AOS(US:AOSL)2019-08-10 15:35Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $111.9 million, up 2.6% sequentially and up 1.8% year-over-year [7] - Non-GAAP gross margin for Q4 was 27.4%, compared to 27.0% in the prior quarter and the same quarter last year [9] - Non-GAAP EPS for Q4 was $0.35, compared to $0.22 in the prior quarter and $0.31 year-over-year [12] - For the fiscal year 2019, revenue was $450.9 million, up 7% year-over-year [8] Business Line Data and Key Metrics Changes - MOSFET revenue was $96.4 million, up 7.1% sequentially and up 7.8% year-over-year, while Power IC revenue was $13.8 million, down 21.8% sequentially and down 21.4% year-over-year [7] - Computing segment represented 44.0% of total revenue, down 5.1% sequentially but up 2.3% year-over-year [22] - Consumer segment accounted for 18.7% of total revenue, increasing 1.3% sequentially but flat year-over-year [24] - Power Supply and Industrial segment represented 20.5% of total revenue, up 8.1% sequentially and up 3.7% year-over-year [25] - Communications segment accounted for 15.3% of revenue, up 25.4% sequentially and up 10.4% year-over-year [26] Market Data and Key Metrics Changes - The company noted a robust design-in pipeline and strong design wins, particularly in mobile and home appliance applications [19] - The demand for battery protection products in the Communications segment is rising, driven by increasing smartphone battery capacities [26] Company Strategy and Development Direction - The company aims to achieve a target of $600 million in annual revenue by calendar 2021, with a focus on diversifying its product portfolio and customer base [19][20] - The production ramp of the Chongqing Joint Venture is expected to align with the company's growth strategy, with small mass production starting in July 2019 [17][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, including trade tensions and economic uncertainty [19] - The company anticipates continued growth in the Consumer segment, particularly in home appliances, and expects a modest growth in the overall Consumer segment [24] Other Important Information - The company generated $15.2 million in operating cash flow for Q4, compared to $9.5 million in the prior quarter [13] - Cash and cash equivalents at the end of Q4 were $121.9 million, down from $139.1 million in the prior quarter [15] Q&A Session Summary Question: Can you provide more color on the $600 million target? - Management clarified that the target run rate of $600 million is expected to be approached by the June 2020 quarter, focusing on capacity readiness and technology [30][33] Question: What is the status of channel inventory health? - Management indicated that channel inventory is healthy, within the target of 2 to 3 months, and adjustments are being made to manage production according to customer demand [41] Question: How is the demand environment in China? - Management noted that demand is dynamic, with some pull-ins and push-outs due to trade tensions, but overall, the situation is being managed diligently [42][43] Question: What is the expected revenue contribution from digital power initiatives next year? - The expected revenue contribution from digital power initiatives is projected to be between $5 million to $10 million [46] Question: How will gross margins track towards the 30% target? - Management expects gross margins to gradually increase to the 28% to 29% range as new products are introduced, with a target of 30% margin when reaching $600 million in revenue [55][57]