Apr 26, 2018 • 05:00 pm ET



Loading Event

Loading Transcript

Q & A

Thank you. (Operator Instructions) Our first question is from the line of Vijay Bhagavath of Deutsche Bank. Your line is open.

Vijay Bhagavath

Yeah, it's Vijay Bhagavath. Yeah, good afternoon. Yeah, I have a question and a quick follow-up for on Karen. Alex, my question is around the segments, you operate in academic research, aero defense, electronics communications, industrial, any color you could give us in terms of how these individual segments are performing both currently, and then, just a forward-looking view into the second half?

And then, Karen, agile development you said quite interesting, would that have any impact on software OpEx or any of the testing OpEx that goes with these frequent software releases? Thanks.

Alex Davern

So, Vijay, thanks very much for your question. Yeah, let me kind of deal with the broad context, and then, Eric will get into the details of the specific kind of industries that we serve directly to give you some color there. Broadly, we're seeing the success and reaping the benefits of the investments we've made over multi-years in our software platform and in our broad-based data acquisition and control products and very pleased to see the positive reaction there.

We did see, as we said, some slowdown or weakness in the mobile device supply chain and unfortunately, that turned what would have been a really great quarter into just a good quarter. So we're glad to see record revenue in Q1 and deliver on our profitability goals. When we look at that particular area for Q1, that mobile devices supply chain accounts have been more volatile than our normal business over the course of many years.

And so, this provides a little bit of a speed bump for us as we enter into 2018, but on the good news side, the revenue year-over-year from that set of accounts is down about two-thirds. So their ability to have a negative impact on our go forward expectations is pretty low. And if that does return, then that will be a tailwind for us in the second half of the year.

Eric Starkloff

Yeah. I'll just chime in Vijay, how are you doing? This is Eric. So yeah, the strength in software and data acquisition cuts across all the industries and customers that we serve. So we're very pleased with that in the quarter. From an industry color point of view, transportation and aero defense were both strong for us in the quarter. And then, as Alex commented, semiconductor is kind of a tale of two sides. It was approximately flat where these few accounts, less than 10 accounts in the mobile devices supply chain were particularly weak and the rest of the industry, in general, was good, was strong in terms of our business in validation labs, as well as in production test, and those roughly offset themselves in the quarter in semiconductor.

Karen Rapp

Okay. And hi, Vijay. This is Karen. I'll take the question on the software OpEx. We're pretty excited, as you mentioned, about the ability to move