Q4 2023 Monolithic Power Systems Inc Earnings Call
Genevieve Cunningham: My name is Genevieve Cunningham, and I will be the moderator for this webinar. Joining me today are Michael Singh, CEO and founder of MPS, and Bernie Blegen, EVP and CFO. In the course of today's webinar, we will make forward-looking statements and projections that involve risk and uncertainty, which could cause results to differ materially from management's current views and expectations. Risks, uncertainties, and other factors that could cause actual results to differ are identified in the Safe Harbor Statement. Also, contained in the Q4 earnings release and in our latest SEC filing, including our Form 10-K and our Form 10-Q, which are accessible through our website. NPS assumes no obligation to update the information provided on today's. We will be discussing Gross Margin, Operating Expense, Operating Income, Other Income, and Income Before Income Tax.
Cunningham and I'll be the moderator for this webinar.
Speaker Change: Joining me today are Michael Hsing, CEO, and founder of MTS, and Bernie Blegen, EVP and CFO.
Speaker Change: In the course of today's webinar, we will make forward looking statements and projections that involve risk and uncertainty, which could cause results to differ materially from management's current views and expectations.
Speaker Change: The risks uncertainties and other factors that could cause actual results to differ are identified in the safe Harbor statements.
Speaker Change: Contained in the Q4 earnings release and in our latest SEC filings, including our Form 10-K, and our Form 10-Q, which are accessible through our website.
Speaker Change: <unk> assumes no obligation to update the information provided on today's call.
Speaker Change: We will be discussing gross margin operating expense operating income other income income before income taxes net income and earnings on both a GAAP and a non-GAAP basis.
Genevieve Cunningham: Net income and earnings are presented on both a GAAP and a non-GAAP basis. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Tables that outline the reconciliation between the non-GAAP financial measures to GAAP financial measures are included in our Q4 2023 Earnings. I'd also like to remind you that today's conference call is being webcast live over the internet and will be available for replay on our website for one year, along with the earnings release which was furnished to the SEC earlier today and is available on our website as well. Now I'd like to turn the call over to
Speaker Change: These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP.
Speaker Change: <unk> outlined the reconciliation between the non-GAAP financial measures to GAAP financial measures are included in our Q4 2023 earnings release.
Speaker Change: I'd also like to remind you that today's conference call is being webcast live over the Internet and will be available for replay on our website for one year along with the earnings release, which was furnished to the SEC earlier today and is available on our website as well now.
Speaker Change: Now I'd like to turn the call over to Bernie Blegen.
Theodore Bernie Blegen: Thanks, Jeb. For the full year 2023, NPS achieved record revenue of $1.82 billion. This is our 12th consecutive year of revenue growth driven by consistent execution, continued innovation, and strong customer focus. As announced today, MPS is expanding into a new $1 billion market with the acquisition of our partner ExxonBV. Exxon is a Netherlands-based startup with early revenue, specializing in programmable multi-core digital signal processors. Axon's competitive difference is its ability to deliver signals with near-zero distortion and reduce power consumption for automotive and consumer audio systems.
Theodore Bernie Blegen: Thanks, Kevin.
Theodore Bernie Blegen: For the full year 2023.
Theodore Bernie Blegen: <unk> achieved record revenue of $1 eight 2 billion.
Theodore Bernie Blegen: This is our 12 consecutive year of revenue growth driven by consistent execution continued.
Theodore Bernie Blegen: Continued innovation and strong customer focus.
Theodore Bernie Blegen: As announced today NPS is expanding into a new $1 billion market with the acquisition of our partner Exxon BV.
<unk> is a Netherlands based startup with early revenue.
Theodore Bernie Blegen: Specializing in programmable multi core digital signal processors.
Theodore Bernie Blegen: Exxon's competitive differences its ability to deliver signal with near zero distortion and reduce power consumption for automotive and consumer audio systems.
Theodore Bernie Blegen: The combination of Exide and MPS's IP, which has been accepted by several high-end audio customers, will change people's experience in their cars, homes, concert venues, and stadiums. Now, let me turn to a few highlights from this past year. Our integrated power management solutions for artificial intelligence enabled our customers to unlock previously untapped opportunities for innovation and growth. We created new automotive content, powering the ramp for autonomous driving, the digital cockpit, and lighting systems for both conventional and electric vehicles. We continue to diversify our global R&D footprint with the further expansion of our engineering centers of excellence in Europe and Taiwan.
Theodore Bernie Blegen: The combination of Exxon and NPS is IP, which has been accepted by several high end audio customers will change people's experience in their cars homes concert venues and stadiums.
Speaker Change: Let me turn to a few highlights from this past year.
Speaker Change: Our integrated power management solutions for artificial intelligence enabled our customers to unlock previously untapped opportunities for innovation and growth.
Speaker Change: We've created new automotive content powering the ramp of autonomous driving the digital cockpit and lighting systems for both conventional and electric vehicles.
Speaker Change: We continued to diversify our global R&D footprint with the further expansion of our engineering centers of excellence in Europe and Taiwan.
Theodore Bernie Blegen: And finally, we continue to expand and diversify our operating footprint with the qualification of multiple new fab and packaging partners in Taiwan, Singapore, and Malaysia. Now, turning to our full year 2023 revenue by market segment. Automotive revenue grew $94.6 million year over year to $394.7 million in 2023. This 31.5% gain was primarily driven by increased sales of our highly integrated applications supporting advanced driver assistance systems, the digital cockpit, and lighting applications. Automotive revenue represented 21.7% of NPS's full-year 2023 revenue, compared with 16.7% in 2022.
Speaker Change: And finally, we continued to expand and diversify our operating footprint with the qualification of multiple new fab and packaging partners in Taiwan, Singapore and Malaysia.
Speaker Change: Turning to our full year 2023 revenue by market segment.
Speaker Change: Automotive revenue grew $94 $6 million year.
Speaker Change: Year over year to $394 $7 million in 2023.
Speaker Change: This 31, 5% gain was primarily driven by increased sales of our highly integrated applications supporting the advanced driver assistance systems, the digital cockpit and lighting applications.
Speaker Change: Automotive revenue represented 21, 7% of Mps's full year 2023 revenue compared with 16, 7% in 2022.
Theodore Bernie Blegen: Full year 2023 enterprise data revenue grew $71.6 million over the prior year to $323 million. This 28.5% increase is primarily due to higher sales of our power management solutions for AI applications. Enterprise data revenue represented 17.7% of MPS's total revenue in 2023, compared with 14.0% in 2022. Storage and computing revenue for 2023 grew $38.5 million over the prior year to $491.1 million. This 8.5% increase was primarily driven by increased sales of products for notebooks. Storage and computing revenue represented 27.0% of MPS's total revenue in 2023, compared with 25.3% in 2022. Communications revenue fell by $46.5 million to $204.9 million.
Speaker Change: Full year 2023 enterprise data revenue grew $71 6 million over the.
Speaker Change: Higher year to $323 million.
This 28, 5% increase was primarily due to higher sales of our power management solutions for AI applications.
Enterprise data revenue represented 17, 7% of Mps's total revenue in 2023, compared with 14, 8% in 2022.
Speaker Change: Storage and computing revenue for.
Speaker Change: For 2023 grew $38 $5 billion over the prior year to $491 1 million.
Speaker Change: This eight 5% increase was primarily driven by increased sales of products for notebooks.
Speaker Change: Storage and computing revenue represented 27, 8% of Mps's total revenue in 2023, compared with 25, 3% in 2022.
Communications revenue fell by $46 5 million to $204 9 million.
Theodore Bernie Blegen: This 18.5% reduction was a result of lower 4G and 5G infrastructure sales. Communications revenue represented 11.3% of our 2023 revenue, compared with 14.0% in 2022. Industrial revenue fell by $46.5 million to $172.7 million in 2023. This 21.2% decrease primarily reflected lower sales in applications for industrial automation, security, and power sources.
Speaker Change: This 18, 5% reduction was a result of lower for <unk> infrastructure sales.
Speaker Change: Communications revenue represented 11, 3% of our 2023 revenue compared with 14, 8% in 2022.
Speaker Change: Industrial revenue fell by $46 5 million to $172 7 million in 2023 with.
Speaker Change: With 21, 2% decrease primarily reflected lower sales and applications for industrial automation security and power sources indoor.
Theodore Bernie Blegen: Industrial revenue represented 9.4% of NPS's full-year 2023 revenue, compared with 12.2% in 2022. Consumer revenue decreased $84.8 million to $234.7 million in 2023. This 26.6% year-over-year decrease was a result of broad market weakness across all segments.
Speaker Change: Industrial revenue represented nine 4% of Mps's full year 2023 revenue compared with 12, 2% in 2022.
Speaker Change: Consumer revenue decreased $84 8 million to $234 7 million in 2023.
Speaker Change: With 26, 6% year over year decrease was a result of broad market weakness across all segments.
Theodore Bernie Blegen: Consumer revenue represented 12.9% of NPS's full year 2023 revenue, compared with 17.8% in 2022. Let me take a moment to talk about the general business conditions. Throughout 2023, we highlighted that customer ordering patterns were oscillating, reflecting general economic uncertainty. While we saw nominal improvement in Q4 ordering patterns, we remain cautious as visibility beyond the current quarter is limited. Despite this ongoing uncertainty, we continue to execute against our long-term strategy by bringing innovative new products to market and expanding design wins across our broad base of customers. We believe these ongoing investments position us well for future growth when the macroenvironment stabilizes. Switching to Q4 results, MPS had fourth-quarter revenue of $454.0 million, down 4.4% from the third quarter of 2023 and down 1.3% from the fourth quarter of 2022. Comparing year over year results, fourth quarter 2023 revenue for enterprise data grew by 88.4%, while Storage and Computing fell 2.9%. Automotive was down 7.8%, Consumer decreased 17.5%, Communications decreased 36.3%, and Industry fell 40.5%.
Speaker Change: Consumer revenue represented 12, 9% of Mps's full year 2023 revenue compared with 17, 8% in 2022.
Speaker Change: Let me take a moment to talk about the general business conditions.
Throughout 2023, we highlighted the customer ordering patterns were off leading reflecting general economic uncertainty.
Speaker Change: While we saw a nominal improvement in Q4 ordering patterns, we remain cautious as visibility beyond the current quarter is limited.
Speaker Change: Despite this ongoing uncertainty we continue to execute against our long term strategy by bringing innovative new products to market and expanding design wins across our broad base of customers.
Speaker Change: We believe these ongoing investments position us well for future growth when the macro environment stabilizes.
Speaker Change: Switching to Q4 results.
Speaker Change: <unk> had fourth quarter revenue of $454 million down.
Speaker Change: <unk> down four 4% from the third quarter of 2023 and down one 3% from the fourth quarter of 2022.
Speaker Change: Comparing year over year results for the quarter 2023 revenue for enterprise data grew by 88, 4%.
Speaker Change: Storage and computing fell two 9%.
Speaker Change: Automotive was down seven 8% consumer decreased 17, 5% communications decreased 36, 3% and industrial fell 45%.
Theodore Bernie Blegen: Fourth quarter 2023, gap gross margin was 55.3%, down 20 basis points from the third quarter of 2023, and 290 basis points below the fourth quarter of 2022. Fourth quarter 2023 non-GAPGOS margin was 55.7%, flat with the third quarter of 2023, but 280 basis points lower than the fourth quarter of 2022. This year-over-year reduction in fourth quarter non-gap gross margin is largely due to sales net
Speaker Change: Fourth quarter 2023, GAAP gross margin was 55, 3% down 20 basis points from the third quarter of 2023, and 290 basis points below the fourth quarter of 2022.
Speaker Change: Fourth quarter 2023, non-GAAP gross margin was 55, 7% flat with the third quarter of 2023, but 280 basis points lower than the fourth quarter of 2022.
Speaker Change: This year over year reduction in fourth quarter non-GAAP gross margin is largely due to sales mix.
Speaker Change: Turning to operating expenses.
Speaker Change: Our GAAP operating expenses were $141 6 million in the fourth quarter compared with $128 million in the third quarter of 2023 and $139 million in the fourth quarter of 2022.
Speaker Change: Our non-GAAP fourth quarter 2023, operating expenses were $96 7 million roughly flat with the third quarter of 2023 and up from the $94 8 million reported in the fourth quarter of 2022.
Theodore Bernie Blegen: Turning to operating expenses, our GAAP operating expenses were $141.6 million in the fourth quarter, compared with $128 million in the third quarter of 2023 and $130.9 million in the fourth quarter of 2022. Our non-GAAP fourth-quarter 2023 operating expenses were $96.7 million, roughly flat with the third quarter of 2023 and up from the $94.8 million reported in the fourth quarter of 2022. The differences between GAAP and non-GAAP operating expenses for the quarters discussed here are primarily stock compensation expense and income or loss from an unfunded deferred compensation plan.
Speaker Change: The differences between GAAP and non-GAAP operating expenses for the quarters discussed here, primarily stock compensation expense.
Speaker Change: And income or loss from an unfunded deferred compensation plan.
Speaker Change: Fourth quarter, 2023 stock compensation expense, including $1 $2 million charged to cost of goods sold.
Speaker Change: Was $41 1 million compared with $33 6 billion.
Speaker Change: Recorded in the third quarter of 2023.
Speaker Change: Switching to the bottom line fourth quarter 2023, GAAP net income was $96 9 million or $1 98 per fully diluted share.
Theodore Bernie Blegen: Fourth quarter 2023 star compensation expense, including $1.2 million charged to cost of goods sold, was $41.1 million compared with $33.6 million recorded in the third quarter of 2023. Switching to the bottom line, fourth quarter 2023 gap net income was $96.9 million, or $1.98 per fully diluted share, compared with $2.48 per share in the third quarter of 2023 and $2.45 per share in the fourth quarter of 2022. Q4 2023 non-GAAP net income was $140.9 million, or $2.88 per fully diluted share, compared with $3.08 per share in the third quarter of 2023 and $3.17 per share in the fourth quarter of 2022. Fully diluted shares outstanding at the end of Q4 2023 were $48.9 million. That's for the balance sheet. As of December 31, 2023, cash, cash equivalents, and investments totaled $1.11 billion compared to $1.04 billion at the end of the third quarter of 2023.
Speaker Change: Compared with $2 48 per share in the third quarter of 2023, and $2 45 per share in the fourth quarter of 2022.
Speaker Change: Q4, 2023, non-GAAP net income was $140 9 million.
Speaker Change: Or $2 88 per fully diluted share compared with $3 <unk> per share in the third quarter of 2023 and $3 17 per share in the fourth quarter of 2022.
Speaker Change: Fully diluted shares outstanding at the end of Q4 2023 were $48 9 million.
Speaker Change: As for our balance sheet.
Speaker Change: As of December 31, 2023, cash cash equivalents and investments totaled $1, one $1 billion compared to 1.0 for.
Speaker Change: For $1 billion at the end of the third quarter of 2023.
Speaker Change: For the fourth quarter of 2023, MPS generated operating cash flow of about $153 $3 million compared with $175 9 million in Q3 2023.
Speaker Change: Fourth quarter 2023 capital spending totaled $13 8 million.
Speaker Change: Accounts receivable ended the fourth quarter of 2023 at $179 9 million compared with $185 8 million reported at the end of the third quarter of 2023, and $182 7 million at the end of the fourth quarter of 2022.
Speaker Change: There were 36 days of sales outstanding across these comparable periods.
Speaker Change: Our internal inventories at the end of the fourth quarter of 2023 were $383 7 million.
Speaker Change: Down from the $397 3 million at the end of the third quarter of 2023.
Speaker Change: Days of inventory rose to 172 days at the end of Q4 2023 from 171 days at the end of third quarter of 2023.
Theodore Bernie Blegen: For the fourth quarter of 2023, MPS generated operating cash flow of about $153.3 million compared with $175.9 million in Q3. For the fourth quarter of 2023, capital spending totaled $13.8 million. Accounts receivable ended the fourth quarter of 2023 at $179.9 million, compared with $185.8 million reported at the end of the third quarter of 2023 and $182.7 million at the end of the fourth quarter of 2022. There were 36 days of sales outstanding across these comparable periods.
Speaker Change: We have carefully managed our internal inventories throughout the year given the uncertainty in the market.
Using next quarter revenue as a basis inventory was.
Speaker Change: 175 days at the end of the fourth quarter of 2023 down from 178 days at the end of the third quarter of 2023.
Speaker Change: I would now like to turn to our Q1 2020 for outlook.
Speaker Change: <unk> forecasting Q1 2020 for revenue in the range of 437.
Speaker Change: To $457 million.
Speaker Change: GAAP gross margin in the range of 55, 1% to 55, 7%.
Speaker Change: non-GAAP gross margin in the range of 55, 4% to 56, 8%.
Speaker Change: Total stock based compensation expense, including associated and employer taxes of $46 2 million to $48 2 million, including approximately $1 $4 million that would be charged to cost of goods sold.
Speaker Change: GAAP operating expenses between 147, two and $151 2 million.
Theodore Bernie Blegen: Our internal inventories at the end of the fourth quarter of 2023 were $383.7 million, down from the $397.3 million at the end of the third quarter of 2023. Days of inventory rose to 172 days at the end of Q4 2023 from 171 days at the end of the third quarter of 2023. We have carefully managed our internal inventory throughout the year given the uncertainty in the market. Using next quarter revenue as a basis, inventory was 175 days at the end of the fourth quarter of 2023, down from 178 days at the end of the third quarter of 2023. I would now like to turn to our Q1 2024 Outlook. We are forecasting Q1 2024 revenue in the range of $437.0 to $457.0 million, gap gross margin in the range of 55.1% to 55.7%, and non-gap gross margin in the range of 55.4% to 56.0%. Total stock-based compensation expense, including associated employer taxes, of $46.2 to $48.2 million, including approximately $1.4 million that would be charged to the cost of goods sold.
Speaker Change: non-GAAP operating expenses to be in the range of 101, eight to $103 8 million.
Speaker Change: Estimate excludes stock based compensation expense and amortization of recently purchased intangible assets, but includes litigation expense and the expense from our recent <unk> acquisition.
Speaker Change: Other income before foreign exchange gains or losses is expected to range from five 3% to $5 7 million.
Speaker Change: Fully diluted shares to be in the range of 48, 8% to $49 2 million.
Speaker Change: Shares.
Speaker Change: We continue to execute the share buyback program that was announced in our Q3 23 earnings call.
Speaker Change: Finally, I am pleased to announce a 25% increase in our quarterly dividend to $1 25 per share from $1 per share for stockholders of record as of March 29 2024.
Speaker Change: In conclusion, while we continue to be cautious about the near term business conditions. We believe our long term growth strategy remains intact, and we can swiftly adapt to market changes as they occur.
Speaker Change: I will now open the webinar up for questions.
Thank you Bernie.
Speaker Change: I would now like to begin our Q&A session. As a reminder, if you would like cask. A question. Please click on the participants icon on the menu bar and then click the raise hand button.
Our first question is from Quinn Bolton of Needham and Cowen. Your line is now open.
Speaker Change: Jeremy.
Quinn Bolton: Hey, Michael Brian can you hear me.
Speaker Change: Yes, yes, please speak up.
Speaker Change: Hey.
Speaker Change: Gratulation is on a very stable outlook and a pretty choppy environment.
Theodore Bernie Blegen: Gap operating expenses between $147.2 and $151.2 million. Non-GAAP operating expenses are expected to be in the range of $101.8 to $103.8 million. This estimate excludes stock-based compensation expense and amortization of recently purchased intangible assets but includes litigation expense and the expense from our recent Exsign acquisition. Other income before foreign exchange gains or losses is expected to range from $5.3 to $5.7 million, and fully diluted shares to be in the range of $48.8 to $49.2 million. We continue to execute the share buyback program that was announced in our Q3-23 earnings call. Finally, I am pleased to announce a 25% increase in our quarterly dividend to $1.25 per share from $1 per share for stockholders of record as of March 29, 2024. In conclusion, while we continue to be cautious about the near-term business conditions, we believe our long-term growth strategy remains intact, and we can swiftly adapt to market changes as they occur. I will now open the webinar up for questions. Thank you, Bernie. Analysts, I would now like to begin our Q&A session. As a reminder, if you would like to ask a question, please click on the participants icon on the menu bar and then click the raise hand button.
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Speaker Change: Enterprise data segment was up $30 million quarter on quarter are really driving a lot of the growth in the near term as you look into 2024 can you just talk about your expectations for enterprise data specifically your opportunity to perhaps expand the customer set with some of the other leading <unk>.
Speaker Change: <unk> and AI accelerator companies and then I've got a follow on question. Thank you.
Speaker Change: Sure I'll take that Quinn.
Speaker Change: As far as the initial ramp that we've been experiencing over about the last four quarters.
Speaker Change: We've.
Speaker Change: <unk> really seen.
Speaker Change: <unk> benefited from the acceleration.
Speaker Change: Demand for these applications and solutions.
Speaker Change: As we look ahead.
Speaker Change: We see a broadening of the number of market participants are customers, who will be participating in that but at the same time, we also believe that.
Speaker Change: Competition within the supply chain.
Speaker Change: We'll continue.
Speaker Change: So for a majority of the period to date we've enjoyed.
Speaker Change: A pretty high percentage of market share, but expect that that to decrease as we introduced second and third suppliers.
Speaker Change: But the overall.
Speaker Change: The overall.
Speaker Change: Ed on the overall the market segment is grow and grow very rapidly rapid to me and.
Speaker Change: We are.
Speaker Change: We're expanding our.
Speaker Change: Production lines and.
Speaker Change: And we will meet.
Speaker Change: In the second half with demand.
Speaker Change: Got it.
Speaker Change: Maybe just looking at sort of the roadmap for some of these accelerators in 2024, I think you guys have some new ramps with probably higher content, but I think you also have.
Michael Singh: Our first question is from Quinn Bolton of Needham. Quinn, your line is now open. Uh, yes. Yeah, we can speak up. Hey, congratulations on the very stable outlook in a pretty choppy environment. Looks like the enterprise data segment was up $30 million quarter-on-quarter, really driving a lot of the growth in the near term. As you look into 2024, can you just talk about your expectations for enterprise data, specifically your opportunity to perhaps expand the customer set with some of the other leading GPU and AI accelerator companies? And then I've got a follow-on question. Thank you. Sure, I'll take that, Quinn.
Speaker Change: Perhaps.
Speaker Change: Lower cost.
Speaker Change: <unk> coming out where you guys may see step down in your dollar content can you just kind of walk through the puts and takes that we should be thinking about.
Speaker Change: Your average dollar content per wind <unk> see that trending higher as power consumption goes up or is the increase in competition and perhaps.
Speaker Change: Efforts to design cost down cards.
Speaker Change: <unk> to perhaps limit that dollar content opportunity.
Speaker Change: The dollar content.
Speaker Change: <unk>.
Speaker Change: Well.
Speaker Change: As.
Speaker Change: Market.
Speaker Change: Accelerating some of our game will have a more our competitiveness, joining joining knocking and especially.
Speaker Change: This rate of the ramp.
Michael Singh: As far as the initial ramp that we've been experiencing over about the last four quarters, we've really seen or benefited from the acceleration of demand for these applications and solutions. As we look ahead, we see a broadening of the number of market participants, or customers that will be participating in them. But at the same time, we also believe that competition within the supply chain will continue. So, for the majority of the period to date, we've enjoyed a pretty high percentage of market share, but expect that to decrease as we introduce second and third suppliers. Yeah, but overall...
Speaker Change: And the <unk>.
Speaker Change: Also we see other players.
Speaker Change: AI players, we're entering a market where we are.
Speaker Change: So far way behind.
Speaker Change: Well pretty.
Speaker Change: Pretty much the sole source of.
Speaker Change: <unk>.
Speaker Change: Of our policy <unk>.
Speaker Change: <unk>.
Let's see the second half or sometimes next year. So you will see a lot of other players.
Speaker Change: To be quantified off they solve.
Speaker Change: One of the technical problem. This okay.
Speaker Change: Ross.
Speaker Change: So that's what will we thus while we expect the.
Speaker Change: The.
Michael Singh: Overall, I want to add, the overall market segment is growing, and it's growing very rapidly. We're expanding our production lines, and we will meet demand in the second half. Got it. Maybe just looking at sort of the roadmap for some of these accelerators in 2024, I think you guys have some new ramps with probably higher content, but I think you also have perhaps, lower cost cards coming out where you guys may see a step down in your dollar content. Can you just kind of walk through the puts and takes?
Speaker Change: The cost side Lucky, we're always loaning out our cost and.
Speaker Change: And at.
Speaker Change: At this time, we want to solve all the problems and.
Speaker Change: While believer we resolved all of these issues.
Speaker Change: Sure.
Speaker Change: <unk>.
Speaker Change: During these are fast ramp and.
<unk>.
Speaker Change: And also on the cost base.
Speaker Change: At this time there is not it's not really the issue is all about throughput and <unk>.
Speaker Change: To meet the customer demand.
Speaker Change: And one final comment on content is that.
Speaker Change: With each following generation of new products that are being introduced for AI. The power requirements are increasing and at this point, we have a belief that the dollar content will go up per server, but at this point, it's very hard to gauge that.
Michael Singh: I wish you'd be thinking about, you know, your your average dollar content for when do you still see that trending higher as power consumption goes up? Or is the increase in competition and perhaps, you know, efforts to design cost down cards, starting to perhaps limit that dollar content? The dollar content is a, um... Well, it's a, as the market accelerating, and again, we'll have a more our competitor joining, joining, okay, and especially, this rate of a ramp and And also we see other players, other AI players will enter the market that we are, are so far way behind where they're pretty much the sole source of a power solution, and uh as you see the second half or sometimes I mean next year okay you will see a lot of other players um to be qualified or they solve uh, They are whatever the technical problem is, okay, or the art.
Speaker Change: Yes, yes.
Speaker Change: Right.
Speaker Change: And our next.
Speaker Change: <unk>.
Speaker Change: Next <unk>.
Speaker Change: The power of the.
Speaker Change: Avon High has a much higher.
Speaker Change: As a bonus.
Speaker Change: And.
Speaker Change: We.
Speaker Change: Started to do these.
Speaker Change: These.
Speaker Change: Our product development back in a couple of years ago.
Speaker Change: <unk>.
Speaker Change: We're about to release it okay manner.
Speaker Change: Our customers see.
Speaker Change: This quarter I missed a couple of quarters.
Speaker Change: Perfect. Thank you for all that color.
Speaker Change: Our next question is from Rick Schafer of Oppenheimer. Your line is now open.
Rick Schafer: Yes, Thanks, and I'll add my congratulations as well.
Michael Singh: So that's what we, that's what we expect. The cost side, okay, we're always lowering our cost, and at this time, we want to solve all the problems, and I believe we have resolved all these issues during this fast ramp, and also, cost at this time is not really the issue. It's all about throughput and meeting customer demand.
Rick Schafer: Couple of questions if I could.
Rick Schafer: Michael I'm curious, if you could kind of elaborate a little bit, but I'm curious what surprised you. The most in the last 90 days or so.
Particularly in auto obviously enterprise data was stronger than expected, but auto seems like it's kind of materially gotten softer for most in the last 90 days.
Michael Singh: And one final comment on content is that with each subsequent generation of new products that are being introduced for AI, the power requirements are increasing. And at this point, we have a belief that the dollar content will go up per server. But at this point, it's very hard to gauge that.
Speaker Change: I was curious if you could comment on what Youre seeing there and of course, you guys had a couple of delayed.
Speaker Change: Model year launches.
Speaker Change: Last year in the second half and I was just trying to get a sense of when those might ramp and.
Michael Singh: For AI systems, yeah, yeah, yeah. And in the next version of it, the power is even higher as much higher as Bernie said, and we started to do these, these product developments back a couple of years ago. And we're about to release them. Okay, man, to our customers this quarter, next couple of quarters, Perfect. Thank you for all that color.
Speaker Change: And if you consider that an offset maybe to a slower.
Speaker Change: Lower auto market at large.
Speaker Change: Good question.
Speaker Change: Good observation and towards the end of the last year, it kind of <unk> <unk>.
Speaker Change: Lola down, but overall, we of the Boonies said early is always still grows some high 20% 30%.
Speaker Change: And the overall in the auto segment. These are mostly primarily mostly due to.
Rick Schafer: Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open. Yeah, thanks. And I'll add my congratulations as well.
Speaker Change: To aid us in.
Speaker Change: The infotainment ago whenever the boat the head units.
Speaker Change: <unk> cockpit.
Michael Singh: A couple of questions, if I could. I guess, Michael, I'm curious if you could elaborate a little bit. But I'm particularly thinking of auto. Obviously, enterprise data was stronger than expected. But auto seems like it's kind of materially gotten softer for most in the last 90 days.
Speaker Change: And.
Speaker Change: Going for next years.
Speaker Change: We believe the market, we see the all the activities in that game and <unk>.
Speaker Change: Customers.
Speaker Change: And nowadays are consumed all of these are inventories that we.
Speaker Change: Although we shipped in.
Speaker Change: In EMEA, our June period of times.
Michael Singh: So I was curious if you could comment on what you're seeing there. And of course, you guys had, I think, a couple of delays in model year launches last year and the second half. And I was just trying to get a sense of when those might ramp up, and if you consider that an offset, maybe to a slower, you know, slower auto market at large. Good questions and good observations. Toward the end of the last year, it kind of auto-slowed down.
Speaker Change: And then now they start to have a higher volume ramp and thus.
Thus, especially English.
Speaker Change: In the <unk> side.
Speaker Change: So for this year first part of this year.
Speaker Change: So I think that.
Speaker Change: There is been some softness that.
Speaker Change: <unk> in Q3 of last Q3, and Q4 of last year that was observable both for IC in Evs.
Speaker Change: And as we said in our earlier comments and that applies to automotive we don't have great visibility beyond just the next quarter. So it's hard for us to predict with the second half of 'twenty for the ramp might look like for automotive right.
Michael Singh: But overall, as Bernie said earlier, we still grow some high 20-30% in the auto segment. This is mostly due to the ADOS and the infotainment or whatever the head units call it, or the digital cockpit going for next year. We believe that we see all the activities, and customers nowadays are consuming all these inventories that we shipped in the May or June period times. And now they are starting to have a higher volume ramp, especially on the EV side. So for this year, the first part of this year.
Speaker Change: The ramp is in the early.
Speaker Change: Early adoption.
Speaker Change: In the EV is a very lumpy in a different different automakers have a ramp in <unk> in a different schedules and that came in.
Speaker Change: But overall the train is they will pull out more.
Speaker Change: <unk>.
Speaker Change: Our our products.
Speaker Change: Thanks, Michael and if I could follow up <unk>.
Speaker Change: <unk> was asking about some of the 48 volt stuff.
Speaker Change: I was curious you guys are so dominant on the second stage 48 volt.
Speaker Change: <unk> got a stage one product now as well so I didn't know if you could give us a sense of what your expectations are.
Michael Singh: So, I think that there was some softness that occurred in Q3 and Q4 of last year that was observable both for IC and EVs. And as we said in our earlier comments, and this applies to automotive, we don't have great visibility beyond just the next quarter, so it's hard for us to predict what the second half of 24, the ramp might look like for automotive. Right. So, the ramp in early adoption of EVs is very slow, and different automakers and the government have the ramp on a different schedule.
Speaker Change: For share or <unk>.
Speaker Change: Revenue contribution however, you'd like to discuss it but I'm curious sort of what stage one power will do to your content will do for your for that enterprise data segments.
Speaker Change: I also was curious only because you mentioned it a couple of times new competition coming in 48 volt.
Speaker Change: Just curious to get your thoughts on.
Speaker Change: If it gets harder.
Speaker Change: Or to be competition going forward as guys like Nvidia moves from it.
Michael Singh: But overall, the trend is they will pull out more. More EV with more of our products. Thanks, Michael. And if I could follow up, I know Quinn was asking about some of the 48V stuff.
Speaker Change: Two year cadence on new processor development too to an annual cadence.
Michael Singh: I was curious, you guys are so dominant in this in second stage 48V. I know you've got a stage one product now as well. So I didn't know if you could give us a sense of what your expectations are for share or revenue contribution. Perhaps you'd like to discuss it. But I'm curious about what stage one power will do to your content and for that enterprise data segment. And I also was curious, only because you mentioned it a couple of times, new competition coming in 48V, and I was just curious to get your thoughts on if it gets harder for the competition going forward as guys like NVIDIA move from a two-year cadence on new processor development to an annual cadence. Thanks. All right, yeah, um... This game is always the best performance.
Speaker Change: <unk>.
Speaker Change: Alright.
Speaker Change: Okay.
Speaker Change: This game is.
Speaker Change: Always the best performance came so far.
Speaker Change: Our competition so we.
Speaker Change: We don't I don't want to speak our competition, okay. So far.
Speaker Change: What we have.
Speaker Change: Our customers are very receptive to our our solution. So far we pretty much have have them.
Speaker Change: Majority of.
Speaker Change: Of the volumes.
Speaker Change: And.
Speaker Change: They keep requesting it.
Speaker Change: People will kind of stay when we solve all of these issues related to their they are assisting issues hours in the hour.
Speaker Change: The issues are from a from our site and.
Speaker Change: And.
Speaker Change: So when the even the volume gets even bigger.
Michael Singh: So far, our competition, I don't want to speak of our competition. So far, what we have, our customers are very receptive to our solution. So far, we pretty much have a majority of the volumes, and they keep requesting it and keep requesting we solve all these issues related to their system issues, ours, and the issues from our side, and the So when the volume gets even bigger, it's good to have another source, okay? Otherwise, again, you don't want NPS to become all of them.
Speaker Change: Good to have.
Speaker Change: However have another source, okay, otherwise <unk> you don't want a NPS became all of them.
Speaker Change: What we intend to do and.
Speaker Change: So.
Speaker Change: Also.
Speaker Change: The competition.
Speaker Change: In.
Speaker Change: It's.
Speaker Change: Exactly like a server site.
Speaker Change: We were the.
Speaker Change: Newcomer.
Speaker Change: Server market.
Speaker Change: Backing to couple of years ago.
Speaker Change: And that's how we wound market and we had a product.
Speaker Change: Long before that and.
Speaker Change: They also need.
Michael Singh: So, again, that's not what we intend to do. And also, the competition center is exactly like a server site. And we were the newcomer in the server market back a couple years ago, and that's how we won the market. And we had a product long before that. And we also need to dumb it down to meet the common footprints because the power density is not high enough. And when this AI comes to the market, the common footprint is not a requirement.
Speaker Change: <unk>.
Speaker Change: We had a dumbed down two to meet.
Speaker Change: Mr Common footprints and.
Speaker Change: Because.
Speaker Change: The power density is not high enough and when when this AI it coming on that come on.
Speaker Change: Market the common footprint is not a requirement.
Speaker Change: So we start to wound on a lot of market.
Speaker Change: Malala shares and.
Speaker Change: And the same as in the servers and have a very similar trend.
Speaker Change: And.
Speaker Change: That's how we'll win the market.
Speaker Change: We always want to do.
Michael Singh: So we start to win a lot of market share, a lot of shares. And the same is true for the servers, which have a very similar trend. And that's how we win the market. And we always want to do, as we said in the past, we want to push the technology. We want to make sure we're the best. And Michael, any sense of stage two, or sorry, stage one, contribution this year for you guys? Thanks.
Speaker Change: As we said in our <unk>.
Speaker Change: Past, we want to pushing the technology, we want to make sure we're the best.
Speaker Change: And Michael heat sensitive stage two stage one contribution this year from you guys.
Speaker Change: Yes.
Speaker Change: Yes, okay.
Speaker Change: We had some issues on the stage of ones and that came in.
Speaker Change: <unk>.
Speaker Change: We had some design wins in a very small volumes in.
Michael Singh: Yes, okay. We had some issues in Stage 1, and we had some design flaws and very small volumes in different systems, actually. And now, we don't have all these issues resolved, and that will significantly increase the content in each AI system. And stage one, for us at least, represents about 20-25% of the dollar content of stage two. And we expect to see an incremental ramp-up from these products in Q1 and Q2. Yeah. We had problems shipping these products for some of the 48-volt systems.
Speaker Change: In a different and.
Speaker Change: And a different systems actually came in <unk> <unk>.
Speaker Change: Okay.
Speaker Change: We don't have.
Speaker Change: All of these issues are resolved and that came in that will significantly gang.
Speaker Change: The content.
Speaker Change: And.
Speaker Change: In them.
Speaker Change: Each a AI systems.
Speaker Change: In stage one.
Speaker Change: For us at least through this represented about.
Speaker Change: 2025% of the dollar content of <unk>.
Speaker Change: Stage, two and we expect to see the incremental ramp from.
Speaker Change: These products in Q1 and Q2.
Speaker Change: Yes, we had a shipping these products are for some of the 48 volt systems and also we pull we supply it is.
Michael Singh: And also, we are the supplier of the chip and for the silicon, not for the modules. And now we step up to our modules. Great, thank you guys. Our next question is from Matt Ramsey of Cohen. Matt, your line is now open. Thank you very much.
Speaker Change: We as a supplier for four chip in.
Speaker Change: For the Silicon now for the modules and <unk>.
Speaker Change: <unk> step up to our modules.
Speaker Change: Great. Thank you guys.
Speaker Change: Our next question is from Matt Ramsay of Cowen Matt. Your line is now open.
Matthew D. Ramsay: Thank you very much congrats guys good afternoon.
Matthew D. Ramsay: I'm going to ask both of my questions here together because we have two or three calls going on tonight, and I don't want to end up on two lines at once. I don't know that we want to have interweaving earnings calls, but my two questions are: the first one, Michael, since you helped found the company. You guys have not been active in traditional M&A, so I'd be interested to hear a little bit more about the company you're acquiring, the markets that you're going to go after, how that whole deal came together, and the prospects for the new technologies that you may, and people that you may roll into the company. Just any background there.
Ask both of my questions here together, because we got two or three calls going on Tonight and item one and two.
Speaker Change: Yes, I don't know that we want to go interweaving earnings calls, but okay.
Matthew D. Ramsay: After my my two questions are the first one.
Matthew D. Ramsay: Michelson since.
Matthew D. Ramsay: How can the company you guys have not been active in M&A traditionally.
Matthew D. Ramsay: So I'd be interested to hear a little bit more about the company you're acquiring the markets that youre going to go after.
Matthew D. Ramsay: How that deal came together.
Matthew D. Ramsay: What the prospects for that.
Matthew D. Ramsay: New technologies that you may and people that you may roll into the company.
Matthew D. Ramsay: Any background there.
Matthew D. Ramsay: That's a great question. Otherwise, we're taking to the all AI call. Just really quickly on my second one.
Speaker Change: That's a great crushing so otherwise we will attain all AI Hall.
Speaker Change: Just really quickly on my second one so I'll go back.
Michael Singh: So I'll go back to you, Bernie, if you could just help us out with the guidance for March by segment, that would be helpful to make sure we're all modeling from the same footing. Thanks. All right, let me answer the first question. So okay, and you said it's inactive in the M&A market sector. That's not true.
Speaker Change: Tony If you could just help us out.
Speaker Change: With the guidance for March by segment that would be helpful to make sure. We're all modeling on the same footing. Thanks.
Tony: Alright, let me let me answer the first question so in the U S.
Tony: You said is the inactive.
Tony: M&A market centers, that's not true so in that game and we follow our.
Tony: Well, it's not really a policy sooner we follow.
Tony: <unk>.
What we do for the best for our shareholders. We don't want client revenue. The reason this is a cheap to grow revenue four four.
Michael Singh: Okay. And we follow our, Well, it's not really a policy. So we follow what we do for the best for our shareholders, we don't acquire revenue. The reason is, is a cheap to grow revenue for for NPS, but we do look, do apply, technology and so this is the in the past actually we acquired a few and financially in materials with our shareholder and at this time and it is a big enough we we made it we made this this disclosure And talking about this Axions, it's the company that we've worked with for three years already. And it's proven that their technology and with our power stage and, That will be a huge benefit in audio signal to audio amplification fields. And we have proven in very, very, very high-end customers. And make these products, OK, very unique. And never achieved in the histories, like no zero distortion, signals and I can send it to a speaker. The cost is very low.
Tony: For NPS, but we do look.
Tony: <unk>.
Tony: Technology and <unk>.
Tony: So this is.
In the past actually we acquired a few.
Tony: And.
Tony: Financially.
Tony: <unk> materials with.
Tony: With our shareholders and at this time and it is a big enough we.
Tony: We made we made this.
Tony: This disclosures.
Tony: And.
Tony: To talking about.
Tony: This.
Tony: <unk>.
Tony: Is the company that we work with them in a full three years already and it's proven that that technology and.
Tony: With our power stage and.
Tony: There'll be a huge benefit for.
Tony: <unk>.
Tony: An audio signal to audio amplification.
Tony: Fields, and we have a proven.
Tony: In a very very very high end customers and.
Tony: Macy's products is a very unique and.
Tony: And that endeavor achieved in our history, no zero dispose shakes cigna.
Tony: Signals seem to have speakers and.
Tony: The cost is.
Tony: <unk> enrolled.
Michael Singh: The way we achieve that, and also we achieve a lot of programmability; it's also software adaptive. And that, I see it when I listen to those sounds.
Tony: The way we we.
Tony: We achieved that and also we achieved a lot of programmable.
Tony: It's also software adaptive.
Tony: And.
Tony: I see it.
Speaker Change: We're not listening to those sounds.
Michael Singh: It's really, you bring an audio file, as we're putting in the press release, putting high-quality audio files into everybody's home to lower down, really lower down the cost, and that will revolutionize how we listen. Yeah, Matt, I'll take the second question then on the guidance as far as what we're looking at for Q1. The growth driver is still enterprise data. The positive there is that, in addition to AI, we're also seeing incremental positive demand for our traditional CPU data center solution. When you look at the other groups, basically, we see a flattening in comms, but then we see declines that sort of range between the high single digits and the low double digits in the sequential growth between Q4 and Q1 for the other groups. Jim, I think we can move to the next one. Our next question is from Tore Svanberg of Stiefel. Tore, your line is now open. Yes, thank you, Michael, and Bernie, and congratulations on the 12th consecutive year of growth, especially in this environment. That's stunning.
Speaker Change: It's really or you bring audiophile agreement we put in.
Speaker Change: In the.
In our press release.
Speaker Change: Audio five quality too to everybody's home.
Speaker Change: Two our Malone La Donna.
Speaker Change: Unreal.
Speaker Change: Really low down the cost.
Speaker Change: And.
Speaker Change: That will revolutionize how we listened.
Speaker Change: Yes.
Speaker Change: Matt I'll take the second question then on the guidance as far as what we're looking at for Q1 here.
Matthew D. Ramsay: The growth driver.
Matthew D. Ramsay: Is it still remains the enterprise data.
Matthew D. Ramsay: The positive there is that in addition to AI.
Matthew D. Ramsay: We're also seeing incremental positive demand for our traditional CPU data Center solutions.
Matthew D. Ramsay: When you look at the other groups.
Matthew D. Ramsay: Basically we see a flattening in comms, but then we see declines that.
Matthew D. Ramsay: Sort of range between the.
Matthew D. Ramsay: High single digits and low double digits in the sequential.
Matthew D. Ramsay: Both between Q4 and Q1 for the other groups.
Speaker Change: Does that answer your question Matt.
Speaker Change: Yes.
Matthew D. Ramsay: Ken I think we can move to the next one.
Ken: Our next question is from toys Farnborough of Stifel. Your line is now open.
Toys Farnborough: Yes, thank you, Michael or Bernie and congrats.
Toys Farnborough: Congratulations on the 12th consecutive year of growth, especially in this environment.
Tore Egil Svanberg: My first question for you, Michael, is, you know, 2024. So you've already talked about AI, and Bernie just sort of gave us directionally things for Q1. But you always seem to surprise us a little bit with something, you know, throughout the year. So I'm just wondering, is there anything that you could share with us that could happen either in the industrial or communications sectors? I'm not thinking about cyclical stuff.
Toys Farnborough: Stunning.
Toys Farnborough: My first question with you Michael is 2024, so you've already talked about.
Toys Farnborough: And Bernie just sort of gave us directionally things for Q1, but.
Toys Farnborough: You always seem to surprise, a little bit but something.
Toys Farnborough: Throughout the year. So I'm just wondering is there anything that you could share with us that could happen either in industrial or communications I'm not thinking about cyclical stuff I'm thinking about more sort of new secular stuff that youre working on that could surprise on the upside this year.
Michael Singh: I'm thinking about more sort of new secular stuff that you're working on that could surprise us in the upcoming year. Well, last year the growth was not very spectacular, it was like a one, what is that, a single digit? Oh, one and a half percent. One and a half percent, okay. Yeah, okay. But this year, I think it's a who knows. In the last year, we didn't know until LGBT happened in the game. Then the AI business took off, and was it out of our expectations? I mean, we didn't know.
Speaker Change: Well said.
Speaker Change: Last year the growth is not very spectacular.
Speaker Change: What is the what is a single digit below one 5%.
Speaker Change: Okay.
Speaker Change: Yes.
Okay.
Speaker Change: But this year.
Speaker Change: I think it was a who knows.
Speaker Change: Last year with no until chat GBT happened in that game.
Speaker Change: And.
Speaker Change: Then and then the AI business took off.
Speaker Change: <unk> was.
Speaker Change: All of our expectations and that came in we didn't know but to answer your questions and a follow up.
Michael Singh: But to answer your questions, to comment on your questions, 11, what is it, 12 years, 11 years of consecutive year-by-year growth. It's we follow our principles and, okay, we want to first things first. We want to have make sure that all the products what we deliver to our customers are the best products and the best performance, and we want to beat all our competitions. That's number one.
Speaker Change: To comment on your questions elaborating, what does the 12 years or 11 years in a consecutive.
Speaker Change: A year by year growth.
Speaker Change: Sure.
Speaker Change: We follow our principals in that game, we want to first things, Okay. We want to make sure. It's all of the product.
Speaker Change: We deliver to our customers is the best product best performance.
Speaker Change: And we.
Speaker Change: We want to beat all our competition, that's the number one <unk>, we react we react faster when nimble.
Michael Singh: Number two is that we react. We react fast, we're nimble, and we fulfill our customer demand. And that's the pretty simple strategy that we follow, and we kind of disregard what the market segment does. Okay, and we don't chase those market segments. Who knows, okay? whether any one of the segments in the world will grow, but... I don't expect it will grow as big as AI, okay, but maybe a couple of small segments will start, and I do see that. And we do see that in recent quarters, in the last quarter or so, we see all these orders come in, and as we expected, those products are truly better than our competitors. Yeah, that makes sense.
Speaker Change: We fulfill our customer demand.
Speaker Change: <unk>.
Speaker Change: That's pretty simple.
Speaker Change: Strategies that will fall off and.
Speaker Change: We've kind of regardless of what the.
Speaker Change: What the market segment does okay.
Speaker Change: And we don't Chase those market segment this year.
Speaker Change: Okay within one of our segments and our whoa whoa growth, but I.
Speaker Change: I don't expect that we will grow as big as they are okay, but maybe a couple of small segments happening in that end.
Speaker Change: I do see that and.
Speaker Change: We do see the reasoning reasoning quarters in the last quarter of ourselves and that we see all of these orders coming in that game.
Speaker Change: As we expected those the product of a truly better than then.
Michael Singh: And as I follow up, I think most people when they think about NPS always think about power management and, you know, how much share you've gained there. But when I look at, you know, the Exide acquisition, I think about your penetration into the data converter space, you know, you're doing much more stuff on the signal processing side. I mean, you're clearly building out, I think, a pretty impressive portfolio in what I would call more the mixed signal part of the market. So will you be able to maybe, You know, share that with us over time? I don't know the percentage or revenue collectively, how some, how much, you know, these subsegments can represent for the overall business. Yes, I think in the next couple of years, you will see some significant growth in different areas, from signal processing to data converters.
Speaker Change: Then our competitors yes.
Speaker Change: Thanks, Amit.
Amit: Makes sense and as my follow up I.
Speaker Change: I think most people when you think about NPS, obviously, they think about power management in.
Speaker Change: How much share you a game there, but when I look at the exciting acquisition I think about your penetration into the Datacom space Youre doing much more stuff on the single processing side I mean, you're clearly building out I think a pretty impressive portfolio in what I would cuomo the mixed single part of the market. So.
Speaker Change: Will you be able to maybe.
Speaker Change: Sure that would also overtime I don't know a percentage of revenue collectively how much.
Speaker Change: These sub segments can can represent for the overall business.
Speaker Change: Yes, Okay, I think that next.
Speaker Change: Couple of years, and you will see some significant growth so from a from.
Speaker Change: From different area from a signal processing and our fall data converters.
Michael Singh: And for, of course, we talked about today's and the audio process, okay, I mean, and what you already designed it in, and, and, from a consumer, high-volume consumer market segment. And later, we're going to get into the automotive and the automotive business. Other ones, we have a lot of small things like silicon carbides and silicon carbide projects for green energies and for solar inverters. Well, these are still kind of power management, but a lot of them are, okay, where is the power? And for communications between the solar side, okay, so from the inverter side, and even the automotive side, back to the automotive side, and there's a lot of other communication within the car, Excellent. Thank you and congrats again.
Speaker Change: And for all.
Speaker Change: Of course, when we talk about it today.
Speaker Change: The audio process.
Speaker Change: Which already designed eating.
Speaker Change: And.
Speaker Change: Some are consumer high volume consumer market segments and the later, we are going to getting to.
Speaker Change: Automotive.
Speaker Change: In the automotive business and.
Speaker Change: Other ones.
Speaker Change: We have a lot of.
Speaker Change: Small things I get a lot of other things like a silicon carbide in the fall and.
Speaker Change: Silicon carbide projects for <unk>.
Speaker Change: For Green energy simple solos.
Speaker Change: While solar Inverters and and.
Speaker Change: <unk>.
Speaker Change: While these are still kind of power management mindset.
Speaker Change: I'll have one syndicate, where olive Palmer.
Speaker Change: These are all communications and.
Speaker Change: Four four.
Speaker Change: Communications.
Speaker Change: No.
Speaker Change: Solar site, Okay, So pharma in Buda site and.
Speaker Change: Given the automotive side and I'll go back to automotive sites and there's a lot of other communication.
Speaker Change: In the.
Speaker Change: I think in a car and develop those type of a product.
Speaker Change: Youll see NPS in the next few years, so we'll we'll migrate out.
Speaker Change: And to install two doses second to those segment.
Speaker Change: Excellent. Thank you and congrats again, thank you.
Michael Singh: Thank you. Our next question is from William Stein of Truist. William, your line is now open.
Speaker Change: Our next question is from William Stein of Jewish William Your line is now open.
William Stein: Thanks, I'll add my congratulations to the remarkably stable outlook. And along those lines, you know, the company has had a longer-term revenue growth and margin model that you have talked about in the past. I think the way you say it is either, 15 plus semi growth or around 20 top line, and then 10 to 20 bits per quarter on gross margin.
William Stein: Great. Thanks, I'll add my congrats to the.
William Stein: Remarkably stable outlook and along those lines.
William Stein: The company has had a longer term revenue growth and margin model that you've talked about in the past I think.
William Stein: The way you say it is either.
William Stein: 15, plus any growth or.
William Stein: Around 20% top line and then.
10 to 20 bps per quarter on gross margin, we've been really outside of that model as things have been really volatile since COVID-19 started I guess, but I wonder if quarter potentially holding back into that model or should we sort of throw that away and not think about that anymore. How would you encourage us to think about revenue growth and margins longer term.
William Stein: We've been really outside of that model as things have been really volatile since, well, since COVID started, I guess. But I wonder if we're potentially honing back into that model, or should we sort of throw that away and not think about that anymore? And how would you encourage us to think about revenue growth and margins longer term? Yeah, those kind of models. It's a model is a model.
Speaker Change: Yes, those are those kind of a model is that if a.
Speaker Change: Our model is a model.
Speaker Change: And.
Michael Singh: But I think at a given time, the world will be back in the models. It's the model can be, can be, it's like weather forecasting, right? Okay, so we build our models, and okay, we didn't predict these thunderstorms. And, and for..., like the last couple of years, our models are not correct. And either we have too much or we have too little. So given this kind of economic weather, the environment, and that model is not quite right. And also, our model is not very scientific either. It's based on our empirical and historical reasons.
Speaker Change: But I think as a.
Given time and we'll be back in our models.
Speaker Change: And so the model can be.
Speaker Change: B.
Speaker Change: The lack of weather forecasting right Bill.
Speaker Change: Build a model and some that we didn't predict disciplined response and.
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: Four.
Speaker Change: Like the last couple of years.
Speaker Change: With our models.
Speaker Change: Correct.
Speaker Change: Either we have a too much worry about too little to Mecca.
Speaker Change: So.
Speaker Change: Given those kind of.
Speaker Change: Environment economic whether environmental Mecca.
Speaker Change: That model is not quite right to Mccann and also a model as mountains very scientific.
Speaker Change: Scientific either.
Speaker Change: As a baseline our.
Speaker Change: Empirical history historical wheezing, so okay and.
Theodore Bernie Blegen: Okay. And but we should not deviate from what we see now, Tim, okay? And just to give people a refresh of what the model is that Will is referring to, generally speaking, we outperform the market by 10 to 15 percentage points. And in stable market conditions where it's growing between about 5 and 8 percent, it's easy to assume that we'd be between 15 and 20 percent growth. The gross margin, or range that we target on a non-gap basis, is between 55 and 60 percent. And then, when the environment is more predictable, we look to be able to grow gross margin 10 to 15 basis points in successive quarters. Yeah, I might as well add it, okay? We emphasize product development and also the customer design wing, and I do see a lot of wings and an arm. Many different segments, I said earlier, and probably I probably forgot even half of it, okay, in my mind. And there are so many things going on.
Speaker Change: Yes.
Speaker Change: We should not get deviate from formal what we see now okay and just to give people a refresh of what the model is that.
Speaker Change: <unk> is referring to is generally speaking, we outperformed the market by 10% to 15 percentage points.
Speaker Change: In the stable market conditions, where it's growing between about 5% to 8% easy to assume that we'd be between 15 and 20% growth on the gross margin or a range that we target on a non-GAAP basis is between 55 and 60% and then when the environment is more predictable, we look to be able to grow gross <unk>.
Speaker Change: Margin, 10% to 15 percentage point or basis points.
Speaker Change: On quarterly successive quarters.
Speaker Change: <unk>.
Speaker Change: And Ed we emphasize.
Speaker Change: The product development.
Speaker Change: And also the customer design wins.
Speaker Change: And.
I do see a lot of wings and.
Speaker Change: Many different segments.
Speaker Change: I said earlier.
Speaker Change: Probably I forgot it you mean half of mine.
Speaker Change: And then there's so many things going on and.
Speaker Change: So going to go into futures.
Michael Singh: And so going to the future, and when a normalized, as Bernie said, more normalized economic conditions, and there's no reason we will not grow. We will grow 1.5%. At least say it that way.
Speaker Change: When a normalize the bone you said as a more normalized.
Speaker Change: <unk>.
Speaker Change: Economic conditions.
Speaker Change: And there's no reason.
Speaker Change: We will not grow we grow.
Speaker Change: One 5%.
Speaker Change: Yes.
Speaker Change: At least say that way, okay, but the market contracted 10%.
William Stein: But the market contracted 10%. Yeah, yeah. Okay. We certainly are outgrowing in the long term, no doubt. The other thing I'd like to ask about is inventories. I think on your own balance sheet, you're running below your long-term target now. Maybe my view of the target is stale. I'm not sure. Maybe you can just update us on inventory relative to your target and also in the channel about what you think is going on there, please. Thanks so much.
Speaker Change: Okay.
Speaker Change: We certainly are outgrowing long term no doubt the other thing I would like to ask about is inventories.
Speaker Change: I think on your own balance sheet Youre running below your long term target now maybe the maybe my view of the targeted sale Im not sure maybe you can just update us.
Speaker Change: On inventory relative to your target and also in the channel what what you think is going on there. Please thanks, so much sure.
Theodore Bernie Blegen: Sure, I can take that one. So, as a reminder, the model is days on our balance sheet between 180 and 200 days. We came in at about the low 170s this quarter, which was really a reflection of how we have been managing our inventory in this uncertain environment. Having said that, we've started a lot of wafer starts ahead of what we believe will be a potential upside, certainly in the next few quarters. As far as the channel, that's been a difficult aspect of this market for everybody, and we've had our share of putting inventory in the channel, but I'm very happy to report that over the last three quarters, it's been coming down appreciably, and we're right now just a little bit above our model. Hmm. We will start to build an inventory. Yeah, yeah. Great. Thanks so much, guys. Our next question is from Travis Pullen of Wells Fargo. Travis, your line is now open. Hi guys, this is Travis on for Gary.
Speaker Change: Sure I can take that one so as a reminder of the model is days on our balance sheet between 180 to 200 days, we came in at about the low $1 70. This.
Speaker Change: This quarter, which was really a reflection of how we have been managing our inventory in this uncertain environment.
Speaker Change: Having said that we started a lot of wafer starts.
Speaker Change: Ahead of what we believe will be a potential upside.
Speaker Change: Certainly in the next few quarters.
Speaker Change: As far as the channel.
Speaker Change: Ben.
Speaker Change: A difficult aspect of.
Speaker Change: Of this market for everybody.
Speaker Change: And we've had our share of putting inventory in the channel.
Speaker Change: But I am very happy to report that over the last three quarters, it's been coming down appreciably and we're right now just to move that above our model.
Speaker Change: We will start to build inventory, yes, yes.
Speaker Change: Great. Thanks, so much guys.
Speaker Change: Our next question is from Travis <unk> of Wells Fargo. Travis Your line is now open.
Speaker Change: Hi, guys. This is Travis on for Gary Thanks for taking my question and congratulations on the results.
Travis Pullen: Thanks for taking my question and congratulations on the results. I was wondering if you could provide color on how your customer base has evolved through 2023. Historically, MPS has been diverse from this perspective, but did any customer approach 10%? And along those lines, how do you expect this mix to evolve as we move into 2023?
Travis: I was wondering if you could provide color on how your customer base has evolved through 2023, historically MTS has been diverse from this perspective, but any customer approached 10% and along those lines. How do you expect this mix to evolve as we move into 2024.
Speaker Change: Yes.
Michael Singh: Yeah, I see these data that we grew our small customer base by a few thousand last year. And that's kind of exciting, I mean, and it doesn't mean they earn a lot of revenue. But in the longer term, the wealth, I mean, the bigger the base, the better it is, the more stable NPS will be.
Speaker Change: I've seen these data as we grow our small customer base and <unk>.
Speaker Change: By a few thousand.
Speaker Change: Last year.
Speaker Change: And that's kind of exciting again.
Speaker Change: It doesn't mean, they had a lot of revenue.
Speaker Change: And.
Speaker Change: In the longer term as well.
Speaker Change: The bigger the base the pattern is the most stable NPS will be.
Michael Singh: Also, you don't know, okay, and what's the next hardest thing, okay, and our customer will decide that, okay, or the market will decide it. Our customer will take the opportunity. If not this one, that one will.
Speaker Change: And.
Alton.
Also you will note in okay, and what's the next the hardest things in our customer well, we'll decide that the market will decide at our customers.
Speaker Change: We'll take opportunity.
Speaker Change: Not this one my babbling well some okay.
Michael Singh: I mean, we just play the percentage, and our products go out of doors, okay, and that goes to designing those for those customers. And in terms of which segments, I have to say it's an A, but wait, this is okay. I can't remember, I can't remember any numbers more than, as I grow older, more than five or six things. But that's the beauty; you won't grow up a thousand, I mean.
Speaker Change: Just to play in that.
Speaker Change: Play the percentage and we just have our products go.
Speaker Change: It goes out of Dawson, Okay in that.
Speaker Change: Goes to design in those to those customers and <unk>.
Speaker Change: <unk> is about which segments.
Speaker Change: I have to say, it's an EBIT business.
Speaker Change: I can remember I can't remember their name members and more than 10 as outgrow order the more than five or six things.
Speaker Change: And.
Speaker Change: But that's the beauty of this.
Speaker Change: You won't go thousands and that came in.
Theodore Bernie Blegen: That will take a few years, and it will turn into bigger revenue. And Travis, it's an excellent question because I think to align with Michael's points there that the strength of MPS as far as resilience in different market conditions is the breadth of the customer base and not having high levels of concentration. Now, obviously, with this environment where it has been generally weak, except for AI, we're in sort of an unusual profile, but we don't expect that to last, you know, over the next couple, three years. Yeah. Got it. Thank you for the color.
Speaker Change: Sure.
Speaker Change: That will take a few years and it will obtaining to pingo.
Speaker Change: <unk> revenues.
Speaker Change: And Travis it's an excellent question, because I think too.
Speaker Change: Aligned with <unk>.
Speaker Change: Michael points, there is that the strength of MTS.
Speaker Change: As far as resilience in different market conditions is the breadth of the customer base.
Speaker Change: Not have high levels of concentration now obviously with this environment, where it has been generally weak except for AI. We're in sort of an unusual profile, but we don't expect that collapsed over the next couple of three years.
Travis Pullen: That's all from me. Our next question is from Tore Svanberg of Stiefel. Tore, the line is now open.
Speaker Change: Got it. Thank you for the color that's all from me yes, okay.
Speaker Change: Our next question is from choice Farnborough Stifel. Tory. The line is now open yes. Thank you I just had two quick follow ups first of all is on revenue capacity.
Tore Egil Svanberg: Yes, thank you. I just had two quick follow-ups. First of all, on revenue capacity. So, Michael, you talked about sort of getting to 2 billion in capacity. Obviously, you're there now. But then, you know, also any updates on getting to 3 and even 4 billion in revenue capacity. We are building for $4 billion in revenues and capacities. We actually, we haven't changed.
Tory: In the past, Michael you talked about sort of getting to 2 billion in capacity, obviously, you're there now.
Tory: But then also any updates on getting to three and even 4 billion of revenue capacity.
Tory: We are building for full billing dollar revenues in that game.
Tory: Capacities.
Tory: We actually we never changed and.
Michael Singh: And especially out of China and okay, and we and that actually fits our, our, our plan. And we'll continue to do that. And these kind of capacity issues, you look at NPS business, and we see, we believe these are business world growth issues.
Tory: And especially as the out of China and we in that.
Tory: Actually it's our.
Tory: Our plant.
Tory: And we'll continue to do that.
Tory: Sure.
Tory: <unk>.
Tory: These kind of a capacity issues. So you look at the Mps's NPS business and that we see we believe that these are business of low growth Mecca, we wait.
Tory: <unk> go out.
Tory: <unk>.
Michael Singh: Accordingly, it's really disregarded, okay, what's the current environment, okay, we address long-term issues. Very good. And then the other follow-up question, any updates on the e-commerce business? You know, we haven't heard about that in a while.
Tory: Accordingly.
Tory: Really a disregarded decade, what's occurring environment.
Tory: Address for long term issues.
Speaker Change: Very good and then the other follow up.
Speaker Change: Any updates on the E Commerce business, we haven't heard about that in a while so just wanted to make sure we check in with you and get and get an update there.
Tore Egil Svanberg: So, you know, just want to make sure we check in with you and get an update. Our module business, okay, I mean, our... Our... Our most pure e-commerce, okay, I said it, okay, we didn't know what we were talking about, and it wasn't that exciting, but the combination of it and our web service, and the e-commerce, and also some interactions that I can help with from our website. That generates... 150 million units now and last year, yeah. And... And, I can't call it that enough. What was that?
Speaker Change: Our module business second our.
Our.
Speaker Change: Our most pure e-commerce like I said, we.
Speaker Change: We didn't.
Speaker Change: While we are talking about and it wasn't wasn't wasn't that excitement and exciting, but the combination of it and with the.
Speaker Change: With our web service.
Speaker Change: And.
Speaker Change: And the E Commerce and also some inc.
Speaker Change: Interactions.
Speaker Change: Help from our website.
Speaker Change: That generates.
Speaker Change: 150 million units now lost yet.
Speaker Change: And.
Speaker Change: And.
Speaker Change: I can't call it.
Michael Singh: Like seven, eight years ago, seven, eight years ago, we got these e-commerce business customers can log on to our website, and they can change their partner, they can input their parameters and program our parts, we ship the product within a week or so. That didn't happen that much but, uh, and uh yeah, it's happening. But I still believe, In the long term, that will be the business, because we' People can program it apart, especially younger generations. And they would rather program a product rather than use a solder line, putting it in the arms, and going to a lab to make it happen.
Speaker Change: Or was that like a seven eight years ago 78 years ago, we kind of at these visa E.
Speaker Change: E Commerce business customer cannot logging our website that we are going to they can change their apartment. They can they can input at their primers and program our Pos we ship the product.
Speaker Change: Within a week or so.
Speaker Change: That didn't happen that much.
Speaker Change: But yes.
Speaker Change: Yes. It is.
It's happening.
Speaker Change: But I still believe.
Speaker Change: In the long term that will be the business.
Speaker Change: Because.
Speaker Change: We are lowering the power management, we're modeling all of these are product designing barriers.
Speaker Change: <unk>.
Speaker Change: Why not.
Speaker Change: People can program, but apart and.
Speaker Change: Specially younger generations.
Speaker Change: They they have there.
Speaker Change: Rather program, a product rather than using a solid line putting us.
Michael Singh: And I think it's a little longer. Younger generations would do that, and it would be different from older generations, my generation, Sunak Amy, and that, Business. I believe in the long term it will still be picking up, but for now, it wasn't that bad. Okay, let's say that way. Great, thank you again. Our next question is from Melissa Fairbanks of Raymond James. Melissa, your line is now open.
Speaker Change: I'm, saying that when we get in our go to a lab that came to make it happen and I think it's been a longer longer younger generations.
Speaker Change: We'll do that.
Speaker Change: It would be different from older generations.
Speaker Change: My generation.
Speaker Change: And.
Speaker Change: That <unk>.
Speaker Change: Business I believe in the long term will still have.
Speaker Change: Still picking up before mouse.
Speaker Change: <unk>.
Speaker Change: Whether or not that okay lets say.
Speaker Change: Great. Thank you again.
Speaker Change: Our next question is from Melissa Fairbanks of Raymond James Melissa Your line is now open.
Melissa Fairbanks: Hey guys, thanks very much. I was wondering if maybe I could squeeze one in about the storage and computing business. I know it's not quite as exciting maybe as what's going on in enterprise data, but that's not good.
Melissa Fairbanks: Hey, guys. Thanks, very much I was wondering if maybe I could squeeze one in about storage and computing business I know, it's not quite as exciting maybe what's going on in enterprise data.
Melissa Fairbanks: That's not good.
Melissa Fairbanks: Sure.
Michael Singh: I know that you picked up some business on the notebook side last year that was kind of opportunistic. We've got some seasonal factors coming in in March. We've kind of heard that channel inventories, at least on the PC notebook side, have normalized somewhat. But I was wondering if you could just give us a little bit of color on the storage portion of that business that we don't seem to talk about very much. You know the answer already.
Melissa Fairbanks: I know that you did pick up some business on the notebook side last year that was kind of opportunistic we've got some seasonal factors coming in in March we've kind of heard that channel inventories at least on the PC notebook side have have normalized somewhat but I'm wondering if you could just give us a little bit of color on.
Melissa Fairbanks: On the storage portion of that business that we don't seem to talk about very much.
Speaker Change: You're right.
Theodore Bernie Blegen: And I said, overall, it's not good. We pick up some market shares, and we start to grow a little bit. Yeah. So, I think the way to look at it is that we anticipated softness in the storage market, and so, as a result, we became more competitive in notebooks and accepted lower-margin business. But it was offsetting declines, particularly in SSD, where we've seen a decline. We increased share with a lot of the major customers in the SSD market, but their business was in decline for much of 2023. And then the other positive in the group is that we saw the initial ramp of DDR5 during the year, and also graphics cards expanded pretty nicely during the year. So, this is a group that has different characteristics, and NetNet did pretty okay in a pretty difficult market. I think the DDL-5, we expected to ramp it up last year, right? Yeah. I mean, it didn't happen that fast.
Speaker Change: Even though the answer already.
I'd say overall its not good.
Speaker Change: Yes.
Speaker Change: Pick up some we've picked up some market shares and that will start to grow a little bit yes.
Speaker Change: So.
Speaker Change: I think the way to look at it as that.
Speaker Change: We anticipated.
Speaker Change: <unk> in the storage market and so as a result, we became more competitive on notebooks.
Speaker Change: And accepted a lower margin business.
Speaker Change: And.
Speaker Change: But it was offsetting declines, particularly in SSD.
Speaker Change: We've seen a decline we increased.
Speaker Change: Sure with a lot of the major customers in the SSD market, but their business was in decline for much of 2023 and then the other positive in the group.
Speaker Change: Is that we saw the initial ramp of DDR five during the year and also graphic cards expanded pretty nicely during the year.
Speaker Change: So.
Speaker Change: This is a group that has different characteristics.
Speaker Change: Net net.
Speaker Change: Did pretty okay in a pretty difficult market.
Speaker Change: Sure.
Speaker Change: I think with <unk>, we expect to ramp in last year right.
Speaker Change: To happen didn't happen that fast.
Michael Singh: Yeah. I mean, again, okay, we make sure our products are designed and when these products ramp, it's not up to us. And we actually care less.
Speaker Change: <unk>.
Speaker Change: So the key is again, we make sure our products designing and.
Speaker Change: And when when these product will ramp.
Speaker Change: It's not up to us.
Speaker Change: We actually care less <unk>.
Michael Singh: But we only care that we have a product to ship. All right. Thanks very much, Michael. I'm sorry to bring up a sore point. No, it's not a sore point.
Speaker Change: We have a product to ship okay.
Speaker Change: Alright, thanks, very much Michael I'm, sorry to bring up a sore point.
Michael Singh: It's a reality like everybody else's. All right. Thanks, guys. All right. Thank you. Our next question is from Quinn Bolton of Needham. Quinn, your line is now open.
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: Like everybody else is asking.
Speaker Change: Yes.
Speaker Change: Alright, Thanks, guys alright, thank you.
Speaker Change: Our next question is from Quinn Bolton of Needham and Cowen. Your line is now open.
Quinn Bolton: Hey guys, just wanted to follow up. Bernie, I think you mentioned that, in addition to the GPU and AI, you guys are starting to see better traction in just the core CPU server market. And I know in the past, you've talked about your goal to try to get your share in that segment to 25%. So I was wondering if you might just give us an update. Where do you think your share is in CPU core power today? And you know, how are you feeling about that 25% market share target over, say, the next couple of years? Thanks.
Quinn Bolton: Hey, guys just wanted to follow up Bernie I think you had mentioned that in addition to the GPU AI you guys were starting to see better traction on just the core CPU server market I know in the past you've talked about your goal to try to get your share in that segment to 25%. So I'm wondering if you might just give us an update where are you.
Theodore Bernie Blegen: Thank your share is in CPU core power today, and how you're feeling about that 25% market share target over say the next couple of years. Thanks.
Theodore Bernie Blegen: Sure. But what really generates interest for their customers is when they see the new product launches at both Intel and AMD ramping up, and we do the power management for both of those. And I think that, as we observed in the last year or even 18 months, that the most recent versions of their products have been delayed. And so, we've experienced a slower ramp as far as being able to increase share or content on those platforms. But at least initially, as I was observing for Q1, as well as for the balance of 24, we see that both of those ramps are starting to improve, and we'll participate with them. At this point, we don't have any reason to doubt our earlier projections as far as overall share opportunity between 20 and 30%.
Theodore Bernie Blegen: Sure so.
Theodore Bernie Blegen: What really generate interest for their customers as when they see the.
Speaker Change: New product launches at both.
Speaker Change: Intel and AMD ramping and we do the power management for both of those and I think that as we observed in the last year.
Speaker Change: Year, or even 18 months that the most recent versions of their products have been delayed and so.
Speaker Change: We've experienced a slower ramp as far as being able to increase share or content on those platforms.
Speaker Change: But at least initially is that is it.
Speaker Change: <unk> for Q1.
Speaker Change: As well as for the balance of 24.
Speaker Change: See that.
Speaker Change: Both of those ramps starting to improve and that will participate with them.
Speaker Change: At this point.
Speaker Change: We don't have any reason to doubt our earlier projections as far as overall share opportunity between 20, and 30%, but right at this particular moment, it's hard to say what we have.
Speaker Change: Yes, let me talk about.
Speaker Change: We are fluid king.
Theodore Bernie Blegen: But right now, at this particular moment, it's hard to say what we have. Yeah, let me talk about this. We didn't have any, and we are 13 and a half, and because that was about two and two and a half years ago, we have a lot of design wings. We have a design wing for a few, but by default, and I gave them to other customers that their customers couldn't get, they couldn't ship right, and we are turning out to be bigger players. We have four teams.
Speaker Change: And we didn't have any.
Speaker Change: <unk> 13, a half and that because that was about $2 $2 five years ago.
Speaker Change: We have a lot of design win we have a design win a few but by default and that came in.
Speaker Change: Other.
Speaker Change: And our customers and their customers they couldnt get the.
Speaker Change: When a ship right and.
Speaker Change: We are tending to be the.
Speaker Change: A bigger players okay via via <unk>.
Speaker Change: And the backing a few years ago, we designing many different project.
Michael Singh: Back a few years ago, we were designing many different projects, and uh, we expected to be a bigger player and uh, and uh. So that's a. We still believe the same story, um, when the CPU market picks up, and our revenue resumes growing, and uh, so what was the last year? I don't even remember it was the last year, and it wasn't, it wasn't spectacular numbers anyway, and I i I think sooner or later we'll turn around. Got it. Thank you. If there are any follow-up questions, please click the raise hand button. As there are no further questions, I would now like to turn the webinar back over to Bernie. Great, thank you very much, everybody.
Speaker Change: We.
We expect to be a bigger players and.
Speaker Change: And.
Speaker Change: So that's.
Speaker Change: We still believe the same story.
Speaker Change: When.
Speaker Change: CPU market picks up and our revenue will start to resume to growth.
Speaker Change: So what is the last year, so I don't even remember it was the last year. So no wasn't it wasn't spectacular numbers anyway.
Speaker Change: And.
Speaker Change: I think a soma later will turnaround.
Speaker Change: Got it thank you.
Speaker Change: There are any follow up questions. Please click the raise hand button.
Speaker Change: As there are no further questions I would now like to turn the webinar back over to Bernie.
Theodore Bernie Blegen: Great. Thank you very much everybody. Thank you for joining us on this conference call and look forward to talking to you again in our first quarter, which will be in late April and just to add to that at that time, we'll be introducing a new format for this call.
Theodore Bernie Blegen: Thank you for joining us on this conference call. I look forward to talking to you again in our first quarter, which will be in late April. And just to add to that, at that time, we'll be introducing a new format for this call. We will provide you with content and context on how the end markets have performed in a written manner, and then we will use the conference call portion more for Q&A. We believe that will be a more efficient use of your time and ours, and also a more complete communication. So with that, I will thank you, and again, I look forward to seeing you again in April.
Theodore Bernie Blegen: We will provide you content and context on how the end markets have performed and written manner and then we will use the conference call portion more for Q&A. So we believe that that will be a more efficient use of your time and ours and also more complete communication.
Speaker Change: So with that I will thank you and again I look forward to seeing you again in April.
Speaker Change: Okay.
Speaker Change: Okay.