GSI Technology(US:GSIT)2025-11-07 21:05Financial Position - The company reported cash and cash equivalents of $25.3 million as of September 30, 2025, with no debt[99]. - Cash and cash equivalents increased to $25.3 million as of September 30, 2025, up from $13.4 million as of March 31, 2025[129]. - The company believes existing cash and cash equivalents will be sufficient for working capital and capital expenditures for at least the next 12 months[135]. - Cash and cash equivalents totaled $25.3 million at September 30, 2025, primarily invested in money market funds[144]. - As of September 30, 2025, the company had $13.2 million in purchase obligations, with $1.9 million payable in the next twelve months[137]. Revenue and Sales Performance - Direct and indirect sales to networking and telecommunications OEMs accounted for 19% to 34% of net revenues over the last three fiscal years[103]. - The largest end user customers in fiscal 2025 were KYEC, Nokia, and Cadence Design Systems, with significant fluctuations in sales expected[109]. - Net revenues increased by 41.6% from $4.6 million in Q3 2024 to $6.4 million in Q3 2025, and by 38.0% from $9.2 million in the first half of 2024 to $12.7 million in the first half of 2025[117]. - Direct and indirect sales to KYEC increased by $152,000 in Q3 2025 compared to Q3 2024, while sales to Nokia decreased significantly[117]. - The overall average selling price of units shipped increased by 19.2% in Q3 2025 compared to Q3 2024, while the number of units shipped increased by 19.0%[117]. Profitability and Expenses - Gross profit rose by 101.1% from $1.8 million in Q3 2024 to $3.5 million in Q3 2025, with gross margin increasing from 38.6% to 54.8%[121]. - Research and development expenses decreased by 21.3% from $4.8 million in Q3 2024 to $3.8 million in Q3 2025, and by 23.7% from $9.0 million in the first half of 2024 to $6.9 million in the first half of 2025[122]. - Selling, general and administrative expenses increased by 15.6% from $2.6 million in Q3 2024 to $3.0 million in Q3 2025, and by 10.2% from $5.2 million in the first half of 2024 to $5.7 million in the first half of 2025[123][124]. - The net loss was $5.5 million in Q3 2024 compared to $3.2 million in Q3 2025, and $4.4 million in the first half of 2024 compared to $5.4 million in the first half of 2025[128]. - Cost of revenues increased by 4.2% from $2.8 million in Q3 2024 to $2.9 million in Q3 2025[120]. Cash Flow and Financing Activities - Net cash used in operating activities was $2.6 million for the six months ended September 30, 2025, a decrease from $7.7 million for the same period in 2024[130]. - The primary sources of cash in the six months ended September 30, 2025 included reductions in accounts receivable and prepaid expenses, while the primary uses were a net loss of $5.4 million and a decrease of $1.9 million in accrued expenses[130]. - Net cash provided by investing activities was $40,000 in the six months ended September 30, 2025, significantly lower than $11.3 million in the same period of 2024[132]. - Net cash provided by financing activities in the six months ended September 30, 2025 included proceeds of $14.3 million from an At-the-Market offering and $263,000 from employee stock plans[133]. - The company entered into a registered direct offering on October 21, 2025, issuing 1,508,462 shares at $10.00 per share, with gross proceeds of approximately $50 million[100][101]. Market and Economic Conditions - The company anticipates continued inflationary pressures and geopolitical tensions to negatively impact demand and financial performance through fiscal 2026[102]. - The company expects fluctuations in quarterly net revenues due to the cancelable nature of orders and the timing of product releases[105]. - The average selling price of the company's products has increased or remained unchanged in recent years, but historical trends show a decline over the product life cycle[104]. - The company has minimal exposure to foreign currency exchange risks as revenues and expenses are primarily denominated in U.S. dollars[143]. - 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[144]. Contracts and Milestones - The company received milestone payments totaling approximately $1.25 million for the development of the APU2, with $435,000, $318,000, and $316,000 received in fiscal 2024, 2025, and 2026, respectively[96]. - The company has been awarded a contract worth $1.1 million by AFWERX to demonstrate high-data computation use cases leveraging the APU2 architecture[97].