Q3 2019 Earnings Call
Good day and welcome to the Stephens Inc. third quarter 2019 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signally conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions.
Ask your question we press Star then one on your telephone keypad to drive your question. Please press Star then too. Please note. This event is being recorded I would now like to turn the conference over to Richard Kingston, Vice President market Intelligence Investor and public Relations. Please go ahead.
Thank you cards.
Good morning, everyone and welcome to see this third quarter 2019 earnings conference call I'm joined today by getting Wertheizer, Chief Executive Officer, and Yaniv Arieli, Chief Financial Officer, Gideon will cover the business prospects on the highlights for the third quarter provide general qualitative data.
He will then cover the financial results for the third quarter also provide quantitative data for the fourth quarter of 2019.
I will start with the forward looking statements.
Please note that today's discussion contains forward looking statements that involve risks and uncertainties as well as assumptions that if they materialize or prove incorrect could calls the results of see about to differ materially from those expressed or implied by such forward looking statements on assumptions.
Forward looking statements include our optimism about our IP portfolio for wireless connectivity and smart sensing.
New agreements with customers in the automotive space.
Adoption of narrowband Aiotv.
Youre right developments market data about the motion sensors space.
And royalties prospects from these recent licensing deals.
For information on the factors that could cause a difference in our results. Please refer to our filings with the Securities and Exchange Commission.
These include the ability of C was I piece for smarter connected devices to continue to be strong growth drivers for us.
Our ability to realize the benefits from the acquisition of certain assets of Hillcrest labs.
Our success in penetrating new markets I, maintaining our market position in existing markets.
The ability of new products, incorporating our technologies to achieve market acceptance and offset the maturity of the handset Marcus.
The speed and extend the expansion of the Fourg, LTE and Fiveg networks, and wireless connectivity AI narrowband, Aiotv and Aiotv space in general.
Our ability to execute more non handset baseband license agreements.
The effect of trade targets on political tensions.
The effect of intense industry competition that consolidation.
And global chip market trends.
Steve assumes no obligation to update any forward looking statements or information, which speak as of their respective dates.
In addition to the financial results prepared in accordance with the generally accepted accounting principles or gap.
We will also present certain non-GAAP financial measures today.
He was management believes that in addition to using GAAP results in evaluating our business. It can be useful to review results using certain non-GAAP financial measures.
Investors potential investors are encouraged to refused a reconciliation of non-GAAP financial measures with their most directly comparable GAAP financial results, which can be found in the earnings press release issued today.
A copy of today's press release for the quarter ended Septemberthirty 2019, and the related financial tables and management commentary, which were included in our current reports on form 8-K.
Filed later today also can be fine fine on the Investor Relations portion of our website. Following this call.
With that said I'll now hand, the call over to Gideon.
Thank you Rachel.
Welcome everyone and thank you for joining us today.
We are pleased to boy the lever, but so what do we get Nicholson another excellent quarter licensing and ship and show that both be now work they live in here.
Based on the revenue could be think warfare was 43.5 billion, but oh, 28% sequentially and 10% or they usually have basis.
License revenue was 11.3 million below.
Yeah sure deal really.
Wanted to get of Anyways for instance, you remember, though [laughter].
61% sequentially and participate friends on either the basis.
We completed there.
Agreements in the quarter.
We could be anywhere for chronic he would be one.
Smell sensing.
Bodies of these agreements, where we still stand question.
That's good news I understand there to improve the won't be a dose.
Feeling great about neat though.
Wireless any of your bike and why the value of T O I just be devices.
Hi, good being signed during the quarter.
We will strategically book that we can make teenage I read a lot Boyd or these children.
No and we continue to show consistent execution in signing up new customers and because of the pipeline full year agreement.
Comprehensive portfolio for wireless connectivity and my true she instill Shane will be made almost every semiconductor company and OEM.
Oh, sorry did not meet you would be okay, and well we need bombing in businesses.
Every geography, India is well single opportunity in small edge devices for consumers, who will Betsy I hate to multi.
When you did you don't have anything about 50 application a strong areas of interest.
Hey.
Moving to China, we see interest for eight.
In consumer electronics and in China.
We are engaging we discussed during the course, mainly very because including wireless infrastructure smartphone well built and why do you feel so you'll see device.
Let me take the next few minutes expand on three important licensing agreement shy of the in the quarter.
The first is a comprehensive agreement we said name brand. So anything that's doing problem there in both the more people. Okay. We choose a new peskin Middle School CBS NBC space.
It sounds good Moshe looked good though AOL well, so so April systems technology, which we announced last month a long these oh computer they see the and then a softer fairway.
Well its next generation Adas features.
We are extremely excited they did make these these keep let you probably get being mainstream in high volume a best use cases, such as the must be emergency braking, which is no men. They might get then regular fully groups such as in couple of pure adaptive cruise.
Controlled lane, keeping blind spot detection survived view anymore.
These design wins anchors our position in both the making space and ads as well and maybe keep automotive related customer which include on semiconductor industry, leading supplier will aid the scheme at central in one of the world's largest automatically.
These effect last night, we announced our latest news for Ace Hey, I also vis a vis vis the requirement for base of any proficiency and performance get up really well.
We also and I agree and then extension flow CBN, and say well cold Cdnineteen device, Apiay, which they know that must be Oems or PD. One question, though on why if they I was the sale.
I believe we use our comprehensive CBNL software third world, which saves and costly any company complicated, but then of NIM AI compiler technology.
The second agreements if he would like to highlight sizable new Phil snow and it will be agreement.
He is one of the worlds largest from ineffectual overhearing instead as further.
And the industry that is going this way convenience technology innovation involving digitization and wireless integration.
Oh extremely low bowl via these technology, we believe inside an advanced healing installation.
And they did the user of the device slowness need for Nick we the smartphone and Oxyfuels food applications and services.
Just daily all the streaming voice landscape and the remote killing it.
These new compared to the agreements, we don't customer expose themselves.
A growing industry.
According to the company's leases addresses the bulk water <unk>.
Experience using difficult.
The sale agreement in the quarter was with a very out you will be in semiconductor company, who decided to license our comprehensive dragonfly and you see I see.
Initially full smell to meet their application.
So first agreement with these large customers, who owns broad product portfolio and hit they Vince customer base and strong synergies, we sell Waddle project.
Hey, bookshelves never been diet season, they Seminole grateful strong below you spoke with.
Beyond China, where the deployment is ongoing India led by reliance Jio is pushing forward they love Gracie overall.
In a treats and any other general meeting the Lions chairman. They stayed the Geo aims to coordinate 1 billion in VIP devices within the next two years.
He also mentioned that 300 million smoke may do you would be connected in India for will pay more than filling in for and they've been conceal no.
The visibility and food controlling costs.
And warranty revenue, we had to strike quartile, including first started contribution from Heiko club sensor fusion business.
Oh, it's been customer benefited from the launch new selenium deals smells fun and not get chess game in the no deals in the form targeted for developing economies.
In the non baseband segment, we continue the momentum with excellent progress is contributing 3.9 million, though an all time high.
These units up 29% sequentially and 27% feel very you leave you also an all time high we're building a high 123 million units.
During the quarter, we felt we joke customary screen Regal well he brings club sensor fusion technology that we recently acquired.
The feedback has been very constructive when they put pen churn into fiction boy I discussed a moment and the potential business schools.
The motion central space.
A big instrumented market blind well over 6 billion both in mens semiconductor corn thing.
And then I wouldn't be plentiful coal being so industry research feel you all development.
Initially our focus will be around what peaks, let's hope small my headset and is one thing that's come from.
Equal sloppy their household name, we strong technology fundamentals in solid customer relationship.
Particularly applies to Oems will grow revenue composition, we literally from all these things on the device prices had been appfluent licensee and built important piece that we engage we semiconductor question.
In summary, we had an excellent sales will do both TV licensing on the licensing on was before.
We remain focused on executing licensing agreement and gaming deep customer adoption is every then it goals the through three quarters in DC.
Licensing is that we can also for warranty goals and any leverage that we outlined in all generally investor would be.
Oh would be that many reflected the strong uptick in standalone they've been.
Wind contribution well known hence it segment.
Well new product ramps, you first and then getting into production and for me those slots OEM customers.
With that said there are now during the quarter over to your need we outline Oh, and then Johnson bed.
Thanksgiving.
Good morning, I'll start by reviewing our results for the of the operations for the third quarter of 2019.
Revenue for the third quarter was $23.5 million up 10% as compared to 21.4 million for the same quarter last year.
Our revenue breakdown what this fall.
I think thing in related revenue was approximately $11.3 million, reflecting 48% of our total revenues.
15% higher as compared to the third quarter of 28.
Well the revenues were $12.2 million, reflecting 52% of total revenue up 5% from 11 point Sixmillion for the same quarter last year and up 61% sequentially.
No one had the non handset baseband royalty revenue reached an all time record high of $3.9 million for the core.
Well to gross margin or 88% on GAAP, They said that 89% the non-GAAP basis as projected.
Our total operating expenses for the third quarter came in at approximately $21 million.
Upticks also included an aggregate equity based compensation expense of approximately $2.6 million.
Deal expenses and a write off they acquired leaf associated with our Hillsboro slab transaction of zero point $8 million amortization of acquired intangibles associated with the acquisition of Hillcrest labs, and humor vision investment half a million dollars.
Every day modernization that acquired intangibles of <unk> Rivierawaves for zero point $2 million.
Our total operating expenses for the third quarter, excluding those items.
For 16.8 million just below the mid range of our guidance.
In the third quarter, we've included a tax audit.
Following which we recorded a tax benefit of approximately 1 million dollar on both GAAP and non-GAAP basis.
We currently have no other pending tax audits on both.
You with GAAP net income for the quarter was zero point $8 billion and diluted earnings per share or three cents as compared to two and a half million dollars in 11 cents for the third quarter 2018.
Our non-GAAP net income in diluted EPS for the third quarter of 2019 or slightly down, 2% and 4% to $5.1 million.22.
Secondly from net income in the noted bps for the third quarter of 2018 of $5.2 million.23, respectively.
Other related data.
Shipped units by Steve a license fees during the third quarter of 29 gene or 292 million units.
Up 35% sequentially and 11% up from the third quarter of 28.
Of the 292 million units should 169 million units or 68% war for handset baseband chips.
Reflecting a sequential increase of 38% from 122 million units of based Ben Shim.
Shifting to say during the second quarter of 29 gene and an increase of 2%.
165 million units a.
A year ago.
As Gideon stated earlier, our non handset shipments reached an all time record high of 123 million units up 27% sequentially and 20% 7% annually.
Our non handset baseband units.
The handset non handset baseband units 92 million well reflected our Bluetooth shipments, which also reached an all time record high for the quarter.
As for the balance sheet.
And the end of September Steven <unk> cash cash cash equivalent Ellingtons marketable securities in bank deposits were a high mid $48 million nine from 166 million from prior quarter.
A recent 21 million dollar investments and sensor fusion and wide angle distortion correction technology.
And we were focused our attention and financial resources on the acquisition of these technologies into third quarter, we did not execute any share buyback program. During this period.
Nevertheless for 29 team today, you purchased approximately a 194000 shares for approximately $4.9 million.
Moreover, our board of directors at year end goal approved expansion of our buyback program and as of the end of September you have totaled over 161000 shares available for repurchase.
Our dsos for the third quarter improved 31 days.
During the quarter, we generated $3 million net cash from operation.
Yes, Jason was zero point Eightmillion.
Purchased a fixed asset was 1.3 million.
And investments in new technologies were $21 million.
We ended the quarter, our headcount was 383 people.
Which is 318 were engineers.
Including form to held for slab, which meet welcome onboard in July .
[noise] qualitative data specifically for the fourth quarter of 2019.
A licensing and related revenue.
As Gideon alerted.
We continue to experience healthy demand for our technologies across all geographies.
On royalties.
The forecast at 10% sequential increase after recording 61% sequential growth in the third quarter.
It should equate to a new all time high royalty revenue for the fourth quarter.
Gross margin is expected to be approximately 89% and gap, 90% the non-GAAP basis.
Moving an aggregate 0.2 million or they equity based compensation extensive and zero point $1 million for the amortization of expenses associated with acquired intangibles of bit narrowed then how your teeth technology.
Overall.
Opex is expected to be in the range of $20 million to $21 million.
Hi, anticipated opex for the fourth quarter $2.7 million is expected to be attributed equity based compensation expenses.
Zero point Ninemillion to amortization of acquired intangibles of Rivierawaves Hillcrest any of your vision.
Our non-GAAP Opex is expected to be similar to the third quarter level in the range of $16.3 million to $17.3 million.
Net interest income is expected to be around.
$100000.
For the quarter actions for the quarter zero point $8 million on GAAP basis than 0.9 on non-GAAP basis.
Less than love these share count for the fourth quarter is expected to be in a similar level for the third quarter of approximately 23 million shares.
Gary you could now open the floor is to keep an eye session.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
You are using speakerphone, please pick up your himself before pricing.
If at any time your question has been addressed and you'd like to withdraw your question. Please press Star then.
At this time.
<unk>.
The first question will come from Matt Ramsey of Cowen.
Thank you very much a good afternoon over there guys and good morning, everyone.
I guess.
And I wanted to ask and I guess, congratulations first of all in the progress in the business outside of the handset market.
But but I wanted to ask a couple of questions about a smartphone market you mentioned in your prepared comments renewed strength in fourg devices from some of your licensees I'm wondering if you might expand on that a little bit I think there.
Our some concerns with strength it at Wawa and swing with Qualcomm into the Fiveg cycle next year.
Looking to see some strength from some of your licensees on Fourg and if you could spend on that I think that would be helpful. Thank you.
Yes, Hi, I'm, a big things for their Cougar congrats.
So you know the MLP.
He is he's a dynamic market mainly concerned that they station.
We we freed from different thank a number one we see screens sizable amount of feature phones that are still being shipped in the developing ammo.
And when it comes down a customer and a weird.
Well, it's all another one that will soon chip.
Hey, they believe a whole lot of.
The communities in the developing countries that are now moving to NP. So.
What we see no here is there its market share gain because at that space Alagasco now has the area the price advantage and assistant advantage and then locality.
So.
Then the D. that we want people to keep in mind that then be is the is is easy stena going to market and then they even do seem to Fiveg is it's it's a defense coke.
Got it Okay. That's helpful color and Andy just a follow up on obviously the big opportunity.
Near term for your company in Fiveg is on the base station modem side. If you could just give us a little bit of an update about timing and magnitude of.
Royalty revenues over the next few quarters I know, there's been some fits and starts with some of the.
Rollouts and obviously some of the challenges in China, given the political spectrum, but if you could just update us on where we are in the rollout of some of the base station products and royalties that would be really helpful. Thank you appreciate it.
Yeah. So.
[laughter] kicking the ball then be the base station. That's the plan. We are we have customers shipping as be ER.
For base station and then he is very important because there is.
Steve dynamics Israeli surfing the Internet site.
Upgrades updates improvement also when it comes to Fivea phase G. When each quarter and not what is going wont stand alone, which is there and deployment. They the first depending if they'd be will be a non standalone. Then then fees the basketball so people that the leaning into the do it would have to so.
To upgrade to Fiveg no specific due to provide you with customers and people knows about.
That's out in design the seed funded design chip design is there severely complicate a cheap.
With the latest nodes and a piece.
And you have to be in beef dying to extinguish the Vince so.
Assuming the same design now progressing but we are we done thats the visibility on Wednesday.
Leach.
Below the volumes there we need to do you think shenzen bendel anyway.
Now let me add the one thing about the prior question of LP units just for you understand the magnitude of your experience. This year, we've seen it in the past, but you know these things have their own.
Our Q1, we powered 41 million LT phones went up to 52 in Q2 of this quarter 80.
Lives within call it two quarters, where a doubling the volume avail de here, we're talking about LP phones. They only in some of the high end. Some are low end. So this is some of the magnitude we've seen in the market share handset is one of the highest we had in the last couple of quarters over 30%.
Up from 23% pending in the prior quarter.
This is some of the magnitude that we had this thing some improvement across most of our customers in the space.
And then for now the the we forecast that the continuing for the fourth quarter for met I want to complete the this idea in the broader scope that we spoke about the base station, but if we do have a play into the Internet site and in China, which is going to be the the lead market in terms of adoption.
Your next year, and we ever peskin, though that the knows the.
Chips and simplification and we see when the these lucky realized two development. We are not you will not outside of the five gensets is what.
Got it. Thanks. Thank you very much guys I appreciate all the color.
Thanks.
The next question will come from Mike Walkley of Canaccord Genuity.
Great. Thank you and Oh my Congrats also on the on the strong results in a licensing momentum.
Yeah, just just building a little bit on on Matts question is as we look at your different infrastructure customers. How do you see maybe the next one to two years developing if they start to ship.
China's must start building out fiveg in a big way and I imagine your Chinese OEM customer should benefit from that and then he on Nokia has has made public comments, how they need to get there.
System on chip correct to get their cost structure right. So assuming they get that fixed in 2020, what what could maybe 2021 look like if you get a full year from Nokia along with your other Fiveg base station customers.
So we cannot really tell specifically on on timing gonsior deployment that bring people MP and they want to say something good mode. There Oh plane five Joe.
Well, even say base station. So it's not just one product.
In when you go through May station, you had in there a year, but this cause you to debate has been side do you and I'll tell you, which is the it'd be a speed the dosing down there now you have small sense.
And your fixed wireless all these.
All these they're basically.
A.
Unveiled in L. base station. So we have several customers some of them is going into big deals I'm not going values are going to small incentive.
And.
They they they all who will be there a little supposed to be there in your thing, though the only thing that we can say they stayed very bell old fully committed in hand and market strength.
We invested as once the has the broader.
Like the books summarize this and this and different award the timing and we saw that over the last two years, we don't have control, but our plan then the royalty estimates that we had before still hasn't changed the NAV shifted to 21 and Dion and but then if we are in those next generation, we should be there for a long long time.
So I think the timing is that the mode.
Problematic issue there. The final goal is not there has not changed.
Okay. That's helpful that that's I'm just trying to frame. It does it make sure that targets are still there longer term because 21 should be a year one more the Oems got their full product portfolio shipping and it just a follow up question for me just given your diversifying customer base nice wins that you've talked about on on the automotive motive side.
No just given your pipeline you've talked about and the business trends do you still feel like near the business model is tracking with the diversified customer base to a double royalty levels by 2022 from the 2018 levels.
Yeah, No no no doubt five new customers live just than last quarter that has never worked with us among which are the automotive and then they are up and I will see guys.
So thats very exciting from our point of view and when you add some of these new technology that you talked about that both the sensor fusion and the wide angle distortions that in a sense helps us a bridge some of the other moving pieces that we have and then the model than there were still very very committed.
2022 goal, although doubling that 2018 last year's royalty.
Revenue and increasing the licensing revenue from there and we've seen so far pretty nice progress in 2019 on that specific from.
So yeah, we're very focused to work out and make it happen.
Last question for me I'll pass it on.
Anything you can maybe share of either qualitatively or give us numbers about how many customers are commercially shipping products today, driving driving royalties and ER and where you could maybe see that in a couple of years based on you know people working on chip so from your licensing side.
Yes, I believe if they should be in the neighborhood of the in 40 to 50 customers and maybe even one or two new ones that we just saw some new initial reports this last quarter.
They probably have more than 60 and companies in design not including even the last the recent ones in the last quarter. So.
You know on top of vendor.
The potential for now is north of 100, the 210 <unk> customers, though they hopefully follow make it to market the existing ones that is the basis for the royalty growth in the next couple of years.
Great. Thank you very much.
The next year. Thank you.
Your next question will come from Suji de Silva of Roth capital.
I get in high anyway, congratulations on a strong quarter here.
Leave I heard you mentioned, a second smartphone base band customer shipping soon is that a new royalty opportunity to Steve is that a fiveg only opportunity and what geographies geography is that.
Hi, Suji.
It was also I was listening to my question about size Jared does one I wanted to say that when we all know outsider into finding one of our customer will be announced rather than the simplification.
If customer refocus on China, No, China is going to where they could be really dynamic next year than the prices are going down to only be to appease leasing the incentives for China mobile so to speak about 280, though so I do phones, so that's going to be.
Sportsbook will discuss them.
Okay that helps clarify thank you get in and then under licensing side I saw the deferred revenue jump here is your visibility increasing is 10 million for quarter or 11 million per quarter them or more.
Reasonable sort of expected run rate going forward.
No no. It's just the technical thing I mean, I would they have picked a copy it every time, but it's just the royalty jumping up from the seven to the 12 and remember that under the new Sixtyl six the accounting rules, we only get the reports after we closed. So these are revenue that we recognized but haven't invoiced yet.
This is the this is why falls into deferred it just revenues that there will be billed and collected later after the quarter. It's okay. So, let's let somebody like that.
Okay.
Yeah, they happens everyone slow and on top of that we also have few deals money. They end up close to the last as part of the quarters. It was a bit backend loaded but.
Nothing out of those varian change of business to around that.
Okay. So run rate wise, you need of 10 million a quarter or lemley, a quarter, where is that what's more kind of likely kind of forward looking number to think about.
On the further you mean licensing licensing.
Hi, licensing, yes, yes, I mean this is something that we've been comfortable for a while we haven't talked about the 10 to 11 million.
The next the next step function for us after remember a few years ago being of the 20 something for the 30, adding that back then vision and the demand connectivity short range connectivity and with a high and the base station and the Hillcrest now, although not contributing directly to licensing yet.
That should be for now comfortably, we're very comfortable pending 11 million, which will.
Should get us already by the end of the year to a higher a licensing step function versus the 40 ish, but you haven't asked for years.
Okay, Great and then last question I congratulation on the automotive progress here keep talking about the competitive landscape and your customer is that a new entrance to the auto marketers and establish customers switching over to Steve I from existing solution, but help us understand where your sliding into automotive. Thanks.
[noise] Suji, that's been sort of question, but then there's the customarily.
That we managed to win is incumbent a strong independent industry.
And that's why we are focusing men are they doing going on on broad technologies that when we entered the automotive market, which is the vision we have the right when the on sort of it'd be a speed for fiveg equinix he receives with customers and.
Ultimately four legs and ended the unfold stangl might explore other elements in the call because at the synergies.
Well, we often female bolstering incenting in one area is the perfect fit.
And it did say agreement is there and I believe they can do.
Do you want.
Now this business that pencil visibility in this space, which has on the high end to do.
Okay. Thanks, guys congratulations again.
Thank you. Thank you.
Once again, if you have a question. Please press Star then one.
The next question will come from David O'connor with <unk>.
BNP Paribas.
Great. Good morning, Genset. Thanks for taking my question, one or two from my side, maybe first the on the automotive side that congrats on the new when can you give us any idea what geography customers in and I'm also maybe an update on exactly how many design wins you have no across your three.
I think the automotive customers and when you can expect the being should ramp up and royalties theirs.
So.
Hi, David.
You know that the testimony there is a global company. So we cannot the people in specific geography, it's a it's a global company that of course has a global.
Customer base.
Uh huh.
With that or a question about customers that will wind up in mobile I mentioned interpret those remarks.
The tree and true testing.
Is there we talked about being the best at night on semis, we talked about it there are a very large Oems the deals out technology, and a and b cell, but we do have other thats. The know this approach there was the most especially though.
Not necessarily from dollar yen space, but what is called the deal one.
The value chain in daily EM in there were committed to space is a bit different areas or the as you as the tier ones you have aftermarket with customer that approaching the aftermarket. These older equipment, that's being it's still upstairs statistical.
It's been so these other customer that we do the temporarily or the last agreement that we sign in the other two that weird before.
Or a big rankings for us in this space.
Great. That's a that's quite helpful and maybe as a follow up to a previous question. So did the 60 companies that you currently in design. How many can you give us any sense of how many of these are going to ramp in 2020. Thanks.
It's an excellent question and then if you would help me with that number that would be even easier and nicer, we need to do this exercise the and this is a usually the time that last the two months of the year that we planned for the following year check who with our as sale.
Other than the technology, a guy is our field application engineers, where exactly is each customer with different ramp ups are different.
Hey pilots and what's the forecast like Hey, I hope, you'll see E mail and at least a dozen but they it's really hard to say at this point without the.
Diving into it and doing this exercise, which we're doing an annual basis, we don't always get advise even if a customer we signed a past has a chip it doesn't necessarily mean that has the volume and ramping up it depends that went to OEM. Once said they'd before holiday season, or a specific timing or when its competitor comes and he wants to come up a week or two before.
A lot of moving pieces, even after the chip is ready to go to market, but I.
I think but again, we have seen probably two new reports coming out this quarter for first time, there it customers and.
And and the market's a really big game.
In front of lesson in front of our customers Yeah, I would say that this quarter for example out of the the 14 deals. The 11 were at lupus the related deals so really a very very strong anchor and the customer base.
In this market.
That's helpful. Thanks, guys.
Thank you.
The next question will come from Tavi Rosner with Barclays.
Hi, Thanks for taking my questions most of them I mean, I've actually so I guess I had one.
You mentioned you know the entrance into watching them was driving and.
I guess looking at industry for probably no I mean, it's something that we talk about them not lately in.
I would assume that you guys would feed quite nicely into the ecosystem given all the smart sensors and all the need for connectivity.
You being approached by by vendor is now operating them in.
How do you see the addressable market, they're down down down the road.
All right I mean, they treat every day. They previously so Brazil, and then make 2020 Friday, which is the China version of these what this means smoke manufacturing and the diesel is that we are discussing these customers and this relates to fiveg.
You'd be lines, it's like the when Fiveg will I mentioned earlier known Standalone devices mobile mobile boardroom for smartphone, but the go full stand alone.
That's the area that.
Relates to industry. So for example, or a mix where people want be site. So we have multiple angles to going to this one certainly he can instead, we won't get things that they can do always defense zones is the entry period three too. It's a good the area that we can topic.
The lies on then we as a phase G. We have.
The older called the vision and the sound also sound is an area that is.
Are you going to use them for depicting a and may functions of machines.
And you're right, there's still a little bit Michael foreign investors area, that's real specializing in discussion disgusted so.
So industry for Brazil, and these delayed definitely it makes a big thing and and and we all.
Address seagate and discussing this customer in there and we do find puny goes the other it's not the we wasn't very we will not need the new product line.
Okay I appreciate I appreciate the color and then the last while I mean, you mentioned I mean 150 million that caching.
You are looking into any.
Potential acquisitions anything in your radar.
Are you can't valuation or any color would be great.
Sure. This is not something in a need for us we have been looking and continue looking for for ongoing overtime is technology evolves and friends and industry. The to you and give you just talked about the change in evolve and we have done very successful one where the.
Rivierawaves five years ago. We have was we have done to a very interesting ones and we see the first food. They don't know free mentioned, yet, but we have just now in the fourth beginning of the fourth quarter signed our first the sensor fusion agreements. We will talk about if more next earnings call, but that's the first a very nice signs it up.
Immediately after the deal the following a very short period and the one that will be a very successful add ons to Steve.
And there from our point of view of the refining technologies, there were still getting to our customer base, sometimes new markets for us and some things that we could see we think that could bring value to add the food chain. They will continue to invest and we don't have any restriction on the size or.
For a location and so far I think you've done the right thing and we'll continue to look and try to do the right thing going forward.
Thanks, guys and congrats on a good results.
Thanks Harvey.
This concludes our question and answer session I would like to turn the conference back over to Richard for any closing remarks.
Thank you sorry on thank you everyone for joining us today and for your continued interest in support of Siva.
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Thank you and goodbye.
Thank you. The conference has now concluded. Thank you all for attending today's presentation. You may now disconnect your lines.
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