Revenue: Q1 revenue was reported at $117.9 million, exceeding expectations. Product revenue stood at $50.4 million, driven primarily by memory interface chips. Royalty revenue accounted for $47.5 million, and contract and other revenue was $20 million.
Operating Costs: Total operating costs, including cost of goods sold for Q1, were $74.2 million. Operating expenses amounted to $53.7 million.
Net Income: Non-GAAP net income for the quarter reached $37.4 million.
Gross Margin: For product revenues, a gross margin of approximately 61% was reported for Q1.
Future Guidance
Revenue: For Q2, revenue is expected to be between $130 million and $136 million, with royalty revenue projected between $55 million and $61 million and licensing billings between $61 million and $67 million.
Operating Costs: Q2 non-GAAP total operating costs, which include COGS, expected to range between $80 million and $76 million.
Net Income: Non-GAAP operating results for Q2 are anticipated to be between a profit of $50 million and $60 million.
Capital Expenditures: Expected CapEx for Q2 is approximately $13 million.
Earnings per Share: The non-GAAP earnings per share for Q2 are projected between $0.38 and $0.45.
Trends, Market Conditions, Sentiment
The company continues disciplined execution with a strategic focus on traditional and AI servers, witnessing solid growth and healthy demand across its product lines.
There’s a keen emphasis on innovations in DDR5 memory and power management integrated circuits (PMICs), highlighting advancements in memory performance for data centers and AI applications.
Market conditions signal a modest recovery in DDR4 following inventory digestion, with a bullish outlook on DDR5 adoption due to its critical role in supporting emerging AI and high-performance workloads.
The sentiment from the earnings call was optimistic, emphasizing strong execution, growth in silicon IP, and expanding market opportunities especially in sectors requiring high memory performance and advanced security solutions.
Notable Quotes
Luc Seraphin: “We are pleased with the execution for the first half of this year. We had solid results in Q1, and we expect growth into Q2.”
Desmond Lynch: “We are performing very well in Q2… we do expect to see sequential growth on our silicon IP business as we move throughout the year.”
Luc Seraphin on PMIC Strategy: “Given our heritage and mission to advance memory performance, we identified power management as a critical technology… intercepting the market with leadership products to address the need.”
Luc Seraphin: “As AI expands from training to insurance, increasing demands and performance will extend beyond servers to client systems and drive the need for new PMIC solutions tailored for emerging use cases and form factors.”
