

Comparing QuickLogic to its peers in the Fabless subsector, the company's revenue and gross margin performance in Q1 FY2026 are significantly lower. For example, NVIDIA [NVDA] reported revenue of $81.6 billion and a gross margin of 74.9%, with a 85.2% YoY growth. Apple [AAPL] reported revenue of $111.2 billion and a gross margin of 49.3%, with a 16.6% YoY growth. While these companies operate in different segments and at different scales, the comparison highlights the challenges QuickLogic faces in terms of scale and profitability.

QuickLogic does not have any notable customers or suppliers that are publicly traded. However, the company's focus on new product revenue and mature product revenue suggests that it is diversifying its customer base and product offerings. The increase in mature product revenue expected in the second half of the year could indicate a shift in demand or a strategic move to balance its revenue streams.

QuickLogic's Q1 FY2026 results reflect a mixed performance, with revenue and gross margin falling short of expectations. However, the company's guidance for Q2 and its focus on growth initiatives suggest a return to positive momentum. The improved tone of the earnings call and the company's strategic moves in product development and market expansion provide a basis for cautious optimism. While the company faces significant challenges, its efforts to increase mature product revenue and manage operating expenses position it for potential improvements in the coming quarters.