GSI Technology Inc (GSIT) 2023 Q3 法說會逐字稿

Greetings, and welcome to the GSI Technology, Inc. Third Quarter Fiscal Year 2023 Results. (Operator Instructions) As a reader, this conference is being recorded.

您好，歡迎閱讀 GSI Technology, Inc. 2023 財年第三季度業績。 （操作員說明）作為讀者，正在錄製此會議。

It is now my pleasure to introduce your host, Mr. Lee-Lean Shu, Chairman, President and Chief Executive Officer. Thank you, Mr. Shu, you may begin.

現在我很高興向您介紹主持人，董事長、總裁兼首席執行官 Lee-Lean Shu 先生。謝謝舒先生，您可以開始了。

Good afternoon, and thank you for joining us to review our fiscal third quarter 2023 financial results. Third quarter revenue of $6.4 million was within guidance but at the lower end. Revenue growth was impacted this quarter by the uncertain outlook for the global economy. Despite this, we continue to see demand for our SRAM products and interest in our Radiation Hardened and Radiation Tolerant products.

下午好，感謝您加入我們，回顧我們 2023 財年第三季度的財務業績。第三季度 640 萬美元的收入在指導範圍內，但處於較低端。本季度收入增長受到全球經濟前景不明朗的影響。儘管如此，我們繼續看到對我們的 SRAM 產品的需求以及對我們的抗輻射和抗輻射產品的興趣。

While customer order patterns are variable right now, these fluctuations are related to economy and external factors, not changes in the market requirements for our products. Despite the lower revenue in the quarter, increased sales of higher-margin products, resulted in gross margin of 57.5% exceeding the high end of our guidance range.

雖然目前客戶訂單模式多變，但這些波動與經濟和外部因素有關，與我們產品的市場需求變化無關。儘管本季度收入較低，但利潤率較高的產品銷量有所增加，導致毛利率達到 57.5%，超過了我們指導範圍的上限。

While research and development costs declined sequentially, we saw an increase in selling, general and administrative expenses, primarily related to difference in the level of quarterly adjustments to contingent consideration and severance expense related to recent layoffs.

雖然研發成本環比下降，但我們看到銷售、一般和管理費用有所增加，這主要與對或有對價和近期裁員相關的遣散費的季度調整水平差異有關。

To ensure success and align our resource within the company's goals, we launched several cost reduction initiatives at the end of November 2022. The executive team took a comprehensive approach to identify and implement our expense reduction measures, which included a thorough review of all expenses and ways of streamline process and improve operational efficiency.

為確保成功並使我們的資源與公司目標保持一致，我們在 2022 年 11 月底啟動了多項成本削減計劃。執行團隊採取了全面的方法來確定和實施我們的費用削減措施，其中包括徹底審查所有費用和簡化流程和提高運營效率的方法。

We have 2 objectives with this strategy, one to reduce our cash burn and two, to align our resources around developing the APU. We are on track to achieve $7 million in savings on an annualized basis through target cost-reductions. These measures aim to right-size our operation and precisely manage spending to increase efficiency and focus our resources on advancing the proprietary APU technology.

我們的這一戰略有兩個目標，一個是減少我們的現金消耗，另一個是圍繞開發 APU 調整我們的資源。通過降低成本目標，我們有望每年節省 700 萬美元。這些措施旨在調整我們的運營規模並精確管理支出，以提高效率並將我們的資源集中在推進專有的 APU 技術上。

Let me update you on where we are today with APU hardware and software. The hardware development team is on track to take out Gemini-II in the first half of this calendar year, which puts us on the schedule to see the first in by late summer. In that case, we could test the Gemini-II chip by early fall. If everything goes accordingly, we could have a second to fix back the early last calendar year.

讓我向您介紹我們目前在 APU 硬件和軟件方面的進展。硬件開發團隊有望在本日曆年上半年推出 Gemini-II，這讓我們可以按計劃在夏末看到第一款產品。在這種情況下，我們可以在初秋之前測試 Gemini-II 芯片。如果一切順利，我們可以花一秒鐘的時間來修復上個日曆年的年初。

In parallel, once we have a chip that the software team can use, they will start developing the API and the library for Gemini-II. Keep in mind that it took to fix the old box in the Gemini-I to increase the. Gemini-II has Ax memory density over Gemini-1 and has 30x cost performance improvements.

同時，一旦我們有了軟件團隊可以使用的芯片，他們就會開始為 Gemini-II 開發 API 和庫。請記住，需要修復 Gemini-I 中的舊盒子才能增加。 Gemini-II 的內存密度比 Gemini-1 高出 30 倍。

Gemini-II can greatly enhance our market push of APU technology and provide further substantial savings in power and mono server footprint while enabling large-scale real-time search and HPC workloads.

Gemini-II 可以極大地增強我們對 APU 技術的市場推動力，並進一步大幅節省功耗和單服務器佔用空間，同時支持大規模實時搜索和 HPC 工作負載。

Software for Gemini-1 is an area of intense focus currently. We have a full build up library deployed and used by customers and one research institute has been able to library based only for their projects. Our GRA library is developed for SAR applications, and we have completed a POC project with AI/Elta based on this. Elta is also evaluating the GPU solution to benchmark against the APU. We could see some initial sales once the APU performance is proven favorable. In the meantime, we are marketing the SAR solution to other customers.

Gemini-1 的軟件是目前備受關注的領域。我們有一個完整的構建庫供客戶部署和使用，一個研究機構已經能夠僅為他們的項目建立庫。我們的GRA庫是為SAR應用開發的，我們基於此完成了與AI/Elta的POC項目。 Elta 還在評估 GPU 解決方案，以針對 APU 進行基準測試。一旦 APU 性能被證明是有利的，我們就可以看到一些初始銷售。與此同時，我們正在向其他客戶推銷 SAR 解決方案。

We have recently improved our GSL library for similarity search applications. We are engaging with a large corporation for the POC project for our own print similarity search project that requires very high accuracy and low latency. The improved GSL library is perfectly suited for this application.

我們最近改進了用於相似性搜索應用程序的 GSL 庫。我們正在與一家大公司合作進行 POC 項目，用於我們自己的印刷相似性搜索項目，該項目需要非常高的準確性和低延遲。改進後的 GSL 庫非常適合此應用程序。

On the competitor front, we have completed competitor that customers are using to program APU with. We are in the process of [Indiscernible 00:05:56] competitor to allow customers to run API application and their library. Currently, is still in internal use and will be released for general use in July.

在競爭對手方面，我們已經完成了客戶用來對 APU 進行編程的競爭對手。我們正處於 [音頻不清晰 00:05:56] 競爭對手的過程中，以允許客戶運行 API 應用程序及其庫。目前，仍在內部使用中，將在 7 月發布以供一般使用。

Now I will hand the call over to Didier, who will discuss our business performance further. Please go ahead, Didier.

現在我將把電話轉給 Didier，他將進一步討論我們的業務表現。請繼續，迪迪埃。

Thank you, Lee-Lean. Let me switch now to customer and product breakdown for the third quarter. In the third quarter of fiscal 2023, sales to Nokia were $1.3 million or 20.0% of net revenues compared to $1.9 million or 24.0% of revenues in the same period a year ago and $1.2 million or 13.6% of net revenues in the prior quarter.

謝謝你，李林。現在讓我切換到第三季度的客戶和產品細分。在 2023 財年第三季度，對諾基亞的銷售額為 130 萬美元，占淨收入的 20.0%，而去年同期為 190 萬美元，佔收入的 24.0%，上一季度為 120 萬美元，占淨收入的 13.6%。

Military/defense sales were 26.2% of third quarter shipments compared to 27.1% of shipments in the comparable period a year ago and 22.4% of shipments in the prior quarter. SigmaQuad sales were 45.2% of third quarter shipments compared to 40.5% in the third quarter of fiscal 2022 and 58.1% in the prior quarter.

軍事/國防銷售額佔第三季度出貨量的 26.2%，而去年同期為 27.1%，上一季度為 22.4%。 SigmaQuad 銷售額佔第三季度出貨量的 45.2%，而 2022 財年第三季度為 40.5%，上一季度為 58.1%。

Regarding increased production costs, we are evaluating where we can pass on the increased wafer prices that TSMC announced last year, which became effective starting January of this year. Gemini-I hardware is now market-ready. We have 2 board configurations, the LiDA E, which is in production and the LiDA S, which is an SSD form factor board and is being finalized today.

關於增加的生產成本，我們正在評估我們可以在哪裡轉嫁台積電去年宣布的晶圓價格上漲，該價格從今年 1 月開始生效。 Gemini-I 硬件現已上市。我們有 2 種板配置，正在生產的 LiDA E 和 LiDA S，它是 SSD 外形板，今天正在定型。

In the third quarter, we shipped 1 media E-board to a potential SAR customer, and we shipped 1 LiDA E server to a research institute that will explore Gemini-I for encryption applications.

第三季度，我們向一個潛在的 SAR 客戶運送了 1 個媒體 E-board，並向一個研究機構運送了 1 個 LiDA E 服務器，該研究所將探索 Gemini-I 的加密應用。

I'd now like to hand the call over to Doug. Doug, go ahead, please.

我現在想把電話轉給道格。道格，請繼續。

Thank you, Didier. We reported a net loss of $4.8 million or $0.20 per diluted share on net revenues of $6.4 million for the third quarter of fiscal 2023 compared to a net loss of $4.6 million or $0.19 per diluted share and net revenues of $8.1 million for the third quarter of fiscal 2022, and a net loss of $3.2 million or $0.13 per diluted share on net revenues of $9 million for the second quarter of fiscal 2023.

謝謝你，迪迪埃。我們報告 2023 財年第三季度淨收入為 640 萬美元，淨虧損 480 萬美元或每股攤薄收益 0.20 美元，而 2023 財年第三季度淨虧損為 460 萬美元或攤薄後每股收益 0.19 美元，淨收入為 810 萬美元2022 財年淨虧損 320 萬美元或每股攤薄收益 0.13 美元，而 2023 財年第二季度的淨收入為 900 萬美元。

Gross margin was 57.5% compared to 55.3% in the prior year period and 62.6% in the preceding second quarter. The changes in gross margin were primarily due to changes in product mix sold in the 3 periods.

毛利率為 57.5%，去年同期為 55.3%，上一季度為 62.6%。毛利率的變化主要是由於三個時期內銷售的產品組合發生變化。

Total operating expenses in the third quarter of fiscal 2023 were $8.5 million compared to $9 million in the third quarter of fiscal 2022 and $8.8 million in the prior quarter. Research and development expenses were $5.5 million compared to $6.2 million in the prior year period and $6.4 million in the prior quarter.

2023 財年第三季度的總運營費用為 850 萬美元，而 2022 財年第三季度為 900 萬美元，上一季度為 880 萬美元。研發費用為 550 萬美元，上年同期為 620 萬美元，上一季度為 640 萬美元。

Selling, general and administrative expenses were $3 million in the quarter ended December 31, 2022, compared to $2.8 million in the prior year quarter and $2.4 million in the previous quarter.

截至 2022 年 12 月 31 日的季度，銷售、一般和管理費用為 300 萬美元，上年同期為 280 萬美元，上一季度為 240 萬美元。

Third quarter fiscal 2023 operating loss was $4.8 million compared to $4.5 million in the prior year period and an operating loss of $3.2 million in the prior quarter. Third quarter fiscal 2023 net loss included net interest and other income of $61,000 and a tax provision of $84,000 compared to $15,000 in net interest and other income and a tax provision of $64,000 for the same period a year ago. In the preceding second quarter, net loss included net interest and other income of $14,000 and a tax provision of $37,000.

2023 財年第三季度營業虧損為 480 萬美元，上年同期為 450 萬美元，上一季度營業虧損為 320 萬美元。 2023 財年第三季度淨虧損包括 61,000 美元的淨利息和其他收入以及 84,000 美元的稅收撥備，而去年同期的淨利息和其他收入為 15,000 美元，稅收撥備為 64,000 美元。在之前的第二季度，淨虧損包括 14,000 美元的淨利息和其他收入以及 37,000 美元的稅收撥備。

Total third quarter pre-tax stock-based compensation expense was $654,000 compared to $740,000 in the comparable quarter a year ago and $661,000 in the prior quarter.

第三季度基於股票的稅前薪酬總支出為 654,000 美元，而去年同期為 740,000 美元，上一季度為 661,000 美元。

At December 31, 2022, we had $35.2 million in cash, cash equivalents and short-term investments and $0 in long-term investments compared to $44 million in cash, cash equivalents and short-term investments and $3.3 million in long-term investments at March 31, 2022.

截至 2022 年 12 月 31 日，我們的現金、現金等價物和短期投資為 3520 萬美元，長期投資為 0 美元，而現金、現金等價物和短期投資為 4400 萬美元，長期投資為 330 萬美元2022 年 3 月 31 日。

Working capital was $39.2 million as of December 31, 2022, versus $45.8 million at March 31, 2022, with no debt. Stockholders' equity as of December 31, 2022, was $54.8 million compared to $64.5 million as of the fiscal year ended March 31, 2022.

截至 2022 年 12 月 31 日，營運資金為 3920 萬美元，而 2022 年 3 月 31 日為 4580 萬美元，無債務。截至 2022 年 12 月 31 日的股東權益為 5480 萬美元，而截至 2022 年 3 月 31 日止的財政年度為 6450 萬美元。

Regarding our outlook for the upcoming fiscal fourth quarter, we anticipate net revenues in the range of $5 million to $5.6 million, with gross margin of approximately 49% to 51%.

關於我們對即將到來的第四財季的展望，我們預計淨收入在 500 萬美元至 560 萬美元之間，毛利率約為 49% 至 51%。

Operator, at this point, we would like to open the call to Q&A.

接線員，此時，我們想打開問答環節。

(Operator Instructions) And our first question will come from Kurt Caramanidis with Carl Hennig, Inc.

（操作員說明）我們的第一個問題將來自 Kurt Caramanidis 和 Carl Hennig, Inc.。

What are you thinking cash burn looks like maybe out kind of looking out this year with the revenues now being looking quite a bit lower per quarter may be?

你認為今年的現金消耗看起來像什麼，因為現在每個季度的收入看起來要低得多？

We were looking at somewhere around $13 million a year. And the cost cutting will save us about $7 million a year. So we'll be better off than we were a year gradually.

我們的目標是每年大約 1300 萬美元。成本削減每年將為我們節省大約 700 萬美元。所以我們會比一年前過得更好。

I mean is it going to be like $4 million or $5 million a quarter?

我的意思是它會是每季度 400 萬美元還是 500 萬美元？

No, no, no. I think we'll probably be something less than $12 million or $13 million that we were previously seeing for the year.

不不不。我認為我們可能會比我們之前看到的今年少 1200 萬美元或 1300 萬美元。

Okay. Is the sale leaseback an option for the building? Or has that been looked into as you're doing other measures?

好的。售後回租是建築物的一種選擇嗎？還是在您採取其他措施時對此進行了調查？

It's something that we looked at, and it's something that we can consider for the future.

這是我們看到的東西，也是我們可以為未來考慮的東西。

And our next question is from [Luke Bowen], who's a private investor.

我們的下一個問題來自 [Luke Bowen]，他是一位私人投資者。

Wondering if you all have come across any new application ideas and just generally, which APU applications are you most excited about? And just kind of in context of...

想知道你們是否都遇到過任何新的應用創意，一般來說，您對哪些 APU 應用最感興趣？只是在……的背景下

So we're set up...

所以我們設置...

Yes, go ahead.

好，去吧。

I'm sorry, can you clarify your question.

對不起，你能澄清你的問題嗎？

Yes, I was going to clarify that maybe in the context of, as you've all been exploring your technology and exploring marketing channels, going to conferences like the buzzwords conference. Yes, just wondering if anything new has arisen or light bulbs getting brighter?

是的，我想澄清一下，也許在這樣的背景下，因為你們都在探索你們的技術和營銷渠道，去參加像流行語會議這樣的會議。是的，只是想知道是否出現了新情況或燈泡變亮了？

Right. So right now, we're focused on the SAR, as Lee-Lean mentioned so that's we've done a POC, and we've obtained some very nice algorithm to go along with our hardware. So the benchmarking we've done against CPUs and GPUs are very promising for us, both on a performance level, a power level and a form factor level, which is important depending on where they deploy some of these systems.

正確的。所以現在，我們專注於 SAR，正如 Lee-Lean 提到的那樣，我們已經完成了 POC，並且我們已經獲得了一些非常好的算法來配合我們的硬件。因此，我們針對 CPU 和 GPU 所做的基準測試對我們來說非常有前途，無論是在性能水平、功率水平還是外形尺寸水平上，這都很重要，具體取決於他們部署其中一些系統的位置。

And so that's one area that we've started -- well, not started, but we've been contacting all the SAR players, both on a commercial level and on a government level. As far as -- I'm sorry, the other market is the fast vector search is something that we have already put in a plug and we've talked about in the past. Since then, there are a few other applications that we've had customers come to us with. One of them we -- I mentioned in my script, which was one of the boards or systems, I should say, it was a server that we shipped last quarter was for encryption application.

所以這是我們已經開始的一個領域——好吧，還沒有開始，但我們一直在聯繫所有 SAR 參與者，包括商業層面和政府層面。至於——對不起，另一個市場是快速矢量搜索，我們已經插入了一個插件，我們過去也談過。從那時起，我們已經有一些其他的應用程序讓客戶來找我們。其中一個我們 - 我在我的腳本中提到過，這是一個板或系統，我應該說，它是我們上個季度交付的服務器，用於加密應用程序。

And there are a few others that have recently come up. A little early to talk about them just because we haven't gone through the process of seeing what our advantage is yet. But there are certainly no lack of different applications for the Gemini chip.

最近還出現了一些其他問題。談論它們有點早，因為我們還沒有經歷過看到我們的優勢是什麼的過程。但Gemini芯片肯定不乏不同的應用。

That's excellent. Yes, it's really good to hear you can be able to move forward confidently checking off more and more boxes. Okay. Kind of I think discharge is one of the other questions because I know you're -- well, I guess, I'll just throw it out there as a general prospect, not necessarily for the near term, but I saw that Amazon Prime Air launched their first test sites for their delivery drone program, and I know your advisor was the original leader of that program.

那太好了。是的，很高興聽到您能夠自信地繼續檢查越來越多的方框。好的。有點我認為出院是其他問題之一，因為我知道你 - 好吧，我想，我只是把它作為一般前景扔在那裡，不一定是短期的，但我看到亞馬遜 Prime Air 為他們的交付無人機項目啟動了他們的第一個測試站點，我知道你的顧問是該項目的最初領導者。

Yes.

是的。

So just curious if that could be looking at mobile data and autonomous vehicles, drones, vitals, yes, like small flying vehicles for commercial transportation and personal transportation. I wonder if you're still seeing that as a potential field for coordinate managing mobile data like that?

所以很好奇這是否可以關注移動數據和自動駕駛汽車、無人機、生命體徵，是的，比如用於商業運輸和個人運輸的小型飛行器。我想知道您是否仍將其視為協調管理移動數據的潛在領域？

So we are, but more for the Gemini chip. And the reason I say that is, if you're familiar with our solution, our Gemini-I chip goes on a LiDAboard, as I mentioned. And the LiDAboard for the Gemini-I has an FPGA on there that has certain functionality that is critical for our solution.

所以我們是，但更多的是雙子座芯片。我這麼說的原因是，如果您熟悉我們的解決方案，正如我提到的，我們的 Gemini-I 芯片會安裝在 LiDAboard 上。 Gemini-I 的 LiDAboard 上有一個 FPGA，它具有對我們的解決方案至關重要的某些功能。

With Gemini-II, we take that functionality that's on the FPGA, and we put it within the Gemini-II chip. And so now we can rid ourselves of that large FPGA. And so some of the applications you're talking about power and form factor being smaller is more important. And so being able to rid ourselves of that FPGA will allow us to pursue those markets that were really a bit too challenging for our Gemini-I chip.

對於 Gemini-II，我們採用了 FPGA 上的功能，並將其放入 Gemini-II 芯片中。所以現在我們可以擺脫那個大型 FPGA。因此，您正在談論的一些應用程序的功率和外形尺寸更小更為重要。因此，能夠擺脫 FPGA 將使我們能夠追求那些對我們的 Gemini-I 芯片來說確實有點太具有挑戰性的市場。

Yes. All right. Yes, because thinking about that and those like next step prospects is kind of thinking about the sensitivity of timing and business relationships, especially these advanced fields that are requiring a lot of R&D and my engender kind of a commitment from these large companies that are developing their programs and the component companies and how they're say, making systems on chips that are highly customized and requiring a lot of investment. They hope to get something back on and just trying to think about how they might approach or how you might approach that relationship in terms of holding the place and for the future development and not having to directly compete with all these like inefficiently developed system on chips toe-to-toe, but rather kind of for them to anticipate being able to adopt your hardware and even your software and to kind of have that in mind as they develop these programs. Yes, kind of wondering if that's something that you are seeing in terms of a 1- to 2-year development plan as you talk to potential clients?

是的。好的。是的，因為考慮到這一點以及下一步的前景，在某種程度上是在考慮時間和業務關係的敏感性，尤其是這些需要大量研發的先進領域，以及我對這些正在發展的大公司的承諾他們的程序和組件公司以及他們怎麼說，製造高度定制且需要大量投資的芯片系統。他們希望重新獲得一些東西，只是想考慮他們如何處理或您如何處理這種關係，以保持地位和未來發展，而不必直接與所有這些公司競爭，例如開發效率低下的芯片系統從頭到腳，而是讓他們預期能夠採用您的硬件甚至您的軟件，並在開發這些程序時考慮到這一點。是的，有點想知道在與潛在客戶交談時，您是否在 1 到 2 年的發展計劃中看到了這一點？

So I want to make sure I -- I'm not sure I fully understood your question. But as far as custom silicon and system on chips and everything out there, most everything has really been geared towards the training portion of the market. And as we've discussed in the past, that's not the application we're focused on. We're focused on similarity search. And there are obviously other applications or computation and intensive that our solution lends itself well.

所以我想確定我——我不確定我是否完全理解你的問題。但就定制芯片和片上系統以及那裡的一切而言，大多數一切都真正面向市場的培訓部分。正如我們過去所討論的那樣，這不是我們關注的應用程序。我們專注於相似性搜索。顯然，我們的解決方案非常適合其他應用程序或計算和密集型應用程序。

And because of the way we've architected our part where we actually do the processing and the search in place as opposed to having effective data and rewrite data we -- that technology we have is [PAM] protected, and we haven't seen anybody try to do that at this point. And so we have carved out a niche in the similarity search.

由於我們設計了我們實際進行處理和搜索的部分的方式，而不是擁有有效數據和重寫數據，我們 - 我們擁有的技術受到 [PAM] 保護，我們還沒有看到在這一點上，任何人都試圖這樣做。因此，我們在相似性搜索中開闢了一個利基市場。

And so as far as other silicon coming in or other SoCs, it's really, like I said, most of the solutions we've seen have really been geared around trying to make the training faster.

因此，就其他芯片或其他 SoC 而言，就像我說的那樣，我們看到的大多數解決方案實際上都是為了加快訓練速度。

Our next question is from George Gaspar, who's a private investor.

我們的下一個問題來自私人投資者喬治加斯帕。

George Gasper here. Could you relate a little bit more detail about how many employees you have now versus when you started to disengage employment? And how does that relate? How many total people have left? And what is your employment number now? And could you give us an idea of the -- how much of the stack -- how many shares of stack were held by the employees that you've left go?

喬治加斯帕在這裡。您能否更詳細地說明一下您現在擁有多少員工以及何時開始脫離工作？這有什麼關係？總共有多少人離開了？你現在的就業人數是多少？你能告訴我們你離開的員工持有多少股份嗎？

So we had approximately a little over 180 in total. Now we're down to like right around 165 or so. The people that left, I don't recall the exact number options that were canceled upon them leaving, but it wasn't a significant number. I mean, we still have about, I want to say maybe about $8.5 million or so option shares outstanding.

所以我們總共有大約 180 多一點。現在我們降到了 165 左右左右。離開的人，我不記得在他們離開時被取消的確切數量選項，但這不是一個重要的數字。我的意思是，我們還有大約 850 萬美元左右的已發行期權股票。

Yes. And say that again, there are how many shares are outstanding to employees?

是的。再說一遍，有多少股是發給員工的？

I want to say about $8.5 million [Indiscernible 00:21:29] that are being grounded.

我想說大約 850 萬美元 [音頻不清晰 00:21:29] 被停飛。

$8.5 million. And then the $654,000 of tax-based stock issuance in this recent quarter, how does that stack up in terms of the total expense for employees, noncash and cash?

850 萬美元。然後是最近一個季度 654,000 美元的基於稅收的股票發行，這與員工、非現金和現金的總支出相比如何？

I can get back to you offline. I don't have all that information in front of me right now. But I can get it for you if you need it. But the stock-based compensation expenses is, we've been running around that level for several years, and I don't see it going up significantly. It will probably be a similar number.

我可以離線回复你。現在我面前沒有所有這些信息。但如果你需要的話，我可以幫你拿。但基於股票的薪酬支出是，我們多年來一直在這個水平附近運行，而且我認為它不會顯著上升。它可能是一個相似的數字。

Okay. But obviously, the stock-based stock issuance is important to stabilize your total expense structure. And do we have to assume that, that's going to stay in that range of the last quarter, would you say that $654,000?

好的。但顯然，以股票為基礎的股票發行對於穩定你的總費用結構很重要。我們是否必須假設，這將保持在上個季度的範圍內，你會說 654,000 美元嗎？

Yes, I would say so. And that isn't -- that's not shares that we've issued. That's just assumed value of the options that we've granted to employees. The accounting rules require us to place the value on the option grants and then expense them over a period of time.

是的，我會這麼說。那不是——那不是我們發行的股票。這只是我們授予員工的期權的假設價值。會計規則要求我們對期權授予進行估價，然後在一段時間內將其計為費用。

Right. Okay. And then this $654,000 is rated as an expense in terms of your operation on a quarterly basis, correct? In other words ...

正確的。好的。然後這 654,000 美元按季度計為您的運營費用，對嗎？換句話說 ...

We record that in the... We record that in the income statement every quarter. It's a noncash expense.

我們記錄在……我們每個季度在損益表中記錄。這是一項非現金支出。

It's a noncash expense. Okay. Yes. All right. Okay. And the gross margin decline that you're looking at for the current quarter. Is there some cost structure associated with that in terms of employees that recently have left or other things that are going on, what you're looking at less sales that you've expressed in your release today. So that obviously could easily have an effect on the gross margin decline. But is there something else going on in terms of the cost structure associated with further development of Gemini-II relative to other quarters? How does it -- what's the comparison in terms of cost structure relative to what you've done on Gemini-I and now you're doing in Gemini-II?

這是一項非現金支出。好的。是的。好的。好的。以及您在本季度看到的毛利率下降。就最近離開的員工或正在發生的其他事情而言，是否有一些成本結構與此相關，您正在尋找的銷售額比您今天發布的銷售額少。因此，這顯然很容易對毛利率下降產生影響。但是，相對於其他季度，與 Gemini-II 的進一步開發相關的成本結構是否有其他變化？它是如何做的——相對於你在 Gemini-I 上所做的和現在你在 Gemini-II 上所做的，在成本結構方面的比較是什麼？

Well, Lee-Lean can talk about your last question, but in terms of the gross margin, the layoffs really didn't impact it that much. Most of the layoffs other than a couple of hundred thousand dollars are all in operating expenses, not cost of goods sold. The gross margin is lower because the revenue is lower, and we still have fixed overhead expenses that need to be covered by the margin on sales. So that's why the gross margin number is down. The product mix is still a good product mix with good margins associated with each shipment.

好吧，Lee-Lean 可以談談你的最後一個問題，但就毛利率而言，裁員確實沒有太大影響。除了幾十萬美元之外，大部分裁員都是運營費用，而不是銷售成本。毛利率較低是因為收入較低，而且我們仍有固定的間接費用需要由銷售利潤率來支付。這就是毛利率下降的原因。產品組合仍然是一個很好的產品組合，每次發貨都有很好的利潤率。

I see. Okay. Now last question would be back on the progress being made in Gemini-II. If this has taken a long time for the company to really generate customers giving you orders and expanding what they are going to use it for, do you feel like you're very close now in that by the end of the current quarter, say, the end of March, that you'll be able to actually have orders in Gemini -- for Gemini-II going forward? Or do you envision that it's still going to take more time into the -- to the June quarter or the September quarter? Can you kind of give us an idea of what you're thinking about in terms of really starting to spin out some revenue stream here?

我懂了。好的。現在最後一個問題將回到 Gemini-II 中取得的進展。如果公司花了很長時間才真正產生客戶給你訂單並擴展他們將使用它的用途，你覺得你現在非常接近本季度末，比如說， 3 月底，您將能夠在 Gemini 中實際收到訂單——Gemini-II 的訂單？還是您認為進入 6 月季度或 9 月季度仍需要更多時間？你能告訴我們你在真正開始在這里分拆一些收入來源方面的想法嗎？

Yes. So at this point, we're still seeding the market and building the pipeline. As I mentioned, we shipped a couple of systems last quarter. We're anticipating to ship a few more, and it's building that pipeline now. And so we don't have any production orders at this point. It's still building that pipeline.

是的。所以在這一點上，我們仍在播種市場並建設管道。正如我提到的，我們上個季度交付了幾個系統。我們預計會再發貨一些，現在正在建設這條管道。所以我們目前沒有任何生產訂單。它仍在建設該管道。

I see. Okay. And have you been, if affected negatively on the tremendous storm conditions in California from the middle of the state up? Has that created any kind of problem for you to deal with?

我懂了。好的。如果加利福尼亞州中部以上的巨大風暴條件對您造成負面影響，您是否受到了負面影響？這是否給您帶來了任何需要處理的問題？

No, not at all.

一點都不。

Okay. All right. Okay. Well, I think that this has taken a long time in terms of years to get this action going forward to Gemini-I and into II. And if something's got to really start to happen here in terms of getting -- and the interesting thing is that with this decline that is being seen in your business, generally speaking. I mean when I say your business, I mean, the general business associated with the chips, it would seem like what has been happening in the last couple of 3 quarters generally for the industry, would really put you in a position to take advantage of really getting up on track and going with some business that would be developed from what you've been trying to accomplish in, say, the last year. Can you say anything about that?

好的。好的。好的。好吧，我認為這需要很長時間才能讓這個行動推進到 Gemini-I 和 II。如果在獲得方面真正開始發生某些事情 - 有趣的是，一般來說，隨著您的業務出現這種下降。我的意思是當我說你的業務時，我的意思是，與芯片相關的一般業務，似乎在過去三個季度中整個行業發生的事情，真的會讓你能夠利用真正走上正軌並開展一些業務，這些業務將根據您在去年一直努力完成的工作而發展。你能說些什麼嗎？

I'm not sure we follow the train of thought there. I mean, certainly, we've had the general slowdown in our legacy business, and we're continuing to pursue the new products. But I'm not sure we followed your trend of thought there.

我不確定我們是否遵循那裡的思路。我的意思是，當然，我們的傳統業務普遍放緩，我們將繼續追求新產品。但我不確定我們是否遵循了您的想法。

Okay. Well, what I'm just saying is that with the business having fallen off and trying to see ways of taking advantage of moving into a broader customer base as you're starting to move forward into the Gemini-II area that may be the fact that the industry has got to come out of this decline that it's experiencing. But with you having something new to bring to the market that we -- it would be possible for GSIT to really take advantage of maybe some momentum because of what's happened in the industry going downward. And that if you're really getting close now to introducing innovations that you've been working on in Gemini-II, I would think that the shareholders of your company should be certainly looking forward to a turnaround in revenue stream beyond the first quarter, beyond this current quarter.

好的。好吧，我只是想說的是，隨著業務的下滑，並且隨著您開始進入 Gemini-II 領域，試圖尋找利用進入更廣泛客戶群的方法，這可能是事實該行業必須走出它正在經歷的衰退。但是，如果你有一些新東西可以推向市場，那麼 GSIT 可能會真正利用一些勢頭，因為行業正在發生下滑。而且，如果您現在真的接近於引入您一直在 Gemini-II 中進行的創新，我認為貴公司的股東肯定會期待第一季度之後收入流的好轉，超出當前季度。

Understood. Yes.

明白了。是的。

Sorry?

對不起？

Right. Exactly, yes. Yes. We do anticipate -- even in the legacy, we anticipate a bounce back by the middle of the year as far as the revenues go based off of input from customers. And again, it's just we need to continue the process with the APU, continue the development we're doing with researchers with the government applications and continue to just move forward. It's a process.

正確的。沒錯，是的。是的。我們確實預計 - 即使在傳統中，我們預計根據客戶的投入，收入會在年中反彈。再一次，我們只需要繼續 APU 的流程，繼續我們與研究人員一起為政府應用所做的開發，並繼續向前發展。這是一個過程。

I see. Okay.

我懂了。好的。

In the marketplace -- in the marketplace, we are in, we see the Gemini-I has a better solution than all the competing products. And the Gemini-II is the least and bounds better than the Gemini-I. And we are pretty confident that that will create the market leader for the -- in the area we are in.

在市場上——在市場上，我們看到 Gemini-I 擁有比所有競爭產品更好的解決方案。並且 Gemini-II 比 Gemini-I 最少，但也比 Gemini-I 好。我們非常有信心，這將為我們所在的領域創造市場領導者。

(Operator Instructions) As there are no further questions at this time, I would like to turn the floor back over to management for closing comments.

（操作員說明）由於此時沒有其他問題，我想將發言權轉回管理層以徵求結束意見。

Thank you all for joining us. We look forward to speaking with you again when we report our fourth quarter and full year fiscal 2022 results. Thank you.

謝謝大家加入我們。我們期待在報告 2022 財年第四季度和全年業績時再次與您交談。謝謝。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。