LITE - Earnings call transcript Q1 2021

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Operator

[00:00:03] Is everyone and welcome to the momentum, first quarter fiscal year 2021 earnings call. [00:00:09] All participants will be in a listen only mode. Please note today's event is being recorded. At this time, I'd like to turn the conference call over to Jim Fanucchi of Darrow Associates. Sir. ahead. go Please

Jim Fanucchi

operator. you, the momentum. [XX:XX:XX] Welcome Thank to

call. quarter the Fanucchi Jim year, momentum earnings fiscal XXXX This from its relations. is investor First with Dero Associates assisting

long our could during our June targets. for ended the XX Tinku company's Twenty year cause twenty momentums call warbly in that in and we quarter The have continuing risk the the position from Joining future file will based today to Chief impact this the include expectations covid-XX later Today's including expectations. and of Financial regarding statements operate this Coldren, are statements, guidance are Executive revenues company's reasonable our actual twenty and strategy twenty, beliefs technology, uncertainties Alan on The our and These Chris September report twenty. such company looking on our expected Ali customers, of and from XXth and fiscal Lowe, the statements ended which today and Transend our and forward to on fiscal our and markets vice management markets. Officer: Form results financial provided the looking in Wajid as too, our statements president from particularly financial in there, expects XXk twenty well momentums regarding our regard. call filings, opportunity differ team, including markets, senior forward call for SEC Officer, for products as and responsive term to and uncertainty factors the actions expectations, statements Chief and our development. business which quarterly market including materially margin we subject risks current and our described the model president corporate in performance,

prepared considered www.youtube.com and projections these applicable unless in XXXX discussed law. with financials at the stated, non-cash accordance all supplemental to as Please undertakes results on and As or statements Dotcom Investor obligation website Financials results otherwise with for and are superior gap are Gap a call update press today, non of note, to a first substitute additional gap slides the financial also under momentum to doget. except as results. be quarter in no are details its this required non-GAAP about reconciliation Section by and our release and includes available measures between our historical accompanying momentums not

the Now over to for I Alan turn comments. will call his

Alan Lowe

I business couple everyone. like before and anyone of covid-XX we [XX:XX:XX] financial from providing results benefit a discussing the brought will our around digital points significant people Thank accelerating. transformation morning, Jim. tragically lose to sight and make globe. strong the you, we broader would my Good and commentary the by don't has to is health We of recognize that well-being covid-XX challenges want millions to economic be of

all are thoughts Our those with affected. of

role important continue Our these day. an on thoughts and the their selflessly proud care lines helps the every first difference education infrastructure challenging their who also times. people a during make critical life that am momentum in that professionals responders the work, and safely I are health their with front plays

margin on and record non-GAAP comments financial We achieved margin, we business per about the earnings my results. started note. share. XX to on our In Now quarter, and fiscal strong first gross a operating

financial our business percent margin achieved XX and percent. we first excess time, gross the strength above and in resilience performance demonstrates margin and of the XX model. of This For operating

this We into positive continue to expect the second quarter. momentum

industry is adamantium driving ever towards long future say, I'm I our truly and opportunities As we've very is often as dynamics and pleased favorable. the as progress results as goals. excited The As trends world ahead. I are am the with the which bright, invest in leadership about our and entertainment, accelerating [XX:XX:XX] intend need term and strategic market positive long drive education, made work, strengthen term care, health to R&D for and positions. our increasing approaches trends social strongly commerce, shift in these interaction We to and its all to technology. address increasingly virtual our to digital differentiated products market

revenue half quarter was First upper our in guidance the range. of

Our the was guidance the different contemplated in to throughout revenue mix than our had we changes quarter.

offset, sales through for year. low and and and Eisho lines we're laser anticipated telecom and three still conservative DCO quarter, datacom revenue product printing percent divested increased excluding quarter. year. year accelerated modules sales growth datacom cents on The XD revenue this margin on more components, down strong largest and transmission. improved percent sales We Indian percent coherent products and XD grew revenue year phosphide the was Telecom percent but and have contributor Our transmission last telecom or modulators discontinued. XXX commercial the based including from demand five sales, year, than our for lower gig modem to sequentially sensing Strength, telecom two and of sequentially assumptions than year from XX modules XXX grew on gig had four we and

and was modems percent During the more we highlighting new quarter, customer saw in telecom were contention than high, NBN new pushouts quarter the increasing to XX orders. a shift to this first systems. customer our on However, quarter some technology [XX:XX:XX]

of output. to in inventory than guidance. revenue working customer our the impacting exceeded supply. new deployments assumed we reductions our contributed however, demand ability new telecom lower forecasts to He's due we management. We timing telecom key Uncertain expand to are in addition covid-XX hard to in to products, saw customer And also

During products, position. progress leadership new further a the on of telecom we our lot first strengthening made quarter,

Deseo side, on the transmission side. modules transports we began the our On transmission sampling XXX

NBN globally. enable proliferate customers in extended to with six the continuous datacom, technologies, sequentially. by chip a road to and and continued l We generation high quarter court continued and seabourne trends systems Prior percent next sales versions count C,

with market chips for data for forecasts term lower in customer centers. near projected demand strength demand continued have by seen biji leading We a offset a in shift

our have for plans adjusted start accordingly. way We

Our capacity. data and work demand continues backlog outstrip conscious with our very for remains robust to that

customers long aggressively expectations. end, [XX:XX:XX] to To lead looking capacity demonstrated second the needs wafer term new our based we front, and on As have are product energy for we expand their our Pam, with trends transceivers. on to such, continuing closely On applications datacom XXX this e-mails the demand recently above such future working are gig High-Performance and four for quarter. we

revenue We our assumptions. from guidance with expect quarter driven and in than by strongest datacom growth generation. and consumer coming was to strongly quarter sequentially in next telecom be telecom on up and higher the Rhythm's grew significantly industrial transport growth revenues

hundreds five year per position put one an to in approximately in ago, Our have shipped shipping millions Since half of cents dollars, public company in us revenue. in unmatched market. records of and a independent we years became experience the three we continues leadership a billion

to cycle. larger this significant over product addressable XD per is in we consumer increase believe continue a device. to opportunity due have This the You printing content

shipping now to second are the quarter. We looking

revenue industrial quarter. flat to to expect on and be We quarter up modestly consumer

We and consumer are there's the content. three at reality customers virtual in share We new We and progress new potential in features, XG, for continue to make which opportunities. augmented optimistic computational shifts to a could about there's market on level, including for years by good Further, photography. cents in believe addition cycle to our driven upgrade strong and coming believe a Android. potential demand increasing quarters us beneficial be very we [XX:XX:XX] on

our are ahead. looking approach further Android we projections covid-XX in even to and conservative However, factors to a taking revenue near the term geopolitical

other imaging, create with opportunity as our new roadmaps aligned We X-D to product X-D higher to to have increase Enable enable density other components. technologies larger well cameras unique include consumer higher lasers integration technology of and to the produce performance multi-year and devices. customers. screen consumer These mobile as our within under electronics arrays increase

We consumer are in planting on beyond focused growth for markets seeds also electronics.

consumer competitive pursue and qualification broad invaluable in In and a experience a important have applications opportunities these applications. outside and us as we lasers XD products to our long of automobile cabinet to advantage we across of believe used initial printing partner, emerging We quarter, module expect unmatched consumer term an electronics. completed the We ABC deployments in past this victories be for automotive capabilities gives photonic leading other markets. industry have electronics the

are be one will could high big into or arrays applications. deploy time. our in several largest and sampling vehicle mile applications the suppliers that over solar these the next now last We years. four mile opportunities According broader with addition, powered [XX:XX:XX] auto also to are our of light, for last sampling main develop wider we tier our opportunities customers, automobile one major also In qualification

are access progress and in markets. We security control making

shipping already are facial kiosks. in volume payment recognition We on for

enable are These also contactless touchless to and and security access access engaged public as are We security providers concerns. we due to control looking applications who to, with sensing, high safety control. systems accelerating are health of or

XX a mix. decline quarter, percent, on Turning our this we our than was to customer commercial quarter revenue lasers, to of is given China. larger related assumed weakness This had guidance in outside manufacturing decline decline,

twenty product quarter back laser will we twenty levels new to shipping flat customer fiscal engines the get front, quarters believe to lasers we second be fiber platform. expect our now to their on in several for be We We lead kilowatt latest it modestly. XX newest saw our that to before revenue are the

one Sales and focused some revenue. further XX world peekaboo our most our the provide innovators than to our to second with in very restrictions. year. less have quarter innovative regulatory that of impacting the photonics quarter, by the were with guidance wholely Additionally, declined for AX total regulatory we [XX:XX:XX] we restrictions on given an decline the the announced sales recognized proud community what could color award to that percent in August. want being In first I are this the business of due recently laser were always products contemplates was company

to position have each such thank want of our modeling great expect for personal a you are as and especially They we their less been technology put currently having the working ones in so the incredible, challenges, quarter own to of leadership. This and sales watch a purposes, second and who well percent times. all world. product in quarterly with is working have the handing as acknowledge before living than over site employees I these our be to give pandemic. Beyond financially, to They through us the five walkway to around it numbers. it, sales the

communities our to momentum goals, employees. society and important In addition to very our to to our contributing business local and is

standard and it asset. continued of committed employees, highest discrimination these to all are over promoting to inclusive and from shareholders free includes partnership suppliers our safe, company's of you customers, thank are and greatest and their and challenging workplaces the Thank would environmental conduct they hand harassment. We Again. social, the during that, to ethical This diverse I times. for With our and like to Wajid. absolutely I'll also responsibility. support

Wajid Ali

[XX:XX:XX] Thank everyone. morning, you, Alan. Good

was sequentially was first numbers, for nine was gap. one Turning which million, four was Operating the XX point was the income revenue percent XX percent Gross one margin first to five and year and percent gas the quarter on XXX per share margin forty quarter net quarter's year. diluted cents. first up point five point percent for twenty net

model. XXX synergies, First up points in year margin year. was acquisition on record quarter we year sequential and non-cash mix gross basis on financial points XXX improvement and driven demonstrates made in and margin performance was the have Allen The this was growth our improvements by sequentially up gross an highlighted, XX year which percent, as product basis

First non-cash quarter totaled improvements on basis were basis percent eighty year. with non-GAAP approximately operating seven points margin million by seven were of Improvements points point three revenue. or year operating made XXX periods percent, at and flat, margin operating sequentially as expenses expenses XXX the comparable thirty point gross two increased eighteen

continue six little five a expense was show to other point covid-XX rates reducing lower than R&D expenses million. expenses. due to Aschiana normal Operating was eight and trade run thirty expense million. travel point nine be forty

XX are [XX:XX:XX] two Other First term and a being dollar short quarter and point count This seventy income portfolio. and overall on of was investments other on net sequentially million eight interest our nine XXXXXX in fourteen share per nine based net lower income are of and a point includes income million. diluted income rates interest conservative tax share investment is Non-cash, million. of fully thirty cash diluted as down our net point we two two was one and expense. hundred

lead generation one Strong term with sheet, Now, short to accounts the one investments, in cash balance turning to our XX billion receivable the cash we quarter should in ended quarter. stronger point even growth quarter the million quarter in an up the during on and first sixty quarter. second

XXX billion notes Of have one point convertible expense XXXX. no per approximately cash associated these six and notes, The aggregate debt. interest due zero is point in dollars convertible in million term billion We XXXX is is notes in these five due one total five million principal year. and with

cash are as positioned with a well of strong interest long maturity and financially financing. well levels low We model, expense, high as margin

details, higher at sequentially growth million to our optical related to to telecom chip product twenty to revenue a point datacom, revenue to Turning growth segment five Improve and increased communications in due telecom and percent communications increased XD increased to product quarter revenue particularly chip first seven [XX:XX:XX] datacom XXX datacom percent revenue, percent on three point five margins and and point communications basis sensing datacom. increase year XXX Year-on-year sequentially with strong optical due in points segment due basis due points to and segment nine in mix more telecom seasonality business optical due segment, mix. fifty higher a acquisition favorable to better year synergies. and XXX at margin gross due two

leaders decreased percent manufacturing five million, percent XX the significant forty nine Our gross margin twenty decreased first year quarter, three Lazar's in to reduction XX year point and point to on at revenue three due percent volumes. segment sequentially

second our nine XX, of are quarter for on on the basis we the is Now are on please assumptions. guidance and providing note to based outlook gas a our fiscal

to be quarter the of tax be XX expect new being and technology few margin of range in model, of million, [XX:XX:XX] an approximate also on million an be wrapping XXXX dollar of expense being projection of invest sequentially, on expenses, about net to on R&D of for quarter to forth we our a to might of an other products well it flat to increasing estimated the of quarter. million. to operating XX range like second percent XX to diluted range gross slide model we Before helpful comments as and includes we to well. modestly earnings telecom income ninety. million. net of second a point as margin XXX we in and fiscal dollar financial an to zero financial projections XX These Acquaro, share up, XX income the XXX to a of range As share quarter refer Lazar's in percent. margin and important modestly, operating five million estimated as to When be a the on deck today, count industrial website and flat the our XX as following the increase revenue I'd XX in to an put make percent target Based for acquisition XX this, in to points of with operating announced a in due datacom and up per range incorporate seventy up the This and we primarily revenue consumer quarter and quarter increase commercial. to project

XX For quarter time the product from fiscal the months quarter first We further we of in target over exceeded operating mix this due improvements continue the and XX, end twenty of grow leverage. we to of end trailing of model. fiscal efficiency the believe first will to to margins the

annual this increasing are such, target mid-term model. As now financial we in our

year. due XX margin fiscal Our target to to impacting the annual percent as start the XD back half to current new gross Westerway regulatory second Q&A percent. Jim? fiscal up We the on don't for the I'll Jim operating the and target call sales XX that, With sensing increases targets these to turn session. moves of exceed to to well restrictions margin our expect seasonality, year as annual to

Jim Fanucchi

[XX:XX:XX] Thank you, Wajid.

session, Before of Operator, get begin question operator allotted before to the to follow over to answer one us let's and would to ask to the our the everyone call the answer help and end keep start time. turning and that up like to should question the session. I everyone question one

Operator

may a gentlemen, question, to one. star and [XX:XX:XX] will the session and answer you question we Ladies ask press and begin now then

your you question. pressing using before pick a we then question, star a you If To forget up may you keys. to do that as handset the your press and one star ask and are speakerphone, withdraw to please a

strategy from Our today JP CIMIC ahead your comes first Please with from question Morgan. go question.

Samik Chatterjee

[XX:XX:XX] thanks Thank for want Alan, morning, with telecom the to good you. taking question. start group. Hey, my I just

we're two the demand more telecom CNR the how of into and three a share to follow it talked on given Worryin that lot is about. seeing a a and a focused is thoughts think of last months I And wondering I like are changes you of Bouchard's kind you. then it broad over Is sustainable bit about key have if or more the Thank kind geography up. customers can details delays you what's to based? driving the go particular

Alan Lowe

still some you covid some the [XX:XX:XX] think in at say deployments talked We've I quarter. in mean, pretty you I and that this per so the schedule, happening the fiscal field and we about quarter. to Sure, not confident datacom seen growth, our script, [XX:XX:XX] were increasing globe in QX, have and to out second the deploy we this networks. telecom mostly but these expecting guidance get actually in if due into telecom looked growth fiscal know, I'd expecting growth slowdown, as probably due we're higher we'll original but ability across we're to,

Samik Chatterjee

be likely the driving like the looked geography's [XX:XX:XX] delays, So on anything XX. it what's more it on is to

Alan Lowe

cloud mostly our for demand, datacom hyperscale [XX:XX:XX] up delays I centers. well, that taken by is chips the in data did for we script as but China, said as the Well, demand deployment, strong XG demand in easily in we some in see

our that wafer in in business the center some in slower I'd shift And delay to deployments XG But more saw starts had in. say higher our the inside speed we've the data is area deployments to so that towards datacom we applications. one expected than our

Samik Chatterjee

group up, can the [XX:XX:XX] consumer had guidance sounded you to a last gaining December the and in bit you being front flat on assumptions quarter but your XD where the that December I'm just of new syncing to revenues, about for to industrial to anything's when modestly on wondering the concerned think share if that more changed and in or Ok, are you're I follow guiding what relative market I to if kind relation quarter? peak

Alan Lowe

fiscal as to in than expected Yeah, [XX:XX:XX] we our We've had and said, throughout guided in came haul. and, demand flat QX, up. slightly a you strong expect know, than stronger stronger very August October we had

Now, quarter positive. far, how December we little think I that could looks that in would earlier. so typically one into the on depending our consumed change year customers the be maybe that of one expect that everything the lead roll successful that's may a is thing quarter. But March to this perhaps different dynamic the some [XX:XX:XX] launches. be do So contemplated that demand wasn't

Operator

next Sachs, Goldman Hall together from with your question. [XX:XX:XX] question Our from Rod comes

Rod Hall

weeks. Yeah, wanted just for question, order the few earnings the here in trajectory orders thanks I [XX:XX:XX] the on last off guys. here. with Nice recently job start to trajectory the

if been I last pretty lead That's all have call Now And change any the follow up. in customer that XD have couple seen the constant sensing of weeks. new the you trajectories phones or. have or I guys wonder let's him a launched.

Alan Lowe

we've through front of loaded But, throughout carry know, and so, carried guidance now strong to through balance a doesn't that quarter. the end and and could that. September mean, you the contemplate I quarter more August you of demand our seen [XX:XX:XX] Well, it's October, know, it

share. good competitor we share you'd So ask doesn't the position have think customer us I'd and he our say to numbers a we're far market I our because give as as doesn't tell [XX:XX:XX] in have. what

and abided have contractual that we're they a at minimum, being obligation that's confident We that abide by. certainly a by fairly

Rod Hall

and And you just what's give the could us check then fab adding datacom, wanted more capacity capacity you to I [XX:XX:XX] on any more fab there? ask data of on idea just specifically you when if Ok, comes much thanks proportionately? idea on how kind capacity that. us and with Can give Are that capacity. of some situation for going

Alan Lowe

does me more cycle buy in datacom to capacity We're might on months. XX call. [XX:XX:XX] correct wafers Chris, than Yes, to chunks he to over double our have come for expecting this and wafer XX the [XX:XX:XX] me in is a said time the quarter. next you It

five to G like I we time the that see to said from So data center, over. script, as in a move takes shift

So so that say revenue double short on that, term, offset to would we we're But some consume would have our you You Netflix. price and more I can know, that say constrained now that and a expectations that. years on you chips. of waiver. the be mind, over in time have what two to bigger probably chips center they are demand in data Keep we that to [XX:XX:XX] from newer from some some I'd those know, twice of estate go plenty could consume in volume? to the. going with we some real are where producing of of are the today the we're offsetting reductions there's island newer see

would newer, in out are doubling that be issue So doubling as not the not per. more talked of of it be larger may I up units, it newer but but chips it actually gig be chips wafers may there, about XXX

Rod Hall

when Ok, can't big of on. you next the [XX:XX:XX] but chunk say capacity comes

Alan Lowe

year, say up you know, we'll you next getting [XX:XX:XX] see know, Last some we Oh, would six I percent. capacity. middle grew perhaps, incremental of we're of quarter probably, step

of installed know, But calendar of You through incremental a and to the step advantage half second continue able of to yields going get improvement capacity I'd be take to would of some middle productivity. the we're say year see probably up next to year.

Operator

from Alex ahead Needham and your go Co. comes question. question from next with Our [XX:XX:XX] Please Henderson

Alexander Henderson

[XX:XX:XX] hear OK? Great, you thank me you. Can

Alan Lowe

thanks. Alex, Yes, [XX:XX:XX]

Alexander Henderson

stuff. assume very you than understand, to obviously I know, I Western Biem, that lower more Perfect. the do, speed Wiley. [XX:XX:XX] side to Wiley, that's in accounts as wanted into of good go tends and business, the would more performance I the of rhythm

of So to to of sales could about demand at given in case isn't this you're So rate at wondering of little timing if the timing there, as the what you of down somewhat would least strength that which looking aspect temporarily? I slow it. you're be demand there, it deployments, the appreciate chassy tied growth talk what a very, chassy extent, was capacity, Thank very I bit in you capacity, that around and know, would you. adding helpful. slower

Alan Lowe

[XX:XX:XX] at rest said the Sure, think the and seeing was that the was the look And I today meaningful we of I as of in say start very leading following high the court as but a world past, way. that count rest the world we're way, China the and in deploying I him.

so counting our for will months. and I'd the I say six nine that ads dramatically court non that That's over high the in business next expect take the XX are way months. buy to adding grow And capacity. we

online in that happened made capacity adding calendar quarter. are now. the today we coming first decisions the Those are So

continue add world you know, capacity to this expecting in XX. mainstream to puts their year in, into of deployed the get we're as and later systems So to these calendar the rest

Alexander Henderson

whether first next [XX:XX:XX] of capacity half those the planning you're calibration ads Can us size the for, step next give the on any you say, and of year?

Alan Lowe

first we of probably NBN are but not at next that's online we you XX know, the meaningful year to at you a I'd come said, going as in coming mean, railway I our customers say think online, look what point. the quarter, half percent big our have Well, grew last starting coming if I that chunk on NBN more this really [XX:XX:XX] this expectation quarter. to That's have [XX:XX:XX] non deployment. was that

Operator

OMalley ahead from go question. your [XX:XX:XX] Our from with Please next comes Tom question Barclays.

Tom O'Malley

[XX:XX:XX] question Good the guys, you outcome? Communications. My Could and talk congrats the the margins. my first gross driving about nice really what's results. morning, on on is strong

mix that product and up you range. larger mentioned times, rolling your term of that I customer a You also from couple on, long but assume

telecom it more can break margins? know, margins? customers, move contribution you just core in and And core in you real that better as there chips? So the you gross gains some also is the of the some is kind datacom for towards what real but gains Is business out, the

Wajid Ali

[XX:XX:XX] synergies of overall expect have the year this we see, year continue strong We've it Time to financial your quarters reasons margins then I'll that year for to of as one half again. haven't our over And you for margins, take very we fiscal Chris had talked our are I, as obviously model gross it, with business and and an added That we know, mix. by model, Lazar's have quarter. the expect on about datacom will running a term because follow our that To up, and term driven one that the have can to into rate number we back Alan long that also fiscal healthy. six strong question of be watch percent to on assumes quite XXXX. were our product chip the And, is weak term that accumulation into said exceed of long all up for those long a move and gross back then business added fiscal model, increasing are lines was business the improve the well. really quarter business, to chip run the the largest comes up model normal and starts at and a product

appreciate, uptake, a really few coming about giving Alan back XD quarters. XX and especially get what's to to have continuing an business, margin helping sensing that in company. new chips is model, next And being margins products over improvement achieve XD gross improve datacom, really going. having the lasers our to confidence success real we in the with term gross so And our that to sensing, percent just be able continuing Long all that's OPCON talked overall into us the in that's you to starting us expect and as can capacity

Alexander Henderson

but [XX:XX:XX] the guys follow are you then push related that that the some is there and saw there hyperscale you up? that was on expected were strength? my or that seeing pick the is product, datacom really that you business, Where strength up And in front ups on That's five up, mentioned something mentioned some business. that something in recently was you hall you

Chris Coldren

regulation [XX:XX:XX] you slowdown Hey, And deployments, least and China initially. the about is five in what's around geopolitical in know, business. we've ecosystem is know, those related. a backlog you customers, as in the our know, we've and so at by seen of he's affected in from imagine, in in given China Tom, of If he talked on you this five and concentrated is prior time XG can had, is datacom the quarters, we've is, G regime Paul on as quarters going yes, But, from you multiple Chris, wall.

a transceiver from XXX more business XXX, needed more of surprise our tends strong going XXX that big data as that And think within those go as chips into to increase in winning very well in a relative to is and the hyperscale So not i.e. you that's our we supply position customers XXX, customers cloud to XX centers. speeds in competitive to increase. customer operators, XXX, a I as into for our performance type as both footprint combination there's a demand the not in datacom, our of

Operator

ahead [XX:XX:XX] Marchetti Our Please question. from John go comes from Stifel. next question your with

John Marchetti

products as wanted outlook. the understanding as to half Thanks from they on know, on maybe based because much full can't you I very you some year. of to that of of the, touch of declining ship gave you are lack an full How to bit is overall access materials. other wanted of [XX:XX:XX] both know, to restrictions versus, always is just reduced much. the for the a outlook bore get well you second that allowed get of little for the that demand railway December the I their quarter actual the really what

Alan Lowe

[XX:XX:XX] of I'd datacom and you look it's one demand strong for what combination products. at to and continue right, telecom say of into products when a our both, cannot ship. some know, of still those all we ship there's way, we you There's

than know, majority XX most few based like on of percent due greater the [XX:XX:XX] from to restrictions. I'd in reduction that is ago to and say little a consumer And five you percent, customer down that less a demand. products. going is bit the I'd below XX the quarters than And, percent a of on today, say regulatory so being

John Marchetti

XX up back margin sort expect if quarter. did follow a maybe some think the comments, forty gross this? we You of about of that rate. [XX:XX:XX] half of or dollar of a outlook Should your you then off and upside we laser billion business know, sort what to this be. of getting How can much quarterly upper to XXs run Ok, and if there that mid three even I sort on into

Wajid Ali

above I Well, [XX:XX:XX] percent where dollars had seven thirty margins. mean, for QX, we gross in were fiscal Lazar's, XX we quarter million a

some in we business latest so above And within our lasers, are itself achieving know, mix have, expected you gross of our with different products, well be the margins. But margin products to better new that. the

the nice a range. XX Lazar's. into a should gross And so, We bump into percent margin nice gets million XX you dollar know, for see that XX or line the back

Operator

with question. [XX:XX:XX] Simon next And question from go our James. your Lippold Raymond Please from comes

Simon Leopold

for taking Thanks the questions. [XX:XX:XX]

percent that do just is to this way the below key to than us does that the understand get percent. you five wanted the why some way not that percent. to that a level help also allow XX But business better the five with could understanding I number. what I rules a positive understand, you are quarter, sales with in you know outlook of which the and we value zero, of the First, issues aspects we certainly getting the less of Thanks. eventually zero then below talked about in

Alan Lowe

wanted overall become TBD our point. still the one in of And try more and for ones that the going to to restrictions business our the ones get not is but which some [XX:XX:XX] buy, down products the to less and with go is than future a just fiscal to business. and you the zero of down than year. continue into guide we're at whether details half color expectations around even it's we percent, and that's Yeah, in meaningful our which and becoming at second to less not our the quarter time, are to know, percent, not to a say, below layaway And [XX:XX:XX] to other this half business material we restrictions, going get or four five to

Simon Leopold

quarter. just don't a beyond [XX:XX:XX] understanding And to then guide you want

you're I September the think time then it it's some at get comparison. December, we if you've couple odd least on shifted issues the a about. around would could whiteway we March quarter just be helpful creating got this going sensing a everyone to to qualitative talked things from XD that year aspects seasonality in And tougher where you've got of

business, bit seasonality XX China how versus less Could seasonality. help little a usually affects understand years? you prior may in us be maybe calendar different So which about your

Alan Lowe

percent well Wall can Well, as the where I the and I'd five our if to you I can know, where by they that, the jump been, eight be at result a in to China September quarter, that. as take is and Way. out were look you have impacted we're March think them say quarter, business just in at think our [XX:XX:XX] in a take they of you and of where expecting Chris restrictions say revenue And June

Things that's going know, know, as our you to is are you expectation so, And that's far things are current that's But And, things XD going range. Who tomorrow. change broad probably as change. sensing to concerned. knows? a

very You conservative on on taken Android. know, we've a approach

will are given some you on. answer expectations really your the that them. normally the their of for the there first there mainstream of the our March if they when phones X-D are XG we're So than for half more or And to questions our with is line. that I'd customer, us working is many put To that sure say product they input [XX:XX:XX] although be say small sensing know, in launch I'd in customers sensing expectations quarter, strength that year, very the into tell our decide don't they in of next to don't our make later

Operator

Stanley. Adam Morgan comes Marshall next from from question Our [XX:XX:XX] Please go with your question.

Meta Marshall

thanks. All [XX:XX:XX] right,

timelines. get to in are as is And just vendors? general from you to kind a four coming sense optical China about terms know, bit maybe cabin. out business second, any broadening the a winds of maybe of Wall you then just you wanted seeing talked or a a of other little of of, bit, We Just Thanks. restricted auto maybe demand Way you lot thinking out down little back know, know, of, kind be of in should opportunity just you cabin and that

Alan Lowe

I'd cycle there's the that, answer auto take responses Chris that's I that, that nervous don't [XX:XX:XX] time, but activity say let I'll before we around want there's that a way, carriers natural. quarter want thing that that one. the again, multiple carriers layaway. the into to that that's billing deployments. think Sure, meaning relying I'd to rely traditional wall, probably say on been [XX:XX:XX] and have on takes And turn that

So I there's think I slowdown think in it's bandwidth happening. don't a demand.

networks so going going to to is bandwidth are need and continue to be And to grow. to need built to continue

for it's of now term trend So us. new that's I pocket share our those to if customers, that, deployments three four between other It's or I'd say of positive a you the you two quarters. know, long a at matter of just air actually and happening. look think wallet

Meta Marshall

I just on overall the rather terms more share, just global shares, kind just This mean, following right quickly, real China there? than but terms taking there understanding specific in of selling of up of in what's may [XX:XX:XX] to place be just it kind or that of ZTE

Alan Lowe

quarters over end several strength our we've know, really, consuming end seen way, you high Well, rodenas, coherent and high nonwar consuming modules. transmission customers the last [XX:XX:XX] and components China in

the to don't restrictions products from and we're growth those know our over you horizon. results that mid-term customers, being state or So and result I no of of that's short and see time if leading edge, know, continue the art a wily of the going to

question next you. a all from of question Our Chris, was there comes about

Chris Coldren

[XX:XX:XX] Yeah, yeah.

that of markets. long the have where in to the the monitoring content smaller a the So in the move laser long you start relatively opportunities starting bit multiple XX, over and we really with for, XX, really past Even markets are time, leading But term know, qualified believe, the you in playing those to out up. cabin applications. to, plant order penetration even know, or is system highlighted million calendar quarter, opportunities But these taking I to take XX installed and because these today, don't We level. the out a our see as become, the systems. up get time the know, really in seeds cabin product you go, vehicles, Europe really definitely in case off the enable into regulations know, And we is to to dollar ramp XX relative i.e., require outside in to the you what's eventually Tier design They in automobiles laser we get in at XXX module of designed highlight for opportunities cabin you into be vehicles, it to as that's a ways, is, model for in all enables designed that is qualified and timeframe. know, way we've level critical and both higher. need light call, you we probably to we're in traction ultimately are at as They well systems. believe have, opportunity what in autonomous systems and that to of had activity to one low. car that be integrators the cabins, on and know, level cabin cabin and manufacturers. then, sensor is driver today, happening. level module might the in driver multi supplying auto And is is the are And in outside what assistance dollar wanted parliament these Alan for in

Operator

Jefferies. Naughton comes George from question Please [XX:XX:XX] The next your with question. from ahead go

George Notter

sell those you I is inventory talk to how maybe shift something that parts? sell you're lead wanted the question, you know, new. at parts into this much. in I the three over you obviously customer customer most know, ask your there about large is very they your March, Alan, some to see stock, Can to were are know, thanks of by inventory as cycle, just And new consumption you customer? into guys, think, brand out. Hi, shipping all referencing versus you dissenting build Thanks. [XX:XX:XX] you or that is new that an what safety shipping desire customer you're about Is there there

Alan Lowe

[XX:XX:XX] have to chip know, visibility lot when beyond we inventory You devices of module the a consumer voxel integrator. really a of and don't the ship is George, we modules into what

on through on that So we it's the so me changed, which sorry, give that say, in only demand, going able kind shift And something our I'm [XX:XX:XX] of saw that's level. to like. though, color of not can looks tell what's upticks demand. quarter customer that on to provide that's will what a you the Haitians know, in would a the that ton be on I customers whether responded at or. share you or inventory color I

George Notter

typically to outstanding [XX:XX:XX] guys linearity, recent in calculation was what low it? you a That's the end I characterize Thanks was one lot. loaded last the OK, that's helpful. How then one front And relative sales quarters. that would day linnear. noticed quarter reported you pretty Was

Alan Lowe

on here think. it news, I [XX:XX:XX] Watch

Wajid Ali

have sometimes, but button, an overall shifts was linearity, each them. on our Cordoba's quarters previous in DSOs, one come and depending linearity, with terms just they'll the in terms first impact along [XX:XX:XX] the I'm payment weeks profitability fiscal of own UN can our on processing of you terms And then expecting And what of we're at and of or given significantly to the quarter. the versus better. type the achieved during flow just fiscal see on we've with works. you cash new the to quarter, customers QX, either our of in weeks QX that depending of of at be couple the similar are can And pretty sorry, their and their the pay end the of batch couple how of quarter within last know,

good So from all be standpoint. cash flow a

Operator

[XX:XX:XX] Anada with Leupp ahead In question comes your from our question. from through go next Please Capital.

Ananda Baruah

good for question. thanks Hey, the and on the morning, Congrats results guys. taking [XX:XX:XX]

that to worldwide two I of make ones And does I quarters that some as comments up. sort that for quick a pocket or of about quick could, of of their kind two that specific the Just follow to remark? then if warming me, have is four a is the

Alan Lowe

outside customers. a to Yeah, today traditionally don't where know, what that's ball, other And I'd China our of say for are based Chinese before mean, into us have is China. probably carriers I there but [XX:XX:XX] that's activity comment you for It while suppliers. of quarters crystal I manufacturing was that, network around. for my that kind It's revenue three of [XX:XX:XX] two was outside activity and turns equipment revenue looking

Ananda Baruah

the capacity new in the term, meaningful besides long there does quick regard helpful. to on are margin? includes give long sort and really is gross term follow that's up a does. just And model, you that extent gross capacity this context what any play around other you To Obviously, factors the And utilization That's Max [XX:XX:XX] then quarter. margins, utilization got of the a with role? margins, what to

Wajid Ali

from well. improving margin Yeah, seeing it's and so additional to going the not datacom gross more capacity but talked one, helping the with about our is yields products. Alan help to we're that as And supply bit to us capacity that's that quite start and demand obviously a utilization, productivity [XX:XX:XX] from I'll fact standpoint. And a meet get just for

to as acting noted is again know, one our is thing You our really the we earlier I'll corporate model. overall laser that note headwind a

telecom with it, new as our or got business, telecom Ofcom or we've opportunities XD new tailwinds products Our business has datacom there. our has in transport very telecom with business sensing whether and transmission as strong it's segment well

lasers an revenue million capacity bump margins. we I our fabs own products revenue had I'm We EPS within the QX. standpoint nice utilization as in come gross Glaeser's from earlier dollars should So thirty and see up XX out overall improves, above pointed up. for seven that back fiscal percent laser of

consolidate that's obviously margin And the to utilization, because of helping gross which profile, improve really Lazar's company. our overall helps so us capacity

pretty big it. a does of so part So it play

Operator

question. from ahead Susquehanna. next Our from your go Rolland with [XX:XX:XX] comes Please question Chris

Christopher Rolland

your of wondering proposed terms But, go you your you forward. and on the you know, quarter acquisition just of, kind perhaps. and yeah, higher on I might thoughts whether know, what get And, if of for you could tie your there company the you outlook how the what and optical. or integration means whether to My and and my alone appropriate that first for was with changes strategy might level. kind going [XX:XX:XX] Thanks for it question be execute forever, was think and well. I'll congrats vertical EnVie just it in level thoughts another as now high I alone, this question Marvell up in for you echo also can your

Chris Coldren

Chris, [XX:XX:XX] this Yeah. Hey, Chris. is

say, I a focused know, compete remain the ICEE So, seen. supplier, company the as was by a whether merchant semiconductor network less for on our least they providing, will you view picked another that was we up means at still equipment will to that manufacturer as that clear the with you future. That on the inci be be to, really is will fact opposed that think where on they know, remains may modules the by

change very think I the our overall, necessarily this that much from doesn't one. in landscape standpoint, So

I opposed you and in whether differentiation. happens something be or the deals we inside with example, fabulous and where us fabulous Acacia forward Marvell purchasing we're to have not telecom where market becomes longer that you buying company probably know, were with phosphide on our if do And, think change that other for them, prosper and, as in confident that industry, very, to been that run. ability you components. we our in for development from a our organic see products over if being in leading the know, we by know, not very to, know, really Indian not enable the a from from opposed You or that, I choose to mean, when is That's industry from big you what it company. out semi to from buying for as semi And compete there. another our acquired a Cisco

Christopher Rolland

just then any And [XX:XX:XX] around things changes a couple bill book that. times other in you or to I offer know or like don't housekeeping, if a capacity lead perhaps for Thank details utilization. you

Alan Lowe

customers some don't And that, [XX:XX:XX] constrained. so such come beyond time our a and will we're year Yeah, that customers we long we be our demand one highlight, typically you know, this over chip And XXX typically give with on gig and much lead some orders some lead similarly. very bills of time but or side, know, strong that's are a of of and time, for that period with [XX:XX:XX] don't modulators lot that constrained doesn't to something XXX, long because placing of backlog ah, book are, capacity our there's to BMI in like capacity unless to prepared our is, it you Indian do large in and really agreements purchase in backlog mean advance. that's

you where our strengthening guidance you contemplates, what's the bill and going to kind type the I'd with backlog. book normal know, it run And But so of fluctuates of say board. that, demand know, is across mill that on of

Operator

[XX:XX:XX] capital your Tim Korean from question. In with comes our next go from ahead North question Salvio Please markets.

Timothy Savageaux

declines, perspective where on I [XX:XX:XX] the the further Hi, the in wanted this at quarter and declines telecom here more anticipated to particular, good given notable, his expect even Huawei. and to results. from it focus maybe congrats datacom on morning growth be in looks you

that at increase, get to confirm So, you out. to ROADM just I already you of when primary percentage driver sequential and you've that think expand. what I maybe going comments as look kind Midpines growth, you're know, to but effectively the called of the want your

question I driving that broadly know, You OEMs. and more increased be diversification his globally among met what might he if Chinese about commented customer I other But wonder seeing earlier strength. on traction

of pretty Nokia, strong some last optical So out example, for results week.

them, what from So OEM is I and diversification about question standpoint that an sequential growth for guess seeing globally. the kind drivers overall guide of you're

Alan Lowe

it strong Those seeing Yeah, know, we're demand to most end our we'll XXX teenagers. components lot and big of I with probably are roads, the of, an as that. not from growth [XX:XX:XX] coming to shift where That's on speed, those chips adding said and high you gig the coherent like huge growth we two hyperscale. you said meaning so strength the our and higher so of see the areas, area from capacity is in know, relatives areas modems will meet modulators between from [XX:XX:XX] the it. probably pass it's datacom XG trying and a repairs to we're, also Christian, two of XXX and that that because And our coming

Chris Coldren

per ability obviously And And four, down where catching softened. last be growth from with is, is the into standpoint are No, across That's are know, long six, a go if mean, Tim, think systems our OEMs key I gig a XXX, in whereas under components the of that. have there. we're [XX:XX:XX] that the disruption you why transport product our products the you supply. will, diversification caused of they new pandemic, preparing, those really, whether systems, is back, you there's year. systems in grown and being eight I kind a lot next gag, newest OEM say the pre the high driven tooth late the if pandemic, we've up where came generation or standpoint, Rodent's out XXX from know, point, then we've have end We're and not really, coherent been going for you

pretty we're we're So covered. well

for what we thing the customer that start what initially highlighted with started NBN is we're set well speed you across new individual something adding customers. in XXX I is same doesn't like the customers, a as sets. roadmap in components proliferated We when Providing products across though, design broader per we're the set a DCO mean those our as broader lead now new then growing coherent say. our happening I the customer, you're ish and proliferate modules. customer and one typically know, something where a broader think in, gig, that anticipate customers as developing those XXX in products are script, think necessarily seeing, of we're And is high your China

Operator

But [XX:XX:XX] and ladies gentlemen.

Alan Lowe

XX quarter, think the so that. customer happening [XX:XX:XX] continue [XX:XX:XX] see is Jamie, to percent investigation and go We had customers last I ahead. So, we'll one only

Operator

additional and question. with [XX:XX:XX] your for we This And gentlemen, Davidson. comes from question. ahead Diffely go Tom one from ladies D.A. have time question do Please

Tom Diffely

[XX:XX:XX] Yes, good morning.

on Just and sensitive. the world the is one view componentry? What really question So. margin of value your the final pricing facing relative between differences standard or

Alan Lowe

this say where peace expectation difference cycle much a of product to you of Not able is and front and the at all both a on know, that, of curves yield really on up is and pricing. quite [XX:XX:XX] not the facing refresher the we've chips. kind this been come And chips productivity strongly and world resets

wouldn't I wafer that area a percent. per say or So meaningful difference in revenue margin there's

Tom Diffely

for Thank it That's Great. you. me. [XX:XX:XX]

Alan Lowe

[XX:XX:XX] Tom. Thanks,

Operator

answer ladies session. and with like any we'll to Snoopy's to that, gentlemen, And I'd today's turn [XX:XX:XX] the and over back end conference question for call Kim closing remarks.

Jim Fanucchi

we report quarter attending fiscal call like our We good forward with again today. [XX:XX:XX] conclude for everyone look we you Thank to a you, second Have thank results. operator. when the talking does day. for to This and XX would

Operator

and conclude ladies we thank And [XX:XX:XX] for will that conference, do today's attending. gentlemen, you

lines. disconnect now may You your

Lumentum (LITE) 2 Nov 202021 Q1 Earnings call transcript