Latest news with #Netlist
Yahoo
07-05-2025
- Business
- Yahoo
Q1 2025 Netlist Inc Earnings Call
Thanks, Mike, and hello, everyone. It's been a little over a month since our last call. And as such, our update today will be relatively brief. First quarter financial result was in line with our expectations. While the US tariffs have created some disruptions in the memory market, the majority of Netlist sales are shipped to locations outside of the US, thereby minimizing the direct impact of tariffs on our business. That said, in early April, major memory manufacturers withheld pricing information, and leading computer hardware producers paused shipments from Asia into the US as the entire industry grappled with the impact of the tariffs. At the moment, memory and other semiconductor products are exempt from tariffs. But we expect a separate tariff scheme on semiconductors to go into effect in the months ahead. We have seen some price increases in April and would expect additional adjustments as tariff impacts the supply chain. There continues to be significant uncertainty as the business environment remains fluid and subject to change. Taking the longer view, however, the overall memory industry is expected to grow significantly over the next few years, mainly driven by AI. As I mentioned on our last call, Netlist is well positioned to capitalize on rapidly increasing demand for high bandwidth memory or HBM, and on the industry's transition to DDR5, including MRDIMM, the highest-end server memory that will go to market later this year. We've recently started to sample select customers with high-capacity, high-performance MRDIMM products for the AI memory market and plan to go to market later this year with the Netlist branded product line. Moving on to intellectual property. In the breach of contract case against Samsung, the Federal District Court for the Central District of California entered a final judgment on April 8. The parties have 28 days from that date to file their respective post-trial motions. We estimate that the court will rule on those motions within 90 days. When the judge issues the order on post-trial motions, the case will officially conclude at the District Court. Samsung would then have 30 days to file a notice of appeal with the US Court of Appeals for the Ninth Circuit. Samsung has lost this case 3 times now, and it is unclear on what basis they might appeal. If Samsung does appeal and loses for the fourth time, their only option is to take the case to the Supreme Court. We believe the odds of the Supreme Court taking up this kind of case are very remote. In the Eastern District of Texas, one case against Samsung, where Netlist secured an order finalizing the $303 million damages award in July 2024. The appeals process continues to advance at the Federal Circuit Court of Appeals. The Netlist patents in this case cover both HBM and DDR5 memory that are foundational to AI computing. Samsung filed its opening appellate brief on December -- in December with Netlist filing its response brief in March. Samsung's reply brief will be due in mid-May. A date has not been set for the appeals hearing at this time, but we estimate the case will be heard and decided early next year. In the Eastern District of Texas, two case against Samsung, where Netlist was awarded $118 million in damages in November and the court issued a final judgment in December, we are in post-trial briefing phase. Once the final order is issued, both parties will have 30 days to file an appeal, which would go to the Federal Circuit Court of Appeals. The $445 million damages award case against Micron in the Eastern District of Texas, which took place in May 2024, is in the post-trial process. We expect this case to follow the same course as the other cases in the Eastern District of Texas. We await the court's final order and commencement of the post-trial briefing phase. With regard to the IPRs, we entered 2025 with 8 appeals involving 11 Netlist patents pending before the Federal Court of Appeals. In January, Samsung filed its notice of appeal of the PTAB's December '24 decision in the 608 IPR in which Netlist had prevailed. In March, the Federal Circuit issued a judgment affirming the US PTAB's interparties review decision upholding the validity finding of Netlist's 523 patent. As a reminder, this IPR followed a pre-emptive legal action by Samsung against Netlist. Samsung has 90 days from this decision to file a petition to the Supreme Court. We expect oral arguments for Netlist's 314 and 506 patents to be heard later this year and the remaining IPR appeals to be heard in 2026. I would note that the appeal of the Samsung EDTX one case and the three IPR appeals involving the five asserted patents in that case, have been designated as companion cases by the Federal Circuit. So the oral arguments on all four appeals will be heard on the same day before the same panel of Federal Circuit judges. As I mentioned earlier, we estimate that oral arguments will take place in early 2026 in this case -- in this consolidated case. Therefore, in the months ahead, we expect to be quite busy with these appeals that are in the pipeline, and we look forward to securing positive results. Now I'll turn the call over to Gail for the financial review. Thank you, Michael, and good day, everyone. Welcome to Netlist's first quarter 2025 conference call. Leading today's call will be Chuck Hong, Chief Executive Officer; and Gail Sasaki, Chief Financial Officer. As a reminder, you can access the earnings release and a replay of today's call on the investors section of the Netlist's website at Before we start the call, I would note that today's presentation of Netlist's results and the answers to questions may include forward-looking statements, which are based upon current expectations. The actual results could differ materially from those projected in the forward-looking statements because of the number of risks and uncertainties that are expressed in the call, annual and current SEC filings and the cautionary statements contained in today's press release. Netlist assumes no obligation to update forward-looking statements. I will now turn the call over to Chuck. Good day and welcome to the Netlist first quarter 2025 earnings conference call and webcast. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Mike Smargiassi, Investor Relations, please go ahead. Story Continues Gail Sasaki Thanks, Chuck. For the quarter ended March 29, 2025, revenue was $29 million, which was in line with our expectations and reflected short-term softness in the consumer demand environment. While we do not formally guide, given booking and shipping for the second quarter of 2025 to date and subject to the visibility we have today while waiting on clarity on the tariffs, we currently expect second quarter revenue to be similar to the first quarter of 2025. Operating expense for the first quarter 2025 declined 44% compared to the prior year's quarter, driven mainly by reductions in IT legal fees. We currently expect further reductions in legal costs in 2025 as we enter the final phase of litigation for current actions and the completion of the jury retrial in the first quarter. We ended the first quarter with cash and cash equivalents and restricted cash of $25.6 million compared to $34.6 million at the end of 2024 with minimal debt. With a $10 million working capital line of credit and approximately $74 million available on the equity line of credit, we continue to maintain significant financial flexibility and liquidity. As always, we manage the operational cash cycle very carefully with days in inventory improved by 32 days over last year, and the overall cash cycle improved by 54 days over last year's Q1. Operator, we are now ready for questions. Question and Answer Session Operator (Operator Instructions) Suji Desilva, Roth Capital. Suji Desilva Hi Chuck. Hi Gail. Maybe I'll start with the litigation question then move to the product ones. Maybe on the litigation side, Chuck, just correct me if this is wrong, but it sounds like there will be 28 days to file a motion that will be kind of right about now. And then the judge will rule on the case within 90 days. That sounds like July, August. At that point, I guess, Samsung has 30 days to appeal. I just want to make sure all that's right. And then I guess the question would be like, is there a reason that Samsung may not be able to appeal or they would absolutely be able to go through the appeal process? Chun Hong Yes, they've appealed before, now. They will appeal this time around, Suji. So -- but they've lost the case now multiple times, and we don't believe there is a path to a straight face reasonable argument that they can make to try to reverse the outcome. Suji Desilva Chuck, just to be clear, if that appeal process happens, how long would that take? Chun Hong That -- what you just said, the days that you went through, those dates are correct. And from that -- once the appellate process starts, it could be six months to a year. But I don't -- realistically, I think both parties believe that the license issue, the breach of contract issue, the two topics that were dispositioned by the District Court, that is likely very high probability that will not change. Suji Desilva Got it. Okay. And then just to switch over to the Micron case. Is there any reason the time frame would be different from what we've seen with the Samsung case or could it be compressed for any reason because it's the second one to follow? Any thoughts there would be helpful. Chun Hong No, it's -- so just to recap. There are two -- the cases we just talked about is the basic breach of contract license case, which determined that Samsung does not have a license. And then Samsung had two cases in the Eastern District of Texas, one for $303 million, which covered mostly AI memory, HBM and DDR5, that was the $303 million damages to the date of trial, which was April of 2023. And then the $118 million verdict that was last year that cover mostly DDR4 and some DDR5 memory. So those are now going through the appellate process. And then we have the $445 million verdict against Micron. That was also last year. And that is already -- and that also will be going through the appellate process. So once it's in the appellate pipeline, a lot of the briefings that go in, and it will take probably about a year for -- to reach oral hearings in front of the Federal Circuit Court of Appeals, at which point their decision will -- for all practical purposes is final because none of these cases will go to the Supreme Court. So those appeals, there's a bunch of them. There's all together maybe a dozen separate patents along with the three cases. Those will all see appeal to get in front of the appellate court and that panel starting later this year and on to next year. And so we finally, after some four, five years, will get to finality on these cases. Suji Desilva Right. I appreciate all that detail, Chuck, and your patience giving it. Thanks. So on the product side, you talked about some memory price increases. What kind of magnitude are you seeing? Are these sort of minimal bump-ups or are people trying to really kind of manage the supply situation aggressively? Chun Hong Yes, I think we've seen -- and it's been reported that April prices are up. They expect that it's low double digits. It will -- May, that is expected to go up. There is expected to be a separate tariff scheme to be introduced in May for semiconductors, although it's hard to know whether they'll follow through with that. If there are negotiations, things may change. There is some buying ahead, obviously, yeah, stocking ahead. On the other hand, demand, in general, is down. So especially with consumer PCs and laptops, AI servers, that continues to be relatively strong. So the spending on the AI front, the large investments that have been announced since last year by the big hyperscalers, they seem to be continuing to follow through with that. So therefore, the demand of how that impacts the semi world is obviously the GPUs and the HBMs. And HBM demand continues to remain robust, and that is expected to -- year to year growth has been significant. For example, hynix has gone from just a few million dollars' worth of HBM sales a few years ago to now on path to maybe doing $25 billion in HBM sales. So we expect to take advantage of that growth trend because we have several patents in the HBM area that have been asserted, and we continue to work on additional patents in that area. DDR5 also is AI memory, and that continues to grow as well, and we've got many patents in that area as well. Suji Desilva Yeah. Thanks. It's hard to remember when HBM was just a few million dollars. And so lastly, on looking ahead to your products for MRDIMM in the second half and exciting to see those coming. What do you think is the penetration among AI servers? What percent will be needing that level of performance? And then what's the content opportunity in those servers, if those questions -- or you can give any color there at this early juncture? Chun Hong Yeah. MRDIMM is -- so LRDIMM was the highest end memory module for the last 15, 20 years. But LRDIMM went end of life at DDR4. AI memory really starts at DDR5. And MRDIMM is the replacement for LRDIMM from a product category standpoint, MRDIMM is the highest capacity, highest performance memory. And we expect that to become 10% to 20% of the overall server memory market in the next couple of years, and MRDIMM will start to get it be adopted starting at the end of this year. NVIDIA AI servers will likely not use MRDIMM, but AMD and Intel servers, both enterprise servers and AI servers will adopt MRDIMM. Suji Desilva Thanks, Chuck. It'll be interesting to watch that. Appreciate all the color. Thanks. Chun Hong Thanks. Mike Smargiassi Thanks Suji. Operator This concludes our question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect.
Yahoo
06-05-2025
- Business
- Yahoo
Netlist Reports First Quarter 2025 Results
IRVINE, CA / ACCESS Newswire / May 6, 2025 / Netlist, Inc. (OTCQB:NLST) today reported financial results for the first quarter ended March 29, 2025. Recent Highlights: Revenue for the first quarter of 2025 was $29.0 million. Operating Expenses for the first quarter decreased by 39% to $11.1 million compared to $18.1 million for last year's first quarter. "First quarter results were in line with our expectations. The memory market remains poised for significant growth driven by the industry's transition to HBM and DDR5 memory for AI. Netlist is well-positioned to capitalize on this through new product development and its intellectual property portfolio," said Chief Executive Officer, C.K. Hong. Net sales for the first quarter ended March 29, 2025 were $29.0 million, compared to net sales of $35.8 million for the first quarter ended March 30, 2024. Gross profit for the first quarter ended March 29, 2025 was $1.3 million, compared to a gross profit of $0.7 million for the first quarter ended March 30, 2024. Net loss for the first quarter ended March 29, 2025 was ($9.5) million, or ($0.03) per share, compared to a net loss of ($17.0) million in the same period of prior year, or ($0.07) per share. These results include stock-based compensation expense of $1.0 million and $1.4 million for the quarters ended March 29, 2025 and March 30, 2024, respectively. As of March 29, 2025, cash, cash equivalents and restricted cash were $25.6 million, total assets were $32.4 million, working capital deficit was ($15.0) million, and stockholders' deficit was ($13.7) million. Conference Call Information C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, May 6, 2025 at 12:00 p.m. Eastern Time to review Netlist's results for the first quarter ended March 29, 2025. The live webcast and archived replay of the call can be accessed for 90 days in the Investors section of Netlist's website at About Netlist Netlist is a leading innovator in advanced memory and storage solutions. With a rich portfolio of patented technologies, Netlist's inventions are foundational to the advancement of AI which is revolutionizing computing. To learn more about Netlist, please visit Safe Harbor Statement This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release include, without limitation, statements about Netlist's ability to execute on its strategic initiatives, the results of pending litigations and Netlist's ability to successfully defend its intellectual property. Forward-looking statements are statements other than historical facts and often address future events or Netlist's future performance and reflect management's present expectations regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These risks, uncertainties and other factors include, among others: risks that Samsung will appeal the final orders by the trial court for the Samsung litigations, risks that Micron will appeal the final judgment by the trial court (appeals in general could cause a lengthy delay in Netlist's ability to collect damage awards, could overturn the verdicts or reduce the damages awards); risks that Netlist will suffer adverse outcomes in its litigation with Samsung, Micron or Google or in its various other active proceedings to defend the validity of its patents; risks related to Netlist's plans for its intellectual property, including its strategies for monetizing, licensing, expanding, and defending its patent portfolio; risks associated with patent infringement litigation initiated by Netlist, or by others against Netlist, as well as the costs and unpredictability of any such litigation; risks associated with Netlist's product sales, including the market and demand for products sold by Netlist and its ability to successfully develop and launch new products that are attractive to the market; the success of product, joint development and licensing partnerships; the competitive landscape of Netlist's industry; and general economic, political and market conditions, including the ongoing conflicts between Russia and Ukraine and Israel and Palestine, factory slowdowns and/or shutdowns, and changes in international tariff policies. All forward-looking statements reflect management's present assumptions, expectations and beliefs regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These and other risks and uncertainties are described in Netlist's Annual Report on Form 10-K for the fiscal year ended December 28, 2024 filed with the SEC on March 28, 2025, and the other filings it makes with the U.S. Securities and Exchange Commission from time to time, including any subsequently filed quarterly and current reports. In particular, you are encouraged to review the Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 that will be filed with the SEC for any revisions or updates to the information in this release. In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied on as predictions of future events. These forward-looking statements represent Netlist's assumptions, expectations and beliefs only as of the date they are made, and except as required by law, Netlist undertakes no obligation to revise or update any forward-looking statements for any reason.
Associated Press
27-03-2025
- Business
- Associated Press
Netlist Reports Full Year and Fourth Quarter 2024 Results
IRVINE, CA / ACCESS Newswire / March 27, 2025 / Netlist, Inc. (OTCQB:NLST) today reported financial results for the full year and fourth quarter ended December 28, 2024. Recent Highlights: Net sales for the full year of 2024 increased by 113% to $147.1 million compared to $69.2 million from the same period one year ago. Gross profit for the full year of 2024 increased by 21% to $2.9 million compared to $2.4 million from the same period one year ago. 'In 2024, Netlist delivered strong revenue growth and made significant progress in intellectual property enforcement. During the year Netlist won patent infringement jury trials against Micron and Samsung, bringing total damages awarded for the willful infringement of its patents to $866 million. As the market for advanced memory continues to expand, Netlist remains well-positioned for growth,' said Chief Executive Officer, C.K. Hong. Net sales for the fourth quarter ended December 28, 2024 were $34.3 million, compared to net sales of $33.4 million for the fourth quarter ended December 30, 2023. Gross profit for the fourth quarter ended December 28, 2024 was $0.3 million, compared to a gross profit of $1.2 million for the fourth quarter ended December 30, 2023. Net sales for the full year ended December 28, 2024 were $147.1 million, compared to net sales of $69.2 million for the full year ended December 30, 2023. Gross profit for the full year ended December 28, 2024 was $2.9 million, compared to a gross profit of $2.4 million for the full year ended December 30, 2023. Net loss for the fourth quarter ended December 28, 2024 was ($12.7) million, or ($0.05) per share, compared to a net loss of ($13.2) million in the same period of prior year, or ($0.05) per share. These results include stock-based compensation expense of $0.8 million and $0.9 million for the quarters ended December 28, 2024 and December 30, 2023, respectively. Net loss for the full year ended December 28, 2024 was ($53.8) million, or ($0.21) per share, compared to a net loss in the prior year period of ($60.4) million, or ($0.25) per share. These results include stock-based compensation expense of $4.4 million and $4.3 million for the full year ended December 28, 2024 and December 30, 2023, respectively. As of December 28, 2024, cash, cash equivalents and restricted cash were $34.6 million, total assets were $41.8 million, working capital deficit was ($7.3) million, and stockholders' deficit was ($6.0) million. Conference Call Information C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, March 27, 2025 at 12:00 p.m. Eastern Time to review Netlist's results for the full year and fourth quarter ended December 28, 2024. The live webcast and archived replay of the call can be accessed for 90 days in the Investors section of Netlist's website at About Netlist Netlist is a leading innovator in advanced memory and storage solutions. With a rich portfolio of patented technologies, Netlist's inventions are foundational to the advancement of AI which is revolutionizing computing. To learn more about Netlist, please visit Safe Harbor Statement This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release include, without limitation, statements about Netlist's ability to execute on its strategic initiatives, the results of pending litigation, including the second patent infringement jury trial against Samsung, and Netlist's ability to successfully defend its intellectual property. Forward-looking statements are statements other than historical facts and often address future events or Netlist's future performance and reflect management's present expectations regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These risks, uncertainties and other factors include, among others: risks that Samsung will appeal the final order by the trial court for the first Samsung litigation, that the second patent infringement litigation with Samsung may not result in a favorable result for the company, risks that Micron will appeal the final judgment by the trial court (appeals in general could cause a lengthy delay in Netlist's ability to collect damage awards, could overturn the verdicts or reduce the damages awards); risks that Netlist will suffer adverse outcomes in its litigation with Samsung, Micron or Google or in its various other active proceedings to defend the validity of its patents; risks related to Netlist's plans for its intellectual property, including its strategies for monetizing, licensing, expanding, and defending its patent portfolio; risks associated with patent infringement litigation initiated by Netlist, or by others against Netlist, as well as the costs and unpredictability of any such litigation; risks associated with Netlist's product sales, including the market and demand for products sold by Netlist and its ability to successfully develop and launch new products that are attractive to the market; the success of product, joint development and licensing partnerships; the competitive landscape of Netlist's industry; and general economic, political and market conditions, including the ongoing conflicts between Russia and Ukraine and Israel and Palestine, factory slowdowns and/or shutdowns. All forward-looking statements reflect management's present assumptions, expectations and beliefs regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These and other risks and uncertainties are described in Netlist's Quarterly Report on Form 10-Q for the quarter ended September 28, 2024 filed with the SEC on November 7, 2024, and the other filings it makes with the U.S. Securities and Exchange Commission from time to time, including any subsequently filed quarterly and current reports. In particular, you are encouraged to review the Company's Annual Report on Form 10-K for the year ended December 28, 2024 that will be filed with the SEC for any revisions or updates to the information in this release. In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied on as predictions of future events. These forward-looking statements represent Netlist's assumptions, expectations and beliefs only as of the date they are made, and except as required by law, Netlist undertakes no obligation to revise or update any forward-looking statements for any reason. Investor Relations Contacts: Mike Smargiassi (212) 739-6729 Gail M. Sasaki Netlist, Inc., Chief Financial Officer (949) 435-0025 NETLIST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 28, December 30, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 22,507 $ 40,445 Restricted cash 12,100 12,400 Accounts receivable, net 1,671 4,562 Inventories 2,744 12,031 Prepaid expenses and other current assets 733 441 Total current assets 39,755 69,879 Property and equipment, net 517 770 Operating lease right-of-use assets 1,101 1,590 Other assets 466 560 Total assets $ 41,839 $ 72,799 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 42,307 $ 39,831 Revolving line of credit 1,230 3,844 Accrued payroll and related liabilities 808 1,346 Deferred revenue 40 - Other current liabilities 2,675 2,569 Total current liabilities 47,060 47,590 Operating lease liabilities 641 1,213 Other liabilities 186 237 Total liabilities 47,887 49,040 Commitments and contingencies Stockholders' equity (deficit): Preferred stock - - Common stock 273 254 Additional paid-in capital 331,367 307,328 Accumulated deficit (337,688 ) (283,823 ) Total stockholders' equity (deficit) (6,048 ) 23,759 Total liabilities and stockholders' equity (deficit) $ 41,839 $ 72,799 NETLIST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended December 28, December 30, December 28, December 30, 2024 2023 2024 2023 Net sales $ 34,275 $ 33,433 $ 147,103 $ 69,205 Cost of sales(1) 34,021 32,279 144,219 66,812 Gross profit 254 1,154 2,884 2,393 Operating expenses: Research and development(1) 1,077 2,340 8,064 9,164 Intellectual property legal fees 9,555 9,664 37,958 42,572 Selling, general and administrative(1) 2,737 2,899 12,090 12,414 Total operating expenses 13,369 14,903 58,112 64,150 Operating loss (13,115 ) (13,749 ) (55,228 ) (61,757 ) Other income, net: Interest income, net 252 460 1,048 1,300 Other income, net 149 46 316 60 Total other income, net 401 506 1,364 1,360 Loss before provision for income taxes (12,714 ) (13,243 ) (53,864 ) (60,397 ) Provision for income taxes - - 1 1 Net loss $ (12,714 ) $ (13,243 ) $ (53,865 ) $ (60,398 ) Loss per common share: Basic and diluted $ (0.05 ) $ (0.05 ) $ (0.21 ) $ (0.25 ) Weighted-average common shares outstanding: Basic and diluted 270,089 253,547 259,904 244,118 (1) Amounts include stock-based compensation expense as follows: Cost of sales $ 17 $ 20 $ 99 $ 110 Research and development 110 184 908 875 Selling, general and administrative 677 715 3,429 3,352 Total stock-based compensation $ 804 $ 919 $ 4,436 $ 4,337
