VPG Q1 2026 Earnings Call Transcript

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DATE

May 12, 2026, 9 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Ziv Shoshani
• Chief Financial Officer — William Clancy
• Vice President, Investor Relations — Steven Cantor

TAKEAWAYS

• Total Revenue -- $84.4 million, up 18% year over year, with broad-based growth across all three segments.
• Total Orders -- $102.1 million, a 26% sequential increase, producing a company-wide book-to-bill ratio of 1.21, the highest since 2022.
• Sensors Segment Revenue -- Rose 10% sequentially and 23% year over year, driven by higher precision resistor sales and strong demand in AI infrastructure and defense.
• Weighing Solutions Segment Revenue -- Increased 9% sequentially and 14% year over year, with strength in medical, agriculture, and transportation verticals.
• Measurement Systems Segment Revenue -- $21 million, down 7% sequentially but up 14% year over year, with record DTS sales for a defense missile project offset by steel market softness.
• Sensors Segment Bookings -- $45.2 million, up 29% sequentially, resulting in a book-to-bill of 1.36, the highest in 15 quarters.
• Measurement Systems Bookings -- $24 million, up 32% sequentially, resulting in a book-to-bill of 1.15, with strong performance in defense and R&D tools.
• Gross Margin -- 39%, an improvement from both the previous quarter and prior year.
• Adjusted Operating Margin -- 1.9%, excluding $449 thousand in restructuring charges and $837 thousand in stock-based compensation.
• Adjusted EBITDA -- $5.9 million, representing 7.0% of revenue, down from 7.8% in the prior quarter.
• GAAP Net Loss -- $319 thousand, or a loss of $0.02 per diluted share.
• Adjusted Net Earnings -- $907 thousand, or $0.07 per diluted share, after adjusting for restructuring, stock-based compensation, and FX impacts.
• Cash Position -- $82.5 million with long-term debt of $20.6 million and net cash of $62 million.
• Outlook -- Next quarter revenue guidance set at $85 million to $90 million, assuming constant currency.
• Business Development Orders -- $10 million generated in the quarter, with management reaffirming a $45 million target for 2026.
• Humanoid Robotics Revenue -- Approximately $600 thousand delivered, with expectations to more than double in the second quarter and management targeting 50% annual growth off a $4 million 2025 baseline.
• Revised Operating Model Targets -- 8% to 10% annual organic growth, 46.5% gross margin, 14.5%-15.5% operating margin, and 18.5%-20.5% EBITDA margin over three years, with $20 million in planned cost reductions.
• Capital Expenditures -- $3 million in the quarter; guidance for the year at $14 million to $16 million, in line with a 4%-5% of revenue target.
• Organizational Restructuring -- Implementation of CBPO and COO offices, adding $5 million in annual SG&A costs, and focused on manufacturing optimization and marketing automation.
• DTS Data Loggers -- Used during the Artemis 2 lunar mission and in SpaceX Dragon Crew and Blue Origin test platforms.

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RISKS

• Gross margin for Measurement Systems decreased sequentially due to lower volume and wage increases despite favorable product mix.
• Adjusted free cash flow was negative $3.7 million, attributed to the GAAP net loss and higher working capital needs for increased demand.
• Management stated that "the precise timing and scale of production ramps remain unclear," emphasizing execution risk.

SUMMARY

Vishay Precision Group (NYSE:VPG) reported record quarterly bookings, a backlog surge in Sensors, and robust sequential and year-over-year revenue growth across all three segments. Management introduced an updated three-year operating model featuring higher organic growth targets, margin expansion, and significant cost reduction plans. Adoption trends in AI infrastructure, defense applications, and humanoid robotics are explicitly described as major growth contributors while organizational restructuring is underway to drive execution and scalability.

• Management expects Sensors and Measurement Systems segments to grow faster than Weighing Solutions, improving the overall segment profitability mix.
• Capital spending is projected to remain within 4%-5% of revenue, supporting both CapEx and operational efficiency initiatives.
• CEO Shoshani confirmed, "bookings profile are different than before," with AI, defense, and data center demand driving order strength rather than the previous general industrial base.
• Consolidation of manufacturing will occur within the current infrastructure footprint — not through expansion — to achieve planned operational efficiencies.
• Pricing for sensors in humanoid robotics may fall as volumes rise, with content values potentially dropping from $400-$500 per unit at low volumes to $150-$250 for higher runs, according to CEO Shoshani.

INDUSTRY GLOSSARY

• Book-to-Bill Ratio: The ratio of orders received to units shipped and billed within a period; a level above 1.0 indicates demand exceeds supply.
• DTS: Diversified Technical Systems, a VPG product line specializing in data acquisition modules for harsh environment applications such as defense and space.
• CBPO: Chief Business and Product Officer, a newly added executive organization at VPG focused on unified marketing, product strategy, and business development.
• COO: Chief Operating Officer, new role at VPG focusing on cross-company manufacturing efficiency, procurement, and operational excellence.

Full Conference Call Transcript

Ziv Shoshani: Thank you, Ziv. I will begin with some commentary on our results and trends for the first quarter. Bill will provide financial details and our outlook for 2026. We will also discuss our revised target operating model. Moving to Slide 3. To summarize our Q1 results, we delivered a strong start to the year. With first quarter $84.4 million 18% year over year, reflecting broad based growth across all 3 segments. Orders were particularly robust $102.1 million, 26% sequentially. Driving a book-to-bill of 1.21. Our strongest since 2022. We increased backlog particularly in the Sensors segment, which positions us for continued growth into the second quarter and for the second half of the year.

Gross margin improved from the fourth quarter and the prior year. And we continue to implement additional cost reduction programs. Despite ongoing macroeconomic uncertainty, from geopolitical tensions, booking trends remained strong. Demand was driven by precision resistors from semiconductor equipment, and for data center and fiber optics equipment. Supporting the build out of AI data centers. Orders in Avionics, Military, and Space markets also improved. In addition, orders generated from our business development initiatives $10 million in the first quarter.

Putting us on track to meet our 2026 $45 million With our new chief business and product officer, and chief operating officer organizations, now in place we are focused on discipline, execution, of both our near term priorities and long term strategic plans. While there is still work ahead, we are already seeing improved visibility into our sales funnel and stronger alignment across VPG. During the first quarter, we continued to launch new marketing programs and further sharpen our focus on priority markets. Key customers, our most important growth drivers. I will now review business performance by segment. Moving to Slide 4. Beginning with our Sensors segment, first quarter revenue was up 10% sequentially and 23% year over year.

Compared to the fourth quarter, we had higher sales of precision resistors in the test and measurement and AMS markets. And higher sales of straingages in the general industrial market. Bookings in the sensors were particularly strong $45.2 million 29% sequentially. And representing the highest level in 15 quarters. This resulted in a healthy book to bill ratio of 1.36. The sequential growth in bookings reflected strong broad based demand driven by the industry wide ramp up in AI adoption. With sensors, we saw particularly robust demand related to AI infrastructure. Orders grew for precision resistors used in semiconductor front end and back end equipment supporting the manufacturing, and testing of AI related chips, and systems.

As well as in data centers and fiber optics equipment. Bookings were strong for precision resistors in defense applications. We also continue to see demand for straingages used in humanoid preproduction prototypes. With sensors backlog, reaching its highest level since 2023, we accelerated hiring and training of additional manufacturing personnel to support our plant production ramps. Turning to humanoid robotics. We shipped approximately $600 thousand of product to humanoid makers in the first quarter. In the second quarter, we expect to more than double that amount. Given our customers' focus, for a more significant ramp of production in the second half of the year, we have increased our internal projection for 2026.

Nonetheless, the precise timing and scale of production ramps remain unclear. In addition, we began early discussions with a fourth humanoid maker, a start up developing humanoid platforms for defense, home use, and industrial applications. Moving to slide 5. Turning to our Weighing Solutions segment. First quarter 9% from the fourth quarter 14% from a year ago. The sequential increase was primarily due to higher sales in our other markets. For medical equipment, precision agriculture equipment, consumer bicycles, and in our transportation market, for heavy-use trucks. Weighing Solutions orders 17% sequentially, $32.9 million resulting in a book-to-bill of 1.09. Orders included annual bookings of onboard weighing systems, and higher bookings in our industrial weighing and general industrial markets.

Moving to Slide 6. Turning to our Measurement Systems segment, revenue trends were mixed in the first quarter. as revenue was $21 million, down 7% sequentially, but 14% higher than a year ago. Sales of DTS ruggedized miniature data acquisition modules reached a record high driven by defense missile test project. This was offset by lower sales to the steel market. First-quarter Measurement Systems orders were $24 million, 32% from the fourth quarter and resulted in a book-to-bill of 1.15. The sequential growth reflected higher DTS and PI orders in AMS for the testing of military jet engines and for hypersonic missiles.

Demand for measurement systems used in steel rolling mills softened, despite pockets of growth in India, and North America. Orders grew for DSIs R&D tool used for development of new metal alloys. 1 of the technology highlights for DTS and measurement systems this quarter was the Artemis 2 launch to the moon which included DTS data loggers on board. DTS data loggers were used to measure extreme forces for the astronauts experienced during the launch, and reentry that cannot be fully replicated on Earth. In addition to NASA projects, DTS modules have been used in similar tests for SpaceX Dragon Crew capsule as well as for Blue Origin platforms. Moving to Slide 7.

This quarter, we are pleased to introduce our updated target operating model. Which reflects a path to faster organic revenue growth higher profits and cash flow and significant creation of long term stockholders' value. Under the new model, we are targeting compounded annual organic 8% to 10% over the next 3 years. Which is higher than our previous model for organic growth. We expect our sensors and measurement system businesses to grow at or above these rates. Our model target a gross 46.5% and operating margin 14.5% to 15.5% and an EBITDA margin 18.5% to 20.5%.

This model includes $5 million of annual incremental cost related to the new CBPO and CO organizations, 50% flow through EBITDA, on each incremental dollar of revenue. Moving to Slide 8. The top line of our model is driven by 2 factors. First, we are increasingly aligned with the attractive secular growth areas where VPG has differentiated high performance technology. These opportunities are being driven by advancements in industrial automation systems. Which rely on accurate, reliable, and highly precise sensing and measurements. That requirement directly aligns with VPG core strength and our long term history supporting mission critical applications. While adoption is still in the early stages, we are already supporting emerging use cases across multiple markets.

Including advanced robotics semiconductor equipment used in AI processing, and data center and fiber optics infrastructure. For humanoid robots, specifically, our model assumes that revenue growth approximately 50% annually from 2025 levels. We are building capacity and infrastructure today to support the potential for much higher levels of growth. Second, our sales and marketing and business development operating model is now being transformed into cross company processes. IT platforms, and execution discipline. Which are expected to support the growth of both cyclical and secular growth markets. In addition, we continue to see durable long term opportunities in aerospace and defense. While demand can fluctuate, quarter to quarter, investments trends remain solid.

Technical requirements are increasing and these markets continue to align well with VPG differentiated capabilities. Operating leverage is a core element of our model. Under our COO led operating structure, we have a clear plan to deliver more $20 million of cost reductions and efficiency improvements over the next 3 years. These operational excellence initiatives are targeted at creating structurally more competitive cost base not just a near term margin improvements. Our cost programs focused on manufacturing footprint optimization, increased automation, and procurement efficiencies across our global supply chain. Importantly, these initiatives also support increased market share, by improving execution, shortening lead times, and enabling efficient scaling as demand increases.

In summary, our operating model reflects faster organic growth and attractive profitability. Supported by differentiated technology durable secular demand drivers. And a more focused and efficient organization. We believe this position VPG well to create long term value for our customers and stockholders. I will now turn it over to William Clancy. Bill?

William Clancy: Thank you, Ziv. Referring to slide 9, and the reconciliation tables of the slide deck, our first quarter 2026 revenues were $84.4 million and gross margin was 39%. the first quarter improved from the fourth quarter. Sequentially by segment, gross margin for Sensors was 34.8%, increased primarily due to higher volume favorable product mix, manufacturing efficiencies partially offset by unfavorable foreign exchange rates and higher personnel costs. Weighing Solutions gross margin of 34.2% increased from the fourth quarter mainly due to higher volume and favorable foreign exchange rate. Gross margin for Measurement Systems of 52.6% decreased on the fourth quarter primarily due to lower volume and wage increases partially offset by favorable product mix. Moving to Slide 10.

Our first-quarter operating margin was 0.4%. Adjusted for $449 thousand of restructuring costs $837 thousand of stock based compensation, adjusted operating margin was 1.9%. The restructuring costs primarily relate to severance costs from the implementation of our new CBPO and COO organization, and the adjustment for stock based compensation expense reflects our evolving compensation structure due to these recent organizational changes, including the hiring of senior executives, the expansion of equity based incentive programs to attract and retain key talent. Selling, general, and administrative expense for the first quarter $32.1 million 38% of revenues, which was higher than Q4 reflecting hiring for the new organizational structure, incentive compensation accruals for 2026, and unfavorable foreign exchange.

Unfavorable foreign exchange rates impacted adjusted operating margin in the first quarter $800 thousand compared to the fourth quarter, $1.3 million from a year ago. GAAP net loss was $319 thousand or a loss of $0.02 per diluted share. Adjusted net earnings were $907 thousand or $0.07 diluted share adjusted for restructuring costs, stock based compensation, and the impact of foreign currency exchange rates on our balance sheet. The GAAP tax rate for the 2026 81.2% and operationally, 31.5%. For 2026, we are assuming an operational tax rate of 26%. Moving to slide 11. Adjusted EBITDA $5.9 million or 7.0% of revenue compared to $6.2 million or 7.8% of revenue in the fourth quarter.

CapEx in the first quarter $3 million For 2026, we are projecting $14 million to $16 million for capital expenditures. Adjusted free cash flow was a negative $3.7 million for the first quarter due to the GAAP net loss and the higher working capital required to support higher demand. This compares to a positive $1.3 million in the fourth quarter. As of the end of the first quarter, our cash position was $82.5 million and our long term debt was $20.6 million The resulting net cash $62 million and the unused portion of our credit facility provides ample liquidity to support our business requirements and to fund M&A.

Regarding the outlook, For the 2026, expect net revenues to be in the range $85 million to $90 million assuming constant first fiscal quarter 26 exchange rates. In summary, quarterly bookings exceeded $100 million for the first time since 2022, and resulted in a book to bill ratio of 1.21. We continued our progress with our business development initiatives including the humanoid robot, and we are excited about the potential of our new organization which is reflected in our new target model. With that, let's open the lines for questions. Thank you.

Operator: At this time, I would like to remind everyone in order to ask a question. Your first question comes from the line of John Edward Franzreb with Sidoti and Company. Your line is now open. Please go ahead.

Analyst (John Franzreb): Good morning, everyone, and congratulations on a good start to the year. I would like to start with the guidance it is been a while since we have been at that kind of revenue threshold. Can you kind of talk about how we should think about the profit profile of that kind of revenue? Should it be in line with historical gross margins? Or should we think about it in terms of incremental operating margin contributions like we had in the past?

Ziv Shoshani: Good morning, John. So let me start by saying that the guidance is already based on the new model. The new model is setting a new baseline. In respect to the high organic growth in the prior model, in addition to a much more robust and significant cost reduction $20 million over the next 3 years. In addition to that, we are taking into account the new investments in respect to the new organization, the CBPO and COO, which would increase the SG&A $5 million. The scalable model where we should see incremental operating margin. Based on higher revenues would remain, but the baseline would change.

The historical financials were based on the old models, while the new guidance is based on the new model. But the incremental, as I indicated before, the incremental-- by having incremental revenue, which we should see a more substantial incremental operating margins as we did before.

Analyst (John Franzreb): that is great to hear. that is great to hear. And you know, it pointed this out as even your prepared remarks, you know, the bookings profile takes us back to when coming out of the post COVID bookings when we had a bunch of quarters of substantial book to bills. We are halfway through the second quarter. Do you see that kind of scenario unfolding in the current year that we are going to have sustained booking profile after like, I guess, 3 years of averaging under 1.0?

Ziv Shoshani: Yeah. So you are correct. The booking, the absolute bookings mainly, you know, reminds what or maybe in a way similar to what we had in 2022. But the bookings profile are different than before. Currently, the booking are strong in demand for test and measurement, semiconductor equipment, data center fiber optics, and Avionics, Military, and Space. In addition to general industrial. So what we see is very strong demand around AI infrastructure in addition to defense. While in 2022, the general industrial were much stronger. So the net bookings could be similar, but the profile is very different. Regarding your other question, we are optimistic regarding how the year is going to look like.

And at this point in time, despite our short visibility, we do see we do see and believe that we will see a continued positive trend. Also moving into Q2.

Analyst (John Franzreb): Got it. And 1 more question. I will go back in the queue and let someone else take the lead. But I do want to go back to the quarter that you just reported. Revenues came in somewhat better than expected. When you look back at what your initial expectations were versus the revenue profile for the quarter, where was the biggest upside?

Ziv Shoshani: The biggest upside okay. So let me say the following. Since we have longer lead items in respect to shorter lead items, What we have seen naturally on the shorter lead items, higher demand than what we have anticipated. So to that respect, I think it was Avionics, Military, and Space in the measurement systems where we have a shorter cycle time. Got it.

Analyst (John Franzreb): Thanks, Ziv. Congratulations again. Thank you. Bye.

Operator: Again, if you would like to ask a question, press 1 on your telephone keypad. Your next question comes from the line of Josh with B. Riley. Please go ahead.

Analyst (Josh Nichols): Yeah. Thanks for taking my questions. Great to see big milestone bookings over $100 million for the quarter. I wanna dive in a little bit more just on the humanoid aspect. Like, 1, you mentioned there is now you are early to discussions with the fourth humanoid developer, Just at a high level, can you characterize 1, like, the size and tier of that potential customer? And just as 1 follow on you mentioned, like, the humanoid assumption. Was it you would be growing humanoid business at, like, a 50% CAGR through 2026, 2027. And what that kind of implies from revenue. Perspective.

Ziv Shoshani: So absolutely, Joe. So let me first take your first question regarding the fourth humanoid potential fourth humanoid customer. So we are speaking about the start up company. Which are in the very early stage in defense, home use, and industrial application where we have reached to them And I could say that we are in the very early engineering design discussions. But as you know, the it is a with those customers, it is a fairly long cycle time. So it is good that we are there. They believe they have a strong business, I would say, prospects and we are there to help them you know, solve their problems in or their challenges in this to sensors.

Regarding humanoid, we have, you know, the adoption rate is still fairly low. There is a lot of discussion. There is a lot of hype around humanoid prospects. We still believe this is a very good market to be in. I could say that within the 2 customers where we have a more established, I would say, footprint. We are still in the preproduction levels. We did booked I would say or we have recognized revenue of $600 thousand in Q1. We do believe that, we could potentially more than double the revenues for humanoid revenues in the second quarter.

And we are I would say, much more optimistic regarding the second half of the year in respect to, volume of volume production volume. I would say that there are some discussions regarding already lower volume and higher production run rates. We have the infrastructure to support what we have the infrastructure, and we are setting all the related supporting systems in order to support a much quicker I would say, upside or demand from our customers. But we are still I would say, very optimistic regarding this trend. Regarding the models, since we wanted to provide the 3 years model, and naturally we do believe that this is a strong sector. But we had to take certain assumptions.

So, we did not want to, you know, in order to be in our I would say, in a more in the in a zone where we believe at this point, based on our own internal estimate estimation since we have no visibility, we decided to take 2025 as a baseline. And based on that, to, go for 50% year over year increase, which we believe it is reasonable and feasible It could be much higher than that. But at this point, we do not want to speculate. So this was kind of a baseline assumption for the 3 year model which we wanted to announce.

Analyst (Josh Nichols): Yeah. Thanks for that. I was just-- it sounds like you are targeting for this year, like, $5+ million for humanoids. So growing that would be, like, you know, maybe low teens, millions of revenue on the out year, but as you mentioned, based on some of the production ramps that some of these companies are talking about, you are using pretty conservative assumptions that are quite achievable, I would guess. Is that fair assessment?

Ziv Shoshani: Let me say that the math you calculated is sound sounds right. I think that at this point in time, I would say that this is what we believe could be a reasonable, you know, assumption. We do hope that things would, you know, would turn quickly. But at this point, we have to put assumptions, and we feel comfortable with this assumption. But you know, anything can happen.

Analyst (Josh Nichols): Yep. Fair enough. Just last question for me. A lot of organizational investments, you have the CBPO, the COO, of course. Could you give a little bit more color on, like, how these new have already been impacting the companies like go-to-market capabilities and these operational excellence initiatives that you have had underway? Curious to hear a little bit more there.

Ziv Shoshani: Okay. Good. So let me start with the COO. With the COO, we already established a global procurement, a multiyear manufacturing footprint, streamlining manufacturing footprint, and also a team dedicated for efficiency and improvement efficiency and automation. I think that to-- at least our model calls for over 20 million $20 million savings in 3 years This is a number which exceeds significantly our historical savings or improvements to that extent. To that extent. So we feel strong, and they are and by the way, I will touch based on that in a second on the CBDO, but they are cross company I would say, operating units which are looking at the complete company and are setting those projects.

On the CBDO, we have now a unified, I would say, a unified marketing team We have started to use much more marketing automation tool. We are moving into a unified CRM. We are moving into I would say, a more unified data system, which is going to, streamline or consolidate all the data from all the systems in the organizations, ERPs, CRM, so on and so forth. We have already established a sales operation team cross company, which are looking at lead time service level, demand management, So we are moving ahead with a more holistic approach to provide I would say, cross-company dashboard in order to set in line best practice processes and capabilities.

Analyst (Josh Nichols): Appreciate the color there. I will hop back in the queue. Let someone else take a turn.

Operator: Again, if you would like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Jason Smith with Lake Street Capital. Please go ahead.

Analyst (Jason Smith): Just wanted to look at that updated 3 year target model. At a high level, do you expect the segment mix to be relatively stable compared to how it is today?

Ziv Shoshani: Well, if you look at the at the at the 3 year target model, you will see that the sensor segment as well as the measurement system segment outperform, growth outperform Weighing Solutions. So as we are looking for those segments to be to grow faster we should expect also to see a more favorable so called segment mix from a profitability standpoint. But we do believe that at this point in time, the emerging growth engines are coming from sensors and the measurement systems. Gotcha.

Analyst (Jason Smith): That makes sense. And maybe I missed it, but the 45 million in orders that you are targeting for new business development in 2026, is that still the target? Or do you think there is upside to that just given the traction you are currently seeing in Q1 and Q2?

Ziv Shoshani: As we indicated before, we booked in Q1 $11 million of business development. Projects. I think that at this point in time since we are I would say that at this at this point in time since, we have we are only reporting Q1, I would say that 45 million is still, is still the target. It may change, of course, as we move ahead, but at this point in time, the 45 million was the original target, and I and I believe that it is achievable.

Analyst (Jason Smith): Perfect. that is helpful. I will jump back in the queue. Thank you. Thank you.

Operator: Again, if you like to ask a question, press 1 on your telephone keypad. And now we will take John Edward Franzreb from Sidoti and Company. Your line is now open.

Analyst (John Franzreb): Thank you. Just a-- on the targets, the 3 year target, what is the slope you expect of achieving those targets Is it gonna be is it gonna progress linearly, or is it going to be back ended?

Ziv Shoshani: If we I am sorry, John. If we speak about 20 you speak about 2026 or the 3 year target?

Analyst (John Franzreb): The 3 year target, sir.

Ziv Shoshani: At this point, again, given the visibility, we just assumed a linear a linear baseline. Again Okay. it is it is, you know, it is it is really it is 3 years. So we have assumed a linear. Got it.

Analyst (John Franzreb): And in light of some of the investments that you are undertaking, how does that change, or does it change the CapEx budget Well, starting with this year and how should we think about it on a go forward basis?

Ziv Shoshani: So in a way, it is a very good question given the fact that the significant over $20 million in operational excellence, which would relate also, to streamlining of manufacturing would require CapEx. At this point in time, we believe that I would say that 15 to okay. Let me say differently. I still believe that we could meet the 4 to 5% of revenue from a capital spending standpoint. And achieve the necessary or the targeted operational excellence initiatives. So it would be between 4 to 5% of revenue. Understood.

Analyst (John Franzreb): And you just kind of touched on this. You are talking about streamlining to low cost manufacturing sites. Does that mean moving within your existing footprint or adding to it?

Ziv Shoshani: We have a very large infrastructure and, we believe that we would be able to continue and consolidate within our own manufacturing footprint. Got it.

Analyst (John Franzreb): And just 1 last question circling back to the robotics, humanoid robotics comments. there is I guess I guess the first question is the baseline from what I remember for 2025 $4 million in revenues with humanoid robotics. that is the starting point.

Ziv Shoshani: This is correct. Okay. Just wanted to double check that.

Analyst (John Franzreb): And that there is been a lot in the press about downward pricing on vendors in humanoid robotics because competitive levels are getting pretty sizable out there. Are you seeing that? What walk us through the pricing model and how that is playing out relative to what maybe what you thought I do not know. 3, 6 months ago?

Ziv Shoshani: Naturally, this is you know, this is a in a way, we cannot get to too much details in respect to the moving parts. Pieces, but I could say that on a high level, no doubt, it is a very competitive market. And we believe that we are that we can play in that market.

I would say that if we are speaking about on a high level, if we are speaking about tens of robots per week on a high level, the content of all the sensing parts within a robot would be between 400 to 500 while if the volume moves to many hundreds or more than that, we believe, again, there is no solid or final negotiation with anybody but we believe that the expectation is to go to around about, I would say, 150 to 250 levels. Thank you, Ziv. Perfect. I appreciate the additional color. Congrats again.

Operator: There are no questions at this time. I will now turn the call back over to Steven Cantor for closing remarks.

Steven Cantor: Thank you, Bella. Before concluding, I would like to note that we will be participating in the B. Riley Investor Conference this month. And the 3 Part Advisors and the Sidoti conferences in June. We look forward to updating you next quarter. Thank you, and have a great day.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect. Everyone, have a great day.

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