Coherent (COHR) 9 Nov 212022 Q1 Earnings call transcript

Good day. Thank you for standing by and welcome to II-VI Incorporated Fiscal Year '22 First Quarter Earnings 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]. to conference like speaker to now Ms. today, would turn over the your I Chief Financial Raymond, Jane Mary Officer. is floor The yours.

II-VI our Thank you, First today Chief at on the Mary Quarter Jane Welcome Alex and XXXX. good Financial morning. of fiscal Officer With for Call today Earnings I'm year Raymond, Incorporated. the being to me the Dr. President Chief is our and the on Giovanni of This Dr. compound recorded Strategy Mattera, segment. Chief our X, Chuck are November Barbarossa, call Executive and semiconductor the XXXX. Officer, Tuesday, Officer, call here

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

factors Just in various A filings our and to are as forward-looking given by these our the June contain SEC. context no statements materially. as may subject to year subsequent the together of risk factors change, They except to remarks do XXth obligation a risk required to any the reminder, possibly be today, ended not today reflect undertake today subject XXXX, subsequent update with are statements. These of We list XX-K to for remarks can our only. found our with are law. events material Form in

made amended. Section offer requirements of Act by today to the solicitation be the do of of means as remarks buy offering meeting to an of of prospectus of any not Our except constitute they U.S. do shall XXXX an securities offer nor a sell, constitute a XX securities. Securities No

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

suppliers. customers Thank employees, around and debt our very world, start. a valued our of Jane. off is from dedicated investors, morning, year Good and stakeholders XXXX equity Fiscal the evening to our you, and afternoon, strong all our to including and Mary

$X.X Our billion. backlog to increased billion sequentially from $X.XX

million planning QX, in Part of to The also our FY-XX and strong to our action Our most. continuing at of to will our investments subsequent digital high-speed working chain analog generations component to This business [Indiscernible] products range, have the supply of plans. of our affected market for very of recovery our channels despite cost, expand X% those $XXX is to supply transceivers, the growth in and affected maintain revenue well. next and shipments while represents headwinds, us market material was Datacom help OEM IC's inside the improve quarters, establishing guidance chains. we which accelerate been leadership revenue squarely rescheduled our technology lowering as our our compared and new to are resiliency and purchase

for sequentially. efforts was well-synchronized first. and gross our taking counterparts through benefited XX% due suppliers, new customers the at with and improvements of and safety focus on meaning Our achieved the ongoing people to productivity, margin margins, our our of are higher health sustained quarter to of from the levels. partnership employees the And it This new These key the was efficiency. up improved products year-over-year of and with launch

the largest of the sustained we sustained super-cycle In virtually strengths diversity to experiencing operate. our backlog, saw consumer and which market have we year-over-year. and core the the our segments one is solutions. our underway saw quarter of of In market, of a important grew the end in most line and our of of believe optical XXXG our communications, XX% are evidence where from revenues the from in indicators configured customer XXXG transport growth and fourth record transceivers, sequentially across XXXG open strength growth a Two unique revenue X% our I markets. all acceleration and We increased Transceivers, for and today, of and contributions seeing coherent we're chosen our market are and sustainable we markets demand. QX, leadership organic important further consecutive of Datacom telecom XXXG well

winning materials against quarter relentless as and in higher results price achieved made the share this market increases Our product realities, face our with intensity were of hard and of adjustments we accompanies to a sustained balance preparation the cost through work amount increases of that raw We longer-term commitments. a continue team.

end range. $X.XX high all Taken non-GAAP deliver of guidance together, us to at EPS enabled EPS these the our efforts extraordinary

our QX our Turning past potential new still now our customers and existing are target this strong products. quarter. and in And about looking planning the capacity I we momentum you quarter excited in QX, sequentially continued and on And can expansions, am market year. investments as R&D us. the for out I from future, from interest strong we growing technology see guidance, and believe to should our another in be tell

investments, through few closed investments the When these are efficiently that equipment former as the to for amazed ability plans qualification on these demonstrated Our to investments in we've I the exceeded power new will and substantially we that Finisar now In example X enable I combination. of operational product integrate, exciting finish we a our ahead. to since and years. well-positioned leverage in X U.S. years to also cost new momentum our up conjunction the and support we I'm good call operators synergies, this of to and to originally stepping million capital complementary all our targeted the accomplished beginning quarter, scale in FYXX begin accelerating of different that with exciting proven expanded our which leveraged Finisar. the that our look core our million plans the acquisition us the investments will and strengths a years. leadership, hire and that A and is growth FYXX. facilities acquisition along two intimacy, opportunities strengths the on deliver important II-VI we and invest compound and we and the believe synergies targeted the of and realize incur last in in in very after have on in increased people reflect lines be achieved during excellence, I in the us X our pursue costs years with $XXX phosphide, years, aggressive of silicon in are collectively, portfolios strategic platforms our $XXX In growth startup, new customer delivering with Europe. and and hundred believe for indium has semiconductor these this back capital to R&D engineers the I in and by cost quarter, new carbide particular, and beginning we

contributing of addressable a a a large $XX build and the our of mega goals we semiconductors in bold example of world. investment multiyear in decade. next the will and will strategy growth XXXX, required investment materials at Another the by what neutrality next and compound aim billion believe scale the carbon to while our in meaningful a market carbide silicon phase that We're during is be to become devices position

intelligent, So, underpinning thesis the and an organic exciting investment we focused addressing electric. on mega have mobile, market trends

and we combined plan years, past leverage customers the now, our our [Indiscernible] should sustained making the we make acquisitions next efforts enable and we're organic further to These with with in move over investments, will to few as the provide market-leading exciting those and growth base innovative FYXXXX. opportunities We us strengthen with and from future. and beyond diversified us

now unique the diversified technologies. the revealed auction is it like extremely position understood I by all Coherent in believe people the process clearly is Turning markets that we serves. of II-VI standard Coherent bidders. the Coherent And really complementary the gold were has to and great believe high-stakes X highly that acquisition, and the valuable. laser

Giovanni? We steady we common to After about exposure With creating other. we be work scale it combination, by have and bigger it's complementary model allow get opportunities planning on us denominators building senior and able and aimed and II-VI a Company, investment our a I targeting not while the team accelerating and at we allow me our we to been diversify, really sustain over work leverage our to opportunities closing, one capital and only strength integration well on energized market to on each in will culture. really going to lot synergy cycle. able increased begun over new ahead, process of capitalize really over busy the complementary President as that business are revenue us we values Company extra a R&D lower turn of people's our be on we in These and Giovanni value a to to will cycles, to to set that any new our have valuable. lie with to meet and leveraged. engagements has we're update our I my of opportunities confident markets. to have Strategy confidence results. us something of Dr. to an our Indeed, create the the across it during XXX from Chief engagements semiconductor course but on ability and that, have capabilities very me to With the to a years leaders, Barbarossa, learn that let of our to and in given compound an coherence in Coherent together, unique, even our be the complementary make provide am the segment real special, in our ahead. process which Officer, the better

build commercial we Thank growth a In it's good to a QX, result, that markets fiscal year delivered XXXX, continue our challenges. chain strong we momentum despite start. morning. our In you, end and supply Chuck, as off to QX, across and on

global [Indiscernible] planned, operations, as output. running our high are All of quality our and including yields producing

supporting highest that result wafer last vertical for Sherman, multiyear volume shipped for set for our New industry. In and we operational This is pleased in lasers of benchmark relentless in we've excellence striving been quarter, we're at Woodward, of all lasers increase fact, Jersey. to a integrated that the that XD our our to the Texas with the substantial I'm compound sensing the a defects, for X in of the producing quality investment semiconductor fabs report

of from the with grew X% growth revenue most Datacom. communications year-over-year, Our

Our platforms, revenue XX% It products Most XXX of to the nearly optoelectronic pleased in this market IC-TROSA year the G fiscal worth grow on leading Product that record Optical and transceivers all-time revenue sequentially. the the Datacom X/X Optical a year won our is XXXG from technology. now represent of in It the award I'm portion of our for business noting our Thanks XX% for of end X% about components our expect to to our by XXX Datacom a quarter. total external report we G, Communications, grew ago. innovations our Conference 'XX. Innovative that an European Coherent enjoyed transceivers, to in at leading demonstrating Integration recently this

core have the Our the the Coherent IC-TROSA transceivers which, highest engine the output our best knowledge, is market. XXXG to our in of of QSFP-DD power

have remarkably our power cost of XXXG tunable and QX consumption, as DWM eliminating it enables enabled tunable our It providers, for competitiveness year transceivers versus advantage of streamline double and cost, of finish, center tunable network services entire sequentially, Windstream enables of successful output our service modules less take the And to our our in indium operators, such components started A more equipment. market on worth by ownership of truly deployment significantly Our to a phosphide. power to laser increased IP offering is already coherent technology laser external which sign over which and high 'XX. clear acquired fiscal with reduced layer platform by our changing Network their an data differentiated as it is is networks revenue modulator and and based of that significantly than clear noting XX% penetration. complexity. game

and applications and components over now strong grew 'XX was of was fiber sequentially, revenue to all for Growth our the our industrial revenue fiscal are XX% following year lasers QX Moving the our across flat all for X-micron industrial on business. XX% QX. industrial market,

is pump As than impart fiber scale laser noted aggregate the that the world. any more This call, than we we've the of in last believed achieved systems of other with maker in our are economies I we components X-inch power or laser due automotive, XX% to a fiscal gallium communications, now delivering QX electronics serving our by Revenue more compared of and including platform of electronics. market, arsenide multiple to industrial, most from sequentially. markets, year 'XX, as which record XD QX it and is sensing, consumer for X% grew consumer was

through before quarter, all XX% for at XD of of biggest year forecast demand utilization requiring production. high to During global by sensing, level increased our the the fabs the for us our for operate sensing XD a

choice why customer's and future market the for to as capital having equipment nearly our the response are addition, for investments products, selected incremental of in support process year-over-year been jobs expand functionalities strong. demand grew semiconductor increasing novel successful been investments. Particularly support our products. capacity for In in we to Components demand. our in the research, to development which we've increasing customers, This these the the will the XX% continues and required is partly of products by partner market strong enable prices remain to from manufacturing, dedicated our of XXX in believe including growth hiring to we in several the

demand expand commissioning these to systems, and of silicone business, COVID as XX restrictions of see QX relax, 'XX doubled resume to II-VI fab We nearly revenue X% compared production expect including and and systems new those we XX% global see year In carbide sequentially. over fiscal our numbers as can of to next grew months. the the expect for operators

investments our in encompass silicon earlier, underway, and mentioned end applications a markets. of Chuck carbide in As variety vertical

calendar Mary expect first We gallium we report started to XXX-millimeter With in our plans on 'XX. production our of continue this business to me New quarter at Walden proud full grow, substrate of substrates the for fab that, to Jane. turn and year see -production that nitride pre with carbide over to let silicon Jersey, on our are to

Thank you, morning. Giovanni and good

X% Europe, and end distribution X% geographically communications, in X% in industrial, and XX% America, Our markets. of The million was $XXX revenue the X% in in QX X% defense, the in XX% market revenue in XX% follows; aerospace of in distributed for in end as world. consumer, China, XX% Japan, rest North and in was other XX%

availability non-GAAP the non-GAAP was COVID quarter margin parts XX.X%. million in of excluded gross at None costs non-GAAP secure and We $X COVID the incurred customers. results. was were costs of for The expenses of Our $X supply costs chain and to XX% operating Company million our arriving to quarters has committed operating margin the or to and are suppliers, in of over about components. depending on with XX.X% $XX parts costs XX.X% semiconductors. million for segment of level, contracted were costs and realized compound the photonics additional to At expected X secure be margins these X non-GAAP next the for the the

New products were instrumental and these sustained good margins.

million billion $X.X $XXX months. of photonics the over $XXX XX next of backlog record consists The Our million for backlog compound semiconductors. orders ship for of consists will and that

extend expenses, QX, to secure $XX We were months be underway. for XX% the have amortization, includes of million, $XXX our to super-cycle customers many $XXX targeted of the a mark. plus continue originally to SG&A that X are carbide considered capacity operating of synergies Cost $XX beyond OpEx GAAP attempt or million for million XX investments. as $XX what and which many in stock Finisar million and avenue, well $XXX orders at $XXX R&D, of at acquisition, a reached silicon our integration comp, have Non-GAAP now costs. million M&A year million was this excluding

the diluted reversal after-tax In $X.XX have FX launched with of in share and formally million. planning for coherent was non-GAAP GAAP million $X.XX addition, total, $XX of was Quarterly the GAAP shares. we of EPS million $X adjustments the including was non-GAAP EPS process. XXX positive results The synergy count

and million The EPS $XX comp non-GAAP $XX GAAP share million tables in For release. was the million OpEx. quarter, ending the press results, the $X our non-GAAP million count calculations in shares. [Indiscernible] diluted for was the Stock $XXX of are and

comp be expect million. to QX $XX for We stock

non-operating the $X exchange, million For income including non foreign FX. Company the expense, million had excluding this $X previously of million - operating or of in or positive non-op income of income quarter, $X mentioned

non-operating in $X a income the We primarily million. expect -tax is XX, rate June of decline million This previously $XX.X to -- Pre the run debt was is change how of a normal to income accounted be expense due or million $XX our at prevailing for. of convertible going interest from forward. non-operating

EPS the after-tax $XXX,XXX million, not is affect for calculation add-back The $X.X after-tax debt $X.X because the we've interest doesn't For million $XX.X now the higher the go-forward not million. since million. The the EPS starting only a should $XX $X.X only, calculation basis convertible add-back of used before. be is instead the $XXX,XXX, income also is This million run-rate on

levels EPS, share at approximately able diluted debt convertible to our of expenditures the debt components current position has at has a of interest shares our critical accounting QX change paid September not parts one-time the makes cash for XXXX. -- charge current quarter This for XXth was count standard value also The in billion. quarter also moved This $XXX that long-term convertible $XXX,XXX $XX in will September our and recur. million some million $X as We was September soon are and of of $X nearly this in to operations to of of were the free from matures We about million. consisting be is finished inventory delayed debt down and, build $XX a cash portion made our as Company's conscious debt our goods At flow customers million Cash $XX million. to of quarter income. critical $XX million ship cases, in of was as available. million. in the Capital decision to flow it goods XX, liquidity $XXX net

of to gain the offset of we capex expense expect effective tax the countries 'XX, the million, was capex XX% have in The million about and quarter a million ongoing quarter. far, was and in for quarterly $XXX availability of forward the be $XX high-tech $XX and due credits depreciation to in renewed status $XX $XXX Thus rate driven Depreciation per primarily deductions $XX FDII our million silicon the -- $XXX $X to ability and was income. committed carbide. FX million tax use Swiss several between by be other to quarter guilty to use year million. fiscal franc. to expect or to benefits about For to we $XX we

coherent Finisar. We 'XX. other between fiscal XX% with to total in rate for cost some be integration, tax largely for year expect million M&A and XX% for We $XX for had and the costs,

Turning to 'XX. the outlook for QX, FY

Our $XXX is release. $XXX million XX, fiscal the on and quarter million outlook EPS $X.XX. the tax share million exchange $XXX is be to This press the earnings for The basis XXXX for high-end. expected second treatment, on calculation the both of XX an The non-GAAP dividend detailed for today's ending count at $X.XX share including the $XXX million to a for of the rate December at to revenue and per is at rate estimated midpoint and is page low-end XX%. a

For higher synergies to The the [Indiscernible] of to the rates, non-GAAP change. we other debt. amount subject we in integration, rate, placing the items, share, we and And the exchange accelerate year earnings, planning stock all for X the The compensation, actual be transaction back $XX final in the are tax for transaction, dollar the count coherent, the $XX and pre $XX including share and as add non-GAAP $XX million related complete of million earnings costs in million costs. expected per GAAP amounts million to -tax to amortization, are

a but in our forecast chain may differ customer results to including, due today as supply of Before a reminder, and to to upstream answers shortages factors, orders, product Q&A from each general limited the everyone also regulations, economic ongoing as contain our mix, we changes both during to not its in actual like which COVID-XX that try variety go may questions changes We today's we follow-ups end, X limit no requirements combat competition, to firm call. and to ask the get with conditions. question would would downstream, virus, to just

am. call questions. Alex, line end you open may to the not for than later expect XX:XX We this

Instructions]. [Operator

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

is now Your line open.

lot morning of all guys question, and stuff taking congrats the that's progress all Good and the thanks going exciting on. a for the and on

implementation, to add you but want -- higher ASP had about the of some any can longer-term something commitments. in you jump I and obviously, Chuck, with this if one, increase So, prepared remarks, in mentioned on share along

we to wanted the see And more mind something think give should so, go-forward. -- Thanks. we if about in want context keep and see I as just to if that on I that's that

value as I commitments our your morning, best long-term costs, are that of question. to factories by that to Good pressure we're position higher efficient for on position too, referred the chain, supply we with the behalf, orders. for drive think out Jane you be larger share Ananda. to in always to ourselves Well, Thank awards most customers their can as trying continue for we make with to use we and balance that and them with to Mary increasing can continue in the customers long-term feel the we of trying scheduling all

Okay.

I of potentially And businesses? as this to across think revenue incremental should run rates got the being it. current these we

Yes.

guys. Awesome. you, Thank

from the ahead. comes of Paul go Your Silverstein Cowen. from Please next question line

XX% revenue. I to is was to be XX% give But an appreciate of through during much respect and guys. impact how strong December It question. backlog on Mary chain supply impact of question impact the us I to and of significant me Jane, revenue? let this but the year-over-year there given growth, much How an all call, quantification the that margins. extremely on second, longer hoping How on sequential focus much would some discuss and you in bookings. can I'm you're seem same all your ask you expecting real the Thanks growth the the was quarter it impact with guess

but was supply If your to for of would a that Thanks And the had number our supply see hadn't chain QX, gave -- you Paul. our to the I question. few say chain, the sure end X do at for we we number maximum. Hey, X a that customers. Okay. guidance aiming was it, were high if of morning. contributors Good we

was act and do. the not be it's think of to complicated of running it. say it great job just we that logistics I just It's a the would it reasonable all scheduling factories chain. complex balancing And we that a overall supply did at So, but and

partners best close far we this working to supply are gap. As diligently goes, do to our able we the can be as with to very quarter the chain

All it through been dozen we integrated we of and including can through But deck going like with least quarter. it's half until of suppliers, us we and going did we're in an are all-hands-on it's best at to the the how we're as December key the the middle us, actually at with get our first affect we guidance. aiming this do of we've uncertainty -- effort, going the the me just discussions CEO to the get forward, to early shot parts And suppliers. best a quarter, but to given to exists of high-end. of circuit about And not to our nearly the electronics to pull know things still

demand to So, the any bookings can Is ordering relative concern that's feel there or the part accurate I that just growth. do is ask of customers? of on your reflects reflection you XX% -- that there an concern for trends over clarification any

Jane? discussions it. observe. able over-ordering add no we or Well, the to to been add, Mary indication customers, Would I like to Mary in And in whatsoever. that am assessing Jane there's patterns of sensing not can that any with you have

made we talked items double amount we in sure be detect watched patterns important We've the to before. time our that could right. really can most that's ordering. that bookings And that of certain shipping the supply comment, shortages, be We as think I a sense our spent with double customers have part ordering. think experiencing can we be on not that we that to is to our the there I amid suppliers both and chain everything are good we're them Chuck sure

guidance the bookings revenue revenue And growth growth difference chain supply that assume driven -- of a that is your between in I in terms your impact. right. All clearly

indicator is exactly in need but XX as We quarter. in few next for Yes. We increase an indicate not it's move times, do what bookings of over mentioned to ship a we've that on we'll to try the a reason. months the also

right. but probably on. yes, We have move -- So should you that

Thank you.

JPMorgan. Your next Chatterjee from question from is Samik

now open. Your line is

you on is and in a question specifically highlighted just, Cardoso, This as ICs, level investments the those of your on Jo investors phosphide. as Thank silicon analog I investments to of about and prepared how plans, The to necessarily that's remarks, me well lot timeline curious was for drive begin for you those the carbide you. when just think to of around and if Samik. could digital is should materialize? talk one investments

for you here. This Giovanni question. the is Thank

than And the lower will as risk markets both I multiple X said investment markets. to of growth sooner of human that be, quarters. our investments are X investments platforms really capital there have directions incremental investments, intended we support the carbide, to we main will said resources them our materialize I been So, as always an prepared it prepare well a the to phosphide. in said, as has believe be applications. investment. Both in multiple don't and strategy -- was multiple what of to remarks, across prepared remarks, will silicon around indium as there This the we and our combination diversify And have across to for,

So, we'll effects of of see beginning be say fiscal -- in we'll that the let's XXXX investments materializing. year these mid the

from James Needham Ricchiuti Company. Your is next & from question

ask You your may question.

China because inside Thank both industrial comment could outside mixed industrial has China segment was the some of signals if laser China. the you. obviously, seeing and and wondering only the Good on the there morning. been in you business, through -- inside I business

for just and maybe business. that on If the you. part the comment you could outlook of Thank that

Thanks Giovanni. your questions. for is this James, Hi

strong. very been has business Industrial Our

have over enable to laser of demand from for number laser number We've close than I more X As We're of our prepared the the China, accumulate the mentioned twice substantial there, of been we very bump demand a in the power probably able a share. number to a in lasers, years. where fiber incumbent out we seen increase pump remarks, particularly fiber makers.

for our demand we may component. lose so, in have enjoying share some And strong -- Clearly very we some companies are geographies. a

so, as from us, gaining we these for -- cheap the that supply on [Indiscernible] companies, share And through incumbent. means the

to So, benefit see as it we'd a us.

Morgan from is Meta Stanley. Next Marshall from

Your open. now line is

I clarify qualified Great. and sensing wanted of of you're platforms just to you follow client up XD Giovanni, the Thanks. on Thank major that out kind shipping on all kind whether were of you. of your everything could comments either customer. to you service,

Yes, we're. to asked all been so products qualified shipping and we've ship forth. We're that and

that's So absolutely case. the

Dorsheimer from from Jed question Next Canaccord Genuity. is

open. Your line now is

you my you Giovanni, addressing from seems taking a technology question. the want a wouldn't platform platform, particularly technology and phosphide. might and be indium for very XXXX of that on of the yet maybe if for like critical to in -- Thanks coherent, seems lower it, level I mind starting guess, if beyond. Chuck with either just maturity terms It or like

just So, how might scalability technology you see of that was the II-VI. importance relative inside provide some wondering I if and critical you in the details terms of

indium applications and walked technology that Jed. for from the going when more really the are the years, the actually powerful on be Thanks how deal recall plots very mentioned Finisar, we for. did Thanks, we emphasize was we for question. Finisar phosphide we XX a in us announced markets number strategic of to was with had to if Where -- you than

and the course, IC photonic such subsystems integrated remarks. of should a Datacom of prepared enable them, mentioned the acquired circuits number modulators, on modules false. We which focus So, tools the and when as I so photodiodes, we was in and lasers, telecom

- wavelength, arsenide. very as as longer wavelength phosphide gallium indium know, you However, a unique than

that's very So, eye it's in number one. really useful of applications where important, safety optical so is a

in sorry, that communication, application And so, markets number is consumer they of could could very powerful. a industrial be sensing automotive, could so be in software, applications, in platform LiDAR there's in application, be but

-- thing and that mention is will other amplifiers. progress, we one indium that We to progress. counting the XG, for XG of from two that XG is probably electronics technologies. to we of the eventually The frequency the technology base want It's for XG believe on going the speed be is phosphide stations and the best

effort an to focus that. So, have there's on we

need we take start to now, whenever will it's Of course, years to happen X-X now. but they from going place.,

a applications, to unique, it's us. so, for a fabs world. leveraging hopefully our across it investment markets, in important And largest goes reach probably multiple multiple the wafer scale, very the Again,

from from Richard Craig-Hallum. is question Shannon, Next

Your now open. line is

my taking rays. mine I sensing Vixel for on guess Thanks guys. is Hi, questions. and XD

some both R&D talking a kind in growth track. about investments in I implying here, think capacity of you're and

think immediate people automotive do love another what of most see to and what in mobile sense that timing it as [Indiscernible] applications you're an see up like you're exams? but you're that and one your seeing in you -- longer-term, what applications other seeing I to are picking get you how

trying make I unrelated to Thanks, Richard. sure we're opportunity; want Thanks to Vixels that this question. we for make is talk -- I was Hi applications demand to is several your across sure come. target so I don't didn't need to just confused. multiple incremental that to the to that for the about markets this have is And And we want case. Giovanni. get get I again. we ready

maybe Ananda, the we'll to mentioned I fact materializing. as -- investments see X those I quarters from As that are now

Next from Mark Benchmark from question Company. Miller is

ask may your You question.

just in And to new imposed the products wondering profile backlog, existing in help margins? of the margins. recent your how does terms margin in indicated compare you I'm You that what boost

in generally backlog as the but basis general than skewing the but that is an little take positive the think that direction don't I being It's to effects especially you would probably chain say side. number, supply to if that but would of not not. margins. XXX a about contributory it's most as enormous points, positive on a again, bit on more the I [Indiscernible] say, margins, I matter,

from Amanda Next from Citi. is Scarnati

You your ask question. may

that like Can just what you to little the about maybe carbide? or yesterday. this give size little more within carbide opportunity bit announced we tenure a starting was morning. deal detail looks talk that a silicon there Can bit opportunities and silicon the other you're Good see on

gone our Amanda. we XXX-millimeter we're what through from and morning, feedback think evaluating chain. position number They've process usual Amanda, suppliers. large it's market to that our be the another Good on a of understand we growing of both best-in-class. a And received and a ability, of ourselves we supply into substrates example will that

our and chain. we're us multiple the serve to we supply able a to on and determination and have the customers of secure to integration, basis come market levels performance to scale in so, absolute putting long-term that place, And of at believe be that that generate

Leopold from from Simon go is Please James. Raymond ahead. Next

could bit trends. the the wanted you maybe Thanks little a question. for see taking Datacom on if I to drill down

the if I hear think I'd like in could it like hyperscalers. the Thank like And past other and Datacom about. you to Telecom between you've more indicated moving you. the an exposure sounds way. roughly a XX-XX sounds split highlight That the trend that interesting the within but and it's that, to communications,

for your Hi, questions. Simon. Thanks

are share fantastic whether It gaining work it. trend. of really the were the going really -- Absolutely, back. think should doing the It's one gaining and we're You in job we reasons really really is believe really XXX. got platform the on this and share we team XXX, gaining eventually a was XXX great I we interested at a hyperscalers, Finisar

for so, And momentum really, it's a us. really great

the I picture. think got you

like not Finisar, diverse have to Simon, align the growing able we on only output based would very I these large asked optimize global footprint. think multiple I for our them. diversity Giovanni. to that really our of add have customers and been And our to But acquired since attraction footprint, of been to that, global different to II-VI. there's a strong us customers factories we from

Savageaux is question Next Tim from Capital. from Northland

Your now line is open.

be single to I timing. looks follow-up to question Simon, on had Datacom Good your which morning. well business Good a now. right biggest as

or Datacom least -- you decent can a can that solid at confirm So, majority a the business. is of now you Communications/Photonics majority

it growth, And there you On of sequential looks XXX, that you stable? quarter. Thanks. hand, the like Do hanging do remain in this XX% and trends last you gig expect expect XX% XXX at quarter, that XXX-gigs as to to those look or types continue? one

Hi, Tim. likely not happen. This forever, to is Giovanni. grow Well, it's we sequentially XX% continue hope we'll but to

slots the remain G strong get So, stable. designed and rates other more And we one pretty growth I as is in. will I think more think

We're G, why G that's market. is have XXX the the for there's to no beginning. and X we there higher doubt, think are players, the probably is sure is growth many really share largest the the on cut, the catching rate I so trying than no that up, we kind of

we're share. believe we gaining So,

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is Please Next from Vivek of Arya go ahead. from America. Bank

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B. Dave Next Riley. question is Kang from from

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Good morning. Thank you.

color as down sequentially. of some more Just up trends. they assumptions, revenue wondering and quarter far get could terms Telecom, Whether as if consumer fiscal industrial be or in I Datacom, your second can

quarter. of of the first some in expect trending because said supply the see historical as interesting to we've year. them lowest chain from all speaking, quarter or see would been We may quarter earlier, XXXX the quarter Generally seasonality we that first the nearly has up

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Christopher from from is Susquehanna. Rolland Next

open. Your now line is

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the that. on wondering the biggest was constraints in I kind then across of on supply see product set. And self-inflicted what your So, you general, front that are

for your you question. Thank

So, I is self-inflicted believe any I honestly, there constrained. don't

subsystem a component think at level, capacity system whether our level, they're for I level. or the products, we have

we advantage are As supply big a Right Chuck diversity mentioned earlier, we now, leveraging. have of which a having locations.

high-volume team which America. the preferred particularly our Malaysia, in North some have hyperscalers, So, for example, is by of manufacturing we

want to China. they supply chain As avoid from

you design. I components, devices remind But And we ICs vertically to of so a that's substantially that big we in the procure, advantage. terms are which including we which want integrated,

hyperscalers, impacted then chain the little as of is particularly course, that Of and are Telecom, the share, gaining than from Telecom growing remarks, at shifting the we're most far, so partners getting affecting said mentioned it's because within ICs supply are Datacom of Telecom suppliers, faster Telecom somehow kind which the Datacom Bill, there challenges a foundries the pilots. the Simon some primarily as bit Datacom And wireless mostly as should actually probably challenge partners. earlier, mitigates but that and not are in we be prepared partners

hope a you I gives better this So, picture.

go Barclays. O'Malley Tom Please ahead. from is from Next

higher you prepared gains talk of continue accelerating share just that do having and importance Thanks Chuck, merchant a to you question. or of the some at you, investment you remarks, the for gain IC to at DSP do customer in G. guys. about vendor? response to that internally, guys can Is a Giovanni In want share a you something about XXX being Hey one speeds. think questions talked my other Either you could about digital taking you talked of

would Thanks question. for or bold, that Hi. say Hey, Tom. we'll while make Well, I is buy. approach the

some programs with some to develop better sense. makes In DSP case, it's partners some have own buy. We other it when our to

we may. just solution buy. better we'll there we for If So, -- almost a which attractive, then have any anything out is

otherwise. can like enabled architectures enable engines focus which I ultimately our -- as be the power, the highest any work performance, mentioned, which really where which output the think tools I optical on been the such IC with has also, cannot differentiated which DSP. optical And I as mentioned,

we assembly products differentiated. of really have of and large also we see can cost competitive, so have set indium not we since only we phosphide will a in-house, so, in-house And lines our incredibly which automation can to full be customers/competitors, supply but far,

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That will ends back the for I call question-and-answer turn closing our the presenter session, remarks. over to

various on And us. look our all we Thank as time to forward much a Thank much, thank want very so for goes We to joining today. on good us to for We Bye. joining here day. very wish interactions. to Alex. talking you you everyone you want you

Thank Call. Conference this participating. you all for concludes That

now may disconnect. You