I just read the conference call transcript for the LTRX third quarter financial results. I am wondering how it is going for the "Intrinsyc" business unit (if I can say).
1) revenues of less than $5M
The last time Intrinsyc had this low level of sales was in September 2017. That looks like a huge drop from over $6M in September 2019.
2) it looks like Qualcomm had some concerns (see the text in bold).
3) For M. Pickle, it's like the main source of customers for ex-Intrinsyc products are former Lantronix customers (see the text in bold)
4) M. Pickle seems to want to minimize the importance of Qualcomm as the technology providers for the ex-Intrinsyc solutions. I understand what he is saying but why he feels the necessity to say that in the context of a discussion specific to Intrinsyc?
Am I seeing too much to this?
What do you think?
Zario
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Richard Valera
And then just on Intrinsyc, so congratulations on the close of that. And it sounds like it contributed meaningfully and we had kind of thought that would be something probably in the range of $5.5 million to $6 million in the quarter. Can you confirm if that’s kind of in the range of what it contributed in the quarter?
Paul Pickle
No. Substantially, while we – I shouldn’t say substantially south of $5 million, but it was between $4 million and $5 million.
Richard Valera
Got it. So can you just talk about the dynamics of that business. Obviously, Qualcomm historically a very significant customer there and certainly, I’m sure still is. Can you just talk about kind of how that businesses, as well as how any non-Qualcomm initiatives you have going on of Intrinsyc or going into sort of growth prospects of that business?
Paul Pickle
The Qualcomm, I would call them more of a technology partner, rather than customer. We don’t – we purchase products from Qualcomm and then we feed those into our hardware-based solutions that we’ve developed software on top of and then sell that to our customer base.
The Qualcomm relationship is going great. We’ve had several meetings, where we’re stepping up our engagement. We’ve had some requests from them that – in terms of better penetration geographically and other areas that we’re certainly trying to make sure that we we address those concerns. And overall, I think, right as they’re starting to launch the 865 processor, it’s really been – this is kind of an exciting time. We’ve got a natural flow of customers that have used products from us before and are looking to kind of step up and use a piece of hardware with more capabilities.
Not to mention we’re – in terms of development, I think that we’re at the very forefront of when it comes to hardware development kits availability. So we expect to capture a lot of that early interest. So that’s going fairly well.
In terms of other engagements, I’ve said it before, I’ll say it now. Certainly, the Qualcomm relationship, I don’t want to disparage that at all, because it’s really important to us. But we do take a bit of a technology as agnostic approach. We obviously want to leverage our core competencies wherever we can when we’re trying to develop a customer solution.
But what we – what technologies we embrace really kind of comes down to that problem statement that the customer has and what is the optimum solution and it could be a number of different things. So we are looking to make sure that we have a broad base of capabilities with which we address those problems.
https://seekingalpha.com/article/4347757-lantronix-inc-ltrx-ceo-paul-pickle-on-q3-2020-results-earnings-call-transcript?part=single