Integrated Device Technology, Inc. (NASDAQ:IDTI) Q3 2018 Earnings Conference Call - Final Transcript

Jan 29, 2018 • 04:30 pm ET


Integrated Device Technology, Inc. (NASDAQ:IDTI) Q3 2018 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen. And welcome to Integrated Device Technology Incorporated's Third Quarter Fiscal Year 2018 Financial Results Conference Call and Webcast. [Operator Instructions]

Now, I'd like to turn the conference over to Krishna Shankar, Head of Investor Relations. Please go ahead.

Krishna Shankar

Thank you. And welcome to our fiscal third quarter 2018 financial results conference call. I'm Krishna Shankar, IDT's new Head of Investor Relations. And presenting with me on the call today is Greg Waters, our CEO and Brian White our CFO. Our call today will include remarks about future expectations, plans and prospects for IDT which constitute forward-looking statements for purposes of the safe harbor provisions under applicable federal securities laws.

Forward-looking statements in this call will include statements regarding demand for Company products, anticipated trends in Company sales, expenses and profits, and involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations. The Company urges investors to review certain details the risks and uncertainties in the Company's SEC filings, including but not limited to the annual report on Form 10-K for the fiscal year ending April 2, 2017 and periodic reports filed from time to time with the SEC.

All forward-looking statements are made as of this date of this call and IDT disclaims any duty to update such statements. In addition, pursuant to Reg G, or any non-GAAP financial measures referenced during today's conference call can be found in our press release and posted on our website at including a complete reconciliation to the most directly comparable GAAP measures.

All financial references will be non-GAAP on a continuing operations basis, unless otherwise indicated. Also, we have made available selected financial information available as webcast slides which can be found in the Investor Relations section of our website.

Now, I'll turn the call over to Greg who'll provide third quarter highlights. Brian will follow with more specifics and an outlook for the March quarter. Greg?

Greg Waters

Thank you, Krishna. I would like to begin today by welcoming Krishna Shankar as our Head of Investor Relations. Krishna joined us earlier this month having previously been a sell-side research analyst and investment banker who has covered the semiconductor space for the past 25 years.

Brian and I are excited of Krishna on board and expect that many of you already know him. We're pleased to report a strong third fiscal quarter of fiscal 2018 and a continued acceleration of our growth going forward. Revenue non-GAAP gross margin and non-GAAP EPS all exceeded the midpoint of our guidance range, driven by strength in our high-performance computing and automotive end markets.

On a non-GAAP basis, gross margin was 62.9% versus 61.4% last quarter, and operating margin was 28.9% versus 25.9% in the prior quarter. Beyond our near-term strength and operating results, we are seeing significantly increasing design win momentum in major customer program awards across all our vertical markets of computing, communications, consumer, and automotive and industrial.

Our design-in funnel which measures future