Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GSI Technology Inc (GSIT, Financial) is experiencing a significant turnaround in its SRAM business, driven by existing customers depleting their inventories and a new SRAM design with growth potential.
- The company has secured a new SRAM design related to a new AI chip, indicating potential for increased demand and growth.
- GSI Technology Inc (GSIT) is on track to meet deadlines for its SBIR contracts with the U.S. Air Force Research Labs, which could enhance its reputation and future opportunities.
- The company has introduced strategic cost-cutting measures projected to generate annualized savings of about $3.5 million, improving financial efficiency.
- GSI Technology Inc (GSIT) has a roadmap for APU development beyond Gemini-I and II, indicating a clear strategy for future product development.
Negative Points
- GSI Technology Inc (GSIT) reported a decrease in net revenues to $4.6 million for the second quarter of fiscal 2025, down from $5.7 million in the same period of fiscal 2024.
- The company's gross margin decreased significantly to 38.6% in the second quarter of fiscal 2025, compared to 54.7% in the same period of fiscal 2024.
- GSI Technology Inc (GSIT) faced an operating loss of $5.6 million in the second quarter of fiscal 2025, compared to an operating loss of $4.1 million in the prior year period.
- The company experienced a net loss of $5.4 million or $0.21 per diluted share in the second quarter of fiscal 2025, compared to a net loss of $4.1 million or $0.60 per diluted share in the same period of fiscal 2024.
- GSI Technology Inc (GSIT) is undergoing workforce reductions and restructuring, which may impact employee morale and operational stability.
Q & A Highlights
Q: Can you provide more details on the SRAM opportunity? Is it related to semiconductor equipment or test equipment?
A: Didier Lasserre, Vice President of Sales: We can't disclose too much detail at this time, but it is associated with manufacturing. The customer has been with us for many years but has not been a 10% customer yet. This is expected to change in the upcoming quarters as their demand increases.
Q: What is the [Plato] mentioned in the call, and how does it relate to Gemini-II?
A: Didier Lasserre, Vice President of Sales: Gemini-II L is a derivative of Gemini-II, configured to work with fewer cores for lower power usage. [Plato] is a new design targeting the LLM market on the edge, offering a low-power solution for inference, unlike the large GPUs currently used.
Q: Is [Plato] intended for inference applications?
A: Didier Lasserre, Vice President of Sales: Yes, [Plato] is designed for inference applications, specifically targeting edge LLMs with a low-power solution.
Q: Can you elaborate on the strategic review and the role of Needham & Company?
A: Douglas Schirle, Chief Financial Officer: We have initiated a comprehensive strategic review and established a special committee of the Board to evaluate strategic alternatives. Needham & Company is assisting us as our strategic and financial adviser in this process.
Q: What are the current financial highlights for the second quarter of fiscal 2025?
A: Douglas Schirle, Chief Financial Officer: We reported net revenues of $4.6 million, a gross margin of 38.6%, and a net loss of $5.4 million or $0.21 per diluted share. Cash and cash equivalents were $18.4 million as of September 30, 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
