GSI Technology Reports Slight Revenue Increase but Net Loss Improvement for December Quarter

GSI Technology, Inc. reported its financial results for the quarter ending December 31, 2024, revealing a slight increase in net revenues to $5.4 million, up from $5.3 million in the same period last year. However, for the nine months ending December 31, 2024, revenues decreased by 11.9% to $14.6 million compared to $16.6 million in the prior year. The company experienced a net loss of $4.0 million for the quarter, an improvement from a loss of $6.6 million in the previous year, while the nine-month net loss also decreased to $8.4 million from $15.8 million.

The company’s gross profit for the quarter was $2.9 million, representing a gross margin of 54.0%, down from 55.9% in the prior year. For the nine-month period, gross profit fell to $6.8 million, with a gross margin of 46.7%, down from 55.2%. The decline in gross profit was attributed to a decrease in net revenues and an increase in costs, including provisions for excess and obsolete inventories. Operating expenses decreased significantly, particularly in research and development, which fell by 42.1% in the quarter due to cost-cutting measures implemented in August 2024, resulting in a 16% reduction in the workforce.

GSI Technology has been focusing on strategic developments, including the ongoing transformation of its business model towards in-place associative computing products. The company has entered into prototype agreements with the U.S. government, including a $1.25 million contract with the Space Development Agency and a $1.1 million contract with the U.S. Air Force Research Laboratory. These agreements are expected to provide funding for the development of advanced processing units, which are critical for the company's future growth.

Operationally, GSI Technology reported a total of 25,600,297 shares of common stock outstanding as of January 31, 2025. The company has also seen fluctuations in customer demand, particularly from its largest customers, Nokia and KYEC, which accounted for significant portions of its revenues. The company anticipates continued volatility in sales to these customers, influenced by broader economic conditions, including inflation and geopolitical tensions.

Looking ahead, GSI Technology expressed caution regarding its outlook, noting that ongoing inflationary pressures, higher interest rates, and geopolitical uncertainties could adversely impact demand for its products. The company believes that its current cash and cash equivalents of $15.1 million, bolstered by a recent sale and leaseback transaction, will be sufficient to meet its operational needs for the next 12 months. However, it remains vigilant about potential market disruptions and the need for strategic adjustments in response to changing economic conditions.