GSI Technology Faces Wider Losses Amid Revenue Decline in Q2 Fiscal 2025
In the second quarter of fiscal 2025, GSI Technology, Inc. (GSIT) reported a net loss per share of 21 cents, which is greater than the loss of 16 cents per share seen in the same quarter last year.
Revenues for the quarter reached $4.6 million, down from $5.7 million in the second quarter of fiscal 2024. The company cited changes in its product offerings and workforce reductions as key factors affecting its gross margins.
GSI Technology’s quarterly results were characterized by decreasing revenues, tighter gross margins, and continued cost-control initiatives. In this quarter, the company implemented cost-cutting strategies projected to save $3.5 million annually, aiming to enhance cash flow.
Management remains hopeful for a rebound in demand in the SRAM segment as customer inventories stabilize, which may lead to improved sales in upcoming quarters.
GSI Technology’s Stock Performance
GSI Technology, Inc. price-consensus-eps-surprise-chart | GSI Technology, Inc. Quote
Revenue Analysis
The year-over-year revenue decline stemmed mainly from reduced demand across critical product lines. Sales to Nokia amounted to $0.8 million, representing 17.8% of total revenues, down from $1.2 million, or 20.3%, the previous year. However, sales related to military and defense products proved more stable, making up 40.2% of total shipments, up from 34.8% a year ago.
Operating Cost Overview
Operating expenses increased slightly to $7.3 million from $7.2 million in the previous year. This uptick was largely due to higher spending on research and development (R&D) and selling, general, and administrative (SG&A) costs. R&D costs reached $4.8 million, a modest rise from $4.7 million last year, while SG&A expenses totaled $2.6 million. Consequently, the company’s operating loss widened to $5.6 million from $4.1 million in the prior year.
Gross Margin and Profitability
Gross margins fell significantly, dropping from 54.7% in the second quarter of fiscal 2024 to 38.6% in the same period of 2025. This decrease resulted from changes in product mix and additional costs related to workforce restructuring, particularly due to less emphasis on higher-margin SigmaQuad products and the associated severance expenses.
Quarterly Net Income
For the second quarter of fiscal 2025, GSI Technology recorded a net loss of $5.5 million, larger than the $4.1 million loss from the same quarter last year. Interest and other income added $0.1 million to the results, reflecting an improvement compared to the prior year.
Financial Snapshot (As of Sept. 30, 2024)
As of September 30, 2024, GSI Technology’s cash and cash equivalents totaled $18.4 million, an increase from $14.4 million at the end of March 2024. Total assets rose to $47.4 million, up from $42.5 million the previous fiscal year. Meanwhile, current liabilities increased slightly to $5.5 million from $5.4 million in March 2024. Stockholders’ equity fell to $33.3 million from $36 million.
Looking Ahead
For the upcoming third quarter of fiscal 2025, GSI Technology projects revenues between $4.7 million and $5.5 million, along with anticipated gross margins of approximately 50-52%.
Upcoming Initiatives
During the quarter, GSI Technology made progress on its Gemini-II benchmarking project, aiming to meet its December 31, 2024 deadline. Additionally, the company is focused on fulfilling its Small Business Innovation Research contract with the U.S. Air Force Labs, targeting delivery of the required software algorithms by the first quarter of calendar year 2025. These efforts underscore GSI Technology’s commitment to innovation beyond its traditional memory product line.
Expert Stock Picks
From thousands of stocks, five Zacks experts have selected their top choices with potential for +100% growth in the coming months. Among these, Director of Research Sheraz Mian has identified one with significant upside potential.
This featured company targets millennial and Gen Z consumers, generating nearly $1 billion in revenue last quarter alone. A recent market dip presents an opportune moment for investment. Although not every recommendation achieves success, this stock could outperform previous Zacks favorites like Nano-X Imaging, which saw a +129.6% rise in just over nine months.
Free: See Our Top Stock And 4 Runners Up
GSI Technology, Inc. (GSIT): Free Stock Analysis Report
Read this article on Zacks.com.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
