Research summary and source transcript
GSIT's FY2026 Q2 call is best read as a thesis-quality check, not a transcript recap. The upside case is that AI and compute-heavy infrastructure demand are becoming real drivers of customer activity. The key investor question is whether that activity converts into durable revenue, royalties, margins, and cash flow rather than remaining a strong-sounding demand story.
Framework #1 asks what management may know now that the market may not fully recognize for 6-24 months. For GSIT, the possible information gradient is whether current demand, backlog, customer activity, or AI/data-center engagement is an early signal of durable conversion rather than a one-quarter narrative. The transcript still needs follow-through in future quarters before that can be treated as proven.
The business engine appears to be demand conversion into revenue at acceptable incremental margins; the fallback needs management's KPIs and historical conversion data to grade it more precisely.
- Management centered the story on AI, compute, or data-center demand, which is the key thesis variable to verify in future quarters.
- Backlog and demand visibility were important to the quarter's credibility.
- Profitability and margin durability should be treated as quality-of-revenue checks, not just headline metrics.
- Customer renewal and new-logo activity are the clearest checks on whether demand is broadening.
- Management's strongest emphasis appears to be around demand momentum and AI/compute-related opportunity; the useful investor question is whether that enthusiasm is backed by conversion and customer economics.
The tone reads constructive but still needs investor skepticism. Management appears to have enough operating evidence to discuss momentum, but the call only becomes high-quality if the numbers support conversion, margins, cash flow, and customer breadth. Local fallback reason: model analysis failed during on-demand transcript rendering: Earnings call analyzer failed with status 403..
- There may be at least one Q&A answer that needs manual review for a possible dodge or lack of numerical follow-through.
- There may be a benchmark or metric-framing issue worth manual review, especially around adjusted metrics, timelines, or changed expectations.
Competitive position looks potentially improving, but not proven. Customer activity and AI/compute exposure suggest the company may be in the right demand pools; the missing proof is market-share data, pricing power, win/loss detail, and retention economics.
- Key figure to verify: while consuming roughly 98% less energy.
- Key figure to verify: Building on the momentum from the paper's funding, we closed the $50 million equity financing We are now deploying the capital to accelerate execution across our hardware and software build-offs, making this a pivotal period for GSS growth.
- Key figure to verify: We recently received a $751,000 extension of one of our space development agency contracts, which includes additional funding for radiation-hardened beam testing of Gemini 2.
- Key figure to verify: In the second quarter of fiscal 2026, sales to KYEC were 802,000 or 12.5% of revenues compared to 650,000 or 14.3% of revenues in the same period a year ago and 267,000 or 4.3 percent of revenues in the prior quarter.
- Key figure to verify: Sales to Cadence Design Systems were 1.4 million or 21.6 percent of net revenues compared to zero in the same period last year and 1.5 million or 23.9 percent of revenues in the prior quarter.
- The quarter appears to be moving from story to evidence: operating momentum is showing up in revenue, royalties, or backlog rather than only in management narrative.
- Customer activity looks healthier than a one-quarter spike because the transcript points to both retention/renewal work and new-account activity.
- AI and data-center exposure look strategically relevant rather than cosmetic, because management ties demand to compute-heavy end markets instead of treating it as a generic buzzword.
- Profitability is a quality signal here, but the investment value depends on whether margins can hold as mix, hiring, and customer concentration evolve.
- The main open question is conversion: AI or data-center engagement has to turn into recurring royalties, cash flow, and repeatable design wins before it deserves full credit in valuation.
- Backlog lowers some demand uncertainty, but investors still need timing, cancellation risk, concentration, and conversion economics before treating it as de-risked revenue.
- Margin strength is not itself a risk; the risk is whether that margin level is sustainable if revenue mix, investment spend, or pricing changes.
- There is enough downside language in the transcript to require follow-up on execution, timing, or disclosure quality rather than reading the quarter as fully clean.
The data-center angle appears investable but still needs sizing. The call connects the company to AI or compute-heavy infrastructure demand, which is directionally positive, but the thesis should depend on how much of that activity becomes durable revenue, royalties, and cash conversion rather than on thematic exposure alone.
- How much of the AI or data-center engagement converts into recurring royalties or repeat revenue within the next four quarters?
- What portion of backlog is cancellable, delayed, concentrated, or dependent on a small number of customers?
- Can current margin levels persist as mix, headcount, and product investment change?
- Did management quantify cash conversion and operating leverage, or only highlight revenue and demand?
- Are customer wins broad enough to imply share gain rather than a few isolated projects?
FY2026 Q2 earnings call transcript
NASDAQ:GSIT Q2 2026 Earnings Call Transcript Generated on 8/9/2026 Conference Operator | Operator: Ladies and gentlemen, thank you for standing by. Welcome to GSI Technologies' second quarter fiscal 2026 results conference call. At this time, all participants are in 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 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 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 is being recorded today, October 30th, 2025, as the request of GSI Technology. Hosting the call today is Lee Leon Hsu, the company's chairman, president, and chief executive officer. With him are Douglas Shuro, chief financial officer, and DDA Lasser, vice president of sales. I would now like to turn the call over to Mr. Hsu. Please go ahead, sir.
Lee Leon Hsu | Chairman, President & Chief Executive Officer
Good afternoon, everyone, and thank you for joining us today. Let me start by highlighting two recent and important events for GSI. First, we announced the research paper published by Cornell University in mid-October. The paper verified that all Gemini 1 chips performed on par with NVIDIA's A6000 on certain AI tasks. while consuming roughly 98% less energy. This paper validates the disruptive potential of our compute-in-memory design, particularly for the real-time commercialization of Gemini 2. With 8 times the memory and 10 times the performance of Gemini 1, Gemini 2 is positioned to deliver superior processing at a fraction of the power when compared to existing solutions. This brings me to my second point. The market quickly recognized the significance of our compute-in-memory validation with the Cornell paper. Building on the momentum from the paper's funding, we closed the $50 million equity financing We are now deploying the capital to accelerate execution across our hardware and software build-offs, making this a pivotal period for GSS growth. Post-funding, we are working on the initiative in parallel. First, we have begun the work to acquire the necessary IP for Plato, which will allow us to start hardware development. This IP provides a crucial connection to support broader system interface and the prototyping for future customer applications. To accelerate Plato's time to market and capture market opportunities sooner, we are building additional software teams to support Plato. Second, to exercise the build-out of our Gemini 2 software solutions and applications We are investing in all the layers that make the platform more accessible and accessible for developers. These software tools are essential for customers integrating Gemini 2 hardware into AI and signal processing workflows, particularly in edge and the defense applications where efficiency and the low power provide a competitive advantage. Looking ahead, our initiative for calendar year 2026 are centered on converting proof-of-concept projects into commercial customers and changing those relationships into large production programs. EDA will provide an update on where those efforts stand today. To sum up, our post-funding The initiative was targeted and disciplined, will be targeted and disciplined. We are rapidly moving forward with the private hardware design and the software development, ramping up our Gemini software ecosystem, and strengthening ties with key defense and government partners in our POG and small business innovation research or SBIR programs. These actions position GSI to turn technical progress into commercial success in the high-value edge and the defense applications, such as the drone, military vehicles, satellites, and other use cases, and right away for AI compute innovation. Now I hand the call over to Didi, who will provide more details on this topic and discuss our business development and the sales activities. Please go ahead, Didi.
DDA Lasser | Vice President of Sales
Thank you, Lilien. Let me expand on the topics that Lilien just highlighted. We continue to advance our ongoing projects, including our SBIR and POC engagements with potential customers. Recently, Gemini 2 has been approved for prototyping by the offshore defense contractor to whom we shipped a board and software to a few months back. This POC focuses on synthetic aperture radar or SAR, applications for drones and other edge systems. What's exciting here is that our solution delivers the required performance while maintaining an extremely low power profile, around 15 watts, making it ideal for compact, energy-constrained environments. For added context on just how competitive the solution is, an incandescent light bulb uses about four times more wattage than our solution. We are also involved in a joint POC involving two defense organizations and a drone integration partner. This Gemini 2 project combines YOLO model we developed with multimodal large language model processing at the edge, specifically targeting time to first token, a key performance metric for drones. Along with our partner, we successfully demonstrated the end-to-end application to one of the potential end customers. Gemini 2 outperformed the competing solution, particularly in how quickly the model produces its first response. We are now optimizing the algorithm and expect to publish initial benchmark results before year end with a fully optimized version available in the first half of calendar 2026. This algorithm would be for defense applications such as drones, satellites, and other military vehicles. Gemini 2 is a central part of the near-term commercialization roadmap, and we are encouraged by the customer engagement and technical validation that is being received. Turning to our PLATO program, we are embarking on the journey towards a major milestone, the tape-out of PLATO chip in early calendar 2027. Over the next year or so, we plan to actively engage several strategic partners for PLATO who could provide funding and collaborate on testing and prototyping early versions of the chip. Their involvement would also support the development of software libraries and APIs, ensuring that PLATO becomes a versatile, scalable solution across multiple markets, starting with defense. In military and defense applications, the APU's high performance and low power capabilities provide unique advantages. and PLATO will further enhance critical functions such as SAR imaging, object recognition, GPS-denied navigation, and data fusion for drones and military vehicles, delivering real-time tactical capabilities in compact mobile systems. PLATO's design builds directly on the foundation of Gemini 2. To accelerate time to market, we are acquiring building block IP that allows us to focus on differentiation rather than reinventing core components. Strategic partners would play a critical role not just in meeting our ambitious timeline, but in shaping the chip's capabilities, validating its performance in real-world applications, and guiding future enhancements. Their technical collaboration and early adoption would position us to deliver a highly optimized, field-tested solution, strengthening our long-term leadership in specialized AI compute architectures well beyond the immediate financial support. And lastly, a comment on our SBIR work. We recently received a $751,000 extension of one of our space development agency contracts, which includes additional funding for radiation-hardened beam testing of Gemini 2. The goal of this testing is to evaluate the robustness of the current Gemini 2 commercial chip for possible use in satellite and other aerospace applications. While it's too early to confirm, confirm specific designations, we see this as a significant opportunity. Let me now switch to the second quarter's commercial, I'm sorry, customer and product breakdown. By revenue, I am referring to net revenue in the following comments. In the second quarter of fiscal 2026, sales to KYEC were 802,000 or 12.5% of revenues compared to 650,000 or 14.3% of revenues in the same period a year ago and 267,000 or 4.3 percent of revenues in the prior quarter. Sales to Nokia were 200,000 or 3.1 percent of revenues compared to 812,000 or 17.8 percent in the same period a year ago and 536,000 or 8.5 percent of revenues in the prior quarter. Sales to Cadence Design Systems were 1.4 million or 21.6 percent of net revenues compared to zero in the same period last year and 1.5 million or 23.9 percent of revenues in the prior quarter. Military defense sales were 28.9 percent of second quarter shipments compared to 40.2 percent of shipments in the comparable period a year ago and 19.1 percent of shipments in the prior quarter. Single-quad sales were 50.1 percent of second quarter shipments in fiscal 2026 compared to 38.6% in second quarter fiscal 2025 and 62.5% in the prior quarter. And now I'd like to hand the call over to Doug. Please go ahead, Doug.
Douglas Shuro | Chief Financial Officer
Thank you, DDA. The company reported debt revenues of $6.4 million for the second quarter of fiscal 2026 compared to $4.6 million for the second quarter of fiscal 2025 and $6.3 million for the first quarter of fiscal 2026. Revenue growth in the quarter was driven by strong market momentum for leading SRAM solutions. Gross margin was 54.8% in the second quarter of fiscal 2026 compared to 38.6% in the year-ago quarter and 58.1% in the preceding first quarter of fiscal 2026. The decrease in gross margin for the second quarter of 2026 was primarily due to a change in the product mix. Total operating expenses in the second quarter of fiscal 2026 were $6.7 million compared to $7.3 million in the second quarter of fiscal 2025 and $5.8 million in the prior quarter. Research and development expenses were $3.8 million compared to $4.8 million in the prior year period and $3.1 million in the prior quarter. The increase in research and development spending compared to the prior quarter is primarily due to changes in the level of stock-based compensation expense and amounts of government funding received under SBIRs in each quarter recorded as an offset to research and development expense. Selling general and administrative expenses were $3 million in the quarter ended September 30, 2025, compared to $2.6 million in the prior year quarter and $2.7 million in the previous quarter. Second quarter fiscal 2026 operating loss was $3.2 million compared to an operating loss of $5.6 million in the prior year period and an operating loss of $2.2 million in the prior quarter. Second quarter fiscal 2026 net loss included interest and other income of $43,000 and a tax provision of $41,000 compared to $149,000 in interest and other income and a tax provision of $23,000 for the same period a year ago. In the preceding first quarter, net loss included interest and other income of $13,000 and a tax provision of $54,000. Net loss in the second quarter of fiscal 2026 was $3.2 million, or 11 cents per diluted share, compared to a net loss of $2.2 million, or 8 cents per diluted share, for the first quarter of fiscal 2026. For the prior year second fiscal quarter of 2025, net loss was $5.5 million or 21 cents per diluted share. Total second quarter pre-tax stock-based compensation expense was $856,000 compared to $663,000 in the comparable quarter a year ago and $341,000 in the prior quarter. At September 30th, 2025, The company had $25.3 million in cash and cash equivalents compared to $13.4 million at March 31, 2025. Working capital was $26.8 million as of September 30, 2025 versus $16.4 million at March 31, 2025. Stockholders' equity as of September 30, 2025 was $38.6 million compared to $28.2 million as of the fiscal year ended March 31st, 2025. Lastly, for the third quarter of fiscal 2026, we expect net revenues in the range of $6.0 million to $6.8 million, with gross margin of approximately 54% to 56%. We remain focused on disciplined execution to bring Gemini 2 to market, advance our roadmap for Play-Doh, and drive long-term shareholder value. Operator, at this point, we'll open the call to Q&A.
Conference Operator | Operator
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Conference Operator | Operator
Our first question comes from Robert Christian, private investor.
Conference Operator | Operator
You may proceed with your question.
Robert Christian | Private Investor
First of all, I'd like to congratulate you on the Cornell verification. But I'd also like to know, have you done any work with the auto industry on autonomous vehicles?
DDA Lasser | Vice President of Sales
We have not yet. So as we've talked about in past calls, We certainly have limited resources, and that takes tremendous effort for that market space. So we're currently starting in the military defense arena, but we certainly believe our technology will adapt well in those areas, and so that's certainly a focus for us in the future, but not yet.
Conference Operator | Operator
Okay, thank you. Our next question comes from Mark Badner, private investor.
Conference Operator | Operator
You may proceed with your question.
Mark Badner | Private Investor
Hey, guys. Good afternoon. I had a question on the $50 million placement you recently did. Was that with a strategic investor? What sort of investor? And was there a holding period to that stock?
Douglas Shuro | Chief Financial Officer
No, it was just... someone that was interested in the company, uh, wasn't, wasn't strategic in any way. And, uh, there is, there is no required holding period for the shares.
Mark Badner | Private Investor
Got it. Okay. Um, and I just followed to that, were there, have there been any strategic circling at all now post the Cornell report?
Douglas Shuro | Chief Financial Officer
Can you repeat the question please?
Mark Badner | Private Investor
Have there been any increase from more strategic investors, uh, you know, since the report came out from Cornell?
Douglas Shuro | Chief Financial Officer
There are things that we're looking at and parties that we're talking to, but I wouldn't say that there's anything that anyone that we haven't already considered working with at this time. As DBA said, we have limited resources, and I think we have some very significant opportunities that he's already mentioned.
Conference Operator | Operator
Gotcha.
Thank you. Conference Operator | Operator
Our next question comes from David Zelkowicz with ISQ.
Conference Operator | Operator
You may proceed with your question.
David Zelkowicz | ISQ
Yeah, is there any plan to have Cornell or another third party validate the Gemini 2 information, you know, technology? I know the Cornell report was Gemini 1, so is there a plan to do that similar type of analysis for Gemini 2?
DDA Lasser | Vice President of Sales
Yeah, so you're absolutely correct. So Cornell actually received this Gemini 1 board many years ago, and they've actually written a few other papers. And so this was a continuation of that original board. And we are talking to them about getting a Gemini 2 board to them and also other researchers as well.
David Zelkowicz | ISQ
Okay. And then I guess you're talking and you're working with the military, I guess – I didn't see anybody on the board or senior management team that has real military defense experience. Is there any plans to beef up that area of the management or the board of directors in order to target those applications?
Douglas Shuro | Chief Financial Officer
Yeah, no, that hasn't come up as a discussion or topic on the board. At this point, there are no plans to – revise the board. It doesn't mean that we won't in the future if it makes sense, though.
David Zelkowicz | ISQ
Okay. And then I saw you're developing your own large language model, which you're going to release some information on at the end of the year. Just curious of why you wouldn't just use the plethora of large language models that are already out in the market, and why spend resources developing your own?
Lee Leon Hsu | Chairman, President & Chief Executive Officer
No, we are not developing our own large language model. We are working on the open source large language model, like, you know, Gamma 3.
David Zelkowicz | ISQ
I'm just reading your press release. Your press release says, currently developing a multi-model LLM that targets edge applications.
DDA Lasser | Vice President of Sales
Correct. Yeah, for Gemma, so 12B, so Gemma 3 12B, that's the model, and we're developing our algorithms to work with that model.
David Zelkowicz | ISQ
Okay. Why would you do that as opposed to utilizing other LLMs already developed?
DDA Lasser | Vice President of Sales
In this case, it was the definition from the POC that we're working on. So, as we talked about, there are two government entities. that have approached us and a partner to do a POC, and that is the model that they requested.
Lee Leon Hsu | Chairman, President & Chief Executive Officer
Yeah. Also, there are certain aspects of the model which support multi-model well. Okay. So, you know, they can support the image very well in addition to the text. Okay. So that's why they picked on this one.
David Zelkowicz | ISQ
Okay.
Conference Operator | Operator
Thank you.
Appreciate it. Conference Operator | Operator
Our next question comes from Christian Rugg from CER Holdings. You may proceed with your question.
Christian Rugg | CER Holdings
Hi. I was wondering, how are you differentiating your APU versus GPU competitors in terms of power, latency, and cost efficiency?
DDA Lasser | Vice President of Sales
That's a pretty broad question. And so if you look at the The Cornell paper, that certainly hits it on the power. The comparison was to an NVIDIA GPU and the use case they used, the performances were on par, but we were 98% less power. So that certainly shows that. With the SAR algorithm that we've been talking about, certainly our image creation time is faster at a lower power footprint as well. So what we've done is we've done benchmarking on certain use cases based off of input from customers on what they'd like to see. So there are times where we beat them strictly on power. There's times we beat them strictly on performance. Well, I shouldn't say that. We've never lost to them on power. But there certainly are times that we have the advantage on both performance and lower power.
Christian Rugg | CER Holdings
Okay, and then my second question is, given the performance claims and potential of Gemini 2 APU, have you had any engagement or partnership discussions with larger semiconductor or AI-focused companies?
DDA Lasser | Vice President of Sales
So right now, you know, we're focused on the customers at this point. We haven't had any discussions at least recently, with other semiconductor companies.
Christian Rugg | CER Holdings
Okay. And then my last question is, how does the power factor play into building AI data centers at a large scale?
DDA Lasser | Vice President of Sales
So we're focused on the edge right now. And so everything we've talked about right now is the edge. And so certainly the data centers have a real power issue as well. There's no secret there. But what we've been focused on right now with Gemini 2 and certainly with the next generation chip, PLATO, will be at the edge. And so if you look at, as we discussed with Gemini 2, this project we did with this offshore defense contractor, we limited our chip to one of the four cores that are there to get it down to 15 watts. If you look at PLATO, depending on how it's used, can be as little as 4 watts and maximum 12 to 15 watts. So we're really focused at the edge, not in the data center.
Christian Rugg | CER Holdings
All right.
Conference Operator | Operator
Thank you. Our next question comes from Michael Roberts from Roberts Capital.
Conference Operator | Operator
You may proceed with your question. Okay, it seems Michael has gone silent. We'll move on to the next questioner. Michael Cooper, private investor. You may proceed with your question.
Michael Cooper | Private Investor
Good afternoon. Can you talk about the total addressable market that you're looking at over the next five years and then how you expect that to ramp? I'm guessing you have a number of different scenarios, maybe a range of scenarios. You could give us a sense for how large this market is or these markets. I'm sure you're looking at various markets. And then what kind of price points your boards or chips go into products?
DDA Lasser | Vice President of Sales
Sure. It's a good question. So, Michael, I don't have the numbers in front of me, but certainly – There was a report very recently that was issued by one of the researcher analysts at Needham and Company that discussed the drone market specifically. And I don't have it in front of me, but I want to say it was tens of billions at least market size. I want to say it might be larger than that. And so certainly it's a very, very large market. And as we've discussed, we certainly feel with the power of you know, the power profile of our chips along with some of the algorithm work that we're doing for, you know, like Leline mentioned, the multimodal inputs, whether we take an image or text or voice in the future, along with the time to first token advantage that we have, we certainly think that we're well positioned to address that market. That was question one. The second question was, I think it was a two-part question you had. Pricing, that's what it was. Yeah, so pricing, I mean, we'll give you generalities, but certainly it's going to be priced differently by market, but it could be a few thousand dollars a board to $10,000 a board that contains the chip. And then the chip will sell, again, based on the market, but the chip could be you know, $1,000 or more, depending on the market and the volume.
Michael Cooper | Private Investor
And you're working in gross margins in the 80-ish percent range?
DDA Lasser | Vice President of Sales
What were your gross margins? Yeah, it'll be above where we are corporately today. And again, it really depends on the market and how it's sold. It could be You know, it could be 60% to 80%. It really depends on how it's sold, whether it's in a board, in a server, whether it comes with software or not. I mean, there's a lot of different aspects that would move that margin needle.
Great. Conference Operator | Operator
Thank you.
Conference Operator | Operator
Our next question comes from Michael Roberts with Roberts Capital, who is rejoining us. You may proceed with your question.
Michael Roberts | Roberts Capital
Thank you. On capital deployment on the 50 million raise, can you give an idea of how that plans to be allocated, whether it's percentage or dollar amount, amongst the Gemini 2 completion, software development, and the new Plato chip that you referenced?
Lee Leon Hsu | Chairman, President & Chief Executive Officer
Yeah, on the Plato, because there's some fixed costs that we have to spend, like IP costs and the mass table costs. So those are you know, $15, $16, $17 million kind of range. Okay. And the rest of them are single. They're probably pretty even between the Gemini 2 and the Plato. That's mostly engineering cost, you know, the internal cost. And it will be, you know, distributed even inside the company.
Michael Roberts | Roberts Capital
Evenly across. Okay. Thank you. And in terms of then based on your cash runway now, you know, What revenue or gross margin level do you expect to reach operating break-even then?
Douglas Shuro | Chief Financial Officer
You know, if you can assume, I don't know, 65% or 70% gross margin once we get into this.
Michael Roberts | Roberts Capital
Right.
Douglas Shuro | Chief Financial Officer
It's something that I need to take a look at. You know, we're still putting our plans together in terms of hiring levels and so on. You know, associate teams or whoever we need for – the chip development, the additional software teams that we need for the software development. I don't have all those numbers yet to do a calculation.
Michael Roberts | Roberts Capital
Understood. But are there concrete milestones and dates then for the Gemini 2 in terms of the expectation of pilot shipments or expected initial production orders?
DDA Lasser | Vice President of Sales
We will be doing some pilot shipments. We've done a couple already. We plan on doing more in the first half of 2026 calendar. This POC that hopefully we'll be able to discuss a lot more in the upcoming months, depending on the schedules on that, could give more substantial revenues in the back half of calendar 2026.
Michael Roberts | Roberts Capital
Noted. And from the current evaluation customers now, has any purchase orders or letters of intent been provided yet?
Conference Operator | Operator
I'm sorry, could you repeat the question?
Michael Roberts | Roberts Capital
Yeah, have any of the evaluation customers provided any purchase orders or letters of intent yet against that production?
DDA Lasser | Vice President of Sales
They're still in their evaluation at this point. So as we talked about, you know, the board that we sent along with the software, to this offshore defense contractor. They have done a review and they've put us as what's called good acceptance in their system, which means it's passed and been accepted. And so now we're going through the possible use cases. They have a couple different divisions. Two of them we think will be a good fit. One obviously is a SAR division. The other one is what they call their AI division. And so we're looking for you know, for practical applications that can then, like you say, turn into design win and revenue. So we're doing that with the customer today.
Michael Roberts | Roberts Capital
All right, very helpful. And one last question, then I'll let others proceed. Can you elaborate on that software stack maturity then, the compiler SDK, model porting tools, and when developers outside of GSI will have access? I'm going towards an ecosystem adoption of what we have.
Yeah. Lee Leon Hsu | Chairman, President & Chief Executive Officer
No, for the Gemini tool, right now we are developing the library and algorithm. Now, after that, we will move on to the tool and the compiler work. And we are developing this with the customer, you know, the partner and the customer we have.
Michael Roberts | Roberts Capital
All right. Understood.
Thank you very much. Conference Operator | Operator
Thanks, Michael.
Conference Operator | Operator
Our next question comes from Robert Christian, private investor.
Conference Operator | Operator
You may proceed with your question.
Robert Christian | Private Investor
Yeah, can you help me understand why the company is not going after data centers and view of the environment impact with energy consumption and cooling? It seems like we're leaving a lot of money on the table, even if it was just licensed so others could use the technology.
DDA Lasser | Vice President of Sales
So I'm not sure how long you've been following the company, but we have talked about another potential roadmap product. At the time, we were calling it Gemini 3. And that was going to be geared towards the data center. And that one needed a different kind of partner, and it needed a lot more funding. It would have required a very aggressive process node and would have been much more expensive. And so we were going down that road, and again, it was targeted for the data center. In the meantime, we were getting way too much positive feedback and interest on the edge, and we were getting SBIR dollars, and there are other dollars, you know, research dollars that we've submitted for to try and get, and it's all for the edge. And so, you know, the decision was made. We couldn't do both. It was one or the other at this point, and so we decided remain focused on the edge. Not to say with more influx of cash we can't beef up the team and go after the data center, but it strategically made sense for us to remain at the edge for now.
Robert Christian | Private Investor
Okay, but there's not a possibility, say, of NVIDIA or Micron to come in and develop the chip and we get a percentage of it?
DDA Lasser | Vice President of Sales
Oh, yeah, I mean, that's certainly very possible. I can't say those discussions are happening, but, you know, we had some discussions in the past where that was kind of the model we were looking at. So the answer is yes, we could do that. It's just there's nothing in the hopper right now.
Robert Christian | Private Investor
Okay, thank you very much.
Conference Operator | Operator
Our next question comes from Marco Petroni with MG Capital.
Conference Operator | Operator
You may proceed with your question.
Marco Petroni | MG Capital
Yes. You guys just recently raised 47 million nets and you had 13 million last quarter. And the balance sheet shows only 25 million now. So I was wondering where that money went, number one. And number two, going forward, what type of capital allocations do you need to build out the software team to do all this other stuff that we've been talking about?
Douglas Shuro | Chief Financial Officer
Well, the first answer is that that transaction closed after the balance sheet date. It was an October transaction, and the $27 million that you see is as of September 30th. And in terms of the capital allocation, I think we answered a previous question where we're looking at some IP and other stuff that we need to purchase for Plato, and then we expect to split funding between software development and Plato development.
Marco Petroni | MG Capital
So how much cash do you have on hand currently?
Douglas Shuro | Chief Financial Officer
Well, take $27 million, or $23 million, I'm sorry, $25 million balance sheet date, plus we got another $47 million in, so that should give you a reasonable estimate.
Conference Operator | Operator
All right. Thank you. Our next question comes from Mohamed Alsosi from Scale. You can proceed with your question. Hello? Hello? Yes. Hello?
Mohamed Alsosi | Scale
We can hear you. I want to know if... Yes. I just want to know if you have attracted any interest from any potential new customers after the Cornell study on APU performance?
DDA Lasser | Vice President of Sales
I'm sorry. Just to be clear, you're asking if we've gotten any more... customer traction because of the Cornell paper? Is that the question?
Mohamed Alsosi | Scale
No, I want to know if you attract more interest or potential new customers after the new Cornell study on APU performance.
DDA Lasser | Vice President of Sales
Okay, I think that's what I just said. Okay, so the answer is the customers we've been talking to, we've been talking about this low power advantage for some time, and we've done benchmarks. on several applications with some of our customers. And so they're aware of that. And so in that respect, you know, it's not a surprise to our customers we've been talking to that we have this low power advantage. You know, this just illustrated it for the, you know, for the rest of the public as a third party validation of what we've been saying.
Okay. Conference Operator | Operator
This now concludes our question and answer session. I would like to turn the floor back over to Mr. Li-Lin Hsu for closing comments.
Lee Leon Hsu | Chairman, President & Chief Executive Officer
We look forward to seeing you at this event and your participation in the third quarter of the fiscal 2026 earning call.
Thank you. Conference Operator | Operator
Ladies and gentlemen, this concludes our conference for today. Thank you for your participation. You may disconnect your lines and have a wonderful day. jsPDF 3.0.3 D:20260809225246-00'00'