FormFactor (FORM) 28 Oct 202020 Q3 Earnings call transcript

Thank you, and welcome, everyone, to FormFactor's Third Quarter 2020 Earnings Conference Call. On today's call are Chief Executive Officer; Mike Slessor and Chief Financial Officer, Shai Shahar.

Before we begin, Jason Cohen, the company's General Counsel, will remind you of some important information.

Thank you. Today, the company will be discussing GAAP P&L results and some important non-GAAP results intended to supplement your understanding of the company's financials. section non-GAAP press other the release on Investor to available information company GAAP the the website. in issued Relations of measures financial and are and Reconciliations our of today by discussion laws. securities forward-looking the within meaning the Today's of contains federal statements and forward-looking benefits our financial of the the changes, investments, future products; are impacts regulatory impacts performance of acquisitions which projections such the respect COVID-XX the and macroeconomic of future include for products, such and statements to anticipated sell Examples ability due of the products pandemic, with demand produce to those to of and business assumptions the the conditions, statements of development technologies based. and the upon risks results this cause and uncertainties are statements These that to expressed during materially unknown actual from call. those subject to and differ could known other contained today. Information our XXXX the for on our the in fiscal XX-K issued www.sec.gov press available and website most in at recent our filings, uncertainties factors ended with and on Form on the SEC SEC release risk year SEC's which are is filing and

Forward-looking obligation statements to With Slessor. update as are we XX, call that, to the now will turn them. FormFactor's we assume CEO, today, XXXX, over October and made Mike no of

Thanks, everyone, Jason, and for thank today. you, joining us

quarter operations despite and continues the finish focused and semiconductor we both industry increasing factory This fourth our and quarter XXXX. products quarter of four our Responding and of posed third end and of customers. in In robust comprised quarter, socially matching positive fourth launch off record third for by improved the external the XXXX safety XX% our challenges environment. we adding of new the the a our chain capacity steadily delivered results leaders supply as distanced manufacturing FormFactor high in efficiency by nearly to at all-time July internal outlook the our range, the demand COVID-XX, continued Year. trajectory output

spanning presentation, Day we customers memory important FormFactor investments near-term needs. close our with specialty important and meet in a intimacy understand forefront indicator across of one working as spend term, next-generation result, Longer Analyst measurement demonstrates This helped engagement diverse them is customers August long-term are test each a our at their are in and these explained R&D also shape production we with chips Revenue strategy companies, of meet logic, foundational we and the who of we our from and is As IDMs top-tier foundries, capacity element RF. our dialogue as of like that and synchronized their challenges. with stay a industry. to group

and the collaborations of in our XG R&D logic customer a handsets provided great probe example by ramp value business these growth the long-term major volume, card is first the and foundry of programs. As associated

both and RF utilize processors. differentiated are in highly investments products to wave tests ends market-leading application dividends millimeter RF complex high-performance digital FormFactor's their requirements multiyear per now yielding test next-generation Our as and front customers meet

the especially for is FormFactor's also complexity, intensity, advanced increased of probe equal, XG number times the As in one which chips are XG XG major and are wafer of past, At which handset means a also This which a in advantage competitive test are the longer out increases greater hallmark wave with of else probe by which test market time, but silicon, in Recent packaging. millimeter intensity. required more in associated there the have not of of increases cards we ATE grows is test complexity indicate in the times the we XG chips combination being XX% cards RF. significant the expands All that XG per LTE in phone. just test same lead. the required, test test suppliers widens comments substantial discussed driving for than served

the role Moore's of packaging to like focus variety post integration fab enabling of chiplets slowing of taking As stacking front-end prominent DRAM in a integration to Law, schemes the a probe and heterogeneous wafer moves of advanced die. industry's offset HBM cards test are and

As we both growth delivered the are packaging partially advanced and drivers growth years. discussed XG over in we of least responsible two and are for have past important FormFactor's businesses the August, double-digit long-term at rates

DRAM. Turning to

after quarter design of XXXX At present, XX-gigabit DRAM period half migrations, designs, activity technology expected, the by and new customer transition of and XX-gigabit digestion prior our base. this across are FormFactor's driving in market the baseline revenues with we experiencing and our As levels returned sustained a combination to a healthy demand node DDRX in third customers. first introduction steady an

LPDDR As a each cards node such is generated migrations, that probe are but demand chip consumable and reminder, also specific a X. release design, to XX-gigabit from new is just not new designs of chip as so the

revenue regional but quarter. due see China reduced challenged major our multinational of region third U.S.-China our second one production quarter, in instead Looking the record reduction this reflects to trade will of the not the the from you is in into semiconductor directly details, that Interestingly, during off customers the the third levels shifting out significantly quarter. relationship,

noted multinational is and in past, who region. from revenue primarily facilities test derived in assembly the manufacturers we the As operate China our

for fully mid- customers norms in provides especially a technology been total likely a historical return and has where applications last need that the growth on to will single-digit at cost opportunity. to for These a of revenue offer trade revenue us, significant performance capitalize company percentage FormFactor's quarters. But China least several benefits. opportunity domestic domestic partial FormFactor's

Boulder, area. or above existing close temperatures at Kelvin down nitrogen a and to near in expertise a XX is high-precision noise by augment field growing low futuristic area as and FormFactor's brings Devices the and environment thermal absolute temperatures front, absolute noted of zero the strategic HPD, of driven degrees to Operation to Colorado, Inc. testing of capabilities this from products we based press capability about cryogenic release, HPD in the our liquid portfolio system, systems devices quarter, following the capabilities. infrared leading hundreds such just zero excited control integrate applications thermal in of we addition M&A to control test. world-class as acquired the of On the and manage quantum test semiconductor are detectors And our for and engineering of and The ability computing. to test in FormFactor's test of business is measurement

delivers quarter of packaging. becoming per strong results with share more Finally, XG is on towards a measurement of industry, non-GAAP we already record outlook, new and like that the Test and third making and place our important by in a fourth quarter model are and advanced target $X earnings financial million revenue. strategic driven $XXX semiconductor progress near trends

position to target progress these as paired model. in Our execution over towards with attractive differentiated growth and our Shai, disciplined we strategy will drive our leadership you. markets share gains and continued

Thank you, Mike, and good afternoon.

release QX margin saw noted, of results our are were range, range. the in our our above Mike and impressive you record-high our As EPS and midpoint revenue outlook exceeded and to press close as XXXX. gross of third our quarter outlook results, These

the million third QX near an quarter, revenues revenue. Revenues our XX% quarter $XXX of The Flash QX DRAM $X $XXX.X in quarter. were Probe QX. partially sequential XX% or a was were were and increase $XXX from second XX% XXXX. segment revenues our of FormFactor's and card higher increased foundry offset quarterly year-over-year, a revenues, $XX increase in in from Systems small million from third driven record the and an revenues or logic segment high XX% $XX million increase million million, in of by were revenues. QX, by revenues decline increase million

the quarter of quarterly XX% $XXX quarter. with of X% revenues run less of normalized company in card million, and comprising in XX% QX demand Within total of second million revenues continued, to QX, QX from than down in the the million revenue in what logic revenues QX, in to XXXX, Flash to more digesting be total robust than the of quarter. rate. quarter decreasing were were and DRAM revenues of million second of for the XX% second the were $X million from total QX. DRAM purchases in million $XX compared demand quarterly probe segment, were increase foundry with million and in an revenue QX in made $XX believe $X.X customers second After $XX we XX% higher a X% to a couple quarters compared returned as in from

business attributed going will is increase probe Some the continue this but of is The that our advances from quarter-to-quarter. not this during revenues to the expectation assets quarter. to be change the does of lumpy integration the Flash well, acquisition of card

available compared GAAP third million to gross issued quarter basis, revenues which revenue to in be reconciliation back or reconciling included to table QX, of mid-single-digit in of non-GAAP revenue, million margin XX.X% margin. higher gross was the of XX.X% probe or of a On and points the Investor revenues items, XX.X% million in as we margin press higher for on of Flash Cost a margin XX Relations card non-GAAP and in margin systems QX. higher our medium. non-GAAP revenues, $XX the $XX segment today our gross $X.X section was the of Specifically in expect than XX.X% result segment GAAP overall website. we outlined release the third to as quarter higher for gross QX, slightly basis gross mainly

increase gross in of was XX% the basis in margin segment Our small XX post points compared XX.X% QX. the a third quarter, to card

XX.X% we increase of and driven warranty compared in costs. Systems to to XXX Our to lower EML the segment second and anticipated of quarter. higher and in QX basis low sales previously The margin high reported was points by have the was XX.X% XXs gross mainly returned XXs as range

Our second revenue compensation, quarter million addition $XX.X third salary expenses from or than the of Depreciation million intangible XX% assets an of both second during amortization $X.X quarter. QX. quarter, the onetime $X.X levels a to expenses Company increase of due annual for $XX.X at performance-based the for $X.X mainly result and the recent third to impact $XX.X expansions $XX.X to in was was the IT for quarter XX.X%, for $X.X million the known were global $XX.X diluted onetime fully of respect million higher range or remediation $X.X with the million, capacity compared third the included the intangible stock-based to operating significantly million increase million and low noncash GAAP to GAAP similar July the of of in quarter Non-GAAP effective business in quarter, XX.X% was QX. was regulations of reflects per in also and made resulted $XX the issued million of is million The quarter. net new revenue third application costs, the we QX. lower to of compensation, acquired tax security non-GAAP higher tax in or GILTI. result expenses This rate for income of as The compared rate fully in of operating in raises QX. XX% acquisitions. for will benefit million in QX lower in and GAAP income $X.XX earnings per these tax to the in previous XX.X% quarter XX% income, be as a communicated than million The or our full-year also we share call. effective net $X.XX end third new investments share the the regulations diluted cumulative the for

NOLs rate is based our and until remain X% remaining pretax X% credits. reminder, fully at our utilize to tax income to cash R&D a we non-GAAP U.S. of As expected

net diluted $X.XX per non-GAAP share to $X.XX $XX million QX. income in or $XX Third diluted million quarter compared fully fully was per share or

in the quarter Moving $XXX taking our The the million to at in total balance sequential cash $XX flow free third the on We of cash in end million third investments quarter. cash cash expenditures. in $XX reflects capital flow free and flows. generated to the reduced sheet quarter QX, and increase compared to of million the

XXXX. During repaid a quarter, fully Cascade the of Microtech third for we acquisition the loan in

acquisition quarter compared CapEx the As of million. in on $X in during the is We end in expenditures $XX two balance during million result the new million quarter to of our spent of to the remaining invested decrease The the Livermore. the $XX sheet, $XX had QX. million the second totaling term capital loans complete third of we the third quarter,

$X the capital decrease to million. As The a during total $XX balance capacity cash a to QX quarter reminder, by quarter is of million our XXXX million At to debt is balance assets $XXX our the acquire mostly quarter. our exceeded bring million expected to to the probe $XX from end, million, decrease Advantest $XX the attributable expansion card used expenditures end.

capital strategy. solid we M&A substantial as healthy our our capital expenditures continue structure, our liquidity to in and Given parts in and important invest of

our HPD's acquisition noted, of completed not As cash we net have month, results. expected on $XX for an is million the this to received. earlier immediate financial of HPD Mike addition impact

issued share issuances compensation. described two authorized year As of today, has $XX a will program further in our share dilution press from million Board repurchase release related our offset stock-based to Directors

the fourth non-GAAP to Turning quarter outlets.

earnings As a range QX expected margin in logic revenue operating a to expenses to our Relations the in be the website to of we in favorable outlook be outlook the less of XX% strong and GAAP of to the outlook with Operator? similar XX% the QX, to questions. fully Product let's cash. QX, and . for higher share diluted partially and to to reconciliation and is between in decrease mentioned, Instructions] foundry in expect call offset A QX at is that, comparable Non-GAAP demand to resulting for available $XXX in [Operator non-GAAP today. non-GAAP XX% range the section At of QX million on With QX open QX. $XXX be demand in mix million. these QX gross of to release Investor issued our resulted factors XX%. press levels in midpoint to Mike is expect overall we by expected DRAM per revenues ranges, These the continue

is question [Operator Our Thank line open. Bolton Instructions] you The Needham. from come so from Quinn the of much. first will line now

your SMIC? quarterly any a record foundry the quarter. tighter Is that large Shai. export the then I for fourth appears on about a congratulations question, trade across seeing us customers? second tighter to you the guys third the if a to controls a strength, impact you nice and have have more obviously, are be logic I foundry wanted if could outlook Hey during bit then ask give on logic what follow-up results And Wondering around the little fairly color. and quarter. been restrictions for got And question announced broad-based

handle one. well. third and that Quinn, The logic was it will broad-based Mike. quarter quite the I it as is foundry is as in strength

If some and across our multiple there. can foundry strength you a in you list, XX% at see space customer nice leaders logic take look the

We the are seeing continue fourth here in quarter. thing the same

XG continuing spending, we data spending, launches here back talked is reasonably about are the nicely of that. trends broad-based. robust it before, So certainly, diversified, major through nice behind A really lot Infrastructure the part drivers the center year. some handset data of

for the On I not mitigate the the China licenses in else, been we business situation, remarks. serving investigating we customers. are China for multinationals we And And foundry the way imagine different tried to give you is sure, you for business a Majority they have be sort little working major said percent China a The consequence, more them prepared like think business Having quarters. for detail our several and domestic a as big the other past mid-single-digit is of other our can of has there revenue the region. been ways China really company, in that, us the a domestic through a some activities. can that, us. associated whether with or through serving compliance U.S. headwinds domestic as everybody of

flat at favorable think with foundry then for look question you just quarter. the for I And logic generally talked that positive I about Shai, mix about less guess I DRAM. and other the lower in you. would a mix would be NAND Great. just strength

a with the in logic? going foundry thought can offset maybe sort logic that of tailwind us foundry to shifting mix mix segment memory be sort I of and you and What towards would the would on within business? have what walk perhaps So through shift

that is But different average, things. a the We in then the Sure, and on by Quinn. serve, say markets That followed look observation. historically few we the good did a past Flash. then you systems and maybe gross margin logic, highest if at foundry DRAM has or

mix First product a card. there. higher cases gross can logic the of the can have these card customer DRAM same foundry change. even than you these also within some with There all, the overlap markets, is within are markets, the and And within a mix that margin there

has QX, at is these impact, Flash is really lower midpoint markets also be though even logic at an is the mix revenue expect and for But the we range higher, that to So true outlook look trend expected why QX, see of down. it is the is that within margin the foundry to to higher. be in if and you the gross expected and

systems but for quarter-to-quarter in quarter? may the guidance And it. of have business what would I give a you did the Shai, missed it, do fourth sort Got then,

When the about three We spoke not. market. we maybe did the

you great. hop will I the Okay, queue. Thank back in

the The now open. come Carlin question next line from Riley. B. Our line will from is of Lynch

questions. on Craig. Carlin you, is Mike. starting This Two with One, for quick

You the purchase. had talked, Livermore I about think, previously plant asset

us just could I facility what would terms we then that timing coming is can be how production in give have and of great. conversion, that you and update If ramp expect follow-up. an on a And

Yes.

are I everyone, entirely our be to that. existing of manufacturing foot in stages in To going think capacity still we remind the which for California. close adjacent Livermore, to building, footprint bought to XXX,XXX utilized is early fairly we square

still the of outfitting that stages very in building. early We are

manufacturing a year see from squeeze as better results but QX out the managing than ago, of guidance, are social we current we - inside our can getting that are we us that the and more to footprint to place been, in existing a And have you that in would say, it. continuing footprint. So of at existing at measures still results, inside make get footprint. Obviously, efficient distancing, are effective more less our incrementally lot

is part be to to a the capacity we overall online start incremental in new come to as going it gradual XXXX. match our middle But demand. the to expect and We of customer the to start capacity continue

but million then lastly, could Got guess just in ahead of I kind terms in buffer of started I pull any the great. if to was the quarter? buffer kind so just really Were you orders did signs would maybe stocking any then with pull be that SMIC process, it. regards - provide people technology And Advantest, know China integration the $XX intense in are see And of less where in integration, road we you that the time. that had in map update quarter, the Advantest anything signs a of quick, guys there stocking there? of less to

Yes.

first Let deal one lay remarks. did a people and little in the with that me out because things we prepared try more for clearly

well. I as refer you So would those to back

Our small of a revenue domestic percentage, total China digits revenue. of kind is relatively company mid-single

ahead signal-to-noise So and be things are any inventory that going for great not to the on us. pull like

exposure, from are buys COVID some that a That probably limited see risk a is strategies few places, with out difficult of general our like to of doing So things well. in did as we parse reduction. some inventory associated customers

So in exposure the our of is And FormFactor a real say revenue, part a to given there. I clean it any footprint got significant business, has. the signal not we really domestic wouldn't event, China the

acquisition, a quarter about are On we the Advantest so in.

remarks, I going mentioned the in as Shai really really, things think well. are prepared

come to technology the be pleased very with a are and We both a assets in FormFactor. that part of team the have

integration, long-term can are the fairly You projects. imagine those in technology

logic in where foundry and road road stages early in of we map. card some FormFactor's, characterization, technology these probe DRAM, the maps, rationalizing use in are we so And can of elements

that contribution. the we in there us brings better probe key technology a and position about, the acquisition MEMS a flash, As competitive brought Also pieces, technology is one of talked that us. was the and this interconnect

doing integration extract to Although $XXX make huge, operational can market increasing in share million market progress see more is little NAND a some third and there, some bit manufacturing the a in to we contribution served share in Flash. continuing whether not the quarter,

much guys. Got thanks it. so Alright

Thanks.

now Stifel. line Our next line open. the Brian question Chin of will come from is from The

a for from Nice Revenues in you, letting few Mike. does XQ half ask first very us strong level. questions. largest afternoon. normalizing and appear thanks to question off customer Maybe results good first your be Hi, for

wondering normalization capacity rate any reflects this as further was if customer growth strong your I So guess, fourth quarter I outlook from moderates? of XX-nanometer the

Yes. It is Brian. a good observation,

the as that normalized fourth XXXX of customer probably the in half call XXXX as to a run level, coming which more we from at and above first you of this kind rate. of it in a quarter third the well, was levels should results, back revenue in be customer. down those quarter our viewed And largest So do you normalized expected see as

industry. think third look X Again, third the quarter, at fourth nice in you leaders quarter as the the generally, XX% we business more our of comprising customers. the these I between in some and see mix balance a had customers outlook of leading some I in real quarter, the

of these or roadmaps the list need for one relationships relations. they design node think indicative that quarter I whether be whether our have to build have through to design they specific And to major is certainly in it diversification largest in footprint migrations of the overall or and customers, going customers quarter, new other cards, for fluctuate are of this their so whether specific we XX% would that release given or according the indicative of we around they customer not, working their that probe and I expect any managed business. is customers, the In any customer are the

of now increment at maybe And touch your term? right end in upper output the you say, wondering capacity are ceiling I near Maybe for your towards or of range, to you helpful. able and you, revenue XQ the new of year. in to some this to the again, of up for end definitely either switch shipping Shai, if you capacity the suffice perspective, is maybe you capable that is a the elaborate of more to could terms more was next on of but revenue impressed are timing That your upper given I'm gears, potentially the Mike levers exercise your supply from that can guidance guide?

in I Again, of a I as take one the it response better year, level. processes. part as of Obviously, reinvention to of that our lot we I think the complete first getting environment. at Yes, we this will Maybe a said manufacturing was and it a Mike the of questions, just a in operating on-site high are again. went through at previous is safety

that for have been lab rooms done, into space annexing production labs, having incremental engineering engineering conference and we example, things right. the have as production space, turn space of Some then

You these the can imagine, lot rooms there days. for population a not need G&A of is conference among

And of so you pivoted and sort have repositioned inside the existing footprint.

be we of I are those lead on got space, existing on the industry that, Having in as form significant CIP Obviously, gross capacity high there yield towards get improve you will manufacturing quarter we more we outlook of a middle said to continue mixes foot get XXXX have much per results. the pretty bring and think and to in are getting improvement, been as straining that the not close favorable role. end well. some is existing mix start new you like, the a square range, new the bear those footprint. footprint. more play and fourth things beyond that in depending piece There reins our to revenue margins of the capability factors are loosen of more and the if but that building. does And how And we ongoing foundational has really financial

fairly other other similar that maybe early capacity bit you for included, visibility a is even and think you seem they of parts if But foundries, little folks giving better year? yourselves, next Do think camp. folks, yourselves of in running really kind themselves example, be supply in one of last quick maybe the chain, into folks, tight a Maybe to one.

wafer at would shipments We offering of and quarter. bit But business, business rest capacity say, is little the design the start visibility, in and do little I are we of where times to win measure the so there longer, average, of headlands changed business. to situation where a Still fundamentally a work bit turns increased a and and dramatically times, and a it have to cases to because the certainly the they fill the wide significant nature far on that a into I but If turns our the certainly, for amount though, a times longer, designs revenue gotten are are of there lead lead are have of customer cycle still fog. running only hasn't quarter, go fundamentally look some not but right?

enough. Fair Thank you.

Thanks.

[Operator Instructions] line will Tom Diffely Our Davidson. come question open. the D.A. of from line now next is The from

of Mike, very range, the go-forward a you foundry kind the So good On the memory consistently customers, the in to in four quarter. depending see the the diversification their XX% would guys expect all obviously, be large to logic customer players and basis, customers, come two go while XX% on quarter?

to Brian's to allude one in answers of question. I think I to in any given the tried this and quarter,

you some XX% customer both the in I see in lumpiness or DRAM providers. memory list to going are still think the

to grow both Of year and build out our and much course, across a move high-volume as to both level lumpy, a cause we But we the little foundry around world's one of fluctuations even high-performance out foundry, was those that is a mobile, ago be even RF. it less multiple designs as so going than a might XX% bit in our still still and customers shipping of customer in list. But them DRAM that compute are expect I and the leading is customer. at would it business business some

on XX% XX% be expect the them long-term, them the the customer, to we see FormFactor. could off certainly list. and But perpetual a Over customer over short-term, for a I move you think

Flash Okay. basis point, your then acquired opportunistically demand on using you earlier that the a helpful. At the traditional answer That on to technology? Are are technology space? your in the might is that you still improve And this back using margins going business. old go-forward

is mix a Tom. of Yes, it both,

of So nicely positioned the we part Flash. acquired the as product Advantest acquisition for mainstream

example said, the base announced acquisitions. maybe of to footprint, being revenue to working the synergies that our we some flash technology. are acquisition, when flash, are areas we where high there legacy one we an major qualified are NAND NAND these can we of across worldwide expand at As customer the the still manufacturer, we of of end bring with that But FormFactor opportunistic

So the better the need a Advantest usual the A Flash NAND very form it, sub technology, of factor that of pretty to the is a space. NAND going nature that specific mainstream legacy flash, much product dense, high-performance commodity product strategy of piece in maybe design of segmentation is more given lot some has position?

improvement look the towards point has that volume? And well? Or or XXX Okay. strictly year-over-year, revenue as then that is card basis mix finally, the because when probe Shai, benefited margin in more RF the at just you of

when we mix, historically talk higher logic, about then foundry and think part which of has the margin. a is I product our RF

that so also make toward of and help in progress glad the margin our - the logic foundry course. going we increase base, across with up. we help the margin And the helps overall of are Higher is higher the XX%. to that revenue And show spread margin

both So of them.

thank Alright, you. Okay.

Tom. Thanks

open. of Citi. come question will from the next The Amanda line from now Scarnati line The is

how going business the do Can become? looking can them is nice TSMC On much in you And there forward? different question large on finally at how to Or that is have limit a willing I outsource to threshold. to of look how at it a is the way, sort form? little first customer XX% TSMC. crossing a talk is bit you about see that It that

bit we Yes. ago the a where effort asset. and amplifier a several our at to really used technology we key advance years first value competitive company. is strategic Obviously, involved foundry business of grow and of largest business advanced the were world's the to element take Obviously, are millimeter an trying the That then and and of qualified XX there below. fundamental about is FormFactor’s if because only with packaging being talked that to get

As of where are our other with we most is card it against business competing a customers, competitive providers. probe

some contrast probably business. foundry a that available in node so leading-edge when caps everywhere is else, you momentum But look in because at And business still it some is sense. that there it upward

us piece going is like, you to starts available to more foundry's to As of increase. to continue of that wafer nodes, advanced move market if that

And business We to about being have it to it comparably about to talked that reasonable a sized is continue our long-term. way with customer. think the think the in I leading past

long-term, I so up next But You the little questions, as up think expect have the are X, to to still growth that left the there of move trajectory shown in quarter. in some years essentially that get I ago, to down them XX% or said, three around to and And previous there is we not XX% bit four customer, story. a level. going a far, legs from some going response

of And sort from of any a then both on and acquisition of you made September the Great. in to in expect Or business, trend? you capabilities. cryo technology the we some more opportunities? announced to the revenue this moving technology test also could via longer-term that of terms When sort today are announcement there of see new term sort Is cryo? back near

a zero. there driving are that, I end think approaching ways, right-hand is in key very, terms are it customers That our road some who guided the Quantum making change right? our applications by low or something essentially model they computing, like we temperatures, absolute like significant your require out of of of very map, at would is that revenue

a Customers the in perspective, $XXX gets with in once will eventually get target outside from is our significant we our why revenue the these model so to model it And Having I invest that, of confidence we of it engaged invest to right said long-term $XXX next reason in bearing capable probably scope even as businesses now. are for an is move revenue million the clearly part It R&D growth But to more the that and continue said, XXXX. acquisition pulling production. like for us past long-term HPD which platforms, million. represents a probably into are it. component development and have

Great. Thank you.

from now Our question line Instructions] of Cowen. Robert is next come The will the from line [Operator Mertens open.

on Christian is This Mertens Rob of behalf Cowen. at

a that of the see give Just so next in you. of and the of for you over you could growing margin on clarity next cards probe bit packaging. puts how little one more or along concentration that see and profile how the the advanced customer year? that business, year business you Maybe over Thank and sort takes terms of lines

that there Day industry encourage the look in some leaders more to frame good tried achieve A our road HBM on I and chiplet and going because innovation so advanced I differentiation Yes. clearly, is advanced if it things one the and are August maps, Analyst we is by it product strategies, in sense going rely you fuel can to pretty look go to compelling would that everybody's customers packaging. more presentation employing in baseline. packaging there. to whether question memory, forward, maybe back their some our But at at

concentrated, But the We because among pretty it early leaders. are relatively I think, you in are is going still to early, see that. it

of So those that road are customers, third the so to are maps. in in as driving advanced seen And we hard people advanced rest people packaging, then the industry, the like part will the the and packaging the be going the to are customers of have reason pardon to had applications a innovating why stay have we variety those at of they pun. going drivers we engaged we believe edge with the obviously XX% the fan-out of to of quarter working leading be which other

it to concentration a perspective, going with from leaders. So to continue again, be the is

probe say, we good test card from in Having so part. higher be elements they do competition, expect much bear margin there value provide some profile, of price that, there think huge that said packaged higher things advanced approaching that enabling die a margins. a I speeds, commodity densities applications, always would margin, is or whether in I packaging a monolithically tighter a not higher uplift than, a in the a are known gross

is Thank Great. that very you helpful.

now conference further this back no the at to showing I turn I’m time. Slessor. questions like would Mike to

Great. Thank joining you, today. us for everybody,

We stay again we have up to year. we Take But soon. talk you got stay talk coming to the care. to those, IR if you close events and healthy, will a safe, don't couple during of

today's gentlemen, concludes conference and this Ladies call. Thank you participating. for

now disconnect. You may