GSIT - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the GSI Technology's Fourth Quarter and Fiscal Year 2020 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 involves risks and uncertainties that could cause actual results to differ materially from those anticipated. are with the Commission. the uncertainties and Forms and filed XX-K Securities risks described company's in XX-Q These and Exchange of or currently to are COVID-XX global be these and the Many continue will amplified amplified by be the in by by pandemic. future may amplified risks

that Technology. May I at X, Additionally, you the also is call request asked been conference have GSI XXXX, being advise of to this recorded today,

Officer. Chairman, the him call President Lee-Lean is Schirle, and Didier are With Hosting Executive and Shu, the Douglas President, of Chief company's Sales. today Lasserre, Vice

I to would go now like Shu. sir. to turn the conference ahead, Mr. over Please

Lee-Lean Shu

APU thank and and fourth our and business afternoon will the report explain full-year the status quarter financial results. fiscal you Good our call. in Today, an we products, for joining provide current on our of environment, XXXX the on update

global created instituted we regularly circumstance remain The measures as global continue pandemic COVID-XX in. Despite we has long-term and understand environment are operating evaluating stakeholders, to the we that on the our strategy. will unique pandemic, and and the uncertainty others are our preventive all measures be and COVID-XX we created those by better focused many for have

succeed confident product lines. experience position, in We ability funding strong new our our provides for knowledge, difficult Technology's in legacy our are and our times, given GSI and these tremendous to financial team's business that

equivalents and the there from majority there long-term the XX, March Taiwan, are are employees million and we cash, had short-term of our around [indiscernible], XXXX, cash with $XX of long As where home. Outside working no over investments -- were of world debt. in

delivering achieving commitment and milestones. we productivity all grateful in support challenging service, product Our our and to product, of time. this I'm our during remained are moving for high forward employees' excellence has

the search accurate X APU using total the large in billion-scale at consumption completed smaller of server boards initial Gemini-I a search ownership containing rate for In and show April, Gemini-I. early with results footprint megahertz. we APU quarter, Gemini The that much benchmark the a and lower distinguishment similarity we our benchmarking ownership. search lower published of of XXX solutions. product, Gemini-I's fourth for the with In the in running speed a is on total cost datasets significant cost lower fast, today's performs Gemini-I power high-performance in accuracy extremely a results

as more large is the memory The based removed APU databases the of at Gemini computation to This serve better transforming process. the is a differentiators governmental performance the provide critical differentiator to system this primary end memory applications. machine into the and enable processors. design search Gemini-I's and function The of speeds also market to costs database There shows and and serial lower from trained that Real-time with embrace microseconds, numerous configuration Gemini-I. fewer in search use placed compressed CPUs that in seconds, limitation even sensing processes. the GPUs are tens-of-minutes business, enhanced GSI critical extensive increasingly The new ability creates many performance. scientific solutions to will architecture in

on reduce chip. has Gemina-I key about [indiscernible] million the ALUs. typically Gemini logic allowing A X Another arithmetic into differentiator power ALU, perform the is database has dozen. query APU the And unit to computation. or Last less into to the ALU CPU GPU use times thousands of has the and break of load search. down more search the memory the the APU, internal a much and granular the

APU. differentiator Scalability is Gemini of another the critical

processing entire growing fast the to with the memory search and our to one consumption we these The total large retaining the deliver cannot fit that extremely market size educations, server. power performance scale multiple boards current can performance at database bases boards Gemini-I while performance of new We can APU integrate the in number is data and with GPU large for scale. low. APU time. many chip For servers keeping CPUs search low. require with multiple chip, into loaded of the build Gemini in with allow cost the keeping solutions ownership of In own delivers some solutions, extensive a database as that Gemini such by

Finally, Gemini different, case software. solution broader a search universal address the customizable can with hardware serve many and and sent used as flexibility market specifically

level of algorithm PyTorch. There code to Our search from Gemini a assembly with many a contained and software unique are different for up search. TensorFlow custom library applications or for programming multiple applications

the of caused application by develop our solution unique The all on GSI. will address the for global progress our as business continues quarter products outlook networking multiple focused will be last Doug lies from to ahead the near executing in on the Despite military the remarks. current our Gemini-I. variable Asian time. and to circumstance That's remain this for the for all opportunity extent pandemic, COVID-XX first and term We of his to over core defense will be stakeholders comment as that customers. well more for for prepared fiscal telecommunications continue of we essential

Please the to Now who Gemini-I go ahead, Didier, hand call on will progress highlight and review business I marketing our and segment Didier. over the will sales performance.

Didier Lasserre

are report marketing Thank that you, to actively Gemini. Lee-Lean. I'm pleased we

is and performance collateral the characteristics unique marketing on Gemini-I. capabilities to for team discovery. ongoing created drug educate Outreach sales of end facial all now Our has and users recognition

We remote and detection COVID-XX use functionality of customers current signal libraries. demonstrations We with training and are to engaging Gemini-I's and on Due cryptography. government for these algorithms commence classification, and plan workshops. software conduct with work-from-home to and restrictions, customers building for are workshops we our in military place cloud-based object shelter preparing to remote

of specific of are recognition am examples search. performance we Gemini's share in in performance pursuing. a about me couple applications excited very Let X Gemini-I's I currently facial

APU performance board. times processing. query to databases results delivering single facial reducing a In search all many recognition from of that of is and much Gemini-I up with accurate can while faces searches, minutes power lower prospective shows customers million fractions XXX Gemini-I edge these a second, data the Our with consumption engine to the highly process

drug we market discovery. currently is developing exciting are Another

You may announced were Institute with the CPU Gemini saw They we recall the that queries in They improved ability molecule early collaboration far with research. the the the a that APU Israel the solution. Weizmann productivity user with parallel search beta to technology markedly late an on of multiple at speeds XXXX, run capability. cheminformatics processing exceed APU's in

Institute installed are researchers Now Gemini-I the the Weizmann newly boards containing APU. using at

that Weizmann on in finding treating similar drugs -- existing viruses. boards their database Gemini-I, using goal more Institute molecules. compounds with that been queries molecules diseases trials. properties decrease premise containing into similar the exhibit to to researchers structurally to Based is researching that clinical their the find ultimate molecules research have needed The similar With for successful similar and query the time to been to structurally successfully perform sorry, from searches are activities, quicker scientists biological have go to

fourth year were revenues XXXX, million million a or Shifting to sales net revenues revenues prior in $X.X an at of the slower period net million forecast of XX.X% the or XX.X% in The and been through quarter have Nokia of is Nokia fiscal breakdown to of improvement or time, our end is which shows same the ago compared XX.X% $X.X in of continue in sales of for half to the somewhat the expect quarter. this change, situation recent and Nokia's in subject second we June. XXXX. preliminary calendar to sales but sales $X.X fluid quarters, to

with in preceding in to XX.X% a the prior compared XX.X% Military quarter. shipments continues XX% third quarter year of ago sales the SigmaQuad fourth sales were to and product our year of fourth compared quarter last defense category and quarter XX.X% in XX.X% the to XX.X% be of of performing fourth quarter. and shipments best

like to Doug. over go to hand now I'd ahead, the Please Doug. call

Douglas Schirle

Didier. you, Thank

fiscal per XXXX. was of fiscal ended March March For XX.X% or per net diluted million margin we the on or to in $XX.X the diluted reported net the $XX.X Gross revenues million $X.XX of loss year share, of XX, to year. net revenues fiscal for prior in share, million year net compared compared XX.X% XXXX, ended $XX.X XXXX $XXX,XXX income of on $X.XX XX,

quarter XXXX. fiscal and fiscal development million charge increase the research The in expenses is from APU, to the Total million to including and XXXX, prior XXXX $XX.X $XX.X general million and fiscal property the that compared being compared purchased fiscal million million, operating year; processor, an in of development into for of of during and $XX.X $XX.X in $XX.X were the Gemini increase chips. Research was AI generation due were incorporated fiscal next in the $XX.X million third expenses of selling, in $X.X to primarily million administrative intellectual expenses were a company's XXXX. development of XX.X% expenses

primarily profit operating higher operating an to decrease The compared million in to due $XX.X was expenses. included prior and of in provision of of loss and is the increase development XXXX to year. interest a operating revenue Fiscal net compared a in XXXX Fiscal and interest gross loss $XXX,XXX the research $XXX,XXX $XXX,XXX provision tax a and and tax ago. in of income and other $XXX,XXX $XXX,XXX loss and other loss year income

share, XXXX, on $X.X compared net million or fiscal $XX.X of loss revenues The net net fourth of revenues per $XX of fiscal per of for quarter third of $X.XX on share, for $XXX,XXX on $X.XX fiscal company of revenues million $X.XX $X.X loss the net million net share, a million to the quarter diluted diluted or for net a XXXX. fourth reported $X.X diluted XXXX, or of per and the of million loss quarter of a

in of of third due on quarter. in compared XX.X% the impact XX.X% in changes Gross sold revenues. manufacturing the in and products was margin period was preceding margin the and mix The overhead the negative to reduced prior-year to change XX.X% primarily gross

Total X $X.X operating million million $X.X $XX.X were the the and compared expenses expenses third million to expenses are $X.X in prior reflects our quarter XXXX of in million decrease purchased and a incorporating development intellectual fiscal -- prior million prior-year million for Gemini $X.X of chips. $X.X from quarter million, for in the into generation were to quarter the next quarter. quarter fiscal fiscal the of $X.X in period R&D that Research compared were charge XXXX of the quarter. prior the fourth XXXX the in The we property and in during fourth

million in million administrative million, in compared and operating an million to year Selling, prior of $X.X XXXX, $XXX,XXX ended general loss the $X.X operating the XXXX loss year $X.X expenses quarter compared quarter. period in Fourth $X.X loss fiscal XX, million the operating quarter previous prior was in of to and an the prior quarter. the in March $X.X were and

net ago. year interest and interest $XX,XXX other loss and $XXX,XXX to comparable in the quarter quarter, tax income XXXX of income provision the $XXX,XXX $XX,XXX. $XXX,XXX same quarter and a third other compared period a for year Fourth the other a compared benefit a ago pre-tax fourth and $XXX,XXX tax loss a of $XXX,XXX and compensation expense and net of was stock-based In provision Total of to of included income fiscal and interest included tax quarter. prior quarter preceding the $XX,XXX in $XXX,XXX, in

ended XX, as and XXXX short-term of March million to $XX.X investments XXXX, March cash At compared debt. as was million with $XX.X cash, $XX.X March at capital investments $XX.X Working and equity $XX.X million million investments XXXX. cash, short-term XX, of to versus XXXX equivalents and of and long-term million year $XX compared at XX, investments, XXXX. long-term as we XX, equivalents Stockholders' XX, was million $X.X $XX.X XXXX March million, in the XX, million in March fiscal no had March in in cash

were gross to revenues for million net the $X.X earnings in Fourth to last range in $X.X with the XX%. margin range our provided guidance results within of XX% approximately quarter release million of of

we Our We've range XX%. current XX% for million quarter changes expectations approximately guidance quarter expanded in million for revenues are to with net the of gross range the our are impact of to with. customer in buying $X contacts The the margin a from upcoming upcoming had of $X.X possible the patterns deal to and a like to customer reflect place number to home. communication limitations to significant currently require work ever we've marketplace experiencing of in anything is our restrictions disruption that related to that shelter

historically with operate metrics have historical are While our we that performance, financial whether consistently as to to we continue monitor to these predict we the business experience. our will metrics uncertain used

Q&A. Operator, at to call the this we'll point, open

Operator

you. our take first go Caramanidis. question ahead. Kurt from Thank Instructions] [Operator now We'll Please

Your line [technical is difficulty]

Kurt Caramanidis

me? hear you Can guys. Hi,

Douglas Schirle

hear can we Kurt, Yes you.

Kurt Caramanidis

able being Oh, getting to to to and sell some planning your great, as collaborator? just they they Are they pig be guinea that kind of boards places? okay. Weizmann, a order or on are Are how chips to any is needing going? free other

Didier Lasserre

to accounts. Yes, both

for recently, loaned they upgraded, the in system plan we given as mentioned, So we the system. them them on new have paying past and we the and have that

Kurt Caramanidis

they like how some drug the is to Are to these I'm that because wondering hot or a -- compared right some you're or and companies, of prospect Okay. do how get going now, area ever larger as more it's other some modest drug out as get to word it seems presentations able to be, companies?

Didier Lasserre

we've market earlier, down we we've brief, one-page back high the by and So in a that explanation, month. within recently and it have it level discussion marketing mentioned broken as of put front And I last -- together a sales consists the the which is segments. collateral we've

we to backup, along the we have the presentation we in-depth have for almost And one a of discovery. these each in-depth recognition presentations technical we for as then out put and more then And white So write-ups, have with facial a like segments. papers that world. more market currently drug one and for

And doing sales presentations so of brief. demos based the we've and of been some of some the with one-page initial the outreach the off

Kurt Caramanidis

feeling those are you presentations? early on conversations How or about

Didier Lasserre

some see if in put I of results we good. really I benchmarking, out, everything you mean, we're looks the the some early of Good. certainly, certainly mean, process. the that

As just I within these the last received few mentioned, documents weeks. we

certainly, in what results the process, it's but So we the expected. early are

we're And to so marketplace that communicating now. the

far, feedback. So I it's mean, so good been

Kurt Caramanidis

Okay. I the extremely what results would impressive. are you're And facial agree recognition, of doing

you we scratch? recognition to extremely some been is already orders sales type How then getting process? And are positive. of you looking? a might trying looks that some of facial Do how of So, how The some I'm sort. partner there? starting some have is game out that start Have from aware? them Or

Didier Lasserre

So sold we we had two partners, one. which

right was there. a some based one their but off is financial POC now the doing still them of them algorithms. -- having difficulties, we're other They're of One with

then be the able And papers. beside give now, so out going that's to white more as to folks beyond presentations beyond detailed this them, time. reaching mentioned, take and in I we're And partners, -- other some to space to in initial them

Kurt Caramanidis

of part government that? Is

Didier Lasserre

of Government is that, part yes.

Kurt Caramanidis

then because Doug if people But that overhang, stock why be are like, put an the selling, of good? be net then because part like what questions, due and most in, I times let some or compensation are saw other get either little seems else would if are and whatever. and acquiring, they get Doug. think One I Okay. your guys think, cover you're time, and so a mechanics thing the I of somebody I stock but color so some it's -- selling about probably the so is well, even generally to selling I'll and I in just options, got the -- the you really to you sometimes explain, paid they not you but -- options, explain looking or come Can it things selling many bit just stock there's almost taxes seems explain tried or confusing? to

Douglas Schirle

Yes.

to at not grant they're receives those XX% for typically a every date. executive Evergreen in year, Grants, on just everyone hire gets every or officers. of Subsequent anniversary have that, the an their and And option when it's Technology true annually. employee per period, GSI monthly, And year. the four-year an after anniversary over hired. vest It's Evergreen that's the we So quarter Grant

when XX-year there And that these get invest into would four are four vest on them. those people they and options so XXX% future. over It's not invest after are options years vessel, four of have it's four-year all life And employees number for a officers they the of years expiring. with a years. a So theirs, to

And when we're a and net think many and this additional shares started to lot of in cases, lot sales in week, more shares, see they're August. expiring [indiscernible] a selling I use times you shares. of those proceeds officers the buy sell they

in shares, grants. acquiring an will officer are also increasing get acquiring They Directors over their the from decreasing. position officers not shares. So some been We've who company, also also, have most the some of time, had option perspective,

really they because additional been want typically sell, those and proceeds using additional the selling, people So when not need they see they to other choice. shares buy have money to to have it's because you buy They a which don't it's grants. shares,

Kurt Caramanidis

to just I needed that Great, have clarified.

will I out Just that. come generally speaking, you. something, Thank and I so step appreciate I if have back again.

Operator

you. Thank

have no queue from Kurt. is We questions a further -- in the question apologies, follow-up there

Kurt Caramanidis

There's is today crazy. I Sorry. know calls. multiple

the heritage order the out anything just good two call, need wanted one update getting there's to on So only Rad-Hard, the on give outlook I or or be. of on for somebody but chance there? a Any sometimes any it

Didier Lasserre

finished the we qualification. So

are the started with. XXX megabit, the lead we family is on now which SQ-II+ So family, we

have but so now We we -- our their certification. qualification, we V internal finished qualification, only did partner finish finished our not have and

QMLV are they So certified now.

able So we devices. now to are offer equivalent QMLV

the grabbed all we So sheets. data

Now we're like some through still and -- you the going said, of we're getting heritage asking going obviously folks. the the

orders clear will the waiting we some Rad-Tolerant, be just funding the our not that. do it's So have first Rad-Hard to the or and orders whether for wins in We're come Rad-Tolerant. from nice because

with we right in promising, be As more, along the hoping SyncBurst about into the now. far as in about talking everything NBT in preliminary done that's we've the COVID-XX, testing hardening hold some were also in results to in we've the with with were were discussed our APU. November but we obviously, past, the on back actually time facility very as on family and and APU, past April, get back -- do to going

qualified this at continuing point, to testing it's So of into fruition. right funding we timing until the facility. can the of and hold parts we and is matter a will now promote come to new when on the have we're those families are just that do But the and adding on, back get

Kurt Caramanidis

Okay, training great. before was all And this did you it APU, hit? January stuff some on

Didier Lasserre

November. last was It

Kurt Caramanidis

thought in at chance orders the there too gut your have on With training that? facility of tell? something the was interest, kind people hard I Oh, see thinking type of you the office that What's I before, summer, through year. indications anything any you've do contacted didn't some was of in to you this January? of your

Didier Lasserre

I expect I difficult do you third a order it's sometime predict. station it tell the the when because so opportunity. somebody about said, to order was talking an in. And as expect car having come our I'll me, to Rad-Tolerant you And Yes, I what, back that's in when too asked I quarter was when was supposed last

so me make to -- for And a prediction

Kurt Caramanidis

I'm sorry, I'm to -- thought APU On -- APU, gears. apologize. am switched I I on on sorry on APU. about meant -- I that. I I yes,

had thought I or thing. the a at headquarters you kind some training January APU So in training of for

So some some question of APU, you about see is have interest this my apologize or I about these of maybe tracking been Rad-Tolerant Or possible sort more not any APU. that, what's feeling -- I people your getting summer of the along kind POs indication Do meant as of way?

Didier Lasserre

Yes. sorry. I'm

the done from APU, to but was is January the back beginning The I first us correct. it correct. purchased out entity So that for did -- in or the in can't was remember And training board government December. was February. went happened quarter, We it at actually a a and it you're be and who of training, -- if

for the be to that the are more some and group on have occurring. FPGA the but where board. in that additional us specifically people member currently we -- still the we that that be write adding something able the so additional is other organization, is for APU, S-H-R-E-C, market or done member SHREC we've so And called of that's resources on we're on to or our and with or the we'll have work that so to -- utilize also they resources some PhDs it's in algorithms spaces, and for Action become what that APU libraries changes a APU also within We've they conversations organization of can of part board can areas within SHREC, those Star doing the additional make active something FPGA

And that's the towards And geared so happening now. of are applications. government those all military type

quarter update. a that's the within So recent last

Kurt Caramanidis

this So summer, get think possible are or to how do it's thinking initial you that? you some about orders,

Lasserre Didier - A

really Hard mean, in we cryptography, Kurt, It's hard as government that doesn't happen, predict mentioned beginning, going a to to for signal technology at but between the predict, it's of of certainly, yes type and massive this space. could conversation say when I I detection, classification, amount in to between interest it happen. just there's object the

Kurt Caramanidis

was on look, looks to performance I mean, mean, unsure how a one about we're just Okay. the performance was Lee-Lean person, to talking And impressive. I And But certainly, was around but metrics overall it the It the depends certainly, congratulations, someone I saleable. of look going cost. very lay question, environment in. getting

of you these. talking So were about price the

So were a footprint you thinking? at would you still you're have to originally the looking performance than thinking price boards, when price or cost-effective speed/power it at would you're have be you or what -- lower of the APU do

Didier Lasserre

No. have of any for us reason any initial There's in to assessments. our prices lower no

Kurt Caramanidis

great, guys. now long been we've Okay, got pandemic. road, a a and It's

and that, all look Thanks through out. a work lot. to how pans forward this So,

Didier Lasserre

you. Thank

Douglas Schirle

Kurt. you, Thank

Operator

the further this at are There in no time. queue questions

Lee-Lean Shu

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

Operator

conference this you call. gentlemen, Thank Ladies and your for concludes participation. today's

may disconnect. You now

GSI Technology (GSIT) 9 May 202020 Q1 Earnings call transcript