Operator: Good day and welcome to the Netlist Second Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] Please note that this event is being recorded. I'd now like to turn the conference over to Michael Smargiassi, Investor Relations. Please go ahead, sir.

Michael Smargiassi: Thank you, Cole, and good day, everyone. Welcome to Netlist's Second Quarter 2026 Conference Call. Leading today's call will be Chuck Hong, Chief Executive Officer of Netlist; and Gail Sasaki, Chief Financial Officer. As a reminder, you can access the earnings release and a replay of today's call on the Investors section of the Netlist website at netlist.com. Before we start the call, I would note that today's presentation of Netlist's results and the answers to questions may include forward-looking statements, which are based on current expectations. The actual results could differ materially from those projected in the forward-looking statements because of the number of risks and uncertainties that are expressed in the call, annual and current SEC filings and the cautionary statements contained in today's press release. Netlist assumes no obligation to update forward-looking statements. I will now turn the call over to Chuck.

Chuck Hong: Thank you, Mike, and hello, everyone. We delivered another strong quarter with continued momentum in both product revenue and profitability. Revenue for the first half of 2026 exceeded $200 million, while product gross margins were over $45 million, fueled by robust demand, strong execution by our sales and operation teams and a generally constrained supply for memory products, which analysts project will continue through next year. While much of the revenue came from resale of difficult-to-source DRAM products, we saw growth in our own portfolio of products during the quarter, starting with Netlist's Lightning portfolio of overclocked, low-latency DDR5, RDIMM, and UDIMM solutions, which continue to gain market traction. Our next-generation CXL NVvault is currently sampling with SoC vendors, hyperscalers, and major OEMs for future hardware platforms. To support market adoption, we have partnered with the CXL Consortium and Storage Networking Industry Association to deliver industry education and technical thought leadership. We look forward to showcasing these collaborative efforts at CXL Mini DevCon 2026 in Santa Clara next week. And we are also committed to working with our industry partners to help validate and scale advanced CXL memory architectures for enterprise production. Our development work continues full bore for MRDIMM and high-performance server memory architecture designed to overcome the bandwidth limits of conventional DDR5 RDIMMs. Industry analysts forecast MRDIMM to be a $100 billion market by 2030 from small volumes today. Netlist holds over a dozen seminal patents that read on MRDIMM and have asserted them at the ITC against infringing MRDIMM products currently being imported by Samsung. We continue to make significant progress in defending Netlist's patent portfolio against unauthorized use while continuing to invest in the expansion of the portfolio through the development of next-generation technologies and the issuance of additional patents in key areas. Our commitment to protect the value of our IP is reflected in the expanded legal actions we announced against Samsung in June. The new proceedings in the U.S. International Trade Commission, or the ITC, and the U.S. District Court for the Eastern District of Texas are based on the infringement of Netlist's recently issued 537 and 937 patents, which read on high-bandwidth memory, or HBM, and DDR5 RDIMMs and MRDIMMs, respectively. In July, the ITC voted to institute the second case against Samsung and its customers Google, NVIDIA, Super Micro, and Broadcom. The investigation has been assigned to the administrative law judge, and we expect to receive the procedural schedule in August, which will include dates for the Markman hearing and evidentiary hearing. In the first ITC case against Samsung, where Netlist is asserting 6 patents that collectively read on DDR5 memory modules such as DDR5 RDIMM, UDIMM, SODIMM, and MRDIMM, and HBM. The Markman hearing was held in April, and discovery closed on July 8. The evidentiary hearing is currently scheduled to start in late November. As a reminder, a favorable ruling in either of these ITC cases would block the importation of billions of dollars of Samsung products that infringe on our patents and result in a cease and desist order prohibiting commercial activities by named customers including Google, Super Micro, NVIDIA, and Broadcom. We believe we have a strong position in the first ITC case against Samsung, and the case is progressing well, while we have just added a second case with additional HBM and memory module patents. It is important to note that 3 new commissioners were recently confirmed and appointed at the ITC, filling all 6 seats at the Commission. Previous to these appointments, there were only 3 commissioners, which resulted in limited bandwidth and delays in the ITC proceedings. From all accounts, the 3 new Republican appointees are strong advocates for IP committed to upholding the rights of the American IP owner against both U.S. and foreign entities that illegally import infringing products into the U.S. We believe they will take note of the biggest memory companies in the world that are making some of the highest profits recorded in the history of human commerce, and yet, continue to defy jury verdicts, hold out from licensing in order to get a free ride. This efficient infringement by big tech is one of the areas that we believe will be addressed by the new ITC commissioners through rapid and strict enforcement of Section 337. In the appeal of the Eastern District of Texas 2023 jury verdict awarding Netlist $303 million for Samsung's willful infringement of 5 Netlist patents. The Federal Circuit heard oral arguments in March on Samsung's appeal of the verdict and Netlist's appeal of the IPR challenges to the asserted patents in the case. We look forward to the court's decision, which we believe will come in the near future. In the appeal of the breach of contract case against Samsung, appellate briefing has concluded. We remain on track for a hearing before the U.S. Court of Appeals for the Ninth Circuit likely in the coming months. This is a case that Samsung has lost on 3 separate occasions based on the facts presented. This includes a summary judgment ruling and 2 subsequent federal district court jury verdicts in separate trials. In each of these instances, it was found that Samsung materially breached the joint development and license agreement, and therefore, the license to Netlist's patent portfolio was rightfully terminated. In Micron's appeal of the Eastern District of Texas 2024 jury verdict awarding Netlist $445 million for Micron's willful infringement of the Netlist 912 and the 417 patents. The Federal Circuit has scheduled oral arguments for hearing for September 9, which is in the next 5 to 6 weeks. Netlist's appeal of the IPRs against these patents are also scheduled to be heard on the same day. The 912 has been upheld in the PTO multiple times and by the appellate court itself. Yet this recent PTO panel, PTAB panel and the appellate court ruling was allowed to be reexamined again by a new PTAB panel. This patent's 15-year history of being subjected to serial IPRs has become a poster child in the IP community and at Capitol Hill for patent re-exam abuse and hold out by the biggest companies in the world. We believe we have a strong case for overturning this egregious PTAB finding at the appellate court come September. We look forward to the ruling by the court that corrects this inconsistent finding of invalidity of the 912 patent and upholds the $445 million jury verdict. Netlist remains committed to protecting patent owners' rights by engaging with government officials and encouraging Congress to act on proposed patent reform legislation, including RESTORE, PREVAIL, and PERA. Last week, I had the privilege of speaking at the Center for the Protection of Intellectual Property, their annual conference, where I participated on the IP and the U.S. Global Competitiveness Panel. As some of you are aware, the U.S. Department of Justice has filed 2 statements of interest that have been supportive of Netlist's matters involving Samsung. At the ITC, this was the first time in history where the DOJ and the PTO combined supported the position of a complainant. The DOJ has continued to reference these statements of interest in public forums as examples of the current administration's broader efforts to promote robust intellectual property protection. We believe these statements and public remarks underscored continued federal support for U.S. innovation and effective enforcement of patent rights. In summary, we had a strong first half of 2026. We generated record product revenue, secured additional confirmation of the validity of our patents, received newly issued patents, which read on high bandwidth memory and DDR5 products, and advanced enforcement actions covering new generation of DDR5 and HBM technologies that are foundational to AI computing. Now I'll turn the call over to Gail for the financial review.

Gail Sasaki: Thanks, Chuck. We delivered our second consecutive quarter of strong top-line and bottom-line performance. Second quarter revenue was $109.8 million, an increase of 163% as compared to the second quarter of 2025. For the first 6 months of the year, revenue was $214.7 million, a threefold increase from the same period in 2025. Second quarter gross profit was $22.9 million, an increase of 1,544% as compared to the second quarter of 2025. For the first 6 months of the year, gross profit was $45.3 million, an increase of 1,582% compared to the same period in 2025. Operating expenses reflect continued investment in R&D, IP initiatives, and SG&A to support revenue growth. Operating income was $1.3 million, an improvement of $8 million compared to the second quarter of 2025. While we do not formally guide, given booking and shipping for the third quarter of 2026 to date, subject to the visibility we have today, we currently expect third quarter product revenue to be similar to the second quarter of 2026. We ended the second quarter with cash and cash equivalents and restricted cash of $40.7 million with minimal debt. In the second quarter, we received $10.5 million in proceeds from the cash exercise of issued and outstanding warrants. With a $10 million working capital line of credit and approximately $74 million still available on the equity line of credit, we continue to maintain significant financial flexibility and liquidity. And as always, we manage the operational cash cycle very carefully. Days sales outstanding continues to be less than 3 days, and our inventory turns an average of 10 days between quarters, which drives an optimal cash cycle of an average of 15 days. Operator, we are now ready for questions.

Operator: [Operator Instructions]Our first question today will come from Suji Desilva with ROTH Capital.

Sujeeva De Silva: Chuck, congratulations on the strong results here. progress. Chuck, maybe I can come back to the hynix agreement. I know it's post the 5-year anniversary of the prior license. I'm wondering if you could give us some color on the status today of the hynix license itself and maybe any renewal discussions and perhaps maybe broader renewal discussions. Any color would be helpful.

Chuck Hong: Yes. We conduct discussions with our licensees as well as potential licensees on a regular basis. And I think we're making good progress across the board with all of these discussions. But I can't get into the specific details because they are privileged.

Sujeeva De Silva: Okay. Chuck, I appreciate the color you have. And then just curious from a litigation perspective, is there any connection between the court cases for Samsung and the ITC hearing for Samsung? Or are they -- I consider those separate in their efforts?

Chuck Hong: They are connected. So we have -- I mean, we probably have a dozen outstanding cases against Samsung in the Eastern District of Texas at the ITC and in the District of Delaware. And the relationship between all of these cases are the patents. They are -- there are some different patents, but mostly overlapping patents in each of these venues. So the Delaware case, which really Samsung has -- where they are the plaintiff in a declaratory judgment action. Most of those -- I believe all of those are stayed, nothing going on. We have cases at the Eastern District of Texas with overlapping patents at the ITC. Once ITC institutes their proceedings, the cases with the same patents in the Eastern District of Texas become stayed. So that is the relationship between all of these cases against Samsung.

Sujeeva De Silva: Okay. Very helpful, Chuck. And then going to the products, Chuck, trying to understand what percent of your revenue now is coming from the Netlist products? And of the opportunities you listed Lightning, NVvault, things like that, which one is perhaps the nearest revenue opportunity and what will be the timing for an inflection in the ones that are nearer?

Chuck Hong: Well, as I indicated, we are -- I mean, we're in production mode. We're shipping. We're making good traction. We're probably in the double digits millions with our product line, the Lightning and some of the other products, Netlist branded products. So making good progress on all of that. And then as I indicated, the -- our development work on MRDIMM, low-power MRDIMM, CXL NV, those continue, and we're working with potential customers, major OEMs as well as hyperscalers on those technologies.

Sujeeva De Silva: Okay. Helpful. And then, Chuck, one last question. Your resale revenue is strong. Your guidance as per Gail was strong. Is there any risk to your ability to source these products given the supply constraints? Or can you just give a sense of how you're able to continue to source products in what is obviously a very tight market?

Chuck Hong: Yes. I think it helps, Suji, that we've been in this industry for 25 years. So we've got a very strong network throughout the world for sourcing products. So we've done very well compared to others. We've had the supply agreement with hynix. We continue to get support from hynix on the supply, both for DDR4, which is in very short supply and also on DDR5. So we're relatively better off than most in our ability to procure tight DRAM -- short DRAM products.

Operator: And this will conclude our question-and-answer session, also concluding today's conference. We'd like to thank you for attending today's presentation, and at this time you may now disconnect your lines.