QUIK - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, good afternoon. At this time, I'd like to welcome everyone to QuickLogic Corporation's Fourth Quarter and Fiscal Year 2019 Earnings Results Conference Call.

As a reminder, today's call is being recorded for replay purposes through February 19, 2020. I would now like to turn the conference over to Mr. Jim Fanucchi of Darrow Associates. Mr. ahead. go please Fanucchi,

Jim Fanucchi

and all operator joining you us. thanks you, of to for Thank

are and Faith, and speakers Brian Our today President Cheung, Financial Dr. Chief Chief Officer. Sue Officer, Executive

today of design design and uncertainties, QuickLogic's disruption statements new expenses, but acceptance some to by comments projected results into expected products; of of to profitability could As shipments; broadening operating expectations its to pertaining activity risks expectations our customers' financial future dates and including shipments; timing ability number future statements and start Coronavirus; revenue convert a risks QuickLogic associated impact revenue, to and and ecosystem with changes partners; from not reminder, company’s new makes gross potential and timing margin, of production systems; involve its that are the market caused and opportunities stated the performance, schedule the relating cash. limited stock for forward-looking products; that the mature and evaluation production the

should SEC These QuickLogic's cautionary that the warnings in with conjunction in considered appear filings. be statements

For and website the this events website. additional SEC are the to from statements Investors forward-looking that may uncertainties risks the and and cautioned materially all that call SEC’s differ on posted involve information, in refer made. filings please its company's future statements

annual publicly any or any light today, and statements the quarterly forward-looking recent statements forward-looking recent please those SEC. revisions to recent discussed of to of Form file future most XX-Q, of management and on revise under as periodically the the refer obligation details “Risk we documents and more Forms the assumptions, For information made heading Factors” the other on risks, in These uncertainties of with Form undertakes report events. the new release X-K most no or report in XX-K, are

to financials be should as GAAP. with substitute prepared measures superior we not reporting measures. in financial call a today’s for be considered will accordance or In non-GAAP These non-GAAP

our may non-GAAP today release and financial the of other we to GAAP refer reconciliation detailed to results issued You earnings for a statements.

financial web current posted We updated data. and have an on that also page our historical provides table non-GAAP IR

QuickLogic and deemed note, page under upcoming QuickLogic obligations of information material distribution and be and may at its page, comply planned attendance these channels account, the to Such may Facebook about uses company Please its investor other LinkedIn announcements, channels blog, industry as its information Twitter FD. information, matters. and conferences, its of and use with other corporate products, disclosure Regulation website, financial its

remarks QuickLogic’s A made copy earnings page on the posted call. after will prepared conclusion call today’s at today’s shortly be of the IR of web

to I call turn over would the now to like Brian.

Brian Faith

for Good Jim. everyone thank our financial Fourth results quarter XXXX you joining Fiscal afternoon and conference you, and call. Thank all

software last platform reach, the stage since We added wins announced our taken companies, scale SensiML™ ecosystem have our initiatives developments that XXXX and increase open our source for will better AI define set for our design business. more partners place software with multi-national to the and positive Many and call earnings of long-term expanded success. large

later and We will expect future. year revenue into these larger all of opportunities to contribute the this

challenges looking revenue In performance. remain were due earnings in addition, we prospects of prior excited while we to about calls streamline steps restructuring. a we about our our XXXX, And in with our we organizational were disappointed talked footprint took beyond through significant admittedly, our at factors to Many control. back these XXXX,

ever as issues positive this year, linger fundamentals in as I business into we believe first achieve am While some the profitability and in the about our quarter will will XXXX.

our and of beyond. financial then growth on results couple more for happened the provide will detailed drivers a last cover move the first into items I near-term discussion review outlook. have few in want and XXXX that a months and Later, our to Sue

QuickLogic. In missed is presence by the refine his insight the had December, as years. all XX me serving were the valuable CEO of a Mike Tom to history long as and company subsequently Farese and us was years the Michael Board for Tom me with into as announced member we immensely Chairman helpful the Board industry Current QuickLogic, strategy. XX to long-term our the member at we and of of Directors. Company’s Board His for named semiconductor company passing Chairman and Hart. been of Dr. a has board

weeks in savings a about annualized $X restructuring significant middle our deliver also to COGS, gross fully our is to our line. ago quarter. which announced There will two we impact of profit be help Next, will implemented the once scheduled in a million the of margin business, second which positive

The came decision planning as a of strategic year-end to result these our changes efforts. make

wins design strategy into that numerous SoC development for During position market completed. our the it clear our our voice process partners product reviewed and EOS™ and SoC we with software markets applications future eFPGA the be believe of software plans announced majority the and review our to announced vast current the engagements new term SoC expansion EOS and relationship was recently the became with near for technologies. will Flextronics. SoC Through and growth the development We driven from support SX

conjunction the developed with in addition, eFPGA service mega-cap open will software our provider. source cloud leverage initiative In being a products

all across were reductions business functions. headcount The

place, business. With believe the we we have many have partnerships a scalable now more put we in

conclusion efficiently with don’t we for can everybody design announcing partner, operate customer a that This OptimusLogic, and fewer more software new In the and of authorized to system hardware the for we engineering to days. need on embedded personnel. be development coming in take fact, will led the

with use partners we them large expand our ecosystem, multi-national to As product and working that on developed to we are we into already have continue our platform bring will reach. new development the

of felt reflect of a eliminating organization collaboration president of that streamline we structure organization our with role partners vice needed and is to sales. able sales the with refined to the were We and deeper go-to-market One result our the strategy growth. restructuring partners, ecosystem to drive of reset including long-term the

to organization us highest which on is this puts a bottom far The profitability priority year. our our by of that result trajectory achieve is line these our leaner goals, actions

provide restructuring the details call. on later will the in additional Sue

With discussion growth our shift getting for want to review these as for to I plan understand items we profitability the year. to this the everyone a see drivers backdrop, XXXX help to

following: drivers key expect the The that our in include lead we growth revenue to XXXX X.

mature Expansion X. with sales. Expanded strength eFPGA product and define what as in Software multi-national AI products our our IP OEMs. X. several SaaS of Continued SoC segment. we SensiML

mature spending in XXXX Pushouts delayed the been back. with Our area, are largest Starting half mostly of revenue second strong. products: see our business and to have we military come resolved purchases remains that starting

to aggregate in both We expect most of to through in delayed approximately orders, come million, and $X the see QX. QX which amounted

in of than While better gives currently half from confidence the mature ramp is recovery, us will revenue we expected, the than XXXX greater visibility a total revenue for product later which little We the have we of year. outlook the come our originally less a believe segment.

of define licensing. SX our The revenue EOS from primarily revenue, SensiML new eFPGA This SaaS products, products. includes IP as portion other SoC what and AI we comes

mentioned sales now of have the a for grow including: in to product segment, as combination such before, a I with The expect we with some well-known and of significantly cloud a large provider in joint improvement led will streaming companies by clarity items, greater this outlook XXXX and mega-cap programs service and challenging XXXX. After programs have multi-national new fast discussed SmartTV opportunity OEM and category Flextronics we be and growing our customers such the on last Infineon, Kyocera our provider, and with as the quarter.

On platform SoC Kyocera for a significant voice its Kyocera: chosen we our win announced power for SX QuickLogic’s Torque GXX recently EOS sensor and has design processing platform. ultra-low smartphone.

designed we the ago. phones, our just three platform now from up into of are QuickLogic’s double using two zero in could We XXXX. phones relationship see With growing number released quarters Kyocera

Our our collaboration Fusion in fusion features on SoC which the announced a Sensor Infineon last Infineon also with SX highlighted levels. includes is kit from We board, Flextronics. our several daughter and FLEXino Kit This Development with EOS inclusion month. sensors. important sensor Flextronics relationship This along was

the IoT into developed has (SiP) development complementary which System-in-Package be Flextronics architectures. version existing of integrated board a system tiny can

have now range of manufacturing for applications. wide volume class prototyping-to-high a a will solution to developers IoT world access

we proactive sales growth and XXXX, more a sales exposure our opportunities. broaden universe marketing will expect offer path. which the more Infineon, to broad Since scalable in joint a have to is of several SiP, and embedded campaigns In channel should their product with wider Flextronics our Flextronics

voice use today. the will device consumer market, of we always-on consumer drive every almost next-generation In the

engaged year. in now TV provider to ship a are smart streaming and platform and them well-known with new track are this QX on and fast-growing to a We in

at market, accelerate, will controls in expect market opportunities least the thousand hands-free generate developing per more remote dollars for generating to several this quarter. revenue and wireless hundred us We giving potentially

with ODMs and We to several generation the are OEMs engaging deploy wireless of earbuds. also next

While type earbud continues solution. entered devices. dominate the own expected recently for alternative Amazon largest customized the with demand This player their spur market, to additional to is

the contribution our earbuds acceptance issues speaking That quality We of box’ we expect Chinese achieving breadth facing with sales material gaining XXXX. ODMs are to to later Coronavirus without meaningful confident China, are profitability and this contribute ODMs. these our said, several in even the ‘white a being and goals with funnel, wireless for market revenue mainland in from

recognized companies more suite SensiML to SensiML AI-enabled relationship brings and how those code-generating market look and SensiML forward is companies broader Semiconductor We enabling explore tools can their QuickAI into as range to quickly such products. Nordic Nordic. be a our SensiML momentum AI as more this value AI growth broadening gain of continues to get to Moving to the The of integrated develop with in auto businesses: efficiently. month, to from products. Last products

better using SensiML ST STMXX total its companies. STMicroelectronics evaluation with SensiML and is XXX select QX. program, By a product, are much with developers product. is have the the QX We customers, tend total affiliated announced which evaluation full now using not customers going of XX periods. MCU with X market an SaaS in to most yet up of back longer Partner to joined joining customers of of SensiML Global the closed This Analytics customers XX partner. are Toolkit. the Currently, still reach the Most are These authorized of from and Fortune QX X can XX+ Program this types also the segment. version Industrial the

is we slower While the are significant planning XXXX. percentage continue thought, momentum expected ramp good we contributing a to build this originally and been on revenue to has the our conversion in than to growth news that of

the than previous XXX discussed sales channels current times our with the more ability the strategy. our under earlier. potential I up kits has business deliver I to ‘mega-cap’ company quarter, mentioned Last This to company development go-to-market

AI SensiML and a As such, drive base for correspondingly the SX platform. could user software this higher EOS

of this We expect first company being the systems quarter. in to the co-developed launch with IoT two development

covered launches I for have know as “what not several discuss the to and time, timing in will before, this an given does our areas is a base natural of at Sue one mentioned revenue serve growth financial XXXX?�� will I variability mean outlook As for and policy terms her quarter which of it a in comments. question provide catalysts customer beyond our have that in product is the I outlook

However, the for following current XXXX. context regarding will I outlook offer our

outbreak. First, related the Coronavirus to

We a chain country, and a a footprint manufacturing China, the in no very have from point view. of small in limited direct presence supply China have

the be that into New restrictions This products China it Year many Electronics customers, Lunar travel could anticipated. with us longer the expected. as still makes in the impact government, place for China as than However, in on by the last development situation economy currently longer will than apparent and and areas, slower Hearable Chinese domestic holiday our mandated is schedules sales from market, Consumer believe well the

a the suppliers profitability shutdowns at longer. and the constant our We this have effect on lingering confident possibly will milestone achieving these challenges, are taking we approach are at contribution least material a these without from ODMs. our with in ODMs, Despite contact and our are quarter in stage first that Chinese and we

conservative very XXXX. approach fluid this our outlook situation, for we to are a Given taking

be SaaS sales, more we factoring IP be will stair-step expectations, year the in through With impact year our close an When margin for rest teens. profitable XXXX end mid-XXs. revenue starting When we see increases believe should with the this end could and we growth current actions, the fiscal income expected this revenue XXXX. towards profit the believe the of for of mid-to-high have, Based containing non-GAAP restructuring mix in operating the or could in QX the combined on even breaking year. in gross we becoming could product to and

And improved restructuring cash higher the throughout margin, of we one stress: significantly through usage to year. point other key I gross want and expected decline expect the to combination revenue, activities,

such, capital we raise confident As need achieve to I will profitability. very am to not

our have operations, improved we am place When streamlined drive to and of development enhanced confident product summary, in in profitability our go-to-market items all In together, QuickLogic the XXXX. performance foundation these and strategy. tying I refined financial overall is to

a Sue performance full would Sue: I now the financial and turn call discussion to for recent our QX over like to of Outlook.

Dr. Sue Cheung

afternoon Thank you, and joining Brian. Good to for thanks everyone us.

the fourth guidance revenue quarter of increased range For million, $X.X the we to XXXX, provided. sequentially within

compares of fourth the XXXX. in quarter revenue revenue million Our $X.X with QX of

in was $XXX with decline due large, thousand. bridge XXXX. Within approximately were quarter initial The license. in products QX revenue, display from $X.X from new prior mainly in revenue year our eFPGA of revenue This lower thousand $XXX the product and compares to million fourth sales ongoing the of sales new the a

Our last million million, an mature $X.X in increase with year. $X.X revenue compared was product QX

the of for In each three XX% had quarter customers we fourth who greater XXXX, our accounted sales. of or

Non-GAAP was additional due mostly SaaS gross the of to was business. mix the with same in mature XX.X% QX revenue compared margin The product quarter year. XX.X%, and last increase higher in

slightly Non-GAAP year. from were operating for down last approximately expenses QX quarter fourth million the million, in $X.X of $X.X

was million Operating R&D QX and and of $X.X year. QX was million, SG&A in last million, $X.X Expenses, respectively, This with our compares Within $X.X and $X.X R&D million. SG&A

$XX with tax to in charge the XXXX. for with at total to charge and QX of quarter income, year. a compared net thousand, the expense expense, increase adjustments in $XXX associated due The thousand interest last mainly a and fourth The other end taxes was was of of SensiML attributes

calculation fourth a or used million, was The December This in million, of The for a X.X of completed periods share. in Total XXXX. accounts the quarter share in June we $X.XX million was loss year. last net compared one-for-fourteen the per $X.X quarter reflects share $X.XX in ago. per count for year QX the effect or of both XX, QX million, in reverse into for most approximately Non-GAAP share net with difference. offering $X.X per that the went compares split XXXX with XXXX X.X calculation same purposes loss stock

the total cash the million QX million, of last at was end Finally, the $XX.X end of at $XX.X compared quarter. with

full from the our includes $XX line million credit. also balance cash Our draw of

expand our guidance, to moving Before to recently the announced I restructuring would plan. like on

when the should XX% of approximately We the goods headcount the will The expect with to and $X line million $X.XX of operating completed with May fiscal cost million some restructuring Within facilities, $X be closing remainder approximately about reduction, the in sold. generate in compared be million, timeframe. the annualized XXXX. expense in savings this in

fiscal coming thousand expect of to of XXXX. expenditures We $XXX approximately quarter expenses, of incur $XXX cash restructuring about the which will with majority thousand the be first in

approximately the $X.X second quarter in rate of XXXX. a believe at run factoring starting expenses When million be changes, of these will non-GAAP we quarterly operating in

was Total million $XX.X million, XXXX down XXXX. in Now fiscal to results. the full-year $XX.X revenue turning fiscal from

was product component the million, year. million $X.X the in million, with of was product revenue million revenue decline. revenue Lower prior fiscal Mature display $X.X with New was $X.X the bridge compared largest $X.X in XXXX. compared

XX% the two revenue. had each year, of accounted we customers for than greater our total For that

The XXXX. generated higher XXXX IP XX.X% AI from for XXXX products. gross from was was mature eFPGA XX.X%, in SensiML licenses driven margin SaaS, by primarily and revenue in Gross processing, up margin sensor

year expenses which prior acquisition the million, our Even year. flat at were operating beginning the $XX.X with of of for the SensiML were the XXXX, with

or share EPS XXXX. was for count calculate share million $XX.X to net XXXX Our X.X for or for compared used million, per for share, $X.XX per million X.X The $X.XX with and XXXX was $XX.X loss million XXXX.

on to first forecast quarter end XXth: for XXXX, moving our the of Now will which March

Our first revenue $X.X minus the XX for quarter plus or guidance million, percent. is

Coronavirus. impact of will product We already the of million taking approximately and from are revenue. thousand potential new mature revenue $X.X be a product the $XXX comprised revenue Brian As discussed, conservative on outlook based of believe total we

restructuring, sales, and or from X expect approximately plus With savings a our to mix be XX the minus SaaS cost the gross non-GAAP percent, margin increasing includes that sales we percent.

excluding Within that plus $X.X expenses, to R&D thousand. minus non-GAAP total one-time operating restructuring are be we We approximately million, or our be million drop costs, to operating the million. expect approximately $X.X forecasting to $XXX will SG&A expenses, approximately $X.X and

SG&A As in QX, a will million reminder, and which the savings the full $X.X million time benefit respectively. realized to decline from and R&D restructuring will the $X.X be of at

or we approximately net based outstanding. X.X taxes, on be shares After expense, will at $X.XX $X.X per and our million non-GAAP forecast currently million, income the midpoint, share approximately loss interest other

Most results and to difference approximately expense, is our expect of non-GAAP which between the our we thousand. compensation GAAP $XXX stock-based be

thousand expense future. mid for $XXX expect the remain will We the in foreseeable this range

be usage $X.X to $X.X includes Finally, in cash the expect for QX, cash operations. restructuring we in of and thousand million. used costs, to both decline, and $XXX approximately This the range

call me back closing for over turn let remarks. that, With the to Brian now his

Brian Faith

Thank you, Sue.

us, behind will we great when we performance. sustainably profitable future. the revenue improved begin in XXXX year execute did key delivering our will to to am the squarely from was confident profitability see for is foundation With the growth We the on strides on heavy the for the benefits plans our XXXX last year business. know goals. be lifting creating made we on XXXX be a financial building we year our I as a focus

event. to everyone We March at in to Conference I Beach. call seeing forward the know scheduled you some Q&A, let the for ROTH of in that want look Newport to Before in opening we participate are

call I Operator, open would now for remarks. the prepared questions. our completes That to like

Operator

from now [Operator take Sujeeva. We our will you. first question Instructions] Thank

is line open. Your

Sujeeva Desilva

What's mature rate with $X.X -- the here products the first. run million? guidance new matured think of about products you on recover your the product let's well, as they So for the XQ from start

Dr. Sue Cheung

plus So XX% Suji, as or quarter. million each of model it's minus X.X

Sujeeva Desilva

run good a rate. That's

that's then then, guidance, high teens if tripled at guidance indicate would case, of that roughly year-over-year products And the teens would that Okay. new your kind rate.

areas SX one core just XXXk across it and and do which from will So, about quarter eFPGA, the now talk three EOS think per then SensiML seeing help you opportunity? grow

Brian Faith

Yeah.

this we've because OEMs. biggest multinational some at primarily from we higher outlook and EOC the is conservative that ASP, looking SX approach for is in designing And XXXX, have a area the for be going more growth So, again, to that we're been taken a time.

So from streaming TV we're from the the that been the modules so -- product. Flex their from systems the one out market, of they've the Kyocera, primary provider deals for to what from we're and benefiting getting pushing channel. That's driver Infineon really and new

opportunity We do will Secondarily, area coming be be talked because just those a their to SensiML a lot with we area. time move the the forward. to starting of to airtime so the partners, didn’t last continue now second with script about that then we opportunities see long there’s eFPGA. the lot but that today, And give of third fruition will was

in is out one to on one them think of test March, going I take of chips. their

also So revenue we're this in that products. those thinking contribution new from a material will to have year

Sujeeva Desilva

the contribution the in to can you best And Okay. opportunity for opportunity the can specifically understand then, you Kyocera size XXXX? TAM and us

Brian Faith

in that are X million doubling hundred year. X tons the phones that From XX units would with XX and them. each. them on the few units I per focusing a million up We're of in we’re we them, to think number of us thousand be are point phones domestic somewhere this for TAM successful market million put with phones probably and If somewhere Typical they X view, between year. between

launched $X depending we're somewhere around are worth think the Kyocera year when us this modeling be of million between business, on -- higher. So, for could throughout I year, phones

Sujeeva Desilva

X million? Understood.

Brian Faith

Right.

Sujeeva Desilva

the might how there? is gross Great. and Thanks. high Okay. about be level here, takes puts XX the And sustainable guide question, margin mix, nice then last very and you can your this what talk

Dr. Sue Cheung

XXXX. we So, XX% for estimate the think at mid we

to want I that So, at range. model

So, on right the XX mid-point. is

Sujeeva Desilva

guys. Alright Okay. Thanks.

Operator

take We Richard will Craig-Hallum. question from Shannon, now our

Richard Shannon

of as the in just question my taking view up -- for well. follow following thanks Sue, on I’ll at kind on and looking the Maybe of question. here, XXXX Suji's topic Brian

and the the talked about the versus China Obviously, hearables that stuff you think that biggest from and how I And quarters of thought the about two compliance view us contribution about well. could would year. when driver buyer in Kyocera Amazon dynamics? you would being for compare testing EOS how understand help what that you consumer Maybe kind if started much impact we you’re from fit outlook? kind the ago, or you expecting the three hearing did

that versus what compare you you maybe would thought how about

Brian Faith

questions Lot one of question. in

So of them, if I it. forget me on to answer hit one just

the hearables. So Actually back. step let in for me general, so

the recognition, this the use lot outside of voice voice of think for few on So And would that of enabled. that's dollars probably be I driving the that’s case order [indiscernible] the think million dominant revenue year. a of these we

was Previously, were to a China your be hearables. that question, the probably this in more of a hearables revenue. we component lot million was $X alone do $X and that to of That Chinese than in million year to is just going think OEM

this office that we for the of said by tempered back back because customers coronavirus. work going As of call, not there's uncertainty to the yet. are that created still mean, the ours view I we've on

some yet. to be we impact, going there's sized so And just that haven't

for we dollars forward. of know of said, other I are with see mentioned be revenue million new China into other a do to year. products export hearables would moving we're me this some the Amazon. to couple And of being out U.S. and respect markets the That contribution of that to you expecting

to now in solution and the match Amazon. qualified So We CES is certified specs for our suite. shared our

dictates. clearly XMORE. that requirements called all accessing AVS solution passed the has to Alexa. of connecting showed customer my I headsets and ours our from And phone it One of the

still product page the for yet not ODM Amazon. is That on

Coronavirus pushed development is actually this the think the out of China, with that's some I that, located XMORE challenges that. in for one is other is

will drive revenue and land will that expecting fully still for on that that we're us. page So

solution market, the are point we put match qualified the to view a of now and we certified Amazon. specs that into from of Just

Richard Shannon

Maybe SensiML. helpful. That’s question for Thanks that feedback. on a

year customers [indiscernible] from if You of certain customer the talked with Maybe of a us you platform. currently. funnel, kind customer guess of about the then and you still what converting terms of customers XX on give importantly, more or see Mostly And the ending full expecting I platform? can you're if can even into remember base? think I more do some that you double the existing how triple new these or you SaaS that of sense

Brian Faith

Yes, I then going I’m see so to an you’ll reflective what in give year. you answer a and of later near-term answer the be will that think

So putting which emphasis some correctly, more seeing in funnel, because the seems to in sciences getting in these data of bit assigning on a near-term, lot we're are a customers, problem to the we're of a to how now. data AI be space right our lost current collect common our them little

We we are seeing, rate. when hit we have do that, higher a

in a customer, one, In week they from got this the the agreement sign really just gesture needed and in India it’s [indiscernible] be big wearable. for fact, earlier a fact, wearable, to recognition we doing

So get involved it our when we going come doing to that see We're a the we bit, smoother. little guys in near-term. keep

close model SaaS in to do from What scalable near-term. point-of-view. out is the helps fruition the want a forecast things to in build That more we a business

in coming the in that through web, bringing in in coming hopefully make from SaaS process we're the going region, of hit actually specialists to later rates results work do the web year. the of getting to be to some we're some sure better around and So that

different The other get have mentioned sales people's thing that, other platforms, selling. the very I on when we their other and is force microcontrollers can it's

So like St well these this sure part selling solution, them after make and this growth getting to force, Micro for be sales of to are SensiML year's in word trained the very partners our leveraging is thesis it. that and that’s revenue and in Nordic, their plan

a having ourself. not we’re to that So do lot

all to growth significant that those think going result revenue for efforts I are line year. this pretty in

Richard Shannon

That's Okay. helpful.

So financial Brian, Sue over question I'll quick one. and fundamental one to for jump maybe

company about talked CES called well. you talked you at cap as So, for provider company, and this mega quarter service about

open-source kind that do before be here. expect that you other I on I mentioned customers nature has I cost all development that understand some which send this the ultimately, to helped guess cut call? context in about resources this I this from with internal full think And of your sure remarks you especially you you moved and prepared to an able in make dynamics over you to want and move. the year, strategic of talked what customer, platform the

Brian Faith

So, let with the start me value. strategic

result go Firstly, tooling think very hardware fragmented they It's it’s market, savvy in in changes can extent IoT couple the hardware product, people that significant otherwise. developer that in is a the to done this engineers can new to everybody magnitude open-source is accustomed that space, a its not is I market. couldn't tooling our have we to put going that these that are things more a in a to, – easy and engineers. They make open-source what The and to in kit of is increase doing use company generation with side, of And that what increase, be see order with in like place mega-cap FPGAs. primarily this of want start the to design should in a development to a design the we're they help very software. more actually

that, of we all. is like expansion, TAM And with can as development the of company to this help the benefit mega-cap so, a company working they fund feel a

to putting near them into fact, they’re thing hands they’ve distributors not of that, committed of the going channels. web out put future, a that's in And their to semiconductor company And kits the these because some systems I but So and happening. wouldn’t they're channels, out they're be be say going in then is at take these us in getting through the to X,XXX point say would I customers. on last

funnel virtue planning we're by Hopefully that their on so, of reach. and answers their increasing your question. And our sales that muscle

Richard Shannon

That helpful. just Last model Thanks breakeven Brian. was maybe Yes. the like. looks question, of Sue, the detail

numbers completed. given us restructuring is of OpEx after You’ve the some

I sure put -- just together get kind what here, make to want to looks. understand of Just math the your breakeven point just

Dr. Sue Cheung

up now XX X with So, at our level. X level the OpEx per And million level at quarter, million. above breakeven gross margin or at mid mid-XX revenue the about with

think we today, X.X at So, it's million OpEx. on said that call I

it So, achievable. It's should a our And, in model. can be at see we breakeven. that revenue

Operator

Instructions]. [Operator

line take from Research. now. Neaton We will question open Rick Investment Please ahead. is next The from go Rivershore our

Rick Neaton

Sue. cash Brian Hello, did QX reverse for you. any Thank back shared split? and In burn and fractional the you paying

Dr. Sue Cheung

Rick, tell did. mature amount, like can to was yes, you it arrived we even so I minimal level, or it's X,XXX XXXX. But not about

Rick Neaton

at include, you end that back in last program already to cuts restructuring you Does month. August? the announced of announced QuickAI the the In Okay. the it

Brian Faith

had don't at we in what I remember program back QuickAI August. cuts

Rick Neaton

You [mass were the to said, going The module. program? ball] you

Brian Faith

a factored was module earlier. already to do, was That going that that in were we

So back we was addition last the talked year and reductions just the about month what with QuickAI everything last had module. in in middle we taken to that in the of

Rick Neaton

QX, the what product percentage In of was revenue SaaS? new

Dr. Sue Cheung

to XX%. Close I will Yes. to. say close

Rick Neaton

you for Do know Board is Tom if Hart? be the going a appoint to replacements

Brian Faith

a We plan don't do currently have that. to

Board right I was need company Chairman prepared with on that we said the Mike remarks. I of the the to as to have. think were levels we for be appropriately experience the operate And to and elected Farese As Board. sized

Rick Neaton

for assuming revenue of ask some you In in actual gave for the to want outlook, SXs? any you high-teens. revenue the you -- sales XXXX, general or about that revenue Flextronics outlook are from questions to outlook the where I Infineon Okay. mid you targeted

Brian Faith

we Yes, are.

Rick Neaton

mega-cap assuming service from you provider? the Are revenue any cloud

Brian Faith

amount. yes, we are. But huge a not Yes,

Rick Neaton

kits. from get you some development revenue So the will

Brian Faith

than Not the that but I'm for sure, on for year. more counting

Rick Neaton

Chinese not Does the ODMs the you XXXX on? said of target assume upper that for revenue from OEMs conservatively your revenue the you’re counting end and

Brian Faith

little has range, bit, we end when as a we as last much had upper forecasted been time of what but that spoke. not The that nearly

Rick Neaton

product of SensiML? XXXX new from percentage What your are assuming Okay. you revenue to in target come

Brian Faith

If we get a the year, them that. think would target for that to be be good After XX%. this at I

Rick Neaton

talked product you talk Is in remote you product from past? service streaming that control voice customer. that about the the When about the the

Brian Faith

remote is voice correct. It is. That's it Yes, controller the enabled.

Rick Neaton

your you And assuming initiative? that in range XXXX, set license as you in target. general for revenue the from outlook any eFPGA Are your

Brian Faith

year. the for Not are. we Yes

SensiML. as magnitude of order same the On

Rick Neaton

Okay.

Brian Faith

[Indiscernible].

Rick Neaton

an your semiconductor [indiscernible] relationship having coronavirus on would properly that however is effort? or pronounce effects with Is you

Brian Faith

the Hangzhou more think does the should to which in time about even in is impact we they of back spend folks. be to them. them. face the located. our extended Cisco I going with And office certainly, with fact think strict the was off we're that people fact relationship contact have and with time doesn't when any I Alibaba had It province to work, reduce are and It We're where face

don't think at the relationship from all. that, it’s So, but no, of as the I'm far sure point so I view impacting as goes, schedule

Rick Neaton

thanks Hey, and appreciate Sue. Okay. lot I it. a Brian

Brian Faith

are any questions? more Operator, there

Operator

remarks. questions like It closing you. at appears Mr. or there’s turn to further this time. conference back additional no Brian, Thank for the any to you I'd

Brian Faith

you forward when speaking for So, support. We thank Thank you look we to in with you and our participation continued quarter call you in bye. and first fiscal again today's good report results May.

Operator

This Thank you call. concludes today’s participation. your for

You may now disconnect.

QuickLogic (QUIK) 12 Feb 202019 Q4 Earnings call transcript