GSI Technology, Inc.

Welcome to GSI Technologies fourth quarter and fiscal year 2025 results conference call. At this time, all participants are on a listen-only mode. Later, we will conduct a question and answer session. At that time, we will provide instructions for those interested in entering the queue 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, May 1st, 2025, at the request of GSI Technology. Li-Lin Xu, the company's chairman, president, and chief executive officer, will be hosting the call today. With him are Douglas Shirley, chief financial officer, and D.G.L. Assay, 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 fourth quarter and the fiscal year 2025 financial results. Let's start with a few highlights from fiscal year 2025. We closed the fourth quarter with solid revenue growth, significantly reduced debt loss, and a meaningful improvement in cash burn, finish the year with $13.4 million in cash, and a more disciplined operating structure. Revenue for the fourth quarter increased by 14% year over year, and a 9% sequentially to $5.9 million, driven by strong demand for our essence chip, as we exit this year. This revenue growth and the low operating expense result in a sharp reduction in quantity rate loss and a material decrease in cash usage. For fiscal year 2025, quite annual revenue declined 6% compared to the prior year. we meaningfully reduced our debt loss by 47% from $20.1 million in 2024 to $10.6 million, driven by the 35% reduction in operating expenses. This structural cost improvement is central to our goal of preserving cash and extending our runway. We expect to maintain our quality operating expenses at current levels to minimize our cash burn until we secure new funding sources. In the fourth quarter, we made good progress across multiple funds to advance our technology roadmap and the commercial strategy. Notably, we secured an initial order for radiation hub and X-ray from a North American prime contractor, a key validation of our product. We anticipate follow all orders this fiscal year. This trip carries a significant higher gross margin than all traditional X-rays. EDA is the point person with this customer and will intend further on the opportunities. Our ongoing SBIR programs with government agencies are progressing well, and we are successfully meeting our milestones. Today, our SBIRs have generated a payment total of $1.6 million, and we anticipate receiving an additional $1 million once we complete the program. This quarter, $870,000 was booked as a reduction to RMD expense, further helping to lower operating expenses. We are especially excited about recent enhancement to Prato, adding the integration of a camera interface directly into the chip. This new feature paired with other connectivity enhancements allow the chip to interface with a wide range of sensors. This makes PRATO particularly well-suited for AI agents requiring object recognition. The new capability has increased strategic interest in PRATO, and we are currently in preliminary discussion with multiple parties to scale partnerships and access funds for the next phases of development. Delia will provide more detail on this exciting development. As we look ahead to fiscal year 2026, we plan to build on the progress of our APU development, drive continued growth in excellence sales, and advance execution of our strategic initiatives. across both commercial and the government markets. At the same time, we remain committed to maintain operational efficiency. In parallel, we continue to explore strategic alternatives with a primary focus on securing funding to support the next phase of operator development. We are also working with our banking team to explore other options. that could provide new sources of cash to execute our AS strategy. With that, I will now hand it over to you.

Thank you, Leline. As Leline mentioned, this quarter's primary revenue driver was the continued strong demand for our high-density SRAM. Our SRAM has been deployed in critical systems used in chip manufacturing and the recent uptick in business with KYEC is being driven by surging demand for next generation AI chip from a leading GPU provider. Despite the ongoing tariff negotiations between the US and its trading partners, we currently anticipate the demand from this customer to continue in fiscal year 2026 at a similar level to what we experienced in 2025. With that said, we may have some variability in the timing of the shipments, but importantly, the demand is still anticipated to remain consistent. The big news this quarter is an initial order for our radiation hardened SRAM. While waiting for the forecast from the prime contractor, we anticipate follow-on orders in fiscal 2026. In addition, we are actively working with this customer to secure heritage status. Gaining this status would enhance the market acceptance of our radiation hardened SRAM and unlock access to new high-value sales channels. It is worth noting that radiation-hardened SRAMs carry a gross margin well above those of our traditional SRAM chips, providing a strong financial lever as we work to reduce our net loss and cash burn. Let me switch to Plato and elaborate on Lillian's earlier comments. By integrating a camera interface directly into the chip alongside enhanced connectivity features, Plato significantly broadens its addressable market. Able to process data locally without relying on cloud infrastructure, it's now optimized for edge devices and ideal for agents performing object recognition. To clarify what an agent is, it's helpful to look at how the approach to AI is shifting to agentic AI. These AI systems don't just analyze data, but they also act independently, for example, generating motor commands for a robot or a drone. This involves multiple capabilities that a single-purpose GPU is not well-suited for. Plato, on the other hand, can manage a combination of computing tasks that involve more than just a single number of crunching or graphic workloads. Put another way, agentic AI goes beyond basic data analysis. It must make decisions, process inputs from sensors like cameras and microphones, respond in real time, and take actions in the physical world. In this context, Plato's capabilities position it at the forefront of sectors preparing for significant growth driven by the increasing demand for intelligent, autonomous systems or agents across various industries at the edge. Thus, interest in PLATO has grown among the strategic partners we've engaged with over the past year. Pivoting to our ongoing SBIRs, as Leland stated, these projects are on track and we are meeting the milestones. As a reminder, we are currently working on a Phase II contract from both the Space Development Agency and the Air Force Research Labs, along with our most recently announced Phase I contract with the U.S. Army. As planned, we delivered a server with a LITA-2 board to the Air Force Research Labs and will shortly deliver another LITA-2 board to the Space Development Agency. The Phase 1 SBIR for the U.S. Army contract is evaluating the use of Gemini 2 in edge computing AI solutions, and we are on track to meet all expectations with this partner. This quarter, we also delivered a YOLO algorithm for the Air Force features labs, including the benchmarks for real-time object detection application. We continue to increase the performance of the YOLO algorithms, which can immediately determine the exact placement and identify the type of objects. We plan to deliver the improved YOLO3 and YOLO5 algorithms this summer. Lastly, an update on our STAR projects. We made further progress with an offshore defense R&D customer, which ordered a Gemini 2 system to evaluate the chip's capabilities for low-power in-flight application. We will be shipping this system this quarter. This organization is also a potential funding partner for PLATO. In addition, a U.S. aerospace company continues to evaluate our Gemini for onboard satellite applications. Taken together, these activities support the use of Gemini 2 for integrated edge applications such as SAR generation and drones with subsequent object detection and actionable decisions. Now I will move on to the customer and product breakdowns for the fourth quarter. In the fourth quarter of fiscal 2025, sales to KYEC were 1.7 million, or 29.5% of net revenues. compared to 544,000 or 10.6% of net revenues in the same period a year ago and 1.2 million or 22.7% of net revenues in the prior quarter. In the fourth quarter of fiscal 2025, sales to Nokia were 444,000 or 7.5% of revenues compared to 694,000 or 13.5% of net revenues in the same period a year ago and 239,000 or 4.4% of net revenues in the prior quarter. Military defense sales were 30.7% of fourth quarter shipments compared to 35.5% of shipments in the comparable period a year ago and 30.0% of shipments in the prior quarter. Sigma Quad sales were 39.3% of fourth quarter shipments compared to 42.4% in the fourth quarter of fiscal 2024 and 39.1% in the prior quarter. I'd now like to hand the call over to Doug. Go ahead, Doug.