Netlist (NASDAQ:NLST) Reports Q2 2025 Revenue Beat but Stock Plummets on Persistent Losses

Netlist Inc. (NASDAQ:NLST) reported its second-quarter 2025 financial results, delivering revenue that significantly exceeded analyst expectations while meeting earnings per share (EPS) estimates. The company posted revenue of $41.7 million, a 44% sequential increase from the first quarter of 2025 and well above the consensus estimate of $30.6 million. However, Netlist reported a net loss of $6.1 million, or ($0.02) per share, aligning closely with the anticipated ($0.0204) EPS loss.

Key Financial Highlights

• Revenue Growth: Netlist’s Q2 revenue surged to $41.7 million, up from $36.8 million in the same quarter last year, driven by strong demand for DDR5 memory modules in AI and data center applications.
• Gross Profit Improvement: Gross profit rose to $1.4 million, compared to $0.8 million in Q2 2024, reflecting better operational efficiency.
• Operating Expenses Decline: Operating expenses decreased by 31% sequentially and 52% year-over-year, primarily due to lower intellectual property legal fees.
• Net Loss Narrows: The net loss improved to ($6.1 million) from ($14.8 million) in the prior-year period, aided by cost reductions.

Market Reaction

Despite the revenue beat, Netlist’s stock fell sharply in pre-market trading, dropping over 16%. This reaction suggests investor concerns about the company’s ongoing losses and working capital deficit, which stood at ($8.2 million) as of June 28, 2025. The stock had gained nearly 4% over the past month, possibly reflecting optimism ahead of earnings, but the post-earnings decline indicates disappointment over profitability.

Legal and Business Developments

CEO C.K. Hong highlighted progress in intellectual property litigation, including a finalized $445 million damages award against Micron for patent infringement. The company also filed new legal actions against Samsung and Micron related to its HBM and DDR5 patents. These legal efforts could provide future monetization opportunities but continue to weigh on near-term financials.

Looking Ahead

Netlist did not provide explicit forward guidance in its press release. However, the company’s focus on AI and data center memory solutions positions it in a high-growth sector, which could drive future revenue expansion if execution improves.

For a deeper dive into Netlist’s earnings and analyst estimates, visit Netlist’s earnings page.

Disclaimer: This article is not investment advice. Investors should conduct their own research before making any financial decisions.