Everspin Technologies, Inc. (MRAM) Bundle
Understanding Everspin Technologies, Inc. (MRAM) Revenue Streams
Understanding Everspin Technologies, Inc.’s Revenue Streams
The financial performance of Everspin Technologies, Inc. is significantly influenced by its diverse revenue streams. The company's revenue is primarily derived from two key sources: product sales, which include both Toggle and STT-MRAM, and licensing, royalty, patent, and other revenue.
Breakdown of Primary Revenue Sources
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Year-over-Year Change (%) |
|---|---|---|---|
| Product Sales | $10,443 | $13,543 | -22.2% |
| Licensing and Other Revenue | $1,650 | $2,923 | -43.5% |
| Total Revenue | $12,093 | $16,466 | -26.4% |
Year-over-Year Revenue Growth Rate
Everspin’s total revenue for Q3 2024 was $12.1 million, representing a 26.4% decrease from $16.5 million in Q3 2023. This decline is attributed to a significant drop in both product sales and licensing revenues.
Contribution of Different Business Segments to Overall Revenue
In Q3 2024, product sales accounted for approximately 86.3% of total revenue, while licensing and other revenues contributed around 13.7%. This indicates a heavy reliance on product sales for revenue generation.
Analysis of Significant Changes in Revenue Streams
The year-over-year decline in product sales from $13.5 million in Q3 2023 to $10.4 million in Q3 2024 reflects challenges in market demand and competition. Similarly, licensing revenue decreased from $2.9 million to $1.7 million, indicating a need for the company to enhance its licensing agreements and explore new partnerships.
For the nine months ended September 30, 2024, total revenue was $37.2 million, compared to $47.1 million for the same period in 2023, marking a -21.1% decline.
| Revenue Breakdown | 9 Months 2024 Revenue (in thousands) | 9 Months 2023 Revenue (in thousands) | Year-over-Year Change (%) |
|---|---|---|---|
| Product Sales | $31,190 | $40,726 | -23.4% |
| Licensing and Other Revenue | $5,969 | $6,333 | -5.8% |
| Total Revenue | $37,159 | $47,059 | -21.1% |
The significant changes in revenue streams highlight the need for strategic adjustments to improve performance and regain growth momentum in the upcoming quarters.
A Deep Dive into Everspin Technologies, Inc. (MRAM) Profitability
A Deep Dive into Everspin Technologies, Inc.'s Profitability
Gross Profit Margin
For the third quarter of 2024, the gross profit was $5.952 million, with a gross margin of 49.2%. This reflects a decrease from 60.2% in the same quarter of 2023. The total revenue for Q3 2024 was $12.093 million, compared to $16.466 million in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $12.093 million | $16.466 million |
| Gross Profit | $5.952 million | $9.919 million |
| Gross Margin | 49.2% | 60.2% |
Operating Profit Margin
The operating loss for Q3 2024 was ($2.115 million), representing an operating margin of (17.5%). This contrasts with an operating income of $1.979 million and an operating margin of 12.0% in Q3 2023.
Net Profit Margin
Net income for the third quarter of 2024 was $2.271 million, leading to a net profit margin of 18.8%. In comparison, the net income for Q3 2023 was $2.438 million, with a net profit margin of 14.8%.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $2.271 million | $2.438 million |
| Net Profit Margin | 18.8% | 14.8% |
Trends in Profitability Over Time
Over the first nine months of 2024, total revenue was $37.159 million, down from $47.059 million in the same period of 2023. The net loss for the nine months ended September 30, 2024, was ($433,000), compared to a net income of $7.084 million for the same period in 2023.
Comparison with Industry Averages
The industry average gross margin for semiconductor companies is approximately 50%-60%. Everspin’s current gross margin of 49.2% is slightly below this average, indicating potential challenges in cost management or pricing strategies.
Operational Efficiency Analysis
Total operating expenses for Q3 2024 were $8.067 million, up from $7.940 million in Q3 2023. This increase was primarily driven by higher research and development expenses, which were $3.384 million compared to $2.659 million in the previous year.
| Operating Expenses Breakdown | Q3 2024 | Q3 2023 |
|---|---|---|
| Research and Development | $3.384 million | $2.659 million |
| General and Administrative | $3.363 million | $3.933 million |
| Sales and Marketing | $1.320 million | $1.348 million |
| Total Operating Expenses | $8.067 million | $7.940 million |
The adjusted EBITDA for Q3 2024 was $4.215 million, up from $4.006 million in Q3 2023, indicating improved operational efficiency despite the revenue decline.
Debt vs. Equity: How Everspin Technologies, Inc. (MRAM) Finances Its Growth
Debt vs. Equity: How Everspin Technologies Finances Its Growth
The financial structure of Everspin Technologies, Inc. reveals a balanced approach to leveraging both debt and equity in financing its growth. As of September 30, 2024, the company reports the following debt levels:
- Short-term Debt: $1.29 million in lease liabilities (current portion).
- Long-term Debt: $3.668 million in lease liabilities (net of current portion).
- Total Liabilities: $13.327 million.
Everspin’s debt-to-equity ratio stands at approximately 0.22, calculated as:
| Total Debt | Total Equity | Debt-to-Equity Ratio |
|---|---|---|
| $13.327 million | $59.274 million | 0.22 |
This ratio is significantly below the industry average of 0.5, indicating a conservative leverage strategy compared to peers in the semiconductor industry, which typically ranges from 0.5 to 1.0.
In terms of recent financing activities, Everspin has not reported any new debt issuances in 2024. The company has maintained a strong credit position, with no outstanding interest expenses recorded for the third quarter of 2024. The absence of interest-bearing debt reflects a commitment to minimizing financial risk while focusing on operational growth.
To illustrate the balance between debt financing and equity funding, the following table summarizes the equity structure:
| Equity Component | Amount (in millions) |
|---|---|
| Common Stock | $0.002 million |
| Additional Paid-in Capital | $197.355 million |
| Accumulated Deficit | ($138.083 million) |
| Total Stockholders’ Equity | $59.274 million |
This equity structure supports Everspin’s strategic initiatives to fund research and development, essential for long-term growth in the competitive memory solutions market. The company’s ability to finance operations through equity allows for greater flexibility and less reliance on external debt, fostering a stable financial environment for future projects.
Assessing Everspin Technologies, Inc. (MRAM) Liquidity
Assessing Everspin Technologies, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
Current Assets: $64,021,000
Current Liabilities: $9,497,000
Current Ratio = Current Assets / Current Liabilities = 6.74
Quick Ratio: The quick ratio is calculated excluding inventory:
Quick Assets = Current Assets - Inventory = $64,021,000 - $8,441,000 = $55,580,000
Quick Ratio = Quick Assets / Current Liabilities = 5.86
Analysis of Working Capital Trends
Working Capital = Current Assets - Current Liabilities
As of September 30, 2024:
Working Capital = $64,021,000 - $9,497,000 = $54,524,000
Comparatively, as of December 31, 2023:
Working Capital = $57,879,000 - $8,778,000 = $49,101,000
Working Capital Trend: Increase of $5,423,000 from December 31, 2023, to September 30, 2024.
Cash Flow Statements Overview
Condensed Cash Flow from Operating Activities:
| Cash Flow Component | Q3 2024 (In thousands) | Q3 2023 (In thousands) |
|---|---|---|
| Net (loss) income | $(433) | $7,084 |
| Depreciation and amortization | $1,197 | $905 |
| Stock-based compensation | $5,108 | $3,700 |
| Net cash provided by operating activities | $3,266 | $11,086 |
Cash Flows from Investing Activities:
| Cash Flow Component | Q3 2024 (In thousands) | Q3 2023 (In thousands) |
|---|---|---|
| Purchases of property and equipment | $(1,302) | $(1,080) |
| Net cash used in investing activities | $(1,302) | $(1,065) |
Cash Flows from Financing Activities:
| Cash Flow Component | Q3 2024 (In thousands) | Q3 2023 (In thousands) |
|---|---|---|
| Net cash provided by (used in) financing activities | $678 | $(1,882) |
Potential Liquidity Concerns or Strengths
Cash and Cash Equivalents: As of September 30, 2024, cash and cash equivalents stand at $39,588,000, an increase from $36,946,000 at December 31, 2023.
Net Increase in Cash: For the nine months ended September 30, 2024, the net increase in cash and cash equivalents is $2,642,000.
Debt Obligations: Total liabilities as of September 30, 2024, are $13,327,000, with no outstanding long-term debt.
This financial position indicates strong liquidity and a solid ability to meet short-term obligations, with no immediate liquidity concerns evident at this time.
Is Everspin Technologies, Inc. (MRAM) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is crucial for investors to determine whether the stock is overvalued or undervalued. In this section, we will analyze Everspin Technologies, Inc. through various financial metrics and stock performance indicators.
Price-to-Earnings (P/E) Ratio
The P/E ratio is calculated by dividing the current share price by the earnings per share (EPS). As of the latest financial reporting, the diluted EPS for the third quarter of 2024 is $0.10 . The stock price as of October 30, 2024, was approximately $3.00. Therefore, the P/E ratio is:
P/E Ratio = Stock Price / EPS = $3.00 / $0.10 = 30.0
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. As of September 30, 2024, the total stockholders' equity was $59.274 million and the total shares outstanding were 21,833,041 . The book value per share is calculated as:
Book Value per Share = Total Stockholders' Equity / Total Shares Outstanding = $59.274 million / 21,833,041 = $2.71
The P/B ratio is:
P/B Ratio = Stock Price / Book Value per Share = $3.00 / $2.71 = 1.11
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is calculated by dividing the enterprise value by the EBITDA. The enterprise value can be estimated as market capitalization plus total liabilities minus cash. Assuming a market capitalization of $65.5 million (based on the stock price and shares outstanding), and total liabilities of $13.327 million , the calculation is as follows:
Enterprise Value = Market Capitalization + Total Liabilities - Cash = $65.5 million + $13.327 million - $39.588 million = $39.239 million
Adjusted EBITDA for Q3 2024 is $4.215 million . Thus, the EV/EBITDA ratio is:
EV/EBITDA = Enterprise Value / Adjusted EBITDA = $39.239 million / $4.215 million = 9.31
Stock Price Trends
Over the last 12 months, the stock price has shown fluctuating trends. The stock was trading at approximately $3.00 in October 2024, down from a high of about $5.00 in December 2023. The following table summarizes the stock price trends over the last year:
| Date | Stock Price |
|---|---|
| October 2024 | $3.00 |
| July 2024 | $4.50 |
| April 2024 | $4.00 |
| January 2024 | $5.00 |
| October 2023 | $4.00 |
Dividend Yield and Payout Ratios
Currently, the company does not pay a dividend, resulting in a dividend yield of 0%. Therefore, the payout ratio is also not applicable.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a mixed outlook on the stock valuation. Current ratings are as follows:
- Buy: 2 analysts
- Hold: 3 analysts
- Sell: 1 analyst
Overall, the average target price set by analysts is approximately $3.50, which suggests a potential upside from the current trading price of $3.00.
Key Risks Facing Everspin Technologies, Inc. (MRAM)
Key Risks Facing Everspin Technologies, Inc.
The financial health of Everspin Technologies, Inc. is influenced by various internal and external risks. These risk factors can significantly impact the company's performance and investor confidence.
Industry Competition
As a leading developer and manufacturer of magnetoresistive random access memory (MRAM), Everspin faces intense competition from both established players and new entrants in the semiconductor industry. The market for non-volatile memory solutions is rapidly evolving, and competitors may introduce advanced technologies that could diminish Everspin's market share.
Regulatory Changes
Changes in regulations affecting the semiconductor industry can pose risks. Compliance with environmental regulations, export controls, and trade tariffs can increase operational costs. Everspin must navigate these complexities to maintain its competitive edge.
Market Conditions
Fluctuations in market demand for semiconductor products can impact revenue. For instance, the company experienced a decline in total revenue from $47.1 million in the first nine months of 2023 to $37.2 million in the same period of 2024. Such market volatility can hinder growth and profitability.
Operational Risks
Operational risks include challenges in supply chain management and production capacity. Everspin reported a gross margin of 49.2% in Q3 2024, down from 60.2% in Q3 2023. This decline indicates potential inefficiencies or rising costs that could affect profitability.
Financial Risks
Financial risks encompass liquidity and credit risks. As of September 30, 2024, Everspin had total liabilities of $13.3 million against total stockholders' equity of $59.3 million, indicating a manageable debt level. However, any adverse changes in cash flow could strain financial stability.
Strategic Risks
Strategic risks involve the company's ability to innovate and adapt to market changes. Everspin's reliance on new product development and successful design wins is critical for future revenue. The company anticipates revenue between $12 million and $13 million for Q4 2024, reflecting its ongoing efforts to capture market opportunities.
Mitigation Strategies
To address these risks, Everspin has implemented various strategies, including:
- Investment in R&D: Allocating $10.3 million to research and development in the first nine months of 2024 to foster innovation.
- Cost Management: Maintaining control over operating expenses, which totaled $24.9 million in the first nine months of 2024.
- Strengthening Supply Chain: Enhancing partnerships with suppliers to ensure stability and efficiency.
Financial Summary
| Financial Metric | 2023 (9 Months) | 2024 (9 Months) |
|---|---|---|
| Total Revenue | $47.1 million | $37.2 million |
| Gross Margin | 60.2% | 49.2% |
| Operating Expenses | $24.9 million | $24.9 million |
| Net Income (Loss) | $7.1 million | $(0.4) million |
| Total Assets | $67.3 million | $72.6 million |
| Total Liabilities | $13.4 million | $13.3 million |
| Stockholders' Equity | $53.9 million | $59.3 million |
Future Growth Prospects for Everspin Technologies, Inc. (MRAM)
Future Growth Prospects for Everspin Technologies, Inc.
Analysis of Key Growth Drivers
The company is positioned for growth through several key drivers, including product innovations, market expansions, and strategic partnerships.
- Product Innovations: The introduction of the PERSYST xSPI STT-MRAM products is expected to drive significant revenue contributions beginning in 2025.
- Market Expansions: Targeting the industrial IoT and data center markets, which have increasing demands for non-volatile memory solutions.
- Strategic Partnerships: New contracts secured in Q3 2024 indicate strong business relationships that could enhance market share.
Future Revenue Growth Projections and Earnings Estimates
For Q4 2024, the company expects total revenue between $12 million and $13 million. The GAAP net income per diluted share is projected to be between $0.00 and $0.05.
| Period | Revenue ($M) | Net Income per Diluted Share |
|---|---|---|
| Q3 2024 | 12.1 | 0.10 |
| Q4 2024 (Projected) | 12 - 13 | 0.00 - 0.05 |
| Q3 2023 | 16.5 | 0.11 |
Strategic Initiatives or Partnerships that May Drive Future Growth
The company’s focus on converting design wins into revenue through its extensive product portfolio is a crucial strategic initiative. The management has indicated meaningful customer interactions which are likely to result in additional contracts.
Competitive Advantages that Position the Company for Growth
Key competitive advantages include:
- Industry Leadership: As a leading developer of magnetoresistive RAM (MRAM), the company has a strong market presence.
- Technological Expertise: Continuous research and development efforts, with R&D expenses of $10.3 million for the nine months ended September 30, 2024.
- Strong Financial Position: Cash and cash equivalents at the end of Q3 2024 were $39.6 million.
Everspin Technologies, Inc. (MRAM) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Everspin Technologies, Inc. (MRAM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Everspin Technologies, Inc. (MRAM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Everspin Technologies, Inc. (MRAM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.