Mattson Technology's (MTSN) CEO Fusen Chen on Q2 2014 Results - Earnings Call Transcript

Jul.25.14 | About: Mattson Technology, (MTSN)

Mattson Technology (NASDAQ:MTSN)

Q2 2014 Earnings Call

July 24, 2014 6:00 pm ET

Executives

J. Michael Dodson - Chief Operating Officer, Chief Financial Officer, Executive Vice President and Secretary

Fusen Ernie Chen - Chief Executive Officer, President and Director

Analysts

Y. Edwin Mok - Needham & Company, LLC, Research Division

David Duley

Timothy M. Arcuri - Cowen and Company, LLC, Research Division

Graham Yoshio Tanaka - Tanaka Capital Management, Inc.

Christian D. Schwab - Craig-Hallum Capital Group LLC, Research Division

Craig A. Ellis - B. Riley Caris, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the Mattson Technology's Second Quarter Financial Results. [Operator Instructions] The host for today are Fusen Chen, President and Chief Executive Officer; and Mike Dodson, Chief Operations Officer and Chief Financial Officer. Mr. Dodson, please go ahead.

J. Michael Dodson

Good afternoon. And thank you for joining us today to discuss Mattson Technology's financial results for the second quarter of 2014. Fusen will give an overview of the business and guidance for the third quarter, and then, I will provide the detailed financial results.

Before going into the specifics of the call, I'd like to remind everyone that information provided in today's conference call contains forward-looking statements regarding the company's future prospects, including, but not limited to, anticipated market position, compliance with line of credit covenants, cash balances, revenue, margins, operating expenses, earnings per share and tax provisions.

Forward-looking statements addressed matters that are subject to a number of risks and uncertainties that can cause actual results to differ materially. Such risks and uncertainties include, but are not limited to, those described in today's news release and in the company's Form 10-K, 10-Q and other filings with the SEC. The company assumes no obligation to update the information provided in this conference call. And now let me turn the call over to Fusen Chen. Fusen?

Fusen Ernie Chen

Thanks, Mike. And thank you for joining Mattson's Second Quarter Earnings Call. I'm pleased to report that Mattson has achieved its first consecutive quarter of profitability, with a focus on capturing business opportunities and controlling our expenses. Mattson closed the second quarter with revenue of $42 million and earnings of $0.03 per share.

As expected across our industry, our customers began to make adjustments in their production capacity plans in the second quarter, which will continue into the third quarter. Mattson is positioned for continued growth in the first quarter and we believe our 2014 revenue will grow 30% to 40% from 2013.

I will now give an update on the status of our products. Our Etch business is expected to provide the largest contribution to Mattson's revenue and the revenue growth in 2014. The Etch products are established processed through our records in advanced DRAM, NAND and the 3D NAND production fab across Asia. Building on our success in the memory segment, we have also established a process tool of records in multi-chip packaging, where have shipped multiple systems to support production ramp for advanced memory products. We are also establishing a development tool of record in advanced foundry the sub-20-nanometer front end of NAND processes.

Going into 2015. We are expanding the number of processes, which our etchers hold to a record status and they expect to continue making incremental market share gain next year.

In conventional RTP. Mattson system continued to long high-volume production for DRAM, NAND and the foundry customers. Excluding FinFET [ph] opportunities for both memory and the foundry begin coming back, we expect to receive new system orders. We are also engaging memory customers to prepare for the next phase of 3D NAND projects to come in 2015.

Mattson's strip products continued to provide solid contribution to our business. One of the 2 major drivers of this business has been advanced foundry purchases to support current 28- and the 20-nanometer production, which can be further utilized for sub-20-nanometer. The other major driver has been memory customers purchasing technology-enabling systems. In millisecond anneal we remain on track to recognize revenue of $25 million to $30 million this year.

With an estimate total available market of approximately $100 million, our target revenue represents a market share gain in excess of 25% for this year. We currently have multiple Millios system in advanced production at the multiple manufacturing sites and expect to be in production at an additional foundry customer by the end of this year.

Two major factors are consistently cited by customers regarding the selection of Millios. First is achieving the best device performance compared to other millisecond anneal system. Second is superior total cost of ownership driven by the Millios' higher throughput and the system of availability. Going forward, we are engaging with more foundry in the larger customers to begin process work on real wafers to demonstrate the true capability of the Millios.

Finally, Mattson is also focusing efforts to grow our refurbished systems, spares and the service business. We have reorganized our Mattson support product group and it will improve the service label to all of our customers. Coupled with the renewed focus, Mattson has licensed refurbished and the remanufacturing right of our Aspen II, RTP 2800 and the RTP 2900 systems to trust partners. By working with these partners, support of our long-standing customers will continue under Mattson's guidance.

As mentioned at the beginning of this call, the pause in the wafer fab equipment shipment began in the second quarter as customers adjust their production capacity plan. Our expectation is that the pause will continue in the third quarter, with recovery beginning in the first quarter. By market segment, the following are the benefit we anticipate following the pause. In the DRAM segment, we expect to expand our shipment to include Suprema and the Helios XP in additional to paradigmE XP in the first quarter. In the NAND segment, we expect to continue shipment of paradigmE XP system to support production ramp at the end of this year and at the beginning of next year.

In the foundry segment, when sub-20-nanometer production ramps, Mattson expects to ship Suprema, Helios XP and the Millios system to multiple foundry customers. Based on the current expectation of wafer fab equipment shipment, Mattson's guidance for the third quarter is revenue of $34 million, plus or minus $2 million and the earning at the breakeven, plus or minus $0.02. We expect equipment shipment and the profitability to increase in the first quarter of 2014. We also anticipate our 2014 annual revenues well below 30% to 40% from 2013.

At this time, I will now turn the call over to Mike to provide detail of our financial improvements. Mike?

J. Michael Dodson

Thank you, Fusen. I would now like to discuss the detailed financial results for the second quarter of 2014. Revenue for the second quarter was $42 million, representing a decrease of 3% as compared with revenue of $43.2 million in the prior quarter. The system revenue mix during the second quarter represented just over 1/2 Etch systems and both RTP and strip systems coming in under 25%.

Compared to the prior quarter mix, the second quarter was a little lighter in Etch and RTP and heavier in strip. During the second quarter, the split between memory applications and foundry and logic applications was consistent with the prior quarter, with just under 1/2 of system revenues comprised of foundry and logic applications and the remainder representing memory applications, including DRAM, NAND and 3D NAND.

For the first half of the year, our top 3 customers represented just over 85% of our system revenues. The gross margin in the second quarter came in within the expected range of 32%, which is down 2 percentage points compared with the gross margin of 34% in the prior quarter. The sequential decrease in gross margin is primarily due to a less favorable revenue mix, with lower RTP revenue and higher strip revenue. Also putting pressure on the gross margins for the current quarter were installation and support cost for the multiple new product shipped in the last 2 quarters.

Looking forward to the third quarter, we expect our gross margin to improve to 34%, plus or minus 2 percentage points. Despite lower expected revenue levels, the system revenue mix is expected to be more favorable with a higher mix of RTP revenue in the third quarter.

Operating expenses, including $100,000 of restructuring costs, came in at $11.2 million in the second quarter, which represented a decrease of $700,000, or 5% from $11.9 million incurred in the prior quarter. Operating expenses represented 27% of revenue in the second quarter and are lower than the long-term operating target of 30% of revenue.

Despite certain headcount reductions and other cost savings measures implemented in the second quarter and carried over to the third quarter, we expect operating expenses to increase moderately in the third quarter to approximate first quarter levels. The expected increase is primarily headcount additions in key areas to support growth plans in the fourth quarter.

We would expect our operating expenses for the year to come in lower than the long-term model target of 30% of revenues. Related to income taxes, the provision for income taxes was a slight benefit of $30,000 in the second quarter compared to a provision for income taxes of $200,000 in the prior quarter. The prior quarter tax provision consisted primarily of foreign taxes.

Looking at the estimated tax provision for the remainder of 2014, we expect the provision to approximate $100,000 per quarter. Net income for the second quarter was $1.9 million, or a $0.03 per share -- or $0.03 per share compared to $2.5 million, or $0.04 per share, in the prior quarter. Our fully diluted weighted average share count for the second quarter was 74.7 million shares.

Now taking a look at our balance sheet. Including restricted cash, we ended the second quarter with working capital of $65.5 million, which increased $3.3 million from $62.2 million at the end of the prior quarter. The composition of working capital at the end of the second quarter included a decrease over the prior quarter in accounts receivable of $12.6 million, which was primarily due to a more balanced shipment and related cash collections schedule during the quarter. Inventory balances decreased slightly over the prior quarter, and accounts payable balances decreased by $9.4 million.

Cash balances at the end of the second quarter were $22.8 million and this includes restricted cash of $2.1 million. There were no borrowings under the line of credit at the end of the quarter. In summary, from a financial performance perspective, despite a slight sequential decrease in revenues, the results for the second quarter continued their sequential quarterly trend of profitability. Operating expenses came in at 27% of revenues and Mattson posted solid profitability with earnings per share of $0.03. On the balance sheet, we added to our working capital to end the quarter at $65.5 million, with cash of $22.8 million.

Now I will turn the call back to Fusen.

Fusen Ernie Chen

Thank you, Mike. Having complete full consecutive quarters of profitability, Mattson is focused on continuing this trend. Mattson has made great progress in expanding our market positions while at the same time, making difficult decisions to reduce operating cost. Currently, every Mattson's employee is focused on ensuring our customers' needs are met and that many people extend beyond their normal job duties. Without this level of focus and the dedication, Mattson would not have been able to achieve the turnaround it has met over the past 4 quarters, and I'm proud of everyone who worked for Mattson's continuous success.

We have now completed our business and the financial update, and are open for your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Edwin Mok with Needham & Company.

Y. Edwin Mok - Needham & Company, LLC, Research Division

So first question on the results and guidance. I just want to make sure I got the mix correct. I think you mentioned that strip was a bigger contributor for the June quarter, and then you expect it to revert back to greater share of RTP and Etch. Did I get that correctly? And can you give a rough level of how much of your revenue was strip in the June quarter?

J. Michael Dodson

Yes. In the second quarter, we had -- just over 50% was Etch business and just under 25% was RTP and strip. Which, compared to the prior quarter, Etch was a little lighter, and RTP was a little lighter and strip was a little heavier.

Y. Edwin Mok - Needham & Company, LLC, Research Division

I see. Great, great. And do you expect that trend to change in the September quarter, or maybe on the back half of this year?

J. Michael Dodson

Yes, we would expect the mix going into Q3 to have a higher mix of RTP in Q3 and less strip.

Y. Edwin Mok - Needham & Company, LLC, Research Division

I see. Great. And then your commentary about expectation for the December quarter to pick up, how much of that is on order -- on business that you guys have already seen orders, or any color you can provide about kind of what lead you to believe that your revenue, actually, based on your guidance, implies a pretty strong pickup even in the December quarter?

Fusen Ernie Chen

Edwin, I think we was in the period of customer capacity adjustment and, actually, because a lot have changed. But at this moment, I think our first quarter, we see better visibility. We have more discussions with customer. And at this moment, I think we see continued investment in advanced DRAM and advanced planer NAND. And we also anticipate the investment for 3D NAND and the sub-20-nanometer foundry capacity probably will come in, in early 2015. So overall, I think that we'll see a little bit better visibility compared to our past 2 quarters.

Y. Edwin Mok - Needham & Company, LLC, Research Division

Great, that's helpful. And then, one -- I just have 2 questions. First, you mentioned on the prepared remarks that Etch has been a great growth contributor and revenue contributor for the year. It seems like you have branched out in multiple areas, right? Is this -- how much of that is new application that you guys have won? And are you guys already maximizing the value you can extract from that? Or is this something that we expect to continue into '15 as more of those new applications turn to revenue? Any kind of color you can provide on that -- on Etch?

Fusen Ernie Chen

I think if you look at the Etch, it's also quite new for Mattson. And at the beginning, our market share came from, actually, planer NAND. But starting from Q3 last year, we started to see the revenue from the DRAM, and we see application of the DRAM increased for us. And we also, first time, become a process of record for 3D NAND. So overall, we believe we continue, try really hard to gain new application as we move forward.

Y. Edwin Mok - Needham & Company, LLC, Research Division

Okay. And then last question I have on Millios. You reiterated full year revenue at $25 million to $30 million, right? How much of that is -- if I remember, you guys had revenue in the first and the second quarter, one tool per quarter, right? So if we you're going to hit that number, you expect to kind of pick up in the back half, right? Is this something you guys already have, either orders or visibility into that? Or is that all back-end loaded in the fourth quarter? Or do you expect at least one extra tool to be recognized in the September quarter? Any color you can provide on that?

J. Michael Dodson

Yes. With the Millios, as we've discussed on the previous call, we had one revenue tool in Q1, one revenue tool in Q2. Our revenue in 2014 is $25 million to $30 million. With the visibility that we have today, we feel very confident in that target. When we look at the entire market making about $100 million, we've got about 25% market share this year in the Millios. And understanding that we've done one tool in Q1, one tool in Q2, of course, it's going to be higher in the back half. But with the visibility that we have today, we feel very comfortable with that target for the year.

Y. Edwin Mok - Needham & Company, LLC, Research Division

Okay. How much of that comes from -- I think, Fusen, in your prepared remarks, you talked about going after opportunity on the first and the second customer, which still kind of have an eval on your tool, right? How much of that is coming from turning the second customer from the eval into production and getting that qualified? And how much of that $25 million to $30 million come from customers beyond those 2 customers?

Fusen Ernie Chen

Well, Edwin, from the beginning of the year, we provided guidance between $25 million to $30 million, this is including everything. So I think, at this moment, we feel comfortable about the guidance we give. And we have carefully considered should we give the booking guidance, or should we give the shipment guidance, or should we give just the revenue guidance? And I think revenue guidance is very aggressive guidance. It's because the revenue is what customers pay for it, not only order it and ship it, it's ordered -- also they accept it and pay for it. So I think, at this moment, we just have a full year guidance and we feel like we are on track to achieve that. And this include everything, included our second customers.

Operator

Our next question comes from David Duley with Steelhead.

David Duley

Could you just talk a little bit more about the Etch opportunity? Maybe remind us how much Etch revenue you had in 2013, and whatever you kind of expect to happen in the second half of the year, what it might be in 2014? What, perhaps, the growth trajectory is for the overall business? And maybe talk about if the growth is going to come from current customers or new customers. Just more flavor there would be great.

Fusen Ernie Chen

Okay. So David, let me give a try. So of course, every company need to have an internal objective. And we also need to provide objective for financial community. So if you look at it from 2013 to this year, we gave a guidance that company revenue won't go up between 30% to 40%. And we really don't believe 40% every year is achievable. But internally, we have a stringent goal to have a 25% growth. I think if we're getting 25% to 30% growth every year, that will be a pretty good accomplishment for the company. So this year, I think if we finish with a 30% to 40% growth, and in 2 years, if we keep at this rate, 25% to 30%, we will see a company at a high 200s, close to 300s. So in the $300 million -- close to $300 million, I think we have a goal, maybe Etch in that time, 2016, will be about $120 million, with the strip, $30 million. So our plasma product, probably about $150 million. And then with RTP market size of $300 million conventional RTP, plus $100 million of millisecond anneal, that's about $400 million. And we anticipate to capture, say, $100 million. So that would be, adding together, would be like a $250 million end process spare part. That's always been a story, I think internally, we try to achieve.

David Duley

And final question from me is, could you just talk about the service opportunity? It seems like there's a substantial growth opportunity here, maybe just talk about how that's going to unfold and the timing?

J. Michael Dodson

Yes, we recently put a press release out about signing up 2 partners that help manufacture our legacy tools. And that's really an area that we look to be a revenue expansion area for Mattson. It's something that, if you look at a rule of thumb, equipment companies like to run 25% to 30% of your legacy, spares, service business. And Mattson historically has run about half of that. So we're looking at expanding our revenue opportunities there. Signing up these 2 third-parties to help on the legacy side, I think, is just evidence of one activity that we have in that area. But we're going to be really looking to leverage that further over the next couple of years to get more to the traditional 25% to 30% of our revenues' contribution from the legacy spares and service business.

David Duley

So is it that easy? It's it just focusing in on it, or -- it sounds great that you can double the revenue stream here, but what needs to be accomplished in order to get that business back at Mattson?

J. Michael Dodson

I think it's in -- what we're doing is we're increasing the focus. We are bringing in new people that have grown this business at similar companies in the industry. So I think we're doing things differently that will arrive at a different outcome.

Operator

Our next question comes from Timothy Arcuri with Cowen and Company.

Timothy M. Arcuri - Cowen and Company, LLC, Research Division

A couple of things. Fusen, relative to December, the up 30% or 40% for the year is obviously a huge range, given that you've already guided through the third calendar quarter. So I guess, maybe if I just take the middle of that range, that gets me to like a 42% number for December. Is there a tremendous amount of variability around that number? Or is that sort of a better way to think about it?

Fusen Ernie Chen

Tim, I think it's really early for Q4. And what we can tell you is that we have a bit of visibility. And we feel very optimistic fourth quarter would be better than third quarter. So if you look at the third quarter, we've guided 34% and the middle point is a breakeven. So it's got to be north of 34%. But how much north, I think still some factors will impact that. First example, if foundry is going to be part of that; if 3D NAND is going to be part of that. And we just feel like, probably at this moment, not unrealistic to assume we might come back to Q2 level. But things can still move. As you know, this is a period of time subject to a lot of customer adjustments. So I probably can only predict that. It is very difficult to come from Q4, but we do see better uptick in Q4.

Timothy M. Arcuri - Cowen and Company, LLC, Research Division

Right, okay. Great. And then, Fusen, you have quite good insights into 3D and pretty good visibility on what some of the manufacturing problems have been and how quickly those might get resolved. You were very early in, I think, highlighting some of the issues that ultimately came to bear during the first attempt to ramp that. Now it seems like some of those process issues have been worked through, and maybe the second phase of orders will be forthcoming here in the next quarter or 2. So can you maybe give an update in terms of where you see the 3D NAND ramp? And then I have a third question.

Fusen Ernie Chen

I really don't think I can speak for our customers' plan. But we do feel, after extensive effort from our customers, gradually, the year is picking up. So we feel optimistic in our -- the 3D NAND should start to have a second phase investment, including more customers in 2015. And the earliest, I think, we can see is very early 2015 and maybe, very small number in the first quarter. And again, I think it's a period of time. There are many moving parts, but we do feel better than a couple of months ago.

Timothy M. Arcuri - Cowen and Company, LLC, Research Division

Awesome, great. And then just, lastly, Fusen. There have been some investors who have been talking about a fire at one of your new MSA tools at a customer. And I just wanted to give you the chance to sort of address that head on.

Fusen Ernie Chen

So Tim, I think at this industry, the most important thing, I think, is really your capability that you really earn trust by your customers. And I can tell you, every system go to a production. Not many system's customer feel like they are perfect. We did went through a period of time for the productivity improvement. And what I can tell you is, I think customers are happy with our systems. And we increase our productivity, we increase our relationship, increase trust and the business will continue. And that is also Mattson's policy, we don't make a negative comment about our competitors. So what I can assure you is that not all the system is perfect, but our business is full-on [ph]. And we gave a guidance of $25 million to $30 million, I think that's the bottom line. The revenue is a final indicator, it's not a leading indicator. The leading indicator can be order, can be shipment. But I think our revenue is the true reflection of customers' confidence. And if we provide the revenue, I think this is a very aggressive guidance from Mattson.

Timothy M. Arcuri - Cowen and Company, LLC, Research Division

All right, great. I guess -- I mean that's the point, that you're -- that at the end of the day, you still have a lot of confidence that you're going to hit those targets.

Operator

Our next question comes from Graham Tanaka with Tanaka Capital.

Graham Yoshio Tanaka - Tanaka Capital Management, Inc.

I wonder if could embellish a little bit more if you could on what this means for market share, with you ramping with so much confidence? Which we really haven't heard a lot of. So why is it that you're able to have this kind of confidence? What areas in particular might provide upside or downside in next 3 quarters?

Fusen Ernie Chen

Graham, actually, I did not catch your question. Are you asking, in general, monthly shares or you are pointing to specific products?

Graham Yoshio Tanaka - Tanaka Capital Management, Inc.

Both. I was wondering if you're implying significant market share gains ramping. I'm wondering if you could tie that to your comments on specific product areas, and why you have so much confidence that you're going to be -- revenue gains and therefore, implying market share gains.

Fusen Ernie Chen

So actually, maybe, I'll answer you from a product point of view. Probably, 2 years ago, our Etch is almost negligible. And we started to see more significant revenue. In terms of Etch, we are seeing, probably, this year our finish close to our 40% to 50% of our system shipment. So this is really not a feeling we are getting market shares. I think we are seeing that. And in the millisecond anneal, I think there's some new products from beginning of the year. I think that we still have a goal of $25 million to $30 million, and we did not have this revenue before. So for sure, this is a market share gain for us. And we feel optimistic to accomplish this goal. And in conventional RTP, I think we do really establish a good foundation in the foundries. So if you add them together, I think overall, I think that explains this year we can increase 30% to 40% into the revenue.

Operator

Our next question comes from Christian Schwab with Craig-Hallum.

Christian D. Schwab - Craig-Hallum Capital Group LLC, Research Division

Great. If we attain, say, as the math suggests, as somebody brought up earlier, we get kind of to $42 million, plus or minus, in the December quarter. Would that be mix driven enough for gross margins to finally improve from the steady-state, lower 30s rate, more targeted at your 40% rate? I know on the last conference call, you guys are pretty confident that by the December quarter, gross margins could improve to 40%. But we're still struggling in the low-30s for one reason or another.

J. Michael Dodson

The -- when we look at -- what we've done in the last couple of quarters, we've been 34% and 32%. We've guided to 34%, plus or minus 2 points, in Q3, and that's really being helped by a good mix of RTP, even though the revenue level is higher -- is lower quarter-over-quarter. When we look out, if you take the midpoint of the calculation and it says 42%, we're back kind of in the range of Q1 and Q2. A good mix, I think, will help the margins there. But I don't know that we would be running hard enough and high enough a level to be approaching the low end of our long-term model, which is 40% to 45%. But I think with -- to be in the mid to high 30s, at that level, with a very good mix, is realistic.

Christian D. Schwab - Craig-Hallum Capital Group LLC, Research Division

Great. As we look at 2015, and I know that it's extremely difficult to predict and look out, but you have a very concentrated portfolio of products that you ship to a very concentrated set of customers. And there always consistently seems to be ebb and flow in buying patterns today, on the front end semi-cap equipment space. Meaning, we spend a bunch of money, and then we pause and every customer is doing that and every product is doing that. Do you see a consistent path with your products as you look out from talking to your customers in 2015. We think that everything can kind of hit on all cylinders for a period of time. CapEx spending, in aggregate, has been $30 billion, plus or minus, for 5 years, we've just kind of given up on the cyclicality of it. But intra-quarter -- quarter-to-quarter, it's very volatile. And I'm just wondering if, for evaluation, for a company of your size, will we be able to hit on all 3 cylinders next year, or is it just way too difficult to predict?

Fusen Ernie Chen

Well, Christian, I think yes, we do have a very concentrated customer base. But we're also trying very hard to diversify our customer base. And I think we've seen maybe very early indicators we are making progress. But talking about the market next year, we don't pretend to be expert in predicting the market. We are a smaller company, but all we can see is the memory HD is quite strong, if you see the NAND and you see the DRAM demand in the mobility world. We do believe the DRAM investment and the NAND will continue. And the NAND, I think we also see is a planer NAND, I'd go to 1x, 1y and the 1g, and 3D NAND, not only 1 customer making comment on the investment. There will be others to follow. So foundry this year, probably, spending is not as high as expected, but we do believe sub-20-nanometer capacity addition will come next years. So with all this adding together, we feel -- and let me say this again, we are not market, the best predictor. But we feel optimistic about the 2015 at this moment.

Operator

[Operator Instructions] We have a question from Craig Ellis with B. Riley.

Craig A. Ellis - B. Riley Caris, Research Division

I wanted to ask one that was a little bit between Tim's question and the follow-on question that relates to the fourth calendar quarter. Fusen, when you look out, and I understand the visibility is somewhat low and things have been in flux, if you will, as we've gone through the year. But in your portfolio and across your end markets, where do you have the highest confidence for growth looking out that far?

Fusen Ernie Chen

Well, I think our Etch is actually concentrated on the memory market. We do believe that we have good feeling about our Etch for the first quarter. We also feel comfortable about the initial pilot purchase for sub-20-nanometer foundry/logic. And we also have a good feeling about our millisecond anneal products. So that would be the areas we feel good about ourself. Of course, strip will continue come in as a cash cow for this company. And at a certain point, I think a volume of sub-20-nanometer capacity is going to come. And at that time, maybe on next few quarter and, hopefully, we will see our Helios XP will also contribute to a much bigger extent.

Operator

And we show no other questions in queue. I'll turn it back to Fusen Chen for closing remarks.

Fusen Ernie Chen

Thank you for joining us for our second quarter conference call. We look forward to updating you on our progress on our next quarter's conference call. Thank you again.

Operator

Ladies and gentlemen, thanks for participating in today's program. This concludes the program. You may all disconnect.

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