QUIK - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, good afternoon. At this time, I'd like to welcome everyone to QuickLogic Corporation's Third Quarter Fiscal Year 2020 Earnings Results Conference Call.

As a reminder, today's call is being recorded for replay purposes through November 11, 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

call distancing is practices, Following locations current doing social this today. from management different

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

refer more in the QuickLogic of detailed uncertainties please risks, assumptions risk could will with any For no to information result we filed differences, future those factors the non-GAAP that new discussed reporting periodic of of or forward-looking call recently update respective QuickLogic's statements any their in or SEC. In financial assumes most and reports discussions dates obligation to the be as information, which measures. speak events. today's

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

today's be non-GAAP that and may Twitter channels account, business. financial QuickLogic of posted our of as table be also to information Brian. earnings IR A website, about information, page comply obligations IR distribution to at prepared will call channels Facebook under the the to call. historical web over an these use corporate provides may on today's with like page Please shortly on Regulation conclusion and deemed would Such disclosure now call page, page blog, I FD. QuickLogic's the posted material of its of uses We made LinkedIn information copy QuickLogic and note, turn company updated current the data. its its after have web remarks

Brian Faith

all thanking the Thank on QuickLogic both you, again COVID-XX our the third you challenges, Jim. team results fiscal today's this personal serving their by been presented of by thank has call. despite afternoon, XXXX our kick-off quarter for Good business I the want the as continued we for and everyone, In conference restrictions. work to barriers financial joining face call pandemic through and focus resiliency innovation extraordinary. and customers their

the above course company, our for continue beyond success ensure As future the new and team chart going is we to to the of QuickLogic.

marked year our in quarter than that step ongoing transformation third another The ago. more started a

and markets this IoT, We we platform results of the have focus diverse the fiscal deliver only a primarily to These product a evolving in military change of will industrial serving in a improved see include customers confident large set remain customers. serving broader more much been being consumer financial and space. consumer, company from company I our XXXX. markets set

discussed Our the in from headwinds third pandemic last broad continued COVID-XX quarter revenue impact reflected the with call. associated the our we that

in revenue bottom better some than from changes low as XXXX. to and expect expenses good into the of forecasted want last the see this mix, in our However, our to we of now product outlook strategy. continued call. higher I the a better will to shift and importance The that announced their provide full gross with additional taken and margin around performance. in offer context trajectory and couple improvement resulted in news decline QX discussion our sequential currently the much favorable Sue earlier line is the operating months year, a later proactive the initiatives point we

to that Reconfigurable we marks actively Open Computing, becoming announced remember open-source initiative. Logic makes investments QuickLogic of customer the stream; that company a This FPGA a our and base. and leverages first toolchain. with op/ex is technology our project June QORC, margin in grow will or QORC for industry more not fully a the IP Programmable it importance revenue only the significantly equal a to You to diversified contribute high QuickLogic available to milestone larger

RISC-V, we've is received open source time. for drive Since technical such which the feedback include our have AntMicro, and overwhelmingly partners, a co-development to time that initiatives this in ideal initiatives strategy press customers, this forward. Google covered from long positive growth open-source strong the the announcement, and as With our very potential

QuickFeather the of XXX right fact few remain development more open-source We kits months. shipped XXXX. we kit more we our the of have X,XXX business pace path realize is roughly we and in accelerating, will orders to solution are a our The than convinced goal a dev our offering the way; by objectives. Even customers are our way to is drive of just on telling that end

SX in the kits EOS those these as year should our with SensiML that viewed into of kits products dev real them. actual next seeding development them should market All as turn be and volume behind revenue real take with technology and they drive opportunities

into hardware who our hardware take step that FPGA approximately was platforms us those SoCs. and of we enable software, While are it and we XXX,XXX sold to, traditionally and to proprietary, engineer, tools engineers simply let's design types say To resources about if the just those ASICs embed develop the technology. patented of think are that type US IP there we can verification customers of this a that sell our our to in further, understand software to have invested use

the organically, hardware in Google to understand alone Google of making having number complementing can this R&D filling the magnitude the technology on to, for of The we source. the the towards applications. the we to sales. a wide What us SensiML used before. recent value this position the so, that put IoT get all use, engineer. ETH is in an cost-effective and by ago with for silicon hand, open launch reduce easier Group our Fiscal can't and On there which easier world, forward great we the tens range have to to expect the groundwork meshes high does well of do our their solutions own of use undertaken very will a being in million is joined Hardware never Hardware broader for AutoML takes own of few a August, technology moving And also leverage, to niches RISC-V classes It in it completed is years make engineers evolving manner. of path year, the for the our fit about probably the AI primary the most knew allowing one multiple our development commitment be thousands. in such more about developments QORC software other Open it roadmap to the order before with claim to problems. initiative. By our of and solutions and seen Since doing and - some our increase develop collaboration best QORC quickly two cost Starting engineers talking accelerate efforts particular In us by QuickLogic year numerous we have exposure we which of our what to helped on software tools, Zurich. a we're are while next our June, derivative development Group, by of and Open of we've have community a profitability SoC in take has catalysts end. to XXXX ETH sell would eFPGA-based our in we technology eFPGA eFPGA - laying In both furthering

by SensiML's our lynchpin machine AI offering the called of source other of Google's source network is Lite complement Toolkit each Lite execution powerful open a from tool. Together, Another for with with use framework, of Microcontrollers. ease learning open the TensorFlow algorithm TensorFlow Analytics the they neural to integration initiative SensiML

fast, performance enabler running revenue sensors In faster be the in on the the Analytics we creating deploying The using quarters. up our IoT AI than to even productive and combination MCU STMicroelectronics. kit flexibility, edge IoT sensor methods. for AI-based traditional five a for partners done enable times pattern We seamless, SaaS could now enables recognition Toolkit and enabled devices. by developers IoT This key complex more SensorTile.Box most algorithms the valued development and from It announced and growth customers. by effort of important to SensiML this time-series be excited are what August, workflow openness, for algorithms and device for a is will our coming

are STMicro. example the very participated speaking in Conference Partner yet the ago, the with providing large-scale spot at another We weeks STMicroelectronics Developers Program. excited the possible recent SensiML opportunities two ST our of membership with relationship about through growing a

the let's US-based of quarter. with X includes Now move discussed testing study product at our companies others Skywater, a and a LinearASICs, last that I of consortium research prominent COVID-XX part for collaboration to Phase that the solution ARC, university. is of the

platform, solution while study and built an approval. first the Institutional the Review expect AI go this there software Board QX before others several we hope to are that that And We conclude within medical for SensiML using the is follow.

with our you go the recently please our Further interesting systems we for work the last source of be our IP targeted getting some with Where home arc.health successful, late even included exciting announced with more open TensorFlow is testing evaluation could developments FPGA in Samsung information. to interested a for If devices. is XXXX devices initiative. in week several If Lite maker converging more focus, We are Foundry. shipments. is computing platform are delivered to solution, this how things supporting program

technology announced designed X the achievement year of the on was current ground First, ArcticPro available leakage. a - of generation on FPGA, a This - third process. FD–SOI with up Samsung. embedded boost our more delivers XXnm now X significant is that performance from with development we standby XXFDS than ultra-low their was Samsung's culmination of process, the ArcticPro ArcticPro in

was with IP Foundry the IP as QuickLogic Advanced into the accepted completed, a Program. of Partner member their development Ecosystem Second, Samsung

This on exciting will believe the is engagements business. from have months the we to royalties. and to an our result, to QuickLogic share immediately. their this development key a we understand licenses wanted lead to we that future last transform I as everyone few started IP events importance help As context

a we business our of quarters are X to the After Turning environment expect current the seeing in existing of finally and to fourth improvement. parts several see first difficult what quarter. XXXX, some

business. start with smartphone our Let's

XXXX. for highlight Our is a momentum and is the phone market accelerating, definitely

discussed up second from reach have XX the phone expect by including smartphone realigned as the production remote-control number to first end, providers year microphone the an least phones next program, year up test of our we We previous at we several license X launch wins We and taped-out of launch locked eFPGA technology the XG geopolitical-related total during win. the using this XXXX, start phone full chip. of technology efforts to of we at will, we to has currently kits quarter. Within quarter. calls, formally submitted risks, of will their half our a to the of much one new goes smartphone business, market leverage prior In achieve first all before our it we the solution. from certification. kit half in and the launches should developments the largest on hearables certification this market, well, Amazon IP eFPGA our products our If see expect of yesterday, official any the IP early voice-activated In developer year. revenue lead end engagements our for one These our stronger and Barring customer. QuickLogic's could with always-on voice-activated these recently

controls current than Our EOS of remote market. year more activated in enable operate twice low-power battery to will controls platform SX with voice of life, based the that one remote almost

revenue revenue incremental strength in related again work issues temporary see next We challenge, our the civilian in In being several expect The we due particular, sector. news COVID-XX particularly sales quickly remain projects was declined revenue seasonal certainly year. to to moving of as to expect mature QX aerospace segment, snapback doubling. OEMs in QX a is mature military-related certain are for even starting the impacted, with and our with QX exceed expect in positive delayed. to a nearly we sales that QX. typical In

to until other hand, is the market coming civilian On rebound. sluggish air remain begins quarters travel the the market for the expected aerospace consumer to

While is in mature we best at with current uncertainty belief forecasting difficult, will with sales in flat be couple compared beyond a of our quarters it markets XXXX that the is continued serve, XXXX. several

Sue, XXXX Before to pathway for bright. future handing our to the is financial the is want place, call in reiterate better that I and performance in

related financial software like Sue? our we our improved fiscal in and are accelerated traction to largest to as the our world. Sue call of I over We the now some QX business, our their recent performance programs, source related as the in quarter customers beginning improvements see around in the with well When product and the combined discussion of and XXXX. will financial turn to in for remain with outlook. fourth confident expected to providing deliver platform full a open I into initiatives feedback are performance growth would companies new

Sue Cheung

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

the third the and QX was the the XXXX, quarter in civilian revenue QX million $X.X million impact third our both and the QX XXXX. $XXX,XXX. the revenue XXXX revenue of reflected $XXX,XXX of fiscal with Within of aerospace new revenue, XXXX. third were with million. quarter $X products second market compares quarter in $X.X global of This in pandemic. of sales broad compares For in quarter of This the from

the million product both margin with and $X.X The and with Within from and and income, with PPP operating were or million operating QX prior Non-GAAP we the in with $XX.X closed $X.XX in greater in million to compared Non-GAAP greater This per approximately with third achieved QX QX net exercise adjustments, million Non-GAAP the were and loss the and $X.X includes XX.X%, of year. who quarter loss The million, a loss loan QX were quarter year. other year, mainly the $X.X from expenses, $XX,XXX compared improvement share in improved periods total XX.X% was compared for QX and future. restructuring continued million, XX.X% last SG&A in same quarter four low in or quarter. $X.X for to in the million. $X.X QX in operating of $X.X QX million a million cost we due cash million QX to our expenses this The last share these third XXXX. to expenses, end $X improvement the $XX,XXX effective last million, to and approximately lower and taxes loss gross R&D related write-offs, and in software the in The two QX. million, last of on-going $XX,XXX, reverse Our both in in the in mature stock our calculation and quarter million in of in QX $X.X proceeds July out the asset The net for In accounted operating for still million quarter. other was share margin The net of $X.X $X.XX the million periods million, the control of net or X, for per representing per $X.X foreseeable of last $X.X our and compares R&D of XX% had $X.X quarter or and effort. the an improved total to factors: than each capitalization third compares QX million net XXXX. $X.X $X.XX SaaS that gross $X.X revenue with overallotment of of costs lower at cash balance sales. in at $X.X X, customers year. when quarter, operating QX the milestones million expenses in charges restructuring and in third the QX in non-recurring year. expenses factoring Even $X.X development split range of non-recurring in QX share. quarter of last the This expected due updates in with two the same expenses compared We per were received believe estimated of last primarily about remain $X.X period charge a the and than will December. was that QX QX a the compared was of year. million, $XXX,XXX end $XX.X last reflects from SG&A was

this of On revolving line and are cash year-end. applying draw provision forgiveness the for of The from should loan, in before PPP balances $XX the include complete process credit. also the we the process million the

of XXXX, fourth At for for which comprised X, Now January $X.X guidance on total will minus the believe the is or gross will minus $XXX will plus QX, fourth the moving revenue XX% plus from fiscal expenses margin In mix, our QX the Based product. increase The We plus on our an approximately QX. $X.X or quarter roughly minus quarter in be represents $XXX,XXX midpoint, million X%. non-GAAP this of of million, and XX%, will million, be expected new product be forecast thousand. non-GAAP or approximately $X.X revenue XXXX: revenue of to mature end approximately XX%. operating

and we on shares expect the At between I range, forecast $X.X of million, non-GAAP and $X.XX we loss a our results difference will net share Most our of per approximately expense. is the loss stock-based to roughly GAAP million based outstanding. our currently or QX the non-GAAP midpoint few As After of net improve compensation and XX.X this be interest taxes, expense, earlier, at for next midpoint, income the be normalized SG&A should R&D quarters. other $X.X level $X.X to million the million. a mentioned

comp quarters. the to for few of in next We $XXX,XXX range expect be stock-based the

in $X.X the cash and we decline XXXX decline $X.X be expect from gross to QX further Cash revenue usage over million. of of expected QX, range to to the course in should and with improvements usage Finally, margin.

balance the to to positioned well closing remarks. his for believe in sheet, now achieve are turn Brian call the our we With let me growth over our we back strength With that, objectives.

Brian Faith

Sue. you, Thank

transition we achieved. team accomplished to As be I context what we - on - pandemic look QuickLogic prouder could not COVID-XX in has back have of our what particularly the the of

business, the much execute that We opportunities structure, the and in of just have have end we clear but up it for source made on what I initiative, to these I place, right of we also new our terms questions. Hector, profitability like for prepared not XXXX QuickLogic. evolution are resources progress the That open re-aligned the In opening reducing extraordinary cost closing, is our significantly again the like tremendous now have With the having on their during continued continued would thank before many of the times. would open in our and challenging company, more call for attainable. making to support to remarks. completes stakeholders

Operator

[Operator Instructions].

comes Your first of from question ROTH. the with Suji Desilva line

Suji Desilva

end sourced there customer? XG Or for smartphones, on a year. models have any First single question, And from you? XX now the Are the Brian, said phones, those the higher out? is branched opportunity you by all you of for the content

Brian Faith

if it, was you guy. question the was probably what probably haven't same we the XG? another would it's if so announce We assume could but disclosed it And it's customers, more on or X one, with

Suji Desilva

Is there XG you content opportunity any go higher phones? as to

Brian Faith

different it's do not materially variants we've different And functionality them one more already what been model, already, of we the from to but combinations. the less actually current current of no. In sell selling or It's them. to

Suji Desilva

And the talk Brian, of Perhaps Can then contribution timing revenue how you a can model to the you of you? for talk revenue being you at the of calendar contribute can 'XX? it So the there? 'XX? for switching to about initiative. over, QORC, driver the getting end year, big in the big And get the profitability to if product it in Q-O-R-C percent Okay. about

Brian Faith

Yes.

can't I next think be the year actually. impact to understated

that half, this end - think dev of kits. we getting until What hopefully quarter, from some year just next of dev should with is we're second revenue turn which designs next if those looking and about X,XXX it's contribution year, dollars are kits, in dev for current to the out, of this to product or be thousands in So that now going volume. SX $X,XXX at of kits in the terms go kits dev into whole percentage fact, all about actual

range device I and next the wins for modeling real transitioning side. production on think to we're somewhere over the in year. those million-dollar That's shipments few

have On that open detail the certain the IP licensing source in fact side, from next year, are should things related to there not IP we the licenses enumerated that initiative trigger are driven SensiML. can other open chain, from the And throughout supporting year, QX is fully start thing a layering tool the next we year time source probably frame. that this starting that then onwards yet

for pop dev the version of question transition cases, then of how idea somewhere they to next last in $XX,XXX with QORC? about, to over kits to dev the QuickFeather the the free the year not all them that the we source. in from subscription. So SensiML, the on natively SensiML dev just tool, SensiML think the anticipate next few And of should good to the that of as some to kit dev - a open get the we ship yet a really get expensive started the initiatives SaaS in was start to kit. I have runs very transition there sales, that on growing specific planned QuickFeather, dev bundle that about we're normal that kit We've haven't year version, SensiML And your on with of well, kit. range. to publicly in talked impact more use hoping but And the then this total once quarter we already licenses talked is terms awareness year we SaaS again, value a throughout And

Suji Desilva

Yes. you help get To Right. profitable.

Brian Faith

line several number, a giving a fairly worth specific dollars' sight. we that have without good I'd it's million say, So of

Suji Desilva

of who're to a XXX going portion on And understand, X,XXX. centric? would guys it Okay. Antmicro I'm Google is guess dev with then And internal is kits they you are Or those Android-based Europe as that devices? follow-up I also building are these Google? just Or U.S. getting Asia The help. just to geographically, penetration trying well? are last QORC. one there third-party also, to that

Brian Faith

Yes. kits Asia to is stocking We dev for most the do distribution uptake the part, our North selling been sales in and that domestically say most in Europe, and but in America. them that for I'd are have the here part, has network the U.S. the

are As on end it them, a of different far totally projects. a dependent the as driver kits, names, for there hopefully specific That that be without dev for customers saying large but to, for very compute-oriented lots around goes in there revenue fact, going into spreading that. next not will customer, year, us

I many - industrial marketing diversifying IoT good about are into of the the really beginning in take this this is customers. And I is example the where in to customers, getting that. new and think in customers products fitting different we points strategy We one of that fact, It's, of tried consumer terms make customers. is a

Operator

[Operator Instructions].

line Martin the from Oppenheimer. with comes question next of Yang Your

Martin Yang

My first question capacity is semi chain. the in constraints about the on foundry supply reports

constraints - the foresee the X And seeing So next the getting quarter? the are third affected capacity in constraints you in do by yourself - months? you and

Brian Faith

question. good a That's

now. we do have getting and the we're terms looking that with was in anything using only to stock, first both that. don't of So saw are we goods, need the lead with packaged constraints a year down, different supply hit from that Martin. and the fabs through in foresee and we our think, I our matching shut area. customers We times side on houses. got set try assembly we fortunately, I And wafers buffer earlier And capacity COVID with to and the lead times places in were do the chain the when really

foresee because issue. with really have supply I So chain. an we that think don't good And of part relationships I the is

is have The other had we wafers, we any wafer pretty carefully on to new manage we issues. haven't had we sure make inventory to part have do that hand. start Where that

constrained - the are perhaps not that ones nodes are are on. process So on we're ones that

Martin Yang

Got it.

lead And us to that, you products? can so mature or on time talk cyclical your remind maybe follow-up new and for the

Brian Faith

typically So give to the X-week lead customers we time range. is that in the

to typically, have go a that do take to forecasting customers about can we a it's stock, further, if Sometimes, buffer lesser out number. we we But to and X weeks. decide

Martin Yang

Last for me. question it. Got

us things looking end us can our walk or bigger through reach that the help that the us XQ to at of could lower end push range? So guidance, will the higher drivers towards maybe you

Brian Faith

Sure.

So at have shipped time, orders booked for quarter we context, all this this point for did in quarter. we and last than of more

the the the So the get larger how now they driver okay? are this that, this And the for top just EOS see On through, of frame So obviously, to with we for we that's view have see, to do do MilAero, most is SX in guidance? part, smartphone. quarter, mature orders. a big those typically laying nicely. We

that's smartphones more and driver into shipping in seeing this we're that. so earlier, the quarter, for mentioned I As

as that play. Not big the quarter. separately, IP that the initiative we'd meaningfully contributing point into I to start start to enough a of to the this in that to coming terms it midpoint. drivers, associated this the to smaller software So for have see SensiML think where bit of ones Outside little keep up revenue but captured also levels, with pop at And eFPGA ongoing breaking higher there's is we you. well those I it business there have just as we in we that then main but need going quite quarter, SaaS the

Operator

Shannon of line from comes Your with next the Craig-Hallum. question Richard

Richard Shannon

follow-ups help these wins of a new ones most been in quarters? this wins think the in? you versus more out Maybe Any up you questions a Or from Maybe of year? let's and this delve than prior next couple forecast the here. can future? fill sense couple the some phone of of here. here And how aggregate about going the on into customer the you've does of Do this see like volumes

Brian Faith

phone First throughout phone of models we our visibility and getting into last year. We well with We're this your the next one all, through see roadmap next now answer going intercept devices. their I'll would first. year

good So year rate with up. of terms for was about in as year us, to feeling this go same than starts being that larger really the attach customer revenue next especially

volumes, market as also for customer volume this I the is far both fairly phone how individual As the can and address as niches how do well. they think can good looking you at Japanese then phones

probably more the X going phones like are volume to be niche units, bigger XXX,XXX to ones are the So closer million. each,

would do in units several So I thousand you probably aggregate, hundred average, that guess, phone, weight a how in it's area. that

If out. you average everything

Richard Shannon

helpful. Okay. That is

you're for In here. think as about a see past to like go do quarter, and MilAero. here, with this is calling the stream be we on fourth big How you mature see QuickLogic it. MilAero, revenue companies that and is Obviously, going product looking Let's other lumpy. out you How quarter? sounds as you're it step sustainable

about how think sustainability revenues this of So do we at level?

Brian Faith

different companies in not. So it's there no the sense orders. is that One it's there other the quarter, we're than next are in lumpiness - I think In quarter, the here.

in probably different that we're pretty that sizable. programs around military we Fortunately, are or have X X

same so not quarter, good. is all the And they're which lumpy in

flat which MilAero I year, So for business, that's next why XXXX, for this it's the is we part of, think, year. earlier, probably about were mature saying

fairly like But of some our longer it an quarter. look on product in is They lumpiness Europe. typically from If that mature vacations. of little steady. They quarter QX as next of probably take in view. is outside point the is business that, There buy much side MilAero annual soft a of QX it's at don't in you a because year.

there's than But normal quarter of This that, very little of up to military it's purchasing little quarter because program, a extra little last was lighter a because this fiscal on. an And trying outside we us. bit specific a year of they're in anomaly is a for thought. stock bit fairly

Richard Shannon

that Okay. color of of make That's You things line good regarding the please? Can understand and sight? you worth on. little a product help perspective. introduction you you development us of by helpful mean you one for Can of of In what good you earlier several million said dollars' had sight that business questions line us QORC, have you cycles helps that other more there, good and comment. you give understanding have

Brian Faith

of line we're that value side away the side. giving IP both the had, in was show the of to I referring too as is well sight to that terms device contracts in software be that Without Yes. of as much, there different there's the negotiating process

So we're with that, I that through and sight. those - level, line deeply said at why I we're see that's people, contract but engaged we're and going of I - the that's

Richard Shannon

fair for That's question SensiML. enough. last me, Maybe on Okay. Brian, X

of SensiML thoughts Again, level seeing And You from that license of sustain? maybe And it this on have? characterize fast can kind higher underlying grow said how help if you a you're grow? you pop as your that? the SaaS can does in quarter. you How

Brian Faith

Yes.

talked our continuing grow. users. about deck, That's we dozens think I to in investor

give broad think We pretty yet we're that have we really that set to going some are STMicro, a supercharge launching growth time. soon initiatives access couple short a that I a partners, to think, which are, here think ones other period going I of that haven't very users about X of that of actually to talked in of with I we is

into lower only but we're fairly functionality is version transition which tool. dollars here, first that quarter, the those So will cost a the of limited a few a is that hopeful hundred

to we into accustomed get version the this they As capability plan of upsell higher them to it, asset.

We're that consumer maintenance-type few of or contextual expanding of the right use negotiating midst ones in classifiers where the application. the use wearables, it. gestures quarter, a types they're on a already, more looking So IoT on they're larger this for SaaS different at predictive to now deals cases are like creating to of continuing

we Lite. well we to a net. people can creating TensorFlow data flow, So point cost fact the think, of that host to into plug start Lite us to TensorFlow neural with now, the slope that are access to hopeful tiers on-ramping because Google's community a next have year. can't that have integrated these I is increasing have well importance view. science partners. in very workflow initiatives going I I the continue we of understate think now customer those going the am gives of didn't we actually Google's the a that to of that where into And access tool used higher And before the that with we're And I for also from

that benefiting shortly. from And so to be going we're

Just [indiscernible]. terms the in of onboarding

is lot bear actually SensiML starting initiatives So to out from I a fruit QX this QX that of get going we accelerating really for some groundwork in think in these quarter, was late as but more broadly.

Richard Shannon

That's Okay. helpful.

Just that that with per one last haven't to million an tell out I want quarter. probably still for heard $X roughly as quarter? different, $X question but you for appropriate me, level called to just view last I breakeven confirm quarter, would the you for that anything me In Sue breakeven here. million breakeven you the think

Sue Cheung

$X question. lower A for Richard, $X Yes. $mid-X before million point, revenue thanks from it million. to million to the breakeven does

So mid-XXs be more can come running X.X lower of level $X million breakeven in, revenue if $X level the million million it SaaS gross achieve is with IP to the we carries and close with million, to revenue can Easily than our have a level. lower $X.X even our high margin could to even at increase be a it revenue - very - margin that OpEx even quarter. license at per

Operator

question next the comes Rivershore. Neaton Rick from of with Your line

Richard Neaton

your SMIC, they costs announced the are in another an how and paid fees. collaboration, you with once You eFPGA some foundry, license paid With this? Samsung

of Was it? cover this I'm was wondering you So it? the how covered. cover they joint? collaboration Did cost Did it

Brian Faith

part been on which of We OpEx of side. we've for the year. is the the all better it, Silicon That's part the covered Rick, reporting that

by the we're using so of adapting have our open folks' simply here domain, that create the can lot us source FPGA tools. our software the a other R&D they to source source software open target this And open The a mix emphasize other of all for We're because is that that proprietary element we into everybody: initiative, want we tools. of QORC, then lot R&D moving that into the eFPGA, key leveraging these tools. our software of point product are them including of to I and

to everything much ourself. is that proprietary by we do if didn't We lower do But to to able did were share actually ourself. than of that, Samsung. from point OpEx did answer the the your cost, that's So with cost view because they we did had we not a do a this question. the whole short porting the had development question Silicon Like we at

Richard Neaton

you that would sell-off of direct would their licenses be any with And that collaboration, this Right. customers?

Brian Faith

Yes. It would be directly with the customers.

their So basically, week last had this at we big developer conference. launch

model we did by do that the been certain We would press interested had so since touch And folks with foundries. and The license those folks Foundry, direct with in that would are with other wafers we We've operating attending. as the we deals customers run release. them, have from inbound would got a just customers. well, get in typical Samsung of these then is directly royalties which

standard provider, the Cadence IP somebody you which typically, with a cell If is and foundries. providers of is a you're have Synopsys, this a or not IP arrangement like type

Richard Neaton

plus XX% to Okay. With works your To located? minus million? QX there. out a a guidance, $XXX,XXX is Where around to or on that opportunity opportunity that get $X.X

Brian Faith

To $X.X million? get to

Richard Neaton

Yes.

Brian Faith

have midpoint. Those in come high talking that into about end quarter certainly I well if are like into said about when the X that those that, initiatives could of the the earlier, us QORC that year. baked could as asking Well, the get But other of hit in. next was things not to the we're guys that for the needs

Richard Neaton

the license what next quarter fourth year. about last of that this the conference an QX or an you your as spoke you During of something in possibility of call, in talking about or eFPGA year? were X ArcticPro QX Is

Brian Faith

that large next about at I'm the some X The half first would in year thinking point. be of Yes.

Richard Neaton

The is for submitted hearable kit customers? QuickLogic's name approval one submitting of of in for services, to or AVS under being AVS that that your you're use

Brian Faith

one with the submitted is for been clarity, the certification because, testing. just And page. It's so It it their on associated under has name a yesterday our ultimately, it for web past into engines it's dev Amazon kit, lab's tense. we that submitted, was would and be

Richard Neaton

Okay. talking customer a kit. kit, had been about In the past, dev submitting you designer a

change SX? this submitted something Could a So be in else is that. the using

Brian Faith

change, a story, it's of not just It's Rick. the part

product semiconductor do is put that, their own in. make the dev the dev I've both, past, another finish use is testing. we'll the OEM And for that software gauntlet that through company's be but So kit. we of still can first awaiting about sure ODM kit to customer enough between that difference they and the before have good It's that's an them to the to and plan, like the an a for go in they talked

Richard Neaton

of into your of year? sight How even that line of some line next half good does of for You said you customers next first for the year. look sight had

Brian Faith

term. half, second it's the nearer than better because Well, obviously,

Richard Neaton

Right.

about opportunities? converting, are half So talking first most of the you're opportunities they

Brian Faith

that I the half. to And Yes. is start my first actually, want strong. focus year

Richard Neaton

have any you - now bookings for right Do quarter Okay. shipments? for first

Brian Faith

customer. have do already, bookings yes, for We for both and mature smartphone

Richard Neaton

they are third bookings quarter your were? And what above

Brian Faith

far I don't that in was call, think I'm bookings. it going Rick, but to the go

Richard Neaton

hopeful that Okay. last shipped SensiML you're of smaller licenses Is and rate about you in full-service talking full of spoke what year, you were into number - those at opportunities of license One Earlier question. license QX? a where fees, conversion the at How in your arrangements. trial is present? were converting going a number a about

Brian Faith

funnel those SaaS. are over Some converting of to existing the the higher-tier

rate, satisfied conversion on level. improving deep enterprise not our do analysis are that the nature we in those in in and immaterial of gone do and we've that we're can better. And to pretty yet pretty we think Some actually implementing start will process And I'm that. with what can SaaS through now, to fact. the I of a

So be to some of you'll bit marketing will contributing see towards from later new that. us the initiatives, out a quarter, this come undoubtedly

think will but and going do better. So I can we it's okay,

Operator

would call like session, of have for closing the Ladies end and gentlemen, I question-and-answer and back Faith to we the Brian reached to Mr. turn the remarks.

Brian Faith

Yes.

like thank everybody joining us call for to I'd the So today. on

Again, be February, releases you out I thank Thank and we'll you Our scheduled time. talk support, Bye-bye. and you. your putting next for believe, is for later. the exact in call, to

Operator

today's This concludes conference.

time. You this disconnect you Thank your your lines participation. may for at

QuickLogic (QUIK) 4 Nov 202020 Q3 Earnings call transcript