Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm First Quarter Fiscal 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. As a reminder, this conference is being recorded on February 5, 2025. The playback number for today's call is (877) 660-6853. International callers, please dial (201) 612-7415. The playback reservation number is 13750899. I would now like to turn the call over to Mauricio Lopez-Hodoyan, Vice President of Investor Relations. Mauricio Lopez-Hodoyan, please go ahead.

Thank you and good afternoon, everyone. Today's call will include prepared remarks by Cristiano Amon and Akash Palkhiwala. In addition, Alex Rogers will join the question-and-answer session. You can access our earnings release and a slide presentation that accompany this call on our Investor Relations website. In addition, this call is being webcast on qualcomm.com, and a replay will be available on our website later today. During the call today, we will use non-GAAP financial measures as defined in Regulation G, and you can find the related reconciliations to GAAP on our website. We will also make forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual events or results could differ materially from those projected in our forward-looking statements. Please refer to our SEC filings, including our most recent 10-K, which contain important factors that could cause actual results to differ materially from the forward-looking statements. And now to comments from Qualcomm's President and Chief Executive Officer, Cristiano Amon.

Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. In fiscal Q1, we delivered record revenues of $11.7 billion and non-GAAP earnings per share of $3.41. Our chipset business achieved record revenues of $10.1 billion, the first $10 billion quarter for QCT, including record quarterly handset and automotive revenues. Licensing business revenues were $1.5 billion. We're off to a great start in fiscal ‘25. Our mobile roadmap is the strongest in our history with exceptional traction for Snapdragon in premium tier handsets and we are delivering growth across our diversification initiatives. This quarter, automotive and IoT revenues grew 61% year-over-year and 36% year-over-year, respectively. We are committed to achieving $22 billion in non-handset revenues by 2029 as outlined during our 2024 Investor Day. Our advanced connectivity, computing, and edge AI technologies in our product portfolio continue to be highly differentiated and increasingly relevant to a broad range of industries. We also remain very optimistic about the growing edge AI opportunity across our business, particularly as we see the next cycle of AI innovation and scale. DeepSeek-R1 and other similar models have recently demonstrated that AI models are developing faster, becoming smaller, more capable and efficient, and now able to run directly on device. In fact, DeepSeek-R1 distilled models were running on Snapdragon powered smartphones and PCs within just a few days of its release. As we entered the era of AI inference, we expect that while training will continue in the cloud, inference will increasingly run on-device, making AI more accessible, customizable, and efficient. This will encourage the development of more targeted, purpose-oriented models and applications, which we anticipate will drive increased adoption and in turn demand for Qualcomm platforms across a range of devices. With the industry's most powerful and efficient AI processors for the edge, we're well positioned to drive this transition and benefit from this upcoming inflection point. Let me now share some key highlights from the business. In handsets, we're pleased that the recently launched Samsung Galaxy S25 series of smartphones will be powered by the Snapdragon 8 Elite for Galaxy globally. The Snapdragon 8 Elite for Galaxy delivers the latest AI experiences, showcasing one of the best integrations of Galaxy AI and Google Gemini. We are encouraged by the number of AI features which has nearly doubled in the Galaxy S25 series. We expect this trend to continue as part of the transition to AI smartphones. We're extremely proud of this launch and our long-standing strategic partnerships with Samsung and Google. As a reminder, the Snapdragon 8 Elite is our most powerful mobile platform today, featuring the industry's fastest custom CPU, the most powerful NPU, incredible GPU performance, and the best camera. In addition to Samsung, we're very pleased with the design traction and strong end customer demand for recently launched Snapdragon 8 Elite powered flagship smartphones by Chinese OEMs. Our design win momentum in PCs has also increased, with more than 80 designs in production or development on our category-leading Snapdragon X series platforms, and we're targeting more than 100 designs to be commercialized through 2026. Importantly, we recently announced our newest compute platform, the Snapdragon X, specifically designed to address PCs in the $600 price range, further expanding our addressable opportunity. Snapdragon X features best-in-class performance, multi-day battery life, powerful on-device AI, and Copilot+ experiences. We look forward to PCs powered by Snapdragon X from leading OEMs including Acer, ASUS, Dell, HP, and Lenovo in the coming months. In partnership with Lenovo, we introduced the world's first mini desktop AI PCs powered by the Snapdragon X series. These devices redefine compact computing in a new form factor ideal for developers, consumers, and enterprises. The number of NPU powered on-device AI experiences running natively on Snapdragon has continued to grow with more than 50 AI applications now optimized for Windows 11, including apps for enterprise collaboration, productivity, creativity, and more. Microsoft also announced it is bringing NPU optimized versions of DeepSeek-R1 directly to Copilot+ PCs beginning with the Qualcomm Snapdragon X series. Additionally, the broader app ecosystem continues to expand with Snapdragon native apps now including 20 of the most popular VPNs, 50 of the most popular security and cloud storage apps, as well as new applications for creators. While we're still in the early phase of the transition to Copilot+ PCs, we are pleased with consumer reception for Snapdragon X series, which has exceeded our expectations. According to Circana, in December, Snapdragon X series had more than 10% share of the greater than $800 window laptops in US retail. In XR, we remain the preferred solutions provider for VR, MR, and AR across major OEMs and ecosystems, and our strategic long-term collaborations with Meta and other key partners are playing a key role in growing this area. The Snapdragon-based Ray-Ban Meta glasses continue to exceed expectations as they adopt more AI features. We remain optimistic that we are at the beginning of an inflection point for smart glasses to gain scale as they become wearable AI. Additionally, at the recent XR Unlocked event, Google announced Android XR, and we are pleased that the first device available for purchase later this year will be built by Samsung and powered by the Snapdragon XR platform. We continue to expand our industrial IoT portfolio of products and solutions, and we are encouraged by the positive reception across multiple industry verticals, including energy and utilities, robotics, manufacturing, warehousing and logistics, retail, enterprise, and commercial. At CES, we introduced our AI on-prem appliance and inference suite, which enables Generative AI inference in computer vision workloads to run on dedicated on-premises hardware, allowing sensitive customer data, fine-tuned models, and inference loads to remain within the enterprise. The AI inference suite provides ready-to-use AI applications and agents, tools and libraries to easily operationalize AI and GenAI applications in a variety of deployments on-premise or in the cloud. Our first wave partners for these new platforms include Honeywell, IBM, and others. We also announced the next evolution of Qualcomm Aware, our cloud-based asset visibility platform. As a horizontal enablement platform, Qualcomm Aware allows for a highly integrated way to add cloud-based observability and insights, geolocation, fine indoor positioning, firmware updates and device management services to connected devices. In edge networking, we're pleased with the momentum in Wi-Fi 7 with recent product launches from Cisco, Charter, Eero, Netgear, Nokia, and Ubiquiti. We're also seeing strong traction for 5G fixed wireless access with next-generation design wins at operators in North America and India. We continue to strengthen our position in automotive as the industry's leading technology partner for the software-defined vehicle, AI-powered in-cabin systems, advanced driver assistance, and connected car experiences. At CES, we announced new collaborations with Alps Alpine, Amazon, Google, Leapmotor, Mahindra, and Hyundai Mobis, which will use Snapdragon digital chassis solutions to drive AI-powered in-cabin and advanced driver assistance systems. We also expanded our partnerships with several Tier 1 suppliers to now utilize the Snapdragon Cockpit Elite platform, including with Panasonic Automotive Systems, Garmin, and Desay SV. These collaborations will bring advanced intelligence, including Generative AI, to all levels of software-defined vehicles, enabling automakers to build safe and extraordinary user experiences. We're very pleased with the strong industry reception to Snapdragon Cockpit Elite platform since its launch late last year. Our new collaboration with Hyundai Mobis will combine the Snapdragon Ride Flex system on chip and the Snapdragon Ride automated driving stack with Hyundai Mobis cutting edge software and sensors. This will deliver a comprehensive system solution that powers advanced infotainment and advanced driver assistance systems, bringing a one-of-a-kind user experience to future vehicles. Another significant milestone was the launch of the Snapdragon Digital Chassis Workbench, a cloud-based workflow for developers building the software-defined vehicle. To complement the hardware and software of the Snapdragon Digital Chassis, Workbench provides a complete development and test environment to build and deploy automotive applications. Finally, we remain very pleased with the execution of our QTL business in recent years and were well positioned to maintain fiscal ‘24 revenue scale going forward. Over the past year, we have extended key agreements with major OEMs and were poised to shortly execute new long-term license agreements with two additional large OEMs. We also recently signed Transsion to a long-term 4G license to go along with the 5G license signed in the last fiscal year. Our progress reaffirms QTL as the industry's most extensive licensing program of cellular essential patents. Before I turn the call over to Akash, I would like to provide an update on the Arm vs. Qualcomm trial from December 2024. The jury's verdict vindicated Qualcomm's CPU innovations and affirmed that Qualcomm's contract with Arm provides a license for Qualcomm's products containing our proprietary Oryon CPUs in industries such as smartphones, automotive, next generation PCs, IoT, and data center. In addition, ARM recently notified us that it was withdrawing its October 22nd, 2024 notice of breach and indicated that it has no current plan to terminate the Qualcomm Architecture License Agreement. We're excited to continue to develop performance leading, world-class products that benefit consumers worldwide, including our incredible Oryon custom CPUs. I will now turn the call to Akash.

Thank you, Cristiano, and good afternoon, everyone. I'll start with a summary of our record performance in the first fiscal quarter. We are pleased to announce revenues of $11.7 billion and non-GAAP EPS of $3.41, both of which were above the high end of our guidance. QTL revenues of $1.5 billion and EBT margin of 75% were in line with expectations. QCT delivered record revenues of $10.1 billion, which was above the high end of our guidance due to outperformance across Android handsets, IoT, and automotive. QCT handset revenues were a record $7.6 billion with 13% year-over-year growth, reflecting higher volume and content increase in Android premium tier, driven by industry-leading performance of our newly launched Snapdragon 8 Elite platform. Higher volume in Android premium tier in the quarter was driven by stronger end consumer demand for recently launched flagship smartphones and global share in Samsung Galaxy S25 devices. QCT IoT revenues of $1.5 billion increased 36% year-over-year, driven by new product launches with our industry-leading processors and on-device AI capability across consumer networking and industrial. We delivered our sixth consecutive quarter of record QCT automotive revenues of $961 million, representing 61% year-over-year growth on continued content increase in new vehicle launches as automakers deploy our high-performance, low-power computing and connectivity chips to bring next-generation experiences to consumers. QCT EBT margins of 32% exceeded the high end of our guidance, reflecting the benefit of revenue upside and operating leverage. QCT EBT dollars of $3.2 billion increased by 25% versus the year-ago period. Lastly, we returned $2.7 billion to stockholders, including $1.8 billion in stock repurchases and $942 million in dividends. Now, turning to guidance. For the second fiscal quarter, we are forecasting non-GAAP revenues of $10.2 billion to $11 billion and non-GAAP EPS of $2.70 to $2.90. In QTL, we estimate revenues of $1.25 billion to $1.45 billion and EBT margins of 69% to 73%, reflecting normal seasonality for headsets units. In QCT, we expect revenues of $8.9 billion to $9.5 billion and EBT margins of 29% to 31%, with strong year-over-year growth across handsets, IoT, and automotive. We expect QCT handset revenues to grow by approximately 10% on a year-over-year basis, including the benefit of increased shipment for Samsung Galaxy S25 smartphones. On a sequential basis, the decline in QCT handset revenues is primarily driven by seasonality and shipments to Apple. We expect IoT and automotive revenues to grow by approximately 15% and 50% respectively versus the year-ago period, driven by the strong product momentum I just outlined. Lastly, we estimate non-GAAP operating expenses to be approximately $2.25 billion. In closing, we are very pleased with our strong first quarter results, with new records across the following metrics: total company revenue, non-GAAP EPS, QCT revenues, QCT handset revenues, and QCT automotive revenues. In QTL, we finalized renewal negotiations for long-term licenses with two key Chinese OEMs and expect to execute those agreements shortly. We also recently signed Transsion to a long-term 4G license in addition to the 5G license signed in the last fiscal year. With these additional long-term agreements, we expect fiscal ‘25 QTL revenues to be consistent with fiscal ‘24. Our recent product announcements at CES across PC, automotive, consumer, and industrial IoT, along with the continued performance leadership in premium tier Android handsets, underscore our position as the connected computing leader across edge devices. Lastly, as AI approaches an inflection point of scaling at the edge, our leadership in high-performance on-device inference solutions positions us to benefit as we lead this transition. This concludes our prepared remarks. Back to you, Mauricio.

Thank you, Akash. Operator, we are now ready for questions.

The first question comes from Joshua Buchalter with TD Cowen. Please go ahead with your questions.

Hey, guys. Thanks for taking my question. I guess to start, I wanted to clarify the QTL guidance. You're talking about flat or levels with fiscal 2025 versus 2024. I know you signed the two agreements recently. Could you maybe speak to how we should think about your assumptions on overall unit shipments and the royalty per unit tracking through the year. Thank you.

Joshua, it's Akash. I think our overall assumption on the market is that it is either flat or grows low single-digits on a year-over-year basis. Now, of course, this doesn't take into account upside opportunities in terms of the China subsidy and the AI replacement rate. But the baseline assumption is what goes into the QTL forecast that we just gave.

Our next question comes from the line of Samik Chatterjee with JPMorgan. Please proceed with your question.

Hi, thank you for taking my questions. And I have a couple of questions, but maybe if I can start off on the PC platform and particularly Snapdragon X. Maybe Cristiano, if you can sort of talk about how you're thinking about 2025 and 2026 playing out in terms of device launches on your Snapdragon platform for PCs, and particularly more interested in hearing how you're now thinking about the adoption curve between enterprises and consumers. What are you hearing from the OEM partners in terms of how to think about the adoption curve relative to enterprise and consumer as we go look for the next couple of years? And I have a quick follow-up after that, thank you.

Thank you for your question. We're pleased with the direction we're taking with PCs. To start, we mentioned at last year's Investor Day that we anticipate reaching $4 billion in Windows PC revenue by 2029, which is part of a larger $35 billion market, implying approximately a 12% market share. We have had a strong start with design traction, achieving over 80 design wins, either launched or in development, across the X series. Our goal is to commercialize over 100 devices by 2025 and 2026, indicating a positive increase in design traction. In the U.S. retail market, we've begun expanding into different areas, and we've captured over 10% of the market for Windows laptops priced above $800, aligning with our five-year growth projections. We're pleased with this initial metric as we move forward into new markets, and we're seeing ongoing growth in design traction. Initially, we focused on consumer applications, and now we are shifting towards commercial applications. This is why we are highlighting many commercial applications that are now available on Snapdragon, including features for VPN and security. We're particularly excited as we've launched a new product aimed at the $600 laptop segment without compromising on AI capabilities. A few days ago, Microsoft announced DeepSeek-R1 running on our Snapdragon X Elite laptops, reflecting our progress. Overall, we're satisfied with our current traction, which aligns with our long-term projections, and we will continue executing our plans.

Thank you for that information. For my follow-up, I'd like to build on what Akash mentioned regarding the smartphone market in China and the subsidies occurring there. What feedback are you receiving from consumers about these subsidies, and how do you see this affecting overall growth and sustainability? I'm not sure if Akash provided the growth figures for the Chinese Android OEMs this quarter, but how do you perceive their growth trajectory moving forward, especially considering these subsidies? Thank you.

Sure. Let me break this down into parts. Regarding the subsidy, it started in January, so we are still early in this cycle. We will have a clearer perspective next quarter. Historically, we have seen that subsidies can expand the market size, which presents an opportunity, although we have not included it in our second quarter guidance yet. Now, reflecting on the first quarter, we experienced significant growth in handsets, achieving record performance driven by two factors. Firstly, the year-over-year increase in content has been substantial, as enhancements in chipset capabilities affect our pricing. Secondly, there was a year-over-year rise in volume. When analyzing this volume increase by its drivers, we captured a larger share, particularly as Samsung utilized our products globally in the GS25, which boosted sales before the phone launch in December. Additionally, we noticed increased demand for premium devices in China, corresponding with a long-standing trend of growth in the premium segment, which contributed positively this quarter. Furthermore, our customers are gaining market share in China, translating into additional benefits. Overall, we feel very optimistic about these sustained long-term drivers in our business as we look towards the second half of the fiscal year.

Our next question comes from the line of Stacy Rasgon with Bernstein Research. Please proceed with your questions.

Hi, guys. Thanks for taking my questions. For the first one, I wanted to ask about the QTL guide flat year-over-year. So in the Q, it suggests that you're still negotiating with Huawei, and I'm assuming the QTL guide for Q2, which is a little lighter than normal, has no Huawei in it because of that. Does the annual guide for flat year-over-year assume you do not settle Huawei and if you do renegotiate and get some money, there would be upside to that number based on your current assumptions?

Yeah, this is Alex. So thanks for the question, Stacy. So basically what we've managed to accomplish over the last year or so is essentially signing up everybody to extensions. We've had a really good run of execution with bringing in Transsion for 4G, which is a significant development because they've popped up the ranks of OEMs in terms of unit volume, very high up the ranks, actually. So, the 4G complements the 5G license that we have been signed up to and they're transitioning to more 5G content in their overall product offering. And then we have these last two significant Chinese OEMs that we've signed up or that we finished negotiations with and the execution is just pending return from the Lunar New Year holiday. The Huawei discussions are still in play, so the numbers don't actually include the potential from a renewal with Huawei. And basically, everything else is taken care of.

Got it. So that flat guidance doesn't include any Huawei settlement, just to be clear?

Correct. Neither the second quarter guidance nor the full year comment.

That's great. For my follow-up, I want to point out that we've observed a significant amount of strength in personal electronics recently, and there are suggestions that this might be related to pre-tariff pull forwards. I'm curious if you have any insights on whether the threat of tariffs could be influencing some pre-builds or increased demand in the near term.

Certainly, we did not expect this question, but it's quite straightforward. Firstly, we are seeing higher than anticipated results, particularly with Samsung's global launch of the GS25. Secondly, there's strong consumer demand in China, supported by sell-through data indicating that the Snapdragon 8 Elite has performed well. Smartphone demand outpaces our expectations and the premium tier market continues to grow. Smartphones remain the top electronic device purchased. Additionally, the introduction of AI features has been positively received. Our customers are creating excellent devices and capturing more market share in the premium category, which is driving demand. As mentioned, all our smartphones utilizing the 8 Elite and their respective price points are eligible for subsidies, which was not included in our Q2 guidance and could turn out to be a significant factor as we typically see further growth in the premium segment. Importantly, this is driven by consumer demand rather than inventory buildup or pre-tariff production.

The next question is from the line of Chris Caso with Wolfe Research. Please proceed with your question.

Yes, thanks. Good evening. I guess following on with those comments, Cristiano, how should we think about the June quarter now? Because typically, June quarter, there are no flagship launches, and that has some effect on QCT. Given the share gain at Samsung, does that affect the seasonality for June at all, and how should we be thinking that in general?

Yeah, I think, Chris, you're right in terms of understanding our seasonality. When you look at the last several years, the framework across quarters has been driven by the timing of the flagship launches. As a result, we expect the first quarter to be the high point from an EPS perspective and the third quarter to be the low point because you don't have as many flagship launches in it. On your question specifically regarding Samsung, Samsung is in, and the impact of the higher share is included in the first quarter and the second quarter guide as well. It will be included in the third and fourth quarters as well. So I don't think it fundamentally changes the seasonality across the quarters.

Got it. As a follow-up, if you could address some of the higher price points that you're seeing on Snapdragon now, and certainly there are more features in there because of AI, but to some extent, it's also about cost too because the wafer costs are higher. What's the impact of that on Qualcomm, not just from a quarter basis, but looking a little bit out, should we expect ASP to be a tailwind for you? And then how are your OEM customers dealing with that? Is it a factor of, are we just going to see a mix higher to higher-end phones, or is that going to result in higher ASP?

Chris, the primary driver here is that there is a consumer demand for more capable smartphones. As we go from generation to generation, we're adding a lot more capability on the processing side, on AI side, and connectivity, and that is showing up in the price points in our chip. So that's the primary driver. Of course, as you're aware, the TSMC price increases for 3 and 4 nanometer did kick in in January. As we've said in the past, our objective is to reflect the cost increases in ASPs over a period of time. Those are the key drivers. When you step back, I think one of the messages that Cristiano gave earlier is an important one; the overall market is not just about each tier having a more capable chip, but a mix shift across tiers and a larger market for premium devices.

Thank you. The next question is from the line of Ross Seymore with Deutsche Bank. Please proceed with your questions.

Hey guys, thanks for letting me ask the question. I just want to ask a more cyclical question, probably most applicable to your IoT segment. That business has been very strong year-over-year, but you've had a couple of quarters with negative sequential comps. Is that just normal seasonality, or is there cyclicality involved that some of your broad-based peers are seeing? Just kind of want to judge where we are in that cyclical trend.

Yeah, Ross, there's definitely one of the big drivers on the quarterly profile is because of consumer IoT, and that does have cyclicality involved because you're building for the holiday season, and then when we get into the March quarter, of course, you're past that point. When you look at the other two parts of our IoT business, which are industrial and edge networking, we're consistently seeing strength across the quarters.

Great to hear that. I guess as a follow-up question, then switching gears to the gross margin, Akash, congratulations again. It looks like you kept that in QCT pretty much flat sequentially despite your thought that it was going to go down in the December quarter. Is that something that is just structurally going to be a little higher than that, I guess, kind of implied 48% to 49% range, and if so, what's changed?

Yeah, the gross margin, both in our December quarter and our March quarter, benefits from the fact that we have stronger premium tier volume. That improves the mix, overall mix of our portfolio, and that shows up in gross margins. That’s kind of the primary driver of the strength. As you see the mix changes, it will flow through the margin numbers. But yeah, we are very happy, just like you, that the margin's been very strong.

Our next question is from the line of Timothy Arcuri with UBS. Please proceed with your questions.

Thanks a lot. I had two. Cristiano, is there any evolution in the way you're thinking about the modem situation with your large customer? I know there's been some back and forth on that recently. Is there any change there? Are you feeling like maybe you'll be there a little bit longer than you had expected? That's the first question.

Yeah, the answer is no. I think we're really operating with the assumptions. I think we've been very clear about what those things are. We expect 20% share for the launch that happens in 2026, and the current agreement ends after that. We're assuming no renewal, which means nothing in 2027. For 2025 launches, we expect share to be between 100% and 20%. So we don't know. But I think we've been very clear about how we're modeling the business, and I think that's the assumption going forward.

Thanks a lot. Akash, can you give us an idea of how big the PC business is within IoT? You said you were 10%, I think, of the $800, or sorry, the above $800 laptop market in the US. I'm guessing you did about $100 million, a little bit more than $100 million in December. Is that close? Thanks.

Yeah, Tim, it's Akash. So from an overall revenue perspective, I think the way we've set it up is we've set targets long-term for ‘29 for each of these areas, and we plan to give an annual update on each of those targets. So we're not breaking it down every quarter by area. To me, what's the most important thing on the PC is the market that we were playing in, which is devices over $800, and our focus on retail to begin with. We're very happy that we were able to get 10% share. I think just as Cristiano said earlier, if we equate that to our long-term target, which is 12% of the overall market, that's a great start towards the number we'd set up.

Thank you. Our last question is from the line of Tal Liani with Bank of America. Please proceed with your questions.

Hi, everyone. I want to highlight the 20% growth in smartphones and QCT this quarter. My question is about how long this can last. The overall market isn't growing. Last quarter, we saw significant growth in China. This quarter, we have the initial Samsung results. Can you discuss the sustainability of this trend? Is it possible to grow even if the market remains stagnant? Also, could you provide an update on demand in China? Thank you.

Sure, Tal. So let me break it down. If you look at our year-over-year performance in QCT handsets, we were up 13%. As I said earlier, the drivers of those are really a combination of higher volume and higher ASPs. The ASPs as content increase, which we've talked about, we've seen consistently that continue to increase over the last several years. As we look forward, we think that's very sustainable; we're just adding a lot more capability to the device, and consumers are looking for that opportunity. In terms of volume, one of the key metrics for us is the fact that the premium tier continues to grow. So if you look at the last three or four years, devices greater than $400 have gone from being 21% of the market to now over 30% of the market. That is a trend that's incredibly positive for us because that's the market that we are very strong in. We have a combination of the units within that part of the market that is growing very quickly, and within that, our content is growing as well. Those are the two factors that drive the handset growth of 13% on a year-over-year basis. When you look at the March quarter, we're guiding handset growth of 10% on a year-over-year basis, which is again a very strong number. So pretty happy with how we are set up in that business in both the first half of the year, and it positions us well as we look forward. Can you repeat your question on that, Tal, please? Just China.

Just China. China was strong the last few quarters. Can you give an idea? Maybe I missed it, but what's the current trends in China?

Yeah, I think China definitely is strong in the premium tier. We've seen that part of the market grow. We’ve also seen our customers gain share within that market. And then last thing is we’re going to have subsidies come in, and so there is a potential that that benefits that part of the market as well. So, pretty, I think, positive tailwinds for us there.

Thank you. That concludes today's question-and-answer session. Mr. Amon, do you have anything further to add before adjourning the call?

Just would like to add that.