Core Viewpoint - GSI Technology, Inc. reported a narrower net loss and a slight increase in revenues, but the stock has underperformed compared to the S&P 500 index, indicating potential challenges ahead for the company [1][2]. Financial Performance - GSI Technology incurred a net loss of 16 cents per share in Q3 fiscal 2025, an improvement from a loss of 26 cents per share in the same quarter last year [2]. - The company reported net revenues of $5.4 million, a 2% increase from $5.3 million in the prior-year period [2]. - Gross margin decreased to 54% from 55.9% in the prior-year quarter [2]. - Operating expenses declined to $7 million from $9.7 million a year ago, with R&D spending dropping to $4 million from $7 million [3]. - Selling, general, and administrative (SG&A) expenses rose to $3 million from $2.7 million a year ago [3]. - The operating loss narrowed to $4.1 million from $6.7 million in the prior-year quarter, while the net loss narrowed to $4 million from $6.6 million [3]. Business Metrics - Military and defense sales accounted for 30% of total shipments, up from 28.2% in the prior-year period [4]. - Sales to Nokia declined to $0.2 million, representing 4.4% of total revenues, down from $0.8 million (15.2%) a year ago [4]. - SigmaQuad sales accounted for 39.1% of total shipments, down from 46.9% in the year-ago period [4]. Cash Position - As of Dec. 31, 2024, GSI Technology had cash and cash equivalents of $15.1 million, up from $14.4 million at the end of fiscal 2024 [5]. - Working capital stood at $17.9 million, compared to $19.1 million as of March 31, 2024 [5]. - Stockholders' equity decreased to $29.9 million from $36 million at fiscal year-end [5]. Management Commentary - The CEO highlighted progress in revenue growth and cost reduction initiatives, noting a key customer in the AI semiconductor industry is ramping up orders, potentially becoming GSIT's largest revenue contributor in fiscal 2025 [6]. Product Development - The APU initiative is advancing, with the Gemini-II chip on track for a February tape-out and availability in May [7]. - A new chip, Plato, was introduced to leverage Gemini-II's architecture for edge AI and large language model applications [7]. Performance Influencers - The sequential improvement in gross margin was attributed to higher revenues, a favorable product mix, and the absence of severance costs incurred in the prior quarter [8]. - Declining sales to Nokia and shifts in defense segment contributions could affect future revenue composition, but strengthening SRAM demand and a pipeline of government contracts may provide stability [9]. Guidance - For Q4 fiscal 2025, GSI Technology expects net revenues to range between $5.4 million and $6.2 million, with gross margin projected between 55% and 57% [10]. Strategic Developments - GSI Technology is conducting a strategic review with Needham & Company to evaluate alternatives for enhancing shareholder value [11]. - The company secured a $0.3 million Phase 1 SBIR contract with the U.S. Army for AI-driven edge computing applications, with existing SBIR projects on track [11].

Financial Performance - GSI Technology reported net revenues of $5.4 million for Q3 FY2025, a 2% increase year-over-year and a 19% increase sequentially[2]. - Gross margin for Q3 FY2025 was 54.0%, compared to 55.9% in Q3 FY2024 and 38.6% in Q2 FY2025[3]. - Operating loss for Q3 FY2025 was $(4.1) million, an improvement from $(6.7) million in Q3 FY2024 and $(5.6) million in Q2 FY2025[7]. - Net loss for Q3 FY2025 was $(4.0) million, or $(0.16) per diluted share, compared to $(6.6) million, or $(0.26) per diluted share in Q3 FY2024[8]. - Research and development expenses decreased to $4.0 million in Q3 FY2025 from $7.0 million in the prior-year period[5]. - GSI Technology anticipates Q4 FY2025 net revenues to be in the range of $5.4 million to $6.2 million, with a gross margin of approximately 55% to 57%[2]. Sales and Revenue Composition - Sales to Nokia accounted for 4.4% of net revenues in Q3 FY2025, down from 15.2% in Q3 FY2024[4]. - Military/defense sales represented 30.0% of shipments in Q3 FY2025, compared to 28.2% in the same period a year ago[4]. Cash and Assets - The company had $15.1 million in cash and cash equivalents as of December 31, 2024, up from $14.4 million at March 31, 2024[9]. - Total assets increased to $44,133 million as of December 31, 2024, up from $42,464 million on March 31, 2024, representing a growth of 3.93%[20]. - Cash and cash equivalents rose to $15,085 million, an increase of 4.54% from $14,429 million[20]. - Accounts receivable increased to $3,583 million, up 15% from $3,118 million[20]. - Inventory decreased to $3,885 million, down 22% from $4,977 million[20]. Liabilities and Equity - Current liabilities increased to $5,900 million, up 9.94% from $5,365 million[20]. - Long-term liabilities significantly increased to $8,300 million from $1,129 million, indicating a rise of 636.2%[20]. - Stockholders' equity decreased to $29,933 million from $35,970 million, a decline of 16.7%[21]. - Operating lease right-of-use assets increased to $9,858 million from $1,553 million, a substantial rise of 533.5%[20]. - Other current assets decreased to $1,267 million from $1,954 million, a decline of 35.2%[20]. - Total liabilities and stockholders' equity remained consistent at $44,133 million as of December 31, 2024[21]. Technology Development - GSI Technology is progressing on the development of its APU technology, with the Gemini-II chip on track for a February tape-out and availability in May[2].

Core Viewpoint - GSI Technology, Inc. reported a slight increase in net revenues for the third fiscal quarter of 2025, driven by a rebound in customer orders and strengthening core SRAM sales, particularly from a key customer in the AI chip manufacturing sector [4][5]. Financial Performance - Net revenues for the third quarter of fiscal 2025 were $5.4 million, a 2% increase year-over-year and a 19% increase sequentially [4][5]. - Gross margin was 54.0%, down from 55.9% in the same quarter last year but up from 38.6% in the previous quarter [5]. - Operating expenses totaled $7.0 million, a decrease from $9.7 million in the prior-year period [7]. - The operating loss for the third quarter was $(4.1) million, an improvement from $(6.7) million in the same quarter last year [8]. - Net loss was $(4.0) million, or $(0.16) per diluted share, compared to a net loss of $(6.6) million, or $(0.26) per diluted share, for the same period last year [9]. Sales and Customer Insights - Sales to Nokia accounted for $239,000, or 4.4% of net revenues, a significant decrease from $807,000, or 15.2% of net revenues, in the same period a year ago [6]. - Military/defense sales represented 30.0% of third-quarter shipments, up from 28.2% year-over-year [6]. Research and Development - The development of APU technology is progressing, with the Gemini-II chip on track for a February tape-out and expected availability in May [4]. - The latest version of Gemini-II aims to enhance AI capabilities by integrating advanced neural networks with radar imaging technology [4]. Outlook - The company anticipates fourth-quarter net revenues to be in the range of $5.4 million to $6.2 million, with a gross margin of approximately 55% to 57% [4]. Balance Sheet Highlights - As of December 31, 2024, the company had $15.1 million in cash and cash equivalents, an increase from $14.4 million at the end of March 2024 [10]. - Stockholders' equity decreased to $29.9 million from $36.0 million at the end of the previous fiscal year [10][22].

Core Insights - GSI Technology has been selected by the U.S. Army for a potential contract worth up to $250,000 under the DoD Small Business Innovation Research (SBIR) program, aimed at developing advanced edge computing AI solutions using its Gemini-II technology [1][4]. Group 1: Project Objectives - The project will focus on integrating Gemini-II with AI models tailored for the Army's edge computing needs, involving a comprehensive assessment of operational challenges and establishing key performance metrics [2]. - The second objective is to identify and validate suitable AI algorithms for the Gemini-II platform, emphasizing low-latency and high-throughput applications relevant to military environments [3]. Group 2: Technology and Innovation - The Gemini-II platform is a second-generation APU technology that processes data directly in memory, significantly reducing power consumption and bottleneck transfer latency while enhancing overall processing capacity [4]. - The project aims to develop 1-bit Large Language Models (LLMs) for the U.S. Army, which promise high accuracy with low power consumption and minimal latency, with potential applications in various dual-use markets [5]. Group 3: Strategic Positioning - The SBIR contract highlights GSI Technology's commitment to advancing edge computing and AI technologies, positioning the company at the forefront of innovation in both defense and commercial computing sectors [6].

Core Viewpoint - GSI Technology, Inc. will announce its financial results for the fiscal third quarter of 2025 on January 30, 2025, and will provide an outlook for the fourth quarter during a conference call [1]. Group 1: Financial Results Announcement - The financial results for the fiscal third quarter 2025, which ended on December 31, 2024, will be released after market close on January 30, 2025 [1]. - A conference call to discuss the third quarter results and the fourth quarter outlook will take place at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on the same day [1]. Group 2: Participation Details - Participants can join the call by dialing 1-877-407-3982 in the U.S. or 1-201-493-6780 internationally, approximately 10 minutes before the start time, using Conference ID 13751185 [2]. - The call will also be available for live streaming on the company's investor relations website [2]. Group 3: Replay Information - A replay of the conference call will be accessible from January 30, 2025, at 7:30 p.m. Eastern Time until February 6, 2025, at 11:59 p.m. Eastern Time [3]. - The replay can be accessed by dialing 1-844-512-2921 for the U.S. or 1-412-317-6671 internationally, entering pin number 13751185 [3]. Group 4: Company Overview - GSI Technology is a leader in AI and high-performance parallel computing, known for its Gemini® Associative Processing Unit (APU) [4]. - The company provides high-performance memory solutions for various markets, including networking, telecommunications, and military [4]. - GSI's innovations, Gemini-I® and Gemini-II®, are designed for scalable, low-power, high-capacity computing, enhancing edge computing capabilities [4].

Financial Performance - Net revenues decreased by 20.3% from $5.7 million in Q3 2023 to $4.6 million in Q3 2024, and by 18.4% from $11.3 million in the first half of 2023 to $9.2 million in the first half of 2024[106]. - Gross profit decreased by 43.7% from $3.1 million in Q3 2023 to $1.8 million in Q3 2024, with gross margin dropping from 54.7% to 38.6%[112]. - Net loss was $5.5 million in Q3 2024 compared to $4.1 million in Q3 2023, and $4.4 million in the first half of 2024 compared to $9.2 million in the first half of 2023[120]. - The average selling price of units shipped decreased by 12.0% in Q3 2024 compared to Q3 2023, with the number of units shipped decreasing by 10.5%[106]. - Direct and indirect sales to Nokia decreased from $1.2 million in Q3 2023 to $812,000 in Q3 2024, and from $3.0 million in the first half of 2023 to $1.8 million in the first half of 2024[110]. Cash and Liquidity - Cash and cash equivalents of $18.4 million as of September 30, 2024, with no debt[90]. - Cash and cash equivalents increased to $18.4 million as of September 30, 2024, up from $14.4 million as of March 31, 2024[121]. - Net cash used in operating activities was $7.7 million for the first half of 2024, compared to $6.3 million for the first half of 2023[122]. - Net cash provided by investing activities was $11.3 million in the first half of 2024, primarily from the sale and leaseback transaction[125]. - Net cash provided by financing activities for the six months ended September 30, 2024, was $373,000, compared to $1.5 million for the same period in 2023[126]. - The company believes its existing cash balances and future cash flow will be sufficient for working capital and capital expenditures for at least the next 12 months[127]. - The company sold 133,000 shares at an average price of $4.20 for proceeds of $542,000 during the quarter ended September 30, 2023[127]. Operational Changes - The company initiated measures to reduce operating expenses by approximately $3.5 million annually, resulting in a 16% decrease in the global workforce[91]. - The company has experienced a decline in revenues due to changes in customer buying patterns and communication limitations related to COVID-19, with a decrease in revenues expected in the second half of fiscal 2023 and into fiscal 2025[87]. - Research and development expenses are expected to remain substantial as the company invests in new in-place associative computing products, potentially leading to operating losses in some periods[102]. - Research and development expenses increased by 2.1% from $4.7 million in Q3 2023 to $4.8 million in Q3 2024, primarily due to outside consulting expenses for the next generation APU product[113]. - Selling, general and administrative expenses increased by 1.2% from $2.5 million in Q3 2023 to $2.6 million in Q3 2024, while decreasing by 6.7% from $5.5 million in the first half of 2023 to $5.2 million in the first half of 2024[116]. Market Conditions - The company expects continued inflationary pressures and high interest rates to negatively impact general economic activity and demand in its end markets over the next 12 months[90]. - The company has been impacted by increased costs due to inflation and supply chain constraints, particularly in wafer fabrication and outsourced manufacturing[98]. - The company anticipates fluctuations in quarterly net revenues due to the cyclical nature of the semiconductor industry and reliance on obtaining and shipping orders within the same quarter[94]. Goodwill and Obligations - The company completed its annual goodwill impairment test with no impairment noted, maintaining a goodwill balance of $8.0 million as of September 30, 2024[104]. - As of September 30, 2024, the company had $14.9 million in purchase obligations, with $1.6 million due in the next twelve months[128]. - The accrual for potential contingent consideration related to the acquisition of MikaMonu was $51,000 as of September 30, 2024, payable through December 31, 2025[129]. Financial Instruments and Risk Management - The company does not currently enter into forward exchange contracts to hedge foreign currency exposure, which is minimal[134]. - A hypothetical 100 basis point change in interest rates is not expected to materially affect the fair value of the company's interest-sensitive financial instruments[135]. - The company may require additional capital for potential acquisitions of businesses, products, or technologies in the future[127].

Financial Data and Key Metrics Changes - The company reported net revenues of $4.6 million for Q2 fiscal 2025, down from $5.7 million in Q2 fiscal 2024 and $4.7 million in Q1 fiscal 2025 [17] - Gross margin decreased to 38.6% in Q2 fiscal 2025 from 54.7% in Q2 fiscal 2024 and 46.3% in Q1 fiscal 2025, primarily due to a shift in product mix and non-recurring severance costs [17] - Operating loss for Q2 fiscal 2025 was $5.6 million, compared to an operating loss of $4.1 million in the prior year and operating income of $1.1 million in the prior quarter [19] - Net loss was $5.4 million or $0.21 per diluted share, compared to a net loss of $4.1 million or $0.60 per diluted share in Q2 fiscal 2024 and net income of $1.1 million or $0.04 per diluted share in Q1 fiscal 2025 [20] - Cash and cash equivalents increased to $18.4 million as of September 30, 2024, from $14.4 million at March 31, 2024 [21] Business Line Data and Key Metrics Changes - The SRAM business is experiencing a turnaround, with existing customers depleting channel inventories and a new SRAM design secured with significant growth potential [3] - Sales to Nokia were $812,000, representing 17.8% of net revenues, down from $1.2 million or 20.3% in the same period a year ago [13] - Military/defense sales accounted for 40.2% of shipments in Q2 fiscal 2025, up from 34.8% in the comparable period a year ago [13] Market Data and Key Metrics Changes - Demand for SRAM chips is expected to rise due to the growth in high-performance computing hardware and the introduction of a new AI chip by a leading tech company [9] - The company is engaged with two customers on SAR edge applications, transitioning from evaluating Gemini-I to Gemini-II [12] Company Strategy and Development Direction - The company is implementing strategic cost-cutting measures to extend its financial runway and capitalize on immediate and long-term opportunities, aiming for annualized savings of about $3.5 million [6] - The company is on track to meet milestones for the Gemini-II benchmarking projects and is excited about software fixes for the Gemini-II development [4] Management's Comments on Operating Environment and Future Outlook - Management anticipates a significant increase in SRAM orders in upcoming quarters as customers work through excessive inventory [10] - The company is optimistic about the collaboration with a new customer in the AI chip sector, which is expected to drive substantial demand for SRAM chips [10] Other Important Information - The company is working with Needham & Company as a strategic and financial advisor to evaluate specific strategic alternatives [21] Q&A Session Summary Question: Is the SRAM opportunity associated with semi equipment wafer fabrication or semi test equipment? - The company confirmed it is associated with manufacturing but did not disclose the specific customer details at this time [22][23] Question: What is the difference between Plato and Gemini-II L? - Plato is a new design targeting the LLM market specifically on the edge, while Gemini-II L is a derivative of Gemini-II configured for lower power usage [24]

Financial Performance - GSI Technology reported net revenues of $4.6 million for Q2 FY2025, down from $5.7 million in Q2 FY2024 and $4.7 million in Q1 FY2025[2] - Gross margin decreased to 38.6% in Q2 FY2025 from 54.7% in Q2 FY2024 and 46.3% in Q1 FY2025, primarily due to product mix and severance costs[2] - Operating loss for Q2 FY2025 was $(5.6) million, compared to an operating loss of $(4.1) million in the prior-year period and operating income of $1.1 million in the prior quarter[5] - Net loss for Q2 FY2025 was $(5.5) million, or $(0.21) per diluted share, compared to a net loss of $(4.1) million, or $(0.16) per diluted share, in Q2 FY2024[5] - Total operating expenses in Q2 FY2025 were $7.3 million, compared to $7.2 million in Q2 FY2024 and $1.1 million in the prior quarter, which included a one-time gain of $5.7 million[4] Revenue Sources - Sales to Nokia accounted for $812,000, or 17.8% of net revenues in Q2 FY2025, down from $1.2 million, or 20.3% in the same period a year ago[3] - Military/defense sales represented 40.2% of second quarter shipments, up from 34.8% in the comparable period a year ago[3] Future Outlook - GSI Technology anticipates Q3 FY2025 net revenues in the range of $4.7 million to $5.5 million, with gross margin expected to be approximately 50% to 52%[1] - The company expects to achieve annual savings of $3.5 million from strategic cost-cutting measures implemented in Q2 FY2025[1] Cash Position - GSI Technology had $18.4 million in cash and cash equivalents as of September 30, 2024, compared to $14.4 million at March 31, 2024[6]

Core Viewpoint - GSI Technology, Inc. will announce its financial results for the fiscal second quarter 2025 on October 24, 2024, and will provide an outlook for the third quarter during a conference call [1]. Financial Results Announcement - The financial results for the fiscal second quarter 2025, which ended on September 30, 2024, will be released after market close on October 24, 2024 [1]. - A conference call to discuss the results and the outlook for the third quarter will take place at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on the same day [1]. Participation Details - Participants can join the call by dialing 1-877-407-3982 in the U.S. or 1-201-493-6780 internationally, approximately 10 minutes before the start time, using Conference ID 13749240 [2]. - The call will also be streamed live on the internet [2]. Replay Information - A replay of the call will be available from October 24, 2024, at 7:30 p.m. Eastern Time until October 31, 2024, at 11:59 p.m. Eastern Time [3]. - The replay can be accessed by dialing 1-844-512-2921 in the U.S. or 1-412-317-6671 internationally, entering pin number 13749240 [3]. - A webcast of the call will be archived on the company's investor relations website [3]. Company Overview - GSI Technology is a leader in AI and high-performance parallel computing, known for its Gemini® Associative Processing Unit (APU) [4]. - The company provides high-performance memory solutions for various markets, including networking, telecommunications, and military [4]. - GSI's innovations, Gemini-I® and Gemini-II®, offer scalable, low-power, high-capacity computing solutions, enhancing edge computing capabilities [4].

Company Overview - GSI Technology, Inc. is a leading provider of semiconductor memory solutions, founded in 1995 [4] - The company has recently launched radiation-hardened memory products designed for extreme environments in space [4] - GSI Technology is known for its Gemini® Associative Processing Unit (APU), which offers significant performance advantages for various AI applications [4] Product Innovation - The Gemini APU architecture eliminates the I/O bottleneck between processors and memory arrays by enabling massive parallel searches directly in the memory array [4] - This novel architecture provides improved performance-over-power ratios compared to traditional CPU, GPU, and DRAM solutions [4] - The Gemini APU is particularly suitable for edge applications due to its scalable format, small footprint, and low power consumption, making it ideal for rapid and accurate responses [4] Upcoming Events - GSI Technology management is scheduled to participate in the 5th Annual Needham Semiconductor & SemiCap 1x1 Conference on August 21, 2024 [1] - Didier Lasserre, Vice President of Sales and Investor Relations, will host one-on-one meetings during the conference [1] - A webcast of GSI Technology's presentation will be available on the company's website under the Events and Presentations tab [3]