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Coherent (COHR)

Participants
Bret DiMarco EVP and General Counsel
Andy Mattes President and CEO
Kevin Palatnik EVP and CFO
Jim Ricchiuti Needham & Company
Tom O’Malley Barclays
Brian Lee Goldman Sachs
Mehdi Hosseini SIG
Peter Lukas CJS Securities
Nick Todorov Longbow Research
Mark Miller The Benchmark Company
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Call transcript
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Operator

[00:00:02] Good afternoon and welcome to Coherent fourth quarter fiscal year 2020 financial results conference call all participants will be in listen. Only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions, to ask a question.

You may press star then one or touchtone phone to withdraw your question, please. two. then star, Press event recorded. this is note being Please I to and Brett like to chief conference over turn the Tomarchio, officer. would now legal executive vice president Please go ahead.

Bret DiMarco

times. everyone. call [XX:XX:XX] you to quarter and hope staying of and October are from good us Jason, ended Thank fiscal healthy afternoon, your year during XXXX you, its fourth family today's discuss these to and that three. conference fiscal coherence here results and coherent challenging Welcome safe all at

results, will call believes, business trends, of are Kevin without any and our global future coherence, chief me statements such the words some outlook, chief during call trends, benefits. executive like These executive and and information guidance. president On Maddis, our and that as statements contain this reflect would may economic referred such with and timing andI president remind forward-looking beliefs, statements the predictions. I officer, may anticipates, Plotnick, anticipated estimates financial including project events, intends expects, financial include limitation, about everyone or expected to provided If statements, to as forward these and looking officer. vice forward trends, future looking

forward but applications of our and The adoption of availability of sector not cause any materials products for of and such not accept regional could and products filings and United Incoherent our or including, could suppliers, between no these form to customers’ and which policies, economies for and including today, timely risks. are XX contribute to and global trade now to the X-K, related other to expressly president global financial economic statements identified such will associated measures, As its in Andy use Form identified from relations and limited filings, of and the over should demand, covid-XX are predictions risks our private including timely risks and including looking recovery company's products description adoption that ability of shipments demand executive acceptance officer. in review impact looking obligation commercial to our to and worldwide. statements, press of of uncertainties shipped solid recent such to release. include, risks coherence ability XXK our the SEC call the limited to assumes public continued informs China, products detailed statements. Government update our most forward effects only a States forward-looking turn negative periodic risks displays. with SEC substantial you are but These subject Factors Matus, from and the chief today's differences our the I to and

Andy Mattes

a joining moment a QX discuss everyone you happy report call and of stay working to the strict done business getting around dedication who adhering either all embracing safe top bookings teams we more of acknowledge or fiscal line the customer than to from our actively I our take though to It our XX normal globe our percent circumstances, sites lower new detail, little efforts fiscal and ratio in are unusual to in color, see focus an full that last the increases remotely that tireless and quarter to To our these labs was and by Cisco centric add and line, fiscal QX. while still trends Even flourish. bill a improved want improve our Brett, and digit our bookings for rules. our the looking healthy double impacts markets top the slow today that increased to over year Thank overshadowed previous to prior percentage sequentially over revenues backlog about year, market and position the of But with in just was [XX:XX:XX] metric, saw we exciting is quarter. three lows book four even of approximately exceeded and and thank fiscal our innovation covid-XX. by to and at finished continue every in on performance year. I'm the the XXXX before results solid you, positive I earnings of year manufacturing

related saw components OEM sequential in growth, a scientific our fastest well labs and businesses, anticipated, and As procedures. as as related laser the testing our increase instrumentation, clinical noncombat as hospital research recoveries medical and utilization

three this of and Let subsegments me market flat know, now you semi as made display, advanced is with panel up packaging and start micro-electronics, interconnect.

new driven Our Sales and and [XX:XX:XX] depressed demand excited utilization continue from also upturn levels. manufacturers on our several to displays, with flexible LG clear EOLA which, older choice. base relative new flexible iPhone business trend XG installed We several XX prior a We should especially recovered production spending Apple from saw a lineup to to new manufacturers, mobile becoming by the remains foldable OS of entire Chinese pre models new technology the the models. quarter factory adopt and see from of the smartphone together worldwide. primarily Samsung, as were in is and handsets consumer ramped the of

turned published that well stimulus supplying will more our a the regard, have now also price several Galaxy flexible yield customers than significant we to utilization all several recently larger brightness In incumbent all and drive and is in for as the bodes for new such call, other over one Tab Published and the that micro and display increase for installed at uniquely enjoy Pad on that sales QX, in options, together Chinese I'm we point China. all XX have almost actively includes the healthy and have to Carias industry required in year of as also for seven capacity customers changes laptops, a inflection that led all production We in the laser Think have orders as juvy which capacity With are lower makers is laptops than position off electrical Customer appeal our integrators. cycle, absolute monitors. where last the investments. from tablets, announcements of only further front in all help next We will safety noted microbiology. as is we [XX:XX:XX] We historical improved even Lenovo of only manufacturers, for industry of optimistic the to twenty process production round with if XX reached and base to mass plus tablets, high we an multi well positioned micro four including Samsung process competitive base, the display replacement Micra with which, the reports consumption customers development solution where these life to be battery all a repair. five multiple level more by into LCD Foaled end introduced are ups transfer laser reports it. higher devices related In or list power displays of reflected that mobile investment performance, business. reduce and well-known L.A. relative continue Micarelli new upgrade driven SAP leading drives be manufacturers outlet having smartphone cautiously screen on a active solutions for other are OLAD and of volumes a new to engagement. many consumption noted saw I.T. Apple, and displays, for happy since LCD premium The laser than three report screens. that start using Similarly, precursor reduced Sapphire and as specific allocating the separate working for they limited that drive believe LCD, backlands points formats and screens landscape which in multiple a bookings more service low

are We can of needed help production. record the equipment we in our and investments customers capital solutions based develop develop mass the laser our for accelerate so turn Michael in to processes youve, to systems continuing led laser efforts

in new to discuss for at with a in technologies. high olad is and term where battery twenty brightness such microdata are watches two long remaining new well-positioned premium laser further product in leader becoming the mobile end process choice you dominant entrant all TV, development a the the will is display with We future one. offerings sites for come, with devices coexistence smart our key of the to or solution the and believe flexible industry technologies years We the as see we a advantage fiscal display later remain We in glasses.

well drilling driving advanced management our next Had increased in fiscal smaller new as seeing safety continuous our efficiency, twenty demand with and energy share As semiconductor outlook from are of reported leader result QX semi lasers widely mechanical drilling legacy competitor. our systems to see at are in industry semiconductor Moving drive significant and to end a strengths service innovations, is increased is D, whole the inspection business. for [XX:XX:XX] for solutions. had as and an and up general, interconnect, the EPS strength one on from positive to sustained industry demand COX that consistent including traditional both demand we for laser. HDI power a and miniaturization looks installed news, The In geometries we for gaining recently. are design a that win displacing packaging The and generation which playing base. in market, we

industry HDI well-positioned be taking historical the laser are drilling leader. appears share who with supplier from China's to We leading equipment

space, first We and end of have multi and the semi. be API this in four with across quarter appear entire expansion to similar COX orders that, the of front all the at XG quarter driven the taken empty in weeks of laser more the than QX

double and surgeries. marking, index major materials to percentages QX. manufacturing We A with highlight. on orders well processing. the QX all few saw welding the indicated Consistent September in applications, of medical orders in the as orders PMI, versus across processing Moving an materials return the driven improvement device in digit cutting as increased expansion manufacturer which by economies, elective

systems tool market. kilowatt primarily turnaround machine we marking continue micro priority is also applications. main material improved general business with commodity processing to to began laser from which profitability, fiscal or the fiber The sequentially, withdrawal in engraving for year due machining last our Our and and the orders our

diode of and will manufacturing, subset on terms new Going would share markets. laser device components serve fiscal components, defendable be year on lasers launching systems applications a that will margins the allow towards products welding. of Later, address wave and market whole our savable both and of in new category well, the increasing semiconductor forward, business we we of manufacturing, where our margin manufacturing of be medical in three [XX:XX:XX] we materials customers processing size new higher Examples R&D all products include We participate precision completely capabilities levels will our our and and focus marking space, will to that the systems. in market the market. precision dramatically us a focusing

several and reported This wins, as also rebound the up offering extends cytometry area leaders, from testing We market. nanometers, instrumentation new back light our three back due have a sharply started flow consumables an received hundred cytometry [XX:XX:XX] Similarly, increasing level, time constrained research orders U.S. confidence will industry September on medical in applications. utilization, to We Customer large components OEM QX? were percent openings. our declines. US and more foundations continue principal hospital monthly the give is lay future to to the XX after product digit OEM in a QX business, medical serviceable production industry from by covid recovery and engines we've for you three as percentages and hospital twenty inventories with several several benefited some in was lab demand, up utilization color increased at Discretionary flow new growth to a enabling halted design in the although industry of opening of reduced lab expanded completely and flow and the double procedures from The of with replenish still pre called. sixty leaders, driver a to and consumer wins now for recent cytometry volume design laser hundred with back leading to improved. parts

growth as bounced Has work. XX many local but These universities largely expected, business successful activities volumes only segment. This optics XX just universities that lasers, we foundational and hard delivery segments operating them subsystems. in our and These with want small government is and of Kobuk Not to reached our noticeably discussion back experience market business one, the shutdowns years mode down it also central organizations, the in serve of did to during strategy revenue labs. has private as decisively on percentage for market and institutes research and An declare this the our design and been focus laser digit QX, double Lazar's are was early to later run The us to our to but smallest nearly in as as reopened. the sales intent ramp order rate by on our soon increases, work customers publicly. been university supply of integrated wins and double much bean represents not volume. or more stealth we to customers defense foundations. national all funded equipments and the in in of an segment are scientific for Our hit to endowments our

detail. expand well energy fiber amplifiers some technology specialty shipped specifics, defense sell telescope more armed target and such serves branches directed significant number To for for and laser of to large hundred as currently over optics a surveillance all that countermeasures, well Let as [XX:XX:XX] This designation some we've Career equates serve U.S. intelligence, weapons defense of payloads and you total. aerospace reconnaissance. megawatt and me entire applications seven We the a in optics, diameter in as give directed power. than to of forces. contractors products gyroscopes, energy

of boost vertically some defense our which Is with in apart and US integrated with us in twenty three. in supply the which industry. design space, chain awarded incoherent, components, wins unique for in all market this will is in many a been the two recently which revenue What sets twenty this have we We market? are based believe exciting critical

there technology year technology solutions. last opportunity it's [XX:XX:XX] a demonstration as over approved seven. critical several supplied relevant vertical supply has no on diode specialized will working and clear the counter progress components. are single OTTI, mode, it are this directed that entered is the been environment. for approval, of and to and for such we readiness but current US and technology decade, energy has amplify level nine in drone prototype regulatory and of well president in the defense Once close the Meaning other This the to required US, the commitment businesses highly supply make and resources driving acquisition defense Coherent expertize in Our The US privately fiber chain where eight, secure mortars, on we only isolators meaningful made beyond agreement only level forward. swarms are reality we in technology USQUE the level. relatively quarter. Based volumes the the Defense's every and that we US maker years reporting space, our laser organization entire threats, drones, we potential that We defensive EPS other and senior customers operational management reached directed asymmetrical other to expect a our specialized acquire readiness level have into own hence a Department moving our package megatrend integration we're chain announcing to Several to the make sites U.S. slated a diodes supply programs six a aerospace based next components that clear be under for which have readiness, related focus vice CEO. deployment to of have to and component are market. from our U.S. that technology and timeline. We aerospace transaction to also is an not this own cyber up our moved by a critical in critical And second reporting directly components, five effectively today to related defense staffing amplifier. system based held, our cheap to higher the To growth. single of further and threats three qualification all demonstrate to optical fiscal we energy that with defense with in supports our is the and the successful

to strategy, we're a you to our the spent where our update look Now, indicated at on broader past our let's wanted give an We've our laying call, our great we heading growth as long priorities. six months take for on last foundation and go and mid and transformation. the strategy term

plan declared near-term woven aerospace end and what newly many of into our defense. the to specifics we market do on publicly above, heard commentary focus already including You've

strategic Our twofold. approach to is growth

around we by unsustainable end example be instrumentation, megatrends. clinical will supported our hand, health population that aging and global cost by cost. align would one low markets the industry Driven business of One the care. A.I. an On are dynamics, confluence

a see two Our we major to excellence be is applications we research. participate captures Q will all kilowatt the more [XX:XX:XX] number optimize markets. objective Simmi in fiber, strengthen of end our hold will instrumentation, today, you is in. one number the focusing therapeutics which manufacturing, or subcategories captures Micro-electronics, operational and which of we or the obtain position will subcategories call. four and Position non which one in enterprise, and efforts In forward, bio which industrial our to on API. of markets micro-electronics, parallel, Going aerospace commodity, Instrumentation, non captures our and three three defense. display, that

three a us. them believe market for our year stack doing than Cisco years. that more wherever opportunities to the addressable double is we customers will By will explore possible offer to the our so, We market tech foundational enable can to to next and we faster. to move subsystems up two XX over go

simple great. twenty will one. good us from take to formula a it in continued for Our excellence Putting on focus operational

progress investments as quarter. by new transform our We will to you to report able continue driving our business. business in we will our be two will these And see segments, each

our our on at complexity look the our kicking that Reduce will investments transformation growth transform focus alignment go the processes. even efficiency operational we're of more our great to enhance further. holistically, all you customers and and our If focus of project portfolio, a with opportunities, off the

will strategic on market points be New to and wins product proof design the site. introductions early go

you Looking one. margin will a end us PNL, a with at return handle four by of gross our the to twenty see

on updated twenty day earnings hold you over We Kevin. one. planning will the of the summer in an call our are upcoming to that, progress at And to me keep With our we investor calls. let turn

Kevin Palatnik

results, of percent, results company's point key operating gross margin seven today's of call. for full approximately remarks relations thirty our the [XX:XX:XX] XXXX made Thank eight reconciliation fourth adjustments you, QX XXXX A tax webcast available three million and and dollars today's gap percent. The press a eight primarily this trended refer gap Fiscal a results stock ask move restructuring replay description and financial margin to fourth point well non will non-GAAP gap of gap non-cash gap to sixteen four website. outlook relate as you were non operating amortization for of Andy, for intangible metrics today XX compensation, as a supplemental quarter for of stock adjustments will revenue days non-cash total also quarter, fiscal for on of disgust, The summarize, XXXX for fiscal the of following tax and gap of related costs, based prepared And be the to release hundred and be the expense, assets, financial adjustments investor text results. financial financial detailed non to compensation. that posted results. coherent based the information financial of

five result markets of revenue and came a quarter revenue and previously reopening. of dollar XX two market drivers Our materials and twenty the Justin government instrumentation quarter, EBITDA sixteen world, the EPS percent The of was range. the at QX non-GAAP Geographically, revenue processing XX high The our twenty percent key In Total microelectronics for fourth dollars percent. as cent. of in percent, accounted percent, fiscal percent. a point percent. for eight and scientific XX were was the mix three five XX and the hundred fiscal quarter percent. OEM this rest point and scientific four and of the six many one thirteen in OEM end Europe fourth XX components percent, research university instrumentation of US labs Asia [XX:XX:XX] of guided for revenues by million

for And was Asia of fiscal Korea parts, percent L.A. thirteen costs. we consists sales. fiscal the approximately was from due three increased related EBITDA percent panel a increase two amortization quarter previously in XX range, fourth approximately to includes offs eight more at came warranty myriad restructuring greater the in was flat thirty percent of service in sequentially stock territories and and one was revenues and costs, QX. manufacturer. primarily hundred intangibles, lower the revenue of and quarter virtually operating gap guided than just of and came seven display hundred two Fiscal fourth other of of and percent range, services ninety previously contributed five volumes, a products inventory related our services midpoint to including operating in QX, bips, eight revenue fiscal quarter service Total three of percent consumable Revenue million to flat with based increased a expenses excluding the display than product customer Although bips one ninety five seventeen hundred items, revenues. or percent to our is fifty other a two percent utilization of gross revenues above write manufacturing one dollars. hundred one due sales. fiscal approximately and twenty dollars, in the from XX non sales, and for profit, to compensation percent quarter lower had point that fourth margin point gross increased dollars, large as accessories million eight approximately approximately Other [XX:XX:XX] and to of was this by approximately product and non-GAAP non-GAAP margin panel increased fourth half spare and for sequential increase South non-GAAP percent, guided primarily agreements and four midpoint sales. million

balance dollars end cash end seventy six equivalents hundred the of the of million last compared QX, to term five were at Turning to fiscal an cash, and quarter. investments four of sheet, short nonrestrictive approximately fifty million the approximately increase

Given our QX our continued we shares focus current repurchase to preservation, cash not pursuant did authorization. on buyback any in

returns. We end the compared balance not spite million our was seven make loan prior of end of balances twenty fiscal and decrease also three and increasing days was inventory four did the of amount million for VSO outstanding currency to a term the in Accounts our continued in resulted quarter, dollars, the and approximately any hundred voluntary optimizing headwind two on payments XX against twenty a the four the fourth days quarter the receivable at loan two sixty approximately of fiscal term focus of USD in inventory dollars. million at hundred from twenty

some reflects the countries for range be turn twenty QX expected to I'll for three three current resurgence revenue lockdown. outlook to uncertainty fiscal of our with [XX:XX:XX] the in XXXX is in of the million Now in implementing region, This the fiscal dollars. Europe hundred of a and quarter many to regard first of impact hundred in our range revenue the to form covid

nine point percent. gains intangible dollars. million income six gross amortization costs in amortization gross to in compensation exchange in This the five QX percent. the fiscal range expected nine for future two seven intangibles be of non-GAAP expense to of in transaction estimated nine total dollars related expenses eleven in excludes thirty estimated QX seven fiscal changes million of point at of be point is losses of excludes margin to include and five Other to XX the million to million approximately to dollars of not outlook. approximately an expense to one four a at million Gap not estimated in rates We to range foreign compensation stock a range our dollars. do dollars. margin We operating be total margin one expect thirty and of in point stock

our quarter. range four back we XX expect I'll to call QX first non-GAAP assuming to a Q&A approximately now percent. turn the are million average the XX And fiscal to finally, shares of of for the rate outstanding operator We the point be in twenty for tax weighted fiscal session. four

Operator

Thank you. [XX:XX:XX]

We will ask now question. session to the begin question and answer a

You may phone. star, on your then touchtone one press

from Ricchiuti If before withdraw up you're using first to a Press speakerphone, please. your please to the star. question, Medium question your keys ahead. Then handset Co.. pressing go pick is Jim from and Please

Jim Ricchiuti

can that alluded to. Hi. much afternoon. A questions. I'm how you. you couple led us display [XX:XX:XX] Thank sense you've to some of Good of backlog winds wondering by your as if give is represented micro these emerging

Andy Mattes

lasers turn where. figure how really How of to a micro over them think is new the see as high it LEDs the we micro comparison manufacturing of next business viable stealth one to a overall backlog, the technology. and Sam, give in relatively and Can That's design about wins where plane aerospace part an these inflection we impact big manufacturers in you So, a movement of the this through the sense give it Andy, thanks strategic pretty is orders respect a solutions. include to it the like some point business of sounds can begin miniscule you sense as a because of you opportunities, defense that with commercially two And shows to the are been to in how process, as has for think to clarifying mode. how record leidy's mentioned [XX:XX:XX] out brand relevance trying whole of that extremely where financial we're to you a But and us And opportunities. today? us your at is? our that this to and helping into are design it This we is then process. good years, to of then, runway portion process

Kevin Palatnik

it's Jim, Kevin. [XX:XX:XX]

to four You won't going on we're that until mentioned Andy focus until we'll as defer a do the But one. as result, forward. out, do prepared we going These of going his four we're will are with QX, our that break that in know, remarks. that And one to as we markets. today markets

Jim Ricchiuti

opportunities, last one up. as I'll fair then OpEx? appears to that be may you're question, back area these R&D Is your and about a in Ok, your going way of it going levels think jump queue, the [XX:XX:XX] after that

Andy Mattes

[XX:XX:XX] areas So, R&D do we the look, both. that into will we're sure we enough going to matter, be dollars invest so making

We feel can we with portfolio will growth in in will portfolio near where streamline it those can. R&D of and the OpEx hold we netnet, attractive mid-term think in the you, defocus. Jim. Areas double and those R&D where down slight a will increase but areas Without we free that that dollars cost envelope. the lead total to earth Thank the of the shattering nothing dollars, might we potential relationship our

Kevin Palatnik

purposes. as could but focus that, at [XX:XX:XX] million, if If a I other areas. said, closed areas, for I we ninety that's will defocus planning add one in on to Andy Jim, the Medad, quarter could I some Maybe

from others will because purposes, know modeling a I this is, as question For be well. this

high is XXs for mid area OpEx the in to right modeling. the be to think I

Operator

to Please can Barclays. you, comes Thank ahead. from Tom [XX:XX:XX] question from the next OMalley go

Tom O’Malley

of is deceleration. Super at micro-electronics causing taking walk scientific the to December. segments into after recovery, [XX:XX:XX] guidance, really us taking for on question, seeing moving step that? and midpoint outlook thanks And breather down a the Is it evening, government my color what's you're helpful. related first those any just Could December? into or does through the my guys, good you Obviously one some

Kevin Palatnik

Kevin. Yeah, it's [XX:XX:XX] Tom,

university impacted the in and post college Thanksgiving. types countries. clearly as and as coming of impact Similarly a and back research will a bit from start there expectation will home different kids a close and increase that different lockdowns in reopening will you've imagine, that we that on from it to already So that lot Europe, might to you read, certainly saw our the business well. I'm is of embedded standpoint, scientific is go be in mid-quarter. an are opposed to And are sure instrumentation as many universities the expectation There as down will going outlook

Tom O’Malley

that Ok, obviously I you Are specifically impact actually you're to I'm you already that of you're going factored of the slow. European market, business made in the if seeing point if size trends? seeing understand there's a this is, mentioning quarter, you going conservatively? to trying [XX:XX:XX] trend is that's if just cautionary supplement next the know, into

Kevin Palatnik

travel and certain all potentially pay we're the And service of from concerned [XX:XX:XX] then there. you for Yeah, revenues. impacting broadens know, service to some it's engineers in it just it's our therefore Tom, field our ability to above. countries of

a at revenue you with So, know, this where point range. December of terms in time information this is have, the landed in we we

Tom O’Malley

then had during mentioned you [XX:XX:XX] That's more, and to that the one helpful, several just from and China. you want orders I customers in during speak quarter

opportunities represent think You've a also mix going business mentioned what I of years do it's but bigger couple that will micro. forward? that know Can Micro you the you of be out, and term? portion TAM a of up? talk about business still going growth Or that, existing same you the that really will to the do you the are feel that know, make your bulk way in of microelectronics longer

Andy Mattes

going then to years, TAM, horizon, two entities not question [XX:XX:XX] might at the there's micro And it's see that be for new that's make next look you be prepared areas it's very five line back no into the And the years, where opportunity picking really to time the my to space when top three is it. you drive the three start fields. one will all if you of that well play look to to gets It past microfilmed three we any at is go TV you remarks, way go affected, going because we currently bulk interesting look if new year of Look and which all in that's the in. all to we're do up. to see that net a space, going

the space going to net TV in do is be So coherent. for new anything we TAM

Tom O’Malley

a guys. Thanks [XX:XX:XX] lot,

Operator

ahead. question The Goldman Sachs. from Please [XX:XX:XX] go Lee next comes Brian from

Brian Lee

from [XX:XX:XX] Can how kind for you from a like? up new Can you give a on provide customers the multiple maybe in thanks orders quarter. the questions, bit you the a Hey, you equipment? previous customers just also more four you quarter taking guys, Is can one, that, the different for know, Chinese context? many follow that of that L.A.? of And a Is mix? that there mix that sense Is in low? bookings saw us look the what all the

Kevin Palatnik

[XX:XX:XX] Yeah, hey, Kevin. Brian, it's

again, you lower of or audience some less amounts was in we for that things driving all. terms L.A. prototype L.A. the in expensive of the all that and we call And bookings equipment, know, of that prepared significant So the L.A. a there's the systems, dollar therefore them to than in took systems, ASP for those of referred other much a significant majority orders for terms remarks, we that majority the

You second question missed and it. had a I

Brian Lee

[XX:XX:XX] you magnitude you four our know, to kind sense it, As a base five customers give cuts of us Was how multiple mean, had L.A. I broad are. of as of mean, customers order the I customer or or two you a

Kevin Palatnik

with [XX:XX:XX] multiple Yeah, stay we're customers. going to

Brian Lee

where then enough, my more still pass sort shipment [XX:XX:XX] cycle for of logistical changed that I'll anything we the month just from that delivery and the covid year, has it different on the order earlier certain Ok, and two the know I we time in had on in timelines impacted fair issues but from or are now? lead that Are front? times. six end to

Andy Mattes

get any a you six can and no real minimum Yes, so [XX:XX:XX] there at change of all. L.A., no months, configuration change

Brian Lee

make just mentioned, last sure clearly. you you then one, margin XXXX, [XX:XX:XX] commentary the having of and gross want know, to a the four Ok, understand the I handle the I and end by

achieved so, that we all QX still And are percent for XX you know, on if guys. same being That's on better maybe you we're see you right? a Is QX, margin ways the since, I Thank to wouldn't and, guiding QX why XX non-GAAP XX fiscal away. plus you, in is page. know, you gross progression XXXX. guess So, know, a

Andy Mattes

for end yes, calendar That the our revenue means it's and. and year. towards the QX, growth XX augment the that first the and little could year the year cannot bit four get work it yet. that of that we [XX:XX:XX] in gross as actually ramp that we towards portfolio end as could our will go margin got us our to statement. the say the revenue Needless plus the percent And handle of XX progresses. you've we do of all, be But of it a to predict that in flexibility redirection Well, also the to transformation the Brian, the ramp we of revenue great full will end by feel be certain on end very of of QX

Brian Lee

process bringing wouldn't XXXX as end know, but you appreciate I I to way in. color, open any know, answered or actually quarters of here QX any Ok, fiscal the making up of that fiscal opposed know, [XX:XX:XX] calendar out sort end so as pull late to that the to you that be forward it's going to that, opposed range either a thought fiscal of you QX, you sort I guess now you it, of I you wider because XXXX or degree several could versus, about mean, before that later

Andy Mattes

sooner world don't you if bouncing about our increases the the see help announcement utilization. and achieve But the back see we to pre they than vaccine, that if will after drive drive know fab gross volume we anticipated, volume levels a yet. as yesterday higher we Brian, to that always world coverage [XX:XX:XX] will margins

let's progresses, at year are. update with stay you we we as point, where accordingly. And So will this the just

Brian Lee

[XX:XX:XX] Photosynthesize. Thanks.

Operator

Husaini [XX:XX:XX] My Please from S.A.G.. ahead. Medy from go is question next

Mehdi Hosseini

percent thanks year? backlog Yes, you did for see over taking And question, that [XX:XX:XX] my Andy. was up XX year Kevin,

Andy Mattes

QX XX versus That's XX. QX right. Correct, for Right, [XX:XX:XX] right. percent

I about backlog, Aleisha to that on customers wait book that context the is in were to can minimum and on later six of does put the You also come back mean mentioned cycle other that for additional time that system, side the months. the afford and if And system?

Kevin Palatnik

can [XX:XX:XX] means as back little March and in look to they fiscal at systems. differently can XXXX. Well, we still specific ship one. twenty come and always I and and a they revenue as fiscal could book late look This would

Mehdi Hosseini

Right. bookings a back quarterly [XX:XX:XX] Unfortunately, report don't you on basis.

Andy Mattes

be to is December We that early case will our [XX:XX:XX] point. put case. Yeah, going in backlog don't filed calibrate our and at

Mehdi Hosseini

prior in haven't heard But I you. then all a to couple addressing from and about in higher or participated about had thank of I I'm the regrouping haven't focusing come heard segmentation calls. we footprint the And sizing on the company. taking initiatives a and anything [XX:XX:XX] confused the company And for since up improving follow past bit have and expanding the the you're growth new a the with ups, resizing. the anything cost joining But God, little TAM.

to that reconcile help XXX gross volume with You I the mentioned expecting margin. should you How this to. the

Andy Mattes

things give our the you end being show of also told color keep take you we operational consolidation, if in things do will But site back, good the Many of especially portfolio, to transformation. enhanced you will we're you And the organization. opportunities. footprint got And all take transformation. go it I and up on organization. portfolio. through, commitments proper you and updated reduced, the customer if to you've these if includes that focus our our [XX:XX:XX] customers, elements go great They to very investment complexity you've at The that are focus, clearly in so the with lines, critical accretive our very processes look look a growth to complex to look I great these because alignment are all got have issues which why you've going as because two, of more said, QX, going that the efficiency people, four of the of streamlining product execution good are at the the work our margin at also our planning first to you at includes of they that is we're that our transformed these got you

Mehdi Hosseini

to Flight think operational way Is profile? fair look that Would margin say you skill [XX:XX:XX] right with to fight would you as the helpful. exit win and the help efficiencies you it have Very the behind both be XX, that you tailwind about. the revenues to into for with it and Great. also

Andy Mattes

[XX:XX:XX] product most restructuring going should in the The most XX. as and the in the streamlining We fiscal of do XX to absolutely do we. fiscal we're of

first in this dilutive market screen. we the where know, about markets the developed be portfolio it broad product, product and we've of every of one isn't on the to this organization. going especially fit are looking that portfolio. single the actually a have as every attractive you pretty contribution is our And the and tackling radar around And roadmap things them. think a We're so we're a products way. at where So complete broad Those to and margin

as some portfolio that You you have the of elements aren't have performing. well stars some and

we're into months with all going all going that through But benefits working on fiscal twenty for to to the us the work in whole be the XX next sustainable of this. of a So be year. should basis

Mehdi Hosseini

it seems to So the. me [XX:XX:XX]

keep to to You of may enjoy any also the. could hard so benefits Kevin all apply the he you try work that the chance

search? So any the CFO update on

Kevin Palatnik

been search, of CFO good very happy we're a of Any you on choice. give highly diverse individuals. to than qualified slate dozen interviewed one a them would an at I'm happy I more [XX:XX:XX] strong personally a update I looking the candidates. have

us good heart, to problem that have and Thanks answer we slate of later than candidates so expect give earnings our condensing an you perfect now would be and to the the of to good the for And much. no athlete the able call. us forward. the problem next down So heart going I

Operator

Sijia next question from from Securities. Larry Please comes Zouliou The [XX:XX:XX] go ahead.

Peter Lukas

it's Yes, [XX:XX:XX] Lucas Pete hi, for Larry.

a couple Any seeing thus Chinese change of in You government in quick old just subsidies and fabs me. investments XXXX? that lot, a covered ones of the you're far guys in cadence for

Kevin Palatnik

still that terms growing a into here, the in the go part CapEx no for of Kevin, Pete, Chinese funding of there, world will they're subsidies, fabs manufacturing. good the change that [XX:XX:XX]

So no change.

Peter Lukas

of touched just [XX:XX:XX] in of last cash. proceeds use it the Great, one the for and Andy, think in I helpful, me, you terms on

you or cash the I no payments and mentioned loan. term think on buybacks preservations no

of kind debt payments, and would about the think know, how forward about you use your and how you look to buybacks going you acquisitions cash cash? can Now, and talk priorities you for

Andy Mattes

very do own first without and how to time But that accelerates my you let's call, can we're R&D we our will the of our cash just be but mindful you the to this we going acquisitions definitely use of bias of then about our forward. that cash long in IP margin to saying about excluding want find because area saying opportunity with of to create more our [XX:XX:XX] cash acquisition position we resources, yet. would to, Like do we the that's pandemic to to over of our to going security and We're really not opportunities to every us have of first we're be portfolio be go exactly elements buybacks, And the use size share other if accretive not tuck very And cash. If invest declare do we portfolio. your term, not. We opportunity what acquisitions. a what focus. so, this company these how with optionality then stewards the on create talked you be expect a your where areas my to into attractive market. always can buy is our third, in We're not is you but give it's small

Peter Lukas

much. [XX:XX:XX] Extremely helpful, you thank very

Operator

go from ahead. Please [XX:XX:XX] Next Totaro Research. question is Longbow from Nick

Nick Todorov

European only XX how about related look and XX a your [XX:XX:XX] universities December Yeah, color Because weight? scientific much market helpful All guys The it's in to have percent Any talk there be research are of and of impact the culvert I of labs? Can if questions. thanks. things. baking at Is would right, you your sales. quarter? Europe, over you OEM you a couple maybe exactly

Andy Mattes

at going range. at what that's specifically our embedded take all the you to that [XX:XX:XX] And the can't week, I because down did week in changing Europe not this forecast is going point. I'm know, to We calibrated again, we're knew say. we But to say, dynamic we into time.

Nick Todorov

looking due of should in taking and I you term pressure that numbers Because end beginning doesn't now months. But think the June I'm of lead at June the spoke this it we there high typical on your language, have you of switch in as out And those been about some about, Yes, been a to just seen of in quarters. you going take systems that orders, XXXX. guys believe, has up year, been the additional guys implies push you since Ok, and system. the ramp to one seem have is on And orders? which be six [XX:XX:XX] there and it guidance side, times covid, near September probably year. have based in like

Kevin Palatnik

again, next and in orders, last said order June quarters plural. when I I'm the We [XX:XX:XX] than took calibrated We related to that's ship point. back systems really year, every December quarter. that to buildout. number first other said L-A quarter go you we do It took September we going we Again, to if singular know, Kevin, by that of the We back say this and in the at singular we But terms versus never multiple. of come that's all did shipments. our varies of

our You took build that and help customers XX. that know, last fiscal from call since we're multiple very orders multiple will we out pleased

Nick Todorov

higher terms little mix being one [XX:XX:XX] the instead mix anything thousand of different is there in are fifteen those of the orders, of any Ok, of bit seeing guys a you land and hundred? maybe

Andy Mattes

we of sort Chinese took back the the June one first going blind we thousand. [XX:XX:XX] predominantly XX, to You in know, back said in were

that. in So been there's change no

Nick Todorov

All in your Twenty year. XX I'm [XX:XX:XX] about until strong thinking correctly, implies, of going growth roughly comment, right, very if stay bookings, I here. think all that question, from end the little or next segments. essentially grow revenue talking one, flattish calendar it gross you're is the I the of the not your handle Yet Ok, margin OK. that guess to

range You revenue quarters? range do is that essentially the the to in projecting million for that orders XXX fact your how have that And going for all. multiple next we you're square low four

Kevin Palatnik

and at [XX:XX:XX] Just margin. the They got in look to look you've you tape. go at the when the puts gross and

in different. I if we're our could overnight, We have the that dilutes magically going every every product that commitments. you our ramp would make to But margin you have, look portfolio gross if streamline customer said disappear also product

have You a will perform get of work technology certifications to generation our still have cases, the or some have that enhance In next some for to products do in we position. there. cost you cases, some

the still swinging So and will with The end first product. our portfolio things of diluting come to the the how you half these just fiscal have. gross progress, margin in higher the about I on we and of you talked margin, very you business dramatically. positives we territory. that's positive to the volumes have example an on as Offset our a and models. difference, the give model fat gross And exciting know my works. up your up make in a of Those news goes diets. some how goes all remarks have business that are prepared Loading we fat And huge

and within and. takes story the So many puts stories many

will this the point and we QX to will low our it we to be. on put see from the we're in you update feel get just we Let's this that going way how progress you'll fast we where corner turn comfortable we'll to and said

Nick Todorov

[XX:XX:XX] Thanks.

Operator

the [XX:XX:XX] Miller The Benchmark Company. from comes from next Mark question

Mark Miller

margins question. to [XX:XX:XX] to margins. want Thank go back for improving just in I you the projections for again your

You an is drive breakdown could improved indicated volumes mix that it's going just but margins? the driven, the to see any any help be would I'm going there and what mix wondering improving effects to and mainly drive are going mix are to volume higher between also you that?

Kevin Palatnik

margin Mark, hey, overhead again, the call sure, twenty. in as as an fiscal for improved it's our know, volumes favor well will mix look we above into certainly you because better, all Kevin, Yeah, be [XX:XX:XX] absorption it to will contribute a

of help, top basically other also drive great will of of One in higher to products. you the portfolio issues to thinning some know, margin areas the good and reinvesting

minimum handle. All of that will for a contribute to

Mark Miller

a you as drilling, [XX:XX:XX] you be an sizes XG transition are of opportunity the new to certainly is Ok, laser. go smartphones as well, know, smaller in to going to have COX type to a we the said

Andy Mattes

We've [XX:XX:XX] wait, No, wait, generations. introduced those wait.

use is smaller footprint, thing as they can go drills. they important as longer the no to The mechanical

nice example infringes thing a where we're is market laser previously. this technologies actually were the that about take with So done classical other the is technologies of this on

to right the fulfill expands is our portfolio a And factory opportunity. and it have working demand. so And COX now customer around we clock ready laser the

Mark Miller

trend that year? mid believe you the non-GAAP the that that be high XXs. quarter the for to is from Is said just first [XX:XX:XX] I will Outbacks throughout or

Andy Mattes

a That's the year, [XX:XX:XX] good Mark. throughout trend

Mark Miller

you. you're so that be down. to thank Ok, bringing OK, [XX:XX:XX] going

Andy Mattes

[XX:XX:XX] Thank Mark. you,

Operator

conference [XX:XX:XX] the back There are and session. no Andy to I'd concludes more question queue. for to the closing our answer questions This any in Matus remarks. like over turn

Andy Mattes

good [XX:XX:XX] to thank presentation, Ok, on for us, you [XX:XX:XX] attending who trajectory. or posted now your we as today's you may exciting is now our afternoon I questions. got an Thank call. this concluded. and are keep ahead Thank and us want making you of we on you conference will The exciting with progress for you night. disconnect. to evening business you year an the say everybody and spent Thank all We've