Good day, and welcome to the CEVA, Inc., Third Quarter 2022 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, Investor & Public Relations. Please go ahead, sir..

the scope and duration of the pandemic, including continued restrictions in China; the extent and length of the restrictions associated with the pandemic and the impact on customers, consumer demand and the global economy generally; the ability of CEVA’s IPs for smarter, connected devices to continue to be strong growth drivers for us; our success in penetrating new markets and maintaining our market position in existing markets; the ability of new products incorporating our technologies to achieve market acceptance; the speed and extent of the expansion of the 5G and IoT markets; our ability to execute more base station & IoT license agreements; the effect of intense industry competition and consolidation; global chip market trends, including supply chain issues as a result of COVID-19 and other factors; and our ability to successfully integrate Intrinsix into our business.

CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. With that said, I will now hand the call over to Gideon..

Thank you, Richard. Welcome everyone and thank you for joining us today. CEVA managed to deliver year-over-year revenue growth, both in licensing and royalties, during a difficult economic climate. This highlights our diverse product portfolio and resilient business model.

We continue to gain momentum with our wireless and Edge AI adoptions across an expanding customer base as can be seen by our licensing revenue achievements. Our royalty composition shows notable strength in 5G RAN, while lower handset baseband royalties reflect adjustments to inventory levels at the back of a slowdown in consumer demand.

Revenue for the third quarter came at $33.7 million, up 3% on a year-over-year basis. The licensing environment continues to outperform, delivering $22.3 million in licensing revenue, on the back of 18 licensing agreements.

Customer agreements this quarter are for a broad of range market segments among which are ADAS, Wi-Fi devices and access points, wireless audio devices, satellite communication and more. We are also expanding our design pipeline resulting from the unique specialty and focus of our Intrinsix business unit in the defense and RF design spaces.

China and the U.S. were the larger drivers for our business in the quarter, while Japan is also becoming an important market for us, due to its large automotive and industrial activities there. Royalty revenue came in at $11.4 million, up 2% on a year-over year basis.

Handset baseband royalty were up 16% year-over-year, but down 20% sequentially, reflecting the weakening economy and inventory adjustments.

Our base station IoT royalties, on the other hand, were down 3% year-over-year, but up 16% sequentially, driven by growing 5G RAN shipments and as our two larger OEMs are benefiting from share gain in China and continued 5G CapEx investment in the U.S.

Also of note, an OEM customer of ours recently won the majority share of a very sizable RAN deployment in India, which will further contribute our royalties starting from next year.

Overall, the diversity of product and customer we have under the base station and IoT category led us to report our second highest royalty revenue quarter of $8.2 million for this category and helps us to mitigate headwinds in the consumer and mobile spaces.

A noteworthy development in relation to our diversity was the third quarter launch of a new wearable device from a major OEM that is enabled by our cellular technology.

That being said, the further deterioration of consumer demand, coupled by -- with extended COVID-19 restrictions in China, is driving OEMs across the handset and consumer electronic industries to adjust their inventory levels. As a result, our royalties are not expected to grow in the fourth quarter as we reach the holiday season.

We remain prudent in managing our investments to drive our diversification strategy and continue to keep a close eye on and monitor our operating expenses. Let me spend the next few minutes to update you on other aspects of our growth strategy, which is to increase our IP content by going up in the value chain and by licensing software IP to OEMs.

We believe this will enable us to develop a trusted partnership with our key customers and will lead to higher license fees and royalty ASP. We recently announced the Penta-G RAN platform, which extends our portfolio for the 5G RAN market beyond the DSP cores that we already licensed to the top tier base station OEMs.

Penta-G RAN is a comprehensive solution that offers a full baseband chain through the integration of CEVA DSPs, our proprietary modem accelerators, AI engine, and the related software all required to enable baseband processing for various RAN settings.

Penta-G RAN reduces the high entry barriers for the RAN chipset market, which is currently exclusive to a very few large OEMs, who build their own ASICs or use Xilinx FPGA.

It paves the way for semis and OEMs, who want to penetrate the space at the back of disaggregation in RAN architectures and the growing adoption of Open RAN, active antennas, Massive MIMO, small cells, and very promising private networks.

The 5G market poses diversified and secular growth opportunities for CEVA, and the Penta-G RAN proposition will increase our license revenue and royalty ASP. The other aspect of our strategy is revenue diversification via software IP to OEMs, which we recently started to engage with customers.

We have discussed in the past our strength in wireless and audio IP for wearables devices such True Wireless Audio, gaming headsets, smartwatches, hearing aid and down the road, VR and XR headsets. We have more than 50 licensees using our technologies, and our annual shipment unit into this space surpassed 500 million units last year.

These semis and their OEM customer base form a sizable ecosystem of users that need also software IP on top of our hardware IP. In the last few years, we have invested in building up a software IP technology base that includes spatial audio, AI-based environmental noise cancelation, voice recognition, and IMU-based activity detector.

We are taking advantage of our ecosystem to engage and license software IP directly to the OEM. We already signed up a top five headset OEM that will use our software IP technologies on top of a chip using our hardware IP.

We are actively pursuing and in evaluation with other OEM’s and believe this poses a sizable opportunity to grow to our royalty base. In summary, CEVA is performing well during a challenging environment. We are focusing on things that are in our control and maximizing the available licensing market.

Our strategy and dominance in wireless and smart sensing enable us to continue to grow our customer base, and as I pointed earlier, we are looking at content increase and software IP to further monetize our valued technology.

With that said we are mindful of the current challenging macro environment space and will remain disciplined and prudent in focusing our investments on differentiation and shareholder value.

Last, before handing over the call to Yaniv for the financials, after more than 17-years as the CEO of CEVA, I have decided to retire from the CEO position as of December 31st this year, while continuing to serve as a Board Member focusing on growth strategies.

It was a great honor to serve you over these years where through organic investments and M&A, we managed to transform and pivot CEVA on wireless and smart sensing excellences. In looking back over these years, focusing on technologies that reduce entry barriers for our customers made us stronger and more resilient.

CEVA carries a great promise, its technology edge is undisputable, and it’s vibrant and relentless culture enable it to see ahead and be committed to execute on this. Gordon Moore of Intel used to say, it’s always the next generation that drives the business cycle, which I believe more represents the CEVA DNA these days.

As we announced this morning, Amir Panush will take over the CEO role starting January 1st 2023. Amir has an excellent track record of leadership at large technology companies, including TDK, InvenSense, and Qualcomm and has strong relationships within the industry, with many intersections with CEVA’s target markets.

I believe there is no limit to where Amir can take CEVA from here and the markets it will expand into under his leadership. I am excited on how this will play out for CEVA and its shareholders. To all CEVA employees, I’d like to take this opportunity to thank you for your tireless devotions in driving the CEVA strategy and promise.

CEVA is giving you the platform to maximize your innovations and to witness how these are proliferated across many products and markets. I am proud of your achievements and confident that with Amir in the lead, CEVA will continue to be an exciting place to work and grow. Let me now turn the call over Yaniv for the financials..

$0.4 million equity based compensation and $2 million of impairment as well as $0.5 million for the acquired amortization. Our GAAP operating expenses for the third quarter was above the high-end of our guidance $29.7 million, due to the same one-time impairment charges associated with the Immervision and ASTRI intangibles.

OpEx also included an aggregate equity-based compensation of approximately $3.3 million and $4.6 million for the impairment and amortization and write-offs.

Our non-GAAP operating expenses for the third quarter, excluding equity-based compensation expenses, impairment, amortization and write-off were $21.8 million, below the low-end of our guidance, as also demonstrated in the prior quarter and this was due to positive FX effect on our expenses, lower outsourcing costs and overall compensation related expenses.

Our GAAP operating loss for the third quarter was $4 million, down from a GAAP operating profit of $1.7 million in the same quarter a year ago.

GAAP quarterly operating profit included one-time, equity-based compensation of $3.7 million; and the impact of the amortization of the acquired intangibles of $1.3 million; $0.3 million of costs associated with the Intrinsix acquisition and the $5.5 million associated with impairments.

Our non-GAAP operating profit was $6.9 million, up 4% from the third quarter of 2021. For the first nine months of 2022, our non-GAAP operating profit was up 9% year-over-year to $16.9 million, illustrating the growing operating leverage we have achieved in this -- as we scale the business.

In the third quarter, we wrote-off $15.7 million of deferred tax assets, including withholding tax assets that we will not be able to utilize as a tax credit, which was recorded in the tax line.

Non-GAAP tax was $2.2 million or 34% pretax income, higher than usual, as we now record tax expenses based on the withholding tax amounts when revenues are recognized at the applicable tax rate of 5%, 10%. U.S.

GAAP loss for the quarter was $21.3 million and diluted loss per share was $0.96 for the quarter, as compared to a net loss of $0.2 million and diluted loss per share of $0.01 for the third quarter of 2021. Our non-GAAP net income and diluted EPS for the third quarter were $4.7 million and $0.20, flat year-over-year.

Non-GAAP net income and diluted EPS for the third quarter excluded all the items I previously mentioned. With respect to other related data. Shipped units by CEVA’s licensees during the third quarter of 2022 were 357 million units, down 23% from the third quarter of 2021 reported shipments.

The 357 million units reported, 78 million units, or 22%, were for handset baseband chips. Base station and IoT product shipments was 279 million units, down 20% sequentially and down 31% down year-over-year.

Also in the quarter, we learned that one of our customers has begun to deploy its cellular modem technologies in a high profile IoT device for the consumer market. Accordingly, these royalties are being reported as cellular IoT royalties. Overall, base station and IoT royalties in the quarter were the second highest on record, reaching $8.2 million.

As for the balance sheet items. As of the end of the September 2022, our cash, cash equivalent balances and marketable securities were $144 million. We continued our buyback program by repurchasing approximately 83,000 shares for $2.3 million. And as of today, around 280,000 shares are still available for repurchase.

Our DSO’s for the third quarter was lower than the norm at 31 days, down from prior quarter 44 days, which is closer to our norm level. During the third quarter, we generated $1.8 million cash from operating activities, our depreciation and amortization was $1.9 million, and the purchase fixed asset was $0.8 million.

At the end of the third quarter, our headcount including the Intrinsix team was 494 people, of whom 411 were engineers. This is up from a total of 492 people at the end of June. Now for the guidance.

As Gideon elaborated earlier, the smartphone and consumer electronics markets are suffering from softer demand, extended COVID-19 measures in China and elevated inventories. We expect this to prolong into the fourth quarter and anticipate our royalty revenue to be lower by about 10% sequentially.

Our licensing business is showing good resilience, despite the uncertainty and expected to be at similar elevated levels of the $22 million. On an annual basis, our revenue is expected to be in the range of $132.5 million to $135 million, which will represent 8% to 10% annual growth over 2021.

Our non-GAAP net income and diluted EPS are also forecasted to show growth of approximately 14% and 12% over 2021, respectively, despite the issues faced this year. Specifically for the fourth quarter.

Gross margin is expected to be approximately 80% on a GAAP basis and 82% on a non-GAAP basis, excluding an aggregate $0.4 million of equity-based compensation expenses and $0.4 million of amortization of acquired intangibles. OpEx for the fourth quarter should be lower than the third quarter.

For the fourth quarter, GAAP based OpEx is expected to be in the range of $25.8 million to $26.3 million.

Of the anticipated total operating expenses for the quarter $3.6 million is expected to be attributable to equity-based compensation expenses, $0.3 million to the Intrinsix holdback-related expenses, and $0.5 million for amortization of acquired intangibles.

Non-GAAP OpEx is also expected to be lower than the third quarter, as we take immediate measures to align our expense base, and in the range of $20.8 million to $21.8 million. Net interest income is expected to be approximately $400,000 and taxes for the fourth quarter is expected to be approximately 27% to 29% on a non-GAAP basis.

Last, share count for the fourth quarter is expected to be 24.2 million shares. Ako we could now open the Q&A session..

Thank you. [Operator Instructions] Today's first question comes from Kevin Cassidy at Rosenblatt Securities. Please go ahead..

Thank you. Thanks for taking my question and congratulations Gideon. All the best and enjoy your retirement. Congratulations on the successful career..

Thank you..

As we look at -- you're welcome. Thanks.

As we look at the 5G rollout in India, how would you compare that to the rollout you saw in China?.

one is share gain after the Huawei stockpiles is coming to an end and our customers are getting -- and they are getting there with more advanced, it’s actually our most advanced DSP and the most advanced DSP today in the market.

India specifically is -- it's an untapped area, and we start from scratch, our customers, as we mentioned, got significant chunk on the tenders there with the Tier 1, it’s hard to know, it’s sizable. It's a very big, I don't know about China, it’s not as big as China, but it's for sure bigger than the U.S.

the pace of how fast they're going to roll out this year to be determined. But from our standpoint, since we are starting from basically zero, it should be noticeable..

Thanks for that.

Maybe just to jump over to the -- you mentioned licensing software IP, how do those contracts differ from circuit or hardware IP?.

Yes, that’s -- Kevin, that's a very good question, because it relates to how we monetize our dominance in the connectivity side and the chipset side. So when we license our chip license to the semiconductor companies and they build the chip and then go to the OEMs and build the product.

There is a large amount of software that the OEM needs either to develop or license. And the fact that they use our DSPs inside give us advantage, because if we provide the software, we are -- we can optimize it, because we have this intimate understanding of our IP, outdoor IP. Now the model when you go to the -- in a software IP, is royalty based.

So you go to ASP that is percentage of the end product and the license amount is small. It could be also NRE, so you don't -- we don't expect to see movement in the licensing, because of this software IP. We do see and as early as next year, we are going to see a rollout of product, headset product that is based in our technology.

And that will add to our royalty ASP, royalty level, I would say starting from next year..

Okay, great. Thanks for that explanation and all the best again..

Okay. Thank you..

Ladies and gentlemen, our next question today comes from Chris Reimer with Barclays. Please go ahead..

Yes. Hi. Thank you for taking my questions. I was wondering if you could give any color around changing in customer demand. You touched on the softness with the handsets and the smartphones.

If you could just talk about some of the trends you're seeing with the other verticals?.

Yes. So the way we see it, the demand it's basically combination of two events that usually does not happen. Usually, at certain point, it's circular. It could happen, it’s a cyclic one that you have an inventory that is growing as a result of lower sell through or lower demand at the end product.

So that happens once in a -- it's periodically, it happens once in a while. But what happened specifically in this year and that's the reason that we see, I would say, I would cognitive and how to stop for OEM is that we are moving from supply constrained where OEMs took and build inventory not because of demand, but because of lack of supply.

So wherever they could order, they got. So we are in a situation that suddenly there is good supply or easing supply and the demand, because of the inflation of other economy factors coming down. So the supply -- the inventory is higher than usual.

Now I -- you know, for my -- this is something that goes down anyway, because demand is there, maybe lower. So it's a matter of few quarters until we get to a normalized level of inventory and start -- we're going to see demand or shipments picking up.

And in just a matter of time, I wouldn't see this is something that you're going to see for a long time, just a matter to clean up a bit to go to a different level of inventory and from that point demand. The impact is primarily in mobile, we see it in mobile. We see significant changes in mobile. The other one is consumer product.

The thing we see that, that we are highly diversify and we have many products. So we don't see it all over the place, it’s at the envelope of this, but not all over the place. And what mitigate all these changes is our -- I would say, Germany and in the base station and IoT that is completely immune for these inventory issues and demand..

Great. I had one more thing which Gideon explained and your question only applies right now to our royalty revenue line and not to license. The licensing front we see all over the place, whether it's China or the U.S. we still see a lot of the chip design starts and the trends that start off with COVID haven't really slowed down.

The demand of the royalties is something else and then product, but not on the innovation and the needs for chips for so many different market segments. So that's still healthy. We've seen the numbers over the past three quarters.

I know this is also the guidance for us for the fourth quarter same level and same type of execution, that we will try to achieve..

Got it. Yes, thanks. That's really helpful color.

And additionally, given your solid cash position, I'm wondering if you're looking at the M&A environment any differently considering valuation levels have dropped off maybe a little bit? Is there anything you can comment to as to your pipeline? Or how you view acquisitions in the near future?.

So let me try to help you out with that, I don't think anything has changed dramatically.

Obviously, valuations have, but the real questions for CEVA is how do we take it in the post- Gideon era? Wha markets? What add-ons to the IP model can we add in order to increase the business, profitability, growth and at the end of the day also shareholder value.

We are still about $144-ish million, we did about $7 million of buybacks in the beginning of the year. And I'm sure that this will be one of the topics that we will discuss in the meeting, when he joined us -- and joined us next year and starts learn about the company and its future opportunities.

So there's no immediate M&A plan on board, but for sure, part of CEVA's future and 3.0 is to continue to find these interesting technologies or interesting add-ons that did work out very nicely in the past and hopefully could take us to the next era, as well in the future..

Great. Got it. Thank you. That's it for me..

Thank you, Chris..

And our next question today comes from Matt Ramsay at Cowen. Please go ahead..

Hey, guys. Thanks for taking the question. This is actually Sean O'Loughlin on for Matt. And Matt apologized for not being on, but I think he's currently listening to us, while being guided down by TSA at JFK Airport.

So congrats to you Gideon, and I wanted to ask about the Penta-G RAN platform, sounds like a pretty exciting expansion of what you're doing in the in the 5G infrastructure space.

And can you maybe talk about either some initial customer feedback on the platform or maybe initial even design wins just in the first couple of weeks that you've had it in general availability? And then maybe asking the same question a different way.

What was the thought process that led to this product line? Like was this a customer pull or was this just an opportunity that you saw to sort of enter the 5G -- maybe the private 5G radio network market?.

Thanks for asking the question. These are important question of things that we are considering for a while now. So there is a big difference in the base station architecture and the landscape, the supplier landscape between LTE and 5G.

In LTE, it was completely vertically integrated, meaning there was those Huawei, Nokia, Ericsson, ZTE to a lesser extent, Samsung those guys will controlling the whole base station equipment and they build on chips for that purposes.

And we were riding on this one, because we have, as you know, we have two out of this five that I mentioned that use our technology exclusively. And when it comes to 5G, the architecture, because the 5G is much more ubiquitous, meaning you have new usage models for the 5G. It's not just serving the handsets, it's not just serving.

It's more industrial, it's automotive, it's cellular IoT, it's meters, so it's all under the new 5G mission. And as a result of it, the architecture itself is completely revolutionized in terms of having new form factors of 5G. It could be small sales, it could be private network that you mentioned, it could be active antenna, it would be open run.

So these are different solutions under the base station run proposition that are -- the people are looking into do. And this attract many new comers into the space. It could be semiconductor companies, it could be new OEM that wants to build their own chips. It could be India that wants to be independent in this.

And we are getting all these inquiries and questions and to do it. And what we found out that there is between our traditional business model of licensing the process of the DSP for that purposes.

And what customer need in order to really be there and to be independent, there is a gap, and we decided to step forward and develop the platform that is called Penta-G RAN, which is a more comprehensive a more -- a higher integrated solution.

So it's not just the DSPs, the DSP and all other components that build their digital part of the base station run. It could be in the antenna side. It could be in the base station itself. And we are going to customer and it looks like it hit the sweet spot where they need it.

And we are optimistic about being asked and that's the -- going up in the value chain, not anymore, not just the DSP that applies to very big companies with large R&D centers and the capabilities, but going to smaller scale company, either it's semiconductor, either it's even operators in India that want to build a chip, open run companies we see large new comers that could be candidate for this type solution and complementary things that we are adding like software and also within Twin Six do part of the design even for them.

So it's exciting place, and for us 5G run after quite a while time of building the momentum there, become the [Technical Difficulty] product and especially in these days, well, everything is kind of suffering and facing headwinds. This is something that looks like secular..

Yes. Very helpful, very helpful summary there. And then if I could just staying on that same topic, if I could just summarize and then maybe ask a second question on that Penta-G platform.

But it sounds like then what you're looking to do is not necessarily allow customers to directly compete with the Nokia and Ericsson of the world, but rather just to implement them in the smaller or more niche areas than would maybe normally be served by those large OEMs.

So is that the right way? And then do you have a internal estimate for maybe like the size of this opportunity? And then finally, like when should we think about materiality to the model there?.

Yes, that's an accurate perspective of what the idea is. The idea is to reduce the entry barriers for the new comer. Now there are all, sort of, estimations about how big it is. For us, it's a bit difficult to decipher the timeline of what it's going to do. The focus now is to engage with customers and see this under the licensing revenue.

And what is, as you know, in this space, is higher significantly where we charge for consumer electronics, because we have higher share and the volume is lower. It's a promising space and our focus now is just to engage with those customers, that wants to get into this market and as I said, there are plenty..

Super helpful. Thanks a lot and congrats again, Gideon..

Thank you..

Thanks..

Thank you. And our next question comes from Martin Yang at Oppenheimer. Please go ahead..

Thank you for taking my question. And again also please I would also include my congratulations to you, Gideon, on your upcoming retirement. Thank you so much.

My question on the quarter is, what's your view on the [indiscernible] inventory reduction period that you see in handsets and consumer electronics? And how long would it last in your opinion into 2023?.

Yes. For where we are in the value chain, it’s not exactly how long will it take. I heard Qualcomm is saying it's two quarter, two quarters we are in the same space with them. So I would think about in a similar way that it’s two quarter before we get to a normal level of inventory that we start seeing demand picking up..

Got it. Thank you.

And a follow-up on the relevant impact on licensing activities, I know you haven't seen any licensing activity is slowing down, but do you think that other macro factors could have either negative or positive impact on your licensing into next year?.

You know, at least when it comes to Q4, we don't see indication for such a thing. Of course, licensing is -- can be lumpy, people can make decisions. I would say that places like China they still look beyond the crisis.

Everybody knows that's a temporary, it's a way still relates to the COVID and the demand for chips and the connected devices, that's something that is sustainable. And we don't see right now any slowdown in the adoptions of starting of new project where our IT gets into the picture..

Thank you very much and congrats again..

Thanks, Martin..

[Operator Instructions] Our next question comes from Suji Desilva with Roth Capital. Please go ahead..

Hi, Gideon. Hi, Yaniv. Gideon I congratulate on your retirement, but I don't think, you know, quite how to retire. So we'll see how this goes..

Thank you..

Yes, so the 5G edge, thank you for the answer before, very detailed on the prior question.

But I'm wondering since there are new players in semis and OEMs, if they're considering just, kind of, leapfrogging doing 5G like in Ericsson, Nokia and just including AI at the edge or including Wi-Fi and putting it all together? Are you seeing those, kind of, fixed wireless asset type of access kind of boxes that are kind of combine all that?.

Yes. Suji, it's -- I think it's by product, it's not a highlight feature. Yes, everybody that build a 5G run also see whether it's for the macro or the small cells or the antenna. Think of AJI functionality. And that's exactly where we step in. We are not going on to the Nvidia space, all those guys that build [indiscernible].

They need -- they have an application in mind very well defined they know exactly the performance and that's a place that we get.

Another aspect is in China, one of the things that you see in China is that, because the export control and the limitation on AI, for Edge AI -- for server or compute, what they have in mind and we see it more than in the West, is that say, okay, let's move, let's make our end device smarter.

So we offload from the cloud into the device, whether it's a surveillance camera, whether it's a smartphone, whether it's a car. So what we see and see lot of interest in China for Edge AI into the device itself in order to offload more functionality from, let's say, handicaped now cellular AI..

That's a very interesting perspective. Thanks, Gideon. And then also just a follow-up on the automotive business. Can you just talk about update as to the automotive customers that the timing of revenue there? What's the progress there is? Thanks..

This is the industry that you have to take a deep breath before you see something. Once you see it, it's a 10-year cycle, I believe that when it comes to us, we're going to see 2024, 2025, a size of about millions, rollout of chips based on technology. It's an ongoing process.

It’s -- they have to follow the steps that they need, safety and qualification and going up Tier 1 OEMs and build the cars. So 2024, 2025, that's the latest update that we got for those customers that use us..

Okay, thanks. Congratulations again, Gideon. Thank you.

Thank you..

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

Thanks, Rocco. Thank you all 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 unaccessible through the Investors section of the CEVA website.

With regards to upcoming events, we will be participating in -- we will be at the following conferences, the Wells Fargo 6th Annual TMT Summit November 29 to December 1 in Las Vegas. The Consumer Electronics Show, CES, January 5 through 8, 2023 in Las Vegas.

And at that show, Gideon our CEO would be in attendance and our new CEO also, Amir Panush will also be in attendance in CES this year. And finally, we'll also be attending the 25th Annual Needham Growth Conference, January 10 through 12 in New York.

For further information on these events and all events we will be participating in can be found on the Investors section of our website and that's it for now. Thank you and goodbye..

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day..