Earnings call transcript Q4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Yujia Zhai

Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's Conference Call to discuss Fiscal 2023 Fourth Quarter and Fiscal Year-End Financial Results. I am Yujia Zhai, Investor Relations representative for AOS.

With me today are Stephen Chang, our CEO; and Yifan Liang, our CFO. This call is being recorded and broadcast live over the Web. A replay will be available for seven days following the call via the link in the Investor Relations section of our Web site.

as proceed will call follows today. Our begin report. will business updates, segment detailed a by followed Stephen Yifan review that, the After will September guidance and quarter. for provide the financial results

Q&A Finally, have session. we the will

market the The release August after is Web the was posted over site. close. earnings wire release The distributed X, today, XXXX, on company's also the

by Our use information we considered because provide measures useful in non-GAAP about earnings should the and operating investors believe of presentation that release. measures in to non-GAAP include the A this release the with measures earnings financial comparable We performance our GAAP GAAP measures. conjunction reconciliation included non-GAAP they is be measures. these

business are risks and call, current will this actual We remind involve forward-looking during based expectations you differ projections. and could that expectations. make we results that from These forward-looking and to on outlook materially financial of management's statements statements, our cause conference the uncertainties certain including discussions such

detailed the risks with the more of call. filings assume obligations no a these We provided subsequent please update in to and refer our today's and SEC. description For information to recent uncertainties,

Now, CEO, Stephen to I over our turn Stephen? will Chang. the call

Stephen Chang

afternoon, high-level will and everyone. and today with begin a Thank Yujia, jump into you, overview good results our details. of I then segment

well executed quarter. an team and Our excellent delivered

our end across applications and These solid non-GAAP Revenue in above line. and XX.X%, QX fiscal bottom were Non-GAAP of was $X.XX. high-end the our and was $XXX.X guidance, notebook revenue a and up diversified guidance, driven XX.X% markets. desktop margin solid Industrial product year-over-year, base Our recovery was and resulted Supply sequentially. portfolio margin and gross gross customer above Power our the million, of and computing results XX.X% strength which of in was by EPS down mid-point was

then we to go continued that with in possible. our swift into Recall from confident see results it calendar happy QX resilient our as We quickly QX balance our due we our as would as line into season. out call, that inventory efforts a expectations. prior I'm we and fundamentals, in playing quarter back report our customer recovery peak were bring is recovery reflected in to said QX our to levels

for quarter, end to optimistic further anticipate in we of and back-to-school. that consumer market, September the has We As soft; us. driven this our broader smartphone fall however, continues worst is be seasonally launches by demand our quarter, the strongest behind are been which cycle phase recovery

environment Tier set broader cautious, product that better remain to we partnerships, total market industrial well consumer, our we of share, leading much commercial markets thanks as end While more and we diversified as than to the current portfolio serving across applications. a solutions the navigate serve, broader robust expect X customer market a

collaboration our focus season operations, the of peak terms service close In maintaining is best our our to provide customers on up with possible. while gearing near-term our customer for

partner prioritizing As commitment we upholding of by as reliable favored our consistently become we highly products relationships, and supplier, remain and our see a reputation long-term competitive, our to ensuring customer customers. a excellence repeatedly,

achieving effect in As us customers X cornerstone our our served all This more result, our marketing end a of across and has goals. propels share. our It that expand Tier us helped they positive long-term with markets, approach entrust us creates has as growth. which a flywheel a turn, towards

up XX.X% year-over-year the the desktop some March at cover customers. correction quarter. of total and represented down but segment our in our results driven computing drew shipments sharp revenue. which across by let next provide June key and quarter for revenue sequentially applications guidance solid and was results These that, following quarter, a inventories in were recovery by notebook XX.X% me the down with now XX.X% Computing, With Starting segment

into forward growth seasonally see in which quarter, high the encouraging further expect September, teens. our sequential continue strongest recovery we is and to Looking

up down revenue Consumer the quarter year-over-year XX.X% to revenue. and June X.X% sequentially XX.X% segment, Turning was of and total represented

by was product diversified portfolio. wearable reflect applications. Gaming, and shipments growth into strong year-over-year These results driven this E-Scooter Our in segment our

we Over the and us our targeting strategically traditional focused these consumer our and as competitive our last with voltage on couple These such applications, highly in customers this initiatives segment broadened areas more our diversify of enhanced leading helped TVs. years, consumer low-to-medium streams products. performance revenue

this manufacturer. anticipate number as an the a console after begins do Gaming one the inventory strong shipments September For XX% extremely XX in correction into an segment quarter, of we pull-back months

declined revenue segment, Communications to the represented and revenue. attributable revenue quarter primarily total the inventory XG was of and discuss declined smartphones in in June in year-over-year infrastructure. The telecom the let's XX.X% and correction Next, XX.X% XX.X% sequentially, drop

the XX% and fall on revenue particularly our in launch in partners, solid conversations In this the the seasonally with based is quarter, with in customers are customer and we is driven over correction by to share smartphone believe abate, sequentially in Fortunately, we expecting second-half tiers, XXXX inventory of further in U.S. starting a our recovery quarter, channel smartphones and September we a gains our which the recovery anticipate them. strongest segment. premium

was quick which accounted sequentially. revenue and talk customer increasing in expectations, June of OEMs. and XX.X% than by revenue. Power driven let's used our high-end smartphone demand XX% high China's voltage by Tier prior and chargers about were our X last for Now, smartphone Supply results segment, better MOSFETs performance medium our strong year-over-year for total These U.S. XX.X% quarter Industrial,

Power Tools. In addition, other saw applications we demand Solar from stronger as such and

this expect low-single-digits up to For sequentially. the September be continue we be and segment to solid quarter,

and of worst we to quarter, as forward the has passed we the and half last look inventory PCs of Smartphones we solid stated believe correction a second closing, in In XXXX.

our product chain. all leading remain been never customer Tier diversified expanding cautious While more segments, driven manufacturing by and supply capability stronger, our we X our visibility, base have beyond fundamentals technology, our portfolio, near-term in business

stronger emerge this are we side we confident company even of such, the As cycle. as other an will on

call outlook quarter. next now the Yifan fourth results will and I of turn fiscal fiscal a the for and financial quarter for over year-end our to that, With discussion our

Yifan Liang

thank Stephen. you, everyone, year-over-year. for joining was XX.X% $XXX.X XX.X% down Good quarter and million, you us. up Thank the Revenue sequentially afternoon but for

In XX.X% product Power mix, and quarter was from year over last million, DMOS terms but a up $XX.X revenue sequentially the revenue was XX.X% year. from prior up down IC of million, XX.X% $XX.X X.X% ago.

and last prior in quarter. last was service the Assembly $X.X License quarter $X.X compared $X.X quarter million, same revenue revenue for million the was for to engineering the $X.X as and service year. million million million versus quarter $X.X

to year in non-GAAP gross and quarter-over-quarter XX.X% was engineering increase compared was mix ago. quarter's variable for The revenue. gross the million mainly year. $XX.X XX.X%, prior reversal Non-GAAP margin a higher and to compared The operating in quarter expenses by engineering and were last prior expenses quarter-over-quarter increase true-up was and Non-GAAP $XX.X margin the R&D $XX.X in higher million quarter and compensation to driven service license last primarily million, the due XX.X% accruals. improvement

$XXX.X and compared and was to million EPS received. $X.XX, last the expense non-GAAP for $X.XX versus in $X.X $XX resulted negative credit in tax revenue as $X.X quarter-over-quarter fee XXXX ago. year. million correction. year million due to non-GAAP tax $X.XX $X.X we EPS fiscal R&D with the industry-wide Non-GAAP a of and the compared mainly year the financial quarter quarter Revenue fiscal of $XXX.X for higher and prior The quarter prior million million million last from ended $X.XX, related to Non-GAAP withholding actual was last The performance of to was EPS decrease paid $X.XX decrease was the June license inventory quarterly year. was XX, largely

Moving that positive secure negative which quarter the fluctuation wafer flow, By we $XX.X operating million a of made cash $XX.X to prior and cash $XX.X SiC flow on supply, operating million flow and ago. deposit cash repayment to working in was million of reflected million an deposits, $XX.X year in was customer capital. million, comparison, $X.X

We same expect flow and $XX.X the EBITDAS was a cash to the positive to $X.X million see quarter compared for quarter. last quarter the million last $XX.X million, for quarter year. for September operating

stock balance that are items A previously couple this announced repurchased the mentioning quarter our share our cash during program. $XX.X under quarter, our worth of impacted for repurchase of we XXX,XXX shares other that million

In addition, under quarter. bank debt million back repaid during loans the matured of that $XX.X we also

to XXX me of Average $XXX.X $XXX.X the million inventory sales the for quarter. compared million inventory to let quarter in completed sheet. June quarter. Net the our of were at balance days prior were XX to the in outstanding at million and was $XXX.X the million compared quarter. compared the at days, We the the at million Day prior quarter were to XXX a prior prior compared $XX.X quarter Net million, Now, the last $XX.X days receivables turn XX year. for $XXX.X days with million of end of quarter-end end quarter. end $XXX.X last balance days cash versus trade to

We expect million. with inventory for average revenue was continue days to improve $XX.X in recovery. our quarter the CapEx along

We million expect range September million. for CapEx to $XX the from to quarter $XX

Oregon our September fab the in expansion complete to expect We quarter.

quarter Now, guidance. to like I would discuss September

revenue expense X%. to expected million. million, range margin to plus X%; plus or minus non-GAAP of $XX.X approximately minus margin We income $X the $XX expenses be expenses range We minus million; in to to to or interest range expect million $XXX $X.X expense anticipate $X.X plus or minus $XX.X the to be or million; million, million, GAAP to be of plus or in approximately XX.X%, gross plus operating minus are to $X million. be and million XX.X%, the be tax be GAAP Non-GAAP be gross of in operating $X.X

call will With now Q&A we that, the please session. questions. for start open Operator, the

Operator

you. Thank

[Operator Williams question begin with David now session. will Benchmark. from first We Instructions] is Our Q&A the

line is open. now Your

David Williams

for and Thanks results the really letting solid Hey, execution question, good ask the congrats afternoon. on here. me and

Stephen Chang

Thanks, David.

David Williams

Chang congratulate refresh it logo good. on really Web [indiscernible] to wanted was I page and the

Stephen Chang

thanks. it, appreciate We

David Williams

Yes.

a did good seeing than the couple the So, it Do quarters. sell-through? channel sense inventories to a consumption guys like we're is rather a you job shipping last get depleting pull-in some now chance over on or that you of you're for for looks there that really replenishment

Yifan Liang

inventory, they channel mean correction now, our continued right, and June you're quarter's right Well, quarter's, I then -- efforts. after right March and that now

with channel more in So, our now revenue there's dollar levels. more amount of our inventory line is

more now we So, with are I market, see. is we going the mean whatever demand and can there right

David Williams

talk market cadence quarter, the meaningful those about impacts? could positioning a maybe June. seeing differently, or not And those some there's the the you're it you But same or just are two of May, great. you're or you know a how and point through orders progressed? decline if periods, just dynamics if in Okay, maybe same I with seeing wonder if strong

Stephen Chang

generally do I terms in business, to any we the any come hockey quarter. There's as inventory see relatively start of predicted, Overall, at our back. throughout mean as we're revenue got that stick the -- we least would of better steady in in direction. not fairly correction kind general, it

into the recovery why partial June that little So, as this had bit is well as And too. recovery. we we expect see September, to showing more see we a number there

as out Certainly, of it some and faster, progress So, the are we come to. return the we're overall, of the see back we we to it it's playing hold business on want but March it, that -- the as stronger largely expecting quarter. back want encouraged in was to to

David Williams

real there. deposit And wafers. color (ph) [to quick, for last one can stick] one I the appreciate the some you about then talked supply if Okay, just

how traction the over Just the Silicon about can next the years? think most you're about you within seeing you're that market, opportunity few the you Carbide seeing maybe and where activity, talk

Stephen Chang

Sure.

early on to but We've small products of already, still relatively excited And quite promotion the us see Silicon that's release start the the product initiative. now really portfolio aren't but own those also our means with. our very excited we're Carbide on the to revenue the Yes, we're working business. Silicon on of of -- own it. and business in business a it licensing Carbide some expand help we're Right to starting -- for the to For stages business, and about been that kind still -- really and us, kick-start of to deal, we're the about portion it's years. actually our few

That to vehicles. EV the automotive into type to get automotive, business after heart get battery-powered this trying of points the is into especially is of the going one our and entry that really newer we're of

to to take our the some Our longer. imagine, targeted charging. business. for types years it as impact they significant to towards critical into cycles We're design do see but first design will from applications these time are of more revenue. can products revenue onboard us are more now, you see few take And starting Well, some a to turn

David Williams

Thanks so much.

Operator

Thank you, David.

Our next Securities. Ellis question is with B. from Riley Craig

now is line Your open.

Craig Ellis

the start want the fourth fiscal Yes, congratulations with on I thanks quarter. on to execution, guys. the off questions for taking question and

when what would were and those have compute significantly they So, up had I up, expected I industrial, both expected. would but at look be we more than

just the you the upside driver in markets? those was can strength end what each So, clarify for of

Stephen Chang

them about talk let's Well, part. in Sure.

So, were correction, during the supply. inventory very by yes. computing accumulating customers portion That's was period, of largely the the driven peak our several in of shortest aggressive where,

were So, supply in customers match had work that with that the to the we're through their seeing. order demand those to currently

the products we to we when on quarter. the thought. improving, is out that were fulfill March orders see correction June March the played we in it and that into in made inventory So, as judgment, started and orders back hold quarter, for Basically and we because to going that started quarter, see the

side. So, markets. certainly saw recovery in side, desktop the we in Even notebook computing, motherboard the those and a especially

one you other mentioned --? The

Craig Ellis

industrial, about what Stephen? And

Stephen Chang

more On also, slow, worldwide fairly quarter. be and bigger shipments. yes, tied phones that's in quick we coming bit strong, to high-end -- to compared I for in the the where a for and chargers. coming And when but of is us, think is impact the but from better, is But terms market seeing to especially our business. contribution industrial, little actually orders industrial we especially, March that to have still premium-end The rather started seem overall quick that smartphone the more doing chargers, the

power saw up that supply in why industrial. and the bump we that's So,

There also and portion. as sub-segments solar grew as within charger, to two that that sector quick that's well the the in also power other were tools, addition on power

bigger the quick helped portion also the those coming So, is to side. from small charger but a degree,

Craig Ellis

really That's Stephen. helpful color,

way. and orders quarter with fiscal across consumer seems be comments look console to that feels is are the The growth inventory question significantly smartphones question wanted correction as our this at couldn't color, thing PCs what second the of in like some wanted If because risk we are, first off in company second the at we we the the but as we're is and to look we for correct corrects, and gives and related It beyond quarter, same gaming many happening inventory behind means takes the along, looking the I for quarter cases peak and of you're ask first seasons? the beyond the fiscal there, quarter like first just the to their that businesses, ask quarter takes? moving move talk gives some I you when to beyond for Can it. I fiscal to fiscal about gives and it and what as growth takes

Stephen Chang

about correction. performance. there own quarters difference the actually Sure. situation. application never has end Each was It was And console, gaming that its specific the went into game strong very four actually of full

they early production chain -- days, source to in XX because couldn't the Just parts up quickly what keep build down they a in And and Remember may platform, they first once up released consoles. their market mind had in months. that and the that's the last vary. needed when issues slowed their this console they production. eased catch the to supply were But bit, able were they at doing the all

And forward, first now the is through do before. any And quarter correction for or this they Going of do the production never they product console. they their will adjustments. kind have first halfway of they're the whole cycle had -- time, to some to about lifetime that

We correction why didn't for this past So, their until before, we see, quarter. any came gaming, in late. specifically that's correction coming the see

that the March a happened the last of -- of lot that, is already year of year. behind starting or already, the and last correction whether into end computing smartphones, calendar segments inventory going there, Whereas other year, us, it's this quarter

a right So, in in middle of now, in and for visibility holiday back-to-school of season. the major of the the middle of more It's about a the our phone of we're -- also time full it's And launch the U.S. the market. preparation maker.

the impact markets. more are markets end smartphone control, our for with the now So, computing eyes from the less and looking these at inventory an

Craig Ellis

that quarter-on-quarter being the December correction, business and more that in should overall seasonal be quarter second fiscal you for with XQ? recovering said, Stephen, actually like the that business inventory dynamics is expect at would the so, or fiscal since you from up the business feel down And does mean to be to in play, be sequentially

Stephen Chang

are that at are Honestly, now. well be. in. it's see still again strong is -- early how too quarter looking a the visibility the phones the our we current little bit received seasons the holiday need do right to tell expected And and And we're how next to to

even So, could low. remain March either way. seasonally fourth it could but is year, it normal quarter because, normal stronger, go year, can even adjust not any or downturn year again, calendar to usually in the start and a could It go strong, quarter the

seasonality December school with So, those but the for play the does drivers quarter, with it a key simply on to just and of markets. strength phone back the there depends factor,

Craig Ellis

Got it.

keep our want Stephen. helpful, Yifan, we'll close with out demand. in So, just I And That's eye then you. to on

So, it margin revenues great to were the it's to up flat guided see significant high the in significantly. and a level. when quarter But is upside gross

benefit quarter-on-quarter about Can and So, sequentially. you talk and a Thank gross to you. gross I the have would just expected margin margin fiscal takes gives volume XQ? in

Yifan Liang

Sure.

incremental now, September June right the have mix revenues seen much For pretty the in with and is quarter. those the we quarters, March, line

kind largely quarter we because to up in ramping utilization, fab's our then Oregon then terms June muted compared and on expansion. were it's So, quarter, of in the of June the

for to quarter. level June as similar production our similar at September compared expected relatively to overall, level the the is a -- So, be quarter,

Craig Ellis

Okay.

that a utilization revenues health $XXX Yifan? that from margin we'd see mean here, volume get to before million we materially and to gross above quarter So, does need

Yifan Liang

Right. fab -- in our And and actually good, that the -- was was it okay. June not for then utilization quarter Oregon then then -- relatively

not as indicated. incremental may that strong benefit yet recovery as So, be and the you the revenue

Craig Ellis

Yifan, thank very Stephen, you much.

Stephen Chang

right, All thank Craig. you,

Operator

you, Thank Craig.

is with next from Our Stifel. Kyle Smith question

now line open. Your is

Kyle Smith

on Kyle for here a that, everyone, Stifel. Hey, Kind had Svanberg at on Kwan question Smith going Jeremy and CapEx. off of Tore I

expectation be gradually quarter. last it September your like to decline. June the to guiding the see for So, quarter to And mentioned, you're CapEx quarter, you roughly similar your looks is

fiscal the rest So, think do you here about any update you as have of year? the

Yifan Liang

for right million June the a Right, and yes, dollars million than maybe quarter, right now, of yes. -- toward can I then mean, the and it million -- now, I fab the $XX Oregon but a lower level, to September and that the see payment yes, range, $XX we still relatively guess the in tail quarter, in end of is expansion, process. in And our couple

-- it's and product -- maintenance going the on So, like forward more de-bottlenecking, in on and for our those depending requirements.

we is X% overall, target target then range, the right that -- target. CapEx of try within our to would normal I say, CapEx to now, our and So X% target would revenue model that's our

Kyle Smith

Great, thank you.

Operator

further question Benchmark. with no registered. David currently are is Our Williams Instructions] There from questions [Operator next

line now is Your open.

David Williams

letting business, quite for IC the you was ask mix me guess, question about thanks I up a the Power bit IC gentlemen, Hey, sequentially. question a think -- the if quarter, or Yifan, this here. follow-up

was maybe of the much quarter despite you how mix, gross margin that wondering think that Just segment mix mix? will the from next how into flow the and improvement

Yifan Liang

Sure.

IC quarter, back bigger supply it was carries the margin. accumulated Yes, -- Power the generally product higher mean so I the recovered at product quarter, IC products -- the year a a the revenue relatively, March in line, and a and tentatively in a at -- last level, a because compared to ODM level. at bit, the quite to And -- yes, pace. we Power different at June and mix our constrained level, so shipment OEM more and optimized inventory also, when Our those

quite [technical with mix recovery. -- So, so definitely correct the and along the then quarter the revenue March that improved quarter, kind in difficulty] of a bit,

-- gross then over So bit. quite contributed I quarter improvement June level to -- in the mean the those margin a then

David Williams

bit from a it's out about helpful. you're been then neutral? in still is Okay, last terms So, of talk what China seeing or mixed can maybe worse, one better Asia? down? of very would around be geographic what think, just you Thank you. some And There's you're one, that perspective, messaging, any a understood. coming seeing or market little whether improving I color And around

Stephen Chang

at been is it far, not into but up, reopening for their and if to, Everyone whether China, potential think the -- and you as -- like of there, it looking Sure. I then as it think translated over so be -- maybe more being but -- there opening only there activity to a the lot up. of a to kind kick-start that don't China, is the what rest and is And that's but there sure it world, before. actually higher. it's expectations travel say it's is not was were it I spending would And up, retail I

AOS also see all just China, June the other that in and For correction quarter, the the March we in quarter. through regions, back like do came ourselves, a also

part a recovery. of they're So, that

We on to counting the going of especially Asia forward. Japan as grow also well the Taiwan, China, are region, rest Korea, and as

David Williams

Thank you.

Operator

questions additional waiting. no are There

to remarks. for closing So, I conference team pass will the management the back any

Yifan Liang

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

Stephen Chang

Thank you.

Operator

Thank your today's concludes That for call. you conference participation.

your line. disconnect now may You

Alpha and Omega Semiconductor Limited (AOSL) 9 Aug 232023 Q4 Earnings call transcript