So, we are on a good track, but we have still some dependencies on the OEMs. And as you also said earlier, right, the OEMs defines start of production, and they will also let us know when they’re doing this kind of software updates over the air.
Nick Doyle: Okay, thank you. And then what part of your technology stack drove the AIoT win? I guess why wasn’t this piece limited by the FOU? And can you talk about the size or timing of the win. You had – I think you had about a $5 million win with a big tech company in the fiscal one quarter, 1Q ’22. It’s bigger than that?
Stefan Ortmanns: So, over the last couple of months, we have made great progress also in the non-transportation space. We have in Q1 four product launches, yes, one in Korea that’s for home, one in China, and two in North America with well known companies, industrials here, right? And we had also another big design win in North America for wearables. We are still under the MOU, so we are selling technologies which are applicable, for example, audio AI-embedded solutions and text to speech.
Tom Beaudoin: Yes, so just a little bit on that. I mean, we’ve said all along that there were certain elements that we were able to advance prior to the expiration of the FOU. Those were clearly defined in the contract with Nuance, now Microsoft, and that’s what we – in the short term, that’s what we’ve been pursuing. And then as of October, there will be no restrictions.
Stefan Ortmanns: And our focus, Quinn, is on industrial IoT variables, also health, well-being, and we are also in discussion with big companies, especially North America and smart home and office.
Tom Beaudoin: Yes, some of those will have to wait until October, but we’re getting ready.
Nick Doyle: Thank you.
Operator: Thank you. [Operator instructions]. And our next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open. Please go ahead.
Will O’Brien: Yes. Good morning, everyone. This is Will O’Brien on from Mark Delaney, and thank you for taking my question. Can you give us some additional color on OEM feedback to Chat Pro, which you featured at CES, and how broad-based is the OEM interest, and any color you can give on the PPU opportunity?
Stefan Ortmanns: So, good morning again. Yes, it was really amazing feedback from all OEMs from North America and big OEMs, European OEMs, OEMs in Korea, Japan, and China. I think that’s clearly a game-changer with Chat Pro, but we are also going beyond Chat Pro. Maybe not sure whether you have seen also our Cerence Assistant with NLU plus here, right? So, we clearly have changed the dynamic in the market here. Feedback was amazing. Some of the OEMs told me actually, hey, when can we have it in our car? We have various discussions also with our sales force and OEMs. I think they want to have it ASAP, as soon as possible here. Really, there are huge opportunities, and it goes far beyond Chat Pro. When looking at the PPU, I mean, I cannot share everything here, as you can imagine here, but also here we hope that can also drive our future revenue.
And as you also mentioned earlier, right, we are going to address also cars on the road. And what we can share is, I mean, you saw also the press announcements from both VW and Skoda. They’re trying to bring it in also on cars on their own, which will also drive revenue on our side.
Will O’Brien: Thank you for that. And then if I can sneak in one more question. So, with the added company focus on Gen AI, what does that mean for the company’s OpEx for the business? And any additional color you can give there on kind of the gross margin opportunity for some of these new Gen AI opportunities or applications you all are working on.
Stefan Ortmanns: You know we are very sensitive to costs here, right? So, there are actually no incremental OpEx required. You have heard also about our partnership with NVIDIA. This is also part of our story here. A very important partner now to us. Yes. And we expect gross margin, as mentioned by Tom here, right? So, overall, we are very sensitive to costs here, right? And with our partnership engagements, right, we are on a very, very good track. It is also worth to mention here that we are using a hybrid solution, meaning embedded and cloud. And we are doing also quite a lot on the embedded side – edge side, not just for privacy reason, but also for cost efficiencies.
Will O’Brien: Thank you.
Operator: Thank you. And I would now like to turn the conference back over to Rich Yerganian for any closing remarks.
Rich Yerganian: Well, thank you to everyone for joining us on the call this morning. We look forward to seeing you at some of the upcoming conferences or at other times. Have a good day. Thank you.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
