Q4 2024 Mobix Labs Inc Earnings Call
Any statement that refers to expectations projections or other characterizations of future events, including financial projections future market conditions or future product enhancements or development is forward looking statements <unk> actual future results could differ materially from those expressed in such forward.
Looking statements for any reason, including those listed in our SEC filings.
Seems no obligation to update any such forward looking statements, except as required by law.
For greater detail about risks and uncertainties. Please see our SEC filings, including our Form 10-Q for the quarter ended June 32024, and the section entitled Risk factors in the form S. One filed on August 12 2024.
In addition, this call includes non-GAAP financial measures reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our fourth quarter earnings release close to it on the Investor Relations section of our website.
With that I will turn the call over to Fabian <unk> UBS. Please go ahead.
Speaker Change: Thank you Laurie.
Speaker Change: I am pleased to announce a successful fourth quarter caps off mobile slabs result, as we approach our first fiscal year as a public company.
Speaker Change: It is an exciting time as we unleash the performance of next generation wireless sensing and connectivity solutions.
I am proud of our team's execution as we quickly grow the breadth of our offerings through organic growth and synergistic accretive acquisitions.
Speaker Change: Integrating employees and technologies as part of our core DNA and shaping Tomorrow's connectivity is front and center for all <unk> employees.
Speaker Change: In the fourth quarter, we executed on our plan and we grew revenues sequentially by 44% for our full year fiscal growth rate of 426%.
Also gross margins increased as we integrated <unk> systems and continued working on synergies and a more favorable mix of products and engineering services.
Speaker Change: We closed out the fiscal year with strong bookings, which position us well for our next fiscal year and mergers and acquisitions at <unk> Labs will continue to be in the news as we diversify our technology portfolio.
Speaker Change: Our recent announced letter of intent to acquire spacecraft components is an excellent example of our accretive funnel of M&A opportunities.
Speaker Change: Spacecraft is a leader in high precision mission critical components for aerospace defense and commercial applications.
Speaker Change: Also they are recognized for their cutting edge engineering and manufacturing capabilities.
These electrical connector components and accessories are vital to critical missile technology submarines naval ships oil rigs railcars military and commercial jet aircraft and many other applications.
Speaker Change: Notably these components are utilized in the Patriot missile the U S. Army's primary missile defense system and in technical manned and autonomous vehicles.
Additionally, space craft supplies key components for railcar systems in major metropolitan areas, such as Chicago, and New York.
Speaker Change: As a longstanding supplier to mobile slabs, we were aware of Spacecrafts excellent reputation and we see them as a natural fit as we expand our offerings into aerospace military and defense sectors and are more near term the transportation market.
Speaker Change: We expect that the acquisition will be accretive to <unk> lab's earnings and will increase our workforce by approximately 150 employees.
Speaker Change: We are really excited about this acquisition and expanding our reach.
Speaker Change: Each quarter since becoming a publicly traded company you've heard me talk about our acquisition strategy.
Speaker Change: Our mission remains consistent as we target and attract synergistic accretive opportunities that will expand our customer base and footprint and make life easier for our customers as they look to reduce their number of suppliers.
Speaker Change: <unk> labs is a nimble supplier that can deliver demanding next generation solutions at best in class lead times.
Speaker Change: Today I'd like to highlight two solutions groups.
Speaker Change: Interconnect solutions and our wireless system solutions from the right systems acquisition.
Speaker Change: Let me start with the EMI interconnect solutions, which are used by many leading companies and aerospace military and medical applications.
Speaker Change: In June we announced our new filtered a rent connectors, which are setting a new standard in price performance and customization.
Speaker Change: I am pleased to say in the fourth quarter. We saw increased bookings for these high performance connectors used in advanced aircraft electronic systems.
In the fourth quarter, we landed significant new customers in aerospace and defense sectors.
Speaker Change: And we are now scheduled to produce custom filter next generation high performance connectors for the customer's flight guidance and cockpit display systems.
Speaker Change: We are excited about our overall growth in EMR solutions and the planned growth in our interconnect product line and we believe that we are well positioned in this core part of <unk> for further developments of these solutions as we expand our strong relationships and deliver what we believe is the fastest delivery of EMI filled.
Speaker Change: <unk> parts in the World Cup.
Speaker Change: Customers value, our engineering support and our nimble hands on approach.
Speaker Change: The second area I would like to highlight this quarter wireless systems achieved strong revenue and increased margins during the right systems first full quarter with <unk>.
<unk> systems has a strong customer base and exciting funnel of opportunities.
Speaker Change: We are quickly identifying synergies between <unk> labs and rates systems. So we could expand our customer base and products and to deliver IP and technology across the entire product line portfolio.
Speaker Change: Within wireless systems, our security imaging and detection services and products continued to grow and expand.
While we continue building and shipping present generation modules. We are also developing multiple generations of products with our customers to help them offer new products and new markets.
Speaker Change: This is all about helping our customers to envision different futures for imaging and detection in their established markets and in areas. They are targeting for expansion.
Speaker Change: Also our multi spectral imaging and detection or M. S programs continue to expand we added new MSI capabilities to our customer supported test facility and demonstrated new capabilities and functionality beyond security imaging detection.
Speaker Change: We believe the new capabilities that we're demonstrating in non visual imaging and multi sensor fusion should begin generating incremental revenues in 2025 and beyond in areas like infrastructure imaging and fault detection.
Speaker Change: Partnerships are an important part of developing our business and a good example is our expanding relationship with Umass law in Massachusetts.
Speaker Change: Together, we are working on several technologies and projects for infrastructure imaging and satellite communications.
Speaker Change: The pop up laboratory created on the grounds of Umass is focused on gaining a better understanding of infrastructure degradation and safety for the rail industry.
Speaker Change: Another joint program is working on identifying and investigating the feasibility of a low power low cost and high performance monolithic software defined system on a chip for satcom applications.
Both technology development projects could lead to new product introduction in 2025 and 2026.
Speaker Change: In summary customers come to <unk> labs, because we are nimble supplier that can deliver demanding next generation solutions at best in class lead times.
Speaker Change: Also execution of our acquisition strategy is diversifying our offerings and expanding on our end markets, while growing revenue and margins.
Speaker Change: Now Kayvon will tell you a bit more about those financial results.
Thank you Fabian I am excited to walk you through the financial highlights of our fourth fiscal quarter, ending September 30, as well as our full fiscal year, ending September 32024 and to share our outlook for the first fiscal quarter of 2025.
Speaker Change: Unless otherwise stated the figures I will discuss today are on a non-GAAP basis.
Speaker Change: Before discussing the numbers I want to underscore the significant milestone Fabian mentioned earlier, our letter of intent to acquire spacecraft components. If completed this strategic acquisition is expected to be transformative from a big slabs, expanding our reach into high demand sectors, including military defense aerospace.
Speaker Change: <unk> and rail.
Speaker Change: Spacecraft is a well established business and its acquisition is expected to be immediately accretive in addition to delivering immediate financial benefits. We believe this acquisition will enhance our sales strategy strengthen our position in critical markets and significantly accelerate revenue growth for fiscal year 2025.
Speaker Change: Upon closing, we expect the transaction to materially increase <unk> slabs revenue compared to fiscal 2024, while driving synergies that boost operational efficiency and long term scalability.
Speaker Change: Now, let's look at our financial results for the fourth quarter and full fiscal year 2024.
Speaker Change: We delivered revenues of $2 $95 million.
Speaker Change: Surpassing the midpoint of our guidance range and representing a robust 44% sequential increase over the prior quarter.
Speaker Change: For the full fiscal year 2024 annual revenue grew by 644 million.
Marking an exceptional 426% increase over fiscal 2023.
Turning to gross margin our fourth quarter adjusted gross margin improved 16, three percentage points sequentially to 56, 6%.
Speaker Change: This impressive growth was driven by a favorable product mix pricing strength and operational efficiencies on a full year basis, our fiscal 2024, adjusted gross margin reached 45% a dramatic turnaround from fiscal 2023.
Speaker Change: We also made substantial progress reducing our adjusted loss from operations for.
Speaker Change: For the fourth quarter adjusted loss from operations declined by more than 12% to $3 $6 million down from $4 $1 million in the last quarter.
Speaker Change: For the full fiscal year adjusted loss from operations improved by 14, 6% narrowing to $15 $96 million.
Speaker Change: Compared to $18 7 million in fiscal 2023.
Speaker Change: Our balance sheet remains stable and improving with cash growing to $266000 at the end of Q4 up from 205000 in the prior quarter.
Speaker Change: To support our acquisition strategy and meet rising customer demand. We are actively pursuing additional financing that will enable us to execute on our growth opportunities and scale further.
Speaker Change: Looking ahead to our first fiscal quarter of 2025, we are forecasting consolidated revenues of between $3.5 million and $3, one 5 million.
A strong continuation of our growth momentum.
As we look to the future our long term financial goals remain clear we are committed to achieving an adjusted gross margin of 60% and an adjusted operating margin of 30%.
Speaker Change: Our revenue scale, we will maintain disciplined by ramping R&D and SG&A expenses at a slower pace driving profitability and operating leverage over time.
Speaker Change: In summary, we are incredibly pleased with the results from the September quarter, and the full fiscal year 2020 for our acquisition strategy has delivered the transformation of revenue growth, we set out to achieve with an expanding pipeline of M&A opportunities increasing customer demand and operational improvements.
Speaker Change: <unk> labs is positioned for long term success and scalable growth.
Speaker Change: Operator, we're now ready to take questions.
Speaker Change: Thank you.
Speaker Change: I'd like to ask a question. Please press star one on your telephone you will then hear an automated message advising your hand as rates.
Speaker Change: We'd like to remove yourself. Please press star one again, we also ask that you wait for your name and company to be announced before proceeding with your question one moment for the first question.
Kevin Cassidy: And our first question will come from the line of Kevin Cassidy.
Speaker Change: Rosenblatt Securities Your line is open.
Speaker Change: Yes, Thanks for taking my question resolutions on the great progress.
Speaker Change: You had mentioned the EMI interconnect solutions, having increased bookings can you go into a little more details on that is that the.
Speaker Change: Market getting better or are there things you're doing that are increasing the booking.
Got it.
Kevin Cassidy: Thanks for the question Kevin.
Speaker Change: As you likely know the geo political strife that exists today. Unfortunately.
Speaker Change: Is not calming down so we're getting increased opportunities or increased request for products in that area and as you know EMI fits in that space. So aerospace and defense is a key driver for EMI and.
Speaker Change: That's why we're seeing the increases that we see.
Speaker Change: Okay, Great and then can you say what the visibility.
Speaker Change: <unk> is about one quarter two quarters.
Speaker Change: Well typically it's typically it's out the two quarters is what we see.
Speaker Change: Okay great.
Speaker Change: And then just one other question with the space craft components.
Speaker Change: The 150 employees is impressive but will you be able to get some leverage with those employees like.
We will be able to take over more of let's say SG&A portion of the.
Speaker Change: Spending.
Speaker Change: Yes, well like all acquisitions, we look at the synergies and that's something that we're very experienced in doing so we would take a company like space craft has got great technology, great capability, especially in manufacturing capability and you match that with our go to market strategy.
Speaker Change: And our experience in that space.
We feel that there will be a great benefit when we combine forces.
Speaker Change: Okay.
Speaker Change: Could you say what percentage of those employees are our engineers.
Speaker Change: I would say, it's less than 5%.
Speaker Change: Okay. Thank.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for the next question.
Speaker Change: Okay.
Martin Lucas: And our next question will be coming from the line of Martin Lucas.
Speaker Change: Your line is open.
Speaker Change: Yeah.
Speaker Change: Martin Lucas your line is open.
Speaker Change: Oh, Thank you very much she went quiet that.
Speaker Change: Thank you very much for allowing me on your Cogs I represent the investors family known as the leukocytes, who watch my Youtube TV shown followed notebooks great enthusiasm.
Speaker Change: I have two questions for you. The first one is what specific strategies or initiatives is no big slabs prioritizing to drive shareholder value and ensure consistent stock price growth in both the short and long term.
Speaker Change: Well. Thanks, Thanks, Mark Thanks for the question our strategy has been consistent from day one so it's in two parts the organic growth and then an M&A strategy to accelerate that growth.
On the organic side, we focus on connectivity wireless communications security imaging and detection deals. Those are our primary focuses and then on the M&A side, we have a well defined process and we're looking at areas in aerospace and defense transportation medical wireless.
Speaker Change: On occasions.
Speaker Change: No.
A combination both short term what we have in front of us will drive the organic growth and then over the longer term, our M&A strategy will accelerate that growth.
Speaker Change: Thank you my follow up question.
Speaker Change: As we all know.
Speaker Change: First is around the Walnut Street passionate and excited about where Nvidia is gathering. So my view is have asked me to ask this question as Nvidia has Nvidia is so popular now with retail investors and there are are there any ways that you could introduce your technology to them for strategic partnership this wood.
Truly be a great move.
Speaker Change: Yes.
We agree with that well first we applaud Nvidia and Theyre great success, we are a believer of GPU accelerated solutions and of course AI is driving that and I think we're seeing more AI and use cases right. So we expect that that will continue to grow.
Speaker Change: We believe that <unk> IP is applicable in the same ecosystem. So we're excited to be attached to applications that live alongside where in video live now what would we expect as of course with their success, we're going to see use cases, which.
<unk>, we think are going to require increased.
Speaker Change: Expectations for things like higher demand rate and higher bandwidth type applications, and we feel that that fits really well in the areas that we're developing.
Well, thank you very much for that and giving us the chance to ask a question or two questions and congratulations to Dave on your call from all of the leukocytes. Thank you very much.
Martin Lucas: Thank you Martin.
Speaker Change: Thank you so much for participating in today's conference call. This now concludes today's meeting you may all disconnect.
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Speaker Change: Good afternoon, Thank you for standing by and welcome to <unk> Lab's, Inc.
Speaker Change: <unk> fourth quarter.
Speaker Change: 2024 financial results conference call.
Speaker Change: Please be advised today's conference is being recorded and a replay will be available on <unk> Investor Relations website.
Lori Barker: Now I'd like to turn the conference over to Lori Barker Investor Relations. Please go ahead.
Lori Barker: Thank you good afternoon, everyone I'm Lory Barker Investor relations from <unk> slabs, and I'd like to thank you for joining us today as we required.
Speaker Change: <unk> fourth quarter and 2020 for our financial results for the period ending September 30th with me on the call today are <unk> <unk>, Chief Executive Officer, <unk>, <unk>, President and Chief Financial Officer.
Speaker Change: This call is simultaneously being webcast on the Investor Relations section of our website at <unk> labs Dot com before.
Speaker Change: Before we get started I would like to remind everyone of our safe Harbor policy comments made during this conference call and webcast contain forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95, and are subject to risks and uncertainties.
Speaker Change: Any statement that refers to expectations projections or other characterizations of future events, including financial projections future if market conditions or a future product enhancements or development is forward looking statements <unk> actual future results could differ materially from those expressed in such forward.
Speaker Change: Looking statements for any reason, including those listed in our SEC filings.
Speaker Change: That assumes no obligation to update any such forward looking statements, except as required by law.
Greater detail about risks and uncertainties. Please see our SEC filings, including our Form 10-Q for the quarter ended June 32024, and the section entitled Risk factors in the form S. One filed on August 12, 2024. In addition, this call.
Speaker Change: Includes non-GAAP financial measures reconciliations of these non-GAAP financial measures with the most directly comparable GAAP measures.
Speaker Change: And in our fourth quarter earnings release posted on the Investor Relations section of our website.
Speaker Change: With that I will turn the call over to stadiums attack Leah avian. Please go ahead.
Speaker Change: Thank you Laurie.
Speaker Change: I am pleased to announce a successful fourth quarter caps off mobile slabs results as we approach our first fiscal year as a public company.
Speaker Change: It is an exciting time as we unleash the performance of next generation wireless sensing and connectivity solutions.
Speaker Change: I am proud of our team's execution as we quickly grow the breadth of our offerings through organic growth and synergistic accretive acquisitions.
Integrating employees and technologies as part of our core DNA and shaping Tomorrow's connectivity is front and center for all <unk> employees.
Speaker Change: In the fourth quarter, we executed on our plan and we grew revenues sequentially by 44% for our full year fiscal growth rate of 426%.
Speaker Change: Also gross margins increased as we integrated <unk> systems and continued working on synergies and a more favorable mix of products and engineering services.
Speaker Change: We closed out the fiscal year with strong bookings, which position us well for our next fiscal year and mergers and acquisitions at <unk> Labs will continue to be in the news as we diversify our technology portfolio.
Speaker Change: Our recent announced letter of intent to acquire spacecraft components is an excellent example of our accretive funnel of M&A opportunities.
Speaker Change: Spacecraft is a leader in high precision mission critical components for aerospace defense and commercial applications.
Speaker Change: Also they are recognized for their cutting edge engineering and manufacturing capabilities.
These electrical connector components and accessories are vital to critical missile technology submarines naval ships oil rigs railcars military and commercial jet aircraft and many other applications.
Speaker Change: Notably these components are utilized in the Patriot missile the U S. Army's primary missile defense system and in technical manned and autonomous vehicles.
Speaker Change: Additionally, space craft supplies key components for railcar systems in major metropolitan areas, such as Chicago, and New York.
Speaker Change: As a longstanding supplier to mobile slabs, we were aware of Spacecrafts excellent reputation and we see them as a natural fit as we expand our offerings into aerospace military and defense sectors and are more near term the transportation market.
Speaker Change: We expect that the acquisition will be accretive to <unk> lab's earnings and will increase our workforce by approximately 150 employees.
We are really excited about this acquisition and expanding our reach.
Speaker Change: Each quarter since becoming a publicly traded company you have heard me talk about our acquisition strategy.
Speaker Change: Our mission remains consistent as we target and attract synergistic accretive opportunities that will expand our customer base and footprint and make life easier for our customers as they look to reduce their number of suppliers.
Speaker Change: <unk> labs is a nimble supplier that can deliver demanding next generation solutions at best in class lead times.
Speaker Change: Today I'd like to highlight two solutions groups.
Speaker Change: Interconnect solutions and our wireless system solutions from the right systems acquisition.
Speaker Change: Let me start with the EMI interconnect solutions, which are used by many leading companies and aerospace military and medical applications.
Speaker Change: In June we announced our new filtered a rent connectors, which are setting a new standard in price performance and customization.
Speaker Change: I am pleased to say in the fourth quarter. We saw increased bookings for these high performance connectors used in advanced aircraft electronics systems.
Speaker Change: In the fourth quarter, we landed significant new customers in aerospace and defense sectors.
Speaker Change: And we are now scheduled to produce custom filter next generation high performance connectors for the customer's flight guidance and cockpit display systems.
Speaker Change: We are excited about our overall growth in EMR solutions and the planned growth in our interconnect product line and we believe that we are well positioned in this core part of <unk> for further developments of these solutions as we expand our strong relationships and deliver what we believe is the fastest delivery of EMI film.
Speaker Change: <unk> parts in the World Cup.
Speaker Change: Customers value, our engineering support and our nimble hands on approach.
Speaker Change: The second area I would like to highlight this quarter wireless systems achieved strong revenue and increased margins during the right systems first full quarter with <unk>.
Speaker Change: <unk> systems has a strong customer base and exciting funnel of opportunities.
Speaker Change: We are quickly identifying synergies between <unk> labs and rates systems. So we can expand on our customer base and products and to deliver IP and technology across the entire product line portfolio.
Speaker Change: Within wireless systems, our security imaging and detection services and products continued to grow and expand.
Speaker Change: While we continue building and shipping present generation modules. We are also developing multiple generations of products with our customers to help them offer new products and new markets.
Speaker Change: This is all about helping our customers to envision different futures for imaging and detection in their established markets and in areas. They are targeting for expansion.
Speaker Change: Also our multi spectral imaging and detection or M. S programs continue to expand we added new MSI <unk> capabilities to our customer supported test facility and demonstrated new capabilities and functionality beyond security imaging detection.
Speaker Change: We believe the new capabilities that we're demonstrating in non visual imaging and multi sensor fusion should begin generating incremental revenues in 2025 and beyond in areas like infrastructure imaging and fault detection.
Speaker Change: Partnerships are an important part of developing our business and a good example is our expanding relationship with Umass law in Massachusetts.
Speaker Change: Together, we are working on several technologies and projects for infrastructure imaging and satellite communications.
Speaker Change: The pop up laboratory created on the grounds of Umass is focused on gaining a better understanding of infrastructure degradation and safety for the rail industry.
Speaker Change: Another joint program is working on identifying and investigating the feasibility of a low power low cost and high performance monolithic software defined system on a chip for satcom applications.
Speaker Change: Both technology development projects could lead to new product introduction in 2025 and 2026.
In summary customers come to <unk> labs, because we are a nimble supplier that can deliver demanding next generation solutions at best in class lead times.
Speaker Change: Also execution of our acquisition strategy is diversifying our offerings and expanding on our end markets, while growing revenue and margins.
Speaker Change: Now <unk> will tell you a bit more about those financial results.
Speaker Change: Thank you Fabian I am excited to walk you through the financial highlights of our fourth fiscal quarter, ending September 30, as well as our full fiscal year, ending September 32024 and to share our outlook for the first fiscal quarter of 2025.
Speaker Change: Unless otherwise stated the figures I will discuss today are on a non-GAAP basis.
Speaker Change: Before discussing the numbers I want to underscore the significant milestone Fabian mentioned earlier, our letter of intent to acquire spacecraft components. If completed this strategic acquisition is expected to be transformative from IDEXX labs, expanding our reach into high demand sectors, including military defense aerospace.
<unk> and rail.
Speaker Change: Spacecraft is a well established business and its acquisition is expected to be immediately accretive in addition to delivering immediate financial benefits. We believe this acquisition will enhance our sales strategy strengthen our position in critical markets and significantly accelerate revenue growth for fiscal year 2025.
Speaker Change: Upon closing, we expect the transaction to materially increase mostly slabs revenue compared to fiscal 2024, while driving synergies that boost operational efficiency and long term scalability.
Speaker Change: Now, let's look at our financial results for the fourth quarter and full fiscal year 2024.
Speaker Change: We delivered revenues of $2 $95 million.
Speaker Change: Surpassing the midpoint of our guidance range and representing a robust 44% sequential increase over the prior quarter.
Speaker Change: For the full fiscal year 2024 annual revenue grew by $644 million, marking an exceptional 426% increase over fiscal 2023.
Speaker Change: Turning to gross margin our fourth quarter adjusted gross margin improved 16, three percentage points sequentially to 56, 6%. This.
Speaker Change: <unk> growth was driven by a favorable product mix pricing strength and operational efficiencies on a full year basis, our fiscal 2024, adjusted gross margin reached 45% a dramatic turnaround from fiscal 2023.
Speaker Change: We also made substantial progress reducing our adjusted loss from operations.
Speaker Change: For the fourth quarter adjusted loss from operations declined by more than 12% to $3 $6 million down from $4 $1 million in the last quarter.
Speaker Change: For the full fiscal year adjusted loss from operations improved by 14, 6% narrowing to $15 $96 million.
Speaker Change: Compared to $18 7 million in fiscal 2023.
Speaker Change: Our balance sheet remains stable and improving with cash growing to $266000 at the end of Q4 up from 205000 in the prior quarter to.
To support our acquisition strategy and meet rising customer demand. We are actively pursuing additional financing that will enable us to execute on our growth opportunities and scale further.
Speaker Change: Looking ahead to our first fiscal quarter of 2025, we are forecasting consolidated revenues of between $3.5 million and $3 one $5 million a.
A strong continuation of our growth momentum.
Speaker Change: As we look to the future our long term financial goals remain clear we are committed to achieving an adjusted gross margin of 60% and an adjusted operating margin of 30%.
Speaker Change: While revenue scale, we will maintain disciplined by ramping R&D and SG&A expenses at a slower pace driving profitability and operating leverage over time.
Speaker Change: In summary, we are incredibly pleased with the results from the September quarter, and the full fiscal year 2020 for our acquisition strategy has delivered the transformation of revenue growth, we set out to achieve with an expanding pipeline of M&A opportunities increasing customer demand and operational improvements.
Speaker Change: <unk> labs is positioned for long term success and scalable growth.
Speaker Change: Operator, we're now ready to take questions.
Speaker Change: Thank you.
Speaker Change: I would like to ask a question. Please press star one on your telephone.
Speaker Change: We'll then hear an automated message advising your hand is raised if you would like to remove yourself. Please press star. One again, we also ask that you wait for your name and company to be announced before.
Speaker Change: With your question one moment for the first question.
Speaker Change: And our first question will come from the line of Kevin Cassidy of Rosenblatt Securities. Your line is open.
Kevin Cassidy: Yes, Thanks for taking my question and congratulations on the great progress.
Speaker Change: Yes.
Speaker Change: You had mentioned the EMI interconnect solutions, having increased bookings can you go into a little more detail on that is that the.
Speaker Change: The market is getting better or are there things you're doing that are increasing the booking.
Speaker Change: Got it.
Kevin Cassidy: Well thanks for the question, Kevin as you likely know the Geo political strife that exists today. Unfortunately is.
Kevin Cassidy: Is not coming down so we're getting increased opportunities or increased request for products in that area and as you know EMI fits in that space. So aerospace and defense is a key driver for <unk> and.
Thats why were seeing the increases that we see.
Kevin Cassidy: Okay, Great and then can you say what the visibility is about one quarter two quarters.
Kevin Cassidy: Well typically it's typically it's out the two quarters is what we see.
Okay great.
Kevin Cassidy: And then just one other question with the.
Kevin Cassidy: Space kept class components.
Speaker Change: 150 employees is impressive but will you be able to get some leverage with those employees like.
Speaker Change: We will be able to take over more of let's say SG&A portion of that.
Speaker Change: Spending.
Speaker Change: Yes, well like all acquisitions, we look at the synergies and that's something that we're very experienced in doing so we would take a company like space craft has got great technology, great capability, especially in manufacturing capability and you match that with our go to market strategy.
Speaker Change: And our experience in that space.
Speaker Change: We feel that there will be a great benefit when we combine forces.
Speaker Change: Okay great.
Speaker Change: Could you say what percentage of those employees are our engineers.
I would say, it's less than 5%.
Speaker Change: Okay. Thank.
Speaker Change: Thank you.
Speaker Change: Thank you one moment for the next question.
Speaker Change: Okay.
Martin Lucas: And our next question will be coming from the line of Martin Lucas.
Speaker Change: Your line is open.
Speaker Change: Martin Lucas your line is open.
Speaker Change: Oh. Thank you very much you went quiet that.
Speaker Change: Thank you very much for allowing me on your coal to the I represent the investors family known as the leukocytes, who watch my Youtube TV shown followed notebooks great enthusiasm.
Speaker Change: I have two questions for you. The first one is what specific strategies or initiatives is no big slabs prioritizing to drive shareholder value and ensure consistent stock price growth in both the short and long term.
Speaker Change: Well. Thanks, Thanks, Mark Thanks for the question our strategy has been consistent from day one so it's in two parts the organic growth and then an M&A strategy to accelerate that growth.
Speaker Change: The organic side, we focus on connectivity wireless communications security imaging and detection. Those those are our primary focuses and then on the M&A side, we have a well defined process and we're looking at areas in aerospace and defense transportation medical wireless.
Speaker Change: Occasions.
Speaker Change: No.
Speaker Change: Combination of both short term what we have in front of us will drive the organic growth and then over the longer term, our M&A strategy will accelerate that growth.
Speaker Change: Thank you my follow up question.
Speaker Change: As we all know.
Speaker Change: Around the Walnut Street passionate and excited about where Nvidia is gathering. So my view is have asked me to ask this question as Nvidia has Nvidia is so popular now with retail investors and their all.
Speaker Change: Are there any ways that you could introduce your technology to them for strategic partnership this would surely be a great news.
Speaker Change: Yes.
Speaker Change: We agree with that well first we applaud Nvidia and Theyre great success, we are a believer of GPU accelerated solutions and of course AI is driving that.
And I think we're seeing more AI and use cases right. So we expect that that will continue to grow.
Speaker Change: We believe that <unk> IP is applicable in the same ecosystem. So we're excited to be attached to applications that live alongside where Nvidia lids now what would we expect as of course with their success, we're going to see use cases, which.
Speaker Change: <unk>, we think are going to require increased.
Speaker Change: Expectations for things like higher demand rate and higher bandwidth type applications, and we feel that that fits really well in the areas that we're developing.
Speaker Change: Well, thank you very much for that and giving us the chance to ask a question or two questions and congratulations today on your call from all of the leukocytes. Thank you very much.
Martin Lucas: Thank you Martin.
Martin Lucas: Thank you so much for participating in today's conference call. This now concludes today's meeting you may all disconnect.