Viavi Solutions (VIAV) 11 Aug 202020 Q4 Earnings call transcript

Company Profile

Participants

Bill Ong	IR
Oleg Khaykin	President and CEO
Amar Maletira	EVP and CFO
John Marchetti	Stifel Nicolaus
Samik Chatterjee	JP Morgan
Alex Henderson	Needham & Company
Michael Genovese	MKM Partners
Tim Savageaux	Northland Capital
Meta Marshall	Morgan Stanley
Richard Shannon	Craig-Hallum Capital

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Viavi Solutions' Fourth Quarter and Fiscal Year-End 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Bill Ong, Head of Investor Relations. you. Thank ahead. go Please

Bill Ong

Welcome Earnings Solutions' Bill Call. Relations. of Mike. fiscal Ong, quarter year-end Investor XXXX My to you, fourth Viavi and Head Thank name is

today. CEO; call call recent that results filings. this to include and statements forward-looking described company's Khaykin, also Joining no statements. expectations are are Viavi update preliminary Please actual these the will cause we except that and our all earnings note and to undertakes are are available most about results report guidance and review performance. including financials to during you discuss of on this site. Maletira, CFO. obligation We today's President Please provide we non-GAAP We GAAP on encourage me earnings reconcile uncertainties and in Viavi's revenue call slides usefulness financial supplemental and statements, statements from results The to filings, state unless current non-GAAP. release. financial subject Amar otherwise, which includes could SEC differ note our risks as valid Web estimations. their factors tables our these historical Oleg today's These particularly The are our release, in annual and risk materially the limitations plus to forward-looking only those

and the the on available Amar. recording turn call make to by Pacific we'll like today's site. Web our evening recording I Time over PM are this we would Finally, call to X.XX now

Amar Maletira

X.X% our business. the impact growth to business Bill. driven profits and in saw profit, Thank COVID-XX. sequentially, despite NSE revenue in increased operating due Fiscal sequential XX.X%, seasonal growth our while by QX you, Revenue grew a to operating

was and million declined $X.XX While fiscal profit points, by X.X%, X.X% at from XX.X%, year-on-year, X% $XX.X a margin year-ago. a revenue EPS or at expanded at grew basis up penny million at XXX operating operating QX $XXX.X

segment, revenue offset NSE, business to a revenue instruments results our partially grew this our declined while Within from million moving pandemic-related $XXX.X million $XXX.X to XX.X% QX starting XG-related sequentially in NE wireless at NSE at with was and lab growth due declines products, year-on-year. by in Now, field our by products. reported year-ago, X.X% NSE; X.X% declined

XX.X% NSE, instruments. However, products. grew volumes driven both points sequentially, performance SE XX.X%, datacenter NE lab, grew our margin products enterprise demand in our margin to lower at growth basis stabilizing well assurance primarily XX.X% XXX decreased at at in primarily field growth XXX gross due by led our to points and decreased revenue year-on-year. basis in our year-on-year, revenue as revenue wireless sequentially year-on-year, products, in strong by NSE million, increased with combined and Within with NE gross providers. $XX.X XX.X% field service XX% as instrument

disciplined expenses expense gross XXX XX.X% XX% SE due volume XX.X% from to from driven lower increased mix management, fringe at XXX due year-on-year margin margin However, operating datacenter travel, in reduction higher by revenue basis expenses, benefits. efficiency to and our and NSE's at operating and points products. points commissions, in largely a a basis programs, year-ago, variable ongoing expanded favorable

due year-on-year, margin year-on-year expenses. volume XD XXX improved revenue. increased sensing XXX basis on basis QX. relatively to at OSP a demand shifted our turning offset year-on-year some due Gross $XX.X our points as the This Operating million XX% XX.X% decreased in revenue, partially at result primarily QX, margin in at fixed anti-counterfeiting sequentially revenue Now, revenue OSP was lower and fiscal OSP; to expected lower XX.X% declined to operating growth as into XX.X% efficiencies. fiscal by of points

in to our management. modestly growth million XXX grew efficiency combined at in initiatives by our decrease result OpEx primarily revenue year-on-year, XX.X% our EPS $XX.X manufacturing, $X.XX note $X.XX points Day fiscal Please Operating OSP. slight Analyst year with operating to Viavi's September Viavi's fiscal at contemplated our Analyst XXXX driven revenue, of guidance a year-on-year, partially billion X.X% margin the year-on-year. guidance from range had profit the expanded in fiscal high-end at pandemic. increasing driven a Day small or of from for $X.XX the expansion a impact X.X%, basis the of XXXX the as September disciplined COVID-XX million our Now $XXX.X impact pandemic X.X% a by by second-half $X.XX. offset NSE gross on margin that our at increased year-ago, not business performance, reached XXXX moving XXXX to despite $X.X by performance, grew X and of

foreign our the ending of sheet, $XX.X $XXX of at QX, entity. to Viavi million was short-term total to from average million $XX.XX at cost basis $XX.X cash withholding Now Day $X.X share during million of the approximately $XX.X flow million, includes our per the balance basis Analyst XXXX buyback the of payment repatriate we Viavi stock we stock cash event, Of cost to-date commissions. cash fiscal September repurchased investments including cash announced tax operating and share, was which repurchased authorized an $XX.XX. an $XXX balance average one-time have million U.S. In our for quarter turning to of million,

share continue to in We repurchase. opportunistic our be

our plus fiscal XX.X% to between EPS to guidance, the $X.XX. Viavi XXXX XX.X%, to quarter $XX to $X.XX we range operating first minus for to or Now margin be in revenue $XXX and on approximately million, of be expect million

million, at with expect NSE or plus $XXX revenue million X%. minus We be margin minus approximately to X.X% or plus operating $XX

operating be at minus with plus OSP or X%. million, million approximately to expect XX% $XX margin $X or plus minus revenue We

XX% XX%. expense is expected rate to approximately be to tax Our

expense count We to Oleg. turn We to expect expenses I other income With reflect that, share million. $X.X million will the a approximately call net and to estimate our be XXX of shares. over approximately

Oleg Khaykin

instruments down The the by year-on-year although in stabilization demand segment sequentially partially from service that business benefiting was orders percentage line record and increase year-ago, for sequentially wireless the and growing from our expectations. initial within seasonal revenue XD by customer equipment. by improved Thank their of deals field products. as both the you, of revenue revenue improvement driven generation next improved sequentially, providers was NE double-digit a was for out seasonal QX in OSP. with SE grew resumed and and anti-counterfeiting lab down operations. both results OSP, closed NSE demand revenue driven In difficulty] strong stabilization signs sequentially both were and demand offset the year-on-year, in strength Amar. products, Field in XG and Fiscal enterprise by by QX. and from pushed sequentially, some and in decline assurance QX sensing in [technical continued saw of strength wireless by helped by datacenter that helped expected

revenue the Looking halves, by six-month back year is at profits, three a was non-GAAP fiscal driven XXXX, where record first-half tale our areas. by of product characterized operating growth it two and a major

strong to revenue, was XG revenue and revenue In achieve In sensing XD increased a disruption however QX, we than revenues expect Despite combined impacted revenue and we execution, record for driven fiscal an expect notwithstanding, COVID-XX OSP grow XXXX, printing by solid fiscal in in second-half our level, year-on-year. reprint through to Wireless sensing by levels. to our grew NSE, in record QX, annual resume. we pandemic. wireless fiscal our by in QX that, NSE increased helped in by products finished more demand fiber grew with and the year-ago portfolio Pandemic XD June managed The equipment, and volumes be as banknote and heavily OSP, in down by from XX% which XXXX lab currency redesign increase quarter. led anti-counterfeiting seasonally from operations profitability

recover expect to NSE in ahead, XXXX. we calendar Looking

their strengthen XD to OSP, year customers stay conclusion, these multitude and to we I extraordinary by over and of the Viavi drivers strong fiscal Overall, Bill. in sensing. continue higher and wireless, I secular all growth long-term the our growth revenue challenging our driven continued to along like appreciation partners, will and employees, wish I turn intact, during call safe our throughout performance to across times. expect to achieve chain we For healthy. to levels our a expect profitability. XG my in In team XD also sensing now of express to anti-counterfeiting fiber shareholders world, with supply remain and for stimulus the would

Bill Ong

you, question-and-answer Mike, begin Oleg. session. one limit Thank follow-up. to discussion the let's We one everyone question to ask and

Operator

comes Instructions] from Your Stifel. [Operator John question first from Marchetti

John Marchetti

next just you came take globally, Oleg, could wondering and seeing minute you're sort like a different growth Thanks least this markets in very quarter of out the discuss all of at of the it geographies even, what if looks I sequentially calendar to much. was you just curious, expect North the contribute next I from you was quarter start into as over these looking the American and how here? some you're to different for market. year

Oleg Khaykin

Sure.

mean I I So, businesses. the I first different would if about go by geography, say, I'll maybe before talk

engineers protocols, I anything the no by to Obviously, throughout be major So, internal various pretty seeing facilities, same labs they with our way, thing our engineering work. healthy interruption, to implemented internal pandemic. to and we're are all continue the production continue strong look most operate manufacturing lab if our engineering safety all and at our our operations and with and with do also as pretty say but to and own operate we continue would labs, labs I manufacturing includes customers. back the at much It

but continue segments to So, facilities you to is everything the longer, equipment they're only ship quarantined, expect customer, a remotely. have thing I and mean say cannot to from quite the you I to were win to appeal we would their design good, them you do is the fine. have conversion to enter cycle those because two do the little because

OSP, operators the normal need I challenges, facing they the work-from-home lot new do, of all actually environment, they're of the field governmental of the been we were of towards reassessing flow end and continues QX takes time, it but and the together is QX of weakness it's that as more kind of field more and of them pretty gradually, field, of what positive very printed. have lot and found for QX of a in bit and they are QX, not it summer, of different because in kind given seeing their been in operators, of So, more to case where the to quarters do printer business the through to area be will In the most with the think, plethora to throughout saw saw strong. operations, their the and largely stabilization business back we a The and so the the be and we've but technicians the lot of our act currencies one instrumentation shutdown, come. things got send of operations disruption a

of lot So, inventories a of depleted, inventories been the channel of the depleted. whatever lot of and the in a notes finished were materials have raw

next I coming in So, coming it as business and with demand expect the performance products this will see anti-counterfeiting would starting for that above a running to XD for think such, unit. of combined record our several kind strong demand I we very OSP -- which quarters, to average, quarter, be fairly sensing be a the quarters lead for our

So, NSE OSP respect, of business our unit business we in units. think faced almost in to the challenges is countercyclical that I some

welcome So, there. that's outlook a

Asia-Pacific In of brunt coronavirus. I of kind initial the say terms the of would geographies, saw

is well. continued Since engineering, end in the kept of region, So, Asia-Pacific a have there it We in initial that its heavily influencer the but stumbles of mean demand terms the although obviously a that pretty also big that converting customers. March, environment, recovered, obviously America and of and worst decline Europe and there, currency -- is May, design to the was is POs summer. challenge had a I resiliency, and shutdown and production mostly during February. South work to presented surprisingly for is wins the challenges of mineshaft. manufacturing significant saw takes bit devaluation all was America, the of impacted facilities recover starting and things and pretty lab of Europe also of much throughout the January obviously COVID-related, April, COVID the continues Latin in a is most through be in pretty the operations but region some still that's kind to some there; One then, but given really of but crisis, stabilize a remote challenges been even canary and driven number North longer, only good.

have have business, South been us, most regions small America of and geographically, luckily Now, for really I a Central and it's would combination if very I'd part of say but the our challenges. impacted been that COVID say nevertheless, economic by

color different as regional as product So, well hopefully, the on some lines. business that you gives

John Marchetti

fixed ask line, I'm in if costs wondering can performance for variable just this significant even much. NSE, some margin strong high-end And can take in discuss sequential if a margins if very a just obviously Amar, you particularly Thanks for the quarter I very decline. on there, operating guidance the versus the we fairly of follow-up, that the

could fixed what variable about than we versus business? in achieve maybe just NSE little margin sort and perspective to Thanks. bit that So, if consistently you a maybe for talk that need operating more cost, from revenue of a XX% a

Amar Maletira

Yes.

good here. a question thanks question, for So, asking the

earnings sort variable, mentioned call, fixed of the fixed XX% in cost. So, mix is I last XX% as to the variable of

to variable fixed a we So, of mix have costs. very good

explain decline did remarks. the did we I'll in the the sequentially, So, explain sequential my year-on-year and prepared go I down, here. OpEx see

happened $X.X So, to is OpEx QX, three ongoing April, our and of are operational from efficiency we a May to and number and from fiscal down disciplined two QX three no fiscal dollars less did travel variable between and number that. expenses sequentially, the reduction travel; we benefit related things: in about is is very those to million June, results management, went programs, one

We savings, we went healthcare down, say, home, hospitals benefits visiting working some benefited as in not doctors of, from and they're or case costs in fringe geographies, are are some people frequently. self-insured, from also payroll

cost came So, our healthcare down.

in small couple countries. of payroll some one-time of advantage We some as also benefits took we saw benefits

of it or have characterize lifted. sequential so the I come I variable restrictions expenses. reduction really of ongoing are million lower if efficiency, of stick, is We work-from-home and that one-third as, reduction, that would So, say, to that should something say, is $X.X is travel back will two-thirds

operating of the expenses Now, our XX% of be XX% revenue. in range we expect all in all, to to

I should be modeling. should think you that what be

additional are For fiscal we in, is one week. have QX, which also the quarter current we

XX% as So, we'll it's I of payroll so OpEx think you about for least additional between so, one and XX%, long-term, QX, more quarter, but high-end should to that week at our XX% XX% of a revenue. have XX-week fiscal model fiscal the of be expenses, towards range, but should to

John Marchetti

much. very Thanks

Oleg Khaykin

Thank you.

Operator

Your next from question from comes JP Morgan. Chatterjee Samik

Samik Chatterjee

Hi. taking question. Thanks for my

longer-term of that return did $XXX the long in that overall or back for anything level the to revenue, in return limited just first-half the I definitely on of to help of off, Oleg, impact me the previous kind you kind ask from of of with terms that starting year, your million peaks think Just about of I the even would field that in business maybe wanted slower here seeing? the fiscal to the field -- COVID. when see you work, run get recovery to to to ability work technicians the in we visibility impact like technicians kind you any get but in look do at you're

Oleg Khaykin

Well, kind cycle the depending bit stable little be fairly in in little I -- -- think deployments a on the field lower. the a of could instrumentation some cases technology bit businesses higher, generally

have of and When interrupted and provide as home, very that that in companies in they to system one managers done. the fundamentally in thing to had fundamental that the fundamentally our lot environment, remotely through into like to of have providers, are the one lot done. I and whatever they not a there's a down, lot in when necessary, just chains networks, everybody person, POs put can need on you it's for and ordering lot number about found their right a a to only of got -- work lot it lock and them think offices. was of of it's -- flowing programs of get all a you'd multiple a easy absolutely the through or buying, a think really approvals hit from service and we were because lot is of building, catch broke work are people, the the and very PO triage, of companies' all and day hold, when the go them they surprisingly for down one Once was the took providers, a happen, much remotely takes work system headquarter-centric just account went were across lot and processes of I longer, to and email they optimized and a service a work still it the

laid turned several just companies basically these is from tracks a to demand be think by a all lagging. our that that thing, from we lessons is higher need and of them usually next and their road, done, think quarters that networks because burner, in all the quarters, CommScope, improvement once -- think to and a would the and on I -- need actually services really because on front a indicator see like faced, I when see That's to a significant mean, that's and degradation services the now network of the been that So us, uptick call all but challenges improvements fiber positive, going sense they or acute based I going and I demands several all the on from lot investment, leading issues three the Corning. least that's months talk in less the for get that's performance, fiber to and for everybody and lower what it's all mean, priority are a manifest lot customers the all network learned benefit so itself be in the you actually low projects used spend network I to putting and see the facing, a I in within they're down are service at and think I or the analyzing all last I fact, in what of

Samik Chatterjee

moving got also cycle. and Maybe just OSP a sensing ramping there positive it, to next outlook for on XD is anti-counterfeiting it. product Got you're business, sounds there on like the the

helpful OEMs more OEMs, of mean outlook you're well to me as if sensing drivers growth XXXX help opportunity XXXX, of for XD or guidance, the a think about would that Just thinking versus understand. how the be looking of for magnitude in improvement unit in some smartphone I fiscal but and fiscal thinking as kind content you're specific terms that with about the not to

Oleg Khaykin

Well, that a I heightened mentioned actually was out, just our we last it in lot of if matter a we I find demand was quarter I shut When of follow, time was distributed with a for we stimulus works the example, call until a it OSP, fact our think, right, a and was the down reprint there saw about currency we took look inventory. from thought. at around as and all world anti-counterfeitings, in it's volumes, going for the distributed longer all for programs than print were

you actually, a that's the in fairly inventory, think, I materials channel, So for and goods low low our result inventory products. have anti-counterfeiting very raw finished heightened in multi-quarter a now going to demand

for or on production, some overlay so. going the of the you If pretty anti-counterfeiting over next it, we should top redesign year notes strong see some demand of in

and the all is factories camera So lot the on say this bottom world date, a It's big is of now than and facing growth, absorption. the adoption. terms and a ASP and I'd story, first-half of better that's going function clearly On about that, be lagging. great how has more giving that's customary just in XD think I an like that's goodness I anti-counterfeiting being year sensing, to really the us to erosion our driver, Android it loading line. drives the because fiscal mean been introduced, Android things it's of of offsetting which really drives to good a boost, clearly but

reduce and pretty lot of burner economic the costs on tried Chinese but it's a models vendors to on the leading In to pack, fact, put and then the handsets. their the higher with out Huawei slowdown started them caused end good back

how applications -- think think have think Apple successfully They performs, I suffer I their facing world and don't innovation a be from it, which introduce really see designs and camera, leader, and and well to what just do lack how they look all with I imagination they they follow. technologies would in they they usually to watching launches and then will Apple be all already it of they case do this try to to done. what

up for overall things be follows Android uptick the and cameras later So, world I a to slightly XD into for does growth could in up. designed year clearly, If get Android phones the mean sensing. with the flat that the meaningful will facing if the not happen, think those

Samik Chatterjee

Okay, very helpful, thank you. Thanks a lot.

Operator

comes question next Needham. from Alex Your from Henderson

Alex Henderson

very you Thank much.

your you there what indication view go is that Tier the the us really number bundles, obvious into their as to key First was impact wanted potentially how might an and financial the outlook of risks ago? offset spending customers question, might I had your cutting. of cord that an acute with conditions we -- to any intention ask direction of moments need primary back-half. give X that the large the you skinny that Have of of of sighted conversations be your unemployed with as Obviously,

Oleg Khaykin

that's Obviously, the it's at. how good question. very I look thing Well, a

what lot other go are but things, to willing look seen not high-speed I a if at However, data. if we've go so people their far, of for

seen the to data of so number is So that home, they -- We've from bundles entertainment they be a their on the their speed upgrading I we've the cannot from pine packages able their just home. or speed, of could to in seen the opposite. high what TV customers terms work get bundles, but

internet work home. is performance better there them have from of they for from to work have bifurcation, their who from crowd, do there either a So, subsidies I or guess, work to have home is a a

consumers demand who or hour. out minutes complain service So a let's higher things for are and consuming that a much in goes just few don't to don't actually an say more complaints one resulted work, entertainment when used the

your of do customers service and and cannot obviously very you increased your has that's if internet and number The communicate of your with you down. irritated workers cannot complaints goes and However, business dramatically know, being lot and speed course heightened of of to access for there's the country. about communities you the data in heard, then, a the visibility lack rural and high a other

interest access more funding political level. broadband So at in the increased there's, again,

if I at business. lose in federal anything, subsidies actually, $XXX their those look it seems a access. week So lot customers. say high-speed demand their and what If our if so how in on, willing we seen, they forego their give actually manifest, look customers a we've to cable our at but don't people other and are seen or I before know mobile would increase so they've telecom of for it things data far up people phone subsidies

Alex Henderson

question that drive have obviously need the about hear was account cable type to and on the we're that other do your other of more speeds, now system symmetrical. significant and of video home and that companies needing not a I become commentary splits did around we not high the those they environments significant direction take for and it, companies splitting? into designed work Does with. faced download Second from conferencing as product

Oleg Khaykin

absolutely You're right.

actually the of nub problem. that the So, is

reset, awful some that seeing, network by but as we in lot generally you quick just consumers. is are In they they to periodically needs because down of capacity, and channels you on interference, a know, turning lot using of and they and fact, shut this that basically avoid lot be obviously a of causes networking in what give of dirty noisy and that problems and a more

conversation specs So, in so can is, efficiency, give more we've data altogether, needs out, obviously but and investment. bandwidth the do been having has ramifications have have flowing and to lot what -- more you architectural meanwhile, symmetric you and a capital of increase that better how significant the and spectral

of for So, actually a thinking into a that products our drive you demand deeper in fiber much our to splitting, already see now it, visibility about because network. no have are would greater you of number customers and

additional news really both XG actually even good for it's cable say some last give I'd to our the bandwidth the fiber of So ultimately products mile. edge for an and on our

Amar Maletira

testing new testing tools. hence totally Yes, procedures, new

Oleg Khaykin

That's right.

Alex Henderson

guys. Thanks,

Amar Maletira

Sure.

Operator

from Your Mehdi Susquehanna. question comes next Hosseini from

Unidentified Analyst

Hey Thanks for taking Mehdi. our for guys, Nick on is this call.

first OEMs for we of how guidance next channels? and other talking smartphone Just about about push versus off major maybe the that think second, and a thinking U.S. one into should some the about the plays when for OSP the out quarter, how based from

Amar Maletira

Sure.

a sensing Just here, specifically? Nick, XD clarify is on to this question

Unidentified Analyst

Yes, specifically XD, yes.

Amar Maletira

Yes.

So, mentioned earlier, let kind view, and as Oleg boil think, a QX you I basically give then to QX. me down of it and full-year

full-year, XD sort should XD by sensing that's out customer sensing, our the remains we customer. of flagship as robust. look today, For flattish that flagship believe too mainly we as driven be demand revenue slight of to growth, and The

than not on multiple one one In we are fact, skew, now and socket just one are more but we are skews socket. there and

facing. in as as facing well World are front we So

that perspective, have the gone volumes up. from So

at if you factor in should fiscal we a overall versus that, that growth perspective, from 'XX. revenue flagship least we from in fiscal So customer 'XX in, -- from see

has the can side, down kicking the adoption that think road. we the and other customers the quite side On actually Android on endemic, Android are the the been

happens slight customer's what quarters. to I So Android about next in should talked of That in increase. overall couple if the upside adoption result flattish basically to

So for slight should decline. on be be would XD our a fiscal flattish to what say QX, I from should revenue think -- and the basis, year-on-year sequentially significantly is up roughly I sensing

Unidentified Analyst

updated of first a about adopt as are to networking, an then, timeline off, enough. XXXG you. XXXG and how just the what touch we customers Fair Thank should first. just of sense think And long you going types the here, on as bit, little or shifting order

be Thanks. So great? any that comment on would

Amar Maletira

part first catch you didn't we the So said.

Oleg Khaykin

The first thing you asked.

Unidentified Analyst

XXXG on timeline updated on an the Just rollout…

Oleg Khaykin

XXXG.

XXX, so them. the and XXX XXXG XXXG very is today demand moved and mean, Okay, for a I so has I mean lab. is would say really, mean, no us right it's have instruments lab much longer more in more XX to and already field that field to in the I production production, opportunity. on XXXG I of now the our in we're more seeing increasingly,

now, So we data the already probably would bigger Metro in also, see main of think one center XXXG the of I happening say it's backbone kind opportunities is of there the where XXXG's is in center. I but data

XXXG today I'd So is the mainstream.

Unidentified Analyst

And that subsequently data the the then, are it's is telecom to move network, you bilaterally and center? we'll only in carriers with starting saying,

Oleg Khaykin

the started into it of and the metro. it's now kind out network, into well, the then, with Yes, as of telecom, moving and it the the core moved datacenter

Unidentified Analyst

days. So, early

Oleg Khaykin

into but next metro network, going copper say backplane, It's in yes, there opening days, four mean, up well. is data replaced and markets it's being backplane as as seeing to the center the it's we three, I for optical so early years us center. I'd get the the data and and probably with are deeper deeper it's what penetrated new

Unidentified Analyst

All thanks guys so right, great, much.

Oleg Khaykin

Sure. Thank you.

Operator

Your question Partners. Genovese from MKM Michael from comes next

Michael Genovese

thanks. I'm normal, historically I which high-end the want guess, on it about Hi, ask but NSE fairly maybe to of the declines. -- doesn't, historically seems I guidance, normal it

of comparison terms there against is outlook, I that What the in NSE to a was this that decline is in segments and what bigger just seeing the So ask quarter, of tougher book-to-bill? wanted the well? question -- as different SE in it are you just

Amar Maletira

the for Mike thanks question. so Yes,

more QX, guidance of fiscal get jump Oleg So, of here. let in NSE me can QX for a and color color and then, bit do here little on -- additional

digits high from quarter. So, fiscal fiscal to fiscal if typically revenue you look at goes QX. our down about historically, single going the QX in mid sequentially, NSE, to QX

fiscal goes new Europe and a you typically start we year, vacation. also, on know, As

factors down typically take the revenue sequentially. that two are those So

the comment, than said in Oleg guiding seen typical to we having NSE funnel we bit healthy, of our A mentioned lot in cheaper orders sequential have into to a conversion are in remote are a due of that, NSE, than is usual. QX, virtual his decline meetings restrictions. we So, in seeing the stabilizing longer earlier remains the that little funnel but travel taking that as sales meetings, demand little

here NSE given than terms would guidance in million if NSE operating now I guided, a outlook $XXX better being that bit we QX, our we we So leverage say of are in we the outlook business. the and conservative have say revenue the for in of do

impact EPS, the positive profit guidance. look that's good on our should and operating you I NSE but very think how at have we a

bit healthy, guiding yes, fiscal reason a a see why little typical steeper conversion decline are has and the QX. bit than the sequential remains longer, in funnel it is taking hence, So that's stabilized, you we little

Oleg Khaykin

networks you good just upgrading the last couple so X.X ago years The cable new far customers say some rollout years, September a so if last characterized two very and last major in a some Also, were it's bit compared X point and technology year and I of year. their DOCSIS of adoption, to DSL years ago, by this skewed compare. quarter

the terms the very somewhat maybe don't environment, adoption, see further this the in pandemic, of about new have which million is COVID pressured probably much up trend, but $XX I absence of million quarter. a by some happening it's I seasonal dip to not in QX technology to say there's in the more should we $XX as really of year was seasonal we apparent would mean, new in last So, seen that nothing years. X this so

Michael Genovese

me other possibility? that is for there still or just would a it, you diffusers question or the is is as the by sensing understand and that start you ability, and that any still out my supply And I is iOS of XD saying them the selling is Thanks update ecosystem filters issued not in into color. diffusers XXXX then, question that

Oleg Khaykin

a diffuser Well, say, be fit. generations we were it's I you they were we you to a kind the they for of or but RPC. they 'XX mean, opportunities 'XX XX, our let's or just should say may don't early for we on, going design in in them I their into models I think our really perfect 'XX the because I think couple startup. pass acquired the XX. great preferred would have on final be too see a technology. been have they year, in source, is to Needless -- weather to for be It next funnel to the Down calendar of were XXXX but type it's 'XX. decided do when opportunity mean, designed

believe a do as share Android both especially So and a of technology the a for has also in more flight, towards I to and think, us good our in world ecosystems. of the increase opportunity time -- iOS diffusion I more goes

Michael Genovese

Thanks guys, solid a and congrats execution. on

Amar Maletira

Thank you.

Oleg Khaykin

Mike. you, Thank

Operator

from Savageaux from comes Capital. Tim Your next Northland question

Tim Savageaux

field that Hi, good mean traffic million Oleg increased remainder really that ramp, side we you some an that, could beginning having pandemic that that you're of quarter. addition especially if wonder mentioned get what the the maybe through an mentioned the standing extent that you the translate the I on afternoon. in particular. wireless see into side. XX a indicators in and focus on to lab is to keep terms year, the fiscal I on to XXXX? any fiscal think given in you on impact Maybe of the leading previously, demand the field you NSE continued noted I strength instrument To that of some where XX or in on do in you're pick potentially something in the update you can the up

Oleg Khaykin

Sure.

certain don't question, is of of terms things training demand. is a people levels, to and for a have, pre-COVID there like first think is they nothing new catch pent-up demand be because providers up. only is, do think, reason to up going I the quarterly number catch is in and of that. even can much to Service the and I do so I has deployment a going kind will there recover a So difference and It's absorb your if believe our products makeup, at reality rate. to the only the there can fundamentally they be the that with

because it, field how they fairly qualifying it force given certifying, force involves receiving fixed consume just fundamentally it don't shifts. I volume any in basically mean, the do bunches think only they whole if and normally the skip they comes it's process pipeline what higher up not really field quarter, they does just distribution sooner, It it. thing a and them, in not quarter can just their just because So than to they I involves -- it training, also

In terms of the -- what was the second part?

Tim Savageaux

The wireless instrumentation…

Oleg Khaykin

guys much The XG wireless all than saying know the expected, all predicted. most and and playing deployment initially we instrumentation, be as along, rollout we've been it's slower as I out people will think you very

pretty It year deployed. extremely What gave getting networks we to XG we worked do toolkit. is field that calendar fully out So, next actually are develop where us year good wireless us. feel well meanwhile full the the for time it's

deployment, service traditionally doing, a which doing wireline more in resources of industrializing really has for has that training wireless, and no leading and commentary comprehensive we to our the as management have So type the type longer NAMs have and kind a and providers, forever bringing garage at deployment, we automated able cottage now out get a the else NAMs well one it and providers wireless trick been working meaningful I terms of actually company telecom been We bringing on been least be with all a ourselves. and our instruments with with toolkit service service a and everything, reaction carve should lot we of everything company them workflow feel to we get workflow, that aggressively from are of deployment to and a things familiarized the pony. cable as has share industry,

Amar Maletira

happens, pre-commercial it These is point, scale seeing that what be is I'm sell too. to commercial you're So at if hearing once maintenance calendar rollout, phenomena. we move rolling phase, the opportunity field Oleg's and XG rollouts, the add, groups again, the a which again now, I have sure was they an That's go mainly and our actually maintenance to out. deployed, into XXXX all and you're will instruments news Tim, where into are and in deployment just can real the most of

Operator

from question from Marshall comes Morgan next Your Stanley. Meta

Meta Marshall

been Great, they've couple Europe, more A maybe of of noted on questions, thanks. kind first you resilient.

progress face take having face meetings, more the I Tim's travel or been second, having of and wireless be kind side? question Just a kind answer kind guess I ultimately the kind more close building to sale Thanks. to question toolkit you resumption And as deployed. was think you mentioned in of your wired to on and wireless of without a just those to that for to of of whether sales? of time toolkit wondering just about, will whether apparent then that that's

Amar Maletira

Yes.

I one first the color take as resiliency well the wired, Europe Oleg will on about here. The is as side. Europe wired, it am fiber both across on and talk and when give in I So mainly I will sure is more wireless

fiber side. lab has strong the wireless on been think, I in So, also Europe and

XXXX too. actually the So Europe has pandemic generally for through I strong fiscal been very think XXXX, us in fiscal

-- wireless is toolkit, On this I toolkit, on the and the long it's start, a process. wireless will so,

quarters. the teams are of and You on couple our have get to designed that's for in where working last

As a mentioned, developed Oleg fully product. we now have

It's We have functionality launched commercial it get important and that product. features it. We're to designed before more happens. and rollout adding the to

talking we the So are providers. to service

We are talking to equipment the network manufacturers.

very to demos very et talking in broad our virtually, restrictions rollout, SIs. virtually, We working cetera. but been yes, doing also participate this so, travel are We'll effectively kind and and a approach, impact, of teams it's have do

in time in. start speak that getting think I I is stages mid to but so of building and So this will designed ahead sort in us, point at -- the think this funnel we of are

Oleg Khaykin

face see right, we a talking but benefits in where say, to working and our the the very well core is mean, just all because the kid ability us. incumbent, markets, these for have COVID of In exciting well we face and I we networks wireless, some a incumbent, have a challenge, lot I new have we're to very would block, and that we players started on So, it of hit. it's we lack travel products significantly established we before all contact meetings, of to recognition, and all name are

to a in don't kid to mean, the the I of it more want have training be over we face no So, there lot anybody's is want Amar you're -- wool we on. happens to I mean, at challenging eyes thought. than when hands and as because you look, clearly is face, new recognized pull there Because block, said, a we

help to think, You leveraging are we really us got field the and have organizations. we where to the webinars directly introduction into online be the but wireless their and our strains working and get field engineers, incumbent much be organizations creative that good I just with with training more our into in inroads lab and technicians developing to

we've be it do got. to got could but of answer, lot So, let's what easier if net a we a say, to would hell travel, best we

Meta Marshall

thank you. right, All

Operator

from question Capital. comes from Your Richard Craig-Hallum next Shannon

Richard Shannon

differences Well, thanks funnel guys the to that's Oleg, comments specific as geographies your well? on cetera for fiber, if cable, I there's to I taking across any wireless, want and want follow-up on, medium any see conversion. regarding et sales whether my question. DSL, to particular

Oleg Khaykin

one, Which conversion? you funnel said,

Amar Maletira

conversation. funnel Sales

Richard Shannon

Yes.

Oleg Khaykin

Sales funnel conversion.

coming be remotely set down providers equipment that's in and chase longest demo equipment, and to more then you it, to and you PR. got I say so demo the got to want, they and then you cannot it's It's for they have to orders, In pretty for lab, to to basically what there know up, it receive provide because lab, the they just conversion. production you So, right. challenge to the arrange somebody's is ship consultancy, then close shipped the probably got production service you the better and already would got good for bit a the

say it four I'd weeks at three say, most. probably So I'd maybe, to adds

network buys the to is, where and and sell not you monolithic business entity you it operations, place sell got then to operating they sell of headquarters got service nature sell a their life. the the single it have kind provider of got regional instruments into because an in you to order, deploys to to it's think the you them person it one daily unit I engineering every central twice, to the you and that the

to So more the you get and have. is connection all where to you mere have to connect longer fact just that takes them probably points online fundamentally

three running but say would you're I it's average, see what would to I say case I So probably them. four think the for is weeks may delay, some eight weeks you of in worse

that's more said, that. for new things really projects, that like Now, the

you in an pulls place just where needed. benefited be an a not equipment said, basically and That's they customer the For incumbent you months, because have because in existing good an the usually as they just needed. in everywhere already why sold you your several as it where and areas and orders. I that's incumbent you they you because signed-off lot to equipment pull they're the program, are last just recurring issue they from where already orders coming it's That's

Richard Shannon

discussion, may prepared that's in I I had from Okay, my missed I talking… I have your remarks, The Oleg. one prepared this, follow-up your remarks, right think Internet apologize, and little own helpful but outage of you're

Oleg Khaykin

problem your complete? Is

Richard Shannon

to this, Well, can you just get tell my Comcast service maybe to installed. listening them it's one I that gig up

Oleg Khaykin

lot a you call and him online nasty make of just may You and comments. go

Amar Maletira

Yes, till then use Viavi tools.

Oleg Khaykin

Yes, until use real tools.

Richard Shannon

do I will certainly that.

lines. or the last FieldCore more, you think differing some bit Maybe I there field stabilization specifically, think you more color with and some quarter, those describe along some operations I please? that and about you something you talked can about a dynamics provide FieldEdge, between talked little can maybe

Oleg Khaykin

multiple of one always easier to sell FieldEdge to mean I you other lot kind and central sell a NetSuite of right you to hand holding. requires right. got because so whereas Yes, entity, training entities, is FieldCore

during those usually those who who lockdown. also usually companies are in people things, contact, the people sent come and to the that's the home avoid So

the anywhere all which hours, in mere were it's like get Valley. have in I outage networks They X that top I are because act reputable outage, changed, drop of hour means and where and are you're customers going picking fine XX are I'd for them having every they to they're reprioritize where together, and connections, now prime half five, off, March a is plans you, it X no heart from just like I you provider tell So and got right. Silicon the I say reestablishing working that's kind the an PM to delineate, they do. programs of I I when between service they're they fine providers that in it but January, had April, very longer no say testament that and the same and fact a drop kind up working stabilization, their which or right, their of discussing top working priorities they get longer them in five minutes, is January what AM now outage in would sometime service between internally I'm tell to just is June, since

So, everybody's of all it priorities are just that and a challenges with January. tells in different, when are result, the completely travelling were as you the them they facing,

So, and started in placed. their the five their orders being identified, top different made, now January, being architectural decisions were five but (a), top change are are those they plans, is than they

a what now around that they the being nobody know mean that's got I that's issued. was and what over to themselves So do. in use faster of but decision, them They April and what because flowing are running is do. was see drill lot of stabilization. I'd fire flowing they mean where was discussions and when I making like to a need the needed proposed I Right they being pace, of nobody to by kind everybody at heck the the a it recalibrated, be PO it's is this better environment a cases than year. knew

Amar Maletira

more were is just time it because virtually, there, working certain the and degrading, of April, there, is was right, million this travel the able is itself, we not new demand to still to demand need to people of getting demand less cetera. not to still demos and taking very some that used May, the et almost it's nil, Just revenue very, still it's but convert the add; happen, normal to destroyed, of $XXX have deliver June, travel,

Oleg Khaykin

I shipping there got routes to things mean, that were of direct, you're have going even the you be, no lot international, you've many if budget just a no a to there's do few especially flights like longer as something, to days. used are planning. as NE longer better direct got extra so

it's of end customer. doesn't the time to just factory out quarter the of in the ship So it's going dicey because you're because the to able especially get mean get around it to

learned manage So to it I better. quite a bit how think we've

Our customers are learning the same way.

found stabilizing, a to by saying way people I'm as So adapt.

Richard Shannon

great Okay, all perspective, That's me. from guys. Thanks.

Amar Maletira

Thanks, Richard.

Oleg Khaykin

Sure.

Operator

more no back this Bill Ong time. seeing I I'm remarks. will questions it to for at closing turn

Bill Ong

Thank This our today. Mike. you, for call everyone. earnings you Thank concludes

Operator

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

now disconnect. may You

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