Operator: Our next question comes from the line of Tore Svanberg from Stifel.
Tore Svanberg : First question is on the Home & Life business. So Matt, I know this is a difficult question to answer, but I’ll ask it anyway. So I think it peaked at a run rate of $0.5 billion. Now the run rate is $100 million. So it’s quite stunning. And I’m just wondering if you could unpack a little bit as you had that $0.5 billion peak, what was cyclicality and what was more secular businesses. And if you look at the mix today, that $27 million, how much of that is “more secular business versus cyclical business.” I know, again, it’s difficult, but if you can unpack some of that, that would be great. And I assume you’re not going to give us a true consumption number of that business, but any more color you could add would be really helpful.
Matt Johnson: Yes, sure, Tore. Yes, that is not easy to answer. But I’ll do my graph to provide some perspective and context that hopefully will be helpful. So maybe just going way up to the top, big picture, we haven’t provided an exact consumption number for the company or for the segment. But it can be helpful to remember that we did do some meaningful OpEx actions in Q4 of last year. And obviously, those were with that consumption level of mind. And whatever you do there for cuts, you want your breakeven point to be below that consumption level. So that’s important conceptually just as a way to help think about it. Going into the home line. It’s been about 4, 5-plus quarters now of declines that we’ve seen in that business.
We do see, what I call, cautiously optimistic signs that we’re seeing some improvement in bookings, seeing some — not push out anymore. It’s more full ends but visibility remains low because people aren’t even ordering within lead times, they’re ordering a much shorter basis as they need. I think they’re still working through their inventory. They’ve been rattled, they’re uncertain. So I do much further through that cycle correction, and we’re seeing encouraging signs, but not at the level to say we’re on the other side of this yet or we’re out of the woods. So I want that to be clear. That being said, yes, we went through a remarkable journey, right, from demand — well, one, I think there was a shift from services to goods and then back to services, demand buying people want expected demand levels would be continuing in perpetuity.
People build inventory. And then there’s a whole bunch of trends under there that are difficult to pull out or tease out or parse out how much is contributing to each. But you have the end market strength, you have the secular positions that are very important, right? Matter starting to show a lot of strength in there in our prepared remarks. And then we talked about Life a few times that Life has been durable throughout this because of that secular strength. But at the same time, the design win momentum we’ve started sharing with the world on that is really just in its early stages, and that will be impactful as well. So I’d say it’s showing resilience because throughout this, because of those ramps that are starting, but the real growth there and real impact is yet to come.
So — and the last piece is the Home piece as an end market, we continue to see solid progress and opportunity there, whether it’s trends such as matter, such as Amazon Sidewalk, such as just the market finding is splitting on the other side of this downturn. What I’m trying to convey is our confidence in that end segment from a growth perspective remains very strong. And our confidence in our position there also remains very strong as we bring in really great momentum around Bluetooth where we’re clearly gaining share and we’re going to do the same thing in Wi-Fi, and that will help not only firm or stabilize the home for us but actually grow the home moving forward. So I know that’s a lot to worry, but those are all some of the moving pieces in there.
And the punch line is our confidence in the space is — continues to be strong. We know we’re gaining share, and we see opportunities to grow through some of those trends, like I mentioned, for matter, Bluetooth growth, Wi-Fi growth going forward.
Tore Svanberg : No, that’s really helpful. I appreciate that, Matt. As my follow-up, so I know, obviously, there’s a cyclical balance coming here. That’s pretty obvious. But I know on top of that, you also have a lot of new design wins. You have some new secular business that are ramping. You talked about some of the glucose metering, smart metering, shelf abelling, then you go Wi-Fi. So I guess the real question that I have here is if you look at some of those newer businesses, any update there? And could these be really material to revenues for calendar ‘24, especially in light of perhaps some of the more cyclical business at such a low level?
Matt Johnson: Yes. Understood. Quick answer is yes. That is our expectation that we’ve been unwavering in our view that we’re going through a particularly vicious market cycle that has impacted demand. Inventory destocking that’s substantial. And we’re trying to be clear, we’re not calling the market bottom here. We’re not out of the woods yet. It’s clearly these cycles have worked fully through, but we are calling [indiscernible]. And the reason we’re comfortable doing that is we’re not calling the rate necessarily, but we do see the confluence of all those things that the inventory and stocking going in the right direction. We do see our position in the market is strong, and those designs are starting to ramp.
We just – last earnings call, we called out a few that people were unaware of. We just called out a couple more on this call that people are unaware of. And there’s more these are intended to give some perspective that they’re happening. Yes, there’s a massive counterbalance with this market cycle. But at some point, those 2 things will – the ramps are going to continue and normally get stronger and the market will work through its cycle. And when those things come together, it looks like we’ll be positioned for strong growth when those two happen.
Operator: And our next question comes from the line of Cody Acree from the Benchmark Company.
Cody Acree : Maybe you can talk about just your order linearity throughout the last 90 days. You mentioned that orders are coming in with less than your typical turns request. Can you just talk about that pattern of orders and how that gives you visibility to the bottom?
Matt Johnson: Sure. So I’m trying — I don’t want to not make a is remark. It’s hard for us right now because what is normal has really been disrupted over this entire cycle. So I’ll start with that. But to answer your question directly, last 90 days, what we’ve seen is a trend in an encouraging direction where they’re increasing — not increasing at the level that we’d like to see to say, this is done. We’re on the other side of it but optimistic that they’re going in the right direction, which is always important. The visibility continues to be low because our lead time right now, let’s just say, on a quarter, roughly, a little over a quarter. And most of the behavior is customers — majority of the — as customers are and well within that.
So that gives you an indication of what we’re seeing. It’s also worth pointing out that given where we think we’re at the cycle between — for lack of better term, the consumer and industrial segments, probably seeing order patterns a little more indicative of consumer and home and license general being further through the cycle than industrial and commercial. But like I said earlier, we do expect both to grow from Q4 to Q1. So hopefully, that helps give some context and perspective. Simple headline going in the right direction but still have further to go.
Cody Acree : Last quarter, you talked pretty optimistically about Series 3. That has been a little absent this quarter. Can you just give us an update on how that platform has progressed this quarter?
Matt Johnson: Yes, sure. Not asset by design, just in the middle of a lot of work. So a quick way to think about it, Series 2. We’re continuing to release products on Series 2 couldn’t be happier with the impact to have on the market. Design wins, momentum has been excellent. It’s then everything you’d want to see. And it’s still in a very powerful spot in its life cycle that is going to drive growth for us for a long time. Series 3, making progress there on track to what we’ve said, but we’re committed and the impact that we expect that, that’s going to have not only on us as a company but on our industry. An easy way to think about it Series 3 takes that platform that is so pervasive, which is Series 2 and gives people the ability to lever that and push even further on all the dimensions that we are industry leading on.
whether it’s the wireless performance, whether it’s scalability, flexibility, whether it’s the compute that our customers want, including AIML or industry-leading security, even being quantum read. So the combination of those things have our customers excited. But what I don’t want to do and why you probably noticed it’s not the call, we are — that will be work for us for years to come. And we’re well into it. We’re very comfortable with where we’re at in that cycle, but we’ll be talking about Series 2 for years still, and we’ll be talking about Series 3 for years to come. And both will kind of coincide or be parallel to each other, for at least the next 5 to 10 years. So it’s important to have that perspective as we talk about both of those.
One is not going away and the other is not replacing it. But very encouraged by Series 3, where it’s at and the market customer response.
Operator: And our next question comes from the line of Quinn Bolton from Needham & Company.
Quinn Bolton : I just wanted to — you talked about starting to see some more encouraging orders in home and life and you’ve also said it’s sort of further through the inventory correction. Just wondering if you could specifically talk more about what you’re seeing on the industrial commercial side. Home & Life is sort of 4 to 5 quarters in, would you expect Industrial & Commercial to kind of have that same 4 to 5 quarter under pressure before you kind of get back to more normalized run rates.
