Viavi Solutions (VIAV) 3 Feb 212021 Q2 Earnings call transcript

Company Profile

Participants

Bill Ong	Head, IR
Oleg Khaykin	President and CEO
Pam Avent	Interim CFO
Samik Chatterjee	JPMorgan
Alex Henderson	Needham
John Marchetti	Stifel Nicolaus
Mehdi Hosseini	Susquehanna
Richard Shannon	Craig-Hallum
Tim Savageaux	Northland Capital
Meta Marshall	Morgan Stanley
Fahad Najam	MKM Partners

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Viavi Solutions' Second Quarter 2021 Fiscal Year Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to your speaker today, Mr. Bill Ong, Head of Investor Relations. ahead. go Please

Bill Ong

Welcome XXXX Grace. Head Solutions' quarter second Investor Thank call. to My year earnings Ong, name fiscal Relations. you, Viavi is of Bill

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

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

Pam Avent

of $XXX was represent growth. a year-on-year range the continued quarter-on-quarter XX.X% exceeded ago of EPS tied NSE range This and quarter points million. in XX to at $XXX.X the EPS to is basis year-on-year by our came $X.XX at strong X.X% a sequential the performance. guidance revenue at margin end year expanded Thank Fiscal million results to and decline high OSP from growth recovery a QX The second driven $X.XX you, the Viavi's Bill. the and X.X% record and guidance XX$ $X.XX. operating exceeded million $XXX of XX%. range record in at guidance

segment, grew due year's revenue moving primarily reported pandemic-related strong at and from declines SE year-on-year. Within Now, our with NSE, XX.X% demand year-on-year $XXX.X by from NSE. revenue $XXX.X revenue due sequentially. declined in basis points part to declined a data last XX.X% million starting in huge million declined XX.X% XX.X% NSE NE products. Instruments. [Indiscernible] Field center results margin NSE in at ago, at XXX year gross XX.X% to decreased business

NE at of declined due from NSE, increased at the decreased gross favorable XX.X% product SE margin Within at XXX XX.X% partially gross volumes. attributable year-on-year, points lower basis XXX primarily lower primarily operating year-on-year points by margin revenue, due XX.X% to basis points expenses. last mix. offset NSE's XXX operating basis margin to year, lower

high to had at a up year-on-year, with OSP XD margin and by turning strong driven in $XX.X Gross a sensing. Anti-Counterfeiting Now million, revenue basis XXX up and margin gross of up also record of OpEx mix, points margin factory operating XXX and product delivered favorable volume, management. XX.X%, result higher utilization. year's higher last by OSP. year-on-year, at was XX.X%, XX.X% record driven a as from demand strong points OSP levels quarter basis a

sequentially. $XXX.X our $XX.X million, million cash an Now, total balance increase the of and investments balance turning the short-term of to ending sheet, was

announced cumulatively in share. $XX.XX the cost September plan, approximately share is was end $XX.X commissions. an share approximately $XX.XX quarter average cash record operating flow Viavi authorized have $XX.X per we cost including million the million QX, repurchased At of overall the out of into the of a QX, Our million. stock repurchased was per this we million plan under -- $XXX average Overall, $XX.X XXXX. In at buyback

will opportunistic in to We our be share repurchase. continue

on is range million margin in between $XXX million. to plus Now, expect to $X.XX. minus XX.X% Operating be or guidance, of quarter we $X.XX $XX approximately be EPS third expected the to be the to to revenue to XX.X% and

approximately X.X% We or XX%, or million, with revenue points. with million revenue margin is minus basis be minus minus XXX million expect plus $XX be OSP operating basis plus or approximately margin plus $XXX expected plus minus The to $X million, to $X NSE operating points. XX or at at

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

reflect of increase to This $X.X count shares. expenses an share QX We expense from shares to million. million and includes XXXX expect fully With in over XXX turn to call note. reflect Oleg. the a We convertible dilution used X our other impact as adjustment diluted million estimated will approximately estimated and is that, income an net calculation approximately the of XXXX from our I

Oleg Khaykin

pleased obvious you, Thank the Pam. fiscal I'm in the second quarter. with performance

as to quarter Our their for revenue a business GigE and continue continued production and driven wireless by highest lab to OSP business segment by second fiber and recorded led recover. segments was recovery segment in providers XG activities network NE and Instruments maintenance and increased revenue up projects. strong The new enjoy in its for service revenue profitability Optical and XXX record saw its deployment and demand resumed demand wireless. Field profitability gear NSE customer

wave as We interest a had next growing respectively. wireless technology are robust QX. XXX XXX drivers We business the and lab and customer seeing O-RAN GigE see segment in production O-RAN. growth for The behind in and SE GigE also

to and up the be of with work. NSE expect return QX by in in expect networks we current for start in to rebounding the customers delays until Overall, confluence QX. enterprise by reduced That calendar we more able the expect to fiscal to continued driven Looking improve spending service is ahead, we XG above-seasonal projects they SE in said, to existing a trends; providers fiscal outlook by on staff the demand two QX. weaker demand revenue XXXX new as gear

start start network there in build-outs. to up XG XXXX picking Instruments the ramping second demand service up calendar of XG Field Additionally, we half expect providers as

Now, driven for demand OSP The is segment inventory a fiscal OSP. Anti-Counterfeiting XXXX revenue driven Sensing half stimulus, banknote central new and first replenishment, and of business XD of demand strong finished year the fiscal bank's by being turning and products. redesigns. by combination Anti-Counterfeiting with record to global profitability,

and more years growing than planning more we sustainable and customers secular expect in foreseeable Xd the future. expected, in three marketplace later to strength the driven applications recognition XXXX. from launch calendar for lead devices now demand customer a With in We in a than be the have stronger adoption facial for large came and with Sensing devices by now, demand increased mobile penetration. to

we revenue initial fiscal up for to guidance XXXX Sensing increase expect to to XX% a now XX% year Xd year-on-year. year-on-year, of result, XX% As from the

our profits execution. year, tying performance it our Despite at calendar the throughout revenue quarterly business setback early finishing we XXXX, our to back pleased pandemic-driven by XXXX, our unprecedented the Looking recover with and managed in EPS. and I'm records to

Our calendar a driving A fiscal good to growth on XXXX. quick continued CFO look and QX the search. update off is to in we recovery start and forward

We have narrowed have interviewed final many impressive a candidates to few. it and down

over these new I our chain now will my like team expect its In CFO to execution Viavi wish to challenging and call supply Bill. in during turn times to partners, express the employees, and appreciation announce March. sometime our We for and all the customers, conclusion, shareholders healthy. to strong I'd stay to our safe

Bill Ong

Thank you, Oleg.

the to TMT follow-up. participating Grace, Morgan Conference begin session. we everyone question We This at quarter, be Stanley one on will discussion to Investor the let's one Xst. question-and-answer March ask limit and

Operator

JPMorgan. Chatterjee from first [Operator line comes question from Samik the Instructions] of Your

Your open. line is

Samik Chatterjee

HI, it then start to of thanks this for new sustain? taking will segment I on right you kind momentum of how my about you're, of, congrats want of can the you Anti-Counterfeiting segment? revenue you talk million being run am duration $XX and on will for OSP you. XX to on off the kind And OSP long strength be say question is do Thank this here. for what I a level And heard Maybe guide that think strong low of continue Anti-Counterfeiting just time. the and follow-up. rate saying I I -- kind should expect Oleg if quarterly you think I reading

Oleg Khaykin

you, Samik. Thank

country U.S. the around we see as additional stimulus or norm significant sooner listen, orders only constantly So, we I and coming in a than result, think, expect the not And a I it's much is pretty mean, world. beyond the span, clearly, it. doing above

be there's of our is features we already And because clearly top to stimulus demand. stronger a driving -- additional was redesigns in security So, that the some driving the and the additional growth. demand on many of adoption of that's expected should we have coming upside what usually

of it. up coming top that's So, on

all exhausted of in replacing lot to that, of of have they're in currency been providing and shut first months inventory cash. existing a addition stimulus and six need kind much down they've In of printer lines less their of an badly the shutdown,

extra of supply And layer demand. So, the on there's low it, that's entire obviously of in driving top across all a chain. also inventories very of an

to trying people as inventory replenish need. So, they their

foreseeable set a have other running running be think all $XX So, the we an than million of expect but our in in. we stronger increased business -- the visibility, months, -- for future, I And demand level base think, -- the don't Anti-Counterfeiting to I of get mean, elements, plus traditionally it's XX to I traditionally, us don't next in business. expect going we much -- we're been around I see unfortunately, quarter products. given I really we

more think going think pretty it's other expect really much our -- to was driving come seeing pretty we that overall, the mean, given obviously, of lead the some quarter, of adoption then in mean less million, foreseeable there I on safe Xd we even some in initially more in a now demand Sensing than good we things there's future. tight in anticipated shipments a and little a I any customer though products are much had stronger the quarter. expected us to be anticipated. through running results Anti-Counterfeiting coming is And that's be be quarter, I than and function -- and stronger $XX I volume to to maybe customer maybe penetration, going will one in assume but I

Samik Chatterjee

Got in curious one there's remarks, it. can the the particularly, this you kind most NE concern providers see business, mentioned wireless, of broader fiber, the XG -- If that XG which and you of think recovery spectrum visibility drivers about service Telco on in I options. wireless more on prepared have into overspend as service the follow-up talked having do just the when two I you

in So, thoughts have infrastructure? ramification on of wanted some to that. does a pushing wireless in the Just that spend out terms get of your

Oleg Khaykin

Sure.

lab the access, fiber, cable any the instruments, and the been mean, production we old I continued in what's business, QX, bread and to say very recovery and driving was field be when The So, really it in QX. strong test strong -- about the butter recovery. fiber wireless of that's that's in

as going that to going and not it's see, business decrease, be to and continue continues So, to be as strong very you strong. -- far healthy to can it's we

thing really going only wireless the up -- is the to the the be that instruments, that's So, deployment. you're field and to area right bringing linked

I spent on of agree, they lot certain at a start So, point, they've spectrum, money do have all to buying but monetizing.

in for Instrumentation second be just and in we extent continue fiber deployments to traditional So, strength those to DSL, equipment lab, and like production pretty trends start cable, half, see fiber, seeing the happening. lab, from wireless in the more the perspective, those strength we And Field our our broadband robust. our

need spectrum no and going monetizing wireless matter. field longer the be will also to duopoly they're it's start it. think start the you is that to they people as to in believe to We of, it's and instruments as generating another some because start could, your half, to time tend they second going really kind the revenue, U.S. contribute. Whether a I take where whether expect in do But aggressive

I think to seeing Verizon, AT&T. ways, emerging some in T-Mobile, a crown we're claim is race and XG between the there

starts. aggressive than I do when believe it So, less that deployment rather aggressive a deployment we more see will

Samik Chatterjee

Thank insight. Thank it. the Got for you. you

Oleg Khaykin

Sure.

Operator

Needham. from And question comes line Henderson Thank the from you. of your next Alex

Your open line is

Alex Henderson

to follow-on it was on talking we what ask actually were great a because It's a about. kind just of time it

historically me in measurement You've more to the is seen but predominant tied your is been business, the business. actually in test Street to fact, relevant CapEx, driver to by pretty OpEx clear particular, Field it that and Instrument The seems

business. a I have pressures that phenomenon. out, at -- of all the i.e. more license, would spectrum that look not at of fees on the you even your license think was independent much going OpEx-driven As of or impact mentioned, the that that's CapEx side would CapEx

little pulling starts a demand, the -- of timeline that what bit thinking you You forward talking of think that have it calendar seem and being changed for some time at point your have forward were visibility? where XXXX it to pull to about you the the pulled XG terms gives forward I you the and in end

Oleg Khaykin

question. Good Alex. Thanks

So, I of still no, XXXX. half calendar a say second

and when So, DSL take two and are insight is my drivers, But equipment And I sales September quarter, need they're test December by cable, I do driven Instrumentation mean, equipment are great, not Field you're being but start -- is quarter, then of the OpEx. being them they on for us, demand fiber, built, and remember, there's maintained. our whether right, networks to when that is deploying. I turn going I'm driven to -- the the instruments you're to mean, for going traditional believe remember,

by CapEx. driven is maintenance out build driven the demand is by OpEx, So,

start and will So, wave and when equipment should densification have operation, of first these that waves and taking followed as by into starts building the it and certifying the they hold. them towers maintenance subsequent releasing be

Alex Henderson

couldn't and on If on cycle, measurement that any something inside the Is an there benefit I to to the that lab, meet. from? extent, could helped share into you've you've got being And being Noritsu write get is [ph] able manuals you've -- the Field track earlier a out? in and the playing that's test Is was measurement advantage that design helping that made the because argument Test visibility competitive -- got that manual. you've much pre-deploy can't that that built that an further in to follow-up,

Oleg Khaykin

Well, -- already an they're always have incumbents I I think listen, the think advantage, because there.

obviously are So, they also influencing installation.

lab absence the of Now, time the early being in and being of a the complete in we newcomer day. deployments, a wouldn't in get

all certification, intimately everybody point, to have pretty at equal However, XG in suite And the fine-tuned the the definition. And an been an that. has with involved of as installation products. advantage, given have And also through like going having believe in protocols, and seat product much released things that, expert, we criteria, else, being at we specifying names have do the table. and coming seen us our the full this we we're

have the corners on off think assumption better Today, we well. much the rounded our way, products deploying ago, a than have products year the in instrument portfolio. in I'd have timing started incumbents' thin are say very worked So, XG would a we we Had I that pretty very that space. all and

in a market we up out So, do picking some carving US believe that and of the that for should chunk result ourselves. share

Alex Henderson

much Great. Thank you very for your answers.

Oleg Khaykin

Alex. Thanks Sure.

Operator

Thank you.

John from up Next is Stifel. Marchetti

is open. line Your

John Marchetti

forward. Oleg, much. business little just a OSP very wanted on to bit I Thanks looking talk the

to Android that You think a concerns as some more to XX involved get if through and to to phones Sensing business like of expect the helpful And went that updated business, curious new so. some that next year? any your go I'm the how on of well? play you happen the business notch OSP within timing, over be as bit of that? there's around things are rumored with would that maybe Sensing, get to starts through just get out the we the changes as sense filter, kind the here Just looking you And Anti-Counterfeiting or months Xd maybe calendar Xd your at of side, diffuser little and

Oleg Khaykin

good question. Okay, yes, no, a it's

modules course, guidance. -- know and I it's don't were a whether all of we no really, or within no I So, our notch, mean, notch say there's notch. in matter really care we no notch, which

the a designing of The I've I'm do what accurate rear and the entirely I will market not resolution expect on facial as as in facing, that. on not facing So, going well. I cameras different There's it security ubiquitous further of of rear facing having mean. what news, a is facial lot more make things that related. technology to And going recognition, more there's in space understanding a to is seen kind see And a high different innovator camera opine as phones, it's things. a well that world of just way was facing is more way world facing easier, recognition world

go to of with adoption XD Sensing technologies. exciting of will upside that market the be we that that depending combination And to we camera because think phones camera performance. a now Android, several see around diffusers the to facing mean, So I continue do continuous a models share a -- XD must business in is on into tie and on the adopting the think And is the space. which start the false more their whole into Sensing have are filters believe seeing animation world we having grow production, a of and end to OEMs. we to Android after much modules an going for I And facing do kind could I What XD Android, is starts, various about forecast camera we're from do do world higher the which playing Sensing.

John Marchetti

it would just maybe still it any be then you you side Is go a more in well? cycle your can out, from that it. color that back seeing to wireless one I maybe you on just O-RAN next on as of I And know, Thanks. widespread and you in guess within interest? also appreciated if share of early perspective? test Are geographically a days? know, as we that investment in sort are can where Is other Got area leg lab, comment concentrated looking O-RAN

Oleg Khaykin

Sure. it's stages. very a I early mean, Sure.

working. XG I now want, talk mean, can you need operators, you So, right they all

names. tailoring the the initial respective for they're So to deployment

just on looking And their brings, down themselves. also even brings They're aggressively in new deeper its kind thing road. next the of care as O-RAN I O-RAN are something that getting lot or compliant a ensuring for of what put parallel you at they players want, labs. And that it Just proprietary all the top if the works O-RAN names I'm whatever market. solution, it, into don't leading the of in are a

it's names. a So just four no longer stock three,

dozen about layers the play you are all Now And looking buying at horizontal companies, all have network. or labs. a various vertical who smaller to they're of

focused point, this and activity. you a if it works, and the to of it care terms at lab kind is in gives heavily would of so say just I And what O-RAN don't And something and me experimentation of actual the thing deployment, work. I make kind how

hope gives So how that's, bit color that I see happening. you we a more O-RAN

John Marchetti

It so much, does. Thanks Oleg.

Oleg Khaykin

All right.

Operator

Thank you. of line Mehdi question from from And your Hosseini next comes Susquehanna. the

open. Your line is

Mehdi Hosseini

by follow-ups. please have understand appears in how XD US can Two increased follow-up. is especially me your OEM you. be to increased a content content? by Thank Oleg, the models, help the the So, you is successful? And much Sensing driven how versus smartphone units introduced for driven strength of you? much that a And success and your new I

Oleg Khaykin

believe is XD what -- our assessment think, no And market on I first share. change So, I home some of make really seen, up the we market there's stole leader been mean, picked we've can to you think things I of that, Sensing own your the all, driving clearly they've a their market guys business. that share, couple there's

proliferating everything the camera on facing a volume And tablets then, got facing models facial I phones, as it's of camera and now like we a higher PCs. now result, really then of other those lot into products interest. universally, has about are course, almost for phones, the So think rear end within pretty world of And talking higher recognition.

expected. stronger have probably I So it think in we would came than

in erosion. volume offset And things the of it's if together, of those, volume. all I driver take world cameras. would just one And second between of that, these of than So any more the think terms biggest increased three the ASP the is more bigger enough facing of two to is we the say surely I introduction things,

Mehdi Hosseini

the me that past? -- products would one agree to you filters in But and like seems content you versus different two have have Okay. you higher may not or

Oleg Khaykin

Yes.

camera, our little a phone different. content the is world facing It's in both that has greater. rear So, and facing

I power be let people the actually just, I So give facing rear higher a in may think just me mean, the When world expensive. more laser than clarification. some cases is And people, about you facing laser. little lasers,

recognition the camera For at at us, look resolution the the is we lower of is rear how than we area. much facing sensor that's the it, facing, smaller. facial sensor. And not by world sensor which look It's it a

So are world upside. we is driving the ASP, smaller. fact of the we much facing rear for And and are now bigger some cameras facing had and growing, for mere because bigger. it's the that's the the are the But world is APSs facing before cameras zero, filters, area in obviously terms ASP have that the

Mehdi Hosseini

I see.

Oleg Khaykin

say, two good of of terms would one I rule content. in to is thumb

So you it's about one area, a the total and half. think

Mehdi Hosseini

Sure.

to have clear to Now, ago, hopefully is you than today will turn and the seems at some point part months more NSE of your be business new going products three, six scale. that

is eyes want ago in were LiDAR interesting LiDAR in growth application, I XD for NSE your you actually in shift bold focus as on the into end to six Am more OSP, to suppliers into right this months made focus which way? was suddenly that I stay strengthening that portfolio if lasers, now of a they surprising acquisition M&As market Sensing, would has with one huge me, looking your context, to about of thinking application? an me, driver very a getting become you looking the the on you're key recently So

Oleg Khaykin

look acquisitions a -- not OSP and NSE. strategy both have Xand we roadmap clear for each. at We're for We'll really

of diversification that. the for of add more I talking and view kind it them, industrial is, I a play and like industrial laser -- think momentum, the processing you're think my on about it's things

Lasers own for for JDS, don't their applications. the I of days I they at Fiber that. even know, mean, from I strategy industrial know, And So, they looking were have always

them resilient deal will one the phone. make -- a any for model not more So think diversified, depending I company, it's I them more of longer particular a on term good think

a think, out -- that that opportunity them. works for So, well. think And I was it quite good I

deeper while to a is I acquisition, as is need of bit any in still to we drive looking our we're us bigger going wider much markets. us. for more continue for going both, scale of makes sense us, For kind think It we're gives combination in us, too looking existing premature leverage probably

Mehdi Hosseini

Just NSE quick optical context you of you the market, given to -- a follow-up, in would the than say the in now in changes the in be priority -- higher Sensing would seems M&A opportunities?

Oleg Khaykin

I would say they are higher mean, or lower, priorities. I both

and have later. more operating and We or really our matter kind target one both it's which sooner get cases, of leverage. business in each list a of actionable becomes we And tremendous

need we So don't it's, it's I or really to actionability. either, we we're we more to can and worthy are here, -- down choose do comes mean, equally

the optical Now, handful really of needle. in don't them in difference companies there's that very and is only are the a most of space, move they respect, small fairly

there NSE, are bigger players, in of well. as So case some and --

mean, mean, look interesting that's I I do very at a So, part we around area the LiDAR. us. for

Mehdi Hosseini

Okay. Thank you.

Oleg Khaykin

Thanks. Sure.

Operator

Thank next from Craig-Hallum. your you. question from the comes Richard Shannon of line And

open. is line Your

Richard Shannon

my for Thanks Hi. taking questions.

lasting? geographically field business follow-up inputs second you’ve I'll any that? and this What calendar Oleg robust. field see of just then about think, of how kind on of I describe long kind your some you year the How seeing half talked confidence test in to you would the specifically in for XG XG cycle being test

Oleg Khaykin

by are super-cycle Initially, have more and field we eight-year things really with to to that. run. the be then seven, densification. it's of think, going what -- think saw going you're kind going And I to I an the initial geographies out. geometry to and more like roll similar XG It's XG test, deployment, Well, a followed

it's in good in good. countries quite the are that happening aggressively Japan, our turf which some think one our well home are me we gives of and like confidence market, though how products pretty major are So seeing even in we starts, of that are pretty we things And competitors, doing our already I traction.

a the US will clearly US, be for and the been mean, I of think, terms China, next In going quite that's I on there's already thing. while.

a next the be rather we In XG big see later, things situation we buying competition. duopoly will interesting they happening major there's very terms It's of kind three there's kind of That's difficult wink-wink, to for right a because with a will now, like their an And think crown. a it's of the where with US, sooner pace, two now time three players take of nod-nod have now no US. collusion I in at anything players probably longer why sustain markets moving players that. than type or deployment

next much starting think later things I are quicker to happen in going year. maybe So US, -- sometime year this

probably I think that a and we start deployments. the Europe seeing next year. one think things should in about in really is I Europe some next And U.S. so would be some behind year happening Europe sometime

Richard Shannon

units, about at a business that couple I question in fiber for least you’ve quarters talked, robust at cycle is XXX-gig. color. on fairly think your Oleg, for follow Okay. Great my a

sense How generations If as you then generation the or them? two cycle positive turns you XXX-gig in as a last robust see terms at turns when can do And even do better? you give the least of into versus into us that -- a fiber? it of view how

Oleg Khaykin

ago, now an technology we're XXX-gig the already another we’re to -- I XXX-gig. mean, years we couple I a to and getting are already anything one shorter. Well, seeing of I each and want if from to have between of time seen see, think now and earnest to we note, has only in start and deployment like, shorter see of XXX-gig been that customers want a time the XX-gig, What I is start deployment the duration, went with of one-gig amount XXX-gig. would XX-gig one

I new from rates bit data time see -- shortening. seeing XXX-gig sooner it's higher we will co-exist. the slower, areas we'll we kind deployment see and So And think moving mean, centers think I from to really, technologies but reach my of perspective, to be fiber may may the metro no is multiple transitioning transport. is I completely the XX-gig other ramping segments. these the lot fiber longer is center with the than boxes of the parallel telecom customer rather down. traditional really all ramping of in see demand. that's up, co-existing and one mean, we just data the it backplane a optical I all driving one no nodes It's becoming And

Richard Shannon

Okay, great. for Thanks Thanks. also. All right. perspective That's a great that.

Oleg Khaykin

Sure.

Operator

Capital. Savageaux have we Tim up, Northland Next from

Your line open. is

Tim Savageaux

Good of results. questions the A Hi. on and afternoon, couple congrats here.

a on is XD your to world in Sensing I contribution OSP that universe. and an And the heard of mentioned if over pretty, has you'd minimal. mentioned been particular, or android before XD today increasing android activity And level a bit you'd First, source of the in Sensing today, side about pretty think around that also facing this we've potential low, it not of little upside.

my question upside with the is growth of the android say in second sort to basically to which is your XD so with Sensing you share say top calendar same you're seeing a drive what XXXX, half in rollout XXXX robust fiscal your double-digit when year, And even next an customer that, sort flattish? of baseline of

Oleg Khaykin

Yes.

in away. Actually, it's universe huge. just Sensing to a has universe of started It's fizzled And would I So little has correction. been kind XD our it been contribution just make android fiddly. and

this Android It's major world going didn't filters, think, be just later go in. meaningful. I But players, either us, we two with are is one volume products high-end only all for mainly models, designed one designed And production, it's opportunity. also models And we in android more So this or players. double we if enough android and think that can happen. market I time into to to see we've into in the so not around, it's that quite big and a diffusers, so respect that modules engaged year, they been which get cameras. the of if as our to will facing which see And depending get than introduced given

Tim Savageaux

Got it. was your not mentioning And I technology contribution, contribution. your revenue

Oleg Khaykin

this Our contribution going small But I otherwise, year. they mean, customer very base. is this out comes think, is mean, acceptance. and I happen to really on from I I yes, big will big it is lose a android is think And -- this

treating it as upside. in I mean, don't our we a I think, I an So of -- forecast. mean, -- any put still it haven't we we

as next as over will we probably So many go start it and clearly placing many how seeing orders, how to into models three months production. start the modules it, will customers four if

Tim Savageaux

a the run of quick right, you're the just on $XX a quarter? baseline looking sure heard it. to OSP, just at currency And want Got number million one kind I rate, make

Oleg Khaykin

in terms we And always we No, business million said $XX say of million. to $XX kind the million. -- run it we’d say $XX -- on I'd say of our maybe base

range. say, I'd So type XXs higher

Tim Savageaux

And as would traditional a be March, in -- up the fiber what me. the Got strength it. extent Thanks. that cable quarters, seasonal see your any some demand versus extent, in tests more pent that last of here you possible the being the there? is releasing? And declines mean, the other I traditional field one to same flash? for do To budget to or you for you as in Or to drivers principally that as look December in saw it that characterize nature

Oleg Khaykin

shut I demand mean, of kind off it's for I driven, lot cannot increased the are of example, doing during best increase I consumer my my office, day, quality and Actually, local of call. not all I'm demand, for call for a significant the the my during on provider me what for seeing the from network. call cable bandwidth rely a on bandwidth, customers because it

higher longer-term what by over you best kind to sustainable that's telecom companies response actually to because seeing is think I And a demand demanding is of the we're demand manifests and a of cable it investment So quarters. consumers can quality of into more with more bandwidth multiple have, kind service. companies me itself and

for needs starting US of took be, still them figure lot and these mean, for compete networks, their kind of customers done. redesigning be out. government seeing an quarters I money are that And wave an spend be and wave, think I incremental broadband, rural to us. it I spent but plan would say to road many them I the for the whole out they're to also a next down we're what think several projects. this So will additional the to won't already of the a it in roll starting And

Tim Savageaux

very Thanks Great. much.

Oleg Khaykin

Sure.

Operator

And Meta from Morgan comes your Stanley. question Marshall next Thank from you.

open. line Your is

Meta Marshall

how partner then a into in of XXXX than opportunity, in supply just that were been chain America in pick expanding up just latest XD you timing Maybe your maybe of Europe as of on your wanted about QX to the strong, Thanks. of thinking despite And maybe saw that it's anything Europe. while was talk that to get QX, maybe seeming read we Sensing a kind to to opportunity, thoughts? relatively second question, in Great. with auto Thanks. and Europe think out about terms the just accessibility North in stricter issues

Oleg Khaykin

I'll say of XD. So, out

driving, function cost I needs I And of the I next think years. pretty or the opportunity LiDAR automotive get the acquired our always take LiDAR a the really said, of take mean, miniaturization business assisted of XX view not or them autonomous that. XX% the minimization And to driving at in that's filters. few with we working think out and much area earliest every around a miniature today, as still are we out And or company listen, longer, lasers of XX, there. really whole like be It's that for we will will actual will place. kind it's the -- and

engagement market, we XD in However, customers not auto to us Sensing automotive. there that. in market. very high-end go pretty share with are the mainly like and today, kind company are high-end, for market, the and It's of gesture being XD of much positions good is in big already the segments the that limited active it's are for getting which it's to but giving some a in-cabin have a And things monitoring that recognition Sensing

devices us. I'd near I drivers and call term that's steel, play be automotive It's consumer vision I'd growth say say longer So the and really our for us. business how of see more And to us. for is term industrial XD will

has downturn even and it pandemic for during the during In worst region and whole continues us terms robust the continues of growth. actually, it to Europe, been EMEA the very to be very strong

fiber fiber seen as in mandates household is very growth Europe. governments demand know, the to Europe, with and practically initiatives from Europe And we've in out every lot US. you in strong And different So, Europe. roll going a on to from very of

America in connection, Europe We steam DSL has much the have of has out pretty cable and DSL, in every run predominantly almost been terms in house North of broadband. delivering

fabrication behind we're it with seeing So push out over national call say pushed being I'll in of network with wholesale, the it. a lot Europe fiber

Meta Marshall

thanks. Great,

Oleg Khaykin

Sure.

Operator

you. Thank

Fahad MKM from question of comes Our from Najam Partners. the last line

your on your from the MKM lineup question. question And from open. final is again, line Your Once next comes Partners. Najam Fahad

Your line open. is

Fahad Najam

at in understand and see play little going bit the speak what opportunity Or aspects optical understand from for one the all of and PONs, coming two you side you of your RF office how side? a you carriers this the of us could and of ask questions you. the the Thank my of where more, haul the RF bit RF? you least more answered. to or little out carry Thanks understand taking I side, optical dynamics more you're do XG, us these the been optical the Most seeing? my peel follows is terms if help a looking on online if a can little are maybe opportunity opportunity this densifying onion about optics, Is to Can have there's WDM dynamic to be in spectrums is if other to especially the that there of you given bit so you at fiber the on question. opportunity the the speak maybe think Oleg, radio different But it can to the are you the side I the front are in traffic. help us PON

Oleg Khaykin

good we're RF and fiber. RF up and in interconnected about fact, very seeing in Because everything and converging. you fiber with wireless versa, It's And a the without cannot today -- talk talking is fiber very vice Sure. network wireless you because point. about bring infrastructure

transmission So, RF, test things as well fiber these the you as to you timing, your right. need and have to test all

here single and in fiber what our all we feel So is we a have two a we unique in instrument come box. is RF an instruments opportunity with one, have

we need to and terms for and really in the we're engineering So you help say coming XG the lab be other same, the I the haven't our development. the a And as out new seeing think in and field market in companies cases, their winning is need And for And is well new the who it's XG enterprises hasn't -- that new as them to for networks. would private that as a are think is entire or to big emerging us to which do The to traditional And enterprise and markets standards to like enterprise to of of XG was It of large going deploying XG, networks. is And network the growth. where call network. -- haven't offering going the across bring wave for the testing. qualification. instrument the their so for us compliant buying would next XG view more instant big really our Phase XG what X RV. instrumentation. played and one and do all deployment, they're only in in and more Because new that's market are combination really effectively into I entrants products service that to continue after played lot plays the we or to clearly, with instantiation. synonymous, terms NANDs of be toolkit purposes. will us so the O-RAN. But in particular see plays the in NANDs in but parts -- and big everything private in I rolled become XG one element network start there our field what field the of strength installation next it's many that of And the in the service enterprise completely traditional players I providers, We also the very you their

network. the the monitoring enterprise equipment, simulation software So as as that assurance test well into it's goes the equipment, equipment,

want and rollout, the not are XG and number really second, put on going to XG where do a any third, opportunities opportunities. huge at of we is of a technology, things first, lot It's it's where look to for but in these I us. there's money one So, how more you focus is

Fahad Najam

a rev speeds? Is I And some the seeing your of if the implications increasing beginning that ask of to you. optical your can side, you higher become how be mix? maybe that? about share on us with an we the ship where for if thinking you XXX-GIG to you're from And should question Thank portion in as module then, points should data

Oleg Khaykin

Correct.

of much much So, the edge very engineering a is bleeding an it's demand. lab And development. XXX-GIG very today

really for leading equipment optical is playing And XXX the So That's modules, the it's NANDs. they various are who and who is suppliers doing optical that's GIGs. semiconductor -- company.

early So, And XXX-GIG think adopters. the into development. the really next will seeing I to us kind probably advanced out start gig of some we rolled year field today with is being XXX

Fahad Najam

Broadcom about of the much. Co-packaged makers Thank chips very And talked I milling one you the chip lastly, if could, XXXX. large in optics

ship for the Co-packaged customers? you with incremental an the opportunity does revenue objects So create

Oleg Khaykin

kind or of mean, to integration with were. to trying and more the and do module start things NAND like they I equipment that's mean, they the vertical as the know, you I buying that. the that do actually, that Sure. same used optics Co-packaging companies manufacturers semiconductor

selling a it's testing us very systems. mean, active space actually is, I high-end semiconductor business for So optical in

Fahad Najam

answers. very you much. Appreciate Thank your

Oleg Khaykin

Thanks. Sure.

Operator

time. Thank will for remarks. Bill are back at over further closing call no this you. There question any I turn the to

Bill Ong

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

Operator

may now Ladies all for today's concludes conference this call. you disconnect. joining, and gentlemen, all Thanks

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