Q3 2025 Indie Semiconductor Inc Earnings Call

Speaker #3: Greetings and welcome to Indy S Q3 2025 Earnings Call . At this time , all participants are in a listen only mode . A brief question and answer session will follow the formal presentation .

Speaker #3: If anyone should require operator assistance during the conference , please press star and then zero on your telephone keypad as a reminder , this conference is being recorded .

Speaker #3: It is now my pleasure to reduce your host Ashish Gupta Investor Relations . Thank you . You may begin .

Speaker #4: Thank you . Operator . Good afternoon . Welcome to Indy . Third quarter 2020 Earnings call . Joining me today are Donald McClymont in the CEO and co-founder Mark Tyndall EVP of Corporate Development and Investor Relations .

Speaker #4: And Nicky Wu . In these new CFO whose appointment was announced earlier today . Don will provide opening remarks and discuss business highlights .

Speaker #4: Mark will then provide a review of Indies Q3 results in Q4 . Outlook . Please note that we'll be making forward looking statements based on current expectations and assumptions , which are subject to risks and uncertainties .

Speaker #4: These statements reflect our views only as of today and should not be relied upon as representative of views as of any subsequent date .

Speaker #4: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For material risks and other important factors that could affect our financial results.

Speaker #4: Please review our risk factors and our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as supplemented by our Quarterly Reports on Form 10-Q, as well as other public filings with the SEC.

Speaker #4: Finally , the results and guidance discussed today are based on consolidated non-GAAP financial measures such as non-GAAP reports net loss per share . For a complete reconciliation to GAAP and the definition of non-GAAP reconciling items , please see our Q3 earnings press release , which was issued in advance of this call , can be found on our website at .

Speaker #4: I'll now turn the call over to Donald .

Speaker #5: Thanks , Ashish , and welcome everybody . Firstly , I'm very pleased to announce that Nike Wu has been appointed Chief Financial Officer for Indy , effective immediately .

Speaker #5: Nike has been with India for the past four and a half years , and has demonstrated exceptional leadership , integrity and execution skills within our finance organization , especially during the past months in a period where we successfully executed on multiple complex transactions .

Speaker #5: Beginning her career in PwC's assurance practice , she has built an exemplary track record in finance , holding various senior leadership roles in financial and SEC reporting at Calamp , Westfield and Real de .

Speaker #5: In finance , team consistently demonstrates seamless collaboration and strong performance , combining expertise and focus to achieve desired business results and goals . Now , elevation to Chief Financial Officer is a natural progression in her leadership journey at Indy , working alongside our capable and dedicated finance team in these financial foundation will continue to strengthen during the next months , you will have the opportunity to meet Nike at Rocco's and Investor events .

Speaker #5: Let me now review our financial performance within the context of the overall automotive market . Before discussing Indy's key business achievements . Starting with market dynamics , we see an automotive market trending slightly better than feared across almost all regions , with China representing Indy's strongest performance during the quarter .

Speaker #5: Automotive market analysts are also maintaining a positive outlook for growth trends , with 2026 production now expected to increase by 0.46% from 2025 levels to approximately 91 million vehicles .

Speaker #5: This is further underpinned by the continued increase of semiconductor devices and sensor content per vehicle to support the upsurge in Adas and automated driver safety , and feature adoption , which we increasingly see across our customer base .

Speaker #5: For Indy , we achieved third quarter total revenue of $53.7 million , in line with our outlook , but representing a solid quarter over quarter performance with growth above the market .

Speaker #5: We have also just completed the annual review of our strategic backlog , which remains a very important and strong indicator for the future potential of our business .

Speaker #5: Looking out over the next ten years , recall last year's backlog was $7.1 billion . This year we have expanded into several adjacent markets , including quantum computing and quantum communications , and also into humanoid robotics , where several of our products are relevant , particularly and initially , our vision processors .

Speaker #5: We now have content at leading robotics providers , for AI and unity , who seamlessly use our automotive products for their application . During the last 12 months , due entirely to industry turbulence , we suffered some program cancellations particularly , and although we are still heavily engaged at the customer , we made the decision to remove focus business from the calculation as upheaval at the OEM end customer has made the timing of revenue realization less clear .

Speaker #5: However , these cancellations were more than offset by new business wins that we achieved in the same period . The strategic backlog is now at 7.4 billion , compared to 7.1 billion as of a year ago .

Speaker #5: However , if we exclude Wuxi , which represented $1.3 billion , the resultant strategic backlog will be 6.1 billion . The composition of our backlog has strengthened materially due to the higher gross margin product mix following the divestment of Wuxi Adas and optical products will drive significantly higher gross margin profile going forward .

Speaker #5: Let me now turn to our recent business progress and key achievements , beginning with radar in late October . Our tier one radar partner , a leader in the market for whom we developed our 77GHz chipset , publicly launched the next generation Gen8 radar solution to power the future Adas for their global OEM customers .

Speaker #5: The Gen eight radar is their primary offering on a go forward basis . This represents a momentous milestone in the program . Our differentiated chipset enables the tier one to deliver industry leading performance across multiple dimensions , long range detection beyond 300m with ultrafine 4D angular resolution , enhanced capability and close range scenarios for applications such as automated parking , frontal automatic emergency braking and significantly expanded field of view enabling new driving scenarios like autopilot in complex urban environments .

Speaker #5: The solution demonstrates superior object detection and classification across a broad range of parking and driving scenarios , with the tier one noting a 30% performance improvement over their prior generation .

Speaker #5: Final validation in real world environments is concluding as we prepare for production shipments , computer vision capabilities within the automotive market continue to be a differentiator for Adas and automated safety , and a key driver for Indy .

Speaker #5: We are seeing additional penetration of our vision solutions among key customers with our industry leading Indy 880 advanced camera Processor during the quarter , we secured a design win for image signal processing for multi-camera operation in a leading self-driving robotaxi OEM in North America .

Speaker #5: For deployment in 2026 . Additionally , we have captured multiple new design wins with leading electric vehicle manufacturers in China spanning multiple applications , according to S&P Global Mobility .

Speaker #5: China's automotive market continues to lead the global market in terms of growth , contribution and regional dominance . China now represents more than one third of the worldwide motor vehicle production , where India's advanced Adas solutions are rapidly gaining adoption from our power group , our ten watt G 2.0 wireless charging platform continues to grow in broader market adoption .

Speaker #5: Highlights include start of production scheduled at Ford for Q1 2026 . On the first platform , with multiple subsequent vehicles expected to follow .

Speaker #5: We secured design wins at India's largest car manufacturer , initially for three vehicle models with additional awards also expected to be forthcoming . In addition , we saw production start at an Indian joint venture of one of Europe's top OEMs looking further out and rounding out the portfolio , we are now actively promoting our key 2.0 , 15 and 25 watt solutions , which are gaining very positive market traction .

Speaker #5: We have also provided the first custom samples of a connectivity IC to a leading electric vehicle manufacturer in North America , where production is expected to start in the first half of 2026 .

Speaker #5: Our momentum with photonics continues with several highlights , including a design win which will include an NRE payment for our LiDAR application and a design win in the drone segment for our lead product , the operational alignment establishing the new photonic business unit has resulted in meaningful impact on our sales funnel for applications outside of automotive .

Speaker #5: While revenue is not reflected in our short term results , we are expecting strong growth with minimal additional impact on operating expenses . Last quarter , India announced two additional new distributed feedback , or DFB laser products .

Speaker #5: Complementing our LL Mu laser launched earlier this year . The market response has been compelling with exceptional stability for quantum key distribution and quantum computing applications .

Speaker #5: This technology leadership in photonics generated through automotive lidar development , is exposing Indy to exciting new customers across quantum and industrial sensing markets .

Speaker #5: I'll now turn the call over to Mark for a review of our Q3 results and Q4 outlook .

Speaker #6: Thank you . Donald , and good afternoon , everyone . In this third quarter , revenue was $53.7 million with non-GAAP gross margin of 49.6% , in line with our outlook , non-GAAP operating expenses totaled $37.9 million .

Speaker #6: Consistent with our outlook as a result , our third quarter non-GAAP operating loss was $11.3 million , compared to 14.5 million last quarter and $16.8 million a year ago .

Speaker #6: Demonstrating our continued progress towards achieving profitability with net interest expense of $2 million . Our net loss was $13.3 million , and loss per share was $0.07 on a base of 217.4 million shares .

Speaker #6: Turning to the balance sheet , we exited the quarter with total cash , including restricted cash of $171.2 million , down 31.7 million from $202.9 million in the second quarter .

Speaker #6: The reduction in cash includes $17.7 million paid in connection with a recent M&A transaction . Turning to the M&A transaction on September 26th , 2025 , ahead of the original schedule , Indy closed the acquisition of a 3D , a company based in Vienna , Austria , specializing in advanced AI perception software algorithms for automotive in-cabin sensing and Adas .

Speaker #6: Their expertise in software combines perfectly with our vision processor , SoC portfolio , adding a software royalty to the offering together . We are already engaging with major tier one and OEM customers where we expect we can secure an announced the first awards in the coming months .

Speaker #6: Additionally , on October 28th , we announced that Indy entered into an asset purchase agreement with United Fade Out Engineering , a publicly listed company in China to sell our entire outstanding equity interest in Indy Micro for gross proceeds of approximately $135 million , payable in cash , net of applicable local taxes of roughly 10% .

Speaker #6: Upon closing . However , I do want to set realistic expectations regarding the closing timeline . The transaction is subject to customary closing conditions for a transaction of this type , including shareholder approval from United Faith and receipt of all required regulatory approvals in China , including both Shenzhen Stock Exchange and CSC .

Speaker #6: Based on precedent transactions and discussions with our advisors , we expect closing in late 2026 toward the exact timing will be determined by the regulatory approval process between now and closing .

Speaker #6: Once it is determined that the transaction meets the requisite criteria under applicable accounting guidance , the Wushi operation will be reported as discontinued operations within our consolidated financial statements .

Speaker #6: Further , the sale of Wushi will improve our margin profile and lower our quarterly breakeven threshold while simultaneously strengthening our balance sheet while we exit our equity position in Wushi , China remains an important market for Indy , supported by our strong independent and well-established sales channel , including local , regional support .

Speaker #6: Moving to the outlook for the fourth quarter of 2025 , with ever increasing demand in the semiconductor market driven by AI , we are beginning to see some short term disruptions to the back end of our manufacturing flow .

Speaker #6: Specifically , there are shortages in the supply of packaged substrates , which will impact our ability to deliver the full demand for Q4 .

Speaker #6: In spite of that , we expect to continue to grow and deliver revenue within the range of 54 to 60 million , or $57 million at the midpoint , with an estimated shortfall of about 5 million due to the substrate shortage .

Speaker #6: We expect this supply issue to be resolved during Q1 2026 based on the anticipated product mix , we expect our non-GAAP gross margin to be in the range of 47% , driven by unfavorable product mix and margin pressure on the whiskey business .

Speaker #6: We continue the execution of certain targeted initiatives aimed at reducing operating expenses and accelerating our path to profitability . I'm pleased to report that we remain on track progress in Q3 has been encouraging and is consistent with our communicated targets .

Speaker #6: We continue to expect to achieve our stated objectives within the anticipated time frame . This reflects strong execution across the organization and continued commitment to operational discipline and long term value creation .

Speaker #6: However , as we now move closer to the production ramp of radar and some of our large envision design wins , our customers are demanding and enhanced .

Speaker #6: Second sourcing strategy with requirements for production localization . This is requiring additional OpEx investment in the next quarter to qualify these products and fabs and pest houses outside of Taiwan and China .

Speaker #6: Taking these into account for Q4 , we now expect our non-GAAP opex to be 36.5 million , down 1.5 million from Q3 below the line .

Speaker #6: We expect net expense of approximately $2.2 million with no tax expenses . Assuming the midpoint of the revenue ranges and with a base of 220 million shares , we expect a $0.07 net loss per share from a financial perspective , with our strong focus on operating expenses , further optimization of our capital structure and our solid balance sheet , including anticipated proceeds from the sale of Wuxi in these well-positioned to continue developing differentiated products for the automotive , Adas and adjacent industrial markets .

Speaker #6: This balanced approach will support our return to strong and profitable growth as design wins ramp as we enter 2026. With that, I'll turn the call back to Donald for closing remarks.

Speaker #5: Thanks , Mark . Our core business is solid and growing , as evidenced by our third quarter results and positive outlook . Radar and vision programs remain on track , as evidenced by our tier one partners recent release of their Advanced Radar product and the fundamental trend of increasing semiconductor content in vehicles continues unabated with the addition of new high growth markets such as Quantum and Robotics .

Speaker #5: Indy's technology leadership and expanding product portfolio ensure we are well positioned to drive continued growth . No other semiconductor company has a product portfolio as advanced as Indies to meet the diverse needs of these markets .

Speaker #5: That concludes our prepared remarks . Operator please open the line for questions .

Speaker #3: Thank you . We will now be conducting a question and answer session . If you would like to ask a question , please press star and then one on your telephone keypad .

Speaker #3: A confirmation tone will indicate your line is in the question queue. You may press star, then two. If you would like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. The first question we have is from Cody Acree of the Benchmark Company.

Speaker #3: Please go ahead .

Speaker #7: Yeah . Thanks , guys , for taking my questions . Maybe if we can dig into your supply shortages a bit , can you maybe just explain how this happened , when this happened , when you started to see this and when does this unwind ?

Speaker #7: And do you get this revenue back when supply starts to become available?

Speaker #5: I mean , going in reverse order for sure . We get the revenue back . It's just an inconvenience at the moment because of the short term shortage .

Speaker #5: It's something that that came fairly suddenly to the market . It wasn't something that we were able to anticipate . It was kind of a shock to the to the market .

Speaker #5: There are several other companies out there who have been placed in the same situation . If you if you look at the the reports of some of the other companies in Intel , in particular , they called us out a few weeks ago .

Speaker #5: So , you know , it's something that we accept , we'll expect will resolve in Q1 . And it's just basically a short term thing that we've got to work through .

Speaker #7: And can you talk about your gross margin declines into the into Q4 ? You mentioned woozy . What's happening ? There sequentially ?

Speaker #5: It's just mixed , really . The products that we sell that use this particular kind of package are very high margin . And so because we have a small shortfall in the market that we can't deliver to , that's that's the biggest impact on the on the margin mix .

Speaker #5: And then because of that , she is a larger percentage of the of the roll up . And causes the margin percentage decay .

Speaker #7: Excellent . And then lastly on the radar side , can you just talk about what's happened in the last 90 days and what's your visibility and what is this ramp look like as we push into next year ?

Speaker #5: Yeah , I mean it's it's been a whirlwind for us . We've had so much activity in the last 90 days . It caused us to accelerate our plans to bring up the second sourcing procedures for for what we're bringing into into play here .

Speaker #5: It costs us a little bit of short term opex in the in the short run . But it's it's a great problem to have .

Speaker #5: We're having to prepare to deploy into multiple geographical regions with multiple different supply chain requirements . Basically China for China , not China for not China .

Speaker #5: And the sort of level of support and effort that we're having to put into this now is enormous . The fact that the customer also announced the product is a is a ringing endorsement of of where we are in the process .

Speaker #5: These things don't go public unless there's a high degree of certainty that that stuff's going to happen . So it's been it's been a crazy 90 days .

Speaker #5: I will say , Cody , as we've as we've gone through the process of of launching now .

Speaker #7: Any thoughts on next year's contribution ?

Speaker #5: I mean , you know , I think we're not really going to make any change to , to the , our outlook on on life for 26 .

Speaker #5: We you know , we still feel that there could be a very aggressive ramp in 26 that together coupled with our vision processors where we're we're preparing again as I said , because of the supply chain issues that we're having to address , we're having we're preparing to to prepare for a big ramp .

Speaker #5: We're already in the manufacturing process . So so we we feel that we've got a lot of good stuff coming for 26 .

Speaker #7: That's great . Thanks . You guys .

Speaker #3: The next question we have is from Suji de Silva of Roth Capital Partners . Please go ahead .

Speaker #8: Hi Don , and welcome to the best of luck in the new role . So the the products you've been talking about for the quantum laser market , can you talk about if there's any visibility to to to design wins or is that still in the kind of development phase ?

Speaker #8: Any comment there on timing of when .

Speaker #9: That . No , actually , no .

Speaker #5: I mean , we've actually been shipping production already . I mean , the year to date , the projection for the whole year is probably a little bit less than $1 million worth of business , given that it didn't start at the beginning of the year , it started late Q2 really , it's it's accelerating very rapidly .

Speaker #5: And I think if you look at the reports of the the public quantum guys , you're seeing them raising their numbers . So it's a new market for us .

Speaker #5: We're learning as we go . But it does seem very exciting , very dynamic . It's quite a fragmented market . So we have to cover quite a lot of bases and customers and so forth .

Speaker #5: But certainly, the deployments can go very quickly to ship parts off the shelf, basically off the rack.

Speaker #9: Okay , great .

Speaker #8: And then the backlog growth , you saw year over year . Can you talk about what programs are driving the increases in backlog ?

Speaker #8: Is it more radar vision opportunity or expansion of scope of programs or any .

Speaker #9: Thoughts on .

Speaker #5: I mean , expansion of scope of radar program ? For sure . And then some heavier vision programs , which we we added to the portfolio .

Speaker #8: Okay . And lastly , on the vision programs , can you talk about the timing of when those would start to contribute to revenue ?

Speaker #8: I think the radar one's coming on very quickly , but comments .

Speaker #9: On the vision meaningful .

Speaker #5: I mean , vision is is also ramping now . And we have some fairly significant volume in it already . We've added a bunch of new wins in China which ramp very quickly .

Speaker #5: And there are certain sort of dynamics in the market that in many cases , the programs that are new to us should ramp actually pretty quickly through 26 .

Speaker #5: So we've again , it's been a it's been a it's been a whirlwind quarter .

Speaker #8: Okay . Great . Thanks .

Speaker #3: The next question we have is from Craig Ellis of B Riley Securities . Please go ahead .

Speaker #10: Yeah . Thanks for taking the question . And Donald , congratulations on the growth in the backlog here on year . I wanted to start there and just see if you could give us some color on what some of the primary contributors are to backlog radar versus Adas .

Speaker #10: And then I think you mentioned that there's some non-auto stuff in there. Maybe photonics and quantum help us understand how big that is.

Speaker #5: Yeah . So , so primarily it is centered around our Adas products , both radar and vision . We had some bigger discrete wins at vision , which we'll talk about in the fullness of time .

Speaker #5: Once we're able to . There is we have added a little bit for the quantum related optics products . Still small , but now that we have running revenue , of course we're kind of compelled to anyway .

Speaker #5: We're still quite conservative on the market growth and of money that we have in there or assumed in there . It's , you know , it's it's , you know , very small compared to what we're committing to on on the Adas products .

Speaker #5: But we are excited about the market . It's moving extremely quickly . And that , you know , coupled with the fact that we're now seeing a lot of interest from the humanoid robotics market for our our product base means that there are some dynamic market growth factors there , which we , you know , hadn't anticipated and are unexpected positives .

Speaker #5: I would say .

Speaker #10: Thanks for that . And then coming back to radar and just going a little bit deeper on where Suji was , it's nice to hear that your primary customer has identified that the product will ramp .

Speaker #10: Can you help us understand beyond just color on Multi-omics ramp potential , what type of customers they may be engaged with that could give us a sense of the type of volume we would be talking about .

Speaker #10: When this starts going out in volume .

Speaker #5: I mean , there are they're one of the largest vendors on the planet in the space . And so their product portfolio addresses everything from the highest volume passenger cars through commercial vehicles , through high end vehicles and , and heavy industry .

Speaker #5: So it's a very , very high volume market indeed . You know , we expect to get a very significant market share of the entire radar market through this , through this program .

Speaker #5: And again , that's why we're preparing our supply chain and really had to double down during the last quarter in terms of bringing up second sources earlier than we thought we would .

Speaker #10: Got it . And then if I could squeeze in one more for Mark . Mark , the software acquisition , any visibility on the degree to which that could contribute in either fourth quarter or through the year next year , and benefit gross margin ?

Speaker #6: Yes . So yeah , so the acquisition is off to a very good start , Craig . Integration ongoing . We've already engaged , you know , with the customers with the main tier one customers for camera , OMS , DMs .

Speaker #6: You know , combining our device with their software . So it's probably too early to have a synergy of revenue in Q4 . But certainly next year we will see some , you know , sales , sales synergy there .

Speaker #6: It's already running in the order of approximately 1 million a quarter for 2025 , and that should increase , you know , going through 2026 .

Speaker #10: Thanks , guys .

Speaker #6: Yeah , yeah . No .

Speaker #3: Thank you . The next question we have is from Anthony Stoss of Craig-hallum . Please go ahead .

Speaker #11: Hey , Donald and crew , I wanted to focus in on your comments about the North American robotaxi partner for 2026 launch . Is that radar lidar any anything you can give there , then have a couple of follow ups .

Speaker #5: It's it's our new vision processor .

Speaker #11: Got it . And then I think in the last quarter they call you talked about expanding relationship with BYD . And I think there's a vision program that was supposed to launch this quarter , Q4 .

Speaker #11: Maybe you can just update us . I know you made some comments about Chinese wins on the call , but I'd love to hear more .

Speaker #5: Yeah , I mean , we're we're engaged with all of the name brand Chinese OEMs . We have wins with with many of them .

Speaker #5: And , you know , we're making the prescribed progress that we expected through this quarter . So I mean , we're generally pretty happy with the way the market is and the I mean , the sales channel that remains in China , net of who she is , is doing a phenomenal job of of deploying our new products into that space .

Speaker #5: And so , you know , we do expect significant revenue from from that geography as time progresses .

Speaker #11: Got it . And then my last question also related to the radar ramp , you talked about bringing up a second supplier earlier than anticipated .

Speaker #11: Is your your partner are the automakers moving more towards intermodal changes out and putting in in any solution ? Or why do you need to bring on a second supplier so quickly ?

Speaker #5: I mean , heavily , it's been driven by by geographical compatibility . So we we do need and for certain OEMs to ensure that we have a supply chain that is not including China and Taiwan .

Speaker #5: And we were well positioned to do that . But we had to accelerate some of our plans and spend some of the manufacturing tooling during this quarter and next quarter in order to to make that happen .

Speaker #11: Got it . Thanks . Appreciate it .

Speaker #9: No worries .

Speaker #3: Thank you . The next question we have is from John Wanting of CJS securities . Please go ahead .

Speaker #12: Hi . Good afternoon . Thank you for taking my questions . I was wondering what gives you confidence that the the substrate and packaging issue will be resolved by Q1 number one .

Speaker #12: And number two , have you thought about the indirect impacts of , you know , shortages across the industry ? And if that might impact auto numbers overall ?

Speaker #12: And , you know , not just including substrates , but also like , you know , the aluminum plant outage , we've heard things about Korea and China .

Speaker #12: Are those considered in the outlook . And if those might flow through to you in some way .

Speaker #5: Well , taking the first part , I mean , we I mean , we're in the process of bringing up several second sources .

Speaker #5: As I mentioned before , just as a matter of form . And we have to accelerate our , our procedure , particularly for these organic substrates that are used in the flip chip packages that we use .

Speaker #5: So the discussions and and ongoing engagement with the new vendors has been going well . I would say this is , let's say , a corner of the industry specific where the vendors who are heavily exposed to large language model ICS from Nvidia and Co are redirecting capacity over there .

Speaker #5: Even some very large brand names are struggling to get what they want . So it was just a kind of a fallout of that .

Speaker #5: So you're right , it's an indirect impact . I don't necessarily see that we have a long term impact from anything that is out there right now .

Speaker #5: The next big thing aside , with Volkswagen , particularly , of course , that was public . But I do expect that that will rectify itself .

Speaker #5: In short order . It doesn't feel a a general industry shortage like we saw post pandemic .

Speaker #12: Okay , great . That's helpful . And then just to dig a little deeper , there is the pricing in ramping more sources for chip substrate is going to be an issue , especially if your volumes next year are going to be better than maybe you thought .

Speaker #12: With these , you know , the your customers requiring second sources for your production .

Speaker #5: Yeah , I mean , the second source helps us give price leverage into our supply chain . So I mean , it was something we would have like time anyway .

Speaker #5: We were our hand was forced really by sort of unexpected positive news , really , to , to to do it earlier and , you know , it really should give us leverage as , as we go forward , as we're able to , to play wafer foundry suppliers off against each other and likewise with packaging and test houses that that make up the back end of the product .

Speaker #12: Okay , great . If I could sneak in one more . What is the margin and opex without look like ? And what is the break even level look like in revenue ?

Speaker #5: I mean , we don't really segment it out . I mean , we we did give directionally indication that the wushi business was significantly lower margin than the rest as we go forward and deploy our Adas products .

Speaker #5: You know , we're still committed to getting to the 60% gross margin level of of the target model that we set ourselves .

Speaker #12: Okay , great . Thank you .

Speaker #3: Thank you . At this time , there are no further questions . And I would like to turn the floor back over to management for closing remarks .

Speaker #5: Well thanks everybody . Thanks for attending the call and looking forward to seeing you at the conferences over the coming week , where you'll meet myself and Mark and Nikki .