GSI TECHNOLOGY INC SEC 10-K Report

GSI Technology Inc., a company specializing in high-performance memory products and associative computing solutions, has released its annual 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the current economic environment.

Financial Highlights

GSI Technology reported the following key financial metrics for the fiscal year:

• Net Revenues: $20.5 million, a decrease of 5.7% from fiscal 2024, primarily due to a decline in unit shipments and fluctuations in customer demand.
• Gross Profit: $10.1 million, down 14.2% from fiscal 2024, mainly due to changes in product mix and lower shipment levels.
• Loss from Operations: ($10.8) million, an improvement from a loss of ($20.4) million in fiscal 2024, reflecting cost reduction initiatives and a gain from the sale of assets.
• Net Loss: ($10.6) million, improved from a net loss of ($20.1) million in fiscal 2024, driven by reduced operating expenses and a gain from asset sales.
• Net Loss Per Share: ($0.42), an improvement from ($0.80) in fiscal 2024, reflecting the overall reduction in net loss.

Business Highlights

GSI Technology's business performance for the fiscal year included several key developments:

• Associative Processing Unit (APU) Market Focus: The company is concentrating on in-place associative computing solutions for high-growth markets such as AI and HPC, with applications in similarity search and Boolean processing. The APU products are designed for large database search queries, offering efficient search capabilities in a compact, low-power format.
• SRAM Market Commitment: Despite expanding into associative computing, GSI remains committed to the synchronous SRAM market, providing high-density performance memory products for networking, telecommunications, and military/defense applications.
• Fabless Manufacturing Model: The company employs a fabless business model, focusing resources on R&D, product design, and marketing while accessing advanced process technologies with modest capital investment.
• New Product Development: GSI is developing the next-generation APU-2 for enhanced space-based capabilities, funded by the Space Development Agency. This product aims to address big data processing challenges in space for the U.S. Space Force.
• Strategic Partnerships and Contracts: GSI has secured contracts with the U.S. Air Force and U.S. Army to develop specialized algorithms and AI solutions using its Gemini APU technology, highlighting its focus on military applications.
• Product Launches and Testing: The Gemini-I APU is in full production, and the company is preparing to launch the Gemini-II chip with improved performance in mid-2025. Testing and benchmarking are underway, with a focus on supporting the Gemini-II with a Python-supported compiler.
• Radiation-Hardened SRAM Orders: GSI secured an initial production order for radiation-hardened SRAM from a North American prime contractor, with follow-on orders expected, indicating a strong position in the aerospace market.
• Geographical Operations: GSI has regional sales offices in Hong Kong, Israel, and the United States, providing international coverage to better serve distributors and OEM customers.
• Future Outlook: The company anticipates continued challenges from inflationary pressures, geopolitical tensions, and economic decline but remains focused on advancing its APU technology and expanding its market presence in AI and HPC applications.

Strategic Initiatives

GSI Technology has undertaken several strategic initiatives to strengthen its market position and financial health:

• Cost Reduction Measures: In August 2024, the company initiated measures to reduce operating expenses by approximately $3.5 million annually, primarily through salary reductions and targeted reductions in research and development spending. These strategic cost reduction measures were aimed at advancing the company's proprietary APU technology.
• Capital Management: The company strengthened its balance sheet and liquidity position by selling its Sunnyvale, California property in June 2024. It also completed a sale and leaseback transaction, generating net proceeds of $11.2 million. The company has been using cash equivalents as its primary source of liquidity, with cash and cash equivalents totaling $13.4 million as of March 31, 2025. Additionally, the company raised $11.2 million through a registered securities offering in May and June 2025.
• Future Outlook: The company anticipates that continued inflationary pressures, tariffs and trade disputes, higher interest rates, and increasing geopolitical tensions will negatively impact general economic activity and demand in its end markets into fiscal 2026. Despite these challenges, the company believes its existing cash balances and expected cash flow from operations will be sufficient to meet its cash needs for at least the next 12 months. The company plans to continue focusing on its APU technology and expects to resume ordering from existing customers as they deplete their channel inventory.

Challenges and Risks

GSI Technology faces several challenges and risks that could impact its business operations and financial performance:

• Market Adoption and Revenue Goals: The strategic transformation from reliance on Very Fast SRAM products to in-place associative computing solutions presents significant risks, including the need for successful market adoption of new products and the potential for cash shortfalls if revenue goals are not met.
• Geopolitical and Economic Challenges: The company is facing challenges from geopolitical tensions, inflationary pressures, and a decline in the global economic environment, which have impacted demand for its products.
• Dependency on Major Customers: The company faces risks from its dependency on major customers like KYEC and Nokia, and the need for successful introduction of new products.
• Strategic Alternatives: The ongoing evaluation of strategic alternatives, such as potential sales or mergers, adds uncertainty to the company's future.
• Market Risks: GSI Technology is exposed to market risks, including fluctuations in foreign currency exchange rates, particularly the New Taiwanese dollar and Israeli Shekel. The company does not currently engage in currency hedging, which could impact financial results.
• Cybersecurity and Intellectual Property: Cybersecurity threats and the need to protect intellectual property are also significant concerns for the company.

SEC Filing: GSI TECHNOLOGY INC [ GSIT ] - 10-K - Jun. 18, 2025