Super Micro Computer (SMCI) 31 Jan 232023 Q2 Earnings call transcript

Good morning. My name is Devin and I will be your conference operator today. At this time I would like to welcome everyone to the Super Micro Computer, Inc. Fiscal Q2 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks session. speakers’ the will question-and-answer be After for [Operator you patience. Instructions] Thank your

you your may Staiger, Michael Mr. begin conference.

December second Good afternoon discuss which the to Supermicro’s attending ended quarter, and thank financial you results for XX, XXXX. call for

me Chief Officer, and Officer. and Founder, Financial Executive Chief are Liang, Weigand, With today Chairman Charles David

Company’s that received and the at close regular trading should By of news distributed now, have you release was the available website. on the is copy a from the Company of

the of Company also is Events call, refer website As to in our that a today’s tab. published reminder, the presentation will available on commentary the website. a during We’ve under scripted Presentations & Investor the participants management’s to Relations section Company’s

discussion those consist without and the Please future statements, of outlook, including revenue, today regarding expenses, forward-looking XXXX. and business note expenses, guidance fiscal full some during including will taxes, the that of other limitation of year margin, information gross fiscal the for operating you’ll allocation, XXXX income and quarter capital our third hear

number materially of differ cause future could Supermicro’s risk that factors to a our results expectations. from are There

recent You filing and these more in most the can for release issued filings. earlier afternoon, our other learn fiscal we SEC XXXX, risks this press about XX-K

outlook. presentation are today’s documents will no Supermicro’s website. refer obligation Investor non-GAAP available We these of of Relations to All results assume statements. forward-looking to the on page business and Most of update financial any

non-GAAP financial our of please our to today. press accompanying an For earlier or to published explanation measures, refer the release presentation

the for questions. analysts in to Q&A is release GAAP will prepared reconciliation in a results the today’s end today’s sell-side information session remarks, today’s and of a we addition, supplemental ask In of have attached to contained presentation. At non-GAAP press to

I’ll turn over call Charles. And to now the

Michael, everyone. you, and good afternoon, Thank

of and the This outstanding customer quarter XX% another eighth announce more contributed of outstanding to customers, our markets than end effectively revenue. by is doubled our Supermicro, pleased driven result revenue. quarterly products. am annual I No growth that strong contributions across for diversified Today, single consecutive our

the key some share quarter. highlights me Let for

the billion, above revenue $X.X guidance billion of quarter year fiscal year-on-year, $X.X range XX% to totaled of $X.XXX First, our for billion. second XXXX up

Our fiscal high production $X.XX This that possible far year-on-year operational range of $X.XX. second by our XXX% cost. to made grew at lower ago, discipline, compared share Taiwan year of earnings exceeding campus $X.XX over much-improved $X.XX a is non-GAAP our including operation end great quarter per the our and and financial guidance achievement contributed to

IT and increase grow XX% continue with With market as year the Total solutions our also gaining systems with than share. continued we GPU growth year-over-year more to products Rack-Scale be based strong growth. of traction Plug-n-Play contributors significant year-on AI applications, Storage are to XXX%

respect we more have strength soft of we always with and We the competition are the mindful from to of that to and The continue ability become market keeps in QX given share past. us business confident in our fundamentals traditionally are in our quarter. gaining customers have deal partners our products to these macroeconomic with cautious headwind, prepared and increasingly many uncertainties as

should product our strong We with for plan start changing our persist Having last revenue year be compared the fiscal the believe without year half said XXXX, that, in our half the the year to the ramp business Sapphire expect XX% high in our growth middle as calendar first new recover second XXXX coming of in in headwind lines in Rapids, of may the HXXX quickly volume. growth but year-over-year will years. Genoa product business we and

at of XXXX, year-over-year year targeting fiscal least we are For growth revenue XX%.

efficient across as well customers. ecosystems new demands as enterprise for customers, the rack-scale tier-X, increase energy other see datacenter plug-n-play We tier-X solutions continue to

level system our in interested rack installations. and computing HPC, their for Some highly of and them are cooling green liquid cloud datacenter the at

addition, they paying are strategy dividends continuous our to and Total investment as IT service switch grow. In our software, in

Valley Silicon and in and to LXX optimize with services. rack-scale software, volume campuses LXX, continue LXX Our networking ready their Taiwan and systems production to deliver processes,

still still the more profit will even cost our and production more has the our grow recently X to Malaysia high-volume and stronger quarters U.S. campus Taiwan very of away. glad XX% accommodate X XX% future, better years. in through contribute midterm I growth be will new the for capacity to new Our capacity has scale while Malaysia from with to to new that margin in and am facility lower near customers. To ready two just one economy headroom operation broken-ground next campus our start

the gets investment. tough, When their value looking IT for tangible from time customers are

power value of the our Green up requirements of the generation the rising technology, With XXX new watts true each are and on to on we CPUs with XXX watts effort. seeing GPUs, now the Computing

portfolio We operation impact, to reduce support environmental for new have OpEx. ambient and costs cooling-related added cooling both high infrastructure the and temperature liquid

happy total our direct are We solutions cost with of of have as result. saved speeding Computing Many up already deployments many their millions see cloud customers them tens dollars of a to methodology. electricity more Green in

to per of we expect them years by and even grow through the watt We as deliver generations dollar superior quarters performance and performance, faster per products. coming new

our green trees power industry in save or close to develop possible adopts XX past, solutions of costs about our up to ours, fueled fossil preservation when billion shared which and IT have to equating year, it’s I Green equivalent per As electricity eliminating in is Computing like X plants of up planet. solutions the the for the billion $XX to

see the Enterprise, we XG/Telco Datacenters, Learning, Machine approach and IOT markets. for Large half AI, more fiscal across Storage, XXXX, diversified our growth Cloud, As opportunities we second of

some programs all have started convenience automation around of finally the to the world. platform. the XX-hour from Supermicro BXC this advantages services, many up around-the-clock ramp intelligent time efficiencies communication, quicker offers. new program we and new online from responses, With happy online BXB our are database-driven offers support see to many direct tools, that Our precise and really are to customers real of the service and just order and customers cost

Scalable recently Xth processors; market-leading supporting years. base these the more Gen to are Unlike NVIDIA few Intel coming we samples growth industry’s quarters we Xeon confident product in and our the expanding most our maintain and Genoa demonstrates many customer Gen Rapids; solutions. GPUs, is momentum Xth With extensive launched steady now. enhance taking generation’s and and customers of HXXX, This EPYC, AMD Hopper, Sapphire portfolio see product processors, last ramp seeding up, units strongly currently new our

and revenue so more quarter We June stream the expect in a to them and by significant September become quarter the beyond.

NVIDIA be optimistic that the for we innovations expand developed remain in demand foreseeable future. as and will Metaverse, Intel, architectures AMD, and excited AI, Supermicro, IoT/Edge from latest the will strong for market applications Omniverse the With new

rack-scale a demand, expected will than our especially never it market had today our with our now, software, generate to With than been Along We headwind. offerings, getting quarter. new December stronger macroeconomic potential despite generation better position service has stronger switch share more strong with products of a solutions. gain in and the

we million buyback allocated today, With $XXX and our strong cash especially total have program. for stock PE, position [ph]

gains. as emerge Total of the continue We share Solutions one suppliers market with IT to largest global of

a Silicon system are technology. on innovation Valley We green company and focusing

a cost-efficient in saved our annual and for than tremendously. continue have remain on and our run. campuses to still Taiwan Malaysia, to revenues coming expect customers’ growth capacity XX% we track XX% the our available coming With in to objectives growth long we XX% year-over-year $XX the in of OpEx the more Our more efforts soon reach years, long-term billion

David? call David the pass the quarter. Financial to will additional I Now, provide our Weigand, Officer, to details on Chief

Thank you, Charles.

to $X.X pleased report at billion range updated revenues of recently end to of our year-on-year billion, X% and up high our initial of billion $X.X Revenues down $X.X billion were of range billion. $X.X $X.XX am fiscal I to XX% XXXX QX guidance sequentially. and the

I’m new be and fiscal and revenue vertical, GPU/AI to year-over-year adopting good the Solutions OEM customers In solid our which vertical largest the QX, and Total existing two model. of margins. enterprise/channel margins our growth rack-scale record demonstrated continued in and systems vertical operating resilience Our verticals: our contributed we OEM enterprise/channel widely the growth datacenter to which appliance/large by had IT and -- business gross driven sorry,

XX% our XX% of and million past quarters The on quarter-over-quarter. with XX% representing up in opportunity Enterprise is and solutions quarter, our four this no XX% wide and was down up more a large growth recorded appliance up last XX% versus QX year-over-year $XXX quarter-over-quarter. QX and OEM revenues of Channel year-over-year customer represented million vertical, representing AI/GPU than datacenter representing XXX% AI/GPU based revenues platforms. achieved XX% the $XXX $X.X of and of vertical last revenues, range of XX% XX% billion versus XX% achieved revenues We quarter, We computing accelerated revenues our over significant of than in more QX revenues.

revenues, X% achieved revenues representing in of X% last segment XG/Telco/Edge/IoT emerging Our $XX QX quarter. million versus

revenue down and X% XX% Subsystems/accessories represented were XX% and up down X% quarter-over-quarter. revenues year-over-year Systems and QX year-over-year comprised was XX% of up and X% total of quarter-over-quarter.

On decreased, customer the mix, and node a on mix. node nodes ASPs System while ASPs and increased again, nodes as product and as year-over-year to volume while due the shipped basis, product systems systems basis, well quarter-over-quarter increased shipped and System shipped due of customer to volume a of

increased increased On XX% the look U.S. QX and XX% a a Asia increased XX%, Europe represented basis, XX%. XX%, XX%, XX%, X%. and increased World U.S. XX% On XX% XX%. Rest increased World Taking and Rest increased Asia basis, of geographically XX%, increased a decreased revenues, Asia revenues fiscal U.S. market of revenues Europe Rest quarter-over-quarter of in of Europe World year-on-year

unchanged The to leverage year-over-year QX was lower up quarter-over-quarter XXX price discipline, was XX.X%, higher was and points costs freight factory utilization. non-GAAP that and from gross margin basis due

quarter-over-quarter XX.X% to expenses OpEx look QX basis ago to million. $XXX from the expenses. a basis, platform increased by X% On credits that last The we increased a on a year-over-year due lower margin quarter X% X.X% operating decreased as higher decreased benefited operating and sequentially X% at we a year-on-year $XXX new was million. non-GAAP GAAP marketing quarter non-GAAP operating year OpEx to and from for the operating XX.X% versus X% quarter-over-quarter launches. received Taking expenses, NRE and decreased and

decreased lines, million Other sequentially primarily $X quarter. to short-term we expense QX was an last income weakened $X million of $X was as as of rates. consisting reduced million of and increased & compared by expense expense the credit foreign-exchange interest million dollar expense interest expense $X this partially during in $X in FX Interest offset in approximately interest losses and as gain million

QX tax basis for million The for basis. and tax GAAP rate provision $XX GAAP a non-GAAP rate tax was XX.X%. million QX on The non-GAAP a on was and XX.X% was $XX

benefited sequentially lower were rates discrete from tax as we benefits. favorable Our tax

quarter. was our share to last compared of venture of from million a $X.X a joint $X.X income loss Lastly, of as quarter loss this our million

EPS XXX% diluted the non-GAAP QX recently of $X.XX strong guidance range the end up high delivered down exceeded X% which and and $X.XX quarter-over-quarter our to guidance of We $X.XX and of to was $X.XX. year-over-year of updated $X.XX original

was to maintain efficiencies outperformance NRE and our and Our ability EPS attributed manufacturing gross to higher marketing credits. margins,

QX metrics sequentially our Accounts Turning by while at due quarter-over-quarter by was $XX and XX outstanding increased sequentially receivable of to to the days QX. cash down sheet sales decreased X one was to working was sequentially days payable quarter, while million. is days supply-chain. conversion compared million versus by Days $XXX accounts a cycle more Days balance stable day to down Inventory XX, last capital XX day which unchanged by

X to payables down came by outstanding XX days days.

versus from flow $XXX QX, fiscal cash In positive operations million million in of QX. generated $XXX we

was million, during $XXX debt $XX the repurchase Our operating debt have QX $XX in We flow deferred quarter. we back We $XX pre-payments the $XXX until cash sheet $XXX operating XX, million during resulting of as positive cash January share million and any note recorded of position benefit improved million million positive to versus closing free The as that flow revenues. last and reduced flow in to was strong chain. in did shares an in quarter short-term quarter. cash cash authorization paid supply million XXXX. revenues QX from margins free $XXX down balance million while from million cash buy was customer bank not benefited and $XXX for CapEx continued flow

Our the repurchases. Board will timing amount determine and of share

for outlook to continue the global the situation. Now we to watch business, macroeconomic turning our

platforms to Additionally, anticipate AMD, from -- normal eased the and chain industry patterns. the have Intel, normal transitions seasonal XXXX, to during return new supply as we NVIDIA disruptions

share expect share XXXX billion quarter net of the $X.XX For the third billion, fiscal to we of to GAAP of and XXXX, range $X.XX per in $X.XX. March to of net diluted diluted income $X.XX $X.XX ending non-GAAP income sales net $X.XX per

to conditions. be margins gross down XX to macroeconomic We to expect due points XX basis

approximately compensation in NRE $XXX are expenses GAAP includes from million to R&D expenses other excluded lower due are operating be expected diluted per non-GAAP QX that GAAP expected income expected personnel in are operating and higher common which net share. expenses and stock-based credits $XX costs. and non-GAAP to to million, increase

to We million $X expect interest including venture. other from our be nominal expect loss and income a a net expense, of and approximately expenses, expense joint

diluted The rate XX.X%, rate a of XX of Company’s per a GAAP net projections non-GAAP income GAAP non-GAAP. for million for million and GAAP tax shares tax for non-GAAP share count XX.X%, fully diluted share of assume a and XX and common

to for CapEx XXXX of expect $XX the fiscal the of quarter million. to We in range million third be $XX

share net to per $X.X we’re The from for For Company’s range maintaining GAAP our from a rate to XX, of of non-GAAP range guidance of for annual net XX.X% rate to billion per a non-GAAP of of $X.XX income a diluted diluted a a the from $XX.XX. fiscal June GAAP income $X.X billion, income. assume $XX.XX and $X year XX.X% revenues share for projections XXXX net income XXXX, range tax ending and net

of are ‘XX, excludes for assuming million share fully diluted non-GAAP. for GAAP diluted XX million $XX [includes] and shares year we for approximately EPS GAAP fiscal million shares fully outlook XXXX XX For The a year in (sic) fiscal count

expenses, expected excluded diluted other stock-based income of from compensation share. effects and common that per are net non-GAAP net tax

share driven gains, growth confident significant new by engagement for our design and global market new remain and outlook customers. platforms, with in wins, robust We leading-edge our long-term profitability revenue

ready we’re now for Michael, Q&A.

Nehal [Operator Chokshi Markets. from Northland Instructions] comes first with Our question Capital

you margin. mention Q-over-Q to minimis strong mean, I that you de only pressures. guidance And basis the Yes. the on due expecting gross amount. Thank Dave, that points and that downtick congratulations you’re margin, gross why you. a results, discuss especially of Can very that’s did XX the amount? implies macro resilient

Nehal, margins Well, are our holding up.

in We expected but it QX, a happen. this didn’t -- downtick last

for in margins we and are But on allowing case up. sharpen to still our pencil otherwise We’re a have prices deals. downtick some particular holding just our

So then, to what up in are think macro be you pretty quickly can indeed environment? you talk why appears margins deteriorating your holding about

the out, we that are increased. we fact, pushed And, -- designs out And that have that are with all certainly we customers our have that value Well, value bring -- has is that customers. in orders, still Nehal, to but diminished. of it’s new not coming believe

Got ‘XX you’re that’s guidance then, at you’re year above in my the great. quarter outperformance fiscal it. maintaining And That’s December despite your providing and guidance least March expectations.

that Should implied guidance, should the the year interpretation? of situation pretty we how reading Q, -- you basically? could low end at June the be margin So, be fiscal gross that be looking at June correct Q we a we dire is if guidance, within ‘XX take

our that Nehal we -- say we to guidance. want would I No, really are update don’t

given. We’re that confident we’ve the and in our ranges guidance in

fundamentals -- and the values basic confident so And our just bring. But we’re macroeconomic watching our really in products remain business that we’re our we situation. -- in the values

Okay.

clear, reasonable is to for a basis what’s the of margin to in no correct? is be or lower, the XX% arguably gross would your believing quarter, to low-end there that June XX% drop that of target sale just So model

So we as -- our mentioned. don’t any now, we degradation gross see I right of margins,

a is And believe in -- And so ranges. confident like we feel remain time our this our in we them. update -- don’t but we to

large made at year a Charles year-over-year least ‘XX he still ‘XX then, or mid-XX%. revenue But range a fiscal is overall growth And XX% guidance year that fiscal taking bracket. comment your expects pretty be

reconciling So, these things here? how be two should we

the Nehal? of mid-XXs, Well, still falls I Right, number that range. within think that

Absolutely.

Yes.

think I an indication. that’s So

with question Baruah comes next Loop from Capital. Our Ananda

I could. if Yes, just a few

I is Street guide, is raising actually, -- fiscal slightly March the is, year where the of is where maintaining the midpoint below So, Street is. think, implication June above

side? clarification. we’re of March so, side, the we it just had high -- kind I’m Just the Street, we to is really low And to of are Well, And June? we’re sort of, and part low a miss-modeled think a miss-modeled side? to June subsequently, the and like miss-modeling I March miss-modeling this, also matter of

couple that thoughts and Just have I follow-ups. on Thanks. your a of

Sure.

So push-outs, QX we’ve kind feel -- seen back things we annual been had like, go again, economically have be some we more adding not again, cancellations, shouldn’t changing or I’ll and -- we’re guidance. details we push-outs, because and of some on

And really, so, we where like guidance that feel ranges allow we the will we think for performance gave land.

And not clear see, are are specificity so, -- to to more that, as not a details time when at to give wrong think we is to to way go. the easy

on we we’re we’re instead, our what again, annual so still quarter And with But good comfortable in ahead. see the guidance giving guidance.

accurately, I sounded something about just half actually please and about you first me that of you? this half macro of say, ‘XX Charles the And calendar it being is mentioned, believe sort if returning macro also of calendar ‘XX. clarify Dave -- And guys recovery the comments if for this heard you I software, And made year in part think, calendar softest second year is seasonality. for of to kind the that of to envision I but inaccurate, the

how And outlook? unquote, contextually, that think And seasonality the fiscal ‘XX spot, first guys you begins thinking year half, you, about sort so so want normal I to half dovetails you is into plus second ask and guys just quote your recovery soft is are of that it?

now. is headwind issue to concern Yes. everyone some Macroeconomic

Genoa; know, is Intel other So you just NVIDIA, strong, indeed, AMD, Sapphire HXXX. demand announced our and Hopper, Rapids; still pretty that, than especially as

we we very have asking this a available. seeding. So aggressively saw was early for customer simple And very strong time, products

summer in model growth timeframe. these however we even should very growth. be in put believe big were -- summer about in after big or the So, And

strong summer. especially after confidence, So long-term, very we have a

more to cautious. on macroeconomic headwinds. summer, Before We depends be try

mentioned that I you Charles, centers more ‘XX. incremental more for accurately? Very heard I I it you for that? me, potential hear And provide last in centers, context half data around if second And, accurately? are helpful, could calendar those of large the Thanks. believe data Did any And Charles.

one ago. we you to mean, I large maybe approach year Yes. start as accounts since know,

larger we in we support And continue why lower cost we So, from even big to for that’s accounts. CSP a production And interest capacity campus those those increased to having gain Malaysia. and started larger accounts.

accounts to So, increase so and are production able our costs, and that our to larger capacity the operation goal reasonable we is those profitability. lower support production with

So, the at the accounts and with interest we we those engage time, BXC. also same some started mini around world. engagement through of continue from and accounts, BXB And lots gain larger especially to also to size

So, we are engaging with much base broader now. customer

Our next with Hosseini question comes SIG. from Mehdi

price Couple more in down with am has the the It data assuming of center I follow-ups. decline to and mix went the from like And December large that the seems quarter to the do mix. quarter, September is December. XX, my to that how in in in how of should unit and impact the mix I And XX% will context, that trends? ASP think you question March and OEM

March still lots products, feeling to a of even quarter, a lot tried -- because we small In summer, engagement good But cautious. so our larger of be small of the of much stronger, and become accounts. sized lot accounts, middle headwind, after because account market from

and mix want again large understand, So, the of quarter? Charles, would from I center just data to March in decline the OEM revenue

Yes. I Yes. would say.

And different CPUs. see I the also want how of three to ramp then, these understand you

actually those do manufacturing AMD procure inventory How partner been before a commitment in You close NVIDIA. working the do high advance the or to -- components make takes you of capital and of historically have of volume building the commitment advance much actual you’ve place? you long How have Intel, in always boxes?

partnership all vendors. we Indeed very with of have our close a

or are you area, similar may… So, David, the to we this industry better. standard in I slightly believe

side. Yes. on you chain Many improved things as recently, the know, have supply

we procure further in So, advance. to used

$XXX And reasons the we of quarters had so the two had of And of cash have come the our cash the we flow million. free net $XXX last our increased. have inventories million, of flows way, -- one one have down, reasons income been by

And inventory. so, we to that the money again, had in is reason less for invest

cycle. is the some now, when their buy timing, to products our bulk we faster to are ability can But the the be taking on going because to customers in our point the products. produce your on quarter it’s of of So, dependent later in

versus the So, have quarter that quarter shipments, inventory affect timing late accounts if we of and early payable. can shipments our

the less? $XX And line, you sheet, on balance then facility for for million year or coming like especially Malaysia one last the a with still question or ‘XX, me targeting, are fiscal of on CapEx more

so, Yes, fair question.

we’re Malaysia. CapEx we’ll we’re in add for our to $X in million a $X and QX, for going QX, add So, for of million Malaysia, -- adding

be And a $XX over half. for fiscal million several couple that’ll investment over then, this be So going years. to second our is -- an

the And make million $XX another ‘XX. of so, in we’ll first fiscal half

given on So, investment. little that that’s that’s not insight -- you a more

Should out that what, the is $XX to assume a the I just $X quarter? million million Malaysia to CapEx maintenance

correct. that’s Yes,

and in So, figures the your gave you XX add question, can you. yes, maintain just the I just that

Our with final Markets. Northland Capital the Nehal question Chokshi from comes

get Great, awesome. to and thanks. I leadoff cleanup,

how So, relative September the customer patterns, the then? quarter, from and to excluding December XX.X% the in business actually perform quarter the did seasonal

the an quarter in respect. was quarter So, December on every outstanding

so cash flow, all were strong, And cash free the position. metrics inventory, from

no So, customer -- you mentioned, as concentration. customer

quarter. a And so, -- we we a feel great good really had really

XXX%-plus from a more was up customer correct is that I excluding September core business interpretation the than quarter the interpretation? that Is mean, that my here seasonal.

we to that -- quarter-to-quarter, always we’ll we -- always large we’ll Well, shipments take Nehal, have customers. have design customers always wins, will have shipments from when --

their little ship change we in Sometimes than and forecast, another. they it’s -- more one according sometimes bit quarter a

a always. control supply can’t that felt as -- the the was dynamic harder crunch. during we that that supply chain said, was improved, chain we has lot So, But as

get why quarters. or we that win can new we’ll But we a two altered by over one to that’s normal returned be better chain, Now feel always in quarter that that we’ve more supply a seasonality. to return therefore, design

more but larger Yes. larger had accounts, we accounts. in Basically, we are in some fiscal year ‘XX, adding ‘XX, now

BXC. accounts, largely are and So more also BXB, we and accounts growing more midsize in

more sure is mix more our Malaysia will we and That’s extend bigger. campus. lower for to for indeed, volume becoming be much the much operation customer why really cost healthier, and diversified, So,

diversification just is products. and customers play the coming on rack-scale margin larger Presumably, that plug Is correct? with the higher

hope We so.

So in lot feel have to once customers. a Malaysia, USA, to we add more And still a -- more Taiwan, of of anyway, that’s higher a our add is have lot we we room customers. capacity plan

a then, that you there vertical And -- is quarter? that from the particular talking the are guys you pushups seeing about for were that [Ph]

center. Right. Data

were The -- data Push-outs not center? in data large

saying large Well, they data but center, so… he was were in that

In data centers? the large

Yes.

driving Okay. All right. Very outs good. And then revenue. guess, with for the in seasonality March data XX% there decline here? be, quarter, rank also March quarter. out you’re three are push guiding these parse center element. And Are ongoing what a There’s the Then you then customers elements and are order these of to then an might the XX% could decline? Q-over-Q some macro obviously that potentially major large I drivers Q-over-Q three from clearly there’s the help

was decline look typical QX our Nehal, back you if pre-COVID, XX%. So

Okay.

normal was during of seasonal the time patterns. that So,

kind our there supply scarce. COVID, to this we of a we seasonality. have normalized we that think was During But because supply will different was return dynamic of course, as

Okay. the as what’s the as input as the typical macro, as customer then, driver there, Q-over-Q runoff far decline? as above the far And of the XX% far large any potential as versus

all we’re the Well, customers new engaging time. with

in and to looking not fact, opposite. the declining, we’re just be so, And

intact will while and confident that supply have we chain, in. have a that we stable as are our some in plans So, remain we seasonality growth still

buyback Can did was correctly last just $XXX clarify implemented, new And a hear you then that that something question there’s is, my that? million I buyback? here about

existing, approved No, that’s already the buyback.

back is now going flow you’ve So, to highlighted that have guys cash work put to you to free position that worked two expect are now? net to it over that a you with past yourself guys the back quarters, cash strong that reasonable

it’s Yes, completely completely the certainly up the But, up Board. think it’s unreasonable. to I Board, to

your Board thoughts buyback? Your member on the utilizing We here. one got Charles, thoughts?

PE say, and is still low not? as why strong, know, You cash why I is flow the

have question with We SIG. Hosseini Mehdi a from

Yes.

did to It say plus is you did or quarters? September coming come customer a you you David, XX% that follow-up, plus year the a very So, last that or another to going just clarification. XX% back quick confusing. quarter the employ of was had have you’re just going in customers in

Yes.

So a the year customer we is customer. XX% different a Mehdi, ago September had

customer September that was we recent quarter, below a customer, The XX% in QX. the our in did not again Okay? revenues was XX% had of constitute different

clarify I did Okay, that?

Sure.

expect you what follow-up, quarter customer is? is Just that as particular a come confidence to the the that behind back, do June

-- Well, we have so…

Indeed with strong new product, our indeed very offering.

So have we more come customer are larger customer there, the with or expect new old very working we is them any we always time And partnership will stronger back closely very a would possibility. high coming ever.

This is dynamic.

Yes.

on thrive We repeat business.

Thank clarification. you for

There are no for that further With questions at concludes you Thank conference. said, today’s presentation. this time. today’s attending

may You now disconnect.