Atomera outlines new MST implementation and revised STMicroelectronics engagement as company accelerates customer evaluations across power and memory segments

Earnings Call Insights: Atomera Incorporated (ATOM) Q3 2025

MANAGEMENT VIEW

* Scott Bibaud, President and CEO, reported that "our work with STMicroelectronics on their smart power platform reached an inflection point this quarter" as Atomera achieved significant performance improvements, but reliability issues meant the solution did not meet all ST's specifications. ST then shifted focus to a 300-millimeter platform for their BCD110, discontinuing MST integration for this generation and removing the near-term line of sight to royalty revenue from this program.
* Bibaud highlighted that Atomera discovered a new MST implementation validated by TCAD simulations, which doubled performance improvements without compromising device lifetime, stating this is "a significant new differentiator for us going forward, one that we are already actively discussing with other players in this market."
* Atomera processed a record number of wafers for customers during the quarter and is prioritizing rapid revenue opportunities, particularly through MST starting wafers for RF-SOI, gallium nitride (GaN), and potential next-generation DRAM applications.
* The company announced the appointment of Wei Na as VP of Sales, citing his experience in growing semiconductor technology licensing businesses and expectation that "his leadership will help us both grow sales and convert existing opportunities into licenses."
* Francis Laurencio, CFO, stated, "Our GAAP net loss for the third quarter of 2025 was $5.6 million or $0.17 per share compared to a net loss of $4.6 million, which was also $0.17 per share in Q3 of last year."

OUTLOOK

* The company expects to recognize between $75,000 and $125,000 of NRE revenue in Q4 2025 from wafer shipments to customers, with associated revenue recognition extending into next year.
* Non-GAAP operating expenses for full year 2025 are forecast in the range of $17.25 million to $17.50 million.
* Bibaud emphasized continued engagement with ST in other technology areas and confirmed ongoing experiments under their license, stating "ST has reiterated their intent to continue working with us in other technology areas where MST could add value."

FINANCIAL RESULTS

* GAAP operating expenses in Q3 2025 were $5.7 million, up from $4.8 million in Q3 2024, with the increase attributed primarily to higher R&D and general and administrative expenses.
* Non-GAAP net loss in Q3 2025 was $4.4 million, compared to $3.9 million in Q3 2024, driven by increased non-GAAP operating expenses.
* Atomera's cash and cash equivalents as of September 30, 2025, were $20.3 million, down from $22 million as of June 30, 2025. Cash used in operating activities for Q3 was $3.4 million.
* The company raised approximately $2 million during Q3 through its ATM facility and an additional $836,000 since quarter-end.
* Gross margin was negative in the quarter due to costs incurred for MST deposition work ahead of revenue recognition from related wafer shipments.

Q&A

* Richard Shannon, Craig-Hallum Capital Group LLC: Asked about the technical trade-off and timeline with STMicroelectronics. Bibaud explained the solution for performance and reliability was validated in simulation but could not be incorporated in time for ST's 300-millimeter launch, confirming that "they confirmed it. It makes us feel very confident to bring it out into the market as a new product."
* Shannon inquired about leveraging learnings from the ST engagement for other power customers. Bibaud responded that the new technique can be applied to other customers, stating "we're not taking anything from -- any proprietary ST information. This is like a standard design technique that we can suddenly make work because of MST."
* Shannon probed on the status and number of "transformative customers." Bibaud clarified that while two such customers remain active, "we're working with more than just those 2 that I mentioned on the call," and the company is engaged with several large customers across multiple segments.
* Shannon sought updates on demo runs and revenue recognition. Laurencio indicated revenue guidance covers "multiple customers, 3 different customers," and that timing of wafer shipments is iterative and customer-driven.
* Additional questions covered application areas for MST starting wafers, the breadth of engagement with a major capital equipment partner, and project timelines for Gate-All-Around collaborations. Bibaud and Laurencio provided technical and operational context, noting most Gate-All-Around launches remain a few years out, but some customers are exploring MST for current yield improvements.

SENTIMENT ANALYSIS

* Analyst questions were persistent and focused on commercial progress, revenue timing, and the impact of the STMicroelectronics development. The tone was slightly negative, especially regarding clarity on transformative customer progress and future royalty streams.
* Management maintained a neutral-to-slightly-defensive tone when addressing STMicroelectronics and revenue recognition, while expressing confidence in the broader opportunity set: "we can take that out to other customers, and they kind of understand the concept immediately."
* Compared to the previous quarter, management’s confidence in long-term prospects was consistent, but the immediate loss of visibility on STMicroelectronics royalties prompted more defensive explanations and clarifications.

QUARTER-OVER-QUARTER COMPARISON

* The major change this quarter is the loss of immediate royalty revenue visibility from the STMicroelectronics BCD110 program, compared to last quarter’s expectation of future qualification payments and market entry.
* While the previous quarter focused on expanding customer engagements and new applications, this quarter’s discussion emphasized the technical breakthrough in MST implementation and the shift to a broader customer base following the STMicroelectronics outcome.
* Analyst focus shifted from timelines for STMicroelectronics process qualification to questions about customer diversification, demo run status, and commercialization timing.
* Management’s tone moved from optimistic about specific milestones to emphasizing resilience, new differentiators, and wider opportunity pipelines.

RISKS AND CONCERNS

* Management explicitly acknowledged the disappointment of losing the STMicroelectronics BCD110 revenue opportunity and the challenge of integrating new materials into mass production.
* The company faces the risk that major customer transitions or delays can disrupt anticipated revenue streams.
* Atomera’s reliance on iterative customer testing and qualification processes introduces variability in timing for revenue recognition.
* Increased R&D and compensation expenses have widened losses year-over-year and sequentially.
* Management’s mitigation strategies include prioritizing MST starting wafer products for faster revenue, leveraging strategic partnerships, and expanding the sales team to accelerate license conversions.

FINAL TAKEAWAY

Atomera’s Q3 2025 call highlighted a pivotal shift as the company lost short-term royalty revenue prospects from its STMicroelectronics power platform engagement but achieved a major technical breakthrough with a new MST implementation. Management underscored a record level of customer wafer activity, a growing pipeline across multiple semiconductor segments, and renewed emphasis on faster-to-revenue applications and strategic partnerships. The appointment of a new VP of Sales is intended to drive commercial progress, while ongoing fiscal discipline remains a priority. Although the near-term revenue outlook is affected by recent developments, Atomera believes its expanded customer base and improved technology set the stage for future growth and broader industry adoption.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/atom/earnings/transcripts]

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