Netlist (NLST) investor relations material

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 RDIMM technologies.

• 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 technologies.

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

Financial highlights

• Q1 2026 revenue reached $104.9 million, up 262% year-over-year, with operating income of $8.6 million versus a loss of $9.8 million in Q1 2025.

• Gross profit margin improved to 21% in Q1 2026, up from 4% in Q1 2025, due to tight supply, rising DRAM prices, and strong demand.

• Cash, cash equivalents, and restricted cash totaled $27.0 million as of March 28, 2026, with $10.5 million in proceeds from warrant exercises after quarter-end.

• Working capital improved to $9.3 million, and stockholders’ equity turned positive to $10.4 million at quarter-end.

• Net cash used in operating activities was $21.8 million, mainly due to inventory build and increased receivables.

Outlook and guidance

• Industry-wide supply constraints expected to persist until new fabrication capacity comes online in late 2027 or 2028, with relief possibly delayed until 2029.

• Analysts expect DRAM pricing to rise through the rest of 2026, 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.