Q3 2024 Sequans Communications SA Earnings Call
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Good morning, ladies and gentlemen, and welcome Giudici Quench Communications third quarter 'twenty 'twenty four financial results conference call.
Speaker Change: At this time all lines are in listen only mode. Following the presentation. We will conduct a question and answer session you, but any time. During this call you required immediate assistance. Please press star zero for the operator.
Speaker Change: This call is being recorded on Tuesday November five of 'twenty 'twenty four I would now like to turn the conference over to MS. Kim Rogers managing director will be in a R. Please go ahead.
Kim Rogers: Thank you Kelly and thank you to everyone participating in today's call joining me on the call today from seek ones is George Karam, Chairman and CEO and Deborah Choate CFO before turning the call over to George I'd like to remind our participants that the following important infor.
Asian on behalf of CCAR.
First sequence issued an earnings press release. This morning, and you can find a copy of the release on the company's website at Www sequins Dot com under the newsroom section.
Kim Rogers: And before we start I'd like to remind everyone that this conference call contains projections and other forward looking statements regarding future events or our future financial performance and potential financing sources, all statements other than present and historical facts and conditions contained in this release, including.
Any statements regarding our business strategy cost optimization plans strategic options the ability to enter into new strategic agreements expectations for massive Iot sales, our availability to convert our pipeline to revenue.
And our objectives for future operations are forward looking statements within the meaning of the private Securities Litigation Litigation Reform Act of 1995 section 27, a of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange.
Kim Rogers: <unk> Act of 1934 as amended these statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risks and uncertainties and subject to change at any time, we operate in a very competitive and rapid.
Kim Rogers: But he changing environment, new risks emerge from time to time, given these risks and uncertainties you should not rely on our place undue reliance on these forward looking statements actual events or results may differ materially from those contained in the projections or forward looking statements or information on factor.
Speaker Change: That could affect our business and financial results are included in our public filings made with the security and Exchange Commission and now I'd like to hand, the call over to George Karam. Please go ahead George.
George Karam: Thank you Kim.
George Karam: Good morning, everyone.
George Karam: I'd like to thank you all for joining us today.
George Karam: I'm excited to share an update on where sequenced tens as we continue our transformation following the successful closing of <unk> welcome to you.
George Karam: As you May know.
George Karam: We navigate think rebuilding fees.
George Karam: And I'm pleased to say that we believe.
George Karam: Sequences on a strong trajectory.
George Karam: Toward growth and long term success.
George Karam: Let me walk you through the recent development.
George Karam: I think why we believe in our future success and growth.
George Karam: First.
George Karam: We successfully closed the quite comparable section.
George Karam: <unk> $200 million and funding for the company.
George Karam: This was a critical milestone for us.
George Karam: The deal not only enhances our financial standing.
George Karam: But more importantly.
George Karam: Validates our technological leadership in the cellular Iot space.
George Karam: This will serve the confidence of bus or existing and potential customers.
George Karam: Our ability to innovate.
George Karam: Compete and support them and multi year relationships.
George Karam: Our financial stability is no longer a challenge.
George Karam: And the major industrial leader has endorsed our technology.
George Karam: Second.
George Karam: As we have retained perpetual licensing rights to all of them.
George Karam: Unfortunately, our use of technology.
George Karam: We can maintain and enhance our <unk> product offerings.
George Karam: With LTM NB Iot monarch two.
George Karam: And Catherine this calliope two platforms.
This enables us to support our design win pipeline.
George Karam: And drive short term revenue growth.
George Karam: Meanwhile, we'll focus our R&D resources.
George Karam: On developing next generation it.
George Karam: Innovative five G that gap and that gap solutions.
George Karam: To continue our growth trajectory and create more value for our shareholders.
George Karam: Let me provide more detail on these points.
George Karam: Starting with financial stability.
George Karam: I'm pleased to confirm that in October.
George Karam: We fully repaid all mature debt.
George Karam: And the cleared all overdue.
George Karam: It will all our suppliers.
George Karam: Our balance sheet is now nearly debt free.
George Karam: Marking a significant turning point in our ability to operate with a greater flexibility.
George Karam: With our strategy centered on massive Iot.
George Karam: We are now well positioned to make targeted investments in R&D.
George Karam: While effectively managing our reducing our cash burn rate in 2025.
George Karam: Combined with anticipated revenue growth next year.
George Karam: Im confident in our trajectory toward achieving breakeven by 2026.
George Karam: I want to recognize the incredible support we have received from our customers.
George Karam: Over the past year, our customers have remained steadfastly committed to see cost despite our challenges.
George Karam: As a result, we have retained almost 100% of our existing design win projects.
George Karam: Representing a corresponding three year revenue pipeline that accounts for approximately $250 million.
George Karam: Future revenue.
George Karam: These design wins cover a variety of Iot applications.
George Karam: For a multi year deployments.
George Karam: With must in the large markets.
George Karam: Metering tracking and fleet management.
George Karam: While previous financial challenges limited our ability to secure new project wins.
George Karam: This did introduce our customer traction.
George Karam: But it's currently in our cat one calliope two product.
George Karam: Now with this solid financial footing, we are back to work on the pipeline of opportunities and all disappear securing new design wins in 2025.
George Karam: In fact, both existing and potential new customers.
George Karam: As well as partners.
George Karam: Impressed by our Qualcomm transaction and they fully support our strategy post deal.
George Karam: The testimonial in our recent press release.
George Karam: Affirmed their view of the value of our technology and I'll sequence as a trusted partner.
George Karam: The recognition of our leadership in the <unk> industry.
George Karam: The scores the competitive strength of our products and solutions.
George Karam: Okay.
George Karam: Now with our team solely focused on executing our business strategy.
We are devoting all of our energy and resources to driving growth.
George Karam: Importantly, we are more confident than ever in our competitive edge.
George Karam: This confidence.
George Karam: <unk> from our ability to execute.
George Karam: An innovative product strategy that enhances our existing <unk> Iot platform.
George Karam: And drives the introduction of next generation Fabs, you that gap and eat at cap products.
George Karam: We expect this will accelerate to new design wins.
George Karam: While the existing design win projects move to mass production.
George Karam: Let's take a closer look at our revenue growth and outlook for the upcoming quarters.
George Karam: Two key factors provide us with a strong visibility into our revenue trajectory.
George Karam: The coming year.
George Karam: And beyond.
George Karam: For the coming year and beyond.
George Karam: First on the product side, our design win pipeline remain robust with more projects transitioning into mass production.
George Karam: <unk> in the fourth quarter of this year and continuing through 2025.
George Karam: Second we.
George Karam: We have a line of sight for new projects coming online in 2025 that we expect to accelerate our growth in 2026.
George Karam: All this on display to growth is based on existing matured monarch, two and calliope two platforms.
George Karam: Limited R&D investments.
George Karam: Our design win pipeline.
George Karam: It's built with industry, leading customers such as I drawn Honeywell and genotype.
George Karam: As well as with major ODM partners aggregating and numerous OEM customers.
George Karam: Many of these design wins have an average lifecycle that exceeds five years.
George Karam: Riding stable revenue streams over the long term.
George Karam: Similarly, we are engaged with tier one customers on numerous new opportunities.
George Karam: That's we are targeting to close in the coming quarters.
George Karam: It's important to highlight that in addition to 45 G.
George Karam: <unk> sales.
George Karam: Sequence will continue expanding its licensing and services business.
George Karam: First we continue supporting our existing Chinese partner in.
George Karam: And expect this relationship to generate services and royalty revenue in the future.
George Karam: Second we have other engagements, we believe could lead to new licensing and service deals in 2025.
George Karam: In fact, our existing five VIP and.
George Karam: Any future innovations on Red Kap, and yeah that gap should allow us to secure new licensing deals.
George Karam: Similar to what we have done in the past.
George Karam: Our licensing strategy involves addressed.
George Karam: Addressing new market segments or regions through partnerships and securing new business opportunities with limited investment.
George Karam: This approach could bring incremental growth through high margin licensing and services revenue.
George Karam: Advancing our path to breakeven.
George Karam: We are optimistic about near term revenue growth.
George Karam: With backlog in hand, we expect fourth quarter product revenue to double from the third quarter.
George Karam: Looking ahead to 2025.
George Karam: We anticipate product revenue growth to continue as the new design win projects move to mass production.
George Karam: Additionally, we expect some licensing and service revenue from existing engagements.
George Karam: Any new deals that we targeted closing into 'twenty one.
George Karam: Operationally, we are targeting cash operating expenses.
George Karam: Meaning excluding depreciation amortization and equity compensation expense.
George Karam: To fall below $10 million per quarter in 2025.
George Karam: Driven by a combination of cost efficiencies.
George Karam: And focused R&D investments supporting our revenue growth.
George Karam: This reduction in expenses will allow us to reduce our cash needs.
George Karam: Okay.
George Karam: Now as the last point I want to dive into one of the key questions on investors' mind, how sequence will remain competitive in the Iot market.
George Karam: Especially in such a rapidly evolving industry.
George Karam: The answer lies in our ability to continue delivering products into which.
George Karam: I'm proud to say that we have retained a world class engineering team.
George Karam: With deep expertise in <unk>.
George Karam: This team's expertise is drive is the driving force behind our roadmap for improving monarch, two and calliope two platforms.
George Karam: And introducing next generation <unk> products.
George Karam: Sequence also has a differentiated go to market strategy.
George Karam: With the flexibility to support our customers in.
George Karam: In unique ways by providing everything required.
George Karam: As one stop shop.
George Karam: Trips modules and software solutions.
George Karam: Which are customizable as needed for a broad scope of our UC applications.
George Karam: Additionally.
George Karam: I'm sure that company, that's got technology are gaining significant importance with Iot industrial customers.
George Karam: Looking for a future proof cellular connectivity solution.
George Karam: In anticipation of the evolution of the network to pure <unk>.
George Karam: Our roadmap is closely aligned with.
George Karam: With <unk> Standalone deployments.
George Karam: We're the first to market approach.
George Karam: Setting the stage for us to take advantage of the growing demand for next generation fiber connectivity solutions.
George Karam: Another factor supporting.
George Karam: A lot of continued relevance.
George Karam: Is that industrial is growing need for at least two reliable sources of western design technology.
George Karam: From suppliers fully committed to cellular Iot.
George Karam: With a comprehensive full <unk> and <unk> product offering.
This means that customers.
George Karam: Especially those in North America, Europe, and Japan need.
George Karam: We need more than one chip alternative.
George Karam: There are sovereign challenges and avoid relying too heavily on one supplier.
George Karam: This factor combined with the current geopolitical situation.
George Karam: Positioned sequence exceptionally well.
George Karam: Particularly after the endorsement of our technology with the Qualcomm transaction.
George Karam: In summary.
George Karam: There are four key indicators that demonstrate sick ones is in a dynamic rebuilding phase.
George Karam: First.
George Karam: We've significantly we've significantly transformed our balance sheet.
George Karam: Eliminating nearly all of our debt.
George Karam: As substantially strengthening our cash position.
George Karam: Second.
George Karam: We've retained the rights to our <unk> technology, which enables us to continue supporting our existing customers.
George Karam: While building new products and.
George Karam: And next generation <unk> solution.
George Karam: Third we have preserved our critical customers and supplier relationships.
George Karam: Ensuring that the design wins, we have secured are entering mass production.
George Karam: <unk> got visibility into product revenue growth for 2025.
George Karam: Last we anticipate generating new licensing and services revenue sources that will further limit our cash burn.
I would now.
George Karam: Turn the call over to David to review, the third quarter financial results in detail.
George Karam: No.
David: Thank you Joanne and good morning to everyone. I just wanted to get started please note that the financial results released today are preliminary and final results are subject to finalization of the purchase price allocation, including reheating purchase price allocation inside Truecar com, which is expected to be completed in December this price.
This involves allocating the purchase price and then the acquired tangible and intangible assets based on their estimated fair market value its processes required for that financial reporting and tax purposes.
George Karam: Now moving onto our third quarter overview.
George Karam: Revenues for the third quarter of 2024 increased 29, 5% to $10.1 million and $7 8 million in the third quarter of 2023 and increased sequentially by four 2%.
George Karam: Got it revenue accounted for 23, 4% of total revenues compared to nine 7% in the third quarter of 2023 and.
George Karam: 25, 2% in the prior quarter.
George Karam: We experienced a shipment delay at the end of September which prevented us from shipping about $500000 of product.
George Karam: Licensing revenue was $77 million or nine 8% increase Kentucky's 7 million in the prior year quarter, and a six 7% increase compared to seven for Qunar in the second quarter of this year.
George Karam: This quarter, we recognized $6 $7 million in revenue from parcel delivery under our sidekick license to Qualcomm as part of the overall transaction.
George Karam: We expect additional licensing revenue under this agreement to be recognized in Q4.
George Karam: <unk> 2025.
George Karam: Gross margin in the third quarter of 2024 of 82.5% continues to reflect the favorable impact of higher margin license revenue dominating the mix and stable compared to 84% gross margin in Q2.
George Karam: Well I cannot project revenue was 36, 9% in Q3 compared to 39, 1% in Q2.
George Karam: I answer S. Operating profit was $87 million in the quarter compared to operating losses of $3 7 million in Q2 of 2024.
George Karam: Seven 8 million in the third quarter of 2023.
George Karam: The increase in operating profit compared to the prior quarters is due to the net gain on the sale of the <unk> assets sold to Qualcomm.
George Karam: $452 $7 million.
George Karam: Our estimation of the value of the asset sold is 175 4 million gross gain was reduced by the net book value of R&D capitalized for monarch, two and calliope two of $18 $4 million.
George Karam: And by getting related fees and expenses.
George Karam: This gain was partially offset by a noncash impairment charge.
George Karam: $6 $6 billion, Brian tangible intangible assets related to our twice product.
George Karam: As a result of our decision to indefinitely suspend development of the scientists flight towards project. We determined it was appropriate to write off the assets on the balance sheet that we're dedicated to us.
George Karam: We had an increase in R&D expense due to no longer capitalizing R&D related to twice.
George Karam: But we continue to capitalize calliope two cost through the gate the asset sale.
George Karam: And we had increases in all lines of operating expenses due to an exceptional Dennis kill Island flying from management.
George Karam: Interest expense decreased compared to the prior quarter due to lower interest expense and maturity debt.
George Karam: Interest in Q3 was accrued at the contract rate with no I am sorry its impact.
George Karam: On a non <unk> basis, our net profit for Q3 2024 was $85 million.
George Karam: Or $2.91.
George Karam: Great dilutive ABS.
George Karam: Okay.
Speaker Change: Can I ask whereas net loss of $5 8 million or <unk> 23 cents per diluted EPS in the prior quarter and a non <unk> net loss of $6 8 million or 29 cents per diluted ads in the third quarter of 2023.
George Karam: The per a D S and various reflect the change in our a D S to ordinary share ratio.
George Karam: Second on October 9th.
George Karam: We changed Q1, a D S representing 10 ordinary shares.
George Karam: One ats representing four ordinary shares.
George Karam: Cash and cash equivalents totaled $173 $6 million at the end of Q3 compared to.
George Karam: $13 1 million at the end of Q2.
George Karam: Our Q3 balance includes $172 million in proceeds from the Qualcomm transaction received on September 30th 2024.
George Karam: Subsequent to quarter end, we repaid about $85 million and matured debt and accrued interest lowering the debt balance shown on the balance sheet as of September 30th Madison entered.
George Karam: Our remaining debt is alert to the French government as well as advances for R&D projects, including for <unk> E rate wed kept it out route we Pandora once we begin to commercialize the underlying products.
George Karam: In October we also pay down over due to supplier accounts and fees related to the transaction.
George Karam: Turning to the outlook, we expect approximately 10% sequential growth in Q4 of 2024.
George Karam: Product revenue is expected to double from Q3 and licensing and service revenues will remain significant.
George Karam: Putting a licensing component related to the Qualcomm deal.
George Karam: Note that as of the end of September 2024, it was around $13 million of licensing revenue related to the Qualcomm gear that will be recognized between Q4, and 2025 and the timing will depend on the timing of delivery of various IP.
Speaker Change: In addition, as George mentioned, we are implementing actions to reduce our cash operating expenses.
Speaker Change: I mean, even excluding depreciation amortization and equity compensation expense to be even a $10 million per quarter on average in 2025.
Speaker Change: On a final note we are attending the upcoming Roth and then N K Energy Conference in New York City on November 20th.
George Karam: Please contact your Roth representative to schedule and went out and run with us.
Speaker Change: Sure Kim Rogers, our IR consultants can insist that can assist in it's in scheduling our call with George and me.
Speaker Change: Kim's contact information is at the bottom of today's press release.
Speaker Change: At the conclusion of this call we will post a written version of our formal remarks in the Investor Relations section of our website under webcast and presentations page. The same location, where you can find the audio replay.
Speaker Change: Now I'll turn the call back to George.
George Karam: Thank you Debra.
George Karam: Operator, we are ready to open the call for Q&A. Please.
Speaker Change: Thank you I would like to remind everyone. If you would like to ask a question. Please press star followed by the number one on your telephone keypad, if youre using a speaker phone. Please make sure you gave me it function is turned off John while your signal to reach our equipment again.
George Karam: Please press star one to ask the question I will pause for just a moment to allow everyone to signal for questions.
George Karam: Our first question comes from the line of Scott Searle from Roth Capital. Please go ahead.
Scott Searle: Hey, good morning, good afternoon, congrats on getting the deal closed George and congrats on the improving outlook in customers returning to.
Speaker Change: To buy sequence product.
Scott Searle: Hey, Thank you. Thanks, George maybe just to start on that front.
George Karam: Product recovery seems to be strongly underway, you've provided some details and some of the verticals I'm wondering if you could go a little bit more into detail too to seeing how that recovery progresses into 2025, I know there was a lot of.
George Karam: <unk> meter opportunities, there's a lot of fleet opportunities that are in the pipeline and how you expect that to kind of continue to ramp in 2025, given that you've got a $250 million design win pipeline.
George Karam: So kind of how that's starting to break down also by technologies are you starting to skew more towards Caf, one versus Canada any color on that front would be helpful.
Speaker Change: I mean Scott.
Scott Searle: As you mentioned I mean really the D.
Speaker Change: The design win pipeline is intact and this is maybe the best thing she's known say during the last couple of years of challenge or year and a half on challenged because we could we could lose a lot of deals.
George Karam: Customers stick with us and they continue to design and I mentioned, a little bit like.
George Karam: Although the design win conversions was not fast or was it very minimum I should say now it's back to life and we are seeing traction again, and we start closing annuities.
George Karam: But to talk about.
George Karam: Specifically the growth do you need to imagine that this year most of our business was really focusing in terms of product on cat M. Monarch, two revenue, which are projects that they were they moved to production beginning of the year end.
Speaker Change: And there are progressing well.
Speaker Change: <unk> seen can you new ones coming in Q4.
Speaker Change: And this would continue next year with more projects, starting and Ryan talk about projects not necessarily always by the way.
Speaker Change: New customers, sometimes you'll have the same customer with whom we have like multiple projects and in the first year. We saw only one project converging to revenue and we are shipping to this customer, but the shipment level remain.
Speaker Change: I will say no.
Speaker Change: In comparison to the potential of this customer one three more.
Speaker Change: Projects will be turning to mass production as scheduled by our customer execute so we're going to see sequential growth, maybe Q1 will be a little bit.
Speaker Change: Q4, as I said, we will double the one will be okay.
Speaker Change: And then we'll continue from there growing every quarter. These on on what we are seeing in terms of convergence.
Speaker Change: Of product really.
Speaker Change: One customer we won just only waiting for the customer to turn to mass production and there is an inflection point as what next year related really to what you mentioned about the product nature as I said, we are shipping more today.
Speaker Change: Monarch and kept them Catlin business platform, we didn't ship much will be shipping a little bit in Q4, but really the beginning of this however, we had many customers projects or you know turning again to mass production, we start getting in backlog for next year with some customer ready already with that.
Speaker Change: Platform and others are you know.
Speaker Change: To turn to production.
Speaker Change: More towards the end of Q1 and Q2. So next year, we're going to continue with the of monarch two projects.
Speaker Change: Growth with more projects win and really the conversions of the design win of Calliope two troubling.
Speaker Change: To mass production next year, I will not say like half half next year, maybe and delight them. All there will be 60 40, because they kept one value is higher.
Speaker Change: One is still in the beginning of that however in 'twenty to 'twenty six we could see you kept one as big as cut them, even a little bit higher I tend to say.
Speaker Change: Great very helpful and maybe to just build on that and kind of wrap red cap into the conversation.
Speaker Change: It's clear from from going to industry trade shows and events that you guys have kind of been pulled into center stage post the Qualcomm.
Speaker Change: Acquisition.
Speaker Change: And it seems like from a design activity standpoint from a relevant standpoint validation standpoint, that's driving that.
Speaker Change: Is that opportunity pipeline that design win pipeline so.
Speaker Change: I Wonder if you could address that as well with red cap.
Speaker Change: The timing of Red Kap, and it seems like it's becoming increasingly.
Speaker Change: Increasingly more relevant with customer roadmaps, particularly on the industrial Iot front in terms of your ability to not only offer cat M. In cat, one but to migrate to red Kap and so how that's all playing together when redcap starts to become relevant and who the competition is.
Speaker Change: Yes.
Speaker Change: Yeah I mean this is Scott.
Speaker Change: Maybe just one clarification when you talked about Red cap, obviously is the family of reduced capacity of five juice was let's call. It low cost <unk> and we talk about that gap and year end cap and the difference between the two of debt, but that cap is really for the high end Iot for camera application because it allows you to do 100 150 Megabits per second one when you go to.
Speaker Change: Yeah that cap you limit the speeds really to let's say 10, megabits and below and eat at cap is the solution that will be I will say the.
Speaker Change: <unk> flavor of Cat, one business and LTM.
Speaker Change: And that's cap will be like addressing high end industrial application. So we're working on that too as we said or that gap will be faster and we will bring something to market.
Speaker Change: Next year I don't want to say more on this because we'll be announcing this and you know our customer they know Andrew Andy what we are telling them and we believe that Caf will follow.
Speaker Change: The following year to market from execution point of view.
Speaker Change: High level view of what I'm, saying you have now when you look to the demand.
Speaker Change: This would be you have to you need to understand it to get to that company that cap you want do you need <unk> to be Standalone, <unk> deployments, standalone, where today muscle of this <unk>.
Speaker Change: <unk> deployment or non standalone in other words for a device with connect first immediately on <unk> device definitely that all for GE to connect.
Speaker Change: And we know that in the U S carriers started their deployment of Standalone and this will take them, maybe a couple of years to be.
Speaker Change: I will say nationwide coverage, where you know that red Kap and ear head count will be almost a must.
Speaker Change: And every place.
Speaker Change: However, you have to think about it like the customers have concern and because you know they won't really to address them.
Speaker Change: No doubt evolution of the network.
Speaker Change: How they can deploy a device today, let's see meter, which is going to stay there for 10 years and I would like to get the Smith, our operating over 10 years, even more you can say today, maybe it's okay. If I deploy today because they can expect spend.
Speaker Change: 10, more years or Fuji network still available so if I deploy a 40 <unk> product. It's fine. If you project. This two three years down the road you start feeling the same customer even if all she is still operating.
Speaker Change: Going to challenge that what he's going to deployed maybe it will have any problem in five six or seven years down. The road. This means those customer will start asking to have a device couple of supporting your head count even if they don't want to use it immediately but they want to have a future proof that got capable and this is why we are pushing.
Speaker Change: For this and essentially support our customer with this transition of the network from <unk> to five <unk> and as I said, we have a very mature the platform LTM and get on this we will be making some improvement in as usual on existing products. However, the focus of our R&D will be to innovate on it.
Speaker Change: A new platform coming for Ian had GAAP to plan discontinuing T and support our customers.
Speaker Change: Great very helpful and lastly, if I could just on the licensing front looks like near term you're going to have some ongoing.
Speaker Change: Licensing recognition of Rev Rec from Qualcomm, but it sounds like Theres also a pipeline of opportunities building on the Red Kap and E. Red cap fund that are similar to the licensing deals you won in the past I'm wondering if you could elaborate on that front.
Speaker Change: Just how active engagement pipeline is and then I'll get back in queue. Thanks.
Speaker Change: Yeah, I mean, Scott I mean as you.
Speaker Change: As you know in our track record of <unk>. If you go back even 10 years I mean, there is no one year, where we didn't do.
Speaker Change: Strong licensing revenue.
Speaker Change: It's just not it's not that the skills, you know to too many hundred millions or whatever but this business exists and give them the capability to sequence. It's always got 10, plus maybe sometimes 20, plus and 30 plus million dollars, depending on the platform and so and this is because you know we are always on the azure with.
Speaker Change: Our innovation and we have customer and partner interested in approaching us and get access to this technology and.
Speaker Change: We believe this will continue we are engaged with many partners.
Speaker Change: Obviously, we'll be selective you know on the partner because we always do those deals to avoid impacting.
Speaker Change: Impacting order product revenue I'll say in terms of relationship by selecting the nature of this partnership.
Speaker Change: But we are quite optimistic and positive we have few deals under discussion and I'm sure. We'll find more next year in 2021.
Speaker Change: Great. Thanks, so much congrats on closing the deal and looking forward to 2025.
Speaker Change: Thanks Scott.
Speaker Change: Again first I want to ask a question. Thank you.
Speaker Change: There are no question at this time please continue.
Speaker Change: Thank you thank.
Speaker Change: Thank you operator, thank you again for joining the call today, just a few awards to conclude the skull as I said with.
Speaker Change: $250 million of three years product revenue design win pipeline.
Speaker Change: And the strong support of our customers to the new position of sequence.
Speaker Change: And our innovative product roadmap, we are confident in our ability to expand our market share and therefore, <unk> and <unk> remarks.
Speaker Change: The road ahead is exciting and I believe sequence is in a strong position to grow and be successful.
Speaker Change: I extend a heartfelt thanks to all our stakeholders.
Speaker Change: We will have stood by us and we look forward to your continued support thank.
Speaker Change: Thank you very much. Thanks, operator, we can close the call now.
Speaker Change: This concludes today's conference call. Thank you and you may now disconnect.
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