Q1 2025 Photronics Inc Earnings Call
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Thank you.
Unknown Executive, Richelle Burr
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We are under no duty to update any of the forward looking statements. After the date of the presentation to conform these statements to actual results.
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In its most recent Form 10-K and other subsequent reports filed with the SEC concerning factors that could cause actual results to differ materially.
During the course of our discussion we will refer to certain non-GAAP financial measures.
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A reconciliation of these metrics to GAAP financial results is provided in our presentation materials.
Frank: I'll now turn the call over to Frank.
Frank: Central Tad and good morning, everyone.
Speaker Change: We achieved first quarter sales of $212 million.
Frank: In line with our expectation and normal season.
Frank: She then trends.
Frank: non-GAAP diluted EPS of <unk> 52 cents.
Frank: Was above the high end of guidance and we once again delivered strong cash flow.
Frank: Turning to our end markets.
Frank: I see it declined 2%.
Frank: Over a year due to main strengths weakness in Asia and Europe.
Frank: Particularly at the older nodes with dimension.
Frank: For high end IC.
Frank: We have seen continued evidence of logic photo mask no migration to 22 and 28 nanometer in Asia.
Frank: We then I see memory photo mask demand also shows trends.
Frank: L. P D declined slightly year over year.
Frank: Two industry softness.
Frank: Though we saw brand demand from customers in China.
Frank: Our industry, leading technology in a P. D continues to win business.
Frank: And our strategy to a prior I Cmos technology to a P. D helps us win market share.
Frank: We recognize the milestone during Q1.
Frank: We received our first orders for Qi <unk> six ml they displace.
Frank: She April six requires more at events and compressed mask that had higher asps.
Frank: Now I would like to discuss a few development impact in the semiconductor industry.
Frank: First.
Frank: Yes.
Frank: S GAAP evolve.
Frank: We believe it will be a longer term growth driver for our industry and photronics.
Frank: New AI tours have the potential to offer AI capability.
Frank: Lower cost.
Frank: These tours.
Frank: So the barrier of entry into AI.
Frank: Which drives new applications required to do.
Frank: Devices and the size.
Frank: Customer of IC survey in this application were dry photo mass demand.
Frank: Mindy at a more advanced nodes that we service.
Frank: At more mature nodes.
Frank: It drives the need for fast interconnects, including Silicon Photonics and advanced packaging.
Frank: Second the semi conductor industry may potentially incurred increased costs from tariffs.
Frank: For FY 'twenty is our strategy to invest in reaching our capacity close to customer locations show buffer us from these potential costs.
Frank: Therefore, we import very few months into the United States and don't anticipate.
Frank: For an impact on our business from tariffs.
Frank: Physical 2025 started off as expected in Q1.
Frank: And the mountain trade our technology leadership.
Frank: Interest gross driver IC and IC <unk>.
Frank: <unk> no migration regeneration and custom designed expansion.
While our product development and scale up of display size.
Frank: Key for MPT.
Frank: Further our markets are benefiting from AI adoption and regionalization trends.
Frank: Where we leverage our competitive advantages in.
Frank: Capability cost scare and time to market.
Frank: By working with our customers, we are carefully expanding capacity and capability in projected growth regions, such as the United States to meet demand.
Frank: This investment further strengthen our market leadership position gave.
Frank: Giving us confidence in our long term outlook.
Frank: I will now turn the call over to Eric to review, our fourth quarter results and provide second quarter guidance.
Eric: Thank you Frank good morning, everyone.
Speaker Change: As Frank stated our first quarter results were inline with expectations with revenue of $212 million.
Speaker Change: Total revenue declined 5% sequentially led by IC, which declined 6% quarter over quarter to $154 million.
Speaker Change: Within IC mainstream declined 9%, reflecting the overall softness of the broader semiconductor industry.
Speaker Change: We did see pockets of strengths within high end.
Speaker Change: Sales generated out of our European facilities were weaker than anticipated.
Speaker Change: And this situation is expected to continue.
Speaker Change: Our IC business out of our facilities in Asia and the U S. Also declined sequentially due to typical seasonality as expected the U S. I see did exhibit strong year over year growth.
Speaker Change: With an IC, we continue to drive towards a greater mix of higher end business with a focus on increasing our blended asps.
Speaker Change: Demonstrating our execution in fiscal year 2023, our high end business represented 30% of total IC revenue increasing to 36% in fiscal year 2024.
Speaker Change: For the first quarter of fiscal year 2025, our high end business increased further to 39%.
Speaker Change: Within high end, we saw particular strength in Q1 in the 14% to 22 nanometer geometry ranges.
Speaker Change: For our leading edge IC mix, we recognize improved demand from memory customers.
Speaker Change: MPD revenue was stable both sequentially and year over year at $15 million.
Speaker Change: We are the market leader in F. P D photo mask due to our technological superiority and manufacturing footprint.
Speaker Change: As a result, despite market headwinds, we have been able to maintain our revenues due to increasing market share.
Speaker Change: Our operating margin of 25% was at the high end of our guidance range.
Speaker Change: Gross margins declined slightly to 36% because of lower sales volumes.
Speaker Change: Continued prudent controls along with lower severance and legal related expenses.
Speaker Change: R&D reduced opex by $2 9 million sequentially.
Speaker Change: Diluted GAAP EPS attributable to photronics shareholders was <unk> 68 per share.
Speaker Change: After removing the impact of FX gains fully diluted non-GAAP EPS attributable to photronics shareholders was <unk> 52 per share which was above the high end of our guidance.
Speaker Change: Our Fairfax gain was an unrealized benefit primarily related to the impact of the strengthening U S dollars on intercompany balances cash and accounts receivables held by our foreign subsidiaries.
During the first quarter, we generated $78 million in operating cash flow, which represented 37% of total revenue.
Speaker Change: We continue to build on our strong cash balance providing us with continued financial flexibility.
Speaker Change: Capex was $35 million in the quarter.
Speaker Change: We remain committed to spending $200 million in Capex in 2025 on a combination of capacity capability.
Speaker Change: And end of life tool initiatives.
Speaker Change: This run rate is higher than typical.
Speaker Change: To accommodate U S expansion initiative that is underway.
Speaker Change: I want to emphasize that our capital capacity expansion plans are driven by specific customer opportunities and go through a rigorous investment vetting process.
Speaker Change: These investments will strengthen our ability to support and win the most attractive photo mask opportunities.
Speaker Change: Total cash at the end of the quarter was $642 million and remained relatively unchanged from the end of fiscal Q4, driven by Capex debt repayment stock repurchases and the effect of foreign currency exchange rate changes on our cash balances.
Speaker Change: Have a modest $3 million of debt remaining.
Speaker Change: Before providing guidance I'll remind you that demand for our products is inherently uneven and difficult to predict with limited visibility in typical backlog of one to three weeks.
Speaker Change: In addition, asps for high end mass sets, our high meaning a relatively low number of high end orders can have a significant impact on our quarterly revenue and earnings.
Speaker Change: As we have highlighted previously our business is influenced by IC and display design activity and to a lesser degree by wafer and panel capacity dynamics.
Speaker Change: As those qualifications, we expect second quarter revenue to be in the range of $280 million to $216 million.
Speaker Change: Based on those revenue expectations in our current operating model, we estimate non-GAAP earnings per share for the second quarter to be in the range of 44 to <unk> 50 per diluted share. This.
Speaker Change: This equates to an operating margin between 23 and 25%.
Speaker Change: Given current market conditions, and our Q2 outlook, we are increasingly cautious about 2025.
Speaker Change: In order to continue to drive cash flow, we will continue to prudently manage costs.
Speaker Change: I will now turn the call over to the operator for your questions.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
To withdraw your question. Please press star one again.
Speaker Change: Standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Tom Diffley with D. A Davidson your line is open.
Tom Diffley: Yes, good morning, and thank you for letting me ask a few questions here.
Speaker Change: First one for you Frank.
Speaker Change: The outlook.
Speaker Change: It's for basically flat quarter over quarter and typically we see you know roughly 5% increase in the first or the second fiscal quarter first quarter of the year. So I'm curious is it really just the main stream in China that is the weakness.
Speaker Change: Is it.
Speaker Change: Just your ongoing lack of real visibility and conservatism or what's what's behind this the flat guidance.
Tom Diffley: Thank you Tom.
Tom Diffley: And the needs of the very low end or mainstream.
Tom Diffley: Mainly from the 16.
Tom Diffley: Inch wafer fab SP a week.
Tom Diffley: We see no signs of recovery in the near future.
Tom Diffley: Yes.
Tom Diffley:
Tom Diffley: Only in Asia, but also in Europe.
Tom Diffley: Particularly.
Tom Diffley: So.
Tom Diffley: I think this revenue.
Relatively soon.
Tom Diffley: All in all.
Tom Diffley: Our overall business.
Tom Diffley: Hi, Steve.
Tom Diffley: Negative impact, although our revenue and revenue.
Tom Diffley: Outlook.
Tom Diffley: So.
Tom Diffley: I think.
Tom Diffley: At this moment we are.
Tom Diffley: Our cultures are.
Tom Diffley: However.
Tom Diffley: Hum.
Tom Diffley: Yeah.
Tom Diffley: Positive.
Tom Diffley: And we will continue to focus.
Tom Diffley: Okay and leverage our competitive <unk>.
Tom Diffley: <unk> a high end.
Tom Diffley: To improve our blended ASP.
Tom Diffley: So I I believe.
Tom Diffley: You too small at this moment.
Tom Diffley: Is that right.
Tom Diffley: But I.
Tom Diffley: I think on that.
Tom Diffley: Although economic.
Tom Diffley: Picture.
Tom Diffley: It remains so.
Tom Diffley: So I believe by the end of Q.
Tom Diffley: We may have a much clear picture of that.
Tom Diffley: Sometimes in 'twenty five.
Tom Diffley: Okay, no that makes sense, if I could just dig in a little deeper on the mainstream business then obviously over the last few years.
Tom Diffley: The demand levels and the supply demand equation in mainstream was very beneficial to you you had nice margin expansion in that space. So just curious how do you look at the supply demand equation today in mainstream and what have you seen on the from a pricing basis is the pricing strength gone away or are you seeing some.
Tom Diffley: This quarter over quarter, how would you characterize the mainstream business right now.
Tom Diffley: Okay.
Tom Diffley: We keep on the.
Tom Diffley: Hum.
Tom Diffley: Uh huh.
Tom Diffley: Uh huh.
Tom Diffley: Overall part of the.
Tom Diffley: The mainstream business.
Tom Diffley: A small man seems to be a smaller.
Tom Diffley: Uh huh.
Tom Diffley: Due to the weakness.
Tom Diffley: Okay.
Tom Diffley: Industrial applications.
Tom Diffley: As I highlight.
Tom Diffley: Most of that age.
Tom Diffley: Six inch wafer fab.
Tom Diffley: Fab utilization.
Tom Diffley: So it does have some impact on our.
Speaker Change: Uh huh.
Speaker Change: No I had mentioned.
<unk>.
Speaker Change: Okay, maybe just one last question on the main stream are you seeing increased competition from local Chinese suppliers formats.
Speaker Change: Yes.
Speaker Change: B.
Speaker Change: <unk> competition.
Speaker Change: However, our.
Speaker Change: Because in China is on Oh.
Speaker Change: And high end of that.
Speaker Change: Our.
Speaker Change: In the middle and high side of our I Havent business.
Speaker Change: Such as that.
Speaker Change: I don't mean to afford it.
Speaker Change: I am talking two nanometer.
Speaker Change:
Speaker Change: We ship most of all our business too.
Speaker Change: Thanks.
Speaker Change: Such that our blended ASP in China.
Speaker Change: Steve Kim good and stable.
Speaker Change: So.
Speaker Change: The <unk>.
Speaker Change: Yes, they are more competition from local Chinese.
Speaker Change: This may cause in the low end of that management.
Speaker Change: That is not all focused oh.
Speaker Change: We are paid to the more profitable and more.
Speaker Change: High priced.
Speaker Change: Segment of that business in China.
Speaker Change: Great I appreciate the extra color there Frank.
Speaker Change: Maybe just a quick question for Chris then.
Speaker Change: Congratulations on the new Gen six ammo, let's create.
Speaker Change: What are the challenges to get to that larger screen size or panel size.
Speaker Change: Yeah. Thanks, Tom appreciate it.
Speaker Change: You know the specs for the amyloid mass, which prior to this had been all Gen. Six Gen. Six five are the tightest among our SPD products. So we have to scale those specs up to the much larger sub.
Speaker Change: Substrate size Gen. Eight six so it was kind of spec scaling uniformity all the mass parameters had to scale up to those larger substrates, which is quite difficult.
Speaker Change: Second thing is the.
Speaker Change: Integration of the mask onto the blank we use some advanced as we mentioned in the comments to the call. Some icy like technology and our SPD mask thing that people call phase shift and other other things that are common and <unk>.
Speaker Change: We use that in our SPD technology scaling that up to Gen. Eight six also was a challenge. So we met those were working on Gen. Eight six scale up.
Speaker Change: Now for almost a year. So we were kind of ready for this and it's really a good coordination with the customer we had lots of tests masks and pilots ahead. So I would not say, we're struggling with yield or execution delivery from here. So as the business grows we should be able to scale that product line up nicely.
Speaker Change: And how big do you expect that to be inside of your flat panel business over the next few quarters.
Yes, I don't think we would prefer not to comment on that.
Speaker Change: I think just suffice to say so far it's been more than a single order and it's connected with.
Speaker Change: Fab project or projects that are.
Speaker Change: Production level. So these are not just prototype masks or pilot masks. They were masks used for prudential production of AMOLED for larger format displays, particularly things like lapse.
Laptops. So they are production applications in the Fabs theyre going into have the possibility to scale to serious pilot production for volume products, but beyond that I think could be a little too early to put a scale on it.
Speaker Change: Okay.
Speaker Change: Appreciate it Chris.
Speaker Change: Eric.
Speaker Change: Looking at the balance sheet, obviously really strong cash position.
Speaker Change: There is going to be $200 million of spending the capex. This year, but it seems like there's still plenty of cash for a more aggressive buyback.
Speaker Change: What is your mindset towards buybacks versus I know at one point a year or two ago, you guys had talked about potentially keeping a war chest for acquisitions, but what is your thought process on the balance sheet right now.
Speaker Change: Thanks, Tom.
Speaker Change: With respect to the balance sheet or our capital allocation strategy really hasn't hasnt changed which is.
Speaker Change: The first is like three bullet points, the first wouldn't be.
Speaker Change: Normal capex in the second or third option or are our titles the.
Speaker Change: The second one being M&A activities or lack of them that we would do share repurchases during the quarter we shortly.
Speaker Change: Repurchase some shares.
Speaker Change: And in terms of what do we see going forward given the current macro economic conditions in the geopolitical environment at the moment. We are we are being a little cautious, but we certainly do have.
Speaker Change: We have the we have the war chest as you describe it to to be able to act quickly if the right opportunity comes along with respect to an M&A transaction.
Speaker Change: We were not going to just go to eliminate.
Speaker Change: Eliminate transaction to use of our cash to purchase kind of by revenues. If you will we will only do that if if it's accretive to the company.
Speaker Change: Likewise.
Speaker Change: It will be aggressive with.
Speaker Change: With share repurchases, if we see that.
Speaker Change: The environment is as.
Speaker Change: As favorable to do so at the right time. So this is something that we do look at.
Speaker Change: On a consistent basis, Steve Board.
Speaker Change: <unk> management team we are aware.
Speaker Change: Obviously, you have the cash, but I'd say that we have that.
Speaker Change: We're consistently monitoring and looking for the best way to deploy that.
Speaker Change: Great and what is your current authorization for buybacks.
Speaker Change: We have $100 million authorization.
Speaker Change: Okay, Great and then a final question over Oh go ahead.
Speaker Change: I'm sorry go ahead.
Speaker Change: Well I'll just say the final question overall is it looks like node migration getting more business at the $22 28 nanometer node is going to be a big driver over the next year.
Speaker Change: Just kind of curious where you think you can say about your current capacity there and how much capacity, you'll be adding with this $200 million of.
Speaker Change: Capital spending this year.
Speaker Change: Yes, so the.
Speaker Change: The capital spending that we have this this year would be.
Speaker Change: I think we've mentioned previously it's normal capex that we have plus.
Speaker Change:
Speaker Change: The increase from the normal for $200 million, especially for the U S.
Speaker Change: So.
Speaker Change: In the U S. We have junior visualization, we have some more opportunities for revenue and certainly provide some node migration.
Within the mainstream area in the U S and likewise.
Speaker Change: In Asia, we have are part of our normal Capex, we have we're putting point tools wherever we need to in order to enable us to to be able to be more effective in.
Speaker Change: Inefficient and taken out.
Speaker Change: More production.
Speaker Change: Where we have some bottlenecks and that's really.
Speaker Change: Is aging or node migration strategy.
Speaker Change: Great I appreciate the time for all three of you.
Speaker Change: Of course, thank you for asking the questions.
Speaker Change: Yes.
Speaker Change: Please standby for our next question.
Speaker Change: Our next question comes from the line of Gauci with singular research. Your line is open.
Speaker Change: Hi, Good morning, guys Jamie.
Speaker Change: Yes, we can.
Speaker Change: Okay. Thanks Ted.
Speaker Change: Joining us.
Speaker Change: Just on the first question is how much of the U S capacity coming online in mid 2026 is kind of.
Speaker Change: On the long term purchase agreements.
What is driving that strong demand is that strong demand in the U S based.
Speaker Change: Yeah.
Speaker Change: Chip customer.
Speaker Change: Customers and maybe you can quantify the percentage of SaaS customer customer commitments, that's tied to the chip back versus organic demand.
Speaker Change: So I'll take this.
Speaker Change: Actually that question. Your question wasn't very clear for just a couple here, but I think you are asking about what is it that we're seeing.
Speaker Change: In the U S.
Speaker Change: For which we're doing we're doing some capex, so I'll mentioned that.
Speaker Change: Our customers have certainly in the U S have indicated.
Speaker Change: They would like us to provide.
Speaker Change: Okay.
Speaker Change: Service them here in the U S market essentially.
Speaker Change: That is what's driving our increased capex in the U S. In terms of whether we have some agreements with them.
Speaker Change: That will secure that.
Speaker Change: I wouldn't say, we have like the take or pays because we don't we generally do not have take or pays yearly.
Speaker Change: Business at all.
Speaker Change: Absolute commitments and indications are.
Speaker Change: They would they would support us in the event that we do this so that's that's typically the level of support that we can.
Speaker Change: And we can get from our customers and our and our industry and that's what we have and as such we feel comfortable.
Speaker Change: Investing.
Speaker Change: We're planning to invest here in the United States does that address your question and I apologize because difficult.
Speaker Change: Let me pause see if there's any what was that what was that part of that expansion that is kind of tied to the hip act versus kind of the organic demand.
Speaker Change: So that would be organic demand. So so for the most part first for with respect to the chip.
Speaker Change: This is not necessarily contemplated in this capex at this time.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: My question is now how much of that.
Speaker Change: Capacity, we're putting in particularly in the U S are linked to customers that are getting funding through the chips Act. It's not a significant part of most of the projects are tracking in the states are projects that we believe would proceed with or without chips funding. So we don't see a lot of let's say risk and the ones that we're tracking.
Speaker Change: Connected to those customers getting chips funding.
Speaker Change: We also have we reported applied for chips funding under the under the second no fold a small supplier and also our applications are still under consideration.
Speaker Change: But the current investments we're contemplating I'm talking about here are being done separately and apart from what we did invest.
Speaker Change: Additionally, with the chips opportunity.
Speaker Change: Gotcha.
Speaker Change: And in terms of been node migration into 'twenty two 'twenty eight.
Speaker Change: How much of that demand do you think is getting is that how is the 14 nm.
Speaker Change: Compatible mask trending are you see any increased traction or increase from the AI.
Speaker Change: Designed for smaller chips.
Speaker Change: Estimates.
Speaker Change: Yes, we see mostly.
Speaker Change: Our AI driven business for us, we see mostly Ajay.
Jason our second order effects from AI. So we I would say, we see some of that in different regions around the world. These are support chips for the AI ecosystem.
Speaker Change: Designs of new chips for edge devices, and things like that that can take advantage of the AI ecosystem. I think we are definitely seeing some pull from those applications.
Speaker Change: Not really appropriate to quantify it but it is a positive trend on the memory side, we mentioned that memory is relatively small part of our IC business, but.
Speaker Change: It was one of the stronger growing segments.
Speaker Change: That is connected also to AI demand in cloud demand and that sort of thing. So so we're definitely seeing a lift from that application driver.
Speaker Change: Expect that to continue to grow.
Speaker Change: Looking ahead in future quarters and years.
Speaker Change: So post 2026.
Speaker Change: At full capacity.
Speaker Change: Capex comes into line and do you see do you have an idea of what what percentage of the high end IC revenue might be tied to supporting that AI infrastructure.
Speaker Change: Okay.
Speaker Change: Yes, I don't think we would.
Speaker Change: We would say you know what percent of our high end revenue at that time would be AI driven.
Speaker Change: So.
Speaker Change: Difficult to say.
Speaker Change: I mean, I think it will be a significant part.
Speaker Change: But.
Speaker Change: We probably would not be wise to put a specific percent audit at this point.
Speaker Change: Okay.
Speaker Change: In terms of the auto industry auto and industrial softness that you're kind of persisted for multiple sector quarters now any sign of inventory restocking on new design wins in these sectors for your mainstream.
Speaker Change: Okay.
Speaker Change: I mean, I can make another comment on that and maybe if stryker, Eric will follow up but I would say still looks fairly weak.
Speaker Change: And that market the automotive market.
Speaker Change: Units were down in the <unk>.
Speaker Change: There is some OSP pressures because the end users are.
Speaker Change: Our struggling said always drive some ASP pressures and I would say at the moment, we don't see significant.
Speaker Change: Maybe we'd say some stabilization if not dropping significantly from where it is but as far as the big turnaround in the automotive sector. I don't believe we really seeing at this point in China, and frankly, probably comment further.
Speaker Change: There is more activity going on in automotive design. Some portion of that is government backed in government funded but still the supply demand situation is not really healthy also in China on the automotive side.
Speaker Change: Okay.
Speaker Change: No.
Speaker Change: Data.
Speaker Change: Design activity seems to decrease in these two segments.
Speaker Change: Just a moment.
Speaker Change: I believe.
Speaker Change: And product given.
Speaker Change: Given the softness.
Speaker Change: The.
Speaker Change: New chip design.
Speaker Change: Okay.
Speaker Change: In terms of geographic mix for driving H two.
Speaker Change: How are you guys thinking about.
Speaker Change: The Italian is the subsidy is detecting regional pricing.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: I'm sorry.
Speaker Change: You don't mind repeating the question I'm not sure it came through.
Speaker Change: In terms of in terms of how.
Speaker Change: As you think about H two of 2025.
Speaker Change: The geographic mix, how do you.
Speaker Change: How do you how do you look at the geopolitical landscape and how does that impact the regional pricing.
Speaker Change: Oh, I see I see.
Speaker Change: So thanks again for the questions for the question actually.
Speaker Change: Given the current macro and geopolitical conditions actually we.
Speaker Change: We are increasingly cautious so we don't have a great visibility at the moment, that's how the second half is going to be.
Speaker Change: We expect to have a better picture in Q2.
Speaker Change: <unk>.
Speaker Change: Question is a great one its just that the credit environment does it allow us to see what that is.
Speaker Change: At the moment.
Speaker Change: Okay.
Speaker Change: It will.
Speaker Change: As we model for fiscal 'twenty.
Speaker Change: I was just looking at R&D R&D cost declining as.
Speaker Change: As the project qualification is kind of taper off.
Speaker Change:
Speaker Change: Well I think.
Speaker Change: I would best describe it as probably.
Speaker Change: I mean, that's we don't have a great picture as I mentioned right now how the second half is going to be.
Speaker Change: But at the moment, if I just want to comment what we see at the moment, we definitely don't see it.
Speaker Change: Increasing.
Speaker Change: So I think if you take that position.
Speaker Change: At least stable.
Speaker Change: That would be that would be.
Speaker Change: The best thing I can I can give you a comment.
Speaker Change: And in the past.
Speaker Change: With respect to Opex, we do expect opex to be about 10% of growth.
Speaker Change: Wherever you go forward.
Speaker Change: I'm sorry.
Speaker Change: Right.
Speaker Change: And.
Speaker Change: Generally the call on the qualification side just to make a comment the goal of course is as we complete one set of qualifications start new ones. After those so.
Speaker Change: I agree you know just to supporting and secondly, Eric's comment I think.
Speaker Change: <unk> states.
Speaker Change: Sort of pictures, probably pretty good way to look at the R&D.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: And in terms of.
Speaker Change: Outlook.
Speaker Change: What will you say, where your top two rigs for 2025 is it the macro demand geopolitical tension customer delays.
Speaker Change: Do you want to quantify it.
Speaker Change: Yes, I would say I think.
Speaker Change: Thank you hit them, all but to answer your question of the top two I would say.
Speaker Change: I would say the macroeconomic and geopolitical.
Speaker Change: Okay.
Speaker Change: That's all I had thank you. Thank you guys for taking my questions.
Speaker Change: And good luck of course, thank you guys.
Speaker Change: Hey.
Speaker Change: Thank you.
Todd: Ladies and gentlemen, I'm showing no further questions in the queue I would now like to turn the call back over to Todd for closing remarks.
Todd: Thank you Joanna and thank you everyone for joining us today, we appreciate your interest in photronics.
Todd: Forward to catching up with everyone over the coming days and weeks have a great day.
Todd: Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.
Todd: Thank you. Thank you.
Todd: Alright.
Todd: Sure.
Todd: Okay.
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