Keysight (KEYS) 20 Aug 242024 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to Keysight Technologies Fiscal Third Quarter 2024 Earnings Conference Call. My name is Sierra, and I'll be your lead operator for today. [Operator Instructions] This call is being recorded today, Tuesday, August 20, 2024, at 1:30 p.m. Pacific Time.

to Treasurer call and like Kary, to now President, Vice Investor would hand over the Jason I Relations. Please go ahead.

Thank third quarter year everyone, to call welcome, fiscal XXXX. you, for earnings and conference Keysight's

and President and In our supplement Customer Reports. today's information Dougherty. session, Quarterly Officer, Joining me Wallace. Q&A Financial at are CEO, Dhanasekaran, investor.keysight.com press CFO, the by and joined be on to The discussions website Satish under we'll Mark are Neil our Chief Information and Keysight's release

Today's measures. comments non-GAAP financial will refer to

will make otherwise comparisons the and metrics the directly and on are divestitures We also growth, most noted. reference which basis, all financial within impact acquisitions reconciliations a to year-over-year excludes are completed last core The GAAP movements XX on months. of our unless currency comparable and or website

We the are a make call. today's and statements company will statements more We valid other you filings update forward-looking of risks factors. to only complete performance our as and no uncertainties of the recent to for these review on financial today. SEC them and are assume risks and obligation encourage subject view to These about of

scheduled Citi hosted investor in participate Jefferies, Deutsche by Bank, is upcoming management and Lastly, to Sachs. Goldman conferences

the over now I And will turn call to Satish.

and us everyone, today. X My thank joining afternoon, you for on Good headlines. comments will key focus

revenue delivering that high the above well end guidance earnings expectations. executed and stable were conditions and consistent in our Keysight market by with First, of our

slightly single sequentially. with year low prior billion digits Second, line orders and of above expectations was in and $X.XX growing

of of half communications. continue XXXX, barring and outlook we environment, commercial stability in macroeconomic be opportunities a further recovery mixed funnel first gradual orders above orders to supports degradation. in particularly second half followed our more pockets In any a for The growth, see by demand to

strength on customers value our shareholders. business are creation of Third, in model and we our and both for remain the confident intently focused

changed. not priorities allocation Our capital have

investing to to strategically to new inflect as and growth we're trajectory. deliver technologies company the long-term First, return capabilities leading-edge our

our third, share opportunities expanding committed and And we're growth through capital to disciplined through M&A. repurchases. SAM are Second, we returning

we or over the free of quarters. past over $XXX returned In X fact, XX% cash million flow

with overview and let's per $X.XX quarter were share orders we saw performance. in $X.X Now our for consecutive both brief Keysight's of and of a Revenue the quarter, third earnings above begin expectations. stability And relative billion revenue. second of

growth to Turning order in segments. returned our business CSG to QX.

by We're While for consecutive orders quarter, third rates, in some a we growth Commercial the X% driven revenue inflection. made a digits. than from we performance. orders Wireline offset XXX-gig by sequentially sequentially. and the have decline year-over-year center improvement Strong training wireline saw data AI, benefiting modest data driven and XXX-gig, model network year-over-year, in for declined wireless rearchitecture low ahead grew more investments of double Communications grew the position business. stable to robust technology Keysight investment this networks AI terabit of in

workload the solutions secured with emulation customers. drove stack switching GPU GPU rack cluster wins and key this and for we're applications including enabling our key AI design connectivity with in R&D, benchmarking. we customers and AI applications, across servers, market-leading demand emulation In manufacturing, quarter, performance In and capacity technology deployments

We're collaborated Ethernet the networks also cluster to and for to also in define workloads. high-performance reduce network architectures ultra engaged in Panduit to Keysight Cisco AI customers with AI technologies interconnect consortium with demonstrate and future actively consumption. power

quarters, the albeit for In lower past on year-over-year X has been at stable a level a basis. demand wireless,

technologies. in open investment radio scaling Customers XGPP to of of also next-generation deployments in capture are the networks, While ongoing standard. customer portfolio spending is breadth non-terrestrial XX evaluating and us remains cautious, solutions network investing our access R&D release XG the and enabling

development For recent incentives, Government and robust Communications, access networks. particularly are International IEEE U.S., open in and driving to radio example, showcased Europe a the XG Japan together early at Ericsson. with of Keysight Conference ecosystem technology commercialize

network centers to enable North solutions across state-of-the-art testing radio quarter, from This Asia. Europe, integration globe and open the open America Keysight's access to

and the allied Turning its few to year-over-year, filter resiliency. over were process U.S. for with through modernization cyber remains joint recently healthy which expect government. expanded prolonged U.S. from Revenue appropriation steady caused on spending budget defense quarters. flat. sequentially aerospace, The engagement and governments. orders U.S. new approval collaborative enhance projects, interim, In defense government with next the we and through in demand funding has delays down to cybersecurity Keysight defense of to primes

In we for primes wins spectrum operation U.S. with key applications. secured the quarter, and European

footprint our win a with expanded government customer. a application qubit key Quantum also We with multi-hundred

Turning conditions on revenue a market and basis. to year continued to revenue sequential from orders prior we strong as muted, Electronic normalize remain expected. Industrial a Group, digits in double saw relative declining stability and Customer spending Solutions but

year-over-year year. were also QX revenue sequential increased In and down strongly Orders digits basis. an was a single on versus low high semiconductor, last all-time up

the AI test in demand in from through wafer high-bandwidth foundry nodes, memory advanced these While parametric drove performance customers excess and silicon workloads have made and specific memory increased market to continue market investments our opportunities higher to we technologies. for spending certain work of that photonics inventory, segments solutions. resulted requirements The for

transition customer automotive, ramps. Lower investments declined grow infrastructure some digits on engagement were grew near continue were for revenue while mid-single orders in and orders as a AV opportunities The vehicles lower charging and software-defined basis. EV to manufacturing digits. sequential R&D to the auto delayed, as in activity remains in a new test battery In demand double In mobility, orders term. headwind

certification trust the next-generation in successfully expands car connectivity consortium further industry. NXP. certification an conjunction of key also evaluation completed digital As first for It Riscure vehicles. Keysight's the security example, offering strengthens security with This automotive in

in double of health advanced customer in orders low pockets China electronics, manufacturing, research, general constrained, and There growth In digital remains channel. distribution digits. where the were spending particularly and grew

QX quarter of are revenues this software roughly from and accounted also for XX% Keysight. grew services while Annual overall total revenue and of accounting increased for and XX% in resilient revenue. services Keysight recurring year-over-year and Software

Eggplant platform automation multiple in key into and traction expanding is channel expand accounts in space. early quarters geographies. We're The win between growth. Keysight Our sales gaining to and also with resulted the a select ESI double-digit test leverage consecutive communication of satellite in collaboration software

design Keysight's platform Lastly, engineering grow. to software continues

prototyping across simulation automotive releases This communications, quarter, end cases which address use and launched we high-performance new virtual and and our aerospace defense markets. for capabilities,

the to to In on differentiation and and and economic shareholders. technology a ahead us variety model enabling in is of both us on laser-focused strength creation outperform summary, for inflections conditions. of Keysight's of value remain well positioned capitalize business customers We're

and performance I'll With that, turn Neil over to discuss our to it financial outlook.

hello, everyone. and Satish, you, Thank

Third was the core $X.XXX basis. end flat billion. million Orders essentially quarter quarter or were to grew of finish $X.X a basis. at above of guidance billion $X.XXX revenue our and range X% high on end core XX% $XX the on the of billion down at a down or of XX% Backlog

Looking year-over-year. at were gross our up reported expenses operational $XXX results Operating for QX, X% of XX%. margin we million, of

margin model XX% points, demonstrating and down the cost date. resiliency down on QX Excluding expenses to operating to is basis flexibility reflecting the outperform or of margin only financial Year-to-date, taken actions core our XX% was business. a operating X%, XXX down acquisitions, core cycle continuing basis. were and SG&A Keysight's

fiscal our reduces onward for to from related tax XXX reflect a points corporate we change or basis rate restructuring. and forward. quarter, returns the During XXXX XX% an amended effective non-GAAP to prior going to XX% year tax deduction period amortization This our from XXXX

the earnings delivered share, half per to Turning We relates added share. of income excluding in, which per $X.XX achieved the tax share, at quarter to we $X.XX FY of This earnings $X.XX additional earnings. the $X.XX of $XXX to and impact change. of tax All change QX. in net $X.XX the 'XX to rate and earnings first of per million an finished

weighted Our XXX for quarter was count shares. share million average the

X%, of defense and on and million, XX%. operating Moving revenue down aerospace basis. to delivered Group million performance a $XXX gross XX% CSG government the $XXX margin Altogether, Solutions declined of million The margin revenue both while down segments. our revenue $XXX communications XX%. generated and X% Commercial was reported of core of of of Communications

Electronic Solutions million, basis. down increase and a quarter of XXX approximately margin $XXX points revenue of EISG prior Group revenue. on XX%, XX% of core reported XX% or generated basis XX% the on gross The versus operating an Industrial margin lower slightly of

balance flow from an Share sheet for and equivalents, billion $XXX repurchases flow. the total share shares million of to of cash with million. million X.XX and a operations Moving $XXX this million. $XXX flow in cash quarter average consideration of free quarter ended per and the totaled at cash of $X.X price $XXX generating approximately cash cash We

our to turning Now outlook.

in finish We $X.XXX the better expect $X.XX quarter count a $X.XX than XXX the weighted slightly range of based with in to QX to share and billion $X.XXX fourth share to approximately million on shares. billion, year range of earnings anticipated, of diluted the per revenue

we acting success an as current market for dimensions capturing the that In positioning control, closing, in and macro uncertain Keysight recover. the environment, opportunities on markets

turn Q&A. With I to will that, it the back for Jason

instructions Thank Q&A? could proceed for with you, the the you Neil. Sierra,

comes question Our with Sachs. the Instructions] Goldman Mark [Operator from of line first Delaney

cyclical is you slightly up in the environment be may you year-on-year sign think us better changing? and Maybe down X that being year-on-year sequentially can help a both as pickup were the meaningful Orders how prior orders quarters. after for understand the

Yes. to semi, our are the some rebound sector. Obviously, some encouraged in see it, material we're business, Mark, too our thanks automotive call signs inflections the and we in base by the early wireline business, weakness then that that there's stability for question. it's incremental continued in although of in

continue and time. the key all year-over-year own encouraged and about and it -- it we call by have recovery we're might blender, to well, good too this soon returning to its going. in and that say, we this environment, to we've as differentiation our be we're executing portfolio this put we slight So at feel the a point to but the investments keep current made growth And the seen, in is

other a My the was orders. question follow-up on

Maybe contributor be or to understand communications. commercial commercial AI as what you to revenue so? are percentage us for mentioned at out months positive You point? AI next tied look comms within commercial might how orders the help a of again impactful better can as over AI And you XX communications this yet

orders communication double as Again, communications commercial solutions. that cycle pleased mentioned, diverse pretty grew quite to we're the digits system Yes, a that I caters quarter. this we portfolio Mark. have with Thanks, entire

the think wireless wireline. And by ecosystem can our driven of inflecting business, commercial the you XX% spend. it's So and represents of AI roughly about and wireline XX% communications to

standards of is a be to pretty think to technologies, is you transformational it's big longer played becoming of when going that's multiple underlying quite evolutions how clear waves to out. the answer I be could technology think and lead Now term, that AI going but yet not about

Today, is hyperscalers. highly it's constricted the big sort of by environment investments the I driven And by of perspective. say, constraint, is supply set a the sort from it should of state affairs a concentrated a the opportunity made

the there So some through. are working that customers challenges are

we're of some investments through seeing up that our business playing and that we're are is out expanding. picking capital manufacturing So -- that rapidly

the But would good progress, position. in I engaging making again, And of say, compute, to contributions has aspects feel the over and entire stack the meaningful we're broaden time. all [ for and making But innovation good believe, ecosystem, equally, invest memory, into. thermal, that playing months this market networking, are been across will about R&D I across power and ] XX goal protocols opportunity, in in with last in our our customers standardization

Our Rakers Aaron today with Fargo. from next comes question Wells

even about of go growth a want a outlined you little to it's ago, back, Analyst been put that's looking to I you at we fiscal if there Day easy growth wouldn't Is the year the X% X%. here. you're but revenue I'm I changed see little a return a the we to rate. curious of that think a growth why X% out so, think next given think orders, CAGR as kind X% rate of of about for had that start stabilization over just anything comps while, stronger to we And to year we that to relative And mean, there about as at? the expect would us the

the Thank remain Obviously, Yes. drivers Aaron. and of long-term you, opportunities the unchanged. view our underlying

expect to would business one. That's trend to levels. number point we so those back And the

year, However, flattish been outsized markets, 'XX have for flat was our years look, 'XX 'XX a and and year.

We is year continue In the 'XX for deliver value. market. to down a

good of should -- milestone, that, first a say I we was so And our say. have is of first priority stabilized. conditions to would about our that sort first the as we first can the greater And you than is feel sign that's orders That business half, okay? thing. we that what second be had quarter, last So the which the with shared half

as a slow recovery, would, Second about in you our a point, it's multiple end we've in shape And is markets. we're this point, all as gradual the at environment. XXXX. still we the seen, not, recovery, if of pretty an recovery this we're will, factoring mixed say in-phase And this at thinking therefore, across

that However, taking terms our things customers with the in we're of control, engagements an we intent all with maximize. actions are to innovations,

what progress 'XX. some later, position. those want for And hear from more more trending dynamics, feel more bit Keysight's Obviously, can see I that progression growth in funnel good you'll which a want the see about be might we about are Mark before positive, we rates to to talk but we

I'm then ago, Yes. about you what And as seeing update and or Very Neil, -- quarter think build any today. curious, follow-up. or on two helpful. longer-dated the talked that you market orders. I'm quick you're curious, I a a as backlog just in

Yes. the to side, revenue expect the The single that that we range point or in are quarter in digits we'd the upper direction. two, to in the rate not stable revenues achieve incoming And where We're level mix. at the reasonably that. But yet level. of are on trending next order

Matt next Our from with comes Bank. question Niknam Deutsche

just aerospace, I are on segment. kind Matt This you ADG a delays for is -- to more little just Michael wondering or dig if could Allen these Is Niknam. was to the rate? more next the of growth slowdown is quarter? more you Or a of year-over-year this that. on more expect a of kind when any see into of pushing Just the color

raising spectrum in on say Keysight's and is an increase focus trends under one. increasing I'd the modernization so I all And we've right ultra-magnetic aligned geopolitics and defense with They're Europe solutions support the about States and that you. just that. support the budgets space solutions priorities. world. There the feel in operations, good for bipartisan defense United around had with we're long-term announced focused overarching budgets -- positive, for that's Thank in is the quantum given Yes. also with Japan for are number focus satellite.

that, we to U.S., also something building. good and said basis. in increases Having like the the hard does that pipeline those that's eventually on orders timing have an the prime impact, feel and quarterly The all budgets monitor But will predict appropriation are flush contractors really we into a us. we for

we're full of for for obviously, year year, revenue and lapping the defense levels a XXXX and order record aerospace This of business.

So levels this and point businesses down. we revenue long-dated into the And year. backlog, some year, systems next some -- large the to also won have the you'll convert are see which year revenue last will about

pipeline the say position Thank our would solid is and remain I So you. drivers intact, the remains strong.

with Ridley-Lane comes Our Bank David of from next question America.

But clients maybe delaying is the I restart Are the well at known. they I calendar looking of on the Just of you market saw projects. automotive. broader I in kind weakness to mean, beginning think XXXX. EV mentioned

a sort gain in of customer those sense conversations. tone the Just of

for this timing Mark. when David, these Yes, of It's predict is the some to hard projects. is

been of long the procurement that we've many associated process, proof falls talking have of of quite Some long-dated last projects of concepts. very for category processes this themselves the while. the them some into And business quarters, a including then it with about

to is on toward seeing in the our show innovation are I quarter migrating vehicles side automotive customers, sequentially. What is the focus now key think with it growth software-defined though and we the AV continuous continued

work to customers regions. We in continuing are with all

and these is situation, in for regulatory manufacturing in that I long-term I would a well the that the some capacities seeing the XXXX we of for. e-mobility, think required begin would moderation is in right given And battery are positioned climate around the we've I momentum of what the expect of increase. the commitments several now test political to quarters global gaining and And next pause some the projects that to we're quarters. slowness EV to situation many for look experienced some this So are as then

quick Neil. Understood. And then a one for

Just to forward, tax when next baseline you check, good assumption modeling XX% rate fiscal a that's going for said year?

Yes.

to of we next years. it that's rate, aware that would actually that expect tax next a U.S. For multiple The thing tax to offshore hold rate for is -- XXXX. GILTI tax on year, scheduled we're to is the increase in profitability

administration. only So candidates to that we'll other add need the prioritized first date. to that of evaluate would of And the tax year the closer current I thing presidential on legislation new of is then once we Keysight have for both get the impact implementation

what Obviously, a the like through of this that presidential assess quo and we could have don't 'XX. anything account part be so as for any administration. would doesn't passed to programs But status way those be new

next Marshall with Stanley. comes Our Meta question from Morgan

of maybe you improvement do of if update on A the second but couple questions realize maybe acquisition. kind as business, gradual. a just what then even catalyst are in they And in updates, 'XX on And I that question, fiscal Spirent see any limited communications as for probably business.

just through shareholder first to Spirent I transaction I'm half expect process. But for -- one approval I at be Yes. 'XX. the stated approval the Obviously, regulatory the that situation we've say think can -- received fiscal is we the have of by would second point, completed the shareholder what going we and before, this a working be an And transaction, first. we're in take as from Spirent add. the to the update to limited I I'll

your as see quite and mean, demand tremendous exciting business. to wireline As in question, it far the original is inflection I

supply-constrained a in is environment. it and concentrated is it before, mentioned I As

seen but on a the So we're that's build-outs it. dynamic, near-term and it capitalizing go, remains long to manufacturing how be

that customers X-year like with R&D is engaging a upon the wave. multiple execute that we next pipeline touched the is good opportunities bigger Keysight think on, us go areas be going the to to associated for because it gives there I I horizon with X- feel to a

investments some of would for test of year. any next some stability our growth some but technology in hard second -- which we're I as these making our But with deployment in further to and so we're would meaningful of engaged think activity the R&D, to wireless perhaps in -- wireline increase contributions globe, continue business, maybe until component give then see it happens, And trends, in the to I expect it really side and customers. signs about investments business And continued there. of half the moderating manufacturing the across

sort our thinking at that's So point. this of

next comes question Our SIG. from Hosseini Mehdi with

A different Thanks for has there than into October anything prior would the me. And new year look into fiscal this trends of couple the in been booking were quarter. of follow-ups 'XX. I year And booking. seasonally is with to on startup QX But Historically, down years? if QX have just color a for follow-up. the a take any I the terms that of fiscal make year

Yes.

it visibility too relates to premature given 'XX, much think probably FY guidance. little to give I is I a think bit us for as

are we a expecting recovery said, moderate Satish As into 'XX.

into I and typically as mid-single you move we core the a QX in QX digits, think we from revenue orders do sequential noted, decrease as see just Keysight's have -- QX. business, in

fiscal -- about to revenues in year. need XX% of recognizing to The of seasonality, of you the that the business opposite XX% one thing -- kind XX% however, first for, Keysight's account is quarter their the ESI will has we

-- the that out we'll in up, would the you'll ESI how plays market Keysight history environment. throughout suggest business given to sequentially and see the So have have sequentially down

can comment Mark funnel maybe maybe on the dynamics. And

Yes.

as more today is we sequential the this where And ago, at is funnel, intake. said versus so X before, kind trend, we positive, as seeing Mehdi, months a we're are say. funnel of would I trending look So I

our So that's into coming new pipeline. opportunities

increasing And of we're seeing some those or the closing which are through speed deals velocity going funnel at well. and the as

we're this and a we'll gives for But our us business. that that continue that there the seeing supports to carefully. funnel pipeline watch So guide are QX dynamics improving in short-term

Great. a I have that. just on may If follow-up

upgrade? would year, is would help into upgraded mean As would year, -- infrastructure, with like technology with to going expansion? in is be a base existing fiscal stand-alone would the with a Or stations else driven and also be there the next to wireless anything with capacity there out from that core stand-alone? look some not that calendar recovery a anything anything you just need Or upgrade is telecom help by the there that telecom, the to I is wireless

Mehdi. question, Yes. It's a really good

think the of to is business the we more be I about on labs our R&D our customers. tend thing

the front we're end. So on

So or becoming context release towards continued release AI in standards, around see and scaling. deployments XX, real. of such progression world XX, are the RAN we as XX RAN interoperability release coming end, new Open RAN that of in themes labs the Open

down. from those some I mentioned. we're would stability we're our about around feel Obviously, picking the peak is engagements up, is positive all cycle the telcos business in around I So are, the And down contributions to. that good. then CapEx as from earlier We which sequential from But say, activity good making these XG a basis. next-generation themes are trends the

-- provide I more that would there's that business until will and deployment stability So have again, more the stability XG arrives. some the because world, around some should XG activities expect but

with Thalhimer Adam from comes question Thompson Davis. Next

but Sorry revenue if weighted QX, in missed towards be that sequential Like both do communications? is up? you expect the growth this, that more sequentially segments looking to I you're for

probably One than skew to business at yes, comms towards little in this we is this It's moment. more business businesses. the continue Satish pressure so see point, we just some the going that shared. and But bit uptick, both seasonal automotive obviously, in given manufacturing that a of the the industrial

a would we business, been case. the Adam, which our seasonal in of Aerospace expect And Defense typically, always end has and uptick the year,

contributor another that's So as well.

you about semiconductor on Okay. fabrication last quarter, side, delays. talked the And

late give said you XXXX. back you think it just might or Can come I an update QX there?

Yes.

with on and remains activities as that which stronger especially technologies is growth. to are On where silicon of and returning a trigger the those semi and higher pipeline activities. I'd had we sense pull sequential solid such urgency photonics, project around now started side, invested The see the the customers. some say is And driving AI memory, we to

on business. the about good side a side. environment on still. we It's sequential parts in logic recovery feel Some But mixed logic still the that

question next comes Rob Vertical Our with from Partners. Jamieson Research

question here. auto you the the exposure vehicle kind EV talked and just But core of on about side, on have what how headwinds is with the And I how the on to Just total term? on that you opportunity of know long a to bit as weakness the expand that some autonomous percentage leans political competencies your communications? that And little quick a look orders might that much maybe around a some color like in business? of for look there.

Yes.

you. thank So

you small As think I historically, very very $XXX before, that business area. almost a And automotive And is the said grown transforming, automotive for marketplace exposure the low to as Keysight base. million and rightfully we business have have from noted, have right? in we the

in are feeling. And a one region. customers their marketplace and and to that it, testing it's that regulations production position we really part there of of big of the commoditization business, was manufacturing, and earlier engaged have Wallace of dimension electronics have it, pressures batteries in where the is about that differentiated AV you manufacturing and new the a continues talked battery, EV safety mobility that Chinese Mark transform. needs dictate is And X/X obviously, there. yet a X/X around all are as call And business manufacturing more we well. the On

software-defined customers to strength, other what it and on we Keysight's more I to And think them. take Mark, commercial is able plays side, for with of opportunity go automakers. silicon for the and market the we're that's directly with an what the traditional those do comps engage vehicle extension traditional as starting to further? it's Mark combining defined to really software and and ecosystem And set anything

our that of Yes. semiconductor was EDA business to with our design these silicon. No, go our more out on hit part. parts from tools of years many many to going over security point the and cyber comms into going and environments you last that crosses this and types it back I more tools our

which well and strengths within with the to obviously that go sense digital vehicles computational the components within into commercial and go the vehicle many standards, we've comms, as for communication They our used itself. that optical connecting the capabilities capturing the in standards years leverage to as been the standards are that standards everything

radar -- to cars, that's the to over why active see So has landscape. where and this is Keysight we a leadership such areas crossing multiple an position, connected from continue that's customer

of any the that any an quarter and is of? or along look there early then That's plotting the into July. in really of half one. kind August. maybe trends on helpful. And a was know end just changes just guess just aware Was one it lot volatility like there the material I But back be of Perfect. of last or positive, negatives we curious should I demand through

the month, -- May, our business we sellers it wasn't ended because unusual. a and ramping that X-month typically most Now, our We we from first quota. in in to necessarily in quarter but pull saw month of on are some half

but bit start to depleted that the grew had then funnel, we in. with little we quickly So a

X the said, dynamics, which As we've seen is is more the funnel that what I and intake last months funnel. throughout business funnel then positive through moving the

fairly So and the now. to I would into was X say weeks quarter, it typical a seasonality QX we're

with comes question JPMorgan. Samik from Chatterjee next Our

on Thapa Samik Priyanka is for Chatterjee. This

question. one Just

which data you You of stated huge the areas And AI of relative testing? can equipment that test time? kind hyperscaler Are customers for to investments. see hyperscalers a because you these hyperscalers to over set this exposure direct potentially equipment center opportunity have out broadening

Priyanka. you, Thank

more the investment infrastructure large and is obviously chain, upgrade from digital manufacturing supply equipment you will, in there. exposure through was and So networks benefiting the the being deployed hyperscaler to the what upgrade ecosystem and ready, the I we're the AI stated if to proliferating capital be

So that number one. was point

of as and for continuing open in our hyperscalers the into. own the that customer also some to of some silicon growing build standardization expand organic we're programs exposure We're But a hyperscalers more base we're that's that enter leading. into participating increasing consortiums are their capability,

So feel assets expect traditional not take we're to protocol scale also And scheme so and contribution AI and into areas would ability the solutions that growing effectively. provide in our a making to into you only emulating layer about physical this can and for customers, or training marketplace we inference computation but connectivity, us good there. total in

to Thank concludes Q&A our you I for like call your today. session That to Jason any closing the for all remarks. for questions. Kary back would turn

have We great day. at for Well, and Sierra, forward seeing the today. you look thanks, thanks, to everyone, upcoming a quarter, us this and joining conferences

call. conference our concludes This

You disconnect. may now