GSI TECHNOLOGY INC Q4 FY2026 earnings call

• Physical 2026 was a year of meaningful progress for GSI, with strong performance in SM business, Gemini tool advancement, tool commercialization, and initiation of Pareto design.
• SRAM business is the revenue foundation, grew 22% in fiscal 2026 with 55% gross margin, benefited from increased demand for high-performance AI chip development.
• Progress with Gemini 2 and Plato: Technical validation and early program-level engagement of Gemini 2, including Sentinel Drone Surveillance POC, U.S. Army SBIR Award, and Smart City Project.
• Gemini 2's performance contributed to winning the Sentinel POC contract, working on software deliverables for June demonstration.
• Smart City Project leverages drone-based surveillance POC work, expects to share more details in late May.
• Priorities are to advance current POCs and awarded programs and leverage learnings for design opportunities.

SRAM business: In fiscal 2026, it grew 22% year-over-year, with gross margins rising to 55% from 49%. Fourth quarter revenue was $6.3 million with a gross margin of 52.4%. Defense-related sales increased to approximately 46% of total shipments in the fourth quarter.

• Fiscal 2027 SRAM business expected to remain relatively stable.
• Upcoming quarter (first quarter fiscal 2027) net revenues expected in the range of $5.9 million to $6.7 million, with gross margin approximately 54% to 56%.
• Cash usage expected to remain elevated at approximately $4 million per quarter or about $16 million annually during development phase.
• Plato tapeout still on schedule for first quarter fiscal 2027, with first wafers in hand in summertime of calendar 2027, Gemini 2 and Plato initial commercialization expected in late fiscal 2027.

Q: Share some color on the size of the market for Gemini 2.

A: Markets initially pursued are government, military-based like drone programs, and smart city, both multi-billion dollar markets.

Q: Why the PLATO project has moved up from the first half of 2027 to late fiscal 2027.

A: It's a mixture of calendars and fiscal quarters, still on schedule for PAR taped out in first quarter fiscal 2027 with first wafers in hand in summertime of calendar 2027.

Q: Gemini 2 taped out over two and a half years ago. Is it going to take that long to see expected sales of Plato?

A: Software side of Gemini 2 lagged hardware, with Plato trying to align hardware and software, can leverage some Gemini 2 work for Plato, and lining up resources for Plato software