GSIT - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's Fourth 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 the future performance of GSI Technology that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. are Securities the and uncertainties filed Form and the with Exchange risks described company's in XX-K These Commission.

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

Lee-Lean Shu

expanded for year basis XXX margins This afternoon, APU and XXXX. development by gain our year points. Good continue increase the our bringing help on and GSI as market. and new had our grew research joining we in thank in evolving gross fiscal product expenses and to a our strong you over We everyone, offset XX% us. business revenue

As with of operating the we ended profit, loss significantly, and narrowed year growth a increased strong net our income. result positive gross revenue

technology capital artificial is allocation the computing fund of intelligence APU, Our our associative in-place applications. to our patented commercialization strategy for

These search unique similarity a applications, Our APU be APU in the the and our power. discovery, markets computation, are improves device. The of initial pursuing for with response search drug that and utilizes architecture time, greatly the configuration reducing we to recognition. facial while is optimum are e-commerce designed

silicon We have bugs [ph] device. first in identified

silicon of processes computer aims cheminformatics, categories APU have of exceed with the successfully Institute the In our search The minutes for In able perform customer. our to bugs for demo further that milliseconds. molecular in target Weizmann and can perform search companies by The we e-commerce, anticipate similarity successfully team we happy time that measures for search from to performance. of we the existing with this is to performance search. our advancing search online. rates are APU's pharmaceutical was the in the the APU accelerated APU, from we We are along the core the discovery, of final the demonstrated -- video which to accelerate demonstrated used to However, down application, very work target seconds. computation device with

with have speed In video fact, and to search facial for markets existing currently a surpass low confident of high Similarly, search, as image improved outcomes. suboptimal accuracy platforms We of as These we APU with the number accuracy, believe faces distance in that better solutions. the resulting image. are e-commerce and large packs. such the identify that can well quickly, ability the in conditions, recognition, as that APU are moving in APU light, large far bird-view the can

we device a customers, utilize at our facility silicon and creating have We perform training that second Sunnyvale expectations. have material. we anticipate marketing customers, can our the X team test time, is Our milestone silicon them looking are APU in who X next that and [ph] then to device engaged starting our the if debut determine will onboard. with headquarters receiving had general to bring us we second and to Frontier is XG enhance The by allow At device We will for performance target will in weeks. This to demo. our device outcome. our

XX patents patents the pending a in our GSI holds APU currently and As the for reminder, XX U.S.

call like performance over our hand who in detail. Didier. go At individuals the our time, experience based solid this XX will to APU. goal rest of of in map. progress solely Our expertise. AI we have product focused decades These team have Please ALU business further Together, is will over ahead, in the of Didier Israel commercializing to our I discuss made and and engineers on

Didier Lasserre

Thank you, I'm critical for successfully RadHard gears the announce to we to these has have testing been our series product. Lee-Lean. completed new production of qualification pleased Switching that of parts. SigmaQuad our initiated. internal process The

completed calendar to the year. second the be expect of this in half qualification We

As we year available On calendar XXXX breakdown, to XX% chip anticipate for were RadHard of third to XX% quarter of during XXXX. before, and in XX% the shipments we've stated quarter. in revenue fourth having the Nokia sales sales later the compared our a fiscal ago

increase XX% didn't quarter, preceding category, in In best fourth quarter. last the product preceding compared strong continues fourth performing quarter. due also onetime XXXX. call shipments decrease to sales shipments as the sales was to Nokia, XX.X% defense repeat continue of SigmaQuad the of the were sale to fourth to were Doug? Nokia Doug. this to the of sales engineering higher SigmaQuad being from unusually increased year fiscal over RadHard QX be to an sales a I'd supercomputing of to Nokia compared XX% the to samples primarily in shipments XX.X% year which a strong our with to in to and XX% due defense and in ago. in expect We -- quarter year. saw for due and year very military sales The third Military remainder hand We calendar expect we of strong QX. from quarter application, in in the this a to now like and XX.X% sales, a which quarter

Douglas Schirle

you, Didier. Thank

XX, XXXX. $X the in improvement expenses we primarily mix. diluted For operating $X.X loss for fiscal $XX.X million million net increase and million in $XX.X were net were to margin million increase The due compared development and development XXXX. to to product on And the revenues March fiscal ended million $XX from from $XX.X income XX.X% expenses $XX.X APU, nonproduction $XX.X of to initial ended selling, $X.XX the an XXXX. expenses fiscal Gross Total mask $XX.X quarter $XXX,XXX Research compared net fiscal March the year. process, Gross due in September or the in full of the XX, XX.X% in million prior year an compared to in million fiscal revenues second share quarter or $X.X expenses XXXX. to prior share year per -- APU and of of compared was the the approximately fiscal year were per a incurred XXXX, of of including expense XX.X% margin of fiscal was second research which million million for set administrative we general $X.XX XX, diluted reported to ended million net XXXX, was development related in primarily and year.

and million revenues million compared share, period reported on to the $XXX,XXX $XXX,XXX net of fourth in quarter. quarter $X.X third and and $XX,XXX the ago prior $XX.X fourth of the we net we or to $XX.X cash comparable ended loss year preceding in included quarter income on in loss compared XXXX fiscal of to of quarter of of operating and and compared At and $X.XX compared $XXX,XXX and million long-term quarter. per compared the of revenues net fiscal net a preceding million was quarter. equivalents diluted the In the in general and quarter. in to year quarter million $X.X tax XXXX, third cash, administrative $XXX,XXX to or in of income For million in The XX.X% operating million quarter XXXX, per $XXX,XXX in million $X.X and and $X.XX Selling, long-term in XX, diluted fourth $XX.X a a million and flat interest XX, net XXXX. ago, preceding a net a the XX.X% $X to million operating had of quarter. pretax period $X.X the $XXX,XXX third development and compared and compared fiscal in in benefit and loss the XXXX, operating $X.X quarter. interest XXXX compensation million fourth cash share, $X.X XX, and $XX,XXX million of net investments XX.X% other the $XX.X $X.X the in quarter $XXX,XXX Gross short-term $XXX,XXX per $XXX,XXX quarter, in fourth income fiscal revenues income net ago. from income quarter fiscal tax in was million quarter shot-term XXXX Total XXXX $X.X $XXX,XXX of income $X.X in on the or were ended of benefit and Total and $XX.X were margin of March year interest the quarter included million a March XXXX investments million December sequentially of fiscal the provision in other diluted equivalents for fiscal XXXX. the other fourth investments to year in was $X.XX loss compared income Research quarter preceding of XXXX to in expenses prior of $X.X March tax an XXXX the XX, in the cash, compared of year XXXX, million expenses and prior $X.X the to million Fourth fiscal in preceding stock-based million expenses fourth $XX,XXX. fiscal prior at were expense $X.X quarter and investments share,

range we of point, XXXX, open XX% in million call to of revenues Q&A Looking this to margin with quarter the a XX%. gross first we'll to the $XX.X net Operator, anticipate million the at ahead to of approximately $XX.X

Operator

Cowen. now Jeff take of We'll [Operator instructions] from your question first Bernstein

Jeff Bernstein

guess, I are couple regard us With rail update guys a Just that? questions. on to also you on an the Could RadHard as high business, line of you give well. working

Didier Lasserre

what the that's So we call rad-tolerant.

less little RadHard. a the than it's robust So

the -- is device that testing done. So for the

on is rad-tolerant ready So some the go. wins. We're now with working design customers to

the in no having and we've just RadHard, the started further with were there's when testing there. strictly in qualification qualification done, issues on. of we just that's complete month the which series fact, tests, the we So issues then or to past It's

Jeff Bernstein

cost you. things? Internet more the projects would some with satellite parts, Got or of of kind those the smaller, world rad-tolerant of high-unit kind in for but And to they line be these

Didier Lasserre

and Generally, a or fit generally Generally need imaging orbit, so a would it's that the they're satellites. satellite things for like more communication LEO rad-hard. satellites low-orbiting in that geo if better trajectory, a are something the

Jeff Bernstein

Got you.

Okay.

of communication these the even networks units to So would are potentially take many that going have parts? some RadHard

Didier Lasserre

putting -- It depends and it up who there. really on satellite is it depends the

will have So will some rad-tolerant, have no some some memory. RadHard, will have

up and it who So depends satellite really it the putting is there. on

Jeff Bernstein

you. Got

right. want just sure to the I then And numbers I make heard Okay.

You said right? XX XX already, you is APU And pending? patent then have that issued

Lee-Lean Shu

Yes, correct.

Jeff Bernstein

you. Got

spin. be think obviously -- conference, a can for talked bugs? guys terms something possibility you that Okay, Yes, silicon wasn't you in second that kind a third potential if that? right about of on the great. correcting put And the of then of percentage of would any I kind sure a And is I'm just at or spin in wondering kind

Didier Lasserre

bugs. has as we've which discussed, seen So we've first silicon,

demo, some the with discussed are we we do able a do to customer As demo. to workarounds

which through. weeks, Second couple major the is we've bugs identify all next to out in silicon the of we're gone looking that

know just up all smaller with we'll memories manufacturing spin kind Now third if a clean that or from just just don't a our anticipating history we've need spin, issues. need we to done we're of that will any how of third we the bugs said,

Jeff Bernstein

Got you.

Okay.

terms has like. memory And is so gone, process it more in this a of how and whole the sort of

of what like sort you dealing you're so from And standpoint? with know that you feel

Didier Lasserre

bugs, of of I no won't we've first mean, I fact cleanup a that just historically us third some all silicon, be it feel the will what we spin. like, that us expect. done more -- fix just so the that seeing past, we gives we it all that to in us that say the it's of behind was complex it's after a the devices there to we be memory were get were mystery for what We're is for able just hoping will them. bugs have small the the a from identified

Operator

Our Caramanidis M. from Kurt Carl next of question Hennig. comes

Kurt Caramanidis

this a guess, throughout on year. line us fiscal a I to number First here. really are see things of here some off, have congratulations it's of been great while, so into achievements falling

products? less -- to looks you demands? with is XX that XX have and more Is what to marketplace lots do prospects how it of customers? a XX On that bigger customers product something are the let's players the have, it say, -- Or How is XXX understand or can there some smaller number I big like? we with APU, that

Didier Lasserre

the market. depends on So

that's of to at amount fair So if be customers, generally look cheminformatics, but smaller going a them. the you

the also that's in. the If certainly on going entities well where going to the government some some the to find large that's certainly facial kind of smaller, e-commerce, the small some larger then that's recognition, see kick And you the at of the where in you'll some of players players but look well. you're as players the laying where see you're and of as

Kurt Caramanidis

there of overall as opportunities as far pretty basket large of is numbers So a customers?

Didier Lasserre

yes. anticipation, our That's

Kurt Caramanidis

Okay. program now was or RadHard, that you're had moving approved kind So you you program that now that that? a On are -- that you targeted is How of talked how funded. about is maybe going toward a that... now

Didier Lasserre

Yes.

So one after it revenue. we've first we've because -- the the is to been obviously, that's going closest

XXXX. nothing have are that type With identified of going communications said, we've So all -- they end kick calendar our have are XXXX. some contractor in by prime opportunities, of them them, that with not yes, been program, changes, in until user. you. that a we're with And the showing And still constant would assuming and end most results that else the to test results what but sometime other the we've would be with in revenue of along

Kurt Caramanidis

Okay.

So Is $X high? opportunities? few Is numbers to million know XXXX I ballpark different we've the years. $XX of XXXX, calendar that talked million of last throughout reasonable too

Didier Lasserre

that's calendar XXXX, For reasonable.

Kurt Caramanidis

the what million, Okay. the million? but is You towards R&D then and spend part had was APU? $XX going this And $XX what may it R&D -- of -- be what Doug,

Douglas Schirle

it Pretty much all right of now.

Kurt Caramanidis

All of that? it? What's

Douglas Schirle

it all the of Pretty year. for much

Kurt Caramanidis

we... If

Douglas Schirle

We're of the in always APU terms focusing on sources. right now R&D

Kurt Caramanidis

So RadHard, SigmaQuads, $XX working doing you let's had chips APU, on just regular we cash generated million flow? and had say extra have we of would not were and

Douglas Schirle

have We had we been less to had working the R&D on probably million APU. would not spending, million $XX $X

Kurt Caramanidis

Okay. million? $XX to million $X

Douglas Schirle

Yes.

Kurt Caramanidis

like seems able do be to from Either that of the way you cash It tremendous amount business. that had... on to you're revenue the generating a

Douglas Schirle

operating for the number $X flow Yes. cash year. The is on preliminary around million

Kurt Caramanidis

With weren't I Right. that guess coming is heavy spend what, -- from it...

Lee-Lean Shu

correct. That's

Kurt Caramanidis

planning the it cash quite heard bit didn't If the that Lee-Lean went you're having to APU away, flow. had home in on when customers have it? new you -- quite on there a of about Are or catch customers there would office. talk at the I I comes lab -- work

Didier Lasserre

that's Yes, correct.

So for there training out. it in have built was of facility, some our visited of part empty a had you we center large that we the building who a and there. And is

we're fixed, some some or write we able second the demos have showing the what libraries anticipate silicon, for how to APU active their with that is demos. been so major who want all And but bugs do dive going we so include the for hopefully And active very to that do our deep device. own majority be can also works, people to

hardware there It will be who can So write libraries. they so dive workshops the their and on training, either how will trainings deep people type be be will depending want or it to of own in. a some training software come

Kurt Caramanidis

that's are guess, Okay, we're I until already to now ready great. not And they and, like back or starting work... coming

Didier Lasserre

No.

I like Now now, any say workarounds a it make when working without true sense. true doesn't demo, we're without doing

those for waiting we're So boards.

into trainings. And probably all so more July, before getting August start we sometime or it will but those be earliest September

Kurt Caramanidis

Okay.

million Is and if on you know to ballpark if to in I you've of as million some now, up? margin and the I assume we're And $XX going. got kind then run Let's of have you're from sell year if you metrics with products? to based say spin, per enhancement rate starting it's RadHard, a starting don't would now, that, start new a then third maybe ramping the rad-tolerant $XX quarter you're year APUs -- from reasonable a do selling --

Didier Lasserre

time $XX is is but It's define the future that million to $XX in million will when the increased will margins and to It's are in. kick answer correct little So in, harder margins kick our certainly, to expectations. statements. a the that the hard pinpoint just revenues in what

Kurt Caramanidis

another something search. he's one. one maybe that's I got just where testing the blog, on were apologize George similarity you Williams' On testing I APU. FAISS Okay. believe Facebook

that For their that mean? a to the you does you Facebook do thing prospect did just how how using works? or layperson, or are Is see system what this

Didier Lasserre

benchmark. a It's

there out industry are certain there we're -- they So are known. benchmarks and

we're those just against benchmarks. so ours be to testing And going

Kurt Caramanidis

that in you conferences. of couple are coming next months? in couple some of And up doing a outreach was I Okay. the maybe thought

Didier Lasserre

or be right I and other conferences there want space that's -- and certainly want in we'll a But that be, now. incorrect. say Is have could there. one it's then AI well And it's and say to but the panel have one well, panel basically employee at believe, be what as it's when We'll we us, to of East. to hosting panel I be actually I we're East, tomorrow sometime I the including -- Boston. is it's ODSC will but happens GSI panel, a the We're that believe ODSC panel. presenting planned I actually may actually the on in together it's I on -- convergence -- we'll want mistaken as a X hosting. hosting I the as the companies say And conference coming is have and

Douglas Schirle

I and be last May. Boston week will and Didier York of New in also

Didier Lasserre

be talking that's specifically But people investment, for will on conferences where APU...

Kurt Caramanidis

conferences. for Yes. am I investor looking

So you as up do those have a well? coming couple of

Douglas Schirle

Yes.

Operator

Your Shusterman and line the of next Needham of from will Ari come question Co.

Ari Shusterman

I for So am asking Raji Gill.

for wanted I about your off are margin? start about outlook. I let's How gross think say, would you by should -- So good margin long-term What to how that? be, your gross a range talking

Douglas Schirle

to Yes. model about We revised that gross a XX% margin ago obviously XX% our year away. quarter, blew one and to we

point to where So quarter we're close point. achieving the that every obviously we're at this at

last quarter of We year of certainly would we fiscal had a hope we XX% that the because mix were ago XX%. year, at that product never there. quarter I in quarter look the but a you probably If below primarily have

today margin point there. will at we're basis, are from we that product, we the but grow quarterly I and get where some on RadHard the in shipping hope a low start gross we would we As fluctuation

Ari Shusterman

And sure product but this, able was mentioned sense. revenue just to? it, the to opportunity that quantify you if -- the makes That -- RadHard if are Okay. would from not you like

Didier Lasserre

calendar be a year, in the it But calendar would few as won't starting should year. of $X this it Kurt So range year, calendar $XX calendar XXXX be lot. a XXXX. be million kind into dollars million It this to million mentioned,

Ari Shusterman

comes of just it Nokia share expect I customers I of guess expect defense compared to end FN or share military do when of I sales. you Would markets the was guess Nokia, the share how the to it Nokia rather? terms And SRAM in your change to, think, Yes. or to you -- -- -- [ph] for of

Didier Lasserre

healthy I very is mentioned calendar So the sales And looks we XXXX. rest the think actually the Nokia right in now. of as steady script, for

with so I And as will Nokia, think steady. remain as revenues that far

far as customers, all business as Nokia So a obviously the RadHard on with ramp percentage bring gong But next dependent as for and basis, remain constant be far any they'll their in we it's of up quickly revenue to few other down that quarters. can us, the would as percentage. how

Operator

take [Operator from And next of our instructions] we Jeff Cowen. will now question Bernstein

Jeff Bernstein

was and answered. question asked just my Actually,

Operator

no Shu time. Lee-Lean there questions it Ladies closing for like to are Mr. and back over this gentlemen, hand I'd further to at remarks.

Lee-Lean Shu

Thank with first you results. quarter we all Thank report We XXXX for when again, speaking our joining forward you. to look us. fiscal you,

Operator

Thank for concludes today's your This call. you participation.

day, lines, everyone. a your disconnect and now may wonderful You care. Take have

GSI Technology (GSIT) 5 May 192019 Q4 Earnings call transcript