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• Revenue: $150.1 million, aligned with guidance.

• Non-GAAP Gross Margin: 25.2%.

• Non-GAAP EPS: Loss of $0.04 per share, slightly better than expected.

• Computing Segment Revenue: Up 80.4% year over year, down 4.3% sequentially, representing 45.8% of total revenue.

• Consumer Segment Revenue: Down 47.1% year over year, up 0.3% sequentially, representing 15.7% of total revenue.

• Communications Segment Revenue: Up 39.2% year over year, down 7.4% sequentially, representing 17.9% of total revenue.

• Power Supply and Industrial Segment Revenue: Down 6.5% year over year, down 29% sequentially, representing 16.5% of total revenue.

• Operating Cash Flow: $28.2 million, with significant improvement from prior periods.

• EBITDA: $11.6 million.

• CapEx: $7.4 million for the quarter.

• Cash Balance: Ended the quarter with $174.4 million.

• Guidance for Next Quarter Revenue: Approximately $160 million, plus or minus $10 million.

• Guidance for Next Quarter Non-GAAP Gross Margin: 26.3%, plus or minus 1%.

Release Date: May 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Revenue for the quarter was $115.1 million, marking a 13.2% year-over-year increase, showcasing strong recovery from previous inventory corrections.

• Non-GAAP gross margin remained stable at 25.2%, demonstrating effective cost management and operational efficiency.

• Significant growth in the computing segment, with revenue up 80.4% year-over-year, driven by increased demand in tablets, AI accelerators, and graphics cards.

• Successful expansion into new applications such as AI and advanced computing, enhancing product offerings and market reach.

• Anticipated strong rebound in consumer electronics, particularly in gaming and smartphones, expected to drive revenue growth in upcoming quarters.

Negative Points

• Sequential revenue decline of 9.2%, attributed to seasonal fluctuations and ongoing inventory adjustments in several market segments.

• Continued inventory corrections in quick chargers and solar segments, indicating potential volatility in these markets.

• Communications segment revenue was below expectations, with a 7.4% sequential decline due to reduced shipments to major smartphone OEMs.

• Gross margin pressure from lower utilization and ASP erosion, despite a favorable product mix.

• Challenges in the power supply and industrial segments, with significant sequential revenue decline, reflecting broader market headwinds.

Story continues

Q & A Highlights

Q: Thanks. Good afternoon and thank you for taking my question and congrats on the return to growth here. And it sounds like you guys are a lot more positive than we’ve we’ve heard in some time. So that’s great to hear. I guess, Steven, just one of the first things I wanted to ask was on the smartphone on the handsets there. You talked about that being a little bit better or strength Q-to-Q. Is that when you would typically begin to see that order pull in for those flagship launches? And how do you think that compares relative to prior years. Do you think you’re seeing any changes in those order patterns or would you describe it maybe as typical? A: Certainly we’ve commented on smartphones is doing better than normal seasonality in a typical year. We would usually see the March quarter as a low season for smartphones, kind of opposite of the fall launches that we normally prepare for. And this year, actually, we saw strength in the in the March quarter is not generally it is still not. It still dropped a little bit compared to the December quarter, but actually still at a very high level. And I think the key difference for that is actually the strength in the China market, especially particularly in the premium phones. And that has all helped to offset some of this the normal seasonality we see in the other phone makers.

Q: And just as a reminder, are you able to ship in the wall way on any products there or are they still not not a customer? A: They are right now. We do not ship to Huawei.

Q: Okay, perfect. Thanks. That’s great. And then just sort of story. You guys, you talked a bit about the U.S. and the new products, but it seems like you put out quite a few, especially on the compute side. Just wondering if you can kind of help us maybe quantify the magnitude of what these new products kind of bring into that, that compute markets and how that can help you grow that content relative to what you’ve discussed in the past? I’ve just come back CPU upgrade or generational change, but how much additional content do you think you can capture from the new products that you’re releasing into that market? A: Sure. So there’s actually quite a bit going on in the computing space in the normal computing and I would say is the client computing side. We are expanding our bond content, thereby by going after total solutions for not only going after that and the either the power stages. And we’re also introducing the multi-phase controllers in order just to sell a total solution into that into the powering the study core solutions so with that, we are seeing bond content and grow. We used to be in the $2 range is going into the $3 range. And depending upon the configuration can push higher than that, but that’s helping us in general because with the latest power maps not being used that the that the CPUs are being used and being used, we’re seeing more on driving losses, more more phases, which basically means more content for us going into powering the CPU now.

Q: And just as a reminder, the normal environment is that mid to high single digit declines. And right now it’s maybe high single digits scheme help us quantify that a little bit more in terms of the pricing environment? A: Yes. I mean, typically that would be in the mid to high single digit decline and the higher right now is more on the on an annual basis and trending toward the high singles.

Q: It is great. And I guess in terms of the competitive landscape, I think you mentioned before seeing more competition at the low end. Has that changed appreciably in the last three months on and yes, any more clarity on that that you can provide for us on in terms of, you know, how much of your portfolio it affects, that would be very helpful. A: I mean, in the past three months, and I don’t see a whole lot of changes in terms of on product mix and the euro, as I mentioned, and you know, in certain application end markets, yes, we do see some improvements, for example, in the smartphone in the private cars in those areas.

Q: Got it. And one final question, just going back to gaming for the recovery in the June quarter, is there do you have a sense of how much of that is coming from inventory headwinds going away and maybe even restocking and how much of it is coming from the higher bomb content you have on And one final question on that. I know it’s a little early for the next gen, but do you also anticipate like a step function but increase over this mid-cycle refresh platform into the bond content from you. Any more details on that would be helpful. Thank you. A: Sure, Jeremy. Yeah, for the gaming consoles, or was it just a reminder that we are as they are in about your four or five of their about seven year life cycle. And so that’s where the inventory correction is coming from as they are entering the second half of that lifecycle. So we are happy and encouraged to see the orders coming back and going into the June quarter end, I don’t have a hard number, but maybe roughly half half of it is we are definitely seeing the return of orders for existing parts that’s in the bomb, and we’re also seeing a ramp up for them. The derivative product that they’re bringing out towards the end of this year as well, too. And so both are making impact and helping to see for that subsegment to grow.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.