Q4 2024 Monolithic Power Systems Inc Earnings Call - Q&A
Operator: Welcome everyone to the MPS fourth quarter 2024 earnings webinar.
Welcome everyone to the MTS fourth quarter 'twenty 'twenty four earnings Webinar. My name is Jennifer you've Cunningham and I will be the moderator for this webinar.
Genevieve Cunningham: My name is Genevieve Cunningham and I will be the moderator for this webinar.
Speaker Change: Joining me today are Michael Hsing, CEO and founder of M. P. S.
Genevieve Cunningham: Joining me today are Michael Hsing, CEO and founder of MPS, Bernie Blegen, EVP and CFO, and Tony Balow, Vice President of Finance. Earlier today, along with our earnings announcement, MPS released a written commentary on the results of our operations. Both documents can be found on our website.
Any blegen: Any blegen, EVP, and CFO and Tony Balogh, Vice President of Finance.
Any blegen: Earlier today, along with our earnings announcement MTS released a written commentary on the results of our operations. Both documents can be found on our website.
Genevieve Cunningham: Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Format of 1995. That involves risk and uncertainty. Risks, uncertainties, and other factors that could cause actual results to differ from these forward-looking statements are identified in the Safe Harbor Statements contained in the Q4 2024 Earnings Release and in our SEC filings, including our Form 10-K, which can be found on our website.
Any blegen: <unk>, we begin I would like to remind everyone that in the course of today's presentation. We may make forward looking statements and projections within the meaning of the private Securities Litigation Reform Act of $19 95.
Any blegen: Involves risk and uncertainty.
Any blegen: Risks uncertainties and other factors that could cause actual results to differ from these forward looking statements are identified in the safe Harbor statements contained in the Q4 2024 and in our SEC filings, including our Form 10-K, which can be found on our website.
Genevieve Cunningham: Our statements are made as of today, and we assume no obligation to update this information.
Speaker Change: Our statements are made as of today and we assume no obligation to update this information now I'd like to turn the call over to Bernie Blegen.
Genevieve Cunningham: Now, I'd like to turn the call over to Bernie Blegen.
Bernie Blegen: Thanks, Jim.
Bernie Blegen: Thanks, Jen. Good afternoon, and welcome to our Q4 2024 earnings call. In 2024, NPS posted its 13th consecutive year of growth with full year revenue of $2.2 billion. up to 21% from 2023. For Q4 2024, we had record quarterly revenue of $621.7 million above Q3 2024 and 37% higher than the fourth quarter of 2023. This performance reflected the strength of our diversified market strategy, consistent execution, continued innovation, and strong customer focus.
Bernie Blegen: Good afternoon, and welcome to our.
Bernie Blegen: Our Q4 2024 earnings call.
Bernie Blegen: In 2020 for MTS posed to the 13th consecutive year of growth with full year revenue of $2 $2 billion.
Bernie Blegen: 221% from 2023.
Bernie Blegen: For Q4, 2024, we had record quarterly revenue of $621 $7 million above Q3, 2024, and 37% higher than the fourth quarter of 2023.
Bernie Blegen: This performance reflected the strength of our diversified market strategy consistent execution continued innovation and strong customer focus.
Bernie Blegen: Let me call out a few highlights from 2024. We introduced the silicon carbide inverter for high-powered clean energy applications. Initial revenue is expected to ramp in late 2025. Other silicon carbide based applications are expected to be introduced in multiple geographies during both 2025 and 2026. We developed a family of high-quality, cost-effective automotive audio products utilizing DSP technology from our 2024 Exine acquisition powered by MPS Solutions. for Enterprise Notebooks, we launched a battery management solution and are sampling a new mini phase power These products enable faster charge time and significantly improve notebook battery life. Building on our first analog-to-digital converter design win in 2024, we are developing new, high-accuracy, 24-bit converters, which are expected to ramp in the second half of 2025.
Bernie Blegen: Let me call out a few highlights from 2024.
Bernie Blegen: We introduced the silicon carbide inverter for high powered clean energy applications initial revenue is expected to ramp in late 2025.
Bernie Blegen: Silicon carbide based applications are expected to be introduced in multiple geographies during both 2025 and 2026.
Bernie Blegen: We developed a family of high quality cost effective automotive audio products utilizing DSP technology from our 2020 for Exxon acquisition powered by MTS solutions.
Bernie Blegen: For enterprise notebooks, we launched a battery management solution and are sampling a new mini phase power stage.
Bernie Blegen: These products enable faster charge times and significantly improved notebook battery life.
Bernie Blegen: Building on our first analog to digital converter design win in 2024, we are developing new high accuracy 24 bit converters, which are expected to ramp in the second half of 2025.
Bernie Blegen: MTS continues to focus on innovation.
Bernie Blegen: NPS continues to focus on innovation, solving our customers most challenging problems and maintaining the highest level of quality. We continue to invest in new technology, expand into new markets, and to diversify our end market applications and global supply chain. This will allow us to capture future growth opportunities, maintain supply chain stability, and swiftly adapt to market changes as they occur.
Bernie Blegen: Solving our customers' most challenging problems in maintaining the highest level of quality.
Bernie Blegen: We continue to invest in new technology expand into new markets and diversify our end market applications and global supply chain.
Bernie Blegen: This will allow us to capture future growth opportunities maintain supply chain stability and swiftly adapt to market changes as they occur.
Bernie Blegen: Finally.
Bernie Blegen: Finally, I'm pleased to announce our quarterly dividend will increase 25% to $1.56 per share. And during Q4 2024, we completed share repurchases under a 2023 $640 million authorization. This week, our Board of Directors authorized a new $500 million three-year share repurchase program. for the three years ending December 2024. MPS has returned 86% of its free cash flow to shareholders who share purchases and dividends paid. Our proven long-term growth strategy remains intact as we continue our transformation from being a chip-only semiconductor supplier to a full-service silicon-based solutions provider.
Bernie Blegen: I am pleased to announce our quarterly dividend will increase 25% to $1 56 per share.
Bernie Blegen: And during Q4 2024, we completed share repurchases under a 2023 $640 million authorization.
Bernie Blegen: This week, our board of directors authorized a new $500 million three year share repurchase program.
Bernie Blegen: For the three years ending December 2024.
Bernie Blegen: M. P. S has returned 86% of its free cash flow to shareholders through share repurchases and dividends paid are.
Bernie Blegen: Our proven long term growth strategy remains intact as we continue our transformation from being a chip only semiconductor supplier to a full service silicon based solutions provider.
Bernie Blegen: I will now open the webinar up for questions.
Bernie Blegen: I will now open the webinar up for questions.
Operator: Thank you, Bernie.
Speaker Change: Thank you Bernie analysts I would now like to begin our Q&A session. As a reminder, if you would like to ask a question. Please click on the participants icon on the menu bar and then click the raise hand button.
Operator: Analysts, I would now like to begin our Q&A session. As a reminder, if you would like to ask a question, please click on the participants icon on the menu bar and then click the raise hand button.
Operator: Our first question is from Tore Svanberg of Stiefel. Tore, your line is now open.
Speaker Change: Our first question is from tourist Baumgard of Stifel. Your line is now open yes.
Tore Svanberg: Yes, thank you and congratulations on the solid results.
Tourist Baumgard: Yes, Thank you and congratulations on the solid results either Michael or Bernie could you talk a little bit about the dynamics here in the March quarter.
Tore Svanberg: Either Michael or Bernie, could you talk a little bit about the dynamics here in the March quarter, especially by segment? You know, obviously, we know so many markets are still soft, yet others are actually quite healthy. So any more color on how you see the various segments in the March quarter will be really helpful.
Speaker Change: By segment.
Speaker Change: We know some end markets are still soft yet others are actually quite healthy so any more color on how you see the the various segments in the March quarter would be really helpful.
Speaker Change: Sure as far as our Q1 outlook.
Michael Hsing: Sure.
Michael Hsing: As far as our Q1 outlook, I think we need to take the perspective that relative to the size of the market, we're a fairly small player, but we have a lot of greenfield design wins, which have been previously delayed that are now starting to ramp as we enter 2025. So when we look at two of the areas that are going to drive most of the growth in the quarter, automotive is continuing to grow, and communications, where we launched some new products in Q3, are bouncing back from Q4 and will continue strong. The company's demand profile is also very good, and notebooks look to be having a Q1 uplift.
Speaker Change: I think need to take the perspective that relative to the size of the market.
We're a fairly small player, but we have a lot of greenfield design wins.
Speaker Change: Which had been previously delayed that are now starting to ramp as we enter 2025.
Speaker Change: So when we look at two of the areas that are going to drive most of the growth in the quarter.
Speaker Change: Automotive is continuing to grow and communications.
Speaker Change: We launched some new products in Q3.
Speaker Change: Our bouncing back from Q4 and will continue strong.
Speaker Change: Memory demand profile is also very good and notebooks look to be having a Q1 uplift we don't know for sure, but we have many design wins.
Michael Hsing: We don't know for sure, but we've had many design wins and believe that those are coming into the market.
Speaker Change: And believe that those are coming into the market.
Michael Hsing: On industrial consumer, we have a lot of new product ramps, but those are likely to start to contribute at the end of 2025 and on the enterprise data will be down.
Speaker Change: On industrial consumer we have a lot of new product ramps, but those are likely to start to contribute at the end of 2025.
Speaker Change: And on the enterprise data will be down.
Speaker Change: Very good and as my follow up on enterprise data, how should we think about that business throughout calendar 'twenty five again, obviously a lot of different dynamics different players.
Tore Svanberg: Very good.
Tore Svanberg: And as my follow up on enterprise data, how should we think about that business throughout calendar 25? Again, obviously, a lot of different dynamics, you know, different players. you know, the growth trajectory for that business throughout calendar 25. Any any color you can share with us there?
Speaker Change: You know the growth trajectory for that business throughout calendar 'twenty five.
Speaker Change: Any any color you can share with us there.
Michael Hsing: Yeah, we don't talk about it in the near terms in the Pacific customers that as we always do. Okay, me and that. The near term is that we can control our customers' buying pattern, their allocations, and this year, but overall, this is a multi-billion-dollar market segment. We are getting ready for these next few years and growth, and it clearly is a multi-billion-dollar opportunity.
Speaker Change: Yeah, we don't talk about it in the near terms in the Pacific customers.
Speaker Change: We always dose okay.
Speaker Change: The near term.
Speaker Change: We can't control our customers are buying pattern their allocation, so lucky and.
Speaker Change: This year.
Speaker Change: Overall of them.
Speaker Change: This is a multi billion dollars.
Speaker Change: Market sentiment.
Speaker Change: Getting ready for these next few years from a growth and.
Speaker Change: It clearly is a multibillion dollar opportunities but for us.
Michael Hsing: But for us, In year terms, we this year could be even or maybe slightly up. Okay, this is our best guess. We don't know.
Speaker Change: In the near term.
Speaker Change: This year could be.
Speaker Change: Even or maybe slightly up okay.
Speaker Change: This is our best guess, we don't know.
Speaker Change: Yeah, just to add a little bit of color to how we see the year rolling out.
Bernie Blegen: Yeah, just to add a little bit of color to how we see the year rolling out. We believe that we will be off to a slower start in the first half of the year. But as the year develops, the customer base is expected to broaden as hyperscalers launch their new products. So we have multiple product ramps with both existing customers as well as with these new hyperscalers. So as Michael just said, we believe it's likely to be a flattish year. But we believe that from a quality and supply availability perspective, we're in very good shape.
Speaker Change: We believe that we will be off to a slower start in the first half of the year, but as the year develops the customer base is expected to broaden as Hyperscale is launch their new products.
Speaker Change: So we have multiple product ramps with both existing customers as well as with these new hyperscale. So.
Speaker Change: So as Michael just said, we believe it's likely to be a flattish year.
Speaker Change: But we believe that from a quality and supply availability perspective, we're in very good shape.
Michael Hsing: It could be up too. We don't know. Yeah, exactly.
Speaker Change: But could you Scott could be up to because we don't know exactly that sir congrats again on the results.
Tore Svanberg: That's fair. Congrats again on the results.
Rick Schafer: Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open. Yeah, thanks, guys.
Speaker Change: Okay.
Speaker Change: Our next question is from Rick Schafer of Oppenheimer. Your line is now open.
Rick Schafer: Hey, Thanks, guys I'll add my congratulations.
Rick Schafer: I'll add my congratulations. And if I could maybe tack on to the back of Tore's question.
Rick Schafer: If I could maybe tack on tobacco first question.
Michael Hsing: I was wondering if you could update us maybe just to give us a sense of the number of accelerated projects that you expect to ramp this year and into 2026, just to kind of get a sense. I heard you loud and clear, Michael, that this is a billion-dollar-plus PAM. I'm just trying to get a sense of how many. It's a multiple-billion one. Multiple-billion. Don't be shy about that. We're not shy on that. We don't want to lose that, OK?
Rick Schafer: I was wondering if you could update us maybe on just to give us a sense of the number accelerated projects that you expect to ramp this year and into 2026, just to kind of get a sense I heard you loud and clear Michael.
Rick Schafer: A billion dollar plus Tam.
Rick Schafer: I'm, just trying to get a sense on the <unk>.
Rick Schafer: Multiple buildings.
Rick Schafer: Okay.
Rick Schafer: Don't be shy about that.
Rick Schafer: We're not shy on that and then like I don't want to lose that okay.
Tony Balow: Hey, Rick, this is Tony. I'll jump in. I think what we want to say is we're engaged across all the hyperscalers. But what you heard Michael say was that the exact timing of the ramp is very difficult for us to call. So I don't think we want to put a specific number of customers in our exact ramp times out there, other than saying that we're engaged broadly across them. As Bernie said, we believe that's going to scale through the second half.
Rick Schafer: Eric This is Tony I'll jump in I think I think what I'd say is we're engaged across all of the hyper scaler, but what you heard Michael say was that the exact timing of the ramp is very difficult for us to call. So I don't think we want to put a specific number of customers that are exact ramp times out there other than saying that we're engaged broadly across them as Bernie said, we believe that's going to scale through.
Rick Schafer: The second half.
Michael Hsing: I can give you an example. and.
Speaker Change: I can't give you an example.
Rick Schafer: And.
Rick Schafer: We.
Michael Hsing: We foresee that these projects are rampant in 2022-2023. You look at the automotive side, we said we have a lot of design wings, and we said all these are going to ramp up, we have a lot of inventory. and 2023 is kind of Friday's year. Our customer delayed their launch.
Rick Schafer: We foresee that these are projects that are ramping into 2022 2023.
Rick Schafer: If you look at the automotive site within a we have a lot of design wings and within all of these are going to ramp up or we're putting on a lot of have a lot of inventory.
Rick Schafer: In 2023 is kind of flattish yes.
Rick Schafer: Our customer delayed there.
Their launch so that 23 effect on us.
Michael Hsing: So the 23 affected us, and But I keep saying, we don't really care. And, and as long as we have a product and designing and designing their new product, especially to look, and we're turning to a revenue plus minus 12 months, 18 months.
Speaker Change: But I keep saying we.
Rick Schafer: We don't really care so much.
Rick Schafer: And as long as the we have a product in designing and designed to aid in their new product, especially from the <unk> and <unk>.
Rick Schafer: Turning to our revenue plus minus almost 18 months.
Bernie Blegen: And if I could just add to Michael's comments there, when you look at automotive, it was delayed not just in 23, but also in the first half of 24 against what we had built inventory and against our expectations.
Rick Schafer: And if I could just add to Michael's comments there.
Rick Schafer: When you look at automotive.
Rick Schafer: It was delayed not just in 'twenty three but also in the first half of 'twenty four against what we had built inventory against our expectations, but now as you can see it's very solidly on track with two consecutive quarters of growth and likewise, you can apply that same.
Michael Hsing: But now, as you can see, it's very solidly on track with two consecutive quarters of growth. And likewise, you could apply that same formula to what we're seeing in the communications with the release of the fiber optics in the data center. So we have the technology, but where it intersects and ramps in the market, a lot of that's a little bit out of our control. or even the directly AR powers.
Rick Schafer: The formula to what we're seeing in the communications with the release of the fiber fiber optics in the data center. So we have the technology, but where interstate and ramps in the market a lot of that is a little bit out of our control.
Rick Schafer: Well you mean.
Speaker Change: Directly AI powered Mkay wave of so many.
Michael Hsing: Okay, we have so many projects working with multiple hyper scale companies. And so we cannot tell which one is world ramping first. Okay, I know what the magnitude of ramping, just we are getting the supply chain ready, get our quality testing facility ready to get these, to receive these revenues, okay, turn into these revenues. And so the timing, we care less.
Speaker Change: <unk> working with multiple.
Speaker Change: Uh huh.
Speaker Change: Hyperscale.
Speaker Change: Companies and.
Speaker Change: So we cannot tell which one is well ramping first some okay I know what the magnitude that ramping.
Speaker Change: Yes.
Speaker Change: Get the supply chain ready get our.
Speaker Change: Quality testing facility ready to toe.
Speaker Change: To get these two to receive these revenues totaled three two.
Speaker Change: Revenues and.
So the timing.
Speaker Change: We care less.
Speaker Change: Thanks for all that color Michael.
Rick Schafer: Thanks for all that color, Michael.
Rick Schafer: You know, it's funny you're talking about auto, because that's my second question, if I could. You know, the EV conversion to 48 volt power and to 800 volt batteries is sort of set to ramp this year, I believe. And I know you mentioned in the prepared remarks, Bernie, you know, that you you're going to be shipping power installation content second half, I think I heard you say, and I believe EV is about three quarters of your auto business.
Speaker Change: What are you talking about auto because that's my second question.
Speaker Change: The EV conversion to 48 volt power into 800 volt batteries sort of set to ramp this year I believe.
I know you mentioned.
Mark Carney: Mark Carney.
Mark Carney: Youre going to be shipping our isolation content second half I think I heard you say.
Speaker Change: And I believe evs about three quarters of your auto business.
Michael Hsing: So I just wondered if you could talk us through sort of what your potential content, given all those changes, right, all these additional drivers, you know, what your content looks like last year, or potential content per vehicle versus what it looks like, you know, in 2025, with all this, with all these new, with all these new jump balls. Very good questions. And we mentioned about 48 volt system many, many years ago. Okay. And particularly for auto. Now, it became a hot topic. And we have all these product ready with designing those new vehicles. and these are based on 48-volt systems, we can capture a lot.
Speaker Change: I was just wondering if you could talk us through sort of what your potential content.
Speaker Change: Given all of those changes right. All these additional drivers one of your content looked like last year or potential content per vehicle versus what it looks like in 2025 with all of US with all of these new before me to jump off.
Speaker Change: Thank you very good questions and.
Speaker Change: We mentioned about 48 volt system, many many years ago, Okay, and particularly for auto now some lucky and became a hot topics and that we have all these product ready with design anything those new vehicles, and then does that have a base of 48.
Speaker Change: <unk> systems.
Speaker Change: We can capture unlocked.
Michael Hsing: and in once their product, once their vehicles ramping up put on the market, and initially will be another dominant player. And I think that this is the rollout in automotive starts with EV, which is quicker to adapt new technologies onto their platform. But we expect it to continue for a multi year period. Yeah, again, NPS. Well, again, we provide a 48 volt integrated solution. And all of these are high power modules, all based on the NPS silicon solutions. And those were significantly changed. All these are discrete way of doing it, accrued together the 48-volt solutions.
And then one once their product once their vehicles are ramping are put on the market and.
Speaker Change: Initially it will be another dominant players.
Speaker Change: And I think that this is a.
Speaker Change: The rollout in automotive starts with EV, which is.
Speaker Change: Quicker to adapt new technologies onto their platform.
Speaker Change: But we expect it to continue for a multiyear period.
Speaker Change: Again NPS.
Speaker Change: We provide a 48 volt.
Speaker Change: Integrated solutions.
Speaker Change: And all of the all of these are higher power modules, all based on the NPS Silicon solutions and <unk>.
Speaker Change: Those are the words significantly changed all of these are discrete.
Speaker Change: Where we're doing a crude you together the 40 able solutions so that that definitely sets <unk> apart from our from the rest of our competitors.
Michael Hsing: So that definitely sets NPS apart from the rest of the competitors. And beyond just pure 48 volt, remember what you saw beginning Q3 was, you know, designs outside of ADAS start to hit the market, we saw more broad based growth in the auto segment. And we'd expect that to continue as additional sockets come to market. So I think that's another dynamic that's happening as well.
Speaker Change: And Rick beyond just pure 48 volt remember what you saw begin in Q3 was.
Speaker Change: Designs outside of Adas start to hit the market and we saw a more broad based growth in the auto segment and we'd expect that to continue as additional sockets come to market. So I think that's the other dynamic that's happening as well.
Speaker Change: Great. Thank you guys.
Rick Schafer: Great. Thanks, you guys.
Speaker Change: Our next question is from Ross Seymore of Deutsche Bank Ross. Your line is now open.
Ross Seymour: Our next question is from Ross Seymour of Deutsche Bank. Ross, your line is now open.
Ross Seymore: Can you hear me now Yeah, Hi, Ross perfect Hi, there just one.
Ross Seymour: Can you hear me now? Yeah. Hi, Ross. Perfect.
Ross Seymour: Hi there. Just want to revisit the enterprise data side of things and you know, not not to Overplay that, but the market share gains and dynamics in the server CPU side of things. Has that changed at all? Because I, you know, I think everybody knows what's going on with one key customer and the diversification, you know, market share shifts and those sorts of things. But you guys have other things that are happening as we speak as well.
Ross Seymore: Wanted to revisit the enterprise data side of things and not to.
Ross Seymore: Overplay that but the market share gains and dynamics in the server CPU side of things.
Ross Seymore: That changed at all.
Ross Seymore: I think everybody knows what's going on with one key customer in the diversification market share shifts and those sorts of things.
Ross Seymore: But you guys have other things that are happening as we speak as well so I really wanted to focus on the dynamics outside of those not just with the ASIC providers and other GPU providers, but also with the CPU market share in servers. So any update on that would be helpful.
Operator: So I really wanted to focus on the dynamics outside of those, not just with the ASIC providers and other GPU providers, but also Number one, e-mail starts at 1 635.
Ross Seymore: Ross So let me, let me say something else the first our inventory.
Michael Hsing: Ross, let me let me say something else. First, our inventory low, our inventory low and the channel inventory is low. We're going to ramping up. Okay. And the rest of us. I don't know if I had a follow up on that. It's a very good question.
Ross Seymore: Inventory in the channel inventory the law, we're gonna ramping up.
Ross Seymore: And the rest of us.
Ross Seymore: Alright.
Ross Seymore: I don't know if I had a follow up on that.
Ross Seymore: Okay.
Michael Hsing: And let me, let me just give you a little bit of what we're seeing. It's a fast changing landscape.
Ross Seymore: It's a very good question.
Ross Seymore: Let me, let me just give you a little bit of.
Ross Seymore: What we're seeing surpassed changing landscape and what I mean by that.
Michael Hsing: And what I mean by that, it's difficult to offer commentary on enterprise data in it's in these different components, the lines between CPU and GPU are becoming blurry, and in support of both lines of business, we have a lot of standard products. So while we've historically had better visibility in the separation and could track them a little more easily. It's hard for us to make more than just a generalized comment about what direction either market segments going in.
Ross Seymore: Difficult to offer commentary on enterprise data.
Speaker Change: Uh huh.
Ross Seymore: And these are.
Ross Seymore: Different components.
Ross Seymore: The lines between CPU, and GPU are becoming blurry and in support of both lines of business, we have a lot of standard products.
Ross Seymore: So.
Ross Seymore: While we've historically had better visibility in the separation and could track them a little more easily.
Ross Seymore: It's hard for us to make more than just a generalized comment about what direction either market segments going yes.
Michael Hsing: Yeah, let me add another.
Ross Seymore: We have we're getting significant share is about on the.
Michael Hsing: Okay, we have, we're getting significant shares about on the service.
Ross Seymore: On the service side.
Michael Hsing: and once you see the server markets start ramping up, well the NPS revenue will ramp with it.
Ross Seymore: And.
Ross Seymore: Once you see the silver markets start to ramping up well wait NPS revenue will ramp in the ramp with it.
Ross Seymore: Okay, I guess Thats my non inventory follow up on the communications side.
Ross Seymour: I guess as my non-inventory follow-up, on the communications side, you guys did well on that in the second half of the year, it's a little bit choppy still, but can you just give us an idea of the profile of that business, how much is kind of the old comms versus the new comms, and give us a little bit more color on what the growth driver is that gives you the confidence for the year, and you know, I assume it's on the optical side of things, but just a little more details on that would be helpful.
Speaker Change: You guys did well on that in the second half of the year, it's a little bit choppy still but can you just give us an idea of the profile of that business. How much is kind of the old comms versus the new comms and give us a little bit more color on what the growth driver is that gives you the confidence for the year and I assume it's on the optical side of things, but just a little more details on that will be held were all laughing.
Operator: We're all laughing, Sanakay, and would you say the beginning of the question, Sanakay? Unknown Speaker It was comms, right, Ross? Unknown Speaker Yeah, and the communication side, it just, you know, you guys have been talking about that growing for many, many years, and it finally did last year.
Ross Seymore: Okay.
Ross Seymore: Would you say the beginning of the question.
Ross Seymore: <unk>.
Ross Seymore: It was comms right Ross and certainly on the <unk>.
Ross Seymore: Communication side.
Speaker Change: You guys have been talking about that growing for many many years and it finally did last year, but I know theres, some legacy pieces and some new piece and so I just wanted to try to get some color on the difference between them.
Michael Hsing: But I know there's some, you know, legacy pieces and some new pieces. So I just wanted to try to get some color on the different Yeah, Ross, I think I think you kind of hit it when you were asking the question, right? If you could comms going forward, the area of strength that we've really been calling out is an optical. And we'd expect that to continue as part of the overall data center opportunity that you heard Michael talk about. So I think that's probably the biggest inflection point that you've seen over the past couple of quarters versus a legacy business.
Speaker Change: Yes, Ross I think you've kind of hit it when you were asking the question. If you could comps going forward. There is a strength that we've really been calling out is an optical and we'd expect that to continue as part of the overall data center opportunity that you heard Michael talk about so I think thats, probably the biggest inflection point that you've seen over the past couple of quarters versus the legacy business.
Speaker Change: Got it thank you.
Operator: Got it.
Operator: Thank you.
Gary Mobley: Our next question is from Gary Mobley of loop capital Gary Your line is now open.
Gary Mobley: Our next question is from Gary Mobley of Loop Capital. Gary, your line is now open.
Gary Mobley: Hey guys, let me extend my congratulations as well. Um, I wanted to start with the housekeeping question, were there any greater than 10% customers in fiscal year 24? And if you can't name the customer, can you at least give us a sense of how big that customer was in the year? Certainly, for the three quarters, Q1, 2, 3, in our 10Q, we said that we had two direct customers, which are distributors that were greater than 10%, and one indirect customer that was greater than 10%. And that carries through for the full year as well. Okay, but you can't give us a number that we'll publish in the 10k in terms of the percentage of revenue from that direct customer?
Gary Mobley: Hey, guys, let me extend my congratulations as well.
Gary Mobley: I wanted to start with a housekeeping question, where there any greater than 10% customers in fiscal year 'twenty four and if you can't name the customer can you at least give us a sense of how big that customer was in the year.
Gary Mobley: Certainly.
Gary Mobley: Three quarters.
Gary Mobley: Q1, two three in our 10-Q.
Gary Mobley: <unk> said that we.
Gary Mobley: We had two direct customers, which are distributors that were greater than 10% in one indirect customer that was greater than 10%.
Gary Mobley: That carries through for the full year as well.
Speaker Change: Okay, but you can't give us a number that were published in the 10-K in terms of the percentage of revenue from that direct customer.
Operator: Not at this time.
Gary Mobley: At this time.
Gary Mobley: Okay, I tried. All right.
Gary Mobley: Okay.
Gary Mobley: Right.
Gary Mobley: Alright.
Gary Mobley: I want to ask about revenue diversification. outside of your traditional power management market. And if I count correctly, there's maybe four shots on goal, and you highlighted some of those in your press release. And that would be, you know, data converters, silicon carbide, DSP, audio and battery management systems. So my question is, you know, how big in revenue terms can that be in the fiscal year 26 timeframe, or said differently, how much of a growth catalyst can be on top of what you're producing traditional power management? Traditional power management, they're talking about these are low voltage things, if it's what you mean.
Gary Mobley: I wanted to ask about revenue diversification.
Gary Mobley: Outside of your traditional power management market and if I count correctly, there's maybe four shots on goal and you highlighted some of those in your press release and that would be data converters silicon carbide, DSP audio and battery management systems.
Gary Mobley: So my question is how big in revenue terms can that be in the fiscal year 2006 timeframe or said differently how much of a growth catalyst can be on top of what you are producing traditional power management.
Traditional power management as they are talking about these are low voltage.
Gary Mobley: If that's what you mean, okay. There is silicon carbide is of course to me is also in the power management and.
Michael Hsing: And okay, the silicon carbide, of course, to me is also in the power management. And, but these are much higher powers and have very high power management. And We don't want to put on the numbers, but these are, again, it's a couple billion dollar opportunity for all of them, for NPS.
Gary Mobley: But these are much higher power some are high very high on power management.
Gary Mobley: <unk>.
Gary Mobley:
Gary Mobley: We don't want to put on numbers, but these are again, it's a billing.
Gary Mobley: Building a couple of billion dollar opportunity for all of them for for MTS.
Michael Hsing: I don't want to put a timeline on it. I know it's, you know, we picked a couple for the script, but we only, you know, could put a few in for time. But I think our strategy continues to be plant a lot of seeds in a lot of different areas that can turn into revenue as the market decides what to what to prioritize. Oh, that's a good point.
Gary Mobley: Want to put a timeline on it okay.
Gary Mobley: No.
Gary Mobley: We picked a couple for the scripts, but we only.
Gary Mobley: Put a few in for time, but I think our strategy continues to be plant a lot of seeds in a lot of different areas that can turn into revenue as the market decides what to what to prioritize so thats a good point.
Michael Hsing: And they I only Yeah. We are on March 20th, so we have an analyst day. And this time you come over, you will see a lot of showcase on the NPS new technologies. And these all will contribute in the next few years of growth. And if you want to pin down what is the numbers, I would say that if you look at the past for NPS, what the model is, I don't see any reason we should change. OK, sure, faster or slower.
Gary Mobley: Yeah.
Gary Mobley: We have a march 20th so we have a analyst days in that game.
Gary Mobley: At this time that you'll come over you will see lawless showcase on the MTS and new technologies.
Gary Mobley: <unk>.
Gary Mobley: These all will contribute in the next few years of our growth, Okay, and if you want to pin.
Gary Mobley: Paying down what is the number so I would say that if you look at the past before MTS.
Gary Mobley: The model of this we will I don't see anything.
Gary Mobley: And any reason, we should change okay show, a faster or slower.
Operator: Thanks, guys.
Gary Mobley: Thanks, guys.
Speaker Change: Our next question is from Quinn Bolton of Needham. Your line is now open.
Quinn Bolton: Our next question is from Quinn Bolton of Needham.
Quinn Bolton: Quinn, your line is now open. Hey, guys, all after my congratulations as well, I guess, Bernie, Michael, obviously, a very strong start to the year in the March quarter, your comments about enterprise data, certainly sound like that business might be more second half weighted. And so I guess I'm just trying to think, you know, what, what sort of revenue pattern would you expect? You know, through 2025? Is the first half? You know, slower, the second half, materially stronger? Do you think that you have some puts and takes? And so it's a, you know, kind of more linear ramp through the through the year, just any any sort of thoughts on the shape of revenue through 25 would be would be helpful.
Speaker Change: Hey, guys I'll offer my congratulations as well I guess, bringing Michael.
Speaker Change: Obviously, a very strong start to the year in the March quarter. Your comments about enterprise data certainly sound like that business might be more second half weighted and so I guess I'm just trying to think what sort of revenue pattern would you expect.
Speaker Change: Through 2025 is the first half.
Speaker Change: <unk>.
Speaker Change: Slower in the second half materially stronger do you think that you have some puts and takes and so it's that.
Speaker Change: Kind of more linear ramp through the through the year, just any any sort of thoughts on the shape of.
Speaker Change: Revenue of 325 would be would be helpful.
Bernie Blegen: Yeah, so the the comment that we made as far as the outlook for the year, really looks at the design wins we've secured and an expectation of what is going to be ramping. Keep in mind, though, that particularly in the AI side of enterprise data, that that has tended to be very volatile and that we have relatively short lead times as far as when we get hard information or POs for actual delivery. So I think that within the context of, you know, what we believe is most likely to happen, we're very secure by saying a flattish year that's weighted to the back half, but how that curve actually plays out over the quarters is to be determined.
Speaker Change: Yeah.
Speaker Change: So the comment that we made as far as the outlook for the year.
Speaker Change: Really.
Speaker Change: Looks at.
Speaker Change: The design wins, we have secured.
Speaker Change: And an expectation of what is going to be ramping.
Keep in mind, though that particularly in the AI side of enterprise data.
Speaker Change: That has tended to be very volatile and that we have relatively short lead times.
Speaker Change: As when we get a hard information.
Speaker Change: <unk> pose for actual delivery, so I think that.
Speaker Change: Within the context of what we believe is most likely to happen, we're very secure by say nay.
Speaker Change: Flattish year, that's weighted to the back half, but how that curve actually plays out over the quarters as a to be determined.
Michael Hsing: Yeah, let me add it.
Speaker Change: Yeah, let me add another component.
Michael Hsing: Okay, Bernie said Monolithic means this industry, this application, if you will, is at the initial rank. in So you're only involved with, we have a few customers. Now, okay, we talked about it before, so we have a multiple customers, okay. And they start to ramp up. It's very good for NPS, very, we will, we focus on the diversifications. And even within a single segment.
Speaker Change: Volatile means that this industry's unlucky this applications, if you will and again in <unk>.
Speaker Change: Where are we.
Speaker Change: Is that the initial ramp in.
Speaker Change: And.
Speaker Change: So you'll only have evolved with them we have a few customers now.
Speaker Change: Now we talk about it before so we have multiple customers Mccabe and.
Speaker Change: They start to ramp.
Speaker Change: So very good for NPS varied.
Speaker Change: We focus on the diversification and even within a single segment.
Michael Hsing: I guess that was going to be my sort of second question, just just thinking about the enterprise data segment. Can you just give us a sense what you're seeing in terms of one, you know, like for like pricing pressure, and then two, I think some of the newer designs really move away from a silicon only solution to much more of a module solution. And, and I assume that those carry, you know, much higher dollar content for you. And so do you see, you know, as you mix the customer you ramp some of the new hyperscaler designs.
Speaker Change: Got it I guess I was going to be my sort of second question, just just thinking about the enterprise data segment.
Speaker Change: Can you just give us a sense what youre seeing in terms of one <unk>.
Speaker Change: For like pricing pressure and then two I think some of the newer designs really move away from a silicon only solution to March more of a module solution and I assume that those carry a much higher dollar content for you and so do you see your IQ mixed.
Speaker Change: Mixed the customary ramps of the new Hyperscale or designs do you think the blended ASP trends in that business. Even if you see some like for like pricing connect go higher through the year as these new platforms ramp.
Michael Hsing: Do you think the blended ASP trends in that business, even if you see some like for like pricing can that go higher through the years these new platforms ramp. Well, NPS are going to stick with our, our models in that game and margin models and gross margin models. We. We provide performance. If it doesn't fit the MPS business model, we don't take those businesses. and so far, we're the leading suppliers in silicon as well as the power market.
Speaker Change: Well NPS are sticking with our our models in that game in the margin models.
Speaker Change: Gross margin model.
Speaker Change: We.
Speaker Change: We provide performance.
Speaker Change: And.
If it doesn't fit the NPS.
Speaker Change: Our business model, we don't take those business and.
<unk>.
Speaker Change: So for us, where we're the leading suppliers and in silicon as well as.
Speaker Change: The power modules.
Michael Hsing: and uh so this is the reason we in in a very short time in the last 12-24 months. We have engaged with all these hyperscales. We have all these projects designed away, designed in. And also we have future products, many future products in the development. Got it.
Speaker Change: <unk>.
Speaker Change: So this is the reason we in that in a very short times in the last.
Speaker Change: Paul 24 months, we have.
Speaker Change: Engage the way the all these hyperscale we have all of these are projects designed to weight design any.
Speaker Change: And also we have a future products.
Many fisher products.
Speaker Change: In the development.
Speaker Change: Got it thank you Michael.
Michael Hsing: Thank you, Michael.
Our next question is from Chris Caso of World. Chris Your line is now open.
Chris Caso: Our next question is from Chris Caso of Wolf. Chris, your line is now open.
Speaker Change: Yes. Thanks, I guess just to start I just wanted to make sure I understood correctly that some of the comments so when either with the enterprise data flattish for the year weighted to the back half and I'm, assuming that's the entirety of the enterprise data segment, not not not just that associated with AI.
Chris Caso: Yes, thanks. I guess just to start, I just want to make sure I understood correctly that some of the comments.
Chris Caso: So when you look at the enterprise data flattish for the year, weighted to the back half, and I'm assuming that's the entirety of the enterprise data segment, not just that associated with AI. And, you know, maybe you could talk about how, you know, you talked about some of the hyperscalers, some of the custom ramps happen in the second half of the year. Is that what's driving that strength in the back half of the year?
Speaker Change: And maybe you could talk about how.
Speaker Change: You talked about some of the hyperscale or some of the custom ramps happen in the second half of the year is that what's driving.
Speaker Change: That strength in the back half of the year.
Chris Caso: What's kind of driving that back half weighting?
Speaker Change: What's kind of driving that that that back half weighting.
Bernie Blegen: Chris, that that's an accurate observation. It's, as we look at the ramps for both the SOCs, and some of the tensor processor products that are expected to come out, we've been prototyping those, but the revenue ramps are really weighted to the second half. And in addition, some of our existing customers in the AI business in particular have multiple new products that they're ramping, and those will have different demand profiles as well.
Speaker Change: Chris.
Speaker Change: An accurate observation.
Speaker Change: As we look at the ramps for the.
Speaker Change: The <unk> and some of the tensor processor products that are expected to come out.
Speaker Change: We've been prototyping knows but the revenue ramps are really weighted to the second half.
Speaker Change: In addition, some of our existing customers.
Speaker Change: <unk>.
Speaker Change: AI business in particular have multiple new products that they are ramping and those will have different demand profiles as well.
Bernie Blegen: And then that's just within the enterprise data. I think another important ingredient is what we've referred to as the trickle down effect, as we see the other applications that are allied to enterprise data or AI specifically in memory, optical and networking, and all three of those are areas for growth as well during 2025. Right.
Speaker Change: And then that's just within the enterprise data I think another important ingredient is what we've referred to as the trickle down effect.
Speaker Change: As we see the other applications that are allied to enterprise data or AI, specifically in memory optical and networking and all three of those areas for growth as well during 2025.
Speaker Change: Alright.
Chris Caso: Um, and I guess, you know, as you look at the full year, uh, you know, obviously, uh, you know, from what you guys are seeing and, and, uh, you know, the better than seasonal Q1, uh, you know, I'd safe to say you're starting out a little better than, uh, you know, some of the others in this space. Uh, you know, what, what's your thought as, as you go through the year? I mean, is there any lumpiness with regard to, you know, some of the opportunities that are ramping early in the year that we should consider as we go through the year?
Speaker Change: And I guess as you look at the full year.
Speaker Change: You know obviously.
Speaker Change: From what you guys are seeing in.
Speaker Change: The better than seasonal Q1, I would safe to say youre, starting out a little better than.
Speaker Change: Some of the others in this space.
Speaker Change: What's your thought as as you go through the year I mean is there any lumpiness with regard to.
Speaker Change: Some of the opportunities that are ramping early in the year that we should consider as we go through the year or.
Michael Hsing: Or, you know, is, you know, excluding the enterprise data's business, do you see revenue, you know, kind of on a, uh, uh, a fairly, uh, stable trajectory, upslope trajectory as you go through the year?
Speaker Change: Excluding the enterprise data business did you see revenue kind of on a.
Speaker Change: Fairly.
Speaker Change: Stable trajectory absolute trajectory as you go through the year.
Michael Hsing: Yeah, I can. tell you something. um it's very difficult to to say sooner you go by year by year we don't go by year by year to look at me and uh but although we will have to report a year by year and uh i'll give you examples our large customer start to push out some product, pulling a lot of other ones.
Speaker Change: Yeah I can.
Speaker Change: Hum.
Speaker Change: I'll tell you something.
Speaker Change: It's very difficult to say soon youll go by year by year, We don't go by year by year to Merck came in better.
Speaker Change: Although we will have to report a year by year end.
Speaker Change: I'll give you examples of our large customers.
Speaker Change: Start to push out some product pulling a lot of other ones. So we can't.
Michael Hsing: So we can't really tell, okay? And other customers, other hyperscales start to ramp, okay? Start, they're telling us we're gonna keep a ramp. Whether the ramp have effective, and remove our revenue needles. In Q4 of this year, or Q1 of next year, we can't tell.
Speaker Change: We can't really tell some okay and.
Speaker Change: Other customers are there.
Speaker Change: Hyperscale start to ramp okay style.
Speaker Change: Telling us we're going to keep a ramp.
Speaker Change: Whether the ramp have been effective.
Speaker Change: And the move of our revenue needles.
Speaker Change: In Q4, but this year a pure one over the next year, we can tell.
Bernie Blegen: Yeah, maybe the only thing I'd add on, Michael, then it just comes back to the focus on what you can control, right. And, you know, the organization looking at providing the best products, you know, with the best quality. And that's what we can do right now. And as the market then, you know, plays through, that will turn into revenue.
Speaker Change: Maybe the only thing I would add Michael is just goes back to the focus on what you can control right and yes. The organization looking at providing the best products with the best quality.
Speaker Change: And that's what we can do right now and as the market. Then plays through that will turn into revenue. So I don't think we're trying to get into a quarter by quarter debate here, Chris I think that's how we'd more flattish kind of a first half second half dynamic at this point.
Operator: So I don't think we're trying to get into a quarter by quarter debate here, Chris, I think that's how we more landed kind of in a first half, second half dynamic at this Thank you.
Speaker Change: Alright, thank you.
Speaker Change: Our next question is from Joshua <unk> of Cowen Joshua Your line is now open.
Joshua Buchalter: Our next question is from Joshua Buchalter of Cohen.
Joshua Buchalter: Joshua, your line is now open. Yes, thank you for taking my question. A couple of times you talked about the hyperscale program sort of driving growth in more so in the back half of the year. I guess if we compare these sockets to you know, what you've already done in AI and the accelerator side, there's a lot of companies in the analog space that are saying that they have power engagements with ASIC vendors as well. Would you expect the majority of these Merchant, the ASIC programs to be dual sourced. And I know you're not going to necessarily quantify share, but I'd just be curious to hear how you're seeing the competitive environment.
Joshua: Thank you for taking my question.
Speaker Change: A couple of times you've talked about.
Speaker Change: Hyperscale programs that are driving growth more so in the back half of the year.
Speaker Change: I guess, if we compare these sockets to what you've already done in AI in the accelerator side Theres a lot of.
Speaker Change: Companies in the analog space that are saying that they have power engagements with basic vendors as well.
Speaker Change: Would you expect the majority of these.
Speaker Change: Merchant <unk> programs to be dual sourced and I know youre not going to quantify here, but I'd just be curious to hear how youre seeing the competitive.
Speaker Change: And these sockets. Thank you.
Speaker Change: Sure Let me take your first opportunity there.
Michael Hsing: Sure, let me take the first opportunity there. If you look at our most recent track record in the new, and I say new, relatively new AI business, the reason we were able to secure a lead position initially is because of our ability to innovate and our time to market along with, you know, our overall performance characteristics. So to the extent that that is valued in these product launches, those are the qualities that give us an opportunity to have a first mover advantage.
Speaker Change: If you look at our.
Speaker Change: Our most recent track record.
Speaker Change: New.
Speaker Change: And I would say two relatively new AI business. The reason, we were able to secure a lead position initially is because of our ability to innovate and.
Speaker Change: Our time to market.
Speaker Change: Along with our overall performance characteristics so to the extent that that is valued in these.
These product launches.
Speaker Change: Those are the qualities that give us an opportunity to have a first mover advantage.
Michael Hsing: But as we've said a couple times on this call, that when we look at our customers, we don't necessarily control what their decision process is or why. And so, again, we lead with our strengths and believe that we're well positioned and then we'll see how the numbers turn out towards the end of the year here. Yeah, you mentioned the second half, you pinned it down on the second half of the rent. What we mean is in the very near future. Yeah, it could be Q1 of next year, or could be Q3 of this year, or even, even overlaps in Q2.
Speaker Change: But as we've said a couple times on this call that.
Speaker Change: When we look at our customers.
Speaker Change: We don't necessarily.
Speaker Change: Control what their decision process is or why.
Speaker Change: So again, we lead with our strengths.
Speaker Change: And believe that we're well positioned and then we will see how the numbers turn out.
Speaker Change: Towards the end of the year here.
Speaker Change: You mentioned, a second have you paying that down on the second half of a ramp.
Speaker Change: We remain in.
Speaker Change: The very near future.
Speaker Change: Could you feel on that.
Speaker Change: Next year it could be.
Speaker Change: Q3 of this year or even hemo overlapping in Q2.
Michael Hsing: And a lot of things, as I said earlier, okay, and our large customers, some of the push out, other ones are pulling to the game. And pulling very urgently. Okay, I mean, so we cannot tell.
Speaker Change: <unk>.
Speaker Change: The other thing as I said earlier, it's in okay in our larger customers some of the push all other ones a polling that came in.
Speaker Change: Pulling very <unk>, Italy, okay.
Speaker Change: So we cannot tail.
Bernie Blegen: I guess to put a punctuation statement, we remain cautiously optimistic. But our momentum is certainly in the right direction. Oh, that's the professional way to say it. We always get the more professional answers from Bernie.
Speaker Change: I guess to put a punctuation statement, we remain cautiously optimistic.
Speaker Change: But our momentum is certainly in the right direction, but that's the that's the professional way to say it [laughter], we always get the more professional answers from Bernie Okay.
Joshua Buchalter: Okay, no, thank you. Thank you both for the color there.
Speaker Change: Thank you both for the color there.
Michael Hsing: As I follow up, I guess, you know, you're kind enough to give sort of a rough outlook for enterprise data growth for 2025. Any more clues you can give us on how you're expecting, either at the company level, 2025 growth to shake out and any sort of, you know, which segments you would expect to be the biggest contributors to growth? biggest ones. We're thinking of the multiple of them. Yeah. And Well, multiple of them will will ramp in a different many different segments in We. we Sometimes we pick a number like it was wrong, but other ones are coming up, and we focus on the diversified growth.
Speaker Change: As my follow up I guess, you were kind enough to give sort of a rough outlook for enterprise data growth for 2025 any more clues you can give us on how youre expecting either at the company level.
Speaker Change: 2035 growth to shake out and any sort of which segments you would expect to be the biggest contributors to growth. Thank you.
Speaker Change: Biggest ones.
Speaker Change: Think of them as a multiple of them yeah.
Speaker Change: <unk>.
Speaker Change: Well there are multiple of them are.
Speaker Change: We'll we'll ramp in a different many different segments.
Speaker Change: And.
Speaker Change: <unk>.
Speaker Change: We are.
Speaker Change: We.
Speaker Change: Sometimes they would pick a numbers of Nokia was wrong time, okay, and the other ones are coming up and we focus on a diversified growth.
Michael Hsing: That is the key strategy. We've been playing the same principles for the last 25 years. and uh if this thing doesn't work and then other things will work okay that's always with always our strength And as long as we bring up The best performance, highest performance product in the market. We will, if this segment slows down for whatever the reasons, other segments will pick up.
Speaker Change: That is the key strategies, we will being playing the same.
Speaker Change: Principals in the fall of last 25 years.
Speaker Change: If this thing doesn't work and then other things that we'll work okay. That's always.
Speaker Change: Always our strengths.
Speaker Change: As long as the.
Speaker Change: We bring up.
Speaker Change: The bass pro foremost highest performance products.
Speaker Change: In the market.
Speaker Change: If they.
Speaker Change: This second amongst slows down for whatever the reasons are that Simon will pick up.
Speaker Change: Thank you both and congrats on the results.
Operator: Thank you both, and congrats on the results. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question is from will Stein of Triage Twill. Your line is now open.
Will Stein: Our next question is from Will Stein of Truist. Will, your line is now open. Great. Thanks for taking my question. We start with what everyone's been asking about is enterprise data. I think you highlighted Bernie that it's going to be down sequentially.
Thanks for taking my question.
Speaker Change: Let me start with.
Speaker Change: Whenever what's been asking about is enterprise data.
Speaker Change: I think you highlight Bernie that it's going to be down sequentially.
Speaker Change: Ken can you give us a little help on the modeling because down could be down like 3% or like 30%.
Will Stein: Can, can you give us a little help on the modeling because, you know, down could be down like 3% or like 30%. Maybe just dimensionalize it a little bit to give us some context.
Maybe just dimensionalize that a little bit to give us some context. Please.
Speaker Change: Yeah.
Bernie Blegen: Yeah, I think that it'd be really hard. Again, what Michael just said is that the the strength of our model is the diversification.
Speaker Change: Think that it'd be really hard again, what Michael just said is that the.
Speaker Change: The strength of our model is the diversification and I would probably point to the.
Michael Hsing: And I would probably point to the outlook that we've given in total for Q1 as being a risk profile that we believe we can deliver comfortably against, based on what we can see in our backlog and the continuing the ongoing ordering patterns. But again, trying to actually stratify with a level of precision on the end market at this point, might be difficult.
Speaker Change: The outlook that we've given in total for Q1.
Speaker Change: As being a risk profile that we believe we can deliver.
Speaker Change: <unk> against <unk>.
Speaker Change: Based on what we can see in our backlog and the continuing the ongoing ordering patterns.
Speaker Change: But again trying to actually stratosphere lie with a level of precision on the end market at this point.
Speaker Change: It might be difficult yeah, you're maybe looking for precision some okay and we all of these in our business. We will for long terms and we go for long term. It doesn't mean near term what ill have uplifting okay.
Michael Hsing: Yeah, you may be looking for positions and okay, and the reality is in the business, we go for long terms. And we go for long term, it doesn't mean year term will have uplifting, okay, in our revenues.
Speaker Change: In our revenues.
Michael Hsing: Clearly, my ability to model the near-term is problematic.
Speaker Change: Clearly my ability to model the near term.
Speaker Change: Problematic.
Michael Hsing: A follow-up, if I can, maybe let me switch gears a little bit. Michael, I think in the past, you talked about having some capability and microcontrollers historically, you know, I know, that's not like a focus, or it's, it's not a meaningful part of your revenue, as well as I understand, should we expect that to change? There's so many new products, you talk about silicon carbide power and converters now and DSPs even, should we expect microcontrollers or another any other digital sort of logic? technology to become a bigger part of your revenue over time?
Speaker Change: A follow up if I can.
Speaker Change:
Speaker Change: Maybe let me switch gears a little bit.
Speaker Change: Michael I think in the past you talked about having some capability in microcontrollers historically, I know thats not loan like.
Speaker Change: Our focus.
Speaker Change: It's a meaningful part of your revenue as well as I understand should.
Speaker Change: Should we expect that to change there's so many new products you talk about silicon carbide power and converters now in DSP is even.
Speaker Change: Should we expect microcontrollers that require another any other digital sort of logic.
Speaker Change: Technology to become a bigger part of your revenue overtime.
Speaker Change: Very good questions.
Michael Hsing: Very good question. And we don't list out a microcontroller as a standalone standard product that we sell. As a matter of fact, okay, we as a as we have a many, we sell many microcontrollers now. Okay, and of, as I recall, in my mind can come up 12, 13 microcontroller projects. It is ongoing. Some of the stuff is shipping. But what we sell microcontroller is on the system level. And as Bernie earlier said in the last field conference, so this NPS is evolving to a silicon-based solution company. microcontrollers play the key role. All these powers, all these other lighting, all these other audios, including power supply, including AI.
Speaker Change: We don't list them out a microcontroller.
Speaker Change: <unk> Standalone standard product that we sell.
Speaker Change: As a matter of fact, a docket we other.
Speaker Change: We have many.
Speaker Change: We sell many microcontroller now okay.
Speaker Change: As I recall.
Speaker Change: In my my can come up.
Low teen micro control projects.
Speaker Change: Ongoing some of those stuff is shipping but will we sell microcontroller is this on the system level.
Speaker Change: And.
Speaker Change: For any earlier say at all.
Speaker Change: In our last few conference.
Speaker Change: NPS is evolving too.
Speaker Change: Two a silicon based solution company.
Speaker Change: Controllers plays a key role.
Speaker Change: And.
Speaker Change: All of these are powers all of these other lighting all of these other ordeals.
Speaker Change: Including power supply, including AI.
Michael Hsing: They all have microcontrollers in it. and and we don't list separate items in the standard microcontroller part but a lot of and and clearly also a lot of microcontrollers were integrated. And that's the reason we don't list it apart.
Speaker Change: They all have our microcontrollers payment.
Speaker Change: <unk>.
Speaker Change: And we don't list separate of items in.
Speaker Change: The standard microcontroller part.
But a lot of.
Speaker Change: And clearly also a lot of our microcontroller.
Speaker Change: Our integrated.
Speaker Change: And.
Speaker Change: That's the reason, we don't list them apart.
Operator: This is separated.
Speaker Change: This is a separately okay.
William Kirwan: Okay. Our next question is from William Kirwan of Morningstar. William, your line is now open. Hey, everyone, thanks for letting us get a question in here. A lot of good questions so far, so I'll try not to beat any dead horses. But maybe it sounds like at least in the March quarter, automotive communication seems to be driving some of the growth.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question is from William <unk> of Morningstar. William Your line is now open.
Speaker Change: Hey, everyone. Thanks for asking a question in here a lot of good questions. So far is I'll try not to beat any dead horses.
Speaker Change: But maybe it sounds like at least in the March quarter automotive communications seem to be driving some of the growth. So I'm wondering if you could just give a broader view into the demand for those markets for 2025 and your opportunity for share gains in those two.
Michael Hsing: So I'm wondering if you could just give a broader view into the demand for those markets for 2025 and your opportunities for share gains and in those Sure. Well, good to hear you in the Q&A, by the way. When you look at the end markets, most of the ones that we have are long design cycles. and automotive probably lends itself to being the most predictive because we secure design when two to three years for an EV in advance of when it gets launched, or as many as four to five years for a traditional internal combustion Now, having said that, the timing of those ramps, when we get the design when it comes to market, still remains a question mark.
Speaker Change: Sure will.
Speaker Change: Good to hear you in the Q&A by the way.
Speaker Change: When you look at the.
Speaker Change: And markets.
Speaker Change: Most of the ones that we have are long design cycles.
Speaker Change: Automotive probably lends itself to being the most predictive because we secured design win two to three years for an EV in advance of when it gets launched or as many as four to five years for a traditional internal combustion.
Speaker Change: Now, having said that the timing of those ramps.
Speaker Change: When does it get.
Speaker Change: The design win comes to market still remains a question mark but within the.
Michael Hsing: But within the context of six to nine months, we can be reasonably predictive. So in automotive, we see continuation of what's been driving our last two quarters of growth as far as EVs in China, and those will be supplemented in the second half of the year, more likely by a European OEM that is going to be bringing up an autonomous driving ADOT solution, as well as additional content opportunities in North American EV company. And then when you look at the communication side, I think that is we're very early stages of being able to ramp the revenue opportunities, particularly in fiber optics.
Speaker Change: The context of six to nine months.
Speaker Change: We can be reasonably predictive so.
Speaker Change: Automotive we see.
Speaker Change: A continuation of what's been driving our last two quarters.
Speaker Change: Growth as far as Evs in China, and those will be supplemented in the second half of the year more likely by a European OEM that is going to be bringing up a autonomous driving adas solution.
Speaker Change: Well as additional content opportunities in the North American EV Company and then when you look at the communications side.
Speaker Change: I think that is we're very early stages of being able to ramp the revenue opportunities, particularly in fiber optics.
Michael Hsing: We started out with two primary customers, but that we expect that customer base to diversify over the year. Okay. As always, the pattern.
Speaker Change: We started out with two primary customers.
We expect that our customer base diversify over the year.
Speaker Change: Okay.
Speaker Change: As always the pattern.
Operator: That's excellent.
That's excellent and then maybe one just on.
Michael Hsing: And then, you know, maybe one just on, you know, some of the new products that were introduced at the start of the call. Really just which one of these maybe excite you the most and what are the new markets that you might be able to enter with these that are the most attractive do you think from a growth perspective? Thanks.
Speaker Change: Some of the new products that were introduced at the start of the call really just which one of these maybe excite you. The most and what are the new markets that you might be able to enter with these that are the most attractive do you think from a growth perspective the most.
Michael Hsing: The most exciting product we haven't announced yet. Coming to an end of the day. March 20th. Okay. And these are Equal babies, and okay, they all grow. should be where it comes up. Same, same right now. Yeah, we picked four, but there's many more behind that. So it's hard to pick this one.
Speaker Change: Siding product, we haven't announced it yet.
Speaker Change: Hello.
Speaker Change: Coming to our analyst day.
Speaker Change: 20th.
Speaker Change: <unk>, Okay and these are.
Speaker Change: Equal babies, okay. They are growth.
Speaker Change: Sure being very.
Speaker Change: Same Sam right now, Okay, we picked four but there's many more behind that so it's hard to pick just one actually we wanted to have a teaser to make sure. We had the best turnout for the Investor day.
Operator: Actually, we wanted to have a teaser to make sure we had the best turnout for the Investor Day. Okay, excellent. Well, we'll wait for more detail in March. Thanks, Ed.
Speaker Change: Okay excellent.
Speaker Change: Wait for more detail in March.
Speaker Change: Okay. Our next question is from Hans <unk> of Rosenblatt Hamzah. Your line is now open.
Hans Mosesman: Our next question is from Hans Mosesman of Rosenblatt. Hans, your line is now open. Thanks. Congrats, guys. I'll be quick. What is the split for your enterprise data between AI and non-AI, if that's possible?
Speaker Change: Thanks, Congrats guys I'll be quick.
Speaker Change: What is the split for your enterprise data between AI and non AI, if that's possible and I have a follow up.
Michael Hsing: Can I have a follow-up? Yeah, again, I think we already answered that question by saying that those lines are getting blurry. So we really don't have a meaningful way to make that divide. And our customers will not... Well, all not appreciated, we are aware of the scores of those members. And our customers made it very clear. Is non AI considered memory and optical? historically, different market segments, communication, memories and storage. Fine.
Speaker Change: Yeah again, I think we already answered that question by saying that those lines are getting blurry.
Speaker Change: So we really don't have a meaningful meaningful way to make that divide and our customers.
Speaker Change: And whatnot.
Speaker Change: Well no.
Speaker Change: No I appreciate it.
Speaker Change: <unk> disclosed those numbers.
Speaker Change: And.
Speaker Change: Our customers have made it very clear.
Speaker Change: Is that is non AI considered memory and optics.
Speaker Change: Historically.
Speaker Change: 300 different market segments.
Speaker Change: <unk> communication memories and storage sign okay at the risk of upsetting some of your customers have you answer what is the share between your historical AI customer for this year versus accelerator customers with displays at $10 90, or 50 50 year.
Hans Mosesman: Okay, at the risk of upsetting your customers, if you answer, what is the share between your historical AI customer for this year versus accelerator customers? What's the split? Is it 1090 or 5050? Or and for this year and at the end of the year.
Speaker Change: And for this year and at the end of the end of the year.
Michael Hsing: and we we probably we have a more or in the in the near term where we have a more clear pictures but then now we don't in And frankly, as Bernie said, we're not in a position to answer it. And also by either by product, they share the same product. And also our customers doesn't want us to release this information.
Speaker Change: We probably would have a more.
Speaker Change: The near term, where we have a more clear pictures, but then now we dumped in the.
Speaker Change: And the way, we are and frankly some of the bone you said, we're not in position to answer it and they came in.
Speaker Change: And also by either by product this year the same product.
Speaker Change: And also and look at our customers.
Speaker Change: Doesn't want us to.
Speaker Change: Released these informations.
Operator: Okay, thank you very much.
Speaker Change: Okay. Thank you very much.
Speaker Change: Our last question is from Joe <unk> from Wells Fargo. Joe Your line is now open.
Joe Kutrocki: Our last question is from Joe Kutrocki from Wells Fargo.
Joe Kutrocki: Joe, your line is now open. Yeah, thanks for taking the questions. Just curious on the notebook strength that you guys are talking about into the first quarter. Wondering this, you know, what's driving that? Is that strength from that you're starting to see pull for AI PCs or the channel refill, just just trying to understand some of those dynamics?
Joe: Yes, thanks for taking the questions just curious on the notebook strength that you guys are talking about into the first quarter.
Joe: Wondering what's driving that is that strength from that you're starting to see pull for AIP sees or is it channel refill just trying to understand some of those dynamics.
Bernie Blegen: That's a great question. In fact, we believe that a lot of the design wins that we've had in notebooks more recently, are tied into, you know, new AI product demand. But as I said, it's a little bit of an atypical ramp for Q1. So we really don't have a definitive answer on the on the why behind it. Got it.
Joe: That's a great question in fact, we believe that a lot of the design wins that we've had in notebooks more recently <unk>.
Joe: Tied into.
Joe: <unk>, new AI product demand.
Joe: But as I said.
Joe: It's a little bit of an atypical.
Joe: Ramp for Q1, so we really don't have a definitive answer on the on the why behind it.
Joe: Okay.
Joe: Got it.
Michael Hsing: And then just, you know, trying to think about the new projects that are ramping in the second half for enterprise data, any help that you can you can provide and just try to think about like, the architectures of those solutions that you're shipping to your customers? Are you still largely seeing those as being lateral power opportunities? Are they starting to move to more vertical solutions?
Speaker Change: And then just trying to think about that the new projects that are ramping in the second half of enterprise data any help that you can you can provide on just trying to think about like the architectures of those solutions that youre shipping to your customers or are you still largely seen as being lateral power opportunities are those starting to move to more vertical solutions.
Joe: Yes.
Bernie Blegen: Yeah, I think you heard us talk a couple of times that we're not going to talk specifically to any customer or their particular architectural solution. I think for us, what you see is getting folks that is providing a portfolio of products with the best quality, the best performance, and then the customers can choose what works for them.
Joe: Heard us talk a couple of times that we're not going to talk specifically on any customer or are there particular architectural solution I think for us what you see Thats got truck centers, providing a portfolio of products with the best quality. The best performance and then the customers can choose what works for them.
Michael Hsing: And going back to Michael's earlier comment, as far as basically the value proposition of the principles we operate under, what we're most interested in doing and continuing to do is winning soccer. Yeah, our customers particularly does not want us to reveal the lateral power or vertical. Got it.
Joe: And going back to.
Speaker Change: Michael earlier comment as far as the.
Joe: Basically the value proposition of the principles we operate under.
Joe: We're most interested in doing and continuing to do is winning sockets.
Joe: Our customers are.
Joe: Typically does not want us to reveals the lateral power or vertical power.
Speaker Change: Got it that's helpful. Thank you.
Operator: That's helpful. Thank you.
Operator: This concludes our Q&A session.
Speaker Change: This concludes our Q&A session I would now like to turn the webinar back over to Bernie.
Bernie Blegen: I would now like to turn the webinar back over to Bernie. I'd like to thank you all for joining us for this conference call.
Bernie Blegen: I'd like to thank you all for joining us in this conference call.
Bernie Blegen: As a quick reminder, we'll be hosting our Investor Day on March 20th, 2025. Michael and other MPS executives will showcase our vision for innovation and outline key elements of the company's long term growth strategy. The event will be held at our San Jose offices and will include live presentations, a Q&A session and demos of our latest solutions for a number of applications and a lot of a number of other markets. If you haven't done so already, please email your RSVP to mpsinvestor.relations at monolithicpower.com. You can also access a live stream of the event on our Investor Relations website.
Bernie Blegen: As a quick reminder, we will be hosting our investor day on March 20th 2025.
Bernie Blegen: Michael and other MTS executives will showcase our vision for innovation and outline key elements of the company's long term growth strategy.
Bernie Blegen: It will be held at our San Jose offices and will include live stream live presentations, our Q&A session and demos of our latest solutions for a number of applications and a lot of a number of other markets. If you haven't done so already please email your RSVP to MTS investor one word.
Bernie Blegen: Dot relations at monolithic power Dot com.
Bernie Blegen: You can also access the live stream of the event on our Investor Relations website separately I look forward to talking to you again during our first quarter 2025 conference call, which will likely be held in may.
Bernie Blegen: Separately, I look forward to talking to you again during our first quarter 2025 conference call, which will likely be held in May. Thank you and have a nice day. Goodbye.
Bernie Blegen: Thank you and have a nice day.
Bernie Blegen: Goodbye.