Q3 2022 Navitas Semiconductor Corp Earnings Call

Hello, and thank you for standing by my name is Regina and I will be your conference operator today at this time I would like to welcome everyone to the Navy pass semiconductor third quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and Dan.

Session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question Press Star One again I would now like to turn the conference over to Steven Oliver Vice President of corporate marketing and Investor Relations. Please go ahead good afternoon.

I'm, Steven I'll have our vice president of corporate marketing and Investor Relations.

Thank you for joining now semiconductors third quarter results conference call.

I'm joined today by Gene Sheridan, our chairman, President CEO and co founder and Ron Shelton.

So treasurer.

A replay of this webcast will be available on our website approximately one hour. Following this conference call.

And the recorded webcast will be available for approximately 30 days following this conference call.

Additional information related to our business is also posted on the Investor Relations section of our website. Our earnings release includes non-GAAP financial measures reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures are included in <unk> third quarter earnings release and also post.

On our website in the Investor Relations section.

In this conference call, we will make forward looking statements about future events or about the future financial performance of <unk>, including.

Acquisitions.

You can identify these statements by words like we expect we believe or similar terms, we wish to caution you that such forward looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from expectations expressed in our forward looking statements.

Of course in factors that can affect business, including factors that could cause actual results to differ from our forward. Looking statements are described in our earnings release. Please also refer to the risk factors affecting the avid SaaS discussed.

These filings, including our annual report on Form 10-K, and our third quarter report, which we expect to file on November 14th.

Our estimates or other forward looking statements may change and <unk> assumes no obligation to update forward looking statements to reflect actual results changed assumptions or other events that may occur except as required by law.

Now over to Jean Sheridan CEO .

Thank you, Steve and thanks to everyone for attending today's call I'd also like to thank you for investors for meeting up in New York in September for investors unable to attend our Investor meeting we have posted a video on slides on our IR website.

<unk> Q3 results for revenue and expenses are in line with the guidance given in our Q2 call.

Q3 revenue was $10 2 million up 19% sequentially from $8 6 million in Q2.

non-GAAP gross margin at 38, 4% was within range, but given one time expenses of $3 5 million, which included some inventory write downs, our GAAP gross margin was significantly lower.

Despite the significant continued slowdown in the mobile space. We are very pleased with our quarterly growth and anticipate a similar growth rate for Q4.

Both <unk> and our newly acquired Silicon Carbide business continues to show significant growth prospects fueled by our excellent progress in developing and launching new products.

Accelerating customer adoption with our unique system design center capabilities, and expanding rapidly into new markets regions and customers.

We have now shipped over 65 million Nics with zero reported gain field failures.

And only about three months since acquiring Genesis, we have added over 50, new silicon carbide opportunities, which adds to our strong revenue growth expected for next year.

Revenues continue to diversify geographically as we ramp new business in Europe , The U S, Taiwan, and Korea, which are expected to create a balanced regional mix of revenues this year and into next.

China centric mobile softness is anticipated to continue in Q4, and Q1, and we will continue to monitor closely and prepare to capitalize on the eventual recovery.

Despite the mobile market softness customer design win progress continues at a rapid pace with another 17 Gan based Chargers launched to the market in Q3, including record setting Xiaomi ultrafast Chargers that deliver over 200 watts charging from 1% to 100% in only nine minutes.

These launches also include exciting new Gan Chargers for many other leading brands such as Lenovo acre Mojo and eating leading retail channels like best buy and their insignia brand.

Also critical to our mobile business as our new Gen. Four Gan platform, which has been extremely well received with over 20 customer designs in development, including six of the top 10 mobile players already designing with our Gen. Four technology, our new market focus on motor Jive for home appliances, and industrial applications continues to increase.

Adoption of our latest again have franchisees and over 15, new motor drive customer projects in development.

Data center applications are ramping faster than expected now with many customer projects in development.

One project includes an initial $5 million purchase order already received for our new high powered Georg NFC technology to support the customers' expected production ramp starting in the middle of 2023.

In the solar market Janet seeking business development activities continue with two leading residential solar players that will transition from silicon to again starting in 2024.

Solar is already a significant portion of our silicon carbide business than we are experiencing strong demand across all customers, which include fund growth.

Aps and.

And many others.

<unk> dedicated EV design center is quickly integrated the new Genesis portfolio with the existing <unk> range and updated our EV powertrain platform Road map. There are now four onboard charger platform in development supporting eight different customer projects that are on track to drive significant revenue ramp by 2025.

Yes.

Last week, we announced a new joint system design center with leading EV systems provider directory.

The rent as part of the <unk> group, which manages audio brands that include Zika Volvo Polestar and Lotus.

This joint Lob will create next generation power systems for Gili Evs utilizing other test scan and silicon carbide Silicon carbide EDI continues to be a significant portion of our silicon carbide revenues.

The acquisition, we have added 22, new <unk> silicon carbide customer projects and we're seeing strong growth across all customers that include BYD Geely General Motors job land Rover, Jaguar Shinri and many others.

In just the past 45 days, while the tops assigned a long term supplier agreement for our Silicon carbide wafers, which enables a five <unk> increase in our film carbon capacity in the next year.

Given the demand for our Silicon carbide devices continues to outstrip our supply. This is a major achievement that will allow us to accelerate the growth for our silicon carbide business for 2023 and beyond.

In addition to the strong secular trends that are driving the existing $20 billion per year power semiconductor market to move from silicon to Gan on silicon carbide.

Also very excited about two major U S initiatives first the chip stack will bring over $50 billion in investments for the U S semi industry and we believe Gan on Silicon carbide are perfect candidates to leverage such investments and dramatically improve cost and capacities in coming years.

Second the $300 billion plus investments in the inflation reduction.

Focused solely on accelerating clean energy and climate change initiatives perfectly aligns to another top focus on sustainable energy.

And EV infrastructure and in particular, our spotlight on upgrading homes from fossil fuels to clean energy efficient electricity based home appliances.

To summarize despite the near term mobile softness and the macro economic headwinds, we are very happy with our near term and long term growth expectations. In Gan. This includes upsides, we're seeing in Datacenters and in motor drives while we are executing on schedule with our new Gen four platform and longer term expansion into solar and EDI.

And Philippine Carbide, we're seeing upsides and a growing backlog across all segments that includes EDI solar energy storage and industrial segments, all of which will significantly benefit from the long term supply agreements that we've recently signed to support this growth.

With that let me turn it over to Ron Shelton our CFO .

Thanks, Jane and thanks, everyone for joining us today.

My comments today I'll first take you through our third quarter results and then walk you through our outlook for the fourth quarter and then I'll close with some comments about what we currently see for 2023.

GAAP revenues for the quarter grew to $10 2 million and represents 82% growth from third quarter of 2021.

It was in line with our guidance, while we continued to see the impact of the slowdown in the mobile market that is impacting the semi conductor industry broadly. This was offset by gains we've made in diversifying our end markets and customer base.

Strong demand for our new Silicon carbide products.

GAAP gross margin was three 8% in the third quarter and non-GAAP gross margins were 34%, which was within the range of guidance, we provided last quarter.

We had several GAAP adjustments during the quarter, which impacted GAAP gross margins. There were comprised primarily of an adjustment for a step up in the value of inventory related to the Genesee acquisition totaling approximately $600000 in our reserve for inventory of $2 $8 million as we focus our efforts on <unk>.

Power Ultra fast mobile Chargers datacenter solar EV motor drive markets.

Total non-GAAP operating expenses were $14 2 million for the third quarter of 2022.

Our non-GAAP SG&A expense was $709 million and non-GAAP R&D was $6 3 million in the third quarter of 2022.

non-GAAP operating expenses were slightly higher than the midpoint of our guidance and reflect a partial quarter of expenses associated with the <unk> acquisition and higher spending associated with new product development.

While we will be prudent in how and where we invest we will continue to make targeted investments in our business, where we derive the most long term value.

Putting all this together the non-GAAP loss from operations was $10 $3 million compared to a loss from operations of $6 5 million in the third quarter of 2021, as we invest simultaneously across new markets in this phase of our company's growth.

Weighted average basic and diluted share count for the third quarter was 138 5 million shares turning to the balance sheet. It continues to remain very strong with high levels of liquidity.

Cash and cash equivalents at quarter end were $124 8 million.

Accounts receivable was $10 9 million compared to $9 $4 million in the prior quarter, reflecting improved days sales outstanding inventory rose to approximately $17 million compared to $14 million in the prior quarter and is comprised of both inventory related to Genesis because we continue to.

Increased supply to meet end market demand in the silicon carbide market.

The initial inventory builds for new products.

Confident that overtime, our inventory levels will trend towards our long term target for inventory turns of 3% to four turns.

Moving on to guidance for the fourth quarter of 2022, GAAP revenues are expected to grow to between 11% and $13 million, that's compared to $7 3 million in the fourth quarter of 2021 at the midpoint growth would be 64% year over year and 17% sequentially.

Our guidance for the quarter includes a full quarter of operations for the Genesis business and reflects.

Very strong demand for those products at the same time, we continue to remain cautious about the China mobile end markets and have reflected that in our revenue guidance.

Gross margin for the fourth quarter is expected to be approximately 40% plus or minus 1% as our mix of silicon carbide products becomes a greater share of overall revenue.

As we noted last quarter, we continue to believe that gross margins will expand over the next few quarters.

As we transition to new game products and as the revenue contribution from our Silicon carbide products continues to grow.

In total our non-GAAP operating expenses in Q4 are expected to be approximately $17 $5 million plus or minus 2%.

And this excludes stock based compensation and amortization of intangible assets the sequential increases related to a full quarter of Genesis operations and continued investment in that business.

Increases in compensation types of bonuses paid to China employees, which is effectively an additional month of salary, which is standard in China and.

And further investments in R&D, new products and added design center activity around future growth opportunities. However, we do expect the spending growth rate to moderate as we enter 2023.

As all of you know in the current environment multi quarter projections are increasingly challenging that.

That said based on our existing backlog, new designing activities anticipated new product introductions and other identified opportunities. We believe we have a line of sight to potentially double revenue in 2023 compared to 2022 and as mentioned earlier, we expect continued margin expansion.

We'll have more detailed guidance for 2023 and our next earnings call in February .

In summary, while we navigate near term uncertainties that are impacting the entire semiconductor industry.

Continue to be very excited about the growth opportunities in front of us.

<unk> is the only pure play next generation power semiconductor company and this provides us with advantages opportunities and benefits for significant expansion.

Operator, let's begin the Q&A session.

As a reminder to ask a question simply press Star then the number one on your telephone keypad. Our first question will come from the line of Kevin Cassidy with Rosenblatt Securities. Please go ahead.

Yes, Thanks for taking my question and congratulations on the progress.

You know I guess.

Question. The obvious question is do you split out what your silicon carbide revenue wise versus your gallium nitride.

No we're not splitting it out at this time Kevin.

Okay great.

And in the China inventory.

Can you estimate about how.

Over inventory you are is it.

All right.

Aftermarket Chargers or is it the OEM charges.

Yes, I think the over inventory and the softness affected both China major Oems as well as aftermarket so I think it's spread across both.

Okay, and maybe just one other on that debt.

Our new design, how is that split between the 17, new designs as aftermarket charges versus inbox.

Yes. It continues to be a good mix I think we continue to see new designs sort of equally across sandbox or mobile players as well as the aftermarket.

Highlighted a few of the bigger names those tend to be the bigger inbox or mobile Oems, but it also included aftermarket.

Wins like best buy and anchor as well as the mobile players like Xiaomi and Lenovo.

And Moto.

Okay, great I'll get back in the queue.

Thanks, Kevin.

Your next question comes from the line of Ross Seymore with Deutsche Bank. Please go ahead.

Hi, guys. Thanks wanted to ask a question.

Ron I know guiding to next year, it's difficult for all the reasons that you stated I just wondered.

<unk> side of things is that still expected to be kind of a 60% CAGR in that market and I guess as a second part of that how do we align the five X increase in capacity with with that kind of 60% or whatever youre going to update us on growth rate. It seems like the capacity is ready for a lot more than 60%, but I know the timing can be a.

Little bit off between the capacity and the revenue.

Yes sure.

Ross Thanks for the question.

So to answer the first part of the question, Yes, we certainly expect in that business.

To continue.

60% growth rate. So that's all teed up I think.

The comments, we talked about all the additional opportunities we're seeing.

Since we acquired the business backlog is higher today, and we're seeing a lot more opportunities. So so from that perspective, I mean, the business is doing as well as we thought it would.

When we acquired it.

Additional manufacturing capacity.

As we are trying to catch up its fine.

That's up to demand right now.

That comes up over time.

Don't come up all at once.

But yes, I think the idea is that we're putting in capacity.

Will support much higher levels of revenue than we're currently seeing in that business.

Thanks for that color I guess as my follow up the gross margin side of things I guess, a two part on this one as well.

It's good to see that it's going up a bit sequentially, but it is significantly lower than what you thought it would have been.

As of last quarter's call, where I believe you said it was kind of 43, plus or minus two points. So why is that I guess on the lower end and then when you talk about continued improvement for next year.

Sort of either directional magnitude linearity, just any more color on that would be helpful.

Yes, sure. So so on the first part.

It's a little lower than what we guided last quarter end and part of that is.

The mix issue.

So silicon carbide wasn't and again, we've talked about demand and supply it wasn't as big or of our overall percentage of the business as we thought it might be so that's one the second is as you recall earlier this year we discussed this.

Where we consciously made.

A decision strategic decision.

To invest in our space outside the charger business, which was at the time and is currently lower margin.

And kind of corporate average so that business is doing exceptionally well.

And as a larger percentage of the overall business than it historically has been.

We certainly expect that business and we've talked about this when we introduced <unk> for margins in that business will expand and.

So youll see and Thats why we are pretty confident that margins into next year, we will continue to move up.

In terms of how much.

Right now.

We would look to low to mid forties.

<unk>, where we think that could go.

It should be relatively linear.

We expect.

Silicon carbide business can continue to grow and like I said, we have new products coming in on the Gan side that are that provide higher margins.

Margins than what we would see today, a better cost structure.

And then I guess, if I can sneak in just a clarification to that and apologies for the third question, but the mix in the fourth quarter I'm a little confused did you say that silicon carbide was a bigger percentage of your mix I guess implied in your guide are a smaller percentage of your mix implied in your guide that would lead the gross margin to not be terribly off from.

43, but still below it at 40.

Yes.

What are the mix of our silicon.

Silicon carbide was a little less than what we had anticipated when we guided 43.

Got it thank you.

Sure.

Our next question will come from the line of Blake Friedman with Bank of America. Please go ahead.

Hi, yes. Thanks for taking my question, just kind of focusing on the mobile side of things first.

Given what.

What we kind of assume about the normalized run rate for the Genesis business and we're looking at the December quarter. It seems like the mobile declines are kind of in line with what other Android peers, but I was just curious I know visibility is limited, but your thoughts on maybe a potential bottoming and mobile sales maybe sometime in the December March quarter from what we heard from your other peers.

Yes, yes. Thanks Blake for your question it is hard to predict but we've got a strong team and a lot of strong relationships in China. The best indications. We have is that Q4 and Q1 are both still pretty soft, but after that we would anticipate a decent recovery and that's what we're factoring into our preliminary thinking about next year.

Great and then just as a quick follow up I noticed you talked about some of the solar programs in your opening remarks and <unk>.

Just kind of curious I know some of the on the Gan side of things. Some of those programs are in a ramp in 'twenty. Four I believe you mentioned earlier that it might begin in the second half of 'twenty three I just wanted to.

Curious if any of those programs are pushed out or if I'm just kind of.

That's the incorrect interpretation.

I know for the last couple of quarters, we've been talking about the Gan ramping in 'twenty four across first one and now a second nature.

Residential solar players. So we're still tracking for 24 ramps on Gan with at least those two major players and likely more silicon carbide of course is already shipping into a lot of the solar leaders today that includes companies like Aps son grow CIT and could we and many others.

And our next question will come from the line of Jonathan <unk> with CJS Securities. Please go ahead.

Hi, Thanks for taking my question I just wanted to clarify you said you had visibility or line of sight into a doubling of revenue are you talking about reported revenue on a pro forma for Genesis.

To get there and I understand that.

60% component of their service.

On a reported basis on a pro forma basis makes a difference.

Right. So it's on a reported basis. So if you look at our guide.

The midpoint of our guide in the first nine months, we expect the full year to be around 38 $39 million in revenue.

So when we talk about doubling its off that base.

Understood. Thank you for clarifying that and then the.

The second part is I think you've mentioned that that silicon carbide didn't sell quite as much as you expected in the quarter wasn't a big part of the mix. But then you said it was doing as expected I'm just hoping you can reconcile that.

A little bit.

Oh, sorry go.

Yes sure.

I mean at this point, we are selling every chip we can build so we.

Working with our suppliers to ramp up as fast as we can we do have some bottlenecks that are working through that makes the output a little bit.

<unk> and led to a little bit less revenue in Q3, and Q4 than anticipated, which caused a mixed shift in small gross margin impact that.

Ron talked about but going forward it looks like those supply issues are being resolved pretty thoroughly here in Q4, and we mentioned a long term supply agreement that kicks in at the start of Q1 setting up a really strong capacity position in growth position for next year.

Great. That's helpful. Do you have any sense of how much revenue you left on the table or pushed out because of these bottlenecks.

Well you can just look at what we guided compared to prior or what was our prior guidance compared to actual results.

A bunch of that is silly.

Silicon carbide.

Okay. So most of that was silicon carbide in the rest of it I would assume is it just incremental mobile weakness.

Right exactly.

Hey.

Just a question on the acquisition strategically have you added any customers as a result of the acquisition, where you were able to cross sell to each other and jointly developing.

I'm wondering if there's any progress or developments there.

Sometimes you get together.

Yes definitely in fact, we highlighted over 50, new silicon carbide opportunities since we acquired the company. So that's off to a great start we've got our entire Salesforce system design centers all trained up all actively engaged.

Working with customers around the world, we havent named names, yet because we need permission for that typically so many of those projects will get revealed over time, but thats.

Heck of a great running start here in the last three months and that obviously led to us wanting to be more bullish on capacity and securing the <unk> increase that we talked about.

Great. That's helpful. Thank you.

Thanks, John .

Your next question will come from the line of Trevor Janosky on behalf of Quinn Bolton with Needham. Please go ahead.

Yeah, Hey, guys. This is Trevor on for Quinn and thanks for letting me ask a question on.

On Genesis.

We expect sequential growth throughout 2023 with the new capacity in place and is it possible.

<unk> Silicon carbide revenues outpacing Gan.

Any quarter during the year any color there would be great.

Yes, certainly sequential growth is our expectation that buybacks as we talked about earlier it gives us a whole lot of headroom to drive upside. So we're very anxious to do exactly that so I don't see any reason why we wouldn't see strong sequential growth.

Frankly in the Silicon carbide business and again business, depending upon that China recovery. So I think that sets us up pretty well across both businesses throughout the year next year.

Yeah.

Yes.

Okay.

Just to clarify for the data center 5 million Po.

How long does this agreement extend.

Yeah that purchase order is actually just for.

The second half of next year.

So it's just the beginning ramp up of that business.

Okay. So we can expect all $5 million in the second half.

That's right.

Okay.

I can just sneak in one more at the time of the IPO you spoke about Gan, reaching price parity with still again by the end of 2023 has your view on this timeline changed at all given the inflationary environment.

Actually no it hasnt theres been a lot of pluses and minuses there, but actually we are still on track in fact, many of the programs. We're developing our of course the programs that get launched in 'twenty, three and we see that system cost parity being achieved across a number of products in a number of markets and customers.

Awesome. Thank you.

Thank you Trevor our next question will come from the line of Tristan <unk> with Baird. Please go ahead.

Hi, good afternoon.

Could you talk a little bit about you.

And I know you've already provided details on G&A the feedback from that.

Taken carbide conferences that were attending is about the high end of high performance positioning. So are you highlighting any particular feature is differentiated as opposed to just going after the mass market.

If you could just give us some color.

And with some of the 50, plus you opportunities that you've mentioned is at all.

Automotive or if you could talk about.

Feedback on the expectations for those <unk> dose.

Yes definitely thanks for your questions Trust and so on the Genesis technology, It kind of falls in three categories. The high performance in circuit.

Test results are really extraordinary we did a lot of benchmarking before we acquired the company across all the big guys. We found it to be the best efficiency under real life high temperature high frequency operating conditions. So that efficiency that performance is really second to none and that certainly gets customers' attention first and foremost.

Secondarily as the robustness and reliability, we're one of only two suppliers offering guaranteed excellent Avalanche energy rating and also extremely good short circuit.

Ratings protection ratings and that's.

Critical obviously in these high reliability <unk>.

Applications. The third is the range of products itself. We go from 650 volt all the way on up to 6500 volts and so as you go up in voltage those markets are not as big but they are very demanding and performance.

And very limited and the supplier choices out there Genesis being one of only two I think at 3500 volts and the only one with $6 500 volt.

So those are the three big Differentiators that we're starting with today and of course, we're going to be adding to those as we integrate our own R&D plans and system R&D capabilities mixing with the Genesis technology.

Okay now that's great feedback so as my follow up then.

Are you able to price may be at a premium on the basis of performance is clearly the <unk>.

Features that you just mentioned are really highlighted.

The industry is critical going forward and also I guess it was the relationship between.

Shrinking those chips going forward, but then the reliability comes down so at some point is going to be kind of a clean cost between.

Higher density, but keeping a minimum reliability, particularly for automotive applications. So how how are you positioning price wise and what does that mean in terms of.

Market share that you can get a chance can you go after the mass market to argue you're going to really focus on the premium segment.

This question might be.

Premium on the pricing as well.

Yeah, great questions and definitely it's a price premium strategy, because it's a performance premium and reliability premium product and that price premium strategy is working really well for us as we're growing faster than the market taking share.

From others and I think we will be able to continue that for quite some time, albeit with an eye on mass market leadership position in the market.

We do have an aggressive cost reduction plan as well as an aggressive performance roadmap that I think will take us to mainstream leadership in cost performance and reliability.

In the Silicon carbide market. So I think we feel really good about that growth rate that share in that pricing strategy and I know you also trust and asked about the opportunities.

You did mentioned over 50, new silicon carbide opportunities since the acquisition.

<unk> mentioned 22 of those were in EV, the others pretty broadly spread around solar industrial and energy storage. The other key market. So it's a pretty broad based market share gains and growth trajectory for us.

Great. Thanks for the correct.

And as a reminder to ask a question simply press star one on your telephone keypad. Our next question is a follow up on the line of Jonathan <unk> with CJS Securities. Please go ahead.

Hi, Thanks for the follow up.

Ron you mentioned that the growth rate of Opex slowing down I was wondering what are you planning for that to slow too.

Next year, yes.

Yeah sure good question.

We will target I mean, it'll be mid single digits sequentially. So what the target would be.

Okay and is that just into Q1 or through the year.

That's what will drive <unk> through the year.

Okay, Great and then whats the update to your cash burn expectations with macro I guess headwinds you're seeing in the mobile plus a little bit of increase in opex.

Yes, so so.

First of all.

I feel super good about the balance sheet I mean, we have a very clean balance sheet almost no debt. So we have about 124 million of cash.

And again, if you think about.

So what we talked about potentially doubling our revenue next year and the margin guide and kind of the Opex Guide I think you'd get to a number where.

It's $12 million to $14 million a quarter now and it will go down through next year.

But again I think I think from a cash standpoint, and a liquidity standpoint.

We have no needs to raise additional capital to fund the business, we have plenty of capital on hand to grow the business. So we feel really good about our position.

Position with cash.

And certainly not having to approach the markets in this environment.

Got it is there a plan for that cash.

Just given the uncertainty that's out there I know you've talked about M&A in the past you've done a couple of things.

But is it preferable as a whole lot of that and probably even a little bit more interest than maybe it would.

Yeah.

I think the first priority is to fund the existing business right. We think we have great growth opportunities both in Gan on Silicon carbide. So initially we will focus resources, there having said that.

We've indicated in the past and <unk> are examples of being willing to make acquisitions that makes sense and so we would be opportunistic.

Should those situations arise, but again, our priority today is funding existing business because.

There are great growth opportunities, there and we plan to capitalize on it.

Great. Thank you.

Yes.

Our next question is a follow up on the line of Ross Seymore with Deutsche Bank. Please go ahead.

Hi, guys. Thanks again for letting me ask a follow up just a high level one.

Lots of moving parts, both on the demand side and the gam versus silicon carbide and all of those sorts of things, but you guys had a plan a breakeven at some point during calendar year 'twenty four is that still the plan.

Yes Ross.

Again, I think it's a little challenging to forecast right now.

The plan, obviously is to drive to breakeven, but I don't want to compare it I mean ideally it will be in 'twenty four but I think for me to forecast that right now is probably a little premature given the market conditions.

Okay. Thank you.

Yep.

And I will now turn the conference back over to Jean Sheridan CEO for any closing remarks.

Great. Thank you operator, and thanks to all of you for joining our call I'll just close with a few comments about the overall outlook going forward, we couldnt be happier with our <unk> acquisition that integration has gone extremely well.

Market response has been fantastic.

And together it has us firing on all cylinders across Gan and silicon carbide, expanding our markets into new regions, new applications, and creating a very diversified business. So I. Thank everyone for joining us today and look forward to any follow on discussions.

Ladies and gentlemen that will conclude today's call. Thank you all for joining you may now disconnect.

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