Core Insights - GSI Technology reported a net revenue of $6.1 million for Q3 fiscal 2026, reflecting a 12% year-over-year increase, but faced an operating loss of $6.9 million due to rising R&D expenses related to IP purchases [3][6][7] Financial Performance - Operating expenses increased to $10.1 million from $7.0 million year-over-year and $6.7 million in the previous quarter, with R&D expenses rising to $7.5 million from $4.0 million a year earlier [1] - Gross margin decreased to 52.7%, down from 54.0% a year earlier and 54.8% in the prior quarter, attributed to product mix [2] - The company recorded a net loss of $3.0 million, or $0.09 per diluted share, compared to a net loss of $3.2 million in the previous quarter [7][8] Cash Position - Cash and cash equivalents improved to $70.7 million from $25.3 million at the end of September 2025, bolstered by approximately $46.9 million in net proceeds from a registered direct offering [5][9] - Working capital reached $71.7 million, significantly up from $16.4 million at the end of March 2025 [11] Product Development and Initiatives - GSI made significant progress on its Gemini-II program, achieving a 3-second time-to-first-token for a multimodal large language model, which is up to three times faster at lower power compared to competitors [4][12] - The company is collaborating with G2 Tech on a proof-of-concept for the Sentinel program, which focuses on autonomous perimeter security, and expects over $1 million in government funding to support R&D expenses [15][16] Customer and Market Insights - Sales to KYEC accounted for 17.9% of net revenues, while sales to Nokia represented 11.1%, indicating a diverse customer base [18] - Military defense sales constituted 28.5% of third-quarter shipments, showing the company's strong presence in defense markets [19] Future Outlook - The company anticipates strong sales from its largest customers in the first half of calendar 2026 and is advancing its APU roadmap with plans for hardware development and a targeted Plato tape-out in early 2027 [20]

Financial Data and Key Metrics Changes - Revenue in Q3 fiscal 2026 increased by 12% year-over-year and 28.5% on a fiscal year-to-date basis, reaching $6.1 million compared to $5.4 million in Q3 fiscal 2025 [3][11] - Gross margin was 52.7% in Q3 fiscal 2026, down from 54% in Q3 fiscal 2025 and 54.8% in Q2 fiscal 2026, primarily due to product mix [11] - Operating loss for Q3 fiscal 2026 was $6.9 million, compared to an operating loss of $4.1 million in the prior year and $3.2 million in the prior quarter [12][13] - Net loss in Q3 fiscal 2026 was $3 million, or 9 cents per diluted share, compared to a net loss of $4 million, or 16 cents per diluted share in the same quarter a year ago [14] Business Line Data and Key Metrics Changes - Sales to KYEC were $1.1 million, or 17.9% of net revenues, down from $1.2 million, or 22.7% in the same period a year ago [9] - Sales to Nokia increased to $675,000, or 11.1% of net revenues, compared to $239,000, or 4.4% in the same period last year [10] - Military defense sales accounted for 28.5% of third-quarter shipments, slightly down from 30% in the comparable quarter a year ago [10] Market Data and Key Metrics Changes - The company reported a significant increase in cash and cash equivalents, reaching $70.7 million as of December 31, 2025, compared to $13.4 million at March 31, 2025 [16] - Working capital was $71.7 million as of December 31, 2025, versus $16.4 million at March 31, 2025 [16] Company Strategy and Development Direction - The company is advancing its APU roadmap and planning hardware development after acquiring necessary IP, aiming to tape out Plato in early 2027 [3] - A partnership with G2 Tech for a proof-of-concept on autonomous perimeter security using drones and cameras is underway, supported by government funding [4][6] - The focus is on edge AI applications, emphasizing low power and low latency, with plans to validate performance through additional benchmarks and customer proof-of-concepts [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong sales from major customers in the first half of calendar 2026, driven by solid demand for products [3] - The company is actively pursuing non-dilutive R&D funding through government defense programs, which is expected to enhance exposure within the DOD for future business opportunities [24] Other Important Information - The company plans to expand cash disclosures in quarterly earnings releases to provide better insights into cash consumption and generation [15] - Current expectations for Q4 fiscal 2026 are net revenues in the range of $5.7 million to $6.5 million, with a gross margin of approximately 54% to 56% [17] Q&A Session Summary Question: Importance of defense applications for Gemini-II - Management highlighted that military and defense sectors have been early adopters of their technology, with successful engagements with the DoD and other agencies [20] Question: Potential timelines for government funding - Management indicated a continuous pipeline of submissions for SBIRs and other funding programs, emphasizing the non-dilutive nature of this funding [24]

Financial Data and Key Metrics Changes - Revenue in Q3 fiscal 2026 increased by 12% year-over-year and 28.5% on a fiscal year-to-date basis, reaching $6.1 million compared to $5.4 million in Q3 fiscal 2025 [3][11] - Gross margin was 52.7% in Q3 fiscal 2026, down from 54% in Q3 fiscal 2025 and 54.8% in the previous quarter [11] - Operating loss for Q3 fiscal 2026 was $6.9 million, compared to an operating loss of $4.1 million in the prior year and $3.2 million in the prior quarter [13] - Net loss in Q3 fiscal 2026 was $3 million, or $0.09 per diluted share, compared to a net loss of $3.2 million, or $0.11 per diluted share in the previous quarter [14] Business Line Data and Key Metrics Changes - Sales to KYEC were $1.1 million, or 17.9% of net revenues, down from $1.2 million, or 22.7% of net revenues in the same period a year ago [9] - Sales to Nokia increased to $675,000, or 11.1% of net revenues, compared to $239,000, or 4.4% of net revenues in the same period a year ago [10] - Military defense sales accounted for 28.5% of third-quarter shipments, slightly down from 30% in the comparable quarter a year ago [10] Market Data and Key Metrics Changes - The company is focusing on defense applications, which have shown early success, particularly with the U.S. Department of Defense [20] - The partnership with G2 Tech is expected to enhance capabilities in real-world applications, particularly in defense and potential commercial uses beyond drones [22] Company Strategy and Development Direction - The company is advancing its APU roadmap and hardware development, with plans to tape out Plato in early 2027 [3] - A partnership with G2 Tech for a proof-of-concept in autonomous perimeter security is underway, supported by government funding [4][6] - The focus is on low-power edge AI applications, with an emphasis on performance per watt and responsiveness rather than peak training metrics [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong sales from major customers in the first half of calendar 2026 [3] - The company is actively pursuing non-dilutive R&D funding through government defense programs, which is expected to provide additional financial support [24] - Current expectations for Q4 fiscal 2026 are net revenues in the range of $5.7 million to $6.5 million, with a gross margin of approximately 54% to 56% [17] Other Important Information - The company reported a significant increase in cash and cash equivalents to $70.7 million as of December 31, 2025, primarily due to net proceeds from a registered direct offering [16] - Total operating expenses in Q3 fiscal 2026 were $10.1 million, up from $7 million in the same period a year ago, driven by increased R&D spending [11][12] Q&A Session Summary Question: Importance of defense applications for Gemini 2 - Management highlighted that military and defense sectors have been the quickest to adopt their technology, with successful SBIR wins and ongoing evaluations for various applications [20][21] Question: Potential timelines for government funding - Management indicated a continuous pipeline of submissions for SBIRs and other funding programs, emphasizing the non-dilutive nature of this funding and its importance for future business exposure [24]

Financial Data and Key Metrics Changes - Revenue in Q3 fiscal 2026 increased by 12% year-over-year and 28.5% on a fiscal year-to-date basis, reaching $6.1 million compared to $5.4 million in Q3 fiscal 2025 [3][12] - Gross margin decreased to 52.7% in Q3 fiscal 2026 from 54% in Q3 fiscal 2025, primarily due to product mix [12] - Operating loss for Q3 fiscal 2026 was $6.9 million, compared to an operating loss of $4.1 million in the prior year [13] - Net loss in Q3 fiscal 2026 was $3 million, or $0.09 per diluted share, compared to a net loss of $3.2 million, or $0.11 per diluted share in the previous quarter [14][15] - Cash and cash equivalents increased to $70.7 million as of December 31, 2025, primarily due to $46.9 million in net proceeds from a registered direct offering [17] Business Line Data and Key Metrics Changes - Sales to KYEC were $1.1 million, or 17.9% of net revenues, down from $1.2 million, or 22.7% in the same period a year ago [10] - Sales to Nokia increased to $675,000, or 11.1% of net revenues, compared to $239,000, or 4.4% in the same period a year ago [11] - Military defense sales accounted for 28.5% of third-quarter shipments, slightly down from 30% in the comparable quarter a year ago [11] Market Data and Key Metrics Changes - The company is focusing on defense applications, which have shown early success, particularly with the U.S. Department of Defense [21] - The partnership with G2 Tech aims to leverage the company's technology for real-world applications, including drones and smart cities [24] Company Strategy and Development Direction - The company is advancing its APU roadmap and hardware development, with plans to tape out Plato in early 2027 [3] - The partnership with G2 Tech for the Sentinel program is expected to enhance the company's capabilities in autonomous perimeter security [4] - The focus is on non-dilutive R&D funding through government defense programs and strategic partnerships to support development [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong demand from major customers in the first half of calendar 2026 [3] - The company anticipates receiving over $1 million in government funding for the Sentinel project, which will offset R&D expenses [6] - The outlook for Q4 fiscal 2026 is net revenues in the range of $5.7 million to $6.5 million, with a gross margin of approximately 54% to 56% [18] Other Important Information - The company is expanding cash disclosures in its quarterly earnings to provide better insights into cash consumption and generation [16] - Total operating expenses in Q3 fiscal 2026 were $10.1 million, up from $7 million in the prior year [12] Q&A Session Summary Question: Importance of defense applications for Gemini 2 - Management highlighted that military and defense sectors have been the quickest to adopt their technology, with successful partnerships and applications already established [21][24] Question: Timelines for government funding - Management indicated a continuous pipeline of submissions for SBIRs and other funding opportunities, emphasizing the non-dilutive nature of this funding [26]

Financial Performance - In the third quarter of fiscal 2026, GSI Technology reported net revenues of $6.1 million, a 12% increase year-over-year from $5.4 million in the same quarter of fiscal 2025[4]. - Gross margin for the third quarter of fiscal 2026 was 52.7%, down from 54.0% in the same quarter of the previous year, primarily due to product mix[4]. - Operating loss for the third quarter of fiscal 2026 was $(6.9) million, compared to an operating loss of $(4.1) million in the prior-year period[8]. - Net loss for the third quarter of fiscal 2026 was $(3.0) million, or $(0.09) per diluted share, an improvement from a net loss of $(4.0) million, or $(0.16) per diluted share, in the same quarter of fiscal 2025[9]. Cash and Assets - Cash and cash equivalents increased to $70.7 million as of December 31, 2025, up from $13.4 million at the end of March 2025, reflecting $46.9 million in net proceeds from a Registered Direct Offering[12]. - Total assets increased to $98,460 million as of December 31, 2025, compared to $43,317 million on March 31, 2025[22]. - Cash and cash equivalents rose significantly to $70,672 million from $13,434 million[22]. - Stockholders' equity improved to $83,620 million, up from $28,226 million[22]. - Current liabilities increased slightly to $7,613 million from $7,074 million[22]. - Long-term liabilities decreased to $7,227 million from $8,017 million[22]. - Accounts receivable decreased to $2,832 million from $3,169 million[22]. - Inventory remained relatively stable at $3,876 million compared to $3,891 million[22]. - Operating lease right-of-use assets decreased to $8,590 million from $9,547 million[22]. - Other current assets decreased to $1,933 million from $2,961 million[22]. - Other assets increased slightly to $9,654 million from $9,507 million[22]. Research and Development - Research and development expenses for the third quarter of fiscal 2026 were $7.5 million, up from $4.0 million in the prior-year period, driven by the development of new technologies[6]. - GSI Technology expects net revenues for the upcoming fiscal fourth quarter to be in the range of $5.7 million to $6.5 million, with gross margin anticipated to be approximately 54% to 56%[3]. - The company is advancing its APU roadmap and pursuing initial design wins for Gemini-II in defense-oriented programs and select commercial edge deployments[3]. - GSI Technology announced a proof-of-concept with G2 Tech and two government agencies, expecting roughly $1 million in government funding[6]. Sales Performance - Sales to KYEC were $1.1 million, representing 17.9% of net revenues, while sales to Nokia increased to $675,000, or 11.1% of net revenues, compared to the same period last year[5].

Core Insights - GSI Technology reported a revenue of $6.1 million for the third quarter of fiscal 2026, representing a 12% increase year-over-year, driven by sustained demand for SRAM solutions [3][4][7] - The company achieved significant milestones in the development of its Gemini-II technology, including a successful proof-of-concept for an autonomous perimeter security system [3][7] - GSI's gross margin for the quarter was approximately 52.7%, a decrease from 54.0% in the same quarter last year, attributed to product mix changes [4][6] Financial Performance - Net revenues for the third quarter of fiscal 2026 were $6.1 million, compared to $5.4 million in the same quarter of fiscal 2025 and $6.4 million in the previous quarter [4][10] - The operating loss for the third quarter was $(6.9) million, compared to $(4.1) million in the prior-year period [9][10] - The net loss for the quarter was $(3.0) million, or $(0.09) per diluted share, an improvement from a net loss of $(4.0) million, or $(0.16) per diluted share, in the same quarter last year [10][21] Cash Flow and Balance Sheet - The company ended the quarter with a cash balance of $70.7 million, significantly up from $13.4 million at the end of the previous fiscal year [12][13] - Total operating expenses for the quarter were $10.1 million, an increase from $7.0 million in the same quarter last year, primarily due to higher research and development costs [6][9] - Cash used in operating activities was $(7.9) million, reflecting investments in the development and commercialization of Gemini-II and Plato [12][13] Customer and Market Insights - Sales to KYEC were $1.1 million, accounting for 17.9% of net revenues, while sales to Nokia increased to $675,000, representing 11.1% of net revenues [5] - Military and defense sales constituted 28.5% of third-quarter shipments, slightly down from 30.0% in the same period last year [5] - The company is pursuing initial design wins for Gemini-II in defense-oriented programs and select commercial edge deployments [3][7]

Core Insights - GSI Technology announced preliminary benchmark results for its Gemini-II Compute-in-Memory processor, achieving a time-to-first-token (TTFT) of 3 seconds for multimodal large language models at the edge, with a power consumption of approximately 30 watts [1][2]. Performance Metrics - The Gemini-II processor demonstrated a TTFT of 3 seconds, which is the lowest reported for a multimodal 12B model on an embedded edge processor [2]. - Competitive platforms reported TTFTs of approximately 12 seconds on Qualcomm Snapdragon X Elite at 30W and 3 seconds on NVIDIA Jetson Thor at over 100W, indicating that Gemini-II offers superior performance at lower power levels [3]. Market Implications - The performance profile of Gemini-II is well-suited for "physical AI" markets, including drones and smart city applications, where power and thermal constraints are critical [4]. - The shift from cloud-assisted models to local inference in edge physical AI is expected to enhance latency, reliability, and operational efficiency [5]. Development and Collaboration - GSI's engineering team is focused on optimizing the responsiveness of the Gemini-II processor while collaborating with partners like G2 Tech for system integration and proof-of-concept activities [6].

Summary of GSI Technology Conference Call Company Overview - **Company**: GSI Technology - **Headquarters**: Sunnyvale, California - **Founded**: 30 years ago, went public in 2007 - **Core Technologies**: APU (Associative Processing Unit) for AI, SRAM technology, and radiation-hardened memory solutions for space and military applications [1][3][4] Financial Performance - **Last Fiscal Year Revenue**: Just over $20 million - **Projected Growth**: Expected to grow about 20% for the current fiscal year [5][27] - **Cash and Cash Equivalents**: $25 million as of September, excluding a recent $47 million raised [6][27] - **Market Capitalization**: Approximately $270 million with 21% insider ownership [6] Product Lines SRAM Technology - **Product Line**: Highest density and performance SRAMs in the market, primarily from the Sigma Quad family [6][7] - **Revenue Contribution**: Majority of revenues come from the Sigma Quad family, with significant design wins in the third and fourth generations [6][7] APU Technology - **APU Overview**: Focused on edge computing with unique compute-in-memory architecture, allowing for massive parallel processing [10][11] - **Gemini 1 and Gemini 2**: AI chips designed for edge applications, with Gemini 2 being more versatile and capable of being sold as a chip [17][18] - **Performance Comparison**: Gemini 1 demonstrated 98% less power usage compared to NVIDIA's GPU in a specific application [17] Future Products - **Plato**: A next-generation device aimed at addressing large language models (LLMs) on the edge, with a tape-out expected in early 2027 [20][22][29] Market Opportunities - **Edge Computing Market**: Expected to grow from nearly $7 billion this year to over $16 billion in five years [10] - **Radiation-Hardened SRAM Market**: Projected to grow from $2 billion to nearly $5 billion by 2032, with high ASPs ranging from $10,000 to $30,000 and gross margins over 90% [9] Strategic Partnerships and Projects - **Partnership with G2 Tech**: Involved in a proof of concept (POC) for a multimodal VLM model for the Department of Defense, focusing on drone applications [19][37] - **Government Grants**: Awarded $3.4 million in SBIRs and additional funding for various defense projects [23][24][26] Competitive Landscape - **Market Position**: GSI Technology positions itself as a strong competitor against larger firms like NVIDIA and AMD, leveraging its established manufacturing capabilities and expertise in SRAM [28][29] Challenges and Future Outlook - **Revenue Growth**: The SRAM market has been flat, and future revenue growth is expected to come from the APU segment [42][44] - **Software Development**: Ongoing efforts to develop a compiler stack and functional libraries to support APU applications are critical for future design wins [45][48] - **Production Timeline**: Anticipated production for Gemini 2 in 2027, with prototypes expected by the end of 2026 [46][48] Key Takeaways - GSI Technology is at the forefront of AI and edge computing with its innovative APU technology - The company has a solid financial foundation and is strategically positioned for growth in the defense and aerospace sectors - Continued investment in R&D and software development is essential for capitalizing on emerging market opportunities and achieving profitability [27][44]

Core Viewpoint - GSI Technology, Inc. will announce its financial results for the fiscal third quarter of 2026 on January 29, 2026, and will provide an outlook for the fourth quarter during a conference call [1]. Group 1: Financial Results Announcement - The financial results for the fiscal third quarter 2026, which ended on December 31, 2025, will be released after market close on January 29, 2026 [1]. - A conference call to discuss the third quarter financial results and the outlook for the fourth quarter will take place at 1:30 p.m. Pacific time (4:30 p.m. Eastern Time) on the same day [1]. Group 2: Participation Details - Participants can join the call by dialing 1-877-407-3982 in the U.S. or 1-201-493-6780 internationally, approximately 10 minutes before the start time, using Conference ID 13758230 [2]. - The call will also be streamed live on the internet via the company's investor relations website [2]. Group 3: Replay Information - A replay of the conference call will be available from January 29, 2026, at 7:30 p.m. Eastern Time until February 5, 2026, at 11:59 p.m. Eastern Time [3]. - The replay can be accessed by dialing 1-844-512-2921 for U.S. callers or 1-412-317-6671 for international callers, using pin number 13758230 [3]. - A webcast of the call will be archived on the company's investor relations website under the Events and Presentations tab [3]. Group 4: Company Overview - GSI Technology is a leader in the AI sector with its innovative Associative Processing Unit (APU) technology, which enhances efficiency in large database searches and high-performance computing [4]. - The company's products, Gemini-I® and Gemini-II®, provide scalable, low-power, high-capacity computing solutions that improve edge computing capabilities [4]. - GSI Technology is headquartered in Sunnyvale, California, and has sales offices across the Americas, Europe, and Asia [4].

Core Viewpoint - GSI Technology, Inc. (GSIT) shares experienced a decline of 7.29 percent, trading at $7.12, despite the announcement of a new proof-of-concept engagement with two government agencies and a partnership with Israel's G2 Tech for the Sentinel project, which is supported by the U.S. Department of War and a foreign government [1]. Group 1 - GSI Technology's stock opened at $7.96, up from a previous close of $7.68, with trading occurring between $6.90 and $8.90 during the session [2]. - The current bid for GSI Technology shares was $3.96, while the ask was $6.77, indicating a significant spread [2]. - Trading volume reached approximately 6.14 million shares, surpassing the average volume of 5.66 million shares [2]. Group 2 - GSI Technology's 52-week stock price range is between $1.62 and $18.15, highlighting significant volatility in its stock performance over the past year [3].