Netlist Reports $9.5 Million Net Loss in Q1 2025, Improved from Previous Year

Netlist, Inc. reported a net loss of $9.5 million for the first quarter of 2025, a significant improvement compared to a net loss of $17.0 million in the same period of the previous year. The company’s net sales for the quarter were $28.975 million, down 19% from $35.807 million in the first quarter of 2024. Despite the decline in sales, Netlist achieved a gross profit of $1.3 million, an increase of 82% from $715,000 year-over-year, attributed to a favorable product sales mix.

Operating expenses decreased to $11.067 million from $18.097 million in the prior year, primarily due to a 63% reduction in research and development costs, which fell to $893,000. This reduction was largely driven by a decrease in employee headcount and associated overhead costs. Intellectual property legal fees also saw a significant decline of 44%, reflecting lower expenses related to patent enforcement and licensing. Selling, general, and administrative expenses remained relatively stable, increasing slightly from $3.116 million to $3.147 million.

In terms of operational metrics, Netlist's cash and cash equivalents, along with restricted cash, totaled $25.580 million as of March 29, 2025, down from $34.607 million at the end of the previous fiscal year. The company reported a working capital deficit of $14.991 million, compared to a deficit of $7.305 million at the end of December 2024. The decrease in cash was primarily due to net cash used in operating activities, which amounted to $10.070 million for the quarter, reflecting the net loss and changes in operating assets and liabilities.

Strategically, Netlist entered into a purchase agreement with Lincoln Park Capital Fund, allowing the company to sell up to $75 million in shares of common stock over a 36-month period. As of March 29, 2025, approximately $74.1 million remains available under this agreement. The company also continues to rely on its revolving line of credit with Silicon Valley Bank, which provides up to $10 million, although no availability was reported as of the latest quarter.

Looking ahead, Netlist remains focused on its strategic initiatives, including the expansion of its patent portfolio and the development of new products. The company believes that its existing cash resources, along with potential proceeds from equity offerings and its credit facilities, will be sufficient to meet its anticipated cash needs for at least the next 12 months. However, management acknowledges the ongoing risks associated with market conditions and operational challenges, particularly in the competitive landscape of the memory and storage solutions industry.