GSI Technology(US:GSIT)2026-01-29 22:30Financial Data and Key Metrics Changes - Revenue in Q3 fiscal 2026 increased by 12% year-over-year and 28.5% on a fiscal year-to-date basis, reaching $6.1 million compared to $5.4 million in Q3 fiscal 2025 [3][12] - Gross margin decreased to 52.7% in Q3 fiscal 2026 from 54% in Q3 fiscal 2025, primarily due to product mix [12] - Operating loss for Q3 fiscal 2026 was $6.9 million, compared to an operating loss of $4.1 million in the prior year [13] - Net loss in Q3 fiscal 2026 was $3 million, or $0.09 per diluted share, compared to a net loss of $3.2 million, or $0.11 per diluted share in the previous quarter [14][15] - Cash and cash equivalents increased to $70.7 million as of December 31, 2025, primarily due to $46.9 million in net proceeds from a registered direct offering [17] Business Line Data and Key Metrics Changes - Sales to KYEC were $1.1 million, or 17.9% of net revenues, down from $1.2 million, or 22.7% in the same period a year ago [10] - Sales to Nokia increased to $675,000, or 11.1% of net revenues, compared to $239,000, or 4.4% in the same period a year ago [11] - Military defense sales accounted for 28.5% of third-quarter shipments, slightly down from 30% in the comparable quarter a year ago [11] Market Data and Key Metrics Changes - The company is focusing on defense applications, which have shown early success, particularly with the U.S. Department of Defense [21] - The partnership with G2 Tech aims to leverage the company's technology for real-world applications, including drones and smart cities [24] Company Strategy and Development Direction - The company is advancing its APU roadmap and hardware development, with plans to tape out Plato in early 2027 [3] - The partnership with G2 Tech for the Sentinel program is expected to enhance the company's capabilities in autonomous perimeter security [4] - The focus is on non-dilutive R&D funding through government defense programs and strategic partnerships to support development [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong demand from major customers in the first half of calendar 2026 [3] - The company anticipates receiving over $1 million in government funding for the Sentinel project, which will offset R&D expenses [6] - The outlook for Q4 fiscal 2026 is net revenues in the range of $5.7 million to $6.5 million, with a gross margin of approximately 54% to 56% [18] Other Important Information - The company is expanding cash disclosures in its quarterly earnings to provide better insights into cash consumption and generation [16] - Total operating expenses in Q3 fiscal 2026 were $10.1 million, up from $7 million in the prior year [12] Q&A Session Summary Question: Importance of defense applications for Gemini 2 - Management highlighted that military and defense sectors have been the quickest to adopt their technology, with successful partnerships and applications already established [21][24] Question: Timelines for government funding - Management indicated a continuous pipeline of submissions for SBIRs and other funding opportunities, emphasizing the non-dilutive nature of this funding [26]