Credo Technology Group Holding Ltd (CRDO) 2023 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. (Operator Instructions)

女士們，先生們，謝謝你們的支持。 （操作員說明）

I would now like to turn the conference over to Dan O'Neil. Please go ahead, sir.

我現在想將會議轉交給 Dan O'Neil。請繼續，先生。

Good afternoon. Thank you for joining us on our fiscal 2023 third quarter earnings call. Joining me today from Credo are Bill Brennan, our Chief Executive Officer; and Dan Fleming, our Chief Financial Officer.

下午好。感謝您加入我們的 2023 財年第三季度財報電話會議。今天從 Credo 加入我的是我們的首席執行官 Bill Brennan；以及我們的首席財務官 Dan Fleming。

I'd like to remind everyone that certain comments made on this call today may include forward-looking statements regarding expected future financial results, strategies and plans, future operations, the markets in which we operate and other areas of discussion. These forward-looking statements are subject to risks and uncertainties that are discussed in detail in our documents filed with the SEC. It's not possible for the company's management to predict all risks nor can the company assess the impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements.

我想提醒大家，在今天的電話會議上發表的某些評論可能包括有關預期未來財務結果、戰略和計劃、未來運營、我們運營的市場和其他討論領域的前瞻性陳述。這些前瞻性陳述受我們向美國證券交易委員會提交的文件中詳細討論的風險和不確定性的影響。公司管理層不可能預測所有風險，公司也無法評估所有因素對其業務的影響或任何因素或因素組合可能導致實際結果與任何前瞻性預測中包含的結果存在重大差異的程度聲明。

Given these risks, uncertainties and assumptions, the forward-looking events discussed during this call may not occur and actual results could differ materially and adversely from those anticipated or implied. The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of this call to conform these statements to actual results or to changes in the company's expectations except as required by law.

鑑於這些風險、不確定性和假設，本次電話會議期間討論的前瞻性事件可能不會發生，實際結果可能與預期或暗示的結果存在重大不利差異。除非法律要求，否則公司沒有義務在本次電話會議日期後以任何理由公開更新前瞻性陳述，以使這些陳述符合實際結果或公司預期的變化。

Also during this call, we will refer to certain non-GAAP financial measures, which we consider to be important measures of the company's performance. These non-GAAP financial measures are provided in addition to and not as a substitute for or superior to financial performance prepared in accordance with U.S. GAAP. A discussion of why we use non-GAAP financial measures and reconciliations between our GAAP and non-GAAP financial measures is available in the earnings release we issued today, which can be accessed using the Investor Relations portion of our website.

同樣在本次電話會議中，我們將參考某些非 GAAP 財務指標，我們認為這些指標是衡量公司業績的重要指標。這些非 GAAP 財務指標是根據美國公認會計原則編制的財務業績的補充，而不是替代或優於這些財務業績。我們今天發布的收益報告中討論了為什麼我們使用非 GAAP 財務指標以及我們的 GAAP 和非 GAAP 財務指標之間的調節，可以使用我們網站的投資者關係部分訪問。

With that, I'll now turn the call over to our CEO. Bill?

有了這個，我現在將把電話轉給我們的首席執行官。賬單？

Thank you, Dan. Good afternoon, everyone, and thank you for joining the call. During this call, I'll discuss Credo's FY '23 third quarter results and our updated outlook, along with the industry trends and customer engagements that have us optimistic about our future growth. Credo is a pure-play high-speed connectivity company. We built our first solutions for the Ethernet market. Our current portfolio of high-performance and low-power connectivity solutions include, active electrical cables or AECs, integrated circuits, or ICs, SerDes chiplets and intellectual property or IP. All of our product and IP solutions leverage our unique application-specific SerDes portfolio, enabling us to deliver optimized, secure, high-speed solutions with better power efficiency and cost.

謝謝你，丹。大家下午好，感謝您加入電話會議。在這次電話會議中，我將討論 Credo 的 FY '23 第三季度業績和我們更新的前景，以及讓我們對未來增長持樂觀態度的行業趨勢和客戶參與度。 Credo 是一家專營高速連接的公司。我們為以太網市場構建了第一個解決方案。我們當前的高性能和低功耗連接解決方案組合包括有源電纜或 AEC、集成電路或 IC、SerDes 小芯片和知識產權或 IP。我們所有的產品和 IP 解決方案都利用我們獨特的特定於應用程序的 SerDes 產品組合，使我們能夠提供優化、安全、高速的解決方案，具有更好的能效和成本。

Our connectivity solutions address both electrical and optical applications at port speeds currently ranging from 50 gigabits per second up to 1.6 terabits per second. Our customers include hyperscale data center operators, networking equipment OEMs and ODMs, optical module manufacturers and others in the Ethernet ecosystem. While we primarily serve the Ethernet market today, we continue to expand into other standards-based markets as the need for higher speed and more power-efficient connectivity increases exponentially.

我們的連接解決方案以目前從每秒 50 吉比特到每秒 1.6 太比特的端口速度處理電氣和光學應用。我們的客戶包括超大規模數據中心運營商、網絡設備 OEM 和 ODM、光模塊製造商以及以太網生態系統中的其他公司。雖然我們今天主要服務於以太網市場，但隨著對更高速度和更節能連接的需求呈指數級增長，我們將繼續擴展到其他基於標準的市場。

For Q3, Credo reported revenue of $54.3 million, representing a 6% sequential growth and year-over-year growth of more than 71%. Additionally, we reported non-GAAP gross margin of 59.3%. Both revenue and gross margin were within our guidance for Q3.

對於第三季度，Credo 報告的收入為 5430 萬美元，環比增長 6%，同比增長超過 71%。此外，我們報告的非 GAAP 毛利率為 59.3%。收入和毛利率都在我們對第三季度的指導範圍內。

Prior to giving an update on our progress with our business, I would like to briefly discuss the 8-K we filed 2 weeks ago. We filed the 8-K because our largest customer reduced their near-term demand forecast for our products. We continue to believe the reduction was due to reasons unrelated to our performance and that we've maintained our sole source position at this customer. This reduction in forecast, along with the overall macroeconomic headwinds in the market will impact our revenue in Q4 and fiscal '24. We strongly believe the fundamental connectivity technology trends remain consistent across the data infrastructure market. The need for speed, power efficiency and collaborative problem-solving is ever increasing. Our long-term financial model remains unchanged, and we remain optimistic about our growth opportunities, given our ongoing engagements in several advanced programs with our largest customer and other hyperscalers as well as 5G carriers.

在介紹我們業務進展的最新情況之前，我想簡要討論一下我們 2 週前提交的 8-K。我們提交 8-K 是因為我們最大的客戶降低了他們對我們產品的近期需求預測。我們仍然認為減少是由於與我們的業績無關的原因，並且我們一直保持對該客戶的唯一來源地位。預測的下調以及市場整體宏觀經濟逆風將影響我們在第四季度和 24 財年的收入。我們堅信，基本的連接技術趨勢在整個數據基礎設施市場保持一致。對速度、能效和協作解決問題的需求不斷增加。我們的長期財務模式保持不變，並且我們對我們的增長機會保持樂觀，因為我們正在與我們最大的客戶和其他超大規模運營商以及 5G 運營商進行幾個高級項目。

Now moving on to an update on our overall business, beginning with AEC. During Q3, our growth was driven by our AEC solutions, a product category we pioneered and which continues to gain broad industry acceptance. Our growing list of [AEC] customers are migrating to AECs for short in-rack cable solutions for various reasons, including the limitation of alternative solutions and a unique tailored feature set of our products. As data center and other network operators migrate to higher speed lane rates of 50-gig or greater, AECs offer better signal integrity and physical attributes compared to DACs and our AECs offer compelling benefits over AOCs across power, cost and reliability.

現在繼續更新我們的整體業務，從 AEC 開始。在第三季度，我們的增長是由我們的 AEC 解決方案推動的，這是我們開創的產品類別，並繼續獲得廣泛的行業認可。由於各種原因，我們越來越多的 [AEC] 客戶正在遷移到 AEC 以獲得機架內短電纜解決方案，包括替代解決方案的限制和我們產品的獨特定制功能集。隨著數據中心和其他網絡運營商遷移到 50 gig 或更高的更高速度通道速率，與 DAC 相比，AEC 提供更好的信號完整性和物理屬性，並且我們的 AEC 在功率、成本和可靠性方面提供了優於 AOC 的令人信服的優勢。

Additionally, our AECs offered functionality our customers can use to innovate on rack architectures for servers in both compute and AI/ML applications as well as for disaggregated switch racks. Industry analysts expect AECs to become a multibillion-dollar market within 4 or 5 years as AECs become the most prevalent solution for in-rack connectivity. While we'll be shipping reduced volumes to our largest AEC customer in the near term, we continue to engage with them on future programs on the roadmap for both compute and AI server racks, and we remain confident in the strength of this relationship.

此外，我們的 AEC 提供了一些功能，我們的客戶可以使用這些功能在計算和 AI/ML 應用程序以及分解式交換機機架中的服務器機架架構上進行創新。行業分析師預計，隨著 AEC 成為最普遍的機架內連接解決方案，AEC 將在 4 或 5 年內成為價值數十億美元的市場。雖然我們將在短期內減少向我們最大的 AEC 客戶的發貨量，但我們將繼續與他們就計算和 AI 服務器機架的路線圖上的未來計劃進行接觸，我們對這種關係的強度充滿信心。

I'm happy to report that Credo has begun the early stages of the production ramp with our second hyperscale customer. And although the detailed time line of their volume ramp is still developing, we expect meaningful contribution in fiscal '24.

我很高興地向大家報告，Credo 已經與我們的第二個超大規模客戶一起開始了量產的早期階段。儘管他們的銷量增長的詳細時間表仍在製定中，但我們預計在 24 財年做出有意義的貢獻。

We're also deeply engaged in developing advanced AEC solutions with this customer for their next-generation server rack and switch rack applications as they move to 100-gig single lane speeds. Additionally, we continue to make progress with other customers as well. We're in flight with 2 additional hyperscalers for switch rack and AI server rack applications using both 400-gig and 800-gig AECs. While hyperscalers remain our primary focus, we're engaged in meaningful opportunities with other data center operators and 5G carriers.

我們還與該客戶一起深入開發先進的 AEC 解決方案，用於他們的下一代服務器機架和交換機機架應用，因為他們正在轉向 100 千兆單通道速度。此外，我們也繼續與其他客戶取得進展。我們正在使用 400-gig 和 800-gig AEC 為交換機機架和 AI 服務器機架應用程序增加 2 個超大規模計算器。雖然超大規模用戶仍然是我們的主要關注點，但我們正在與其他數據中心運營商和 5G 運營商一起尋找有意義的機會。

Regarding our progress on optical solutions, Credo also leverages our differentiated SerDes technology to deliver disruptive solutions to the optical market. In this category, we deliver a breadth of products across DSPs, laser drivers and TIAs for 50-gig through 800-gig port applications. We've seen success thus far securing wins with both optical module manufacturers as well as with hyperscalers directly through joint development models. While the time to achieve our volume production revenue ramp has shifted in the current environment, we continue to play the role of disruptor in the optical market.

關於我們在光學解決方案方面的進展，Credo 還利用我們差異化的 SerDes 技術為光學市場提供顛覆性的解決方案。在這一類別中，我們為 50-gig 到 800-gig 端口應用提供範圍廣泛的產品，包括 DSP、激光驅動器和 TIA。到目前為止，我們已經看到了成功，通過聯合開發模型直接與光學模塊製造商和超大規模廠商取得了勝利。雖然在當前環境下實現量產收入增長的時間已經發生變化，但我們繼續在光學市場中扮演顛覆者的角色。

Our initial success has come with optical DSPs for the 200-gig and 400-gig port markets, and we're confident our recently introduced Dove 800 optical DSP provides considerable differentiation. Enabled by our superior SerDes technology, we remain confident we will gain share over time due to our compelling combination of performance, power and cost. Credo will have a strong presence at the OFC conference in San Diego next week, where we'll be showing several demonstrations with our Dove 800 family products. I look forward to seeing many of you there.

我們最初的成功來自於面向 200-gig 和 400-gig 端口市場的光學 DSP，我們相信我們最近推出的 Dove 800 光學 DSP 提供了相當大的差異化。在我們卓越的 SerDes 技術的支持下，我們仍然相信，由於我們引人注目的性能、功率和成本組合，我們將隨著時間的推移獲得市場份額。 Credo 將在下周於聖地亞哥舉行的 OFC 會議上大放異彩，屆時我們將展示我們的 Dove 800 系列產品的多個演示。我期待在那裡見到你們中的許多人。

Moving to our Line Card PHY solutions, Credo continues to extend our leadership in the Ethernet Line Card PHY market across hyperscalers and networking OEMs and ODMs. Our solutions include MACsec PHYs for high security applications needing encryption, as well as retimer and gearbox solutions at 50-gig and 100-gig lane speeds. Our recently announced 1.6T screaming Eagle Line Card PHY, which is a long-reach DSP retimer and gearbox, highlights our performance and power leadership in this product category.

轉向我們的線路卡 PHY 解決方案，Credo 繼續擴大我們在以太網線路卡 PHY 市場的領導地位，涵蓋超大規模和網絡 OEM 和 ODM。我們的解決方案包括用於需要加密的高安全性應用的 MACsec PHY，以及 50-gig 和 100-gig 通道速度的重定時器和變速箱解決方案。我們最近發布的 1.6T screaming Eagle Line Card PHY 是一款長距離 DSP 重定時器和變速箱，突出了我們在該產品類別中的性能和功率領先地位。

I will note that we've delivered the most power-efficient Line Card PHY solutions in the market using the 12-nanometer process. As we move to 5-nanometer, we expect to achieve a 40% decrease in power, forcing our competition to move to 3-nanometer to compete and as a result, creating significant time to market and cost advantages for Credo.

我會注意到，我們使用 12 納米工藝提供了市場上最節能的線路卡 PHY 解決方案。隨著我們轉向 5 納米，我們預計功耗將降低 40%，迫使我們的競爭對手轉向 3 納米以進行競爭，從而為 Credo 創造顯著的上市時間和成本優勢。

I would now like to give an update on our SerDes IP licensing and SerDes chiplet business. Our Q3 results were bolstered by revenue attributable to our lead consumer electronics customer and 56-gig Ethernet licensing. While our IP business is variable due to recognition rules and the IP sales cycle, our customer funnel is robust. Here, too, we have confidence in our growth prospects due to customer feedback. Customers have shared that our 5- and 4-nanometer 112-gig SerDes IP offers a 40% to 50% power advantage compared to the competition, depending on the reach of their application. This again highlights our N-1 process advantage, which means to achieve the power efficiency of Credo's 5- and 4-nanometer IP solutions, customers would need to move to 3-nanometer if considering our competition.

我現在想介紹一下我們的 SerDes IP 許可和 SerDes 小芯片業務的最新情況。我們的第三季度業績得益於我們主要消費電子產品客戶的收入和 56-gig 以太網許可。雖然我們的 IP 業務因識別規則和 IP 銷售週期而變化，但我們的客戶渠道是穩健的。在這裡，由於客戶的反饋，我們對我們的增長前景也充滿信心。客戶表示，與競爭對手相比，我們的 5 納米和 4 納米 112-gig SerDes IP 具有 40% 到 50% 的功率優勢，具體取決於他們的應用範圍。這再次凸顯了我們的 N-1 工藝優勢，這意味著要實現 Credo 的 5 納米和 4 納米 IP 解決方案的功效，如果考慮到我們的競爭，客戶將需要轉向 3 納米。

Finally, regarding the SerDes chiplet opportunity, market trends, including the advancement of the UCIE consortium, suggests that SerDes chiplet market will become a meaningful long-term opportunity for us. Our leadership position in the SerDes chiplet market is evidenced by our multiple production revenue wins in this category, including with Tesla and Intel.

最後，關於 SerDes chiplet 機會，市場趨勢，包括 UCIE 聯盟的進步，表明 SerDes chiplet 市場將成為我們有意義的長期機會。我們在 SerDes 小芯片市場的領導地位體現在我們在該類別中的多次生產收入勝利，包括與特斯拉和英特爾的合作。

In summary, Credo remains laser focused on the large opportunity afforded us by our differentiated solutions in a market that's demanding higher speeds and better power efficiency. Our N-1 process advantage gives us a distinct advantage across multiple competitive axes, but maybe most importantly, in power. Power efficiency is increasingly important, and credo can help our customers lower electricity consumption through use of all of our products.

總之，Credo 始終專注於我們的差異化解決方案在要求更高速度和更高能效的市場中為我們提供的巨大機遇。我們的 N-1 工藝優勢使我們在多個競爭軸上具有明顯的優勢，但也許最重要的是在功率方面。電源效率越來越重要，credo 可以幫助我們的客戶通過使用我們的所有產品來降低電力消耗。

Clearly, we're disappointed about the adjustment in the near-term outlook given the disruption with our largest customer. However, the feedback from that customer as well as from other customers and the additional developments I just discussed, fuel our optimism about our growth prospects in the future. We remain committed to close customer collaboration, continued innovation and the expansion of our solution portfolio to address the ever-increasing needs for higher bandwidth and more power-efficient connectivity solutions.

顯然，鑑於我們最大客戶的中斷，我們對近期前景的調整感到失望。然而，來自該客戶以及其他客戶的反饋以及我剛才討論的其他發展，激發了我們對未來增長前景的樂觀情緒。我們仍然致力於與客戶密切合作、持續創新和擴展我們的解決方案組合，以滿足對更高帶寬和更節能的連接解決方案不斷增長的需求。

At this time, I'll turn the call over to our CFO, Dan Fleming, who will provide additional details. We'll then open the line for questions. Thank you.

此時，我會將電話轉給我們的首席財務官 Dan Fleming，他將提供更多詳細信息。然後我們將打開問題熱線。謝謝。

Thank you, Bill, and good afternoon. I'll first review our Q3 fiscal 2023 results and then discuss our outlook for Q4 of fiscal '23. As a reminder, the following financials will be discussed on a non-GAAP basis, unless otherwise noted.

謝謝你，比爾，下午好。我將首先回顧我們 2023 財年第三季度的業績，然後討論我們對 23 財年第四季度的展望。提醒一下，除非另有說明，否則將在非 GAAP 基礎上討論以下財務數據。

In Q3, we reported revenue of $54.3 million within our guidance range, up 6% sequentially and up 71% year-over-year. Sequential growth was driven by continued traction in our IP business, which reached $12.6 million in Q3, up 285% sequentially and up 145% year-over-year. IP remains a strategic part of our business, but as a reminder, our IP results may vary from quarter-to-quarter, driven largely by specific deliverables to pre-existing contracts. While the mix of IP and product revenue will vary in any given quarter over time, our revenue mix in Q3 was 23% IP, above our long-term expectation for IP, which is 10% to 15% of revenue. We continue to expect IP as a percentage of revenue to come in above our long-term expectation for the current fiscal year.

在第三季度，我們報告的收入在我們的指導範圍內為 5430 萬美元，環比增長 6%，同比增長 71%。我們知識產權業務的持續增長推動了環比增長，該業務在第三季度達到 1260 萬美元，環比增長 285%，同比增長 145%。 IP 仍然是我們業務的戰略組成部分，但提醒一下，我們的 IP 結果可能會因季度而異，這主要是由特定可交付成果對現有合同的推動。雖然 IP 和產品收入的組合在任何特定季度都會隨著時間的推移而變化，但我們在第三季度的收入組合為 23% IP，高於我們對 IP 的長期預期，即佔收入的 10% 至 15%。我們繼續預計知識產權佔收入的百分比將高於我們對本財年的長期預期。

Our product business generated $41.7 million of revenue in Q3, down 13% sequentially and up 56% year-over-year. Year-over-year growth in product revenue was driven principally by AEC growth. With a strong IP result this quarter, our team delivered gross margin of 59.3% within our guidance range and up 438 basis points sequentially. Our IP gross margin generally hovers near 100% and was 98.2% in Q3. Our product gross margin was 47.6% in the quarter, down 496 basis points sequentially and down 585 basis points year-over-year, due principally to revenue mix.

我們的產品業務在第三季度創造了 4170 萬美元的收入，環比下降 13%，同比增長 56%。產品收入的同比增長主要受到 AEC 增長的推動。憑藉本季度強勁的知識產權業績，我們的團隊在我們的指導範圍內實現了 59.3% 的毛利率，並且連續上升了 438 個基點。我們的 IP 毛利率一般徘徊在 100% 附近，第三季度為 98.2%。本季度我們的產品毛利率為 47.6%，環比下降 496 個基點，同比下降 585 個基點，這主要是由於收入組合所致。

Total operating expenses in the third quarter were $25.7 million, below the midpoint of our guidance and up 41% year-over-year, considerably below our 71% year-over-year revenue growth. Our OpEx increase was driven by a 53% year-over-year increase in R&D as we continue to invest in the resources needed to deliver innovative solutions. Our SG&A was up 26% year-over-year as we built out public company infrastructure.

第三季度的總運營費用為 2570 萬美元，低於我們指引的中點，同比增長 41%，遠低於我們 71% 的收入同比增長。我們的運營支出增長是由研發同比增長 53% 推動的，因為我們繼續投資於提供創新解決方案所需的資源。隨著我們建立上市公司基礎設施，我們的 SG&A 同比增長 26%。

We delivered non-GAAP operating income of $6.7 million in Q3, an improvement of $5.3 million year-over-year and up 97% sequentially. Our operating margin was 12.3% in the quarter, an improvement of 8 percentage points year-over-year and up 569 basis points sequentially due to top line growth that resulted in higher gross profit.

我們在第三季度實現了 670 萬美元的非美國通用會計準則營業收入，同比增長 530 萬美元，環比增長 97%。我們本季度的營業利潤率為 12.3%，同比增長 8 個百分點，環比增長 569 個基點，這是由於收入增長導致毛利潤增加。

We delivered net income of $7.5 million in Q3, an increase of $5.1 million year-over-year and up 208% sequentially. Cash flow used by operations in the third quarter was $2.3 million, a decrease of $4 million year-over-year and a decrease of $4.1 million sequentially due largely to an increase in inventory. CapEx was $6.9 million in the quarter, driven by production mask spending. And free cash flow was negative $9.2 million, a decrease of $8 million year-over-year and a decrease of $5.3 million sequentially.

我們在第三季度實現了 750 萬美元的淨收入，同比增長 510 萬美元，環比增長 208%。第三季度運營使用的現金流量為 230 萬美元，同比減少 400 萬美元，環比減少 410 萬美元，主要原因是存貨增加。本季度的資本支出為 690 萬美元，主要受生產掩模支出的推動。自由現金流為負 920 萬美元，同比減少 800 萬美元，環比減少 530 萬美元。

We ended the quarter with cash and equivalents of $233 million, a decrease of $7.5 million from the second quarter. This decrease in cash was a result of capital expenditures and working capital investments. Our accounts receivable balance decreased 16.6% sequentially to $43.2 million, while days sales outstanding decreased to 72 days, down from 92 days in Q2. Our Q3 ending inventory was $50.3 million, up $2.5 million sequentially.

本季度末，我們的現金及等價物為 2.33 億美元，比第二季度減少 750 萬美元。現金減少是資本支出和營運資本投資的結果。我們的應收賬款餘額環比下降 16.6% 至 4320 萬美元，而銷售未清天數從第二季度的 92 天下降至 72 天。我們第三季度末庫存為 5030 萬美元，比上一季度增加 250 萬美元。

Now turning to our guidance. We currently expect revenue in Q4 of fiscal '23 to be between USD30 million and USD32 million, down 43% sequentially at the midpoint. We expect Q4 gross margin to be within a range of 56% to 58%. We expect Q4 operating expenses to be between USD26 million and USD28 million. We expect Q4 weighted average diluted share count to be approximately 163 million shares. And finally, we expect fiscal year 2024 revenue to be flat compared to fiscal year 2023.

現在轉向我們的指導。我們目前預計 23 財年第四季度的收入將在 3000 萬美元至 3200 萬美元之間，按中點順序下降 43%。我們預計第四季度的毛利率將在 56% 至 58% 的範圍內。我們預計第四季度運營費用在 2600 萬美元至 2800 萬美元之間。我們預計第四季度加權平均稀釋股數約為 1.63 億股。最後，我們預計 2024 財年的收入與 2023 財年持平。

And with that, I will open it up for questions.

有了這個，我會打開它來提問。

(Operator Instructions) And our first question will come from Toshiya Hari of Goldman Sachs.

（操作員說明）我們的第一個問題將來自高盛的 Toshiya Hari。

I had 2, if I may. The first one is on your largest customer. Bill, I just want to better understand what's driving the change in the near-term outlook here? Is it simply a push in the customers' time line and projects? Or are you seeing cancellations from them? Is it an inventory dynamic? I think in your prepared remarks, you mentioned that you're confident that you're still sole source there. But any risk of a fundamental change of their infrastructure going forward?

如果可以的話，我有 2 個。第一個是關於你最大的客戶。比爾，我只是想更好地了解是什麼推動了近期前景的變化？僅僅是推客戶的時間線和項目嗎？或者你看到他們取消了嗎？是庫存動態嗎？我想在你準備好的發言中，你提到你有信心你仍然是那裡的唯一來源。但是，他們的基礎設施未來會發生根本性變化嗎？

Sure. So clearly, this is a complex customer that we're working with. We fundamentally believe it's a combination of 2 things. One is inventory that they're working through. I think there's a change in behavior coming off of the supply constraints that we saw over the past few years. And I think they're bringing their inventory levels down to more of a normal level. This is combined with other pockets of inventory that were built up within our supply chain. So I think that's the first factor.

當然。很明顯，這是我們正在與之合作的複雜客戶。我們從根本上認為這是兩件事的結合。一個是他們正在處理的庫存。我認為過去幾年我們看到的供應限制導致行為發生了變化。而且我認為他們正在將庫存水平降低到更接近正常水平。這與我們供應鏈中建立的其他庫存相結合。所以我認為這是第一個因素。

The second factor is really that they've seen pushouts in key programs, additional programs that use our AECs, there's been delays of qualification and pushouts due to various factors. I will reiterate that we have nothing to suggest that we're no longer a sole source position with this customer. We feel pretty confident with that. And we feel pretty confident that there's no technical issues with our products. So I think it really boils down to inventory as well as new SKU pushouts and delays.

第二個因素實際上是他們已經看到關鍵項目的推出，使用我們 AEC 的其他項目，由於各種因素，資格和推出出現了延遲。我要重申，我們沒有任何跡象表明我們不再是該客戶的唯一來源。我們對此非常有信心。我們非常有信心我們的產品沒有技術問題。所以我認為這真的歸結為庫存以及新 SKU 的推出和延遲。

Got it. And then as my second question on the fiscal '24 outlook maybe for Dan or Bill, for that matter. So you're guiding to a flattish revenue outlook. Prior to the 8-K, I think the Street was modeling somewhere in the low $300 million range for revenue. So clearly, there's been a pretty significant change there. Can you sort of break out the individual sub-components, if you will, the drivers of that change, the largest customer, the dynamics that you just talked about, if it's a push, I guess, I would think and I would hope some of that revenue materializes in the second half of fiscal '24, but how are you thinking about that?

知道了。然後，作為我關於 24 財政年度前景的第二個問題，可能是針對丹或比爾的。所以你正在引導一個平坦的收入前景。在 8-K 之前，我認為 Street 的建模收入在 3 億美元左右。很明顯，那裡發生了相當大的變化。你能不能分解一下各個子組件，如果你願意的話，這種變化的驅動因素，最大的客戶，你剛才談到的動態，如果它是一個推動，我想，我會認為，我希望一些該收入的一部分將在 24 財年下半年實現，但您對此有何看法？

Bill, you talked about your second AEC customer ramping in fiscal '24. And then obviously, you have a robust Line Card business, IP business as well. So can you talk through the individual components as you think about fiscal '24?

比爾，你談到了你的第二個 AEC 客戶在 24 財年的增長。然後很明顯，你有一個強大的線卡業務，IP 業務也是如此。那麼，當您考慮 24 財年時，您能談談各個組成部分嗎？

Yes, Toshiya, let me address that initially. So starting with our largest customer, what you'll see in our Q as we file it in a day or so, our largest customer was 52% of our revenue in Q3, which was up from 44% in the prior quarter. So I mentioned that because the trajectory of that customer was still on the upswing, right? So with this new forecast reduction, that trajectory obviously changes, we previously -- 2 weeks ago, we had described this FY '24 reduction is about 2/3 related to this largest customer and then about 1/3 of it due to just increased conservatism that we're applying across the board based on just macroeconomic factors that we see. So if you do the math, our largest customer remains still a very large customer in FY '24.

是的，Toshiya，讓我首先解決這個問題。因此，從我們最大的客戶開始，您將在一天左右的時間內在我們的 Q 中看到，我們最大的客戶占我們第三季度收入的 52%，高於上一季度的 44%。所以我提到因為那個客戶的軌跡還在上升，對吧？因此，隨著這個新的預測減少，這個軌跡明顯改變了，我們之前 - 2 週前，我們已經描述了這個 FY '24 減少大約 2/3 與這個最大的客戶有關，然後大約 1/3 由於剛剛增加我們基於我們看到的宏觀經濟因素全面應用的保守主義。因此，如果你算一下，我們最大的客戶在 24 財年仍然是一個非常大的客戶。

The second hyperscaler, we expect to see ramping throughout the course of the year. But we're quite comfortable right now where -- with analyst estimates for the full fiscal year '24 if that's helpful.

第二個 hyperscaler，我們預計會在全年中看到增長。但我們現在很滿意——如果有幫助的話，分析師對整個 24 財年的估計。

And sorry, one quick follow-up to that, Dan. The 1/3 of the fiscal year '24 cut, are you baking in conservatism in your IP business as well? Or is that primarily the product side outside of your largest customer?

抱歉，丹，請快速跟進一下。 24 財年削減的 1/3，您是否也在您的 IP 業務中保守主義？或者這主要是您最大客戶之外的產品方面？

It's -- you should consider it just kind of across the board.

它是——你應該全面考慮它。

(Operator Instructions) And our next question will come from Quinn Bolton of Needham & Company.

（操作員說明）我們的下一個問題將來自 Needham & Company 的 Quinn Bolton。

I wanted to follow up on questions around your largest customer. I guess, at the end of the day, do you think the opportunity set for AECs has changed at that customer meaning that the steady state revenue you thought you would get to, say, 6 months ago, do you still think you can get there? And I guess a related question, it seems like there may be some confusion in the application of your cables. What percent of your largest customers' servers today are connected with InfiniBand for AI applications versus Ethernet for just standard compute applications or instances?

我想跟進有關您最大客戶的問題。我想，歸根結底，您是否認為為 AEC 設定的機會在該客戶身上發生了變化，這意味著您認為您會達到的穩態收入，比如說，6 個月前，您仍然認為您可以達到那裡嗎？我想有一個相關的問題，似乎在您的電纜應用中可能存在一些混淆。今天，您最大客戶的服務器中有多少百分比通過 InfiniBand 連接用於 AI 應用程序，而以太網僅用於標準計算應用程序或實例？

Let me answer the second part first. The -- so the applications as we understand it, where our AECs are being used is in the compute portion of their server deployments. And so that would line up with Intel and AMD processors as well as the nicks that connect those servers. We're -- from the standpoint of InfiniBand, there's not really an opportunity for us there. InfiniBand is a slightly different protocol. Our AECs are not built to support InfiniBand. From a pure speed standpoint, of course, the speeds are something we would be able to negotiate, but there are specifics related to the protocol that -- are just not something that we've qualified.

我先回答第二部分。我們所理解的應用程序，我們的 AEC 正在其服務器部署的計算部分中使用。因此，這將與英特爾和 AMD 處理器以及連接這些服務器的缺口保持一致。我們 - 從 InfiniBand 的角度來看，我們在那裡並沒有真正的機會。 InfiniBand 是一個略有不同的協議。我們的 AEC 並非為支持 InfiniBand 而構建。當然，從純粹的速度角度來看，速度是我們可以協商的，但是與協議相關的細節並不是我們所限定的。

If you wanted to speculate in the future about could we build InfiniBand cable? Yes, we could. But right now, the way that we view it, the market is a pretty closed market and it's not something that we're spending cycles on. And Quinn, will you repeat the first part of your question?

如果您想在未來推測我們是否可以構建 InfiniBand 電纜？是的，我們可以。但現在，按照我們的看法，市場是一個相當封閉的市場，我們不會在這上面花費周期。 Quinn，你能重複你問題的第一部分嗎？

Just -- I've got a follow-up on InfiniBand, but let me come back to the first part of the question, which just 6 months ago, if you had an internal estimate of what you think AECs could reach at a steady state, an annualized revenue opportunity at that customer, has that changed given the customer forecast or the pushout and SKUs that you mentioned?

只是 - 我有關於 InfiniBand 的後續行動，但讓我回到問題的第一部分，就在 6 個月前，如果你對你認為 AEC 在穩定狀態下可以達到的目標有一個內部估計，該客戶的年化收入機會，考慮到客戶預測或您提到的推出和 SKU，它是否發生了變化？

Well, I think the way that I look at that is 2 ways. I look short-term and then I look long-term. And I would say short-term, look, I mean, we were -- our confidence was bolstered by the backlog I had at hand, the forecast that I had at hand. Clearly, we're learning that things can change. And I don't think this is something fundamental with the change in strategy on deployments. And so the way that I felt about it maybe 3 to 6 months ago was that our opportunity would be pretty aligned with the server deployments for the near-term compute portion of their spend.

好吧，我認為我看待這個問題的方式有兩種。我看短期，然後我看長期。我會說短期，看，我的意思是，我們的信心得到了我手頭的積壓和我手頭的預測的支持。顯然，我們正在了解到事情是可以改變的。而且我認為這不是部署策略變化的根本。因此，我在 3 到 6 個月前的感受是，我們的機會將與他們支出的近期計算部分的服務器部署非常一致。

And so from the standpoint of how that will change over the kind of the short to mid-term, look, that's really something that they're planning right now, but I don't think there's a fundamental shift in strategy.

因此，從短期到中期將如何改變的角度來看，這確實是他們現在正在計劃的事情，但我認為戰略不會發生根本性轉變。

And then the other way that I answer the question is really long term. And I would say that I'll go back to the fundamentals and say that there's 2 main reasons why our AECs are being adopted at any given customer. And that's, first of all, functionality, we're able to build innovative functionality into our solutions, which is why our first customer ramped, quite frankly, the white cable, the switch cable that we're selling plays a role that no other cable solution in the market could accomplish. The other reason that we're seeing conversion is [speed] and we've talked about this as lane rates go faster, DACs become obsolete, DACs being passive copper cables.

然後我回答問題的另一種方式是長期的。我要說的是，我將回到基本原理，並說我們的 AEC 被任何給定客戶採用的主要原因有兩個。首先是功能，我們能夠在我們的解決方案中構建創新功能，這就是為什麼我們的第一個客戶坦率地說，白色電纜，我們銷售的開關電纜發揮了其他人所沒有的作用市場上的電纜解決方案可以完成。我們看到轉換的另一個原因是 [速度]，我們已經討論過這一點，因為通道速率更快，DAC 變得過時，DAC 是無源銅纜。

And there's a fundamental advantage with AECs when we're talking about just a pure head-to-head competitive situation with AOCs, we're at a much lower cost, much lower power solution. And maybe reliability is the most important thing. We're 10x at a minimum, more reliable than an AOC. And so the way I see it playing out at our largest customer is that over time, our opportunity will really expand as they move from just compute to factoring in more of an AI spend. I see all of the server racks, whether they'd be compute or AI long term, will be a really robust opportunity for us as speeds move from 25-gig to 50-gig and then ultimately 100-gig per lane where I think we'll see a very strong correlation between deployments and the AEC TAM.

當我們談論與 AOC 的純粹正面競爭時，AEC 有一個根本優勢，我們的解決方案成本低得多，功耗低得多。也許可靠性是最重要的。我們至少是 AOC 的 10 倍，更可靠。因此，我認為它在我們最大的客戶身上發揮作用的方式是，隨著時間的推移，我們的機會將真正擴大，因為他們從單純的計算轉向考慮更多的 AI 支出。我看到所有服務器機架，無論是計算還是 AI 長期，對我們來說都是一個非常強大的機會，因為速度從 25-gig 移動到 50-gig，然後最終每通道 100-gig，我認為我們您會發現部署與 AEC TAM 之間存在非常強的相關性。

I guess, Bill, just to follow up on that. What percent of the AI racks today are connected with Ethernet versus InfiniBand because it sounds like you're not playing in InfiniBand, so AI today is connected with InfiniBand, it sounds like an architecture change may you have to occur. And then one for just quickly for Dan. Maybe my numbers are up, but Dan, it looks to me that despite -- I know you're mix shifting to AECs, but the product gross margins look like even on the AEC, they've probably come down over the past couple of quarters, even though AECs have ramped pretty nicely, and I would have thought there would have been some volume benefits to that AEC ramp. So can you give us some sense specifically what's going on with AEC margins? Because it looks like even with the mix shift to AECs, that the AEC margins themselves have come down over the past couple of quarters?

我想，Bill，只是想跟進一下。今天有多少百分比的 AI 機架與以太網和 InfiniBand 連接，因為聽起來你不是在 InfiniBand 中玩，所以今天的 AI 與 InfiniBand 連接，聽起來你可能必須進行架構更改。然後是 Dan 的快速響應。也許我的數字上升了，但 Dan，在我看來，儘管 - 我知道你正在混合轉向 AEC，但產品毛利率看起來甚至在 AEC 上也是如此，但在過去的幾年中它們可能已經下降季度，即使 AEC 的增長非常好，我本以為 AEC 的增長會有一些數量上的好處。那麼，您能否具體告訴我們 AEC 利潤率的情況？因為看起來即使混合轉向 AEC，AEC 利潤率本身在過去幾個季度也有所下降？

So let me start just by addressing your product margin question. So what I mentioned earlier in my script is that really it was revenue mix related in Q3. But there are, as you'd imagine, a number of factors. Revenue mix being the key one because a higher percentage of our overall revenue was AEC. So simply the fact that AEC has a lower gross margin than our corporate average, that mitigates some of the scaling benefit we would get.

因此，讓我首先解決您的產品保證金問題。所以我之前在腳本中提到的是，它確實與第三季度的收入組合相關。但是，正如您想像的那樣，有許多因素。收入組合是關鍵，因為 AEC 占我們總收入的比例更高。因此，簡單地說，AEC 的毛利率低於我們公司的平均水平，這減輕了我們將獲得的一些規模效益。

But the second item, over the prior 6 quarters, like you alluded to, product margin has expanded quite nicely due to that increasing scale, but our overall product revenue was actually slightly down sequentially in Q3. So that mitigated some of that gain you might have expected.

但是第二個項目，就像你提到的那樣，在之前的 6 個季度中，由於規模的擴大，產品利潤率增長得很好，但我們的整體產品收入實際上在第三季度略有下降。因此，這減輕了您可能預期的一些收益。

And then finally, the last thing just to mention with product margin in general for Q3 is that our forecast recently declined for fiscal year '24. So when you calculate things such as inventory reserves, the math changes because you're comparing against your forecast. So you would expect us to take a greater reserve position than in prior quarters, just fundamentally. So those -- a combination of those factors really drove that decline in product margin sequentially.

最後，關於第三季度產品利潤率的最後一件事是我們最近對 24 財年的預測有所下降。因此，當您計算諸如庫存儲備之類的東西時，數學會發生變化，因為您正在與預測進行比較。因此，您會期望我們從根本上比前幾個季度擁有更大的儲備頭寸。所以那些——這些因素的結合確實推動了產品利潤率的連續下降。

Got it. So it sounds like there might have been some inventory reserves -- higher inventory reserves in the January quarter given the forecast change that we might have missed. Okay, great. And then Bill, I don't know if you have a sense of what part of the AI infrastructure today is InfiniBand versus Ethernet.

知道了。所以聽起來可能有一些庫存儲備——考慮到我們可能錯過的預測變化，一月份季度的庫存儲備更高。好的，太好了。然後 Bill，我不知道你是否了解當今 AI 基礎設施的哪一部分是 InfiniBand 還是以太網。

I can't be specific about that, but I can tell you my thoughts are that I think first mover has been InfiniBand from a protocol perspective. But I can tell you there's -- across the industry, there's an extremely robust pipeline of Ethernet applications for the AI space.

我不能具體說明，但我可以告訴你我的想法是，從協議的角度來看，我認為先行者是 InfiniBand。但我可以告訴你，在整個行業中，人工智能領域都有非常強大的以太網應用管道。

(Operator Instructions) And our next question comes from Tore Svanberg of Stifel.

（操作員說明）我們的下一個問題來自 Stifel 的 Tore Svanberg。

Bill, this is a bit of a longer-term question, but it's kind of like due to recent events. So you're vertically integrated, you sell the whole system in AEC. Could that have led to your larger customer perhaps building a little bit more inventory? And as you think longer term, is there a strategy to selling semiconductors and perhaps then outsourcing the manufacturing of the cable or the sale of the cable that is?

比爾，這是一個比較長期的問題，但有點像最近發生的事件。所以你是垂直整合的，你在 AEC 中銷售整個系統。這會不會導致您的大客戶可能會增加一點庫存？從長遠來看，是否有銷售半導體然後外包電纜製造或電纜銷售的策略？

So I think that -- I think our model -- I guess I would say that it really wouldn't impact the amount of inventory somebody would hold, I would say. The bottom line is, we were a one component of many that were being sourced for the racks that were being built. I don't think there was any kind of special scenarios for Credo. And I don't think the model generally would lead to that in a general sense.

所以我認為 - 我認為我們的模型 - 我想我會說它真的不會影響某人持有的庫存量，我會說。最重要的是，我們是為正在建造的機架採購的眾多組件中的一個組件。我認為 Credo 沒有任何特殊場景。而且我認為該模型通常不會在一般意義上導致這種情況。

The second part of your question, I think we've talked about before, it was a necessity for us to take ownership of the complete system. And we go back 4 or 5 years ago, and it was really necessary for us to build a vertical organization, a group that was fully responsible for the AEC definition development, engineering, qualification and ultimately fulfillment and support following production. I think that was critical for the success of Credo with our customers and that includes our -- the first multiple customers that we've got. And I think it's going to be important long term that we maintain ownership of the complete system.

你問題的第二部分，我想我們之前已經談過，我們有必要擁有整個系統。我們回到 4 或 5 年前，我們確實有必要建立一個垂直組織，一個全面負責 AEC 定義開發、工程、資格以及生產後的最終履行和支持的團隊。我認為這對於 Credo 與我們的客戶取得成功至關重要，其中包括我們 - 我們擁有的第一批多個客戶。而且我認為從長遠來看，我們保持對整個系統的所有權將很重要。

The idea of us selling a semiconductor to a company that makes passive copper cables today and thinking that they would have the wherewithal to bring a highly complex solution to market. I think that was the first idea that we had, and we quickly shifted our strategy.

我們向一家生產無源銅纜的公司出售半導體，並認為他們有能力將高度複雜的解決方案推向市場的想法。我認為這是我們的第一個想法，我們很快就改變了策略。

And so when we think about, is there a different model than us selling the complete AEC solution, I think long term, there is. And we've talked about the idea in certain cases where it would make sense going to a reference design model. And that would be on a case-by-case basis where volumes would justify it. But our role in the development and support of the solution will not change. This is one where we would stand behind the design, we would bring it up, certify it, and we would support it in production in the same way that we do today.

因此，當我們考慮是否有與我們銷售完整的 AEC 解決方案不同的模型時，我認為從長遠來看，是有的。我們已經在某些情況下討論了這個想法，在這些情況下使用參考設計模型是有意義的。這將視具體情況而定，數量將證明它是合理的。但我們在解決方案的開發和支持中的角色不會改變。這是我們支持設計的地方，我們會提出它，證明它，我們會像今天一樣在生產中支持它。

So we've really had a chance to think through this. And the scenario of us selling a chip to a copper cable company is not a scenario that exists, but we will be able to achieve a shift in business model that eliminates full margin stacking and that will play itself out in the future.

所以我們真的有機會仔細考慮這個問題。而我們向銅纜公司出售芯片的場景並不存在，但我們將能夠實現商業模式的轉變，消除全利潤堆疊，這將在未來發揮作用。

And my second question is, could you just give us a time line update on going from 12- to 5-nanometer. You mentioned it a little bit when you talked about the Line Card PHYs, but if you look at the different business units, obviously, IP is different, right? But when should we expect products in 5-nanometer across the various product lines?

我的第二個問題是，你能不能給我們一個從 12 納米到 5 納米的時間線更新。您在談到線卡 PHY 時提到了一點，但如果您查看不同的業務部門，顯然 IP 是不同的，對嗎？但是我們什麼時候可以期待各種產品線的 5 納米產品呢？

So this is something that we're actively in flight on today. And we've got 5-nanometer developments really across the board for all of our product segments. The tape-outs will occur in the upcoming quarters, and we'll have products probably within the next 12 to 18 months.

所以這是我們今天正在積極開展的工作。我們的所有產品領域都真正實現了 5 納米的發展。流片將在接下來的幾個季度進行，我們可能會在未來 12 到 18 個月內推出產品。

Just one last question. I think there's a lot of focus on [ASC] but you did highlight the chiplets IP, especially with some non-communications customers. How should we think about that business for fiscal '24? Will that actually grow with the others declining?

最後一個問題。我認為很多人都關注 [ASC]，但你確實強調了小芯片 IP，尤其是一些非通信客戶。我們應該如何考慮 24 財年的業務？這真的會隨著其他人的減少而增長嗎？

Well, I would say that our IP business remains something that's strategic to us. We don't see it growing beyond our long-term model, which has been stated at 10% to 15% of our revenue. There's no change in that. Short term, we'll probably outperform that based on the reduction in the product forecasts that we're giving. But I don't think there's any fundamental shift in the way we're looking at that business. I think that we see in the future that we will have success in advanced processes, high speeds. I think we will have success with other protocols as well because we offer really unique solutions for those markets.

好吧，我會說我們的知識產權業務對我們來說仍然具有戰略意義。我們認為它的增長不會超出我們的長期模型，據稱它占我們收入的 10% 到 15%。這沒有改變。短期內，根據我們給出的產品預測的減少，我們的表現可能會更好。但我認為我們看待這項業務的方式沒有任何根本性的轉變。我認為我們將來會看到我們將在先進的工藝、高速方面取得成功。我認為我們也會在其他協議方面取得成功，因為我們為這些市場提供了真正獨特的解決方案。

I guess I was talking more specifically about chiplets. So it sounds like that's probably more of a fiscal '25 driver, but will you have any growth at all in fiscal '24?

我想我是在更具體地談論小芯片。所以聽起來這可能更像是 25 財年的驅動力，但你在 24 財年會有任何增長嗎？

No, I think it really is a fiscal '25 driver. And I think the inflection point will be the UCIe chiplet market as that takes off. And so the original -- I guess the idea is that as PCIe lane rates move from 32 to 64, that's where we're going to enter the market and it maps directly to UCIe chiplets as well.

不，我認為它確實是財政上的 25 年司機。我認為拐點將是 UCIe 小芯片市場的騰飛。所以最初的——我想這個想法是，隨著 PCIe 通道速率從 32 變為 64，這就是我們要進入市場的地方，它也直接映射到 UCIe 小芯片。

(Operator Instructions) And our next question comes from Suji Desilva of ROTH Capital.

（操作員說明）我們的下一個問題來自 ROTH Capital 的 Suji Desilva。

So first question really to understand the AEC at the lead customer. Can you give us a rough idea how many programs you're in kind of ballpark to understand if the impact was uniform across those programs? Or whether certain programs that are impacting others, weren't?

所以第一個問題是真正了解主要客戶的 AEC。您能否大致了解一下您大概有多少個項目，以了解這些項目的影響是否一致？或者某些正在影響其他項目的項目是否沒有？

So I think as we look at the number of different rack SKUs that we're involved in, it's probably on the order of 4 to 5. And the different SKUs, there's different components that change within the SKUs from the servers and mix that they're using to the (inaudible) that they're using, but our AECs are consistent. I don't think there's anything that I could point to that would suggest there's something fundamental that's changing. The first SKUs ramped and I think the other high-volume SKUs that were planned have been delayed.

所以我認為，當我們查看我們所涉及的不同機架 SKU 的數量時，它可能在 4 到 5 個數量級。不同的 SKU，服務器的 SKU 中有不同的組件發生變化，並將它們混合在一起正在使用他們正在使用的（聽不清），但我們的 AEC 是一致的。我不認為有任何我可以指出的事情表明有一些根本性的事情正在發生變化。第一批 SKU 量產，我認為計劃中的其他大批量 SKU 已被推遲。

And then the other question as you guided fiscal '24 along with the fourth quarter, wondering if you could kind of give us some sense of the linearity or shape of the quarters and the recovery? Would it be more back-end loaded or perhaps a linear recovery from the current inventory digestion?

然後是您指導 24 財年和第四季度的另一個問題，想知道您是否可以讓我們對季度和復甦的線性或形狀有所了解？它會是更多的後端負載還是從當前的庫存消化中線性恢復？

Yes. So from a revenue perspective, it should be relatively linear throughout the year in terms of a steady progression. Recall that we stated our -- we expect our bottom to be either Q4 or Q1. Q4, we guided USD30 million to USD32 million. So if you kind of view something similar to that in Q1 to get to flat year-over-year, it shows pretty strong sequential growth throughout the year. So we do expect to exit the year at a very high rate of revenue.

是的。因此，從收入的角度來看，就穩步增長而言，全年應該是相對線性的。回想一下，我們說過——我們預計我們的底部是第四季度或第一季度。第四季度，我們指導 3000 萬美元至 3200 萬美元。因此，如果您認為與第一季度類似的情況與去年同期持平，則表明全年的環比增長相當強勁。因此，我們確實希望以非常高的收入率退出這一年。

(Operator Instructions) And our next question will come from Vivek Arya of Bank of America.

（操作員說明）我們的下一個問題將來自美國銀行的 Vivek Arya。

So I think in fiscal '23, AECs are roughly, I imagine about 40%, 45% of the sales mix. I don't know if I'm -- it's perfectly right, but it's probably in that ballpark. How much do AECs represent of the mix in fiscal '24, roughly?

因此，我認為在 23 財年，AEC 大約佔銷售組合的 40%、45%。我不知道我是否——完全正確，但可能就在那個範圍內。 AEC 在 24 財年的組合中大致代表多少？

Yes. So we haven't given specific guidance on that. But -- and a lot of that really depends on the shape of the curve from the second hyperscaler. But right now, to get to flat year-over-year, I would expect it to be down a little bit, but that could change as we kind of get closer to entering FY '24 and give more specific guidance.

是的。所以我們沒有給出具體的指導。但是——其中很多實際上取決於第二個超大規模器的曲線形狀。但現在，為了與去年同期持平，我預計它會有所下降，但隨著我們接近進入 24 財年並給出更具體的指導，這種情況可能會發生變化。

All right. Because then when I look at -- you mentioned a very steep ramp in the back half. So when you look at your second half of fiscal '24 growth versus the first half, is that mainly coming from the AEC ramp at the second hyperscaler? Is that kind of the big ramp? Or is there anything else in the non-AEC part of the business that can also grow significantly, right, year-on-year in that time frame?

好的。因為那時我看 - 你提到後半部分有一個非常陡峭的斜坡。因此，當您查看 24 財年下半年與上半年的增長情況時，這是否主要來自第二個超大規模數據中心的 AEC 增長？那種大斜坡？或者在該時間範圍內，非 AEC 業務中是否還有其他任何內容也可以同比顯著增長？

Yes. So the short answer to that is, yes. It's largely AEC related. We'll be at a lower point in Q4 and Q1, and that recovers throughout the year.

是的。所以對此的簡短回答是，是的。這主要與 AEC 相關。我們將在第四季度和第一季度處於較低點，並且全年都會恢復。

Got it. And my quick follow-up, Dan, is if, let's say, your revenues next year are sort of flattish, what happens to gross margins and OpEx that you're roughly thinking about for fiscal '24?

知道了。丹，我的快速跟進是，假設你明年的收入有點持平，你粗略考慮的 24 財年毛利率和運營支出會發生什麼變化？

Yes. So the way we've looked at gross margin, we expect it to relatively be flat year-over-year. And the reason we say that or how we get there is we -- if you look at all the different things that are changing, we lose scale versus our prior expectations, right, for FY '24, which obviously is negative to margin in terms of expansion by scale. However, AEC has come down versus what we had originally thought. Again, that's favorable to overall margin.

是的。因此，從我們看待毛利率的角度來看，我們預計毛利率將同比持平。我們這麼說的原因或我們如何做到這一點是我們 - 如果你看看所有正在發生變化的不同事物，我們會失去規模與我們之前的預期相比，對，對於 24 財年，這顯然對利潤率不利規模擴張。然而，AEC 已經低於我們最初的預期。同樣，這有利於整體利潤率。

And even though the remaining, let's say, 1/3 of the reduction is kind of across the board, things like IP to become a larger percentage of the overall revenue mix. So those favorable revenue mix things really offset the loss of scale is our expectation. So FY '24, we would expect to be similar to FY '23 gross margin.

即使剩下的，比方說，減少的 1/3 是全面的，IP 之類的東西在整體收入組合中所佔的比例更大。因此，我們的預期是那些有利的收入組合真正抵消了規模損失。所以 24 財年，我們預計毛利率與 23 財年相似。

And OpEx [raise] Dan?

而 OpEx [提高] 丹？

So OpEx, we guided the midpoint of our guidance for Q4 was $27 million. So a couple of things to bear in mind there is that we have an annual focal process that's calendar year based. So that's kind of -- our Q4 number should be kind of our all-in OpEx from a headcount-related perspective as we're kind of maintaining our overall headcount and not adding incremental heads through the year. So there will be some variability quarter-over-quarter we would expect. But our Q4 guide should be pretty consistent on average throughout the remainder of fiscal year '24.

所以 OpEx，我們指導我們第四季度指導的中點是 2700 萬美元。因此，需要牢記的幾件事是，我們有一個基於日曆年的年度焦點流程。所以這有點——從與員工人數相關的角度來看，我們的第四季度數字應該是我們的全部運營支出，因為我們在某種程度上保持了我們的整體員工人數，而不是全年增加增量員工。因此，我們預計季度環比會有一些變化。但我們的第四季度指南在整個 24 財年的剩餘時間里平均應該相當一致。

(Operator Instructions) And our next question comes from Yang Pu of BNP Paribas.

（操作員說明）我們的下一個問題來自法國巴黎銀行的楊浦。

This is Karl Ackerman at BNP Paribas. Two, if I may. Bill, and organic, I guess, could you discuss whether the qualification ramps of your AEC offering at the previously announced 3 other hyperscalers has been impacted at all from the design considerations or the pause at your largest customer?

我是法國巴黎銀行的卡爾·阿克曼。兩個，如果可以的話。 Bill 和 organic，我想，你能否討論一下你的 AEC 產品在之前宣布的其他 3 個超大規模上的資格提升是否受到了設計考慮或你最大客戶的暫停的影響？

I think they're largely unrelated. I don't see any kind of correlation between the 2. What's happening in our largest customer is a function of their own planning. The second customer that we're in the early stages of ramping, the situation there is that I think the overall plan is coming together. The sequence that they go through, it seems similar with these large hyperscalers is there's a group of engineers that are responsible for developing and qualifying it given the SKU and that -- when that qualification is complete, that SKU becomes available for different businesses to pick up and deploy.

我認為它們在很大程度上是無關的。我看不出這兩者之間有任何關聯。我們最大的客戶發生的事情是他們自己計劃的結果。第二個客戶，我們正處於爬坡的早期階段，那裡的情況是我認為整體計劃正在形成。他們經歷的順序，似乎與這些大型超大規模企業相似，是有一組工程師負責根據 SKU 開發和驗證它——當驗證完成時，SKU 可供不同的企業選擇啟動並部署。

We've made it through the qualification portion with our second customer. And now I think the detailed forecast is going to be coming together over the next several months. And so as we look at that program, generally, we think that it can drive volume, but we don't want to be overly aggressive in how we're planning. And that's why we've kind of stepped back a bit and put a more conservative look on it until we've got really good visibility.

我們已經通過了第二個客戶的資格認證部分。現在我認為詳細的預測將在未來幾個月內匯集在一起。因此，當我們審視該計劃時，一般來說，我們認為它可以推動銷量，但我們不想在我們的計劃中過於激進。這就是為什麼我們稍微退後一步，對它採取更保守的看法，直到我們獲得非常好的知名度。

I guess, Dan, then a question for you, if I may. I did notice a small impairment charge in the quarter. I was curious if you could discuss what that is. And then second, how fungible are your AEC products across the design engagements, you have at some of these hyperscalers? I guess, is your -- is your current inventory reusable? Or is there an obsolescence risk that we should worry about or think about (inaudible) with revised outlook?

我想，丹，如果可以的話，我想問你一個問題。我確實注意到本季度有一筆小額減值費用。我很好奇你是否可以討論那是什麼。其次，您的 AEC 產品在設計活動中的可替代性如何，您在其中一些超大規模應用程序中擁有這些產品？我想，您的當前庫存是否可重複使用？或者是否存在我們應該擔心或考慮（聽不清）修改後的前景的過時風險？

Yes. So we don't expect there to be generally speaking, any obsolescence risk in our inventory right now. I did mention we've increased our reserve. That's kind of a -- just a mathematical equation and how we -- based on our internal procedures and how we reserve inventory. Speaking of the impairment, though, you saw a $2.4 million impairment and that was associated with the program that we terminated during the quarter.

是的。因此，我們預計目前我們的庫存一般不會存在任何過時風險。我確實提到我們增加了儲備。這是一種 - 只是一個數學方程式以及我們如何 - 基於我們的內部程序以及我們如何保留庫存。不過，說到減值，您看到了 240 萬美元的減值，這與我們在本季度終止的計劃有關。

We've been -- if we look back in time, we've been very extremely fortunate with our success across a lot of different investments that we've made over the years. But in this case, we made the decision to move forward with a different -- a higher ROI product, which can happen from time to time. So you can expect us to continue following just a very strict fiscal discipline as we look at our various ROIs on products that we tape out. And eventually, this will lead us toward our long-term financial target model.

我們一直——如果我們回顧過去，我們非常幸運，多年來我們在許多不同的投資中取得了成功。但在這種情況下，我們決定繼續推進不同的——更高投資回報率的產品，這可能會不時發生。因此，您可以期望我們在查看流片產品的各種投資回報率時繼續遵循非常嚴格的財務紀律。最終，這將引導我們走向我們的長期財務目標模型。

And there are no further questions at this time. I'd like to turn the call back to Mr. Brennan.

目前沒有其他問題。我想把電話轉回布倫南先生。

All right. Well, I'd like to thank everybody for joining the call. I appreciate all the questions. And with that, we'll end the call. Thank you very much.

好的。好吧，我要感謝大家加入電話會議。我感謝所有的問題。就這樣，我們將結束通話。非常感謝。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。