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The Value of Working with Platform Companies

Since our financial results call on November 6, I have been asked a few times to further clarify the business potential related to the “mega-cap company” I referred to during the call. Given this important topic, I determined it would be worthwhile to share more context here in the form of a public blog.

For background, I’ve shared with many of you that we are always analyzing our go-to-market strategy for improved efficiency and leverage. During our earnings call, I shared our belief that we can multiply the scale of our go-to-market strategy by working with “Platform Companies.” As we mentioned in the call, Platform Companies generally have created global-scale businesses by providing a mix of free and paid services to a large pool of users. This large pool of users can represent a big enough served available market to allow all of our interrelated businesses to grow at a healthy pace, including those for our EOS S3 voice and sensor processing platform, our EOS S3 AI solution, our SensiML AI software platform, and our eFPGA IP technology.

On the call, I announced that we have signed an agreement with a specific mega-cap Platform Company in which we will work together to create and market an IoT development platform based on our EOS S3 as the host processor, and which uses open-source tools for the ARM MCU and eFPGA cores. We are now jointly engaged with a third-party company with a proven track record of delivering open source tools. Together we will provide a complete development system, which will enable QuickLogic and the Platform Company to distribute thousands of low-cost development kits. The target launch date is the end of the first quarter of 2020. That’s great news not only for our EOS S3/S3 AI platforms and for our embedded FPGA business, but also for SensiML software as well since we expect it to be one of several AI software platforms supported by these dev kits.

The obvious follow-up question we are receiving is “how big could this initiative be and when will it show up in your financial results?”

The short answer is that we believe it could be a very strong driver for all three businesses we just mentioned.

Because this company has the potential to deliver as many as 100X more kits than our current sales channels under our previous go-to-market strategy, the user base for the EOS S3/S3 AI platforms could be correspondingly higher. Our SensiML AI software platform and associated SaaS subscriptions should also be significantly greater. Finally, our eFPGA relationship with that company will deepen as they gain experience with the technology and come to appreciate the full range of potential benefits it can provide.

Although it is impossible for us to accurately forecast the full impact of this program on future QuickLogic revenues and earnings at this time, we do expect that it has the potential to drive greater exposure and growth for our EOS S3/S3 AI, SensiML, and eFPGA businesses. This program increases our confidence that our financial performance in 2020 should be much better than in 2019.

We look forward to providing further updates during our next earnings call.

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