- Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's Second Quarter Fiscal 2023 Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] Before we begin today's call, the company has requested that I read the following Safe Harbor statement. that this and may GSI those the involve and in regarding forward-looking Technology anticipated. discussed results risks events actual future future uncertainties matters conference materially include call statements that to The differ cause from could performance of the These with are XX-K uncertainties Commission. Exchange and in the and risks Form company's described filed Securities

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

Lee-Lean Shu

afternoon, our review guidance $X.X in year growth us primarily XX% by to thank the second results. due of range. was you second in nearly high-performance quarter XXXX quarter Good for Revenue quarter. joining of radiation-hardened of our financial the fiscal the midpoint shipment sales and of year-over-year SRAMs the XXXX to SRAM Revenue and grew million, increased fiscal to

million. by As loss for led the XX.X%. flat a operating for quarter. Net our to loss the $X.X XXX gross expense a margin, second along basis rose narrowed result, points to year-over-year gross year-over-year margin Higher with lower to operating quarter

GSI Technology's was well XX, balance, $XX.X XXXX, as investments as and of As long-term equivalents includes and September cash which cash short cash million.

near-term right our of now the APU. team focused primarily Gemini-I, markets number with the in but a have items for We on developing two is file

vector Synthetic is or optimized and the is data acceleration; applications. fast processing SAR, first image neural Radar big for search second Aperture or The

of two use GSI Elta, will our APU our system customers. of superiority been announced a approved Let for image formation Israeli Aerospace image low scalability; attractive markets me At Aperture view of showcase is end we by make a for Synthetic was you with acceleration APU using why solution the prioritized. of future power opportunities GSI's that system to that September, Industries. consumption; open It the one, have acceleration features Radar very the these SAR understand help processing subsidiary and our The technological two, and three, are: processing accelerating SAR new image in portability. chance

on capability together respect to performance with boards links. The scalable architecture and to servers First, processes. and without APU The scalability. to near servers stack allows bring real-time added the has to platform expanding redundancy compute-intensive specialized capability for multiple APU time-consuming,

in market targets. prospective on for where with from a data GSI's well SAR And consumption, second our XXX at with XXX fewer The APU used, be CPU Second, demonstrated to range elaborate existing the process an power market follow. system, will a or installed as in and respect SAR SAR enough go-to-market the have platforms require or respect than SAR quadcopters uses on lower on both less of one is of to can as tenth meters CPU to the number and large using high-resolution to we of solution support area, scenarios. servers. Didier deployment. GPU relationships image significantly homes. has XX% making small portability, GPU satellite systems application power That strategy GSI one with kilometers comments UAVs average attractive third, his servers to broad than it center in

all can those and hybrid customers which in processing neural storage have search or will on-prem FVS who be by The that I supports cloud. and our refer vector to cloud are product the product, users. as fast plugin on-prem, a and Our hybrid FVS used may

to We trials. the customers, more we front and is each end year cloud-based teams specific due database. a These database billion organizations, scaling Searchium's for are consumption used XX to our users for very loss their large have searching search users for and the must lower create currently are the search. and Google is for available search term small in to to evaluating lower The data the market. completely capability developing business. compared business do pursuing primarily estimated For market products product scientists end they in combined U.S. about traditional Searchium.ai is exploring still platform. in the for hardware website platforms meaning operating of The work the and opportunity have for complex large a than footprint be power We with large has a the on compelling abandonment $XXX FVS FVS alone. live features

text [indiscernible] vector are simple hardware existing a Approximate Gemini-I's k-NN technology. less in and We Elasticsearch and Nearest search search. platforms is beyond or as Neighbor The Gemini-I performance the adding This and spot search than sweet in for such rather with accelerator OpenSearch providing the capability. application similarity plugin capability accelerate more the traditional for using that computation lower expands and power search IT an just

or ready are on-prem customers prior purchase recovery. committing product customer supporting FVS Searchium.ai to our or their for production hybrid We try solutions. to allow workloads

the We utilize OpenSearch full also support cloud-based customers database.

attract now opportunities. more and working Searchium.ai visitors than are launched XXX with a and dozen have We

for large plugins search database. have will We

FVS we With market, confident to calendar XXXX. me these We for source hybrid alpha the let for Currently, can released copperhead an give application from grow the update revenue few library we quarters. Last, the internal we and is APU over compiler this used that on-prem, and cloud, products the potential stack. [copperhead], version for users, stack alpha is APU customer in see on mode are still in three [indiscernible] first exclusively next of the migrate compiler and plan to development. full co-development

outcome. we are use yield fast in time efficient operation originally of We are be a a the beta than have generations. better calendar tool the We expect time but is end compiler for for and line to we this the broadly release year It and the development targeting [indiscernible] an anticipated, believe available year. longer additional building will

who hand over will will our to Please Didier, performance further. call I ahead, business the Now Didier. go discuss

Didier Lasserre

In Lee-Lean. was U.S. chips one-off a order follow-on quarter, this at contractor use we This not prime in customer you, to time. new who program. for the shipped and prototyping we the a Thank sale, them a visibility second Rad-Hard have do from this

the prototypes XXXX few moved if XXXX the could recent production, to and shipped However, a to revenues. years incrementally add of it fiscal we've

an the earlier, for papers POC with finalized and demo. marketing SAR IAI/Elta, finalized we As have customers, online needed Lean mentioned have we benchmarking, technical all and sales materials the [indiscernible] including

resolution launching a We early to market. and Gemini-I, with campaign flexible stages solution engage large be is variety wide extremely of small leading deployed the this a in altitudes, range we using of use cases. have satellites. be a the now a Typically, developing aggressively drones but can are or image Also very SAR can store solution the due support but Gemini-I that great specific in for to are sizes. of market small and players applications can It's our the footprint,

application. successfully we are base a build this with As customer we a can confident result,

call quarter second of and confident previous fulfill of XX.X% defense XX.X% same of in compared revenues a fiscal quarter the shipments prior second breakdowns million hand XX.X% XX.X% have that or hand year-ago Let prior quarter. the customers compared the Military the were the sufficient go shipments of me in quarter. like in of million million of second for ahead, or XX.X% net the of second customer the shipments SRAM to revenues please. and in switch quarter the we to of in for XX.X% sales I'd or XX.X% $X.X and capacity and In the $X.X we for product to to SigmaQuad upcoming that were sales and period to XXXX quarters to to $XX.X $X.X We net over demand. remain a the of Doug, fiscal to compared we can Nokia now shipments XXXX, Doug. sales were quarter. million have revenues period meet year-ago in XX.X% quarter the in orders the second quarter. comparable our

Douglas Schirle

Total Gross you, of and for XX.X% or net of share for margin the compared quarter. $X.X net quarter. Thank XX, in compared expenses million $X.X changes to prior the $X.X of of million for of margin in for share to quarter three fiscal $X.X $X.X in fiscal were XXXX and quarter XXXX. $X.X million and loss XXXX the loss We gross quarter. diluted the to or previous on operating the XX.X% was loss quarter in and year general to the year preceding million the $X.XX Didier. net were in in of $X.XX to were share diluted quarter million second a and million XXXX of due XXXX, first mix million quarter prior net in compared XXXX per the second $X.X compared in $X.XX the $X.X $X.X from quarter. September were of primarily $X.X revenues million period The year Development per $X.X compared fiscal of million in million prior Research a to $X Selling, and fiscal million quarter second million net product period expenses XX.X% and in fiscal $X.X the of the first expenses revenues or million net a of reported the revenues prior changes $X ended million to the administrative second prior $X.X sold per diluted million on quarter in periods. the

million prior operating $X.X $X.X XXXX fiscal compared year million quarter in loss Second period the in to million prior was and $X.X quarter. the

XX, September XX, XX, the million compared million as XXXX. million as cash, on and cash, $XX.X with no $XXX,XXX cash million XXXX, XXXX, in March XX, quarter, equity and of XXXX long-term a interest investments interest and and a a a fiscal in tax compensation In stock-based tax provision comparable other $XX,XXX, the Total $XX,XXX of expense expense to net of other preceding fiscal $X,XXX quarter to cash million debt. to in a the XXXX. of and $XX.X as was investments year-ago. $XX of Working company to included and the $XXX,XXX loss year pretax quarter XXXX, March and was compared tax in at for million XX, Stockholders' investments versus compared provision expense prior period of short-term long-term the $XX,XXX. September of had capital same of net $XX.X $XX,XXX net Second quarter million expense the $XXX,XXX first of other and provision and and March compared XXXX, $XX,XXX year-ago of quarter. in XX, equivalents interest short-term was $XX.X $X.X equivalents $XX.X $XXX,XXX income investments September loss second net ended included At

remain cover Given our we further sufficient in opportunities have approach to breakeven. the R&D also at other additional be AP sheet current cash on funds burn, we to that confident assets monetize our should looking balance We're as we cash needed. platform

Given million to expectations $X.X current are we current for XX%. in open the environment, to $X.X approximately million at margin net third will revenues global the of of this call XX% the quarter economic gross Operator, the point, Q&A. range our upcoming with to

Operator

be a will comes Instructions] we Mike proceed with Our Management. session. time conduction from this Capital first Mork question your Mork [Operator question. Please question-and-answer with At

Michael Mork

that at to you you with going of down, million? to come your $XX do is seems on you're that. a million, get $XX to My going go break-even are million are million up to think some [indiscernible]. Hi, $XX spending out point? hopefully, And And keep going exceptionally $XX will at when high. be revenues? you're it that But obviously, question it's Or but going is good that R&D you products revenues

Lee-Lean Shu

talk quarter, going. we the in and [indiscernible] we keep Yes, next but want looking I into are it, but the we think and will we will about to it product

reviewing. are we So

Didier Lasserre

are still there? you Mike,

Michael Mork

I'm Yes, here.

Didier Lasserre

Yes.

the response there'll was the call. be an it will will over and we announcement quarter, be that costs be next the some by Sorry, R&D reviewing of – this kind

Michael Mork

have you one, out as Okay. two how Do any years what? about or breakeven? And guesstimate

Douglas Schirle

so. will on APU and or shipping break revenues, breakeven margins. what We Rad-Hard a revenue all profitability. And – we that very high couple gross in years start both see the and could have really It from to lead depends they once of even we

Michael Mork

thank Okay. Well you.

Douglas Schirle

Thanks, Mike.

Operator

Our Please question proceed from your with Gabeni]. question. comes next [Luke

Unidentified Analyst

Elta Question call. about deal. the the [Indiscernible] Hi.

confirmation. that. You the went guess, I also for got all well testing

into line time platform? revenue. And through you'll initial the for what other a wondering the if the for So expanding then have clients is SAR roadmap Elta

Didier Lasserre

question. Great

the delivered and initial And the we to they're POC system, them the So through going their summertime. system trials in now. testing

in of that the they about cases, I are two which first looking they're script. XXXX. calendar systems more half possibly slightly many because so And slightly talked different different at And in say my ordering have use I'd

SARs, far As other absolutely. as

slightly will going usable sure I press different have line all a meat we available I'm SAR to sure, in what much to put but they're them. before of be make And Elta done as So certainly have other we everything approach. on manufacturers. for wanted everything now. too had mentioned, we we've hardcore the We for

done, I that We've CPUs as done is all benchmarking so GPUs. the all collateral. And the and mentioned, versus

all a have to so they images, sets, technical We then Searchium we data actually I data collateral, see sets added can customers of run recently, the demo on our our data website data. very how works. run shouldn't all SAR a the – And set say that our preloaded it allows

and already are gotten the meetings now. actually customers we've And have now. up to outreach setting done already all that's so and these have responses And started

to very this yes, is So going quickly. start happening

Unidentified Analyst

other to you that Do Wondering somebody else? SAR different $X.X kind if kind $X market multiple upgrade are you thinking – any search would know of insight excellent. the looking timeline the due heterogeneous. said market, about More out maybe you that date of into about there probably billion? with to are you of the maybe about think SAR systems have turnover when That's of about be SAR the quick are about applications and legacy or total a those billion with and the

Didier Lasserre

Yes. Yes.

mentioned flexible So we a I system. when have

– on did satellite. It a solution put So can a on quadcopter. it the POC put these could we put our

have image sizes by from can a to kilometer XXk XXk You different images.

on what so can yes, flexible that's we very And do.

with So – deal size. going specific going to we're altitude one want of one most to image folks the with are very one is specific

compared so that's which very simpler And with Elta, little why with forward to we did – the to POC. with guys what it's was going the what hoping be going we're broad a widespread POC that's a –

Unidentified Analyst

that you'll the – Okay. of SAR That's that. Do any possibly to rough you satisfies have you of good of think estimate work you percentage or got that you do able market address? be kind could all what

Didier Lasserre

it We the for a have call. should feel next by better

the As up outreach we have started I done setting we've meetings. and very hardcore recently, mentioned, the

make And data. so it's by much to that right early have next assessment. But now more for should we me call, the

Unidentified Analyst

broad that seems Gemini-I? general increase the like Okay. is about for question, Kind remind prospective kind of of not it will a – you testing clients whether but or of now? it to Gemini-I Gemini-II – a is vastly representing like question me of and the Or broad are Gemini customers performance sufficiently power of

Lee-Lean Shu

Gemini-II [indiscernible]. will a we are maybe important – Gemini-I But performance looking okay? performance improvement. on we has of – an [FPGA order and is more magnitude board] present, be at drastic Gemini-II improve, So the drastically at

Gemini-I. it's So from the view, about of a of one point Gemini-II cost over cost quarter

Gemini-II So, footprint of if you than and lesser Gemini-I. combine cost the because the and performance performance and also the is much the cost,

about now, and the are go power, can performance, the at we application. into improvement Gemini-II, magnitude AG right cost, with look application. the But more limited And footprint, over we order AG on we involve Gemini-I. you heavily Gemini-I, or if than the So very are talking

that's exciting So are Gemini-II, the excited a of and it. about very prospect very we

Unidentified Analyst

seems Excellent. into possible Yes. that very of look have you with currently, into And seems is like building they all software-as-a-service platform. would this was that all a the profit able clients give this and what's you're to setting – represent other can making you it potentially have then and yes, are are the And can platforms higher question, higher extrapolate performance. Gemini-I [Muves] which of it's taste are And you powering and now margin the perspective start leads sure up all partnering the and Gemini I the platform. lower those like you It so strength partnerships all using that at to the you Elta?

Didier Lasserre

Yes, absolutely.

Unidentified Analyst

of kind was loud. thinking out the That question and

the going with anything is get relationship the video have but what is of And Okay. and didn't background the Muves? share on essence it? about to in what a I clear do your you saw the I website, Great. on all

Didier Lasserre

Relationship with who?

Unidentified Analyst

[Indiscernible] With Muves.

Didier Lasserre

Yes.

Okay.

that's, now, So to you're yes, yes. multi-mill the video, referring video the is right

able be started of that that is looking we'll to types demo with that to been we to or as But summertime, and well. them. kind program of in And And very first have was do the that doing the some in go said, that. worked you certainly project, with expand and kind we a we're So And say, applications yes, expand first I interesting with among plan work relationship. that them. to – it should the like we of solution, product was other

Unidentified Analyst

Excellent.

Operator

next Our question. your from [James Please proceed with question Poko]. is

Unidentified Analyst

Thanks in regarding believe that the had now? today. a due for software Shu what I Mr. is talked taking to Hi. was pushed date couple my and I July out questions of that about questions what

Lee-Lean Shu

Are you referring to the compiler?

Unidentified Analyst

Yes, copperhead. Yes.

Lee-Lean Shu

so early availability. we to now, year, Right customers general plan the calendar Yes. the we promoted to beta next and the can year,

yes, are So to it close very now. we

Unidentified Analyst

Why reason good. in done now. us Okay. you to what's at didn't the early explain XXXX we now it July? going the guess, get year I calendar – it's happened? What's What Very on? in why Could

Didier Lasserre

now. actually So used it being right is

it's So used internally. being

that developing are on algorithms So or used copperhead. all of now being converting our we're

internally, to the was bug-free is to we beyond customers. it alpha just few make we there it being do before group. wanted and have that – ready was – a We and was So sure documentation we used that all just it released

now. public to yet. now. is general it answer released It's the used So It's being here the is just not

Unidentified Analyst

not That's said, through of you right he cash. unlimited. And are million. lot $XX a it's As burning caller first at guys the now, said,

incremental when Could prototypes tell likely How is how generating what this you cash and add XXXX. more I'm in me about XXXX that? know Rad-Hard flow. they You and could not sales we're more saying, especially

Didier Lasserre

have exact we've product the have So – shipped to about entities ordered the trying – and entities few a think number, of multiple about we already of I'm out programs. for different eight to them

they're all prototypes. so And

And so obviously, need the they to parts. take

are actually Some to of launched. them be going

obviously year. of we would have of last launched end – first us the still of you year, year, satellite launched, some and which was is June time, completely of our were been our last this And given And shipped it be we in out at control. beginning If the that would recall, not heritage. the that Rad-Hard the told has at

so the real, then proof-of-concept once phase. they they these yet production when But it's that's the into don't and that prototyping – on we certainly some is do programs. go into production. that will of these those we anticipate that And And the visibility answer go the programs have certainly,

Unidentified Analyst

When? When?

Didier Lasserre

question. a good That's Again, it's...

Unidentified Analyst

Well, burning need need And we're income. We cash. through we more sales.

marketing a delays the sounds in We on piece, there's liquidation online have what share for or get actually the the we execution poor team. no below don't when thesis value. it at read at looks But which the and marketing by based it's have that's Stocks Usually, the levels like reason. APU, strategy said, SAR technology it's you about unique price development I management the of tremendous. trading by those

traction doesn't I area. or investors do the to excitement What in that we it, that not from there we looks don't point too. valuation about to be get have getting getting the the guess values. even this seem some APU it my the business, get we benefits recognize legacy liquidation So – We're can seem to it at any trading APU to like we're be is technology because maybe any of and like

Lee-Lean Shu

process the a coming it's new market. Yes, to

period, some of from go a – we to couple product the is generation. revenue take through. the curve does I And have design it's it we through time little But have to to new do the going do So learning years. that hopefully... and device the know taken been the

Unidentified Analyst

made the January of that of in a wrote One need recommendations least I I leadership to company. have We lead and about liquidation company largest at would now, to the believe who's better his like some we his Board, consider the implemented, any qualified stock he them any recommendation don't up. the at and haven't to XX, investor one, trading effort was other execute suggest to a like a speed on a have that thing recommending the need value. a to make institutional XXXX, action to been and Shu company comment we I letter Directors and new that. the highly Board basically taken Mr. for Right recommendations,

exciting don't thank think technology, I can the resources. that your out I little of right next We resource boost of And get need running time. especially we protect we But to some a sort for could because APU so it use very company happening. see to you now, are to the level. these

Didier Lasserre

James. Thanks,

Operator

George [Operator next comes question from your proceed Instructions] Our Gaspar. with Please question.

Unidentified Analyst

you the revenue from? this of the expectation where tell have that Could in Can product Where revenue? existing you now? lower the zero you're stream revenue coming to So you. what lower on Thank in line us lower in is quarter on going within commentary there? you are

Didier Lasserre

that Rad-Hard we So a the associated of we that they as go into with sale first was revenue fair shipped talked about. I And production. until a that one mentioned, prototype can amount one-off was

backlog did were us isn't quarter. we So the that certainly for customers some there buildup from and two programs that had significant this a for separate two was customers inventory that of also –

talked to position. So an gotten They healthy. them and just products we've have into inventory certainly the are

the areas, And so three that's and they significant. really were main

Unidentified Analyst

– net Well, quarter the revenue to into you're with market any case, in of actual see much apply what can't of be now, correct? very being or right you from kind the that there for looking this Gemini trying

Didier Lasserre

I'll Okay. have sure question I correct. make the

this asking any revenue if quarter, in has you're APU it? the if So

Unidentified Analyst

Correct. Correct.

Didier Lasserre

it revenue. has So minimal

that's them do trials. and two So shipping system their we for to do will we have a be to that customers

will really them It's for production future demo revenue. so to – minimal And systems they're for have it purposes. evaluate

Unidentified Analyst

see. I

calendar stream. is solid really Gemini-I on quarter of at And nominal. something of the next we're looking beyond streams, probably before then, the just second quarter, forward this that year course, in revenue there's develop of going can revenue outlook the terms more into and So like what

Didier Lasserre

had in when – have don't we've indication evaluations. exactly haven't we've they an that line systems their that. and hands – they're progress time because, had on would It's companies a multiple doing again, us beyond We given

to So It could year, second don't quarter little may take I longer. be – next a it say, know.

Unidentified Analyst

see. I

you're question, Can forward and between compare Okay. you it the think Gemini-I this your relative in for this on and just from you Gemini-II working little that and a that might do answer actual explain is Gemini-II, bit? until can of there they going could where you Gemini-I out differential now potential II, jumping testing customers purchases deter with Gemini-I? Or that

Didier Lasserre

Sure.

was this everything the is said. – The – FPGA going again, it and So power what comment of more But of performance was on the is going cost it the Gemini-I because form Gemini-II, what I the Gemini-I higher. higher, going to really FPGA. With we of do mean, to we're lacked to solution with it's that can? can the What sufficient. back that I for is – Gemini-I The Yes. now is Lee-Lean expand need Gemini-I. exceptional. mean FPGA and Gemini-II was us factor was using because Lee-Lean's actually higher. Edge. was LiDAboard don't on that help the

and So a was part. which very impossible, if application, solution with not Edge now Edge challenging our the

a Gemini-I applications was Gemini-II, just to we'll with for. address not be now so edge fit that And those good able

It's Edge we're the to market application with application. different So different it's the really should Gemini-II. address say, really. a trying I a

Unidentified Analyst

how you far quarter? the stock many Can And the with cased to as to last handle price compare in associated right. shares going down the so the how we – considering staff. that lastly, cost that? talking that quarterly being into on that's All issued staff structure as time. basis previous total And then what about quarter this the is are And point you are now, fact far a Okay. do with at

Douglas Schirle

And can for think the XXX,XXX quarter that And the you be recent quarter, wasn't most most estimation quarter, you got activity ago, only see to June the recent behold. can activity somewhat quarter, I several the the most you for typical might in the XX-Q, at the it what look It was – and should is shares. reasonable part, all there. that XX-K, a look the of future the also much. somewhat if Well, it's that

Unidentified Analyst

what where your you're a specifically, this the outlay last be Well, is issued the based on talking of fact for shares that more that about price versus were XXX,XXX lot price is Right. is with price will quarter, the does going it average the shares lower? that and suggest forward now that the in the

Douglas Schirle

No. We price. issue based on the the shares don't

price no We seniority on based have a of kind structure ran within typically on the so position to we on position. shares and that person number and shares. company The has bearing the of

Unidentified Analyst

Gotcha.

Okay. Thank Thanks you. for All that right. explanation.

Operator

Our your Chris question Mackay. from comes next proceed with Please question.

Unidentified Analyst

cash for share balance, Yes. taking expecting call. my Thanks. of light within the are Thanks In months? you a dilution possibly the XX next

Didier Lasserre

at Not shares? more this issuing anticipating we time. Are

Unidentified Analyst

Thanks. Okay.

Operator

session. we've over turn for And to Mr. end the like remarks. closing the call I the would back of question-and-answer now to gentlemen, reached and Shu Ladies

Lee-Lean Shu

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

Operator

today's conference. concludes This

this You Thank may disconnect your participation. your you for time. lines at

GSI Technology (GSIT) 30 Oct 222023 Q2 Earnings call transcript