Monolithic Power Systems (MPWR) 29 Oct 212021 Q3 Earnings call transcript

Welcome, everyone, to the MPS Third Quarter 2021 Earnings Webinar. Please note that this webinar is being recorded and will be archived for one year on our Investor Relations page at www.monolithicpower.com. My name is Genevieve Cunningham, and I will be the moderator for this webinar.

Joining me today are Michael Hsing, as CEO and Founder of MPS; and Bernie Blegen, VP and CFO.

During this webinar, we will discuss our Q3 2021 financial results and guidance for Q4 2021, followed by a Q&A session. materially course projections webinar, uncertainty, that cause to the forward-looking will which In views results and current statements involve differ Instructions] of we today's make could and [Operator expectations. management's from risk and contained the today. release statement the earnings Please refer harbor in to safe published Form results filings, release harbor August filed Risks, in statements XX-Q XX-K uncertainties actual the and including and identified XXXX, are QX Form website, are that factors differ other earnings www.monolithicpower.com. in X, accessible contained SEC our in our cause XXXX X, our March could to the which on our XXXX, safe through and on filed assumes MPS on update provided information today's obligation call. no to the

interest and income, and performance discussing the a GAAP. between outlines releases have our are a and and as release, with with investors the tables refer on substitute for not on income we be GAAP be financial A to other both superior margin, that should I in earnings measures accordance in reconciling measures XXXX to as measures will SEC. financial that are included non-GAAP GAAP posted financial R&D measures would gross the and the of table QX earnings website. which non-GAAP GAAP reconciliation prepared QX the in income, XXXX, not filed with is to basis. and prepared QX to These accordance financial non-GAAP XXXX well a expense, net We operating operating SG&A or expense, considered as our

Bernie to Blegen. Now over call like to I would turn the

revenue the quarter XXXX of in Thanks, comparable quarter and $XXX.X XX.X% Jen. in MPS higher revenue third than than of record quarter XXXX. higher million, second the achieved XX.X%

and second XXXX quarter of meters our XXXX at revenue industrial sources. the XX.X% of third due million $XX.X revenue quarter Industrial revenue. market, total increased our for represented XXXX, primarily XX.X% industrial from power increased revenue third of to quarter by Looking revenue

$XX.X revenue demand. of of quarter communications XX.X% storage XXXX of infrastructure second the of quarter second was increased primarily our MPS' sales sequential storage applications. revenue. of or growth sales Computing The revenue. of XXXX revenue up quarterly gains the and XX.X% our third quarter revenue reflected XXXX. Communication computing represented from primarily in from revenue XX.X% $XX.X XXXX Third increased quarter million million third market, third million storage $XX.X and XXXX, represented quarter to In quarter due XX.X% total

applications $X.X XX.X% continued lower Third XXXX the the in third quarter reflects fell In automotive of sales. grew reflected XX.X% represented revenue lighting XXXX quarter This and our of decrease ADAS. second X.X% revenue second Automotive XX.X% revenue in improvement million gains markets, handset $XX.X for This in consumer over million consumer or total from of revenue. $XX.X infotainment, revenue XXXX. quarter of XXXX revenue quarter Consumer quarter million third MPS' third our revenue quarter XXXX. of of was reported revenue.

the quarter reported basis the from of the year third XX.X%, higher points ago. quarter of XXX XXXX higher the Third the and XX.X%, third basis points for the basis quarter quarter GAAP second margin quarter which than XXXX and than gross margin second points XXX gross was XXXX. basis than a of percentage XXXX margin was quarter than higher points XXXX gross XXX XXX Non-GAAP of from was third higher

XXXX non-GAAP basis litigation quarter on million a and GAAP $X both a a margin included Third gross settlement.

and second than margin non-GAAP XX.X%, points onetime would of with Excluding quarter third XXXX. higher flat basis XXXX this XXX quarter of essentially benefit, have been the gross the

the in quarter and second quarter GAAP $XX.X million Our $XX.X to compared reported XXXX operating million of million $XX.X income third in the was XXXX. of reported

in the operating XXXX Our prior third the million of in to quarter compared million reported $XXX.X reported million non-GAAP $XX.X XXXX. $XX.X was income quarter quarter third and

Let's review expenses. operating our

Our of compared quarter million XXXX and the with GAAP $XXX.X second in million $XX.X were in expenses in of $XXX.X of million XXXX. XXXX quarter third the the operating third quarter

Our from $XX.X XXXX in reported production quarter primarily $XX.X spent expense operating and qualifying an reflected unfunded in we income R&D XXXX capacity. XXXX. quarter deferred for up operating $XX.X expenses or and and discussed from GAAP loss operating plan. for increased of QX The sequential million are up increase differences foundry the in third the primarily spending expenses stock for expenses The parts the second compensation the and non-GAAP million, were between million quarters on quarter non-GAAP the non-GAAP of operating third in in expenses compensation securing here

stock the For with line. sold charged total the compared in Switching cost was $XX.X to of recorded bottom $XX.X million approximately $XXX,XXX including expense, goods quarter million, third compensation the quarter of second XXXX. XXXX, of

$XX.X or million. $XX.X share per $X.XX of or per $XX.X the QX million GAAP in million quarter per fully million second compared of in or $XX.X or $X.XX share of the million XXXX. the per $X.XX compared with at per Third end QX income or of in share XXXX XXXX diluted the diluted in were net the share $XX.X outstanding and XXXX. was third was non-GAAP second quarter diluted quarter million quarter million $X.XX share of income shares or $X.XX with third fully share net quarter XXXX per $X.XX $XX.X XX.X Fully and XXXX

the at $XXX.X end the $XXX.X second the balance of XXXX look were at to at of sheet. of end Now, compared quarter million Cash, cash XXXX. equivalents of million let's third investments the quarter the and

operating of compared with For the XXXX cash flow operating quarter, MPS $XXX.X generated flow $XX.X million. about of cash million, QX

of spending $XX.X lower the at the days was lower reported XXXX than XX XX of XXXX. XX of XXXX million. the days XXXX million, XX representing days the at days two the second end end quarter the quarter and quarter sales days outstanding the third receivable quarter Accounts which third totaled $XX.X than of of ended of Third at capital

quarter higher the at the second the end of quarter of inventory current revenue. the million, $XX.X of nine following of We at calculated the of XXXX. levels of quarter's XXXX of the with a at XXX days and believe as match. our third function lean. second economic which the $XXX.X quarter inventory inventories days at provides have million end higher $XXX.X XXX higher at of the the reported of the XXXX. better levels than hand comparing XXX than days days of you inventory days than On days, days third end XXXX can at were the end quarter at of of we of the Currently, quarter current end remain XXXX basis, inventory internal the end XX the third the a quarter XXX XXXX million Historically, of quarter the end on represented this third XXXX. represented were Inventory Our from the days, second of revenue six up quarter the of the see

are to growth. We return quarter like would to the to working turn necessary to hard of now for the very support outlook to our our day XXX future inventory level XXX I to day XXXX. fourth

million. QX million We to in $XXX revenue are range of the $XXX forecasting

the is $XX.X range to Interest to up the gross in also million. XX.X gross We million expenses million, range I the to following: in to margin income of million million. open questions. of SG&A be and GAAP million million we of to range Litigation million to XX.X%; XX.X%; are charged of $XX.X between $XX.X compensation goods $X.X and now to XX.X% to range million. Fully be expense should $XXX,XXX of non-GAAP our diluted strategy. the continuing margin XX.X $XX.X range In to $XXX.X to of R&D we'd be is in to that the XX.X% for in expenses from stock-based the conclusion, shares. total $XXX.X expected Non-GAAP be million shares including to of range be expense cost sold. approximately expected and SG&A million $X.X GAAP million. execute R&D $X.X the in $X.X will to webinar expect

Thank now Instructions] from open. question begin our Stifel. [Operator like Our of Tore, session. Svanberg would your now Q&A to analyst. you, Bernie is line first and comes Tore I

congratulations and continued Thank Yes. these results. stellar you on

question, First that Is we of? don't mainly exposure about should much had charger be pick wasn't this or sequentially, aware I you the there, sort segment cellphone. was aware on your down cellphones. of, on and think anything that else power segments side -- consumer to, we to not and but talked there

And Hi, I we And and is charger Yes, adoption side. picked up that the a companies. the more in can thought last Tore. It market. they in they fast think, these in on the cellphone we those chargings, revenues few years have some do

some have came in way they that phones charging an and of unusual it's popular. not very still of but So inventories,

follow-up, for problem you that. luxury clarifying Thanks my Great. now. have as a And

sheet. balance secure your in capacity. trying You more have you're on $X.XX about out billion know there to cash I

on And related to buying especially all, growth? securing obviously to of strong years? show So you you. more are to will more cash you that for first very us continue start some update of as that, aggressively equipment on where could to potentially few you the use you next capacity, Thank

All right.

issues. the we It supporting part we for do don't in on billion less you hire just Let testing, the But way have to to people. sales. in time. part expand $X a -- over fab And we of as on And capacity and times, have to me revenues is sometimes the we $X first. -- there, And more is -- buy issues, more middle -- we of fab answer takes there, qualify are each qualifications year the came it matter it's for same the of the expansion time. opportunities still track, middle at also, the need to equipment billion have or to first And the we -- our know, okay. next

the part so equipment. second And buying more is

as our okay? -- now, we in mean, we there, more of spending, we the our -- I our hand, are -- on more model an out out I slightly critical we is okay, and opportunity shareholders, very other investors the the spend what sensibly. are careful, money -- mean, I On a But but lot of about do past are investor, okay? our criticized

our required capacity, to I just much assembly add as if think company. being house as comment to partners our capital and far that and that absorb have up And model to our there remains the build can fabless partners fab as the a Michael's always I order it in that Yeah. of we've was pursued, is

to growth changed that We're now. nothing just of our So rate right has enjoying adapting model. in it we're this

line. I’ll in again. back Thanks go

question next now your from Matt, Ramsay of Our is open. Cowen. Matt line is

Thank you much. afternoon, very Good everybody.

I wanted to question, guys you different a first that to of product ask about have my markets support. For the computing Michael, couple

And perspective, I PC for from a I perspective AMD to different planning server -- in might notebook my launching contrast know, drive underlying next percentage, assumptions market? kind on a you those one, think then through could what I bus Bernie, a follow-up. the PC if Sapphire guess, from Genoa from launching you And if in next revenue year. what tailwind might the wonder year? kind market Intel for And what are first expectations are of The I of have Rapids, What that, rough is upgrades I of be? could -- your don't year. you Thanks the next market how -- on touch a content could is And come guys.

Okay.

this technologies consumer gain. increased address end gained that's questions, get. of place, the There's small bit And increased we on address the some in our or not market further we it's the side, we of the MPS -- We players. share. reduce lot and pandemic. is side, we side. will And answered high-end we all And me will there the server as high-end but if after tail can quite your okay, the a we for -- generation our our a are market still allow shares and notebook cost, just more we're story notebook to very new with very, the I Matthew. the not the -- of that's And room still our pandemic, -- in the obviously, was we a in it For gaining, --

the I ever And the in rest storage. Yeah. to two have specifically think think of in the broken sectors, what out last that we server one the and any that that the don't the we've revenue each years, But outpaced is categories clear of of of group's track. notebooks has including been that I tied growth percent we

things the we're of from Now having benefiting positioned how that, that said this is one of that in group. we're diversification

sales, and with As both benefit and player we QX, nice ongoing the in we called AMD we Michael a usually of we're processor increase in indicated, that stand data to from are actually market management a a comes when the share gains. is small as centers. core generation in relatively releases, it Intel to element, infrastructure within believe precursor next storage for we out seeing power to servers near-term And more spending the which that

anybody, I So continued because I or work positioned our diversification as or think great that difficulty, think number to in for a from notebooks, a that understanding it to home when years. as ends. this But we're having of relates begins enjoy from work well we're growth of category in work,

you. Thank Yes.

middle the see still Let me And the shortages think side side. that And in the go I don't notebook -- of even. that we in -- from of again, the the we and back notebook lot still I facing year answer. question, see to revenues -- I part the we're demand didn't next can of a

Thank it. that for all much guys. you commentary very Got

pricing Just Bernie, was the much. increases feeling relative And the that QX, pull reason could margins? non-GAAP margin. going very do mean you in on the forward that number? what how a environment price one-timer about quick input with and any that couple to you One, out you gross particular of didn't costs secondly, that to things of guys we're think Thank today,

I'll take then quickly. will the give second. Michael on of that question the half real comments first And

that how what a settlement, reporting, as case, we in cash. was non-GAAP try reflection was As cash highlighted manage we we far received. a to GAAP a be And payment is that to there and this that and really is of

have and the thinking that's detriment adjusting item. behind that if so to it either. a our non-GAAP implications, out we has we non-GAAP that Conversely as not something also so, works And it cash wouldn't

acquisition comp we comp, pretty two have only should to, or deferred and stay we if any stock plan from I a loss gain and the that amortization. intangible So say, closely areas three, are

Okay.

second our how margins is part affected shortages. The it on the gross current supply

these say have we products in, gained released all ago. said, gain to increase I these new shares -- years the me of a do as well, all product the let long-term products. started cost because margins. have And this and And relationship can all we have some we in think, I see our momentum this, much the way market greenfield and yes, value customers commitment, very and gouge higher give fortunately, these we couple And all price. us as We -- a we We honor -- don't of customer a some higher absorb -- forecast in that time, those. cost during the these the margins. so

All right.

question Our next Seymore your open. Deutsche of from is line now is Ross Ross, Bank.

an of me talk market. was the letting a that's question because the strong side, Can lumpy of said going meant choppy the between infrastructure that guys a continued and One be of for you communications side? Bernie that, on segment market continue, really that question. you and or Congrats infrastructure going just been reports ask by you up Michael, Thanks that on kind should end little infrastructure. on you side And or a side. That's for expect start about guides. what the guys you continue forward? off going is to something to bit then access and to the more The

data mean I we're these infrastructures Well, Wi-Fi and and more even Ross, to centers between a you then these communication transitioning switchers in routers like those and in or centers that towers. real from know the data the

we things XGs are then years, revenues. the are see the systems and going this then Wi-Fi pulling And next expansions, commercial So play role all And including areas. a lot these last continue we our we of like and – time, we further and these the in in see the customers a quarters. and a expand see other to few on – the will where critical

Yes.

hit we our long-term it either have But cadence communication carriers now, I infrastructure think within the right investment as in not the constant a sector and of or we Europe remain part to in very about America. I optimistic that particular, the think North on relates positioning XG.

we're So positioned gets participate starts that well gain we to in predictable, think to that more very and momentum as that.

and/or Is beyond? do seasonality that or about Obviously, be for big kind by moves. and it short consider XXXX? you guess flattish the But aggregate? a as this follow-up, as those bit to become color. So believe supply you kind quarter better my have fourth are as investors Thanks going of seasonality is mainly supply-driven to something cyclicality driven be go we in your would product guided going that that your traditional framework how we than you should cycles year. go of versus that's tailwinds, into has a seasonality in I year into next thinking

quarters, I opinion – of still facing this still these exceptionally Well, of we will mean, kind like in – mean. kind we're also think I my constrained Ross, And it you market by quarters many mean, that I delinquencies. us. mean, strong is I for affect all demand see for like market, the supply. of mean the lot we have fourth I – like because – seasonality and but do holidays, we that's And And a everywhere, is and these all so have a some an delinquency have is I are the

see the so And we – demand as we is said very the see I strong. still earlier,

So we and are guidance. mean like I cautious, we're on just our

ability, do add experiencing be that we're will we growth this participate, right and because we the demand optimize to that to our believe what that and do our investing now, continue, capacity to that just able is is And best continuing to to want are we expanding of robust opportunity. this to

is And and mixed I have few have the let these some issues. All shortages, a thousand – we don't as a don't – – always for me that facing mean we a we clarify products capacity the shortage have issues. in few what are okay. that fab serious with are but now. have Yes, may we – have particular all product these shortages And have – – we that a products mixed have

a it So – just fab, different to this. and to qualify as transfer we time takes

Got it. Thanks, guys.

is next open. line your William Alex from now Alex, Vecchi Our of is Blair. question

rate just on sequential about market strong can of Ross' for seasonality. color little on Congratulations question the market to Maybe bit a Hey, Bernie, guys. end weakest? with maybe results. growth think little end should a you we to give in QX on strongest how by terms piggyback the

Sure.

you QX, the and continuation a to think So, going expect would at automotive. drivers to look expect that when then primary be I consumer. downturn slight and computing you two And are normally of in we see

think lines familiar been. ongoing, with the what many the might down we're the So, a of I little or that continuing from trend amplitude seasonality be and are traditional has but up

quarters, OEMs. that's X pointed I Great. generally, a there then X, XG should geographically? the eventually couple crack last positioned to Tier over And you similarly, ramp as I Tier that guys believe helpful. be well line up opportunity of the on think just communications think the have we How how or into how you're next about thinking year to about to to

Yes.

all designing are And now. segments. We we Xs still are mean small these big growing like Tier in market I in all -- so

in XG, a we'll expect As have significant you know, we anything in and that be there. players don't we

Okay, queue. helpful. With that, back I'll that’s go in

Okay.

Needham. open. your Quinn Quinn, now of question next is Our is line from Bolton

guys. Hi

been of disruptions whether guess quarter or looking third my package Malaysia I offer have a whether exposure in not quarter in here could test ability Asia, ship affected the you Bernie, know fourth products more there or lot side. the and or to Michael Let Southeast you just to that congratulations. if receive me on I to forward? say the wanted subcons your any have I and Wondering or -- in

much products, control not own we There's control affected mean -- of Yes. a technologies. it. that we lot not some package our new Maybe I product, so because -- the our

different qualify we in so And always a locations.

problems, of -- much have can go we that came in Southeast that we the through We okay, so it. issues. Asia And didn't

in Correct, QX. outlook for our or either QX

Yes.

customers like sounds seen that the earlier. My not ramp that ability those mismatch fab it. online, my lead rate accelerate could to as potentially Got an chain continuing constraints all your potentially quarters? meet by what it on or it you'd as I sequentially. as some versus really some of inventory mix guess that do $XX the increased to supply comments, capacity in come just see former it see have that And of think that, you you growth that inventory for you down to that you -- demanding comes what are is from on acceleration you're question you your several and meet hand, delinquencies, in product second delinquencies million does question revenue seeing is, of inventory

Yes, we or out-of-forecast And we're and we -- up can -- have as today, off we doesn't we the chew a -- of to absolutely. as product And new blue on but much, I so skies. And shortages go expected, we it. we we forecast normal cannot products as I mean answer your in can't orders now, have a ramp we fulfill. that. so now. -- understand adoptions lot these today, so not the our all have and ones, regulators, mean customers question, that than greenfield the And a and faster more much

can because that add, opportunity they have market. be it's company. that the future products appreciate, be markets growth can is as successful, we're already some a to what make act, trying you to growth mature and to for current because But a introductions Just new the going for do these developed in product sure that is the we fairly the balancing predictable more have, of

demand, at launches same product heightened have business heightened So, a new we're time, very period run and the successful with new of satisfy this trying to customers. sort the rate demand, in of

guys to any as Can Do share is opportunity gain in? Chromebooks? exposure I that have meaningful Thank a one you. it. XXXX? And Got last you look squeeze you one into

I go well mean, if make -- a product, we we it's and And might everywhere. design, have. we them as have Yes, local

they're after lower tend notebooks, high-value a be Yes. known go to -- depend on the Chromebooks the processing considered while are good and and are priced. they to cloud Chromebooks to access because we But power. unique,

is power high management, very for It's power solution the our management key. the So a Chromebooks. value

Yes.

As earlier, attacking technologies in. not in all other not our become more mean these as that so I why markets -- we're said can mature, online just bring that

Yes. you. Thank

Yes.

William is Truist. William, of question line next Our now Stein your is from open.

Great. Thanks chain taking the want for outlook. about Congrats and my question. and I on ask to question -- supply I'm long-term great one about growth. stuff results one

chain, on level but if if First, supply as look semis, time. sort it -- to across in we mode seems quite certainly, of sense freak-out all. the wonder not I abated growth I that the colder could a or end market again, we've pull-ins expedite this just that at sort business that about? then of for whether at your requests hotter Is a been have give some you expedite Did us and and customers it the in quarter? long-term regard in with activity urgency any have heard meaningfully breadth of change expedites question. or And of upsides getting to and all

Yes.

I okay. as exactly is -- that the answer that last -- then I The Okay. and mean yes, bit, they and And wish a little quarter down before. they're come quarter the the okay. same

Okay.

the of transition but and over it growth a relative of potential to question, think think Michael, long-term on there's solutions you. this to ago provider relative aware revenues growth perhaps Can percent semi An a with Thank times, we've time? business? modules business. device traditional you your where we're the update long-term So to more that that many discussed this quarter you to trajectory -- modules could of about of go the today talk I

the this our a well, the There there's involved. all in homegrown of are product. of Yes. delivering terms technicals lot end in okay, modules, I MPS -- strategy, gate

Okay, mid it I a feel project, it end it's no -- feels well. there's product, as

We we our move it's NPS for have the a and all mean different the still our I okay, the so launch side captured I strategies entire chips. like in -- a the up But and small, semiconductors like why values. growth, And win compare And we are since like ways games. currently other selling to knowledge volume than our not are faster module it is current, put -- websites food a know revenues. knowledge, much These mean, overall -- they're like or companies, that, the an very sales tried So like company And we are And MPS just also first have we field about adopting better gain think need encouraging. I them mean, -- why it, are we're well. -- mean the we tools, And then, gain using thinking very in -- can e-commerce, -- I doing okay? but very, to I and now analyses. I'm and channels, provide those very, technology, again. attempt with applying

I now. I like can't obviously, mean, So the detail talk

So think that's again, our -- and I strategy.

acquisitions source different that either that through you, can it our be trying do a eight what if accelerate that Will technologies for to seven, talked And that our talent provider business. this to years. customers will remind our just I we is about we indicated complementary And -- or the in acquisitions ability next are touched to on last we're And IP quarter. solutions

like Yeah. I don't just it.

will of put to of we much the piece to $X, $XX, a more We those design should end an customers sell it. to a end, averaging type so really in so those below have knowledge our And sell silicon things. than have from They okay? $X, And much it. appreciate We scratch. solutions don't $X, $X, at well like

Thank insight. helpful you both. That's

now Rick Our open. is of line Oppenheimer. question from is next Rick, your Schafer

call Mok just on on the to afternoon. Schafer. the I for Rick Hi. Wei results. congrats echo wanted is This Good

XX% known unit industry into first XXXX? the production is how growing improving still this that you in my we supply for should look question, much vehicle think So showing auto your though it's about we market nearly in reports pretty regards as so auto, it's constrained guys are business year. to With XXXX, well

is the very -- more we reason, conservative very I we even size. we hand, mean market numbers. addressable is in can well. like are okay? see are growth at And so products. products grow, we not And the -- but at as a we ADAS okay, would That's billion, the numbers. all the we I address developing rosy And, on the There's now. over everything a And we downturns. have conservatively it's no in EV proportion introduce future especially Well, time, that this as mean, really small. that's this looked we is other again, in $X and these, and of --

a So in like reason year, not And not normal like I lack XXXX the so and okay, auto stopped reason no there's there it's say a -- industry tool last just the also in us would I I it there's grow. -- times. mean, not to like is if there's for no a mean, was of like

And at previous question. dollar content these look all we regenerative of I higher for and follow ADAS, vehicle. braking on in we And the to actually much wins lighting. in external us, have just systems $XX automotive, system-level think $XXX to per design solutions When to have

think as is how play strategy us well. different very a I this out markets of So exciting in could example end the solution for

that. Thanks Got Great. it. for

my to second regards for the question, As console. it's

XQ. You guys down highlighted in consumer being

any are So more of supply reflection a of you Thanks. is this consoles? normal constraints or seeing impacting seasonality,

-- us. on in affects QX And actually, the share. the they too in they US like but gain at thought I when highest us. an cell – one in then customer much mean -- Like shouldn't in have that's our like had the I in our the consumer be the in cellphones And China, can market of that they they to they mean side, QX ones, the think embargo inventory side, Well, it didn't. when especially for other phones mean, I the I companies,

they're inventory. And the with stuck so

in tried we that the defined, I of it pervasive dip really prepared is what consumer? opposed that really fast the is charger rest do make as comments but that our And to or more the is narrowly to think more in anything in broad handsets

Okay. Thanks for that.

we my an and the Yeah, of have anyway. in favorite much either that didn't wasn't handsets, exposure

okay? the however years thought But okay, got would we've a and the now it's good. last it So products, not, least in be We okay. why

expectations. those expected demand positively was very been actually has received. trailed imbalance as technology the just as The the well far that It's has

we excess category. and have And for believe a that we're particular so so individual inventory that slowdown they seeing

now Rosenblatt. next is Garrigan from of open. question line Our Kevin, your Kevin is

is on environment. that a broader of for inventory, side PC Instruments take I are behavior and bit they in terms of changing supply-constrained couple customers a of Congrats. This questions. of Kevin. lines their are basis, AMD, Micron, Texas in components think A a the indicating in the Hans on Along how things,

than rather Thanks. seeing being And something you everything that take if seeing? just unusual are Is that selective. get, guys are that? can more So they you is they're

much not do compare a with terms. smaller – are Focus business of but very guys. other or focusing don't Instruments we're don't on only focus. Texas We market too or small, have We We the a players player, segments. luxury the anyway. long small these picking We're short-term

patterns succinctly, any the answer schedule on haven't really To what seen are really and an change your broader don't question or or we other in Yeah. delivery market market ordering our experiencing. opinion have participants

enough. Fair

XXX the capture next can in of has visibility year? it so or end that when Is Thanks. terms the time it Is is And changed? inventory, you that to question, days of last And XXX of that just what back line? get to your XXXX?

that's – next next end the what we good That's I a the this mean the think the Yeah. number. I hopefully, year. to of a can so of at up we goes market – catch end go strong, some continue would if – like the year be

last And is or that's quarter? that pull-in – a is that push-out, a from

I'm sorry?

I mean, way. that about than season, Again, having it pull-in I we're as a quarter, we I I said push-out let's a customer we or said like have still more you talked – earlier, have like mean and delinquency say last delinquent – And push-out. a

Okay.

upon a important the or quarter. think demands we thing that with QX. that increase is inventory correct even in and way this to Michael is saw us are from placed that, in meaningful experienced able what the were change QX we We I no QX in

as satisfy rate us more So an that building same demand the products run we're well business new meeting at again, I gives flexibility. our we're inventory to that act the answer. trying as refer do between earlier back balancing time We to for as more said

you. Great. Thank

Okay.

Next open of line question now Svanberg from Tore, is is your Stifel. Tore

had Yes. few you. follow-ups. Thank just a I

that gross more all, include margin Bernie, QX, does litigation any for guidance First That's... not the right? impact, of

That is correct.

Great. Okay.

to over your are I the of just now, you probably So stickiness they're question an place there, the go they're I assume little competitors to all I right going gaining talk means with discrete a and back bit integrated which is, other the their lot products go share. solution companies, mean you're allocating Can a of that? once assume not they

focus their easy in The product. and for the simple, little they've it, way for consumer high in of to care. And customers, true. market, benefit they when we bit these high the they the -- a that's pay a the they deviated huge And -- end business, more difficult. us. very end that's on. And our low-end And don't a from tasted customer it's we what how solution, I behavior, think other design That's

it. Got

the in Michael, servers segments those course. expect revenue Should talked course XXXX? one get main the you've in just we and two eventually, you'll especially of about, Just side automotive, in some the last question. to getting kind past, dishes. see But main

Yes, yes.

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-- have meaningful many we -- bigger E-Fuse year in keep to happen. that we like And adopting thing year, worth that earlier. came loans heat and I other And next next the this I benefit core centers years VRXXs And cross said the to a we solutions. and next we by again. will dissipations, that we waiting yet And a we And coming ago. I year, in the waiting as we and the the a talking four a AR well, growth like XX-volt three, this and lot revenue about in so point years. a now So of a said and the to VRXX XX-volt next and about mean years, grow forecast about when large of cannot heat now data increasing until VRXX.X. in, And solutions, think kind have they process, the these power, much were and anymore, they mention mean We XX-volt happened. start use about years, we we handle there's and and has powers point called generation, other really than about -- the from had see have of And the lake. benefit we're have end and up

very Great. Thank much you

Thank Okay. you.

Instructions] [Operator Bernie. further back over turn there to like would no questions, As are webinar I the to

like you likely With quarter I'd talking during you, day. call, early conference again thank for us which and February. look this a nice for fourth to all be to you joining conference the will to forward in thank that, have and call, we

Okay. Goodbye.