Good afternoon, and welcome to Everspin Technologies Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Monica Gould, Investor Relations of Everspin.

Thank you, operator, and good afternoon, everyone. Everspin released results for the fourth quarter and full year 2025 ended December 31, 2025, this afternoon after market close. I'm Monica Gould, Investor Relations for Everspin. And with me on today's call are Sanjeev Aggarwal, President and Chief Executive Officer; and Bill Cooper, Chief Financial Officer. Before we begin the call, I would like to remind you that today's discussion may contain forward-looking statements regarding future events, including, but not limited to, the company's expectations for Everspin's future business, financial performance and goals, customer and industry adoption of MRAM technology, successfully bringing to market and manufacturing products in Everspin's design pipeline and executing on its business plan. These forward-looking statements are based on estimates, judgments, current trends and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We would encourage you to review the company's SEC filings, including the annual report on Form 10-K and other SEC filings made from time to time in which the company may discuss risk factors associated with investing in Everspin. All forward-looking statements are made as of the date of this call, and except as required by law, the company undertakes no obligation to update or alter any forward-looking statements made on this call, whether as a result of new information, future events or otherwise. The financial results discussed today reflect the company's preliminary estimates are based on information available as of the date hereof and are subject to further review by Everspin and its external auditors. The company's actual results may differ materially from these estimates as a result of the completion of financial closing procedures, final adjustments and other developments arising between now and the time that the financial results for this period are finalized. Additionally, the company's press release and statements made during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP net income to non-GAAP net income, which provide additional details. A copy of the press release is posted on the Investor Relations section of Everspin's website at www.everspin.com. And now I'd like to turn the call over to Everspin's President and CEO, Sanjeev Aggarwal. Sanjeev, please go ahead.

Thank you, Monica, and thanks, everyone, for joining us on the call today. We are pleased to report fourth quarter results with revenue of $14.8 million and non-GAAP EPS of $0.11 per diluted share with revenue towards the high end of our guidance range and EPS in line with our expectations. Our performance this quarter was driven by strength in data center, energy management and industrial automation applications. Growth in data center was driven by our ongoing work with IBM on the FCM4 module as well as its recently introduced FCM5 and the redundant array of independent disks or RAID reference design at the top 5 hyperscale operators. Within Energy Management and Industrial Automation, we saw demand return to normal levels after a period of inventory consumption that dampened demand in the prior year. With respect to below-the-line items, we recognized $2 million in other income in the fourth quarter and $10.5 million to date from the $14.6 million contract we have with a DoD contractor to develop a sustainment plan for our MRAM manufacturing facilities to provide continuous onshore MRAM capabilities to their aerospace and defense customers. We expect this business to progress on schedule with estimated completion in the first half of 2027. On the product side, we had a total of 238 design wins in 2025, up from 178 in the prior year. Our pipeline of new design wins for our MRAM products speaks to the continuing technical innovation from the Everspin team introducing new products to meet customer demand. These design wins support new customers and existing customers with new programs in industrial automation, casino gaming, energy management and military and aerospace applications. Turning to some of our product development efforts. We continue to expand our xSPI STT-MRAM portfolio in response to demand from our customers.…

Thank you, Sanjeev. Our results reflect the consistency of our execution. During the fourth quarter, we delivered revenue of $14.8 million, up 12% year-over-year and toward the high end of our guidance range of $14 million to $15 million, driven by higher product sales. MRAM product sales in the fourth quarter, which include both Toggle and STT-MRAM revenue were $13.5 million, up 22% over the fourth quarter of the prior year. Licensing, royalty, patent and other revenue in the fourth quarter decreased to $1.3 million from $2.2 million in Q4 '24 due to the completion of projects which were active in Q4 '24. Turning to gross margin. Our GAAP gross margin decreased to 50.8% for the fourth quarter, down slightly from the 51.3% in the fourth quarter of 2024 due to lower licensing and other revenue. GAAP operating expenses for the fourth quarter of 2025 were $8.6 million, down sequentially and up slightly from $8.4 million in the fourth quarter of 2024. Other income of $2 million was related to the strategic award we won in mid-2024 to upgrade manufacturing equipment in our existing facility located in Chandler, Arizona. We recorded fourth quarter non-GAAP net income of $2.6 million or $0.11 per diluted share based on 23.8 million weighted average diluted shares outstanding. This was in line with our guidance range of non-GAAP net income of $0.08 to $0.13 per share and compares to non-GAAP net income of $2.8 million or $0.13 per share in the fourth quarter of 2024. As a reminder, reported non-GAAP results exclude the impact of stock-based compensation. We are pleased that our balance sheet remains strong and debt-free. We ended the quarter with cash and cash equivalents of $44.5 million, down $0.8 million from $45.3 million at the end of the prior quarter. Cash flow…

[Operator Instructions] Our first question comes from the line of Neil Young with Needham & Company.

Great to hear about the NOR flash opportunity. I'm curious sort of -- you're talking about that you're in conversations. I guess, sort of how fast or how quickly do you think you could see upside from that? And sort of if you could any way size the upside, that would be really helpful of possible upside in revenue.

Neil, thank you for the question. So like I said in the prepared remarks, I think it really depends on the qualification cycle for our potential customers. I can say that we are now getting listed as an alternate for NOR flash at various distributors worldwide because of the tight supply chain issues that we are seeing with NOR flash. So we do expect some upside, but it's very difficult to quantify today as to what that upside can be. But we are obviously available to meet the demand if the requests come in, and it just depends on the call cycle at the customers.

Great. That's helpful. Just one more question for me. You talked about the inventory levels in energy management and industrial automation. They're starting to look pretty healthy or you think they do look healthy at this point. I guess what gives you confidence that, that shouldn't be an issue next quarter and going forward?

Yes. So based on the backlog that we are seeing at our distributors and the forecast that we're seeing at our customers, we do feel that they have burned through the inventory that they had overbuilt over the last year or so. So we're pretty confident that going forward, we would not run into that same issue at least in 2026.

Our next question comes from the line of Richard Shannon with Craig-Hallum.

I'll ask one kind of in the context of this year here. I want to ask about 2 different contributors here. First of all, on the strategic RAD-Hard project you've been working with your partner, and this has talked about a much better year. I'm wondering if that's something similar that you're expecting as well. And then also this quarter and a couple of past ones, you've been talking about some increasing contributions from the LEO satellite market. Great to get a sense of how kind of -- what's kind of the sense of scale of that today? And do you see that increasing over this year and over the next couple of years?

Thanks for the question, Richard, and thanks for joining. Clearly, you seem to be a little bit under the weather, but thank you for joining. As far as the LEO satellite market is concerned, I'll let Bill address it. On the QuickLogic project, I think the award that QuickLogic talked about does not relate to the project that we've been working on jointly. And in fact, I think that's the project that Bill was talking about in his prepared remarks that is not going to renew in the near future, and we're going to see some decline in that non-product revenue in Q1 of this year. That is still waiting for some milestones to be met by the other partners in the program, and we expect that to be kicking in again towards the second half of this year, but not in the first half. Bill on the LEO satellite.

Yes. Thanks, Sanjeev, and thanks, Richard, for the question. Yes, I would say that the LEO satellite market is still that burgeoning market, and that's what we see both in terms of our orders and our backlog, and we feel confident about our products and our position there. And we expect to again kind of move up with that increased demand, especially as we've introduced our high reliability products as well that sort of fits perfectly in that particular market space as well.

Okay. Great. Second question, just on your NOR flash replacement products and maybe taking a different angle than one of the last questions here and also your very interesting comments. But obviously, you've been targeting NOR flash replacement in certain markets. And if I caught your comments right, Sanjeev, you're talking about, I think, a win with -- I think it was Microchip on an MCU. I'd love to get a sense of when you see that becoming a material contributor. And then also maybe, I think in the past, you talked about some other engagements, particularly in the FPGA space where you're excited about some progress there. Maybe give us an update there as well, please.

Yes. Good question, Richard. I think there are 2 partner programs that we're really excited about, in particular. One is the one with Lattice and the other one is this Microchip. And I think we are seeing steady progress with both those partners, trying to get our product qualified and integrated into their standard offering. And I think that's where this PIC64 at Microchip comes into play. There -- the markets that they are targeting align very well with Everspin in the aerospace and defense market. And then I think we can then expect to take into the commercial market as well. But right now, the PIC64 is targeted towards the aerospace and defense as well.

Okay. My last question, I'll jump out of line here. Sanjeev, you talked about a goal of driving towards or driving to $100 million of revenues within, I think, 3 to 5 years. I'd love to get a sense any way you quantify or at least rank order of the contributors of that revenue. I think the big picture here that I think of this as the toggle, the the STT products and licensing, I guess, if there's any other way you'd categorize the contributors, that would be very helpful.

So the way I look at it is the major contributor is going to be the PERSYST products, followed by perhaps equal contributions from our licensing and UNISYST in 3 to 5 years down the road towards the $100 million. In the PERSYST, I'm including the Toggle MRAM market products as well as the xSPI STT products that we are shipping today as well as the ST-DDR products that we're shipping to IBM. So I think those 3 would form the portion of the HR -- from the portion of the PERSYST products that are going to contribute. And this high reliability product family that we have just introduced is going to actually give us a nice boost over there. And then in 2027, we expect UNISYST to kick in some volume. And so I think between that, UNISYST and our licensing is what's going to get us to the $100 million mark down the road.

Ladies and gentlemen, I'm showing no further questions in the queue. That concludes today's conference call. Thank you for your participation. You may now disconnect.