Maxim Integrated Products (MXIM) 30 Oct 182019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Maxim Integrated First Quarter of Fiscal 2019 Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will be given at that time.

As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Kathy Ta, Vice President, Investor Relations. Kathy. ahead, go Please

Welcome conference Maxim call. Andrew. quarter fiscal XXXX earnings everyone you, Integrated's to first Thank

Bruce conference like Joining financial accompanies Chief posted Relations' Doluca; release Officer, website. Executive press on a disclosures Officer, I call. me the to on in and Tunç in and call supplemental financial The Chief our our we information highlight the that to today presentation are Kiddoo. this have would Investor Financial presentation this

warnings be making the the will be from all forward-looking that statements. Reform uncertainty, During I'd cautionary are of and we our in today's the Investors events conjunction risks filings. cautioned forward-looking remind must some differ may statements In and light these Private appear Act, with call, considered future that made. in statements materially Litigation that this Securities in SEC you statements like call involve to that

the posted Commission refer Exchange company's please and information, our additional on to For Securities are website. which filings

Now, over I'll to turn Tunç. the call

Thank in Good us your you appreciate thank today. We our for interest all you, participants afternoon Integrated. joining Kathy. Maxim and to

Center. Our Automotive, and year, Industrial, driven profitability strongly, to results by solid. Data same revenue quarter grew and were September the quarter last Consumer, Compared

forward, Looking seeing conditions. business are we softening

adjust year also sell-in My year-ago these by at quarter our for investors of we items. buying this I environment. quarter the transition to comparisons December us and buyback. use share our to believe our flow strong balance, of revenue by business positive return believe distributor. down second be However, was cash the our we any year the XXX% want impacted free shareholders model to our plan current shares XX-week Due in and best fiscal increasing one in cash We on net to enables year-on-year last quarter a remind quarter of both environment. successful that free was comments accounting fiscal to flow is the cash to cash

our was current Automotive. discuss XX% business year. the Automotive from outlook me now September starting and last September with results up Let quarter quarter quarter, In the same

demand We and continue systems driver the battery to management see for signals electric for assistance strongest content. vehicles

supports opportunities Our products. ADAS for on transporting applications per technology new we second video, and generation introduced audio, driver point-to-point centered data management power to applications. Maxim for gigabit link Ethernet. continued second and GMSL-X be X X display transfers data Automotive content serial growth can also This Recently, products and link in assistance of and for communication transport and a per gigabit serial

to compliant capabilities the assist for Safety health the and autonomous Level diagnostic includes applications. making link technology is suitable Integrity of Our standards drive with it Automotive

XX,XXX We of over The won Customers designs to at product for have lead X follow extremely different ordered first in strong and coming had the first pull the prototypes received products X months GMSL-X in family. pair products many this year. we customer engineering OEMs. already

as sequentially Battery year. strongly year. in management last we December quarter Turning In be to revenue XX% electric expect same and revenue management vehicles, over grew the footprint automotive for translate last and years systems from the mid-teens driver battery today's into to up quarter same from quarter, the are our wins design global from growing growth. we prior assistance systems the up

We slowdown offsetting content the global growth from in expect to areas strength secular in increases come production. auto

same across electric growth year for vehicles quarter revenue from several with nearly systems management battery the last geographies. to double expect We

content expect assistance In growth addition, we applications. in driver continued

Industrial XX% quarter quarter me market. In the turn to same up the was last Let from Industrial next year. September the

our see Our year. distribution, quarter market growth broad medical we've last factory growth Industrial and in to and in continued same from from benefited automation content resales In double-digit growth the business products.

part latter quarter. a broad receive detailed distribution we to Bruce within provide weaker commentary on and will bookings dynamics our However, in slower business. the the of of the resales of began customers more base

automation. of believe long-term trajectory growth the continue in We to factory

technology will latest showcasing We be Munich electronica digital Show Trade serving our the factory the in November. at

before focus that edge; first, In will second, in world Industrial areas to this bring that of December the resales bookings and continue tiny of movement at quarter, early in customers robust the and control and include, given the the we our few systems strongly the X.X We around assumption X.X at are digital decades that be Industrial isolated communications down modules. and factory protection factories and saturates. deployment a has to least weakness This products recent third, in and interface intelligence Industry broad-based small and power isolation of uncertain footprint ultra-efficient reflects we more solutions; expect distribution and market the sequentially. Our power through days thermal-efficient environment. believe

strongly growth Center. the and after Comms Let me revenue was XXXG the We to XXXX. Center many quarter XXXG of growth hyperscale return a in the anticipate of products module optical with and Data from deployment the are Data and be up growth. we same data combined optical business data next quarter, modules first discuss Comms infrastructure. Center the down strong sequentially last year. quarters in Communications centers Data the in calendar quarter, expect In shipments strong growth and innings XXXG slower in optical to center In communications September half we this with of temporary for in middle the in We December to slowdown believe experienced for X%

Industrial. same built ensures year to December To gross exert as generate Three, spending our to low successful be wins design world-class markets any let quarter, and Two, in in to our we expect we and four, to manufacturing environment. wearables, diversified, broad-based peripherals. Finally, smartphones, product be content gaming, Consumer. controls. of have business continue Automotive intensity continued have to down continue from to structure In strongly the tight to we last long summarize, Consumer And the grow cycle Maxim Consumer performance margins. September strong we turn and in tablets, due was capital we and and sequentially life high-quality, In me in flexible One, due new up manufacturing. such the consistent XX% sequentially quarter, up quarter seasonality.

is during increase flow and share predictable flows of year investors. All With XXXX, returning to I to fiscal cash now plan driving to buyback this of our free over confidence us strong will call cash giving XXX% Bruce. that, turn the our

the capital to We're towards all Maxim's expect QX. we commitment authorization approximately has incremental will we're balance double Tunç. QX new return fiscal the go pleased billion. for buyback of XXX% price, share year the increase Thanks to increasing current buybacks XXXX. compared of cash fiscal buyback from flow $X.X will announce free our At board our share XXX% to XXXX. The on that Also, stock a for of year approved

use increased belief Our the our that shares share best position program and our buyback reflects strong our in net buying environment. the is our current cash of cash

result earnings of a As will industry power. the we this increased with this during greater slowdown, exit period buyback

now turn from was the million, QX to me ago. for a results. Revenue QX same year Let $XXX quarter up XX%

approximately QX Automotive, Center, markets X% XX% Our Data revenue Comms Consumer, XX% XX% mix Industrial, from and and major XX% Computing. was in by

roughly half comprised and our the of Industrial Automotive Our revenue business in quarter.

from We in in channel. but XX% up September the distribution broad-based comprised the distribution with This distribution distribution the ago the revenue last weak. month Maxim's customers in resales channel, quarter. a were quarter. performance of to same of XX% Resales year were QX softness of XX primarily ended Turning affected quarter to inventory the days the

this been to still lead weeks times delivery in years. have are seven range five and over six Our for

channel, distribution days target the continue days or our in less. XX our given industry. We performance uncertainties supply channel inventory committed closely to our the the manage remain to and our inventory distributor's We of chain, in of

onetime P&L, special up $XXX our basis excluding basis IRS special Operating gross were down $XXX items. the excluding of at continued the to QX GAAP by operating XX.X%, same reform. items, up quarter excluding earnings the special tax (XX:XX). ongoing special quarter from cost XX% driven reflecting Turning XX% was prior prior prior Maxim's a share, tailwinds ago. quarter the margin Operating the points per rules expenses excluding to a from GAAP the quarter from proposed million, latest was year controls. increase million rate, the the income above items margin reflecting up points items tax was GAAP QX guidance special from is slightly excluding revenue XX% regarding from with items X% XX ago. quarter same and of items, was XX% up year XXX and $X.XX,

Trailing Please sheet in out of decreased which $XXX in $XX down by to in were dollars were at Inventory equivalents $X.XX QX. flow our XX-month free prior short-term inventory from and the was quarter to cash QX. we flow, bonus same cash Capital revenue investments note and million QX cash cash, up from days days ended balance the quarter. XXX, expenditures XX% that $XX the or total quarter. year. X down fourth quarter over last X% overall XX% the million pay the employee is million billion. Turning

closing price. cash Our X.X% at stock free flow is yield yesterday's

$X.XX. flow cash free Our per share was

closing increase is and shares. repurchases we $XXX that the For return, X.X XX% Based board in reflects stock This million Dividends dividend share our capital quarter our in $X.XX yield totaled price, in last X.X%. as million totaled approved the the or dividend bought share. $XXX per increase quarter. back approximately on QX dividend yesterday's million the in

to our sell-in of impacted around last guidance, million. quarter want was for our revenue one I second year we quarter both and $XXX normalized fiscal the on in was transition Moving by accounting estimate at that year QX investors a remind of Adjusting distributor. to fiscal items, XX-week was these last to

continued was lower market. special are items, from modest our million tight our items, of QX, QX. now we approximately we gross controls. annual of in QX on gross down backlog the accounting special offset forecast in reflects at the turns, the XX-week despite Based and the expenses, midpoint QX year increase the year This revenue expected is strategy. sell-in the margin The from operating XX% beginning this QX. driven QX content our quarter guidance seeing expected a same impact and broad of to to million. quarter ago. QX the is is $XXX in cost flexible XX% is same due to of softness a excluding This quarter backlog excluding to in revenue in QX forecasted Automotive QX onetime beginning $XXX ago, impact due margin, full Our that with the revenue compared lower by merit million. transition by quarter for benefited growth flat and items to are Adjusting $XXX result be QX the growth continued X% manufacturing to

quarter. prior estimate Our for items, purposes QX, XXXX. is excluding the for of modeling for special tax the use be is to XX% our balance expected XX% best with rate flat fiscal to

For QX expect excluding $X.XX GAAP we range earnings $X.XX. items, a special per share, to of

expenditures pay targeted to quarter note we FY be our perform last year I in million XXXX, high-end to the in In off like required we to environment. X% $XXX exposure the in growth would will bond of market For internal we range to QX to come revenue revenue at due modest of to November. end our due expect same that expect diversified compared also as our X% despite capital at our of uncertainty current summary, fab. maintenance the that plan we

will operating risk Our while high-quality cash flow. and control continue we mitigating us All profitability, free high the inventory enables strategy result manufacturing to and tightly to of these maintain factors in earnings expenses. building excess flexible

back cash With Our Kathy. XXXX. fiscal of to return our allows over that, XXX% I'll shareholders cash positive increase XXX% to position turn to from call us the in net to

concludes prepared our That please will open Bruce. Andrew, could the for call question? and Thanks our remarks we now first questions. we have

the question with of And our Sur first line Harlan comes JPMorgan. from

now open. is line Your

and Good diversification good to business question the afternoon. Thanks in the here. for playing see taking out my

in terms in the in SMB bookings mostly And, guess, that? the shortfall? Can guidance, provide quarter? markets, far sub-segments here sub-seasonal business. color us On of on the the geographies looks it's your looks perspective some seeing most of just like quarter driver within that some biggest of guys with you're Any you of which importantly Industrial December from have it the color most stabilized December the like broad the declines the within I trend a and thus

Hi is that. Harlan I'll take Bruce. this

the bookings that The globally. right. has been market. pretty September, weakness slowdown exactly kind geographies area of We we Industrial seen We've broad-based in you're for the saw in Industrial the slowed was when September, that So, our all across started actually in to biggest that down. kind late It see business. of

our sure closely. I or inventory to Obviously, that in that stabilized or – continuing think to too on those is our and starting make and managing a own the seen it's to too to early it call we're on it's not. stabilized our think closely to and haven't information manage that that monitor whether make manage books, I we or not channel right, But say – whether softness early we whether bounce back. has inventory

Harlan. you, Thank

Thank you.

Thank with Ross Bank. from Seymore line you. the of And our next comes question Deutsche

open. Your line is now

further from Hi very Wanted and that's quite list year-over-year bit guys. similar know upstream are. question relative the that as dive of guys offsets, on long you BMS a is of to Automotive side. side still XX% you into sort negative points ADAS business a where laundry the little but a to growing have I impressive data the

any offsets already guess and that Industrial said above was what of shoe beyond what with color give another content question? to of you could your the is the about Tunç description to prior some fall how just similar company you've I and that So to

Yes.

I been unit be those So that will think ago. Xs see or than some of a and in if reports saying less look of and the we've segments, some year companies that sensitive it we the piece we obviously is we the seen one it their business, do infotainment have investing will at of that And has growth side, the But you was be the cases in. growth of of that you declined. Automotive segments most our to flattened at some if Tier car have look the

much the large or systems have the the ADAS segments is we any in way in in BMS the that So management we've unit unit is read the decrease which infotainment. other battery still that content offsetting than growth there is sales larger cars. I are much, declines, growth And invested that in segments, and of in

not up combination a we've giving Previously, that all We're growth be guided ending changing the good that. really is of in the long-term. So us everybody to mid-teens-type low-teens. still

fact headwinds think I is despite the we're secular unit and content in letting terms sales BMS that grow globally right growth of large the that that us now. really ADAS seeing, car growth in there and some remains in basically systems plus is

year-over-year this was quarter, So gave we pretty at the view current and showed still we growth healthy. the view of that

But growth of story to content driver say. Automotive and unit that, secular our Beyond more sales. than obviously it's in the growth harder rather story is a car

Thank you.

Thanks Ross.

line And Srivastava Thank you. our next question comes Ambrish the of from with BMO.

is line Your open. now

Bruce XX% seen pre-Dallas you. at I at such looking I receivable, looked increase. haven't thank pretty back model accounts Hi, big and all – way my back days goes went I and a was to the that's up a increase. large

So what's driving please? that

Yeah.

that and just there's think timing a of of the mix things, So, the the sort one, business the I of business couple of we of sort had.

larger little bit of customers payment quarter those are terms. at you had If get some which longer looked a quarter, Consumer strong this we and a

say that, and And year expect that QX. we're to DSO is execute back we've days, the and that that that. you're year-over-year, way mix comparing the to of our kind had fact timing so which absolutely bring little I can of other in target bit on And around went if some ago aggressively same noticed we'll working to had you business. XX down we you this actually would us for that a a

that manufacturing manage margin. X bring significant days. other to to which having our strategy, to impacts that with our down The side target able we're inventory to from is working is to area of capital our bring without XXX inventory goal internally. down And flexible and did XXX But closer we our in the days gross XXX down get

by So going capital revenue aggressively to in on industry. kind just And, definition benefits of working manage we're our right line cash the this soft spot as you'll see declines, during flow AR. of the from course,

will growth quarters. generate then flow and the lower several down for the cash next us both DSO the bringing revenue in So free

Okay. you. Thank

Yes.

Thanks Ambrish.

the next Bank Arya question from line our of Lynch. Merrill And with comes America Vivek of

Your line now open. is

taking Thanks question. for my

saying? what of there Or paused a inventory, is the if projects way they there are customers Have latter do is slowdown, above stabilizes? your pre-bought could get macro they in certain tariff trade some and whenever and On you are normal those front condition a it's and issues the how think resume to to quantify and you excess the much level?

in Remember Yes, that what our talked not so slowdown. is this frankly. and mentioned broad-based remarks see we're prepared us was seeing we for customer easy a to Bruce that

distribution. are So, most these customers buying through of actually

one layer comments. So, their from customer the removed and we're actually

customers, lot the this a not our at customers, we're where of look larger seeing direct effect. you If that's

you give commentary. I'll some However,

how asked of basically widespread that caution end of they and is the was the question have kind how and of this hearing that automation wait are from it build want not that to But our in customers, tariffs are to up heard see their some I We everybody, like to don't some hesitating capacity clear their I know customers customers is, of up. some to response ran and few slowdown, we've kind but have things underlying us we that. for the just don't but since know. this survey we is on a it really them, lot we so the be But is the ahead they mentioned. what or ordered from to We inventory hard really reason that customers a Maybe don't cause have we the do for say you people. could a broad-based to talk inputs directly saying and for of China. have

you. Okay. Thank

right. All

Thanks Vivek.

line question next with the Stanley. of from Craig our Hettenbach Morgan comes And

line open. now is Your

from the you of check you. and inventory, orders slowing terms versus loop a demand what's distribution high follow-up Bruce, feedback the that a seeing just down? in some the that's maybe seen into you're thank resales terms flow, being on versus of as Anything some slower you've there. perspective little inventory Yes, in a of so question worked

still saw quarter we XX% clearly mean were in which the year-over-year. I Yeah. up resales,

Tunç still – of kind where in parse very we saw that's and that The question, sort that relatively what's the it's also that and figure for in partners. talking the and we're difficult distribution late I on mentioned, out and earlier those So, going – there's parts get in with if global BMS it's that's those healthy that's to distribution a weakness I we're to clearly I kind whether in you so it's of story, that happened Japan the China to distribution, certain geographies on were customers in just good gaming clearly Maxim of lot new strong. say our or us smallest of on that. demand. very will the Automotive quarter – our or slowdown think the a saw little of basis. trying the But extent a Japan, we bit, But very a as where specific in handle as of a through mentioned business

to business do Consumer And broad-based doing well. also. very So is our well Automotive continues

So that we're businesses. kind broad-based the the of in mainly is the real Industrial slowdown seeing

Okay. the color. Appreciate all Thanks.

Yes.

Thanks Craig.

And Barclays. our next line question with comes from Blayne Curtis of the

Your line is now open.

Thanks question. my good for Hey taking afternoon.

for curious segment, on said quarters. of and had been strong pulled sort back you a Just it it the couple Comm

terms the and comment look into activity of curious in anything if pulling back cyclical, of as quarters comments should design should on the be market kind just on kind Just any you of can and Thanks. your why next in XXXG it's less couple you on general? XXXG comments that be –

Yes.

a the for now had year It year been growth. – for half. does and strong business bright last XXXG has the a spot So Maxim

well changed customers. were technology really is respect. accepted there in and that products by Our very Nothing

kind for unrelated are some take we're causing there's that's them quarter. that product to hearing. a Maxim of breather However a what to the That's customer issues

hear growth. the we pick next year, growth return slowed pretty expect we but we'll to down, So really again will back and from customers in has these this much that of from first half up what the calendar

about to But much. too not like fundamentally to changed. related those don't talk nothing that And us. issues has us they that things some So there's customer are are really

not those to Maxim. good are to providers, questions the So but hyperscale

nothing fundamentally wrong. So,

strong I the be think growth it's long to term. for going company

Thanks guys.

Blayne. Thanks

next question with Pitzer our John the from And line Suisse. comes of Credit

Your Industrial last that (USA) Pitzer quarter? a - case, line John sequentially. strong December like know these talked adjustments you've lead if I good Suisse doing Securities to Does year, from know question. down the December Am Thanks be that's ask down Yeah, I And that guys. for I right growth is quarter. LLC peers. adjustments than now to mid-teens worse afternoon about those the year-over-year the for the in me Credit seems Bruce, letting William Auto being year-over-year? for And open.

been guys out of over-indexed and me me kind been the now? the you I'm than would weak couple this the help are of that's kind for So in can fact that buckets being your Or to a in Industrial. driven that's of most an different supply Is why parse that bucket? understand curious, you peers quarters help chain if really area can more up of factory you down be by automation you

Yeah. I It's due the do with to difficult always very apologize comparison that Avnet adjustments XXth to to everyone. week. the and And

math didn't at we ourselves our And when single that out difficult especially be the internally, and very do it Industrial parse That so want low QX digits, down see business kind we right. I said, level. that's sub-segment of clear to I in

a broad-based than you So able to I it's But of we did that little it bit for the that year-over-year. math a it's you low that but it view, to When single-digits, maybe think so it, is business. math. down be the is it's look point different difficult understand from bit at do little

China, maybe know. after some customers, just QX that the us what it on the on single-digit indicated, again, into Pitzer from in sell William to of and be But of But Some in our up low heard it for projects year-over-year of speculation some these seeing in as around overall Suisse factory are we see just we've down of (USA) couple latency – of John at that's of We CapEx automation factory included may Bruce. was first held get Securities kind that side. LLC does a in Industrial. XX% automation it's our Thanks then and that Tunç so again, do Credit of growing quarter slowdown kind kind year-over-year. kind the - tough

Yes.

Thanks John.

from with And line of Citi. the Danely Chris our comes question next

now is open. line Your

you thanks about weakness or Could talk Hey, end guys. you the market either have just And the first you where weakness recently? saw then most where geography? by seen

I to Yeah, I'll It's end see that. the of we take geographies. parse of was it mean, again, across when the sort it broad-based was Industrial, that started in that the difficult at out. and it as we was all it said – to quarter near was and

area it say one was, wouldn't area. first another in saw I we or So, it

So, at backward I'm be better still through early this looking. much cycles think us again pretty accepting that of cycle. will and I and all And true it's are sure

Great. Thanks guys.

Yes.

Thanks Chris.

And our of next question comes from Tore the with line Stifel. Svanberg

is line open. now Your

you. Thank Yes.

out mentioned you starting So, and with is pause. automation they're to manufacturing and pausing. of understand know any you're see a share therefore customers, they China looking of to factory last get are color trade of unfolds could just I you you this how pausing if going kind Did situation transferring how sense I'm us. Tunç, you have you of they the trying or now kind wait some these talked that were long at to when that don't to the

is talking about customers the know comments we're be Remember I a whole going which about their what to customers. and share automation their I'll with not lot. Well, it's you

situation But But to hasn't yet. as for, So, were like how all it's known ever, it hard to situation the frankly. it's if it's trade know, understand. And going really as they really we it mostly to take long or not to the you resolve, said, looked waiting resolve itself. tariff

really or this not be it it's the wait So, and resolved. that will we'll wait let's somewhere clear build get factory and let's then whether just

is change. to to productivity growth or products to automation I world that to think the going think don't increases the is in need continue buy I so going factory long-term

and is fundamentally But demand – for decisions going customers big to to does think growth the we to I right don't there Maxim that be a but let's a a area a great change So, of this automation see be is come. lot I not for think mode. years make are now wait before for going in kind I our belief of

Thank you, Tunç.

Thanks Tore.

This an it, But the question on in that to to is Bruce. is that to so our something up in – earlier report into went clarify assumed year just used We're fiscal just the I accounting of that net any knew. close clarification that receivable line just first accounts we our the quarter be sure change want came basically make there. of where I AR. to people reserves actually that. There with used with there's effect beginning associated

And liability the reserve now change so, accounting that moved down into the side.

So now you're seeing gross AR.

reserve very, section, very you that's it'll And so have you liability the then down look if grab the at large. in if – don't that, just looking you're to absolutely

adjusted do have comparison. So calculation. but you about just to DSO that, apples-to-apples sorry to get an an I'm

still haven't much, look increase working the even to that really much And wanted would seen some certainly, that we've to but clarify basis, anyway our we're down, on made it you if we've just point. an So adjusted I worse DSO. in That bring than it adjustment is. said,

So I apologize, but I wanted to just that. clarify

Yeah.

to our always collecting fundamentals. we not terms customers. for so been aggressively the in changed we're as changed know, as Just have have I And with everybody mean, nothing's

you. with our Toshiya the Sachs. Thank next of And Hari Goldman comes line from question

Your line open. now is

or you guiding your December little seasonal the early XXXX? other couple expectations provide you've Consumer of quarter. over business like is of I past diversifying perhaps parts momentum you're in year about How and bit kind question. color the had cycle. in But you of very gaming. your and on tablets, And it your you markets Consumer the December will over a more years. see into are in seems wearables, just customer? in think I are into larger product tablets smartphone customer guys necessarily if like trends, think could of to was taking going huge job large sustainable hoping growthy for you next you September, mix did so? and seems one application had a business. your It growth where Thank pretty with what customer quarter a the You good that what great a of part curious, of talked I done gaming, at and a kind your Wearables What that customers

how Thank you. sustainability think you curious So about there?

Yeah.

which actually of answered great. So yourself, is most you questions the

broaden customers, have well we've the we you in you So put, selling our as headway customer products tablets, And the many into, other all we base. and has some strategy the into and applications. been, diversify base, made markets business we types we're both to are the sell. into markets that, broad-based to of getting a gaming And the that broader wearables good products, Consumer now mentioned,

So that is going largest good a obviously, have we customer relationship. well. still With our

– have smartphones. they still We and make continue to to plan

which on a changes cash of have So more some is philosophy And our stability that to sure can business there. from to there we broaden company. us be that business here much But as as that business year-to-year. we'll and gives in make we in have is terms can goals rely to flows that less going our the always remember also

each as good. we've relationship the made year. healthy. that that questions about We've year, reporting And for we for win think very changed. is your not the And customer, every So, while business a I does been largest do market great we And have progress. now. It's to the it about

Yeah.

you. Thank

Bruce. is This

Tunç to still mid-single-digits I to those, the to that's of said, to our add said, up large to sort to for less what think second continue this base, And wins. with but expect customer this XX% understand that seasonally be going the that leverage relationship sort on to down, to our broad expect all then think fiscal year. business. as to across you Just of of audio business, low even our good, quarter kind in products than year-over-year. And this just of customer And is stable we we us with it some while and yeah to Tunç very what lose people management, power with it's we small Consumer they're reiterate this win of broad-based for we deliver to broad-based be what extent we're kind important still said, allows also the that

evidence kind we've that's business. within of just of transformation So, Consumer the I the our think done

helpful. you much. Thank so Very

Yes.

Toshiya. Thanks

line And with our question Evercore. of the comes next from CJ Muse

is line Your now open.

good Yeah, question. my two-part I Thank taking afternoon. you for guess question.

are function one, revenues XX% in U.S. about X% a fiscal that rate think XXXX? into And that as more as discussed XXXX? we to in that? stronger thinking before, should fiscal customers seeing the secondly, you about mix that X% tax have think headwind, expected emerging And XX% then Thank is were you. versus the of move weakening we as to a First dollar you higher you currencies

Sure.

is currency, the question So of the first our in XX% on revenue dollars.

And so customers us from that of some that doesn't has translate, impact that not even that our of point distribution view, up. and our come currency like partners, for

us. for issue an as that see don't we So,

on kind all came some use the going it X% the around of tax of just of that XX% business rules guidance to for do of we it in rules ended reason best of on anything estimate kind learning the our then XX%. forward new understanding modeling reform or On to mix in out in our the the side, the best our aspects up of it was there, the expect kind operational to we was We September about and know about of it business. at that released based at really And – what related laws. when getting wasn't we of is countered subsequently proposed the XX% versus tax July, based XX%, The assumptions. guided IRS our

aspect, to dollars, on currency their do other of most Yeah. thing countries it their end said, as different Bruce customers and of matter of for in the are But our sales their sales so currencies obviously affect the changes in One doesn't competitiveness. us. products

a to However, so all we're global these Maxim is much company, pretty selling customers.

much. that wins who us So, doesn't loses or affect

not is a think radar our on something this about. concern to as So, really or

you. Thank

Thanks C.J.

with Raymond And the next James. of question Chris our comes line from Caso

Your open. line is now

you. afternoon. thank Good Yes,

with respect guidance Just probably to customers. to and is with to respect I end how and weakness the distribution answer easier market compared within to inventory? know you're as question end And demand that guidance a the much attributing channel to that

think, target target. to that much I how you days, the present? said, that does How that was within You of do ahead inventory expect fast get your headwind of levels XX distributor which your is and a

to that committed of to in Certainly, resales, we're less when forecast that I early for and wild that. we're softness ability is kind Yeah. this or our would we're biggest we're the the card target XX to especially of right, seeing. and that, of days still us always working say on days achieve

to our and XX long-term, that for get to over absolutely on number where quarter will it's be. Absolutely So us say, will channel medium to less term we or difficult this there. get is inventory predict, commitment the

that's report that. track certainly, you So and something every can progress and quarter we'll against our

Okay. you. Thank

Yes.

Thanks Chris.

And Capital RBC our of Amit Daryanani from next line question the comes Markets. with

is line Your now open.

guys. question my taking for Thanks

guess, I being less talking are or really this So, more the hear Industrial-centric I correctly, guys you point. if about slowdown this at

you maybe is the across me this react risk a how could of So I'm on just happening conviction more help correction in is you past perhaps versus to if XXXX just you end other be the you versus and Industrial-specific to cycles if would one is expect back could If this then a for spreading rare segments? to And in other your widespread that think kind market markets? correction to wondering it markets? just further how your XXXX, understand

Yeah.

I of bit previous is So, is what than the different as obviously few them say one a can my out, that, of been you experience through each cycles has little we've one. before. a these And been pointed

or one. cycle to saying early the too compare like it's a build So looks previous this model

that that's that cycles. do Bruce sure through is both we've of make just since a clear. manage know them, me these to let through we The that So been how few things we and know I, to more diversified cycles, better our Maxim to revenue in we're of think We mainly the because well. sure able Compared terms I does successful, making what prior is be much to do know company in base.

better and volume. less model profitability have We sensitive margins are our gross to much a

other spread Industrial? Now, your areas there's from question background there sound about some Yes, will it which... to

caller that could... if Maybe

Yeah, mute.

...mute.

All right. Thanks.

into coming spread portion It's is thing or assess So of that. a from it for of, us realize the customers. the customer important to really in But markets? our bigger Industrial to our other is broad revenue small customer difficult will terms that

revenue small So going that's there's customers through fewer in other markets frankly.

other immune slowed I that's said as but a heard that little we're about of of people point. is that's that's cars I one So, the think kind one. one bit, have already to pretty down unit most sales And

So, we'll fine think in be I that doing area. that

us different, gets cycle it if hard to So, for or extends concerning we'll but think I a cycle and each or is more. predict bit in little well the do more

you. Thank

to our said, really buyback add as model, proposition. of the and commitment going out cash. Yeah. strong think I however do difficult we're And of our with And the in and strength to our back and cash I of as of investment us strong shares we'll on best Tunç by the value think during cycle, position, because strong to a think cash he Maxim far we flow, invest stronger the positioned strength flow which this increase forward it a we it's of to to believe really much very is company our that cash end our weak exactly long this that long-term just lasts well business always buyback in use is period believe come our allows is we potentially absolutely a but our said, this on this Bruce, what to predict, better environment,

Thank you, Amit.

next our with Pajjuri question Macquarie. comes of the And from line Srini

Capital you. have now a Bruce question, comment. (USA), I open. Your back line is Pajjuri want I - inventory Thank to the go Inc. Srini Macquarie to

were own gross down your your if what like and carry a sheet you that inventory? own bring we for down it are talk the environment? And of question own it? more is in inventory, given the how on that balance how plans margins to think does much you're headwind to you is inventory as more that make bring you. you then about as channel balance So, bring Thank bit down well. your actually it to looks your as sheet sense And could sheet opposed your balance about to your channel inventory, My should a

by the Sure. the strategy, just supply ability who And of think I know done what in and it's inefficiencies result chain I think hate I react moving demand. downside in upside manufacturing we've me most we have think is a inventory. to on people a and I to to the that both know flexible changes

publicly in very number to it days And in was committed down. will got on brought strategy, of I absolutely ahead XX% prior you We headwind irregardless a about goal, margin. to that we clearly. demand XXX we said don't that I seeing revenue; of there gross because quarter that this gross quarter that I there's a sequentially a the that plan, internal manufacturing kind Obviously, some. decline to and it at did our got might And bit impact analysis quarter, a days bringing down absolutely, our if think can we're XXX. big to of look on gross that we're we had continue said environment. you of when flexible down point so the about that are occasions we down And ourselves expect to be and be X little X% stated And margin. that of last sensitivity impact this that. and we're a X% see as And result X a to here we margin in X.X% bringing

Pajjuri with ago and Capital Macquarie feel right a throughout down our the absolutely we the So, bad feel we a channel. cycle Srini and balance that strategy (USA), the overall, you. within is transferred we off few years strategy inventory, when committed the Inc. sheet we're good bringing - comfortable Thank company, both we like to and undertook both and

Yes.

Srini. you Thank

question next with of line Christopher Susquehanna. the And comes Rolland our from

Your line is now open.

Hey guys.

than wondering like is I'm maybe the of we are pretty that those others a you guys, season with And to the longer companies. more are we're were do getting and like I like And bit it between lumps shorter guess guys at this little more times challenging think guides a let's say, quarter just short or a lead are correlation with yourself, seems you a companies taking TI for those lead XQ. perhaps those having or guiding coincidence. lead lead times better times of times earlier notorious look big semis you kind difference As

Just any guys thoughts be great. that have you might would

lead times. intuition up. get those working with build see it probably That's say I enough to model after good quicker, Yeah. to they probably is back are have But My to a would down insights don't into data their longer this lead that see the any we short time have versus times, companies but companies when really over. don't the lead how short cycle would

Okay. Thanks guys.

Thank you Chris.

comes And the line Capital. of from Loop with our question next Cody Acree

line Your is open. now

going of Thank inventory you distributors than get XX you guys, questions. talking channel XX, to in and is that of the days for a likely kind taking in with your channel your or target up of do to March are sense day quarter to the less that Bruce linger my this within XX that just into range sort sufficiently comfortable getting of is inventory? you be

will this difficult for understand it's very how us last. I to Yeah, mean long

appropriately is view, part that between don't think shipments based to balance we insights which Consumer from what of said, Because some managing seeing of doing have similar well, resales doing appropriate and businesses to it think of point unique to there. I of supporting We're is right, that working as we're on our is any level it part supporting the the inventory. close adjust I find pay just I So and are well. that supporting right Automotive of distribution broad-based attention

we for with inventory businesses. so the the manage closely being And and Industrial flipside broad-based to need the like

right bringing the down days. it while to to that trying find we're XX So balance,

to the on The that and continue get flux think I environment with it's of we to that's on said, current going depends very really level. My commitment to exactly when resales. I in environment absolutely the what As will work happen. predict happens quarter the that to current and exact difficult is,

Great. Thank you.

Yes.

Cody. Thanks

Bank. Ross comes the line Our Deutsche Seymore from of next question with

now is line open. Your

guys. in me follow-up a here. Hi sneak letting Thanks for

the one-timers OpEx head variability size calendar the what just some OpEx does you somewhat margin was two of items, about could get had you gross when can of Bruce Just mentioned if hoping talk revenue controls, we half as guys do first you fiscal you XXXX? housekeeping And into that. about in the in the that talk I quarter. worse first

Ross. Hi, Yeah.

So, about XX the point midpoint bps impact. sort that's around adjustment the to you was Concerning so go going despite – it bps X impact annual that quarter the that we're September quarters talked salary and one-time benefit get that that the second impact. revenue XX% the OpEx, XX% it's clearly the we've full about keep one-time and flat to was our that in the said million our of happen that about and is XX.X%, about to to in from a $X.X a XX quarter of then of I guide the

our we that. we'll spending and – things, add, incremental count exactly So, at that And through If how we'll over first, quarter. head I discretionary number travel. do offsetting cycles time, have in this Tunç extends kind we're the We have right, been already many through the work the of these know playbook. to the normal look

that I company, there's the opportunities we've said, that and within the years, able managers think be Automotive, areas the manage sure that's for cost growth Consumer. appropriately. continue talked shown make those to want always do in we'll OpEx Data pretty that we factory But whether to automation, that say we'll I manage confident to we're Center, important high us, businesses good we're broad-based in a over appropriately right, that So our we area. invest to large about

you. Thank

Yes.

Ross. Thanks

question of of Lynch. Arya And Merrill with America next comes line our Bank the Vivek from

is line open. now Your

Thanks you going for sales are margins, than kind without gross year-on-year so, just even it on was that XX% so on again Anything the the follow-up. the it's flat different of Bruce though maybe anticipated? a would just be there, one-time up? mix

trending our honest, be year-over-year you gross time. generally seen back and look have strength. that that I'll get And have at To I'll margins to up been over to we've because on a No.

the you on get follow-up but So, back I'll to question.

Thank you.

Yes.

Thanks Vivek.

now Kathy for today's to Thank would I back remarks. session. call turn to you. over And that concludes question-and-answer the like closing

you participation your That Maxim. for today's Thank Thank concludes conference you, in your call. and Andrew. interest for

the thank today's for conference. wonderful participating day. you Ladies all disconnect. you a gentlemen, and have does This Everyone, program and conclude in may