GSI Technology(US:GSIT)2022-07-31 10:48Financial Data and Key Metrics Changes - GSI Technology reported a net loss of $4 million or $0.16 per diluted share on net revenues of $8.9 million for Q1 fiscal 2023, compared to a net loss of $4.2 million or $0.17 per diluted share on net revenues of $8.8 million in Q1 fiscal 2022 [24] - Gross margin improved to 60.2% in Q1 fiscal 2023 from 54.4% in the prior year quarter and 58.6% in the preceding quarter [25] - Total operating expenses increased to $9.3 million in Q1 fiscal 2023 from $9.1 million in Q1 fiscal 2022 [26] Business Line Data and Key Metrics Changes - Sales to Nokia were $1.3 million or 14.7% of net revenues in Q1 fiscal 2023, down from $3.8 million or 42% in the same period a year ago [20] - Military defense sales accounted for 22.3% of first quarter shipments, compared to 20.0% in the comparable period a year ago [20] - SigmaQuad sales were 44.8% of first quarter shipments, down from 63.6% in Q1 fiscal 2022 [20] Market Data and Key Metrics Changes - The company has moved the majority of its chip substrate suppliers out of China to mitigate potential COVID-related delays [21] - GSI is facing supply chain variances that could impact order fulfillment but remains optimistic about meeting demand for SRAM customers [22] Company Strategy and Development Direction - The company is focusing on growth opportunities from its APU business and plans to launch Searchium.ai, a SaaS platform, to cater to cloud-only customers [6][8] - GSI aims to build a meaningful pipeline for the APU and close new business for its technology, with a roadmap for the next generation of Gemini products on track [14][15] - The company is leveraging its military and defense business context to engage with new companies and expand its market reach [12] Management's Comments on Operating Environment and Future Outlook - Management expressed a sense of urgency to deliver on goals and create a market for the APU, indicating that fiscal year 2023 is seen as a turning point for the company [16] - The management acknowledged the challenges posed by supply chain constraints but remains confident in fulfilling existing orders [22] Other Important Information - The company had cash, cash equivalents, and short-term investments of $41.5 million as of June 30, 2022, down from $44 million at the end of the previous quarter [28] - Current expectations for Q2 fiscal 2023 are net revenues in the range of $8.5 million to $9.5 million with a gross margin of approximately 61% to 63% [29] Q&A Session Summary Question: Transition of Gemini-1 to Gemini-2 - Management confirmed that software migration from Gemini-1 to Gemini-2 is necessary but anticipates a smoother process due to the learning curve [34] Question: Roadmap for the Gemini Project - Management indicated that a comprehensive roadmap for the Gemini project is not currently available but will consider the suggestion [37] Question: Scalability for Elasticsearch - Management stated that they have sufficient hardware for alpha and beta customers but acknowledged potential lead time issues for larger orders [39] Question: Revenue Model for Elasticsearch - Management is still working on the revenue model for Elasticsearch and has not released any forecasts yet [40] Question: Benefits from the CHIPS Act - Management believes there will be indirect benefits from the CHIPS Act through increased funding to the industry and government projects [41] Question: Collaboration with Merage Institute - Management confirmed that the Merage Institute is facilitating valuable connections and potential POCs following their win in the MoSAIC challenge [44]