Third quarter fiscal 2026 earnings call, November 10, 2026

Q3 miss traced to a single contract that grew in scope

QuickLogic reported Q3 revenue of $5.1 million, up 153% from a year earlier and down 6% from Q2, and below the midpoint of its guidance range. CEO Brian Faith attributed the shortfall "solely" to the customer for the follow-on $1 million contract targeting Intel 18A-P, which expanded the negotiation to include a storefront provision. Faith said the change delayed signing but "significantly expands the long-term revenue potential for QuickLogic and broadens our partnership with the customer." The company expects to finalize the contract and recognize IP revenue in Q4.

Management guided Q4 revenue to $8 million, plus or minus 10%, a 55% sequential increase. The guide comprises $7.3 million of new product revenue and $0.7 million of mature product revenue. It implies full-year 2026 revenue growth of 72%. Asked how much of the Q4 target depends on new deals, Faith said "about 5, let's say, a handful of contracts" need to close for revenue to contribute in the quarter. Because many are recognized ratably, only the ratable portion of each contract value would be booked in Q4, not the aggregate. He said "definitely north of $6 million" of Q4 revenue would be ratable-type contracts, including the government contract, and that management aims for at least a couple of million dollars of ratable IP revenue in every quarter of 2027.

Win-back from the former Flex Logix franchise and a new automotive win

Faith described a defense industrial base ASIC designer that had selected a competitor several years ago and has now approached QuickLogic to move to its eFPGA Hard IP for a new 22FDX design. Management sees a good chance of finalizing the contract in Q4. Faith identified the competitor as Flex Logix, whose assets were acquired by Analog Devices. This would be the second design QuickLogic has recaptured from it, after one last year.

Faith explained the reasoning: "FPGA technology is put into ASICs or SoCs because you want to be able to reprogram that capability into that chip for the foreseeable future, in some cases, decades. And so that means you're going to want to have a company that stands by the technology with the software and the support for those decades." He said that once Analog Devices bought the assets it became "effectively a captive technology," and that QuickLogic understands there were no long-term support agreements put in place. In his view, eFPGA Hard IP competition comes down to Flex Logix and QuickLogic.

On October 13, QuickLogic announced its first eFPGA Hard IP win in automotive and industrial robotics. The ASIC uses the IP for battery management and motor control, and will be fabricated on a 16-nanometer process common in automotive ICs. It is the first delivery of eFPGA Hard IP for that process, built with the proprietary Australis IP generator. Revenue is recognized ratably from Q4, with royalties once the ASIC is in production. The company also forecasts a contract award this quarter from a major U.S. fabless semiconductor company for a biomedical IC that uses the eFPGA for inference and signal processing in physical AI, again with ratable revenue from Q4 and royalties at production. Faith said QuickLogic has now developed eFPGA Hard IP for 9 unique fabrication processes.

Mature products: a new package opens a potentially $10 million market

Faith spent unusual time on the mature antifuse line, which generated $1.1 million in Q3. One defense industrial base customer has contracted with QuickLogic to fund and qualify smaller-package versions of existing devices for new designs. Samples are in-house and are expected to ship this quarter along with FPGA user tools and programming capability. Management believes this could become a new multimillion-dollar market requiring minimal ongoing operating investment, with initial revenue in the first half of 2027.

Responding to Craig-Hallum's Richard Shannon, who noted he had rarely asked about mature products, Faith said "we have internal models that show the mature product getting up to $10 million a year through some of these new wins because some of them are higher volume than what we've seen historically." He added that a customer helped fund the package because it sees a gap between its desire to use FPGA technology and the absence of an anti-fuse FPGA in a small enough package.

Government contract and the RadPro storefront transition

The U.S. government contract, raised last year to an $89 million ceiling, underpins Q4. QuickLogic forecasts a new tranche later in the quarter, with revenue recognition making up a significant percentage of Q4 revenue. Faith said the tranche will fund 2 device tape-outs in early 2027, which management believes will yield enough finished devices for initial production quantities through the storefront beginning in late 2027. He declined to detail what the tape-outs cover or the size of the tranche.

On timing, Faith acknowledged limited visibility: "we've always said we don't know when the next tranche is literally coming in until it comes in. It's a somewhat opaque process." He said the government has generally contracted on time over the past 4 years. He also stressed that the contract is for development and includes no device sales, which is why QuickLogic self-funded RadPro devices and dev kits so that evaluations with the defense industrial base are already underway before the transition to storefront devices.

Responding to Northland's Gus Richard, Faith indicated Q3 rad-hard contract revenue of about $3.4 million to $3.5 million, mature devices of $1.1 million, and the balance in eFPGA, with roughly $100,000 of new product device sales.

Chiplets and onshore nodes

QuickLogic has 5 active chiplet proposals targeting Intel 18A, Intel 18A-P and GlobalFoundries 12LP, and Faith expects traction to accelerate in 2027. He said the top 3 nodes drawing interest are 22FDX and 12LP at GlobalFoundries and 18A or 18A-P at Intel, as U.S. government investment in an onshore supply chain shifts "from infrastructure to chip designs and chiplet designs that would make use of that infrastructure." Offshore TSMC-based projects tend to be fully customer-funded.

On the $2.7 million ceiling contract announced May 13, test chips from GlobalFoundries 12LP are in assembly, and a 12LP eval kit compatible with common third-party development environments is scheduled for late Q4. QuickLogic is in final negotiations for a second phase that would take the contract value to within $50,000 of the ceiling. It would co-develop a 22FDX FPGA chiplet with YorChip, co-packaged with the 12LP test chip, to connect legacy silicon with newer devices. Faith described YorChip's technology as potentially making chiplet architectures "easier, less risk, lower cost," but said the concept must first be proven, and that the technology could extend to 90-nanometer or 65-nanometer nodes if demand exists. He said the YorChip project is the only one of the opportunities discussed with that partner.

Management expects storefront development of onshore-node chiplets to bring low 7-figure revenue in 2027, and said selling test chips in the second half would also likely be in the low 7-figure range. Some storefront products would be discrete FPGAs rather than chiplets. A prospective second architectural IP license is in a feasibility study that has been extended into early 2027, while an Intel 18A-P ASIC with the same customer is awaiting funding expected within 6 months.

Margins, costs and cash

Q3 non-GAAP gross margin was 41%, versus 46.8% in Q2 and negative 11.9% a year earlier, below outlook because of unfavorable fixed-cost absorption and a larger-than-expected allocation of R&D to cost of revenue. CFO Jim Sullivan guided Q4 gross margin to about 55%, plus or minus 5%, and full-year to 47%, plus or minus 5%. Q3 non-GAAP operating expenses were $3.3 million, and Q4 is guided to about $3.2 million. Full-year operating expenses are now seen at $13.3 million to $13.4 million, down from $13.7 million to $13.9 million, roughly 12% growth against 72% revenue growth.

The Q3 non-GAAP net loss was $1.3 million, or $0.07 per share. Q4 non-GAAP net income is guided to about $1.3 million, or $0.07 per share, and the company expects non-GAAP profitability for the second half. Net cash at quarter end was $14.2 million excluding a $5 million line of credit drawdown, up from $3.8 million at the end of 2025, including about $9.5 million of net ATM proceeds in the first half. Q3 cash benefited from payment timing that reversed in Q4, so Sullivan expects Q4 cash flow breakeven, full-year positive cash flow and year-end net cash of about $14.2 million.

Pipeline and 2027 outlook

Faith reiterated the aim of reliably reaching roughly $100 million in annual revenue against a $1 billion available market. He declined to give a pipeline value, saying "if I gave the number where they all come to fruition, nobody would believe me." He described "many tens of opportunities, all of which are high dollar value" across the government development contract, storefront, eFPGA IP and mature products, and called 2027 "a big marker" for revenue growth. QuickLogic is negotiating eFPGA Hard IP contracts in defense, aerospace, satellite, data center, biomedical and industrial applications, with several expected to contribute in the first half of 2027.