Everspin Technologies experienced a significant share price increase following the announcement of a $40 million subcontract to supply MRAM technology for U.S. defense applications. The Chandler, Arizona-based memory chip specialist saw its stock climb to $21.49, a gain of $3.19 from the prior close, on heavy trading volume of approximately 4.7 million shares. The company's market capitalization now stands near $497 million.
Defense Contract Details
The subcontract, awarded by Amentum Services Inc., is part of a U.S. government microelectronics research and manufacturing initiative. The agreement covers the period from April 20, 2026, through November 21, 2028, and includes milestone payments across two phases. Everspin will provide Toggle MRAM process technology and engineering services to customers within the U.S. Defense Industrial Base. MRAM, or magnetoresistive random access memory, stores data magnetically, ensuring data retention even when power is lost—a critical feature for defense applications.
CEO Sanjeev Aggarwal highlighted that this contract extends Everspin's track record in military and aerospace sectors, where performance, reliability, longevity, and domestic production are paramount. The project is expected to support future manufacturing tied to the company's recently announced foundry deal with Microchip Technology.
Financial Performance
Everspin reported first-quarter revenue of $14.9 million, up from $13.1 million in the same period last year. MRAM product sales reached $14.1 million, compared to $11.0 million a year ago. The company posted a GAAP net loss of $0.3 million, or 1 cent per share, but on a non-GAAP basis, net income was $2.6 million, or 11 cents per share. Aggarwal attributed the strong results to demand from industrial automation, transportation, and data-center markets, noting a recovery in Japan as customers work through inventory. CFO Bill Cooper said solid product revenue drove results toward the high end of guidance.
Outlook and Guidance
For the second quarter, Everspin forecasts revenue between $15.5 million and $16.5 million, with a projected GAAP net loss of 7 to 12 cents per share. The guidance does not include the new defense subcontract, leaving questions about when the deal will contribute to revenue. On the earnings call, Cooper noted that the contract's 'ink is just drying,' and management will provide clearer guidance after handling the kickoff and accounting details. He expects the deal to improve margins but did not provide a revenue timeline.
Manufacturing Expansion
Everspin is also boosting its manufacturing capabilities. According to an April 8 filing, Microchip Technology signed a decade-long foundry agreement to produce 8-inch MRAM, TMR sensor, and STT-MRAM wafers at its Fab 4 site in Gresham, Oregon. Everspin expects to receive Toggle and sensor capacity in about 18 months, with STT following around the 30-month mark.
Competitive Landscape
Everspin remains a niche player in the memory market, competing against larger manufacturers such as SK Hynix, Micron, and Samsung in the persistent memory space. Analyst Richard C. Shannon of Craig-Hallum raised his price target on Everspin to $17.50 from $11.00, maintaining a Buy rating, though the new target lagged behind Friday's closing price. The contract's revenue recognition may be uneven due to milestone payments and the contractor's right to terminate if the Navy prime contract ends.
