Ladies and gentlemen, good afternoon. At this time, I'd like to welcome everyone to QuickLogic Corporation's First Quarter Fiscal Year 2019 Earnings Results Conference Call. As a reminder, today's call is being recorded for replay purposes through May 15, 2019. I would now like to turn the conference over to Mr. Jim Fanucchi of Darrow Associates. Mr.

Fanucchi, please go ahead..

Thank you, operator and thanks to all of you for joining us. On the call today are Brian Faith, President and Chief Executive Officer and Dr. Sue Cheung, Chief Financial Officer.

As a reminder, some of the comments QuickLogic makes today are forward-looking statements that involve risks and uncertainties, including but not limited to stated expectations relating to revenue from new and mature products, statements pertaining to QuickLogic's future stock performance, design activity and its ability to convert new design opportunities into production shipments, timing and market acceptance of its customers' products, schedule changes and projected production start dates that could impact the timing of shipments, the company's future evaluation systems, broadening our ecosystem partners, expected results and our financial expectations for revenue, gross margin, operating expenses, profitability and cash.

These statements should be considered in conjunction with the cautionary warnings that appear in QuickLogic's SEC filings. For additional information, please refer to the company's SEC filings posted on its website and the SEC's website.

Investors are cautioned that all forward-looking statements in this call involve risks and uncertainties and that future events may differ materially from the statements made.

For more details of the risks, uncertainties and assumptions, please refer to those discussed under the heading Risk Factors in most recent annual report on Form 10-K, most recent quarterly report on Form 10-Q, recent Form 8-K and other documents we periodically file with the SEC.

These forward-looking statements are made as of today, the day of this conference call and management undertakes no obligation to revise or publicly release any revisions to the forward-looking statements in light of any new information or future events. In today's call, we will be reporting non-GAAP financial measures.

These non-GAAP measures should not be considered as a substitute for or superior to financials prepared in accordance with GAAP. You may refer to the earnings release we issued today for a detailed reconciliation of our GAAP to non-GAAP results and other financial statements.

We've also posted an updated financial table on our IR webpage that provides current and historical non-GAAP data.

Please note QuickLogic uses its website, the company blog, corporate Twitter account, Facebook page and LinkedIn page as channels of distribution of information about its products, its planned financial or other announcements, its attendance at upcoming investor and industry conferences and other matters.

Such information may be deemed as material information and QuickLogic may use these channels to comply with its disclosure obligations under Regulation FD. A supplemental presentation management may reference on today's call is posted at QuickLogic's IR portion of its website and also available through today's webcast.

And now I would like to turn the call over to Brian..

Thank you, Jim, and thank you all for joining our Q1 2019 conference call. I'm sure most of you have read the April 25 press release from SiFive, announcing a strategic partnership with QuickLogic and the introduction of the industry's first SoC Templates.

The Freedom Aware family of SoC Templates represents a disruptive approach to SoC design and significantly extends our software and IP business model. I will provide you with more background and color later in my prepared remarks, but let's first review Q1 and our outlook. We benefited from an unexpected upside in mature products in Q1.

Based on customer forecasts, we now believe mature product revenue will be approximately $9 million for full year 2019 and account for roughly 45% of total revenue.

New product revenue for Q1 was below our expectations due to lower-than-anticipated sales of EOS S3 to support hearable design wins and embedded FPGA license agreement that was pushed to second quarter and a decrease in combined sales of display bridge and connectivity solutions, driven by new hearable designs moving into production, we expect our new product revenue will rebound in Q2.

Let's start with an update on our embedded FPGA IP business. ETH received test samples of its new Arnold PULP IC that includes its RISC-V processor and our embedded FPGA. We are on schedule to complete the internal testing this quarter.

We released our new applications programming interface, or API, in the first entry in our hardware accelerator library. These are being evaluated now by our lead partner for these initiatives.

We anticipate booking an embedded FPGA license agreement during Q2 with a prime military contractor that has been commissioned by the DoD to evaluate and recommend embedded FPGA solutions and suppliers.

Military contractors already represent a large market for discrete FPGAs and the DoD is taking steps now that will make it easier for its contractors to incorporate embedded FPGA and ASIC designs.

We are optimistic the evaluation of our solution will be favorable and with that help us close one of our ongoing engagements with a DoD contractor and lead to new opportunities for us.

We finalized our strategic partnership agreement with SiFive where embedded FPGA is included in the QuickLogic always-on subsystem IP that is optimized for ultra-low power, AI endpoint applications and is integral to the new Freedom Aware SoC templates.

The bottom line for our embedded FPGA IP is we think with the software tools that we have released during the last 12 months and the ETH test chip in hand, we are well positioned to close several embedded FPGA license agreements in 2019.

We anticipate a rebound in EOS S3 revenue in Q2, followed by a ramp in the second half of 2019 as a number of high-volume design wins moved into production. During Q1, we shipped EOS S3 to support manufacturing for a number of customers, including JD.com, SF Express and cleared.

Expected new product rollouts suggest that 2019 will be a breakout year for always-on/always-listening hearable products. The new hands-free Powerbeats Pro is scheduled for release soon and there has been broad speculation that a similarly featured Apple AirPod will follow.

There have been several articles predicting Amazon and Microsoft will also release new always-on/always-listening designs in the coming quarters. These anticipated introductions have led to a number of new design engagements with Asian companies that are fast-tracking new always-on/always-listening hearable products for introduction in 2019.

This increases our confidence that more of the numerous design wins we've already secured will begin moving into production this quarter and optimism that new designs targeting EOS S3 will follow later in the year. Last year we announced a broad MOU with a large Japanese smartphone company and our first smartphone design win.

EOS S3 has since been selected for a total of four smartphone models and one feature phone models that are all scheduled for release in 2019. During Q1, we made initial shipments to support pre-production of the first smartphone model and we are scheduled to ship similar volume during Q2.

Based on current forecast, we expect volume to ramp significantly during the second half of 2019 as all five models move into production. Mass production for the consumer electronics design that I previously discussed has been pushed out to late Q3. This push impacts our Q2 outlook by about $200,000.

While delayed the customer has also indicated they will use our EOS S3 design in a higher volume models than originally projected. We continue to expect additional OEMs will release products later in 2019 that incorporate a platform version of that EOS S3 design. Our engagement on a second platform design is ongoing.

I'm very pleased to announce that we have secured platform design wins with two large companies that are targeting a variety of smartphone consumer goods applications. We anticipate these designs will ramp into production during the second half of 2019.

We expect to provide more detail on many of these and other EOS S3 design wins in press releases during the coming months. An AI we are offering a very unique platform solution that continues to build traction and leverage even faster than I had imagined.

When we acquired SensiML last year, it had an extremely rich sales funnel that included a number of global Fortune 500 companies, but it had only started signing up subscribers to its unique SaaS development platform. During Q1, SensiML generated a modest amount of revenue from its first three SaaS subscriptions.

For Q2, we are forecasting a sharp ramp to between 10 and 16 SaaS subscribers with as many as five of those being global Fortune 500 companies. Four of the global Fortune 500 companies are forecasted to buy our QuickAI Hardware Development Kit or HDK.

And one of those companies has already committed to buy 10 HDKs to support its various IoT design groups. While SensiML's full-stack software solution supports a variety of processors, when customers buy an HDK in conjunction with the SaaS subscription, it suggests they intend to target our AI silicon solutions.

We are optimistic this early success will establish QuickLogic and SensiML as a complete end-to-end software/hardware platform source for AI applications with some very large OEMs. This bolsters my confidence that we are on track to meet the previously discussed financial targets provided when we announced the acquisition of SensiML.

Now I want to take a few minutes to highlight our recently announced strategic partnership with SiFive. We believe this significantly extends the scope and scale of our IP and software business model, as well as creates new points of cross-leverage.

SiFive was founded in 2015 by the inventors of the RISC-V processor and in 2018, was named by the Global Semiconductor Alliance or GSA, as the Most Respected Private Semiconductor Company. SiFive's vision is to enable innovation by radically reducing the cost, design time and risks associated with SoC development.

It has already demonstrated its ability to do this with RISC-V processor cores. Now, with its new Freedom Aware SoC Templates, SiFive is bringing its disruptive business model to SoC design.

With this revolutionary approach to SoC design, companies will be able to select resources from verified SoC Templates to create a customer-specific SoC inside of three months and for a small fraction of the cost of traditional design methods.

SiFive partnered with QuickLogic to develop its first SoC Templates for several reasons that extend far beyond our long history in developing ultra-low-power FPGA IP and development tools.

Key to our selection was the experience we've gained in AI, Voice and the sophisticated methods we have developed to allocate tasks across heterogeneous processing resources and intelligently manage power consumption across an SoC.

Integral to the SoC Template architecture is the QuickLogic Always-on Subsystem IP where our embedded FPGA is leveraged to process data using algorithms and AI models that are very likely to change over the course of an end-product lifecycle. This is an application where the flexibility of embedded FPGA is critical.

Running AI models in edge and endpoint applications is not a good application for a traditional processor because an MCU would consume far too much power. It is also not a good application for traditional hard logic accelerators because there is a need to adapt to new algorithms and AI models during the end-product lifecycle.

We believe embedded FPGA is the optimal way to enable these products to adapt to new algorithms and AI models. QuickLogic and SiFive are working closely with a select number of customers that have expressed interest in joining our Freedom Aware Early Adopter program.

Companies that join the Early Adopter program will have exclusive, early access to Freedom Aware SoC Templates, and the ability to add features. While this program has the potential to provide near-term revenue, it is too early to offer any outlook as to the amount or when it could be recognized as revenue.

Beyond the Early Adopter program, Freedom Aware is a long-term initiative with license and royalty revenue opportunities for QuickLogic starting in 2020 and extending for years beyond that. I would now like to turn the call over to Sue for a discussion of the company recent financial performance and our Q2 Outlook.

Sue?.

Thank you, Brian. Good afternoon and thanks to everyone for joining us today. For the first quarter of 2019, total revenue was $3.2 million, an increase of 16% compared with revenue of $2.8 million in the same quarter a year ago. Of the $3.2 million in Q1 revenue, sales of new products were $700,000.

This compares with $1.3 million in the first quarter a year ago. This decline was due to significantly lower sales of display bridge and connectivity products that were not fully offset by increased EOS S3, Quick AI and SaaS subscription revenue. Our mature product revenue was $2.5 million, up from $1.5 million in the same quarter a year ago.

The increase in mature product revenue was driven by stronger demand from our military, aerospace and defense customers. In the first quarter we had two customers each accounting for 10% or greater of sales.

Although this is the same number as the first quarter last year, the customers in each period are different, which reflects our continued success in diversifying our customer base. Gross margin in the first quarter was 62.8%, an increase of approximately 11 percentage points from 51.5% in Q1 last year.

This was driven by increased revenue from mature products, EOS S3, QuickAI and SaaS subscription revenue, and a significant decrease in sales of low margin display bridge and the connectivity products.

Based on our current outlook, we believe continued strong mature product sales, along with increasing revenue from IP, Software and SaaS subscriptions, will lead to our quarterly gross margin staying in the mid-60% range through at least the remainder of the year.

Operating expenses for Q1 were approximately $4.8 million, compared with $4.9 million in Q1 last year. Within our Q1'19 OpEx, our R&D expenses were $2.6 million and SG&A expenses were $2.2 million. The net total for other income, expense and taxes in Q1 was a $233,000 credit, compared with a $99,000 expense in the first quarter last year.

In Q1 2019, we recorded a one-time tax benefit of $282,000 related to the intangibles from the acquisition of SensiML. Net loss in Q1 was $2.5 million, or $0.03 per share. This compares with a net loss of $3.5 million, or $0.04 per share in the same quarter last year. Now turning to the balance sheet for Q1.

Net cash usage in Q1 was $3.2 million, a decline from $4 million in Q1 last year. Our cash balance at the end of the quarter was $23.2 million, which includes a $15 million draw from the revolving line of credit. Working capital in Q1 was relatively flat with the prior quarter. Now, let's turn to the second quarter 2019 forecast.

Our revenue guidance for the second quarter is approximately $3.8 million, plus or minus 10%. At the midpoint, this represents sequential revenue growth of approximately 20%. Total revenue is expected to be comprised of approximately $1.3 million of new product revenue and $2.5 million of mature product revenue.

The higher new product revenue is expected to be driven by new hearable designs that are starting to move into production, and an embedded FPGA license agreement to be executed in Q2. On a non-GAAP basis, we expect our gross margin to be approximately 63% plus or minus 3%.

We are forecasting non-GAAP operating expenses at approximately $5.1 million, plus or minus $300,000. Within operating expenses, we expect our non-GAAP R&D costs to be approximately $3.1 million and SG&A to be approximately $2 million.

After interest expense and other income, taxes, we currently forecast our non-GAAP net loss to be approximately $2.7 million, or $0.03 per share. The primary difference between our GAAP to non-GAAP results is our stock-based compensation expense, which we expect to be approximately $750,000.

We expect our stock-based comp will remain in this mid $700,000 range for the foreseeable future. Finally, in Q2, we expect to use between 3.4 and $3.9 million in cash. This will include a one-time payment of approximately $300,000 related to the pending move of our headquarters to San Jose in the second quarter.

This move is expected to be net neutral to cash in fiscal 2019, and lead to a savings of approximately $500,000 annually starting in fiscal 2020. With that, let me now turn the call back over to Brian for his closing remarks..

Thank you, Sue. We are very encouraged by the progress we've made this year. With this progress, we believe our full year 2019 revenue will be approximately $20 million. We also believe that with this trajectory we will be cash flow breakeven and profitable by the close of Q1 2020 on a non-GAAP basis.

Current customer forecasts project mature product sales will be about 45% of total revenue. We believe revenue from connectivity and display bridge sales will be a little over 5% of the total and that the balance will be fairly equally split between EOS S3 and a combination of eFPGA IP, Software inclusive of SensiML SaaS, and our AI platforms.

Based on our outlook for higher revenue from mature products, IP and software, we believe our full-year 2019 non-GAAP gross profit margin will be about 64%.

This target is 13 percentage points higher than the 51% margin we reported last year and underscores the ongoing transformation of our business model and the dramatic improvement of our value proposition since 2016 when our gross profit margin was only 35%.

Over the last two years, much of our progress has been masked by the attrition of nonstrategic low-margin business. That attrition will continue in 2019, but with traction established in our strategic initiatives, I believe our financial progress will become more obvious.

With a solid and growing design base spread across an increasing number of customers, and a much clearer view of our near-term growth in sight, we are in the process of recruiting a VP of Sales to build on this momentum.

During the coming months, we expect our design win activity and the number of designs we are supporting with production shipments will accelerate. To the extent our customer NDAs will allow, we plan to publicly update investors on this progress.

These include designs we've won in hearable devices, smartphones, consumer electronics, consumer goods and in Industrial IoT driven by our end-to-end AI solutions. You can subscribe to receive notification of these anticipated press releases and blog posts on the QuickLogic website. Operator, I would now like to open the call for questions..

[Operator Instructions]. The first question will come from Suji DeSilva, ROTH Capital..

Congratulations on the progress here and the higher gross margin. So understanding part of that for this year is the mature products being much stronger than a typical year in the past.

When the - if and when the mature revenues normalize to prior historical levels, what is the gross margin normalized levels, say maybe 2020 if that is what transpires closer to?.

This is Sue. I think by that time when mature product levels down then our software revenue, SaaS subscription revenue and IP license revenue will ramp up by then. So we expect our higher gross margin continues..

Okay.

So sustainable because of that mix shift, is what you say?.

Yes..

Okay. Good. And then the second question, you guided 2019 pretty well here with mature and new products. Where do you expect the bulk of the second half new product ramp to come from? I know you said it’s about evenly split.

But if you can give us any notion of which one or two kind of things you have most confidence in supporting the new product ramp in the second half that will be helpful..

Yes. So equally spread on the new side with EOS S3 and I think we have the line of sight now on those multiple smartphones more than we thought in previous calls, driving a lot of that and the hearables finally getting unclogged due to the fact that we have these people announcing other similar products from the big platform guys.

And then we see a lot of momentum building around the SensiML subscriptions, coupled with QuickAI HDKs. Those are probably the most obvious ones for us. We do have the embedded FPGA IP licenses there as well. But as we know those are big orders and they tend to come and go in different quarters.

On a sustainable basis, these are the ones we see contributing more so in this year..

Okay. Maybe drilling into that maybe one quick down, the Japan smartphone win you have in the 5 models. Can you talk about what a rough sort of unit run rate for those type of models are, roughly so we can get a sense on if that's supporting the U.S.

revenue?.

Yes. So for their typical smartphone, it's about 0.5 million units a year and our ASPs obviously vary, of course, but we've talked in the past about modeling about $1 plus or minus for smartphones, it could be higher in some cases, versus feature phone, which we talked about on this call.

We have not been into feature phone before, but I understand this customer it could be as many as 2 million to 4 million units for a feature phone per year..

Got it. That's very helpful.

And then last question really as SensiML and AI and software and SaaS model plays out, Brian, how should - or Sue, how should we think about the revenue model for that maybe 12 months out, a year out? What does the composition of that revenue look like between software and IP licensing and SaaS?.

So I think in the next year, we're going to see more of that from the SensiML side because that's something where people can buy immediately and start subscribing to the quarterly SaaS by virtue of SensiML being in the market already and us having HDKs. IP licensing is a longer sales cycle to convince the customer to license IP for chip development.

And so, again in the near term I think it's going to be driven from the SensiML side more and there is going to be more users. Like just last quarter, we talked about I think 3 for SensiML. This quarter it's like 10 to 16 and we expect that to continue ramping quarter-on-quarter as more people get connected to the SaaS platform.

Now in the next year, that's when I think we will really start to see the wheel turning on what's driving from the SiFive engagement because once that company goes public and other people start using that template that will start driving more incremental IP sales for us and then also be a pivot point for people to license the SaaS platform as well.

But Suji I just want to come back to one thing on the other components of the near-term revenue for EOS S3 for this year, I did forget to mention the big consumer electronics win that we showed off at CES this year. So I would be remiss and making sure I went back and cover that. That's also going to be a driver for this year..

And that starts in 3Q '19 or --?.

Correct..

Okay, great. And then the number of subscriptions 3 going to 10 to 16.

Is it fair to say that approaches triple digits towards the end of '19 or is that too aggressive sort of a path of ramp-up here?.

That's absolutely my internal target, let's see if we can hit that. If I can even get it to half of that I think we will be well on pace to meet the financial goals we outlined for SensiML this year..

It's very helpful bracketing that..

[Operator Instructions]. Next we will go to Richard Shannon, Craig-Hallum..

Brian, Sue thank you for taking my questions. I'd like to probably congratulate you on the partnership with SiFive, looks very interesting, look forward to watching that develop throughout this year and next. Brian, to be honest a lot of the audio of my line here was poor. So I missed some of your comments.

So if I'm off-based on what I heard I apologize.

I guess let's talk first about the SiFive relationship or maybe you can help us understand the engagement model and how this ramps up [your shortage] [ph] required from QuickLogic to make that a reality?.

Yes. I also can hear some of the audio quality issue there, Richard. So let me try to answer what I think you asked. So let me give a little bit more color about this whole SiFive engagement. So basically, we've done the strategic announcement with SiFive. We are co-developing this template called Freedom Aware templates.

Once that is made available to people on their website, other folks, other companies can take that template and make their own semi-custom SoC. Every time that takes place there is an opportunity for that customer to select the QuickLogic subsystem to be a component of that SoC that's being developed.

And when that happens, we'll be getting IP license and potential royalty revenue streams from that. There is also the opportunity for us to provide software and access to the SaaS tool from SensiML.

So you can imagine anybody that uses this template becomes somebody that could be a SaaS subscriber as well as somebody that can generate more opportunities for SaaS subscriptions and then royalties there of the SensiML products shipping in volume. So there's a lot of different revenue paths for us once this is actually out in 2020.

In the near term, as I spoke about the early adopter program, we are expecting to get commitments on this financially from some of these customers that have skin in the game and to get early access. Again how that shows up as revenue is to be determined, but we are expecting some of that will be coming in from customers for the SiFive engagement..

Okay, that's helpful perspective. Thanks for that. Another follow up on SensiML, the previous questioners talked about [the plans] [ph] you had a goal of getting to triple digits.

What's the - what's kind of the obstacle to growing that faster? Just kind of a push marketing model or a pull model and any things you can do to help accelerate or expand your funnel and pipeline there?.

Great question. So SensiML was a standalone company. I think a lot of it was organic. You can see on the street, trying to get the message out and get people signed on, especially people that have transferred over to SensiML from their Intel days before they spin out of Intel.

We've been putting a really big marketing plan in place now to make a strong push into the market, which then includes some seminars that we're going to be having with third-party companies like FogHorn to really talk about the benefits of machine learning at the edge.

And we've also reinvigorated our sales channel and our distribution network to be stocking some of these hardware development kits, so that it's very low friction from the point somebody is interested in something with respect to SensiML to buying and getting something up running on their desk.

And that's primarily done with Future Electronics and Avnet and some of the folks that we have in Asia. Future actually is doing a whole series of AI seminars in Europe of which we're going to be prominently shared throughout the summer and we expecting that's going to create quite a bit of pull for the technology as well.

So, yes, we're moving from sort of a small scale marketing strategy to really going big, now that we have all of these pieces in place for a SensiML tying into the HDK and what they already have running with other processor companies..

Bodes well. Brian, you've given us some fairly detailed financial targets for this year. And I guess the start-off for investors has been - it seems like you had some great engagements in the - they seem to get pushed out or re-reconfigured or redesign to some degree.

Sounds like you have a lot more confidence in the designs that you're working with today.

Wonder if you could help us understand is this a function of the type of customers you're working with or this is kind of like a couple of turns through the product design cycle and now they feel like they're important or are these platform wins? Can you help us out kind of tie those things together for us please?.

Yes. It's a great question and it's actually a variety of reasons why, not just one. A, I think firstly our platform itself is much more mature in the sense of the device and all of the software needed to turn it over to somebody else and let them start writing their software and applications on our chip.

When we first started on this venture it was really us flying engineers around to the very few customers we could afford to do that with. Having a mature platform is we can turn it over and you really start to open the served available market and that's why we're able to get different types of customers engaged here.

Another aspect of this is that there's other third-party companies now that are reporting more of their software to our platform. That in turn creates another sales force for us because they obviously want to sell more of their software out to the market. And so we're seeing opportunities come in from there that we didn't have previously.

And just getting I guess more of the distribution channel into the mix now and having them take the message out further. It's an extension of our sales force and so we're seeing just many, many more opportunities coming in than we had in the past.

Now the confidence level in those actually going to production, A, if you're getting more times at that you only have a higher percentage rate of getting a hit and I see us [replacing more beds] [ph] in these different customers. That's increasing my confidence because it's not solely dependent on one or two guys to go to production.

And then we're just seeing, - we're seeing these demos from these companies now. They're very mature. It's for products that are not necessarily new categories of product, they're adding features to existing products. So you can imagine why that's just a natural extension for their product line to go to market with.

So, yes, all those factors together are what makes that happen..

Okay. That's great. I think I may go back and listen to transcript so I can get all of the - all of your comments, Brian. So I will jump out of line..

Our next question comes from Rick Neaton, Rivershore Investment Research..

Congratulations on moving the strategy forward. In listening to your gross margin forecast and guidance, you're beginning to sound like an analog company.

Is that the strategy you're pursuing Brian or something like that?.

Yes, I'd love to be getting the multiples of analog companies and software. And really I think as you start to look at how we're repositioning ourselves to the external world, especially with customers and partners, it's really with a high degree of influence on software, AI platforms and IP and that's exciting.

In the market there is lot of demand for it and we want to be a part of that. So, yes, absolutely we want to be getting more in the analog area of the financial results..

And mentioning AI, late last year you had a surge in QuickAI revenues.

Is that pull forward still continuing into 2019? Or are there other factors at work here or broader market trends you're capturing?.

It's all of it, but I would say a lot of what's happening now is that people are - they are seeing AI and these companies are wanting to figure out how they can incorporate that into their business process. And a lot of their customers that we are engaging with now they see this as a way of materially getting an ROI back.

It's not just a voice feature, a consumer feature but it's a real ROI. And so we are seeing a lot of companies now coming out, wanting to speak with us about how they can incorporate that. And what we have to do is, we have to make it really, really easy and frictionless for them to do that evaluation when they're not familiar with something.

And that's why this new HDK launch we have with SensiML makes that's so darn easy. And I think that's what's leading to a lot of these increase in opportunities and the big sort of surge up in number of people we think who will be subscribing to SaaS from SensiML in this quarter and subsequently through the year..

Speaking of which you mentioned that you expect, I think you said 10 to 16 new SensiML customers in Q2, and you mentioned that one customer alone is going - is buying 10 design kits for each of its 10 different divisions.

Is that what you said?.

Yes. I did and that sort of reinforces the point I just made. When these big companies want to see how can they incorporate AI into their business process, they want as many business units as possible to look at that.

And so a big 50,000 person company or 200,000 person company buying one development kit doesn't make any sense, right, when they have all these different product lines. So I think that's a really strong message from that company that they are serious about AI and they are serious about thinking how they're going to make it work for them..

And everyone at this time there are no further questions. I'll hand the call back to Brian Faith for any additional or closing remarks..

Yes, we'll will be participating in several investor and industry events this quarter.

A few of the highlights include the Oppenheimer 4th Annual Emerging Growth Conference in New York on May 14, the RISC-V Workshop in Zurich, Switzerland from June 12 to 14, the Silicon Summit in Santa Clara, California on June 18 where I will be presenting and participating on a panel, the Sensors Expo and Conference in San Jose on June 26th and 27th.

All these events we plan to attend will be available on the Events Section of our website. Our next conference call is scheduled for Wednesday, August 7, at 2:30 PM Pacific Time. Thank you for your participation and continued support. Good bye..

Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect..