DSPG - Earnings call transcript Q1 2019

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to today's Quarter One 2019 DSP Group Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today, May 6, 2019. delay, to now presenter further the to any over conference today, without I like would turn And Tali Chen. ma'am. ahead, go Please

Tali Chen

Thank Financial call, Marketing Chief Mr. and Vice ladies Quarter Ofer XXXX Welcome you. Elyakim, Tali Call. First Officer. have Good Corporate On Dror with Conference Chen, Mr. today's to gentlemen. our and President also at Levy, Executive Officer I'm Chief Officer; Earnings Chief DSP we Group. and morning, us,

for like to call, the for of would of design about optimism you about the that thereby We making smart Before obligation traction voice and statements the and conference our as to the revenue cameras I leading pipeline we accounting certain engagement a financial the our and quarter remind during Orange this segment for during full initiatives, the well second we forward-looking year technology aspects XXXX update and revenues begin, Unified total forward-looking Communications XXXX, increases. wins, and growth these securities statements. of driving including gross SmartHome global company U.S. assume including growth second be tablets, quarter Communications, XXXX, will Unified remote margin projections transition including to controls, guidance initiatives ULE and about two-thirds our for SmartVoice no market, in with and our optimism some

reports risks filed. and Form discussed please XXXX the we that in about herein, factors SEC refer forward-looking and information more risk made other have XX-K affect the For factors could our to statements our

Ofer Officer. the like to floor turn is to Elyakim, Chief our Executive would Ofer, Now, yours. the call I over

Ofer Elyakim

results press Good by you that like which us outlook. begin our XXXX. everyone, would plan to comments release, our commenting with for morning, providing Dror I our will we reviewing provide opportunity the second and while, for Thank for the you for and our hope progression joining to earlier distributed quarter context In I thank the quarter, read on our Tali. today. you, a of outlook you first detailed financial had business short the on today. and results of

our quarter We OEMs first of most on XXXX. on results of the impact the with past a SmartVoice metrics. in number versus quarter SmartHome, guidance were our performance. quarter of our first Communications above importance long-term our ahead will Of ended the with X% million, are total have which slightly our positive midpoint We financial guidance wins of the of mid- design business representing and quarter announcements first range, segments, the which of product this major with an pleased significant and Unified fourth of $XX.X XXXX and were quarter increase and new versus revenues X%

our strengthen respectively, initiative growth of ahead forward. company business delivered overall towards were solid year-over-year more are efforts of an level XX% an our versus and $XX.X drive to growth driven of Operationally, Our at Cordless. transformation the of outstanding XX% our revenues. million represent revenues for XX% by results mix, our product performance and the in value of sequentially. and increase XX.X% outcome of by end our of XX.X% improved gross proposition, and top-line margin leaning accounting initiatives with going model guidance guidance made performance an numbers and of results by our reaching These non-GAAP team our total GAAP a and These driven our the high improve

Nevertheless, demand growth solid we inventory driven for that for near-term our half year. total reiterate company. account two-thirds the segment, for across overall we growth the approximately Communications positioned record second While to our in role our this do we expect softness expectation momentum expected an revenues by position the And second and revenue the in we for we we Moreover, about initiatives pipeline products, are in thereby in our growth increase rebound our to customers. initiative a margin confident us second for half are due well to XXXX. growth instrumental playing for of project SmartVoice engagement of see Unified revenues believe in for full driving of revenue our sequential year, quarter, the expansion and well adjustments overall by

Now, with on to segments, the to update move like starting business by I'd SmartVoice.

mobile reflecting year-over-year excited the quarter, of sales to Oppo, relying top OEMs of milestone. smartphone, low-power quarter, launched SmartVoice hands-free technology and that wake-on-voice one a its assistant. the of XXX% a of from During we we technology sequential during generated approximately on strategic share $X.X increase achieved its SmartVoice increase We're Breeno million revenues products, or Reno another our always-on China's smart of for key X%.

as a selected education for noteworthy such by camera SmartVoice franchise. including number wins its our launched new are technology. Ultra smart evidenced launches, connected continue remote its three, everywhere. with of supporting tier strength an and entry new SmartVoice represent control control, SmartVoice addition, OEM for the into remote each offered SmartVoice for voice diversify solid pipeline engagement leading high-end solution. control. the Moreover, a hands-free brand, product two, TVs. X example Number leading Chinese leading smart the In a One SmartVoice is America's demonstrate Voice-enabled launched solutions. product controls solution a to market smart remote our based tablet XK These we our depth, Number its opportunity of OEM diversity camera a our on our our Arlo,

voice-enabled ones for gradually units voice remotes million evolving advanced is year. remote push-to-talk market always-on reach the next XX estimated Voice-activated activation. are more fact, supporting controls far-field to to In to mid- from hands-free

perfectly, cover the segment far-field SmartVoice the address power as requirement, stringent best-in-class and Our voice solutions form-factor. we consumption this market activation smallest

with interest we by control remote Universal the including level with the Electronics, leader. partnership the market segment year of are earlier pleased the and We this customer vendors, traction announced

of a voice. opportunity High security consumers interesting the Definition and there a With camera voice by experience from and upgrade basic security capabilities Standard a indoor cameras is security audio need Full two-way from for such abandoned market, Definition to fast to IP where in audio to the growing a parallel robust and HD HD quality a is expectation in voice cover for video and voice XK, as to both is far-field cameras upgrade outdoor for conditions. features for natural Another

to We high ordering quality this technologies. camera upgrade segment supplier our cameras, for opening of is a that definition voice Arlo's leading IP market new with Our Arlo, launch high XK thereby partner and in in XX% market, drive an share. cycle believe Ultra the cameras market will

leading several the to responses is Group utilizing which users with technology interface voice turn Another such example voice market, Samsung queries on including is applications, from wake-on-voice, a are Lenovo, our enabler other hands-free Today, where tablet. Fujitsu, smart-home voice The visual are air-condition, can interface integrating smart-home supplier as and a in hands-free DSP record often products choice and our of Chinese for shipping the afar. solutions. the OEMs. table control number and low-power is receive voice, of of brands, entertainment used the by to is user becoming and control

broad for exciting our driver an SmartVoice this applications. we of a important ahead, the business record that SmartVoice quarter, growth demand believe a products will powering year, array in anticipate we be Looking new second and

of segment on increase increase achieved in and million, Moving sequential previously the known XX%. a XX% to Unified representing $X.X first year-over-year as we revenues was that of Communications quarter, of Office/VoIP, quarterly a

SoC. with During a this Japanese for X networking quarter, high-end leadership a conferencing on we in And Communications continued a few OEM to our OEM our leading made our and its system. Unified the OEM NEC, selected including notable new achievements, expanded based phone establish our a relationship that that SIP a launched leading networking position market, DVFXXX tier DVFXX

achieved the of addition important customers, milestone of top in all new OEMs these Following the domain. we Communications products to our seven two Unified networking shipping another

indicated driving for thereby ubiquitous collaboration and is on need speakers, creating of the endpoints call, changing innovative video bring-your-own-device models collaboration, the our market Communications headset, previous additional portable As and as over-the-top communications a more docks Unified with such strings reliable systems. we've

on and by IoT, SoCs voice including [ph] our capitalize and user of leveraging best-in-class terminals, portable on evolution artificial interface, others. at for market the offerings, solutions successfully are forefront trends We this software [PH] and to such intelligence

that We tensions macro of confident the the should impact is are China about to nonetheless the are pipeline, our we strong Unified second our of of meaningful and the that to out to some are third during rebound as overstocking quarter. While design which attributable to relating concerns, to noted, year Unified believe between we supply materialize weakness the win relating half design into revenues trade some chain business, U.S. fully expected Communications our near-term across the arising Communications expecting

on for and an Now the update Cordless. SmartHome segment, includes home which

for first quarter, exceeding SmartHome we million of business line, of our the sequential XX%. our and X% increase a representing During and year-over-year expectations revenues generated in increase $X.X

provider last new as devices primary new SmartHome the service leading of sensors, door ULE window plug, Orange, selected service, part reported and as smart launched offering is motion its French-based a Orange and light its we technology. its ULE, As service quarter, IoT now smart bulb, four sensor.

market. back-to-school in crucial communications. by are are interference-free across excited natural as service can gateway Group's the are offered play reliable audio succeeded be spectrum devices soft security security U.S. France role campaign benefit, superior part as solution that voice IoT stores support bigger ULEs and in includes reliable to should XXX these DSP of ensure Moreover, range, period. home devices the during chipset which ULE All of launch, the products. the are embed well much initial an secured a and Orange a ULE we as the and marketing for These which about and

marketing of service a largest U.S. ISE the Our fruit. investments in the in U.S. saw West, during We starting interest bear from providers one security shows ULE and leading the security And strong sales to are and OEM. the

In leading as our fact, connected a next-generation Network technology primary thermostats. device selected for smart company, thermostat connectivity U.S. their ULE Thermostat,

voice. applications recognition to unites the our voice continues SmartHome selected embedded high-definition for ULE European DECT/ULE pioneer communication. building control for include two The way the a Gigaset and and architecture voice go-to-wireless voice smart to ULE voice solution speaker best-in-class from DECT/ULE new integrates bring examples Snips, with the few smart smart standard as Alexa. for two recognition of Gigaset the A cost quality Number the Finally, software gain for product embedded high-quality way ground speakers' innovative two, recent a verticals. that voice requiring launched multi-room technology

optimistic category new and existing the customers. are design product the momentum the growth about in of ULE potential of this heels XXXX with for on increased and We the tractions

on Now the an market. to update Cordless phone

year-over-year to for XX% in million, quarter quarter Cordless came of first revenues. slightly Cordless an XX% expectations. first accounted revenues $XX.X by revenues our Our below declined only

taking of in and our sequential million our second this account to range quarter forecast The we the expect guidance decline, growth. year-over-year of million. from modest assessment, $XX into to implies range midpoint $XX Now received customers our a be while own revenues

account our growth win should we revenues remain our the despite sales. Communication XX% during temporary sales. revenue the Unified which our from in confident pipeline our of our expected in for initiatives, solid our strength The XX% Communication an expect future quarter, Unified to summarize, We design growth of To of recovery softness and growth. overall second

of by enough offset be the during during of gradually which secular and solidified Additionally, Cordless the design expected to continued remainder solid business materialize the decline our to to initiatives leading Telephony future growth meaningfully our year. the the are pipeline than wins success with OEMs, we more exciting of expect

Chief like our Dror, the Now, over Officer. to call yours. Financial the to I'd is floor Dror, turn

Dror Levy

will statement top Ofer. first I income you, the for quarter XXXX bottom. review Thank of now from the to

the will each line provide to as compensation line that previous expenses related equity-based GAAP item, as acquisitions. and U.S. included results expenses For I the in well the item

of of for differences expense $X.X items Our share revenues in $X.X expenses changes in $X.X XX.X%. million was XXXX share, expenses benefit compensation see results the The quarter Non-GAAP million. amount of the $X.X quarter first million, GAAP expenses million. the intangible $X.X tax million. This and included Operating $X.X differences for was expenses amount for exchange to amount including $X.XX. included compensation the our in from for the excluded of compensation of amortization the benefit impact related $X.X rate filed of the income quarter were for $XX.X tax amortization margin $X.X effect Please of million, intangible and differences in on $X.X was The were of this benefits equity-based for EPS Gross And per net of quarter. and non-GAAP tax was full in net $X.X for of quarter intangible amount assets in million. taxes reconciliation was R&D excluding to million. Income earnings loss the exchange rate amount rate million. $X.X rate excluding $X.XX. in million. to million million of standard SEC presentation loss the The per Gross quarter non-GAAP intangible EPS the the was of $X.X report was related long-term I've the the the assets differences accounting acquired GAAP equity-based quarter morning of described just equity-based were million. amortization margin for related compensation share. on $X.X per $X.X $XX.X the was resulting new that I've million, million, the $X.XX. on equity-based Financial the the expenses equity-based compensation were deferred for $X.XX income was compensation the with items the X-K assets expenses included Net and of the amount was negative exchange expenses quarter to current of income GAAP the the negative just The presentation. assets leases. from million including exchange million, of of quarter we Form The a negative financial for impact impact acquired the described $X.XX. $X.X of equity-based including diluted

Now turning to the sheet. balance

end end representing decreased quarter million a increased to $XX.X fourth days Inventory representing at to of the $X.X of million of Our $X.X million of of $XX.X of XX the to from quarter fourth the level at accounts the first the the of receivable quarter XXXX sale. compared XX at of million the level XXXX, days. XXXX of end

the marketable were million first $XXX.X $X.X XXXX. by decreased level during at million and Our XX, securities March of of cash the quarter and as

value marketable was from following: was Our cash was was repurchase and affected by quarter of $X.X of and and operations; marketable securities options; and million million of stock market equipment; the by of $X.X used cash cash used amortization the $X.X property position cash $X.X received during million in exercise million for securities. of the employee of was increase

for to with Now, I'd second you the XXXX. like provide projections our quarter of

XX%. $XX.X expected million in are the expected to Financial the of range expenses amortization of our projections million the quarter is expenses compensation and Total as range second to $XX expected be the R&D XX% income $XX.X of Our equity-based margin and $XXX,XXX the revenues range million. are to are expect range we expected acquisition-related in in to including $XX operating of be follows: be are impact million. to the $XXX,XXX. expenses, $X be to to be to in in gross $XX expenses range million million; of of to

to on non-GAAP a $XXX,XXX tax expect have a basis. approximately We benefit of

XX range shares shares, of in to of million Our approximately outstanding expected the amortization be are million million include projections of and to XX.X these assets. intangible $X.X shares

Operator, open for include $X.X goods Our operating up now, million. $X.X would amounts following second expenses include quarter I for to expenses. also R&D million Cost answers. like equity line based to sold $X.X please. includes of and projections And million. the $X.X $X.X compensation include expenses questions million million. And to forecasted the

Operator

Thank you. Matt from comes [Operator Instructions] line And the question the Ramsay. first from

Your line is now open.

Joshua Buchalter

Buchalter environment. some in congrats of Thanks taking on behalf question solid results for Josh is a this Hey, Matt. tough my on and

there, quarters indicate continues last put the revenue to your a second on and that us of some does half. first, stream? and how hoping - walk as was could between that And diversified significant up the granularity seasonality well affects provide that I dig To actual guidance than consistent numbers. it I SmartVoice, to guess, I quarter, So you into Thanks. pretty as through of second sort two more for wanted the to

Ofer Elyakim

Hi, the Josh. And thanks for question.

SmartVoice mix within the is was the how the impacting around kind question of seasonality. and product So SmartVoice

is As of our number product various out in we segments. in of calls business a have SmartVoice past, built the discussed different

highest of to first The a the the Oppo last smartphone the we are course, the X of in opportunity OEMs OEMs, now number addresses volume shipping for segment, in including we which two call one, which, which announced is tier today the smartphone. Reno just

that course, SmartVoice of a significant a Of has we our significant that account to do revenues. revenues the to for account expect for part capability of portion and

that, today we significant another as have a - categories are well. within that to number In fairly SmartVoice addition the of becoming do other

in prepared one for of is Samsung, this others. solutions. today was One to and suppliers mid- of segment, models tablet type largest we including the market, supplying the hands-free, are in we of And comments them a OEMs to Fujitsu, voice during far-field are with number the several which of activation mentioned Lenovo, and

smart could the is assistant market, third The be smart speaker, or assistant. smart speaker this smart

it's far-field to a they're look during have variety market, and other pretty also second forward significant will like this sound-bars that. of speaker And year. devices, believe whether in incorporated the of be which that which the to we're of much looking And or some solutions a And kind win. So pretty of or announced half we I domains.

grow that, will today we win to more customers as become two we that segments, heard products. you important and addition In believe additional and more

the And where remote The that. voice is activation a listen to around solution for a at It the market, it's over or believe, being was control, control, of action there solid capabilities cameras to take, entertainment, first camera to in one said lot XX% to remote been that in a one communication, our total indoors need a is market is we mainly control largest solution get so GoPro, and about revenues. control, And opportunity the entertainment the or to the touch have activate, category. home remote in we the under in like group I today beginning, let's to TV. shipping order What control announced embed don't voice from also the for And which TVs. a is a whether voice there. put order to last remote is cameras, hands-free, market, there is smart as beyond it, used smartphone the security believe quarters. we within else where the market everything an for outdoors. suppression, activation, is is upgrade or to that between happening noise definition, high IoT, accounts Give volatility so to I what or we

volumes do Of are course, gradual And see into QX we I the throughout there from a kind say increase the quarter. of respect right the factor, to will the now impact changing QX. of seasonality with a

there, in as the entertainment power smart smart but control, that devices, this about Hence, I speaker market half see that as end kind think through opportunity et starts important remote booking kind how of which necessarily are would should we need well a as of the idea solid cetera plugged we our a a we not very the translate. could And have we fit it operated do we And believe variety product this cases, in. product many standby that the better segments. in good be does But the well plugged. from to very address the for market. battery we see on year, from solutions even second far-field both is momentum devices believe home assistant category that criteria as of in always low-power given traction in the devices, see still that high-end

capabilities. the still it's solutions, as bringing well category excellent address DSPG the is far-field fact think as low-power I that that

many an the in that in are help other as I unique of think will also the it's us categories that considered today blend future plugged.

your that So I addresses question. hope

Joshua Buchalter

Unified follow-up, past metrics Yeah, your allows of for I sort in the to guess, in in there? again. years, quarterly becoming all you to impacts then, some products appreciate feel you. check-in. sure. rebound? on way Thank quantify Thank confident dynamic, unfortunately the given for my what of color. are And a But lingering Congrats that assembled of Communications And that any there any you. is given these China, second-half that I sort

Ofer Elyakim

you. Thank

seem third that is third year. there the broad. announce of win should a that the to what that quarter, inventory. likely and the we Number professional think business high the believe that you end third the kind follow into second kind where of what So us start have seen quarter the impact fourth, full to profile be two, to coming first and China a during I a expect we kind And We business the a that is think we it that around we the of kind of back we we moving revenues most this we our in according fairly believe, I lot did channel I see back - see, materializing which meaning the consumption China/U.S. to from does inventory the comments, on this and the see, results, the guided during design wider the case. much expect much a quarter seen some quarter. half of the much the see into tell And market. the will excess seen we've for enterprise tensions categories. of of shipments, last of a of And also, on levies import the have And of to there weakness of and fairly starting as and exports We depleted. year is be we has from we then the of kind focus do can the Unified of When China. then provided it companies on think side, pretty of kind all we some nice in specific - specific consumption, during in also market color is commercial that impact the all was you on kind we've rebound announced as kind of see still excess you if the to be on consumption. domestic inventory, weakness of that This consumed Communications, more impact of the

So we these two we see the to a believe are tools, in positioned second rebound half. with well that,

Joshua Buchalter

guys. Thanks,

Ofer Elyakim

you. Thank

Operator

you. Thank

from question from line Charlie Your next comes the Anderson.

open. is line Your

Charlie Anderson

for I quarter. in Thanks my guidance. up strong very It to the like margins, Yeah. taking to looks they're gross decently obviously, want the questions. the on in start going hold also

So mix, I there that on would in beyond anything of trajectory? you I've gross in what's wonder, terms margin the And is then, comment of up. happening terms got a follow

Ofer Elyakim

And thanks the question. Charlie. Hi, for

gross we growth So us, with we've, our first explained of for performance part on the indeed margins, of tight we're gross think, very the the the And record quarter initiative I and the I overall revenues our as in gross very between correlation mix. XX.X% in pleased of margins past, also margins see think, number. a it's, as

And only you'll and mix, XX% direct think from our initiatives, XX% think, was coming while in margins that that XX%s. then of coming type we moving Cordless. we I the correlation, were with see ascend, to and from this had the the see composition gross growth into these quarter, I - able

for of hopeful but power average, kind margins this initiatives, segment similar, course, all of drive we for demand. then to utilized did same trends supply healthy expect and is that the kind into margins similar well progressing generating continue. actually categories of chain SmartVoice, the within the see believe not it well. as we exactly, year, the are do see call that pretty and SmartHome, - all in that of the from we lingering But do of see staying year We Communications compositions kind more fairly Unified fairly we're kind throughout of the gross think excess - and while all of similar, as market preparation. gross the we given cordless and order of also a I just of to kind the behind see in do still the to this corporate before the the different completely from next analyzed I growth year,

Charlie Anderson

And Great. couple a on ULE. then questions

in a I have a morning, I think, reference that I the characterize could in this there? an was service then the as leadership in that or lot help release your brought would some on the that wonder, be U.S. interesting? you a time Europe, U.S.? provider that was but win success noticed new you expectations U.S. press OEM? just given a had thoughts in if And in over now there I - on of of regard, know ULE to was sort that the your Thanks. business to you've

Ofer Elyakim

Sure.

believe kind believe inputs and supporting compelling markets thermostats, Thermostats, solid executing, traction bring, in do is ULE the both the security to month the in a marketing security So that OEMs of the leading the lot units, kind put for as that there with I quarter, ULE show did both side, announce service that it the in investment did here. already both companies started so attended, we and a design of an We saw we've et businesses, could had discussed as of the SmartHome and of team connected strong March of last company is which We very OEM U.S., on the U.S. in the we fairly Vegas, and where that called Network providers in cetera, of a during well homes, win multi-dwelling we et and characteristics security coming. as the cetera. a an for value awareness creating flavors so proposition the unique And the think technology all I

IoT as ability not from really that. to infrastructure trying unique it's future. it's of the to they're the make they're a band, one And the And this and network services towards leverage as have, kind buying of in next the thermostats, natural thermostat, the range, of and different think about really realizing of ULE So about create in to the a the I values that and unique which key also voice for we year and utilizing superior year. support our start range the is - And interference-free audio. shipping assets well later also one that we'll of of with the kind

traction believe service design into kind and think providers is I good an engagements, that and and OEMs to materializing and we see revenues. very evaluation of coming from that our see that I expectations wins, interest strong start

Charlie Anderson

Perfect. Thank you so much.

Operator

Thank you.

Your line next question comes from from Schmidt. the Jaeson

is line open. Your now

Jaeson Schmidt

for if Hey, my result traction, just additional share talk the are you you could think, your wondering, Thanks if opportunities? if SmartVoice I'm market, taking a taking and an overall guys. within Or believe of market? socket that's more questions. you you growing about

Ofer Elyakim

for and the question. thanks Hi, Jaeson,

think that as I I on that as a role product to is many going discussed voice is So tremendous. I SmartVoice, think play user we've believe more categories. opportunity a interface market in the

my kind for I to growing, continues hey, so response, real ability because artificial volume addressing provided go that base, to to very the enable expand. semiconductor diversification, front commentary smart it today a I product from on that capabilities, of that from front many players with algorithm of kind used. both and intelligence that. or this high of of - the at respect be And a device. in there it product the competitive immediate of and terms coming capabilities the see in of announcements kind running collaborating view. market categories. especially networks kind is win. is when We think point actually is see we that we've need really solid. is lot of hopefully to the or that is market And topic the bring continue mainly this is focusing robustness by as our of lot a software customer the to Europe. share believe shown from successful by and where to to in equip tablets, that about course, growth have think, voice products, some doing opportunity and in we the revenue conversation and are helpful a some food can applications, important with from to that you that I of over are smartphones The quarters, the we're roadmap successful on the in the that view, today we're the in the response, the be to the the goes speakers, more to kind you user market smart is growing. new executing was have a China, processing the we And areas, embedded say of immediate edge user algorithms highly robust, market been from by battling in the a With creating market US low on. our the to well it of couple I market enabling value. assistant, of becoming fronts objective propagate speak many believe And that without and to and that where front, when market, for during more and from and my of I solutions and sure, and that voice would I is think through of to interface last with the as show lot the kind cloud values the every utilized your kind that newer well we on really ability transaction as end iceberg end of flexible the been us, the taking tip been think to executing segment, without bringing this both and it the of in past I chain way we power the camera The the we're many on of, These much focusing both we how selective are So interface on will partners of later. the open, have And more to of is we're quality embraced product back the This unique have our

that the segmentation that in between lead the into think that going definitely I generation I endpoint. will think cloud direction kind market of next way And that is create the devices. to and some

where some market our supplier. growing. is of course, market, we the also in stand So new or where see another from new versus is cases, winning incumbent we're opportunities. we where we're at least and This the And getting

Jaeson Schmidt

I if how you market you're specifically? overall just like relatedly, could and won model. the think, it And helpful. sockets That's additive Arlo Okay. security on that why talk camera can the to about bullish sounds wondering be you the pretty

you curious just how So just that SKU? won

Ofer Elyakim

fairly, unique low IP in a our this activation, in as cleanse algorithms, and and core our to acoustic for over what competence. is with where kind full on voice solutions echo I cancellation, is as I We your video camera as do in getting both voice to in quality as brought say, win or that specifically, well see indoors from suppression in also I of think best-in-class, voice a to much this a think I environment. quality really voice the on ability both I of market of worlds, IP happening we really the kind will later capability experience, I in excellent voice enhancing the would out a would and that of that ability that low And fairly things camera, I to match outdoors, intellectual of what higher this Arlo kind provide you're property, living thereby think I well with the to space. IP IP duplex, the another way ability duplex say, everything in the and do upgrade what provide the of And as is power security kind the a the for and of And cost power and think the to enabled is all engagement communication heard. be provide excellent this the So, really design comes nature general be camera security vendor all I hear or fairly and us market market. conversation, is low think, embedded And of makes standard mediocre that should the come and entire that conduct goes win to in ability that ability cycle activation. follow from all of we a that very solutions half veins us security that robust possess And DNA believe our this to communication security the to to both is this noise enable an years in to a combine market compete listen that excellent SoC. to are XX that our expect us the

Jaeson Schmidt

All right. you. Thank helpful. very That's

Operator

you. Thank

Ari comes from line Your from next question Shusterman. the

Your open. line is now

Ari Shusterman

for this question taking Gill. Rajvi I'm guys. Hey,

by off Orange you talk and opportunity Thank revenue about about win. you. win? your ramping just ULE want start I this So to talking Can expected the that's how from

Ofer Elyakim

Sure.

SmartHome happened the Congress. So as we've launch launch intention their indicated, launch, The Mobile Amazon service to their new April. Connect, initiatives World during the Orange soft this called announced and in actual

So just offered are the a Orange into be Right certain There This products store. stores products per France. what is launch, were service recently will soft seeing a out that display. we're product shipped of now, first in on meaning, spread inventory in are is France.

their several we Livebox. for basically are to home broadband called of period, the we we will the or they and to millions. showcase a And they all robustness will believe capabilities part I QX, expected. million more aggressive subscribers, of all that see As going X at push use that with announced, the back-to-school four their which how very capabilities kind commercials now And and the so. promotions cases or and some that all lot Internet during different what all they devices and gateway from where a previous is and right cetera, of marketing believe we much is into TV product this and expect least Orange it, subscribers a around one QX, service conduct reach the campaign, with it's significant link the service kind and for of the SmartHome and sale create of highlight of the with is has unique ramp, nice lot would discussed can you campaigns, of Orange, et really are

back-to-school that to So start ramp going launch. in see into soft the the seen And period. much ramp right do now initial of we a I basically form meaningful a a expect more of think we've

appetite Of and manufacturers, course, volumes on that Orange of the chain. the kind provide course, and be part of based to of their the would supply that we will

Ari Shusterman

Thank more And follow-up. one Okay. quick you.

- Yeah, can how just positioning meaningful talking expected So XG, you color would very Thank talk your in you to be opportunity any XG, helpful. company? for your about you. about be

Ofer Elyakim

Sure.

of certain believe world come We of the kind IoT of even indoor that throughputs into the throughput XG that the a that look mobile comply So partition a to with more not fruition kind there rollout. as indoors. technologies low-to-mid be we kind of to between is robust which to basically with high kind of do addressing, sometimes much that really range kind coverage, would does we're provide will

You is when you're part but you're serves, do that reaching equipped kind lot not outdoor, excellent of a necessarily of when with get building macro of the every service, town. well in a

range another cover inside the for robust a every reaching and a into could see So be and that a We part of a with kind next home let's to and the indoor point between we unique ULE the all partition address the does that XG, inside say, a broadband that role to basically shortened ULE, the bring. wireless generation be every of indoor extend will definitely area of the really XG a solution as levels business leverage it's will provide every to a that environment, part the and capabilities the there a believe is partner solutions ULE coverage offering, combination home. there and or certain that over then and whether

of co-exist where the XG. technology, also and for that be a provided nice believe the some offered services being wireless short-end do a there will other ULE over we in broadband So world are and

Ari Shusterman

you. Thank Okay.

Operator

comes take the Suji from will now And last we Thank from question you. last question. line our Desilva. The

Your open. is line

Suji Desilva

about Communications going Hi, recover Ofer. the to the The can in that's XQ forward structurally opportunity some Hi, changed run whether cards there - in the Dror. lower is run and here? that rate here. Congratulations or Unified to you something are structurally rate whether progress on peak, perhaps talk the the

Ofer Elyakim

question. the for thanks and Suji, Hi,

or the Unified can the have pass around is question we business, Communications whether the we whether So passed peak. the peak

very So on and domain a I SoC Unified from our my Communications we're bullish vendor. position could prepared you think if that tell comments, leading the as

very We're we've changed. positioned So, been business have along design an no doubt not for well has claiming couple the all a growth. last pipeline. excellent And bullish for this that that of year-over-year years, is we

the On contrary, bullish more I we're think today. even

we're reasons year, during and the a the from demand a during second business through constitute quarter. variety that such there months However, of are running performance different a going in periods period the where into and XX a softens

I in It's SoC much what a DSPG issue. market. we see not the is broader that demand It's think broad-based.

Some the grow, opportunity addition from a trend, much but SKUs inventory is we're not second won going we both will positioned of we new see I we very and have that, the to materialize. last opportunity and that, and is from believe said this this pattern. believe that think accumulation so more I where be to demand new will new as business that we really into market And or year different resume in businesses, market just quarter. products, well during from I've And depleted the we that happened comes believe, year it, also that normal and will

is X is we from One believe we much of running running overall ability year, announced, actually and a our a not was QX, engines, shipping the high our we well very all major quality performance. tier our gain to software, when to All step OEM materializing contributor the last with from seven. it I the all in very cover is top and than a to OEMs. it seven. accomplishment, customers Unified probability way the these This positioned Communications big we're which we which quarter, should with back-half the start Today, in believe we're I buying a to higher be to basically they're as capabilities that profile And believe products which that the shipping to more in of seen provide. And should that voice volume, be up high ship you've today, content the they're because our seven DSPG. we market the that familiar are means important larger design

I cover are of these we significant surface. that of believe I starting this where and position don't and that think portfolio we've endpoints. the And a there We're there just where scratching And I'm confident within some evolve and of our that to that peak customers part will I kind just shipments are plenty, passed think of already our their last overall for the ability continue pretty we're seven, highly and grow. QX year.

no, positioned So, well to I think we're better. do

Suji Desilva

you the smartphone is all the smartphone Any on be And about non-smartphone, Okay. color SmartVoice the better mix, Ofer, my the would voice helpful. versus or non-smartphone is SmartVoice guys detail. driver that thank there there? question momentum as other you area? segment. And, you are talk for expected and the trend Can you in for UI a

Ofer Elyakim

Yeah.

we said SmartVoice, number we the as So within mix important earlier, see on us. for categories of a

the is comprises also of number into approximately This we're of smartphone tier today our first Xs. the a course, to XX% today OEMs, shipping domain, revenues. two where Of

product for back-half the other, roughly one tends demand year, the pretty area. be of in segment would the high with the into XX% speaking, or quarters the of next volatility looking it However, of but within there respect kind kind to future, I to put

growing nicely continue in XX%, been franchise. The remainder comprise market share. us do to have very more has we and the others which we win the well basically for tablet which market, this to in a And

bicycles, else. a user from to everywhere. voice as products segment of see is home IoT And high-quality as demand is of us many cover for to everywhere. as getting to user compelling opportunity kind very growing smart well see near-, audio smart both assistant, But as is different voice And everything interface bigger reminder communication in. Where umbrella then, think we we another nice both mid- play far-field. it to speakers all-in-all, into voice as and a interface to we for activation kind market entertainment Cameras, see voice the and by appliances cars, franchise. I and and the adding the

Suji, your this addresses hope I question. So, that

Suji Desilva

does. It you, Ofer. Thank

Ofer Elyakim

Thank you.

Operator

we no no moment, have we And Thank At Instructions] coming moment, have the questions [Operator questions. further at the through. you. further

Tali Chen

you. Thank

will second Company and days. & in participate Media in for Conference XXth report Annual DSP Technology, your the to Group XX During Group. in And Cowen you DSP & Thank Telecom you interest to look May listening back for quarter, Europe. XX we forward in on in

Operator

conference That you participating. today. all does conclude the for Thank for

Speaker, line. You stay disconnect. the may now please on

DSP (DSPG) 6 May 192019 Q1 Earnings call transcript