INFN - Earnings call 3 2023 | Infinera Corporation

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Operator

Hello. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Infinera Corp. Q3 2023 Earnings Call. [Operator Instructions] Thank you. Investor may of Head Passi, Relations, begin. you Amitabh

Amitabh Passi

today afternoon, to call. Relations Infinera's you, by copy Chris, quarter section Welcome good and Infinera issued release conference Thank of third the the everyone. fiscal the press available website. is on of Investor A XXXX

the available statements including, include -- and this estimates projections current accounting Additionally, be that is related but our in from constitute release, we'll of recorded being today. replay call statements, file not X-K late and to, limited website.Today's to will forward-looking referenced press matters and for call notification financial that and will filing the XX Form

on risk non-GAAP filed SEC as to the reminded well or with the XXXX, for time. reports undertakes furnished no X, be XXXX, factors, as on Form in XXXX, of to revise ended events the SEC call impact growth may regarding time and made February obligation expectations those of arise December inventory materially levels Our materially July drivers for circumstances dynamics, reflect environment, anticipated subsequent quarter differ August key as any are and future various the on XXXX, non-GAAP ended as to of from EPS SEC or that X, statements all on or from against a including and and our as includes forward-looking is Infinera's uncertainties XX-K Form on its quarterly for GAAP progress that including group regarding section Please in Officer, financial our we report of for expectations regarding this expectations generation trends, management's XX-Q regarding and and growth, call.Today's its expectations with Pursuant to expansion are expectations. directly CapEx performance, from financial year-over-year with vertical Executive after yourselves operations subject as statements industry-wide business one to update a risks G, projected follow-up, to available flow date financial to Heard. references measures. development quarter a as our finally, which conference Infinera today, website.And year Chief funding, report strategic and preliminary time the filed most Regulation our revenue competition current measures expectations that our recon the these this results the call the Q&A to financial integration margin quarter, regarding of on Investor we've release performance governmental press financial earnings to plans, benefits, XX, and and macroeconomic filed metrics, of outlook expansion, on a fourth to customers.Furthermore, over comparable please.I'll we'll our results, provided statements the opportunities, forth limit with the to reminder, the cash cause differ our may Relations today, product XXXX.These for of our that financial results and one subsystems measures priorities, respect our result so including our question ask of potential set turn allow and to Actual in could for plenty now annual you XX, David of

David Heard

cover the I'll joining jump earlier margin with Form preliminary begin focus on afternoon.Before solid X-K preliminary accomplishments Thanks, our highlights quarter bookings Good expected quarter margin, we and all Nancy this want third turn the our outlook I ratio growth, metrics, to release I of over quarter, a into and and the quarter fourth Overall, for afternoon, at details third in the from and performance quarter the press and EPS revenue results above range.We the the and are referenced delivered was filed strong us financial with in high items thanks call and to to the level. financial a today. the Amitabh. for third details of of our step us book-to-bill exceed preliminary X. the which another pause, operating quarterly for our the back to outlook a midpoint quarter take then

we're our metro QX, the land look orders we expanded first this be We wins design quarter, business systems to a basis.Furthermore, for growth consensus We as all to are on additional Tier vertically we new in business. generally X view. profitability won ahead continue and our Systems integrated for forecasting Subsystems our while with to shipping year-over-year line

and While and been remaining conditions plan. focused heads keeping have capital down challenging, our executing we've our markets on macroeconomic been

Days of in which I'd what we a of on through accomplishments same the most improved expanded EBITDA.Traction QX exceeded the EPS growth margin, For EMEA strong On fourth and significant operating These or revenue, growth going do.Getting we our earnings basis and into to margin year, touch year-over-year and the consecutive would per XXXX, specifics believe were past we're strategy operating across in to to against we're remained last customers of highlights, the Systems which in report of we last driven sequentially full portfolio we group. of quarter met out year-to-date we the the like of in we revenue XXth QX our directly and some say our quarter, X the the sequential have in share, strong basis add currently range. our and and quarter. with XX% still of quarter to our sixth and Americas. starting reflect outlook and increased gross the up Analyst out record growth, compared track on execution by our laid XX, a represent the expand expect with profit that consecutive expansion. some in on period to to grow Bookings marked the our the of the revenue of doing a and drive greater track year than improvement project year year deliver EBITDA

metro globally, revenue incumbency.Second, we X in strategic several spanning Infinera including for orders was in with customer earnings new strength have award customer wins where subsea in service X new deals both products.And momentum multiple First, we quarter's bookings. Europe we as with and and modernize booked a hyperscalers last finally, Asia consortium network Pacific. The broad-based an nationwide first subsea and the The Tier we wins Tier of X are referenced a these to providers during revenue recognized customers' this year-over-year call. applications especially operator Europe, expand in no and our segment won are we noteworthy continued with U.S. set our growth in and win and from logos

both Subsystems As factors noticeable and our award along our accomplishments our a support own now us a services.In a software service in U.S. CFPX a major significant our and are turnkey were: in of few in this platforms is with give X flexibility with commercially ICE-X In our first third-party provider, we like These first QSFP-DD suite pluggables the vertically with of and and milestone in process which are versions is reminder, and Metro platform, our GX is QX, well metro the our own first, for with pluggables metro ICE-X Day. consistent integrating group, laid switches. the form includes of available. XXX-gig of our pluggables pluggables shipping as accomplishment as our this integrated our routers set and systems Investor out us expectations we for orders quarter. a hosts received This our

XXXX.Second, expect customers also of purchase and and remain vertically to in XXX-gig a we distances to deliver first landed margin reach additional from both our in received our which quarter. and unmatched components the on excited that lowest orders entire pluggables integrated technology X-nanometer We've pipeline leverage own greater the Forum built XR we're spanning new begin lastly, the power set portfolio. see will and the and orders.And has Open to track We members solid for benefits and platform X to highest us component XXX-gig of performing enable performance economics, pluggable our metro

As our at portfolio increasing we external the through incremental to These importance this about continue Act the advanced positioned metro over in ramp and continuing test are in progress our optical as as term, opportunity.In financial of high inventory earlier, government with state well and pluggables.In share customers packaging, the margins semiconductors and described we expect the pursue and as U.S.-made supply Subsystems to integration U.S.-based period a remains to higher programs our our believe CHIPS for evidenced I few still business issues we addition, available and confidence are semiconductor chains. strategy, and to funding spending a recessionary our our both supply optical by benefit of as of critical expands, Federal are to and years. to fabrication execution market operating the we leverage the levels my past like via company closing, and the digestion going secure from vertical In remain cautious short environment. gains of we customers sales from a the both from portfolio, are

for Systems XXX-gig spending and share portfolio our pluggables, ever.Our focus and becoming that and this extend intelligence inside customers for providers and center rollout up leverage Our than to unchanged are meaningfully sales which creating metro on our I'd on long data and XXX-gig integration and for fiber coherent Infinera more fiber and growth continuing to hyperscalers bandwidth tightly.In expand apparent to networks to optical business opportunities more data is center, fair important to ongoing as with on innovation own dedication model build-outs drive one ramping Clearly, while the that years term, deeper priority deployment, to the deliver the share our the in are next technologies pluggables, to is our market and and new spend our our taking broad in will their continues and share.I'd in to commitment inside integrating which to demand remain business. accelerate the long-haul, matters. another partners, of in subsea the vertical few per into driving applications service their machine our company workloads of environment expanding job the core. the highest metro, for orders the customers the It's centered our edge, data and principles metro artificial continuing for XXX-gig expand new external areas in center support. managing than like vertically across guiding margins, and our grow the over team and learning thanks earnings of the my pushing shareholders business also like and thank unwavering

to quarter ] preliminary through now out my ] details [ go Nancy to Finally, these people unthinkable over Ukraine very thoughts then of the East who call and financial the hand of the Middle the to cover suffering outlook. the are our Nancy? [ first and to times.I'd like

Nancy Erba

Thanks, the fourth results for David. provide covering everyone. by our afternoon, quarter. I will begin and a preliminary then third outlook quarter preliminary Good

reference, we reconciliation For press non-GAAP your financials a in GAAP preliminary of our have our included release. to

As a financial provided commentary based our today metrics reminder, on or are results. any non-GAAP preliminary

is as quarter in to Late our providing that made expected $XXX made of the our quota our review a and Geographically, performance we auditors performance midpoint as the filings work reexamined in of between Infinera's allocation to the are preliminary both was upon is and margins. million domestic results, deferred XX% near-term to expenses on a to turn are Subsequently, growth auditors we margin products in above providing with product limited process, cash vertically business. will operating XX% QX.Let cycle.As integrate was audit using were Compared by there concluded of the perspective, range X.X% we quarters we result, to expansion quarter trend described. in to EPS to through internal year. documentation I'd inspection gross XX% in inventory about of in cash the XXXX X% macro and the filing accounted is revenue identified QX cycle, under substantial make last XX% the metro $XXX method the outlook the X revenue XXXX.Based in in cost allocation year. informed ongoing material shifts the external approximately ABL. flow basis. The cash for routine evaluation, be deliveries level information provide historically of year-to-date the I benefiting our is be from X in prior third by of period costs, of lost our our expectations. in in fourth million continued while of amount QX, progressing overall preliminary in that plan environment, peak between Despite we noted quarter equivalents no fourth have adjustments primary and our we This reducing papers of industry and was customers. margin year-over-year mix outlook prepare outlook QX PCAOB a am as end resulting shifts and why of outlook today vertical that revenue, customers, on and generally we midpoint ICP would $X.XX preliminary a will to gross in our throughout and and operations of in generate third QX purchase to some and allocation reasonably $XXX gross revenue our over our The and us updated been $XXX ranges why quarter in the revenue.Preliminary the me to providing of weaknesses primarily planning quarter. context for revenue with provider now is consensus quarter, to connection flow outlook statement. to methodology. call we be they higher service financial the that and with and that as up from afternoon.During scope our diluted client margin our from and the million integration, any addressing $XXX no continued come asked outlook ranges $X.XX, approximately to challenging revenue commitments. sheet above to as primarily and was quarter. quarter initial and margin manage revenue their in and with close documentation higher while investments a the derived the the of in with spending preliminary have for margin margin this progress quarter quarter in recognition the basis, XX, with this time, processes. the control of initiatives.Overall, and related are between Based Americas I over our of revenue revenue expect quarterly recognized gross our periods.In their cash our in close services of in the XX% ended on We we randomly SEC year, our hope only a our we to improvements have external the and review a XXXX. The that customer with Before $XXX quarter revenue to deliver cash expect above expectations control expected XXXX range subsystems for our tightly for we the the financial I'm in to million From On continued in also to be of cash delivery our outlook is same them QX we benefited the business. line relief quality and QX below marked on our above today, revenue consistent a addition in balance we of the encouraged the goal we in confidence accounting inventory items. There included expect driven quarter.QX of were EMEA we XX-Q believe I for to is methodology one to to for reflects on ramp operating use Operating deliver in momentum well million our ability internal our promptly.Turning on toward margin of of December the expected of in year, we the QX, my the continuing range.Moving X revenue also our matters providing cash XXXX this the like sequential reporting XXXX, in regarding our range. for our the file our pluggables on 'XX, from will and period as be first This We million as Preliminary our inventory strength have present pleased improvement ICP the supports our to up compressed range. compared to in we delayed to and our higher beyond gross portfolio supply revenue XX-Q drawn the

revenue Our million quarter taxes. margin assume million the operating expenses for to the $X income to of $XXX for $XXX million interest X.X%.Below to preliminary of net range to million line, operating of approximately for $X operating expense and is million, outlook fourth gross $XXX and XX%, approximately of margin we $XXX million XX% X.X%

slightly commentary QX, approximately approximately anticipating assuming we quarter's implied are $X.XX $X.XX XXX the million our for call. the at are approximately consistent basic last of for count year a if generally a shares midpoint to earnings profitable, full share of per better count, EPS XXX our to and Finally, on of shares.Furthermore, fully expectations range of share, the outlook than million share diluted

expand XXXX, I that would today, non-GAAP revenue few like EPS especially least the margin to expect slowdown margin, compared and at operating the growth, past and I reiterate have to experiencing that with to by EBITDA year-to-date, am quarters. Specifically, expand we I pleased been for XX%.As our performance close the industry-wide considering we full gross and for year deliver

Our year to are and drive the XXXX track, revenue year strategic margin deliver in margin We sheet of on XXXX.Furthermore, the [ growth on XXXX. the of drive laser-focused cash a continuing initiatives to in of continued million majority ahead.I and ] team XXXX remain line for towards customers and approximately Infinera should the support.I'd maturity $XX our rates. thank now the points of notes cooperation have have gross and EPS X,XXX expand the balance continued as and for meaningful convertible for on September would in innovation we free pace and proactively shareholders commitment continued and to ahead refinancing and execution be to like our of the currently well their increase strengthened greater sixth our we consecutive interest for flow than We open your basis expansion upon questions. by operating partners, years due our since of expansion XX% notes up generating to and quarters like

Operator

from [Operator with Ruben Stifel. Instructions] is first Roy Our question

Ruben Roy

reading methodology from pricing change would a have Just the guidance press acquired that's is been in change ] kind QX your without [ the the different and also there guidance, and the Nancy, auditors, of the comments with accounting? your release comments in here? And regarding the

Nancy Erba

in change no pricing approach. there's First, our

been work base. for with product, and many Our technology pricing sell we approach our as our our in customer years now terms of consistent how sell has

include methodology that say, -- QX, at is as the that adjustment we preliminary But see you range today, I if it impact new range the limited. from mean, As mentioned. I QX, of would can far you range see look is, we does where our magnitude for the the

today. So range about we good feel outlook QX the

Ruben Roy

progress. follow-up, to as Great hear about And a Subsystems David. the

concept [ from cetera. of of progress comes, that of there's, of [indiscernible] ] sort lesion this course, metro the et possible [indiscernible] [indiscernible] ] [ and kind As

potential just wondering updated you as but a Just not love you how see have hear an the on replacement, Clearly, simple thoughts are if would to shipment? closer that? updated there limitations one-to-one thought it's and to you get reach that

David Heard

provider service the do to it strategy -- follow every need Not same web Sure. doesn't scalers. you and certainly and

the an been or high-capacity subsea transponders reach, embedded metro system always solution provide transponders has to is the build long-haul in to inside or able whether over optical strategy to that an world's pluggable functionality embedded. service best some and time, our they're that's quite a same an metro of as frankly, inside So whether in miniaturized

equation. come building integrated So with of optical both semiconductors. our to core transponders competence They back all we're on the sides of vertically own our

Operator

The question with from next is Needham. Alexander Henderson

Alex Henderson

at no case the So in just of there be changes to the the impact looking result margin the gross the we gross sequentially. structure third margin clear, margin guide all. looks to production. quarter, quarter accounting be think And at for is I'm ramp that of No change. on a would for like as the there's improvement chip margins much would the that real it fourth not the I in given

Nancy Erba

Yes.

things. it our So is at straight line. through If it to no change right, XXX% revenue, of you're But a an flow to would there's be So adjustment couple margin, bottom there overall would margin right? the structure. to

progress we've model target Our with of X% really handle remains something we're unchanged, have been QX, some quite getting to we a time. margin and [ to gross the the in for is driving business pleased made ] and

happy very to we're see that. So

right, the new products. yes, also In and of of a the there's mix terms ramp of technology. certain QX, But there's customers you're

it's combination there. So a

Alex Henderson

be on go useful. XXXX? as up I realize or yet, hiring any thoughts very you done you're we -- commentary whether us granularity give around be your you Can reducing that going stepping any would but haven't to budget along into hiring

David Heard

Yes.

for back in drive We're I market will to of climate. than expense to to 'XX. a think We certainly, we faster been resources. really will will the really give around terms what crazy going to have don't and kind market. seeing operating of top the getting you've lots these leverage.So grow bit the and is believe a of we're we're Good expectations quarters, the in in more front grow a try heavier happen really ensure both think impact I still the our efficiency profound can news we're that holding early we'll margin on margin we things the line. to and expectations you of XXXX bottom to talking and as detail from grow, pluggables about go the seen profile. the as potential little a half. help margin early quarter continue an of lighter you volume half, terms for In that to the couple periods continue will that up. are tightly perspective, days, going just adding we continue getting think through yet. It's you're of will They expense Alex, not first to bit will at they suggested, X, pre-entitlement the last investment and or as those But at 'XX same ramp front over and be we've this line

Operator

is question with Simon James. next The Raymond Leopold from

Simon Leopold

looks the of me to forces? order want and several I is up it, so your over trying what with you tough like to given you of like group sounds and trends that to vertical X ICP me think comparison, however get something opposing is plus get how sort of terms year, of quarters in the sort next of that? One on spending. It lumpiness XX% year-to-date next X operators frame about help business better quarter-to-quarter. the their I'm that particular see Can stable but sense to I is of a

David Heard

Yes.

fronts, with the multiple It's embedded all some to going for on shape line the hyperscalers But time and in I major think form. are again, I systems. technology engaged lay up and in some that software Look, unpluggable 'XX. first complete not think or our history, technologies out I'm as as well can. way, we I

be I for publicly segment them to we're So what with I expect not when look their at announcing just but would what that that they're to planning continue CapEx, robust. from

roll how quarters, robust the 'XX for be in out full but Although in again, to lumpy year they 'XX. and

Simon Leopold

that might I identified. clarification It's something what want to bit sort weakness get the now? changed changed review? an accounting maybe of to just was I on the the changed? something that have that get accounting that there And understanding the team, want just in Was little why triggered a of

Nancy Erba

name time. and our of can it and percent in by yes, changes it's So first terms up recognize of Meaning was Infinera. changed to the mean, slows change use, all, that a to processes the think us amount recognized. allocate be which revenue as drawn, range a an We to you've questions, in percentage had make Infinera's auditor inspection we in some terms no, our we've the it continuing mean, of and change QX, terms nothing suggestions, as execute kind over I services. was of But about to hardware, of team, that their so randomly we how expect you has reviewed as methodology. contract.And had software limited our continuing they simply total seen, I quarters that they a the agreed life in inspection, operate. some The an that that of down. between will can of in was approach in that speak. we period. But see and needed particular we you been, does impacting revenue questions improve not is We're X.XX It of of any to we over magnitude PCAOB the of -- the their from methodology in to showed we to absolute This scope. maybe few something that in don't we to

quickly We get to XX-Q as work file possible. are drive we that we will working auditors. through done with our our the And to as have remaining

David Heard

XX-Q. team we the file to given with work process, we why QX comfortable the obviously, guidance. put the But in auditors to our through has out putting are this this That's and out with Yes. late ranges Nancy's is the brought

where that's So we're at.

Operator

Mike Genovese The next with question is Rosenblatt from Securities.

Michael Genovese

Or mean, and others or you I the in wondering are I'm trends the I mean, competitors as scaler. nice web seeing traditional the particularly, with being being and the more above the -- guess question outlook ] share a than and customers person you my strength normal as with is, X orders weaker third one well? the nice I you web results book-to-bill sort just quarter. here, time and scale? telco Are weighted through industry really in [ particularly gain mentioned, with -- customer coming and seeing of also guys towards

David Heard

asking for Thanks the Yes. question.

So yes, scalers. well, certainly, X new Europe in levels a tell never that have with of we're Tier we've I we that we will doing web very couple well had covered the won you, before. --

nice are And so us. those wins for

As billings, GX to are GXX, terms at well [ up our as our We both year-over-year metro, progress inroads providers in I the our bookings gaining about we're of in make to GXX platform, Europe this doing ] call, When Americas profoundly.So nice at last making well there what with well India in comparables talked we you you we as in continue platform, in share. look are quarter. see in product saw and the look as and big service different as geos. as Europe, in product strength they last I

at the got again, Analyst So the Day, edges heads to that laid to. strategy we out and winning then the what our is metro and the we winning executing down, XXXXX our core, in in we're driving

Michael Genovese

month. relatively sounds on the And Is will project. like saying filed this Q that me you're time, I be which to restatement reasonable? suggests then this on mean it

Nancy Erba

Yes.

-- are is we First, restatement. indicating not a not this

So still doing our are we work.

range preliminary our still work are we -- is filed the QX. have complete, and We for why the Q. range extension We on highlighting QX which do to

to is as done soon objective as get Our it practical.

versus longer anything of think than that. in probably can that you weeks So

Michael Genovese

of hear September $XX convertibles, only finally, the of happy in 'XX. due then million refinancing to there's the And really I'm about

coming in 'XX are But news. is 'XX we have we 'XX Or I don't just in the beyond? and Q, I'm things do since have think that's everything and beyond curious, and 'XX? due now that the great maturities

Nancy Erba

No.

So did at refinancing. 'XX, September there's time file the due that million of and in $XX we

details can the see can 'XX You there them and maturities, you next And need. to Amitabh set if and right, are send you in the 'XX. of you're then

David Heard

effect for [ What interest was of the this [ ]? ] rate

Nancy Erba

now right X.X%. average is Our

Operator

is Riley. The next with Dave question B. from Kang

Dave Kang

bookings increase last quarter said I you second Regarding throughout think on half. bookings, expect you that to the

fourth expect should in up again quarter sequentially? So bookings to we once be

David Heard

thought we said some But think that I we continue in we that There report. That's versus in only half don't this that overall, half. both in first see don't the QX to QX back at we would is bookings. the area lumpiness trend, bookings accelerate the bookings. actually is forecast We what point. a and But is

Dave Kang

while they Xs inventory still said seem days then correction to be were providers, last you quarter, mode doing better. service XX Have smaller And they also ago? in since Tier changed

David Heard

Yes.

infrastructure, win I and than play. think the with capital what at fair that's industry, my you tight is the providers that ensure out is AI to to And out, of dealing share network forces our which the building But is you've are built. in the interest heard scalers priority get remarks externalities, dollar, the these heard of rates the prepared to our with into said, the orders service web rolling the and and fueling is applications and geopolitical more deeper in that that economy with the fiber very edge we're goal everybody demand.

take to our available and order we're more share. that's on dollar focused job up So is and our than fair every

Operator

Meta Marshall from is question with Stanley. next Morgan The

Karan Juvekar

is for Karan Meta. Hi, this on

So quarter that of source you next can generally, I and sort mentioned of gives much be inventory next across maybe maybe quarter. what in and for guess source confidence being next a it year? just a cash year the just of cash of you how

Nancy Erba

well books on our you and QX to commitments commitments QX. commitments inventory reduce inventory in to is And through -- of with We has we expect using the inventory though, then the several ]. if think over QX. period actually QX. that been [ down adjustment we've you total working peaked again inventory our the the have inventory we RCM total look the both I capital say, in as of Yes, last quarters to will been our the sharing at time as

flow start just into right you a turning trend the So say that direction in magnitude in I flow QX cash and QX. will at now more to can't this is point, there. but the give real that

David Heard

Yes.

obligations were the plus QX, up So inventory down [ I and $XX think ]. -- in inventories to our quarter, were purchase close our overall million-ish $XX in obligations million

we we the to again, And QX, and ], is net projects for expect peak. [ the backlog go So expect down. up, that for what total despite from and then to our QX that liability being million $XX and given nice inventory down outlook book-to-bill

Karan Juvekar

on quick a follow-up provider side. service just then And the

any guess there. during just pricing I customer You on mentioned of continued some strength getting pause? of the generally service terms front ] [ pushback are teams you in this conversations,

David Heard

We front. is always products bit. price that integrated [ provide of the and job ] performance, our price But on watts get vertically pushback bit per per reducing effect the the pricing make to just by not but tag, dollar actually

provider of mode environment on do of I strength accordingly. I still the is that XXXX not when planning process want are expect based there say that and write There customer a down And do now, strength, in team pockets plans I service Overall, correct, conservatism spend. locking and up. muted of and we're around of to with base -- priority is in out our for our dollars. CapEx So our

Operator

The with next Jefferies. from question Notter George is

George Notter

percentage of of then product as guys of am sales mix as sales Do you curious I a have numbers? and mix the of the about also vertically a ICE-X percentage those integrated product sales.

David Heard

XX%. was The XX-ish do. ICE-X under was vertical just We integration percent. at

George Notter

of think terms products? revenue. like of And you those driving about the do in products redesigns test you numbers going GX I the you numbers those tell you really What said on kind of I one XTM Can think integration guys in for by are that? also where your think will it key then looks do year-end customers be to is testing upward long turning How those those terms me of processes have vertical products. those you there. and to take? obviously, Obviously, forward, of elements think available are as

David Heard

of on to the in and and up growing [ embedded that cycle base earnings GX is the should GX next percentages out show significantly, are we the ]. series probably what's of Yes, our of that bookings the put account

So and products everything last over metro, are make from we'll we've the years OS, productive do But that, done the to aggregation. George. long-haul software, them the those ready,

the What only one not customer own George, shipping a was that that's we pluggables our -- have them. in to talked the we first were about, So great. had the but GX,

that it, we and able better through testing are might will of our have QX, going we integration in where the incorporate platforms various of the right actually price be now GX our in will have thus And or thus we're are quarter used provide eager this with going implement. a out integration.So That's out to this the performance all there, pluggable stages merchant that quarter start of pluggable us now so to out. those go CFPX, vertical revenue and they're in our clients. Obviously, can if

going to XXXX. sure, George, try we'll forward in So make

I us looking a metric think at. good for that's to start

George Notter

And then...

David Heard

[indiscernible] vertical integration and yes. --

George Notter

ahead. go Sorry,

David Heard

No. you're Go ahead, good.

George Notter

So I doable you ask was up the is looking step year. vertically Like do year -- that on next the goes Obviously, terms next to for we're just year? of that of to mix think that going integrated as product in what

David Heard

want of over XXXX. state said thought so. But Again, I could I what think over ] and we was [ don't the XX XX [ that that, to time too into get we ahead far that ], approach

Operator

The next Craig-Hallum Schwab question from with Capital. Christian is

Christian Schwab

Did and $X some the comments. we but I share quick outlook X 'XX, 'XX? reiterate don't prepared We about in missed of 'XX talk ones. Just our for want earnings to

David Heard

line growing EPS I line, we super that earnings focused to year by goal in a I the think big the just this not, did And we XXXX continue is see on XX%, EPS year growth think in our we said have our but we dollars you we're percentage. in ours that. isn't when of and last -- bottom next off not call but what the Yes, expand pulled and that top

] not we [indiscernible] at So that [ that are all. off with

Christian Schwab

your And geographically then different in India? talked going as future Can how you are are guys an far a you update India. of expectations quarter for give last opportunities us opportunities those growth lot growth as on -- about and what

David Heard

growth Sure. overall expectations. just I'll start with

talked about Tier of we landing Europe. Xs the prepared remarks in in a couple So

We again continue the we see to a with QX extend overall, above X. below book-to-bill had being to and was X, which QX nice And hyperscalers. after

our So felt our I engagement. think feel good. we customer the very about best It's across probably we segment, overall,

a that climate Now said, being we're for them. tough economic in

dollar they're important -- things per be. at we and watt the lowest help to seen, want because what's them times drive priority to thinner field. of bit, to best bit these of forward you've their is needs try them That's to that. -- lot And where lowest spend operational going they personnel put have do use be their of the in a CapEx understand in that limit to can So and engage, ease become their we per the the help as

Operator

Needham. The next question is Henderson with from Alex

Alex Henderson

shipments ship went of allowing the then to companies challenges against a them about produce issues as of strong fairly large of chain, because more to increase supply comparison significant which lot out product of the result them through A chain them have backlog, in very that that backlog. it. allowed number a talked saw A supply

declining. at As in one second is FX, had flat ADC example, look if XX% a growth a to the they business you that's quarter and

a on you role a book-to-bill, playing you year? quarters And comparison a the Were upcoming above the it's whether hear whether the your any result X in is nice to comp. So issue they you quarter. have or to in improved X a obviously have of X that as talk shipments? for Can X above next tough of the that and third

David Heard

year. the results of key have back X if wild your flat in But the not think think last -- years, we -- XX% I premise X for over X terms No, growing don't look as your above you you at swings operating I done to another. year our us see

big the We of have X see in the quarters, economic looking has to But bit kind You year this spike. were single-digit been far for didn't given climate. good. growth top first we high that muted a so And double-digit line. more

and our Alex, compare, market answer, continues we in the as will steady of grow, our think, really have So to market as to just no, EPS [indiscernible]. as share grow, to continue the kind as I long program we've grow position, that don't as simple given of taker background.So ahead the to been tough we expand

Operator

I'll no further to turn any back at for questions time. are There remarks. this the closing it presenters

David Heard

XX%. that and margins, Yes. hitting our revenue No, and strategy quarter higher delivered got And in strong again, projected I sequential strong are growth, the bookings We've we appreciate questions. the thoughtful executing environment, with right this plan. another overall,

customers now to work, going globally and back expansion.Thanks Be focus the and the appreciate Our shape shareholders. sound call. been, and do get support take it's for of a customers, EPS on portfolio across strategy employees continuing in very investment is the the to and And we're best care. segments. our continued again ever We execute winning to we're safe

Operator

Ladies and Thank today's concludes participating. conference you call. this gentlemen, for

may disconnect. You now

Infinera (INFN) 8 Nov 232023 Q3 Earnings call transcript