EVERSPIN TECHNOLOGIES INC.

Previous wording

Everspin is a pioneer in the successful commercialization of Magnetoresistive Random Access Memory (MRAM) technology. Our portfolio of MRAM technologies, including Toggle MRAM and Spin-transfer Torque MRAM (STT-MRAM), is delivering superior performance, persistence and reliability in non-volatile memories that transform how mission-critical data is protected against power loss. With over 15 years of MRAM technology and manufacturing leadership, our memory solutions deliver significant value to our customers in key markets such as industrial, medical, automotive/transportation, aerospace and data center. We are the leading supplier of discrete MRAM components and a successful licensor of our broad portfolio of related technology intellectual property.

Current wording

We are a pioneer in the successful commercialization of Magnetoresistive Random Access Memory (MRAM) technology. Our portfolio of MRAM technologies, including Toggle MRAM, Tunnel Magneto Resistance (TMR) Sensors, and Spin-transfer Torque MRAM (STT-MRAM), is delivering superior performance, persistence and reliability in non-volatile memories that transform how mission-critical data is protected against power loss. With almost 20 years of MRAM technology and manufacturing leadership, our memory solutions deliver significant value to our customers in key markets such as industrial, medical, automotive/transportation, aerospace and defense, and data center. We are the leading supplier of discrete MRAM components and a successful licensor of our broad portfolio of related technology and intellectual property.

Previous wording

We sell our products directly and through our established distribution channels to industry-leading OEMs and ODMs.

Current wording

We sell our products directly and through our established distribution channels to industry-leading original equipment manufacturers, original design manufacturers and contract manufacturers.

Previous wording

We manufacture our MRAM products using both captive and third-party manufacturing capabilities. We purchase industry-standard complementary metal-oxide semiconductor (CMOS) wafers from semiconductor foundries and perform back end of line (BEOL) processing that includes our magnetic-bit technology at our 200mm fabrication facility in Chandler, Arizona. We also manufacture full-flow 300mm CMOS wafers with our STT-MRAM magnetic-bit technology integrated in BEOL as part of our strategic relationship with GLOBALFOUNDRIES.

Current wording

We manufacture our MRAM products using both captive and third-party manufacturing capabilities. We purchase industry-standard complementary metal-oxide semiconductor (CMOS) wafers from semiconductor foundries and perform back end of line (BEOL) processing that includes our magnetic-bit technology at our leased 200mm fabrication facility in Chandler, Arizona. We also manufacture full-flow 300mm CMOS wafers with our STT-MRAM magnetic-bit technology integrated in BEOL as part of our strategic relationship with GLOBALFOUNDRIES Inc.

Previous wording

Adjusted net income. Our management and board of directors use Adjusted net income to assess and evaluate our overall performance and financial trends, inform the annual budgeting process, and guide both short-term and long-term operational and strategic planning. As such, we believe Adjusted net income provides meaningful insight for investors into our financial performance, consistent with how our management team and board view and analyze our results. Adjusted net income is a non-GAAP financial measure and should be considered alongside, but not as a replacement for or superior to, net income as reported in accordance with GAAP. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted net income for the periods presented:

Current wording

Adjusted net income. Our management and board of directors use adjusted net income to assess and evaluate our overall performance and financial trends, inform the annual budgeting process, and guide both short-term and long-term operational and strategic planning. As such, we believe adjusted net income provides meaningful insight for investors into our financial performance, consistent with how our management team and board of directors view and analyze our results. Adjusted net income is a non-GAAP financial measure and should be considered alongside, but not as a replacement for or superior to, net income as reported in accordance with GAAP. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to adjusted net income for the periods presented:

Previous wording

The following tables set forth our results of operations for the periods indicated:

Current wording

The following table sets forth our results of operations for the periods indicated:

Previous wording

We generated 86% and 84% of our revenue from products sold to distributors for the three months ended September 30, 2025 and 2024, respectively.

Current wording

We generated 90% and 60% of our revenue from products sold through distributors for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

In addition to selling our products to our distributors, we maintain a direct selling relationship, for strategic purposes, with several key customer accounts. We have organized our sales team and representatives into three primary regions: North America; EMEA; and APAC. We recognize revenue by geography based on the region in which our customer is located and to which our products are sold, and not to where the end products in which they are assembled are shipped. Our revenue by region and by type of revenue for the periods indicated were as follows (in thousands):

Current wording

We maintain a direct selling relationship, for strategic purposes, with several key customer accounts. We have organized our sales team and representatives into three primary regions: Asia-Pacific (APAC); North America; and Europe, Middle East and Africa (EMEA). We recognize revenue by geography based on the region in which our products are sold, and not where the end products in which they are assembled are shipped. Our revenue by region for the periods indicated was as follows (in thousands):

Previous wording

Total revenue increased by $2.0 million, or 16.3%, from $12.1 million during the three months ended September 30, 2024 to $14.1 million during the three months ended September 30, 2025. The increase was due to an increase in product sales of $2.2 million, and partially offset by a decrease of licensing, royalty, patent, and other revenue of $0.3 million.

Current wording

Total revenue increased by $1.7 million, or 13.2%, from $13.1 million during the three months ended March 31, 2025 to $14.9 million during the three months ended March 31, 2026. The increase was due to an increase in product sales of $3.1 million or 27.9%, and partially offset by a decrease in licensing, royalty, patent, engineering services and other revenue of $1.3 million.

Previous wording

Licensing, royalty, patent, and other revenue is a highly variable revenue item characterized by a small number of transactions annually with revenue based on size and terms of each transaction. Licensing, royalty, patent, and other revenue decreased by $0.3 million, or 17.0% from $1.7 million during the three months ended September 30, 2024, to $1.4 million during the three months ended September 30, 2025. Thedecrease was primarily due to the reduced pace of deliverables in our contractual agreements with customers for the development of RAD-Hard products, along with the conclusion of a contractual arrangement with a customer for the development of reliability models for strategic radiation hardened toggle MRAM, and partially offset by a new agreement for the development of an AI technology application.

Current wording

Licensing, royalty, patent, engineering services and other revenue is a highly variable revenue item characterized by a small number of transactions annually with revenue based on size and terms of each transaction. We estimate royalty revenue earned throughout the year, with an annual adjustment recognized for actual sales in the first quarter of each fiscal year. Licensing, royalty, patent, engineering services and other revenue decreased by $1.3 million, or 63.4% from $2.1 million during the three months ended March 31, 2025, to $0.8 million during the three months ended March 31, 2026. The decrease was primarily due to the conclusion of an agreement for the development of an AI technology application.

Previous wording

Cost of product sales increased by$0.9 million, or 15.2%, from$5.8 million during the three months ended September 30, 2024, to$6.6 million during the three months ended September 30, 2025. Cost of product sales relate primarily to costs of our toggle and STT products.

Current wording

Cost of product sales increased by$0.9 million, or 15.4%, from$6.0 million during the three months ended March 31, 2025, to$7.0 million during the three months ended March 31, 2026. Cost of product sales relate primarily to costs of our Toggle and STT products and have increased consistently and proportionately with the increase in revenues.

Previous wording

Cost of licensing, royalty, patent, and other revenue slightly decreased by $0.2 million, or 42.1% from $0.4 million during the three months ended September 30, 2024, to $0.2 million during the three months ended September 30, 2025. The decrease was primarily due to a decrease in licensing costs related to labor and materials associated with the progression of our RAD-Hard projects.

Current wording

Cost of licensing, royalty, patent, engineering services and other revenue decreased by $0.3 million, or 79.2%, from $0.4 million during the three months ended March 31, 2025, to $0.1 million during the three months ended March 31, 2026. The decrease was primarily due to a decrease in licensing costs related to labor and materials associated with the development of an AI technology application.

Previous wording

Gross margin increased from 49.2% during the three months ended September 30, 2024, to 51.3% during the three months ended September 30, 2025. Gross margin increased as a result of improved yields and improved fabrication facility ("Fab") utilization.

Current wording

Gross margin increased from 51.4% during the three months ended March 31, 2025, to 52.7% during the three months ended March 31, 2026. Gross margin increased as a result of the different revenue mix and yield improvements.

Previous wording

Our operating expenses consist of research and development, general and administrative and sales and marketing expenses. Personnel-related expenses, including salaries, benefits, bonuses and stock-based compensation, are among the most significant components of each of our operating expense categories.

Current wording

Our operating expenses consist of research and development, general and administrative and sales and marketing expenses. Personnel-related expenses, including salaries, benefits, bonuses and stock-based compensation, are among the most significant component of each of our operating expense categories.

Previous wording

Research and Development Expenses. Research and development expenses increased by$0.2 million, or 5.9%, from$3.4 million during the three months ended September 30, 2024, to$3.6 million during the three months ended September 30, 2025. Research and development expenses relate primarily to the development and enhancement of our new Extended Serial Peripheral Interface (xSPI) family of STT-MRAM products, which offer high-performance, multiple I/O, SPI-compatibility and feature a high-speed, low pin count SPI compatible interface.

Current wording

Research and Development Expenses. Research and development expenses increased by$0.2 million, or 7.4%, from$3.4 million during the three months ended March 31, 2025, to$3.6 million during the three months ended March 31, 2026. Theresearch and development expenses increase relates primarily to higher compensation costs and contract labor.

Previous wording

General and Administrative Expenses. General and administrative expenses increased by $0.3 million, or 9.7%, from $3.4 million during the three months ended September 30, 2024, to $3.7 million during the three months ended September 30, 2025. The increase is primarily due to increases in professional service fees.

Current wording

General and Administrative Expenses. General and administrative expenses increased by $1.2 million, or 31.9%, from $3.8 million during the three months ended March 31, 2025, to $5.1 million during the three months ended March 31, 2026. The increase is primarily due to the litigation costs related to the patent infringement lawsuit described in Note 5 to our condensed financial statements included in Item 1 of this report.

Previous wording

Sales and Marketing Expenses. Sales and marketing expenses increased by $0.2 million, or 12.0%, from $1.3 million during the three months ended September 30, 2024, to $1.5 million during the three months ended September 30, 2025. Sales and marketing expenses relate primarily to compensation costs and contract labor.

Current wording

Sales and Marketing Expenses. Sales and marketing expenses increased by $0.4 million, or 27.0%, from $1.5 million during the three months ended March 31, 2025, to $1.9 million during the three months ended March 31, 2026. The increase is sales and marketing expenses relates primarily to higher compensation costs and contract labor.

Previous wording

Interest income decreased by $31,000, or 6.7%, from $0.5 million interest income during the three months ended September 30, 2024, to $0.4 million interest income during the three months ended September 30, 2025. The decrease is primarily due to the decrease in interest rates.

Current wording

Interest income slightly decreased by $0.1 million, or 22.3%, from $0.4 million during the three months ended March 31, 2025, to $0.3 million during the three months ended March 31, 2026. The decrease is primarily due to the decrease in interest rates.

Previous wording

Other income, net decreased by $2.8 million, or 70.4%, from $3.9 million other expense during the three months ended September 30, 2024, to $1.2 million other income during the three months ended September 30, 2025. Other income relates primarily to other income recognized from a strategic award we received to develop a long-term plan to provide manufacturing services for aerospace and defense segments.

Current wording

Other income, net increased by $1.7 million, or 442.8%, from $0.4 million during the three months ended March 31, 2025, to $2.1 million during the three months ended March 31, 2026. Other income relates primarily to other income recognized from a strategic award we received to develop a long-term plan to provide manufacturing services for aerospace and defense segments.

Previous wording

As of September 30, 2025, we had $45.3 million of cash and cash equivalents, compared to $42.1 million as of December 31, 2024. We believe our cash and cash equivalents are sufficient to meet our anticipated capital requirements in the next 12 months. Our long-term capital requirements will depend on many factors, including, among other things, our growth rate, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products.

Current wording

As of March 31, 2026, we had $40.5 million of cash and cash equivalents, compared to $44.5 million as of December 31, 2025. We believe our cash and cash equivalents are sufficient to meet our anticipated capital requirements in the next 12 months. Our long-term capital requirements will depend on many factors, including, among other things, our growth rate, the timing and extent of our spending to support our current and future manufacturing requirements, research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products.

Previous wording

During thenine months ended September 30, 2025, cash provided by operating activities was$7.3 million, which consisted of net loss of$1.8 million, non-cash charges of$6.9 millionand changes of net operating assets and liabilities of$2.2 million. The non-cash charges consisted of stock-based compensation of$4.4 million and depreciation and amortization of$2.6 million. The change in our net operating assets and liabilities was primarily due toa decrease in accounts receivable of $3.0 million, an increase in deferred revenue of $0.9 million, an increase in accrued liabilities of $0.5 million, an increase in contract obligation of $0.5 million, a decrease in prepaid and other current assets of $0.4 million, an increase in long-term income tax liability of $0.1 million, offset by an increase in inventory of $2.7 million and a decrease in accounts payable of $0.6 million.

Current wording

During thethree months ended March 31, 2026, cash provided by operating activities was$0.6 million, which consisted of net loss of$0.3 million, non-cash charges of$2.0 millionand changes of net operating assets and liabilities of$1.1 million. The non-cash charges primarily consisted of stock-based compensation of$1.3 million, depreciation and amortization of$0.7 million. The change in our net operating assets and liabilities was primarily due toan increase in accounts payable of$1.6 million, an increase in accrued liabilities of $0.9 million, offset byan increase in accounts receivable of $2.1 million, a decrease in contract obligation of $1.2 million, andan increase in inventory of $0.5 million.

Previous wording

During thenine months ended September 30, 2024, cash provided by operating activities was$3.3 million, which consisted of net loss of$0.4 million, non-cash charges of $6.3 million and changes of net operating assets and liabilities of$2.6 million. The non-cash charges primarily consisted of stock-based compensation of$5.1 million, depreciation and amortization of$1.2 million. The change in our net operating assets and liabilities was primarily due to an increase in accounts payable of$0.2 million, an increase in contract obligations of$3.0 million, an increase in prepaid and other current assets of$3.6 million, a decrease in accounts receivable of$0.1 million due to timing of cash receipts for outstanding balances, and a decrease in accrued liabilities of$2.2 million.

Current wording

During thethree months ended March 31, 2025, cash provided by operating activities was$1.4 million, which consisted of net loss of$1.2 million, non-cash charges of $2.4 million and changes of net operating assets and liabilities of$0.2 million. The non-cash charges primarily consisted of stock-based compensation of$1.6 million, depreciation and amortization of$0.8 million. The change in our net operating assets and liabilities was primarily due to an increase in accounts payable of$1.1 million, an increase in deferred revenue of$1.1 million, an increase in contract obligations of$0.6 million, a decrease in prepaid expenses and other current assets of$0.2 million, offset byan increase in inventory of$1.9 million, and an increase in accounts receivable of$0.8 million.

Previous wording

Cash used in investing activities during the nine months ended September 30, 2025 was $4.7 million due to $3.2 million of purchases of manufacturing equipment and $1.5 million in purchases of intangible assets.

Current wording

Cash used in investing activities during the three months ended March 31, 2026 was $4.8 million primarily due to $4.4 million in purchases of manufacturing equipment and $0.5 million in purchase of intangible assets.

Previous wording

Cash used in investing activities during the nine months ended September 30, 2024 was $1.3 million, reflecting purchases of manufacturing equipment.

Current wording

Cash used in investing activities during the three months ended March 31, 2025 was $1.4 million primarily due to $0.9 million in purchases of manufacturing equipment and $0.5 million in purchase of intangible assets.

Previous wording

Cash provided by financing activities during the nine months ended September 30, 2024 was $0.7 million, consisting of proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan.

Current wording

Cash provided by financing activities during the three months ended March 31, 2026 was $0.3 million, consisting of proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan, offset by payments of finance leases.

Previous wording

Cash provided by financing activities during the nine months ended September 30, 2025 was $0.6 million, primarily due to proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan offset by a nominal amount in payments on finance leases.

Current wording

Cash provided by financing activities during the three months ended March 31, 2025 was $0.01 million, consisting of proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan, offset by payments of finance leases.