Dave Kang: Got it. Thank you.
Seamus Grady: Thank you, Dave.
Operator: Thank you. Please stand by for our next question. We have a follow-up question from the line of Alex Henderson with Needham. Your line is open.
Alex Henderson: Give me half a second. There we go. So, doing the mechanics of the math that you’ve given on the non-optical and the telco and comparing the remainder to the guidance, it implies kind of low single digit datacom growth. So, a couple of questions. One is the fallout of the Intel business in the datacom piece, is that — where that would be located?
Seamus Grady: Yeah.
Alex Henderson: And second, within that context, is this a function of supply of components that is causing a fair amount of flatness sequentially that you just can’t get the components necessary to ramp that business sequentially on the AI side? Because it implies fairly modest AI growth, certainly not in line with the growth at your major customer on a quarter-to-quarter basis.
Seamus Grady: So, obviously, the first part of your question, the Intel business is in datacom. So any of that business that we’ll be transferring out in Q3, that will hit our datacom number. Our growth in datacom — there’s a lot of moving parts there and I wouldn’t attribute it all to one customer, or anything like that. There’s a lot of moving parts there. The other thing that we don’t have visibility to necessarily is the inventory position that our customer has. We ship to their demand, what they hold in inventory versus what’s getting installed straight out of the oven. We don’t really have visibility to that. So there’s probably a little bit of inventory normalization going on there as well. But overall, the demand remains strong, but that’s the piece we don’t have visibility to is the inventory.
Alex Henderson: So, if I were to look at the datacom business, it’s gluting AI, has been pretty stable at around $40 million a quarter, I believe. And so I could take some stuff out of that for the Intel piece, but it’s still a meaningful deceleration in the AI. Is that something that you see is fairly temporary and that the overall growth rate is still on track to fairly high grades of growth for the calendar 2024 year?
Seamus Grady: Well, we’re expecting datacom to be up sequentially in the quarter. I’m not sure I follow your logic, the number.
Alex Henderson: If I take the company’s guidance and subtract out the comment about slightly up on telco, flat on auto, or down on auto and flat on the industrial lasers, subtracting that out gives you the datacom piece. So the datacom piece is kind of below single digit growth, I believe, if I do the math right. And sequentially, and certainly there’s a piece falling out, but that’s a lot slower growth than you had been posting. And I guess I’m trying to get to the elephant in the room, which is why that’s the case. And to what extent that that’s a temporary lull before continuing a steep ramp in future periods.
Seamus Grady: Yeah. As I said, it’s a combination of the Intel business transferring and also those initial AI programs, they’re passing into stable production now. They’re through the initial part of the growth curve. So that’s why we called out that the growth’s starting to moderate in Q3 for that very reason. I’m not sure what else is — Alex. I can’t really get into the specifics of an individual customer. But again, it’s a combination of both of those, continued growth in AI, but then offset by business transferring out and 100-gig transceiver business.
Alex Henderson: Okay. Thanks.
Seamus Grady: Thanks Alex.
Operator: Ladies and gentlemen, I’m showing no further questions in the queue. I would now like to turn the call back over to Seamus for closing remarks.
End of Q&A:
Seamus Grady: Thank you for joining our call today. We are pleased to have exceeded our guidance again in the quarter. With another quarter of record revenue and EPS behind us, we are optimistic that we are well-positioned to continue our strong execution track record in the third quarter. We look forward to speaking with you again. Goodbye.
Operator: Ladies and gentlemen, that concludes today’s conference call. Thank you for your participation. You may now disconnect.
