Netlist (NLST) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 net sales of $104.9 million, up 262% year-over-year, with net income of $8.6 million, reversing prior losses, driven by robust demand for memory products, especially in AI and data center markets.

• Gross profit rose to $22.4 million, with gross margin improving to 21% from 4% year-over-year, supported by higher sales prices and favorable product mix.

• Product portfolio ramping includes DDR5 RDIMMs/UDIMMs, custom DDR4 solutions, and next-gen CXL, NVDIMM, and MRDIMM products.

• Continued advancement and enforcement of patent portfolio, with multiple favorable legal outcomes and ongoing litigation.

• Performance was boosted by tight industry supply, rising prices, and strategic positioning in AI memory technologies.

Financial highlights

• Q1 2026 revenue reached $104.9 million, up 262% year-over-year, with gross profit of $22.4 million and net income of $8.6 million.

• Operating income was $8.6 million, an $18 million improvement year-over-year.

• Gross profit margin improved to 21% due to tight supply, rising DRAM prices, and strong demand.

• Operating expenses declined as a percentage of revenue, with continued R&D and SG&A investment.

• Received $10.5 million in proceeds from warrant exercises after quarter-end.

Outlook and guidance

• Memory supply constraints expected to persist until new fabrication capacity comes online in late 2027 or 2028, with relief likely delayed until 2029.

• Industry analysts expect DRAM pricing to rise through the year, though at a slower pace.

• Future results may be affected by the expiration of a key supply agreement with SK hynix, though purchases continue on a purchase order basis.

• Company remains well-positioned to scale product business and advance IP strategy.

• Ongoing litigation outcomes and potential recoveries are not recognized until realization is probable and estimable.