Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Netlist Inc (NLST, Financial) reported first-quarter financial results in line with expectations, indicating stable performance despite market challenges.
- The company is well-positioned to capitalize on the growing demand for high bandwidth memory (HBM) and the transition to DDR5, including MRDIMM products.
- Netlist Inc (NLST) has started sampling high-capacity, high-performance MRDIMM products for the AI memory market, with plans to launch a branded product line later this year.
- Operating expenses for the first quarter of 2025 declined by 44% compared to the previous year, primarily due to reductions in IT legal fees.
- The company maintains significant financial flexibility and liquidity with a $10 million working capital line of credit and approximately $74 million available on the equity line of credit.
Negative Points
- The US tariffs have created disruptions in the memory market, affecting pricing and shipment dynamics.
- There is significant uncertainty in the business environment due to potential new tariff schemes on semiconductors.
- Netlist Inc (NLST) is involved in ongoing litigation with Samsung and Micron, which could take up to a year to resolve through the appellate process.
- Revenue for the first quarter of 2025 was $29 million, reflecting short-term softness in the consumer demand environment.
- The company ended the first quarter with a decrease in cash and cash equivalents, down to $25.6 million from $34.6 million at the end of 2024.
Q & A Highlights
Q: Can you clarify the timeline for the Samsung litigation appeal process?
A: Chun Hong, CEO: Samsung has 28 days to file a motion, and the judge will rule within 90 days, likely by July or August. Samsung then has 30 days to appeal. They have appealed before and will likely do so again, but we believe there is no reasonable argument for them to reverse the outcome. The appeal process could take six months to a year.
Q: Will the timeline for the Micron case differ from the Samsung case?
A: Chun Hong, CEO: The timeline for the Micron case will be similar to the Samsung case. Both are in the appellate process, which could take about a year to reach oral hearings at the Federal Circuit Court of Appeals. The decision from the appellate court will likely be final, as these cases are unlikely to go to the Supreme Court.
Q: What is the current trend in memory prices, and how are tariffs affecting them?
A: Chun Hong, CEO: Memory prices have increased in April, with low double-digit growth expected in May. A separate tariff scheme for semiconductors may be introduced, but negotiations could change this. While consumer demand is down, AI server demand remains strong, driven by investments from hyperscalers.
Q: What is the expected market penetration for MRDIMM in AI servers, and what is the content opportunity?
A: Chun Hong, CEO: MRDIMM is expected to capture 10% to 20% of the server memory market in the next few years, starting adoption at the end of this year. While NVIDIA AI servers may not use MRDIMM, AMD and Intel servers, both enterprise and AI, will adopt it.
Q: How is Netlist positioned in the growing HBM and DDR5 markets?
A: Chun Hong, CEO: Netlist is well-positioned with several patents in the HBM area and continues to work on additional patents. HBM demand is robust, with significant year-to-year growth. DDR5, also an AI memory, continues to grow, and Netlist holds many patents in this area.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
