Q4 2025 GSI Technology Inc Earnings Call
Yeah.
Welcome to GSI Technology's fourth quarter and fiscal year 2025 results conference call.
Operator: Welcome to GSI Technology's fourth quarter and fiscal year 2025 results conference call. At this time, all participants are on 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.
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.
Before we begin today's call. The company has requested that I read the following safe Harbor statement.
Operator: Before we begin today's call, the company has requested that I read the following Safe Harbor Statement. The matters discussed in this conference call may include forward-looking statements regarding future events and the future performance of GSI technology that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's form 10-K, filed with the Securities and Exchange Commission.
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.
These risks and uncertainties are described in the company's Form 10-K filed with the Securities and Exchange Commission.
Operator: Additionally, I have also been asked to advise you that this conference call is being recorded today, May 1st, 2025, at the request of GSI Technology.
Additionally, I have also been asked to advise you that this conference call is being recorded today may.
First 2025 at the request of GSI technology.
Neely: Neely ensure the company's chairman President and Chief Executive Officer will be hosting the call today.
Operator: Li-Lin Hsu, the company's Chairman, President, and Chief Executive Officer, will be hosting the call today.
With him are Douglas shortly.
Operator: With him are Douglas Schirle, Chief Financial Officer and Didier Lasserre, Vice President of Sales.
Speaker Change: <unk> financial Officer, and D G Elisa Vice president of sales.
Operator: I would now like to turn the conference over to Mr. Hsu. Please go ahead, sir.
Shaw: I would now like to turn the conference over to Mr. Shaw.
Speaker Change: Please go ahead Sir.
Speaker Change: Yeah.
Speaker Change: Good afternoon, and thank you for joining me.
Li-Lin Hsu: Good afternoon, and thank you for joining us to review our fourth quarter and the fiscal year 2025 financial results. Let's start with a few highlights from physical year 2025. We close the fourth quarter with solid revenue growth. and a meaningful improvement in cash balance. finished the year with $13.4 million in cash. and a more disciplined operating structure. Revenue for the fourth quarter increased by 14 percent year over year. and 9% sequentially to $5.9 million. driven by strong demand for our excellent ship. as we exit this year. Its revenue growth and low operating expense result in a sharp reduction.
Speaker Change: Who will review our fourth quarter and.
Speaker Change: The physical year 2025 major of adult.
Speaker Change: Let's start with a few highlights.
Speaker Change: Critical year country country fried.
Speaker Change: We closed the fourth quarter with solid revenue growth.
Speaker Change: Significantly reduced net loss.
Speaker Change: And the meaningful improvement in cash burn.
Speaker Change: Finished the year with 13 $44 million in cash.
Speaker Change: This premier.
Speaker Change: Operator, if you could talk to you.
Speaker Change: That's enough for the fourth quarter increased by 14%.
Speaker Change: Year over year.
Speaker Change: And the macro sudden.
Speaker Change: Crucially to $549 million of them.
Speaker Change: So you remember songs demand so all of that's been true.
Speaker Change: As we exit this year.
Speaker Change: Here's the Bourbon equal and below a pretty good result.
We've talked in the shelf adoption.
Li-Lin Hsu: in Quasi-Delay Loss and Material Decrease in Cash Usage. for Physical Year 2025. while annual revenue declined 6% compared to the prior year. we've meaningfully reduced all their loss by 47%. for $20.1 million. in 2024 to 10.6 million dollars. driven by the 35% reduction in operating expenses.
Speaker Change: Even cooperative loss and a material decrease in cash usage.
Speaker Change: Well physical year 2025.
Speaker Change: Revenue declined 6% compared to the prior year.
Speaker Change: Meaningfully reduced all of their loss by 47%.
Speaker Change: $141 million.
Speaker Change: And consequently for.
Speaker Change: So with pinpoint is $6 million.
Speaker Change: So you can buy the 75% reduction.
Speaker Change: Oh great.
Speaker Change: This structural cost improvement.
Li-Lin Hsu: This structural cost improvement is central to our goal. of preserving cash and extending our long way. We pack to maintain our quality operating expenses at a current level. to minimize our catchment until we secure new funding sources.
Speaker Change: Total alcohol.
Speaker Change: Oh.
Speaker Change: Cash can be lumpy.
Speaker Change: We expect to maintain our quality operating expenses.
Curt Nagle.
Speaker Change: So I'm really mad dog textbook.
Speaker Change: With fewer new funding sources.
Speaker Change: In the fourth quarter.
Li-Lin Hsu: In the fourth quarter, we made good progress across multiple funds. to defend our technology roadmap and the commercial society. from a North American prime contractor. the key validation of our product. We anticipate follow-on orders this fiscal year. This chip carries a significantly higher growth margin than all traditional SMEs.
Speaker Change: Made good progress across multiple fronts.
Speaker Change: Well it depends on the technology road map and the commercial side dishes.
Speaker Change: Total body, we skew it nishu older.
Speaker Change: Grady issue pop in the iceberg.
Speaker Change: For American Prime contractor.
Speaker Change: T Friday for our partner.
Speaker Change: We anticipate follow I'll follow on older.
Speaker Change: Physical year.
Speaker Change: It's true K to a significant higher gross margin pick all traditional.
Speaker Change: East Pony castle with its customer and we're taking further on the opportunity.
Li-Lin Hsu: Didier is the point person with this customer and will expand further on the opportunity. All ongoing SBIR programs. with Government Agency for Work and Will. and we are successful in meeting our master. Today, all SBIRs have generated a payment total of $1.6 million. and we anticipate receiving an additional $1 million once we complete the program.
Speaker Change: Oh on call U S P a cohort.
Speaker Change: With government agency for Western World.
Speaker Change: And we are successfully meeting all masco.
Speaker Change: Oh, Yeah Uh huh.
Speaker Change: Repayments totaled one six medium Palomar.
Speaker Change: And we anticipate receiving an additional $1 million once we complete the pool.
Speaker Change: This quarter.
Li-Lin Hsu: $870,000 was the book of the reduction to RMB further sharpening the law of ready independence.
Speaker Change: 870000 dollar what's a book loss of recapturing two RMB compared.
Speaker Change: Further helping too low.
Speaker Change: Credit Suisse.
Speaker Change: Yeah.
Speaker Change: We are gradually savvy up all of a sudden huntsman from appraisal.
Li-Lin Hsu: We are especially excited about our recent enhancement to Plato. adding the integration of a camera interface. Brett Reiss, John Fichthorn, Didier Lasserre, Jeffrey Bernstein, GSI Technology Inc. This new feature pairs with other connectivity-enhancing allow the chip to interface with a wide range of sensors. This makes PRETO particularly well suited for AI agents requiring object recognition. The new capability has increased strategic interest in practice.
Speaker Change: The integration of our Kenmore interface.
Battery could include a true.
Speaker Change: It's a new feature.
Speaker Change: There were other conagra activity.
Speaker Change: Well all of the trip to interface with a wide range of offensive.
Speaker Change: Yes.
Speaker Change: Particularly with food.
Speaker Change: The acres, requiring opioid or condition.
Speaker Change: Have you ever capability has increased strategic interest in cracker.
Speaker Change: And we are currently in Korea.
Li-Lin Hsu: We are currently in preliminary discussion with multiple parties to secure partnership and asset funds for the next phases of development.
Speaker Change: Country, pushing 94 parties.
Speaker Change: Feel cargo ship and that's fun for the X faces I'll have to go home.
Li-Lin Hsu: Didier will provide more detail on this exciting development. as we look ahead to fiscal year 2026. We plan to build on the progress of our APU development. to drive continued growth in excellent sales and advanced execution of all strategic initiatives. across both commercial and the government markets. At the same time, we remain committed to maintain operational efficiency.
Speaker Change: For more detail on this exciting development.
Speaker Change: Okay.
Speaker Change: Well listen we live physical year 2026.
Speaker Change: Pray to do them.
Speaker Change: The clockwork vault COBOL, if you drilled them.
Speaker Change: So I've come to new coffee sales and execution of our strategic initiative.
Speaker Change: Across both commercial and government markets.
Speaker Change: At a certain time, we do remain committed to maintain operational.
Speaker Change: Excuse me.
Speaker Change: In parallel.
Li-Lin Hsu: In parallel, we continue to explore strategic alternatives. with a primary focus on securing funding to support the next phase of creative development. We are also working with our banking team to explore other options that could provide new sources of cash to execute our AS100.
Speaker Change: Great.
Speaker Change: T J will come there too.
Speaker Change: With the primary focus on securing funding to support the next phase, we will create or we could grow them.
Speaker Change: We are also working we saw a pretty human team.
Speaker Change: On the option that could come out, but I do have a source of cash.
Speaker Change: You all or your strategy.
Speaker Change: With that I will now hand it over.
Didier Lasserre: With that, I will now hand it over to you. Thank you, Lileen. As Lileen mentioned, this quarter's primary revenue driver was the continued strong demand for our high-density SRAM. Our SRAM has been deployed in critical systems used in chip manufacturing. And the recent uptick in business with KYEC is being driven by surging demand for our next generation AI chip from a leading GPU provider. Despite the ongoing tariff negotiations between the U.S. and its trading partners, we currently anticipate the demand from this customer to continue in fiscal year 2026 at a similar level to what we experienced in 2025.
Lee: Thank you Lee lean mentioned.
Lee: I mentioned this quarter's primary revenue driver was the continued strong demand for high density SRAM.
Lee: <unk> has been deployed in critical systems used in chip manufacturing and the recent uptick in business with K why do you see as being driven by surging demand for next generation AI chip from our leading GPU provider.
Lee: Despite the ongoing tariff negotiations between the U S and as trading partners. We currently anticipate the demand from this customer to continue in fiscal year 2026 at a similar level to what we experienced in 2025 with that said we may have some variability in the timing of the shipments, but importantly, the demand is still.
Didier Lasserre: With that said, we may have some variability in the timing of the shipments, but importantly the demand is still anticipated to remain consistent.
Lee: Anticipating remain consistent.
Didier Lasserre: The big news this quarter is an initial order for our radiation-hardened SRAM. While waiting for the forecast from the prime contractor, we anticipate follow-on orders in fiscal 2026. In addition, we are actively working with this customer to secure heritage status. Gaining this status would enhance the market acceptance of our radiation-hardened SRAM and unlock access to new high-value sales channels. It is worth noting that radiation-hardened SRAMs carry a gross margin well above those of our traditional SRAM chips, providing a strong financial lever as we work to reduce our net loss and cash burn.
Lee: The Big news this quarter as an initial order for our radiation hardened SRAM.
Lee: While waiting for the forecast from the Prime contractor, we anticipate follow on orders in fiscal 2026.
Lee: In addition, we are actively working with this customer to secure heritage status getting this status would enhance the market acceptance of our radiation hardened SRAM and unlike access to new high value sales channels. It is worth noting that radiation hardened SRAM carry a gross margin well above those of our traditional.
Lee: Yes, Ram chips, providing a strong financial lever as we work to reduce our net loss and cash burn.
Lee: So let me switch to pay play doh and elaborate on the liens earlier comments by integrating a camera interface directly into the chip alongside enhanced connectivity features Plano significantly broadens its addressable market.
Didier Lasserre: Let me switch to PLATO and elaborate on Leline's earlier comments. By integrating a camera interface directly into the chip alongside enhanced connectivity features, PLATO significantly broadens its addressable market. able to process data locally without relying on cloud infrastructure. It's now optimized for edge devices and ideal for agents performing object recognition.
Lee: Able to process data locally without relying on cloud infrastructure is now optimized for edge devices are ideal for agents performing object recognition.
Didier Lasserre: To clarify what an agent is, it's helpful to look at how the approach to AI is shifting to agentic AI. These AI systems don't just analyze data, but they also act independently. For example, generating motor commands for a robot or a drone. This involves multiple capabilities that a single-purpose GPU is not well-suited for. PLATO, on the other hand, can manage a combination of computing tasks that involve more than just a single number of crunching or graphic workloads. Put another way, agentic AI goes beyond basic data analysis. It must make decisions, process inputs from sensors like cameras and microphones, respond in real time, and take actions in the physical world.
Lee: Just to clarify when an agent is it's helpful to look at how the approach to AI is shifting to a gentex AI. These.
Lee: These AI systems don't just analyze data, but they also act independently for example, generating motor commands for a robot or drilling.
Lee: This involves multiple capabilities that a single purpose GPU is not well suited for played on the other hand can manage a combination of computing tasks that involved more than just a single number of crunching our graphic workloads.
Lee: Put another way <unk> goes beyond basic data analysis, it must make decisions process inputs from sensors like cameras and microphones respond in real time and take actions in the physical world.
Didier Lasserre: In this context, PLATO's capabilities position it at the forefront of sectors preparing for significant growth driven by the increasing demand for intelligent, autonomous systems or agents across various industries at the edge. Thus, interest in PLATO has grown among the strategic partners we've engaged with over the past year.
In this context Plato's capabilities positioned at the forefront of sectors preparing for significant growth driven by the increasing demand for intelligent autonomous systems or agents across various industries at the edge.
Lee: Interest in Plano is growing among the strategic partners, we've engaged with over the past year.
Leland: Pivoting to our ongoing S. P. I R. S. Leland stated these projects are on track and we are meeting the milestones as.
Didier Lasserre: Pivoting to our ongoing SBIRs, as Leland stated, these projects are on track and we are meeting the milestones. As a reminder, we are currently working on a Phase II contract from both the Space Development Agency and the Air Force Research Labs, along with our most recently announced Phase I contract with the U.S. Army.
Leland: As a reminder, we are currently working on our phase two contracts from both the space Development Agency and the Air Force Research Labs, along with our most recently announced phase one contract with a U S Army.
Leland: As planned we delivered a server with a leader to board to the Air Force Research Labs and will shortly deliver another leader to board to the space Development Agency.
Didier Lasserre: As planned, we delivered a server with a LITA II board to the Air Force Research Labs and will shortly deliver another LITA II board to the Space Development Agency. The Phase 1 SBIR for the U.S. Army contract is evaluating the use of Gemini 2 and Edge Computing's AI solutions and we are on track to meet all expectations with this partner. This quarter, we also delivered a YOLO algorithm for the Air Force Features Labs, including the benchmarks for a real-time object detection application. We continue to increase the performance of the YOLO algorithms, which can immediately determine the exact placement and identify the type of object.
Leland: The phase one S. P IR for the U S. Army contract is evaluating the use of Gemini two and edge computing AI solutions and we are on track to meet our expectations with this partner.
Leland: This quarter, we also delivered a yellow algorithm for the Air Force feature slabs, including the benchmarks for our real time object detection application. We continue to increase the performance of the yellow algorithms, which can immediately determined the exact placement and identify the type of objects.
Didier Lasserre: We plan to deliver the improved YOLO3 and YOLO5 algorithms this summer.
Leland: We plan to deliver the improved gold over three and Yolo five algorithms. This summer.
Leland: Lastly, an update on our SAR projects, we made further progress with an offshore defense R&D customer, which ordered a gemini two system to evaluate the chips capabilities for low power in flight application.
Didier Lasserre: Lastly, an update on our STAR projects. We made further progress with an offshore defense R&D customer, which ordered a Gemini 2 system to evaluate the chip's capabilities for low-power in-flight application. We will be shipping this system this quarter.
Leland: We will be shipping this system this quarter.
Didier Lasserre: This organization is also a potential funding partner for PLATO. In addition, a U.S. aerospace company continues to evaluate our Gemini for onboard satellite applications. Taken together, these activities support the use of Gemini 2 for integrated edge applications such as SAR generation and drones with subsequent object detection and actionable decisions.
Leland: This organization has also potential funding partner for Plato.
Leland: In addition, our U S. Aerospace company continues to evaluate our Gemini for onboard satellite applications taken.
Leland: Taken together these activities support the use of Gemini two for integrated edge applications, such as Saar generation and drones with subsequent object detection and actionable decisions.
Leland: Now I will move on to the customer and product breakdown for the fourth quarter.
Didier Lasserre: Now we'll move on to the customer and product breakdowns for the fourth quarter. In the fourth quarter of fiscal 2025, sales to KYEC were $1.7 million, or 29.5% of net revenues compared to $544,000, or 10.6% of net revenues in the same period a year ago, and $1.2 million, or 22.7% of net revenues in the prior quarter. In the fourth quarter of fiscal 2025, sales to Nokia were $444,000, or 7.5% of revenues compared to $694,000, or 13.5% of net revenues in the same period a year ago, and $239,000, or 4.4% of net revenues in the prior quarter.
Leland: In the fourth quarter of fiscal 2025 sales to Ky, you see where 1.2, I'm, sorry, $1 7 million or 29, 5% of net revenues compared to 54, 500, I'm, sorry, 544000, or 10, 6% of net revenues in the same period, a year ago and one.
Leland: $2 million or 22, 7% of net revenues in the prior quarter.
Leland: In the fourth quarter of fiscal 2025 sales to Nokia were 444000, or seven 5% of revenues compared to 400, excuse me compared to 694000 or 13, 5% of net revenues in the same period, a year ago and 239000 or four.
Leland: 4% of net revenues in the prior quarter.
Leland: Military defense sales were 37% of fourth quarter shipments compared to 35, 5% of shipments in the comparable period, a year ago and 30.1% of shipments in the prior quarter.
Didier Lasserre: Military defense sales were 30.7% of fourth quarter shipments compared to 35.5% of shipments in the comparable period a year ago and 30.0% of shipments in the prior quarter. Sigma quad sales were 39.3% of fourth quarter shipments compared to 42.4% in the fourth quarter of fiscal 2024 and 39.1% in the prior quarter.
I think we're quite sales were 39, 3% of fourth quarter shipments compared to 42, 4% in the fourth quarter of fiscal 'twenty 'twenty, four and 39, 1% in the prior quarter.
Douglas Schirle: I'd now like to hand the call over to Doug. Go ahead, Doug. Beginning with the results for the quarter. We reported net revenues of $5.9 million for the 4th quarter of fiscal 2025 compared to $5.2 million for the 4th quarter of fiscal 2024 and $5.4 million for the 3rd quarter of fiscal 2025. Gross margin was 56.1% in the 4th quarter of fiscal 2025 compared to 51.6% in the 4th quarter of fiscal 2024 and 54% in the preceding 3rd quarter of fiscal 2025. The year-over-year and sequential increase in gross margins was primarily due to higher revenue and product mix.
Leland: I'd now like to hand, the call over to Doug go ahead, Doug beginning with the results for the quarter.
Doug: We reported net revenues of $5 $9 million for the fourth quarter of fiscal 2025.
Doug: $5 $2 million for the fourth quarter of fiscal 'twenty, 'twenty, four and $5 $4 million for the third quarter of fiscal 'twenty to 'twenty five.
Doug: Gross margin was 56, 1% in the fourth quarter of fiscal 2025 compared to 51, 6% in the fourth quarter fiscal 2024 at 54% from the preceding third quarter of fiscal 2025.
Doug: The year over year and sequential increase in gross margins was primarily due to higher revenue and product mix.
Doug: Total operating expenses in the fourth quarter fiscal 2025 or $5.6 million compared to $7 $2 million in the fourth quarter and fiscal 'twenty, 'twenty, four and $7 million in the prior quarter.
Douglas Schirle: Total operating expenses in the fourth quarter of fiscal 2025 were $5.6 million compared to $7.2 million in the fourth quarter of fiscal 2024 and $7 million in the prior quarter. Research and development expenses were $3 million compared to $4.8 million in the prior year period and $4 million in the prior quarter. Research and development expenses in the fourth quarter of fiscal 2025 were reduced by $870,000, reflecting government funding under the SBIR programs. Selling general and administrative expenses were $2.6 million in the quarter ended March 31, 2025, compared to $2.4 million in the prior year quarter and $3 million in the previous quarter.
Doug: Research and development expenses were $3 million compared to $4 million in the prior year period, and 4 million from the prior quarter.
Doug: Research and development expenses in the fourth quarter of fiscal 2025.
Doug: Were reduced by $870000, reflecting government funding under the SPR programs.
Doug: Selling general and administrative expenses were $2 $6 million in the quarter ended March 31 2025.
Doug: Third a $2 $4 million in the prior year quarter, its $3 billion in the previous quarter.
Doug: Fourth quarter fiscal 2025 are pretty loss was $2 $3 billion compared to an operating loss of $4 $5 billion in the prior year period.
Douglas Schirle: Fourth quarter fiscal 2025 operating loss was $2.3 million compared to an operating loss of $4.5 million in the prior year period and $4.1 million in the prior quarter. Fourth quarter fiscal 2025 results included interest and other income of $52,000 and a tax provision of $6,000. compared to $108,000 in interest and other income in a tax spend of $85,000 for the same period a year ago. In the preceding third quarter, net loss included interest and other income of $70,000 and a tax provision of $44,000. Net loss in the fourth quarter of fiscal 2025 was $2.2 million, or $0.09 per diluted share, compared to a net loss of $4.3 million, or $0.17 per diluted share in the fourth quarter of fiscal 2024.
Doug: $4 $1 billion of the prior quarter.
Doug: Fourth quarter fiscal 2025 results included interest and other income of $52000.
Doug: A tax provision of $6000.
Compared to $108000 in interest and other income.
Doug: The tax benefit of $85000 for the same period, a year ago and the.
Doug: The preceding third quarter net loss included interest and other income $70000 and a tax provision of $44000.
Doug: Net loss in the fourth quarter of fiscal 2025 was to put $2 million or nine cents per diluted share.
Doug: Care to a net loss of $4 $3 million or 17 cents per diluted share in the fourth quarter fiscal 2024.
Douglas Schirle: and a net loss of $4,000,000 or $0.16 per diluted share in the third quarter of fiscal 2025. Fourth quarter pre-tax stock-based compensation expense was $512,000. compared to $693,000 in the comparable quarter a year ago and $429,000 in the prior quarter.
Doug: And a net loss of $4 million or <unk> 16 per diluted share in the third quarter fiscal 2025.
Doug: Fourth quarter pretax stock based compensation expense was $512000.
Doug: Compared to $693000 on a comparable quarter a year ago.
Doug: $429000 in the prior quarter.
Doug: Turning now to the full year results for fiscal 2025.
Douglas Schirle: Turning now to the full year results for Fiscal 2025. We reported net revenues of $20.5 million for FY2025 compared to $21.8 million for FY2024. Gross margin for fiscal 2025 was 49.4%, compared to 54.3% in the prior year. The increase in gross margin was primarily due to product mix and the effect of lower revenue on the fixed costs and our cost of revenues. Total operating expenses were $21 million in Fiscal 25. compared to $32.3 million in fiscal 2024. Research and development expenses of $16 million compared to $21.7 million in the prior fiscal year. Selling general and administrative expenses were $10.8 million compared to $10.6 million in fiscal 2024.
Doug: We reported net revenues of $20 5 million for fiscal 'twenty to 'twenty five compared to 21 million for <unk>.
Doug: Fiscal 'twenty 'twenty four.
Doug: Gross margin for fiscal 2025 was 49, 4% compared to 54, 3%.
Doug: Sure.
Doug: Chris Your gross margin was primarily due to product mix and the effects of lower revenue on our fixed costs in our cost of revenues.
Doug: Total operating expenses were $21 billion in fiscal 'twenty five.
Doug: <unk> 20, compared to $32 3 million in fiscal 'twenty 'twenty four.
Doug: Research and development expenses of $16 million.
Doug: <unk> to 'twenty $1.7 million in the prior fiscal year.
Doug: Selling general and administrative expenses were $10.8 million compared to $10 $6 million in fiscal 2024.
Doug: The decline in research and to look development expenses.
Douglas Schirle: Decline in research and development expenses was primarily due to cost reductions announced in August 2024. Research and Development Expense at FDISCO 2024 included pre-production mass costs. $2.4 million dollars related to our APU-2 product. Research and development expenses in 2025 and fiscal 2024 were reduced by $1.2 million and $440,000 respectively, reflecting government funding under the SPIR program.
Doug: Primarily due to cost reductions announced in August 2024.
Doug: Research and development expense.
Doug: Fiscal 2024 included preproduction mass costs of $2 $4 million later, if you two product.
Doug: Research and development expenses of 2025 in fiscal 'twenty to 'twenty four were reduced by $1 $2 million and $440000 reflected respectively, reflecting government funding under the SPR programs.
Doug: Operating expenses in fiscal 'twenty to 'twenty five include a gain on the sale of assets of $5 million from the sales of the company's headquarters building in Sunnyvale, California, and a sale leaseback transaction.
Douglas Schirle: Operating expenses in fiscal 2025 include a gain on the sale of assets of $5.8 million from the sales of the company's headquarters building in Sunnyvale, California in a sales and leaseback transaction. The operating loss for fiscal 2025 was $10.8 million. compared to an operating loss of $20.4 million in the prior year. The fiscal 2025 net loss included interest and other income of $326,000. and a tax provision of $130,000. compared to $414,000 in interest and other income and a tax provision of $70,000 in the prior year. For the fiscal year end of March 31st, 2025, we reported net loss of $10.6 million, or $0.42 per diluted share.
Doug: The operating loss for fiscal 2025 was $10 million.
Doug: Compared to an operating loss of $24 million in the prior year.
Doug: The fiscal 2025 net loss included interest and other income of $326000.
Doug: And a tax provision of $130000.
Doug: Compared to $414000 in interest and other income.
Doug: Tax provision of $70000 in the prior year.
Doug: For the fiscal year ended March 31 2025.
Doug: We reported a net loss of $10 $6 million or 42 cents per diluted share.
Doug: Compared to a net loss of $21 million or 80 cents per diluted share in the prior fiscal year.
Douglas Schirle: compared to a net loss of $20.1 million, or $0.80 per diluted share, in the prior fiscal year. On March 31st, 2025, we had $13.4 million in cash and cash equivalents compared to $14.4 million on March 31st, 2024. Working capital is $16.4 million as of March 31st, 2025 versus $24.7 million at March 31st, 2024.
Doug: On March 31 2025.
Doug: We had $13 $4 million in cash and cash equivalents.
Doug: Fortunate for $4 million at March 31, 2024.
Doug: Working capital was $64 million as of March 31, 2025 versus $24 7 million at March 31st 2024.
Douglas Schirle: Stockholders' Equity as of March 31, 2025. $28.2 million compared to $36 million as of the fiscal year ended March 31, 2024.
Doug: Stockholders' equity as of March 31, 2025 was $28 $2 million compared to $36 million as of the fiscal year ended March 31 2024.
Doug: Yeah.
Operator: Operator, at this point, we'll 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 your telephone keypad. A 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, we will wait for a moment while we poll for questions.
Operator at this point, we'll open the call for Q&A.
Doug: Thank you.
Doug: Ladies and gentlemen, we will now be conducting a question and answer session.
Doug: If you would like to ask a question. Please press star and one on your telephone keypad.
Doug: A confirmation tone will indicate your line is in the question queue.
Doug: You May press star two if you'd like to remove your question from the queue.
Doug: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the south east.
Doug: Ladies and gentlemen, we will wait for a moment, while we poll for questions.
Doug: Okay.
Doug: Okay.
Doug: Yeah.
Doug: Yes.
Michael Cooper: Our first question comes from the line of Michael Cooper, private investor. Please go ahead. Good evening. Can you talk a little bit about the market for the Play-Doh chip and the Gemini 2 chip? How large are these markets? How do they scale? Over what time period? Just give us a sense for us. the market conditions here. Thank you.
Speaker Change: Our first question comes from the line of Mike Lee Cooper Private Investor. Please go ahead.
Doug: Yeah.
Doug: Yeah.
Doug: Good evening.
Speaker Change: Can you talk a little bit about the market for the play Doh chip and.
Speaker Change: The Gemini two chip how large are these markets how.
Speaker Change: How do they scale over what time period.
Speaker Change: Give us a sense for.
Speaker Change: The market conditions here. Thank you.
Speaker Change: Sure.
Didier Lasserre: Sure, so we haven't actually put out the TAM numbers yet, but just to talk about the markets. For the Gemini 2, think of it as an extension of Gemini 1, but for the Edge. And so Gemini 1 was really to illustrate our capabilities in search and also some high performance computing applications like SAR. And so what Gemini 2 will do, will take that, but take it to the Edge. Gemini 1 was not built to be a low power solution with the accompanying FPGA that we've talked about in the past. With the Gemini 2, we can get closer to the Edge.
Speaker Change: We haven't actually put out the Tam numbers, yet, but just to talk about the markets for the Gemini two.
Speaker Change: Think of it as an extension of Gemini, one, but for the edge and so Gemini one was really.
To illustrate our capabilities into search.
Speaker Change: And also some high performance computing applications like Saar.
Speaker Change: And so what Jim and I too will do will take that.
Speaker Change: But take it to the edge Gemini one was not built to be a low power solution.
Speaker Change: With the accompanying FPGA that we've talked about in the past.
Speaker Change: Jim and I to we can get closer to the edge. So we're looking for while Gemini one would you saw our applications.
Didier Lasserre: So we're looking for, while Gemini 1 would do SAR applications on ground level in a building, we are now looking at Gemini 2 to do a SAR application actually on a drone or on a satellite at the Edge. And so we're looking at search and high performance computing at the Edge for Gemini 2.
Speaker Change: On ground level and a building we are now looking at Gemini two to do a soar application actually on a drone or on a satellite at the edge and so we're looking at search.
Speaker Change: High performance computing at the edge for Gemini two for play Doh. This is going to be it's not going to be for the search market, it's going to be for the L. LLM market.
Didier Lasserre: For PLATO, this is going to be, it's not going to be for the search market, it's going to be for the LLM market. And so when most folks think about large language models and Gen AI, they think of it in the data center. We're taking that capability to the Edge. And so this, think of Gen AI and LLM models more at the Edge. Thank you. Thanks Michael. Hi Nick. Michael, does that answer your question? Yes, it does. Thank you. Yeah, that's it. Thank you very much. Thank you.
Speaker Change: And so when most folks think about large language models and Jen AI they take of it and the data center.
Speaker Change: We are taking that capability to the edge and so this think of Gen AI and and LLM models more at the edge.
Speaker Change: Thank you.
Michael: Thanks, Michael.
Speaker Change: Okay.
Speaker Change: Michael does that answer your question.
Speaker Change: Yes, it does.
Speaker Change: Thank you.
Speaker Change: Yeah. That's it thank you very much.
Speaker Change: Thank you.
Speaker Change: Yes.
Robert Christian: The next question comes from the line of Robert Christian with Acoustic Technologies, please go ahead. Yeah, thanks for taking my call. I was wondering, is the company experiencing any interest in the Gemini 2 standalone chip from commercial companies other than, say, the military? And is the company still working with the hyperscalers? Thank you.
Speaker Change: The next question comes from the line of Robert question with acoustic technologies. Please go ahead.
Robert: Yes, Thanks for taking my call I was wondering is the company experiencing any interest in that Jim and I to Standalone chip.
Speaker Change: Yeah.
Speaker Change: Commercial companies other than to say the military and as the company is still working with the Hyperscale.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: So good question.
Didier Lasserre: So good question. Honestly, the majority of the early interest have come from more of the middle defense type of applications, and they are looking at it on a component level as well. So we do have what we call the LITA II board, which I discussed a little earlier, that we have delivered and will be delivering to some of our partners. And so with the board, we're delivering it with a SAR algorithm or some kind of a YOLO algorithm that's been developed, which is why they're getting a card. But some of the folks that we have been having discussions with, they are looking for a chip only because they will be mounting it on a drone or in a satellite.
Speaker Change: Honestly the majority of the early interest have come from more of the mill defense type of applications.
Speaker Change: And they are looking at it.
Speaker Change: On a component level as well so.
Speaker Change: We do have what we call the leader to board, which I discussed a little earlier.
Speaker Change: Earlier that we have.
Speaker Change: Delivered and we will be delivering to some of our partners and so with the board we are delivering it with.
Speaker Change: So our algorithm or some kind of a yellow algorithm. That's been developed which is why they are getting a card, but some of the folks that we have been having discussions with them.
Speaker Change: They are looking for a chip only because he will be mounting it.
Speaker Change: On the drone or in a satellite.
Didier Lasserre: One of our other integrating partners that we've discussed in the past, they're actually going to be developing their own miniaturized board. And so they will be procuring just the Gemini 2 chips from us to put on their proprietary board. So the answer is yes, we are seeing interest on the chip level, but there's also some board level interest as well.
Speaker Change: One of our other integrating partners.
Speaker Change: That we've discussed in the past they are actually going to be developing their own miniaturized board.
Speaker Change: And so they will be procuring just the Gemini two chips from us to put on their proprietary board. So so the answer is yes, we.
Speaker Change: We're seeing interest.
Speaker Change: On the chip level.
Speaker Change: But theres also some board level interest as well.
Speaker Change: Okay, and how about the Hyperscale horse.
Didier Lasserre: Okay, how about the hypers? The hyperscalers, we're really focusing more on the edge right now, and so we have bad discussions with them, it's just, that's a longer process with those folks. We find that with the military folks, it's just a much quicker path to revenue.
Speaker Change: Yes, the hyper scaler, we're really focusing more on the edge right now and so we have bad discussions with them.
Speaker Change: That's a longer process with.
Speaker Change: With those folks and we find that with the with the military folks it's it's.
Speaker Change: It's a much quicker path to revenue.
Speaker Change: Okay.
Didier Lasserre: Can you share with the shareholders a little more detail, if you can, on what Needham is bringing to the table? Well, you know, really nothing is off the table at this point. You know, it could be sale of assets. It could be, you know, funding into the company. It could be helping us with opportunities for R&D funding, help us with development of products that we're looking at, it really could be just about anything.
Speaker Change: Can you share with the shareholders a little more detail. If you can on what Needham is bringing to the table.
Speaker Change: Well.
Speaker Change: Really nothing is off the table at this point you know it could be sale of assets that could be.
Speaker Change: Yeah funding into the company.
Speaker Change: It could be helping us with the opportunities for our firm.
Speaker Change: <unk> funding.
Speaker Change: Help us with our.
Speaker Change: Development of our products that we're looking at it.
Speaker Change: It could be just about anything.
Speaker Change: Okay, but you can't share any specifics at this time that night.
Didier Lasserre: Okay, but you can't share any specifics at this time. There's nothing specific to talk about at this point, at this time yet.
Speaker Change: There's nothing specific to talk talk about at this point at this time yet.
Speaker Change: Okay. Thank you.
Didier Lasserre: Okay, thank you. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Michael Cooper was Investor. Please go ahead.
Michael Cooper: Our next question comes from the line of Michael Cooper, who is an investor. Please go ahead. Actually, I'm sorry, the last part of that last question answered my question, which was what has Needham actually presented as options or opportunities for you, and it doesn't sound like they've done an awful lot there. There have been things that we've looked at, but nothing that... Nothing's resulted anything yet or nothing to talk about.
Speaker Change: Right.
Michael Cooper: Actually I'm sorry, the last part of that last question answered My question, which was.
Speaker Change: What has need them actually.
Speaker Change: Presented as well.
Speaker Change: Options or opportunities for you and it doesn't sound like.
Speaker Change: Got an awful lot there.
Speaker Change: But.
Speaker Change: There have been things that we've looked at but nothing but.
Speaker Change: Nothing's resulted in anything you have nothing to talk about.
Speaker Change: Okay.
Michael Cooper: Great, thank you. Thank you.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Speaker Change: As a reminder to all the participants.
Operator: A reminder to all the participants, if you wish to ask a question, please press star and one on your telephone keypad.
Speaker Change: If you wish to ask a question. Please press star and one on the telephone keypad.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: The next question comes from the line of Jeff Bernstein with <unk> capital. Please go ahead.
Jeff Bernstein: The next question comes from the line of Jeff Bernstein with Silver Bernstein Capital. Please go ahead. Yeah, just a quick one. Could you give us what cash flow from operations was in the quarter and what your CapEx was? I don't have it for the quarter, but I have cash flow for the year. For the year, cash use and operating... Operator activities will be about 12.9 million dollars. Okay, and what was CapEx for the year? Uh, very little. Fixed asset additions during the year were, you know, like $45,000, very little, very minor. I'm looking at fixed asset acquisition right now.
Speaker Change: Yes.
Speaker Change: Quick one could you give us what cash flow from operations was in the quarter and what your Capex was.
Speaker Change: I don't have it for the quarter, but I have.
Speaker Change: Cash flow for the year.
Speaker Change: For the year.
Speaker Change: Cash used in operating.
Speaker Change: Operator.
Speaker Change: Activities to be about $12 9 million.
Speaker Change: Okay, and what was capex for the year.
Speaker Change: Very little.
Speaker Change: Fixed asset additions during the year.
Speaker Change: A year.
Speaker Change: Where do you like $45000 very little very modern looking at the fixed asset acquisition right now.
Speaker Change: Okay. That's great. Thank you.
Douglas Schirle: Okay, that's great. Thank you.
Speaker Change: Thank you.
Li-Lin Hsu: As there are no further questions, I would now like to hand the conference over to Mr. Hsu for closing remarks. Thank you all for joining us. We look forward to speaking with you again when we depart.
Speaker Change: As there are no further questions I would now like to hand, the conference over to Mr. Shaw for closing remarks.
Speaker Change: Okay.
Speaker Change: Thank you all for joining US we look forward to speaking with you again, when we do Paul.
Li-Lin Hsu: First Quarter Fiscal 2026 Result. Thank you.
Speaker Change: First quarter physical Tony Tony.
Speaker Change: <unk> hundred 96, the detail thank you.
Speaker Change: Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: [music].