GSIT - Earnings call transcript Q2 2019

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Operator

Ladies and gentlemen, thank you for standing by. And, welcome to the GSI Technology's Second Quarter Fiscal 2019 Results Conference Call. [Operator Instructions].

Before we begin today's call, the company has requested that I read the following Safe Harbor statement. The matters discussed in this conference call may include forward-looking statements regarding future events and future performance of GSI Technology that involves risk and uncertainties that could cause actual results to differ materially from those anticipated. are the the Securities uncertainties and Form and with filed and risks described company's in XX-K These Exchange Commission.

also conference is October Shu, the have this Hosting the request I been Chairman, is advise Technology. to Additionally, Lee-Lean of President today over you of to conference GSI and Didier Officer; call and Chief XXXX, Schirle, Financial like being XX, Please Shu. Executive Chief Mr. today, company's now Vice to call recorded at the Officer; Sales. President go Douglas turn would with the asked him are that sir. I Lasserre, ahead,

Lee-Lean Shu

quarter Welcome, everyone, $XX.X in high our into of guidance The today's commentary. revenue results. Doug revenue XX% to to and the earlier for first his $XX.X XX% provided the margin million on end review provided of the Gross margins the growth $XX.X joining will million. additional quarter's XX% CFO, the call our second of quarter guidance saw call second in above above some to XXXX you factors that our provide quarter. thank quarter was for our last and were Schirle, the insight million,

is with work point, customers, quarter made They to identify of team critical has were we focusing team plan on our both We computing assembling package implementing Israeli enterprise the have ahead. product. a team The hard during to exciting get viability liable and first in very application. of this determining [indiscernible] to for a in-placed now at but are are specific our an first It crucial fab time we early we received test approach of willing development algorithm to also institution. lot process, very significant APU stage their wafer patented in testing that worked progress the In technology, of this and our Our and recently to GSI we the our chip still APU. the step associated the from engage [indiscernible] AI as testing. the chip

eager of Science, of the embark scientific institution. are they the build to scientific result our data drug of announced field development APU. leader the solution customers Institute applications. can one to APU the explore to We This the journey analyze collaboration and data GSI's our footprint, speed. next leading Weizmann APU A for and scope a as of in a discovery this to team collaboration We the institutions Weizmann research of world's and with Institute be pending relationship is and used with tabulate unique on in with look technology target and large our recently how of phase marked combines increase will which bioinformatics, in analytic interest the biological evaluating complex drug of sets,

We the APU their new that in penetrating for on applications involved to time Institute primarily engineering the solutions SRAM radiation focused make the which are requirements timing difficult the and memory requires horizon. expect the typically delayed the on working the predict. will market mature. year can you time market high temperature, atmospheric long target markets our All for product long-term This customers the product they're contracts, in the chip. qualification radiation-hardened valuable with time growth continue as launch We defense for sales The and the supply between legacy recognize we for telecommunication sales the aerospace been innovating intend The and tolerant save build are require to resource and market. stringent Weizmann to to as development rad-hard our such to have of on company's and this successful fiscal the to government see markets the radiation-hardened customers line this for SigmaQuad yield that applications. teams are of funding our technology anticipated, high-performance testing high due health required SRAM

customer in their receiving fiscal put their the funding rate together. -- has the of We of assemble anticipate secured team has first engineering for engineering end this and the Our closes. year before their order

quarter However, the a has -- balance of this has certifications prototype request first that process is over the robust the for prototype into customer all of push the the certification push the more than calendar XXXX.

we the fiscal SRAM rad-hard will anticipate the revenue the modest quarter that third [indiscernible]. generate result, a in As of engineering from sales

the fall half into the prototype balance. the equivalent GSI coming critical for half time It important of execution the the is with XXXX several the MIL-PRS-XXXXX of calendar order Class with XXXX. first V in opportunities calendar second balance in the of expect shipment terms in We product year

for we our way to chip our unique our of the detailed tracking use hand have how new I is can continue customers Once to anticipate future and we expectations call our and performs, understand to the overview Meanwhile, product move and results. first rad in We we forward of will of exciting the rad-hard SRAM to all a rad-hard how for segment we testing to interest now eagerly exploring with be a determine financial over Doug? aerospace to APU strong the business. a military for tolerant anticipate our growth chip. potential and AI customers Doug results technology.

Douglas Schirle

loss was XXXX million net second quarter diluted Thank $XXX,XXX you, share of on in million net order loss Lee-Lean. loss and for largest revenues a against loss partial net Europe. second in or our one-time XXXX in or fiscal for the share $XX.X strong June the of quarter. preceding on Strong per compared first shipment the a build-out We and million for $X.XX revenue period reported for customer to the or per a revenues per of $X.X fiscal second $X.X fiscal of diluted $X.XX of diluted revenues and to growth net $XX.X the XX, a $X.X of of $X.XX and by of the was million a first XX.X% quarter quarter compared supercomputer share of net university prior-year ended margin driven from million quarter XXXX. demand for Gross XXXX, XX.X% XX.X%

these the in expenses of compared expenses product also addition, the quarter. compared ended and September quarter. margins, general, XX, $X.X quarter million and In a $X.X non-production and $X.X quarter. expenses to for our in in mask reserves from to $X.X included in decrease to second APU preceding quarter million to period drove prior-year $X.X gross amount our quarter. the the quarter were benefited XX, million inventory Research product. and an in fiscal mix Research fiscal for the preceding compared million which Total million factors XXXX development compared an million the million were to XXXX $X in increase the $X.X $X.X development second and million and the a in $X.X operating approximately the million $X.X in of initial were first the set XXXX, related expense million preceding in and quarter ended in preceding Selling, administrative XXXX, September expenses of

quarter the million $XXX,XXX comparable loss compared period year fiscal ago. XXXX prior the in $X.X operating $X.X in and Second was million to a quarter

a year of included and period income $X.X included quarter revenues compensation quarter preceding $XXX,XXX provision tax XX% year comparable net company were the of prior in the of Military Nokia quarter loss in interest income XX.X% $XX,XXX quarter million of Total second net in XX.X% same ago. in sales fiscal ago. capital, $XXX,XXX working of quarter defense a $XX.X stockholders' a no $XXX,XXX interest investments, shipments $XXX,XXX in cash other shipments shipments stock-based a and and and prior equivalents, second XX.X% $X.X and $XXX,XXX compared XXXX, shipments In in to a debt, and XX.X% in to were $XX,XXX. million to or loss of in and quarter, year compared prior net ago. compared SigmaQuad to the comparable of quarter million in of cash, and the sales tax $XX,XXX compared and the tax of net XX.X% of in XXXX a XX.X% provision period pretax the the ago. expense to of and and quarter In net the or or fiscal of At quarter period second and interest XX.X% sales long-term comparable million of investments, other revenues revenues in compared $X the $XX.X in equity provision was Second income year were XXXX. for $XXX,XXX XXXX, a to the million the had short-term other XX.X% quarter September $X fiscal XX, $XX.X prior the million million. of

of range expect of fiscal quarter million. Looking revenues forward in $XX.X to XXXX, million the to net be the currently we to third $XX.X

quarter. We Operator, in of XX% open call to approximately Q&A. XX% third we now will expect the margin gross the to

Operator

our Mike from [Operator Crawford first FBR. B. Instructions]. question take with We'll Riley

Michael Crawford

some I you acquired team update that and even solutions. you -- hiring double was that you is of about back on from I wafers see years When to you what that that think customers this bit nearly the could a were us how times talking existing further maybe seeing you they to the you I and MikaMonu were little certain with APU. you I the of about does had better bring market enterprise And number -- ago, now prospects that have people than also you now know think nearly -- hoping talked X,XXX X think about fab? a compare XX what as

Lee-Lean Shu

is in the people. about, to us Okay, for APU debunking, also Israeli that's run about over people order so of we XX logic software XX team, field plus processing team close know, the you and the to [indiscernible] product,

for say the second was XX the totally it's question? group. about So what would the And people new I new,

Didier Lasserre

seen the the where versus Was up where the competition? we asking we've part see we, about after stacks wafers, how

Lee-Lean Shu

search. is We, very good okay, the Okay, performance. the in so similarity a APU very,

anything moment so market, competing see this Okay, solution, in the we close don't our to solution. at

So thousand similarity in I improvement a think of bad still is times search. terms that

is focus our point. So going be that to

Didier Lasserre

are haven't you to we clear, tested actually -- we've them so the the out they're But yet. wafers, once be but we said assembled being seen wafers

off So discussing software is based simulation. everything of that we're

Michael Crawford

Okay.

So several benefit over then that's competing magnitude you relative order the good still that, know, of hear same see you technology. to

you come and revenues might revenues to this assemble might in the layer So, again, do to and or as for you -- effort? and know it what layer and you is sampling feedback how then in start you get get in these some periods them relative wafers out

Didier Lasserre

a we of point. this So have are know difficult with again level or what don't out. The have answer. -- We that's answer to is that reason at functionality we silicon a I say difficult the first question wafers

in more units packaged when next couple know in or weeks we'll our assembled So, the hands. get we

sending well. be look libraries then boards, boards will the As that to are through we device. friendly so in the eval Lee-Lean a mentioned their few at run can have boards to as we willing and Israel algorithms the script, they customers And also

So, will when the need certainly in. depends know timeframe know the, you to can for kind we that determine it we of before the do and debugging on what you revenues kick

Michael Crawford

Maybe be come another back by and you one answer? under are if if that difficult I revenue pass we that just that's maybe you too it's to or take this there at know and wafers stab would some problems year meaningful you that, muster time a which next it, -- get this know something of typical. that you final you scenario could set detected then like could also perhaps where Is seeing assuming then

Lee-Lean Shu

process typical you silicon. Yes, real half go. you work to year in hard will to I think debugging see how will predict year, see the can the it's one really But,

think typical. I that's

Operator

Carl We'll go M. next Hennig, Caramanidis with to Kurt Inc.

Kurt Caramanidis

in how customers this they of right, help of if these I own process? of that Kind Are for go Question of some that did and and friendly remember how some your you people? did using made you, their what will want IT that were of how to quarter. these about? to on come debug with Good I going customers? develop kind think kind

Didier Lasserre

to to through software early algorithm going to X different certainly testers look Israel always we've the And check. going in had level Certainly going that we're compelling the the library presented and it's we to saw data the to send a we're on that also solution our as always ways. to component anticipated And solution we look get to out at then at it parts. real reached folks and we where flowing to were internal a then real was do So of who and that's and very eval part it some important for them. memory on our boards

And silicon. were wanted willing to to the in have so access they sign and up early some cases to

over that's happening And been that's this at point. for process a a year so

Kurt Caramanidis

see depends that see be board -- get getting simulation that on do do type put here first would the it or--? is like of there's friendly's, you when you -- first into it's together, the you like run So after and February -- but January, it thing some these then sounds

Didier Lasserre

Yes, so completely timeframe -- there's it depends sometime hopefully functionality first depends But looks that the quarter, first of quarter is on silicon end some of looking year. again the functionality like. first then the on it'll in it again it if of Obviously we're with to be next calendar silicon.

Kurt Caramanidis

on the that putting Any website? George at of finally, It coming sounds and has your and of end year them. now of any them AI conferences. between worthy like are number great Okay, of up been a the

Didier Lasserre

panel So we're it's X. I and ODSC believe be at a actually West hosting going November to

coming up week. it's next So

be Wayfair, Wal-Mart hosting search. and and I And have we'll see I our eBay, be to are on be that it'll I discuss the similarity you'll we'll believe X Clarify, folks panel. so folks will labs specifically believe believe panel from And Google, the

Kurt Caramanidis

to able run the on web? be you live Will that

Didier Lasserre

know know I be. is know though. it be certainly recorded. it'll live will what to be going the I don't I don't process if

Kurt Caramanidis

-- you'll otherwise great. but it that's Okay up get

Okay, super.

Operator

Jeff Cowen. We'll from take next with Bernstein our question

Jeffrey Bernstein

couple a some these to you able do Just electrical wafers and Have guys does characterization how look? been -- and just probe that just questions. get

Lee-Lean Shu

We We assembly. straight just pass no, to No, this probe. wrong. wafer go

Jeffrey Bernstein

Got you.

Lee-Lean Shu

we the when package see unit. receive will we So

Jeffrey Bernstein

there's mask set? on because it prototype quarter just this now expense, expensed basically that this then how treated so forward or sort of it's the set if in And delivered another a get you. was Got these gets mask do going

Douglas Schirle

we we've product that a is on expense when what to that This time. the typically time-- did which Yes, is R&D, we've this before, a technology we'll run first run never

Jeffrey Bernstein

you. Got

Douglas Schirle

[indiscernible]. be one-year period. a Future sets to will mask run We cost of all product over sold charged goods

Jeffrey Bernstein

Q&A I lastly you, I terrific. know where spectrum of kind don't a high And Got Micron of memory of futures a if Technologies to blessing with saw APU as go? processors EEE mention, then guys you just one essentially the out, would the need there's mastermind, approach article

Didier Lasserre

we've have subject. Yes, We on seen we von in seen haven't that but several the processing past articles is key. model and specific a Neumann we memory few bypassing certainly article and certainly seen that the that and

Operator

Marathon next go We'll Instructions]. [Operator with Management. to Jim Kennedy Capital

James Kennedy

at layman's just Would perhaps looking by benefits terms the the remind what us cannot other another be some of chip at that I can is mean and guess bioinformatics? why Weizmann you just this pursuing me in you I point? What you, do give for achieved that APU this fundamental cannot does architecture alternatives? can

Didier Lasserre

much can't Sure. other be that achieved with alternatives, with alternatives. slower they It's other done they're that is not

they're like So to trying screening. processes virtual that time and accelerate can go the they through discovery drug

are now. slow. very CPU using they're they mostly So, they're -- solutions very, based and They're

ran they they're very using to our device And were very, specifically them that excited. encouraging. so came very some the software them, on And for back results the we've platform presented simulation when and then we

that's to going friendly's to so the first look one at of they're board. And eval why be certainly the

James Kennedy

Is it this artificial is terminology we proper or using? be learning to there intelligence machine call or should another

Didier Lasserre

learning. It's not machine

of search. So this under earlier, which kind what is, falls similarity to Lee-Lean is this alluded

off So based of we're doing essentially search molecules. similarity

under falls not so machine is It similarity learning. And this search.

Operator

want follow-up At to have opportunity. Jeff Instructions]. no in with we take the give this Bernstein final Cowen. We'll questions [Operator queue, time we from a do everyone a

Jeffrey Bernstein

go this you any rad-hard additional parts just standard, And where sort any higher the that know -- characterization with just you in other with to of the on can so in have on the give side, does customers customers? at part terms any you can of of about impact color Yes, aerospace/defense the other the the pipeline? thoughts

Didier Lasserre

even in be to What we and out to at were that to to for a production at term, first particular going We that devices the to would prototype the back program a buying highest standard long was the they like So, higher be said standard. build was the to customer. before knew for that news go And they're that come prototype going they the requirement to always it production. was was quantities came lower be expected this have us standard.

So term the that it change bit little won't a anticipated. delayed because prototyping just affect that the was long was a our customer. It because from

Jeffrey Bernstein

and this you any interest other Got feel from level for at customers point?

Didier Lasserre

in later be discussing. certainly the rad-tolerant the mean discussing but and This rad-hard be to in are just programs. we're kicking but first Yes, other will XXXX pipe, and then there with only in into in -- programs XXXX. customers one we're And other also those l not the our calendar happens

Operator

At queue. no further we time, questions have this in the

Lee-Lean Shu

We for when also to fiscal for all you today. again XXXX results. the you with us Thank look report Thank joining you. we forward speaking

Operator

gentlemen, appreciate this We your and Ladies concludes today's conference. participation.

GSI Technology (GSIT) 26 Oct 182019 Q2 Earnings call transcript