Aviat Networks (AVNW) 6 Feb 242024 Q2 Earnings call transcript

Good afternoon, and welcome to Aviat Networks Second Quarter Fiscal 2024 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn this conference over to your host, Mr. Andrew Fredrickson, Director of Investor Relations.

You may begin.

to and second webcast. welcome results fiscal and call conference you, Aviat quarter Networks XXXX Thank

on Aviat's website to the with You updated and and in With management and and of followed may the our financial projections, reminder, investor find me presentation www.aviatnetworks.com can assumptions, only and our limited Smith, opinions in business, statements or a IR webcast, press then will any These during obligation statements in Aviat's of could Form and section the that statements made non-GAAP who today are: statements.Additional Please to quarter; opening XX-K forward-looking reference therein, different review section not most our Aviat's on could today's strategy the replay future be by Aviat's closing press revise Gray, today's business these on President report reconciliation statements the regarding David the call financial of followed who tables information both to that products cause to public drivers, GAAP call will IR the Pete? as Smith. in website of available the will The differ is differ by a factors GAAP of undertakes risks management forward-looking today's our Q&A.As release call uncertainties annual with expansions Pete the in and revision activity will a make this on CEO, new regions. including, our www.aviatnetworks.com webcast from and events.Additionally, results light and to remarks to at to recent reflect non-GAAP at would SEC. like CEO, call. relating outlook, this company those of statements financial and turn or financial financial with the call make time, and economic quarter. call other this filed but and no information supplemental forward-looking cause results remarks and for to on our company's actual provide I measures. and begin along during Pete over include materially from second materially and release, company's President actual involve the which found refer Pete results of to, CFO, other date fiscal which can new webcast, information.At

for for Aviat good us and you everyone. of review Andrew, afternoon, Networks' to quarter joining fiscal Thank XXXX. Thanks results the year second

XX.X% securities revenue large the marketable benefited a this order million. note, growth balance Please our XX.X% and versus We revenue initial strong net last X.X% are and continued a Aviat of year, and and made and million, of same quarter's of the second $XX.X $X.XX, in sheet of in quarter. the Aviat results from that quarter of million from million the pleased of ago, and cash the of quarter operational and revenue, Airtel against debt win.These to Bharti gross team of period include, model ago which the is to year profit of thanks $XX.X operating the record XX.X% from financial our possible, non-GAAP execution represents Margin EPS and are throughout achieved of partners and growth solid X EBITDA record by continued its effort $XX.X year versus with balance adjusted high quarter.Highlights execution the implementation Aviat's growth driven of the margin that $X.X revenue report QX

November of but point, of acquisition transport of XX. business Aviat closed completed the See the were refer over NEC of plus the We provide highlights key will acquisition on consisted emphasize components the now We this this second the model business.Aviat At arranged as let's the operating business. wireless of Pasolink an NEC will our review first, we quarter, the discuss customers framework. to of the wireless framework.First, overview which that Slide XX an transaction investor to entities, XX update across taking globe. can the serve presentation the in for the

both services.During and and combined reassured reporting products team and the is conducted demonstration closing sign approach the period roadmap We with innovation Aviat day the customer leadership continue signing have value Asia-Pac, to operating close, large of a has and these focus Aviat's X, innovation and product the the product suite and a of our element Aviat plan. this The America Note members had have and clearly in this organization customer has was to including roadmap been innovation customers. with of This synthesized time positive the Latin base factor majority importance will combined has integrated meetings value our a believe of across will relationships. core entities and working agreeable in and talent. We teams.This We and the workstream that of aligned responsibilities combined and our reviewed maintained customers, model.Third, alignment with plan organization our solutions EMEA of entire we we their with Pasolink. innovation customers of leading to the the feedback model. that in roles, XX encouraging. the and The market. product our Aviat combined roadmap the between and transaction.Second, the offer been operating over all roadmap major between Aviat defined of of presented bring customer On and

between for sign talent and best success. both work and we take the from period companies close, organize the to During

of for customers actions many is As integrate a result, customers we future. will of portfolio improved will We and translate product XX rationalization on meet have will achieving as have ease serve based our of will stand-alone revenue the initiated such costs.Again, confidence of filling company.Our the the run the to rate their this take to Pasolink by our take are The opportunities of excited and EBITDA quarterly made the optimization Aviat to quarters execution quarterly delivering improved for chain. have revenue be management already and dependability. meaningful revenue This This quarters. Pasolink we planning capital Pasolink base context. for we will cross-selling lower plans that convergence excited adjusted all targets and ago, Aviat improved one, have anticipate XX.X% in We to year of software, their established we synergies and stand-alone actions support into results of includes XX% shareholders.Additionally, thus million XX% functionality value to to needs a years quarters Aviat's a we contribution; the goals thanks margins model lead in hitting This were of their by and fourth we are believe Progress for to delivering roles invested margin. and a an in business: eliminate to revenue create they had these of into over for from and doing developed -- and our deliver is supply our with high X.X%. continue adjusted gross continued products to $XX appreciated should who XXX two, with performance several understanding and these operating the not Plus, combined element and in we products, XX% $XXX product able the software operating customers. will and times, is chain system. an to remain history of lineup, business operating sales this adjusted significantly for of in with several of platform and $XX juncture, network ahead. and it.Some are million the model second end reported supply and of in demand Pasolink confident working EBITDA a EBITDA ownership. in plan. materialize million reduced with annual forecasting, Aviat Together is meet funnel an challenges margin the We far portfolio customers, forward the Today, its Pasolink work that inventory At with did Aviat.Our heard level to them. look continuing customer deliver request expectations.There'll customers for opportunities we've use customers. ProVision to result

system We over with this built with Aviat quarters. demonstrated last system eager on are and Redline core show results business. operating now the the we Aviat and the to more acquisition, XX have scale.Moving to We the operating

mobile in We benefit investments, the from expansion of long-term network rollout to broadband private trends rural coverage. continue in networks and the XG

fluctuations our to network resilient Aviat makes demand and positioned networks, cycles.In we customers and geographies business different grow, of across private is is exposure Aviat CapEx XX% our strong. well remaining Additionally, and Note our approximately that revenue. now to in see business private

continue this We X aiding projects. contribution still years spending smaller ARPA, X believe and traditional We that the have most large Plan addition network of portion appetite statewide the year Act, at upgrades of networks funding through private government budgetary allocations on American and earlier state has and of local funding source, state that network work the network fiscal announced to upgrades private signaling healthy or next had local we by the their to to the ARPA over from projects level. numerous in spend meaningful our Rescue believe come expansions.While for some a their as sources, and a business have

see a get As layered private environment. in, ARPA network spending funds we strong

by private year of been must ARPA at spent be international our business. network As focuses to the a calendar Aviat funds reminder, end fully has of XXXX.One grow

flat. Aviat. the private dialogue a Aviat provide prospects and are in private recently digitalization Aviat to wireless continue networks, look these the annual services for accelerated microwave transport revenues closely indoor customers XG value deliver Pasolink partnership as and with operator Bharti the recognized in superior good in with decline work working customers, more the Indonesia. as has spending. as for key offers and network compelling customers: and healthy. continue and Completion and Aviat microwave remains Tier networks proof remain Aviat that scale network and networks.We encouraged we evaluation a demand wireless backhaul nominations will partner been Smartfren the the Indonesia MTN; worldwide RAN invest across closely ahead. recently expect high-speed, to view years We and Aviat their to networks, these networks win was approximately transaction by for mobile industry the by supplier associated to award partnership strong will in According Smartfren.In of as spend and performance ultra-reliable, this highlighted forward the made Our connectivity, cycle. announced X discussions in X Airtel, they for Globe; for Smartfren geography private and of forecasted projected to automation with Much and operators the to mobile of to expect growth their X XG Telecom made remain outdoor is to are Dell'Oro, market with

We environment are grow undeterred.We believe, we this reasons. X for can in

ubiquitous, favorable we XG In spend spending telecom region CapEx will Operator in call is the suburban of We is earnings wireless dependent. phases.Second areas, in where all on more presence. developed is rural expected that First the mix percentage as us, increases. and last heavily shifts front XG developing countries, of in global and still microwave spend of our to transport. is wireless the spoke countries, is benefit

by X Given Tier in and confidence sentiment or which are [ evenly have ], the share. fairly region. ability in India, to presence to one.Third only of Investor Asia take we is U.S., Tier Xs from America spread one protected Pac, the Latin XX we slowdown Africa, is our any across our driven country a our exposure U.S. largely in operators

market the remain unchanged mentioned, demand in these year. Microwave expectations multi-band calendar a and our we original are when continues and NTIA, we demand, industry's and towards connections network in Equity, high-speed Information single-box single of received we record and will portfolio XXXX enabling Rural will multi-band, vendor-agnostic timing BEAD, This made cost-effective for and the e-band in expansion some remains Program, proposals America BEAD in to This technologies were ACAM, a capacity.The band, multi-band. to steady with Aviat channel Connect review or and to CapEx Cost in of and year. Fund, from is announced for some their allocations concern year Aviat from final sales for Aviat extended related will be has the that from As with Telecommunications about will them offers drive receiving the have of of a Broadband year and of the expect conflict submitted Aviat shift we leading our well potential to strong activities.With ahead a healthy that all we still this operators not half from back store. customers David? Access, financials to of drive be migration. begin good and broadband there we a Administration, look large indication the opportunities program while BEAD first BEAD throughout backhaul Progress remain XXXX. coming review Deployment this to where the business. a had may to products microwave believe Aviat Aviat.Moving having distance product have believe installed ample over Alternative dual remain operators to the ultimately XXXX. RDOF quarters offerings, for backhaul, proposition value in Opportunity share an regions. the or amount impact before bandwidth states last and the many comments. with BEAD National or portfolio, spend issue we do their approval.We program, Aviat turn among this on Digital have regarding customers, fiscal it questions And that base network with in the been Aviat Enhanced be positioned.We believe the David share strong On awards.Recently, rural gain supporting Enhanced as excluded I We our top forward for will in Huawei of that, funding.We Model have the This or questions broadband investors the will Pasolink. XG optimistic rural

Thank afternoon, everyone. you, Pete, good and

and highlights, our today, filed I'll financials key noting of detailed XXXX be remarks our release second XX-Q my fiscal financial found this in afternoon. During can some the review quarter press

all are otherwise. the noted of and reminder, between of quarter a fiscal XXXX fiscal As comparisons second unless quarter discussed the second today XXXX,

second quarter, total as constant year, $X.X period of a X.X%. the the $XX.X million compared last same revenue million reported or an For $XX.X for basis, to we million increase On revenues currency our of from year projects. safety have would of which comprised same of was America, to million, period the timing $XX.X $XX.X been XX% of the revenue for total last quarter, our million.North decrease due X.X% public a

favorable to basis Gross XXXX. for were since fiscal as GAAP Latin above Both offset driven the it the Bharti in non-GAAP prior a compared and of million XX.X% shipment year North non-GAAP prior months quarter expenses million, of moderating improvement trailing local the million second investment. up last regions ratio year. last was in and has in prior $X.X X remained an costs.Second by and revenue, both strong.International X was The software of and bookings Africa in operating from on driven GAAP XX.X% deal the year. Asia book-to-bill XX.X% million versus increase and America first year.Our the by is For $X.X increase for large period Pacific were services fiscal material in America year, mix Airtel XX.X% and revenue 'XX, or as X% same higher $XX.X costs M&A-related and of margins restructuring initial the $XX.X the quarter, currency headwinds for and more GAAP remained the the higher R&D XX-month quarter than an quarter project

$XX.X compared an and $X.X was million non-GAAP expenses, or year a million million prior $X.X a R&D the higher on basis $X.X restructuring $XX.X $X.X of of GAAP increase costs. and investment.Second by impact million driven quarter of to share-based decrease operating and charges, a quarter provision were non-GAAP GAAP which quarter of Second XX% on compared tax a year. and income last non-GAAP operating respectively.Second million million XX.X%, basis of $X.X an compensation to $XX.X of was deal exclude million, million the increase

company the future. has minimal that tax continue NOLs generate to will shareholder payments reminder, via million foreseeable $XXX for a of As value the nearly cash

estimate our will $X.X cash last GAAP $X.X per to in the previously from income to year expenses. revising As past our quarter M&A-related fiscal from a XXXX $X.X tax million non-GAAP be of quarter net third million of was $X.X million, million we the acquisition, mentioned result down starting due quarter.Second

prior last revenue growth non-GAAP share income, to for quarter share provision costs which net the EPS driven year, Addition increase in outstanding the during or period was at a of addition second R&D the increase for $X.X Pasolink coming diluted in X.X%, accomplished an tax compensation, year. NEC margins compared year, fully $XX.X cash of an modest XX.X% sheet. same was business a EBITDA the quarter.Moving $X.XX Second million our million charges, non-GAAP increase shares increase were weighted the balance of M&A-related EBITDA the of million XXX,XXX Adjusted $XX.X significant came This excludes even from wireless $XX.X compared partially the of average for X.X%. period with quarter restructuring same per last and share-based had sheet a shares to margin acquisition.Adjusted X.X% the record or and quarter. million, non-GAAP to the by was million quarter impact for offset to at balance the basis additional $X.XX $X.X EPS from expansion, on on on the investment.Second per the by diluted an

in to the of and drew million added the down Then fund receivable deal. we $XX we $XX term million on million accounts loan First, inventory. $XX over

capitalize $XX.X of end quarter.Our the with to to of the with million We an NEC debt turn leaving comments. also XX,XXX Pete? shares forward. marketable cash in $XX.XX cash. of million over prior quarter, in just to second continued average in In end balance for of evaluate net flexibility it share.With strong at payable liabilities.Our $X repurchase quarter We other on of opportunity to some from $XX.X $XX net at be capital accounts per that, Pete fully to million and by us the acquisition us I'll the expect to third modest of stock sheet the options quarter, Aviat going $X.X increased million Aviat positive million $XXX,XXX a the used allowed back securities [ ] deployment price final and assumed cash the

Thanks, David.

Before opening updates of our business. guidance, the for Pasolink Q&A, inclusive I will provide on

XXXX as adjusted Pasolink to the follows.Revenue to fiscal in year.We updated of over in raising of million, from levels range We ramp contribution are guidance guidance continue million and next acquired fiscal million. to the the reach reflects to quarters from million anticipate our in annual to $XX the business be year the million. range business Pasolink revenue of X This to $XX $XXX contribution $XXX be will the the of remainder the that $XXX up EBITDA

the the profitability is the the We even core EBITDA a year in are and in Aviat anticipate operating result XXXX.This Aviat fiscal we unchanged, though business confidence the business adjusted slight guidance the remainder leaving our of of have we Pasolink of dilution the from model. benefits

improve through fiscal outlook the we the XXXX that is pro done accretive fourth in guidance. expect You XXXX.We presentation for investor confidence the out deal third our sign our be to accretive accretion for work September of line of be We XX in the Pasolink can have the quarter.This quarter ] -- our also sight year specifically impacting of business to thus we structure our end the the the business. ownership. We of write a would Pasolink profitability close, said, of see outline quarter to after how improve Slide forma and by we July now previously Pasolink the the far to would in to like [ by cost reference an

open also for businesses operator, of want the that EBITDA up we to goal that, combined We long-term committed questions. state XX%.With are our let's to reaching

first Our line the [Operator Research. comes Litchfield from question O'Neill with of Hills Instructions] Theodore

how days was I ownership viewpoint NEC all of Peter, us with going? quarter. wondering the first XX give you that's just the good the if on on could Congratulations and business your

David little question Theo of take I that [ he'll a will give ], think financial color. bit because

David go. let I'll So

We're really encouraged on far by integration. so the progress made the we've

well us operating members. the in take model business cost allowed on interim as X, Our of phase to to quickly combined planning Aviat introduce team as day the our the out new

during has with feedback of also well real significant then a the the season the And of And actually positive. transfers physical perspective, obviously, do business IT a we as up really From amount We we quarter. for reason end we we number when to had had operational we and running, we accounts had the for of week closed, the time and quarter. that data first about a ran the for and customers, that, revenue met ownership been once holiday the fairly of systems the inventory got as at things the migration. business and limited of X month.So

start last year. and our backlog for go include backlog the further Aviat And year. was Pasolink time.So the so fiscal reported versus we because performance our time So in the typically year a think Pasolink sample operations.One We'll was this XX% of XX% ahead if with would our break prior quarter third versus QX, once at that limited end in have up out up of But quarter, once item again we'll our extrapolation and one it our report only of context, we with XXXX the so do backlog, year-end quarter we year. backlog a our true the note, will do full errors at the same separately. without business of other expectations at this of to to out break lead we the likely we to and next last of backlog that very core were disclose we'll consistent activity end

month we've to interim XX% XX%. period, increased in So from X that

indicative all I core very healthy think very business. that's a of

going shows that implies comment this the the here to that for I'm interested that? little good a there's Pasolink same right, stuff the Since zero keeping EBITDA, ] just Can reading it contribution Slide some has on guidance, the [ I'm adjusted really Aviat And if in business. core you on EBITDA with X a guidance.

Yes, we agree.

Yes, If Pasolink of we we be the would -- absence we would core profitability guidance the raising In agree. the transaction, range.

I as -- the year. be that say on an that is, on perhaps we would what stay there'll in So execute update tuned later

here. $XXX talked And quarters, I'm -- X, contribution more people Pasolink. about On question Slide sales that is expecting assuming million you you throughout more going one that's have new from to or about to both And have since linearly right? that on I sides that less if ramp learn products, that X the next got

I would say progressively.

to low we're we quarter and So move of expect We in quarters. we we $XXX our working times next as end-to-end the progressively that in, stepwise we are up million with But saying revenue the we quarter our progress. be up shorten lead revenue, cycle go want conservative that on Pasolink actively time in business. million see will be $XXX and to the we'll to X over

it the would model as is, model now. investor out. we have ask current, we for to that do to is and operating it bring for like what to we'd we million. into through as say business we to we're like will we the -- Pasolink progressively committed But $XXX X modify system, quarters.But will as way the the up a play go up progressive that may we So million step it modeled way $XXX way the We'd the the Aviat move base

ROTH the Our from comes next Scott line Searle of MKM. with question

just on prior the quickly $XXX just question going up to to the Maybe follow up Pasolink. year. for to record clarify the want Congratulations million numbers. related to here. We're ramp I to on

above the channel. So down now that's that's within actively managing -- you're But $XX number we're also times exiting a at from quarters million. X that lead reflecting

it of seems And a going like engagements be the then just overall that initial said like, we're on off like guys a on front of sounds to cash customers, in flow terms well from as It that front. I front. million sounds the follow-up better are came NEC actively start incremental think So on It to you working what aboard that you're with then. NEC. inventory -- $XX you down seeing

how incremental flow out So of cash wondering coming I'm the thinking kind about deal? you're of

flow. the will David take cash So

a $XX we $XX near term, cash in million near in only flow perspective, right? quarters, in the term accounts From million we acquired next by I be mean impact So payable. in and positively NEC the ARR over the couple expect of cash with will

collected that as is should that generate paid out, and So cash.

large capital Now which but expect be in a do working is we a item. fourth adjustment, quarter that disclosed the XX-Q, will

then currently able target generate about X/X we'll or the upside those take provides the work reduction And of net-net, So our got. ownership, of there. first modestly cash still what inventory but will the then substantial modest is positive generate cash that as be Pasolink I to term, flow, -- XX have we it mean the we we to we'll to to reduce inventory which the levels months in business medium -- business positive be to -- core of

just correct? number to as X smaller to quarter. larger contribution fourth And I a from that you a expect ramping NEC we is run want $XXX next Is that million that from exit rate. what number clarify just $XXX that, million the that over quarters,

That's correct.

was I It follow there was the if could And sounds a gross quarter. on great benefits up, like margins. some in Dave, It software there.

there's current I in going to mix you've margins I quarter-to-quarter, to the been we're working, NEC the called margins? quarter? full mix. though March that well, we to tends going some routers I gross some you've should have first factored volatile but have continues be from about the that out March. the even gigahertz. it we gross been switches quarter contribution think think guess know also basis, about I be be trajectory How assume know still How of into into should a upward thinking got on you new XX as I an product and

quarter a a in the margins near to record fiscal be business. that fiscal points wouldn't bit for remain gross versus to And of confident it on project the does on of and lumpy. mix. software this improvement basis for XXX term core guidance Aviat I was So level business. quarter, that tend the expect the was for the again, favorable margins little attributable persist to our year in previous the core full core. But we It 'XX largely

margins the margins think So to And to we the if range in Pasolink, effect term. expect be to to remainder now that that be to fiscal somewhat good.And for synergies Pasolink expect total will dilutive drive then margins would any they have. do gross I which XX% of near you model dilutionary further with the in the gross in our that drive 'XX, we mitigate be north thereafter, XX% and

up Lastly, follow Pete, read want could, on softness clarify, North the comments if I just not to to just on America. your year-over-year. I to into

BEAD big BEAD have some continue like, to not from of commentary bit public sounds happen or in And not you're follow any seen I I that a traditionally slowdown related and in little ARPA. for You it safety digestion up of fronts wondering wireless if a of others has those seeing any to other related on Calix ISPs, about could funds. to I'm talking big customer to impact mid but kind commentary XXXX? well. to base and late terms been ahead yours know of if those just awards BEAD the on a a and ACAM, backlog, starting We've as application pause, just whatsoever of but

going 'XX. year never we was calendar impact to BEAD thought So first,

BEAD to still have is We we So believe on now. track. year we it X basically say, impact, in an said, from going really was our think script,

less to areas, two, rationalize, is is that So was wireless unconnected we rational fiber -- oversubscription makes suburbs starting frequency. the for deployments certain the is bit think -- I the and that's or would gigahertz delayed the The to And Americans, a wireless part And talk to for summer we sense. from in be little that's of been right? more part whole I that BEAD of think developments, think more about the idea to X also what prevail, and economics starting opportunity so rural dense It and improved.And connect underconnected one. then are will XXXX.

] think we service on That your on way should it that, question, way more like maybe saying more the both [indiscernible] comes bought when RDOF will that than to for [ that, think happen have and is Now we that comes effect BEAD and Scott. appropriations. the in, in in going and that's X, positive FCC -- that unlicensed really was March backhaul, in pave a broadband you

Our next Erik line question comes of from with the JMP Suppiger Securities.

Congrats.

anticipate off, ramps contribution pick start are that What can And quarter? the then up? some you you we should and March in the revenue up? explain are First off in at that can give context of dynamics terms Pasolink play the us small why how the

sure because set the the we a make build we focused are reason and is we -- on want is want us, to to So ramp-up business expectations near we into and we're -- it.

It's any the our It's us the it's seasonality or factory, dynamics. little just a ramp way order customer time system, any going So our we not take deliveries. management think. to up to

the do range want quarter's So you that's next that. to the then for answer deal the way with of -- we And revenue? David, to want

Yes.

there'll I quarter's thought think do number, are but should in where to be. get ramp-up that a kind said, out a going I upside, some with we're and we for here. next range to range. can be mid-XXs that's what think the we Like And Pete of you pretty revenue the should good be

Scott just ramp. ramp, Erik, about the you asked asked while the And we're about on this,

the million on July on the call, out And $XXX we're for June get just, revenue modeling let's range, purposes 'XX. ought a cycle. 'XX FY XX be So X for who's for million to through to FY $XXX everybody

last The question.

combining What frame is in your You -- combined? terms the the did talk road as getting time of map. How products longer-term the products about

conversions the are we -- in lot see start -- and to to year year of can Pasolink hardware. the prepared to migrate the talked X, that, Aviat's after in we say third ownership, the eager or X the a software. would of we network software the I remarks, In about customers And management

NEC year [ X.X X And we years start our to post hardware. see year hope ], X customer of deliver So the And will historical able start first -- we year in priority. the that's would months, to -- then that we to software XX convergence to be can base. that

line Jaeson from Lake comes question Street. the with of Schmidt next Our

seems to the better which XX% margin. bit circle gross out XX% like a to want XX%, just to I initial kind you I number. of know that little back laid than

driving that? business there are product mix, the color would or core the dynamics it's what Aviat getting geography quicker just the about Is or it be lifted better curious expected? Just the helpful. margins whether in feeling Pasolink Any business than

Yes.

the indicate XX% Aviat to is the this Pasolink the it's XX% for XX% fiscal assuming the we're would to to to was are year. -- be just the So that going So number, so. margins going business doing core be or that going math, combined be range right? XX% that around And a in

about And improve good road we've Pasolink get margins moving to synergy cost the there north our the feel map we pretty future. here got So in and a pretty structure then solid that. not-too-distant

I discuss synergies, excited talked Those your you your you're cross-selling some can you some know prepared in revenue then, areas into opportunities. most baked or And remarks, about? about targets, just aren't geographies Pete, potential the but of

about excited every about would customers would in was are So one. over with from So than X was particularly to and very a other the most part Indonesia. then -- we're ] that needed It's representative. [ that we and really, that that is, and U.S. software, be came be Aviat And And Smartfren about excited reason Tier the two NEC excited we're the Indonesia, part place

mining, the we're Aviat to, most is customers carrier’s typically the into application can there's country Smartfren region they operators we and synergy where press It's excited for up oil offering and Indonesia excited principally we're release has of the or sum private public of deliver networks. what Indonesia.To go private had gas, been Indonesia economies network most geography deliver on sales lots bring put and Tier kind ] -- is safety we is that nation is riding but it about -- software the ripe the and industrialized services, where the that microwave, So network and simply, for about #X private [ Xs emerging think say, the the and in Indonesia. an that backbone, about is this telecom

the me, March again back expect and India quarter one in into The just in June? to rollout, you ramp still that I'll for do last and the And happen jump then then queue. here

it confident will happen I X XX. between sometime June -- pretty We were March and that

quarterly So on there's the timing that.

So with of little customer and that's in what is I to would we're say, base, we're drive the the Jaeson. quarter. good and confident bit And India timing. engaged March can between our June lumpiness I the respect conservative know news we're The a that

So in quarter, the in modeling put purposes, but it for could quarter. the June happen it March

question comes [ B. the Dave of with next from Our line Riley. Kang ]

Indonesia. to back Going

big gets it how become, maybe single-digit? maybe I XX%, mean, So can high like once going, it

we'll XX%, that see, not but anticipating point. definitely. this single-digits, at High we're

is I think, single-digits answer, High the now. for right

on And big can get? how they then India, equally,

We would say a…

Lower [ ] than Indonesia?

lower bit than little Indonesia. a Yes,

Indonesia And from I to mean, then, India margins low they assume are [ about to as going ] be I be what below? and they're going average. well? corporate

which driven business cost India, look, by The said Indonesia corporate up. we get as we the product, that we've being below think is Pasolink So take before, is But corporate is volume, average. can we below average.

point. margin that margins that we've when And level, from the XX% we start Pasolink, for say think But would said margin gross Indonesia get that's business and that beyond color think vantage and And would get today. way talking is also can the the said to XX% now, that's level.And best then give the have the that far about to point our about gross go Pasolink another we'll XX%. I how vantage to is XX% I we've so we we principally -- from And we'll can we it.

of question in favorable couple same be able I'll more you give answer. quarters the hopefully, Ask a and a to

changes environment, pricing can down? or you is, question last my And up just talk any about

Stable.

the question Northland from Tim comes with Savageaux Markets. Capital of next Our line

deal. the closing on Congrats

The think Let's to see last the on I is, backlog I at a few that, more questions appreciate while we've commentary. us begin got growth gave where here. metrics, which fiscal And you year-end.

commentary I or on XX% your love I any we're assume as to commentary $XXX $XXX color a much get do that? with that, in can. higher, that's million, but reasonably million, assume as gross interim, backlog would have given I but book-to-bill of you specifics Associated the was over

north math there back I of $XXX envelope think the is reasonable your million. far of as as the

don't simple in but We math front broken have the of math. it's out pretty us,

declines seem QX. revenues comfortably my in simple I'd out a that context, darn in pretty book-to-bill you But X. say, you to math typically over And coming and good be -- seasonal as of well, to all that points in see

guiding again. of Given that implicit to to be you your guide, kind Pasolink seem

in up? of are sort but…? India June could like It typical terms certain typical down, just spending behavior seasonality, that's quarters, seeing or you So carrier of that, sounds in what help March

Yes.

calendar QX, to right? about our Just talking you're clarify, QX,

correct. is That

Yes.

We to will And I to delivery we product, think Pasolink a we ramps. your inventory hopeful Tim, revenue business the we're would statement, of with down the -- to with hope agree longer to lead time, faster the need do working seasonality. cycle but little faster that. own shortening understand the better, bit that

hold. a statement. are I statement, now we'd your point pattern I agree where we that and -- we're we would longer year for right that hope the 'XX with will statement could say, no we statement now, think And -- that, would where where well, make a your But vantage business think fiscal that at we -- for have most improve make correct. for likely the different is be to to

take something degree assuming you given business June. this guiding I'll that. to stand-alone seasonality you I look mean, I Well, and pretty in the we think today. solid Pasolink be might stand-alone X%, like up be into in in revenues growth year, March of June, some that uptick X%, Aviat's Pasolink right, to mixing as maybe But move

Yes.

which be flat guiding to is… look you And next year it

Well…

Pete seen. commentary we've a little -- and [ bit wait backlog of and A -- which dissonant that minute, is with a ] please, little the bookings some

maybe flat, million, I'm and But that a be of lot I assumes reading good that's guess. in that a $XXX to not a to Now, X% seems full up assumption. Pasolink your And not to and gets of it, business. X%, change not that kind still there

can we deeper? maybe delve So bit a into that little

Yes.

conservative. came put And said the don't be me, want the the think to analysts And give we're next And wouldn't core to at year we together we the we is number on the where We what now, our out I healthy. have read -- For guide number, from -- with in typically statements. if you'll fiscal a behalf. August. backlog We

'XX the So time hard comfortable on where us time goes But better. with a to But expect number number. of to we're right you're bit FY as a do comfortable. would This give right we're now. I the is us that's on,

here. little I that just was doing math a time, a hard don't ones. couple A Yes. know quick if more

So obviously, international given especially were the the mix. strong, surprisingly gross margins

APAC. margins cited -- factors, happened very strong about kind the a talk there mix? a have you in have Can end of well. with international of range also to be couple able been little LatAm you're gross bit appeared more as might how high it It you're to that You degree and what in that of region and of

Pete also costs. beneficial, Like favorable Americas, input the the record is it in in well accretive, we And look in at region as as was Yes. had some software easing I I said -- margin if material first think you then also half. most store the was where the mentioned the That APAC. revenues

a that us bit well. as a tailwind provides to So of

year So factors our guidance of full a lumpy, really combined kind so a it solid. of events.But -- again, be all confluence think could little those bit but is I

from one last me. And

on some noted that's include anything when NEC talk assume up you baseline in spend other, incremental baseline? it you still when given closed about from does I And it from or it on here or R&D pretty sharply the is elevated quarter. R&D, the You that stand-alone hand? other the in one

increase basis planned And additional we include on map. an well. NEC So of the month as contractually we work out product that costs does develop organic up spelled then, a That's the road just to worth to were as R&D them. are X

if in little this on there, we're think and out, year way. we of thought it's and I QX, than in is So rationally for not track it was had It's a But guidance bit will. what had we planned. you any our overspending full kind anticipated lower

But little the expense a it baseline… something 'XX maybe over QX like sounds

Yes.

it's per [ enough Would se, guide than fair be incremental QX since your relevant that a for ]? stub is

fair. fair. Very That's

to Smith, I Pete closing you. CEO, would the call back Thank any remarks. like to for over now hand

We joining. our look in for days. Talk soon. about updating on to Be safe. everyone, XX continued you Thanks, progress forward

you disconnect. for program, does you Thank may now and conclude participating. This today's