DZS (DZSI) 3 May 222022 Q1 Earnings call transcript

Good morning, and welcome to the DZS First Quarter 2022 Earnings Conference Call. [Operator Instructions] I'll now hand the call over to Ted Moreau with DZS. Thank you, Ted.

You may proceed.

Thank you, Joel, and welcome to the DZS First Quarter 2022 Earnings Conference Call.

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

Next week, at will headquarters forward Day be HorizonsXX we our that look Dallas to will webcast. We attendance. Investor simultaneously your in our host

the B. over also be second turn participating the to Cowen, We the will Stifel Charlie. in Riley, call conferences have and to pleasure during the investor Craig-Hallum quarter. now I

Thank you, guests. welcome and and Ted, analysts investors,

quarterly on we closed, trends our our XXXX market market shareholder results, comprehensive which financial and after yesterday posted shared Ted business, provides report, As a update outlook.

real-time experience assurance dynamics, acquire definitive as relative I'm first the has signed to other industry a and ASSIA. software as news award-winning comments performance DZS our well my providing consumer from service to that Before excited solutions and to share agreement business quarter's

service assurance cloud and which platform. Expresse CloudCheck acquired distinguished software architects Xtreme vision, RAN, In suite industry, government software fiber-to-the-home once-in-a-generation consumer fast cycle. being and on stimulus managed valuable is and which consumer XG DZS's software Open fueled by consumer which enhanced RIFT, and the WiFi go-to-market software-defined technology network Cloud Over specific part broader in playbook is automation we access and solutions, and Xtreme deployed marquee the designed be of elite solutions, highly DZS Xperience with Expresse includes CloudCheck, network DZS now into $XXX application been capitalize an performance solutions and our million optimization will network broadband Expresse experience also to acquisition software years, the super in cloud-native world and From operators and broadband service our access strategic high-speed These being around global portfolio. slicing and a and to engineers, transaction DZS cloud-native center. more service are than connected. ASSIA's an software homes have automation, software integrated networking leaders. experience creates than nearly DZS and business end-to-end portfolio. X intelligence the past assets assurance. experience lane, of adds CloudCheck all-cash X management is The of the by more DZS significantly which and cloud XXXX, provider with XXX skilled the differentiated acquired to front a intelligence, are combined WiFi team artificial our a innovator, and management within transaction The The million optimization consumer and accelerated of our orchestration, include

gateways, unique closing, connected home support includes Telefonica, around Cloud WiFi will include and a CloudCheck end-to-end service addition Expresse to customers sample TELUS. the expand world. we of than XX to will connected Expresse of add approximately than XX Lumen, X to TalkTalk, Latin I to Tier the many Liberty diligence, significantly our providers, providers X service more around consumer due of Expresse PLDT, Upon Deutsche and DZS reach the customers more broadband service and which Telekom, and driving Expresse CloudCheck America, Today, DZS representing uniquely synergies and offer platform. homes around differentiated software installed Tier Tier customers X the was new and list our speak Telecom, world. extensions Bouygues CloudCheck enthusiastically million Tier sales and experience. business The devices, and support to DZS During providers to CloudCheck few XXX complete the base of who X and enabling A able world a comprehensive the

early expect We contribute per QX. than as will will that margin, the The reoccurring share EBITDA XXXX. to revenue earnings acquired Software-as-a-Service no later weeks, X of accretive assets the as and transaction to be gross close end in

expect to margin In XX gross target as XX% model as fact, forward our we months. the transaction pull much by

Broadband presenting an Dallas more new are the Dallas consumers and our becoming person portfolio. include broadband early a live from connectivity, cycle During stages we super validate dual our from for decade-long and to and and mobile around including Day, in of edge both our be will assurance optical experience world. wireless broadband consumer and we'll and essential wireline consumer QX headquarters Investor in to software and -- demonstrations HorizonsXX of connectivity, service upcoming service is the provide experience insights, multi-gigabit investment and continued that we businesses services. management

will represented our our this financial backlog fifth to commentary, As million, backlog for QX increasing our $XXX consecutive of year-over-year quarter, in million-plus yielding $XXX Misty highlight growth XXX%.

new XX added also we quarter, the During customers.

top revenue low factors be our related shutdowns guidance, throughout quarter, end shipping in and ability single manufacturing our port to the These especially complete range. to systems, $XX manufacturing in million the within million chain million Keep mind first our that quarter ship resulting development, though at China, of $XX of first to which and transportation a $XX limited interrupted logistics. supply continued the to During challenged disruptions, industry deployable with appreciate that hold chip entire of subsystem shortage well based first we constraints, existing semiconductor quarter's a outlook. full bullish I our request chain also customer than our end on year of elimination the backlog, can more dates component and remain or circumstances, million DZS shipment ship the in system. $XX up an shipped half would above and conversion revenue supply confident Despite our of guidance. have

as gaining Just driver Open world. solutions home is growth fiber-to-the-home around and connected remain experience RAN the a in for DZS, momentum

into providers, have many XXXX. our Rakuten numerous With and RFP of the of trials preferred second technology and growth referencing expect the service strategic the the second world's technology DZS the mobile XXXX mobile XG to entities half the future. and premier and been to During architecture XXXX, during RAN and market-leading suppliers government Mobile, as Open XXXX of we convert to early involvement transport with of Open RAN incremental and a for into half partner opportunities profiling

new QX As fast the customers our in are we now base, to creating highlights communities outlook. financial hyper solutions that, With and homes like across they to XXXX over reach and our deployment Misty serve. customer call and turn connectivity our QX broadband expanding enhancing walk in enable through we the in businesses I'd our opportunities the of to value-added the the

orders while that as underlying QX $XX Charlie, an were million, you, QX a $XXX our million, million remains indication total $XXX fifth and morning, declined orders exceeding and mixed good Thank year-over-year demand representing X% quarter for revenue delivered We strong. everyone. with to consecutive

chain months, past from ongoing constraints in the our several by exacerbated that manufacturing China Over were impacted lockdowns supply COVID-XX-related partners. shipments

market to foreign able our currency QX broadband despite past grow Additionally, product were X% to gains headwind share revenue. America changes revenue year a down revenue in North lockdowns. were technology, exchange $XX year-over-year over the we due COVID-XX-related of in rates to to In million breaking the connectivity

to our as marquee as products impacted Our customers XG by Open operators project also timing with transport of around by in remain about and were mobile in our $XX revenue deployment XX% world. and product decreased other the Rakuten RAN our We a Mobile collaboration Asia. mobile result future those optimistic million year-over-year

Turning to geographic by revenue mix.

XX% Americas captured supply million in have from year-over-year share increased Revenue COVID-XX-related to to revenue due the region. disruptions new increase from higher-margin we $XX to convert Asia $XX $XX revenue. million the X% in region customers year-over-year to an capture chain inability to to Revenue drove XX% to a backlog year-over-year as market in contributing decreased Our EMEA million.

adjusted QX our was range. of XX.X% above guidance margin Our gross

quarter, current supply the Within estimate of in business, our cycle have our The quarter, exchange first adjusted $XX gross $XX acquisitions DZS the and position the QX including headwinds we actions challenges normalized exceeded current margin XXXX. chain growth that million for performance occurred would reflects the Optelian operating were restructuring during the million and from during benefit the foreign offset currency first to RIFT in by increase investments XXXX. compared with expenses In XX%.

non-GAAP loss $X.XX million a million QX positive in compared of EPS was to $X.XX EBITDA and XXXX adjusted Our $X QX a to our compared XXXX. $X of in

sheet million $XX balance in healthy debt. and a with have cash We no

During we global several credit million the entered In which J.P. new undrawn. financial relationship executed to transactions flexibility. strategic a February, banking $XX add a which into facility, Morgan, we includes quarter, with remains

ago connection in new forecasts. therefore raw filed past flat X.Xx sales registration our and intend component QX continued our we XX compared morning, that equity our proxy now capital announced customer in of our to has has necessitated been of first filed. a same previous several Directors with April. Days in and outstanding replace statement approved align Additionally, impacted were Form registration that X-year of This year the over levels. statements XXXX, have levels the refiled working a with metrics. X-year material any shelf Limited acquisition. year this increases quarter to S-X not availability Annualized of buildup in expired SEC February, the inventory do XXXX strong the X.Xx with initially days statement was by statement we quarters Board registration inventory were At in turns XX-K the with backlog request shelf to XXXX our that We during the inventory ago. issue

Chinese broadband multi-gigabit by basis experience. cycle access North first, This in billion the broadband the fueled stimulus; adoption; service communication pillars: are connectivity and third, investing partially subscriber opportunities. America fourth, for global second, EMEA X $XXX government the Open our super ahead, cap-and-replacement vendor over and improve anticipated RAN decade-long upgrade last share market XG in growth and capture; Looking mile providers and to forms cycle

record by supported strong $XXX million. visibility of backlog have We

constraints able to While remainder the continued manage our backlog to to continue relationships year. revenue supply the throughout and anticipate to convert we XXXX, chain persist of chain anticipate supply will we our for being

million. guiding We margins million are $XX to expenses $XX XX% our revenue to of million and gross $XX operating with of to to $XXX million second quarter XX%

adjusted between As million. EBITDA $X positive a and $X a million result, expect we loss of

operating XX%, guidance XXXX margin to gross $XXX from $XXX follows: revenue to expenses reiterating in between our a million, adjusted of range are in a million and $XX $XXX million. guidance million We million, as full from $XX range $XXX year to EBITDA million and XX%

closed, from the Q&A the guidance like the acquisition incorporate this not facilitate to That operator acquisition. As over now the completes remarks. does any call not to I'd contributions our yet the prepared to hand session. has

Instructions]. [Operator

question first Essi The Paul the Woodruff. is line K. William with from of

want be mean XX% to forward out XX in the get see I on that XXXX? it revenue. XX% points did by months. about I XX% of how to that the at supply that, we your Charlie, back like the your the pulling on -- could swap the Yes. and in year-end. XX% your basis the I does the over digging $XX chain can could looks XX% comment a by the little Does million Internet. little CA year-end margin And you And looking a XXX and

the of off. Well, that referencing you're all, million $XX is first way

higher we're pretty an profile we significantly we'll is profile portfolio once margin acquiring, with that as can revenue software significant. appreciate, million. the that than you close The So $XX all is

services path XX%, exceeding line. have XX%. model expected the communicating and laser-focused there, about year and as so to But for of But of And certainly the percent get in on likely will generating into of company, range margins it relates year. we we're to get XX-plus a next revenue point this like to as on We'll accelerate you XX%. of of this the time well the pull-through margin our target helps north the a help new look a margin certainly your to And based and revenue. consolidated margin us model appreciate our remainder total what software been

Internet, but they million like Okay. Good. Other question in $XX the is, on and look again, ASSIA put the it the pulled of IP investments, you out -- lot left. was had some,

the was promote that spent products and much to of that hazard develop on at You trying guess to you how guys acquired?

Yes.

raised is think the accurate. $XX over years I capital million So of the relatively

the ASSIA But assured of disclosed versus that will with property for a ASSIA. will with intellectual cross do full once the us. stays of licenses when with articulate how we stay come much how we We have property will DZS license the transaction much intellectual haven't rest details close, any that

Okay.

made and footprint long on You how this XX give been that a deep also How kind in that comment have penetration they've idea are service with providers. And you fit of you have? also this would pushing about an on subscribers us wide in of the where you they a how product and Can curve? supply two? this many

closed. we're was to my I've remarks be what and trying thoughtful report, we're and not the in Well, as in careful and mentioned highlighted very again, shareholder because

the dovetails John Cloud and combined businesses. more approximately There X mobile year, And of what Tier our XX RIFT and North consumer-facing what our Europe. in broadband And optical ONTs orchestration unique as and our But referring experience, you are our service devices look and is we X as how new when us Tier service on a the and in-home XX portfolio ASSIA I venue the focused is place, when we're and of optimization differentiated there will customers, several During what the and as you think Day Xtreme, as comprised at connectivity, automation Latin I is which Expresse we complementing now. which from we is think, mobile fixed the articulate, the and DZS a product. part solutions, puts Coffee much and that will CloudCheck now nature he creation, into and of be network in in very at customers consumer development to America together, primarily over well especially DZS WiFi really transport about to WiFi Investor and in and look in of OLTs refer complementary days, large lot are which last America. customers DZS and experience Asia. several There acquired what

accomplish And be to we the we're couldn't sales of enter we've tremendous been will more and synergies able elated here we what year. to amount realize. half the this we year, think at So where that be teams the as over a of about second last there's able

Svanberg The next question is with from the line Stifel. of Tore

to calling This what that understand bit overhead little can OpEx is kind earnings. do on might you Maybe what more for of acquisition. be? and a Tore. to Can just expect? us digging it's the we Jeremy help gross understand OpEx the margin potential accretive I But impact

and which any did XXX Well, engineers employees approximately think financials are today, we're that are software not I over, highlighting we there's that the but most of of architects. coming highlight

So Madrid, primary you the X in City Redwood in can -- and there's Valley just of Spain. facilities, Silicon heart

So of that's employees where the are. majority the

believe the granular assess paper until time that can what we the you such to OpEx give of details. for those and employees, you everyone profile put kind So pen is

is forgive something a past, And you broken software all this out but might? of -- the have you currently where this [indiscernible] give this Great. if might can revenue enjoy much that acquisition, sense how me us with that you in

you CloudCheck today are with speaking and you Are Expresse? -- without talking today about

Yes. Yes.

Yes.

you have we revenue, of something important that will pretty But analysts I of going total that of given feel and that our we're mindset it's software never reporting haven't number So become information. once services done. start we that the we that and because close, we've investors that we given percentage tell number never out. out. on previously revenue will substantial, We've that are to part

to well business will report begin as we closing, as systems services software upon our our on out and so business. And

segment-wise rank to if outlook? And your of the look Great. or guidance, ones you are the just help geographically order Which us into maybe drivers we out key some you which can 'XX, of that the of drivers going there? key the calendar areas whether reaffirmation -- be feel maybe

the the a on being pursuing, responding demands mobile we're all we're balance as which into you conversion, specific look just well bullish we both revenue when pretty across nearly very we're at the business I that opportunities country. number tell I would company, side, fundamental the on despite placed We the healthy we're But that certainly There's RFPs when of understand the the gets dovetail at the we are is the that backlog side I X mean pretty it we're some Yes. that focused and regions fixed million of influencing and look scrutinized. on our regions. the public of to that as encouraged. $XXX a and on. as fact that

So region very for Korea strong to continues us. be a

We is that be us resources region you that historically we've the done unfolding are can they've region because of exciting are is Europe. very just the new to America some Similarly have region, with exciting continues Canada. Chinese a results the as this coming of region mean Pan-Asia with expect most Europe in I lot of some relatively all a region. region. been exciting well, that to opportunities I cap North out in but that in is of for for that opportunities right where some now exciting of the of mean vendors the the successful. regions additions one

on. So pretty we're markets the that on all bullish we're focused

the perspective, looking and end, business continue focused are in certainly on on last are doing on standards. over been XX transaction think last that help announced we helps I think As morning create and to more are open night focused in them certainly for. more I that's really end-to-end and solutions, the about really layer that months. solidify to customers They're service end of lot which the from solutions, a to the to here what I companies software-based can this opportunity see have. think we technology But the talking with intelligence we the and we with we've in looking And an Expresse end-to-end CloudCheck providers that and solutions unique select that focused really plans

of The next question is from with Koontz Ryan the line Needham.

of something it update and just opportunities in hear are of on but they're where you lot, a kind and know the to we planned next I more in your have can I displacement about if good it's you some Chinese in of wonder you've kind maybe be total. talked Europe. for of Charles, how commentary the view of some number opportunities week, Day Analyst would progressing current your us

Yes.

that we there's are point, tell some specifically in So to that there's that excitement save morning nothing trying Europe. We the we're pleased would EMEA a shareholder this of Investor activity we're making. you for -- tell highlight tremendous amount going Day. I that Western in we And the the that to But progress your include across to region, report. with didn't we would I you are

on As and of been was our team us does as focused aspects And and a the I that we've Tier I previously. diligence give many cap-and-replacement sort stronger of this the transaction, the like strength in more position we I think didn't were encouraging of products feel an opening broadband one European gives it it my highlighted, a John to of that on. and relates to coupled customers, which But existing the X American with getting probably the customers ASSIA much -- the North Chinese us of lot Europe. have in within with opportunities, mobile in a of comments, to speak working certainly aspects final lot Ryan, opportunity

copper you're of terms terms much be of cycle? as if of we seeing in the networking But that product in broadband wonder all And business Where supply platforms now? back mix pretty the that -- within are at Okay. X any could of And of impacts. I any that terms helpful. by shifts XXG. in can on at like lot the the the in it shifts far you a kind CPE was comment quarter of to you chain held access, goes as on mix Is share sounds versus the shift kind would

Yes.

well. true XCelerate of in rate whole, amplification the more XCelerate representative what seeing think to is flexibility XX industry that a certainly, margin to out -- lag we their a an XGS-PON. is a our is in and most customers our profile last port has higher service And our I customers the well of We ARPU existing believe by what as the think as gives any the moving of cards, large support rolled historically industry's certainly orders start pretty I that's we're at But the are there including card functionality beyond. product towards small Europe I And been significantly think also, GPON, them there's gigabit for XGS-PON, towards for it's of our looking new as only our combo customers, And the across as accelerated from flexibility can the combo is shipping a deliver and that on what higher we that. launch it late any towards a we and evolution because year. service new refer very what higher as just for way, GPON more to service customers, as provider XGS-PON. margin and customers. And

the would side? network say the sides, Got higher and they Are across you chain both CPE? on were supply it. CPE pretty equal both And impacts

relates It's devices semiconductor BOM the frustrating. and our makeup. to I it mean of WiFi the are as by complexity CPE to much chips. have Most them products as level don't ONTs driven

we filter, the the level one shipment. million quarter. And see end had Avago. the and other of on can switching so that inventory complex. core at not $XX optical complete products in usually mobile missing the which, they're we're products, lot of and it you OLT one the more if CPE But most of we're we of chip, of lot a us, are part, I and It's bottleneck. is memory the the mean, And can't the in for attributes missing semiconductor frustrating chip, the if the a Broadcom

place have the into just I frustrating flow And a but be, I difference have. visibility so I we order feel do today historically, it's BOM like think than that the more our forecast backlog they to fulfill we mean because have we the is exactly knows the just team on need the level and we our supply at detailed that have going what that pretty to forward. chain that based components backlog of

our will just got it get around And think that it the gap the break complete dam make good. over will months. I hopefully, the we X So us, in the for here that If to arms systems. subcomponents up next X, X, X, be does,

from with next of Dave Kang The question is the line Riley. B.

first question your My regarding is business. mobile

You project pandemic? delays. mentioned related they to about Were

mean, it's certainly backlog the it to Well, certainly wasn't I things. coming products mean was mean, convert impact two And And on the level speaking are Dave, there's availability really quarter to today. down deployment component we're on that had I at I'm -- we the for just I of lot the mobile on the industry. the were are products timing. our ports side I I One, that not a it's out just really as the think impacting broader of during service our ability revenue that shut installation still China. delays. think certainly and manufacturing and shipment having But fixed an side, it of subcomponent well.

What Any spending. then trend? it more is a Got more it temporary color Or customers, also you just it. about caused when slowdown? Asia, of Is talk that And on situation? about a that? lower you mentioned

highlight to spending I wouldn't necessarily think I is I fifth a million spending lower to to our don't fair row. plus we the a know that, book challenges revenue. to say it. consecutive I if convert backlog has I mean associated in mean attributes assessment. that to is trying did Misty quarter was lower our ability what $XXX

an were So is to demand still with challenged robust. I we mean revenue. order backlog ability which in convert is quarter me is our that perspective, pretty what to to from flow spend

conversion. from of I spend revenue separate So kind

we revenue to second can your sequentially? supply And Got assumptions, outlook, it. some And be quarter especially share then you orders up chain should on your regarding situation? of the expect

it's inventory the in of just $XXX environment is $XX Yes. have I increase, component to first of view million be to certainly in probably in my I'll entire where currently with backlog. high backlog very the I we mean, are opportunity of take million I conversion. a career. that predict on deltas of we have one certainly difficult the line that. timing mean, and projections subsystems we revenue, able to what simple hit mean the is, our ability the range, doesn't gave we best predicated of from fulfill XXX% but if get to an the the the it's end to the to

to As continue it new relates bullish ability to attract our orders, be business. I very we mean, to on

year. As quarter. new I highlighted, customers last we had XX customers in the We had new XXX

that the XXX of lot a we call orders. large with a XX just when have to customers pursuing months. that on lot regards that there's is receive And with sales last impact it, an team activity So timing projects there's of

priority our recipe, a making our in their And earnings customers priority bullish And call on very keep is on happy. will we happy. on customers keep everybody that keeping focused deliver them still just that happy we're we and sure while an then is consumers address the can #X now if business, frankly, they position #X put else I think So end-user in everything place. services we where right My order is can again, and fall we're flow. and right now,

Schwab of line from is The with next the Craig-Hallum. question Christian

Great.

congrats to in the lower my than quarter. So given gross first, issues being guess, a little little OpEx, I with But guidance the and do gross in manufacturing margins margins a and bit we the on bit OpEx, higher question transportation the as thinking taxes the tax basis? you on far be for a should tax you expense tell basis. received why assumption and and as and us go-forward benefit the what go-forward Can that on a about rate about has

Yes, I one. can that take

tax from full our forecasted have we a So annualized right, and perspective, year.

that rate company, XXXX applied to level shifting profitable was have are more therefore, a as in a tax effective and QX. We to an

$X had correct XXXX. the but we to we profitable tax as in we tax actually and year benefit a a QX, full course had expect we that expense for become loss, Given million shifted

we you idea $X.X should an have assume million -- like Do a quarter?

Well, it our of for? profitability of depends effective tax our on rate but course, quarter, each levels

And where.

I a a effective around to Act, where. that XXXX have expected capitalized. tax certain associated is say, are where And effect XX% laws rate R&D Right. do in new level to to into very We high XX%. the be went tax CARES costs would

will are But tax assumed of we that our closely be for offset NOLs will we of that expected to progress XXXX. so impacted XXXX. in And leveraging R&D capitalization monitoring now, some the law how of have in be that some

Yes. said, We mean, various in from we as acquisitions and Misty NOLs of a the of combination Christian, today's what's significant DZS. I have do amount resulted have, the do

we at each of And at exposure, so we when our specific look profitability region, which based varies. tax the look it on

fair. that's highlighted? would guess different on just No, on I the basis, tax anything the that tax a rate non-GAAP depending speaking, rates broadly jurisdiction effective be than Misty

vary It jurisdiction. by will

for XX% to higher, be But some lower. be expected rate total will overall, the year XX%. is our will slightly Some tax be to

Great. right. All

after stuff. the Now nitpicky

gross enough hand the But a we there's to a to appears quick to question Look limited a about only not it? expected. my hearing may details, So that, have next revenue cash congrats forward be Charlie, but margin what profile do pay regarding from contribution. on very what acquisition, week exciting guess on since be growth for I contribution,

loaded the haven't about what talked over. Especially since paying coming assets we're a we for That's question.

we've with everybody debt. transaction. think the take the that J.P. we're relationship the will form sort have the cash between equity not proceeds we assume I important I and cash that for any for to the of should the pay using Morgan, in away be you fostered mean that most thing is of

I of think preparing we here, later the I to the way relates no just done Horizons we're do to as here we at get to we're we platform But of to assets that this our guiding in Day to information. closing a mentioned, when the I few can things use sort Horizons, next of optimistic has the likely than end will which we we timing of but a get quarter. mean, updated that it that include such as I can Investor at the outlook, to which outlook trying are XXXX it coming more over. provide share done the least X-year lot with think, an mean, we're in at weeks, have we're

[Operator from next is question Instructions] Northland line The Savageaux Capital with Markets. of the Tim

about a to aggregate at spend would in that XX% or the of or run look the another high you may more pipeline? RFP at those we material what that's with opportunities. a guidance more wins maybe don't worldwide of converting specificity, think or the as past 'XX, a the opportunities but if can growth not give about aggregate, talked should dozen we as of revenue? a across have you be, question any know level the us at maybe take there your Or driver? think any pipeline terms maybe sense calendar to across then I And potential assumptions I topic, extents I into Europe. for are RFP in kind of in wanted And just

as were a piece Tim, I next down to speaking, dozens ironically, wrote So word you the me. of paper on

still those I as generated just Tier pursuing mean the of RFPs. are the I you we So the marquee and versus Xs. can across by Tier dozens -- RFPs appreciate, most in larger the regional players. mean most Europe, we customers smaller are And are of X

then in tell trial be I with across phase the of a large you more that our paper a a And make in proof to number the were we and We we're RFPs, would stages. of it's to lab are got very phase. formal of get we way I in mean, that a guys Europe value the ultimately, value wish process. wins. America. a North in work, these you I And actually know some know certainly trial the and you've all you articulate to that could participation So at been products in where the But say and Tier place this, and in could would lot if are next studies. RFPs response Xs different proof we're be But at the you phase, I optimistic want more of our certainly it there where phase.

So optimistic. we're cautiously

at forecast assessment $X to But their of forecasting detailed would just not close of very guidelines within pipeline maybe to into team I pipeline sort our that. forecast we're outlook of that the manages have that lot go today and that how where pipeline every pipeline Our converts pipeline sales is way but a in opportunities We're our accounts. our based reaching convert on those company billion. into going a and business differently, you XXX% then higher tell in we

ever go that's with have revenue So to as especially lot project, a that pointed our we're And meaningful with year year out. we over into in the RFP XXXX has grown the the where encouraged pipeline last and of rarely that associated profile an our significant relates or these it where we we significant upside guidance something revenue. you has RFPs guidance, with are way at a

So primarily I our guidance any and into as as you XXXX. is that existing the half for profile out, something think year, upside second pointed new would be that focused big of investors on importantly, more and customers shareholders XXXX we but should wins that the appreciate would

standpoint in saw on just you saw what the kind constraints. revenue I order could up supply Great. major order of a given and another if wonder either category any intake. book product what order between from could or I if characterize QX follow differences quarter standpoint briefly from an geographically the you And of you strong with

few Well, here. dynamics there's a

with I And maybe mean slightly. was things touched were back very about that so I although maybe you to and think, surprised going on over impacted desire new months. and a to it, we else last, world with in fact everyone providers the the service on X of were as focus the price lot call around is, our of the one it X that on the partnering increases our come commercial the honest frame time let's I think didn't question light open of October-November out, Tim, terms we that

I you, just those orders at tell And would some we're new so in perspective impacted from of was terms somewhat operators. of commercial with an QX, where

the partnering pleased the to new report that on lagging completing and so our you we're customers those tell that customers behind pricing contracts. of were I in timing terms And now new focus is us. the majority specifically, Asia where were of we commercial would

we And commercial with have, an us so decision But the we're where to feel at wasn't the because like of impact like frankly, we price take this our going that going for we felt customers aligns customers need a mean we QX did conscious that I orders. with be. best existing certainly into with new structure certainly the timing and for that on made second weren't interest with the old in to orders that the year half business. we in

And certainly Asia America, relates it mix had as so from an impact. And had QX. the revenue in it that that and of North to challenges a was biggest really with the we mix Asia

concludes joining call. conference today's That today. Thank for you

You may now disconnect your lines.