Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

InvenSense Inc. (NYSE:INVN)

Q1 2015 Earnings Conference Call

July 29, 2014 4:30 PM ET

Executives

Leslie Green – IR

Behrooz Abdi – President and CEO

Alan Krock – CFO

Analysts

Mark McKechnie – Evercore Partners

Vernon Essi – Needham & Company

Tristan Gerra – Robert W. Baird

John Vinh – Pacific Crest Equities

Ruben Roy – Piper Jaffray

Mark Delaney – Goldman Sachs

Richard Shannon – Craig-Hallum Capital Group

Operator

Good day, ladies and gentlemen, and welcome to the Q1 2015 InvenSense, Inc. Earnings Conference Call. My name is Whitley, and I’ll be your operator for today. (Operator Instructions) As a reminder, this call is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Ms. Leslie Green with Investor Relations for InvenSense. Please proceed.

Leslie Green

Thank you, Whitley, and good afternoon, everyone. I would like to begin our call with a Safe Harbor disclaimer related to forward-looking statements.

Statements in this conference call that are not historical are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally in the future tense and are preceded by words such as will, expect, anticipate or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, which can be significantly impacted by product deals and inventory-carrying values, expense or other financial items discussed in this conference call, including the expansion of our customer design pipeline and the potential for continued gain in our share of the mobile, computing and consumer segments.

Investors are cautioned that all forward-looking statements involve risks and uncertainty that could cause actual results to differ from those currently anticipated, due to a number of factors, including, without limitation, the continued adoption of microphone, MotionTracking and motion sensing as an interface in customer and consumer electronics products, our achievement of design wins, consumer acceptance of customers’ products that incorporate our solutions, intense competition in our industry, our dependence on a limited number of customers who are a substantial portion of our revenues, our lack of long-term supply contracts and dependence upon limited source of supply, our ability to continue to develop and introduce and enhance products on a timely basis, and potential decreases in average selling prices for our products, as well as changes in economic conditions and other risk factors discussed in documents filed by us with the Securities and Exchange Commission from time to time.

Copies of InvenSense’s SEC filings are posted on the company’s website and are therefore available from the company without charge. Forward-looking statements are made as of the date of the conference call and the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

With that, let me introduce Behrooz Abdi, President and CEO. Behrooz?

Behrooz Abdi

Thank you, Leslie, and good afternoon, everyone. Welcome to our fiscal 2014 first quarter call. I am pleased to report that in the June quarter, the InvenSense team achieved higher than our stated revenue outlook of $63 million to $66 million with revenue for the quarter of $66.7 million.

We continue to experience strength in our China business with both our Six-Axis MotionTracking Solutions and our Two-Axis Optical Image Stabilization or OIS product contributing meaningfully to the top-line.

In addition, we saw an increase contribution across all of our key geographic regions as new flagship products ramped into production such as Samsung’s Galaxy S5 and LG’s G3. Key OEMs with whom we now have gained more share.

Our Six-Axis product family including the MPU-6500 and MPU-6515 Android K optimized products from price more than 70% of the 100 shipments last quarter.

We also started ramping to volume production, our third generation Six-Axis MotionTracking SoC, iP2600 or the M2 series. Several existing and new customers. This ultra-low power SoC platform combines our most advanced gyro and accelerometer sensors with our third generation digital motion processor running our industry leading motion app software.

The solution has been widely designed into a number of mobile gaming and wearable products which are now in the ramp phase.

As we discussed at our last quarterly earnings call, one of the key areas of R&D investment in recent quarters have been the support of extensive new customer qualification activities. Furthermore, we discuss with you in April, our strategic decision to build inventory mostly in wafer form in our core products such as MPU-6500 and MPU-6515.

I am pleased to report that these operational investments have resulted in successfully passing several customer qualifications and these customers are now ramping into production with significant volume forecast for the remainder of fiscal 2015.

In the mobile market, we’re excited to report that there are number – there are multiple smartphones that include both our Six-Axis MotionTracking solution as well as our Two-Axis OIS products. These products include the LG G3 and Amazon Fire smartphones, as well as a number of yet to be announced phones preparing to launch across multiple geographies in the coming months.

Camera image quality is an increasingly key differentiator in the smartphones where our industry leading OIS product enable additional aperture control thus yielding sharper and brighter images.

Our fourth generation OIS devices have again raised the performance bar to meet the demands of top-tier DSLR camera OEMs where we now have been designed into several product lines. Our strategy of delivering complete MotionTracking solutions including SoC, and embedded software was validated once again this past quarter as a growing number of customers opted for higher value M2 family of SoCs taking for advantage of our DMP algorithms and motion apps.

These customers are increasing the challenging with delivering more complex motion and other sensor based features in an ever decreasing time to market. This is especially true in China where we observed an accelerated transition towards feature rich smartphones with increasing gyro attach rates.

Earlier this quarter, we achieved a significant milestone in our transition to a platform solution company with the announcement of the acquisition of two leading sensor algorithm and software companies, Movea and Trusted Positioning, Inc. Movea is a leading provider of ultra-low power motion and data fusion software platform and Trusted Positioning is a leader in sensor based location technology.

The location based features these acquisitions will accelerate such as outdoor pedestrian navigation, asset tracking and indoor navigation are all examples of the higher value applications and services that will continue to drive the adoption of MotionTracking throughout the application space.

We are excited to welcome these two higher caliber teams into InvenSense as they allow us to scale our R&D and deliver higher value solutions to our customers, ecosystem partners and the broader development community. I am pleased to report that the acquisition of Movea is now closed and we continue to expect to close the acquisition of Trusted Positioning this quarter.

In addition, to gaining significant share in our core mobile market, we’re excited to see increase design traction in other markets with increasing demand for low power precision MotionTracking including wearable devices, sports equipment, gaming controllers, motion based TV remote controllers and consumer drones.

Also our automatic activity recognition software suite is gaining strong traction across a diverse set of consumer mobile fitness friends and big data companies. We are working to bring to market and monetize a new generation of wearable products and related services. These products and services continue to present us with a number of new and diverse growth vectors in the coming years.

Finally, on the audio side, we continue to make significant progress in developing and bringing to market high performance low power microphone technology and products. As we have articulated in the past, we view audio technology as being synergistic with MotionTracking enabling skills modern more context-aware applications and services. As such audio is coming into focus as a key strategic vector for InvenSense adding higher value content at our existing and new customers.

In summary, the fiscal 2015 first quarter saw the culmination of several quarters of strategic actions to transform InvenSense to a motion tracking system solutions company with increased operational scale capable of supplying significant volumes and what could be otherwise disruptive growth. With these investments in place and as we enter a seasonally strong cycle in our fiscal year, we are excited and ready to take advantage of the opportunities ahead to grow our business and return value to our shareholders.

I will now turn the call over to Alan for more details on the fiscal Q1 2015 financial results. I will then provide an update on our products and other development and Alan will discuss the second quarter fiscal 2015 financial outlook.

Alan Krock

Thank you, Behrooz. Please note that all financial results will be discussed on a Generally Accepted Accounting Principle, or GAAP, basis and additionally, the company provides certain non-GAAP financial information that excludes stock-based compensation expense and other non-GAAP financial adjustments, such as patent litigation and settlement costs, purchase accounting-related cost, cumulative benefits associated with changes in our estimated effective tax rate and prior year severance costs. The company uses these non-GAAP measures in its own financial and operational decision-making processes. Further, the company believes that these non-GAAP measures offer an important analytical tool to help investors understand the company’s core operating results and trends and to facilitate comparability with the operating results of other companies that provide similar non-GAAP measures. Realizing that some analysts wish to track our financial information on a GAAP and non-GAAP basis, I will provide information that includes both financial measures.

For the first quarter of fiscal 2015 ended June 2014, net revenue was $66.7 million, an increase of 19% from the first quarter of fiscal 2014, and an increase of 13% sequentially from the fourth fiscal quarter of 2014. Our customer segment splits for the first quarter of fiscal 2015 were: Smartphones and tablets 80%; gaming 1%; and all other segments including imaging 19%. For fiscal Q1, our 10% customers were Samsung Electronics 30%; LG Electronics 12% and Xiaomi, Inc. 10%.

Gross margin for the first fiscal quarter of 2015 on a non-GAAP basis was 50%, excluding stock compensation expenses, the amortization of acquired intangibles and the gross up of MEMS microphone inventories part from Analog Devices. Including these costs on a GAAP basis, our gross margin was 47%. For the comparable period in fiscal 2014, gross margin was approximately 52% on a GAAP basis and 53% on a non-GAAP basis.

Turning to operating expenses. On a GAAP basis, our total Q1 fiscal year ‘15 operating expenses were $33.3 million for the quarter versus $31.6 million in the immediate prior quarter. Excluding stock compensation, nonrecurring acquisition-related expenses and litigation expenses, operating expenses were $24.3 million on a non-GAAP basis versus $21.9 million in the prior quarter.

R&D expenses were $19.4 million, or 29.1% of revenue, for fiscal Q1 on a GAAP basis, as compared with $16.0 million, or 27.1 % of revenue in the prior quarter. Excluding stock compensation and nonrecurring acquisition-related expenses, R&D expenses were $15.7 million, or 23.5% of revenue, on a non-GAAP basis in fiscal Q1 versus $13.5 million, or 22.9% of revenue in the prior quarter.

SG&A expenses were $13.9 million, or 20.8% of revenue in fiscal Q1, as compared with $15.6 million, or 26.4% of revenue in immediately prior quarter. Excluding stock compensation, nonrecurring, acquisition-related expenses and litigation expenses, SG&A costs were $8.6 million or 12.8% of revenue on a non-GAAP basis versus $8.3 million or 14.8% of revenue in the prior quarter.

The changes in absolute dollar OpEx spend to comparable current and prior year periods can be attributed to the following: For R&D, increased investment in research and development headcount and related supporting equipment and supplies in order to support an expanded roadmap; strategic product development initiatives; extensive ongoing product and customer qualification activities; and the addition since November 1, 2013 of audio sensor-related engineering resources associated with the acquired MEMS microphone product line.

Additions to SG&A are primarily sales and headcount driven to address the company’s substantial global customer opportunity, including the growth of sales channels in geographies like Greater China or adoption of MotionTracking and audio solutions by major consumer electronics customers represent a significant opportunity for the company and expansion of our marketing efforts targeting new opportunities.

Stock-based compensation included in the June quarter for fiscal Q1 was $7.7 million in total versus $5.4 million in the immediately prior quarter and $2.8 million for Q1 of fiscal 2014, included in our GAAP Q1 fiscal ‘15 results is a one-time additional cost in the amount of $1.2 million representing additional stock-based compensation recorded in Q1 fiscal ‘15 associated with a change in method of calculating the estimated forfeiture of equity incentives brought about by a scheduled change in equity related systems software.

Operating margins on a non-GAAP basis excluding stock-based compensation nonrecurring acquisition-related expense and litigation expenses was 13%. On a GAAP basis, operating margins were a negative 3% this quarter versus a negative 7% in the immediately prior quarter. Our operating model non-GAAP operating margin target is in the mid to high 20% range but will vary primarily based upon sales seasonality, average selling prices and the degree to which we manage manufacturing costs and operating expenses.

On a non-GAAP basis, our income tax provision was 15% of income before tax for fiscal Q1 on a GAAP basis our income tax provision included discrete items resulting in a nominal tax amount. On a non-GAAP basis net income for the first quarter of fiscal 2015 was $7 million compared with net income of $6 million in the fiscal fourth quarter of 2014 and a net income of $12.7 million for the first quarter of fiscal year 2014. On a GAAP basis net loss for the first quarter of fiscal 2015 was $4.8 million compared with a net loss of $5.6 million in the fourth quarter of fiscal 2014 and a net income of $10.3 million for the first quarter of fiscal year 2014.

On a non-GAAP basis, EPS for the first quarter of fiscal 2015 was $0.08, fully diluted GAAP EPS was a loss of $0.05 for Q1 fiscal year 2015 primarily reflecting strategic acquisition costs, litigation related legal costs and stock compensation amounts based on fully diluted shares of $88.3 million.

Our cash and investment balance remained flat at $246 million in the first quarter of fiscal year 2015. Cash generated from operations in the first fiscal quarter was $6.7 million. Our net day sales outstanding were 50 days improved from 56 days in the prior quarter due primarily to the timing of customer shipments and receipt of customer payments. As of the end of Q1 fiscal 2015, our total inventory stood at $77.5 million versus $73 million at the end of the prior quarter.

With these remarks, I will turn the call back to Behrooz Abdi.

Behrooz Abdi

Thanks Alan.

Turning our attention to the fiscal second quarter, we’re excited to be entering a period of significant growth. We are ramping into production at a number of new and existing customers in every region which will bring us greater diversification and scale. While we expect volume shipments of our Six-Axis MotionTracking SoCs to contribute to the majority of this growth, we also expect to achieve greater volume shipments across the majority of our motion products including Two-Axis OIS and Three-Axis discrete gyroscopes.

In the current quarter, we expect to see our Six-Axis MotionTracking SoC product line continue to comprise more than 70% of our unit and revenue shipments with our second generation Six-Axis MotionTracking SoCs, the MPU-6500 and MPU-6515 continuing to make up the majority of our shipments.

We also expect our third generation Six-Axis SoC to contribute meaningfully to revenues at several top tier customers. Our third generation ultra-low power MotionTracking SoC enables always on MotionTracking features with self-calibration and integrated SensorFusion and is being rapidly and widely adopted across the majority of mobile customers.

Having strategically build the inventory ahead of anticipated demand for our second generation Six-Axis products in previous quarters, we are now able to meet significant new customer requirements even while we continue to add manufacturing capacity and ramp into production, our third generation Six-Axis products. While we expect gross margins to some of our top tier customers to remain under pressure as a result of high volume pricing as well as lower initial manufacturing yields as we ramp new products into production. We believe our higher value systems solutions combined with our aggressive manufacturing cost reductions will keep our overall gross margins at consistent levels.

We also look forward to increasing our silicon content as several customers who in addition to designing in our Six-Axis SoCs are adopting OIS with an accelerated pace as they try to take advantage of improved camera quality to differentiate their products.

Geographically, we expect our Korea business to remain strong as an increase in our share and content including OIS should offset any weakness our OEM customers experience in their end markets. We remain excited about our China business as an increase in gyro attach rates continues to drive demand for Six-Axis MotionTracking solutions as well as OIS products in mid and high-end smartphones.

We are especially pleased to see our shipments and revenue grow in North America, growing this quarter to be a substantial portion of our total business driven primarily by significant share gain at several existing and new customers. While the great majority of our global growth is in the smartphone category. We also expect to ramp into volume with a greater number of top brand wearable device OEMs as the attach rates of gyro continues to increase due to demand for always on activity tracking and our advanced algorithms.

We’re excited about this trend as our ultra-low power Six-Axis and Nine-Axis SoCs along with our proprietary automatic activity recognition software are uniquely suited for this growing market. These are exciting chance for investments. Our strategy of high-performance sensor integration and tidily coupled software has been validated as we capture additional value for enabling increased performance and shorter time to market for our customers.

Our sensor and software roadmap is more compelling than ever and our customer traction is the strongest it has ever been. Our fiscal year 2015 is off to a great start as we look forward to leveraging our additional scale and customer diversity towards improving our operating margin while investing in differentiated R&D.

At this point, I will turn the call back over to Alan to discuss our financial outlook for the second fiscal quarter and then we will open up the call for your questions.

Alan Krock

Thank you, Behrooz. Now to conclude, I’ll provide financial outlook for the second quarter of our fiscal 2015 and an update of our year-over-year fiscal 2015 growth estimates.

As you have heard from us before our end markets are seasonally slower during the first half of the calendar year and particular in the consumer electronics gaming and tablet segments. As such our fiscal Q4 ending March and Q1 ending June are generally our slowest revenue quarters with revenue opportunities seasonally improving in the quarters ended September and December.

We see continuing progress and strength in adoption of our products across customers and therefore significant continuing market share gains in mobile market due to our products higher performance and attractive features and size. We see this progress at a number of major customers including some representing new sizable market share gains at customers headquartered in both the United States and China and we believe our products strength that all these customers offers an important opportunity to continue our unit shipment and revenue growth in fiscal periods beyond the current year.

Considering these factors we expect fiscal ‘15 Q2 revenue to be in a range of $86 million to $91 million. To support this Q2 fiscal ‘15 revenue outlook we currently have backlog in place representing a majority of this total current quarter revenue target. These Q2 fiscal year ‘15 outlook estimates reflect only a partial quarter estimate of the related revenue opportunities as these new product opportunities with both United States based and China based OEMs are only expected to be in production for part of our fiscal Q2. Therefore, these new product opportunities can contribute significant additional amounts of revenue when in production for our entire fiscal Q3 period.

We expect sales at our largest customer Samsung Electronics to represent mid 20% to 30% of this target reflecting strength and applications where we have existing designs and are participating and expected new customer design launches. Additionally, we expect that LG will continue to be a 10% September quarter customer as in the June quarter potentially together with at least one China based OEM depending upon the level of total Q2 revenue achieved and that we will have at least one new 10% customer as of the September and future quarters.

As mentioned some of the opportunities in the United States and China represent near-term significant market share gains and others represent new inertial sensor, especially gyroscope, attach rate opportunities. We also expect new mobile market sensor applications, such as microphones and OIS stabilization, to contribute to future revenue growth, albeit with somewhat uncertain timing.

Product mix for the current quarter continues to favor our highest volume mobile customers, and we should generate a total gross margin in line with recent levels. We believe that on a GAAP basis, our Q2 fiscal ‘15 gross margin will be in a range around 48%, continuing to now modestly reflect the impact of additional cost of amortization of intangibles acquired. On a non-GAAP basis, Q2 fiscal ‘15 gross margin is expected to be consistent with recent past quarters that is in a range around 50%. In future quarters, lower cost of products, additional production volumes and improving product yields should contribute to a favorable impact on our gross margin. Therefore, our target non-GAAP gross margin remains unchanged.

In Q2, on a non-GAAP basis, we expect operating expenses of $27.3 million comprising of $17.5 million for R&D and $9.8 million for SG&A. On a GAAP basis, we expect operating expenses of approximately $35.2 million, made up of $20.7 million for R&D and $14.5 million for SG&A. We expect a current quarter operating margin in a range around approximately 20% on a non-GAAP basis and in a potential range around 8% on a GAAP basis. All operating expense expectations include the anticipated impacts of planned company engineering headcount additions and the addition of Movea related personnel since that transactions closing and TPI related personnel before quarters end.

On an expected fully-diluted share count of approximately 92.4 million shares. We expect a non-GAAP tax rate of approximately 15%, and therefore earnings per share of approximately $0.15 to $0.16 per share on a non-GAAP basis, excluding litigation expenses acquired, acquisition-related expenses, convertible note accretion expense and stock compensation expense. We expect a GAAP income tax rate in the range of 13% to 15%, and therefore GAAP basis net income per share in a range around $0.05 per share, primarily depending upon levels of revenue achieved.

With respect to our fiscal year 2015 business opportunity, we believe that our markets continue to offer significant opportunity for growth. Historically, net unit sales growth has been approximately 50% or more per year, with net average selling price erosion partially offsetting the effect of unit sales growth.

Given the dynamics of the markets we serve and considering business outlook factors included in this call, we continue to believe that for our fiscal year 2015, we are well-positioned to achieve a year-over-year revenue growth rate at or above the high end of the 25% to 35% range provided in the previous financial conference call. We are currently reviewing customer forecast for Q3 of our fiscal year ‘15 and considering what the full quarter run rate potential for new OEM programs in that quarter can be and therefore we will provide further updates with respect to Q3 revenue outlook during our next financial results conference call. This opportunity excludes the potential for further accelerated growth in new market opportunities discussed, such as audio and consumer electronics wearable devices.

We expect our spending and margin opportunities for our fiscal year ‘15. We continue to expect gross margins generally consistent with our recent past in fiscal ‘14 on a non-GAAP basis and on a GAAP basis in a range around approximately 48%.

From Q1 fiscal 2015 levels, we expect that initial increase in quarterly operating expenses, with the addition of planned engineering headcount increases and the acquisitions of Movea and TPI personnel followed by modest increases in the following quarters. We expect full year R&D expense in FY15 on a non-GAAP basis to be approximately in a range around 17% of our fiscal year 2015 sales, and SG&A on a non-GAAP basis approximating a range around 10% of fiscal year 2015 sales. On a GAAP basis, we expect R&D expenses to proximate a range around 21% of fiscal year 2015 sales and SG&A on a GAAP basis to proximate in a range around 15% of fiscal year 2015 sales.

With respect to estimated fiscal year 2015 GAAP to non-GAAP reconciling items, stock-based compensation is the largest difference between the measures and is estimated at approximately $32 million. Convertible note accretion is approximately $8 million. Additionally, the amortization of purchased intangibles is expected to approximate $7 million. Other expenses are expected to be approximately $600,000 per quarter on a non-GAAP basis and $2.5 million on a GAAP basis which includes our convertible note accretion.

For capital spending in fiscal 2015 we expect investment and property, plant and equipment of approximately $20 million. For fiscal 2015 we expect the fully diluted share count of approximately $93 million shares, we expect the non-GAAP tax rate of approximately 15% and full year GAAP tax rate of approximately 13% and therefore earnings per share in a range around $0.80 per share on a non-GAAP basis and on a GAAP basis we expect earnings per share in a range around $0.35 per share. Of course both earnings estimate exclude any foreseen events or activities which could rise in the future.

For those of you wishing to estimate our earnings before income taxes, depreciation and amortization relevant estimates are, interest including no accretion $11 million, income taxes $4.8 million, depreciation and amortization $9.2 million, amortization of purchased intangibles $7 million and if relevant to some stock compensation expense $32 million. This completes our remarks with respect to the earnings and business aspects of this call.

With that I’d like to turn to the question-and-answer session. Thank you.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Mark McKechnie of Evercore Partners. Please proceed.

Mark McKechnie – Evercore Partners

Great, thanks. And it sounds like a lot of good activity happening here, some double play wins, motion sensor and OIS, I wanted to focus in a bit on the new customer here in North America trying to get a sense, is this going to be would you expect that to be Six-Axis sensor and is this a new product or is that shipping from inventory. And then also why you’re on that, if you can talk a little about what you think your positioning there? Is it sole source type arrangement or second source? That’s it. Thanks.

Behrooz Abdi

Yeah. Let me take a stab at that. We believe that in terms of shares in the initial phase at least we’re sole source but you never know how those things go in. Again it’s a several customers in North America just to be clear that we’re sole source and we anticipate that at least through this quarter and next will be sole source.

In terms of the product line, for the most part it’s Six-Axis but there is also some Three-Axis in there, this great jar have spoken some product lines but the great majority of Six-Axis and it’s our latest generation, it’s third generation of Six-Axis.

Mark McKechnie – Evercore Partners

Yeah, so that’s not – so that’s a new product, not from inventory. That’s kind of new production.

Behrooz Abdi

That’s correct. These are the new products that are going into production now and they have been going into production part of last quarter. The parts from inventory or the parts that we built inventory on the Six-Axis are the MPU-6500 and 6515 which is the highest volume product that’s running in what I would call steady state production now at various customers.

Mark McKechnie – Evercore Partners

Got you. Okay. And then one last question I don’t know if Alan if you can answer this about any commentary on units and ASP as a whole either absolute terms or how they trended quarter-on-quarter? Thanks.

Alan Krock

Sure. There is no significant difference in trends quarter-on-quarter. I know many investors do look at the SEC filings and so forth which include information on that. So, generally percentage of Six-Axis, average selling price of Six-Axis product steps we take to manufacture or manage manufacturing cost and so forth generally very consistent trends with recent past therefore generating a very consistent sort of gross margin level with the last couple quarters as well.

Mark McKechnie – Evercore Partners

Okay, great. I’ll turn it over. Thanks guys and congrats on a solid quarter and outlook.

Operator

Your next question comes from the line of Vernon Essi with Needham & Company. Please proceed.

Vernon Essi – Needham & Company

Thank you very much and congrats on the newer customers. Wanted to dive in a little bit more on the R&D and Alan you gave a lot of detail there on a go forward basis. But obviously the line of scaling up relative I think to some of these newer ramps that you have as well as the algorithm purchases. I am trying to get a sense like further out what kind of operating leverage we can get? Are you going to continue to be looking at similar assets overtime and we’ll see this R&D tend to scale with revenue or is there a point when we’ll start to see it kind of plateau if you will relative to the sales growth?

Alan Krock

So, yeah in the outlook provided Vernon and thanks for the question. I talked to a general gradual growth from here forward based on everything that’s planned and known today of course things can change acquisition opportunities can present themselves and so forth but there is nothing in the works at this time and generally what we have is just a plan to gradually supplement engineering resources across our engineering opportunities in MEMS in electronics and software and so forth.

So, you would see sort of a plan for very modest growth rate from here forward and relative to potential leverage, yes, you would expect to see significant potential sequential leverage as mentioned in the revenue outlook really just have a partial quarter here present in outlook given for the September quarter therefore the December quarter with some of these new programs that multiple customers running, you would expect to see for the entire quarter further large potential step up and revenue opportunity with no nothing major plan relatively to OpEx add so you should see relative significant sequential growth in leverage.

Behrooz Abdi

So, let me add a little bit of qualitative color here. For the past year, year and a half, we’ve been really transforming the company and as I’ve articulated that various conferences and earnings call, we really feel that with these software and algorithms what you can really do is take more control for a destiny in terms of the overall system solutions and overall system solution means sensor, buzz sensor hub, plus apps processor not necessarily integrating physically integrating those but having an architectural play where you can influence how the sensors work together and which and how they work on the apps spots around which sensor or hub don’t go with. And that really required us to scale of our software algorithm and we were faced a couple of really great opportunities here that we took advantage of.

Having said that I believe that we’re pretty much there now on the software algorithm. I don’t think we need really do much with that. That’s one of the largest motion-based motion tracking software algorithm and sensor software algorithms in the industry now. And the other investment that we made was around microphone and again audio and motion we felt and feel even more that we can offer something very compelling to the market and that drove that investment.

So, other net, I believe that we are really at a place now that we have the scale from our R&D, from SG&A and the market response, our customer response has been very positive as reflected in market share. And that allows us to now really step back and add very incremental resources and not do anything in substantial with that anymore and really give the leverage of the business model.

Vernon Essi – Needham & Company

Sure and appreciate that. And just to follow one, is there a timeline that you have for I mean I guess as you invest in these features and this platform approach with your customers, is the thought process that this is going to obviously mitigate your ASP declines? I am assuming we’re not really seeing any impact of that near term but is this something that you think can suppress that as a longer trend to your business and you’re always going to have ASP declines but is that something we should be thinking about and how we look at this longer term?

Behrooz Abdi

We are indeed seeing it in some segments in the market. We have the improved points where customers who would have normally taken a raw sensor or taken in a more sophisticated chip from us and so I would say that it’s in the worst in the next three to four quarters, you will see more meaningful contribution from that.

What you do see from the impact what we’ve done is really market share up to this point. So, really great high-performance sensors plus some of the software algorithms has allowed us to really get the market share. And in some instances we do get an up sell on the pricing that we had not seen before.

Vernon Essi – Needham & Company

Okay. Thank you.

Operator

Your next question comes from the line of Tristan Gerra with R. W. Baird. Please proceed.

Tristan Gerra – Robert W. Baird

Hi. Good afternoon. You mentioned on the call significant progress the [bluffing] and bringing your solutions to market, could you elaborate a little bit on that? Could you talk about potential design wins and when – what is the timeline where we can expect some contributions on those products?

Behrooz Abdi

Yeah. On the audio Tristan we’re really following the same line that we did with motion which is start with a really great performing microphone and performance has many vectors to that and as you know in microphone including power and size. And we do have some design wins and they are starting to come in but at this point I am not prepared to really highlight any key design wins until the products are out there. So, I think that again it remains an investment for us and you will see in the next few quarters you will see more meaningful contribution from that. That’s what we expect.

Tristan Gerra – Robert W. Baird

Okay. And then any update on the Seven-Axis and the potential for improvement in next year, any feedback from customers relative to last quarter in terms of interest level and what that could mean as a percent of the mix next year?

Behrooz Abdi

Great question. We’re very excited about the Seven-Axis product and as I talked about it in the past, we expect to start sampling second half of this year, calendar year which we are doing. There is tremendous interest from customers. I think in the high end phones we do see a discrete pressure sensor nowadays and that’s one opportunity for us to integrate. And also going forward, one of the biggest used cases for Seven-Axis is navigation. And again that’s – now that we have more of a sensor-based software algorithm around navigation, it allows us to drive that a used case model as we go forward.

Tristan Gerra – Robert W. Baird

Great. Thank you.

Operator

Your next question comes from the line of John Vinh with Pacific Crest Equities. Please proceed.

John Vinh – Pacific Crest Equities

Hi. Thanks for taking my question. My first question as I had a follow up on OIS and you talked a lot more about OIS adoption this call and on the previous calls. Can you clarify whether your OIS wins will typically have one or multiple gyros in them.

Behrooz Abdi

Typically they have multiple – typically there is an OIS that’s in a separate camera module. Now, there are customers who might do what some of the phones, early phones did about two, three or four years ago when they first came out they try to do with Six-Axis, the main gyro on the Six-Axis and there might be customers who might want to do that but for the majority of them we see a dedicated Two-Axis gyro. With the Six-Axis gyro typically you can potentially with a lot of work get the performance but you may not get as much performance as you would get with a dedicated Two-Axis gyro because the latency and also the aperture control that comes with that. So we have a mix but for the most part customers are using a dedicated gyro.

John Vinh – Pacific Crest Equities

Got it. And can you remind us how do we think about the ASPs of the Two-Axis versus Six-Axis gyros?

Behrooz Abdi

Typically the ASPs Six-Axis we’ve always talked about of $1 range and with the Two-Axis it’s $0.60 to $0.80 range.

John Vinh – Pacific Crest Equities

Got it, okay. And then my last question is, obviously you talked about the September quarter and we have a partial run rate, you’ve got visibility into the December quarter but it seems like there is a little bit of uncertainty there. You did indicate that you expect to be sole source in your North America customer, can you clarify what the puts and takes on the December quarter is it just a customer forecast and demand issue or is there a possibility that you could be dual source during the life cycle of this product going forward?

Alan Krock

It’s Alan speaking. Yeah, the puts and takes on the outlook given are exactly that, I am trying to assess what the running rate opportunity at these new customers in China and North America can be. We tend to give outlook, very specific outlook 90 days at a time and therefore we just need the additional time between now and the end of this quarter and we give our outlooks next to really sort of settle out and how to interpret the forecasts that we look out in setting our numbers.

Yeah, John, I mean we had a lot of conversations back and forth on the second sourcing and the chances of that it’s really the customer’s decision. I really just cannot comment on awarding of share and or what can happen or changes that are completely with any particular customers sphere of control. Obviously we would not want that but again that’s completely up to the customer.

John Vinh – Pacific Crest Equities

Okay. Thank you.

Operator

Your next question comes from the line of Ruben Roy with Piper Jaffray. Please proceed.

Ruben Roy – Piper Jaffray

Thanks. I wanted to just follow up on John’s question. Alan and I guess Behrooz as well around the discussion of sole sourcing versus dual sourcing as it relates to Six-Axis parts versus Three-Axis parts and I think you guys mentioned that some of the North American wins are based on the latest generation Six-Axis parts which I think in general have higher level of your algorithms involved.

So, I guess the question is, is this a discussion of dual sourcing potential on both Six-Axis as well as Three-Axis and then how does the latest generation M2 play into that discussion? And then I guess we can start there, please. Thank you.

Alan Krock

So, on the question of sourcing both sets products Three-Axis and Six-Axis are that we offer are market proven across multiple customers many have sold tens or hundreds or millions of units and so in both categories you ask about we offer a very market proven solution.

As you know, historically in Three-Axis discrete gyros we’ve had competition in the form of primarily STMicro and Bosch who offer also reasonably market proven discrete gyroscope solutions. So, there we’re dealing in an environment of multiple sources of decent quality qualified market proven products and it can be a little more uncertain as to who will obtain what share in any particular customer when there is not a great degree of differentiation amongst them all.

Relative to our market proven integrated products of course here we’ve gotten a number in the Android ecosystem what we believe to be sole sourced positions across customers in Asia that due in an aggregate hundreds of millions of units a year volume with no major customer concerns expressed or otherwise causing questions as to the market reliability or market readiness of our products. So, our competitors simply do not have that track record in aggregate relative to Six-Axis.

So, in the near term that we are in a position in the market with Six-Axis integrated now third-generation products where while we may have competition of some form the degree to which this competition is market proven and the specs to which the parts operate we do stand apart. So, that’s a little bit of differentiation background around the nature of Three-Axis versus integrated Six-Axis and Seven-Axis in the future products.

Ruben Roy – Piper Jaffray

Thanks, Alan. And follow up on the R&D discussion from earlier, it sounded like you said that you expect potentially slight increases so two questions. One is, I think I heard you say that for fiscal year we should still be thinking about 17% of revenue and so for use sort of the high end of your fiscal year range. It seems to me like R&D needs to comedown in either one or both of the second half of fiscal year quarter. And then also are the significant qualifications, customer qualifications finished for now or are there ongoing customer qualifications in the second half of your fiscal year coming?

Alan Krock

Well, the latter is the easier question. As always ongoing customer calls and that just part of the evolution of the ecosystem for the rest of the fiscal year we qualified and everything we need to be qualified and to do the revenue and business opportunity targets we’re speaking to. So, a lot of this activity around customer call and so forth would primarily impact years beyond the current. Sorry could you go and just ask that first part of that question again so I make sure I hit that the way you want it?

Ruben Roy – Piper Jaffray

I am just trying to out figure the linearity of R&D expense. I think you saw it.

Alan Krock

Yeah. Okay, all right. So, with respect to revenue levels in Q3 which the street in general expects incremental revenue. Based on what I said we’ll do at or above the high end of the range previously provided and we also guided relatively consistent to slightly increasing R&D levels off of where we are. So, in all of that and we can talk more offline as need be, there is some balancing to go on depending on if we will do the business levels needed or adjust ourselves accordingly to meet the targets that we are discussing. So, either there will be slightly incremental revenue beyond what we’ve discussed which is arguably likely the case but we still need to refine our estimates based on what we think the running rates in these programs can accurately be or we will need to scale the incremental spend and the spending opportunities on OpEx that we’ve discussed. So, there is a little bit of balancing to go on over the next 90 days until we give outlook next relative to what the value is on a revenue basis for a lot of these new wins in China and North America.

Ruben Roy – Piper Jaffray

Got it. Okay, thanks Alan.

Alan Krock

Yeah, not a problem. Thanks for asking and I appreciate the opportunity to clarify so thank you. It’s a good question.

Operator

Your next question comes from the line of [Sujit D’Silva with Reese Capital]. Please proceed.

Unidentified Analyst

Hi Behrooz. Hi Alan. Staying on the third-generation products here can you talk about what some of the key attributes are that have helped you in customer designs and where I am coming from the question is what would keep you from allow you to hold that share versus having customer kind of switch back and forth generation of generation?

Behrooz Abdi

Well some of the key attributes are really centered around performance and power. Power meaning always on. It really what that means is again offloading most of the sensor processing off into the sensor itself and not turning on the apps processor or the sensor hub all the time for doing functions that will take orders of magnitude higher power. So, we can do those inside the sensor itself and that’s a lot of the SoC itself, the CMOS signal processing as well as the software algorithm that we put on top of that.

Unidentified Analyst

Okay, great. And then another question is on really the linkage of winning a motion sensor socket and then how that may link or not to an OIS win and also how I link across from winning a smartphone tablet to other devices, is there any benefit of using sensor across those or are they individual decisions?

Behrooz Abdi

Well, at the engineering level between OIS and the Six-Axis there is separate engineering decisions. The functionality is different but at a core technology really outside of software algorithms and all that, the core sensor itself, the gyro itself we have the highest performing gyro out there in the small size and that really enables the design win in the OIS. It’s tuned around OIS. It’s very high performance and that decision is separate.

Now, from a business standpoint obviously when we deal with customer especially a lot of the top tier customers it’s made easier for them to deal with smaller base of the suppliers. So, when we talk with them especially between phone and tablet usually the same design, a lot of but is the same design but even between the Six-Axis and Dual-Axis, the decision is really made around having a bigger amount of business with the small vendor base. And that’s some of the kind of a business related decisions they make that allows us to really penetrate and stay with those customers. So it’s a mix of both.

Unidentified Analyst

Okay. And Alan a quick question for you. Inventory do you expect that to start comedown in the next quarter or stay at these elevated levels?

Alan Krock

So, it really depends on the volumes and the forecast like put together for our fiscal Q3. It seems as though there is opportunity if the opportunity to really grow significantly based on a full quarter of these types of running rates eventuates a lot of higher level of inventory maybe needed to support that if the opportunity is something in line with around what we’d discussed in the high end or little bit higher and then it could come down some but I would for now plan on more significant growth in Q3 and related inventory levels to support that.

Unidentified Analyst

Appreciate the color. Thanks guys.

Operator

Your next question comes from the line of Brett Simpson with Arcee Research. Please proceed.

Unidentified Analyst

Thanks very much. A question for Behrooz, just the Movea acquisition I mean there was a strategic relationship with STMicro for SensorFusion and can you talk about how that licensing relationship between STMicro and Movea plays out and now that you’ve consulted at Movea and you seem to be saying that sulfur becomes increasingly important in the value chain for motion sensing. So, what sort of right does STMicro have to continue to use their Movea IP going forward?

Behrooz Abdi

Okay, that’s a nice question. In short, we plan to support STMicro’s MCU and it’s not IP, the IP belongs to Movea, it’s really supporting the software running on the MCU. And it runs on that MCU plus other MCUs and that’s really the whole purpose of purchasing Movea when you look at the sensor, the MCU, the apps processor, there is a number of MCU players STMicro is one of them but there is a number of them and they compete effectively against each other with performance of the MCU as well as the power and size and all that and also costs, but really the key differentiation is how these MCUs perform with a particular sensor or if there is not a MCU in there how does our sensor perform with an apps processor like Qualcomm and Snapdragon or MediaTek apps processor. And the determining factor in a lot of these cases and really the thing that pulls them together is the software. So, having that software algorithm allows us to optimize our sensor for the system regardless of the processor or the MCU. And so we absolutely plan to support the MCU ecosystem community and that includes STMicro.

Unidentified Analyst

And maybe just a follow up. On the competitive environment around Six-Axis I mean some of your competitors are talking about the wrong Six-Axis parts now penetrating customers like Xiaomi which is a 10% customer for you guys, how do you see this playing out because you are now in your third generation part but are you now seeing sort of meaningful challenges from folks like STMicro and both?

Behrooz Abdi

Well, ST and Bosch the dynamic really hasn’t changed. It always been – we’ve always competed with them and they’ve always had touted Six-Axis out there. So dynamics really hasn’t changed. We haven’t really seen any meaningful new competitors. And with ST and Bosch were differentiating ourselves with power at a system-level and with more software and algorithm and really enabling our customers to get the time to market.

If you got a product that you got to get out to market a lot of the difficulty once you get the sensor and the performance assuming that you have the performance which we believe we have the best performing sensor then you have to really make it work and making it work at the system-level is really all around software algorithm and that’s where we differentiate on ourselves and allowing us to get design wins.

Unidentified Analyst

And maybe just finally if I can. Have you any meaningful wearables orders for your September quarter, I mean how should we think about that part of the business? And also tablets you had some good wins at this time last year in tablets, how do you see that playing out in the second calendar year?

Behrooz Abdi

Sure. In terms of meaningful brands absolutely. In terms of brand top brands and some of the brands that have moved away from excel only moving towards gyro from gyro plus excel or plus mag which is Six-Axis or Nine-Axis, we have very, very strong design win and we are starting to ramp into volume production with them.

In terms of meaningful compared to mobile quite frankly just the numbers are just not there yet. We’re excited about the market but I think it’s going to take some time so wearable market we’re well penetrated. We have established ourselves as the part to have for the most part but in terms of the meaningful in terms of volume numbers compared to mobile is still not there yet so that’s still work off to those. And you had another question that I wanted to answer.

Unidentified Analyst

Just on tablets.

Behrooz Abdi

On the tablets.

Unidentified Analyst

Yeah

Behrooz Abdi

Yeah. On the tablets it’s hard for us to comment we know that we are in a lot of tablets but it’s hard to differentiate between the tablets and the phones for us is really the screen size so for us when we get design win at a particular customer we really in a lot of cases we don’t know whether it’s a phone or a tablet because it really the only difference is that 4, 5, 7 or 9 inches of screen size so, when we start ramping do we have to wait until the product is out there and there is a teardown for us to really see if we have – we are in the tablet but we definitely have traction that lot of design wins in the tablet but we would lump them on to mobile.

Unidentified Analyst

Okay, thank you.

Operator

Your next question comes from the line of Cody Acree with Ascendiant Capital. Please proceed.

Unidentified Analyst

Hey, guys thanks. This is David on for Cody. I wanted to touch on what we’re hearing at Samsung and their efforts to burn some inventory here and just kind of want to get how maybe that impacted your business this quarter and how you are thinking about Samsung as we go into the third quarter?

Behrooz Abdi

Well, let me just say qualitatively and let Alan jump in. We had a view when we started ramping in the new products to Samsung that we needed to be cautious about just the total market so, we took that into account so, it’s really ramping our business with Samsung it’s pretty much on track and as expected. And so, the numbers that you see for last quarter and this quarter reflects that as we have design wins in multiple products and again with additional content that across Korea that allows us to maintain that region as a stronger market for us but...

Alan Krock

I generally agree with that. I mean in the recent past they have been in a range of between 30%-35% of revenue in the most recent completed quarter they were around 30% as Behrooz says there is a lot of different new products coming into production and some potential additional new content offset, any potential change in unit volumes that people are concerned with. So, with larger new customers that’s going to be clearly 10% or greater of revenue, the percent that any one or the other existing customers occupy will drop off some but generally levels of revenue and opportunities are similar going forward especially considering additional potential content that maybe in some of the newer products.

Unidentified Analyst

Great, thanks. And if I can just switch topics here thinking about the wearables and that’s obviously a growing area for you guys but how can we think about revenues and maybe just thinking about percentage of revenue, how large a part of business could that be as we begin to the out years maybe think about the next year?

Behrooz Abdi

We’re kind of looking at each other and frankly there is such a wide market in terms of predictions out there. And we know that there is definitely traction in the gyro attach and we see that last year in total market was about $17 million to $20 million this year’s forecast to be about $35 million to $40 million so, really comes down to attach rate of gyros and so, if you believe the analyst market next year total market could be close to $80 million to $100 million but we are really watching that cautiously right now we are trying to get our chips designed in with our automatic activity recognition software and the algorithms and all that and really see the market but in terms of unit volume there is really numbers that are out there are very all over the place.

Alan Krock

Yeah, so, I would agree with Behrooz as far the variability or potential outcome – observed based on the characteristics and nature of our products small very small form factor very good performance. A lot of needle mover type of customer that are out there and bought off when it comes to wearables we’re engaged with significantly in fact, if it’s got a gyro function I wouldn’t be able to think of a wearable that’s got one of our competitors’ products designed in versus ours so, that leaves to think of the existing Samsung products that are out there, the existing Google products that are out there and torn down Facebook one of our existing augmented virtual reality customers for $2 billion and there is always that the new customer opportunities out there as well as new companies come to market with wearables and we have relatively solid position with respect to wearables that new customers as well. So, therefore it just comes down to how many units can be, the customers, our customers sell to the end markets and how quickly do you, the end markets develop with respect to demand for these, but you can believe that whatever demand level of demand develops if our customers are widely successful that will be great, we’ll have a very high attach rate and enjoy that.

But generally one would be prudent to expect across that base of customers mentioned relatively modest rates of adoption and growth but it does provide for a good medium to long-term opportunity and the market develops we’ll be there.

Unidentified Analyst

Great, thanks so much, and good luck.

Alan Krock

Thank you.

Operator

Your next question comes from the line of Mark Delaney with Goldman Sachs. Please proceed.

Mark Delaney – Goldman Sachs

Thank you very much for taking the questions. I guess first, to understand the outlook for fiscal ‘15 revenue is a little bit unclear still and be at or above the high end of the prior guidance and I know you gave some targets around margins and OpEx. But can you just clarify to what extent the prior fiscal ‘15 EPS guidance of $0.70 to $0.75 non-GAAP still holds if it can be a public range I think it’s going to be below the range or still in that range?

Alan Krock

That’ll be above the range I believe it set a range around $0.80 so, that’s based on some initial estimates of outlook that were included in this calls mentioned and it was quite a bit of variability in customer how well the end customers actually do with these various new products that we’re in Asia and North America and so forth so we get such a broad exposure to smartphones and tablets or smartphones in general, it’s not all purely additive I mean some gain market share, some lose market share and the transition of our products across now it’s a substantial majority of the smartphone and tablet opportunities out there it’s something that just needs to be studied and thought about carefully so, that’s why we’re a little reserved on outlook for Q3 because some large customers can gain market share others can lose market share it’s not all purely additive so, we need some opportunity to study it but suffice to say everything we said historically will be at or above likelihood is above but the exact quantum of that is something we’re working on.

Mark Delaney – Goldman Sachs

Understood, thank you for that. Can you also discuss to what extent pricing has walked in or pretty firm for product launches in the next quarter or two, or customer still come in and ask for larger pricing discounts?

Alan Krock

Well I mean there is a paradigm that set many of our customers have unique schedules for negotiation of pricing as mentioned we have now substantial exposure and if it’s got a gyro function and it’s a smartphone substantial share of the market so, any one customer can always be jockeying for a better price as they all do it all times but generally it’s about the value of the sensor function in the market with the gyro and integrated sensor attached. So, there is no one customer with any particular window of pricing that’s relevant some of the Asian ones are quarterly some of the others are semi-annual and others even longer than that. So it’s just a very broad exposure now that we have two integrated sensors with the gyro function included in smartphones maybe half the market or something like that.

Mark Delaney – Goldman Sachs

Okay, that’s helpful. And then just for financial question you talked about some increased momentum and optical image stabilization if you look out maybe fiscal ‘16 how much your revenue do you think OIS can represent and what are the margin implications as if OIS is able to increase as a percentage of your total revenue?

Alan Krock

So, an initial setting of outlook we felt that in the current year OIS as a percent of revenue would effectively double off of a smaller base of revenue and from our fiscal ‘14 so, that was worth maybe an incremental $20 million or $25 million as we get into the fall product season though with our customers I think the feature may become more and more prevalent and within the China based opportunity I think we’ll see a lot of the Chinese flagships begin to consider that as well as some of the Asian and other customers that we have. So, it’s off a small base of revenue so, I think we’ll easily achieve our projection of it doubling year-over-year or maybe going from $25 million to $40 million or $50 million worth of value from ‘14 to ‘15. I think importantly for the next fiscal year ‘16 and beyond that’s definitely got the potential to continue to double off of a smaller base of revenue opportunities so, that’s – there is some thoughts around what OIS can be.

Mark Delaney – Goldman Sachs

Appreciate that. Thank you very much.

Operator

Your next question comes from the line of Richard Shannon with Craig-Hallum. Please proceed.

Richard Shannon – Craig-Hallum Capital Group

Hi, guys. Thanks for taking my questions. I guess just a couple for me first of all on the topic of China anyway you can quantify or characterize a level of revenues coming from Chinese vendors our OEMs in the June quarter and where do you see the growth or and the growth looking at September?

Alan Krock

Yeah, thanks Richard let me just take a glance at some notes here on that first one. So, I think it’s probably mid to high teens maybe not quite 20% certainly Xiaomi was sighted as 10% customer and then there are a myriad of other OEMs who in the future will grow to be larger customers as they adopt our flagship technology together with Android K and Android L and or consider adding OIS to their products as well. So, I think generally the attach rate of our sensor function and integrated sensors is at a running rate right now maybe less than 20% of the market maybe teens percent of the market but I think importantly over the coming year based on the trends in that market as well I think the running rate and percent of total revenues derived can be 20% or greater over this fiscal year so, that somewhat where we are now maybe teens to 20% or greater over the next six to nine months something like that.

Richard Shannon – Craig-Hallum Capital Group

Got it. Okay, that’s helpful. Second question for me related to Samsung. If I got your numbers correctly on your preamble in your guidance sounds like Samsung is going to grow fairly nicely quarter-on-quarter by my estimate if I calculate numbers rather by 25% sequentially. A, is that right in the ballpark and B, if that’s the case how are you growing so much there when a lot of other vendors are showing some declines coming from this customer your getting New designs like OIS I mean new functions like OIS or new designs or can you help us out there?

Alan Krock

Sure, they recorded specifically as being 30% of the $66 million, $67 million in the prior quarter so, that’s a number and then they were given as a range 25 mid-20’s to 30% of 86 to 91 so, if you chose something in the middle of that that would give you another number, so I don’t know in percentages that difference maybe significant but in an absolute dollars is not hugely so. That came right. And then generally we’re in their flagship platforms and you’re right I mean there are additional I can’t announced pre-announced product features and so forth but I think people are generally aware of where some of the additional sensor content can come from relative to our opportunities with these customer so, I think a lot in general there is a lot of transitions, their hand chip, their flagship platforms are typically launched in the middle of the year and then later in the year and so, certain other companies can be caught up in transitions there we’re not at this time so, continue to enjoy sole position in a lot of their important platforms plus an incremental opportunities for content especially should, OIS prove to be something the market demands later in the year we’ll see how they respond to that.

Richard Shannon – Craig-Hallum Capital Group

Okay, fair characterization. One last quick question for me, what do you think your market share is in OIS as you – the second half of this year and imagine it’s quite high is that something you think you can maintain at pretty high levels as you go into calendar 2015 as well?

Alan Krock

Yeah, I think it’s relatively representative of our position and gyro based inertial sensor in these markets in general I’d say I had some particular very high percent maybe 80 or something like that percent share of the market opportunity that’s out there. I don’t really know of a major platform that we don’t have to position in but one never assumes when we’ll have everything that’s out there so, generally 70%-80% share of the market is good as anybody could ever hope to do, So, I say we enjoy that position at the moment.

Richard Shannon – Craig-Hallum Capital Group

Okay, that’s fair enough. That’s all the question from me guys. Thank you very much.

Alan Krock

No, problem. Thank you Richard.

Operator

That concludes our Q&A session. I will now turn the call back over to Mr. Behrooz Abdi, President and CEO. Please proceed.

Behrooz Abdi

Well, thank you all for participating in our conference call. This quarter we will be participating in the Pacific Crest Vail Conference, the Canaccord Genuity Growth Conference, the Citi Global Technology Conference and the Roth Corporate Access Day. We look forward to seeing many of you there and as always feel free to contact us if you’d like to schedule a call or a meeting. We look forward to speaking with you in the future. Thanks.

Operator

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: InvenSense's (INVN) CEO Behrooz Abdi on Q1 2015 Results - Earnings Call Transcript
This Transcript
All Transcripts