GSI Technology NASDAQ: GSIT reported fourth-quarter and full fiscal year 2026 results on a May 7 conference call, highlighting year-over-year growth in its core SRAM business and continued investment in its AI-focused APU initiatives, including Gemini-II and the newer Plato chip design effort.
Management frames fiscal 2026 as progress year for SRAM and APU roadmap
Chairman, President, and CEO Lee-Lean Shu said fiscal 2026 marked “meaningful progress” driven by “strong performance in our SRAM business, continued advancement of Gemini-II toward commercialization, and the initiation of the Plato design.” Shu added that the company is “executing our key milestones and advancing business development for the APU,” citing “encouraging conversations” in recent months and what he described as “continuous momentum” in promoting the APU and building customer traction.
Vice President of Sales Didier Lasserre emphasized that SRAM remains the company’s revenue foundation and a source of cash to support APU development. Lasserre said the SRAM business grew 22% year-over-year in fiscal 2026 and that gross margins improved to 55% from 49%, benefiting from demand tied to high-performance AI chip development and manufacturing.
Lasserre also noted the company recently concluded a strategic review and determined that continuing with a standalone strategy was “the best path forward for delivering long-term shareholder value.” He said the combination of a stronger SRAM business, a strengthened balance sheet, and non-dilutive R&D funding is supporting the company’s plan.
Gemini-II programs: Sentinel drone POC, smart city Phase 1, and Army SBIR progress
Lasserre outlined several early Gemini-II engagements and said the company is seeing “both technical validation and early program-level engagement,” referencing the Sentinel Drone Surveillance proof of concept, a U.S. Army SBIR award, and a newly awarded Phase 1 smart city project.
Discussing the Sentinel effort, Lasserre said that in a “bake-off” for the POC, Gemini-II helped the team win a contract award by achieving a “time to first token of roughly 3 seconds at 30 watts of system power” on “Gemma 3.12B multimodal workloads at the edge.” He called time to first token a critical metric for drone surveillance because it reflects how quickly a system can respond in real-world scenarios.
Lasserre said GSI has completed software deliverables for the Sentinel program and is targeting a June demonstration of a “Gemini-II-powered drone,” planned for the Department of Defense and an international defense agency.
On the smart city initiative, Lasserre said the company was notified in mid-April that it had been awarded Phase 1 of a project leveraging work completed for the drone surveillance POC. He said the application involves processing inputs from distributed camera systems for near real-time detection of events such as fires and other public safety risks. GSI expects to share additional details “around the time of a planned media event in late May hosted by the municipality,” according to Lasserre.
He characterized the company’s approach as a “repeatable model” where each engagement accelerates the next, and said GSI is focusing less on the number of trials and more on identifying where its architecture provides clear advantages in low-latency performance under constrained power envelopes.
Lasserre also discussed progress in defense programs, saying the company’s U.S. Army SBIR moved from Phase I into Phase II and will involve building and testing a “ruggedized node containing the Gemini-II” for mission-critical environments. He added that the SBIR program could offer a pathway to follow-on programs and future opportunities for Gemini-II-based systems.
Fiscal 2026 financial results: revenue up, margins higher, expenses driven by Plato R&D
CFO Douglas Schirle said fiscal 2026 revenue increased 22.4% to $25.1 million, reflecting strength in SRAM products used in AI-related chip design and simulation. Schirle said the company sees variability in customer orders quarter to quarter, but “barring any significant change in underlying AI chip demand,” expects the SRAM business to remain “relatively stable” in fiscal 2027.
Schirle said fiscal 2026 gross margin rose to 54.5% from 49.4% in the prior year, driven by higher revenue and product mix. Operating expenses increased to $31.2 million from $21.0 million in fiscal 2025, primarily due to higher R&D spending on Plato. He also noted that the prior year included a $5.8 million gain from the sale of assets, affecting year-over-year comparisons.
The company continued to offset some R&D costs with non-dilutive funding, including SBIR and POC-related funding. Schirle said the R&D offset was $1.0 million in fiscal 2026 and $1.2 million in fiscal 2025, and that the majority of R&D is dedicated to the APU.
Higher operating expenses contributed to an operating loss of $17.5 million in fiscal 2026, compared with an operating loss of $10.8 million in fiscal 2025. Schirle added that fiscal 2026 net loss included interest and other income of $4.1 million, which he attributed primarily to interest on an increased cash balance following a capital raise completed in October 2025. He also cited $3.4 million of other income, including a $6.2 million non-cash gain from changes in the fair value of pre-funded warrants, partially offset by $2.8 million in issuance costs tied to the October 2025 registered direct offering.
Quarterly results, defense mix, and cash position
For the fourth quarter, Schirle reported revenue of $6.3 million and gross margin of 52.4%, noting that quarterly gross margin can fluctuate with product mix and revenue levels. He said the quarter’s gross margin reflected slightly lower SigmaQuad sales sequentially compared with the prior-year quarter.
Schirle said customer shipments varied across accounts during the quarter, including lower shipments to certain customers and no shipments to others, while defense-related sales rose to approximately 46% of total shipments.
On liquidity, Schirle said cash and cash equivalents were $67.2 million at March 31, 2026, down from $70.7 million at December 31, 2025. He reported net cash used in operating activities of $5.5 million during the quarter, net cash used in investing activities of about $100,000, and net cash provided by financing activities of $2.1 million.
Schirle said GSI ended the quarter with no debt and a significantly improved cash balance compared with the prior year-end cash balance of $13.4 million, which he associated with $46.9 million of net proceeds from the registered direct offering that closed in October 2025. He said the company expects cash usage to remain elevated during development, estimating approximately $4 million per quarter (about $16 million annually), though it may vary with development timing and program activity.
Schirle said the company believes its current cash position provides sufficient runway to support the initial commercialization of Gemini-II and completion of the Plato tape-out, both expected in late fiscal 2027.
Outlook and Q&A: Plato timing and commercialization path
For the first quarter of fiscal 2027, Schirle provided guidance for net revenue of $5.9 million to $6.7 million and gross margin of approximately 54% to 56%.
During Q&A, a shareholder asked about market size for Gemini-II design wins. Management responded that initial markets include government and military-based programs such as drone efforts, as well as the smart city project, and said “both of those markets are multi-billion-dollar markets,” while noting limited detail at present and indicating more information on the smart city program would be provided in late May.
Another shareholder asked whether Plato had been pushed out. Management responded that it had not, explaining that earlier comments may have reflected differences between calendar and fiscal-year references. Management said it was still targeting a tape-out at the beginning of calendar 2027, with first wafers expected in hand in the summer of calendar 2027, after mask sets are produced.
Asked whether Plato sales could take as long as Gemini-II has, management pointed to the importance of aligning hardware and software readiness, noting that software development lagged hardware for Gemini-II. Management said some software work done for Gemini-II can be leveraged for Plato, and that the company is working to align resources so software comes in more closely with Plato’s timeline.
In closing remarks, Shu said the company would present at the LD Micro conference on May 19 and reiterated that management is encouraged by progress on Gemini-II and remains focused on executing opportunities ahead.
About GSI Technology NASDAQ: GSIT
GSI Technology, Inc is a fabless semiconductor company specializing in the design and development of high-performance memory products. Headquartered in Sunnyvale, California, the company was founded in 1995 and has focused its efforts on content addressable memory (CAM) and high-speed SRAM (static random-access memory) solutions. As a publicly traded company listed on NASDAQ under the ticker GSIT, GSI Technology leverages advanced architectures to meet demanding data-processing requirements.
The company's core product portfolio includes ternary CAM (TCAM) devices, binary CAM (BCAM) devices and high-speed synchronous SRAM.
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