And so I think on that framework, it’s very clear that most companies that have a significant presence of manufacturing in China, for a variety of reasons, want to have what’s commonly called the China Plus One Strategy. So the China Plus One could mean China plus North America, could mean China plus Southeast Asia, could be China plus somewhere in Europe. And again, with that policy, when those customers look for a programming equipment supplier, they say what can I get in China and anywhere else in the world that I can standardize on and have a job that my engineers create in one location, run in factories anywhere. And so when you look at something like that, Data I/O is really the only choice for these companies that are truly global in outlook.
So it creates some turbulence, but at the end of the day, China Plus One or onshoring or people insisting on a resilient supply chain is really to Data I/O’s benefit because we’re the only resilient supplier in our industry.
Operator: Thank you. The next question is from Mike Joseph with Ventures. Please go ahead.
Unidentified Analyst: Hi, guys. Thanks for the time. A couple of quick questions. How should we think about bookings versus revenue for capital equipment as an indicator of business strength?
Anthony Ambrose: Typically, bookings are the leading indicator. We get an order, obviously, before we recognize revenue. If you look at years of data, typically, we ship revenue in the quarter following a booking. So it’s a leading indicator for us overall, and on a €“ there is going to be some quarterly fluctuation. But overall, we had bookings growth year-over-year, and we think that’s an indicator of the underlying strength of the business.
Unidentified Analyst: So it’s a relatively short time frame bookings to revenue.
Anthony Ambrose: Typically, yes. Sometimes customers will book in advance. Let’s say they are setting up a new factory. They want to line up supply, but typically, it’s €“ we ship within a quarter.
Unidentified Analyst: So another question. You’ve talked about industrial automation as being another strong market behind automotive, and so I’m curious as to how your programming technologies are leveraged for the industrial market. And can you estimate the size of it and maybe what your thoughts are as far as growth is expected?
Anthony Ambrose: Well, I think for us, the industrial market is a market that can be as big as the automotive electronics market. What we’re seeing, it has a very different shape to it than the automotive electronics market. The high-end industrial customers have requirements that line up extremely well with automotive electronics. So what we do to support automotive naturally allows us to support industrial applications, especially at the high end. But what’s also very interesting is we’re seeing more and more tight integration of programming equipment into the computerized control of the factory through so-called MES systems. And that’s a big advantage for Data I/O because our equipment with our ConneX product is much more naturally integrated into those MES systems, both for managing jobs and pulling out information from programming jobs.
Increasingly, we think this will become more and more important as traceability and security become more and more important everywhere.
Unidentified Analyst: If I may follow on with that, you mentioned the traceability, and I’m curious how that is looked at in terms of the automotive OEMs and how your machines are positioned to provide this.
