So that was a bit additive to our inventory balances as well and we’re working through some of the integration with those businesses as well and hopefully we’ll see further refinement and improvement in some of the inventory metrics as we go forward. But we are keeping a constant eye on the dynamics that we have across the business. So it’s something that we pay close attention to.
Lauren Guy: Okay, great. Thank you. And for my follow-up, just wondering how are you thinking about recent industry consolidation between Lamentum and Cloud Light and optical transceivers? How does that kind of impact your component first strategy?
Steve Daly: I don’t think it changes our overall strategy.
Lauren Guy: Okay, thank you.
Operator: Thank you. And our next question coming from the line of Matt Ramsay with TD Cowen. Your line is open.
Sean O’Loughlin: Hey, guys, this is Sean O’Loughlin for Matt. Just two quick ones from me. First off, I was wondering if you could talk about the long-term model a little bit more. I know that you guys at one point had this billion-dollar revenue target, and that got pushed out a little bit, but I think it also came with maybe double-digit growth rate expectation. Obviously, a lot has changed since then, but we’re just wondering how you’re thinking about it from here.
Steve Daly: Thanks for the question, Sean. So achieving a billion dollars in revenue is a question of not if, but when and when we originally put that out there, we had targeted our fiscal ’25 and this was going back maybe about 18 months or two years ago and certainly, there’s been a lot of headwinds in the industry that have slowed us down. So we definitely, over the past few quarters, have stepped back from that target, given our growth rate declining year-over-year. Certainly, that makes sense. Right now, we have a run rate of about $150 million. If you annualize that and then add Wolfspeed onto that, you can see MACOM getting into the low $700 million run rate just by simple math and then a 10% growth rate on that for a few years gets us into that billion-dollar revenue range.
So I think it’s — our crystal ball sort of says sometime in the late ’25 or ’26 time frame is not unreasonable. That would mean that we would have to put up some pretty strong growth numbers. So there’s tremendous risk associated with that, but when we think about planning and execution and focusing on positioning ourselves, that is the goal that we’re targeting and I’ll highlight that the way we’re going to get there is expanding our SAM and we’re adding very new vectors of growth to our portfolio, and that should allow us to achieve these targets. And the other thing I’ll highlight is we will not sacrifice profitability for growth. We are focused on earnings per share. As I mentioned and Jack mentioned, $2.70 this year, we generated close to $200 million of net income for the full year and as we grow over the next two to three years, we want to grow the top line, and more importantly, we want to grow the bottom line and our model should support that.
Our model consists of internal unique process technologies and products and going to the merchant market and running sort of a fabulous business model. So we make full use of all of the major foundries on the silicon side, global foundries, Tower Jazz, TSMC, and others. So we think we have a strong fighting chance to achieve our targets, but there’s lots of dynamics and lots of wood to chop between now and then.
Sean O’Loughlin: Thanks, Steve. That’s really helpful and then very quick clarification on the RF acquisition from Wolfspeed. Are there any regulatory impediments to closing that, or is it just getting the paperwork in order? Thanks.
Steve Daly: So there were two regulatory hurdles which we’ve gone through. One is HSR waiting period, which expired, and the second was a UK approval, which was received. So after that, it’s just making sure that Wolfspeed and MACOM do the final work on aligning so that when we close, we will be operational. And this is rather unique. Most companies would acquire a business and then integrate. We are organizing in a way to have a lot of planning up front so that when we close, it can be an instantaneous integration, so to speak and so outside of that, there’s nothing stopping this.
Operator: Thank you. And I see we have another question from Tore Svanberg from Stifel. Your line is now open.
Tore Svanberg: Yes, just two quick follow-ups. So Steve, first of all, you commented a little bit on the laser business, but I know it’s been a bit sort of fits and stops there. And I’m just wondering, is it a market issue? Is it a yield issue? Is it because the technology is so unique? Just trying to understand when the laser business could really start to grow.
Steve Daly: So MACOM was very late to the market with our 25G DFB laser portfolio and so I would put it in the category of timing and then when we really had our portfolio established and we’re selling it in the market, our timing just was not good in terms of generations and focus of a lot of the transceiver companies. We’re starting to break through some of that, and we’re starting to gain traction. So we don’t see a performance issue. We don’t see a yield issue. It’s not a cost issue. It’s really just knocking out the competition, so to speak and that takes time and is taking more time than we had originally thought. The other thing I’ll add is as we go into the next fiscal year, we are adding and we plan to add EMLs to the portfolio.
So this will mean CW lasers, FP lasers, DFB lasers, and EMLs. We do not manufacture VCSELs, but the next add-on to the product line will be EMLs, which generally speaking are considered high-value lasers, and they generally command higher price points.
Tore Svanberg: That’s great and one quick one for Jack. For turns this quarter, should we sort of assume a similar level as you achieved in the September quarter?
Jack Kober: Yes, and I think you’re referring to our turns business where we receive orders and ship them in the same quarter. We’ve been in the, I’d say, the mid-teens. So I think that’s a safe assumption as we go forward.
Tore Svanberg: Great. Thank you very much, and congrats.
Operator: Thank you. I will now turn the call back over to Mr. Steve Daly for any closing remarks.
Steve Daly: Thank you. In closing, I would like to thank the entire MACOM team for their outstanding effort and commitment during fiscal 2023. MACOM is fortunate to have such hardworking and dedicated employees, which make these financial results possible. And we all look forward to welcoming the Wolfspeed team to MACOM. I’m confident that together we can achieve great results. Thank you.
Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.
