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BHE Benchmark Electronics

Participants
Lisa Weeks Chief Strategy Officer & Head-Investor Relations
Jeff Benck Chief Executive Officer and President
Roop Lakkaraju Chief Financial Officer
Jaeson Schmidt Lake Street
Anja Soderstrom Sidoti
Tyler Bailey Needham
Call transcript
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Operator

Good day, and welcome to the Benchmark Electronics, Inc.

Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. to Officer, conference Head like Weeks, to now Strategy Chief of would turn over the Lisa I Investor Relations. ahead. go Please

Lisa Weeks

Thank for everyone second call. and today operator Benchmark's earnings quarter joining for XXXX you, us thanks

our reference website we me review that for X appendix of Roop CFO. of this issued presentation to well the a of and on non-GAAP an online and available following second the live, Joining at and the earnings release we take moment as highlighting to today, measures and market call. in statements in Lakkaraju, in on afternoon our the webcast quarter section Benck, After GAAP under are press the CEO forward-looking have this has www.bench.com. of The release our reconciliation presentation call President; being release closed The available earnings as the are replay a the be will slide the prepared is we a Jeff a Please Relations financial advice Investor will call. XXXX company performance the presentation. and presentation. This online provided

discuss Actual differ of to And impact from statements. forward-looking not forward-looking we materially obligation a filings. may forward-looking these notably reminder, results involve undertakes as and COVID-XX the risks any which statements of During ongoing SEC pandemic, call, of from any most our the press and releases update historical our described as no today's statements, in Benchmark will are that are remarks information. statements facts and uncertainties,

call the second our with outlook the wrap-up market we before and strategic by for conclude wins. new a and quarter begin including detailed initiatives on Roop outlook will sheet by a quarter XXXX Jeff guidance. our with will and call, today's sector, year second covering including a progress Jeff discuss update will program summary, an summary Q&A. our third balance results cash second then results For half quarter of

to turn X, CEO, the Jeff over If call to slide turn will I you please will our now Benck.

Jeff Benck

Lisa. the increase us we time, today. Thanks, surrounding which made months, for afternoon, Throughout decisions in make the but pandemic uncertainty we've served to you starting the investments meeting XX had and customers. has through and we thank focus rallied during in a the we strategy new prioritizing to lost to and our as Good fruit. approach past are of unprecedented growing operating our believe on difficult this bear our the opportunities, We've joining of environment. volatile never trade-offs This our progressed employees needs well-being safety well us and everyone

second of seen Revenues revenues of As sector. year-over-year. the cap and our the press in broadband market semi you as the from solutions the benefited may from quarter $XXX guidance release have XX% for as afternoon, from million deploying Telco were customers infrastructure midpoint our stronger continued demand up were the above this in well momentum

more approximately that specific are on of and are the we quarter, are customer ability planning on that demand our table second the million extended in tight this of and constrained estimate of heavy on Roop rolled is future manufacturing demand the but provide quarters. supply times, workload allocations $XX disruptions color significant of markets. recovery demand. meet we the based subsectors Additionally, continued teams industrial signs will the a most lead early left and In situation, component limiting volatility in some seeing to of into the facing we

the in strength $XXX customer quarter, of demonstrating million Given this demand component we orders. we -- leave estimate end constraints of may unfulfilled

customers component availability. We our based output optimize continue with to to work on closely

these making where quarter. pandemic our in challenges, quarter, ongoing through workforce and COVID to to healthy and targets our intermittent all precision recently second on-site Government similar the and employees staffing Thankfully, patterns our and now host to a required demand first reduced operations we the of shift keep event also managing our EMS levels of our team. for faced XX% shot disruptions our stoppages production. Even for to our machining eased and for reduced During continues and employees team report maximize the suppliers we and a customer restrictions their allowing operations vaccine replan to do of government Malaysian event regulations achieved I'm the the job XX% most phenomenal held leadership delivered allowing nearly teams capacity proud staffing quarter. and work an their some with on our workforce our team receive through vaccination to in to are their Penang have from plans

to profits. revenue, basis XX Now operating X.X%. XX improved X.X% margins points non-GAAP turning non-GAAP gross to points margins improved With improving our and basis to

expenses, As cash guidance include were approximately had days. XX at in another compensation of results the per conversion operating we quarter. the above cycle and quarter margins points of which a midpoint basis non-GAAP solid our our stock was second share reminder, Earnings XX $X.XX of

scale XXXX. continues team to to will continue slide of demonstrate and rest through We Please the in of believe first strategy and Our deliver year the turn our together, our half pull on excellence through this with execute model. benefits X. growth the the of momentum

addition revenue environment the of strong new where we opportunity and another In deal quarter bookings to growth, strong. outsourcing year-over-year sequential remains and strong had

and monitoring, diagnostics. highlight for to quarter. In blood wins manufacturing Now like the transfusion I'd the in were we vitro few key in sector, programs medical new an a cardiac awarded

customers, supported resonates demand new our standards. and to proposition record FDA devices customers building power for by rack sector equipment. cell quality track Semi-Cap, of were a in be this our by projects to customer is additive we value Class existing handlers In to will new for process III new already this and we where life-sustaining are With design we in and our electronics. QX, programs, controllers sector. continue work strong we Semi-Cap XX-year portfolio added awarded In which with building coding winning Our manufacturing win

across And great sector, in computing manufacturing. wins electronic be as our which will design precision engineering were semi high-performance manufacturing. defense expertise a ruggedized contributor next are factor, a cap over and electronics form had industrials, customer we Computing unparalleled provide for battery solar win growth In the very in manufacturing computing to new industrial growth combat warfare we well services for finally, as manufacture we months. key programs Telco, quarter for solutions, our and win program we have about & to This manufacturing sector. electronics we continue excited to awarded satellites A&D large vehicles. new In a land-based machining, for new to could where storage programs High-performance the high-density electronics meaningful XX major

Roop and bookings Our very over and discuss our midterm to the of attach I'll in. the services prospective support increased With second in fuel financial expect the all, development results. we Roop wins to are growth new excited are the meaningful engineering business turn longer-term model business rate these opportunities about all across and that, growth of plans. pipeline over that sectors call we of I'm the winning, remains to strong our teams in All level now new our quarter engaging you. to of

Roop Lakkaraju

in second market turn slide the performance Medical Total Industrials driven Telco. sector. improving at for the which million of Please revenues strong end afternoon. X our guidance, revenue continued good by and quarter our was revenue Jeff, by Semi-Cap and sequentially to and as for $XXX Benchmark revenue relatively was flat QX higher you, in expected. in were Thank

and the our higher fab for be front-end first demand program as of improving second top Medical where compared We demand from year-over-year up each XXXX, the of wafer Semi-cap we XX% saw and in revenues XX% continued demand. strength XXXX, to our new to expect second customers. half from to of revenues quarter the were equipment half due increased customers, up from ramps

in and continued sequentially is shortages. strong the our impacted the electromechanical secure large precision revenues global X% revenue Defense from quarter computing military programs satellite communications in and this A&D which for increased Our surveillance and and component less X% programs. sector demand second primarily vehicles, for year-over-year from are assembly, machining

second program revenue sectors infrastructure that ramp and the of our from expected higher-value and quarter from Industrial revenue. was new markets to commercial flat computing building improvements markets the to telco Overall, programs. our from was in but the XX% quarter-over-quarter. were traditional represented We strong half Revenues telco slightly saw construction computing expected commercial from were commercial better in flat and was programs slight sequentially. than high-performance Our second revenues XXXX. a second satellites, for pushed QX, aerospace in and quarter commercial of demand existing broadband

represented markets quarter traditional second XX% of revenues. Our

sales in of X. XX% XX Please top to second customers slide turn Our represented the quarter.

the per Our $X.XX. GAAP for earnings share was quarter,

QX, and restructuring completed the $X.X other planned. included million, costs activities. related results as of onetime to In totaling we GAAP site our Texas Our Angleton closure restructuring

QX, of variable than were we better margin X.X%. driven and non-GAAP XX by productivity a higher result up revenues quarter mix. compensation as of and is sequential basis, higher basis expenses the This On a by XX a points our our expected offset medical higher points guidance, costs. and higher basis US than For was somewhat gross our second midpoint better utilization revenue, improved

$X.XX In slide and guidance US quarter, sequential review of and ROIC medical higher $X.XX variable higher $XX XXX basis operating to costs. $X.X QX result a EPS jurisdictions. of improvement. US improvement due between increase X was Please was year-over-year. the an profits point $X.XX to of non-GAAP as and the turn X.X%. Our basis is Non-GAAP SG&A rate sequentially tax Non-GAAP increase XXXX, mix was point and to the cash a midpoint QX cycle. foreign effective our was X.X% XXX our which our conversion for of was margin million, sequentially than Non-GAAP expenses million compensation higher XX.X% the

cash were in improvement of QX. one the XX cycle an from day Our second quarter, conversion days

on the $XXX Turning liquidity US. was to update $XXX an cash million with in and XX available June slide balance at X capital resources. million for The

result future and level is after current The million million use from manage a constraints growth revenue in balances million of increasing and operations times the to higher cash cash We decreased flow capital expenditures. of $XX cash a our Our to marketplace. cash lead inventory broad sequentially. primarily free support $X $X of the components and in of procuring better decrease cash chain in supply flow for was generated QX, the in

$XXX outstanding we borrowings As of million June term outstanding with loan our revolver. had on on available our no XX,

dividends XX million shares. capital slide to XXX,XXX cash $X.X allocation and of repurchase to QX, In Turning million paid we to activity. review used our $XX

review a remaining approximately Please quarter June existing in shares expect XX to we QX, we of In opportunistically guidance. turn third our of authorization. market our had As to $XXX slide repurchase XX, for conditions. repurchase considering million share while XXXX

We midpoint improvement. to to $XXX range million from expect at million, revenue X% which year-over-year $XXX a the represents

SG&A We expected improved that X% our for revenues gross and $XX million. gross $XX expect margins X.X% and be margins will million between range The absorption. to is sequential will higher increase in to due and QX

margins be impact guidance full the X.X% We costs. estimated non-GAAP year and margin the X.X% gross The a are intangible restructuring and provided for still for to of to purposes. in other is modeling Implied exclude our of range amortization assets targeting X%. guidance does operating

expect $XXX,XXX nonrecurring million. other QX We incur and $X.X of costs to restructuring to in approximately

non-GAAP diluted the $X.XX. is $X.XX or be to share, of expected $X.XX of a in midpoint to Our per earnings range

$XX for million. year between our and million expect the CapEx We to plans be $XX

will of the year XXXX. to our generate We expected growth contemplates $X.X expense from is we through expect million to outstanding year. our levels for higher the interest net expenses fiscal operations be million inventory primarily range -- for customers estimate we support flow million, debt. This $XX to is Other approximately which related cash to that $XXX

distribution We $XX.X rate because effective network. XX% will our our weighted global for between shares XX% expect the QX around of income and non-GAAP million. for The are expected QX that be tax of approximately average

supply. Before comment our component to I on Jeff, turn the call over I perspective to on wanted back

As demand continues market strong. aware, be you're to end

to categories. on Overall, allocation supply However, Several to being yet times component remain placed commodities across by most constrained. continue see commodity extend lead the semiconductors are and we constraints suppliers. more are components impacted chain all continue

suppliers and and We disruptions are of demand existing increases. to support secure customer in supply orders alignment with our minimize maintaining to distributors to close

quarter In due working replan actively to component fulfill to to still confidence back to the our revenue base, assumes general, I'll our mix redesign known challenging to demand we in give and products And us grow summary, alternate consideration to that or further takes changes customers. our in call also to enable constraints with constraints, you the upside supply single-digits. no We but In COVID. operations to interruptions material these Guidance over we ability end believe in high market guidance our do will due sourcing. some assumes XXXX all is into for that, actions and conditions the no are significant turn Jeff. with component operations customers

Jeff Benck

Thanks for that Roop. update

comments sector the XXXX. our our third and on for wanted guidance, additional provide by details Following on Roop's shown some of I on XX. demand remainder slide view This of quarter to is the quarter

This expect sub-tier the we are customers For on expect secure strength we growth in continued we expectations mechanical vehicles suppliers. strength high and After electronics of remain in be sector A&D, grew signals growth to led we the balance In our third ruggedized demand in clearly this outlook levels in for increasing sequential growth are devices. ground-based semi to second will from revenue wafer year. outperforming semiconductor is up levels XXXX we demand XX% from levels. our sector this X% $XX cap. expected fab where we near computing QX processing about This demand Semi-Cap will year by QX, our from increased for our through ongoing for With XX% than demand front-end A&D in revising by space, QX, demand XXXX by expect and led in revenue quarter, growth XX% by strong for the upward and revenue capital and at as sequentially with our million. sector Based in over demand but remain military for greater communication robust, signals quarter supported continued by for equipment. term this constrained customers, next the remains at year-over-year still is

half revenue growth flat there high-performance quarter. XXXX. of the up in strength expect is While component second or remain the A&D we sector year. In second not the revenue are sequentially design from for still the third for as XXXX we computing full could half sector, in XXXX the growth the strong expect commercial offset over weakness aero projects delays, demand in to defense be does stabilizing, aero computing largest XX% with the in no further decommits If computing

strength XXXX. in in projects revenue the medical to expect continue high-performance QX. we this new win sector, As to and computing in revenues in targeted expecting sequentially QX we sub-sector, In continued we're grow

across For our base our growth portfolio we second in see half. business the revenue

the telco as transportation contributing medical we the oil infrastructure and products. communication supporting have customers, Additionally, half new second a program we ramps second have qualifications. Systems. the of increasing performance year, In second being this growth a book which will half year. in number program to to to our growth. stable greater expect In tremendous the growth gas to where in sector year a but had solid for We ramps we market this industrials, and the and XXXX, subject revenue in quarter, With new this achieve broadband pleased timing Building program to demand in lead of good strong potential product of expect the are order forecasted has in second medical growth new always from QX to the is XX% than for still XXXX improvement demand see growth the we half market,

a constrained remains challenges, the to we objectives. few focused a with We environment. Growing you'll Benchmark. highlights wanted pandemic against even our on longer-term strategic slide deal If progress XX, at and these and created supply revenue on priority to top remain strategic turn by I initiatives short-term this provide our as

our programs. wins where our great track a the on technology job in executing complex advantaged Our sub-sectors have go-to-market targeted team doing record success development of with strategies we position sector based an is our and with

Our in growth. engineering and services to booking invest our We'll levels both for sustainable remain continue sustainable and manufacturing a strong. for talent infrastructure

our we mode and our intended data which which stand-alone collection reporting year. next transparency publish against in plan our global to support sustainability further support increase the will We are to initiative, reporting, report

by and This ongoing as actions commitment the recruiting strategies includes and a to our increased senior multi-year held efforts the diversity by policies roadmap plans training, some enhanced organization accountability also improvement continuous roadmap, entire developing by inclusion supported team. internal and as are for expanding with robust We Board diversification. our leadership well

You may our our seen left one Merilee have recent Board of announcement where Raines, board. members our

appreciated certainly have We well. wish service and her her

Lynn board two position. experience directors. Wentworth of additional provide insight open share welcome and outstanding to she slate Lynn Merilee's capabilities and are director will execution and seat. one to operational talented of holds currently Board, an filling sits our companies vast audit chairs, We three proud our on Her public and is history where to already

Lastly, sequential our of we're the midpoint we greater expected on are expecting laser-focused second growth earnings From revenue by our results results These continued to our quarter QX earnings. a guide, enabled, are trajectory. growing XX% than improvement.

target at our full to, first slide progress for I'm and the remain control our summary, expenses. about our second the about year XX, commitment half and sustain In outlook. X% half excited gross optimistic Our to margins, on in our very

Given computing, half Semi-Cap, demand our industrials, in in XXXX. digits full demand and for outlook expected growth improving high-single outlook we year second are continuing to the high-performance ramps revising in strong

With quarterly in improvement margins and component assumes course, Of expecting this in supply XQ. constraints growth we're impacts. no this three operating and gross broader both, mix, both worsening or revenue pandemic and sequential

for still full line, we achieve margin XXXX. are gross targeting the the X% year On to

earnings our the my about that purchase our the about seeing continue and our teams are million. our And and positive last we hardworking conduct million is between closing, plan. may XXXX to operator, we Question-and-Answer at stock as providing the million forward over of a dividend excited look $XX an in from repurchased I as heartfelt to Session express indicators that, how will to including Through stock, overwhelming half XXXX, to still capital flows October suppliers, results, call. quarter our customers. team, Q&A. we these $XXX of With cash we and Operator? are very our to I $XX In up. the for level. I of update expecting first part thanks our to well our support shaping high allocation ongoing raised call opportunistically excited I'm the quarterly with you turn And as which remain recurring want operating their continue

Operator

now will session. [Operator comes with We ahead. The Lake the question-and-answer Jaeson Schmidt begin Instructions] go question first Street. from Please

Jaeson Schmidt

Hey, for being these of a in projects I taking out this want just $XXX quarter get Thanks comments to been guys. demand just potentially to trying I'm eventually clarify quarters? questions. simply million the to table. on this my Or being left revenue on lost? not to due will have to that in ship? able you Is the sense flow designs guys and the your

Jeff Benck

given great This extending. in a we've recovery starting is question, And lead you within Jaeson. the that -- taken component-constrained demand lead in that It's That's time. that's the environment frankly it as Yeah. a away. some clarifying from sectors and going of upside demand It's is is not are of know times the really lot many of --

clear-to-builds able to So to close it's difficult revenue. get the to be on

of well beginning We're table. unfulfilled And it fourth some XXXX. that on quarter left the it, quarter demand into rollover and because would from will would that roll we some I as the some pleased from say last of the majority of in probably the come assessing

part in we lost could some be quarter. the for revenue -- most third intend are but portion there that the Some capture to perishable, that

Jaeson Schmidt

and tightness Okay. for there need pressures. the general That's spot out given buys really inflationary just and helpful. And just

costs them those standpoint? if curious, you're Just are passing seeing from that And seeing you along? if what you're higher

Jeff Benck

Yeah. given price dealing of the some of gone the components Everyone expediting tightness have supply. is with cost up in

precious trying we're down definitely to same So seeing to hand-to-hand time at We're costs supply. get it. combat in the trying keep

a nature really customers it's contracts we the of that about not question. our bit given cases, in sure time, the you could to a we having. relationship there they to customers the is us certainly work out we're Wish the we're Everyone talking No structured. those was are on with decisions. imagine, difficult discussions asking frustrated. those too soon more making many and we also it's just help work the are close customers forecast But can our XXXX But same to to and As way have are And make do. their time. and with at

Jaeson Schmidt

me, I'm queue. comprised for is Okay. of And willing back jump then computing what more the computing. under you be value of high-performance it to to if traditional how computing just a could guys be Curious, -- in just that markets would share the you high-performance the kind guys consider rather trying and is much of really segment last one I'll really sense, get the like or than markets? seems that higher

Jeff Benck

had that We've debate. Yeah.

side, would the traditional Some segments our of Certainly, average on we've a million, say. there, supporting anything? a I segment multiple margins value. do HPC, than because Compute segment. that, below take margin. directionally higher higher-value overall meaningful. pretty just and our we'll classify that right? high-performance to out they number competitors we're it's add see Roop, got the customers don't as high in know for higher it corporate Telco is we you big $XX but that as Compute Compute and So it's business It's at all although It's in break not The from want I

Roop Lakkaraju

if add be Jeff's Jaeson you HPC, as So comment Yeah, well, it bit remember maybe I'll just a project-based there. it's On right? somewhat lumpy. to can

the percentage quarter. into as of what the of it represents we -- indicated vary half. We had we push the saw a demand computing out And second can of so by

bit and a as well. in be that QX of mix the stronger see to expect we'll So QX

Jaeson Schmidt

color. the guys. Appreciate Thanks, Okay.

Jeff Benck

worries. No Yes.

Operator

question Please The Anja from Sidoti. [Operator Soderstrom Instructions] comes with ahead. next go

Anja Soderstrom

question. Congratulations the a you despite on good taking thank and environment. quarter for Sorry my

more you pushed taking have then XXXX with the I and XXXX. lead that? digit a out? XXXX, on into so So growth with closely working foresee stronger talking than about are we it about now You you're XXXX XXXX? talk think for a customers How stuff? up early being to high better should bit projects you your single And that actually be little too is Do Or to assume visibility about times bit.

Jeff Benck

-- is Jeff. this We I'll Yes. start.

mean, the higher of now we momentum ball the with growth good I out and call year. momentum terms think the we will right have see next a of to year. mid-term comfortable in and to bit We about business early XXXX. revenue visibility carry XXXX. second in we put feel great the this through It's it's we model felt half good the some certainly But that into out really through that looked for

like. I color come think further as give year a on the more us back see looks get you you'll we what that little and into

be going could isn't constrained environment, looks there our through visibility Is anything And that to now. what right some continues factor are rolls looks fulfill be also strength into there of we that be still perishable along that half we we're if Semi-Cap's saying it XXXX like this the that demand not then from to get with little at a And year? able that and on. Right dealing of that tough. We the the which what going like. of may further go now, XXXX. least that looks it into to and think through is end -- in profile love things first year, We'd to have could next tremendous see, through

But to growth feel too I the early the bit we little would where call really a are about we rate say, for against So good XXXX directionally, model. yet.

Anja Soderstrom

this. there I elective surgery later bit sorry I'm jumped of And on in you. related Medical, ramping addressed procedures call Thank in terms of a what the productions? do But have you might Okay. you see little

Jeff Benck

Yes.

seeing did that a recovery little it little later a quicker. other bit So of than surgeries, would come segments but the we I some maybe say bit back are elective there bounce

a later more there so And constraint -- in kind demand back of yet. you that we in weren't because first little totally supply even quarter really in came the calling seeing probably we're

crunch. a of in now, time kind we're So lead

number we're of got a that programs new we've about. So ramping excited

Anja Soderstrom

customers? color give you terms new you Thank logos contract with us are wins then .And on, Okay. those existing just in some new expansion can with whether or of

Jeff Benck

logos. to It's logos a that deeper mix great want existing for And at we from down with were half have we say, deals it that about new but of new the question. repeat We both. with. a About solution, quarter. the time super we and same we we're kind the storage of We've go set are new initiatives was we meaningful of that I going the going would That's a brand A&D But also customers talked about. power Storage. that industrial to be of half excited and are customer we're some are we of customers a had highlighted are Semi-Cap Solar us. got customers saw new that great deeper the customers road some that every want kind healthy

healthy kind sectors that highlighted quarter. across as go this of we you a mix it's So, the

Anja Soderstrom

due because pressure on little putting margin of also you. you're Okay. you're revenue Thank margins. gross increasing that maintaining target? guidance the And given the chain that's but bit to of for supply constraints this just a the year the sort Is

Jeff Benck

apologize. we Anja

You just time? Would bit question up of there. mind you a broke kind one little asking more your

Anja Soderstrom

Yes.

the but your due revenue chain up taking supply that you're margin this on guidance bit a So gross the pressure some are the you're for constraints that to year, margin? target. putting maintaining gross Is

Jeff Benck

Yes.

see So growth know the executing forecasted we combination we'll to computing right? things the dependent. are that one comments and programs in And we sector is that expect high-performance mix third some we fourth with have in really computing that in our be a it's or the As of quarter. sector the you high-performance computing

a little traditional less tend to little of bit averages. will be be markets So margins the our the a mix and heavier corporate than those

that's when it. think the affecting about So you mix

higher-value of the is like the The point just constrained some that market affecting some Jeff's of now Medical to growth other in of delaying side markets the is and -- in ramp there.

then So of markets the the higher we to and market. the demand third of -- some the in the that that we're both quarter. And on not able mix of because the it's that's to kind fourth revenue expect higher-value fulfill computing see of constrained

Anja Soderstrom

then Okay. Thank much last your question. of And Malaysia from one you. approximately? How derived revenues

Jeff Benck

-- of our How that is Right question. catch from didn't much the I revenue...? end

Anja Soderstrom

not I'm sure Yes your your revenue Malaysia. originated is...? is of How from business much

Jeff Benck

disclosed overall. not precision It's got Yes. EMS we've Malaysia? and remember publicly machining. something And we've both

team our our challenging we've maybe COVID about do I temporary but got and and to to also has our Malaysia a They got has footprint a of Malaysia. we've due think like. risk. just the saw But proxy you the in about disruptions over a restrictions exact there. been we And as call shutdowns isn't which -- job If had XX% where out. done phenomenal footprint

think I some and risk because the a time in group and saw phenomenal feverishly with working to of deliver be and it. quarter teams our stagger peer -- disruptions, preannounced to done highlighted carefully some job analysts our the work able customers. for the of the They've of over

too. that up So in through a not that. and watch for closely in continue get rest Malaysia encouraging know along. us. and of vaccination while working bit really and did team seeing with as events silvering rates great Thailand we're COVID job Americas the But the to But a And spike be trying QX. key to our I little both is world a is far teams

Anja Soderstrom

you. Thank That helpful was

Jeff Benck

Thank you, Anja.

Operator

next comes Please Ricchiuti question with Needham. The ahead. from James go

Tyler Bailey

This is Jim. everyone. for it going? Hey Bailey in How’s filling Tyler

Jeff Benck

you? are Tyler. Hi Tyler, Thanks how

Tyler Bailey

despite some it's come companies to guys quarter. I you headwinds the out on out came facing. on but obviously all great you are demand, some scale. -- missed And see like strong out really rare guys a on are It seems Congrats guess

the market of what kind of of than based just guys to you're pretty I seen but chance what out. about what talked I'm year, in guidance But kind strong verticals past? you're QX a of a demand looking one -- seeing the and we've rest pushed one just and that just being question. guys' sort a and we've the the in for in what Is bit yes, wondering So comes maybe forecasting QX, mean your this slowdown about so Semi-Cap bit some there historically just seeing a what in it -- on of given little of looks at, I'm stronger QX the you you're QX. especially thinking relative seen Medical. and

Jeff Benck

think kind QX able to high to growth for we're anticipate to sequentially We think not always seen something that which the to that shifting we're certainly, saying was I I QX grow we would point. going Well directionally is from single-digit your of being see we've year.

constraints the temporary Malaysia But half So computing us helps were of We suppliers with And talked half. sub-tier certainly, move and did high-performance house. disruptions I are half from in the we that in strength projects, do about back some that second Semi-Cap. the sector in and think the got some to we've some some limiting Compute our that the first there us. of have not as own

help So, and as the that we of in that some to fourth quarter clear should look well.

So, we've quarter. got into momentum pretty the fourth good going

think So, thinking we'll see off. how don't it directionally, plays I But out. is your

Tyler Bailey

are about these ramps some some but this that. And one or Appreciate Are little because out apprehensiveness Okay. they worst a know the there pushing from seemingly XXXX know you delta of customers? maybe lot of have talked guess is because you just hopefully I I into navigated spikes, of it. with hesitancy I bit But spikes? there guess I too, thing

Jeff Benck

the is as No, get what potentially they table sooner. table. we I in product I what mean the customers on projecting, and quickly left have on customers that wouldn't get obviously, -- with would and strong are could the the possible. Customers like say demand we it QX as can we if to And

like So spikes time. point anything this result as we're in pushouts at or COVID of some not a that seeing of

Jeff Benck

and done constraints. they component And got even that little maybe excited engineering trying it bit, If trying put The our and is our to And a people to if immaterial. projects wanting I engage by component constraints more engineering with teams. think, people visit are think, got to new facilities I you've Customers development you're going are not to in off samples projects, on and challenged but prototypes get things anything build. we get are

because So, going certainly they're I seen project wait but that's push -- making and one point. they're COVID tough, worried about have it to at there's not this

Tyler Bailey

question. That's insight And then last Okay. one I and that. helpful appreciate

the win wondering, there about you potential across world. solar And little I mentioned bit really growing You could a if the believe. segment obviously, that and because talk just storage

lot a you and you a for just sun the see in could to emphasis, that You guys. of just the talk kind speak potential wonder, little the US, runs. if But bit

Jeff Benck

Like any new take -- could typically from it years two booking take can just to for us then ramp it right, X.X revenue years, get into and there.

space. in excited of the the with here one about market are participating We that's leaders

for more all in -- a able an US. brownouts the storms I across right to have more to exciting and leveraged People time this it's be space. are long storms the is the an in common. generators alternative Power and with certainly think and increase

be So able store and back and the to be efficient. day have be to able and energy up more run feel and during that energy

I think exciting an market. is

So, into a it We're the not it's we're market kind what say going said really we'll customer -- it as I being I a a see goes because optimistic, really of probably could there. meaningful -- leader get to but from and of where it early be. to in see bit but new and think 'XX it we're contributor,

Tyler Bailey

Okay. That's from quarter. helpful. me. on the That’s it. great Appreciate and again, Thanks congrats it

Jeff Benck

Appreciate Tyler. Thanks, it.

Operator

Weeks question-and-answer over like turn to for to our remarks. closing concludes would conference back This the any I Lisa session.

Lisa Weeks

again you, today. our for Thank joining call

Please August we all and engaging quarter reminder the regarding happy reach in will supporting to the these look our put X, Conference great If release, on you. speaking you hesitate afternoon forward wanted events. the have be August Technology any with Conference be Internet follow-up on and Thank Industrial with we October. please September up. XX, to I'll you Lake and of Communications follow to Conference and forward at I results earnings out Ideas a you look Benchmark third our Tech Oppenheimer on that have to questions call Needham Best Street and don't in on Growth XX a to

Operator

presentation. you for The now attending Thank today's conference has concluded.

You may now disconnect.