GSI Technology(GSIT) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss of $4.8 million or $0.20 per diluted share on net revenues of $6.4 million for the third quarter of fiscal 2023, compared to a net loss of $4.6 million or $0.19 per diluted share and net revenues of $8.1 million for the same period in the prior year [16][9] - Gross margin was 57.5%, an increase from 55.3% in the prior year period but a decrease from 62.6% in the preceding quarter, primarily due to changes in product mix sold [16][80] - Total operating expenses were $8.5 million, down from $9 million in the third quarter of fiscal 2022 and $8.8 million in the prior quarter [85] Business Line Data and Key Metrics Changes - Sales to Nokia were $1.3 million, representing 20.0% of net revenues, down from $1.9 million or 24.0% in the same period a year ago [14] - Military defense sales accounted for 26.2% of third quarter shipments, compared to 27.1% in the comparable period a year ago [84] Market Data and Key Metrics Changes - The company anticipates net revenues in the range of $5 million to $5.6 million for the upcoming fiscal fourth quarter, with gross margin expected to be approximately 49% to 51% [18] - The company noted that revenue growth was impacted by the uncertain outlook for the global economy, despite continued demand for SRAM products [9] Company Strategy and Development Direction - The company announced several cost-reduction initiatives aimed at achieving $7 million in annualized savings to align resources with the development of APU technology [10][81] - The Gemini-2 chip is expected to have 8x memory density over Gemini-1 and 30x cost performance improvements, enhancing the market push for APU technology [82] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a potential revenue bounce back by mid-year based on customer input, despite current lower revenues [52] - The company is focused on developing the Gemini-2 chip and expects to see the first win by late summer [72] Other Important Information - The company has completed a POC project with IAI/Elta and is evaluating a GPU solution for benchmarking against the APU [12] - The company shipped one LiDAboard to a potential SAR customer and one server to a research institute for encryption applications [76] Q&A Session Summary Question: What is the current employee count and how many have left? - The company currently has approximately 165 employees, down from over 180, with a minimal number of stock options canceled upon employee departures [43][28] Question: How does the stock-based compensation expense look? - The total pretax stock-based compensation expense was $654,000, which is consistent with previous quarters [86][30] Question: What is the outlook for cash burn and revenue? - The company is evaluating cash burn in light of lower revenues and is considering future adjustments [36][56] Question: What progress has been made on the Gemini-2 chip? - Management indicated that the Gemini-2 chip is expected to significantly outperform the Gemini-1 and is on track for market introduction [62][82]