A：Risks and uncertainties that may affect Quicklogic's financial outcomes include potential delays in the market, customer acceptance of new products, the ability to convert design opportunities into revenue, replacement of revenue from end-of-life products, customer design activity levels, market acceptance of customers' products, new order conversions into future revenue, timely introduction of new products, pricing competitiveness, intense competition, hiring and retaining qualified personnel, changes in product demand or supply, general economic conditions, political events, international trade disputes, natural disasters, other business interruptions, and changes in tax rates.

A：The updated guidance for Q2 revenue is at the low end of the previous guidance range, and Q3 revenue is forecasted to be flat. The full year growth outlook has been narrowed to a range of 70% to 80%.

A：New markets and customer segments expected to contribute to Quicklogic's growth include automotive, robotics, and commercial satellite applications.

A：The delay in Q2 revenue recognition is due to the customer reevaluating the functions to be placed in the embedded FPGA versus the fixed portion of its ASIC. This delay is the sole reason for Q2 revenue being at the low end of the guidance range and has removed the forecasted revenue from the contract extension from the Q3 and full year revenue forecast.

A：The contract with the US government has been increased to a total ceiling value of $125 million, and revenue recognition from this contract is expected to contribute a significant percentage of total Q2 revenue.

A：Continued receipt and delivery of orders for the Rad Pro Dev Kit is a positive trend, with the expectation that evaluations already underway will result in initial demand for storefront devices in 2027.

A：The contract with Global Foundries targets the 12 o process and includes discrete FPGA test chips with a $2.7 million ceiling value. This contract will contribute to the development of a new evaluation kit and the provision of test chips for development, impacting product development and potentially leading to additional revenue from the sale of discrete and integrated solutions.

A：The release of Intel's new 18 AP will likely accelerate design activity, as most customers' development and design activity in Intel Ed A has shifted to this new capability. Quicklogic expects that leveraging the development work completed for Intel Ed A will result in minimal time and cost for developing EFPGA hard IP for Intel 18 AP. This transition is anticipated to focus new design activity on Intel 18 AP and potentially increase opportunities for Quicklogic's Vf PGA heart IP.

A：The company was awarded a feasibility study contract to evaluate their EPG IP for a specific use case. After completing the contract, the customer is assessing whether a custom implementation of the IP, targeting its proprietary process, will meet its power, performance, and area (PPA) requirements. Initial results look promising, and a decision on the custom implementation is expected to lead to an efPGA IP architectural license later in the year.

A：In response to the interest from existing customers for smaller packages, the company has entered into a contract with one customer to fund and qualify the smaller package for new designs. The company sees this as a potential new multi-million-dollar market that requires minimal ongoing operational investment. They are working closely with this customer and other defense companies to fully leverage this opportunity.

A：The purpose of the company's digital proof of concept strategy is to provide a cost-effective way for both the company and prospective chiplet customers to execute evaluations. This strategy has led to over 500 active proposals and includes chiplets targeting various fabrication processes. The strategy aims to enable customers to move beyond software simulations to real hardware evaluations.

A：The total second quarter revenue was $5.5 million, up 48.7% from Q2 2025 and up 8.5% from Q1 2026 due to a delay in the extension of an existing contract. New product revenue in Q2 was $4.7 million, up 59.7% from Q2 2025 and up 8.6% compared to Q1 2026. Mature product revenue was $0.8 million, up 6.9% compared to Q2 2025 and up 8.8% from Q1 2026.

A：Non GAAP gross margin in Q2 was 46.8%, which was above the midpoint of the outlook and a significant increase from 30% in Q2 2025 and 39.6% in Q1 2026. Non GAAP operating expenses in Q2 were approximately $3.4 million, which was slightly above the outlook of $3.3 million. This compared to $2.5 million in Q2 2025 and $3.2 million in Q1 2026.

A：The non GAAP net loss in Q2 was $1.1 million, or a loss of 6 cents per share, which compares to a non GAAP loss of $1.5 million, or a loss of 9 cents per share, in Q2 2025 and a non GAAP loss of $1.3 million, or a loss of 8 cents per share, in the first quarter of fiscal 2026.

A：The main differences between GAAP and non GAAP results are related to non-cash stock based compensation expenses, restructuring charges, and the removal of a significant non-recurring gain. Stock based compensation in Q2 was $753,000 compared to an outlook of $901,000. Impairment charges were $0 in Q2 2026 compared to $30,000 in Q2 2025 and $16,000 in Q1 2026. Additionally, a non-recurring gain of $950,000 was removed from GAAP results in Q2 2026, which did not occur in the previous year's quarters.

A：For the third fiscal quarter ending September 27, 2026, the total revenue guidance is between $12 and $14 million, with an expected revenue mix of $4.7 million in new product revenue and $0.8 million in mature product revenue. The non GAAP gross margin is expected to be approximately 47% plus or minus 5%. The forecasted non GAAP operating expense is approximately $3.6 million plus or minus 5%.

A：The full-year non GAAP operating expense outlook has been raised to a range of $13.7 to $13.9 million, indicating an expected growth of approximately 17% over 2025, compared to the previous outlook of 20% to 20% growth.

A：The forecasted QR net loss per share for the third quarter is about 4 cents or a loss of approximately 49 cents per share. The company still anticipates non GAAP profitability for the second half of the fiscal year.

A：The company expects non GAAP stock based compensation expenses in Q3 to be approximately $828,000, which is a comparison to $828,000 in Q3 2025 and $753,000 in Q2 2026. The stock based compensation may vary quarter to quarter based on the timing of when stock options are exercised.

A：Based on the current outlook, the company anticipates positive cash flow during the second half of the fiscal year. They expect to close the quarter with a net cash balance of slightly over $12 million, and they anticipate being cash flow positive.

A：The company has multiple chiplet opportunities in the works, which are expected to lead to new contracts and storefront orders beginning in late Ed. There are also two or more kouts that are going for late 2026, providing enough devices to support initial production orders through their storefront initiative.

A：The company expects to support demand for the Rad Pro Eval Kit and anticipate new orders through the second half of Ly. They are optimistic that this will lead to initial storefront orders in Ly. Additionally, they anticipate securing a contract for a second architectural license in 226, and will collaborate with the end customer to develop a device for its proprietary fabrication process.

A：The company meets regularly between their business and engineering teams to ensure technical resources are available and prioritize revenue recognition related work. They are scheduling work now to meet delivery timelines for the contracts discussed. Closing these contracts is more on the business side, while the engineering team is lined up and ready to deliver on the revenue recognition expectations.

A：Customers are planning to transition from Intel 1882 to 18 AP, with de minimis porting costs due to existing development work. The timing of revenue recognition may be affected if customers wait to redesign for 18 AP. However, the company has multiple opportunities, including a revenue stream from an existing 1 million IP contract, and can leverage past work for new customers moving to 18 AP. Subsequent licenses or derivative licenses off the initial work are cost and time-effective.

A：While the company cannot quantify the number of development kit customers expected to transition to store revenue next year, they do believe there will be significant revenue related to evaluations taking place on those development kits. They have high confidence that these activities will lead to storefront sales next year. The opportunity set has expanded, as more groups are engaging with the company, and additional evaluations are expected to be supported through December.

A：The strategic grant opportunity has expanded as the company is engaged with more groups now than in the last quarter. This is natural as real silicon and test kits are being utilized, opening new opportunities with groups who were previously in a wait-and-see mode. The company expects to see more dev kits going out to support additional evaluations, although they cannot disclose more due to non-disclosure agreements.

A：The company is currently operating and executing on the $13 million tranche, which was announced in mid December of the previous year. It is forecasted to be fully recognized during the fiscal year 2026.

A：While the exact percentage of the customer base that the US government represents is not clear, understanding the percentage could provide insight into potential future revenue from government projects.

A：For the second half of the year, the expected range for the EFGA license and related NRE work from the US government is about 8 million to 10 million.

A：The company is executing on several larger IP contracts that are already signed and has a few in late-stage negotiations. Even if not all late-stage negotiations are won, the company is confident in meeting its revenue growth targets for the year.

A：The shift in process node to a more advanced process by the customer will lead to an extension of the current agreement with the customer, which is anticipated to positively impact the revenue for the company.

A：Yes, the $8 million revenue number mentioned is inclusive of the revenue from the government side because that is considered one bucket of revenue for the company, combining both services and IP revenue.

A：The midpoint sales guidance remained the same because, during the initial outlining of the range, the company was being conservative, which is why the midpoint stayed the same despite the loss of a contractor.

A：The company anticipates that storefront revenue could be in single digit millions of dollars next year, driven by various test jobs, silicon that will be available for sale, and potential early device test ship revenue from government channels.

A：The company is gathering feedback from customers who have received development kits for the new Rad Pro products, but specific time frames for decisions from lead customers were not provided in the transcript.

A：The speaker is hopeful that the company will receive indications by the end of the year regarding customer feedback and plans for the following year.

A：The company's product is gaining acceptance as more engineers within customer companies become familiar with the software and devices, and start identifying programs of record to implement.

A：The speaker refers to a known question about disclosing the percentage of sales from the top 10 customers in the second quarter but does not provide the information directly in the provided transcript content.

A：Post-quantum computing is relevant to the company's outlook because there is a desire to protect critical infrastructure from potential hacking by deploying more advanced cryptographic systems. The speaker mentions a presidential order that emphasizes the need for these systems to be protected, which aligns with the company's technology offerings.

A：The company's eFPGA technology fits into the post-quantum computing landscape by allowing the integration of reprogrammable eFPGA cores into systems, which can accommodate the evolving post-quantum cryptographic algorithms. This flexibility is highly sought after by entities looking to protect critical infrastructure.

A：The company's current relationship with PQ Secure is more advanced than past collaborations, such as with ETH Zurich. While ETH Zurich focused on research around low power computing with eFPGA, the current engagements involve working with companies and research institutes on the deployment of post-quantum cryptographic algorithms, aiming for real products and revenue generation.