Power Integrations Inc (POWI) 2017 Q4 法說會逐字稿

Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Power Integrations Fourth Quarter 2017 Earnings Call. (Operator Instructions) I will now turn the call over to Joe Shiffler, Director of Investor Relations. You may begin your conference.

Thank you. Good afternoon, and thanks for joining us. With me on the call today are Balu Balakrishnan, President and CEO of Power Integrations; and Sandeep Nayyar, our Chief Financial Officer.

Our fourth quarter and full year results are calculated using the sell-in method of revenue recognition on sales to distributors, reflecting our adoption of ASC 606 effective January 1st of 2017.

On today's call, and in our press release, comparisons to prior year results make use of recast financial information calculated as if the new accounting standard had been in effect for the prior periods. Recast data for 2015 and 2016 can be found in the historical financial tables posted on our investor website, investors.power.com.

During the call today, we will refer to financial measures not calculated according to generally accepted accounting principles. Please refer to today's press release, which is posted on our investor website, for an explanation of our reasons for using such non-GAAP measures as well as tables reconciling these measures to our GAAP results.

Our discussion today, including the Q&A session, will include forward-looking statements denoted by words like will, would, believe, should, expect, outlook, forecast and similar expressions that look toward future events or performance.

Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied in our statements. Such risks and uncertainties are discussed in our press release and in our most recent Form 10-K filed with the SEC on February 8, 2017. Finally, this call is the property of Power Integrations, and any recording or rebroadcast is expressly prohibited without the written consent of Power Integrations.

And now I'll turn the call over to Balu.

Thanks, Joe, and good afternoon. Revenues for the fourth quarter were $108.2 million, up 6% from a year ago, but slightly below the midpoint of our projected range. Demand moderated in the later part of the quarter, with order activity slowing in December and distribution sell-through coming in softer than expected. While all 4 end-market categories exhibited sequentially lower sell-through, demand related to Chinese smartphone customers continues to be particularly soft and sell-through in appliance market was also notably weak.

Although orders rebounded strongly in January, we nevertheless expect first quarter revenues to be sequentially lower compared to the December quarter. Specifically, we expect revenues for the first quarter to be in the range of $103 million, plus or minus $3 million.

Notwithstanding the uncertainty of the short-term demand outlook, we are pleased with our 2017 results, and we believe many of the growth drivers that enabled these results remain in place for 2018 and beyond.

We are capitalizing on global trends such as energy efficiency, clean energy, faster charging, IoT, the switch to power -- battery-powered motors in areas such as tools and transportation and the mass adoption of convenience and comfort appliances in developing markets. These trends are creating an ever greater need for innovative, energy-efficient power conversion technology, and we are meeting that need with a strong portfolio of products currently in the market as well as a robust product pipeline that will drive a meaningful expansion of our addressable market over the next couple of years.

Our revenues grew 11% in 2017, led by the industrial and consumer markets, which together comprised more than 70% of our sales and grew at a combined rate of about 18%. Industrial revenues grew 20% for the year, driven by a broad range of vertical markets, some of which have only recently emerged and should have many years of rapid growth ahead. For example, we saw strong growth in home and building automation category, which includes IoT applications such as smart lighting control, network smoke alarms and occupancy sensors, smart plugs as well as USB wall outlets and power strips.

Since these devices are permanently connected to the grid, they require exceptionally low standby consumption, and because they are often located in cramped, difficult-to-reach locations such as behind the wall or on the ceiling, reliability and compact footprints are also extremely important. These characteristics make them ideal targets for our products, and we are now in production with many of the leading OEMs in these categories. We expect growth in this area to accelerate in the coming years as manufacturers resolve the interoperability challenges that naturally accompany network devices, setting the stage for mass adoption.

Another category that has emerged over the past couple of years is chargers for devices such as e-bikes and lawn equipment. E-bikes are rapidly replacing gasoline-powered scooters, particularly in China and India, where pollution is a major issue. Meanwhile, lawn equipment is converting to lithium-ion batteries in place of gasoline and plug-in electric motors. The chargers for these devices tend to be on the higher end of our power scale, in some cases, over 200 watts, resulting in dollar content well above the average for our AC to DC business. Revenues from this category grew about 40% in 2017, and we expect continued growth in 2018 as these markets develop further.

Our high-power gate driver products also contributed significant growth in the Industrial category, growing more than 20% for the year, driven by high-voltage DC transmission and renewable energy installations. The Industrial category also benefited from strong growth in metering and Industrial Control applications as well as contributions from LED lighting, where we have focused our efforts on commercial and industrial applications that value the reliability and efficiency benefits of our products.

In the Consumer category, full-year revenues grew in the mid-teens, driven by a strong performance in the appliance market, which accounts for the bulk of our Consumer revenues. We have averaged double-digit growth in appliance revenues over the past several years thanks to a confluence of favorable trends. First, we continue to gain market share thanks to the reliability and efficiency benefits of our products, which are highly valued in the appliance market.

Second, the dollar value of our addressable market for appliances has grown faster than unit volume as appliances have converted from mechanical to electronic controls and from AC motors to DC motors. This trend is picking up steam as OEMs incorporate more and more electronic features in their products, such as LED lighting, displays and network connectivity.

Third, volume growth has accelerated with mass adoption of comfort appliances such as air conditioners by a growing middle class in emerging markets. We believe this trend is still in early stages as emerging markets have yet to see a broad penetration of many convenience and comfort appliances, such as dishwashers and air conditioners.

Revenues from the Communications category, which make up about a quarter of our sales, were essentially flat for the full year. Rapid charging revenues grew meaningfully on the year, though at a somewhat slower pace than previous years, reflecting demand conditions in the smartphone industry as well as more gradual pace of adoption ahead of the coming USB PD rollout. Though the USB PD rollout has been slowed by delays in finalizing specifications, USB PD technology now appears to be on the cusp of mass adoption.

In Q4, we won a 27-watt USB PD tablet charger design for an Asian OEM and a 27-watt smartphone charger design for another Asian OEM using InnoSwitch3. This is the highest power cellphone design we have seen to date, indicating that power levels continue to rise as OEMs specify ever larger batteries and look to charging speed as a differentiating feature. We have a promising pipeline of USB PD designs in progress, and we expect a number of new programs to begin ramping in the second half of the year.

In summary, we are pleased with our 2017 results, and while the near-term demand picture is somewhat uncertain, we believe we are well positioned for continued growth in 2018 and beyond. We have made and continue to make substantial investments in products, technologies, capacity and infrastructure to support the double-digit long-term growth rate that we believe we can achieve.

We also continue to return cash to stockholders both consistently through our dividend and opportunistically through our repurchase program. Underscoring our confidence in the future of our business as well as the strength of balance sheet and the increased flexibility offered by the new tax law, our Board of Directors has increased our quarterly dividend by $0.02 per share to $0.16 and allocated an additional $30 million for share purchases on top of the $44 million that remained on our authorization at year-end.

With that, I'll turn it over to Sandeep for a review of the financials.

Thanks, Balu, and good afternoon. I will begin by commenting on the effects of the new tax law. First, with respect to our ongoing effective tax rate, the net effect of the legislation will be very modest. While the reduction of the U.S. corporate tax rate will provide a slight benefit, other provisions of the law will offset that benefit, with the net effect being a small uptick in our effective tax rate.

Specifically, I expect our non-GAAP tax rate for 2018 to be in the range of 7% to 8% compared to 5% in 2017. The GAAP tax rate should average about 100 to 150 basis points higher than the non-GAAP tax rate. Second, our fourth quarter GAAP results include a charge of $37.5 million, reflecting the transition tax on unremitted foreign earnings as well as changes in the values of our deferred tax assets and liabilities on our balance sheet.

The cash outflow associated with the charge will be approximately $15 million, which will be paid over 8 years according to the timetable stipulated in the law. Naturally, our initial estimates of the impact of the tax law could change as we refine our analysis and conduct tax planning activities or if any additional guidance on the new law becomes available.

Turning to our fourth quarter results. Revenues were $108.2 million, up 6% year-over-year and down 3% sequentially. The year-over-year increase was driven by growth of 25% from the Industrial category, while Consumer revenues increased mid-single digits and the Communications and Computing categories each declined by roughly 10%. Revenue mix for the quarter was 37% Consumer, 33% Industrial, 25% Communication and 5% Computing.

Non-GAAP gross margin for the quarter was 51.2%, just 10 basis points lower than the prior quarter as the negative effects of end-market mix and a less favorable dollar-yen exchange rate were offset by cost reductions. Non-GAAP operating expenses were $32.6 million for the quarter, down $400,000 from the prior quarter, reflecting the impact of our year-end shutdown. Non-GAAP operating margin was 21%.

The non-GAAP effective tax rate for the quarter was just under 4%, resulting in non-GAAP net income of $0.74 per diluted share for the quarter compared to $0.78 in the prior quarter. On a GAAP basis, we reported a loss of $0.57 per share for the quarter, reflecting the tax charge.

For the year, revenues grew 11% to $431.8 million. Revenue mix for the year was 38% Consumer, 33% Industrial, 24% Communication and 5% Computer. Together, Consumer and Industrial made up 71% of our sales compared to 67% in the prior year. The shift in end-market mix had a beneficial effect on our gross margin, offsetting the negative impact of a less favorable dollar-yen exchange rate, which increased the cost of wafers from our Japanese foundries.

All told, our non-GAAP gross margin ticked up by 10 basis points from the prior year to 50.7%. At current exchange rates, we would see no significant gross margin impact related to the yen in 2018. Based on that assumption, I expect further cost reductions to drive our non-GAAP gross margin modestly higher compared to the 2017 full year number.

Non-GAAP operating expenses increased by about 7.5% for the year to $130.5 million, with the largest proportion of the growth coming from R&D. We continue to track to our long-term model, which calls for OpEx to grow at roughly 60% of the revenue growth rate. Over the past 2 years, our revenue growth has averaged 12%, while operating expenses have averaged growth of 6%. Our non-GAAP operating margin has expanded by 250 basis points over the 2-year period, coming in at 20.4% for 2017.

Our non-GAAP tax rate for the year was just under 5%, resulting in non-GAAP earnings of $2.84 per diluted share, an increase of 12% year-over-year. GAAP earnings were $0.90 per diluted share, including the impact of the tax charges.

We had another strong year from a cash flow perspective, generating $82 million in cash from operations. That's lower than the prior year, reflecting the prepayments to foundry partners in order to secure capacity for future growth.

In a similar vein, our capital expenditures for the year were above our typical run rate, coming in at $32.5 million. While some of the increase is simply a function of mean reversion following a below-average spend in the prior year, it also reflects stepped-up investments in capacity and systems as we plan for future growth. While I expect capital expenditures to remain somewhat higher than our historical average in 2018, I do anticipate a reduction from the 2017 level.

Cash and investments on the balance sheet totaled $283 million at quarter end, an increase of about $19 million during the fourth quarter and $32 million for the year. As Balu noted, our board has allocated an additional $30 million to our repurchase authorization, which stood at $44.4 million at quarter end, while also upping our quarterly dividend to $0.16 per share.

Looking ahead, we expect first quarter revenues to be in the range of $103 million, plus or minus $3 million. I expect non-GAAP gross margin to be around 51.5% for the first quarter, which would be a slight sequential increase compared to the fourth quarter. Non-GAAP operating expenses will be higher on a sequential basis, primarily reflecting seasonal factors such as resumption of FICA taxes and the comparative effect of the year-end shutdown in Q4.

Specifically, I expect non-GAAP expenses to be in the range of $34 million to $34.5 million. Our non-GAAP effective tax rate should be between 7% and 8%, consistent with our expectations for the full year.

And with that, I'll turn it back over to Joe.

Thanks, Sandeep. We'll open it up now for the Q&A session. Mike, would you please give the instructions for the Q&A?

(Operator Instructions) Your first question is from Ross Seymore with Deutsche Bank.

The first thing I want to get into was the bookings trajectory, Balu, that you talked about, where you said December weakened but then January came back stronger. Could you just talk a little bit about the linearity of that, the magnitude of it, and if there are any meaningful differences between the 2 sides or 2 end markets that you pointed out, the handset side and the appliance side?

So the bookings-wise, it does -- it looked pretty normal through November and December had a sharp decline, and then it came back really strong in January. And January is usually a strong month, but December, we have never seen such a significant dropoff in the past. If you look at the whole of Q4, it was only slightly lower in bookings than Q3. So it really looked like a normal quarter until December happened. Did you have -- did I answer your question, or did you -- do you have something else to ask on the January?

No -- well, any color between -- you highlighted 2 things. I don't think any of us are surprised by the handset side of things, but the appliance side was a little bit of a surprise. So if you could just give a little bit of color on what you thought was going on there and if the rebound was more acute than the decline for either of those 2 end markets.

Okay. So if you look at the end markets, all of the end markets were down in Q4, so it was pretty broad. Now if you look further, deeper into it, there were -- the Chinese cellphone demand was particularly down, and appliances, which is usually stronger in Q4 because of its air conditioning, was surprisingly down on a sell-through basis. So on a sell-through basis, all 4 of them were down. Another interesting thing is it sounded like the distributors were as surprised as we are because we were shipping all the way through December, and in fact, we could have probably shipped a little bit more at the end of December because of some mix issues. So it doesn't look like the distributors realized that the demand is going to slow down until very late in the game. And historically, the sell-through in Q4 is always stronger than sell-in because the distributors are trying to minimize inventory. And it was the opposite this time. The sell-through was actually weaker than sell-in, which is also a surprise.

One more thing I would add is that in November, we allowed the distributors to return some of their inventory if they choose to, and they didn't take full advantage of it this time, which, again, tells me that even in November, they didn't think the demand was going down. So if you look at the market, in the appliance market, we -- it looks like there was a significant inventory overhang. And so that has caused appliance customers to buy less from the distributors. And as far as the cellphone, of course, that's well known. The Chinese cellphone demand was down 4% for last year after 8 years of growth. And it looks like it is going to be continuously softer going into Q1.

So typically also, Ross, air conditioning starts picking up in Q4, and part of the inventory that we saw increase in the channel was related to that. And it could have been that in the -- especially in the air conditioning area of appliance we have had a tremendous year with nearly a 30% increase, and that's probably got a little adjusted. And plus, we've also heard in China, the government trying to tamper down on speculative building investments.

That's really helpful. And just one quick follow-up then on the expenditure side of things. You probably don't want to be too precise, but you talked, Sandeep, about the CapEx coming down but still being up versus normal. Can you remind us what normal is?

Well, normal is, typically, we spend about $20 million a year, if you look at it. Prior to 2017, in the prior 2 years, we were actually spending much lower than that. So the norm is about $18 million to $20 million. So this year, we did -- in 2017, we did $32.5 million. In 2018, the best I can tell at this point is somewhere in the $25 million to $30 million range.

The next question is from Tore Svanberg with Stifel.

First question, back to Ross' topic. So if cellphone is going to remain weak in Q1, what was it that sort of bounced back sharply in January? Was that the appliance business?

It's hard to tell until we actually under -- analyze exactly where these products end up. But January is usually a strong month because of Chinese New Year. And this January, we booked almost as much as last January, even though last January, the Chinese New Year was earlier. This time it's going to be in the middle of February. So it's a good sign that it's coming back, but it still doesn't tell us the whole story for the entire quarter because February is going to be very soft in terms of bookings because of the lunar new year and then we'll have to see how March turns out.

Very good. And regardless of the quarter-to-quarter moves in the end markets, your strategy has always been to grow by expanding your SAM. And I know, in the past, you've talked about '18 being a big year for SAM expansion. Can you -- is there anything else that you can share with us on that topic, especially in relation to that $4 billion number that you've mentioned in the past?

That is going on track. We have introduced, as you know, a number of revolutionary products, and we have a lot more to come this year. And by the end of this year, we expect our SAM to be crossing $4 billion. So that's still on plan. In terms of growth into the SAM, the biggest area where we've seen the delay is USB PD, and we talked about it last time. We expected USB PD to take off early this year, but thanks to delays in the specifications, it looks like it will be in the second half of this year. We have a number of designs going on, and we had already talked about, in my script, 2 or 3 -- 2 designs in USB PD. We already had one in cellphones earlier. But there's a lot more coming, and we expect the USB PD to gradually start ramping in the second half and 2019 should be a very strong year for USB PD. And even appliances, we expect appliances to bounce back because it has been a -- it's been growing double digits for a long period of time. And we had a very strong growth last year. Air conditioning alone, we grew 30% over 2016. But our feeling is maybe it's a little bit overdone, and maybe there's a little bit of overhang and that will hopefully clear in Q1.

Very good. Just one last question. You've seen strong growth in Industrial, and I know China has been a big part of the high-power growth. As we look at this year, and maybe even next year, have you identified any potential opportunities, especially in North America, when it comes to big CapEx projects that you could take advantage of in high-power?

Yes, in North America, the big change we are seeing is that the oil production is coming back. So we had a significant share of the oil exploration market, and we see that coming back this year. On the China side, we have done very well in high-voltage DC projects last year. This year, in the first quarter, it is -- the first quarter is usually down for high-power seasonality-wise. But this year, it seems to be weaker-than-normal seasonality. Part of the reason is that China has put some of the high-voltage projects on hold for a few months. It looks like it will get restarted again in Q3 or Q4 of this year. But having said that, it is a multiyear project with a lot of SAM, and we are very optimistic that we are in a very strong position in that market. But like any government-driven programs, it is somewhat controlled by their decision-making on expenditures and so on.

The next question is from David Williams from Drexel Hamilton.

I guess, first, could you kind of maybe talk about how you're thinking about the channel inventory? Is it in line with what your expectations are? Do you think we've digested most of the excess inventories that are in the channel? And are you expecting that to be pretty much rationalized as we get into maybe the back half of the first quarter?

So the channel inventories are a little elevated, ending at about 8.4 weeks, and that is what Balu had earlier alluded, that typically, we expect our sell-through to be higher than sell-in in the fourth quarter as people tend to adjust the inventory. But because of the inventory overhang in the appliance area as well as the softness in the cellphones, it got elevated. We expect -- and that's why you can see that we have adjusted our Q1 guide to reflect that increase. If I have to look ahead, I think the normalization would probably happen in the first half, but I think more so by the second quarter.

And then just kind of thinking about on the handset side, we've got Mobile World Congress coming up. Several flagships are expected to be released there. I know you've got Samsung that -- theirs should be coming out, I believe, in probably the second quarter. It sounds like there's some good movement going on in some of the non-Chinese handsets. Are you seeing that, I guess, in your business? And is most of the weakness coming out of China, or is it more maybe broad-based?

Well, it's mostly from China, but we have a skewed exposure to China simply because China was the early adopter of rapid charging. So we got a number of designs with the large OEMs in China. In fact, we have designs at all of the large OEMs in China. So because we focus on rapid charging, a large portion of our business, more than 2/3 of our cellphone business, comes from China. So we have kind of a skewed impact on that.

Great. And just in terms of capacity expansion, where are you on that? In your terms under last year, you talked about the $30 million, bringing that on. Where do you think you are in terms of getting back to capacity or to the capacity that you had expected to be at?

Well, capacity, kind of the expense has come in waves because some of the capacity you can only put in certain chunks. We've talked about adding one more fab to expand our capacity, then also expanding capacity with our existing suppliers by helping them financially in some fashion or prepaying for wafers in some cases. But on top of that, we're also putting in capacity for testers and handlers, which will happen gradually. Even though we may buy the testers and handlers, we won't deploy them in production until we need them. So the whole thought process is that based on our forecast, long-term forecast of low double-digit growth, we are planning our capacity for the next several years, and -- but some of it comes in chunks.

The next question is from Liz Pate with Susquehanna Financial.

Just a quick question on the channel inventory. If you think it's normalizing by the second quarter, should we be thinking about sequential growth in 2Q, I guess, 1Q really being the trough this year?

Well, so it's pretty early to talk about that, but traditionally, I mean -- if historically, if you've looked at it, the second quarter is a quarter of growth from the first quarter. So based on that, we are expecting; how much is yet to be seen.

Right. Okay. And then just a question on InnoSwitch3, if I can. I guess, last quarter, you talked about the project -- the product making progress in the Consumer segment. Are there areas outside of Comms and Consumer where you've seen some uptake on that line?

There's a lot of designs going on. There are several hundred opportunities that we are following with InnoSwitch3. It's still in the early stages because many of the markets, like Industrial and Consumer, have a longer design cycle than, for example, the cellphone business. And within the cellphone business, Inno3 is really targeted towards higher-power chargers, which is now tied to USB PD. When people move to USB PD, the power levels will go up wherein Inno3 will become a very attractive solution for them. Once again, we are working with a dozen different designs for USB PD solutions. We already mentioned 3 of them. There's a lot more to come. And it's a brand-new standard, people are getting educated, getting designs done, they had to get compliance work done. And our expectation is that the production will start -- preproduction will start in Q3 and gradually grow through Q4 and through all of 2019. 2019 should be a strong growth year for Inno3 in the USB PD application.

(Operator Instructions) The next question is from Ed Roesch with Sidoti & Company.

One quick question. You mentioned the geographic footprint of the cellphone business. Could you just -- can you speak on appliances, how that's distributed a bit geographically?

Well, appliances are a very different story. It is -- we have a very high share of pretty much all of the appliance manufacturers around the world. It would be hard to name an appliance company that we don't have a very high share in. So that's very, very broad. So we are directly tied to the appliance market. Having said that, our content in appliances has been continuously going up, even though appliance in unit volume hasn't grown as fast, but our dollar content and therefore our SAM has been growing much faster. And this is related to the fact that there is more electronics going into appliances, appliances which didn't have any electronics even a few years ago, like coffeemakers, now have electronics in them. And we have very high share of the coffeemaker market.

And on top of that, all of the new features they're adding, whether it's moving from AC motors to DC motors for lower power consumption or adding network capability for IoT-type features, or LED lighting, which typically requires a separate power supply, all of that is increasing our content. Either in terms of number of power supplies or even if it is a single power supply, it now needs to be a higher-power power supply, which means our ASP is higher. So that's a very attractive market for us, very sticky business, and we look forward to many, many years of strong growth in that market. We think that this is just a blip. It was just a little bit of overdoing in terms of buying too many parts in anticipation of -- or as a result of a very strong growth in 2017. And we -- our expectation is by Q2, this market will recover. Even in Q1, we may see some recovery.

Okay. And then one clarification about the lunar new year, the shifting to February this year from January last year, if I understand it correctly. Do you think that, that was -- that, that shift is a significant contribution or made a significant impact on the strength you saw in January orders?

Well, the point I was trying to make is that usually, before the lunar new year, they tend to place all the orders they want because when they come back, they want to restart with all the parts in place. So to the extent the lunar new year is earlier like it was last year, it made the January unusually strong because they book everything in January and they don't like to have too much inventory on their books as they exit the year -- previous year. So -- but what I was trying to say was this January was almost as strong as last January, although it was a little bit less than last January, but it was so independent, even though the new lunar new year is not until the 16th of February. That is a good indication. That means that the demand, at least the distributors think the demand is coming back. But it still doesn't tell us the whole story for the quarter because the February generally gets very quiet. I mean, in this case, we probably get 1 week of good bookings in February. After that, it basically goes to sleep, at least from Asia, for a couple of weeks, and then it is really the March that will tell us what the total bookings for Q1 would be and how much growth we would get in Q2.

Your next question is from the line of Ross Seymore with Deutsche Bank.

Just 2 quick clarifications. You talked a bit about what is going on in the China handset market and you talked about how big that was within your handset exposure. Any rough guidance on the 24% that you label Communications, how much of that is handsets?

I would say roughly about 80% is handsets.

Great. And then the only other follow-up is there's a lot of moving parts in the first half of this year with inventory, et cetera, then you talked about USB PD in the back half of the year. In the last couple of years, you've, on this similar call, you've talked about the end markets that you expected to be the stronger ones or weaker ones, et cetera, for the year as a whole. Could you give us that color, again looking at 2018?

Yes. From what we can tell, all 4 of our end markets should grow in 2018. Our forecast shows growth in all of them. Now, Q1 is a little bit trickier just to explain, because of all the complexity as I mentioned. But if I were to guess, Q1 has the strongest -- in Q1, in terms -- of course, we are not growing in Q1, but the strongest market is likely to be Consumer, because I think that appliance is likely to come back. Usually Q4 and Q1 are strong quarters for appliance.

Great. Is that despite the inventory burn that you said you ended with -- the channel with? Because I'm a little surprised that appliance would be that strong. It was already part of the inventory?

Well, so it's basically I think where Balu is talking is relatively from a mix standpoint and not in terms of -- because obviously we're guiding down. Typically, air conditioning starts coming back in Q4, it didn't. So -- and we think that was related to the inventory position. And we are hoping that, that will be back in Q1.

And there are no further questions at this time. I will turn the call back over to the presenters.

Okay. Thank you. That's enough for the questions. We'll leave it there. There will be a replay of this call available on our website, which is investors.power.com. Thanks again for listening, and good afternoon.

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