Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GSI Technology Inc (NASDAQ:GSIT) reported a 14% year-over-year increase in revenue for the fourth quarter, reaching $5.9 million.
• The company significantly reduced its annual loss by 47%, from $20.4 million in 2024 to $10.6 million in 2025.
• Operating expenses were reduced by 35%, contributing to a more disciplined operating structure.
• The company secured an initial order for its radiation-hardened SRAM from a North American prime contractor, indicating strong product validation.
• GSI Technology Inc (NASDAQ:GSIT) made enhancements to its Plato chip, integrating a camera interface and enhancing connectivity, which increased strategic interest and broadened its market potential.

Negative Points

• Despite revenue growth, the annual revenue for fiscal 2025 decreased by 6% compared to the prior year.
• Gross margin for fiscal 2025 decreased to 49.4% from 54.3% in the prior year, primarily due to product mix and lower revenue effects.
• The company is still exploring strategic alternatives to secure new funding sources, indicating potential financial constraints.
• Interest and other income decreased from $414,000 in the prior year to $326,000 in fiscal 2025.
• Stockholders' equity decreased from $36 million as of March 31, 2024, to $28.2 million as of March 31, 2025.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with GSIT.

Q: Can you talk about the market for the Plato chip and the Gemini 2 chip? How large are these markets, and how do they scale over time? A: We haven't released the total addressable market (TAM) numbers yet, but for Gemini 2, it's an extension of Gemini 1 for edge applications. Gemini 1 was for high-performance computing, while Gemini 2 targets edge applications like SAR on drones or satellites. For Plato, it's aimed at large language models (LLM) and Gen AI at the edge, not in data centers.

Q: Is there interest in the Gemini 2 standalone chip from commercial companies, and is the company still working with hyperscales? A: Most early interest in Gemini 2 is from military defense applications, with some looking at it on a component level. We have delivered boards with algorithms, but some partners are interested in the chip alone for integration into drones or satellites. We are focusing on edge applications with hyperscales, which is a longer process compared to military applications.

Q: Can you share more details about what Needham is bringing to the table? A: Nothing specific is off the table; it could involve asset sales, funding, or R&D opportunities. However, there are no specific details to share at this time.

Q: What was the cash flow from operations and CapEx for the quarter? A: For the year, cash used in operating activities was about $12.9 million. CapEx was minimal, with fixed asset additions around $45,000.

Q: Is the company experiencing any interest in the Gemini 2 standalone chip from commercial companies, and is the company still working with the hyperscales? A: Yes, there is interest in the Gemini 2 chip from commercial companies, particularly in defense applications. We are also working with hyperscales, focusing on edge applications, although this is a longer process compared to military applications.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.