Welcome to MACOM's first fiscal quarter 2024 conference call. This call is being recorded today, Thursday, February 1, 2024. At this time, all participants on a listen-only mode. I will now turn the call to Mr. Steve Ferranti, MACOM's Vice President of Corporate Development and Investor Relations. Mr. Ferranti, please go ahead. Thank you, Olivia. Good morning, and welcome to our call to discuss MACOM's financial results for the first fiscal quarter of 2024. I would like to remind everyone that our discussion today will contain forward-looking statements, which are subject to certain risks and uncertainties as defined in the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. For a more detailed discussion of risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the SEC. Management statements during this call will also include discussion of certain adjusted non-GAAP financial information. A reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related Form 8-K, which was filed with the SEC today. With that, I'll turn over the call to Stephen Daly, President and CEO of MACOM. Thank you, and good morning. Before I review the quarter's results, I would like to acknowledge the passing of John Ocampo, our chairman, this past November. His contributions to the semiconductor industry, educational institutions, and charitable organizations helped make the world a better place. His vision to make MACOM a world-class company lives on. Now, I will provide a general company update. After that, Jack Kober, our Chief Financial Officer, will provide a more in-depth review of our first quarter results for fiscal 2024. When John is finished, I will provide revenue and earnings guidance for the second fiscal quarter of 2024, and then we will be happy to take some questions. Revenue for Q1 was $157 million. Adjusted EPS was $0.58 per diluted share, and operating cash flow was approximately $33 million. MACOM's core business was essentially flat quarter over quarter, but in total, our revenue grew by 4.5% sequentially, including approximately $6 million from the Wolfspeed RF business acquisition, which closed on December 2, 2023. We ended the quarter with approximately $463 million in cash and short-term investments on our balance sheet. Our business remains healthy and profitable, and we continue to generate strong cash flow while improving in future growth opportunities. In Q1, our book-to-bill ratio was 0.9 to 1, and our turns business, or orders booked and shipped within the quarter, was approximately 26% of total revenue. Separately, our acquired RF business included a significant amount of backlog, which provides us increased visibility over the next few quarters. Fiscal Q1 revenue by end market was as expected, with industrial and defense at $77 million, data center at $49.5 million, and telecom at $30.6 million. For the quarter, I&D was down 3% sequentially, data center was up 22% sequentially, and telecom was flat sequentially. We maintain a highly diversified customer base consisting of thousands of customers across a broad range of end markets, and our strategy is to further diversify and expand our geographic and industry exposure. We continue to see new growth opportunities in all our end markets. Industrial and defense is our largest market and has been steadily growing over the past few years. Defense orders remain robust, while industrial orders remain weak. Overall, I&D revenue was down sequentially in Q1, primarily due to weakness in the industrial markets. We believe the long-term trends for our I&D business are favorable and our growth strategies are working. Our focus over the last few years has been on building out and improving the competitiveness of our established MMIC and diode product lines to cover more functions, power levels, and higher frequency ranges. Expanding our addressable market opportunity through organic and new technology developments like KV CAPS, BAW filters, and high-frequency GaN. Adding new product categories, such as RF over fiber. And cross-selling our optical and high-speed analog product lines. In total, we address a wide range of applications within the I&D market. Our opportunity pipeline with major defense customers is robust, and our capture rate for future business looks strong. Our data center and market revenues grew sequentially in Q1. Demand continues to be very strong within 100G per lane, 400G, and 800G short-reach optical connectivity solutions. Customer demand for shipments exceeded our expectations during our Q1 and Q4 as certain customers ramped up production. Given the fast growth rates and shipments in the past two quarters, we are anticipating reduced shipments in Q2. However, our current expectation is the demand for high-speed products will remain steady over the next couple of quarters. MACOM's linear product portfolio continues to grow. We recently announced the addition of a new dual-channel laser driver and transimpedance amplifier, or TIA, products, supplementing our existing portfolio of 4 and 8-channel products. These products feature high bandwidth, broad dynamic range, and low noise to enable linear pluggable or LPO solutions in targeted applications and form factors. These new solutions can provide a cost and power-optimized solution for SFP-DD and SFP-112 optical form factors targeting Ethernet, Fibre Channel, and InfiniBand applications. We are also seeing the opportunity to further expand in other high-volume applications by implementing linear drive connectivity in network interface cards, or NICs, to support 100 G per lane, optical to switch to server connections. Finally, our R&D teams are actively engaged in developing the next-generation solutions at 200 G per lane to further enable 1.6 terabit per second applications. We support a broad spectrum of applications, including DSP-based solutions, linear pluggable optics, and coherent. The full breadth of MACOM's high-performance analog and photonics capabilities will be on display at this year's Optical Fiber Conference, or OFC, in San Diego in March. Our team is planning a variety of live demonstrations, including multiple hardware examples of 100 G per lane, linear pluggable optical, or LPO module solutions showing interoperability, 200 G per lane, single-mode fiber LPOs, and 200 G active copper cable solutions. These products will support high-speed opportunities, including the latest disaggregated data center architectures. Overall demand in our telecom end market continues to be weak, with revenues down approximately 50% compared to just four quarters ago. Demand weakness is broad-based, spanning most of our larger market sub-segments, including 5G, metro long-haul, cable infrastructure, and passive optical networks, and in many of these markets, customers continue to reduce inventory or suffer from weak demand. While we remain cautious on certain portions of the telecom market, we are excited about the expansion of our technology portfolio and customer engagements within telecom. We believe telecom remains an attractive and diverse market for MACOM. It provides opportunities to differentiate based on product quality and performance. As data speeds continue to increase across wireless, wireline, cable, and satellite networks globally, we see numerous opportunities for MACOM. And of course, we believe our RF power product line is well-positioned to capture market share, and over time, we expect to be a much larger player in this market. We also believe the Satcom portion of the telecom market will continue to provide exciting opportunities for MACOM in FY 2024 and beyond. And we see an expanding SAM for ground terminals, gateways, and space-based hardware. We can provide these customers unique, high-performance IC and module solutions based on proprietary semiconductor process technologies and capabilities. In addition, we added to our already growing space and Satcom portfolio with the acquisition of Linearizer Communications Group. This acquisition added design capabilities in solid-state power amplifiers, or SSPAs, and standalone linearizers for ground station and satellite applications. We expanded our capabilities last year in millimeter wave frequencies with the opening of our MACOM European Semiconductor Center, MESC, which recently received European Space Agency qualification on certain of its key semiconductor processes and products. And finally, we continue to expand our RF, microwave, and millimeter wave assembly and test capabilities for special microwave component and subassemblies for satellite, military, test equipment, and other high-performance applications. We leverage our custom MMIC and analog ICs with specialized PCB materials and unique interconnect technology and assembly techniques to create smaller-sized solutions compared to our competition. On a related note, we look forward to participating in the upcoming Satellite Conference in Washington, D.C., in March. The conference provides our team an opportunity to engage with various satellite manufacturers and industry groups to discuss requirements for traditional defense and commercial satellite constellations. We see a great opportunity to support new commercial constellations targeting high-speed broadband internet connectivity and direct-to-cell applications. We believe our comprehensive product portfolio is ideal for this market segment, which requires optical, RF, millimeter, and microwave technologies from the IC component level up to the subsystem level. I would like to update investors on our recently closed acquisition of Wolfspeed's RF business. We are excited to take ownership of this compelling technology and product portfolio and advance its ongoing business activities. The acquired process technologies and products are highly complementary to our existing portfolio and support our goal of SAM expansion within our target markets. Our GaN on Silicon Carbide RF product portfolio is now one of the most advanced and complete portfolios in the industry. We estimate the RF GaN market to be a $2 billion SAM, and forecasts predict the market will grow to approximately $3 billion by 2027, primarily driven by the increased adoption of GaN in defense and commercial wireless applications. Our RF GaN portfolio now supports a wide range of low-frequency applications, including ground-based radar systems, electronic warfare, and terrestrial communication systems, as well as very high-frequency applications, including various DoD systems and terrestrial and satellite communication systems. We believe our GaN team has industry-leading depth and experience, and I am confident we can disrupt the industry with further GaN epi, semiconductor process, and IC design innovation, which will ultimately lead to market share gains in the years ahead. A few other comments regarding the transaction. First, prior to closing, we identified significant synergies and took actions to enable the business to meet an important objective, to improve profitability and to be accretive to our bottom line. Based on our current projections, we believe the acquisition will modestly contribute to our earnings in Q2. Of course, we still have a great deal of work ahead of us to improve the overall profitability of the product line. Second, our respective integration teams established a plan to enable the acquired business to be fully operational within MACOM immediately after closing. We met our goal, and a few days after the closing, the RF business was operating within MACOM's systems environment, including IT, HR, ERP, and financial reporting systems. And most important, over the next 12-18 months, we expect to make meaningful progress on improving operational efficiencies, profitability, and expanding revenue within the RF business. In summary, MACOM now has a wider range of products than ever before. Many of these products have long life cycles and will produce revenue for years after they've been introduced. We view these business attributes as an inherent strength of our business model. Before I turn the discussion over to Jack, I would like to welcome Raj Shanmugaraj, an independent director, to our board. Raj brings extensive telecommunications hardware expertise and decades of industry experience to MACOM. He was previously the President and CEO of Acacia, a leader in coherent products and components, which was acquired by Cisco in 2021. The management team and the board of directors look forward to working with Raj. Jack will now provide a more detailed review of our financial results. Thank you, Steve, and good morning to everyone. Revenue for the fiscal first quarter was $157.1 million, up 4.5% sequentially, based on growth in our data center end market. Revenue in Q1 included approximately $6 million, which was a partial month contribution from the RF business, which closed on December 2, 2023. On a geographic basis, revenue from U.S. customers represented approximately 44% of our fiscal Q1 results. Adjusted gross profit for fiscal Q1 was $93.1 million, or 59.2% of revenue, compared to 60.1% in fiscal Q4. The decrease was due to the RF business acquisition, which had gross margins lower than MACOM's corporate average. The adjusted operating expense for our first fiscal quarter was $54.5 million, consisting of research and development expense of $35.7 million, and selling, general, and administrative expense of $18.8 million. Total operating expenses were sequentially up by $1.4 million, mostly due to added R&D expense from the acquired RF business, partially offset by lower discretionary spending. Adjusted operating income in fiscal Q1 was $38.6 million, up from $37.2 million in fiscal Q4 2023. Adjusted operating margin was 24.5%, down 20 basis points from fiscal Q4. We see opportunities for improving our operating leverage over the course of fiscal year 2024, as we continue to focus on operational excellence and exercise discretionary spending discipline across the entire business. Depreciation expense for fiscal Q1 was $6.2 million, and adjusted EBITDA was $44.7 million. Trailing twelve months adjusted EBITDA was $193.2 million. Adjusted net interest income for fiscal Q1 was $4.6 million, roughly $400,000 higher than the prior quarter, due to favorable yields on our short-term investment portfolio. We expect interest income to decline slightly next quarter based on the lower cash balance following the RF business acquisition. Our adjusted income tax rate in fiscal Q1 was 3% and resulted in an expense of approximately $1.3 million. Our net cash tax payments were approximately $900,000 for the first fiscal quarter. We expect our adjusted income tax rate to remain at 3% for fiscal year 2024 and into fiscal year 2025. Fiscal Q1 adjusted net income was $41.8 million, compared to $40.1 million in fiscal Q4 2023. Adjusted earnings per fully diluted share was $0.58, utilizing a share count of 72.3 million shares, compared to $0.56 of adjusted earnings per share in fiscal Q4. Based on the applicable accounting rules, our diluted share count was 72.3 million for Q1, including approximately one-third of the 712,000 shares issued to the seller in connection with the RF business acquisition. Our Q2 diluted share forecast of 73 million will include all of these shares. Now, moving on to operational balance sheet and cash flow items. Our Q1 accounts receivable balance was $101.1 million, up from $91.3 million in fiscal Q4 2023, primarily due to incremental December revenue from the acquired RF business. As a result, days sales outstanding were 59 days compared to 55 days in the prior quarter. Inventories were $159.5 million at quarter end, up sequentially from $136.3 million. Inventory turns were 1.6 times, down sequentially in Q1 from 1.8 times in the prior quarter. The sequential increase in our inventory balance and associated decrease in turns were a result of the acquired RF business. This incremental inventory will support the business's strategic defense, industrial, and communications infrastructure customers. We expect to improve inventory turns within the RF business in the coming quarters, as we will now manage wafer starts and other material purchases for the RF business. Fiscal Q1 cash flow from operations was approximately $33.1 million, down from $50.4 million sequentially, due to increases in working capital items and one-time acquisition-related costs paid during the quarter. As we look forward in fiscal year 2024, we will remain focused on cash generation, and we expect our cash flow from operations to exceed our Q1 level. Capital expenditures totaled $4.7 million for fiscal Q1. During fiscal year 2024, we expect our capital expenditures to be in the range of $30-$35 million for the full fiscal year. Even with our expansion of our operations, we continue to effectively manage our CapEx budgets. Next, moving on to other balance sheet items. Cash, cash equivalents, and short-term investments for the first fiscal quarter were $463.3 million, down $51.2 million sequentially, driven by $75 million of cash consideration paid for the acquisition of the RF business, partially offset by cash generated from the base MACOM business. Prior to handing the call back to Steve, I would like to provide some additional commentary on the recently acquired RF business. We see many opportunities for our combined teams to drive revenue growth and achieve operating excellence as we go forward. In addition, as previously noted, the RF business will dilute our gross margins in the near term. However, we do expect the acquired business to be accretive to our Q2 non-GAAP earnings. As we improve operational execution, realize additional post-closing synergies, refine business strategies, and accelerate the introduction of new products, we expect our consolidated corporate adjusted gross margins to return to historical levels in excess of 60%. I will now turn the call back over to Steve. Thank you, Jack. MACOM expects revenue in fiscal Q2, ending March 29, 2024, to be in the range of $178 million-$184 million. Adjusted gross margin is expected to be in the range of 56%-58%, and adjusted earnings per share is expected to be between $0.56 and $0.62, based on 73 million fully diluted shares. In fiscal Q2, we expect I&D and telecom revenues to increase sequentially by approximately 20% and 50%, respectively, compared to the prior quarter. Data center revenues are expected to be down 15%. Two final comments on MACOM's base business. First, we see ongoing weakness in the telecom and industrial markets throughout 2024, and we expect our base business to be flat in Q2. That said, even with the weak markets, we believe we can modestly grow our base revenues and profits in the second half of FY 2024. Second, I'll note at current revenue levels, MACOM's base business gross and operating margins are under pressure relative to prior periods. As revenues recover in our base business, we expect to return to prior profit levels. I would now like to ask the operator to take any questions. Thank you. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, you may press star one one again. In the consideration of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question coming from the line of Thomas O'Malley with Barclays. Your line is open. Good morning, guys, and thanks for taking my question. I guess the first one is on data center. So in your prepared remarks, you kind of talked about very strong growth in the, in the September and December quarter and kind of taking, you know, maybe a little bit of a breather from that into March. Could you just describe the dynamic there? Is that, you know, inventory positions being worked down? Is that demand slowing? And then could you talk about, is this a temporary pause in March, or do you think that, you know, things remain weak for longer than just one quarter? Sure. Good morning, Tom. Maybe I'll make a few comments about the overall data center market, and then we can talk about the revenue trends. So we are definitely seeing a lot of activity across our customer base as it relates to moving to the higher data rates. So that is a general trend where there's an incredible amount of work at both 400 and 800 Gb solutions. We are providing products for those solutions in production today. That has been driving our growth over the past couple of quarters. Included in that is contributing products that we call linear drive products. And while it's still very early, we do see increased interest in this product set, in this architecture for, you know, these systems. And so we're continuing to work with industry and, customers to, you know, better understand how to use those type solutions. And so ultimately, we think that will add, further growth as we move, into the year and even into next year. The other trend I would highlight is with the 100 Gbps SerDes becoming more omnipresent across the market, we think that will stimulate more demand, for the sort of in the traditional, architectures. So our goal as a company is to focus on analog solutions. We wanna have, you know, the best, drivers, TIAs, equalizers, and linear drive products, cross-point switches, servicing the highest data rates. We believe we have one of the best signal integrity teams in the industry, and we're very focused on NPI as it relates to new product development. Now, most of our revenue and backlog, like I mentioned, is at the higher data rates. We have a very strong backlog at 800 Gb today. We have very good visibility into our lead customers' ramp schedules, and as they're bringing hardware in, they're beginning to, you know, modulate some of the shipments. That's why we're dipping down in Q2. But I would highlight that we actually, you know, as a company, this past Q1, it was actually a record level of shipments into the data center at just about $50 million, just under $50 million. So we're not really surprised or concerned that there'll be a dip down. We think the long-term trends are favorable. We expect to see moderation in Q3 and Q4, as other programs come online. So while we're not giving guidance to, you know, for Q3 and Q4, we have an expectation that will remain or build upon the levels that we're seeing in Q2. Very helpful. Thank you. And just as a follow-up, when you guys closed the Wolfspeed acquisition or when you first talked about guidance, you had talked about $150 million a year in revenue contribution. Obviously, things get a little messy with the stub, but if I'm doing my math right here, it looks like in March, if you're talking about that core business the way you are, that, you know, Wolfspeed is around $24 million, which is just a little bit below that $150 million run rate. Could you talk about, one, is that $150 million kind of like more of a run rate, where that business is growing into that? Or what's going on with that acquired asset where it's a little bit below that run rate right now? Thank you. Yeah. So, from the point of announcement of the transaction in August till December when we closed, the run rate for that business has declined. It was over $40 million, and it's come down to about a $30 million run rate. When we look at our Q2 guide, we are including in that a $30 million contribution from the Wolfspeed business, plus or minus a little bit. So you're correct in your sort of comment that things have come down a bit. That is primarily due to the telecom portion of the business being weaker than, let's say, it was six months ago. But then when we look at, you know, the returns and the contribution and the cash generated by the business, I have to just highlight, number one, we acquired a business that was fundamentally losing a lot of money. It was, it had very high expenses, very high material costs, and so we fundamentally changed the way that business is running through the acquisition process that I talked about. So when it actually came into MACOM, in the first full quarter, it will add about $0.01 in Q2, is our thinking. And that is really the beginning. As we look at the cash that will be generated over the next 12 months and then the following 12 months, we see that this business in the next 12 months can easily generate $20 million in that ballpark, and then year 2, certainly in the mid-$30s, and year 3, in the mid-$40s. So when we add those numbers up, we get pretty close to our purchase price. What we need to do as a business is, number 1, we need to grow the top line. We certainly need to address the margins as the business has come into MACOM, as Jack pointed out, with gross margins that are significantly below MACOM's corporate average. We don't see that we have to spend a lot of capital to do the work on this business. So we're actually quite excited. And I'll also highlight that when this management team took over running MACOM back in 2019, that first quarter where we provided results, our gross margins were below 40%, and it took us 8 quarters to get the business to 60% and another 5 quarters to get the business to almost 63%. And so we plan on running that same program on this business, which is today at a run rate of somewhere in $120 million and growing. From a business point of view, we have an incredible team, incredible technologists, arguably number two in the U.S. as a merchant supplier of RF power GaN. It's an amazing fit to MACOM, and our team feels like we were just handed a bazooka, and we're ready to go into the market and do some serious damage. Thank you. And our next question coming from the line of Quinn Bolton with Needham, your line is open. Hey, guys. Thanks for taking my question. I just wanted to follow up on the Wolf business. You know, just to try to size the opportunity there. Obviously, it's coming below core MACOM. Steve, you mentioned that core MACOM margins are under pressure relative to the recent past, just given industry conditions. Should we be thinking the core business probably in the, you know, kind of 59-ish% range, and then Wolf takes you down to the guidance of 56%, I think, to 58% for the quarter? Is that kind of the right ballpark just to be thinking about where that base business may be settling in, in the near term? Right. So our modeling and our data right now in recent looking at the business as well as the trends, my comments revolved around coming off that peak of just under 63%. And you know, when we were at a $180 million run rate for the core business, we're now at a $151 million run rate for the business, and it's come down to 60%. We don't expect it to go below 60% for the core business. So, I think you can then sort of back into the gross margins on the Wolfspeed side, which would get you to gross margins in sort of the low 40%. And Jack, I'll turn to you if you wanna add to that. I think that was a good summary. I guess just to follow up, Quinn, you know, there's many things that we've done to structurally improve the base MACOM business from an overall cost perspective that have helped to preserve that 60% gross margin number that Steve was referring to. So, you know, expectation is as we go forward, you know, we'll be able to apply some of those same things that we've done with the base business to the Wolfspeed acquired business, and that will help support us. And then with some lift from a revenue perspective on the base business, as well as with the acquired business, you know, that'll help improve margins as we go forward. Got it. And then the follow-up question was just, you guys, I guess Wolf will continue to operate that fab for the first two years. And so, is there anything that handicaps you from being able to get into that fab to start to run your processes or to try to drive higher yields? I mean, are you somewhat, you know, constrained with what you can do while the fab is being operated by Wolf? Or do you think you've got free access to the fab, you can start to implement your blocking and tackling, your know-how to start to improve those yields, you know, immediately post-close? Sure. So, I'll provide a lot of background information to help answer that question. So, we have today a foundry relationship with Wolfspeed, where we buy wafers at an effectively fixed price. So that's point number 1, and that will stay in place until the fab conveys in about 2 years. Second, Wolfspeed, as part of the transaction, we made, there was a significant portion, $50 million of stock given to Wolfspeed, so they are now an equity holder in MACOM, aligning our strategic goals. Third, we have something called a fab operating committee, which is comprised of both Wolfspeed and MACOM staff, who will work together to implement change in the fab with Wolfspeed support. And as you can see, it's within their... It's beneficial for them to improve execution and yield because it lowers their cost of wafers they're selling to us. So everybody's goals are aligned. And so it's, you know, we're just coming out of the gate. It's been two months. We have an amazing working relationship with the staff in North Carolina, both inside the fab and their technologists and whatnot around the fab. So we will be able to affect change, but there's boundary conditions, and I wanna be clear that there's structure around that to make sure that we're able to do that. And so that was an important part of the transaction for MACOM, and we were able to have a great meeting of the minds on how to do that. So that would certainly address making improvements inside the fab. When you move outside the fab, and you look at the back end, assembly, and test, as well as all of the other inbound material costs associated with the business, we have full control over that. So we can make changes to OSAT contracts, we can look at yield enhancement on assembly and test, and we can bring the full force of MACOM to the back end, which is a significant part of the cogs, to affect change, and we're doing that immediately. Wolfspeed has a great team over in Malaysia, a great team out in Morgan Hill. They're rolling up their sleeves with the MACOM staff, and we're going to work. So, you know, there's many pieces that we'll be focused on. And then the other item I'll just highlight, that there's also business-related practices that we will change and will bring in line with the way MACOM runs its business. For example, we don't like to rely on distribution channels. We like to deal with our major customers direct, and we would rather engage and sell the full product line. And so we'll be looking at optimizing distribution, the use of distribution for selling these products. We'll certainly be looking at all the contracts that have been put in place, whether it be long-term purchase agreements or foundry agreements, you know, we certainly want to make sure that we conform that to the MACOM standards. So we certainly have a lot of work to do, and as Jack mentioned, and I highlighted, this is going to not be, you know, an instantaneous gratification. There's just a lot of hard work here, and you're gonna, you know, our thinking is you'll see incremental improvement over time. And if we do that, it will meet our, financial targets and also, you know, we will begin to dominate in the market. Thank you. And our next question coming from the line of Vivek Arya with Bank of America Securities. Your line is open. Thanks for taking my questions, and thank you, Steve, for giving the color around the steps required to derive all the cost synergies. I was wondering if, if there is a way to quantify when you think the combined entity can get to that 60% or so gross margin level. Is that an 8-quarter, you know, type timeline as, as you described in, in your historical activities? Or, or should we think about something different and something you can achieve faster? So, we don't have a sharp answer for you on that. You know, we're starting in the low 40s. We'd like to exit our fiscal year close to 50. If we can get to 49% or 50% for this business segment, going into our fiscal 2025, I think that would be a win. So that's, you know, we're, we're sort of head down, focused on pulling all the levers we can to make that happen. So I, I can't necessarily put a timeline on, like, you know, our, our end target, but I can tell you in the near term, we plan on making significant changes. And part of that also will have to do with the mix, that will have to do with the amount of growth that comes through the business. So there's just a lot of factors there that make it difficult to give you that firm answer. But I can say this: we do fundamentally understand the business. When we look at the industry, and we look at competition, and we look at their gross margins, we know that there's a lot of room to go with this technology. Got it. And then, can you give us a sense for what is the core MACOM industrial and defense revenue that you're guiding to in the March quarter? And where do you see the trough on the industrial side? I realize it's you know, it's tough given all the cyclical headwinds, but what is sort of the core MACOM industrial you're guiding to, and where do you see the trough for that business? I think you mentioned something about a back-half recovery, so I was just hoping you could give us some color so we can model that business the right way. Sure. I'll, I'll start with that, and then Jack can add. So, going into Q2, our base business, the industrial and defense, we think will be up about 5 or 6%. We think telecom will be up about 8 or 9%, and we know that the data center will be down about 15%. So that is for the core business. Now, when you compare that to my commentary for the full business, industrial and defense, going, you know, in Q2, will be up 20%, telecom 50%, and data center, you know, the same at that 15% drop. Obviously, the big step up in the aggregate numbers are due to the Wolfspeed contribution of that $30 million, and it's essentially evenly split between the two market segments. Jack, do you want to add to that? I think the only other item to add was with regard to, you know, the industrial piece of that I&D business. So I think we've been discussing how the industrial piece has been down for us over the past couple of quarters. That's something that we continue to manage, but I think we've been pleased with the performance on the defense side of the business, which has really supported things within that end market, and we continue to see opportunities on the defense side to ultimately drive improvements in that end market as we go forward. Thank you. Our next question coming from the line of Harsh Kumar with Piper Sandler. Your line is open. Yeah. Hey, guys, congratulations on closing the deal, and, you know, looking forward to you guys doing an excellent job on integration. Steve, I did have a question, a follow-up on kind of what Vivek was just asking about. You said your book-to-bill for the business was 0.9 in the December quarter. Sounds like if I take your guidance of the core business being roughly flattish, is it fair for me to assume that the book-to-bill is now, you know, very close to 1? And if you're talking about a recovery in your business in the back half, then the book-to-bill starts to climb. The reason why I ask that, historically, when the book-to-bill starts to climb like that, it signals a bottom. Is it fair for me to assume that your industrial business is bottoming out right about now, give or, you know, plus or minus a quarter? So, a couple things. You're right, the book-to-bill, if we just go back a quarter or two, so in Q3 of our fiscal 2023, it was 0.9, and then we ended fiscal 2023 with a book-to-bill of 1.1, and then this past quarter, it was 0.9. Okay, so the weakness, looking at the bookings, was really telecom, and to a certain degree, data center related. And the strength was, you know, so the segment that was the strongest was I&D, primarily driven by the D, and it was, you know, we had some very good bookings there. So, as Jack said, our industrial business still remains weak. I'm not sure we're, we're able to call a bottom, per se, but we feel that we can move the base business during Q3 and Q4. I mean, we've been at $151 million now for, you know, a few quarters, right? So, Yeah. Whether we're at the bottom or not, it's just so hard to tell. So I really can't say anything more than that. Fair enough. Thanks, Stephen. And I did have a follow-up, another question that was asked earlier on your data center strength. You know, wherever we look, we see this generative AI driving compute memory, and it would imply that connectivity is rising, which is really good for you guys. Seems like you've got the products. You talked about strong demand, but you are talking about slippage. I think you said this quarter in March, and I think you said maybe potentially slipping into the June quarter as well. A, is that correct, about March and June quarters? And then, B, is that simply you aligning your shipments to customer needs, which would imply that the customers are weak, or is there something else going on? So there's a lot of moving parts in the data center. First, in terms of the back half of 2024, our fiscal 2024, what, you know, when we look at the data center business, we think that there's opportunities for growth. Exactly what that will be, we're not, we're not able to say today. Second, there's an overhang right now in the data center business of the lower data rates, 25 Gb, a lot of the traditional NRZ products that we sold into being certainly very, very weak. That we're not expecting to really come back in any earnest in the back half. We think the growth in the back half will be at the higher data rates. Third, what you're seeing here really is movement around the major customers and their ordering patterns as they start to ramp up and hit steady states. And so, as we've seen many times in the data center, there's prime the pump in drive ramps, and then pump the brakes. And we're in that little bit of a mode, I think, in Q2, where now a lot of our lead customers are digesting a lot of the inventory before they do another step up. The other thing I'll highlight is these parts do have long lead times, and so the customers know that. So as we start to move into this quarter and beginning of Q3, we'll have very good visibility into the back half of the year. But I will say, and to your point, the trends are very supportive of our, our core strategy, which is focusing on the higher data rates. And we have a compelling product line. We, we think, we have some of the best drivers in TIAs in the industry. We have been seeing pull not only from, let's say, the major customers, but we're also seeing pull from the, the cloud folks themselves, where they're, they're beginning to become believers that linear drive can have a place in their networks. And the last point I'll make about the data center, as everybody knows, with the, with the new architectures of these systems, there's an incredible amount of short-reach optical or, or electrical connectivity or cables. So the SAM in this area is growing rapidly, and there's been lots of publications from various folks talking about port counts and whatnot, but there's just tremendous growth that folks are predicting. So we'll see if that comes to fruition, but we feel like we are in a good spot. Thank you. Our next question coming from the line of Harlan Sur with JP Morgan. Your line is now open. Good morning. Thanks for taking my question, and congrats on getting the RF business acquisition closed. The newly acquired RF business in telecom, you guys had expected a slight decline in the December quarter, marking sort of 5 quarters of consecutive declines. It looks like telco was actually down more than that in the December quarter. Obviously, we know wired and wireless infrastructure trends continue to be weak. But for March, you're actually thinking 8%-9% sequential growth. So do you guys believe that the business has bottomed and maybe telco sort of bounces along the bottom beyond the March quarter? So, possibly. So the telecom market for us has three, well, three areas that are positive right now. Number one is Metro Long-Haul, where we see ramp-ups of 130 Gb systems very early, but there's a lot of spending and pull for our products in this market. Second is SATCOM, satellite communications. We are seeing growth in many opportunities to expand our business in this area. So that is absolutely supporting our near-term revenues. We are starting- Mm-hmm ... to see some amount of growth in China for small cell deployments and front haul, you know, demand, let's say. It's modest, but it's an improvement over where we were a quarter or two ago. But to your point, you're right. We've come down significantly from over $60 million to now, this past quarter, you know, $27 million. A lot of the growth we had in 2022 and 2023 was cable infrastructure. That's essentially, you know, gone away. We had a lot of revenue with PON, Passive Optical Networks. We are today shipping equip, you know, products into PON at a very muted level. It's not zero, but it's quite low. So, the last point I'll highlight is, you know, 5G is still a very important market for MACOM. And while a lot of people are quite negative about telecom, we actually are reinvigorated and quite excited about being able to bring the RF power business from Wolfspeed into a whole range of customers that either they were not engaged in or where we wanna grow the positions where they were engaged. And so we believe that together we can gain more market share in the 5G market space together. And so that's part of our core strategy. I appreciate that. Then maybe just a quick update on the linear drive, right? Because it seems like there would be more demand for these types of solutions as the industry moves to 1.6 speeds later this year, because the DSP-based 1.6T modules consume so much power. Maybe give us an update on the traction of linear drive on the current 100 Gb per lane, upcoming 200 Gb per lane, and is the team actually shipping solutions in high volume production today? Right. So a few things. There is a lot of work going on in the industry for interoperability at 100 G per lane for linear drive. So that is really the state of the industry. And so you're starting to see various publications. In fact, there was, I think, an industry get-together in, I think it was in October, where you had some of the major cloud companies presenting data, showing bit error rate and functionality of linear drive systems, actually showing system-level data. And the data is compelling. So now what needs to happen, of course, to support this is more switches being available, not just the Tomahawk 5, but other platforms, whether it's Cisco, Silicon One, or others. So there needs to be more switches that can handle the linear drive because the ASIC needs to support the linear drive chip that we make. So, that is the state of that business. We feel like we're right on the edge of that discussion, and our high-performance connectivity team is doing a phenomenal job there. When you talk about 200 Gb per lane, we will, as I mentioned in my script, we'll be demonstrating some products there in that regard, and so we are, of course, also very active. I think there's less activity right now in that area. There are certain constraints. A lot of the first generation, 200 Gb per lane will be single-mode fiber using silicon photonics and EMLs. That, we think before the volumes kick in, it has to switch over to a VCSEL laser, and we don't make VCSEL lasers at 200 Gb. I'm not sure the... You know, that's very early days for that, but there's things that need to come together in the ecosystem to support super high volume, 200 Gb, and it's still very early. So again, it's something that we're focused on. We think we'll be positioned well, when our customers wanna ramp up those technologies. Thank you. And our next question coming from the line of David Williams with The Benchmark Company. Your line is open. Hey, good morning, and let me add my congratulations on the closing of Wolfspeed there. I guess my first question has just been around that acquisition. Has there been anything, any surprises, either positive or negative, that you've come across? And maybe just kind of touch on what you've done in terms of integrating that into the business. Thanks. Sure. I would say that, no, there was really no surprises. We spent a fair amount of time in due diligence to get to know the people, the staff, the organization, the infrastructure, and had just a great engagement with the Wolfspeed team. So, you know, sort of post-close, there was no real surprises. As I highlighted in the script, most companies will acquire a company, then integrate after closing. We had set up a planning process to allow us to execute that integration the day after we closed, essentially. And I have to really thank the Wolfspeed team, as well as our team, for working so well together. I will say that the customers and the industry seems to be very receptive of this change. They now recognize that, given MACOM is very focused on RF and microwave, that it's a perfect fit. And a lot of the things that were on the drawing board for next-generation processes or products, we can now together implement as a priority. So I think that the customers will benefit from that. But I would say, generally speaking, no surprises. There's certainly a lot of heavy lifting that we need to do, as Jack and I have talked about. The team, the management, the production workers, our application staff are amazing. They have a very strong footprint across Europe with their sales and applications team. They are stronger than we had, so we're really excited about that. Very strong team in China, and some great manufacturing capabilities, not only in North Carolina, but also in California, where their Morgan Hill facility has essentially a state-of-the-art assembly factory. Thank you. Then maybe, Jack, you talked about the flexibility in the model on the expense side. Can you kind of maybe talk about what your expectations are as you kind of go through and get and get this fully ramped, and you find the synergies that you've expected, and just how should we think about the expense side? Thank you. Thanks, David, and I'm assuming you're referring to the operating expense side. So, you know, as we closed out the December quarter, that was only a partial quarter from an operating expense point of view. So as we look forward, you will obviously have a full quarter's worth of operating expense with the acquired business. But I think one of the things to look to in terms of how we manage the business, right? We wanna make sure we're also leveraging many of the costs that we are currently incurring from a MACOM point of view. So certain of that was already factored into the, we'll call it the acquisition model, as we played this out. So, a lot of that work was done upfront and/or prior to closing. So from an overall expense perspective, you know, we think we've got a pretty good handle in terms of where we're at today. Similar to what we've worked through with MACOM from an operating expense perspective, we wanna make sure we're gonna continue to refine things and better leverage our overall operating expenses as we go forward. So I think if you look at the guide that we've put out there and some of the other directional information, you can see that we'll probably be making some pretty good progress from where that business was historically from an overall operating expense perspective. But I think we're feeling pretty good in terms of where we're at now and look to obviously build upon that as we go forward. Thank you. And our next question coming from the line of Srini Pajjuri with Raymond James. Your line is open. Thank you. Good morning, guys. Thanks for squeezing me in. My question is on the data center. First question, Steve, you talked about some lumpiness in the near term. I'm just trying to understand the mix of your business in terms of lower speed versus higher speed. Obviously, the higher speed, the market itself is growing nicely. But at the same time, to what extent the lower speed weakness, I'm trying to understand to what extent this is cyclical versus something structural. And where do you see that lower speed and a business bottoming for you? So I think it's when we talked about the lower speeds, we do think that there will be a couple more years of 100 Gb per lane demand for what I would call our traditional 100G SR4 AOCs and some of the, you know, DR 100 G DR1, things like that. So we think there's still a good amount of legacy business out there, and there will continue to be demand there. But what we definitely are starting to see is, as the next generation switches come out, people wanna run at the higher data rates, 400 and 800 Gb. Some of them are jumping right to 800. And so what we see today is the vast majority of our revenue is at the 400 or 800 Gb PAM4 applications. These are typically short reach. So you're talking about, you know, less than 100 m, could be less than 500 m. And then the other thing I'll highlight, just sort of related to that, is some of the trends with Metro Long-Haul, 'cause we also see a similar thing there. Now, we do lump Metro Long-Haul into telecom, but we definitely see that the 32 gigabaud products will also, in the next year or two, start to ramp down as people bring up 64 gigabaud, which is, you know, 400 Gb, is the majority of that. And they're starting, some are actually starting at 130 gigabaud. So you see this data rate migration to the higher speeds. I think it's slow and gradual. I actually think since the run rates of our lower data rate revenue is so low, and the growth of the higher data rates is so high, I think the worst is behind us as it relates to, you know, having a step down because of, let's say, a 25 Gb platform going end of life. Got it. Thanks for that. And then my next question is about your I&D business, Steve. I mean, you know, you know us on the investment and community side, we, I think we understand how to kind of think about the industrial business, you know, fairly well. But defense is more program based and company specific. So as you kind of take a look out to the next, you know, 12-18 months, can you talk about, you know, what you're, how you're thinking about your defense business growth? You know, are there any new programs that are kicking in? I mean, just from a modeling standpoint, you know, what is the organic growth rate for this business that the way you guys think about it? Yeah, I would say that if we can achieve high single-digit growth rates on a CAGR basis, that would be great. I think the last 3 or 4 years, it's been about 18%. So we've been, you know, making a lot of great moves with capturing programs, being more aggressive, cross-selling some of our capabilities into the defense market. Most of our defense business historically has been RF and microwave related at the chip or package level, and part of our strategy has been to slightly go up the value chain and build multifunction assemblies for customers using all of our chips, and that strategy is working quite well. And then, of course, with Wolfspeed, a significant portion of the Wolfspeed business is for defense.... and primarily for transmitters and radar systems. So with Wolfspeed and MACOM, we believe we can do higher levels of integration, we can capture more market share, and just better service the customer to- the customers in this segment together. So, you know, we're in all sorts of different types of platforms with the core MACOM business, with the RF power coming online, our SAM just increases further. It, from a GaN point of view, just to remind everybody, Wolfspeed's technology is ideal up through about 14 or 15 GHz, up through X band, let's say. They're very high voltage, high power processes. So if you're building a radar that wants to knock, or a transmitter that wants to knock drones out of the sky, you would wanna buy one of Wolfspeed or one of MACOM's products, as an example of a new application that is very relevant today. And then of course, the necessity to upgrade electronic warfare and jamming systems, they all require high power transmitters, and this is right in our wheelhouse. So, great technology. We're very active, we'll conservatively say high single digit growth, but we've been beating that. And if things go well, then, you know, we hope to stay on that, that CAGR, you know, run rate. Thank you. Our next question coming from the line of Tore Svanberg with Stifel. Your line is open. Yes, thank you. And, let me first offer my sincere condolences of the passing of, of Chairman Ocampo. First question, Steven, it's really related to what you just talked about. So if we think about the, the Wolfspeed RF business, it sounds like it's gonna sort of contribute 50/50 between I&D and telecom. But as we think about the growth, of that business, will that also be very similar? Do you expect sort of the contribution to be similar to both of those segments? So I think they're gonna be different, and I think when we look at the Wolfspeed portfolio as it exists today, they have a very strong telecom business, which is down right now because of weak 5G, and we have great potential there to capture more market share together and turn that around. They have a great foundry business, which is a combination of commercial and defense, and we believe we can continue to grow that business. And then they have a product line of FET discrete devices and MMICs. We believe their MMIC product line is way too small. We wanna throw the full force of our MMIC designers at their processes and take higher value products to the customers. So we would expect, and our strategy will be, to grow the MMIC portion of their portfolio, in terms of, you know, assigning resources to develop products to go after customers aggressively. That will be a corporate priority for us, and that we think that is one of the best ways to A, capture market share, B, improve profitability, and C, grow, grow the revenue of what is, you know, a product line that today is just too small. So when we roll all that up, we'll just have to sort of wait and see. There's a lot of factors here beyond our control regarding some of the run rates of their big programs. And of course, we're still getting to know the programs and understand them, and as the Wolfspeed management team works with our team, and we go together to customers and learn about, you know, the programs, we'll be able to re- sort of refine our thinking. But, yes, this, this business has tremendous potential to grow. You know, if you look at the $2 billion SAM for GaN, about half of that, we believe, is defense related, and so we want a big piece of that. That's very helpful. And as my follow-up, and I know people are asking a lot of questions about the sort of step down in data center, but, but could you give us a little more color on maybe so let's say it's a $200 million business now, you know, how much of that is, you know, lower data rate versus higher data rate? And, and, you know, are you starting to see any seasonality in that business, or is that still way too early? Yeah, I would just say one thing about people's concern about our data center business. So our data center business back in 2019 was about $115 million. On the trajectory that we're on right now, that business is probably gonna be above $175 million-$200 million. I mean, that's kind of the range this is going. So we're very happy that every year we've been able to grow the business. Now, we also like to say all the time that this is the most volatile part of our business. We see ramps go up and ramps go down, and that is definitely just what you're signing up for. And you're seeing a little bit of that over the last three or four quarters, where we've had a tremendous ramp up, and now we're having a pause. We don't read too much into it. We have, you know, at the higher data rates, we're gaining exposure across the industry. As the LPO technology is adopted, it plays to our favor, and we know that the sheer volume of short reach connections is increasing. And so these are, I think, these are the themes that we believe are most important. I would not call this business seasonal. I think it's very much related to deployments and the folks that are making the data center infrastructure, winning business and rolling out large clusters or infrastructure. It's more program related than seasonal. Thank you. Our next question coming from the line of Karl Ackerman with BNP Paribas. The floor is open. Yes, thank you, gentlemen, for squeezing me in. Two, if I may. First, I suppose, Jack, or Steve, could you address whether you have enough capacity today to support 50 Gb per lane, 100 Gb per lane, and soon to be 200 Gb per lane, for short reach applications, and whether you are actually seeing end customers begin to co-invest in the supply chain to support continuity of supply? So we just to remind everybody, the high-performance analog products that we produce are using third-party foundries, not internal MACOM foundries. So in this case, we're dealing with, you know, the global giants that produce high-performance CMOS or BiCMOS or Silicon Germanium. And so we typically don't view our requirements as moving the needle inside of these fabs. We're sort of a small player in what is typically very large fabs, and our volumes are really not material to their overall business. So I would say that we're not too concerned about capacity. What we have to be concerned about is lead time and planning, so that, as I mentioned, this is a volatile business, so when the music stops, we don't wanna be holding a lot of parts. So we have to plan very carefully, ramp up steady state programs, diversifying those parts across a lot of customers, and then ramping down. And then the way we manage that with customers is we provide them long lead time so that we can buffer and reduce some of that inventory risk. But I would say, generally speaking, we do not have a capacity problem here. And on the back end, regarding OSAT or testing, a lot of these products are bare die, flip chip, or bumped, in some cases packaged, so no issues there from a capacity point of view. And then the third thing I'll mention is we have great relationships with our third-party foundries, and when we see a, you know, high demand, we're on the phone, we're talking to them and making sure that they can clear the road for us if that's necessary. So it's really priority and planning. Yep. Thanks for that, Steve. For my follow-up, thank you for providing the core growth of telecom in March, but how do you see that market this fiscal year? And, you know, within telecom, you know, the Wolfspeed acquisition gives you both GaN as well as LDMOS products. It gives you the full suite of antenna components where telco operators can implement really 5G NR and 4G LTE for carrier infrastructure. And so the follow-up question to that is, you know, will you also prioritize LDMOS? And if so, how are you thinking about that particular end market, the carrier infrastructure market this year as well? Thank you. Thank you. Yes, you're correct to say that LDMOS is part of the portfolio, and we will continue to provide those products to customer. We basically, when we visit customers and we look at requirements, it becomes clear through conversation what the best process technology is. And so we definitely have those conversations, and if LDMOS is more appropriate, then we'll certainly offer that. We are not wedded to one over the other. In the 5G infrastructure, what you're typically seeing is higher frequencies. You're seeing requests for higher efficiency, and typically, GaN has the edge there. So that has been the trend over the past few years in this market. Now, with that said, we, MACOM, our base MACOM, we still produce, MOSFETs and, high-powered devices in our fab here, silicon MOSFETs, and so we sell these products into avionics and a lot of defense systems, and we've been selling them for decades. So we look at LDMOS as a great technology for avionics and some defense systems, some communication systems where they prefer, that technology, and so we'll actually be moving and focusing our, sales force to sell LDMOS across all things wireless. Thank you. And I'm showing no further questions at this time. I will now turn the call back over to Mr. Daly for any closing remarks. Thank you. In closing, I would like to thank our employees, suppliers, and customers for making these results possible. As we move into 2024, we're excited to service the RF and microwave markets with our bigger and stronger RF power team. We're excited to be involved with cutting-edge data center applications for next generation high-speed infrastructure and to service our growing Satcom market. We will continue to work as a team to meet our customers' needs and to execute our strategy. Thank you very much. Ladies and gentlemen, that's the end of our conference call today. Thank you for your participation. You may now disconnect.