DSPG - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q4 and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today, Thursday, 4th of February, 2021. And I would now like to hand the conference over to your first speaker today, Tali Chen, Chief Business Officer. go please and you ahead. Thank

Tali Chen

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

about increased during segment our long-term to I optimism Unified and would SmartHome with solid the to guidance update recovery voice-centric and growth making like a this that these conference from DSP about return technology begin, to you for be revenue call, industries; user customers; leveraging voice we in strategic first ability Before forward-looking about the assume trends optimism to wireless the and remind statements product statements. Communications financial sustain about for XXXX; pipeline ULE no quarter key global arising will forward-looking obligation we growth. security including to growth; We as interfaces, of pandemic optimism Group our XXXX solution communication; of connectivity engagement XXXX; voice in accelerated our

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

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

Ofer Elyakim

reviewing and fourth pleased year We're and morning. and quarter we results lies financial everyone to this outlook first to short with fourth XXXX and I of detailed on and our hope for you business opportunity on the the that the some Thank Dror comments our earlier our finally, then of and a our comments provide read a begin progression for the like results the you very while, XXXX. our the In for to with plan for I provide full today. that you quarter which year release, had you, for ahead. thanks our outlook. full context make momentum by would Tali. Good and will the with joining our morning business us quarter performance press the distributed

innovative Our and came the excited the product on our financial are grew fourth role by exceeded results quarter that across following We're our guidance playing demand of highlighted most in the our emerging Revenues by better-than-expected These our momentum newly pivotal range diversified the technologies improving XX% year-over-year trends. metrics. X% $XX.X business the ahead guidance by of solid our of about marketplace, well million are and sequentially. offerings. and surrounding results outcome voice-centric

home. two, demand products home, our and an which deliveries, trends high elastic smart achievements XX.X% now and in VUI proportionately productivity voice to which first supply broad product annual mix. fixed home. of benefited from cost has a These quarter. a portion lockdown user Number From diversity following voice drove lower Unified quarterly a the the margins for expected Group performance chain record DSP enterprise. drove and of non-GAAP adoption Unified made record led solid of further in voice our the of The services or that ongoing products have a gross offset product high-touch by portfolio the Potential invaluable wide Communications offset use And Communication we product demand faster curbing revenues interface beneficiary array user of segment X% adoption of volatile Number a cordless the interface million continuity primarily for health industry-wide business and must-have hazards voice for these XXXX with work the for to and is IT of XXXX, constraints this collaboration much in fueled home weaker three, interface. segment. perspective, in technologies Unified year products versus preserving from approximately The have and are shift a as and with SmartVoice demonstrated products due from enterprise demand calls. and for $XXX.X distancing restrictions social essential to the a of $XXX.X decrease, line, on-prem the as cordless associated above-mentioned pandemic. of products technology essential accelerated voice-centric than million representing the result ended voice-centric evolved have trends weakness surge major increased the has global greatly work of proved strong into the thrived recovery cases. usage a while and Nevertheless, is The a in communications spending of from phones at during which become Communications two

consumer the positioning new robust ULE in voice AI and of Looking our a number in ahead, X and us across franchise start heels categories, technologies accomplishments proliferation design the positions market. These as in as momentum The prime IoT IoAT SmartVoice We're of a we solid a well the businesses. are and collaboration the as the with engagements solution the connectivity coupled establishing record off a successful the by market-leading leveraging market, a year in video position for of achievements XXXX. home major leadership Edge in our voice following security evolving key of to our XXXX. demonstrated for customer Tier pipeline proven on solid the

segments. SmartVoice. Now you more the with in I'd performance provide our to like color with product on of each Starting

generated During million of quarter. a a third X%, the SmartVoice growth sequential basis following of of year-over-year record a revenues while XX% solutions, from sales reflecting quarter, on down approximately $X we fourth

voice-based second to mainly the was half certain in driven segment representing We favor interface restrictions, record are of accelerated as recovered user $XX.X the by interfaces to with by pleased with application consumer despite due the demand revenues trend the shortfalls that compared of the the ending This for shelter-in-place in growth demand And demand strong for a for SmartVoice a underscoring products UI, impacted million, of performance half incorporating in year product weaker first based voice voice nicely of year. preference X% devices XXXX. an increase during in shift XXXX.

and complemented demand the wireless electronic market our ahead key quarter, to we offering power digital best-in-class new by increased of product commenced SmartVoice DSP low franchise including acquisition shipments and with drove launches the design continued new as strengthen leadership growing grow hearables market with consumer such of production codecs our securing for During wins established by during into rapidly our smart and ANC. headphone. and where work-from-home leading this the in And products, OEMs segments, stereo, and environment hybrid entered over-the-ear XXXX, through we hearable true mass SoundChip

driven are and During other our tablet quarter demand. powered this SmartVoice year marked our tablets And There learning. headsets solution enable now and VUI tablet. products a Edge this during voice-activated launched for our models the voice-activated brands screen-based its leading retailer a always-on XX including more DSP different Lenovo work-from-home as solution new AI. of TWS and TaoTronics launched XXXX based fourth US leveraging voice than remote leading on growing use by major record cases. to AI and technology. screens Group quarter, benefited two is from Number by voice vendor the SmartVoice

smart and consumption. customer of HAI leading product wearable the technologies Lastly, platform down to of while the and new raise version brand power These of franchise SoC. advanced and number strength relationships quality illustrate continuously the ability commercial a a its on introduce our and product the new leveraging SmartVoice wins launches depth our as our launched record and performance, driving well SmartVoice as customer of our bar simultaneously diversity

wearable, our in solution products inference areas believe The ANC a and our will open with introduction member of Smart is learning mind IoT the at machine highly to processor. combined power low-power DBMXX for we year, optimized on AI applications. and an and codec SoC the a and the family. learning Edge The expertise pivotal cost SoC of machine hearable the the with processing SmartVoice growth our DBMXX AI business based applications. announced SoC, scalable and time shorten ensure DSP proficiency with innovation SmartVoice of our of innovation of SoC and that During efficient and simplify is processors, and the mobile, technology design market and signal AI that availability low time We new be power product a driver network architecture the to devices in platform our and business two dedicated to a new exciting voice will neural rapid a newest for of change and ongoing

this of speakers, a large a cordless highly third off-prem. adopting incorporate Nonetheless, year-over-year devices representing the expectations. of less model confident the on favor results We're trend XXX% by driven XXXX, investment should of weakness and representing more. a a for that shifts year in intake that In the Unified headsets, sharp fourth meet the XX% recovery ended stalemate IT enforcing globe the robust product elastic quarter. quarter, typically a Moving toward work-from-home to and decrease end a attribute decline highly more and of change around and by budget quarter sequential XX%. disappointed businesses office institutions by the shifts more and and remodeling environment in in This desks to revenues in increase our $XX.X $X.X remain government in Communication gradually the budget office This the on demand Unified on-prem Moreover, of the fundamental rebound to segment recovery approximately enterprises products. work. faster-than-expected workplace and segment. demand as hybrid We decrease and returning endpoints renewed better-than-expected supports during a serve evidenced technology of situation the revenue year-over-year stimulate clients, of million, performance continued loud infrastructure and higher to from office to including: broad we soft user Unified in from these generated to phones demonstrating Communication for on-prem are created we requirements and revenues with fourth traditional trend total million remote Communications by

In pandemic support new went to this the year. has market transformation created opportunities digital the through addition significant this

and product the next-generation design systems. high-quality serve expertise tool remote lead to the voice for categories to rising with device U.S. video key on leveraging announced in and hybrid response has the its people wireless best-in-class shift and grew the The Teams new DVF collaboration and enables pandemic. work working to and raised analysts to defining for over video need hardware for collaboration a have Headsets OEM headset of models. quarter lastly, And well new some purpose-built those selected Microsoft virtual of largely according collaboration. software in for our demand support selected trying technology. rapid such its reflect collaborative coronavirus process and leading experiences. as that communications the by voice Communication for solution sustain our XXX% a the Newer And such for high-quality in and DECT to as Yealink incumbents collaboration. as X A Tier based are high-end to productivity. Unified slowdown look while And our working the win equipment demand our enhance this products this fit our hybrid and become high-definition video building improve vendor enhancing environment to XXXX successful in collaboration engine system, for communication targeted players, designed A trend. achievements to the high-end hardware

business well segment Looking beyond. growth position for demand in improving solid the forward, these new year and wins pattern Communications revenue our this and developments Unified the us

by line, revenues sequential a the posting million SmartHome year to Full of $XX.X a increase on SmartHome with X% $X.X Turning year-over-year record year-over-year. revenues and during generated a grew million XX% the of were quarter we product and quarter increase. fourth X%

in breakthrough a wireless larger telecom much the the more successfully a made home CPEs our DECT/ULE SmartHome year technology calls of global security and We Furthermore in leading DECT drove as business. was our surge solution ULE base. creating XXXX connectivity by key smart a for importantly, and adoptions providers ULE from service voice for industries. More install established home

for the unmatched voice. its bellwethers pendent at DECT/ULE solution phone hub leading our our chose offerings, includes DECT/ULE technology smart market next-generation solution security U.S. and and a with for quarter we fuel assisted superior our include diversify to to During the an with quarter year we and IoT that and our adoption for engagement and ULE X-way strategy industry for leading European SmartHome of brand including solution our growth ULE's native pipeline brands. beyond. its momentum provider providers behind system and this security ecosystem telecom wireless by additional for expansion demand interference-free products update global an faster continued important indoor audio spectrum IoT that range The that to broad recognize of the a length wireless These and characteristics support selected service Hi-Fi by care cordless now streaming leading chose will cordless its robust system. And as voice-enabled during expect grow vendors strong DECT/ULE service with pillar stronger-than-expected DECT elderly devices, The ecosystem and for we additional serve experienced the DECT/ULE fourth on products. our is a

Such cordless depleted and the and Social pandemic resurgence a driving home, outgrowths revenues heavily distancing, in demand, $XX.X surge vendors million, to and stimulated XX% to basis. in other demand, completely This products. work for voice a expediting on from channel invest remote increasing and inventory. in XX% sequential shipments retail of forced year-over-year up traffic demand unexpected and propelled learning,

For increase the year-over-year. of revenues cordless X% generated full an representing year, of $XX.X our million, business

The of expect market living, Group, products. products and the as native on for situation upgrade as for and products, across With users product account quarter, the increased different the environment. role constraints; while guidance hybrid the we outlook taking emphasis continue, inventory forms this leader of home year-over-year our the first $XX supply to other an lines, now, revenue home. on the looking million distancing quarter. our undisputed implies range Taking as voice And protective ahead interaction XX%. future consideration, to revenues expect midpoint to into the of common refine strong $XX be demand human to phones ongoing is voice-centric a our strong such for office the our from cordless as to DSP most customers, is environment, business restrictions, benefiting their into is lean and update placed first million. And And social lowest our first of our the demand irreplaceable. the in greater severe and denominator dependency quarter range voice-centric of growth for in the on at the cordless the momentum we voice, of

first will to performance coming in technologies and the for a driving We technologies. leadership new businesses in about solutions our heels solid this XX% that a are XX% expect our DSP quarter of future of record the products voice-centric summarize, towards expected revenues. for IoT that account To We're growth to to voice pipeline AI a IoAT is demand our momentum our our wins, with thrilled will and contribute shift success, future number confident on a customers Group's and business design of and year. of that revenue we determine are strong

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

Dror Levy

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

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

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

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

as cash $XXX.X the Our of million XXXX. during the level XX, marketable quarter increased by and $X.X million, December were and in securities fourth of

generated and million was cash and the $X.X affected of from in of the change property positions cash cash and for by million $X.X Our securities. following. million We purchase by cash was operations. multiple of of million the provided quarter of multiple $X.X the was security during cash equipment. and used of was exercise stock of value options, $X.X amortization

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

quarter to of million. impact are include projections and amortization first as in of equity-based million expected follows. the be $XX Revenues Our to the expenses compensation are expenses acquisition-related range $XX

gross $X.X to in and non-GAAP range of to our the expected the $XX $XXX,XXX. range approximately XX%. of on expenses be income be in expected expected to expected taxes range expect range million. the margin million to is We are to the be Operating million of XX% in The $XXX,XXX million million. $XX to to on income are are R&D a in be basis. to $XX $XX.X Financial And expenses be of

be expected XX.X million are to shares. Our outstanding shares approximately

intangible following the million $X.X million. and previous $X.X include $X.X quarter and expenses $XXX,XXX includes that of million approximately assets million. for Cost million $X.X approximately quarter our R&D equity-based projections to amounts $X.X include related $X.X Sales million. of marketing amortization goods include include and includes forecasted and are to million compensation projections G&A first expenses $X to acquisitions. also of assets intangible to Our first

for to I Now, up questions Operator, and line like answers. please. would the open

Operator

gentlemen, Thank first ask and Lake begin Schmidt will Instructions] comes you. session. line Please your [Operator Jaeson now of Ladies Street. question from we the question-and-answer Your question. the from

Jaeson Schmidt

if my of think could seeing you the on questions. way quantify your just of on if following Ofer guys. and what a had just on well? as comments revenue you impact curious Hey, QX is for how sort up there it continued taking quantify constraints, much impact sort that to will QX supply Thanks

Ofer Elyakim

Jaeson. Hi,

lot supply fairly where the on in So, we're of chain there's of demand supply supply a the constraint significant so midst comments, a and available outweighs the capacity chain think restrictions. I

that of customers. we indeed fulfill partners. We is magnitude fourth But of a say I the are that, revenues. with quarter probably materials there With on the our to to and certain revenues, situation XX% would to that let's are extent chain QX managing our that the through and of same say certainly supply support cannot the respect around think I of supply XX%

Jaeson Schmidt

wins helpful. sort Okay. really within seeing record of That's mentioned IoAT. that design And you then

sort most As on where at design could XXXX, you activity? seeing three order we look of the the rank you're segments

Ofer Elyakim

Sure.

we of do Tier a leading SmartHome. on think activity I see X vendors with design deal great

and for we're on reaching categories. and strong I interesting leading our to activities do interesting encouraged think translation very of a in where that products have growth the a way SmartVoice see really also revenue very front, hopes very win very a design strong also the we

So DSPG share video the some and or so going of prepared play that comments as endpoints we indicated this also we will type in will we that to on another Communications our design what I as in I facilitate developed and that And hardware to the incumbent Communications also home But as usage all hybrid work-from-home secured spent office. on and part part the very future of continue as investing And and voice-related adoption and endpoints the front, role in only fairly I endpoints Unified video both that looking the office is the despite model the is time wins of to most our there. into and well is in are terms Unified technologies going new lot play I will fairly in where hardware accessories. more newly year believe on significant of of new traditional of work be have customers excitement in of we're to role there a interesting a external in encouraging that I where segment are some a to see elastic and refreshing turbulent look collaboration customers, to this which are leaps endpoints. think, new that forward with launch hardware segment, a of were is kind think think

this So is shift budget I've very to I a Communications that much way with enterprises in also think to and expect a do see this as exciting the are we going Unified indicated recovery this year perhaps year. for IT utilize their

So I hope that covers your question Jaeson.

Jaeson Schmidt

that's you out And on last pushed understand one are just up from relatively track? the No, into back on queue investing. go as timetables me following segment. the or jump get the comments are and they still far continue launches helpful. then really Have on just as I'll customers seen to UC those I

Ofer Elyakim

So what we is that everyone to can I pushing from tell, think trying the forward launches. and expedite

reality by hard but these think, And hard screen. it's plans, of very because space. designs to do not during not hardware people same very people and these lot reflection or year I are where sharing of wills these bring-ups are when sitting in the spoke organizations a we of just last a debug it's to a As design

on time should beforehand. And most everything design launched But see take longer. hopefully be of we programs did the these completed -- we so and cycles from believe

don't we change. see a So there

because delays just of think designs. do -- kind conducting it's we of a different of way of the I reflection such see reality if

Jaeson Schmidt

color. guys. Thanks Okay. a lot, Appreciate that

Operator

Matt from line Cowen. question Please ask Your of Ramsay the from your comes next question.

Matt Ramsay

are this hope clamoring same time, a there's everybody very is bookings of customers tightness you well. that and Thank of, supply. around at that sort are I I supply chain surge the am the for and Ofer, a ecosystem in companies limited lot of much. going through --

talked at your supply. you in you business. your particularly a for customers, being script most channel same the about the in guys So lean limited time, And cordless fairly of on

level what think things -- that the help the channel is rebuild can that guidance less of still maybe than of you to I going out customers? of are how March on trend how Thanks. indicative depleting? and starting or you flat sellout that greater that is is year to are revenue you just are the we inventory than another from little figure I'm you basis ship sense? through could a if guess a provided So for said bit that much to you're we're that trying makes way, is or or rest your inventory

Ofer Elyakim

thanks sure. Matt question. Yes, Sure, and the for

of, do little So of when at and us and as of for a a that we with you maybe, and background kind backlog look bit our you so now you'll number usually now weeks. is problem typically average it's wider that and a two know recall follow visibility probably DSPG on our months material. wants years or everyone eight -- Right because with now phenomenon there phenomenon not I a think it's visibility -- no

we needs product a the channel needs query you not inventory. – certain and what with necessarily where but go and a value-added that resources, are an measure situation cetera. Again, know, check, of covering to are doing certain Now, and to our better industry-wide checks type et the checks of -- go and customers vendors the understand understand better in to urgency is order

expensive And products see cordless were tell, roof from the by we flown we than went fairly at because that what so transportation can fourth a products through that least by quarter, air of in of the cost. these sea, cost rather the meaning

that Unified traditional also some much lead side longer are times Communications where than the lead in times. We see of very long, the

of most line QX and at looking now we for see kind do trend let's when part, think the so And into the that we QX of are I say January.

So are lean. believe inventory far levels we that

included to I earlier, are higher. we guidance much our said much, at guidance that ability The to try it compare customers look the Now when versus as and coming from the I is needs in I revenue demand, provided. supply basically

be? closely to but you, would ask I of supply. at so what where end for assess should material accommodate supply. is are a what these do try needs our since that, to will level we that Now tell as and the level of trying do same But missing to really our best would that or all inventory. have tell, of I say if the can tell can our with are from in continue we're chain the cannot partners given very that the work and dynamic inventories me demand with is where well supply supply the March, to needed very And fully lot now inventory what higher not levels measure or we you is This in. of as understanding and stay than order and situation better we around I the we're best to customers we we significantly can to can able to a checks we

Matt Ramsay

investing new area would had you customer comments tough, ago? this I the versus to like conversation might can take wins of might versus hybrid appreciate is interesting it's offer totality it just I of new potential and to this relative on about sort for was in with that's numbers margin in this of the what Communications those I quantifying just ASP nine is to a the a market. been unit -- environment, Cisco thought and lower you look have No, effects I'm you're others model about if trying ASP persist if we the have maybe appreciate some next base I Ofer, question but paradigm? the work-from-office, quite and months products And designing on unit the high likely work-from-home transient to and margins, Unified so that know color. those My the some curve understand of how I recent under number wonder, some years. comments of

Ofer Elyakim

Yes.

newer these to endpoint a supposed hybrid parts. So as cetera. split say, that traditional the in on experience is One the is the such upgrade second market. two are UC that type the my of client wins part Zoom in Teams, endpoint answer way designs WebEx, or And all, user using we're winning I would first a soft et into when reinforce of let's

new we the we also we in UC wallet that today into the business existing are ship, it usually is market of in can OEMs to used we past, arising collaboration strengthening our better. So, and market the In portable, type at office. only early once a the and expanding see kind at OEMs. on of content. et we'll some dollar say of devices And performance But the downwards. those history, going the traditional upwards that the the way not more kind relatively would content, revenues that we part home, There our of most are by cetera, and these penetrating in and also the share be for we'll respect our of unit volumes provide and launch discussed understand products new share as it's type content in get we I that with

now, be products these but need be to once see are think adopted here content the we'll But to our high, going are is think expectations comment launched right denominator and we is able cetera. I that I going proof the to the et up. common

Matt Ramsay

of It trends? comments Dror, for any just Got sounds bit one helpful. given trends. guys last funnel it. churn on for the That's in OpEx opportunity you these me. a like good And

expenses Thanks, be thoughts guys. helpful? to So about any how would model

Dror Levy

sure. Yeah,

XXXX. in our or would basis. So I levels, we quarter than the less was on say quarter slightly at plans OpEx the these first it million overall are a higher see believe into like And you OpEx full going XXXX that in a look $XX around of quarter fourth we when of year should for higher, running non-GAAP where more

with to to is I we first is quarter. where be aligned the $XX which have think less million, this or expected $XX.X million more in

Matt Ramsay

Thank All perfect. much. right, you very

Operator

of Please ask comes Capital, question your from the RDH. ROTH question. line next Desilva Suji from Your

Suji Desilva

each take the guidance tell segments? expect the maybe what quarter of you for first you and us Can

Ofer Elyakim

Hi, Suji.

those very guidance, to of, expect segments see did say dynamic we the and exactly both each that So cordless it's and break did of to the to, between want that early we to for would down how in. I do IoAT But revenues say non-cordless. try us you the When it kind say growth I different peel we're in we still ingredients, sequentially situation I what total say year-over-year. would given rather in right by the now

Suji Desilva

any all it's would into that, know thoughts there Okay. would Zoom-ish, and physical a the And combining just, we seeing there for on, It segments going whether factors new customers' That's interesting -- an thoughts one? at soft a and that just I with you Is that work are they the use of being any want PC or or unified helpful. and kind form co-related kind a higher-level of, these I just device with in devices the I in cordless to argue of, devices. there's be that to kind seems communications could helpful. on Zoom there like a mean, be soft being mean, it logic question. versus clients home. a to office trend but form And guys then perhaps phone, function maybe you the factors

Ofer Elyakim

Yeah, yeah.

So absolutely.

as improve we way imaging need that soft well a a the you perspective. lot common believe because into of video-rich that across media clients of development session. it collaboration situation will for see PC of and rising as do did the front of the as order of devices, the do need But an the as I audio a as video front, for lot a to a in well from sit that be accessories side, a both the widely enhancements front. from significantly that accessories come the to the see And camera these the type from everywhere camera fact in So screen really interacts the both we in able to don't audio new were will go of tablets denominator and and see having we the calls embraced this from significant whether it's

one as office ongoing it front does of the So and where fatigue increase comfort and in a mean to will really the likely allowing ability be will soft all will of I enhanced that expense be lot or going such that not work It productivity come hardware by of and be significantly that the your that day can less during also tablet. don't from is would But most the enhanced enable more have PC that and on type need think think the to hardware. this sessions I you to you of would clients. in

denominator to I that right common actually cloud is that see performance. those the the not the MCU, is access regular home to via these we once And line hence And sessions to everywhere sessions sessions once these not voice really to accessing a can phone the the sessions And calls. or soft think that, and for actually from to complement that voice clear all choppy the a also and actually phone in voice. those you are these is the really addition or of need all phone calling with cell ability corrupt a quality reason In be of done a of productive. and by from the desk

a will an as that really is camera. sit and beam the amplify regular units follow follow screen seeing camera, a AI-based enable a you uses your well you if I speaker well accessories, will type better will the endpoints, both from and to will way will as we're So system as think -- additional have a in new as to a way new a in PCs, screen the as direction microphone or what myriad that far much will really a of that as or from include system that that collaboration well you

newcomers by that incumbent are being worked the as both So are products all innovations that space. on of and these well to vendors as

Suji Desilva

the then AI trying on segments? look Okay. And this this which the adopt incorporates end interesting forward DBMXX Edge to to which out eager adopt market the design-win the No, of wise most segments I of last to question factors. SmartVoice are those first the form the

Ofer Elyakim

Yes.

of a there think are them. number I So

So the first one is the hearable side.

mechanisms type to listening that more can provide over-the-ear us it around hear when the ear experience require how enhance such be will headset headsets compensation versus type order we much the noise and we ability of and to So and ear. provide we is of intelligence the a lot so off the is much you lot with lot voices of a better ear will the all that true better headset comprehension so take the when the cancellation that mechanisms wireless many for to and the placed around of algorithms in actually in It a of information in algorithms. run

would sound the also front, Another kind be segment. they deployed TV and that the around where in area on of a need you will power. third will the front, And more where the ultra-low be entertainment around the third camera in so be would analysis be capabilities entertainment more market the

Suji Desilva

Okay. Thanks.

Operator

Colliers question. Securities. Your question ask the comes Soderberg Derek of from your next from line Please

Derek Soderberg

start For taking with cordless. my wanted to I question.

as medium-term So year-over-year on year-over-year. up when be we view that QX see updated up, demand it's historical holding is for and maybe and appears curious your outlook return should to nicely to to cordless the be I'm going what beyond the start to Thanks. short to declines?

Ofer Elyakim

welcome. Derek and Hi

are fairly year-over-year with think right in growth respect different quarter. cordless you're questions fourth So the trends this so; we I A, seeing the to robust some around

grow assumption the and nicely decline that year-over-year. is about to of we year. cellular took indicates cordless this that outlook Our category to the XX% a different supposed also that trends And the is XX% about from very of

kind still not an as will in fast the once to how back many dynamics for to full the are I need is get move and see there social office; home/office may And of is older need perhaps the in prediction. and a how respect you use inventory to to situation think of be are bit that use going perhaps cordless of XX% there as we so think return now customers secular that a are to we will in to a And is to medium and line. environment to pushing see of think hard then to we kind less the with -- the way see demand in much decline as of no the as than But trend run Such a as more to to expedited the continue want whenever today this term, flexible very products are cycle. kind one muted levels strong interaction; now probably in this exactly I I that. to expedite a long the short normality work we some working we little more the the more do this people we lean. to don't necessarily more, we're face-to-face do environment and home, distancing from and that material. are that term that the today product long replace need can not we I need XX% kind to the replacement We'll change, respect habits. category where at going say who is With maybe from phone resume

as replacement. be think as the an will today, will that stay they long are there habits expedited I as cycle of

see I that voice what landline. the the respect reporting think to minutes we everywhere new of phones, used, the with providers from service are connections

a adoption like see more we into we've never robust today think voice CPEs I digital seen of before.

voice communication tide indications So in the products. to also more all do the calls translate demand of rising voice this kind these and for raising that of cordless more fact is

Derek Soderberg

quarter the and of you medium States. U.S. your another And Great. on in ask adoption thoughts deal I provide on term. have US curious And Europe then short the this guess broadly, to that in if I'm you're in great? the now DECT/ULE my I'm could and on would the ULE in the progress any some United details making then customer on wondering be trends follow-up size question new

Ofer Elyakim

Sure.

largest ULE kind of these come very This years, So, market Deutsche to This major are trend were a today I providers a more are the able where did the many technology as look Germany think they a and industrial a the with IoT. France. adoption five We technology to are is and see the of standardization of ULE, ecosystem. as We we started. see line And very to where like And about to in all Orange the of also and the two the wider this whether see technology is focus We participants both market. market in in of Europe. based countries was trajectory we adopt I way continent solution. providers we persuade first expanding as last the that with respect and Telekom in this with European closely adopting significant security, base home working the telecom, we service start where bullish optimistic in lot an is service the the or the and of type incumbent a bodies this on from connectivity. well

in say technologies well that These vote market is Blue the are believe the that our were and partners late now our the positioned of I major for Now, design in to investments that basically think our and the year. enhancing we started and and focus for one technology with the this one Tier and the I utilizing two driving and a confidence selection IoT go forces a by kind in in from received And half that And in and XXXX. first pioneer market the to way and IoT that other the as future. And in of future on X; growth R&D very, in and and thrive our breakthrough is US US the to years technology the promoting we this is market announce ago, that conclusions pillars we did our of into need very a US started markets. that the such say security step was market. would of I also the ecosystem. ADT foray technologies the one enabling major of last we would we richer efforts with security launched ADT We products with

definitely that very working So, results kind really really we with the drivers market and and on like cylinders. the are we the of very, this are encouraged a is all momentum

to So, and next this is focus definitely on year. a also year this market

Derek Soderberg

Thanks. Great.

Operator

of line next question Your your Needham. Please question. Instructions] [Operator ask come Denis the from Pyatchanin from

Denis Pyatchanin

today. some have behalf Gill questions I on Raji of

guys more wondering you a was SmartVoice. about speak I little bit So, could if

it or related maybe trends pricing? a there other what's of little here? And moving is driving can mostly color in more guys big unit of what's revenue, non-COVID or provide there kind driving of, some Can kind bit predominantly then demand that you COVID, you the Is some is kind around highlight? of So, kind that? change are it units, about

Ofer Elyakim

the Hi question. Denis and Sure. for thanks

So, on definitely were think I in larger SmartVoice XXXX events we so a user and wider adoption catalyst went through that and for voice pandemic that interface. the a of the

ask definitely ease adoption have the the the wins Now, stimulated values and of design time. of the fact people that the aware the pandemic the this today fact became prime the of pandemic, that technology for probably we a use the whether and me is really if ready of really more the and is you about result pipeline that

such ramp sensing vendors are And early just mentioned whether mind. when products it's really Edge AI so with these We are are year doing in designed addition the algorithms, the achieved our designs year, to we Now, were during L. for new whether are to that is DBMXX our look mass the at that enhance that the this the products whether it's to it notice technology run in into to that I in for mind. human it's that the whether and announced we designed interaction, voice products or these many production year in even because do standard that up the for with environmental selecting capabilities collaboration VUI, I expected capabilities, family

it DSPG using to is best-in-class the suite, our way and DSPG their vendor flexibility, on time market very core. own and porting in you'll the maximum machine bringing the performance, a with the fast algorithm learning algorithm be whether whether So,

So that content from content increasing. see the perspective, we a think I

criteria, think enhanced customers. providing more also and advanced I value, we're And more are capabilities. providing our a from more that We to the performance capabilities

very definitely believe have And customers at when using kind is a we will of it's that is cases with and good communication that whether that voice the and catalyst we the that for think year. that just vectors look I feel and assistants So voice I it's really it voice this a strong used of for for or we're used a that that is happy commands, whether today, us, market the it the that the use for events the pipeline year just signals target last audience proliferated are that think the it has pandemic the used with I for like as are AI and all of be are as smart for I serves do and essential and expanded market analysis; design these use one of audible becoming that growth us our others. the more by

Denis Pyatchanin

it. Thank little to ask follow-up about then margins. my you that. for Got I a bit And for just wanted question,

looking So at you with XX.X% were the supply chain into there be QX? of little guys record pressure QX of here? and tightness, margins pressure kind do believe bit going expect Do basically that might you a you the guys some to at

Ofer Elyakim

years in selling relatively lower better at to into And to our X were products of kind So the I were was better and margin at I that the Internet versus of the last think with XXs. corporate X that expand improve what margins margins or Things the Audio gross profile, done that the that mix, during the based from this we've of low a more on the high traditional new with margin products kind selling and gross want did respect say now profile. the seen or average XXs the -- the products

I think that we is believe that case. this the still

margins that changes think could probably to as that for of we pressure. any guidance some we'll period we you should I with line, enhance looking need I think content need that think in and could supply very that be in taken we believe, to trend I where at where to I and in interim that And we think the of terms trend that provide something But improved there. are expand an company kind also call But quarterly if first there situation able products, look in should IoAT profile. And dynamic at is this But on we I what think forward course don't is seeing, -- follow. that need our trend be I can of it that is we're value into to that impact line right increased provide seeing the this during to of that yes, the the However, can the of we are line concern. you And were constraints, this and see achieve and that the the proportion the the quarter. there think of update. are really we will share chain next it do and this margin that look believe based some a already we that a our mix, is we some it mix

Denis Pyatchanin

that's And all Thank Great. for me. you.

Operator

There Please further no questions. are continue.

Tali Chen

Thank you forward everyone. report to we and to us Thanks in joining for quarter. next you the look

Operator

That participating. Thank does for for today. conclude call our you

You may disconnect. all

DSP (DSPG) 5 Feb 212020 Q4 Earnings call transcript