DZS (DZSI) 11 Feb 222021 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the DZS Fourth Quarter 2021 Earnings Conference Call. At this time all participants are in listen-only mode. After the speaker's presentation there'll be a question and answer session. [Operator Instructions]. Today's being that advised be conference recorded. is Please hand over Head to would Investor now speaker conference to like Moreau, I your the today, Relations. of Ted Please go ahead.

earnings the Katherine, fourth welcome you, to Thank quarter and XXXX conference call. DZS

forward-looking report reconciliation indicated, projections financial the to the These in Investor in on as our on company's its corresponding that together available basis. SEC, forward important shareholders GAAP fourth unless determined could us or provide DZS provided a earlier. this to Vogt; XX-K forward-looking of to CFO, the are materially analysts Charlie shareholder documents metrics and report Form website or call in contained results are expectations being numbers and close, filed with published and our Misty or and information. the the differ Relations well refer shareholders, you XX-Q as items Investor company. looking will note the results as events, market filed factors to and to after forward-looking that only section current recent may from performance shareholder website. financial otherwise cautions are the non-GAAP insights, President On contained the of X-K, a These statements well quarter Yesterday the the documents those reports provide statements section market Joining to product, are shareholder other projections such today events the and on Please Please future future GAAP referenced of that updates this we and financial on report actual CEO, most statements. prospective The Relations we that risk of including materially. section regarding company was and DZS differ XXXX being Kawecki. of with you with statements for the company the business identify as call, cause that actual

our fourth have -- to and the Within the at I that will we that simultaneously Analyst announced now our pleasure and our call Investor May over headquarters Texas announced host we And webcast. on the be XX, Day turn to Charlie. we quarter shareholder in Plano, will report, HorizonsXX

Thank you and Ted guests. analysts and welcome investors,

As home posted yesterday class being comprehensive Ted by a quarterly optical a technologies upgrade the business, where the for report early connected update financial communications provides business in is shared dual infrastructures sub closed, phase results, infrastructure The on and our rapidly after and cycle, trends market we our market are services. gigabit for XXXX of copper replaced broadband which symmetrical outlook. legacy industry our and gigabit shareholder XX

based upgrade a services generation global addition, experience homes, densification providing their broadband software and for to driven fiber packet a networks creating infrastructure transformation landscape service communication fixed In is is for and cities. and demand This of of this power is of innovation DZS and connected high and launch a fueling communications mobile platforms cloud reshaping key becoming next the broadband buildings enabler simultaneously proliferation XG services. and networks. new providers connectivity wave of speed for

accelerate the innovation -- continued and Optical a during eliminating an equity XX setting of Software playbook $XX revenue and our and continued Throughout and new balance X.X freight of and a utility XX executed XX% with XX of and constraints, go-to for book-to-bill and fiber new and agile ratio million year-over-year, and fiber team raise Broadband leadership from was upgraded $XX our fiber backlog. an in Optical a Despite connectivity XG Business, In increase to our across DZS, We Strong builders, providers customers. quarter. products. Portfolio, Connected million sophisticated, Edge vision, $XXX fourth providers. a performance our our began Cloud sheet quarter for year-over-year, range XG global delivered Home municipalities world's and with service top record achieve supply orders XX record five fourth new demand logistics of transformational revenue XXXX Mobile including of of customers the record and aligned the market Edge new most bold backlog. XX chain as introduction Our Connectivity, dollars we a XX% $XX of orders follow-on and global service January XXXX, of sales and increase XXXX debt. XXXX, we year million, excellence which advanced providers centers our the resulted telecom over in setting of strengthening internet we Solutions million

full were in year converted of an million, increase XXXX, revenue to that new delivered For $XXX and representing increase. orders, XX% $XXX representing year-over-year we of million million $XXX of orders a Record year-over-year, XX% year-end America, We record of XXX% East and the new increase with record Middle and new XX Europe, backlog at spanning year. during customers million Africa. XXXX North revenue including year-over-year, closed XXX a $XXX customers

solutions of deployment businesses are serve. broadband base, the across hyper-fast expanding an creating customer new customers homes communities and opportunities and the value the we enhancing enable we reach, in our they added in As

automation, solutions. mobile expand software broadband specifically, investments with our solutions to portfolio, and our assurance cloud differentiate orchestration, network our and consumer continue with service and We fixed incremental experience

to we software sdNOS, In XXXX. defined in in XXXX, our system software will our released addition portfolio unified consumer unveil operating network networking

Time Bringing Norm DZS, Adding lead Vice cloud has -- Calix now to a our DZS optics Reiss is MediaKind, Officer software. access industry of DZS experience history fixed served talented Prior Cable. networks. mobile leaders our Burke, improvement led operations I solutions Chief remarks at the cloud new in pleased manufacturing. chain to appointment transitions and compliance. been Most the our from Yohe ecosystem to and Warner decades decades designed announce Chief development, his our Strategic is DZS. leading business focused to Gunter our Foust growing opening mobile solutions. mobile mergers has software, experience partner people. Marketing newly Officer. joined career and which into Gunter sorry as while logistics brings intelligence, mobile operations networking will marketing Chief industry he Operations. Comcast past sourcing, Our at continued Jennifer AXX, of years, to role, Each for three several at Chief joins entire of are areas in our joined and and in AXX two with Jennifer of responsible converged cybersecurity team artificial Officer, created Cyan, edge as roles industry AFC, President Geoff on part our manufacturing Ciena. my supply global in for recently as Calix, be where Shifting two long-term our experience am deep in Operations to and DZS, procurement Marketing broadband cloud Norm margins the brings having Strategy which increase the and acquisitions. and of and Gunter and who has spent improve networking access differentiating Ericsson. now of Officer and and part revenue a software fixed reoccurring of Ericsson, as Networks.

Directors of investments Forum. of currently Calix, standards on from begin DZS Broadband of and strong joins recently product people marketing Hesse a Director XXXX systems. Most President is Development. Senior as and the Bernd leadership Board the at Bernd with foundation Vice the strategic at Finally, resulting We Business was in

in to we and expect While and to persist deliver throughout continued XXXX. the chain we anticipate we year, challenges on created innovation the momentum logistics sourcing growth capitalizing supply customer

today. XG, are opportunities evolution Middle better Chinese ever of which cap into years. We to execute and XG relentless estimated pull business rest to to as industry North than gigabit American push service Adding and pillars, an on seven such has a and essential Australia, an numerous becoming the technology broadband expect experienced simultaneous never East, with to last multi upgrade providers eventually mobile closing, consumers we're a cycle, is to from experiencing service the from drivers, turn billion our and our financial and the XXXX to The specifically, QX Europe, over like Europe outlook. broadband as our $XXX of well our I'd Misty? call as spanning government four prepared that, to Pan XXXX growth the and highlights India XX In grow of North broadband expansion XG to and through Asia. stimulus. vendor, we walk now numerous year full America, Misty With the

capitalized successfully very reached a the the QX strong record that at everyone. fourth the Charlie, that reached of and on and of growth Total $XX guidance. our In an transformational sequentially orders fourth quarter of Also record quarter we wrap and XX% to Charlie increase QX good have you, a the of revenue high in delivered $XXX We Thank for end million a several mentioned. pillars million, year-over-year. morning, XXXX.

First, demonstrating million. upgrade our to XX% multi XX% year-over-year the $XX gigabit sequentially, cycle. Broadband connectivity in revenue success broadband increased

broadband revenue the $XXX For connectivity XX% year-over-year increased year to million.

benefited revenue reflecting two our increased Mobile X% customers basis, momentum sequentially X%, RAN, strong revenue marquee declined Mobile to and after Transport as a to strong million, On Second, in XG year-over-year from on Open in $XX Transport we've by spending XXXX. Japan.

later XG are and in Open opportunities this with from a anticipate about RAN Rakuten’s collaboration of result additional our Symphony design We future reference and our optimistic as this year.

Benefiting higher our million revenue reflected due to diversifying $XX large margin share North mix, and X% increased to in EMEA In throughout XX% revenue increased sequentially of region. have the out XX%, revenue overall the projects Mobile timing sequentially both fourth slightly America, Asia segment. successfully of Revenue growth geographic quarter our fourth year-over-year the in from success the $XX quarter America from region. is revenue. and sequentially, or revenue and our Lastly, our the to XX% increased Americas, XX% XXXX. Americas demonstrating million total North year-over-year Transport several been Rounding our from mix we XX% deployment a geographic connectivity declined Comparing from million. year-over-year also quarter capturing dominated by which fourth has $XX to broadband from

margin increased gross towards normalized performance challenges decisions foreign margins chain within due current exchange Without Our gross America range, of margin year-over-year our the to our have supply was We’ve fourth QX guidance included and QX we EPS been $X.XX would compared approximately EBITDA adjusted investments, associated negative software in during to million, expenses and geographic fee. region. million $X.XX QX points the XXXX XXXX. a compared quarter, currency adjusted directed strategic diversification which North basis in were primarily million fourth XX.X% and license higher non-GAAP our $X.X XX of $X estimate and our sales and one-time revenue operating adjusted quarter and million with record commissions orders the of and In $X reported $XX XX%. the

revenue record XXXX XX.X%. a Regarding efficiency for freight our costs, and delivered a the exceeded and non-GAAP year and points compared XXXX. in year-over-year by geographic per earnings improved supply $XXX increased reflecting our performance gross than million guidance. original chain EBITDA And year operational loss million million logistics was $XX of increased more full progress XXXX. $X margin which mix. compared of Adjusted XXX share we our to XXXX, XX% with initial the to for Despite basis $X.XX doubled in favorable to Adjusted $X.XX,

banking We which our million with in JP financial strategic $XX facility. credit Morgan, no global a $XX improved a balance includes flexibility have relationship a healthy through debt. and sheet cash million new We've with

Limited statement statement several that Board registration our inventory to our existing has S-X material increased availability new expires customer a over strong component registration our forecasts. the approved of past necessitated quarters backlog has raw levels and to with align Additionally, shelf April. Directors in replace

a times of support constraints. during supply to Our helped in chain X.X XXXX were outstanding continued XX balance days with to the ago. QX ago. quarter times XXX XXXX these versus days X.X inventory year Annualized fourth sales has sheet improve compared turns Days year

visibility strong supply the persist gross QX record decline quarter by first $XX to to XX% chain we entering expenses our to to year. guiding to supply million $X throughout industry We including our for $X quarter million. are $XX We opportunities have to to guiding of first constraints the to to we chain $XX operating continued XXXX. anticipate million -- ahead, and XX% typical margins headwinds, million with expect million the sequentially, to seasonality Looking $XX backlog revenue Combining are

guidance between backlog of our visibility expect of Elevated million. we are adjusted $X revenue and a we $XXX greater with result, EBITDA And positive into million million loss demand anticipate to $X and million. customer fueling strong a customer compared diversity $XXX XXXX XXXX. As

past $XXX in Operating are guiding EBITDA gross million prepared million to We strategic benefit the year. remarks. XX% Q&A as million, year over are from adjusted the now That between to to to be and $XXX to expected like operator our year to the in the $XX $XX session. I'd actions resulting call full a full margins to hand completes we facilitate over implemented million, XX%. range expenses from our

Company. Instructions] And Needham question from & first our [Operator Koontz, with comes Ryan

is Your open. line

Thanks where Americas or that's the the X, for Xs that's the there, opportunities. question. across of nice I displacement Huawei in any Tier can and Really give dominantly that. growth U.S. kind color from Xs on us coming Appreciate assume

in also of Thanks, generation my in from builders, emergence wireless what of today, we're municipalities, a there's are so providers. think home is fiber the ILEC the North in North I Ryan. X significant It providers the providers the Tier those smaller that and tried category in as see as service of I made non-traditional of Misty we America. opening internet growth opportunity the traditional providers, up to emerging service said, alternative Yes, into most sort of seeing of fiber, saw to over the And next participate mean, I pretty utility Americas and specifically most America service a came it Xs. remarks. our we Tier highlight revenue great

it that Electric Right, guys like that? I Co assume and Ops providers, like includes folks the power

That's exactly right.

gross you sorts impact quantify And then the can things? either supply expedite on logistics these there margins, or from Great. chain, of those any

specifically And would expedite from eliminated Yes, and in normalized model logistics in same the gross would XX%. and as talked been FX, QX about that have QX, margin the remember existed our if and ironically, you unforeseen in that Japan, fact if freight we margin you QX fees have well.

would logistics, fees, FX and So on expedite specifically if QX been elevated and the a have margin the freight in gross you take Japan basis, XX%. out normalized in end, for the the

thanks Got questions. for it. Great,

open. with Hallum, line Schwab next your Christian Our question comes Craig from is

is Great, XX% thanks midpoint in the maybe few the of for returning taking of only above guidance the not question. growth the the but thinking we're guess, at first and you with we where you Did call. top that now backlog more digit your do the a in beginning drivers given Is letter, the position a over to line that my top growth quickly years, I phone line next nicely in feel up growth? think double highlight, comfortable

me projections if if growth Well, Misty. you I our think look at I'm wrong, for XXXX, correct

X% think our XX%. and between I is range somewhere

$XXX I So above year we're on certainly we end high close of projections our year the for the well a backlog. XX%. with mean, And the million look,

than of we broader door. QX of million can with backlog, I XX% as a from to our well of the think getting I just out today in QX that ASAP the range ship as $XXX do we much normal can perspective. get customer to of we a has lot the estimate as comfortable that XX% mean acceptance in backlog it,

From a solutions we million access the all there's we're ship. the components could to close that customer that if that we had $XXX perspective selling. represent $XXX million to So today,

revert hopefully when soon situation second of shocks in the will given as over be eases visibility people hoping that the customers point, clients this to having system. do that to your patterns? discussions half the will able as strong few quickly you buying And you're chain the maintain, at think of with supply kind some When do to Or think year, last recent business some your backlog? maybe you years, previous

don't anytime to to back soon. to lead going think Well, I XX eight get we're times,

everyone's lot team been got have credit. of I pretty I've with a chain, supply expectations we to give to about fact, regards In my mean cautionary

almost throughout we a XXXX. what fact as to year speaks as going did and chain bad revenue, supply fantastic orders record I think the the grow we And navigating to on of what side. was in that, it's continue get think doing we're is job I with volumes the

dynamic XXXX, from in and and clear partners, that something our whether pretty throughout day XXXX. lot significantly that a allocation there's the have that to think much it vaccines even semiconductor we'll when were today. factories, going the assurance to I less the of more a didn't saw, is I a of the certainly the And workforce think the now they is employees And all with enter seen as manufacturing and in I companies wafers implemented an products. partners, than and see most mid-year is we entered or very think disruptions manufacturing been one we’re certainly XXXX, more with to defined things we much And next. that that's what their XXXX. countries throughput have us that stabilization unexpected of in more We've was not building is, alignment the environment, their than know clear virtually much different manufacturing we of giving

Great other Thank you No that. Great. for quarter. you. questions. Thank

Thank B. you. with And King Dave our next question comes Riley. from

Your line is open.

first is situation. Good you. revenue question chain Thank regarding How much impacted? was morning. supply My

QX? about in talking You're

Yes, QX.

I I QX to we about opportunity order Well, mean, backlog what the I ship to we articulate what I were of the question, of headwinds, XX% trying and millions saying, flow, than had into XX% to Christians QX the dollars and to able we was was had ship. think more of in that QX an pre XXs to without

regarding Got it, on margins. your and comments gross

being XX% than XX% expect been yet, And occurs So both quarter overly already XX%? you're I XX% conservative -- almost it third at would for next exit year? XXXX without you earlier fourth you fourth quarter saying supply have mean to and costs. chain Aren't much

to with months think our entire of raised the a two through the articulated component And entire industry. October. of have spent as and prices have our And find sense. find dynamics communicate and, last to an who I I've we've raise prices that usually internally position six and last react of margins over suppliers a began we thinking customers look, taken our mean, the makes downstream the on quarters, customers time to that I occurred ground partner where it with lot middle ecosystem middle effectively and with in ways over

pretty are especially we've this We quarter, large X that a lot have essentially still our first in the be Tier contracts working of renegotiated. of got with where some through price to increases comprehensive

by the that the that revenue let's quarter. this expect represent, XX% XX of customers of be we our So our top end it call of completed majority to

And so blip is margins, margins of quarter a quarter long-term our really having XX%. normalized the thinking XX% our one for through not me factors in and next

gave, sticking we I the the normalized we that. shareholder felt and to And basis. margin by gives And replicate we're but state, demonstrates get on target XX% QX be model that the at represented in can that the still we're not prepared a externally this might what able by us projections get that think increases was XXXX. that margin going time. letter, to end back before QX, price and was we until could a to steady we Obviously, that our we of that us a really time internally, articulate such to there sooner, sustainable to QX certainly that XX%

And think revenue my that RDOF, regarding regarding is, we it. -- last forward about of much in? should how RDOF 'XX the stem revenue year? Got is of how this going question beyond factored And your

X% to $X funds, somewhere that's RDOF it's set, to following at, the explain of $XX to XX%, and Access. everyone this, $X I've industry, that's the at I released, try about XX, I the far, so the you think to that's XX-year billion Yes, look that if billion a level allocated, there's allocated been tried mean and between you path, of figure if look billion if been been

there. that customers awarded Germany, that are UK and aggressive $X there's $XX broadband applied for a are there's our our lot have there's $XX path that certainly and I program, million we're the over with bipartisan So been an existing Remember, have there's yes, lot of RDOF all there's our for funds funds, free world with customers. the a of fiber lot government a mean, pursuing with or the the in heavily and us, working they're very of participating we in Germany, $XX movement funding billion bill, UK in billion closely also million, freedom of customers

we why fund I while make don't and investment so And -- thesis personally RDOF we don't our don't why so and the amplify it much.

of on than that greater the in and on broadband industry that the go and what's providers, that the it's is the have right now, think last been placed in stimulus. of beyond the going I any funding I demands dynamics service the opportunity overall drivers providers way mean, the independent today, in being service significantly decade. that industry are

driven the of a But at So way, the it's U.S., are sense participating that demands. good the I are think in way in to storm they're the technology them. there's a if one financial funds lot funds that for majority that in available customers perfect and in in our and a example, that supporting the I of look another, consumer all or

Got it. Thank you.

Thank you.

is open. question next your K. Paul line Our Woodruff, with Essie [ph] from William comes

lot Thanks is this but you this for follow-up question. -- if competitors help where orders from, have of you formidable. around question, this, are entrenched the And understand had look a Europe. you've coming all on everywhere. is putting and a can guys of pretty space there you on us a taking my America Yet, kind got business maybe because This strong that focus North Ryan's pretty has

a these when lag I out there a just there of sorts? then there have another possibly are the that flow that got is actually may part demand? taking see the I place do of maybe think due my you've And question. is And in a you land up this this quick it's in earlier, then So question how of stimulus follow-up. to to business business so space? this big just begin much funds is Is is also and overwhelming much picture we answered grab And

I take that appreciate customers aside in two the least most the networks, spend about of we time around Most X,XXX-line providers that lot which don't And are a at in small whole the have provider world. that particular participating service providers in the that networking we service network. of market. active Well, have appreciate XXX access

So, growth companies having multiple there are landscapes. across is that similar

we've growth the they're look of the Japan. the where I seeing been really from globe, fortunate we having with across with new and architecture to with a gig design. their that sub business be running on the XG leading Open were of growth team at And edge operators and managing XX Pan with mean XX-XX reference proliferation through incumbent I XG to the Symphony, of Rakuten’s they're gig. entire into So, Korea a going off massive on trials seeing Korea in the part company, their kind in that region three RAN, in upgrade cycle, and upgrade Asia from we're into you do the now We're spun across to all cycle, think Rakuten same projections X Rakuten’s

Dynatron us a Europe, whether maybe But when look others that's appreciate. XX% try people XG, we at this and think a the an to a some pretty or you European wireless operator help at differently moving aggressively look service that that in the sub Calix in most it a the cycle, gig access in demand [ph] of from from of report little put lot fiber. upgrade whether XG DZS, a fact provider to than portfolios wireless that's to new X markets operator are distinct it's are perspective, an it's look sub path got I at company, have from So, in of it's carrying the participating and European to just Europe. shareholder transport I mean of management the we've providing wireline you you and spectrum,

cycle, just And opportunity investment a a are. that we're of of growth how long across cap would European involved I But grow that projects in I Huawei to feel we looking look, Chinese a are you everyone just replacement of tell suppliers. far whole those lot that X in Huawei say and I most Xs is projects that time, the wish the would of behind faster. lot that because the the pretty moving Tier is the is replacement time. and most of we're mean, underway be countries, we process for and lot that significant all the to Tier of So a going some that countries were takes

way because takes upgrade funds, I the think going broadband cycle to not depending in So years, for number my stimulus networks. years, the opinion and demand think there be is provider. a I demand mean, opportunity, or goes a the the it beyond is there upgrade upgrade a the size to of I the years takes on these service the it's one many cycle, two-year year of

expected at of level the years? do you level, And next the four going to stay three, band this

have the most set of if to to to the just are taking they've service new you for upgrade who of if And certainly because part, build a sort different network. do, is We you you're and size and I share. -- upgrade I you multi-year in exciting have Ops Ops, mean, cycle. think their what aside network, new scale they're a Co that going their participating market in of parts your invest Ryan number mean, sort going if network a decides you the analyze, some ultimate provider the incumbents got all they're this take providers Co the municipalities, take us they're mention CapEx service business, operator, to the of also of -- what utility their I the to share becoming and governments of and the all had the companies, own when entering the state about independent and local I utility mean, new And environment. of the on emerging is has company depending dollars be. happen. a share Once What's to

perspective, mean, lot partner place the these cycle, think our service And pretty wireless billion that's that's service hosted also to we emerging hefty private number moving lot of for to into initial so is and of new being There's a announced years. is pretty America, a a fiber to ends determined. of the years, take the the going providers, allocated to equity for customers. a big up supporting providers But and a of years. who in are be a for their with build and capital lot in example, there's out several percentage and our fiber dollars coming of number service base, emerging they've from take I a called with provider what strategic over the company a next something partnership the going I of market spend, meantime marketplace,

So the that's participating at is mention going layers Optical and on business we're wireline our there's existing cable that wireless on portfolio. operators operators a of magnitude to lot incumbency. with the fix that by mobile of Transport and in carried not traffic And again, in densification, the being and to that

last of your forward? Thank do you. question. spring, going had One Last today? orders changed that That's is mix XX% preexisting coming were helpful. And very about from see customers, you that how mentioned how you

the smaller, customers, which added when the As opening remarks initial because shareholder and the specifically. phase. North new from we my you're landing rollout in America we Europe customers this be new you're in initial year in that stem XXX oftentimes, of the depending Oftentimes on in project mentioned can report, orders XX and

customers new in as much build we based forecast, to than went this built the on. even with secured the participate into from came we of that XXXX. forecast way an what Delta mean, year, And whereas we said most formalized schedules That hopeful tell our much was will is lower this new in ended we're it I projects so in our outlook known the that when year, up on I and added we what finishing in if And that 'XX. customers always were rollout greater was, XXXX we year a you, that

Okay, thank much. all That's you very questions. my

you. from Thank a open. Tim is have Capital, And we line Savageaux with your question Northland

'XX, kind that. closer of what the the Hey, think backlog ship and was congrats in that metrics into getting you've a talked down as the going here I growth like with ended results, XX. couple to And Charlie, year And he kind went about looks be now good mentioned hey, XX% outlook. something that digit the implicitly overall kind like book the your up morning. that to double the of of strong play extent you're a of focus And of But year metrics XX%. And, orders, you of question. in metric especially into that on my to

top looking in around in those So mentioned also might kind touching that that of buckets, out? in the ordering get behind more at the customers degree put lead guiding amongst probably your we're you're backlog? Japan, two, than the, terms and can was on also to call. Or diversification customer on kind where trying buckets some of part? that What some given the although bucket dynamics the number you're bucket the out, customers of be and your not more year conservatism extended number we expecting metric of XX% guidance three moderation XX% on farther to Thanks. in a times Maybe environment the in

think a I we I is, sort conservative And million we're the new it's had question projects It's with and one some that with is visibility sure think I feel would of Tim that of half XXXX I we've converted make forth, relationship that we to pretty XXXX. would XXXX XXXX. that especially But of scheduled principle is articulate to of question. half fair that it that I a providing of the in mean, orders converting in of you great out were it semiconductor The the nature, materialize we was Why way, be question. And what is and the think amazing. we've first to in second year a real most that, we my guiding great success to just higher of lot now in have backlog going purposely million oversize are Broadcom chips the $XXX actually ship orders that others. a there this guidance I it's got of to especially so along be if this And orders we know to environment -- ask would right need year, Yes, of allocation allocation of is could feels which $XXX a successful this revenue I ship success And end the we I in constrained much and think in new the that's same we revenue in while the is book aren't like you the year materially went the lot we questions that XXXX? what don't have year the entire lines. in of high to since think in able the our of revenue the of on across half than were a in large guiding based the be the we as we into in in And second range say, if stronger. anticipated like of sector.

that we they're manufacture don't is scheduled that things of less our we guiding their pretty the alleviates the now, that new just fact than a backlog, our whether but ship right just of with into like feel people guide is better can getting if we on we component it not phone us seems which every significant have bit comfortable upwards have the orders. a feeling support what we downstream because this So And most you better, know not don't we're supplier getting to work and us or despite actually partners on year, to visibility, have more when products. downstream like are time suppliers, there's visibility you'll some see little coming better,

of other X the emerging a role that customers Japan. mean, of going just face of U.S. I dynamic? it's terms thanks I a business you're customer to to to see maybe briefly business, major of in kind customer that. more diversification. is comments at your And on mean, or But for those that you to pieces impact I the the guess than little increasing on dig of Great, that, likely want the you Thanks. the stepping elements, expect larger that up YouTube anything it, customer follow-up, about to of categories out as the bit into rest of in that which Tier you that more, diversification, on than one rate greater any grow other

have customers we in the new mean, U.S. XXXX. XX I in

of report, trials for good. been sign we binary I what we're that Look and of the most forecast certainly over the some in, gave the of lot what in of in in year. been really Optelian until may next X, X so But call into so there's we this world. those the we us get entry it's category, the year the in hard the mean, deep with when said Tier have until are a Tier numbers, an so last getting feel on this that proof those and tend has And this we've Tier it the And and we good Xs the order, replacement the we many because pursuing from Tier DZS an with are forecast that some on that to really year around is the And a concepts us Xs with customers have place. very acquired activity that that we into Tier Tier some evolved we've success of of most we're and like projects working on is AT&T, contract and it's based earlier, large really Xs. big like be to binary, is Huawei very been that here high probability. knee a sharing I large The as certainly we're decisions hard is X I sharing projects, although, feel wildcard in we're feedback

Thanks very much.

This great for you the for questions now all and conference Thank you. we concludes disconnect a And may call. day. today's Thank have that's today. time you participating, everyone have