Earnings call transcript: Adeia Inc misses Q2 2025 forecasts, stock stable

Adeia Inc reported its second-quarter earnings for 2025, revealing a slight miss on both earnings per share (EPS) and revenue compared to market forecasts. The company posted an EPS of $0.25, falling short of the expected $0.26, and generated $85.7 million in revenue, below the anticipated $90.23 million. Despite these misses, Adeia’s stock remained stable, with a minor increase of 0.81% in aftermarket trading, closing at $12.49. According to InvestingPro analysis, the company maintains a "GREAT" financial health score and appears undervalued at current levels, suggesting potential upside opportunity.

Key Takeaways

• Adeia’s Q2 EPS and revenue both missed analyst expectations.
• The company introduced RapidCool, an innovative cooling technology for semiconductors.
• Adeia maintained a strong customer renewal rate of over 90%.
• The company reiterated its full-year revenue guidance of $390-$430 million.

Company Performance

Adeia Inc’s performance in the second quarter of 2025 showed resilience despite missing analyst forecasts. The company continues to strengthen its market position, particularly in the semiconductor and media licensing sectors. Its focus on innovation, exemplified by the introduction of RapidCool, positions it well for future growth. The company’s ongoing efforts to reduce debt and increase cash flow from operations highlight its commitment to financial stability.

Financial Highlights

• Revenue: $85.7 million, below the forecast of $90.23 million.
• Earnings per share: $0.25, missing the expected $0.26.
• Adjusted EBITDA: $45.7 million, representing a 53% margin.
• Cash from operations: $23.1 million.
• Debt reduction: $11.1 million, with a total paydown of over $300 million since separation.

Earnings vs. Forecast

Adeia’s actual EPS of $0.25 was 3.85% below the forecast of $0.26, while revenue of $85.7 million missed expectations by 5.02%. This performance contrasts with previous quarters where Adeia met or exceeded forecasts, indicating a potential shift in market conditions or operational challenges.

Market Reaction

Despite the earnings miss, Adeia’s stock experienced a slight increase of 0.81% in aftermarket trading, closing at $12.49. This stability suggests investor confidence in the company’s long-term strategy and recent innovations, such as RapidCool. The stock remains within its 52-week range, with a high of $17.46 and a low of $9.77, reflecting moderate market sentiment. InvestingPro data reveals the company has maintained dividend payments for 14 consecutive years and trades at an attractive P/E ratio relative to its near-term earnings growth potential.

Outlook & Guidance

Adeia reiterated its full-year revenue guidance of $390-$430 million, signaling confidence in its strategic initiatives and market opportunities. The company expects operating expenses between $160-$166 million and an interest expense of $40-$42 million. Adeia aims for an adjusted EBITDA margin of 60%, driven by new customer acquisitions and innovative products. With a market capitalization of $1.35 billion and strong financial metrics, including an Altman Z-Score of 3.42 indicating financial stability, the company appears well-positioned for future growth. For comprehensive analysis of Adeia’s valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro.

Executive Commentary

Paul Davis, CEO of Adeia, expressed optimism about the company’s future, stating, "We have good visibility into the second half of the year and are reiterating our full year revenue guidance." He highlighted the potential of RapidCool technology, noting, "RapidCool thereby increases heat dissipation efficiency and lowers the temperature of the semiconductor." Davis also emphasized the importance of new customer growth, saying, "We are making great progress bringing on new customers, which is critical to our growth strategy."

Risks and Challenges

• Potential supply chain disruptions could impact production and delivery timelines.
• Market saturation in media licensing may limit growth opportunities.
• Macroeconomic pressures, such as inflation or interest rate changes, could affect operating costs and consumer spending.
• Increased competition in the semiconductor market may pressure pricing and margins.
• Technological advancements by competitors could overshadow Adeia’s innovations.

Q&A

During the earnings call, analysts inquired about Adeia’s efforts to close a significant semiconductor deal and the company’s strategies for achieving revenue targets. Executives confirmed ongoing negotiations and development of alternative opportunities, emphasizing the long-term potential of RapidCool technology and the importance of maintaining innovation while managing expenses.

Full transcript - Adeia Inc (ADEA) Q2 2025:

Conference Operator: Good day, everyone. Thank you for standing by. Welcome to Adia’s second quarter twenty twenty five earnings conference call. During today’s presentation, all parties will be in a listen only mode. Following the presentation, the call will open up for questions.

I would like to now turn the call over to Chris Cheney, vice president of investor relations for Audia. Chris, please go ahead.

Chris Cheney, Vice President of Investor Relations, Audia: Good afternoon, everyone. Thank you for joining us as we share with you details of our quarterly financial results. With me on the call today are Paul Davis, our president and CEO, and Keith Jones, our CFO. Paul will share with you some general observations regarding the quarter, and then Keith will give further details on our financial results and guidance. We will then conclude with a question and answer period.

In addition to today’s earnings release, there is an earnings presentation, which you can access along with the webcast in the IR portion of our website. Before turning the call over to Paul, I would like to provide a few reminders. First, today’s discussion contains forward looking statements that are predictions, projections, or other statements about future events, which are based on management’s current expectations and beliefs and therefore are subject to risks, uncertainties, and changes in circumstances. For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discussed today, please refer to the risk factors section in our SEC filings, including our annual report on Form 10 ks and our quarterly report on Form 10 Q. Please note that the company does not intend to update or alter these forward looking statements to reflect events or circumstances arising after this call.

To enhance investors’ understanding of our ongoing economic performance, we will discuss non GAAP information during this call. We use non GAAP financial measures internally to evaluate and manage our operations. We have therefore chosen to provide this information to enable you to perform comparisons of our operating results as we do internally. We have provided reconciliations of these non GAAP measures to the most directly comparable GAAP measures in the earnings release, the earnings presentation, and on the Investor Relations section of our website. A recording of this conference call will be made available on the Investor Relations website at audio.com.

Now I’d like to turn the call over to our CEO, Paul Davis.

Paul Davis, President and CEO, Audia: Thank you, Chris, and thank you everyone for joining us today. I’m glad to be here again to share the results and progress we’ve made in the second quarter. Our second quarter results were in line with what we indicated on our last earnings call. We delivered $85,700,000 in revenue and cash from operations of $23,100,000. We also reduced our debt by $11,100,000, bringing our total debt paydowns in separation to over $300,000,000, a testament to our cash generative business model and our disciplined capital allocation approach.

We have good visibility into the second half of the year and are reiterating our full year revenue guidance. Based on the progress we’ve made in the first half of the year, we now have multiple paths to achieve our revenue goals. While the significant semiconductor opportunity we’ve previously referenced remains an attractive opportunity and a key focus of ours, it is not the only path to achieving our revenue target for the year. We have also advanced other high potential opportunities to the point that we see a path to close them this year, And these other opportunities could help us achieve our revenue target for 2025, even if we need to take a different strategic direction with the semiconductor customer. Collectively, these opportunities both reinforce our confidence in achieving our goals for the year and achieving our long term objectives.

Keith will walk through our financials and outlook in more detail shortly. Before diving into our second quarter deal activity, I’d like to highlight an exciting recent development in our semiconductor business. As you are all aware, the pervasiveness and rapid adoption of AI has created tremendous demand for data centers throughout the world. In those data centers are servers running the most advanced high performance semiconductors. These semiconductors not only consume an enormous amount of power, but they also create a tremendous amount of heat.

The AI era is driving up the power densities of these semiconductors, and traditional cooling solutions are unable to meet the thermal loads. In late May, at the iTherm and ECTC conference in Dallas, we introduced RapidCool, a revolutionary direct to chip liquid cooling technology for high performance semiconductor devices. This groundbreaking technology, has evolved from our deep experience in hybrid bonding and advanced packaging technologies, eliminates thermal interface materials used in conventional processes. Rapid cool thereby increases heat dissipation efficiency and lowers the temperature of the semiconductor. Our rapid cool technology bonds the silicon cold plate directly to the semiconductor, thereby eliminating the thermal interface materials others use and lowers thermal resistance by 70%.

This allows RapidCool to effectively manage heat in semiconductors running at three times today’s current power densities. Additionally, RapidCool targets specific hot spots on the semiconductors, further enhancing thermal management. We are currently working with industry partners who have requested rapid cool prototypes to evaluate for their future products. As part of our road map, we continue to develop options that address the growing thermal demands of high performance processors and high bandwidth memory devices. We are extremely excited about the potential of this technology and see it as a growth driver for us in the mid to long term.

Turning to our second quarter momentum. We signed five license agreements consisting of four in media and one in semiconductors. Three were with new customers in key growth areas of semiconductors and e commerce. We are making great progress bringing on new customers, which is critical to our growth strategy. Over the last three quarters, 11 of the 25 license agreements we have signed have been with new customers.

Our strategy of targeting new customers in growth markets is producing results. Our second quarter recurring revenue was up modestly year over year, and our non pay TV recurring revenue was up an impressive 28% during the same period. We signed a multiyear license agreement with STU Microelectronics, a global leader in analog and digital semiconductors. This deal was driven by our hybrid bonding technology, which continues to gain traction as a key enabler for AI and high performance semiconductor devices. We also signed two renewals in the second quarter.

These renewals continue our strong track record of over 90% of our customers renewing their license agreements with us. Renewals provide predictable revenue and validate the ongoing relevance of our IP as customers continue to rely on our innovations to deliver value to their end users. One of these agreements was a multi year renewal with a popular domestic OTT streaming service. OTT remains one of our high priority growth markets due to our media portfolios applicability and the OTT market sheer size and subscriber growth trajectory. Having penetrated only a portion of this market today, there is significant opportunity as we continue to pursue large customers in this key market.

We signed multi year license agreements with two new ecommerce customers for access to our media portfolio. One of these agreements is with Warby Parker, a popular and rapidly growing eyeglass retailer. This follows the success we had last year signing Neiman Marcus. E commerce is particularly exciting to us because of the sheer breadth of potential customers across numerous industries where the possibilities are virtually unlimited. Our initial license agreements mark an important entry point in validating our media portfolio for the e commerce market.

These early wins lay the foundation for scale and we expect deal volume to build as our market presence expands. We are on track to achieve our goal of delivering sustainable long term growth. The renewals we’ve signed with existing customers and importantly, the license agreements with new customers in our key growth markets such as semiconductors and e commerce last quarter will contribute to achieving this goal. In the second quarter, our patent portfolio grew by 2% to over 13,000 assets. This brings our first half portfolio growth to a little over 6% as we continue to evolve our portfolio to meet the needs of our fastest growing markets.

While growth may moderate over the rest of the year, our focus remains on quality and relevance, not just volume. Our strong cash generation supports a balanced capital allocation strategy, investing in strategic tuck in acquisitions, reducing debt, and returning capital to shareholders through dividends and share repurchases. Keith will share more on our capital allocation activity in a moment. Finally, I’m proud to share that for the second year in a row, Audio was named a best company to work for by US News And World Report. This recognition reflects our strong culture and helps us attract and retain world class talent.

With that, I’ll turn the call over to Keith for a review of our financial performance. Keith?

Keith Jones, CFO, Audia: Thank you, Paul. I’m pleased to be speaking with you today to share details of our second quarter twenty twenty five financial results. During the second quarter, we delivered revenue of $85,700,000 driven by the execution of five license agreements covering our strategic end markets including semiconductor, OTT, e commerce and pay TV. This includes three new customers that we added during the period, which further expands our customer base. Now I would like to discuss our operating expenses for which I’ll be referring to non GAAP numbers only.

During the second quarter, operating expenses were $40,600,000 a decrease of $297,000 or 1% from the prior quarter. Research and development expenses decreased $798,000 or 5% from the prior quarter. The decrease in the quarter is primarily due to lower patent filing administrative fees and personal costs. Selling, general and administrative expenses decreased $819,000 or 4% from the prior quarter, primarily due to lower personnel costs. Litigation expense was $7,200,000 an increase of $1,300,000 or 23 percent compared to the prior quarter, primarily due to spending associated with our ongoing litigation with Disney.

Interest expense during the second quarter was $10,200,000 a decrease of $433,000 primarily true to our continued debt repayments. Our current effective interest rate, which includes amortization of debt issuance costs, was 7.8%. Other income was $1,400,000 and was primarily related to interest earned on our cash and investment portfolio, and due to interest income recognized on revenue agreements with long term billing structures under ASC six zero six. Our adjusted EBITDA for the second quarter was $45,700,000 reflecting an adjusted EBITDA margin of 53%. Depreciation expense for the quarter was $488,000 Our non GAAP income tax rate remained at 23% for the quarter.

Our income tax expense consists primarily of federal and state domestic taxes as well as Korean withholding taxes. Now for a few details on the balance sheet. We ended the second quarter with $116,500,000 in cash, cash equivalents, and marketable securities, and generated $23,100,000 in cash from operations. As a reminder, we experienced fluctuations in our cash flows due to the billing structures of some of our agreements, whereby we received lump sum annual payments. As a result, our first and fourth quarters tend to be significant cash generation quarters for us, whereas our second and third quarters tend to be more modest.

We made $11,100,000 in principal payments on our debt in the second quarter and ended the quarter with a term loan balance of $458,900,000. During the quarter, we reached a significant milestone as we have now paid down more than $300,000,000 since our separation in October 2022. This is a clear testament to our highly cash generative business model and our disciplined focus on deleveraging our balance sheet. During the second quarter, we paid a cash dividend of 5¢ per share of common stock. Our board also approved a payment of another 5¢ per share dividend to be paid on September 16 to shareholders of record as of August 26.

Now I’ll go over our guidance for the full year 2025. We are reiterating our prior revenue guidance for the full year. We expect revenue to be in the range of $3.90 to $430,000,000. We’re pleased with the progress that we continue to make in both adding new customers and growing our sales pipeline. As always, we remain actively engaged with our customer base as we monitor how their businesses are progressing during this dynamic economic environment.

As a result of the relative uncertainty witnessed in the first half of the year, many companies were cautious yet optimistic on how their businesses would be impacted and thus reflecting a more heavily loaded second half for our revenue outlook. Today as anticipated, we see an increased level of engagement supporting our revenue forecast for the second half of the year. As we noted during our prior call, we made a conscious effort to be prudent in spending in light of the broader economic environment. Due to our efforts, we now expect operating expenses to be in the range of 160 to $166,000,000. Within that guidance range, we anticipate that our litigation expense will decrease modestly in the second half of the year, primarily due to the completion of the trials associated with our litigation against certain Canadian pay TV operators.

We expect interest expense to be in the range of $40 to $42,000,000 We expect other income to be in the range of $5.5 to $6,500,000 We expect a resulting adjusted EBITDA margin of approximately 60%. We expect the non GAAP tax rate to remain consistent at roughly 23% for the full year. We also expect capital expenditures to be approximately $1,000,000 for the full year. The second quarter was in line with our expectations. With improved stability within the broader macroeconomic environment and the strength of our sales pipeline.

We remain encouraged about both our short term and long term prospects. That brings it into our prepared remarks, and with that I’d like to turn the call over to the operator to begin our question and answer session. Operator?

Conference Operator: And our first question comes from the line of Hamed Khorsand with BWS Financial. Please go ahead.

Hamed Khorsand, Analyst, BWS Financial: Hi. Just the first question here. On this OTT renewal, can you just talk about if the contract is structurally different than the previous one?

Paul Davis, President and CEO, Audia: Sure, Harman. Thanks for the question. Appreciate it. Yeah, like most of our renewals, typically they’re pretty standard unless there’s really a change in circumstances with the company. In this case, it was in line with prior agreement.

Hamed Khorsand, Analyst, BWS Financial: And then the new opportunities that you talked about earlier, could you talk about where they fit as far as are they e commerce, are they OTT?

Paul Davis, President and CEO, Audia: Yeah, we’re not going to get into that in much detail right now, but what I can say is these are opportunities, one that we are excited about. They are opportunities that we had originally thought would be in 2026 and beyond. Because of the work of the team, we now believe we can pull into 2025. They are fairly sizable opportunities and what it means is we have an ability to finish the year within our guidance range, even towards the high end of the guidance range, even without the large semiconductor agreement closing within the year, which is still our goal. But if we can’t get that done, we now have multiple shots on goal to make that happen.

So we’re very pleased with the progress we’ve been able to make there.

Hamed Khorsand, Analyst, BWS Financial: Okay. Thank you.

Conference Operator: And our next question comes from the line of Scott Searle with Roth Capital. Please go ahead.

Scott Searle, Analyst, Roth Capital: Hey, good afternoon. Thanks for taking my questions. Keith and Paul, maybe just to get quickly calibrated, I’m wondering if you could, give us an idea about the recurring versus nonrecurring revenue and kind of the mix between, media and semi. And then I had a couple of follow ups on the semi front.

Keith Jones, CFO, Audia: Hey, Scott, and welcome. So for our recurring revenue, this quarter, the large portion or a substantial portion of our revenue this quarter was recurring. We had three new customers that we signed this period. A lot of that revenue is kind of based on kind of future production and volumes. So, the impact of those agreements will be kind of more picked up and more pronounced in the future.

So, what you’re going to see is a relatively small percentage this period, in probably a little bit less than we had seen in prior quarters. But nonetheless, the numbers that we’re kind of posting really shows, quite frankly, the stability in our overall revenue base. And with that being said, being able to kind of maintain through our renewals, and then when we start adding some of the new deals that Paul’s kind of alluding to, you’re going to see a nice step up in that and some growth in that recurring number.

Scott Searle, Analyst, Roth Capital: Gotcha. And maybe just in terms of the split between media and otherwise and within media, if we were to exclude pay TV, what kind of growth rate are you seeing then with OTT, CE and e commerce? What are we looking at as we go in the second quarter and kind of how that ramps into the second half?

Keith Jones, CFO, Audia: Yeah, I think what you’re going to see is that, well, there will be some impact when we sign the semi deal, and that will definitely add to it. But what’s also really exciting is that the growth in the media side, which really makes up the proponents of the revenue today from a recurring standpoint, there’ll be an appreciable pickup as well. You’ll see growth on both ends.

Paul Davis, President and CEO, Audia: And Scott, just as what I said in my prepared remarks, just as a reminder, we saw a 28% increase in our recurring revenue in the non pay TV part of our recurring revenue, which is really a combination of obviously the semiconductor business growth and then also the non pay TV parts of our media part of our business, which is obviously OTT, e commerce, consumer electronics, social media, are contributing to that growth. And we’re seeing recurring revenue growth even when you put the declines in pay TV in there sequentially and year over year. We’re happy with the recurring revenue growth overall.

Scott Searle, Analyst, Roth Capital: Okay, great. Very helpful. Then Paul, maybe on the semi front, I think you had some comments. If the semi deal does not happen this year, I’m wondering if you could parse that a little bit more. I know this deal has been fairly complex, but is there an expectation that it maybe doesn’t happen or it’s just taking more time to close?

Because it sounds like you got multiple avenues now, like you said, or multiple shots on goal to get to the higher end of that range. But I’m kind of wondering where your enthusiasm with hybrid bonding in the large semi deal kind of sits and how we should be thinking about 2026 on that front?

Paul Davis, President and CEO, Audia: Sure. I want to be clear. Our goal and our expectations is still absolutely to close that deal this year, but we have to plan for the alternative. And so we’ve been doing multiple things along that front. One, we’ve been working really hard to find ways that we can pull in other deals and really proud of the team’s effort on that front.

And so now we have multiple pass if something doesn’t happen, it’s always good to have multiple pass to achieve the revenue goals. The other thing is if for some reason we can’t get there with that, then we were ready to We’ve referred to it before as a year of action and we’ll be ready to take a different strategic path if we need to with that customer. And it’s something that we don’t take lightly when we need to, but we’ll be prepared to ready to if we need to go down that path as well.

Scott Searle, Analyst, Roth Capital: Got you. Very good. Lastly, just to throw in, I’m wondering if you could provide a little bit more color on the rapid cool direct to chip. Sounds very exciting. I think you said medium or intermediate term to longer term.

So in terms of the commercialization of that, maybe the process to get there and kind of maybe a time frame that you put around that. And one other high level question. There had been some, I guess, commentary coming out of Washington a week or so ago about the taxation of intellectual property. I’m just wondering if you had any high level thoughts on that. Thanks.

Paul Davis, President and CEO, Audia: Yeah, I’ll start with that second question first because otherwise I’ll forget because I’ll get so excited about rapid cool. I’ll start on the, what I’d say is really speculation out of Washington and it’s really nothing more than that. It was a Wall Street Journal article. I think someone wanted to float an idea that came across. There’s really not a lot of details and if and when there’s more, we’ll comment on it.

But until that time, it’s really not worth spending a lot of time on it because it’s hard to know what’s really even even floated out there given the lack of detail there. With respect to rapid cool, yeah, we’re very excited about this. It is still fairly early on, but we’ve seen some really exciting results in our prototype and our R and D efforts that we’ve had. We’re working, as I mentioned, with industry partners and potential customers about our test results and what it looks like. And this is what we do really well.

We focus on industry needs. So a few years ago, the team looked at what are some of the key areas that are need and what are our strengths. Hybrid bonding is clearly a strength of ours and something that we have focused on as well as advanced packaging. And the idea that came from our world class engineers was what if we were able to directly bond the cold plate directly to the silicon and really take out a lot of unnecessary parts that make cooling the chip much more difficult. And that’s what the team came It sounds easy when I say it.

It’s an incredible engineering feat what they’ve done and what we’re hearing from our partners and customers is it’s better than anything else that they’re seeing out there. And so we’re very excited about the potential of it, but it does take time to get from where we’re at right now to ultimately commercialization and then revenue that we see. So we do see it as a medium to long term opportunity, but one that could be very substantial for us down the road.

Scott Searle, Analyst, Roth Capital: Great. Thanks so much. I’ll get back in the queue.

Conference Operator: Our next question comes from the line of Kevin Cassidy with Rosenblatt Securities. Please go ahead.

Kevin Cassidy, Analyst, Rosenblatt Securities: Yes. Thanks for taking my question. And maybe to drill down a little more on rapid cool. It does seem very exciting technology. Do do you see this as applications in the data center, or do you think it’s in the high performance at the network edge where maybe liquid cooling isn’t practical today?

Paul Davis, President and CEO, Audia: Yeah, think right now we’re targeting really is the data centers. If you look at my prepared remarks and the topic there, that’s what we’ve focused on and seeing the needs there. It is a direct to chip technology and one that can actually work with other cooling technologies as well. It’s not something that is going to necessarily compete with other data center related cooling technologies, whether it be air cooling or liquid And so it is unique in that way and we’re pretty excited about it. Our roadmap though does create potential for other applications for it and we are looking at other ways that it could apply to other applications.

So stay tuned on where it can go as well.

Kevin Cassidy, Analyst, Rosenblatt Securities: Okay. Great. And the congratulations on landing the ST Micro. You said it was hybrid bonding. Is that related to chiplets?

And do you expect there would be a lineup of many other semiconductor companies that are looking to move to the chiplet technology?

Paul Davis, President and CEO, Audia: Yeah. Know, I can’t get too much into the details. You know, what we said on the it’s a portfolio license to our semiconductor portfolio. What we talked about was what’s driving our license agreements generally, which is hybrid bonding in the semiconductor space and certainly chiplets, especially in logic space, which is different than what ST microelectronics is focused on. It certainly is an area of focus for where we’re seeing hybrid bonding adoption.

Broadly speaking, we’re seeing more and more companies announce new chip designs that they intend to launch or have launched here in the coming months to years. So we’re very excited about that as well as you know well, Kevin, what’s coming in high bandwidth memory here in the near term with what Samsung and others are talking about with HBM 4E and HBM five as we get to 16 layers and then ultimately to 20 layers and the need for hybrid bonding memory as well.

Kevin Cassidy, Analyst, Rosenblatt Securities: That’s great. Great progress. Congratulations.

Paul Davis, President and CEO, Audia: Thanks, Kevin.

Conference Operator: And our final question comes from the line of Matthew Galinko with Maxim Group. Please go ahead.

Hamed Khorsand, Analyst, BWS Financial: Hey, good afternoon. Thanks for taking my questions. I know you’re not guiding to quarters, but can you give us a little bit of sense of how the back half might shape up in terms of balance? Should we kind of be expecting a fourth quarter concentration just given the multiple opportunities you have? Or how should we be thinking about timing?

Keith Jones, CFO, Audia: Hey, Matt. Good talking to you. So for us, when we just take a look at our real focus is on getting the proper economics for the deals, right? I think the relative closing of those deals that we have kind of talked about is, you know, our focus is within the year. I would just really kind of, kind of focus on that.

So, you know, with that being said, I think the momentum that we see makes me quite excited, and kind of where we’re at at the particular stages. And then Paul did a really good job of talking about some of the progress that we’re making on other deals that wasn’t necessary on our original forecast for the year, and those are progressing quite well. So, as we sit here, we’re kind of in a really good position, quite frankly, in terms of there’s many options that we have to kind of achieve that target. How that balances out from one quarter to the next is probably less important versus closing those deals and get them done. But in any event, we’re very much dedicated to that guidance range.

Just speaking upon that, you know, what we really do see is, you know, that aspect of the range. We try to be very transparent in what you have. We’re reiterating guidance. And then quite frankly, with the options that we have, you know, the top end of the guidance as well is still in play, very much so as, you know, we typically talk about that from a midpoint perspective, but there is a great deal of momentum that we have in our business.

Hamed Khorsand, Analyst, BWS Financial: Thanks. And maybe just as a follow-up on your comments about, caution on spending and bringing the spending down a little bit. If you do find yourself signing some larger deals in the third quarter or early in the fourth, do you see potentially bringing some R and D back up in the back half of the year, if you’re feeling more comfortable with revenue levels in the back half, and particularly the end of the year?

Keith Jones, CFO, Audia: That’s a great question, Matt. And then, specifically, one of our main priorities in our business is to continue to innovate, and we take that very, very seriously. The spending that we noted in that decrease from a midpoint of formerly 170 to 163, that is primarily driven on the selling and general administrative side of things. For R and D, there’s a few things that are a little bit much further out that we’ve adjusted the timing on that doesn’t have a near term impact on revenue. But with that dedication to innovation, quite frankly, you will see some growth, some slight and modest growth on the R and D side of things.

It’s where on the SG and A, we tightened the belt, so to speak, and delayed the timing on a few things on a strategic basis without harming our, really our long term prospects. But R and D is something that we’re committed to as a company. And anytime we see an opportunity that we can accelerate our business, we’ll capitalize on it, and we’ll make that spend.

Hamed Khorsand, Analyst, BWS Financial: Great. Thank you.

Conference Operator: And with no further questions in queue, I will hand the call back over to management.

Paul Davis, President and CEO, Audia: Thank you, operator, and thanks to everyone for being with us today. I’d like to thank our employees for their continued dedication and hard work. In the third quarter, we will be participating in Rosenblatt’s Age of AI Virtual Conference on August 18, and we will also be attending the BWS Investor Conference in New York on August 20. We look forward to seeing you at these and other upcoming events. Thank you for joining us today.

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