GSI TECHNOLOGY INC Q4 FY2025 earnings call

• Fiscal 2025 highlights: 4th quarter revenue grew 14% Y/Y and 9% Q/Q to $5.9M, net loss reduced, cash burn improved. Annual revenue down 6% but net loss down 47% to $10.6M due to 35% operating expense reduction.
• Fourth quarter progress: Secured initial order for radiation-hardened SRAM from North American prime contractor, SBIR program with $1.6M in total payments and $1M more to come, Plato chip enhanced with camera interface for AI agents, progress on APU development, SBIR milestones met with $870,000 booked as R&D expense reduction.

For the fourth quarter of fiscal 2025, revenue was $5.9 million, with sales to KYEC at $1.7 million (29.5% of net revenues) compared to $544,000 (10.6%) in the prior year. Sales to Nokia were $444,000 (7.5% of revenues) vs $694,000 (13.5%) in the prior year. Military defense sales were 30.7% of fourth quarter shipments, and SigmaQuad sales were 39.3% of fourth quarter shipments. For fiscal year 2025, net revenues were $20.5 million vs $21.8 million in the prior year, with gross margin at 49.4% compared to 54.3% in 2024, driven by product mix and revenue impact on fixed costs.

• Fiscal 2026 plan: Build on APU development, grow SRAM sales, advance strategic initiatives, maintain current operating expenses to minimize cash burn, explore strategic alternatives for funding to support next phase of operations.

Q: Can you talk a little bit about the market for the Plato chip and the Gemini-II chip how large are these markets? How do they scale over what time period?

A: Sure. So we haven't actually put out the TAM numbers yet but just to talk about the markets. For the Gemini-II, think of it as an extension of Gemini-I, but for the edge. And so Gemini-I was really to illustrate our capabilities in search and also some high-performance computing applications like SAR. And so what Gemini-II will do will take that, but take it to the edge. Gemini-I was not built to be a low-power solution, with the accompanying FPGA that we've talked about in the past. With the Gemini-II, we can get closer to the edge. So we're looking for -- while Gemini-I would do SAR applications on ground level in a building we are now looking at Gemini-II to do a SAR application actually on a drone or on a satellite at the edge. And so we're looking at search and high-performance computing at the edge for Gemini-II. For Plato, this is going to be it's not going to be for the search market. It's going to be for the LLM market. And so when most folks think about large language models and Gen AI they think of it in the data center. We're taking that capability to the edge. And so this -- think of Gen AI and LLM models more at the edge.

Q: Is the company experiencing any interest in the Gemini-II stand-alone chip from commercial companies other say the military? And is the company still working with the hyperscalers?

A: So good question. Honestly, the majority of the early interest have come from more of the mill defense type of applications and they are looking at it on a component level as well. So we do have what we call the Leda-2 board, which I discussed a little earlier that we have delivered and will be delivering to some of our partners. And so with the board we're delivering it with a SAR algorithm or some kind of a YOLO algorithm that's been developed, which is why they're getting a card. But some of the folks that we have been having discussions with they are looking for a chip only, because they will be mounting it on a drone or in a satellite. One of our other integrating partners that we've discussed in the past they're actually going to be developing their own miniaturized board. And so they will be procuring just the Gemini-II chips from us to put on their proprietary board. So the answer is yes, we are seeing interest on the chip level, but there's also some board level interest as well. The hyperscalers, we're really focusing more on the edge right now. And so we have had discussions with them. It's just -- that's a longer process with those folks. We find that with the military folks it's just a much quicker path to revenue.

Q: Could you give us what cash flow from operations was in the quarter and what your CapEx was?

A: I don't have it for the quarter, but I have cash flow for the year. For the year, cash used in operating activities will be about $12.9 million. Very little. Fixed asset additions during the year were like $45,000 very little very minor.