Intevac , Inc. (NASDAQ: NASDAQ:), a supplier of vacuum deposition gear for numerous thin-film purposes, has reported sturdy monetary outcomes for the second quarter of 2024, surpassing income expectations with a complete of practically $15 million. The corporate additionally supplied forward-looking statements about its HDD know-how and TRIO platform, indicating a optimistic outlook for the rest of the yr.
Key Takeaways
- Intevac’s Q2 income reached practically $15 million, with a gross margin of over 38%.
- The online loss per share was reported at $0.12.
- HDD income forecast for the complete yr is elevated to $45 million because of rising demand for know-how upgrades.
- The corporate delivered its first HAMR improve to a significant information storage firm.
- Progress is being made on the TRIO platform, with 2 to three preliminary orders anticipated within the second half of 2024.
- Intevac ended Q2 with $70.4 million in money and investments.
- Q3 income is projected to be between $10.5 million and $12 million, with a gross margin of 37% to 39%.
- The corporate anticipates a internet loss per share of $0.14 to $0.18 for Q3.
- The order backlog stood at over $42 million on the finish of June.
Firm Outlook
- Intevac expects to exit 2024 with the same degree of money and investments as Q2.
- Nearly all of upgrades are associated to HAMR know-how, with a steady degree of improve enterprise forecasted for the following 5 years.
- Gross margins are anticipated to stay steady all year long.
Bearish Highlights
- The corporate reported a detrimental money stream of $1 million within the Revenue & Loss assertion for Q2.
- A internet loss within the vary of $0.14 to $0.18 per share is projected for Q3.
- Income from orders for TRIO programs isn’t anticipated within the subsequent quarter.
Bullish Highlights
- Intevac has a powerful order backlog of over $42 million.
- The corporate is making strides in qualifying the TRIO system for buyer acceptance.
- There’s potential for extra capability growth device orders within the close to future.
Misses
- The corporate skilled a detrimental money stream from operations throughout Q2.
Q&A Highlights
- The main focus for the following quarter is on the HDD enterprise, with no rapid income from TRIO orders anticipated.
- The qualification course of for the primary TRIO device is underway with a glass finisher and an finish buyer.
- Upcoming IR actions embrace a Benchmark convention in New York on September 4 and a Q3 earnings name in early November.
Intevac’s monetary efficiency in Q2 signifies a powerful place available in the market, with important demand for its HDD know-how upgrades. The corporate’s strategic investments within the TRIO platform additionally recommend confidence in future development alternatives. With a strong order backlog and steady gross margin projections, Intevac seems to be sustaining a gentle course via 2024. The upcoming quarters might be pivotal as the corporate focuses on realizing the potential of its TRIO system and increasing its HDD improve enterprise.
InvestingPro Insights
Intevac, Inc. (NASDAQ: IVAC) continues to navigate the market with a mixture of challenges and strengths, as mirrored in its monetary metrics and strategic place. Let’s delve into some key insights based mostly on the newest information from InvestingPro:
- The corporate holds a market capitalization of roughly $95.7 million, indicating its dimension relative to {industry} friends.
- Regardless of not paying dividends, which can have an effect on its attractiveness to income-focused buyers, Intevac’s stability sheet reveals that its liquid belongings exceed short-term obligations, suggesting a level of monetary flexibility within the close to time period.
- A big InvestingPro Tip price noting is that Intevac isn’t worthwhile during the last twelve months, with a detrimental P/E ratio of -9.42. This might elevate issues about its capacity to generate earnings, a crucial issue for long-term worth creation.
InvestingPro additionally offers further suggestions for these trying to dive deeper into Intevac’s monetary well being and future prospects. Presently, there are 5 extra suggestions obtainable on InvestingPro, providing precious insights for buyers contemplating this inventory.
For a complete evaluation of Intevac’s monetary efficiency and strategic outlook, go to https://www.investing.com/professional/IVAC, the place you may entry detailed metrics and additional InvestingPro Tricks to inform your funding choices.
Full transcript – Intevac Inc (IVAC) Q2 2024:
Operator: Good afternoon and welcome to Intevac’s Second Quarter 2024 Monetary Outcomes Convention Name. Right now, all individuals are in a listen-only mode. A short question-and-answer session will comply with the formal presentation. [Operator Instructions] Please word that this convention name is being recorded as we speak, August 5, 2024. Right now, I wish to flip the decision over to Claire McAdams, Investor Relations for Intevac. Please go forward.
Claire McAdams: Thanks, operator and good afternoon to everybody on as we speak’s name. Thanks for becoming a member of us as we speak to debate Intevac’s monetary outcomes for the second quarter of 2024 which ended on June 29. Along with discussing the corporate’s latest outcomes, we’ll focus on our outlook wanting ahead. Becoming a member of me on as we speak’s name are Nigel Hunton, President and Chief Government Officer; Cameron McAulay, Chief Monetary Officer; and Kevin Soulsby, Company Controller. Nigel will start with an summary of our enterprise and outlook, adopted by Cameron’s evaluate of our monetary outcomes for the second quarter and extra particulars relating to our steerage earlier than turning the decision over to Q&A. I would wish to remind everybody that as we speak’s convention name accommodates sure forward-looking statements, together with however not restricted to, statements relating to monetary outcomes for the corporate’s most not too long ago accomplished fiscal quarter which stays topic to adjustment in reference to the preparation of our Type 10-Q in addition to feedback relating to future occasions and projections in regards to the future monetary efficiency of Intevac. These forward-looking statements are based mostly upon our present expectations and precise outcomes may differ materially because of numerous dangers and uncertainties relating to those feedback and different danger components mentioned in paperwork filed by us with the Securities and Change Fee, together with our annual report on Type 10-Ok and quarterly stories on Type 10-Q. The contents of this August 5 name embrace time-sensitive forward-looking statements that signify our projections as of as we speak. We undertake no obligation to replace the forward-looking statements made throughout this convention name. I’ll now flip the decision over to Nigel.
Nigel Hunton: Thanks, Claire and good afternoon to all of you on as we speak’s name. I am more than happy to welcome Cameron McAulay, our new CFO, to his first earnings name with Intevac. Cameron joined Intevac in July after a profitable exit at Transphorm which simply accomplished in June its roughly $340 million acquisition by Renesas. Kevin, who’s right here with us as we speak for Q&A, now returns to his earlier function as Company Controller and we’ll significantly respect his moving into the CFO function for the final yr. Turning to our Q2 outcomes. Complete income of practically $15 million was considerably stronger than our forecast getting into the quarter because of elevated demand for HDD know-how upgrades and strong execution from the workforce in Singapore. Given the income upside and the ensuing mixture of upgrades delivered within the quarter, gross margin exceeded 38% and our internet loss per share was additionally favorable to steerage at $0.12. With robust collections within the quarter, our accounts receivable stability declined by $7.5 million and complete money and investments at company finish surpassed $70 million, a rise of practically $5 million from Q1. The income upside reported for Q2 can be evident in our elevated HDD income outlook for the complete yr which we now count on will strategy $45 million, up from $40 million at our final replace. This displays our HDD income forecast for the second half of 2024, remaining comparatively constant within the low $20 million vary after a really robust first half. HDD revenues year-to-date have now exceeded final yr’s first half by greater than 10%, reflecting continued robust development for HAMR upgrades. Given the strengthening in demand witnessed for upgrades throughout Q2, we now count on 2024’s improve enterprise to strategy the file ranges achieved in 2023. Much more importantly, our income forecast additionally displays the preliminary set up of HAMR upgrades from a second main buyer which is a number one information storage firm. We’re happy to report the profitable supply of our first HAMR improve for this extra buyer earlier this quarter. Trade information of bettering fundamentals for the arduous drive {industry} continues to construct and proliferate pushed primarily by strongly aligned cloud demand development. Demand for cloud storage has elevated considerably year-to-date in 2024 and is anticipated to proceed rising via subsequent yr. There are additionally indications that rising demand now consists of information heart deployments associated to AI. We’re inspired by the elevated momentum for AI-related HDDs which bodes effectively for the long-term power of our main served market. We proceed to count on the initiatives to improve the world’s HDD media capability to HAMR know-how offers robust visibility for a strong base of HDD enterprise for the following few years. The power of our buyer relationships and order exercise up to now display that our flagship 200 Lean continues to be the industry-leading platform for all superior media manufacturing, a tremendous achievement for a product launched 20 years in the past that’s nonetheless delivering new innovation on the forefront of HDD know-how. Intevac is a crucial enabler within the know-how street map for the HDD {industry} and we’re solely within the early levels of a multiyear improve cycle that helps a income alternative exceeding $200 million and that is earlier than any further 200 Lean system orders. The strengthening {industry} fundamentals are additionally encouraging and we have been very positively taking a look at to return to a modest quantity of latest system deliveries within the close to future. Our crucial function within the HDD {industry} offers important visibility for continued strong base of enterprise and helps our expectations for close to file degree upgrades in 2024 and a powerful development yr in 2025, a yr wherein we additionally count on significant incremental development for our TRIO platform which brings me to an replace on our progress qualifying the primary TRIO system which was shipped in April to a top-tier cowl glass finisher in Asia. As mentioned on our final earnings name in April, we resolved our JDA partnership and instantly proceeded to ship our first TRIO system on to a number one cowl glass finisher which is a direct provider to main smartphone OEMs. We accomplished the supply set up on schedule which is a credit score to our groups from all over the world who’re working intently collectively and are continuing effectively via the qualification course of which we count on will first conclude with the quilt glass finisher earlier than persevering with in the direction of finish buyer qualification. The three months which have handed into our final replace have been a interval of immense progress and iterations qualifying this TRIO system, whereas additionally processing samples from a number of further prospects on the TRIO which resides at our Santa Clara headquarters. Vital members of our TRIO workforce, together with myself, have spent nearly all of the previous couple of months on the bottom in Asia as we make the TRIO success, our number one precedence. As well as, we’ve engaged Intralink to speed up our growth in Asia, whose workforce specialised in figuring out alternatives in lots of fast-growing sectors. Collectively, we’ll construct a broader marketplace for the TRIO platform, while we preserve our give attention to securing an preliminary order within the client gadget house. Intralink are persevering with to evaluate the automotive sector and have highlighted the introduction of glass panels for future superior packaging which is able to take main share from the normal silicon-based purposes. We proceed to have interaction with new prospects whereas deepening the collaboration with the important thing gamers concerned in bringing ultra-durable anti-reflective coatings to the smartphone cowl glass market. The deepening degree of collaboration and continued funding in analysis and growth is utilizing a number of paths for industrial success for the TRIO, together with a extra compact footprint that may readily exchange current device units to supply extra sturdy coating capabilities for the quilt glass finishers. The modular structure of TRIO which is a key attribute of the 200 Lean, is enabling us to shortly adapt the TRIO platform. We’re working with each our preliminary cowl glass finisher and a number of further prospects to make modifications to the TRIO that can optimize their respective manufacturing capabilities and capability. Because the qualification course of continues, we proceed to count on 2 to three preliminary 3 or 2 orders within the second half of 2024. As we consider the steps in the direction of closing buyer acceptance and income recognition, we’ll proceed to replace you on orders and income timing as we progress via the yr. As a reminder, we’ve the stock readily available so as to ship a number of programs with comparatively brief lead instances. With very severe engagements with among the world’s main prospects and companions effectively underway, the morale and pleasure among the many Intevac workforce of outstanding staff is the strongest I’ve seen since becoming a member of the corporate which brings me to a abstract of our outlook for 2024. We have now now elevated our HDD outlook to the $45 million degree with now a number of HDD prospects within the course of of making their media capability to be HAMR suitable. We imagine this degree of improve enterprise is sustainable for a number of years and any return to new system orders might be incremental to this degree of HDD enterprise. Our expectations for 2024 additionally proceed to incorporate a number of TRIO orders. At this stage, as with every new product launch, it’s troublesome to forecast the timing of revenues and our focus is on securing a number of orders. Lastly, defending the stability sheet stays a key precedence for the corporate and we proceed to count on to exit 2024 across the $70 million degree. And with that, I am going to flip the decision over to Cameron.
Cameron McAulay: Thanks, Nigel. I am fairly happy to see many acquainted investor names listening to as we speak’s name in addition to Benchmark which is among the a number of corporations who cowl Transphorm and I sit up for constructing upon these relationships each new and current as Intevac’s CFO. Turning to the second quarter outcomes. Second quarter revenues totaled $14.5 million and consisted of HDD upgrades, spares and repair. Income upside for the quarter mirrored over $5 million of further know-how improve demand throughout Q2. Q2 gross margin was 38.2%, above the steerage vary, reflecting the upper income quantity in addition to the actual composition of the combination of upgrades throughout the quarter. Q2 working bills had been $8.8 million which exceeds our present run fee, reflecting greater than typical company, journey and gear set up prices throughout the quarter. With robust AR collections throughout the quarter, we had been in a position to transfer a few of our money to greater rate of interest investments. And because of this, our quarterly curiosity revenue run fee now exceeds $700,000. The ensuing internet loss per share for Q2 was $0.12, considerably higher than our forecast getting into the quarter. Turning now to the stability sheet. We ended the quarter with money and investments, together with restricted money of $70.4 million, equal to $2.63 per share based mostly on 26.7 million shares at quarter finish. The online enhance in money was practically $5 million, reflecting optimistic money stream from operations of $6 million with CapEx of slightly below $1 million. The robust money stream from operations in Q2 displays the numerous assortment of receivables throughout the quarter, with $7 million of optimistic money stream from working capital offset by about $1 million of detrimental money stream within the P&L. Non-cash bills for Q2 included $1.1 million for stock-based compensation, $0.5 million for depreciation and amortization and $0.5 million in deferred tax. Now, I am going to present additional particulars relating to our outlook and Q3 steerage. For the third quarter, we’re projecting revenues to be within the vary of $10.5 million to $12 million. We count on third quarter gross margin to be within the 37% to 39% vary, reflecting the anticipated mixture of upgrades and manufacturing unit absorption ranges throughout the quarter. Q3 working bills are anticipated to be within the vary of $8.6 million to $8.8 million, reflecting an anticipated moderation in some G&A prices when in comparison with Q2. This vary additionally comprehends our continued funding in personnel throughout a number of capabilities as we proceed to strengthen our general group. As detailed in my earlier feedback, we count on the next run fee of curiosity revenue on our robust money stability for the foreseeable future. Our steerage is on curiosity revenue within the vary of $700,000 to $750,000 for Q3. We count on GAAP tax expense of about $500,000, most of which might be non-cash. We’re projecting a internet loss within the vary of $0.14 to $0.18 per share based mostly on 26.9 million shares excellent. This completes the formal a part of our presentation. Operator, we’re prepared for questions.
Operator: We’ll now be conducting a question-and-answer session. [Operator Instructions] The primary query is from Peter Wright from PartnerCap Securities.
Peter Wright: And congratulations on the quarter. I’ve 2 questions for you. My first query is taking a look at your put in base for HAMR now that you’ve an extra buyer opened up. How are you wanting in regards to the rollout of your put in base? How ought to we consider what number of are upgraded at this level and what number of lie forward of us and reduce within the cadence there, do you count on it to truly speed up? Or is it extra type of a steady variety of HAMR improve gross sales going ahead? In case you may shed some mild on type of the timing and the magnitude of that. After which my follow-up query is on the TRIO facet and particularly your relationship with Intralink. How are you offering sampling? Do you even have a device? Is there a method that you could really put the pattern in prospects’ fingers? Or in case you may clarify somewhat extra how that sampling is happening, that may be appreciated.
Nigel Hunton: Overlaying the HAMR one first. And as at all times, as you already know, with our {industry}, it is at all times troublesome to get actual predictions on what is going on to occur in timing. However the put in base, I believe as we have mentioned on prior calls, we have shipped extra on the slide, over 180 programs. A few of these aren’t in operation in the mean time. So we have mentioned use a mean 140 to 145 programs on the earth that may be upgraded to HAMR. We have carried out about 20 up to now, taken in final yr and the beginning of this yr. So there is a important quantity of alternative to improve the remainder of the put in base. We do not share the break up. We do not discuss in regards to the buyer names, as you already know. However I believe it offers us confidence that over the following 5 years, we’ll proceed to run with the same degree of improve enterprise as we have seen during the last 2 years. So I believe so far as we will inform, that is form of forecast and form of the longer term HAMR investments. And it is nice that now all the purchasers are speaking about HAMR upgrades and that know-how is crucial as you progress from form of 30 terabytes as much as 50 terabytes and truly hold sustaining this constant price benefit of drives available in the market. So I hope that offers you a form of vary of solutions there. However I believe general, we’re fairly assured that there’s going to be a stream over the following 5 years at the same degree and that might be throughout a number of prospects which is sweet for us. Shifting on to the TRIO query. I imply, TRIO sampling is a crucial a part of the technique. Right this moment, if a buyer has curiosity, whether or not that is via Intralink or via our direct contacts with prospects, we try this buyer sampling and run these elements via our 301 check mattress in Santa Clara. In case you keep in mind, we capitalized that device that permits us to do quick turns of samples in a managed setting in our headquarters the place our R&D groups and course of engineers, extra importantly, reside. So the fabric science about operating samples, placing the coatings down, placing these down both on glass we bought or prospects glass samples which could be very usually the case, in order that they’ll be shipped in from us, whether or not that be from any elements of Asia into the power. We do these coatings underneath management. We really then see these again up in a pure setting. I imply, after we ship these again throughout to the shopper, they then do their testing and evaluation. In parallel, we do testing evaluation in our growth and check lab in Santa Clara, the place we’ve instrumentation that may take a look at hardness among the key options round optics. And people return to prospects. After which sometimes, that factor goes via a strategy of there could also be on a slight tweak on the efficiency. They will ship us extra samples. We’ll undergo that iteration. And I am actually happy to say that the variety of samples been operating and the variety of prospects we’re sending in elements to us is growing and never only for glass elements for client units, we’re getting elements in for polymers with some distinctive purposes and likewise we’re seeing the model of some requests round superior packaging. So for me, it is fairly thrilling and it is a core functionality that we have invested in and that is why we capitalized the device final yr for the Santa Clara facility.
Peter Wright: Yet one more clarification, in case you can outline the top market that polymer is servicing. After which additionally, how custom-made are these samples going out? How a lot backwards and forwards customization is it versus you sending your particular SKUs to those completely different finish markets? And that is the final one.
Nigel Hunton: Perhaps if you concentrate on, you’ve got seen the machine in operation, the aptitude of the TRIO platform is not only for 2-dimensional, it really goes in the direction of three-dimensional shapes, Clearly, we will not provide the buyer identify or particular software. However in case you can think about, these polymer items are in curved platforms, in all probability offer you some form of thought as you take a look at optical lens and different form of areas the place polymers and non-glass is utilized in extraordinarily excessive quantity purposes. So for me, there’s loads of pleasure across the alternatives past the patron units for a few of these polymers. And even inside client units, among the headsets and issues are taking a look at polymers and different natural, inorganic compounds for the longer term applied sciences. So for me, it is the flexibility of the TRIO platform allows us to do a number of purposes. And one of many crucial issues within the device, the way in which we really handle the temperature inside that processing, so it is a excessive plasma setting, it is like lightning being managed inside a plasma working setting. And really, our capacity to regulate the temperature implies that we will really put polymers via the machine. So it is a crucial a part of our design approach is permitting us to run polymers in addition to glass. So we’re fairly excited in regards to the flexibility and flexibility of the platform. Hopefully that solutions the query.
Operator: [Operator Instructions] The subsequent query is from Mark Miller from Benchmark.
Mark Miller: I am sorry, I acquired on somewhat late. I simply was questioning, the upside in revenues this quarter, was that pull-ins or orders you did not count on?
Nigel Hunton: Maintain on, I’ve acquired music coming into my line. I don’t know what was in that music.
Operator: One second, I’ll mute that line. There we go.
Nigel Hunton: Apologies for that. I’m not certain what induced that sudden music. It wasn’t my style in music both. So the query is form of pull-ins for the quarter. In order you already know, you’ve got been protecting this house for a very long time and every quarter can have completely different fundamentals relying on budgets and cycles for the purchasers we particularly have. I imply this was pull-ins of HAMR and different upgrades into the quarter from the second half of the yr. So these are, I would say, in all probability at the least half had been pull-ins. And as we have mentioned on the decision, we now imagine the complete yr quantity goes to be close to $45 million and $40 million. So general, it is a robust yr however these had been completely pull-ins from the second half to get some extra upgrades carried out and people upgrades which lined each PMR and HAMR and once more, it is a testomony to the workforce in Singapore that we may reply shortly. We have now a really, very, as you already know, skilled workforce in Singapore that is been in a position to reply very quick during the last 2 years plus as I have been on this function. And each time we have thrown a problem they usually’ve delivered and carried out and stepped as much as meet the demand. So these are assembly actual customized demand and it was nice to be to realize that and beat my steerage.
Mark Miller: I am simply questioning, I apologize once more, what had been your orders throughout the quarter?
Nigel Hunton: So the orders are blended. The precise variety of these orders, I am going to move it over to Kevin simply to substantiate the quantity. However loads of that was about timing of orders. And so I believe we’ll see, I believe the complete yr for this yr, the orders are already in place. I do know that for now. Kevin, what was the ultimate order quantity for this quarter?
Kevin Soulsby: It is slightly below $4 million for the quarter, Mark. The backlog as we sit right here is simply over $42 million on the finish of June as effectively. So strong backlog to permit us to venture the $45 million that Nigel was articulating.
Mark Miller: That is for the yr. Now $45 million is your gross sales purpose.
Kevin Soulsby: Appropriate.
Mark Miller: What % of gross sales upgrades are HAMR-related?
Nigel Hunton: We do not give that actual quantity away however the majority have been HAMR during the last 2 years however extra not too long ago, we have seen some PMR coming via as effectively. So the excellent news is there will be some enhancements occurring round PMR in addition to HAMR. In order each applied sciences run in parallel, each know-how want degree of upgrades however the majority have been round HAMR upgrades.
Mark Miller: And what about gross margins for this quarter?
Kevin Soulsby: So gross margins had been robust once more via the quarter. And once more, loads of the gross margin is linked to the combination of the upgrades. I imply among the upgrades we’ve aggressive choices, a few of them do not, form of among the margins, combine and alter every quarter. I do not know whether or not Cameron, do you wish to add something on the margin remark however there is a good mixture of upgrades within the quarter.
Cameron McAulay: The margins might be related, Mark. Sure, turnout for [ph] September; 37% to 39% in opposition to the 38.2% [ph] we did within the June quarter. So any variability to these, the margins is de facto a mixture of the completely different traits of the upgrades that Nigel talked about.
Mark Miller: Did you present money from operations, your money went up I do know.
Cameron McAulay: Sure. We did within the ready remarks. So we had $7 million of optimistic money stream from working capital and about $1 million of detrimental money stream from the P&L. Sturdy quarter. We exited with simply over $70 million in money.
Mark Miller: So $6 million internet money from operations.
Cameron McAulay: Sure.
Operator: There aren’t any additional questions at the moment. I’ll now flip the decision again over to Nigel Hunton for his closing remarks. Pardon me, there may be yet another query simply now from Peter Wright from PartnerCap Securities.
Peter Wright: Great. So I am sorry, one clarification on gross margin, in case you can, simply constructing on Mark’s query. So gross margin, the steerage is reflective of the HDD enterprise or that’s inclusive of any TRIO programs that may promote you assume it is going to stay steady.
Nigel Hunton: Sure. So the gross margin for the following quarter is assuming HDD which we have mentioned that.
Peter Wright: Sure. And I am sorry, did you say you are anticipating margins to stay flat via the course of the yr?
Nigel Hunton: Sure. So we have given the margin steerage for the quarter developing. And once more, we had been going to rearrange for that and that’s predominantly 100% made out of HDD enterprise as a result of we have talked a few give attention to getting orders for TRIO after which the income is not going to be on this subsequent quarter. So it is going to be 100% HDD enterprise within the subsequent quarter.
Operator: The subsequent query is from Dan Weston from West Capital Administration.
Dan Weston: Nigel, simply a few fast factors of clarification, in case you would. On the TRIO entrance, is the trajectory to get the primary device certified by the glass ending buyer? And is there a second qualification interval to their finish buyer?
Nigel Hunton: Appropriate. I imply a few of them additionally [ph] — the important thing processes — and as we highlighted, it is nice to get that product into the market shortly. That goes via a course of and qualification with the glass finisher. That then goes via a course of with the ultimate merchandise earlier than launch. I believe we mentioned this on the earlier fall as effectively. Any product analysis into the market, one goes via proving the know-how, getting the device certified glass finisher, they then take that and put the precise buyer completed merchandise via it will get that certified previous to launch. So we’ve to undergo that second degree of qualification.
Dan Weston: Nice. Sure, thanks for the clarification there. After which lastly, I wish to ensure that I heard you accurately in your ready remarks on the Lean facet, did you say that there is a risk to have further capability growth device orders within the close to future?
Nigel Hunton: I believe as we take a look at what is going on on within the {industry} and we’re seeing among the AI driving demand that we’re seeing demand began to go up. I believe we’ll preserve the main target round upgrades and that can predominantly be a part of the enterprise. However I believe over the following couple of years, I believe there may be potential for, I believe I mentioned a small variety of programs. I believe there might be some incremental, I believe nearly all of give attention to getting the capability as much as HAMR readiness goes to be the important thing investments from our prospects. However there’s at all times room, I believe there’s going to be potential for some further however it is going to be a small quantity if that occurs.
Dan Weston: Sure. No, I respect that readability. And congratulations on the wonderful quarter.
Nigel Hunton: Respect your assist.
Operator: There aren’t any additional questions at the moment. I’ll flip the decision again over to Nigel Hunton for his closing remarks.
Nigel Hunton: Thanks. And thanks for all the questions. And I additionally wish to thank all of our staff, loads of these form of working intently with me in Asia in the mean time and all of the counterparts of our {industry} companions for all of the arduous work and dedication to ship one other robust improve quarter and equally importantly, work in the direction of qualifying our first device within the area, first TRIO. I would additionally wish to thank all of the buyers on the decision for his or her ongoing assist. And simply to remind folks, our IR actions scope embrace a Benchmark convention in New York on September 4. And as at all times, please attain out to Clair straight to rearrange of follow-up. And I sit up for updating you all on our Q3 name in early November. So at that time, so thanks and we will shut the decision.
Operator: Thanks. This concludes as we speak’s convention. It’s possible you’ll disconnect now.
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