Q4 2024 GCT Semiconductor Holding Inc Earnings Call
Okay.
Operator: Thank you for attending GCT Semiconductor Holdings, Inc.'s fourth quarter and four-year 2024 financial results call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.
Good afternoon.
Thank you for attending J C T Semiconductor Holdings, Inc, 's fourth quarter and full year 2024 financial results call.
All lines will be muted during the presentation portion of the call with the opportunity for questions and answers at the end.
Operator: Joining the call today are John Schlaefer, GCT's Chief Executive Officer Annette McChing, CFO, to discuss our fourth quarter and four-year results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward-looking statements that can be found at the end of our earnings press release and also in our Form 10-K that will be filed today, which provides further detail about the risks related to our business.
John Schlafer: Joining the call today are John Schlafer G.
Speaker Change: D C Ts Chief Executive Officer, and Atwood Ching CFO to discuss our fourth quarter and full year results.
John Schlafer: During this call certain statements, we make will be forward looking.
John Schlafer: These statements are subject to risks and uncertainties, including those set forth in all safe Harbor provision for forward looking statements that can be found at the end of our earnings press release and also in our Form 10-K that will be filed today, which provides further detail about the risks related to our business.
Operator: Additionally, except as required by law, we undertake no obligation to update any forward-looking statements.
John Schlafer: Additionally, except as required by law, we undertake no obligation to update any forward looking statement.
Operator: I will now turn the call over to John Schlaefer. Sir, you may begin.
Speaker Change: I will now turn the call over to John Schlafer, Sir you may begin.
John Schlaefer: Thank you and thanks to everyone for joining us today for our fourth quarter and full year 2024 earnings call. In my remarks, I will provide a quick summary of our Q4 financial statements, and Edmund, our CFO, will provide details for our full year 2024 financial disclosure. But mainly, and despite reviewing 2024 financials today, we are mostly focused on what will impact our financial goals going forward and would encourage investors to do so as well. While our 2024 financials were shaped by transitional 4G sales and 5G service revenue. which we expect to remain as revenue sources.
John Schlafer: Thank you and thanks to everyone for joining us today for our fourth quarter and full year of 2024 earnings call.
Speaker Change: In my remarks, I will provide a quick summary of our Q4 financial statements and admin our CFO will provide details for our full year 2024 financial disclosure.
Speaker Change: But mainly and despite reviewing 2020 for financials today, we are mostly focused on what will impact our financial goals going forward. It would encourage investors to do so as well.
Speaker Change: Our 2024 financials were shaped by traditional <unk> sales and service revenues, which we expect to remain as revenue sources. We expect the second half of 2025 and onward to be strongly shaped by five G chipset sales.
John Schlaefer: We expect the second half of 2025 and onward to be strongly shaped by 5G chipset sales. We think of this as almost a binary event for the company. Anyway. More about that in just a minute.
Speaker Change: We think of this as almost a binary event for the company anyway.
Speaker Change: More about that in just a minute, let's begin first with Q4 financials.
John Schlaefer: Let's begin first with Q4 financial. As mentioned before in our last update, the fourth quarter was another transitional quarter for us. on the way to commercial rollout of our 5G chipsets. With that as a background, our net revenues were $1.8 million, which contributes to a gross margin of 32.3%. While our total operating expenses were $7.9 million, we are happy to report that we were able to reduce our net loss to $5 million, which is a 51% reduction compared to Q4 2023. We are very pleased with this as we strive to position GCT for profitable growth in the future, coupled with the expectation of the upcoming 5G sales.
Speaker Change: As mentioned before in our last update the fourth quarter was another transitional quarter for us.
Speaker Change: On the way to commercial rollout of our <unk> chipsets.
Speaker Change: With that as a background, our net revenues were $1.8 million, which contributes to a gross margin of 32, 3%.
While our total operating expenses were $7 9 million. We are happy to report that we were able to reduce our net loss to $5 million, which is a 51% reduction compared to Q4 2023.
Speaker Change: We are very pleased with this as we strive to position <unk> for profitable growth in the future coupled with the expectation of the upcoming <unk> sales ramp.
John Schlaefer: Which brings me finally to the most exciting part, 5G. We are happy to report that we are now at the one yard line when it comes to the sampling of our 5G chipsets. To celebrate this upcoming milestone, we've introduced the 2025 GCT year of 5G program to streamline and focus our efforts on development and mass production of 5G chipsets. Under the program, we will not only commence the availability of the chipset within the first half of 2025 as previously guided, but also take action to accelerate the ongoing announced and unannounced programs with world renowned partners.
Speaker Change: Which brings me finally to the most exciting part by G. We are happy to report that we are now at the one yard line when it comes to the sampling of our Fi chipsets to celebrate this upcoming milestone we've introduced the 2025 GCT <unk> program to streamline and focus our efforts on development and mass.
Speaker Change: <unk> chipsets.
Speaker Change: Under the program, we will not only commenced the availability on the chipset within the first half of 2025 as previously guided but also take action to accelerate the ongoing announced and unannounced programs with world renowned partners Globalstar, the European tier one telco supplier Aramco digital Samsung Kyocera to list just a few.
John Schlaefer: Global Star, the European tier one telco supplier, Aramco Digital, Samsung, and Kyocera to list just a few of the household names that we have previously disclosed. And with 5G use cases and overall market volume now significantly higher than that of 4G and chipset prices at several times that of 4G, it is easy to see why the launch of our 5G chipset will be transformative for the company and even the industry as we hear from our valued research analysts. We're now doubling down on our efforts in 2025. as we will finally be in the position to benefit from the ever-growing demand for high-speed, ubiquitous wireless data communications with the upcoming release and shipment of our 5G chipsets.
Speaker Change: Few of the household names that we have previously disclosed and with five new use cases in overall market volume now significantly higher than that of <unk> and chipset prices at several times that a <unk>. It is easy to see why the launch of our five G. SIB chipset will be transformative for the company and even the industry as we hear from our.
Speaker Change: Valued research analysts, we're now doubling down on our efforts in 2025.
Speaker Change: We will finally be in a position to benefit from the ever growing demand for high speed ubiquitous wireless data communications with the upcoming release and shipment of our Fi chipsets.
John Schlaefer: Additionally, under the program, and as mentioned earlier, we plan to further align the company's balance sheet with the expected upcoming ramp in sales. Already now, we have made progress in the reduction of debt and extending debt maturity.
Speaker Change: Additionally, under the program and as mentioned earlier, we plan to further align the company's balance sheet with the expected upcoming ramp in sales.
Speaker Change: Already now we have made progress in the reduction of debt and extending debt maturities.
John Schlaefer: Edmund will have more to say about that in a minute, but before I turn the microphone over to him, I will want to stress again how pivotal this moment is for us here at GCC. Once the 5G chipset is available and finds its way into our customers' products, we expect to have a very different conversation in our future earnings calls.
Speaker Change: Edman will have more to say about that in a minute, but before I turn the microphone over to him I would want to stress again, how pivotal. This moment is for US here at GCT wants to 50 chipset is available and finds its way into our customers' products. We expect to have a very different conversation in our future earnings calls.
Edmund McChing: And with that... Thank you, John.
Edmond: With that Edmond.
Edmund McChing: As John said, we have been managing our capital allocation and cash flow tightly, with priorities given to funding the development of the 5G chipset, and further strengthening our balance sheet. We managed to reduce our debt by close to 50% during 2024. With that positioned us better for our future profitable growth.
Speaker Change: Thank you John as John said, we have been managing our capital allocation and Kestrel type B.
Speaker Change: With priority given to funding the development of the <unk> chipset and further strengthening our balance sheet, we managed to reduce our debt by close to 50% during 2024 with that.
Speaker Change: Petition as better for our future profitable growth.
Edmund McChing: We also remain in advanced discussion with potential investors to fill some of our near-term capital funding needs that aim at supporting us to bridge to the second half of the year.
Speaker Change: We also remain in advanced discussions with potential investors.
Speaker Change: Phil.
Phil: Near term capital funding needs that aimed at supporting us to bridge to the second half of the year.
Edmund McChing: Lastly, when comparing to our full-year results, please keep in mind that some of the line items are influenced by our status now as a public company versus previously when we were a private company.
Phil: Lastly, when comparing to our full year results. Please keep in mind that some of the line items.
Phil: By our established now as a public company with its previously when we were a private company.
Edmund McChing: Turning now to our full year 2024 financial results, further details can be found in the 10-K that will be on fire with the SEC. Net revenues decreased by $6.9 million or 43% from $16 million for the year ended December 31, 2023 to $9.1 million for the year ended December 31, 2024. The decrease was due to a decrease of $6.2 million in product sales and a slightly decrease of $0.7 million in service revenue. The decrease in product sales was primarily driven by a reduction of 5 million of LTE product sales and a decrease of 1.2 million in LTE platform sales as we transition to 5G.
Phil: Turning now to our full year 2024 financial results further details can be found in the 10-K that will be a buyer.
Phil: Sir.
Phil: Net revenues decreased by $6 9 million or 43% from $15 million for the year ended December 31, 2023 to $9 1 million for the year ended December 31 2024.
Phil: The decrease was due to a decrease of $6 2 million in product sales.
Phil: Slight decrease of <unk> 7 million.
Phil: Service revenue.
Phil: Decrease in product sales was primarily driven by a reduction of $5 billion of T E product there.
Phil: The decrease of $1 2 billion in LTE platform, there as we transition through five G.
Edmund McChing: Again, when modeling our expected upcoming 5G revenue, we will be benefited drastically in higher 5G chipset market prices. Cost of net revenues decreased by 5.2 million or 56% from 9.3 million for the year ended December 31st, 2023 to 4.1 million for the year ended December 31st, 2024. driven primarily by the reduction of our product sales. Our gross margins increased to 56% for the year-end of December 31st, 2024, compared to 42% for the year-end of December 31st, 2023. primarily due to changes in the product and revenue offerings mix. Specifically, we increased the share of reference. platform sales and generated higher margins from our service offering.
Phil: Again, we're modeling our expected.
Phil: Upcoming <unk> revenue, we will be benefited drastically in higher five chipset market crisis.
Phil: Cost of net revenues decreased by $5 2 billion or 56% from $9 3 billion for the year ended December 31st 2023 to $4 1 million for the year ended December 31 2024.
Phil: Given primarily by the reduction of our product sales.
Phil: Our gross margin increased to 56% for the year ended December 31, 2024 compared to 42% for the year ended December 31 2003.
Phil: Three.
Phil: Primarily due to changes in their product and revenue offering mix.
Phil: Typically we increased the share of reference.
Phil: <unk> product sales and generate higher margins from our service offerings.
Edmund McChing: during the year ended December 31st, 2024. In addition, this reference platform sales will help our customers accelerate the integration and adoption of our 5G chips in their respective product development activities once our 5G chips are launched.
Phil: During the year ended December 31 2024.
Phil: In addition, this reference platform sales, we will help our customers.
Phil: Right the integration and adoption of our <unk> chips in their respective product development activities once our pipe <unk> chips alone.
Edmund McChing: research and development expenses increased by 6.6 million or 62 percent from 10.7 million for the year end of December 31st, 2023 to 17.3 million for the year end of December 31st, 2024 primarily in connection with our development project. This increase reflects our increased 5G development program activity during 2024 and was primarily due to a 4.1 million increase in research and development expenses mainly related to professional services provided by our related to the design of 5G chip product. a $2.5 million increase in development expenses related to our new 5G chip products, a $0.5 million increase in stock-based compensation expense due to issuance and vesting of share-based awards, and a $0.4 million increase in allocated overhead.
Phil: Research and development expenses increased by $6 6 million or 62% from $10 7 million for the year ended December 31 2023.
Phil: $17 3 million for the year ended December 31 2034.
Phil: Primarily in connection with our development projects.
Phil: This increase reflects our increased development program activity during 2024 and was primarily due to a $4 1 billion increase in research and development expenses.
Phil: Mainly related to professional services provider by Alpha.
Phil: Related to the design of part D chip products.
Phil: Cool.
Phil: The increase in development expenses related to our new chip products.
Phil: 0.5.
Phil: The increase in stock based compensation expense due to issuance and vesting of share based awards and a <unk> 4 million increase in allocated overhead.
Edmund McChing: partially offset by a $0.2 million decrease in pre-production costs and a $0.2 million reduction in support and maintenance.
Phil: Partially offset by a <unk> 2 million decrease E&P production cost and a <unk> 2 million reduction in support and maintenance.
Edmund McChing: Sales and marketing expenses increased by $0.7 million, or 23%, from $3.2 million for the year ended December 31, 2023, to $3.9 million for the year ended December 31, 2024. This change was primarily due to a $0.2 million increase in temporary services and a $0.1 million increase in personnel related costs, allocations, travel and stock-based compensation.
Phil: Sales and marketing expenses increased by $4 7 million.
Phil: Or 23% from $3 2 billion for the year ended December 31, 2033 to $3 9 million for the year ended December 31 2024.
Phil: This change was primarily due to a $2 2 million increase in temporary services as a <unk> 1 million increase in personnel related cost allocations travel and stock based compensation.
Edmund McChing: General and administrative expenses increased by $3.4 million, or 46%, from $7.4 million for the year ended December 31, 2023, to $10.8 million for the year ended December 31, 2024. The change was primarily due to a $2 million increase in stock-based compensation related to the issuance and vesting of stock-based awards, a $0.9 million increase in professional expenses related to the public company operations, a $0.7 million increase in temporary services, and a $0.5 million increase in personnel costs. Partially offset by a $0.5 million decrease in allocations and a $0.4 million decrease in other expenses.
Phil: General and administrative expenses increased by $3 4 million or 46% from $7 4 billion for the year ended December 31, 2023 to <unk> 8 million for the year ended December 31 2024.
Phil: The change was primarily due to a $2 million increase in stock based compensation related to the issuance and Westin.
Phil: GAAP base.
Phil: <unk>.
A $4 9 million the increase in professional expenses related to the appropriate company operations <unk> 7 million increase in temporary services and a $5 million increase in personnel costs.
Phil: Partially offset by a <unk> 5 million decrease in allocation and the sales force.
Phil: The decrease in other expenses.
Edmund McChing: We've closed the year with cash and cash equivalent of $1.4 million. We also had net accounts receivable of $5.7 million and net inventory of $3 million, which we expect to sell in the coming quarter.
Phil: Close the year with cash and cash equivalents of $1 4 billion.
Phil: We also had net accounts receivable of $5 7 million and net inventory of $3 million.
Phil: Which we expect to sell in the coming quarters.
Edmund McChing: in 2024, we managed to reduce our debt from $79.9 million at the beginning of the year to $42.6 million at the end of 2024. with the support of our creditors, we are able to roll over the remaining debt from 2024 to 2025. which helps to align maturity date better with our expected realm of sales in 5G chipsets.
Phil: In 2024, we managed to reduce our debt from seven nine.
Phil: $9 9 million at the beginning of the year to $42 6 million at the end of 2024.
Phil: With the support of our creditors.
Phil: To roll over the remaining debt from 2024 to 2025.
Phil: Which helps to align maturity date.
Phil: With our expected ramp of sales in <unk> chipset.
Edmund McChing: In addition to the current e-lock with B Raleigh and to further strengthen our financial position. We are in advanced discussion with potential investors to fill some of our near-term capital funding needs that will help us to bridge to the second half of the year.
Phil: In addition to the current E block with B Riley and to further strengthen our financial position.
Phil: We are in advanced discussions with potential investors.
Phil: Some of our near term capital funding needs that will help us to bridge to the second half of the year.
John Schlaefer: With this, I will turn it back over to John. In closing, we are thrilled about what is ahead of us. With the announcement of our 2025 GCT year 5G program, we are putting the product, customer and financial building blocks in place for substantial growth based on our 5G chipset launch and are excited about the impact of that for the company and for our stock as we value all of our shareholders.
John Schlafer: With that I will turn it back over to John.
John Schlafer: Thanks Edmund in closing we are thrilled about what is ahead of us with the announcement of our 2025 GCT <unk> program, we are putting the product customer and financial building blocks in place for substantial growth based on our <unk> chipset launch.
John Schlafer: We are excited about the impact of that for the company and for our stock as we value all of our shareholders.
John Schlaefer: Finally, I would like to thank our employees, partners, and our customers for their continued efforts and dedication to the company, which ultimately drives our success as an organization. Together, we're focused on driving innovation, supporting the global transition to 5G solutions, and delivering strong, profitable growth. We are entering a new phase here at GCT and are thrilled to have you with us.
John Schlafer: Finally, I would like to thank our employees partners and our customers for their continued efforts and dedication to the company, which ultimately drives our success as an organization together, we're focused on driving innovation supporting the global transition to <unk> solutions and delivering strong profitable growth. We are entering a new phase here at GCT and are thrilled to have you with.
Operator: I will now turn the call back over to the operator who will assist us in taking your questions. Thank you.
John Schlafer: I will now turn the call back over to the operator, who will assist us in taking your questions.
John Schlafer: Thank you.
Operator: Ladies and gentlemen, to ask a question, please press star 1-1 on your telephone, then wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster.
Speaker Change: Ladies and gentlemen 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, please standby, while we compile the Q&A roster.
Craig Ellis: Our first question comes from the line of Craig Ellis with B Rally Securities. Your line is open. Yeah, thanks for taking the question, guys.
Speaker Change: Our first question comes from the line of Craig Ellis with B Riley Securities. Your line is open.
Craig Ellis: Yes. Thanks for taking my question guys I just wanted to start with a clarification on.
Craig Ellis: I just wanted to start with a clarification on the fourth quarter of 24 before talking about 5G's potential in 2025.
Craig Ellis: The fourth quarter of 'twenty port before talking about our apologies.
Craig Ellis: Edmund, can you help us with a breakout, even if more qualitative than quantitative, on product revenues, products versus platform sales, given the strength of platform sales in the prior quarter, and then any indication on the mix of services in that quarter?
Craig Ellis: <unk> potential in 2025.
Craig Ellis: And then can you help us with our breakout even more qualitative than quantitative on product revenues.
Craig Ellis: Products versus platforms sales given the strength of platform sales in the prior quarter and then.
Any indication on the mix of services in the quarter.
Edmund McChing: In Q4, we do not have any platform sales. So all the $660,000 in revenue for products are primarily coming from our cheap sales in our 4G LTE. Got it.
Craig Ellis: Great.
Craig Ellis: Q4, we do not have any platform sales so all of the 660000.
Craig Ellis: With you for our products.
Randy: Randy coming from.
Randy: Chip sales in our <unk> LTE chips.
Craig Ellis: And then, guys, looking ahead to 2025, you talked about your enthusiasm for 5G's ramp. We'd love to get more color on how you see things playing out. You've got a big partnership with Ramco Digital. Do you expect that to contribute? And what does that ramp sign wave look like?
Speaker Change: Got it and then guidance looking ahead to 2025.
Randy: <unk> talked about your enthusiasm for <unk> ramp.
Randy: Love to get more color on how you see things playing out you've got.
Randy: A big partnership with Ram could digital do you expect that to contribute and what does that ramp time right. We're quiet Ken and then you.
Craig Ellis: And then you announced other partnerships, Kyocera, Global Star, how do we think about the potential contribution from from those partnerships or other partnerships that you may be unable to press release at this time.
Speaker Change: Announced other partnerships <unk> Sarah.
Speaker Change: Globalstar, how do we think about the potential contribution from those partnerships or other partnerships that you may be unable to.
John Schlaefer: Thank you. So, um... We have a number of Alpha customers that we've been working with. we will be supporting them and you've named already, in the Ramco situations, it's a little... a little further out as their they're working on their infrastructure right now. that to be probably. and Bob G. But in the 2025. time frame, it'll be the partners that we've already... talked about initially. FWA product. Hotspot, as well as... version of or previous 4G customers also converting to 5G and continuing with their products. Got it.
Speaker Change: Press release at this time thank you.
Greg: Yes, yes, thanks for the question Greg.
Speaker Change: So.
Speaker Change: So we have a number of the.
Speaker Change: On behalf of customers that we've been working with so we will be supporting them and you've you've named.
Speaker Change: You've named him already.
Speaker Change: The.
Speaker Change: And the Ram co situations a little.
Speaker Change: A little further out there.
Speaker Change: They are working on their infrastructure right now so we would expect that to be probably more of a 2026.
Speaker Change: For <unk>.
Speaker Change: In.
Speaker Change: Into 2025.
Speaker Change: Timeframe it'll be.
The partners that we've already.
Speaker Change: You talked about initially.
Speaker Change: Launching MW.
Speaker Change: <unk> products.
Speaker Change: Mobile hotspot as well as.
Speaker Change: On the conversion of existing or previous <unk> customers also converting to <unk>.
Speaker Change: Anyway.
Speaker Change: With their product launches.
Craig Ellis: And then John, one more for you before I switch to Edmund with a follow up on on the Aramco digital related ramp point. I think you've said in the past that you'd expect 4G revenues to persist for numerous years as 5G ramps and one of the messages today is that we're going to be doubling down on our 5G ramp. The question, do you still have that same multi-year, long-tailed 4G revenue ramp expectation and if so, how do we expect that contour to lift this year? Yeah, so we do. We do expect 4G will continue. Like we've said before, it's really not a large contributor to our growth, but it will be a steady...
Speaker Change: Got it and then John one more for you before I switch to admin with Apollo up bonds.
Speaker Change: The Ram credential related ramp point.
Speaker Change: Yes.
Speaker Change: I think you've said in the past that you would expect towards fee revenues to persist for numerous years is five <unk>.
Speaker Change: And what are the messages today is that we're going to be doubling down on our fab to ramp. The question do you still have that same multiyear long tailed torchy revenue ramp expectation and if so how do we expect that contour to look this year.
Speaker Change: So we do.
Speaker Change: We do.
Speaker Change: At <unk>, we will continue.
Speaker Change: And like we've like we've said before it's really not.
Speaker Change: A large contributor to our growth, but it will be steady.
John Schlaefer: have a new source for us. 2025, and and 2026. And I think, as we've pointed out before... product that we'll be launching. that will be supported. industrial application, satellite application. He had an... are in the last. last quarter, so that... product has a lot of interest. satellite application. We'll continue to see our... Legacy 4G products as well as that. for G Product. and beyond.
Speaker Change: Revenue source for us through 2025.
Speaker Change: In 2026, and I think as we've pointed out before.
Speaker Change: We have one additional.
Speaker Change: Product that we'll be launching.
Speaker Change: The 74, three so that will be supporting.
Speaker Change: Industrial application satellite application I think.
Speaker Change: We had an announcement with them.
Speaker Change: Globalstar and the last.
Speaker Change: Hello.
Speaker Change: Last quarter so that.
Speaker Change: That.
Speaker Change: Product has a lot of interest for satellite applications.
Speaker Change: And so we will continue to see.
Speaker Change: Okay.
Speaker Change: Our legacy <unk> products as well as that.
Speaker Change: New <unk> products into the.
2026 and beyond.
Craig Ellis: Thank you.
Craig Ellis: So, clearly, not only do you have 5G product momentum going, but you remain active with 4G.
Speaker Change: Thank you. So so clearly not only do you have <unk> product momentum growing but youre Raymond remain.
Craig Ellis: Edmond, I'll switch it over to you. So, very good progress on cash burn in the quarter, down to 5 million. The question is, as you look ahead, and I know you don't provide quantitative guidance for the first quarter, but can you provide some color on how you'd expect cash burn to perform? And if there was any other color on other dynamics in the first quarter, even a qualitative, that would be helpful. Yeah, I was just saying... Very good question, Clayton. If you look into Q4 versus our Q3 year-to-date last year, You can tell that in Q4, we managed our...
Speaker Change: We remain active.
Speaker Change: And then I'll switch it over three years, so very good progress on cash burn in the quarter down to $5 million.
Speaker Change: The question is as you look ahead and I know you don't provide.
Speaker Change: Quantitative guidance for the first quarter.
Speaker Change: Can you provide some color on how you would expect.
Speaker Change: Cash burn to perform and if there was any other color on.
Speaker Change: In other.
Speaker Change: Dynamics in the first quarter, even a qualitative that would be helpful.
Speaker Change: Yes.
Speaker Change: Very good question.
Speaker Change: If you look into Q4.
Speaker Change: Versus our Q3 year to date last year.
Speaker Change: Can tell that in Q4, we manage our cash burn.
Speaker Change: Really I would say.
Speaker Change: From that sense.
Speaker Change: I'm really focusing on.
Speaker Change: Okay, the resources to the FRG chip development.
Edmund McChing: also. Focusing on our debt If you're looking at Q4, just for the quarter alone, you're looking at the changes in operating assets and liabilities, including... There is a net cash burn for the quarter of... So we expect this to be continued. may be a very similar level. Q1 this year, and until probably Q2 when we see... like a shipment of samples of a 5G chip, and we can see the ramp-up in the second half. Got it.
Speaker Change: Also.
Speaker Change: Focusing on our debt repayment from that sense.
Speaker Change: If you're looking at.
Speaker Change: Q4, just for the quarter.
Speaker Change: We're looking at changes in operating.
Speaker Change: T J.
Speaker Change: <unk>.
Speaker Change: Operating activities.
Speaker Change: Net cash burn for the quarter about $2 $3 billion. So we expect this to be continually maybe.
Speaker Change: Maybe it's a very similar level in <unk>.
Speaker Change: Q1 this year.
Speaker Change: Until probably Q2.
Speaker Change: C.
Speaker Change: Shipment of samples <unk> chip and we can see that ramp up in the second half two.
Speaker Change: 2009.
Speaker Change: 2005 this year.
Edmund McChing: And then the question that's more longer term, I think we've always looked at the potential for the company to be adjusted EBITDA breakeven at around $25 million in sales. Given the progress you're making on cash burn, is that still the right number or you structurally lowered that number and given the business potential to get to an adjusted EBITDA positive number at something lower than the $20 million revenue? Thank you. That would still be the number that we are modeling at this point of time, especially with the gross margin target that we are looking at. It seems to be that remains Got it.
Speaker Change: Got it and then my question.
Speaker Change: Thats more longer term I think we've always looked at the potential for the company to be adjusted EBITDA breakeven at around $25 million in sales given the progress you're making on cash burn is that still the right number or do you structurally lowered that number in and given the business potential.
Speaker Change: To get to it.
Speaker Change: Adjusted EBITDA positive number.
Speaker Change: Attempting lower than the $20 million revenue. Thank you.
Speaker Change: That would still be the number that we are modeling.
Speaker Change: Point of time, especially with the gross margin target that we have.
Speaker Change: Looking at it.
Speaker Change: It seems to be that remains to be done.
Craig Ellis: Thanks for the help, guys. Thank you.
Speaker Change: Got it thanks for the help guys.
Speaker Change: Thank you.
Operator: As a reminder, ladies and gentlemen, that's star 11 to ask the question. I'm showing no further questions in the queue.
Speaker Change: As a reminder, ladies and gentlemen that star one to ask the question.
Speaker Change: I'm showing no further questions in the queue.
Operator: Thank you for joining us, and that concludes our fourth quarter and four-year 2024 conference call. A replay will be available for a limited time on our website later today.
Speaker Change: Thank you for joining us and that concludes our fourth quarter and full year 2024 conference call.
Speaker Change: A replay will be available for a limited time on our website. Later today you may now disconnect.
Operator: You may now disconnect.
Speaker Change: Okay.
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Speaker Change: Thank you.
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Speaker Change: [music].
Speaker Change: Bill.
Speaker Change: Dan.
Speaker Change: [music].