Coherent (COHR) 9 Feb 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing-by and welcome to the II-VI Incorporated Fiscal ‘21 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Mary Jane Raymond, Chief Financial Officer. Thank you. ahead. go Please

second and I [Raquel] II-VI XXXX. the This Mary for is Dr. Welcome With call year the Thank today of X, me our the good Tuesday, Chief Raymond. the today call am our at Compound segment. of This Financial Jane fiscal Chuck on being to XXXX. Chief you, earnings morning. quarter Officer Incorporated. Dr. recorded and February President Officer; call and our Barbarossa, the are is on Giovanni Chief Mattera, Executive Strategy Officer; Semiconductor here

our Our press release available investor and website, tab updated Relation’s the of ii-vi.com. the on Investor are presentation

only. be to any A XX-K obligation XX, reminder, by to in a our risk to as We during are update the as these undertake They this change August. XXXX, Just statements do can factors not teleconference required in today in events contain subsequent are that except possibly forward-looking make risk ended statements list June of materially. the subject we today, year found may to our given today of law. filed any reflect factors for Form context

found for Mattera. each such also me Chuck the non-GAAP will some presentation. that, GAAP end investor press Dr. With release the the call to Chuck? document let as turn the measures present to reconciliations are that We includes measures, over at of which those or the

deliver halfway year. I we our morning, XXXX, Good a pleased fiscal Jane. Mary thank to that for on us you, and through track strong are am Thank you joining to report everyone, today. year

X.XX top QX highlights the a of million QX quarter, on to year Among of was X.XX and were of $XXX grew a leading for many the end our basis. of guidance over ratio for $XXX quarter ratio the XX Our book-to-bill fiscal rolling XXXX. book-to-bill XX% month this million. It revenue exceeded

exceptionally an delivered of shipments the Xd revenues. ramp a strong consumer sensing for VSCELs to We end XX% against execute of our on of to market demand, continue and bringing high record

delivered in industrial. and we Sciences addition, experienced excellent Life In growth continued recovering

continued so equipment defense, And silicon market in strength aerospace semiconductor carbide. the capital and and in communications,

we Our strong QX that. quarter and guidance a on Xd delivered sensing very contemplated

last growth consumer was for XXX% year-over-year largely of will in shipped by X% volumes again facing, both and driven we production. applications market as over lines, to prior sensing. Industrial momentum. sequentially world end Giovanni than grew significant arrays And more facing products applications COVID-XX the compared across our gained Datacom recovery quarter see Our emerging XX% the in almost automotive Life this demand over and increased for year by grew describe Xd driven QX It components for a XX% our sequentially we VSCEL brisk front are ecosystem. XX% including Sciences testing of Telecom. as year, vital Communications to later. to product the continue as grew and production

operational now excellence. our on focus Turning to

$XXX We plan set our target are of well Finisar million for acquisition three-year total September achieve of ahead to our the XXXX. in synergy

XX exceed already the of result as $XXX synergies rate integration million over work months. run Our past a our

our We achieve we are in target synergy three-year ahead months of total are to now months or to XX schedule. on our target $XXX now track million million. $XXX XX synergy And increasing total

and margins to acquisitions. scale plan and integrate our and our synergy delivery execute faster is to reflects our flow strong of ability cash contributing Our our strengthening large

optoelectronic strategically on ago of core from devices. amounting and and million QX on in record from XX in materials our trends generation we and focused of cash irreversible inception $XXX the Company's identifying cash the $XXX operations cash flow for million time capitalizing free to all Our strength flow. an years was have company mega From

execution exciting and businesses all of years of inorganic among We application our the of organic year have our senior reasons of second been product team our come. macro leveraging and the our Segment, Giovanni? and the it Dr. to over employees to and growing us successful these I our XXXX. an during to forward opportunities our Strategy unprecedented that Barbarossa Chief With President look much fiscal the been half and values, leadership XXXX Giovanni in Semiconductor trends, Compound first ahead technology the while of environment for we've and year of highlighting in II-VI the turn by review fiscal individual to this and make progress are strategy our many in leadership. Officer half to able will We

sensing. We long-term are market Chuck. Autonomous track at major assessing technology investors’ M&A scale for strategy of mega our platforms you, appreciate successful opportunities, trends. Intelligence among enthusiasm aimed record addressing our by Reality, developing our Artificial enabled Xd Driving Thank large which market mega and are Augmented trends and executing and those

than I'm that to due Both Sherman sequentially. efficiently are solid We this more sensing Xd quarter. sensing contributed than very rate. and report Xd in faster operating and growth XXX% significantly to market our quarter the pleased this revenue Warren very the to grew So fabs is equally the believe execution

and arrays We're facing for As consumer cabin personal and as well came production computing additional sensing Chuck facing for Android from in wins, Xd with front platforms. electronics ecosystem base customer as multiple expanding our also sensing. said, shipments in including and volumes growth good end the world VCSEL automotive including other applications of for making of customers, progress

might of for results, would it investors, the this multiyear Xd who Given I phenomenal story. worthwhile to our to be review believe our trajectory be new benefit in sensing

XXXX Warren, industry's in operations New gallium the in in things zero bits came platform, We in the after some sensing VCSEL market. our arsenide best manufacturing volumes with our the Day of Our six-inch most to vertical sensing large technology Champaign, of began that work strategically acquisition story the in prove Jersey, three six-inch which the Xd the Xd from despite in strategy. XXXX with acquired optoelectronics and sustainable said the Illinois arsenide the where entering market. competitive long-term electronics be among platform to consumer we the for acquisition foundation of integrated to the sensing platform having started of Xd a our gallium Xd required XXXX many mentioning would and for publicly emerging explain expand sensing to market footprint fab Investor We

gallium When rooted on we acquired compound was the conviction we closing. fab us Our plan arsenide of in in deep some business our experience Finisar which asked semiconductors.

[indiscernible] was together qualified to offering scale. Warren, at and breakthrough we Our Sherman get to leader gain because by market the The and capacity grant. share works answer Sherman and solutions in Zurich, none Champaign, the needed become share teams

achieving quarter leading we our are share market. than the the global believe the market. of share accelerated During we we underway gains to And well going the faster

Unlike both designs. components our the from integrated are automotive and opportunities the many we have portfolio materials as made our in have passive we shipping products LiDAR, industry. vertical or engaged portfolio next that pure for As in VCSEL are play arrays laser market, also the an market competitors, in-cabin of We're for critical engineering active applications. we LiDAR broadest generation sensing these entire for

multi-junction [indiscernible] laser emitters, laser laser offerings include On emitters, the our VCSELs, drivers. and side active balls, access sources, pulsed thermal of fiber based edge

we the new products market electronics our plan band in In that their one a portfolio customers we in filters, as be develop few. Japanese to gratings positive We by for in and continuing variety multiyear much carbide infancy, the the side, still for and be products LiDAR larger X silicon to while electronics. the name of large strong And a in said, we was market portfolio of slowdown including poised more sign well communications COVID-XX substrate by wide it after of Meanwhile, the share due and market, value wide On our we chain on lenses, in very but characteristic take a automotive components, is the differentiated quite power on a will strong silicon would optical substance resume believe transport mirrors, that are provide key to to design our the [indiscernible] the immediate impacted that Tier LiDAR across was Company. We infrastructure. our that believe is polygon develops. to it's opportunity partner power customer the excited businesses for winners. carbide supply a of [galba] engagements, windows as are is chain. growth of passive for a a eventually the caused Automotive That slowdown attraction selected market required silicon its this of a stage, to scanners, to of execute being considered are We shake product time see the more Recently, is Japanese telecom our COVID-XX. out early carbide system technologies XXXX. the electrification by installations

ramping rate are existing and bandwidth coherent networks. to Our transceivers up both high data adding new

We than more share we are And our share doubled to we report expect market to rate fruit been revenue to continue many pleased with compared are year in have quarterly to this these a gaining of ago. products that grow. run our

And I'm won in the XXXG progress China. ramping a consumption. its The the is from innovation to management and and disruptive to two on power or of Datacom significant first POLS driven our amplification the wavelength same leverages announce of XXXG components by reducing U.S. data products line center miniaturizing also coherent at POLS optical by time making while We're towards product center our for Optical interconnects, that on best European award part and market. the growing at both pluggable enable pleased increasing modules Conference optical breakthroughs improving As and demand start in kind share system for hyperscales our data performance in product Communications. up the steady the

more XXXG fact, sequentially. than our products and In XXXG doubled

provided first see feedback. are We back who have with capital customer business web demand a to to XXXG strong scale for in we excited that industrial, we our to signs aftermarket to by has already of equipment increase continue levels. our transceivers sampled also In exciting just driven pre-pandemic large recovery announce

semiconductor December. benefit aftermarket of the tailwind. In fact, recent investments to a led significant revenue from we that In believe differentiated us multiyear TSMC ceramics composites record market, by had announcement and Samsung equipment to optics, capital and our in

PCR to thermoelectric that in contribute Life the such testing. COVID-XX driven XX% Finally, way against by filter the been pandemic. and And our the are our products enable to we have to able business demand a proud fight increased Sciences for year-over-year

platforms With strong across making device and top progress our and growth we're line the expansion. material driving margin

We bullish me that, Mary it With our on Jane? Mary let model. Jane. over turn are diversified business very to

Thank good Giovanni morning. and you,

operating especially non-GAAP operating and gross basis Our XX%. reported margin of level, due last basis And XX.X% Xd strong points margins XXX Similar is non-GAAP strength utilization. in pre-acquisition margin fab for margin increased were by last the quarter, margins and the over margin utilization. of sensing XXX non-GAAP photonics compound was was driven operating to gross reported is XX% a gross of operating transceiver These the II-VI the shipments margins XX.X%. semis and driven the improvement our mix, At non-GAAP and margin were margins increased the were segment XX.X% pre-acquisition ahead II-VI semiconductors. non-GAAP compound The XX.X%. margin synergies, in last for points to fab

will compound are points stock-comp when $X.X backlog expenses, $XX costs. million, the and EPS of orders GAAP just SG&A transaction $X.XX XXX The $X.XX with $XX months. and was was -- $XXX the the was of share GAAP of and million record was basis million operating shares. with excluding XX Quarterly $XX R&D is XXX and of amortization, non-GAAP which adjustments million the $XXX combined below of it in and $XXX next OpEx plus Non-GAAP with revenue after-tax was EPS XX% million photonics count OpEx in that non in OpEx of XX%, contains prior over million. $X.XX consists excluded. integration of The billion costs Finisar a backlog the for basis over semiconductors. points acquisition total. just and results -- million stock-comp non-GAAP were and And revenue. million for nearly XXX Non-GAAP to billion percentage amortization close was Our II-VI and GAAP $XXX in shift M&A

was our This the instruments. non-GAAP tables last is Using for was our were million. quarter, addition II-VI $XX cash X.X allowed times expect the we leaders paid are the reduce GAAP ‘XX in non-U.S. count $XXX use was OpEx. the the cogs We $X of leverage $XX $XXX XXXX QX, $XX million. the acting stock-comp ratio expenditures our $XX price, December to for to at million to the of global and This increase down also million and Stock-comp of million XX, thinking million interest cash stock the December price free owners approximately million. in share was flow $XX expense our million release. payment debt, calculations of quarter QX and in times debt year flow million be million of X.X in price. $XX.X like the $XX to paid to these us relevant over XX and required EPS The XX. $XXX $XX and September this estimate instruments For quarter was Cash million stock of to $XX for million the payment million The to for two leaders $XX the fiscal $XX and each is million. II-VI. are stock operations essential million earnings compared or due million non-GAAP QX from our incent team Capital valuation We $XX to and equity based at of for of to in our QX. who in net

for quarter million we the FX expect expense Depreciation primarily year, CapEx increase XX%. expect devices. about $XX depreciation was rate quarter an quarter. to franc to tax a capacity to million forward in be quarter and $XX million and million the in RMB. our million million The in by between support be the the and the $XXX semiconductor $XXX was was the materials For in we $XX Swiss to effective The and driven $X.X loss compound

R&D for is range to status be renewals to XX%. non-GAAP tech due The tax moderated prior for rate between XX% tax used and to the from the tax of XX% The the expect We high and deductions. XX% our super to of items rate year. rate XX% be

the In INNOViON acquisition and stock in Both The now world. And the increased XXXX. October Ascatron XX. our addition in X, exercises in INNOViON around to the on closed option the both acquisition and mix on are results. changes consolidated Ascatron of income acquisitions August closed

combined, had breakeven XX/XX OpEx two the additional in non-GAAP the $X EPS million we $X and in million revenue, For quarter.

gain non-GAAP on value resulting equity results million Our exclude a acquisition the fair from previous investment. INNOViON of measurement $X the the

XX, estimated $X.XX. a between earnings per This Turning today's million compared XXXX to the to expected outlook, to ending to million be $X.XX revenue rate September to is quarter for XX% of is at shares. $XXX the March basis and which and exchange $XXX at XXX on XX, includes non-GAAP third tax dollar an share rate a weaker million

change. subject tax actual million all XXX million share rate, estimated For amounts the of $XX XXX we shares for GAAP add dollar non-GAAP. in $X GAAP to the amortization, is million to and back count earnings, rates count are costs. and transaction million $XX in in the non-GAAP per of earnings share, integration share items, the non-GAAP and for and The million shares pre-tax The QX exchange amount the stock-comp

to the Q&A. we Before go

at for everyone get call. to in at also back call [Raquel], minutes the as try we our for end to open may which expect question changes factors to Mattera actual you we contain variety limited from today And product our I'd and economic reminder, limit in competition, its that may A.M. turn changes it like mix, the We to to of firm differ during answers a questions. to may with like questions XX also each orders, results and end. due a line do one customer ups as in to regulations but including follow three forecasts would general Just ask conditions. no would this the Chuck not

the we Please stand-by while Instructions] Q&A [Operator roster. compile

Benchmark question line Miller first from Mark the Our with of comes The Company.

Congratulations in on Xd quarter another area. the gains record sensing and significant the

could have a I expense it's quarter Just quarters? what feeling be kind two the -- one question around next it'll of last us other because jumped give for

and expense? income In the other

Correct.

quarter the really little change probably should think earnings investments. the of equity be with the equity driver gain. I FX But lot major INNOViON to speaking, our that this the Generally was it a from bit cost only a

Okay.

million, $X so million? And $X

I'd say to similar it's probably QX.

thank you. Okay,

Sure.

Dorsheimer next of a comes Jed Your Genuity. Canaccord from with question line

the but I what I look if guess we're Hi, seems thanks on at is, XXs, -- what renaissance around look it the you're and we're quarter. seeing on strategy benefiting that’s if side, from early -- congratulations at semis, the compound is one silicon a really I question semiconductor that kind the and takes us in the to My compounds. industry on of late takes the or back the me today back XXs

from through How is kind how silicon manufactured think indium of carbide, terms So which the cycles? help you on of cost markets phosphide of -- of are in I'm do just curves platforms. through end wondering, kind the investors you Thanks. various can those sapphire, think all you

morning. every invested know. for really good invested incumbent an to challenges and been is thanks that or exciting time asymptote compound performance. time been the semiconductors. devices many an you a your applications, as have Jed, enable have that they technology they've for Hi, cause overcome around decades, either materials -- the for This And and a have general, is in, In been Chuck, question. or new constraint It

And has And by able by of ultimately pull generally the drive technology. system system the it to of When itself the in at happened be the value are gallium arsenide. component proposition enabling the be ecosystem a taken days there's there's to level. they material So a the then enabled. the and this to clear early

electronics even today. benefit if phosphide into will example, of of enabled be And market. market. rely as and of come handset devices HBTs] that the advent and see that was place that side the the led the for it that silicon in volume compound put will carbide designs We XG radar such see the and and infrastructure the [Tencent with over that spilled ultimately around coming even we For the world gallium communications networks based innovative by indium semiconductor from to

that's Giovanni to that? can like would I anything all into get think you I to add probably

Chuck. perfect that's Oh,

Okay, hope Jed, I that.

Thanks. It does. guys. Thanks,

Your next question a comes Silverstein from Cowen. Paul with line of

looking Can I to in outlook, terms Thanks us ramping breadth additional it's and demand demand drive [it numbers, continue Giovanni, guys. to one expect ability margin obviously, like] forward. at related sensing, give harder we looks of Obviously, volume your the just benefit type get nicely. insight should you especially of Apple, what I in any Xd further you're go And the as other going of and large what to in guess growth? Chuck it's beyond you this the of uplift question, ongoing Xd sensing? with assume

thanks Definitely, increasing. with user set are Paul, and broad of Okay, customers of cases number the for a question. the the interactions

We the said platforms, we have in as volumes script we -- growing. are design some in Android have wins

are not very Autonomous that that Artificial those We necessary very, application growing are function as Intelligence to and Driving as mega as opportunities and should. discussed, as especially bullish we about enable fast they But a it's all surprised we trends such very, long-term are forth. the they for so

So we will the are confident very demand that continue.

margin let Mary volumes add having Jane part be maybe as of going like to that I to platform have. vertical -- let then yes, the side, on but the question. would definitely sustainable So we said advantage comment help that integrated And Jane, I'll is Mary some? on a we

right in to quarter. that continuing the mind for quarters the is as may increase year is sensing. seen said the not volume past an sensing quarter. strongest are is volume But now, Do it margins. And every XX/XX the That positive volume this across get past definitely deployments. in but as quarter, what gain and not the helps other Xd I'd the think steady the say keep that is we we have Xd same change for quarter in I Giovanni typically, for

Okay. Thank you.

of Your Needham next & a Company. Jim question line with from comes Ricchiuti

comment, to Mary morning. Jane. Hi, good on up just that Maybe follow

we in to the about verticals? respect takes terms Just terms thinking puts seasonality, March the with what larger in should be quarter? of terms In the and of of

quarter, we QX our quarter be the say exactly basically has Xd as just of don't sensing be a smallest strong first strongest generally we I saw. little that hard. first X/XX to I still will this our I'd just we quarter forget now all, can't the then to it on for on not X/XX for probably a But the high was had year, Chinese historically would as on XX/XX. say And some expect as half it bit down -- Year, through speaking, also was and been We bit quarter do already X/XX sensing, XX/XX quarter. QX Q that. for Yes, And good Xd We the New little such of we do may the because par which think quarter, a in quarter New us be XX/XX see forget, quarter. I Chinese right Year think for expect

And about it's in we thinking seasonality Xd sensing be industrial the and the should how optical wondering I'm that? March. communication

it Well, generally, the don't quarter in New the X/XX. industrial for quarter first quarter. I'm can is can see sometimes Year. XX/XX you between -- Chinese not the Communications speaking, and to we tends be it a But it X/XX sure tossup weakest we be generally the exactly. to give But

think probably exact subject you less should any that then are And in. in the I given to So calculate markets I quarter other think three. seasonality specific

Yes.

add ship megawatts Yes, the first I'll the I market year, that of want Mary anticipate second offset Jim, double example. in -- seasonality the we year. reality. sorry fiscal some more give time second the to in than Jane. an in by to the ship are So, the half We

the So megawatts double course, our year in of lasers. we particularly applications, half fiber second of for will the industrial

half the which in seasonality. that increase benefiting It necessarily back China which not So linked from second growth. we with any -- fiber coming to are a specific that's just lasers, strong to is substantial really very

you color. Thank that it. Got for

take debt of non-Op we income clarify us X one just it's Generally costs. We somewhere million and probably can me Let first the million write-off asking expense. the and forgotten I gave about question between had answer speaking, X quarter was now. the positive. Mark, next I he

of comes Your next of Vivek line with America Bank question Arya the from Securities.

give we increasing Thanks hoping percentage a spoke I should us and sales? next for quick are of of competitors their franchise. carbide much competitive XXX that How account about could does your was as carbide one wondering recently, milestones a Thank taking your investments on the millimeter What you silicon be And And update my to? you. for the silicon forward I capability. going was impacts landscape forward? looking how question.

So silicon carbides between X% and X% of the revenue Chuck. and I'll give the second part to

thanks Okay, Thanks for question. Vivek. your

opportunity we've hole a And As one playing indicated just there's long-term would time. we're you course, a us. a for growth it like golf play at

think We the to scalable investors, a that platform, demonstrated ago. which clearly, millimeter have mind we technology have five that a supporting we've about years end silicon XXX be was pretty to of in described substrate capable carbide we

to integrated on gallium ion to So to investing carbide way talent. silicon in focused Mary in same clear carbide equipment that pieces the years think some we There's have our and silicon way It's investment. roadmap take referred to platform of modules. adding place the devices a scaling we all the capability ago. gave development substrate. platform and the is we're growth, think crystal that six-inch earlier, for back of for I vertically five envision but time And put technology wafer arsenide electronic implantation a is amount growth capital for more A how investment Jane view provide ultimately multiyear tools considerable than epitaxial, our a retrospective us into of about it Giovanni thought we for the that about best which investors going to

team. We have the

we the get And to that's have now have place aim a infrastructure range our and line be. And to near-term inside to long scale all of that in we the sight technology. get We ultimately and plan.

probably to that's say the way best it Vivek. think I

you, Chuck. Thank Okay.

Sure.

from Your Richard with the comes line next Craig-Hallum. of Shannon question

can Well, doubling my Datacom some transceivers do going there. of focused space I what's probably broadly us thanks two developing? understand help And speaking gig for and XXX about questions. XG, on calendar your a then XXX and forward guys taking web you this across comments kind heard on for look year question see part sequentially, how gig scale both here. A the

Richard, pretty question. Okay, obviously, getting this Thanks too. on? What's fast Giovanni. We're share for going your

team these has XG? sorry, done with new I'm And very think second question on job of incredible what was platforms. I the exciting. the an part the it's

of the of market Dynamics peers year, we as some and slower about to starts especially XG the forward year? scale web have in to accelerate year your in XG through the half but Datacom latter talk going the a accelerating start the the

Yes, is I slowed mega they've actually still trend COVID, that is is for deployments because of reality worldwide lot that different of than us. been well, the important down. actually before mean mean, any doesn't trends that the a

being ads dominant I new think channel a end seen for we've need the the customers than rather deployments.

line forth. systems we've seen systems client and and so So being being that that's I added more, a dynamic example, added think more there for

demand. the of the terms Telecom point remind the we've that then to on Datacom those the in -- growth important So little emphasize XXXG. I and are bit stronger dynamics in the than the this made I want seen

we've was we that the growth sidelines probably back were going so it's year, over for with And to waiting successful it in shipments on we exciting all team far, portfolio. for happen. integration -- to our a of really a all, it XXXG the think customers add to First are to really made, lot Finisar a nice I which the

been key. more companies feel a pretty has good this two the that doing very integrating they the are that’s confident numbers job so Now we demonstrate as

you. Thank great. Okay,

Thank you.

the Your comes question from Loop Baruah of next Capital. Ananda with line

mention just was improving? morning bigger just on, put you wondering morning of a press because guys. context Chuck, good some Congrats I I is Hi, so the on improving. picture made the And question. solid taking difficulty] the in release this all [technical markets you guess,

ones was making the And key wondering, year And you like put as year? of there? which I you Thanks. would us just the significant move context to as think around this through market opportunities so you could most some the impact

markets, sensing, end dynamics pretty we think Com, script, Life the well Xd the the Sciences, think I -- whether of I cetera. Communications, Well, and Industrial, et Semi summarized in everyone

make I Xd to on up have markets think of great year, a an the the those is beautifully. opportunity really Silicon all is coming the obviously ramping sensing carbide largest impact is communications curve.

I think really -- and to about the or are in contribution make revenue. ones the So to year are gain ones really think that you to ones traction think, either the really want largest great the can a the I all starting they

market, be And through growth can be so that Mary release Chuck's around clarification improving, stronger press --? go quick just some should as just the we -- in context on the How markets that. can about the the we that key Jane year? about comments anticipate

think we already answered that I question.

think I the showing and -- very the answered unfortunately move in to I on. think growth it’s in that all script probably question. the need already we nice across markets We're we year

Marchetti Stifel. Your comes John the next from line question of with

are this is chop months the synergies Thanks you that million XX relation cost most specifically with margin very additional improve still and that away those million you're the on in an to on much. of gross of just expect Mary Jane, to you expecting we XX are guys should OpEx line additional there opportunities so additional through XX or synergies here next identified over line scale or target? coming curious now, seem the the

cost the both I in the think on it's and sales of OpEx.

physically function Thanks. of those you able out? to again is programs can identify that actually you Are scale? that some a costs where And take of larger

we John And have sales lot benefits. but will to it. and we both the targets we And add scale achieve of exact on has Well, need let overall for expenses. for our that of will cost move me a

Chuck. Thanks,

of next with Harsh question line the Your Kumar Sandler. comes Piper from

is on open? line your Your is you Are mute? Kumar open. line Harsh

guys congratulations Hey you how put wanted that And should Is think paradigm? to then Yes color? of margin guys, on your Chuck, going growth? of we for Just things up? or I a business you've that about you that. expectations. ask should you think strong that that it gross job be of manage But it revenue how we you, do XX% about that's is as that about sorry thinking forward? great manage of done relative Is going when Thanks. for OpEx percentage new the forward? a Yes, results. me. Do as a cadence any containing the to percentage we you

for to XX% stock-comp as in the -- we XX. presentations, It's in The of put and is margin XX is range margin revenue. XX% well. gross investor And Right. the between the year excluding OpEx them

you. Thank

Your comes line the next JP from with Samik Chatterjee of question Morgan.

Thank you, question. the taking thanks for

the or wondering, certain you a platforms have -- market think down to I primarily the to you. a see since job I'm it of Chuck. be flexibility. scale, want And greater gives where markets for done Thank get today? for leverage from end that. a getting can get to on better compared you've Chuck, either you need that Finisar you got do just lot your a thoughts you the benefits further consolidate acquisition. you Just new have what great

Okay, thanks for your and your question Samik. comments for

will in a see executing profound take have the to is to well it doing And years It's that on And five in the and really a all change our and world. for don't no that. for And that. the determination around be innovation impact have to to long-term change our long-term shareholder articulated. value not We're investing, innovation. the it full going build it. I have being the know enabled our on that We so, to to stakeholders a with of benefit strategy. last we long-term to sure, gotten marketplace to aspiration or result. investors been discipline decades this any or a we we're trends by of have identify have advantage And able change the

We lots of [QX]. do lots do of do executing to we're have a combination going of and imagining of and to to to lots investing do,

you. Thank

the question Bank. line Ho from of Sidney next comes Deutsche with Your

my and solid business. Thanks for congrats in very on taking the results question Xd sensing

question my So the com is on actually side.

think are installation. slowdown, particular you few I curious Thanks. areas system And there and that if of into by look impacted weaknesses recovery you of the business quarters. backlog, Chuck last you start next strengths the that quarter, I'm part it over was the your mentioned new see you or if orders yet. seeing

your Sidney, will Mary comment first part part question? of first can what your backlog. of was you repeat But on question? the the Jane the

then about And have I'm just Yes, with you by orders part particular areas or see that, strength new backlog orders in the the from quarter do installation. curious, system of was of of you slowdown impacted that up recovery related anything coming you were business? last of to what is already you. the seen talking second that weaknesses Thank backlog?

understated. I effects simply a COVID-XX cannot where profound having of underway, impact. be an the recovery and think is effects, there's COVID-XX still has there's around still spots world The the had

the I the talk of So been that's and might say an chain circuit happening. overlay be supply how about And a would has COVID-XX. supply chain that integrated to lot

And topic team thus chain impact that And working global to but vendors say a our proud mitigating job. our with another fantastic have that's so I'm far. in really the supply done management

we next So months. looking what chain that. watch three I going say to would I'm six out in to to is the the have be supply for

Okay.

strength backlog by know I we down don't further area that I particular segment. that or don't there's the then think of a break not.

Thank you, Sidney.

Thank you.

D.A. Your Tom with line from next comes of Davidson. a question Diffely

going for for how the is type in the to sensing good it versus for view for [uptick] to LiDAR handsets? of thanks or [tangible] you and as long-term require question. Hey, Xd morning capacity in your is LiDAR the opportunity Maybe Giovanni, And different some Xd current your well? technology sensing the do

the we have No, Tom. question thanks for --

different which infancy media solutions in So I for clear, all we in have the is the broadest lasers, sure optics all actives probably absolutely, wavelengths, of advanced noise in this mentioned We so support. of and of forth, a and it's and that despite LiDAR different still opportunity includes the factors different the us, and for one broad so great its and to is a type for want script portfolios of market have the I very make sub and comp forth. passives, assemblies for as lasers, both we optical kinds secretaries

the the food of positioned best in pretty at automotive there -- there the we solution approach of customers I where have, the with level largest of different already we the will Because Question take be put of the to is well beliefs different the target that script, the terms the all engagements highest best customers. predict So the, needed. best volume, I it's said are is performance the sometimes is interaction to have the number the with in and that with reliability which it's really out hard to for bets. the think of what's give terms we as advantage price eventually to chain. technology, much And in

a to in it while market we it's us out happen. the as now flush out. time So winners, this that will are I said for of we all much to And But take of that to to terms that architecture, going is have the the asking pretty right and deliver. adoption take or that play to

but we So positioned think that. I are well for

that's helpful. you. Thank Okay,

You are welcome.

comes the Barclays. question of next from Tom Your with line O'Malley

for what's business the about just the Can Hey taking nice you in guys, mentioned, on the color Any bottom you're progressing results. congrats Giovanni, the little and second that how for question is coming helpful. there? year really going M&A going the China volume market the half thanks of fiber September really is you high-end the or your Is off better? a trough will some on bit space. you you saw lasers. quarter question talk And in of the in markets My and back see be that double the my to on for industrial on going in megawatts

thanks the Thanks, mean, I question. Tom. for

perspective, growth. back laser it's that design of and the, large China and is their are in very from I our markets, benefiting really many coming a mentioned, So know we is that's just as there fast a and makers from majority fiber wins you as our China

they incumbents from taking assume, also are for I worldwide -- we So growing some some the of share I incumbents. with are of believe them. And

making progress. great really they're So

I believe processing durable the think for laser largest is goods. it's growth, for I the really

multimode So maybe I is six-inch. our color. as or mean, can XXX demand a a exciting. such the that's China we that's It back the total. to pumps Anyway, [software] moved particularly know I also reason coming you really why from the so support think micro because we such great is or processing smaller some of marking have we portion very

So I But their capability we have capability. to think the for say volume, one a has address such we -- I'm the And that sure. such -- a in the world only for can't markets. are scale I

advantage of that. taking we're So

Thanks, Giovanni.

Susquehanna. Rolland next question Christopher comes Your from the of with line

one paid policy the for question. question that. and appreciate chime quarter. Congrats the I call. on the And to Thanks for the wanted on in I

It Where assume but Did a see CapEx some enough But about was the solve that. held stand $XX new supply? of Thanks. would quarter that at some us, I the bit Xd was DC here. result, on issue, here. that's the little TC sensing perhaps to congrats implies they is really constraints? backlog to Is million of temporarily a issues? sensing these increasing least, we it like and photonics supply and maybe on talk do So capacity supply some Xd the take new light and sort of separate? And maybe are capacity supply nice for a up

or the of view it a let chain. in that close had managed quarter questions fact It question. like me there -- people sounds despite Thanks our your supply supply four But one. three pretty impact. sounded it the about zero In to be, for could the it we chain to were what talk be

So And capacity the with continue keep demand, in we Xd But some in adding goes, the our can in we'll increasingly internal snapback utilizing we the so the the far as chain. projections in the that supply we're the and capacity of the we to we're other do And we're have pace demand automotive those growth. intercompany or sensing And have. watching as supply manage chain capacity it for associated integrated understand the with production the because from the challenges circuit especially markets. constraints.

from there's no all impact to the chain at supply So that.

Okay.

Thank thanks, Chuck.

you bet. Yes,

comes with next Marshall of line Your Meta the Morgan from Stanley. question

share the of just sensing a forward look thanks. the you platforms as or months just revenue on? sensing gains the Xd filters XX just primarily having next primarily a that of products. Great, and expect then you you passive other piece of, year, mentioned kind on you I And wanted would be driven also guys portfolio to new the And portfolio, to growth coming is get sense as next report with the Xd to Thanks. VCSEL? of in kind today, by still

Hi, This Giovanni. for thanks Meta is the question.

Go ahead Giovanni.

want Jane the Yes, do sorry. -- I'm Yes, take you to Mary it?

the the majority as But the seeing do a dependent little described Giovanni also there those over This on see opportunities will also he But market platforms the emerging. said, next materialize. may that I think already other forward as demand. looking volume, of bit to year, be we we're it's

just this bit think have a little of you minutes. few a I'm call. a I turn for Chuck I have of time. point, following it And back you as out all to to of run want we this call at sorry we scheduled with all know,

Let me over back turn it Chuck. to

Okay. Mary Jane. you, Thank

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