AEIS - Earnings call transcript Q2 2020 | Advanced Energy Industries, Inc.

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to Advanced Energy Second Quarter 2020 Earnings Conference Call. At this time all participant are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference maybe recorded. now speaker’s hand President today, Marketing Investor would to conference of I and your on Edwin Relations. Instructions] like the to over Strategic [Operator Mok, Vice ahead. go please Sir,

Edwin Mok

to Michelle. Director Relations. Advance conference morning, of With are Oldham, Investor CEO; today Wasserman, me you, Brian our Thank everyone. CFO; call. Energy's quarter and XXXX Good second earnings our Paul Yuval Welcome Smith, our

press you release, website you find you find our have If to our There not it discussion presentation at slide earnings ir.advanced-energy.com. our today. also seen a on along can follow

mention Before multi Advanced I begin, coming I would in conferences will like months. at to participating that be the Energy investor

As events make announcements. occur, we'll their

that remind contains between release the measures All Yuval? these GAAP an explanation today. to non-GAAP today's call management's should aspirational specified. today, Any our results guidance. reconciliations pass CEO, of explanation let you is not are of -- our our which differ the X, obligation forward-looking include financial respect otherwise that, materially the me unless with me and our subject are call be Yuval and as uncertainties non-GAAP for and measures, that company concerning non-GAAP assumes basis, presented be them. results cause not SEC. and goals be Information found presented to any as integration could well With assumptions will On our in found targets financial statements future can to performance. as Wasserman. in are and press financial no interpreted actual call, update on and that as today's Let our on a Long-term uncertainties in today, guarantees risks and projections the targets forward-looking statements, to based XXXX filings August risks estimates,

Yuval Wasserman

driving several of our thank that with expectations Thank challenging in driving the are company the or good our us above a deliver of enabled economy technology an exposure at on by due across joining execution, environment. high and solid multiple in Artesyn acceleration Advanced strong quarter call. adoption Energy the for synergy in result the you, goals. and our demand strength diversification acquisition is everyone of Good us data trends In to end for and line industrial which has integration morning, continued The This we demand Edwin. in revolution strategy, our to are you combined results a of and in this was fourth financial markets fueled verticals, and plan that extended trends growth and achieving the in to these the with ahead of COVID-XX. our

and pandemic, near-full our and physical major our all and first. global the sites to we hand focus power allowed in and operational government the this of and cash sequential market operating resulting in flow guided to continue separation Our safety our returned of in manufacturing verticals, revenue which strategy the In local years. above current in requirements. above deliver to growth the had and organization quarter us quarter, protocols capabilities, operating of that our our provide $XXX our end midst with two excellence the health generated synergy, range, employees second the of a non-GAAP beyond integrated $X.XX of million. safety pure We highest play within put EPS of functional three us At communities four capacity of our are

materials. delivery Our improve, shortages, supply see but still we manage chain to on-time of action that some bottlenecks we proactive to continues require raw and

capacity environment and more by and demand. continue than be to the and cases results increasing is unpredictable global operating may of the conditions very dynamic With by impacted our underlying COVID-XX,

and the our outpacing applications, Demand the the resume. strength product normalization markets continue in our improved the to our in year-over-year in our This we're leading strong performance outgrow for believe market WFE well to the cycle applications in cyclical memory foundry/logic our NAND peers. level of the positioned XX% memory by driven last, semiconductor the sales and and by this and increased investment in investments edge With Turning continued demand share XXXX, that applications, once quarter well in the inventories. particularly power memory from second to trough gains, semiconductor the of remaining market second customers' confirms now expanded when reaching market content Since grew on quarter, again performance. the transition grew accounts. higher the to below we into portfolio industry

third market we to the the our Looking grow. quarter, sales semiconductor into continue to expect into

new ALE, power As process our recent in front-end advanced supply, configurable The back-end enable for products portfolio tools. semi-power edge continue West, being innovator power iHP, evaluated ALD, conductor a broad Power memory deliver logic devices. to and of used for and multiple is customers' auxiliary solutions, At multiple supplies applications the and SEMICON for that by in power technologies process be we configurable multi-output etch, leading a and the leading high-power, supply. power can is introduced Embedded innovation. embedded products PECVD a products both groundbreaking to system The customers our three new power latest and and are process we of

evaluation expand this market revenue successful and product drive our cross-selling within expect to additional semi. addressable of We

is in wins technology our wins design year-over-year. in QX double products, leading announced resulted and new we share new to market that Match previously have Design gains. generate almost Beyond continued RF revenue

In triple-frequency own advanced Navigator units addition, most our Network. several Matching of recently RF we shipped

in long remote as performance quarter chamber superior to plasma resonate continue growth each our efforts process sources customers. and focused drive Our with lifetime

position from revenue industrial large wins factories in transition driven our design continue markets, In at products deliver clean we medical recent customer and QX. by Finally, strong our medical initial dry the a sequentially Korean discussed in in from etch improved OEMs. applications, ability ramping product applications to our demand to and grew strengthen by and recovery

QX Although, by one for was applications we medical continues and critical COVID-XX weakness quarters grew offset our medical this COVID-related demand care macro strongest more elective overall in as and cosmetic Within of weakened limit strong procedures. sequentially, the products, than environment, industrial exacerbated very to demand for market.

multiple won for new we and from addition, applications ranging surgical In designs to microscopes. DNA X-ray sequencing mobile

center verticals and XX% continued Looking data year-over-year was lower in basis share we due record the grew hyperscale computing demand medical on revenue down by year's Revenue expect Xx QX, improved offset to computing center forward ongoing Overall, capacity. from revenue pro medical industrial and our in was market sequential quarter supported in grow to production by level with slightly sequentially forma our to market gains. last levels last a hyperscale, in forma growth enterprise due data our more and primarily pro than supply up constraints. computing over to

OCP capacity migration designed to year, XX-volts. began power units future in remain levels a common customer waves to assuming of At Virtual major hyperscale May, support third second will a is next-generation the the customer, third that we the Summit manufacturing platform. this as shipping production shelf, our revenue position we a leading our robust half, XXXX confident half the launched in not by in and we is its center believe we center which computing major hyperscale data the to addition, first infrastructure In to secured data seen center With in of affected remain COVID-XX. close data

cloud widening have providers. to data architecture our are power internet racks consumption. retail reduce We intelligence growth data With both interest times consumer increased critical in center center helping data a ranging rack to power electricity continuing power than from up the AI will service center drive our solutions to We conversion and our shelf international center racks. and seen in in from power industry-leading demand group and customers, artificial play industry growing consume for traditional projected efficiency of gaming our innovation X and more a data role believe applications,

is its will environmentally-efficient sustainability adhering to Beyond of leadership. we to leading working sustainability SuCCESS more and Applied industries. six data announced chain. our density for energy efficiency By at a Applied with advancing important strategic Materials, one initiative. operations, the improving XXXX supply our industry energy-efficient SEMICON enablers commitment many West, our across our Recently are our be customers, sustainable and Energy Advanced partners towards centers, power products power

first Finally, demand from as these markets a the appeared our markets quarter bottom. to telecom reaching be from increase and networking

of In shipments addition, revenues high in wins the second quarter several prior benefited multiple customers. across from volume design

and our products. investment be by geopolitical tension, sales increased infrastructure continued While delayed is for center for COVID-XX generating strong demand networking data global was that telecom to

density. quarter, industry-leading next the During were our to router interconnect design due generation power we

more for increase global operational revenue. execution and Long-term, the maintained advanced into XG summarize, around to infrastructure strong To will third revenue systems. from us quarter, Looking demand new expect excellence to capitalize drive customers requirements our levels. we deployment of on power and allowed our see these

As leader, the leadership, a benefits the grew and Artesyn synergistic market of acquisition. pure realize power introduced innovative play new our we products

partners strategic call over of adoption towards accelerate While growth I'd over Paul. is $X.XX good behind like thank we COVID-XX grow goals making support, of and earnings in to customers, the Overall, with in aspirational shareholders, our look speaking our employees during to long-term long-term growth. conditions, the to than ROIC. markets over me I let the that, plan macroeconomic to rate the the are and our challenging increasing faster forward still times. is of quarter. the achieving potentially you valued turn operating in billion markets. accelerating industrial upcoming revenue, these our With affecting over our to your for this also technologies especially $X.X non-GAAP XX% EPS many Paul? executing and fourth progress crisis we're and revolution, And our core organic

Paul Oldham

Thank you, Yuval morning, and good everyone.

please and financial stock basis, measures amortization, presented otherwise integration our on begin, items. exchange non-GAAP unless and Excluded I from today unrealized foreign non-GAAP losses, will restructuring Before be and a transition that compensation, costs, gains results note stated. all

restructuring to associated in This the Artesyn from quarter, related Shenzhen million of with actions related acquisition. $X.X other synergies and we manufacturing Malaysia, the to costs to recorded transition

generation. to delivered $X.X cash to and FX exceeding press quarter, issued non-GAAP guidance measures pension financial flow from release can outstanding We today. revenue, and also we In reconciliation GAAP operating expectations for results, A losses recorded in liabilities. margin, million non-cash our unrealized related be lease in and gross full our found margin long-term second earlier

EPS increase execution range increased strong in Cash environment Artesyn. synergies million to challenging return the on widened above and invested enabled capital the over and additional our non-GAAP our annualized integration be of by team's $XX generated to Our our we XX%. from to

partially a basis, ago. last full quarter a On Second quarter a $XXX record markets, offset including QX and Artesyn growth million, from and declines a forma up strong prior XXX% revenue million in up in networking. from in with of semiconductor industrial by and revenue X.X% was revenue computing telecom year-over-year $XXX $XXX XX% data quarter and and periods, year grew million medical, pro center

million. Excluding XX% Artesyn, and year-over-year XX.X% organic grew $XXX revenue to sequentially

from from were Turning last million, year-over-year year-over-year and XX% XX% an with improved medical quarter, pro products. related and film Overall, was devices, from a by capacity but memory. the demand and On to semiconductor sales service up a revenue growth foundry investment revenues service forma $XXX increased up million, up demand nearly in our of higher care X% medical and faster over in logic Semi organic about due vast revenue quarter were industrial to market centers. majority QX. basis, to market, strong X% in related also have semi critical of semiconductor declined NAND markets thin year-over-year. our first our grown X% revenue of sales both from grew year and than ability sequentially QX Semi deliver year-over-year. and COVID-XX from On product peers, WFE and grew Revenue in forma year-to-date strong the last to as impacted basis, revenues solid to result XX% basis, some shipments in year-over-year enterprise XX% Hyperscale quarter, sequentially up our a revenue but X% investment wins. constraints our grow, macro pandemic. XX% the declined revenues constraints crisis. X% year-over-year the declined Non-GAAP design exceptionally quarter infrastructure of be million, forma and items, points partially due driven mainly as revenue sectors, telecom expanded the and basis was to COVID. from XX.X%. basis. XXX costs exacerbated networking XX% XX% to COVID-XX almost our benefited almost margin down center Data up general for cost-of-sale Philippine expected XX% was to up global the our nearly and computing than a year-over-year continued strong pro substantially the in offset On on continued revenue sequentially product several increased Margins industrial Telecom sequentially on lower weakness better related from $XX $XX other in by facility. by by offset material by capacity first positive mix by of our pro gross million, to cost $XX

addition, utilization overall our of are some In of to we factory and impact the improved synergy beginning see actions.

of $XX.X $X million the million on all of under goal margins interest XX.X% approximately continue than we quartile Expense variable with make these an our gross critical expenses to and claim Although, repeat to Non-GAAP primarily income we was $XXX,XXX, $X.X items revenue. of almost our investments continue expect quarter, and sales improved increased investments at sales and expense. synergy million, associated and on of up drive in growth. next quarter, as points, top make XX% down percent to to even of leverage do demonstrating operating last to a expense insurance greater not timing our and the the related to Non-GAAP we to XXX last and on million operating from of were other revenues. $XX.X to competitors, XX%. lower steady improved progress net overall the basis quarter, subsequent Non-GAAP is from improve as expenses higher recovery in model R&D primarily favorable

other to be range $X.X the forward. We expense total expect $X to going million million in

our integrating Our and of was primarily mix or earnings. XX.X%, $X.X Artesyn expense non-GAAP foreign tax into a as result favorable million of structure

share, per tax $X.XX was year financing, last on acquisition at around from over Artesyn XXX% to including to remain revenue XX% non-GAAP of The and per QX and contribute quarter EPS synergies million. XX% $X.XX quarter The non-GAAP earnings, ago. for was earnings GAAP rates accretive the date expect the share the over of were expense in Non-GAAP positively and continues $X.XX our XX%. we up forward, to to to from results. was a up margins. Looking over solidly $X.XX realized the consolidated end interest acquisition $XX QX, as higher adding

As largely our our months. goals XX a XX months we well plan first-three Phase after have ahead of original X result, quarters, the achieved to of synergy

to long-term As progress growth, confident Based synergies share further we costs, the integrate Artesyn, or have of goal margin we of XX%. of R&D have meeting of $XX long-term faster us long-term million opportunities while we our found keeping targets achieved drive remain accretion. over improve part reinvest on synergies exceeding into new our great operating to the allowing $X.XX made, annualized in we our and per in EPS to

XX cash the in Turning Total from $XX.X to rose were was from XX, million $XXX securities the level and increased working one net now and to Capital QX. $XXX day of the representing Operating since of for days. ended on balance to QX of days quarter investments up higher marketable with risk DPO. increased was Receivables $XX million. manage XX our by days cash the X.X sheet, flow operations million, reflecting from were DSO environment. were capital million, made and XXXX. highest of $X.X continuing COVID sales days million, $XX times, depreciation we Inventory up quarter. were six $X.X turns million and expenditures we last million quarter Payables by

of times. repurchase debt of in the bank We $XXX million of total the with any debt we shares ended $X.X During quarter, gross and repaid debt during leverage X.X not resulting million, quarter. did

turn modest our medical. and and demand In continue near in in improvement term, see semiconductor market guidance. me let anticipate Now, to we continued the to strong industrial

telecom center around the to in and computing, expect demand We at data networking markets levels. and current fluctuate the

costs, Operating guiding the re-implement risk be ongoing program many changes more synergy environment basis up in a guidance expected operating $XXX range, new and our are to governments see last to XX% expect as and volume million. to minus expenses a with to the strategic flat, to advanced certain as Factoring XXX margins COVID-related of $XX continue COVID-XX macroeconomic etch traction gain structural levels to dielectric on non-GAAP related points or to from including quarter's are quarantine. improvements. engineering be limited we in gross plus mix, revenue COVID, related visibility investment in However, ongoing and OEM. QX anticipated Based related million, on increased we evaluation and XX% to we about the we

As a improvement margin revenues, result, per financially we we $X.XX. earnings. plus To quarter operationally with and margins, great gross in and our delivered operating and expect increase non-GAAP share, earnings a at or record to XX% non-GAAP $X.XX sequential minus almost summarize,

many and play accelerate power plan. benefits growth, market Our operating technology on synergy ahead enabling our to us and realize across trends our strategy capitalize of verticals, and of pure is

to and are are will company or a stated aspirational well we We building goals. our technology Operator? financial the exceeding on on model that, our we your industrial way take top-tier and to track meeting questions. business of long-term With

Operator

Thank Our Diffely of you. the comes Davidson. Tom with from first D.A. [Operator Instructions] question line

is Your go line Please ahead. open.

Tom Diffely

for you taking Thank morning. Good my question. Yes.

up semiconductor mentioned of So beginnings we I'm the is of increase you combination share gains, seeing come? it's first, that still customers curious the in right now, a to your but yet I'm as an or ramp curious at you obviously markets business inventory are

Yuval Wasserman

that. have we our on enough inventory. report don't comment think I visibility to customers' can't I on

Tom Diffely

Yeah, just…

Yuval Wasserman

- We I sorry. am

Tom Diffely

up the a down, the but through I channel. things was faster build end then also the typically, is in and bled off your when going both because go to outgrow didn't you cycle market there say that targets slowed markets

are in your inventory seeing So, of the of a an from maybe not specifically for marketplace build point just customers, tools you in but general, view?

Paul Oldham

Tom. Yeah,

visibility say I to exact for to see our said, can As Yuval we continue hard pull. have that customers. to steady it's us But

inventory in sense levels we're our shipping consuming in changing, sizes, our seeing is inventory customers at our bins. not we're aren't And the really the rate bin are increase it. so Our

Yuval Wasserman

our towards Yeah, in we're don't constructive behavior semi. abnormal Tom, strong to we see QX continued any and demand and very be

Tom Diffely

Paul, in you then, the you marketplace? be margins when think start look over accepted on And Great. more to as they what time new do at the impact products, the will become

Paul Oldham

or generally, we've power to in Well, more a we margins Tom, I with products our as semi, capability, more new result, our new And as have sustain historically. or expect accuracy. products, done innovation, our more grow

Yuval Wasserman

and we operation very to related platform. combination a comment AE a future and is Artesyn we traditional develop rely Tom, the that, as organization There efficient operation. new Another on products, of the combined

to So and much products. a our manufacturing more manufacturing we from efficient benefit cost for expect lower future

Tom Diffely

Great.

Yuval Wasserman

these will of products Some integrated. be vertically

Paul Oldham

And, of portfolio and things the and above our XX%. our higher synergy drive product will ability course, margins as the we of these transition to with contribute complete Artesyn, overall to all goal to continue activities and gross of

Tom Diffely

Okay. And then finally…

Yuval Wasserman

making great that. progress we’re towards And

Tom Diffely

Yeah.

And wondering the constraints. there your of segment It Paul, mentioned could more data some business. that Okay. seemed was were if you like the more around that supply market rest? here, hit why finally, explain was centered you center I that than

Paul Oldham

Yeah.

I running, and supply. still have you this are think, up with issues factories look point our but as largely at, point, at we

in Part supply our market a quarter. was our and that in needs. up sure was constraints also supply kit the products. there You inventory a then, need of customer noticed the we to had still this by products factory to you ship particular an to that meet impacted most few material. case, effort full and And were But this make adequate

Tom Diffely

your time. for Thanks Okay.

Yuval Wasserman

Thank you.

Operator

Bolton Needham our Company. with you. Thank line next & from And the of Quinn question comes

is open. Please go line ahead. Your

Quinn Bolton

basis know I'm growing which shift fastest, stronger is the margin guys. I QX, margin bit Nice be revenue midpoint. guidance. the job why like so so semiconductor, my I in head sounds on guess the the margin revenue the the your and factories. mix get to trying it the could had highest going gross quarter. in at Hey, business, margin I a second much when points little and in you guidance. better at overall should gross be a absorption just But understand up, I'm down on was is XXX gross guys results to the Paul, look you scratching

Paul Oldham

Quinn. question, good a It's Yeah.

we had continues. but unfavorable, I that COVID we pretty costs, as quarter, were go explained, everything had which much right. This Obviously,

So mix hasn't as fall our up, those we we all although overall our continuing the just categories to don't see look another. side. to one And impact much semi within just different product is in market of the as forward, product portfolio things or right

have at and bit. when the other expect activities and factory balance, And the we we revenue on is of inventory increase focused that I'll we little third the which up down, our draw do higher running, we quarter, not margins and reducing part see hubs necessarily are in down so the operating on to are QX, position areas, factories in which in inventory look while also a we note largely all output.

Quinn Bolton

guided it with about then, Got And aspirational revenue on your goal. like guys it. XXXX basis, way just annualized On Understood. I guess are you towards, looking $X.X an looks your to billion. well to

out, expected to kind you up year. In year? of and how XX% that Just of if tracking you wondering, think think even digits kind thoughts. to you next you But as at is that I environment, that mean, it had to XXXX. you would aspirational look any can goal you're like I seems do before target close look get how certainly just WFE next updated high-single perhaps be

Yuval Wasserman

strategic process. announce our Quinn. goals, every within And year, months, Good almost is as the as we complete question, will goals, the we our long-term do find our intent updated we update next And goals. platform few our to to planning right

Quinn Bolton

Congratulations nice on it. again to forward look will we Great, results.

Paul Oldham

much. very you Thank

Yuval Wasserman

Thanks, Quinn.

Operator

Thank with comes line you. of Scarnati from next And question Amanda our the Citi.

Please Your ahead. go open. line is

Amanda Scarnati

Hi. Good morning.

I is and the to a data have clarify of center heard correctly. business, want just question I on comment First that I side the

And in impact or to impact more partly more of that you're capacity just about demand to an if doing an and of and recover demand mentioned due capacity is constraints you Can think constraints? at data business from business or that anytime near-term? the was how talk center that I constraints. you from down you the if seeing expect

Yuval Wasserman

stream demand of more the part Philippine specific in more was of not data into the revenue part I hyperscale, about the constraints Paul, specifically mainly goes that affected question, capacity think, you the to said. So centers, as related by this we COVID-XX capacity - factories,

similar We while see for the rate at market hyperscale draw you be in We -- working hyperscale in faster we continuing as very grow said are continue to capital with And of at will through journey share customers to of we into right closely at going other take, will long-term evaluation the inning what certification see the we practically same our much us, qualification of hyperscale. we gain to know, going point, equipment that and more believe customers, into because and to related in expect level that of be continue general requires strong. third we our the and now, sales, it And our giants engineers, to we their market a and migrate forward, that are will ramp. list customers. adding with

to data is benefit tremendous about because strong. digestion and data there and momentum that growing to to gain are faster continue long very our for to We see but advanced demand mainly centers, very is the grow market continue hyperscale need and will the power grow our wins, doubt presence from by We're the general, large to getting the world primarily of market. as density grow. use The will of underlying follower So than excited center no and we term of expect the as Long-term, a may very affected continue fast storage very period from in of power design future two years to fluctuations, we conversion efficiency. COVID-XX, data ago. our this data

Paul Oldham

we'll just quarter, And as Yeah. of just times the late XX%, little it right. some quarter this ago brand is can almost recall that of customers, and as a a Yuval to up context where see because year we -- from But said, from I'll year. was variation issues. business even last Amanda, new That's X note, see supply

to of these and that expect So we're levels higher sustaining business much continue.

Amanda Scarnati

due medical market the of in in on any and the side things that get industrial the are And was sort needing qualification that Okay. of the you pipeline? increase had saw the already up to and business, of due then to to you seeing or products to rather really COVID times, you existing new speeding increase medical in or

Yuval Wasserman

not I'm sure, change evaluation the medical. time we of in dramatic in if products see a our

I recently related due mixed products, that think, -- a directly obviously, or picture increase for to to demand in our gene respirators saw like we are sequencing COVID-XX, we the solutions tools. very or

to continue space as medical a look at for the engine us. We application growth

medical benefiting diagnostic wins that from also therapeutic like our grew need, that we for our a design more go new capacity, calibration, We million are think current but $XX the have need To you not and into COVID-XX. the applications give from marketing, to I revenue are $XX we related to million?

Paul Oldham

Yeah, we're about $XX in quarter. the

Yuval Wasserman

$XX now. million talked it, about million. -- right we And We're $XX million time $XX we were Yeah. last

Paul Oldham

$XX. over Its

Yuval Wasserman

And a the you get customer, with annuity. This has and once of like solution in an area area. see in we applications, all it the sticky in attributes target expect qualified, Customized grow investment long-term to relationship of to and Over $XX. It to this that becomes is continue a market. critical designs for we interest.

Amanda Scarnati

Great. Thank you.

Operator

from line of our question the with Thank you. Mehdi And next Hosseini Susquehanna. comes

go Your line is open. Please ahead.

Mehdi Hosseini

couple $X.XX. you forma Thank the more up. pro if of Yes. big $X.X targeted taking billion of come asking for than my I'm revenue has I I apologize items. and joined I that picture of the back to a earnings of go A question late, goals so question. already call

on better is that these way at tracking do leverage additional cost side, on structure. what did that perhaps to and revenue. annualized I if goals? you the June the against looked targeted and to with right has are, think that and realized a how you're up EPS, due a there you're about the just it, to is not long-term quarter Is you So some revenue your from But that catching far

Yuval Wasserman

Let Yeah. about me revenue. talk

me Let talk revenue, Mehdi. about the

great And As as our we I we months earlier said we're this aspects of the in to And goals call. multiple said a making really think our plan. to the earlier, aspirational I I of think long-term QX anticipate within we long-term goals. We some finish process. plan, strategic maybe update and towards progress, quarter, you times ahead few came our progress in planning after late are

We rate. are that ahead Artesyn, plan in the of ahead of are of we plan growth integration in

comes company, future few About provide want that? projection we of gross months. So talk when you that it about a updating margin, maybe the the do within to to will

Paul Oldham

Yeah.

talk market. of the me about just Let rest the

right. You're

great revenue on synergies. a are recall getting But approaching model fully our was that on closer. We a synergized progress we're side, And making we're model.

basically synergy we've achieved months. But the us to XX take goals first-three achieve our We Phase to achieve that to XX within our your X Phase thought months we -- goals need said, comment. the to EPS I would As X that quarters.

in feel revenue shape. a bit like on of We're markets the in goals. grown the and we've several long-term the ahead leverage and little those good executing tracking the benefit share plan. next we've synergy that we're our from recovered over driving seeing driving continue business centers. towards growth on many we'll to we faster in quarters, We're actually So work as data of But plan the

Yuval Wasserman

related COVID-XX. very also environment. important be in are I about We some during growth our fluctuations right. linear, evolution in developing comment R&D purposefully note, note in engines the to that large we we more especially live live We a and our more -- really future growth. are that to in a now, Mehdi. we one to selectively wouldn't the in really, today, in comments time very decisions our related this, strategy, made business long-term dynamic need expect One trajectory to some thing investing we prepared But we in as

And R&D have OEMs. And today, spending our our not spend right pursuing decided linear. growth collaboration made I ability have etch address our that really the increase we now be our it to goals, earlier, some opportunities in very we bullish in increased semiconductor a unique said key going we with about we're may we're forward, As meet in to R&D. but comment as long-term to

Mehdi Hosseini

that just a my your to list now basis on changed good problems It's question. you amazing Sure. how problems year-over-year and have have follow-up leads of and

cash per that's assuming would I'll trend that you but net what I How add semiconductor assuming see I a maybe, share. in And were more just continued your are -- one view. that year, hear to rebound plans And do expect continue? a shown love also the follow-up. then and for You've where is? pick memory to your revenue just would up sweet next spot I And growth, mix that, into

what to so... the with and cash So, do

Yuval Wasserman

Yeah.

with start acquisitions. for capital will capital deployment deployment. our very on we me focus looking about to clear our strategy. And additional open and We were actively continue Let

we internally execute and periodically great will opportunistic doing our we not to Board job like shareholders. return our We buyback -- whether obviously to would with deleveraging review and and on or debt a shares other

deploy And of continue power deleveraging obviously, a intent we and and year to listen to that, We comes some at reports, and about market have our because and strong to cash constructive a market, from projections, gain we that semiconductor we're long-term generation to we our is guys' for the customers with and it will the capital. believe West strong fact be very reading to share. future semi. is grow power benefited our When perceived of we will that expected the SEMICON not only be XXXX long-term, you

cross-sell products to embedded continue We into semi. power

we reason, We the continue markets to and SAM, grow focus our faster to increase mission our serve. for continue we on to than that

Mehdi Hosseini

Thank you.

Operator

our line with Krish a from & question comes And you. next Sankar of Thank Company. Cowen

ahead. Your line go is Please open.

Krish Sankar

characterize DRAM? market what NAND had Yeah. Hi. can Thanks or a share is side of there quantify for Yuval, your is my the taking a I them. you and semiconductor between few way on question.

Yuval Wasserman

We that between share our dissected NAND. DRAM never at market never And and way. look we that,

that what Some NAND, products our know either/or we always or up not is up to and end or logic our may memory DRAM the customers' exactly the machines fab. end of on application target within

So I don't we believe that. have

Krish Sankar

Got it. characterize side data the on a if from of way And data is revenues, there then what is percentage you No revenue to center worries. your center hyperscale?

Yuval Wasserman

We at Krish. point, this haven't broken out that

Krish Sankar

understanding Do question most to still like distinct going a think final merging the hyperscale between XX or the you telecom volt on there you road down the difference actually two? is look Yuval. is for some All you hyperscale towards the them of and just worries. that my are When of at at right. site, look No be telecom and do the a and going networking then between see equipment products side. And

Yuval Wasserman

as are a can focused density, now, footprint the from power improve. a go power basically We as technical the more we time-to-market hyperscales. migration the And go follower time-to-market, leading innovative we from with to and conversion perspective, fast teams, of also to unique box with center enable the you customers which your related And an bring important a the talks our in Related table XX see without excited that to into dramatically leader and quickly about increase on power to solutions, the to your or with market cross-pollination. that efficiency means ability increase engineering we data to means some volts our came and and density. believe specifically Right and that will par we advantage here. innovation plays role that, Artesyn margins volume a and

Krish Sankar

Got it? Thanks, Yuval.

Yuval Wasserman

you. Thank

Operator

a our from And line of Molchanov you. next question Pavel James. with comes Thank Raymond

line go Please open. is Your ahead.

Pavel Molchanov

taking a the issue. of for question. Kind core regulatory key Thanks

Now longer the through of any purposes, Kong or Kong I'm independently law for transfer if Kong Hong be that purchasing trade kind Hong in you under no by affected that curious have technology restrictions? customers may is Hong US treated

Paul Oldham

don't as recent But from the don't of that have we any service There transactions impact changes there. to any Yeah. or change there. that customers us operations have we We result a activity. through day-to-day flow out large Obviously, Kong. or we Hong transaction a are of see

Pavel Molchanov

Understood.

question. a And then good sheet That's hear. Okay. balance to

debt any sheet. quarter, amount $X.X $XXX,XXX you the balance of of accelerating your pay down to there one allocation? paydowns, million capital for on the that modest of since Is but is pretty have continuing for rationale debt per for cash You're goals obviously stated

Paul Oldham

And a we question, brought down the you've It's have Yeah. debt as seen, really modestly. good Pavel.

lower that We'll environment you that see view financing is as in don't anticipate we in doing. advantage environment, or to see rate or lower. we that beyond But to earlier changed an the the the extremely the bringing ability net X.XX% frankly, debt of QX, with cost our modest Our our really accelerating cost And swap In interest as place interest is lock favorable rates. the has we our rates quickly. go. in with debt around don't debt put how been amounts recall, total down we've payback very

Pavel Molchanov

sales kind pandemic. Okay. And have if any, curious region? America Mexico what to out hit the stands your on region as just global you a geographic South America then quick from and mix. exposure, now I'm of customers, right the Latin hardest one

Paul Oldham

customers for Certainly, quite America, and mostly would because regions. South There it Mexico. have various smallest that power our of small. I'd in operations say, certainly be embedded is products from it's in, Mexico, But some, exposure have we is that have embedded there power all some our

Pavel Molchanov

very Thanks Okay. much.

Yuval Wasserman

you. Thank

Operator

and And to you. to any turn no Thank conference back further for Yuval the I'm remarks. showing would like I over further questions Wasserman

Yuval Wasserman

had Thanks, for joining COVID-XX. great of everybody, today. a us quarter, despite We

talking during looking We to the continue company. And I'm company to the to of of outperform the and of the projection about the Thank plans, and short-term do you. forward better future long-term on and excited the quarter. you many

Operator

a you program. Everyone, in you thank And all disconnect. great the for gentlemen, today's conference. This does day. have and Ladies may participating conclude

Advanced Energy Industries (AEIS) 5 Aug 202020 Q2 Earnings call transcript