Netlist Reports Third Quarter 2026 Results

Samsung license revenue carried no associated cost of sales, contributing to the improvement in gross margin.

Rhea-AI Summary

Netlist (NLST) reported third-quarter 2026 net sales of $105.1 million, reflecting higher product sales and initial Samsung license revenue. Sales rose 149% year over year for the quarter ended September 26, 2026. Product sales increased 43% to $60.2 million, while license revenue totaled $44.9 million. Gross margin reached 65.5%, versus 4.4% a year earlier.

Operating income was $40.6 million, versus a $7.2 million loss. Net income reached $85.4 million, or $0.22 per diluted share, versus a $7.0 million loss; results included a $43.982 million income tax benefit. Cash, cash equivalents and restricted cash rose to $327.7 million from $40.7 million at June 27, primarily reflecting Samsung payments. Nine-month operating cash flow was $244.991 million. Quarterly intellectual-property legal fees and selling, general and administrative expenses increased to $16.211 million and $11.021 million, respectively.

18 points · 1 major

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0 major · 7 points

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Positive

• Major pointSamsung paid $200 million initially and $27.5 million for the first quarterly payment.
• Moderate pointThird-quarter net sales rose 149% year over year to $105.1 million.
• Moderate pointThird-quarter gross margin reached 65.5%, versus 4.4% a year earlier.
• Moderate pointThird-quarter operating income reached $40.6 million, versus a $7.2 million loss a year earlier.
• Moderate pointThird-quarter net income reached $85.4 million, or $0.22 diluted EPS, versus a $7.0 million loss.
• Moderate pointNine-month operating cash flow reached $244.991 million, versus $27.995 million used in the comparable 2025 period.

12 minor points

• Minor pointThird-quarter product sales increased 43% year over year to $60.2 million.
• Minor pointSamsung license revenue totaled $44.9 million, including upfront-fee amortization and the first quarterly license fee.
• Minor pointThird-quarter income tax benefit totaled $43.982 million.
• Minor pointQuarter-end cash, cash equivalents and restricted cash rose to $327.7 million from $40.7 million at June 27.
• Minor pointNine-month net sales reached $319.841 million, versus $112.915 million in the comparable 2025 period.
• Minor pointNine-month product sales reached $274.931 million, versus $112.915 million in the comparable 2025 period.
• Minor pointNine-month gross profit reached $114.129 million, versus $4.530 million in the comparable 2025 period.
• Minor pointNine-month operating income reached $50.475 million, versus a $23.164 million loss in the comparable 2025 period.
• Minor pointNine-month net income reached $95.496 million, or $0.26 diluted EPS, versus a $22.575 million loss.
• Minor pointNine-month stock-option and warrant exercises generated $42.023 million; common-stock issuance generated $1.000 million net.
• Minor pointRevolving credit balance fell to zero at September 26, 2026, from $1.788 million at December 27, 2025.
• Minor pointStockholders' equity reached $157.944 million, versus a $5.203 million deficit at December 27, 2025.

Negative

• Moderate pointNine-month intellectual-property legal fees rose to $41.938 million from $15.542 million in the comparable 2025 period.
• Moderate pointThird-quarter weighted-average basic shares increased to 356.097 million from 292.557 million a year earlier.
• Minor pointThird-quarter intellectual-property legal fees rose to $16.211 million from $5.035 million a year earlier.
• Minor pointThird-quarter selling, general and administrative expenses rose to $11.021 million from $3.131 million a year earlier.
• Minor pointThird-quarter research and development expenses rose to $1.054 million from $0.822 million a year earlier.

2 minor points

• Minor pointNine-month selling, general and administrative expenses rose to $18.511 million from $9.604 million in the comparable 2025 period.
• Minor pointNine-month research and development expenses rose to $3.205 million from $2.548 million in the comparable 2025 period.

News Explained

At September 26, Netlist reported $327.7 million in cash, cash equivalents and restricted cash, while deferred revenue remained a liability.

Netlist reported results for the third quarter ended September 26, 2026. At quarter-end, its balance sheet showed $317,685 thousand in cash and equivalents and $10,000 thousand in restricted cash; deferred revenue was listed as $78,405 thousand current and $179,641 thousand noncurrent liabilities.

The nine-month cash-flow statement lists a $227,476 thousand increase in deferred revenue among adjustments to net operating cash flow of $244,991 thousand.

Key Figures

Net sales: $105.1 million, up 149% year over year License fee revenue: $44.9 million Net product sales: $60.2 million, up 43% year over year +5 more

Net sales

$105.1 million, up 149% year over year

Third quarter 2026

License fee revenue

$44.9 million

Third quarter 2026; recognized under the Samsung License Agreement

Net product sales

$60.2 million, up 43% year over year

Third quarter 2026

Gross margin

65.5% (vs. 4.4%)

Third quarter 2026 vs. third quarter 2025

Operating income

$40.6 million (vs. $7.2 million operating loss)

Third quarter 2026 vs. third quarter 2025

Net income

$85.4 million

Third quarter 2026

Cash, cash equivalents and restricted cash

$327.7 million

At September 26, 2026; company cited Samsung payments as the primary reason for the increase

Operating cash flow

$245 million

During the quarter, as stated by the company

Previous Earnings Reports

3 past events · Latest: Jul 30

Same Type 3 events

1. Jul 30

   Q2 earnings

   24h Move

   -2.5%

   Reported year-over-year sales growth and a return to quarterly net income.

2. May 12

   Q1 earnings

   24h Move

   -12.6%

   Reported year-over-year sales growth and net income versus a prior-year loss.

3. Nov 06

   Q3 earnings

   24h Move

   -2.1%

   Reported a quarterly net loss and $42.2 million in net sales.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

amortization, restricted cash, deferred revenue, diluted share

4 terms

amortization financial

"consisting of amortization of the upfront license fee"

Amortization is the process of spreading a large cost over a series of future periods, either by gradually writing off the value of an intangible asset (like a patent or license) or by showing how loan principal is paid down over time. For investors it matters because amortization affects reported profits and cash flow — similar to slicing a big bill into smaller monthly payments — and therefore influences valuations, comparisons between companies, and expectations for future earnings.

restricted cash financial

"Cash, cash equivalents and restricted cash rose to $327.7 million"

Cash that a company holds but cannot use for day-to-day operations because it is set aside for a specific purpose—such as meeting loan covenants, serving as collateral, funding an escrow, or complying with regulations. Like money in a locked savings account earmarked for a bill, restricted cash reduces the cash available to run the business and pay dividends or debts, so investors treat it differently when assessing a company’s true short-term financial strength.

deferred revenue financial

"Deferred revenue 78,405 30,570"

Cash a company has already received for goods or services it has promised but not yet delivered; it's recorded as a liability because the company still owes that product, service, or future revenue recognition. For investors, deferred revenue signals upcoming work or deliveries that will convert into reported sales over time and affects short-term obligations, cash flow quality, and how quickly a firm can grow recognized revenue—think of it like prepaid subscriptions or gift cards a business must honor later.

View in glossary

diluted share financial

"$0.22 per diluted share"

Diluted share count is the total number of company shares that would exist if all potential claims that can become stock—such as employee stock options, warrants and convertible bonds—were exercised or converted. Investors use diluted shares to see a more conservative view of ownership and per-share metrics (like earnings per share), because it’s like slicing a cake into more pieces: the same profit spread over more slices makes each slice smaller.

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Net sales rose 149% year over year to $105.1 million and included initial license fees from Samsung

Strengthened balance sheet with cash, cash equivalents and restricted cash rising to $327.7 million at quarter-end

IRVINE, Calif., Nov. 10, 2026 /PRNewswire/ -- Netlist, Inc. (OTCQB: NLST), a leading innovator in advanced memory and storage solutions, today reported financial results for the third quarter ended September 26, 2026.

Third Quarter 2026 Highlights:

• Net sales for the third quarter of 2026 were $105.1 million, an increase of 149% compared to the third quarter of 2025
• License fee revenue of $44.9 million was recognized in the third quarter of 2026 pursuant to the Samsung License Agreement, consisting of amortization of the upfront license fee and the first quarterly license fee.
• Net product sales for the third quarter of 2026 were $60.2 million, an increase of 43% compared to the third quarter of 2025.
• Gross margin for the third quarter of 2026 was 65.5%, an increase of over 61 percentage points compared to 4.4% in the third quarter of 2025, primarily reflecting license fee revenue, which has no associated cost of sales, and higher product gross margin.
• Operating income in the third quarter of 2026 was $40.6 million, which improved from an operating loss of $7.2 million in the third quarter of 2025.
• Net income for the third quarter of 2026 was of $85.4 million, or $0.22 per diluted share, compared to a net loss of $7.0 million, or $(0.02) per share, in the third quarter of 2025.
• Cash, cash equivalents and restricted cash rose to $327.7 million at September 26, 2026 from $40.7 million at June 27, 2026, primarily due to the initial cash payment of $200 million and first quarterly payment of $27.5 million by Samsung.

"We are pleased to report our third consecutive quarter of significant year-over-year revenue growth and improved profitability led by both product sales and the recognition of license revenue under our Samsung agreement," said Chief Executive Officer, C.K. Hong.  "Year-over-year product revenue growth was driven by strong demand from customers in AI and data center applications."

"Gross margins improved and was driven by our focus on higher margin opportunities," said Gail Sasaki, Chief Financial Officer. "During the quarter, we substantially strengthened our balance sheet with the initial proceeds from our Samsung agreement and generated operating cash flow of $245 million."

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, November 10, 2026 at 5:00 p.m. Eastern Time to review Netlist's results for the third quarter ended September 26, 2026. The live webcast and archived replay of the call can be accessed for 90 days in the Investors section of Netlist's website at www.netlist.com.

About Netlist

Netlist is a leading innovator in advanced memory and storage solutions. With a rich portfolio of patented technologies, Netlist's inventions are foundational to the advancement of AI computing. To learn more about Netlist, please visit www.netlist.com.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release include, without limitation, statements about Netlist's positioning to capitalize on next generation memory products, expected license revenue under its agreements with Samsung and Micron, and evaluations, implications of future growth or profitability and judgements regarding Netlist's products and intellectual property portfolio. Forward-looking statements are statements other than historical facts and often address future events or Netlist's future performance. They reflect management's present expectations regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These risks, uncertainties and other factors include, among others, risks: Netlist may not be able to collect amounts owed to it pursuant to its agreements with Samsung and Micron and the amount of quarterly license fees payable under the revenue-based formula, which may be subject to adjustment; Netlist may suffer adverse outcomes in its litigation with Google or in its various other active proceedings to defend the validity of its patents; related to Netlist's plans for its intellectual property, including its strategies for monetizing, licensing, expanding, and defending its patent portfolio, which efforts may not be successful; that other patent infringement litigation initiated by Netlist, or by others against Netlist, may not be successful or resolve favorably for Netlist, particularly given the costs and unpredictability of any such litigation; associated with Netlist's product sales, including whether and how long the current market and demand for products sold by Netlist will persist or persist as expected and whether Netlist may successfully develop and launch new products that are attractive to the market; whether Netlist will continue to acquire components or products for resale on favorable terms; associated with the competitive landscape of Netlist's industry, general economic, political and market conditions, factory slowdowns and/or shutdowns, and changes in international trade and tariff policies. All forward-looking statements reflect management's present assumptions, expectations and beliefs regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These and other risks and uncertainties are described in Netlist's Annual Report on Form 10-K for the fiscal year ended December 27, 2025, filed with the SEC on March 19, 2026, Quarterly Report on Form 10-Q for the quarter ended June 27, 2026, filed with the SEC on August 11, 2026, and the other filings it makes with the U.S. Securities and Exchange Commission from time to time, including any subsequently filed quarterly and current reports. In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied on as predictions of future events. These forward-looking statements represent Netlist's assumptions, expectations and beliefs only as of the date they are made, and except as required by law, Netlist undertakes no obligation to revise or update any forward-looking statements for any reason.

Investor Relations Contacts:

Monica Gould
The Blueshirt Group
monica@blueshirtgroup.com

Mike Smargiassi
The Plunkett Group
NLST@theplunkettgroup.com
(212) 739-6729

Gail M. Sasaki
Netlist, Inc., Chief Financial Officer
gsasaki@netlist.com
(949) 435-0025

	NETLIST, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED BALANCE SHEETS
	(In thousands) (Unaudited)
			September 26,			December 27,
			2026			2025
	ASSETS
	Current assets:
	Cash and cash equivalents		$	317,685		$	31,782
	Restricted cash			10,000			10,300
	Accounts receivable, net			4,969			2,411
	Inventories			16,778			3,383
	Prepaid expenses and other current assets			11,536			332
	Total current assets			360,968			48,208
	Property and equipment, net			285			300
	Operating lease right-of-use assets			1,154			541
	Deferred income taxes			89,088			—
	Other assets			38,343			428
	Total assets		$	489,838		$	49,477
	LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
	Current liabilities:
	Accounts payable		$	71,145		$	20,612
	Revolving line of credit			—			1,788
	Accrued payroll and related liabilities			1,320			852
	Deferred revenue			78,405			30,570
	Other current liabilities			650			818
	Total current liabilities			151,520			54,640
	Deferred revenue, noncurrent			179,641			—
	Operating lease liabilities			716			23
	Other liabilities			17			17
	Total liabilities			331,894			54,680
	Commitments and contingencies
	Stockholders' equity (deficit):
	Preferred stock			—			—
	Common stock			379			308
	Additional paid-in capital			424,581			357,001
	Accumulated deficit			(267,016)			(362,512)
	Total stockholders' equity (deficit)			157,944			(5,203)
	Total liabilities and stockholders' equity		$	489,838		$	49,477

 

NETLIST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)
		Three Months Ended				Nine Months Ended
		September 26,		September 27,		September 26,		September 27,
		2026		2025		2026		2025
Net product sales		$          60,194		$        42,234		$       274,931		$       112,915
License fee		44,910		—		44,910		—
Net sales		105,104		42,234		319,841		112,915
Cost of sales(1)		36,247		40,396		205,712		108,385
Gross profit		68,857		1,838		114,129		4,530
Operating expenses:
Research and development(1)		1,054		822		3,205		2,548
Intellectual property legal fees		16,211		5,035		41,938		15,542
Selling, general and administrative(1)		11,021		3,131		18,511		9,604
Total operating expenses		28,286		8,988		63,654		27,694
Operating income (loss)		40,571		(7,150)		50,475		(23,164)
Other income, net:
Interest income, net		864		106		945		459
Other income, net		31		34		94		130
Total other income, net		895		140		1,039		589
Income (loss) before income tax benefit		41,466		(7,010)		51,514		(22,575)
Income tax benefit		(43,982)		—		(43,982)		—
Net income (loss)		$          85,448		$         (7,010)		$         95,496		$        (22,575)
Loss per common share:
Basic		$             0.24		$           (0.02)		$             0.29		$            (0.08)
Diluted		$             0.22		$           (0.02)		$             0.26		$            (0.08)
Weighted-average common shares outstanding:
Basic		356,097		292,557		331,046		280,229
Diluted		393,420		292,557		368,377		280,229
(1) Amounts include stock-based compensation expense as follows:
Cost of sales		$                  2		$               12		$                49		$                62
Research and development		97		93		378		438
Selling, general and administrative		6,774		655		8,211		2,244
Total stock-based compensation		$           6,873		$             760		$           8,638		$           2,744

 

NETLIST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except per share amounts) (Unaudited)
			Nine Months Ended
			September 26,			September 27,
			2026			2025
Cash flows from operating activities:
Net income (loss)			$	95,496		$	(22,575)
Adjustments to reconcile net income (loss) to net cash provied by (used in) operating activities:
Depreciation and amortization				216			212
Non-cash lease expense				386			418
Gain on forgiveness of payables				(94)			(630)
Stock-based compensation				8,638			2,744
Deferred income taxes				(89,088)			—
Changes in operating assets and liabilities:
Accounts receivable				(2,558)			(2,483)
Inventories				(13,395)			(14,821)
Prepaid expenses and other assets				154			(11,031)
Accounts payable				17,672			(5,024)
Accrued payroll and related liabilities				468			57
Deferred revenue				227,476			26,934
Other liabilities				(380)			(1,796)
Net cash provided by (used in) operating activities				244,991			(27,995)
Cash flows from investing activities:
Acquisition of property and equipment				(185)			(25)
Net cash used in investing activities				(185)			(25)
Cash flows from financing activities:
Net borrowings (repayments) under line of credit				(1,788)			2,207
Payments on notes payable				(438)			(537)
Proceeds from issuance of common stock, net				1,000			12,571
Proceeds from exercise of stock options and warrants				42,023			75
Payments for taxes related to net share settlement of equity awards				—			(59)
Net cash provided by financing activities				40,797			14,257
Net change in cash, cash equivalents and restricted cash				285,603			(13,763)
Cash, cash equivalents and restricted cash at beginning of period				42,082			34,607
Cash, cash equivalents and restricted cash at end of period			$	327,685		$	20,844
Reconciliation of cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents			$	317,685		$	10,544
Restricted cash				10,000			10,300
Cash, cash equivalents and restricted cash at end of period			$	327,685		$	20,844

 

 

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SOURCE Netlist, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Netlist's third-quarter 2026 revenue and earnings?

Netlist reported $105.1 million in net sales and $85.4 million in net income, or $0.22 per diluted share, for the quarter ended September 26, 2026. Sales rose 149% year over year, while the comparable 2025 quarter had a $7.0 million net loss. The 2026 quarter included a $43.982 million income tax benefit.

How much Samsung license revenue did Netlist recognize in the third quarter of 2026?

Netlist recognized $44.9 million in Samsung license revenue, consisting of amortization of the upfront license fee and the first quarterly license fee. License revenue had no associated cost of sales. Samsung's cash payments consisted of an initial $200 million payment and a first quarterly payment of $27.5 million.