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HP0-207 | ProCurve Adaptive Edge Fundamentals

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HP0-207 - ProCurve Adaptive Edge Fundamentals - braindump

Vendor HP
Exam Number HP0-207
Exam Name ProCurve Adaptive Edge Fundamentals
Questions 191 Q & A
Recent Update May 20, 2019
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Nova Measuring instruments Ltd (NVMI) Q1 2019 salary call Transcript | HP0-207 Real Questions and VCE Practice Test

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photograph source: The Motley fool.

Nova Measuring devices Ltd  (NASDAQ:NVMI)Q1 2019 salary CallMay. 01, 2019, 9:00 a.m. ET

  • prepared Remarks
  • Questions and solutions
  • call contributors
  • prepared Remarks:


    decent day, and welcome to the Nova Measuring instruments First Quarter 2019 outcomes conference name. modern-day conference is being recorded.

    at the moment, i would like to turn the convention over to Miri Segal of MS-IR. Please go forward.

    Miri Segal-Scharia -- Founder and Chief executive Officer

    thanks, operator, and respectable day to everybody. i want to welcome all of you to Nova's first quarter 2019 economic consequences convention call. With us on the road these days are Mr. Eitan Oppenhaim, President and CEO; and Mr. Dror David, CFO.

    earlier than we begin, may additionally I remind our listeners that certain assistance offered on this call may also comprise ahead-looking statements. And the secure harbor commentary outlined in contemporary revenue release also pertains to this call. in case you haven't bought a duplicate of the unlock, please view it in the Investor relations section of the company's site. Eitan will begin the name with a company replace, adopted with the aid of Dror with a top level view of the financials. we can then open the call for the question-and-answer session.

    i could now quit the name to Mr. Eitan Oppenhaim, Nova's President and CEO. Eitan, please go forward.

    Eitan Oppenhaim -- President and Chief government Officer

    thank you, Miri, and thank you interested in becoming a member of our first quarter monetary effects convention call. i'll beginning the call these days with the aid of talking about our first quarter consequences and efficiency highlights. i'll then supply the suggestions for the second quarter of 2019. Following my commentary, Dror will evaluate the quarter's monetary outcomes in element.

    Nova delivered strong outcomes within the first quarter, demonstrating the efficient business mannequin we now have constructed, which is in response to growing diversification in our revenues, shoppers and expertise. during the quarter, we proceed to execute our plan firmly inspite of the challenging near-time period business environment. All key economic metrics for the quarter got here in above the midpoint of our guidance, with each non-GAAP and GAAP EPS exceeding the high end of the tips range.

    This mighty influence within the basically volatile markets is as a result of the the consistent development we're making in strengthening our working model, differentiating our portfolio and extending our value in a larger addressable markets. Our performance continued to be supported by way of a balanced customer mix, which included 5 tremendous consumers.

    This group of main purchasers protected three reminiscence and two foundry purchasers, which displays the more advantageous position and the growth we've made with each and every one in every of them. With the consequences, memory and foundry contributed evenly to our standard product income in the quarter. in line with this balanced combine, we believe that once the market stabilized, our greater position will provide us with an competencies in a number of segments and guide our long-term growth plans.

    From a business perspective, we proceed to raise our penetration efforts and gain even stronger position with key debts. probably the most a hit highlights from the primary quarter is the alternative of our VeraFlex X-ray in-line substances metrology answer by a global leading memory consumer. This win already generated earnings within the first quarter and is expected to ease (ph) extra as the client continues to extend potential and purposes globally. This alternative is additional proof of our a success progress in expanding our attain into the growing substances engineering house, which undergoes big adjustments and with that, also many process challenges.

    We count on that in an effort to enhance gadget efficiency today, past the traditional geometry, scaling and verticality, IC manufacturers should embed greater unique materials within the system and engineering to be strong in high-quantity manufacturing. The main outcome from this major shift is that process handle for materials is fitting an enabler for in-line production beyond qualification and R&D use situations.

    substances parameters will develop into more and more crucial, whereas new generation contraptions are developed. in accordance with our expectations, in the memory segment on my own, we predict materials metrology depth to develop drastically from phase to section. This substances inflection point is already reflected in our outcomes within the last few quarters, the place we effectively penetrated to all major memory shoppers. We expect salary to grow with these purchasers as they expand capacity.

    As chief during this field, we take pleasure in this growth with distinct wins. We predict our unique providing to be a big differentiator in a powerful growth engine going ahead. in response to our analysis, by offering exciting substances answer, that are in response to varied applied sciences, we will extend the accessible market through as a minimum $200 million within the coming years

    An further company highlights is the choice of our dimensional OCD metrology through a memory brand for constructing its non-risky advanced memory gadget. The selection included our newest, i550, the newest addition to our built-in metrology portfolio. This answer emphasize Nova's entertaining offering that interlaces hardware with advanced computer learning and deep training application engine to remedy challenging functions that cannot be solved through hardware by myself in a wafer-to-wafer variations scheme.

    The success we've had with this latest built-in metrology platform is additionally reflected within the number of manufactured tools so far, which surpassed 100 devices as of these days, roughly a year from the product launch. furthermore, and as reflected via the consumer revenue combine, we continue to considerably bring our solution to the world's leading foundry for its 5-nanometer construction line and 3-nanometer building line. as a result of the consumer wide evaluation, Nova's utility portfolio was elevated to include both frontend and backend answer in distinct steps with a purpose to solve essentially the most complicated common sense challenges in excessive-quantity production.

    despite the current uncertainty in the market, particularly precipitated through memory, we still believe that within the long run, demand fundamentals will continue fueling the markets beyond the severe (ph) circumstances. therefore, we proceed investing in our strategic plan to enhance and extend our biological increase engine.

    Our diversified portfolio, which is in accordance with a special and differentiated product method for each dimensional and substances procedure handle, demonstrates certainly our aggressive edge in a wider measurement means where a transforming into element of our product profits generated these days is in accordance with solutions that most effective Nova can supply.

    Following the three new era of dimensionals and materials metrology hardware models that we launched in 2018, we intend to center of attention on two additional growth engines in 2019. the primary is to proceed setting up our desktop discovering application suite, which tremendously enhances our metrology capabilities and offers adaptive solutions.

    These options are gaining extra interactions with all of our clients and are diagnosed through the business as a breakthrough technology for bettering yields and time-to-answer. right through the quarter, Nova and GLOBALFOUNDRIES had been collectively awarded the finest Metrology Paper at superior Lithography convention for demonstrating adaptive metrology capabilities the usage of computing device learning engines and predictive metrology in excessive-volume creation. Our area of expertise in predicting CD and electrical values from an inline measurement using desktop learning engine has been carried out and are aiding our share good points with assorted consumers.

    The second is to proceed aggressively prototyping our two leading new technologies that we were talking about additionally in outdated calls. These technologies are already been significantly evaluated by means of our leading consumers, with distinct equipment already put in at customer sites. each technologies reveal unmet answer for each dimensional and substances metrology and we expect initial revenues from this new applied sciences within the second half of 2019.

    To conclude my organized remarks, i need to briefly highlight the market circumstances as we see them at the moment. In our view, the spending ambiance is basically influenced by a decline in memory spending in both DRAM and VNAND. We consider that despite the fact we should still are expecting the yr of slower spending, the long run growth chance for the business remain solids, fueled via extra high-conclusion applications that require more desirable computation vigor and memory capabilities.

    In our view, the 2nd half efficiency nonetheless relies upon generally on three catalysts; stock correction and capacity enlargement in memory, foundry and logic yield improvement which will trigger additional expansions and the adoption pace of our new applied sciences.

    notwithstanding visibility these days to the end of 2019 is challenging, our current view is that while an uptick in memory can also occur in the 2d half of 2019, we believe that the large expansions will materialize frequently in 2020, which is starting to be developed into a reasonably boom yr.

    As for Nova, despite the fact we don't seem to be proof against the market volatility and present low visibility, we are expecting that given our widened publicity to diverse segments, clients and geographies, mixed with the traction our differentiated portfolio is gaining available in the market, we are well located to improvement from the long-term boom competencies in diverse differentiated applications.

    We envision 2019 as a transition yr for Nova, which we accept as true with will result in an improved 12 months in 2020, the place the leading aspects to support our growth are the broader purchasable market as a result of materials exposure and new portfolio rollouts, so one can boost our value offering. and at last, our balanced publicity to all trade segments.

    before I deliver the tips for the 2d quarter, i need to emphasise that besides the fact that children the market as whole is experiencing a tender period, our operational mannequin and the value we carry to the customers proceed to assist suit profitability and gross margin as established within the first quarter. These fundamentals will proceed supporting our funding in establishing and rolling out new technologies.

    As for the second quarter of 2019 suggestions, we predict revenues within the range of $45 million to $fifty three million, diluted EPS on a GAAP groundwork on the range of $0.09 to $0.26 per share and non GAAP basis diluted EPS in the latitude of $0.17 to $0.35 per share.

    Now let me surrender the call to Dror to evaluation our monetary effects in aspect. Dror?

    Dror David -- Chief fiscal Officer

    Thanks, Eitan. decent day, each person. In my following prepared remarks, i will discuss with each GAAP and non-GAAP effects. which you could discover an in depth reconciliation per item on the end of the revenue press unencumber.

    complete revenues in the first quarter of 2019 had been $56.7 million, on the high end of the company quarterly information. Of the enterprise product revenues, about 50% got here from the foundry and about 50% came from the reminiscence.

    On the consumer distribution front, TSMC, SMIC, Samsung, Hynix and Micron were the gigantic contributors to the business product revenues within the first quarter. Blended gross margin within the first quarter was about fifty six% on a GAAP foundation, and 57% on a non-GAAP foundation, inside the business target mannequin of fifty six% to 59%.

    operating expenses in the quarter totaled approximately $22.9 million on a GAAP groundwork, and $20.9 million on a non-GAAP foundation, higher than the outdated quarters. The expanding working fees within the first quarter resulted peculiarly from lessen R&D salary in the quarter.

    working margin in the quarter was 15% on a GAAP groundwork and 20% on a non-GAAP foundation. The helpful tax fee of the company within the quarter was approximately 16%. profits per share within the quarter had been $0.27 per diluted chair on a GAAP groundwork and $0.37 per diluted share on a non-GAAP basis, larger than the company assistance for the primary quarter.

    As previously communicated throughout 2019, the enterprise will conclude the transition of its main offices in Israel and the us to new areas. as a result during the office transition period, the enterprise is bearing reproduction office hire expenses. in the first quarter of 2019, these fees amounted to $614,000 and have been adjusted for non-GAAP representation applications below the item, facilities transition prices.

    As mentioned in the company's previous conference call, starting January 1, 2019, the company became required to put into effect the new hire accounting rule referred to as ASC 842. This rule require the enterprise to current working leases, which extends for a length of more than 12 months as an asset and liability in its balance sheet.

    as a result of this accounting rule implementation, the enterprise stability sheet as of March 31, 2019, included an working lease appropriate-of-use belongings within the amount of about $28 million, working hire long-time period liabilities in the volume of about $26 million and working lease existing liabilities within the quantity of approximately $3 million.

    the majority of these lease liabilities are denominated in New Israeli Shekels, and are linked to the purchaser fee index in Israel. therefore, they're uncovered to change cost fluctuations on the whole quantity of the liability on prosperous groundwork.

    throughout the first quarter of 2019, the exchange fee differences and linkage to the buyer fee index of these liabilities amounted to $484,000. These charges had been adjusted for non-GAAP representation functions beneath the merchandise revaluation of long-term liabilities.

    regarding the company outlook for the second quarter of 2019, at the midpoint of the company guidance, we predict here. Blended gross margin is expected to be about 56%. operating expenses are anticipated to cut back to approximately $22 million on a GAAP basis, and about $19.7 million on a non-GAAP foundation. effective tax expense is expected to be approximately 15%.

    i will conclude my prepared remarks with the cash reserves of the company, which extended to $193 million on the end of the primary quarter, and should allow the company to discover enterprise construction opportunities in parallel to the execution of the enterprise's 25 million share repurchase application.

    With that, i'll turn the call lower back to Eitan.

    Eitan Oppenhaim -- President and Chief government Officer

    thank you, Dror. With that, we might be completely happy to take your questions. Operator?

    Questions and answers:


    thanks. (Operator instructions) we'll go first to Jaeson Schmidt at Lake highway.

    Jaeson Schmidt -- Lake highway Capital Markets, LLC -- Analyst

    hi there, guys. Thanks for taking my questions. questioning if you could first comment on the linearity of order patterns in Q1. I recognize chinese New year can throw things off, but simply curious typical big image, how linearity become within the quarter?

    Eitan Oppenhaim -- President and Chief govt Officer

    So, first off, the first quarter has just begun. So, we're just at the conclusion of the primary month of the quarter. however we don't see an immense change within the order pattern between the flow within the closing -- within the first quarter and the beginning -- the starting of the 2nd quarter.

    Jaeson Schmidt -- Lake highway Capital Markets, LLC -- Analyst

    ok. that is helpful. And questioning if you can give any additional colour surrounding the sequential decline within the carrier revenue line. and that i wager, you had in the past talked about service salary becoming in that 10% range in 2019. Has there been any exchange to those techniques?

    Eitan Oppenhaim -- President and Chief govt Officer

    No, in general, we don't seem to be altering our view on the carrier growth -- increase plans. the primary quarter of the 12 months is always a smooth -- tender quarter for carrier revenues. And we do predict them to beginning starting to be, beginning the 2nd quarter of 2019.

    Jaeson Schmidt -- Lake road Capital Markets, LLC -- Analyst

    k. And the remaining one for me and that i'll leap again into queue. How may still we consider about CapEx for 2019?

    Eitan Oppenhaim -- President and Chief executive Officer

    As Dror mentioned earlier than, we're in the course of transitioning the offices both within the US and Israel, which requires extra costly, i'd say one-time funding in facilities. So, within the first quarter, the investment became round $2 million. be sure you expect an acceleration starting the 2d quarter, and we may still conclude these initiatives by way of the end of 2019. And standard investment for these facilities should still be round $20 million for the 12 months.

    Jaeson Schmidt -- Lake highway Capital Markets, LLC -- Analyst

    All right. Thanks an awful lot, guys.

    Eitan Oppenhaim -- President and Chief executive Officer

    thank you.


    And we will flow subsequent to Quinn Bolton at Needham & company.

    Quinn Bolton -- Needham & enterprise -- Analyst

    hey guys. Congratulations on the satisfactory 1Q outcomes. without doubt, we're going to soften a bit bit sequentially in the 2d quarter. however wondering in case you could be in a position to deliver some recommendations on the 2nd half. certainly one of your competitors in the OCD house final night pointed out seeing the second half of the 12 months up 25% to 30% half-over-half, driven primarily by means of superior common sense and foundry. I believe it truly is likely mostly pushed by way of TSMC's section two of their N5 construct out and i comprehend you've got publicity there. Do you are expecting to look a strengthening in the second half as section two is constructed out?

    Eitan Oppenhaim -- President and Chief government Officer

    So, thanks for the question. So actually, in (inaudible) and even in software, we do not e book past the subsequent quarter, peculiarly during this year, with a view to be conservative and cautious as a result of the doubtful visibility for the conclusion of the year. i would like to be even more cautious because we now have a unstable market.

    concerning mainly to what we see within the second half and as I spoke of in my prepared remarks, it depends on three catalysts that expectantly will take place. One is the recovery in reminiscence, which we see some time for this recuperation. It must be recovered both in NAND and DRAM. And we accept as true with that the expense elasticity as well as the demand will start expanding someplace within the 2d half.

    here's one 2nd -- is the foundry and common sense, yield growth that on the conclusion will give some thought to means enlargement, which especially in TMC should still be reflected in the second phase. but as we see that and in keeping with their name as well, on no account introduced, ok. We accept as true with that the yield of the 5-nanometer will proceed to develop. probably one of the skill of the part two will take place in the fourth quarter. but we don't see it yet.

    The third subject is the rollout and the pace of our new products. in order I said in my organized remarks and as Dror mentioned as neatly, we now have diverse battles with our tools, which signify a big or very big ASP related to the product portfolio. And we expect preliminary revenues to are available the second half. So if this three catalysts will occur, we really will see uptick within the 2d half. From the latest place that I have, and with a view to be very responsible, we take cautious method and we don't book past the quarter.

    Quinn Bolton -- Needham & business -- Analyst

    Understood. Understood. thanks for that color. wondering in case you may just variety of give us your strategies on the China foundry section as you leaf through this 12 months. is this a yr where you are expecting that enterprise to be relatively smooth, or do you think you see or is there some exercise in the local China foundry market that you're seeing?

    Eitan Oppenhaim -- President and Chief executive Officer

    So, on the contrary, when we appear presently on the chinese market, we look on between the two segments. We definitely see some soft spending from the -- on the memory constituents, largely by the biggest VNAND issuer. And when we appear on the foundry, we seem at the two main foundries, the SMIC and Huali continue spending funds. We see that in our income within the quarter, and we doubtless will see it within the next quarter. It doesn't mean that the complete China markets may be superior than 2019. however in fact, for this specific consumer, both for 28 and 14-nanometer in part of them, we do see continual funding.

    Quinn Bolton -- Needham & enterprise -- Analyst

    thanks, Eitan. The remaining query, just on the brand new -- the tuning (ph) tools, I agree with one was already sampling by the conclusion of the first quarter, with the 2nd expected to move to eval by using the end of the first half. questioning, has that 2nd tool been shipped for assessment or will that nevertheless occur this quarter?

    Eitan Oppenhaim -- President and Chief govt Officer

    So, we basically expected that (inaudible) in our customers. we have distinct equipment now and not one. the two betters (ph) that we're speakme about them, one know-how is already rolled out to a (inaudible) in two purchasers. And one of them in a single gigantic international consumer. And all of them going in line with the plan. And if every little thing is materialized, we are alleged to see the initial revenues coming within the second half. So, there's no changing the plan. On the opposite, we in fact expedited.

    Quinn Bolton -- Needham & company -- Analyst

    splendid. thanks very an awful lot.

    Eitan Oppenhaim -- President and Chief government Officer



    (Operator guidance) we are going to go subsequent to Patrick Ho at Stifel.

    Patrick Ho -- Stifel, Nicolaus & company -- Analyst

    thank you very a lot. Eitan, it be neatly commonly used now that memory spending is fairly muted at the moment. but as you seem to be ahead, each into the 2nd half and 2020, maybe on a qualitative foundation, which phase do you see a possible restoration occurring first, either a NAND or DRAM?

    Eitan Oppenhaim -- President and Chief executive Officer

    So first -- so first one, i'm looking on the reminiscence purchasers and the capability to spend. I do see both significant memory shoppers spending in China, good enough, the global one. And we're really beginning to see orders coming from China for those two global reminiscence purchasers. The query presently, if it will be full means, most effective a part of what they announced. we are able to see within the subsequent couple of weeks, but we all started to get orders and i suppose that those two investments are on the manner.

    2nd, related to the questions of DRAM and vertical NAND, we start -- when we're searching presently on these shoppers, we, for the primary section, we see conversions after which we delivery to peer new orders. So for the DRAM part, we all started to peer the conversion. So, I count on that someplace in Q2 or the beginning of the third quarter, we can beginning to look some orders for DRAM. So, concerning to your questions, I suppose that DRAM come first.

    Patrick Ho -- Stifel, Nicolaus & company -- Analyst

    high-quality. that's very constructive. perhaps as my second question, in terms of probably the most new products you've got brought, it feels like they add a lot of price and enhancements to productiveness and yield enhancements that consumers are searching for. but on the identical time, lots of instances new items are inclined to have decrease gross margins in the beginning. can you comment in terms of, as these new products roll out, the have an effect on to your margin profile as well as on your income leverage?

    Eitan Oppenhaim -- President and Chief govt Officer

    I are looking to start answering that -- by means of that with the aid of asserting that Nova isn't releasing news about productivity announcement. So, you'll no longer hear from us product x plus (ph) or product x (ph) productivity. The target in our product rollout is to bring new know-how, which is really extra wonderful to the market and differentiating the portfolio that we're presenting to the market.

    The productivity half is a component of our business we always provided. and every some of the customers is having a new fabrication web page, all the time requested for stronger productivity and we have it on a each year foundation. however here is not the foremost funding that we have. the new technologies which are coming to the market is a continuous strategy that we need to our portfolio, which capacity we concentrate extra in spending cash for the materials market.

    And over there, we're going to bring a special solution. And we're looking right now on the dimensional part, we all the time delivered to the market the combination of hardware and application that gives very unique capabilities to measure utility that can not be measured today. those all -- those are the specific criteria for rolling new technologies. And it be the identical with a new product that we're bringing to the market right now.

    Patrick Ho -- Stifel, Nicolaus & company -- Analyst

    remarkable. thanks very plenty.

    Eitan Oppenhaim -- President and Chief government Officer

    Thanks, Patrick.


    we will go subsequent to Mark Miller at the Benchmark enterprise.

    Mark Miller -- The Benchmark enterprise -- Analyst

    Congratulations on your file. simply questioning, in terms of X-ray, do you predict X-ray revenues to develop within the 2d half?

    Eitan Oppenhaim -- President and Chief executive Officer

    again, Mark, we cannot -- we cannot and we do not ebook beyond the next quarter. I do believe that if you are searching on the next couple of quarters and if you seem to be at this time on the previous few quarters, really the materials half, as part of our overall earnings is turning out to be. and i predict with what I talked about in my prepared remark that the market is growing in this part and substances engineering is fitting a special problem. even more crucial at the moment from the dimensional on OCD, truly the X-ray or the materials capabilities will develop.

    Mark Miller -- The Benchmark business -- Analyst

    Do X-ray orders or revenue represent 10% or more of your backlog or your contemporary earnings?

    Eitan Oppenhaim -- President and Chief executive Officer

    neatly, we don't divulge backlog suggestions, but in reality X-ray revenues are plenty better than 10% of the product revenue of the business.

    Mark Miller -- The Benchmark enterprise -- Analyst

    There looks to be some difference from what you noted nowadays, you predict foundry and good judgment to stay robust in 2nd half. however some individuals believe that after this quarter, foundry and common sense variety of tails off. however you are saying in fact, you might be anticipating superior foundry and common sense to continue within the second half. Is that appropriate?

    Eitan Oppenhaim -- President and Chief executive Officer

    No, what I said is that anybody comprehend that truly those which are spending money at the moment on the good judgment and the foundry is Intel and TSMC. In each and every one of them, there is a distinct skill growth application that's taking region. one among them is the ten-nanometer and the expansion of the subsequent technology. And the different one is the rollout of 5-nanometer and the next technology of three-nanometer.

    So, once we're looking presently on the second half, there's expectation that in both shoppers, the rollouts, and once more, based on the yields improvement, the rollout space will raise in the fourth quarter. If or not it's Intel within the proliferation and if it's TSMC for the part two 5-nanometer, but once again, i want to assert that became not ever introduced. All correct. So, here's both -- this is the two most important catalysts, Mark. So, when everyone's speaking about good judgment and foundry, they may be speakme about primarily about these two inflection aspect that might also ensue within the 2d half and should trigger a big potential spending in good judgment.

    Mark Miller -- The Benchmark business -- Analyst

    Do you expect to peer a lot from Micron or Samsung as a result of they have been pronounced, at the least in memory, they simply have very big inventories?

    Eitan Oppenhaim -- President and Chief govt Officer

    So, I don't need to refer particular to shoppers. however we do see some circulation in stock reduction and orders within the main reminiscence consumers.

    Mark Miller -- The Benchmark business -- Analyst

    thank you.

    Eitan Oppenhaim -- President and Chief executive Officer



    And that does conclude the query-and-answer session. at present, i might like to flip the conference back over to Eitan Oppenhaim, President and CEO for closing remarks.

    Eitan Oppenhaim -- President and Chief executive Officer

    thank you, operator, and thank you inquisitive about becoming a member of our call nowadays. with the aid of that, we conclude our Q1 2019 earning convention name. thank you.


    thank you. And that does conclude ultra-modern convention. thank you in your participation.

    period: 34 minutes

    name individuals:

    Miri Segal-Scharia -- Founder and Chief government Officer

    Eitan Oppenhaim -- President and Chief govt Officer

    Dror David -- Chief fiscal Officer

    Jaeson Schmidt -- Lake road Capital Markets, LLC -- Analyst

    Quinn Bolton -- Needham & business -- Analyst

    Patrick Ho -- Stifel, Nicolaus & business -- Analyst

    Mark Miller -- The Benchmark company -- Analyst

    extra NVMI analysis

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