GSI Technology Q3 2025 Earnings Report

GSI Technology EPS Results

• Actual EPS: -$0.16
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

GSI Technology Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

GSI Technology Announcement Details

• Quarter: Q3 2025
• Date: 1/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, January 30, 2025
• Conference Call Time: 4:30PM ET

GSI Technology (NASDAQ:GSIT) is a semiconductor company headquartered in Sunnyvale, California. Since its founding in 1995, GSI has focused on the design and development of high‐performance memory products. The company’s offerings are engineered to address the demanding bandwidth and latency requirements of modern data‐intensive applications.

The core product portfolio includes a range of ultra‐fast SRAM devices such as Quad Data Rate (QDR) and Reduced Latency DRAM (RLDRAM), along with specialized DDR and DDR2 memory solutions. GSI’s memory products are optimized for use in networking equipment, telecommunications infrastructure, data center accelerators, and other systems where high throughput and low access times are critical.

In addition to standard product lines, GSI provides custom memory designs, reference platforms, and intellectual property (IP) licensing for original equipment manufacturers (OEMs) and system integrators. The company supports a global customer base across North America, Europe and Asia, offering technical collaboration and worldwide sales and support channels.

GSI Technology is guided by an executive team with deep experience in semiconductor design, manufacturing and marketing. The leadership’s focus on innovation and customer responsiveness has driven the development of next‐generation memory solutions, positioning GSI as a trusted partner in the high‐speed memory market.

GSI Technology Q3 2025 Earnings Call Transcript

Key Takeaways

• Revenue Growth: Q3 fiscal 2025 revenue rose to $5.4 M, up 2% year-over-year and 19% sequentially, while cost reduction initiatives narrowed the operating loss compared to Q3 2024.
• Memory Segment Momentum: Core S&M sales climbed as existing customers resumed inventory buys and demand for the 144 Mb SMM product increased, with one customer poised to become the company’s largest in FY 2025.
• APU Progress – Gemini 2: The first Gemini 2 silicon has been debugged and is on track for a February tape-out, with neural network model delivery for the Air Force SBIR due in the March quarter and a second spin planned for mass production.
• New PLATO Chip Initiative: Development of the low-power PLATO AI chip, targeting large language models and edge applications, is underway with a $50 M funding plan and ongoing talks with strategic and financial partners.
• Government SBIR Wins: GSI secured a $250 K Phase 1 U.S. Army contract (with up to $2 M in Phase 2 potential) and is advancing Phase 2 work with the Air Force Research Labs and Space Development Agency, enhancing its defense market footprint.

Presentation

[Operator]

Welcome to GSI Technology's 3rd Quarter Fiscal 2025 Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. At that time, we will provide instructions for those interested in entering the queue for the Q and A. Before we begin today's call, the company has requested that I read the following Safe Harbor statement.

[Operator]

The matters discussed in this conference call may include forward looking statements regarding future events and the future performance of GSI Technology that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's Form 10 ks filed with the Securities and Exchange Commission. Additionally, I have also been asked to advise you that this conference call is being recorded today, January 30, 2025, at the request of GSI Technology. Liliin Xu, the company's Chairman, President and Chief Executive Officer, will be hosting the call today. With him are Douglas Shirley, Chief Financial Officer and Didier Lasserre, Vice President of Sales.

[Operator]

I would now like to turn the conference over to Mr. Xu. Please go ahead, sir.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

Good afternoon and thank you for joining us to review our Q3 fiscal 2025 financial results. I am pleased to report that our Q3 demonstrates meaningful progress in our financial performance and the ongoing initiative with the APU. Let me start with our financial highlights before diving into our product development. In the Q3, we generated revenue of $5,400,000 representing a 2% increase year over year and a 19% sequential growth from the previous quarter. More importantly, our cost reduction initiatives have begun to bear fruit, resulting in a reduction in operating and net net losses compared to the Q3 of fiscal 2024.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

Looking at our S and M business, I am encouraged by the continued momentum in our core S and M segment. Revenue growth this quarter in S and M came from existing customers resuming over at their inventory level Romonnet and growing SMM demand from the customer for our 144 meg SMM, both system integrals to manufacturing leading AI chip. We anticipate this customer becoming our largest excellent customer in fiscal year 2025. Let me share a few key developments on the APU front. So far, our APU technology is progressing steadily.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

We made good progress using the GMSI 2 super silicon, which has a manual bug. Fortunately, software work along made the chips sufficiently functional to put on a board for testing and the software and the library development. We will be able to deliver new neural network models for our Gemini 2 SBIR program with the Air Force in the March quarter based on this first silicon. We are now preparing for a second spin of Gemini 2 for mass production. Didier will provide additional details on Gemini 2 in his prepared comments.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

In parallel, we have begun work on a new chip, PLATO will be designed to address the growing market for large language models in AI application, edge solution with its low power features. The chip architecture will be built on Gemini 2's architecture. We are pursuing multiple funding pathways to support this $50,000,000 development program, including discussions with strategic and financial partners. Our government business continues to expand to multiple SBIR program. We recently announced a Phase 1 contract with the U.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

S. Army, securing 250,000. In this phase, we will explore and identify best fit applications to develop specialized edge computing AI solutions with Gemini 2. This will strengthen our relationship with agencies within the Department of Defense. Didier will share more details on this new win and the status of our SaaS projects.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

In summary, while we are encouraged by our progress, we remain dedicated to disciplined execution across all areas. Our improved operating efficiency, growing SNS sales and strategic initiatives in commercial and government markets position us well for sustainable growth, as we continue to invest strategic alternatives. With that, I'll hand it over to Didier to provide more details on our APU business opportunities, then cover the Q3 sales breakdown.

[Didier Lasserre, Vice President of Sales at GSI]

Thank you, Lyleen. As Lyleen mentioned, Gemini 2 is on track for a February tape out and availability in May and will have a new leaderboard in June. This aligns with the milestone for the Air Force's SBIR. Gemini 2 enhances AI capabilities with neural network models together with SAR imaging capability to target high value applications in the defense and aerospace markets. Meeting these milestones should put us in a good shape complete algorithm development and library building for delivery by Q3 of calendar 2025.

[Didier Lasserre, Vice President of Sales at GSI]

Leveraging Gemini 2's architecture, we can accelerate the development of our next generation chip, PLAY DOH with a cost effective faceted market strategy. PLATO's ultra low power design will target rapidly growing markets for the edge and large language model solutions. PLATO is a strategic pivot from our previous plan for development excuse me, for developing a new next generation version of Gemini with a more economical and faster development path than the previously proposed 3 d Gemini 3. The distinguishing feature of PLAYDO targeted for LLM market is that it can deliver data center performance levels using very low power making it suitable for use at the edge. As Eileen mentioned, we are in discussions with potential customers who could be initial users and may also be funding sources with an expected development timeline of 12 to 18 months.

[Didier Lasserre, Vice President of Sales at GSI]

I am pleased to say that our ongoing SBIR projects are on track and meeting our milestones. As a reminder, we are currently working on Phase 2 contracts with Space Development Agency and Air Force Research Labs and most recently announced a Phase 1 contract with the U. S. Army. We are preparing to deliver a YOLO algorithm for the Air Force Research Labs in the current quarter, including the benchmarks for a real time object detection application.

[Didier Lasserre, Vice President of Sales at GSI]

As a reminder, YOLO, which stands for you only look once, are algorithms that immediately determine the exact placement of objects in an image by drawing boxes around them and identifying the types of object. Our second SBIR with the Space Development Agency is waiting for the delivery of a Gemini 2 board. As I mentioned earlier, we are on track to deliver this within the required timeframe. Today, we have received 45% of the $1,250,000 contract and will receive the balance upon the Board's delivery. We are now executing the Phase 1 for our latest win, the U.

[Didier Lasserre, Vice President of Sales at GSI]

S. Army contract to determine which of their ongoing projects would benefit from Gemini 2's capabilities. After Phase 1, we will have the opportunity to compete for Phase 2, which could be worth up to $2,000,000 The focus will be on edge computing AI solutions using Gemini 2. Our key objectives are integration, feasibility assessment and AI algorithm validation for military applications. The Army is the largest of the 5 branches of the Department of Defense and with this SBIR, we are gaining exposure to this branch.

[Didier Lasserre, Vice President of Sales at GSI]

Lastly, regarding our SAR projects, there has been ongoing progress in fiscal Q3. The Asian Defense and R and D organization that we have mentioned in the past is evaluating Gemini 2 for low in flight I'm sorry, low power in flight applications. We are advancing with a few more deliverables to prepare them to purchase a Gemini 2 board. This organization is also a potential funding partner for PLATO. Also, 2 other aerospace companies are evaluating our technology for image creation and onboard satellite applications for SAAR.

[Didier Lasserre, Vice President of Sales at GSI]

Now I'll move to the customer and product breakdowns for the Q3. In the Q3 of fiscal 2025, sales to Nokia were $239,000 or 4.4 percent of net revenues compared to $807,000 or 15.2 percent of net revenues in the same period a year ago and $812,000 or 17.8 percent of net revenues in the prior quarter. Military defense sales were 25% of our 3rd quarter shipments compared to 28.2% of shipments in the comparable period a year ago and 40.2% of shipments in the prior quarter. SigmaQuad sales were 39.1 percent of 3rd quarter shipments compared to 46.9 percent in the Q3 of fiscal 202438.6 percent in the prior quarter. Now I'd like to hand the call over to Doug. Go ahead, Doug.

[Douglas Schirle, CFO at GSI]

We reported net revenues of $5,400,000 for the Q3 of fiscal 2025 compared to $5,300,000 for the Q3 of fiscal 2024 and $4,600,000 for the Q2 of fiscal 2025. Gross margin was 54% in the Q3 of fiscal 2025 compared to 55.9% in the Q3 of fiscal 2024 and 38.6% in the preceding Q2 of fiscal 2025. The sequential increase in gross margin in Q3 of fiscal 2025 was primarily due to higher revenue, products mix and severance costs associated with manufacturing workforce reductions in the prior quarter. Total operating expenses in the Q3 of fiscal 2025 were $7,000,000 compared to $9,700,000 in the Q3 of fiscal 2024 $7,300,000 in the prior quarter. Research and development expenses were $4,000,000 compared to $7,000,000 in the prior year period and $4,800,000 in the prior quarter. Selling, general and administrative expenses were $3,000,000 in the quarter ended December 31, 2024 compared to $2,700,000 in the prior year quarter and $2,600,000 in the previous quarter. 3rd quarter fiscal 2025 operating loss was $4,100,000 compared to an operating loss of $6,700,000 in the prior year period and $5,600,000 in the prior quarter. 3rd quarter fiscal 2025 net loss included interest and other income of $70,000 and attached provision of $44,000 compared to $155,000 in interest and other income and a tax provision of $71,000 for the same period a year ago.

[Douglas Schirle, CFO at GSI]

In the preceding second quarter, net loss included interest and other income of $149,000 and a tax provision of $23,000 Net loss in the Q3 of fiscal 2025 was $4,000,000 or $0.16 per diluted share compared to net loss of $6,600,000 or $0.26 per diluted share for the Q3 of fiscal 2024 and a net loss of $5,500,000 or $0.21 per diluted share for the Q2 of fiscal 2025. Total third quarter pre tax stock based compensation expense was $429,000 compared to $649,000 in the comparable quarter a year ago and $663,000 in the prior quarter. At December 31, 2024, the company had $15,100,000 in cash and cash equivalents compared to $14,400,000 at March 31, 2024. Working capital was $17,900,000 as of December 31, 2024 versus $19,100,000 at March 31, 2024. Stockholders' equity as of December 31, 2024 was 2024 was $29,900,000 compared to $36,000,000 as of the fiscal year ended March 31, 2024.

[Douglas Schirle, CFO at GSI]

Previously, we announced that the company had initiated a comprehensive strategic review and established a special committee of the Board to evaluate various strategic alternatives. We continue to work with Needham and Company as our strategic and financial advisor to assist in this process. Operator, at this point, we will open the call to Q and A.

[Operator]

Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Robert Christian, a Private Investor. Please proceed with your question.

[Robert Christian, SPEAKER at Individual Investor]

Yes. I'd like to know, is the company utilizing AI to do its algorithms and software? And are we going to get a white paper on the benchmarks for the Gemini 2?

[Didier Lasserre, Vice President of Sales at GSI]

Yes. So the algorithms we're actually writing ourselves with the folks that we have in our Israeli division. As far as a white paper that yes. So as we mentioned the first algorithm on Gemini 2 will be the YOLO model specifically YOLO 3. We will also be following that up with the YOLO 5, but we will be publishing benchmarks when that's done, correct.

[Robert Christian, SPEAKER at Individual Investor]

Okay. And the second question I have was, when Needham was brought on or it was announced back last year in May, it was to enhance the company valuation. We're actually lower now than we were. Are they the right partner?

[Douglas Schirle, CFO at GSI]

Well, we've been working with them and they have brought us opportunities that we've been looking at and we continue to look at opportunities. I don't know that it's fair to say that they're brought in to increase the company's valuation. The intent was to find strategic alternatives to further grow the company and provide investment into the company.

[Robert Christian, SPEAKER at Individual Investor]

Well, I was almost positive that's what was stated in May. I could be wrong, but anyway, thank you very much.

[Didier Lasserre, Vice President of Sales at GSI]

Thanks, Christian.

[Operator]

Thank you. And it looks like there are no further questions. Therefore, I will turn the call back over to Lillian Xu for closing remarks.

[Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI]

Thank you all for joining us. We look forward to speaking with you again when we report our Q4 and the full year fiscal 2025 results. Thank you.

[Operator]

Thank you. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Participants

Analysts

• Lee-Lean Shu, Co-Founder, President, CEO & Chairman at GSI
• Didier Lasserre, Vice President of Sales at GSI
• Douglas Schirle, CFO at GSI
• Robert Christian, SPEAKER at Individual Investor