Corning (GLW) 30 Jul 242024 Q2 Earnings call transcript

Welcome to the Corning Inc. Quarter 2 2024 Earnings Call. [Operator Instructions] It is my pleasure to introduce to you, Ann Nicholson, Vice President of Investor Relations.

Thank you, and good morning, everybody. Welcome to Corning's Second Quarter 2024 Earnings Call. Wendell Schlesinger, and Chief Executive are and Executive Financial today Ed Vice me Weeks, Chief Chairman Officer; Officer. With President and forward-looking the to that of Securities XXXX. like remind that Act remarks I'd you Litigation Reform fall of meaning contain within the Private today's statements

These risks, company's the financial other uncertainties factors actual could cause in statements to are differ detailed involve results materially. and that These factors reports.

specifically performance indicate we'll be comments discussing consolidated measures, also unless data. should core we GAAP note that to You our results relate our using

Our to core performance by measures are non-GAAP analyze measures used management the business.

noncash quarter, between yen-denominated write-off constant Japanese gains For the the charges. primarily earnings translation EPS and and debt reflected as second adjustments, contract asset translated difference primarily GAAP well on core as gains currency and restructuring

impact Relations GAAP cash corning.com. our the comparable As mark-to-market our reconciliation core found no be section Investor can has accounting in results on of reminder, the of GAAP to A flow. at a website value

core website webcast. We also Supporting along. shown our on may Interactive with live slides you are on to Center. the in access encourage follow Analyst You financials being downloadable results our

over We And now call for are website to downloading. Wendell. available the turn also I'll on our

by Today, we quarter in results. April. you, And morning, and strong shared into AI. products the strong sales of we the going for primarily good adoption optical Thank connectivity returned and second The quarter the Ann. was XXXX to exceeded announced everyone. our We we generative growth, year-over-year EPS new driven guidance outperformance

great with our growth this don't of provides start a why shareholders. today why explanation for quick we So a opportunity application

requires second in GPU every switches centers within centers and network network. creating data contain GPU of to traditional a connect CPUs. Gen cluster, other neural interconnected AI a a Our every the to data network

a the center. than in versus capacity processing new this more is traditional XXx network about data links The higher have bandwidth they CPUs, of GPUs because fiber number connecting them. need result Now connections

provides which players also the only to the volume, not innovate is but opportunity Now this space. major with this great, in

years, needed helped customers We X cables, AI second past the links data key integrated the network the optical to custom design and new solutions. this fibers, Over world, invented we've connectors in their centers. next-generation for

products installation space save new and on-site dramatically increasing embodied the reducing and and All time overall while cost These reduce reliability installed labor, network. carbon. lower the of

Gen As these AI our products quarter. drove in I the outperformance noted, adoption strong primarily second of

of XX% In more fact, drove our in grew it the portion business. year-over-year. record than sales which enterprise optical

centers. center. data AI been AI-enabled facilitate each requirements for the Lumen's network Technologies next Gen I've about talking opportunity global our bandwidth reached build X interconnect years new agreement the an of also between XX% data increases Gen centers. to that capacity the data We've a fiber Lumen inside AI of of reserves to with

Corning's Gen This existing to will from be Lumen Xx deployment plant their the of Xx into fiber AI first anywhere fit and that new the cable system outside of fiber enable amount conduit. to will

billion in growth is the $X the call SpringBoard, and annualized Gen more adds sales cash strong in flow Now which with opportunities next we profit plan within X many we've one incremental AI just the of years. than included

we plan sharing opportunity for for about quarters. how you tremendous want shareholders, understand a of want Springboard. more springboard we few But been built help on in the We've today, outline last points think to way. We've the to some I comprehensive our our key and a

Let's core start components. with the

in $X.X year. low show, began shared with third quarter quarter our year-over-year $X.X we in we the the our And to shows for XX% sequentially of quarter up. expect be we morning to results growing First, And the that to as second would approximately guidance the quarter, continue first march provided quarter third and in the previously this we Sales our billion. with that growth. billion returned you sales the grew we release

sales demand X in to than billion $X our the within converge more next drive for and we years add capabilities. and as Second, expect annualized secular cyclical trends factors

positions encouraging sets improve. markets seeing to signs are of market innovate new levels. growth secular continue we to to strong, and tied market Our above drive we're product trends And

growth, Third, flow. to as we profit capture this deliver we powerful incremental expect and cash

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as and incrementals. proof strong results of serve quarter quarter Our point our second a powerful third guidance

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also success able to accelerate be to strong SpringBoard, cash We free cash generated and to with return flow shareholders. the expect we of of the

plan, and the in began quarter back we second In shares do quarter. growing fact, the in so will our buying the to due in third confidence

So walk core through of components I'd just the Springboard.

sales I fast. a an with this company. to to until Now chance provide for on extraordinary because talk context is science really slow many it you me of gets time material probably more and the opportunity want you've say our recently, is wicked heard had I've

of hit You inflection. moments these

part they and years, for just a Gen insight team all products that, we to AI. these I dedicated deep before long the new on for a had customer overnight seemingly capitalizing our been I've relationships that suite last develop our example, To of become noted, For success. product do X

strategies even to to fruition. Some take come longer

everything starts quick critical Meaningful in innovation takes time. milestones you these And succession. happening then and hit

We are moments. of these one

announcements. quarters, next of share a customer to number expect Over several we the

our a commercialized more see march innovations quarterly up performance. You'll steady in and

to to help you context Springboard a the happen. put I structure our want they give coming into as So plan those milestones you total of

starting above billion to which chart incremental XXXX run rate. X SpringBoard last put of axis going the incremental $XX rate. us at annualized sales point, X the quarter for the And time years. quarter We billion simply use represents sales explain run our quarter a represents axis our X as The I'm our X year following opportunity. Y this projected in introduced sales to using X $X.XX

Now numbers. let's fill some in

our internal is nonrisk-adjusted Here plan.

take Now a lot there to this away from slide. is

The end first by potential sales rate a is XXXX annualized at with $X XXXX. in of the opportunity. We're sales by looking end run of growth significant we have of billion billion the

combination insight We growth. of our across and provide drivers market a the all by trends, or platforms, expect growth access that driven and we'll upward springs secular cyclical behind of

this internal historical continue trend Now our platforms thereafter. assumptions, of productivity Successful of and milestones and markets with for on it's back When not say price. we the a are markets a recovering all operational of adjusted, lines adoption innovations to across projections successful number execution what of we based our risk that for mean is new plan. and is number including

help That plan do said, we've taken opportunity investors. that. high a this to inform translated confidence To and it into

X on First, focused next the we years.

we of in trends, different some that potential across through our adoption probabilistically market innovations Second, as market well go adjusted all of and potential markets each for timing volume market of as our of and secular cycles. businesses outcomes our including access down the may successful dynamics, platforms, our share

also shareholders be trying with to come to We the we plan drew also quarter straight a that guide for as obviously to we strong the It the important dealing It's built not we this hockey purposely we how expected high investment stick to quarters. XX every won't this year. But our plan, to line. are a we see is weren't next when decisions. this help for note springboard a inform their And confidence wedge. growth

So how are are we to time. doing so terrific a far? We off

see on Let me explain you the point the chart dot $X.X billion here.

X were quarter sales XXXX billion. $X.X Our

Our trend get $X.X continues were $X.XX you into quarter And X that the sales million. difference when is quarter X. XXXX And that, annualize billion. billion you to $XXX

run The the $X.X additional our quarter billion. third rate sequential by growth increases in

That can As you are into is only springboard being X quarters we our plan of well over said, XX-quarter remember, X evolving ahead a SpringBoard running we're years. a milestone-based the next rate. please see, plan plan. run

activate. us, yet of lot plenty of of have opportunity We a springs ahead to

start, Clearly, rates We'll update hit well milestones. we you a to run as the need above very significant we're deliver. to strong off we

energized of early as up morning, wrap Gen you response our to why pleased I So SpringBoard. with I including, encouraging we're about see the can we're Products. our progress, course, AI this think And

few have more We over lot to start those. news a milestones as to around next months the expect we're scheduling and hit

be Directors. in that springboard as set as To to note continue Board event September we'll guidance Investor early a we XXXX. more will our to [indiscernible] of well end, the to investor SpringBoard, another skill in is Board closely Board the plan. with our align planning it the full forward we profiles with composition Day refreshing of of our that seek We're important Also, as

detail more some SpringBoard. Now turn the let Ed and on for it quarter on to over perspective me and

proof great We're sales Good Thank start. opportunity of second results We believe a profit a plan. you, everyone. our Wendell. incremental SpringBoard strong both in and quarter point flow and the cash morning, our the to off are

dive we our drivers of platforms. see I across access before I'd growth results, into to So major like share the the some market

I'm our Wendell cyclical the this plan, of on the and which of is window. billion secular of in share going while internal billion sales incremental shared by in of X-year $X XXXX. by end nonrisk-adjusted with you end and growth the XXXX focusing $X the to drivers some

of a Wendell Let's Gen growth. AI start spoke significant with opportunity, amount Optical Communications. The adds about,

from rate our to We delivered this the driven already business in of XXXX We adoption underway. solutions by compound more sales grew which year-over-year. growth is XXXX, generative second in annual enterprise connectivity the expect our quarter, for XX% than the AI. And enterprise XX% record

are inventory the current closer deployment to In their reaching customers our and end their order carrier to beginning business, levels. of drawdowns

low of expect size contribute the bring counting on in deployment TV efforts we several add year to display, In significant per add about beginning to broadband over the an growth. next growth. volume communities of to government program will the Instead, we're equity capitalize not with sales access high-speed Additionally, through inch on and years. screens to and screen growth mid-single-digit growth to rural larger unit XXXX Internet trend

explained, XXXX. have display maintain price we triple sales a triple-digit we've in expect automotive as that automotive, by business Additionally, adjustments previously returns our today, In undertaking we're and we business. glass to currency-based currently to business appropriate almost in

dollars And announced to adoption, of build growth to the GPFs us will solar of the the of build-out to as adoption Act map of U.S. of the XXXX. of offers chain. start for U.S. expect expect face year in support inflation adoption This model reduction the in hundreds leverage we U.S. new BEV alone. millions we starting EPA require entirely supply in sales we with a XXXX. an regulations in finally, the Recently Even U.S.,

in These opportunity. are billion $X just some of the our growth drivers

third the probabilistically we plan since springboard the this opportunity quarter shared, we've XXXX. confidence to Wendell of been high As adjusted with sharing billion $X you

have We strong flow starting and to expect the operating a we cash growth, and we're base. capture from as incremental profit strong

share price ratios at Our and appropriately customers. we've demonstrated productivity best to raised inflation our with are levels more

margin is margin Our quarter fourth improvement from quarter a level great of XX.X% in was basis on same In proof gross the gross XXX XX.X% of up XXXX XXXX, the sales. the point. in points of second

share for us quarter, our returning products sequentially adoption that, Sales growth. driven highlights second XX% connectivity from of versus results. billion outperformance me reaching With strong let primarily some April optical the AI. the $X.X billion The grew new to guidance $X.X of was year-over-year our our Gen quarter by in

and range. flow EPS Gross coming points, expanded first XXX Operating points in $X.XX, also cash twice sales, as by margin generated margin than grew quarter, more and XXX strong we sequentially guidance our as above sequentially at and $XXX XXX basis of improved and free the versus basis respectively. fast million. April year-over-year XX%

sales return up results. Communications, our Optical to $X.X reflecting Next, were to billion, turn growth the let sequentially, segment. second segment a for for me quarter In the XX%

on reconnectivity were Year-over-year, network the incremental continue delivered as for down net customers though, in Optical began sales network to sales up strong XX% income up at down customers as deployment actually their AI with sales were driven XX% sales $XXX XX% increased by Carrier We Encouragingly quarter inventory. X%. sales million, to grew levels. the growth. XX% sequentially their profit sequentially order draw current closer Enterprise Carrier to solutions.

Moving to display technologies.

XX%, in income were $X quarter as sequentially. with $XXX higher XX% X% volume net was the income price sales billion, midyear support up first XX% ran quarter Year-over-year, quarter. Second rates panel up up sequentially second Net utilization consistent and by promotions. higher price. was million, were makers to the and up sales at was Glass driven

forward. Now let price minute spend approach on to me a our display going

just business. hedges time. appropriate our As our and respect We're that beyond. XXXX an in to place in display of for you adjustments we've yen, currency-based on progress the said plan With in the before, midst we appropriate to have and at we doing make to update we price maintain returns will

better They're spot not core at XXX than but of the current rate and much the they're XXXX rate.

of We of expect hedges an adjustments profitability and the display the our to for price our deliver appropriate combination currency-based business. level

about For your segment profitability the of last of margin think can from appropriate you purposes, net as modeling the reports. X being our income years average

Technologies, anticipated. Class reflecting $XXX quarter reflecting down second Sales X truck million, year-over-year, Turning the by up of in $XX quarter devices strong Net to semiconductor-related products. Specialty demand year-over-year, America XX% year-over-year, XX% glasses in manufacturing. the were was Materials. up volume driven down second sales continued In premium the $XXX Environmental and were North as for million, for cycle mobile impact and income million, X%

on decreased income year-over-year was volume. down $XX X% Net million,

heavy-duty in Sciences, environmental were down sales third quarter. year-over-year. of be sequentially up the $XXX second up XX% the in million, $XX market continue quarter in the the this year-over-year. income year In Life was to million, to and X% half expect We second weakness and sales Net

and Sales XX% down million, to primarily pricing solar-grade Hemlock quarter were year-over-year, Emerging $XXX lower Growth in for polysilicon. Turning the reflecting businesses.

outlook. to let our turn Now me

market. For driven than adoption will continued quarter, optical grow expect which products, to solutions sales our to the billion, expect slowdown the more of connectivity X $X.X we in AI we new business expected by the Class communications the optical U.S. our third Gen offset approximately for including truck primarily

the Xx sales. of $X.XX, We $X.XX expect to growing range of EPS rate EPS with in the

which previously is springboard we XX%. base, are guide EPS you sales approximately EPS sales our our XXXX, are approximately are incrementals And our running XX% ahead well up our strong, sales compare QX in springboard of fact, is shared, As and if plan. up projected to our and QX

of strong Additionally, quarter cash flow. anticipate another in QX, we free

the the most long organic our the same. to shareholders investing value term. relates prioritize we for allocation our it We cash, remain capital opportunities, As priorities growth for this creates believe over

add of we've shared in for the and see technical $X.X sales minimal capacity midterm, than billion in cash today, expectations capabilities And you $X XXXX more CapEx that to billion. investment. our can place As reflected have we the in annualized with in

efficient We also in seek We're to sheet. and maintain a great strong balance shape.

We have longest S&P the XXX. in of debt the tenors one

significant coming due year. we and about over only Our years the $X debt current X debt average maturity billion coming XX in given in debt next is about with years due any have no

billion bought for finally, shareholders. cash we expect of share continue we This outstanding to half strong we And growing shares buy SpringBoard, million confidence back generated second buybacks and for our shares. our of XXX quarter, shareholders. in third the track in to of of shares record continue returning quarter. excess our about to value in to Since Because expect the back almost XXXX, our we $XX started

sales springboard In plan. track on summary, opportunity. $X our plus great our billion to we're start We're on deliver to on off a well

and to results of as quarter and sales profit deliver growth. proof cash expect incremental the capture flow our quarter points third the strong we Our second we guidance our

to I create continue more progress months sharing we as back Ann. value turn that, I'll look shareholders. plan on make With our coming the forward and it for springboard to to in

Thanks, Ed.

Okay. We're our question. ready for first

[Operator Instructions] question first come Asiya our Merchant from from And will Citi.

strong on results. the Congratulations

sustaining plan, that XX into visibility outlined? over little of your bit over have this the if talked have do in may, you that especially on what couple visibility a could quarters, double-click the the you are maybe customers quarters have the even On Gen momentum look I -- as and about you next if on AI, products the of demanding you you side, and who Gen optical the you've this next that AI the spring-forward kind

connect. strong is we use these place for is that visibility of put they'll centers that relatively getting that wiring take to system is we're that data Our what building diagram the in high. growth And because we and brand-new customized some do for are

we've of to customers ship together core all them. we from need for products the few last right years directly put drop for So with it versus be on these been actually exactly day working the to the at start those what they'll components most then

well to of a will they some when way, their of we're already install ahead So in needs them. beginning build network

So that. on we have good pretty visibility

is solve mouth the driving what's some outperformance challenges. this word consistently our very to far, on have And been help product the positive. the other we that over folks So haven't them to been of with has time period who us of working come

picking in back we're a customers new us putting building ecosystem for these together as into so is result, network. And this up around new that

variance variance far, if seeing you that our has upside at most So of been we're what is helps all.

that's Yes, great.

it's maybe a the solution? has Corning or as side, couple your, much an that let's quarters versus even of say, about the you think with the moat optical so competitive ahead enterprise in prior And ago on opportunity greater your

So new-to-the-world together. driven the is really all new world we're that Moore's doing competitive here moat strength build can like most Law. it that place, And person we're where the almost who super that fiber only will that And in the on the and systems you in connectivity should we're of trying system. cable directly put think these around to high-density us putting reflect about a

the amount volume is to same it we're intellectual this area, within very can guides area. and componentry. people performance doubling increasing And who There's the while volume the doing Were way geometric protected performance same light the increase few the of do of properties. optical the

competitive increase advantages this will in believe we our segment. So

from comes Samik question next Our JPMorgan. Chatterjee from

magnitude means give opportunity of then us revenue enterprise of you specifically how in years? opportunity Lumen the and on can deck, over wondering sort terms talk billion split to from I'm a $X to Roughly how that next springboard terms of optical. color of is couple think in that this bit opportunity of if more Lumen can the mentioned and Wendell, guess, you slide by what if half XXXX. agreement I just about the Carrier you revenue, about to in maybe between of the the

enterprise. it's can Well, you fundamental if way just in we come requirements. of back Gen of we XX% coming let's related think to off fiber out carrier piece it by and won't size to can networking both first is about you sizing, in you think majority and its AI want. it, driven the say the when be is Lumen, I far the question, change compute your But you And as enterprise as you it. start our global that capacity, with the -- see

If sort you and your our the view and you you total that's take of expected just what will it, zone of right? XX% be in take get of going to revenue Opto Samik, in

Lumen exciting each centers out how is of other significant data us the a business gets network connecting makes cloud, technical The in and right? had for transaction the large. What the always we've Because to at so that's within in data dramatic and need centers connect a has to GPU-based for in will the the data each with fiber the increase Gen of advent other these there centers question for network network. be new back-end to that AI-enabled been data a Gen AI

of answer of are large bull inference It's to where and with responsive training network. how Lumen to make both of sense interacts accomplished. Does case about for that I've how the is power to the in architecture segment going model language deal your certainly been the question, The located strong and and favor proof that the is If you, where that a exciting it on is the point depend that Samik? a and is

what agreements other solidifying guess about one terms in opportunity -- I them? of well of sneak scope Yes. the similar you just think I part, as And more the the do springboard with with if carriers just

what is tech conduit. new first of great so will the at lots time, super of would that exciting And speculate double fiber it of this going the in What existing done be apply to believe is exciting. to generate want they is don't to is that customer amount right? can their I they're Lumen has about place I that, our interest. that sort

from Fox come Our Steven will Advisors next from Fox LLC. question

Can just enterprise one optimism puts of mentioned that rate XX% guys diversity I this on quarters. optical few go more think, of for the over some Wendell, in There's you -- also. growth have for you could and takes type question next lot just that there's concern, for more be the Maybe as nature, through a the while you it business CAGR me the years.

of for comfortable idea prospect How of that with the get AI a project sort diversity, customer do over that enough type we have the diversity you years? this few next Gen steady is growth

builds since is question, to first you're the that right, bunch believing probabilistically plan, we as vibe together where way gets happen. is when you will project we have it, put adjust a where $X is It's down from springboard while when that think that Then to right, about we drop after about, far and that our addressed these talking you this a billion rodeo, you're new that you chasing it can Steve. you'll that great consumed. is if like have us that what And truly things to a think we get will were it of start slow exactly then whenever get tech, can pieces right,

as your modeling. sense And think then to start that's that again. Steve? to sought through address make we Does And you you, that to how

around Yes, bit AI? route next that over sort few quarters? early that Gen it like there's Or little so a further, stages that to to does. Maybe the we happening see a growth just the are consistent push of

Yes.

near at the is high, given next feel our we a providing post about the like was the to grow us Right XX% XX% do you and he pretty that number And at then first you. up has really I quarter, just rate. comfortable saw For visibility of guidance we Edwin, XX. for in a with guided quarters, Ed few guidance, think show we term, you that is the together grew enterprise now,

Martin will Yang [Operator from Instructions] And OpCo. next from our come question

assumed right to XQ? price Just a display increase XQ quick it Is no or the assume there's confirmation in guidance. on

a guide to. In so with have of approximately range always do our we sort that And for also mind, and as range we outcomes has billion that where general, well. we around a we our guidance, potential of question. Martin, encapsulated in a EPS that thanks on you drive $X.X number Yes, provided

display our a not QX. of speaking we're midst price currency-based about doesn't with an adjustment, at this won't we're customers guiding impact price but time specifically So the anything because in mean there be in in that

Our next Bhattacharya. from be question will Ruplu

I'm this in filling in follow-up. I over for the and drivers saw quarter. both margins think you growth? Wamsi for few And Ed, growth gross strong should today. a are we How sequentially trend And the year-on-year have what about next quarters? gross margin margin

Yes. Thanks. Great question.

I general, place we in support the technical the level sales. higher think and have margin capacity for in drivers capabilities a the on gross of us to are

So go as we're up. costs in sales not our add having general, fixed to

So to that and as we going is margin both margin for what's really go gross us operating drive forward.

up, And our there margin go that I implies up continue guide think as go our to I for sales do is QX. to think gross room for

these What display your you core And when rates if on expect I can rate? and you're of on price glass market in reset the impact XQ a expectation adjustments, ask share? And should implementing your utilization of calendar as follow-up segment. any do is we see maker Ed, currency-based that the yen panel for the

Yes.

time. a sort of So at I'll one those take

was little I about So expectations. even better on than QX. increase They it spoke It we QX, utilization, actually hot. to ran It we a that. expected our significantly think when did from

sort at level we likely QX, or year. run they're little about to lower average as out that of think think a for the to I

our to We of hedges and in think right for they're all middle running have rate, that the in to work. XXXX the that's with And or will when core come going place thoughts customers. in price now, less complete, beyond. retail We're all our expected with meet back how line and adjustment on more respect demand. we to share We're currency-based a we'll

income X the adjustments think most to you the is combination is of margin get a percent if price get components years. when about going about I I Ruplu, goal the that did and think last that forward, our question. your averages important of any your hedges miss our net you apologize our profitability income at or of But I thing out -- net had And sales of the to

intention this I would adjustment. to and result our of think industry just as our price share upward a and be overall our our to hold share approach currency-based

Next question?

International next Mehdi will from Susquehanna question come Group. Hosseini Our from

want to less This the optical secular growth team. profitability back for margin understand about half everything understand And for the it go trying more is of business. I is profitability, to I what is is But I think better than display. to and income net that this when brings. the and than of it

to sufficient clear. Hopefully, should going display about I think of here. dollars that revenue be the assuming that's growth how So comparable that meet income from will net display, to sideways the is just to go

Mehdi. Thanks, Yes.

our XX% faster in about second guide EPS Xx XX% quarter think growing and and implying sales a I if than and digits growing low then back, growing you the EPS stepping single in sales our think rate So that. the growth

because can capabilities, comes we outpacing place continue technical that have the to the growth. cost, sales support primarily to we I EPS think regardless from, growth in of the where the capacity have growth

especially the quite are where I also space, margins business data AI data attractive think the in growth. to in space and we that expect optical center and see center the the

and Would has concise XX%. be be Let net kind able optical past, it income in clear. by of averaged to the margin you me more significantly

looking it significantly could above XX%. So be forward,

be above can it think I XX%.

Spector from comes UBS. from Josh question next Our

you what that third of decline in to of Congrats how quarter. if the just If kind of what for maybe a the I on that the on wondering was out just you're quarter called on carrier in sales. and seeing Cannon business? compares James side you for trajectory frame you the strong is This could last did quarter Josh. you enterprise terms XX% could of frame

Yes.

increasing is sequentially. business carrier our So

the think news. I that's good

that's So although their year, because now down causing inventory, of you year-over-year and that in down we're year-over-year carriers last inventory process still they're had decline. really building the drawing still still sort of

going are up, sales But the I would sequentially, we expect order is think were continue. trend to and rates good news that up

now order seeing we're deployment rates. see we that rates to our approach What starting are their is what carrier as

also And encouraging. that's so

spring So begin when sort year-over-year front James. to us we of still have in that of growth upward you of rates think your

Can way Okay. follow-up, ask of enterprise last of as those business X piece I kind optical the how just as you think. Got of margin-wise? pieces just how becomes bigger then question, the But And the it. compare the a -- frame portfolio. another to a

Enterprise.

carrier. Versus

carrier, primarily to tends be because uses systems. customized Enterprise connectivity higher and margin Yes. those it of more

move sophistication as up installation optical cost, of that that helps portion reduce that as that we to that with And up is, their we of the systems we them do those passive we end those. the total stack, offer customers a degree value so sharing you our in create

We'll adoption revenue. share higher of a than degree revenue of they carrier enterprise in do total as in a have as share the a of

question come Meta next will Marshall Morgan from from Stanley. Our

are deployments? latest towards of I appreciate the a to any update you with better or you be carriers terms getting guys or commentary kind But Carrier in through expect position orders on of orders that aligned inventory more with be getting aligning deployments. when inventory are to that just their

Or of that of increases dynamic more in And there that going forward? of going kind any something just, Is maybe just a with by And those currency you're through about you pricing? as you terms price forward, those USD-based as that moving hope display or side do of then question, more completed we negotiations, to to negotiations? second the going kind that to expect be think on is expect just the have QX.

negotiations, we So as you. will those we complete pricing currency-based update

on us see on an September, this be you in update our our reasons the progress scheduling dialogues you customers of to those investor in with would session One point.

us that at you update an think provide should to be I expecting So you date.

moving part value base, our the as to the appropriately As relative. exact the for find whole engaged relative we're U.S. dialogue. dollar to of to with way customers right moves this That currency as we seek share question of

closer the our to our customers lag debate would rate, one would we like Of current closer XX-year is course, and the past average. rate exchange an to spot

together all through in working what look with having And for of September. And we detailed this the negotiations you forward that. discussion we midst when get we're to is created way a in God more our and

being I Yes. deployment We're yet situations at their at are quite -- not customer think rates. inventory customer by Meta, on their people the carrier, there it's on completely buying different.

into that make quarter. keep be we'll updated, through I go We'll think we it. of that I but don't the as on you know third progress will necessarily all

where questions In are We depends since as carriers for wait deployment strategies. total, more them both update on carrier rate. versus think, about should as Ed together, on about points it I to fully But so it. think out, we talk particular you we'll it's

profitability for quickly. we're do delivering the we simple display, close going to to of up And end really is, and to this just that that make aim to continue relatively investors, for is And to display. used be that our expect you're to close what is just out

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will from question come next from Tim Long Barclays. Our

I get hoping a X-parter was on optical. I could

part, AI this talking Gen First you're business for about. current

hyperscalers -- that of would some curious, you're now types in of different hyperscaler is deployment? AOC, single some Or the certain [indiscernible] so portfolio, better a Just architectures? lot there's it EOC, have this fit selling architectures across they're What any into optical. think I using

on more like entrancing develop? see when expect uptick type component could traditional And then do we the other deployments? traditional what optical type to And to you fiber or market? number just enterprise When that enterprise of would in expect more to that two, touch you if content get you

in questions you the the switches. between first To your connections revenue the basically us take reporting fiber that today part, To see is optic order. the

top the work to people talk connect but then exactly every about this, that way every the rack switches to of sort enable of Doesn't layers, connect us like GPU. switch GPU to other Okay. other which

And then There is up above meter on reflecting you the been server becoming then the bit will those rate within up whether you as end optical. once second, copper. sort to Historically, racks per gigabit what well. connections end as XXX going they are of will work happen have rises distance optical

climbs, way. That because now to fickle technology its is density distance use the work of starting as the is and that to same of tech. So complexity tends the become dynamic dominant

a with as server what different and how within work. around To the will inference architectures more that market players driven And gravity, on be rack. to long-term data speaking science bunch there's position arguments happens right? influence, largely happens right, opinions the the different that is beginning architecture of about of It tends by part what We're to is particular tends fully. slower is what you're on your material that work, X at question get

predominant a view I to will So us have too say early of which on architectures the become it's ones. would for point

Tim. inference, For

we'll developed understanding converged evolves, that Tim? questions, our and address view be you. that your a As how of to share happy more with evolves we Does

Yes. great. That's

Great.

we can one take think question. I more

question Notter Jefferies last come LLC. from our George from And will

cables. I starters, back AI about this optical competitive wanted much customization know of many customized work for making how I'm is just and smaller go question of I just doing of to diameter curious in higher-density business. are are guess I how folks your there's to Curious other on for racks. fiber the work guess a customers there about solution the doing Gen you're I from differentiation then Corning. connectors, bunch know suppliers I also,

Corning versus of just I'm precisely unique to some what's guess other down hoping guys. drill into those I to

Great.

other cables we is we compete do that of it Connect, level. incorporate provide also then proprietary levels our at as connectors our that to provide So fiber competitive and advantages component know, in course, the to fiber we And do we, will George, design participate take our those our other you stream. value and the to take new-to-the-world what U.S. that of cables. We'll to level and players at we all will

together total time, at level. unique we'll same the then at put But ways them system in the

for provide their in players So our waves. to that best novel we other because together deliberately own is different to overall for them componentry are put customers

diameter fiber, resistance smaller, drops, decreases. optical size gets The Now unique people what most so performance the right, shrink when bend our the the of the actually spot just is fiber makes right?

way, The inventions so redesigned in try of while actual we having we attenuation in that reducing increase deliver to can get fiber, diameter managed we the the of optical fiber cool all improving a end to little level, increase do bit and any less. and profile the competitors at fiber up proprietary this is significant up all that a we the when the the because performance What meet without the our to performance. our to versus way something ended they make cost fiber their cost of standard makes

then the fiber. multiplying with we advantage start that our of core just expertise our at of is of So it And level. sort each

what As going far more customized our as componentry forward versus the revenue share of at will be level.

driven of Our time. the majority by on value there those that customized installation revenues desire we our to reduced be be and of of would solutions add the delivery have

At what us To to the price, customers. that. component our And the to will do provide the of at some building in would happy same is we're to of delighting we course. competitors, our business time, the if of like appropriate they blocks do be

Thank you, us for George, thanks, joining today. everybody, and

September quarter. XX Management on X in Citi's third Global the going to Access close, and we Conference we're and JPMorgan to the wanted that XXXX on attend conferences August know I Before X. Hardware Semi let Forum TMT you

our a facilities We to to host plan September. in also visit

be select starting today's this be replay later to a Finally, investor will in There morning. offices on website scheduling of visits we'll management our pay. call

us. So our Operator, for once again, thanks concludes call. Please that joining disconnect lines. all

today's for your concludes you This you. Thank participation. call. conference Thank

have a Everyone, day. disconnect. now may You wonderful