In the second quarter of fiscal 2025, GSI Technology, Inc. GSIT incurred a net loss per share of 21 cents, wider than the loss of 16 cents per share in the prior-year quarter.
Revenues for the quarter were $4.6 million, a decrease from $5.7 million in the second quarter of fiscal 2024. The company attributed its results to changes in product mix and workforce reductions that influenced gross margins.
GSI Technology's quarterly performance was defined by declining revenues, narrowing gross margins, and ongoing cost-reduction measures. Notably, the company executed strategic cost-cutting measures in the fiscal second quarter, anticipating annual savings of $3.5 million to improve cash flow.
Management anticipates a potential demand recovery in the SRAM segment as customer inventories normalize, bolstering sales in future quarters.
GSI Technology, Inc. Price, Consensus and EPS Surprise
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Business Metrics Performance
Revenue Breakdown
The year-over-year dip in revenue was driven largely by reduced demand across key product lines. Sales to Nokia, amounted to $0.8 million, or 17.8% of total revenues, lower than the $1.2 million or 20.3% share in the prior-year quarter. Military and defense sales, however, showed resilience, accounting for 40.2% of total shipments, up from 34.8% a year ago.
Operating Expenses
Operating expenses increased to $7.3 million, slightly above the $7.2 million reported in the prior-year quarter. This rise was mainly due to research and development (R&D), and selling, general and administrative (SG&A) expenditures. R&D expenses stood at $4.8 million, up from $4.7 million in the year-ago quarter, while SG&A expenses were $2.6 million. The company’s operating loss widened to $5.6 million from $4.1 million a year ago, reflecting higher expenditures amid a revenue decline.
Gross Margins
Gross margin compressed significantly from 54.7% in the second quarter of fiscal 2024 to 38.6% in the second quarter of fiscal 2025. This reduction was attributed to shifts in the product mix and additional costs from workforce restructuring. The shift away from the higher-margin SigmaQuad products impacted margin quality, compounded by severance expenses that increased manufacturing costs.
Net Income
GSI Technology incurred a net loss of $5.5 million in the second quarter of fiscal 2025, wider than a net loss of $4.1 million in the year-ago quarter. Interest and other income contributed $0.1 million to the results, which was an improvement from the prior-year period.
Financial Position (As of Sept. 30, 2024)
GSI Technology's cash and cash equivalents stood at $18.4 million, reflecting an increase from $14.4 million as of March 31, 2024.
Total assets rose to $47.4 million, up from $42.5 million at the end of the previous fiscal year.
Current liabilities increased slightly to $5.5 million from $5.4 million as of March 31, 2024.
Stockholders' equity, however, declined to $33.3 million from $36 million.
Management Guidance
For the third quarter of fiscal 2025, GSI Technology forecasts revenues between $4.7 million and $5.5 million, along with an expected gross margin of approximately 50-52%.
Other Developments
During the quarter, GSI Technology advanced its Gemini-II benchmarking project, on track to meet its Dec. 31, 2024, deadline. Furthermore, the company remains committed to fulfilling its Small Business Innovation Research contract with the U.S. Air Force Labs, aiming to deliver the required software algorithms by the first quarter of calendar year 2025. These initiatives reflect GSI Technology's efforts to innovate and diversify its offerings beyond traditional memory products.
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GSI Technology, Inc. (GSIT) : Free Stock Analysis Report
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