Eugene Scherbakov: But you see we are very optimistic about our situation. I mean there’s order and also some applications for our latest in Germany. For example last year despite of this strong not good economic economical conditions our revenue in Europe and also included the Germany was a little bit go up and you see of course EV applications in Germany in particular it’s a very strong application for our lasers and we also observe the trend because all manufacturing potential existing or potential manufacturing electrical cars they would like to produce battery for their cars mainly in Europe including also Germany. And this is the one for IPG it’s a very good sign because our lasers our other solutions will be acceptable by our customers here.
Operator: Thank you next question is coming from Keith Housum from Northcoast Research, your line is now live.
Keith Housum: Good morning guys; thanks I appreciate it. I was hoping that could expand on a commentary regarding the hiring of new sales positions in the quarter and expectations going forward. Can you provide some context in terms of how much of an investment you guys are making and perhaps where some of the investments can be occurring? Thank you.
Timothy Mammen: It’s occurring on a pretty broad base due geographically North America in Europe some of our Asian entities as well. We’re targeting strategically growing a broad set of end markets right we’ve got the tremendous opportunity on the welding side which covers a very wide diversity of industries whether it’s in automotive or fabrication other industries as well. So we’re investing in key account management and capability around that application. We believe we’ve got very strong opportunity for example opportunities and continuing to grow cleaning applications the new drying application some of the more specialized areas and more advanced applications such as semiconductor. So we’re really historically the company’s been very much driven by an OEM customer base across a narrower set of applications.
The build out of the sales force is to really add capability and depth and strength to cover what are very significant growth opportunities in a broader set of applications for the company that’s how I best describe it.
Keith Housum: Helpful I appreciate that. As my follow up some of the cost reductions you were referring to in terms of the made in high level lasers. At what point during the year should we start to see some of that benefit gross margins?
Eugene Scherbakov: The first results will be demonstrated in the second quarter because first what we will introduce is medium power lasers and the third and fourth quarter we will start to introduce to our customer high power it means for 8 kilowatt up to 20 kilowatt lasers.
Operator: Thank you next question is coming from Mark Miller from The Benchmark Company, your line is now live.
Mark Miller: Can you give us a feeling for your outlook for immobility opportunities?
Timothy Mammen: Overall this year Mark we’ve as I mentioned at the beginning we’re doing a lot of work outside of China with major automotive companies in Europe. We had a robust pipeline of sales in North America as well last year. It’s probably as I said that the first half of the year is going to be slow on immobility but we’re expecting a pickup. I think when you start to look at some of the data that’s out there last year maybe 400 gig of total capacity was added that was a slow-down 400 gig going to come on stream this year which drove sales last year in 2023. There was a significantly higher amount of capacity that came on stream which drove the strength in 2022. As you look out there’s an expectation I think more than a terawatt of capacity has to come on stream in ’25 and ’26 that would imply that towards the end of this year and at the beginning of ’25 there should be a meaningful pickup in demand around EV globally.
Mark Miller: I’m just wondering in China especially in terms of EVs the softness there how much of it is just attributed to softness electric vehicle demand versus any competitor having an impact on the EV market?
Timothy Mammen: I think it’s more the capacity that they had built out and that they’re actually growing into that capacity so EV demand in the first half of last year was pretty weak you’re absolutely right. In the second half of the year though it picked up quite meaningfully I think I should have got the data at hand but a significant and quite high proportion of total EV sales of total vehicle sales in China or EV I haven’t quite got the number right here at hand. So I’d say the EV market the end market in China has started to improve particularly in the second half of last year and I think total EV sales for about 40% of light vehicle sales.
Operator: Thank you next question today the follow-up from Jim Ricchiuti from Needham & Company. Your line is now live.
James Ricchiuti: Thanks I wanted to ask about the systems business which showed some nice sequential growth and I wonder if you can talk a little bit about what’s driving that whether you’re seeing some impact on the systems business on the cleaning side or is that some of the newer drying applications or is it just shrinking welding in general?
Eugene Scherbakov: First of all of course we’ll see the very big potential for systems for cleaning applications. We already start to demonstrate to our customer into sell some systems and the first reaction from customers is very positive because a lot of different applications and for such kind of applications also we have to provide flexible enough systems but again combination of our high power pump lasers I mean high power up to medium power up to three kilowatt again together with our scanners together with our monitor and finally with integrated box we can provide this such kind of subsystem to our customer not final system because final system it’s much more complicated it must be of course coordinated with final customer but this subsystem flexible subsystem for different applications for assets will be and we also demonstrate this valuable product.
