David Aichele: A lot of our activity has been with the enterprise and the system volumes are not as high in the hundreds of thousands. But as I commented earlier, the dollar content is pretty significant with these, particularly when you’re looking at filters that can range in the 20 to 30 per system. And we’ve got a unique position here that we’re enabling these systems based on our product portfolio of narrowband and wideband. So, that’s good to continue to increase our customer base there and it’s usually pretty sticky. Once you have a customer in this sector and you maintain a good customer intimacy and technical support, you will continue to support the new design wins. The one market segment that you didn’t mention, though, that is pretty strong for us also is the carrier side and we just did a press release yesterday, and that was for a Wi-Fi 7 program that we got designed into.
And if you look at that press release, it lists this subscriber base that they have up to 32 million. So, those type of volumes that we see on the carrier side, both for Wi-Fi 6E and Wi-Fi 7, puts it up competitive to the type of volume you see on the consumer side. And then, the press release we did several weeks ago was for the consumer grade. So we are starting to penetrate the consumer grade. That’s been a lower priority just based on – it is usually more price sensitive and they go after older technology. But we’re seeing that those architectures go into higher MIMO count. And also, with the requirements of Wi-Fi 7 due to latency and the channel bandwidth, the higher performance BAW filters in the smaller form factor is more critical.
So their negotiations on price is less important. It’s more on performance.
Jeffrey Shealy: I just wanted to follow on Dave, summarize the Wi-Fi segment. One of the things I wanted to make sure we added in here was just some of the momentum in the defense and other markets. And that’s really been driven by what’s going on not only with our success in the COFFEE program – I think we mentioned that prepared comments, not only starting up the phase 2, but there’s definitely a follow on activity to that at the systems level. And we alluded in the prepared comments on some momentum in the contract. That also is supported by these research hubs that are in place that we have current proposals in place. We’re pretty bullish on being able to secure funding – a follow-on funding for the XP3F technology, which, as you know, allows us to access much higher frequencies.
Craig Ellis: The follow-up is for Ken, and it’s really just a clarification on two things. The first one related to those comments. Ken, as we think about sequential revenue growth and the scope 3Q, it would seem that it stacks up as being significantly led by enterprise Wi-Fi followed by defense and then networking. Is that the case? Can you just clarify what the CapEx outlook is for calendar 2024? And to the extent there’s any linearity profile that you can share, that would be helpful too.
Kenneth Boller: I’ll spend a little bit on CapEx spend. So we’ve been mentioning over the past few quarters that we’re completing our 500 million filter capacity expansion. That has been completed. We have that capacity. Certainly, we talked about operating cash flow breakeven and the revenues needed. But that capacity is well beyond what that revenue is. We do not anticipate any real material spend in CapEx for the remainder of calendar year 2024. There are a few open projects that we’ll finish. There are a few CapEx items I just come across on everyday business as machines possibly break down or we need a new small type of equipment like an analyzer or something of that sort. But I expect that spend for the remainder of the year to be in the hundreds of thousands per quarter or less.
Jeffrey Shealy: I guess, Craig, to your question on the Q3 revenue, just trying to give you visibility on that, we’re – good, strong backlog to that. And that’s why you’ve seen the guidance being in that 18% to 25%. The good news is that the slowdown we saw, and we talked about the inventories under control, we started seeing the pick back up on some of the legacy Wi-Fi 6E programs as they make transition to the Wi-Fi 7 program. So one example is our enterprise tier 1 customer that we’ve announced in the past. Their volumes are picking back up on the Wi-Fi 6E and we’re already starting to get appreciable Wi-Fi 7 preproduction orders that we’re ramping. And then the same thing with carrier Wi-Fi 6E program has picked up from reductions in their inventories.
So that demand is going on as they transition into the Wi-Fi 7. So, that’s three examples as we also have other customers picking up. And introduction in the Wi-Fi 7, we’re starting to see significant pull on our two new products. So there’s lack of activity there. The network side has slowed down. If you look at 5G overall, Nokia, Ericsson, others in that sector have had poor quarterly earnings, and so that has slowed down the 5G deployments. So there’s still some demand on the small cells, but that’s going to be less of a factor this quarter and next quarter we expect it to pick up with obviously the current products, but also some of the engagements that we made in the [indiscernible].
Craig Ellis: Finally, Ken, you mentioned AR would improve in the fiscal third quarter? Do you expect that to fully normalize? Or does that play out through the fiscal second half of the year?
Kenneth Boller: Craig, at the end of December, we had some AR build up on our balance sheet. That was due to a lot of year-end orders that shipped out towards the end of December that we will collect in this quarter, Q3. There were also some timing issues, particularly with a large program that we have on the NRE side with the government. We can build them and receive money, according to a set schedule. So, that’s also in our other receivables, other asset section, and we’ll collect that in this quarter as well. And I expect that to normalize out throughout the remainder of the year.
