CEVA - NASDAQ

Good day, and welcome to the CEVA Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Richard Kingston, Vice President, Market Intelligence and Investor and Public Relations. Please go ahead, sir.

Thank you, Rocco. Good morning, everyone. I'm well in the CEVA's second quarter 2023 earnings conference call. Joining me today on the call are Amir Panush, Chief Executive Officer; and Yaniv Arieli, Chief Financial Officer of CEVA. Before handing over to Amir, I would like to remind everyone that today's discussions contain forward-looking statements that involve risks and uncertainties as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. Forward-looking statements include statements regarding market trends and dynamics, including anticipated recovery in semiconductor startup funding and opportunities for WiFi and generative AI, our market position, strategy and growth drivers, demand for and benefits of our technologies and expectations and financial guidance regarding future performance, including expected recovery in revenues and guidance for the third quarter and full year 2023. For information on the factors that could cause a difference in our results, please refer to our filings with the Securities and Exchange Commission. These include the effect of intense industry competition; the ability of DVA technologies and products incorporating CEVA's technologies to achieve market acceptance; CEVA's ability to meet changing needs of end users and evolving market demands, the cyclical nature of and general economic conditions in the semiconductor industry, see his ability to diversify its royalty streams and license revenues, CEVA's ability to continue to generate significant revenues from the handset baseband market and to penetrate new markets, and CEVA assumes no obligation to update any forward-looking statements or information, which speak of their respective dates. In addition, we will be discussing certain non-GAAP financial measures, which we believe provide a more meaningful analysis of our core operating results and comparison of quarterly results. A reconciliation of non-GAAP financial measures is included in the earnings release we issued this morning and in the SEC filings section of our Investor Relations website at investors.ceva-dsp.com. With that said, I'd like to turn the call over to Amir, who will review our business performance for the quarter and provide some insight into our ongoing business. Amir?

Thank you, Richard. Welcome, everyone, and thank you for joining us today. Our second quarter results reflect the dynamic environment more about by challenging macroeconomic conditions that has led to slower-than-expected recovery in some regions. On the other hand, we also saw resumptions in chip demand following a few quarters of inventory correction. Our licensing business experienced a slowdown in the quarter, which I will explain momentarily. On royalties, we saw our royalty revenue recovered to grow 17% sequentially, and we anticipate this recovery can continue in the coming quarters. In licensing, our revenue came in below our expectations. The primary reason for this relates to the semiconductor start-ups, a customer base that is an important contributor to any IP licensing business, semiconductor startups rely on venture capital funding to underpin their businesses. Funding from VC for semi start-ups slowed down towards the end of 2022 and global VC funding for the first quarter of 2023 fell 50% year-over-year. Consequentially, some of the deals with start-ups, we anticipate closing in the quarter did not come through as planned, and the resulting shortfall and licensing revenue was unexpected. However, we are already seeing funding of startups in the semiconductor ecosystem, picking up again and anticipate licensing to these companies will recover in the coming quarters. We also saw mixed results in our design services activities in the quarter, where the overall defense industry is moving slower than expected to conclude new investments and funding there takes more time. As a result, some projects in our sales pipeline are taking longer to get funded. Looking at licensing business, concluding in the quarter in more detail. We signed 17 new licensing and NRE agreements we have not already interest in our wireless communications offerings encompassing 5G cellular IoT, WiFi, Motive and UWB. All of these technologies continue to be in demand with build signs in each of these areas. We signed 3 WiFi 6 deals for ComboChips, where we also licensed our Bluetooth technology. One of these deals was with a strategic customer, a leading supplier of connectivity chips into IoT devices, spanning consumer, industrial and smart home. This latest deal with the customer is a multi-use agreement as they look to expand their Wi-Fi 6 business on the back of their highly successful WiFi 4 business. So this latest deals with the customers at where they have shipped more than 300 million CVA power Wi-Fi chips to date. As we have discussed previously, the average royalty per unit we get for WiFi 6 is higher than previous generation of WiFi. Having an established customers and leader in this space migrate to WiFi 6 presents another potentially strong contributor to our WiFi royalty stream in the coming years. Other deals of not in the quarter include 4 new agreements for automotive, 2 for our UWB technology from digital keys and in-cabin greater applications and 2 for our AI compiler technology that creates fully optimized onetime software for our sales boosters and new plans -- our product offerings are very well aligned with the automotive industries push towards electrification and even more powerful safety system. We have many touch points already in the car, including our Vision AI processors for ADAS, sensor fusion DSPs for [indiscernible] battery management systems and UWB Bluetooth Wi-Fi, 5G and V2X for safety, infotainment, communications and connectivity. Our inherently low power solution are an excellent fit for automotive. And while it can take quite a number of years before automotive design wins show up in production vehicles, we are very excited about design wins we have secured to date and the potential royalty streams that we can generate from this highly lucrative market. Finally, we signed 2 new agreements in cellular IoT space, one for our new Narrowband IoT technology and another for targeting 5G webcast. Now to royalties. After a weak first quarter, we saw a good recovery in the second quarter, driven by smartphone targeting emerging markets and restocking for consumer and industrial IoT products following the inventory correction. Royalties for the quarter reached $9.5 million, up 17% sequentially. The we saw CEVA-powered cheap volumes increased sequentially across the board structure of markets we address and a notable recovery in smartphones, PCs and 5G base stations in particular. On the last earning calls, we explained there was a significant inventory correction taking place, particularly in the smartphone and consumer IoT spaces where we have meaningful exposure. Following conversation with our customers and other companies in the supply chain, we believe that this inventory has been worked through for the most part, and our royalties reflects a resumption in demand to refill the channels. We reiterate our belief that the first quarter was the bottom for our royalty business, and we anticipate continued recovery for our royalty business through the remainder of the year. Now, I would like to switch to discuss a new strategic market time expansion opportunity that we are addressing with our products targeting AI from the cloud to the edge. Earlier this week, we announced our latest new or processors targeting generative AI applications. Generative AI is creating a lot of headlines recently, dominating the AI narrative, thanks to CET, GPT and other generative pretrained transformers or GPT models. In general, AI is divided into training, including deplaning and is learning and inference, including computer vision, co-piloting, photonics such as fast optical networking animal. CEVA has addressed influence application with our sensor or and Newport product line for a number of years and has been successful in helping our customers deploy AI across multiple end markets and devices, including industrial, automotive and consumer. Generative AI takes the air experience to the next level. Transformer based models have led to significant factors in several forms of generative AI. They are key in both increasingly powerful text image models such as deli or stable diffusion and language and instruction following models such as JGP or Stanford unpack. Today, such networks are typically executed on GPU-based compute infrastructure in the cloud because of their massive model sizes and high memory and bandwidth requirements. However, as transformer-based networks mature and become increasingly popular, there is an opportunity spanning all the way from the cloud to the edge to increase the performance and efficiency of executing generative AI. For example, there are new generative AI models, which are domain and enterprise-specific reduce smaller proprietary data sets with fewer parameters and expert systems. These generative AI models don't require GPU-based compute to execute. And thanks to our extensive experience in developing processors that support AI in low-power devices we have enhanced our new NPU family to support this transformer-based large language models, 11N and generative AI models to allow natural language processing and generative capability locally, KA co-piloting with incredible efficiency. This directly improved the latency and overall personal experience of using generative AI protect the privacy of the user data, addressing a key concern of cloud-based AI today and significantly reduces the cost per quarry. I believe that our ability to support transformer architecture with exceptionally low power consumption and highly efficient positions us very well to exploit this new wave of AI across the full spectrum of end markets from consumer IoT to industrial, automotive and networking. Our new program is already available for licensing to customers, and we are very excited about the potential here to grow our AI footprint with this enhanced product family. In summary, despite the revenue shortfall in licensing this quarter, we believe our portfolio of wireless communications and sensing AI technologies is unlevered and leads the industry in terms of performance, power efficiency and quality. Our new plant family further expands our strength in AI to address the growing trend of deploying the incredible potential of generative AI to any device and application. With our technology leadership position and top-tier customer base and desire to go and expense, we remain very optimistic about the long-term trends in our business and our ability to drive long-term shareholder value. Now, I will turn the call over to Yaniv for the financials.

Thank you, Amir, and good day to all. I'll now start by reviewing the results of our operations for the second quarter of 2023. Revenue for the second quarter was $26.2 million as compared to $33.2 million for the same quarter last year. The revenue breakdown is as follows: licensing NAV and related revenue, reflecting 64% of total revenues, was $16.8 million as compared to $22.1 million for the second quarter of 2022. We -- the licensing business can be volatile in the IP industry. And in recent periods, it has been influenced both with cyclical macroeconomic trends as well as short-term conditions such as shifts in fundings on startup customers. Royalty revenue reflecting 36% of total revenue was $9.4 million as compared to $11.1 million for the same quarter last year, illustrative of the overall soft demand in our end markets for this time last year. Encouragingly, on a sequential basis, royalty revenue grew 17% and as we expected a significant improvement and experienced significant improvement in the smartphone, 5G base station and PC markets from the first quarter level. Quarterly gross margin came in lower on GAAP and non-GAAP basis as compared to our guidance due to lower revenue base and higher subcontracting and related expenses in our cost of revenues. Gross margin was 79% on a GAAP basis and 82% on a non-GAAP basis compared to 82% and 85% guidance on GAAP and non-GAAP, respectively. Our non-GAAP quarterly gross margin excluded approximately $400,000 of equity-based compensation expenses and amortization of acquired intangibles of $400,000. Total GAAP operating expenses for the second quarter was lower than the low end of our guidance at $26.9 million due to immediate actions taken by management associated with lower overall employee-related benefit accruals as well as better FX environment with a stronger U.S. dollar compared to other currencies and lower overall marketing-related activities. Total GAAP operating expenses for the second quarter, excluding equity-based compensation expenses, amortization of intangibles and holdback expenses were $22.4 million, also below the low end of our guidance due to the same reasons I just explained. GAAP operating loss for the second quarter was $6.3 million, up from GAAP operating loss of $0.3 million for the same quarter last year. Non-GAAP operating loss was $1 million compared to operating income of $4.6 million for the same quarter a year ago. GAAP and non-GAAP tax expenses of $0.5 million was recorded, mainly associated with the holding tax deducted by our customers that could not be utilized and more expense. Our GAAP net loss was $5.8 million and diluted loss per share was $0.25 for the second quarter of 2023 as compared to a loss of $1.1 million and diluted loss per share of $0.05 for the second quarter a year ago. With respect to other related data, shipped units by SVO's licensees during the second quarter of 2023 were 370 million units, up 25% sequentially compared to the first quarter of 2023, reported shipments of 297 million units and down from 433 million units a year ago, primarily to the reason Amir discussed earlier. On the 370 million units reported 79 million units or 21% were for handset based chips, up from $27 million in the first quarter of the year. Our base station and IoT product shipments were $291 million, up 8% sequentially from 270 million units for the first quarter of 2023 and down 17% year-over-year from 349 million units. Bluetooth shipments were $210 million for the quarter as compared to $190 million for the first quarter of 2023. As we saw in the beginning of the restocking following the inventory correction we experienced WiFi shipments were 29 million units as compared to 21 million units in the first quarter of 2023. Cellular IoT shipments were 21 million units as compared to 29 million units in the first quarter. And other shipments under our base station IoT umbrella totalled 31 million units in the quarter. This includes our computer vision, AI, audio sensor fusion, 5G RAN and DSPs for noncellular communications. As Amir stated, we saw a significant recovery in handset baseband ships for smartphones in the quarter, driven by channel restocking in emerging markets following the inventory collection in the prior quarter. As for the balance sheet items. At the end of the quarter, our cash, cash equivalent balances, marketable securities and bank deposits were approximately $136 million. Our DSOs for the second quarter were 47 days better than the first quarter is 55 days. During the second quarter, we used $4.8 million cash from operating activities, our ongoing depreciation and amortization was $1.4 million and purchase of fixed assets was $1.1 million. At the end of the second quarter, our headcount was 497 people on Fub10 were engineers. This is the same current as we had at the end of the first quarter. Now, turning to our outlook. Our licensing and Irene related revenue business is fueled by a strong portfolio of wireless connectivity and sensing AI technologies and provides critical building dogs for many in the semiconductor industry. With that said, and with the current market condition, we're taking a cautious approach and forecasting a lower base revenue level than achieved last year. In royalties, the correction and improved environment in handset baseband royalties can continue into the second half of the year. Our base station IoT customers also look more positively in the upcoming 2 quarters. So we anticipate sequentially higher royalties for the third and fourth quarters. In parallel, we'll continue to monitor market trends. Early in the year, on our Q4 earnings conference call Amir outlined this scenario and the potential of the licensing business to be impacted by project expense adjustment and realignments within the semiconductor industry. At the time, we also stated that this may further our cost control measures if required. In light of the recent financial results, we focus on the products and technology investments and to some extent, also tied to the current macroeconomic environment, we have acted and we have taken a few immediate measures to reduce overall headcount and expenses and forecast overall lower expenses in both the third and the fourth quarter. We'll continue to monitor our expenses closely and strategically invest our resources. Specifically for the third quarter of 2023, gross margin is expected to be higher than the second quarter, approximately 82% on a GAAP basis and higher sequentially on a non-GAAP basis at 85%, excluding aggregate-based compensation expenses of $0.4 million and amortization of acquired intangibles of $0.4 million as well. OpEx for the third quarter is anticipated to be slightly higher compared to the second quarter of 2023 due to R&D effort allocation from cost of goods and in the range of $26.7 million to €27.7 million, including an anticipated $4.7 million of equity-based compensation, $0.8 million for amortization of acquired intangibles. Non-GAAP OpEx is also expected to be slightly behind in the second quarter due to the reasons I just explained and in the range of $22.2 million to $23.2 million. I want to emphasize that overall expenses for CEVA in the third quarter is forecasted to be lower than the lower second quarter expense level that we recorded due to the cost measures I just mentioned. Net interest income is approximately $1 million taxes for the third quarter are expected to be shy of $1 million derived mainly from holding taxes associated with new deals to be signed and reported royalties during the quarter. Share count for the third quarter is expected to be approximately 24.7 million shares. Rocco [ph], we could open the Q&A session.

[Operator Instructions] And ladies and gentlemen, our first question today comes from Matt Ramsay with TD Cowen.

Thank you very much. I guess for my first question, Amir, I totally get the changing sort of landscape right now from a licensing perspective and some of the things that you mentioned about smaller and start-up companies and their funding situation to take licenses. So I get that on the headwind side. I guess what -- I'd like to hear a little bit more about the licensing trends in China. We've heard from a few folks that as the HiSilicon Huawei semiconductor business essentially couldn't manufacture stuff on the leading edge anymore. There's a lot of new companies that have sprung up over there from the same engineering base. and have quite a bit of funding behind them. So I guess, could you talk a little bit about any restrictions you guys might have in terms of export controls or whatnot and licensing into China, what the licensing trends are there? And I guess I'm a little bit surprised that some of those new companies that are popping up over there maybe didn't make up for some of the shortfall that you mentioned in the Western markets.

Yes, very good point. I think, Matt, several things here. First, that's definitely a potential as we look forward. Some of those companies that you mentioned, there is a very strong engineering base there that's actually extremely familiar with our technologies, and we see that interest coming later on in the year. But those things -- those changes have happened more recently, and that will take some time for basically get established, getting the funding building and then deciding on the technology product line. So the activity overall is still very strong. It's just that some of those decisions taking longer. So our business in China is solid. And actually, we see a lot of potential as we keep driving towards the next few quarters. But overall, as I mentioned in my prepared remarks, is that the overall fine macroeconomics and with VC funding and just decision to make to take on new projects and to use their cash and just taking longer. That's what's really happening in this quarter as we look towards the rest of the year.

And I'll add that, maybe you asked about export control. So we obviously comply with expert control and don't have any special limitations that we are aware of or that as anything has changed recently. So that's really not the case. But those exact type of companies that you mentioned that maybe started off and the great potential but didn't get to the final stage of signing and executing those deals that we are working with.

As my follow-up question; Yaniv, I wanted to focus on the model a little bit. You mentioned in your script and obviously, in the results of guidance, the lower licensing revenue. So I'm just trying to get my head around what you guys are trying to message there. I mean are we for the full year 2023, are we looking at licensing revenue similar to what it was in 2021. So like that $73 million, give or take, is that kind of -- I'm just trying to use that as a benchmark to see if that's in the right ballpark. And then the second piece is you mentioned lower OpEx for Q3 and then Q4 as well. But maybe you could go through the non-GAAP guidance again on OpEx because maybe I misheard, but it looked like it might be actually up a little bit sequentially in September versus June. So if you could help on those 2 items, I'd appreciate it.

Sure. Let's start with the licensing. I think for Q3 and Q4, we're keeping the licensing more or less. So obviously, it could be a range, plus/minus $1 million, $2 million, depends how the quarter will look like. But we're looking about $17-ish million, like a very similar to what we came out right now for Q3 and Q4, again, pending deals that we could get signed maybe earlier than planned or larger in size, but that's the model. So probably a little bit shy of the 2021, but that's the in the ballpark that you asked about. That's on the licensing royalties we mentioned, we started with 8 gone up to 9.4%. We are looking at both Q3 and Q4 sequential growth. We don't know exactly the pace and the magnitude of that. So we are taking it slow. But all the indications from the old report we received from Q2 showed that there is a significant recovery in handsets and PCs and run base stations. So, all that is baked in and continuous growth in the next 2 quarters. Not necessarily 17% sequential growth, but still more limited than growth until we get the actual report and have a better obviously visibility. On the expense level, I want to again emphasize the 2 expense lines. There is the cost of goods for us and the R&D on the operating expenses and the expense that moves around a bit from quarter-to-quarter between R&D and cost of goods is the actual service costs and EDA costs that are associated with those services that that we provide. So margin -- gross margins were slightly higher in the 85% both for Q3 and Q4 compared to 82% that we just reported. On the other hand, some of those higher expense and better margins or lower cost of goods expenses go to back to the R&D line. So you're right that for Q3, it's slightly higher in the operating expenses. We guided $22.2 million to 23.2%, so somewhere in the middle is probably where we end up, including those variable expenses that move up and down from R&D to cost of goods. But if you look at the overall expenses with that higher gross margin, you'll see that the overall expenses from Q2 to Q3 will go down. And that's the plan for Q4 as well.

Okay. Particularly the last point about the total expenses, including COGS, that's helpful.

And our next question today comes from Kevin Cassidy at Rosenblatt Securities.

My questions around the licensing during the quarter. When you're working on these deals, they get flipped out or were they cancelled?

Kevin, that's a good question. It's actually to some degree a mix, but to the most part, they are getting delayed. So definitely, there are companies that take longer to make those decisions. On it takes some way for them to get the final approval of the funding that they need in order to call to make the final call and license from asset technology. That's the majority of the cases, but there are also some cases where the company decided eventually not to go ahead.

I'll add one more thing, Kevin, that we also find 1 or 2 deals that were signed, but because of payment concerns until the funding gets executed, we didn't deliver and didn't recognize. So you will see it and that's just for this quarter, it happened in the past as well. And if we're not sure about the collectibility we don't deliver and don't recognize any revenue. So on both sides of the layer.

Okay. Great. And on your new NPU, that's exciting degenerative AI. And I'm sure you've been developing this with customers already or potential customers. Can you say where the applications are in the handset at the PC? Or is it a new types of pro [ph]?

It's actually -- Kevin, great question. It's actually across a wide variety of applications. You see that right now, so-called small for edge devices, co-piloting use cases. So the like that you mentioned like PC tablets and handsets devices, that's definitely where you will see those things deployed in the future. In addition, things related in the future for high-speed photonics, also in areas of automotive for similar or different type of use cases and really quite a wide range of applications in the consumer space and automotive.

Okay, great.

[Operator Instructions] Our next question comes from Chris Reimer of Barclays.

I was wondering if you could give any more color. You've mentioned several times in the past quarters about getting into the industrial and the larger consumer products markets. I was wondering what has to happen before you break more into that area?

Yes, we are actually already playing quite a bit in the industrial space for things, everything related to AI application and DSP processing as well as with our leadership in wireless communication. So there is already quite high adoption with our different type of WiFi blue to 5G technologies and Redcap that is coming to the industrial space. I don't think there is one thing in particular that we need to do differently but it keeps driving the innovation with our product line and addressing this market. Overall, like with the other markets, we are focusing a lot on power efficiencies and high performance and high quality of our products, and this is very applicable also for the industrial space.

Okay. And touching on the efficiency measures, how sustainable are they? And if you could just touch on what exactly you did in order to reduce expenses.

Yes. I think the best way to look at it is really starting with the strategic decision first where I want our team to focus in terms of driving the long-term growth. So first, we really have a very strong leadership in wireless communication spending on the way from 5G to WiFi to containment -- and definitely, that's area of focus that we'll keep and invest and enlarge our capabilities there. And the other focus area is around DSP processing moving into the AI space. And as I mentioned, the new PM with the additional very great capabilities to support transformers and generated. So those are the focus areas that we are having investing with that. I keep basically walking with the team where we see other activities that are necessarily with the focus of the long-term strategy of the company, and that's what basically we drive more efficiencies and overall cost reduction we have done that through the -- towards the end of this quarter and as we get into Q3 and Q4, as Yaniv mentioned, and we will continue monitoring basically our success in the market and the strategic activities we want to drive in order to ensure the focus. Overall, we have a very strong focus on our IP portfolio to drive that to the market.

Got it.

And our next question comes from Gus Richard with Northland [ph].

I was just wondering if you could give us a little bit of color on the geographic distribution of your licensing business.

The same as in the past, nothing too dramatic. All of our service business is in the U.S. relating to aerospace and defense, strong presence in China. More than half of the business usually comes from -- and as we were asked earlier, also one of the new start-ups are emerging and a lot of investments overall in the last decade has been relevant for. We're seeing more in the Europe and the U.S., obviously, opening and creating fabs one yesterday about opening a new fab in Europe or with the joint -- with a very, very large semiconductor players. All that fuels both the U.S. and Europe to more sensitive services, IPs, ship design activities or to be able to fill up those fabs. So trying to shoot in all the different areas, new markets, obviously, will also change a bit the mix, geographical mix for us. Japan has been strong. This last quarter, Taiwan has been strong for us with a very nice deal there. So all over the place, but I would say that we're trying to and add more offerings and more revenues over time in both Europe and the U.S.

I will add a little bit Thanks, Jane. I will add a little bit more color on that. We have talked about 4 deals that we had this quarter in the automotive space. And this with the generative AI and overall focus on high-performance NPAs for the AI. Those are the type of technology that will help us actually to expand very, very nicely in the other regions. And on top of that, in the previous earning calls, I mentioned about so-called the $10 million that we expected more to come towards as we go into 2024 and 2025, which is the finding the local funding for a local semiconductor industries from the fab to overall development. This is definitely something that we see happening in the different regions, and that will also propel more opportunities for us. So this with the combination of focusing on the AI space and automotive, in addition to our leadership in wireless communication will drive more adoption of our technology so called outside FX.

Got it. Very helpful. And then, just -- and again, back to the licensing business, as you look forward, where do you see your best opportunities for licensing over the next couple of years? Is it AI auto? Or does it remain wireless? Any color in that area would be helpful.

It's quite similar to what I mentioned previously. There is, first, of course, everything related to Wireless communication. We are in a really a very strong position, and we expect that to continue and even to strengthen. So that definitely will continue to drive a significant portion of our licensing and business overall. But also in addition, really the DSP processing and moving into AI, that's called the new growth area on top of that, that will drive lots of our success. And lastly is that in the previous calls, I mentioned our software embedded application goes on top of that, that drives much more demand directly with the OEM that will drive also additional growth for us, especially on the royalty side longer term.

And our next question today is a follow-up from Kevin Cassidy of Rosenblatt Securities.

Okay. And just for a little more detail on -- with the core deals in automotive. Are those traditional semiconductor companies? Or are they Tier 1s or you been dealing with automotive companies that are designing their own semiconductor...

So in most cases, we are dealing with the Tier 1s or the semiconductor -- sorry, we are dealing with the semiconductor suppliers and in some cases, also directly with the Tier 1s, it's really depending on the application and how they would like to deploy it in their systems. But it's a combination with majority of the semiconductor companies.

Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to Richard Kingston for closing remarks.

Thank you for joining us today and for your continued interest in CEVA. As a reminder, the prepared remarks for this conference call are filed as an exhibit to the current report on Form 8-K and accessible through the Investors section on our website. With regards to upcoming events, we will be participating in the following conferences; the Oppenheimer 26th Annual Internet Communications and Technology Conference taking place today virtually frozen blocks Third Annual Technology Summit, the age of AI, taking place August 22 to 24, virtually, Jeffry Semiconductor, IT, hardware and communications technologies, some at August 29 and 30 in Chicago and the Jefferies Israel Tech Trek September 11 to 13 in Israel. Further information on these events and all events we will be participating in can be found on the Investors section of our website. Thank you, and goodbye.