Q1 2020 Earnings Call

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First quarter 2020 earnings call.

This time or something today's audience simply shortly we appreciate your patience.

[music].

Good day and welcome to the interstitial Inc. first quarter 2020 earnings call.

Today's conference is being recorded.

This time.

Thank you Mr. Patrick.

Please go ahead Sir.

Thanks, very much and thanks everybody.

Good morning, and broken through June 1st quarter, 2020 earnings Conference call.

We just wanted your build miracle, president and CEO cartridge divorce.

Now lets gretzky our CFO.

Consistent with last quarter's call walk for some highlights about [laughter] questions.

Before we begin our remarks I must remind you that in this call will make forward looking statements regarding their current beliefs plans and expectations.

Which are not guarantees of future [laughter] are subject to risks and uncertainties that could cause actual results could differ from such.

Differ materially from results that's contemplated by such forward looking statements.

These risks and uncertainties, we keep those set forth Murray's movies and I need to go and form 10-K for the year ended December 31st 20 Monkey and from time to time another filings with the Securities Exchange Commission.

These forward looking statements are made only as is the big your own except as required by law, we undertake no obligation to update or revise any.

Well there was a real as a result of new information future events or otherwise.

In addition, today's presentation may contain references to non-GAAP financial measures reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our fourth quarter 29 key financial metrics tracker, which can be accessed on our we paid digital dot com.

Clicking on the link on the what somebody who pays itself financial metrics truckers to Q1 point.

Finally as coal.

Good for any reason there are issues around Endovascular decision, we make sure we returned.

With that taken terrible to hold the mill.

Thanks, Patrick and good morning, everyone. Thank you for joining us on the call. This morning I. Appreciate it's a crazy time, I hope you understand as well and find your way through this difficult period.

Well I spoke I talked about how 22009 chambers represented the culmination of these long and productive strategic journey for the company when that landed a nice exciting new strategic position with a single powerful long term R&D engine, and you really strong and growing mobile device legacy business and new consumer electronics like isn't it.

And also driving additional licensing opportunities I see and infrastructure.

It could be excited at the back into keeping all of that why the business exact revenue potential beyond 700 million, while keeping our cost of 2017, though the cost level before we begin mr.

Great and incredible operating leverage for us at all added revenue with rocket a bottom line that impacted in some cases, a modest level revenue sharing.

Well with everywhere, but all that done 2020 represent an opportunity could execute and deliver that amazing values of shareholder and that's what we're good [laughter] started the year completing some smaller deals around on mobile business and I'll leave you did you also secure enough market information negotiating history on the C., so hard to put 'em work around revenue.

But that is 150 million in three to five years.

We don't unsecured our strong license renewal wildly lastly, managing to navigate the choppy waters of the trade war kovac races, and that particular challenges facing wallet.

The deals all the open publication of our royalty rates, which we posted on our website as part of the transparency, but.

We started with those rates and then what our typical discounts for factors such as term volumes, especially market consideration.

It also reflected the challenges and while this business I mean, those who've been Nike pandemic and the specific governmental channel.

Let me posted our rates, we expressed a cautious optimism that our effort a transparent that could help on licensing maybe as a new level of transparency, but he industry.

Reduce discussion around license turn and expedite.

We believe the why we feel supports that initial opposition.

While the deal all too.

Is that a minimal amount of litigation steadiness tens of millions dollars as compared to prior agreements with wallet.

Yes, I believe the deal reflected personally what our strategy was intended to do.

Increase the net value of license deals do some combination of Irene lower litigation costs indoor shorter timeframe to get the final deal. It also is the company to focus on additional opportunities driving still more value.

The deal also represented another opportunity for the company has demonstrated their and pragmatic approach to like.

These are not easy times for companies moving along what we found a formula that work at our school to have them onboard again as a licensee is that upon completing this license term why do well have been license for a decade and will join the list.

Disease weapon windows for at least 10 years.

That is currently include Apple fairly sharp and Samsung in particular has been a licensee for almost 25.

The light instability about licensing agency volumes to the continuing strength of our innovation.

Our fair and transparent approach to licensing and the importance of always played and continue to play across multiple generations of standards and video and wireless technology.

Our job now if we continue executing on our plan with those de allow their license. We are focused on our remaining unlicensed company, including well there, though shown by oppo vivo and PCL.

Together these represent approximately one third of the global isn't volume, but many of those sale outside China.

Fine we're confident they will bring us from our current revenue platform of approximately 340 million, who our goal by prudently.

We're also focused on our upcoming more with LG. Additionally, we're diligently at work meeting with our new CD customers looking to drive even further success this year.

When we executed a technical or acquisition, we had to inject one goals one was to drive revenue not described that progress there.

And gold on the expense side and as much will describe later our hard work has resulted in achieving that goal.

So I feel very fine started here and we've done so in what is as we all know a very difficult in Wal Mart.

Luckily our business is relatively immune to the adverse economic effects of the buyer.

Rich will discuss in more detail a revenue is almost entirely based on pricing grid. So we expect only meyer minor readily the quite a bit on the lower smartphone shipments that are expected over the next two years of course.

That's why we're I could point they didn't pack and why we liked as they should that impact was tempered by the fact that longer term and the global volumes are expected to cover over the five year period of India.

The crisis has also raw material impacted the ability of the company to function, you're continuing regular dialogue with our licensees that many Asia has been on locked down for an extended period of time and that become accustomed to working over video and audio conference calls.

We also preemptively tested our remote work environment prior to the crisis, taking the entire company remotes that three days to verify our ability to work effectively and they fully virtually virtual environment. That's when we'd Charlotte so real in the March seeking to protect our workforce and also to prevent the spread to the virus, we were ready to operate in that.

Environment.

Additionally, many of our engineering project already occurred across sites with for example.

Montreal themes collaborating with our rent.

<unk> engineers familiarity with the no collaboration data working to work that will largely fundamental.

To summarize we have committed the company, we set out to create at the beginning of our strategic journey. We've integrated the after successfully and quickly and are now executing on plan. Despite the current great.

With that let me third at a time for more information on licensing in R&D.

Thank you Bill.

It's been a.

Very successful start for the year in both licensing and they know R&D efforts, let me touch and Bell.

Obviously, the headline <unk>, Oh successful renewal with Wal way.

The fact that the deal was able to get done despite trade issues travel restrictions in public 19 speaks volumes to the strength of all portfolio and ideally again licensing efforts, but also highlights well waste willingness to license.

We feel that with a publication of all their rates and I'll transparency around portfolio and licensing practices as well as how standing ofarrell arbitration to result differences, we offer a perfect counterparty to a company that is willing to take a license.

Hopefully by the Chinese companies, they recognize that unfold the leader Wally and ZP in concluding agreements.

The renewal, who all way it's now the six license agreement that they've been able to conclude in the past six months.

They often spoken to spoken about commitment deliver on our revenue goals and we are diligently doing that.

On wireless side dose be goes have included major brands like VP go away and global peace all important companies and the licensees helped to grow their revenue.

Also showed us the validation of all important contributions from the leading technology.

Unfortunately, it doesn't mean, it's right electronic side.

We did they just like all go goal was to proceed with smaller agreements that will serve to validate called rates before moving to a larger negotiations and that's what we're doing.

So I'm pleased to say, we're executing on all fronts.

On the research and development side I can say that while compete 19, that's had a limited effort smell teams SPL described the health crisis, Nonetheless slow the environment in which we operate.

The international travel to standards meetings, it's obviously multiday.

Standards meetings are taking place in <unk> by conference call painstaking process.

That slowdown is not all that in fact typically the companies that want to spend its development to proceed at a great Nick pace.

Those big almost only limited resources.

And many of our colleagues extenders had been advocating a slowdown, especially after the accident rate where did deliver if this would be something like GE.

Some of our video technology development work involves a logic studio style set ups. So we refocused other Dave alone other development work that doesn't require that capability.

So there has been summit impact not old negative, but largely I'll work he is able to competing very effectively.

I appreciate some of the video work, we're doing it's very due to some of our investors. So weve posted links to some excellent feature articles produced by leading video technology trade media on our website homepage.

All right you have to read them they get strike all groundbreaking work digital doubles augment deed and diminished reality digital technology science and other areas.

So to summarize we've been through a period of tremendous progress on licensing side.

And remain focused on continued to execute execution, there and I'll research activities flat slightly effect created by the four novartis issue on nonetheless progressing well.

I will turn out that the rich.

Thanks, Scott I'll start today by reviewing our first quarter 2020 results, then I'll discuss our high level expectations for Q2.

Our first quarter results were very strong, especially in the context of the current macro I couldn't economic environment.

Revenue came in above our expectations at 76.2 million and we benefited from two new agreements, we signed during the quarter, which included just under $1 million a pass sales.

Our operating expenses came in at 71.5 billion, which was inline with our previously communicated expectations.

However, it is worth noting that these expenses included nearly $3 million of onetime costs associated with our efforts to bring expenses in line with 2017 as I've described described on prior calls.

Excluding these one time costs, we have now deliver two consecutive quarters with an ongoing economic cost of running the business at or below that 2017 target.

We take a lot of well I'm, having trouble, especially with a much larger patent portfolio.

Much stronger research team.

That being said, we know how important ongoing cost control is to our company and the maximizing our operating leverage.

Well, we've kept that Paul.

Let me emphasize that we continued to be committed to carefully managing expenses.

[noise] litigation costs, which are excluded from that 2017 metric, we're roughly $5 million in the quarter.

This result was impacted as expected by a slower ramp up and outstanding matters due to the coded 19 been done.

Our Q1 results also included a one time non operating gain of about five and a half million dollars to write up the value of a long term investment.

In early Q2, we sold nearly half about investment as part of around the financing and the increase value reflects the valuation from that Phil.

Reported a $1.8 million tax provision on just $200000 a pretax book income as our interim rate continues to be distorted by foreign state and Tom impacts that are generally small and semi fixed but magnified in periods of breakeven earnings.

Well I only it's important to note that our first quarter results do not include any benefit from a recently announced license renewal would walk away, which was side after March 31st.

Looking forward to Q2.

We expect that our recently completed renewal with while away.

Buying with contributions from other fixed priced agreements will help drive another strong quarter even.

Even as global shipments of smartphones are expected to decline substantially.

Fortunately, our fixed price agreements make up more than 90%, although revenue and includes a substantially all of our key licensees, including Apple Samsung and now wallet.

Under such 60 agreements our revenue is not sensitive to our customers underlying volume of shipments.

This is a great benefit to us during periods of uncertainty.

Just the economic fallout from the go to 19 pandemic.

Having said that we give us what Susan we do expect declines in shipments from our per unit base of customers.

That should lead to a sequential decline in the variable portion of our revenue, which contributes roughly between five and 10% of or overall revenue.

All in.

Including both anticipated declines in variable per unit revenue and our preliminary accounting estimates for the while we agreement.

We currently expect Q2 revenue to be in the range of between 97 million to $105 million, including 82 to 86 million of recurring revenue.

Putting aside any Q2 specific impacts to our variable revenue, we now see our revenue platform at about $340 million and we maintain our goal of increasing our recurring revenue platform to $500 million from wireless licensing.

Just another $150 million from RC business with additional contributions from Biogen infrastructure coming in over time.

Well provide updated revenue and expense guidance for Q2, a bit later in the quarter.

Well, let me speak to a couple of the applications of the law way agreements on operating expense.

First in connection with Wally license, we walk away agreed to dismiss the litigation between us.

This will favorably impact litigation expense going forward.

Which we would have otherwise expected to increase over the balance of the year.

Second we expect to report a charge of roughly $2 million in the second quarter related to an increase in performance based.

Or issues that will vest under long term compensation plans.

I'll now turn it back over to Patrick.

Thanks, very much richer tariffs, if we could open one for questions.

Thank you.

A question please take note.

On your telephone keypad.

If you're using a speaker. Please make sure your mute function is turned off.

Sure.

Again.

One to ask a question.

Well take your first question from Eric.

[laughter].

Good morning, I guess.

First question, probably the last comment round.

Sure we couldn't against other currencies obviously.

I would agree and they would.

Gave away, but whether there's just doesn't improve expecting it to increase going forward that danger that caught up with no after with walk away.

Oh, that's on litigation expense for this year should be lower than the ones here.

Yeah, So Eric what I'd say is we certainly are expected to increase as you're running one having said that.

Prior to the resolution would walk away, having said that Q1 as I noted came in a little bit lower than we might have expected earlier under your and that was because of a slowness in the water cases with that with the pandemic. So there's been some activity with Lenovo.

You know not.

Ready to say exactly where litigation is going to come out in Q2, but it's not necessarily going to go down just yet it's just not going to increase at the rate that we might have otherwise expected.

Okay well.

On them on the level of isn't an ATM.

So that's why we typically.

But any any major change and timing right now because of the till they tend to Nick.

Could you frame.

HM.

Public filings.

I mean, you know what we're going to give you little more with what was under dispute with Wawa and then how their toward different.

Yeah, So oh.

Core generally are.

Trying to move forward Ah I do think that things have slowed down a bit, but we have schedules and so far we.

You have dates and the counters and we think that this calendar days will be Oh.

I guess it so that's that's good yeah the in terms of no.

How do we had the Lenovo litigation look versus a wobbling litigation [laughter]. So in terms of you know the rate setting that we'd ask for in.

In the UK. So that was the first bio case, Oh, yes, well worldwide right. So that there was a good position to be the first two have filed the case because that's an important factor in.

Generally what.

What's decides to do a different then why way where they had first filed in Shenzhen and then we second filed in the UK.

I think the other important back to the having walkaway does gives us another very important benchmark to bring into the a window the litigation in terms of demonstrating.

You know that the rates that we have warfare reasonable nondiscriminatory, what those with a big piece I think that that's a great piece of evidence.

So does that in that case, so a you know and third.

You know when you find a lot of funds that are litigated.

And they will ride the coattail somebody else's, though it can reduce their cost because as an example, the other company baby the one bearing the cost of patman validations are bearing the cost of other thing what why now.

Uh Huh, let's idle license agreement with Us and now both boys I agreed to settle litigation So litigation.

Well no now is going to wants to do the same things that wasn't doing it now starts to bear the cost of all of those activities, which yeah.

Certainly get.

Included in the calculus I believe on their side and so do you know when when should add to it go licensing when they should finish lots. So oh I think at this point, we're very comfortable with ER with the position of litigation, but we've had been I think it even stronger now with the Wally Goodbye.

Okay and then.

Question on the on the TV licensing maybe take a car T.

No, we don't care about $150 million.

By your goal or for whatever reason to that.

As announced Youre going to you know framing deals around pricing what does the path from here to that one that you look like what are the major hurdles are getting.

Major deals signed isn't like getting use pricing deal, but smaller couple because at the framework you know how important do that on becoming bigger deals or is there with the bigger guys going to say.

Yeah, we kinda it'll get older smaller guys thing there were definitely.

Yeah, Yeah, I'll, let you answer that.

So.

I think they're smaller ones are very important in terms of a especially when we get to not just one but it kind of them because a number of them together. So they actually very fight of value Oh, well for years and they do they anyway I think many important benchmark also in those negotiations with a larger players like.

Whatever it might be Samsung work or so.

And.

That being said and.

So so and he made no standard essential patents I'd say, that's you know that based on our what kind of.

All of what they are want to see side, we do have a known and unknown is CPC globally, that's well and.

But but it could be.

Oh or weeks or so so the offering it's the same two to whatever that licensees.

And then we're very comfortable with that what we have now proven already so far in the marketplace.

[laughter].

Great and then [noise] last question for me kind of looking at the.

Yeah.

Yeah.

$80 million.

The revenue platform you laid out in the most recent presentation kind of I really kind of kick off that relative to.

Well recognized last year.

Entirely new deals that have been signed since then and it should we assume that somewhat of a fairly.

Linear quarterly progression throughout the year.

Yes, Eric.

I mentioned in my prepared comments that.

We're looking at I think $80 million to $86 million recurring revenue in Q2. So you know threeforty would be like an 85 million dollar a quarterly run rate so.

It reflects basically everything that that's happened since you know 2019.

And that includes new agreements as well as you know any any licenses that you know termed out the in 19.

And of course.

The variable impact once you do a is included into Q2 range.

Well I think that's helpful.

Your next question from Charlie Anderson.

Yeah. Thanks for taking my question Big Congrats on getting along we deal done.

I wanted to start with.

Speaking of the Wally.

And then you mentioned your confidence level in that next year of licensees. They don't have under contract today I.

I wonder to what degree <unk> sample how some of those me look was there anything that you deal with unique about law way relative to licensing that next year just trying to.

I understand expectations.

When you do.

That's true, but next year licensees.

Yeah.

Sure So no.

It is kind of walk walk your way through our rate. She and then think about how the different companies.

Hey.

It into it or how that will operate with respect to.

It's hard to say base rate that that's causing across a couple days.

There's a there's we've always had factors like that volume discounts as though.

That that can differ between a one company or another.

No we've talked about.

Other discounts related to a the regions in which a company.

Hi, good that can be a different different factor and one thing that we expect to walk away with their limited access to Google will sort of.

Yeah, obviously that business has really shrunk back to China to the largest [laughter].

You know otherwise there or you think about.

[noise] forecasting.

Because that is particularly in fixed rate deals you're going to need to create a forecast for a company. So.

With respect to some other companies that I see a common factor across all the companies today is the coded 19.

Impact so.

That kind of depresses the whole market you'd affordable over the next couple of years.

But then there are there particular.

Wow a specific.

Issues around [laughter], the Google mobile services or other issues that are going on that could be me. After that so you kind of need to kind of work your way through all those anything can parents in trap.

The different customers in China, and Yeah, I think he gets started to get a feel for how they would compare.

Hello.

Okay, Great and then I've got a feature rich. Thank you rich will become injury.

But I'm curious somebody.

<unk>.

Probably want to gauge and if I exclude 2 million.

I guess it would be in performance calm.

Some of the one line in factories on Q1.

So taking all those aside how should I do not the trajectory.

But suddenly wise and then it sounded like the unrealized gain.

On the investment in Q1, it looks like I've got to figure out of non-GAAP.

I think about the treatment of the realized gain and its impact on not operating income and you too.

Yeah, so at least from a GAAP perspective, the the gain has been as they recognized right and then the realization of that or you know doesn't hit the piano and you do.

From a opex perspective.

Stage or without being overly precise you know I think about the levels that right. If we go as we would do things.

And get a better beat on Cheechoo, particularly where litigation stands.

No will include some commentary when we provide their revenue guidance as you know typically it's not our practice to provide expense guidance, but we've been doing a little more regularly I'm on the heels or the two separate Technicolor acquisitions things eventually smoothed out you know I I, probably wouldn't feel the need.

We continue to do that.

So so in summary for now I would say, we're kind of in the range that rat you know at the 2 million and a and will provide an update if if we see anything dramatic change either.

Okay Fair enough and then lastly from me I know in the past you had given some commentary as to future expected cash inflows from all of your deals I know, we're probably mid way through that since last time, you know they've been times, we've now, saying why why I wonder if you'd be willing to update us on maybe it's just for this year.

Multiyear period expected future cash inflows. Thank you so much.

Yeah, So a lot probably cannot be today, but we'll certainly look to broaden update at some point, but not too distant future.

Okay. That's it for me thanks, so much.

Hi, Chuck.

Oh.

[laughter] question. Please press star one.

We'll take our next question.

Right.

Hey, good morning, good afternoon, Thanks for taking my questions and congratulations on the while we do.

Hi, Scott he just to get a little more clarity on Technicolor could you give us an idea in terms of what video was in the March quarter and in terms of your expectations are that recurring component of you need to the 86 million in the June quarter. What are you thinking about from a video perspective, I know that's been ramping up a little bit but the help.

Just a little bit in terms of how that fits in and just to clarify it sounds like then 15 to 20 million would be a pass sales are being recognized in the quarter is that a onetime event or is there some sort of recurring element that'll be going on related to a larger past fail deals.

Yeah. So I'll start with the second part of the question then go back to the C E business on the.

On the guidance. The 80 to 86 is the recurring number I'm no showed the delta would be.

You know were related to pass.

And no just leave it at that.

There's a recurring number I mean, we always say don't ignore pass sales, but we really track and measure and emphasize the recurring number right and the platform.

On the GE side or the kids in the neighborhood of 4 million on the quarter there wasn't a little bit of Oh, we have trucks from time to time. So it was a little bit of favorable true up in there. So the the annualized rate is probably a little bit south of that.

All in its not dramatically different from a year ago, despite signs new deals.

No as I noted those deals are smaller, but they're still very important.

So we're very happy to make any progress with new deals and in time, you know the they'll start to add up.

Gotcha. Thank you and then digging a little bit on that target of 700 million in revenue. It seems like there's a 50 million ish type of component related to I O T and infrastructure could you give us a little more color on that is all of the Io keys and related to Avanci is this external to avanci.

And when would you expect to see some of that's starting to feather it.

That's all I'll take that so.

Yeah I think.

The.

I'd say that though.

Rough order of magnitude that $50 million number and I'll give you a couple of reasons why right. So I mean, it on the IR insight, there's still a lot of uncertainty in the Iraqi market in terms of penetration cellular how the various middleware getting the deployed what's the nature that nowhere.

So.

You know until that kind of sorts itself out a little bit yeah, we're not comfortable.

Providing a more.

Specific number around that opportunity, we think it's illegal, but then and that's why I say that 50 million is just kind of oh, placemark or not they sold it for that I'd.

In that would be no things like amounts EUV revenue and things like that was just yeah. That's moving along just fine, but that's still a small component, but rather the number of connected cars made a fairly small.

The infrastructure today, we are we have revenue today on the infrastructure side again it. It's a it's an area that will evolve under five GE is the pace of deployments will will [laughter] than prior Gee that we think that there today.

Nice solid opportunity there and I'd say for all of these opportunities into the value of then there's very little if any cost the carrying the opportunity. So I know we're currently looking at the how we may go about the the infrastructure market. It's a a lot of innovation that we do the terminal replicated bell.

On the infrastructure thought and there's an opportunity to lessen.

It's fairly concentrated market today, but that could change in fiveg, depending upon the Microsoft deployment. So.

Got you go through this year, we'll probably that a little bit more time.

[music].

Building those numbers up little bit better.

And then you know and once we see the market develop a little bit better over there will have a better idea of what you know.

To put out a number that would be so I'd say comparable quality and and in data to what we've done on mobile and what we've done. The those are very much informed by established markets established life Pak Mrs. Negotiating history things that we don't quite have yet on those others.

Gotcha, and lastly, if I could just to dig in a little bit more on some of the parameters around why wait I know without getting too specific but there are lot of moving elements, there where does a strong domestic presence, but their export presence has really been marginalized.

By trade issues by other Dan related issues or inability to use Google play within their devices et cetera. So you see their share declining not clear exactly at what rate, but in terms of extrapolating that and then looking at some of the unsigned.

Chinese OEM, specifically, you know chalmette vivo and Oppo Xiaomi has exports that are at comparable or above lobby levels, even one oppo, probably a little bit less but moving the direction, where they probably quickly pass them from an export standpoint, so when you're you're thinking about both their competitiveness and the opportunity.

For those those vendors should they be similar size or larger type deals as you're starting to think about the annual opportunity with them over next couple of years. Thanks.

Right so.

And as I mentioned, the Charlie I think that the things that you whether that's about all are definitely the factor.

With that.

[music].

Yes, the beauty of actually having a very settle ritchie in a very fairly transparent ritchie.

So I thought you look at things like you know.

Current volume volume forecast regions that have sale price point I'd like to risk in forecast as well because I think that there's a different risk level between for example, an IPO forecast today, a while we forecast right.

It was all those that come into play I did want to talk to you know relative size of the other deals that I think yeah, I think oh, our rates are fairly transparent and how we are handling a fairly fast and I think people kids Ken.

Oh work their way through that you know obviously when we look at the collective group that is a license.

In China, you know.

Opera vivo Chanate Tcl.

Well, no, though that that group, it's five or six companies.

What we're saying is that that group will get us up the platform. So I think you've been kind of looked at that as a marker as well as to what we think you know.

<unk> average size of the deals to be it, but obviously there will be above the average life.

Great. Thank you.

[noise] take your next question.

Yes.

Hi, everyone and congratulations.

Good quarter on getting how we deal done a lot of depression have asked already about the can just give us some color on maybe how to kind of environment that has an impact your discussions with other Chinese Oems.

If at all that's gotta can yeah.

So.

Yes, as kind of noted on on the ability to make it get too will aid deal. The cross the finish line. The current environment has not really kind of impacted on on okay, but any to <unk> to execute.

Yeah, I would say this that it's kind of an interesting and somewhat surprising that that getting meetings done in this environment, where it's all virtual is actually much easier kind of just from a logistics perspective that sitting a meeting for next week or two weeks from now with it with anybody is way easier than.

Agreeing to travel logistics in medium logistics anything else and that's exactly what we are experiencing that and I would kind of <unk>.

Say this way that especially on the technical meetings, where we go through to kind of a technical aspects of our portfolio. It's.

Kind of a signal I would say significantly improve increase to the rate of interactions with all of our customers.

And also on the on the be systems I would say the same same way that it's it's a you know that the frequency of called the interaction space I would say going up rather than the other way around.

Now.

It predicting any deals in the future. He said these are very easy calls going as you look at the history, you know when we rather bake the right field and rushing the into run deals snow, so making a prediction on when you get to deal cross the finish line, that's a hard harder to say by the activity has come out and interactions.

Oh.

Okay. Thank you appreciate that.

And that also on them consumer electronics, Cai you said that.

Oh, sorry about that you're you're pushing would have smaller agreements to validate before moving to the lot merger agreements that you haven't just sort of timeframe for this one youre sort of been approached the larger deals in this segment.

[laughter] again kind of giving you a specific dining on on maybe any any as a larger deals you know they would it be premature again I'd just reiterate what I, just said that and we.

Our strategy in approach has been then we'd rather make the right deal irrespective of whether it's in that you know.

What's next quarter it is by the battle it.

And it takes time that it takes.

That being said, we've given guidance on getting to the 150 I mean.

Three years.

Okay. Thank you appreciate that.

And with all for me.

The other questions at this time Mr., Ben I like to turn it comes back to you for any additional my closing remarks.

Thanks, very much canceling base to everybody for joining us today I was doing time mentioned ticking starts to individual to ensure the safety and security as a company and our concern for safety and security certainly since for industry. So please stay safe, except our best wishes word food can be used you didn't mix to bring some have a good.

[laughter] today's presentation. Thanks for your participation you may now disconnect.

ER.

[music].