Financial Data and Key Metrics Changes - The second quarter revenue was $83.3 million, up 14% year over year, exceeding guidance [4][40] - Annual recurring revenue (ARR) reached $335 million, up 16% year over year, with the highest net new ARR addition in eleven quarters [4][40] - Non-GAAP operating loss was $1.5 million, with a gross margin of 75%, down one point from the previous year [5][41] - Free cash flow margin increased to 22%, generating $8.9 million in free cash flow for the first half of 2025, compared to $5.7 million in the same period last year [34][44] Business Line Data and Key Metrics Changes - Customers with more than $100,000 in ARR grew to 634, a 16% increase year over year [5][41] - 67% of ARR now comes from multiproduct customers, up from 64% last quarter [5][36] - The growth of data being ingested into the platform increased by 20% year over year [36] Market Data and Key Metrics Changes - The company was recognized as a leader in the 2025 Forrester Wave for digital analytics solutions, receiving the highest current offering score [26] - Amplitude ranked number one in eight categories in the G2 Summer 2025 report, including product analytics for the twentieth consecutive quarter [28] Company Strategy and Development Direction - The company is focusing on becoming AI native and expanding its platform through acquisitions, such as Command AI, Craftful, and Inari [8][10][11] - The strategy emphasizes consolidating analytics, experimentation, and activation within a single ecosystem to drive greater personalization [30] - The company aims to build a more durable business by increasing visibility into future revenue streams and focusing on operational excellence [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy to accelerate growth, particularly through enterprise customer focus and platform expansion [34][46] - The company expects revenue for Q3 2025 to be between $85 million and $87 million, representing an annual growth rate of 14% at the midpoint [46] - Long-term aspirations for net revenue retention (NRR) are above 115%, driven by continued progress in selling the platform [96] Other Important Information - The company is actively working to improve sales efficiency and has shifted to a value-oriented sales model [60][68] - Management highlighted the importance of educating existing customers about the full suite of capabilities available on the platform [90][92] Q&A Session Summary Question: How do recent acquisitions help accelerate Amplitude's efforts in AI? - Management indicated that while the AI agents are in closed beta, they provide significant leverage for customers to derive value from Amplitude [55] Question: What is the outlook for sales efficiency? - Management noted improvements in sales efficiency through better territory assignments and a shift to a value-oriented sales model [60][68] Question: How much of the NRR improvement is due to churn dynamics versus upselling? - Management stated that both factors contribute, with strong platform sales driving NRR improvements [64][66] Question: What is the progress on sales enablement since the new leadership? - Management emphasized a change in mentality towards enterprise sales and refining funnel dynamics to improve sales outputs [68] Question: How is the company addressing the competition for talent in AI? - Management highlighted the alignment of new talent with the company's long-term mission and the importance of integrating AI across the product [80][84]

Financial Data and Key Metrics Changes - Reported FFO per share for Q2 2025 was $1.91, including $0.15 from the development of Freedom Plaza Shopping Center, while excluding this, FFO was $1.76, exceeding consensus and prior year FFO [6][26] - Comparable property level operating income grew approximately 5% in Q2, excluding tax credit [7] - NAREIT FFO per share guidance for 2025 was raised to a range of $7.16 to $7.26, reflecting a 6.5% growth at the midpoint [31] Business Line Data and Key Metrics Changes - Comparable retail leasing reached 644,000 square feet, nearly an all-time quarterly record, with rent spreads of 10% over in-place rents and 21% on a straight-line basis [20] - Office leasing saw 141,000 square feet signed in Q2, with total amenitized mixed-use portfolio reaching 96% leased [28] Market Data and Key Metrics Changes - The acquisition of Town Center Plaza and Town Center Crossing in Kansas City was highlighted, with demographics showing medium household incomes of $180,000, placing it among the strongest markets [22] - Annual foot traffic for the acquired centers ranked in the top 15% of the portfolio and top 2% of all shopping centers in the US [22] Company Strategy and Development Direction - The company is expanding its acquisition strategy geographically while maintaining a focus on high-quality retail properties [10][11] - Disposition strategy includes selling assets that limit long-term growth potential, with recent sales totaling $143 million [30] - Development remains a core competency, with a focus on residential projects due to historically lower exit cap rates [17][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong leasing demand and a robust pipeline of approximately 1 million square feet [21] - The company anticipates occupancy levels to rise from 93.6% to the low-94% range by year-end [31][107] Other Important Information - The company declared a quarterly common dividend increase to $1.13 per share, marking the 58th consecutive annual increase [33] - The liquidity position improved to $1.55 billion, with over $1.23 billion available on the unsecured credit facility [29] Q&A Session Summary Question: Potential acquisitions in the pipeline - Management indicated that one acquisition is in a familiar market while another is in a new market, with cap rates expected in the high sixes to low sevens [36][37] Question: Transition to new markets - Management noted that post-COVID, there is greater openness to exploring new markets, driven by retailer demand [40][42] Question: Leasing timing and bankrupt tenants - Executed deals are expected over the next three quarters, with a typical 12-month period for new leases to start producing [46][48] Question: Environment in Washington DC - Restaurants in the company's markets remain resilient, with overall traffic trends showing improvement [50][52] Question: Competitive bidding for properties - The company is facing less competition for larger assets in new markets compared to coastal areas [96][97] Question: Multifamily portfolio size - The company expects the residential income percentage to remain around 10% to 11% of total income [100][101]

Financial Data and Key Metrics Changes - System-wide sales increased approximately 6.7% year over year to $154.2 million, with total revenue rising approximately 3.4% year over year to $123.7 million [20] - Adjusted EBITDA for the second quarter was $9.6 million, representing 7.8% of total revenue, reflecting a 13% year-over-year growth driven by improved shop level margin and disciplined management of G&A [20][22] - Net income for the quarter was $2.5 million, with adjusted net income increasing by $400,000 year over year to $2.9 million [23] Business Line Data and Key Metrics Changes - Company-operated shop revenue increased approximately 2.5% year over year to $118.4 million, while franchise revenue improved approximately 27.7% year over year to $5.3 million, primarily driven by an increase in franchise units [20] - Same store sales grew by 3.2%, attributed to a 1.1% increase in transactions and a 2.1% increase in average check, with gross price increasing by approximately 2.7% [21][50] Market Data and Key Metrics Changes - Digital business represented over 41% of total shop sales, an increase of approximately 140 basis points compared to the previous year [13] - The company opened eight new shops during the second quarter, exceeding the original expectation of six, and plans to open at least another eight in the third quarter [17] Company Strategy and Development Direction - The company focuses on menu innovation, digital investments, and shop growth to drive same store sales growth and enhance customer experience [8][12] - The franchise growth acceleration initiative is on track, with 54 new franchise shop commitments in the second quarter, bringing the total to 816 shops, which is over 40% of the long-term potential for at least 2,000 shops [18] - The company is committed to community service through initiatives like the Potbelly Summer of Service, reinforcing its brand identity as a community-focused business [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, citing strong performance in same store sales and digital channels, despite external pressures on lower-income consumers [85] - The company raised its full-year guidance for same store sales growth to 2% - 3% and adjusted EBITDA to approximately $34 million - $35 million [24][25] Other Important Information - The company has implemented a new website and mobile app to enhance the customer experience, which is expected to drive further digital sales growth [14][92] - Food cost inflation is forecasted to be just shy of 2% for the third quarter, with the company locked in on its food cost baskets for the year [62] Q&A Session Summary Question: Insights on franchise openings and pipeline realization - Management indicated that the timeline for realizing franchise openings varies, with larger developers expected to deliver more units per year, while smaller agreements may take longer [33][36] Question: Corporate store openings and densification strategy - Management confirmed visibility into the corporate store pipeline, with plans to open up to 20 company units a year, focusing on markets with strong margins and lower construction costs [40][41] Question: Breakdown of same store sales growth - The 3.2% same store sales growth comprised a 1.1% increase in traffic and a 2.1% increase in average check, with a slight drop in mix [49] Question: Menu innovation timeline and testing - Management confirmed ongoing menu innovation testing, with plans to introduce new items based on customer feedback and research [56][59] Question: Visibility on food costs and tariffs - Management noted manageable food cost inflation, with a forecast of just over 2% for the back half of the year, and limited exposure to proposed tariffs [62] Question: Capital deployment strategy post-debt - Management emphasized a focus on investing in growth initiatives, technology, and share buybacks as part of their capital strategy [67][70] Question: Consumer behavior changes and competitive dynamics - Management observed pressure on lower-income consumers but noted that the majority of their traffic comes from higher income brackets, allowing for continued growth [84] Question: Differences in sales trends between mobile order and pickup versus delivery - Management reported no significant shift in sales trends between digital pickup and delivery, maintaining a focus on enhancing first-party digital channels [92][93]

Financial Data and Key Metrics Changes - Third quarter net sales were $49.9 million, up 2% year over year, with Clearfield segment net sales increasing by 15% [4][13] - Gross margin improved from 21.9% to 30.5%, driven by better overhead absorption and inventory recoveries [13] - Net income per share was $0.11, exceeding guidance and showing significant improvement from the previous year [13][15] Business Line Data and Key Metrics Changes - The Clearfield segment showed strong performance with a 15% year-over-year increase, while the Nestor segment faced challenges leading to lower revenue [14][19] - Home deployment kits are gaining traction, providing significant labor-saving opportunities and expected to contribute to future revenue growth [6][21] Market Data and Key Metrics Changes - The fiber industry is projected to grow at a 12% compound annual growth rate over the next five years, with increasing demand for fiber deployments driven by AI and cloud computing [10][11] - Community broadband providers are expected to diversify their funding sources, which may lead to more balanced growth in the future [45] Company Strategy and Development Direction - The company focuses on three strategic pillars: protecting core customers, leveraging market position for new opportunities, and targeting adjacent markets for growth [7][9] - The company aims to drive revenue growth and operational excellence to enhance long-term shareholder value [10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth despite macro uncertainties, emphasizing the importance of adapting to industry changes [5][11] - The company anticipates continued revenue growth in the Clearfield segment, while the Nestor segment is expected to see slight declines as it focuses on improving margins [14][46] Other Important Information - The company is considering alternative suppliers to address supply chain challenges, particularly related to battery backups and rectifiers [27][31] - The evolving tariff situation is not expected to materially affect operating results [15] Q&A Session Summary Question: Product mix and connected home performance - Management noted a return to a more normalized product mix, with increased cabinet sales and connected home revenue [18][19] Question: Impact of CommScope acquisition on the industry - Management viewed the acquisition positively for the fiber industry, noting that it does not directly impact Clearfield's focus [22][23] Question: Gross margin and inventory impacts - Management indicated that inventory recoveries positively affected gross margin, contributing approximately 1.7% to the margin [24][25] Question: Supply chain tightness - Management highlighted ongoing challenges with battery backup and rectifiers due to tariffs, but noted improvements in lead times for most products [27][28] Question: Data center market impact on P&L - Management expects gradual revenue growth from data center opportunities, with more significant contributions anticipated in fiscal 2027 [34][35] Question: Operating expenses outlook - Management projected a slight increase in operating expenses for the fourth quarter due to trade shows and year-end audits [36][37] Question: Smaller carrier market dynamics - Management observed that smaller carriers are impacted by uncertainty related to funding, leading to delayed revenue rather than loss [43][44] Question: Growth expectations for fiscal 2026 - Management is comfortable with growth expectations aligning with industry norms, aiming to grow as fast or faster than the industry [45][46]

Financial Data and Key Metrics Changes - Total revenue grew 70% year on year to $181.9 million, with core business contributing $130.6 million, representing 22% year over year organic growth [6][21] - Annualized recurring revenue (ARR) was $783.5 million, up 83.4% year on year, with organic ARR at $513 million, an increase of 20% year on year [6][22] - Adjusted EBITDA was $58.3 million, representing 32.1% of revenue and up 74.3% year on year [6][24] - Non-GAAP gross margins were 77.4%, exceeding expectations despite the integration of lower-margin businesses [24] Business Line Data and Key Metrics Changes - The core Clearwater revenue continued to grow at 22%, driven by strong net revenue retention rates [21] - Infusion delivered the highest bookings in its history during the quarter, welcoming 49 new clients [23] - Beacon's risk capabilities showed strong performance across all client segments, indicating robust customer interest [23] Market Data and Key Metrics Changes - The company has seen growth in international insurance and global asset management, contributing to overall revenue growth [21] - The integration of acquired businesses has led to a solid performance, with revenue outpacing conservative forecasts [22] Company Strategy and Development Direction - The company aims to build a true front-to-back platform that integrates various capabilities to enhance client service and operational efficiency [14][15] - A focus on cross-selling and launching new products is planned to fuel growth, with dedicated teams for hedge funds and asset managers established [30][48] - The partnership with Bloomberg is expected to enhance offerings for large asset managers, providing a comprehensive front-to-back solution [19][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth and margin expansion, driven by operational efficiencies and generative AI initiatives [10][11] - The company anticipates a clear path to achieving its target of 115% net revenue retention over time [25] - Management highlighted the importance of client feedback and alignment in shaping future strategies and offerings [81] Other Important Information - The company achieved $20 million in synergies within the first few days of integration, surpassing initial targets [13] - GAAP results showed a loss due to increased intangible amortization and acquisition-related costs, but operating cash flow remained strong at $47.1 million [26] Q&A Session Summary Question: Organic ARR growth expectations for the full year - Management expects acceleration in organic ARR growth in the second half of the year, driven by improved revenue growth [34][36] Question: Insights on the Bloomberg partnership and its impact - The partnership with Bloomberg is expected to enhance capabilities for large asset managers, providing a comprehensive solution that was previously unavailable [38][41] Question: Disaggregation of ARR figures - Management confirmed the ARR figures for Clearwater, Infusion, and Beacon, indicating a clear understanding of revenue contributions from each segment [45][46] Question: NRR trends post-acquisition - The net revenue retention rate for the consolidated business is currently at 110%, with expectations for improvement as the integration progresses [57][58] Question: Guidance on organic versus non-organic growth - Management provided insights on expected growth rates for Clearwater and the acquired businesses, emphasizing a focus on maintaining a 20% growth rate for the core business [61][62] Question: Impact of generative AI on revenue growth - While generative AI has improved operational efficiency, the transition to revenue-generating products is expected to take time, with potential developments anticipated in 2025 [106][110]

Financial Data and Key Metrics Changes - Digi International reported a return to year-over-year revenue growth, with annual recurring revenue (ARR) growing double digits for the third consecutive quarter [6][8] - ARR now represents approximately 30% of trailing twelve months revenues, marking a new record for the company [7] - Adjusted EBITDA margins reached a record 25.6%, driven by ARR and a favorable product mix, despite increased freight and duties costs [8] Business Line Data and Key Metrics Changes - Both reporting segments contributed to the growth in ARR, with tailored IoT solutions simplifying deployment for customers [7] - The company experienced broad-based contributions across various product categories, with improved margins in certain products [16] Market Data and Key Metrics Changes - Demand in North America is gaining prominence, while APAC has been softer than expected [40] - The utility segment and mass transit markets are showing strong demand, while the renewable market has weakened [39] Company Strategy and Development Direction - The company aims to prioritize strategic acquisitions that align with ARR growth and scale objectives [9] - Digi International is focused on maintaining a diversified global supply chain to adapt to market changes and customer needs [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improved decision-making from customers due to increased certainty in financial policies and tariffs [23] - The company anticipates that ARR and profitability will continue to outpace top-line revenue growth beyond fiscal year 2025 [55][56] Other Important Information - The company retired $30 million in debt this quarter, reducing net debt to $20 million, and is on track to be net cash positive by the end of fiscal year 2025 [9] - Free cash flow generation is highlighted as a key performance indicator, with a 9% free cash flow yield [8] Q&A Session Summary Question: Update on products and services ARR and attach rates - Management noted an increase in attach rates, with new business primarily in the IT area, contributing to recurring revenue growth [16] Question: Guidance for fourth quarter and sequential sales - Management indicated that while sales may appear flat sequentially, year-over-year growth is expected, driven by gross margin rather than operating expenses [19] Question: Demand outside of APAC and project initiation - Management is optimistic that improved financial policies and tariff certainty will lead to more timely decision-making by customers [23] Question: Size of the opportunity for OpenGear in AI infrastructure - Management highlighted a slight increase in data center business, with a focus on hybrid deployments as a growth area [25] Question: Inventory normalization and customer reordering - Management confirmed that inventory levels have normalized, and there are positive signs of improved channel velocity [26] Question: Geographical and vertical market activity - Management reported strong demand in utilities and mass transit, while the renewable market has weakened [39] Question: Competitive landscape and cost management - Management emphasized the importance of a diversified supply chain and the potential for short-term opportunities due to competitors' challenges [45] Question: Capital allocation priorities - Management stated that M&A remains the top priority for capital deployment over share buybacks [48] Question: Outlook for 2025 and interplay of recurring revenue - Management expects ARR and profitability to outpace top-line growth, with a focus on multi-year service opportunities [55][56]

Everspin (MRAM) Q2 2025 Earnings Call August 06, 2025 05:00 PM ET Speaker0Good afternoon, and welcome to Everspin Technologies Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. At the conclusion of management's prepared remarks, instructions will be provided for the question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Monica Gold, Investor Relations for ...

Financial Data and Key Metrics Changes - Revenue for the second quarter was $148 million, an increase of 5.3% year over year, and 7.4% on a pro forma basis, adjusting for the sale of fitness solutions [15][6] - Adjusted EBITDA was $45 million, representing a 30.4% margin, with a year-over-year margin expansion of over 230 basis points [7][16] - Payments revenue, excluding fitness solutions, grew 6.8% year over year, accounting for approximately 21% of overall revenue [12][15] Business Line Data and Key Metrics Changes - EverPro and EverHealth verticals represent 95% of consolidated revenue, with a total of 725,000 customers across all verticals [8][9] - Subscription and transaction revenue grew 8.1% year over year, with adjusted gross profit of $114.6 million and an adjusted gross margin of 77.4% [16][18] - The number of customers enabled for more than one solution grew by 32% year over year, with 261,000 customers enabled [10][11] Market Data and Key Metrics Changes - Annualized total payment volume (TPV) reached approximately $12.9 billion, reflecting nearly 7% year-over-year growth [13][19] - The company reported a net revenue retention (NRR) of 97% over the trailing twelve months [12][10] Company Strategy and Development Direction - The company is focusing on enhancing product capabilities and go-to-market strategies to prioritize payment attachments at the point of initial sale [9][10] - Continued investments in AI functionalities are aimed at improving customer experience and operational efficiency across various product lines [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite macroeconomic conditions, maintaining a cautious approach to revenue guidance for the second half of the year [26][38] - The company is optimistic about the ongoing transformation initiatives and the positive results seen in efficiency and sales [23][24] Other Important Information - The company has repriced and extended its credit facility, resulting in approximately $1.3 million in annual interest savings [20][19] - The company repurchased approximately 2 million shares for $20.6 million at an average price of $10.1 per share [20] Q&A Session Summary Question: Update on transformation initiatives - Management highlighted ongoing optimization efforts and positive results in efficiency and sales from the transformation initiatives [23][24] Question: Reason for not raising revenue guidance despite strong performance - Management indicated a prudent approach to revenue guidance, considering potential moderation in the second half of the year [26][38] Question: AI functionalities enhancing customer experience - Management discussed the launch of AI-powered features across product lines, improving customer engagement and operational efficiency [29][30] Question: Tax implications of the One Big Beautiful bill - Management stated it is early for analysis but anticipates some benefits from changes in interest deductibility [33] Question: Visibility into business post-Martech discontinuation - Management noted improved visibility and linearity in operations, focusing efforts on core verticals [62]

Financial Data and Key Metrics Changes - Net sales for Q2 reached $12.79 billion, up 10.9% year over year in U.S. dollars and 10.2% on an FX neutral basis [17] - Adjusted EBITDA was $294 million, an increase of nearly 6% in U.S. dollars and 5% in constant currency [26] - Non-GAAP net income increased to $142 million from $120 million in 2024, representing an over 18% increase in U.S. dollars [27] Business Line Data and Key Metrics Changes - Client and Endpoint Solutions grew nearly 14% on an FX neutral basis, driven by strong demand in desktop, notebook, and smartphone categories [17] - Advanced Solutions saw mid-single digit growth, supported by servers, storage, and cybersecurity, particularly in Asia Pacific markets [17] - Cloud business continued to grow, contributing to overall positive performance across all business lines [7][16] Market Data and Key Metrics Changes - North America net sales were $4.98 billion, up 13.8% year over year on an FX neutral basis, driven by strong growth in servers, storage, and cybersecurity [20] - Asia Pacific demonstrated the highest net sales growth at 16.2% year over year in U.S. dollars, with strong performance in Client and Endpoint Solutions [21] - Latin America returned to growth with net sales of $853 million, increasing 0.8% in U.S. dollars and 6.4% in constant currency [22] Company Strategy and Development Direction - The company is focusing on its xVantage platform to streamline operations and enhance customer experiences through AI and automation [11][12] - Recent divestitures of non-core assets are part of a strategy to improve operational effectiveness and concentrate on core strengths [10] - The evolution into a platform company aims to provide customers with speed, scale, and service, enhancing overall business efficiency [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ransomware attack in July but confirmed it had no impact on Q2 results, emphasizing a strong recovery and operational resilience [4][6] - The company expects continued year-over-year top line growth in Q3, with guidance reflecting some conservatism due to the cyber incident [30][31] - Management remains optimistic about the impact of the platform strategy and the overall business environment moving forward [16] Other Important Information - The company ended Q2 with net working capital of $4.6 billion, an increase from $3.9 billion year over year, driven by higher sales and investment needs [28] - Adjusted free cash flow was an outflow of $263 million, reflecting investments to grow the business [29] - The company announced a 2.6% increase in its quarterly dividend to be paid in Q3 [29] Q&A Session Summary Question: Expectations for endpoint and advanced solutions revenue growth in Q3 - Management expects mid-single digit growth for client and endpoint solutions, with stronger performance in desktop and notebook categories, while smartphone growth is anticipated to be lower [36][38] Question: Impact of government subsidies on mobility growth in China - Management noted that some growth in mobility was likely driven by government subsidies, but overall demand remained strong [39][41] Question: Demand pull forward in North America - Management did not observe significant demand pull forward across categories, with some minor effects in desktop and notebook refresh [46][47] Question: Implications of the recent bill on customer discussions - Management indicated that the impact of the recent bill is not significant for their business, as public sector sales are a minor part of their overall revenue [49][50] Question: Market cycle positioning for various products - Management believes the market is in a mid-cycle phase, with growth observed in storage, server, and networking categories [57] Question: Cash flow dynamics and expectations for the year - Management expects Q3 cash flow to be neutral to slightly negative due to inventory investments, with a positive cash flow anticipated in Q4 as inventory converts to receivables [91][92]

Financial Data and Key Metrics Changes - For fiscal year 2024, the company reported a 13% increase in bookings and achieved 10% organic revenue growth compared to fiscal year 2023 [7] - Q2 revenue was $12,050,000, which was within guidance, but down 19% year over year [33] - Non-GAAP operating loss for Q2 was $5,700,000, compared to a non-GAAP operating income of $1,700,000 in Q2 2024 [34] - Non-GAAP net loss for the quarter was $4,600,000, compared to a non-GAAP net income of $1,800,000 in the same period last year [35] - The company maintains its fiscal year 2025 revenue guidance in the range of $64,000,000 to $70,000,000, representing a year-over-year growth of 7% to 17% [9][12] Business Line Data and Key Metrics Changes - 14% of Q2 revenue came from 10 new customer purchases, totaling $4,180,000 in bookings [10] - 40% of revenue was from expansion in existing customers, while 40% was from renewals [11] - TCAD bookings were down 55% year over year, while EDA bookings were down slightly by 7% year over year [36] - SiP product bookings increased by approximately $1,500,000, representing a growth of 87% year over year [36] Market Data and Key Metrics Changes - Revenue from the Americas was down 44% year over year, primarily due to lower TCAD product sales [38] - Asia Pacific revenue was up 11% year over year, driven by higher EDA sales [38] - EMEA revenue was down 22% year over year due to lower TCAD sales in the region [38] Company Strategy and Development Direction - The company is focusing on strategic acquisitions to expand its serviceable addressable market (SAM), targeting high-growth sectors such as AI, photonics, and high-performance computing [7][8] - Recent acquisitions have added an estimated $600,000,000 in incremental SAM, with the latest acquisition of Mixel adding another $110,000,000 [8][18] - The company aims to deepen engagement with R&D customers and broaden its semiconductor IP portfolio [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory, supported by strong market demand for organic growth and strategic expansion [10] - The company is taking a conservative approach to guidance due to the current macroeconomic environment [9] - Management expects to close delayed customer orders in Q3 and Q4, with no cancellations reported [65] Other Important Information - The company has added three new executives to strengthen its leadership team [21] - The total addressable market (TAM) has expanded from $3,800,000,000 in 2024 to $4,500,000,000 in 2025 [23] - Non-GAAP gross margin for Q2 was 76%, down from 86% in Q2 2024, primarily due to lower revenue [39] Q&A Session Summary Question: What was the organic growth of ACV? - The organic component of the ACV growth was in the 1% to 2% range of the 5% increase [51] Question: How is the integration of the Cadence division progressing? - Integration is mostly complete, with ongoing work on financial and operational synergies [52][53] Question: What is the current macro environment affecting bookings? - There has been no impact on the China market, and delays in orders are expected to close in Q3 and Q4 [55] Question: What revenue contribution is expected from the Mixel acquisition? - Expected revenue contribution from Mixel for Q3 and Q4 is between $3,000,000 to $5,000,000 [61] Question: How does the company view its annual guidance amidst lower results? - The company remains confident that delayed sales will close in Q3 and Q4, supporting the annual guidance [64] Question: What is the cash balance after the Mixel payment? - The expected cash balance after the Mixel payment is around $30,000,000 to $35,000,000 [80] Question: How will the acquisitions impact Q3 guidance? - The guidance includes expected contributions from PPC and TechX, with a portion of revenue recognized in Q3 [84]