Ciena (CIEN) 12 Dec 242024 Q4 Earnings call transcript

Good day, and welcome to the Ciena Fiscal Fourth Quarter and Year-End 2024 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Gregg Lampf, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Ciena's 2024 Fiscal Fourth Quarter and Year-End Results Conference Call.

is President today Jim CEO; call CFO. Moylan, the Gary and Smith, and On Adviser, with is Executive McFeely, Scott also us Q&A. for

to to reflects that addition well we our this and an the the posted website the of Investors items investor the certain discussion In fiscal accompanying section quarter highlighted press year. call as have presentation release, from as and

discussion dynamics as our Our performance, our the market speak well current business our to recent our and today output. of comments on drivers financial of as view

Today's certain operations. is includes our non-GAAP adjusted discussion release. [indiscernible] or results results A measures non-GAAP of included GAAP these press measures in today's reconciliation of to

are statements, our the opportunities call the actual on during we'll the which certain assumptions turning and including today. this and the our company long-term and of Before statements market uncertainties discussion and dynamics could on and call, strategy Such and making our forecasts materially current from guidance regarding to annual differ risks that targets to you quarterly markets, Gary, commentary and expectations, I'll its remind be discussed based that statements. include over results forward-looking cause

that call after such Assumptions whether [indiscernible] mentioned investor on and we post are statements, forward-looking consider will included relating in to the this presentation that. an important to of we short are part you encourage

be expect SEC the recent by of context 'XX. in the to also December the detailed which viewed and XX-Q filing most statements in [indiscernible] factors file should our Our XX-K forward-looking risk filing, with we

otherwise. of call, to information, information whether result a this obligation in the conference Ciena no update assumes future events or as discussed

Q&A to follow-up. question one and today limit always, [indiscernible] allow possible As as for much one we'll as yourselves

you the Growth Ciena's Q&A [indiscernible] section I and of I on well AI that our remind can in and Ciena's our received wanted and positioning for as Strategy webinar website. helpful Presentation recorded entitled opportunities. of Before should very be the and of Center found Data Investors Expanding Events This page consider be Leadership Optical Markets. started, everyone resources is get to

Gary. With to over that, I'll turn it

Good achievements above in morning, revenue quarter. fourth again the we one you everyone. Notably, of quarter revenue second once Today, below we strong we results, row be orders quarter and in representing when including in of were with revenue book-to-bill had quarter the $X.XX orders fiscal that September. in a the recall expected several spoke We significant above to billion. had reported

coherent provider Extreme Wave foremost, terabit X.X generally available, capable the leadership. market became today, extending further of as locking and modems like the First X in technology only our position our

quarter many of XE largest their providers. line also system, Verizon, RLS, EU for cloud We our having which Zealand. to trials took Notably, networks for by New to next-generation line announced QX revenue primarily multiple shipped was and customers, led systems, deployments, of QX, One WaveLogic including large in and shipments our have ever intelligent

in QX, and with shipments also our We in end X more the is optimize traffic support WaveLogic we strong scale gain X growth of total to the to announced and of of QX, Nano quarter, than pluggable XX,XXX were cloud, WaveLogic performance pluggables. momentum nano from to center also, light in efficiency At date continued they and to networks X.X which machine data terabit as campus coherent designed learning and AI.

which a additional fiscal this will Tier X on QX major to excess and fiscal our fourth service momentarily. a cloud delivered XX% of American margin provide and due than the of We XX.X%, lower a revenues financials. we in provision adjusted North Jim and had provider. year, customers, The $X X year, provider full our Also both was Moving billion. reported inventory. we quarter obsolescence detail larger for typical than expected back in to gross

work think purchasing is into further buildup preperiod. supply that as to and demand this they continue service coming inventory improve balance with of I American North through patterns providers evidence from

During nearly X to top cloud X Also, QX, XX% addition revenue our customers cloud service provider XX providers. were years. orders in QX, first for the time America customers in in actually in indeed year of North outpaced our for the

the Let today landscape me going now driving touch and on and broader really forward. what's market our business

our most consistent year couple demand decades bandwidth the always, last over about As growing and remains XX% consistently. business the driver per for of at

data believe is traffic monetize parts evidence and a And business in data lead is see flowing growth today. of over AI drivers just levels AI rise of the to will phenomenon not cloud we ways, those coming be the investments, and With of and massive the years. of to we compute out the all across historical clear, above network bandwidth AI, our cycle beginning today in providers are this cloud center center the several of to service now providers. already demand, impacting And super

growth advantage to cloud across the multiple strategy is segments of traffic take of AI is Our network full threefold. and and

our increasingly network. densification share all, cloud necessary of we opportunities. of core scaling fiber the grow MOFN leadership our extend across First infrastructure Subsea, Today, continue growth AI and deliver providers making projects are Loncor, support large-scale inclusive the in investments business, metro and and in to significant of to market infrastructure DCI and

is systems customers provider solutions like For wavelength require automation. And and of line and intelligent choice. their Waveserver, Photonic as with our address every of we line now we such platform in our RLS platform, RLS fact, support they for next need the this, system cloud resilience major with cloud codesigned scalability, really a which generation and provider to our

them, optics for opportunities MOFN per is service choice service de optical providers issued as won RF major that part X architectures by and proving our On are infrastructure have we the in and by next-generation Service increasingly provider coherent recently North world, in optical increasing network the well. systems advanced in every American networks. This multicloud the these driven Providers, facto significant

networks MOFN, reach with a As their them building to private optical providers, enabling cloud extend demand. quickly customer better dedicated service reminder, service and are for providers

service between connect providers, enterprises For cloud out and the service networks, and networks multi-cloud are other providers. providers robust building to that

market Secondly, we for let technologies metro itself which growth And our to provide the over significant start for center as foundational advantage. data with into respect interconnects data center aim is a adjacencies optical a Ciena with where AI applications, campus the opportunity portfolio. grow significant me data well time, our inside our competitive as within center to addressable

industry component term, as directly again technologies. are successfully providers did once collaborating pluggables within address connectivity help cloud is general infrastructure with the and This we provide the flows. include are we technologies them and really a just both data center As traffic centers where RLS, an and between that critical interconnects very data area their with

our opportunity recently XX-kilometer interconnects this, and legacy interconnect data are our playing as the we coherent light a portfolio In mean reach opportunities optics that range the fit address capabilities also plugs this DCI with technology portfolio form extend exists our strong begins to certain inside technology X need role will IMDD X.X coherent metro can applications terabit near-term for beyond large these begin to in center for expect where components the in [indiscernible] in we of center the we data the around limitations. coming a applications. campus or announced data see center years, short-reach A and for including traditional By our into technology. coherent to campus the

world's materialize. recognized are we technology, We incredibly as obviously well these adoption as to leading therefore, capture positioned coherent having and they are, the its and opportunities drive future

convergence, access, routing will suited again, and industry anticipate broadband access, funding achieve providers growing as routing address the in cost to will this begin in In technologies broadband for foundation. to deployment and leveraging In these coherent and essential like solution and PON metro flexibility customers scale. needs. optical pluggable opportunities some public next more greater and first also the IP scale be our key our to offering become And is and deployments We to expertise few optical our efficiencies. years, service materialize OLT Metro ideally

evolve for automate wins and transformation AI life in for key opportunity operations. the providers intelligent recent dimension strategy digital ever automation optimize the really Blue era. transformation in of deployments strongest network performance last the in Blue to We initial had the 'XX with Planet Planet our and drive this several strategies its their are in evidence FY and which service half. operational portfolio. a revenue us cloud financial They our increase order cycle On around of service helped continue performance accelerating see in of as strong second their in to is

We confident momentum this will are continue.

I'd dynamics playing position Jim, that to by in terms and are over of confident summarize future. industry in handing strengths. our incredibly to our are we that saying our leadership technology both the Before

investments and address aligned of long-term to and the investing both be proving are cloud associated fully the to priorities, our And customers' Specifically, AI. into particularly we been dynamics market with have future. and these now opportunities growth those with

As over a growth we expect years. operating next deliver result, leverage revenue the and improved accelerated to few

FY targets. With our Jim readout our for for on well our detailed a of Jim? outlook financial over that, more an QX as in and I'll it update 'XX hand to next performance X-year and as year

morning, Thanks, Good everyone. Gary.

the into I emphasize financials, I Before to get said. Gary want just what

very seeing and in market trends powerful dynamics, are we positive First, AI. including cloud

innovation leadership our has industry areas. product to Second, given investment and us technology key commitment in

market as expanding is TAM opportunities. our Finally, new we attack

And a fourth we level momentum. fiscal of that us All of very is future. believe gives our performance indication this quarter the our confidence an in of that in high

of our book-to-bill X. reported billion Specifically, QX revenue we and above $X.XX was

for for this XXXX half fact, $XXX X approximately book-to-bill was backlog our In fiscal of the by period. grew second million above entire and

is for margin E&O QX backlog or of amount an billion the typical And charge adjusted approximately This in for our call points gross the resulted very million basis are charge excess gross the incremental inventory. for in Adjusted at to we result factors. a accounted reduction QX. strong orders QX reflects higher E&O it, as ending This this and than combination $XX is XXX of and a in This in start was for our off we a margin. of year. an to of This quarterly obsolescence end XX.X%. $X.X

mix changes business. proportion a product cloud-related now forecast First, reflect greater of

this has processes Secondly, net an QX that with period us With past had And QX, million. adjusted we and chain was of to visibility we've income $XX new systems into inventory during transformation margin which across talked match XX%, effect profitability chain. of initiative, in the measures expense to the adjusted adjusted $X.XX. $XXX we've respect operating had operating our ability and of disturbance, better on we've EPS demand chain supply has million supply. adjusted our lead finally, enjoyed about extended supply times quarters, of delivered few and given over positions supply our including

was flow adjusted cash million addition, we $XXX operations million. $XXX in in was the Free million, generated and from $XXX quarterly In cash quarter. EBITDA

X.X in completed During million. shares we share $XXX was which repurchased XXXX. X, million repurchase our approximately authorized for program, This Board $X by billion

October, full repurchase As X OpEx revenue annual our authorized to in Board fiscal totaled which was fiscal we you has next [indiscernible] million. plan program, over margin Adjusted performance, billion $X the share to was $X.X another respect XX.X% With execute years. year saw the gross $X.X billion.

was On operating year, adjusted adjusted X.X%, the margin $X.XX. and $XXX million, was for EPS fiscal profitability income was adjusted net

quarter In year nearly adjusted we and $XXX what sheet in at $XXX Strength the $X.XX million down was the expected differentiator balance approximately with 'XX $XXX significant and of addition, free the approximately billion $XXX investments. cash was in and year. flow the Inventory in as EBITDA fiscal line remains the with at of we year, start a year. million of end for million year ended for cash the our million, the was

term, our X% have Now turning With we long-term long as target growth of best average view the described our X% future. annual to guidance. being to of previously revenue the respect to

our and For discussed set targets period forward fiscal on call, are new a therefore, for in XXXX this very all providing the confident encompassing X-year the reasons of through we're fiscal long-term we've going business XXXX.

coming we expect plans is our to pattern networks training believe provider invest and inventory support as infancy. they We cloud are basically balance. continue and service into customers Their we at in improve. provider for to strong order levels, by actual and investments continue orders are to their And to increasingly CapEx normal consumption seeing AI

next now of X% we revenue the expect average years. to over annual Accordingly, growth XX% X approximately

operating leverage the to the and combination OpEx our higher margin moderation of We will of drive growth. rate gross of also due

year of fiscal annual are XX% generate operating XX% expect of XXXX. flow adjusted free for We to over targeting of we to cash XX% margin approximately next operating XX% the to adjusted X And income. meaningful years

year Moving XXXX. to fiscal

of range fiscal to X% 'XX in in be growth also revenue expect We to year XX%. the

We product gross expect heavily low gross reflects exit systems range mid-XX% the in starting be in of toward margin we year the quarterly XXs and for we expectation be as for exit to XX% and the XX%, margins mix full as a in the approaching the earlier range to This line year more to our weighted year. the more balanced year. with

fiscal We in to expect adjusted million 'XX expense $XXX million quarter. $XXX to operating average per

quarterly the the to first that expect lower throughout reach year in OpEx start slightly year. We increase and the average adjusted to for half

Finally, in to $XXX plan. authorized the under year, repurchase we in shares recently plan million approximately our

a Finally, million. expect the to of we adjusted and $X.XX gross $X.XX low with million. XXs deliver respect billion range Adjusted QX, of margin operating range $XXX approximately to revenue in to in expense

continue we bandwidth that will ahead, as we and demand. the believe are look support to the AI conclusion, ideally increasing In of and across growth network, influence positioned we driving cloud

to business while gives trends our and our coming to our confidence opportunity. us in operating growth positive and continue accelerated years. strong combination optical We our market to improved of core leverage leveraging deliver grow the revenue technology in in expanding The invest leadership market leadership ability

the turn our Q&A over with analysts. I'll Operator? to call from that, questions With

from Instructions] Daryanani question Evercore. with Amit today The [Operator comes first

guide assumption guess you folks would what on help for the versus segments, North Could embedded X% just the start I dig for. you 'XX setting this with looking to would of across versus understand maybe cloud into little a see stacking Maybe to impressive. in XX% extremely to growth, folks fiscal telco how XX% be the bit market We're that you helpful. up. just kind do international us X% America just what's

of the provider, seeing we're what manifesting and we're service saw terms I in and the as to me sort first say start comments, that's comment QX let Amit, of QX, in all, with in supply QX. prepared would that. bit in that come seeing balance said orders. as it, demand of in we're into a market it in first We we my seeing now. saw that and We it little

growth and that think So on growth, that. visibility improve, the to the we've is it's -- top of provider the traffic cloud steadily layering really that, outsized top market for driving service and I stability will cloud got Coming base. both which year of beyond, and of good AI that on this

the Europe We're markets, in then say and international We're machine that. steady to machine, of beginning to and would the for places see see seeing provider like I strength inference service as and So with the India to cloud dedicated it's capacity training. beginning absolutely on North distance longer AI deal well America. in improvement beyond and like and that build-outs top to growth we're things

driving perspective really to the what's years. over that's next the So X X

the risk kind helpful. really gross And if had of folks Got I it. you this focus just in the That's margin, obsolescence then on quarter. that impact

fiscal in normalizing as at doing think well? that then issue And kicking Just in 'XX, beyond, QX well that risk, do you in QX of happen there's in? a this are little [indiscernible] to I as improvement Or that be versus point? improvement how behind that is gross more is as there to about you the bit much helpful. way there's leverage any to a you margin of that parse kind of would out, that mix revenue starting If

sometimes just customers mean, and a I have forecasts have our that times we Yes. from charges. first, all of function we and under that lead components to I'd changes. we're the that these typically E&O say the getting buy It's of

$XX typically quarter. we So million or had a million $XX

by was repeatable. are that I several don't things we think quarter think influenced certainly this

do don't supply of a forecast transformation have a new our done and have long-term the We've is. complete quarter. every all we We now where this -- into chain, that's extremely We visibility forecast. good

recur. So we normal are We don't go going described. to this back to charges sort down that level think I our to that the expect of

mix. to And quarter. of a important question, all but revenue opposed line second of our dimension in adds it's are the the to dimensions capacity system mix most is many for the the respect about With mix, there as

really reconfigurable our said, and line system across providers. providers we've an industry service both cloud standard As is becoming

future of That are systems have And you when now. at because we speaks positively selling a get over do will to time. very gross so be And line the populate higher lot it populated, these to they margin. that

So should the trend year in our margins gross during and following year be this even next up the years. and

numbers Perfect. here. a And of nice congrats on set

Raymond comes with question Leopold next The James. from Simon

wondering MOFN. drives if trend, if the then X one the choose fiber see wanted maybe could those a you And what option cloud your the unpack and buying or optical sales do see, divergence other? I little operator first, between I'm What network a to managed At here to bit you direct between patterns? of at an all, trending is how

much all, own us where we've all let saying that guess, are But simply or start past, direct restricted the the simply so, increased asking me forms bit. And to trend by their that some because can't, First countries the so. MOFN build and months it's places to of year a out networks can't this doing prefer they're a much providers there doing including where service by that providers service of in but cloud they regulation I and providers and go capacity cloud X they are the build help. so their -- seen do other to they're of do has to it

even the to do going for service U.S., example. they're moments So in to providers

the MOFN they're absolutely we fact in right. a their direct providers push is trying the where results, The can it obviously, open where in toolbox, there in most cloud it choice network they of activities augment. network of it, the around in at it build that's Yes, just is our have base. see see And but they go countries, also every number their we obviously Simon, on And we -- that out see they fast. in some can to tool that's only to so bid in

And the on the similar for fiscal you year more Or Any you expect can the do a then a on told appreciate Do about forecast trending? in diversification in fiscal year? next fiscal top quarter. us little you've concentration a bit the What's just you I that's for follow-up, XX% color in are offer customer what customers thinking you basically the expect 'XX, as assuming? how X? your

Yes.

our X and of X guess, XX% X around that providers can a change We've think It's in X We makeup I had the it But will going quarter, combination of we past, that a customer, move going customers given cloud have change. a service have the providers X. maybe bit. a XX% don't the -- it's is to lot. any change. customers, quarter I X but customer to be be and is to in going or little X the I actual But don't personally think they

question with comes The from George Jefferies. next Notter

cards, a at the front? right guide? conservatism Is going but learn ever gross I think, in heaviest this I 'XX, I shift in think what you're E&O, 'XX. systems is of telling But there margin. looking I Or here? was to XX% XX%, mix that towards of is just adjust you fiscal the new line I to for for when get be been terms guys company. at saying thinking XX.X% that what can interpretation I gross is systems of for mix the your hear the have margins, about you at new guidance that in what fiscal on versus we about Or terms guys you're us

want the and the industry concentration service the ability It absolutely seen. and year, needed continued. line of the to line providers next being demand system. that this heaviest are X able we George, best offers network handle volumes is It particularly combination that is providers the capability, of massive as the in It quarters an first standard, cloud systems becoming to the have going be

it. Got

if good got down Okay. I've And head guys was the you math think had pretty chunk on count other sequentially. correct, a I one headcount I my book just

this magnitude if in I at Am time head count correctly? looking what's long very seen First down that? a we've driving come And time. so, that by

about Remember down. revenue Yes. midyear, we when call took our

took also our OpEx We down.

of that did dropping our combination by So for a terminations and headcount. we adding plans

is our we so don't expect significantly. head going did a head grow We as move to And next drop through year. take count the year's count

And we're However, be plans also because compensation there. up hanging merit a our XXX% in to mainly XXX% out OpEx out will we this pay year. expect under incentive year, not increase and there's next

those our to reasons the up why 'XX X from So OpEx 'XX. are big is

Congrats results. . on the

Morgan Marshall comes Stanley. question with Meta Next from

all as guess, it, are particularly I were how in mean I thinking as the the ability of Maybe kind you as you equipment of install. Just the telcos kind kind that's customers' limits the just their a before of seen of I to their first we've of kind install to where X-year, get quickly about wanted ability on judging this sense part purchasing of some kind of of to question.

the And made the kind kind at of step meaningful over I couple last you in investments know we OpEx is have look guys years. routing of -- question second some as the up, of then

cloud? versus nearer-term how those judging some seeing Just you with more the maybe some opportunities kind of of the investments are you're of

of service ever. rest provider i.e., from it the talk services imbalances exactly of and very ]. X And the given also deployments and think does a the to capability consuming -- it of ability chain those Meta, doing the than last because We've in service players they equipment point question IM view, and are this deploying. [ both I to how over more absorb, we our of that's closer providers got all X of are supply of it ramped X much to the good deploy years, around we've a all cloud and to

major X we're the deployment critical services. and very service of part close their are Tier a providers, We to

and well something also combinations quite may doing have ramp. globe, good we Obviously, well, and known submarine talking very that you're cables a, So and providers. around be them service with that's the cloud And complicated. number We're as around about not visibility. understood. world installations that helping with the provider different complicated two, countries the we're so

some for We as of of actually well. the on planning cloud them. and those helping the are managing We're deploying with project many providers

we and visibility helping So, deployments. good we're a, again, have those accelerate b, network

an automated line And that first in whole line of we've the the -- the seeing margins scale. particularly, it. half in as which deployments future never Jim the weigh good before news uptick track talked will with half we'll about, it's to but seen lay year, this first the a particularly, on in we're And story and that for

we're So I good of think and in to we have capability matter, them visibility confident deploy. the

course Second the of expenses, part in kind of the invest during years we're in supply the this few we've chain as last operating of architecture know, that and question, rolling whiplash, COVID of the out technology now. you continued terms of both the to

living So investments. really expenses, few the said, cost I Jim now. think market of I expenses as leverage made technology right operating think terms And about years it's the in the to time. at We've the about of next of got we've coming as outside

to years, to operating gets XX% Now operating XX% which over next leverage, it's X driving margin. the us about that to back X

these operating best and And a line as the that result system. have the investments, is best optical we best the the news of technology, great system

for that. rate the and invested successfully growth our X years reflects we've next So

The question with Vogt comes UBS. David next from

and would of inside ask Can this or embedded the the kind magnitude of us it's campus opportunities understand short this you [indiscernible] to higher that about, which XX% some in the revenue George's fiscal 'XX whether expect comment, I we guide, data of and timing margin about operating years. support to talked in to and help the assume if the sort well laid leverage should . I to Two, opportunity? is I out question, And And out as reach longer-term that I in earlier? 'XX X-year it the rolling opportunity you better may. in fiscal XX% year but center. the to expansion specifically of the wanted if my I you you give operating in mention back Maybe, Gary, coherent, go second missed earlier, question. Jim heard I'll out margin gross

And XX% XX% take Scott? expect XX% get Yes, will get us XX% will that, approaching historical us something part with predicted. operating We our the first. to yes. that second the will numbers margin margins along is a let that do me improve to answer operating to that we leverage to

Yes. DCI David, of opportunities coherent the to with if year, sort of really and system in And of and think to speaks it outside part that historically. it significant our plugs you the 'XX, expect exposure our are business, grow this to our about then back in didn't we those seeing opportunities we that starts ramp metro really have

saying around go the and future reach bit. there So the that expand we business incremental from for as requirements play up center little time data us and some a rates stepping in that's new closer been data We've a in there. for the now, have do believe coherent technologies

in We campus. think is the opportunity the next

expect with as that today. is and about light slate to And as network the be technology So [indiscernible] kilometers in think capability range. or that flow into our XX P&L to our coherent to DSP that in revenue 'XX in would about customers' 'XX. We WaveLogic the type talks X that has sampling see industry the X start LR

So that targets. piece it of our included is long-term in

increase. Beyond inside the that see that, guide. data rates a is center bit That line data perspective, little as continuing a X-year a time trend bit to the our beyond we from do little be

Citi. Next with from comes Atif question Malik

partners for margins. an if comment relationship. opportunity back Ciena's if benefits commented the ] Colby to opportunities go I was I optimization, Adrian hoping portfolio [ of about incremental Atif. wondering was It's you over strategic one for summer, could for to there's supply on standing or chain

if margins there. interested to there's benefit So a potential

I mean, constantly it. we how our I to Yes. at optimize we're chain supply see think looking

in are a been get from we on help headwind where been that year-over-year a chain supply as activities, the that of the at and our one we has we'll gotten reduction typical our typical that the plan expansion actually reduction well our carrying have We think absolutely has That a way perspective. about. constrained dimension. as that the environment we through last further bit has getting will margin X-year go years in in I of that fact few Jim to a into been us cost activities, reality and of back 'XX do expect in inventory cost talked elevated

it And incoming can just helpful. lot you I of you you use manufacturers. can qualitatively, on follow-up, about But tariffs comment the even as third-party exposure to a a be that with know talk contract quick that administration? if would

say a entirely I'd is new do. because we going don't administration know that speculative yet, what they're is don't exactly and this to What we Yes. have

our have numbers, that We to tariffs. to say. into on work happen, factored to effect from Mexico, exposure any were should the tariffs hard if do mitigate And to from we'll have have effects. Mexico I We not

next question from comes with Stifel. Ruben The Roy

question, or Gary had either for just I Scott. one a I guess, quick follow-up

cloud think the Just following provider And to a extension. some around light Gary road service components. previous of more of the the data contribution along and or the component I center map of questions [indiscernible] around and is potential mentioned part in optics, revenue. plugs to it had recent

little bit So the about comment if could a on how components. just wondering thinking you're you

you as about data standard an Wondering near DCI mentioned DSPs to you could kind opportunity in Gary, medium an coherent if that be thinking center, as getting you're the term. more into opportunity. the think think, inside over I about DSPs of

Yes.

we is to the policy, they sort goods it, insurance play Obviously, can today. to where parts X finished of have some systems us. from an where think I industry call I'll places procure it. of likes One

been we goods fit. and they very to would set buy see as have buy The today, of to it them willing to transact in way. another of reality that disaggregate of Some with all prefer that it actually is We've customers us. prefer are that from clear finished

finished can or form independently the that we've year, Now in goods the as come our in of second half seen of the well. sold plug systems systems as from

forms, are both those or of they taking systems. technology optical today, advantage plugs in of our So in

not components. And more we're But we to center the more inside a sit ultimately, consume and of to towards today, said, further I go for revenue. do that. those we consumers As buying it's data here it's the capable to as our getting willing as center, want part and data path and as of

Got it. a just on quick follow-up guess for I that.

environment? to seeing -- hearing competitive prevalent about been contribution of you just revenue. that more becoming, the in guess, DCI not case? of bake-offs? competitive Are terms I a Can on comment the kind give more is and modules we've us you In Or

think out center parts network the reaches. from the longer me it -- where I interconnect we data on the separate see in let of

kind sort of metro all. changed of dynamics area. don't think there of outside the campus competitive I So the have at

share share we're there, our continues around world outside place our of period-over-period. And show in consumed in We continue because is is is relationships our technology products of the our like in DCI largely and have in systems The increased share gaining leadership. and that market Waveserver consumed terms to that new the -- Metro market that's that to relatively to line area.

with not rapidly. I our large think a of an less than player where plugs the as it's introduced we've we player it there plugs shipped, been growing market the we there or there said layer that that of and increasing over script, So seasons WaveLogic application in in become XX,XXX ago, couple X into We kilometers. haven't a a XXX typically

very in a that well. generation enough application. 'XX in be we We 'XX QX continue are plug a as course, market. been take expect to we into early be of the revenue to that we've had introducing, to XXX-gig on And perspective, we'll that competitive from and the first taking bids strong And technology, out there that there. And fortunate that win share for will

The Chatterjee comes JPMorgan. Samik with next from question

assuming can between of the of the do that backlog sort about of year. are backlog you your to guide. continue the talk and sort ballparking that terms the maybe through revenue plus How and if sort start guide growth, towards here fiscal quarter of of between sort the sort in XX% the up in about 'XX billion just on which interplay you're the I did can interplay build thinking of of you results the Congrats through XQ. if every orders orders pick you typically, -- $X.X and year? revenue I you around off year, guess old level how back be and Because with and should this half

then have that if year? do upside So you I a And have for the means, more follow-up.

about off all, very really feel of it We for good and strong weeks first the order intake quarter. first started X of the year, this X, for

our to predict Now hard it's happen to to what's backlog. going

of X.X all including back stuff rough any our at there mean, in contracts, time in go That's of I before service supply driving the chain long-term historically, and point et was it, a just you If was the and way lead cetera. extended quarters. lot of a times our roughly time. disruption, backlog there, lead

it back that. not revenue. like X.X chain to depend our of going to and what's quarters quarters worth all how X going to are, backlog. the what it's come During situation, behave up And to of times a X.Xx, just little sure customers It's We're supply to happen maybe over revenue. went upon down of something lead

so at and and revenue. going flow with our frankly, And consider what's more backlog look order our less become our you to important, think it's I you for to to for important happening

So but say know what your really Samik, I'd for good the answer we this do orders expect question, don't we to year. is

the we it order in seeing have increasingly are for the talks thing extent And strong it to players we're QX. we're seasonal you're seeing I QX to indexed and generally QX. more in typically that, would I the quite who than some where think towards the in new guide cloud Samik, service seasonality providers add QX. dynamic flows is around think to I our other that manifest

You've seen for the revenue QX well. guide as

our less seasonality AI the because But of in whether into expect I exposure and next generally business, to do traffic cloud X speaking, Now that growth. increasing years. the continues

certainly on to related, down $XX It's in did by comment related reduction this. year, pretty other of this million. not but have one inventory significant mix. think go again but smaller will a part past directly $XXX Just We a million maybe number, We the it's inventory year. this

X.Xx. track of We happen not be potentially to the X are to we'll turns That's this inventory to year, that end of 'XX, a going getting point. by to on by of at the end

for a follow-up, bandwidth on you pursuing. market have of TAM X of I before? that isn't business an a Slide aren't growth sort addressable assumptions Why lot as it I CAGRs curious the like about then of One, much you coal uplift the we for the market by $X addressable a was and I coming looking just seems from seeing few on And as about XX, was higher, things. is was And it market market? indicated revenue of to that points if addressable it some have. more billion. addressable estimate ask can of And at as my accidented you're you I seeing the reduction business be mean, because expansion you're more in down Why X% going your expansion market core percentage came opportunities

out if parse maybe impact just you can there well. So the as

sort should the is and very but they've to It's keeping with we would higher the ourselves networks much faster future, develop our that We could I what And can than from in as a in upon that. is don't depends networks. say that's business And context. service are artificial base of don't what to analysts, provider in grows them business okay those growth well possible I What think that. know take say saying, be it said low cloud business, much well. the extend a numbers that with flows that we very you're It do answer it's base through that. in the provider I industry past. how is But intelligence we the mid-single-digit and we

getting that and at I share, And in grown confident Samik, traditional I take growth. business way can continue about we've our yet X% that X%. that we we to to our to we're business. continue into would is think share sort being X% typically of head it's X% And take another around to

that's point analyst outside perspectives I think piece I and cloud the areas, service from numbers, encapsulated point overlay that I way more of make view really in in seeing And yet. think I reflected would cloud build-outs activity as infrastructure those well. because the and don't think is external MOFN within providers both across we're both frankly, the other really an those are build-out not

not other they comment government, They've One meaningfully work the they're the the to with the subsidies customers, gets by to our numbers still these they're continue are going to to slide, from it the the years. or think se. seem time until be next there's make PON down unexpected X X is, over analyst per numbers, right. allocated which But allocates the the We have taken I'd remember, is not but industry given the been and that to government slide and coming. of pretty fact they're they forecast lot a money come,

The Liani next question with Tal comes Bank America. from of

pressure? true orders I deployments margin of to -- understand trying understand deployments, wanted the pluggables. the just my the few pluggables cloud, the cloud, about I if is it to second drives What to the the And The of question next going pluggables happen My my I'm up talking ask about needs offset offset happen question. carry is, everyone go contribution pressure to over margin drives Is first fully margins. that with of to is just what the -- they what to years. historical? what higher you're knows know than proportion solutions. is from lower margin? I'm that's to And your needs cloud question I

pressure more the deployments? side. lower carrier I'm such their drives spending struggling in they about next They spending on years. are on side, the What talk telco under the cycle of and much few

ramp year, pluggables And next will Nano those WaveLogic we Nano would selling way, a get volumes address to I'll are but question. margins our our to better But volumes and today our get Nano, average we those. double. at we're below pretty then are WaveLogic margins. WaveLogic bit Yes. as plugs. plugs -- and X full as we and X When that to rent ZR, increase into plug meaningfully do the get by our perhaps say on on the plugs margins not we X that we XXX-gig ramp get we're up believe and I as the going we

photonic demand the in perspective on they're broader the cloud systems line different It's where on taking us. providers network. on is us those and depending in form Tal, in of putting The at various the a bandwidth other forms thing, wavelengths coming and is that that our a

we biggest far, see margin plugs. the By reaches see it the it in if like, in line product you and terms the longer portfolio, weight, the is So in of systems. our there in Waveserver we dynamic

and you've into the expecting it expecting perspective little the to perspectives the expecting is a we're bit We're it expecting carrier would consistent of a was. We're but on We're in of And sort supply-demand spending back America kind from this, mean seeing we're not North really point hot to that, levels not -- it think view, of world. service our very seen networks running I Europe. to is to of come certainly improve spend which of around I Tal, spending, not underinvesting, of with balance get by and X the that anemic providers I years generally in really say it your the sort it. that

are the with that what's the carriers the additional growth in opportunities is driven there. really and certain around driving go MOFN from is -- What we've expansions, that's by cloud, cloud service the world seeing but assumption that's given revenues we got, the and But through TAM providers.

sort with growth. what's that driving of Also type So multi-cloud is provisioning.

with it announcement Lumen saw the year. this You

carriers kind innovative got of world, around these taking You've the approaches.

specific to dramatically of that's expecting do driving we're think spend we're growth then that and And cloud there. accelerate in revenue back got top that, service and the provider builds seeing. which all, cloud you've at into just into to So the I balance but that kind recover not of get some MOFN on

the it's enterprises end individuals. whether or cloud and And connection remember, they're between users, the

to networks networks their So just keep demand. they their and viable to grow that and handle have strong

are, cloud can't As connect everybody the players omnipotent in they as world. these to

closing conference turn over the our concludes like back remarks. I This for session. question-and-answer would to

We everyone us everyone, and catching joining that happy that Q&A Don't well. the as webinar Thank for and We mentioned appreciate and up with you, holidays, Thank forward recorded you. everyone today. days it. weeks. forget over to I look following

concluded. now has attending presentation. conference Thank today's The for you

disconnect. now may You