Atomera Incorporated Common Stock 2026 Q2 Earnings Call

Hello, everyone, and welcome to Atomera's second quarter 2026 update call. I'd like to remind everyone that this call and webinar are being recorded, and a replay will be available on Atomera's IR website for one year. I'm Mike Bishop with the company's investor relations. As in prior quarters, we are using Zoom, and we will follow traditional presentation format with participants in a listen-only mode. We will open with prepared remarks from Scott Bibaud, Atomera's President and CEO, and Frank Laurencio, Atomera's CFO. We will open the call to questions. If you are joining by telephone, you may follow a slide presentation to accompany our remarks on the Events and Presentations section of our investor relations page on our website. Before we begin, I would like to remind everyone that during today's call, we will make forward-looking statements.

These forward statements, whether in prepared remarks or during the Q&A, are subject to risks and uncertainties. These risks and uncertainties are detailed in the Risk Factor sections of our filings with the Securities and Exchange Commission, specifically in the company's annual report in Form 10-K filed with the SEC on February 24th, 2026. Except as otherwise required by federal securities laws, Atomera disclaims any obligations to update or make revisions to such forward-looking statements contained herein or elsewhere to reflect changes in expectations with regards to those events, conditions, and circumstances. Please note, during this call, we will be discussing non-GAAP financial measures as defined by SEC Regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today's press release, which is posted on our website.

I would like to turn the call over to our President and CEO, Scott Bibaud. Go ahead, Scott. Thanks, Mike.

Good afternoon, everyone. Q2 was a quarter of real momentum. Our customer engagements advanced across each of our target markets. We've had promising signs of new markets developing, and again, we turned a technical breakthrough into the early stages of a genuine commercial pipeline. Today, I'll move through Gate-All-Around, our broader customer activity, the growing pull we're seeing in memory, and then I'll spend real time on GaN, where I believe we may be witnessing the opening of a significantly new market for Atomera. Let me start with Gate-All-Around. By now, you all know why this technology transition is so important, so I'll go straight to the news.

We continue to work with two of the four players in this space. This quarter we passed a significant milestone with one of the two active Gate-All-Around customers, opening the door to further work on their unique silicon structures. These customers typically ask for a sequence of demonstrations before they'll accept a new material into their process flow. Clearing this stage is a meaningful step rather than a formality. It directly answers the manufacturability questions this customer had put in front of us. We remain in active discussions with the other two of our four target GAA customers. Our strategic partner continues to provide both the advanced test infrastructure and the ecosystem credibility that enables us to get in the door and helps us to stay there. Memory is an area where interest is clearly accelerating.

The large memory manufacturers are under real pressure to add both capacity and performance. They have the budgets to evaluate options that can help them get there. Up until recently, we had significant interest from DRAM customers focused on our value proposition for planar periphery enhancements. Suddenly, our customers' direction changed. The major underlying factor was that AI demand accelerated and pushed DRAM manufacturers to the vertical scaling era, including 4F² and 3D DRAM, and other advanced architectures. We can be confident from our interactions, however, that the technical merit of our value proposition for planar periphery is strong. Today, we've established a new value proposition for 4F² DRAM, validated through discussions with multiple customers.

We have shown that an MST starting wafer enables a vertical DRAM access transistor to be built using a next-generation DRAM fabrication process that is much cheaper than most of the DRAM industry is currently pursuing. Our new concept solves fundamental device challenges in 4F² while offering significant cost savings by leveraging MST's precise doping profile control capabilities. In addition to meeting with customers, we have completed a TCAD simulation study demonstrating its feasibility. The results have been accepted to be presented at an IEEE conference in September. Traditionally, the technology in NAND flash memory's periphery circuit have lagged far behind DRAM, even though NAND memory cells themselves moved to 3D structures many years ago. In the history of Atomera, we have never established a serious value proposition for flash memory.

That situation may be changing because in the last few weeks, we have learned from a major NAND supplier that AI is now pushing NAND to the point that they need the planar periphery boost that MST can provide. We have spent the last five years perfecting this value proposition for DRAM. Now it is applicable to NAND. If adopted by NAND flash manufacturers, this more than doubles the TAM for MST, which would obviously be very commercially significant. Turning to the rest of our pipeline, our large IDM customer program continues to progress according to plan. We're now at a stage where new device test data is coming in even as the next batch of experiments gets underway. Development efforts are moving fast. Our teams are working closely together.

We are also working with other companies and engagements in power, and our trench FET and HBT development continues to advance, aimed squarely at the efficiency and high-frequency demands emerging from AI data centers. In RFSOI, wafers are still running with our second JDA partner, and we remain confident they will replicate the positive results we've demonstrated on other customer silicon. Internally, our work on a high-throughput manufacturing process for RFSOI, where the substrate supply chain is crucial, is also going well and may be applicable to multiple other applications. RF manufacturers have long relied on the characteristics of RFSOI substrates for switch and LNA performance, but they're also interested in future designs using gallium nitride due to its significant performance advantages, including the potential for fully integrated RF front ends, including power amplifiers.

Unfortunately, due to silicon substrate parasitics, GaN RF development has been mostly limited to GaN-on-silicon carbide, which is a very expensive specialty starting wafer. Which brings me to the exciting news regarding their preferred starting material, GaN-on-silicon. In our May update call, we shared how MST could help solve parasitic channel problems in GaN-on-silicon, but we hadn't gotten the RF test results that could completely illustrate MST's effect. Later that month, performance data finally arrived, and we announced a technical breakthrough. MST makes GaN-on-silicon for RF devices commercially attractive. Our characterization partner, Infosys, has now delivered RF data for MST-enabling GaN-on-silicon that is frankly outstanding. The devices deliver effectively lossless RF together with outstanding harmonic distortion performance, leading to exceptional linearity.

At the benchmark drive level, linearity is roughly 1,000 times better than the GaN-on-silicon reference, and that improvement remains two to three orders of magnitude across the full sweep of power. We know of no other GaN-on-silicon substrate that can duplicate these findings. Just as important, these results approach the linearity and loss figures of advanced trap-rich RFSOI, the technology RF designers typically reach for when they need this class of performance. Our partners at Infosys independently confirmed these benefits on their own world-class baseline, which is exactly the kind of third-party validation customers appreciate. For more details on our GaN-on-silicon test results, please see the white paper on our website. In June, we took this data to IMS, the International Microwave Symposium, and the results were terrific.

Our announcement generated real enthusiasm on the show floor, and as a direct result, we are now working with several new potential customers who want to evaluate MST GaN-on-silicon in their own designs. Here's why this matters strategically. Because our GaN-on-silicon results are now approaching RFSOI class performance, but on a low-cost silicon substrate, and with the inherent power and frequency headroom that GaN provides, we believe some designs that would traditionally be built in RFSOI could instead move to GaN-on-silicon. That would be a meaningful shift in how RF front-end designs get built, and MST's performance may well be the catalyst that sets it in motion.

If new RF design activity begins migrating towards GaN on silicon, Atomera would be positioned right at the start of a new high-growth market, and it's worth underscoring that MST is the enabler on both sides of that shift. Whichever path a customer chooses, Atomera benefits. To summarize, we cleared a key Gate-All-Around milestone, established a new next-gen value proposition for DRAM, opened a new front in memory with NAND, kept our pipeline moving across power and RFSOI, and turned our GaN breakthrough into hard RF performance data, real industry enthusiasm, and new customers with the potential to seed an entirely new RF market. This is an exciting time to be at Atomera. I'll turn the call over to our CFO, Frank Laurencio, to review our financials.

Thank you, Scott. At the close of the market today, we issued a press release announcing our results for the second quarter of 2026. This slide shows our summary financials. Revenue in the second quarter was $158,000, consisting of fees for wafer deliveries to customers, primarily to our large IDM customer. Our GAAP net loss for the second quarter of 2026 was $6.3 million, or $0.17 per share, compared to a net loss of $5 million, also $0.17 per share, in the second quarter of 2025. On a non-GAAP basis, our loss for the second quarter was $5 million compared to a loss of $4 million in the second quarter of 2025. GAAP operating expenses were $6.9 million in the second quarter of 2026, an increase of approximately $1.7 million from $5.2 million in the second quarter of 2025.