Weebit Nano Limited (WBT.AX) Earnings Call Transcript & Summary

Okay. Good afternoon, and welcome to the Weebit Nano Investor Briefing. My name is Danny Younis, and I help with Investor Relations for Weebit. With me this afternoon, we have the CEO of Weebit, Coby Hanoch; the Chair, Dadi Perlmutter; and the CFO, Alla Felder. Before I hand over to Coby, just to note that we will be having a Q&A session at the end, starting first with those present in the room. [Operator Instructions] We are expecting a lot of questions to come through as per previous webinars. So I will try and get through as many as possible given the time constraint. I would now like to hand the webinar over to Coby. Please go ahead.

Okay. Thanks, Danny. So thanks, everyone, for coming. Well, it's a very nice crowd. I definitely missed you guys here in Perth. And I guess we had the AGM on Monday in Melbourne. I guess maybe some of you were also there. So it's going to be somewhat of a repeat of what we did at the AGM. But of course, the most important part is the interaction and having you guys ask questions both in the room and online and that we try to be as transparent as we can and to help you understand what's going on. I'm really glad to have Dadi here. I guess many of you know him. He was here with me in previous visits. Alla now that we're reporting financials, I think it's time for everyone to get to know our CFO, amazing Alla and she will have a few slides as well. So I think right now, let's see that this thing will react. Okay. And I guess in the beginning, I'm going to ask Dadi to come and give a little bit of more of his perspective on the market in general, the higher level perspective before I start diving into the details. So Dadi, please.

Okay. I hope people online and people here hears me well. So always a pleasure to be here. I will start with the same thing. I wish I was able to wear things the way you wear things, but noblesse oblige, I don't have a choice and I have to show up, but I took my jacket off. So we're in a good shape. I think the first time I've been in Perth was about 9 years ago when in the early days of Weebit Nano, we were doing a lot of promises, making a lot of statements, talking about the path that a technology company has to go through. Many of you have been in the room or been investing in Weebit. And when we use the term semiconductor, many people say, I know what a semi is, I know what a conductor is. But together, we have no clue. In the rest of the world, it was like even worse. Very few people definitely up until 2, 3 years ago, never heard about this term, even though they had in their pocket, hundreds or thousands of those let alone in the car and around them and everybody is using the cloud, but they didn't make the connection between a semiconductor or anything that they do, but it doesn't matter. But just a couple of years ago, maybe 3 years ago, the whole tension, geopolitical tension, China and U.S. all around semiconductor technology, all of a sudden, I don't want to say small, a huge Taiwanese company called TSMC, nobody heard about. Now is everybody understand that whoever holds TSMC has a huge control about the world economy. So a few kind of numbers about -- first, the technology is amazing. There's nothing even closer in human history with respect to any technology. And the level of progress is kind of mind-boggling. When I started my career 45 years ago, I was developing chips -- computer chips that had 80,000 components called transistor. That was the top of the state-of-the-art of a product. Can anyone guess how many of such devices, transistors exist on a single chip, let's say, NVIDIA top of the line GPU? Anyone could guess a number. Throw a number, whatever. We're not going -- well, you are recorded, but we are not going to send it.

1 billion.

1 billion, okay.

0.5 trillion.

0.5 trillion is closer. So just made the calculation, how many orders of magnitude the industry have jumped along the way? There is an echo for some reason. So if you could turn off. Thank you. From about 100,000 to 500 billions, it's how much? Several orders of magnitude. You know how much the yield of a wheat crop in the field was improved since human started doing agriculture? About 10x. The speed of a car from the 19th century till today improved by how much? Not that much. Let's talk about even fuel efficiency. In order to build such a technology, it requires a huge amount of capital. In the example of the new TSMC 1.4 nanometer, which is the size of this transistor element, it's very small, costs USD 49 billion. U.S. dollars. What did I say?

You said dollars.

Unfortunately, I'm still living in U.S. dollars, forgive me this mistake. This is a huge number. Not too many companies. There's a lot of government involvement in that Taiwanese government subsidizing TSMC for 30 years plus. U.S. government start putting a lot of money. You see NVIDIA investing in and Intel. It's so that you are able to play the game of creating the next generation. By the way, developing this technology, the R&D for this technology is way north of $15 billion, $20 billion to do the investment, the R&D to create this technology. It's absolutely huge. We talk about transistors and the number are huge. One day, I have to do an analysis. Sorry, Coby. How many transistors exist on this one, but for sure, hundreds of millions, easily, if not billions. The factories are 10,000x cleaner than a surgery room, operation room. And the size, I will not be able even to go and talk about this one. It has a huge impact on our economy. About 40% of the global GDP is -- hinges on semiconductors. I'm not sure how exactly these analysts did the calculations. It may be even larger. I was interviewed about 15, 17 years ago by a Saudi Arabian journalist. I'm not sure he knew what kind of passport I'm having. But nevertheless, he was interested to talk about semiconductors, he had no clue what I'm talking about. And I said, semiconductors for the digital economy, today, I would have said digital and AI economy, is like oil to an industrial world's economy. He understood this quite well. So I think it's unbelievable. So when Coby talks about the foundries that we deal with are cheaper ones. They are about $5 billion to $10 billion a piece. But when you could understand that these people that put so much of a capital investment and so much of an R&D development of their stuff, they are not going to take lightly, oh, I'm the new guy coming from this place and have this technology, please move things around for me in your factory and add these things and change the stuff. It has to either to feed the way they do or they don't even answer your phone calls. And so that's why when people say, why does it take so long? Putting a new technology on this kind of a factory, it takes longer not because people are lazy, and Coby will describe, but it's a huge amount of work because the last thing these people want to have that because of they put Weebit's ReRAM on the factory, the factory was shut down for a week. Anyone that does economy don't want to have a $10 billion, for sure, not a $50 billion company stand still for that long. It's huge. And this -- and I'm more than 45 years in this industry. When I studied this material in university, I was told that I'm an idiot why I'm studying semiconductors, who would need it. That's a true story. Everybody was doing communication and software and all kind of stuff. But each time there's a new technology coming in, which is -- it kind of sounds like stupid calling it an application, but AI is an application. It's a new way people are using computers to get things done in a completely different manner than it was done before. And it made huge changes in technology, and Coby will describe that later, what does it mean to what we do. But nevertheless, the impact on the business is absolutely huge because -- and you see the race for building data centers for AI nowadays. Every day, there's at least a few articles. Government is putting money to build them, big companies putting big money to build them. It's more like an arm race. The risk of not building one is bigger than you build a bit too much than what you need because if it's a bit too much this year, it's going to be okay a year or 2 from now. And this creates a huge amount of opportunities in business. But for every new technology, there is a new king or a new queen of the hill. So whoever was the key company a decade ago, may not be the big key company today. And a decade from now, who knows? And around all these things that I was describing and even without it, the world is very different from what it used to be even a couple of years ago, for sure, not 5, 6, 7 years ago. The U.S. and China tensions for tech world, especially, the world was a global place. I could go and travel to China and then to Taiwan and then to Europe and then to the U.S. and sell my business and talk to people about technology, collaboration and everything. It was a huge global market. It was wonderful to be there. It's not anymore. Today, you have to pick side. For us in Weebit, we pick a side. If you are going to get investment from Chinese, you will not get investments from anyone in Australia or U.S. You don't engage and we used to get engaged 5, 6 years ago with Chinese foundries. We don't do that anymore. It's a big no. Does it make life easy? Hell no, but this is life. The global instability, who knows if Trump will succeed with wishes to do to get peace to the world and finish the wars in the Middle East and Ukraine and all kind of many other places, but it creates a lot of tensions. A lot of opportunities too. Rare earth material, mining, all kind of stuff that is very important for the semiconductor industry, whoever has it, making a lot of money and uses it politically to get power over the other side that may need it. AI revolution, changing our life. It's unbelievable what it does. I'm not sure how many of you uses AI and how it changes, but there was a research done and published the day before yesterday by the Israeli Innovation Authority. In Israeli tech, 95% of the people are working in tech in Israel using AI. about 60% of those report that they have at least 2x to 3x more productivity on the thing they do. Is that going to make big changes on education? Is that going to be a big change on the workforce, on job market, politics, whatever that may be. Supply chain relates to global instability. And if you're not in the right market, your ability to raise capital is going to be a nightmare, not going to be, is a nightmare. If you are -- have the top-notch people in AI and bring a technology which is critical, I think it's going to be easier. Let alone, things are going well. And anything today in semiconductor used to -- very difficult to raise money for semiconductors a decade ago. It's -- if you have the right messages and the right things, I think people will pay a lot of attention. So I think we have shown in many cases that Weebit is I said either fortunate or unfortunate, but we have been trained to live with this kind of unstable environment that extreme uncertainty. But the management team and the employees, we know how to deal with this stuff. It's kind of the way we do things. So we are not AI, bring it in. Political problems, no problem. Wars, we know how to handle it, not necessarily like to deal with it. And I think that this is a very strengthening. It's kind of quite true for many of the Israeli companies. We continue to strive. And I know Coby and I when the war started 2 years ago, we both wrote to all of you, investors, that it's a horrible situation. But nevertheless, we know how to cope and we haven't missed any milestone because of that. There are reasons to things that work not exactly the same. So I'm very proud on the way the team -- Coby and his team have operated and continue to operate and the ability to cope with whatever big change and the big transformation that will happen. This is the right team to go focus on this one. And I remember every talk, I talk about the experience of the team as the key element. It's not just the technology. It's how you are able to manage innovation, and Coby will talk, so I'll not get into this one. When we started, there have been 3, 4 other companies that said that they are going to have a way better ReRAM than we are. I'm not sure that where they are today because in this technology in this world, both business and technology, you need to know and understand not just what needs to be done, but what are the things that you want to avoid. The strategy that we picked worked eventually extremely well for us. People that pick different strategies find out that they went one bridge too far. And when you go one bridge too far, failure is imminent. And we have an extremely strong and diverse team, people with a lot of technology experience on our Board, people with a lot of governance and marketing and finance sitting on our Board. We have an extremely strong people in the team, and Coby will talk about them in the future. But each of these people have dozens of years of experience doing semiconductors, not just semiconductors, memories and ReRAM. So the experience eventually shows up and make the difference. So if Lilach had to go to one of the foundries to solve a problem, she was a fab manager. So she knows what he's talking about. The other side know what she knows what she is talking about. And that's how you come and reach a solution to whatever problem and problems are there on a daily basis. If you are lucky, there's one problem per day. Usually, it's more. But if you have the right people, they know how to do it, how to deal with it, how to find the right solutions. So I'm going to leave it over here. We spent a huge amount of time to kind of get ourselves ready for the next phase going from ASX 300 to 200, put a lot of effort on our governance, on risk analysis. And you may understand that analyzing risk these days was always important, but these days and having not just understanding the risk, finding solutions to either deal with the risk or avoid the risk, even though we are not obliged to do, we've done an ESG analysis, a very detailed and wonderful and we have hired another Australian director, very experienced, very knowledgeable, and she is going to help us to continue to navigate or even better navigate all kinds of governance issues of Australian regulation that even though we all understand very well regulations and governance, Australian do it a little bit different. And if you don't have the local expert here, it's the same as you have to have the experts on the foundry and the expert on the technology and the expert on the sales and marketing. So with that, I'll pass the baton back to Coby.

So thanks, Dadi. I think it's always amazing to get the perspective from a person like Dadi and to kind of have that view of what's happening in the world. I'm going to kind of go back down to earth and down to Weebit. And obviously, like in many other meetings, I'm going to skip some of the slides that are here mostly for -- when I talk to people who are new to Weebit and you guys already know the company, you know a lot about us. I guess one of the funny things is every time I go and I start talking about the company, I get a phone call from Iran. You know you're outdated. We have 1 or 2 more PhDs on board, and the team has grown a little bit. So yes, so before the AGM, I updated it. We now have 17 PhDs already in chemistry and physics who are really driving this thing forward. Again, it's just -- it's impossible to explain just how deep this technology is and how difficult it is. And you really need this team of PhDs with all of the surrounding team of people who are not less smart. They're experts in so many different domains working together to make this technology work to push it forward. I'll be talking about just how much forward and what we're going through now with all of this incredible interaction with so many fabs. But the team, obviously, to support more people -- to support more customers, you need to grow the team. We're very cautious, by the way, about how we spend money. You can see it in the numbers that we published in the quarterlies and so on. We really are trying not to just go crazy. And yes, we have money in the bank, so we'll just hire as many as we want or whatever. We're doing it in a very controlled manner. We're focusing on really hiring the top-notch people, but this part is always the most critical part of what we do. The rest, you guys know, Leti is always amazing and supporting and we're growing, et cetera.

61.

61. Okay. I get that. I need to find a way to have something updated automatically. Maybe we need to get some AI to regenerate the presentation every time before I give it. So -- and I guess everyone knows embedded nonvolatile memory really goes everywhere and so many different applications and things that I don't even -- I haven't even thought about myself before. We see customers who are talking about all these things. I say, wow, this is crazy. It really is a great fit for all of these different applications. Now we added here, it's used also for AI weights. That's something that 2 years ago, I wouldn't have put on a slide. But AI is now really pushing us forward. Again, I'll be going into more details. You know the story of Weebit. Many of you have followed us, and I guess you'll even see a little bit of that in the books here that you have. By the way, people who haven't made it here, you can contact Automic and they have some more books. So I think these are just nice books to go through. But really, this process of evolution, so many technologies and then getting down to ReRAM and MRAM. And just a few years ago, people still thought that MRAM is going to take over the market. And I remember I was showing even the old slides, and they had MRAM as the main thing in them. The change has really happened in the past couple of years, the realization that, hey, ReRAM really is the better technology. It is the technology of the future and so on. And like Dadi said, becoming the only independent supplier of ReRAM. There were quite a few companies. I remember just -- I joined 8 years ago, even 5 years ago, people would say, okay, Crossbar is the #1 ReRAM company. Adesto is #2. Weebit, yes, I would get that reaction from so many people. I mean, Crossbar was by far further ahead, rest in peace. But it's really that it requires so much to develop this technology and to keep everything intact and moving forward. Dadi was saying Crossbar was trying to go one bridge too far. They were just trying to use nonstandard materials to have an even better ReRAM. Well, the industry doesn't support that. The cost of fabs is such that you tell them to bring in a new material now into that fab, come on, you want to really shake things up there. So they just didn't manage to get fabs to work with them. They raised, I think, over USD 200 million before the investors gave up and they shut the thing down. And the technology now is in China. There is a company called InnoStar, who got whatever that technology is and they're doing some small things, but they're not -- it isn't taking off. It -- basically, it's not working much. So really, this has been, if anything, this team of experts who knew what to do and what not to do, not focus on using standard materials, standard tools, doing things in the way that fab -- understanding how fabs think and doing things in a way that the fabs will accept them and all of that. It's been a really amazing ride for me with the whole team and getting to this point and now the notion that everyone suddenly realizes we need ReRAM. And ReRAM is it and hey, oh, we need to go to Weebit. So you all know all of the advantages of -- we changed the format of the slide, but lower power consumption, faster and all of these things, where the result is really Yole has finally started to report that ReRAM is it, okay? They -- Yole, by the way, I love these guys, and they really have a very deep understanding of the market. They just happen to sit right next to STMicro, the only company who is still doing PCM, and they're very influenced by STMicro. But nevertheless, I think what's really important here, and it's not the numbers or the specific things, but just look at what's happening from 2024 to 2030. In 6 years, look at the growth of the embedded emerging nonvolatile market and then look at what's happening in 6 years to the ReRAM share. Okay? You do the quick math and you get to 45x growth, okay? That's doubling every year. Basically, it's like really insane growth. And I had someone ask me the other day. So how are you going to accelerate that? And I'm like, do you realize what it means, 45x growth in 6 years to accelerate it even more? I mean I'm terrified that this is going to be -- it's going to be crazy to just control everything when you have that level of growth, but that's what we're heading to. And you guys know, I talk a lot about the tornado coming and everything. By the way, look at an interesting thing here is the first industry that's ramping up on ReRAM is analog, which if you would have told me that 7, 8 years ago, I would have said, you're totally insane. I mean, come on, analog, but it is -- it's kind of funny. When I joined Weebit in the end of 2017, 2 weeks -- 2 months later, I get a message from this guy. And he says, Coby, I know you won't understand what I'm talking about. I'm an ex-VP at TI. I'm retired now, but you guys made my dream come true. You guys have a back end of line nonvolatile memory technology, and it looks like it's going to work. All the indications are this is a good technology. And I met the guy and he gave me some update, and he was right. I mean I wouldn't have ever thought of analog at the time. But we are working with DB HiTek 130-nanometer BCD key letters there with onsemi 65 BCD. BCD means analog, okay? And these guys are driving the adoption now because of the advantage that we have. By the way, everyone thinks that I always talk about the fact that we can go down below 28-nanometer and flash can't, and that's a huge advantage, which it is. But the first guys who actually decided to adopt it are the analog guys which are at the larger geometries, they theoretically could use flash, but they can't. Flash is just a terrible choice for analog. So that's ramping up first and then the other markets are ramping up. And I guess all of this, you can see Weebit kind of already in these reports. So where are we now? What's going on? Again, all of you have been following us. AEC-Q100 seems like it was decades ago, but it was just earlier this year, showing that we're really a great solution for automotive. Getting to -- the revenue is going. I'm bringing my CFO out. I'm so happy. So getting revenue, yes, $4 million is still nothing big to write home about, but you can see the growth, and Alla will be presenting the trends and all. Getting tapeout at onsemi in just 9 months. That's like the fastest you can ever imagine to get technology transfer done. They put a huge team to work with us. They have really definitely -- Dadi was using the term dozens. They have a lot of engineers now that are working with Weebit. Every week, we have so many meetings with them on a regular basis, every day, we have many meetings with them. And moving forward, and they're so focused on this, they're an amazing partner, really a company that I really learned to admire how they're pushing things forward. We got to the point where we're getting the cash flow coming in now and the customers are -- people are asking me all the time, and Alla will go into it, but these are still, of course, license fees and NREs. They're not royalties or anything. But nevertheless, you can see also kind of gives you a feel for the type of deals that we're doing and the order of magnitude and so on. So that's happening. And we already have -- this is maybe the most important thing of all. There are actually 3 products today that are being designed with Weebit ReRAM in them, okay? It's not just a future technology, and we're not just trying to get the manufacturers on board. Customers are starting to design products with Weebit ReRAM. The clock is ticking now towards royalties, okay? This is a very important milestone for us, and we're very happy with that, and we're engaged with more and more of these product companies. So really, I won't dive into the details on onsemi. I realized that a year ago, people in Australia didn't know who they are, a major player in semiconductors. I realize I need to tell people it used to be Motorola Communication and then some people start understanding. But it's a big major player, #2 in power solutions and power is so critical today. Everything is about power. Everything is running on batteries. Even if it's not running on batteries, power consumption has become a critical issue. Data centers, everyone talks about these data centers. You know how much power data centers consume. If I'm not mistaken, 5% of all power consumption on this planet is data centers. You know what ReRAM can do there. ReRAM together with people like onsemi, who are experts in power, and they can do smarter power management with ReRAM in it. So that's the type of application where we can come in. Automotive, again, I was sitting the other day and I said just 5 years ago, I remember standing in front of these guys and telling them, there are more than 100 components -- electronic components in a car. And then I think it was about 2 years ago that I was saying, we're actually crossing the 1,000 number. And now you go to a Tesla, it's like 8,000 electronic components in one car, okay, in one car. Just think of it, how crazy this is all of these autonomous vehicles with so many sensors on every little thing and stuff. This is really a great place, a great market. And again, we showed that we can operate at 150 degrees for 10 years. And guess what, we never announced it much, but we actually -- customers asked us to demonstrate 175, and we showed not for 10 years, but we showed them that we can definitely withstand for the periods that they wanted higher temperatures. And I guess, talking about the topic that everyone wants to hear about with AI and so on. And I showed this, so I'll go quickly through this. I think many of you saw this in the past, but it is very important to understand. AI is growing so fast. It's crazy. And in AI, you have the learning phase, that's the big data centers. They learn how to do something. And then you have the inference where you basically use that knowledge to actually do something, okay? You take what you learned and you use it. And of course, some of the learning can be done in other places, some of the inference, inference is what we call using that knowledge to do something. And in general, the market is now heading more and more to trying to have inference done in the edge devices in all of these cameras and sensors and whatever out there in the field. You don't want to be in a car and it suddenly recognizes that something is in front of it and it starts sending the data over to the data center and oh, the communication isn't that good. So it's going to take a little bit longer until you actually get a response and know how to react and everything. You want everything to be done locally, react on the spot, not lose those precious seconds or milliseconds, okay? And that's why people want to do as much inference as they can in the edge devices, save all that power to send things over to the data center, the time, et cetera. Now as you know, AI is an advanced technology. People normally implement it at 22-nanometer and below. They cannot embed flash in the chips. This is very critical. Now they have to have all of these coefficients that were figured out by the learning saved somewhere. So they store them in a separate chip in a flash chip. And when they turn the system on, all of this is loaded into an SRAM inside the chip. So you have now a situation where it's 2 chips, it's obviously more expensive. You waste time when you turn the system on, you need to wait until everything loads. And you have a security issue here. I mean, all of this data is running on that line between the 2 chips. People can drop very easily. There are a lot of limitations here. Now if you replace this SRAM with a ReRAM, guess what? You don't need the flash outside. You can have all of the coefficients now in your chip. You don't have a security issue. You turn the system on. It's what we call instant on. It can immediately start working. If there's nothing happening, the sensors aren't sensing anything, you can shut the system down, save power, don't waste battery because it's nonvolatile, okay? By the way, ReRAM bits are smaller than SRAM bits. You can have more ReRAM bits on that same piece of silicon, have better accuracy. So a lot of advantages, and this is being done today. I mean this is something that is now companies are already doing it, and it's very exciting. Weebit is involved with such companies and really enjoying this step forward. Now obviously, that's not the last step on this path. And the next thing is trying to do in-memory compute. Now what does that mean? Well, in the normal computer architectures that we have today, they're called von Neumann architectures, you have a separate AI engine or a separate engine in general processor and you have a separate memory. And most of the time and power consumption and everything is just transferring the data back and forth from the memory to the compute unit. It uses something, it writes it into the memory. It reads some other data, it does something, it writes it back. That is what slows us down, and that's what wastes so much power. Now in AI, what is really done, the computation that is done is very relatively -- again, everything is always relative, more basic. It's mostly multiplication of matrices without going into all of the details of things and whatever. But you can actually configure the memory in such a way that it will do that computation inside the memory. You don't have to have the data go from one place to the other, et cetera. It is just done in the memory, on the spot. You are now so much faster, so much lower power consumption. And this is something that's going to happen very soon. This is something that's already being implemented, the prototypes and whatever companies are already playing with this, trying to make this work. It's really great. ReRAM is an ideal solution for these guys. Of course, and here we go to what I've been talking about for so many years already in the past about neuromorphic computing and about mimicking the brain, really having the memory just act like a brain and ReRAM, I think many people here, I know, have been coming to these meetings for many years and heard me say, a ReRAM bit operates in a very similar way to a synapse in your brain. And it is ideal for neuromorphic computing. Now this is still in the research phase and still mostly universities and so on. But by the way, now there are commercial companies that are working on this. And we are engaged with many of them, and we're giving them ReRAM, and it's really a very exciting domain. In Weebit now, we already have a team that's dedicated for AI applications and for these kinds of things. So -- it's really -- for me, the immediate growth of Weebit is going to be the standard memory side of things, just using the memory in the conventional way. But this is going to be another very, very important growth engine for Weebit and a huge potential for us moving forward. And just 2 years ago, I wouldn't have really been -- well, I did talk about neuromorphic, but it was always that thing that's far away. Now it's actually happening. So let's just go on to where we stand. And I guess, a year ago, after the AGM, we set ourselves some targets. We had a target to license to 3 fabs, to 3 product companies and get the DB HiTek qualified. Not easy challenges. We don't like to go easy on ourselves. Regarding the fabs, we have onsemi, which is a very important one. It's a challenge and one of the shareholders asked me to explain in this meeting. So [ Stuart, ] I hope you're listening a little bit about the background here. You know, and we'll talk about it in the last slide that we're expecting to close another deal before the end of the year. Unfortunately, some of the activity that we have is slipping to 2026. These deals are really, really difficult to close. Onsemi took us more than a year. The deal that we hope to close in the near future now is some -- this is a company -- and by the way, what the comment that I got was, you always say you're engaged with these 20 companies or whatever. You keep telling us you're engaged with these 20 companies. So how do we know there's any progress and where are you going and whatever? And I guess I can understand that, of course. Yes, some of these companies we are engaged with for several years already. And it's kind of they come, they're excited. And then, no, no, no, you know what, we're going to wait a little bit. We'll do another project with flash. We'll talk to you after that, okay? And suddenly, they back off and they disappear. It's just too risky for us. It's a new technology. You guys are new. We don't know what will happen, all kinds of excuses around that, and they suddenly back off and they disappear for 9 months, for a year. And then they suddenly show up again and then you engage again and you start working with them. And it's happened to us with so many of these companies. So at a certain point, they're like, wow, we're going to close this deal. Finally, we're going to have a deal, and we're going to move forward. And there's an agreement already going back and forth and lawyers involved and everything and then it dies out. It just -- no, it's just too risky for us. We just can't take this risk right now. We know we want it. We know it's good. You showed us already, but we'll come back. The customers decided they want to use flash for another project. They can't take the risk of this ReRAM thing not working. They haven't seen it used in mass production, okay? This thing happens to us all the time, okay? You need to understand this is -- you're engaged with a foundry, and they even have one of their biggest customers sitting there and telling them, we want ReRAM, we want to sign up with you right now for ReRAM. You have a customer, a major customer, let's move forward and everything and they say, no, we're still concerned. We want to see the progress with DB HiTek or with onsemi or with this. And we're not -- and the customers they are like, no, no, no, our project needs to start. We want you to start today. We want to engage now. And they will say, it just -- it still feels too risky, okay? So yes, I know I've been saying for so long, we're engaged with all of these big guys. We're working with them, and we are -- and these other guys come to us with -- you know what our customer asked for whatever speed or voltage or they give us these challenges. Sometimes we look at these challenges and we say, this is insane. I mean, come on, ReRAM will never be able to do something like this. Be realistic. And they say, "Hey, that's what the customer wants. If you don't do this, we'll try to find something else. We don't know what we'll do whatever." And you're looking at it and I go to the team and I say, well, we don't have a choice. We need to have these guys as customers. You guys have to find a way, and they're saying, you're crazy, you don't understand what you're talking about. And guess what, after several weeks or whatever, they end up coming back and say, you know what, if we do this and that and the customer will agree to that, we can actually do it. Now -- and it's happening, and it's happening. And these are the type of things. These are the dynamics that we have inside Weebit. Now it's amazing because when I look at that, I say, oh my God. This customer -- my team is like b******* and cursing and all the bad words that you don't want to ever hear, right? But I'm there like, we got such a great presence. This is like unbelievable. This guy is going to force us to improve our technology even more to the level where nobody else will ever have ReRAM, which is so good, which has such advanced parameter, which is so -- with the power or with the voltage or with the speed or with whatever. And that's where we are now. And by the way, when I talk about being so excited about this technology and people ask me, are you really -- do you really believe that, for example, TSMC, one of these days will use Weebit ReRAM? Well, yes, because we will have the ReRAM so advanced in some of these parameters that a major customer will eventually, I don't know when, I don't want to promise anything, of course, but I can definitely see a major TSMC customer going and saying, "Hey, guys, we want to manufacture our next chip with you, but Weebit's ReRAM has such an advanced ABC, which is for our specific application. This is a big advantage we need it. We want to use that. I definitely see it happening and TSMC with a big customer who buys a lot of wafers, they will work with us. And it's TSMC or UMC or GlobalFoundries or anyone who's trying to do -- when they're developing ReRAM, they're developing it for themselves for one fab. We're talking to all of these different fabs who have all of these different applications. Now TSMC also has a lot of applications. I don't want anyone to misunderstand. But I think the variety that we're exposed to and the demands that we're getting are pushing us to constantly improve the technology. And do we have 18 PhDs or 17? So not -- the 18th hasn't started yet. Okay. But anyway -- yes, exactly. That's why I was asking because I was wondering if -- so we have this amazing team that is constantly improving this technology. So I will not go into which customer is at which phase of the sales cycle and whatever because as you can understand, some of them go all the way to the -- so close to the end and then they take some steps back and then they move forward and whatever. We are in a much more advanced position than we ever were with some of these big guys. And we do believe that as time goes by, the pressure to have ReRAM grows on them. And they look and they see the progress that we have with DB HiTek. They look at the progress that we have with onsemi. The fact that we taped out with onsemi after 9 months, and we're really pushing forward. All of these things help us push the other guys. We do believe we'll be closing a deal before the end of the year, and we have others that have slipped to next year, but we are continuing to push them. So I have to admit, we're not achieving -- probably it looks like we're not going to achieve the full target here, but I think it's a very important one that we are continuing to progress on. The product companies, I'm extremely proud of this. And hopefully, by the end of the year, the number will be even bigger. And with DB HiTek, yes, this is -- again, this is a very difficult technology. They were using different machines than what we did when we developed the technology. It ended up that we got stuck on something. We had to resolve it. One of their customers was asking to add some technology in the middle. It took us longer, but we are now getting close to qualification at DB HiTek, and this is really moving forward as well. So what's ahead? Well, last year, I was educating everyone about crossing the chasm and about how in the beginning, you need to fight for every new customer and everyone is afraid to work with you and all of that. Weebit, I say we're now -- we're just getting out of that chasm. We're finally at the point where we have our first few customers we are seeing this bowling alley effect starting. We -- SkyWater enabled us to make a 10x jump to DB HiTek. DB HiTek enabled us to do a 10x jump to onsemi. Onsemi is helping us to push others. So the product companies that started to work with us, we're seeing this. Now in the bowling alley, everything takes still very slow. One pin goes down, it takes time until you actually drop the 2 behind it and so on. But we are making that progress. So I'm definitely feeling we are now in that bowling alley. Now as I told you last year, at a certain point, it starts becoming instead of -- I don't want to be the first one to use this technology to, oh my God, I don't want to be the last one to use this technology. And that's when tornado hits. The moment you have that -- Dadi refers always to the tipping point of when there's that critical mass and suddenly people realize, hey, it's being used by this guy and that guy and that guy and oh, the risk isn't that big anymore. And oh my God, I'm going to be left -- all my competitors are starting to use it and I'm left behind. So I'm starting to feel the wind blowing. And I literally am starting to sense this tornado. I was lucky enough to be twice in the tornado twice in my life, and this is an amazing feeling and I can sense it happening. And as you know, we spent this year, this past year has been spent on building that infrastructure, making sure that everything is tied to the ground so that the tornado doesn't blow everything away and that we actually have control over what's happening when it hits. And we've been doing amazing things. We -- from going from a company that was dealing with one customer at a time and everything was on Excel sheets that someone had in his private desktop and stuff like that. And now we have organized software with procedures and who needs to approve what and how are notifications going and tracking who is putting how many hours into which customer so that we can manage it and have intelligent data to make decisions on. And all of these things, automation, a lot of automation putting in and stuff like that. So all of this has been happening throughout this year. I've been driving the team crazy on that, but we have now -- the way that Weebit operates today is nothing like it was a year ago. We really have in the customer success team, Dadi was referring to Lilach. Now when we go to see customers, we have a person who managed the fab sitting in front of them, and they know because they can see immediately the reaction when they talk about things that she understands what they're talking about. So it's all about how you deal with these things, and we have the infrastructure set. We still have some more -- some several things that we -- I'm not feeling comfortable about that we need to tie down. But in general, we made huge progress. Part of it was also on the governance side, and we said, okay, if things are actually going to happen like this, we are going to be pushed into the ASX 200. And how do we deal with that? Because the last time we were pushed into the ASX 200, we saw what happened, it was a disaster, right? So it wasn't -- don't want to use extreme words, but it wasn't nice. So now we made sure that we have Anne on board, and she is Deputy Chair, and she has the experience of governance in an ASX 50 company, and she's been really helping us put the procedures in place, understand how things work. Australia does work differently than the rest of the world. And like it or not, we have to make -- adapt to it and work with it and find a way to make it work. Alla came to me and said, we don't really need to do an ESG report, but we're going to be getting there soon. We should be preparing. And we worked on the ESG and on business continuity. Hey, there was a war going on in Israel. We made sure that I had a satellite phone that even if the cell system falls, I have a power supply at home and then whatever. We work through all of these things that bigger companies need to plan in terms of risk management, in terms of business continuity, making sure that everything is set up to continue and all of that. So a lot of work went on this past year into preparing for that tornado, and I really believe we're going to be seeing it '26, '27, it's going to be hitting us. And you guys know this slide, but we really are engaged with companies in all of these domains. In all of these domains, we are engaged with them. Each one of them has very different requirements. And sometimes they're conflicting requirements, but we're working on making all of this work and addressing all of these markets, it's really exciting. We have people who have experience working in many of these domains. And I mentioned now on the AI side, we already allocated a team to really focus on this market and see how we have a really strong solution for them. Okay. Just you guys know the business model, I'm not going to go into. But yes, I guess I already talked about it when I was talking about the previous slide, setting up the foundations for growth with everything automation. By the way, we set up a U.S. subsidiary. There's so much activity going on now in the U.S. We -- in order to do things properly and not pay extra taxes on selling to the U.S. from Israel or whatever, we needed to set this up. So now we have it in place. It's almost in place, I guess, I can say. But to address the big U.S. customers, we're talking to and make sure that we're efficient in the way we manage the finances. So really supporting multiple fabs in parallel. We now have that infrastructure. We -- for every new fab, we just have the template that we copy and everyone knows where to find everything. So at this point, I'm very happy to say we actually have financials to talk about. And I'm really happy to have an amazing CFO. You guys have no idea what it's the presence that I got when I joined Weebit, she was at Weebit before me. And it's really been an amazing, amazing ride to have her support me. And I'll let Alla talk to you so you guys get to know her as well about some of the financials.

Okay, everyone. I'm really excited to be here. I have been visiting first for a few years now for the audit. But I never got a chance to meet any of you in-person. So really excited. And my part will be relatively short. And it was already discussed. The first highlight we wanted to present was the impressive growth in revenues from just $153,000 in the first half of '24 to $3.7 million in the second half of '25, which is 24x in approximately 18 months period and a total revenue of $5.4 million in 2 years period. That's our first revenue recognized. So it's really exciting for us that all the plans and dreams that Coby has been presenting to you in the last 8 or 9 years materialized.

You mean it's terrifying for us because now everyone has expectations.

Yes, but we -- so far in deliveries, so we don't like [indiscernible]. And our revenue is recognized based on the percentage of progress in our licensing projects with our customers. So this increase reflects both the expansion of our customer engagement as well as our steady progress in projects themselves. And our existing customers, as Coby has described, include both fabs, IDMs and product companies. Looking ahead, as we do anticipate additional customers project design, in-licensing projects come into effect, we do expect to continued momentum revenue growth. At the same time, since the revenues are based on license fees and NREs, they are expected to be uneven and to fluctuate over the next few quarters until we will start seeing revenues from royalties come in and ramp up and then it will be stabilized and more recurring. And we have still...

We're not hearing you very well.

Record-breaking receipts...

Just checking. I forgot to put this on.

So the first quarter of '26, we showed a record-breaking receipts from our existing customers, $7.3 million that represent -- these are milestone-based payments. So this represents us achieving milestones in our existing projects with customers. The majority of these are milestone-based payments or licensing projects as well as some NRE payments. And it is worth mentioning, just to have our expectations aligned towards the next quarters. These are not recurring receipts. So we may see lower levels of cash coming in the coming quarters, but they will be in line in the planned milestones in the project. Another point worth mentioning is the $4 million received in France from French tax authorities for the 2024 R&D activity in France. We finished -- as Coby already -- also mentioned this, we finished September with an impressive cash balance of almost $92 million in the bank. That I think emphasizes our financial stability, our ability to continue and support the ongoing R&D operations and of course, to expand the commercial activity. We did choose to share the ESG report with you. We are proud of it. But in addition, I think that it represents the extensive work that we've done internally to strengthen our resilience and to -- and our infrastructure towards the scale up that -- so Coby showed you the tornado on the slide, but we are on the ground, we do feel it already. So we already feel like we are at the heart of the tornado. So it's coming. So we've spent 2025 putting a lot of efforts internally in building the team, building the systems, the platform, the infrastructures. So we can -- we will be able to support the scale-up and we are definitely we'll be ready to enter again to ASX 200. So on the ESG side, we have volunteering progress and formalized our commitment to reducing risk to managing sustainability. We've implemented and reported the ESG report way ahead of regulation requirements like years ahead. And we've conducted the materiality assessment, the ESG materiality assessment, recognizing 6 key factors that we think are critical to our long-term success. And we do plan to continue and invest on each and every one of them. Coby, your stage.

Then keeping us on time and everything. Okay. So thanks, Alla. And I guess the final slides on this, just emphasizing why Weebit, okay? People asked me many times why Weebit and why other companies have stopped for all kinds of reasons, the ReRAM projects or things like that. Why is Weebit going to be the one that's going to be successful? Well, I think the first point is just the company itself. We've built a strong company. You saw now the financials, you saw what we're doing and even in terms of governance and so on. We are very focused on -- I mean you look at the Board, right? You look at people that we have both -- by the way, people always focus on Dadi and Atiq and everything and they say, oh, yes, those are great technical luminaries. Hey, Atiq was President and COO of AMD, one of the major semiconductor companies. He was in Nasdaq. He was the President and COO of a company in Nasdaq. He knows also the regulation side and governance. And I think it's important to actually point that out because people never think about that. They always say, oh, Dadi, Atiq, you have -- they're on the technical side. Hey, Yoav, was the CEO of Tower, one of the top 10 foundries. He knows what NASDAQ is. He knows what being a CEO of a public company is. Dadi was sitting on the board of Mellanox for many years until it was acquired by NVIDIA, all of these things. We have a very strong Board that is a very strong basis to really drive this forward. And so it's the company, it's the people, the Board, the -- yes, '17, we updated probably. Joking. But it's the team, the VPs that I've been talking about so much each and every one of them, so experienced. I'm always in awe when I see how they work and make things move forward. Our technology, the focus on making something that the fabs will accept, having it the technology, on the one hand, standard material, standard tools, standard everything on the other hand, pushing it to the limits, making things that are thought impossible with ReRAM actually work. And these kinds of things, we have a great technology. And the bottom line is we're building the solutions. And when you look at AI and when you look at the power management and all of these different applications, we are working on good solutions, building the full solution for customers, we've had people come to us telling us, hey, we try to work with TSMC on ReRAM, but we needed some tailoring of the ReRAM modules, and they told us, hey, guys, we're a manufacturer. We're not a ReRAM company. We're not going to start tailoring things for every customer. And that's the point. Weebit will. Weebit is setting it up. By the way, we are now already working on a memory compiler to automate things so that we can actually put in the parameters that customers want them and have a lot of the work automated so we can be more efficient on it. So all of that stuff on the solutions side -- and sorry, things up here. And at the end of the day, it's all about the customers. It's the customers and the relationship with them and building that. And all of this together is really what builds our differentiation and what will enable us to continue forward. And every year at the AGM, I present what we want to do, and this year, it was kind of we said we're not at the point to give guidance yet. What are we going to do this? I said, hey, guys, we already are generating revenue. We have a good feeling that we can definitely pass the $10 million mark in fiscal year '26. So that's the target that we have right now for the sales guys. On the product, we want to have -- we have product customers who are designing with ReRAM. We want to get to the point where they're taping out. Again, it's taping out so that they can test and qualify. It's not mass production yet. But it's the first tape-out that we want to see. We want to see AI customers. And there's a big focus on AI, and we are expecting to see AI customers. So there's really a lot of work here, tornado is coming. And I think the target that is not written here, but survive the tornado is maybe the most important one. And I guess, at this point, we still have about 20 minutes for questions, and I guess we'll start with people in the room. And if anyone wants to, ask anything, we have that microphone that we need to pass around. Can you pass the microphone back there?

Coby, you mentioned that the market tends to see fabs and IDM see Weebit still a risk. At what point do you see that risk being resolved? And you crossed the tipping point? Is it the number of fabs and IDMs that engage with Weebit? Is that actually the first product company is getting their product into the market being used by consumers? What's your sense of when you move past that tipping point?

So I mean it's like all of the above, but it's a combination. It's a combination of not just numbers of companies, but who they are. There's, I guess, obviously, even for you guys, there will be a difference, if I say, a Samsung or an X-FAB, right, or something like that. So it's a combination of number of customers, but more importantly, who they are. Obviously, the day that we will have a product actually in mass production, what's called in our industry, silicon proven, I think that's definitely going to be knocking down a lot of those defenses and everything. So as you can see, we're getting close to that. We're having more customers. We'll be announcing another one, hopefully, soon. And others that are in the pipe already, we want to have the first product company taping out, testing and eventually getting to that mass production. So -- it's we're getting close to that point.

The other question perhaps, Alla might be able to help on this question or yourself, Coby. You've got AUD 90 million in the bank. And that's been a pretty steady amount. It's kind of fluctuated a little but not significantly. It's a two-pronged question. Firstly, do you hold that in Australian dollars or U.S. dollars? I assume you did business in U.S. dollars. Are you getting a return on that money as in being invested and earning some income on? And lastly, do you see a point where that $90 million is excess to your needs? Or are you pretty confident that you can spend it over the next couple of few years given the tornadoes coming?

So I'll start answering, and I'll let Alla continue and then I'll finish. My initial answer is, and I have to remind everyone always, when you look at our reports, the last quarter of the calendar year is always the biggest expense for us. And people need to remember that our expenses are not flat over the year. They tend to be kind of the 3 first quarters are somewhat bigger, somewhat smaller going up and down. The last quarter is normally a bigger expense. So whoever has been studying us already knows that, and that's kind of the initial comment. I'll let Alla talk about where the money is kept.

So we hold the money in the operating currencies being USD, euros and Israeli shekels and of course, Australian dollars. Of course, everything is then invested in interest-bearing. We know how to negotiate. Don't worry.

Yes. And in terms of using the money, we are focused on using the money wisely. I try to pretend as if I'm a wise person and because people have been asking me, oh, wait a -- when are you going to be breakeven? Hey, I'll just stop doing R&D now and we're breakeven today, right? But like Dadi says, tomorrow, you're broke out. You're dead. So we are actually growing the expenditure. You can see the number. We're joking about the number of PhDs, but -- it shows you the team is growing. And as you have more customers, you need to grow to support all of this activity. You need to have the R&D constantly ongoing and improving the technology. I really want to have the best ReRAM in the market. Hands down, nobody able to question that and be able to go right now, where you could say 1 of 4 ReRAMs in the world. I want to show everyone we are the best. And the other 3, as everyone knows, for me, they're potential customers. They're not competitors, and I want to get to the point where it's so obvious that we have a better ReRAM that they drop theirs and use ours.

Just Coby, a question. With the look ahead for the next 12 months, if it's possible, I know you said you got to 17 PhDs being on the books this year. Do you have a forward looking on the next 12 months and also with the sales team as well?