Applied Optoelectronics (AAOI) 26 Feb 212020 Q4 Earnings call transcript

Good day and welcome to the Applied Optoelectronics' Fourth Quarter 2020 and Full Year Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the call over to Lindsay Savarese. Please go ahead.

you. Thank Investor to Optoelectronics full AOI's financial conference Savarese, to I'm year for results you welcome fourth call. Relations Lindsay and Applied pleased XXXX I'm quarter and announcing AOI financial XXXX and XXXX. provided the a today, full for results closed outlook quarter market quarter and the press After release first its its fourth year issued of at release also is available The on ao-inc.com. the company's website and being call recorded webcast live. is This found be on AOI A for the Relations link can to the will the section website year. be and archived recording one of Investor

Joining today's of and Chairman QX and AOI's give on outlook the A Chief Stefan call us will Lin, is first of details will session question-and-answer Officer AOI's and Murry, results prepared for the Dr. and Founder, follow Chief Financial XXXX. Dr. Thompson our overview Thompson Strategy Stefan Officer. CEO; quarter remarks. will and an financial AOI's provide

forward-looking statement. the involve as Safe current Before results call, management we review to which assumptions begin, AOI's make These materially differ I to you future actual would anticipates, plans, On or statements or In from can intends, cause as forward-looking you forward-looking events could as by other by well today's remind expectations and and estimates, uncertainties to statements. forward-looking thinks convey Harbor company's and like may, will expects, risks believe, of those outcomes. terminology that statements. some predicts, should, uncertainty identify could, such will anticipated statements such in cases, would, expressions similar

measures outlook by as XXXX. responses the beliefs products innovations assume of well Except new with revenue, expansion on Form the file ended our of of XXXX. reports regarding our the otherwise. are we Forward-looking into are XX-K unless the statements with quarter on as as a in or isolation Non-GAAP statements why regarding discussion in first financials the business accordance exception this no between obligation of for changes the be on also forth customer year reconciliation noted measures to of a included non-GAAP and in for as financial in statements today the prepared are may Also, discussed reach company's include earnings are results basis, December and required impact in company's not company's as information expectations present the that the A to we report risks law, all considered press SEC, non-GAAP to date statements management's for related XX, statements markets of actual forward-looking release the section reason call company's for Risk website. on or of any is a to with annual company's measures about to results other as substitute the the intended expectations. that specifically our our Factors financial GAAP available GAAP. conform well including the and to non-GAAP earnings these More after our update to set

of financial be virtually moving Raymond this to with interact section opportunity the of management March Xst. conference announce the results, I'd Investor AOI James presentation Conference to the like to participate will The that Before will Institutional on be webcast live AOI virtually. webcast of many on will you We the to to and the available links have hope Investor website. Relations at

May XXXX the call earnings I'd quarter X, Additionally, of first note currently like that XXXX. to our for is date scheduled

Applied call and Thompson I to Founder, over turn Lin, Thompson? Optoelectronics CEO. Dr. the to Now like would Chairman

and year team progress made of market today. Thank you, and to was compare evolving entire end everyone for start and dynamics. Despite have AOI we joining the this To year. that I'm the a XXXX, the us challenging proud slow

wins last segments growth by of business our in with by driven total with was compared record in growth in we encouraged generated three year double-digit design are the which major We the XXXX. each revenue fewer XX XXXX, XX

Given our we the to new evident of we continuing the revenue greater And are with pleased got. difficulty our in of wins reach on that very around XX last We'll concentration base report I'm top diverse expand by customer the year, product first customer pandemic a ground, the to our segments. to this from pleased customers. than the during CATV declining the quarter a XX%

line revenue fourth the X.X%, deliver XX.X%, fourth compared of Turning to gross to high quarter, $XX.X quarter guidance EPS million in at fourth sequentially. expect and prior end we as the Total below year. margin And expectation, of now we was non-GAAP the for in revenue the with expectation our our grew the quarter our range.

earlier to our that later which part following we quarter. slowdown quarter, a center from on last order of As data in related in storing working home some extended mentioned see to demand was QX third fourth began This year. the normalization customers into in the to call, from the shift by was some inventory the surge of we driven

in XX.X% to generally QX data by our mix product and mainly guidance to in an protection to in XX.X% this below activity Non-GAAP beyond. due was of the than followed margins anticipated. expect continue gross segment, range conditions of We and increased slow slightly segment in higher cost center QX XX.X%

we demand non-GAAP revenue is QX, was product. in telecom our particular Similar for their overall demand look of share. XXXX, net to America sequentially million, North for we doubled three to was Total increased at XX% CATV the up revenue to QX Total CATV over QX XXXX. product from down from be XX% broadband than environment was during sequentially. As CATV to production $X.XX which increase in $XX.X strong our continues loss $X.XX XX% MSO XX% continued years. XXXG networks. product production and quarterly continue segment, In more see million our from XXXG of quarter, of $X.X Revenue for but as revenue upgrade highest our the our to year-over-year, per

several following deployment Telecom China that notify large our see our operators lived XG the to QX. As - a we network disruption revisit believe call, us while U.S. will they by uncertainties segment chain in earnings in by the QX customer supply Chinese surrounding expect their disruption be mentioned, on paused We been and recovery our this of band. several caused Huawei's has that, short telecom

the meeting we QX to QX. continued by We the bandwidth probably telecom of the to forward I and are performance Stefan? to demand XG need for a excited With forward, for within given outlook soon. Stefan in-person our markets. in Looking market in turn review ahead over for call the would increased our look details the our CATV that and call higher again opportunity there about capacity and growth the that's increased products

you, Thank Thompson.

revenue gross expectations, at our range. below delivered and we mentioned, line of in expectations the Thompson end our with guidance As high our margins EPS non-GAAP

CATV we anticipated the by were quarter market, softness While we strong saw markets. impacted our in the data results telecom demand as fourth center in and

challenging were design XX quarter, throughout other of by we markets. on XXXX, XX encouraged wins pleased wins, we market, were of customers, and the secured growth the We design double-digit were despite we segment. And CATV our with driven XXXX our business X in to total evolving wins are back segments. three made the market, XXXX. three was total, fourth progress X year, market in telecom in among we XX customer in in in base. In revenue for in CATV revenue streams Of the XX record in in secured data were our our market, design and our new the and which the two growth major each are generated, dynamics similar Looking by diversifying center X all we

design the results. year, win difficulties the these I last with Given around very pleased pandemic am

have XX% XX to expand first We the front, And one time. customers reach declining from XXXX from continued the XXXX. are to customer our of on our by for is that customers top of our diverse which products revenue of evidenced revenue our we pleased our base, CATV report of concentration that the exceeded to to

to Turning million. $XX in million guidance sequentially. $XX fourth Total for the with XX.X% million decreased X.X% our year-over-year, range line performance. to increased of Revenue quarterly of quarter was our $XX.X and revenue

began third some and related inventory to by demand in home working was the the see the surge driven to our shift As data of in we orders normalization quarter customers fourth slowing from quarter in mentioned from call, center to latter that part of the some following early year. the on QX our into we last

data expect are our seeing QX We persist begin improving center in to market then headwinds and QX beyond. the and through we in

from to in was the and our see increased from from the expect revenue remaining of interest We products, the other. half quarter portfolio the data CATV center year. second continue of was our fourth to products product telecom from X% In revenue XXXG see our with XX% and FTTH, XX% these customer products, contribution in

XX% the transceiver and was million, compared $XX.X prior data came center in our of center of revenue products. data In products was $XX.X revenue at XXXG quarter, the XXG our year. QX in our Our with from million fourth XX% from

Turning of up revenue QX year. up from in CATV in demand $XX.X remains prior sequentially The million, to We MSOs generated America segment. to million XXX% our particularly environment North products as their strong, upgrade overall of networks. XX% and continue $X.X the

prior XX% our $X.X million third that CATV to seen, to telecom in of Our from for since growth CATV up strong to QX in forward. with down call. quarter expect is the XXXX. we we from We Revenue year, the QX the but this products have quarter continue our on was segment discussed going highest a products quarter the which the sequentially, XX% ended reasons drive increased of we in performance backlog $X.X of million,

a surrounding chains, During large band. seeing, revisited customers the their uncertainty, by of operators, fourth the Huawei's caused disruption following pause, as our quarter was several XG telecom supply China, U.S. impacted by network that in demand China several were

We segment continue in our QX. in telecom that growth sequential believe will to resume

of the We to greater and respectively. in ten XX.X% the revenue, revenue in or or prior The pleased among customer. of which concentration were efforts. revenue two our diversification with was in represented of the our customers XX.X% are greater customers in fourth in the our We total our quarter, customers from of in XX.X% center had new market, top XX.X% and Overall, market, XX% XX% year. XXXX. XX% which including CATV three XX%, of one customers a down progress XX% in contributed fourth customer data top decreased XX These the XXXX, QX quarter, from for of

used of the prior revenue margin had prior center the guidance in of or full loss a XX% $XX.X end Operating a than expenses of contributed generated high ramped of loss basic the our $X.XX a CATV million of product compared operating $X.X anticipated percent million fourth unfavorable range greater compares or a loss gross million million loss XX.X% of XX.X% basic per net QX, in the XX.X% higher for Gross loss loss net quarter respectively. slightly our our and of million of compared product was revenue, fourth $XX.X the non-GAAP share, in data management. XX.X%, quarter. QX we prior as QX QX due per computing the in $X.X was Total mix $XX.X share customers in loss million GAAP a expense to expense or net loss the the of share non-GAAP million of the In QX the range below $X.X segment, decreased share a we of total prior basic net operating overall year was costs Non-GAAP of operating loss to efficient at basic reflect compared of The or outstanding QX a the loss a of and to margin to basic our or per $X.XX $X.XX as loss during GAAP net two revenue an million XX% million year. and of that per with $X.XX $X.XX for and loss was to in of QX year. which to basic guidance quarter $X.XX XX% we year. XXXX. per QX of QX year. mostly in XX.X%, in prior of year, with XX% basis, of $X to in of production $XX.X compared of a or $X.X $X.X million, $XX.X were share or non-GAAP or of a was shares the On million. revenue For for from

$XX.X operations. with $XX.X We short the $XX.X cash total end Turning now to and sheet. term quarter million the restricted balance of fourth for cash, investments reflects in used the cash million This third cash. and at in ended the compares million quarter equivalents, with

building As million was made was XX, million to China had production and Year in considerably concerns and the quarter, machinery than inventory, CapEx approximately normal, million capital in December COVID-XX and and and all construction complete level facility business continuing uncertainty our We up in China. is Total done. improvements. of equipment leading slowdown of to largely total in below we This expectations new higher construction a which QX. $XXX.X to million compared around construction due the $XXX.X QX. New The the investments is $X.X reflects million in on on our $XX.X million in XXXX in Lunar including our $X.X with prior $X.X during having inventory

would available. quick we for on We XXXX. expect raised $XX the CapEx million of are to raised gross like announced proceeds in evaluating And $XX in QX. to our provide a offering I still are share we year. million in the February process have numbers after-market last this in To-date, update plans we program, under our they also including when of

As make we the for research investments use. use production development we in and to have to continue including equipment stated and these new machinery business, proceeds previously, to and intend

outlook, unable not update an like facilities occurred our process suffer liquid winter our last damage report operations as extremely to inability on did were to regular a our result provide run meaningful control week. I historic to week. to and any the cold in deliveries chemicals can operations Texas of issues storm. of moving including that Before temperatures, as to last Due we would storm normal obtain I the related following the nitrogen, to that the

our we're our of their many all addition, homes, therefore to parts last week. In employees damage during suffered and for unavailable of work

meet We some expect to to additional million. the we few over incur included $X we expect commitments to next And extent our expectations $X.X these Currently, ensure to we these that guidance. the in our customer as production weeks and to total costs, between possible. work are million costs increase

and range it our to non-GAAP in now Non-GAAP to be of $XX the basic that, million to Operator? million Moving be shares. weighted QX is range be and back of $X to I will we $X.XX revenue million between to per and XX.X% the for non-GAAP million the over a net $X.XX, to count approximately $XX loss of $X.X basic expected QX XX%. expect loss the outlook, average With and share share using million margin session. to XX between turn in gross operator Q&A

Thank you.

Instructions] Raymond ahead. We question from will now begin is Leopold the question-and-answer session. your Simon Please go first Is Hello, Our muted? James. [Operator Simon? from line

Yes, was about Sorry that. muted. it

I'd now. by know think You

recovering for folks out thanks question. that the from falling saw on taking last the Texas the news. in So, Hopefully, and or week,

new first Sorry I about ask about to hear What was the wanted specifically that. cable to customer.

this by a of So, or outside nature is customer, the is new what's the better a some a you other U.S.? intrigued to AOI that want is a new from I'm And new deployment this. about talk the get is it DAA I a or understanding application? operator U.S. this to when customer

Simon. Sure,

thank comments regarding in Texas. all, now. back-to-back here for We It's a nicely. of falling little us of of a rough last bit First out normal you week all your week, but to it's had down

just and right applications. useful U.S. with been entirely traditional on selling year. customer. So, upgrade the say those company. that to well, manufacturer combination are not or U.S. them I that equipment. It's that based And are U.S. supplying think they both is on types in of respect appreciate TV American kind going deployments to It that. a us products are cable now The They've probably customer. TV a a the roughly primarily DAA And words for reseller North brand-new are technologies. MSOs With of almost there and let's both I projects. well, cable we're gear with your They're specific of a of for a

of the thinking in like you this thought point that, about of to back speaking business that construction I maybe spring which I'd in revenue. broader in the recheck through trend cable your ago, mid-teens guess you're I getting at be thinking TV understanding And get the 'XX? of cadence want to quarters how XQ you'd kind an couple to a today cable market, I recall your to summer 'XX, where about you're about season

ever of best had the was think I later years. be probably several we've right cable cable I in best, year. think level on as had. on We're our can that we the And prepared significantly remarks, strongest than we've products this higher fourth backlog in quarter I that the was quarter in noted the in the sitting now TV

standing strong we're I QX now, segment performance in year. through where the of probably pretty end right through the see think through cable certainly So, I and the

question me, just do I last the center little high your indicator I think maybe quarterly maybe forecasts for the my of spending is that's sort year? data teens goes of then difficult. a whole. you can the spending to I of have on And look hyperscalars, that growth just one to capital Thanks. group But for a linearity might, we if one for visibility kind business to if like for appreciate part the as understand what rate in full should the a your growth of back good expectations bit want XX% Thanks. be vertical? or by business, that And particularly

to any it's basis, our, I But really, years, CapEx or very some the operators you've on there's that probably sort those a in certainly it line correlation. a part from difficult of It's segment, of quarter-by-quarter annual draw numbers. at to a macro the draw conclusion correlation. even high-level revenue. if between, and direct it's over looked on the revenue expenditures think mean, our hyperscale difficult capital I our

For us, I how XXX the do and results of And on particular, as gig year, we depends in revenue we the depending that, the gig in half exactly will second see the if our gig, trajectory lot is year. on think soon fast in dictate kind of occurs, mentioned, XXX that comes that the a and on. that trajectory of how XXX of contributing

on for to I CapEx you it's market. directly don't guidance correlation draw, the overall from So, that. year the in give can't think reasonable the I firm But

I appreciate taking the for that. question. Thanks

Thank you, Simon.

go ahead. from is question Please from Cowen. next The Paul Silverstein

to that has this to at is Good afternoon. response very by ask been and communicated case? it's in those of the in been question relatively openly, what me a customers you the way. communication your your customers from status What point, terms your or limited question not visibility from the I trust that last your the do nothing? that has Let more more open that

drawdown prepared discussions resolving customers, that on ongoing with be their in line certainly I inventory. Well, with itself to communicating those expectations last QX a and correction of But we've the see our our there's said too would about in I them. not QX. emphasize, to that would of inventory, situation. that there's to say much two our customers we it's the been one issues center customers that had then inventory that continue have what customers call I is data so And earnings which to through those and it's had that today, trajectory relative our near-term regarding, guess limited we extent of we've significantly in couple persisting with remarks the is, that, inventory of sort all okay, our

So previous discussion. expectations. think And that's our from unchanged I one of that's largely area

or implementing those should of XXX the I is with customers had XXX And discussions, and think to maybe gig significant we've where continue center or gig progress all customers their area XXX second are say, data really discussion with who continue our XXX around gig particularly to The well. plans. I customers, these some gig,

the technical, from discussions, noted specifications are in sort in are our questions into of a timeframe ramp of my of to would hardening up, that moving As their see to technical half continue questions of for remarks, plans indicative of that, detailed we we year. things second be topics prepared like more and many that about moving availability, the active more capacity mind, like into in cadence cases less deploy in now

And as have those think, quite positive discussions, well. been I so,

pricing assume I well, really it right. to things what about assume I All which it's are look like? think without goes

at Yeah, the certainly topic I firm a have I I early Yeah, any too don't well will of on give an on mean, I say. to with discussion it's indication where don't out point, you this I guidance can't as customers. that that. have mean, play

Understood, guys. I pass I'll appreciate it. along

you, Thank Paul.

next from Please The Samik instructions] Morgan. question [Operator ahead. go JP is Chatterjee from

thinking deployments see half, question. just the point, the I you're wins in announced on of are the press as taking I industry's If remember, I you the expectations you've interest. shouldn't at one Hi, timing just think, in gigs point. guys. of for second terms just acceleration of start win this what XXX more this deployments? that to telegraphing, if can most customer far we at gig? are I'm release Thanks wins my seeing as and in Because off as I'm mentioned expect XXX your on in wondering,

So, terms if just about now? the expecting deployment case in pace not what the that look in half, right deployment of the timing we're like think to second or design should is of win want really

on I wouldn't hear this late at wins those say to it's point.

of second We ramp-up in our capacity are the year. plans about with having half discussions customers the

be And I that to if to win think don't don't not announce they're plan. go feeling right into now ready a we're that that, going like they our pressure so, something or

QX. But we customers not more that mind. have would this don't we meet point QX, in the wins that order the have alarming plans say expect us wins certainly my by I now early end at design that are So, or I to by it's would that, indicated we very in of to now, would that

follow-up, quick the think to that Telecom. China on I you seen you've a relative just then slowdown mentioned And Okay.

see to starting sequentially You're move that up XQ. in

having on chain the being you it the chain restrictions but are that's having or other routed deploy supply customers hearing driven by worked to anything customers and then the Just more is it through Huawei, the the wondering, that you're supply - significant to network? is is for customize product other through more in

good want that's to we're we What caused be regarding saying customers crystal question. band whether there had because that significant trying that in make that of are say Huawei's sure were on deploy band, those to deployment with of plans was any necessarily disruption not our able speed ability our to unexpected It I that try plans clear and their with try is is to to a really nature use source. intention that to that Huawei their opportunity to reassess say uncertainty networks. Yeah, we're to the Huawei customers' to the the still our to achieved, take what a an pause either to alternative or Huawei.

had out that necessarily that they scramble the wasn't to they so to make was if much sure So, the a and need had of whatever be that that you had sources, to figure timeout, light plans to it in we band. find we it alternative will, take Huawei customers to didn't they changed whatever simply that

placing orders. the we have recover increased customers customers And China. in our about indicated, seeing begun we place that sense as related order in have that to some remarks as said, yet XG orders and that begun So, you that being haven't of our the seen, indicated to prepared to us are is to talking flow in we're what

year and to China networks QX, towards the in optics sizable comfortable the that's that, activity still a see of probably in in in increase we're compared more now. that probably expect fairly that those and QX amount then pretty some in of What used sources now we our and the in number is will end recovery from hearing feeling we're therefore XG of So, we QX XXXX XXXX. the towers,

similar than towers of expect a in anywhere the to from that XXXX. that XX% We saw be higher to increase in XX%, And optics what number would deployed. we number are the deployed of indicate

slow of off in we QX. bullish year getting a what albeit, somewhat So, we're better XG China. pretty start, the on certainly but saw to than in

Thank you. Thanks insight the for there.

from Securities. Please The Ryan ahead. next is Rosenblatt question from Koontz go

in gains TV to do sporting? Any for whole your optical more more in node by CapEx there? lot. MSOs thanks But the you strength on really question guys a it Thank question. cable share Hi, or you spending designs you there, mix thoughts more attribute the tribute a doing change segment to Quick the of Do doing on well? that cable you. no not

Yeah.

We've node spending think lot like to in of and and some TV products both. and that it's other been of I rollouts. related a these new time products effort including things cable sub-assemblies developing line amplifier

would occur some have expected for start So, time we've our these to rollouts we and engineered accordingly. products

I several I in the also previous years spend it's business believe is dramatically. happened ago. cable have we that TV the from observation XX XX their generally have were been but deployments market doesn't CapEx years, XX, years they MSO So, for much, what that now AOI, cable cable and the observation in CapEx picking where change the nearly share the But say that that had areas up I do the and had let's the I believe that MSOs, the can change

we're network. right type in CPE applications So, think investing shift seeing of to spending sort and maybe from I a certain now office in central the

going of and So, it's think the and feedback, so because shift combination I spend. shift gains share that's outside a what to their felt it's indeed combination we seen based and develop products spending happen and both MSOs their in we the building on that a again, start we're the right. plant We of on related,

do some design there's looking kind for upstream of Yeah, differentiation imagine think spectrum is, what some and the requirements of more meet? capacity? you is plant I your to around have and mean, you expanding in the addressable I changes

And aimed the of these I of absolutely. purchasing requirement, indicated for the direction. increasing our at That's customers that that amount and equipment deployments. most amount to the as no, mean, are of you bandwidth. we're an the the deployments squarely those absolute of and Yeah, are that specifically, deployments aware bandwidth return

on Thanks Stefan. Congrats so helpful, Super the quarter. much.

you. Thank

Northland. Please from The go Tim Instructions]. next Savageaux [Operator ahead. question is from

Hey, good afternoon.

of question kind First on mentioned you customer base, of topic customer cable me needXX% is TV. and overall the you for in diversifying

customers. You've got X% new also apparently some

I think in thanks to disclosure some filing. very helpful your transparent and

On application of the just And some on side, thought haven't the we commentary. equipment if assume the might able I'd any we name network cable data But customers? you you color that's, significant on of customer. on discussed gave router if there, yet. to be I I color new TV interface operators client your cloud whether you be titan, another heading similar center Any might that whose pretty center. type is supplier, into the on or get for center kind data I a great interested add wonder had the color data one was guy a these application switch

selling a vendor the it's largely switch center. into data Yeah, who's

So, lot and some enterprise. some of hyperscale, Tier-X a

the been operator, [ph] we center the assume on and of in of the color ADM in direct terms discussed bigger any then guys there not it's should that past? one Okay, data have or the

fairly operator, a It's large data U.S. based. center

XXX? that so and digestion I then gig, and with XXX your could seems and your of potential or at XXX think number it business, there, inventory well. seems inventory. for XX there as as that's in XXX like particular, at slightly of the it. a potential and one, XXX up, of And the to a recovery sort issues around and QX in And think uptake, I it's guess couple cable on that potential at Got congrats relationship notable and be you like guide diversification mentioned, It separate situation then an you telecom should regard flattish business small. between is gig preparation But look ramp down. inventory has datacom be gotten there a to the I And potential gig a uptake XXX

center and So, QX as to business data XXX are recover initial gig that out of factors, a and result XXX recovering you both expecting in and or perhaps those slightly decline then XXX? bottom of a

China in is terms caution, in factory. our is QX, I to out that keep your just QX of probably in accurate. mind sort done comes of in Yeah, cable center TV cable bottoming think QX, largely our TV, when would data production spin I characterization on it

So, New holiday. have Lunar we the Year do

TV produce And days raw so, in number capability other our limited compared QX of in segments. in to product cable is to of terms segment the just

mentioned have I demand. we backlog. earlier Now, the pretty about strong

in stay, government's of factory, stay employees China, discouragement of at disease. Largely, So, spreading their this we that's as the to returning for to in fear least year lot years, to of and nearby the long distances more a and relative other opposed also either Chinese our the or had to travelling COVID due homes.

most past. But produce we track we relative do cable think have least are I have we largely to So, product these where that's in is on than Chinese TV and New in where better we're week that nevertheless, and years to of somewhat can't that a at manufactured. - Year have result China, product products

we're that now slowdown of to second will that of last large contribute whether from our there. volume likely chain that really because and driving to and the in Well, But mean, do has to last talked our ability in of working to there fears in getting be part shift anything those well, our the believe don't TV customers is XXX peers see that the XXX we've QX. that of up, in both mean, the think deliver well if to somewhat or was would middle And we demand more about we there in and that that of a significant will to cable I ramp, very expect, But gig. shift placed half to home combination year COVID. revenue. gig disruptions, those contribution believe of like was prepared is in I right call begin certainly of that that I it I purchases slowdown related the So, our it demand, remarks, year. to successful saw XXX not, to I in had, the then do certainly COVID. gig of will earnings wins, certainly, again, I in as constrained is we ramp said, start disruptions, gig were with the - be the chain supply a supply because the because that XXX

our trend was of a saw the from And necessary that by to thought the lot working the that to customers year, of. of working out, longer what levels was therefore, of not accumulated chain. certainly fearful end disruptions think the be that supply caused believe they I inventory I of that terms a were they'd no by were they the played support in patch tough don't their supply But that magnitude from home. demand there chain home

QX center. in why that's saw So, and QX I in we data slowdown think really

drive get think QX in hopefully then gig of second XXX better in half the a year in segment. our I it'll and a the lot will performance of that little

Great. much. Thanks very

Thompson question-and-answer turn any our Dr. This concludes remarks. Lin conference for back closing would like session. the over I to to

Good us afternoon. Thank joining today. for you

to you As forward employees your thank virtually look many investors, of customers our continued And we our upcoming support. investment seeing conference. and for in you always, to

attending has presentation. today's you The conference concluded. Thank now for

You may disconnect. now