GSI Technology, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's second quarter fiscal 2022 results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. At this time, we will provide instructions for those interested in entering for the Q&A. Before we begin today's call, the company has requested that I read the following Safe Harbor Statement. The matters discussed in this conference call may include forward-looking statements regarding future events and the future performance of GSI technology that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in the company's Form 10-K filed with the Securities and Exchange Commission. Additionally, I have also been asked to advise you that this conference call is being recorded today, October 28, 2021, at the request of GSI Technology. Hosting the call today is Li-Lin Xu, the company's chairman, president, and chief executive officer. With him are Douglas Shirley, chief financial officer, and Didier Lachere, vice president of sales. I would now like to turn the conference over to Mr. Xu. Please go ahead, sir.

Good afternoon, and thank you for joining us to review our physical second quarter 2022 financial results. Our revenue increased by 17%, year over year for the second quarter of fiscal 2022 to $7.8 million compared to $6.7 million in the second quarter of fiscal 2021. At the high end of the guidance provided earlier in the second quarter to the first half of fiscal 2022, revenue is up 25% compared to fiscal 2021 and sales to low-key our largest SM customer, have stabilized despite ongoing supply chain challenges that are troubling our industry. We reduced our net loss by 22% year-over-year as a result of higher revenue and gross profit and only a modest increase in operating expenses on a year-to-day basis. At quarter end, we had nearly $51 million in cash, cash equivalents, and shorter investments to support the launch of new products and sales and marketing efforts to build a pipeline of opportunities. Our legacy SOM business is profitable and generates cash flow to support the development and pending launch of our radiation-tolerant devices and the Gemini APU solutions. We continue to advance our key initiatives with ongoing APU and radiation-tolerant opportunities. We are progressing in the current customer engagement for both categories and have added a few new better customer engagements for the APU. We continue to prioritize the allocation of our capital toward the APU. which we believe is central to the long-term value of the company, given the unique opportunity for our novel technology. We are committed to our strategic investment in APU. Through our own detailed analysis of market data, we estimate that the global trend for APU search application is approximately $137 billion, Later in the course, Delia will discuss our assumptions and the market represented to illustrate in more detail our conviction regarding this strategic investment. We were recently selected to be an organizer and judge for the billion-scale approximate nearest labor search challenge, a first of its kind competition in large-scale approximate nearest Labor Search, or ANNS. The event has been hosted by Neuro IPS as part of its annual conference on Neuro Information Processing Systems. GSI is one of the members of a panel led by Microsoft that includes AI thought leaders from industry and academia.

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