Q2 2020 Maxlinear Inc Earnings Call
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A question answer session will follow the formal presentation.
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Now my pleasure to trickle over to Brian would you. Please go ahead.
Thank you operator, good afternoon, everyone and thank you for joining us.
Today's conference call Dick Scott's Max on your second quarter 2020 financial results.
Today's call is being hosted by Dr. Kishore Seendripu C.L.
<unk>, Chief Financial Officer, and she'll corporate strategy officer.
After our prepared comments, we will take questions.
Our comments today includes forward looking statements what didn't meeting of applicable securities laws, including statements relating to our guidance for third quarter 2020 revenue third quarter revenue growth expectations, and our principal target markets GAAP and non-GAAP gross margin GAAP and non-GAAP operating expenses.
Tax expense and effective tax rate and interest and other expense.
In addition, we will make forward looking statements relating to try and opportunities and uncertainties and various product and geographic markets.
Including without limitation statements concerning opportunities arising from our Nox definitive acquisition agreement for Intel's home gateway business growth opportunities for our wireless infrastructure and connectivity market.
And opportunities for improved revenues in our broadband markets. These forward looking statements involve substantial risks and uncertainties, including risks related to our proposed acquisition of <unk> Intel's home gateway business, such as integration and key employee retention risks as well as those are rising more general.
From competition global trade and export restrictions potential supply constraints.
The impact of the code at 19 pandemic.
Our dependence on a limited number of customers average selling price trends and risks that are markets and growth opportunities may not developed as we currently expect and that our assumptions concerning these opportunities may prove incorrect more information on these and other risks as outlined in the risk factor section of our recent FCC filings.
Including our form 10-K for the year ended December 31st 2019, and our second quarter 2020 form 10-Q, which was filed today.
Any forward looking statements are made as of today and Maxlinear has no obligation to update or revise any forward looking statements. The second quarter 2020 earnings release is available and the Investor Relations section of our website at Maxlinear Dot com.
In addition, we report certain historical financial metrics, including that revenues gross margins operating expenses income or loss from operations income taxes, net income or loss and net income or loss per share on both a GAAP and non-GAAP basis, we encourage investors to review the detailed record.
Installation of our GAAP and non-GAAP presentations in the press release available on our website.
We do not provide a reconciliation of non-GAAP guidance for future periods because of the inherent uncertainty associated with our ability.
To project certain future charges, including stock based compensation and its associated tax effects.
Non-GAAP financial measures discussed today do not replace the presentation of Maxlinears GAAP financial results, we're providing this information to enable investors to perform more meaningful comparisons of our operating results in a manner similar to management's analysis of our business.
Lastly, this call is also being webcast a replay will be available on the web site for two weeks and now let me turn the call over to Kishore Seendripu CEO, Mike Fournier.
Thank you Brian and good afternoon, everyone. We are pleased to report Q2 financial results add up our initial guidance.
Q2, 2020 revenue was up 5% sequentially to $65.2 million that strong gross margins of 63.7 bets and operating cash flows of $9.3 million.
In Q2 are connected home business stood at 45% infrastructure at 29% and industrial in Multimarket at 26% of overall revenues.
Our business outlook heading into the second half has greatly improved the tailwinds in our cable data backed up by strong bookings for Q3.
We are benefiting from the demand for greater bandwidth at home transfer May do work from home environment that we believe is an emerging long term trend.
We also saw snap back in demand for high performance analog products building a Q1 low.
Still in Q2, there was some pockets of the is due to go read 19, you know wireless backhaul markets.
Despite the challenges related to go with our geographically diverse steam is successfully executing on critical strategic engineering initiatives and customer milestones in five you wireless optical datacenter and high performance analog markets.
We are excited about it upcoming acquisition of entails home Gateway business, which is expected to close in Q3.
This acquisition more than doubled our time to about $5 billion. It consists of industry, leading DOCSIS and Jeep on fiber and Ethernet broadband access gate vehicles, you technologies and along with the state of the are advised by six key platform solution.
Combined with an ongoing fiveg wireless and optical datacenter infrastructure initiatives, you had ideally positioned to it because all the network bandwidth expansion opportunities and bottlenecks in the cloud as well as into and throughout the home.
Rapidly expanding book from long mandates due to covert 19 are driving bandwidth upgrades, which would strongly benefit to our core connected on business.
As well as our companion Intel connected home Division acquisition.
Turning to solve the other highlights in optical datacenter to continue to support the industry's first 400 gig pamfour deployment.
Giovanni Hyperscale data for the customer.
Examples you dislike delayed we remain encouraged by your customers progress and as mentioned earlier expect to see them anymore in the second half of this year.
Also seeing strong adoption continued progress with tier one customers, but a 100 gig pamfour offering leading to early revenue in this year.
We believe that single Lambda hundred gigabit wondering gigabit BAMKO solutions, but dominant cloud and educate us into deployments over the next several years that'd be I've been put the shouldn't be that early traction.
Turning to Fiveg wireless infrastructure I'm excited to announce that we have started sampling our second generation five you Bartlett's RF transceiver product, we do the industry's first aid by eight Mimo RF transceiver 14 nanometer desimone.
Our fiveg RF transceivers of the highest performance doubled the bandwidth that 400 megahertz and so be it just didn't have an integration and follow consumption, but at this competition.
Yes, mostly aggressively to get our lead customers to market bolstering their confidence in realizing emission five you revenues in 2020 and strong multiyear growth beyond.
Invitaes Ventolin Backhauled transport, we witnessed a slowdown in the first half of the potentially due to Colgate 19 related installation delays.
However, we do expect to pick up starting in Q3.
We continue to see a push towards E band spectrum deployment and channel aggregation features then a very good position to capitalize on these favorable tends to be dark 20, Gigabits per second millimeter VMD, you all modem and our associates.
Expect multiple Oems to launch new products with these features in the second half.
In closing out organic initiatives in Fiveg wireless optical data center performance analog markets, along with the upcoming into elongate the business acquisition really uniquely benefit macrina shareholders. This again, expanding targeted and disciplined market of challenging broadband connectivity and network infrastructure platform application.
Yes.
With that let me turn the call over to visit Steve Litchfield, Our Chief Financial Officer, and Chief Corporate strategy Officer for a review of the Q2 results and our forward guidance.
Thank you for sure.
I'll first review our Q2 2020 results and then further discuss our outlook for Q3 2020.
On revenue of 65.2 million, we saw our connected home business down 10% sequentially materially less than expected with declines in our legacy business, partly offset by the improvement in moca demand.
Cable data was down slightly.
Our infrastructure business grew 15% driven by a strong recovery across our H.P.A. products and an uptick in high speed Internet interconnect domain.
Offset by continued macro weakness in wireless backhaul deployment.
Our industrial and multi market business was up 38% sequentially as demand returned after an unusually weak Q1, owing to the kogut dynamic and related distributor inventory reductions.
GAAP and non-GAAP gross margins for the first quarter were approximately 50.2% and 63.7% of revenue respectively.
This compares to GAAP gross margin guidance of 49.0% to 49.5% and non-GAAP gross margin guidance of 63.5% to 64%.
The delta between GAAP and non-GAAP gross margins in the second quarter reflect primarily the amortization of 8.6 million of purchase intangible assets from previous acquisitions.
Second quarter GAAP operating expenses were approximately 55.5 million, which was slightly above our GAAP guidance of 54.0 to 55.0 million due primarily to higher stock based compensation expense.
GAAP operating expenses included stock based compensation and stock based bonus accruals of 15.2 million combined.
Amortization of purchased intangible assets of 5.5 million and acquisition costs of 2.1 billion.
Non-GAAP operating expenses were 32.6 million, which was up <unk> point 9 million sequentially due primarily to annual merit increases impacting payroll and higher prototype in expenses, partly offset by lower travel expenses.
This was that the low end up and non-GAAP guidance of 32.5 to 33.5 million as a result of continued disciplined expense management.
We have been successfully managing the spend during the transitional period with trailing 12 months non-GAAP opex down 11% year over year.
Moving to the balance sheet and cash flow statement.
Our cash flow generated from operating activities in the second quarter of 2020 was 9.3 million versus 6.6 million generated in the first quarter of 2020.
Our load balance remains at 212 million and our net leverage ratio was 1.7 times.
We remain consistent and our intentions around our uses of cash but priorities on debt Paydown and strategic acquisition.
Our days sales outstanding for the second quarter was approximately 58 days compared to 66 days in the prior quarter.
Our inventory turns were flat at 4.0.
That leads me to our guidance our guidance excludes the acquisition of Intel's home Gateway business. We currently expect revenue in the third quarter of 2020 to be approximately 70 to 76 million.
Up 13.5% sequentially at the midpoint of the guidance range.
We expect connected home revenues to be up RUPS, roughly 20% quarter over quarter with growth driven primarily by cable data.
We are expecting tailwinds for the work from home dynamic as well as new customer program ramps in the second half of the year.
We're working closely with our suppliers to fulfill the increase domain.
We expect infrastructure revenue to be up roughly 10% to 15% primarily driven by the recovery in backhaul demand after two quarters.
We expect our industrial multi market to be flat to up 5%.
We expect third quarter GAAP gross profit margin to be approximately 51.5% to 52.5% of revenue and non-GAAP gross profit margins to be approximately 63.5% to 64.5% of revenue up slightly.
As a reminder, our gross profit margin percentage forecast could vary plus or minus 2%, depending on the product mix and other factors.
Even as we are focused on reducing our run rate spend levels. We continue to fund strategic development programs targeting at delivering strong topline growth in 2020 and beyond with particular focus on infrastructure initiatives and our stated goal of increasing the operating leverage in the business.
We expect Q3 2020, GAAP operating expenses to increase approximately $5 million quarter on quarter to a range of 60 to 61 million driven mainly by acquisition and integration costs.
We expect Q3 2020, non-GAAP operating expenses to be up approximately <unk> point 4 million sequentially to a range of 32.5 to 33.5 million.
We expect gap GAAP tax expense to be approximately zero and our non-GAAP tax rate of 6%.
We expect interest and other expenses in the quarter to be 2.1 million to 2.2 million.
In closing we are pleased to report continued progress on our infrastructure initiatives with expanding design engagements in the datacenter market and expanding adoption of our E band modems, and RF Transceivers and the wireless backhaul market.
And further engineering and customer milestones in our Fiveg massive mimo transceiver platform.
We are encouraged to see a considerable recovery in our high high performance analog offerings as end market dynamics improved from cobot 19 impacts.
The broadband business as expected and seeing a nice recovery in 2020, but the work from home environment is driving an acceleration of this recovery.
We remain focused on maintaining strong profitability and cash flow generation, while continuing to execute on our organic infrastructure investment.
With these existing initiatives, along with the financially and strategically compelling acquisition and the Intel acquisition.
We believe that we're uniquely positioned to deliver strong leverage in our business in 2020 and beyond.
With that I'd like to open up the call for questions operator.
Thank you now became ducking your question answer session, if you'd like to be placed in the question could you. Please press star one under telephone keypad confirmation tone will indicate your line is in the question Q you May press star to if you'd like to remove your question from a Q4 participants using speaker equipment, maybe necessary to pick up or headset before.
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Our first question today is coming from Quinn Bolton from Needham and company. Your line is now live.
Hey, curious Steve congratulations on the nice results and the strong third quarter outlook.
To start with the connected home business up 20% sequentially can you give us a sense is that primarily driven by.
On cable MSO or is it pretty broad based on them and if it is sort of driven by one amis. So do you feel that your share is normalizing that that cable operator.
With the ramp of delays generation products, and then I'm going to follow.
Thank you.
Well our demand is.
Is broad based on the operate aside it's not one particular I missed so we are seeing some tam expansion happening right now with all Dsos.
Finally, North America, and so be it also well position based on the backlog that we agree to start gaining share if the other meso.
So.
We're also seeing in general a very very how the booking for Q3 and beyond so we feel very good that.
So the recovery is in progress right now.
Great and then the second question it sounded like to high speed interconnect business.
Up in the second quarter, but you didnt mention it as a driver of growth in the third quarter was wondering.
You had mentioned that there might have had a slight delay at nearly 400 gig customer can you give us an update there sort of.
And specifically or are you guys through the interoperability testing it that customer or are you still in the interrupt testing phase. Thank you.
So I think that as we look forward to optical datacenter or whatever revenues we are speaking about.
More to give you color or how things are progress a but they're not meaningfully different. It's just been volatile based on sample quantities are beyond we have some revenues in Tia and drivers.
You know that.
Those are the those are the so the buckets in which we have the high speed to connect revenues. So really is speaking you know we've always talked of art.
About.
These major hyperscale datacenter transitioned to 400 gigabit.
If you are still in these are operating phase.
You know when you speak of odd we talk about our module customers and really it's not much in our has its about the qualification process of diapers scale data center.
All these modules vendors.
Our progress being with.
With that there.
Maybe to reach a certain yield and so on so fold and reliability of supply before that can meaningfully take off so at this point in a chip level. We are just to supporting our customers as much as we can but ultimately that they have to be ready, we didnt manufacturing capability.
Understood. Thank you and congrats again guys.
Thank you.
Thank you. My next question today is coming from towards spend number.
People your line is now alive.
Yes, Thank you and did good job turning around here.
First question on connected home.
So that business will be slightly more than 30 million in Q3.
Can you talk a little bit Isle.
Is there still some legacy mix in that 30 million or or is it becoming the minimum is at this point.
Hey, Tory Steve.
So I think.
So the legacy piece is becoming smaller.
No doubt about that in the pickup that we've seen we highlighted that it was really cable data some of the weakness that we saw in Q2 was driven by some of the legacy demand, but it is becoming less and less I mean, one of the legacy areas. I mean, we talked about satellite and thats, becoming a much smaller percentage of the business I mean consistent with our early.
Our remarks that be less than $10 million this year.
Very good then you mentioned.
Second dinner generation two tariff teller right.
Was just hoping maybe you can talk a little bit about what that means for that market perspective.
Because obviously this is going to be in eight by eight part so and maybe also talk about when you expect that.
Product to generate meaningful revenue.
Oh, sorry.
Yeah, I misspoke, you're referring to Fiveg Novartis, yes, we launched the first aid by eight Mimo radio transceiver.
You know the industry from a cost perspective has decided that morning degree issues ease lot entered to reduce the cost of fiveg deployments.
And as Fiveg deployments have delayed a bad you know the industry's focus has shifted to the by eight platform. So suffice it to see that for the most he asked application because a large volume large mimo configurations.
Hey by aid to become the mean mainstay. So we've added we are in the competition to be the to be.
Along three players amongst three players would be sort who will be sampling. This particular chip and you're ahead because someone technology lead.
You must note and the same time for US it was a very very expeditious to execute on his E Bay and solution, giving given that our first generation products with a four by four regarding revenues. We expect the four by four to generate any show revenues toward the end of the year and really a mass revenues.
We are counting on the eight by eight to generate when the platform is fully adapted ramped by the end of the first half of next year sometime in the middle of next year.
Okay.
Just one last one.
Can you just give us an update on the timing of the Intel acquisition you mentioned.
Obviously.
Closing in Q3 that any any update on the timing in any other hurdles that you have to pass at this point.
Hi, Yes story, so not a whole lot to update here. We are as we mentioned in the press release confident they will close in Q3.
No more regulatory approvals, so so comfortable on that front and so just working through the final work council issues and so we hope that we'll be announcing that soon.
Great. Thank you very much.
Thank you next question is coming from Ross Seymore from Deutsche Bank. Your line is that a lot.
Hi, This is Jay for Ross Seymore. Thank you for letting me ask a question.
The industrial and multi market does quite well.
Brian 38% sequentially, So I guess beyond the third quarter or how do you see the.
And that progressing.
Was it some pull enough demand or I guess, how would you characterize.
Yes.
Yeah, Hey G.
So yeah, we did see a nice recovery, we have seen quite a bit of weakness in Q1 of this year.
And so we had already seen bookings picking up.
Early part of the second quarter and.
Demand remained very strong throughout the quarter and continues today. So I'm encouraged by the recovery that we've seen as we look out into Q4 and into 2021, I mean, I'm optimistic that we start to see this kinda back to some normalcy, we definitely saw I mean, what amount you as a real snow.
Back at the beginning of the quarter, but but demand has continued sell through as it's been good and so so like I said, hopefully we'll see some stabilization in this market soon.
Okay. Thanks, and just a housekeeping I guess looks like Capex as well as stock based comp was up.
Sequentially quite a bit so can you talk about how those should trend in.
Third quarter.
Yes, I mean capex is consistent with what we've talked about you know we talked about it being about $10 million a year and really no major developments on that front and stock based comp.
Definitely was up in the quarter a lot of that was driven by some of the performance shares and so I wouldn't I wouldn't expect that level of an increase you know in the future. It was it was down slightly in Q1 definitely saw an increase in Q2, but but shouldn't expect to see that going forward.
Okay. Thank you.
Thank you next question today is coming from Christopher Rolling from Susquehanna. Your line is now live.
Hi, it's David Haverly on behalf of Christopher Rolland. Thank you for taking my question.
I guess on connected home as we think about some of the legacy business in the headwinds dissipating there and I understand from tours question earlier. That's this is not de Minimis. At this point you do have a nice strong kind of tailwind from work from home. How are you thinking about growth in this market onboard is connected home I do believe it's bottomed here into Q and.
Can growth from work from home trends and table offset kind of the legacy headwinds that are that are still how do you.
Hey, David Yes. So it is encouraging I think coming into this year. We were really expect in this business to stabilize and kind of get back to low single digit growth rates in 2021. So work from home I think has definitely accelerated that.
Ken and I think that question to me is.
I mean, how how long does that continue right.
Or how much increased growth that we can see because it doesn't seem like it seems like the economy in general and a lot of the language and many of many companies out there looking for long term solutions with work from home. So I think this good could continue for for some time.
But I think ultimately you know getting back to this kind of low to mid single digit growth rates is what where our expectations would be.
But maybe just said.
I guess, a alleviate some cuts or I mean, the legacy business I don't see that as a headwind at all I mean really have no problems with that I mean this is dominated by the the cable data business as well as connectivity and so so I don't see that as part of my problematic whatsoever.
Understood. Thank you for that and then for my follow up I wanted to ask about Moca the comment in the queue about.
Connected home down year over year, and partially attributed to moca shipments owing to a pause in Iran. I think you called out though it was up quarter over quarter I suppose if theres any incremental color.
On Moca kind of where you stand with your your large customer in the ramp there and are there other customers like the breadth of that product.
Yes, sure sure no moca.
We're actually very excited about moca and not ramp with the large customer.
Going forward, we definitely saw strong growth in 2019 saw that pause, but we had talked about kind of coming into the first half of the year.
Hi, guys are still struggling a little bit with deployments within the work from home environment and so that has created some you know I think short term issues, but I think those are getting resolved and that's why you know we're excited about seeing that pick back up but in the second half of the year.
Thank you.
Thank you next question today is coming from Tim Savageaux from Northland Capital markets. Your line is that a lot.
Hey, good afternoon, and congrats on the results and outlook.
One question mentioned pardon me with an infrastructure pick up in high performance analog.
I think that's the T. a driver stuff that you referenced but.
And with backhaul Guy and I Wonder if you could talk a little more granularly about what sort of applications are driving that.
Pick up and when we reach PA business. That's one question. The other ones did you have any 10% customers in the quarter if so.
Okay.
Yes, so so with regard to the drivers I mean, so yes infrastructure was up.
Quite a bit a lot of that was driven by the H.B.A. recovery right. So we had seen some weakness in the first out or the first quarter.
So a nice improvement there and I think we expect to see that kind of pick up in the second half.
Of the year.
And so I mean as far as giving more granularity I mean, we've talked about I mean, some of the drivers there. The server business for example, a there's other business there like remote radio heads is another one I mean, there's a number of different areas that we sell into infrastructure, but those are probably the two.
Largest.
So I mean, the one customer that we have is Ah commscope and so there's been the largest and continue to be.
Okay. Thanks very much.
Thank you next question today's casing Bill Peterson from JP Morgan Your line is now alive.
Hi, This is Alex.
On behalf of felt Pearson Oh.
Question on the.
Side.
For full year growth outlook cars.
Or.
[noise] mid single digit growth around like Black Knight.
A year.
[music].
<unk>.
I'm, sorry, Alex you're gonna have to ask that you broke up a little bit.
Hi, I'm. So I just had a question on the infrastructure side.
Are you still on track for mid single digit growth around 5% to 9% year over year gross or 2020.
Yes, so so I'm kind of talked about this a little bit I'm, just giving one quarter's worth the guidance I mean coming into Q2, we're expecting to see improvements kind of throughout the rest of the year and I think we continued to be competent then Matt I mean, the one piece there was a little bit.
Front than our expectation was wireless backhaul or was it was weaker than expected in the quarter, but that being said I think the backlog in the visibility that we have there we do expect to see nice upticks in Q3 and Q4.
Got it. Thank you and then on the wired side with a Amazon ramp and the second half of what do you think is like a revenue opportunity there.
So we haven't broken out exactly what that revenue number would be I still think it's relatively small numbers in Q3 in Q4, and then start to see a more material contribution in the first off in 2000 2021, sorry.
Okay got it and then what are your thoughts on cloud spending being sustainable for the second half I know you mentioned that you've seen a slight.
The way, what's your tier one customer on can you just talk about the overall market in terms of cloud spending being strong for the second half.
Yeah.
Alex we're probably not the best positioned to comment on that but I mean, I think with regard we've talked about our slight delay and I think there's a number of reasons or just kind of market environment as a whole, but I would you know this is all incremental revenue to maxlinears. So I don't know that were kind of best position.
And to comment because we really don't have any downsides, because it's all upside and incremental revenue.
To our business.
Okay got it thank you so much.
Thank you. Our next question today is coming from another <unk> from <unk> capital markets. Your line is that a lot.
Hi, Good afternoon, you guys you only appreciate you guys. Thank you my question and congratulations on the South corridor and strong execution.
I have two if I could just starting back out that's connected home.
It sounds like it sounds like you guys don't think the longer term growth rate normalized growth rate.
It's going to Altair, but you did make mention a share gain opportunities along the way and if there was the car you think you can go into those sort of normalized growth rate.
It is normalized growth rates from the strongest share position, meaning you can level up your revenue run rate.
In that that low to mid single digit graduate occurs.
As I have the follow up.
Yeah, no problem well first of all thanks, thanks for joining and ER, but glad to have your onboard here. So yeah. I mean, I think the answer is absolutely right. I mean, we're working hard to shore commented a little bit on the their share gain potential that we have we're we're working diligently to to do that.
I mean, the call today is really focused around the Max linear side not the acquisition, but it is something that just from an <unk> you know there they're being able to add content going forward is a big opportunity as well as share gains. So both of those are a focus for the company and.
You know we think we've got some good potential her do so.
Excellent thanks to that and then just.
Delay that you guys mentioned is that you said on that is that on the Hyperscale cloud sat is that on the telecom side can you Uh huh.
On the Hyperscale side.
Got it.
Okay cool and yes.
Is that.
Earlier money in some of their Mark you made matching up like not my paraphrasing that not to read too much into it or not.
Is that that with regard to the delay or is that it was that a separate.
So we not collapses too.
So I'm not sure, which part you're referring to but I mean with regard to you know the optical business or the Hfive business. We continue to work with the large hyperscale customer and are excited about seeing these early revenues come out in the second half and then you know I expect to see more material.
Contribution next year.
That's awesome okay. Thanks, so much appreciate it.
Alright, thank you.
Thank you I next question as a follow up from tore Svanberg from Stifel. Your line is not a lot.
Yes, Thank you and I apologize for getting my ski resorts mixed up here in the summer and thank you for addressing the the Blackcomb question, but they don't on teller ride.
Will there be a follow up to this product a and I know you show on the path of asked you about the move to said seven nanometer so any any updates there.
So it's already of course, there's a follow up to the you know you know the industry trend right now is that on the 400 gig everybody's going to converge.
On the electric I don't want to get them to technical details here, but on the left to go live to face today. The noise. It's up if you could be a electrical interface basically you get four by hundred optical Ames Orleans of 100 gigabit and then the electrical tidy up eight leans a 50 gigabit the industry's converging towards though.
Four lanes of under gigabit.
And on the optical side and Orleans 100 gigabit on electrical side. That's the convergence point next and that's a next generation chip. That's also going to 400 gigabit Pam four chip, but there's going to be two flavors of bad for the industry volumes up 100 gigabit and other one is going to be 800 gigabit basically eight lanes, though.
Oh, 100 gig uptake lanes and eight leans a 100 gig and electrical lanes. So yes. We are following through on on the next generation Chip and are you know we're working on a finance meter solution notice of anatomy disillusion and ER I think it would be the first 1000 to find out of it is illusion based on what our industry.
And all this tells us because we feel that the the yields on the seven nanometer are they didn't argues that he will be lithography analysis felt that the power and the yield performance and find out I mean, there's going to be some <unk> seven nanometer the timing will be just ripe for fan out emitter and give a lot of interest from the industry to do that.
Okay.
So I am on that.
I never mentioned seven out of it already for that reason.
Got it okay no that's there.
My last question is back to connected home. So you know with this you know work from home trend that you're seeing are you also starting to see new products launched faster from some of your customers I'm thinking about perhaps XP seven from Comcast or you know it.
Could could that potentially be a catalyst been an upgrade cycle for you and if so are you starting to see some of those deployments already.
Yes, good question, Tony you're absolutely right.
You know a they are trying to accelerate that XP seven you know because several versions, but you know XP seven deployment.
Finally, the are the beneficiaries of the share shift our ships the wrong word gaining artists to meet chair and Ah you know so that should give us the growth I'm guessing backlog associated with that having said that of the endpoint based because he had the customer throughput that it's still are not in full steam by you should expect.
Into our market a ship Dodik b seven very very rapidly.
Similarly, youre seeing moves being made on divide by side, you know what would be the other operators to enhance divide by as well. So it could be seven platform benefits from an increased you know what it can invite by fixing see deployment.
The reason I talked about this is that it portends very very valid for us because with the acquisition I mean, Joe's connected home assets together with our product portfolio and bear and all good base, we'll see.
So that's kind of ipi, and our moca and Ethernet and their Ethernet they would own before the platform.
And we should really see a benefit of that share growth.
Which we have suffered from a non having in the last year or so you know so yes that is happening more rapidly, but not rapid enough for us, but they look at we're happy with that.
Okay very good thank you.
Thank you we reshaping of our question answer session I like to turn the floor back over to management for any further or closing comments.
Thank you operator, just want to note here that would be participating and they'd be able what's your technology conference on August 24th in 28.
The Jefferies 20, trendy virtual semiconductor IP hardware and communication infrastructure somebody does that opposed to second.
But Deutsche Bank Technology conference in.
September 14 to 15, just wondering emphasize it all these conferences or virtual and deals getting done many or could there be that said I want to thank you all for joining us today and we look forward reporting on our progress to your next quarter hopefully.
Sooner than that thank you very much.
Thank you that does conclude todays teleconference. You may disconnect. Your lines. This time and have a wonderful day, we thank you for your participation.