Q4 2023 ACM Research Inc Earnings Call

Operator: Judgments about the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under Risk Factors and Elsewhere and ACM's Filings with the Commission.

Subject to risks and uncertainties that could cause actual results to differ materially.

Those risks are described under risk factors and elsewhere in Acm's filings with the commission.

Operator: Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Additionally, certain of the financial results that we provide on the call will be on a non-GAAP basis, which excludes stock-based compensation and an unrealized gain and loss on short-term investments. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted in the IR section of our website and also on slides 13 and 14. With that, I now turn the call over to David Wong, who will begin on slide three. David?

Please do not place undue reliance on these forward looking statements, which reflect acm's opinions only as of the date of this call ACM is not obliged to update you on any revisions to these forward looking statements.

Certain of the financial results that we provide on the call will be on a non-GAAP basis, which excludes stock based compensation and an unrealized gain and loss on short term investments for our GAAP results and reconciliations between GAAP and non-GAAP amounts you should refer to our earnings release, which is posted on the IR section of our website and also.

On slide 13 in 2014 with that let me now turn the call over to David Wang who will begin with slide three David.

Stephen: Thanks, Stephen. Hello, everyone, and welcome to ACM Research's fourth quarter and the fifth year of the 2023 Earnings Conference Call. Please turn to slide three.

David Wang: Thanks, Stephen Hello, everyone and welcome to the ACM research fourth quarter and the fiscal year to a sudden 73, earning.

David Wang: Coverts call, please turn to slide three.

David Wong: I'm pleased with our fourth quarter results, which conclude a strong year. For the fourth quarter of 2023, we delivered $170 million in revenue, up 57%. For the year, we delivered $558 million in revenue, up 43%. Profitability was good for both the fourth quarter and the full year, with operating margins of 21% and 22%, respectively. We ended the year with just over $300 million of cash and time deposits for shipments. The shipments for the fourth quarter will be 140 million, down 29% year-to-year.

David Wang: I'm pleased with our fourth quarter results.

David Wang: Conclude a strong year for the first quarter 2023, with delivered 170 million U S dollar in revenue upper 57%.

David Wang: A year, we'd go live or the $558 million in revenue or 43%.

David Wang: Profitability was good for both the fourth quarter and full year with operating margin of 21% and 22% respectively.

David Wang: We ended the year with just over $30 million of cash and time deposits.

David Wang: While shipments the shipments for therefore for fourth quarter were $140 million down 29% year to year shipments for the full year were 59 7 million operating at 11%.

David Wong: Shipments for the full year will be 59.7 million, up 11%. On our third quarter call, we knew the delay of shipment to several customers due in part to an adjustment in their fab build out. While we don't normally share our expectation for shipment, I will provide more color in this case. We view the low shipments for the fourth quarter to be a one-quarter event.

David Wang: Our third quarter call, we know the DNA of a human to several customer due impart to adjustment in their fab build out.

David Wang: Why would we don't the nominee share our expectation for humans I will provide a more color in this case.

David Wang: We feel the lower shipments for the fourth quarter to be a one quarter event with respect with delivered nearly all of the delay their tool during year two is under therefore.

David Wong: We expect to deliver nearly all of the delayed tools during the year 2024. We expect the first quarter achievement to be much higher than the fourth quarter levels, even with the normal Chinese New Year shutdown, and we expect their total shipment to grow faster than revenue for the full year 2024. Now I will discuss the key drivers, both for the market and specific to the ACM. According to a third-party estimate, the overall Mainland China WFE market will grow around 15%.

David Wang: We expect our first quarter shipments to be much higher than the fourth quarter levels, even with a normal Chinese new year shutdown.

David Wang: And we expect our total shipment to grow faster than revenue for the full year 2000 and plentiful.

Speaker Change: Now I will discuss the key growth drivers.

Speaker Change: <unk> for the market and specific to the ACM.

Speaker Change: According to a third party estimate the overall mainland China LTE market grow around 15%.

David Wong: If we exclude historiography tool, which will more than double in China in 2023, we believe the rest of the market growth for China WFE was close to 5%. In any case, we attribute ACM's higher growth rate of 43% to one, a leading product portfolio for the Chinese market, including Autobench Clean and our ECB tool for the front-end and packaging, to continue spending and market share gain at our current cost. Three, broader participation with new customers in China.

Speaker Change: If we exclude issaquah offering tool, which are more than doubling in China. In 2003, we believe the rest of the market growth for China, FTE was up close to 5%.

Speaker Change: Any case, who actually got ACM higher growth rate of 43% to one a leading product portfolio for the China market, including auto bench clean and our ECP tool for their front end and packaging.

Speaker Change: To continue spending at a market share gain at our current customer three broader but it's a big participation with new customer in China and for good execution by our production and our service team.

David Wong: And four, good execution by our production and the service team. I will now provide detail on the product. Please turn to slide four.

Speaker Change: I will now provide detail on product please turn to slide four.

David Wong: Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning products grew 48% in 2023 and represent 72% of total revenue ACM offers. What we believe in the industry, the most comprehensive cleaning portfolio; we support nearly 90% of all cleaning process steps for memory and logic devices. This coverage positions us as a key partner for both China's mature node development and international markets. At the high end, we believe our flagship steps, the Tahoe and Tebow single wafer cleaning products, deliver technical features not available from any of our competitors.

Speaker Change: Revenue from our single wafer cleaning Powell and semi critical cleaning product grew 48% in 2023.

Speaker Change: And represented 72% of total revenue.

Speaker Change: ACM offers what we believe in the industry and the most comprehensive of Canadian portfolio with support of nearly 90% of all Canadian process step for memory and logic devices.

This coverage positions us as a key partner for both China mature nodes development and international markets.

Speaker Change: At the high end, we believe our flagship Saps Tahoe and Tebo single wafer cleaning products deliver technical feature not available from any of our competition.

Speaker Change: We entered into the 300 millimeter.

David Wong: We entered the 30 millimeter auto bench cleaning market several years ago, and it's proving to be a significant winner for mature node spending. We have delivered more than 70 auto bench tools today and noted a very strong contribution in 2023 with good profitability. By our estimate, ACM will become the largest China-based supplier for autobench in 2023. For Tahoe, we made good progress during the year.

Speaker Change: Alto bench continue market several years ago is proving to be a significant winter weather mature node spending.

Speaker Change: We have delivered more than 70.

Speaker Change: Auto bench tools today.

Speaker Change: And another very strong contribution in 2003 with good profitability.

Speaker Change: By our estimate ACM become the largest China based supplier for OTO bench in 2023.

Speaker Change: For Tahoe, we made good progress during the year, our engineering team modify technical feature to meet production requirements for the key customer.

David Wong: Our engineering team modified technical features to meet production requirements for the key customers. I'm pleased to report ACM has been qualified for mass production by several customers, and we expect a strong ramp with good orders for delivery in the first half of 2034. This is good for our customers and good for the environment, as our proprietary Tahoe design significantly reduces the consumption of sulfuric acid.

Speaker Change: I am pleased to report <unk> has been qualified for mass production at several customers and we expect a strong ramp was good there.

Speaker Change: Orders for delivery in the first half of 2034.

Speaker Change: This is good for our customer and are good for the environment as all proprietary Tahoe design significantly reduce the consumption of the sulfuric asset.

Speaker Change: We continue.

David Wong: We continue to innovate in our cleaning and look forward to additional market share gain in 2024. We have ramped up several key new products, including our bevel-etch cleaning tool, high-temperature SBM single wafer cleaning tool, and the supercritical CO2 dry cleaning tool. Revenue from ECP, furnace, and other technology grew 33% in 2033, representing 19% of total revenue. We hit an important milestone for this category in 2023 with more than $100 million in revenue. ECP demonstrated strong performance. I want to know more.

Speaker Change: Right.

Speaker Change: And look forward to additional market share gains was under therefore, we ramp up with several key new products, including our <unk> continue through.

Speaker Change: High temperature SPM single wafer Canadian tool and the supercritical cotwo dry cleaning tool.

Speaker Change: Revenue from ECP furnace, and other technology grow 33% in 2023, and representing a 19% of total revenue.

Speaker Change: We heat important milestone for this category in 2023 with more than $100 million in revenue.

Speaker Change: <unk> demonstrated strong performance.

Speaker Change: I want to note that our first tool shipments grow even higher than 33%.

Speaker Change: We're taking a good this year for overall <unk> with a particular strong growth in front end process in 2023.

David Wong: Our first two achievements grow even higher than 33%. We are taking a good share of overall plating with a particular strong growth in front-end processes in 2023. For furnace, 2023 was a customer development year with many evaluations on the way. We expect an even broader customer footprint and good revenue contribution in 2024. We also made great progress with our furthest ARD product development.

Speaker Change: Further 2023, where the customer development year.

Speaker Change: Many evaluations underway.

Speaker Change: We expect or even broader customer footprint and grew their revenue contribution in 2024.

Speaker Change: We also made a great progress with our furthest LD product development in.

Speaker Change: In summary, we expect another year of strong growth in this product category in 2024.

Speaker Change: Revenue for advanced packaging, which is crude ECP, but includes service and this bell grew 31, 5% in 2023 and represents 9% of total revenue.

This category includes a range of packaging tools, including colder developer scrubber, PFS cheaper and at what edges, and our service and spare parts.

David Wong: In summary, we expect another year of strong growth in this product category in 2024. Revenue for advanced packaging, which excludes ECP but includes service and promotion, grew 31.5% in 2023 and represents 9% of total revenue. This category includes a range of packaging tools, including coater, developer, scrubber, PR stripper, and wet ecchers, and a service and a spare part. Last year, we also introduced Ultra CV vacuum cleaning tools, and we continue to explore new products and technologies to participate in the next generation of advanced packaging. We believe ACM is the only company in the world that offers a full set of web tools.

Speaker Change: Last year, we also introduced ultra CV vacuum cleaning tools and we continue to explore new product and technology to participate in the next generation of advanced packaging.

We delivered eight we believe ACM is only company in the world that offer a full set of wetzel.

Speaker Change: Polishing and <unk> for advanced packaging.

Speaker Change: We expect that the amount of packaging to become more important as industrial looks to looks for packaging innovations such as two five D and three D in the puzzle and the fan out.

Speaker Change: This are the critical for high performance computing applications, such as AI, which is a seeming increasingly demand globally.

Speaker Change: Finishing up on product, we made good progress with our new track NPS CBD platform.

Speaker Change: We are engaged in active dialogue with our key customer and intend to release additional evaluation tools. This year.

Speaker Change: As with our cleaning <unk> <unk> and a phone us product line on track.

Speaker Change: <unk> CBD platform, both the proprietary technology that positions them as a successful.

Speaker Change: Choice.

Speaker Change: Major customer globally, including both in and outside China.

Speaker Change: We are making a good progress in the evaluation of our track tool.

David Wong: We expect mouse packaging to become more important as the industry looks for packaging innovations such as 2.5D and 3D in the POZO and FANOUT. These are critical for high-performance computing applications, such as AI, which is increasingly in demand globally. Finishing up on products, we made good progress with our new track and PECVD platform. We are engaged in active dialogue with our key customers and intend to release additional evaluation tools this year, as with our cleaning, plating, and furnace, product line, or track and PCVD platform, both proprietary technologies that position them as a successful choice for major customers globally, including both in and outside China. We are making good progress in the evaluation of our track tool, and we are confident that the proprietary architecture of our track tool is well-suited for the high throughput required in the next generation of distributed architectures.

Speaker Change: We are confident that the proprietary architecture of our track tool is well suited for the high throughput required in the next generation of the sub garbage rules.

Speaker Change: We are engaged with multiple customers for our PCB tool.

Speaker Change: We're expecting to do.

Given the progress for PSA with your product development.

Speaker Change: The evaluation in 2024.

Speaker Change: Turning to slide five for our products Sam.

Speaker Change: We estimate our product portfolio address a $16 billion market opportunity.

Speaker Change: This is now primarily driven by three major product groups carine trading and advanced packaging.

Speaker Change: We anticipate continued growth in this category and look to incremental revenue contributions from our newer products starting with a furnace. It was plentiful followed by a track on <unk> in 2025.

Speaker Change: Please turn to slide six.

Speaker Change: We remain committed to our medium term.

Speaker Change: $1 billion revenue target. We believe we can achieve this with a range of the market this year by product in the mainland China alone.

Speaker Change: We have achieved scale with a differential product that have been improving in China market and we have put the resource to in place to address international markets to be clear long term, we see an additional $1 billion plus opportunity from international markets.

David Wong: We are engaged with multiple customers for our PCVD tool, and we're expecting significant progress for PCVD product development and evaluation in 2024. Turn to slide 5 for our product sample. We estimate our product portfolio addresses a $16 billion market opportunity. Our business is now primarily driven by three major product groups, cleaning, plating, and advanced packaging. We anticipate continued growth in this category and look to make incremental revenue contribution from our newer products, starting with FURNACE in 2024, followed by TRACK and DCVD in 2025. Please turn to slide 6.

Speaker Change: Moving onto the customer please turn to slide seven.

Speaker Change: In China, we are market.

Speaker Change: Market leader in cleaning and premium tool was the sales to nearly every semiconductor manufacturers.

Speaker Change: Our sales and service team.

Speaker Change: Our JV deeper adoption of our products across this customer base beyond establish the payer market growth is being driven by a influx of were founded new interests.

Speaker Change: For 2023, rather 310% customers.

Speaker Change: He was our top customer at 18% of the sell side.

Speaker Change: <unk> was our second largest and a 15% <unk> was our third at 13%.

Speaker Change: We had a stronger contribution from second and third tier semiconductor manufacturers, including power analog Cmos image sensor and the current power semiconductors and other devices and some new customers total.

Speaker Change: Total second and third tier players represent about 30% of our 2023 sales.

David Wong: We remain committed to our medium-term, one billion dollar revenue target. We believe we can achieve this with a range of market this year by product in mainland China alone. We have achieved scale with a differential product that has been proven in the Chinese market, and we have put the resources in place to address the international market. To be clear, long term, we see an additional $1 billion plus opportunity from international markets. Moving on to the customer, please turn to slide seven.

Speaker Change: On the international front I am pleased to report that our large U S manufacturer qualify as the first SaaS comedian tool for revenue in the first quarter. We also plan to deliver the onshore CD backside cleaning and babble etch tool for this customer in the second quarter.

Speaker Change: Of 2017 for.

Speaker Change: This demonstrates a deepening.

Speaker Change: Our relationships, which we believe can lead to production orders.

Speaker Change: Furthermore, this enhances the ACM brand and position us to attract the new opportunities with other major global customers.

Speaker Change: Beyond the U S. We saw our first evaluation tool ultra <unk> fine.

David Wong: In China, we are a market leader in cleaning and cleaning tools with sales to nearly every semiconductor manufacturer. Our sales and service team are now achieving deeper adoption of our products across this customer base. Beyond establishing the payer, market growth is being driven by an influx of well-founded new entrants.

Speaker Change: Meaning tool at a major European based.

Speaker Change: Global semiconductor manufacturers in the fourth quarter.

Speaker Change: To support the growth we made a progress on our facility expansion in China and other regions. Please turn to slide eight.

Speaker Change: In China <unk>.

Speaker Change: Structure of our income production and R&D Center is nearly complete we expect initial production in middle 2024.

Speaker Change: In Korea, we are making progress with a key customer as noted in the prior call. We have increased our committed to support our objectives to address global market. We now have more than 50 employee in Korea.

David Wong: For 2023, we had three 10% customers. SMIC was our top customer at 18% of the sale. Cyan was our second largest at 15%, and 6MT was our third at 13%.

Speaker Change: Facility, including yourselves and administration.

Speaker Change: Scare production and the developer in the lab with a clean room to support the internal R&D and the wafer demos for the customer evaluation.

Speaker Change: And we are making initial plans to building a new factory.

Speaker Change: Land, we purchased early last year.

Speaker Change: We believe our strong commitment to Korea, we improving our leadership with our key Korean customer our resources in Korea are providing another basis to support international.

David Wong: We had a stronger contribution from second and third-tier semiconductor manufacturers, including Power, Analog, CMOS, Image Sensor, and current power semiconductors, and other devices, and some new customers. Total second and third-tier players represent about 30% of our 2023 sales. On the international front, I'm pleased to report that a large U.S. manufacturer qualified its first SAPS cleaning tool for revenue in the first quarter.

Speaker Change: Customers in the U S Europe and other parts of Asia.

Speaker Change: In the U S. We leased our facility in <unk>.

Speaker Change: Oregon last year to add to our service support and the demonstration capability for R&D and the customer activity in the U S and Europe.

I will now provide our outlook for the full year 2024, please turn to slide nine.

Speaker Change: In early January we introduced.

Speaker Change: Our 22020 for revenue outlook in a range of $6 50 to 725 million U S dollar.

Speaker Change: This implying 23% year over year growth and a beta point.

David Wong: We also plan to deliver the Ultra-CB backside cleaning and bevel edge tool to this customer in the second quarter of 2024. This demonstrates a deepening of the relationship, which we believe can lead to a production order. Furthermore, this enhances the ACM brand and positions us to attract new opportunities with other major global customers. In addition, beyond the U.S., we installed our first evaluation tool, UltraZ-SAPS-5.

Speaker Change: We are re.

Speaker Change: Yes.

Speaker Change: Terry.

Speaker Change: <unk> is today.

Speaker Change: We believe the China equivalent market will grow in 2000, and therefore, we expect our full year revenue growth for 2000, and therefore to outpace both.

Speaker Change: China growth and global growth rates.

Speaker Change: Now, let me turn the call over.

Speaker Change: Over to our CFO, Mark <unk>, who will review details of our fourth quarter and full year results Mark. Please.

Mark: Thank you David and good day, everyone. Please turn to slide 11, unless I note, otherwise I will refer to non-GAAP financial measures, which exclude stock based compensation unrealized gain loss on short term investments a reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release also unless otherwise noted.

David Wong: Canadian Tool, and a major UofR base. Global Semiconductor Manufacturers in the fourth quarter. To support growth, we made progress on our facility expansion in China and other regions. Please turn to slide 8.

Mark: Following figures refer to the fourth quarter 2023.

David Wong: In China, the construction of our Lin Gang production and R&D center is nearly complete, and we expect initial production in mid-2024. In Korea, we are making progress with the key customer as noted in their prior call. We have increased our commitment to support our objectives to address the global market. We now have more than 150 employees in Korea, with their facility including sales and administration, small-scale production, and the development lab with a clean room to support the internal R&D, and we have demos for customer evaluation.

Mark: Comparisons are with the fourth quarter of 2022.

Mark: I'll now provide financial highlights for the fourth quarter and full year of 2023 revenue was $170 3 million for the fourth quarter up 56, 9% revenue for single wafer cleaning Tahoe in semi critical cleaning was $122 3 million up 63, 9% for the full year 2023 this category.

Mark: Category grew by 48.0%.

Mark: Revenue for ECP furnace, and other technologies was $32 1 million up 59.0% for the full.

Mark: All year 2023. This category grew by 33, 4% revenue for advanced packaging, excluding ECP services and spares was $15 9 million up 15, 8%.

David Wong: And we are making initial plans to build a new factory on the land we purchased early last year. We believe in a strong commitment to Korea, and we're improving our relationship with our key Korean customers. Our resources in Korea are providing another basis to support international customers in the U.S., Europe, and other parts of Asia. In the U.S., we leased a facility in Oregon last year to add to our service support and demonstration capability for R&D and customer activity in the U.S. and Europe. I will now provide our outlook for the full year 2024. Please turn to slide nine.

Mark: For year 2023 of its category grew grew by 31, 5%.

Mark: Full year 2023 revenue was $557 7 million up 43, 4%.

Mark: Total shipments were $140 million for the fourth quarter down 29% for the full year 2023 shipments were $597 million up 11% gross margin was 46, 8% for the fourth quarter versus 49, 7% for the full year 2023 gross margin was 49, 8% versus.

Mark: 47, 4% in 2022 this exceeded our normal expected range of 40% to 45%. We do expect gross margin to vary from period to period due to a variety of factors such as sales volume product mix currency impacts.

David Wong: In early January, we introduced our 2024 revenue outlook in a range of $650 million to $725 million. This implies 23% year-over-year growth at Biddle Point. We are re- Territory; this is our look today.

Mark: <unk> expenses were $43 6 million for the fourth quarter up from $34 8 million R&D.

Mark: R&D was $28 8 million versus $17 8 million as we invest in our new product initiatives sales and marketing was $7 2 million versus $11 8 million. The decline in sales and marketing was primarily due to a significant reduction of costs related to promotional tools.

Mark: We believe the Chinese equipment market will grow in 2024. We expect our full-year revenue growth for 2024 to outpace both China's growth and the global growth rate. Now, let me turn the call over to our CFO, Mark, who will review details of our fourth quarter and full-year results. Mark, please.

Mark: G&A was $7 6 million versus $6 million.

Mark: Full year 2023, operating expenses were $154 4 million up from $117 4 million R&D was 15, 1% of sales sales and marketing was seven 4% of sales and G&A was five 2% of sales off for 2023.

Mark: For 2024, we are planning for R&D in the 16% range sales and marketing in the 7% to 8% range and G&A in the five 5% range.

Mark: Thank you, David. Good day, everyone. Please turn to slide 11.

Mark: Unless I note otherwise, I refer to non-GAAP financial measures, which exclude stock-based compensation and unrealized gain-loss on short-term investments. Reconciliation of these nine gap measures to comparable gap measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the fourth quarter of 2023. I'll now provide financial highlights for the fourth quarter and full year of 2023. Revenue was $170.3 million for the fourth quarter, up 56.9%. Revenue for single wafer cleaning, Tahoe, and semi-critical cleaning was $122.3 million, up 63.9%.

Mark: Operating income was $36 8 million for the fourth quarter up from $19 $2 million operating margin was 21, 2% up from 17, 7% for the full year 2023 operating margin was 22, 1% versus 17, 2% in 2022.

Mark: For the fourth quarter, we recorded a realized gain of zero point $5 million.

Mark: From the sale of short term investments recall that realized gains are included in the non-GAAP earnings income tax expense for the fourth quarter was $8 1 million versus $2 $7 million for the full year 2023 income tax was $19 4 million versus $16 8 million in 2022.

Mark: Net income attributable to ACM research was $28 7 million for the fourth quarter up from $12 6 million for the full year 2023, net income attributable to ACM research was $107 4 million versus $54 $8 million in 2022.

Mark: For the full year 2023, this category grew by 48.0%. Revenue for ECP, furnace, and other technologies was $32.1 million, up 59.0%. For the full year 2023, this category grew by 33.4%. Revenue for advanced packaging, excluding ECP, services, and spares was $15.9 million, up 15.8%.

Mark: Net income per diluted share was <unk> 43 in the fourth quarter up from 19.

Mark: Full year 2023, net income per diluted share was $1 63 versus <unk> 83.

Mark: I will now review selected balance sheet items cash cash equivalents restricted cash and time deposits for $304 5 billion at year end versus $326 5 million at the end of the third quarter.

Mark: Total inventory at year end was $545 4 million versus $507 4 million at the end of the third quarter the mix.

Mark: The full year of 2023, this category grew by 31.5%. For the full year of 2023, revenue was $557.7 million, up 43.4%. Total shipments were $140 million for the fourth quarter, down 29%.

Mark: It was split between raw materials.

Mark: $235 1 million work in process $81 4 million and finished goods inventory $228 9 million inventory also included finished goods at our own facilities.

Mark: As David said nearly all of the finished goods at our own facilities is expected to ship during the year 2024.

Mark: Capital expenditures were $15 million in Q4, and $61 9 million for the full year for.

Mark: For 2024, we expect to spend about $80 million in capital expenditures. This will be primarily to complete our investment in link gone.

Mark: For the full year 2023, shipments will be $597 million, up 11%. Gross margin was 46.8% for the fourth quarter versus 49.7%. For the full year 2023, gross margin was 49.8% versus 47.4% in 2022. This exceeded our normal expected range of 40 to 45%. We do expect gross margin to vary from period to period due to a variety of factors such as sales volume, product mix, and occurrence. Operating expenses were $43.6 million for the fourth quarter, up from $34.8 million.

Speaker Change: And we will also include remodeling the new headquarters for ACM, Shanghai and investments in Korea, and the U S. That concludes our prepared remarks now lets open the call for any questions that you may have operator. Please go ahead. Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again.

Speaker Change: Please wait for your name to be announced please standby, while we compile the Q&A roster one moment for your first question. Please.

Our first question comes from the line of CD to Silva with Roth.

Your line is now open.

Speaker Change: Yeah, Hi, David Hi, Mark Congratulations on the progress.

Speaker Change: Jonathan there can.

Speaker Change: Can you talk about the international customer it sounds like Youre, making progress there I'm just trying to gauge the pace of that as the guided 24 full year do you have some contribution from national customer and that assumption or would that be upside and as a potential first half timing or is it most likely be backend loaded second half.

Mark: R&D was $28.8 million versus $17.0 million as we invest in our new product initiative. Sales and marketing were $7.2 million versus $11.8 million. The decline in sales and marketing was primarily due to a significant reduction in costs related to promotion.

Speaker Change: Yeah.

Speaker Change: Okay. Thanks, Lee Okay at this tool and we shipped per year ago right than there are.

Speaker Change: So is that part of the engineered hardworking and then we have our first tool together acceptance. So this is why we got into the production mass production.

Lee: And then also I wanted to see that the this is specific or a SaaS mega sounding a tool really address the customer needs and we can see you know get a good or a Canadian performance and also a modularized audio consumption. So that's really come.

Mark: DNA was 7.6 million versus 6 million. For the full year of 2023, operating expenses were $154.4 million, up from $117.4 million. R&D was 15.1% of sales, sales and marketing was 7.4% of sales, and G&A was 5.2% of sales, all for 2021. For 2024, we are planning for R&D in the 16% range, sales and marketing in the 7% to 8% range, and G&A in the 5.5% range. Operating income was $36.0 million for the fourth quarter, up from $19.2 million.

Lee: Got some leg of the dual and where we believe there's definitely you know first of all qualification would either to their their additional order for the same customer right. So Meanwhile, and as mentioned we also have a secondary different tool, which is the back side and then also balcony.

Lee: It was order by order by the same customer and ship them and in the second quarter of this year.

Speaker Change: So I want to see that is this is a key customer in the U S and we want this to be another example.

Speaker Change: Example, and also encouraging other big player and adapter are finished.

Speaker Change: Technology.

Speaker Change: So we're seeing that sort of either go.

Speaker Change: So there are the com and also there's a.

Speaker Change: International I'll call their revenue contribution to our year to something for a forecast we can't we couldn't see that too.

Speaker Change: Yeah, I'd just add.

Speaker Change: For 2020 for I mean, a lot of things go into our forecast and we don't have a <unk>.

Speaker Change: 24 will be a building year for us for the international and we'd expect some additional contribution.

Mark: Operating margin was 21.2 percent, up from 17.7 percent. For the full year 2023, operating margin was 22.1 percent versus 17.2. 2022. For the fourth quarter, we recorded a realized gain of $0.5 million from the sale of short-term investments. Recall that realized gains are included in the non-GAAP, income tax expense for the fourth quarter was $8.1 million versus $2.7 million. For the full year 2023, income tax was $19.4 million versus $16.8 million in 2022.

Speaker Change: Whether we get an order that ships.

Speaker Change: One or several tools that shifts this year and next year that will depend on you know how big it can be for us.

Speaker Change: Okay.

Speaker Change: And my second question is can you just explain again the shipments and what the delays with the dynamic was there anything cash on the prepared remarks.

Speaker Change: Yeah, I think in the Q3, we also get a call or a mention about that the DNA and it's because of our customer there they're building the plan and there. So then you know I call there.

Speaker Change: I call the planned delay or the inflation not not enough resource or full of paying out not another fast enough.

Speaker Change: Anyway, I just couldn't get to you and that's been going on so those those portion of a delay.

Speaker Change: Just that it won't be a devotee deliver in 2024 and.

Speaker Change: That's also added to our shipment you know those two has been built already it's going to also save the cash was spent last year already so we'll see that happen and.

Mark: Net income attributable to ACM Research was $28.7 million for the fourth quarter, up from $12.6 million. For the full year of 2023, net income attributable to ACM Research is expected to be $107.4 million versus $54.8 million in 2022. Net income per diluted share was $0.43 in the fourth quarter, up from $0.19.

Speaker Change: I would say that and also the total human there are we expecting towards Anthony before and there will be a you know.

Speaker Change: Quite an increase we believe in it.

Speaker Change: This is really at a higher than there are called the revenue increase right and compared to <unk> three.

So that's another.

Speaker Change: They are going to year end for us and.

Speaker Change: It was unbelievable.

Speaker Change: Okay. It sounds like the momentum that my last question is around the the overall demand environment.

Speaker Change: I'm trying to stand in China, whether the memory market has stabilized and capacity has increased mccann across NAND and DRAM and <unk>.

Speaker Change: Maybe if someone like six FTE actually progressing to DRAM production versus development effort.

Mark: For the full year 2023, net income per diluted share was $1.63 versus $0.83. I will now review selected balance sheet items. Cash, cash equivalents, restricted cash, and time deposits were $304.5 million at year end versus $326.5 million at the end of the third quarter.

Speaker Change: Yeah, I mean, you can see that there are six six Mds custom.

Speaker Change: Customer you know year 2023, right. So we're expecting you know this is the memory business continue to grow.

Speaker Change:

Speaker Change: Again, it's all there.

Speaker Change: <unk> memory in China is still a multiyear expansion.

Speaker Change: And so we see that there is.

Speaker Change: It is good there.

Market for US and also we see that continue to grow.

Alright, thanks, guys Congrats again.

Mark: Total inventory at year-end was $545.4 million, versus $507.4 million at the end of the third quarter. The mix was split between raw materials, 235.1 million, work in process, 81.4 million, and finished goods inventory, 222.8 million. Inventory also included finished goods at our own facilities. As David said, nearly all of the finished goods at our own facilities are expected to ship during the year 2024. Capital expenditures were $15 million in Q4 and $61.9 million for the full year.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: Next question please.

Speaker Change: Next question comes from the line of Charlie Chan with Morgan Stanley. Your line is now open.

Charlie Chan: Thanks for taking my questions David.

Charlie Chan: Mark.

Charlie Chan: Happy Chinese new year and our.

Charlie Chan: <unk> five <unk> and congrats for a very solid 2023.

Charlie Chan: Results.

Charlie Chan: My first question is actually on the.

Charlie Chan: Full year guidance, because I got that.

Charlie Chan: <unk> debt.

Charlie Chan: Your ACM Shanghai empty they have a pre Murray 234.

Charlie Chan: Outlook.

Charlie Chan: Going to grow more than 30%.

Speaker Change: <unk> sorry.

Speaker Change: 37% Y on Y growth, so I calculate your <unk>.

Mark: For 2024, we expect to spend about $80 million in capital expenditures. This will be primarily to complete our investment in Lingon, and we'll also include remodeling the new headquarters for ACM Shanghai and investments in Korea and the U.S. That concludes our prepared remarks. Now, we open the call to any questions that you may have. Operator, please go ahead.

Speaker Change: <unk> since you're asking the ACM are it's growing like 23% y on y.

Speaker Change: The disc.

Speaker Change: Discrepancy between your ACM, Shanghai entity versus the parent company.

Speaker Change: Yeah, well you know there.

Speaker Change: There is a slight difference.

Speaker Change: Like a revenue recognition rule and where you'll see you know is a Chinese the gap versus the U S. GAAP. So that's the primary reason show the difference or both.

Speaker Change: Both.

Speaker Change: Going to forecast it.

Speaker Change: And generally that is the.

Speaker Change: U S GAAP.

Speaker Change: <unk> will be first of all take a long time your valuation and offer that you can't recognize repeat the order just on the shipment right, but in China.

Operator: Thank you. As a reminder, to ask your question, you'll need to press star 1-1 on your telephone. To withdraw your question, please press star 1-1 again. Please wait for your name to be announced.

Speaker Change: Is that you have to know that as new or is that maybe the order you have to really install and basically accept you know kind of at your dish acceptance.

Speaker Change: By their customer that you can record revenue.

That's it for the show.

Speaker Change: I call the revenue difference.

Speaker Change: In other words, probably you can see.

Operator: Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from the line of Suji DeSilva with Rothschild. MKM, your line is now open. Yeah, hi, David. Hi, Mark.

Speaker Change: China is a forecast I mean that is a we have a lot of her.

Speaker Change: The new tool and the new customer right, that's what would be the.

Speaker Change: Quickly can be recognized revenue versus the U S. A recognition rule so that that's a difference that we see there.

Speaker Change: I see thanks.

Thanks, David.

Suji DeSilva: Congratulations on the progress. Great job there. Can you talk about the international customer? Sounds like you're making progress there. Just trying to gauge the pace of that. As you guided 24 full years, do you have some contribution from the national customer in that assumption? Or would that be upside? And is that potential first half timing?

Speaker Change: My next question is about the.

Speaker Change: China, Capex since and ability.

Speaker Change: I mean right now as you said right.

Speaker Change: Sure.

Speaker Change: Local C P&C, but.

Speaker Change: You also see that some of your major customer there gross margin already dropped to like a 10%.

Speaker Change: Gross margin.

Speaker Change: Do you worry about.

David Wong: Or is it most likely back-end loaded? Okay, thanks, Suji. Okay, I think this tool was shipped a year ago, right? Then there are Service Project Engineer, Hardworking, and then we have our first two together, Acceptance.

Speaker Change: Sustainability so any.

Speaker Change: Kind of a science or leading indicators we should.

Speaker Change: We should you know.

Okay attention to trying to check the.

Speaker Change: China Capex since that ability.

Speaker Change: Yeah, well I should say there as we said you know a couple of times before is the China Fab is doing the Montana expansion.

David Wong: So this is what we get into production, you know, their mass production. And also, I want to say that this specific SAP megasonic tool really addresses the customer needs. And we can see, you know, get a good Canadian performance and also much less particle consumption. So that's really, you know, the customer-like aspect of the tool. And we believe this definitely, you know, first of all, qualification will lead to their additional order, you know, for the same customer. Right. So meanwhile, and as mentioned, we also have a secondary, different tool, which is the backside of the Bioclean. It was ordered by the same customer and was shipped in the second quarter of this year.

Speaker Change: That is the logic or memory right and also you know a lot of or I call. The mature nodes as they relate to the EV IGT is still you know.

Speaker Change: It's still in there.

Speaker Change: I called it products.

Speaker Change: In fact in the building process.

Speaker Change: Also I wanted to say another thing is the consumption of the chip.

Speaker Change: Mature nodes in China is.

Speaker Change: As a way higher than capability can be produced in China right. So you look at that a gap until say next few year in China and.

This is a market we will continue to grow.

Speaker Change: Okay got you and so one.

Speaker Change: One last question ill get back to the queue.

Speaker Change: No.

Speaker Change: A question to Mark since you are ramping up the <unk>.

Mark: Nothing new campus can you give us.

Mark: Some update the.

Mark: Gross margin and Opex assumption for 2024.

Mark: Yeah, Hey, Charlie Thanks, Thanks for asking so yes.

David Wong: So, Oversee that is this a key customer, you know, in the US, and we want this to be another example and also encourage other big players to adapt to our differential technology. Right. So, we're saying that's what will be their good outcome.

Mark: Yes.

Charlie Chan: Say it in my prepared remarks, I gave some detail there, but I'll go ahead repeat it.

Charlie Chan: We're anticipating our target model for gross margin is unchanged at the $40 to 45%, obviously, we've done better than that for the last several years, but that's that's kind of be at the margin level that.

David Wong: And also, there's, of course, international, I call their revenue contribution to our year to something before forecast, you know, we can't we can see that too. Yeah, Suji, I just add for 2024. I mean, a lot of things go into our forecast. You know, 2024 will be a building year for us for the international business, and we'd expect some additional contribution. You know, whether we get an order that ships or, you know, for one or several tools that ship this year or next year will depend on, you know, how big it is. OK. And then the second question is, can you just explain again the shipments and the delays, what the dynamic was there? I maybe didn't catch that in the prepared.

Charlie Chan: That's our target level and then.

Charlie Chan: For the Opex levels and these are non-GAAP numbers.

We expect R&D continue to invest pretty strong in R&D.

Charlie Chan: You should always expect.

Charlie Chan: We're a growing company.

Charlie Chan: To spend at about <unk>.

Charlie Chan: 60% level is as our outlook for non-GAAP in 2024, our sales and marketing we expect in the 7% to 8% range and then G&A are about five 5%.

Speaker Change: Okay, Okay yeah.

Charlie Chan: Yes.

Yeah. Thanks for the.

Charlie Chan: We kept the guidance you bet.

Speaker Change: You bet. Thank you.

Speaker Change: As a reminder to ask a question you will need to press star one on your telephone.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Mark Miller with the Benchmark Company. Your line is now open.

Mark Miller: I believe you well first of all congratulations on another great quarter, but just.

David Wong: Yeah, I think the Q3, we also mentioned that today. And that's because of our customer. They're building a plan, and there's certain things I call the plan delay or the installation not enough, either resources or, you know, follow the plan, not fast enough. But anyway, there's continuing investment going on. So that portion of the delay, as I said, will definitely be delivered in 2024. And you know, that's also added to our shipment, you know, those two have already been built. It's going to also, you know, save cash. We spend a lot already.

Mark Miller: Just what are the kind of a little more into the opex in the December quarter, you did mentioned the SMA.

Mark Miller: Sales and marketing was down.

Mark Miller: You said it was because of a.

Mark Miller: Tim on the system.

Speaker Change: I'm confused why that fell so much.

Speaker Change: Yes, it was a significant decline in the Indiana in the sales and marketing promotion tools. So we.

Speaker Change: We we took that out of the sales and marketing expense going forward.

Speaker Change: You won't see that expense level in the sales and marketing and.

Speaker Change: And so we've looked at it kind of for the full year sales.

Speaker Change: Sales and marketing was about seven 4% on a non-GAAP basis.

Speaker Change: And so we expect that sales and marketing level to be kind of in the 7% to 8%.

Speaker Change: And non-GAAP next year.

Speaker Change: Can you give us a little bit you said you had a lot of problems under one could you give us a little more color on what's going on with him quarles and timing of quality.

David Wong: So we'll see what happens. I would also say that the total shipment we're expecting in 2024 will be, you know, quite an increase. We believe it will increase at a rate higher than their quarterly revenue increase, right? Compared to 2023. So that's another reason I consider it a great year for us in 2019.

Speaker Change: In terms of when do you expect revenue generation.

Speaker Change: In terms of yeah, David He is asking about our E valves at our customers maybe I'll, let you address that FERC and then I can add to it in general right. Yeah. Okay. Yeah. So I think Mark you know our finished goods inventory is largely comprised of our evaluation tools that our customers and so that I think.

David Wong: Okay, that sounds like good momentum. My last question is around the overall demand environment. I'm trying to understand and trying to know whether the memory market is stabilized and capacity is increasing again across NAND and DRAM, and maybe someone like CXMT is actually progressing to DRAM production versus development.

Speaker Change: David Yeah, let me see that is a obviously there's a.

Speaker Change: Our finished goods in the costs in the customer site for evaluation and mostly the first rule.

Speaker Change: First of all it can be either first of a new customer right, especially their first time by us they want to make sure those mature and not just qualify for to yourself some kind of quantified the whole production line to look at a yield to come out that takes some time right. Also there's also the first tool is.

Speaker Change: With the new brand new tool and then we need a customer to a real we call. It a beta tool right you need a real evaluate that and that is sometimes take a pause as you know one year year and a half you know it depends on how the other tool no first building deemed material how much of it is so those kind of tool where we consider as our.

Speaker Change: First of all.

David Wong: Yeah, I mean, you can see that our 6MT is the authoritative customer for the year 2023, right? So we're expecting this memory business to continue to grow. And, Again, you know, it's all there, memory in China is on a multi-year expansion. And so we see that as a good market, you know, for us, and also we see that community growth. All right, thanks, guys. Yeah, thanks, Suj

Speaker Change: Okay and just final question you were you previously said you were doing more investment in Korea to get more business from SK Hynix can you give us an update on what's going on there.

Speaker Change: Okay, great. So hany, if actually the real long term customer right in there.

We're fully engaged with the customer I mean, hynix right now because we're a real emphasize our investment also expansion.

Speaker Change: On divorce in auto manufacturing in Korea, we do have about 850 employee in Korea right now as I mentioned, we bought land and it'll go through also through building a factory there.

Speaker Change: There you know future a proper time.

Speaker Change: So key point I'm trying to see that as a we have a mother of a tool like cleaning cover Brady.

Operator: Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Charlie Tan with Morgan Stanley. Your line is now open.

Speaker Change: Andy including furnace and then they also had the vital piece of the BD and also attract so orders five tool where you know we're trying to engage with the customary hynix and there because of the relationship and also because of our local R&D force and also we offer customer with the Finnish or a product and differentiated technology.

Charlie Tan: Thanks for taking my questions. David, Mark, happy Chinese New Year and Gongqi Facai, and congratulations on a very solid 2023 results. So my first question is actually on the four-year guidance because I had the impression that your ACM Shanghai entity has a pre-numerary 2024 outlook room to grow more than 30 percent. I remember you were like 37 percent y-on-y growth.

Speaker Change: D and which is a quieter interests or I gotta inches from the customer in Korea.

Speaker Change: Thank you.

Speaker Change: Thanks Mark.

Speaker Change: Thank you.

Speaker Change: A reminder to ask a question you will need to press Star one one please wait for your name to be announced.

Speaker Change: One moment for our next question please.

Speaker Change: Our next question comes from the line of Christian Schwab with Craig Hallum Capital. Your line is now open.

Christian David Schwab: Hey, guys.

Christian David Schwab: Fantastic year, and great quarter, So I'm trying to better understand you know the two or three reasons better either from a product category standpoint, or a customer standpoint.

Charlie Tan: So I calculated your midpoint, suggesting the ACM-R is growing like 23 percent y-on-y. So what was the discrepancy between your ACM Shanghai entity versus the parent company? Yeah, well, you know, there's a slight difference.

Christian David Schwab: Your conviction and your ability to outgrow Wi Fi not only in China, but also globally.

Christian David Schwab: Year over year.

Speaker Change: Okay great.

Speaker Change: I think you know their HCM there were when I started beginning you know even from the Bay area right and ACM. There are R&D philosophy is there I would call differentiation right and each product we're building like cleaning or even though that is saps tebo and Tahoe is a pretty odd division product.

David Wong: I got a revenue recognition rule, and we're using, you know, either Chinese GAAP versus US GAAP. So that's the primary reason to show the difference between both. I got a forecast. Yeah, in general, see, that is a US, you know, GAAP will be your first tool, take a long time to evaluate. And after that, you can recognize, you know, repeat orders, just on the shipment, right? But in China, GAAP is you have to, no matter whether it's a new or a repeat order, you have to really install and basically accept, you know, kind of initial acceptance by their customers, then you can work on revenue. So that's a different show their, I call their revenue difference.

Speaker Change: Same thing for the cooperating so our go either building the eventual product in this moment why did he has been accepted by the local customer in China.

Speaker Change: And with those the debenture product and the technology.

Speaker Change: We can penetrate or getting the international example, he has the ability to do that.

Speaker Change: And also we'll have a one bigger a manufacturer in the U S. Adapter SaaS already also have are a European company and also tablets.

Speaker Change: Canadian two or.

Speaker Change: Beyond that it is the next one is our Tahoe Opdivo Plaza, we have a super critical steel to dry.

Speaker Change: Powell with Diebold dual that'd be real b.

Speaker Change: Exciting for their.

Speaker Change: Patterned wafer comedian too right and beyond that is also I said that we have also.

Speaker Change: And for our photos, EOD and including copper plating and it was another very kind of the product and to be able to penetrate international market.

Speaker Change: So as I say that is of course, what you need to give out a piece of CBD in the track also has are all proprietary differential design point.

David Wong: In other words, probably you can say China, the forecast means that we have a lot of, you know, probably a new tool and a new customer, right? That's what can be recognized revenue versus the US recognition rule. So that's, that's the difference we see there. I see. Thanks, David.

Speaker Change: ACM Realty a developer there you know I call just the.

Speaker Change: The finished product, which is a real offer differentiation offer there are different the benefit than all other competitors doing and that's our covenants and also our Blackhawk.

Speaker Change: Blackhawk, we can put a tool and Sally international market.

Charlie Tan: So, my next question is about China CapEx sustainability, right? I mean, right now, as you said, it's for local sufficiency. But you also see that some of your major customers' gross margins have already dropped to like 10% gross margin. So I'm a little bit worried about sustainability. So any kind of signs or leading indicators we should pay attention to to check the China Capex sustainability? Yeah, well, I should say there, as we said, you know, a couple of times before, that China's fab is still in the multi-expansion phase, no matter the logic or memory, right? Also, you know, a lot of them I call them mature nodes. It's very related to the EV, and IGBT.

Speaker Change: Great. So.

Speaker Change: Congrats again on a very differentiated and better product than your competitors. Just did a quick last follow up then is on the international front.

Speaker Change: You know how much of the year over year growth are you looking for them. So.

Speaker Change: From that I guess I know it was kind of asked earlier, but you mentioned it numerous times is what why you thought you would outgrow the market. So I'm just wondering if you're willing to provide any clarity more clarity there.

Speaker Change: Yeah, Hey, Christian I'll I'll hit that so in terms of our outlook I mean the range.

Christian David Schwab: We have a pretty small contribution from from international this year, it's still going to be you know kind of development. So really substantially you know most most of that growth that we're planning for in 2024 as far as from the China market the mainland China market.

Mark: It's still, you know, it's still what I call the product in the fab, in the building process. Also, I want to say another thing: the consumption of chip, especially mature nodes, in China is way higher than what can be produced in China. So you look at that gap; I'm still saying in the next few years, China and WFG, this market will continue to grow. Okay, gotcha. So yeah, one last question; I will bring you back to the queue. So a question to Mark, since you are ramping up the Lingang new campus, can you give us some updated gross margin and also OPEX? Assumption for 2024. Yeah, hey, Charlie.

Christian David Schwab: New product cycles customer additional customer traction.

Speaker Change: Okay, and then and then I guess my very last question. Then is you know the Tam for your products outside of China globally.

Christian David Schwab: Substantially larger.

You know how many years do you think is reasonable for us to assume.

Christian David Schwab: It takes.

Christian David Schwab: Broad based success internationally. It sounds like this year was a great building here initial shipments.

Christian David Schwab: Starting in 'twenty for us is that.

Christian David Schwab: 'twenty six 'twenty seven or twenty-five event or is it too early to do.

unknown: Yes, Kristina this is a very good question I think there the way we are doing right now obviously, it's quite a quicker or faster growth in the mainland China market right. There's a lot of product with quantify here now.

Mark: Thanks for asking. So, yeah, I said in my prepared remarks, I gave some detail there, but I'll go ahead and repeat it. You know, we're anticipating our target model for gross margin to be unchanged at 40 to 45%. Obviously, we've done better than that for the last several years, but that's kind of the margin level that, you know, that's our target level.

Kristina: So those are I think are all go we're saying you know Richard 1 billion dollar even by our China market only right. We're thinking next few year, we should be reaching that goal and the same thing as the you know.

Kristina: In the you know in a couple of years three years ago. We started also global market expectations I mean penetration. So the key is really how are we executing our international sales plan.

Kristina: Now we have or you know are hiring good people and a sales Guy and Korea are actually also in the U S and in Europe, and we're seeing that there are quite a bit of progress.

Mark: And then, for the OPEX levels, and these are non-GAAP numbers, we expect R&D to continue to invest pretty strongly in R&D, and you should always expect, as we're a growing company, to spend at about a 16% level is our outlook for non-GAAP in 2024. Sales and marketing, you know, we expect in the 7 to 8% range, and then G&A, about five and a half Hmm.

Kristina: Let's put this way you know for there.

Kristina: The national market and as we talk to the customer and we're looking for at the back of it again, you know differentiation right.

Kristina: Was that in the mine and there as I mentioned a couple of product. We have right now we don't have to come with us as their first you know I call. There a U S customer that tool, we see more of or a customer me about additional or others, who will do so we see that happen, but then you're asking was year is hard to really give you a precise.

Kristina: But I think as the as I said will have a bigger.

Kristina: Revenue with a strong financial supporting and phone sales here.

Mark: Okay. Okay. Thanks. Thanks.

Kristina: Also the patient product definitely we're penetrated.

Charlie Tan: Yeah. So, so, yeah, thanks for the recap. Those are just guidelines.

Kristina: And so the international market.

Speaker Change: You are asking.

Speaker Change: Next few year is a very exciting.

Speaker Change:

Speaker Change: You know quickly excuse me in on plan and to reach that goal and eventually that is amazing couple of time before we owned the half of them being in China have them also have been in China right. So if I could just add the real revenue contribution actually more bigger outside of China.

Operator: You bet. Thank you. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone.

Speaker Change: Yeah.

Operator: One moment for our next question. Our next question comes from the line of Mark Miller with the Benchmark Company. Your line is now open.

Speaker Change: Thank you that's great no other questions. Thanks, guys.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Charlie Chan with Morgan Stanley. Your line is now open.

Charlie Chan: Hi, Thanks for taking my question again so.

Mark Miller: I believe you. Well, first of all, congratulations, another great quarter, but I just wanted to get a little more into the OPEX in the December quarter. You did mention the SMA, www.quinnbolton.com demo systems. I'm confused why that fell so Yeah, we saw a significant decline in the Sales and Marketing Promotion Tools. So we took that out of the sales and marketing expense. And going forward, you won't see that expense level in sales and marketing. And so we look at it kind of for the full year; sales and marketing was about 7.4% on a non-gap basis.

Charlie Chan: I think the.

<unk>.

Charlie Chan: The new customer.

Speaker Change: Contribution.

Alright.

Speaker Change: So it wasn't in our radar screen.

Speaker Change: I'm not sure why.

Speaker Change: Why.

Speaker Change: She then becomes such a big customer and.

Speaker Change: If you can provide us some more details is that purely.

Speaker Change: 12 inch equipment or also including some A&P equally Matt. Thank you.

Speaker Change: Yeah, I think their primary we sell for the Shinhan is a 12 inch tool right and also their expansion neither mature node. So we actually saw a lot of or our oh, the bench, they're probably the largest or the banshee a customer right now and policy in China.

Mark: And so we expect that sales and marketing level to be kind of in the seven to 8% non-gap. Can you give us a little bit? You said you had a lot of quals underway. Can you give us a little more color of what's going on with your quals and timing of quals?

Speaker Change: But they also buy deploy for right. So that's the way a primary driving that become the second largest customer in 2023.

Speaker Change: And looking forward and then also where you know a very good or Galician and engage with them and are cooperating offer owners and also on enlighten. There. So that's another individual can say, if our Michigan right and there is great great customer and the we're happy with our I said that.

Operator: terms of when you expect revenue generation. Oh, in terms of – yeah, David, he's asking about our e-vows from our customers. Maybe I'll let you address that, and then I can add to it. In general, right?

Speaker Change: Our debenture tool b.

Speaker Change: <unk> largely deploy and in machine into the production line.

David Wong: Yeah. Okay. Yeah. And so that's – I think, Mark, our finished goods inventory is largely comprised of evaluation tools at our customers. And so I think – yeah, David. Yeah. Let me see that.

Speaker Change: Okay.

Yeah. So this is a great business right, so and assuming a cut.

Speaker Change: <unk>.

Speaker Change: It sounds you're.

Speaker Change: No you are about the U S export control before you're shipping to.

David Wong: Obviously, there are finished goods on the customer side for evaluation, mostly the first tool. Yeah. Yeah. Yeah. Yeah. And those first two can be their first for a new customer, right, especially their first time by us. They want to make sure those two tools and not just qualify for the tool itself. Sometimes they've qualified the whole production line to look at the yield to come out. That takes some time, right?

Speaker Change: Kosmos in Green she net right.

Speaker Change: Right assumption.

Speaker Change: Well I mean were Australia follow all of their asthma control rule Ray answered here and for those whatever you know restrict their customer we have to be real carefully you know U S. Pos right.

Speaker Change: Personally the wall and also you know now you say technology, Yeah. So we're pretty very company and managing and control and then a follow there are strictly with the standard out there are excellent control of a U S.

David Wong: Also, there's also the first tool is a pretty new, brand new tool, and then we need a customer to really, we call it a beta tool, right? You need a real evaluation of that, and that can sometimes take a process, you know, one year, even a year and a half, you know, depends on how that other tool, you know, first building the material, how much it is. So those kinds of tools will be considered our, you know, first. Okay, this final question. You previously said you were doing more investment in Korea to, I guess, get more business from SK Hynix. Can you give us an update on what's going on?

Speaker Change: Okay. Okay. Thanks, David.

Speaker Change: Next question is about the.

Speaker Change: The advanced memory HBM so.

Speaker Change: Okay, Ken coming took it though you're.

Speaker Change: Opportunity in.

Ken: Korea for the HPN production line I think we asked that question last quarter as well and also there is some of the recent news about.

Ken: China May also have the own HPN production, so Ken coming come in about your potential opportunity at <unk>.

Ken: Cory I know so China customers.

Cory: Yeah, well, let this way obviously you know hynix the number one provider and they also take a loveseat either H B M.

David Wong: Okay, great. So Hynix actually is a real long-term customer, right? And we're fully engaged with the customer, I mean, Hynix right now, because we really emphasize our investment, also expansion, our R&D force, also manufacturing in Korea. We do have about 150 employees in Korea right now. As I mentioned, we bought the land, and it will also go to building a factory there at a proper time.

Cory: And I. Thank all of our current product devotee evolved their process and also we see H B M. Either you know this is a copper plating tool right. You know if he has to be ordered the packaging and whatever they need it so that the next two away I'll walk you know.

Cory: Closely with Hynix.

Cory: And there.

Cory: You know I should say the rest of it either to augment our photos and we're working with them to them. So there's a lot of her including cleaning and by the way of actual other company other than were sold them you know seismic as honey or.

Cory: Working with their findings too so it's a very good opportunity.

Cory:

Cory: Hey, there I call it a demand and a greater JV partner there they need a lot of her.

David Wong: So, the key point I'm trying to say is that we have multiple tools, like cleaning, copper plating, and an including a furnace, and we also develop PCBs, and also track. So, all these five tools, we're trying to engage with the customers in Hynex, and because of our relationship, and also because of our local R&D force, and also we offer customers differential products and differential technology, which is quite their interest, or we get interest from the customers in Korea. Thank you. Thank you. As a reminder, to ask a question, you'll need to press star 1 1.

Cory: Your friendship technology, you know further supporting an H D M developing in the future.

Cory: In China, It really isn't that much if we got here right now really right is just the you know not much of what we have right now.

Cory: So in other words, we're really focused on the outside China for H B M expansion for the business opportunity.

Speaker Change: Yeah. So so based on your comments and also.

Speaker Change: They're a global equipment vendors I did talk about.

Speaker Change: Actually it's easier.

Speaker Change: Uh huh.

Speaker Change: Global SP revenue.

Speaker Change: From the memory.

Speaker Change: So why.

Speaker Change: Hi, next you've done your kind of top customer or do you think do you see your hynix.

Operator: Please wait for your name to be announced. One moment for our next question. Our next question comes from the line of Christian Schwab with Craig Hallam Capital. The line is now open.

Speaker Change: Okay contributes more than 10% revenue given H b an opportunity now so the memory spending recovery.

Speaker Change: Uh huh.

Speaker Change: Well I mean, obviously the more that I mean other than hydro it wasn't looking for other player right.

Christian David Schwab: Hey, guys, fantastic year and great quarter. So I'm trying to better understand, you know, the two or three reasons better, either from a product category standpoint or a customer standpoint, your conviction and your ability to outgrow WFE not only in China but also globally, year over year. Okay, great. I think, you know, the ACM, we started beginning, you know, even from the Bay Area, right, and ACM, our R&D philosophy is there, we call it differentiation, right, and each product we're building, like cleaning, you already know that, steps, you know, Tebow, and Tahoe is pretty much our differential product. And the same thing for the cover plating.

Speaker Change: Can you hear us.

Speaker Change: Hum in the memory market H B M is really booming and that's key here. So we see that there.

Speaker Change: Demand there as I mentioned right. This is a.

Speaker Change: Ross you know Canadian copper plating is real demand there are I don't know what's coming.

Speaker Change: It comes back to 10%.

Speaker Change: It's hard to predict right now.

Speaker Change: And I wouldn't see right, especially the second half year or next year is really where we wanted something.

Speaker Change: They'll recover from DRAM market.

Ross: Okay got you thanks, David.

Speaker Change: Thank you. Thank you.

Speaker Change: Our next question please.

Speaker Change: Our next question comes from the line of Edison Lee with Jefferies. Your line is now open.

Edison Lee: Thank you.

Edison Lee: Thank you for taking my question, so marketing question ratios on a great quarter.

Edison Lee: Just one just one question, what's your sort of contemplation of the three customers for 2023.

David Wong: So our goal is building a differential product which, at this moment, has been widely accepted by the local customers in China. And with that differential product and the technology, I think we can penetrate or get into the international market, right? An example is that we already have the Panix, you know, and also we have one bigger manufacturer in the U.S., Adaptive Steps, already, and we also have a European company, and also Adaptive Steps, do some cleaning, too. Beyond that, I think the next one is our Tahoe, our Tebow, plus we have a supercritical CO2 dry, with Tahoe, with Tebow, too, will be real, be And beyond that, as I said, we also have, you know, the furnace, and for furnace ALD, and including cover plating, and it was another very candid product, and to be able to penetrate the international market. So, as I say, that is, of course, where you need to develop a PCB, and the track also has a proprietary differential design point.

Edison Lee: <unk> amounted to almost 50% of the rescue so can you give us some color as to whether you think that those top three customers will continue to be top 10 customers in 2024.

Edison Lee: And what is your expectation on the contribution to the top three customers in 2024.

Speaker Change: Yeah actually I look at them, though this year's or Oh order you know he is right and there's probably a customer continue I think it will grow right.

Speaker Change: It probably is do our major customer who also see there you know additional body of our home. They have also their expansion plan and there are probably some antennas. The building two fab this year and also their bidding probably next year.

Speaker Change: Three 5% with Hana as the right. So that's another bigger as either a copper customer will come back you know you are somebody for a revenue contribution.

Speaker Change: Maybe a related question is that based on your revenue guidance at the midpoint.

Speaker Change: Price quantity, a 20% plus growth.

Speaker Change: And so thats.

Speaker Change: Significantly below the growth rate in 2023, So do you think the key driver there is.

Speaker Change: Just some digestion period or is it just metro taking time for the evaluation tools to be recognized as revenue. So what are the key factors for a slowdown in terms of the country.

Christian David Schwab: So ACM really developed their, you know, I call this the differential product, which is real offer differentiation, offering their different benefit than other competitors are doing. That's our confidence and also our, you know, proven record; we can put a tool and sell it in the international market. Great.

Speaker Change: Yeah, I think the key driving force is I wanted to see that our Chinese China a bit.

Speaker Change: The market is continue you know people will say, maybe I mean flighty.

At least a flat obviously that is number one are important but they are the most embody that we'd have a game for our you know I call there a higher growth rate either because wherever cause email every new customer coming and also we have or a gain on market share from existing customer and also do.

Mark: So... Congratulations again on a very differentiated and better product than your competitors. Just a quick last follow-up, then, on the international front, you know, how much of the year-over-year growth are you looking for from that? I guess I know it was kind of asked earlier, but you mentioned it numerous times as why you thought you would outgrow the market. So I'm just wondering if you're willing to provide any more clarity, any more clarity there. Yeah, hey Christian, I'll hit that.

Speaker Change: Over a megaphone is what do the more contribution.

Speaker Change: This year and for revenue right. So that's all that added together that are you know give us a basis to our forecasts are.

Speaker Change: Close rate and the higher then there you know and grocery at all the public market in China.

Speaker Change: Okay and maybe the last one is that for 2010 before working as soon as the percentage of overseas revenue and your guidance.

Speaker Change: Yeah, Hey, Ed can we didn't we're not we didn't break it out but did we did a couple of other questions about that we mentioned it wouldn't be a very significant contribution 2024, we expect that to build in the coming years, but it's not a very significant piece it's.

Christian David Schwab: So in terms of our outlook, I mean, the range, we have a pretty small contribution from the international market this year; it's still going to be, you know, kind of development. So really, substantially, most of that growth that we're planning for in 2024 is from the Chinese market, the mainland China market. New product cycles, customers, additional customer traffic. Okay, and then I guess my very last question, then, is, you know, the tamper with your products outside of China, you know, globally, is substantially larger. You know, how many years do you think it is reasonable for us to assume it takes for broad-based success internationally? It sounds like this year was a great building year, initial shipments, you know, starting in 24. Is that a, you know, 26, 27, or 25 event, or is it too early to know? Yeah, Christian. This is a very good question.

Speaker Change: We think it'll be bigger than it was this year and so you got the numbers.

Speaker Change: The international numbers.

Speaker Change: Shortly but.

Speaker Change: It's it's not it's not going to become a I wouldn't expect it to be more than 10%.

Speaker Change: Yeah, but I just think grocery is higher right I mean, obviously, there's some a number of itself, but then the real episodes a number like that that you know with deal.

Speaker Change: Accretion number of the total revenue.

Speaker Change: Right. Okay got it thank you very much.

Speaker Change: Thank you.

Speaker Change: I'm showing no further questions at this time I'd like to hand, the conference back over to Steven Pelayo for closing remarks.

Steven Pelayo: Okay, great, Thanks, Mark and David and thank you all for participating on today's call before we conclude I just want to give everyone. A quick reminder, on our upcoming investor conferences on March 18, we will present at the 36th annual Roth Conference in Dana Point, California.

Steven Pelayo: And is that the conference is by invitation only where an interested investors. Please contact your respective sales representative to register and schedule. One on one meetings with the management team. This concludes the call and you may now disconnect.

David Wong: I think the way we're doing right now, obviously, it's quite a quicker, fast growth in the mainland China market, right? A lot of products we qualify here now. So those are, I think, our goal, we're saying, you know, reaching $1 billion, even in the Chinese market only, right? Within the next few years, we should be reaching our goal. And the same tendency, you know, in a couple of years, two years ago, we started also global market expectation, I mean, penetration.

Speaker Change: Thank you. Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

Steven Pelayo: Yeah.

Steven Pelayo: Yeah.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Okay.

Steven Pelayo: [music].

David Wong: So the key is really how we're executing our international sales plan. Now we have, you know, hired good people and a sales guy in Korea, actually, also in the US, and Europe. And we're seeing that there's quite a bit of progress.

Steven Pelayo: Yeah.

Steven Pelayo: Yes.

Steven Pelayo: Yes.

Steven Pelayo: [music].

David Wong: And let's put it this way, you know, for their international market, and as we talk to customers, everybody is looking for, back again, you know, differentiation, right. So with that in mind, and as I mentioned, a couple of products we have right now, we do have confidence as their first, you know, I call their U.S. customer adaptor tool, we see more of our customers may adapt additional other tools, too. So we see that happen. But then you're asking which year is how the real give you precisely.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Steven Pelayo: Yes.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: [music].

Okay.

Steven Pelayo: [music].

David Wong: But I think, as I said, we have a bigger revenue with strong financial support and from self care, and also the patient product, which definitely will penetrate the international market in the next few years. A quick execution plan and to quickly reach that goal, and eventually, as I mentioned a couple times before, we are half refrigerators from Masn 2c and half outside of Mass 2c C. Like you said, the real revenue contribution is actually bigger outside Mass 2c. Thank you. That's great!

Steven Pelayo: Yes.

Steven Pelayo: [music].

Christian David Schwab: No other questions. Thanks, guys. Thank you. Our next question comes from Charlie Tan with Morgan Stanley. Your line is now open.

Steven Pelayo: Yes.

Steven Pelayo: [music].

Charlie Tan: Thanks for taking my question again. So I think the new customer contribution costs us our eye. So it wasn't, you know, on the radar screen.

Charlie Tan: So I'm not sure why Xinlen has become such a big customer, and if you can provide some more details, is that purely 12-inch equipment or also including some ANG equipment? Thank you. Yeah, I think the primary we sell to Xin'an is a 12-inch tool, right? And also, their most recent expansion now is a mature node. So we actually sell a lot of our auto bench.

David Wong: They're probably the largest auto bench customer right now for us in China. So, of course, they also buy wafers, right? So that's why primary driving that to become the second largest customer in 2023. And looking forward, I think also we're, you know, a very good relation and engage with them in copper plating, our furnace, and also online. And so that's another contribution we can make from the Xin'an, right? And they're a great customer.

Steven Pelayo: Okay.

Steven Pelayo: [music].

David Wong: And we're happy with our, I said, you know, our auto bench tool is largely deployed in Xin'an's production line. Okay, so yeah, so it's a great business, right? So I'm assuming your company consults your lawyer about U.S. export control before you ship to all customers, including China, right? Is that the right assumption? Well, I mean, we're straight to follow all the expert control rules, right?

Steven Pelayo: Yes.

Steven Pelayo: [music].

David Wong: And said here, and for those who, you know, restrict their customers, we have to be real careful, you know, US parts, right? And personally, well, and also, you know, now you say technology. Yeah, so we're pretty very carefully managing and controlling and following their strict standards of their expert control in the US.

David Wong: Okay. Okay. Thanks, David. And the next question is about the advanced memory, HBM. So, can the company talk about your opportunity in Korea for the HBM production line? I think we asked that question last quarter as well.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Charlie Tan: And also, there's some recent news about China may also have their own HBM production. So, can your company comment on your potential opportunity in Korea and also Chinese customers? Yeah, well, let's do it this way.

Steven Pelayo: Okay.

David Wong: Obviously, you know, Hynix is number one and provider, right? They're all the technology leaders, HBM. And I think our current product definitely has evolved their process. And also, we see the HBM, you know, this is a carboprotein tool, right? You know, TSV, all the packaging, whatever they needed.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

David Wong: So that's the next tool we're working with, you know, closely with the Hynix and their, You know, I chose the rest of the other two furnaces, and we're working with them too. So it's a lot of, including cleaning, by the way, actual other cleaning, other than we sold them, you know, SAF and mechatronics, also working with the Hynix too. So it's a very good opportunity. HBM, you know, is a greater, I call it demand and greater driver. They need a lot of differential technology, you know, for supporting and HDM development in the future. In China, there is really not much we can hear right now. Really, right?

Steven Pelayo: Okay.

Steven Pelayo: [music].

Okay.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: [music].

David Wong: It's just, you know, I mean, not much we have right now. So in other words, we're really focused on outside China for HBM expansion as a business opportunity. Yeah, so based on your comments and also other global vendors, right? They talk about actually this year, the global FTE revenue coming from memory. So why Hynix? Is that your kind of top customer? Or do you think this year Hynix?

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Uh huh.

Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Charlie Tan: you know, can contribute more than 10% of revenue given HPN opportunity and also memory spending recovery. Uh... Well, I mean, obviously, the more than I mean, other than Heidi was looking for other players, right? This is new here.

Steven Pelayo: Right.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

[music].

David Wong: Then their memory market, HBM, is really booming, right? That's key here. So we see that their demand there, as I mentioned, right, this is a for us, you know, cleaning, cover plating, there's really demand there. I don't know what the time when we come back to 10% of our customer is, how we can put it together right now. So really, I will see right, especially the second half year or next year, it's really we want something to recover from the DRAM market. Okay, gotcha. Thanks, Debbie.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

David Wong: Thank you. Thank you. One moment for our next question. Our next question comes from the line of Edison Lee with Jeffries. Your line is now open.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Thank you.

Steven Pelayo: Okay.

Thank you.

Steven Pelayo: Thank you.

Steven Pelayo: Right.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Edison Lee: Thank you for taking my question. So, David and Martin, congratulations on a great quarter. I have just one question, which is the contribution of your three customers for 2023, which amounted to almost 50% of the revenue. So can you give us some color as to whether you think that those top three customers will continue to be your top three customers in 2024? And what is your expectation of the contribution of the top three customers? Yeah, actually, I looked at this year's order, you know, this, right.

Okay.

Steven Pelayo: Yes.

Steven Pelayo: [music].

Steven Pelayo: Okay.

David Wong: And the top three customers will continue, I think, to grow, right. And they're probably still our, you know, major customers. Also, we see their, you know, additional body of our home. They have their, you know, expansion plan. And they're probably simultaneously building two fabs this year, and they're probably building probably next year, you know, three fabs simultaneously, right?

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Sure.

Steven Pelayo: [music].

David Wong: So that's another bigger, I'd say, their top customers will come back in our 2024 revenue contribution. Maybe a related question is that, based on your revenue guidance at a good point, that implies 20, 20% plus growth. And so that's significantly below the growth rate in 2023. So do you think the key driver there is just some digestion period, or is it a matter of taking time for the evaluation tools to be recognized as revenue? So what are the key factors for the slowdown?

Steven Pelayo: Okay.

Yes.

Steven Pelayo: Yes.

Steven Pelayo: [music].

Steven Pelayo: Thanks.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Okay.

David Wong: Yeah, I think the key driving force is I want to see that the China WFP market continues to, you know, people say maybe, I mean, slightly increase, at least flat. I see that as number one important. But second, most importantly, we have gained for our, you know, I call it a higher growth rate because we have a continual flow of new customers coming. And also, we have a gain on market share from existing customers. And also, do have like a furnace, what do they make more contribution this year and for revenue, right? So that's all there added together. That's our, you know, give us the basis to forecast our growth rate higher than theirs and their growth rate of the WFP market in China.

Steven Pelayo: Okay.

Steven Pelayo: Right.

Steven Pelayo: Right.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Sure.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: [music].

Steven Pelayo: Right.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Mark: Thank you. And maybe the last one is that for 2024, what do you think is the percentage of overseas revenue in your guidance? Yeah, hey, Edison, we didn't, we're not, we didn't break it out.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

David Wong: But we asked a couple other questions about that, and we mentioned it wouldn't be a very significant contribution in 2024. You know, we expect that to build in the coming years, but it's not a very significant piece. It's, we think it'll be bigger than it was this year. And so you got the numbers in, you'll get the international numbers shortly, but it's, it's, it's not going to become a huge number, you know. I wouldn't expect it to be more than 10, yeah, but I should say grocery is higher, right?

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: [music].

Steven Pelayo: Okay.

Steven Pelayo: Hi.

Steven Pelayo: Yes.

Edison Lee: I mean, of course, I mean, this is the number. So, then the real absolute number, like you said, you know, with the deal, appreciate the number of the total revenue. Okay, got it. Thank you very much. Thank you. I'm not having any further questions at this time. I'd like to hand the conference back over to Stephen Palio for closing remarks. Okay, great.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Steven Pelayo: Sure.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

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Steven Pelayo: Right.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Okay.

Steven Pelayo: Okay.

Stephen: Thanks, Mark and David, and thank you all for participating on today's call. Before we conclude, I just want to give everyone a quick reminder about our upcoming investor conferences. On March 18th, we will present at the 36th Annual Roth Conference in Dana Point, California. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representatives to register and schedule one-on-one meetings with the management team.

Steven Pelayo: Okay.

Steven Pelayo: Great.

Steven Pelayo: Okay.

Steven Pelayo: Yes.

Steven Pelayo: Yeah.

Steven Pelayo: Yes.

Steven Pelayo: [music].

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Steven Pelayo: Okay.

Steven Pelayo: [music].

Operator: This concludes the call, and you may now disconnect. Thank you. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? www.acm.org ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

Steven Pelayo: Okay.

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Steven Pelayo: [music].

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Steven Pelayo: [music].