Good afternoon and welcome to Skyworks Solutions Second Quarter Fiscal Year 2025 Earnings Call. This call is being recorded. At this time, I will turn the call over to Raji Gill, Vice President of Investor Relations and Corporate Development for Skyworks. Mr. Gill, please go ahead.

Thank you, operator. Good afternoon, everyone and welcome to Skyworks second fiscal quarter 2025 conference call. With me today for our prepared remarks is Phil Brace, our Chief Executive Officer and President, and Kris Sennesael, Chief Financial Officer for Skyworks. This call is being broadcast over the web and can be accessed from the Investor Relations section of the company's website at skyworksinc.com. In addition, the company's prepared remarks will be made available on our website promptly after the conclusion during the call. Before we begin, I would like to remind everyone that our discussion will include statements relating to future results and expectations that are or may be considered forward-looking statements. Please refer to our earnings press release and recent SEC filings, including our annual report on Form 10-K, for information on certain risks that could cause actual outcomes to differ materially and adversely from any forward-looking statements made today. Additionally, today's discussion will include non-GAAP financial measures consistent with our past practice. Please refer to our press release within the Investor Relations section of our company website for complete reconciliation to GAAP. With that, I'll turn the call over to Phil.

Thanks, Raji and welcome everyone. I'm excited to join you today for my first earnings call as CEO of Skyworks. Over the past few months, I've engaged with our customers, partners, employees and shareholders, and I'm energized by the opportunities ahead. Since stepping into the role, I spent time getting to know our teams across the company and I've been incredibly impressed by the depth of talent and expertise throughout the organization. We have some of the smartest engineers I've ever worked with, and there's a real energy and passion for innovation that you can feel everywhere. There's also a competitive edge and a hunger to win. It's been exciting to jump in and be part of such a strong and capable team. Skyworks sits at the center of the wireless revolution, backed by a rich history in RF innovation. Our proprietary technologies power some of the most demanding connectivity platforms in the world, from 5G and WiFi to automotive and edge IoT, and we're continuing to push the bounds of what's possible. Now let's review our fiscal Q2 results. Skyworks delivered solid performance driven by our diversified portfolio and disciplined execution. We posted revenue of $953 million, delivered earnings per share of $1.24 and generated free cash flow of $371 million. Revenue, gross margin and EPS exceeded the midpoint of our guidance. We returned a record $600 million to shareholders through share repurchases and dividend payments, the highest amount ever. This underscores our confidence in the long-term outlook as well as our commitment to delivering value to shareholders. Let's provide some additional color on the business. In mobile, we experienced typical seasonal patterns during the March quarter while executing on multiple new product launches with our leading mobile customers. Smartphones are evolving with AI driving more uplink intensive workloads…

Thanks Phil. First of all, I would like to thank all Skyworks stakeholders including the board, the executive team and employees around the world for many years of strong collaboration. It's been an honor and privilege to serve as Skyworks CFO for the last eight years. I only work for a short period of time with Phil, but I know that under his leadership, with the help of Mark and Todd and the rest of the executive team, Skyworks will prosper in the years ahead. Now let's turn to the quarterly results. Skyworks revenue for the second fiscal quarter of 2025 was $953 million above the midpoint of our outlook. Mobile revenue was 62% of total revenue, down 17% sequentially, consistent with historical seasonal patterns as demand normalizes following peak holiday shipments. Revenue from our broad markets portfolio, which includes Edge IoT, automotive and industrial and infrastructure, networking and cloud, increased 2% sequentially and grew 3% year-over-year, marking our fifth consecutive quarter of growth since reaching a cyclical low in the December quarter of 2023. This sustained momentum reflects the expanding diversification of our business even amid a volatile microenvironment and ongoing inventory digestion in certain end markets. Gross profit was $445 million with gross margin at 46.7%, exceeding our expectations, driven by favorable mix, continued execution on our cost reduction initiatives and operational efficiencies. We also made further progress in improving our working capital position, marking our ninth consecutive quarter of inventory reduction. Operating expenses were $223 million, aligned with our strategic priorities. These investments support our long-term technology and product roadmaps. Looking ahead, we remain focused on striking an appropriate balance, investing in innovation and strategic market expansion while maintaining cost controls to protect and grow profitability. We delivered operating income of $222 million, translating into an operating…

Thank you, Kris. As we wrap up, I want to take a moment to reflect on some key business initiatives. First, we must reinforce our leadership position in mobile, focusing on what we do best, developing the most innovative solutions in the industry and delivering the highest performance RF products to our customers. Second, accelerate the growth in our diversified businesses. Third, optimize operational efficiency with cost discipline and gross margin improvements. Before I close, I want to thank our employees for their incredible dedication and our customers and partners for their continued trust and collaboration. Operator, let's open the line for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We'll go first to Chris Caso at Wolfe Research. And Chris, your line is open. You may have yourself on mute.

Hi. Good morning. I hope you can hear me now. So welcome, Phil and Kris. We'll certainly miss you. But perhaps, Phil, the first question would be for you. You haven't been at Skyworks long, but I'm sure you've been working hard to kind of dig in here. Perhaps some initial thoughts about strategy, about sort of where you're looking to take the company, just kind of an assessment of, what particular strategic changes you might be contemplating at the moment.

Yes, thanks. Thanks, Chris. Appreciate the acknowledgment. Some of the things I've been most excited about so far, I mean, first, when you look at the core technology and the core engineers that we have, some of the smartest people I've worked with in my career and really are at the foundation of kind of the core wireless capability you have. And so, one of the things I'm most excited about when you, when you think about where Skyworks position long-term, you look at how many devices are out there connected to the Internet, and the vast majority of them are and will be connected wirelessly. And some of our core technology is right in the center of that. And so, I think you can imagine that some of the things I'm looking for going forward is how do we take and build upon that core wireless capability and look for adjacencies that continue to fuel that growth. And that's really where I'll be focused some of my energy.

Great. As a follow up question, it's with regard to broad markets and it sounds like you've seen a little bit of bookings improvement and certainly some sequential growth there. What sort of, I guess in the short-term, what sort of growth do you think? Well, I guess to start, you know, do we think that customer inventories have now normalized and therefore, we're getting on a more normal growth path here? And what do you think that growth path is likely to be? Where do you see the longer-term growth in this broad markets business and where's the trajectory for the rest of the year?

Yes, I think, you know, that's a good question. I think in general, like if we look, step back and look overall at those businesses in general, I think if we look in general, a lot of those businesses still had pretty significant inventory corrections post Covid. In many cases, some of the business, some of the businesses had the infamous golden screw, right? And so as a result, customers just bought just tons and tons of inventory. I think in general across the landscape we've seen a normalization of that. We started to see inventories getting back to normal positions, booking trends continue. So, I think in general what we're seeing is kind of that hangover that we experienced, we think that's behind us. If we dig down, right, and look at the kind of the three segments underneath it with Edge IoT, that's really about Wi-Fi 7 adoption, right? That is really at the early ages or early innings, I would say, of deployment that has more RF content per device, more performance, strong customer value proposition. I think that'll be a tailwind for us going forward. On the automotive side, we're seeing good year-over-year growth there. And it's really important to note that what we're seeing there really is not just tied to EVs or particular how the combustion engines, whether it's EV combustion engines or hybrids, it's really around the software defined vehicles and all the connectivity that's around that. And so we're seeing good growth there. And then on the infrastructure networking cloud, that's an area where it's still a little bit choppy from that side. But I think long-term, some of the secular trends with respect to what's happening in the data centers and the connectivity space I think that's going to continue to normalize there as well. So on balance I think we've seen right overall inventory correction. We're starting to see some return to normal growth. And then underneath that it's Wi-Fi 7 connected cars and infrastructure networking cloud. That's kind of how we see that.

We'll move to our next question from Karl Ackerman at BNP Paribus.

This is Yan Pooh for Karl Ackerman. Thank you for taking the question. So, I just want to touch on tariff. I know it's a fluid topic but I just want to understand how your view, how do you view tariffs and what portion of your cogs could get qualified for USMCA import exempt status given that you have the Mexico fab. As you address that, could you also discuss how you can how much of your ability to pass down tariff cost to other customers? Like, thank you very much.

Yes, so this is Phil. Maybe I'll just take a high-level remark and then I'll pass it over to Kris for any particular details on it. Look, in general the tariff environment is incredibly dynamic, right. As you can probably imagine. I'm not telling you any news there. I think our current assessment though, given our supply chain and where we are, the current guidance really reflects any impact that we see from that and we're continuing to monitor that daily. And I think our guidance reflects what we believe to be the current environment right now. And I think our diversified supply chain where we ship things, how we ship them, where we get them, manufactured with free trade zones, all sorts of other things that are happening. I think all of that is reflected in our current guidance. Having said that, obviously we monitor every single day and we'll continue to do so. But right now, the current guidance reflects what we believe is the current environment for tariff. Kris, any other comments you want to say?

No, just I mean based on our current understanding of the tariff landscape, we don't see any major direct impact on our business. Obviously we will continue to work with our customers and supply chain partners but for now as it stands, no major direct impact on our business.

Thank you. And as a follow up can you discuss will you be able to maintain your CapEx outlook or do you have any intention to move around your manufacturing locations to avoid tariffs? Thank you.

Our CapEx spending is really focused honestly on new product, new technology development versus any sort of production capacity. So, any, most of the CapEx you see, the vast majority of it is on new technology development. So I wouldn't necessarily see, I wouldn't expect to see any change with respect to our CapEx plans based on that.

Right. And just CapEx is running on or about mid-single digits as a percent of revenue.

Thank you very much.

We'll go next to Edward Snyder at Charter Equity Research.

Thank you very much. A couple questions if I could. First off, it looks like based on the content in your largest customer's phone, from the teardowns we've done and other folks have done and stuff we saw from last year, that is it fair to assume that you think your content will bottom end of this year and then maybe make a slow recovery? I know it depends a lot on mix and I know that's hard to predict. I think Qualcomm guided for 30, 30-70 mix favoring their solution. So I just want to get an update on your view of where you think your content will bottom into your largest customers? And then I have a follow up. Thanks.

Yes. Hey Ed, it's Phil. Nice to talk with you again. You know, as you might imagine, we can't really comment on specific customers plans and what's getting going, but generally speaking, let me try and give you a little bit of color. I mean, when I look holistically, I think we have some tailwinds behind us in that regard. The first is we've got to deliver better products and compete for the sockets that we believe we have the chance to win. And I think we're putting our best foot forward there on that. Second, I think there's going to be a trend that's going to have more RF content as I talked about with complexity, workloads, MIMO capabilities and those kind of things. And then thirdly, I do think there's some potential content differences that may happen with respect to certain solutions that may happen on the baseband side. And I think some of those trends right, should play in our favor. So look, I think overall, I think there's, there's three things and then you overlay that where hopefully you get some tailwind on the unit side. Respect AI adoption and I think we've got some things that work in our favor. Look, we have to continue to execute. As I've always said, we've got to deliver great products. You have a great product, you win, you have a jump ball, you split and you have a bad product, you lose. And, and that's the game we're playing. So that's what we're focused on.

Okay. My follow up, I know that. Well, your filters are built out of Japan. BAW is anyway. And then the part that you kind of gave up to Avago, used a lot of those. And so you got utilization issues there. First of all, between the lower utilization and some of the advances you made in filters reducing the die size, is it fair to assume that even if you were to win a larger module that takes a lot more filters, you wouldn't have to put a lot more capping into that facility or it depends on the module like the mid high band, et cetera? It's got 22 filters in it. No matter what, if that were to come about, you're still going to need CapEx expansion even with where you are today?

Yes, I just want, thanks, Ed. I think one clarity is, you know, the particular area you talk about. I would characterize that as a jump ball where we split versus clear win, where we got 100%. So it wasn't a -- I would just say that. And the other to your point on CapEx expansion, I mean, look, right now I think we are sufficiently capitalized from a production capability and I don't expect to have any capacity concerns with respect to that. Our capacity investments right now are really focused on new technology development that we need to power the innovation forward. So right now, I'm not expecting, certainly not expecting any incremental capacity need for production based on what I can see. As far as the -- I can see.

Okay, but just to be clear, you have to have the capacity in place before you're awarded a big modular, any big OEM. Correct. This can't be done after the fact. Correct?

Right. And so Ed, we do have plenty of capacity in place to absorb a potential large upside to the business.

Great, thank you.

Next, we'll move to Gary Mobley at Loop Capital.

Hi guys, thanks so much for taking my question. I really just have a multi part question and that's it. Phil, you highlighted your three priorities, one of which is stabilizing and maybe regrowing your business with your leading smartphone customers. So do you feel any differently today versus what you communicated last quarter with respect to your blended content in the upcoming, you know, smartphone launch at your largest customer? And then with respect to optimizing operational efficiency, could you give us a sense of where your utilization rates are now and what those, what the goal may be in terms of, in terms of optimizing that manufacturing footprint?

Yes, let me, let me try and I'll have Kris jump in here. You know, I think the one thing, you know, the, I guess I would characterize if you look at, in general, the mobile business in general, it's characterized by very short product cycles. You got to earn the business every year or every other year. You got to deliver highly competitive parts and it's a very competitive landscape. I believe we've got some of the best, if not the best RFA engineers on the planet. But sometimes having the best team on the floor doesn't necessarily mean you win every game. But I'm feeling very good about where we are, the investments we're making, the people we've got, and we're working really hard to do it and we're laser focused on doing it. And frankly, I'm taking a no excuses kind of thing. Right. We just got to deliver better parts, period. The answer is we've got to deliver better parts. There was a lot of rhetoric around stuff being done to us, and I just don't like that rhetoric at all. I think the reality is we got to deliver the best parts and we'll take care of ourselves and that's what we need to be focused on. I think your other question was around?

Yes. So, Gary, as it relates to utilization rates, obviously we have multiple factories in the U.S. in Japan and Singapore and in Mexico. The utilization rate varies by manufacturing location. But I would go back to my previous answer. We have plenty of capacity in those factories. And so as future revenue growth is going to fuel better factory utilization, that will lead to gross margin improvements without us having to put much capacity in place to fulfill future revenue growth. And Gary, maybe as it relates to, of course, the blended content at the next upcoming phone, that obviously has not changed.

Thank you, guys.

Our next question comes from Christopher Rolland at Susquehanna.

Hi guys. Thanks for the question and welcome Phil and Kris, sorry to see you leave. Phil, you mentioned some wireless excellence at the company and looking at adjacent markets also, you came from the IoT world previously. Could that be an adjacency for you, whether it's cellular or unlicensed?

Yes, look, I'm not going to comment on particular areas of focus there. Obviously, I came from the IT side, but I would say my purview is a very wide, wide landscape. I mean, some of our core technologies are, you know, acoustic resonators, filter design, some of the core processes that are involved in that packaging, multi, multi-chip packaging modules, very tight integration. I mean, the technology required to deliver some of our solutions is just incredible. And so, you know, I look to a wide, a wide range of things where we could go there. So, I'm not going to comment on specific, specific areas, as you might, you might guess.

Fair enough. And then secondly, saw and typically lower frequencies. You have made a push into BAW, but we haven't had any major updates there, I think in a little bit. Is this a focus for you and is there kind of, do you see any evidence of greater traction in BAW moving forward and doubling your efforts there? Thanks.

Look, I think BAW is like a critical component of our technology and we remain significantly invested in that and we've got a very robust roadmap going forward. And so I think we've seen good traction in that and that continues to be a cornerstone of our investment.

Thanks a lot.

Our next question comes from Tom O'Malley at Barclays.

Hey guys, thanks for taking my question and Phil, Mark, congrats on the roles. Look forward to working with you. A tactical one first and then a longer-term one in the March and the June quarter. Can you guys give what Android did in both of those quarters in the mobile business?

Yes. So Android was in the March quarter flat on a sequential basis. So, in that call it on about $70 million range. But we do expect a sizable sequential bump up in the June quarter for Android.

Okay. And then I guess the second one is the broader one and that kind of encompasses the answer there. But when you're looking at what you think is pulled forward, obviously there's a new phone that's launching or that just launched here that's going to help you with some content. But obviously buying patterns are a bit different and Android traditionally isn't seasonally up in June. Can you guys try to parse out to the extent that you can, what you're seeing, what is a pull forward, what is better demand and how you guys are going about that internally to protect against potentially like stronger first half, weaker second half? Thank you.

Yes, that's a good question. Look, we continue to monitor that care, you know, closely. I don't think, you know, order patterns now represent what we've seen historically and represent seasonality. And if you look at kind of our results, it was kind of in where we in the range or a little bit above the range where we started in January, which is before a lot of this turbulence. And so I would say that what we've seen is what pretty typical order patterns at this point. Obviously, we're trying to manage it closely and we're keeping a close eye on it, but that's the best we can say now. No evidence of anything other than what we'd expect to see seasonally at this point.

Our next question comes from Harsh Kumar at Piper Sandler.

Yes, hey, congratulations, Phil. Looking forward to working with you. Kris, I've worked with you multiple years. We'll certainly miss you and best of luck to you. So Phil, I wanted to ask you about follow up maybe on the new modem at this large customer and what that means to you. Typically, with that there comes a lot of shifting around of content and provides a lot of opportunity for people. So, I'd be curious how you view this content and maybe you could talk about what this means to you and what you might have won and what you think you can do with this. And I've got a follow up.

Yes, so look, I think that we can't really get into those specifics per individual customer and segments and what happens really, it's not something we can do. But let me just comment just in general, why I think there's some tailwinds there and I would focus on probably what I would say is more secular long-term trends with respect to increased RF content as a result of things like more transmit, higher power requirements, lower battery requirements, new frequency bands and certainly any particular choice they have with baseband may result in some potential incremental content opportunities for us. But I think in general I would just focus on, I think that over time we're going to see increased RF content as the workloads demand it, as the RF complexity gets harder and the requirement to kind of manage power continues to be a key component. So I think in general, I think we do now clearly, we have to execute, we have to deliver the best parts, but I think we've got the canvas upon which we can draw a pretty good picture.

That's it, thank you. That's it for me, thanks.

Next, we'll move to Timothy Arcuri at UBS.

Great, thank you. This is Jamal Cohen for Tim. Phil or Kris, I wanted to double click on the guidance specifically what changed versus 90 days ago, what segments you've seen improve, what got worse? And can you speak to that bump up in Android in the June quarter? What's driving that?

Well, I mean I'll let Kris jump in here because he was in the park. I mean I don't think we necessarily guided two quarters ahead. So I think what we're doing now reflects our current view of the next quarter ahead. And I would say that in general, certainly on the mobile side we're seeing pretty typical order patterns, the Android segment up as a result of new product launches that we talked about. And in broad markets we're just seeing continued, you know, sequential year-over-year, you know, sequential growth and continued year over growth as I talked about. So I wouldn't say there's anything abnormal. And so mobile, I would say, is seasonal added on a product launch and in broad markets, it's kind of a continuation of the trend we've seen for the past few quarters.

Got it. And then one quick one on pricing at your largest customer. Do you expect to see any sort of pricing pressures in the coming quarters, given the most recent tariffs?

No, I'm obviously not going to comment on that. I'll just say it's a highly competitive market and we are expected to deliver the best performance parts at a very aggressive cost point. And that continues to be the game across the board in this industry. So, I don't think there's anything changed. And we have to deliver great parts at the right price.

Thanks, guys.

Next we'll go to Joe Moore at Morgan Stanley.

Great, thank you. In terms of your priorities for the business, you talked about growing the diversified part of the business. Can you talk about organic versus inorganic priorities there and just how you think about that? And do you think M&A is even sort of doable in the current environment?

Yes. Hi, Joe. Nice to. Nice to talk to you again. Yes. look, when we look at overall strategies and certainly capital structure and capital allocation priorities, I think we have enough firepower to enable us to pursue a number of different options, both organic investments, and I talked about some of those. I mean, we clearly continue to invest in a level that allows us to sustain robust innovation road map that we have, and so I feel good and comfortable about that. And clearly, on the M&A front, I mean, there's a number of different things we can look at. I'm going to be really focused on making sure that's in our strategic priority. We can get the right value and focus on making sure that we can deliver value to shareholders as we look at that. I think with respect to the overall M&A environment, it's obviously a little complex right now. But I think that there's no shortage of things we can look at and it certainly is something I'll be spending some time on as CEO.

Appreciate it. Thank you.

Our next question comes from Peter Peng at JPMorgan.

Hey, guys, thanks for taking my question. You guys talked about seeing seasonal trends on the wireless side for the March and June quarter. But then when you listen to the earnings call from your largest customer, they're clearly talking about some inventory build for some tariff mitigation. So I'm just wondering why there's this kind of discrepancy between what your end customers saying and between some of the suppliers we're seeing.

So Peter, maybe I'll take a shot at that. As you know, there are it's a very complex supply chain, and there are multiple partners between us and the end customer. There are distributors, there are contract manufacturers. Each of them act a little bit as a buffer and have their own inventory dynamics. Again, if you look at the March quarter, we guided to $950 million, and we delivered $953 million. So we did not really see pull-ins or anything like that. And as we guide for the June quarter, we assume there's no pull-ins. And we have no clear evidence of that.

Got it. Okay, that's helpful. And then just for the broad markets. You guys are back in the year-on-year growth for a number of quarters now. Can you maybe just talk about within that bucket which markets are showing here in your growth, which still has some work to do to get to a year-on-year growth trajectory?

Yes, this is Phil. I'll take a crack at that. I mean, look, the strongest tailwind you have growth is WiFi 7, right? That's and I think that's in early days, and we're seeing -- that will be -- that should be a tailwind for us for a while. I think only a small percent of single-digit percentage of the units out there are WiFi 7. So I think we're in the early innings of that. So that's a strong one. Automotive is another good year-over-year growth comparisons, as I talked about. As more and more cars are being connected, independent of their combustion mechanism. And then I think the other area where we've got some more work to do, as I would say, is on the infrastructure side on that side. It's kind of inching along a little bit, but there's more ups and downs, and we'll be seeing some growth there, but that's probably the area where we've got some more growth that we need to see in the future.

Perfect, thank you.

Next we'll go to Nick Doyle at Needham.

Hey guys, thanks for taking my questions and welcome Phil and Mark. How big was a large customer in the quarter? And directionally, how is there a broad markets piece performing? Thanks.

Yes. So the largest customer in the March quarter was approximately total revenue, and we've seen a split between mobile and broad markets in line with historical trends there, roughly 85%, ends up in mobile and roughly 15% or maybe a tad more in broad markets and we expect that to continue in the next couple of quarters.

Thank you. And then for the gross margins, they're kind of holding steady above this $45 million percent level now, even with revenue dropping down a little bit next quarter. I guess how are you able to hold these above 45% even as we kind of -- the utilization levels remain a little bit lower? Thank you.

Yes, Well, if you look at the June quarter, you have mobile being down sequentially and broad markets being up sequentially. And so you have a continuous benefit there from a mix point of view, as I said before, even within broad markets, we see some mix shift that is favorable for gross margins, and that's why we're comfortable to guide to this 46%, 47% range for the June quarter.

And we'll go to our next question from Vivek Arya at Bank of America.

Hi, this is Liam Farr on for Vivek. Thank you so much for taking our questions. Just looking at the Android market. You've been pretty selective on pulling back somewhat in some parts of the Android ecosystem. As AI and RF complexity arises, how do you think about reengaging more deeply with Android OEMs to capture more incremental content? Or are you just kind of remaining to focus -- keeping focus on that high-end tier of the Android ecosystem? Thank you.

Yes, look, I guess what I would say is, I mean, we're certainly always open to working with customers where we can deliver value and get to value the performance and the solutions that we provide in an economic that's economically viable for us. And so to the extent that there's trends that lend itself to that favor, then we're going to be trying to take advantage of that. But I think we're just -- we're taking an economic ROI-based view of where we do. We've got -- the opportunity cost for engineers is really high. A lot of these solutions are highly complex, highly engineered and tightly integrated. And frankly, we look for environments where we can deliver the value to the customer and frankly, get paid and return ourselves. And so we'll continue to look for those solutions.

Thank you. And then just a quick follow up on your largest customer. Looking ahead at 2026 models and 2027, how are you too the time line of engagement with that customer? When should investors be looking to hear from that? And how are you kind of betting up to hedge against any more jump balls that are split?

Well, I mean, it's -- obviously, I can't comment on specific things like that, but let's just say this, we have been engaging deeply with that particular customer, but all our customers in general, but that went for a long, long time. And so there's a typical investment design cycle that happens year in and year out. And frankly, in many cases, you're continuing to invest ahead of the curve to develop technologies that can go there. And you work and you're self-critical along the way, to use a sports analogy, you're looking at game film. You're trying to understand what you did, what you didn't do better. You're doing competitive analysis, you're trying to look at the limit of what's possible with the physics you're developing new technology, and you're putting all those things together and you're delivering a part and that gets benchmarked to get other parts competitively. If you do a good job, you win, and that's what we're trying to do. I really don't think there's any change in dynamic. And I think with respect to insulating what we can do, I think that frankly, the best insulation is continuing to execute and execute cleanly. That customer is a very demanding customer and requires a lot of focus on it. And -- but it's such a big customer that you can't necessarily take your foot off the gas, you have to keep pedal to metal all year one, and that's what we need to do.

Thank you.

Ladies and gentlemen. That concludes today's question and answer session. I'll now turn the call back over to Mr. Brace for any closing comments.

Great. Thank you. Thank you for participating in today's call. I look forward to speaking with you at upcoming investments during the quarter and we'll talk soon.

And ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may now disconnect.