Xperi Inc. (XPER) Q1 2016 Earnings Report, Transcript and Summary

Good afternoon, my name is Christine, and I will be a conference operator today. At this time, I would like to welcome everyone to the Tessera Technologies 2016 First Quarter Conference Call. 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. Don Markley, Investor Relations, may begin your conference.

Thank you, Christine. Good afternoon and welcome to Tessera Technologies' first quarter 2016 financial results conference call. This call is also being webcast live over the internet. Please be advised that during the course of today’s call management will make forward-looking statements regarding future events including the future financial performance of the company. These forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. You are cautioned not to place undue reliance on forward-looking statements, which speak only to the date of today’s call, May 02, 2016. More information about factors that may cause results to differ from the projections made in those forward-looking statements can be found in Tessera’s filings with the Securities and Exchange Commission including its annual report on Form 10-K for the year ended December 31, 2015 and the 10-Q for the quarter ended March 31, 2016, especially in the sections titled risk factors. The company disclaims any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur after today's date. Management may also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and reconciliation of GAAP to non-GAAP financial results, please see the first quarter financial results new release issued earlier today. Now, I'd like to introduce Tessera’s Chief Executive Officer, Tom Lacey. Tom?

Hi, Don, thank you very much. Whether live or via webcast recording, thank you for joining us on the call today. Robert and I are pleased report another strong quarter and we continue to remain very positive on the developments at the company and our progress towards our growth objectives. Let me begin with some highlights for Q1 2016. We again exceeded expectations on virtually all financial metrics and delivered our ninth consecutive profitable quarter on both the GAAP and non-GAAP basis. Our financial management continues to be strong. Our Q1 revenue was $60 million which exceeded the high-end of our guidance range. FotoNation produced a record revenue quarter. This business continues to perform well. Our capital allocation program remains robust. Recall last quarter, the board authorized an additional $200 million for our share repurchase program bringing total available authorization to approximately $225 million at that time. During Q1, we purchased approximately 1.3 million shares for approximately $37 million which represents approximately 2.5% of our shares outstanding at the end of 2016. While we remain very active on our capital allocation actions, our balance sheet remains very strong. We ended the first quarter of 2016 with a debt-free balance sheet and $363 million in cash and cash equivalents. Next, I will provide an update on our IP licensing efforts and with Invensas and FotoNation during the first quarter. We continued work on a Greenfield licensing efforts. For those of you new to the Tessera story, the Greenfield term refers to customers that have not previously licensed Tessera Intellectual Property. As we have discussed, we reached the advanced stage discussions with two of our Greenfield customers. We have had multiple executive level discussions with each. Ideally, these discussions result in a multi-year go-forward license to our valuable intellectual property but in some cases litigation may be necessary to achieve this result. Since the beginning of 2016, we have initiated discussions with several additional Greenfield customers. As we have noted in the past, these engagements can often take multiple years from initial discussions to resolution. Next, let me provide an update on Invensas technology development. Our Invensas team remains engaged with several leading semiconductor manufacturers and OSATs to further the development and broadly commercialize our portfolio of advanced packaging and interconnect technologies including BVA for the integration of applications, processors and memory, ZiBond and DBI bonding technologies. Our BVA technology addresses the industry’s demand for low profile scalable interconnect technology by readily allowing the integration of the latest generation of application, processors, and memory, and mobile electronics. Through our customer engagements, we have discovered that BVA technology not only addresses opportunities in the package on package space targeting SOCs and memory, but also fits other applications such as system and package whereby a vertical interconnect technology can enable an improvement in performance and reduction in form factor when compared to currently available approaches. As we announced this afternoon, we are very pleased to have the world's largest OSAT, ASE as a development and commercialization partner on this technology platform. As we have mentioned for several quarters, we have worked closely together to define, build, and test the BVA technology. We have successfully built and tested thousands of units and expect to complete the reliability evaluation and technology qualification by June at which point we will work with ASE to pursue important customer design wins. We are very excited about the relationship we have developed with ASE and look forward to working closely together on this and other innovative packaging platforms. On the 3-D front, we continue to receive enthusiastic support from many new and existing customers. We feel strongly that ZiBond and DBI represent truly enabling and foundational technologies for low temperature bonding for a wide range of products including image sensors, stack memory, 2.5 D, FPGAs, RF front-end and MEMS devices. We are in active discussions with a number of customers both small and large to license these technologies as well as to perform demonstrations and in some cases, collaborate on the development optimization for specific products and applications. Along this vein, on April 18, we announced a license agreement with Sandia National laboratories, a premier government research institution. Sandia intends to deploy these technologies in a range semiconductor applications. In addition, Sony the world's largest image sensor manufacturer and licensee of both ZiBond and DBI technologies, recently began shipping backside illuminated image sensors with DBI. These high quality image sensors can be found in Samsung's flagship smartphone, the Galaxy S7. This is an important milestone as it validates the viability of the DBI platform in a high-volume manufacturing environment and sets a significantly higher bar for image quality and performance in smart phones. In other words, it represents an inflection point for the image sensor market. This is the first of many high volume commercial applications we see for DBI. We look forward to providing future updates on our development and commercialization efforts. On the legal front, we attended a settlement conference with UTAC and agreed to a settlement of this matter pursuant to which we will receive $18 million over a period of three years. The other terms are presently confidential. With the UTAC matter behind us, we have to remaining legal disputes. The Toshiba contract case and the OVT TSM patent case that we inherited as part of our of Ziptronix. On the Toshiba matter, the case is proceeding according to the case schedule. Trial remains scheduled for June, 2017. On the LVTT SMC matter, there have been no new material development since last quarter. The case is still pending and no trial date is currently set. Next, I will provide an update on FotoNation. There were several important developments during the quarter. We have earned a reputation as a world-class and experienced expert in high performance low power imaging, and this is being reflected in the quality of our engagements with many world-class companies. We continue to see computer vision and imaging as critical technologies for a variety of devices. From phones to drones, to activity cameras to cars, and we are well positioned to capitalize on these growing markets. First of all, a special shout out, FotoNation posted a record revenue quarter exceeding its best previous quarter ever by 27%. We continue to see very strong interest in our image stabilization technology. During the quarter, we passed an important milestone by demonstrating best-in-class performance with ultra low-power consumption to existing and potential customers. This combination is very important in mobile phone, drones, activity cameras and other applications for cameras on the move. Given our continued customer engagement at mobile world congress and elsewhere, we remain steadfast that biometric authentication will become an important capability and future generations of cell phones and other devices. During the quarter, we produced and demonstrated smartphone iris and face authentication solutions. We believe we are well-positioned to secure multiple design wins on these emerging technologies within the next 12 months. During the quarter, we announced a light focus design win with LG, and expect to secure additional smartphone OEM this year. Light focus enables faster and more accurate focus capabilities on a smartphone. And is yet another example of our heritage of delivering best-in-class DSLR level features to smartphones. We also continue to make solid progress on our automotive efforts whereby our goal is to secure an initial Tier 1 partnership to jointly developed solutions for the market. For those of you not familiar with the automotive supply chain, a Tier 1 provider is a very large corporation that delivers products to millions of cars per year. We expect to announce an initial partnership during the first half of the year. Following up on the previous SOC design wins, we continue to have traction with multiple other potential Asian based SOC providers who were showing interest in our IPU architecture. If successful, the opportunity is to significantly expand our China and other based business. Another feature capturing the headlines for tomorrow's phones is what is called dual front facing cameras. We are well-positioned with our iris biometrics face authentication and focused technologies to deliver valuable features to our customers and end-users. I will now turn the call over to Robert, who will address our Q1 financials, our second quarter and an update on our full-year 2016 guidance and other financial matters. Robert?

Thank you, Tom. As you just noted, we had a strong start to 2016 and continue to make significant progress towards our growth objective. I am pleased to report that we have continued to meet and often exceed the financial commitments we have made to our investors. Let me provide some additional details on our financial performance in the quarter. Total revenue for the first quarter was $60 million, above the high end of the company's guidance range including $54.6 million of recurring revenue. Compared with the first quarter of 2015, recurring revenue grew by $2.7 million or 5%. GAAP operating expenses for the quarter were $33.8 million compared with $27.7 million for the first quarter of 2015. R&D expense for the quarter increased by $2.7 million from the first quarter of 2015, a year-over-year increase as a result of incremental spending related to increased headcount both through the acquisition of Ziptronix and incremental hiring to support expanded research and development programs in FotoNation, advanced packaging and machine learning. Litigation expense for the first quarter was $6.6 million compared with $4.5 million for the first quarter of 2015. Litigation expense increased by $2.1 million from the prior year primarily due to the activity and timing of open legal proceedings particularly UTAC and Toshiba, and preparation work associated with possible future activities. Amortization expense for the quarter increased by $1.3 million from the first quarter of 2015 but was flat sequentially. The year-over-year increase was primarily due to the amortization of tangibles recorded from our Ziptronix acquisition in August 2015 as well as IP acquisitions over the past year. GAAP net income for the quarter was $18.1 million or $0.36 per share on a diluted basis. Earnings per share exceeded the high-end of our Q1 guidance range mainly as a result of higher revenues and reduced share count. Non-GAAP net income for the first quarter of 2016 was $24.6 million or $0.48 per diluted common share. The EPS number was $0.02 above the high-end of our guidance range. Non-GAAP expenses were $24.2 million for the quarter, the tax adjustment for the non-GAAP items in the first quarter of 2016 totaled $3.2 million. Non-GAAP results exclude discontinued operations, restructuring and other exit costs, stock-based compensation, charges for required in process research and development, acquired intangible amortization, impairment charges on long-lived assets and goodwill, and related tax effects. We have included a detailed reconciliation between our GAAP and non-GAAP net income in both our earnings release and on our website. Moving to the balance sheet, we finished the quarter with $363.4 million in cash, cash equivalents and investments, a decrease of $18.3 million from December 31, 2015. We generated $30.1 million of cash from operating activities but this is more than offset by $36.5 million of common stock repurchases under our share repurchase program and $10 million in quarterly dividend payments. As Tom noted earlier, a common stock repurchases in the quarter pursuant to our stock repurchase program totaled approximately 1.3 million shares reducing their quarterly weighted average diluted shares outstanding to $50.6 million. As we announced in February, the Board of Directors approved an additional $200 million for share repurchases. As of March 31, we had approximately $189.4 million remaining under the current repurchase program. On April 26, 2016, the Board of Directors approved a regular quarterly dividend of $0.20 per share of common stock payable on June 14, 2016 to shareholders of record on May 24, 2016. Turning to our outlook, for the second quarter of 2016, we expect total revenue to be between $64 million and $66 million. We expect GAAP earnings per share of between $0.42 and $0.44, and non-GAAP earnings per share of between $0.54 and $0.56. Given the visibility and progress we have made year-to-date, we are increasing the low-end of our annual guidance range by $5 million to $255 million to $270 million, up from $250 million to $270 million. With that, let me turn the call back over to you, Tom.

Thanks, Robert. That concludes our prepared remarks. Now, we’ll open the call to your questions. Over to Christine for Q&A.

[Operator Instructions] Mr. Shannon, your line is open.

I'm sorry, hi Tom and Don, how are you guys doing?

We are doing great.

Hi, Richard.

Good. Is the quality of line good enough for you, the operating went in and out on me, are you hearing me fine?

We can hear you perfect.

Okay. I can hear you fine but the operator was quite. But anyway thanks for taking my questions. Congratulations and a good start to the year here. Let’s see a lot of opportunity for questions, maybe let me just go quickly to the first quarter results. How did the recurring revenue number come in versus your expectations? You don’t tell us ahead of time what you’re expecting for episodic but I’m curious how that came in versus your expectations?

I think the recurring revenue was right about where we thought it would be.

Okay. Fair enough then. Let's see here, I'd love to ask a question on the Greenfield opportunity. I think you said in the last quarter, you talked about potentially seeing some closure perhaps in the first half of the year. I don't remember hearing anything in the prepared remarks today. Can you just give us an update on at least with the two leading companies you've been most engaged with whether that's an appropriate timeframe or can you help discuss how we should think about that?

Sure, good question, Richard. So, yes, really no change to it. During the quarter, I mentioned in the prepared script, we continue to have executive level discussions with folks. And successful resolution on this of course would be signing a multi-year patent license agreement that goes forward and potentially if there's any back damages too we would get compensated for that as well, that's ideal. And as I mentioned many times before, that may happen straight up in these negotiations, in some cases it may be necessary to do litigation to get that same result. But to your question directly, there is really no change from what we said last quarter, still on track for middle of the year.

Okay. All right, great. Question on your announcement today about ASE, I know it's one of the biggest OSATS in the world and I think they got couple of the large baseband [indiscernible] processor makers as their customers. Any reason why your work with them would not include some of their top customers?

That’s certainly the intent. You call them one of the largest. I believe they are the largest, but they are, nonetheless there is certainly one of the world’s largest if not number one. So, they are quite large. And this is something that we have been alluding to boy, I am gone back and seeing, but probably at least a year about us working together with one of the world’s leading OSATS. We are thrilled to today, right before, right after the market close today to have that joint press release from Tien Wu, the COO and myself whereby we can now talk openly about it. And the reason we’re able to do that now is we’ve passed with both companies feel, we are almost through the end of what we call the reliability testing. I said, we expect to complete that in June. But so far the results are quite good. Once we're through the final reliability testing, which means we built thousands and thousands of units. We can then jointly or independently go to engage volume, high-volume customers many of which, a couple which you just referred to. They would certainly be kind of companies we would be interested in speaking to.

And Tom…

Rest of the folks Richard is, on any kind of emerging and new technology, the major high-volume consumers of this technology are not that interested in PowerPoint presentations. They are, but they want to know that somebody is capable of building these in huge, huge high volumes. That's why ASE in this example is such an important partner here because they clearly have the volume capacity to do that. Right. And can get a lot more interest candidly then we can buy ourselves because we are course not a manufacturing entity. So, it's a pretty big statement and an important milestone for us.

Okay. And congratulations to you guys on finishing that. In terms of looking forward, as you finish this reliability and testing, you just referred to, Tom. What’s kind of the expected timeframe for, maybe more optimistic or more realistic whichever you like to discuss about how long it takes to get, you know as an example like a Qualcomm or Media Tek signed up as a customer?

So, first step is to complete the reliability testing. And what I said on the call, is June. So, I'd like to do better than that, which would mean May, but we are in May now. But we’re close to the end and assuming that goes as planned, right at that point, the two companies can now begin the dialogue a formal dialogue, obviously there has been dialogues before, but now with real reliability data. You know, that you can present to a customer and the timing of such design win really depends on how it intersects with their individual product roadmaps, whether it be SOC provider self, or the phone OEM directly. So, we will provide as we have been doing, we will provide updates as we continue to march through the next step.

Okay. That's helpful and just one last question from me, I'll jump in the line guys. FotoNation it sound like you had an excellent quarter, is that do more to units, or was there any ASP improvement in the quarter?

It was really multi-focus. It's more unit base. We had another important Asia customer that came on. Came online, when we previously announced and candidly the royalty report surprised us a little bit. So, it was certainly a pleasant surprise. And then some of our existing licenses already in place had strong quarters as well. You put those things together, and you end up with the best quarter we've ever had. Pretty excited about it.

Okay. Excellent. That was a good quarter. Alright, I think I'll jump off the line, but may jump in later, but thanks for taking my questions guys, congratulations on a great quarter.

Anytime, thank you.

Your next question comes from the line of Krish Sankar from Bank of America Merrill Lynch. Your line is open.

Hey, thanks for taking my question. How are you guys doing?

Great, Krish.

Great. I have a few of them, one of them was the UTAC settlement of $18 million, over three years, was any of that recognized episodic in Q1?

You want to take it?

No, that's fine. It's based on the way that the agreement is structured. It’s over multiple periods, multiple years in this case, over three. And so, it will be, we will take it as recurring revenue. So it’s not reflected in reoccurring revenue.

Or an episodic revenue.

I beg your pardon. Yeah. It is not reflected in Q1, because we didn't reach the settlement until Q2 that’s what I was really getting at. Yes, it is not an episodic it will be in recurring.

And the first payment is this year. That's all at this point we are allowed to say.

Got you. And was this settlement done in Q1, or was in the month of April?

The court records will show that it was done in the month of April.

April. Got it.

It's an interesting process. If I can, just a couple of seconds on it. And what ends up happening sometimes before trials. We’ve talked about being prepared for trial and we had an upcoming trial, sometime the Judge magistrate's request the executives and decision makers to show up in a courtroom, I jokingly call it being, call to the principal's office to see if they can't mediate if you will, or drive a settlement between the parties before taking up valuable court time and whatnot. So, that's precisely what's happened here. And you know, we reached a settlement with the help of a very talented judge magistrate.

Got you. So, with that gone and like Toshiba still over a year away, is it fair to assume litigation expense declined from Q1 level for the rest of the year?

Well, I wouldn't want to forecast the entire year. Just based on the reality that litigation expense is notoriously difficult to forecast, so what I can't say, is that we expect litigation expense to decline sequentially from Q1 to Q2.

Got it. Got it. And then …

And I will add there Krish that I expect litigation to be well within the range that we’ve given for our target a pretty model of 4% to 10%.

Got you. And, this is a question I asked in the past, I’m going to try asking it again. Any color on the guidance between recurring and episodic?

You are consistent.

You are consistent Krish and I can appreciate you that asking that. We just don't guide on that aspect, as you know. So, I will give an overall guidance there as we’ve provided. But I don't segment it out in terms of terms of the forecast.

It is fair to say, it is largely as we told you last quarter, it is largely recurring revenue.

There is not - given the fact that there aren’t a lot of open matters that stands to reason.

All right. Another one is, I think Tom you said in the past, that you don't have any renewals that are coming up in calendar 2016. So, I just want to follow up on that. Can you update, I understand you can't give color in the different renewals, but is it fair to assume there is no renewals coming up over the next 12 months?

Yes, what we have said, what I can say is, when we gave guidance this year, we said that with a recurring revenue that Robert guided it was clearly no renewal this year. So we will provide that same timing update in the same time each year. But you are right to assume there is none this year or that would have been reflected in our annual revenue guidance that we gave.

Fair enough, fair enough. And then just a final question on the FotoNation side, when do expect the non-cell phone non-mobile opportunities for FotoNation to become meaningful?

Good question. There is some small pieces now, but there's so much activity going on in drones in activity cameras, and we’re well situated in both. And the announcement we had during the quarter was Socionext, we are not familiar with these guys, but they have a play in both those markets. And we have what we believe is the world's best or certainly world-class image stabilization technology and for those of you not familiar with this, that is, it is fundamentally keeping the camera steady despite maybe a drone flying and blowing all over the wind, or if you are like me, just shaking when you're holding trying to form a video. So it's a pretty important technology. As we've said, we expect, we can hit our revenue goals on mobile space alone. But to your question, I think you’ll begin to see that ramping as a percentage of our overall FotoNation revenue. Nicely, nicely it's still going to pale compared to mobile at this point. But, if drones do what many people are saying they are going to be, it can turn out to be a pretty important segment for it because the unit ASP is quite higher. And the second one, or third, I guess if you say activity cameras drone. The other one is automotive. What we telegraph there, is we do expect to have, be able to talk about a pretty substantial design wind if we stay on track as we have been saying first of this year, whereby at Tier 1 supplier, we form some level of a partnership with them, and automotive is something that has longer time to money, but it can be pretty significant, but again that's longer time to money.

Got it. Thank you, guys.

Thanks Krish.

Thanks Krish.

Your next question comes from the line of Gary Mobley from Benchmark. Your line is now open.

Good afternoon gentlemen. Thanks for taking my question and congrats to a great start to the year. What was that $5.4 million in episodic revenue in Q1?

Are you asking specifically?

Yes.

Yes, I don't think that - we didn't give that detail, so I can't share the specifics on that.

Was it related to one party?

If it is predominantly related to one party, and I guess I can characterize it is primarily being related to audit of a customer.

Okay. Alright. Considering that head start so to speak from the episodic revenue in Q1, and record level of revenue for FotoNation, and a legal settlement with UTAC, which presumably brings in $7.5 million in revenue for the balance of 2016, why not you know, what aren’t we seeing a higher revision to the fiscal year 2016 revenue guide?

I think the way I've looked at it, is we have better visibility for the year based on the activities that have occurred during Q1, so we're certainly very comfortable within the revised range that we provided. I don't think that at this stage it warranted making significant adjustments to it, in spite of the fact that we have you know, improved visibility. So, we had visibility prior to the beginning of the year to a whole I would say constellation of different things that can occur. These were some of them. And, there are many others.

Okay. All right, and it's great that you signed patent and development agreement with ASC and, just curious, how the monetization of this agreement would take place just to be clear, is this sort of the carrot dangling from the stick to try to sign up licensees with the customers of ASC and hence generate a per unit royalty directly from those customers of ASC?

You've got it, you have it almost exactly right. So, first of all, you say carrot and stick, we would expect to get per unit royalties whether they are from an ASC customer or ASC themselves that's not yet disclosed, but you are right, and the reason is significant, is without passing - and I know Gary, you're very familiar with the semiconductor high-volume market, but without passing the reliability testing these very high-volume customers are only remotely interested. So, now the fact that we’re almost at the end of that and getting that done, at that point, we can then officially pursue and try to get these design wins we're talking about.

Okay.

In terms of the monetization, there may be some one-time ….

Initial license fees

Yes, license fees, and stuff like that and NRE upfront and the real, real significant money becomes once these, our respective customer if you will is in high-volume production and where we are enjoying per unit royalties.

Okay. And I'm assuming, you've got parallel discussions going on with the other OSAT guys whether it be relating to DBA, or 3DIC or xFD where in this maybe, this just happens to be the one that you are able to now saying, by reading that correctly?

That's correct. You got it exactly.

That's it from me, thanks guys.

Hey thanks, Gary.

Thanks, Gary.

Your next question comes from the line of Jeff Hume, a Private Investor. Your line is open.

Jeff, are you on?

Yes, hi. Hi Robert and Tom.

Hi Jeff, how are you man?

Great, thanks to Robert for this very sturdily executed share repurchase. Meaningful in the quarter.

Thank you.

Tom, you said two things and also congrats on getting UTAC out of the way. Tom, you said two things in the prepared remarks. I just wanted to ask you about.

Sure

The first was, I think you used the term inflection point for the image sensor market.

Yes.

And being on the Galaxy S7 is a great achievement. Could you maybe talk about why you think it is an inflection point and what we might see it down the road and then, I have a follow-up.

Sure. Thanks for the question. The reason we think that is, Sony has the world's largest backside illuminated sensor provider. Recall before we purchased the Company Ziptronix, which was the originator and inventor of both, just wafer to wafer ZiBond, low temperature ZiBond, excuse me, wafer to wafer low temp bonding technology, and ZiBond, which is the same plus copper to copper interconnect. The DBI portion of that was still kind of in the lab. ZiBond was very broadly deployed, well over a billion units shipped. That was fairly well, what’s substantial here, is that this is the first very high volume evidence that DBI is in fact in high-volume production. And it produces better pictures for a whole variety of reasons. Clearer of pictures, and we think that’s the new standard and so the inflection point as we think that is going to help to quickly drive adoption by other image sensor providers. Right and if we it where right there, and then that helps us expand pretty aggressively into a pretty anti-multibillion-dollar market. Arguably, 40%, 45% of which is already licensed to Sony that leaves the rest of the market open for us to do it. The other think point we have made, is when you get this first commercial instantiation of a technology others in other segments are going to be willing to adopt it as well. So, we're excited, we said this all along, we are quite excited about the DBI Technology and you know, at least Sony is right there with us and we think others will follow. So is pretty exciting for us

Okay. So now you have a commercial proof point in high-volume in a flagship device.

That's it, you got it.

Okay, and then the second thing you said was regarding the excuse me - just a second. Regarding the BVA and then you seem to suggest that there is more opportunity here then just package on package? And I just want to understand, what you've discovered through your customer engagements that makes you more enthusiastic or - what other applications are there?

Yes. It’s like anything. When you sit in your own labs and come up with ideas you think you're pretty smart. And I found in my lengthy, lengthy career, when you actually engage with customers you learn things you never thought of. And, this is one of those cases. Right, where we sat down with potential customers who saw other, I mean we call it vertical interconnect and there is a number of different places RF is one such market, but we think there are a number of different places where the technology will fit. And, you know, we targeted all along if you will the package on package space for Smartphones, and I think what we're seeing now is we're pretty confident that there are other markets and other opportunities as a result, direct result of engaging the customers.

Okay. So, we could see maybe, see that in - that will be manifested in the partners you associated with where the licenses that you sign?

Could be ASC could be others, that's right

Right. Great. Okay thank you. Take care guys.

Thanks, Jeff.

Thanks, Jeff.

There are no further questions at this time. I’ll turn the call back to management for closing remarks.

Thank you, Christine. So thanks again all of you, either following us live or on the web. Any interest in Tessera, we certainly appreciate your spending time to learn more about the company. Again, enclosing we're very pleased with our results and outlook, our solid foundation, continues to provide an excellent financial platform to enable us to continue to grow the company. Thank you for your time.

This concludes today's conference call, you may now disconnect.