Everspin Q3 2026 Earnings: Revenue Rises 47% but Legal Costs Drive a GAAP Loss

Everspin Technologies (NASDAQ: MRAM) reported Q3 2026 revenue of $20.6 million, up 47% year over year, while GAAP diluted EPS fell to $(0.29) from $0.00. Product and non-product revenue both increased, but $6.0 million of litigation expense and a $2.7 million regulatory provision pushed the company to a $7.2 million GAAP net loss; non-GAAP diluted EPS doubled to $0.12.

Core Financial Results

Revenue reached a quarterly record, according to management, with product sales providing most of the dollars and licensing, royalty, engineering services and other revenue posting the faster growth rate. Gross margin was nearly unchanged from a year earlier despite the higher revenue.

The central earnings issue was the sharp rise in reported operating expenses. GAAP operating expenses more than doubled, while results excluding specified litigation, regulatory and stock-based compensation items showed positive operating income.

Business and Revenue Performance

MRAM product sales, including Toggle and STT-MRAM, increased approximately 34% to $16.945 million from $12.690 million. Management attributed end-market growth to industrial automation, data center, medical and energy management demand, without providing individual revenue figures for those markets.

Licensing, royalty, engineering services and other revenue rose approximately 170% to $3.703 million from $1.370 million. The category contributed $2.333 million of Everspin’s total $6.588 million year-over-year revenue increase, making it an important secondary growth driver despite remaining considerably smaller than product sales.

Sequentially, total revenue increased 10% from $18.736 million in Q2 2026. Everspin said it remains focused on expanding its core business, introducing new products and developing next-generation solutions for additional applications.

Litigation and Regulatory Costs Turned Growth Into a GAAP Loss

GAAP operating expenses increased by $9.787 million year over year, with $5.987 million of litigation costs and a $2.715 million regulatory provision accounting for most of the increase. General and administrative expense consequently rose to $13.029 million from $3.690 million.

After the company’s adjustments, operating expenses were $8.452 million, up 13% from $7.505 million. Non-GAAP operating income reached $2.304 million, compared with a $138,000 loss a year earlier, and non-GAAP operating margin improved to 11.2% from negative 1.0%.

This reconciliation shows that the underlying revenue growth supported adjusted profitability, but it did not offset the legal and regulatory charges under GAAP. The distinction remains important because litigation expenses depend on case activity and may vary from period to period.

Cash Flow and Balance Sheet

Cash flow figures were provided for the first nine months of 2026 rather than Q3 alone. Nine-month operating cash flow declined to $1.592 million from $7.336 million, while purchases of property and equipment increased to $7.059 million from $3.239 million. Including intangible asset purchases, net cash used in investing activities was $8.559 million.

Cash and cash equivalents were $43.042 million on September 30, down $1.408 million from the end of 2025. Inventory increased to $13.959 million from $10.734 million, and accounts receivable rose to $11.066 million from $8.101 million. Accounts payable and accrued liabilities also increased, helping offset some of the cash consumed by the net loss and asset growth.

Q4 2026 Guidance

Everspin expects Q4 revenue to exceed the Q3 level, with the $22.0 million midpoint implying approximately 6.5% sequential growth. The continued gap between GAAP and non-GAAP EPS guidance indicates that adjusted items are expected to remain relevant.

Everspin did not provide a forward-looking reconciliation because future stock-based compensation and litigation expenses are uncertain and potentially variable.

Recent Insider Transactions

Over the reported six-month period, insiders purchased 640,962 shares across 16 transactions and sold 700,304 shares across 19 transactions, resulting in net sales of 59,342 shares, or 4.2%. Total insider holdings were reported at approximately 1.36 million shares.

The latest 10 reported transactions consisted of six direct sales and four direct stock awards. These records are presented objectively and do not, by themselves, establish insiders’ views on Everspin’s outlook.

Risks Investors Should Monitor

• Legal and regulatory expense uncertainty: Litigation costs and the regulatory provision were large enough to outweigh the quarter’s revenue and gross-profit growth. Future litigation spending is difficult to predict.
• Sequential margin pressure: GAAP gross margin declined to 51.4% from 53.9% in Q2 despite 10% sequential revenue growth. Everspin did not provide a specific explanation for the decrease.
• Lower cash conversion: Nine-month operating cash flow declined substantially while capital expenditures and inventory increased, creating a larger funding requirement for operations and investment.
• Q4 execution: The revenue guidance range is approximately 4% to 9% above Q3 revenue, requiring continued growth in product and non-product revenue.

Summary

Everspin’s Q3 2026 results combined record revenue and improved adjusted profitability with a sizable GAAP loss caused primarily by litigation and regulatory costs. Product demand and non-product revenue both contributed to growth, while Q4 guidance calls for another sequential revenue increase. The main items to monitor are the duration of legal-related spending, gross-margin performance and whether higher revenue translates into stronger operating cash flow.