Q3 2021 PDF Solutions Inc Earnings Call
[music].
In school at this time I'll take instruments lying English and only know after the speaker's presentation. There will be a question and answer session for which instructions will be given at that time I would know like to hand to call. Okay. Two Joseph D. S.
Decent partners. Please go ahead Sir.
Thank you up there and thanks to all of you for joining US today on this call. We appreciate your time and your ongoing interest in PDF solution.
As the operator indicated my name is Joe G. As we are the I'm with the local partners. We are the best your relationship consulting firm P. D F.
You do not yet have a copy of today's press release, it's available on the company's website at P. D F Dot com.
Some of the statements made during this conference call will be forward looking within the meaning of the private Securities Litigation Reform Act of 1995, including statements regarding Pbf's future financial results.
For much real threats and demand for it solutions.
Actual results could differ materially.
The forward looking statements and risks referred on this call are based on information available to P. D. F. Today. The company has no obligation to update them you are advised to refer to the section titled the risk factor on the company's annual report on Form 10-K for the fiscal.
All year ended December 31, 2020, and similar disclosures and subsequent S. E C filings with that I'd like to introduce junk Berrien PDF solutions, President and Chief Executive Officer, he'll be followed by Annan, Rozzer Executive Vice President and Chief Financial Officer.
At the conclusion of management your prepared remarks, we will open to call for your questions. Let me now turn the call over to John Caveri, President and C. O P. D F solutions yeah.
Thank you for joining us on today's call. If you have not already seen our earnings press release managed to report K and 10-Q for the quarter. Please.
Please go to the investors section of our website, where each has been posted.
I will start the discussion by providing commentary on the third quarter.
From there I'll provide our impressions of the semiconductor industry and conclude with our expectations for pdfs business for the remainder of the year before handing the call over to unknown for more detailed financial update.
Highlights for the third quarter demonstrate the progress the PDF team has made over the last few years.
As we have discussed over many quarters some significant legacy gainshare contracts ended in the first half of this year.
This meant that Q3 for us could have been a challenging quarter.
That said by the second quarter of this year.
Less confidence that given a strong bookings and rottable nature of our analytics business, we anticipated that Q3, despite the gainshare headwind would be up modestly in terms of revenue versus Q too.
Now with the third quarter behind US we can report that the company achieve record revenue with meaningful quarter over quarter growth.
Despite the significant drop in very high margin Gainshare Avenue. We also saw improvements in our gross margins in that margins.
This is due to achieving more scale on her analytics subscriptions.
As a result, even with the headwind decreases gainshare, we made progress towards our target gross margins.
Turning to bookings.
The third quarter was particularly strong and exceeded even last year its third quarter bookings.
As some of you remember it was one year ago that we close the advent test partnership and with it a 50 million dollar contract.
At the time, we reported that it was remarkable quarter.
As the partnership it taken years of meaningful discussions to bring to fruition.
Well communicated then that we did not expect to meet or exceed the preview that performance level for awhile.
Exceeding the previous bookings milestone in just four quarters speaks as demand of our products and services.
When we consider all of these factors we.
We believe that from a financial metrics perspective. This quarter has demonstrated that the company's transition to analytics will lead to improved growth and financial leverage as we bring the business to scale.
Now, let me provide a little more detail about the bookings in the quarter.
Our bookings in Q3 primary came from it analytics.
We had a strong quarter accents of your bookings with the majority of accent to your bookings on a dollar basis continuing to be from customers moving to the cloud.
This included another eight figure cloud bookings as an enterprise customer moved from on premise to call deployment in order to leverage the benefits of accents. He is big data storage and end to end performance.
This quarter also included a tier one auto supplier that renewed its initial expense Yo cloud deployment as it expands the use of silicon and the electrification of car drive trains.
As semiconductors become more critical to automobile manufacturing, we're seeing manufacturers look to use sncf's capabilities to improve visibility and their technology and supply chain.
We also have a strong accent to your bookings from fun and Fabs deploying accents heal process control.
As a demand for the additional thoughts capacity drove further deployments of accents Hill.
Building, but the demand for semiconductor capital equipment, we experienced another quarter of strong symmetric run time license bookings as equipment companies ordered some metrics connectivity and equipment control software licenses to ship with their products.
As I discussed earlier yields ramp revenue was down significantly less.
Legacy Gainshare contracts complete it.
While we are not emphasizing integrated ye'll room contracts, we have started to see some increases in the volume reports from customers, including Chinese vibes, where we are seeing significant equipment installed.
We anticipate modest improvements in integrated yield ramp revenue going forward.
Lastly, as some of you may remember we reported a quick start analytics contract that's signed in queue too.
We completed the follow on multiyear contract in Q3.
This contract includes use up our characterization systems for electrical test Ah D F I E beam system.
And access to your systems, including R. D F M software.
As a result, we began shipment of our P. D fast testing epub deify measurement systems to their facility.
For customers innovating on the leading edge speed comes from having huge relevant datasets to be able to see failures in the parts per billion level.
We believe that R. D F I and C V systems provide provide the largest datasets, which enabled superior learning using our accent feel analytic software.
R D F M capabilities allow our customers to anticipate how improvements in manufacturing will impact future products.
Which is particularly important for foundries, which is much support which must support a rich set of designs.
With the strong booking spinning Rx censeo symmetric connectivity characterization vehicles and D. F. I systems, the third quarter demonstrates that pdf's broad value and strategic rub once across various industries from high voltage power icy manufacturing to the most advanced process technology development.
From equipment companies to system manufacturers Pdf's manufacturing analytics platform is becoming ubiquitous in the I T industry.
Now, let me turn to our perspective on the icy industry and expectations for the fourth quarter.
The industry continues to operate at a high level for manufacturing and R&D.
Maximizing existing operational effectiveness as well as developing new products and processes is critical to the industry in this setting.
As a result customer interest in our products and solutions remains strong.
We are pleased with the progress in the first three quarters of the year and making PDF solutions for manufacturing analytics platform for the industry.
This enables us to build recurring revenue streams to provide greater visibility and predictability tough financial results.
Finally, I want to thank our employees for nimbly, supporting our customers and continuing to innovate and the COVID-19 environment.
Now I will turn the call over to unknown for review of the financial after which we will open the call up to your questions.
Thank you John Good afternoon, everyone. Good to speak with you again today and I Hope all of you and your families are keeping you safe.
We are pleased to review the financial results of the third quarter and to bring you up to date on the progress of the business. We posted our earnings release in Madison report on the Investor Relations section of our web site or.
Ah Form 10-Q has also been filed with the SEC today. Please note that all of the financial results. We discuss in today's call will be on a non-GAAP basis at a reconciliation to GAAP financials is provided in the materials on our website.
But I shall results for the third quarter of 2021 continue this strong momentum of the first half of the year.
Third quarter total revenues, a total revenue was 29.6 million up 28% from the comparable quarter last year and up 8% on a sequential basis from Q2 2021.
Analytics revenue was up 90% to $27.2 million in Q3, 2021 worse is $14.3 million in the third quarter of last year.
And was up 39% sequentially from the prior quarter this year.
While we do not expect this level of analytics growth. The next quarter based on continued strong bookings you expect your your revenue and backlog to continue to grow this year.
For the quarter analytics represented 92% of total revenue hi by our revenue for the quarter was 2.4 million horses 8.8 million during last year's third quarter and represented approximately 8% of total revenue for the quarter.
Some of the I R contract came to the end of their Gainshare period.
We expect that I I R revenue will pick up marginally in coming quarters for the reasons John highlighted in his prepared remarks.
The I R component of our business is lumpy by its very nature and as he had previously stated if customers want to engage in iwai are in a meaningful way that will benefit PDF shareholders, we will certainly work with them.
Our transition to become the leading analytic software provider to the global semiconductor supply chain is continuing at a very consistent pace and we expect that to carry on going forward.
Booking momentum remains strong our bookings for Q3 exceeded the extraordinarily successful bookings of Q3 of last year when admin test became a customer.
For the nine months through Q3 2021, our bookings have now exceeded the bookings for all of prior year 2020, which end of itself was a remarkable bookings growth here.
Backlog at the end of the third quarter totaled $181 million on a sequential basis that represents an increase of 30% from the 139 million the prior quarter.
Notably compared to the third quarter of 2020 or backlog is up 60% on a year over year basis.
A strong bookings growth and sizeable ending backlog at the meaningful base for total revenue growth into 2022 and beyond.
Our cost of sales and operating expenses for the quarter, what essentially flat on a sequential basis compared with the second quarter of 2021.
We have a strong focus on managing expenses, we will make the necessary investments and have their technological capabilities and competitive position.
This quarter, we were able to expand gross margins to 66% and continue our progress towards the 70% gross margin goal, we shared in our fall 2019 analyst day.
We were also able to deliver 2.4 million of operating income this quarter compared to the almost breakeven operating income last quarter.
We're pleased with the positive <unk> of non-GAAP EPS reported this quarter as a result of this friend in our revenues and Mad admit of expenses.
We're also profitable on a non-GAAP net income basis for the nine months of 2021.
Turning to the balance sheet, we ended the quarter with cash and cash equivalents of approximately 141 million.
Byrd to $139 million for the prior quarter.
And no debt.
Cash flow from operations for the third quarter was positive for a million dollars.
We have also generated $3.8 million of cash flow from operations on a year to date basis.
We expect to end the year with another continue to your operating cash flow generation.
Our business continues to be strong across all sectors. We expect full year 2021 total revenues to grow on a year over year basis near the top end of previously communicated 20% to 25% range.
We also expect full year 2021 analytics revenue to grow on eight year over year basis more than 50%.
We feel that we are well positioned for 2022.
With that I'll turn the call over to the operator to commence the question and answer session operator.
And she reminded to ask a question you will need to crash star one on your telephone dry question crashed the candy.
And can you stand time I'll compile the Cuban named roster.
Okay first question comes from the lineup.
At the end.
And black <unk>.
Helping.
Good evening gentlemen, uhm.
Alright, nice quarter, just cheese I wonder if we could talk a little bit about with the growth that you're seeing.
In the analytics Businessweek Censeo platform, just what are you doing on the on the go to market side in terms of your your plans for the balance of this year and looking at the next year.
Are you ramping up your sales Rep capacity are you looking at partnerships just kind of want to get a sense of.
What you do get to continue that momentum.
Sure. Thank you.
So.
Partnerships are very important that the Adventists partnership has demonstrated that we do see other partnerships out there that we've been working on for quite a while that we believe at some point over the next few quarters will come to fruition in different ways. We.
We move more and more.
Users that makes sense you onto the cloud there's a lot we can do to make it easier for them to use extend to you with all the other systems and hardware that they need to.
Operate in order to get produced chips. So when it's an on premise system, it's very difficult to do because every customer deploys. It in some way as they moved to are called solution. It's much easier to kind of help them be more productive with the platform. So partnerships are very important as well as your point around building out our channel and our ability to.
Reach more customers, we have the benefit of you know having been.
Business for a long time and kind of grown gon' accent Yo over many years kind of organically over 130 accent too customers out that substantially more that now and where we were able to go back to them and move them. We don't feel any of them are fully penetrated move them from using parts of the platform to using Ah.
Broader section of the platform first step again for that is to move them to the cloud where we can then upgrade them with more modules and more capability quite comfortably said those two areas you know move into the cloud and partnerships are the two biggest things we're doing glare and then some.
Subsequently more investments in the channel and more applications on the platform.
Great. Thank you.
Your next question is from.
Craig how long your line is open.
Hey, guys. This is Tyler on behalf of Christian Thanks for letting us had a couple of questions.
John is great to hear the your quick start contracts will put in the corner and you signed a an additional multi year contract with a customer I think you said I was just wondering you know any additional call you could give us there on you know.
Maybe the size of that contract the timing near term long term of it any additional color there would be great. Thanks.
Yeah, we were happy to sign a contract as well you know I just looked like as you can imagine based on the components of the technology it pretty much is.
Many of the components opinion, I think with the exceptions to matrix includes accents Yo.
Eating capability electrical task characterization vehicle the extensive DFM modules as well so it was a very big.
Instead of technology, and all encompassing deployments as you can imagine contract wise, it's one of the larger contracts we've done.
On a subscription basis.
It's multi year minimum of a couple of years with extensions so.
So it's quite substantial in that regard as well.
Gives a lot of time to to really have the customer get value all the systems and then deploy it more broadly we of course hope to build on this with this customer as well as others, because we feel the platforms quite valuable and what the investments now going on in the leading edge. We believe there's quite a an opportunity for.
The solution.
That's great to hear and then.
Very strong you're free analytics business gonna grow over 50%, but you also seen some some record book attendant next year would it be fair to assume you're going to continue to build a girl that Alex business ahead of what I think is 20%.
Target in the next year.
Yeah. That's a great question Tyler we're doing a strategic planning now as we get into 2022 will provide our perspective on growth rate. We had said an analyst day in that we thought.
Six will go out 20% and the business would asymptotically approach 20% as.
Analytics with the majority of the business now you can see.
Two three analytics was 92% of the total business and Uhm, Alright, we're giving guidance that the growth for the overall company.
Would exceed.
Between 20, and 25% close to the higher end of that range. So obviously, we are kind of already a little bit beyond where.
We had previously expected the business to be but we're gonna go and look at how the remainder of the year. We're excited and what we think the future looks obviously the industry. Overall is very robust that would give us some confidence, but we need to see the.
The details of how things like before we kind of say anything more.
Understood that sounds great. That's all for us thanks, guys.
Once again, if you would like to ask a question. Please press Taiwan on your telephone keypad.
Your next question is from that's Richard.
Your line is open.
Hey, John Congratulations on the large.
Contract and inexpensive deal as well I was just wondering if I could dig into that contract a little bit can you give us any color on the sort of the split between T. F. I C DS.
N C L in that contract.
Yeah.
I don't know how we would go about doing that I got from the reality is it was a bundle of all those things.
Obviously from a cost standpoint, if you look at a cost to deploy.
The <unk> and would have the biggest calls because the machine is the most significant but.
You know in terms of value. It's hot it's a more judgmental thing I think what the customers buying is it an integrated solution that really helps them get.
Technologies developed more robustly in.
To a higher level of Manufacturability quicker. So it's hard to say, what's the piece that really makes a difference.
Okay, well, let me try it this way.
In in the contract Cham how much of it is recurring and and how much of it was like in the upfront place.
Place and it would be if I.
Is it it's all recurring.
It's it's a subscription paid out of them multiple years.
I don't recall in all of them.
Correct.
Okay.
Okay and.
Is it reasonable to assume with similar in five Steve on tax Bill.
You know of course, we're really not disclosing what's I mean, obviously, it's significant deal right. So.
But the specific number we haven't disclosed.
Okay, and then in terms of the Iwai our business.
It sounds like the game chair has hit bottom and should with volume increase moving forward are there any other contracts that.
You see rolling off in the in the near term that would be meaningful.
No we don't really at this time.
Okay, and then and then the last one for me.
Are there any six C.
The highway are left.
Or is it just one Chinese foundry or.
Is that it or.
That's a good point.
If you remember in the second quarter of this year, we did fine.
Yeah, a relatively large multi year fixed fee contract that goes out over four years.
That is in that number as well.
Okay. It was a fairly substantial sequential decline in that business and I'm just.
Sort of.
Was there a lot of <unk> revenue in the in the second quarter.
With a couple of the number of contracts actually.
To end at the end of Q2, so the game on the gains your side, so gangster fell off pretty substantially.
There was a drop off in a fixed.
Fixed fee revenue not because contracts.
Ended, but just percent completion ability to actually.
A ploy Ah vehicles and things to that account. So there was some small amount of revenue decline quarter over quarter on a fixed fee basis due to just deployment capabilities primarily in China.
But the majority of that decline was a number of not just one but a number of gainesville contracts coming to their own.
And the final wants me given the large contracts in the quarter is there any.
Incremental operating expenses required to support the new contracts that are.
Starting to deploy.
Yeah I mean.
Our expenses, we expect that we have brought them to the right level I mean going from now into the queue for we expect to maybe.
Maybe a slight increase in some of those expenses, but.
Plea or revenue is also maybe flat to slightly up so it doesn't matter as the expenses along with those revenues but.
It's good to have this problem that we have that we have more customers to meet demand for both on the analytic side as well as some of the continued.
Engagements or the past on the highway our site that we just talked about I think it's the same kind of your question.
The the capability required to meet that large contract is in place.
Got it alright, well somebody's email me pushing my luck. Thanks, thanks, so much.
[laughter].
Once again to ask a question please press the star.
One on your telephone keypad.
Your next question is from Kashmir private parts.
Your line is open.
Hi, guys.
Hi, Gary.
Following up on Gasses question, you know absent that big quick start contract.
You know your core accent Ya'll business I'm, assuming that's still grew.
In a in a way that we were very pleased about we.
We don't disclose the numbers, but on a percentage basis.
Yeah, It would annualize to a number of well ahead of our 20 per cent of you've talked about.
Right.
And can you talk about your capex in the corner it looks like you step that up significantly.
Is n y.
Yeah.
Yeah I mean, it is John explained we had the big contract to that.
I think he was being asked about what are the different components of the contract you obviously heard him talk about <unk>.
Different machines, we have as well so.
Some of the machines that we have in our lab as we start to get them ready for customer shipment there will be some upgrades to be have to do on those machines and you know predominantly that's what drove the increase from time to time. We will also be upgrading these machines. As this number was more like around 500 for coupon and cute too, but remarkably lower compared to last year.
Which was also lower so every year, we have started to bring that number down but as we get ready to ship machines or do some special projects for customer sometimes in our lab. We will from time to time are you spending to upgrade the different hardware pieces of redeploy decks notes across the.
Environment, you'll see his tongue capex pick ups.
For hardware that we place at the house, that's too, which I think this past quarter was a small piece of that number but I believe in queue for there'll be another piece associated with that right.
Okay. So.
About getting the equipment ready it.
It sounds like the Capex step up is.
Is not necessary.
Is.
Not just for the quick start contract, but getting equipment ready.
In anticipation of other contracts or in hope of other contracts is that.
Yeah, there's a quick.
Equipment purchases, primarily on the bottom of electrical test on the even side, but for that contract.
Our contract some other anticipated activities and as I said I'm not sure in Q3, I know that we've been making some purchases.
Exactly timing for computing to support decks note that specific goes up.
And those are they're all in that number there is not one that I think just dominates it.
Okay, Let me ask it a different way is part of the Capex to have additional E probe machines.
We have additionally, pro machines gay, but it may be to replace some components on the ZIP code machines for new applications that we're developing.
So now trying to could've involved but it is not just for specifically for the machine machine shipped corner in fact, probably that machine has very little capex or something with it at all.
Okay. Thank you.
Your next question is from quiet typing, it's William Blair here.
Hey, guys congrats on a great quarter and thanks for taking my question I, just want to come back to the the sequential increase in analytics revenue.
Is there a real nice move up is this a new baseline we should think about like is the $27 million. We saw this quarter.
The majority of it recurring and therefore, we should expect to see you know to grow up at $27 million as we move ahead the queue for it into 2022.
Yeah look I mean, our focus has been to continue to the transition the business towards analytics and that doing multiple problems not just the extensive software.
But also on the other pieces within analytic so yeah, we're starting to feel we're starting to feel comfortable.
With this level of athletics revenue.
Meaning meaning it's Ah.
We should build off it from here, there's not yeah.
That's right I look I mean precisely to help you all think about how to model. This is kind of why we put some of those thoughts around what we expect the total revenue to be doing for this whole year near the 25% range that we had prior communicated as well as the analytics business. So hopefully you know when you go back into the map.
You'll see that were saying that one quarter left.
The numbers will support at similar levels of analytics revenue or slightly up.
Okay, Great and then the the contract value that you that you mentioned a large contract that's it.
That's a T T V value that's the total contract value or is that the annual Patrick.
I think we reported the total we haven't reported specific value of the total contract value, but it.
Both an annual basis.
And a multiyear basically it is a very substantial contracting both both ways you can look at it.
Yeah, I guess I'll just refer referencing the eight figure bookings you figured that is a that is total contract value for the extent to club.
That's a T V number okay, yeah, okay, great. Congrats again, thank you. Thank you.
Oh once again, if you would like to ask a question. Please press the size and the number one on your telephone keypad.
Your next question is from plantation F I investment pie.
[noise].
Hi, Thank you AIG its investment partners and again, congratulations I'll add to that that you really think a breakthrough numbers here.
In terms of that very large contract is that total contract value reflected in the in the bookings this quarter or or only part of it.
The part of Noncancelable, so yes.
Okay, and just in terms of general trend.
If I if I have to.
No yield improvements in automation in general versus.
Smaller line width, we're becoming more critical in you becoming more critical for that <unk>, what's driving this because this is kind of turning explosive on you, which you have been hoping for for the last few years.
You know what are the drivers here.
Yeah, I think so yeah.
What's really cool about this right now.
I think you kind of alluded to it in your question. It was where we were really just relevant to the foundry that was doing the advanced nodes and got to be a very small number of customers in a relevance was always there, but if you look at this quarter, we had 78 figure contracts.
We're signed by companies that do the trailing of the trailing edge you know high voltage stuff Microcontrollers and things like that and then yes, we still are very relevant to believing edge companies as evidenced by that large contract that was signed on the heels of the quick start so that you know it's.
It's a broad base of demand now for analytics, because investment is going on not just him, leaving us now, but also new derivatives on.
Trailing edge nodes, new capacity I'm trailing edge nodes more companies like that tier one auto supplier who now.
Silicon for the drive train is becoming supercritical and therefore, they want accents you analytics. So it is a very broad base.
Business in this quarter I think.
It showed that.
[laughter].
To follow up and let's say that drive train application you would never necessarily think that a company like that might be I think whoever the company is not a normal foundry type of situation you would never think of them thinking like so deeply and thinking analytics or better yield is it more than that is that without analytics yield is poor.
Or what is it why would they even think of that.
Yeah, because you know if you just look at the electrification of cars then.
High voltage transistors are super important quality uhm, they set things like the possibility of the car catching a fire. They said the liability in lifetime of that cost of manufacturing those components is really important we've noticed cut.
Customer base.
Companies getting into way for making that you've seen that SD announced that they are making their own way first we see on a company that did primary on simulated primary 200 millimeter manufacturing getting a 300 millimeter and we see companies like you know dense, though and Bosch start building up sobs and getting into that silicon high voltage silicon capability because some.
Much of the value is there in the car and while you.
You may not use day to ask for a long time, there's mandates about when you're going to be using electric cars.
So okay, we see the market moving very very fast and it's changing quite a bit and accents. You analytics is a very valuable way to understand how do we get to the highest level of quality operational effectiveness and yields. So it is a viable capability for these companies and many of them were already customers of ours and.
They are expanding and some of them are kind of new customers for us like the auto suppliers, who y b.
And this is here when all of US who want to be in the silicon business, because it's how they control their destiny.
Out of curiosity, if you can say those two power names that you mentioned existing customers under a new <unk> new customers.
Yeah, I, probably will always careful about who we say as our customers arm, but suffice it to say.
We've always sold first the top tiers of every market we get into typically.
Question on Silicon carbide Silicon carbide. It requires a lot more test obviously very delicate the handle super high voltages difficult task Yep and much more rigorous testing that's being done does that correct.
Is there a module you have specifically for that is that figure we get into some of the drivers here on your power customers.
That's a great great insight yeah. It is an area that we have a capability on accents you test and.
They have very complex bernann tests post the oven and we have an accent you unique modules that are able to load that data and align it and analyze it and that has been something we've been piling with those customers today does not an important part of our revenue, but we believe it will more and more be an important.
More important part of our revenue because of exactly the high point to highlight in your question.
Okay left left comments.
One of the previous calls it's given out.
It wasn't even really important then they will scheme of things with the following caveat you'd given out.
Number just to give an indication of what kind of data point.
And analytics and data points are being told in everyday by your customers and the I forget the number was with an astounding number.
You know as you're transitioning almost from being associated with the semi cap space, which isn't the best place to be right now by the way and maybe for the next two years, but there's more here where once in a while people are actually bringing you up as SaaS name finally.
No you probably process more data points and many south companies do at this point and certainly more mission critical in a way you know is it possible would give out like giving out some detrick and some.
Creative nice way that people would be unable to understand just what type of incredible processing that you were doing to these customers.
Yeah. That's a great point, we are tracking now the amount of data poured into accents you cloud four core customers.
As your question kind of alluded to we've had a number of customers move on an enterprise basis to accent.
That many of those customers will be up and running at.
Company, it's a transition it takes months just even load all of their data because they want historical data to into the cloud system, an author on payment system as we get out to 2022 will start communicating what the size of the accents you called databases and yes.
It will be.
It will be in the multiple petabytes of data and process daily rate your insights quite sharp, yes. It would the numbers on a daily basis quite large now how that compares to do that all art and stuff I'm sure. There's lots of things that are big but in terms of mission critical manufacturing data. It is a very big days that'd be passes for customers data and a lot of that day.
That comes from places that are outside therefore of wall from their suppliers and foundry test and assembly that I'll get loaded and so it is a complex web that were holding out for the customer base.
And if I may just one last question I'm, sorry, I'm, taking so much time, but just in terms of being able to cross utilize what you learn cause customers I I believe that you are able to do that obviously anonymously.
Is that is the case is at some point, we do become almost like a must have because.
They need they want and need that cross analytics in order to get the best Bang for the Buck.
Yeah. It must have there's always a super strong word and always there's always clever people out there. So that would always makes me nervous but the point that you bring up there we do always at customers want us retain the rights to use the data to make our algorithms better because it benefits.
If our algorithms can help them find insights better and of course.
The larger data set that we sit on and we can let our algorithms run the more more effective our algorithms can be for our customer base overall, and so we hope it increases importance for our customers and we'd like it to be.
The platform that is the most.
Hello, Nix platforms, the most effective one for the industry, but.
Must is always a super strong word sudden nervous about that word, but your general pieces. Yeah, we would agree with that general pieces and yet every time I meet with operations executive and I meet with them from the fab Ibm's and the Fabulous all the time, but maybe now mostly on zoom, but I still meet with lots of them they want us to make sure that our organ.
Can see you know.
Quality issues more subtly subtle called issues sooner and more effectively for them because they don't want Boston I Wanna do is got one that Guy said to me that since week I don't want to be explained to my customer and the auto supply chain. Why we had this problem. This is something that's embarrassing when it happened. So your software is got to catch it and.
So they want us to hone our outcomes for exactly what you described one and hopefully that will make us important to them.
Thank you and your humility I appreciate it.
She reminded to ask a question please press.
The number one.
No questions at this time and I would like.
C L S P D at solutions.
Closing remarks.
Thank you for participating in our Q3 call. We look forward to talking with you again soon.
Stay safe and have a great day goodbye everyone.
This complaint.
Thank you for participating you may now disconnect.
[noise].
[music].
[music].