Q4 2019 Earnings Call
Forward-looking statements include our assessment of the overall licensing Market in the first quarter of 2020 our annual twenty-twenty and first quarter 2020 guidance office or anticipated pillars of growth and optimism about achieving such growth objectives reaffirmation of our 2022 royalty goals higher R&D expenses in 2020 and Market data by Del, Oro.
for information
On the factors that could cause a difference in a results. Please refer to our filings with the Securities and Exchange Commission these include the ability of siva's ipv4 smarter connected devices off to continue to be strong growth drivers for us our success in penetrating new markets and maintaining our Market position and existing markets the ability of new products incorporating our technology to achieve Market acceptance the speed and extent of the expansion of the 5G Wi-Fi contextual awareness an iot markets our ability to execute thousand nine hundred and license agreements.
The effect of trade tariffs and political tensions the effect of intense industry competition and consolidation and Global chip market trends even assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. Said, I'll now hand the call over to get in.
Thank you for choosing good morning everyone and thank you for joining us today even deliver an outstanding. And all the world excellent you use revenues and EPS both South passing Street expectations moreover. I will strong performance in particular on the licensing front sets the stage for continued growth in twenty-twenty as will be reflected in the annual guidance between leave with shells you shortly
I will elaborate in my prepared remarks on the grass below and the underlying technology that are driving the performance.
Total revenue for the fourth quarter of 2019 came in at Twenty Eight twenty eight point three million in all-time record high in Sydney ahead or Street expectation a brief licensing environment along with the Strategic customer agreement led to 14.8 million, but in licensing revenue and all-time record high for quarterly licensing Revenue design a record Twenty One years agreement, which fifteen well for connectivity and six world for small tensing.
in out of it
21 deals well with first-time customer.
That was a few cents for all Technologies are based been processing for 5G base stations, smartphone and federal iot devices and computer-based humor, electronic civilians and Automotive Audio and Bluetooth connectivity for True wireless earbuds sense of humor and pull some other TV Control Act of an easy. For Russ and Bluetooth and Wi-Fi connectivity for a wide variety of iot devices.
Also note during the quarter. We signed a sizeable and strategic agreement with the very large smartphone Williams who life with the technology for it in-house cellular modem chip development planned to be deployed in its future smartphone. We are extremely excited and committed to this new engagement and looking forward to capitalize on this opportunity for greater market share extension office space for future 5G smartphones.
Warranty revenue for the fourth quarter was thirteen point five million dollar and hold time record-high seasonal strength a new Production Red Cross to 360 million devices shipped in the quarter also a record-high new phone.
Please leave your area code four point three million dollar in a record one hundred sixty four million units in the quarter.
For the 2019 Revenue came in at eighty seven point two million up 12% from last year off and related Revenue. They called 47.9 million dollar up 18% from last year.
You to strengthen our customer base with the record 52 license agreement sign during the of which twenty-three. Well, which first time customer.
Any other words you have any filthy nine point three million dollar up 5% as compared to last year shipment of Silver Base product. Am 20% deals. Are you the more than 1 billion units entered based in treatments will have 3% of the review with the strong. Second-half The Reason by product launches across all phones. Here's one Hansard basement continues to expand with any other word eleven you up about 49% million dollars and units up 25% to a total of 469 million months. Looking ahead to fix the twenty-twenty. We are setting three priorities.
Well, it would be.
Capitalizing on a recent momentum in licensing to continue to grow our revenue and extend our customer base.
Licensing agreement with virtuous circle where the new licensees driver's seat, which then free up additional R&B funk for Thursday investment. We drive further goes in licensing and royalty momentum. This is what our strategy to synergistically broaden our product portfolio page or garlic investment and m&a played out. So well in the last few years. This was culminated in the Step Up in licensing Revenue off and sustainable goals in royalties from non Hansard basement segment that we are experiencing.
This and we anticipate 3 Gross Peter. The fields pillar is 5G 5G prevent a greater gross. Could you repeat that? We have with 4G LTE to our Civic SI high performance DSP family. We are set to benefit from the new 5G Catholics investment, which is forecasted to go by 159% cagr between 2018 to 2023 according to recent recent published by the loan.
Other opportunity we are addressing with regard to 5G is cellulitis which applies to messy connected devices for Industrial Automation Automotive Transportation small medical NVR. According to recent Ericsson Mobility report. It is expected that they will be 5.4 billion Cellular Connections by 2025 without him pergi and dragonfly more than platform. We are set to Thursday through this demanding requirements and diverse markets.
Sales, 5G opportunity offensive is a mentioned few minutes ago. We have engaged in the last quarter with the top real small town will make you and have a few others in our pipeline disengagement reflect a deconsolidation in the cellular basement Supply landscape a large audience are looking to internalize SOC design that incorporate basement process of to gain cost-saving and differentiation.
discuss
Remove I'll tell him to us to take advantage of our board portfolio of the ESPN platform.
The second is y 5 6 Wi-Fi upgrade cycle represent a substantial opportunity due to the first qualification of connected. Are you two devices? So small home appliances such a small TV smart speaker connected lightbulbs thermostats and we'll be home. I was always 8 to 11:50 is at the Forefront of this upgrade and use as as the reference vehicle for gas station by the Wi-Fi Alliance.
There's no been half a dozen licenses the designing Wi-Fi six border and no power IP available for all different segments in the space Thursday. We are well positioned to capitalize on the upgrade cycle to Wi-Fi 6 to further expand our footprint.
The sales feeling is conceptually Wellness contextual awareness. We fail to the ability of iot device to collect and process data from each surrounding off and the. It's operation to the context today iot devices incorporate different classes of sensors such as camera measurement need microphone time of lights nsel's and read off the date the kitchen from Central can then refused to extract device, such as a community type enhance proximity location and handful of other experiences.
Well features are quickly becoming a key differentiators 4 a.m. And smartphones PC. We're here and see what other devices is in a unique position to be a One-Stop shop for contextual awareness package available for recent organic Island investment invoice in the technology and the acquisition of regular ways and the heaters Labs business.
I already to be grossed our our 20 22 bolt of bubbling 2018 were available.
We believe 2019 was a progressive year Tower reaching this goal in terms of new customer development in new skills that took the production while the push out of production Halo by one of our base stations customers and partial switch to a non see the modem supplier. No smoking in the show film. We believe that by 2022 we will reach the customer scale and the silver. Were you in a treatment a line with our loyalty program?
The strong licensing fulfillment and the contribution of filters lab Sensor Fusion OEM business further than false belief in reaching out at Target.
We are closely monitoring and working side-by-side with our customers to deploy our Technologies in their SOC or product and take long to production.
I always be free efficiently utilized out and the expenditure of new technology development and working closely with customers to expedite for the divorce. We are choosing a warranty in their investment prudently and unresponsive to lucrative and strategic opportunities.
Due to the Step Up in licensing revenue and customer engagement including engagement with the top-tier handset player. Thursday will be the expenditure by approximately 6.7 million non gaap versus last year, which will also include a full year of R&B expenditure for our heaters lab team.
Billing summary. I'm very pleased with our achievement in 2019. We will determine and consistent with customer engagement and Innovative development, which resulted in an exceptional growth field in our annual licensing Revenue ahead of the target. We said that our first name is day in January 2019.
I want to solid pass for this momentum to continue into twenty-twenty this strong licensing fulfillment in the Strategic engagement with. Give companies. The foundation for warranty goes Target in 2022.
We will you continue to come up with differentiated solution with an unmatched level of integration like our sense Lincoln platform OCD and then invite the expanded our footprint in AI.
Finally, I would like to take this opportunity to thank all of our employees for their Hardware Innovation and fantastic execution, which is made of service industry name for connectivity and small sensing Technologies for the iot industry and the guy also to extend my thanks to our parts supplier and last but not least. I want the stores for their support. We wish you all a happy and prosperous year.
Is that set another parent to call over again outline the financials and the guidance?
Thank you, beautiful.
A sunburn resume the results of operations for the fourth quarter of 2019.
Revenue for the third quarter was 28.3 million dollars up 32% as compared to twenty one point four million for the same quarter last year, new brake down is as follows I can sing in related Revenue was approximately 14.8 million reflecting 52% of our total revenue thousand percent higher as compared to the fourth quarter of 2018 and up 31% sequential.
Thank you. Revenue was 13 and 1/2 million dollars reflecting 48% of total revenue up 24% from 10.9 million for the same quarter last year and up 11% sequential.
Not handset based and royalty Revenue reached an all-time record high of 4.3 million dollars in the court.
When the gross margin was 90% of gaap basis and 91% on on that basis.
Total operating expenses for the fourth quarter with $22 million a million dollars above the high end of our guidance mainly black include compensation related benefits and commission expenses associated with higher 2019 revenues in some provision for doubtful debts.
607 food and that could be based compensation expenses approximately two point seven million dollars and motivation of the acquired intangible associated with the acquisition of Hillcrest lab and envision business of 0.7 million. We concluded during the quarter the amortisation of the acquired intangible over the airwaves and which we invested in 2014.
Total operating expenses for the fourth quarter excluding these items were eighteen point six million dollars also above the high end of our guidance due to the same reason. I just highlighted
You got that income for the quarter was 3.1 million dollars and diluted earnings per share were fourteen cents.
Compared to net income of 2.3 million and $0.10 for the fourth quarter of 2018.
Non-gaap, net income and EPS for the fourth quarter came up significantly 29% and 30% for six point eight million dollars and thirty cents respectively, but net income and EPS for the fourth quarter of 2018, 5.2 million dollars and $0.23 respectively.
other related data
Shipped units by civil licensee mean during the fourth quarter of 2019 were a record of 360 million units up 3% sequentially in up 45% for the fourth quarter of 2018 reported shipment.
The 360 million units shift 106 96000200 or 54% were for handset may have been shipped reflecting a sequential increase of 16% from $169 million has been ship during the third quarter of two thousand and four of nineteen and a 45% increase from $134 million units shipped a year ago.
I'm not handsome than shipments reached a new all-time record high of a hundred and sixty four million units up 33% off early and 44% on a year-over-year basis.
That's for the year.
total shipments increased 12% year-over-year to over a billion units
up 5% from 2018 which equivalent to approximately 3,300 Seva power devices sold, June 2nd in 2019.
Annual shipment of ham sex increased by 3% year-over-year due to strong second-half with the unit up 21% year-over-year for that.
Not handset based on royalty revenues continue to grow and reached an all-time record of 13 million dollars up from 8.5 million + 2000 + 18 + 8.1 million + 2000 + 17 in terms of units non handset based in unit shipments were up 25% year-over-year to a record 469 million units.
Yes.
for the balance sheet items
As of December 31st 2019 Steve has cash and cash equivalents balances marketable Securities Bank deposits were a hundred and fifty million dollars a month. You continue directive buyback plan. We purchased approximately 161000 shares during the quarter for approximately four point three million dollars over June 2019. We repurchased approximately 355000 shares for about nine point 1 million dollars off in full utilize the share authorized by resources plan from a 2018.
Earlier this week or board of directors approved a new expansion to the buyback plan by total of 700000 shares of common stock available for real purchase.
Best or adjusted to ASC 606 bso's for the fourth quarter continues to be low as Thirty Days thirty six days during the fourth quarter. We generated eight point three million dollars of net cash from operations depreciation and amortisation for 1.8 million dollars and purchase a fixed assets was 0.8 milk.
The end of the year or head count was 382 people of which 313 were engineers up from a total of 341 people that handle 2018.
Thanks for the guidance.
Describe a strong and Broad IP portfolio highly correlates with the needs of the semiconductor companies and OEM looking to expand into iot and 5G.
2019 we set a new record high in licensing of approximately $48 million dollars two years ahead of the target. We set that are cameras in January a year ago.
Licensing Revenue tends to be lumpy. We believe this momentum continues into twenty-twenty and we expect another step up in Lafayette Avenue in the range of 2 to 4 million dollars.
royalties
We're expecting the annual growth in the range of 10 to 14% The approximately $44 million dollars for the for the month.
projections take into consideration and lower share at the flagship smartphone or a n
However, the lower share will be more than sufficiently offset new production Ram in growing shipments for non handset basement products, including our Hillcrest lab Sensor Fusion business.
With regards to the recent Corona virus outbreak. We are closely monitoring monitoring developments with our loyalty customers in China, may be temporarily affected.
Our annual guidance assume the return to normal business and catching up on the yearly basis of this destruction that may take place in the first quarter.
Licensing we do not see any issues in are expecting a healthy and solid licensing environment in the first quarter of the year.
Cost of goods we expect higher non-gaap expenses of approximately one for one point four million dollars.
A full year of Hillcrest Labs onboard in hourly customization work-related expenses from TuneIn on projects that will be allocated from our own custom books.
Knoppix with our strong licensing execution in 2019 in even stronger expectations for 2020. We will continue to support new customer and reinforce our leadership with discipline investments in R&D.
Lucas Labs will also contribute to share to the 2020 Olympics on a full year basis.
Overall, our non-gaap topics increase will be family seven point 1 million dollars.
Equity-based compensation expensive or forecasted to be about a million dollars higher than 2019 and just shy of twelve million dollars.
Annual gross margin forecasted to be in the region of 88 to 90% interest income is forecasted to be slightly lower than June 2019 0.75 million dollars per quart.
axel
Expected to be approximately million dollars and that Basin and 15% of pretax income on non-gaap basis bank account for 20 spected to be in the range of 23 to 23 and 1/2 million shares.
Specifically for the first quarter of 2020 gross margin expected to be approximately 88% on that basis and 89% a non-gaap basis with any great dated zero point two million of equity-based compensation expenses and 0.1 million of amortization of other assets associated with the human vision.
I'll fix for the first and second quarter of 2020 should be quite flat.
And higher than the first the third quarter due to the timing of R&D Grand Cayman and is expected to be in the range of 21.4 twenty two point four million dollars.
The total operating for the first quarter two point six million is anticipated to be a tribute to those equity-based compensation and 0.7 million to the off position of inquired intangible. Non-gaap topics is expected to be in the range of 18.1 to 19.1 month. Also quite similar to the second and fourth quarters of the year.
Net income interest income is expected to be approximately 0.75 million dollars for the quarter taxes for the 4th for the first quarter is 0.2 million volts and non-gaap basis for the first score approximately $23 million shares.
A rocker with that you could open the Q&A session. Thank you.
Thank you, sir. We will now begin the question-and-answer session to ask a question. You may press star one on your touchtone phone. If you're using the speaker phone. We asked you please pick up your handset before pressing the keys off to enjoy your question, please press star them to at this time. We will pause for just a moment to assemble our roster.
And today's first question comes from Mike quickly. Canaccord. Genuity, please go ahead. Hi, this is Anthony. I'm from Mike. Thanks for taking a question and congrats and strong results and the new deals signed off with the 21 New Deal is including the large strategic agreement with your handset OEM any color you can provide on those physically on the size of the large license agreement and then make sense for them to think about the timing of these new deals ramping this year and towards your royalty outlook for 2022.
Sure. So usually we don't break down the the size of the deals they in our business. We have the two flavors of Licensing deal that could be for single-use. We call it one used on a trip for a specific product and a specific market and a multi-use which covers the same type of Technology package, but for a wider use these wider bigger deals usually are turn-based and so it could be 3 or 5 years and then you have no limitation of the number of views that you are allowed to use our technology in a single use the customer comes back every 6 2 months to a year or a year and a half and he wants to design its texture these bills tend to be smaller in size and the bigger deals are the the time-based which are in the millions of dollars off.
Her deal here. We have a combination every year we have you.
These larger deals or sometimes we have review as it could be 1 2 3 deals like that in here depends. So for sure we'll have we had one larger than the score and then many other half of the deals are newcomers using siebel for the first time ever some I didn't answer your question specifically on on that specific phone number, of course, but the overall we had larger deals and some other deals in in the corps and they're all different to what's interesting is that you will expand upon business model. If you remember we talked about the Hillcrest labs and having different flavor of royalties and deals to stiva. We signed 3 a.m. For the first time using our a Sensor Fusion technology. These deals tend to have less or no upfront license fee, but because we're dealing with all hands and not chip vendors birth.
Shapes deal that we close in the October now already in production in the beginning of this year. So within a few months years ago Thursday, we could see Revenue coming from within a very very quick Roi for this type of technology. So that also helps us with our dining for 12/20. And what was the basis?
Got a great thank you. And then you know with Nokia showing some progress on this reef shark execution and you believed mentioning working closer with them on the development. How is that changed if anything your expectations or or the clarity of the timing of you know, they they will ramp this year and into Twenty One.
So we need to program. I mean we are we are following then you are probably in the soonest. They have the Silicon part of their business office open in mass production. We should be enjoying that we have another customer that is using us that means in production with forging ramping up now, it's 5G solution and we are waiting another one to be more hopefully more aggressive this year probably to the Earth the later part as much as we know but we also get our inputs from birth publicly from their announcements and follow follow their development. They they have a lot of very interesting design wins, and we are waiting to see the roles the reports come in.
Got a great. Thanks again.
Thank you. And the next question today comes from Tavi rosener Barclays, please go ahead.
Hi, this is Peter zewski. Alpha Tavia. Congratulations on the quarter. I just wanted to to ask why Hillcrest and in revision taking those two together are royalties in the back half of the Year still tracking at at at what you had previously expected and then has there been any licensing contribution from those two businesses and then also took a follow-up if you could maybe provide an update on some of the traction you had last quarter in the automotive space.
Okay, let me take first of all, the the Sensor Fusion the heater slot competition. You need just cancel before the distinction between behaviors business, which is GM Sentra cleaning the dressing to the end of life and the fever other business, which is harder that goes to semiconductor. So the impact usual impact of of the sense of humor business is in the warranty and less on the licensing. So when we said we license agreements in the first quarter, that's very good news page in terms of the Sensor Fusion business striking according to our expectation and to some extent a bit better off.
this group of filters Club Divas, very good at
Access to companies in the vacuum cleaner, which is a very fast-growing Market in PC. In. In fact, she is remote and the many other segments that we will not expose is with our DSP slash other platform connectivity platform. So the integration with our cell phones going smoothly and and we are happy very happy you mentioned in the original vision is investment. That would be the very small companies. We are engaging this customer, but these are early days in this one. Now. You said you had another question which I forgot if you can remind me.
Oh, it was just on on on the traction that you saw last quarter in the automotive space if if if you give us an update on that on that industry.
Yeah, I'm really happy of traction. The automotive space can't faster than I anticipated because this is you know, very nice high entry barrier market and and and with lots of conservatism but we we are engaged with very loud OEM in automotive technology and ask what we talked about one of the largest semiconductor player. They're also took it looks like technology usually this bills are extremely comprehensive and and you know a friend clock speed been consumer. I if you if I try to understand I understand your question. I think that by 2020. Yep.
twenty-three we will
Is the you know our product in in class?
Okay. Thank you for the color.
I don't know. Our next question comes from Matt Ramsey Ramsey Helens, please go ahead.
Thank you very much. Good morning, guys, I guess a lot of different questions around the the guidance but I think long-term getting I was interested that you called out Wi-Fi 6 says sort of one of the big pillars of longer-term growth for the company. I'm sure you guys saw that recently the guys that broadcom team their their smartphone Wi-Fi business is non-core to the company and it's interesting that that's a place where it seems like you guys are leaning in Gideon. Maybe you could step back and talk about your Wi-Fi business and particularly Wi-Fi six the the traction of Licensing the breadth of it who potentially the partners are and and give a little bit of update as to how big of a piece of the royalty growth over the next three or four years that could potentially be. Thank you.
Yeah, Wi-Fi fixes Valley new cycle.
And Wi-Fi life on five which is to be called 800 11ac our Focus intervention. I'm not paying the smartphone I think in the smart phone. It's pretty Consolidated. I mean if we do have a customer asking us about it, but I will place in the iot and I do think it's a big collection and I mentioned in my prepared remarks and the small homes, although smoke speak a bit by itself. It's been 100 million units so far and going fast on small TV going to adopt the dates because there is a clear plan of going home and things that are going into the kitchen appliances birth.
We are seeing also people are taking our Wi-Fi 6.
And modifying it lower late wants to modify and for low-latency for a so we see also the the area of angle which in my opinion will be coming to our Wi-Fi since we're now six days. The fifth customer that are working in those markets pipeline is a customer that wants to do it and we win the Wi-Fi fix have different product than we have for the very low betrayed along side the feet and up to access point where you know, you you start speaking about residential Gateway Enterprise Gateway is eight by eight and stuff like that. So that's that's that's a it's a million units opportunity for us.
Got it. Thanks for the call of their understood on the coyote Focus as my follow-up. I wanted to ask I mean, obviously there's the fluid and unfortunate situation with the coronavirus near-term. I think we're all trying to to sort of understand impacts to companies but I noticed in your fourth-quarter results the non smartphone business for royalty units was up significantly. I know there's been some fits and starts over the last two or three years with spreadtrum and and tsinghua Thursday and losing share and on their roadmap. If you guys could just give us an update as to the 3G and 4G non-smartphone business in China of royalty opportunity in the near-term and what drug that big upside in the fourth quarter and is it something that's sustainable and how should we think about that in the context of the coronavirus situation? Thanks guys.
when it comes to Cellular, let's say
And and devices we don't make you know, officially distinction between a machine let's call it and hence it you mentioned spread rumors of the other play and we see the progress and we believe the dead will make a progress continues to make the borders. They they lost the key customer but there are many jobs Their audience in in China targeting India and other areas and we see the volume up. So what I asked me what we expect in DC about in the handset space so for this will be substantial and I will take going birth.
and
And it would be for the coming year and then 5G will get our shot problem is advancing disrespect and the sign the deal now, he's that will materialize sometime so we will be in 5G as well.
Give you more color. You know, if you forward this is maybe free virus. This is one of the strongest seasonal quarters. We have both enhanced it and in the consumer stuff, but this is coming from very strong Sensor Fusion. This is coming from very strong Vision Bluetooth pay a royalty. So we really dead. It's a strong for for us and all the different markets worked out well for us that you for I still don't think that that piece is associated with the virus. He was dead and many companies including us will probably see both the typical seasonality of post-christmas post Chinese newer and with with a virus kicking in with the people working from home and not a full utilization. So that's where you see more with that said or licensing because it's not coming only from China is still looking very healthy on the
worldwide basis
got it. Thanks very much guys.
And our next question today comes from Susie the silver of Roth Capital, please go ahead I get any congratulations on the strong results here and the tier one as well. Yeah baseball in in that along those lines the smartphones the remaining tier-one oems. What's the trend here in terms of their own baseband versus Merchant and when a guy like the one you just one ramps up their own basement what kind of In-House vs. Merchant baseband shall we respect half half or is there a different strategy and dynamic playing here?
You know in terms of the same house, but we speak with companies the big one eventually and they see what other people are doing and how they benefit from there. And there is you know, the the old one month is that it's a complex stuff and you need to do substantial investment, but it does give you the advantages of a controlling especially when it comes to 5G that you can come out with all sorts of different flavors of it.
Okay, so more control of the pipeline there. Okay, great. And then for the royalty guidance more generally in 20 the growth guidance you have what are the drivers of visibility you how much of it is? Is it how much is it to Hillcrest layering on versus other segments and what kind of mix of space ban on base plan? Would you expect exiting to one you just understand how the to ramp?
Yeah, so on the handset side, we we have seen over the last couple of years. There are many moving Parts hard to control sometimes over again change vendors along the way sometimes different segments high-end low-end is is the key driver of the industry, but overall the replacement cycle is a bit longer and the market is more mature it has so we're not with the one of the bigger audience changing vendors and 5G. We're not founded for growth in our Hansard basement for this year. It may go up a few years from different aspects, but for twenty twenty years where we seen the last couple of years the gradual decline, but control of of of that market the positive side, which we have seen over the last couple of years.
started off from 1
16 I believe Seventeen when our first nine Hansard basement became more significant. We started at the time with 10% $4,000 I recall and then went to up to up to eight and doubled it and this year another 50% gross 213. I envisioned us exiting twenty-twenty with North twenty million dollars coming from non Hanson basement. So this this is one of the key drivers we talked about a year ago around this day. This is the hour the way the double the 2018 rolls the level that he didn't mention our prepared remarks and this coming from a lot of these in your Market very mind. And we were asked about this later that we still don't have all the customers not in the base station recording plus royalties not in Bluetooth 20 deals that we signed just last year. These guys need to get into production Hillcrest is just for Thursday.
Stein contribute
It was working for a full year or not only for five and half months and you are seeing more and more progress in faster than giving said faster than we anticipate coming from that portion. So all these are the positive aspects of the roles is growing the 10 to 14% for this year and the more drivers to come but we don't get exactly the timing and the magnitude of all these are the deals very helpful colors. Thank you guys.
Thanks to the next question comes from David O'Connor p.m. BNP. Paribus, please go ahead.
Great. Good morning, Jen. Thanks for taking my question. Maybe firstly Justin follow up on the last question. What's the expectation for the kind of the royalty waiting H1 H2 in twenty-twenty. That's my first question a couple of things.
Yeah, good. Good question. Thanks for asking. I don't think we gave too much color about that yet. But if you look at the last two years see the we had a relatively low first half-season otherwise both on the handset side and then the consumer that that's typical is the second half is stronger this year for the firm. Although we have the Corona virus hitting stronger and key why nobody gets know the effects of the second quarter with that said we belong that you have a positive year-over-year comparison on Top Line in royalties and in-licensing by the way as well and bottom line is so we are starting the day with a positive momentum with some concerns macro concerns mainly around the virus and the second half of the year. We will see well.
What what new products like we saw in this second half suspicion?
In the fourth quarter what other customers get into production what what magnitude a little bit more moving pieces than overall still rules both investing and royalties for the David. Let me just add this last thing we came out with 5% year-over-year growth in reality. We feel forecast 10 to 14% off double then it was last year and they say still result not all the ceiling the firing like we mentioned base stations by YG base stations and all those bills that you signed last year and the extremely too gradual get into production. So what what we like about 20 20 our forecast is there is this month
They shouldn't and more resiliency to to to specific customer or specific segment.
Great, that's helpful. Thank you. And then maybe as my follow-up mentioned release a licensed or based on processing for 5G base station. Just wondering is this one of your existing base station customers renewing your license or taking some different IP to get some details on that would be very helpful. Thanks guys.
David say that again your voice is not that good. And could I send off base station? That's the question. Yeah. The question was around that you mentioned in the release 5G base station, one of the licenses there. Just wondering is that the existing base customers renewing maybe their existing licenses or just you can give some color around that bad. Thanks.
About the PlayStation customer you mean? Yeah, so, you know where I would say two very active customers one of them production in Mt. This is a china-based. The other one is from Europe pretty open about the status and we are dead following what they they are saying we do have other base stations customer data, I would consider them too and I am in the market.
Customer, you know totally can go up to 30% of the market.
Specifically about the deal that you mentioned that you are asking about you for the new customer maybe a second-tier is given said but you customer that has never worked receive an offer any of ITS Technologies.
Got it. That's very helpful. Thanks guys.
Thank you. And our next question comes from dust in Northland ahead.
Yes, congratulations on the corner and the Outlook and thank you for taking my questions. Is there a geographic breakdown to the licensing in the current quarter?
Yeah, we usually give it. Let me see.
The first service for a second and yeah, yeah here we have 10 deals were in China five in the US very strong for our us team in Europe for a pack including Japan. So pretty nice spread over all over the world.
And then in terms of this strategic deal with the large handset OEM, when would you expect that result in royalty? Is that a 2021 or 2022? Do you have any sense as to how long that will take to get into production?
You know, I wish I could buy the crystal ball. And this one where we have seen different different examples that sometimes things take longer than you anticipate. It's a complex technology the complex Market. I would probably say few years. Hopefully not fine, but but probably three years is a very reasonable.
Got it. That's all right. That's very helpful. Thank you.
If we could do anything to expedite this is part of the R&D investment that we are continuing to invest over the years and we are trying to help our customers do it faster, but it's never wrong.
It's never that simple.
in some of these bit more difficult markets
This is your question and answer session. I'd like to turn the conference back over to Richard Kingston for any final remarks.
Thank you, Rocco, and thank you all for joining us today and for your continued interest in and support of Siva as a reminder. The prepared remarks for this conference called are filed as an exhibit down the current report on form 8-k an accessible through the investor section of our website with regards to upcoming events. We will be attending these include the Susquehanna technology conference on March 12th in New York and the Roth annual conference March 15th through 17 in Orange County, California. Please visit the investors section of our website for further information on both events and other events. We will be attending. Thank you and goodbye.
Thank you, sir. Today's conference has now concluded. We thank you all for attending today's presentation. You may not have met your lines and have a wonderful day.