Netlist Q4 Earnings Miss Estimates Despite Steady Revenue Increase

Netlist, Inc. NLST reported a fourth-quarter 2024 non-GAAP net loss per share of 5 cents, in line with the prior-year quarter. The bottom line lagged the Zacks Consensus Estimate by 66.7%.

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Revenues in the quarter totaled $34.3 million, beating the Zacks Consensus Estimate by 14%. The top line rose 2.7% year over year, driven by fresh launches and penetration into the AI memory market. Two key trends driving memory market growth are HBM for AI processing and the shift to DDR5. Management anticipates benefiting from both product development and its IP portfolio.

In the quarter, it unveiled the Lightning brand of ultra-low latency memory solution, which boosts memory performance in the double-digits with minimal costs and no changes to AMD or Intel systems. Ongoing customer qualifications, and demand from big data and high-frequency trading are likely to drive growth.

In addition, NLST launched high-capacity, high-performance MRDIMM products tailored for the AI memory market. The MRDIMM market is set to launch in 2025, growing from around $1 billion this year to more than $5 billion by 2027. Also, the company continues to lead in IP innovation for HBM, DDR5 and AI memory. In 2024, it grew its patent portfolio by more than 10%.

Netlist, Inc. Price, Consensus and EPS Surprise

 

Netlist, Inc. price-consensus-eps-surprise-chart | Netlist, Inc. Quote

For 2024, net sales sky-rocketed 113% year over year to $147.1 million, driven by market demand and legal victories. Management highlighted its legal victories against Micron and Samsung, securing $866 million in awarded damages for patent infringement. These wins underscore the company’s strong IP portfolio and commitment to defending its innovations.

Nonetheless, NLST expects first-quarter 2025 revenues to dip slightly from the fourth quarter due to temporary consumer demand weakness. However, the outlook for the rest of the year and 2026 remains strong, especially in the high-end AI server market.

Other Details

The gross profit for the quarter under review was $0.3 million, down from the $1.2 million reported in the prior-year quarter.

Operating expenses declined 10.3% year over year to $13.4 million, driven by reductions in IP legal fees, R&D and SG&A costs.

The operating loss for the quarter totaled $13.1 million compared with a loss of $13.8 million in the previous-year quarter.

Liquidity

As of Dec. 28, 2024, cash, cash equivalents and restricted cash were $34.6 million compared with $29.8 million as of Sept. 28, 2024.

NLST’s Zacks Rank

Netlist currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performances of NLST’s Competitors

Pure Storage PSTG reported fourth-quarter fiscal 2025 non-GAAP EPS of 45 cents, which beat the Zacks Consensus Estimate by 7.1%. The company reported a non-GAAP EPS of 50 cents in the prior-year quarter.

Quarterly revenues expanded 11% from the year-ago quarter to $879.8 million, beating the Zacks Consensus Estimate by 1.08%. The top line outpaced management’s guidance due to record sales across FlashBlade, FlashArray//XL, Portworx, the //E portfolio and renewals of its Evergreen subscriptions. In the fiscal fourth quarter, TCV sales of Evergreen//One hit a record high of $140 million, up 20% year over year.

Quantum Corporation QMCO reported a third-quarter fiscal 2025 non-GAAP loss of 81 cents per share, wider than the Zacks Consensus Estimate of a loss of 70 cents. The company incurred a loss of $1.79 per share in the year-ago quarter.

QMCO generated revenues of $72.6 million, up 0.9% year over year. The top line beat the consensus mark by 0.8%. The revenue increase was primarily driven by better-than-expected bookings, as the company successfully converted recent customer wins into realized sales. Backlog also stabilized at $9.3 million, within its target of $8-$10 million, despite continued supply-chain delays in some areas.

Teradata TDC reported fourth-quarter 2024 non-GAAP earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 26.19%. The bottom line decreased 5.4% year over year. 

Revenues of $409 million missed the Zacks Consensus Estimate by 0.43%. The figure declined 11% year over year on a reported basis and 9% on a constant-currency basis. Total annual recurring revenues at the fourth-quarter end declined 6% year over year to $1.474 billion. The figure fell 4% at cc.

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This article originally published on Zacks Investment Research (zacks.com).

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