QuickLogic's 2025 Q3 Earnings Call: Contradictions Emerge on Government Shutdown Impact, Storefront Revenue Projections, and Rad-Hard Program Timelines

Date of Call: November 11, 2025

Financials Results

• Revenue: $2.0M, down 52.5% YOY (Q3 2024) and down 45% sequentially (Q2 2025); new product revenue $1.0M (down 73.1% YOY, down 67.3% QoQ); mature product revenue $1.1M (up from $0.7M in Q3 2024 and $0.8M in Q2 2025)
• EPS: Non-GAAP net loss of $0.19 per diluted share, compared with a $0.06 loss in Q3 2024 and a $0.09 loss in Q2 2025
• Gross Margin: Non-GAAP gross margin of -11.9%, compared with 65.3% in Q3 2024 and 31% in Q2 2025 (primary drivers: unfavorable absorption of fixed costs and $0.3M of R&D allocated to COGS)

Guidance:

• Q4 revenue guidance range: $3.5M to $6.0M driven by timing of a nearly $3M commercial contract.
• At $3.5M: expect $2.5M new product and $1.0M mature product; non-GAAP gross margin ~45%.
• At $6.0M: expect ~$5.0M new product; non-GAAP gross margin ~68%.
• Q4 non-GAAP OPEX expected ~$3.0M +/-5%; full‑year 2025 non‑GAAP OPEX modeled at ~$11.3M.
• Full‑year 2025 non‑GAAP gross margin expected ~38% +/-5%.
• Q4 net loss/profit: ~($1.9M) or ($0.11)/sh at low end; ~+$0.6M or $0.04/sh at high end.
• Q4 stock‑based comp ~ $0.8M; positive cash flow expected even at low end (ATM proceeds available).

Business Commentary:

• Revenue and Financial Performance:
• QuickLogic Corporation reported total Q3 revenue of $2 million, down 52.5% from Q3 2024 and 45% compared to Q2 2025.

• The decline in revenue was primarily due to unfavorable absorption of fixed costs and the allocation of R&D costs to COGS, as well as a delay in the market acceptance of new products and a shift in customer design activity.

• Storefront Revenue and Strategic Initiatives:

• The company expected to recognize storefront revenue in early 2026, contributing meaningfully to total 2026 revenue.

• The strategic SRH test chip initiative, financed independently by QuickLogic, is anticipated to lead to significant storefront business, potentially reaching hundreds of millions of dollars in future revenue.

• Government Contracts and Impact:

• Q3 marked the low point for revenue recognition from a U.S. government SRH FPGA contract, with a rebound anticipated in Q4 and increased revenue in 2026.

• A potential delay in funding for a mid-seven-figure contract from a DIB is pushing the award into 2026, impacting Q4 revenue projections.

• Guidance and Future Projections:

• QuickLogic targets $6 million in total revenue for Q4 2025, with an unusually wide guidance range due to the timing of a large contract.
• The company aims to achieve significant growth in 2026, with storefront revenue contributing notably to total revenue.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management emphasized tangible progress and confidence: "we expect to begin recognizing storefront revenue in early 2026"; "targeting total revenue of $6 million for Q4"; and "very high level of confidence in winning this contract." Despite Q3 weakness (revenue $2M, non‑GAAP gross margin -11.9%), commentary focused on large pipeline, SRH test chip tape‑out, dev‑kit commitments and accelerating license/royalty opportunities into 2026.

Q&A:

• Question from Neil Young (Needham): What impact is the government shutdown having on your business — delays or cancellations — and what gives you confidence in a rebound of the USG strategic rad‑hard FPGA program in Q4? Also, can you size storefront revenue for 2026 or outline upside/downside drivers?
  Response: Shutdowns caused some pauses in RFIs/RFPs but not on active contracts; management is confident delays are temporary, funded the company via ATM to bridge timing, and expects storefront revenue to be meaningful (~~10% of 2026 revenue) with upside if dev‑kit orders and key commercial awards occur on schedule.

• Question from Richard Shannon (Craig‑Hallum): How should we think about the opportunity for FPGAs versus ASICs including your eFPGA hard IP on GF 12LP vs other foundries — are the dynamics and timing different and which is the larger opportunity?
  Response: 12LP is a large, strategic opportunity — offers near‑term IP licensing/royalty revenue and, longer term, higher‑ASP device revenue via rad‑hard FPGAs; management believes 12LP presents a bigger revenue bucket than older nodes because higher density yields higher value for both licensed eFPGA and storefront device sales.

• Question from Rick Neaton (Rivershore Investment Research): Is Q4 guidance effectively an either/or ($3.5M or $6M) driven by timing of a single order? Also, what is your expected share count for 2025 and why has the expected 2025 revenue decline grown since August?
  Response: Yes — the Q4 range is driven by timing of one nearly $3M commercial contract (if awarded and recognized in Q4 we could hit $6M; if it slips, revenue ~ $3.5M); share count ~17M outstanding; larger-than-anticipated year‑over‑year decline stems from timing/lumpiness of multi‑million IP contracts moving into 2026.

Contradiction Point 1

Government Shutdown Impact on Business

It involves the company's assessment of the impact of the government shutdown on its business operations and revenue projections, which are crucial for financial forecasting and investor expectations.

What impact is the government shutdown having on QuickLogic's business, particularly regarding project delays and cancellations? - Neil Young(Needham)

2025Q3: The demand for programmable logic in the defense industrial base is strong and not expected to change. Existing contracts are progressing as planned. Delays in funding for new programs could occur due to the shutdown, but QuickLogic has built flexibility into its operations to handle these situations. The new government funding expected to restart these programs should bring back the momentum. - Brian Faith(CEO)

Why prioritize advancing the test chip in Australis over more certain Q3 business? Are you targeting Intel's Altera and AMD Xilinx in the FPGA market? - Richard Anthony Neaton(Rivershore Investment Research)

2025Q2: In the defense market, customers are accustomed to paying for such engineering samples. Providing a fully-functional FPGA allows customers to test their designs before production. - Brian Faith(CEO)

Contradiction Point 2

Storefront Revenue Projections for 2026

It involves the company's outlook for storefront revenue growth in 2026, which is crucial for revenue projections and investor expectations.

What is the expected range of storefront revenue for QuickLogic in 2026, and what factors might drive upside or downside to these expectations? - Neil Young(Needham)

2025Q3: QuickLogic anticipates storefront revenue will make up approximately 10% of total revenue in 2026. Upside is driven by the expected demand from the defense industrial base for strategic radar initiatives, hypersonics, and Golden Dome programs. - Brian Faith(CEO)

Why advance the Australis test chip over more certain Q3 business, and are you directly targeting Intel's Altera and AMD Xilinx in the FPGA market? - Richard Anthony Neaton(Rivershore Investment Research)

2025Q2: We could start seeing some test chip revenue very early 2026, with devices on boards for customer engagement. - Brian Faith(CEO)

Contradiction Point 3

Storefront Revenue Expectations

It involves differing expectations regarding the timeline and significance of revenue from storefront opportunities, which could impact investor perceptions of the company's growth strategy and financial prospects.

What is the expected range of storefront revenue for QuickLogic in 2026, and what factors could drive upside or downside to these expectations? - Neil Young (Needham)

2025Q3: QuickLogic anticipates storefront revenue will make up approximately 10% of total revenue in 2026. Upside is driven by the expected demand from the defense industrial base for strategic radar initiatives, hypersonics, and Golden Dome programs. - Brian Faith(CEO)

What are the top 2-3 drivers of revenue growth for the year? - Quinn Bolen (Needham & Company)

2025Q1: The revenue in second half of the year is expected, including IP license revenue and royalties likely in the following year. - Brian C. Faith(CEO)

Contradiction Point 4

Strategic Rad-Hard Program Timeline

It involves discrepancies in the projected timeline for the delivery of storefront revenues from the strategic rad-hard program, which could affect expectations for the program's progress and financial impact.

What impact is the government shutdown having on QuickLogic's business? Given the ongoing shutdown, what gives you confidence in a Q4 rebound of the U.S. government's strategic radiation-hard FPGA program? - Neil Young (Needham)

2025Q3: The new government funding expected to restart these programs should bring back the momentum. - Brian Faith(CEO)

Is the timeline for storefront revenues from the rad-hard program still the same? - Richard Shannon (Craig-Hallum)

2025Q1: More time is spent with defense industrial base now. I can't disclose specific years, but storefront revenues are expected later in the program's lifecycle. - Brian C. Faith(CEO)

Contradiction Point 5

Storefront Revenue Projections

It involves differing projections for storefront revenue, which is crucial for understanding the company's growth strategy and revenue streams.

What is the expected storefront revenue range for QuickLogic in 2026, and what factors could affect this forecast? - Neil Young(Needham)

2025Q3: QuickLogic anticipates storefront revenue will make up approximately 10% of total revenue in 2026. - Brian Faith(CEO)

How does the Rad-Hard FPGA project contribute to revenue this year versus previous years, and what is the timeline for storefront revenue? - Richard Shannon(Craig-Hallum)

2024Q4: We expect to see steady growth in storefront revenue, which will represent more than 50% of our business in 2025. - Brian Faith(CEO)