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GSI TECHNOLOGY INC (GSIT)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $5.883M, up 14% YoY and 9% QoQ, with gross margin at 56.1% (vs. 51.6% YoY and 54.0% QoQ); net loss narrowed to $2.2M ($0.09 per share) on reduced operating expenses and SBIR offsets .
  • Customer mix improved: KYEC contributed $1.7M (29.5% of revenue) vs. $0.544M (10.6%) a year ago, while Nokia declined to 7.5% of revenue; SigmaQuad shipments were 39.3% and military/defense shipments 30.7% .
  • Management announced an initial high-margin radiation-hardened SRAM order from a North American prime contractor and progress on Gemini-II/Plato edge-AI programs; Q1 FY2026 guidance: revenue $5.5–$6.3M, GM 56–58% .
  • Street consensus (S&P Global) for Q4 FY2025 EPS and revenue was unavailable; the print landed in-line with prior Q4 guidance ranges for revenue and GM provided in January .

What Went Well and What Went Wrong

What Went Well

  • Secured initial order for radiation-hardened SRAM from a North American prime contractor; management expects follow-on orders and highlights materially higher gross margins vs. traditional SRAM .
  • Strong SRAM demand drove revenue growth; KYEC exposure rose to 29.5% of revenue, reflecting robust orders tied to AI chip manufacturing systems; gross margin expanded to 56.1% on mix and higher revenue .
  • APU roadmap execution on track: Gemini-II production-ready chips and Leda-2 boards targeted by end of Q1 FY2026; SBIR milestones with AFRL/SDA progressing, with deliveries of boards/cards and YOLO algorithms .

What Went Wrong

  • Ongoing customer concentration risk: KYEC at 29.5% and Nokia volatility (7.5% of revenue, down from 13.5% YoY); military/defense shipments softened YoY to 30.7% vs. 35.5% .
  • Strategic alternatives/funding remain unresolved; management is exploring options (sale of assets, funding, R&D support) with Needham, but “nothing specific to talk about” yet—cash used in operations for FY2025 was about $12.9M .
  • Prior-quarter gross margin was pressured by severance/mix; although Q4 recovered, the FY2025 GM fell to 49.4% vs. 54.3% in FY2024 on mix and fixed cost absorption, underscoring sensitivity to product mix .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Revenue ($USD Millions)$4.550 $5.414 $5.883
Gross Margin (%)38.6% 54.0% 56.1%
Operating Expenses ($USD Millions)$7.341 $6.978 $5.575
Operating Loss ($USD Millions)$(5.584) $(4.055) $(2.276)
Net Loss ($USD Millions)$(5.458) $(4.029) $(2.230)
Diluted EPS ($USD)$(0.21) $(0.16) $(0.09)

Year-over-Year (Q4 FY2024 vs Q4 FY2025)

MetricQ4 FY2024Q4 FY2025
Revenue ($USD Millions)$5.152 $5.883
Gross Margin (%)51.6% 56.1%
Operating Expenses ($USD Millions)$7.172 $5.575
Operating Loss ($USD Millions)$(4.514) $(2.276)
Net Loss ($USD Millions)$(4.321) $(2.230)
Diluted EPS ($USD)$(0.17) $(0.09)

Actuals vs Estimates

MetricQ4 FY2025 ActualQ4 FY2025 Consensus (S&P Global)
Revenue ($USD Millions)$5.883 N/A*
Primary EPS ($USD)$(0.09) N/A*

Values retrieved from S&P Global.*

Customer/Product Mix (Shipments/Concentration)

MetricQ4 FY2024Q3 FY2025Q4 FY2025
KYEC Sales ($USD Millions; % of Revenue)$0.544; 10.6% $1.200; 22.7% $1.700; 29.5%
Nokia Sales ($USD Millions; % of Revenue)$0.694; 13.5% $0.239; 4.4% $0.444; 7.5%
Military/Defense Shipments (% of Shipments)35.5% 30.0% 30.7%
SigmaQuad Shipments (% of Shipments)42.4% 39.1% 39.3%

KPIs

KPIQ2 FY2025Q3 FY2025Q4 FY2025
Cash & Cash Equivalents ($USD Millions)$18.356 $15.085 $13.434
Working Capital ($USD Millions)$21.1 $17.9 $16.4
Stockholders’ Equity ($USD Millions)$33.284 $29.933 $28.226
Pre-tax Stock-based Compensation ($USD Millions)$0.663 $0.429 $0.512
Cash Used in Operating Activities (FY) ($USD Millions)——$12.9 (FY2025)
CapEx (FY) ($USD Millions)——~$0.045 (FY2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Net RevenueQ4 FY2025$5.4–$6.2M $5.883M Met (within range)
Gross MarginQ4 FY202555%–57% 56.1% Met (within range)
Net RevenueQ1 FY2026N/A$5.5–$6.3M New
Gross MarginQ1 FY2026N/A56%–58% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
AI/technology initiatives (Gemini-II, Plato)Gemini-II milestones; software fixes for first spin; Plato introduced for edge LLM; SBIR contracts progressing Plato adds camera interface; partner interest rising; delivery of Leda-2 and Gemini-II boards/cards to AFRL/SDA; YOLO algorithms delivered Advancing; engagement broadening
Supply chain/tariffs/macroCustomers depleting inventories; SRAM orders expected to resume Tariff negotiations ongoing; demand expected to continue with timing variability Stable demand; timing risk
Product performance (SRAM)New SRAM design tied to AI chip manufacturing; revenue growth rebounding KYEC share up to 29.5%; YoY and QoQ revenue growth; margin expansion on mix Improving
R&D execution/SBIR fundingMeeting SBIR milestones; YOLO deliveries planned; offsets to R&D expenses $870k Q4 R&D reduction from SBIR; continued deliveries; funds offset Gemini-II R&D On track; de-risked
Strategic alternatives/fundingStrategic review underway with Needham Exploring sale/funding/R&D support; no specific outcomes yet Ongoing; no resolution

Management Commentary

  • “Our fourth quarter revenue increased 14% year-over-year and 9% sequentially to $5.9 million, reflecting strong demand for our legacy SRAM chips… significantly reduced net loss and lower cash burn for the quarter.” — Lee‑Lean Shu .
  • “We secured an initial order for our radiation-hardened SRAM… with follow-on orders expected in fiscal 2026… [this] carries a significantly higher gross margin than our traditional SRAM chips.” — Lee‑Lean Shu .
  • “We expect to receive production-ready Gemini-II chips and Leda-2 boards by the end of the first quarter of fiscal 2026… SBIR programs… remain on schedule. We delivered a server with a Leda-2 board to AFRL and will soon ship a Gemini-II card to SDA.” — Lee‑Lean Shu .
  • “Adding the integration of a camera interface directly into [Plato]… creates a compact, all-in-one… engine for edge devices… [well] suited for agents requiring object recognition.” — Lee‑Lean Shu .
  • “Q1 FY2026… net revenues… $5.5 million to $6.3 million, with gross margin of approximately 56% to 58%.” — Lee‑Lean Shu .

Q&A Highlights

  • TAM and positioning: Management has not yet published TAM; Gemini‑II targets search/HPC at the edge (e.g., SAR on drones/satellites), while Plato targets LLM inference at the edge with low power .
  • Demand mix: Early interest for Gemini‑II is mainly military/defense; both chip-level and board-level demand pathways exist; hyperscaler engagements are longer-cycle—company is focusing near term on edge deployments .
  • Funding/strategic alternatives: Management is pursuing broad options (sale of assets, company funding, R&D funding, product development support); no specific outcomes disclosed yet .
  • Cash/CapEx disclosure: FY2025 cash used in operating activities was about $12.9M; CapEx was ~$45k .

Estimates Context

  • S&P Global consensus for Q4 FY2025 EPS and revenue was unavailable; actual revenue and EPS were reported but no consensus values were returned by SPGI (S&P Global). Values retrieved from S&P Global.*

Where estimates may need to adjust:

  • Guidance implies stable revenue and gross margin into Q1 FY2026 ($5.5–$6.3M; 56–58%), underpinned by continued SRAM demand and improved mix—Street models should reflect sustained margin expansion vs. FY2025 trough and higher contribution from high-margin rad‑hard SRAM .

Key Takeaways for Investors

  • Near-term catalyst: Initial radiation-hardened SRAM order with materially higher gross margins and expected follow‑on orders in FY2026—positive for margin trajectory and cash burn reduction .
  • Mix-driven margin recovery: GM expanded to 56.1% on product mix and revenue growth; Q1 FY2026 GM guidance of 56–58% indicates maintenance of improvements—constructive for gross profit leverage .
  • Customer concentration risk: KYEC at 29.5% of Q4 revenue underscores concentration; any timing variability (tariffs, shipment schedules) could add quarterly volatility .
  • Funding overhang: Strategic alternatives remain open with no concrete outcomes; monitor liquidity and burn (FY2025 cash used ops ~$12.9M) against guidance and potential financing events .
  • APU roadmap advancing: Gemini‑II/Plato milestones and SBIR-funded work de‑risk execution and broaden edge‑AI addressable markets; partner engagement is increasing .
  • Earnings quality: FY2025 included non-recurring elements (sale‑leaseback gain, severance costs, SBIR offsets); Q4 results reflect cleaner trajectory with lower OpEx and margin normalization .
  • Trading setup: With guidance in-line and margin resilience, stock reactions likely hinge on incremental contract disclosures (rad‑hard SRAM follow‑ons), APU partnership announcements, and funding clarity—focus on newsflow cadence and customer updates .