Good morning, and welcome to Allegro MicroSystems' third quarter fiscal 2024 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that this conference is being recorded. I would now like to hand the conference over to Jalene Hoover, Vice President, Investor Relations and Corporate Communications. Thank you, Kevin. Good morning, and thank you for joining us today to discuss Allegro's third fiscal quarter 2024 results. I'm joined today by Allegro's President and Chief Executive Officer, Vineet Nargolwala, and Allegro's Chief Financial Officer, Derek D'Antilio. They will provide highlights of our business, review our quarterly financial performance, and share our fourth quarter and full fiscal year 2024 outlook. We will follow our prepared remarks with the Q&A session. Our earnings release and prepared remarks include certain non-GAAP financial measures. The non-GAAP financial measures that are discussed today are not intended to replace or be a substitute for our GAAP financial results. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings release, which is available in the investor relations page of our website at www.allegromicro.com. This call is also being webcast, and a replay will be available in the Events and Presentation section of our IR page shortly. During the course of this conference call, we will make projections and other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution that such statements are based on current expectations and assumptions as of today's date, and as a result, are subject to risks and uncertainties that could cause actual results or events to differ materially from projections. Important factors that can affect our business, including factors that could cause actual results to differ from our forward-looking statements, are described in detail in our earnings release for the third quarter of fiscal 2024 and in our most recent periodic filings with the Securities and Exchange Commission. Our estimates or other forward-looking statements may change, and the company assumes no obligation to update forward-looking statements to reflect actual results, changes to assumptions, or other events that may occur, except as required by law. It is now my pleasure to turn the call over to Allegro's President and CEO, Vineet Nargolwala. Vineet? Thank you, Jalene, and good morning, everybody, and thank you for joining our third quarter fiscal year 2024 conference call. I'm pleased to report that we delivered another solid quarter against a weaker backdrop in fiscal Q3, consistent with expectations and our guidance. While we expect continued inventory digestion across markets in the short term, our design win momentum continues at record levels and reinforces our confidence in our ability to grow above market over the mid to long term, consistent with our target financial model. Furthermore, we're actively managing the business to optimize profitability and cash flow throughout this cycle. In Q3, we delivered sales of $255 million, up 2% year-over-year, reflecting continued strength in automotive. Sales in our strategic growth areas, including e-mobility and industrial, which includes clean energy and automation, were up approximately 20% year-over-year to $150 million or 59% of total sales. Innovation with purpose is our core value. During the quarter, we announced the launch of the second product of our high-voltage isolated gate driver portfolio. Allegro's newest Power-Thru solution adds crucial safety features designed to protect against high operating temperatures in electric powertrain systems. It also provides high performance in noisy environments present in microinverters in solar applications, power supplies in data center applications, and onboard chargers for electric vehicles. Recall that our high-voltage isolated gate driver technology came to us through our acquisition of Heyday just over a year ago. The progress we are making with our Power-Thru product family demonstrates our ability to effectively integrate acquired technology and bring it to market quickly. We are applying the same approach and intensity to our recent acquisition of Crocus, which further strengthens our magnetic sensing IC portfolio and extends our leadership in this very important product category. I'm pleased to report that the integration of the Crocus team and its TMR technology is progressing really well. The acquired business is fully transitioned into our systems and processes. Product sales are underway, with sampling actually accelerating in e-mobility and industrial markets. Both the Allegro and Crocus TMR offerings are now combined under a common brand, XtremeSense, which now represents the world's leading and most comprehensive portfolio, offering the highest accuracy, the lowest power consumption, and the highest sensitivity for the world's most demanding applications. Feedback across the customer base has been very encouraging, and the strong majority of our customer discussions recently at CES featured TMR. Moving on to the broader macro environment, industry estimates indicate that calendar year 2024 automotive demand will be stable, with continued growth in xEVs, which includes battery, electric vehicles, and full hybrids. While xEV adoption varies greatly by geography, the growing number of xEV launches proves that the momentum is strong and increasing. Recall that Allegro is well represented in all automotive segments, with our solutions supporting all powertrains. Today, ADAS represents the majority of eMobility sales and xEV, the fastest growing component. And while eMobility is a key strategic focus, nearly half of our automotive sales are in other automotive applications, such as ICE powertrain and safety, comfort, and convenience, which is agnostic of the choice of powertrain. Additionally, OEMs' use of both hybrid and full electric platforms to meet fuel economy and emissions regulations positions us well. Allegro's content in full hybrid vehicles is similar to that in BEVs, with both significantly higher than that in ICE, and so Allegro wins no matter which platforms OEMs invest in. While automotive demand remains stable and we see continued strong momentum in eMobility, we are seeing certain inventory dynamics, where tiers and contract manufacturers are paring back inventory from the eight to 10 weeks during the supply chain crisis to pre-pandemic levels of four to six weeks, as carrying costs become a factor and OEMs end support premiums for inventory. Despite these dynamics, we expect our automotive business to deliver above-market growth for fiscal year 2024, consistent with our target financial model. Our fourth quarter sales outlook comprehends macroeconomic conditions, including ongoing inventory digestion in industrial and consumer markets, as well as pockets of inventory rebalancing in automotive. Looking to the future, we continue to see strong design win activity, with 80% of our Q3 design wins in our strategic growth areas and more than 50% in the area of eMobility. Key highlights from our third quarter design wins include the following: In automotive, we were awarded multiple programs by a leading Japanese OEM for an xEV platform. This was for current sensors on onboard chargers and AC inverters, and for our magnetic position sensors for electronic power steering systems. In China, we were awarded multi-solution design wins for xEV powertrains and EPS systems, with a leading automotive OEM using our current sensor and power technology. In the industrial end market, we won several designs using our current and isolation sensor technology for clean energy applications, including solar and EV charging. In data center applications, we recorded several design wins with our motor drivers, with a major OEM for cooling high-performance AI servers using both traditional fans as well as liquid cooling. We remain focused on serving our customers and extending our market-leading positions. We're investing for the future with a focus on maximizing growth in these strategic focus areas, while positioning the business to scale and grow profitably. This focus is being rewarded by our customers with more business, and our record design wins indicate that we are winning in the market. In fact, for fiscal year 2024, we are on track to close over $1 billion in design wins, with the majority turning to revenue over the next three years. This is proof that our strategy is working, underpinning our confidence in our ability to deliver above-market performance over the long term. I want to thank our teams globally for serving our customers and the continued execution of our strategy. I'll now turn the call over to Derek to review the Q3 financial results and provide guidance for our fourth quarter. Derek? Thank you, Vineet. Good morning, everyone. Starting with a summary of our Q3 financial results, sales were $255 million. Gross margin was 54.6%, operating income was 27.2%, and adjusted EBITDA was 34% of sales. As a result, earnings were $0.32 per share, 10% above the midpoint of our guidance range and exceeding the high end. Total Q3 sales increased by 2% compared to Q3 of fiscal 2023, and sales to our automotive customers were $195 million, an increase of 18% year-over-year, and representing 76% of Q3 sales. eMobility sales increased by 6% sequentially and 45% year-over-year, representing 54% of third quarter auto sales, up from 44% a year ago. Industrial sales were $46 million, declining 25% sequentially and 14% year-over-year. Other sales, which includes consumer applications, were $14 million, down 17% sequentially and 53% year-over-year. Sales through our distribution channel, which comprised the majority of the industrial and other sales, were down 10% sequentially, as expected. We continue to monitor channel point-of-sale sell-through closely to manage inventories to appropriate levels. From a product perspective, magnetic sensor sales were $154 million, declining 13% sequentially and flat year-over-year. Sales of our power products were $101 million, increasing 2% sequentially and 7% year-over-year. Sales by geography were again well-balanced, with 30% of sales in China, 24% in the rest of Asia, 17% in Japan, 15% in Europe, and 14% in the Americas. Now, turning to Q3 profitability. Gross margin was 54.6% and in line with our expectations for the quarter. Gross margin has remained healthy through this sales decline as a result of our fabless and our flexible manufacturing model. Operating expenses were $70 million, or 27% of sales, down from 28% of sales a year ago and included two months of Crocus. Third quarter R&D expenses were 15% of sales, and SG&A was 12% of sales. Operating margin was 27.2% of sales, compared to 31.3% in Q2 and 30% a year ago. The effective tax rate for the quarter was 10%, slightly better than expected due to the geographical mix of income. We are now projecting our full-year non-GAAP tax rate to be approximately 12%. The third quarter diluted share count was 194.6 million shares, and net income was $62 million or $0.32 per share. Moving to the balance sheet and cash flow. We ended Q3 with cash of $224 million. Cash flow from operations in the quarter was $77 million, and free cash flow was $42 million, an increase of $27 million or more than 170% sequentially. From a working capital perspective, DSO was 41 days, compared to 40 days in Q2, and inventory declined by $8 million, and days in inventory were 124 days, compared to 136 days in Q2. Capital expenditures in the third quarter were $34 million, as we are completing a capacity expansion of our operations in the Philippines. Also, in the third quarter, we opened a new Philippines tech and shared services center and made investments in R&D labs in strategic locations. I'd like to take a few moments now to speak to the actions we are taking to optimize our financial performance with a focus on free cash flow. First, we continue to prioritize investments in our strategic growth areas, specifically in R&D and sales. However, in response to the recent slowdown in sales, we have aligned factory costs with production levels and taken actions which have contributed to an $8 million or 11% sequential decline in organic operating expenses. We now expect organic operating expenses to decline by approximately 9% in the second half of fiscal 2024 compared to the first half. To further optimize cash flow, we are managing our material purchases, including wafers, to align to current production levels. We are also nearing the end of our most recent capacity expansion in the Philippines, and as a result, we expect CapEx to decline by approximately $25 million or 30% in the second half of fiscal 2024 compared to the first half of the year. Now I'll provide a few additional updates on the Crocus acquisition. As Vineet mentioned, integration is progressing well, and planned synergies are on schedule. In Q3, we completed the full systems integration and a number of tax and legal steps to allow us to utilize significant pre-acquisition tax net operating losses and enable us to begin to realize tax and operating benefits. Finally, I'll turn to our Q4 and full year 2024 outlook. We expect fourth quarter sales to be in the range of $230 million-$240 million, which reflects continued inventory digestion. At the midpoint of our Q4 guidance, we are projecting sales growth of 7% for fiscal 2024, with auto sales expected to grow in the high teens for fiscal 2024. Based on our current view and historical cycles, we estimate continued inventory digestion for a couple of quarters, and we expect Q1 of fiscal 2025 or the June quarter to be our trough quarter. We expect Q4 gross margin to be between 53% and 54%, reflecting the projected product and channel mix. We expect operating expenses to be approximately 31% of sales, and Q4 operating expenses include a full quarter of Crocus and the annual payroll tax reset. We expect our non-GAAP tax rate to be approximately 12% and our diluted share count to be approximately 195.8 million shares. As a result, we expect non-GAAP EPS to be between $0.19 and $0.23 per share. Now I'll turn the call back to Jalene for the Q&A session. Jalene? Thank you, Derek. This concludes management's prepared remarks. Before we open the call for your questions, I'd like to share our fourth fiscal quarter conference lineup with you. We are attending Wolfe's Inaugural Semiconductor Conference on February 15 at The Jay, Autograph Collection in San Francisco, California, Susquehanna's 13th Annual Technology Conference on March 1, with attendance virtual, and Morgan Stanley's TMT Conference on March 4 at the Palace Hotel in San Francisco, California. We will now open the call for your questions. Kevin, please review the Q&A instructions. Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered, or you wish to remove yourself from the queue, please press star one one again. To provide the opportunity for everyone to ask a question, we ask that you limit yourself to one question and one follow-up. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Chris Caso with Wolfe Research. Your line is open. Yes, thank you. Good morning. I guess just the first question on the guidance for the March quarter and some of the commentary you had on the June quarter as well. Could you characterize that between the auto and the industrial segment? Obviously, industrial's already pulled back quite a bit here from the peak. In terms of the sequential decline that you expect for March, and it seems like you're also implying a sequential decline in June, you know, how would that be broken out between the two segments? ... Yeah, Chris, this is Derek. So when I look at, we don't really guide by market, right? But when I think about Q4, we're seeing that be across all end markets, and it's really the inventory digestion continuing, particularly in industrial. Other is starting to come to a trough, and then in auto, as Vineet mentioned, there's some dynamics of inventory kind of clearing out in the auto market. We expect that to continue into Q4 and Q1. Yeah, Chris, this is Vineet. Thanks for the question. So I think the, you know, we have been pretty transparent and, and have communicated the inventory digestion in the industrial and other markets. I think the auto dynamic is, is more recent, and it's, it's really a rebalancing. As I've engaged with, CEOs of the various OEMs and the tiers, it's clear that the automotive OEM demand continues to be pretty stable. Really, the pressure is coming from the contract manufacturer and the tier side, where there's a rebalancing of inventory back into the pre-pandemic levels, and that's a little bit of what we're seeing here in fiscal Q4, and as, Derek alluded to, you know, we'll see some of the same dynamics continue into the next quarter. Thank you. As a follow-on to that, Vineet, you made also a comment that you expect to, you know, kind of outgrow the market within auto. When you say that, are you defining the market as, you know, sort of auto units, which you know is still expected to grow this year, or quarter the auto semiconductor peers? You know, take into account that, you know, the end market still grows, but inventory comes down. You know, said more simply, do you expect that in calendar 2024, you'll be able to, you know, grow the auto market on a year-on-year basis, your auto revenue on a year-on-year basis? Yeah, Chris, so a couple of clarifications there, right? So anytime we talk about outgrowing the market, it is from an auto perspective, it's based on auto production, right? So that's the basis. And if you recall, when we talked at our Analyst Day, we laid out a model which talked about 7%-10% growth above auto production, right? That's how we characterize the market. Our comment, which I think Derek made in the prepared remarks, was with respect to full year fiscal 2024, including our Q4 guidance, where we expect, for the full year fiscal 2024 top line to be about 7% year-on-year growth, when within that, automotive to be exceptionally strong, high teens%. And so that's consistent with our model, and, you know, as a reminder, we are long cycle. You know, the quarter-to-quarter, we'll see some perturbations, but really what we're focused on is full year growth, and really pleased with how the team has executed our strategy to deliver that kind of growth considering the backdrop. Okay, thank you. One moment for our next question. Our next question comes from Gary Mobley with Wells Fargo. Your line is open. Hey, guys. Thanks for taking my question. Derek, you're guiding the fourth quarter gross margin, excuse me, down about 110 basis points sequentially. Can you bridge that delta for us between lower distribution mix, pricing and contribution Crocus and the other factors that are affecting that? And then as it relates to the, you know, start to the fiscal year 2025, I would assume that with June quarter revenue, you know, trending down again sequentially, should we expect another, you know, leg down in the gross margin as well? Yeah, Gary. So our Q3 gross margin came in about 60 basis points better than sort of the guidance. Some of that was mix. We did see some pricing dynamics, particularly in the channel in Q3, which is the first place you usually see the pricing pressure, because that's market-based. We saw that start in Q3. Going into Q4, we're having the negotiations in their calendar year contracts with our customers, so there will be some pricing going into Q4 before we get the benefit from our vendor pricing negotiations for about a quarter or so. So that's a part of the Q4 guide down by, we'll call it 100 basis points off of Q3. Some of that is also the distribution mix, which we expect to be again down in Q4 as we continue to manage channel inventories. Then the last piece, you're right, Crocus is an element of that with their fixed cost as we start to see synergies come in the second half of calendar 2024. Going into Q1, I'd expect gross margins to remain in that 53%-54% range, Gary, for the short term here. The good news is, when we model our gross margins, now that we have a really variable cost structure and a flexible manufacturing model, they hold up significantly better than they would have when we had multiple facilities and multiple fabs. So I expect gross margins to hang in that 53%-54% range in the short term. And of course, over time, as the distribution normalizes, it'll come back up to 55%, and then heading towards our model of 58%. The last thing I'll mention is in Q3, organically, our gross margin was over 55% for Allegro. Got it. Good. Vineet, I want to ask more of a longer term focused question. You know, China is a very important market in the overall automotive market, for sure. And so my question to you is, you know, what sort of investments are you making there, you know, in terms of forging relationships with localized foundry partners, back-end partners and whatnot? How are you showing China domestic customers that you're willing to invest in the market in an effort to, you know, win their trust and maintain their business? ... Gary, thanks for the question. You're right, China is incredibly important to us. Actually, in the most recent quarter, we saw some really nice growth in China, you know, despite all sort of the macro noise that you hear, which just reinforces a belief we have to be in China to win with the Chinese customers, and we're really pleased with the progress we're making. To the question you asked, we are investing in localizing a part of our supply chain in China. We have inked an agreement with local OSATs, and we expect in the next 12-18 months, we'll start shipping from our China partners locally. And we are also working with a foundry partner in China, which will take a little bit longer to qualify wafers, but it's part of the plan. And so it's important for us to demonstrate to our Chinese partners and customers that we are indeed investing in the region, not just for supply chain resilience from their perspective, also to take advantage of economies of scale locally. And so we're really excited about the progress we're making, and we'll continue to update everybody as we make progress. Thank you. One moment for our next question. Our next question comes from Quinn Bolton with Needham and Company. Your line is open. Hi, this is Nick Doyle on for Quinn. Thanks for taking our questions. So sentiment around EV is low, at least in the U.S. I think, the China data points continue to be strong, and I understand Allegro is a bit agnostic to EV versus ICE, but wanted to get your sense on customer sentiment. What are you seeing from U.S. EV customers? Is there better design activity than the recent data point suggests from guys like, Tesla and GM? Thanks. Yeah, Nick, thanks for the question. So, you know, let's take a step back. I think as you look at emissions and fuel economy regulations globally, the end outcome is pretty clear that all OEMs will have to move towards a pretty high mix of battery electric vehicles or some sort of emissions-free vehicle in order to comply with those regulations. The path there is gonna be different for each OEM. Some OEMs are investing completely and totally in battery electric vehicles. Others are taking more of a mixed approach with plug-in hybrids, an equal part of their focus and strategy. And as you point out, the positive for Allegro is that we are really agnostic to whether the platform is plug-in hybrid or it's full battery electric. Our content is very similar, and it's about 1.5x-1.7x that of a pure ICE vehicle. So we're really pleased, regardless of the direction any OEM takes, and we're ready to support the OEMs and the tiers with a really broad portfolio of magnetic sensing and very targeted power applications. From a design activity standpoint, I would tell you that every OEM is investing significant amounts of capital in R&D into electrifying their fleet, and it's various degrees of electrification, as I've just pointed out. Can't comment very, you know, on any specific OEM, but suffice to say that every OEM is working on a bunch of new models, which will hit the market over the next 2-3 years. And so I think from a consumer standpoint, it's gonna be a really exciting time because there will be a ton of choice when it comes to battery electric vehicles or plug-in hybrid vehicles at all price points and from every, every brand. Great. Maybe you could talk about the design win activity in data center, specifically the AI liquid cooling. I think your exposure there was something new we kind of heard at the start of the year. What is it about your power solutions that enable you to win these, you know, AI liquid cooling sockets? Yeah, Nick, thanks for the question. So this has been a pivot from our partners that we work with that serve the data center infrastructure market. As AI data centers or AI chips are proliferating through data centers, the cooling approach or the cooling solution is much different than a traditional data center. AI chips are larger, and they run hotter, and so the power consumption and the heat dissipation is orders of magnitude higher than a regular data center chip. And so just air cooling is not enough, and that's why a lot of our partners are innovating and coming up with really clever liquid cooling solutions. And so when we look at the data center market, our design win activity through this inventory digestion period has actually stayed pretty strong. Now we're starting to see the first design wins on liquid cooling solutions, where essentially our motor drivers are used not just now for fans, but also for the pumps that are used to pump the liquid and to make sure that the level and the pressure of the liquid is staying consistent. So really excited about you know what the potential is here, and I think we're just getting started. Thank you. One moment for our next question. Our next question comes from Vijay Rakesh with Mizuho. Your line is open. Yeah, hi, just, Vineet and Derek, just a quick question here. If you look at your outlook, I think looks like the key is the inventory destocking, especially on the margin line. As you look at June quarter, do you think disty and OEM inventories get back to normal, in that, in a 4-6 week range that you talked about? ... Yeah, Vijay, thank you for the question. It usually takes a couple of quarters, right? Historically, it's taking, generally speaking, about three quarters. So I'll call the December quarter, the first quarter, you know, March is the second quarter, and June is the third quarter. So if history is any guidance, that would be the case that Q1 will get back to normal. So we expect right now that Q1 will be our trough quarter. And we're gonna see that across all end markets. We're starting to see it. It's really kind of a rolling cycle, as you know. So within our consumer business, that's getting to a trough right now, and that could come sooner, right? And that could start to rebound a little bit sooner, and then I'd expect industrial to rebound. In auto, the dynamic, as Vineet mentioned, is relatively new with the auto inventory rebalancing at the tiers and at the subcontractors, which will be, I think, last to kind of complete that rebalancing. Got it. And then on the auto side, you know, obviously, a big chunk of your sales there, 75% or something, but the outlook for fiscal 2024, up 15%-18% versus where LVP is. Can you talk to what's driving that? That's it. Thanks. Yeah. So let me give you the numbers. For our fiscal 2024, which ends in March, we expect our auto sales to be up high teens and overall sales to be up 7%. And for that same period, LVP is about 8%. So we're about double that, a little bit more than double that, consistent with our model, so 7%-10% outgrowth on top of that. And really, what's driving that has been the continued design wins and the growth within EV and xEV and the e-mobility side. Saw the e-mobility side of our business go from 44% of auto a year ago to 54% of auto the same quarter this year. And then would you expect to continue that into fiscal 2025, that same, above LVP, 10% above LVP growth? Thanks. Yeah, we're not guiding for 2025 right now, you know, and we're gonna continue to watch the market closely for 2025, Vijay. Thank you. One moment for our next question. Our next question comes from Blake Friedman with Bank of America. Your line is open. Hi, thanks for taking my question. Just kind of wanted to approach the comments on June from a different perspective. So when I look at your auto and industrial peers on a peak-to-trough basis, most are down anywhere from 20%-35%. When I look at your March quarter guide, it implies declines on a peak-to-trough basis, closer to mid-teens. I know you mentioned June would mark the trough of the cycle, but is it fair to say Allegro peak-to-trough declines this cycle can finish at the lower end of that range? Yeah. So the way... You know, we haven't given any guidance, Blake, with respect to the June quarter, right? But you, we had a decline of about 8% in the December quarter. Our guidance is about a decline of 8% in the March quarter. And so again, if history is any guide, we're expecting that these three-quarter cycles will continue to see that kind of a decline in the March quarter as well. Got it. And then just more of a longer-term question on gross margin. I know you outlined the puts and takes to kind of, you know, in the short-term recovery. But to get to your 58% target, can you maybe describe that bridge from 54%-55%, 58%, the puts and takes from there? Thanks. Sure. Good question. So when I look at our Q3, we were actually above 55% on an organic basis before we start to get synergies for Crocus. So that was about a 70 basis point headwind for the Crocus, you know, the first quarter of Crocus. And we're continuing to work to get synergies on their business, and as that business scales, we'll also get gross margin. The other piece of it is our distribution sales are obviously down, and as we've talked about in the past, that's about 800-1,000 basis points higher than the OEMs, just because of the volumes. So as that starts to normalize, that's generally about 100 basis points. So that kind of brings us back up to that 56%-57% range. And then our supply chain teams continue to work on a flexible manufacturing model by moving product or standard product to subcontractors, as Vineet talked about, a China supply chain, and then continuing to leverage our back-end facility in the Philippines, where we continue to have opportunities for optimization. And we just finished a large capacity expansion in the Philippines, and that's something that happens every few years. That's not gonna continue into next year, so we'll continue to leverage the Philippines. So we think with our vendor leverage, as we scale our Philippines facility and getting synergies from Crocus, and as the distribution sales start to normalize, we get to that 58% level, and we were there, of course, two quarters ago. Very helpful. Thank you. One moment for our next question. Our next question comes from Joshua Buchalter with TD Cowen. Your line is open. Hey, guys, thanks for taking my question. I guess I wanted to follow up on the previous one, and I apologize for beating the inventory digestion to death, but did you just say that you expect the June quarter to be down as much as the December and March quarter? And I guess, big picture, can you talk to confidence that you'll be able to get this inventory cleaned up by the June quarter, and any anecdotes about where inventory levels are at your end customers would be helpful. Thank you. Yeah, Josh. So right now, inventory levels in the channel where we have direct visibility and contractual visibility are elevated. Those are above our target ranges, and that's why distribution sales are down. We continue to manage distribution sales down and watching that POS and watching the inventory in the channel. We're starting to see that clear in consumer, and as I said, I expect that consumer is probably at a trough first, which is the March quarter. Industrial continues to clear, particularly parts of the data center, parts of solar. That may take another quarter to clear out of there. Auto is a relatively new dynamic, of course, with the rebalancing of the inventories that Vineet talked about. And yes, we do expect, you know, if history is any guide, that the June quarter decline would be similar to the decline we saw in March. the December quarter and the March quarter. Okay, thank you for clarifying that. Then as my follow-up, I wanted to ask you about Crocus. I believe you mentioned some initial traction in the prepared remarks on e-mobility. Are those products—does that indicate that the products are close to or are auto qualified? And maybe you could talk to bigger picture about how your engagements with your customers have changed now that you've got Crocus in the company and expanding your current sensing portfolio. Thank you. Hey, Josh, this is Vineet. Thanks for the question. So, I can indeed confirm with pleasure that we have now auto qualified the Crocus product. It is what we call a generic qual. Now we will, as we are engaging with each individual customer, obviously, there's a qualification cycle as per the unique design, but we are very actively engaged across automotive and industrial customers. And I'd characterize the engagements and some of the excitement in two ways. One is, with the industrial base that Crocus had, where maybe there was a little bit of trepidation on engaging with a smaller company, a startup company, that's gone away, and now we're able to engage with a much more comprehensive portfolio around sensing and power with those customers. And so those customers are really excited to engage with us and really take advantage of the whole portfolio. On our customer base, where perhaps some of the more challenging applications, you know, we were working through some of those technical challenges, the addition of the Crocus TMR stack has now made the solution very obvious and very easy, and so we're accelerating the adoption of the TMR stack onto our parts. And really, as I mentioned, we are now going to market through a common brand. XtremeSense TMR is now the world's most comprehensive magnetic sensing portfolio on TMR, really addressing the most demanding challenges around sensitivity, around speed of response, around low power consumption. And so we see really an endless set of opportunities that we can address together. Really excited about the two technologies coming together under one brand. Thank you. One moment for our next question. Our next question comes from Thomas O'Malley with Barclays. Your line is open. Good morning, and thanks for taking my question, guys. I wanted to ask about the auto trends into March, but I wanted to ask more specifically on the, on the makeup of those auto trends. So if you look at the December quarter, you're still seeing really strong growth, you know, on a year-over-year basis from the ADAS and xEV rev, but your, you know, your core, non-faster-growing auto business was down seven. Could you talk about, when you look into March, what your expectations are, for the split between those two businesses? Do you see, sequential declines in some of the, the faster-growing ADAS and xEV revenue? Just given all the weaker data points on EV that we've been hearing lately, is that the reason for the incremental auto weakness for the next two quarters, or is it really more of the core, more SAR kind of levered auto? Thank you. Yeah, Tom, this is Derek. So in the Q3 quarter, you're right, e-mobility was up strong, the traditional auto business was down. And if you remember in our guidance, we talked about the UAW strike in the United States. It did actually have some impact. So when we looked at the pull ahead, you know, with the Detroit Big Three, sales were down significantly in Q3 compared to Q2. There was some pull ahead we saw in Q2, and we expected that. And going, rolling into Q4, we're not going to break that out guidance by market, but it's really the inventory digestion, primarily at the tiers and at the subcontractors. It's not specific to end-market demand, certainly not in EV and certainly not in ADAS. Yeah, Thomas, this is Vineet, so I'll just add to that. As Derek pointed out, we had some order push-pull dynamic with our North America customers, you know, largely around the UAW strike. At the same time, we've seen some really strong growth with our China customers and our Japan customers, and so I think that's the dynamic we're seeing. You know, if I take a step back and I sort of look at the mid to long term, we know that Chinese OEMs, Japanese OEMs, European OEMs are really forging fast and furious towards an all-electric future. You know, the North American OEMs are taking their own path with a mix of plug-in hybrids as well as battery electric vehicles, and we're serving all of them in their own unique way. But I think the path on each region to an all-electric future will be slightly different and will take a slightly different timeline. Helpful. And then my follow-up is just on the gross margins, a bit lower into March, but I think you mentioned mix. Can you talk about, you know, how you see that margin profile recovering? I mean, if lead times have come down and the channel looks a little bit different than it did over the last couple of years, you know, shouldn't margins stay kind of more at these levels? And if you look at, you know, auto potentially recovering, does that help bring those margins back after, you know, the June, September quarter time frame? Just, can you just walk me through the puts and takes of, you know, how much recovery do you see in the gross margins and how quickly you think that comes back? Yeah. As I mentioned, our Q3 gross margin was about 60 points better than we had guided to at the 54.6%. Within that, Allegro's organic gross margin was still over 55%. So organic gross margin is still very good and very healthy. It holds up well based on the flexible manufacturing model that we have. Going into the March quarter, we're guiding to 53%-54%, and that projects a continued decline in distribution sales, which, as I mentioned, generally has significantly higher gross margins than OEM sales because of the volumes they're buying. Product mix also plays a part in that from quarter to quarter. And then the third piece of the March quarter is the continued, Crocus integration and Crocus fixed cost before we start to see synergies in the second half of the year. I'd expect that gross margin to remain in that 53%-54% range for the near term, the next couple of quarters. And then as we start to get synergies, start to see the normalization of the distribution, I expect that to go back up to 55% in the medium term, and then we'll work towards our model of 58%, back to where we were a few quarters ago. Thank you. At this time, I'm not showing any further questions in the queue. I'd like to turn the call back over to Jalene for any closing remarks. Thank you, Kevin. We appreciate you taking the time to join us this morning. This concludes the call. Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.