Qorvo Inc (QRVO) — Q4 2019 Earnings Call Transcript

Thanks very much, Chelsey. Hello, everybody, and welcome to Qorvo's Fiscal 2019 Fourth Quarter Earnings Conference Call. This call will include forward-looking statements that involve risk factors that could cause our actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statement contained in the earnings release published today as well as the risk factors associated with our business and our annual report on Form 10-K filed with the SEC because these risk factors may affect our operations and financial results. In today's release and on today's call, we provide both GAAP and non-GAAP financial results. We provide this supplemental information to enable investors to perform additional comparisons of operating results and to analyze financial performance without the impact of certain noncash expenses or other items that may obscure trends in our underlying performance. During our call, our comments and comparisons to income statement items will be based primarily on non-GAAP results. For complete reconciliation of GAAP to non-GAAP financial measures, please refer to our earnings release issued earlier today available on our website.

Thanks, Doug, and thanks to everyone for joining us on the call today. Qorvo delivered a solid March quarter with revenue and EPS above the midpoint of our guidance, driven by content gains, operational excellence, and a broad market exposure to long-term growth trends, including 5G. I'm pleased with our financial performance and how our team and factories are operating. Yesterday, we closed the acquisition of Active-Semi International, and we welcome the Active-Semi team to Qorvo. We are eager to leverage our scale, sales channel, and customer relationships to accelerate the adoption of their programmable power management solutions. We are excited to bring their power management technologies to our existing customers. Our efficiency is a critical requirement, and power management solutions intersect multiple growth drivers for Qorvo, including 5G base stations, defense, automotive, and IoT. During the quarter, IDP continued to reap the rewards of our broad portfolio of key enabling technologies to drive growth. Infrastructure was especially strong, led by 5G base station applications. We increased our support of 5G massive MIMO infrastructure deployments and secured new design wins across all anticipated sub-6 gigahertz 5G frequency bands. Qorvo is unique in that we're able to leverage the breadth of our defense and base station capabilities to address the demands of next-generation 5G networks from 6 gigahertz frequencies through millimeter wave. In millimeter wave applications, our experience enabling phased-array radars with leading-edge compound semiconductor technologies is helping us to support the higher frequencies and beam steering requirements of next-generation cellular base stations. In connectivity, IDP won the entire RF front-end section for meshed WiFi access points by a leading manufacturer of WiFi home networking systems. We won on the breadth of our technology portfolio and our ability to supply superior BAW filtering and WiFi front ends. In automotive, we expanded our support of 5G and Cellular Vehicle-to-Everything for multiple automotive OEMs, and we now expect the commercial rollout of our front-end modules to begin in late 2019. Finally, in defense applications, we secured a design win to supply GaAs and GaN components to Lockheed Martin for a ground-based radar program for the U.S. Department of Defense. This multiyear win based on performance and reliability solidifies our leadership in GaN for defense applications. Turning to Mobile Products. We executed well in a challenging macro environment, capitalizing on added content and integration trends at multiple customers. Qorvo's gains are being driven by leadership across product categories, including BAW-based dilutions, envelope trackers, and tuners. We achieved record revenue for our BAW-based band 1/3 quadplexers and secured first design wins for our BAW-based hexaplexers solutions, enabling our customers to achieve higher orders of carrier aggregation in next-generation 5G handsets. During the quarter, we reached a significant milestone by supplying production volumes of our BAW-based mid-/high-band PADs to the world's top 6 smartphone OEMs. In addition, we received our first orders from customers for 5G variants for production this calendar year. And another standout example of Qorvo's leadership, we introduced the industry's first stand-alone ET PMIC capable of modulating the power supply at 100 megahertz for 5G New Radio operation. This allows customers to continue to select the most advanced best-in-class RF technologies for their devices. Our envelope trackers and antenna tuners are supporting some of the world's most popular wearable devices, enhancing connectivity and increasing battery life for this rapidly growing category. Finally, we sampled BAW-based 5G antennaplexers, enabling customers to utilize current antenna architectures for future 5G devices. Looking forward, design activity around 5G is accelerating, and that's expected to support a material uptick in the mobile RF TAM with an incremental $1 billion expected in 2020. 5G is being deployed with 3 distinct use cases: enhanced mobile broadband; ultra-low latency; and massive machine-type communications. It will be rolled out over time with enhanced mobile broadband beginning now. The deployment is expected to span years, putting us in the very early innings. In summary, our March performance and June guidance speak to our continued operational excellence and the strength of our business model. Despite a challenging macro environment, we are delivering content gains across leading customers and introducing breakthrough new technologies. As we begin fiscal '20, we're excited about our position. We expect our opportunities to expand as new applications carry even more data over wired and wireless networks and as we target new growth markets like programmable power management.

Thanks, Bob, and good afternoon, everyone. Qorvo's revenue for the fourth quarter was $681 million or $11 million over the midpoint of our guidance range. Mobile revenue of $443 million was supported by especially strong China and Korea-based customer demand. IDP revenue was $238 million, the 12th consecutive quarter and third year of double-digit year-over-year growth. IDP demand remained especially strong as the ramp of 5G base stations has begun. For the full year, Qorvo's revenue is near $3.1 billion and up 4% versus fiscal '18. We expect organic growth will continue in fiscal year 2020. Non-GAAP gross margin in the March quarter was 48.2%, 120 basis points above our guidance on lower costs related to inventory builds in support of our near-term outlook and improving manufacturing efficiency. Non-GAAP operating expenses were in line with guidance at $161 million and up sequentially due to higher personnel costs, including seasonal payroll effects. Non-GAAP net income in the March quarter was $151 million, and diluted earnings per share was $1.22, $0.17 over the midpoint of our guidance and up 14% year-over-year. For the full fiscal year, Qorvo's EPS grew 12% to $5.76. March quarter cash flow from operations was $187 million and reflected inventory builds to support near-term customer demand. CapEx was a year low of $35 million, resulting in free cash flow of $152 million. Full year CapEx was $220 million – $221 million or 7% of sales. Our portfolio management focus and manufacturing productivity efforts are helping us reduce and better manage our capital requirements. We repurchased close to $300 million in stock in the March quarter for a total of $638 million in the year. Share repurchases totaled 108% of Qorvo's free cash flow in fiscal '19. During the quarter, we also repurchased $68 million of our remaining 7% coupon 2025 notes and added $270 million to our 2026 notes at a rate under 5.2%. We ended the quarter with $711 million of cash and $923 million of debt. Turning to our outlook. In the first quarter of fiscal 2020, we expect non-GAAP revenue between $780 million and $800 million or $790 million at the midpoint; gross margin between 45% and 45.5%; and diluted EPS of $1.30 at the midpoint of our guidance. In the June quarter, we expect IDP to post another quarter of double-digit year-over-year organic growth and to be up sequentially with the addition of Active-Semi. For mobile in the June quarter, we are forecasting robust sequential and year-over-year growth, including year-over-year growth in the quarter at our 3 largest customers. For fiscal '20, we currently forecast Qorvo revenue growth of roughly 4%, including $50 million from the recently closed Active-Semi business. We expect the Active-Semi programmable power management business will be accretive to gross margins and contribute a small amount to earnings in fiscal '20. As I mentioned last quarter, we are forecasting a sequential decline in gross margin in the June quarter due to mix and manufacturing costs. We expect higher gross margins through the balance of the year and currently project a full year fiscal '20 gross margin of approximately 48%. Non-GAAP operating expenses are forecasted to increase in the June quarter to $173 million on higher personnel costs and development program costs as well as the addition of the Active-Semi power management business. We expect OpEx to remain around these levels through the year. We expect the June quarter and full year fiscal '20 non-GAAP tax rate to remain below 9%. On capital expenditures, we forecast spending of less than $250 million this fiscal year and weighted towards expanding and improving our BAW, GaN, and GaAs capabilities. We're very pleased with how we ended fiscal '19, and we're encouraged by a strong start and improved outlook as we enter fiscal '20. In the March '19 quarter, we executed well in a challenging environment, which allowed us to deliver results above our initial guidance. We also continued to improve our technology and operations, further strengthening our competitive position. For the full year '19, despite a softer-than-expected second half, we delivered another year of double-digit earnings growth. For fiscal year 2020, we currently project growth in revenue, earnings, and free cash flow. This outlook reflects the strength we are seeing in a number of our end markets and the health of our distribution channels.

Nice results. So I was curious, you've alluded to growth in your 3 top customers. I'm just kind of curious about that content gain. So can you just talk about the strength you're seeing particularly in the Android world? If you could just think about strength in the market units, maybe customer share gains, and then the content story as well? Can you maybe just give some thoughts as to where all the strength is coming from?

Sure, Blayne. This is Eric, and I'll be happy to talk about that. Of course, in the March quarter, we did enjoy a significant content expansion with both Huawei and our largest Korean-based supplier. We've been, I think, pointing to this for about a year. As we gain more content on the highly integrated modules, mid-/high-band in particular is a good driver for us. And those customers both did pretty well in the quarter, frankly. Part of our upside to our expectation was based on their sell-through. I think you're using that publicly in some reports. So the market is not terribly healthy, but we're in the right place with a lot of content gains, which is a tailwind right now.

Yes. I think we're guiding rather flattish, I would say, on the organic business as we go quarter-to-quarter. As we go through the year, I think we will continue to at least grow at market rate, which we're modeling at that 10% to 15% rate. The addition of Active is also going to help, but we believe that our management market is actually growing faster than some of our underlying markets.

I guess just following up on some of your earlier comments. Perhaps you could talk about what may have changed in your view of the market since we spoke in the last call. Obviously, we've seen some more cautious comments from others in the space. Was it really a situation where you just happened to be in the right sockets? And again, you made some production decisions with some capacity last quarter. Do some of the strength that you're seeing now affect some of those decisions you've made a quarter ago?

Chris, this is Bob. Thanks for your questions. As far as what's changed all along, and I think Eric said it quite well. He named 2 of the customers. You can throw in a couple others. We worked very hard to gain back share that we've lost over the years, and we've brought out extremely compelling product. And I'm extremely pleased with how the team is now supporting the top 6 handset manufacturers with mid-/high-band PAD. So we've done a good job there. And as Eric said, we're in the right places at the right time. We, like others, I think still -- we're taking much more of a cautious outlook in the second half. And I know you said some of those are seeing it now maybe, but I really think the team has done a good job of putting us in the right positions. And as far as the actions that we took with our factories, they were still the appropriate things to take. And as we said on the last call, if things continue to move well, we'll look at bringing back one of those factories in early 2020.

Chris, this is Mark. Yes, we're still not where we want to be, and the utilization is still weighing on us in fiscal '20. It's part of the reason that we're guiding to 48% for the year. But the outlook is improving. As you mentioned, we had a sharp downturn in the December quarter, and those actions that we took there, I think, are still relevant and underway. So the closure of Florida is still proceeding. Farmers Branch, we've slowed down spend there, and we've also dramatically decreased our CapEx spend. And I'll note that in the fourth quarter, that CapEx spend was the lowest percent of spend we've seen in several years, if not in the life of the company. And then I'd say furthermore, and maybe more importantly, and you saw this in the margin in the March quarter, you're seeing productivity at the fabs pay off. We're getting shorter cycle times, fabs are more flexible. We're adjusting to demand better, so we're getting a lot more disciplined around our asset base, being very careful and deliberate about expanding that asset base and more aggressive in using it. So we think that with this discipline and then the growth that we're going to see, the actions we've taken run their course through fiscal '20, we're going to come out in fiscal year '21 with, we believe, continued margin expansion in part because of better utilization.

First of all, congratulations on a very strong guide. I have a couple, but I'll limit it to two and then get back in line. So Mark, when you look at the gross margin, you talked about this a little bit, do you see a pretty steady ramp to 48%? And I want to clarify, is it exiting the year at 48% fiscal 2020 or is it full year fiscal 2020? And how do you see the ramp happening from where you're guiding to in June up to the guide either for the full year or exiting the year?

Yes. It's a good question, Harsh. I'm glad you've asked to clarify because the 48% is a full year number. So just to answer your question specifically, we're starting the year at just 45% to 45.5%. We said we'd be below 46% in the June quarter, and that's where we believe we'll be. The full year is 48%. The second quarter will be between 45% and that 48% average for the year. We're not going to call the quarter right now, but it'll be between those numbers. While I'm talking about the year, just to reiterate some of the guidance I gave in my comments, we believe we're going to be up about 4% on revenue year-over-year. And Bob alluded to this, but the first and second halves are actually about balanced revenue, which is a bit unusual. And then I gave comments on OpEx, how we're going to be in control through the year.

Yes, sure, Harsh. This is Eric. I'll give some color on that. Similar to the trend we saw in March, as we are exiting March, we're beginning to see the acceleration. We're currently at least forecasting a full quarter of it this quarter based on customer forecast. A lot of high-end handsets ramping and a lot of content transition towards integrated solutions. Phase 6, in particular, of course, is helping drive you throughout the large Chinese players as well as at Huawei. We talked about the shared transition back our way with our largest Korean customer. And it's across a lot of different products: of course, antenna tuners, also seeing envelope tracking in a lot of those applications. And then of course, in mid- and high-band PADs and low-band PADs as well in a lot of these phones. So it's an exciting time really. We're seeing a lot of handsets ramping. Of course, as Bob said, we're not raising guidance for the year. We're going to wait and see how the sell-through goes on all of these handsets, but it sure is good to start the year strong like this.

Bob, you mentioned the RF TAM opportunity for 5G in 2020 was about $1 billion, and if I remember at your Analyst Day, you're projecting about $17 billion total. So I just want to recheck my math. If you're talking about a 5% to 7% increase on 5G. James, did you experience any shortage in GaN this quarter that could have -- for raw materials that could have increased your shipments a bit because [indiscernible] is reporting they couldn't ship all that they had demand for? And then Eric, you mentioned Phase 6 is ramping. That was out last year in a number of phones, but they didn't sell that well. Has that changed? Or are you just seeing more Phase 6 in more phones this coming quarters or anticipating better revenue?

And as far as going back to Analyst Day, we're sticking with $1 billion. We still think it's pulling in since our Analyst Day, the ramp of 5G phones. I will remind you that I think handset volumes from our last Analyst Day are a little bit lower, so the RF TAM is a little bit lower as well. And Apple clearly didn't have the kind of year for that base for this year we were expecting. But we're sticking with $1 billion because we're seeing it pull in since our Analyst Day. And James, if you want to talk about GaN and the ramping that we're doing there.

Yes. First of all, for 5G in the infrastructure side, that also represents probably a $600 million or $700 million opportunity for us during the year as well. As far as GaN shortages, we definitely are struggling a bit to keep up, so we've got strong orders across all of the frequency bands that are ramping now and doing our best to stay caught up, but definitely a little bit behind.

And regarding Phase 6 traction, it's a bit of a mixed bag there. It's all up, but there's varying degrees of it. I think with Huawei in particular, we've seen a strong transition there in their top maiden P series phones. With the rest of China, it's pretty much on track with what we had thought. It's definitely well behind. We're in the early innings there, but we're also adding a lot of other content with ultra-high-band as an example in other placements of envelope -- excuse me, antenna tuners and with the antennaplexers that we've mentioned as well. So there's just a lot of opportunities right now.

My congrats on the results as well. Two questions. First off, just back of the envelope math suggests at least I think in the full year guidance is kind of a flattish outlook for mobile, which maybe it's a bit cautious or you're assuming unit volume is down or anything that you could provide some commentary there considering what seems to be pretty big backlog of new products ramping here in the fiscal year.

Sean, thanks for your question, and we are taking a cautious view. I kind of commented that earlier for the mobile market. We still think smartphones are going to decline this year. As Eric commented, we're in a lot of exciting phones. It's early on in there. We'll see how the market acceptance goes. And for right now, we just want to make sure that we have a conservative view in the second half.

Yes. I think it's accurate. It has been delayed a bit, but things are starting to solidify there. I think we've received our first design wins in AX, and we do believe those products will start to ramp as we go through the rest of the year. And we also had a nice design win that we talked about in Bob's prepared remarks and in the press release today. We think that will also drive some nice growth as we go through the year in WiFi.

Congrats as well. Just a question on IoT. You had mentioned a meshed networking design win. I was wondering if you could describe kind of your view on IoT and your product portfolio with respect to Bluetooth, low energy, WiFi, and mesh and how you're kind of positioned in that market.

Well, first of all, let me talk a little bit about how we've done. So our IoT revenue was slightly up for the year. That was based on some of our automotive wins and also our position in low-power wireless. WiFi itself remains a little bit weak as the standard [indiscernible], as we just talked about previously, but the fundamentals are still very strong. In the overall IoT market, I think it's still maturing. Several different standards are competing for leadership. WiFi, ZigBee, Thread, BLE, and NB IoT are really the largest contenders. I think we're positioned very strongly across those standards, and in fact, in a lot of cases, we're standard diagnostic because we have SoCs that can actually support different solutions simultaneously in their ecosystems. We're also moving into several other verticals with our technology like lighting, electronic shelf labeling, and wearables. And so again, we see IoT as a significant growth driver for the company as we move forward.

Yes. This is Mark. We're not going to guide fiscal year '21. But on your question, certainly, our target is still the clear 50%, and we very much believe we can do it. As you pointed out that we're focused on the right products and segments. And as you point out, there's a record mix of IDP in the business this quarter at 35%. Eric's focus on the most highly integrated products in mobile and BAW-related revenue is yielding a better outlook and better results. And then we're doing a lot of work on the fab side with -- [indiscernible] is showing this from Texas Instruments, and we have -- and there is a lot of stuff in-flight in operations that we're going to benefit from. We're benefiting from it now. You can see some of that actually in the large beat to the guide on the gross margin, but we think that's going to be additional help to have us clear that target.

Good job on the quarterly execution and outlook. My first question is on, I guess, Huawei specifically. Just wondering if you have any visibility on any potential for double ordering? We've seen other people in the supply chain speak to that either in 5G infrastructure or in smartphones. If you can speak to how you see the channel specifically with that customer.

Sure, Bill. This is Eric. I don't think there's really any risk of double ordering. In terms of maybe front-loading their plan a bit, that of course can happen, especially when they're picking up share in the market. There's no question about that, I think. And so it's hard to be clear about how much of it is due to one thing or another. We know that underlying all of this, they are seeing increasing in share not just in their domestic market, but also in exports, I think, going really for them. And in terms of our own business, we are clearly seeing a shift towards the higher end of our portfolio as well, which is adding dollar content in envelope tracking as well as in integrated PADs both for low and high band.

And I think on the infrastructure side, our deliveries appear to be generally matching the reported numbers of base station deployments. In fact, we're seeing strong strength across numerous of our base station customers. We've almost doubled our business in 3 of the top 4 OEMs year-over-year this quarter. The strength for us has really been associated with content gains associated with massive MIMO and with our ability now to win the power amplifier slots because of GaN.

Mark, I just wanted to confirm the loading commentary you said is pretty evenly loaded first half and back half. So that would sort of imply that the second fiscal quarter like it's up mid-single-digits Q-on-Q, which normally it's up like mid-20s. So I just want to make sure I know that you don't want to guide that far out, but just given that loading commentary, I just kind of want to make sure, is that right?

Yes. That's actually correct.

I was hoping you could talk a little bit more about Active-Semi, a rough breakdown by some of the key end markets, how fast the company has grown over the past couple of years, how you think about growth going forward. And from a margin perspective, I think you guys talked about the business being accretive to overall Qorvo, but is there any potential for additional synergies as you integrate Active-Semi? And then I have a follow-up.

This is James. Let me talk a little bit about the business and then Mark maybe will handle some of the financial questions. We're excited about the opportunity that it brings to Qorvo. The acquisition addresses critical need for more efficient power usage in electronics. We believe our scale, Qorvo's scale, can expand Active's current business to fully address the $3 billion SAM that represents them today. We also believe that we can bring Active's technology to bear on our existing markets like base station, defense, automotive, and IoT, which will further expand our SAM as we develop products in those areas. Integration is underway as we speak. We think it's going to be rather straightforward. It's a great cultural fit, and there's really minimal overlap in our portfolio. So I think from a revenue perspective, we expect, again, to be able to outpace the growth of our underlying markets, and they've been able to demonstrate that over the past 3 years if you look at their average CAGR. As far as synergies, again, minimal overlap, so we plan in relatively minimal synergies. Mark guided what the revenue would be in his prepared remarks.

Yes. So Toshi, yes, we guided 50 for the year. We believe it will beat that. If it delivers what we believe, it's going to be accretive to the company gross margin. We paid cash for it, but for dilution purposes, assumed debt. And it would be slightly dilutive in June and then slightly accretive, a de minimis amount for the full year.

Two quick clarification questions, if I may. Just going back to 5G infrastructure, you referenced some wins for massive MIMO. While that is ramping now, how do you see the dollar opportunity expand as macro shifts -- macro cell shift from LTE to 5G? I think you just mentioned $600 million to $700 million for fiscal 2020. Is that back-end loaded this year? And how do we see that ramping in your fiscal 2021?

Yes. So $600 million to $700 million opportunity for us as we go through this fiscal year. About $1 billion opportunity as we go into next fiscal year. And the ramp is an ongoing endeavor. As I talked about, we expect our base station business to be about double this year. And based on the TAM and our ability to win in the markets, we would expect it to go up about another 50% as we go into next year, and we're not guiding that, but just our ability to win and what we see going on in the TAM. Now that's based on the transition from macro to massive MIMO and the significant content increases in RF as you make that transition. We talked about before an 8 to 12x RF content increase as you go from a macro base station to a massive MIMO base station. And adoption rates, somewhere in that 30% to 50% range of our base stations will have MIMO capability.

A question on wireless and understanding your expectation is cautious into the back half, just because of the market. For Qorvo specific, can you talk to just your dollar content kind of like-for-like in the back half of the year year-over-year and how you're feeling about that visibility.

I'll take it, Eric. So Craig, we're feeling really good about the work that we've done to expand the dollar content in the phones that are launching out. We've got pretty good design wins in the second half that we believe we can continue to grow our content. My comments were we're taking a very cautious view of the second half of the year. In our quarterly call last quarter, we talked about mobile roughly staying flat for the year and IDP growing double digits. We're kind of sticking with that. We've seen some of these guys start off a little bit strong in the beginning of the year and kind of winning over the back half of the year. But there's no doubt in our mind that the dollar content in phones is increasing year-over-year. The RF TAM per phone is growing. We also commented on 5G coming in a little bit faster. I commented that, that's $1 billion in 2020, and we're going to start to see some of that later in the year. Where we're being cautious is not in our content, it's in units.

I mean we are, I guess, broadly exposed to the market, whether it be macro or MIMO and pretty much any of the frequency ranges that are being deployed today, and whether that be a 4G continuing to add capacity or a 5G base station. A very, very broad portfolio of products, including all the receipt side elements in the RF chain, plus now our ability to produce the power amplifiers with advanced technology. So again, I would say very, very broad-based. We are seeing the macro side of the business relatively flat and significant growth in the -- in MIMO deployments.

I had two as well. Bob, I just wanted to go back to this full year outlook. And I think you kind of justify the conservative on the unit side, but you did mention that you expect content to grow for you. Is that -- at every flagship customer? Is that at some flagship customers? And if there are any content shifts, what do you think is causing that? Is that technology? Is it pricing? Is it something else?

Vivek, I appreciate the question. I've tried, that's why I was very cautious in my comments to not talk about future architectures other than generically the RF TAM. And I think that, that expansion continues. I think you've been around the RF industry long enough to know nobody wins every socket every time, and that goes for us and all our competitors. Sometimes it's performance, sometimes it's delivery, sometimes it's share balancing. Rarely is it price because these guys mainly buy in the high and on performance. So all of that applies to my comments.

Yes. Villek, this is Eric. As we talked about in our Analyst Day last year, we're attributing $1 billion of TAM increase in calendar '20 to 5G. And as we commented, that includes the uplift in 4G content to be compatible with 5G. So when you drop a 5G band into a phone as an example, the 4G has to be able to accommodate that, of course in the case there's filtering requirements, there's some aspects to address as well. So that's not specific to 5G-only devices, but in order to build a 5G phone, that's the entire added content for the 4G LTE advanced pro upgrades to be compatible with 5G.

Mark, can I ask you, as you look at your gross margin profile, do you think as it builds towards the 48% for the full year, do you think you might be able to exit very close to 50% or possibly even slightly over that? Or is that kind of out of the pocket at this time?

Yes. We're not guiding quarters, Harsh. If -- based on what I gave, we're starting at 45% to 45.5%. We have a full year of 48%. I said that the second quarter will be between those two. You do the math. You're in the high 40s in the back half. So this is very early in the year. We're coming off a very challenging 6 months, so I hesitate to give any more than we're just working hard in a number of ways to expand gross margin.

We want to thank everyone for joining us on tonight's call. We hope to see you at our upcoming investor presentations, and we look forward to speaking with you on our fiscal '20 first quarter call. Thank you, and have a good night.