Integrated Device Technology, Inc. (IDTI)
F1Q11 (Qtr End 06/27/10) Earnings Call
July 26, 2010 4:30 pm ET
Rick Crowley – CFO
Ted Tewksbury – President and CEO
Sukhi Nagesh – Deutsche Bank
Sandy Harrison – Signal Hill
Glen Yeung – Citi
Tim Luke – Barclays Capital
John Barton – Cowen
Nicholas Aberle – Janney Capital Markets
Previous Statements by IDTI
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Good afternoon and welcome to the Integrated Device Technology Incorporated fiscal first quarter 2011 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. (Operator instructions) As a remainder this conference is being recorded.
And with that said, here with opening remarks is Integrated Device Technology’s Chief Financial Officer Rick Crowley. Please go ahead, sir.
Thank you, Lorrie, and welcome to our fiscal first quarter 2011 earnings conference call. I'm Rick Crowley, IDT's Chief Financial Officer. And presenting with me on the call today is Ted Tewksbury, our President and Chief Executive Officer.
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. Actual results may differ materially from our forward-looking statements as a result of various important factors, including certain risks, which are detailed in IDT's most recent Annual Report on Form 10-K as filed with the SEC.
IDT does not intend to update the information provided in today’s call and expressly disclaims any such duty except as required by law. In addition, pursuant to Regulation G, any non-GAAP financial measures referenced during today's conference call can be found in our press release posted on our website at www.idt.com, including a complete reconciliation to the most directly comparable GAAP measures. Also, we have made selected financial information available in webcast slides, which can be found in the Investor Relations section of our website.
Now, I’ll turn the call over to Ted who will provide some highlights on our fiscal first quarter and then I’ll return to give you more specifics on the June quarter results and our outlook for September. Ted?
Thanks, Rick, and thanks to all of you joining us today. Last quarter I concluded my prepared remarks by telling you that our strategy is working. Today, I am please to provide additional evidence to support that assertion. Let me remind you that our strategy consists of two priorities: first, to defend and grow our leadership in our core timing, memory interface and serial switching businesses; and, second, to grow our available market through analog-intensive mixed-signal solutions that expand our content in communications, computing, and consumer applications.
So, let’s get started. Our Q1 results beat expectations across all metrics. We outgrew the broader semiconductor market with 15% sequential revenue growth driven by broad-based strength across all our end markets. Every one of our core business lines grew quarter-over-quarter and revenue from new products was up 18%.
To recap, revenue of $158.3 million came in above the high end of the range we provided last quarter. Gross margin of over 55% reached a four-year high driven by improved product mix and we delivered non-GAAP EPS of $0.14, $0.03 better than expected.
Let me now turn to our end markets and highlight some of the trends we saw in June as well as some of the innovative new products we announced that will drive continued growth. In computing, we experienced 19% sequential growth, driven by significant strength in servers and moderate improvement in PCs. As of June, more than half of our computing end market revenue came from enterprise computing due to our increased focus on servers. Computing represented about 39% of total revenue, up from 37% in the prior quarter.
The robust increase in our enterprise computing revenue was consistent with Intel’s announcement of a record quarter for their server business. Intel also reported that enterprises are adopting their Nehalem based servers to improve their ROI. As a key partner in the server ecosystem, IDT is positioned to benefit from these trends on several fronts.
First, we continue to defend and grow our core memory interface and PCI Express businesses. IDT remains the market share leader in DDR3 registers and PLLs and this share cuts to grow. We have also sampled customers on the first interfaces for the next generation technology know as LRDIMM, for Load Reduced Dual In-line Memory Modules. This technology will squeeze additional speed and capacity out of DDR3 memory.
We also continue to expand our leadership in PCI Express solutions for enterprise computing and during the quarter we added a new family of PCI Express clocks to our portfolio.
Second, we’ve been investing in new product categories that are enabling us to capture a larger share of the server bill of materials. For example, we recently announced a new family of voltage regulators that combine IDT’s timings and multi-phase controller with the coupled inductor technology we acquired from IKOR. This new product enables customers to improve system performance and power consumption in servers and PCs.
In addition to timing, memory interfaces, PCI Express and power management, our server portfolio is growing to include temperature sensors, signal integrity products and flash memory controllers. We believe the breadth and performance of our new product portfolio will make IDT the most important mixed-signal solutions provider for enterprise computing and drive sustained growth through the ongoing corporate refresh cycle.