DSPG - Earnings call transcript Q2 2019

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Operator

Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to today's Q2 2019 DSP Group Incorporated 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, just dated 30 of July 2019.

like today, the Ms. now your over would speaker first I to conference hand to And Tali Chen. ahead. go Please

Tali Chen

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

diversity call, we we Unified within the initiative the that revenue. business well technologies conference initiatives forward-looking our no Before engagement coreless pipeline Projections projections, positive and in Communications growth, as our I obligation on to during about year statements design growth to would up third and full our product including relating XXXX, products XXXX. such for of be wins you remind schedule will optimism SmartVoice, and our And impact begin, initiative like in of for ramp guidance about forward-looking SmartHomes. incorporating the long-term as in statements. to making assume this and offerings financial We update quarter growth

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

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

Ofer Elyakim

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

guidance the with our an X% results line a ahead which X% on $XX earnings ended representing second of on on and with revenues were and are operating in sequential quarter line with quarter total our year-over-year. of of a decrease We income and basis the pleased increase We million, top share. per

grew from of year-over-year for XXX% fart of million, our the XX% reach quarter, of and in which new total $XX.X and offered comprising in of growth second are XX% gateways by revenues by product the strength by of million applications in TVs. segment, a addressing tablets, slowdown year-over-year offering product initiatives Communication $X.X sequentially accomplishment growth revenue. SmartVoice reaching client and record was an the and quarter. smart increase our weakness revenues of which diversity line. revenues XX% cameras, and representing our the our SmartHome This demonstrates for in the expected During record including results demand the Unified SmartVoice number in propelled temporary This

GAAP with and we're non-GAAP XXXX and our further of XX quarter and versus guidance. second the by respectively, XX.X% basis margins XX.X% in points gross to line expanded

legacy from driven all across absolutely we margin new transition our acceptance our new. wins to of thrilled initiatives. of the as by of growth products mix gross secured and the expansion was customer the revenue with evidenced Our strategic by We're technologies

space design with Tier launch, fourth upcoming prominent one OEM which series the a phone an The a of in announced win first of is the customer. the X Communications previously in quarter IP we Unified

a and contribute high of to in gradually to commercial meaningful We quarter volume this our expect initial commence XXXX shipments revenues. to way ramp designed win and this

market accounted second and revenues. Smart XX% verticals, three tablets, leadership establishing SmartVoice in The together cameras a which SmartVoice of is our position technology nearly new for in our TVs, promising

company. ULE a our strategic ourselves the for the being transitioning solidify into American Orange based engagements, in by growing to growth to are of respective success technology two-thirds design and third leading revenues North developments increase revenue provider voice on with service account we that are and positioned sustainable our track wins well our initiatives by These IoT end. further selected growth for IoT technologies. on our that These our of pipeline along exception our approximately year of for and total return The offering confidence

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

increase During of revenues increase XX%. million from a SmartVoice sequential representing a of the record $X.X sales we of XXX% generated quarter, of products and year-over-year

establish We our design and wins These applications secure these design of in with are hands-free markets and variety continue relentless Smart market following to leading pipeline position resulted team's into achievements. quarter engagement TVs. three effort the during driving penetration Moreover, tablets, our leadership help winds a OEMs. and our the our enhance in for voice to segments, in activation us cameras, burgeoning noteworthy

new launches leading second The product during first one by quarter. tablet five of Chinese OEMs the

products activated SmartVoice This our more a in activated position Today, different have tablet tablets. achievement shipped domain. further hands-free we dozen models our of voice strengthens the than to hands-free voice leadership android

with this The certified Alexa our XX. All a to cover based number these certified new products wide technologies devices Voice second, the Services technologies of Amazon innovative and total or by and tablets, variety the on three AVS, underscores Speakers, are bringing using our built SmartVoice with even solid we of the partnership team. further and high fruitful Smart modules and of This the call AVS applications phone. including Assistance, quality and technology Smart you

than activated Third, TV This for our consider TV sets mode. field using than limits Ethernet may OEM high star voice TV a TVs makes TVs serious three the when connected to far SmartVoice compliance standby a bar no and means circuitry. using the standard additional a This watts as no matter solution. for any energy offerings it leading smart manufacturers in launched more X.X or power Wifi watts more for internet for consume

voice-enabled these to we a also opened new and we are our and needs, profile pleased advanced requiring activation the the As similar In technology power SmartVoice customer the door providing requirements meeting with whole is result, that star have meets a particularly base compliant capabilities. control. energy while customers'

quality with wins global down our rich these our consumption continue tightly strength also capabilities power to solution and new and high important drive they to be underscore that driver year performance diversity SmartVoice continue market. applications. array our franchise, coupled design high to will While an believe and powering We growth to partnership and exciting this our business bring ability broad demonstrate of of SmartVoice a

Communication segment, impacted the the into quarter, was demand our products moving an Communications for expected by Unified near-term Now weakness. in Unified second

design phones reported position million into provider. Communication our market a for time, which our We've new when a same new reach quarter second a of customers Communication the product We're and business. $X.X on declined business our a stringent Our year achievements grade IP penetration and new by included quarter. the meets ODN basis. design service Grande fourth range categories. the about we that Stream long-term We by DVFXXX Maxwell based our launch is voice suite long of Unified successful growth This phone been about a prominent we selected that partner noteworthy guarantees phone. in in and the market. A At handset deck processors. into IP few on Unified X, year-over-year a expanding Communications, carrier in XX sequential DCX the the saw Korean a to Korean by of notable IP XX our a strengthen DCX leadership launched design professional line new Gigaset and market, has our seen and win secured requirements X% revenues its recently this and major XX% continue the particularly achievement excited this earlier a

However, the contribute a this expected early the than revenues due meaningful ramp, we anticipate only in longer way in XXXX. to product that from will

weaker the are initial revenue macro are this disappointed and revenues. and or for products, but revenue swell roadmap much Unified at this by track than design calendar related with ramp positions expected. meaningful to investments to inventories coupled in our quarter, that by for the we trade weakness, modus commence Unified Nevertheless, of the temporary, levels shipments summary, we the slowing of impacted that more early Nevertheless, levels on by Consequently, In enterprises. growth pipeline tensions CapEx weakness in this growth Communications expect as to global uncertainties remain higher gradual and year the our year year while of the recovery previously product the lower promising leading view IT demand the to our we despite for we come. confident Communication years do

and SmartHome And update on segments the corelets include Home for [ph]. now which an

line. to SmartHome product our Turning

with the in the second ULE comprises X% protocol that or and and are representing demand products. revenues of sensors. solid quarter, SmartHome gateways sequential XX%. During of IoT a million of line SoCs year-over-year integrated $X.X pleased The a very decrease We're and decrease ULE we for deck momentum generated

softness to seasonal used quarter ULE rebound the due However, demand for factors. we expect quarter. in during some a the experience fourth And deck in we mainly home in did gateways, product

are for share event a excited milestone to We SmartHome business. with you very

North for the IoT and a our secured market that awareness selected is its the of ULE in product service investments During the strategic marketing leading technology win This U.S. American we design ULE with second creating for developing provider in quarter direct our a offering. result

providers selection additional high impact believe the and technology market ULE adoption by driving could profile leader of such of meaningful service in leading We have that a by OEMs.

natural including Alexa-enabled benefits and in as an difference voice to by Actually and that of U.S. pleased was is translated the launch getting audio technology, experience. wireless Motorola that The spectrum see the are Amazon superior deck phone evidenced coupled are reliable on diverse world's reviews. and Day voice voice Father's We device. into launched the thereby with phone free and first certified, interface unparalleled support range product underscoring best-in-class proposition offering a device unique ULE's is the in home solid user value Alexa the reinventing voice innovative

its selected The for second Japanese offering. OEM that deck ULE a speaker is wireless

to coupled food This offered XX deck latency by support ULE. string hi-fi with best-in-class ban product, low the audio we kilohertz deck over ULE with audio leverage

selected IoT The and U.S. heels third the design for strong also product our about based potential sensor of that the for ULE category in on of in XXXX technology growth system this and conditions. industrial now a momentum deck for We're machinery optimistic in the U.S. is Europe the Company ULE diagnosing traction

to update the And cornerstone an now on market.

range we a own the our million quarter assessment, Quarter's and year-over-year of year-over-year account quarter for $XX $XX.X expect XX% midpoint Our in forecasts, And of our these accounted implies to revenues to be increase into XX% range modest with revenues outlook quarter the second taking by expectations. sequential and third revenues and a now receipts revenues. to second in of to declined $XX decline. guidance our were million customers from line The million.

growth revenues. XX% account our initiatives expect to for overall We our of XX% to

believe more and design technologies we're will future the and summarize, and solid are they To remainder by our the leading pipeline acceptance of the by wins during significant of year the materialize in during solidify a expected excited to in with of way XXXX. which our products success gradually OEMs

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

Dror Levy

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

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

including the the for million the compensation $X.X tangible expensive Our revenues quarter $X.X $X.X amount included expenses Gross including in of million margin quarter $X.X $X.X in Operating million quarter expenses R&D the expenses amount Gross $XX expenses the required was quarter monetization were of equity-based based and margin in million. of XXXX second amount $XX.X for the the million. equity-based were in for the compensation assets million. for of of the of amount equity were XX.X%. million. compensation

million leases. million the $X exchange million. Net of taxes accounting $X.X income expenses quarter exchange of in $X.X to tax Financial million to million, net differed was amount the for differences differences resulting benefit and assets our equity-based for related rate the quarter effect Income These benefits $X.X financials of quarter non-GAAP of differences amount the rates amortization related in to $X.X assets expenses in rate income included benefit compensation for excluded $X.X including standard of loss a changes $X.X from the tax compensation equity-based were million intangible this quarter. intangible and long-term $X.X Financial of and exchange of tax million. $X.X from billion, in the related for million. was included new was

EPS just was equity-based of described the was rate I described a the and the GAAP Our $X.XX. non-GAAP net on impact was share amortization presentation assets income of morning quarter was I've with excluding to of the items the $X.XX. of million. these loss impact $X.XX. SEC the the on share impact report equine intangible was conciliation $X.X compensation negative items non-GAAP see of EPS $X.XX $X.XX. taxes second the the was on different exchange The impact was EPS excluding The of negative diluted The Non-GAAP for differences was per filed per we of X-K this quarter. current positive income GAAP $X.XX just Please presentation. Form for the negative

first the sheet. turning receivable the the XXXX the $XX.X balance Account of Now a at representing of of quarter million million quarter, days level end end compared to of $XX.X to increased of the to second XX at sale.

a of quarter level decreased at XX the slightly the million, representing from of $X.X million end $X.X inventory Our days. first to

second million the XXXX. Our were quarter, by $XXX.X marketable as securities level million of at and during increased the XX, of cash June and position $X.XX

position the securities. million affected was purchase cash provided by $X.X $X.X securities quarter was in and included of and was option had from marketable exercise the was of million property $X for amortization and cash was of of of by by value operations, $X.X marketable cash market cash and received during employees, million equipment, we that Our used following; of million

would of like for you provide projections to quarter I third with our Now, the XXXX.

third follows. acquisition $XX be are and Revenues of including amortization the as expenses related based to of to in $XX expenses The equity range expected million quarter million. the are projections, compensation impact

million benefit expect $X are of is expected million range XX%. we in to on basis. $XX.X million the the We of are $XX.X $X.X of and range be be to in an $X.X the million approximately the to of be expenses Financial gross to expected in range R&D $XXX,XXX, million. income $XX to ongoing in million of our and range tax expenses operating XX% expect to margin to be the and total expected

are be in expected outstanding XX to shares the of to shares Our million range million shares. XX

$X.X assets. include projections quarter of million intangible amortization of third Our

Our third $X.X expenses. following compensation quarter for include Cost sold forecasted based projections amounts equity also of goods include the million.

$X.X operating million to Our expenses $X.X include to million India million million. $X.X expenses and $X.X include

I questions left Now, for the answers. line please. Operator, and on open

Operator

gentlemen. Thank you, ladies and

comes We question begin from question-and-answer the [Operator Your session. Ramsay. line will Instructions] now first the Matt of

is line open. Your now

Joshua Buchalter

Hi, Buchalter Josh this on Matt. results questions the my is tough and taking for for congrats Thanks a backdrop. in

in and know the guess solid some should we the think progress DECT/ULE. the in the from about of as with there's sort North design of and were the team ecosystem at lot it's like here months work cadence sounds the revenue development I Orange opportunity you. Thank for a couple How been Telekom, those of America it there. been announced. So I it's given win well Deutsche a developing. since Congratulations.

Ofer Elyakim

for question. thanks the say just I'll

basically so an to that network. So connects front, with items, ULE that there's in respect that IoT smartphone and sensors two SmartHome sold Getaway so the Gateway and respect DECT/ULE to -- particular. the is With the are revenues the basically of the for these aggregate to

quarter, said, I kind I with the of that weakness results the it's them some this in much think quarter. as we've we during mainly seen saw better first coupled So

the So like quarter. some second there's seasonal in weakness

quarter. expect will said, year. in stability we As in we quarter Gateway believe do are starting to see launch And of to the recovery fourth into that terms a we see the that new the expected products of fourth most we there

now demand improving. DECT/ULE, on to is -- from that a One see respect Deutsche It's two there With years This now it we the actually Telekom launch two has basically work we start. are were but launches. We're been and stocking that depleted. anymore have or DECT the with is very with no -- orders where at more pace happy actually of wanted were with issues, and they any inventories that to not still the be today. seeing there as over we the will levels

mature only time launch. kind occurred there now service and tens of kind account exposure soft soft we so demand take April-May they addition, started the the subscriber that -- shipments already has base of services the we and and In a there. lot do is timeframe that to and is to timeframe hope in application amount What a or a via grows launch thousands good early you're the of in have very take we're a we preparation -- Actually into see Orange of also big holiday of these the DP. do the application but on downloaded we for expected have the season, in very media hopes in providers with need sometimes similar think kind that the Orange I once we been of certain that steady point, kind the in December and in the launch, and means getting fairly long

With respect to the U.S.

So these a of that SmartHome. evaluating, the that a market providers hopes we're success that see and all aggregate we're see for design lot very actually we'll the strong cases by launch into still believe and smart will with on focusing leverage also We things win also We that and leading bringing that important has trialing from in we have the a ULE. of their service activity if all good marketing to Europe service U.S. all services the to been to are provider. using with in of trying our and of significant additional Europe and resulted hopefully XXXX very U.S.

believe So the Europe, of we well is in technology. in summary, It that that good do We started very have market becoming the aware in a now U.S. believe we it very do is it. happening

the with we that year. have next into see the a growth, want want of shift level revenues I that see that of increase sequential kind the of definitely to that respect much today annual of We So translate the momentum. we projects think we all significant to like and revenue of backlog providers service to with kind should level better of fairly a

Joshua Buchalter

I guess that And you, impressive I non-smartphone put on a very results. guess long-term the within I understand should Thanks. applications. the design It growth driver? I some then stats impact today that all given you've to smartphone which and to seasonality on appreciate any business exposure on I numbers SmartVoice. guess guess up wins learning see was in quickly there's on diverse larger the medium versus of Congrats you helpful. continues Thank as we the sets be pick bucket if that And would do up the growth in color. just but and

Ofer Elyakim

Thank you.

wins, So with is some it's we from has the it's just we to that but the these been -- no way the to are and operated the alike just will devices TV than not revenue, during see -- an are think from the that translated smartphones much -- embracing -- to just the three is hopefully see starting will -- -- fairly, we different non-consumer. for classify similar see have focused not radio actually objectives the I years it continue more as actually the XX%. progress user we SmartVoice at because the just And the can where respect diversification the around small for TV so also not today, and see volume as smartphones, diversification devices we last And big battery we're in share also non-battery design but place categories to which type the I where been is of business we that consumer relevant, we in speakers what the additional actually And other -- to are will segment, now as technology the it's I think we as this new I are the and that lot you products application that sure, think that also business seeing from output voice primetime. of have cannot from between both I being all actually, TV. to it's entertainment And think customer are not definitely IoT we but market interface. of that on the what gravitating, products it's the silos and to where everything a the important, that believe represent you as -- is is more

strong to and cover addition, user have can In many because the will marketability become they point the SOCs I we'll us. portfolio tablets, from of see market. present and that view revenue irrelevant voice it a type opportunity application could Today, more this we of interface cameras embrace will of of fairly think that and start for a

or performance So market fulfill very do devices competitive very with that wants to being can a device, at a but wants any season and about to criteria whether fairly higher up to to some and their talking capture level operated user our we achieve lower that the user we see battery interesting expect we landscape. all interface, very to to wearable a end we're robustness performance show high the associates to voice the solution device interface, that launched a device, still power during with holiday consumption good compared of the can embrace that voice performance and a using

activation interface the and mechanism devices. So market must-have I by interface to take the in encouraged it a very of user voice prevailing consumer is many starting and think user that become fact we're the

Joshua Buchalter

Thanks, Ofer.

Operator

you. Thank

from comes question the line Desilva. Next of Suji

Your line is open. now

Suji Desilva

on progress Congratulations here. Dror. the Hello,

Can mid-single growth expected revenue to the segments do the For sequential what you there? go of individual through digit guidance are particularly.

Ofer Elyakim

Suji, Hi thanks for question. the

been think respect early what providing not and this So every granularity any done I we've each year, we've segment. to from with

break this the low kind number product we're breadcrumbs space the up. material of in of on We we you numbers happen think respect is a category GDP is still can course other kind each is I I.T. We really and the where the it segment small communications XXX% don't We indicators changes As that lot ongoing. see how the the provided some all to see that also we've the the unified businesses a weakness have there during weak. every hardware. of but can from so We still the there's trending, will and to slowdown and visibility spending actually the highlighted category But in like fluctuations by especially capital we over in quarter. understand, improvement kind that believe with doing. of in of front

lot we hoping So during the that to were this that expansion a definitely to see year. is of a holding back

And this grow. Mainland However, speeds a that With well setbacks as domain, And that you there's we could volatility, wins respect bag our a temporary really drive I a some a think smarter future. to small are guess meaningful to moderate some very very a understand XXXX. the the to the point we're could lot strong next of with and our from lead see products today believe of of expect is and very we're the there's is that positioned growth do believe about the We these that of again, voice in have macro our and from we year or times, on do at a in and volume seeing optimistic and fiscal positioned inside, prepared revenues market we weakness, focus very we despite growth environment in hyper we're to and lot well China. see year, remarks, coming and recovery. rather years this we good the believe consumer lot to where fast, still

So this fairly is a domain. volatile

we product for continue good there our home And market where interesting some we this of think to very with on innovative I embedded on strong momentum a we're momentum, we in a volatility the optimistic, is a launches Gateway based demand front here smartphone do very [ph]. see to and see market, weakness can very SOCs you But understand see segment. the expect again, very As we lot and ULE. again respect

should of all to saw we these So XX% our that all XX% together, initiatives we growth of comprise QX between see these, when revenue.

Suji Desilva

growth really to kind SmartVoice is Ofer, summarize coming Just take And just them. from that, understand your in comments the of to right? XQ, Okay.

Ofer Elyakim

-- see think we I the we should in a are third growth Yes, year-over-year quarter, in that SmartVoice correct.

Suji Desilva

smartphones. And can Because then that, and is efforts? distributors? great. these Are whether very my to diversification to into takes or leveraging you and I you continue to Okay, wondering outside how want impressive seem other do that. question are it understand, just new I'm categories customer you direct partners direct be efforts getting SmartVoice

Ofer Elyakim

Sure.

So direct DSPG. talking most a large that a very partners the vendors each working And in direct relationship pushing. of Whenever they important has about combination direct working categories, partners. [indiscernible] And we've OEM and by a one are our lot been with of a that coupled with it's efforts. it's of of with investment these smaller through efforts we're a been

software; in reference applications. So have that are about designs of also actually variety it's different a Japan, design the And areas DSPG AR cover run include that direct Mainland, of other to customers. in as that not plenty [ph] so elements from also support just and just going today softener and basically it's world other we we and -- can full can our relationship modules offering rather the the as wide components that but beyond solutions well to actually third-party complete in whether reference in be the partners all element, partnerships more build where hosting partners could

day, So at the our a end of in and direct market the it's combination indirect. usually of

seeing For are still today, part but coming and we're from more direct most more of our growing also the relationships most revenues indirect.

Suji Desilva

attach of expect you're gradual you on voice the that voice TV inflection OEM question or as will in in phenomenon? XXXX, well. TVs; be in a like know rate slow quick but remotes Thanks. TV activation you're I Do sounds it XXXX Last XXXX,

Ofer Elyakim

Yes.

happened, and talking believe already become because I we about So right. voice activated -- TVs hands-free we're here activated voice TV's, voice

it capability into integrated box, this remote the and high-end So being you either boxes you the can TV. that and today also also settle is settle you now over learned any get the top through it streamer get control, also through

the of dollars dollars So I thousands is use future. from spending a smart of on and that assistant going hands-free the new $XXX think TV can the and your a think a case new -- browse would TV a through that case all the in think set than I less people for flip them think see I buy of and and And become to hundreds or on we expect voice, case then And with that are be right. that several that entertainment to prevailing system prevailing channels use will via and these ability provide to selector same gradually content use I happening your of that devices, search, capabilities. choose

over and to the a the remotes, it's kind become role to be streamers the use the a these it's at one to dominant more probably be see we TV, one boxes play moment, and the all maybe set portable remote. will going like maybe ones case filter of a at device going going the they're and of So the top and

Suji Desilva

Okay. Thanks, Ofer.

Operator

Thank you.

question comes next the Schmidt. from of Jaeson line Your

is line now Your open.

Jaeson Schmidt

just or questions. but in Are completed inventory quarter Communications well? segment. inventory be Unified Thanks Ofer, my for current as issue do taking Do the will I into you some guys QX you the to that QX still here this want having see some think you nice start launches on issues? bleeding battling

Dror Levy

So Jaeson, thanks for the question.

seeing perhaps customers, some fully I say, to can in inventory has replenishment. signs inventory you tell respect we're So some depleted of you the situation, a know, that already and been with

with from do respect we environment customers. and investment of weak pretty see that hearing business However, a to our we're many

from also our get And public their that also of companies, you some results. customers, can

towards is this today much more And a kind temporary is the of I health believe factor. believe situation is that that lot that the of improved. inventory the it skewed I So, and a of more think phenomena business I today

wins new of starting know, since have again, not backlog prominent quarter, supposed a you production that the first to in we and kind a are the design of very expect is third Again, So, into of do slow volume one that it see, XXXX. already but and go to but to normality we in the start a a high back still product. ramp

see to stage very We and good help in Unified go should market. with the positioned growth are do contribution we have design well continued gradually think leading more from stage in design these for I of and very OEMs of terms backlog to the Communication us the a healthy production revenues. these

situation, be So is much and inventory market market growth the is macro the the side. from issue well believe to come. years kind seems the main is soft this stages kind The I of I for think today. in temporary of situation it And perspective in positioned that's this more improving. kind it to of

taking set well revenue for a strengths in revenue well year. strong So moderate we're think into come. that and And or do accountable all growth the that during weakness, growth this small positioned years positioned for the feel we're the I very to we

beyond. XXXX So and

Jaeson Schmidt

the on congrats comparable win the And opportunity? helpful. help that of American service really size size, being North at what North segment, as can Orange? these and telecom wins in potential XX that's provider we American you in you've potential from SmartHome us some Okay, look seen Should

Dror Levy

even And Indeed. perhaps than larger that.

Operator

Thank you.

from comes the question next Your Anderson. line Charlie of

Your line open. is now

Charlie Anderson

wonder service my if Thanks for If wins. strategic digging technology? help wanted the could a us question North you you why Were tack the you won about the provider little I questions that. I maybe to previous they congrats over. of understand that. the talk and American bit just about on using maybe on last some on

helpful. You use what know, a than different Any it be that follow-up. got I've then is would before? on were case more color doing a And they

Dror Levy

So thanks, Charlie.

announced ULE. or Voice. more is sounds use IoT both the has IoT using monitor with walk having I around to from whether control And communication. around And that was to control all any that provider been kinds And and local view American and to simple being has short to any that switch understand of to environment, is and Voice But think this persuaded becoming service type the listen to to technologies of important things. using commands, one key point events. of of question without analyze ability they're got screen the ULE yes, the in, the or for service translated whether system, of range North in elements of skills to wireless voice the actually very adopt for communications they're selected more kind So cloud provider and we of of that voice the kind

option of once think happening, utilize that streaming. is perhaps and And or voice to and one range audio its key key the with support the indoors. for the becoming natural and IoT great option the sensors So good best ULE leverage real interference-free very I spectrum, that is its a one becomes ways and of with voice

that You prepared best stream comments also we heard in can same today band or audio our if full in class over connection. the

sensor proposition that these very is using device, just this think propelling guys. one any do value that can a I of for radio. any connectivity, all So And one

Charlie Anderson

wins great. as SmartVoice, of really array impressive relates to And then That's obviously, there. new it

three, many in tide base. I vendors seems community forward are the seeing we think customer rising fast guess it's sort their other there, we curious I look now. right broadening also if as space across success this I'm a like of vendor type It out all this winner have a this of or now? what players? Thanks. from four you environment four Or a tell multivendor is where multiple market more do is right share feel years market you take you like can XX%

Dror Levy

all. kind a diversified that lot a $XXX all the Charlie. it to are look electronics it where probably you kind of market Sure. XX sure, gravitate a lot more from consumer of products and for or it's we position to that for to for be ask smartphones, if towards sold But a winner a looking when we're me should hard of market share. devices were sold bucks, Thanks, grabs that at there's presales will of of takes so very much are that winner SmartVoice, at When about devices market from

they will mean I think have a sensing elements, microphone. connectivity, that, it And say I our all be they a microprocessor, fairly have I will industry. case, these will devices will in when fragmented have

that and the and microcontroller, think of the stay for DNA a that that the opportunity group market DSP, is algorithm, fragmented bring will like our So, the the that design, combine system, with market. a I these great actually the SoC to someone will crafting connectivity full together

think electronics, can generation be roadmap kind can we And our or a unique of is we in in we next our could play space, position, more of audio ability we is the together power consumer with there. product of believe these that monetizing the cleanse, I very We do in different voices successful technologies of opportunity in that of interfaced a very our to DNA, process, promising to and very consumption. point also to both these lot and and in provide that the kind kind in all our of see view where good markets components voice to understanding and products of So from actually which integrate lot verticals. leverage and of and And are of these I opportunities. the of do low our the power well-rooted our

edge next which of is The AI. kind frontier,

And market locally we've go about. and of artificial been that that nice a processed So to that help I for talking realize the could us and to locally. market growth and intelligence all signals in kind for is sustainable of our really running is that very after being of us that segment that achieve create think there kind -- a us revenue

like for can actually a is select form the of capabilities coming with see win-win align. and that really where and is that another road kind we to after So partnership our we're And in and DNA, of that where leading we us I in the battles go us to we're where theirs each and map need kind market battles we our fare that the want looking really OEMs you to grab can after. this prevail. market our going think share And to

Charlie Anderson

just could think you then remind about QX just we business? the seasonality quick And housekeeping, us maybe Great. how should for

Dror Levy

Charlie. Thanks,

QX at very visibility our that QX, moment, to is respect great. not with So into this

do the that do stable tough expectations year at look we for comp We and So from we're year about When QX. last you did $XX that believe last about weeks a the both actually seven perspective. hope seasonal for ahead. suffer that environment given in year, in to order to of a optimism kind QX and eight our seeing our better see the kind domain, it SmartHome Communication momentum about us. say hope quarter kind for million. this a or was Unified though challenging recovering We the is SmartVoice, of some fairly backlog book won't And perhaps we of

kind we into when hope stable So, see seasonal more QX. at of it, factor we that a will are looking built we

Operator

No further time. at Please this continue. question

Tali Chen

Management and XX big third quarter, to best in on third and New one-on-one And the Thanks, be these group Dorky we will ideas use update Minneapolis Lake conference will and like growth Investor this opportunity participate The Street. operator. XX meetings this would available group during September York. September during the in Anwar Institutional on in for Conference conferences.

in you report dialing the in we to look to forward and next Thank quarter. for you

Operator

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

You may now disconnect. stand Speakers, please by.

DSP (DSPG) 30 Jul 192019 Q2 Earnings call transcript