GSI Technology(GSIT) - 2026 Q1 - Quarterly Results

Executive Summary & Business Highlights GSI Technology's Gemini-II chip is production-ready, with new AI algorithms for edge applications, while Q1 FY2026 saw net revenues of $6.3 million, improved gross margin, and a strong cash balance CEO Commentary & Strategic Updates GSI Technology's CEO announced the Gemini-II chip is production-ready, with SAR and YOLO algorithms optimized for Edge AI, and a multi-modal LLM under development for edge applications - Gemini-II chip's second silicon spin is fully functional and production-ready, with all known bugs resolved[3] - Finalized SAR and YOLO algorithms, optimized for a low-power Leda board, targeting Edge AI applications such as drones in GPS-denied environments and next-generation satellite applications[3] - Developing a multi-modal Large Language Model (LLM) optimized for edge applications, with benchmark results anticipated by fall 2025[3][6] Key Financial Highlights GSI Technology reported Q1 FY2026 net revenues of $6.3 million, a 58.1% gross margin, and a strong $22.7 million cash balance, with increased SRAM revenue | Metric | Q1 FY2026 ($) | Q1 FY2025 ($) | Q4 FY2025 ($) | | :---------------- | :-------- | :-------- | :-------- | | Net Revenues | $6.3M | $4.7M | $5.9M | | Gross Margin | 58.1% | 46.3% | 56.1% | - SRAM revenue increased 7% sequentially and 35% year-over-year, driven by strong market momentum for leading AI processors[6] | Metric | June 30, 2025 ($) | March 31, 2025 ($) | | :---------------- | :-------------- | :------------- | | Cash Balance | $22.7M | $13.4M | Financial Performance - First Quarter Fiscal Year 2026 GSI Technology's Q1 FY2026 financial performance shows increased net revenues and gross margin, managed operating expenses, a net loss, and a significantly strengthened balance sheet with higher cash and working capital Net Revenues and Gross Margin GSI Technology's Q1 FY2026 net revenues reached $6.3 million, a 34% year-over-year increase, with gross margin significantly improving to 58.1% due to product mix and higher revenue Net Revenues and Gross Margin Trends | Metric | Q1 FY2026 ($) | Q1 FY2025 ($) | Q4 FY2025 ($) | | :---------------- | :-------- | :-------- | :-------- | | Net Revenues | $6.3M | $4.7M | $5.9M | | Gross Margin | 58.1% | 46.3% | 56.1% | - Gross margin increased by 200 basis points sequentially and over 1,100 basis points year-over-year, reaching its highest level in over two years, driven by product mix and higher revenue impacting fixed costs[4][6] Key Customer Sales as % of Net Revenues (Q1 FY2026) | Customer/Segment | Q1 FY2026 (% of Net Revenues) | Q1 FY2025 (% of Net Revenues) | Q4 FY2025 (% of Net Revenues) | | :----------------- | :---------------------------- | :---------------------------- | :---------------------------- | | KYEC | 4.3% | 21.9% | 29.5% | | Nokia | 8.5% | 21.4% | 7.5% | | Cadence Design Systems | 23.9% | 0% | 10.9% | | Military/Defense | 19.1% (of shipments) | 31.9% (of shipments) | 30.7% (of shipments) | | SigmaQuad | 62.5% (of shipments) | 36.3% (of shipments) | 39.3% (of shipments) | Operating Expenses Total operating expenses for Q1 FY2026 were $5.8 million, a decrease from the prior year (excluding a one-time gain), with R&D expenses declining and SG&A remaining stable Operating Expenses Trends (in thousands) | Expense Category | Q1 FY2026 | Q1 FY2025 (excl. gain) | Q4 FY2025 | | :----------------- | :-------- | :--------------------- | :-------- | | Total Operating Expenses | $5,827 | $6,800 | $5,575 | | Research & Development | $3,097 | $4,214 | $2,966 | | Selling, General & Administrative | $2,730 | $2,604 | $2,609 | Stock-Based Compensation Expense (in thousands) | Expense Category | Q1 FY2026 | Q1 FY2025 | Q4 FY2025 | | :----------------- | :-------- | :-------- | :-------- | | Total Stock-Based Compensation | $341 | $658 | $512 | Net Income (Loss) and EPS GSI Technology reported a Q1 FY2026 operating loss of $(2.2) million and a net loss of $(2.2) million, or $(0.08) per diluted share, contrasting with prior-year net income that included a one-time gain Net Income (Loss) and EPS Trends | Metric | Q1 FY2026 ($) | Q1 FY2025 ($) | Q4 FY2025 ($) | | :---------------- | :-------- | :-------- | :-------- | | Operating Income (Loss) | $(2.2)M | $(4.7)M (excl. gain) | $(2.3)M | | Net Income (Loss) | $(2.2)M | $1.1M (incl. gain) | $(2.2)M | | Diluted EPS | $(0.08) | $0.04 | $(0.09) | - The net income of $1.1 million in Q1 FY2025 included a one-time gain of $5.7 million from the sale and leaseback of the company's corporate headquarters[8][9] Balance Sheet and Liquidity As of June 30, 2025, GSI Technology significantly increased cash and cash equivalents to $22.7 million, with working capital improving to $25.7 million and stockholders' equity growing to $37.4 million Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :---------------- | :-------------- | :------------- | | Cash and Cash Equivalents | $22,725 | $13,434 | | Working Capital | $25,700 | $16,400 | | Stockholders' Equity | $37,374 | $28,226 | | Total Assets | $50,505 | $43,317 | - The increase in cash balance includes proceeds from the "at the market" (ATM) program[6] Business Outlook GSI Technology provides Q2 FY2026 guidance, projecting net revenues between $5.9 million and $6.7 million, with a gross margin of 56% to 58% Second Quarter Fiscal Year 2026 Guidance For Q2 FY2026, GSI Technology anticipates net revenues between $5.9 million and $6.7 million, with a gross margin projected at 56% to 58% Q2 FY2026 Financial Outlook | Metric | Guidance Range | | :---------------- | :------------- | | Net Revenues ($) | $5.9M - $6.7M | | Gross Margin (%) | 56% - 58% | Company Information GSI Technology, founded in 1995, is an AI leader specializing in APU technology for high-performance edge computing, with contact details provided for investor and media relations About GSI Technology GSI Technology leads the AI revolution with APU technology for efficient database searches and high-performance edge computing, leveraging Gemini-I® and Gemini-II® innovations, founded in 1995 with 127 employees and over 125 patents - GSI Technology is at the forefront of the AI revolution with groundbreaking APU technology designed for unparalleled efficiency in billion-item database searches and high-performance computing[12] - Innovations like Gemini-I® and Gemini-II® offer scalable, low-power, high-capacity computing solutions that redefine edge computing capabilities[12] - Founded in 1995, headquartered in Sunnyvale, California, with 127 employees and over 125 granted patents[13] Investor Relations & Media Contacts Investor relations are managed by Hayden IR, media relations by Finn Partners, and company inquiries are directed to CFO Douglas M. Schirle - Investor Relations contact: Kim Rogers, Managing Director at Hayden IR (385-831-7337, Kim@HaydenIR.com)[17] - Media Relations contact: Ricca Silverio at Finn Partners for GSI Technology (415-348-2724, gsi@finnpartners.com)[17] - Company contact: Douglas M. Schirle, Chief Financial Officer (408-331-9802)[17] Forward-Looking Statements & Risk Factors This section details forward-looking statements, highlighting that actual results may materially differ due to risks like operating fluctuations, customer dependence, market evolution, competition, and challenges in new product and market development, all amplified by current economic and geopolitical conditions - Forward-looking statements are based on current information and involve risks and uncertainties that could cause actual results to differ materially[14] - Key risks include fluctuations in operating results, historical dependence on a limited number of customers, global public health crises, rapidly evolving markets, the need to develop new products, intense competition, and challenges in developing new products and customer relationships for associative computing and SRAM products[14][15] - Economic and geopolitical conditions, such as changing interest rates, inflationary pressures, policy unpredictability, trade barriers, military conflicts, and global economic declines, are currently amplifying these risks[15] Condensed Consolidated Financial Statements This section presents GSI Technology's Condensed Consolidated Statements of Operations and Balance Sheets, detailing financial performance and position for the specified periods Condensed Consolidated Statements of Operations The Condensed Consolidated Statements of Operations detail GSI Technology's financial performance for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, encompassing revenues, cost of goods sold, operating expenses, and net income (loss) per share Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------ | :----------------------------- | | Net revenues | $6,283 | $5,883 | $4,671 | | Cost of goods sold | 2,632 | 2,584 | 2,510 | | Gross profit | 3,651 | 3,299 | 2,161 | | Operating expenses: | | | | | Research & development | 3,097 | 2,966 | 4,214 | | Selling, general and administrative | 2,730 | 2,609 | 2,604 | | Gain from sale and leaseback transaction | - | - | (5,737) | | Total operating expenses | 5,827 | 5,575 | 1,081 | | Operating income (loss) | (2,176) | (2,276) | 1,080 | | Interest and other income, net | 13 | 52 | 55 | | Income (loss) before income taxes | (2,163) | (2,224) | 1,135 | | Provision for income taxes | 54 | 6 | 57 | | Net income (loss) | $(2,217) | $(2,230) | $1,078 | | Net income (loss) per share, basic | $(0.08) | $(0.09) | $0.04 | | Net income (loss) per share, diluted | $(0.08) | $(0.09) | $0.04 | | Weighted-average shares used in computing per share amounts: | | | | | Basic | 26,967 | 25,604 | 25,374 | | Diluted | 26,967 | 25,604 | 25,686 | Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets outline GSI Technology's financial position as of June 30, 2025, and March 31, 2025, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2025 | March 31, 2025 | | :---------------------------------- | :-------------- | :------------- | | Cash and cash equivalents | $22,725 | $13,434 | | Accounts receivable | 1,587 | 3,169 | | Inventory | 3,763 | 3,891 | | Other current assets | 3,012 | 2,961 | | Net property and equipment | 722 | 808 | | Operating lease right-of-use assets | 9,232 | 9,547 | | Other assets | 9,464 | 9,507 | | Total assets | $50,505 | $43,317 | | Current liabilities | $5,372 | $7,074 | | Long-term liabilities | 7,759 | 8,017 | | Stockholders' equity | 37,374 | 28,226 | | Total liabilities and stockholders' equity | $50,505 | $43,317 |