Ribbon Communications (RBBN) 28 Apr 222022 Q1 Earnings call transcript

Greetings. Welcome to the Ribbon Communications First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. conference of your Marketing the Senior Bita turn President Vice for now over host to Milanian, I'll Ribbon.

You may begin.

Good our discussed quarter Financial full These XXXX Executive Officer; Bita to today are with are Investor to statements. are at Ribbon's are conference webcast results be the the Mick our documents including Ribbon's contained call for Slide Also Such and welcome Marketing I'm will matters Chief McClelland, Communications. both of the is Milanian, you statement rbbn.com, refer these on website afternoon, statements our XX-K. being call. Safe Certain and risks year the live to statements. those SEC, X most in release to business Harbor SVP could filed call. Lopez, and supplemental slides quarter forward-looking call XXXX Ribbon on Relations and Today’s Bruce included discussing the risks supplemental financial of Officer. recent and differ archived section projections outlook available. forward-looking cause this slides subject financial the results and uncertainties for I on are and that Form the from press where at be uncertainties first in Ribbon's Chief today, currently of actual including will materially our and second conference our we

I are And conference on this available section Investor as issued like Bruce. earlier the applicable press we call In turn for information as this prepared the now included GAAP to well of addition, Bruce? the on the to both Reconciliations measures over call. our we will which are Relations in earnings call, again, we to in website. financial supplemental would slides present release the today non-GAAP

and the our and remainder and the were quarter and results of Financial of increased to loss today midpoint We for for our Bita million the line the challenges, supply issues $XXX our discuss material the for first everyone ports expectations thanks new transiting with being results like continued Shanghai. at the Thanks, for successfully guidance. including our incurred first chain shipping Revenue EBITDA outlook year. Great. $X.X was delays to quarter of related was navigated million. through joining adjusted us the in a in

in as We expect continue margins be components the quarter, and combined affected to fees with are expect year of to but quarter a to higher again we result, logistics and by margins lessen to to book service material good expediting associated costs as second with were overall revenue this revenues, improve and and an the X.X times. bookings ratio higher the with progresses. in Product quarter beginning

times optical quarter. business IP was the Our for X.XX

maintenance grew nicely support year's the and Our nearly backlog now maintenance XX% booked. with revenue of

Ribbon Our from driven Cloud Microsoft services. our operator Last & now announced telecom using far Switch Connect Connect customer Connect extended cloud-native several provider first and service Operator to service our teams Australia, jointly of our Edge Operator solution support this interconnection accomplishments of Microsoft's Operator had with year. announced We've service. service and multi-tenant as deployments between offering in Connect a turnkey connect software support the managed week, the business availability notable Microsoft Connect Microsoft's so for is customer platform. we team

deliver SBC Ribbons' Goldman Google for services deployed already voice selection cloud-based Google Sachs other for most for that and certified requirements. just also service across the security seeing to of solution products and with trusted in John demanding leverages telecom major the leveraging Liberty Ribbon have are trunking of carrier on offering enterprise proven their that Ribbon the SIP SBCs announced announced others Cleveland Colt networks. world's largest Bank a momentum solution build These secure from voice Our complete their support same Citibank, Japan. team's Mutual, grade announcements chosen of communication virtual America, and number a Microsoft we're Deere, communication and businesses, Clinic, recent Shell including

followed a with new international with largest announced IP Ribbon European MPLS platform, announced based OTN In operators, support and a a voice in selected growth on in railway cloud-based latest fixed mobile first of who to their management additional win the we digitization to solutions. this also our is and network This great routing European half our We optical the deployment win significant and we in we management segment. continues second equipment business, platforms optical by of many in infrastructure the our company the build Turkcell element position Ribbon interconnect second our the of virtualized using quarter with and SNCF platforms. policy have WDM routing the the France. SBC five-year critical expect important project SDH with replace year obsolete to

mentioned win on MTN with the in We major of region. also I quarter the last capitalized award Africa with project two Group the

build accelerate and of in serving over the operator and expect global subscribers as region telecom Middle We this these on top initial across mobile success business Africa XX projects the East. we to with XXX this million

we aspects There's called expand the are broaden box layers. features will the and reach business network that of several using pipeline network's party introduced new on IP Metro over the products the the high third number complimented work on the quarters. emphasis over As portfolio addressable they're next of with will products requirements our major software into higher growing performance strong the Neptune outlined network our new and done system our that being our custom new We're performance we've a our from series, expand leader our introduced being of of edges months foundational IP Ribbon to XXXX capabilities by several and a disaggregated our the our a introducing which growing network of diversity of market white a earnings, further Sam have both These Bucci, platforms. supports operating our IP solutions products portfolio. routing next the productize across optical last IP series

we have a muse with orchestration interoperable for this significant industry engagements our We management vision way. cloud-based the and is it environment customizable This There for step Apollo domain, includes that we ZR a be level. really another to enhanced number will enable transponder growing feature perspective, have be important plus networking. enabling of networking strategy reduced multi including at stream gap cost software of plugin the realizing in and our WDM comes enhancements continues multi-vendor our truly optical platform XXXG support an a platform, and in and towards when enhancements customers. resonating. a to platform to simple And the to a with From transport interoperability open open OTN to have support new a transport steady

the edge also as growing introduction with gear opportunities. connect cloud-native of operator team is as and high well supporting a the in cloud Our integration, number of SBC

a new have will edge from of delivery being new our process that software the quarter, a all friction new management This automation development this and of both provider of unifies two enterprise products. platform introduced CICD customers. will us integration, SBC we're continuous cloud introducing reduce differentiate We that service competition. really leveraging enterprise the greatly And management major edge finally, continuous platforms software, for and introducing

our point. already use cost the version networking cloud-native our solution. is market XXXX, Connect of our the is a hardware a at optical our at multipurpose year. a voice enterprise of a IP expand SBC first with This on beyond will in across edge platform outlook and of enterprise voice business. edge rest product, is that generation the first performance software the fully me which The in The lower a significant few for Ribbon starting enterprise this increased second level has that brings in all certainly provides data containerized next X,XXX a edge that's And edge, regions platform activity comments increase new services to

of by RFPs the world. carriers replace being active opportunities and to Huawei need telecom in are around have We major XX these network. the with Several mobile the driven

in. and opportunities as both result mix where of well good investing a we're the have of IP we're We a expanded roadmap optical positioned

beginning significantly one years, major largest in as our reduce and field combines the a with lab over both provider well project last and year. uses service a core half we customers, a platform QX I'd The versus and edge expect in validation technology there's to third cloud begin commonplace cloud office the anticipate We Neptune provider their in operating process new from to and transformation large our voice solution have federal the the Edge home and funnel solution underpin Cloud view converged as projects, begin communications the validation the India their modernize of than a of strategic service XXXX, our of our to infrastructure for the For leverage going of This strategic to communication Middle growth strong of of with solution Africa also the new platforms several commercial customers a our US largest US our includes increased projects quarter application. CFE, Wireless, business, following customer. at investment as the large Japan, in the the large to in growing company of second America, that with to year. Mexico, and portfolio. East. voice making next On Digicel In is will The XXXX the such electric platforms deployments project's new reach this the continues underway, this optical and IP solution continued America, our in updating become and returning network infrastructure complexity remainder the well early over in optical traditional have as of opportunities a era. Similarly, validation and with cost regions, enterprise the several collaboration grade next of with investment provider requirements. compete customers. such summary, Telco for anticipate modernization platforms IP win we businesses voice our their voice from IP quarter we agencies for their application network. with carrier In as North new major we that deployments pipeline with we very project very equipment. work orders and validation more as With and Japan as the PBX of as well new existing traditional I'm areas, server the as next multi-service Ribbon mention as that in with initial aging to as tier shipments of I'd begin they they the products with results existing strategy we're first the positioned this IP growth in new and shipments Pentagon, in centric Europe, our over Rogers, share a unique significance management of In Lab the year-over-year win cloud several business. with deployments replace are a like places well that excited routing and products policy expect North XXX% that see mentioned market years. momentum Viral year, modern well of call, the such hardened

I a turn we'll results additional expect guidance it on progresses. first then some performance our year for the our over provide result, continue financial Mick With discuss quarter. quarter come back to to detail I'll as on improve Mick? and second to As to that, the

million, XXXX, Bruce. our in the to $XXX.X much, Ribbon In was range to to results $X.XX $X.XX revenues was above $X.X $X of of million. our first of midpoint our the generated the had near $X.XX very This $XXX guided adjusted midpoint guidance million, within an with an to of of adjusted per which loss guidance. also line share just quarter of $XXX loss. million led you financial our loss so million million. We our guidance which EBITDA Thank $XX were of of of

our slides As performance. historical quarter always, XXXX please refer financial summarizing and or supplemental website Investor first Relations to our

Let's quarter. commentary start for GAAP our of the results with

loss associated known as Technologies of non-cash in Communications investment Our Virtual the Cloud the includes of sale quarterly mark-to-market a Candy from American in the business GAAP our with loss million AVCT $XX XXXX. company's

chain million higher from and Year-on-year organizations delivery continued in our favorable increased costs Non-GAAP between and diluted to of quarter $X was a adjusted we lower our non-cash EBITDA difference versus million $X supply we expenses. in range points revenue the Non-GAAP the total lower their costs, XXX and indicated. In gross fixed previously non-GAAP million addition $X.XX On margin mix. an the earnings such last due that's results, assets incurred down in follows; non-GAAP year quarter research as per $X and $XX expenses were million. from Non-GAAP results loss service of of GAAP XX% margin XXXX due sequentially intangible within million basis, XX.X% as revenue to expected prior drivers revenue our X% fourth the volumes development as and to gross by were of in share lower to IP down in was networks. per basis to for and and XX%. year an to quarter our usual expenses $XXX prior other fact to restructuring million adjusted XX% optical Non-GAAP the Gross year. operating $X.X was earnings less compensation, invest was loss was to guidance contributing absorb compared share diluted $X.XX. margin expenses integration amortization first our the

XXX diluted XXX share shares. share million and was shares count basic Our our count was million

quarter Our in We're requirement note and should rate to XX% jobs from cuts revisions overall effective consequence non-GAAP X% for still capitalize our guidance research than full guidance and the of impact XXXX, of a that the tax a tax which was from rate. tax the for that foreign as tax on reflect the our higher now development our to jurisdictions. different part act. the as Please year is XX%, evaluating taxes income became

primarily driven $XX Edge declines the in Non-GAAP at first some adjusted two year-over-year, was mostly in revenues segments; by our see as down projects. our strategic million expense results and to lower sales million the an $X revenue looking cloud and $XX edge of restructuring of elevated result EBITDA $XX and by was million product the timing business, of margin $XXX Now Cloud for begin million operating service a down million offset year-over-year lower EBITDA quarter with partially business XX%. was of and costs. of This decline component The initiatives. we of results was

are the the cloud few million was additional points million. in quarter. $XX $XX Here a edge while on revenue service performance revenue and Product contributed

XX% from media our for mix a XX% to in virtual quarter revenue product total the application projects. versus year's accounted Software first network higher large under gateways due of of prior voice lowered transformation software

prior $X decrease and was down points IP turns was Let's lower first sold expedite price, was results. gross items, of previous versus decrease We year. of quarter Non-GAAP optical the of were which million business margin revenue driven freight recorded basis a from revenue supply The $XX by logistics XX% fixed the chain million, fees. goods quarter. XXX absorption cost of higher

margins the component increases as gross fees expedite expect year We mitigated. and our revenue to improve are throughout

in of and Now, consolidated customers of XX% metrics customers first of XX% International represented XX%. total here quarter. revenue accounted the revenue. providers for some Service the XX% provided customers Top were represented company are key revenue. XX revenue our XX% revenue. Maintenance of for enterprise

demonstrates solid quarter. X.X performance, our optical business, encouraged times, following bookings which IP book-to-revenue momentum a of customers, especially excluding in are solid with with maintenance We the our

the This the ended Now quarter. cash million by including previous voluntary made million, payment equivalents million the sheet. $XX and million to balance a prepayment a $XX million, of loan a decrease with in quarter we turning is $XX quarter in term the of restricted from cash $X including of $XX driven cash. We

remain Our million revolver still $XXX undrawn.

our for the met banking appreciate March. is facility term payment Bank. first quarter. financial syndicate credit million $XXX our amended We we announced, outstanding balance previously Citizens support $XX loan million The of the quarter. the principle the our As covenants We after in by in now early led

our of times facility was a versus our X.XX maximum calculations, was ratio As times X.XX X.XX a charge coverage times. and leverage versus of times X.XX per credit minimum fixed ratio our

and ratio second we X.X achieve maximum The loan quarter plan leverage via is to profits combination now times, which prepayments. enhanced of further

our development in the million in both were the From enhancements sheet the evaluating second We and cash compliance growth guidance quarter primarily strategy. operations cash and quarter. our million and company perspective, further in quarter, in sequential improve balance the order quarter the expenditures from met and revenue by are our in investments. Capital growth generated second first to $XX continued facility We support the structure to investment capital the in flexibility to driven credit further improvement in a half. and expect research for $X in our margin our

Our XXXX year. the second half outlook to is backlog, units, for product in introductions and strong bolstered ratios by good new the both book business of services

us expenses our steps discretionary well as half. second in the to taken prices confident improve we raising input We have reduction reducing manage the in and such allow will our are as that to the costs as fees, expedite profitability increased significantly

I'd to call Bruce. like back to Now turn the

comments, sequentially Thanks Mick. To we're stronger projecting reiterate second some mixed a quarter.

double product expect identified to on to region North sales solid the We to segments projects this and Edge related America, network and in projects in backlog business. based quarter. related and transformation in as enterprise increasing expected optical growth our both growth digit is Cloud IP in our European as projects primarily well are increase sales

expect costs. improvements the we've suppliers and reduce expedite also agreements and benefit our see strategic fees to inventory throughout of investment supply made chain, with to in We component including key

We and significantly costs the improve the combination product compared quarter. profitability of to first expect improved will sales higher

As our this a for result, second expectations is follows. quarter as

diluted of to range to XX.X%; to between $XXX EBITDA earnings $X.XX. million, million; share per $X.XX non-GAAP gross $XX adjusted a million and margins non-GAAP $XX in revenue For non-GAAP of XX.X% million $XXX of and

the the second second call our and still introductions. the the in funnel and performance to quarter the look the of improvements on in product year. and new achievable year, half further we on profitability both believe targets growing in We based opportunity sales For full we are solid established last forward

in over years. front surges technology the global of can next opportunity a remarks as take investment prepared incredible an concludes our the we in questions. us now communications that Operator, have We few several and

Silverstein with question first Cowen. your Our Paul Please question. instructions] from proceed [Operator with is

Thanks, would Bruce question you characterize and It seems direct you the pretty how visibility year? back the improved. questions. QX, is Mick, to visibility the I clear that appreciate is degree the half of you My your taking of into beyond

Paul, to to talk hey you. think, I good

and QX get -- we strength into on of good IP on and visibility take couple in got India. I our pretty business, I all regions it segment activities. the by good of good business growth if activity network mentioned our and I transformation further we're the the Cloud year. visibility the of into opportunities like see We different see way, I a in we've where those the in know, on Europe looking In side, programs mentioned optical share, different second there, talked Edge think through as couple I you about half opportunities our infrastructure the regions and critical wins in for with a we growing Africa QX, customers.

at of this to the So pipeline specific a is regional this I opportunities customer. and down and just project good of specific is opportunities, got as pretty not think, we've to specific activity individual kind we look

characterized think right. So, you've it I

I think our visibility a here, is definitely spot in good

I is it visibility sure to I heard understand I to make just correctly. think you don't but your say want not, is mouth, Bruce, what I well, your in words put I want

base. customer dependent. not an It's accurate one broad sounds or fairly visibility's it's any upon broad particular Your Is one that particular not region, rendition? dependent pretty It based. again, any

products That projects hinging size just projects voice getting of is. the we've It across on. have major It's and that going one are from of whole broad both new portfolios. variety in them here regions we're a with different of that operator two is announced started. US the accounts or project some of base validations. extensive of It's that and their opportunities a one I through a just uses mentioned modernization we not

the in that revenue Yeah, here looking so So we whole in second expect very there's funnel of different things they a half. positive. are variety the

you meaningful whether risk for this but in impact? got companies. factoring all recognize as give had can but not China? they've you another a assume then if to unique us they is I do exposure, any a everyone's lockdowns you impact like the you in, you, impacts as It what doesn't have are guys, feel weeks, even had four color they exposure. on And you in meaningful continue don't to have another impact Have if is, two right. these an factored direct yet, sound of you weeks, I All

impacted, it extended impact perspective, and has times amount two is but an the The further expecting that all second to region. May tried to the a first that material we the quarter. production is From get out second weeks, obviously, They're outlook logistics in primary openings, to the the been the ports improves for Yeah. through account, set we What three either coming in or of goods there finished XX the impact takes have just that about haven't did are second as take us into that of it on quarter. of we half talking and we've some the quarter. of

reduced some did come have the the quarter able obviously that be some things we we middle the put guidance. able right first we're of quarter. in as estimate to we trying But, together the to to So and in those guidance in in first sales were impact

So…

queue. Optical said are businesses but for manage you for this, quarter, me two I growth both the into year? beyond for you the the back hop the IP and Bruce, the businesses different the expecting One before year pause, last cloud I question and for view from

little for to IP bit days We year, and were we the did still similar double-digit optical full and full the where year earning very the call. have is view to business Edge to going our think the Cloud business We into I Paul. maybe down the ago. last growth flat XX a expect

to we earnings similar the last very what call. to at So guided

chain, but from for greatest upside? and chain no opportunity a a that demand if, one perspective it doesn't all is If environment, supply how sound normalize the stable that like one this? report, so if companies it supply And put stable degradation from where's do assumed assumes I other

IP revenue are upside chain. portion from definitely a the those in for both growing dependent the of perspective, business. It's More networking for on room the of on and business it's optical. line the on I optical, segments definitely the There's mentioned. Yeah, opportunity cloud IP edge dependent Both of and some supply projects less top think us. I

around modernizing example, infrastructure. but federal mentioned We those their whatnot, It a government was deployment opportunity. there's for business, funded I voice of think types get for one a upside around As and activities. the and that's an while definitely take edge to big an opportunity programs into and get does on the cloud those

And again, say, question. a what from the next Bruce, One I probably back but be really two apologize. obstacle It's right. All to to too I'll three within years to more can get India in results revenue that good the two, opportunities, three that where for standpoint? you, be a seem good can how years? to If back, next would why sounds be business big comes

competitive product into coming force. opportunity. Yeah. really the routing, untapped it pipeline and little I much out that's an position bit a I talked And midterm really in about We around just get creates excited. stronger IP I think the there's get planning, Paul. a particular

that plus the A good the clearly targeting things billion to in happen. grow those have $X.X So that business. areas in lot are of the we're to timeframe, range,

level We grow to business that, but that to it's the see that years. have next to few to do execute over can well how of easy

responses. Thank you. the appreciate I

Paul. Thanks,

question. your question with proceed next from Capital Our is Tim Please Northland with Markets. Savageaux

about a Huawei. with IP mentioned, I are on give pipeline having afternoon. you can with you do and mentioned to opportunities RFP a particular. the good couple you to in us, that optical about replacing The dozen outlook of Hi, I And think maybe ask about, want question and there to questions guess, congrats I most the you Sorry. start talked

that pipeline assume the there's any, or made us of take you wonder Is these I be of it I guess, kind any to you the of if an size type you a to upside? this deals. terms if year aggregate, guidance, contemplated kind what I decisions these this and in might of most able you your can expect think are would this impact. be So of of or of out carrier competitive give in these in converting whether situation, well, represent

good questions Great and Yeah. yeah. Tim, you. Yeah, chat to with

So are carrier all these deals.

the all provider Europe, and Pacific, the trend there in is Asia I think replacement, I And positioned them on carrier These certain suppliers, rip active countries are of they in mentioned Not that kind list out mobile mean Huawei that where all XX of telecom but in one in opportunities definitely certainly them on of infrastructure. supplier. tier say whole carriers. There's I of a doesn't providers. of a are what but in kind when are major replace, longer we are the all a necessarily and all as of honed replacing replace replace, smaller ones internationally obviously, as think squarely service RFPs. additional but Huawei we

overused term. a Now, one's, it's tier

you don't like well, on these as I and business from end single that typically store a of the IP at in We really opportunity but win expect company to I in is on looking getting of We're every networks out and the of gives to anything mobile front and looking are I perspective, IP a that telecom an for providers, quite I replacement network of we the positioned multi are carriers providers, expect opportunities. networking than further every pushing ECI or been an particularly both it just that very into typically obviously I we much, had existing spend coming cases the network of fixed these a it think don't network opportunities transformative major previously. and think further either them, here the carriers suppliers, and XG around hall infrastructure these from the the but of these and on to is millions new the of potential into We're now portion at optical capacity that differently the year. company. additions as are networking tens one be one where a indication use tend few not size up at supplier So or edge, really, major perspective, mentioned, in potentially the that

this question bit I really learned So from outlook this last for in. deployment. on of our stage quite little a your I year. it really we to think of In the significant year, of way, think of impact levels I've hard was time to that takes go this this engagement have planned very

these sorry. for XXXX pipeline all or XXXX I are think So really things

Got it. that. And thanks for

of are and on business, your or XX finish of these that group tier edge customers any with within that topic, new all cloud net up Just to kind ones, overlap

I'm what or have that or we world. around is. it's most little the of maybe sure where more something carriers like percentage given, Yeah, just Maybe a not exact overlap the the XX%

of some our have business We and cloud with side. edge sort

So…

Wow, great.

Okay. of see growth but as maybe in you talked question where any obviously down to the the dip last here the end through They QX growth. be to both gross in know in year and me go optical same about then business, double-digit was businesses the IP in going expect for on gross And you in continue the margin QX, commentary to that side. you I and QX margin on

Yeah.

second halfway richer the in into seeing on to takes that critical infrastructure. be projecting of us the are overall So from sure. Europe, clearly simply QX into quarter the that of the the IP answer was for fixed in the for mix almost we're QX, abnormal kind The the The shipments There's higher cost portion mix mid-thirties for an and there. we're we're optical of revenue level absorption, a short expecting business. improvement

seeing perspective, margin to engaging a component little product in or our a expedite perspective. And So I reduction been control we're a bit from trying we've as cost helps think that mix that. with fees suppliers our finally and then, from a

You for may up have went of little well making not the level seen our bit in the quarter, we're a to get minute as as ahead components inventory we're last sure at trying much possible. as first as scrambling

as progresses get year in kind to quarter. into away the to continue that's the of mid-thirties improve we there. it bridge grind yeah, So then the and expect this at And second the we from and how

much. very Thanks Great.

Dave from proceed Riley. B. is with question your next with Kang Please Our question.

I you I that about bit question -- was first what backlog? you. see to but I a call Thank little Good talked guess a bill, late, joined about is afternoon. book talk you did my

we into Yes. coming quarters, don't in up report detail. previous the second We is quarter, out break from don't Dave backlog. but it the It

of like it Is maybe couple maybe at least, granularity? roughly any quarters or

Can ask Dave? sorry, you that again, I'm

Your at or least, backlog. any on couple that? quarters maybe cover Does it of a comment

nature of days as we that quarter customers so at what quarter plus a cover Dave. -- within not level the we're to with cent the it's segments of get we're XX will we're and backlog, A working the just of into infrastructure whatnot. shipping. and shipping No, in quarter critical the We'll we're of of lot of the prior kind we lot XX% next typically or in a the

So Mick got to add that. additional thoughts on

Yeah, I'd is out that server just to robust. like very backlog point our services

the we not the business given our So of almost quarters, nature backlog. looking. as our the and It's of in that is multiple year product of backlog forward XX% have customers kind the

a point. that's Yeah, great

that, So backlog. already of chunk have, the the that's significant of the of that lot in maintenance we big portion given a

when so, normally really product we're we're to referring backlog, portion, about the So talking we're yeah.

it. Got

Regarding optical million it's million then going first million like the growth $XX $XX like from million sequential similar expect if $XX C&E, each, and Should contribute more your million of others? $XX $XX what, we to to a is contributions than to from sort one looks outlook, and or quarter. second it meaning both

first from digit percentage we double the businesses expect second so in both Yeah, be quarter up quarter. to the

sort are may a be in So edge little growth both of of in we similar cloud and bit more. definitely up percentage, a segments projecting those

XX%, Got then margin mid-thirties you optical said think current this And I quarter. starting at regarding it. gross

total blended gross gross margin guiding XX%, margin be XX%. to be to You're

gross expect I target XXs, for we should maybe, high XX% XX%, So for margin optical to hit your year? be to the know, don't

we're continue partly That's do the in of IP volume control towards half, because because and partly half. directionally grow correct. in the optical the traditionally. and get second that range product there had year. mix cost we margins directionally where expect the second of getting We again, on to think close of to back this We we been need back don't But XX%

because getting could are of comments, view some next the your some be your companies things on before that that? question like improve Got once And saying implying of again, year. certainly to is you're the but missed I actually until it. starting you worse situation won't earlier sounded last supply What's other is and improve my reported

of at it's as expected. we perhaps glad chain end supply Well, our things, the all to expectations obviously guidance, relative. see on sorts QX the And on delivered started When the results our estimates adjusted those adjusted we year, pressure took we we of for quarter, and I'm saw down. on -- we and surprises see the

a fees, improved that So this perhaps as I I try year. get for is, early. describe of in that bit it's timing communicated control. and it's logistics, it's as other they're whether can have stay that to taken to mean we most shipping here things and the we've elevated What is front of dramatically wouldn't get we're those the saw and to the increase of tried everything what and that costs of We thing. some by related a expedite actions the do of sorts it costs, coming situations component at seeing, costs well around

are saw I it's as one, I think wouldn't we're we coming things it better, it gotten describe that our two but addressing the in and control. So

Thank you. it. Got

I'll the reached to of closing have We the session the call question-and-answer for end over and now Bruce turn remarks.

and in the again for interest Communications. call the on thanks being great, everyone Well, Ribbon

using May format reminder, again holding Annual Wednesday, virtual a for a Shareholder As easy Meeting and of our we're on XX, once attendance. we're

we to us on So ask that. join everyone

to over and we'll the next to upcoming progress. on you of series with invite posted two keep a us month conferences have also or and you chat investor We

thanks operator, concludes that and call. very that with So our much

your made today's at time. conference, Thank for you connect your and participation. This concludes lines this you us