Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GSI Technology Inc (GSIT, Financial) reported a 2% year-over-year increase in revenue, reaching $5.4 million for the third quarter of fiscal 2025.
- The company successfully reduced operating expenses from $9.7 million in the third quarter of fiscal 2024 to $7 million in the third quarter of fiscal 2025.
- GSI Technology Inc (GSIT) is making progress with its Gemini two chip, which is on track for a February tapeout and availability in May, targeting high-value applications in defense and aerospace markets.
- The company secured a phase one contract with the US Army, valued at $250,000, to explore edge computing AI solutions, strengthening its relationship with the Department of Defense.
- GSI Technology Inc (GSIT) is actively pursuing strategic funding pathways for its $50 million development program, including discussions with potential strategic and financial partners.
Negative Points
- Despite revenue growth, GSI Technology Inc (GSIT) reported a net loss of $4 million for the third quarter of fiscal 2025, though this was an improvement from the $6.6 million loss in the same period the previous year.
- Gross margin decreased to 54% in the third quarter of fiscal 2025 from 55.9% in the third quarter of fiscal 2024.
- Sales to Nokia significantly declined, representing only 4.4% of net revenues in the third quarter of fiscal 2025 compared to 15.2% in the same period a year ago.
- The company's stockholders' equity decreased from $36 million as of March 31, 2024, to $29.9 million as of December 31, 2024.
- GSI Technology Inc (GSIT) is still in the process of evaluating strategic alternatives with Needham and Company, with no definitive outcomes reported yet.
Q & A Highlights
Q: Is the company utilizing AI for its algorithms and software, and will there be a white paper on the benchmarks for the Gemini 2?
A: The algorithms are being developed internally by the team in the Israeli division. A white paper will be published with benchmarks for the Gemini 2, starting with the YOLO model, specifically YOLO 3, followed by YOLO 5. - Didier Lasserre, Vice President - Sales
Q: When Needham was brought on, it was to enhance the company's valuation. The valuation is now lower; are they the right partner?
A: Needham has been providing opportunities for strategic alternatives to grow the company and attract investment. The primary goal was not solely to increase valuation but to explore strategic growth options. - Douglas Schirle, Chief Financial Officer
Q: Can you provide more details on the progress and future plans for the Gemini 2 and Plato chips?
A: Gemini 2 is on track for a February tapeout and availability in May, with a new leaderboard in June. It enhances AI capabilities for defense and aerospace markets. Plato, designed for large language models, will leverage Gemini 2's architecture with a low-power design, targeting edge applications. - Didier Lasserre, Vice President - Sales
Q: What are the financial highlights for the third quarter of fiscal 2025?
A: Revenue was $5.4 million, a 2% increase year-over-year. Gross margin was 54%, and operating expenses were reduced to $7 million. The net loss was $4 million, or $0.16 per diluted share. - Douglas Schirle, Chief Financial Officer
Q: What is the status of the company's government contracts and SBIR projects?
A: The company is on track with phase two contracts with the Space Development Agency and Air Force Research Labs. A phase one contract with the US Army is underway, focusing on edge computing AI solutions using Gemini 2. - Didier Lasserre, Vice President - Sales
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
