Keysight (KEYS) 18 Nov 222022 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Keysight Technologies Fiscal Fourth Quarter 2022 Earnings Conference Call. My name is Dante, and I will be your lead operator today. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded today, Thursday, November 17, 2022, at 2:00 PM Pacific Time. I would now like to hand the conference over to Jason Kary, Vice President, Treasurer and Investor Relations. Mr. ahead, go Please Kary.

welcome, fiscal Keysight's year and conference quarter call for XXXX. everyone you, fourth to earnings Thank

Joining me session, are Sales and by our Keysight's Vice and President and Neil Senior Mark In CEO, Chief Dougherty. Customer the Wallace. of Q&A President will Officer, joined CFO, be Global Satish Dhanasekaran;

to reports. and Neil You investor.keysight.com Information Financial under release supplement financial Today's by discussion and information non-GAAP quarterly Satish comments can refer find the on today's will the tab to press our at measures. and website

We make the to divestitures otherwise unless growth, impact on on XX comparable core of the are website, or noted. reconciliations directly months. our within are will a acquisitions GAAP and reference year-over-year also and comparisons which financial The most basis, currency excludes movements completed metrics last and all

will no to valid these about forward-looking today's and for These financial risks statements the and picture SEC recent of factors. of subject and as a Please statements today. are call. more filings of performance obligation uncertainties Company complete to update assume risks them. on are review our only other make We the We

Lastly, We you is to to Wells by and Credit many scheduled Fargo. the conferences Satish. in I to Suisse investor management upcoming of will now, there. hosted over And see turn hope participate call

to exceeded finish and high strong end all you, reported guidance year. for which drove you quarter thank a results, the Thank strong of Jason, joining us. fourth Keysight and our the

We capital record for share, grew to a year, to transforming revenue, a a Company through new of making $XXX illustrates up share solutions earnings we're or our flow. Before in returning all XX% provider. continued record free which per $X for in was into repurchases the we exceptional performance and which while cash XX%, I get billion, million to for XX%, increased which XX% set for orders, fiscal quarter, highlight the records want the which new software-centric progress new

continue see our to my we of for differentiation technologies needs. and activity addition, with key on around comments invest Today, focus customers headlines. long-term future level high and In a their next-generation three in engagement I'll

delivered execution enabled and teams navigated and all-time Keysight quarter share who per expectations outstanding supply by ahead fourth record macro an First, of by chain, we successfully earnings in dynamics. revenue geopolitical the

Second, we throughout steady $X.X X.XX. a quarter of orders record achieved of billion bookings with book-to-bill the and

customers' unchanged, they maps are more our While demand will which backdrop, anticipate the term. in multiyear remain the given caution we exercising near road macro moderate

outperform the the we robust Third, markets as year. fiscal differentiation the to market remain based in our proposition we secular look our R&D entering trends and innovation longer ability strong term, enter we of on have position 'XX, we in our strong. our the as value backlog end solutions, the remain And confident customer

and consecutive due record model been our ninth has semiconductor quarter. a the Electronic the This core business with deeper per in achieved all our broader and our revenue take a let's on record solid fourth general growth. Now team growth the dynamics. strength and strength to grew of as successfully $X.XX orders look across basis. to efforts expansion the in Record challenging solutions all This resulted The of and of grew Record solutions communications revenue. EISG revenue quarter a $X.X billion leverage is order resiliency of basis, exemplified Solutions Keysight growth at enable Auto, on double-digit ecosystem. to achieved Industrial first-to-market core its of industry quarterly our quarterly XX% electronics industry-leading navigated strategic best share. diversify regions Group our across earnings of ability exposure. our X% to

we're grew and across for and focus year, key suppliers orders this all OEMs with pleased year. double on continued and Automotive investments investments, quarter $XXX we consecutive the which Keysight. as portfolio million to our the drove as for In continued new automotive, on continue wins solutions seventh strategic their records exceeded digits the orders capitalize of adoption new markets. set revenues both three For mobility EISG

overall companies add such XXXX favorable designers AutoTech AV high-power as infotainment EV conditions. dynamic. characterize silicon vehicle And performance semiconductor DC AV under PathWave automotive-focused Emulator, cameras charging of capabilities surround Lab's announced support and commercial which exploring addition, for automotive continue enables to sensor recently real-world customers We high-voltage, operation In support Keysight's view standards we including MIPI varying for battery In vehicle to applications, electric as other which to technology. electric Breakthrough won in-vehicle applications, Scienlab displays. applications, software Award a accurately are and of long-term adoption the and

We advanced automotive are leading test compliance solutions expanding for and to verification capabilities our now offer designers. diagnostic

demand tenth QX the to quarter and We sustained capabilities, the was Turning solutions our semiconductor positioning of for process a precision and test wafer order which nodes. quarter. our consecutive business. solutions saw advanced of record revenue enable realization double-digit book

RF general across advanced in and today's Ansys, In as grew well including health IoT flows integrated addition, communication Keysight and demand Synopsys wireless as broad-based industry wave with for orders has education digits markets. continued circuit requirements, TSMC to industrial from Award XG XG of millimeter joint research and design quarter Year record a wave digital on and and Keysight millimeter flows double In leaders, received the system-on-chips. partner design and electronics, Partner built RF this for as strong remains development nodes. and

with all-time geopolitical orders appropriations. XX% investments alignment solutions continue regions. and with across spectrum the gig terabit budget devices spending to industry continued a Turning wireline the Solutions Group. Annual year provide Investments Defense communications our delays revenue key and Open revenue include XXX IBM Ethernet despite ecosystem and throughout strong accelerate steady The deployments technologies. capabilities the U.S. tools networks. in communications portfolio's revenue. automation grew across well to to record business sustained XX% recent as that network drove with Commercial as for RAN ended next-generation growing to year, our Communication priority orders wireless for delivered headwinds market-leading cloud and gig year in in We new new development with with and capabilities were wireless standards, integrate growth XXX all from next-generation deployments. XG and of world around Ongoing into Keysight's growth. and orders as partnership to to their needed for evolution wireline highlight XG industry record Examples highs a

validation into combining a new and radio platform. also use system service our location-based Certification case Global navigation first satellite single testing technologies of completed We the by XG the XG Forum of from global

satellite key well and we and end spectrum continued capabilities defense in for partners, applications and industry's U.S. the digital headwinds. record markets, the while geopolitical advanced Steady in for X.X business with we and future grew space collaboration to and X% XG space research. and cybersecurity of silicon investment and X% satellite operations, Proposed drove leveraging investments saw aerospace in increases and in setting for and the us Aerospace, countries in navigating demand. new defense increasing defense a new position data first opportunities. interconnect, expand center and modernization data quarter high-speed in and revenue solutions. government Lastly, center year, investment allied the our enabled transmission terabit for

has this strategy, and continued year recurring revenue our which $X.X our approximately solution services billion. As growth an and Keysight revenue integral software order overall, to outpace annual driven to of part

high-value of and X/X is first-to-market, just focus Keysight's driving represented revenue over Keysight's development innovation total Software the and services our on again solutions. success of year. for customer

Our execution. Keysight us recruit employees and the their the conclusion, like achievements In to over the midst of the the strong record of we balance culture will years strength business, resilience collaborative our honored economic and believe confident uncertain talent all our and to Fortune's placed our commitment that the has tenth model. on environment, thank gives sustaining XXXX. sheet exemplify our We would of workforce, unique in advantage. Best ability list of develop talented operating Workplaces track our competitive be a our culture flexibility in an for I are of and differentiated Keysight's remain In and Technology we our and capable contributions, for

and discuss detail. performance to to turn in Now, financial Neil it more I'll over our outlook

and and grew range Satish, XXXX delivered was with We revenue outstanding XX% which an our quarter or $X.XXX of everyone. of of fourth a you, guidance billion, end XX% record core hello, above Thank on the high basis.

constraints Our to strategies to be the continue effective. ongoing navigate supply

of While billion $X.XXX to fiscal near-term we the or backlog. year orders X% X% in billion $X.X quarter, basis, with supply increased it the chain expectations. and situation improved on over core revenue Record a moderate entered XXXX continues within our

of a record and operating pressures was by million and supply operational for QX, increased was per and was we which, basis margin instruments, $XXX our XX%. high well which earnings reported lower-end sequentially income points XX%, were of end the results Operating $X.XX expected, to of at $X.XX the gross due inflationary million, Looking $XXX margin of down XX share, shipments improving we in expenses chain. enabled as achieved we above guidance. our managed, generated Net of

the XXX average weighted Our shares. quarter share count was for million

provided Foreign exchange global was impact on program. hedging footprint, by to then by thanks which full negligible, our supplemented natural financial a our was hedge our earnings

million, communications and CSG generated Moving million, of or reported core and driven record revenue The margin a Solutions margin delivered by Solutions achieved the of O-RAN operating strength defense Aerospace, on all Group XX% XX%. up $XXX markets. XX% operating across in ecosystem, the R&D. Industrial of across basis. XG $XXX The terabit adoption of fourth XX% million, Communications $XXX revenue government record performance and or revenue revenue of X.X to and of Pacific of margin X%, XX% in $XXX and XX%. achieved achieved in the strength quarter, of double-digit up margin on Electronic by basis, X% up driven XXX XX% our XX% core up by investment Commercial of record EISG segments. gigabit growth Group a increasing and gross driven Europe. Asia million gross

delivered trade income per XX%, of or financial improved margin headwinds XXX $X.X ongoing R&D, XX% billion, flat year constraints, foreign totaled basis outstanding We Gross to $X.XX margin supply on FY net share, basis. full $X.X $XXX a core in restrictions. 'XX while incremental non-GAAP 'XX FY billion exchange steady XXXX XX%. XX% Keysight our to holding face or at Turning revenue in despite was operating in million year-over-year significant results invested up the up XX%. was performance. points and inflation.

quarter on an for operations at $XXX average in million. Moving million, ended share flow. cash price per and shares price Share with million share shares This equivalents, repurchases our approximately cash $XXX.XX representing flow We from average brings XXX,XXX this of was $XXX net balance free or year fourth quarter $X income. billion $XXX consideration non-GAAP to a XX% free flow share cash of total of for a the cash of XX% than cash and an $XXX.XX for million and at XX% $XXX consideration generating cash of Total more of flow of sheet and million. $XXX year our totaled of to million the cash total flow. free approximately for X.X total of repurchases revenue

and We our to in to confidence and outlook through turning executing Now backlog Keysight's the exit uncertainties. continue record guidance. ability near-term year with

XXX As few in we approximately $X.XXX the on to $X.XX diluted as to quarter in billion we a QX be weighted first share share enter of reminders range of earnings the to A based and per range XXXX million $X.XXX billion a revenue be $X.XX modeling result, year. count expect of shares. the to

compensation QX. our And historic average. our of in in cycle this year current is expect increases wage environment, inflationary administered consecutive we above annual Our second

tax FY of expenditures Annual With highly targeting We approximately drivers 'XX uncertainty and revenue. are XX% that, expected a we million. 'XX. we'll Q&A. current closing, I growth to and to give be recognize our In back we of $XX of the million, Capital markets are modeling for is for non-GAAP expected expense XX% effective be R&D disciplined. confidence at to will to FY the cost long-term outperform it now the diverse interest approximately approximately $XXX the investment flexible are environment, ability Jason turn us macro to and structure, be execution, end continue market. in secular record Keysight's track rate

That the Thank formal our Dante, for could Neil. please give instructions remarks. you, concludes Q&A? the you

the Samik question first comes Chatterjee. line Our from of Instructions] [Operator

you mentioned the This outlook. Zhang sort related first perhaps dig the on My of prepared question macro Chatterjee. strong Congrats for to Samik of in slowdown some quarter what in is and pullbacks. on sort little there. Angela is I'd and a to like more on briefly remarks

telco in from R&D follow-up. have are a impact CapEx, companies commentary a on there's budget? seen that then Given we've that indicating other you pullback And seeing their I any

with pleased a of demand steady we're we to sales Thank I a Yes, pretty as from you, Angela. year. results strong saw the this the also stated, environment, quarter. of in a the finish from and And perspective consideration And strong perspective regions quarter. All grew. through a spend level our very

the cloud -- smartphone going remain we're XG from spend seeing cloud the for strength to of So carefully, XXX spend that would And we cloud some providers some the And data see our also pushed strong. and around And obviously area out the we it market broad is broad-based. the was while you to the even color, if ecosystem, the strong. on and in to at service into bit And a double-digit, inflections some look manufacturing that pushed broad gig component adopt was I gig wireline, us weakness to -- continues the continues quarter. an in remain orders that deployments spend of center this parts pockets demand. with say in in direct strong and providers did watch there of out, was related XG was grew end R&D. We cloud and markets little the of remains world, XXX

focus and strong. they remain So on new innovations R&D,

then nodes, right? would strong Moving see carefully. and to aerospace gets end business, we of is from appropriations electronics had an PMI general inflection growth still that budget strong, Semiconductor was equipment double-digit perspective. of on EV we from from new but which remains and remain demand obviously, defense for markets, But area continued we part expect markets strong it not given AV process. typical EISG process to remain Automotive, typically to that the And us, -- moving into year-end specifically node continued watch and surge business, the stage all our lastly, a a are new we the of And spend as did strong. quarter out. and exposure the because playing strong -- wafer its the investments

remain the would engagements doing the our our customers So activity and say strong and with with this quite with customer I we're quarter -- and environment. well, in pleased

And is I follow-up, of mid-single-digit this Great. know then posted my for revenue And just your you long-term guide XX% growth revenue sort year. growth.

sort growth do you could air see fiscal range? you revenue your did perhaps where pocket forward in thinking above pull you of still Just of for what supply Or -- 'XX? are broad And long-term with a strokes expect to 'XX easing? typical you sort an so there fiscal trend be

uncertain what Yes. it's so confident, environment. remain We with we Obviously, see far. an Angela,

guiding So, time. we're one at quarter a

go. we'll And confidence in look we reflected the we the see as as we'll look we forward, good our guide, about. environment, QX at demand and You which you feel updated keep

next Our from UBS. comes Snyder of question line with the Chris

Your line open. now is

on and I month mean were market on want the the of year-on-year. each up follow demand kind those said I of think orders you -- comments steady quarter up just I X% to commentary.

growth commentary range? should just the strong. the are being So X% orders sink this we the and we that? different fiscal Or businesses. it because, a QX X% is And quite maybe kind indicator that easing to a cautious bit? Satish, take what profile make bit And ramp push ultimately, does maybe an all it that Should to are this of below seems through more going as that normalized back should everything like you of customers subsegments

here. is this bit add a Mark. I'll and detail that little Chris, take more

the as quarter. steady order was throughout said, our So Satish level

you watching more time down. if They would taking we're for slow make look to decisions, to customers are not. did right, orders because this, So,

was matter As October very a a orders. was strong. us fact, of record It terms of October for in

So that's good.

customers. us this We've talk about about for quarter X,XXX year. before customers heard You've the whole across new nearly new of addition XXX added again the

that business, I paying So and to that our durability diversity creates see off. and more

the as digits up Our well. customers top in quarter XX double strong were

toward an think time. to more that taking we that with as of And slowed, so technology our we in fact biased the market fact has do waves did because the design through I to customers And development all the business advanced continues and other to of translate impact that R&D the are seen recent not So, term optimization. we've also the it to continues. where see

we So in customer or that's and terms what from macro do uncertainty. I see of active very what of terms in my is activities see, but we look seat, we see order around some customers. And

more CapEx Our ultimate customers six-month make funnel grow, to continues but decisions. taking are to time

more a And quantification Neil. situation of you little QX. maybe going just Yes. give bit is this I the into

while bit was the posted compare moving here Keysight's would QX first point the out of I orders, QX, time in history first that of quarter. in a from first that A a we the new guide year. have ago, don't the fiscal quarter that ever growth So end in the into we year difficult of we'd order

from that So perspective. we've tough got compare a

In strengthen know, year. addition, points. the all dollar the FX began in as back five you headwind percentage this to quarter a be estimate full of to We half significantly U.S. the our in pretty first

another as Russia FX of And in to trade of two headwind China recent business, three increase so we last headwind. well a from quarter which restrictions the we've of in as our And the happened year. five-point points the got estimate loss second

the combined quarter. to as first just us things enter headwind here eight-point the seven- those gate a So out of give coming we

moving last in maybe same the to lead the ordering will generally maybe kind element that times of right customers you the that we or of think are not that element? the year. that. with urgency that do chains chain supply slower, on saw if Because the longer commentary I order customers separate of supply direction, how kind Appreciate And are they're demand taking order, from

Yes. think right. Chris, you're I

And is us to I pull fulfill we put we're spend, earnings deal reason continues starting of also to scrutiny they takes whose as some think also you a the duration their supply to moderating more is that our earnings put see bit ease it And normalization chain that an as demand the environment we -- and some the time for of has in, right? the expect the fallen -- on additional delivery takes also order level continues close process. who little out customers to as through go so to well. would

don't know Neil, some on So before. to commented those know if are want I normalization you factors. the -- I you've

Yes. I the guess say, the we've only you over the if supply over level look averaged last that's a disruption the obviously, three last, then other by point of that X.XX by around we book-to-bill make months. last three years that first COVID, years, happened driven XX chain at is, our

times And so to that normalize. would time we've in, book-to-bill come known for that had And we occur. as lead some our expect normalization to that,

-- about ability I to but again, that's a back normal a more to And to not something so, level, as one going think it we're impact something move continue book-to-bill not our is grow orders, of and approaching our revenue. guiding to

next of of Mehdi SIG. questions from comes Our the Hosseini line of line

is line Your now open.

CapEx capital Two Should to X% back go I 'XX? remain intensity around want assume fiscal I to in year follow-ups. will that XXX. to

Yes.

supply were mean of with capital broader one definitely the So by this is that's purchases the chain fiscal environment. year our in CapEx things I happening impacted our

about 'XX took things very can't with guided our to what that million, expectations. that original be -- fiscal were delivered. at we cash from commits was we to you line so to I'm in significantly flow -- our It see now $XXX that a beginning of for CapEx is close year just much longer the talking But and perspective. And underspent the

pretty scaling so, next go capital a year. back with And seeing cash dramatic flow we're overhang bit into go we as year into of new of little a we next purchases, as but what is a

fiscal that to $XXX what's up capital that's so million our level And 'XX. in going purchases to carry

the guide revenue right? CapEx, your or flow shouldn't is use up as I There expectation 'XX? cash come some So, guide fiscal per for revenue CapEx growth some to with

right. That's

to The Okay. remained revenue of the has outside APAC that growing region mix China years, offset low should I you're increased kind you're shipment as China makes on Should the much so And that assume the XX% I a percentage able to within of to China? to neutralized? several Is restriction Huawei. from want region just go past of a headwind then, that the it extend China. over back in APAC including

Yes.

a we And broad-based have in there are and And successfully and I in some pivot the and region, that of think of China China. well. maybe North region. into multinational despite business seeing including moving world, we're the good creating to technology we ongoing seeing rest some a address I the are and have given of that as also customers companies spoken development, demonstrated we moves but capturing have other demand in that onshoring on ways we're ability Asia situation, parts of into as we're -- America, geopolitical focus before, think in the out spend Pac that

Okay.

the China, supply of positive. that out So moving chain fact sort is that's the

Now quick if a may, just follow-up. I

So those changes you positive. could or supply way than that factors cyclicality more And of to of there chain top your some happening this? think production-related budget. is the aggregate the sensibility the two on to XX% also exposure about volatility. R&D nature that structural On with that, is offset customers' a have Is right or do

out think now us, playing I what's that's for right yes.

Deutsche Bank. Our line next the Matthew line of of with Niknam comes questions from

now is open. line Your

could. I if Two,

First on backlog.

you So about you $X.XX mentioned the at year ended billion.

elsewhere? China And in restrictions. wondering, I'm out headwind EISG? restrictions, affecting an is primarily any something XQ? $XXX on the relative show our just And an there's math I'm to if be fiscal wondering this? would cancellations or the could point to percentage think think a those last just aware X.X FX about quarter. this you'd I called three of if Or incremental component that then mentioned you two to just up I is order suggest there's trade it higher, secondly, million from

Yes.

Neil. million. Mark -- the I'll address and more you're yes, let so the our $XXX orders outpaced So within little take China by a than But question question. obviously, I revenue quarter backlog the then is mean, bit this

continue the we So backlog year. the we've to gone do as add throughout to

And on effect China situation trade Matt, October Yes. the into that specific X. went

much QX. wasn't there So our effect in

to see is run over will year of some in the quarter, out We projecting first X% a business rate based X% effect situations. the the our other but for entire on

is level thing just in note we at in It's not any for been low our last case a four other the The seen have the historically again to that running changes cancellations. quarters, and was that QX.

next questions line of from Aaron the Our Rakers Fargo. with of comes line Wells

is now Your line open.

good Where I manufacturing today quarter. can. stands whatever I level I of Congrats And progresses that want model, guess a strategy? between the about? process versus, R&D us the we as of you the thought effect you do of the say, just think on on same at is execution of software in to exposed? year, the remind of to that the if Can back defensibility mix think kind business kind next time exposed do where over as to that, far the monetization go to frame where you the let's stand high want

you Thank question. the Yes. for

R&D I at we're level, approximately manufacturing today, highest XX% deployments. XX% and think the XX% at

the and gives the really so it it, XG then that is digital So diversity to at resilience do we approach go-to-market And because involve automotive of us you sure. is this that the of enable solutions. and secular, in gives so and of believe offering R&D business. for with to of software-centric on that goes forth. And With some our on, strategy, we're we're that's mix regard happen the with focused a this in environment XG look sort that again, software by applications and to next-generation the health, here R&D such we our with more innovations -- us innovations areas as faster. Clearly, way congruent

our So again, And increasingly, that strategy. solutions our as growing software of goes, we services synergistic with form to customers, that deploy is the in more mix.

reached services invest our this and software of and to revenue over of billion. So those end you grow the of revenue, time at recurring year as portions business well. or a high will total resilience look continue and the X% our we'll $X.X annual our new has at durability And ARR, mix increase and to

if a And follow-up, Yes. then I as can. quick

basis. Just curious, of only backlog, think curious, six-month a And Neil, level we normalized like? we about is appreciate and about when backlog we think how out that progression the what should looking backlog just on forward looks a your

than Yes. I time as that talked given of software same increasing mean revenue, over period three-year some Satish growth dynamics recurring of revenue services, seen the say, deferred in towards will higher ultimate migration frame. significantly tools, as when be our have about, systems think, rather time things XXXX I the than drive our we in was, our to normalize level the backlog just it XXXX, pre-COVID well

to have see out plays so time. think that over we'll I And how

to times worth way our and five-week -- in. well billion that X.XX. previously on backlog you that would over going of extension had to a be built result mentioned I've adjust the math. in, it. probably four north to kind a lead times there's expect of about of ordering as abnormal of years can built pull to of a the five of course weeks' last $X we're to of as backlog think said I've lead the we've again, patterns four- think lead We average of to of come we do as times kind this book-to-bill I three And

environment. supply We're challenge a still in

now. constraining is supply improving, factor it's right While the

with the questions of of line Suva comes next Jim line Our from Citi.

line Your now open. is

noteworthy that looking is too going level very you us process? can starts this benefits it Is hard kind as your where as for sales to totality your it impressive services, ever and XX%. adding off help these understand, Because you go a feasibility to Or can at of incremental of Where XX%? look Or are and I software percent a very software around of -- and way like, point XX%? It's XX%. kind over to services is at it's imagine about low, reasonable you would which I get think about growth forward?

think Yes. the have we they of cycle just focus strategy, but customers' on we've challenging -- our from strategy on. focused the that's in to And has continued problems our and as company focused been for have solving than and demanding Jim, we've value and software-centric XXXX, sales, strategy on most that customers, else. journey life prudency but creation as for And the that, been capture a taken value also not I on this as form Keysight. our solution in a this better anyone really our do

Some more of of considerable nearing XX%, sale a in alone value, seeing newer with we've category in about as it is total the RAN where the recurring as lot traction, that of well. being bigger XX% Open and are solutions portion the software such we talked

So, continued our good the about solutions. we're traction seeing for we feel

so time, with continue end to verticals. in market the over you've solution also sales and on earnings seen will latest out may into the in put this the deploy software design some some And some comments automotive side. as we we announcement, offerings. Mark with semiconductor successes And strategy the well examples as sector enter I deploying we've new our had make

of that ask element would I that, mentioned what is Jim, And is important this. Satish. and the Thanks, you go-to-market, Yes. an

I We are about services services and at software. today. attached XX% to see that for We're upfront attaching grow. want

advancement. stream So that's of another

updates The other solutions software. thing our we to and more is are that delivering more you can see through

and XX well. course, updates and, Release additional of XG that to you about creates up-sell, cross-sell going XX, Release our opportunities for recurring much solutions of software as is If that from revenue XX think

expansion that and So are attachment our there's several of recurring to and of -- there's our solutions. that we to upfront total deploying go-to-market encourage now elements growth

the on Great. is my then follow-up China. And

the heard I'm in I'm kind it. Was rule calendar to to fiscal the of full rule kind I 'XX, headwind. model I like, And kind the around three year? fiscal changes? of of points two fiscal magnitude trying that there I for Is think just of QX, triangulate the out from assume all ahead like changes. after of it's any, buying the -- sorry, of of

estimate in And as There be to from be again, point of the points that's of but on look for based there some said then with mentioned run fiscal think Jim, with I won't restrictions. that the And at the Russia. trade of to we rate us we the little rate. one of business we year run was think Yes. that's new two as what available headwind headwind entire Neil -- backlog, a another will more -- bit another QX the I 'XX.

Meta Our with next of Morgan comes from line Marshall line the of questions Stanley.

now line Your is open.

about then for maybe that of that. peak. gave when just a other In kind period waiting the kind initiatives extending general past, thinking? kind about kind like time of current are of to much expecting, you're see going some do you peak demand? you talked And of you tightening current supply just some a of just availability it and you're be kind guys amount parts were and XG kind of thoughts just lower But of just those the is of get a investors in XG wanted and on 'XX, I a maybe loosening of ORAN second, kind was But of context seeing just just what to you but 'XX between supply release? the initiatives how or small some parts that the talked to chain. have still Is that more than

you, Meta. Thank Yes.

we stated, multiple catalysts. I I think have always there on think are the as XG front,

months said spend. a lot we about think the I I played first hoped, deployments and as of have captured catalyst That's the had XX C-band was that in out we the ago, U.S.

are India made happening India, Asia have out pleased that roll action of XG. We with commitments and in that's some to parts

applications And playing such opportunity Open customers looking deployed, second wave SA for us still challenges as wave continued -- further that's again, deployment part scale the with lastly, as opportunity. deployments that's, opportunity some across new are by is continues There's RAN adding to push complex out versions the a for ecosystem. global gain continue this millimeter to has the So as to to millimeter But the anyway is third out R&D that be XG and be to are that now. traction solve. and right longer-term to the us anyway. operators monetize trying That

point evolutions, based attention, have go-to-market on lot newer we're Ixia XG have that our capitalize to of secular see semiconductor that the which comprehensive of to with next-generation positioned that have a we we're and trends to acquisitions out to with nodes. we R&D opportunity a in and wireline the business. gets mention positioned well Yes, very to the we well we continue continues on want made, I additions Not and traction offerings the we so, automotive but to there. to with also it. And have grow, in we address diversified have

actions about take best I capacity, but not we chain, supply We're to think of our as all obviously every be and yet source to putting of to semiconductor in all continues have from for run stability right we But we a a to year, we've a -- time. over quarter. took second and redesign do the environment they're actions is, number on supply the back better talked speak increase of a really had the the there chain And constrained to environment. products than of at and question with greater partners, part expected sort we asked supply this it those last about place get enabled our of pre-COVID information series source to of that all think chain And So it and calls. components, basically of you a a business, second actions now. I our still supply might and 'XX to beginning us that's us earnings diversified we

of America. David Our next Bank Ridley-Lane the comes with line line of of from questions

is open. line now Your

Sure.

the giving sort then revenue first guidance? mentioned of pricing growth to you're a more And tailwind just what normal And about mean the quarter, I pricing. how not of headwinds from type You talked of really wondering of is in but volume today levels. first is quarter's tailwind into significant embedded is some versus points one couple that.

of part. just What missed that last sorry, I'm was David, the I question? last the part

growth the is in volume of embedded type The first quarter guidance.

Yes. the the backlog. -- best and months, embedded we've been We've we've obviously, our of I XX had price to are mean course those to rounds last I with think XX doing in keep the -- increases inflation. the question of multiple pace had pricing over

of you maintained have that basically inflationary increases. which frankly, Although at think that based over this we in I in keeping basis seeing can result on fiscal a I what we're environment margin pace 'XX, fact think strong with we're terms see course XX%, on the was it's the of flat margins a very

increases on quarter. that cost have yes, that our structure will the well. above as and we embedded continue so in next side, first I it's for doing have while be backlog one dividends to the the and materially for example, are that our salary inflationary right we elements going And in in yield historic -- year revenue, second like increases this these now, and to not consecutive year our averages. be will our referenced, our fiscal administration are here are with And salary stopped

difficult such $X other of volume As high million, deviation it's question, and, in our really hard dollars instruments literally meaningful given that selling to to on of question. that's very get answer a that -- we're in to cost of question cost, a a hundreds the cases, where the answer. that nature There's cases, mix some to business

tailwind follow-up, you quarter, here that two think another the mentioned Sure. autos, it's a doubled years. is last And last over as basically right? I

orders. you quarter, This mentioned $XXX million in

feel is fiscal don't of I of want nearing has strong not not condition, the to certainly in cyclical macroeconomic -- secular subject to year. like element orders of your it. XX% to but it's close a kind you this So say, trend to sort there Do

this pushing then different in market in growth this very adoption regions the mobility into sustaining. doesn't Europe and charging seen secular. generation into and seeing conventional, as It of the is here it is and next coming more at mobility. some David, I'll the design the communications that. the fast, as top well. talked in And There's vehicle. continuing is helping and all deploy underlying with The to the this in regulations and is protocols, is our technology the The in batteries that's infrastructure other Mark. countries electronics side out on infrastructure, very in the what's growth technologies. further answer new we're on position the we And connectivity next-generation customers goes add, growing from statement. And the strong happened from stop R&D that, but is different charging year our adoption. strong, last toward battery It we've prepared the about and just

multiple for them. long-term So, growth this strengths it drivers is secular us, and really intersection of a great has behind

Mason from comes Our the question Rob next of Baird. line line of with

open. now Your is line

And wanted this look just sure case? it I roughly to want year revenue XX% an like that what this R&D that's exit clarify, that make year. that's I'm I Neil, that's does you how of more to steps be because the rate past mentioned And in just than I was if one about would curious correct 'XX. point just thought up.

Yes.

FY So XX% long-term here that under 'XX. spent has plus We XX% our Obviously, been you're in right. or our target.

year. I think a big function the the of within that outperformance was revenue

time core and a remember, the revenue to XX% growth on actually you we last on year, year, we basis. guided this If you X% grew

R&D more with plans for much that of lower revenue level the And aligned so, growth. our were year

a we us of a see as lot customers certainly the from work. to think opportunity I in to to continue go invest we So, business, for growth of to continue future of pull our R&D -- do amount large our

the of rate the at get here to And out so, the revamp help back above is going to get first our us the exit XX% to XX% towards in We XX% or administration that's quarter time first here in quarter Obviously, the intent fourth quarter, at direction. you not bit a that out is question. by but to even potentially salary in of move is the not an to little may revenue. looking

Okay.

you the extent chain Okay. the still That's about working you through how any through down working does to remain pull you what thinking the year, And ability supply capital tight thinking are are that the somewhat about helpful. go to year? year, And -- or capital? then as for contribution the

us the We tied within for we're -- an built supply for of supply reduce inventory the future longer in revenue advance it it capital the see use prices opportunity the situation over think chain months. some has last for parts. capital terms that, normalizes, where delivery at the certainly that we the working there paying frankly, over We significantly chain frankly, our been up to the inventory, is up as the be impacted to last a XX of future of that's linearity terms in I buy And of has money that working course the will of the over then Well, of course see commitments term paid inventory via new in the year. of least quarter.

certain building of We're You just-in-time when from where wait shipping just a a a imagine and you and environment you're more and move more parts, can ship. shipping. stage, build to for and building doing finish lot

we fashion. were tended to shipping of the more more And than carrying loaded, quarter results us would in linear be in end revenue is which so, our more at back-end if receivables we the a

a of that does of supply question. So That it we need how again, see happen, would ball expect we But little to I would chain function that to to ability and answer a see when think -- reduce an a does happen? eventually you capital. bit normalize working crystal does is -- it's when

back conference That the closing to turn today. I remarks. concludes our to question-and-answer any session Kary for for would Jason like

Thank us. thank you, and for joining you, everyone, Dante,

that look soon. all evening a we you forward to mentioned, good wish the concludes he and As and seeing call, you

This conference concludes our call.

You may now disconnect.