Credo Technology Group Holding Ltd (CRDO) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. (Operator Instructions) I would now like to turn the conference over to Dan O'Neill. Please go ahead, sir.

女士們先生們，謝謝你們的支持。 （操作員指示）我現在想將會議轉交給 Dan O'Neill。請繼續，先生。

Good afternoon, and thank you all for joining us on our fiscal 2024 second quarter earnings call. Today, I am joined by Credo's Chief Executive Officer, Bill Brennan, and Chief Financial Officer, Dan Fleming. I'd like to remind everyone that certain comments made in 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.

下午好，感謝大家參加我們的 2024 財年第二季財報電話會議。今天，Credo 執行長比爾布倫南 (Bill Brennan) 和財務長 Dan Fleming 與我一起出席。我想提醒大家，今天的電話會議中發表的某些評論可能包括有關預期未來財務業績、戰略和計劃、我們經營所在市場的未來運營以及其他討論領域的前瞻性陳述。

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. For the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement.

這些前瞻性陳述受到風險和不確定性的影響，這些風險和不確定性在我們向 SEC 提交的文件中進行了詳細討論。公司管理階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。任何因素或因素組合可能導致實際結果與任何前瞻性陳述中包含的結果有重大差異。

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，本次電話會議中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有重大不利差異。除非法律要求，否則本公司沒有義務在本次電話會議之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 in not as a substitute for or superior to financial performance prepared in accordance with US GAAP.

此外，在這次電話會議中，我們將提及某些非公認會計準則財務指標，我們認為這些指標是衡量公司績效的重要指標。這些非公認會計原則財務指標是作為補充提供的，而不是替代或優於根據美國公認會計原則編制的財務績效。

A discussion of why we use non-GAAP financial measures and how 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.

我們今天發布的收益報告中討論了我們為什麼使用非 GAAP 財務指標以及我們的 GAAP 和非 GAAP 財務指標之間的調整方式，您可以透過我們網站的投資者關係部分存取該報告。

I will now turn the call over to our CEO. Bill?

我現在將把電話轉給我們的執行長。帳單？

Thank you, Dan, and welcome to everyone joining our Q2 fiscal '24 earnings call. I'll start with an overview of our fiscal Q2 results. I'll then discuss our views on our outlook. After my remarks, our CFO, Dan Fleming, will provide a detailed review of our Q2 financial results and share the outlook for the third fiscal quarter. We will then be happy to take questions.

謝謝丹，歡迎大家參加我們的 24 年第二季財報電話會議。我將首先概述我們第二季的財務表現。然後我將討論我們對前景的看法。在我發言後，我們的財務長 Dan Fleming 將詳細回顧我們第二季的財務業績，並分享第三財季的前景。然後我們將很樂意回答問題。

For the second quarter, Credo reported revenue of $44 million and non-GAAP gross margin of 59.9%. Our Q2 results and our future growth expectations are driven by the accelerating market opportunity for high speed and energy efficient connectivity solutions. We target port speeds up to 1.6 Terabits per second with solutions, including active electrical cables or AECs, optical DSPs, laser drivers and TIAs, Line Card PHYs, SerDes chiplets and SerDes IP licensing, enabling us to address a broad spectrum of connectivity needs throughout the digital infrastructure market.

Credo 報告第二季營收為 4,400 萬美元，非 GAAP 毛利率為 59.9%。我們第二季度的業績和未來的成長預期是由高速和節能連接解決方案不斷加速的市場機會所推動的。我們的目標連接埠速度高達每秒1.6 太比特，解決方案包括主動電纜或AEC、光學DSP、雷射驅動器和TIA、線路卡PHY、SerDes 小晶片和SerDes IP 許可，使我們能夠滿足整個過程中的廣泛連接需求數位基礎設施市場。

Each of these solutions leverage our core 30s technology and our unique customer focus design approach. As a result, Credo delivers application-specific high-speed solutions with optimized energy efficiency and system cost.

這些解決方案均利用我們 30 年代的核心技術和獨特的以客戶為中心的設計方法。因此，Credo 提供了具有優化能源效率和系統成本的特定應用的高速解決方案。

And our advantage expands as the market moves to 100-gig per lane speeds. Within the data center market today, we've seen a dramatically increasing demand for higher bandwidth, higher density and more energy-efficient networking.

隨著市場達到每個通道 100G 的速度，我們的優勢不斷擴大。在當今的資料中心市場中，我們看到對更高頻寬、更高密度和更節能網路的需求急劇增長。

This demand is driven by the proliferation of generative AI applications. For the past several years, Credo has been collaborating with our customers on leading edge AI platforms that are now in various stages of ramping production in fact, the majority of Credo revenue will be driven by AI applications for the foreseeable future.

這項需求是由生成型人工智慧應用程式的激增所推動的。在過去的幾年裡，Credo 一直在領先的人工智慧平台上與我們的客戶合作，這些平台目前正處於不同的生產階段。事實上，在可預見的未來，Credo 的大部分收入將由人工智慧應用程式驅動。

Now I'll review our overall business in more detail. First, I'll discuss our optical business I'm pleased with the traction we've been gaining in this market. In the quarter we continued shipping to multiple global hyperscale and customers, and we're making progress in positioning Credo to add additional hyperscale and customers in the upcoming quarters, targeting 400-gig and 800-gig applications.

現在我將更詳細地回顧我們的整體業務。首先，我將討論我們的光學業務，我對我們在這個市場上獲得的吸引力感到滿意。本季度，我們繼續向多個全球超大規模和客戶發貨，並且我們在定位 Credo 方面取得了進展，以在未來幾個季度增加更多超大規模和客戶，目標是 400 G 和 800 G 應用。

Credo also has optical design (inaudible) in various stages with module customers and networking OEMs for the Fibre Channel market and with service providers for 5G infrastructure deployments. Credo plays a disruptive role in optical DSP market. Our fundamental series technology is leveraged to provide a compelling combination of performance, energy efficiency and system costs.

Credo 也與光纖通道市場的模組客戶和網路 OEM 以及 5G 基礎設施部署的服務供應商進行不同階段的光學設計（聽不清楚）。 Credo 在光學 DSP 市場中發揮顛覆性作用。我們的基礎系列技術被用來提供令人信服的性能、能源效率和系統成本的組合。

Additionally, we focus on solving our customers' problems and market challenges through engineering innovation. T the OFC optical conference in March of this year, there was an important call to action to address the unsustainable power and cost increases for optical modules in the 800-gig and 1.6 T generations.

此外，我們專注於透過工程創新解決客戶的問題和市場挑戰。在今年 3 月舉行的 OFC 光學會議上，有一個重要呼籲採取行動，解決 800 Gig 和 1.6 T 代光學模組不可持續的功率和成本增加問題。

Much industry discussion has ensued this year, especially related to the possibility of the Linear Pluggable Optics architecture or LPO also sometimes referred to as linear direct drive. The LPO architecture is based on eliminating all optical DSP functionality. The industry has widely concluded that the LPO architecture will not be feasible for a material percentage of the optical module market and a DSP functionality is critical to maintaining industry standards and interoperability as well as achieving the bit error rate performance necessary for high yields in volume production.

今年出現了許多行業討論，特別是與線性可插拔光學架構或 LPO（有時也稱為線性直接驅動）的可能性相關的討論。 LPO 架構是基於消除所有光學 DSP 功能。業界普遍得出這樣的結論：LPO 架構對於光模組市場的實質比例來說是不可行的，而DSP 功能對於維持行業標準和互通性以及實現批量生產高產量所需的誤碼率性能至關重要。

However, this does not mean that the industry call to action will be unanswered. Credo's response following OFC was to look at innovative ways to drastically reduce DSP power and subsequently cost through architectural innovation. Today Credo issued a press release introducing our Linear Receive Optical or LRODSPs.

然而，這並不意味著業界的行動呼籲不會得到回應。 Credo 在 OFC 後的回應是尋找創新方法，透過架構創新大幅降低 DSP 功耗和隨後的成本。今天，Credo 發布了一份新聞稿，介紹我們的線性接收光纖或 LRODSP。

Our LRODSP products provide optimized DSP capability in the optical transmit path only and eliminate the DSP functionality in the optical receive path. This innovative architecture is optimized by Credo effectively reduces the optical DSP power by up to 50% and at the same time lowers costs by eliminating unneeded circuitry.

我們的 LRODSP 產品僅在光傳輸路徑中提供最佳化的 DSP 功能，並消除光接收路徑中的 DSP 功能。這種創新架構經過 Credo 優化，有效地將光學 DSP 功耗降低了 50%，同時透過消除不必要的電路來降低成本。

Our LRO products address the pitfalls of the LPO architecture by maintaining standards and enabling interoperability among many components of an optical system and the DSP functionality maintains the equalization performance that's critical to high yields and volume production.

我們的 LRO 產品透過維持標準並實現光學系統許多元件之間的互通性來解決 LPO 架構的缺陷，而 DSP 功能則維持對高產量和批量生產至關重要的均衡性能。

We've already shipped our Dove 850, 800-gig LRODSP device and evaluation boards to our lead optical and hyperscale end customers for their development and testing. Well any revenue ramp will be a ways out, I view this innovation as the latest example of Credo pioneering a new product category that directly addresses the energy and system cost challenges faced by the hyperscalers, especially for AI deployments.

我們已經將 Dove 850、800-gig LRODSP 設備和評估板運送給我們的領先光學和超大規模最終客戶，以供他們開發和測試。好吧，任何收入成長都將是一條出路，我認為這項創新是 Credo 開創新產品類別的最新例子，該類別直接解決超大規模企業面臨的能源和系統成本挑戰，尤其是人工智慧部署。

Regarding our AEC solutions. Credo continues to be an AEC market leader. While our initial success in our AEC business has been connecting front end data center networks for general compute and AI appliances, we have seen an expansion in our AEC opportunity in the back end networks that are fundamental to AI cluster deployments.

關於我們的 AEC 解決方案。 Credo 仍然是 AEC 市場的領導者。雖然我們在 AEC 業務中最初的成功是連接通用運算和 AI 設備的前端資料中心網絡，但我們已經看到 AEC 機會在後端網路中擴展，這對於 AI 叢集部署至關重要。

Due to the sheer bandwidth required by back end networks, an acceleration in single link speeds and networking density is driving the need for AECs, given the significant benefits compared to both passive copper cables into Active Optical Cables or AOCs for indirect connectivity. We continue to make progress with our first two hyperscale customers for both front-end and back-end networks.

由於後端網路需要龐大的頻寬，單鏈路速度和網路密度的加速推動了對 AEC 的需求，因為與用於間接連接的主動光纜或 AOC 相比，被動銅纜具有顯著優勢。我們繼續與前兩個超大規模客戶一起在前端和後端網路方面取得進展。

And we're especially encouraged to see Credo AECs prominently featured in the leading edge deployments introduced at their respective conferences in November. Years in the making, we continue to maintain strong and close working relationships with our customers. And I'm pleased to say that in Q2, we made our initial shipments of 800-gig production, AECs an industry first, and again, we've demonstrated our market leadership.

我們特別高興地看到 Credo AEC 在 11 月各自的會議上推出的前沿部署中佔據顯著位置。多年來，我們繼續與客戶保持牢固而密切的合作關係。我很高興地說，在第二季度，我們首次交付了 800 台演出，AEC 處於行業第一，我們再次證明了我們的市場領導地位。

We also continue to expand our hyperscale customer base with [one in call] with 400-gig AEC solutions and another in development with 800-gig AEC solutions. Additionally, we've seen the increased need for 400-gig and 800-gig AECs among tier two data center operators and service providers. As a group, these customers contribute meaningful revenue to Credo.

我們也繼續擴大我們的超大規模客戶群，其中一個採用 400g AEC 解決方案，另一個正在開發中，採用 800g AEC 解決方案。此外，我們還發現二級資料中心營運商和服務提供者對 400 G 和 800 G AEC 的需求不斷增加。作為一個整體，這些客戶為 Credo 貢獻了可觀的收入。

Also highlight one of Credo's announcements at the recent open compute conference in October, Credo announced the P3, Pluggable Patch Panel system, a multi tool that enables service providers and hyperscalers.

也要強調Credo 在10 月最近舉行的開放式運算會議上發布的一項公告，Credo 發布了P3（可插拔配線架系統），這是一種為服務提供者和超大規模提供者提供支援的多功能工具。

The Freedom by using the P3 and AECs to decouple pluggable optics from core switching and routing hardware. The combination of the P3 and AECs enabled network architects to optimize for power distribution and system costs as well as to bridge varying speeds between switching and optical ports. We are engaged with several customers and believe the efforts will result in meaningful revenue in the future.

Freedom 透過使用 P3 和 AEC 將可插拔光學元件與核心交換和路由硬體解耦。 P3 和 AEC 的結合使網路架構師能夠優化配電和系統成本，並在交換和光端口之間橋接不同的速度。我們正在與多家客戶合作，相信這些努力將在未來帶來可觀的收入。

To sum up we remain confident that the increasing demand for greater networking bandwidth driven by AI applications, combined with the extraordinary value proposition of our AEC solutions, will drive continued AEC market expansion.

總而言之，我們仍然相信，人工智慧應用驅動的對更大網路頻寬的需求不斷增長，加上我們的 AEC 解決方案的非凡價值主張，將推動 AEC 市場的持續擴張。

Now regarding our Line Card PHY business. Credo is an established market leader with our Line Card PHY solutions, which include retimers, gearboxes and MACsec PHY for data encryption. Our overall value proposition becomes even more compelling as the market is now accelerating to 100-gig per lane deployments.

現在談談我們的線路卡 PHY 業務。 Credo 憑藉我們的線路卡 PHY 解決方案成為市場領導者，其中包括重定時器、變速箱和用於資料加密的 MACsec PHY。隨著市場現在加速到每通道 100 千兆部署，我們的整體價值主張變得更加引人注目。

According to our customer base, Credo's competitive advantage in this market segment derives from the common thread across all of our product lines, which is leading performance and signal integrity that is optimized for energy efficiency and system cost. We're building momentum and winning design commitments for our Screaming Eagle 1.6 T PHYs and for our customer sponsored next generation 1.6 T MACsec PHY.

根據我們的客戶群的說法，Credo 在該細分市場的競爭優勢源自於我們所有產品線的共同點，即領先的效能和訊號完整性，並針對能源效率和系統成本進行了最佳化。我們正在為 Screaming Eagle 1.6 T PHY 和客戶贊助的下一代 1.6 T MACsec PHY 積蓄動力並贏得設計承諾。

We remain excited about the prospects for this business with networking OEMs and hyperscale customers. Regarding our SerDes IP licensing and SerDes chiplet businesses. Credo's SerDes IP licensing business remains a strategically important part of our business. We have a complete portfolio of SerDes IP solutions that span a range of speeds, reach distances and applications with process nodes from 28 nanometer to 4 nanometer and our initial three nanometer SerDes IP for 112-gig and 224-gig is in fab now.

我們對網路原始設備製造商和超大規模客戶的這項業務前景仍然感到興奮。關於我們的 SerDes IP 授權和 SerDes 小晶片業務。 Credo 的 SerDes IP 授權業務仍然是我們業務的策略重要組成部分。我們擁有完整的 SerDes IP 解決方案組合，涵蓋各種速度、傳輸距離和應用，製程節點從 28 奈米到 4 奈米，我們最初的 112 吉和 224 吉的三奈米 SerDes IP 現已投入生產。

During Q2, we secured several licensing [wins] across networking and data center applications. Our wins include new and recurring customers, a testament to our team's execution in contributing to our customers' success.

在第二季度，我們在網路和資料中心應用程式方面獲得了多項許可。我們的勝利包括新客戶和舊客戶，這證明了我們團隊在為客戶的成功做出貢獻方面的執行力。

We're also enthusiastic about the prospects for our chiplet solutions. During Q2, we secured a next-generation 112-gig four nanometer SerDes chiplet win that includes customer sponsorship. Credo is aligned with industry expectations that chiplets will play an important role in the highest-performance designs in the future.

我們對小晶片解決方案的前景也充滿熱情。在第二季度，我們贏得了下一代 112-g 4 奈米 SerDes 小晶片的勝利，其中包括客戶贊助。 Credo 符合業界的預期，即小晶片將在未來最高性能的設計中發揮重要作用。

In conclusion, Credo delivered strong fiscal Q2 results. We remain enthusiastic about our business given the market demand for dramatically increasing bandwidth. This plays directly to Credo strengths, and we're one of the few companies that can provide the necessary breadth of connectivity solutions at the highest speeds while also optimizing for energy efficiency and system cost.

總之，Credo 交付了強勁的第二季財報。鑑於市場對頻寬大幅增加的需求，我們仍然對我們的業務充滿熱情。這直接發揮了 Credo 的優勢，我們是少數能夠以最高速度提供必要的連接解決方案，同時優化能源效率和系統成本的公司之一。

As we embark on second half fiscal '24, we expect continued growth that supports a more diversified customer base across a diversified range of connectivity solutions.

隨著我們進入 24 財年下半年，我們預計持續成長將透過多元化的連接解決方案支持更多元的客戶群。

Lastly, I'm pleased to announce that yesterday Credo published our first ESG report, which can be found on our website as reiterated several times today in my comments, energy efficiency is built into our DNA and is a key part of our report.

最後，我很高興地宣布，昨天Credo 發布了我們的第一份ESG 報告，該報告可以在我們的網站上找到，今天我在評論中多次重申，能源效率已融入我們的DNA，是我們報告的關鍵部分。

We aspire to be leaders across the ESG spectrum, and we strive to help enable our customers to be leaders as well. I'm very pleased with how Credo is pursuing our goals, and we look forward to continuing our positive ESG efforts. At this time, Dan Fleming, our CFO, will provide additional financial details. Thank you.

我們渴望成為 ESG 領域的領導者，並努力幫助我們的客戶成為領導者。我對 Credo 追求我們目標的方式感到非常滿意，我們期待繼續積極的 ESG 努力。目前，我們的財務長 Dan Fleming 將提供更多財務詳細資訊。謝謝。

Thank you, Bill, and good afternoon. I will first review our Q2 results and then discuss our outlook for Q3 of fiscal '24. As a reminder, the following financials will be discussed on a non-GAAP basis unless otherwise noted. In Q2, we reported revenue of $44 million, up 25% sequentially and down 14% year over year. Our IP business generated $7.4 million of revenue in Q2, up 165% sequentially and up 125% year over year.

謝謝你，比爾，下午好。我將首先回顧我們第二季的業績，然後討論我們對 24 財年第三季的展望。提醒一下，除非另有說明，否則以下財務數據將在非公認會計原則的基礎上進行討論。第二季度，我們報告營收為 4,400 萬美元，季增 25%，年減 14%。我們的 IP 業務在第二季創造了 740 萬美元的收入，季增 165%，年增 125%。

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 or new contracts. While the mix of IP and product revenue will vary in any given quarter over time, our revenue mix in Q2 was 17% IP above our long-term expectation for IP, which is 10% to 15% of revenue.

知識產權仍然是我們業務的策略部分。但需要提醒的是，我們的智慧財產權結果可能會因季度而異，這主要是由現有或新合約的具體交付成果所驅動的。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，但我們第二季度的收入組合比我們對IP的長期預期高出17%，即佔收入的10%至15%。

We expect IP as a percentage of revenue to be within our long-term expectations for fiscal '24. Our product business generated $36.7 million of revenue in Q2, up 13% sequentially and down 24% year over year. Our top three end customers were each greater than 10% of our revenue in Q2. In fact, our top four end customers each represented a different product line, which illustrates the increasing diversity of our revenue base.

我們預計知識產權佔收入的百分比將在我們對 24 財年的長期預期之內。我們的產品業務在第二季創造了 3,670 萬美元的收入，季增 13%，年減 24%。我們的前三大最終客戶均占我們第二季營收的 10% 以上。事實上，我們的四大最終客戶各自代表不同的產品線，這顯示我們的收入基礎日益多樣化。

Our team delivered Q2 gross margin of 59.9% at the high end of our guidance range and up 10 basis points sequentially. Our IP gross margin generally hovers near 100% and was 95.6% in Q2. Our product gross margin was 52.7% in the quarter, down 405 basis points sequentially due to product mix and some minor inventory related items and up 39 basis points year over year.

我們團隊的第二季毛利率為 59.9%，處於我們指引範圍的高端，比上一季上升 10 個基點。我們的IP毛利率整體徘徊在100%附近，第二季為95.6%。本季我們的產品毛利率為 52.7%，由於產品結構和一些次要庫存相關項目，較上季下降 405 個基點，較去年同期成長 39 個基點。

Total operating expenses in the second quarter were $27.1 million at the low end of our guidance range, down 1% sequentially and up 9% year over year. Our year-over-year OpEx increase was a result of an 11% increase in R&D as we continue to invest in the resources to deliver innovative solutions. Our SG&A was up 5% year over year.

第二季總營運費用為 2,710 萬美元，處於我們指引範圍的下限，季減 1%，年增 9%。我們的營運支出較去年同期成長是由於我們不斷投資資源以提供創新解決方案，研發費用增加了 11%。我們的 SG&A 年成長 5%。

Our operating loss was $731,000 in Q2 compared to operating income of $3.2 million a year ago. The second quarter operating loss represented a sequential improvement of $5.7 million. Our operating margin was negative 1.7% in the quarter compared to positive 6.1% last year due to reduced top-line leverage.

第二季我們的營業虧損為 731,000 美元，而一年前的營業收入為 320 萬美元。第二季營業虧損較上一季減少 570 萬美元。由於營收槓桿率下降，本季我們的營業利潤率為負 1.7%，而去年為正 6.1%。

We reported net income of $1.2 million in Q2 compared to net income of $2.2 million last year. Cash flow from operations in the second quarter was $5 million, an increase of $3.3 million year over year due largely to a net reduction of inventory of $5 million in the quarter. CapEx was $2 million in the quarter, driven by R&D equipment spending and free cash flow was $3 million, an increase of $6.9 million year over year.

我們報告第二季淨利潤為 120 萬美元，而去年淨利潤為 220 萬美元。第二季營運現金流為 500 萬美元，年增 330 萬美元，主要是因為本季庫存淨減少 500 萬美元。在研發設備支出的推動下，本季資本支出為 200 萬美元，自由現金流為 300 萬美元，較去年同期增加 690 萬美元。

We ended the quarter with cash and equivalents of $240.5 million, an increase of $2.9 million from the first quarter. We remain well capitalized to continue investing in our growth opportunities while maintaining a substantial cash buffer. Our accounts receivable balance increased 17% sequentially to $32.7 million, while days sales outstanding decreased to 68 days down from 73 days in Q1. Our Q2 ending inventory was $35.8 million, down $5 million sequentially.

本季末，我們的現金及等價物為 2.405 億美元，比第一季增加 290 萬美元。我們仍然擁有充足的資本，可以繼續投資於我們的成長機會，同時保持大量的現金緩衝。我們的應收帳款餘額較上季成長 17%，達到 3,270 萬美元，而應收帳款天數從第一季的 73 天減少到 68 天。我們第二季期末庫存為 3,580 萬美元，比上一季減少 500 萬美元。

Now turning to our guidance. We currently expect revenue in Q3 of fiscal '24 to be between $51 million and $53 million, up 18% sequentially at the midpoint. We expect Q3 gross margin to be within a range of 59% to 61%. We expect Q3 operating expenses to be between $28 million and $30 million, and we expect Q3 diluted weighted average share count to be approximately 166 million shares.

現在轉向我們的指導。我們目前預計 24 財年第三季的營收將在 5,100 萬美元至 5,300 萬美元之間，比中位數連續成長 18%。我們預計第三季毛利率將在 59% 至 61% 之間。我們預計第三季營運費用將在 2,800 萬美元至 3,000 萬美元之間，我們預計第三季攤薄加權平均股數約為 1.66 億股。

We are pleased to see fiscal year '24 continued to play out as expected. While we see some near term upside to our prior expectations. The rapid shift to AI workloads has driven new and broad-based customer engagement.

我們很高興看到 24 財年繼續按預期進行。雖然我們看到短期內比我們之前的預期有一些上行。人工智慧工作負載的快速轉變推動了新的、廣泛的客戶參與。

We expect that this rapid shift will enable us to diversify our revenue throughout fiscal year '24 and beyond. As Bill alluded to. However, as new programs on new and existing customers ramp, we remain conservative with regard to the upcoming quarters as we continue to gain better visibility into forecasts at our ramping customers.

我們預計，這種快速轉變將使我們能夠在整個 24 財年及以後實現收入多元化。正如比爾所提到的。然而，隨著針對新客戶和現有客戶的新計劃的增加，我們對未來幾季仍持保守態度，因為我們將繼續更好地了解不斷增加的客戶的預測。

In summary, as we move forward through fiscal year '24, we expect sequential revenue growth, expanding gross margins due to increasing scale and improving product mix and modest sequential growth in operating expenses. As a result, we look forward to driving operating leverage in the coming quarters. And with that, I will open it up for questions.

總之，隨著我們進入 24 財年，我們預計收入將環比增長，由於規模擴大和產品組合改善以及營運費用環比溫和增長，毛利率會擴大。因此，我們期待在未來幾季提高營運槓桿。接下來，我將開放提問。

(Operator Instructions)

（操作員說明）

Toshiya Hari, Goldman Sachs.

Toshiya Hari，高盛。

Hi, good afternoon. Thank you so much for the question. I had two questions. First, one on the revenue outlook. I just wanted to clarify, Dan, I think you mentioned sequential growth throughout the fiscal year. So April, I'm assuming is up sequentially. I guess that's the first part.

嗨，下午好。非常感謝你的提問。我有兩個問題。首先，關於收入前景。我只是想澄清一下，丹，我認為您提到了整個財年的連續增長。所以四月，我假設是依序增加的。我想這是第一部分。

And then the second part, as you think about calendar '24, Bill, you gave quite a bit of color by product line on a high level. The outlook sounds pretty constructive across AEC and your optical business and I guess your securities business as well. But if you can tried to quantify the growth that you're expecting into calendar '24 and what the top three key drivers are that would be helpful.

然後是第二部分，當你想到 24 日曆時，比爾，你在高水平上按產品線提供了相當多的色彩。 AEC 和你們的光學業務以及我想你們的證券業務的前景聽起來相當有建設性。但如果您可以嘗試量化 24 年曆中的成長預期以及三大關鍵驅動因素是什麼，那將會有所幫助。

Thank you.

謝謝。

Yes.

是的。

So, with regard to fiscal '24, on your first question, generally speaking, we're very pleased with our quarterly sequential growth this year. And as we stated in our prepared remarks now, our Q3 guide was at the midpoint up 18%, $52 million at the midpoint. But as we stated on our call previously, we expect modest top-line growth fiscal year '23 to '24. So the key takeaway there is no change in our overall expectation for fiscal year '24.

因此，關於 24 財年，關於你的第一個問題，總的來說，我們對今年的季度連續成長感到非常滿意。正如我們在現在準備好的評論中所說，我們的第三季指南處於中點，成長了 18%，即 5,200 萬美元。但正如我們之前在電話會議中所說，我們預計 23 至 24 財年的營收將出現溫和成長。因此，關鍵的一點是我們對 24 財年的整體預期沒有改變。

And for the second question, I would just reiterate what Dan has said. As we look at our fiscal '24, it's playing out very much like we expected. So really no change there. We expect, I think what should be considered fast sequential growth, and it's been driven by multiple factors AECs optical chiplets really, and we're firing on all cylinders.

對於第二個問題，我只想重申一下丹所說的內容。當我們回顧 24 財年時，情況非常符合我們的預期。所以確實沒有任何改變。我們預計，我認為應該考慮快速連續成長，它實際上是由 AEC 光學小晶片的多個因素驅動的，我們正在全力以赴。

And Bill. So sorry, if I wasn't clear, calendar '24 or fiscal '25, I realize it's early and you've got many moving parts. But based on customer engagements, all the color you provided across product lines, how are you thinking about the overall business into next year, if you could --

還有比爾。很抱歉，如果我沒說清楚，是 24 年曆還是 25 財年，我意識到現在還為時過早，而且還有很多變動的部分。但根據客戶參與度、您在產品線中提供的所有顏色，您如何考慮明年的整體業務，如果可以的話——

So (multiple speakers) we're not providing any formal guidance right now at this point for fiscal year '25. However, as you can imagine, we do expect meaningful growth based on all the customer engagements that we have. And as Bill mentioned, we continue to have lots of irons in the fire. But as we've stated, it takes a long time to turn a lot of these engagements into meaningful revenue, which will happen throughout the course of the year.

因此（多位發言者）我們目前不會為 25 財年提供任何正式指導。然而，正如您可以想像的那樣，我們確實期望基於我們擁有的所有客戶參與度實現有意義的成長。正如比爾所提到的，我們仍然有很多問題需要解決。但正如我們所說，需要很長時間才能將其中的大量業務轉化為有意義的收入，這將在全年中發生。

Okay. Got it. And then as my follow-up on gross margins, as you noted in your remarks, Dan, I think your product gross margins were down sequentially in the October quarter off really high base in July, but curious what drove the sequential decline there?

好的。知道了。然後，作為我對毛利率的後續行動，正如您在演講中指出的那樣，丹，我認為您的產品毛利率在10 月份季度比7 月份的高基數連續下降，但好奇是什麼導致了連續下降？

And then as you look ahead, I think you talked about gross margins expanding over the next couple of quarters. I think you said what are the drivers there. And if you can speak to foundry costs potentially so going from a headwind to something more neutral into calendar '24? And how the diversification of your customer base helps your gross margins going forward that would be helpful. Thank you.

然後，當您展望未來時，我認為您談到了未來幾個季度毛利率的擴張。我想你說的是那裡的司機是什麼。如果你能談談代工成本可能會在24年從逆風轉向更中性的情況嗎？以及您的客戶群的多元化如何幫助您提高未來的毛利率，這將很有幫助。謝謝。

Yeah. So there was a lot to that question generally speaking. So as you correctly note, in our Q2 product gross margin was down sequentially from Q1. Which and if you recall, Q1 was up substantially 700 basis points from Q4.

是的。一般來說，這個問題有很多內容。正如您正確指出的那樣，我們第二季的產品毛利率比第一季連續下降。如果你還記得的話，第一季較第四季大幅上漲 700 個基點。

It's kind of easy to read probably too much into these movements quarter over quarter at the scale that we're at right now because there are slight product mix changes from quarter to quarter in Q2. We also had some very minor inventory related items that impacted product gross margin.

以我們目前的規模，很容易對這些逐季變化進行過度解讀，因為第二季每季的產品組合都略有變化。我們還有一些非常小的庫存相關項目影響了產品毛利率。

But the important thing or the most important thing is that there is no change to our long-term expectation our gross margin expectation over the upcoming years is to expand to the 63% to 65% range. And from fiscal '23 to '24, you're seeing that play out, although it's not quite linear from quarter to quarter, and that will continue to play out through next year as well.

但重要的是，或者說最重要的是，我們的長期預期沒有改變，我們未來幾年的毛利率預期將擴大到 63% 至 65% 的範圍。從 23 財年到 24 財年，您會看到這種情況的發生，儘管每個季度之間的情況不太線性，而且這種情況也將持續到明年。

Thank you.

謝謝。

Tom O'Malley, Barclays.

湯姆·奧馬利，巴克萊銀行。

Hey, guys, good afternoon and thanks for taking my question. I just wanted to clarify something you said on the call you guys have talked previously about two customers that you're ramping with AEC. You talked about one customer in qualification with 400G and one in development with 800G. I just want to make sure you're still referring to processes that you've talked about before, are those new developments that you guys are talking about? Thank you.

嘿，夥計們，下午好，感謝您提出我的問題。我只是想澄清一下你們之前在電話中所說的關於你們正在與 AEC 合作的兩個客戶的事情。您談到一位客戶正在使用 400G 進行資格認證，另一位客戶正在開發中使用 800G。我只是想確保您仍然指的是您之前討論過的流程，你們正在談論的這些是新的發展嗎？謝謝。

I think we've alluded to those developments in the past, but I think these are additional hyperscale customers. So the first two that we've got November was kind of a big month. Both of them had shown the Microsoft Ignite really prominently displayed their [Maia] AI appliance and rack and you can see the Credo AECs prominently, you have displays as part of part of that rack.

我認為我們過去已經提到過這些發展，但我認為這些是額外的超大規模客戶。因此，11 月的前兩個月是一個重要的月份。他們兩人都展示了 Microsoft Ignite 確實顯著地展示了他們的 [Maia] AI 設備和機架，您可以顯著地看到 Credo AEC，顯示器是該機架的一部分。

So that's really something we've messaged in the past. And now it's been publicly announced and shown and also Amazon is having to Reinvent conference right now as we speak. And if you look at the demos on the show floor, you'll see our 50-gig and 100-gig per lane products as part of those demonstrations.

這確實是我們過去傳達過的訊息。現在它已經被公開宣布和展示，就在我們說話的時候，亞馬遜也必須召開重塑會議。如果您觀看展廳上的演示，您會發現我們的每通道 50 Gb 和 100 Gb 的產品是這些演示的一部分。

And so the two additional one we're in [call] with and we're expecting qualification to be completed sometime in the upcoming quarter, maybe give or take a month or so. And then the other one is more of a long term plan as we're putting together an 800-gig customer specific solution for another hyperscaler.

因此，我們正在[通話]的另外兩個項目，我們預計資格認證將在下個季度的某個時候完成，可能需要一個月左右的時間。另一個則更像是長期計劃，因為我們正在為另一個超大規模提供者整合 800 GB 客戶特定解決方案。

Super helpful.

超有幫助。

And then just on the optical side, you guys had previously talked about a new 400G customers. The upside in the near term, the beginning of that ramp or are you just seeing additional traction from customers you've talked about in the past.

然後就光學方面而言，你們之前談到了新的 400G 客戶。短期內的好處是，成長的開始，或者您只是看到來自您過去談到的客戶的額外吸引力。

I know that you had there was some Chinese customers that you were looking to get back in the [rev runway]. Can you just help me understand where the strength you're seeing in the optical DSPs that has come from?

我知道你們希望讓一些中國客戶重返[rev跑道]。您能否幫我了解一下您所看到的光學 DSP 的優勢來自何處？

Yeah. So generally, we continue to ramp with the partner that we're engaged with serving the US hyperscaler so that ramp is going to happen for the next several quarters. We're also seeing further signs of life in our customer base in China.

是的。因此，總的來說，我們會繼續與我們為美國超大規模企業提供服務的合作夥伴一起進行提升，以便在接下來的幾個季度內實現提升。我們也看到中國客戶群出現了進一步的活力跡象。

And so we've actually we've got demand that we're seeing from three or four hyperscalers in China. As far as the new US hyperscaler that we've talked about, really that is not baked into any of the numbers that we've talked about. And so that would be if we can ultimately close that we expect that will impact revenues in that in the fiscal '25 timeframe.

因此，我們實際上已經看到中國三、四個超大規模企業的需求。就我們所討論的新的美國超大規模企業而言，實際上這並沒有納入我們所討論的任何數字中。因此，如果我們最終能夠完成，我們預計這將影響 25 財年時間範圍內的收入。

Thank you.

謝謝。

Tore Svanberg of Stifel.

Stifel 的 Tore Svanberg。

Please make sure your line is unmuted and if you're in a speakerphone, lift the handset.

請確保您的線路未靜音，如果您使用免持電話，請拿起聽筒。

Yes. Can you hear me,

是的。你聽得到我嗎，

Yes, sir. Please proceed.

是的先生。請繼續。

Yes, sorry about that. Yeah, Bill, my first question was on the [tweener slash Halo] product that you just announced this afternoon. You did say that, this is something that should generate revenues longer term. But I think the market is also very, very hungry for lower costs near term. So, what kind of timeframe are we looking at here as far as when that product could be in production?

是的，對此感到抱歉。是的，比爾，我的第一個問題是關於您今天下午剛剛宣布的[tweener斜線光環]產品。你確實說過，從長遠來看，這應該會產生收入。但我認為市場也非常非常渴望短期內降低成本。那麼，就該產品何時可以投入生產而言，我們在這裡考慮的時間範圍是怎樣的？

So I think that that the first message is that we've shipped samples that are going to be built into modules. We ship eval boards that are going to be thoroughly tested by our lead hyperscale customer. And so [T0] is really now. And so the typical development time for an optical module is on the order of 12 months to get to production.

所以我認為第一條訊息是我們已經交付了將內建到模組中的範例。我們出貨的評估板將由我們的領先超大規模客戶進行徹底測試。所以[T0]確實是現在。因此，光學模組的典型開發時間約為 12 個月才能投入生產。

And that's really based on building and qualifying the module and then going through qualification with the hyperscale end customer. And so as we look at kind of best case scenario, we're talking about something on the order of 12 months from now, so could impact our fiscal '25.

這實際上是基於建置和驗證模組，然後透過超大規模最終客戶的驗證。因此，當我們考慮最好的情況時，我們正在談論從現在起 12 個月內發生的事情，因此可能會影響我們的 25 財年。

That's very helpful. And as my follow up, I know the first half of the year there was still some headwinds, obviously from your largest customer inventory digestion on the compute side. I'm just wondering, is that now as we look at the January quarter, is that headwind completely behind you? Or is there still some lingering effects there?

這非常有幫助。作為我的後續行動，我知道今年上半年仍然存在一些阻力，顯然來自計算方面最大的客戶庫存消化。我只是想知道，現在我們來看看一月的季度，這種逆風是否已經完全過去了？還是仍然存在一些揮之不去的影響？

Well, I think as we think about the front end networks at this lead customer of ours, the application is general compute as well as AI. And so of course, there's both of these applications are kind of contributing to the digestion of the inventory that was built up as a result of the pivot earlier in the year. And so as we look at fiscal '24, I think we've got good visibility and exactly when it turns back on, I think we're still being conservative in a sense that we've got to wait for that to really develop in our fiscal '25.

嗯，我認為當我們考慮我們這個主要客戶的前端網路時，該應用程式是通用計算和人工智慧。當然，這兩種應用程式都有助於消化今年稍早因轉型而累積的庫存。因此，當我們審視24 財年時，我認為我們已經獲得了良好的能見度，並且確切地說，當它重新啟動時，我認為我們在某種意義上仍然是保守的，我們必須等待它真正發展起來。我們的財政'25。

Great. Thank you very much.

偉大的。非常感謝。

Thanks, Tore.

謝謝，托雷。

Thank you.

謝謝。

Karl Ackerman, BNP Paribas.

卡爾‧阿克曼，法國巴黎銀行。

Thank you, gentlemen. Two questions, if I may. The first question is a follow-up from a previous one. But you are introducing AOC solutions today to address both DSP-based and non DSP-based optical links. How do you see the adoption of non DSP-based solutions for back-end network connections in calendar '24 and as you address that question, I guess why not introduce an AEC solution for back-end networks?

謝謝你們，先生們。如果可以的話，有兩個問題。第一個問題是前一個問題的後續問題。但您今天推出的 AOC 解決方案可同時解決基於 DSP 和非 DSP 的光鏈路問題。您如何看待 24 世紀後端網路連線採用非基於 DSP 的解決方案？當您解決這個問題時，我想為什麼不為後端網路引入 AEC 解決方案？

Let me take the first part of that question, really the two solutions that we've got for optical are what we might call a full DSP, which is kind of the traditional approach where there's a DSP on the transmit path as well as the receive path on a given optical link. That activity is going to continue. The product that we really announced today was eliminating the DSP on the receive path and having it on the transmit path only.

讓我來回答這個問題的第一部分，實際上，我們為光纖提供的兩種解決方案可以稱為完整的 DSP，這是一種傳統方法，在傳輸路徑和接收路徑上都有 DSP給定光鏈路上的路徑。這項活動將會繼續下去。我們今天真正發布的產品消除了接收路徑上的 DSP，而僅將其放在發送路徑上。

And so you might say that would be about half of the DSP on a typical optical link. And so those are really the two solutions that we're promoting. We believe that completely eliminating the DSP is really not something that's going to play out in a big way.

因此您可能會說這大約是典型光鏈路上 DSP 的一半。這些確實是我們正在推廣的兩種解決方案。我們相信，完全消除 DSP 確實不會產生重大影響。

Analysts have been upfront saying that they don't see it ever being more than 10% of the market if it achieves that level. So you'd have to have a very tight control over the entire link to be able to manage that. And that's just not the typical scenario in the market today. Typically, people are putting together various solutions and interoperability is really the key as well as troubleshooting and ultimately yielding in production.

分析師一直坦言，如果達到這一水平，他們認為它的市場份額永遠不會超過 10%。因此，您必須對整個連結進行非常嚴格的控制才能對其進行管理。這並不是當今市場上的典型情況。通常，人們會將各種解決方案組合在一起，而互通性以及故障排除和最終在生產中的產出確實是關鍵。

Second part of your question was regarding AECs, and we are absolutely building AECs for back-end networks and the AECs are really covering in rack three (inaudible) or less solutions. There are also rack to rack connections. And those are all optical connections, whether they're AOCs or transceivers. And especially in that situation for rack to rack connectivity within a cluster. That's where we really believe that the LRODSP is going to be highly applicable and really quite valuable to customers.

您問題的第二部分是關於 AEC，我們絕對是在為後端網路建立 AEC，並且 AEC 確實覆蓋了三個機架（聽不清楚）或更少的解決方案。還有機架到機架連接。這些都是光纖連接，無論是 AOC 還是收發器。尤其是在集群內機架到機架連接的情況下。這就是我們真正相信 LRODSP 將具有高度適用性並且對客戶非常有價值的地方。

Thanks for that. For my follow-up, I wanted to pivot to your IP business. This is primarily tied to data center today at least a data center focused application but over time, the idea is that as PAM 3 ramps, it will transition more toward consumer. How do you expect the end market mix of your IP business transitioning to consumer over the next few quarters? Thank you.

感謝那。對於我的後續行動，我想轉向你們的智慧財產權業務。如今，這主要與資料中心相關，至少是一個以資料中心為中心的應用程序，但隨著時間的推移，隨著 PAM 3 的發展，它將更多地轉向消費者。您預計未來幾季向消費者過渡的 IP 業務的終端市場組合如何？謝謝。

And so as we look at our IP business, primarily today, it's Ethernet. We've talked about one large consumer license that we've been engaged on for consumer and that's moving to 40-gig PAM 3 for the CIO 80 or 80 Gigabits per second two lanes of 40-gig for that market and that market is going to be out sometime in the future, probably on the order of two to three years before that ramps production.

因此，當我們審視我們的 IP 業務時，今天主要是乙太網路。我們已經討論過我們一直在為消費者提供的一項大型消費者許可證，該許可證正在向CIO 遷移到40-g PAM 3 每秒80 或80 吉比特，為該市場提供兩條40 吉比特通道，並且該市場正在發展未來某個時候，可能會在產量增加之前的兩到三年內推出。

I don't expect it to be a big part of our IP business long term. I expect that that our Ethernet IP business will continue very strongly. And I also believe that from a PCIe perspective, we'll be able to talk about that as we bring our 64-gig and 128-gig solutions to market.

我預計它不會成為我們長期知識產權業務的重要組成部分。我預計我們的乙太網路 IP 業務將繼續強勁發展。我還相信，從 PCIe 的角度來看，當我們將 64 GB 和 128 GB 解決方案推向市場時，我們將能夠討論這個問題。

Thank you.

謝謝。

Vijay Rakesh, Mizuho.

維傑·拉克什，瑞穗。

Yeah, hey, Bill. And then just on the PPP, the Pluggable Patch Panel, is that including the AEC and are all the three customers using it? (technical difficulty)

是的，嘿，比爾。然後就 PPP（可插拔配線架）而言，是否包括 AEC？三個客戶都在使用它嗎？ （技術難度）

Yes. So you broke up a little on the line, but I'll answer the question by saying that this of this P3 was something that was developed in conjunction with a leading service provider. So they spoke about their challenges as they were connecting ZR optics to routers or switch ports.

是的。所以你在線上有點分手，但我會回答這個問題，說這個 P3 是與領先的服務提供者合作開發的。因此，他們談到了將 ZR 光學元件連接到路由器或交換器連接埠時遇到的挑戰。

And so this was really developed with them in their application in mind. Also knowing that developing this solution, it would become a multi tool in a sense to be able to solve different networking problems associated with power and cooling and control plane access. And so the our lead customer is a service provider, but we're seeing that there's also applications where this really fits well.

因此，這確實是根據他們的應用程式而開發的。我們也知道，開發此解決方案在某種意義上將成為一種多功能工具，能夠解決與電源和冷卻以及控制平面存取相關的不同網路問題。因此，我們的主要客戶是服務提供者，但我們發現也有一些應用程式非常適合這一點。

When we talk about the situation where switch and router port speeds are different from the optics speeds that a customer wants to use. So a customer could connect 800-gig ZR optics with 400-gig switch ports or vice versa, they can move to the fastest switches, 800-gig ports, but still use 400-gig ZR. So in a sense, this is P3 system can gearbox and really seamlessly connect from different speed optics with different speed ports on routers and switches.

當我們談論交換器和路由器連接埠速度與客戶想要使用的光學速度不同的情況時。因此，客戶可以將 800-gig ZR 光學器件與 400-gig 交換器端口連接，反之亦然，他們可以轉移到最快的交換器、800-gig 端口，但仍使用 400-gig ZR。所以從某種意義上說，這是 P3 系統可以變速箱，並真正從不同速度的光學元件與路由器和交換器上的不同速度連接埠無縫連接。

And also from a thermal distribution standpoint. This is a really useful tool in a sense because some customers want to use lower cost, smaller switches that lack the power and cooling envelope for advanced ZR optics. So you would have a lot of stranded ports. So in a sense, you can take that thermal management away from the switch.

從熱分佈的角度來看也是如此。從某種意義上說，這是一個非常有用的工具，因為一些客戶希望使用成本更低、尺寸更小的開關，而這些開關缺乏先進 ZR 光學元件的電源和冷卻包絡。所以你會有很多滯留的連接埠。因此，從某種意義上說，您可以將熱管理從交換器中移除。

And so there's multiple applications. We introduced this at OCP and we realized putting out a multi tool like this that basically enables optics to be connected directly with AECs as a different type of solution. We were surprised at the ideas that some of the engineers that came by our booth at the OCP were surprised at some of the great ideas that they came up with it.

所以有多種應用。我們在 OCP 上介紹了這一點，並意識到推出了這樣的多功能工具，基本上可以將光學元件與 AEC 直接連接，作為不同類型的解決方案。我們對 OCP 展位上的一些工程師對他們提出的一些偉大想法感到驚訝，這些想法讓我們感到驚訝。

So generally, when we think about this product, we think about it in terms of a combination of the P3 and AECs. So we developed the P3 to basically be a catalyst for more AEC demand.

所以一般來說，當我們考慮這個產品時，我們會考慮 P3 和 AEC 的組合。因此，我們開發 P3 基本上是為了滿足更多 AEC 需求。

Got it. And so you're in a better utilizing that as stranded costs, I guess does the P3 with the AEC actually double your content on the server to the racker?

知道了。因此，您可以更好地利用它作為滯留成本，我猜帶有 AEC 的 P3 是否實際上會使伺服器上的內容翻倍到機架上？

It's hard to say. I don't think there's a relative reference point on contact. These are new applications and with our lead customer, we think that the content can be significant. But the nice thing is this is really an application as we prove out our lead customer. This is one that many, many service providers well, we think we'll pick up.

很難說。我不認為接觸有相對的參考點。這些是新的應用程序，對於我們的主要客戶，我們認為這些內容可能很重要。但令人高興的是，這確實是一個應用程序，因為我們向我們的主要客戶證明了這一點。這是一個很多很多服務提供者都認為我們會選擇的服務。

Got it. And then the last question on your 10% customers, how many were there in the quarter? And if you were to look out, let's say, fiscal exiting calendar '25, any thoughts on how many 10% customers you think you will be working on?

知道了。然後是關於 10% 客戶的最後一個問題，本季有多少客戶？如果您要留意 25 年的財務退出日曆，您是否想過您將服務多少 10% 的客戶？

Yeah. So for Q2, we had as you'll see when our [queue] is filed, we had three 10% end customers recall last quarter, we added an additional disclosure to show end customers. So three, you'll see the largest one was 29%. And generally, we don't disclose who our 10% customers are, but obviously, the 29% one was Microsoft.

是的。因此，對於第二季度，正如您在歸檔我們的[隊列]時所看到的那樣，上個季度我們召回了三個 10% 的最終客戶，我們添加了額外的披露資訊以向最終客戶展示。如此三項，你會看到最大的一項是 29%。一般來說，我們不會透露這 10% 的客戶是誰，但顯然，29% 的客戶是微軟。

Most importantly, we continued to expand our customer base throughout the year. One of the customers, one of those three end customers is a new end customer as you'll see in our disclosure. So it's hard to answer the latter part of your question, how many will have at the end of the year. But I would guess, maybe four.

最重要的是，我們全年持續擴大客戶群。其中一位客戶，這三個最終客戶之一是新的最終客戶，正如您將在我們的披露中看到的那樣。所以很難回答你問題的後半部分，也就是今年年底會有多少人。但我猜，也許是四個。

Thank you. please stand by for our next question.

謝謝。請等待我們的下一個問題。

Suji Desilva, ROTH MKM.

蘇吉·德席爾瓦，羅斯·MKM。

Hi, Bill. Hi, Dan. My question on the competitive landscape, I'm wondering what you're seeing in the chip-based AEC efforts, chip plus cable guys are competing with you are you guys able to provide a faster time to market? Is that one of the reasons you're in some of these demo racks perhaps? And then maybe you can talk about the share you might think you'd be having an AEC market versus the size? Thanks.

嗨，比爾。嗨，丹。我關於競爭格局的問題，我想知道您在基於晶片的 AEC 工作中看到了什麼，晶片加電纜公司正在與您競爭，你們能夠提供更快的上市時間嗎？這也許是您參加某些演示架的原因之一？然後也許您可以談談您認為 AEC 市場的份額與規模？謝謝。

I think we've been consistent in saying that we don't expect to maintain 100% of the AEC market. And we do see competitors as this product category becomes really more and more established as a de facto way of making short in rack connections. We do see more competitors the way that we're organized for sure, we're going to be able to deliver better time to market.

我認為我們一直一致表示，我們預計不會保持 100% 的 AEC 市場份額。我們確實看到了競爭對手，因為該產品類別確實越來越成為縮短機架連接的事實上的方式。我們確實看到了更多的競爭對手，我們的組織方式肯定會更好，我們將能夠提供更好的上市時間。

And what we're seeing is that for the high-volume applications, customers are asking for special feature, special functions. And fundamentally, we are responsible for working. I mean, our company, although we're a chip company, have built the system organization for AECs and so we're the ones that are working directly with the hyperscalers were the ones having daily conversations when crunch time comes.

我們看到的是，對於大批量應用，客戶要求特殊的功能。從根本上來說，我們對工作負責。我的意思是，我們公司雖然是一家晶片公司，但已經為 AEC 建立了系統組織，因此我們是直接與超大規模企業合作的人，是在關鍵時刻來臨時進行日常對話的人。

And so for sure, we've got a time-to-market advantage and so I think the way this will play out, I think that our market share will it ultimately play out. And I hope that's we maintain more than 50% long term. And I think that's a function of being first, that's a function of having a model that delivers a better experience with hyperscale customers directly.

因此，可以肯定的是，我們擁有上市時間優勢，因此我認為這將發揮作用，我認為我們的市場份額最終將發揮作用。我希望我們能長期維持 50% 以上。我認為這是成為第一名的功能，這是擁有一個可以直接為超大規模客戶提供更好體驗的模型的功能。

Okay. Thanks Bill.

好的。謝謝比爾。

And then the other question is on the customer base and where they are in the racks. You talked about Amazon and Microsoft demoing the racks and they seem like they're a little bit ahead of the rest of the customer base, where perhaps you can clarify that? And if so, are there other folks really close behind them or those guys have maybe a substantial technical leads trying to figure how the customers may waterfall in for you.

另一個問題是客戶群以及他們在貨架上的位置。您談到亞馬遜和微軟演示機架，他們似乎領先於其他客戶群，也許您可以澄清這一點？如果是這樣，是否還有其他人真正在他們身後，或者這些人可能擁有大量的技術領導力，試圖弄清楚客戶如何為你傾倒。

Yeah. I think from a from a timing standpoint, I would expect that the third customer would probably ramp in the upcoming two to three quarters. It takes time for these new platforms to be deployed and then a fourth customer would be following that by a number of quarters.

是的。我認為從時間的角度來看，我預計第三個客戶可能會在接下來的兩到三個季度內增加。部署這些新平台需要時間，然後第四個客戶將在幾個季度之後跟進。

So I think it's one were the first two customers, of course, the architectures that they've decided to take the market. I'm really each one of these customers is different in a sense. So I wouldn't say that they're necessarily head from a technology standpoint or it's just they've chosen to move forward more quickly than the others.

所以我認為這是前兩個客戶，當然，他們決定要佔領市場的架構。我確實從某種意義上說，這些客戶中的每一位都是不同的。所以我不會說他們一定是從技術角度來看的領先者，或者只是他們選擇比其他人更快地前進。

Thank you.

謝謝。

Richard Shannon of Craig-Hallum.

克雷格·哈勒姆的理查德·香農。

Richard, please make sure your line is unmuted and if you're in a speakerphone, lift your handset.

理查德，請確保您的線路未靜音，如果您使用免持電話，請拿起聽筒。

Can you hear me now?

你聽得到我嗎？

Yes, sir. Please proceed.

是的先生。請繼續。

All right, great. Thanks. Dan, I have a question for you on based on the comments in your prepared remarks, so I'm not sure if I caught it correctly, but I think you said you had three, 10% customers and including your next largest one, the top for all team each were supporting a different product line, if we can all guess what the first wonder if you can delineate specifically which product lines each of the next three customers were primarily purchasing?

好吧，太好了。謝謝。丹，根據您準備好的評論中的評論，我有一個問題要問您，所以我不確定我是否理解正確，但我認為您說您有3 個10% 的客戶，包括您的下一個最大的客戶，對於所有團隊來說，每個團隊都支援不同的產品線，如果我們都能猜到，您首先想知道的是，您是否可以具體描述接下來的三個客戶中的每一個主要購買哪些產品線？

Yeah, it kind of covers the broad [gamut] of our product lines actually. So obviously the largest one being Microsoft is AEC, but we've for a long time our Line Card PHY business has been strong. So you could that would be in optical DSP.

是的，它實際上涵蓋了我們產品線的廣泛範圍。顯然，最大的微軟是 AEC，但長期以來我們的線路卡 PHY 業務一直很強勁。所以你可以用光學 DSP 來實現。

We have been gaining traction there, starting with Q1 as we described last quarter. So and then our chiplet business, we described it last quarter as well. So that kind of covers a whole health of the different product lines that are materially contributing at this point in time.

正如我們上個季度所述，從第一季開始，我們一直在這方面獲得關注。那麼我們的小晶片業務，我們也在上個季度進行了描述。因此，這涵蓋了目前做出重大貢獻的不同產品線的整體健康狀況。

Okay. Since you didn't say it in your prepared remarks and have talked about in this context in the past you did say DSP was 10% and I would assume that the fourth customers that or is it there one of the 10% customers in DSP?

好的。由於您在準備好的發言中沒有提到這一點，並且過去在這方面談到過，您確實說過 DSP 佔 10%，我會假設第四個客戶是 DSP 中的 10% 客戶之一？

Yeah. I mean, you could assume it's near that if it's not at that being where it is and what we've said, we haven't changed our expectation there. We expect for next fiscal year, our target is to be at 10% or more of revenue for optical DSP. And as our first production ramp is occurring with a large hyperscaler, you might expect that we have a quarter two this year where it trips 10% based upon their build schedule.

是的。我的意思是，你可以假設它已經接近了，如果不是現在的情況以及我們所說的，我們沒有改變我們的期望。我們預計下一財年的目標是光學 DSP 佔營收的 10% 或更多。由於我們的第一次生產是在大型超大規模企業中進行的，您可能會預計今年第二季度，根據他們的構建計劃，產量將增長 10%。

Okay. All right. Fair enough. Thanks for that characterization. And I guess my second question is on product gross margins. They've got a couple of quarters. I guess somewhat it's somewhat volatile, but I think you're still kind of directionally upwards over time here.

好的。好的。很公平。感謝您的描述。我想我的第二個問題是關於產品毛利率。他們有幾個季度。我想它有點不穩定，但我認為隨著時間的推移，你仍然會向上。

Maybe specifically on the product gross margins here would chew with the growth and AECs. Is it fair to think that product line is the gross margin has continued to grow and it's been somewhat steady or is the volatility coming from that point?

也許特別是這裡的產品毛利率會影響成長和 AEC。認為產品線的毛利率持續成長並且保持一定穩定是否公平，或者波動是否來自這一點？

Yeah, it, I would expect all of our over the long term, most of our product lines will grow a bit in gross margin, really due to increasing scale. That had been a large part of our story last year, last fiscal year with the Microsoft reset, this year fluctuations in gross margin have really been more about product mix as opposed to scale.

是的，我預計從長遠來看，我們的大部分產品線的毛利率都會有所增長，這實際上是由於規模的擴大。這是我們去年故事的一個重要部分，在微軟重置的上一個財年，今年毛利率的波動實際上與產品組合有關，而不是與規模有關。

Although now that we're approaching a point where we'll be exiting the year at record levels of revenue that scale factor will come in again. So I would expect some uplift in AECs as well as kind of really across the board as we stay on target to achieve that 63% to 65% overall gross margin.

儘管現在我們即將以創紀錄的收入水平結束這一年，但規模因素將再次出現。因此，我預計 AEC 會有所提升，而且隨著我們繼續實現 63% 至 65% 的整體毛利率目標，整體毛利率也會有所提升。

Thank you.

謝謝。

Quinn Bolton, Needham & Co.

奎因·博爾頓，李約瑟公司

Thanks for taking my question. I just wanted to follow up on your comments about both Microsoft Ignite and Reinvent conference for Amazon. You talked about the Maya 100 accelerator racks. I think in there Microsoft blog there were certainly lots purple cables was great to see.

感謝您提出我的問題。我只是想跟進您對 Microsoft Ignite 和 Amazon Reinvent 會議的評論。您談到了 Maya 100 加速器機架。我認為在微軟博客中肯定有很多紫色電纜，很高興看到。

Can you give us some sense in that Maya 100 rack or are we talking about, as many as 48 multi hundred gig AECs for the back-end network as well as a number of lower speed for the front end network. And then for Reinvent is Amazon looking at similar architectures? Or can you just give us some sense of what the AEC content might look like in some of those AI racks?

您能否為我們介紹 Maya 100 機架，或者我們正在談論的後端網路有多達 48 個數百千兆 AEC，以及前端網路的一些較低速度。那麼對於 Reinvent，亞馬遜是否正在考慮類似的架構呢？或者您能否讓我們了解一下 AEC 內容在某些 AI 機架中的樣子？

Yes, on the Maya platform, I think you've got it absolutely right that the back-end network is comprised of the 800-gig or 100-gig per lane AECs, the front end network is also connected with Credo AECs, and those are lower speed.

是的，在 Maya 平台上，我認為您說得完全正確，後端網路由每通道 800-gig 或 100-gig AEC 組成，前端網路也與 Credo AEC 連接，而那些速度較低。

So you're right in terms of the number total in the rack and you can kind of visually see that when they introduced that as part of the keynote, I would say that for Amazon, they're also utilizing Credo AEC for front-end connections as well as back-end. And so I think just the nature of those two different types of networks, there's going to be some strong similarities between the architectures.

因此，就機架中的總數而言，您是正確的，您可以直觀地看到，當他們在主題演講中介紹這一點時，我想說，對於亞馬遜來說，他們也在前端使用 Credo AEC連接以及後端。因此，我認為這兩種不同類型網路的本質，架構之間會有一些很強的相似之處。

And Bill, I think in the past you had talked about some of these AI applications. And I think you're referring to the back-end network here, you might not ramp until kind of late fiscal '24 and then maybe not until fiscal '25, it sounds like at least in the Amazon sorry, in the Microsoft announcement that they may be starting to ship these racks as early as kind of early next year.

比爾，我想您過去曾談論過其中一些人工智慧應用。我認為你指的是這裡的後端網絡，你可能要到 24 財年末才會增加，然後可能要到 25 財年才增加，這聽起來至少在亞馬遜對不起，在微軟的聲明中他們最早可能會在明年初開始運送這些機架。

And so I'm kind of wondering, could you give us an update, when do you think you see volume revenue from AEC in the back end networks? Could that be over the next couple of quarters, or do you still think it may be, further out than that?

所以我有點想知道，您能否向我們提供最新情況，您認為您何時會在後端網路中看到 AEC 的批量收入？這會在接下來的幾個季度發生嗎？或者您仍然認為可能會比這更遠？

Well, I think it's playing out the way that we've thought we've expected and we've spoken about this on earlier calls that in our fiscal '24 the types of volume that or revenue that we've built into the model is really based on qualification, small pilot types of build.

嗯，我認為它正在按照我們預期的方式進行，我們在之前的電話會議上談到了這一點，在我們的 24 財年中，我們在模型中構建的數量或收入類型是真正基於資格、小型試點類型的構建。

So it's meaningful, but not necessarily what you would expect to see from a production ramp. And so as we look out into fiscal '25, we still are being somewhat conservative about when exactly these are going to ramp. And so it was nice to see all of these things talked about publicly in November.

因此，這是有意義的，但不一定是您期望從產量增加中看到的。因此，當我們展望 25 財年時，我們對於這些具體何時實現成長仍持保守態度。因此，很高興看到所有這些事情在 11 月被公開討論。

However, deploying these at a volume scale, it's a complicated thing that they've got to work through. And so when we talk about when exactly does the linear ramp start, that's when we're confident is kind of going to happen in fiscal '25, but we can't necessarily pinpoint what quarter.

然而，大規模部署這些技術是他們必須解決的一件複雜的事情。因此，當我們談論線性成長究竟何時開始時，我們有信心在 25 財年發生這種情況，但我們不一定能確定是哪個季度。

Understood.

明白了。

Thank you.

謝謝。

Tore Svanberg, Stifel.

托雷‧思文凱 (Tore Svanberg)、史蒂菲爾 (Stifel)。

Yes, I think I just had a follow-up on. So Bill, I think you've said in the past that for the AEC business with AI you looking at sort of 5 to 10 (inaudible) opportunity versus general compute? And I guess related to Quinn's question, sort of the timing of how that plays out is again that 5 to 10 primarly on the back-end side? Or are you also starting to see the contribution on the front end side of the AI clusters?

是的，我想我剛剛進行了後續行動。那麼 Bill，我想你過去曾說過，對於人工智慧的 AEC 業務，你會考慮與通用運算相比 5 到 10（聽不清楚）的機會嗎？我想與 Quinn 的問題相關的是，這種情況的發生時間又是 5 到 10 主要在後端？還是您也開始看到人工智慧叢集前端的貢獻？

Yeah. So I think generally as we talk about AI versus general compute, we're starting to think about it in terms of front end networks and back end networks. And so when we see a rack of AI appliances, of course, there's going to be a front end network that looks very similar to what we see for general compute. And so to a certain extent the way it plays out from a ratio perspective serving the frontline network is really something that's common for both general compute and AI.

是的。因此，我認為，一般來說，當我們談論人工智慧與通用運算時，我們開始從前端網路和後端網路的角度來思考它。因此，當我們看到人工智慧設備的機架時，當然會有一個前端網絡，看起來與我們所看到的通用計算非常相似。因此，在某種程度上，從服務前線網路的比率角度來看，它的表現方式對於通用運算和人工智慧來說確實是常見的。

You might see a larger number of general compute servers in a rack. So it might say the per rack front end opportunity for general compute might be a little bit larger than AI. But just generally when we think about the back end networks, the network that is really networking every GPU within a cluster, that's where we see the big increase in overall networking density.

您可能會在機架中看到大量通用計算伺服器。因此，可以說通用運算的每機架前端機會可能比人工智慧更大一些。但一般來說，當我們考慮後端網路時，也就是真正將叢集內的每個 GPU 聯網的網絡，我們會看到整體網路密度大幅增加。

And Quinn earlier talked about the idea of having 48 connections to the back-end network of 48 AECs within the plans rack that are dedicated the back-end network versus say if it's rack with eight appliances, there be eight AECs for the front end. So that's where we see in an actual plan rack, we can talking about five to six times the volume.

Quinn 早些時候談到了在計劃機架內有48 個與後端網絡的連接的想法，該網絡由48 個AEC 組成，專用於後端網絡，而如果機架中有8 個設備，則有8個AEC 用於前端。這就是我們在實際計劃機架中看到的情況，我們可以談論五到六倍的體積。

But then when we think about the switch tracks that are part of that back-end network, there's also an additional opportunity there. And that's when we can think about the overall opportunity compared to front end being 5 to 10 times the volume.

但是，當我們考慮作為後端網路一部分的開關軌道時，那裡還有一個額外的機會。那時我們可以考慮與前端相比整體機會是 5 到 10 倍的數量。

That's very helpful. And my last question, and I have to ask you this question, just given your strong SerDes IP, but as it relates to the chip at market, obviously, the CPU market is the first to embrace that, but are you starting to see the GPU market moving in the direction of GPUs as well? Or is it just way too early for that?

這非常有幫助。我的最後一個問題，我必須問你這個問題，只是考慮到你強大的SerDes IP，但由於它與市場上的晶片相關，顯然，CPU 市場是第一個接受這一點的，但你是否開始看到GPU市場也在朝GPU的方向發展嗎？還是現在還太早？

I think that this standard that Intel has been promoting the UCIe standard. I think that is going to be a big market for chiplets and that for us ties in closely with the efforts that we're making on PCIe. And so one thing I would note is that the acceleration in speeds is happening really across the board.

我認為這個標準就是Intel一直在推廣的UCIe標準。我認為這將是小晶片的一個大市場，對我們來說，這與我們在 PCIe 上所做的努力密切相關。因此，我要指出的一件事是，速度的加速確實是全面發生的。

And so we've been targeting the 64-gig PAM 4, PCI Gen 6, CXL 3 market, but I also see an acceleration for the next-generation 128-gig. And so that's very much part of what's happening with this explosion in the AI market. Is this need for faster and faster speeds.

因此，我們一直瞄準 64-g PAM 4、PCI Gen 6、CXL 3 市場，但我也看到了下一代 128-gig 的加速發展。這就是人工智慧市場爆炸性成長的一個重要原因。這是否需要越來越快的速度。

And so I think that you're going to see the same type of thing that's happened in Ethernet going to see that happened with PCIe. and at OCP this year, we had kind of a vision piece that we presented with the possibility of CXL. I've really PCIe possibly being the protocol for a back-end network connectivity as well as an expansion in front end networks. So there's really exciting things coming in the future as we see that standard accelerating.

因此，我認為您將會看到乙太網路中發生的情況與 PCIe 中發生的情況相同。在今年的 OCP 上，我們提出了一個關於 CXL 可能性的願景。我確實認為 PCIe 可能是後端網路連接以及前端網路擴展的協定。因此，隨著我們看到標準不斷加速，未來將會出現真正令人興奮的事情。

Great. Thank you so much.

偉大的。太感謝了。

Thank you.

謝謝。

There are no further questions at this time. Mr. Brennan, I turn the call back over to you.

目前沒有其他問題。布倫南先生，我將電話轉回給您。

Thank you very much for the questions. We really appreciate the participation, and we look forward to following up on the call backs.

非常感謝您的提問。我們非常感謝您的參與，並期待對回電進行跟進。

Thank you.

謝謝。

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

今天的電話會議到此結束。您現在可以斷開連線。