0001193125-26-219341
SEC filingRevenue surged 59.3% YoY to $25.1M driven by new product launches, while gross margin contracted 980 bps to 43.5% due to a non-recurring gain in prior year.
For the three months ended March 31, 2026, net sales increased 59.3% to $25.1 million from $15.7 million in the same period of 2025. The growth was broad-based, driven primarily by new product launch ramps at higher average selling prices and the addition of a new major customer. Gross profit rose 29.8% to $10.9 million, but gross margin declined significantly to 43.5% from 53.3%, a 980 basis point drop. The margin contraction was primarily due to a $1.6 million non-monetary gain recognized in the first quarter of 2025 that did not recur. Research and development expenses increased 47.7% to $12.8 million, reflecting higher intellectual property development and technology spend, as well as increased contractor and compensation costs, including stock-based compensation and 15 additional hires. Selling, general and administrative expenses grew 15.5% to $9.7 million, driven by higher variable compensation, sales commissions, and incremental costs of being a public company. Other income net surged 229.9% to $1.5 million, mainly from higher interest income on proceeds from the IPO and the January 2026 follow-on offering. The net loss widened to $10.2 million from $8.3 million, though as a percentage of sales improved from -52.7% to -40.6%.
The MD&A does not report formal segment financials. However, the discussion highlights that revenue growth was broad-based across the major customer base, with two customers exhibiting particularly strong demand from new product launches. A new major customer also contributed significantly in the first quarter of 2026. Geographically, sales to Mainland China increased to 13.7% of net sales from 6.2% in the prior year, though management continues to prioritize other regions. The company derives all wafers from TSMC in Taiwan, exposing it to geopolitical risks.
Management expects to continue investing heavily in research and development to maintain competitiveness and expand the product portfolio. As of March 31, 2026, the company held $204.5 million in cash and cash equivalents, including net proceeds of $75.3 million from the January 2026 follow-on offering. Management believes existing cash and anticipated cash from operations will be sufficient to finance operations for at least the next twelve months. No specific revenue or margin guidance is provided. The company highlights risks from customer concentration (top three end customers represent 71% of sales), cyclical semiconductor industry dynamics, and potential supply chain disruptions. The company remains an emerging growth company and intends to take advantage of reduced reporting requirements.
As of March 31, 2026, the company held $204.5 million in cash and cash equivalents, a significant increase from $140.3 million at December 31, 2025, primarily driven by net proceeds of $75.3 million from a follow-on offering. Total assets stood at $259.5 million, with stockholders' equity of $235.2 million. The company reported an accumulated deficit of $366.9 million and a net loss of $10.2 million for the quarter, with negative operating cash flow of $11.2 million. Inventories increased to $23.5 million from $16.9 million, reflecting higher work in progress and finished goods.
The company disclosed total manufacturing purchase commitments of $27.7 million as of March 31, 2026, up from $7.6 million a year earlier. These commitments relate to agreements with third-party foundries and contract manufacturers, primarily based on purchase orders that can be canceled or rescheduled upon agreement. No other material contractual obligations or litigation contingencies were reported.
Capital allocation activities were limited. The company invested $0.6 million in property, equipment, and software during the quarter, and $3.4 million in intangible assets. No debt, dividends, or share buybacks were reported. The follow-on offering raised $75.3 million in net proceeds, and warrant exercises contributed $3.0 million. Stock-based compensation totaled $3.4 million, with $52.2 million in unrecognized RSU expense expected to be recognized over 3.79 years.
The company operates as a single reportable segment. Revenue by end-customer geography showed the United States at $20.2 million (80.6% of total), China at $3.4 million (13.7%), and the rest of the world at $1.4 million (5.7%). Revenue by shipment destination was more diversified, with China at $11.6 million, Taiwan at $6.1 million, and North America at $5.1 million. Three end customers accounted for 71.5% of total net sales in the quarter.