GSI (GSIT) investor relations material

Executive summary

• Q2 FY2027 revenue was $6.019M, down 6.6% YoY; gross margin fell to 48.5% amid higher manufacturing costs and unfavorable mix.

• Higher R&D, SG&A and non-routine legal fees widened the net loss; commercialization focus shifted to Gemini-II while Plato remained on schedule.

• Smart Guardian Eye Phase I was accepted in Taiwan and began live AI video monitoring and incident reporting.

Financial highlights

• Q2 net revenue was $6.019M versus $6.444M YoY and $6.312M QoQ; H1 revenue was $12.331M, down 3.1% YoY.

• Gross profit was $2.918M and gross margin 48.5%, versus $3.533M and 54.8% YoY; H1 gross margin was 51.0%, versus 56.4%.

• Operating expenses were $10.353M, including $6.048M R&D and $4.305M SG&A; operating loss was $7.435M and net loss was $7.021M, or $0.18 per diluted share.

• H1 net loss was $11.813M versus $5.402M; H1 loss per share was $0.31 versus $0.19.

• Non-routine legal and professional fees of ~$2.0M were partly offset by a $600K vendor-settlement gain, for a net impact of ~$1.4M; the assessment concluded in Q2.

Outlook and guidance

• Q3 FY2027 revenue guidance is $5.0M-$6.0M, with gross margin of ~38%-40%.

• Price increases are planned immediately for new orders and from Jan. 1, 2027, for existing backlog; improved availability and pricing are expected to support recovery from Q4 FY2027.

• Plato tape-out remains targeted for March 2027, with first-spin samples targeted for late summer 2027; Gemini-II commercial release is targeted for H1 calendar 2027.

• Gemini-II AI-assisted SDK release to initial customers is anticipated before end-December 2026; R&D spending is expected to rise as hardware and software teams expand.

• Existing cash is expected to cover working capital and capital expenditures for at least 12 months; quarterly cash usage is expected to average ~$4M and may vary with milestones.