Earnings Call: Q2 2020

Jul 28, 2020

Welcome everyone to the NPS 2nd quarter 2020 earnings webinar. Please note that this webinar is being recorded and will be archived for 1 year on our Investor Relations page at www.monolithicpower.com. My name is Genevieve Cunningham, and I will be the moderator for this webinar. Joining me today are Michael Singh, CEO and founder of MPS, and Bernie Blagan, VP, and CFO. During this webinar, we will discuss our q 2 2020 financial results, and guidance for Q3 2020, followed by a Q And A session. Analysts, you are currently muted. If you wish In the course of today's webinar, we will be making forward looking statements and projections that involve risk and uncertainty. Which could cause results to differ materially from management's current views and expectations. Please refer to the Safe Harbor statement contained in the earnings release published today. Risks, uncertainties, and other factors that could cause actual results to differ are identified in the Safe Harbor statements contained in the Q2 earnings release and in our SEC filings, including our Form 10 K filed on February 28th, 2020, and our Form 10 Q filed on May 11 2020, which are accessible through our website, www.monolithicpower.com. MPS assumes no obligation to update the information provided on today's call. We will be discussing gross margin operating expense, R and D and SG and A expense, operating income, interest, and other income, net income and earnings on both a GAAP and a non GAAP basis. These non GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with that. A table that outlines the reconciliation between the non GAAP financial measures to GAAP financial measures is included in our earnings release. Which we have filed with the SEC. I would refer investors to the Q2 2019 Q1 2020 and Q2 2020 releases, as well as to the reconciling tables that are posted on our website. Now, I'd like to turn the call over to Bernie Blagan. Thanks, Jen. MPS achieved record 2nd quarter revenue. Of $186,200,000, 12.3 percent higher than the first quarter of 202023.3 percent higher than the comparable quarter in 2019. 2nd quarter revenue growth was broad based, except for automotive. Our strong year over year revenue growth for 2020, in spite of the COVID 19 pandemic, was a result of our diversified growth strategy and our technological innovation, maintaining this level of superior performance and realizing future growth opportunities requires us to step up investments We are also expanding our operating capabilities outside of China. Turning now to our second quarter 2020 revenue by market. 2nd quarter computing and storage revenue of $64,100,000 increased $12,100,000 were 23.3% from the first quarter of 2020. Computing and storage revenue represented 34.4% of MPS's 2nd quarter revenue. The sequential revenue increase reflected strength in storage revenue along with increased notebook revenue. 2nd quarter server revenue maintained the elevated levels achieved in the first quarter of 2020 and server revenue was significantly higher 2nd quarter, consumer revenue of $47,700,000 increased 27.4 percent from the first quarter of 2020 and represented 25.6 percent of our second quarter 2020 revenue. The sequential quarterly revenue increase reflected improved sales of products for home applications, IoT, gaming councils, and VoT, who acronym, which stands for a variety of things. Second quarter, 2020 communications revenue of $30,100,000 was up by 8.0 percent from the first quarter of 2020. Product sales for communications infrastructure including 5g Networking increased sequentially as did sales of legacy router and wireless applications. Communications sales represented 16.2 percent of our total second quarter 2020 revenue. 2nd quarter industrial revenue of $26,600,000 increased 5.4 percent from the first quarter of 2020 as increased revenue for power sources more than offset a decrease in security based product sales. Industrial revenue represented 14.3 percent of our total second quarter 2020 revenue. 2nd quarter automotive revenue of $17,800,000 fell 23.7 percent from the first quarter of 2020 as a number of automotive OEMs shut down production for most of the quarter in response to the COVID 19 pandemic. The range of applications, MPS encompasses now includes infotainment, smart lighting, ADOS and autonomous driving. Again, we believe MPS is well positioned to accelerate growth in automotive when the market returns. Automotive revenue was 9.5 percent of MPS's total 2nd quarter 2020 revenue. I should point out that despite The past 4 months of COVID related travel restrictions, our design activities remained largely unimpacted by the pandemic, and have exceeded our expectations across the board. We have seen solid engagement particularly with top tier customers. These new and continuing customer relationships position MPS for long term success in these critical markets. GAAP gross margin was 55.1 percent, 10 basis points lower than the first quarter of 2020 and flat compared with the second quarter of 2019. Our GAAP operating income was $28,000,000 compared to $31,000,000 reported in the first quarter of 2020 $20,100,000 reported in the second quarter of 2019. Non GAAP gross margin for the second quarter of 2020 was 55.7 percent up 20 basis points from the gross margin reported in the first quarter of 2020 and 10 basis points higher than the second quarter from a year ago. Our non GAAP operating income was $53,000,000 compared to $45,900,000 reported in the prior quarter and $43,700,000 reported in the second quarter of 2019. Let's review our operating expenses. Our GAAP operating expenses were $74,600,000 in the second quarter of 2020 compared with $60,500,000 in the first quarter of 2020 $63,100,000 in the second quarter of 2019. Non GAAP second quarter 2020 operating expenses were $50,700,000, up from the $46,100,000 we spent in the first quarter of 2020 and up from the $40,300,000 reported in second quarter of 2019. The differences between non GAAP operating expenses and GAAP operating expenses for the quarters discussed here are stock compensation expense, and income or loss from an unfunded deferred compensation plan. For the second quarter of 2020, total stock compensation expense including approximately $642,000 charged to cost of goods sold was $21,000,000 compared with the $18,600,000 recorded in the first quarter of 2020 Switching to the bottom line. 2nd quarter 2020 GAAP net income was $30,200,000 or $0.64 per fully diluted share. Compared with $35,800,000 or $0.77 per share in the first quarter of 2020 and $20,700,000 or $0.45 per share in the second quarter of 2019. Q2 non GAAP net income was $50,600,000 or $1.08 per fully diluted share, compared with $44,300,000 or $0.95 per share in the first quarter of 2020 $41,900,000 or $0.92 per share in the second quarter of 2019. Fully diluted shares outstanding at the end of Q2 2020 were $46,800,000. Now let's look at the balance sheet. Cash, cash equivalents and investments were $515,400,000 at the end of second quarter of 2020 compared to $492,000,000 at the end of the first quarter of 2020. For the quarter, MPS generated operating cash flow of about $59,300,000 compared with Q1 2020 operating cash flow of $51,400,000. 2nd quarter 2020 capital spending totaled $14,600,000. Accounts receivable ended the 2nd quarter of 2020 at $55,100,000, representing 27 days of sale of sales outstanding. Which was 3 days lower than the 30 days reported at the end of the first quarter of 2020 6 days lower than the 33 days in the second quarter of 2019. Our internal inventories at the end of the second quarter of 2020 were $152,100,000, up from the $131,500,000 at the end of the first quarter of 2020, Days of inventory of 166 days at the end of the second quarter of 2020 were 5 days higher than at the end of first quarter of 2020. I would now like to turn to our outlook for the third quarter of 2020. As we are still in the midst of the COVID pandemic, demand visibility for the remainder of the year is not as crisp as we usually see at this point in the year. We are forecasting Q3 revenue in the range of $200,000,000 to $210,000,000. We also expect the following: GAAP gross margin in the range of 55.2to55.8percent non GAAP gross margin in the range of 55.5 percent to 56.1 percent. Total stock based compensation expense of $21,200,000 to $23,200,000, including approximately $700,000 that would be charged to cost of goods sold. The APR and D and SG and A expenses should be between $70,700,000 $74,700,000. Non GAAP R and D and SG and A expenses to be in the range of $50,200,000 to $52,200,000. Litigation expense should range between 1.8% and $2,200,000. Interest income is expected to range from $1,500,000 to $1,700,000 and fully diluted shares in the range of 46,500,000 to 47,500,000 shares. In conclusion, We continue to grow year over year. We are excited about our design activities in the pipeline, expanding our reach in the new frontiers. I'll now open the webinar for questions. Thank you, Bernie. Annalysts, I would now like to begin our Q and A session. As a reminder, if you would like to ask a question, please click on the participants icon on the menu bar and then click the raise hand button. Our first question comes from Tore Svanberg from Stifel. Tore, your line is now open. Yes. Thank you. Michael and Bernie, congratulations on, another very strong quarter. Now be before I get into the sort of near term stuff, you did mention something at the beginning there that you are, exploring some operations outside of China I'm not talking about design centers here, but, are you working on something else on the on the manufacturing side outside of China at this point? Yes. We try to expand it another fab. And, where where it exploring another 12 inch fabs, okay, as a as well as a 8 inch fab, outside of China. Okay. Very good. And as we look at the September quarter and congratulations in getting to 200,000,000 in quarterly revenue, Could you maybe talk a little bit about some of the end markets that's gonna drive that growth? I mean, I'm I'm sure the, the, the storage and server isn't gonna continue to to remain strong, but, maybe give us the puts and takes on each end market going into the September quarter. Yeah. Tory, you know, our our product is a very fundamental, these are building blocks. Okay. And, we, we, we supply all these power, do a power management for all electronic, all electronic devices. And, and including automotives. And, now sort of one segment, so, okay, clearly in this pandemic, area, and everybody knows that the, the infrastructures and, for telecommunications and, and the data centers and, as well as, you know, IOTs and, and the PCs and, they all grow. And, MPS, okay, just supply these are building blocks of all these, all these assignments. And, as Bernie said earlier, other than automotive, we all all all segments are doing doing wells. Very broad based. Yep. Very good. Just one last question. The DSO is pretty low now, Bernie. And, I mean, I assume that's just purely linearity. Anything else going on there? No. I think we've always had a very good, track record with, credit, and collections. And, the 27 days in the quarter really is a reflection of how front loaded, the initial sales were in Q2. Congratulations again. Thank you. Our next question comes from Quinn Bolton from Needham. Thank you. And let me echo my congratulations. I guess, Bernie, you made some comments about visibility being a little bit less you know, clear today than in in years past, obviously, COVID, you know, it's understandable with the with the COVID outbreak. But I guess you guys have had a very strong, you know, sort of 1st 3 quarters of the year, including guidance for September. Just wondering, can you talk to us about your thoughts on the stainability of this demand, or are there certain factors, perhaps, the game console ramp that, that may be leading to some particular strength in that, September quarter that that may soften seasonally as we look out beyond the September quarter. And then I've got a follow-up. Sure. I think that, just given the nature of the current macro environment, where we did benefit from accelerated ordering patterns, particularly in at the end of Q1, that, we don't want to become complacent, because we have seen, fall off in demand after we've had a big run up like just experienced. So it, it isn't that we're seeing anything specifically in the market that causes us concern But just past experience tells us that, it's something that we have to monitor. Yeah. The Bernie's comment, it was that very similar to our, our statement in the Q1 and, in a, in a few twos. Okay. We didn't, We expect at the times, all segment will grow and, including automotive. And, the what is the magnitude of a growth is a is a is a 2 hour, 2 hour supplies. And, and, Even during the 1st couple of quarters, we, 1st quarters, we, we mentioned it. Okay. We, we have a more order that we can ship. And, so now we're going to, second, second half of it, this year, the macro conditions, to us, that can be, it's not very much it's not it's it's un unskilled, unsettled. And, so we will, prepare, change, quickly. And, but overall, orders are still very good. And one last thing just to follow-up on Michael's comment there is that in the beginning of the year, we did have concerns about supply chain capacity. And, we've lowered that risk, but that's still an issue that is on requiring ongoing management. Understood. And then longer term, you mentioned, you're positively surprised by the strength of the design activity, particularly with tier ones. I'm I'm sure you're not gonna name customers, but are there a couple of applications you might be able to highlight for us that that you're really excited about over the next year or 2? It's a and a one couple of them is clearly is the 48 volts. And, and as we talk about it, and, and the other words in, in the data centers business, And, also, we, as a, Bernie mentioned earlier, in the automotive, we engage with heavily, and a lot of activity in the, in the ADAS. And I think to keep in mind that in a lot of the markets that Michael just, listed, is that we are, we are relatively small players. So we have a lot of, upside and greenfield opportunities that should continue to drive our growth for the next 2 to 3 years, at least. Yes. Our next question comes from Joshua Buchalter from Cohen. Joshua, your line is now open. Hey, guys. Thanks for taking my question and congrats on the results. Wanted to dig into storage and computing a bit. Given the size of the upside, I was a bit a price to see server not called out as a driver of sequential growth. Could you maybe provide some granularity and was this a function of know, once you were just such a high watermark, or or was there anything else going on, within that market that that allowed it to grow less than the other ones. Thank you. Yeah. Server growth is not is not surprising. To us. And, we talked about it in, in the past quarters, and we expected the growth and from, we even said it from a, from a year ago. And this year, and we will grow substantially from, from, from Alaska. So there is no no no surprises. And, So our product is, okay, as I remind everybody, okay, it's still a power supply. And we're powering up the CPUs and are powering up, all the electronics electronic devices. The user is it that's using, in the server. Yeah. And I think we tried to add some color to that in the prepared comments by saying that we enjoyed a, a no noteworthy step up between, Q1 and, Q2 or Q, Q4 and Q1. And we maintained that same high level, in Q2. So when you look at the year over year, server is one of our largest year over year growth drivers. Our next one comes from William Stein from SunTrust. William, your line is now open. Great. Thanks for taking my question. Congrats on these very, strong results. I'm wondering if, Ernie, you can talk to us about backlog, versus turns expectations. I I think last quarter, we had this sort of special situation where you essentially guided for, negative net turns. Maybe you can confirm my recollection and clarify, what guidance implies in that regard for Q3? Well, I think that, the the the term that we referred to at the end of Q1 was the toilet paper effect, that, there was a, outsized ordering pattern in the last 4 weeks of March. And so we had to take, Q2 to more, closely understand, what that represented. And, after we went customer by customer in geography, geography, we found out that there were a couple of drivers, well, 3. The first was is, that there was a, increase, a stepped up increase in demand. And particularly, as it relates to work from home applications, and so that included, storage, and, 5 g and notebooks. And then, as I said earlier, continued strong ordering within automotive, but there was also an acceleration of demand, where, the distributors and customers wanted to get in line to make sure that they were not. So what we had to do is a very close, evaluation to make sure that we don't let the channel inventories, rise too much, because of over enthusiasm. But, at this point, we enter, this quarter again with, a similar backlog profile, as we had last quarter, meaning that, there's low, no reliance on turns business, in order to, to meet our our expectations. Yeah, our, our, assumption the toilet paper effect, the words are in quite right. There's a, there's a very little. Okay. And, So the, there are, after we're diving and, deeper into our customers, our distributors, and, and we found that these grows are real, are real growth. And, somewhere it's, it's it's very sustainable. K. Got it. So the so the elevated orders last quarter were not a a sort of, a trick. They they were for real, and it sounds like you're seeing elevated backlog this quarter as well. So maybe the other, the other side of this course is supply. And and so that's my second question. Bernie, through the quarter, you talked about how, supply was the company was more able to, deliver. We certainly saw that in the quarter. I think you talked about increased supply at one foundry, like, I think a doubling of capacity that's sort of real time, and then another expectation for a ramp in q 4 at at a maybe a new foundry from one of your existing partners, I think, together. It sounded like that was 40%. You know, additional capacity, which suggests maybe up to 2 years of of a sort of runway maybe you could clarify. I I think you on the call earlier, you talked about 2, 2 fabs that are ramping now. Maybe you can just clarify for us where we are in where where you expect capacity to go over the next few quarters? Yeah. I I think that, you know, to give full credit, the, our operations, capabilities were put to the test in the early part of this year. And I think that, we, we responded as well as, one could have expected. And, most of the numbers that you cited as far as the capacity expansion or pretty close to the mark, Mark. I'm not gonna confirm or reject them that you're in the ballpark. And, I think that, it remains an issue too because, as we look ahead, our growth prospects for the next, you know, 3 to 5 years, certainly, are, significant. And so what we're trying to do is get both capacity but then also get it geographically distributed. So that's going to require a continuing level of investment, as we look ahead here for the next few years. Thank you. The next question is from Chris Caso from Raymond James. Chris, your line is now open. Yes. Thank you. Good evening. And congratulations on the, pioneering, conference call format, which leaves working very well. So my first question is just to follow on from from the from the other question. And with respect to capacity and the constraints, that you're on that you're, under right now, do you foresee a situation, you know, over the next few quarters where those capacity constraints, could be an impediment to revenue, you know, I guess from from where we are right now and actually we're seeing it appears that we're seeing some good upside. The toilet paper effect is is not having the effect that we feared is there still sufficient headroom for revenue growth as we go through the next few quarters as you're putting these capacity plans in place? Yeah. Our our, our, our, and let's put that ways. And I got our production peoples, and that came in, and they're they're working at, over 100%. And, and, We, we still have a more revenue that we can ship. I mean, we can order than more than more than we can ship. Okay. And as we increase the capacities in, in the last 6 months, okay, and, the issues are much better now. And I would also probably just having learned from this recent experience, that we're more likely to, also increase our internal, inventories. So we don't have to, rely upon necessarily in the moment production excellence. Great. As a follow-up, with regard to the compute segment, you know, we've heard from from some others is that the market itself, I I guess there's some areas in the compute market, which look like they'll be slowing as you go in the second half. There was some of that work from home man. In notebooks, for example, it looks like it was pulled forward to the first half. You know, Intel had talked about, you know, some of the data centers cloud data center revenue, which may may be showing some just decline after very, a number of strong quarters. I know you have a lot of content increase as well, and I guess the question is if the market should slow, one, is that what you're seeing? And secondly, the extent of your content increases, are they greater than what's happening in the market? You know, we we are, the new players. Okay. We're a relatively small player in a, in a, in a market segment. And, we don't see, and for our revenue growth, we don't see any slowdown. And, as we became a much bigger, bigger percentages, that we can, answer your answer your questions better. Thank you. Our next question comes from David Williams from Loop Capital. David, your line is now open. We'll move to the next question. This comes from Ross Seymour from Deutsche Bank. Ross, your line is now open. Hi, guys. This is Melissa on for Ross. Thank you for letting us ask a question and congratulations on a really strong quarter. I was hoping you get your opinion on the automotive end market specifically. Your larger peers were also impacted by the factory shutdowns around the world. As you're thinking about the recovery in the second half, how do you see this business recovering? And I know you don't guide more than 1 quarter out, but Can you help us understand how sales into auto will resume? Yeah. I think that, Q3 we're going to see a restabilization in the market. Interestingly, even though the manufacturer offering, of the OEMs, was shut down for 2 to 3 months, people still continued to buy cars. So there is some pent up demand, that they need to meet. But I think that the, the ramp may not be, it won't necessarily snap back. I'm expecting to see some additional improvement in Q4 as they start to roll out the new model year. But I I don't see it being the stair step growth that we've experienced in past years. Our next question will come from David Williams from Loop Capital. And thanks for letting me ask a question and congrats on the quarter. The I guess the first question is really around the gaming console. And maybe if you could provide any color around the the benefit in the quarter from from the gaming console, and then maybe how that layers into the remainder of the year? Yes, I think that the gaming counts is a very somewhat predictable, business as far as there's almost a, a bell shaped curve that occurs over 5 months beginning in June and ending in, October. So that is pretty heavily weighted, towards Q3, for, for what we sell into. And, right now, the the visibility, will not be, crisp is the word we used before probably until late August or early September, though right now we seem to be tracking very well against our expectations. Okay. So you'd characterize that as maybe stable to towards your expectations? Yeah. Stable is not a word I normally assign to getting to Councils, because it does create this bubble, which, has certain of its own management, challenges. But, yes, I would say that we're the demand is meeting our expectations and, and, we have adequate supply chain to, to, handle it. Great. And then maybe thinking about the data center and maybe some of the computing, how much of this do you think is maybe pull ahead versus more cycle related. Do you think this is the sustainable? I realize you're a smaller player, but do you think you're seeing any pull ahead here, or do you think all of this is maybe natural demand that would have come through, pandemic or not? No, I think, I think the work from home phenomena is, real and, at some level, we are able to quantify it. But I do think that, it is a more front end loaded cycle as we sort of offered an earlier response. And, you know, the only thing to really add is that we're such a small player you know, and this is sort of our our first opportunity to really experience accelerated revenue growth you know, again, our our visibility and predictability, is a little bit low for us right now. Great. Thanks so much. Our next question comes from Rick Schafer from Oppenheimer. Yeah. Thank you, and I'll have my congratulations. Nice job guys. I guess my first question, nobody's talked about or asked about 5 g yet. So maybe I don't know if you could do a a sort of updated your progress on the 5 g range for you guys. You know, how are things that are your largest customer there. I know there's been some uncertainty. I know, you know, the government or Trump has been trying to do different ways. To be to fly to, like, met with that customer. And then I didn't know if you can talk about how many of the Bureau begins you're shipping to now or to done with the request. Then I have a follow-up. Rick, your your question is a barely, very audible and very in interpretable. Okay. We can try it and, okay, try to answer your questions. And, 5 g is a is our biggest, okay, or one of the biggest opportunities and, very highly concentrated customers. And, and, as you know, when the 4 g were were were not in the in, in that, and, we don't have, any revenues, okay, very little revenues. And, now it's in, like, where it became, a significant player in there. And that's because our, our technologies. And, as far as where to grow and, which regions clearly China is is, is is emphasized that. And, and the Huawei is the, is the biggest players, now is in the All the other regions, we engage with them with deep plates and, and, but, I have to say they're they're much slower. And, what is the impact to the for our future business? Okay. It's I I believe it's a matter of the time. The longer the times and, and, the longer the time give us, okay, will be is actually is better for better for for for MPS. And, all the other players and I had to, familiar with with NPS and familiar with the NPS Technologies. And, the time is, actually is on on on our side. But, it may may affect the revenues. And, okay, but, in China, we see it keep growing. In a in a 5 5 g network. Our next question comes from Kamil Miyasirik from William Blair. Kamil, your line is now open. Hey, good evening. Thanks for taking my question. First is I just wanna follow-up on 5 g. Can you provide, some detail on how to think about the content, you have and specifically the potential Sam, given your PUL products can be used in transceivers, base stations, fiber optic birth and back end data centers. And I assume there's a potential for QS mod as well. Yes. You're you're absolutely right. And, okay, our our opportunity, we don't have a clear pictures because, our, again, our, our product, and it is a very, very fundamentals. And, okay, and, supplying powers, and they're doing a power management for each components. And, it's really a rough calculation. It's more than $40.50. Per per stage. That's great. Thank you. And and it's just a follow-up. How should we think about your entrance into the HPA market? I believe you are initially targeting medical and communication applications. And, what what's your versus competitors like TI. And, lastly, is this a 2021 revenue event? The, primary competition is really with, ADI. And, this is the, advanced, analog. And, you're exactly correct that, the first opportunity that we're pursuing, is actually with a customer, and they've provided us their spec and we would expect to be able to have a product that can be prototyped by the end of this year and have initial revenue, after that As far as the longer term roadmap, we talked, about communications because it is the next targeted market that where you high performance analog, and of the, 8, data data convolution. I've been I've I missed a first part of my questions. Okay. Yeah. Okay. Go ahead. Yeah. So just finishing up that where the, the need for high frequency and high precision, and as I said, there's only 1 or 2 other players out there. It's a very difficult mark penetrate. But here again, we believe, we're very well positioned to, to move into it over the course of the next 3 5 years. And that question comes from Tore Svanberg from Stifel. Cory, your line is now open. Yes. Just a follow-up. And and, and, Michael, I'm I'm asking you this question because I really respect your your view. And know, if you look at Max And Linear ADI, you know, they've been competitors of yours for many years, whether for business or for engineers, they're they're now all gonna be on their one umbrella. What what do you what do you think that means for the analog space and perhaps formalistic power specifically? Oh, thanks so far for sustaining. Respect me. Yeah, Malcolm, I think it's the same, okay, but in the maxims and, and, linear technologies, they are very proven and, companies and, and, they competed as a, we, in the past, competed with them, and the MPS has, little bit agile and, and, in terms of a potent technology development and, and the product development. So, our growth is, is faster. And, and, I think the, you know, in, going to Futures, and M, MPS analysis became a meaningful players. And, we are, and, If you look at the linear technologies or what are one point some $1,000,000,000, the NPS is very close to it. And, So our customers were looking for, a second of of multiple suppliers. And, with the pure technologies, I think that will give us some more more opportunities. Very good. Congrats again. Thank you. Our next question comes from Kevin Barragan from Rosenblatt. Kevin, your line is now open. Hi. Thanks for taking my question and then, congrats on a great quarter. Just a quick one for me. Can you give us a little color on, your e commerce business I know with everything kind of virtual now and your recent agreement with Farnell Electronics, can you kinda talk about what's going on there? Yes. Okay. That's, the e commerce, okay, and, glad that they still remain with that. And, I had to say it. It's a very slow. Okay. And, but I really believe that. Okay. I firmly believe that. I can, and, We, we see some initial result. And after if you follow our website, and our websites change your keep keep evolving. And, and, up to a point. Now we know how do we, double or triple it, our the the the the subscribers And, it's actually more than tripled. Okay. And, but small style with the small members. And, So we're still doing a lot of surveys and they and now I think the website is, is good enough and that we can, work well with our, partners and, and a and the online partners and, and a distributor that that the message more much more clearly. And, I will see in, in, next, next few months, and then we'll see the, I I hope to see a lot more result. And, but overall, we still believe it. And we're we're much believe it. And, the parking place solution, it will happen. And, and, online distribution, online sales, online configurations, that would be the futures. And, so for for NPS opportunities, instead of sell a dollar, sub dollar parts, now we're selling, okay, $4, $5 or beyond, for, for each component. So the, opportunities still remain and, we are still learning. Got it. Thanks guys. Our next question comes from Quinn Bolton from Needham. Quinn, your line is now open. Great. Thanks for letting me ask a follow-up question. Michael, you said some of the some of the applications you're most excited about are, you know, centered around the data center as well as 48 volts. So just a couple of follow on questions. With with NVIDIA's latest 7 nanometer generation of GPUs going into the data center, wondering if you're able to come in whether you're supplying any power management devices for that new a 100 GPU, either in a twelve volts or 48 volts view. And then longer term, as we look forward to the new Intel VR 14 spec, do you have a sense how much of that mark might be 12 volt versus 48 volt. Thank you. Alright. Okay. Obviously, we don't we don't make in customers' names and, customers' projects' names. And, let's put that way. So, like, all the 40 Evos products that we have a product in it. And, and, in terms of, the VR Four team specs. Okay. We, we have a reference designed in them. And, NPS will be, compare via our thirteens. And, we're also a small part of it. And, and, And, I think this is the, the, the opportunity for for NPS. And, it, it became, a significant player as a main main player in the in the VR 14 and, in the the next few years? Both in the 12 volt as well as 48. Oh, yeah. For the 12 volts in the 14, for theables, okay, my believe is a mostly still, still, still twelve volts. And, 40 eight volts, the, the, the the application is still limited. Analyst, if there are any follow-up questions, please click the raise hand button. As there are no further questions, I would now like to turn the webinar back over to Bernie. Great. I'd like to thank you all for joining us for this webinar. And look forward to talking to you again during our third quarter webinar, which will likely be at the end of October. Thank you, and have a great