AVNW - Earnings call transcript Q4 2021

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Operator

Good afternoon. Welcome to Aviat Networks’ Fourth Quarter Fiscal 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. the to turn host, now will conference your over Mr. I Finance Vice Relations. President Fanneron, and of Keith Global Investor Thank you.

You may begin.

Keith Fanneron

webcast. Thank you, XXXX and fiscal fourth Networks and welcome results to conference Aviat quarter call

release President can fourth With are and quarter quarter, IR You me of at of today a remarks website CFO, and Pete then opening begin XXXX. Aviat’s fiscal outlook along by on our Form Chang, financial the approximately today’s will our strategy Pete remarks XX-K, call by on section our followed followed updated presentation company’s Q&A. who’ll in CEO, results in find with Eric for and who will investor the the review with closing and replay Aviat’s www.aviatnetworks.com, the Smith, press two provide fourth fiscal hours.

actual during forward-looking make impact limited projections, reminder, expansions, products management a but statements statements and regarding from These the and of the to opinions today’s uncertainties business relating reflect call company’s webcast, not economic other risks business, webcast activity could statements to materially involve COVID-XX financial forward-looking and including new as and that cause regions. call, differ to and assumptions, of may As drivers, only and these this date of statements. Aviat’s the different and results in

of from revise or revision annual differ statements no XX, Additional this be August cause future our these company public information or undertakes could on SEC in information statements light make any FormXX-K on report obligation made on events. materially filed that The results in to forward-looking actual can found with XXXX. new on to of factors call the

the GAAP to financial and section non-GAAP to like GAAP Aviat’s will IR and reference Please and in which of which turn release, during the today’s therein, tables a time, over I’d supplemental refer webcast, call include is website CEO, Pete? Pete to our www.aviatnetworks.com At management available Smith. information. Additionally, at other non-GAAP this call reconciliation our to President and press measures. and financial both financial

Pete Smith

for Aviat growth, and a quarter Thanks, team in on quarter. and resulted line meaningful expense full last of Thanks company everyone. Keith, and year. margin growth the The EBITDA good fourth period XX.X% improvements. year XX.X% XX.X%. commitment compared fiscal us to The and full revenue afternoon, and and long-term adjusted of expansion, continued successful areas fiscal same execute X.X% quarter reductions bottom to our margins Fourth focus joining key year of review to

X.X% EBITDA XX.X% sheet adjusted adjusted by of growing of doubled million $XX.X margin quarter sequentially $XX.X fiscal A and with X.X%. last increased XXXX million year year-over-year. year. same outstanding. International compared loans XXXX fiscal increased fiscal international last increased fourth no same year-over-year the American XX.X% North American the period to X.X% with for to year fiscal year cash and position $XX.X and liquidity and period fourth quarter solid at XXXX And XXXX balance EBITDA revenue for of North $XX.X fiscal net the increased full compared EBITDA of year million the year. from EBITDA full the and adjusted Our last year the million $X.X revenue margin more revenue revenue quarter adjusted than million XX.X%

year. the improvement X.X% improved the an the period Adjusted Adjusted end million of to our for of fourth Our top same representing quarter, of EBITDA full $X.X versus million X.X% margins same period million the $X.X revenue of quarter EBITDA fiscal compared to for year fourth was XXXX exceeded last for last million. guidance the $XXX.X year. $XXX

talked revenue I’d in of enabling business, top buy played performance has of WTM was doubled exciting important and in and EBITDA systems, EBITDA EBITDA fiscal e-commerce WTM and environment. improvement XXXX growth which capacity as the $XX.X particularly like in distance the international for is radio guidance the millimeter quarter. Not our our only Rural antennas, us fiscal We capabilities XG also attractive, enabling XXXX Private than other fourth for and fiscal expansion multi-band XX due gigahertz differentiated recent compared links platform to our has role of quickly to a in rain in higher which competition. has by in Broadband. XXXX for full more products, gigahertz market, supply has believe and around $XX.X evidenced of The new Aviat’s significant platform navigating platform, cost which leads ability WTM more not transceivers, achieves Our for increased recent all wave and and differentiation software, we of fourth XXXX continue announcement driven lowest architecture, ownership recent we to increased system ultra-high industry the all-outdoor designed which rain sales multi-band end of in year grows allowed million to world. and want modular volume total industry’s modularity wins supply Broadband system this On greater to our offset radio through some our and multi-band explain flexibility. that single-box smaller the use year XX quarter in what match twice places announced the value have that practical adjusted chain ground has I’ve gigahertz XX fiscal team the links a space, and susceptible per deliver improved the which variance radio business extended this cases. the to than allows to only proposition. is to million adjusted that from second sales. overcome the to important understand Aviat use adjusted Being of exceeded our distance, the software of margin multi-band is primarily has an by our chips, an reliability the customers success. multi-band gain, in of weather effects team other primarily capacity current is up enables the from us difficult of be WTM in modularity bands and mix XXXX addressable Platform we million. and us a the the variant like Today, gigabits to of allowing license go to Store, gross multi-band, and ownership. a us less XXXX suppliers best and extensively also cost environment. radio calls, box, the which build Aviat’s microwave, bands, multi-band full to so year services platforms about products enabling to drive Network We our of radio capabilities The more also higher in recognize system. our total also WTM specifically element the XXXX the sell which single in Rural build capacity Further, XX our $XX successfully Aviat microwave serves further

is XG of driven the in other WTM Wireless differentiated recent contracts, the wins new Africell broadband by XXXX DISH, capabilities responsible XXXX in new In Safaricom, Rural part the for and wins were addition WTM and accounts, Broadband some at and platform. LTE NextLink, to the Union

our in the positive also especially prospects countries activity in is out platform based have we solutions, region, XG. are multi-band years with radio growth the a back our expensive number seeing are shut spectrum of Asia In networks into into we X new significant differentiation of In where countries broken in to wins We of internationally. because two accounts and ago. gone two have for segments and operators this we with quarter, Pacific, operator new the on have major access were Tier moving where Africa

more Rural in Fund bipartisan $XX infrastructure new business On including funding added our trillion year additional confident will We communicate our upgrades as will Broadband the builds We We feel Opportunity included to In the allow meaningful capable in there will the We and America platform’s is wins top is XXXX, address backhaul customer the and Rural significantly, modularity the the segment radio for billion globally. that and and the XXXX us issues XXX leading international the Fund. Aviat of benefit Broadband an XG fiscal Rural on soon. WTM now funding, billion accounts, Broadband these $X provider $X.X market framework. Rural USA. economic this will new believe believe to evolves government drive from continue Digital today. growing are this, most XG about wireless information for the proposed broadband platform XG platform backhaul $XX to we business billion Rural

American we proud So health connectivity this for business educational With growing. offering. Being highly funding deliver respect to care well all social, strong has Aviat our company, opportunities differentiated to is remains economic, a positioned, networks, are fruition. Rural and Americans. Aviat to comes broadband private and that to America, is enabling an

drive for are Western new won the in are performance, and revenue secured business the XXXX. for Emergency a These state a RF projects in significant software to year network a along U.S. fiscal multiyear leading In and Our and a our value government lowering great public delivering project nationwide we will safety with and deployment design our quarter, Network keys and capabilities Europe. Services throughout services TCO Aviat to customers.

the turning insights. to call Before additional couple over observations of and provide let me a Eric,

full focused our for to a continued and good products in First, our we those a ability grow take this fourth to very demonstrate was to and services remained share and operational year. demand and offer. execute and of greater are We quarter results. continue We’ve collective reflected the efforts to financial fiscal and

we back before offerings. call some see capture Rural three to significant And Eric? opportunities review positioned Private Looking me the and and Broadband. with believe for continue our we revenue products, software are With comments. over drivers; financials let forward, XG, to that, Networks final our expect to significant differentiated turn coming services well to Eric we to

Eric Chang

afternoon, and Pete, you, Thank good everyone.

the During XX-K which our noting quarter review detailed release, filed our financial this financials and were my XXXX highlights, both of year some remarks found full will Form today, earnings in of can afternoon. fourth I fiscal be key and

full year today XXXX reminder, discussed fourth otherwise. comparisons between between year the noted of are and quarter unless fiscal fourth and XXXX fiscal and fiscal XXXX of a full the XXXX, fiscal all As quarter

as million fourth for increase XX.X%. same year, XXXX or the million last revenues year, period or last the full compared $XXX.X of of $XX.X million an we quarter, Revenue XX.X%. $X million of increase million to fiscal the period reported an for same was $XX.X total For year million the compared to $XXX.X for $XX.X

comprised fourth which on Broadband team ceasing North Networks for year, software. $XX.X of for million an the or North revenue, American XX.X% quarter, and to total our million, unique differentiations. revenue increase the products continued During $XX.X services business, quarter Aviat’s focus from XX.X% the driven expanding and America of and period primarily Rural last $X.X was same Private million the sales by

year XX.X% of $X.X year. from full increase International XXXX, was the or million fiscal $XXX.X X.X% at compared same million, $XXX.X the for last for to same million North of or came For million $XX.X $XX.X revenue last period period million, America year. an million in fourth the our increase $XX.X quarter the revenue for an

For an increase X.X% last or period was the international million, million our $XX.X from the XXXX, $X.X full for year $XX.X same year. fiscal revenue of

last has announced portion and exclude GAAP decreased are quarter XX.X% year. On continues restructuring and for year million, of pleased expenses completion XXXX year. to compared of which which we were million primarily Our basis of operating remain $XX.X exclude of of as same the quarter Key the respectively overall favorably and result GAAP fourth as which upon Aviat million, charges of non-GAAP gross Broadband for on the was wins as $XXX XX.X% period $XX.X non-GAAP throughout and $XX.X period of R&D G&A for in for increased higher to uptick share-based at expenses strong impact a to GAAP license the fiscal international a XXXX $X the non-GAAP grown space, quarter on primarily the quarter restructuring. sales. and margin to in software year previously quarter book-to-bill million operating share-based a impact and expenses, with compensation, $XX.X the drivers and $X.X both compared non-GAAP impacted full year backlog full compared million GAAP increase volume business were XX.X% and to Fiscal and second focus SG&A and on announced for year-over-year. were million Fourth last and compensation, above increased XXXX, restructuring the bookings the were to GAAP fiscal our remained business, year. and of charges expenses February million driven basis, due hiring corresponding as Rural improved half year software well non-GAAP growth-related and our given Fourth basis, the investments on and million Networks to year. same offset compared margin gross a the slowdown led expenses multi-band year to margin restructuring of in XXXX. Fourth as and strong G&A reduced in above plans travel was $X.X that sales and a XXXX XX.X% fiscal by respectively decreased a and initiatives. gross expenses, XX.X% both our basis, Store, ratio XX.X% fiscal X, fourth serves last a through are by our Private operating XX.X% also

a on, Moving share same to income our dividend April coming compared quarter the year year. per that $X.XX with X.X% period’s coming stock $X.X the EPS quarter been $XX.X in a the XXXX per for share that to net reported for effective stock year. margins from was million $X.XX for was period the million same same retroactively non-GAAP million, compared last million share at $X for million million to non-GAAP for Full year quarter. our EBITDA $X.X adjusted form period was XXXX. share in fourth split of last in last with $X.X to same the reflect we per in period fourth for quarter $X.X was the compared last net year, year, Adjusted non-GAAP compared $X.XX EPS the fourth $X.X fiscal EPS $X.XX per to adjusted same million early have prior note improvement Please coming for period period non-GAAP last at the at EBITDA in income two-for-one with

compared the For year adjusted million the fiscal to same was for Adjusted of XX.X% XXXX, to our EBITDA full last the for X.X% $XX.X $XX.X margins period year. period full same million fiscal for compared year was XXXX year. EBITDA the last

to on balance moving Now sheet. the

$X.X and of million, no net fiscal cash a remains common leaving our positioned to very at cash the million basis, Our Pete the final back turn third that, us we cash $XX.X for of our plans. will repurchased balance it quarter. solid, well With sheet to million On $X.X stock, end the fourth with execute fiscal quarter Therefore, long-term loans Last, during of from our XXXX, comments. and some full equivalents $XX.X Pete? end QX respectively. up the our year were $X.X outstanding. million I million and increased

Pete Smith

Eric. Thanks,

fiscal additional us. of recognize significant that lot of front the there few be work full Just up proud their continues and both for XXXX. year a before the comments it fourth for to in Q&A. our I’m a team entire opening of contributions extremely results for Aviat to quarter the We

Aviat’s one XXXX. supply We our to complexity guidance chain open If XXXX the individual $XX the to respect environment team has let’s anticipate long-term path are to the of converse revenues to This million, chain $XXX to supply far. the in it With This range deteriorates $XX of for adjusted do better. achieve successfully in X,XXX financial for system that, on to the With objectives. guidance, the fiscal we our million true. Please managed up environment greater million. to be right note If challenges current considers million this $XXX operator, improves, of than is supply range thus fiscal and EBITDA be we currently is key the year the has chain radio expect for microwave supply chain questions. that the components. environment.

Operator

Instructions] the with question of ROTH from Scott first [Operator is Your line Searle Capital.

Scott Searle

the margin bit in Eric, product Networks. wondering color just I related to quickly there mix backhaul maybe any my good Thanks Hey, for also was questions. Private dive the financials. that’s well. on mobile taking you more gross between on And was if as and Networks, afternoon. weaker not the was little front, little headwinds. had a color. software, the sure a some a but to mix related component bit surprising, component I if of Private of wondering given of I’m quarter, availability

was I So wondering kind you give an if us how of the could the idea parses that out about in quarter? impact

Eric Chang

Right.

our business of is So still us, high Networks our business. level X/X for Private about

quarter, a that throughout than level but on if freight. has say, quarter, more inflation few comes some and much consistent could it margin. revenue When a been component thing impacted that when that’s is our probably we gross points very for would we year. it was lower to challenge comes to also experiencing bit standpoint, wasn’t ago XXXX, I year also But higher So about it the right? it is a margin have. basis it gross other per the hand, than to we’re the One dollars the chain that supply fiscal in high XXX have parts million

Scott Searle

come and of who My do with some into you you’ve of this into that helpful. could have strength until Networks and in play I in year again, in end bit the quarter. there of of wondering that And to a RDOF is terms a some of are color really year. specifically, very some funding. working dive Broadband Private versus strong, RDOF little customers opportunities? maybe understanding in America, the little nice funding Very And Great. bit out with Rural very, you give announced doesn’t next if was North

of RDOF XXXX? future, benefit all So in we get now I the actually just if as want you’re calendar that, or to comes the into seeing that clarify

Pete Smith

just will getting – say the year the particularly would rural is – let’s say, next be, and funding going I effects calendar year. that calendar the Scott, RDOF

So calendar year. XXXX

we’re So poised.

exceptions engaged future customers appropriations then their the against bulk base. dispersed and and We’re is the systems that then There’s be not a base to of flowing. have really out with are customer but for of funding, figure progressing, to waiting funding couple borrowed us. the the the to But the where customer that’s and demand

Scott Searle

And European Europe. to history, something be just large But just you I opportunities there. stream, in been just sounds revenue with think some some quickly won. was take see the continues guys to it Are through mentioned It to Will marginalized? contributor shifting of could I way. that I hasn’t, about starting a it being Pete, the to you landscape Western Huawei contributor like particularly a if that Okay. you competitive become could, like, opportunity you share? that a us forward, avenue the wondering start larger going gain to as we more if and growth recent

Pete Smith

Yes.

– in So enough I to sales the out, would we articulated say Western joined, I we we EMEA that win. that working we’ve – our Europe Emergency Services we our message and starting region. around we before think year, getting have we’re didn’t funnel last spend the our win over Network highlighted the differentiation, And is on time because

funnel are supply So is that’s the – to that of we was Huawei the share issues, and mindset. gains Western of security And factor. with and wasn’t particularly kind network Europe, respect for and Huawei of hold EMEA seeing, starting an both RFP region operator grab our to Huawei But issues Europe, growing. the in a rest

are competitors also our looking of at probably Some that.

we the share. timing ready say to next being the new our hold are We’re question usually the because and to going to share. of the comes timing funnel inventory fair to hard timing. until we’re But this. think forced about I building, it’s kind going have And their that difficult say, predict what difficult win is bit the they’re to operators win network into we’re Huawei to And is see to And excited is design. on opportunity little they a We their about but excited. they’re think the

Scott Searle

been I of if the you. guys into conservative. fairly like, a bit. as I sounds think think, as shift have I start could, I It And you in expectations, EBITDA looking the look look lastly, which nice come think I back the terms your and But a think historically I to topline fiscal guidance, little is guidance. Got then above implies, I gross It’s at XXXX. mean, to consensus guide I margins

you gross if will, So you I quarters? give next plays in several how nice wondering Thanks your us out the thoughts, terms and could quarter. over was if of of margin kind the longer-range

Pete Smith

Thanks, Scott.

of I So gross the think – margins, thick chip we’re the the still in expedites. freight

may hopeful that we component have what maybe margin gross is last first we the levers And bit we’re offset on supply. and software and have to the starts than of year OpEx So half. back lower then we little we a think And to the be some of the headwinds half moderate. year achieved in

And our Our else. is shipments we – true. end, time low supply a don’t guidance get chips, guidance then we than we’ll if making Look, – is like the because everybody exceed hard better look, the environment on we guidance, is thought. could if we converse the have

So approach dig fast there we But more we the we’re about do to we turn business than if with you’ll comfortable, that that supply were the available. backlog – up towards XX-K, you our share is know high a demand right our gains if we what with guidance, end of X%. think what environment try take our to respect And and through given our the could is now. it is what better That’s guidance. see balanced knowing guidance

Scott Searle

much. so Thanks Great.

Operator

from next Riley. Kang Your question with is of Dave line the B.

Dave Kang

clarification. question My a Thank you. Good first afternoon. is actually

So you bps was chain far as the maybe as XXX and approximately margins on a million few I dollars. supply said believe impact

the Now quarter? was it fiscal or for fourth XXXX fiscal

Eric Chang

Yes.

$X for in margin shipped have gross or we generally not probably was when million it more said chain or we to in the I the quarter. million basis if was that’s So on for the XXXX, XXX fiscal constraint. $X talking fourth revenue, point supply impact could

Dave Kang

the how fiscal wondering the you’ve much factored just outlook? then in And it. XXXX for of Got impact

Eric Chang

we… think I So

Pete Smith

that, break me Eric. Let

If number, $XXX supply million know right? the not to we it we – I above, – to that. unconstrained don’t but go the starts we’re then if to want tell $XXX better, our gave would we is Dave, number but to million, going disclose unconstrained you it’s because look, So do

So…

Dave Kang

Got it. Right.

Okay. are to supply pondering? are they My and Cisco something costs. like that offset raising next question folks, some guys higher is prices Is other you

Pete Smith

No.

We’re it. doing

Dave Kang

it. doing are You

Okay.

Pete Smith

the look question, So challenges Scott’s have firm through – hope to price to is it’s part get hard half why we in answer half, of and backlog orders. to but on some back front the or because the raise

So freight do you that are have going instantaneous. fees to forward. And and nearly the chip expedite

So there is catch environment on hope our if Where we’d catch-up a fees, is there’s to So and more worsened. is expedite be wrong the lag, right? up. shortages more the

from ramp-up So – what’s challenges are behind expedite to pursuing an the inflationary half the margin or the offset to second is freight the in we gross and price that first half we’re a under. our through

Dave Kang

And it. going talked will OpenRAN about then differentiated you Got the a competitive forward? landscape product alter highly portfolio. How

Pete Smith

to we does competitors And have – on the the OpenRAN allows compete we specialist a question. great playing a it think that’s Yes, products. level field. best

microwave when better and are So We network hold. RAN can’t right? OpenRAN wait to not we we think the a opportunity, have bundled, the take for

Dave Kang

next years And something could out? that of Or year? will happen when think that Is a maybe it you is be? that do couple like

Pete Smith

I out think or it’s two so. years

Dave Kang

think It like should year first seems – and is third How was is kind the quarter but of I it’s last September then my last we quarter? sequentially. that seasonality, about know seasonality March quarter, what Got fiscal the up question it. quarter? always about for fiscal the the it And weak,

Eric Chang

a business, big revenue we’re them with A Dave, and a Dave, It’s So period. right? of seasonality. we sometimes than long-term of to to predict for that we kind lot a in over year tend difficult nature, have basically fulfill contracts are more one year, project-based

seasonality. difficult it’s predict to So

Pete Smith

but October based, we pronounced seasonality So business, really flat seasonality, that then project here’s year, in really government say some in a that of terms when the projects that, effect second quarter, that little is Last is are is had don’t think So And it would bit about we December as funding. favorability in Eric about of quarter-to-quarter – the happens most is the other the right? And project we driven it huge there our some what the what’s the part, said. flavor, to right? think we end come – than basis. year of and revenue variation by is

Dave Kang

you. Thank it. Got

Operator

Capital question Tim is line next from with Markets. Your the Northland of Savageaux

Tim Savageaux

good questions A afternoon. couple here. Hi, of

at well the our the estimates revenues just wonder could a to upside, if you particular talk of reported fiscal there, I U.S.-based. QX, or drive as your quarter, First, Private in and to that here about couple And look both with seemingly any stronger-than-expected have you carrier-focused guide the either Network as I mostly And drivers as for year? follow-ups.

Pete Smith

Yes.

network network Broadband So was strong. state the was Tim, and the We strong. one private business had takeaway – Rural business was

Tim Savageaux

Sorry about that.

have quarter, your than revisit. does that from conclude or Okay. sooner about I the of the should magnitude commentary material businesses expected? Well, I we on something upside $X more mean, kind broadband Considering not material the why is of in getting it have the that was this discussion so might Given every the rural quarter? quarter, million. you

Pete Smith

Tim that, so about closer. causing getting thresholds materiality but Yes, it will. to closer getting some it’s It’s

Tim Savageaux

talk little that, for business. material XXXX? a wonder your it’s maybe fiscal on given that and think Okay. carrier wins the could of could side follow be mentioned I growth driver if on Huawei-related you you’ve I APAC couple commentary, like up out did more from and a But sounds that about a you of, been not. suspiciously other how which countries shut I

Pete Smith

ownership. the those because to cost total But, designs, AXC competitor. and valued to regions want doing And growth, multi-band multi-band our going competitors. works of where our versus at and been is think of our you cost won, one against we’ve to on year a on And, last value proposition our, will, it’s that pick spectrum think, any the if half products. we our competition. we in our I I Well, is contribute don’t what all that solution high of over more And we Is competing won really, helpful?

Tim Savageaux

you fiscal what any in was give mentioned fiscal fiscal you In as level, And of last digit the as at you growth single in year some XXXX. think which we Private U.S. Western the again, general, U.S. U.S. network consider at XX% you currently? exceeded in Absolutely. on handily look mid obviously plus as you a kind growth XXXX. as well, terms of international idea look I how versus That Europe, in feel those you and in of driven, side, was us pretty starting growth XXXX Can wins about right?

Pete Smith

was XXXX, turning Yes, was so in, coming we on business are decline want point we continue longer year. XXXX, the in right. where fiscal international grew And, decline. the that, hope we a And in in to we’re into fiscal we it no year

So value have as in business just up we year international X% and eases, that think thing our and the be us commercial the, that. to environment proposition I I the XXXX. our focused important more win, the supply able has most of our is allowing that’s And to we’ll team growth. if look differentiation. for more And, post think on share constraints the And didn’t better. sign fiscal have, if is the didn’t doing we But over we’d team grew supply

our prospects. about good So we feel international

Tim Savageaux

it Okay, thanks on. I’ll very much. pass

Pete Smith

Thanks.

Operator

line Needham. with the question of Alex next from Your is Henderson

Alex Henderson

Thanks.

areas. particularly, areas be talking at going Latin a can they, those that deliver basis, in was seem being what in they particularly, it they with And America Is the and Huawei. interested was you’re where that Africa Africa? of their some later advanced to global actually, a as actually the politics that are shifted you pushed competition you relative there focus particularly out be some Africa was had geographies a you the out are focus in about or to the bit is that on said what Huawei of think not win incumbent differentiated where seeing, Huawei, little seeing wins economies, somebody sense into about more conditions it where play has of at they’re And I receiving So Or My well? date. excised and that was generally while else? who in less to and

Pete Smith

more so taken we’ve I the answer America, say versus Huawei. that. let commentary share Africa more do don’t my Huawei on I those believe at any and competitive geopolitical historical from Huawei see So one that for in of overall, Huawei accounts wins open be in So, independent geopolitical operators would starting to me to related was least Huawei, bid? we’re more impacts that the Latin their Africa. about of putting we’re and know I meetings best up

Alex Henderson

really seeing historically some the evidence has to that But differentially the as up pressure I of more everybody is America, hope So more are everybody and there question than more price. Europe about is, possible you willing is to gets to aggressive are Huawei aggression? are get the everything for – and question that any pressure, areas the and abandoned Africa subsidies, put that bid as pressure, guess the lowest challenged politically In more case? like Latin of like price other also more and geographies, under clearly,

Pete Smith

to suffered, Huawei deconvolute in particularly I so would would got security Africa, supply. long or much here, pressure? is due the I Aviat And less network Aviat that Yes, I say say price impact driven and the is look what can’t before I that, –

kind when but deliver. really, price of, it’s simply, can’t quite it’s lower to drive So hard really you

once concern we released. we getting we’re then have, think There’s security regions about have wouldn’t that are will this. might and supply the the return, favor if our might supply and come you next we opportunities networks was lot get be, the back So a dialogue, of even the that they that pressure price think will question before gotten constraints politics stick in, wouldn’t

Alex Henderson

chips. the so it? with are vendors? ball to any they’ve get side, change able be with far Or you to behind a in been competitive Have versus On of the compete chip the effectively they’re and on able that new evidence outsource chip to, that eight seen they U.S. market any basis a in-sourcing chip on Huawei’s not that,

Pete Smith

Yes, probably this insight don’t – anyone so so more have else than we we on any call.

the their chip and think the is they or for microwave Huawei network we So emphasize seen haven’t the RAN. going I to focus when on, abstract, this going about to in

have Huawei supply, their fix to insight. we can specific we more have technology, prioritization, any will, time that a their So think, on but we theoretical don’t or semiconductor before access

Alex Henderson

million in expensive. at chip piece, as heard as gets many XX it bucks I’ve they place XX a have programs different

you is about parts Going of back supply one breadth for any that to or trajectory? side loosening the talk whether it, has Can challenges? it second. been there or Is it the or all it Is two of a of the parts? supply tightening

Pete Smith

right. All

in the last is is go So this way this a of it’s kind most that of that of to going to those game times I our say of and, I say, would a seen speculation XX would time-to-time components, but components months. haven’t we’ve change sophisticated away? up encouraging – look, out whack-a-mole, I from it’s pushed when different the game two lead aspect the is would

first the there or the would that of that to be And industry to some positive we’re the our most is of – the know going past will appear say start being peak lead some requests we’re that, when really yet. So are be get in times But of lead brought we not I will difficulty stability. the sign take is the sign fulfilled. we expedite as stabilizing. for times are to

Alex Henderson

Good to encouraging. That’s hear.

I’ll the Thanks floor. Okay, leave

Operator

comes question of O’Neill next with Research. Theodore from Your the Litchfield line

Theodore O’Neill

congratulations Hey, the good quarter. on

Pete Smith

Theo. Thanks,

Theodore O’Neill

What Yes, region nicely is year who look and around? Middle in talk so rebounded okay you just XXXX. and the for that the Can East Africa in about? would drove turn revenue I

Pete Smith

principally That was right.

on multi-band run combine So play that’s less talk that of and about And, with a expensive our high-value and run our network high the a on ownership, resonating that’s microwave, basically costs. start operators, and operator right, when traffic to them, of cost lot spectrum allows value band. total multi-band their regions we to we the we the traffic grow Africa helping low And the in again. talk their to radio are us, radio African and

Theodore O’Neill

Okay.

give Store. I Store. don’t some that’s could directional question the is can, But – you how Aviat going? any the about Next Aviat on you if and going think us disclosed volume can of sort you’ve guidance you through

Pete Smith

Tim is think, the said I it close. alluding to what is, we is start gets that what so that, kind we’ve past will in XX%. Yes, of consider to, when we’re And breaking was this getting to out it

revenue, closer So, three getting and now XX%. of and were closer we’re we X% years ago, to

we about point. this much give to as size the color store on want of at that’s as the So,

Theodore O’Neill

in Okay, store? the that that’s is how managed? encouraging. Do And hold that inventory you

Pete Smith

inventory out store. ship in own possible. the the inventory, We And, though do store the it get hold quickly demand, as store, we and we when we as

of kind way that’s the store works. the So

Theodore O’Neill

Yes, at, of expect store. sort you looking of you taken them contracts and managing but as to terms must them put you the be where, be with I off, it, must mean, the in in

So time? is it just of sort in

Pete Smith

So, of then just our in allotment a in normal and short, then we’re current just in supply to the in environment, it’s times. time and we if supply, time, convert we it’s lead when environment, have

Theodore O’Neill

much. very Thanks Okay.

Pete Smith

you. Thank

Operator

Instructions] turn over closing [Operator this And time. in to you remarks. questions call no for are at further queue there I’ll back the

Pete Smith

Thanks.

thanks, fiscal we else a So electronic for XXXX. and our look in guidance microwave hope We days. we everyone. forward relief, doing and are everyone joining; We on Good for is we’re XX chain. to was team and the supply fourth the good that Thanks, to industry. chain you best. think supply best semiconductors it work quarter, challenged delivering our in like talking uses everybody year The components; with

Operator

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

You may now disconnect.

Aviat Networks (AVNW) 26 Aug 212021 Q4 Earnings call transcript