GSIT - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the GSI Technology's Third Quarter Fiscal 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 Securities the and uncertainties filed Form and the with Exchange risks described company's in XX-K These Commission.

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

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

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

Lee-Lean Shu

first database afternoon, completing you financial review In billion progress into benchmarking Good thank has our industry-standard Gemini-X third of processing XXXX, using significant to In up and items. joining ANN our us similarity against FAISS momentum standards industry to we associated everyone, for continued and XXXX. made a Gemini-X. increased quarter with results. on The unit, anticipate the chip XXXX our we for March, benchmark

in We by results expect second XXXX, for in XXXX. completed to half to qualification which the of followed the publish we be anticipate our summer of Gemini-X,

cellular that and the AI is is design software on library customer design the memory software workshop. Gemini-X our Gemini processes. based capabilities for core in Our AI memory sensory preparation team Gemini in of finalizing architecture limitation combines with algorithm the for removed chip expertise.

fees directly As with a processing result, operating orders the lowered memory in search place scalable This massive compute array. has a take processing, of parallel data and data costs all architecture. architecture increased and magnitude by

distinguished scalability, our The product. architecture Gemini of last feature

levels from code of the code product for programming up Another of interface. assembly of X allow is distinctive multiple Python. They feature to tens custom

customers also applications. for we will facial development. recognition one to design have year of Once drug The signal we object the e-commerce targeting, we and identification future win XXXX including classification, for service. similarity Gemini-X for anticipated discovery talk qualification, drug new the to opt and the for completed application and be are We Gemini-X search

the from to and AI legacy research performance to team consistent development. business Gemini-X I appreciate Gemini's pleased to work us team's market, hard our fund our the and allowed bring with I am has

is approach will for which be to in-memory that's novel in patent-protected. technology, why our ultimately and processing is GSI anticipate scale speed, And a new a AI we AI. power bringing and with game-changer

Now I'll turn Please Didier, will detail. performance further go the who ahead, call Didier. our over discuss to in business

Didier Lasserre

Lee-Lean. you, Thank

our the and In Q to qualification addition qual progress SRAM leverages to defense made the radiation-hardened on V completed on all and GSI's we our proven legacy Class technology solutions. and Gemini-X, customers. solutions Xx radiation-hardened the aerospace offers be we've power switched requirements our of to as chips meet solution Class have the level memory rarely means internal the technology node. the XX-nanometer memory GSI's with and footprint RadHard at can current up out for to size higher-density same This

We several radiation-tolerant and our have identified prospective chips. radiation-hardened opportunities both for

very result, were results for we include may Gemini-X aerospace. to those also Last and level processing had expanding in product space a these We greater for the calendar a million see and on promising. markets much product to products. quarter, XXXX the As still market $XX $XX sales that categories. TAM of million see we some in Gemini-X satellites, products allow the test the radiation Gemini will to opportunity data on

most been expect similar XX.X% of quarter. and million level recent XXXX. in of fiscal the XX.X% our of or Nokia of to sales a third a we at million year $X.X $X.X quarter, and XX.X% compared XXXX, the were Looking Nokia breakdown the prior in slower sales $X.X the sales fiscal of revenue to quarter in ago revenue or or fourth in revenue have quarter million

a were this of the to fiscal continues XX.X% XX.X% calendar return of quarter with of be ago best-performing out our shipments quarter. saw third defense Looking XX.X% sales to levels product we expected shipments preceding sales and quarter. earlier category, Military the and of the SigmaQuad last improve to prior quarter XX% and XXXX, third in to compared year XX.X% in to the compared remainder year and in is forecast to year. XX.X%

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

Douglas Schirle

Didier. you, Thank

of revenues million $XX.X each prior For million revenues or quarter. million per quarter. XXXX, the of fiscal is these $X.X XXXX share, the third quarter fiscal to and million diluted $X.XX third diluted to sold Gross $X.X million of gross $X.X the compared quarter XX.X% of reported in of The on net of per in quarter of revenues per of net million for prior on $X.XX of $X.XX year margin products income on compared we diluted to and share, the second in loss in XXXX. of or net changes XX.X% periods net of each in the share a margin loss fiscal in due mix primarily or net net $XX.X period $XX XX.X% was

fiscal million from in our down third charge December incorporated $X.X of $X.X compared XX, expenses be million prior the million property XXXX reflects to during previous ended quarter. in XXXX the quarter the million the development the the and Selling, quarter year XXXX, and increase expenses quarter. $X.X were were million of million chips. $X.X expenses will R&D administrative fiscal quarter in $X.X in in to compared of Gemini quarer, and were quarter. intellectual purchased in operating Total $X.X in prior a $X.X general that $XX.X next-generation in $X.X Research of for compared expenses third XXXX, and million period sequentially the the third million quarter and in million the fiscal into The prior to million $X.X the of preceding year

million of and loss in compared operating the loss Third quarter operating was year ago prior $X.X quarter. million operating fiscal period in XXXX million to income an $X.X of the $X.X

interest a $XXX,XXX quarter and tax loss fiscal provision the other same tax and of of In tax second for included included third period a a preceding a $XX,XXX of the loss in other provision interest of income $XX,XXX and of and to income income $XXX,XXX The $XX,XXX year quarter, $XX,XXX. ago. and provision XXXX compared interest and net net other

third fiscal in to was $XXX,XXX from Total pretax prior $XXX,XXX XXXX and $XXX,XXX compensation comparable compared the ago, the a quarter. quarter stock-based year quarter expense

December $XX.X XX, $XX.X investments March the company had cash year and of the XX, At in XXXX, investments in investments cash fiscal million million in short-term cash, investments short-term long-term million for to ended $X in equivalents cash, $X.X and and compared XXXX. equivalents long-term million

third with net quarter of upcoming $X.X of a XX% are range our expectations in current to XX%. margin the revenues For approximately million of year fiscal $X.X million gross XXXX, to

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

Operator

And Instructions]. with question Needham. first take we'll [Operator our from Shusterman Ari

Ariel Shusterman

for This is the Ari question taking Gill. Raji

expectations in seasonality gross And the kind talk So start off about first drop gross Can think and of one maybe margin you how why moving you about significant can about you for talking quarters? speak following by about? should gross margin? a the we to off expect talk about your margin such forward

Douglas Schirle

next margins a impacted fairly the by system quarter. we for of which are won't be in the really current a Gross quarter there that shipment significant the in product expect high-capacity mix Yes. computing December had in The Europe, fourth to quarter. shift

level In gross a addition, Nokia is our more Nokia reasonable in next generally margin, are revenues of again quarter. average. with line down

So bit quarter. Europe in lost shift the of business we're March in really impacted that by that from mix

be somewhere we've we the quarters, range XX% we forward, experienced still most generally, going see recent fairly in And expecting in low consistently. should that the like

Ariel Shusterman

to expect And you how with RadHard achieve your this to Got much say And TAM, expand of grow, for future? XXXX? TAM with you. $XX to the regards would the do this Or you long-term expect TAM? million, to in it the $XX you million is in

Didier Lasserre

what's Hard to predict going in to XXXX. be

have seen revenue happened in to yet. difficult from the to already don't get something we've launch had We know you. anticipate in schedules XXXX, certainly just to have and the predict As it It's some we what is. hasn't RadHard, we about and calendar talked funding just with very anticipated past, which what

to as testing which with we product As done Gemini-X, on what about very the is mentioned, We talked we've some $XX we've far $XX TAM, looked as the I -- current million promising. value have. the

if for the So certainly certainly, hopefully, to be portfolio. to space. that will able the possibility that grow the And that's aerospace we'll TAM that add, family case,

Ariel Shusterman

more just can with question talk profitability. you're And how you seeing about regards to one Yes, kind that your move forward? path to of you. Got we as

Didier Lasserre

Ari? with the profitability, sorry, Tim

Ariel Shusterman

Yes. Correct.

towards profitability. Your path

Douglas Schirle

the understand question. don't I

Ariel Shusterman

Yes, was to about your I path is yes. asking just what profitability?

Douglas Schirle

And Oh, lot it start to gross doesn't a path expect to range. a very margin in quarterly rad-tolerant profitability. are products. Obviously, to would and take RadHard revenue XX% even. be basis breaking the on RadHard/rad-tolerant of somewhere we Generally, it

being successful profitability than that that In matter that, a shipping shipping also, average. products providing and those It's once of growth. a us Gemini to be start to gross the should we addition chip, really lead greater we our corporate to margin and in expect

Ariel Shusterman

line Do a have you time? or at time not this

Douglas Schirle

on yet, one giving can revenues data forecast it's but any on of to that lot giving us those no not kind is Gemini kind in There volume we interest any the a chip. is of a forecast of present We're people. early

space. already has of the we're in and and works we're seeing interest the rad-tolerant seeing significant getting interest showing on that that there's And of order product. about RadHard/rad-tolerant. DDA getting that first RadHard or a in of matter talked addition, In part out lot amount and information It's there again, the a that the

Operator

Inc. our take We'll Kurt Caramanidis next from Hennig, Instructions]. Carl M. with [Operator question

Kurt Caramanidis

a be if for customer you've alpha idea a have to would potential a of -- Kind prospect potential for in of Is that? board customer the got it Is would just it number be defense it alpha What could like the the What XXX? area. get demand? a what couple? an an Is dozen? customer

Didier Lasserre

Kurt? product, which For

Kurt Caramanidis

the Gemini. For

You're larger of in could Gemini, what of your the is for to the in digits general potential? Just looking larger sense a XXX prospects? some from these design what board, going kind -- wins, single new what you're prospects to is their there dozens opportunity with

Didier Lasserre

I So all recognition versus these e-commerce differ. on in the of what volume the it market discovery depends application drug for talk first. mean versus of And that by is, we applications boards some facial the versus government Gemini really to

customer on space depends and also the really side. it the So market

So shipping me to generically be we're to that thousands. tens for could that it to answer customers question,

it So and the on depends space really customer. the

Kurt Caramanidis

with an is So opportunity for thousands someone? there

Didier Lasserre

they out -- could had fact quantities. look and need still our that benchmarking. workshop be to week. going we're about certainly, going And at, to be be in some the workshop the went actually our right larger. -- it answer looking Tuesday this We on to at first and Wednesday. early -- through actually if the we talking now, of entity But updates provide this to government a Too first is, did we're But you

that to to this we get need But they'll right the just presentation. too quantities. next And us beyond and still them then now, level, point They once talking with solution prove And that to it's haven't that so start a is early. PowerPoint yet. we gotten

Kurt Caramanidis

know XX-year So I what what -- e-commerce it or think not you it work. but of than the it, you're that, what tens speaking. -- shouldn't of you've for all sure was, do? it I'm you a Could it's is across but prove More With generally of make tens of than the discovery -- drug saying, be assuming of that realize I and generally recognition, up that? the market that more kind Or there, of kind way follow just have working Okay. kind to into of the and what millions million? you -- facial just it's out customers kind want these is of across that? market the more. on all size put down, assume, going to to and I it Based

Didier Lasserre

Yes.

give, there own feedback numbers not whatever our we not would internal yet. be based of we're again, off quite So it customer speculation because

because start to been search looking the have that what and they're right going by I they and now, it's have next want not numbers throw we'll proven the don't do, gives out them it to quarters, customers those does solution, we kind But it the getting provided benefits certainly and for, I themselves. of and numbers. once of think couple the we acceleration our the say within

Kurt Caramanidis

publishing when waiting we a enough. get benchmarks some the this then years. results think are? But release but on can what Okay. And done, the that's we've Fair when shareholders? term, you if don't pass that I you been along technical a that's completed few in March, get what probably other to can I know

Didier Lasserre

release. Yes. We're looking to press a do

be... it'll So

Kurt Caramanidis

have it's we So done? to months after wait

Didier Lasserre

now. on we our and No. for to respinned item not. discussed, the to board, the Hopefully, database, as some with so it board board. goes recall again, the we billion waiting database that board, items X board a I first The has -- we're the working we've the done mean, new is then -- chip if We're and have current XXX-million and testing on item you Gemini XXX board, a limitations. up not

So it all receiving next the the be board, X. put have February, we'll And week we'll so sometime within then next or in together.

the once done, So to results we fairly all testing publish we have anticipate quickly. those then

Operator

from next Bernstein Cowen. hear We'll Jeff with

Jeffrey Bernstein

I I the missed SRAMs, what you qual to of what Q said I the else. something and rad-tolerant thought just wanted -- Two about questions. I said know you Class and just those were? RadHard

Didier Lasserre

Sure. Yes.

and what's which well, our the that military SCD, which for different under two drawing, And QMLQ QMLV there's major on doing which half to going are working the is control QMLQ equivalent. the different is is QMLV. qual but X a of actually to been they levels, called So last source actually we've internal We're this -- called levels second call we're year. drawings. what there's -- be going SMD, are doing and the those is something And and be few

and are X levels. this V So the Q

Jeffrey Bernstein

these how Got in much take? ionizing radiation are terms you. And things basically those can specs of

Didier Lasserre

total -- Exactly. what's the correct. That's TIDs doses, how or everything? the And much

Jeffrey Bernstein

Yes. Yes. you. Got

question And lot the can and All TSMC? potential Okay. just the customers. minimum right. order from size you had eventually, product that then What's customers supplying a of logistics I on to

Didier Lasserre

you For which talking -- are about...

Jeffrey Bernstein

yes. For the Gemini,

Lee-Lean Shu

think much limitation in maximum, normally, there's the XX that's last -- there. don't Well, And wafer a a a lot, minimum. the size we wafer in I hold pretty the is

Jeffrey Bernstein

Got how around does order? you. a wafer take And it turn to XX long

Lee-Lean Shu

If pipeline. months. the the the typically, in start but About from very beginning, six we have wafer a stages wafer the stage we of various

But take will you you day from if months. be day, will shorter. X So the X, normally, start much first then

Jeffrey Bernstein

that? that size the So that about lot of already can have have ordered to assume you Okay. how and product ready And you'll cost much is one we go?

Douglas Schirle

price all on -- price. disclose not higher the of the Obviously, they the We're wafers. technology, the But the advanced highest more to allowed technology. vary based the the

Jeffrey Bernstein

you. Got

but can -- product end-use wafers you you you lot XX that so can ordered size, worth have that so And for of one say available? have already have you

Lee-Lean Shu

No.

anticipate another wafer, our will production size kind some we far, just in. lot do of which we -- get prototype just So another not in started, have have business limitation. come does wafer, is which to But you

Operator

M. Kurt we'll Hennig, from [Operator take Instructions]. question And a follow-up Inc. Caramanidis with Carl

Kurt Caramanidis

I of Very to if know is just that -- kind a is between? plug-and-play nice of existing this don't remind full, or by with a to my infrastructure, how again, use in How name, proper. easy the task? somewhere is way. it that's me, herculean pronunciation difficult But it say plug or Or to the even I board --

Didier Lasserre

For Gemini board?

Jeffrey Bernstein

Gemini board. For

Didier Lasserre

Yes.

So no, right. you -- just

So we did here. ourselves it

Sunnyvale, that workshop have the have we here for to needed, in Gemini So some boards. we obviously,

them we it, room. two just mounted and putting we in Gemini two it. our first have and a between day facility, we took our in getting and them was the here just up server running, Sunnyvale time server it so at guys And did them about and doing or with boards And two here our in just

is time this we've done again, first it. So the

it's herculean So not effort. a

Operator

our We'll from George question Investor. with take Private Gaspar next

Unidentified Analyst

quarter end and at Could the question, me of brief had the of versus you of level part a -- your last here a with of Could -- you you the the the I'll that position? fiscal year? then give of ask cash quarter year please. end the second analysis previous relate the you cash that beginning And the on the

Douglas Schirle

end of were fiscal And the prior $XX.X of $XX.X quarter, we of year year, million. a at most were end $XX.X At ago, we end were the million. recent the at the March, million. So the we quarter, the

the the about So has quarter quarters like for X grown balance cash it now. or for -- if it's looks each grown last, I quarter look X every

Unidentified Analyst

quarter loss Okay. kind quarter-to-quarter your is And net for and has interesting modestly cash much ahead a loss? of your it's moved you that recorded here, how -- on the your basis

Douglas Schirle

number. a $X.X about We were big It's million. at

Unidentified Analyst

quarter? And $X.X it was the what million. in last

Douglas Schirle

$X.X million.

Unidentified Analyst

million. $X.X

your So do -- loss you're the cash somewhere? margin suggestion got a how cash does can a How greater the money this million -- lead $X.X cash you losing more get to interworking that position? increase have net you is and to have total way it are? that you That's is

Douglas Schirle

a noncash Well, don't of forget expenses that there amount in significant is your P&L.

stock-based Your over $X and running year. compensation is Depreciation other million probably us million amortization is a $X.X year. a about

GAAP, of equipment. charges comp, use required of and depreciation on not whereas So buying we are obviously, noncash lot the all a any Stock-based we're spending based actual cash haven't That isn't. We the expenses. money those typically is there. been have

of We haven't long for soft lot a time. for anything a bought

is we thing that for charge quarter, significantly pay incurred other obligated this not loss that that, influenced for upfront. that $X.X The we're to the it's million but quarter, the

end significant there's of and part accrued So a fairly the of that quarter. liabilities at the

the look You'll out what's to sheet happening in cash. at figure the to sheet, have balance with balance changes

Unidentified Analyst

any looking out, ahead out, marketplace? as inventory investment months do year a make into out could to you how get board number have have into and you on six to going then this you're us an development give and much that the in to And

Douglas Schirle

Yes.

not the that significant between from have plus somewhere incurred. or see we're that R&D. think significant will is increase right million all, current In mass that start charges recognitions Once now on the would point. of $X the already there generating million in thing minus SG&A and significant have debts expenses be all most charge Gemini we we $X go there's selling a R&D, in years. up little development, on two no increase in be But in There'll for working I charges chip The at going in incurred terms we've been much. Certainly, we pay. to these of this products, next bit big see to we're sales for

Didier Lasserre

says one, So too. talking when current he's Gemini Doug the the next-generation about

Unidentified Analyst

Yes, okay.

Douglas Schirle

Yes.

And much see over just don't them don't a with strategy bit foresee We meeting X time the spending next point. cash really increases we So the for with draw point. at of APU on at this year other going or near-term quite the big I a see products. a very We this board don't significant the day, in we our changing. had spent over

Operator

the additional would since And questions time, no we Mr. session. this closing remarks. or Shu I question-and-answer any to turn at for concludes have further back this to over like today's call

Lee-Lean Shu

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

Operator

that does Thank conclude for again, Once you participation. conference. today's your

You may now disconnect phone your lines.

GSI Technology (GSIT) 30 Jan 202020 Q3 Earnings call transcript