Core Viewpoint - GSI Technology, Inc. reported a significant improvement in its financial performance for the fourth fiscal quarter and the fiscal year ended March 31, 2025, with increased revenues and reduced net losses, driven by strong demand for its legacy SRAM chips and effective cost management [1][4]. Financial Performance Summary - **Fourth Quarter Results**: - Net revenues reached $5.9 million, a 14% increase year-over-year and a 9% increase sequentially [4][9]. - Gross margin improved to 56.1%, up from 51.6% in the same quarter last year [9]. - Operating loss was $(2.3) million, a reduction from $(4.5) million in the prior year [12]. - Net loss was $(2.2) million, or $(0.09) per diluted share, compared to $(4.3) million, or $(0.17) per diluted share, in the fourth quarter of fiscal 2024 [13]. - **Fiscal Year 2025 Results**: - Total net revenues for the fiscal year were $20.5 million, down from $21.8 million in fiscal 2024 [5]. - Gross margin for the year was 49.4%, compared to 54.3% in the previous year, primarily due to product mix and fixed costs [5]. - Operating expenses decreased to $21.0 million from $32.3 million in fiscal 2024, with R&D expenses reduced to $16.0 million from $21.7 million [6]. - The net loss for the fiscal year was $(10.6) million, or $(0.42) per diluted share, compared to $(20.1) million, or $(0.80) per diluted share, in fiscal 2024 [8]. Strategic Developments - The company secured an initial order for radiation-hardened SRAM from a North American prime contractor, with expectations for follow-on orders in fiscal 2026, which are anticipated to have a higher gross margin [4]. - GSI Technology is pursuing heritage status for its radiation-hardened SRAM, which will enhance market readiness and open new sales channels [4]. - The company is on track to deliver production-ready Gemini-II chips and Leda-2 boards by the end of the first quarter of fiscal 2026, with ongoing SBIR programs with the Space Development Agency and US Air Force Research Laboratory [4]. Cash and Equity Position - As of March 31, 2025, the company had $13.4 million in cash and cash equivalents, down from $14.4 million a year earlier [14]. - Working capital decreased to $16.4 million from $24.7 million at the same time last year, and stockholders' equity was $28.2 million, down from $36.0 million [14].

Core Viewpoint - GSI Technology, Inc. will announce its financial results for the fiscal fourth quarter and year ended March 31, 2025, on May 1, 2025, after market close, and will provide an outlook for the first quarter of fiscal 2026 during a conference call [1]. Company Overview - GSI Technology, Inc. is a leading provider of semiconductor memory solutions, founded in 1995, with a focus on developing new products that leverage its core strengths, including radiation-hardened memory products and the Gemini-I associative processing unit for AI applications [4]. - The company is headquartered in Sunnyvale, California, and has sales offices across the Americas, Europe, and Asia [4]. Financial Results Announcement - The financial results announcement will take place after market close on May 1, 2025, with a conference call scheduled for 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on the same day [1]. - Participants can join the call by dialing specific numbers provided for U.S. and international callers, approximately 10 minutes before the start time [2]. Call Replay Information - A replay of the conference call will be available from May 1, 2025, at 7:30 p.m. Eastern Time until May 8, 2025, at 11:59 p.m. Eastern Time, with specific dialing instructions for U.S. and international callers [3]. - The webcast of the call will be archived on the company's investor relations website under the Events and Presentations tab [3].

Financial Performance - Net revenues increased by 1.8% from $5.3 million in Q3 2023 to $5.4 million in Q3 2024, but decreased by 11.9% from $16.6 million in the nine months ended December 31, 2023 to $14.6 million in the same period in 2024[113]. - Gross profit decreased by 1.8% from $3.0 million in Q3 2023 to $2.9 million in Q3 2024, and by 25.4% from $9.2 million in the nine months ended December 31, 2023 to $6.8 million in the same period in 2024[117]. - Net loss was $6.6 million in Q3 2023 compared to $4.0 million in Q3 2024, and $15.8 million in the nine months ended December 31, 2023 compared to $8.4 million in the same period in 2024[124]. Revenue Sources - Revenue is primarily generated from Very Fast SRAM products, with direct and indirect sales to networking and telecommunications OEMs accounting for 32% to 49% of net revenues over the last three fiscal years[100]. - Nokia was the largest end user customer, representing approximately 14% of net revenues in the nine months ended December 31, 2024, down from 29% in fiscal 2022[105]. Cash and Cash Equivalents - The company reported cash and cash equivalents of $15.1 million as of December 31, 2024, with no debt[98]. - Cash and cash equivalents as of December 31, 2024 were $15.1 million, up from $14.4 million as of March 31, 2024[125]. - The company has cash and cash equivalents totaling $15.1 million as of December 31, 2024, primarily invested in money market funds for working capital purposes[140]. Operating Expenses - Operating expenses were reduced by approximately $3.5 million on an annualized basis, resulting in a 16% decrease in the global workforce[99]. - Selling, general and administrative expenses increased by 11.7% from $2.7 million in Q3 2023 to $3.0 million in Q3 2024[120]. - Research and development expenses decreased by 42.1% from $7.0 million in Q3 2023 to $4.0 million in Q3 2024, primarily due to a decrease in pre-production mask costs[118]. Future Outlook - The company anticipates continued inflationary pressures and geopolitical tensions will negatively impact financial performance in fiscal 2025 and beyond[98]. - The company has experienced increased costs due to inflation and supply chain constraints, affecting the cost of revenues[106]. - Future capital requirements will depend on factors such as revenue growth, manufacturing cost increases, and spending to support product development and sales expansion[131]. - The company may require additional capital for potential acquisitions of businesses, products, or technologies[131]. Contracts and Agreements - The company expects to receive milestone payments totaling an estimated $1.25 million under a prototype agreement with the Space Development Agency for the development of APU2[95]. - The company received payments of $124,000 and $157,000 under two separate contracts during the nine months ended December 31, 2024[95][97]. Financial Activities - Net cash used in operating activities was $11.3 million for the nine months ended December 31, 2024, compared to $10.2 million for the same period in 2023[126]. - Net cash provided by investing activities was $11.4 million in the nine months ended December 31, 2024, compared to $2.8 million in the same period in 2023[129]. - Net cash provided by financing activities in the nine months ended December 31, 2024 was $622,000, down from $1.6 million in the same period in 2023[130]. Accounting and Risk Management - The company completed its annual goodwill impairment test with no impairment noted, maintaining a goodwill balance of $8.0 million[111]. - The company has no off-balance sheet arrangements or relationships with unconsolidated entities, mitigating exposure to financing, liquidity, market, or credit risk[136]. - The company does not currently enter into forward exchange contracts to hedge foreign currency exposure, which is minimal due to most revenues and expenses being denominated in U.S. dollars[139]. - 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[140]. - The company has disclosed critical accounting estimates in its Annual Report on Form 10-K for the fiscal year ended March 31, 2024[134].

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]