GSI Technology Inc (GSIT) 2025 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's second-quarter fiscal 2025 results conference call. (Operator Instructions)

女士們先生們，謝謝你們的支持。歡迎參加廣船國際科技 2025 財年第二季業績電話會議。 （操作員說明）

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.

在我們開始今天的電話會議之前，該公司要求我閱讀以下安全港聲明。本次電話會議討論的事項可能包括有關 GSI Technology 未來事件和未來績效的前瞻性陳述，這些陳述涉及可能導致實際結果與預期存在重大差異的風險和不確定性。這些風險和不確定性在公司向美國證券交易委員會提交的 10-K 表格中進行了描述。

Additionally, I have also been asked to advise you that this conference call is being recorded today, October 24, 2024, at the request of GSI Technology. Lee-Lean Shu, the company's Chairman, President and Chief Executive Officer, will be hosting the call today. With him are Douglas Schirle, Chief Financial Officer; and Didier Lasserre, Vice President of Sales.

此外，我還被要求告知您，應 GSI Technology 的要求，本次電話會議將於今天（2024 年 10 月 24 日）進行錄製。該公司董事長、總裁兼執行長 Lee-Lean Shu 將主持今天的電話會議。與他同行的還有財務長 Douglas Schirle；和銷售副總裁 Didier Lasserre。

I would now like to turn the conference over to Mr. Shu. Please go ahead, sir.

現在我請舒先生主持會議。請繼續，先生。

Good afternoon, and thank you for joining us to review our second quarter fiscal 2025 financial results. We are starting to see a significant turnaround in our SRAM business this quarter, driven by two key factors. First, existing customers are actively depleting their channel inventories and we anticipate they will resume orders in the upcoming quarters.

下午好，感謝您與我們一起回顧我們 2025 財年第二季的財務表現。在兩個關鍵因素的推動下，本季我們的 SRAM 業務開始出現重大轉變。首先，現有客戶正在積極消耗通路庫存，我們預計他們將在未來幾季恢復訂單。

Second, we have secured a new SRAM design with significant growth potential. Our longstanding partnership with the provider in the semiconductor manufacturing process is using significant demand related to a new AI chip. Didier will cover this exciting development in more detail in his comments.

其次，我們已經獲得了具有巨大成長潛力的新 SRAM 設計。我們與半導體製造流程供應商的長期合作關係正在利用與新型人工智慧晶片相關的巨大需求。迪迪埃將在他的評論中更詳細地介紹這一令人興奮的發展。

I want to update you on our phase one and two SBIR contracts. We are on track to meet the deadline for the Gemini-II benchmarking projects and fulfill our SBIR contract with the US Air Force Research Labs by December 31, 2024, followed by the delivery of the software algorithm in the first quarter of calendar 2025. Didier will expand further on our SBIR opportunities in his comments.

我想向您介紹我們第一階段和第二階段 SBIR 合約的最新情況。我們預計在 2024 年 12 月 31 日之前滿足 Gemini-II 基準測試項目的最後期限，並履行與美國空軍研究實驗室的 SBIR 合同，隨後在 2025 年第一季度交付軟體演算法。進一步闡述我們的SBIR 機會。

Switching now to the APU development. We remain on track to meet our milestones on Gemini-II, including the benchmarking, which will be completed by the end of this year. We are excited that we have software fixes for the bugs in the first spin of Gemini-II. This means we are much further ahead on the Gemini-II software development and the liability building at this stage than we will with Gemini-I.

現在轉向 APU 開發。我們仍有望實現 Gemini-II 的里程碑，包括今年年底完成的基準測試。我們很高興我們對 Gemini-II 第一次旋轉中的錯誤進行了軟體修復。這意味著現階段我們在 Gemini-II 軟體開發和責任建立方面比 Gemini-I 領先得多。

Lastly, on the APU road map, we are in early stage of hardware development of a potential APU for use with LLM which we named [Plato]. On our third quarter earnings conference call, I will provide more a detailed plan for this product and its potential applications. However, I want to ensure stakeholders now that we have a road map beyond Gemini-I and II for the APU that, we can execute given the company's resources.

最後，在 APU 路線圖上，我們正​​處於與 LLM 一起使用的潛在 APU 硬體開發的早期階段，我們將其命名為 [Plato]。在我們的第三季財報電話會議上，我將提供有關該產品及其潛在應用的更詳細的方案。然而，我想向利害關係人保證，我們現在已經有了一個超越 Gemini-I 和 II 的 APU 路線圖，我們可以根據公司的資源來執行該路線圖。

In previous call, I discussed our SRAM opportunities -- SAR opportunities. Two companies are currently using the APU for SAR applications. And both projects are progressing well. Didier will give an update on the current status of these engagements. For the fiscal second quarter, we reported revenue of $4.6 million, in line with our guidance.

在之前的電話會議中，我討論了我們的 SRAM 機會——SAR 機會。目前有兩家公司正在將 APU 用於 SAR 應用。而且這兩個項目都進展順利。迪迪埃將提供這些活動的最新狀態。第二財季，我們公佈的營收為 460 萬美元，符合我們的指引。

Our gross margin was under pressure this quarter due to the mix of products and nonrecurring severance costs related to workforce reductions in manufacturing.

由於產品組合以及與製造業裁員相關的一次性遣散費，本季我們的毛利率面臨壓力。

During the quarter, we introduced strategic cost-cutting measures to extend our financial runway and capitalize on our immediate and long-term opportunities. This action, including workforce reductions, across all departments and enhanced operational efficiency, a project to generate annualized savings of about $3.5 million. We picked this restructuring initiative and improved as revenue outlook to reduce our cash burn significantly.

在本季度，我們採取了策略性成本削減措施，以擴大我們的財務跑道並利用我們的近期和長期機會。這項行動包括減少所有部門的勞動力和提高營運效率，該項目每年可節省約 350 萬美元。我們選擇了這項重組舉措，並改善了收入前景，以顯著減少我們的現金消耗。

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

現在，我將把電話轉交給迪迪埃，他將進一步討論我們的業務績效。繼續吧，迪迪埃。

Thank you, Lee-Lean. Let me start with the new SRAM opportunity that Lee-Lean mentioned earlier. Our customer system is used to manufacture our leading AI chip developers top-selling chip in their newly released chip. Volumes -- shipments of our 144 megabit SRAM to this customer began at the start of calendar 2024, coinciding with an increase in the forecast for its product used an AI chip that is coming online. Demand for their product has been rising along the rapidly growing need for the top-selling and newly launched chips for the leading AI chip maker, fueled by the growth in high-performance computing hardware.

謝謝你，李萊恩。讓我從 Lee-Lean 之前提到的 SRAM 新機會開始。我們的客戶系統用於製造我們領先的AI晶片開發商在他們新發布的晶片中最暢銷的晶片。銷售量－我們的 144 兆位元 SRAM 於 2024 年初開始向該客戶發貨，恰逢其產品使用即將上線的 AI 晶片的預測增加。由於高效能運算硬體的成長，對領先人工智慧晶片製造商最暢銷和新推出的晶片的需求迅速增長，對其產品的需求一直在增長。

Looking ahead, we anticipate even greater demand due to indications for a newly released chip requiring a higher capacity of this manufacturing product for this next-generation chip production needs.

展望未來，我們預計需求會更大，因為有跡象表明新發布的晶片需要更高的製造產品產能以滿足下一代晶片的生產需求。

Interest in this new AI chip has been exceptional as leading tech companies compete to deliver the best hardware for their large language model platforms. We expect our collaboration with this customer to drive substantial demand for our SRAM chips. This customer is now positioned to become our number one customer in the near future. In addition, we have two other large existing customers that we have worked -- that have worked through excessive inventory, and we anticipate this will increase SRAM orders in the future quarters.

隨著領先的科技公司競相為其大型語言模型平台提供最好的硬件，人們對這款新型人工智慧晶片的興趣異常濃厚。我們預計與該客戶的合作將推動對我們 SRAM 晶片的大量需求。該客戶現在預計在不久的將來成為我們的第一大客戶。此外，我們還有另外兩個與我們合作過的大型現有客戶——他們已經解決了庫存過多的問題，我們預計這將在未來幾季增加 SRAM 訂單。

Let me switch to recap our SBIR work. We are still working through the milestones of the two SBIRs that we previously were granted. As a reminder, these were the $1.25 million and the $1.1 million, respectively. For the $1.1 million grant, we aim to deliver a YOLOv3 and YOLOv5 model within four months that can be used for any real-time object detection application. If you are unfamiliar with the acronym YOLO, it stands for you only look once.

讓我回顧一下我們的 SBIR 工作。我們仍在努力實現先前獲得的兩項 SBIR 的里程碑。提醒一下，這分別是 125 萬美元和 110 萬美元。對於 110 萬美元的資助，我們的目標是在四個月內提供可用於任何即時物件偵測應用程式的 YOLOv3 和 YOLOv5 模型。如果您不熟悉縮寫 YOLO，它代表您只看一次。

YOLO models are real-time object detection algorithms that immediately determine where objects are by drawing boxes around them and what those objects are by identifying their types in any image.

YOLO 模型是即時物件偵測演算法，可透過在物件周圍繪製方塊來立即確定物件的位置，並透過識別任何影像中物件的類型來立即確定物件是什麼。

We are still in contract negotiations on the SBIR we were awarded last quarter by new large division of the DoD for an edge board application. We hope to finalize that contract within the next month and begin working on the project deliverables before calendar year-end.

我們仍在就 SBIR 進行合約談判，上季度國防部新的大型部門授予我們邊緣板應用的合約。我們希望在下個月內敲定該合同，並在年底前開始交付專案成果。

Before I move on to customer and product breakdown, I want to expand on the SAR opportunities that Lee-Lean mentioned. GSI has engaged with two customers on SAR edge applications that have completed evaluations with Gemini-I. Recently, they both began evaluating Gemini-II. Our ongoing SAR engagement with an Asian defense research and development organization is transitioning from evaluating Gemini-I to a Gemini-II L which is a low-power version of our Gemini-II. This is intended for an in-flight application using SAR image generation.

在繼續討論客戶和產品細分之前，我想先擴展一下 Lee-Lean 提到的 SAR 機會。 GSI 與兩家客戶就 SAR 邊緣應用進行了合作，這些應用已經完成了 Gemini-I 的評估。最近，他們都開始評估 Gemini-II。我們與亞洲國防研究和開發組織正在進行的搜尋與援救合作正在從評估 Gemini-I 過渡到評估 Gemini-II L，這是 Gemini-II 的低功耗版本。這是針對使用 SAR 影像產生的飛行應用程式。

The project using Gemini-II L has specific applications that better align with the lower power profile needed for this flight application. Another customer, a US aerospace company specializing in SAR technology, is investigating the possibility of using Gemini-II on a satellite for SAR applications. The company recently requested new benchmarks for a more complex application, which are in the process of -- which we are in the process of executing now.

使用 Gemini-II L 的專案具有特定的應用，可以更好地滿足此飛行應用所需的較低功率配置。另一家客戶是一家專門從事 SAR 技術的美國航空航太公司，正在研究在衛星上使用 Gemini-II 進行 SAR 應用的可能性。該公司最近要求為更複雜的應用程式製定新的基準，我們現在正在執行該基準。

As Lee-Lean mentioned, we are using the lessons learned from that experience to advance our timeline for Gemini-II. In both cases, we successfully used Gemini-I to demonstrate the SAR capabilities which paved the way for Gemini-II to be evaluated for use as a real-time edge application -- I'm sorry, edge device for these applications. We are also leveraging SBIR opportunities, including ones that we have won to help fund the further development of Gemini-II and [Plato].

正如 Lee-Lean 所提到的，我們正在利用從這次經歷中學到的教訓來推進 Gemini-II 的時間表。在這兩種情況下，我們都成功地使用 Gemini-I 展示了 SAR 功能，這為 Gemini-II 作為即時邊緣應用程式的評估鋪平了道路——對不起，這些應用程式的邊緣設備。我們也利用 SBIR 機會，包括我們贏得的機會來幫助資助 Gemini-II 和 [Plato] 的進一步開發。

Let me switch now to customer and product breakdowns for the second quarter. In the second quarter of fiscal 2025, sales to Nokia were $812,000 or 17.8% of net revenues compared to $1.2 million or 20.3% of net revenues in the same period a year ago, and $998,000 or 21.4% of net revenues in the prior quarter.

現在讓我談談第二季的客戶和產品細分。 2025 財年第二季度，諾基亞的銷售額為812,000 美元，佔淨收入的17.8%，而去年同期為120 萬美元，佔淨收入的20.3%，上一季為998,000 美元，佔淨收入的21.4% 。

Military/defense sales were 40.2% of second quarter shipments compared to 34.8% of shipments in the comparable period a year ago and 31.9% of shipments in the prior quarter. SigmaQuad sales were 38.6% of second quarter shipments, compared to 55.8% in the second quarter of fiscal '24 and 36.3% in the prior quarter.

軍事/國防銷售額佔第二季出貨量的 40.2%，而去年同期佔出貨量的 34.8%，上一季佔出貨量的 31.9%。 SigmaQuad 銷售額佔第二季出貨量的 38.6%，而 2024 財年第二季為 55.8%，上一季為 36.3%。

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

我現在想把電話轉給道格。請繼續。

We reported net revenues of $4.6 million for the second quarter of fiscal 2025 compared to $5.7 million for the second quarter of fiscal 2024 and $4.7 million for the first quarter of fiscal 2025. Gross margin was 38% -- 38.6% in the second quarter of fiscal 2025 compared to 54.7% in the second quarter of fiscal 2024 and 46.3% in the preceding first quarter of fiscal 2025. The decrease in gross margin in the second quarter of 2025 was primarily due to a shift in product mix and nonrecurring severance costs associated with manufacturing workforce reductions.

我們報告的2025 財年第二季淨收入為460 萬美元，而2024 財年第二季淨收入為570 萬美元，2025 財年第一季淨收入為470 萬美元。年第二季為38.6% 2025 財年毛利率下降，而2024 財年第二季為54.7%，2025 財年第一季毛利率為46.3%。的變化以及相關的非經常性遣散費隨著製造業勞動力的減少。

Total operating expenses in the second quarter of fiscal 2025 were $7.3 million compared to $7.2 million in the second quarter of fiscal 2024 and $1.1 million in the prior quarter. Prior quarter operating expenses included a gain of $5.7 million related to the sale and leaseback of the company's headquarters.

2025 財年第二季的總營運支出為 730 萬美元，而 2024 財年第二季的總營運支出為 720 萬美元，上一季為 110 萬美元。上一季的營運支出包括與公司總部售後回租相關的 570 萬美元收益。

Research and development expenses were $4.8 million compared to $4.7 million in the prior year period and $4.2 million in the prior quarter.

研發費用為 480 萬美元，去年同期為 470 萬美元，上一季為 420 萬美元。

Selling, general and administrative expenses were $2.6 million in the quarter ended September 30, 2024, compared to $2.5 million in the prior year quarter and $2.6 million in the previous quarter. Second quarter fiscal 2025 operating loss was $5.6 million compared to an operating loss of $4.1 million in the prior year period and operating income of $1.1 million in the prior quarter.

截至 2024 年 9 月 30 日的季度，銷售、一般及管理費用為 260 萬美元，而去年同期為 250 萬美元，上一季為 260 萬美元。 2025 財年第二季營運虧損為 560 萬美元，而上年同期營運虧損為 410 萬美元，上一季營運營收為 110 萬美元。

Second quarter fiscal 2025 net income included interest and other income of $149,000 and a tax provision of $23,000 compared to $71,000 in interest and other income and a tax provision of $33,000 for the same period a year ago. In the preceding first quarter, net loss included interest and other income of $55,000 and a tax provision of $57,000.

2025 財年第二季淨收入包括 149,000 美元的利息和其他收入以及 23,000 美元的稅收撥備，而去年同期的利息和其他收入為 71,000 美元，稅收撥備為 33,000 美元。上一季的淨虧損包括 55,000 美元的利息和其他收入以及 57,000 美元的稅項準備金。

Net loss in the second quarter of fiscal 2025 was $5.4 million or $0.21 per diluted share compared to a net loss of $4.1 million or $0.60 per diluted share for the second quarter of fiscal 2024 and net income of $1.1 million or $0.04 per diluted share, inclusive of onetime gain of $5.7 million on the sale leaseback transaction related to the sale of the company's headquarters for the first quarter of fiscal 2025. Total second quarter pretax stock-based compensation expense was $663,000 compared to $676,000 in the comparable quarter a year ago and $658,000 in the prior quarter.

2025 財年第二季的淨虧損為540 萬美元，即稀釋後每股0.21 美元，而2024 財年第二季的淨虧損為410 萬美元，即稀釋後每股0.60 美元，淨利潤為110 萬美元，即稀釋後每股0.04 美元（含）與2025 財年第一季公司總部出售相關的售後回租交易一次性收益570 萬美元。同期為676,000 美元，去年同期為658,000 美元上一季。

At September 30, 2024, the company had $18.4 million in cash and cash equivalents compared to $14.4 million at March 31, 2024. Working capital was $21.1 million as of September 30, 2024 versus $19.1 million at March 31, 2024. Stockholder's equity as of September 30, 2024, was $33.3 million compared to $36 million as of the fiscal year ended March 31, 2024.

截至2024年9月30日，該公司擁有1,840萬美元的現金和現金等價物，而2024年3月31日為1,440萬美元。 3月31日為1,910萬美元。

On a prior earnings call this year, we announced that the company had initiated a comprehensive strategic review and established a special committee of the Board to evaluate specific strategic alternatives. We continue to work with Needham & Company as our strategic and financial adviser to assist in this process.

在今年之前的財報電話會議上，我們宣佈公司已啟動全面的策略審查，並成立了董事會特別委員會來評估具體的策略選擇。我們將繼續與作為我們的策略和財務顧問的 Needham & Company 合作，協助這一過程。

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

接線生，此時我們將開啟問答通話。

(Operator Instructions) Jeff Bernstein, Silverberg Bernstein.

（操作員說明）Jeff Bernstein、Silverberg Bernstein。

Question on the SRAM opportunity. So are you saying that's for semi equipment wafer fabrication equipment customer? Or is the semi test equipment customer?

關於 SRAM 機會的問題。那您是說這是針對半設備的晶圓製造設備客戶嗎？還是半測試設備客戶？

Along those lines. Yes, we don't want to give too much detail because right now, we don't want to name our customer. I mean, it's been a customer we've had for many years, but they've never been a 10% customer. So we haven't identified them specifically. That will certainly change in the quarters coming up because they'll exceed that.

沿著這些思路。是的，我們不想提供太多細節，因為現在我們不想透露我們客戶的姓名。我的意思是，這是我們多年來的客戶，但他們從來都不是 10% 的客戶。所以我們還沒有具體識別它們。在接下來的幾個季度中，這種情況肯定會發生變化，因為它們會超過這個數字。

Got you. Got you. Okay. But it's associated with manufacturing. Okay.

明白你了。明白你了。好的。但這與製造業有關。好的。

And then just on the various APUs now. So there was a mention of something called Plato. Is that like a low-power version of Gemini-II? Or what's Plato and what's the L that you referred to, the low-power Gemini-II?

然後現在就在各種 APU 上。所以有人提到了一個叫柏拉圖的東西。這就像Gemini-II的低功耗版本嗎？或是你提到的Plato是什麼，L是什麼，低功率Gemini-II？

Sure. So we have -- Gemini, as you know, Gemini-II L is a derivative of Gemini-II. It's not a new design. It's just a way that we can configure the die to make it work with 1 core or 2 core. If you recall, our Gemini-II, in fact, Gemini-I for that matter, have 4 cores.

當然。所以我們有——Gemini，如你所知，Gemini-II L 是 Gemini-II 的衍生產品。這不是一個新設計。這只是我們配置晶片以使其與 1 核或 2 核一起工作的一種方法。如果你還記得的話，我們的 Gemini-II，事實上，Gemini-I，有 4 個核心。

And so it's a way for us to limit which -- what's working inside the chip. And so people can use kind of a smaller variable of the device, which, in turn, gives them a very low power part. And so that's -- the Gemini-II L is just a derivative of our existing Gemini-II. Plato, however, is a new design. And it's going after a different market.

因此，這是我們限制晶片內部工作的一種方法。因此人們可以使用一種較小變數的設備，這反過來又為他們提供了一個非常低功耗的零件。所以，Gemini-II L 只是我們現有 Gemini-II 的衍生產品。然而，柏拉圖是一個新的設計。它正在瞄準一個不同的市場。

It's going after the LLM market specifically on the edge. And so it will be very low power as well. If you're familiar with the LLM market today, some of the folks going after are going after with very, very large GPUs that require water cooling, what have you. And so in this case, this is more for edge LLMs and it will be a low-power solution.

它專門針對邊緣的法學碩士市場。因此它的功耗也將非常低。如果您熟悉當今的法學碩士市場，您會發現有些人正在追求需要水冷的非常非常大的 GPU，您有什麼。因此，在這種情況下，這更適合邊緣法學碩士，並且它將是一個低功耗解決方案。

Got you. And that's for inference?

明白你了。那是為了推論嗎？

Yes, correct.

是的，正確。

Got you. Okay. That's great.

明白你了。好的。那太棒了。

(Operator Instructions) There were no further questions. At this time, I'd like to turn the call back over to management for any closing comments.

（操作員說明）沒有進一步的問題。此時，我想將電話轉回管理層以獲取任何結束意見。

Thank you all for joining us. We look forward to speaking with you again when we report our third quarter fiscal 2025 results. Thank you.

感謝大家加入我們。我們期待在報告 2025 財年第三季業績時再次與您交談。謝謝。

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

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。