GSI Technology reported a modest top-line improvement in Q3 FY2025, with revenue of $5.414 million, up 2% year over year and 19% sequentially. The quarter featured a meaningful gross margin expansion to approximately 54% driven by favorable product mix and ongoing cost-reduction efforts, even as the company continued to operate at a net loss (-$4.03 million, or -$0.16 per diluted share). Management framed the results within a broader strategy centered on the associative processing unit (APU) program and a disciplined push into edge AI via Gemini-II and the Plato chip, supported by SBIR-funded government programs. Cash position remained solid at roughly $15.1 million with a net cash position of about $5.25 million, despite negative free cash flow of about $3.58 million for the quarter.
Key drivers discussed by management include: (1) SRAM momentum, aided by inventory normalization among existing customers and demand for the 144-meg SRAM; (2) APU progress, including Gemini-II silicon milestones, a February tape-out with May availability, and a ramp toward mass production; and (3) strategic initiatives in government and commercial markets, with the Army SBIR Phase 1 award and ongoing efforts with Space Development Agency and Air Force Research Labs. The company also disclosed a formal strategic review and ongoing advisory engagement with Needham & Company to explore strategic alternatives.
Looking ahead, management outlined milestones rather than formal earnings guidance: Gemini-II milestones (February tape-out, May availability, June board updates), development of Plato (12–18 months to first customer engagements and potential funding), and ongoing SBIR-driven projects that could yield future revenue opportunities. While near-term profitability remains a challenge, the combination of improving gross margins, a lower operating loss trajectory QoQ, and a robust cash position provides a foundation for potential upside if APU and SRAM-related programs scale materially and if strategic alternatives unlock meaningful value.