ALPHA & OMEGA SEMICONDUCTOR Ltd Q3 FY2023 Earnings Call

Ladies and gentlemen, hello. And welcome to the Alpha and Omega Semiconductor Fiscal Q3 2023 Earnings Call. My name is Maxine, and I will be coordinating today’s call. I will now hand you over to Yujia Zhai of The Blueshirt Group to begin. Yujia, please go ahead when you are ready.

Good afternoon, everyone. And welcome to Alpha and Omega Semiconductor’s conference call to discuss fiscal 2023 third quarter financial results. With me today are Stephen Chang, our CEO; and Yifan Liang, our CFO. This call is being recorded and broadcast live over the web. A replay will be available for seven days following the call and can be found in the Investor Relations section of our website. Today’s call will proceed as follows. Stephen will begin with business updates, provide strategic highlights and a detailed segment report. After that, Yifan will review the financial results and provide guidance for the June quarter. Finally, we will have the Q&A session. The earnings release was distributed over the wire today, May 4, 2023, after the market close. The release is also posted on the company’s website. Our earnings release and this presentation include non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the earnings release. We remind you that during this conference call, we will make certain forward-looking statements, including discussions of the business outlook and financial projections. These forward-looking statements are based on management’s current expectations and involve risks and uncertainties that could cause our actual results to differ materially. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligations to update the information provided in today’s call. With that, I will now turn the call over to our CEO, Stephen Chang. Stephen?

Thank you, Yujia, and good afternoon, everyone. I will begin today with a high-level overview of our results and then jump into segment details. Our fiscal Q3 results were near the high end of our revenue and gross margin guidance. Revenue was $132.6 million, non-GAAP gross margin was 25.1%, and non-GAAP EPS was negative $0.21. As we indicated last quarter, our performance this quarter reflects our effort to bring customer inventory levels back into balance as quickly as possible in response to the sharp industry-wide inventory correction, particularly in PCs and smartphones. As for the broader market environment, end consumer demand continues to be weak. However, we are optimistic that the worst is behind us, given the intensity of the inventory correction, coupled with our proactive measures. Looking into the rest of the year, we expect to recover a good portion of the revenue decline in the upcoming June quarter, with further improvement expected in our seasonally strongest September quarter. In terms of our operations, our near-term focus is continuing to work with our customers through the inventory correction and preparing for the peak season. We are looking forward to the upcoming fall flagship phone launches and the holidays, all of which are big opportunities for us, given our leading share with the leading OEMs in each of these end markets. As I look to the long-term, as the newly appointed CEO of AOS, I am positioning the company towards growth beyond our near-term $1 billion revenue target. Over the years, AOS has grown to be a major global power semiconductor supplier to Tier 1 players across PCs, Graphics, Gaming, Smartphones, Appliances, and Power Tools to name a few. However, we are just scratching the surface of potential opportunities in front of us. In the coming decade, the Electrification of Everything trend is set to accelerate and will shape our lives in profound ways. Growing concerns over climate change and the need to reduce dependence on fossil fuels will continue to drive the transition towards electric vehicles and clean energy. Advancement in generative AI will drive exponentially higher demand for high-performance computing data centers and spur advancements in robotics. Rapid progress in battery technology will likely usher in a growing array of higher voltage portable electronics, similar to recent developments in Power Tools. Moreover, continued advancements in IoT and high performance computing will pave the way for widespread adoption of new cutting-edge products such as smart devices for the home and work. All of these new use cases will drive more demand for power management solutions and significantly expand the market opportunity from the $50 billion TAM today. Power semiconductors have become an essential part of our daily lives in our homes, in our workplaces, and in our communities. AOS’ comprehensive range of products, which covers a wide voltage spectrum, positions us at the epicenter of this monumental trend that is set to transform every facet of our lives and the industries we know today. I am determined to drive AOS towards even greater success and capitalize on this exciting future, and have my sights set on AOS becoming a multi-billion-dollar business by the end of this decade. We plan to take our products deeper into our existing core markets like PCs and Smartphones with more integrated solutions and drive higher BOM content. We will leverage our core technology IP and strengths in advanced computing, battery, motor, and power supply, and continue to invest R&D in new adjacent markets like datacenters for AI, automotive, and energy generation. Our supply chain strategy is another key piece of that puzzle that is critical to us reaching new heights over the coming decade. As we look towards our future, we remain committed to optimizing our supply chain strategy. We understand that diversification is key to maintaining reliability of supply and that’s why we are exploring additional foundry partnerships in new geographical locations to expand our production capabilities. Further, we will continue to balance between internal manufacturing and third-party foundries to ensure a more robust supply chain that delivers top-notch products to our customers. Our success in attaining a record number of Tier 1 customers is no coincidence. It is a direct result of our unwavering focus on providing products that are both compelling and reliable, backed by unparalleled customer service and engineering support. We strive to solve our customers' power problems with a user-friendly system approach by providing a total solution. As CEO, I will continue to make sure this commitment to excellence remains one of our core values and constantly strives to exceed our customers' expectations with every product and service we deliver. Lastly, our talented and dedicated employees are who make this success possible. As we build upon our strong foundation and momentum, I will continue to foster a work environment and culture in which our employees can fully unleash their talents with respect and care. With that, let me now cover our segment results and provide some guidance by segment for the next quarter. Starting with Computing. March quarter revenue was down 57.7% year-over-year and 40.4% sequentially and represented 28.7% of total revenue. These results were driven by lower shipments across all Computing applications, magnified by March quarter being our seasonally weakest quarter. However, we believe inventory at some of our customers has been depleting and we are seeing a resumption of orders for the June quarter. Our current visibility sees encouraging demand recovery in some applications. For the June quarter, we expect total Computing segment revenue to be up about 40% sequentially. Turning to the Consumer segment, March quarter revenue was up slightly year-over-year and decreased 5.5% sequentially and represented 33.6% of total revenue. These results were in line with our expectations driven by strong Gaming volumes, which grew 68.2% year-over-year and decreased 11.3% sequentially. In addition, we saw a 30% sequential recovery from both home appliances and e-mobility, which includes e-bikes and e-scooters, another application that AOS is addressing with our medium voltage solutions for motor and battery management. Looking ahead, we anticipate our Consumer segment revenue to be flattish or slightly drop sequentially. Next, let’s discuss the Communications segment, where revenue in the March quarter experienced a considerable decline of 33.7% year-over-year and 45.4% sequentially, making up only 14.5% of total revenue. The drop in revenue was primarily attributable to weak consumer demand and the ongoing inventory correction in smartphones across all regions. The correction seems to be taking longer than we initially expected, which will cause this segment to remain weak, and we currently expect a single-digit percentage decline in the June quarter. Despite these challenges, we remain optimistic about a rebound in the second half of the year in our seasonally strongest quarters for the fall launches and ahead of holiday sales. Now, let’s talk about our last segment, Power Supply and Industrial, which accounted for 20% of total revenue. March quarter revenue decreased 29.6% year-over-year and 35.7% sequentially. The performance by applications in this segment was mixed. PC power supplies and quick chargers for smartphones were weak, consistent with the declining trend in PC and smartphone sales, but Power Tools exhibited positive signs of recovery, growing 65% sequentially. For the June quarter, we anticipate this segment will rebound with about 50% sequential growth, primarily driven by increased demand from our Tier 1 U.S. smartphone customer and China’s high-end quick charger demand. Additionally, we anticipate continued strength in the Power Tools category. In closing, as we stated last quarter, our business is affected by the economic environment and industry cycles. But given our strong fundamentals, leading technology, more diversified product portfolio, Tier 1 customer base in all our business segments, expanding manufacturing capability, and robust balance sheet, we are in the best position we have ever been to continue our growth momentum once this downturn is past us. Moreover, the encouraging data from our backlog and constructive conversations with our customers leads us to believe that the March quarter was the bottom and that the worst is now behind us. As such, we are optimistic about the future and look towards executing on the opportunities ahead of us. With that, I will now turn the call over to Yifan for a discussion of our fiscal third quarter financial results and our outlook for the next quarter.

Thank you, Stephen. Good afternoon, everyone, and thank you for joining us. Revenue for the quarter was $132.6 million, down 29.8% sequentially and 34.8% year-over-year, reflecting the current industry-wide inventory correction. In terms of product mix, DMOS revenue was $81 million, down 41.2% sequentially and 42.2% over last year. Power IC revenue was $47.4 million, down 5.1% from the prior quarter and 22.1% from a year ago. Assembly service revenue was $0.6 million, as compared to $1.2 million last quarter and $2.3 million for the same quarter last year. License and engineering service revenue was $3.6 million for the quarter. In February 2023, we entered into a license and engineering service agreement with a leading power semiconductor automotive supplier related to our Silicon Carbide technology for a total amount of $45 million. This contract further validates the technical leadership of our Silicon Carbide technology. In the agreement, besides the license, we will also provide product development and engineering services over the next 24 months. The revenue related to this agreement is recognized over the contract period. Non-GAAP gross margin was 25.1%, compared to 29.5% in the prior quarter and 36.7% a year ago. The quarter-over-quarter decrease in non-GAAP gross margin was mainly driven by less favorable mix and lower manufacturing efficiency. Non-GAAP operating expenses were $36.2 million, compared to $32.8 million for the prior quarter and $34 million last year. The quarter-over-quarter increase was primarily due to last quarter’s reversal true-up in variable compensation accruals. Non-GAAP tax expense was $2.5 million versus $1.5 million last quarter and $2.2 million in the prior year. The quarter-over-quarter increase was due to the withholding tax on the $18 million payment received under the Silicon Carbide license agreement mentioned previously. Non-GAAP quarterly EPS was negative $0.21, compared to $0.67 last quarter and $1.34 a year ago. Moving on to cash flow. Operating cash flow was $11.6 million, which included $18 million first tranche payment received from our licensing deal and $8.9 million repayments of customer deposits. By comparison, operating cash flow in the prior quarter was $0.3 million, which included $12.2 million net repayments of customer deposits. Operating cash flow a year ago was $61.8 million, which included $6.4 million net customer deposits. We expect to refund around a total of $30 million in customer deposits in calendar year 2023. Consolidated EBITDAS was $6.5 million, compared to $31.8 million last quarter and $48.4 million last year. During the quarter, we repurchased 107,000 shares of our stock for $2.7 million through our existing share repurchase program that was previously approved by the Board. We also purchased 217,000 shares of employee restricted stock units vested during the quarter by paying $5.5 million withholding tax on behalf of employees. Now let me turn to our balance sheet. We completed the March quarter with a cash balance of $265.9 million, compared to $287.8 million at the end of last quarter. The cash balance a year ago was $323.1 million. Net trade receivables were reduced to $19.4 million, compared to $53.2 million at the end of the prior quarter. Days sales outstanding were 30 days for both this and the prior quarter. Net inventory was $179.8 million at quarter end, compared to $163.8 million at the end of the prior quarter and $143.5 million last year. Average days in inventory were 152 days, compared to 109 days in the prior quarter. We expect average days in inventory to improve along with our revenue recovery. CapEx for the quarter was $22.7 million. We expect CapEx for the June quarter to range from $15 million to $20 million. Our Oregon fab expansion is complete and started ramping in March 2023. Now, I would like to discuss June quarter guidance. We expect revenue to be approximately $160 million plus or minus $5 million. GAAP gross margin to be 24% plus or minus 1%. We anticipate non-GAAP gross margin to be 25.8% plus or minus 1%. GAAP operating expenses to be in the range of $45.5 million plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $36.5 million plus or minus $1 million. Interest expense to be approximately $1.2 million and income tax expense to be in the range of $1.3 million to $1.5 million. With that, we will now open the call for questions. Operator, please start the Q&A session.

Thank you. Our first question today comes from David Williams from Benchmark. Please go ahead, David. Your line is now open.

Hey. Good afternoon. Thanks for letting me ask the question, and Stephen, congrats to you on the position and just here finding the bottom. So it’s good to see.

Thanks, David. Appreciate it.

Yeah. So, first, I want to ask Yifan on the gross margin. Obviously, you had some pressure last quarter and understanding a little bit of mix and the utilization. But just kind of curious how we should be thinking about the margin, as you get back up to more normalized revenue levels and a typical run rate? Can we see this return to where we were previously in the mid-30s range or is there anything structural that’s going to keep you maybe a little bit below the 30% longer term?

Our target model remains focused on reaching the mid-30% range. Currently, the market has shifted from being a sellers’ market to a buyers’ market, necessitating competitiveness to protect our business and expand our market share. For the time being, we may fall short of that target until the market improves. However, this does not alter the fundamental framework of our model for when conditions return to normal.

Okay, that's fair. Should we view this as you competing on price and sacrificing margin to win business, or are you able to maintain your pricing due to competitive performance?

Certainly, we will compete on performance. It’s more that in the last few years during the supply shortage, we didn’t touch price, and in some cases, we have increased prices in that environment, which is very, very unusual, right, in our market. But our products continue to compete on our performance, but we also need to price accordingly in the market.

Okay. Fair. Thanks for the color. And then, Stephen, just maybe your strategy and maybe I missed this in your opening remarks, but how do you think about the IC business and just the opportunity there? I know you have been in a component of that and just kind of curious how maybe what’s your strategy as you go forward?

Sure. IC is a key part of business. It’s been one area that we have been broadening our product portfolio in order to address higher margin content. At the same time, we recognize that in some of our applications, especially in PCs, there’s already been a move towards more integration, meaning using ICs to replace MOSFETs in certain sockets. So for us, it’s a necessary part of being a part of that BOM content and going forward. And with that, we are seeing BOM content increase in some of our applications. So we continue to invest more in our ICs, in order to bring up more Power IC products. These products tend to be more application specific. So as we come out with more products, they will be tackling sockets that we weren’t able to address before.

Okay. Fantastic. And just one more, if I may. Just on the licensing and engineering agreement, that sounds very interesting around your Silicon Carbide. Just wonder if you could give us any more color around that and then maybe what segment or end market you expect that product will be shipping into just automotive or what market that might be serving?

Sure. Certainly, we are definitely excited about closing that licensing deal. It’s a great validation of our technology that another of our peers recognizes that our technology can compete in the global space. So for us, this is actually going to help us and fund our ability to grow this business. This business does take a lot of investment in terms of the R&D, as well as to secure the supply chain. But it is going to help us to enter into markets that we haven’t been into before such as Automotive or Industrial Power Supplies. So we are excited about this new extension or new aspect of our product portfolio.

Thank you. Best of luck on the quarter, guys.

Thank you.

Thank you. The next question comes from Craig Ellis from B. Riley Securities. Please go ahead. Your line is now open.

Yeah. Thanks for taking the questions and I will echo the congratulations, Stephen. It’s great. I look forward to working with you. I wanted to follow up on the last question. This may be more for Yifan. Yifan, can you just talk about how much revenue associated with the new Silicon Carbide deal revenue recognition in fiscal 3Q and how much revenue is baked into the guide for fiscal 4Q?

Sure. We recognize $3.6 million revenue from this licensing deal. This agreement is for a 24-month period, so the revenue recognition is going to be spread out over this contract period. Yes, we already baked in some estimated revenue in our June quarter guidance.

And should it be about $5 million to $6 million a quarter, Yifan, if we just do the high-level math that $45 million over a couple of years, so $2 million amount or is there something related either technology development milestones or other that would cause revenue to be lumpier?

It’s in that ballpark number, but it’s more depends on the engineering service hours our team spent relatively to the overall total expected engineering hours. So it’s more like go with the progression of this engineering service.

Yeah. And then just a clarification on that before I flip it to, Stephen. So with that being the revenue impact $3.6 million in the quarter, something greater than that and closer to $5 million to $6 million in the fiscal fourth quarter. How do we think about the gross margin impact of this contribution? Does it come in near a corporate average level or does it come in either materially lower or higher?

For the licensing engineering service portion of the revenue, they carry at a higher gross margin for us.

Okay. And that was baked into the gross margin color for the fiscal fourth quarter, I take it. Okay. So, Stephen, so nice to see that some of the businesses are rebounding strongly with the color that PC is up 40% quarter-on-quarter and Industrial up 50%. So it’s your point in the prepared remarks that there are some places where inventory is better. Can you just elaborate in more detail where in PCs are you seeing good inventories? Is it across the board or just in some products like Chromebooks or Gaming PCs, which we have heard are stronger? And Industrial, can you characterize that and then if you could characterize maybe how bad things are in the Communications market, given it seems like we are seeing lower expectations now than maybe three months ago, that would be helpful as well?

I wouldn't say there's a clear pattern; it’s linked to specific types of PCs. Overall, end demand remains somewhat weak as both consumers and corporate clients are postponing their refresh cycles. However, at the component level, we observed a significant inventory correction that affected our March quarter results. As we move into the June quarter, we are beginning to see signs of the inventory correction easing in certain areas. I can’t identify a distinct pattern indicating a surge in orders, as this largely depends on which customers we're dealing with. Some customers increased their orders significantly based on their inventory strategies, while others maintained minimal inventory and do not face as severe a correction challenge. Therefore, it varies on a customer-by-customer basis, with some exiting the situation more quickly than others who will take longer to adjust.

Got it. And then could you just provide some commentary on Communications? How do you feel about inventory levels in that end market?

Sure. The smartphone market has been experiencing a correction since the end of last year. We expect that the first and second quarters of the year will remain relatively weak in terms of battery protection. Typically, these quarters are slower due to the timing of our customers' phone launches. We are preparing for and anticipating a stronger second half, but this will depend on our customers as they release their fall updates.

And that leads me to my last question before I join the queue again. I believe you mentioned in your prepared remarks that there is potential for growth in the fiscal first quarter, which is generally a strong season for the company. Could you provide more details on that? Do you anticipate this across the business for specific segments? Any insights on how the fiscal first quarter might unfold for the company would be very helpful. Thank you, Stephen. Thank you, Yifan.

Sure. Overall, we are definitely looking at the second half to see if there will be a rebound and to what extent it can recover. Right now, the visibility of end demand is still a bit unclear. That said, we expect the correction in component level inventory to continue improving as we move into the September quarter. I don’t anticipate demand returning to its original levels, and typically, the September quarter is a peak season. However, I believe end demand is not quite there yet and we are still seeing the effects of the easing inventory control.

Thank you. Our next question comes from Jeremy Kwan from Stifel, Nicolaus. Please go ahead. Your line is now open.

Yes, thank you, and I would like to congratulate you on your first full year as CEO and on recognizing the bottom of the cycle. My first question pertains to the inventory correction that seems to be easing. Can you clarify how much of what you are observing in the June quarter is related to inventory replenishment and how much reflects true sell-through or end demand? Any insights you could share would be appreciated.

Sure. Most of the impact is still coming from the inventory correction returning to more normal levels. That’s likely the primary factor. We are optimistic about stronger demand at the end of September, but that is still uncertain. However, inventory levels are improving, and we are observing this in the backlog of orders being placed.

Great. And then maybe a follow-up on the licensing agreement. Can you just maybe walk us a little bit through more how that came about? Is this a customer that you have been working with maybe on a product side and is that partner up in doing a license? And also any other details you can provide on the terms, is it exclusive, are you still working on your own products? Just any more detail, oh, and also on the manufacturing, any details on that would be great?

Sure. This partner is currently behind in their Silicon Carbide technology and approached us seeking a way to get started. We reached an agreement for them to license our products and technology. It is an exclusive license, but it does not hinder our own development efforts. In fact, this deal is assisting us in funding and accelerating our Silicon Carbide initiatives, enabling us to expand our product portfolio and marketing efforts, as well as secure our supply chain.

Are there any potential ongoing royalties or revenue streams once this customer develops their own product? Additionally, when can we expect the first products from that partnership and from your own internal development?

Yes, we have already released products for our Silicon Carbide prior to this licensing agreement. As part of the contract, they will benefit from these products during the agreement period. At the same time, we will continue to grow our own Silicon Carbide business.

Great. Now, regarding power management and the integration you mentioned for the long term, could you provide an update on the digital control Power ICs you have been developing? Also, could you share your progress in expanding beyond the graphics cards? Thank you.

Sure. So our biggest and most immediate impact is still going to be in the client computing area. And because we are addressing not only the MOSFET and the driver-less IC side, we are also developing controllers in that space, which is helping us to expand the BOM content there quite significantly, going somewhere from what used to be $2 sort of approaching $4 to $5 because of the integration that we are seeing, the additional sockets that we can address, because of our power management IC technologies that have been deployed there. So in the near-term, I think that’s the kind of the biggest impact for us, it takes significantly increasing the BOM content in the client computing. We will move on from there to other areas, but I think most immediately, that’s what’s going to move the needle for us.

Great. Returning to the pricing question, it seems the environment has shifted back to a more balanced and normalized state. Could you provide an update on the competitive landscape? I recall you mentioning a couple of quarters ago that there was increased competition as supply capacity improved in some areas and regions. What are your expectations for pricing in fiscal 2024 compared to fiscal 2023? Thank you.

Sure. I believe that as we go through the inventory correction phase, pricing will become more challenging due to competitive pressures. Our competitors now have access to supply, which they didn't have during the shortage. The market is transitioning back to a more typical competitive environment. However, market cycles do vary. As we move beyond the inventory correction, we can expect pricing conditions to stabilize and return to a more standard relationship between us and our customers.

Great. I have one final question for Yifan. The cash flow looks quite good in relation to the operating results, and I noticed that accounts receivable has decreased significantly while Days Sales Outstanding remain about the same. Where do you see accounts receivable heading, and how do you anticipate cash flows will perform over the next few quarters? Thank you.

In terms of day sales outstanding, it has been around 30 days, so we don’t see any collection issues. The receivable balance has decreased mainly due to the shipment timing and the exceptionally low revenue for the March quarter. Looking ahead, I would expect that as our revenue recovers, our cash flow will also continue to improve.

Could you provide an update on the Oregon fab expansion and your outlook for capital expenditures? I'm interested in your longer-term manufacturing needs and any potential plans for other locations. Is there a capital expenditure forecast tied to that? Additionally, what potential benefits do you see from the CHIPS Act and government subsidies? Thank you.

Our Oregon fab expansion is now complete. There will still be some lingering payments affecting cash flow, which is why we guided towards a CapEx range of $15 million to $20 million for the June quarter. I expect our CapEx to gradually decrease from that point. Additionally, we are collaborating with other foundries to enhance our capacity, but currently, we do not have a specific plan for expanding our internal fab. Regarding the CHIPS Act, we are actively working with both state and federal governments along with our consultants, and we still have significant work to do to secure potential funding from the CHIPS Act.

And one final question. Can you provide an update on your utilization rates and lead times? I would imagine utilization is a bit lower, and is this the lowest level you expect over the next couple of quarters?

Utilization is currently relatively low, particularly for the back end. This is especially true for the Oregon fab since we are ramping up our expansion. The expansion capacity we are adding is essential right now. Our Oregon fab utilization is somewhat better. I expect we can improve factory utilization once our revenue begins to grow.

Thank you. Our final question today comes from David Williams from Benchmark. Please go ahead. Your line is now open.

Hey, gentlemen. Thanks for letting me just back on. I just wanted to ask quickly on the JV and the disposition there. We know you have got a healthy equity stake, and anything, I guess, changed or any different there that we should be thinking about or maybe timing?

Right now they are in the process of raising additional funds from our side. So we will see, and I mean, right now the market it is tough right now.

Yeah.

So, other than that, we don’t have any other information.

Okay. And on the Oregon fab, can you remind us of what that the magnitude of the capacity expansion was in terms of maybe annual revenue?

It’s relatively expanded about additional 15% also.

15% in terms of wafers or revenue?

Yeah. Wafer. Wafer. Wafer.

Okay.

15% in in-house wafer.

Okay. Thanks very much. I appreciate it.

Thank you.

That’s all for me.

Thank you. We have a follow-up question from Jeremy Kwan from Stifel, Nicolaus. Please go ahead. Your line is now open.

Yes, I have a quick follow-up on the joint venture. It appears that the equity method investment has increased by a couple of million, after a period of decline. Additionally, the minority interest loss seems to have risen slightly in the income statement. Can you help clarify what’s happening? Is the joint venture performing lower than before, and has there been an increase in investment there? Thank you.

In the March quarter, we reflected our share of the joint venture's results from the December 2022 quarter. We always experience a one-quarter delay in reporting. In the December quarter last year, the joint venture faced a loss, as opposed to a small profit in the September 2022 quarter. Consequently, we recorded 42% of their loss from the December quarter in our financials for the March quarter.

Understood. What caused the increase on the balance sheet?

That’s mainly due to the change in exchange rates affecting the translation, since their financials are in RMB, not U.S. dollars.

Yeah.

Yeah.

Thank you. This concludes our earnings call today. Thank you for your interest in AOS, and we are looking forward to talking to you again next quarter. Thank you.

Thank you.

Thank you.

Ladies and gentlemen, that concludes today’s call. Thank you for joining. You may now disconnect your lines.