Ichor Holdings, Ltd. (NASDAQ:ICHR) Q4 2024 Earnings Call Transcript

Ichor Holdings, Ltd. (NASDAQ:ICHR) Q4 2024 Earnings Call Transcript February 4, 2025

Ichor Holdings, Ltd. misses on earnings expectations. Reported EPS is $0.08 EPS, expectations were $0.27.

Operator: Good day, ladies and gentlemen, and welcome to Ichor’s Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Claire McAdams, Investor Relations for Ichor. Please go ahead.

Claire McAdams: Thank you, operator. Good afternoon and thank you for joining today’s fourth quarter and fiscal year 2024 conference call. As you read our earnings press release and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings press release, those described in our annual report on Form 10-K for fiscal year 2023, and those described in subsequent filings with the SEC.

You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this conference call. Our earnings press release and the financial supplement posted to our IR website each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures. On the call with me today are Jeff Andreson, our CEO; and Greg Swyt, our CFO. Jeff will begin with an update on our business and then Greg will provide additional details about our results and guidance. After the prepared remarks, we will open the line for questions. I’ll now turn over the call to Jeff Andreson. Jeff?

Jeff Andreson: Thank you, Claire, and welcome, everyone, to our Q4 earnings call. Thanks for joining us today. On today’s call, I will briefly recap our year-end results, provide an update on our current outlook, and review our progress qualifying our proprietary products. I’ll also discuss some of the gross margin headwinds that impacted our Q4 results and our margin expansion strategies ahead for 2025. On the top line, our growth accelerated in Q4 with $233 million in revenue exceeding our expectations going into the quarter. Revenues were up 10% sequentially after roughly six straight quarters of revenues hovering at the $200 million level. As a result, the year ended modestly stronger than expected, with 10% growth in the second half, and total revenues of $849 million, up 5% from 2023.

Customer demand continued to strengthen throughout the fourth quarter requiring our weekly build rates to ramp significantly to levels that began to require additional resources. We believe this higher level of demand is indicative of a strong year ahead for our primary applications of Etch and CVD with broad-based demand strength continuing from both the advanced logic and DRAM markets and the beginning of a recovery in NAND technology investments. With Q4 revenues finally indicating the inflection point for more meaningful growth ahead, after a prolonged downturn in etch and deposition, we added significant machining resources in Q4 to address the increase in demand for both our build-to-print and our internally-developed machine products.

Additionally, in preparation for increasing proprietary content as we cut these components into our gas panel builds, we are building stocking levels to support our gas panel integration sites. These resources are critical to support not only the top-line growth for our business, but also the increasing component content that we can supply internally, an important part of our gross margin expansion story. The gross margin headwinds in Q4 reflect the higher direct labor costs, which were not fully absorbed within the quarter, largely due to a longer-than-expected training process. We expect the residual impact of these higher labor costs to carry somewhat into the first-quarter, but as Greg will discuss in his remarks, the vast majority of the labor and inventory charges that impacted Q4 gross margin were unique to the fourth-quarter.

So as we look-ahead to 2025, I’ll first reflect on the momentum that has been building over the last few quarters in advance of what we expect will be a solid growth year for Ichor within an increasingly positive mix profile emerging for wafer fab equipment demand, principally a higher mix of etch and deposition. You may recall that our visibility for growth and an inflection point in our revenue run-rate improved significantly between our Q2 and Q3 earnings calls. While the debate over WFE growth in 2025 intensified, we were talking about the beginning of an upgrade investment cycle for NAND. We were talking about an increase in etch and deposition intensity, boosted in large part by the additional process steps required by advanced logic devices migrating to gate-all-around architectures.

We also talked about how the expected slowdown in WFE spending in China was a favorable mix-shift, setting up a strong environment for the U.S. OEMs to outperform overall WFE. And while the evolving WFE demand environment did in fact result in lower quarterly build rates for our litho and silicon carbide businesses as we move through 2024, we also talked about how our participation in advanced packaging and high-bandwidth memory through our chemical delivery business has largely offset these pockets of weakening demand. As we indicated via webcast in January, we believe this inflection point in our revenues is not a one or two-quarter phenomenon. We are investing appropriately for the growth ahead. In fact, demand has continued to strengthen quarter-to-date and we are very pleased today to be raising the high-end of the range of our revenue forecast for Q1.

As we have gained clarity into the various margin impacts for Q1, we can also increase our gross margin outlook for the quarter and even more importantly for the full-year. We expect continued gross margin improvement throughout 2025 given our visibility for continued strong customer demand and increasing content from proprietary components. We believe the company can generate flow-through of 25% to 30% or more, enabling us to deliver gross margins in the 15% to 16% range by Q2 and exceeding 16% for 2025 keeping on modest revenue gains beyond Q1, which brings me to an update on our progress qualifying both our proprietary components for our existing gas panels as well as our next-generation gas panel. We have made steady progress in closing additional component qualifications over the past quarter and we’ll be cutting these components into our manufacturing pipeline in Q1.

We expect growth in our new products this year will be a key driver for margin expansion for Ichor in 2025. I’ll start with our new component products. We are very pleased to announce today that our high-purity valves were qualified at a second customer during Q4 and we are currently progressing through qualification at a third customer. We continue to make progress qualifying our proprietary fittings which are components used in our weldment business. With our two largest customers already qualified, we are in the final stages of our third qualification. All three of our process tool customers have already qualified our substrates used in our gas panels. These are all critical components used in the existing gas panels that we assemble as well as our next-generation gas panel.

These components will continue to ramp-in volume as we cut them into our manufacturing pipeline. Now moving to our next-generation gas panel. As discussed last quarter, we delivered more than 50 of our next-generation gas panels during 2024. We achieved initial customer or OEM qualifications on four applications last year and many of the next-generation panels that we have delivered in 2024 are part of a qualification process with the end device manufacturer, which are continuing into 2025. The timing of these qualifications is being worked between our customer and their customer. And in 2025, we expect additional qualifications to follow. We are also now engaged on two additional applications beyond the four we discussed previously. The key takeaway as it relates to our proprietary content strategy is that we expect to supply an increasing proportion of our bill of materials with internally-developed products, whether they are passive components that we no longer have to purchase for build-to-print gas panels all the way up to our fully-proprietary next-generation gas panel.

While these internally-developed and manufactured products have required a meaningful investment by Ichor, most of the incremental R&D investments are behind us and our labor force is now in place to address higher levels of customer demand and accelerate our gross margin expansion strategies as we move through 2025. To summarize, our expectations of industry spending dynamics, the mix shifts of investment priorities in the coming year are, on all, very positive for Ichor’s business. And regardless of the magnitude of WFE growth expected for 2025, we are confident in our ability to outperform the growth in WFE this year. Likewise, we are confident in our ability to demonstrate strong flow-through and deliver continued expansion of our gross margin profile as we enjoy a more robust customer demand environment while steadily incorporating increasing share of proprietary products into our production flow.

With that, I’ll turn it over to Greg to recap our Q4 results and provide further details around our financial outlook.

Greg Swyt: Thanks, Jeff. To begin, I would like to emphasize that the P&L metrics discussed today are non-GAAP measures. These measures exclude the impact of share-based compensation, amortization of acquired intangible assets, non-recurring charges, and discrete tax items and adjustments. There is a useful financial supplement available in the Investors section of our website that summarizes our GAAP and non-GAAP financial results as well as a summary of the balance sheet and cash-flow information for the last several quarters. Fourth-quarter revenues were $233 million, aligning with the upper-end of guidance. This represents a 10% increase from the previous quarter and a 15% increase year-over-year. Gross margin declined to 12%, which was lower than our expectations by about 300 basis points.

This decline was primarily due to the higher level of direct manufacturing labor costs we added during the quarter to support the higher demand level in the back half of the fourth quarter and the first quarter of 2025 that we were not able to fully absorb within the quarter. Additionally, we experienced higher-than-anticipated inventory charges associated with our year-end physical inventory procedures as well as unfavorable product mix with the majority of the current revenue upside taking place in our built-to-print gas panel integration business. Operating expenses for Q4 were slightly below forecast at $22.3 million. Net interest expense was $1.7 million, while non-GAAP net income tax expense exceeded our forecast at $900,000. The resulting net income per share was $0.08.

Now turning to the balance sheet. Cash and equivalents at the end-of-the quarter totaled $109 million, an $8 million decrease from Q3. While our Q4 P&L generated over $8 million of positive cash-flow, our net investments in working capital during Q4 was $11 million, primarily in inventory given the revenue growth inflection in Q4. After $4.4 million of capital expenditures, free-cash flow for the quarter was a use of $6.9 million. DSOs for the quarter were slightly lower than Q3 at 34 days and inventory turns increased from $3.1 million to $3.4 million. We reduced debt by $1.9 million during Q4, bringing our year-end balance of total debt outstanding to $129 million, down from $250 million a year-ago. Our net-debt coverage ratio has declined to 1.6 times, down from 3.4 times a year-ago.

Now let us discuss our guidance for the first-quarter of 2025. As Jeff mentioned today, we are increasing the high-end of our preliminary outlook discussed in early-January. With anticipated revenues in the range of $235 million to $255 million, we expect gross margin in the range of 14% to 15%. At the midpoint of the range or $245 million in revenue and 14.5% gross margin, this equates to roughly 25% flow-through from our Q3 baseline, less about $1.5 million of residual impacts ramping and training of our incremental machining headcount. Once these incremental cost headwinds are behind us, we anticipate returning to gross margins above 15% by the second-quarter and flow-through in the 25% to 30% range. Q1 operating expenses are projected to be approximately $23.5 million, reflecting the seasonal impact of payroll taxes resetting, audit fees and other variable compensation costs.

Given that we expect to remain at similar levels beyond Q1, today we are also lowering our expected OpEx increase for the full-year to an anticipated 5% to 7% compared to fiscal 2024. Net interest expense for Q1 is expected to be approximately $1.6 million and we expect this level to be relatively consistent through 2025 given recent announcements around a slowing of rate decreases this year. For modeling purposes, net interest expense for 2025 should be approximately $6 million. Our expected non-GAAP effective tax rate for 2025 is projected to be approximately 12.5%. For Q1 specifically, our EPS range of $0.20 to $0.32 reflects our expectation for 34.4 million in diluted shares outstanding. Operator, we are ready to take questions. Please open the line.

Operator: [Operator Instructions] Our first question comes from the line of Craig Ellis with B. Riley Securities. Please proceed.

Q&A Session

Craig Ellis: Yes, thanks for taking the questions and congratulations on the momentum that you’re seeing in the business guys. I’ll start with Greg and then move on with one for Jeff. So, Greg, if gross margins in calendar ’25 are going to be above 16%, which would be a 330 basis point increase year-on-year, can you just help us understand how much of that is a benefit from the new product progress that’s being made, valves, gas panels, et cetera, volume versus the absence of some of the headwinds that might have been in play in 2024 like the inventory charges and some of the volume-related cost ramp-ups?

Greg Swyt: Hi, Craig. Okay. So, let’s see if I can get to all your points there. I think you asked quite a bit. To get to the — yes, we said the 16% by the end of the year for the full year, the headwinds will go away, as we said, those will exit Q2, right? So those won’t materialize as we get through Q2. The internal branded products, right, that’s going to continue on the 25% to 30% improvement on the flow-through from an incremental standpoint. Then as we get into the second half, as we get stronger, that will benefit as well. So, the tailwinds will go away, that will benefit us exiting the headwinds — sorry, tail — headwinds Q2. The internal branded products will continue to benefit through the rest of the year. And then as we get through the second-half, we expect those to be in the 15% to 16% and stronger in Q4.

Jeff Andreson: And Craig, I would tell you, similar to — it’s Jeff, sorry, similar to what we’ve talked about in the past. I’d say, obviously, some of the excursions that we have won’t repeat, but really the new products are probably the largest driver. And then given that we’re seeing volumes up year-over-year, then we get kind of the leverage of the core, call it, core business, excluding some of the new stuff. And so that is how we’ll do it. And obviously, you’ll see these margins accrete as we go through the year because of this and how they layer-in.

Craig Ellis: That’s helpful. Yes. So I would just infer from that that we’ve got maybe 45% of the benefit on products, 35% on volume and 20% from the absence of some of the headwinds we had last year. That’s real helpful, guys. And then the second question was for you, Jeff. It’s great to see some confidence in demand being shown by just the build intensity quarter-to-date and what you’re doing with the high-end of the range. As you look at calendar ’25 for Ichor and think about the growth in the business, how would you force rank 3D NAND and its transition spend versus DRAM and high-bandwidth memory versus gate-all-around and foundry?

Jeff Andreson: I think that’s a good question, Craig. I mean, obviously, I think we see foundry logic remaining pretty strong. I think you’ve heard TSMC’s outlook, things like that. We don’t see that going backwards. I think with gate-all-around, I think that might see some increase. DRAM, our view today is it’s going to stay pretty steady and strong. So really maybe the inflection that we’re seeing to some degree is really wrapped around some of the NAND increases that we’re seeing in the beginning of this year for sure.

Craig Ellis: Yes. And that would track with some of the things we heard last week too.

Jeff Andreson: Yes.

Craig Ellis: Okay, guys. That’s really helpful. Thank you very much. I’ll get back in the queue.

Jeff Andreson: Thank you.

Operator: Thank you. Our next question comes from the line of Brian Chin with Stifel. Please proceed.

Brian Chin: Hi, there, good afternoon. Thanks for letting us ask a few questions. Yes, maybe firstly, in terms of — it sounds like you’re — Jeff, you’re talking about at the moment revenue levels kind of staying at sort of the Q1 level maybe through the balance of the year. And so one, I wanted to clarify that’s sort of the impression you’re giving because — and then kind of secondly, you did pull-forward those direct labor costs, which sort of suggests that you expect business maybe even to pick up. And so are you being sort of conservative in terms of that stabilization outlook? And is what you’re really doing kind of putting more and higher levels of responsiveness into the business by prepping some of these costs now?

Jeff Andreson: Obviously, I think the way to think about it is demand strengthened in the quarter. We needed to add resources because we see this staying pretty sustained in the first half with a modest — I would say, at this stage, our view of the second half is up modestly. So we’re comfortable adding the resources in. I don’t think it — the thing that you guys can see is we talk about internal supply, that’s a whole another demand driver that I would tell you is outgrowing the rest of the revenue in the company as we start to cut these things in. So that is largely where a lot of these resources needed to get into as we completed some of the qualifications we needed to get in front of inventory builds and some of the demand for that. So I don’t know if I answered your question entirely, but I think for us, we see — we’re not guiding Q2, but we see it pretty similar today to Q1 with a modest increase in the second half.

Brian Chin: Okay. Got it. So some of that ties into the internal sourcing for some of the qualifications on existing gas panels?

Jeff Andreson: Well, certainly — yes, certainly from a resource perspective, a fair bit of it actually. And in the second half, like we talked about, we see foundry logic pretty strong through the year. DRAM, pretty stable through the year. But remember, our litho business has been down. We see that coming back towards the second half. Silicon carbide, for example, has been pretty muted since the first half of ’24. We see that starting to materialize again towards the second half. So there’s other things and share gains we’ve earned this year that will help us in the back half of the year.

Brian Chin: Okay. And this is a little tricky, but if you did see upside materialize from etch and deposition, and let’s say it’s on more legacy gas panel designs, how are you thinking about that impact on sort of the sequential gross margin progression through the year? Or do you think some of these — some of your other margin initiatives can sort of help to balance that out as well as maybe see improvement in machine component business as well?

Jeff Andreson: Yes. What I would tell you is, is that if our mix goes heavier to gas panels, which I think is your question, if there’s more upside to that than some of the other stuff, it would have a bit of a muting on the percentage of gross margin. Having said that, we’re starting to get to the stage where we’ve got kind of — we’re utilizing our overheads and all that much more efficiently because we do have capacity in place that can support numbers well above this, right, from the ’22 timeframe that we were marching towards. So I don’t think it will be as big of an issue as we’ve seen this year because we were still trying to qualify. We hadn’t got our internal supply really going too strongly. And now as we turn this corner, I’m pretty happy with where we’ve gotten to on that. So that should help us call it add a tailwind to the margin that would offset any of those product mix issues.

Brian Chin: Okay, great. Thank you.

Jeff Andreson: You bet.

Operator: Thank you. Our next question comes from the line of Charles Shi with Needham & Company. Please proceed.

Jeff Andreson: Charles?

Operator: Charles, your line may be muted on your end. All right. I think we may have lost Charles here. I’ll go on to the next question. Our next question comes from the line of Krish Sankar with TD Cowen. Please proceed.

Krish Sankar: Yes, hi, thanks for taking my question. I had two of them. First one, Jeff, last quarter you were very bullish on NAND recovering. Kind of curious how to think about your NAND shipments in December versus September, how do you think about it in March versus December and the cadence for the rest of the year?

Jeff Andreson: I would tell you that — well, one is, it wasn’t a huge part of our revenue. Obviously, we’re starting off a pretty low base and it’s growing, but it was a pretty healthy uptick in the fourth quarter, a reasonably similar level into the first quarter which I would expect would probably continue into the second quarter today. I would tell you that visibility for us now has probably gone from three months really strong to four, maybe five. So that’s kind of how I would call it at this stage given our visibility.

Krish Sankar: Got it. Okay. That’s helpful. And then when I look at your European semi-cap customers, obviously two large ones, one is the litho, one is the epi. Kind of curious on the epi customer in Europe, how are you seeing the revenue trend? Because I remember that was one of the fastest-growing. Do you think they could be a third-largest sort of 10% plus customer this year or do you think it’s still small?

Jeff Andreson: I think they’re not going to crest 10%. I would tell you that they’ve done a terrific job. We’ve expanded our share beyond epi, which has helped us kind of grow market-share in that particular customer. And so — but I don’t think it will crest, but we do see it growing nicely in 2025 from 2024.

Krish Sankar: Got you. And then just one final question for Greg. I think the question came up earlier. I was just trying to figure out, can you just say last year to this year, what is exactly — how many basis-points improvement in gross margin is coming from the proprietary gas panels?

Greg Swyt: That’s given up a lot of information. I — let’s just say it’s a pretty large component of the gross margin accretion. Obviously, volume helps us year-over-year and the — and just not having some of these excursions that we incurred in 2024. So — but I would say it’s probably one of the largest of our accretion activities that we have year-over-year.

Krish Sankar: Got you. All right. Thanks for that. Thanks, Jeff. Thanks, Greg.

Jeff Andreson: You bet.

Operator: Thank you. Our next question comes from the line of Tom Diffely with D.A. Davidson. Please proceed.

Tom Diffely: Yes, good afternoon. Thank you for few questions. So Jeff, most people now expect the WFE market to grow kind of mid-single digits this year your large OEM customers because you’re more etch and dep related or growing above that. At this point, can you say whether or not you believe you’ll grow faster than your OEM customers?

Jeff Andreson: I would say, they’re — obviously, we think depth and etch, as you indicated, is going to outgrow total WFE. And I think as we look at our customers — based on what you guys see, I won’t talk specifically other than some of the analyst estimates is that they will outgrow it. And we think we can outgrow that just a bit more, so –

Tom Diffely: Yes. Okay. No, that’s helpful. And then when — people are talking about the NAND market, how NAND is recovering this year and that’s great news. But you may be put into perspective where NAND is versus the other markets and how maybe over the next couple of years, there’s quite a bit more growth than just this year left in NAND?

Jeff Andreson: Yes. I mean like what — I guess when we look at what we’re doing as a company, we’re kind of seeing it go from 5%-ish of our revenue to about 7% of our revenue, which is actually sizable as the revenue grows too, but it’s still not getting to the size of what we think DRAM will be and certainly not foundry logic. But we think for the last couple of years, we’ve been — memory has been about 25%, DRAM and NAND. We see that getting larger this year as a percentage of our revenue certainly.

Tom Diffely: And then maybe a quick one for Greg as well. When you look at the costs that you’ve layered in, the extra employees you’ve layered in cost you over the last couple of months and right now you have revenue maybe going up to $255 million in the first quarter, what is the revenue capabilities of your current infrastructure?

Greg Swyt: So of our – revenue structure?

Tom Diffely: Like how much revenue — yes, just with your current installed base of both employees and physical footprint, how much revenue could you process at this point without meaningful additions?

Jeff Andreson: So I would say from a — yes, from a facility point-of-view, clean rooms, all that capacity is well north of 400, right? And today, we try and mirror our headcount being added as close to the demand profile. What you guys see is external revenue, we have a view of what we’re cutting in, in components and stuff that adds to that. But we’re still, I would say, well below that 400 plus capacity. So it’s really people-dependent. Right now, I would say once we add the bulk of the resources that we’re seeing in Q1. And if we have a modest back-half, it will be very little incremental, people we can probably do it with overtime and things like that.

Tom Diffely: All right. Maybe one last quick question. Do you have any components that you processed flying around in space right now?

Jeff Andreson: Yes, of course. We do. Obviously, we have some business with SpaceX and so most of what we build for them goes up and doesn’t come back.

Tom Diffely: All right. Thank you, guys.

Jeff Andreson: You bet. Thanks for asking.

Operator: Thank you. Our next question comes from the line of Christian Schwab with Craig-Hallum Group. Please proceed.

Christian Schwab: Great. Thanks. I just — most of my questions have been answered. I just have a question on gross margins for clarity. Did you guys talk about being — gross margins being greater than 16% as you exited the year? Or did you say that gross margin would be greater than 16% for calendar ’25? I don’t know if I heard that right.

Greg Swyt: I think we’ve had kind of all. So, exiting the year on a run-rate north of 16%, Christian. And then full-year at that 16%.

Christian Schwab: Full year at 16%. And then what do you think optimal gross margins with increased proprietary products are as maybe as we look to ’26, if, let’s say, WFE goes up again? How good could gross margins get?

Greg Swyt: Well, what I would tell you is, that our model today is 19 to 20. And I think in general, the direction we’re getting in communications is that ’26 will be a stronger year than 2025 from a growth perspective. I would certainly think given where we’re at, cutting in certainly our passive products are really making good progress. Even with those, I think we can get pretty close to that in 2026 if the quarterly run-rates kind of get up over maybe 300 at least because we need to have that to absorb some of our infrastructure.

Christian Schwab: Great. No other questions. Thank you.

Jeff Andreson: You bet, Christian.

Operator: Thank you. Our next question comes from the line of Edward Yang with Oppenheimer. Please proceed.

Edward Yang: Hi, Jeff. Hi, Greg. Thanks for taking my question. Just on your new products progress, the gas panel deliveries that you had in ’24, I think you had specified at 50. Was that consistent with your expectation? I think last quarter you’re targeting something around 55.

Jeff Andreson: Yes, I said more than 50. So yes, it was pretty much aligned. You’ll always get a few movements here and there, but we came in just about where we thought we would be. And so we —

Edward Yang: Got it.

Jeff Andreson: And most of these evaluations are active at device of customers now. And so at that stage, our customers are managing that process. And unfortunately, we haven’t had any close yet, but we’re optimistic that those will happen in the early part of 2025, certainly in the first-half.

Edward Yang: Okay. So were these all still for qualifying or did you have any commercial shipments?

Jeff Andreson: I would say that as we’re shipping to their customer evaluations, we would call them commercial shipments. I mean, they’re design, they’re putting them on a tool. There may be the first-half of those or less or something where probably what you would call kind of evaluations at our customers that are putting them onto their tools for the first time. But once they make it to a customer, we kind of treat them like a commercial shipment. And I would tell you that the — that is a much smaller component of our internally supplied components. That’s a bigger number. So, we’re still in the early innings of the fully-integrated new gas box.

Edward Yang: Got it. And you commented on this in the January presentation, but do you still see no incremental impact from the export controls? And do you have any preliminary thoughts on tariffs?

Jeff Andreson: Yes, I was glad to see them delayed for 30 days on tariffs. Hi, the rules were — just to be clear, the rules were very, to me, ambiguous. Most of Mexico is where we would have felt that, we have very little that we procure out of China anymore. So any inbound tariffs from China are de-minimis for us. It’s mostly around Mexico. Most of what we build there comes from the U.S., so — and we were not very clear yet on what that is going to be. Having said that, I don’t know where that will end-up. I’m sure the rules will start to get more clarified. But certainly, it moves into our cost-plus gas box business, it gets passed forward. Okay. And then the other question was the China export. I think all that’s been baked into our visibility that we have. There’s been no other downtake. Obviously, some customers have talked about the overall impact to their business, which has already been incorporated in any outlook we’ve provided.

Edward Yang: Thanks a lot.

Jeff Andreson: All right.

Operator: Thank you. There are no further questions at this time. I’d like to pass the call back over to Jeff Andreson for closing remarks.

Jeff Andreson: I want to thank you for joining us on our call this afternoon. I’d like to thank our employees, suppliers, customers and investors for their ongoing dedication and support. We look forward to our next quarterly update in early May for our Q1 earnings call. In the meantime, feel free to reach out to Claire directly if you’d like to follow up with us. Operator, that concludes our call.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.