GSI Technology (NASDAQ:GSIT) reported first-quarter fiscal 2027 revenue of $6.3 million, at the midpoint of its guidance range and roughly flat sequentially, as the company continued to invest in commercialization of its Gemini-II artificial intelligence processor and development of its next-generation Plato chip.
Chairman, President and Chief Executive Officer Lee-Lean Shu said the company has been working to transition from an SoC chip company to an edge AI platform provider. He said GSI’s associative processing unit, or APU, is intended to address edge workloads that require more performance than mobile processors can provide while using less power than conventional GPUs.
Gemini-II Projects Advance
Management said its priorities for the next 18 months include completing current proof-of-concept projects, expanding Gemini-II into adjacent applications, releasing AI-assisted software development kits this fall and keeping Plato on schedule for tape-out in March 2027.
Vice President of Sales Didier Lasserre said GSI is focusing on a limited number of customers and system integrators in applications suited to the APU’s performance-per-watt characteristics. The company aims to turn proof-of-concept projects into design wins that can lead to commercial deployments and APU revenue.
Lasserre said software and development tools created for one application can be adapted for related applications, reducing the need to develop a fully unique solution for each customer. He cited the company’s use of capabilities developed for its Sentinel proof of concept in its Smart City project.
For Sentinel, GSI completed its deliverables for the first phase, including the chip and software. A laboratory test was recently conducted with G2 Tech and participating defense agencies. The platform recorded a time-to-first-token measurement of 2.4 seconds, according to Lasserre. GSI has also completed its work for the next stage of the proof of concept, while the timing of the field demonstration depends on G2 Tech.
In Hsinchu County, Taiwan, GSI said it is meeting phase-one milestones for its Smart City project and expects to ship Gemini-II chips, servers and software for a 20-camera deployment soon. The company remains on track to complete the first phase in November. If selected for phase two, the project would expand to about 80 cameras and add audio capabilities, potentially generating additional hardware and software licensing revenue.
The Smart City platform now includes natural-language search capabilities for surveillance footage, allowing operators to query recorded video without manually reviewing extended periods of footage.
Government Programs and Software Development
GSI also launched the second phase of its U.S. Army Small Business Innovation Research, or SBIR, program with a formal kickoff meeting. The company has begun preliminary work on a ruggedized Gemini-II system for Army applications.
Under a separate SBIR program for the Space Development Agency, GSI completed radiation testing on a standard commercial Gemini-II device. Lasserre said the off-the-shelf chip remained operational under radiation levels associated with harsh space environments, achieved a radiation-tolerant threshold typically required for radiation-hardened applications and showed no single-event latch-ups.
Lasserre said the test results could broaden opportunities in space and high-altitude applications, where both radiation tolerance and power consumption are important. He added that Plato is expected to operate at 10 watts or less per device.
GSI expects to release an alpha version of its AI-assisted SDK in the fall. The company said early testing indicates the software can substantially reduce model adaptation time. In one representative case, work that previously required one engineer about a year was completed in less than a month using the AI-assisted SDK, according to Lasserre.
Management expects the SDK to help system integrators customize applications for customers and to accelerate software development and model porting for Plato.
Financial Results and Cash Position
Chief Financial Officer Douglas Schirle said SRAM revenue remained stable during the quarter, though customer demand and order patterns can vary by period. Combined sales to KYEC and Cadence represented about 23% of net revenue, compared with 22.3% of revenue from KYEC in the prior quarter, when there were no shipments to Cadence.
- First-quarter revenue was $6.3 million, modestly above the year-earlier quarter and in line with the preceding quarter.
- Gross margin was 53.4%, up 100 basis points sequentially but below the company’s 54% to 56% guided range.
- Operating expenses rose to $8.8 million from $5.8 million a year earlier, primarily reflecting Gemini-II software work and Plato development.
- Research and development expense totaled $5.9 million, including investment in Plato, lower SBIR funding recognized compared with the prior-year period and higher costs from the company’s Israeli software team.
- Operating loss was $5.4 million, compared with an operating loss of $2.2 million a year earlier.
The first-quarter net loss included $517,000 in interest and other income, primarily from interest on the company’s cash balance.
GSI ended June 30 with $77 million in cash and cash equivalents and no debt, up from $67.2 million at March 31. During the quarter, the company used $3.9 million in operating activities and generated $14 million from financing activities, including $9.3 million from its at-the-market program and $4.8 million from employee stock option exercises.
Schirle said the unusually high option-exercise activity was related largely to options granted as much as 10 years ago that were nearing expiration. The company expects cash use to remain near current levels, estimating approximately $4 million per quarter, or about $16 million annually, as it completes Gemini-II software development and advances Plato toward tape-out.
Second-Quarter Outlook
For the fiscal 2027 second quarter, GSI forecast net revenue of $5.7 million to $6.5 million and gross margin of approximately 53% to 55%.
The company also expects to file a replacement universal shelf registration in coming months that would restore capacity to $100 million. Schirle said GSI has no current plans to raise additional capital and described the shelf as a means of preserving financial and strategic flexibility.
About GSI Technology (NASDAQ:GSIT)
GSI Technology, Inc is a fabless semiconductor company specializing in the design and development of high-performance memory products. Headquartered in Sunnyvale, California, the company was founded in 1995 and has focused its efforts on content addressable memory (CAM) and high-speed SRAM (static random-access memory) solutions. As a publicly traded company listed on NASDAQ under the ticker GSIT, GSI Technology leverages advanced architectures to meet demanding data-processing requirements.
The company’s core product portfolio includes ternary CAM (TCAM) devices, binary CAM (BCAM) devices and high-speed synchronous SRAM.
