Financial Data and Key Metrics Changes - The company reported a net loss of $6.6 million, or $0.26 per diluted share, on net revenues of $5.3 million for Q3 fiscal 2024, compared to a net loss of $4.8 million, or $0.20 per diluted share, on net revenues of $6.4 million for the same period last year [41] - Gross margin was 55.9%, down from 57.5% in the prior-year period, primarily due to changes in product mix and volume sold [42] - Total operating expenses increased to $9.7 million from $8.5 million in Q3 fiscal 2023 [43] Business Line Data and Key Metrics Changes - Sales to Nokia were $807,000, representing 15.2% of net revenues, down from $1.3 million or 20% in the same period a year ago [24] - Military/defense sales accounted for 28.2% of third-quarter shipments, up from 26.2% year-over-year [24] - SigmaQuad sales were 46.9% of third-quarter shipments, compared to 45.2% in the same quarter of fiscal 2023 [24] Market Data and Key Metrics Changes - The company shipped over $600,000 of prototype radiation-hardened SRAM to two different customers for satellite programs [49] - The company is engaged with several satellite companies for radiation-tolerant APUs, indicating strong market interest [28] Company Strategy and Development Direction - The company is focusing on strategic partnerships to support the launch of Gemini-II and development of Gemini-III, which is expected to require significant capital investment [18] - The architecture of the APU is designed to address critical needs in data centers and emerging applications, aiming to lower power consumption and reduce inference costs for GenAI end users [21][30] - The company is exploring opportunities for joint ventures and potential equity investments to fund future growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market potential for their APU architecture, particularly for inference workloads [20] - The company anticipates starting initial alpha deployment of Gemini-II with select customers in the second half of calendar 2024 [29] - Management highlighted the importance of prudent expense management and actions to increase financial flexibility to support growth [19] Other Important Information - The company completed radiation-hardened testing on the Gemini-I APU, confirming its suitability for compute-in-space applications [28] - A recent research paper from Cornell University demonstrated the Gemini-I APU's performance benefits for genomic applications, showcasing its market opportunities [36] Q&A Session Summary Question: What is the structure of a joint venture partner's capital investment in GSIT? - The investment could be either an upfront milestone payment or an equity investment, with a focus on customer funding for Gemini-III [10] Question: Can you explain the $2.4 million charge for a pre-production mask? - This charge is a one-time expense related to a new process technology and will not recur frequently [57][58] Question: What is the outlook for Nokia and the router sold into? - Nokia's revenue is expected to stabilize around $1 million to $1.1 million per quarter, as they are currently burning through inventory [66] Question: What is the appraisal value of the building owned by the company? - The building is estimated to be worth between $10 million to $13 million [61] Question: Will the company receive provenance from the evaluation parts shipped? - There is a chance that one of the recently shipped prototypes could be deployed quickly, but specifics are still being determined [65]
GSI Technology(GSIT) - 2024 Q3 - Earnings Call Transcript