Netlist, Inc. (PNK:NLST) Q3 2023 Earnings Call Transcript

Suji Desilva: Okay. Okay, Chuck, that’s very helpful. Maybe on the financial scale, the litigation expense went up here. Is that something we should expect to stay elevated the next few quarters or is that because of all the activity in the quarter that it spiked up here?

Gail Sasaki: Yes. I think that over the next couple of quarters that will be elevated and then it will track down from there.

Suji Desilva: Okay, great. And then last question, as the revenues recover here, just what elements are needed for the gross margin to recover to prior levels? I know it’s relatively lower here, just to understand what needs to happen for that expansion to happen again?

Gail Sasaki: Well, we have seen a shift in pricing as we enter Q4. So I think ASPs going up will help the flexibility in our pricing and as we — as demand has increased it’s going to help on the customer side in terms of better prices. And then as we continue to purchase more and more, it should help our buying power from Hynix. So that is significant part of our revenue is the resale piece, but we’ll start to see some of our custom projects kick in to the revenue over the next several quarters and those obviously tend to be much higher margins and that will be part of the increases as we go through 2024.

Suji Desilva: All right. Thanks Gail, thanks Chuck.

Chuck Hong: Thank you, Suji.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.