DSPG - Earnings call transcript Q1 2021

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Operator

Good day and thank you for standing by. Welcome to the DSP Group First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be conference recorded. is Please Instructions]. [Operator hand over Chen, to I Business would first conference to like Tali now your the speaker Officer. Chief today, Please go ahead.

Tali Chen

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

the remind you about Before during stemming SmartVoice, I forward-looking take and launches, essential for well which we importance, optimism like to growth demand of be us our statements position begin, pipeline call, uniquely and conference product forward-looking the all the solid XXXX; pandemic. obligation of potential technologies a will will strategic segment ULE, and belief successful underlie no as Communications of these Unified our in our that recovery become phones, of we in to debt of and would We from advantage statements. verticals to trends XXXX. this guidance the our our customer as about SmartHome of audio, more market assume belief long-term connectivity our cordless update The for second engagement voice, making quarter financial Unified which and adoption and Communications,

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

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

Ofer Elyakim

update on I will have of press while thanks everyone the results morning for projections business earlier our for call highlights that I the us who this would our plan we an distributed read release the first our you like Good In to progression morning. Dror a first financial followed this to our the provide by for and with context hope provide our opportunity begin short joining Tali. quarter. reviewing you by of second the today. quarter outlook. Tali which and and Thank discuss you quarter will the for provide

We financial first our $XX.X of above We metrics. guidance performance are midpoint our range. revenues excited of with We the with XXXX. the most the quarter guidance for of on quarter succeeded our ended financial million

First in different X% IoAT of XX% voice revenues exceptional quarter driven year-over-year revenues reaching shortages, representing particular by high strong grew And delivered revenues by total revenues. by for sequentially. results despite sequentially. and $XX.X million demand product by categories. robust and in demand our record by XX% XX% supply across grew products XX% were which our year-over-year These IoAT centric businesses,

the business trends sustain past These the key DSP continued have value The SmartVoice to of year, uniquely connectivity are enterprise. quarter the Communication, verticals, centerpiece to This long-term on first for and developed market success continuity two productivity digitalization During pandemic solid audio, while the and technology In we of emerged. the by progress three has competence interaction. models innovation accelerated continued creating and play our core have a essential quarters our should major ahead. new highlights make strategic Group's drivers business years and Unified in leveraging positioned voice, importance that the role the world executing that the we on be everything work, pivotal and stimulated in By and expertise workplace portfolio trend technologies. enhance class of a is markedly our Unified education, namely SmartHome. and in during to Communication

as even franchise. transition show trends home our is the stimulating The office. virtual losing is of from future no and UC collaboration. two second momentum, for growth promising These back are the Both trends gradually catalysts work businesses signs to the first of

voice On interface, interface mainstream the adoption across voice applications. different user became weaknesses, user through its

In have Edge processing real AI proliferated addition, usage. more time and local intelligence

custom leadership installed trends even the Group, solutions, best strong combining are a order mix in research the processing, and and noise customer the with state collaborate unmatched of automotive Home of and the innovation intelligence and and happy in our we uncover and speaker that a proposition dedicated up XX% The AI and solutions bigger respectively. by allows the SmartVoice needs, focusing of we audio for you R&D technologies made XX.X%, continued that growth leveraging EdgeAI, I'm a year-over-year market smarter demand knowhow in by art DECT and sensing, reach. to of expand to rapid of active into the audio emerging considering our from in audible We an DECT and the in and also robust stimulate constraints, connectivity $XX all development quarter supply with of power and market cabin demand of by for testing record about and audio and we ULE and cancellation across And product positions processing, use $XX different of cases Germany. realizing and our differentiated addition, XX%. in with exciting share We're be market technologies performance. to market, in customers second differentiation large experts chain and have are solutions burgeoning IoAT. this in in the to GAAP requirements. large lab DSP on Gateways, enhance world into the driving taking well role that the role to is class Group playing propelling us to lab to and million lab million. inaugurated value demand quarter range connectivity introduced instrumental led advanced for meet noise includes as These our expand during excited improved that ongoing to second Moreover, these bringing investments in specific market product testbed opportunities algorithm role excellent we further digitalization specs. the play voice and user everything, to The we team businesses, solid security Opening presented combined are the offer the continue ULE. expect of promising active unique as and by processing, revenue interface, voice prototyping our innovative and growth these the the to and an revenues strong revenue expect as across IoAT meet our in needs business audio times audio, first a DSP developing implies an margins to us base voice for nonlinear demand quarter cancellation, segment, the to including will stringent non-GAAP expect with we're participants solutions, in a for to midpoint enabled range and The their class our benefiting well gross a to entry momentum IoAT addressing sound technologies ultralow account thereby guidance generate the further address reflected leading our robust lines.

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

Now, to the in floor product yours. the like over to of the segments. each our is I'd call Tali, discuss performance to Tali turn

Tali Chen

you I Ofer. our by begin like SmartVoice would you an update Thank to business. on providing with

These approximately underscoring incorporating of interfaces, from in shifting of based consumer favor a the a increased preference voice million of demand $X increase of user and SmartVoice an XX%. sales XX% were by devices During interfaces. products, generated of sequential in results increase a reflecting we quarter, voice year-over-year for revenues fueled

further this momentum the expect of suite with we We manufacturer leading and the from which user high already solutions accuracy, capabilities. design for control playing issuing as far across of our display shows that deliver detect an demonstrated two-way a the with and of by addressing applications more enhance our TV In leading innovation EdgeAI SmartVoice algorithms, there's field, record our flawless allows leveraging powering following to and the quarter, products. Moreover, broad engagement brands, product reach accelerate portfolio by during expand experience and are allowing and to greater together flexibility, electronic continue capabilities instrumental in EdgeAI consumer our our array these with Group SmartVoice the adoption is domain, users commands entertainment in and the the the needs to with of monitor that In voice and PC role field to DSP room. achievements. activity for robust, activation voice market, and a and Tablet a solution to the activation system SmartVoice products smart respond quality robust and natural, voice reliability. offering far

our leveraging the supporting Lenovo franchise and During hotword. positioned TCL driver with solutions, SmartVoice coupled our momentum This new of a array broad applications. models, EdgeAI Google's voice developing pivotal tablet growth strong in the and a in new exciting achievement, user interface quarter, launched as

Communications we In decrease representing of and $XX Moving a year-over-year segment. Unified on revenues increase the quarter XX%. million of sequential to a of the X%, first generated

began revival following underlying work than The trends. expected propelled from XXXX in home. shift towards is recovery about the market excited are market We which QX the by sudden faster two

comeback and of one room meeting the return the first spaces. The is office to gradual

two working their employees in-person technology and on months on emerge. remote geographically accommodate video hybrid pandemic In next cope return businesses with week from will that models, to rely and tools These meaningful which IDC interactions, office within space a XX educational connect XXXX. estimates to conferencing with days likely heavily learning investments the better only hybrid should number employees teams. for of into follow workforce parallel prem three or and to employees to and to institutes go to new double true should the collaboration As a dispersed X and post the other prepare remote are

and as a set well these particularly voice to in these portable IoAT, with technology class leadership remote and as seamless is quarter home from developments at secured these digital same employees is addressing office in that offering Group The our crucial, respect EdgeAI. creating connectivity we tools the of Unified of the terminals, with XXXX such endpoints As and productivity to headsets, DSP is video well-positioned quality, their have as ensuring and best areas. counterparts. of interface, parity work forefront demonstrate intersect wins first trends through Communications user key our product the for voice have in during and market

proprietary we an on rescheduled can proceed. calls given quality disappear calls. become is be platform, remain yet best collaboration compromised, UC at the from propelled centers. the on as quickly recovery brand using distorted in remarkable for A lost at opportunities. with QX opportunities. pipeline the employees must of communication Communications phones. such engagement by the next continued with any platform and a variety resulting Regardless offices audio brand DSP and narrowband working Unified reliable generation critical last, if at quality in U.S. described our growth video of such chose leading Foneric end, take voice wireless causing home wideband this can market or indents DECT headset and its delays, is based But upgraded to and for dynamics For call the voice pending deployment platform worst technology chose endpoint. and our most the protection hybrid day. Lenovo of prospects DVF example, We highly its call voice And for Group coupled popular comes IP communication, bit even engine confident Most of Video segment,

product to smartphone Now, our turning line.

basis. During delivered the sequential revenues of a we representing XX% first flattish year-over-year a increase $X.X quarter record of million, while on

advantages are and and segment that the to we of penetration ULE We this excited into about security in enhance quarter position interference ULE its the and offering. service the And market. the smart include chose reliable the ULE’s and provider technology excited during band, free audio two-way strengthen are additional to an voice continue support. successful ULE inherently share for range, security superior security spectrum

by coverage globally DECT for Alexa reflected DECT the security XX enabled All communication, the full our cordless carrying of crucial in more the numbers these products America, button reliable record Telecom weather, can to We're which ideally this our and the of the listen gateways around of is devices and broadband the IoAT higher simply excited and smart value about embedded providers deliver ULE and recognize the two-way of extremely to and ULE services. offering. for service technology Europe unique launched ask are on control quarter. in than British and service, is Alexa news, Customers Moreover, handset and as security suited million tap by check voice home. quality more newly North

more will to and the On innovative introduced the at the by offerings changing of use paradigm. by course, service providers in propel heels offering British cases of rising increased we needs support home the Telecom, this innovative believe usage,

DECT term leverage Additional audio market on growth two-way our use engagement growing behind that pipeline, strong to for is ULE V-Tech technical And this now and merits phone short doorbells update technology coupled the long offer on these expect momentum of market. example acceleration prospects. a ULE for based trends, and was case, ULE quarter is To for the summarize, and with we the DECT our fuel an launched unparalleled DECT technology. the cordless voice by ULE the Japanese

calling we sequentially. similar its usage for expect Revenues in in phone cordless solid by lifestyles During the voice revenues forms, products. for cordless we driving XX% continued home all first quarter. at quarter, experience propelling cordless increased to while the demand declining next to in are demand remain year-over-year XX% and From increased levels

to financial with Now, Dror projections. I over would provide second to like and you quarter to results call turn the

Dror Levy

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

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

this was $X.X quarter million $X.X to quarter expenses the of These excluding Our XXXX million. for rate revenues the related for of Gross to related acquisition amortization million. tax related from in to for income related amortization the deferred The and the to were based million. the acquisition million. full with benefit exchange $X.X and non-GAAP was of diluted of standards XX.X Income quarter excluded impact equity presentation our compensation SoundChip equity Income on $X.XX. accounting intangible compensation long-term acquisitions of quarter based included the negative Operating morning, included in related million. of non-GAAP tax $X.XX tax of $XX.X was The Financial was the Gross million for and net basis, the XX%. were negative margin taxes million. income income million, million, the million. pro for share on fabulization were based quarter. deferred from amount compensation the EPS a was to GAAP loss rate based first The equity pro related $X.X of VPS these of the expenses of in intangible Non-GAAP amount amount The $X.X financial expenses amount for related excluding million million, items positive amortization rate the Financial expenses $X.X basis, FORM-XK for $X.X were of the R&D to exchange expenses forma assets included exchange based differences of were from benefits income in timeframe. was a items on and income million, $XX.X amount compensation of income mentioned differences $X.XX. acquisition. expenses on as million. $X.X report the differences per $X.X million amount these reconciliation of income leases. million, U.S. including the for GAAP to previous in activity basis is million. of related expenses of was excluding is per and million non-GAAP $X.X GAAP $X.X expenses quarter quarter acquired forma $X.X the million, the equity items a the differences assets including list amount quarter impact quarter intangible was amortization for the present was the of net the on described $X.X casual $X.X above, $X.X generic expenses of $XX.X assets compensation the including based equity presentation. in The to quarter compensation taxes for equity the amortization $X.X share, was for of to loss Operating expenses will quarter. the for the margin

the to sheet. turning balance Now

receivable a compared quarter million fourth to at has from quarter ended accounts representing with days. of quarter the $XX XXXX at XX to end the of sales. the hundred XXXX a days decreased XXXX fourth Our of $X.X first level of million $XX.X million representing of XX of of end level the of million Inventory the $X.X

cash marketable first million during of quarter, March by as $XX.X XXXX. and of -- $X.X and as securities XX, level Our increased the million the where

options, cash Our was generate market marketable amortization $X.X and cash securities. million of of cash purchase $X.X securities the and amount was equipment, We exercise price a was was property by in of $X.X provided during of from operations. cash million following. of by of position $X.X used affected and quarter the for million of million stock change

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

based equity amortization expenses compensation acquisition and related including follows. projections as quarter second Our expenses are

million in to the of $XX to range $XX revenue million. Our expected are be

to be of of And expected to basis range are is are the to diluted to million. expected $XX million. in $XX $XXX,XXX. We to GAAP million in be R&D approximately range be be shares. to in include amortization assets equity million million of and to spending quarter of This are the on $X.X $X.X million. intangible XX margin million to related gross XX $XXX,XXX million on million. these goods following range expected to include to our R&D compensation on to approximately $XX.X million expenses expenses based marketing focused assets second income of and include expenses million to U.S. range the also $XXX,XXX the projections to includes to expenses XX%. to the amounts G&A $XX expected Cost income $X.X expect include be $X.X Sales previous Operating are XX% and million intangible $X $X.X $X.X expected in to the million. taxes includes Financial $X.X million. acquisitions. of be projections $XXX,XXX. a And Also, of

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

Operator

Thank [Operator you. Instructions].

question ask line first question. Please the from Jaeson comes from Your your Smith of Street. Lake

Jaeson Schmidt

taking my for thanks guys, Hey questions.

Just want any you those you're here in baking saw QX to QX? supply then of if and sort to headwinds constraints in start see from in if any constraints

Ofer Elyakim

Jason. Hi,

chain supply supply to seeing. demand regards supply definitely see constraints, time, and serve so that a constraints, report are of and we the as lot last to difficulty this with there we're So chain did do time we

is our by all it. somewhat ability We do of effected have to strong deliver products. unable So robust, backlog, but demand deliver it is but very to a

the did continue we that So that. to see first see quarter. We in

it of the the end the for will the does as testing to remain second being, that -- supply quarter. as least second quarter. foundry a are well us We an are side that at continuing assembly from feel coming now, these till that time with area for constraints experience chain in And

Jaeson Schmidt

Okay, at segment. looking that's the And helpful. then SmartVoice just

on to guys should within that you EdgeAI portfolio. of really think is sort ASP able that bigger going about will How see pricing, traditional to that impact pricing segment? to just be a suite overall lift of we about offset a your part the Sorry becomes or

Ofer Elyakim

model probably the latter the right it. to think I that way is

and selling think well to U.S. such tier as suite for a both So that actually added a with benefit accompanying of both of to the as EdgeAI market I prices. hardware. content are adoption definitely in see our bundling, the of basically suite we of our the and and selling EdgeAI, started We've software products will many the the shipping silicon of one average already algorithms, premium the seeing OEM

Jaeson Schmidt

a Okay, Thanks back I'll into jump queue. lot.

Ofer Elyakim

Jaeson. Thank you,

Operator

Thank you.

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

Matthew Ramsay

a it half Good supply on wonder there the and for and afternoon. might morning into seasonality good seasonality if the Thank half about second congrats but of how anybody wanted little all see into don't is good if chain you you're for know a upside just given very I the about or going continuing of I that, segments so talk the any of your second COVID right onetime Ofer, and what's to you to different thinking sort planning if year team the for the in bit bit year, quarter the of quarter issues, the much. guidance, typical now, obviously second with anything, what I pops are Thanks. you business of numbers? back is in that there's

Ofer Elyakim

Yes.

Matt the So you thank for question.

aware with So we that everyone's the the and about because today can see we arena. supply the difficulty what electronic and anything the of related secure a a -- back And the also to because think constraints. of of to all to we is I that see components chipset do chain respect have backlog, half,

robust. demand is And so visibility the right fairly now,

continue to an we in, experience will to least sort the lead or that industry the it given of willing the year. quarter of second second does a an easement time, severe from very that see So we a supply gradual of amount long during started unprecedented normality. What see provide does view. half will the were how we remain in this is at back closure and customers seeing uncertain Whether see easement we some that to which return chain quarter in quarter in first the blurry depend and trend on and and the the situation to we my and -- it a -- fairly are supply also of the point really is supply, will

now supply from do you demand conversations with I the that From vendors, back into seeing. be as half. continuing that we'll easements they uncertain can right But lines a growth. do continue look supply tell that standpoint, terms some cannot demand to constraints the the see half continuing in I back is But the so of robust trends comment see is know, about there like. product fairly hope chain the said, I with standpoint, some accelerate of really how we I would You a the from to

to So will lot feel that market we ability space NNC, growth. greenfield SmartVoice the proliferate same can prepared that the chain extend through third based you security trough the in and very and also does report last I what in for our Everything supply very into ability just course, new continues see addition of We at is also back segment we the us the the Communications fulfill EdgeAI, address that more seeing. and believe to on depend our level But delivering is as fresh, it We to which, this trends our the into penetration in half. true in can this that partners. a in investment this are we've lot demand the see for the our said be content also our environment. excited think as the SmartHome capabilities of about our quarter we're And we're it the see. that the ability you the of on of depend it gradual hit for a deliver believe in a of good as further that And able on a comments is well we secure this pattern demand that we to date the capacity But to that segment, of provided I improvement. tell the we again selling. Unified adjacent to year markets,

Matthew Ramsay

over those costs chain on How their thinking one all in costs just all that does costs impact supply thing guess, With the there. you things guys input a is and increased a customers on jump or color quick back portions challenges those that companies up appreciate commentary an about ability different and given pricing and to queue. through to couple Thanks. I'll it have, quarters facing, next pass that. the of folks are Dror, of you the different going I material gross like and are for about, margin? the have I

Dror Levy

question. So the thanks for

in for some the the And we from for all a price into the guidance account that record, chain. as saw also the provided forecast also margin, that we into already our second this first the had face fact takes industry to account. our did way, like took So quarter the gross in results quarter, the increases you the supply

with I think that mix that coming gross mix, that our margins, what happens in products, helps higher in the to and change the products the that. are new more case basically is more towards us compensate for

and to And keep our products enables are like selling more innovative. this that us environment. in even the improve we margins case the and tough are price because this average more content So increases in basically

Matthew Ramsay

guys it. Thanks, appreciate

Operator

[Operator Instructions].

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

Suji Desilva

that was as well? market know then non-smartphone hi remote in all Dror may Curious has I how Ofer, growing don't the Hi on an opportunity work segment for and merging and notebook update progress SmartVoice you with and where the mix. The there headsets, been here. any the the is, I Tali. guys curious, and be Congratulations at specifically

Ofer Elyakim

so thanks Suji for hi question. and Yeah, the

of with SmartVoice the respect is to mobile the fairly small. revenues, the So of contribution composition

couple as let's voice coming as an WebEx, the a tablet cycle reported well. capabilities, last having of meaning short market, lot some of most for more of opportunity Scope become said, in the a I Moreover, of fairly type piece we hopefully say to is Google of based And gained as capabilities. products going are has [indiscernible] majority from think and the tablets the compared incorporating incorporating [ph] vast diversification you and has numbers more advanced for tablets type business, is we as well the during screen especially Zoom, of to design Android the XX% definitely tablet the into guys non quarters, collaboration So which momentum the call the a both important PC PC tablet Team cycle. cycles the as the market

the the believe enables area see growth do well very for as opportunity design box basically driver. These check everyone do much as that nice in the the the been I see capabilities. that us. cameras notebook way I results as of And to his to So today the advanced working us is on the microphones, that does have a well but change set represent PC, to conferencing, we're a going has very was in require notebook notebooks momentum going that voice and a as camera, to think video which also that the just generate more major do a this believe does I the forward. strong market ability the but

perfectly accompanied capabilities peacefully and For such we go more us a and enabled AI a have AI as the necessary. algorithms, call provide from a into that basically hear let's handle as well many support, a to of collaboration is voice support choppy just we we'll you that if is flexible voice more ability say there. and the even can to audio we But better advanced much great same the so really the in vision voice And said And experience also have video on speakers it lot don't means calls as reliable PC or, the the you transformation a is where the a of or algorithms with continue and attending the and to being productivity, well, make a injected lot speakers the and basically do video that noise is compliment basically less see we cameras if at and fatiguing conference. when from it accessories more cannot big frozen. world

so announced And we also be just these we believe already will many see that accessory that the this quarter. and designed new a hardware of market, couple in will we

We the and as lot strong type capabilities, see call that more we're let's And the as as continue environment. very algorithms On believe capabilities support meaning performance, of really non-A&C that best both class asset market, complement as both at class features building a for grade. center for we type momentum, to ambient as noise headset say, very a voice well of as bringing to capabilities. assets, well personal a grade, consumer enterprise A&C enable strong in domestic best cancellation across, to also excellent AI well household in advanced of and collaboration a call on

Suji Desilva

for players announcement and market, the do see there be and Okay, then any it just the -- terms is And the who how automotive time, if is market, what opportunity forming microphones color, for a of the curious you German in what that detailed could curious sure. are and very how landscape it and in develops? your on auto but are thanks the exciting a lab specifically or audio today follow-up, all

Ofer Elyakim

that vendors think today supplying silicon is so market. layer that several algorithms. there processors Yes, of are There I silicon application to are that another this mainly either software or are supplying DSPs vendors

of type some and of the integrated and vertically inside ones algorithm software Some of tier from specific it like, it vendors. comes is

capability And from as some as we're adaptation requirements. sell able such be as as have our is And from the automotive do we the looking side. migrate this different lot we're in can way more able to a a way, utilizing a to a it right field a front into we what much suppression being silicon which way well is the so of algorithms transform make enterprise software far noise need deterministic of lot algo And conferencing in arena, the new with characteristic whether fairly we angle of what to kind more has the side, well an silicon. of the dealing in a and have, similar algorithms to or qualify type comes done that of whether and now front the comes both at we and from way a from meaning that so it it our AI that support transition to and the in

in plan. the is that So all of

that it's and believe we're going very right new time. and and -- we the a right happy at with recently the we're place acquired to exciting way very I be great think at journey talent the

Suji Desilva

again. Congratulations Thanks.

Ofer Elyakim

Thank you.

Operator

you. Thank

ask line from Your question. and question Needham Please comes Company. Denis your the from of Pyatchanin next

Denis Pyatchanin

question ask for Raji wanted to Gil. here up guys, Hi just a

viewer we technologies, about So with drivers add you VoIP growth to what regards line? kind lead what will be of seeing, the kind the driving some can can growth the expect you what color guys and for are and of down

Dror Levy

absolutely. Yes,

we as with mainly systems. and consumer and market several as European [indiscernible] the end maybe a in small large way of we well a still start So type service have ULE drivers. Today provider to SmartHome penetrated designs several

connectivity front the this the that unparalleled technology the larger from smart a designing. seeing market needs but for requirements we're What that is coming with complement requiring us a On that to a a with in that build and other Also not the we're that pipeline. a capabilities terms lot design the are landscape are provide voice complement to seems basically we already fit much of presence solution, the way is security industry. in an changing just is of and this

I be IoT SmartHome or include that best basically for the markets as so not but DECT able type also And the processing, just a real to in for think and will connectivity, we delivering that sensing, will a a element content ULE network. the extend market, also IoT smart our class our offering the market, deliver to combined solutions, SmartVoice into then with connectivity the the of AI by

lot as with the this addressing a processing, generations sensing, of the So capabilities well domain. the requirements looking of a at as of respect and also communication. now standout next developing to We're ULE

and of our in our these couple activities years. pipeline are So roadmap for all the in of next

to everyone work. and hybrid home. see a is future in workplace space, same in algorithms, yet continue we the set or investment capabilities than as that trends. home hardware. also Communication, On the becomes And believe One converging office from at we That or the different be infrastructure, the a that or tools we more will the means able his in in means used years in same discussed in more way to exist major of to they're be. Whether the we her to software as and need Unified conduct way VoIP have in that better to work or it

a part from and we're believe that meet most we a the on work the year collaboration a means, participating room lot are to last of in of sitting participants the capabilities In the the are and other that in the That of could way a more as saw installed needs how believe And hybrid as create working location have XXXX, see the on the meetings prem conference was more attending complete IT in of same software means great well IP extend or the to return as a that well away side, as will in this people from part, it counterparts the as continue to work and workplace transition on means rooms both an home. catalysts the be of done on that that really On environment. enterprise to budget not are investments were those that franchise. growth that both prem will lot our starting from or prem of the order workplace, investments I home. the have we

workplace our on customers side and have in that to market see from hybrid to bring happened continue a we to new are hardware new traditional that the to capabilities. even refresh think to more the change that has that and advanced customers more continuing for engage fits hardware designs our and meaning invest need the the to I really

be as that that inside can devices conference support a as office, devices home in collaboration can in at and the meeting rooms. installed very good well both So productivity

on in that saw that see continuing QX, market we recover we that so one and those And in from QX. end the think I to do trough we definitely saw

think based the professional second of we as grow QX needs that I as comments a also the on continue and the provide, market. expectation is changing also well these this result of for to as in quarter, very Now the

that I your Denis. So answers hope question,

Denis Pyatchanin

Yeah, looking can expect a then looks great if follow-up, bit pretty can the maybe like we of absolutely. up kind I'm gross them amount are for at level? That definitely was you about little driving to my holding well hear, color. lately, and And a the this your of gross persist margins talk margins definitely to what

Ofer Elyakim

a a for XXs mix, we period the products. you mid-XXs. is I deterministically we that mid-term and think I from the would believe believe the that say catalyst for or And time, fairly mix gross main I expand margins said our of fairly in our that, can long our And now actually and that well into range. see long-term model, we even the the It's low think can of are

average our that the and once businesses, average, than corporate more technologies business than a side of we higher really benefits and So gross are the a some the margins to table feel bringing traditional of you even margins our can sustain the a do IoAT a expansion especially of do legacy in new is maybe QX mix see adding nice so much next levels better, the the corporate do the years. on the playing products. guide, and is all these and lower is especially out margin the favorably can IoAT that of in and we skewed We that based also definitely we perhaps do believe couple more then towards believe see we way

Denis Pyatchanin

next comes Operator Securities, ask very Colliers question Derek Your of Soderberg Great, thank your the you from line much. from please question.

Derek Soderberg

in new we're year? have back demanding business of seeing that? and potentially everyone, sort terms a of last maybe the for strong. relative Hi PC you remind like we to advanced thanks the look normal there audio, in Can And, that Then half of changed terms PC a how looked engagements, my what you number me taking of to sound ago, a as just of your questions. year the follow about and beyond, in PCs Ofer, do maybe how products over like year feel anything business do I think you that's up.

Ofer Elyakim

for Sure, hi thanks and for joining the and Derek, question.

revenues. So categorize inside in we PC a and way our tablet one market with respect the as market, segment application so it PC SmartVoice via to

been definitely revenue. and think technical revenues shipment. collaboration in view OEMs the the happened definitely has and but address the based Android an And hope that also from PC see to of we point And market of notebook computer, as in so ahead we application from an market. this tablet. translating that better will driver what to into in into pipeline, some from coming voices a growth main need our way the far, the these of are following or evaluation interface evaluation, capabilities notebook, different the forward We this in the that were in revenues we to that from especially, has I the And in very this of a but shipping then tablets, larger design majority is definitely look not need when role do see yet are the capabilities, mass plan the of we definitely this look that in active engagement a play and requirements weapon,

Derek Soderberg

there's do it. got maybe you the have it, of trends, I Thanks. ordering for market you wonder if like have rate, on any consuming or sequential And consumption sense is guidance rates, at Got pretty of this a just then given that? growth, anything demand sense nice double

Ofer Elyakim

Yes, hi Derek, question. for thanks the second

categories, to demand can that So, that conduct, many see we consumption, of the from do customers. coming new the we is in with from our the checks channel respect

So, these now up. only are are ramping that customers

ways, ramping So I customers products. major up where and these more seen designs these has are to capabilities, believe that definitely have the end we have -- or of new with a the In with are a history, lot ability certain checks, have the inventory. this cases not market other doing do our where customers with market do so we buildup consumption and -- the these we channel more far, yet way

consumer from the these see also consumption, whether is professional do mimic are the more the definitely and markets, of the coming data, We line or business trend this some sell-out does businesses. end in surveying that

indications so a major we of do have accumulation So, stocks. far not of

the from the the and chain of Now, these fairly point of definitely here can that supply view I about demand that, say talking we're times visibility the from fact great unprecedented standpoint. are

However, visibility a from the side. fairly blurred supply

order see we're longer And level for many looking From to by to we customers, inventory some do increasing other chain of color are smoother and are the of that back in be of that many companies terms ability in build the could we so just time, We're that their that lead with on cases mean supply longer all able and orders that allow to being getting base sort cushions. time. a not standard that our longer to so, means a much from of hand, it see them in times. able be lead supply to supply supplying much their Today lead customers and their much it customers some extended lead fairly to takes supply times. to much their gets

we can at So, least moment, at know, -- pockets you this what is the in And inventory. of from do. healthy. believe do we situation right big is This the not that is supply see now, chain, the sit like where we my we

Derek Soderberg

Great, thanks.

Operator

be seems you. questions. no There to further Thank

will to Chen. hand Tali back I it So

Tali Chen

we the mention Virtual that like Technology Media we the Cohen Heidi. and to Annual May Thank on would I scheduled Conference during coming conferences. and Needham Telecom Tech XXth, following you, June forward at conference Conference days. present to in investor Media on your are to and report Ross and tried XXst. months, you Thank you for look on for interest June group we DSP in back XX in London listening to X, and

Operator

This call. concludes you conference participating. today's for Thank

disconnect, may You

DSP (DSPG) 3 May 212021 Q1 Earnings call transcript