GSI Technology Q3 Earnings Call Highlights

Core Insights - GSI Technology reported a net revenue of $6.1 million for Q3 fiscal 2026, reflecting a 12% year-over-year increase, but faced an operating loss of $6.9 million due to rising R&D expenses related to IP purchases [3][6][7] Financial Performance - Operating expenses increased to $10.1 million from $7.0 million year-over-year and $6.7 million in the previous quarter, with R&D expenses rising to $7.5 million from $4.0 million a year earlier [1] - Gross margin decreased to 52.7%, down from 54.0% a year earlier and 54.8% in the prior quarter, attributed to product mix [2] - The company recorded a net loss of $3.0 million, or $0.09 per diluted share, compared to a net loss of $3.2 million in the previous quarter [7][8] Cash Position - Cash and cash equivalents improved to $70.7 million from $25.3 million at the end of September 2025, bolstered by approximately $46.9 million in net proceeds from a registered direct offering [5][9] - Working capital reached $71.7 million, significantly up from $16.4 million at the end of March 2025 [11] Product Development and Initiatives - GSI made significant progress on its Gemini-II program, achieving a 3-second time-to-first-token for a multimodal large language model, which is up to three times faster at lower power compared to competitors [4][12] - The company is collaborating with G2 Tech on a proof-of-concept for the Sentinel program, which focuses on autonomous perimeter security, and expects over $1 million in government funding to support R&D expenses [15][16] Customer and Market Insights - Sales to KYEC accounted for 17.9% of net revenues, while sales to Nokia represented 11.1%, indicating a diverse customer base [18] - Military defense sales constituted 28.5% of third-quarter shipments, showing the company's strong presence in defense markets [19] Future Outlook - The company anticipates strong sales from its largest customers in the first half of calendar 2026 and is advancing its APU roadmap with plans for hardware development and a targeted Plato tape-out in early 2027 [20]