GSIT's Q4 Loss Narrows Y/Y on Strong SRAM Demand, Stock Up 8%

Shares of GSI Technology, Inc. GSIT have gained 8.1% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 index’s 0.7% growth over the same time frame. Over the past month, the stock has gained 47.5% versus the S&P 500’s 2.8% change.

For the fourth quarter of fiscal 2025, GSI Technology incurred a net loss of 9 cents per share, narrower than a net loss of 17 cents per share in the year-ago quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Net revenues of $5.9 million marked a 14% year-over-year increase. The quarter’s gross margin expanded to 56.1%, up from 51.6% a year earlier. Net loss narrowed to $2.2 million from $4.3 million in the year-ago quarter.

GSI Technology, Inc. Price, Consensus and EPS Surprise

GSI Technology, Inc. price-consensus-eps-surprise-chart | GSI Technology, Inc. Quote

Operating Metrics and Business Mix

Operating expenses fell notably during the quarter, totaling $5.6 million versus $7.2 million in the same period last year. This decline was driven primarily by a drop in research and development (R&D) costs to $3 million from $4.8 million. Government funding under the SBIR program contributed $0.9 million to offset R&D expenses. Selling, general and administrative (SG&A) expenses edged higher year over year to $2.6 million from $2.4 million.

Sales to KYEC surged to $1.7 million, accounting for 29.5% of quarterly revenues, up sharply from $0.5 million (10.6%) in the year-ago period. In contrast, sales to Nokia declined to $0.4 million, or 7.5% of revenues, down from 13.5% a year earlier. Military and defense sales accounted for 30.7% of quarterly shipments, slightly below the 35.5% recorded last year. SigmaQuad sales remained steady at 39.3% of shipments.

Management Commentary

Chairman and CEO Lee-Lean Shu highlighted strong demand for legacy SRAM products as a key driver behind the quarterly revenue growth. He also emphasized a strategic breakthrough with a North American prime contractor, marking the company’s first order for its higher-margin radiation-hardened SRAM chips. Additional orders are anticipated in fiscal 2026. Shu described the development as pivotal, especially as GSI works to secure heritage status for the chip to enhance market access.

In the AI product segment, progress continues with the Gemini-II associative processing unit (APU). Production-ready chips and Leda-2 boards are expected by the end of the first quarter of fiscal 2026. The company also reported successful milestones under its SBIR contracts with the U.S. Space Development Agency and Air Force Research Laboratory, with hardware already delivered to the latter.

Shu also revealed a new enhancement to the Plato processor, which now includes a built-in camera interface. This integrated design offers a compact solution for edge AI applications and has sparked early-stage partnership discussions. According to Shu, this positions Plato as a highly adaptable solution for agents requiring object recognition without reliance on cloud infrastructure.

Earnings Drivers and Strategic Focus

The quarterly improvements in both top-line and bottom-line performance were largely attributed to favorable product mix and sustained cost discipline. Gross margin benefited from increased sales of higher-margin products and improved absorption of fixed manufacturing costs. Operating loss narrowed both sequentially and year over year, reflecting better overhead management and a reduction in R&D outlays following August 2024 cost-cutting initiatives.

Notably, the full-year R&D expense dropped to $16 million from $21.7 million in fiscal 2024. SG&A expenses remained relatively stable. A $5.8 million gain from the sale and leaseback of the company’s Sunnyvale, California headquarters further boosted fiscal 2025 results.

Fiscal Year 2025 Update

For the full fiscal year, revenues came in at $20.5 million, down 5.7% from fiscal 2024, while the net loss narrowed to $10.6 million, or 42 cents per share, from $20.1 million, or 80 cents per share a year ago.

Guidance

For the first quarter of fiscal 2026, GSI expects revenues between $5.5 million and $6.3 million, with gross margin projected in the range of 56% to 58%. Management cited continued momentum in SRAM demand and potential Gemini-II commercialization milestones as supportive of near-term growth.

Other Developments

During the quarter, GSI completed the sale and leaseback of its Sunnyvale headquarters. The transaction resulted in a $5.8 million gain and contributed to a reduction in working capital, which declined to $16.4 million from $24.7 million a year earlier. As of March 31, 2025, the company reported $13.4 million in cash and cash equivalents and stockholders' equity of $28.2 million.

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