Penguin Solutions Inc (PENG) 2023 Q2 法說會逐字稿

Good afternoon. Thank you for attending today's SMART Global Holdings Second Quarter Fiscal 2023 Earnings Call. My name is Bethany, and I will be the moderator for today's call. (Operator Instructions). I would now like to pass the conference over to our host, Suzanne Schmidt with SMART Global. Please go ahead.

下午好。感謝您參加今天的 SMART Global Holdings 2023 財年第二季度收益電話會議。我叫 Bethany，我將擔任今天電話會議的主持人。 （操作員說明）。我現在想將會議轉交給我們的主持人 Suzanne Schmidt 和 SMART Global。請繼續。

Thank you, operator. Good afternoon, and thank you for joining us on today's earnings conference call and webcast to discuss SGH's second quarter fiscal 2023 results. On the call today are Mark Adams, Chief Executive Officer; Jack Pacheco, Chief Operating Officer; and Ken Rizvi, Chief Financial Officer. You can find the accompanying slide presentation and press release for this call on the Investor Relations section of our website.

謝謝你，運營商。下午好，感謝您參加今天的收益電話會議和網絡廣播，討論 SGH 2023 財年第二季度的業績。今天接聽電話的是首席執行官馬克·亞當斯 (Mark Adams)；首席運營官 Jack Pacheco；和首席財務官 Ken Rizvi。您可以在我們網站的投資者關係部分找到本次電話會議隨附的幻燈片演示和新聞稿。

We encourage you to go to the site throughout the quarter for the most current information on the company. I would also like to remind everyone to read the use of forward-looking statements note that is included in the press release and the earnings call presentation. Please note that certain of the statements made today may constitute forward-looking statements and that these statements are the company's present expectations and that actual events or results may differ materially.

我們鼓勵您在整個季度訪問該站點以獲取有關公司的最新信息。我還想提醒大家閱讀新聞稿和收益電話演示文稿中包含的前瞻性聲明說明。請注意，今天發表的某些聲明可能構成前瞻性聲明，這些聲明是公司目前的預期，實際事件或結果可能存在重大差異。

We will also discuss both GAAP and non-GAAP financial measures. Non-GAAP measures should not be considered in isolation from, as a substitute for or superior to our GAAP results. We encourage you to consider all measures when analyzing our performance. A reconciliation of the GAAP to non-GAAP measures is included in today's press release. And with that, let me turn the call over to Mark Adams, CEO. Mark?

我們還將討論 GAAP 和非 GAAP 財務措施。不應將非 GAAP 措施孤立於、替代或優於我們的 GAAP 結果來考慮。我們鼓勵您在分析我們的表現時考慮所有衡量標準。今天的新聞稿中包含了 GAAP 與非 GAAP 措施的調節。有了這個，讓我把電話轉給首席執行官馬克亞當斯。標記？

Thanks, Suzanne, and thank you all for joining us today. Our team at SGH delivered solid results in our second quarter of fiscal 2023, in what has been a challenging macroeconomic environment. While Ken will review the financials in more detail, I'd like to call out a few highlights that demonstrate the resilience of our business in times like these before turning to a review of each of our segments.

謝謝 Suzanne，感謝大家今天加入我們。在充滿挑戰的宏觀經濟環境中，我們在 SGH 的團隊在 2023 財年第二季度取得了可觀的業績。雖然 Ken 將更詳細地審查財務狀況，但在轉向審查我們的每個部門之前，我想提出一些亮點來證明我們業務在這樣的時代的彈性。

SGH achieved record non-GAAP gross margins of 28.9% and non-GAAP earnings per share of $0.76, which exceeded the high end of our guidance range on sales of $429 million. We generated strong cash flow from operations in excess of $100 million in the quarter and exited Q2 with a strong balance sheet, including $376 million in cash and cash equivalents. While not immune to market headwinds, SGH continues to execute well throughout the cycle.

SGH 實現了創紀錄的 28.9% 的非 GAAP 毛利率和 0.76 美元的非 GAAP 每股收益，超過了我們 4.29 億美元銷售額指導範圍的上限。我們在本季度的運營中產生了超過 1 億美元的強勁現金流，並以強勁的資產負債表退出了第二季度，其中包括 3.76 億美元的現金和現金等價物。雖然不能倖免於市場逆風，但 SGH 在整個週期中繼續表現良好。

With our deep manufacturing expertise, extensive customer relationships, disciplined operating model and strong balance sheet, I believe SGH will successfully navigate these near-term challenges. Longer term, we believe we are well positioned for growth and attractive returns as our business is tied to multiple secular tailwinds, including AI, machine learning, data analytics, 5G, enterprise storage and specialty lighting.

憑藉我們深厚的製造專業知識、廣泛的客戶關係、嚴謹的運營模式和強大的資產負債表，我相信 SGH 將成功應對這些近期挑戰。從長遠來看，我們相信我們處於增長和有吸引力的回報的有利位置，因為我們的業務與多種長期順風相關，包括人工智能、機器學習、數據分析、5G、企業存儲和專業照明。

Now let me review each of our business lines. Starting with IPS, which is comprised of our Penguin solutions and Stratus Technology brands. We design, manufacture and deploy hardware, software and services for high-performance computing, AI and high-availability applications on premise, in the cloud and at the edge. In Q2, IPS had another record quarter of sales at $222 million, which represented 52% of total SGH sales, reinforcing the transformation we are going through at SGH.

現在讓我回顧一下我們的每條業務線。從 IPS 開始，它由我們的 Penguin 解決方案和 Stratus Technology 品牌組成。我們為本地、雲端和邊緣的高性能計算、人工智能和高可用性應用程序設計、製造和部署硬件、軟件和服務。在第二季度，IPS 的季度銷售額再創新高，達到 2.22 億美元，佔 SGH 總銷售額的 52%，加強了我們正在 SGH 進行的轉型。

Q2 IPS sales more than doubled versus the year ago quarter, excluding Stratus Technologies and were up by 170%, including Stratus. As part of SGH, Stratus Technologies has performed very well, with revenues and gross margins ahead of the guidance given at the time we announced the transaction. With the addition of Stratus, the services portion of IPS sales more than doubled from the year ago period. This highlights our ability to offer more value to our customer base, resulting in a higher margin, more stable revenue stream.

第二季度 IPS 銷售額比去年同期翻了一番多，不包括 Stratus Technologies，增長了 170%，包括 Stratus。作為 SGH 的一部分，Stratus Technologies 的表現非常出色，收入和毛利率高於我們宣布交易時給出的指引。隨著 Stratus 的加入，IPS 銷售額的服務部分比去年同期翻了一番多。這凸顯了我們為客戶群提供更多價值的能力，從而帶來更高的利潤率和更穩定的收入流。

During Q2, we were pleased to see Penguin Computing's Jade system, a 1,300 node Intel Xeon-based system that is amongst the world's largest open compute platform-based installations, received recognition as 1 of the 2 supercomputers to power the recent nuclear fusion ignition breakthrough at Lawrence Livermore National Labs. This is the first time that more energy was produced by an artificial fusion reaction than was consumed.

在第二季度，我們很高興地看到 Penguin Computing 的 Jade 系統，一個 1,300 節點的基於 Intel Xeon 的系統，是世界上最大的基於開放計算平台的安裝之一，被公認為推動最近核聚變點火突破的 2 台超級計算機之一在勞倫斯利弗莫爾國家實驗室。這是第一次人工聚變反應產生的能量超過消耗的能量。

This is a historic win that provides important insights into the future of clean fusion energy, and we are proud to be part of this effort. Also during fiscal Q2, Stratus was recognized with Processing Magazine's 2022 breakthrough product award in the edge computing category. Our second-generation Stratus ztC Edge computing platform offers a 0-touch, secure and highly automated system, which enables digital transformation across multiple industrial segments.

這是一次歷史性的勝利，為清潔聚變能源的未來提供了重要的見解，我們很自豪能參與其中。同樣在第二財季，Stratus 獲得了 Processing Magazine 2022 年邊緣計算類別的突破性產品獎。我們的第二代 Stratus ztC 邊緣計算平台提供零接觸、安全且高度自動化的系統，可實現跨多個工業領域的數字化轉型。

And it's one of the industry's only solutions offering built-in application virtualization and fall tolerance in an easy to install, ruggedized design for the Edge. As we have noted on prior calls, IPS sales can be lumpy due to the deployment cycle of larger customer installations. Nonetheless, over the mid- to longer term, we see significant growth drivers for this segment and remain bullish about our ability to expand our customer engagements.

它是業界唯一的解決方案之一，在易於安裝、堅固耐用的 Edge 設計中提供內置應用程序虛擬化和容錯能力。正如我們在之前的電話中所指出的那樣，由於大型客戶安裝的部署週期，IPS 的銷售可能會起伏不定。儘管如此，從中長期來看，我們看到了這一細分市場的顯著增長動力，並且仍然看好我們擴大客戶參與度的能力。

With Penguin solutions and Stratus coming together, IPS has the portfolio breadth that can support our customers' compute needs, on-premise, in the cloud and at the edge. We are still in the early innings of AI, machine learning and data analytics. Given our over 20 years of system design and deployment expertise working with large enterprise customers, we believe we are well positioned to capture long-term growth. Now turning to our LED Solutions Group, which operates under the Cree LED brand and produces application-optimized LEDs for specialty lighting, video screens, gaming display, horticulture, outdoor and architectural lighting.

隨著 Penguin 解決方案和 Stratus 的結合，IPS 擁有廣泛的產品組合，可以支持我們客戶的本地、雲端和邊緣計算需求。我們仍處於人工智能、機器學習和數據分析的早期階段。鑑於我們 20 多年與大型企業客戶合作的系統設計和部署專業知識，我們相信我們有能力實現長期增長。現在轉向我們的 LED 解決方案集團，該集團在 Cree LED 品牌下運營，為專業照明、視頻屏幕、遊戲顯示、園藝、戶外和建築照明生產應用優化的 LED。

For the second quarter of fiscal 2023, LED Solutions sales totaled $56 million or 13% of overall SGH sales. Cree LED faced ongoing challenges due to soft demand stemming from the current economic environment, which was further suppressed as customers continued working down inventory levels. Given such market conditions, the team is focused diligently on cost controls to tightly manage the business and navigate near-term challenges.

2023 財年第二季度，LED 解決方案銷售額總計 5600 萬美元，佔 SGH 總銷售額的 13%。由於當前經濟環境導致需求疲軟，Cree LED 面臨持續挑戰，而隨著客戶繼續降低庫存水平，需求進一步受到抑制。鑑於這樣的市場條件，該團隊努力專注於成本控制，以嚴格管理業務並應對近期挑戰。

While being mindful of spending, Cree LED continues to invest and strengthen this position as a leader in customer-focused innovation. During the second quarter, Cree LED introduced 3 new high-brightness LEDs targeted for large-format video displays such as stadium signs, airport displays and full color roadway signs. Additionally, the team announced the release of its new XLamp PRO 9 high efficiency, high CRI or color rendering index LEDs with the industry's highest operating temperature rating, which makes it ideal for commercial indoor lighting applications that require high-quality light.

在註意支出的同時，Cree LED 繼續投資並鞏固其作為以客戶為中心的創新領導者的地位。第二季度，Cree LED 推出了 3 款新的高亮度 LED，主要用於體育場標誌、機場顯示屏和全彩色道路標誌等大幅面視頻顯示。此外，該團隊還宣布推出其新型 XLamp PRO 9 高效、高 CRI 或顯色指數 LED，具有業界最高的額定工作溫度，非常適合需要高質量光線的商業室內照明應用。

We believe that our outsourced manufacturing model and continued innovation leadership has us well positioned for a recovery in the LED sector. Based on our most recent customer touch points, we are starting to see signs of improvement in customer demand and expect revenue to be up modestly in fiscal Q3. Shifting to Memory. Our Memory Solutions Group is made up of 2 businesses: specialty memory, which is focused on the enterprise, industrial and federal end markets; and our Brazil-based module business.

我們相信，我們的外包製造模式和持續的創新領導地位使我們在 LED 行業的複蘇中處於有利地位。根據我們最近的客戶接觸點，我們開始看到客戶需求改善的跡象，並預計第三財季的收入將適度增長。轉移到內存。我們的內存解決方案集團由 2 個業務組成：專業內存，專注於企業、工業和聯邦終端市場；以及我們位於巴西的模塊業務。

Overall, Q2 Memory sales came in at $151 million or 35% of total SGH sales. Sales were lower sequentially, primarily due to a continued decline in both worldwide memory pricing and the global demand for PCs and mobile phones. The latter is significantly impacting our Brazil business. Focusing first on our specialty memory business. Sales were slightly down from the first quarter levels. Higher sales of our Flash-related solutions were offset by weakness in our DRAM-related business.

總體而言，第二季度內存銷售額為 1.51 億美元，佔 SGH 總銷售額的 35%。銷售額環比下降，主要是由於全球內存價格以及全球個人電腦和手機需求持續下降。後者對我們的巴西業務產生了重大影響。首先關注我們的專業內存業務。銷售額較第一季度略有下降。我們閃存相關解決方案的銷售額增加被我們 DRAM 相關業務的疲軟所抵消。

Our DRAM business was challenged due to continued downward pressure in pricing and a higher level of inventory at a few key accounts. As part of our longer-term growth strategy to grow our specialty memory business revenues, we remain focused on enterprise applications in the data center, primarily around DDR5 and Compute XpressLink or CXL. CXL plays into our strength of combining DRAM memory with an intelligent controller to meet the desired requirements of our customers.

我們的 DRAM 業務因價格持續下行壓力和幾個主要客戶的庫存水平較高而受到挑戰。作為我們增加專業內存業務收入的長期增長戰略的一部分，我們仍然專注於數據中心的企業應用程序，主要圍繞 DDR5 和 Compute XpressLink 或 CXL。 CXL 發揮了我們將 DRAM 內存與智能控制器相結合的優勢，以滿足客戶的期望要求。

CXL is a new interface technology, which allows for the expansion of memory capacity as well as the ability to share memory among servers. We believe the result will be an increase in our Memory TAM, along with the proliferation of form factors and feature sets that should increase the opportunity for our specialty memory solutions. In our Brazil Memory business, we continue to see downward pressure in what is already a challenging environment for PCs and mobile phones.

CXL 是一種新的接口技術，它允許擴展內存容量以及在服務器之間共享內存的能力。我們相信，結果將是我們內存 TAM 的增加，以及外形尺寸和功能集的激增，這應該會增加我們專業內存解決方案的機會。在我們的巴西內存業務中，我們繼續看到個人電腦和手機本已充滿挑戰的環境面臨下行壓力。

Based on our latest customer interactions, we believe our sales in Brazil are starting to stabilize and feel that growth from solid state drives or SSDs, 5G and DDR5 applications will drive our recovery over the coming quarters. Despite the headwinds within Memory, we have continued to operate the business well. Unlike traditional memory semiconductor manufacturers, our business model is different as we incorporate memory chips as part of the build of materials and then add value above the core chip technology for our customers.

根據我們最新的客戶互動，我們相信我們在巴西的銷售開始穩定，並且認為固態硬盤或 SSD、5G 和 DDR5 應用的增長將推動我們在未來幾個季度的複蘇。儘管內存中存在逆風，但我們繼續良好地經營業務。與傳統的內存半導體製造商不同，我們的業務模式不同，因為我們將內存芯片作為材料構建的一部分，然後為我們的客戶在核心芯片技術之上增加價值。

Therefore, our results have been relatively stable as demonstrated by our segment operating margin for our Memory business, which was approximately 10% for Q2. In addition, we are optimistic that the steps being taken by larger memory suppliers, such as reducing capital expenditure and selectively lowering wafer output will achieve a better supply-demand balance and ultimately have a positive effect on the recovery of SGH's Memory business. I'll stop here and hand it over to Ken for a more detailed review of our Q2 financial performance and our guidance for next quarter. Ken?

因此，我們的業績相對穩定，我們的內存業務分部營業利潤率在第二季度約為 10%。此外，我們樂觀地認為，大型內存供應商正在採取的措施，例如減少資本支出和有選擇地降低晶圓產量，將實現更好的供需平衡，最終對 SGH 內存業務的複蘇產生積極影響。我會在這裡停下來，將其交給 Ken，以更詳細地審查我們第二季度的財務業績和我們對下一季度的指導。肯？

Thanks, Mark. I will focus my remarks on our non-GAAP results, which are reconciled to GAAP in our earnings release tables. Now let me turn to our fiscal second quarter 2023 results. Despite the continued macroeconomic headwinds, we reported a solid quarter in Q2, helped by our operational discipline and the strength of our IPS segment, which had both record revenues of $222 million as well as record segment operating income of approximately $38 million.

謝謝，馬克。我將重點關注我們的非 GAAP 結果，這些結果在我們的收益發布表中與 GAAP 進行了核對。現在讓我談談我們 2023 財年第二季度的業績。儘管宏觀經濟持續逆風，但在我們的運營紀律和 IPS 部門的實力的幫助下，我們在第二季度報告了穩健的季度，該部門的收入達到創紀錄的 2.22 億美元，部門營業收入達到創紀錄的約 3800 萬美元。

Total SGH revenues were $429 million, and non-GAAP gross margin came in at a record 28.9%, above the high end of our guidance range. Non-GAAP diluted earnings per share was $0.76 for the second quarter, also above the high end of our guidance range. Last quarter, we began providing the breakdown of our overall SGH revenues by products and services. As a reminder, our services revenue includes longer-term services as well as point-in-time services, such as logistics and implementation services.

SGH 總收入為 4.29 億美元，非 GAAP 毛利率達到創紀錄的 28.9%，高於我們指導範圍的上限。第二季度非 GAAP 攤薄後每股收益為 0.76 美元，也高於我們指導範圍的上限。上個季度，我們開始按產品和服務提供 SGH 整體收入的細目分類。提醒一下，我們的服務收入包括長期服務以及時間點服務，例如物流和實施服務。

In Q2, our overall services revenue totaled $55 million, up from $36 million in the year ago quarter, helped by the inclusion of Stratus Technologies, which we acquired in the beginning of this fiscal year and product revenues for $374 million. Second quarter revenues by business unit was as follows: IPS had a record $222 million; LED at $56 million; and Memory at $151 million. This translates into a sales mix of approximately 52% for IPS, 13% for LED and 35% for Memory.

在第二季度，我們的整體服務收入總計為 5500 萬美元，高於去年同期的 3600 萬美元，這得益於我們在本財年年初收購的 Stratus Technologies 和 3.74 億美元的產品收入。按業務部門劃分的第二季度收入如下： IPS 達到創紀錄的 2.22 億美元； LED 5600萬美元；內存為 1.51 億美元。這轉化為大約 52% 的 IPS、13% 的 LED 和 35% 的內存的銷售組合。

And for the first time, IPS represents more than 50% of our total sales. Non-GAAP gross margin for SGH in Q2 was a record 28.9%, up from 26% in the year ago quarter, helped by the inclusion of Stratus within IPS and higher sales from Penguin Computing. Non-GAAP operating expenses for the second quarter were $72.5 million, down from $74.4 million in the first quarter of 2023. Operating expenses were down from the prior quarter, primarily due to cost containment initiatives.

IPS 首次占我們總銷售額的 50% 以上。第二季度 SGH 的非 GAAP 毛利率達到創紀錄的 28.9%，高於去年同期的 26%，這得益於將 Stratus 納入 IPS 以及 Penguin Computing 的更高銷售額。第二季度的非 GAAP 運營費用為 7250 萬美元，低於 2023 年第一季度的 7440 萬美元。運營費用低於上一季度，這主要是由於成本控制措施。

Operating expenses, however, were up from $59.5 million in the year ago quarter due to the inclusion of Stratus. In addition, operating expenses benefited in the second quarter of 2023 from $1.4 million in financial credits in Brazil, which was down from $2 million in the first quarter of 2023 and down from $6 million in the year ago quarter. This credit is expected to provide approximately $1 million of benefit in our third quarter of 2023.

然而，由於 Stratus 的加入，運營費用高於去年同期的 5950 萬美元。此外，2023 年第二季度的運營支出得益於巴西 140 萬美元的金融信貸，低於 2023 年第一季度的 200 萬美元和去年同期的 600 萬美元。預計這筆信貸將在我們 2023 年第三季度提供約 100 萬美元的收益。

Non-GAAP diluted earnings per share for the second quarter of 2023 was $0.76 compared with $0.87 per share in the year ago quarter. Adjusted EBITDA for the second quarter of 2023 was $63 million or 15% of sales compared to $66 million or 15% of sales in the year ago quarter. Now turning to balance sheet highlights. For working capital, our net accounts receivables totaled $229 million compared with $306 million last quarter. Days sales outstanding came in at 36 days, up 3 days from last quarter, primarily due to the timing of invoicing and collections for IPS.

2023 年第二季度非 GAAP 攤薄後每股收益為 0.76 美元，而去年同期為每股 0.87 美元。 2023 年第二季度調整後的 EBITDA 為 6300 萬美元，佔銷售額的 15%，而去年同期為 6600 萬美元，佔銷售額的 15%。現在轉向資產負債表亮點。對於營運資金，我們的應收賬款淨額總計 2.29 億美元，而上一季度為 3.06 億美元。未完成銷售天數為 36 天，比上一季度增加了 3 天，這主要是由於 IPS 的發票和收款時間安排所致。

Inventory totaled $294 million at the end of the second quarter, down from $416 million at the end of the prior quarter. The decrease in inventory, as outlined during our last earnings call, was driven primarily by higher levels of IPS shipments in our second quarter. Inventory turns were 6.3x in the second quarter versus 7x in the prior quarter. Consistent with past practice, net accounts receivables, days outstanding and inventory turnover are calculated on a gross sales and cost of goods sold basis, which were $573 million and $463 million, respectively, for the second quarter.

第二季度末庫存總額為 2.94 億美元，低於上一季度末的 4.16 億美元。正如我們在上次財報電話會議上概述的那樣，庫存減少主要是由於我們第二季度 IPS 出貨量增加所致。第二季度的庫存周轉率為 6.3 倍，而上一季度為 7 倍。與過去的做法一致，淨應收賬款、未清償天數和存貨周轉率是根據總銷售額和已售商品成本計算的，第二季度分別為 5.73 億美元和 4.63 億美元。

And as a reminder, the difference between gross and net revenue is related to our logistics services, which is accounted for on an agent basis, meaning that we only recognize the net profit on logistics services as revenue. Cash and cash equivalents totaled $376 million at the end of the second quarter, up $51 million compared with $325 million at the end of the prior quarter. Second quarter cash flows from operating activities totaled $101 million compared with cash used for operating activities of $74 million in the prior quarter.

提醒一下，毛收入和淨收入之間的差異與我們的物流服務有關，這是按代理核算的，這意味著我們只將物流服務的淨利潤確認為收入。第二季度末現金及現金等價物總計 3.76 億美元，較上一季度末的 3.25 億美元增加 5100 萬美元。第二季度來自經營活動的現金流總計 1.01 億美元，而上一季度用於經營活動的現金為 7400 萬美元。

As a reminder, we use cash and operating activities in the first quarter primarily due to the $101.8 million earn-out note from the Cree LED acquisition. We accounted for a majority of this prepayment in our operating cash flow given it was a contingent consideration. In the second quarter, we repurchased 677,000 shares in aggregate, spending $11 million during the quarter, inclusive of approximately $5 million in connection with the convertible exchange executed in January of 2023.

提醒一下，我們在第一季度使用現金和經營活動主要是由於收購 Cree LED 產生的 1.018 億美元收益票據。鑑於這是或有對價，我們在經營現金流中佔了大部分預付款項。在第二季度，我們總共回購了 677,000 股股票，本季度支出 1,100 萬美元，其中包括與 2023 年 1 月執行的可轉換交易所相關的約 500 萬美元。

To date, we've spent approximately $58 million under our $75 million share repurchase authorization since April of 2022, repurchasing approximately 3.2 million shares in aggregate. For those of you tracking capital expenditures and depreciation, capital expenditures were $12.6 million in the second quarter and depreciation was $9 million. In the second quarter of 2023, we strengthened our balance sheet further through privately negotiated exchange agreements with some of our convertible note holders.

迄今為止，自 2022 年 4 月以來，我們已根據 7500 萬美元的股票回購授權花費了約 5800 萬美元，總共回購了約 320 萬股股票。對於那些追踪資本支出和折舊的人來說，第二季度的資本支出為 1260 萬美元，折舊為 900 萬美元。 2023 年第二季度，我們通過與一些可轉換票據持有人私下協商交換協議，進一步加強了我們的資產負債表。

We exchanged $150 million in principal amount of our 2026 convertible notes for new 2029 convertible notes. The new 2029 convertible notes have a slightly lower coupon of 2% as compared to 2.25% for the 2026 notes and a slightly higher conversion price of $21.23 as compared to $20.30 for the 2026 notes. In addition, they also have a higher cap call, which protects us economically up to $29.14 per share, whereas the 2026 notes are protected economically up to $27.07 per share.

我們將 2026 年可轉換票據的 1.5 億美元本金換成了新的 2029 年可轉換票據。新的 2029 年可轉換票據的票面利率略低於 2026 年票據的 2.25%，為 2%，轉換價格為 21.23 美元，略高於 2026 年票據的 20.30 美元。此外，他們還有更高的上限，這在經濟上保護了我們高達每股 29.14 美元，而 2026 年票據在經濟上受到了高達每股 27.07 美元的保護。

Now let me turn to our fiscal third quarter 2023 guidance. We expect that revenues for the third quarter of 2023 will be approximately $375 million at the midpoint plus or minus $20 million. Our guidance for the third quarter incorporate the following assumptions. For IPS, as we've discussed on prior calls, we expect lower sequential revenues. For Memory, we see our business stabilizing from second quarter levels. And for LED, we expect a modest improvement in revenues from the second quarter.

現在讓我談談我們的 2023 財年第三季度指引。我們預計 2023 年第三季度的收入在中點上下浮動 2000 萬美元時約為 3.75 億美元。我們對第三季度的指導包含以下假設。對於 IPS，正如我們在之前的電話會議上討論的那樣，我們預計連續收入會降低。對於內存，我們看到我們的業務從第二季度的水平開始穩定下來。對於 LED，我們預計第二季度的收入將略有改善。

Our GAAP gross margin for the third quarter is expected to be approximately 26% at the midpoint, plus or minus 1%. Non-GAAP gross margin for the third quarter is expected to be approximately 28% at the midpoint, plus or minus 1%. Our non-GAAP operating expenses for the third quarter are expected to be approximately $72 million plus or minus $3 million, consistent with the prior quarter. GAAP diluted earnings per share for the third quarter is expected to be approximately negative $0.03 plus or minus $0.10.

我們第三季度的 GAAP 毛利率預計中點約為 26%，上下浮動 1%。第三季度的非美國通用會計準則毛利率預計中點約為 28%，上下浮動 1%。我們第三季度的非 GAAP 運營費用預計約為 7200 萬美元，上下浮動 300 萬美元，與上一季度一致。第三季度的 GAAP 攤薄後每股收益預計約為負 0.03 美元，上下浮動 0.10 美元。

On a non-GAAP basis, excluding share-based compensation expense, intangible asset amortization expense, debt discount and other adjustments, we expect diluted earnings per share will be approximately $0.40 plus or minus $0.10. Our GAAP and non-GAAP diluted share count for the third quarter is expected to be approximately 50 million shares based on the current stock price. And cash capital expenditures for the third quarter are expected to be in the range of $12 million to $15 million.

在非 GAAP 基礎上，不包括基於股份的補償費用、無形資產攤銷費用、債務貼現和其他調整，我們預計每股攤薄收益約為 0.40 美元上下浮動 0.10 美元。根據當前股價，我們第三季度的 GAAP 和非 GAAP 稀釋後股份數量預計約為 5000 萬股。第三季度的現金資本支出預計在 1200 萬至 1500 萬美元之間。

Our forecast for the third quarter of 2023 is based on the current environment, which contemplates the global macroeconomic headwinds and ongoing supply chain constraints. We continue to manage our operations in a prudent manner as we navigate a challenging environment, while also continuing to invest in our long-term growth. Please refer to our non-GAAP Financial Information section and reconciliation of GAAP to non-GAAP measure tables in our earnings release for further details. And with that, let me turn it back over to Mark for a few comments prior to Q&A.

我們對 2023 年第三季度的預測基於當前環境，其中考慮了全球宏觀經濟逆風和持續的供應鏈限制。在充滿挑戰的環境中，我們繼續以審慎的方式管理我們的運營，同時也繼續投資於我們的長期增長。請參閱我們的非 GAAP 財務信息部分以及我們收益發布中的 GAAP 與非 GAAP 衡量表的對賬，以了解更多詳細信息。因此，讓我在問答之前將其轉回給馬克徵求一些意見。

Thanks, Ken. Despite the near-term economic uncertainty, we remain optimistic about our competitive positioning in the end markets we serve, which include AI, machine learning, data analytics, 5G, enterprise storage and specialty lighting. I want to thank our global team at SGH for their execution in Q2. To achieve record non-GAAP gross margins, exceed our EPS guidance and strengthen our balance sheet during these turbulent times is a testament to the efforts of our global team. With that, operator, we are now ready for Q&A.

謝謝，肯。儘管近期經濟存在不確定性，但我們對我們在我們服務的終端市場的競爭定位保持樂觀，其中包括人工智能、機器學習、數據分析、5G、企業存儲和專業照明。我要感謝我們在 SGH 的全球團隊在第二季度的執行。為了在這些動盪時期實現創紀錄的非 GAAP 毛利率，超過我們的 EPS 指導並加強我們的資產負債表，這證明了我們全球團隊的努力。有了這個，接線員，我們現在準備好進行問答了。

(Operator Instructions). Our first question comes from the line of Kevin Cassidy with Rosenblatt.

（操作員說明）。我們的第一個問題來自 Kevin Cassidy 與 Rosenblatt 的對話。

With Memory Solutions stabilizing, that's very good news. And can you give us a little more details on how that would be split between the specialty memory and the Brazil memory? Are they both stabilizing equally or is one doing better than the other?

隨著 Memory Solutions 的穩定，這是個好消息。你能給我們更多關於專業記憶和巴西記憶之間如何分配的細節嗎？它們的穩定性是一樣的還是一個比另一個做得更好？

(technical difficulty)

（技術難度）

We now have the speakers back on the line.

我們現在讓揚聲器重新上線。

Sorry about that. Kevin, hopefully, you can hear Mark, we had some technical difficulties here. You have Mark and Ken. But can you answer your question again -- or ask your question again?

對於那個很抱歉。凱文，希望你能聽到馬克，我們在這裡遇到了一些技術困難。你有馬克和肯。但是你能再回答你的問題——或者再問你的問題嗎？

Sure. Yes. I was just asking for the details on the Memory Solutions. It's great news to hear that it's stabilizing. And I just wanted to know how the split is in the stabilization, is it mostly the specialty memory doing better? Or is it both for specialty and Brazil, both stabilized?

當然。是的。我只是想了解有關內存解決方案的詳細信息。聽到它正在穩定是個好消息。我只是想知道穩定性方面的差異，主要是專業內存做得更好嗎？還是既針對專業又針對巴西，兩者都穩定了？

Thanks for the Kevin -- question, Kevin, and thank you for your patience. Where we've seen just more of what it feels like is kind of a bottoming out of -- on the pricing side of the business kind of -- it feels like we're bouncing around the bottom on the price side and demand appears to be stabilizing. And as we think about Q3, Q4, hopefully seeing that play out as such, as you've kind of heard from some of the more recent announcements of the larger semi guys in memory.

感謝凱文 - 問題，凱文，感謝您的耐心等待。我們看到更多的感覺是觸底反彈——在業務的定價方面——感覺就像我們在價格方面的底部反彈，需求似乎穩定下來。當我們考慮第三季度、第四季度時，希望看到這樣的結果，正如你從記憶中更大的半人的一些最近的公告中聽到的那樣。

It's been an unprecedented period probably dating back to 15 years or so. And as such, I think the steps being taken to get a better supply-demand balance are in place. And again, we're pretty optimistic that there's a recovery out forthcoming. It's a little bit hard to call timing wise, but we're seeing some stability in the business.

這是一個前所未有的時期，可能可以追溯到 15 年前左右。因此，我認為為實現更好的供需平衡而採取的措施已經到位。再一次，我們非常樂觀地認為複蘇即將到來。明智地稱時機有點困難，但我們看到業務有些穩定。

Okay. And as a follow-up on -- the IPS business, you've been telegraphing that your visibility beyond the second half of the fiscal year was getting weak. And I just wanted to know is there -- clearly, you're guiding for a lower third quarter, but what are you seeing as far as out beyond the third quarter? Do you have backlog building? Or is it still low visibility?

好的。作為 IPS 業務的後續行動，您一直在表示，您在本財年下半年之後的能見度越來越低。我只是想知道那裡 - 顯然，你正在指導第三季度下降，但你對第三季度以外的情況有何看法？你有積壓的建築嗎？還是能見度低？

I think that's a good way of putting it. We are in the process of building up our backlog towards the end of our fiscal year heading into fiscal '24. As I commented earlier, the tailwinds on the market environment long term are -- they were in good growth markets being AI and machine learning, data analytics and the likes for IPS. Of course, we're coming off of 3 years of 30% growth plus or minus in that range.

我認為這是一個很好的表達方式。在進入 24 財年的財政年度末，我們正在積累積壓工作。正如我之前評論的那樣，長期市場環境的順風是——它們處於良好的增長市場，即 AI 和機器學習、數據分析等 IPS。當然，我們正在擺脫 3 年 30% 的增長，在這個範圍內上下波動。

One of the things we're in the middle of April right now in a business that 2 years ago wasn't making money, and I think we're going to report something like 17% operating income for this quarter. So it's been an incredible turnaround. But as I would just say that in the middle of April 2023, budgets are kind of in process. And the one caution I would say there is just we don't know how enterprises will manage their budget process.

我們在 4 月中旬正在做的事情之一是 2 年前還沒有賺錢的業務，我認為我們將報告本季度 17% 的營業收入。所以這是一個令人難以置信的轉變。但正如我想說的，在 2023 年 4 月中旬，預算正在處理中。我要說的一個警告是，我們不知道企業將如何管理他們的預算流程。

We think it's going to be a good year for us. But we don't have line of sight yet on fiscal '24. So it might be a little too early for us to call the number, so to speak. But in general, the customer engagement is good. The backlog building process is on a good path, and we feel optimistic. But just again, normally, budgets get set kind of mid-summer to early fall in this business, and we want to just kind of make sure that we can tap into the visibility that we get as we approach our Q4.

我們認為這對我們來說將是豐收的一年。但我們還沒有看到 24 財年的情況。因此，可以這麼說，我們現在撥打這個號碼可能還為時過早。但總的來說，客戶參與度還是不錯的。積壓工作進展順利，我們感到樂觀。但是，通常情況下，這項業務的預算會在仲夏到初秋之間確定，我們只是想確保我們能夠利用我們在接近第四季度時獲得的可見性。

Our next question comes from the line of Brian Chin with Stifel.

我們的下一個問題來自 Brian Chin 與 Stifel 的合作。

Can you guys hear me okay? I know there's kind of been a little bit faint.

你們能聽到我說話嗎？我知道有點虛弱。

Yes, Brian, we can hear you. Can you hear us?

是的，布賴恩，我們能聽到你的聲音。你可以聽見我們嗎？

Yes, yes. I've got you loud and clear. Yes. So I'm curious, first, on the Memory business, a pretty big sequential decline in the February and quarter, although also a pretty big Memory -- a pretty big decline in the Memory market pricing also over that period. So I'm curious, in terms of the pass-through of lower memory prices, is that kind of a real-time event, particularly on the specialty memory part of your business, plus, if the ASP declines do start to lose momentum, I guess, is that the right way to put it, that's part of that reduced headwind you're seeing?

是的是的。我讓你大聲和清楚。是的。所以我很好奇，首先，在內存業務上，2 月份和本季度的環比下降相當大，儘管內存也很大——在此期間內存市場定價也出現了相當大的下降。所以我很好奇，就較低內存價格的傳遞而言，這是一種實時事件，特別是在您業務的專業內存部分，另外，如果 ASP 下降確實開始失去動力，我想，這是正確的表達方式嗎，這是您看到的逆風減少的一部分？

Yes. So Brian, let me answer the exposure we have. So typically, on our balance sheet, we carry in the neighborhood of 4 to 5, 4 to 6 weeks of inventory for Memory. And so that -- there is some exposure they are both good and bad, depending on where ASPs move, but it's fairly limited to that. But when you look at our business, especially around the specialty segment, our customers know, for the most part, what the pricing is for various Memory components.

是的。所以布賴恩，讓我回答我們的曝光。因此，通常情況下，在我們的資產負債表上，我們有大約 4 到 5、4 到 6 週的內存庫存。因此——有一些曝光，它們既好又壞，這取決於 ASP 的移動位置，但它相當有限。但是，當您查看我們的業務時，尤其是在專業領域，我們的客戶在很大程度上知道各種內存組件的定價是多少。

And therefore, that piece is more of a pass-through. And it's really the value add that we provide on top of the Memory for those specific applications. And that's why customers work with us. And it's also part of the reason that you saw the strong operating margin performance in Q2 from our overall Memory segment. So even though we've seen some headwinds in the overall revenues, if you looked versus a year ago quarter -- or year-over-year on the quarterly results, the op income percent has still remained fairly healthy, which is a testament to the strength of that business and how we operate the specialties memory segment.

因此，那件作品更像是一個傳遞。這確實是我們在內存之上為那些特定應用程序提供的附加值。這就是客戶與我們合作的原因。這也是您從我們的整體內存部門看到第二季度強勁營業利潤率表現的部分原因。因此，即使我們看到整體收入出現一些不利因素，但如果您與去年同期或季度業績相比，營業收入百分比仍然相當健康，這證明了該業務的實力以及我們如何運營專業內存部門。

Yes, of course, it's always helpful to point that out. How you guys have a memory downturn kind of affects you guys differently than maybe some of the suppliers. In terms of the IPS business, it looks like most of the sequential revenue decline is going to be from IPS and kind of consistent with what you said about sort of the momentum being a little bit more fiscal first half versus second half loaded.

是的，當然，指出這一點總是有幫助的。你們記憶力下降對你們的影響可能與某些供應商不同。就 IPS 業務而言，看起來連續收入下降的大部分將來自 IPS，這與你所說的勢頭一致，即上半年的財政負荷比下半年的負荷要多一些。

I'm curious what kind of went better within the IPS mix in fiscal 2Q to drive gross margins to nearly 29%? And how do you see that sustaining or not in fiscal second half relative to your gross margin guide and revenue outlook?

我很好奇，在第二財季的 IPS 組合中，哪種表現更好，可以將毛利率推高至近 29%？相對於你的毛利率指南和收入前景，你如何看待下半財年的持續與否？

I'll take the first part of that, Brian. As we've talked about in the past, we're not kind of a revenue-only play. We're not looking to boost up revenues at lower margins. And part of that initiative is driven by our commitment to provide value-add managed services to our customers who we engage with. And as we commented on, services continues to be a really strong part of this business. And when you complement our systems and solutions, software solutions bundled with services, we think the gross margin profile of the business continues to be relatively stable and strong.

我將負責其中的第一部分，布賴恩。正如我們過去所說的那樣，我們不是一家只看收入的公司。我們不希望以較低的利潤率增加收入。該計劃的部分原因是我們致力於為與我們合作的客戶提供增值託管服務。正如我們評論的那樣，服務仍然是該業務的重要組成部分。當您補充我們的系統和解決方案、與服務捆綁在一起的軟件解決方案時，我們認為該業務的毛利率狀況將繼續保持相對穩定和強勁。

So that's kind of what's driving it for us. So it's just really been a discipline not to focus on revenue, but really focus on value add solutions that we bring to our customer base.

所以這就是推動我們發展的原因。因此，不關注收入，而是真正關注我們為客戶群帶來的增值解決方案，這真的是一門紀律。

Yes. And Brian, as you look at the guidance that we provided and even the strength that we had in Q2 where we had record gross margins at 28.9% and our guiding, even though we have revenues coming down in Q3, the margins to still remain very healthy at that 28% on a non-GAAP basis. A lot of that is driven by what Mark just mentioned, the combination of solution sales within IPS in a large portion of services or -- big services component.

是的。布賴恩，當你看看我們提供的指導，甚至我們在第二季度的實力時，我們的毛利率達到創紀錄的 28.9% 和我們的指導，即使我們在第三季度的收入下降，利潤率仍然非常高在非 GAAP 基礎上保持 28% 的健康水平。其中很大一部分是由馬克剛才提到的驅動的，即 IPS 中大部分服務或大型服務組件中的解決方案銷售組合。

Now there's always going to be some lumpiness that we talked about in terms of having hardware sales or more hardware-centric quarters. And that can move the margins around a bit. But I think what you've seen over the last couple of quarters is that we've been able to maintain these margins in part due to the overall services mix, which is primarily focused around IPS.

現在，在硬件銷售或更多以硬件為中心的季度方面，我們總是會遇到一些麻煩。這可以稍微移動利潤率。但我認為你在過去幾個季度看到的是，我們能夠保持這些利潤率，部分原因是整體服務組合，這主要集中在 IPS 周圍。

Got it. Maybe just a quick thing on LED, since you mentioned recovery there. At this stage, have you pretty much drawn down that channel inventory that you spoke about in terms of channel in versus channel out? And is that sort of allowing you to think you can kind of grow with whatever recovery and demand occurs in that market?

知道了。也許只是 LED 上的一件小事，因為你在那裡提到了恢復。在這個階段，您是否已經大致提取了您在渠道輸入和渠道輸出方面談到的渠道庫存？這是否讓您認為您可以隨著該市場出現的任何復蘇和需求而增長？

Yes, I think -- Brian, I think that's spot on. So if you look at it over the last 2 quarters, and we talked about it a couple of quarters ago that typically if you look at where we are in the cycle, it takes in that neighborhood of 2 to 3 quarters to burn down the inventory of the channel. We've seen that over the last 2 quarters, we've probably burned down close to $12 million of inventory in the channel.

是的，我認為——布賴恩，我認為這是正確的。因此，如果您查看過去兩個季度的情況，並且我們在幾個季度前討論過，通常如果您查看我們在周期中所處的位置，則需要 2 到 3 個季度的時間來消耗庫存頻道的。我們已經看到，在過去的兩個季度中，我們可能已經消耗了近 1200 萬美元的渠道庫存。

So that means that the sell in is less than the sell-through. As we head into Q3, we are seeing more stabilization. There could be a little bit of channel burn, but back to normalized levels. And so we should start to get back to a demand environment and a revenue environment where our revenues equal and demand, and we're starting to see an uptick at least as we look at Q3, we're expecting revenues to be modestly up from Q2 levels, which is a good sign.

所以這意味著賣出量小於賣出量。隨著我們進入第三季度，我們看到了更多的穩定性。可能會有一點通道燒毀，但會恢復到正常水平。因此，我們應該開始回到收入與需求相等的需求環境和收入環境，並且至少在我們看第三季度時，我們開始看到增長，我們預計收入將從Q2水平，這是一個好兆頭。

Our next question is from the line of Sidney Ho with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Sidney Ho。

Maybe a couple of questions. First, on the IPS side, I think last quarter, you guys talked about first half versus second half being 60-40 or 55-45. What is your view now? Maybe you can double-click on it and highlight what has changed? And maybe as part of that, you guys are talking about -- I guess software and services mix is kind of lower this quarter. If my math is right, it's about 20% of IPS versus a quarter ago it was like 32%. How are you thinking about the software services mix going forward for the back half of the year?

也許有幾個問題。首先，在 IPS 方面，我想上個季度，你們談到了上半場和下半場是 60-40 或 55-45。你現在怎麼看？也許您可以雙擊它並突出顯示已更改的內容？也許作為其中的一部分，你們正在談論 - 我猜本季度軟件和服務組合有點低。如果我的計算是正確的，它大約是 IPS 的 20%，而一個季度前大約是 32%。您如何看待今年下半年的軟件服務組合？

Yes. So Sidney, thanks for the question. It's Ken. In terms of that range, I think that still is true as we look at the back half of the year relative to the first half of the year for IPS specifically. We had a number of great projects in Q1 and Q2, and we tried to highlight the fact that it was going to be more of a front-half loaded year although still continued strength in the second half for IPS, especially if you look relative to where that business was a year or 2 years ago.

是的。西德尼，謝謝你提出這個問題。是肯。就該範圍而言，我認為這仍然是正確的，因為我們特別關注 IPS 的下半年相對於上半年的情況。我們在第一季度和第二季度有很多很棒的項目，我們試圖強調這樣一個事實，即儘管 IPS 在下半年仍然保持強勁勢頭，但尤其是相對於該業務是一年或兩年前的地方。

On the services piece, as I mentioned last quarter, is that there's 2 components. There are some ongoing services where we have visibility, call it, up to a year, sometimes even beyond that. And then there are services that are more what I would classify as point-in-time services. Those can be design, implementation services and the like. And so that's what adjusted from Q1 levels as we had more point-in-time services as a portion of our overall services picks.

正如我在上個季度提到的，在服務方面，有 2 個組件。有一些正在進行的服務，我們可以稱之為長達一年的可見性，有時甚至更久。還有一些服務更像是我將其歸類為時間點服務。這些可以是設計、實施服務等。因此，這就是從第一季度水平進行調整的結果，因為我們有更多的時間點服務作為我們整體服務選擇的一部分。

Now as we look at Q3, if you ask me where will that services portion be in terms of dollar figures, I would expect that to be in a similar range as Q2 levels, potentially a little bit higher in Q3 versus Q2.

現在我們來看第三季度，如果你問我服務部分的美元數字在哪裡，我希望它與第二季度的水平處於相似的範圍內，第三季度可能比第二季度高一點。

Okay. That's super helpful. Maybe switching gears a little bit to -- you guys talk about DDR5 opportunity. What is your expectations in terms of timing of the ramp now versus maybe a standard DDR5? I think some of the memory suppliers are talking about crossover being mid-calendar '24. And maybe remind us where you see the strength in DDR5 versus some of the memory manufacturers they may be? Could it be the similar time line? Or could be, you have a different time line than those guys?

好的。這非常有幫助。也許稍微改變一下——你們談論 DDR5 的機會。與標準 DDR5 相比，您現在對斜坡時間的期望是什麼？我認為一些內存供應商正在談論跨界是 24 年中期。也許提醒我們，與某些內存製造商相比，您認為 DDR5 的優勢在哪裡？難道是相似的時間線？或者可能是，你的時間線與那些人不同？

Thanks for the question. I think by and large, it's similar. We think we've got kind of the 2 businesses, right? Brazil, more consumer focused, we'll actually see some of that, we think, in the mid- to late '24 time frame, similar time frame that you just talked about. And then in our specialty business, it's a little bit less dependent, so to speak, on leading edge. We have a fair amount of current technology platform solutions.

謝謝你的問題。我認為總的來說，它是相似的。我們認為我們有兩種業務，對嗎？巴西，更多地以消費者為中心，我們實際上會看到其中的一些，我們認為，在 24 世紀中後期的時間框架內，與您剛才談到的時間框架類似。然後在我們的專業業務中，可以說，它對領先優勢的依賴程度有所降低。我們有相當數量的當前技術平台解決方案。

And then obviously, we have some legacy on some of the more traditional (inaudible) or networking, telecommunications solutions that people want continuity of supply of an existing or legacy product. So I'd say specialty is a little bit less dependent on DDR5, although we will have offerings around the time frames you talked about. And Brazil being more consumer-focused is going to be probably more prevalent on leading-edge out in the middle of calendar year '24.

然後很明顯，我們在一些更傳統的（聽不清）或網絡、電信解決方案上有一些遺產，人們希望這些解決方案能夠持續供應現有或遺留產品。所以我想說專業對 DDR5 的依賴性稍低一些，儘管我們會在您談到的時間範圍內提供產品。巴西更加以消費者為中心，在 24 年年中可能會在領先優勢方面更加普遍。

(Operator Instructions). Our next question comes from the line of Nick Doyle with Needham.

（操作員說明）。我們的下一個問題來自 Nick Doyle 與 Needham 的對話。

This is Nick Doyle on for Raji Gill. Wanted to ask a question about the LED business. Great to see that you think you're kind of bottoming there, maybe some sequential increase. Brian kind of spoke about how it's maybe related to the inventory situation, but I was wondering if you could kind of expand on any demand signals, maybe specific to China that you're seeing now? And if that's contributing to your outlook?

這是 Raji Gill 的 Nick Doyle。想問一個關於LED業務的問題。很高興看到你認為你在那裡觸底，也許是一些連續的增長。 Brian 談到了它可能與庫存情況有何關係，但我想知道你是否可以擴展任何需求信號，也許是你現在看到的特定於中國的信號？如果這有助於你的前景？

Yes, I'd say there's a combination of those 2 things that you highlighted. There's certainly -- and again, I think Ken also commented on this, the channel is behaving in a way that's showing -- they're starting to have more confidence in the build -- in the business. And yet, we have seen some more direct customer demand signals come in, giving us encouragement for Q3 visibility in the business for a modest increase.

是的，我想說的是您強調的這兩件事的結合。當然 - 而且，我想 Ken 也對此發表了評論，該頻道的表現方式表明 - 他們開始對構建更有信心 - 在業務中。然而，我們已經看到一些更直接的客戶需求信號出現，這讓我們對第三季度業務的可見度適度增長感到鼓舞。

Okay. And could you expand a bit on the channel inventory for the Memory business? Yes. Any kind of time line there would be great.

好的。您能否擴展一下內存業務的渠道庫存？是的。任何類型的時間線都會很棒。

Yes. If you look at the Memory business, we don't have a real channel exposure. Many times we're either or -- selling directly, either to the OEMs or the contract manufacturers. And so very limited to no [disty] inventory per se. The area that we do have this distribution exposure is really primarily related to the LED business. And it comprises -- of the LED business, it's probably about 60% or so, plus or minus, of the LED specific business that we had disty exposure to.

是的。如果你看看內存業務，我們沒有真正的渠道曝光。很多時候，我們要么直接向原始設備製造商或合同製造商銷售。因此非常有限，沒有 [disty] 庫存本身。我們確實擁有這種分銷曝光的領域實際上主要與 LED 業務有關。它包括 - 在 LED 業務中，它可能占我們接觸過的 LED 特定業務的 60% 左右，或多或少。

There are currently no more questions waiting at this time. I would like to pass the conference back to Mark Adams for any closing remarks.

目前沒有更多的問題在等待。我想將會議轉回給馬克亞當斯，聽取任何閉幕詞。

Thank you, and thank you all for joining today. As we mentioned at the outset, we continue to operate the business very well and the resilient nature of our business generating the cash that Ken alluded to over $100 million in the quarter with record non-GAAP gross margins. We continue to be bullish on the secular tailwinds of the markets we serve, and we look forward to further growth and expanding our business in the future. Thank you.

謝謝大家，感謝大家今天的加入。正如我們在一開始提到的，我們繼續很好地經營業務，我們業務的彈性性質產生了 Ken 提到的本季度超過 1 億美元的現金，非 GAAP 毛利率創歷史新高。我們繼續看好我們所服務市場的長期順風，我們期待未來進一步增長和擴大我們的業務。謝謝。

That concludes today's conference call. I hope you all enjoy the rest of your day. You may now disconnect your lines.

今天的電話會議到此結束。我希望你們都過得愉快。您現在可以斷開線路。