Liren Chen : Yeah. Hey Scott, let me take the question here. So we agree with your assessment that our momentum is accelerating in the CE and other devices. As of now, we remain committed to the over $150 million recurring revenue for the CE and IoT opportunity. But also additional, we will be recognizing case by case a cash-up payment, as we have done in the Lenovo case here. So that will be on top of the $150 million recurring revenue. Regarding my earlier comments, we have signed two new deals in this quarter. One is for the HEVC deal for Lenovo. The other one is it’s a Humax deal, that’s covering set-top boxes. So that’s still a device deal and we also put that under the CE program here. So that’s not from the streaming services.
But as we have touched on before, we believe our video technology, HEVC and other technology, VVC, and frankly, there’s alternative implementations for AV1 VP9s, which we all have very strong IP on. It’s very important to the online streaming service. And that’s we define as a Greenfield they are working very hard on. We believe that’s a very large opportunity, and we will try to get recognizing for the value we have delivered to the industry over time.
Scott Searle : Great, thanks so much. I’ll get back in the queue.
Operator: All right, one moment for your next question. And for your next question, it comes from the line of Tal Liani from Bank of America. Tal, your line is open. Please ask your question.
Tal Liani : Yes, I have. The first question is about financials. Can you elaborate on the EBITDA margins this quarter? Also, your free cash flow generation strongly outperformed our numbers. Can you touch on the drivers there? And lastly, just on the smartphone strength in the quarter, would you mind to summarize again and double-click on what drove the strength? Thank you.
Rich Brezski: Yeah, so I can take those, Tal. So, and there’s some related, a related thread to all three aspects of your question. The first on the EBITDA margins, it really speaks to the operating leverage that exists within our business. So, as we drive performance on the top line, as we did this quarter with the new licenses Liren spoke about, principally the Lenovo HEVC agreement, there’s not really any incremental cost associated with that. So that’s a bottom line drop and drives up that margin. That’s why we say long-term at $650 million, we think we can get to, maintain a 60% margin because there’s just not as much expense growth necessary to achieve that in our view. Free cash flow, there it’s a little bit, the margin speaks to kind of, or correlates with cash flow over time.
But in the quarter, we coming in, we expected a large customer receipt. And I think we referred to that in our guidance at the beginning of the year or the beginning of the quarter. And then also, with some of the agreements we signed, we’re able to increase the cash receipts in the quarter as well. So, also in part related to the new agreements. And the Lenovo HEVC deal, it is video codec, but it doesn’t apply only to consumer electronics. That also applies to smartphone. So, there is an allocation there to smartphone. Got it, thank you.
Operator: One moment for your next question. And for the next question, it comes from the line of Mark Lipacis from Jefferies. Your line is open, please ask your question.
Mark Lipacis : Hi, thanks for taking my questions. On the licensing, the streaming IP, the cloud service providers, can you – can you talk about, like, how does that play out? Is there an ability to quantify the size of the market or the timing? And where would that – would that be a new category for you? Or is that in CE and IoT? Or is that in a different category as you play, as that plays out? And then I had a follow-up, yes.
