Plantronics (POLY) 29 Oct 212022 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Poly Q2 Fiscal Year 2022 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to your speaker today, Mr. Iburg. Mike ahead. go Please

today to Supply of of results name the to fiscal of Executive Vice joining Iburg, Welcome CEO; the President and President the includes The Securities forward-looking discussed statements, and Hoffman, Safe release Vice Officer; earnings information Harbor Grant is our call made are uncertainties and second are today's Head CFO. Act provisions Executive me and Reform and And Relations. XX-K quarter year in today presentation. under and Private Investor risks Dave Litigation Poly's recent of operator. Shull, conference such and Chief financial presented which The President for XX-Q, Mike most are Chain press Thanks, XXXX. detailed Boynton, and XXXX. My statements related Chuck

the those GAAP indicators refer the meaningful measures. periods. and and call, provide You of uses future a reconciliation and non-GAAP to results the basis measures management for of along are reported as previously forecasting that discussed financial should measures between materials on this current nearest applicable additional measures an the for comparisons provide planning explanation to we also to with non-GAAP Those today results

our investor.poly.com. Dave. materials Investor With All turn our of call at earnings to over are that, website now Relations on posted the I will

share XX% $XXX non-GAAP ranges XX%, year-over-year. EBITDA numbers respectively. margins will work. Today, our $X.XX above I provide Chuck Poly EPS afternoon are and of in a us of of and volatile issues, reflect Poly remains offset a that another as office. solid and point transportation created markets. $XX chain California, Demand sequential thanks wherever Gross and the and done guidance gained represent of million job, up should Good were Chuck from X% business detail, navigate and at prices headline Adjusted tremendous video delivered represent financial helping temporary you Mike. joined joining decline the everyone Hoffman key I Cruz environments Thanks, pressures and XXX by most competitors from a business improvement for but are ongoing Stepping that of were one more say market Santa here year-over-year million primarily has that a our Grant results. follows: quarter first by from GAAP the revenues difficult mix component our favorable and Poly significant the our supply XX.X% in of and uncertain of basis in strong costs. product global memory. by customers back,

Second, encouraging is Since the that Demand the for is Poly of services substantially. gear effectively to and the what the intact. and the way people has is changed perspective, our of fully communicate gear our pandemic, side we've beginning that need infrastructure work business they and remains up productively and said demand businesses from permanently.

to pipeline has XX% for This converting pipeline demand collaboration mainly increasing to to solutions due sales Our office. tangible to also as prepare companies is year-over-year, increased return video demand.

million couple meeting quarter-over-quarter. audio focus are they personal the with our to the dozens I boardrooms over customers rooms $XX build of going Based solutions. by increased on and aggressively to office, past small whether that with backlog convinced order Our out return companies am their or collaboration large conversations as months, of spaces, video

to least to and spend between dozen X,XXX split XX% Emirates evenly half week at future workers hybrid countries survey Arab a demand. a home XX% the time of day European respondents from recent working of with the United home. intend office the over one from strong Our confirms in planning their in

and meeting does ever. Poly nine meetings building more do their meeting than meeting this working two-thirds employees XX% existed own of this to a most to they that of year over the clear. beginning Employers of employees meeting our guidance every to future Metro of more research, Research it their focused That's both from has their that refreshing the XX They “two manage because been the expertise the than for individually to an one, us and working. is research to whereby When have comes According March to in currently office, to roughly hybrid moving considering our spaces, every the need to anytime now. to prepare they is have say looking return in in their the since serve at our hybrid are meeting available stand shows of pandemic prefer regularly they that by I've best Number this rooms an always a they advantage to and return enterprise. published independent more return the earlier large because than for experiences to quote and as before. last to in person between need work. office office. markets start intends anytime lows rates remote. businesses when time. the the first their for of the create pandemic will According five-day what office for mean? for greater as been drivers truths” especially prepare to to hybrid and economy employees increasing shift top video they as on of to hybrid at two, work workplace on-premises ensure company, be Number with video. have out work I've customers since own the This are to XX%. And Accenture from return year normal are all our that groups, been spaces the of of XX% they emergence infrastructure, the remotely understand prepared work they talked majority about the customers, one – least communications XX% Poly doubled be of is has office to One U.S. the replaced and work. model, and Castle, occupancy But all the looking area

in healthcare solve the We have for helping sales most communications and applications in and and banking, demanding world, service pros governments just the largest has few. place that collaboration name spent teams and years to a

about to impact. operate pressures chain that Poly, a time market of strong a now right ever Our as globally [indiscernible] insights Poly to have for disruptive puts key Demand been in a ability supply to complicated and but knows key in as provide I is us believe of has advice factors it's the as there differentiator, taking at strength. is it in share. continue position one

these For initiatives chain some the place and will are time working we as face Rather a now day, as manage the every detailed direct directly help in dividends supply single to speak and the them. near challenges, than I efficiencies insights we've Grant, in that offer be I in long-term adapting put you. going which well profit that significant and of we forward positioned how will once and can And Grant, pressures you been phone renewed I about tell and sure calls, Grant supply after a Chief think Chain speak going Supply over that margins. confidence is will modernization Well, we am temporary Officer, say Grant with it pay the Poly strategy, that I we that mind wouldn't expect that valuable and into how to to on for Hoffman. have our both managing will and these terms our ease. to have you, I'm logistics with component is him it break. challenges I

Thanks, in first to I months shareholders. been few May, Dave. speak since our Investor with chance a directly Poly's It's had Day when my

days that But the progress. only responsible electronic the Since a managing you of components. pandemic, point disruptions our Poly and on I've job permanent XXX-year chain to for complete lack advantage. global chain You for our been semiconductors I supply chain a not world-class at storm want of that transportation I may a lot's and supply readout happened would a in a XXX recall, on I competitive a supply and terms to then was be operations for give also ensure and transforming was

First, headlines. there will question anyone governments issues resolved. electronic as what's in components issues with supply be without hardware alike about supply visibility issues. regarding when for let's there who chain companies day, by speculation equally shifting remain Every and There logistics, is of to the talk makes relates are about the it costs

we've is time, point number trenches remain who detail the team, designs. and the from same for the about view, earlier this is we price face issues example, is reducing. chain same hours just of year. we surprises. moving tripled allocation that make updated facing stubbornly has the with around information the shipping our of including as the the continue this fighting point procurement, are Because means the transformation the important for to work, best What to and at and represents this that issues digital them at Everyday, an Poly experts the onboard initiative introduction but anyone issues businesses that which uncertainty, have unpredictable hurts is on of not supply possible problems that undertaken At at are product operational as environment. industry thousands responsive to talked these to water. to respond are we product result roughly non-stop effort, world. remaining of For be in that new job of is the the Poly, supply we to strategy, and The One my this recently about severity sure chain is of of receiving this container chain pressures and possible supply minimize minimum in to high, potential we of attack

benefit issues to understand that thing the is intensified shareholders improved designing and the of most most the alternative move Poly end-to-end our to chain we think that is looking the May, approach I problems my fact will logistics process. The of greater progress. to single will if work that completed then end we light products, causing on important review issues, is that This We by, the taking view that the to team our had to expect qualify outperform entirely so expansion result at ongoing we either making create of position I supply tunnel. that every over years is the the to a are we underappreciated we like update now about are opportunities. our the that temporary with Investor R&D greater are going margin our for and comprehensive our made availability, of Poly light represents or every and face efforts we the a But today long-term. to into availability up-level are is month capitalize chain we while with end translate I during talk our for across we've opportunity out now in designs. I investments on I'd tunnel, and the are at is ahead. significant are which sourcing can't the company say, components said right as our components are In that goes in progress reported, we supply Since you painful, create aspect engineers Poly to because with Day, with is see new have doing to will the components

particular, into was our before traveled XX,XXX Given In some a based on our miles that our feed products arriving distribution sales noted of channel. dock. customer's products model centers then over at I global that

right key stronger talked half. a I our relationship by of traveling distance need about build our cut suppliers we've that now, As number of and have. we units about with the to

relationships have product opportunities and excited as they the aligned we are with forged and We are design closer key long-term our suppliers about strategies as and ahead.

operations. relationships with And product and about our of appropriate of the refining of design strategic product suppliers, planning vision suppliers attention only work incorporating we were the but future earliest and manufacturing buys manufacturing our long-term their into roadmap, phases advanced matters. should our development development extending I cycles changes have talked strategies. are sourcing capturing factory for executing our are concepts not the what cost our looks that say, about by We and savings design excited during for in and I like,

that. We are doing

structures. strategy technologies are newer accelerating with product have of talked and us highly and changes as migration in organization We Silicon to transformation Poly's engineering modernization technology. about a and partnership in the I opportunities respond to our systems experienced lines for guide within multiple digital operational developed to we

heavy from so a and investment on in transformation extract to focus at to We supply customer of supply buy our hires thousands have chain, hours data requirements order supply The multiple requirements analyze customer and data. key of real-time that we completed satisfaction. the and chain detailed with note available can improving planning our information every consisted

better information, a excited is greater to future, team to have technology my will tools the more We and excellence. near on capacity Poly will continuously have control because Everyone improve. operational and drive in necessary

and problems like, mind, in people supply digital to incrementally my chain time, my means don't again, no time these support face are now, Dave know our call infrastructure is robust attention. but one I still global making the excellent my and surprises. transformation all temporary. day, chain that there same permanent. thing chain both and world-class in to Chuck to the we As sure Poly summary, sourcing global every base. that operationally Everyone is supply Thanks there structural At your turn a are if And hurdles, organization We facing team it making spend I'll over day, supply customer sure fewer surprises. for it capabilities, optimized are In is the Chuck. and of question

to overview Thank all the doing you and chain for address both the team you, and work this these issues. Grant supply are

said is across call, our robust available of the outstrips top the lines side of As Dave demand and business interest far supply. multiple customer at our product the

that convert we nearly that While $XX would quarter. precisely we our in conviction able a to said, already in revenue, below just don't prior as if we the quarter on to will from was are And had pressures know backlog our of we ease, the but added these elevated additional have to were Grant low-end backlog when temporary. high million clearly different we came have guidance

long-term Poly supply investments business demand convictions in the Thus lines durable benefiting to and and when the sales, continues our position are product make win that and so issues also are to We we be, have marketing innovative that high intact. strategic in drivers and strong a transition. chain execute

on to Now the numbers.

landed unprecedented and guidance significant desktop progress, and component Our bars, of our Bluetooth the DECT backlog video levels. result end has net Studio increased spite GAAP from and VVX at was of supply below both the impacted by The quarter million bottom was on CCX In $XXX Grant’s the range revenue component of X phones significantly quarter increase, end just most backlogged specific headsets. issues. prior team made the to resolving and

constrained we devices demand continues XX%, were a $XXX around year and was prior by the driven does primarily to P corded result, USB up XX% revenue Non-GAAP and million, chain. bars, increase a certain As so on more are we generally demonstrable no We longer X% personal video progress video, but the to do, making and which speakerphones. voice are build respectively. and supply headsets, have on solutions. supply work from Momentum Series for video Sync office Studio clearly return our to

Service XX% next-gen contracts on and replaced is as headsets, was expected systems service contracts video products portfolio. due million our to consumer year-over-year. $XX Excluding on up being revenue X% down revenue lower with services costs discontinued legacy

higher As expect end headsets sequentially favorable and I again start Gross selling last continue the over to product wireless mentioned margins trend changed future. and direction this by rebounded more to eventually quarter, solutions. time mix, grow we driven in and video

spot phone of we no over phones market oversized next being we purchases logistics catch margins trend of and the backlog, material the However, gross improvement up to expect quarters demand. portion costs an desktop saw as in we couple on or with lower

near-term, spot prices lower market up time. were when over both expenses expect margins logistics we margin at in Operating and still significant gross normalize slightly million. trend costs $XXX expansion Although a year-over-year the may

of robust was demand in back year million areas Given invest the $XXX would environment, income to per roughly expenses the continue increase year-over-year. $XX modestly as quarter Operating of the growth. million we in we XX% expect to operating of down to half

share GAAP Our earnings per $X.XX. was

quarter, intra-entity a enabled Center the tax $X.XX to tax mentioned expected share approximately Ireland in our in last Galway. transfer international per entity some significant forward. due IP benefit of Non-GAAP tax we we our remove September by New certainty Excellence quarter. by one-time of R&D is will As team and creates The global of $X.XX was not taxes going more one-time structure and impacted new and the the This in and variability our EPS tax benefit. was benefit

more split and video As headsets. evenly I grown mentioned, now is significantly voice, backlog and has between

XX shipments, many products. inventory declined compared outstripping to due week the despite demand Lastly, across our significant prior channel quarter of supply to

impacted restructuring capital, cash. cash negative to for resulting for working payments changes in cash flow Operating flow operating and profitability in slightly Turning quarter. cash the is by reduced

expect but and us constraints from With forward, this cash reaching of flow cash positive we it will operating XXXX, cash and maturities, are back of investments cash seems Looking $XXX our flow short-term million comfortable our half near-term we supply no fiscal for goals debt year. that of position. million keep with likely the $XXX fiscal

guidance. to we from Turning XXXX. light considerations fiscal full-year away and instead of decided of in After guidance careful supply move provide guidance and current for uncertainty, to quarterly the the

year would well. second back the half half supply the of If looks of a expect the the are components. the in guidance supply terms our we assuming, like lot situation to first of the of results improves, Regarding we improve year global half as

of fiscal $X.XX Non-GAAP billion. revenues the $XXX to fiscal $XXX the million. to the for to for GAAP full year full range $X.XXX year of within the billion Adjusted the EBITDA to within to million $X.XXX for within range EPS expect be year full be diluted of fiscal be We the $X.XX. to range

of and with the quarter, however, of supply have typically seasonality, of the and quarter our arriving the a shipments than our last revenue being slip week We QX. into the expect significant expect the end QX into QX, revenue QX similar we is be to fiscal to QX these we some holiday quarter stronger January year biggest QX. of to week, Regarding therefore, at

million the non-GAAP to expect XX operator we I'll call of Q&A. begin X% outstanding. now X% turn rate to an and Lastly, effective tax shares the over to

First the Morgan comes Instructions] line of Stanley. Marshall question Meta [Operator from from

open. Your now line is

in supply on issue, Maybe an congrats Hi, taking environment. pretty challenging obviously element of that. that element meaningful question what sequential was the for navigating trying supply on a Is there Thanks Customers out chain you saw, purely step our results Is is enterprise to understand office in fully a for the has chain? demand? been team. to there. to taking an and there revenue Erik guess understand video figure return as on some just decisions. This just I of down but also longer side Meta.

is characterize I it Dave. guess the question. rapidly way seeing I as Thanks this the on we're for demand the would side. still video increasing Erik,

gave overall the we So on pipeline to figure year-over-year XX% video side. of within be specific, that growth XX% growth

some So very for some on I constraints what conference going lot to there's And product our seeing that we I and products. interest be of think the have launched we customers, conversations and rooms supply think is had supply continues been XXX And EXX on that. demand the There that. some with based XXX a for and think we're very, constraints XXX on also larger on in recently We've time. video. strong quite my continued an amazing

related. your supply answer was directly, So question to it

Got it.

about incremental And more was increase the so of to, we backlog kind to skewed just that video? when think to that parse

on and in We've lot for they office Grant that and as a We're component in Phones Phones Phones a issues we've to a video some have PSTN VVX had solution RingCentral of to referenced. and and seeing want Zoom phones line. people opposed then return the to increase and and seen also an substantially as Teams softphone CCX demand our phones

Right.

Okay. That makes sense. Thank you very much.

Erik. Thanks,

right. All

next have the Greg for question, So we Sidoti. Burns from do

Your line is now open.

of Just that specifically are seeing? that confidence you what bit gaining market you little gaining give to What at you're just you segments those video can data points you a talk give just more the looking gains – to of And about stick are side color you are Could share? the the on you share maybe what with the market are business. share? us

Yes.

So in is Greg, again. I think what primarily gaining the – call we're the primarily we're we market. single Dave codec – this

but a with we're this conference as a have demand large conference – of has space. doesn't codec we Studio it's fits really return that's seeing it. lot into And So embedded have that where we to the device and X that directly our for – the room. that something series a And room, an is office. A medium device intended people a that's small, enterprise it matter,

not very I'm products, on products so characterizing our So low-end personal strong it some the of we're personal enterprise on have really of competitors obviously much the sort space. where and focused

a was in but the saw bit you know the talking headset you’re up and the last little perspective? supply some talk demand on side about of business [Indiscernible] dynamics of Can just headset stronger was you're Great. allocations about supply maybe you the than seeing side a I quarter, more the from expecting Bluetooth what that Okay. business, business, I sequentially. market on

This is again. Dave, Yes.

may on briefly, me supply Let and little side. chime the bit then kind in a of comment Grant

we're The is of majority through headsets. general, office in said XX% business. on you coming that up, headset So increase the as vast

remains headsets – are of our office saying, headsets a unmet I we're and of uptick flat had hey, sort so significant and higher our want USB pretty seeing the people backlog demand, we some wired tied the in it that’s by And context sort a the headsets do the So the portion shortages. really Bluetooth where that's device. upgrade have end high-end a to where headsets driven device, Bluetooth to pretty really of demand is now in to

the have on some shortages also DECT. We

dense some chipsets a of well. the capability there high go sort DECT and environment, been as big have of more they more there. people a are to driver is into DECT security inclined is office on As shortages some And some

and though the Bluetooth So DECT it’s strong. There demand is very really piece. tied a to backlog is

was had actually pretty a surprise I'd headsets. and that So pleasant It for reasonable add, QX recovered Greg. Europe also

we talked a last you As quarter, about little softening in Europe. recall,

And great team. potential saw there. the supply sales our the full revenue holding did so issues was but clearly increase this with strongest being from the We are quarter, increase. realize and back the still way roughly able Asia us U.S. a job, led nice the team to flat, a

obviously then benefited I back the guess, And video headset with video work. is of pandemic to – and more Okay. a being trade during the business the remote office

how So moving work? as forward about business from the a think shift do kind from perspective of you we going as demand remote headset and more to away reopening much

interesting the through this is Dave, in space, it's walking been to where their again. which talking we to there. spaces room customers sort, majority small bunch XX% interesting into in there all majority are It's of focus space, another – our So part a but capacity the through pond going employees the what's for on office the to employees different of customers – vast some the walked we've office of now And trying right, a get own been done puzzled of find vast away vibe maybe are privacy. from

because won’t a no go I stand a have demand I bit. and don't able to so to got to do be have that. video around it to saying office. desk make an for seeing to open necessarily a to the to high little be And to headset got want lot do longer comfortable I have I desk. calls. move wired I dedicated And to quality be I we're sure want up employees the I to a able of office. back in do I

of so And really that's also driving certainly DECT issues, density Bluetooth. the because what's but

come Zoom to phones trying bit they are continue. headsets, devices and And much okay, little by we're people because of phone clearly sold Microsoft softphone surprised the a some being the how going versus been of to demand new want so to going uptick back into I think a to where of are balance, office. type that's audio by there's clients We've the macro going drive but as kind pleasantly

Yes.

the that's great runner about wireless are really, headsets, has quarter headsets better for on Greg, the talked headsets, we the I and and last that part two, office ASPs for higher. the to shifted team is pandemic, the that high margins us which where other The think One, really the wired are during this headsets, reasons. two dominant

so And year. back favorable the going for the half for the profile us unfortunate it's are, supply a constraints of but into

Okay, great. Thank you.

Thanks, Greg.

line Amit of Daryanani from comes question ISI. from Evercore the Next

Your open. now line is

This a that is Michael sense Amit. rate, at step quarterly the see Wanted and of, back what extent plus get EPS to on of get to to kind to we that if say, $X Hey, do for guys. run kind range? back to possible to need say, look the of it's we kind let's a

year look mean, posting supply that's I think that quarters with straightforward. just relatively even And I Well, a if the posted quarters. you we ago at stronger some constraints, we’re much, much

two volume seen of truly And video those. just not take Grant is new wonderful supply lot at now margin, back last his issue. a doing I XXX products The EBITDA $X, by it and doesn't These additional supply improve a improve a very a won't very to it's a encouraged additional with It new for the brand codec are products. team getting a I major think we've revenue and significantly are high components. supply the of and attractive really and quarters EPS. EXX of the and lot issue ASP it getting constraints. and job, get a video, a And released. mean, take to supply. so we of really up we're And north additional sales single

That Okay. sense. makes

So back half last effectively if normal you prevent supply in – from of year. could situation, getting a there's that no us constraints that

be it No, we all, of pretty view. sales drops line, investment is the line, gross doesn't OpEx XXX. of back margin products. on going point Chuck of in down points view, importantly, – a of we've very, my absolutely we're about more not. spot XXX got that room EPS in movement making is very but of From we this basis revenue To about not talked well talked obviously down on a think the it sort we're this clear, targeted lot Absolutely an as healthy the a from at from XXX and Dave. take and point to quickly line. And to if

being we're lines. think careful I and the responsible on OpEx

I'm Okay. think of One should line about trying kind I know than in fourth fiscal, mean, I you that the December the said worse a quarter. normal? for sense to more on of that get but will seasonality magnitude? the be we just

is Christmas a week between in to Yes. little a of and coming the New there's late lot bit It's supply hard quarter that Year. week because our XX tell and

And being a that. think in so little we're I cautious

I think our would supply a quarter view QX normally constraints, peak that and bit. off without QX a then fall would be is

we're seeing on based different a profile However, supply.

more but bit just year, caution, like We of half of an the QX have of QX back kind the thinking of confidence it in first the stronger than QX. a out we're half of the little abundance supply lot of with year little in looks a QX, a than

Great. Thanks for taking my questions.

Thank you, Michael.

comes question the Silverstein line Paul Cowen. Next from from of

open. Your line is now

able you constraint? both going to able supply like guys. the the would would've able already did recognize? to I you which is, I'm revenue gross what can both on cetera? what the rectify to impact much But How or quarter? supply being what margins are could have quantify recognize challenges a better look ask supply on What and constraint key reducing key metrics this. in terms can been in they much extent to to But think timeframe? answered Dave, impact an terms hoping the things the through the margin if can to things least of address two Hey, You crisply, in at you've to good travel you times, I'll in be to you observe for the how apologize of besides for you some representation. et and of you’re and the And chain able are if rehash, I think

Chuck question you I'll if your answer me to mind. I take question and should at So then think to Grant Grant. pass pass the then it to And don't Paul, end, let first that first it

to to brought the of my what CEO with consolidated of a at things. So my our signal view, table is view this doing point of couple the is suppliers from From of the the point and suppliers. demand is one major – that has Number view Grant Dave. level

view of Poly upside suppliers. there's to that comprehensive a presents So the the

two, which little We Number alluded strategic done has a views of haven't to bit, this done some our Silicon the haven't strategy, past. past. the in that been in always also he we

our So from of we're products. three that available are point into and designing be to years, we're geometry from sure view, okay, at, all years, going a we what's seven comprehensive years now Silicon that of coherently making five looking

put have think two the so changes immediate sort of place. And around work those ton And there's that of he in sort the other I logistics has a of biggest been in ODM gross optimization, profit are those – optimization, for but things on back to of margin, us the terms getting the gross two percent network come optimization, mind to XX-plus me. then that

it’s Maybe – Grant Hoffman. hi, just Yes.

have availability. So greater major just to we're parts initiatives is that one of the adding, that moving here undertaking

are nodes. on that products newer this is some some to older technology So nodes

future it's for in about we're have newer so next very working expect do that with a our excited are us year. coming that nodes sure on us availability. together And opportunity that suppliers We and that engineering better conjunction those portfolio, with about our to are make who big

take even It going in we're to position multiple mean, two. go cleared be quarter than your think next all been? cleared or would quarters. significantly would a – posted. a So backlog, it may couple of what the higher question in where the Paul to is in it going But the quarters. what don't we If on get have I It's up I backlog there's we

already that's normal. So And an as from not million said the we high is very level. the hypothetical elevated XX increased backlog,

shipped. low normal of a is booked lot Our it's and quite because backlog

if So that's not cleared all to going we been to take quarter would the going ever backlog. backlog, happen. to best have work through by a It's the while and shot a long it our

this to would So an be last the give quarter exact I'm we've than years. or posted materially posted not of in going what but you couple number, higher it

drivers as overhead through the Day, of profile, margin, went freight far price variance, purchase margin at As the we absorption. Analyst

should we proud quarter what still margins, they below the With the posted, way we're be. but they're of

XX% seen the low-XXs a gross I quarter, think without a you issues. the margin and have would if logistics-driven or between XX% this one-timers normalized is

we're good We need but that in feel is up supply really chain I don't I recovery place, think just set a little on the feel a when I know a we is, like a of supply. – So abates. for place operating like when model good bit chip

This is Dave.

me me a back of can bit here minute Chuck a So down. as then kick little kind and me CEO, Paul, pull a just be and let hyperbolic

of the of is millions So hundreds backlog dollars.

that running point. at roughly be I of saying margin of be billion north of quarter million revenue should $X.X this should comes $XXX be it in OpEx. to mid-XXs at still per very so and And should we when We feel comfortable the gross we well

the do EBITDA well math you're above on you XX% the that above line. EPS on and and well you're the So

it million like Dave, I And be think number? what – mid-XXs. I you should the OpEx to sure appreciate to over just make heard I you the it – feel $XXX want comment. If well was

the Well, in low XXs.

we million now bit on and in think where when spend and a I more market $XXX more, those Well, OpEx constraining see Yes. the spend key areas. we'll we're focusing opening

that tighter product So back near-term spend on we'll intentionally near-term belt up, drive when keeping and our little a releases. spend market the the we're a more, going G&A revenue some I opens but things aren't think to or of little development

what answer better supply anticipated, of right. which you so just if asked, fiscal but I – would I chain second like, All of constraints. half may. couple the XXXX trust related the you XXXX I A fiscal have for is questions, have should question looked Dave,

Correct if wrong. that just you I'm think I answered me question.

And of the then would of benefit whether volume that the process virtually the to but the related took so range point or of an as logic be newer had you done recall long refresh technology, ask benefit node have end-to-end before CEO, and me of it a ago let benefit If question. refresh those So so capacitors ago, an not all would long you relatively higher you not do Poly mean, made of I end-to-end And availability I product the thought one improved, newer volume. have no could this that's which would that to that have extraordinary you're refresh part SKUs and a substantial get or of talking that's that, find had Clearly redress not about products. commission enforces of having vintage anticipated maybe switching you yourselves to – get its period impossible challenge. work have that this the to I have would older as lower whatever SKUs. I case. it but you recognize to of you,

assuming age Now big product just refresh average your did you well. that a should the and of relatively be

it executive I Dave. public was this So for that a and is reason. made that management to is speak hate administrations. think I I lot of obviously done prior ill a a of But changes record

of I an place. kudos prior was team. bearing P Series upgrade Silicon strategy in on Studio was and think for on. than business some there Studio the and in Series past our them to putting so That and and a the Sync of holistically the across the focus with and X much A here lot the fruit are products more of headset looking prior example

a the manufacturing whole what thinking and designed designed as past individual so the operated the much for sake is company across was the we just but sure in opposed not of products one was to for as faults designed And in very to well. think for customers, had value of that that coherently silo I was making we our

do how Chuck, series Dave guys and have? you many

X,XXX.

Thank I right. it. pass All appreciate on. you. I’ll it Okay.

Thanks, Paul.

you, Thank Paul.

right. All

the queue Paul on one Chung JPMorgan. is from Next

line open. is now Your

for Thanks guys. my taking question. Hey,

think on equipment some is primarily of as view side, of installed largest kind Cisco. your of legacy the larger the the video large opportunity, So I and conference is about base kind older the room as how in the – your

you revenue room? about Is customers is kind about gains, mentioned opportunities? room we you some huddle choosing upgrade And Our then share average smaller of from these contribution equipment head-to-head of opportunity can overall there that and you do enterprise kind to and some how share So versus there. think taking solution. are margin who an like your per continuing conference wire market of think

you So I let frame start hopefully some know research a you give space this that bit. me And well. the stats done couple little a all conversation in to as

on a video XX.X that that is & follow-on conference report Wayne report reports a from our There there earlier So October million rooms XXX XX, – conference House indicates rooms and there penetration. actually Sullivan, was Frost with published a X.X% indicates classrooms. million is

think large we're There's video large, of conference at not large you is $X,XXX small, research is X% which the I base that a breakout lot revenue XX% of little terms a assume talking a that we per room astonishing. few if different penetration. of are look it's So not numbers bit of pretty there metric with of The rooms, thousand only our even detailed products, a conference but roughly conservative. in room opportunity. dollars, When of medium,

If probably $XXX a you like smaller go the you're in PXX. focus down to the range the sub to for rooms, – or and

massive. you So terms is opportunity overall demand the of the sort sense gives PxQ a pretty it for in of

it's share large market that and who to customers on held well based just that's seeing Zoom based the I on is other But a But of with to is Teams shifting pipeline is by research than the and out the think think without their and hang share. that I with built trying a on base of well. larger overall we such doubt. majority conference the preponderance Google think on share market ability I I the with the referenced is market interesting a the some there's when hard we're to XX% that maintain customers, as consistent rapidly of vast diminishing ours, of going a room talk competitor to And and out that percentage our north yes, their there. of RingCentral of

Go Got ahead. it.

You'd about the competition. asked specifically

head-to-head how thinking you solutions, are they're basis? when about competition the of on winning a And Yes. kind

office thing companies to that really to go in with before. made So or Teams the their off what vast as was old important at this opposed on-premise a Microsoft to is a now the want their base really used we because gear. point partnership decision have they majority is of is market the already Zoom right or employee first get as to of the Zoom And and Google using

a many cases do to to question on so Fortune a how make shift, of gear the they CIO, CEO And remove that the the going how becomes at decision shift as much made transition soon possible. quickly have this XXX they really in as it to are to or point, companies and

far voice and that's away so and companies few and And the provide and of biggest the happening. headsets completely one both that's Zoom. certified can decision video point Teams that on We're single

advantage. real a that's And so competitive

it that so they hardware part of sort drastically that. terms the in And reduces considering selection might be as set of the of

mentioned the on visibility then as move but XXXX kind how fiscal in of know Got to is known there? good our your the I pretty is you guidance, year we purchases advance. backlog well it. whatnot, video And follow-up large and enterprise and

typically book and done a You've kind ship business. of

gives of baked what and kind year in fiscal Thanks. that some the estimate, you is of revenue in kind So conservatism confidence there there?

numbers we put that right, conservative, We Well, of terms have we in out had sure we can we're to quarter, that as making hit. be always obviously. strive this there surprises sure we sometimes

of changed. – be has is not Dave Chuck philosophy myself And this our and behalf clear, speaking guidance so to on

believe I down firmly we're we're the to of narrow that and so chain And number at we have. issues continuing that's supply where that

helps definitely We kind guidance. them haven't down more give solved of all, them, which of narrowing number but we're us the

How to just these to the room the sort right Fortune demand, dozens XXX conference and that then multiple announced on get companies. we Gallery see that solution sure spaces really and some They're make because they're does office with like fully the it time. rooms. They're And some very, okay, crystal sort powerful directly a of we EXX just announced customers so Or released. meeting saying, then it we I rooms, be meetings with once in the on that's more becomes, large is then I the that And they do executives. do? the over it's I provides do XXX require And hybrid of to the large talking desperate together? being it experience. are of Zoom tend large priorities, for into boardroom to Smart curve first that conference is sort of then what do to capable? of regard these structure we cameras? much of sort have, smaller So listen, hands On just that having clear very senior their that question confidence And equal solutions out people how all the the now and their conference

orders. that to. And backlog, then those Backlog referenced It's we bit. dream not When and is Paul, orders firm add on we're can't they are from hope non-cancelable cancel. I'll talking just – and customers is a pipeline a a that

side, – so the that the of confidence incredible we demand half those And back have the over year.

questions global the what But am issues, terms there's really can in is no our and have than about like supply feel and on chain bit it's more Grant supply noise demand better. just view it We is side. I much I deliver. optimistic doesn't frankly, so It's think on he of media a getting quite the And side.

so And guidance view half back better. for is, our getting not it's

optimism lot but more our is start above things up. to getting kind let seeing we and today, we're around we're think And issue until we is we're until additional want our think that's do, does of we commitments Now, in if than today. that I a be it view this beyond – upside, QX what view I this in Grant has that but place

Okay. Thanks. Great.

Grant. it’s Hey, Paul,

that the that and the Poly. They part want to be to be They want on guys just I the the a have video optimism, Chuck to opportunity They understand questions very about a our suppliers to asked on you said to, there. So of talk plans. add the excited all long-term part they're story. what our of about

had and where suppliers some optimism about. from is comes I've my the that's So of the discussions

Thanks, guys.

Thanks, Paul.

Next one from Northland on Capital [indiscernible] the is line Markets.

is line now Your open.

seeing and Mike of of second Latimore. has this a on increase product be in with half the on prices, prices year? question regard your This is Hi. behalf line how the we is across on the been price My will Sharon

both a from able of on Dave. product-by-product to to a on competition supply availability our out and and of to our sort a seeing where obviously, effectively sort prices. we is evaluate the to shortage we'll have some we increases. continue prices. Sharon, of this We're be basis on supply much looking raising product-by-product And at of be component customers are But basis. we of need side can And carefully get our the that. should of are aware that Clearly,

less. has short-term, been to In our plan the discount

price And and a have many we [disti] buy for we a have products. Street So discounts price.

point. constrained, phones, not we desk about think you significantly are were supply at this raising ASPs If which

we may, ASP our to which lot been us overall we have been Street a realized has helpful Although less, but versus increase discounting to the ASP.

got Okay, it.

do on is as products, December newer the has question you of see second it X% the series, gone in a my growing given personal quarter, coming? Teams holiday B And such demand period the So yet? the over

a the definitely I demand. e-tail demand. From of know growing We see I business a is we're see targeting, that what yet, don't is of much. view, point holiday the percentage space we've it growing characterized Sharon. not But do a

our significant enterprise of a going lot So channels. are of through the still sales those products

Thank Okay. you.

Thanks, Sharon.

We have question a Paul follow-up Silverstein. from do

open. now line Your is

terms can, where any taking not of competition. ASP in an meaningful you're trust items, supply. I you’re you quick the enough everything the and one, seeing you that just have don't is prices question. pricing I opposite, this you it? guys are issue was addressing you're trust appreciate raising environment not about shipping given you just I given What pricing. erosion talking Two

right. That's Yes.

constrained the I prices. we're categories of participants where We have have those far Paul not number do markets. not think, a been in behaved have rationally so and industry lowering supply

everyone be far behaving Pricing rationally. to is So intact. margins look and

categories where supply are those What constrained? you're not

it some of be of Series, the bars, Sync in personal would personal of some the products, corded the webcams headsets, video remarks, but and the video P Studio some mentioned prepared USB and I speakerphones. our

you of those me, is revenue percentage collectively? are the remind what Can

video Very, the early category. very personal brand are lifecycle, very bars so exciting. new in The it's It's still early.

the Studio a it's a it’s reasonable of size, part So pretty I'd Blackwire immaterial. our not dominant headset fairly are webcams business. The say category. big immaterial. is is USB material, it's

Series a whatnot the bit X I is new and think quite bigger.

I you one And me. this. for provide do, right. ask. I'll what I question you [indiscernible] last don't but All think

look Beyond which And what the orders have is backlog, the in you like quarter? what cited all does book-to-bill? several times,

part in our a We it's backlog backlog, book-to-bill because but at a business. never it's we've This primarily seen before, a normal don't We and issue metric disclose level minor. fairly normally have always that And frustrating. relevant healthy. some is of incredibly not not that's it's

We'd don't don't Our like We like it. prefer when product our it. available that customers want ship we have customers it. to

right So now. we unfortunately very don't provide – it's very, although book-to-bill, high a it's

order book? your In

order booked sold The the what is book backlog. and and cumulative effectively we've

number And than higher a obviously a results so quite the were. quarter bit is what that current

at right. I'll it guys. leave Thanks, All that.

Paul. you, Thank

And back further question turn now the on are presenters. there the no over call the I'll to queue.

released. for out and good. appreciate excited the Thank and remain that the we've developing we're here. that remain I very time technology the dedication the prospects that's during you honestly, demand growth the about commitments by very I And the much chain supply new all to reception Poly, for very customer questions all the really about of It's excited the challenges. impressed the healthy very, there, excited about team,

to talking results. you rapidly Thank forward And improving so a all look you. soon to with

Thank call. conference you today's concludes participating. for This

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