Q1 2024 ACM Research Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the ACM Research First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to the speakers today. Steve Palaio, Managing Director of the Blue Shirt Group. Please go ahead.
Okay.
Speaker Change: Good day and thank you for standing by welcome to the ACM Research first quarter 'twenty 'twenty four earnings conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone.
Speaker Change: I didn't hear an automated message advising and as race to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to turn the conference over to your speakers today, Steve Pelayo managing director of the Blue.
Steve Palaio: Good morning, everyone. Thank you for joining us to discuss our first quarter 2024 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There is also a supplemental slide deck posted on the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wong, our CFO, Mark McKechnie, and Lisa Fang, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide 2.
Steve Pelayo: Sure Group. Please go ahead.
Good day, everyone. Thank you for joining us to discuss first quarter 2024 results, which we released before the U S market open today. The release is available on our website as well from Newswire services. There's also a supplemental slide deck posted on the investors section of our website that we will reference during our prepared remarks on the call with me.
Speaker Change: Today, our CEO, Dr. David Wang our CFO, Mark Mckechnie, and Lisa <unk>, our CFO of our operating subsidiary ACM Shanghai before we continue please turn to slide two let me remind you that remarks made during this call may include predictions estimates or other information that might be considered forward looking these forward looking.
Steve Palaio: Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward looking. Such forward-looking statements represent ACM's current judgment 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 in ACM's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call.
Speaker Change: <unk> represent an ATM.
Speaker Change: Current judgment for 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 in acm's filings with the SEC. Please do not place undue reliance on these forward looking statements, which reflect acm's opinions only.
Steve Palaio: ACM is not obliged to update you on any revisions to these forward-looking statements. Certain of the financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gains and losses 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 to slide 12. Now, I will turn the call over to David Wong, who will begin with slide 3. David?
Speaker Change: 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 this call will be on a non-GAAP basis, which excludes stock based compensation and an unrealized gain and loss short term investment for our GAAP results and reconciliations beats.
Speaker Change: GAAP and non-GAAP amount you should refer to our earnings release, which is posted on the IR section of our website and to slide 12.
Speaker Change: I'll turn the call over to David Wang who will begin with slide three David.
David Wong: Thanks, Stephen. Hello, everyone, and welcome to ACM Research's first quarterly 2024 Earnings Conference Call. Please turn to slide three. I'm pleased with our results. So let's start with the year for the first quarter. Revenue was $252.2 million, up 105%. Profitability was good, with a gross margin of 52.5% and an operating margin of 26.2%. And we ended the quarter with just over $28.8 million in cash and time deposits.
Hui Wang: Thanks, Stephen Hello, everyone and welcome to ACM research first quarter 2024.
Hui Wang: Earnings Conference call, Please turn to slide three.
Hui Wang: I am pleased with our results.
Hui Wang: A solid start to the year for the first quarter.
Speaker Change: Revenue was <unk>.
Speaker Change: Two two.
Speaker Change: $2 million upper 105% profitability was good with gross margin of 52, 5% and a trading margin of 26, 2%.
Speaker Change: And we ended the quarter with just over 28 8 million of cash and time deposits.
David Wong: Shipment for the first quarter, well, 245 million, an upper 175%. As expected, first quarter shipment was higher due to delivery of our finished goods that were not shipped in the fourth quarter of last year. And we also had an exclusion from our production team during the Lunar New Year holiday period. I will now provide more detail on the product. Please turn to slide four.
Speaker Change: Shimon for the first quarter were $245 million upper 175%.
Speaker Change: As expected first quarter cement were higher due to a delivery. Our finished goods that were another ship in the fourth quarter of last year.
Speaker Change: And we also have an execution from our production team.
Speaker Change: In our lunar new year holiday period.
Speaker Change: I will now provide a detail on products. Please turn to slide four.
David Wong: Revenue from a single wafer canelé, Tahoe, and a semi-critical canelé product grew 199% in Q1, and they represent 72% of the total revenue. ACM offers what we believe is the industry's most comprehensive cleaning portfolio. We support near 90% of all cleaning process steps for memory and analogical devices. At the high end, we believe our flagship CEPS, Tahoe, and T-Ball single wafer cleaning products deliver a technical feature not available from any of our competitors.
Speaker Change: Revenue from our single wafer cleaning Cabo in the semi critical cleaning product growth.
Speaker Change: 99% in Q1 and that.
Speaker Change: <unk>, 72% of our total revenue.
Speaker Change: ACM offer what we believe is that industrial most comprehensive Canadian portfolio.
Speaker Change: To support our near 90% of all cleaning process steps for memory and logic devices.
Speaker Change: And at the high end, we believe our flagship Saps Tahoe and Tebo single wafer Canadian products deliver technical feature not available.
Speaker Change: Any of our competitors.
David Wong: At the lower end, our semi-critical tools, including AutoBench, have driven incremental growth for our cleaning category over the past two years. We have recently made progress in the SPM market, which we believe is resulting in shared gain and loss in our community business starting this year. Let me provide more detail.
Speaker Change: At the low end semi critical tool, including auto bench have trading incremental growth, while cleaning category over the past two years.
Speaker Change: We have recently made a progress in STM market, which we believe what he's already.
Speaker Change: Game and it was in our Canadian business starting this year.
Speaker Change: Let me provide more detail.
David Wong: SPM stands for sulfuric acid, peroxide mixing. These steps are normally used to clean the wafer after the photoresistor removal process and post-CMP cleaning. We estimate the total available market for the 10, for the SPM tool, is 25 to 30% of the total front-end cleaning market. Today, SDM has been a small contribution to our business. Our SPM tools, including TAVO, the low temperature single wafer SPM, and now our high temperature single wafer SPM tool. Until now, we believe there has been only one major supplier of high temperature single wafer SPM tools.
Speaker Change: F P M spend for sulfuric asset.
Speaker Change: <unk> site mixing this the steps are normally used took me labor are peripheral to this is the removal process and post CMP clean.
Speaker Change: We estimate the total available market for the time.
Speaker Change: For SPN pool is 25% to 30% of our total front end cleaning market.
Speaker Change: Today SDM has been a small contribution to our business.
Speaker Change: Our SPM tools, including novel low temperature single wafer SPM.
Speaker Change: And now our high temperature single wafer SPM tool.
Speaker Change: I am here now we believe there has been only one major supplier of high temperature of single wafer SPM doors, our engineering team as recent maybe a greater technical progress with our high temperature tool and we believe ACM can now participate.
David Wong: Our engineering team has recently made greater technical progress with our high-temperature tool, and we believe ACM can now participate as an alternative supplier. This is especially important as we believe our customers generally prefer a one-stop shop for all their SBM cleaning staff.
Speaker Change: As the alternative supplier.
Speaker Change: This is especially important as we believe our.
Speaker Change: Customer generally preferred one stop shop for all their SPM cleaning staff.
David Wong: With a high-temperature SBM tool, ACM now has a full product line to meet our customer requirements. Tahoe has been qualified for production by multiple customers and is beginning a ramping phase, with a substantial number of order plans for delivery in 2024. Enhancements have been made to its performance, allowing the tool to match particle removal efficiency comparable to the single-wafer plasma.
Speaker Change: With our high temperature SPM tool, we believe <unk> now has a full product line to meet our customer requirements.
Speaker Change: Additionally cost.
Speaker Change: <unk> has been qualified for production by multiple customer and is beginning a ramping basis with a substantial number of order a plan.
Speaker Change: For deliver in 2012 enhancements have been made to its performance, allowing the tool to match category more efficiency comparable to their single wafer process.
David Wong: Wire Reducing Sulfuric Usage by 50-70% We now expect a meaningful ramp of SDM tools this year as we begin volume delivery across the number of key customers, finish up on cleaning, and we also inspector the Beville Etcher cleaning tool to contribute meaningful revenue to Book 124. And we're on track to complete evaluation of a supercritical CO2 dry cleaning tool this year for revenue in 2025. Revenue from ECP, furnace, and other technologies declined 3% in Q1 and represents 70% of total revenue. As I mentioned last quarter, we hit an important milestone for this category in 2023, with more than 100 million in revenue. The year-over-year revenue decline is primarily due to quality fluctuation.
Speaker Change: While reducing some FERC usage by 50, it was 17%.
Speaker Change: We now expect a meaningful ramp of SPM tools. This year as we began volume delivery across the number of our key customers.
Speaker Change: Treaties and cleaning we are also <unk>.
Speaker Change: Factor, our battle agger cleaning tool to contribute meaningful revenue 1 billion four and we're on track to complete evaluation of our supercritical cotwo dry cleaning tool this year for revenue in 2025.
Speaker Change: Revenue from ECP furnace, and other technology declined 3% in Q1 and represented 70% of total revenue.
Speaker Change: As mentioned last quarter with either important milestone for this category in 2023 with more than hundreds of millions in revenue.
Speaker Change: The year over year revenue decline is primarily due to quarterly fluctuations in fact, we shipped three X more ECB tool in Q1, two three and four versus the same period last year and we expect our revenue growth for this category for the full year.
David Wong: In fact, we shipped 3X more ECB tools in Q1-24 versus the same period last year, and we expect revenue growth for this category for the full year. As noted in a prior course, we believe the furnace product cycle is perhaps a year, and the soul behind ECD. We have a broader footprint of customer activities with more than a handful of tools currently under evaluation and multiple customers. We are optimistic that this will result in qualification and follow-on orders in the coming quarters.
Speaker Change: As noted in our prior cost, we believe theyre furnace product cycle, perhaps a year.
Speaker Change: And so behind ECB.
Speaker Change: We have a brand.
Speaker Change: Broader footprint of customer activities with more than a handful first tool currently under evaluation at multiple customers. We are optimistic this award, resulting quite a vacation in the.
Speaker Change: Follow on orders in the coming quarters.
David Wong: Revenue from advanced packaging, which excludes ECP but includes service spare parts, grew 53.2% in Q1 and represents 11% of total revenue. This category includes a range of packaging tools such as coder, developer, scrubber, PR sweeper, and web etchers, and also service and spare parts. And we continue to explore new products and technology to participate in the next generation of advanced packaging. We believe ACM is one of the only companies that offers a full set of a wet tool, copper polishing tool, and their copper plating tool for advanced packaging.
Speaker Change: Revenue from advanced packaging, which is good ECP, but including in February spare parts grow three 2% in Q1 and represented 11% of total revenue.
Speaker Change: This category, including a range of old packaging tools, such as the colder <unk> scrubber Trc Heber and the web address and also our service and spare parts.
Speaker Change: And we continue to draw new supply and their technology to participate in the next generation of advanced packaging.
Speaker Change: We believe ACM is one of the only companies that offer full threat of a workflow Cabo polishing drove and copper plating tool for advanced packaging.
David Wong: In Q1, we delivered an ultra-CV vacuum cleaning tool to a major customer to meet the flux removal requirements for chip labs and other advanced 3D packaging structures. Today, we also introduce the Drain Wafer Cleaning Tool. This tool is designed for post-debonding wafer cleaning that enables nearly 100% recycled solvent and nutrition.
Speaker Change: In Q1 with deliver ultra C. We vacuum cleaning tool to a major customer to me that our flax renewable requirement for cheap lab and other advanced <unk> packaging structures. Today. We also introduced their dream wafer cleaning tool. This tool is that the wine for post <unk>.
Speaker Change: Laundry wafer, meaning that the enabled nearly 100% recycle.
David Wong: We have successfully completed the installation and the qualification of the first tool with a key customer, finishing upon and product. We are making good progress with our track and the PSAVD platform. We believe our proprietary technology provides both a tool for success for mainland China and also global customers. We are engaged with multiple customers for whom we expect substantial growth, progress in product development, and evaluation this year, with revenue in 2025 and beyond. Now we move on to our customer; please turn to slide 7.
Speaker Change: And is there attrition we have successfully complete the installation and qualification our first tool with a key customer.
Speaker Change: Finish upon and product we are making good progress with our track and the <unk> platform. We believe our proprietary technology for Aegean both tool for success for mainland China and also global customers.
Speaker Change: We're engaged with multiple customers that we expected a banjo grow progress in product development and evaluation of this year.
Speaker Change: With the revenue in <unk> and <unk>.
Speaker Change: Now move on to our customer please turn to slide seven.
David Wong: In China, we believe we have a leading position in cleaning. We have become a multiple product company with competitive products in the market for plating and furnace, and we have a solid evaluation pipeline for track and PCVD.
Speaker Change: In China, we believe we have a leading position in panini, we havent become a multiple product company with a competitive product in a market, where plating and assortments and.
Speaker Change: And we have a solid evaluation pipeline for tracking piece Abd.
David Wong: We and the service team are now driving deeper adoption of our product across our customer base. Our growth is also being driven by new entrants. On the international front, we plan to deliver Ultra-CB backside cleaning and bevel-edged tool in the second quarter of 2024 to a large US manufacturer that qualifies as the first SAP cleaning tool for revenue last year. This demonstrates a deepening relationship which we believe can lead to production orders across multiple product lines.
Speaker Change: Our sales and service team and now drilling deeper adoption of our products across our customer base.
Speaker Change: <unk> is also being driven by new entrants.
Speaker Change: On the international front, we plan to deliver ultra CB backside cleaning and apparel exit rule in the second quarter of 2024.
Speaker Change: Two of our large U S manufacturer now to qualify as a first SAP Canadian tool for revenue last year.
Speaker Change: This demonstrate our BP relationship, which we believe can lead to a production orders across multiple product lines.
David Wong: Moreover, ACM's brand and reputation are gaining recognition among other US chip makers with new engagement and potential opportunities to penetrate their global manufacturing sites. We recently hired additional seasonal marketing and sales professionals who established a relationship with the key U.S. semiconductor players. In Europe, we installed our first full evaluation tool, the ULTRA-C-SAT5 cleaning tool, at a major global semiconductor manufacturer in the fourth quarter last year.
Speaker Change: Over ACM brand and the reputation are gaining recognition among other USG makers with new engagement and <unk>.
Speaker Change: The peso opportunity to penetrate their global manufacturer site.
Speaker Change: We recently hire additional seasonal marketing and sales professionals, who bring established a relationship with a key U S semiconductor players.
Speaker Change: In Europe, we installed our first theory validation tool the out Youll see a stab five Canadian rule at a major global semiconductor manufacturer in the fourth quarter last year.
David Wong: The initial feedback has been positive, and we are optimistic that the volume production order is possible by the middle of the year. We think Korea, we see opportunity with ASCII Hynix, a high brand, high bandwidth memory, HBM product; we see potential gain with CEPS, a cleaning tool for high aspirational wear cleaning, as well as ultra ECP for TSV applications. To support growth, we made progress in expanding our facility in China and other regions. Please refer to slide 8.
Speaker Change: Initial feedback has been positive and we are optimistic that the volume production order.
Speaker Change: Possible by middle of the year.
Speaker Change: We think Korea, we see opportunity with SK, Hynix, Hi, Brian high bandwidth memory HBM product, we see a potential gain.
Speaker Change: SaaS Canadian tool for high aspect ratio <unk>, as whereas ultra ECP for TSV applications.
Speaker Change: To support our growth we made good progress in our facility expanding in China and other regions. Please turn to slide eight.
David Wong: In China, the construction of our Lingang production R&D center is nearly complete, and we expect initial production later this year. In Korea, we are making progress with key customers. We believe a strong commitment to Korea can improve our relationship with key Korean customers. Our resources in Korea can also provide another basis to support international customers in the US, Europe, and other parts of Asia. We recently hired a new leader to run our Korean operation, DG Kim. He is a longtime veteran of SK hynix.
Speaker Change: In China construction of our new loan production.
Speaker Change: Production R&D Center is nearly complete we expect initial production later this year.
Speaker Change: In Korea, we are making progress with a key customer we believe our strong commitment to Korea cutting improve our relationship with <unk>.
Speaker Change: Korean customers.
Speaker Change: Our resource in Korea can also provide another basis to supporting international customer in the U S. Europe and other parts of Asia. We recently hired a new leader to run our Korea operations DG team.
Speaker Change: He is a long time rendering of SK Hynix, we are optimistic PSA spheres and relationship while <unk> adoption are.
David Wong: We are optimistic his experience and relationship will help adoption. Our technology and accelerator of business in the region. We continue to invest in our Oregon site to add to our service support and demonstration capability for R&D and customer activity in the US and Europe. I will now provide our, oh look, please turn to slide nine.
Speaker Change: Technology and <unk>, our business in the region.
Speaker Change: We continue to invest in our Oregon site to add to our service support and <unk>.
Speaker Change: Demonstration capability for R&D and customer activity in the U S and Europe.
Speaker Change: I will now provide our.
Speaker Change: Outlook, please turn to slide nine.
David Wong: We believe WFE spending in China will remain solid as the country continues on its goal to match its production capacity with end market consumption. We are focused on gaining market share in China, new product introduction, and expanding our business to new customers in the USA, Korea, Europe, and other Asian markets. We have reaffirmed our 2024 revenue outlook to be in the range of $650 to $725 million. This implies 23 year-over-year growth at the middle point.
Speaker Change: We believe <unk> spending in China will remain solid.
Speaker Change: To continue on its go to match its production capacity with the end market consumption we.
Speaker Change: We are focused on gaining market share in China.
Speaker Change: New product introductions, and expanding our business through new customer in the USA Korea, Europe and other Asia markets.
Speaker Change: We are re affirmed 2000 and for revenue to be in the range of $650 million to $725 million.
Speaker Change: This implied 23 year over year growth at the midpoint, we expect our full year revenue growth.
David Wong: We expect our full-year revenue growth for 2024 to outpace both the China and global WFE growth rates. Now, let me turn the call over to our CFO, Mark, who will reveal details of our first quarter results. Mark, please.
Speaker Change: It was Anthony for to outpace both the China and global.
Speaker Change: Rich.
Speaker Change: Now, let me turn the call over to our CFO, Marc who are revealed detail of our first quarter results Mark. Please.
Mark A. McKechnie: Thank you, David. Good day, everyone.
Marc: 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 and unrealized gain or loss on short term investments reconciliation of these non-GAAP measures comparable to GAAP measures is included in our earnings release.
Mark A. McKechnie: Please turn to slide 11. Unless I note otherwise, I'll refer to non-GAAP financial measures, which exclude stock-based compensation and unrealized gain or loss on short-term investments. Except as otherwise noted, the following figures refer to the first quarter of 2024, and comparisons are with the first quarter of 2023. I will now provide financial highlights for the first quarter of 2024.
Marc: Thats otherwise noted the following figures refer to the first quarter of 2024 and comparisons are with the first quarter of 2023.
Mark A. McKechnie: Revenue was $152.2 million for the first quarter, up 105%. Revenue for single wafer cleaning, Tahoe, and semi-critical cleaning was $109.5 million, up 199%. Revenue for ECP, furnace, and other technologies was $25.8 million, down 3%. As David noted, we anticipate good growth for the full year 2024 in this category.
Marc: I will now provide financial highlights for the first quarter of 2024 revenue was $152 2 million for the first quarter up 105% revenue for single wafer cleaning Tahoe in semi critical cleaning was $109 5 million up 199% revenue for ECP furnace and other technologies was $25 8 million down three.
Marc: <unk> as David noted, we anticipate good growth for the full year 2024, and this category revenue for advanced packaging, excluding ECP services spares was $16 9 million.
Mark A. McKechnie: Revenue for advanced packaging, excluding ECP services and spares, was $16.9 million, up 53.2%. Total shipments were $245 million for the first quarter, up 175%. Gross margin was 52.5% versus 54%. This exceeded our normal expected range of 40 to 45%. For the full year, we now expect gross margins to fall in the upper end of our target range. However, we do continue to expect gross margin to vary from period to period due to a variety of factors such as sales volume, product mix, and currency impact.
Marc: Up 53, 2% total shipments were $245 million for the first quarter up 175% gross margin was 52, 5% versus 54%. This exceeded our normal expected range of 40% to 45% for the full year. We now expect gross margins to fall in the upper.
Marc: End of our target range.
Marc: Do continue to expect gross margin to vary from period to period due to a variety of factors such as sales volume.
Marc: Mix and currency impacts.
Mark A. McKechnie: Operating expenses were $40.1 million for the first quarter, up from $29.2 million. R&D was $19.4 million versus $13.3 million. The year-over-year increase reflects additional personnel and other expenses to support our product development pipeline. The decline versus Q4'23 was primarily due to reduced spending on internal R&D development.
Marc: Operating expenses were $40 1 million for the first quarter up from $29 2 million R&D was $19 4 million versus $13 3 million the year over year increase reflects additional personnel and other expenses to support our product development pipeline.
Marc: Decline versus Q4, 2003 was primarily due to reduced spending on internal R&D development tools.
Mark A. McKechnie: Sales and Marketing was $11.1 million versus $8.9 million, and G&A was $9.5 million versus $6.9 million. For 2024, we plan for R&D expenses in the 13 to 15 percent range, sales and marketing in the 7 to 8 percent range, and G&A in the 5 to 6 percent range. Operating income was $39.8 million for the first quarter, up from $10.9 million. Operating margin was 26.2%, up from 14.7%. It recorded a realized gain of $0.3 million for the first quarter from the sale of short-term investments.
Marc: Sales and marketing was $11 1 million versus $8 9 million in G&A was $9 5 million versus $6 9 million.
Marc: For 2024, we plan for R&D expenses, and the 13% to 15% range sales and marketing in the 7% to 8% range and G&A in the 5% to 6% range.
Marc: Operating income was $39 8 million for the first quarter up from $10 $9 million operating margin was 26, 2% up from 14, 7%.
Marc: We recorded a realized gain of <unk> 3 million for the first quarter from the sale of short term investments recall that realized gains are included in non-GAAP earnings.
Mark A. McKechnie: Recall that realized gains are included in non-gap earnings; income tax expense was $4.4 million for the first quarter versus $2.9 million. For the full year, we plan for an effective tax rate, a nine gap pre-tax income in the 15 to 20%. Net income attributable to ACM Research was $34.6 million for the first quarter, up from $9.9 million. Net income for diluted share was 52 cents for the first quarter versus 15 cents.
Marc: Income tax expense was $4 4 million for the first quarter versus $2 9 million for.
Marc: For the full year, we plan for an effective tax rate on non-GAAP pre tax income in the 15% to 20% range.
Marc: Net income attributable to ACM research was $34 6 million for the first quarter up from $9 9 million net.
Marc: Net income per diluted share was <unk> 52.
Marc: Net income per diluted share was <unk> 52 for the first quarter versus 15.
Mark A. McKechnie: Our non-GAAP net income excludes $14.6 million, or $0.22 per share, in stock-based compensation expense. This reflects a full quarter impact of the significant grant of ACM Shanghai shares made in the third quarter of last year, in addition to our normal ACM research grant. This was the first major grant by our subsidiary since the 2021 Star Market IPO. Our management team considers the grant as a critical differentiator to attract new talent for new product development and to retain key employees.
Marc: Our non-GAAP net income excludes $14 6 million or $22 22 per share and stock based compensation expense.
Marc: This reflects a full quarter impact of the significant grant of ACM.
Marc: <unk> share has made in the third quarter of last year. In addition to our normal ACM research grants.
Marc: This was the first major grant by our subsidiary since the 2021 star market.
Marc: Our management team considers the grant as a critical differentiator to attract new talent for new product development and to retain key employees.
Mark A. McKechnie: I will now review selected balance sheet items. Cash, cash equivalents, restricted cash, and time deposits were $288.3 million versus $304.5 million at the end of the last quarter. Total inventory was 581.1 million versus 545.4 million at the end of the last quarter. This includes raw materials and work in progress, which totals $318.2 million and finished goods inventory of 262.9 million. Finished goods inventory mainly includes first tools and evaluation tools at our
Marc: I will now review selected balance sheet items cash cash equivalents restricted cash and time deposits were $288 3 million versus $304 5 million at the end of the last quarter.
Mark A. McKechnie: It also includes finished goods at ACM's facility. Capital expenditures were $25.4 million. For the full year, we expect to spend about $100 million in capital expenditures. This primarily includes continued investments in our Linggang facilities, remodeling for our new headquarters in Shanghai, and our investments in Korea and the U.S. and some fixed asset expenditures.
Marc: Total inventory was $581 1 million versus $545 4 million at the end of last quarter. This includes raw materials, and working progress, which totals $318 2 million and finished goods inventory of $262 9 million finished goods inventory mainly includes first tools in the value.
Marc: Duration tools that our customers and it also includes finished goods at acm's facilities.
Marc: Capital expenditures were $25 4 million.
Marc: For the full year, we expect to spend about $100 million in capital expenditures is primarily includes continued investments in our linked gung facilities remodeling for a new headquarters for ACM, Shanghai, and our investments in Korea, and the U S and some fixed asset expenditures.
Operator: That concludes our prepared remarks. Now, let's open the call for any questions that you may have. Operator, please go ahead. Thank you.
Speaker Change: That concludes our prepared remarks now lets open the call for any questions that you may have.
Operator: Thank you, and as a reminder to ask a question, you need to press star 1 1 on your telephone and wait for your name to be announced, and to withdraw your question, just press the pound star 1 1 again. Once again, please stand by while we compile the Q&A. One moment for our first question. Our first question will come from Suji DeSilva from Roth.
Speaker Change: Please go ahead.
Speaker Change: Thank you and as a reminder to ask a question you will need to press star one one on your telephone and wait for him to be announced and to withdraw your question press the pound.
Speaker Change: Star one again.
Speaker Change: Once again, please standby when compile the Q&A roster one moment for our first question.
Speaker Change: Our first question comes from the line of Tsuji to Silva from Roth.
Suji DeSilva: Hi David. Hi Mark. Congratulations on the progress here.
Speaker Change: You are now connected.
Speaker Change: Hi, David Hi, Mark Congratulations on the progress here.
Suji DeSilva: Just a couple, hey guys, maybe some high-level questions. So outside of the core SAP products, which of the new product categories is going to help drive the highest growth in 24? Just understand, are you diversifying the product category?
Speaker Change: Alright.
Speaker Change: Hey, guys, maybe some high level questions.
Speaker Change: Outside of the core SaaS.
Speaker Change: Alex.
Speaker Change: The new product categories. There is going to help drive the highest growth in 2000 and for just to understand how youre doing.
Speaker Change: We're supplying the product categories.
David Wong: Yeah, good. And obviously, as I mentioned, the cleaning tool has continued to be a major, you know, portion of the revenue. And we see that this, as I mentioned, is the SPM tool, which covers, you know, middle and low temperatures by Tahoe and also single wafer. And we also make a breakthrough in a high-temperature SPM tool.
Alex: Yeah, good and obviously as I mentioned Canadian tool is continue our major.
Alex: A portion of the revenue.
Alex: And we see there.
Alex: As I mentioned is STM tool with a cover.
Alex: No and low temperature by Tahoe and also single wafer no. So we are a major breakthrough in high temperature <unk>.
Alex: M tool and that soybean also another driving factor and class also ever this.
David Wong: And that's also another driving factor. And plus, also, this is our bevel etcher. And also, you know, continues where we're growing our older bench, you know, for the material or the nodes. And then, hopefully, next year and looking for, probably our supercritical CO2 will start contributing to our revenue too. So that's the one on the Canadian side.
Alex: Our.
Alex: Edgar and also continuous aware of growing older bench for the material or notes.
Alex: And then looking at the real next year and looking for property, our supercritical Cotwo will start contributing on revenue too so.
Alex: So that's the one on the Canadian site and they look in their use.
Mark A. McKechnie: And then look at the ECP; we'll continue to see growth both in the front end and also on the advanced package side, and wherever, you know, and quite a good backlog in ACP. And also we see the furnace was that contributing to our revenue too this year and will continue to do so next year. And we have, you know, basically all the LPCVD and ARDs evaluations and all this, you know, vacuum anneal versus the mesferber anneal continue to get the market. So that's the major driving force this year for our revenue contribution. Are you, Ma, anything want to add to that? Yeah, no.
Alex: <unk> will continue to see that the globe and both in the front end and also on the advanced packaging side.
Alex: And wherever in there.
Alex: They are good there.
Alex: Backlog in ECB and also we see the furnace will start contributing from a revenue to this year and also next year and we have basically the order <unk>.
Alex: <unk> evaluations and orders.
Alex: Vacuum Aneel versus February.
Alex: Aneel convenient.
Alex: Getting to market.
Alex: So thats the major driving force this year for revenue contribution.
Mark A. McKechnie: Yeah, no, thanks, David. And thanks, Suji. Yeah, I think one of the things we wanted to stress on this call is, you know, within cleaning, even though we've been doing cleaning for a while, we have a few pretty strong product cycles underneath that that can drive additional growth. And then, you know, when we start looking internationally, it's, it's hard to say how our mix is going to play out between products, you know, as we go on late this year and into 2025 So I'll leave it at that.
Speaker Change: Hey, Mark anything want to add on that yeah, no. Thanks, David and thanks Judy.
Speaker Change: Yes, I think one of the things we wanted to address on this call is within cleaning, even though we've been doing cleaning for a while.
Mark A. McKechnie: We have a few pretty strong product cycles underneath that that that can drive additional growth.
Speaker Change: And then.
Speaker Change: When we start looking internationally.
Speaker Change: It's.
Speaker Change: It's hard to say, how our mix is going to play out between products. Yes. We got late this year and into 2025, because it seems like a lot of our new customers might be starting with cleaning as well so.
Speaker Change: I'll leave it at that.
David Wong: Okay, great. Yeah, no. My second question was going to be similar on geographic diversification. Maybe I can hone in on the U.S. customer, and perhaps you can give a sense of what some of the next milestones or steps are as you can make good progress.
Speaker Change: Okay, Great Yeah, No. My second question was going to be similar on the geographic diversification, maybe I can hone in on the U S customer and perhaps you can give a sense of what some of the next milestones are steps are as you seem to be making good progress there.
David Wong: Yeah, as I mentioned, we're continually, you know, marketing spending our customer base in the US, and wherever our one key customer, we're gonna ship in our second tool, second type of tool with a bevel and backside to this key customer. And meanwhile, we're also, you know, talking, discussing multiple customers in the US, both for their, you know, front end and also for their packaging side. So we see their, you know, big potential and their growth in the U.S. market.
Speaker Change: Yeah, as I mentioned and we're continually.
Speaker Change: Marketing spending on our customer base in the U S and wherever our one key customer shipping our second in tool second type of tool with a barrel in <unk> and so this is a key customer.
Speaker Change: New line, where also.
Speaker Change: Talking just kind of multiple customer U S.
Speaker Change: And both for their front and also for their packaging side.
Speaker Change: So we see there being a.
Speaker Change: Potential in the globe.
David Wong: And meanwhile, we also, you know, access the market in their Singapore and also, you know, Europe, right? Well, our first tool has been delivered to one key US, I mean, European customer. And we think there'll be, you know, and in the qualification phase now, we're expecting this first tool will result in, you know, their second repeat order. I think that's it, right? Hey Mark, anything you want to add?
In the U S market and.
Speaker Change: In the Meanwhile, we're also.
Speaker Change: Access.
Speaker Change: <unk> in there.
Speaker Change: Paul and also European right. We are first of all has been delivered to their one key U S European customer.
Speaker Change: And we think there'll be.
Speaker Change: And in the qualification phase now.
Speaker Change: We're expecting this first tool resulting.
Speaker Change: Secondly repeat order.
Speaker Change: And then that's it.
Mark A. McKechnie: Yeah, yeah. So, no, thanks.
Speaker Change: Mark anything you want to add yes, yes.
Mark A. McKechnie: International, I think when we talked about our guidance when we first presented it last quarter, we got asked a lot about how much would contribute from international. This year is still a build year. We're hopeful that we can get, following the qualification of the US customer, we're hoping that we can get some orders here soon. We're not certain how much will fall into this year versus next, but that's always been the plan. But so, and even for the Europeans, so we probably expect some contribution, but really, this would be a build year, and any significant orders would probably be for shipments next year.
Speaker Change: Thanks.
Speaker Change: International I think when we talked about our guidance when we first presented it last quarter, we got items a lot about how much would contribute from international this year is still in internet.
Speaker Change: <unk>.
Speaker Change: Hopeful that.
Speaker Change: We can get following the qualification of the U S customer, we're hoping that we can get some orders here soon.
Speaker Change: Not certain how much will fall into this year versus next and that's always been the plan but.
Speaker Change: So.
Speaker Change: And even for the European So we probably expect some some contribution but really this is it would be a build year in any significant orders would probably be for shipments next year.
Suji DeSilva: Thanks, David. Thanks, Mark. I'll pass it along. Thank you.
Speaker Change: Okay. Thanks, David Thanks, Mark I'll pass it along.
Operator: Thank you. One moment for our next question. Our next question will come from the line of Christian Schwab from Craighalem. Your line is open.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question. Our next question will come from the line of Christian Schwab from Craig Hallum. Your line is open.
Christian David Schwab: Hey, great. Thanks for taking my question. I just have one follow-up to the earlier conversation. Now that you're seeing broadening, you know, potential success. In the international market, it seems that in the bigger picture, multi-year area, I know you've outlined a billion dollars in sales in China, and the market outside of China for your products is materially greater. You know, on a multi-year outlook, do you have increased conviction now that this business can be much bigger than a billion dollars?
Christian David Schwab: Hey, great. Thanks for taking my question I, just had one follow up to the earlier conversation now that youre seeing.
Christian David Schwab: Broadening potential success in the international market it seems that.
Christian David Schwab: Bigger picture multiyear area.
Christian David Schwab: I know you've outlined a $1 billion in sales in China, and the market outside of China for your products is materially greater.
Christian David Schwab: Multiyear outlook.
Christian David Schwab: Have increased conviction now that.
Christian David Schwab: This business can be much bigger than a $1 billion.
David Wong: Yeah, actually, you know, in there, in our layout, we're pretty confident we're going to reach even a billion dollar market in only China. And obviously, at the same time, we penetrate or they're exploring the international market with our differential technology. So we see that there are... trend, you know, continual acceleration.
Speaker Change: Yeah actually in.
Speaker Change: In our layout where PD.
Speaker Change: Confidence, we're going to reaching even built into our margin by only China market.
Speaker Change: And obviously at the same time, we're penetrated or they're exploring international market with our differentiated technology.
David Wong: So, as I said, we're looking at the key customers in the US and their, you know, their property, their manufacturing in Singapore. And also, we're looking at with the, you know, Taiwan customer too. And plus, recently, we hired our key, you know, I call it the key top manager in the Korean operation, and which is DG Kim. He is a real veteran of SK Hynix.
Speaker Change: So we see that either.
Speaker Change: Trend continue accelerating so as I said, we're looking at there.
Speaker Change: There are key customer U S and they are.
Speaker Change: Property, they're manufacturing in Singapore.
Speaker Change: So we're looking at with the Taiwan customer <unk> and Plaza reason right with higher or.
Speaker Change: Key.
Speaker Change: I caught key manager in the Korean operation and would you <unk> he is real vectoring.
David Wong: And so we're really putting the effort in, and they're, you know, marketing sell our product globally. So we're saying, obviously, their international revenue and the contribution will get into our, you know, total growth. As I said, in the long term, we want half of their revenue to come from, you know, China, and half of them from outside China. So that's a goal still in our sights, to continue our goal here.
Speaker Change: SK Hynix and so were really put effort in there.
Speaker Change: Marketing and sell our product in a global so we are seeing obviously, they're international our revenue and the contribution we're getting into our.
Speaker Change: Total gross.
Speaker Change: In the long term well under half of our revenue come from China and half of them from outside China. So thats our goal is stealing.
Speaker Change: I'll go here.
Christian David Schwab: Fantastic. No other questions. Thanks.
Speaker Change: Fantastic no other questions. Thanks.
Speaker Change: Thank you Christian.
Operator: Thank you. One moment for the next question. And as a reminder, that's Star 1-1 for questions. Our next question comes from Ross Cole from Needham. Your line is open.
Speaker Change: Thank you one moment for our next question.
Speaker Change: As a reminder that start at 101 for questions.
Speaker Change: Our next question comes from the line of Ross call from Needham Your line is open.
Ross Cole: Great, thank you guys for taking my question on behalf of Charles Shi today. So shipments in the first quarter were pretty high. I know you don't typically guide shipments, but do you have any thoughts on the rest of the year? Or do you expect the Q1 shipment level to sustain at a similar level or possibly go higher or lower in the next three quarters?
Ross: Great. Thank you guys for taking my question on behalf of Charles shoot today.
Ross: Shipments in the first quarter were pretty high.
Ross: Typically guide shipments, but do you have any thoughts on the rest of the year or do you expect the Q1 shipment level to sustain through a similar level or possibly go higher or lower in the next three quarters.
David Wong: Yeah, okay, let me answer, maybe Mark can follow. Obviously, you know, first quarter shipment hire is partially contributed to our delayed shipment Q4 of last year, right? So that's why, part of the reason, plus also our manufacturing also did a good job in the Lunar New Year. So we're saying probably Q2 was slightly lower than Q1, but we also continue to see that it grows in Q2 and Q3 and Q4. So, Mark, anything you want to comment on? Yeah. No, thanks.
Speaker Change: Yes, Okay, let me answer maybe a marketing follow obviously first quarter, assuming higher partially contributed by our the latest shipment in Q4 of last year right. So that's why part of the reason plus also our manufacturing with a difficult job in the lunar new year. So were I'd say, probably Q2 was slightly lower.
Ross: In Q1, but also continuing to see that at globe in Q2, and Q3 and Q4.
Mark A. McKechnie: Yeah, so we still, certainly expect shipments to be higher than our revenue growth for the year. I mean, it's a pretty solid shipment year. But yeah, as David noted, Q2, they probably normalized a bit relative to that inventory piece, but we'd expect it to kind of shift back up in Q3 and Q4.
Mark A. McKechnie: Yeah, no, thanks. And Ross, I appreciate the question.
Speaker Change: So mark anything you want to comment yes, no. Thanks.
Speaker Change: Ross I appreciate the question.
Mark A. McKechnie: Yes so.
Mark A. McKechnie: We still we certainly expect shipments to Chrysler.
Ross: To be higher than our revenue growth for the year I mean, it's a pretty solid shipment year.
Speaker Change: As David noted Q2, they probably normalize a bit relative better inventory piece.
Speaker Change: But we would expect that to kind of shift back up in Q3 and Q4.
Ross Cole: Great, thank you. That was my only question. OK. Thanks, Ross.
Speaker Change: Great. Thank you that was my only question.
Speaker Change: Great. Thanks Ross.
Operator: Thank you. One moment for our next question. Our next question will come from Charlie Chan from Morgan Stanley. Your line is open.
Speaker Change: Thank you one moment our next question.
Speaker Change: Okay.
Speaker Change: Our next question will come from the line of Charlie Chan from Morgan Stanley. Your line is open.
Charlie Chan: Hi David, Mark, thanks for taking my question and also congratulations on very good results, execution, etc. So I'm not sure, but I feel like this time around you are more open to talking about Hynix, HBN, and business, no matter the claiming or the ECP business opportunity. May I know if you have a significant breadth there? I remember you kind of have some demo tool there, but is that now a conference project wins in the recurring order? May I confirm that?
Charlie Chan: Hi, David Thanks for taking my question.
Charlie Chan: Congrats.
Charlie Chan: Very good results execution et cetera.
Charlie Chan: So I'm not sure, but I feel like this time around you opened it took about Hynix HBM.
Speaker Change: No matter, claiming the ECP business opportunity May I know if you have good evening Brad there.
Charlie Chan: I remember you kind of have a demo tour there, but is that now a kind of a trend.
Charlie Chan: Project way into and then regarding order may come from that.
David Wong: Yeah, actually, you know, Hynix is one of our key customers, right? And they're also a really long-term customer, too.
Brad: Yes, actually one of our key customer right and there also is a real on a long term customer too.
Brad: And we're now adding Moreover, obviously.
David Wong: Then we're now adding more of a, obviously, our flagship SAAF megasonic cleaning can offer much more uniform megasonic energy contribution. So, therefore, you can clean every via of the wafer, which is very important for TSV and their process. And second one, real copper plating, right? It's really in their either packaging, you know, 3D, 2.5, 3D, and also in their TSV. So, we're engaging with the customer, and what we think of, essentially, the product, and definitely can be their, you know, potential choice for them to take. So, we're still in the process right now.
Brad: Flagship SaaS nexon and Canadian can offer much uniform megafon eager energy contribution. So therefore, you can clean every year of the wafer which is very important for TSV and deposits and second line real complicated rate is really in either packaging.
Brad: <unk> 2.5, <unk> and also in the TSV.
Brad: We're engaging with the customer in there.
Brad: Was there anything to differentiate the product and definitely can be there.
Brad: Particular choice for them to take so we're feeling.
Brad: Right now.
Charlie Chan: Okay, okay. Many of those kind of key technologies can be used in advanced packaging, for example, COAS or TSMC SOIC. So just my understanding, I think it's not just TSMC that can provide the COAS or 2.5D advanced packaging. I think Intel, even the M-Core, I mean, have those advanced packaging stuff, right? So are you guys going to apply those opportunities? Yeah.
Brad: Okay. Okay.
Speaker Change: Got it.
Speaker Change: Key technology can be used in the advanced packaging.
Speaker Change: Paul.
Speaker Change: Carlos.
Speaker Change: Okay.
Speaker Change: So yes.
Speaker Change: My understanding I think it's not just cancer.
Speaker Change: Hello by the Colorado to volume.
Speaker Change: Advent Peggy I think.
Speaker Change: Intel.
Speaker Change: Even the EMCORE I may have had the advanced packaging.
Speaker Change: Scott.
Speaker Change: So how are you guys going to the Pie chart with those opportunities.
David Wong: Yeah, obviously, like you said, our carbon plating can definitely be used by other customers, right, for this advanced packaging process. And so we're approaching multiple other customers right now, and as in this market, you know, obviously only a few players, and we can be an alternative choice for them to take. Also, we do have some differential, you know, technology that differentiates our performance with other guys. So we're, we're very confident, and we can get it in the market. And, you know, for their outside China market.
Speaker Change: Yes, obviously like you said, Stephanie our comparable <unk> for their other customers ramp for this.
Speaker Change: The non packaging process.
Scott: So we're proteins multiple other customers right now.
Scott: And.
Scott: I think this market, obviously only a few player and we can be an alternative of choice for them to take also we do have some differential.
Scott: What the fringe of outperformance with other guys. So we're we're very confident we can get in the market.
Scott: <unk>.
Scott: Or they're outside China market.
Charlie Chan: Okay, yeah, actually, my second question is also about international markets. I remember four years ago, when I started to cover the stock, I always had this question: when are we going to get into TSMC, right? And four years later, I feel like TSMC was to be a very, very important target; they continue to open new fabs, not just in the US but also in Japan, and next will be Germany, including both mature nodes and the leading edge.
Speaker Change: Okay, Yes.
Speaker Change: Second question is about it.
Speaker Change: Also international markets I remember four years ago.
Speaker Change: To cover the stock.
Speaker Change: Oh It added question.
Speaker Change: They're indicating.
Speaker Change: TSMC.
Speaker Change: Four years later I feel like.
Speaker Change: J B.
Speaker Change: To be very very bold and target they continue to open a new fabs.
Speaker Change: The U S, Japan and next will be Germany.
Charlie Chan: So my question is, what do you need to do, right, to really understand the customer? Yeah, can you give us some color, whether it's technology or production, location, or pricing, whatever? What was the issue right now?
Speaker Change: Both have mature nodes in a leading edge so.
Speaker Change: So my question is that what what do you need to do it right too.
Speaker Change: <unk>.
Speaker Change: When is when is the customer.
Speaker Change: Yes can you give us some.
Speaker Change: Color, whether it's technology or.
Speaker Change: Kind of production.
Speaker Change: Location or pricing or whatever.
David Wong: Yeah, well, I mean, obviously, like you said, TSMC is one of our key customer targets. And, you know, we've been working with them for multiple years, and we're still engaged with them, by the way. And so, we're in a new evaluation talking process right now, right? As I said, our cleaning, also our copper plating, definitely is one of the key products, right? Differentiate with the other
Speaker Change: The issue right now.
Speaker Change: Yes, well I mean, obviously like you said TSMC one of our key customer targets.
Speaker Change: And we're working within multiple year.
Speaker Change: And we're still engaged with them by the way.
Speaker Change: And so we're in the field.
Speaker Change: And parking process right now right as I said, our Canadian also cooperating definitely is one of the key.
Speaker Change: Product differentiator with the other player. So so we have covenants right.
David Wong: So, we're coming in, right? And anyway, probably I cannot tell you now what's going on, but we're fully engaged with the JSMC. It's our potential target, obviously.
Charlie Chan: Okay, okay. Yeah, that's all the questions I have.
Speaker Change: Anyway, probably I cannot tell you now whats going on but we are fully engaged with TSMC is.
Speaker Change: Potential market obviously.
Operator: Thank you for your time. Thank you. Thank you.
Speaker Change: Okay. Okay, yes.
Speaker Change: Other question I have.
Speaker Change: Central Europe.
Speaker Change: Thank you thank.
Mark S. Miller: Thank you. One moment for our next question, and our next question will come from Mark Miller from the Benchmark Company. Your line is open. Congratulations on another upside report.
Speaker Change: Thank you.
Speaker Change: Thank you one moment our next question.
Speaker Change: And our next question comes from the line of Mark Miller from the benchmark Benchmark Company. Your line is open.
Mark S. Miller: Hi, congratulations on another upside report.
Mark S. Miller: Wondering if youre seeing any impacts such as push outs from the slowing of EV demand.
Mark S. Miller: In China.
David Wong: Um, okay, that's a good question. Actually, we see, you know, a few, I mean, quite a bit of customers focus on their IGBT production line. And we see that continue to grow because, anyway, IGBT production in China is still in the early stage, right? So we see their customers continue expanding. And for this IGBT, you must And also, we do have a very good partner in cleaning and also in the furnace for the right to support the IGBT market. I'm just wondering how much cash
Mark S. Miller: Okay, well Thats good question actually we see there.
Mark S. Miller: I feel fine.
Mark S. Miller: Quite a bit of customer focus on the <unk> production line.
Mark S. Miller: And we see it as continued growth because with any way I DVD palash.
Mark S. Miller: Lastly, in China is still early stage right. So we see there coupled with continued expanding and.
Mark S. Miller: For this <unk> investment.
Mark S. Miller: And also we do have a regular opana and cleaning.
Mark S. Miller: And also in our furnace right is supporting the IGT market.
Speaker Change: I'm, just wondering how cash cash flow during the quarter that you consume cash.
Mark A. McKechnie: Yeah, hey, Mark, I'll take that. So it'll show up in our queue. But cash flow from operations was 9.6. We used nine, about $9.6 million. Yeah.
Speaker Change: Yeah, Hey, Mark I'll take that so it'll show up in our Q, but cash flow from operations was nine.
Mark: <unk> $9 six we used about $9 6 million.
Speaker Change: Thank you.
Speaker Change: Okay.
Operator: Thank you. And I'm not showing any further questions in the queue. I'd like to turn the call back over to Steve for any closing remarks.
Speaker Change: Thank you.
Speaker Change: And I'm not showing any further questions in the queue I'd like to turn the call back over to Steve for any closing remarks.
Steve Palaio: Okay, thank you, operator, and thank you all for participating in today's call and for your support. Before we close, let me just mention a couple of upcoming investor relations events. On May 29th, we will present at Greg Hollum's 21st Annual Institutional Investor Conference in Minneapolis. From June 25th to 26th, we will present at the 10th Annual ROC London Conference at the Four Seasons Park Lane, London. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representative to register and schedule a one-on-one meeting with the management team. This concludes today's call, and you may now disconnect.
Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.
Steve Pelayo: Okay. Thank you operator, and thank you all for participating in today's call are important support before we close let me just mention a couple of upcoming Investor relations events.
Steve Pelayo: On May 29, we will present at Craig Hallum, 20, <unk> annual institutional Investor Conference in Minneapolis.
Steve Pelayo: From June 25th to 'twenty six we will present at the 10th annual Roth London Conference at the four seasons Park Lane, London attended that conference is by invitation only for interested investors. Please contact your respective sales representative to register and schedule. One on one meeting with the management team. This concludes today's call.
Steve Pelayo: And you may now disconnect.
Steve Pelayo: Yes.
Speaker Change: Thank you for your participation in today's conference. This concludes the program you may now disconnect everyone have a great day.
Speaker Change: Thanks.
Speaker Change: Okay.
Steve Pelayo: [music].
Steve Palaio: Okay.
Steve Pelayo: Yes.