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Nordic Semiconductor ASA
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Welcome to the Nordic Semiconductor Q4 Conference Call. For the first part of this call, all participants are in listen-only mode. Afterwards there'll be a question-and-answer session. [Operator Instructions] This call is being recorded.
I'll now hand it over to Steel, Head of IR. Please begin.
Thank you, Erasmus, and good morning everyone. We are recording this presentation and it will be available on our Nordic Website under the IR section. Also on the IR section, you will also find the earnings press release, quarterly report and the quarter presentation.
Joining me today, we have the CEO, Svenn-Tore Larsen; and CFO, Pal Elstad. They will -- will be discussing our latest financial results as well as review recent business activities. After the presentation, we will open up for Q&A. We will do both call-in and we will do the call-in questions first. And if anyone are writing in questions on the webcast, we will do that afterwards.
As usual, the presentation contains forward-looking statements that involve risks and uncertainties. Actual result might different materially from those expressed or implied in such statements. We encourage you to review our full quarterly report for more information on the risks and uncertainties that may affect our business.
Without further ado, I hand over to our CEO, Svenn-Tore Larsen.
Good morning, and welcome to our presentation for Q4 and full year figures for 2022. I'm Svenn-Tore Larsen, and with me as always, I have my CFO, Pal Elstad. We reported 12% revenue growth for Q4, which was within the guidance we provided. The development reflects a very turbulent environment with varying demand across technologies, verticals, geographics and customer segments.
In term of technology, Bluetooth revenue increased by 26% year-on-year. And obviously then you understand that the revenue from proprietary products and seller IoT declined in the same quarter compared to 2021. Gross margin was around 53% and this generates a flat gross profit of $101 million for the quarter.
And we maintain the EBIT margin about 20% despite higher R&D costs, and this is because we do have a strategy. We do have project with customers now that we are continuing to execute on. Our guiding for Q1 2023 is lower. Demand for legacy products, proprietary and first generation of the 51 family is lower-than-expected, especially in consumer verticals. And we had a strong PC sales. Previous quarters, we see that -- after COVID, we basically see that this is softening.
In terms of geographics, we see software contribution from China due to both low allocation and weaker demand. At the same time, we remind in competition with the automotive industry for wafers for our 52 family and 53 family. And this will also continue into Q1 and that's a challenge for us, and hence we guided pretty low in Q1. This means that we're guiding $140 million to $160 million for the first quarter. We believe this will be the low point in terms of revenue for 2023.
Gross margins for Q1 are expected to be bigger or greater than 52%. As a final note, on wafer supply situation, we are making investments to secure future supply. We need to do that, because we have so many projects in pipeline. And in Q1, we are making a prepayment of $100 million for to -- going to be deliveries from 2024.
Our largest customer continuing to grow. And they are maintaining a high demand, despite what you see in the economy because there's new projects coming out that never been basically in the market previously. And also we see that our concentration is getting higher, but we are reporting their commitment and prioritizing our location to their products.
The top 10 customer share of Bluetooth revenue increased from 40% in 2021 to 44% in 2022. And if you isolate Q4 only, it was more than 50% of the top 10 customer were the Tier 1s. As we are prioritizing some customer in a situation with scarce supply, this means that others have not been getting the volumes they wanted. The combination of overall scarce supply and lower demand in some markets means that we are seeing a relatively lower sales in SMEs in the broad market, and particularly in China.
Next slide. Weak sales to domestic customers in China is really being difficult for us. We saw that the share of China used to be around 20% to 25%. Currently it declined to less than 10% in Q4 '22. We also see the outlook for Q1 pretty weak, meaning the pace of and importance [ph] [indiscernible] (735) off a rebound in China is extremely important for us and is going to determine some of the outlook for the product demand going forward.
As we talked about in 2022, we've been working much better to align the size of the order backlog to actually delivery capability. As you can see, we are getting closer in Q3, reflects increased order cancellation, but also normalizing of lead times to over larger Tier 1 customers. We have committed volume deliveries to these customers and have at the same time ask them to return to normal order patterns with shorter lead times, which has reduced the order backlog.
Given the supply demand imbalance through 2021 and '22, it's clear that the order backlog has not been a good indicator of neither real demand or future earnings. If you look at certification and market share, we are maintaining steady and high share of designs with around 40% share.
And as you can see, the overall numbers of design has been around 1,100 to 1,400 new design. And given the increased value of the total Bluetooth market, this is a indication that value per design is increasing. And this really fits well with the trend of our own designs and sales with more high volume application for Tier 1 customers.
As we stated in our third quarter presentation, we saw that a tougher economic environment was creating a more uncertainty short-term outlook. Our project base continues to expand, but we see financial -- it's actually financial support for many of these medium sized small customers, which are startups has been a little bit slow and a lot of these customer have not really get into production but we believe they've been getting -- are going to get into production with the cellular IoT project in the second half of this year. But the outlook remains cautious, also for the first quarter, but we expect to see growth return with increased sales and revenue later this year.
We do show this slide every year, every quarter. New product launches in the quarter include both Bluetooth PowerToys such as Harry Potter Magic Wand. It's a combination of the 52832. And over PMIC nPM1100. It really shows that we now are getting these adjacent component besides over radio into designs.
Customers have also launched cellular IoT product. And they do -- we also hear and see that there is a combination of both Bluetooth and cellular IoT. So we are pretty excited to see that the strategy that we put out in 2019 that we should combine both Bluetooth and cellular is actually working now. That gives us really good hope for the long-term strategy that we have.
[Indiscernible] you have wanted to hear more about is the audio vertical. And I'm happy to report that we see good traction. We are engaging both with developers, design partners, and we have shipped more than 2,000 audio development kits, which is also a great -- it's a huge number. We also are delivering parts today to products that are in the market, both in the hearing aid and in the headphones, microphones and speakers.
I'm also happy to report that we are now shipping our Wi-Fi 6-enabled, the nRF7002 development kits in volume through our distributors. The 7002 is a low power, very robust and secure companionship, designed to be used alongside over Bluetooth family products, and can also be obviously working with our 91 cellular SiP. We showcased this in the first third-party Wi-Fi in CES at -- in Las Vegas. And we have seen strong interest in these development kits. Actually, we got 2,000 kits in here just before Christmas, and we have already shipped them out.
Next. Moving on to power management. We are continuing to expand our portfolio. We just added a new nPM1300 to the family. This is a power recharging and a broad - has broader set of management features. I mean, it will enable us to take another part of the market and also will be able to increase ASP a bit. This product will be out in volumes from mid 2023, adding to the rest of the family that's already in the market.
As a final note, I'm glad to see that we are back on the road with our Nordic Tech Tours. After a couple of years where COVID made travel extremely difficult, we were able to visit 45 cities across the U.S and Europe with more than 1,700 customers attending. And when you ask them, more than half of these are planning for a project to use Nordic.
If you look -- focus on this year's Tech Tour was the new [indiscernible]. We spend quite a bit of time on cellular IoT and Wi-Fi. And these are new product lines that are adding to our Bluetooth revenue. While we are really excited and looking forward now to help our customer to be successful with a new products based on new products with new standards. So exciting times for Nordic.
Now, I would like to hand over to Paul.
Thank you, Svenn-Tore. I'll now run through the financials for the fourth quarter of 2022. As Svenn-Tore mentioned, revenue increased 12% year-over-year in the quarter. For the full year 2022, we received a very strong 27% growth. Revenue came in at the lower end of our guided rage. These top line figures hide significant changes in the revenue composition over the course of the year, in terms of both product technologies, customers and geographies.
At the back end of COVID, in 2022, started a very strong in the consumer PC markets. But during the year, our focus has shifted towards industrial and health care. Bluetooth revenue increased by 26% in the quarter, and 33% for the full year. So growth is well above our previously communicated 20% to 30% rates. The growth in Q4 2022 reflected a combination of price increase and somewhat higher volumes.
During 2022, we've also been able to increase the revenue and ASP from our high-end Bluetooth products. Compared to last quarter, Bluetooth revenue is down 4%, mainly as a result of lower ASP due to customer mix. As Svenn-Tore mentioned, proprietary product revenue declined by 56% in the quarter and by 10% for the full year. So the 10% for the areas is more or less in line with previously communicated targets for proprietary.
Proprietary is now just 10% of total revenue for the year. The decline mainly reflects lower demand for PC accessories and other home office equipment after boost during COVID, as well as the technology migration to Bluetooth low energy. The decline started earlier in the year and revenue has relatively flat compared to last quarter.
Cellular IoT revenue declined by 14% in the fourth quarter, although it increased by 49% for the full year and accounted for about 3% of total revenue in 2022. For new technologies like PMIC and Wi-Fi, we are seeing increased design in and we'll start reporting details when we have meaningful revenue in these technologies.
Looking at sales from another perspective. In terms of end use market, we see that growth within the consumer segment stalled in the quarter, whereas industrial and health care continue to grow at a reasonable healthy pace. However, consumers still are by far our largest market with 57% of the total. Although this is actually going down, it was 62% in last quarter.
Consumer is down 5% compared to last year and 14% compared to last quarter. As discussed earlier, this is a mix of reduced proprietary, low demand in China and low demand among small and medium sized customers. Industrial continues to be strong and is up 34% compared to last year -- flat compared to last quarter. Industrial is about 27% of our total and we see especially strong demand in the European market. Health care with $22 million in Q4. So strong growth both compared to last year and compared to last quarter.
Turning to gross margin, we delivered a gross margin of 52.7% in Q4. This was lower than in Q4 2021. However, December or Q4 2021 was very special as we had large price increases that the supplier costs first came in or took effect until Q1. We do not see the same effect this year.
If we compare gross margins to last quarters, the gross margin reduction is driven by mainly three factors. We took a write-down of some cellular inventory of $3 million impacting gross margins by almost 2%. As committed by Svenn-Tore, revenue to our largest customers are exceptionally high with above 50% in Q4. And we also have very low proprietary revenue and proprietary revenue has over the later years shown strong gross margins.
On the positive side, we continue to sell more of our high-end Bluetooth products. Now we're going to turn to our operating model performance for Q4. Although revenue is at the low end of our expectations, we continue to deliver EBITDA margins for the group above 20%. if we just look at the short range business, EBITDA margins is still around 30%.
Gross profits are the same as last year, but the reduction in BTA margins come as a result of continued high investments. Although we see a reduced growth for Q4, we see an overall strong long-term demand for products and continue to invest to capture this future growth. So total R&D is up from $40 million last year to $45 million this year, which is from 23.3% of revenue to just below 24%. of revenue.
SG&A is down this quarter, mainly as a result of operational leverage and also positive effects. Both R&D and SG&A have already been favorable -- very favorable impacted by stronger USD compared to NOC and Europe. Although we continue to invest, we of course monitoring the situation closely. We are investing for growth, so total cash operating expenses amounted to $61 million in Q4.
When adding back capitalized development expenses and deducting depreciation and equity based compensation. This compares to $56 million in Q4 2021 and $55 million last quarter. The 9% increase is, of course, well below or revenue growth. U.S dollars for $42 million relates to payroll expenses, only marginally higher than Q4 2021, despite the 21% increase in the number of employees. We're now above 1,4,50 employees in the group. This mainly reflects the favorable effects developments, which have lowered the payroll measured in U.S dollars by about 6% -- $6 million, adjusted for the $6 billion salary expenses increased by 17% year-over-year.
Other OpEx increased from $15 million in Q3 last year to $19 million this year. The increase comes partly as from Tour we're now much more on the road, selling the products. And we are also doing several tape outs to be ready for the future.
CapEx was $8.4 million in Q4, so slightly higher than that what we've seen earlier in 2022. It mainly reflects investment in additional test capacity and IT infrastructure. CapEx intensity overall remains below the previously indicated level of around 4% of revenue. Finally, I'll go through the cash flow, cash position. We can continue to see healthy cash flow and a strong cash position in the company.
During Q4, we overall added $26 million to our cash balance and that $379 million at the end of December. Operating cash flow was $36 million in Q4, mainly driven by a strong EBITDA. Only partly offset by increased working capital. We did see although increase in net working capital of $13 million, mainly driven by higher accounts receivables and inventory.
Net working capital is now around 22% of revenue. As Svenn-Tore mentioned, during the first quarter 2023. Nordic may have a prepayment of $100 million related to ongoing initiatives to strengthen supply resilience and diversification.
Svenn-Tore, I will now hand over to you, so you can run through the Q1 outlook.
Thank you, Paul. As you have understood, we have had mixed near-term outlook across different segments, even though we maintain a positive view on our long-term outlook. I mentioned that our large Tier 1s are taking a higher share of business and we are continuing to see strong Bluetooth demands from these customers.
However, players in the automotive industry continue to drive competition for the 55-nanometer wafers. And this has limited the shipment of over high revenue maker, the 52 family and the 53 family. We see weaker demand for our legacy products, the proprietary products and the first generation of the 51 family. We are also seeing a temporary slowdown for cellular IoT, which we expect to turn in the coming quarters.
Across verticals, we see that the consumer verticals are more exposed than the industrial. And we see -- continue to see strong growth in health care applications. And obviously being a responsible company we are -- we have decided to ship 100% to health care applications.
And as mentioned, we see generally low demand in China. Maybe are rounding off the Chinese New Year's, it remains to be see how demand will develop. And the pace of rebound in China is one of the key question marks for 2023. Summing up, this means that we have to guide for a lower revenue -- revenue range we guide for is $140 million to $160 million for Q1. We're going to see a highest share of revenue from Tier 1 customer. And we expect the gross margin in Q1 to remain above 52%.
Nordic setup for a plan to reach 1 billion and I kept the market stay in 2019. We stick to that plan, we have delivered. And we also were so eager when we saw that we have more design wins than expected. So we pull that forward 1- year. Unfortunately, we didn't manage that. But we did deliver on the promises we gave on the Capital Markets Day back in 2019. And we have seen growth around 40% annually over the past 3 years.
As we have heard today, we are now seeing a more uncertainly near-term outlook. We are slow start with 23, we no longer can expect to meet the 1 billion goal [ph] already in 2023. We expect to be back to run rate of $1 billion revenue in the second half of this year. Our long-term growth ambition remain intact. And we will continue to invest in R&D and organizational development to make sure we take the most of our growth opportunity.
These long-term ambition built on assumption of continued economic growth and continued demand growth from both customers and consumers and industrials. This is in line with what our larger customers also indicates to us. And obviously, if we see a persisting negative macro economic development, or major change in customer behavior, we will obviously adapt to that situation. We haven't seen that yet. We know this is a short-term bump.
We have a capital light model with fabulous production, external distributors and this leaves us with high flexibility to adapt to changes in the business environment, if necessary.
So, then I will like to leave the microphone back to Steel.
Thank you, Larsen. We will soon open up for Q&A. To accommodate as many as possible before the market opens, I would like to say to everyone that we take one question for everyone and a follow-up question if needed. We will start with the call-in first. And then we will go over to the question asked in the webcast page. I hand it over to our operator to open up the Q&A.
Thank you, Steel. [Operator Instructions] The first question is from [indiscernible] from UBS. Please go ahead. Your line will now be unmuted.
Hi. Good morning. Thanks for taking my question. I was wondering, could you provide a bit of detail on what visibility you have on the recovery to the $1 billion run rate in H2? Yes, it would just be useful to know what gives you confidence in that.
What we see is that we are bringing more new products to the market. And we also have major project at Tier 1 customers. So what we need to get is more wafers. And we have taken action to secure supply in '24.
Okay. And just a quick follow-up, if I could. On the wafer supply, you -- [indiscernible] you're seeing slowdown in some end markets or customers, how easy is it for you to shift that supply over to other customers? [Indiscernible] seeing weakness amongst Chinese customers shifting that to Europe, quite a [indiscernible] stronger.
Fortunately, we have different technologies and the 55 nano wafers is the one that most new or all new applications are using. And those are the ones that we have more shortest than the older technologies. So it's just the mix of wafers available that make this additional -- extra difficult. It's been basically slowed down in the older technologies.
Okay, great. Thank you.
Thank you, Harry. Our next question will be from Christopher from DNB. Please go ahead. Your line will now be unmuted.
Hey. Good morning and thanks for taking my question. So I want to piggyback on the previous question in terms of the bridge from here to the billion rate in the second half which is the [indiscernible] Svenn-Tore. So currently it seems that the guidance on the midpoint of $160 million. Is it -- can you give some more on the mix there? Because this is basically what you had in revenues on a quarterly basis for the 55-nanometer base product back in 2021. So if we kind of factor in the price hikes that you guys have out in the market, it seems you're basically getting less way first than you booked in 2021. So how should we [indiscernible] that you guys will get from [multiple speakers]?
I could put some color on the -- that Christopher. I mean, if you recall, Q2, Q3, we said that we have been pulling in wafers from previous -- from coming quarters. We have done that through the year. This result really successful in Q4. And it's not going to be successful when you look into Q1, look, which we are in now. But we've also been committed higher wafer amount in queue [ph] from Q2 and onwards throughout the quarter. We can tell you -- we can tell you, we get higher volumes of wafers from Q2 and outwards. Exact numbers, it will be easy. We didn't expect the Q4 to end like this, neither allocation for Q1 to end like it's turned out. So unfortunately I can only say we get more wafers. And it makes us pretty sure that we are into the run rate that will support $1 billion in '24. Someone is speaking, I can't hear anything.
And Svenn-Tore in the mix for Q1, so this guidance seems like it's basically zero -- [indiscernible] zero revenues for proprietary and cellular and these other areas or a significant step down in with [indiscernible] sequentially. So which one is it?
We don't comment on the mix. It's a different customer mix, obviously and we are continuing to support the Tier 1 customers both loyal to our medical health support and to our largest customers.
Yes, I'll jump in the back of the queue. Thanks.
Thank you, Christoffer. Our next question will from -- will be from Oliver Schüler Pisani from Carnegie. Please go ahead. Your line will now be unmuted.
… for taking the question. My question was on FTE investments. I think you added about 70 employees in this quarter. How do you think about further hiring some investments in the organization for '23 in light of the new economic environment?
Yes, I can answer. We grew 21% '23 -- to '22 versus 2021. Of course, we are looking at the overall environment, so we'll adapt our investments compared to what we see in the market.
Okay, very good. Thanks.
Thank you, Oliver. [Operator Instructions] Our next question will be from Adam Angelov from Bank of America. Please go ahead. Your line will now be unmuted.
Yes, hi. Thanks for having me on. So just two for me, please. Firstly, I wanted to just confirm if you have or have not seen any weaker demand on Bluetooth? In other words, is the demand specifically just related to the legacy nodes, or are you also seeing from SME some weaker demand on Bluetooth as well?
We have a legacy node on Bluetooth, mainly used by early adapters, and also where we used to have our revenue out of from China. And if you saw the slide, I mean, we've been reducing revenue in China with close to 65%. year-on-year. And these were legacy Bluetooth products. On the new products, we have extreme demand from new project at Tier 1 customers. And obviously, legacy products proprietary has weakened after COVID.
Yes, okay. So just to confirm, before I move on to the question, then it's basically for the lion's share of Bluetooth revenue, its suppliers issue not a demand issue, that's what you're saying?
What I'm saying is that we are short of 52 wafers, which is 55 nano wafers.
Okay, okay. The other question just to confirm the one-off on write-down you had in Q4, do you expect that to continue maybe is that or is that really something trends go as you're expecting and demand picks up, that's really just a Q4 story. And it is a one-off and it's not something we should potentially expect through 2023 to happen again?
Now that's related to the write-off of some cellular products that was one-time in Q4 related to older products of the cellular, that was in the inventory. So it -- when demand picked up, we have and you look at our inventory in the balance sheet, you will see that we have significant amounts of inventory versus last year. A lot of that is related to cellular and proprietary. And we have a good plan to deplete this inventories.
Okay, thank you. And maybe could you just explain what the write-off was, why you have to take that?
It was technical issue with one production batch with our cellular IoT products.
Okay, great. Thank you.
Thank you, Adam. Our next question will be from Christoffer from DNB. Please go ahead. Your line will now be unmuted.
Thank you. My second question is on the outlook for 2024. So you mentioned that you're doing prepayment of $100 million in the current like in Q1. So can you help us a bit more in terms of understanding what that actually gives you? So what we're getting in return for paying up that [indiscernible], and when that will mean you can start delivering significant volumes?
It will put us in place to deliver volumes in '24 through '26.
Our new product lines.
Our new product lines.
And how much can that help?
We don't have a guide for the product mix in 2024 currently.
Probably we are pretty sure if it takes us above $1 billion, at the same timing we lined out for in the Capital Markets Day in 2019.
Okay, thanks.
₤
Thank you, Christoffer. As there are no further question at this moment, I'll hand it back to the speakers for any written questions.
Thank you, Erasmus. We have a few questions on the webpage. You can start with Rob Sanders, Deutsche Bank. Can you discuss the Chinese sales collapse? Is there any element here that Nordic now prefer to leave this business to other competitors?
I think they're -- actually when we analyze it, there is a mix. Yes, there is quite a lot of low complexity Bluetooth designs in China. But we also have had historically quite a few designs with volumes in China. And they've been basically affected by the strong lockdown. We are run through our customer base. These customers hopefully will get back when doors are open again in China.
Thank you. Then we have a question from Kristoffer B. Pedersen, Nordea, on the same topic. How comfortable are you that demand will recover in China given that you have not prioritized these clients over the past couple of years.
What we have done is that we have kept some customer alive. And we have seen that these customers have had a dramatic downturn on the revenue. The customer feedback we get is that I are expecting some pick up through 2023. And that's what we relate to.
Thank you. Then we go over to the topic guidance, Petter Kongslie, SpareBank 1. Q1 '23 revenue guidance of $150 million and a backlog of plus $800 million, what is the best proxy for run rate revenue potential in nodes?
It's very much driven by wafer supply on each department, I know. We will guide quarter by quarter and I think it will be evidence when we show by guidance for Q2 after Q1. Currently, we need to see that the capacity support plan from our vendor is coming back to what's already been indicated to Nordic.
Thank you. And then from Kristian Spetalen, Arctic. Q1 revenue guidance is below total Q4 revenue. As such, do your Q1 revenue guidance only reflect lower demand or our wafer allocation lower than Q4?
As I said during the presentation, we've been cooling in wafers through all of '22 from the quarter ahead and the same exercise all quarters, we are not managing to do that for Q1' 23.
And then we have the supply capacity. Kristian Spetalen, Arctic. Can you say that supply constraint persist, but at the same time you are encouraging customers to return to normal purchasing pattern of placing orders only two quarters ahead. Can you elaborate more on why you do this?
Because we have had discussion with Tier 1 customers and committed to deliver through the true volume I need through '23 and hence they don't need to bid and place holders for a long time.
Thank you. Then we’ve a question regarding backlog. And this is from Petter Kongslie, SpareBank 1 Markets. Order backlog declined from Q3 to Q4. How much is order cancellations?
We haven't been calculating the exact constellation part of it. But this is being active sort of exercise from our regional sales managers to align, as I showed in the presentation, the backlog to our revenue.
Thank you. We have two questions regarding gross margin. Christians Arctic, you mentioned lower demand among small medium enterprises, while the Tier 1 is holding up. Does this change in customer mix represent a risk to above 50% gross margin for 2023.
Now, as I was commented on Capital Markets Day, we -- one of our main focuses is to keep gross margins above the 50%. So we consider this not a risk.
Thank you. We have a question regarding OpEx. Petter Kongslie, SpareBank 1 Markets, how should we think about OpEx intensity giving lower revenue in 2023?
So OpEx is, of course, a mix of salaries. And as I commented on in one of the questions, we are managing salary compared to where revenue is, but although a lot of our salaries is of course fixed cost. The same on OpEx. We can of course, suggest, travels, et cetera. But a lot of the [indiscernible] costs, which are really the big part of OpEx are fixed, because we have to get our products out in the market to secure future growth.
Thank you. Then we have a question regarding price increases. Petter Kongslie, SpareBank 1 Markets. Can you say -- can you say something about expected price increase in the rest of 2023. And when will they take place take effect and what is the net effect will be on the gross margin.
We are in the process of doing price adjustments just now. It will be effective from Q2. And we will be sensitive to, I will say, verticals and products that would be affected negatively. And we might be able not to put an increase on this. And other verticals, we will put the price increase. So that's something we evaluate with each individual customers that are contributing with high volumes.
Thank you. And our final question today comes from Rob Sanders, Deutsche Bank. Can you discuss when matters should be visible as a growth driver for your business?
It's certainly visible for us for Nordic at the moment. This might be one of the verticals we are working most on. We are working with nitric companies. And I think you're going to be able to see revenue from this at least in '24. Some of it will already appear in the end of this year. But the major revenue burst I think you're going to see in '24 driven by some Tier 1 customers.
Thank you. Then I'm concluding our Q&A session for today, and hand over to Svenn-Tore Larsen for closing remarks.
So thanks for everyone to join and listening into our quarterly presentation. This concludes today's call. Have a good day. Thank you.