Q1 2022 indie Semiconductor Inc Earnings Call
Good afternoon, and welcome to M D semiconductor first quarter 2022 earnings call.
Good afternoon and welcome to Indy Semiconductor's first quarter 2022 earnings call.
At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded at this time I will turn the call over to Ashish Gupta.
At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I will turn the call over to Ashish Gupta, Investor Relations. Mr. Gupta, please go ahead.
The relations Mr. Coca. Please go ahead.
Thank you operator, good afternoon, everyone and welcome to MB Semiconductors first quarter 2022 earnings call. Joining me today are John look climate at least co founder and CTO, and Tom Schiller, and CFO and EVP of strategy.
Thank you, Operator. Good afternoon, everyone, and welcome to Indy Semiconductor's first quarter 2022 earnings call. Joining me today are Donald McClymont, Indy's co-founder and CEO , and Tom Schiller, Indy's CFO and EVP of Strategy. Donald will provide opening remarks and discuss business highlights, followed by Tom's review of Indy's first quarter 2022 results, as well as our second quarter 2022 outlook.
Donald will provide opening remarks and discuss business highlights.
Led by Toms review <unk> first quarter 2022 results as well as our second quarter 2022 outlook. Please.
Please note that we'd be really making forward looking statements.
Please note that we will be making forward-looking statements based on current expectations and assumptions which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representative about views of any subsequent date.
On current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views only as of today and should not be relied upon as representing the views of any subsequent date.
These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.
These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.
For further discussion that was material risks and other important factors that could affect our financial results. Please refer to our risk factors in our recent annual report on Form 10-K for the fiscal year ended December 31, 2021 and other public reports filed with the SEC. Additionally, the results and guidance discussed today are based on certain non-GAAP.
for further discussion of the material risks and other important factors that could affect our financial results.
please refer to our risk factors and our recent annual report on Form 10-K for the fiscal year and the December 31st, 2021 and other public reports filed with the SEC. Additionally, the results and guidance discussed today are based on certain non-GAAP financial measures.
Financial measures.
A complete reconciliation to GAAP. Please see our Q1 earnings press release, which was issued in advance of this call and can be found on our website at <unk> dot com with that I'll turn the call over to Donald.
for a complete reconciliation to GAAP, please see our Q1 earnings press release, which was issued in advance of this call and can be found on our website at indysemi.com. With that, I'll turn the call over to Donald. Thanks Ashish.
Thanks for fish and welcome everybody.
I am pleased to report that indeed delivered another record quarter in Q1.
I am pleased to report that Indy delivered another record quarter in Q1.
Building upon our 2021 outperformance this year is off to a strong start for Andy with increasing broad based demand for our highly innovative automotive semiconductors and software.
Building upon our 2021 outperformance, this year is off to a strong start for Indy, with increasing broad-based demand for our highly innovative automotive semiconductors and software, underpinned by a strengthening order pattern.
<unk> bio strengthening order pattern.
Perhaps what is most impressive is our team's operational execution, particularly in the face of continued global supply chain headwinds.
Perhaps what is most impressive is our team's operational execution, particularly in the face of continued global supply chain headwinds.
And this performance is a testament to the resiliency of our team our differentiated product portfolio, our underlying intellectual property and our key industry partnerships spin.
Indie's performance is a testament to the resiliency of our team, our differentiated product portfolio, our underlying intellectual property, and our key industry partnership.
Specifically during the first quarter, we once again outpaced our addressable markets and grew revenue to a record 22 million.
Specifically, during the first quarter, we once again outpaced our addressable markets and grew revenue to a record $22 million, approximately the same level of revenue that we delivered in the entire of 2020 calendar year.
Ultimately the same level of revenue that we delivered in the entire of 2020 calendar year.
We expanded gross margin by 710 basis points year over year, and 110 basis points sequentially.
We expanded gross margin by 710 basis points year-over-year and 110 basis points sequentially. And we gained design-win traction across LiDAR, radar, user experience, and electrification applications.
And we gained design win traction across Lidar radar user expedience and electrification applications.
Our advanced <unk> solutions are being brought to market is the automotive industry approach is a major inflection point.
Our advanced auto tech solutions are being brought to market as the automotive industry approaches a major inflection.
We believe India is poised to be a major beneficiary for intensifying industry megatrends in the automotive customers are demanding a step function increase in electronic performance in complexity.
We believe Indy is poised to be a major beneficiary for intensifying industry megatrains as automotive customers are demanding a step-function increase in electronic performance and complexity.
Our highly differentiated semiconductor and software platforms are particularly well suited to meeting this challenge.
highly differentiated semiconductors and software platforms are particularly well suited to meeting this challenge.
Stepping back and to put a context around what's at stake here.
stepping back and to put a context around what's at stake here.
In a December 2021 report the United Nations estimated that road accidents are responsible for roughly 1.3 million deaths and 50 million injuries all over the world.
In a December 2021 report, the United Nations estimated that road accidents are responsible for roughly 1.3 million deaths and 50 million injuries all over the world every year.
Every year.
And one of the leading killer of children and teenagers on a global basis.
and are one of the leading killers of children and teenagers on a global basis.
These statistics underscore the argent need for greater onboard Adas capabilities.
These statistics underscore the urgent need for greater onboard ADAS capability.
The U N has set a target to hospice number by 2030 through national and local government actions, but we feel that that's not ambitious enough.
The UN has set a target to pass this number by 2030 through national and local government actions, but we feel that that's not ambitious enough.
As an industry, we have the means to bring to market technologies to enable them crushable cars, and ultimately truly autonomous vehicles and.
As an industry, we have the means to bring to market technologies to enable uncrashable cars and ultimately truly autonomous vehicles.
And at Indy, we're passionate about leading the way through cost effective semiconductor and associated software integration.
And at Indy, we're passionate about leading the way through cost-effective semiconductor and associated software integration.
Further.
According to a recent Kelley Blue book industry assessment.
Further, according to a recent Kelly Blue Book Industry assessment,
Many of the top automotive technology is recommended for car buyers are eight us.
Many of the top automotive technologies recommended for car buyers are ADAS, Automatic Emergency Braking, Driver Monitoring Systems, Safe Exit Assist.
Automatic emergency braking.
Driver monitoring systems safe.
Safe exit assist.
360 degree camera.
Blind spot do you monitor and video rearview mirror.
These applications all support the UN mission and perfectly aligns with <unk> existing product portfolio and Roadmaps.
These applications all support the UN's mission and perfectly align with Indy's existing product portfolio and roadmap.
During the quarter.
During the quarter, we commenced sampling of Surya, our lidar SOC, which integrates DSP, analog, mixed signal, MCU, and firmware functionality, augmented by Teraxion's world-class lasers and associated technology.
<unk> commenced sampling of studio, our Lidar, Src, which integrates D. S. P analog mixed signal MCU and firmer functionality augmented by taxi owns world class laser and associated technology.
I'm delighted to report that we already have multiple customers engaged in this early phase launch.
I'm delighted to report that we already have multiple customers engaged in this early phase launch, all of whom are investing in their own development based on our Surya platform to support the LIDAR system.
All of whom are investing in their own development based on our studio platform to support the Lidar systems.
For us this is an opportunity to capture up to $75 per implementation, enabling a complete 200 dollar bomb, which is 80% less than current discrete architectures a.
For us, this is an opportunity to capture up to $75 per implementation, enabling a complete $200 bomb, which is 80% less than current discrete architecture.
Accordingly, we believe that studio will catalyze the lidar market.
Accordingly, we believe that studio will catalyze the lidar market.
At the same time the complimentary design teams, we recently acquired from on semi and Adi helped us secured a strategic design win with one of the top four global automotive radar suppliers in the world.
At the same time, the complimentary design teams we recently acquired from OnSemi and ADI helped us secure a strategic design win with one of the top four global automotive radar suppliers in the world.
During the quarter, we successfully integrated these two groups and made substantial progress on our development setting the stage for India to become the leading supplier of radar solutions for all applications within the coming years.
During the quarter, we successfully integrated these two groups and made substantial progress on our development, setting the stage for Indy to become the leading supplier of radar solutions for all applications within the coming years.
This is in fact, the single largest design win in India, So steady and sets the stage for us to similarly capture additional billion dollar sized programs.
This is, in fact, the single largest design within Indie's history and sets the stage for us to similarly capture additional billion-dollar-sized programs.
Turning to use that experience Oems are increasingly differentiating their vehicles not in terms of torque and horsepower, but rather via seamless smart for integration lighting wireless charging and telemetry features.
Turning to user experience, OEMs are increasingly differentiating their vehicles, not in terms of torque and horsepower, but rather via seamless Smart Fort integration, lighting, wireless charging and telemetry features.
For example, today Apple car play is supported on hundreds of vehicle models and is available in more than half of new cars.
For example, today, Apple CarPlay is supported on hundreds of vehicle models and is available in more than half of new cars, and continually gaining in share, in most cases enabled by Apple CarPlay.
And continually gaining in sheer in.
In most cases enabled by in these core technologies.
During the quarter, we expanded our design win pipeline for wired and wireless charging.
During the quarter, we expanded our design wind pipeline for wired and wireless charging.
<unk> preproduction shipments to a leading Korean customer for rapid charging applications and captured key content with one of the leading U S automotive Oems.
commenced pre-production shipments to a leading Korean customer for rapid charging applications, and captured key content with one of the leading U.S. automotive OEMs.
Shifting gears.
With rapidly increasing oil prices and broader concern for global climate change consumers are rapidly turning to electric vehicles.
With rapidly increasing oil prices and broader concern for global climate change, consumers are rapidly turning to electric vehicles.
Last quarter EV sales were up 76% in the U S compared to decline of 16% overall for traditional new cars and trucks sales.
Last quarter, EV sales were up 76% in the US compared to decline of 16% overall for traditional new cars and trucks.
In fact, according to a recent car gurus pool.
In fact, according to a recent CarGurus poll, 40% of Americans now expect to own an electric car in the next five years, up from 32% in February and 30% last year.
40% of Americans now expect to own an electric car in the next five years up from 32% in February and 30% last year.
Driven by an increasing demand for fuel efficient vehicles in response to high gas prices.
driven by an increasing demand for fuel-efficient vehicles in response to high gas prices.
Along with cyclical factors the industry should continue to benefit from the long term structural trend towards electrification.
Along with cyclical factors, the industry should continue to benefit from the long-term structural trend towards electrification.
Once consumers make the switch to electric that shift tends to be permanent due to higher performance and compelling economics of electric vehicles.
Once consumers make this switch to electric, that shift tends to be permanent.
due to higher performance and compelling economics of electric vehicles.
India will be a major beneficiary of this electrification megatrend led by our wins that are attached school, one of the largest European automotive tier ones.
Indy will be a major beneficiary of this electrification megatrend, led by our wins at Vitesco, one of the largest European automotive tier 1s.
And with a leading EV OEM, where last quarter, we added to our design win scorecard.
and with a leading EV OEM where last quarter we added to our design win scorecard.
Generally our product portfolio. So he has a far higher attach rate with an electric vehicles, given the need for more power efficient semiconductors and software as well as the more innovative EV architectures.
Generally, our product portfolio sees a far higher attach rate within electric vehicles given the need for more power efficient semiconductors and software as well as the more innovative EV architecture.
Said another way demand is expected to accelerate for next generation vehicles.
Said another way, demand is expected to accelerate for next generation vehicles containing increased safety features and an enhanced user experience as the automotive industry shifts towards ubiquitous electrification and autonomy.
<unk> increased safety features and an enhanced user experience as the automotive industry shifts towards ubiquitous electrification and autonomy.
As a direct result, the average semiconductor content per car is expected to grow from just $500 today.
As a direct result, the average semiconductor content per car is expected to grow from just $500 today to $4,000 over the coming decade.
$4000 over the coming decade.
Our product portfolio is particularly well aligned to capitalize on the shifting landscape and steep content growth trajectory.
Our product portfolio is particularly well-aligned to capitalize on the shifting landscape and steep content growth trajectory.
Finally during the quarter, we extended our market reach by launching a strategic presence in both Japan and more recently in Korea.
Finally, during the quarter, we extend our market reach by launching a strategic presence in both Japan and more recently in Korea.
While we can have some content that Nissan N. D has historically not had any food holds at Toyota Honda Mazda Subaru.
While we have some content at Nissan, Indy has historically not had any footholds at Toyota, Honda, Mazda or Subaru, and we've been underrepresented at Hyundai.
And we've been underrepresented at Hyundai and Kia.
With the establishment of N D sales and technical support centers of excellence now in Tokyo, and so this is a top corporate mandate and we look forward to providing progress reports, particularly given the massive markets. We've just opened for India.
With the establishment of indie sales and technical support centers of excellence now in Tokyo and Seoul, this is the top corporate mandate. And we look forward to providing progress reports, particularly given the massive markets we've just opened for you.
Japan, and Korea represent strategic launching sites for leading edge automotive technologies, and we expect to commensurately ramp a highly integrated portfolio across an entirely new class of customers in support of our vision of empowering the global Auto Tech Revolution.
Japan and Korea represent strategic launching sites for leading-edge automotive technologies, and we expect to commensurately ramp our highly-integrated portfolio across an entirely new class of customers in support of our vision of empowering the global auto tech revolution. I'll now turn the call over.
I'll now turn the call over to Tom for a discussion of our results and outlook.
Thanks Donald.
We delivered strong first quarter results once again exceeding our guidance and analysts expectations.
Thanks, Donald. Indy delivered strong first quarter results, once again exceeding our guidance and analysts' expectations.
In fact.
Q1 represents our fourth consecutive quarter of outperformance versus plan post <unk> IPO last summer.
Q1 represents our fourth consecutive quarter of outperformance versus plan post Indy's IPO last summer.
Yeah.
Revenue for the period was up 171% year over year, and 16% sequentially to a record $22 million beating.
Revenue for the period was up 171% year over year and 16% sequentially to a record 22 million.
Beating our outlook for revenue growth to be up 160% to 170% year over year.
Beating our outlook for revenue growth to be up 160 to 170% year over year.
Gross profit was $10 4 million translating into a 47, 4% gross margin up 710 basis points year over year, and 110 basis points sequentially and versus our 47% guidance.
Operating expenses were on forecast at $26 9 million against guidance for $27 million.
And up from the prior period with R&D investments of $22 million as we accelerated product development.
and up from the prior period with R&D investments of $20.2 million as we accelerated product development.
Likewise, we increased our SG&A spending to $6 7 million to expand our marketing capabilities and implement some of the final elements of public company infrastructure.
As a result, our operating loss was $16 5 million better than analyst consensus estimates.
As a result, our operating loss was $16.5 million better than Analyst Consent's assessment.
Interest other expenses and taxes were negligible. Thus our net loss was also $16 5 million with a loss per share of <unk> 11 cents on a base.
Of $148 1 million shares.
Turning to the balance sheet, we invested 900000 in working capital and made a $10 million payment to analog devices for our semi O carve out.
Turning to the balance sheet, we invested $900,000 in working capital and made a $10 million payment to analog devices for our Simeo carve-out, exiting the period with $193 million in cash and limited debt.
Exiting the period with $193 million in cash and limited debt.
Looking forward and based on strong order visibility set customer ramps and new product launches, we plan to sustainably outpaced in these addressable markets over the forecast horizon.
Looking forward and based on strong order visibility, set customer ramps and new product launches, we plan to sustainably outpace Indies addressable markets over the forecast horizon.
Specifically for the second quarter of 2022, we anticipate revenue growth on the order of 170% to 283% year over year and in the range of 25 to 26 million, putting India on pace for another record quarter.
Specifically, for the second quarter of 2022, we anticipate revenue growth on the order of 172 to 183 percent year-over-year, and in the range of $25 to $26 million, putting Indy on pace for another record quarter.
At the midpoint of this range, we're on a greater than $100 million annualized revenue run rate further.
At the midpoint of this range, we are on a greater than $100 million annualized revenue run.
Further we expect gross margin expansion to the 48% range with $30 million in operating expenses, comprising $23 million in R&D and $7 million in SG&A as we increase our product development investments in response to pent up customer demand, particularly in radar and extend.
Further, we expect gross margin expansion to the 48% range with $30 million in operating expenses, comprising $23 million in R&D and $7 million in SG&A, as we increase our product development investments in response to pent-up customer demand, particularly in radar, and extend our sales and marketing capabilities globally.
Our sales and marketing capabilities globally.
Assuming no other net expense or taxes below the line and approximately 149 million shares outstanding we expect a net loss of <unk> 12 per share.
Assuming no other net expense or taxes below the line and approximately 149 million shares outstanding, we expect a net loss of $0.12 per share.
Finally, as Donald outlined any is uniquely positioned to capitalize on the strategic auto tech opportunity and translate our design win momentum into a highly profitable business model.
Finally, as Donald outlined, India is uniquely positioned to capitalize on the strategic auto tech opportunity.
translate our design win momentum into a highly profitable business model.
Given our visibility scalability and planned operating leverage as revenue growth far outpaces Opex, we are well on our way to reaching profitability in the back half of next year.
Given our visibility, scalability, and planned operating leverage, as revenue growth far outpaces OpEx, we are well on our way to reaching profitability in the back half of next year. Representing a key next step on our path to realizing Indie's long-term targets
Presenting a key next step on our path to realizing in these long term targets of 60% gross and 30% operating margins by 2025.
60% gross and 30% operating margins by 2025.
With that I'll turn the call back to Donald for his closing comments.
With that, I'll turn the call back to Donald for his closing comments.
Thanks, Tom.
To summarize as our Q1 outperformance and strong growth reflect India is continuing to execute the business plan. We stated at our IPO and we couldnt be more excited about the opportunities ahead.
To summarize, as our Q1 outperformance and strong growth reflect, India is continuing to execute to the business plan we stated at our IPO, and we couldn't be more excited about the opportunities ahead.
In particular, we see multiyear tailwind that will drive steeper demand for our solutions, including.
In particular, we see multi-year tailwinds that will drive steeper demand for our solutions, including.
The global automotive semiconductor market being expected to grow from 36 billion last year to 62 billion by 2026.
the global automotive semiconductor market being expected to grow from $36 billion last year to $62 billion by 2026.
The transport expedience fundamentally changing for both drivers and passengers is enhanced safety and better in cabin features are deployed and as Oems announced worldwide EV investments over the next five years that will exceed $250 billion in some cases committing to shift their entire card portfolio to electric within a short amount of time.
The transport experience is fundamentally changing for both drivers and passengers as enhanced safety and better in-cabin features are deployed, and as OEMs announce worldwide EV investments over the next five years that will exceed $250 billion, in some cases committing to shift their entire car portfolio to electric within a short amount of time.
Sure.
We expect in these differentiated semiconductor sensor and software technologies to play a major part in the next wave of automobiles, enabling.
We expect Indy's differentiated semiconductor sensor and software technologies to play a major part in the next wave of automobiles.
Enabling us to help save lives in the process dramatically enhance the in cabin experience and generate significant value for our shareholders.
enabling us to help save lives in the process, dramatically enhance the in-cabin experience, and generate significant value for our shareholders.
That concludes our prepared remarks, operator, let's open the call for Q&A.
Yes.
Yeah, we will now be conducting a question and answer session if you'd like to ask the question.
Our work on your telephone keypad.
That's all for me.
Your line is open questions.
You May press star two if he would like.
We'll take questions from the queue, we ask that you might be your questions to one and one follow up for participants.
Uh huh.
Sorry.
Your first question comes from.
So what private Investor. Please go ahead.
Hi, This is Oliver.
Capital So Dr. Donald Tom Congratulations on the.
Strong execution and progress here.
So yeah, yeah no problem so.
Yeah, Tom Thanks for laying out the gross margin sort of.
Aspirational goal of 60% mid 23 can you talk about the the key elements the expansion drivers between here and there because you've been executing really well on gross margin I'm. Just curious you know how that how do you keep that momentum going.
Yeah sure, it's actually a combination of things.
The move to from first generation to second to third generation pricing scale is a factor and then new product launches coming on board.
All of those things culminate.
<unk> helped us thus far to move to 47.
And then will collect to move to 48, and then ultimately to the long term target of 60.
Okay helps to have that color. Thanks, and then maybe for Donald is the sensor wins, you've had a pretty impressive rate are you going to tee up some lighter ones. Just one well can you just give us a sense, how you approached the market our customers differently, perhaps than some of the point product competitors that are out there or maybe you don't but just any color there on I'm on your approach to the sensor.
Hum since you saw you know kind of a range of products will be helpful to understand where they are.
Jason perspective, yes.
I mean.
The the market across each individual sensor modality is slightly different but.
Generally speaking.
What we found in each market was there were relatively few players in the market, who had perhaps invested over time, and we felt and actually more importantly, our customers felt that their appetite to continue investment to give the performance and the.
And the cost points, so they needed for the long term, we're somewhat lacking and.
Generally speaking we came with very new technologies very innovative ways of solving the same problem.
And it created the opportunity for us to become a new player in that market.
I mean, particularly I would single out the radar design win as falling into that category really is one of the the very most premium design wins that can be achieved in the automotive market at all bar none really.
And so our approach to having.
The appetite and the willingness to invest in new technologies has really been instrumental for us.
And then additionally across the different sensor modalities as we're positioning ourselves as a one stop shop for all kinds of sensors.
Really what.
Became apparent as the once they pick us for one or they want to use us for all of the sensors because effectively a large amount of the software back end is common to all of them, which really saves them a lot of money in their opex and their development costs for for their whole sensor portfolio.
Lastly, if I can just kind of looking ahead, maybe two opportunities in the cabin that I find interesting and maybe you can give some color on the first as you know driver monitoring and second and that one just curious how that kind of ramps up and how you've taken opportunity there and then something like in cabin wireless charge.
I know, there's kind of some solution penetration out there, but maybe why hasn't that why hasn't that penetrate as much as it should have perhaps already and then what's the gating factor that you might be able to kind of break down to drive more adoption there well.
Well the first one is an easy answer I mean, we are already involved in Dms and in fact Oems.
Part of our vision portfolio and.
We'll give more details on that as.
In the fullness of time.
In terms of in cabin wireless charging I mean, we see it ramping up.
See it accelerating also.
I mean generally speaking I would say you know the automotive market is quite slow to adopt is a significant cost either but.
But once you've had it in your car you can go back I just went through that anecdotally personally myself my lease expired and I was desperately trying to make sure that my new car would be delivered with a wireless charger inside because once you've had it.
It's hard to give it up I don't like.
The cables wrapped around like your stake.
Uh huh.
Next question comes from Ross Seymore with Deutsche Bank. Please go ahead.
Hi, guys. Thanks for only asked the question and congrats on the strong execution yet again.
But I wanted to talk about the size of the design wins that you guys have you talked about that are the sensor win being the biggest one in the history of the company. We've talked in the past about you guys being invited to bid on bigger and bigger deals is there any sort of way you could quantify the just.
By a percentage increase not necessarily a dollar amount, but the size of the design wins, you're getting and in addition to that magnitude the breadth of design wins across the broad array or are you just getting invited to a single area or in bigger design wins in that area or is it also the breadth that is allowing you to grow.
I mean, certainly it's Brett also we have many activities, which are running right now.
Which are of the same order of magnitude is that first flagship win that we talked about and in terms of quantifying. It. It's between two and three times the size of the largest design win that we had previously.
Great. Thanks for that color and then the.
Gross margin side, one for you Tom.
In the near term what caused the upside.
First quarter, let's keep it quarter over quarter, the increase quarter over quarter, you had of about a little over a point and then the guidance going forward, increasing I get the roadmap to the 60 and the moving parts there, but in the near term.
What are the first steps, you're taking a lot of that journey.
Yeah. So you know we've.
<unk> had some really good cost reduction initiatives kick in also candidly our mix is just getting better you know as we move forward and increasingly our mix becomes eight us based we tend to command much higher gross margins in that area. So that's yet another catalyst to gross margin expansion as we go forward and it was.
One of the contributors last quarter and then as you probably gleaned, we like to guide relatively conservatively to give ourselves room, given the environment that we're in these days so there.
There was an element of that as well.
Got you and if I could sneak in one last one any sort of sand in the gears are additionally, in this quarter versus the prior quarter as far as supply chain management those sorts of things it doesn't seem to be slowing you down and you deserve kudos for that but is it getting better worse staying about the same.
I mean, tendentiously, it's getting mostly Bachelor.
Maybe a year ago, or so or nine months ago. Everything was was tight no we have certain areas, where there are bottlenecks.
Through the course of the beginning of this quarter there was the scared about the Covid shutdowns in China.
Caused some inconvenience for a couple of weeks, but I think we've moved beyond that.
Than perhaps you know it's appropriate to talk about the effect of the war in Ukraine.
So far we haven't seen any direct impact of that.
Neither due to the supply of noble gases to the fabs nor to the the impact of.
Cable harnesses, which are heavily manufactured in Ukraine, and indeed in Russia.
What we've seen from our discussions with our with our own direct customers, who are also very active in that area that they've been extremely agile and moving that into areas where.
Either they could continue to manufacture out of the Ukraine in the west of Ukraine, or they've moved it to other factories very quickly within a matter of weeks. So.
I mean, it's still a very tight is gonna be a challenging environment I would say at least for the next two quarters that we can see.
But certainly.
It's nowhere near as bad as it was a year ago.
Next question, Craig Ellis with B Riley. Please go ahead.
Yes, thanks for taking the question and congratulations on the good execution guys. Donald I wanted to start with you and see if I could get you to give us a little bit more color on what you're seeing with.
With the customers that are sampling Syria, just given how important that product is strategically can you give us some insights on <unk>.
What's resonating with customers and how they're how they're testing and reacting to the product and the solution.
Oh, well I mean, the reaction has been phenomenal really I mean, we've been heavily oversubscribed.
In terms of getting samples into the market.
We believe that the reason for that is the combination of.
Super High end digital back end DSP together with our advanced mixed signal technology.
Really there in the process of trying to find a way to build their systems around it as quickly as they possibly can.
We're really in terms of.
A free to market solution, where kind of the only game in town in that space.
And just.
<unk> of people who've been struggling along with whatever thousand dollar based FPGA systems has been absolutely phenomenal that makes a huge difference in the cost and in fact will.
Will the <unk> and laser technology, which will deploy alongside it.
Got it and a somewhat related question. The company has completed her action the Adi similar deal. The on radar deal can you just give us some qualitative color on how long do you think the integration of those deals just going in and then use that as a springboard to talk about your firm.
Their appetite for M&A and and to the extent that you would like to do something is there a particular size range that you're looking at or a particular technology that you would be looking for.
Yeah, I mean integrations have gone really well.
<unk> was completely flawlessly, we're a very mature company.
Very well run from the get go so the integration was was really seamless.
And likewise, the on semi and familiar with teams.
They were.
Part of our radar offering and.
Simply the kind of proof is in the pudding in the pudding is already there to be eaten.
We've we've won this truly massive design win on the back of that.
We always take the philosophy of building kind of a let's say a wrapper team around in terms of the integration so that theres.
Ease of access to our systems and we tried to integrate where we can make an improvement and we tried to leave things be where they're working well so.
I mean, we've been very pleased with how that's gone to date.
On top of that in terms of targets that we're looking for in the future.
We really have pretty much everything that we need in order to execute the plan in front of US. However, we will continue to be opportunistic in the market and given the the overall market macro condition at the moment, we are beginning to see.
Some attractive opportunities out there, but because of the fact that there is let's say more on offer right now.
It allows us to set the bar a barrier to entry into India that much higher such that we can we can only kind of improve the gene pool is.
As a result of that.
We're not looking for specific technologies at this point.
There are always exceptions to that rule, but we are where we are we may choose to to conduct a transaction is going to be something that's going to be.
Very financially responsible and immediately accretive to the to the to the whole deal.
Next question comes from Cody Acree with benchmark.
Yeah, Thanks, guys, congratulations and thanks for taking my questions.
Donald if you could just if you could add any color to your first half revenue performance either by product or application or my customer. If you can give us just any degree of detail.
Yeah.
We tend not to segment either by customer by product and in actual fact.
The drive for growth has been uniform across all of our products, which are differentiated each in their own way.
And we will continue to see that.
As we go forward the book of business that we built as a private company.
Is the thing that's fueling that and the design win activity and the new news that we bring here every quarter quarter on quarter.
<unk> is really only going to fuel the out years and on top of that so.
Again, I mean, we remain very confident in and what we intend to do here I think.
We're in a very good position, we've proven now over four quarters that we beat and raise and we execute as we say we're going to do.
I mean generally speaking.
So we're very happy with all the product here is that we have and all the customer relations that we have.
And so far everything that we're feeling from the market by the market I mean, our customer base has been super positive in all directions.
That's great. Thank you and then.
Just any.
In.
Cross the applicability of your products into the industrial markets.
Obviously, they have a much more attractive design cycle.
Any thoughts there.
We get asked a lot.
We usually do it because there is sort of a kinship between industrial and automotive.
But we.
And we feel really it's in.
And the Companys best interest and also in our customers' best interests that we focus heavily on automotive for.
For the foreseeable future.
That gives a.
A certain power to the.
For the company and the respect that we do the right things for our customer base and we're not conflicted by some other customer base, which may have different differing different goals shall I say.
Thank you I would like to turn the floor.
For closing comments.
Yeah.
Well, thanks, everybody for attending.
See you next quarter and in the interim to you at the next Investor conferences that we'll be announcing in due course, thanks again.
This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.
Okay.
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Okay.
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