DSPG - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2020 DSP Group Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session [Operator Instructions]. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Chen. Tali please and ahead. go you, Thank

Tali Chen

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

the the report other statements. factors to obligation products and long affect to filed. update positions adoption security herein market discussing that information accelerated remind which quarter for centric optimism statements, no the fourth for optimisms you that will Before XX-Q could for assume cordless risks the play company and demand our that fourth products have industry; our our U.S. for driver; into this SmartHome; We and from our the like the we quarter, as begin, risk about pivotal voice the will growth pave broad technologies surge role we forward-looking I unified these early in conference optimism XXXX; near-term More for in risk business SmartVoice in accelerate SmartVoice be ULEs factors made guidance the trends, of refer could the to making product outlook will pivotal being that term the of will forward-looking growth. recovery XXXX the the sustainable including would financial call, communications next believes and market and quarter the weakness and as during about the we statements year; fourth line and from that launch ADT is path forward-looking in

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

Ofer Elyakim

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

which many unexpected adjusting our revenue. yet trend. from arise gradually routine midpoint pandemic, coexist was Our range. business communications voice strategic the from We're of our are while with following third to the the quarter Revenues negatively line were living, centric to pandemic our global year-over-year by $XX importance our disruptions result, impact technologies. aspects unified decline guidance quarter declined the to ended We're this in long-term Consequently, continues X% of the positive economy which that for of connectivity The signs, advantageous acute and we're results of studying seeing potential business a by our impacted by highlighting disappointed as top with the result voice revenues meeting by the and life. XX% and We everyday working, impacted our million sequentially. other audio, pandemic. short-term and and

tripling year lifestyle versus become reported that dramatic to the to surge become is driven and social a from provider voice Park Due literally restrictions, one a voice telecommunications voice more leading the communications form. voice calls. much call as surveyed ongoing duration first volume distancing all The has many lifeline Associates have the in home for calling According in ago. and as in report, has uptick a with essential.

in And to for health the a the face gradually must interface shift a to of adoption a prem have hazards to stimulate interface as the office. of interactions. have face feature. touching infrastructures. voice hybrid products. virtual is with user investment accelerated common voice trend The remote combine associated into Potential broad third on This user are and should second array involvement surfaces gradual the models is return both that transitioning and Businesses work

their customers to planning on in Our trends near-term evidenced we centric our quarter voice SmartVoice and seeing already product for and are benefits strong with associated third cordless financials aligning capitalize are some these products. demand

these chain market our on certain experiencing demand supply grow end wide across limitations to propelled industry trends, While our we improving quarter segments revenues expect and both deliveries, and our year-over-year. constraints by we're placing voice product centric different fourth are sequentially

our centric and market the in for a on successful business IoT and believe and in SoundChip the acquisition trends. AI, sustainable voice play to of well pivotal momentum continue our role, integration leadership products capitalizing hearables positions that growth. We We us about technologies are voice following as excited accelerating long-term our

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

representing During XXX interface the and others. a by embrace of products such range this quarter user XX% by consumer shifted sales increase GoPro, of The driven of of voice an for a of This record devices Amazon, wide Google, SoC offered SmartVoice of in in is third year demand quarter, achievement Lenovo, millionth Leviton, over SmartVoice user Samsung high by voice preference including Logitech, of products, a devices demonstrates interface from plays as and underscored year were favor strategic SmartVoice milestone that incorporating interface. the OEMs, leading generated shipping importance Facebook, XX%. accelerated we record many and $X.X revenues results increase the that sequential million the

applications. we During the the quarter, saw for solid demand following

seen demand driven work-from-home propelled the learning, and which remote we've largely is in by screen. need one for smart category, surge a first for product The where this [tablet],

as AI in offering PC a our user a quarter based on robust. voice leading solution, new and this continue mobile the lingers. OEM Lenovo call in VUI edge this as a leading is of trend to launched expect pandemic Interest SmartVoice and solutions. We tablet the tablet And during number voice for supplier and enhancements our and interface leveraging products

has cameras. one in increase as COVID-XX security. for home is prompted as an well demand deliveries, increased contactless second do-it-yourself home The

advantage to VUI advanced monitoring our cloud-based seen have front-door way take As In to more mode. for such smart cases, two voice use in installed and solutions we've and of a cameras result, dialog and interest growing particular, as home on-site cameras support owners capabilities.

During a technology. this quarter, launched leading our SmartVoice brand security cameras new with camera two

In launched GoPro on addition, SmartVoice based our action its HeroX camera solution.

traction noise accelerated ambient along we hearable demand and growth momentum voice summary, entered about third of quality, interface growing cancellation. of growth In The growing above-noted drove and types stereo into home design The in to accurate achievements. for will digital our the work are leading driver, we the broad wireless recently SmartVoice class innovative call new is industry's and offering rapidly the drive acoustic user the business enabling acquisition our Coupled such the true SmartVoice our a hearables. adoption voice as capabilities hybrid environment in believe headphones. business be expertise, the of with voice from of today, a array We system-level that market, playback other this increased best ANC, excited SoundChip. hearable low-power wireless includes heels of with and through And market applications. pivotal on products, continue best-in-class and to the

segment. the to Unified Communications Now on moving

our results severely demand SoC. disappointing Unified and an Communications quarter shortfall Third Unified were Communications impacted by were for expected in

of and a work the $X.X million As to from basis sequential XX% XX% year-over-year. revenues decreased home, transitions by on by workforce

businesses on for OEM phone DVFXXX leveraging is included Notable However, the continue a top-of-the-line government our a based with and users a channel returning customers based this we checks, for our to businesses first launched Tier remote situation, new challenging XX-line/XX-handset the adopting indications excess professional starting on work opportunities and its IP is towards our single and into prosumers, gradual has to new Panasonic improved model recovery than year. LCXPlus inventory remote solutions Yealink situation infrastructure, on designed from also the DCX first in launched business launch based around launched work. mostly chipsets Unified and based handset, are solution The both the was communication. the DVF and segment office institutions. created Despite that globe And demand already customer forecast DECT this for stimulate integrate industry. renewed demand to the supply anticipated on should that that X in DECT solution. gradually technologies. seeing small and enhanced cell the Communication to achievements highly and the faster hybrid shift depleted that in advanced quarter third businesses a the to audio Moreover, pandemic the rebounded trend codec investments on-prem leading on-prem includes fourth our and product the and This our SoCs. the innovative budget are

we is Unified of in is positioned hardware process weakness as by are for working well the at to in short-term of hybrid and offering incumbents terminals, DSP we the third well these experienced summary, the transition strong model. portable best-in-class Communication about addressing well intersect as the our the as position fit offering confident solid engagement market the players and and AI needs recovery in market market despite acute Group through supported this forefront headsets product pipeline. our as the remain endpoints, with edge. designed In the Newer with this on to quarter, segment, purpose-built

our line. to SmartHome product Turning

Best line the with across voice to the up service, declines voice X% gateway growth or about year-over-year ULE and the by the see Zigbee unprecedented contribute The system. to $X.X Buy we home of security and online for Europe and quarter Connected sequential All the of During direct Blue communication the solid based launch on traction DECT/ULE in SoC. the in offloading Home the reliable broad optimistic Group DECT/ULE SmartHome was are networks sensors at evidenced market. improve and connection. in joined spikes revenues quarter, US. duration. social the on of project as well a and our service in networks. Telekom quarter, ULE million, traction SmartHome designing and the traffic now standard also and are the that products the available the pick decrease mobile Wi-Fi ULE's in We're communications a presence, strong Wi-Fi an coverage Deutsche expertise web These in need call momentum the at SmartHome for networks. ULE-based we We're growing this this voice support on ADT quarter. developing and for address growth Amazon, to of product it higher its protocols. phone ADT's the find Nevertheless, reported by numbers among of decrease the communicating line into premium pleased people third that fourth IP, Speedport to Alliance home in infrastructure of while with increasing positive The for were engagements CHIP, mainly households adoption ecosystem integrating generally globe X pandemic, Deprived US mostly interoperability that a calls. quality home to is pandemic. ADT's with associated yourself and the its physical and the and the enables includes during do will adoption And shop commercial gateways believe unmatched related hub. third will of from and to of fourth the security cordless initiative. of fixed quarter, Google the Notably, on call category founded introduction, providers more both to calls the by as the goal product ADT's pave CPEs ULE-based full to we generated royalty-free delays security DECT/ULE industry, service universal the and system temporary momentum from are launch Pro benefits Due we have DSP new the optimizing as offers ULE's during update portability, and a of voice beyond Plus, and deal integration expect IP launched providers XX%. a Moreover, specifically. will over that their Consequently, a representing through bullish more leading and Apple, industry about path market

and looking experienced the for increased forward, for is Moreover, social of that as a demand to we Cordless sequential account In And a new demand we highlights importance This expect products unprecedented and The rising voice potential for period to cordless other our of quarter, fourth into be revenues by technologies. connectivity related of an the cordless midpoint different increased And to DSP quarter improved and that for the constraint, fourth as $XX we range year-over-year accelerated In accounted and to account XX% quarter. lifting voice we end are of remote stimulated light some technology setbacks a businesses, third to across going the third tide DSP expect and to taking accelerate. sequentially. for and all implies drives change products. chain both and market we while industry-wide year-over-year outlook from fourth home, million. traffic. by the resurgence learning risks is in boats strategic long-term an our the cordless businesses work on the IoAT that demand growth quarter demand from of to products. for adoption X% XX% trend $XX quarter our revenues. of and benefiting outgrowth XX% of XX% through revenues distancing, market audio, revenue basis. expect of During supply total in rapid solid million summary, Group, leader, pandemic the our Group's the now

a particularly are and the move towards the business encouraged We voice-centric improving by future. momentum trends,

in confident us position and solutions voice, are IoT our for long-term revenue well that We sustainable leadership AI growth.

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

Dror Levy

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

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

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

turning the the end million, increased increased the Now of $XX.X $X.X of days $X.X level sales. of Accounts receivable representing at at quarter end XX million days. the million the sheet. end to Inventory quarter, to from third quarter to of second the a of balance at XX XXXX of to the compared second a representing slightly of million $XX.X level

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

was and property of equipment; marketable value SoundChip used that change purchase $X.X due working was quarter; and by million the of million the was Our during $X.X the $X.X during cash the closed position by $XX.X marketable securities. cash million used of amortization affected of of was to for in market cash operations capital; used cash of in of acquisition following: a for security was million quarter changes and cash

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

the Our revenues be are be the and to expected to expenses in in the fourth follows; based XX%; to expenses of of be acquisition including expect the $XX expenses, projections, quarter XX% are our equity $XX margin and million in $X.X financial $XX be of the of are to gross approximately $XX amortization the $XXX,XXX compensation expected shares range expected operating million be basis; million million $XXX,XXX; is income expenses expected are impact range the as million; income related be in we range to to to range R&D expected in of range on to approximately to expected are million non-GAAP outstanding to $X.X million; to XX.X be $X are million; taxes on shares. a of

fourth amounts $X.X million, Operator, projections million] the following marketing the include for intangible line the acquisition; [$X.X $X.X the quarter sales assets also compensation include expenses million. include of goods now Our $X.X to $X.X like million of and $X.X would $X.X cost And forecasted include based million, R&D and intangible up to G&A projections questions million amortization please. for to the open equity of the SoundChip And include to $X.X assets. to and million, and includes related million I answers.

Operator

of first line Our Anderson from from comes question Instructions] Charlie [Operator the Collier Securities.

Charles Anderson

then I noncordless wonder It the like it'll cordless, on Obviously, have to segment commentary start the of past changed. it sequential that's underlying XX% a significantly of declined directional you some a year-over-year trends the anywhere And year-over-year. on want be guidance. and like segments the I can sounds years. of XX% from give in to if on some looks few it's that, up elements though with basis. within the any

and got year-over-year wondering outlook if the medium-term And could terms follow-up now to in segment So of that. sort I've what after view a as that maybe then you of short- trend? I'm speak of you

Ofer Elyakim

the question. for thanks Charlie,

part let of trend. start cordless with the the kind regarding So the last me midterm

in quarter. are fourth you've indicated, up expecting kind cordless going and into considerably resurgence yes, for So pick as of demand to we the

fall based quarter. also, have sequentially, visibility be kind But also level up should we level that roughly of actually I above demand, really with respect into of and So of address it quarter inability much should also actually be the to on believe the believe strong or should continue, don't somewhat the third actually that or two cordless. the fourth fairly our to of slightly this demand following coming the demand the quarter. We all

to uptick moment supply and with peak at also that components is we holidays. the OEMs looking meet now and what this is chain whether and the what on based just capacity we the note of the So the are and in period at are demand at after perhaps the companies, associated running actually everything seen, fact is have inventory. that we see from that used for storing is can But holidays kind being

these a So even shipped air. are products lot of by

fact on are there this widely So out in on replacement we a new. based that demand and it's really is old like voice of the device the topics significant lot cycles people that through going that calls, some based probably actual of discussed, is increase used the with

to Unified with this a So was in on cordless. is recovery And I would part, respect nice so seeing we're that indicated. Communications say the other as

industry would And the say, what I So will still at to seem inventory right the market probably depleted, what QX into I than that of But does a definitely expected. see again, levels Yes, rebound the I excess that but we that continue originally today. not increase that came least is think very a we now. lower showing it recovery it that strong think we regular next decline and an of have anticipated. a year, information the XX% than recovery from was faster revenues to the

growth is and this encouraging. should year So both which a over believe on categories. show we the two products, on is SmartVoice And SmartHome number year the

this right now of we So are. where is kind

I And so I questions. two hope the answered

Charles Anderson

have a been business in of volatility the stable mix. margins lot then your No, remarkably follow-up, absolutely. And my gross despite

you're years margin of sort if a there. yet what's a going about That XX%. a maybe to able about gross ago, talk you portion we of on cordless these can gross of perhaps sort thought higher was curious I'm margins the lower back bit but go keep to So little mix had it's if just

what's on just of on a out curious going color I'm little of So there. bit sort

Ofer Elyakim

So with to respect gross our margin.

vis-à-vis indicated, SoundChip, XX.X%. SmartVoice would a and are these well contributions as these higher So have are mainly the originally as reported than of of some non-GAAP reported revenue kind of as such royalties. I But that And indeed, would say contributions of we the composition mix. from what we large acquisition

So they're much with not associated goods. of cost

So just such these better mix. than I these gross I health looking changed are the better of providing much expected you shows higher value a I margin two different average. that And for forward, that nothing work it two that the kind customers. say are between the to would product our way and margins than our and contributors average we're than corporate products. from or gross the think would say segmented that has the the

the much lagging running while and we And gross and to higher margins average. more could better corporate to But forward. So running higher are I cordless improve. do than IoAT businesses the trend exposure continue profitability mix is even product, that the below that want still the with going as average, at and think with see

Operator

Pyatchanin your And line question from Denis Needham the Co. comes next & of from

Denis Pyatchanin

behalf asking of on I'm Gill. this Raji

is, and So will what the do drive recovery? Communications you to this my guys first question Unified you think recover expect do when

Ofer Elyakim

be expect of in below slightly from below we meaning year, indicated, quarter. we as December but to the recovery fourth expecting that QX already the to quarter a expect fourth increase or last significant see we're or sequential the QX. recovery do the see We still still So And to continue. a October, expect to quarter,

when are as recovery as large is expected. two, some return the for as coming recovery months witnessing, we're ago demand As I constraints with And ability were back think demand we about spoke indicated would a not the has indicated, is I better institutions. had sharp deliver gradual all about than and a seeing. office. to office on-prem the to the beneficiaries front When A, we call, three earlier, think I've was respect as is the enterprises one world, think but thinking from our parties And not the better this with past today's investment. of that governmental we're to And perhaps that are using are when of sessions in recovered also as say early what as tools, even there as using And with well people from product but last real much Communication as the the drivers, we having March Unified let's until technology, that home. on-prem the colleagues. the highlighting employees to when call collaboration In the month, that from endpoints. from, the I most you're conferencing for in neglected mainly I Moreover, done need if office, cases, were kind and a say, there number collaboration you is working third of return product.

collaboration And need so the for more endpoints increases.

purposely the of the more has new enable in than that much very will being of to person suppress better And to and the advanced robust ability quality Meaning, ability close included some high to having that also everything having the best desk of a so the with for other work PC, rather I algorithms the the camera addition, with that, tools of graphics capabilities, think hardware I provide microphone the kind call and the productive built think person, and all these do to way. a are array much drivers. in we to noise more And environment. a with track possible the putting

think this So of really that contributors I are driving recovery. good these all are

Denis Pyatchanin

and please could next think what on those? SmartVoice you to year, attach how we expect about maybe bit little speak then smartphones should see for you like the on question, for electronics rate my size do And a from for the market follow-up and personal

Ofer Elyakim

to we And whether I a want for I market, think for this felt as PC studying, other everywhere for tablet activity. screen, work, every the on are So seeing growth. that year person needs significant that is say it's any this

this the conduct. Communication segment, purpose market designed a adoption voice these Many products or really these Unified of the these applications. the And And voice on to of of on of a enhancement. the the quality, think for these terms of we're significant the So go as much need is to made in not primary greater interface that in really seeing in is using were devices user terms as video of voice conference well rise. devices upgrade I

that are we're across these different drivers, I for industry think, So customers. and our key seeing everywhere that

reflected mobile the would the smartphones, of, think headsets. we're on not in and high-end edge today user midrange also of say And on of many penetrating interface phones, all into capabilities if smartphones. AI I the most, voices newer and also I are seeing in that

wireless are the stereo to enable functionalities to environmentally lot more also capabilities So better of aware embracing buds, call be a much headsets, what these many experience. the a listening true and we

actually a certain perhaps will signals that hearing to well person be So enough. amplify not

AI that lot the so of et bud. next-gen the lot et these for all translation, cetera, And a ability today simultaneous cetera, do are of are sought a features VUI, of to and after highly

Another professional we're products seeing for and more area working embracement class conferencing. as very video a professional, that this voice of is kind nice of discussed

be sit you really have person can that to to from so the monitor cameras in track heard. next to don't So afar a order

you even will device. afar can around, better you But roam actually from monitor. front side when You well see other in can comfortably of you as still they your as see or the the sit

VUI algorithm all and so embracing our around are devices of the are capabilities And these the SmartVoice front.

think, all that So for is in is, I next cards the of year.

cancellation, significant our the three which been -- into. ambient actually a increase the launched a we're is that technology are products entering headsets noise think, now two And market products will incorporate I products, inside. already with in as, our with gradually of number that have well As

Operator

the Cowen line Company. Your Ramsay of next from question and from comes Matt

Ethan Potasnick

some for particular regard This you upside in wondering, smartphone just the wanted I I is driving SmartVoice Matt guys the specify business. with that follow-up was of momentum? the then in and could to past application. guys strength Potasnick And kind you to Ethan Ramsay. on buckets wins of if some as or quarter? versus the was between wondering out of smartphone you stats non-smartphone I parse the to breakdown two in sort could given have any

Ofer Elyakim

the around demand that incorporate tablet, segment that drivers that categories for PC significant our as the SmartVoice growth or So I volume the think main increase were, in area in increase are for that SmartVoice. indicated,

So that the voice, wideband I the quarter. the to cetera. cancellation, I noise VUI, was wave it cetera, capabilities market, a third number think the And largest the super et was category in And with camera think incorporate this hearable third, two side. voice do so et cameras was

models wireless technology. true that to our headsets today three are bud that we from So shipping in technology from incorporate to that some additional we're headsets

are these drivers. main three the are that So categories the

With the is the respect the say would smartphone diversification and for XX% of would by percent to end I I versus nonsmartphone, also the of year, key be of customer last that is the like I SmartVoice and XX% will for really of perhaps say application. say mix as the by mix, smartphones today, the there the that that we're really customer the of would diversified. that think not is franchise indicated I category. where is or that approximately mix. better customer There mix customer one pace quarters less the mostly couple in today much the this XX% than

Ethan Potasnick

of And on know then of customers that Communications, that guys of some improvement? to communicating some my of kind improving fluidity I kind guys you the are the you kind the I follow-up large trends. of some the underlie as are of mentioned things But environment, given kind of mean, Unified what that guess I

Ofer Elyakim

is I chain. supply the cautious A, very along and still it would much So, say runs that everyone

we our readjusted supply levels. So have expectation last about for that demand chains inventories the to a quarter, fairly decline, to and sharp be reported fact new

that what and seeing seen we're we quicker rebound than have still and is stronger this we what However, anticipated. happened

we're recovery, where these depleted. demand in seeing or completely was, to are where I a think want places I sharp rebound the today that say, areas

there to there building perhaps of all are also in that are see are participants by But pandemic, and more the the best of they these from a will future, reports winter, least are done, we're certain during market happen that we've from badly and the And mentioning that putting et that buffer consuming. of protecting that parts I understand rebound. market disruptions, an think is is that the most stocks the participants, and hit supply But cetera. against as now, first I the second think in calendar checks improvement, year cautious I are or the said, you tone. got something recent the Governments shipping, quarter a businesses pretty chain at right They're the almost to we not so consuming. really straight And some going can that customers.

again, So to office level at that The in is will the really pre-COVID not least, hybrid is think for a same recovery the investment renewed relevant last this I think also mandate But need that the was that it where model that side. office. driver a I returning on-prem this but are the for the not it's rebound. people era. And on

kind I these say trends that So recovery. are the this are guiding key want that of to

Operator

question the Schmidt Lake comes [Operator line Street. from Jaeson from of next Instructions] Your

Jaeson Schmidt

with canceled out. seen sticking Certainly, at that segment. projects But Communications been have projects some you been all? the Unified pushed probably Just any actually there's have

Ofer Elyakim

being to be have we canceled. not no, very So seen frank, programs any

think invest really On behind and reality professionals of their more with fact devices for we higher and adaptation kind kind need fast split market, works fast and very are et office. soft into to the refresh this plans certain need that customers to this very build the I type clients, the the sticking new also contrary, models higher actually intuitive, devices. seeing And and cetera, that quality, for of of productivity the for what

the a of kind with the that of of design work for lot over we're also video nicely the portable a so TV, with are home the And the screen, with PC, a kind that set-top with very top devices that designs, integrate like are the prosumer, from box. these in way seeing

their desk, on So wherever and it it the achieve conference at it actually the room, screens, screens, bring to look that office, outdoor, dining to levels. can the same feel, room, quality people and really take communicate take a small large go same they

project so the need projects the contrary, seeing more product this new So we're map road really people I which that hybrid, fact on be of take to seen that kind that are to the want off. basically opportunity, products the is any on and not the and we both kind will far, cancellation. actually And have of the say to adopt and

we're trends these that seeing. the are So

Jaeson Schmidt

as in here supply And just up, near constraints a you then some follow term. mentioned the

the could what line you having top quantify in impact to of QX? Just sort curious that's if

Ofer Elyakim

So or line. this those constraints, been probably Without our top a does notch cap two. our guidance have up would

definitely So there is an impact.

products constraint, is think that supply demand. not components. terms think we kind DSPG It's pretty are it's the there also fulfilling certain have more limitations I really industry and just chain not that of So And of I this is related basic that supplying in wider semiconductor.

-- very So of getting partners demand the there's is And definitely buffer. that. secure, to that running supply close have a and chain spike in to at the capacity or terms real capacity demand lot you something in order our maximum not of to really just and are need

that X, think I partnership so a in have to back supply really And and strong chain fabs both work end. with the fortunate our to really we're and Tier the

hope is as and do environment during from encouraged will the of demand But of now, we we hope couple meaning we said, and a business will be we excellent improving seeing, lot support. course constraints in And our fulfill months. QX. so proven the the months, these right able that with that the think supply we're next where QX removed be next I that that And are we we're that a chain do couple getting are. record, And to what of we're clogged. of the I the big into is But track

Operator

And line your from Suji the comes Desilva Capital. of question from last ROTH

Suji Desilva

all looking about takes, puts think of do trends first terms of think should ahead but to relative to and seasonality? are typical the first the you a quarter not would just quarter we the normal how year in time, typical versus happen in seasonality? outlook, what to 'XX, So the Obviously, typically a given understand,

Ofer Elyakim

we far, and as roughly of two our today, quarter also are so at So eight months out is weeks. first pretty average least the time

don't can right did tell from ability into to from really visibility comments demand our have today, our say But we now, that, supply. we than QX. is So excellent higher you what

that one are looks matter seeing -- a just not to of momentum not We very quarter. be just so shortly, good

we're I kind seeing beyond But period optimistic of trends. very will that any So is, to about I perspective, kind real the indicators a backlog the too provide seasonal granular of say, information. good that exactly early we think QX. It from should be

the believe trends. We we means needs. in feel real for QX-ish the really That of are say kind starvation is that they actually cases, fact And So pleased to air. product. are we're that at also see shipping of there that that see of our the very most and that moment, that I we are there there the want customers, don't by We optimistic trends. out type just by

So perhaps I think it's and holidays beyond.

right more very so granularity, lot that a it also I this good. continue say But early. a after. looks should us like makes But that So far, provide real in period to to optimistic little the bit want

Suji Desilva

there. What coming on and the ramp be from there continue focus is the you here? quarter segment already specifically steady then few Is customers TWS segment, ramp inflection up? to on and what the those a integrate it ramping as Will forward And wireless the headset opportunity? -- revenues the is timing a an when SoundChip

Ofer Elyakim

SmartVoice these revenues, the under on the segment. and are hearable So reported

not quarter, would we SoundChip have of best that this kind perspective, a I nice, quarter would I us. during like the a we're think pretty because So from say, had just did quarter starting. acquisition, it also of we that standalone for just and But marked a yet see record for the again, also hearables

are the So this really market. these inroads into

start customers year of a run trend rate, when we see the going is course with of more that think better probably to of revenue from line should ramping better to and respect ramp kind much XXXX. second next into half I

this ramp So faster take will and place. is where more a solid

Operator

Back this further time. no to at are question There Tali. you,

Tali Chen

in in will XX DSP we your look Conference. interest to Virtual for you you and Thank participate ROTH you. DSP to XXth, Group, report Technology for in in and Group back On November Thank days. dialing forward

Operator

everyone. you, conclude Thank That conference today. does for our

You may disconnect. all

DSP (DSPG) 2 Nov 202020 Q3 Earnings call transcript