MTSI - Earnings call transcript Q1 2020 | MACOM Technology Solutions Holdings, Inc.

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Operator

Good afternoon, and welcome to MACOM's First Fiscal Quarter 2020 Conference Call. This conference call is being recorded today Tuesday, January 28, 2020. At this time, all participants are in a listen-only mode.

I will now turn the call over to Mr. Steve Ferranti, MACOM's Vice President of Investor Relations. Mr. ahead. go please Ferranti,

Steve Ferranti

Good earnings welcome conference Catherine. fiscal MACOM's quarter XXXX call. afternoon, you, to and first Thank

I would to differ results like Harbor Securities today today. uncertainties will Litigation to discussed defined materially for remind everyone forward-looking as of in which from that forward-looking statements, Reform statements those are the the Act may subject in certain contained and contain risks Safe our Private discussion Actual XXXX.

those differences, more that in For discussions could filings MACOM's risks of refer uncertainties and we with detailed the SEC. to you result the

with certain statements non-GAAP GAAP call Management's are press which this will the during non-GAAP filed related adjusted information. include provided of SEC discussions reconciliation today. and of the company's X-K, release adjusted A in results financial Form to was

call Daly, over and With President of turn MACOM. that, I'll to Steve the CEO

Steve Daly

Thank with call Jack fiscal Kober, provide I begin provide of depth and you, take a that, revenue would is will I Chief to review our general a Financial good and Jack some will for be results. When After then will QX financial we guidance and Officer, in happy our update. questions. today's QX finished, afternoon. more XXXX earnings company our

during aspects across per $XXX.X quarter adjusted engineering million a these the job for employees great achieve improvements of discipline. a to The start Revenue was to all QX establishing It culture fiscal excellence of EPS diluted and management results. MACOM's is job management was business. was our drive XXXX the and and did and outstanding team team doing continue an $X.XX fiscal share. to good a the MACOM

follows: customers Defense and All $XX.X XX%, was X% end quarters. Data from customers similar was basis million was Industrial $XX.X a domestic million. and our with by million, geographic was from quarter XX% revenue of prior Telecom XX% QX $XX On first growth respectively. X%, international markets of revenue well and Center was performed sequential markets as to Our &

the Our in approximately markets. or our of solid quarter. products total X.X:X first within our demand And churns was the quarter end book-to-bill shipped all experienced speaking, and strong generally was XX% our business for three across We was ratio fiscal and bookings business booked revenue.

growth driven The demand following GPON quarters and for in Telecom an decline. was X.X end market in sequential of our to XG by products degree lesser primarily our a increase by multiple

control and mid-haul. As our a portfolio XG products base reminder, side for today high-performance ICs of front-haul stations, TIA Modules, products RF consists driver coherent XG high-performance receive analog for Front-End for and

XG view components, in the signal our mixed we key MACOM for current expanding including more components products a and quarters, more RF portfolio discrete more high-performance in optical driver new analog and We launching as revenue years the by And XG complementary ICs. anticipate ahead. coming

was market Our our Industrial to various by sales driven increased SATCOM U.S. revenue end tested customers. and defense and programs Defense applications measurement

our with to we forward, Going reliability defense components. our our with target plan will high and to satellite win products share existing and market OEMs efforts we expand

driven largely trends our with Today Data market service Our we by this products. improving continues analog to product revenue end XXXG market show Center portfolio. high-speed

near-term levels it inventory will levels and historical our are to channel to incremental believe low largest our distribution has growth. we relatively high-volume carrying expect that relatively The we revenue in is and compared low customers inventory. sales continue of support This

by core design in win market be to markets ability will driven products our share. bring and growth quickly revenue market three our also The and to new

time allow MACOM's engineering broader made in changes to our competitiveness us improve development the as market. product organization in to our confident and are management as the We will well September and updates process to

to increase we launch the R&D the during quarter, and increasing process. expect the This Simply spending to last streamlining our we XXXX. exceeded products. new the lines pace product throughout several of continue put, by quarters of we these Along the XX this are launched efficiency rate

three highlight from quarter technology. to releases like would our notable the the product I first diversity which of illustrate

with X XX microwave gigahertz arsenide First, gigahertz new mixer MMIC gigahertz we gigahertz. products and covering XX two portfolio to to gallium expanded our XX

In other addition feature surface packages down requirement differentiator target products die point-to-point in bandwidth, test key these measurement We high-performance and linearity, high radios, to a broad and as a bare will microwave having they and high-frequency or up mount applications. systems. and these and for microwave converters low-cost offer

performance product have is the Applications communications, notable three X.X end we XXXG using diverse drain we we this secure XX product EML XX% ISM serve. third, its driver amplifier. rates markets, launched well the infrastructure. mount Volt and production and for as wideband to a gigahertz. quarter, These highlight backhaul surface And XX-gigabaud device avionics we germanium targeting released breadth laser a and technology which at XXXG, silicon the for during efficiency GaN-on-Silicon PAMX This wideband linear of data as products modulation. Second, XXXG include watt This supports power XG applications. XX.X

products Today, we differentiated of sell hundreds thousands of customers. to

revenue and We customer low have direct low concentration. relatively product concentration

our released and the revenue and for us the the Our opportunity term. profit near growth portfolio established and provide existing products should recently product in MACOM foundation of

These profits will term. in drive L-PIC the GaN-on-Silicon, next-generation and the over At on the new we recognize on revenues are longer technologies assemblies generate the ahead. that like completing in which We years MACOM's time, same photonics. focused include potential significant R&D to these technologies lasers have help silicon DSPs, technology, growth

developments. we During various technology made on the quarter, key progress

and As team well our variety a improve an yields. to example, processing test performance wafer improve as implemented development diode products' in changes our of burn laser as our

a new is to enter underway. up new enabling wins efforts our and requirements optical the coming the many opportunity laser for Telcordia provide changes applications, XXG of reliability reliability laser to reengineering with just XG verify well results that as and that These long-term revenue. the standards market solution meet will will XX-kilometer front-haul design of services requirements these the This we In one as components. weeks months, us the

laser patented over use Our most unique our laser configurations, XX technology. which technology etch-faceted of supports

and Our from and mid-haul laser to XXXG data volume technology other XG target high in Center, various and will applications front-haul the rates XXXG markets. Data

general can a I product updates development and power activities. related to provide RF our few

First, portfolio. doing to product great products our design adding new includes our job executing GaN-on-Silicon their Carbide which plan, a team is now

our complete Second, to to technology X-inch all transition our installation GaN-on-Silicon continue equipment efforts process to Capital is and ST's to procurement development progress. planning continue. necessary fab which the

significant using highlight like the we will we have GaN-on-Silicon product supplier, amount associated GaN-on-Silicon and would project. incremental X-inch have development. third, amplifier announce introductions to of and work GaN And and design product reason, progress when I MACOM our to of complete the existing are we that us still schedules front in for along further our made this XG on a in MIMO ST performance. the And massive

GaN-on-Silicon and current improved competitive and Our watt, X watt becoming to is performance X LDMOS results is XX achieving increasingly and watt Carbide. product

the reengineering pre Over have test or we techniques. past performance months, DPD the six developing matching new device packaging, digital been amplifier and distortion by optimizing

goal these compelling product product and intersect market is to compelling Our designs at price. the finish a with a

increase with a we We believe a ahead. base. in amplifier stockholder the small stand this will front tremendous customer our market technology believe multibillion-dollar grow of opportunity our or business SAM demand have in has to profitability addressable revenues diverse products proprietary years We for a We value serviceable a MIMO revenues, and recognize and and MACOM the in years the portfolio. we to are relative unique and reason, ahead. SAM for massive

key to on the see operations improving fab times, fiscal will opportunities lower In team improved continues to XXXX, planning. meeting cycle well team be improve on Our of performance scrap execute metrics we and focused inventory our levels wafer customer commitments. and as

and a believe of improving inventory our During long-term off are to inventory to the the the quarter, major lowering our and improvements E&O. SIOP planning will with project cross-functional These a planning goal operations line. waste and we drop bottom associated expected sales reduce management savings inventory that ultimately right kicked process our or operations of

We fiscal XXXX. in these efforts our expect benefits see to of

to improvements. summary, pleased ahead. the date, results as I aspects improve markets, expect continue all the am roadmaps, three within with business, technology and and of performance In improved continue our core we operational company positioning to we we including to move

the March that during fiscal we'll Optical attending in OFC QX. Conference or I'll our San in Fiber Diego be note

have to as introduce well products great as the new booth. additional some will conference with our some product We demonstrations at

detailed our financial of provide review results. QX will Jack a more now

John Kober

Thanks, Steve good afternoon, and everyone.

achieve and Our free has who improvements like fiscal cash cash and posted this. another share, hard results MACOM This and overall adjusted I tangible the of were QX step improving also profitability toward flow. we flow. company-wide to have notably, thank per would working to earnings all employees revenue, effort, been a been in help MACOM's Most sequential

The in sequentially. and quarter Revenue XXXX deployments from in markets, first our early driven across sequential was positive growth in fiscal industrial million, as X% trends by increases of end Telecom, in $XXX.X improvement was healthy Data as demand Center. well including up XG defense the

a fiscal On down focal fiscal XX margin a profit gross remains was QX $XX.X margin XX% of XXXX. from quarter revenue. $XXX.X revenue or in was for point basis million in first million basis Adjusted improvement us. key was year-over-year Adjusted Gross gross of up points XX.X% sequentially.

was and noted, the result margin fiscal we consisting million, $XX.X in operational time of adjusted and cycle of of in have of expense that million. will at operating gains Steve scrap expense aimed incremental Total we beyond. for $XX.X and of initiatives $XX.X expense improvement, As believe number SG&A a reduction XXXX internal efficiencies R&D ongoing gross million course

We restructuring we XXXX We over the restructuring down we plan quarter actions. $X than million Operating additional remaining more expenses of approximately were expense $XXX,XXX fiscal these course back of in fiscal complete first million charges of the the $X.X June in associated XXXX. restructuring as with anticipate announced incurred sequentially.

in there to XXXX previously our additional OpEx expect XXXX. items June remaining related plan As I will have reductions we noted, fiscal that a later restructuring are provide few

expenditures from to R&D expenses like include associated programs. certain also would with I development may note large time-to-time that our

product continue opportunities spending. will new invest our while We discretionary in also aggressively to managing

into model growth We remain operating XXXX see as to was leverage operating $XX relatively fiscal income stable. to the continue expenses margin. and operating for remainder business the first in Adjusted expect ample operating in of XX.X% adjusted million revenue we translating quarter our

fourth Fiscal $X.X was was expense million, $XX.X Depreciation QX $X.X expense of fiscal adjusted approximately the XXXX. from for and net interest fiscal adjusted slightly down QX was million million. quarter EBITDA

fiscal into in and rate per Our tax earnings an share, $X.XX continued income was non-GAAP million approximately in utilizing fully $X.X million, of QX of QX shares. count Fiscal adjusted income $XXX,XXX. net at of fully resulted share diluted diluted expense adjusted adjusted XX.X a X% translating

our in to factor lower at cash improved cash the $XX.X receivable was million by balance led sheet million. our accounts for capital behind generation operations and flow coming primary highlight flow QX Now, an fiscal levels, $XX items, a reduction moving from on was balance. in cash A working

direct a costs, have feel better focus is visibility expedited reduced to has on our This efforts quarter. monthly linearity continued throughout will collect such us lower freight management. revenue the and other accounts receivable linearity which within more improved quarter allowed as cycle times, improve We result of efficiencies production inventory operational to and benefits the this

and of QX transitional quarter the to was capital revenue working and a management us, we improved trend do continue. linearity expect for

to However, able operating we here be during fiscal QX. we QX same did level the flow do in not cash at we will believe generate

throughout cash expense We focused improvements. and drive management to capital operating tight capital have numerous the including steps working organization flow, continue taken further to spending, healthier

as be We up million will capital of the QX fiscal timing payments certain result totaled from fiscal a investments. revenue. in for X.X% or capital of During anticipate expenditures levels QX $X.X QX CapEx of

capital returns overall appropriate XXXX to XXXX expect levels, below on capital continue be to fiscal achieving deploy. expenditures we fiscal that focused remain We we in on and

compared discussed. higher lower driven was positive as flow as million in combination previously a expenditures million QX QX cash cash from free the capital operations negative QX of to flow $XX.X $XX.X Fiscal a by and

down Inventories opportunities our Inventory approximately in $X and roughly end for forward. times metrics sequentially. were going Inventory $XXX.X an improvement inventory we area management turns remains were two million flat million continued see at fiscal to quarter. during the quarter emphasis of

$XXX of from at fiscal Cash, million $XXX cash up QX. were investments short-term the million, million equivalents and end $XX

comprised As short-term for of reminder, corporate and bonds sale. investments and a are classified as paper are our held commercial

long-term inclusive was $XXX leases. Total of debt million, finance

it light maturity Our principal covenant until payments May minimal XXXX. its long-term debt is annual of $XXX million in has

available XXXX. million an also credit We November undrawn line through $XXX have

of in new XXXX. we $XX I The which that was new on resulted we first quarter of fiscal in fiscal accounting our FASB's and implemented this approximately summary, want in are increase ASC standard progress note lease first assets in to million. QX with XXX. financial In quarter the standard pleased the liabilities adoption our accounting of an

still believe much a work across momentum we're do off achieve there's positive we good start business. the While our more term that for order in with to to longer to us objectives,

now I the turn discussion over Steve. to will back

Steve Daly

MACOM Jack. and XX, the million to XX% in range $X.XX earnings XX XXXX fully of XXXX $XXX share shares. gross be in March is range net revenue between is $X.XX million adjusted expected based you, fiscal Thank ending per $XXX in million. share diluted of be per be on and QX margin expects to to XX% to Adjusted expected to the

Our QX that revenues be & up expectations to Center market slightly Data revenue projections Industrial end will flat and will be include Telecom market down. Defense and end revenues

focused and excited are us the We of in execution we are front about planning. multiple opportunities on and

our operator invite our like ask questions. listeners any to to would I ask now to

Operator

comes question Kumar you. Thank Piper from And Harsh [Operator first Sandler. with our Instructions]

open. line Your is

Harsh Kumar

guys. Hey, Yeah.

December congratulations, flow. Center solid We execution. companies I talking your in but a about the getting of all that couple in other see to meaningful free Good didn't that better. way, the guidance A December And market? specifically implies positive think quarter give that Data cash move in it First it are see of will maybe then some I the thinking then didn't quarter? follow-up. end why you're have can you I And perhaps that March. color curious, what was for a be if up

Steve Daly

Yeah.

market – that Data is seeing the Center our line think industry. what with I in we're in

are Most activity is a for the momentum solutions seeing are in applications. terms We our and positive type our short-reach Center of exposure XXXG in analog booking that demand. on Data of generally

the front to XXXG products for we sequential see think sort end seeing a our will of We Data growth. continued Center behaved us demand But market in low, generally of of like growth say we to growth look I'll strength. We're that type and sequential our well, there's some well think into the QX, we in above us. As be come. XX% significant low-teens

Operator

next with from & comes question Bolton Our Quinn Company. Needham

Your line is open.

Quinn Bolton

Hey.

cash Let and come generation on to quarter. especially results me I nice the echo the my nice wanted congratulations on Steve, the in back.

the what You for it for Silicon had products may you're how watt. get new those I XX think a mentioned trying the of differ to on sense just STMicro on doing applications GaN I'm XX that from products some GaN and to Silicon? was And with

Steve Daly

Right.

bipolar So typically levels. And that business. about in transistor type we just type a power stable where of have you're talking fairly around to a test business, and remind everybody, XX-watt end avionics Most see robust that's revolves It's above defense power and it legacy market. we applications measurement even.

sure our And technology make address on or terms same with is or Silicon that of GaN newer even strategy so part in Carbide new of a product development technologies markets as those the such a on Silicon that technology. forward, we come GaN to relevant more as

category. as or build year So power to this our will for strategy over business general be next the multi-market as out transistor well two our amplifier power

our a low the around corporate medium its volume, And ST. typically generally What we mix this of the like are the product It's about to and average. additive type area. are revolves above high is strategy strong that margins high; market very XG ASPs a

But different. very it's very,

really So, know as X-inch to the process low-cost address you and high-volume a markets our GaN-on-Silicon is like fab, specifically transitioning massive ST and XG. taking MIMO to strategy existing it

Quinn Bolton

it's different it you. a Got application. so, Thank

business guys on driven question strength seem the The Telecom of the I side is other to be you reporting had XG. by

front mid-haul. think I

reported companies we here about have after Yet instruments slower activity the on to when seeing and talked listen Both Texas XG. Xilinx close.

seeing? perhaps weakness you're players, might larger seeing some space Just in are of able some the of if to strength reconcile, wondering, be us the the help you versus the

Steve Daly

of think, small relative of Number a the very few Remember, front the market. to size in one, we're SAM. multibillion-dollar I we're things. Well, a

period incremental So That's isn't our the of necessarily first in growth market. representative I'd make. any the point

all second is, for market of end actually variety our Telecom different is catch submarkets. The large a a

So But other that XG have them. one we is of growth. submarkets drive

area that For and the that script was that GPON, strength. an in showing example was think mentioned I I

our But we're position of our some in products are products, market. front some strong new support new that And products from in believe with to the market. that haul XG revenue, a we with of analog said, we seeing

that, So, the seeing comments leave strength at I will that continue. we think I'll than that other guess my We are strength.

a course in talked Telecom. the switches of into go is modules have market. that And We for GPON the about XG We the lot of then, the front-end products high-power different past, radios. which market access

So, Telecom for MACOM is market. a very broad

just single-digit growth, these all we things about. sequential As I talked QX, look high see think from we we'll into coming

Quinn Bolton

you. Thank

Operator

you. next Instructions] comes Thank [Operator Our from Tore Stifel. with question Svanberg

is line Your open.

Tore Svanberg

Steve, be and the GaN-on-Silicon. results. congratulations at strong but to MACOM Thank previous making the team aggressive comparison, you management Yes. this I on for apologize on really seemed

that to different You GaN. comes a at the you're when me mentioned flavors balanced it a have the least perhaps going it to with of GaN-on-Silicon just of approach to that carbide, more appears --

Is of other reason to in investments make are any there GaN-on-Silicon that more the it, right think Carbide? why way to starting you or is

Steve Daly

we from through of Rights, will market to that have our look we we'll the that will at external have our products And run so a portfolio point view. fabs. fab. business go we'll products and And will I use internal

so, best focused HBT on. it's or And our have any GaN-on-Silicon pHEMT our make strategy Carbide technology, chip other sure about process simple. GaN-on-Silicon to We or for is whether even access applications think want we or high-power the to bipolar, the that or designers when they're

is Defense. wants in sit $XX of & in This today technologies. contribute best About we the or end to that an that is million Industrial revenue market

process different where there solution. we are instances will superior a when compare so, And provide many certain the to GaN-on-Silicon technologies, Carbide applications GaN

And provide want to to process. so that access we designers our

for as developing MIMO. massive of regarding goals not solution including GaN variety up of GaN-on-Silicon backing markets certainly away a aperture a opening additive. the strategy of So, our We're and I the at from high-volume look our

compelling some of are applications. in of of attributes for example use in certain There terms ease GaN-on-Silicon

I So it don't We I a with think strategy we're should interpret a continuing Carbide. pointed develop out. that. you as change, activity as we're GaN-on-Silicon But see replacing to GaN-on-Silicon as where long-term actions these

Tore Svanberg

relates as And question perhaps really follow-up both you, is it to my of That's helpful. margin. for gross

you to and and scrap forth. some so So taking try on improve operationally so said you're and actions internally yields

of about target? the XX% beyond getting think of of part of initiatives kind the that or those company we margin, immediate long-term towards march gross Should the is that kind goal

John Kober

line XXs getting with couple margins. margins the Tore, it's or Jack. past going the back we Those high towards of improving years in in initiatives march us that We had are know so.

many back taking us initiatives we're to So and of get these try line in there.

well. have increases sequential expectation it. gross the work gross going expand past is as that revenue of to And in We think our over of margins a our It's got again through we will perspective posted And quarters. once opportunity as time continue. we've an take more recovers some couple the way margin from as we to

I feel based that other margin to in area operating expansion current think addition of have the bottom really view, an margin to contribute just going the OpEx we've where is on our structure from sufficient to got we're leverage to just point and note gross we line.

Operator

Thank you. with next Tom from Davidson. And our comes Diffely question D.A.

open. line Your is

Tom Diffely

have that? that at recovery on for would good look how you you double-digit high products is impact versus products, starting most new of single a the a low new as the outlook When the market are coming describe meaningful to Yes, or growth, afternoon. impressive from fairly

Steve Daly

Yes.

the I both. bit it's at of think X% it's to aggregate our on think midpoint around little I sequential clear And growth. guidance just a be

it's are I of it the is and – right submarkets, combination Data as smaller really both. such a of faster our markets now Center think Telecom. Some But so growing

the There in we're Center. But market are Data market pockets where other there's such as there's where winning share. areas recovery

over at example, work past due great data TIAs, developing running been rates. adding the for that's doing of modulator company products are linear some to for few the drivers including years product long haul, that to And the has set that higher

as products is opportunity. more to the capture So market our business introduce goal to rapidly a

it on, I whether run want a be or really a Jack rate, Center XG. And gallium it's focusing MIMIC we door in our diode a whether and we doing do it's massive a amplifier that how are what into sell faster the whether MIMO out products foundry, the we so arsenide and to that team move the are laser at Data for

to in theme are be So next these our markets the launch I now. demanding will the large products growth that for least year products will MACOM's think very the around centered two or at around ability

Tom Diffely

then And is when you higher end level great. certain at Okay release, across initially there focused you're margin is of – this the new board? are or a markets, product market truly where ramping look certain the there

Steve Daly

focused many back September we in were in we instances markets. technologies actually are organization groups engineering market. So In Those by which reorganized some six – instances very some technology. aligned they into our one primarily different serve on

a And so these organizations of each one development engineering product plan. has

say would depending there's of end the product and on higher margins lower have I the margins And speaking that continuum a products products and generally application. the have that of performance

part of over increase long planning, as margins gross a our the term the so want And company. we do of the strategic to

command And because will operation we the and the production improvements products yields the price. designs higher production more Then be get higher far. work on during whether really step the margin and that a is to can pay with margins business gross us have better or launching that customer's while that so next it of making willing

to design. in the we And the we're in, we and coming are question, will going back our to we're are asking we're we markets margins strategy ourselves we how above reviewing be and end reviewing really products choose that the XX%? we're And the from markets not get do so our what answer that

we just quarter, had XX% had quarter a increase EPS, first in incredible power is saw ago, that's Now of from said, looking the strength glimpse maybe growth you where for a a really have fourth but revenue X% manufacturing here Jack that that leverage. XX% And to thing with and that as highlighted just tremendous in moment we the one MACOM range. we

as capture a up. management that want to earnings that ultimately team value, shareholder means to sure driving do opportunities make drive And so the what we which part of we is

And more with so but high-margin but lower be that. that revenue the different a of than to lots by there's result say be launching parts corporate stream average of can launching let's also can do or It is parts tremendous. ways margin – lower it say associated

of sure can And underlying strategies you that up. theme means be and all value so we our will will to these certainly earnings look drive be shareholder driving at which

Operator

Thank you.

Your next with question from Tim comes Savageaux Capital. Northland

Your line open. is

Tim Savageaux

ascertain afternoon good somewhat XG sounds Telecom Hi, Wanted I'd to you have the driven focus congrats like that is I'd if and kind And on you are the hear And there. driven assume on in an But standing driving that where to a Huawei wonder quarter. if front-haul, China and what in of that it. us kind within your what growth in I of probably extent, significant To then days I able to you're you mostly like results. markets that's regard? mostly of end with are on to the on can sort give mid-haul. that a extent comment like to these growth? one on kind follow-up. And update of

Steve Daly

initial regarding accurate end from the from. your in It associated application. correct you China and are XG front-haul It's a is the primarily coming with basically Well, is growth market. that end comments believe coming primarily Yes. chips what

from outside coming is small other that are markets of there China. contribution overseas a Although

Regarding Huawei.

no we our Huawei we're small flat. the to up revenue then we that, as I longer a been the of we've is XX% products seven to majority subset been years there we've in on seen restrictions. point. number because And a have revenues to level, recent one They not sell but that. May to of went selling are that everybody And or over middle knows in that Huawei and to them ramping Huawei to to well the revenue been list months, would Huawei achieved had export know at But the vast effectively declining Prior of May. they had past back doing say, And Huawei a the the selling up. were You changed. we're then that entity allowed that climbing since in

at associated been we really And general AOP declining. but trend the over revenues and out future last planning so our do when flat we of our that the upside. of we the activities, our consider modeling take has and look two But quarters, sort

clearly grow and comes into the so to about lose key if business at when think in at our we're is diversity that Telecom a say I business our I beyond enough Huawei again, be space, has player but to where our And look of would we -- Huawei key large, and strategy and make strong sure that's still profitable that And be customer grow. to to the a play. that

We of customers. thousands have

other a an sort of hundreds and all were lot lines. previously stage Huawei. have engaged eye subset We peers product very change. our forward-looking We're of with at things of selling customer certainly think We relative our concentration ex-Huawei them. have selling really small of this until what a than so, this to keeping them strength. And we don't of is a is on not we But we planning are

Tim Savageaux

a front-haul And on it. the side. Got follow-up

lasers XX-gig comments that not I'm application some I caught the sure, into made timing. though. around You

the are might of front-haul part driven, Assuming revenues your that? laser kind today you what And more to add to HPA when ramp? expect could that

Steve Daly

So you're update just to we've about specifically we're than be additive. a through say phase. qualification through We that that right. timing of gone talk didn't very now It and going could a other the process

internally, of for product ramps on timeline. for about amount introductions still get laser updates to So, it's revenue talking can least the this that in two take wait this to to comfortable like at or work thing the have a we're fair -- that. to best going where point near term. I to stage no say on or a is things the so at do the XXG quarter or to front-haul We do

Operator

next from comes our you. Sandler. Piper Harsh question Thank Kumar And with

line is open. Your

Harsh Kumar

follow-up curious if question. for think Thanks Jack, I talk we how about was about should you OpEx. could

context you actually little your down going some made I went you while was grew you're pretty dollar reigning sales it of held of think sort bit, that absolute the in and of a in then revenues. in the tight. holding OpEx rest or it year? for terms, Is that actually percentage be a of that to is or to kind as Your comments And

John Kober

on some manage focused all noted depending be dollars to some that we'll And R&D can through. and expenses, we're it. our we Harsh. downs operating aggressively the continue had managing on We're focused Yes, do work expenditures earlier. and as as I the There way on ups

Harsh Kumar

Thanks.

Operator

the to any further no Thank you. I'm call closing questions like Mr. to remarks. back showing Steve this And at time. Daly turn I'd for

Steve Daly

you. past would employees closing, to In our a quarter. Thank evening. good for efforts and the I Have throughout Jack their thank like

Operator

gentlemen, call. today's Thank participating. and for concludes this Ladies you conference

great now disconnect. may a day. You Everyone have

MACOM Technology Solutions (MTSI) 28 Jan 202020 Q1 Earnings call transcript