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Date

May 12, 2026, at 5:30 p.m. ET

Call participants

  • President and Chief Executive Officer — Brian C. Faith
  • Senior Vice President and Chief Financial Officer — Elias N. Nader

Takeaways

  • Total revenue -- $5.1 million, up 16.5% year over year and 35.3% sequentially from Q4 2025.
  • New product revenue -- $4.3 million, increasing 14.2% year over year and 50.7% sequentially from Q4 2025.
  • Mature product revenue -- $800,000, rising 31.7% year over year and declining 14.2% sequentially from Q4 2025.
  • Non-GAAP gross margin -- 39.6%, below the outlook range of 45% ±5% due to $300,000 in inventory reserves offset by a $198,000 reversal.
  • Non-GAAP operating expenses -- $3.3 million, compared to $3 million year over year and $3.5 million in Q4 2025.
  • Non-GAAP net loss -- $1.3 million, or $0.08 per share, versus $1.1 million ($0.07/share) year over year and $2.8 million ($0.17/share) in Q4 2025.
  • Net cash position -- $6 million at quarter end, up from $3.8 million in Q4 2025, including $3.2 million raised via ATM program.
  • Q2 revenue guidance -- $6 million ±10%, with $5.2 million expected from new products and $800,000 from mature products.
  • Q2 non-GAAP gross margin guidance -- Approximately 42% ±5% based on revenue mix.
  • Q2 non-GAAP operating expense guidance -- $3.3 million ±5%.
  • Q2 non-GAAP net loss guidance -- Approximately $800,000, or about $0.04 per share.
  • 2026 revenue growth target -- Management reiterated a goal of 50%-100% year-over-year revenue growth, with year-to-date plus Q2 guidance making up about 80% of fiscal 2025 revenue.
  • 2026 full-year non-GAAP gross margin outlook -- Modeled at 57%, with anticipated higher margin product mix in the second half.
  • RadPro FPGA milestone -- RadPro FPGA and development kit introduced, with test chips demonstrated and dev kits shipped to multiple customers, contributing a low-6-figure amount to Q2 revenue.
  • MOU signed for RadPro chiplet application -- A memorandum of understanding is in place with one defense industrial base (DIB) customer to accelerate mutual evaluation of RadPro chiplet integration.
  • Intel 18A progress -- Four contracts awarded totaling nearly $2 million; additional mid-6-figure contract anticipated this year for high-density architecture work.
  • Seven-figure DIB contract -- New 7-figure contract finalized last week with a DIB customer, set to contribute to Q2 revenue and resulting in test chips for evaluation kits scheduled for late 2026.
  • Commercial Intel 18A contract update -- Expected award timing shifted from late Q2 to Q3 as the customer considers expanding eFPGA core size and functionality; contract projected at several million dollars.
  • Storefront model update -- Management clarified storefront revenue recognition aligns with traditional device sales, with gross margins historically modeled in the mid-60% range.
  • ATM activity -- $6.4 million in net proceeds raised during Q2 using the ATM; no additional sales expected for the remainder of 2026.
  • Credit line revision -- New banking agreement reduced credit line to $10 million, resulting in lower borrowing costs.

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Risks

  • Non-GAAP gross margin shortfall -- "Non GAAP gross margin in Q1 was 39.6%. This was below our outlook of 45% plus or minus 5%. The shortfall was due to inventory reserves of about $298,000."
  • Contract award timing uncertainty -- "The timing of funding remains uncertain" for certain DIB contracts and contribution to future revenue depends on customer evaluations and potential contract expansions.

Summary

QuickLogic Corp. (QUIK 7.78%) reported double-digit revenue growth both year over year and sequentially, supported by strong new product performance and key contract wins with defense and commercial customers. Newly launched RadPro FPGA dev kits are already generating multiple customer shipments and have diversified customer engagement beyond a single account. A recently signed seven-figure DIB contract, finalized after the quarter, shifts revenue recognition into Q2 and extends recognition through Q1 2027, influencing near-term results but not altering the full-year guidance. The anticipated commercial Intel 18A contract is now forecast for Q3, with the customer evaluating increased programmable flexibility. Storefront business, expected to scale and supplement IP and services revenue, is projected to build predictability and higher gross margins as repeatable product shipments grow.

  • Management confirmed a strong backlog, with Q1 and guided Q2 revenue totaling approximately 80% of prior year revenue, positioning the company toward the lower end of its 50%-100% full-year growth objective.
  • Gross margins are expected to recover in the second half, driven by mix shift toward higher-margin IP and devices over lower-margin services and professional engagements.
  • The company raised $6.4 million in Q2 using its ATM facility and negotiated lower borrowing costs with a revised $10 million credit line, improving liquidity and financial flexibility for execution of growth initiatives.
  • QuickLogic expects to execute three multi-project wafer tape outs for chips to be sold through the storefront model in 2026, with two fully customer-funded and the third at least partially so.

Industry glossary

  • DIB: Defense Industrial Base — companies that provide products and services for national defense and security applications.
  • eFPGA: Embedded Field Programmable Gate Array — configurable logic core integrated into ASICs or SoCs to provide post-fabrication programmability.
  • Hard IP: Pre-designed and pre-verified intellectual property block implemented at the transistor or gate level, typically used for licensing and integration in custom silicon designs.
  • Intel 18A: Intel's 18-angstrom process technology node used for advanced semiconductor manufacturing.
  • Storefront: QuickLogic's program for selling ready-to-ship, customer-programmable devices and chiplets through a simplified, product-like commercial model rather than custom contracts.
  • ATM: At-the-Market equity offering — a mechanism to raise capital by selling shares into the market over time at prevailing prices.
  • MPW (Multi-Project Wafer): Semiconductor fabrication approach where multiple designs share one wafer run, reducing costs for prototype and small-batch manufacturing.
  • RadPro: QuickLogic's brand for radiation-hardened FPGA products targeting mission-critical and aerospace applications.
  • LUT: Look-Up Table — a fundamental building block in FPGAs used to implement logic functions.

Full Conference Call Transcript

Brian C. Faith, President and Chief Executive Officer and Elias N. Nader, Senior Vice President and Chief Financial Officer. As a reminder, some of the comments QuickLogic makes today are forward looking statements that involve risks and uncertainties. Including, but not limited to, statements regarding our future profitability and cash flows, expectations regarding our future business and statements regarding the timing, and payments related to our government contract, statements regarding the expected magnitude of potential contracts, and statements regarding the expected adoption rates and or orders by our customers.

Actual results may differ due to a variety of factors, including delays in the market acceptance of the company's new products, the ability to convert design opportunities into customer revenue our ability to replace revenue from end of life products, the level and timing of customer design activity, the market acceptance of our customers' products, the risk that new orders may not result in future revenue, our ability to introduce and produce new products based on advanced wafer technology on a timely basis?

Our ability to adequately market the low power competitive pricing and short time to market of our new products, intense competition by competitors, our ability to hire and retain qualified personnel, changes in product demand or supply, general economic conditions, political events, international trade disputes, natural disasters, and other business interruptions, that could disrupt supply or delivery of, or demand for the company's products and changes in tax rates and exposure to additional tax liabilities. For more detailed discussions of the risks, uncertainties, and assumptions that could result in these differences please refer to the risk factors discussed in QuickLogic's most recently filed periodic reports with the SEC.

QuickLogic assumes no obligation to update any forward looking statements or information which speak as of the respective dates of any new information or future events. In today's call, we will be reporting non GAAP financial measures. You may refer to the earnings release we issued today for a detailed reconciliation of our GAAP to non GAAP results and other financial statements. We have also posted an updated financial table on our IR web page that provides current historical non GAAP data. Please note QuickLogic uses its website, the company blog, corporate Twitter account, Facebook page, and LinkedIn page as channels of distribution of information about its business.

Such information may be deemed material information and QuickLogic may use these channels to comply with its disclosure obligations under Regulation FD. A copy of the prepared remarks made on today's call will be posted on QuickLogic's IR page shortly after the conclusion of today's earnings call. I would now like to turn the call over to Brian. Go ahead, Brian.

Brian C. Faith: Thank you, Alison. Good afternoon, everyone, and thank you all for joining our first quarter 26 conference call. Since our last conference call, we have made significant progress toward our goal of delivering 50% to 100% year over year revenue growth in 2026. With this, we continue to expect storefront and our new RadPro FPGA will contribute to our anticipated revenue growth and second half profitability. As we announced in an April 9 press release, we introduced and demonstrated our new RadPro FPGA and development kit at the Hardened Electronics and Radiation Technology or HART conference last month.

HEART is a highly specialized conference where attendees must show proof of US citizenship, and their affiliation with a company or academia that is certified through the joint certification program. RadPro is our trademarked brand for radiation hardened FPGAs. The test chip we demonstrated at the HEART conference with our RadPro Dev kit was internally funded and is independent of our US government contract. These test chips were fabricated on the GlobalFoundries 12LP process which is the same process used by many DIBs for radiation hardened ASICs.

This means that in addition to successfully demonstrating our new discrete RadProPGA, we have also illustrated our capability to support requirements for eFPGA and radiation hardened ASICs and SOCs, fabricated on the GlobalFoundries 12-LP process. Our demonstrations and meetings at HEART with leading DIBs went very well and we have since shipped multiple RadPro Dev kits. These shipments will provide a low-6-figure contribution to our Q2 revenue. While we expect it will take until 2020 for Dibs to fully evaluate our new RadPro FPGA, We have already signed an MOU with 1 DIB to accelerate the mutual evaluation of a potential RadPro chiplet application.

In addition to the progress we have made with our RadPro FPGA, in a March 17 press release, we announced our fourth contract targeting Intel 18A technology. While these initial contracts have been smaller, their total value is now nearly $2 million. And together, they are the framework for the larger contracts we expect to book later this year. The first 2 contracts were for Intel 18A test chips. quarter. We anticipate receiving our test chip allocation from the first contract later this. We believe the data we gather from our evaluation of these test chips will enhance our ability to win new production contracts.

The third contract was for a 1 million LUT feasibility study which led us to implement some notable architectural enhancements that we can leverage across all advanced fabrication nodes. With these architectural enhancements in place, we can address the lucrative markets that require very high density eFPGA cores and ASIC designs, and very high density discrete FPGAs. This significantly expands our SAM for eFPGA hard IP and discrete devices, including chiplets and a variety of storefront opportunities. The fourth and most recent contract leverages the architectural enhancements that were developed during the 1 million LUT feasibility study.

In support of this contract, we will deliver Hard IP for a very large Intel 18A eFPGA core in support of our customers' ASIC design. The test ship for this ASIC design is targeted for tape out during the second half of 26. We anticipate a fifth mid-6-figure contract from this customer during the 2026 that further extends our work on very high density architecture. The timing of funding remains uncertain, our discussions with this DIB have expanded to include the potential of QuickLogic providing storefront services for a customer designed ASIC that will include our eFPGA hard IP.

We expect to learn more about the potential expansion to storefront services and the timing of this possible award in the coming months. In addition to these DIB contracts, we are working closely with a large commercial customer contract based on Intel 18A valued at several million dollars. In our last conference call, I said that I expected this contract would be awarded in late Q2. However, the customer is evaluating an expansion in the size and function of the eFPGA core in their ASIC to provide greater programmable flexibility. While this is a beneficial trend for QuickLogic, we are now forecasting this contract to be awarded during Q3.

On December 8, we issued a press release announcing Idaho Scientific selected our eFPGA heart IP for forward leading hardware based cryptographic solutions designed to address mobile IoT infrastructure and defense systems applications. We are continuing to support the integration of our Hard IP into the tape-out is anticipated next year. Idaho Scientific has a rich history in leveraging FPGA technology to deliver robust security systems that can adapt quickly to changing external threats without the vulnerabilities that are inherent in software based solutions. By integrating our eFPGA Hard IP into its secure system on a chip processors, Idaho Scientific can further enhance its cryptographic security and address new markets much more quickly with lower risks and lower costs.

Since our last conference call, Idaho Scientific has been fully integrated with General Dynamics Mission Systems. We believe this integration may lead to new opportunities for QuickLogic. Last year, we announced an eFPGA hard IP contract with a new defense industrial based customer valued at $1.1 million that will be fabricated on the GF 12LP process. This application utilizes a large block of our EF Hard IP for critical functions, which is a trend we are seeing in designs targeting advanced fabrication nodes. With the cooperation of this DIB and its end customer, we have leveraged the large eFPGA core to win a new 7-figure contract that was finalized last week and will contribute to Q2 revenue.

The delay of this award is why our Q1 revenue was below the mid point of our guidance. In the scope of this new contract, we will be provided with test chips that we will incorporate in an evaluation kit. The evaluation kit, which is currently scheduled for late 2026, will be compatible with common third party development environments used by both DIBs and commercial customers. This enables these customers to accelerate system level evaluations, and designs that can use either a storefront version of the discrete FPGA or our eFPGA hard IP in an ASIC. In parallel with these efforts, we are exploring the potential to leverage the FPGA from this contract as a storefront chiplet.

We are already seeing interest from some of our partners on this concept. Due largely to the strategic initiatives we launched in 2025, we believe we are building meaningful traction in the chiplet markets. We are currently working on numerous proposals at various stages, that include direct US government, DIB, and commercial applications. These proposals include opportunities targeting several fabrication processes including GlobalFoundry's 12LP, and Intel 18A. Last year, the commercial chiplet ecosystem was mired in debate regarding the communications and protocol layers. In response, we introduced the first phase of our digital proof-of-concept chiplet program as a strategy to move forward prior to customer commitments. And with that, accelerate our storefront chiplet initiatives.

Internally, we refer to this as POC. With the support of our large strategic partners, we leveraged our existing eFPGA hard IP and readily available third party IP to move this program forward rapidly and with minimal investment. We presented a paper on the POC at the Chiplet Summit in mid February and gave a presentation with Intel Foundry at an event at the Government Microcircuit Applications and Critical Technology or GOMAC Tech Conference in March. As a reminder, QuickLogic is a member of the Intel Foundry Accelerator Ecosystem Alliance program participating in the chiplet, IP, and USMAG alliances.

In our last conference call, I stated that the net takeaway from our presentation at the Chiplet Summit supports our optimism that chiplets will build traction in 2026. This opinion was bolstered at the GOMAC Tech Conference. The primary hurdles today are interoperability gaps and we believe a storefront FPGA chiplet is the logical solution for a programmable bridge. With that, I will turn the call over to Elias for his presentation of financial data.

Elias N. Nader: Thank you, Brian. Good afternoon, everyone. Total first quarter revenue was $5.1 million This was up 16.5% from Q1 2025 and up 35.3% from Q4 2025. Revenue was $450 thousand below the midpoint of our guidance. Due to a delay in the award of a certain contract that we finalized last week. Revenue recognition for this contract would be ratable and will now extend through Q1 27 versus through Q4 26. This shift forward in revenue recognition does not impact the full year revenue outlook that Brian shared earlier. New product revenue in Q1 was $4.3 million and mature product revenue was $800 thousand New product revenue was up 14.2% from Q1 2025, and up 50.7% compared to Q4 2025.

Mature product revenue was up 31.7% compared to Q1 2025 and down 14.2% from Q4 2025. Non GAAP gross margin in Q1 was 39.6%. This was below our outlook of 45% plus or minus 5%. The shortfall was due to inventory reserves of about $298 thousand. This compares to 45.7% in Q1 2025 and 20 point 8 percent in Q4 2025. Non GAAP operating expenses in Q1 were $3.3 million. This compares to $3 million in Q1 2025 and $3.5 million in Q4 2025. Q1 26 non GAAP net loss was $1.3 million or a loss of $0.08 per share.

This compares to a non GAAP net loss of $1.1 million or loss of $0.07 per share in Q1 2025 and a non GAAP net loss of $2.8 million or loss of $0.17 per share in Q4 2025. The difference between our GAAP and non GAAP results is mainly related to non cash stock based compensation expenses. Stock based compensation for Q1 was $858 thousand compared to $904 thousand in Q1 2025 and $744 thousand in Q4 2025. Restructuring costs were $11 thousand in Q1 26. Compared with $141 thousand in Q1 2025 and zero in Q4 2025. For the first quarter, 2 customers accounted for 10% or more of total revenue.

At the close of Q1, net cash was $6 million. This compares with $3.8 million in net cash at the close of Q4 2025. This increase of $2.2 million in net cash is inclusive of $3.2 million raised with our ATM during Q1 2026. Now moving to our guidance and our outlook for our second fiscal quarter, which will end on 06/28/2026. Based on backlog and customer forecast, our total revenue guidance for Q2 is $6 million plus or minus 10%. We expect total revenue to be comprised of $5.2 million in new product revenue, and $800 thousand in mature product revenue.

We anticipate an increase in mature product revenue during the second half that drives the full year total to approximately $4 million Based on the anticipated Q2 revenue mix, non GAAP gross margin for the second quarter is expected to be approximately 42% plus or minus 5%. As I noted in our last conference call, there are several factors weighing on our non GAAP gross profit margin during 2026, For the full year, we are still modeling a non GAAP gross profit margin of approximately 57%. Please note that given the nature of our industry, we may occasionally need to classify certain expenses to COGS. Versus OpEx or capitalize certain costs.

These classifications are related to labor, and tooling for IP contracts. This may cause variability in our quarterly gross margins and operating expenses that will usually balance out on the operating line. With that in mind, our Q2 non GAAP operating expenses are expected to be $3.3 million plus or minus 5%. We are still expecting full year non GAAP operating expenses to be approximately $13.5 million This forecasted growth of approximately 14% in non GAAP OpEx over 2025, is to support our anticipated 50% to 100% revenue growth in 2026. That Brian mentioned earlier. After interest and other income, we are forecasting a Q2 net loss of about $800 thousand or loss of approximately $0.04 per share.

Based on our current outlook, we anticipate non GAAP profit profitability for 2026. The main difference between our GAAP and non GAAP results is related to non cash stock based compensation expenses. In Q2, we expect this compensation to be approximately $900 thousand which is similar to Q1 26 and Q2 25. As a reminder, there will be movement in a stock based compensation during the year and it may vary quarter to quarter based on the timing of grants. We raised approximately $6.4 million in net proceeds during Q2 2026. Using our existing ATM. Based on our current outlook, do not anticipate further sales using our existing ATM during the balance of fiscal 2026.

Excluding money raised with our ATM, we anticipate Q2 cash use of approximately $500 thousand. Inclusive of money raised with our ATM, we anticipate closing Q2 with just under $12 million in net cash. Please note that our cash used could vary based on the timing of certain payments and receipts, from contracts during the quarter. Based on our current outlook, we anticipate positive cash flow during 2026, As reported in our 8 k filed on 04/30/2026, we have secured a new banking partner. With this new agreement, and considering the amount we have raised with the ATM, we intentionally lowered our credit line to $10 million and secured more favorable terms that will lower our borrowing costs.

I want to thank you for your time. And with that, I will now turn the call over to Brian for his closing comments.

Brian C. Faith: Thank you, Elias. The entire QuickLogic team has worked very hard to accomplish numerous tangible milestones that have set the stage well for 2026 and beyond. This execution along with the strategic investments and strong customer alliances, are the driving forces for the revenue growth we are forecasting to begin this year. The most significant investments have been our development of eFPGA Hard IP for Intel 18A technology, and the tape out of our first RadPro FPGA test chip. These internally funded investments have provided us with unique positioning in the market and have enabled us to develop close alliances with strategic customers that we believe will benefit QuickLogic for years to come.

With our first RadProPGA in hand, we have already received numerous orders for our RadPro Dev kits for evaluation. revenue. The shipment of these dev kits will make a low-6-figure contribution to our Q2 revenue. This positions us very well to address applications for various levels of radiation hardened discrete FPGAs and eFPGA Hard IP for customer ASIC and SOC designs. Our early investments to become the first and as it stands today only company to offer eFPGA Hard IP for Intel 18A, has also enabled us to build strong customer alliances.

1 of these customers has already awarded us 4 contracts with a fifth anticipated during 2026, Through these contracts, we expect to receive our allotment of test chips that will enable us to fully characterize the performance of our eFPGA hard IP on Intel 18A. With these data in hand, I believe we can accelerate new contract awards for DIB and commercial applications. This customer also funded the 1 million LUT on Intel 18A feasibility study that led us to implement a number of architectural enhancements. These enhancements have expanded our SAM to include the lucrative markets for very high density discrete FPGAs and eFPGA hard IP blocks, in ASIC and SOC designs.

In addition to the many initiatives I have outlined today, that are designed to power our long term growth, we are planning 3 multi project wafer or MPW tape outs this year. All 3 tape outs are for chips that we intend to sell via our storefront program. And as I mentioned earlier, the cost for 2 of these tape outs will be fully covered by customer contracts that are already on the books. We believe the third tape out will be covered at least in part by a customer contract. Our strong outlook for 2026 is based largely on the foundation we built during the preceding years.

As I hope we have articulated well during this call, the QuickLogic team is intensely focused on the continued execution of the strategic milestones that we believe will fuel our growth and profitability for years to come. With that, we will now open the call for questions.

Operator: Thank you. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. Our first question is from Richard Shannon with Craig Hallum Capital Group. Please proceed.

Richard Shannon: Well, great. Thanks, Brian and Elias, for taking my questions. Apologies. I am in transit. Hopefully, the ambient noise is not too bad here. Oh, No problem. Let's see. I guess my first question my first question, Brian, is you talked about your customers that are ordering and taking in the test chips, I think, called the RadPro Dev kit here. They are going to take most of the year to do this here. I just want to make sure that we are that is well within the timing to hit some key programs. I am sure these are intended for. I just want to get some assurance if that is not in risk in any in any way.

Brian C. Faith: Yeah. Richard, we have modeled out, some of these key programs that you know, we have been designing this chip for from day 1. And it aligns well with those. I will remind everybody that is why we actually invested in funding our own test chip is to make sure that we did app chips out in time on test kits to meet within that evaluation window. And we feel like we are within that window. And thrilled to see the uptake of, both the orders and the request for pricing and lead times of the dev kits coming out of the HEART conference.

Richard Shannon: Okay. What do you expect to be the next steps with these customers? Just help us understand what to expect next. What are those milestones to look for?

Brian C. Faith: I mean, there is numerous milestones to get to getting designed into an architecture, but I think from an outward-facing milestones that we can talk about, throughout this year, people will be doing their own functional evaluation of the tools of the devices perhaps their own radiation testing along with us doing that. And then like I said on the call, about by the end of the year time frame, that is when we expect to start getting some feedback from people on interest in designing us into these architectures for hopefully programs of record and even ones that are not out there yet. That lines up well with what we think will be the schedule for our next chips.

Coming off this whole initiative. And we are tracking those schedules very detailed as you can imagine, to line up architecture, finish, and then need of new silicon. In the 2027 time frame. Okay. that is good to hear. Thanks for that update, Brian.

Richard Shannon: I wanted to ask a question on Intel 18A here. Sounds like you are having great progress with 1 particular customer I think it is I think you mentioned that it is a DIB here. I guess I would love to get a sense of what kind of breadth you are expecting or hoping to see in that node, which I understand is, you know, being promoted broadly by the US government to the DIBs here. We have heard a lot about 1 customer. Do we expect to see any more here? what is kind of the pipeline for, you know, expansion with Intel?

Brian C. Faith: Yeah. We are actually tracking, I would say, a handful of opportunities at different customers, not just this first 1. Some of them are looking at the developments that we are doing and some of these architectural and assessing how they might use that to benefit from those enhancements as well for larger density. Some of the opportunities could be using our smaller density architecture today. So we have several. Like I said, it is a handful. So I think we are going to expand on that at some point this year. And I have said this publicly. I will reiterate it here. it is not just defense industrial base that is looking at Intel 18A.

Our perspective for eFPGA, it is actually into the commercial side. So we are targeting a commercial win this year as well. For our IP on that note. Okay.

Richard Shannon: That is good to hear, Brian. Thanks for that. Let's hear. Unless I missed something here, did not hear any comments specifically about the revenue growth profile you mentioned in the last earnings call for this year that being 50% to 100% of type. If you did, I apologize for that. But just want to get an update thought process, and how you know, what the profile of the year looks like given the guidance here. Unfortunately, I have not I have not been able to update my models, so I do not have overly intelligent way of asking this question. But if you could just kinda give me the top down about how you are going to approach that.

Are you, thinking of anything meaningfully towards the low end or high end of that number?

Brian C. Faith: No. In fact, the you probably were not logged in yet, but the first sentence I said after welcoming everybody was the progress we have made towards delivering on that 50% to 100% revenue growth target for the year. And if you think about what we did in Q1 plus our guide for Q2, that is already 80% of last year just in the $11 million in the first half versus $13 million something last year. So I think we are making really good progress on that. Really on all fronts, on the IP side with 18A. Thrilled to get the test chips and dev kits out for the RadProPGA because that is a huge uplift there.

And then also just on some of these new proposals we talked about earlier on different chiplet initiatives, storefront initiatives, and then bolstered by some of our mature business being stronger in the second half than the first half. So we are feeling good about being in that range that we talked about entering the year.

Richard Shannon: Okay. Perfect. Thanks for doing all that math for me. I will do that. Awesome. Offline and, ask some better questions later, but thanks for that, Brian. Last question, probably for Elias here on gross margins. What are the dynamics you are driving the gross margins from, I think, kind of the 40s range here to the 50 what did my notes say? 57% for the year. That implies pretty healthy levels for the second half Just wanna get a sense of the dynamics driving that, Elias, and that is all for me.

Elias N. Nader: Yeah. As you know, Richard, I have said this so many times. it is the most difficult 1 to teach. The gross margin in this company up and down and different, but the way I am looking at it is that there is going to be more higher gross margin mix in the second half than in the first half. For example, when you have certain professional services, for example, they bring in lesser gross margin than the IP or the product itself. that you are selling.

So as you increase that in the second half, to Brian's point, that we are going to have $13 million something in second half, That gives you the comfort that the gross margin should be up there. I still want to shoot for 57. Now if it comes at 55, nobody should shoot at me with arrows. But, I mean, that is a pretty good bump from last year. I will take that in account and jump in line and take what I can.

Richard Shannon: Thanks, Richard.

Operator: Our next question is from Tyler Burmeister with Lake Street Capital Markets. Please proceed.

Tyler Burmeister: Hey, guys. Thanks for letting us ask a couple of questions here. I guess I wanted to ask maybe on the US government, strategic radiation hardening program. You received the $13 million last tranche in the last year beginning of this year. Any updated thoughts on potential for additional funding tranches from that program later this year?

Brian C. Faith: Yeah. Definitely. So we had talked previously, I think I have shared publicly that $13 million tranche we are expecting to fully recognize this year. We are continuing on our developments of these next chips. And I think there you could assume that we would probably be getting another contract by the end of the year. To continue that even further into 2027 and sort of round out the necessary things to complete it. Perfect. Yeah. We did not really get a lot of air time directly to that on the call just because things are going fine. And we would already said it would be recognized for this year. So it is sort of a matter of fact. Perfect.

Perfect.

Tyler Burmeister: I guess it kind of-- already answered my next question. But then that would, I think, imply that the final chip design with that program remains on track for later this year.

Brian C. Faith: I wish I could share more programmatic details on that. I am not allowed to. So I am not gonna do that here, but we are we are let me say, we are comfortable with the way we are executing. Perfect.

Tyler Burmeister: Alright. And then maybe pivoting over to your RadPro Development kits. I think you said several of them have shipped so far. Is that with 1 customer, multiple customers? Any way to maybe think about the diversity of the customers so far?

Brian C. Faith: It is multiple. Let's start with that. And I would say the frequency of inbound interest for it has picked up now that we have been able to talk more about it. in sort of forums that matter. Like the HEART conference. And there is like, there is a slew of these Let's call them government, defense, radiation, oriented type conferences. They tend to be a little bit more boutique in nature than something like design automation conference or embedded systems. But the quality of leads that we engage with there is high. Because it is very focused. And coming out of HEART, there is a lot of interest for the dev kits. We are going through that now.

We even got messages even today from people saying, hey. we are interested. what is the lead time and the cost stuff like that? So I think we are gonna continue to ship these throughout the year. Which is great because that is a leading indicator of, a, interest in something like this, and, b, it just gets our software and devices into the hands of these customers. And some evaluating, which is what we want. Right? Good to see skin in the game from our customers as far as engineering resources working with our technology. Perfect.

Tyler Burmeister: I appreciate that color. Maybe last 1 for me. You know, I think you explained well the 1 contract push out from Q1 to Q2. You know, reiterate the full year to be 50% to 100%, you know, 1 quarter through the year, that is still a decent range for the full year. Is it possible to call out maybe the couple biggest potential drivers that could swing that from the low end to the high end, is it really just potential timing kind of across the board?

Brian C. Faith: Well, I guess the way I was answering that first question from Richard on the revenue for the year and how it fills in 5.2 thousand% growth. I mean, the math now with $11 million in the first half, like I said, that is 80% of last year. So I think we are well on our way to getting into this range that we talked about for the year, the 5.2 thousand%. As far as the components of that growth, 1 is the continued execution on the government contract, which I already alluded to that we are feeling good about that progress.

Another was entering the year was to be shipping these dev kits for the 18A-- the embedded FPGA hard IP. 1, as I mentioned, is for this customer. We have already had multiple contracts with and getting this next 1 for the second half. So that has to be done still, but I think we are feeling good about that. We do have a larger 18A IP contract in the forecast for the year, like a real contract. So to the extent you guys are tracking press releases on this, this would be that commercial customer I am talking about for Intel 18A. Embedded FPGA IP.

That would be 1 that we need to do to be into the upper end of the forecast range. Right? Like I said, I think we are we are feeling good about it. Felt great to finally get that 1 signed that we just signed last week. that is a good milestone to check off the box because that was a fairly large amount of revenue that we are forecasting for the year. Yeah. Quarter later, but it is good to get on the books and start executing on. So not too many more deals to sign to get into the upper half of that range that we talked about. Perfect.

Tyler Burmeister: That sounds great. I appreciate that color as well. that is all from me, guys. Thanks. Thanks, Tyler.

Operator: Our next question is from Neil Young with Needham and Company. Please proceed.

Neil Young: Hey, everyone. Thank you for letting me ask some questions. Hey, Neil. Hey. How's it going? Wanted to start asking on a storefront here. So as storefront begins to scale, how should we think about the financial profile? You know, more specifically, should storefront carry a meaningfully different gross margin? Or you know, revenue recognition pattern once you move from the dev kits and test chips into more of a repeatable or, sorry, repeatable product shipments. And then just 1 more for me after that.

Brian C. Faith: Yeah. I can take that 1. So storefront is just like the classic semiconductor device business. So we run the supply chain, We sell the device to the customer. it is a revenue and a gross margin at that point in time. Very, very little R&D that goes on top of that because the devices are effectively done. And so the gross margin, A, yes, will be higher. For modeling, like, what the license historically said on devices like mid to high 60% for that. Like, what you would expect an FPGA to be.

But more of a I think more predictable and less up and down because it is less to do with services and much more to do with just shipping a product, revenue recognized as it goes out the door, gross margin at that point in time because we know the cost of goods. it is much more predictable. Perfect.

Neil Young: Thanks. And then I wanted to ask on Quantum Leap Solutions. I know you guys brought a press release saying you appointed them as authorized sales rep for IP and chiplet offerings. How should we think about the role of that channel in accelerating customer acquisitions? You know, should we think about the bigger opportunities revolving around opening new commercial accounts, sort of deepening the defense aerospace engagement, helping customers navigate chiplet and ASIC integration decisions earlier in the design cycle. Just any color you wanted to throw on that would be helpful. Thanks.

Brian C. Faith: Yeah. I mean, as a company of our size, most semiconductor companies, we have our direct Salesforce. Employees at QuickLogic, and then we have our external Salesforce or indirect. And indirect is usually distributors or sales reps. In the case of having what I would call design in products, which you really have to get into your point at the early stages of the architecture, You want sales reps that are sort of focused on that type of technology. So for us, that could be semiconductor IP. It could be EDA tools. it is all of this stuff that ASIC teams typically have to be using because now our sales rep knows those ASIC design groups.

And so they can go in. They have already established rapport. They have established trust, and they can expose, those groups to QuickLogic technology. So they have been around for a while. We have known them. We are happy that they have joined QuickLogic. They are not just defense. They also do a lot of commercial And I think that they have a pretty strong background in helping sell EDA tools, which is great because every ASIC design team that needs IP need EDA tools. So they know the right people to go to.

So that really helps gives us leverage for our operating model because that means we have what we call variable costs because most sales reps and distributors are sort of success based. Right? They license they help license IP. They help sell devices. They get a commission or a margin on the sale. So it is a fantastic way of aligning what we need as a company with financial incentives for them. Like I said, I think they are doing a great job getting us into people that are beyond or groups that are beyond our numbers' customers that are beyond what we could handle with just our direct Salesforce today. Does that answer your question?

Neil Young: Yeah. Yeah. Thank you. Great.

Operator: As a reminder, just press *1 on your telephone keypad. If you would like to ask a question. We will pause for a brief moment to see if there is any final questions. With no further questions at this time, I would like to turn the floor back over to Brian for closing remarks.

Brian C. Faith: Thank you all for joining and participating today. We look forward to speaking with you in the near future. or on our next earnings call in August, whichever comes sooner. Thank you.

Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.