Good morning. My name is James, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Silicon Labs Second Quarter Fiscal 2018 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions] Thank you. I will now turn the call over to Jalene Hoover, Director of Investor Relations and International Finance. Jalene, please go ahead.

Thank you, James and good morning everyone. Tyson Tuttle, Chief Executive Officer and John Hollister, Chief Financial Officer are on today's call. We will discuss our financial performance and review our business activities for the second quarter. After our prepared comments we will take questions. Our earnings press release and the accompanying financial tables are available in the Investor Relations section of our website at www.silabs.com. This call is also being webcast and a replay will be available for four weeks. Our comments today will include forward-looking statements subject to risks and uncertainties. We base these forward-looking statements on information available to us as of the date of this conference call and assume no obligation to update these statements in the future. We encourage you to review our SEC filings, which identify important risk factors that could cause actual results to differ materially from those contained in any forward-looking statements. Additionally, during our call today we will make reference to certain non-GAAP financial information. A reconciliation of our GAAP to non-GAAP results is included in the company's earnings press release and also in the Investor Relations section of Silicon Labs website. I would now like to turn the call over to Silicon Labs' Chief Financial Officer, John Hollister.

Thanks Jalene. I'm pleased to report that we achieved record revenue of $217 million in the second quarter, up 14% year-on-year and at the high-end of our guidance range. Our opportunity pipeline has grown to more than $9 billion and in Q2 we saw record design win activity. Strong revenue performance combined with favorable gross margin allowed us to deliver non-GAAP EPS in excess of our guide at $0.92, up 16% year-on-year. Our IoT products generated a new all-time record of $116 million for the quarter, which is about 19% growth year-on-year. This includes a partial quarter contribution from Z-Wave that was in line with expectations at approximately $8 million. Apart from Z-Wave, we saw strength in sales of MCUs, sensors and proprietary wireless partially offset by weakness in 15.4 products due to delays in some large customer rounds, including a pause in the UK smart metering roll out. We had another outstanding quarter in our infrastructure products with quarterly revenue exceeding $50 million for the first time ending at $52 million and exceeding expectations. This represents year-on-year growth of 35% well ahead of our long-term strategic growth target. Strong performance in both timing and isolation contributed to these results. Broadcast declined to $34 million down 7% year-on-year. Broadcast consumer was flat for the quarter with automotive down. Access declined as expected for the quarter ending at $15 million with a portion of the decline attributable to the US ban on shipments to ZTE. Distribution revenue in Q2 was approximately 71% of total sales. Our top 10 customers represented less than 20% of total first-half revenue with no customer greater than 5%. Geographically, strong performance in IoT and infrastructure drove robust growth in the Americas with declines in Europe on infrastructure and broadcast automotive. APAC declined slightly with growth in…

Thanks, John. We're very pleased to report outstanding second quarter 2018 financial performance, including more than 14% year-on-year revenue growth. Record performance in IoT and infrastructure drove top line growth and now represents 80% of total revenue. Our diversified product portfolio with more than 50% of revenue derived from industrial markets is driving greater consistency and financial results. IoT is our largest market opportunity and now represents more than half of total revenue. Our connectivity portfolio continues to gain traction as we target low power wireless applications with a broad range of protocols and a common hardware and software platform. We are well positioned to extend our leadership as a supplier of silicon, software and solutions for IoT end nodes. In Q2, we completed the purchase of Sigma Designs of Z-Wave business. Z-Wave is a proven broadly deployed mesh networking technology for the smart home with more than 100 million devices shipped to date. This strategic acquisition complements Silicon Labs’ comprehensive wireless hardware and software portfolio, drives collaboration while expanding access to a diverse set of ecosystem partners including ADT, Alarm.com, Amazon and Ring, Comcast, Google Home, Samsung SmartThings, Vivant, and Yale, and significantly strengthens our position in the smart home market. Z-Wave’s focus on product interoperability, advanced security and ease of deployment combined with Silicon Labs’ Wireless Gecko platform and multiprotocol expertise offers a great opportunity to enhance our combined roadmaps. We believe having multiple connectivity standards under one roof strengthens our influence on the evolution and adoption of wireless standards in targeted IoT market segments. Combining multiple capabilities under the same platform, developing our own standards-based wireless protocols rather than licensing stacks from third parties and optimizing our hardware and software to work seamlessly together are all examples of how we differentiate ourselves from the competition. Silicon Labs’…

Thank you, Tyson. Before we open the call for the question-and-answer session, I would like to announce our participation in upcoming conferences, including KeyBanc Capital Markets 20th Annual Technology Leadership Forum in Vail on August 13th, and Citi’s Global Technology Conference in New York on September 5th. We would now like to open up the call up for your questions. To accommodate as many people as possible before the market opens, we ask that you please limit your questions to one with one follow-up. James?

[Operator Instructions] Your first question comes from the line of Cody Acree from Loop Capital Markets. Go ahead please. Your line is open.

Thanks for taking my question. Congrats on the progress. John, just a quick housekeeping, beyond Q3 can you give us any help on what you are thinking about acquisition, amortization related charges?

Yes, Cody. The third-quarter guide is a reasonable view on that looking forward certainly over the next couple of years. So that is a good benchmark to use for you going forward. This would give us a full quarter of amortization on the Q3 GAAP guide.

Okay, great. And Tyson, just maybe if you could give us any more details on your infrastructure business, just visibility into the data center and optical networking, obviously that has been a bit lumpy, but it seems to be doing better I guess, can you kind of breakdown some of the drivers and visibility you are seeing?

Yes. I mean, we delivered 5% sequential growth 35% year-on-year. And that’s both records in timing and isolation. I means, some of the trends we’ve seen, we had a bit of a pause on the timing business. Last year it was the overall infrastructure product group was up 7% which was a little bit below our long terms 10% strategic growth target. And that was really the optical market down. We saw a stable optical market in Q1 and now in Q2 and see that persisting. What’s really driving the growth on the timing side has been industrial, datacentre, wireless areas outside the core, core optical market while we’ve been investing quite a bit at recent years. And that’s being driven by and a lot these and datacentres and in the wireless, the drive to higher data rate applications and our parts have very good performance and specs and features to address that market. So, in timing we’ve seen really the investments that we’ve been making pay off. In isolation it’s we’ve been consistently growing it’s a very broad and diverse business. We’ve got a lot of business in power supply, solar inverters and seeing a growing presence in the electric vehicle market. That’s becoming a larger piece. And so, that’s been a very consistent multiyear performance in the study growth all the way through. So, we’re really happy about the performance and infrastructure in Q2 and see those trends continuing.

Thank you very much, alright.

Your next question comes from the line of Matt Ramsay from Cowen. Go ahead please, your line is open.

Thanks very much. Good morning, everybody. Tyson, maybe you could talk a little bit about the IoT business sort of near terms organic growth trends. The long term strategic target is 20% I believe and obviously the results looked really good with the integration of Z-Wave. But if I backed that out, I think on 10% or 11% year-over-year organic. And maybe you could just talk about the near term trend there versus the longer term growth objective is sort of what you’re seeing is maybe some near term pauses or headwinds in the business and how that might reaccelerate as we get into the back half of this year and next year. Thank you.

Sure. We had 9% year-on-year growth; that includes just little bit less than $8 million from Z-Wave. So, if you back that out, it’s about an 11% year-on-year growth with that, which is below the 20% target. We also had a little bit light organic growth in the first quarter and those trends persisted into the second quarter with some delays and higher volume customers that we were planning on kind of moving out into the second half and even into Q4. We also had a transition in the U.K. the smart emerging leader in market. There’s a first generation platform moving to a second generation platform and we expect that to resume shipping in higher volumes in late Q4 or early 2019. So, we see those two big things really responsible for a bit of the slowdown. We’ve seen very strong performance in MCUs. That’s been a single digit grow or as we’ve seen devices move over to the more integrated wireless products. We’ve seen continued if you look year-on-year, we’ve been growing the wireless business 30% 40% and we see continued strength on the opportunity pipeline around the wireless applications. If you look at the design win activity in the quarter, we had a record design win activity. It was up 30 plus 38% year-on-year for last year. And so, we look into the second half and particularly as we move into 2019 and we stand behind our 20% strategic long term growth target. That is, every year you know last year infrastructure was a little behind, this year we’re a little ahead there in the organic growth. And in IoT, we see the design win pipeline supporting that 20% strategic growth target. It may be lumpy based on a few customer ramps and things like that. I think if you look at the CAGR from 2014 to 2017 and your included proforma Z-Wave, you’ve got about a 24% CAGR that we’ve achieved during the last three years. That’s inclusive of the historical Z-Wave. And so, going forward we think both on a proforma and in organic basis the 20% is the reason we’ll target it.

Got you, thanks. That’s really helpful. John, just a couple of things for yourself. With the higher mix in infrastructure I mean it’s that 60% growth margin number. It that sort of a sustainable level. And second, there is how do you see operating expense trending and are we going to get a point after a couple quarters of Z-Wave integration while we turn to similarly strong leverage or how do you think about spending? Thank you.

Yes, Matt. So, looking at the gross margin, we had very strong results in the second quarter with a 61.6% gross margin. We saw a strength in infrastructure; we saw a consumer down on that in second quarter. That’s total consumer end market and also some favourable mix effects in IoT. So, that was a good result. Looking ahead, we see 60% in third quarter as our guidance. We’re holding our model at a 58% to 60% and think that continues to be a rationale way to view the business. IoT coming and that below corporate average as those volumes headed to a stronger ramp coming ahead. We think holding the models the right way to view that. Looking at the OpEx, we get guiding basically flat off. That’s in the third quarter was some French costs to continue to roll off in third quarter with some additional headcount activity. Looking into the fourth quarter, we see likely an uptick of bits in the OpEx for fourth quarter and that to the tune of up to a couple of million dollars for fourth quarter. And that puts us close very much in line with the annual guide we’d given on OpEx at the beginning of this year. Matt, longer term heading into next year, we will be talking about this in our AOP planning cycle that now begins this fall. And I expect we would be in position to talk more about 2019 as we head into the early part of next year.

Fair enough. Well done, thank you.

Thank you.

Your next question comes from the line of Gary Mobley from Benchmark. Go ahead please, your line is open.

Thanks. Good morning, everybody. Had a question about ZTE. If I recall correctly, your expectation was for you did miss about $2 million in revenue relating to ZTE in the second quarter. Now that we’ve seen some easing at the shipment ban, what’s your expectation for business for ZTE looking into the third quarter? And was there any benefit from the migration from ASC 605 to 606 at least on the year-over-year comp basis.

Yes Gary. This is John. Taking the first question. The ZTE ban has been lifted and we are engaging with ZTE to determine their resumption of production activity and consumption rates. So, that is comprehended in our 3rd quarter guidance that we provided this morning. Relevant to the change in the accounting methodology, yes there is some beneficial effect of that and that has incorporated in our second quarter results as well.

Okay, thank you guys.

Your next question comes from the line of Blayne Curtis from Barclays. Go ahead please, your line is open.

Hey guys, thanks for taking my question. Maybe just a follow-up on the gross margin and so I was largely curious I mean you said a mix within IoT. Is that just a module that’s it or are you seeing some benefit on a product basis and just kind of curious as you look at the Z-Wave and improvement in the gross margin structure there as well. Thanks.

Yes. There is a fair amount of mix within IoT. It’s a broad product base with you know, product and customer mix effects across what is now a $100 million per quarter plus type business. So yes, we’ll see some fluctuation within that from time to time. Z-Wave integration is proceeding smoothly including looking for opportunities for manufacturing synergies and we will continue to optimize that as we go forward here.

Thank you. And this question --.

I can add then on with the strength in the proprietary wireless side, that’s also an area that is higher on the gross margin. So, that lend a little bit of favorability as well.

Thanks. And then a question for you Tyson, just as more strategic nature. A question I get it most is when you look out over the next couple of year in home automates and why Bluetooth wouldn’t eventually win out. Obviously you have Bluetooth capabilities, we’re thinking such. But just curious, it’s like the Z-Wave. Now, what is the pitch there for customer to continue to use that technology versus something like Bluetooth which is more ubiquitous?

Yes. So, Bluetooth is more of a point-to-point solution and is really the gateways in Bluetooth typically involve a smartphone. So, whereas a ZigBee or a Z-Wave device would have a gateway connected to the internet and would be kind of more of an autonomous network. It’s also a mesh network. So, there is a higher level of maturity and robustness to those that many of the operators and service providers have chosen these mesh networking technologies and we see those only solidifying their position in the U.S. and in Europe. There is quite a bit of interest in China in particular around the Bluetooth mesh technology and we were the first company to launch a Bluetooth mesh stack and are heavily engaged in the China market around Bluetooth mesh and see that as a very interesting solution. And given that we have a common hardware and software platform and we can run these protocols on the same hardware essentially and even are able to run Bluetooth and ZigBee. And in the future, Bluetooth and Z-Wave on the same device that will bring in new use cases. And some of the advantages that you would see in Bluetooth into the other mesh networking technologies. It also drives a higher level of efficiency for us because we are writing all of the stacks and making them interoperate on the same platform. So, I think that IoT is a very broad market. It’s 1000s of applications, lots of different end devices, lots of customers and you see a diversity of technologies across those. So, I think the fact that we can support the variety of technologies on a common platform is no matter which way the market goes and which application in particular protocol a particular customer wants we’re able to support that. So, we feel like we’re quite well positioned no matter which way the market goes.

Thanks.

Your next questions comes from the line of Craig Ellis from B. Riley FBR. Go ahead please, your line is open.

Yes, thanks for taking the question and congratulations on the strong execution, guys. Tyson, I wanted to go back to some of the comments in your prepared remarks regarding infrastructure. I think you said that timing head strength and its non-communications businesses and I wanted to just follow-up on that put some more color. And with respect of isolation, it had been historic over last year. It looks like it’s continuing that same track record. Can you provide a little bit of a look ahead and give us a view of what isolation could look like as we look into 2019 and what the incremental drivers are longer term.

Right. So, if you look at the infrastructure business, let’s peel into part and just talk first about timing. We’ve got a very broad portfolio of oscillators and clocks. And as communication standards and datacentre and wireless as we move into 5G, there is a need for a higher data rate speeds that really require the high performance that we’re kind of famous for. And what we’ve got patented technology that allows us to achieve a high level of integration; a high level of functionality and very low jitter which is critical with these application. So, that’s been really in the optical market where we’re seeing higher performance requirements, that’s where we had initial success and in timing and now that’s being extended into these applications through the lot of the NPI pipeline that we’ve been driving here over the last five years. So, that’s finally starting to take hold. I would add that the stickiness and these are very high quality long live high gross margin products and applications and we’re really pleased with the progress that we’re making there. On the isolation side, this is a probably to one of our if not our most broad business there’s just a broad range of industrial applications and empower basically dealing with high power, high voltage type systems where traditionally customers have used optic couplers that’s mainly provided by companies like Avago or Broadcom now. And there has been a trend towards moving these to a digital isolation which requires gives you a higher degree of performance, higher robustness, and higher channel counts. It lets you build higher efficiency power supplies and higher efficiency motors. And then you see a lot of new emerging applications like electric vehicles which use similar technology. Solar invertors those use similar technology. So, there is and this is it’s been a multi-year performance. I mean, we’ve been growing this business from what were small numbers to now it’s about bit over 40% of the infrastructure businesses on the isolation side. I would say the isolation products are growing a little faster than timing although we’ve seen a really strong performance out of timing here over the last couple of quarters as well. We had records in both of those areas and certainly on the isolation side we see no let-up in the growth that we’re able to achieve there. Just a very strong design win pipeline record design wins in both timing and isolation here in the second quarter which moved well for going forward. That being said, we stand behind our 10% strategic growth target for the infrastructure market. Timing has been lumpy based on market conditions and roll out the various standards. If you look back over the last three years, we had a 12% CAGR for the infrastructure business and timing was down in 2017. So, we still remain conscious but very optimistic about the positioning of our products in the market.

And that’s very helpful. And then, the follow-up question is most of a financial question and more about the organizational lend and corporate implications of the chief strategy officer moved. That was announced, so congratulations to Daniel. But what does it mean that for financials longer term, the evolution of the business that is moving into a chief strategy officer role and how do you expect to tap the expertise of that role as we look at the financial performance of the business going forward?

And so, as IoT has become a larger percentage of our business, very complicated; lots of customer activity; lots of product development; lots of software. We felt that augmenting our team with someone with operating at a larger scale and with experience in microcontrollers and software development and all of that was the judicious thing to do; growing the bench strength of the team. Daniel he’s had a great run at running the IoT business. He’s got a deep understanding of the company’s strategy of what’s made us successful in IoT. And I expect him to acquire that those capabilities and that knowledge more broadly across the company as we look at the infrastructure opportunity sitting in front of us as we drive for continued growth and leadership on the IoT side. And then also, we’ve got a target to execute on M&A that we’ve got $500 million and some in the bank and we want to make sure we put the proper level of diligence and focus on growing the business that way as well. So, I’m really looking forward to working with Daniel more closely and also really delighted that Matt has joined the team and really well positioned to take the IoT business to the next level.

Thanks, and good luck.

Thank you.

Your next question comes from the line of Raji Gill from Needham & Company. Go ahead please, your line is open.

Yes, thanks. And congrats as well. Tyson, a question on the IoT to piggy back on the different kind of competing connectivity standards. What are your views on 802.11ac as well as the next generation 802.11ax which is both more range higher data throughput? Do you view that as a potential competitive threat to imagine that working or are you incorporating these new Wi-Fi technologies in your portfolio? Any color there would be helpful.

Yes. So, we launched Wi-Fi in at market this year. It’s using the 11n standard which is really the simpler standard that drives long range. AC is really used for it’s only a 5 GHz standard shorter range but much higher data rates. So, those are used for like more streaming video and very high speed connections. Our focus in IoT is on the end node. So, it’s the end devices many of which are cost and power constraint and our focus on IoT is to deliver very low power solution at a very cost effective point to be able to scale across this multitude of IoT in node applications. So, we view that - the other thing to note about the Wi-Fi is that it’s a star network. So, it’s connecting a device to an access point, there is deployed access points and 11n is essentially the ubiquitous standard that can connect across everything. And ac access point and ax access point will be backward compatible to the 11n. We think that the vast majority of the IoT and nodes are going to stay at 11n for the foreseeable future as the 11ax access points get rolled out, that that is something that is interesting on the road map. That will take some amount of time. The end nodes will have to support 11n and that provides really the most cost effective way to address the node application. So, we’re looking at the ax applications and that technology but believe that we’re really sitting in the sweet spot of technology. In terms of the Wi-Fi is a higher power, it burns down the batteries a lot faster in a device. And so, there are many applications that require a ZigBee or a Z-Wave type of solution to be able to operate at the cost points and in particular the battery life that’s required for IoTs. So, we see these as really compatible and complementary standards. Just like in a phone, you have Bluetooth to stream audio and you have Wi-Fi to connect to the internet. I think that there is going to be a proliferation of applications that require each of these standards and the fact that we can support all of those within a common platform is a big advantage to us in terms of being able to depending on the application use the appropriate wireless technology.

Very good, Tyson. And a housekeeping question, John. You mentioned 8 million contribution from Z-Wave partial in June 2018 quarter and you have a full quarter in the guidance. What’s the kind of the full quarter revenue for Z-Wave in Q3 contribution?

Yes, Raji. We had it broken down out. Last quarter we had a goal of 40 million, we did made cut in a little bit behind that but overall see the Z-Wave business on track and encourage what the progress we’re making with it.

Yes. That’s 40 million for the year.

Got it.

So, we got 2/3rds of the year. We had about little bit less than 8 million in the second quarter and then we’ll have a full quarter here in Q3 and then another full quarter in Q4. And then total we had talked about last quarter was 40 million and we’re essentially on track for that.

Yes, that’s perfect. Thank you.

[Operator Instructions] Your next question is from Suji Desilva from ROTH Capital. Go ahead please, your line is open.

Hi Tyson, hi John. Congratulations on the result. I just want to dig one more time into the timing of business and the non-optical improvement in datacentre. I don’t know if datacentre was driving the majority of the non-optical improvement. And that is what the lines be that’s driving the upgrade sweeping in your content. Is that a 100-gig plus gig bring in the 36-gigs or do you have any color, that will be helpful.

Yes, it was actually if you look at the growth, it’s a mix of industrial datacentre and wireless applications. Really not a majority contribution from any of those. And I mean you’ve got the 56-gig 30s, there is a 100-gig, 400-gig role outs that are driving some of those within the datacentre and on the wireless side. So, it’s a real mix that the customer base and the number of customers and the diversity that those business getting, is getting broader.

Okay, great. Good to hear. And then separately on the auto. I think it declined and maybe it’s pausing here. Are there any share shift in the auto broadcast or is that auto and demand driven and just curious hiring a new hire with that and it’s a and experience. Are you going to potentially be expanding your auto product portfolio beyond the broadcast?

Yes. So, in auto, we just had a little bit of posits, there’s no share shift or anything like that. It was a little bit of just some movement of orders quarter-to-quarter in mostly in Europe that drove this slight shift on the automotive side. In terms of other automotive business, we’ve got a fair amount of business within our isolation product line although the majority of the automotive business today is on the broadcast; the radio; the products that we are seeing contraction on hybrid and electric vehicles. We also have a little bit of microcontroller business on the 8-bit side on the automotive. In terms of new hires, we’re certainly adding on the infrastructure side to our capabilities and isolation and timing and also certainly in IoT around software that’s been a big focus for us. This year, as we brought a new FOX as well as the Z-Wave acquisition coming in. on the broadcast automotive side, I think we’ve got a pretty complete team. We’re focused on leadership on the software and winning market share there in the automotive radio space.

Okay, thanks guys.

Thank you.

Your next question comes from the line of Tore Svanberg from Stifel. Go ahead please, your line is open.

Yes, thank you. And congratulations on the strong results. First question, Tyson. Maybe you could talk a little bit about the IoT business and as it relates to customer going from a Gen 1 to a Gen 2 platform. Maybe you could talk a little bit about what happened there and I mean I’m sure the business is pretty sticky. But when we start thinking about the platform approach and software and so on and so forth, how accrued it to the business what sort of a Gen 1 to Gen 2 platform really made?

And so, the Gen 1 platform is essentially the set of products that we have out in the market today. And so, that is our complete multiband multiprotocol solution with integrated microcontrollers, integrated energy management, integrated wireless with the stacks and everything running in there. Those have been very successful out in the market and we’re seeing broad adoption across the wide range of applications. And certainly as we move and that’s in a 90 nanometre technology as we move into a 40 nanometre technology for the 2nd Gen that drives really three different factors. You’ve got there is certainly a cost that you benefit that you see by moving into a final line geometry. You also see significant improvements in power consumption that helps to enable a lot more of the IoT battery operated applications. And then you see an increase in functionality in particular around security but in terms of additional added functionality. A lot of the cycles of learning that we’ve had in the first generation as we’ve engaged into the market or getting adopted and embedded into the Gen 2 with you know throughout this process we’re trying to leverage our both our design and especially our software investments to be able to seamlessly move customers as they go from a Gen 1 to a Gen 2 device. And you know to continue to build on a lot of those customer relationships and as you know you see the roll outs of these technologies across industries. I think it’s just to continue on broadening differentiation that we’re able to deliver in a consistent way across all of these markets. So, we’re really excited about the developments on Gen 2. That’s well under way. We’re also adding additional protocols that with the Wi-Fi coming in on the Gen 2 platform. So, that’s very exciting. So, we see that as a same expander but also deepening of the relationships with customers and a deepening of the differentiation that we’re able to deliver.

That very helpful. And as my follow-up, if you look at the infrastructure business, you obviously start it with share gains and timing and then the last few years you’ve done a tremendous job in isolation. What are some of the other components or technologies that are obvious to Silicon Labs, either from an internal capital investment or even M&A?

Well, if we look at really the three pillars that we have at Silicon Labs, we’ve got IoT now over half of our revenue. We’ve got infrastructure both in timing and in power and the isolation as really deepening technologies that are very interesting for us in terms of sustainability long term and in the high quality nature of those markets. And then, also the automotive application, a little bit more targeted but in the infotainment space where we’ve got a very competitive solution in a very large market to go after the electric vehicle area which touches on the power area. But some additional targeted applications within there. So, those we believe that the SAM that we’re addressing today is substantial and growing now till 2022 about $12 billion and we got we’ve focused on converting the opportunity pipeline. We got about a $9 billion opportunity pipeline within that area and focused on converting those into design wins and driving growth and we believe that we’re well positioned to do that. In terms of M&A investments, we really look at it through the lens of and needs to be strategically aligned with what we’re trying to accomplish. You saw that with the Z-Wave acquisition and the alignment with IoT. And I would say that we also consider opportunities within the power and in the timing space to be equally attractive. So, those three areas are going to continue to be our focus both for organic investments as well as M&A. I would add that on top of that, the cultural compatibility, I mean we’ve developed a really strong culture here at Silicon Labs around design and around approaching the market and around product strategy as well as many different areas. And that’s also an important factor as we consider these as well as the accretive nature of these to be able to add to the top line as well as the bottom-line. So, I think we’re really well positioned with the strategy. We’re really pleased with the progress that we’ve seen here over the last couple of years, really proud of the quarter that we’re just able to deliver and really excited about what we’ve got coming forward second half of the year and in 2017 -- 2019.

Very helpful. Congrats again, thank you.

Thank you.

Now, I would like to now turn hand the call back over to Jalene Hoover.