Silicon Laboratories Inc (SLAB) 2024 Q3 法說會逐字稿

My name is Michelle and I will be your conference operator today. Welcome to the Silicon Labs third quarter fiscal 2024 earnings call at this time.

我叫米歇爾，今天我將擔任你們的會議操作員。歡迎此時參加 Silicon Labs 2024 財年第三季財報電話會議。

(Operator Instructions) Please be advised that today's conference is being recorded. I would now like to turn the call over to Giovanni Pacelli, Silicon Labs' Senior Director of Finance. Giovanni, please go ahead, sir.

（操作員指示）請注意，今天的會議正在錄製中。我現在想將電話轉給 Silicon Labs 高級財務總監 Giovanni Pacelli。喬瓦尼，請繼續，先生。

Thank you Michelle and good afternoon everyone. We are recording this meeting and a replay will be available for four weeks on the investor relations section of our website at investor.silabs.com. Our earnings press release and the accompanying financial tables are also available on our website.

謝謝米歇爾，大家下午好。我們正在錄製這次會議，並將在我們網站 Investor.silabs.com 的投資者關係部分提供為期四週的重播。我們的收益新聞稿和隨附的財務表格也可以在我們的網站上找到。

Joining me today are Silicon Labs' President and Chief Executive Officer, Matt Johnson; and Chief Financial Officer, Dean Butler. They will discuss our third quarter financial performance and review recent business activities.

今天與我一起出席的有 Silicon Labs 總裁兼執行長 Matt Johnson；兼首席財務官迪恩·巴特勒。他們將討論我們第三季的財務表現並回顧最近的業務活動。

We will take questions after our prepared comments and our remarks today will include forward-looking statements that are subject to risks and uncertainties. We base these forward-looking statements on information available to us as of the date of this conference call and assume no obligation to update these statements in the future. We encourage you to review our SEC filings which identify important risk factors that could cause actual results to differ materially from those contained in any forward-looking statements.

我們將在準備好評論後接受提問，今天的言論將包括受風險和不確定性影響的前瞻性陳述。我們的這些前瞻性陳述是基於截至本次電話會議之日我們所掌握的信息，並且不承擔將來更新這些陳述的義務。我們鼓勵您查看我們向 SEC 提交的文件，其中確定了可能導致實際結果與任何前瞻性聲明中包含的結果有重大差異的重要風險因素。

Additionally, during our call today, we will refer to certain non-GAAP financial information. A reconciliation of our GAAP to non-GAAP results is included in the company's earnings press release and on the investor relations section of our website. I'd now like to turn the call over to Silicon Labs' Chief Executive Officer, Matt Johnson.

此外，在今天的電話會議中，我們將參考某些非公認會計準則財務資訊。我們的公認會計原則與非公認會計原則結果的調節包含在本公司的收益新聞稿和我們網站的投資者關係部分。我現在想將電話轉給 Silicon Labs 執行長 Matt Johnson。

Thanks, Giovanni, and good afternoon, everyone. Silicon Labs delivered solid third-quarter results with revenue and earnings exceeding the midpoint of our guidance.

謝謝喬瓦尼，大家下午好。Silicon Labs 第三季業績強勁，營收和利潤超過了我們指導的中點。

Our surveys indicate that many of our customers' excess inventory levels have now normalized. However, there remain outliers whose destocking will continue to take time. Bookings patterns and distribution POS have modestly improved but have not significantly accelerated, indicating to us that a demand recovery is likely to be more gradual than many of our customers originally expected.

我們的調查表明，許多客戶的過剩庫存水準現已正常化。然而，仍然存在異常情況，其去庫存仍需要時間。預訂模式和分銷 POS 略有改善，但並未顯著加速，這表明需求復甦可能比許多客戶最初預期的更為漸進。

Broadly speaking, the majority of our customers remain positive looking forward into 2025. Our current quarter outlook reflects near-term uncertainty around the timing of a more robust end-market recovery and importantly, does not assume any significant channel restocking.

整體而言，我們的大多數客戶對 2025 年仍持正面態度。我們目前的季度前景反映了終端市場更強勁復甦時間的近期不確定性，重要的是，沒有假設任何重大的通路補貨。

Looking ahead, our growth in the near to midterm is underpinned by design win ramps in the secular growth areas that we have previously discussed including connected health, smart metering, and commercial retail as well as many other applications. We are currently ramping shipments to multiple customers in all of these and are confident we are gaining share in these markets, giving us conviction in our growth opportunity moving forward.

展望未來，我們中短期的成長得益於我們之前討論過的長期成長領域的設計勝利，包括互聯健康、智慧計量和商業零售以及許多其他應用。目前，我們正在增加對所有這些領域多個客戶的出貨量，並有信心在這些市場中獲得份額，讓我們對未來的成長機會充滿信心。

Over the last quarter, Silicon Labs Works With developer conference was a huge success. We hosted over 500 unique existing and new customers in person for two days as well as our ecosystem partners including Amazon, Google, Samsung, and now NVIDIA. At Works With and at embedded world North America, our CTO, Daniel Cooley, and I delivered keynotes in discussing how AI is rapidly becoming a growth catalyst that will enable the total number of IoT devices to reach over $100 billion over the next decade.

上個季度，Silicon Labs Works With 開發者大會取得了巨大成功。在兩天的時間裡，我們親自接待了 500 多名獨特的現有和新客戶，以及我們的生態系統合作夥伴，包括亞馬遜、谷歌、三星和現在的 NVIDIA。在北美嵌入式世界大會上，我們的技術長 Daniel Cooley 和我發表了主題演講，討論人工智慧如何迅速成為成長催化劑，使物聯網設備總數在未來十年內達到 1000 億美元以上。

We also detailed the continued success of our industry-leading Series 2 platform and new-to-industry capabilities of our upcoming Series 3 platform. Simply said, AI not only enables better use of existing IoT devices, it will also enable and accelerate even broader device deployments moving forward, further expanding the Silicon Labs addressable market.

我們還詳細介紹了業界領先的 Series 2 平台的持續成功以及即將推出的 Series 3 平台的行業新功能。簡而言之，人工智慧不僅可以更好地利用現有的物聯網設備，還可以實現並加速更廣泛的設備部署，進一步擴大 Silicon Labs 的潛在市場。

At the product level, we are currently shipping Series 2 devices with integrated machine learning inference engines. This includes our xG24 family of SoCS, a device where Silicon Labs was first to bring machine learning acceleration to wireless SoCs and still currently delivers more performance per unit of power consumption than any other wireless SoC based on a recently publicly available benchmark done by a third party.

在產品層面，我們目前正在推出具有整合式機器學習推理引擎的系列 2 設備。這包括我們的 xG24 系列 SoC，這是 Silicon Labs 率先將機器學習加速引入無線 SoC 的設備，並且目前根據第三方公司最近公開的基準測試，每單位功耗的性能仍然高於任何其他無線 SoC。 。

Also in the quarter, we announced Series 2 enablement of Bluetooth Channel Sounding on our xG24, enabling secure and precise distance measurement between Bluetooth devices and opening the door for a new wave of proximity-based applications in home security, location tracking, geo-fencing, vehicle keyless entry, and building access control. This capability is already driving another wave of customer interest and design wins on our Series 2 platform at existing and new customers.

同樣在本季度，我們宣佈在 xG24 上啟用藍牙通道探測系列 2，從而實現藍牙設備之間安全、精確的距離測量，並為家庭安全、位置跟踪、地理圍欄領域新一波基於鄰近的應用打開大門、車輛無鑰匙進入及樓宇門禁管制。這項功能已經引起了新一波客戶興趣，並在我們的系列 2 平台上贏得了現有和新客戶的設計勝利。

At the same time, we are now sampling our first Series 3 device to customers which is purpose-built to extend our successful Series 2 architecture to new-to-IoT levels of performance for the industry. For example, Series 3 will have dedicated hardware acceleration to create the world's most flexible IoT modem, dedicated security cores designed to enable post-quantum-level encryption, and an advanced machine learning core designed to enable an order of magnitude increase in performance over our already industry leading energy per inference benchmarks.

同時，我們現在正在向客戶提供第一款 Series 3 設備樣品，該設備是專門為將我們成功的 Series 2 架構擴展至行業物聯網性能新水平而設計的。例如，Series 3 將擁有專用硬體加速來創建世界上最靈活的物聯網調變解調器、旨在實現後量子級加密的專用安全核心，以及旨在使性能比我們的產品提高一個數量級的先進機器學習核心。已經是業界領先的能源推理基準。

We are excited with our progress on Series 3 and our Series 2 platform continues to build momentum with new exciting products and features, growing market share, and new use cases through its industry leading power consumption, security, and multiprotocol wireless performance. This includes our first Wi-Fi 6 device, the 917, which we expect to be in ramping at customers as early as Q1 of 2025 and can deliver up to two years of battery life on a single AAA battery. This equates to meaningfully better battery life versus any competing alternatives.

我們對系列3 的進展感到興奮，而我們的系列2 平台繼續透過令人興奮的新產品和功能、不斷增長的市場份額以及透過其行業領先的功耗、安全性和多協議無線性能的新用例來建立動力。其中包括我們的首款 Wi-Fi 6 設備 917，我們預計該設備最早將於 2025 年第一季向客戶推出，單節 AAA 電池可提供長達兩年的電池壽命。與任何競爭替代品相比，這相當於顯著延長電池壽命。

Customer engagement with our 917 device is strong, and we are ramping our design wins quickly across multiple application spaces. Our initial intent in Wi-Fi is to work with our broad existing customer base to identify opportunities for pull-through and applications where Wi-Fi is becoming more relevant and where power consumption and security are also key requirements.

客戶對我們 917 設備的參與度很高，我們正在多個應用領域快速提升我們的設計成果。我們在 Wi-Fi 領域的最初目的是與廣泛的現有客戶群合作，尋找 Wi-Fi 變得越來越重要且功耗和安全性也是關鍵要求的拉通和應用機會。

We've been investing significantly in Wi-Fi because of our firm belief in its relevance and growth potential within our IoT space. We're hyper focused on driving the same market share expansion of Wi-Fi that we're currently achieving with our Bluetooth solutions after increasing our strategic focus in that technology around five or six years ago.

我們一直在 Wi-Fi 方面進行大量投資，因為我們堅信 Wi-Fi 在物聯網領域的相關性和成長潛力。在大約五、六年前增加了對 Wi-Fi 技術的策略重點之後，我們非常專注於推動 Wi-Fi 市場份額的擴大，就像我們目前透過藍牙解決方案所實現的那樣。

In addition, we are continuing our focus and growth in Bluetooth. Not only is it now our fastest-growing technology by revenue, but it is now our largest opportunity pipeline by technology as well. Our early integration of new-to-industry capabilities like PSA Level 3 security and benchmark setting machine learning performance continues to generate strong engagement and growth. Lastly, our commitment to building matter infrastructure, alongside our leadership in thread technology positions us well as trusted partner to ISPs, ecosystems, and developers who are working to integrate matter into their solutions and support interoperability of edge devices.

此外，我們將繼續關注藍牙領域並不斷發展。它不僅是我們現在收入成長最快的技術，現在也是我們最大的技術機會管道。我們對 PSA 3 級安全性和基準設定機器學習性能等新行業功能的早期整合繼續產生強勁的參與度和成長。最後，我們對構建物質基礎設施的承諾以及我們在線程技術方面的領先地位，使我們成為ISP、生態系統和致力於將物質整合到其解決方案並支援邊緣設備的互通性的開發人員值得信賴的合作夥伴。

Overall, in the near term, the timing of the end-market demand recovery remains uncertain. However, we expect a solid growth year in 2025 as the significant design wins we have driven over the last few years begin ramping to production. We will continue to focus on solid technology innovation and execution, gaining market share, and returning to our financial model as fast as possible.

整體而言，短期內終端市場需求復甦的時機仍存在不確定性。然而，隨著我們在過去幾年中取得的重大設計成果開始投入生產，我們預計 2025 年將實現穩健成長。我們將繼續專注於紮實的技術創新和執行，贏得市場份額，並儘快回歸我們的財務模式。

Now I'll hand it over to Dean for the financial update. Dean?

現在我將把它交給 Dean 以獲取最新的財務資訊。院長？

Thanks, Matt, and good afternoon to everyone. I'll first review the financial results for our recently completed quarter, followed by a discussion of our current outlook.

謝謝馬特，大家下午好。我將首先回顧我們最近完成的季度的財務業績，然後討論我們當前的前景。

Revenue for the September quarter was $166 million, up 14% sequentially and slightly ahead of the midpoint of our prior guidance. Year over year, revenue was down 18% as demand continued to be hampered by excess inventory absorption across distributors and end customers.

9 月季度的營收為 1.66 億美元，季增 14%，略高於我們先前指引的中位數。由於分銷商和最終客戶的庫存過多，需求繼續受到阻礙，收入較去年同期下降 18%。

In our industrial and commercial business, September quarter revenue was $96 million, up 10% sequentially but down 20% year over year. The sequential increase was driven by a strength in applications such as smart building controls and smart meters.

在我們的工業和商業業務中，9 月季度的營收為 9,600 萬美元，季增 10%，但年減 20%。連續成長是由智慧建築控制和智慧電錶等應用的強勁推動的。

Home and life September quarter revenue was $70 million, up 22% sequentially and down 16% year over year. As expected, home and life grew faster than industrial and commercial in the third quarter, which we believe is at least partially driven by consumer-oriented end markets being further along in their inventory correction relative to the industrial end markets. Wearable-related applications such as smart watches and fitness trackers saw strength in the quarter contributing to the 22% sequential growth.

家居與生活 9 月季度營收為 7,000 萬美元，較上季成長 22%，年減 16%。正如預期的那樣，第三季家庭和生活的成長速度快於工業和商業，我們認為這至少部分是由於以消費者為導向的終端市場相對於工業終端市場的庫存調整進一步推進。智慧手錶和健身追蹤器等穿戴式相關應用在本季表現強勁，帶動環比成長 22%。

Inventory in our distribution channel declined 2 days to end the September quarter at 53 days. We are monitoring our distribution inventory and allowing shipments into the channel to flow naturally despite being lower than target level. Distributor POS continue to grow sequentially in Q3 as we believe many long-tail customers have now worked through the majority of their excess inventory, potentially paving the path to further recovery in 2025.

我們的分銷通路庫存下降了 2 天，截至 9 月季度末為 53 天。我們正在監控我們的分銷庫存，並允許進入渠道的貨物自然流動，儘管低於目標水平。經銷商 POS 在第三季繼續環比成長，因為我們相信許多長尾客戶現在已處理掉大部分過剩庫存，可能為 2025 年的進一步復甦鋪平道路。

Distribution made up approximately 72% of our revenue mix for the September quarter, an increase from the prior quarter but below our historical distribution versus direct channel sales mix of around 80%. For the September quarter, our GAAP gross margin was 54.3%. Non-GAAP gross margin was 54.5%, which was an improvement versus 53% in the prior quarter.

分銷占我們九月季度收入組合的約 72%，比上一季增加，但低於我們歷史分銷與直接通路銷售組合約 80% 的比例。九月季度，我們的 GAAP 毛利率為 54.3%。非 GAAP 毛利率為 54.5%，較上一季的 53% 有所改善。

GAAP operating expenses were $120 million, which includes share-based compensation of $16 million and intangible asset amortization of $5 million. Non-GAAP operating expense of $99 million was below the low-end of our prior guidance range as we manage expenses during times of more limited visibility. GAAP operating loss was $30 million, and non-GAAP operating loss was $8 million, both of which were substantial improvements from the prior quarter moving us in the right direction.

GAAP 營運費用為 1.2 億美元，其中包括 1,600 萬美元的股權激勵和 500 萬美元的無形資產攤銷。非 GAAP 營運費用為 9,900 萬美元，低於我們先前指導範圍的下限，因為我們在能見度更加有限的時期管理費用。GAAP 營運虧損為 3,000 萬美元，非 GAAP 營運虧損為 800 萬美元，這兩個季度較上一季都有大幅改善，使我們朝著正確的方向前進。

During the quarter, we recorded a GAAP tax expense of approximately $2 million. Our non-GAAP tax rate remained at 20%. GAAP loss per share was $0.88. Non-GAAP loss of $0.13 per share was better than the midpoint of our guidance range due to lower operating expenses.

本季度，我們的 GAAP 稅費約為 200 萬美元。我們的非 GAAP 稅率維持在 20%。GAAP 每股虧損為 0.88 美元。由於營運費用較低，非 GAAP 每股虧損 0.13 美元優於我們指引範圍的中位數。

Turning to the balance sheet, we ended the quarter with $370 million of cash, cash equivalents, and short-term investments. Our days of sales outstanding was approximately 30 days. During the quarter, we further reduced our internal inventory by $27 million ending the quarter at $139 million of net inventory, which contributed to our positive operating cash flow of $32 million for the September quarter, despite our operating losses. Days of inventory on hand improved to 165 days, a significant improvement from the 217 days at June quarter-end.

轉向資產負債表，本季末我們擁有 3.7 億美元的現金、現金等價物和短期投資。我們的銷售應收天數約為 30 天。在本季度，我們進一步減少了 2,700 萬美元的內部庫存，本季末淨庫存達到 1.39 億美元，這為我們在 9 月份季度實現了 3,200 萬美元的正營運現金流，儘管我們出現了經營虧損。庫存天數改善至 165 天，較 6 月季末的 217 天顯著改善。

Now let me turn to our December quarter outlook. While visibility remains limited, due in part to shorter lead times, the rate of change in our customers' access inventory destocking process has decelerated after having made rapid progress over the last few quarters. While distribution POS and our own bookings have improved, the pace of our recovery remains somewhat uncertain due to the slower end-market demand.

現在讓我談談我們 12 月季度的展望。雖然可見度仍然有限​​，部分原因是交貨時間縮短，但在過去幾季取得快速進展後，我們客戶的庫存去庫存流程的變化速度已經放緩。雖然分銷 POS 和我們自己的預訂有所改善，但由於終端市場需求放緩，我們的復甦步伐仍然有些不確定。

Looking ahead to Q4, we anticipate revenue in the December quarter to be in the range of $161 million to $171 million indicating a flat quarter-on-quarter comparison, which is likely better than seasonality. Considering the relative end-market ordering patterns, we would anticipate another quarter of outperformance by our home and life products in the December quarter being somewhat offset by a muted industrial and commercial and market, therefore, resulting in our flat guidance expectations for Q4.

展望第四季度，我們預計 12 月季度的營收將在 1.61 億美元至 1.71 億美元之間，顯示出季持平，這可能好於季節性。考慮到相對的終端市場訂購模式，我們預計 12 月季度我們的家居和生活產品的另一個季度表現將被工業、商業和市場的低迷所抵消，因此，我們對第四季度的指導預期持平。

It's worth noting that the midpoint of this guidance implies a 90% year-over-year growth rate versus the trough experienced in the December quarter of 2023. Additionally, as previously anticipated, we expect to begin our initial production shipments to continuous blood glucose monitoring customers and have line of sight to full-scale customer ramps into 2025.

值得注意的是，該指引的中點意味著與 2023 年 12 月所在季度經歷的低谷相比，年成長率為 90%。此外，正如先前預期的那樣，我們預計將開始向連續血糖監測客戶發貨，並預計在 2025 年全面擴大客戶規模。

We expect GAAP gross margin in the December quarter to be in the range of 54% to 55%. We expect non-GAAP gross margin to also be in the range of 54% to 55%. We expect GAAP operating expenses in the December quarter to be in the range of $118 million to $122 million. We expect non-GAAP operating expenses in the range of $97 million to $99 million.

我們預計 12 月季度的 GAAP 毛利率將在 54% 至 55% 之間。我們預計非 GAAP 毛利率也將在 54% 至 55% 之間。我們預計 12 月季度的 GAAP 營運費用將在 1.18 億美元至 1.22 億美元之間。我們預計非 GAAP 營運費用在 9,700 萬美元至 9,900 萬美元之間。

Finally, GAAP loss per share is expected to be in the range of $0.75 to $1.05 loss. Non-GAAP loss per share is expected to be in the range of $0.01 loss to a loss of $0.21.

最後，GAAP 每股虧損預計將在 0.75 美元至 1.05 美元之間。非 GAAP 每股虧損預計在 0.01 美元至 0.21 美元之間。

This wraps up our prepared remarks. I'd like to now hand the call over to the operator to start the Q&A session. Michelle?

我們準備好的演講到此結束。我現在想將通話轉交給接線員以開始問答環節。米歇爾？

(Operator Instructions)

（操作員說明）

Srini Pajjuri, Raymond James.

斯里尼·帕朱里，雷蒙德·詹姆斯。

Thank you. Matt, you talked about bookings being somewhat uneven. Maybe you could give us some additional color on which end markets. I think, you guys are guiding for a commercial to be kind of flattish or muter seasonally?

謝謝。馬特，你談到預訂有些不平衡。也許您可以給我們一些關於哪些終端市場的額外資訊。我認為，你們正在指導廣告變得平淡或季節性地靜音？

And then home and life seems to be doing better. But within those I guess end markets, any particular sub segments or end markets that are standing out in terms of weakness? Thank you.

然後家庭和生活似乎都變得更好了。但在我認為的終端市場中，有哪些特定的子細分市場或終端市場在弱點方面表現突出？謝謝。

Sure. Yeah, I think the broad bookings statement is that, we have seen continued improvement overall, but as we said, in the prepared marks, not an acceleration that you'd want to see, to say, we're on the other side of this cycle that we're all in.

當然。是的，我認為廣泛的預訂聲明是，我們整體上看到了持續的改善，但正如我們所說，在準備好的標記中，這並不是您希望看到的加速，也就是說，我們處於另一邊我們都處於這個循環中。

In terms of the next level down, quick answer is more strength in home and life, and not as much strength in industrial and commercial, particularly industrial. Which, I guess, on one hand isn't surprising, given that it's, later into the cycle, but we'd like to see more strength from industrial than we're now seeing.

就下一個層次而言，快速的答案是家庭和生活方面的實力更強，而工業和商業方面的實力卻不那麼強，尤其是工業。我想，一方面這並不奇怪，因為它是在週期的後期，但我們希望看到工業比現在看到的更有力量。

Okay, got it. Maybe a quick follow up. We hear a lot about edge AI and obviously you have a very strong position in IoT and you did talk about that as well. I'm just curious, I mean, when we look at these markets, we always tend to think in terms of units and ASPs. So maybe, if you can help us understand, as we see more and more AI functionality in these applications, what sort of ASP uplift are you seeing and what should we expect as we, look out to the next couple of years? Thank you.

好的，明白了。也許是快速跟進。我們聽說了很多關於邊緣人工智慧的事情，顯然您在物聯網領域擁有非常強大的地位，您也確實談到了這一點。我只是很好奇，我的意思是，當我們審視這些市場時，我們總是傾向於從單位和平均售價的角度來思考。因此，也許，如果您可以幫助我們理解，隨著我們在這些應用程式中看到越來越多的人工智慧功能，您看到了什麼樣的ASP 提升，以及我們在展望未來幾年時應該期待什麼？謝謝。

Sure. So quick answer is it definitely would lift ASPs. That's the first thing. It's important just for framing that there's multiple levels of this, right? As we've said in some of our key notes, as well as the prepared remarks, we do see AI accelerating IoT edge adoption ultimately, whether it's improving the usefulness of existing deployments or helping accelerate broader deployments. So that's exciting and encouraging to see.

當然。快速回答是，它肯定會提高平均售價。這是第一件事。對於框架而言，有多個層次很重要，對嗎？正如我們在一些關鍵說明以及準備好的評論中所說的那樣，我們確實看到人工智慧最終會加速物聯網邊緣的採用，無論是提高現有部署的實用性還是幫助加速更廣泛的部署。所以這是令人興奮和鼓舞的。

At the device level, simply said it takes more cores, more compute, more silicon space, more performance to bring inference at the edge. What we shared, in the early remarks is we have production release devices that provide industry leading inference at the edge for machine learning for battery powered applications.

在設備層面，簡單地說，需要更多的核心、更多的運算、更多的矽空間和更高的效能才能在邊緣進行推理。我們在前面的評論中分享的是，我們擁有量產發佈設備，可為電池供電應用的機器學習邊緣提供業界領先的推理。

And we see that increasing in its adoption and for sure when customers use those, there's an ASP lift associated with that. So think of it as ASP lift and I also add -- you should also think of it as SAM expansion because it opens the door to additional application and use cases for our devices. So net positive for us on product level and end market adoption level.

我們看到它的採用率不斷增加，當客戶使用它們時，肯定會出現與之相關的平均售價提升。因此，將其視為 ASP 提升，我還補充說，您還應該將其視為 SAM 擴展，因為它為我們的設備打開了額外應用程式和用例的大門。因此，對於我們的產品水平和終端市場採用水平來說，這是積極的。

Got it. Thanks Matt.

知道了。謝謝馬特。

Quinn Bolton, Needham & Company.

奎因·博爾頓，李約瑟公司。

Guys, Nick Doyle on for Quinn. Thanks for taking my questions. You guys mentioned no channel restock next quarter. So I guess how are you thinking about the distributor mix overall? And can that mix get back to 80% in the early 2025? Thanks.

夥計們，尼克道爾 (Nick Doyle) 替補奎因 (Quinn)。感謝您回答我的問題。你們提到下個季度沒有頻道補貨。所以我猜你對經銷商組合的整體看法如何？到 2025 年初，這一比例能否恢復到 80%？謝謝。

Yeah, Nick, we're not assuming that there's a broad restocking into the channel. I would just remind everybody that our target channel days of inventory is approximately 70 to 75. We just ended the quarter at 53. The prior quarter was 55. And so really, I think to see the channel restock is going to take several quarters.

是的，尼克，我們並沒有假設通路中有大量補貨。我只想提醒大家，我們的目標通路庫存天數約為 70 至 75 天。我們剛剛以 53 的季度結束。上一季為 55。事實上，我認為通路補貨需要幾個季度的時間。

I think as POS continues to grow, as confidence and customer forecast continue to grow, which they have sequentially every quarter, you'll gradually see distributors continue to take more and more stock and put them on the shelves as turns actually go up. And that's one of the notable things that I think we've seen in the last quarter, is to have short lead times, turns orders coming in which of course is, heavily dependent on the channel being able to support that.

我認為，隨著POS 的不斷增長，隨著信心和客戶預測的持續增長（每個季度都會依次增長），您將逐漸看到分銷商繼續持有越來越多的庫存，並隨著實際週轉量的增加而將它們放在貨架上。我認為我們在上個季度看到的值得注意的事情之一是交貨時間短，訂單數量當然在很大程度上取決於管道是否能夠支持這一點。

In terms of getting the channel back to closer to our historical mix of about 80%, we're in no rush. I think ultimately, that's where the company heads back to kind of our normal course of business. But again, the channel is made up of tens of thousands of customers and we're going to just slowly, continue to participate and support our customers as they continue to grow, as their destocking gets over with and they return back to normal consumption.

就讓通路恢復到更接近我們歷史上約 80% 的比例而言，我們並不著急。我認為最終，這就是公司回歸正常業務流程的地方。但同樣，該管道由數以萬計的客戶組成，隨著客戶的不斷增長，隨著他們的去庫存結束並恢復正常消費，我們將慢慢地繼續參與和支持他們。

And once you get back to that point, I would expect it to get back near to that 80%. But it didn't take a few quarters. You won't see that move in one quarter, you won't probably see it move in two quarters. It's just a little bit of a patience game, I'd say Nick.

一旦回到那個點，我預計它會回到 80% 附近。但這並沒有花費幾個季度的時間。你不會在一個季度內看到這種變化，你也可能不會在兩個季度內看到它的變化。我想說，尼克，這只是一個有點耐心的遊戲。

Thanks, helpful. The second question on CGMs. You mentioned line of sight to full ramps in 2025. Can you give us any more details on what that looks like in terms of units? I think you've talked about millions or tens of millions of an opportunity and, I think online, I think CNBC was talking about 100 million unit or more in terms of the overall market. So any help there, it would be nice. Thanks.

謝謝，有幫助。關於 CGM 的第二個問題。您提到 2025 年視線可到達完整的坡道。您能給我們更多有關單位的詳細資訊嗎？我想你已經談到了數百萬或數千萬的機會，而且我認為在網路上，我認為 CNBC 正在談論整個市場的 1 億或更多。因此，如果有任何幫助，那就太好了。謝謝。

Yeah. So as we've said in the past and it's unchanged. Easy way to think of it is as a company essentially, very little historical revenue and continuous glucose monitors and insulin management in general. We've shared multiple design wins at multiple end customers. We've said more than a dozen and we are starting to see those ramp and, as we exit this year. So we expect that those would start contributing in a way they haven't been able to as we go into 2025.

是的。正如我們過去所說的那樣，它沒有改變。簡單的理解方式是，它本質上是一家公司，歷史收入很少，而且一般都有連續血糖監測儀和胰島素管理。我們在多個最終客戶中分享了多項設計成果。我們已經說過十多個，隨著我們今年的退出，我們開始看到這些成長。因此，我們預計，隨著 2025 年的到來，這些人將開始以他們無法做到的方式做出貢獻。

To answer your question directly, we believe that that end market represents hundreds of millions of units of opportunity. And that's a statement in terms of the, SAM or served available market there. And we feel that we're doing a pretty good job at securing market share there and we expect that to continue moving forward.

為了直接回答您的問題，我們相信終端市場代表著數億單位的機會。這是針對 SAM 或那裡的可用市場的聲明。我們認為我們在確保市場份額方面做得非常好，並且我們預計這種情況將繼續向前發展。

Thank you.

謝謝。

Cody Acree, The benchmark Company.

Cody Acree，基準公司。

Yeah, guys. Thanks for taking my questions. Maybe if you can just talk about your in consumption levels with revenue here in the back half about flat obviously, after a strong sequential improvement in Q3, what do you think that that is saying about your in consumption levels?

是的，夥計們。感謝您回答我的問題。也許如果您可以談論您的消費水平，在第三季度的強勁連續改善之後，後半段的收入明顯持平，您認為這對您的消費水平有何影響？

Yeah. So it'd be good to hear from Dean as well. The quick answer is not at consumption yet, Cody, is the quick answer. We've seen an improvement in the end customer excess inventory that destocking has made a big impact and working those levels down. But as we've also said, it's not complete yet and still has some more work to be -- ahead for that to be complete. So getting closer to consumption but not there yet.

是的。所以很高興收到 Dean 的來信。科迪，快速答案還沒有被消費，這就是快速答案。我們已經看到最終客戶的過剩庫存有所改善，去庫存產生了重大影響，並降低了這些水準。但正如我們也所說的，它還沒有完成，仍然還有一些工作要做——才能完成。離消費越來越近了，但還沒有實現。

And just as a reminder, big, big picture, the, the three big pieces we've been talking about. One is that in inventory getting closer but not corrected yet, but definitely has gone in the right direction and we've made some big gains there. Second piece is end market. End market, continues to be low in visibility and choppy and uncertain in terms of what to expect. And our customers, I think just are trying to navigate this environment and they're not sure either. I think is the honest answer.

提醒一下，大、大局，我們一直在談論的三大塊。一是庫存越來越接近，但尚未得到糾正，但肯定已經朝著正確的方向發展，我們已經在那裡取得了一些重大進展。第二塊是終端市場。終端市場的能見度仍然較低，波動較大且不確定。我認為我們的客戶只是試圖適應這種環境，但他們也不確定。我認為這是誠實的答案。

And then the third piece is our design win ramps. And as we've said, we've benefited from significant design win levels over the last few years and those are now starting to ramp and, that's giving us, the confidence to say, we see a path to continued growth here, even with the uncertain market environment that we're all dealing with.

第三部分是我們設計的獲勝坡道。正如我們所說，過去幾年我們從顯著的設計勝利水平中受益，現在這些水平開始上升，這讓我們有信心說，我們在這裡看到了一條持續增長的道路，即使我們都面臨著不確定的市場環境。

Cody, maybe I'll just add just a couple of points. One, we've made pretty rapid progress in the last three or four quarters to actually get majority of customers past their destocking process. I think as we look into Q4, what the dynamics are today is a little bit choppy in between different end markets, for example, industrial seem like that's you sort of gotten a little bit weaker lately. I don't know if there's a sort of hesitancy on some of those customers. While some of the consumer-based applications seem like they're largely past their stocking and their forecast continue to go up.

科迪，也許我只想補充幾點。第一，我們在過去三、四個季度取得了相當快的進展，實際上讓大多數客戶完成了去庫存流程。我認為，當我們研究第四季時，今天不同終端市場之間的動態有點不穩定，例如，工業似乎最近有點疲軟。我不知道其中一些客戶是否有某種猶豫。雖然一些基於消費者的應用程式似乎基本上已經過了庫存，但它們的預測仍在繼續上升。

So we still see sort of pockets of differentiation between some of the end applications. And more notably recently, we've seen a lot more short order lead times. So that short order lead times makes it hard to give us visibility on, hey, what is the next quarter, two quarters, three quarters look like as customers sort of sit on their end demand waiting until almost the last moment. So that is sort of caused a little bit of visibility, gray area for us as we look forward.

因此，我們仍然看到一些最終應用程式之間存在一些差異。更值得注意的是，最近我們發現訂單交貨時間越來越短。因此，較短的訂單交付週期使我們很難了解，嘿，下一個季度、兩個季度、三個季度會是什麼樣子，因為客戶幾乎是在最後一刻等待著他們的最終需求。因此，當我們展望未來時，這給我們帶來了一些可見性和灰色地帶。

But largely I think people, we are making progress and I think we're not quite there yet on end market consumption level. But we're making progress every quarter. And every quarter, a little bit of pockets change and those customers move past and it looks more and more positive.

但我認為，人們在很大程度上，我們正​​在取得進展，但我認為我們在終端市場消費水準上還沒有完全達到目標。但我們每季都在取得進步。每個季度，資金都會發生一些變化，這些客戶也會過去，情況看起來會越來越正面。

Thanks for that color. It's very helpful. Maybe if you can just carry on that thought into the first quarter. Any quick thoughts on normal seasonality or what your order rates are suggesting for the first half?

謝謝那個顏色。這非常有幫助。也許如果你能將這個想法延續到第一季的話。對正常季節性或上半年訂單率有何建議有什麼快速的想法？

Yeah, so for the first half, I would say, there is a lot more turns orders that we're starting to see. So it gives us a little less ability of what we might be able to see into a typical Q1. Q1 for a lot of our end applications is seasonally not their strong point. I think the balancing point for us in Q1 and that I think mentioned in some of his remarks were some of the design win ramps that we see, looking to go into, mass production. We have some going here in Q4. We have some pretty good ones that looks like Q1 is going to be the right timing. So I think our focus largely around the design win ramps, Cody.

是的，所以在上半年，我想說，我們開始看到更多的輪流指示。因此，它讓我們對典型第一季的能力有所了解。對於我們的許多終端應用來說，第一季季節性並不是他們的強項。我認為我們在第一季的平衡點，我認為他在一些言論中提到的，是我們看到的一些設計勝利坡道，希望進入大量生產。我們在第四季有一些進展。我們有一些非常好的產品，看起來第一季將是正確的時機。所以我認為我們的重點主要集中在設計獲勝坡道上，科迪。

All right. Thank you guys.

好的。謝謝你們。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

Peter Ping, JP Morgan.

彼得平，摩根大通。

Good afternoon and thanks for taking my question. I want to follow up on the design win ramp maybe if you can just kind of give us on how material this could be to revenue contribution for 2025 that would be helpful versus 2024.

下午好，感謝您提出我的問題。我想跟進設計獲勝的情況，如果您能給我們介紹一下這對 2025 年的收入貢獻有多大，這對 2024 年會有所幫助。

Yeah, that's not something that we provided more color on. I think the easiest way to say it is, right now in this market environment, once the inventory destocking is complete, for all intents and purposes, we're assuming that the end consumption or demand environment is relatively flat.

是的，這不是我們提供更多色彩的東西。我認為最簡單的說法是，在目前的市場環境下，一旦去庫存完成，無論出於何種意圖和目的，我們都假設最終消費或需求環境相對穩定。

It's got change at some point. We've got to see more strength there, but we're not seeing it right now. So we're assuming that the other side of that, all the growth is coming from design win ramps. And what we've shared is we see a path to solid growth moving forward based on the design win ramps in that flat market environment. That's the most color we can provide right now.

它在某個時刻發生了變化。我們必須在那裡看到更多的力量，但我們現在還沒有看到。因此，我們假設另一方面，所有成長都來自設計勝利。我們所分享的是，我們看到了一條在平坦的市場環境中基於設計獲勝斜坡的穩健成長之路。這是我們目前可以提供的最多顏色。

Got it. Okay. And then as we think about some of these new design win ramps, maybe you can talk about whether there's any margin implications either to the up or down as we think about 2025?

知道了。好的。然後，當我們思考其中一些新設計的獲勝坡道時，也許您可以談論我們對 2025 年的思考是否會對利潤率產生任何上升或下降影響？

Yeah, no meaningful changes. We've remain committed to our overall gross margin model. We see a path to continuing doing or meeting that model. So, those ramps will definitely help our revenue but won't meaningfully change the gross margin outlook.

是的，沒有任何有意義的改變。我們仍然致力於我們的整體毛利率模型。我們看到了繼續執行或實現該模型的途徑。因此，這些成長肯定會增加我們的收入，但不會顯著改變毛利率前景。

Great. Thank you guys.

偉大的。謝謝你們。

I show no further questions at this time. I would like now to turn the call back over to Giovanni for closing remarks.

我目前沒有提出任何進一步的問題。我現在想將電話轉回給喬瓦尼，讓其致閉幕詞。

Thank you, Michelle and thank you all for joining us this afternoon. Before concluding today's call, I would like to announce our upcoming participation in Stifel's 2024 Midwest Conference in Chicago on November 7. This concludes today's call. Thank you.

謝謝米歇爾，也謝謝大家今天下午加入我們。在結束今天的電話會議之前，我想宣布我們即將參加 11 月 7 日在芝加哥舉行的 Stifel 2024 年中西部會議。今天的電話會議到此結束。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。