Sign in

You're signed outSign in or to get full access.

GT

GSI TECHNOLOGY INC (GSIT)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY2026 revenue was $6.28M (+35% y/y, +7% q/q) and gross margin was 58.1% (up ~1,180 bps y/y and +200 bps q/q), the highest in over two years; diluted EPS was $(0.08) vs $0.04 a year ago (year-ago benefited from a $5.7M gain) .
  • Management guided Q2 FY2026 revenue to $5.9–$6.7M and gross margin to 56–58%; supply chain capacity shifts to Taiwan are extending lead times and may delay some backlog shipments into future quarters .
  • Product milestones: Gemini‑II “second silicon” is fully functional and production‑ready; Leda‑2 board delivered to an offshore defense customer; multi‑modal edge LLM benchmarks targeted by fall 2025—potential catalysts for edge‑AI narrative and defense opportunities .
  • Customer mix shifted: Cadence Design Systems contributed $1.5M (23.9% of revenue) while KYEC fell to 4.3% from 29.5% in Q4; SigmaQuad mix increased to 62.5% of shipments, supporting gross margin gains .
  • Wall Street consensus (S&P Global) for Q1 FY2026 EPS/Revenue was unavailable; estimate beat/miss determination not possible. S&P Global estimates unavailable disclosure applies below.*

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded to 58.1% (vs. 56.1% in Q4 and 46.3% y/y) on favorable mix and scale, marking the largest gross margin in over two years .
  • Strong SRAM momentum with three consecutive quarters of rising SRAM sales; Q1 revenue up 35% y/y and 7% q/q, aided by AI processor market demand and a $1.5M contribution from Cadence emulation systems .
  • Strategic/tech progress: “We have completed the evaluation of the second spin of our Gemini‑II chip, successfully resolving all known bugs, and confirming the chip is production‑ready” and “developing a multi‑modal LLM... benchmark results by fall 2025” .

What Went Wrong

  • Supply chain constraints: sudden lead-time extensions tied to assembly shifts to Taiwan are delaying backlog shipments in Q2 (and possibly into next quarter) despite typical ordering patterns .
  • Customer concentration volatility: KYEC contribution dropped to $267K (4.3%) from $1.7M (29.5%) in Q4; Nokia fell to $536K (8.5%) from 21.4% a year ago, highlighting exposure to a few large accounts .
  • Continued losses despite margin gains: operating loss $(2.18)M and net loss $(2.22)M (vs. Q4 net loss $(2.23)M); YoY compares complicated by a $5.7M gain in Q1 FY2025 .

Financial Results

Income Statement Highlights

MetricQ3 FY2025Q4 FY2025Q1 FY2026
Revenue ($M)$5.41 $5.88 $6.28
Gross Margin (%)54.0% 56.1% 58.1%
Operating Expenses ($M)$6.98 $5.58 $5.83
Operating Income (Loss) ($M)$(4.06) $(2.28) $(2.18)
Net Income (Loss) ($M)$(4.03) $(2.23) $(2.22)
Diluted EPS ($)$(0.16) $(0.09) $(0.08)

Notes: Q1 FY2025 included a one-time $5.7M gain from a sale/leaseback, distorting YoY EPS comparison .

Q1 FY2026 vs Wall Street Consensus

  • Revenue: Not available*
  • EPS: Not available*
  • Comment: S&P Global consensus data for Q1 FY2026 was unavailable; no beat/miss determination possible.*

Mix and Customer/End-Market KPIs

KPIQ3 FY2025Q4 FY2025Q1 FY2026
Military/Defense Shipments (% of shipments)30.0% 30.7% 19.1%
SigmaQuad Shipments (% of shipments)39.1% 39.3% 62.5%
KYEC Sales ($K)—$1,700 (29.5%) $267 (4.3%)
Nokia Sales ($K)$239 (4.4%) $444 (7.5%) $536 (8.5%)
Cadence Design Systems Sales ($K)—$642 (10.9%) (referenced in Q1 PR prior quarter)$1,500 (23.9%)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
RevenueQ1 FY2026$5.5–$6.3M (guided on 5/1/25) $6.28M actual Delivered at high end
Gross MarginQ1 FY2026~56%–58% (guided on 5/1/25) 58.1% actual Delivered at high end
RevenueQ2 FY2026N/A$5.9–$6.7M New guidance
Gross MarginQ2 FY2026N/A~56%–58% New guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY2025)Previous Mentions (Q4 FY2025)Current Period (Q1 FY2026)Trend
AI/APU roadmap (Gemini‑II, Plato)Gemini‑II on track for Feb tape‑out; availability in May; aligned with SDA SBIR Production‑ready Gemini‑II chips and Leda‑2 boards expected by end of Q1 FY2026; Plato enhanced with integrated camera interface Gemini‑II second silicon production‑ready; Leda‑2 board delivered to offshore defense customer; multi‑modal edge LLM benchmarks by fall 2025 Execution milestones progressing; narrative strengthening
Supply chain/lead timesNot highlightedNot highlightedLead times extended due to shift of assembly to Taiwan from China; impacts near‑term shippability of backlog Emerging headwind in near term
End‑market demand (SRAM)Strengthening core SRAM; orders rebound; key AI manufacturing customer Legacy SRAM demand strong; lower cash burn Third straight quarter of rising SRAM sales; Cadence emulation demand notable Sustained demand tailwind
Defense & Gov’t (SBIR)SDA/AFRL milestones; Gemini‑II alignment Continued SBIR support offsetting R&D; defense rad‑hard SRAM initial order Leda‑2 delivered to offshore defense contractor; algorithms (SAR/YOLO) optimized for low‑power edge Active engagements; productization for edge
Capital & liquidity—ATM provides flexibility; ended Q4 with $13.4M cash ~$11M raised via ATM to date; ended Q1 with $22.7M cash Liquidity improved; optionality for APU spend
Tariffs/macro——U.S. tariffs prompting China→Taiwan assembly moves, tightening Taiwan capacity Macro friction impacting supply chain

Management Commentary

  • “We have completed the evaluation of the second spin of our Gemini‑II chip, successfully resolving all known bugs, and confirming the chip is production‑ready.”
  • “We are developing a multi‑modal LLM optimized for edge applications and expect to share benchmark results by fall 2025.”
  • “We have experienced our third consecutive quarter of rising SRAM sales, driven by the growth with the enterprise adoption of AI… and hyperscalers.”
  • “Our near‑term priorities include funding the extension of our software and application teams and advancing the development of the platform required to support future customer development, deployment of Gemini‑II… the ATM facility has provided valuable flexibility, allowing us to raise $11 million to date, net of fees.”

Q&A Highlights

  • Supply chain dynamics: Management cited U.S. tariff actions pushing assembly from China to Taiwan, causing sudden lead‑time extensions and delaying otherwise shippable backlog in Q2 (and potentially into next quarter); customers are being encouraged to place orders earlier to adjust to new lead times .
  • Demand composition: KYEC softness tied to inventory and lead‑time shifts; Cadence demand stemmed from emulation systems supporting front‑end AI chip design (indirect AI exposure) .
  • ATM usage: Trading window typically opens two days after the earnings call and closes on the 15th of the last month of the quarter; company may draw opportunistically .

Estimates Context

  • S&P Global consensus estimates for Q1 FY2026 EPS and revenue were unavailable; therefore, we cannot assess beat/miss vs. consensus for the quarter.*
  • Company guidance for Q2 FY2026 (revenue $5.9–$6.7M; GM 56–58%) frames near‑term expectations amid supply chain constraints .
  • Where estimate comparisons are critical for positioning, we recommend monitoring for newly available coverage or using company guidance as a proxy for the next quarter.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mix‑driven margin expansion: 58.1% GM and higher SigmaQuad mix indicate improved pricing/mix quality; sustained gross margin above mid‑50s would support operating leverage as revenue scales .
  • Near‑term supply chain risk: Taiwan capacity constraints are stretching lead times, pushing some revenue from Q2 into subsequent quarters; track distributor/backlog updates for timing of conversions .
  • Strategic catalysts: Gemini‑II production‑ready status and targeted edge‑LLM benchmarks by fall 2025 could elevate investor focus on the APU narrative and expand defense/edge opportunities .
  • Customer exposure: Rotation from KYEC to Cadence (emulation) and Nokia shifts highlight concentration and volatility; monitoring customer breadth and repeatability is key to de‑risking revenue .
  • Liquidity and funding flexibility: Cash rose to $22.7M (ATM proceeds), providing runway to expand software/application teams for Gemini‑II/Plato; additional ATM draws remain an option depending on market conditions .
  • Q2 setup: Guidance of $5.9–$6.7M revenue and 56–58% GM reflects supply chain timing risk rather than demand; any signs of lead‑time normalization could underpin upside to the upper end of the range .
  • Medium‑term thesis: If APU software stack and benchmarks validate low‑power edge AI advantages and defense interest converts to orders, GSIT could transition from legacy SRAM to higher‑value AI accelerators, improving growth and margin trajectory .

Appendix: Additional Financial Detail

  • Balance sheet highlights (Q1 FY2026): Cash & equivalents $22.7M; working capital $25.7M; stockholders’ equity $37.4M .
  • Operating expense mix (Q1 FY2026): R&D $3.10M; SG&A $2.73M; total opex $5.83M; stock‑based comp $0.34M .
  • Guidance reiteration (Q2 FY2026): Revenue $5.9–$6.7M; GM 56–58% .