In the latest financial quarter, GSI Technology experienced a setback, reporting a net loss per share of 21 cents. This figure marks a wider loss compared to the preceding year’s 16 cents per share.
The company’s revenues for the quarter were $4.6 million, down from $5.7 million in the same period a year before. GSI Technology attributes its financial results to alterations in product variety and layoffs that influenced gross margins.
GSI Technology’s quarterly outcomes were defined by decreasing revenues, narrowing gross margins, and continuous cost-cutting initiatives. Noteworthy is the strategic cost-reduction efforts executed during the quarter, with projected annual savings of $3.5 million aimed at enhancing cash flow.
The management team anticipates a possible recovery in demand within the SRAM sector as customer inventories normalize, potentially resulting in increased sales in upcoming quarters.
Revenue Breakdown
The decrease in revenue was primarily driven by reduced demand across key product lines. Sales to Nokia accounted for $0.8 million, representing 17.8% of total revenues, a drop from $1.2 million or 20.3% in the previous year. Nevertheless, military and defense sales showcased resilience, constituting 40.2% of total shipments, climbing from 34.8% a year earlier.
Operating Expenses
Operating expenses climbed to $7.3 million, slightly exceeding the $7.2 million reported in the corresponding quarter of the previous year. The uptick was mainly due to research and development (R&D) as well as selling, general, and administrative (SG&A) expenses. R&D costs totaled $4.8 million, up from $4.7 million in the previous period, while SG&A expenses stood at $2.6 million. Consequently, GSI Technology’s operating loss expanded to $5.6 million from $4.1 million year-on-year, reflecting increased expenses amid a revenue decline.
Gross Margins
The gross margin witnessed a notable decline from 54.7% in the second quarter of fiscal 2024 to 38.6% in the corresponding period of fiscal 2025. This reduction was attributed to shifts in the product mix and added expenses from workforce restructuring. The transition away from higher-margin SigmaQuad products negatively impacted margin quality, further exacerbated by severance costs that inflated manufacturing expenses.
Net Income
GSI Technology recorded a net loss of $5.5 million in the latest quarter, wider than the net loss of $4.1 million in the previous year. Interest and other income contributed $0.1 million to the results, showcasing an improvement from the corresponding period in the prior year.
Financial Position (As of Sept. 30, 2024)
GSI Technology’s cash and cash equivalents grew to $18.4 million, up from $14.4 million as of March 31, 2024. Total assets also rose to $47.4 million, increasing from $42.5 million at the conclusion of the previous fiscal year. On the other hand, current liabilities slightly increased to $5.5 million from $5.4 million as of March 31, 2024.
Stockholders’ equity, however, declined to $33.3 million from $36 million.
Management Guidance
For the third quarter of fiscal 2025, GSI Technology predicts revenues ranging between $4.7 million and $5.5 million, with an expected gross margin of approximately 50-52%.
Other Developments
Significant progress was made by GSI Technology on its Gemini-II benchmarking project during the period, on track to meet the December 31, 2024 deadline. Additionally, the company remains dedicated to fulfilling its Small Business Innovation Research contract with the U.S. Air Force Labs, targeting the delivery of the required software algorithms by the first quarter of calendar year 2025. These initiatives underscore GSI Technology’s commitment to innovation and diversification of offerings beyond conventional memory products.