Q2 2024 GSI Technology Inc Earnings Call
[music].
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, thank you for standing by.
Ladies and gentlemen, thank you for standing by.
Speaker 1: transcript
Speaker 1: Welcome to GSI Technology, second quarter fiscal 2024 results conference call. At this time, all participants are...
Welcome to GSI Technology's second quarter fiscal 'twenty 'twenty full results conference call.
At this time all participants are in a listen only mode.
Speaker 1: transcript
Speaker 1: Later, we will conduct a question and answer session. At that time, we will provide instructions for those interested in entering the queue for the Q&A.
Later, we will conduct a question and answer session at that time, we will provide instructions for those interested in entering the queue for the Q&A.
Speaker 1: transcript
Speaker 1: Before we begin today's call, the company has requested that I read the following safe Harbour Street.
Before we begin today's call. The company has requested that I read the following safe Harbor statement.
Speaker 1: transcript
Speaker 1: The matters discussed in this conference call may include forward-looking statements regarding future events and the future performance of GSI technology that involve risk and uncertainties that could cause actual results to differ materially from those anticipated.
The matters discussed in this conference call May include forward looking statements regarding future events and the future performance of GSI technology that involve risks and uncertainties that could cause actual results to differ materially from those anticipated.
Speaker 1: transcript
Speaker 1: These risks and uncertainties are described in the company's form 10K, filed with Securities and Exchange Commission.
These risks and uncertainties are described in the company's Form 10-K filed with Securities and Exchange Commission.
Speaker 1: transcript
Speaker 1: Additionally, I have also been asked to advise you that this conference call is being recorded today October 26th, 2023 at the request of GSI technology
Additionally, I have also been asked to advise you that this conference call is being recorded today.
So about 26th 2023.
That's called GSI technology.
Speaker 1: transcript
Speaker 1: Posting the call today is Li-Lin Hsu, the company's Chairman, President and Chief Executive Officer. With him are Douglas Shirl, Chief Financial Officer, and Didier Lazer, Vice President of Sales. I would now like to turn the conference over to Mr. Hsu.
Hosting the call today is Lee lean shoe, the company's chairman, President and Chief Executive Officer, though.
With him are Douglas Shaw, Chief Financial Officer.
And did you live there widespread evident all sales.
I would now like to turn the conference over to Mr. Shaw.
Please go ahead Sir.
Speaker 2: transcript
Speaker 2: afternoon and thank you for joining us to review our second quarter physical 2024 financial withdrawal.
Good afternoon.
And thank you for joining us to review, our second quarter physical 2024 major resolved.
Speaker 2: transcript
Speaker 2: I am pleased to share that we have achieved two significant milestones since we reported Q1 2020 for earnings.
I am pleased to share that we have achieved two significant milestones.
We do call. It Q1 2020 for earnings.
First was the successful launch of the Alpha version of our copper at the comparable suite.
Speaker 2: transcript
Speaker 2: First was the successful launch of the other version of our Copperhead Compiler Suite.
Awesome based tool.
Speaker 2: transcript
Speaker 2: that can harness the capabilities of the Gemini APU.
That can harness the capabilities of the Jimmy and the Apu.
Speaker 2: transcript
Speaker 2: We anticipate releasing the general release of the Coverhead compiler suite in early 2024.
We anticipate reducing the general release of the combo comparable suite.
2024.
Speaker 2: transcript
Speaker 2: A full production version will be available later in 2020.
Full production version will be available later in 2024.
Speaker 2: transcript
Speaker 2: Colony we have a fungus learning using and developing algorithms without compiling.
Clearly we have a congress used.
Using and developing arguably we saw comparable.
Speaker 2: transcript
Speaker 2: including SWAP, a consortium of university, and companies developing that generation technology for space.
Including sweat.
So I'm, hoping you would be close to peak and the companies do you feel this is Jim.
<unk> technology for space.
Speaker 2: transcript
Speaker 2: and academic research groups explored in the future of computing architecture.
And academic research group a quote.
In the future of computing architecture.
Speaker 2: transcript
Speaker 2: like MIT and University of California, reverse.
Like my T and the University of California Riverside.
The second milestone.
Speaker 2: transcript
Speaker 2: The second milestone was the completion of the Germanic two table, which were
But Jim and I to people.
Chris you are launched last week.
Speaker 2: transcript
Speaker 2: Earthly draw, we are on track to have the trip back in March and early that's calendar year as we have been back to begin sample in the device in the second half of 2024.
That's sort of resolved.
We have the true.
Malcolm <unk> executed in the U S.
To begin symbol, so I'm, putting the device in the second half of 2024.
We are cognizant human eye to Panama and the cost per month, you know power based on the pension.
Speaker 2: transcript
Speaker 2: We are targeting given our two partners and customers in low power data center extensions and enabling data center functions at age.
Pension.
Putting data center function and age.
Speaker 2: transcript
Speaker 2: in December of 8 application or events gelernt driver assistance and
Example, H application.
Defense driver assistance system.
And he.
In deliveries to them.
Speaker 2: transcript
Speaker 2: Autonomous Low Bus, Unmanned Aerial Vehicle, and the satellite.
Oklahoma most robust.
Okay cool.
Right.
Turning to our financial results for the second quarter.
Speaker 2: transcript
Speaker 2: Turning to our financial results for the second quarter, revenue of $5.7 million was at the high end of our guidance.
Oh $547 million.
Hi, all.
Speaker 2: transcript
Speaker 2: Also, it's worth noting that our second quarter physical year 2023 revenue was boosted by inventory bills with several key customers, which presents a challenging year, all due to Swamp Springs reservation
So if it wasn't voting all second quarter physical year 2023 revenue.
Boosted by inventory build.
We still will keep customers.
Which presents a challenging year over year compared with it.
Speaker 2: transcript
Speaker 2: In addition to advancing the table of GemIIni2, a significant area of recent focus has centered around our ongoing engagements with a key hyperscaler partner. I'm delighted to report that these discussions are making notable progress.
Even though dish into a defensive the table Jim on a cool.
The area of recent focus Chris Temple are.
Oh boy engagement with a key.
Hi, Bose Theater Congo, I'm delighted to report that these discussions are making notable progress.
Speaker 2: transcript
Speaker 2: to all constructive dialogue with this leading called computing provider, we have gained a valuable insight into the pre-size design specification required for Gemini 3 to align with the early quantum.
I'll come talk to your dialogue with decent eating called computing provider, we have screened invaluable insights.
The precise.
Vacation.
Forgive me I see go along with it.
Gift Collaborates either April that's enabled us to.
Speaker 2: transcript
Speaker 2: This collaborated with the A4, has enabled the Earth to chart a roadmap by identifying potential partners who can bring the essential financial engagement and engineering resources to the table for the successful development, manufacturing and the long-term.
Oh man.
Before I, even potential partners, who can bring the essential financial engagement.
And you don't need diesel to the table for the successful it could go.
Manufacturing and the launch of giving us.
Speaker 2: transcript
Speaker 2: the evolution will leverage the incorporation of high bandwidth memory into the APU architect.
The evolution will leverage the incorporation of high bandwidth memory into the Apu architecture.
Speaker 2: transcript
Speaker 2: thereby harness the full potential of in-memory compute for the vending.
Harness the full potential in memory computing for the vintage.
Speaker 2: transcript
Speaker 2: Now I will hand the call over to Didier, who will discuss our business performance further.
Now I will hand, the call over to Steve who will discuss all produced almost good.
Please go ahead.
Thank you Lee lean.
Speaker 3: transcript
Speaker 3: Thank you, Lileen. Following up on the projects I mentioned last quarter, throughout the second quarter of fiscal 2024, our team continued to pursue opportunities with Gemini One to advance our customer engagement.
Following up on the projects I mentioned last quarter throughout the second quarter of fiscal 'twenty 'twenty four our team continued to pursue opportunities with Gemini one to advance our customer engagements. Currently GSI has a fast Victor search plug in the available that allows cloud vector search users to seamlessly add apu.
Speaker 3: transcript
Speaker 3: Currently, GSI has a fast vector search plugin available that allows cloud vector search users to seamlessly add APU accelerated search to their major cloud-provided hosted workloads with minimal latency from GSI's hosted data center.
Accelerated search to their major cloud provided hosted workloads with minimal latency from GSI is hosted data centers.
Speaker 3: transcript
Speaker 3: This FVS plugin provides accelerated approximate nearest neighbor search response times, enabling access to a large enterprise service at low power that also meets price points for small and medium sized businesses. This will be opening up.
Yes.
DFS plug in provides accelerated approximate nearest neighbors search response times, enabling access to a large enterprise service at low power that also means price points for small and medium sized businesses.
This will be opening a larger markets for us.
Speaker 3: transcript
Speaker 3: switching to our SAR opportunities due to customer feedback. We have decided to launch our low powered, highly efficient SAR processing as a SaaS offering along with of course also the on-prem version. We are now engaging to bring that service to market. Moreover, we favorably completed benchmarking on a customer's data set.
Switching to our SAR opportunities due to customer feedback, we have decided to launch our low powered highly efficient SAR processing as a SaaS offering along with of course also the on Prem version, we are now engaging to bring that service to market. Moreover, we favorably completed.
Benchmarking on a customer's dataset.
Speaker 3: transcript
Speaker 3: One target we are engaged with is a startup building satellites that can provide computational capabilities on satellites in space has identified the Gemini APU as its preferred provider for computing solutions for space.
One target we are engaged with a startup building satellites that can provide computational capabilities on satellites and space has identified the Gemini Apu as its preferred provider for.
For computing solutions for space.
Speaker 3: transcript
Speaker 3: The big differentiator in addition to low power performance is a product's radiation tolerant feature.
The Big differentiator. In addition to low power performance is a product's radiation tolerant feature.
On that note, we will be conducting full radiation tolerant testing on Gemini one next month by this I mean, the full range of test required for customers considering using Gemini one in space.
Speaker 3: transcript
Speaker 3: On that note, we will be conducting full radiation tolerance testing on Gemini 1 next month. By this, I mean the full range of tests required for customers considering using Gemini 1 in space.
Speaker 3: transcript
Speaker 3: One of the applications for that radiation tolerant Gemini I1 would be ideally suited for SAR and ATR, which is automatic target recognition and computing in space to name a few.
One of the applications for that radiation tolerant Gemini one would be ideally suited for SAR and ATR, which is automatic target recognition and commute and excuse me computing and space to name a few.
Speaker 3: transcript
Speaker 3: This summer, we announced that GSI was awarded an SBIR to contract, I'm sorry, an SBIR contract to perform a feasibility study to adapt Gemini 2 to perform computing at the edge in collaboration with the U.S. Air Force and Space Force.
This summer, we announced that GSI was awarded an S. P I R to contract.
Sorry in SBR contract to perform a feasibility study to adapt Gemini two to perform computing at the edge in collaboration with the U S Air Force and Space Force. We are currently working on a second <unk> based on the Gemini two software development, which is very promising and potentially a similar financial award as the first win.
Speaker 3: transcript
Speaker 3: We are currently working on a second SBIR based on the Gemini 2 software development, which is very promising and potentially a similar financial award as the first win.
We continue to file more spi ours as they bring two key benefits number one source of revenue and they also create use cases within the U S government for future Apu opportunities.
Speaker 3: transcript
Speaker 3: We continue to file more SBIRs as they bring two key benefits. Number one, a source of revenue, and they also create use cases within the US government for future APU opportunities.
Speaker 3: transcript
Speaker 3: Let me switch now to customer and product breakdowns for the second quarter. In the second quarter of fiscal 2024, sales to Nokia were 1.2 million or 20.3% of net revenues compared to 1.2 million or 13.6% of net revenues in the same period a year ago and 1.9 million or 33.5% of net revenues in the prior quarter.
Let me switch now to customer and product breakdowns for the second quarter.
In the second quarter of fiscal 2024 sales to Nokia or $1 2 million or 23% of net revenues compared to $1 2 million or 13, 6% of net revenues in the same period a year ago.
And $1 9 million or 33, 5% of net revenues in the prior quarter.
Speaker 3: transcript
Speaker 3: Military defense sales were 34.8% of second quarter shipments compared to 22.4% of shipments in the comparable period a year ago. And 33.8% of shipments in the prior quarter.
Military defense sales were at 34, 8% of second quarter shipments compared to 22, 4% of shipments in the comparable year I'm, sorry comparable period, a year ago, and 33, 8% of shipments in the prior quarter.
Speaker 3: transcript
Speaker 3: Secret Quads sales were 55.8% of second quarter shipments compared to 58.1% in the second quarter of fiscal 2023 and 58.6%
Secret quite sales were 55, 8% of second quarter shipments compared to $58. One in the second quarter of fiscal 2023.
And $58 six in the prior quarter.
Speaker 3: transcript
Speaker 3: I would like now to hand the call over to Doug. So, let's go ahead Doug.
I would like now to hand, the call over to Doug go ahead, Doug.
Speaker 4: transcript
Speaker 4: Thank you, DDA. We reported the net loss of $4.1 million or 16 cents per deluded share on net revenues of $5.7 million for the second quarter fiscal 2024. Compared to a net loss of $3.2 million or 13 cents per deluded share on net revenues of $9 million for the second quarter fiscal 2023. And a net loss of $5.1 million for 21 cents per deluded share on net revenues of $5.6 million for the first quarter fiscal 24.
Thank you Didier we.
We reported a net loss of $4 $1 million or <unk> <unk> per diluted share on net revenues of $5 $7 million for the second quarter of fiscal 'twenty 'twenty four compared to a net loss of $3 $2 million or <unk> 13 cents per diluted share on net revenues of 9 billion for the second quarter of fiscal 2023.
Net loss of $5 1 billion for 'twenty, one cents per diluted share.
So $5 6 million for the first quarter of fiscal 'twenty four.
Speaker 4: transcript
Speaker 4: Gross margin was 54.7% compared to 62.6%.
Gross margin was 54, 7% compared to 62, 6% and.
Speaker 4: transcript
Speaker 4: in the prior year period, and 54.9% in the preceding first quarter. The changes in gross margin were primarily due to changes in product mix sold in the three periods.
In the prior year period, and 54, 9% in the preceding first quarter. The changes in gross margin were primarily due to changes in product mix sold from the three periods.
Speaker 4: transcript
Speaker 4: Total operating expenses in the second quarter of fiscal 2024 were $7.2 million compared to $8.8 million in the second quarter of fiscal 2023 and $8.2 million in the prior quarter.
Total operating expenses in the second quarter fiscal 2024 were $7 $2 million compared to $8 $8 million in the second quarter of fiscal 2023, and they put $200 from the prior quarter.
Speaker 4: transcript
Speaker 4: Research and development expenses were $4.7 million compared to $6.4 million in the prior year period and $5.2 million in the prior quarter.
Research and development expenses were $4.7 million compared to $6 $4 million from the prior year period.
$5 $2 million from the prior quarter.
Speaker 4: transcript
Speaker 4: Selling General and administrative expenses were $2.5 million in the quarter and its September 30, 2023 in order to $2.4 million in the prior year quarter and $3 million in the previous quarter.
Selling general and administrative expenses were $2 $5 million in the quarter ended September 32023, compared to $2 $4 million in the prior year quarter and $3 million the previous quarter.
Second quarter fiscal 2024 operating loss was four $1 million compared to $3 $2 million the prior year period, and $5 $1 billion from the prior quarter.
Speaker 4: transcript
Speaker 4: Second quarter fiscal 2024 operating loss was $4.1 million compared to $3.2 million in the prior year period and $5.1 million in the prior quarter.
Speaker 4: transcript
Second quarter fiscal 2024 net loss included interest and other income was $31000 and a tax provision of $33000.
Speaker 4: transcript
Speaker 4: compared to interest in other income net of $14,000 an attached version of $37,000 for the same period a year ago.
Compared to interest and other income of $14000 or tax provision of $37000 for the same period a year ago.
Speaker 4: transcript
Speaker 4: In the preceding first quarter, the net loss included interest and other income net of $80,000 and a tax provision of $51,000.
In the preceding first quarter net loss included interest and other income net of $80000.
Cash position of $51000.
Speaker 4: transcript
Speaker 4: Total second quarter pre-tax stock-based compensation expense was $676,000 compared to $661,000 in the comparable quarter a year ago and $820,000 in the prior quarter.
Total second quarter pretax stock based compensation expense was $676000.
Compared to $661000 in the comparable quarter, a year ago and $820000 in the prior quarter.
December through September 30 of 2023, the company had $25 $3 million in cash cash equivalents and short term investments.
Speaker 4: transcript
Speaker 4: September 30th, 2023, the company had $25.3 million in cash, cash equivalents, and short-term investments.
Speaker 4: transcript
Speaker 4: We paired a 30.6 million cash equivalents and Jorkeman investments marked 31st, 2023.
<unk> to 36 million cash cash equivalents and short term investments March 31 2023.
Speaker 4: transcript
Speaker 4: Working Capital was $28.8 million as a September 30, 2023, versus $34.7 million at March 31, 2023.
Working capital was $28 million.
September 30th 2023 versus $34 7 billion at March 31st 2023 with no debt.
Speaker 4: transcript
Speaker 4: Stockholder equity as of September 30th, 2023, is $45.4 million. It can bear the $51.4 million as of the fiscal year ended March 31st, 2023.
Stockholders' equity as of September 30th 2023 was $45 $4 million compared to $51 $4 million for the fiscal year ended March 31 2023.
Yes.
Speaker 4: transcript
Speaker 4: Given the current global economic environment, our current expectations for the upcoming third quarter are net revenues in the range of $5.4 million to $6.2 million, with gross margin of approximately 55% to 57%.
Given the current global economic environment, our current expectations for the upcoming third quarter, our net revenues from a range of $5 $4 million to $6 $2 million with gross margin of approximately 55% to 57%.
Speaker 4: transcript
Speaker 4: Operator, at this point, we'd like to open the call to Q&A.
Operator at this point, we'd like to open the call for Q&A.
Thank you.
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, we will now be conducting a question and answer session.
Ladies and gentlemen, we will now be conducting a question and answer session.
Speaker 1: transcript
Speaker 1: If you would like to ask a question, please press star and one on the telephone keypad. The confirmation tone will indicate your line is in the question queue.
If you would like to ask a question. Please press star and one on the telephone keypad a.
A confirmation tone will indicate your line is in the question queue.
Speaker 1: transcript
Speaker 1: You may press star and 2 if you would like to remove your question from the queue.
You May press star two if you'd like to remove your question from the queue.
Speaker 1: transcript
Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing this star.
All participants using speaker equipment, it may be necessary to pick up your handset before pressing the stock east.
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, one moment please while we pause for questions.
Ladies and gentlemen, one moment, please while we poll for questions.
Speaker 1: transcript
Speaker 1: Our first question comes from Brett Reyes with Janie Montgomery Scott. Please go ahead.
Our first question comes from Brett <unk> with Janney Montgomery Scott. Please go ahead.
Okay.
Speaker 5: transcript
Speaker 5: Yeah, hi, thanks for taking the question. You know, until corporate initiatives gain traction, how can you just comment on cash burn rates? How long do you think the cash will last without you having to do some sort of financing?
Yeah, Hi, thanks for taking.
Taking the question.
You know until corporate initiatives gain traction.
How can you just comment on cash burn rates, how long do you think the.
Cash will last without you having to.
Do some sort of financing.
Speaker 5: transcript
Speaker 5: Yeah, we've taken a look at that. We typically take a look at it every quarter, and if nothing improves, which we don't expect, we have cash that should last at least a couple of years at this point. And if I may just follow up, what do you think your burn will be, you know, for this following year? This year will be around.
Yeah, we've we've taken a look at that we typically take a look at it every quarter and if nothing improves which we don't expect we have cash and should last at least a couple of years at this point.
And if I may just follow up with what do you think you burn will be for this following a year.
This share will be around $13 million to $14 million.
Speaker 4: transcript
Speaker 4: Yeah, we have one kind of extraordinary expense coming up this fiscal year that requires about 2.4 million dollars cash outlay. And that's for the mask set for the Gemini II product that just taped out that we've previously mentioned today. That's a somewhat of a irregular occurrence. It only happens every few years.
Yeah, we have one kind of extraordinary expense coming up this fiscal year that.
Requires about $2 $4 million cash outlay and Thats for the mask set for the Gemini two product that just taped out but we've.
We've previously mentioned today that's.
Somewhat of an irregular curse it only happens every few years.
Okay. Thank you.
Thank you.
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, a reminder, if you wish to ask a question, please press star and 1.
Ladies and gentlemen, a reminder.
If you wish to ask a question. Please press star one.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Oren Hirschmann with AIGH Investment Partners. Please go ahead.
Our next question comes from the line of Orin Hirschman with H I G. H investment partners. Please go ahead.
Hi, how are you.
Speaker 6: transcript
Speaker 6: Can you get? Can you get? Good, thank God. Can you give us a little bit more color on, is the data center customer interested in Gemini 2 for any purpose, early Gemini 3? Have they played with Gemini 1 to understand them better? And what is attracting them to, you know, to the Gemini architecture?
Hey, George can you get.
Thank God can you can you give us a little bit more color.
None.
Is the data center customer interested in Gemini two for any purpose early Gemini three have they played with Gemini one to understand them better and what's what what is what is attracting them to.
So the Gemini architecture.
Sure and I have one follow up.
Speaker 3: transcript
Speaker 3: Okay, so let me start with that. So with the hyperscaler we're engaged with. And we've had one we've had ongoing discussions with and we've since opened up other discussions with other hyperscalers. Certainly as Veline mentioned in his earlier comments, the information we gathered from our first engagement was instrumental to be able to show our part story in our offering for future hyperscaled conversation.
Okay. So let me start with that so with the hyper scaler, we're engaged with them and we've had when we've had ongoing discussions with them since it opened up other discussions with other hyperscale.
Certainly as Lee Lean mentioned in his earlier comments the the information we gathered from our first engagement was instrumental to be able to sharp our story and our offering for future Hyperscale conversations and so they're they're interested right now is.
Speaker 3: transcript
Speaker 3: And so what they're interested right now is, is would be a next generation, specifically something we'll call Gemini 3 for now, because that one's gonna really be geared towards Gen AI or the LLM models.
It would be a next generation specifically something we'll call Gemini three for now because that was going to really be geared towards gen. AI are the L. M models with.
Speaker 3: transcript
Speaker 3: What that said is you know these hyperstilars are very large companies and so you know certainly Gemini 2 is Certainly not out of play with them. It's just wouldn't be the solution specifically for the Gen AI conversations we're having
That said as you know these hyperscale ours are very large companies and so you know certainly Gemini two is certainly not out of play with them. It's just wouldn't be the solution specifically for the Gen AI conversations we're having.
Yeah.
And in terms of other.
Speaker 6: transcript
Speaker 6: Hippercalers and data center customers, you know, tell them like there's some level of progress.
Hyperscale data center customers and it sounds like there's some level of progress.
Speaker 6: transcript
Speaker 6: you know, how would you characterize it? Have people played with benchmarks yet for any of them? That I think would be an important point to note, if it's true, if you've gotten that far.
No.
How would you characterize as if people played with benchmarks yet for any of them that I think would be an important point to note. It's true if you've gotten that far.
Speaker 3: transcript
Speaker 3: correct and so so what we've done is we've shown obviously the the technology with jim and i one because silicon is here software is here we can run through benchmarks we've uh... then obviously run expected benchmarks offer jim and i too
Correct and so so what we've done is we've shown obviously the the technology with Gemini one because.
Silicon is here software's here, we can run two benchmarks. We've then obviously run expected benchmark off of Gemini two.
Speaker 3: transcript
Speaker 3: And so, you know, going back, and I just remember what part of your earlier question was, was what, you know, what's interesting about our technology to them. So there's, you know, certainly a few areas. Obviously the performance is important to them. But the low power is solely grabbed their eye and also other features like the fact that we're a bit processor. This is very important to a lot of these folks because right now if they're using a GPU, they're really
So going back I, just remember what part of your earlier question was was what whats interesting about our technology to them. So there's certainly a few areas. Obviously the performance is as important to them.
The low power is selling grab there I and also other features like the fact that we're a bit processor. This is very important to a lot of these folks because right now if they are using a GPU there really.
Speaker 3: transcript
Speaker 3: locked into depending on the GPU 8-bit or 16-bit, 32-bit or 64-bit kind of traffic pattern.
<unk> locked into depending on the on the GPU eight bit or 16 bit 32 bit or 64 bit kind of traffic patterns.
Speaker 3: transcript
Speaker 3: We're a bit processor and so we don't we don't care what your traffic looks like. It can be 4 bit, it can be 64 bit, it can be make up a number of thousand bit and we can adapt to that on the fly and cycle the cycle and so that flexibility is also very important.
We're a big processor and so we don't we don't care, what your traffic looks like it can be four bit it can be 64 bit it can be make up a number of thousand bit.
We can adapt to that on the fly and cycle the cycle and so that flexibility is also very important to them.
Speaker 6: transcript
Speaker 6: In real life, there's been a lot of talk about a very old bit type of super processor in the literature. Obviously, no one's really had one commercially where it's programmable in that fashion. Are you programmable today in that fashion? Number one, number two is what are some of the applications where that becomes so enticing?
And in real life, you know theres been a lot of talk about a very old little bit type of Super processor.
In the literature.
No one's really.
No one's really has on commercially where it's programmable and that passion.
My goal today and that in that fashion number one number two is what are some of the applications where that becomes so enticing.
So you're talking about the bid processing.
Speaker 3: transcript
Speaker 3: Yeah. Yeah, so there's a lot of research going on right now. And...
Yeah Yeah.
Yeah. So there's a lot of research going on right now.
And.
Speaker 3: transcript
Speaker 3: you know they're finding out that some efficiencies aren't coming in like the you know the expected 16-bit and 32-bit. As I mentioned five bit was one that came up recently and candidly I don't remember the exact application or the research.
They're they're finding out some efficiencies are coming in like the the expected 16 bit and 32 bit as I mentioned five it was one that came up recently and candidly I don't remember the exact application or the research on that but <unk> was one of them that was important and so.
Speaker 3: transcript
Speaker 3: on that but five bit was one of them that was important and and so you know one of the benefits with the bit processing is that you know as our customers told us we're future proof and what I mean is
One of the benefits with this bit processing is that you know as our customers told us where future proof and what I mean is if there is an application that comes in that need five bit where there.
Speaker 3: transcript
Speaker 3: If there's an application that comes in that needs 5-bit, we're there.
Speaker 3: transcript
Speaker 3: If there's one that needs 128 bit, 256 bit, we're there. We don't have to redesign our part to be able to address those needs because of the fact that, you know, we have, you know, two million bit processors on our Gemini one, and they can work, as I mentioned, as one bit or make up a number between one and two million. And so we're future proof in that respect, which is obviously eye opening to them. Yeah.
Theres, one that needs 128 bit to 56 bit where there we don't have to redesign our part to be able to address those needs because of the fact that we have.
Unknown Attendee: Orin Hirschman, Douglas Schirle, GSI Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's second quarter of fiscal 2024 results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. At that time, we will provide instructions for those interested in entering the queue for the Q&A.
$2 million of processors on our Gemini one and they can work as I mentioned as one bid or makeup a number between one and $2 million and so we're future proofing that respect, which is which is obviously an eye opening to them.
Yes, just to just come in.
Speaker 2: transcript
Speaker 2: Right now, the GNAI, the large language model, is a very, very big model. It's a very, very memory-intensive application.
Right now the CMA I the larger language of motto is a freeway pig model used to the way the memory intensive applications.
Speaker 2: transcript
Speaker 2: So, they were did a very big memory, they were did a very fast memory. So, the effort, one of the effort is they try to reduce...
So a level of detail.
Namely newer database faster memory so.
If oh Wow, that's what you said you try they try to reduce the.
Speaker 2: transcript
Speaker 2: the data format. If you have less language or fit to calculate, then you can let memory you require less memory too.
The the data format.
That's what I'm going to be to calculate then you you do crowd less less memory, you quoted us memory tool.
Unknown Attendee: Before we begin today's call, the company has requested that I read the following safe harbor statement. The matters discussed in this call may include forward-looking statements regarding future events and the future performance of GSI technology that involves risk and uncertainties that could cause actual results to differ materially from those anticipated. These risk and uncertainties are described in the company's form 10K, filed with Securities and Exchange Commission.
Speaker 2: transcript
Speaker 2: Okay, so we have this big processing capability, which you know, you can just let it go, you know, five bits, four bits, three bit, two bit, we'll be there.
Okay. So so we have a decent food processing capability would you you know.
Can you imagine if IP focus.
We will be there.
And.
Speaker 2: transcript
Speaker 2: And the which this is, we have more capability to keep up with software innovation. And that's what, you know, some of the customers like us about this thing.
And and we still are.
We have more capability to keep up with the software or utilization and best of luck.
You know.
I'll start with the customer that goes on about this issue.
Speaker 6: transcript
Speaker 6: And just going back to benchmarking. Have you done benchmarking for some of the data center and
And just going back to benchmarking have you done benchmarking for some more some of the.
Unknown Attendee: Additionally, I have also been asked to advise you that this conference call is being recorded today, October 26, 2023, at the request of GSI Technology.
Data center and <unk>.
Scalar customers.
Speaker 3: transcript
Speaker 3: So, candidly, most of the benchmarking we've done have been based essentially off of POCs. Where customers have come in and said, this is what I'm using. Here's my data set, what do your numbers look like? And so we've done real life case POCs. We've done that for one of our Israeli customers that we talked about, and then also one of our recent SAR customers.
So candidly most of the benchmarking we've done have been based on essentially a P. O sees where customers have come in and said this is what I'm using here's my data set what are your numbers look like and so we've done real life case POC as we've done that.
Unknown Attendee: Posting the call today is Lee Lin Shu, the company's chairman, president and chief executive officer, with him, our Douglas Schirle, chief financial officer, and Didier Lasser, vice president of sales. I would now like to turn the conference over to Mr. Shu. Please go ahead, sir.
You know for one of our Israeli customers that we talked about and then also one of our recent SAR customers as far as broad market benchmarking. We do we haven't done a lot, but we know thats critical and Thats something thats on our agenda to start doing its just been a resource issue.
Speaker 3: transcript
Speaker 3: As far as broad market benchmarking, we haven't done a lot, but we know that's critical and that's something that's on our agenda to start doing. It's just been a resource issue for us to be able to make that happen, but we understand it's important and that's what we're next on the list.
Lee Lin Shu: Afternoon, and thank you for joining us to review our second quarter-physical 2024 financial results. I am pleased to share that we have achieved two significant milestones since we reported 2-1-2024 earnings. First was the successful launch of the other version of our Copperhead Compiler Suite, a Python-based tool that can harness the capabilities of the German APU. We anticipate reducing the general release of the Copperhead Compiler Suite in early 2024. The full production versions will be available later in 2024.
Q4 is to be able to make that happen, but we understand that's important and that's what we're you know next on the list.
Speaker 6: transcript
Speaker 6: and see two more questions as I may, and then a lot of the people ask. So in terms of...
Okay.
Let's see two more questions. If I may and then I'll, let other people ask so in terms of proof.
Speaker 6: transcript
Speaker 6: prove a concept using customer data. And then any of the high-press scalers given you data sets, the taxis show them what you can and can't do with it.
Proof of concept using customer data.
And they need the hyperscale lose giving your datasets to actually show them, what you can and can't do with it.
Speaker 3: transcript
Speaker 3: No, these are other applications. These have been SOAR applications and other applications. The hyperscalers know because as I mentioned, the discussions early on have been revolving around this next generation device. And so we've given them, we have given them benchmarking of what we anticipate we could do absolutely, but they're not true benchmarks. They're calculated benchmarking.
These are other applications. These have been SAR applications in.
Or are there other apps.
Lee Lin Shu: Currently, we have partners learning, using and developing algorithms without compilers, including SWAP, a consortium of universities, and companies developing that generation technology for space, and Academic Research Group, appalled in the future of computing architecture, like MIT and University of California, Riverside.
Applications the the Hyperscale, there's no because as I mentioned the discussions early on and have been revolving around this next generation device and so we we've given them, we haven't given them, giving them benchmarking of what we anticipate we can do absolutely, but they're not true benchmarks or there are calculated benchmarking.
Okay and last question just on the.
Speaker 6: transcript
Speaker 6: You mentioned, as sort of using the processor as a service for the people's data, and you had some early tests going back a while ago, and that needed to be revamped for some additional APIs. Where are you up to with any of the potential customers offering it as a plug-in or anything like that?
You'd mentioned.
If you're using the fastest are the service for other People's data and you'd had some you know some early tests going back a while ago and that needed to be revamped for some additional API, where are you off to with any of the potential customers offering it as a plug in or anything like that.
Lee Lin Shu: The second milestone was the completion of the Gemini 2 Table, which was launched last week.
Lee Lin Shu: As a result, we are on track to have the trip back in March and early decade in the year, as expected to begin sampling the device in the second half of 2024. We are targeting Gemini 2 partners and customers in no power data center expansion and neighboring data center functions at age. Example of age application could include advanced driver assistance system and X-VG in delivery drones, autonomous slow bus, unmanned aerial vehicle, and specialized.
Speaker 3: transcript
Speaker 3: Yeah, so there's two areas that we're focusing the SAS on, Fast Vector Search and SAR. And as I mentioned in my comments earlier, the SAR was
Yeah. So there's two areas that we're focusing the SaaS on fast vector search and Saar and as I mentioned in my comments.
Comments earlier, the Saar was.
Speaker 3: transcript
Speaker 3: after discussions with one of the folks that we're talking to in that area. So, you know, we have an on-prem solution, which for some of their customers is needed, and then obviously, you know, one of the guys we're talking to you wants to put this capability on the satellite, so that would be a physical cell as well.
After discussions with one of the folks that we're talking to in that area. So we have an on prem solution.
Which for some of their customers as needed and then obviously one of the guys. We're talking to you once to put this capability on the satellite so that would be a physical sale as well, but right now most of their production. They are doing is is via SaaS over you know over AWS using GPU instances and so thats.
Speaker 3: transcript
Speaker 3: But right now most of their production they're doing is via stats over AWS using GPU instances. And so that's when we, after discussing with them, that's something that we looked at. And so that obviously makes sense for us to do. So we're opening up the SAR.
Lee Lin Shu: Turning to off financial withdrawals for the second quarter, revenue of $5.7 million was at the revenue was boosted by inventory bills with several key customers, which presents a challenging year-over-year comparison. In addition to a defense in the table of Gemini 2, a significant area of recent focus has centered around our ongoing engagements with a key hyper-skeleton partner and delighted to report that these discussions are making notable progress. To all constructive dialogue with this leading cloud computing provider, we have gained a valuable insight into the precise design specification required for Gemini 3 to align with the real requirements.
That's when we after discussing with them that's something that we looked at and so that obviously makes sense for us to do so we're opening up the Saar for that the first Victor search we've been putting in place we're still doing some benchmarking internally for some of the you know the fast Victor searched databases guys like like we the eight and so that's an ongoing.
Speaker 3: transcript
Speaker 3: for that. The Fast Vector Search we've been putting in place, we're still doing some benchmarking internally for some of the Fast Vector Search databases, guys like Weaviate, and so that's an ongoing project.
Project for us.
Speaker 6: transcript
Speaker 6: In terms of trying to get that Fast Factor Search as a plug-in so that customers could actually play with it through AWS or something like that, any progress there?
And in terms of trying to get that fast vector searches a plug in.
Customers could actually play with it through AWS or something like that.
Any any progress there.
Speaker 3: transcript
Speaker 3: There is, I'm trying to understand what I can see there. So we've had some discussions recently with a very large data center company to basically.
There is.
I'm trying to understand what I can I can say there. So we had we've.
We've had some discussions recently with you know a.
A very large data center.
Company two two basically.
Lee Lin Shu: This collaborated effort has enabled the Earth to chart a development by identifying potential partners who can bring the essential financial engagement and engineering results to the table for the successful development, manufacturing, and the launch of Gemini 3. The evolution will leverage the incorporation of high bandwidth memory into the APU architecture, thereby harness the full potential of in-memory compute for the advantage.
Integrate.
Speaker 3: transcript
Speaker 3: integrate easier into their system right now, and so those discussions have been happening over the last couple of weeks, and then certainly once those get worked out, then we'll be able to have a smoother offering right now, because as you know, right now, we're basically offloading the searches off to our data center that we have put into a facility called CoreSite, and so we're trying to streamline that offering.
Easier into their system right now and so those discussions have been happening over the last couple of weeks and then certainly once those get worked out then we'll be able to have a smoother offering right now because as you know right now.
We're basically they're offloading the searches off to our data center that we have put into a facility called core site and so we're trying to streamline that.
That offering.
Didier Lasser: Now, I will hand over to BDA, who will discuss our previous performance for the critical heavy. Thank you, Lee. Following up on the projects I mentioned last quarter, throughout the second quarter of fiscal 2024, our team continued to pursue opportunities with Gemini 1 to advance our customer engagements. Currently, GSI has a fast vector search plugin available that allows cloud vector search users to seamlessly add APU accelerated search to their major cloud-provided hosted workloads with minimal latency from GSI's hosted data centers.
Okay. Thanks, so much.
Right.
Speaker 1: transcript
Speaker 1: Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, please press star and 1.
Thank you.
Ladies and gentlemen, a reminder, if you wish to ask a question. Please press star and one.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Luke Brenner, an investor. Please go ahead.
Our next question comes from the line of Luke Benno and invest though please go ahead.
Hi.
Speaker 7: transcript
Speaker 7: Hi. To zoom out from parsing the applications and the, yeah, the prospects for various, you know, partnerships, could we assume that when Gemini 1 hits the scene and you all are able to, yeah, offer that to be tooled by, yeah, by various users, will that outperform?
To zoom out from parsing the applications and the.
Yeah, the prospects for our various partnerships are could.
Can we assume that when Gemini one hit the scene and you all are able to offer that to be tool by yeah by various users will that outperform.
Didier Lasser: This FVS plugin provides accelerated approximate nearest neighbor search response times, enabling access to a large enterprise service at low power that also meets price points for small and medium-sized businesses, this will be opening of larger markets for us.
Speaker 7: transcript
Speaker 7: a large swath of the current high-performance computer offerings that are on the market, including the leaders of Nvidia, AMD, FAMSUNG, even Google, the Acoustan chips. Is that safe to say?
A large swath of the current high performance computer offerings that are on the market, including the leaders of.
You know Nvidia AMD, Samsung, even Google custom chips.
Yes that is that safe to say.
Didier Lasser: Switching to our SAR opportunities due to customer feedback, we have decided to launch our low powered highly efficient SAR processing as a SaaS offering along with of course also the on-prem version. We are now engaging to bring that service to market. Moreover, we favorably completed benchmarking on a customer's data set. One target we are engaged with a start-up building satellites that can provide computational capabilities on satellites in space has identified the Gemini APU as its preferred provider for computing solutions for space. The big differentiator in addition to low power performance is a product's radiation tolerant feature.
Speaker 3: transcript
Speaker 3: So, okay, so I'm trying to find your question here. So first off, we do have Gemini I1 already. So I'm assuming you're referring to Gemini II.
So okay. So I'm trying to follow your question here. So first of all we do have Gemini one already so I'm, assuming you were referring to Gemini two.
That's correct, yeah, yeah, and so so Jim and I too and then you also mentioned that cause some chips, so Jim and I choose not accustomed shifts Jimmy Choo is gonna be a standard offering that we're gonna have and so and so yeah. Obviously, we've done some calculated benchmarking, which have looked very favorable.
Speaker 3: transcript
Speaker 3: Yeah. And so, so Gemini 2, and then you also mentioned a custom chip. So Gemini 2 is not a custom chip. So Gemini 2 is going to be a standard offering that we're going to have.
Speaker 3: transcript
Speaker 3: And so, and so yeah, obviously we've done some calculated bench markings, which have looked very favorable. And once we have the chip in hand, you know, as Dean said, we'll have it in hand early next year.
And once we have the chip in hand, as Lillian said, we'll have it in hand.
Early next year.
Speaker 3: transcript
Speaker 3: and it's probably going to take a, you know, at least to spend it to really get something we can do benchmarking. So it'll be around summertime.
And it's probably going to take us at least to spend it to really get something we can do benchmarking so it'll be around summertime.
Speaker 3: transcript
Speaker 3: before we can do true benchmarking. But yes, we anticipate them to be very favorable over what we have and what's in the market space.
Before we can do true a benchmarking, but yes, we anticipate them to be very favorable.
Didier Lasser: On that note, we will be conducting full radiation tolerant testing on Gemini 1 next month. By this I mean the full range of tests required for customers considering using Gemini 1 in space. One of the applications for that radiation tolerant Gemini 1 would be ideally suited for SAR and ATR which is automatic target recognition and computing in space to name a few.
Over.
Over what we have and what's in the market space.
Speaker 3: transcript
Speaker 3: Now, but you want to add to the comment, you said custom chip.
But do you want to add to the comment you said custom chip. So what are the things and we've mentioned this in the past that we're also.
Speaker 3: transcript
Speaker 3: So one of the things, and we've mentioned this in the past, that we're also looking to do is obviously offer IP sales as well, because we do understand we have a unique technology, but we also understand that certainly we'll start with the hyperscillars. They do a lot of their own custom fill again. And so that, one of the...
Looking to do is obviously offer IP sales as well because we do understand we have a unique.
Didier Lasser: This summer we announced that GSI was awarded an SBIR contract to perform a feasibility study to adapt Gemini 2 to perform computing at the edge in collaboration with the US Air Force and Space Force. We are currently working on a second SBIR based on the Gemini 2 software development which is very promising a potentially similar financial award as the first win. We continue to file more SBIRs as they bring two key benefits. Number one, the source of revenue and they also create use cases within the US government for future APU opportunities.
Technology, but we also understand that certainly we will start with the hyperscale or as they do a lot of their own custom silicon and so what are the what are the conversations that we're having with the hyperscale theres. Besides talking about Gemini three for the <unk>. We're also talking about IP sales as well.
Speaker 3: transcript
Speaker 3: One of the conversations that we're having with the hyperscalers besides talking about Gemini 3 for the Gen AI is we're also talking about IP sales as well for any custom basics that they're doing on their own. So, I, yes, a lot of questions in there, I'm hoping I hit all the top.
For any custom asics that they're doing on their own so yes.
Yes, a lot of questions in there I'm, hoping I hit all the topics.
Speaker 7: transcript
Speaker 7: Yep, yeah, that does – it kind of answers the two implications there, that Gemini 2 will be a compelling competitor, and depending on, yeah, how you're able to benchmark it or how much tooling or rendering it requires to, yeah, be IP or be an actual – get that chip directly, but that it will, yeah, essentially at 16 nanometers be competing toe-to-toe or even, yeah, clearly out-competing a lot of these 5-nanometer, yeah, leading high-performance chips.
Mhm Yep, yeah that that does.
Can you kind of answered the two implications there that the Gemini two will be a compelling competitor.
Didier Lasser: Let me switch now to customer and product breakdowns for the second quarter. In the second quarter of fiscal 2024 sales to Nokia or 1.2 million or 20.3% of net revenues compared to 1.2 million or 13.6% of net revenues. In the same period a year ago and 1.9 million or 33.5% of net revenues in the prior quarter. Military defense sales were 34.8% of second quarter shipments compared to 22.4% of shipments in the comparable period a year ago and 33.8% of shipments in the prior quarter. Secret quad sales were 55.8% of second quarter shipments compared to 58.1% in the second quarter of fiscal 2023 and 58.6% in the prior quarter.
Depending on how you are able to benchmark how much tooling of rendering it requires to IP.
IP or the actual yet that shipped directly.
But that it will.
Essentially at 16 nanometers E competing toe to toe or eating yeah, clearly out competing a lot of these five nanometer leading high performance chips.
Speaker 3: transcript
Speaker 3: right that's what i got it from everything you know if you recall jim and i one you know the best market event passes have been very positive against what's out there today now which him and i too as we discussed in the past it has ten times the performance in eight times the l one memory on chip so it's certainly going to be a you know something that's going to be very compelling for the market
Right, that's what I gathered from everything else.
If you recall, Jim and I won the benchmarking we've done in the past have been very positive against what's out there today now with Jim and I too as we discussed in the past. It has 10 times the performance and eight times the L. One memory on chip so it's certainly going to be a.
You know something that's going to be very compelling for the market.
Excellent.
Speaker 7: transcript
Speaker 7: All right, yep, eager for it. Thank you. That's all I have. Thanks, Luke.
Alright, yes eager for it.
Thanks Luke.
Speaker 8: transcript
Speaker 8: Thank you. Our next question comes from George Gaspo, an investor, please go ahead. Yeah, thank you. Could you go into a little additional info?
Douglas Schirle: I would like now to hand the call over to Doug. Go ahead Doug. Thank you DDA.
Thank you. Our next question comes from George Gaspar and invest though please go ahead yeah. Thank you.
Douglas Schirle: We reported the net loss of 4.1 million dollars or 16 cents per deluded share on net revenues of 5.7 million dollars for the second quarter of fiscal 2024 compared to net loss of 3.2 million dollars or 13 cents per deluded share on net revenues of 9 million for the second quarter of fiscal 2023 and a net loss of 5.1 million for 21 cents per deluded share. Net revenues of 5.6 million for the first quarter of fiscal 2024.
Could you go into a little.
Additional.
Information for us.
Speaker 8: transcript
Speaker 8: for us on the military and defense applications. And the interconnect that the company has had in Israel over the years, in fact, the initially the whole Gemini approach came out of there. And considering what's going on in space, is there a broader application?
Military and defense applications and the interconnect that the company has had in Israel over the years.
In fact.
Initially the <unk> Gemini approach came out of there.
Considering what's going on in space is there isn't.
Douglas Schirle: The gross margin was 54.7% compared to 62.6% in the prior year period and 54.9% in the preceding first quarter. The changes in gross margin were primarily due to changes in product mixed sold in the three periods. Total operating expenses in the second quarter of fiscal 2024 were 7.2 million dollars compared to 8.8 million dollars in the second quarter of fiscal 2023 and 8.2 million dollars in the prior quarter. Research and development expenses were 4.7 million dollars compared to 6.4 million dollars in the prior year period and 5.2 million dollars in the prior quarter. Selling general and administrative expenses were 2.5 million dollars in the quarter and its September 30, 2023 compared to 2.4 million dollars in the prior year quarter and $3 million in the previous quarter.
In a broader applications.
Speaker 8: transcript
Speaker 8: for the advancements that you're making going into space and is what's happening with Israel right now in terms of this situation in the Middle East. Is there, are you seeing anything happen that could create a more military related effort?
But the advancements that you're making going into space and.
This is what's happening and with Israel right now in terms of this situation in the middle East.
Is there.
Are you seeing anything happen that could create a.
Military related effort.
Okay. So let me see let me try and get all those questions now so let's start with the military.
Speaker 3: transcript
Speaker 3: Okay, so let me see, let me try and get all those questions now. So let's start with the military. So yeah, there are a lot of different possible use cases with the military, which is also why we've had some successes recently with these SBIRs that we've been filing. So some of the interest that we've seen.
Yeah, there are a lot of different possible use cases with the military which is also why we've had some successes recently with these <unk> that we've been filing.
So some of the interest that we've seen have from from like well called the 1000 Aero kind of area is certainly Saar for sure.
Speaker 3: transcript
have from like we'll call the Mill Arrow kind of area is.
Douglas Schirle: Second quarter of fiscal 2024 operating loss was 4.1 million dollars compared to 3.2 million dollars in the prior year period and 5.1 million dollars in the prior quarter. Second quarter of fiscal 2024 net loss includes interest in other income of $71,000 and a tax provision of $33,000 compared to interest in other income net of $14,000 and a tax provision of $37,000 for the same period a year ago. In the preceding first quarter, net loss included interest in other income net of $80,000 and a tax provision of $51,000. Total second quarter pre-tax stock-based compensation expense was $676,000 compared to $661,000 in the comparable quarter a year ago and $820,000 in the prior quarter.
Speaker 3: transcript
Certainly SAR for sure. Object detection is another automatic target recognition, another.
Object detection is another.
Automatic target recognition. Another we've also been for imaging as well for change detection.
Speaker 3: transcript
We've also been for imaging as well for change detection.
Speaker 3: transcript
Oh, just, and also one of the customers that we're engaged with, in fact, they have two of our servers on loan that they're doing demonstrations with, is they want to start putting data centers in space. And so that's another just a standard data center application in space.
Hum.
Oh and also one of.
The customers that we're engaged with in fact, they have two of our servers on loan that theyre doing demonstrations with is <unk>.
Want to start putting datacenters and space and so that's another just a standard data center application in space.
Speaker 3: transcript
And so that's another one. As far as, I'm not sure what the Israel side, so as you say, this original technology was in acquisition we made, and the company was out of Israel.
And so that's another one as far as.
I'm not sure what the Israel side. So as you say you know this original technology was was an acquisition we made in the.
The company was out of Israel.
Speaker 3: transcript
But I'm not sure what the question was revolving around that acquisition. Oh, well.
Douglas Schirle: In September 30, 2023, the company had $25.3 million in cash, cash, equivalents and short-term investments compared to $30.6 million in cash, cash, equivalents and short-term investments March 31, 2023. Working capital was $28.8 million as a September 30, 2023 versus $34.7 million in March 31, 2023 with no debt. Stockholders equity as a September 30, 2023 was $45.4 million compared to $51.4 million as of the fiscal year ended March 31, 2023.
But I'm not sure what the question was revolving around that acquisition.
Well basically.
Speaker 8: transcript
Just as a reference I mentioned it, but considering what's going on in the Middle East right now.
Just as a reference I mentioned, it but considering what's going on in the middle East right now.
Speaker 8: transcript
and the connections that the company has had with Israel. I would think that there would be an attempt to try to get some applications moving forward to, and give Israel a more recognition in how they're trying to monitor things.
And the connections that the company has had with Israel I would think that there would be an attempt to try to get some applications moving forward two and.
Israel more recognition and how they're trying to monitor things.
Speaker 3: transcript
Yeah, so we've had some discussions, obviously, with MFAT that we've talked about in the past and other entities there on several applications.
Is that yes, yes.
Yeah. So we've had some discussions obviously with with the fact that we've talked about in the past in other entities there on several applications.
Douglas Schirle: Given the current global economic environment, our current expectations for the upcoming third quarter are net revenues on the range of $5.4 million to $6.2 million with gross margin of approximately 55% to 57%.
Speaker 3: transcript
I won't go into Jack Detail, but there's certainly, I'm sure, there will certain areas that we've talked about with them will slightly get accelerated now because of obviously what's happening now. But right now, we're not having those discussions right now. There's more pressing issues in Israel right now.
I won't go to Jack detail, but Theres certainly I'm sure will there were certain areas that we've talked about with them will most likely get accelerated now because of of obviously, what's happening now, but but but right now.
Unknown Attendee: Operator, at this point, we would like to open the call to Q&A. Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and one on the telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star and two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, one moment please, while we pause for questions.
Not having those discussions right now there is more pressing issues in Israel right now.
Speaker 8: transcript
I see, okay. Well, it looks like you're about to make some generally better movements forward with Gemini 2 going to 3, and hopefully this really starts to turn the company around in terms of its revenue volume, and would expect that by the end of this fiscal year, there's some real momentum going forward. Can you comment on it?
Okay, well it looks like you're about to make some generally better movement forward with Gemini two going to three and hopefully this really.
<unk> turned the company around in terms of its.
Canoe Valium and.
I would expect that by the end of this fiscal year.
There's some real momentum going forward can you comment on it.
Speaker 5: transcript
Yeah, they're certainly momentum. And you know, as you know, as time goes on, we hope to have a better day out sport or, you know, crashing, but the end of the fiscal year, you know, any revenue that comes will be coming from Jim and I won. So, you know, as we discussed, Jim and I too, we're not gonna be even sampling it until summer of next year. And so that falls into fiscal 25. Gotcha. Okay, thank you. Thanks.
Yeah, there is certainly momentum in U S.
Brett Reiss: A first question comes from Brett Reiss with Janie Montgomery Scott. Please go ahead. Yeah, hi, thanks for taking the question. You know, until corporate initiatives gain traction, how can you just comment on cash burn rates? How long do you think the cash will last without you having to, you know, do some sort of financing? Yeah, we've taken a look at that. We would take a look at it every quarter and if nothing improves, which we don't expect, we have cash that should last at least a couple of years at this point.
As time goes on we hope to announce more war crashing.
Crashing.
But we ended the fiscal year.
Any revenue that comes will be coming from Jim and I want so.
Discuss Gemini two we're not going to be even sampling it until summer of next year.
So that falls into fiscal 'twenty five gotcha, okay. Thank you.
Thanks George.
Thank you.
Speaker 1: transcript
As there are no further questions, I would now hand the conference over to the management for their closing remarks.
I have no further questions I would now hand, the conference silver to the management for their closing remarks.
Speaker 2: transcript
Thank you all for joining us. We look forward to speaking with you again when we report our sub for the PDC 2020 for the panel.
Thank you all for joining US we look forward to speaking with you again when we report also.
While the physical 2000 pounds.
Uh huh.
Brett Reiss: And if I make this follow up, what do you think you burn will be, you know, for this following year? This share will be around $13 to $14 million. Yeah, we have one kind of extraordinary expense coming up this fiscal year that requires about $2.4 million cash outlay. And that's for the mask set for the Gemini II product that just taped out that Leland previously mentioned today. That's a somewhat of a deregular occurrence. It only happens every few years. Okay.
Speaker 1: transcript
Thank you. The conference of GSI Technology has now concluded. Thank you for your participation. You may now disconnect your lines.
Thank you.
Conference of GSI Technology has now concluded. Thank you for your participation you may now disconnect your lines.
Okay.
[music].
Speaker 9: transcript
The.
Unknown Attendee: Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, please press star and one.
Oren Hirschman: Our next question comes from the line of Oren Hirschman with AIGH Investment Partners. Please go ahead. Hi, how are you? Can you get? Good, thank God.
Didier Lasser: Can you, can you give us a little bit more color on, you know, is the data center customer interested in Gemini II for any purpose early Gemini III? Have they played with Gemini I want to understand them better? And what is attracting them to, you know, to the Gemini architecture? Sure. Okay, so let me start with that. So with the with the hyperscaler we're engaged with and we've had one we've had ongoing discussions with and we've since opened up other discussions with other hyperscalers.
Didier Lasser: Certainly as Leland mentioned in, you know, in his earlier comments, the information we gathered from our first engagement was instrumental to be able to show our story in our offering for future hyperscaled conversations. And so what they're interested right now is would be a next generation specifically something we'll call Gemini III for now because that was going to really be geared towards Gen AI or the LLM models. With that said, as you know, these hyperscalers are very large companies and so, you know, certainly Gemini II is certainly not out of play with them.
Didier Lasser: It's just wouldn't be the solution specifically for the Gen AI conversations we're having. And in terms of other... Hiberscalers and data center customers, tell them like there's some level of progress. How would you characterize it? Have people played with benchmarks yet for any of them that I think would be an important point to know if it's true if you've gotten that far? Correct, and so what we've done is we've shown obviously the technology with Jim and I1 because Silicon is here, software is here, we can run true benchmarks.
Didier Lasser: We've then obviously run expected benchmarks off of Jim and I2. And so, you know, going back, and I just remember what part of your earlier question was, what's interesting about our technology to them? So there's certainly a few areas. Obviously, the performance is important to them, but the low power is slowly grab their eye, and also other features like the fact that we're a bit processor. This is very important to allow these folks because right now if they're using a GPU, they're really locked into, depending on the GPU 8-bit or 16-bit, 32-bit, or 64-bit kind of traffic patterns, we're a bit processor and so we don't care what your traffic looks like.
Didier Lasser: It can be 4-bit, it can be 64-bit, it can be makeup a number, a thousand bit, and we can adapt to that on the fly and cycle to cycle. And so that flexibility is also very important to them. In real life, you know, there's been a lot of talk about a very old bit type of super processor in the literature and obviously no one's really, no one's really had one commercially where it's programmable in that fashion.
Didier Lasser: Are you programmable today in that fashion? Number one, number two is what are some of the applications where that becomes so enticing? So you're talking about the bit processing? Yeah. So there's a lot of research going on right now, and you know, they're finding out that some efficiencies aren't coming in like the expected 16-bit and 32-bit. As I mentioned, five-bit was one that came up recently, and candidly I don't remember the exact application or the research on that, but five-bit was one of them that was important.
Didier Lasser: And so, you know, one of the benefits with this bit processing is that, you know, as our customers told us, we're future-proof. And what I mean is, if there's an application that comes in that needs five-bit, we're there. If there's one that needs 128-bit, 256-bit, we're there. We don't have to redesign our part to be able to address those needs because of the fact that, you know, we have two million-bit processors on our Gemini One, and they can work, as I mentioned, as one bit or make up a number between one and two million.
Didier Lasser: And so we're future-proof in that respect, which is obviously eye-opening to them. Yeah, just a comment. Right now, the GNAI, the large language model is a very, very big model. It's a very, very memory-intensive application. So, they will need a very big memory, they will need a very fast memory. So the effort, one of the effort is they try to reduce The data format, you know, if you have less language or a bit to calculate, then you can let's memory you less memory two foot.
Didier Lasser: Okay, so we have this processing capability, which, you know, you can just let it, you know, five bits, four bits, three bits, two bits, we will be there, and with this, we have more capability to keep up with the software innovation, and that's what, you know, what, some of the customer like, like was about this issue.
Didier Lasser: And just going back to benchmarking, have you done benchmarking for some of the data center and, and high-pisceler customers? So, candidly, most of the benchmarking we've done have been based essentially off of POC's, where customers have come in and said, this is what I'm using, here's my data set, what do your numbers look like? And so we've done real life case POCs, we've done that, you know, for one of our Israeli customers that we talked about, and then also one of our recent SAR customers.
Didier Lasser: As far as broad market benchmarking, we, we haven't done a lot, but we know that's critical and that's something that's on our agenda to start doing. It's just been, you know, a resource issue for us to be able to make that happen, but we understand it's important, and that's what we're, you know, next on the list.
Didier Lasser: And, let's see, two more questions as I may, and a lot of the people ask. So, in terms of proof of concept using customer data, have any of the high-pisceler's given you data sets to actually show them what you can and can't do with it? No, these are other applications, these have been SAR applications and other applications. The high-pisceler's no, because as I mentioned, the discussions early on have been revolving around this next generation device, and so we've given them, we have given them benchmarking of what we anticipate we could do absolutely, but they're not true benchmarks. They're calculated benchmarking.
Didier Lasser: Okay, last question, just on the, you mentioned, as sort of using the process, there's a service for the people's data, and you had some, you know, some early tests going back a while ago and that needed to be revamped for some additional APIs. Where are you up to with any of the potential customers offering it as a plugin or anything like that? Yeah, so there's two areas that we're focusing the SaaS on, fast vector search and SAR, and as I mentioned in my just, you know, comments earlier, the SAR was after discussions with one of the folks that we're talking to in that area.
Didier Lasser: So, you know, we have an on-prem solution, which for some of their customers is needed, and then obviously, you know, one of the guys we're talking to you wants to put this capability on the satellite, so that would be a physical cell as well. But right now, most of their production they're doing is via SaaS, you know, over, you know, over AWS using GPU instances, and so that's, that's when we, after discussing with them, that's something that we looked at, and so that obviously makes sense for us to do is, so we're opening up the SAR for that.
Didier Lasser: The fast vector search we've been putting in place, you know, we're still doing some benchmarking internally for some of the, you know, the fast vector search and databases guys like, like, we be eight, and so that's an ongoing project for us, in terms of trying to get that fast-factor search as a plug-in, so that customers could actually play with it through AWS or something like that. Any progress there? We integrate easier into their system right now, and so those discussions have been happening over the last couple of weeks, and then certainly once those get worked out, then we'll be able to have a smoother offering right now. Because as you know right now, they're offloading the searches off to our data center that we have put into a facility called Corsite, and so we're trying to streamline that offering.
Unknown Attendee: Okay, thanks so much. Thanks, Orin. Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, please press star, and one.
Luke Brenner: Our next question comes from the line of Luke Brenner, and in Westville, please go ahead. Hi, to zoom out from parsing the applications and the yeah, the prospects for various partnerships, can we assume that when Gemini 1 hits the scene and you all are able to get off of that to be told by, yeah, by various users, will that outperform a large swath of the current high-performance computer offerings that are on the market?
Luke Brenner: Including, you know, the leaders of, you know, Nvidia, AMD, Samsung, even Google, yeah, custom chips. Yeah, is that, is that safe to say? So, okay, so I'm trying to follow your question here. So first off, we do have Gemini 1 already, so I'm assuming you were referring to Gemini 2. Yeah, and so Gemini 2, and then you also mentioned a custom chip. So Gemini 2 is not a custom chip. Gemini 2 is going to be a standard offering that we're going to have.
Luke Brenner: And so, yeah, obviously we've done some calculated benchmarking, which have looked very favorable. And once we have the chip in hand, you know, as Dean said, we'll have it in hand early next year. And it's probably going to take a, you know, at least to spend it to really get something we can do benchmarking. So, it'll be around summertime before we can do true benchmarking. But yes, we anticipate them to be very favorable over, you know, over what we have and what's in the market space.
Luke Brenner: Now, and now, but I do want to add to the common, you said custom chip. So, one of the things, and we've mentioned this in the past, that we're also looking to do is obviously offer IP sales as well. Because we do understand we have a unique technology, but we also understand that certainly we'll start with the hyperscalers. They do a lot of their own custom silicon. And so, that one of the conversations that we're having with the hyperscalers besides talking about Gemini 3 for the GNI is we're also talking about IP sales as well for any custom basics that they're doing on their own.
Luke Brenner: So, yes, a lot of questions in there. I'm hoping I hit all the top. Yeah, that does kind of answer the two implications there, that Semini 2 will be compelling, you're counted there, and depending on how you're able to benchmark it, how much tooling or rendering it requires, the IP or the actual, you have that chip directly, but that it will, yeah, essentially at 16 nanometers, be competing toe-to-toe or even, yeah, clearly out competing a lot of these 5 nanometer leading hyperformist ships.
Luke Brenner: That's what I gathered, yeah, from everything you all put out. If you recall, Jim and I won, you know, the benchmarking we've done in the past has been very positive against what's out there today. Now, with Jim and I too, as we discussed in the past, it has 10 times the performance, and 8 times the L1 memory on chip, so it's certainly going to be something that's going to be very compelling for the market. Excellent. All right, yep, eager for it. Thank you. That's all I have. Thanks, Luke.
George Gaspel: Thank you. Our next question comes from George Gaspel, and in Vestel, please go ahead. Yeah, thank you.
Didier Lasser: Could you go into a little additional information for us on the military and defense applications, and the interconnect that the company has had in Israel over the years. In fact, initially, the whole Gemini approach came out of there. And considering what's going on in space, is there a broader application for the advancements that you're making going into space, and what's happening with Israel right now in terms of this situation in the Middle East. Are you seeing anything happen that could create a more military-related effort? Okay, so let me try and get all those questions now.
Didier Lasser: Let's start with the military. So yeah, there are a lot of different possible use cases with the military, which is also why we've had some successes recently with these SBIRs that we've been filing. So some of the interests that we've seen have from, like we'll call them, the middle arrow kind of area is certainly sore, for sure. Object detection is another automatic target recognition, another. We've also been for imaging as well, for change detection.
Didier Lasser: And also one of the customers that we're engaged with, in fact, they have two of our servers on loan that they're doing demonstrations with, is they want to start putting data centers in space. And so that's another, just a standard data center application in space, and so that's another one. As far as, I'm not sure what the Israel site, so as you say, this original technology was in acquisition we made, and the company was out of Israel.
Didier Lasser: But I'm not sure what the question was revolving around that acquisition. Well, basically, just as a reference, I mentioned it, but considering what's going on in the Middle East right now, and the connections that the company has had with Israel, I would think that there would be an attempt to try to get some applications moving forward to and give Israel a more recognition in how they're trying to monitor things, is that?
Didier Lasser: Yes. Yeah, so we've had some discussions, obviously, with the FAT that we've talked about in the past and in other entities there on several applications. I won't go into exact detail, but there's certainly, I'm sure, there will, certain areas that we've talked about with them will slightly get accelerated now because of, obviously, what's happening now, but right now, we're not having those discussions right now there, there's more pressing issues in Israel right now. I see. Okay.
Didier Lasser: Well, it looks like you're about to make some generally better movements forward with Gemini 2, going to 3, and hopefully, this really starts to turn the company around in terms of its revenue volume, and would expect that by the end of this fiscal year, there's some real momentum going forward, can you comment on it? Yeah, there's certainly momentum, and you know, as time goes on, we hope to announce more or no, but the end of the fiscal year, you know, any revenue that comes will be coming from Gemini 1, so as we discussed, Gemini 2, we're not going to be even sampling it until summer of next year, and so that falls into fiscal 25. Gotcha. Okay. Thank you. Thanks George. Thank you.
Unknown Attendee: As there are no further questions, I would now hand the conference over to the management for their closing remarks. Thank you all for joining us. We look forward to speaking with you again when we report our sub for the fiscal 2020.
Unknown Attendee: Thank you. The conference of GSI Technology has now concluded. Thank you for your participation.
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