Business Context and Reporting Period
Company: QuickLogic Corporation (QUIK)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 29, 2026 (Fiscal Q1 2026)
Business Overview: QuickLogic is a fabless semiconductor company specializing in embedded Field Programmable Gate Array (eFPGA) hard intellectual property (IP), strategic radiation-hardened FPGAs, and ruggedized programmable logic solutions. The company operates in a single reportable segment serving aerospace, defense, industrial, and computing markets.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $5.05 million | $4.33 million |
| Gross Profit | $1.84 million | $1.88 million |
| Gross Margin | 36.5% | 43.4% |
| Operating Loss | $(2.12) million | $(1.98) million |
| Net Loss (Continuing Ops) | $(2.20) million | $(2.09) million |
| Net Loss (Total) | $(2.21) million | $(2.19) million |
| Cash from Operations | $0.72 million | $(2.13) million |
| Cash & Equivalents (End of Period) | $6.05 million | $17.55 million |
| Total Debt (Notes Payable) | $3.12 million | $2.80 million |
Note: All figures in millions unless otherwise noted. Discontinued operations (SensiML) resulted in a negligible loss of $0.004 million for Q1 2026.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 17% year-over-year (YoY) to $5.05 million, driven primarily by a 16% increase in eFPGA IP and professional services revenue ($4.20 million vs. $3.62 million).
- Margin Compression: Gross margin declined to 36.5% from 43.4% YoY. Cost of revenue rose 31% due to increased consulting services, depreciation, and inventory reserves, outpacing revenue growth.
- Operating Expenses: Total operating expenses increased slightly by 3% to $3.96 million. Research and Development (R&D) expenses rose 19% due to higher compensation and software tooling costs, while Selling, General, and Administrative (SG&A) expenses decreased 4%.
- Liquidity Shift: Cash and cash equivalents decreased significantly by approximately $12.8 million quarter-over-quarter (from $18.84 million to $6.05 million). This was primarily due to the full repayment of a $15.0 million revolving line of credit with Heritage Bank of Commerce.
- Discontinued Operations: The SensiML subsidiary was classified as held for disposal. Revenue from discontinued operations was $0 in Q1 2026 compared to $0.01 million in Q1 2025.
Outlook, Risks, and Unusual Items
- Liquidity and Financing: Management addressed going concern considerations by securing a new $10.0 million secured revolving credit facility with Sunflower Bank, N.A., maturing in April 2029. The company believes existing cash, new credit facilities, and ATM offering proceeds are sufficient for the next 12 months.
- Capital Raising: The company actively utilized its "At-The-Market" (ATM) offering, selling 403,000 shares in Q1 2026 for net proceeds of approximately $3.1 million. Subsequent to the period end, an additional 500,000 shares were sold for $6.4 million in gross proceeds.
- Discontinued Operations: The company continues to explore the sale of SensiML. All non-cash assets of SensiML were impaired to zero value as of December 28, 2025. Disposal costs incurred in Q1 2026 were minimal ($11,000).
- Risks: Key risks include the cyclicality of the semiconductor industry, reliance on third-party foundries (GlobalFoundries, TSMC), customer concentration (Customer "A" accounted for 70% of revenue in Q1 2026), and potential dilution from continued equity issuances.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $6.05 million cash balance combined with the new $10 million Sunflower Bank facility against the company's burn rate and capital expenditure plans.
- Customer Concentration: Assess the risk associated with Customer "A" representing 70% of total revenue and 41% of accounts receivable.
- Margin Trends: Monitor the trajectory of gross margins, which compressed to 36.5% due to rising costs of revenue, to determine if this is a temporary anomaly or a structural shift.
- Equity Dilution: Track the pace of share issuances under the ATM program, which has increased outstanding shares by 2.1 million since February 2025.
- Disposal of SensiML: Confirm the status of the SensiML sale process and any potential future costs or tax implications associated with the disposal.