AOS(US:AOSL)2022-11-04 06:10Financial Data and Key Metrics Changes - Revenue for Q1 2023 was $208.5 million, representing an 11.5% year-over-year growth and a 7.5% sequential increase [7][23] - Non-GAAP gross margin was 35.4%, up from 33.8% in the prior quarter and 35.3% a year ago [23] - Non-GAAP EPS was $1.20, compared to $0.95 in the previous quarter and $1.06 a year ago [24] Business Line Data and Key Metrics Changes - Computing segment revenue increased by 13.6% year-over-year, accounting for 42.8% of total revenue [17] - Consumer segment revenue grew 11% year-over-year and 23% sequentially, driven by record gaming volumes which increased 122.7% year-over-year [19] - Communications segment revenue rose 21.8% year-over-year and 5.1% sequentially, representing 15.1% of total revenue [20] - Power Supply and Industrial segment revenue was up 8% year-over-year and 14.3% sequentially, accounting for 19.6% of total revenue [21] Market Data and Key Metrics Changes - Total PC revenue for calendar 2022 is expected to grow slightly year-over-year despite a 20% decline in global PC units [8] - Smartphone revenue is anticipated to increase by 15% year-over-year, even as global smartphone shipments are forecasted to decline by 6.5% [8] Company Strategy and Development Direction - The company aims to achieve $1 billion in annual revenue within the next couple of years, supported by a diversified product portfolio and strong customer relationships [12] - The focus on premium tier products and partnerships with Tier 1 customers is expected to enhance resilience during economic slowdowns [9][11] - The company is actively investing in expanding manufacturing capabilities and diversifying its customer base globally [11][12] Management's Comments on Operating Environment and Future Outlook - Management anticipates a weaker performance in calendar Q4 2022 due to industry inventory corrections, particularly in PCs and smartphones [7] - Despite near-term challenges, the company believes the underlying demand for power products will remain strong due to ongoing electrification trends [12] - Management expressed confidence in navigating the current economic environment and achieving long-term growth targets [12] Other Important Information - The company has paused hiring and is taking steps to reduce discretionary spending in response to the anticipated slowdown [11] - Cash balance at the end of the quarter was $316.1 million, up from $314.4 million in the previous quarter [25] Q&A Session Summary Question: Margin profile and utilization charges - Management indicated that the December quarter's margin guidance reflects the impact of inventory correction, particularly in PCs and smartphones, leading to a less favorable product mix [30] Question: Customer behavior and order adjustments - Management noted that customer orders have been adjusted downwards, impacting backlog and production schedules [34] Question: Inventory levels in the channel - Management stated that distributor inventory remains lean, while inventory corrections are more pronounced at ODMs and OEMs, particularly in the PC segment [39] Question: Pricing environment - Management acknowledged that the pricing environment is becoming more competitive due to inventory corrections and demand slowdowns, particularly affecting lower-end products [45] Question: Oregon fab expansion considerations - Management confirmed that the expansion of the Oregon fab is proceeding as planned, with expectations that it will support higher performance products despite current demand challenges [47] Question: Update on Chongqing JV - Management indicated that the Chongqing JV continues to provide wafers and assembly services, with no current need to reallocate production back to the Oregon fab [57]