Will the $40 million contract revenue step up in Q3 since it's a full quarter, or will it not scale linearly?

Management stated that the revenue from the $40 million contract will not necessarily scale in a very linear manner and expects non-product revenue to be in a similar area from Q2 to Q3. “Yes, that's correct. It won't necessarily scale in a very linear manner. So I would expect to see nonproduct in the similar area from Q2 to Q3.”

Product gross margins were lower in Q2. Is this the new baseline, or can they return to 50%? What is the forward outlook?

Management attributed the lower product gross margins to headwinds from price increases in back-end packaging and test services. They guided for product gross margins to be in the mid-to-upper 40s range, with total gross margins north of 50%. “Yes. Good question. So what I would say is definitely saw some headwinds in product costs, both in terms of -- in Q2. And so what we've always guided is, hey, we expect product gross margins to kind of be in that mid to upper 40s range. And then in total, we expect the company to be north of 50% for total gross margins.”

How does the NXP Chandler fab sale affect Everspin's manufacturing needs, and will Microchip cover all needs?

Management stated that NXP retains ownership of the Chandler facilities until Q1 2029, so there is no immediate interruption. They are in conversations with Nokia (the acquirer) and the Microchip partnership provides scalability to cover future needs. “So what we understand or what has been communicated to us, Richard, by NXP is or actually by Nokia's announcement was that they would complete the acquisition of the Chandler facilities by Q1 of 2029. So NXP retains the ownership through the end of 2028. And one of the fabs, which is basically for gallium nitride would be converted to indium phosphide through a lease that Nokia would get starting Q1 or Q2 of 2027.”

MRAM

Everspin (MRAM) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 5, 2026

Source: earnings call transcript

Executive summary

Everspin Q2 FY26 — Record Revenue and Strong Product Growth

Everspin delivered a record-breaking quarter, driven by robust product revenue growth across key industrial and defense markets, complemented by initial revenue from a significant U.S. prime contractor agreement. The company continues to execute on its product roadmap, including the UNISYST family and CXL-based MRAM solutions, while managing increased operating expenses from litigation and NRE investments. Management remains focused on scaling the business and converting design wins into long-term growth.

Highlights

Achieved record revenue of $18.7 million in Q2 FY26, exceeding guidance of $15.5 million to $16.5 million.
Non-GAAP EPS of $0.11 significantly surpassed guidance of $0.00 to $0.03 per share.
Product revenue grew 38% year-over-year to $15.3 million, driven by industrial automation, energy management, and aerospace & defense.
Secured first design win for a GEO satellite mission with Astro Digital, utilizing PERSYST 64-megabit STT-MRAM.
Advanced product pipeline with UNISYST 256-megabit xSPI on schedule for tape-out and high-density 128Mb/256Mb xSPI high-reliability parts released to production ahead of schedule.

Concerns

GAAP operating expenses increased to $14.5 million, up from $8.7 million in Q2 FY25, primarily due to $4 million in litigation costs and $1.1 million in nonrecurring engineering expenses.
Product gross margins faced headwinds from price increases in back-end packaging and test services, expected to remain in the mid-to-upper 40s range.
Operating cash flow decreased to $0.2 million from $0.6 million in Q1, primarily due to litigation costs.

Guidance & targets

Category	Target	Timeline	Confidence
Total Revenue	$19.5 million to $20.5 million high materiality	Q3 FY26	High
GAAP EPS	net loss of $0.05 per share to $0.10 per share high materiality	Q3 FY26	High
Non-GAAP EPS	$0.10 and $0.15 per fully diluted share high materiality	Q3 FY26	High
DoD contract completion	estimated completion in the first half of 2027 medium materiality	H1 2027 · FY27	High
UNISYST 256-megabit xSPI tape out	later this year medium materiality	CY26 · FY26	High
UNISYST 256-megabit xSPI engineering samples	early 2027 medium materiality	CY27 · FY27	High
UNISYST 256-megabit xSPI production ramp	later in the year medium materiality	CY27 · FY27	High
Microchip MRAM capabilities first qualified silicon	18 to 24 months from project kickoff high materiality	October 2027 - April 2028 · FY28	High
UNISYST TAM capture	5% to 10% of this market in the early years medium materiality	Early years of production	Medium

Product announcements

Product	Type	Timeline
High-density 128-megabit xSPI high-reliability parts	launch	Q2 FY26
High-density 256-megabit xSPI high-reliability parts	launch	Subsequent to Q2 FY26
UNISYST 256-megabit xSPI	milestone	Tape out later this year; samples early 2027; production ramp later 2027
CXL interface-based MRAM solutions	roadmap	Demonstration at SDC in September

Deals & partnerships

U.S. prime contractor Subcontract for engineering services to develop and qualify Toggle MRAM process technology capabilities for U.S. defense industrial-based customers. $40 million 2.5-year

Everspin is a subcontractor on an existing prime contract.

DoD contractor Contract to develop a sustainment plan for MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to aerospace and defense customers. $14.6 million

This contract is expected to wind down over coming quarters.

Astro Digital Selection of Everspin's PERSYST 64-megabit STT-MRAM for use on an upcoming Raven Bus Geosynchronous Earth Orbit (GEO) satellite mission.

MRAM deployed as primary fail-safe memory for system boot memory.

Microchip Project to build MRAM capabilities in Microchip's Gresham, Oregon fab, comprising two phases (Toggle MRAM then STT-MRAM).

Goal to deliver first qualified silicon in 18 to 24 months from April kickoff.

High-performance data interface and controller company Contract to develop and provide CXL controller IP for MRAM.

Collaboration on an AMD UltraScale plus FPGA-based platform using the CXL controller IP to connect to Everspin MRAM DIMMs.

MaxLinear Memorandum of Understanding (MOU) to evaluate the use of Everspin CXL attached MRAM with MaxLinear storage accelerators for next-generation storage and acceleration architectures.

Assessing opportunities to apply persistent bytaccessible, low-latency MRAM to storage functions.

Capital programs

Microchip MRAM Capabilities Build-out on schedule

Period spend: $1.1 million

Start: April

Benefit:MRAM manufacturing capabilities (Toggle MRAM in Phase 1, STT-MRAM in Phase 2)

Project with Microchip in their Gresham, Oregon fab to build MRAM capabilities. $1.1 million in nonrecurring engineering costs recognized in Q2 FY26 for this project. Goal is to deliver first qualified silicon within the expected timeframe.

Risks & headwinds

Litigation costs Q2 FY26, expected similar in Q3 FY26

$4 million in Q2 FY26

Mitigation:Excluded from non-GAAP results; management is committed to maintaining financial discipline.

Back-end price increases impacting product gross margins Ongoing

Product gross margins in mid-to-upper 40s range

Mitigation:None explicitly stated, but management acknowledges the dynamic.

Winding down of $14.6 million DoD contract Expected completion H1 2027

Other income decreased from $0.8 million to $0.5 million in Q2 FY26; $13.3 million recognized to date

Mitigation:Partially offset by new $40 million prime contractor agreement; continued investment in product development to drive future growth.

Uncertainty regarding NXP Chandler fab sale impact Post-2028

NXP retains ownership until Q1 2029; Nokia acquisition completes Q1 2029

Mitigation:Microchip partnership provides alternative capacity; planned conversations with Nokia to understand their plans for Everspin.

What to watch in Q3 FY26

Total Revenue

next quarter

Current $18.7 million (Q2 FY26)

Target $19.5 million to $20.5 million

Why it matters

Verifies the company's ability to meet its top-line guidance and sustain growth momentum.

Turning to guidance, we expect Q3 total revenue to be in the range of $19.5 million to $20.5 million

Find out whether MRAM delivers this. Inve re-checks your case every morning.

Q&A highlights

Are you seeing strength in drones within defense, beyond LEO satellites?

Management confirmed continued engagement in the drone sector and healthy demand across all segments of the business, but did not announce any specific deals in that area.

“What I would say is, certainly, right, we continue to engage in that sector. We haven't announced any particular specific deals on that area. And certainly, we still see very healthy demand across all segments of the business.”

asked by Neil Young · answered by William Cooper

2 min read 6 chapters

Detailed narrative

Record Revenue and Profitability

Everspin achieved its highest-ever quarterly revenue of $18.7 million, significantly exceeding guidance. This performance was driven by robust product revenue growth of 38% year-over-year and initial revenue recognition from a new $40 million agreement with a U.S. prime contractor. Non-GAAP EPS of $0.11 also surpassed expectations, demonstrating strong operational execution despite increased litigation and NRE costs.

Strategic Defense Contracts

The company began recognizing non-product revenue from a 2.5-year, $40 million agreement to develop Toggle MRAM process technology for U.S. defense industrial-based customers. Concurrently, a separate $14.6 million DoD contract for MRAM manufacturing sustainment is winding down, with $0.5 million recognized this quarter and $13.3 million to date, expected to complete in H1 2027.

Product Pipeline Expansion

Everspin is on track with its UNISYST family, with the 256-megabit xSPI test chip scheduled for tape-out later this year and production ramp in late 2027, targeting a new $3 billion NOR Flash market. High-density 128Mb and 256Mb xSPI high-reliability parts were released to production ahead of schedule, enabling customer evaluations.

Microchip Partnership Progress

The project with Microchip to establish MRAM capabilities in their Gresham, Oregon fab is proceeding on schedule. This initiative, which began in April, aims to deliver the first qualified silicon within 18 to 24 months, ensuring future production scalability and continuity, especially in light of NXP's Chandler fab sale.

CXL Interface Development for Data Centers

Everspin is actively developing CXL interface-based MRAM solutions to address the demand for nanosecond-class persistent memory, aiming to reduce latency by 100x compared to SSDs and improve XPU utilization to 90-95%. The company signed a contract for CXL controller IP development and a memorandum of understanding with MaxLinear to explore applications in next-generation storage architectures for hyperscale cloud and AI infrastructure.

End-Market Strength and Satellite Wins

Product revenue growth was robust across industrial automation, energy management, and aerospace and defense. Notably, the company secured its first design win for a Geosynchronous Earth Orbit (GEO) satellite mission with Astro Digital, using PERSYST 64-megabit STT-MRAM for mission-critical applications, expanding beyond its established presence in Low Earth Orbit (LEO) satellites.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.