With a mix shift towards IC sales (relative to royalties/licensing) leading gross margin to fall to 57% from Q4's 78% and the year-ago period's 99%, MoSys (MOSY -4.3%) missed Q1 EPS estimates even though revenue was roughly in-line.
On the CC (transcript), CEO Leonard Perham noted low initial volumes for MoSys' Bandwidth Engine networking SRAM chips is limiting margins for now. But he expressed confidence "the Bandwidth Engine family is going to be a 60%-plus gross margin product."
CFO James Sullivan suggested first the first-gen Bandwidth Engine (BE1) could have trouble seeing a 50%+ GM, but thinks the second-gen product (BE2) will have a much better margin profile.
Perham asserts MoSys "should record substantially more design wins in 2014 than 2013." At the same time, he cautions "the critical inflection point where revenue ends up is still illusive, most difficult to forecast."
Opex rose 49% Y/Y to $8.9M (compares with revenue of $1.3M). MoSys ended Q1 with $45.7M in cash/investments, down from $50.5M at the end of Q4.
Q1 results, PR