Q2 2022 Silicom Ltd Earnings Call
Followed by Ron who will provide the analysis of the financials. We will then turn over the call for question and answer session and with that I would now like to hand, the call over to Ron Iran. Please go ahead.
Thank you Kenny.
I would like to welcome all of you to our financial results Conference call discussing our second quarter of 2022 results. This is my first quarter as CEO of silicones, if they're working for many years as COO of Silicon and CEO of our North American subsidiary.
I would like to thank the board for their confidence in my ability to lead critical ahead shaky Alba, our former CEO still remains involved in Silicon is executive Vice Chairman. My aim is to continue and build upon the success. He is about the silicon over the many years.
Now to provide a short summary of the results for the quarter. We are very pleased with our continued solid performance for the second quarter of 2020 to the second quarter was a period of growth in revenues margins and EPS driven by stronger than ever demand for our product coupled with attention to operational efficiency.
We demonstrated 13% revenue growth year over year to $30 million to $34 million.
At the center of our expected guidance range for the second quarter.
Furthermore quarter end backlog stands at record levels for cynical.
Our revenue growth continues to reflect the accelerating transition of mainstream players from industrial and online retail giants to telcos and service providers.
This aggregated and decoupled networks driving demand for silicones, enabling solution.
With significantly improved improved gross and operating margins. We are very pleased to report our seventh quarter of continued profitability with net income of $4 7 million.
Which was up which was up 61% year over year.
All of that resulted in earnings per share of <unk> 70.
A very significant 67% increase year over year.
We are all the more pleased with those results. Despite the continued backgrounds of ongoing component shortages and site and tight supply chains and.
And had it not been for the shortages revenues for us with its been strongly hire we.
We are maintaining a strong delivery rate in the face of the global shortages, primarily through determined product and operational innovation and careful inventory management.
As you know we have worked very hard to overcome the global component shortages situations using more readily available components, where possible and improving our internal manufacturing processes maximizing what we are able to manufacture and deliver to customers.
Strong year over year growth in revenue solid improvements in gross and operating margins and ultimately strong growing strong profit growth shows that we have indeed been successful the.
The good news is that to us it appears that the global component Georges shortages has now stabilized and is not worsening and.
And we are working on the assumption of an improvement in competent available availability during the first half of 2023.
The exceptionally strong market demand for our product as broad as it is across our full product range, while last quarter, we discussed reaching our highest ever backlog as of Q2 and our backlog increased further I want to point out that our inventory growth has been a strategic move on our part it was driven by the high market demand that we're experiencing.
<unk> and record backlog level on one hand, and the global component shortages on the other the strongly increased inventory is designed to support the expected level of upcoming product sales in coming quarters and to ensure we maintain internal availability of components and parts.
We see this inventory position as a strategic asset and significant competitive advantage. It allows us to serve our existing customers better delivering products, which are not easily available today, while attracting new customers and new business, which will have difficulty finding products elsewhere in today's market. This strategy will provide an excellent long term return.
In terms of our forward expectations, we believe that our inventory will peak in the coming few months and we will allow us to start declining towards year end, depending on the development in ore in the ongoing component component shortages.
We continue to capitalize on the most significant transitions of architecture in recent history, the trends of desegregation in decoupling the markets to which those trends play into the most notably the current fast growing edge markets and the developing <unk> market both markets in which we have very strong capabilities in a competitive edge.
The AG market in general, including the SD Wan segment of that market already contribute significantly significantly to our revenues, which is further demonstrated by one of our recent wins and remains in growth phase.
<unk> market is still in the early introduction phase.
In the last several years, we have built a full circle of major U S and European telcos are adopting our products as part of their desegregation methodology. This success makes us optimistic about our future potential, especially with telcos and service providers, which has been endorsing the disaggregated and decoupling approach. We believe its still early days and the leading market sectors.
But we are active in.
Discussion continues with a broad variety of telcos networking equipment providers and partners regarding exciting new opportunities.
I would like to discuss our recent design win we announced in May.
An existing customer one of the largest vendors in the SD Wan market place the new $15 million in initial purchase order for <unk> Smart platform at the same time, the customer informed us that they expect to order at a level of $25 million per year for the next several years, we see this win as a vote of.
In our company and its products, reflecting our product innovation quality features and performance as well as the unparalleled level of the service that we provide to our customers.
This acceleration of our business with one of the major customers reflect booming global demand for SD Wan solutions, whereby companies of all types from telcos to industrials to retail are increasingly adopting.
As we predicted when we initiated our SD Wan strategy five years ago. This space is now becoming mainstream with the growing momentum of disaggregated and decoupled architectures, driving more and larger design wins for silicon in each and every quarter.
We believe and feedback from the from the market confirms that this trend will continue positioning us as a growing provider of must have enabling building blocks for today's and Tomorrow's data networks.
In terms of our guidance for the third quarter, we expect to show continued growth with revenues at between 38 and $40 million.
Which at the midpoint represents growth of approximately 18% over that of the third quarter of 2021.
I would note that this growth rate takes into account the continued component shortages situation and our estimates as to the level of our success and indeed mitigating at Adobe.
No such situations, our forecast would have been significantly higher given the sheer size of our pipeline and the speed with which our markets are growing we believe we remain positioned for strong multiyear growth.
In summary, we remain very pleased with our performance in the second quarter and the first half of 2022, even despite the ongoing component shortages. We continue standby our expectations more broadly are focused on some of the fastest growing markets in the networking space, which are developing under the trends, which we had correctly predicted and positioned ourselves for.
As well as our current long and deep pipeline makes us further optimistic.
Looking forward given the all time record level of our pipeline and our reputation as a can deliver provider. Despite challenges all compounded by the speed with which our target markets are developing.
We are well positioned for continued double digit compound growth rates in the years ahead with that I will now hand over the call to run for a detailed review of the quarter results, Iran. Please go ahead.
Thank you Leon and Hello, everyone.
Revenues for the second quarter, 2022 were $34 $2 million compared with revenues of $33 million as reported in the second quarter of last year.
Our geographical revenue breakdown over the last 12 months were as follows North America, 69%, Europe and Israel, 25%.
East and rest of the world 6%.
During the last 12 months, our top three customers together accounted for about 25% of our revenue.
I will be presenting the rest of the financial results on a non-GAAP basis, which excludes the noncash compensation expenses in respect of auctions and rsum.
Wanted to directors officers and employees.
Musician related adjustments as well as lease liabilities financial income.
For the full reconciliation from GAAP to non-GAAP numbers. Please refer to the press release, we issued earlier today.
Gross profit for the second quarter of 2022 was $12 $3 million.
Renting and gross margin of 36% at the top of the range of our gross margin guidance of 32% to 36% and compared to a gross profit of $10 $8 million or gross margin of 35, 8% in the second quarter.
Our 2021.
The variance in the gross margin is a function of the specific product mix sold in the quarter.
Operating expenses in the second quarter of 2022 were $7 3 million compared to seven.
$3 million reported in the second quarter of 2021.
Operating income for the second quarter of 2022 was $5 million, representing an operating margin of 14, 6% and an increase of 39% compared to operating income.
$3 6 million as reported in the second quarter of 2021.
Net income for the second quarter was $4 $7 million, representing a net margin of 13, 8% and an increase of 61% compared to net income of $2 $9 million in the second quarter of 2021.
Yeah.
Earnings per diluted share in the quarter.
We're 70 67.
7% increase compared with EPS of <unk> 42 as.
As reported in the second quarter of last year.
Now turning to the balance sheet as of June 32022, the company's cash cash equivalence and marketable securities totaled $48 1 million with no debt or $7 17.
Per outstanding share.
That ends my summary, I would like to hand back over to the operator for question and answer session.
Operator.
Thank you ladies and gentlemen at this time, we will begin the question and answer session. You have a question. Please press star one if you wish to cancel your request. Please press star two.
You are using speaker equipment kind of lift the handset before pressing the numbers.
Questions will be pulled in the order. They are received please standby while we poll for your questions.
The first question is from Alex Henderson of Needham and company. Please go ahead.
Well, let me start off not what the question, but rather than the stable here and.
And I understand you have been a major driver of the Companys development as the newer products and direction of the company that has been so successful in.
Certainly seems like a.
A clear.
Correct move too.
Right.
Bring you up to the CEO job and congratulations on that and it's clearly well deserved.
Thank you very much Alex.
More than welcome.
So.
I wanted to just talk a little bit about the cost side of the equation a little bit.
The strong dollar is a major challenge to <unk>.
National revenues.
Just in dollars because of the price increases implies to two customers.
But.
You also benefit tremendously from the shekel another currencies when your Opex. So I'm looking at the numbers for the June quarter, and they're actually down 370, okay.
Our opex.
Which we had not really expected that kind of decline. So I was wondering if you could talk about.
That's a temporary blip and that it'll be up again as we go into the second half of the year.
How should we think about.
Yes.
The declines in all three items.
R&D sales and marketing G&A.
Yeah, absolutely. So I mean, the impact really is the dollar.
Since its hard for us to predict what would be with the dollar in the future.
Don't know to answer that right now, but I can say our structure remains pretty much the same.
We're not increasing too much or definitely not decreasing if we'll have significant design wins in may increase more but right now the structure is pretty much the same and the impact is the dollar itself.
So we should be using about the same level of spending in the back half of the year is in the front.
Front half of the year or in the June .
June quarter.
Yes, I would expect that again the function would be the dollar itself, but from a level of investment in silicon. Yes. The answer is it's going to be the same.
So assuming a flat dollar of it should be sequentially fairly stable.
Okay.
Going back to the gross margins, obviously, you had a nice pop a 36% obviously, that's driven by predominantly by mix.
Should we be assuming it returns back towards that 34%.
34, 5% level, where you'd been normalized.
Quarters.
And normalizes in the back half.
So we still expect to be in the same range, we've always been in the 32 to 36.
This quarter, specifically was there was a mix of products that caused it to go a little bit higher but we still believe we're in the same range of 32 to 36.
Alright.
Broadly speaking.
Macro headwinds are the primary issue that people are dealing with.
And a lot of the networking companies.
From Cisco Juniper extreme.
Just as an example, so theyre running backlogs in that room.
40% to 100% of.
Annual product revenues and that gives them a lot of inflation I know you guys have had a lot of wins, but it really isn't a hard backlog in the same way.
What it is.
<unk> companies such components.
Driven by projects and programs that could easily be deferred delayed or stretched.
Can you talk a little bit about.
Yes.
The implications of the macro versus.
The projects that you have how firm are they what are the major.
Project leader has been telling you about their intention to continue to deploy on schedule or maybe slow down their deployments because of the macro environment.
And specifically how much of that is U S centric projects versus international.
So at the moment, we do not see any immediate impact.
One I mean.
Specifically in Q3.
And even more than that we don't see an immediate impact, but we are feeling the heartbeat and monitoring the state is all the time, we're discussing with our customers very openly on that.
We are hearing what they see.
And at the moment at least what we see is we don't see any impact at the moment.
And we think that our highest ever backlog also shows that the demand and the fact that the last quarter. We said, it's the highest quarter and now we say again that we have the highest ever backlog again, so that means that the orders that came in are continuing to come in and from what we see and what we talk with our customers today. They continue and their plan is.
To continue with the plans that we have with them.
Just to clarify on the bank loan.
A lot of companies are combined backlog numbers in order to get a sense of.
How large it is relative to the scope of their business.
Is it <unk>.
Ultimately, we think that you are looking at 20% to 50% of product annual product sales and backlog.
While we don't provide the exact numbers I can tell you that the growth from previous quarter was quite significant but we're not providing those exact numbers.
Alright.
One more question on the Shekel exchange rates can you just talk about how youre hedged.
Both in terms of.
Our operating costs.
As well as receivables.
The answer is very simple, we did we do not hedge anything.
Alright, So you immediately benefit from the sharp decline in the shekel and that's why your Opex system down.
Yeah.
Any thoughts on changing the tax rate or interest income line share count as we move forward.
And no no change indeed.
The tax percentage in the quarter was.
Somewhat slower.
Compared to the average, but we still believe in the.
Around 15% range.
Alright, great.
I'll cede the floor.
At this point, but.
We'll come back into the queue. So.
<unk> opportunity.
Okay.
Operator, let's move on to the next question. The next question is from John Jeff Meyers from Cobia capital. Please go ahead.
Hi, guys. Thank you congratulations on a nice quarter. Just a quick question did you guys buy back any stock during the quarter and if so how much.
Yes, the buyback plan ended in <unk> this quarter.
Yeah.
How much in total in the third buyback plan. It was about 12 5 million.
And is there a thought to renew that I guess going forward.
So when we look at our cash and what's the best use for that cash at the moment, we feel that the best thing to do that is to build.
Build it into our inventory so we can be in the best position, we can in order to build products and provide them to our customers.
So that is our plan at the moment.
Got it okay. Thank you guys.
Okay.
Let's move to the next question.
Yes. The next question is from Shawn Boyd of next Mark Capital. Please go ahead.
Yeah.
Good morning can you hear me okay, yes.
Great.
I understand.
Exact numbers here on the backlog.
But perhaps you can help us with.
Okay.
Given what's going on in the macro over the past couple of quarters here are your bookings.
And your excitement in your pipeline continuing to be strong as they were or has that helped at all and how do you think that rolls out into Q3. Thank you.
So yes, I mean, we as I said before we discuss with our customers consistently we're very obsessed with speaking with our customers to fill while they are doing and now, especially that we're traveling a lot again and meeting our customers face to face, we even feel it more and we see that yes, we see the pipeline. We believe it is very strong.
And we believe that all the design wins that we collected over the last few quarters, which are starting to ramp up some more and some some less.
We'll continue to ramp up so we believe very strongly in our pipeline and in our backlog.
Okay very good very good so taking that to the next level and thinking about.
That product.
Going through the P&L and I'm starting to see shipments there on the couponing constraints, you mentioned that the situation has stabilized and no longer worsening.
Now, maybe we're just kind of at.
That level of it but not getting better.
Give us more color on that what exactly are you seeing that tells you that what gives you the confidence that we will start to see those constraints ease.
I guess, if I heard it right you think they're easing.
Later in Q3 and Q4.
Any more color you can give us specifically on that would be helpful.
First of all we don't see that easing yet we see that it's not getting worse and our assumption is that it will remain until the end of the year at least it will remain as it is right now.
We hope that we'll start seeing improvement in 2023, but at least for 2022, our assumption and what we see right now is that it's going to be hopefully flat and not worse. So the.
And the way that we understand the market is again is a lot of work.
Talking with suppliers talking with suppliers suppliers talking with with.
With silicon vendors talking with other manufacturers in the market.
Talking with distributors, just trying to understand what they see in their backlog do they see push outs still are there.
Are you seeing that the lead times of the covenants going down or up or flat and based on all of that we kind of.
Get an understanding of what we believe is going to happen in the component market.
And our assumption as I said for now is that 2022 will not get worse and that we are now going to be let's say about flat with the lead times and the availability of the product and in 2023, we hope to see improvement.
Okay and just last question along this line.
So far have you had any cancellations have you had any customers where you had major wins.
Given the weaker macro and interesting.
Time delays that are caused by these component constraints or they've.
Basically pulled off and they said, okay, we're going to.
Revamp. These plants are going to go elsewhere or we're just not going to do this program.
Definitely north of the brake, France, who may have some insignificant here and there, but none of our major design wins is nowhere near the situation.
Very good.
Thank you for the thank.
Thank you for the additional color guys.
Thank you sure. Thank you.
The next question is a follow up question from Alex Henderson of Needham and company. Please go ahead.
Alright, I was hoping to talk a little bit about.
The employment.
<unk> that you're in.
To what extent, you're seeing churn in staffing I assume that it's very stable because thats. The history of the company and I know people tend to be there a long time, but have you seen any acceleration in churn and.
When do you have annual bonus increases.
What are you doing on the compensation side, obviously the.
Strong dollar is volatile creating inflation.
In various geographies that needs to be offset with compensation. So how should we think about the compensation going up.
Given the backdrop.
We are very pleased with the situation I mean, we do not see significant churn even at all I would say I mean.
Compared to what we see from from around Us and certain companies, we're very pleased with that.
And from a bonus perspective compensation perspective, we will continue with the policy that pretty much. We always had and then continuing to understand where we are compared to the market, but we don't expect to see any significant impact on that on the P&L or anything that's what.
The annual compensation reviews.
Escalation generally the March quarter is that correct.
Usually we do it at year end, but it depends on the year and we would definitely do it at year end.
But it changes from year to year sometimes.
Okay.
Going back to the component side of it.
Can you talk a little bit about what's going on with Europe .
PGA products are you seeing any traction.
With those.
The semi market has been.
Complicated, but it's hard to for us to put that into context with yourself with your FPGA. So has there been any improvement there.
Yes, I mean, theres definitely a few a few developments we continue our very close work with Intel on that.
Have some opportunities that came maybe it's part of covered in some as we mentioned some other suppliers unable to provide product to their customers. So they are turning to us definitely there.
Some opportunities here some some wins, we managed to do over the last few months.
And we expect it to be growth, but the growth should be.
Smaller than some other areas of our business, but we definitely see growth there as well.
Another question around the trajectory of the top line.
You've had a pretty nice pop into the fourth quarter and then Susan.
Soft March quarter.
The supply constraints.
Make that.
Pattern, a little bit less.
It's likely.
Should we be thinking about the fourth quarter as being.
More of a continuation of the sequential.
Pattern over the course of the year and maybe not as much of a pop in the fourth quarter or as much as the decline in the first quarter, how should we be thinking about that piece of the equation, which is I think more.
My chain driven than demand driven.
We expect that to continue I would say pretty much at the same rate, we do not see a huge pulp coming in as I said that we do not expect.
The supply chain situation two is completely in Q4 and suddenly we will have all the component that we need to build all the products that we want so we think it's going to be there's going to be growth, it's going to be pretty much at the same level that we've seen so far.
Significant is in supply chain, we do not expect before 2023. So I expect this trend to continue of growth.
Pretty much similar to what we've seen so far.
So that seasonality into the first quarter the sequential decline.
Historically seen which has been relatively steep is that something that we should anticipate again or is that.
Yeah.
<unk>.
Full availability of parts make that smoother or into the first quarter.
I think it's too early for us to say at the moment about Q1, what our expectations are.
Alright.
Okay.
Yes.
The next question is from Robert John .
Harold investment. Please go ahead.
Good morning would you mind.
Talking a little bit more about the.
Two product areas and what Youre seeing there demand wise.
And also could you talk a bit more about the competitive landscape and what youre seeing there.
Sure.
So first of all I'll talk about the edge. So the edge is.
Probably one of the highest fastest growing.
Domains that we have.
We've seen that growing quite significantly over the last few years, and we think thats going to be one of our main.
Drivers to for growth in the next few years as well.
And there we see that we definitely have an advantage our close relationship with the silicon vendors are very professional team our ability to supply product in this very.
Crazy environment of supply issues.
Forces us to solve problems all the times, including engineering problems are doing redesigns as we go all of that has put us in a very good position to continue our growth.
We believe we also have a lot of innovation in that area, which makes customers wants to work with us.
And we see that with more and more design wins in this area and we definitely believe this will continue.
As for the other area I'm, assuming that you're referring to the <unk> or on that market is developing it's really in the early stages as everyone knows with everything all the reports in the media etcetera that.
Many telcos are now in the phase of a POC or initial deployment. So we're definitely part of a lot of those and we think it will also grow over the next few years, but for that market, it's a little bit earlier, even than the edge market that I discussed a little a few minutes before.
Terrific and competitively bidding.
And the two markets or anything incremental or.
Yeah.
I mean definitely we see the advantage I mean, we we made I mean I think in the edge market, specifically, we have become a very known name everyone knows silicon in that domain wherever those.
Yeah.
An RFP or anything of that or that are bidding. We are there we have a broad range of products, we have a strong roadmap.
<unk> goes forward with <unk> in an oral market so.
We feel very strong about it.
And so.
Your customers are looking for a single source.
Multiple sources and how are they.
You and telecom versus other.
Other providers in terms of.
Having a consistent supply.
We're not the only one in the market and there is there is competition there.
But our close relationship with the silicon vendors in the.
The fact that in many cases, we are the first to the market and that we are very innovative in our products that we come with.
Gives us an advantage and obviously, our obsession with making our customers happy and the fact that we are able to supply in and go a long way in order to provide our customers with products are positioning us well, but definitely there is competition there.
Yeah.
Okay pricing.
Is it.
People are going up with.
Shortage of components are.
So we I mean, we're not making significant changes to that but as you can see from our margins. We are still in the same range. We think we will remain in the same range.
So no significant impact due to that.
Yeah.
That you can see that but yeah competitively.
I was wondering what you're seeing there.
It's a challenging environment definitely and.
We're not the only one suffering from that our competition is in a similar situation. So all of US are trying to do the best and I think.
That is also situation right now where the customers are measuring crude toward those customers or suppliers were able to deliver.
And they can trust in the long term and.
But yes, it's a very challenging environment from a price perspective.
A supply perspective.
And I think it will remain so at least until the end of the year and then later on as well.
Great last question is you said that the fact GRM.
So just starting to hit mainstream but early I mean.
What is your thought in terms of.
When it starts to ramp up.
Is there is a component availability is there.
Jeff.
Yep.
Yes.
What do you think is going to be the milestone to really.
It enabled us market to start.
The ramp up a bit more.
I think it's a combination I mean on the one side it component, but it's not I wouldn't say this is the limiting factor.
It's it's in technology that is ramping up there is the capex versus opex approach here that many telcos are very interested in and want to adopt and there I don't think theres a single telco in the world was not looking into <unk> some of them in more advanced stages last summer looking at.
At the very big guys to see what Theyre doing and try to follow them later on but its still as I said, it's still a little bit early days for that 2023 will be bigger, but I think we will start seeing more and more deployments to 2023 2024 and beyond.
Thank you very much thank.
Thank you.
If there are any additional questions. Please press star one.
To cancel your request please press star two.
Please standby, while we poll for more questions.
Yes.
The next question is a follow up question from Shawn Boyd of next Mark Capital. Please go ahead.
Thanks for the follow up I'll keep it brief.
Real quick on the inventory build can you just talk a little bit about whats in there and.
The trajectory of that I think you'd indicated we should start to see that drop by the end of the year, but.
What exactly have you built up in there and how is that helping in terms of kind of deep for communities component constraints.
Sure. So most of it is electronic components, because that's where we've been struggling the most it's not parts, which have shortly turn that we can build quickly and.
And.
Metal part or other things that are easy to get it to the electronic parts that the entire industry is fighting to get some of those parts of elite Diamond 60 weeks and more.
And our strategy has been to build inventory. So we can react and support our customers. That's mainly what you would find in the inventory and we think that.
We are now.
Around the peak I would say of the inventory and depending on how the market will evolve, but if it will continue as we expected right now to be kind of flat until the end of the year and then is towards 2023, we think that towards the end of the year, we will start seeing it dropping.
And at some point, we'll probably going to go back to normal levels, but right. Now we are we think it's still going to be a little high for a while longer and then go down.
Yeah.
Got it.
Yeah, Hello field working capital.
Last question for me.
Incremental operating margins.
Just rough math has me at about 25% incremental operating margin last year.
Yeah, certainly bounces around quarter to quarter, but for the first half of this year versus first half of last year about the same.
Is that a good number to be thinking about going forward or can we think about something even higher because these.
If you're a component constraints and design wins start to ramp it.
Seems like scale with health now, let's talk about the 25% operating incremental operating margin.
And we have some leverage in the model, but we need to look at the dollar in and other factors.
In order to really understand where it's going.
Okay.
Thanks, so much gentlemen.
<unk>.
Okay.
Okay.
All right awesome.
The next question is from Alex Henderson of Needham.
<unk> company. Please go ahead.
Yes, just one more quick one.
So.
One of the key metrics.
Decommit.
From supply chain have you seen any over the last quarter.
Have you seen any during the current quarter or whats the situation relative to supplier decommit.
Yes, those still exists definitely I mean, when we are who we are saying that the situation is flooded with supply chain. He does not mean that we're not getting pushed out just mean that the number of push outs were getting is not higher than what we got in previous quarters, but still I mean, we're in situations that from time to time, we do.
Get the commit on a certain component and now we not start.
To find a solution for that either by an alternative or redesign or proposing a different product for the customer and yet it still happens from time to time and we still expect it to continue to happen until the end of the year and maybe even a little bit towards 2023, but.
But may be at lower rates at that point, but still this is a reality and it's an uphill battle every day to deliver the product to our customers.
Alright, so at this point in time.
In the third quarter.
It had been.
As expected no surprises there so far.
While every day committed to surprise probably but.
But it's not a surprise as to how many decommit, we get I would say.
Okay. Thank you.
Okay.
There are no further questions at this time before I ask Mr. Eisenberg to go ahead with his closing statement I would like to remind participants that a replay of this call will be available by tomorrow on the telecoms website www dot silicon Dash, you with a dot com Mr. Eisenman.
Would you like to make your concluding statement.
Thank you operator, thank you everybody for joining the call. We wish you all health and we look forward to hosting you on our next call in three months time good day.
Thank you. This concludes silicon <unk> second quarter 2022 results conference call. Thank you for your participation and then go ahead and disconnect.
Yeah.
[music].