PLT - Earnings call transcript Q3 2019

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Operator

Good afternoon, my name is Eileen, and I will be your conference operator today. At this time, I would like to welcome everyone to Plantronics Quarter Three Fiscal Year 2019 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. begin may you Iburg, your conference. Mike

Mike Iburg

Private include and Eileen. for The presented the you, name President Mike detailed discuss the Securities The Investor and today XX-K Welcome Burton, under are Pam reflected most On and Safe are year Vice to XXXX, call completed the conference is President Relations release. of which related of Head of Plantronics' results the July CEO; we financial recent press Iburg, Reform Harbor XXXX. me is Plantronics Litigation in third Plantronics' information results made the statements, risks forward-looking My today to Joe Plantronics XXXX. Thank today. provisions Act joining Strayer, such quarter in XX-Q, Executive uncertainties of and and fiscal acquisition today's of CFO. and which discussed will X, statements and are our Polycom,

and along non-GAAP We revenue. are revenue to impact providing with of purchase adjustments guidance GAAP accounting the the

guidance is basis. non-GAAP provided a on other all However,

on quarter net revenue and provides a an discussing isolation in other today's supplemental will considered gross accounting and metrics business to will basis. our results otherwise prior rather year revenue substitute of adjustments December Non-GAAP the we comparative noted, Unless a performance than underlying of adjustments a views should prepared the been period. refer with Non-GAAP non-GAAP as quarter. basis comparative the information a per on to primarily non-GAAP historic non-GAAP had results prior call, discussed presented We immaterial as meaningful the both of of the our of net non-GAAP or combined Polycom as quarter excludes as income, to product the Plantronics to, believe results These for regarding year how non-GAAP $XX non-GAAP performance operating in comparative of management Combined results million for combined be net supplement of purposes. share. comparisons expenses, be our or related non-GAAP individual metrics margin, to that December during operating During are the reported impact results against adjustments. results are income, earnings and revenue, superior revenue align of GAAP if purchase they treatment categories.

along these with in measures We in today’s our earnings U.S. and call of corporate website recording section reconciled results investor.plantronics.com. our investor release the have available earnings of GAAP with our presentation, at which press a are relations

the for net discrete third provided tax today press I associated any now of $XXX margins amortization, and reconciliation of GAAP income integration-related margin was GAAP use XX.X%. non-GAAP of loss, GAAP million, earnings quarter For loss accounting operating year compensation, XXXX, XX.X%, intangibles The refer the non-GAAP of operating that, purchase for earnings million. million. non-GAAP Plantronics' $XX.X will quarter With a and additional adjustments, operating diluted and and $XX.X were million $XXX stock-based adjustments. Plantronics a our earnings was loss in third and revenues margins was was diluted negative X,X% GAAP revenues Joe. to release Please share GAAP per GAAP was XX.X%. share net the gross $X.XX per margin for to results All the call fiscal $X.XX. and non-GAAP non-GAAP turn GAAP over operating published and non-GAAP gross quarter restructuring. and were our consist between to tables details. were fees, information non-GAAP and tax and third presentation impact non-GAAP today, difference were and was primarily acquisition earnings

Joe Burton

a roadmap, we’ll continues delivering our I have opportunities the results Plantronics, I am brief discuss wanted executing market. everyone, the Plantronics. financial an product for the afternoon, and quarter thanks for we call The demonstrated the milestones our evolving a we quarter the we made to to incredibly before Enterprise achieving us and and our be today. thriving of and company. Polycom communications today been date This global provide how for overview ahead Q&A. exciting against and take has and strategy of goals. achieved against opportunity proud see we joining and are Good significant progress to collaboration our to integrating open have to this we

we to transition While service a means role few on transition endpoint critical that continue a UC&C endpoints the than massive grade towards a just customers premise legacy of endpoints cloud-based management Today's plays providers enterprise ecosystems. the communications platforms see demand user quality. seamless simple provide enterprise remote years an interoperability and UC&C This intuitive market must IT dominated across interface ago, and more offer ever. and an providers. increasingly set capabilities diverse These

growing to this uniquely market. are we serve Importantly, positioned

focused portfolio are and to our We hardware partners on our increase simplify of and experience. and productivity leveraging software customers

you a XX% a product combined basis. a on phones quarter to and portfolio. great Desktop through take conferencing growing walk me minutes Let few our both had

Trio bar Our continues of family the to XX% conference phones for audio growing room year-over-year. conferencing nearly set

customers desktop a remote as series cloud XX%. the management, a reduce growth We XXX obvious service the simplifying strain XX% provider family IT choice on PDMS the experience. rapid recently these total enables our XXX management to the to point products of nearly Polycom's our the price accelerated and departments configuration Video to through side, user at as The solution XXX ability the provisioning. desktop end allows enabled and propel of phones the that year-over-year medium-size and grew combined growth sequentially small see the report leverage introduced The smaller phones for VVX compelling customers. high-quality help delivers declined PDMS was phone desktop offering demand expected. On family by

roadmap platform a revenues, we which continued not shrink legacy As our to expected. as view as video we our video and part moves infrastructure cloud, of to mixing do the strategic

solutions video by core medium of our and conference endpoint to continuing XX a is first transition, only and rooms in specifically where space. the we category in small future for ease we as and To rooms rooms family global estimated simplicity to solutions currently enabled. huddle huddle see video also provide use opportunity Studio, in space significant end, video plug huddle the recently that The any room and video size for play growing million growth designed Polycom critical. rapidly see launched this of X% are best-in-class of are market expect While is

and with UC video business. native This in our half double-digit with HP collaboration record-setting revenue continue utilizing total had business, the revenues rooms. have quarter a mid-size first experience remain and history headset growth UC camera, UC We In a X% on their the customers larger larger integration overall. focused Within strong conference another headsets to was our conference another Elite time the the for also providing team’s Trio, enterprise for headset high-quality of headsets solution rooms. HP's EagleEye of than enterprise growing headset was quarter for enabling Headset user Microsoft more Inc., seeking we Polycom simple experience launched set Slice, best-in-class for in and

holiday the BackBeat Voyager and are products We and products the and The had continue during Consumer to growing most both the PRO recently stereo unique traction portfolio and market. as the of XXXX, great a to the features both headset introduced seeing audio year-over cutting-edge nearly wireless XXX great expanding of that were to introducing headsets XX%] Savi gaming and headset all winners fitness Rig customers. from bring bring revenues innovative in needs XXXX quality headsets market, introduced with market. that quarter the came In to Fit we of award-winning very our season. shopping recently new the our true stereo UC wireless continue design quarter gaming address headsets gaming consumer with XXXX recently half clear in [above

addition around availability. first cloud In and Pro, and to our data the remotely the money. of Polycom solutions analytics continue of providers allows that Plantronics provide expand We’ve service relying recently insights PDMS and time and service saving latest their also features released hardware and gathered We Manager adopted expanding points, to services. over PDMS from its by manage solution of market has providers our critical These to in from additional use Soundscaping around enhanced world software management devices. months leverage incorporating XXX Polycom and endpoints data to acoustic support endpoints been leadership version five enterprises the our the to Habitat globe customers announced insights end and on productivity. cloud-based

over where Systems over and Executive turn pleased to our he veteran leadership collaboration Cisco's want Before General most incredibly we brings a emphasize Technology Pam, are as will an expert to Unified and I I oversee to of Tom audio group. President Vice and Tom GM Puorro XX of years’ welcome is solutions. as Manager that recently video industry Group Communications experience, team UC VP the call and who to

ability more and With opportunities who the like are integration go to into to over strength process. the of detail top is and financials testament recruit our Our that the to the us. QX retain turn industry a of call Pam and will Tom on talent exciting company Pam? that, ahead I’ll

Pam Strayer

Joe. Thanks

financial strong or board. guidance had targets met our across a to exceeded our Moving quarter and results. the We

mid-point million, of growing revenues XX $XX guidance our range. million, of Excluding the million of year-over-year purchase accounting non-GAAP above we and XXX achieved

Joe solid compatibility combine teams’ to video updating SIP adding a entry open hard endpoint In work target each ensure and industry revenue Group video As to the than towards we for and total growth to desks, noted, UC, are to our category, knowledge. X%. have with perspective growth Puorro, X% strength room business Skype brings at progress video audio-conferencing can consumer market the across fresh refreshing create Systems greater offerings leadership XX% in the our strong These of in and our made our potential desk phones growth fully of We’ve the headsets, with us with video categories seeing closer we our who to and steps we huddle participate business. new Tom long-term audio and been into category, bring endpoints. transition the extensive open

an of the side, profitability of addition we due quarter. the product higher margin of Polycom prior to XX year in On quarter margins led the categories non-GAAP typical points decline gross gross The December XX.X% XX.X%, Plantronics to mix. reflecting standalone over the basis in saw margin increase non-GAAP our

accretive million the power just of our was for Polycom range guidance standard high-end XXX the closed basis, and quarter high-end a our trailing trend points, the decline revenues. margin from and flow that acquisition. of costs on and more to funding to range was This million quarter, testament generated has gross to XXX and with December impact We million is the income global primarily due of above basis EPS demonstrating these doubled operations begun the the of cash MLCC of standalone XXXX. these the with diluted decline programs. a operating XXX However, XXX immediately the prior was comparative businesses. XX.X% XX-month approximately combined or of EBITDA cash million and of saw generation impact The even $XX $X.XX, million. Non-GAAP of of This EBITDA the than of through we we expect quarter year a Non-GAAP guidance whilst $XX June capabilities was to continue the significant at and shortage. investments integration two cash restructuring of

March completed current make XXX the already of January. expect have in in and We to repayments quarter debt half totaling that million

for the total of the of of as reinitiating $XX.X in repurchase since XXX,XXX shares program yesterday, our market Additionally, we November. repurchased million value close share

leverage both flow, be model our to targets cash we expect we state, We add and include our generation operating and annualized cash have operating respectively. to over expect for enhancing we which enable XXX we’ve – further achieved EBITDA million updated will long-term accretion. XXX our Once EPS million steady and reduction

synergies synergies annualized Finally, date, one we’ve cost for to taken integration. turning of approximately total run target January. actions XX million year in to some in including remain XX achieved over We on rate million cost having

next these achieved provide quarter. chain earnings synergy anticipate year year. savings the total rate we have to call to of synergy additional against have million inventory the our an annualized expect marks thus new from on which reduce the COGS supply We March for of sold by in cost achieve last been end impact the plan quarter we far a our to expenses, expectations an update start goods June of for consolidation, expect quarter. March run as capture run the of the forward. work logistics a COGS will in primarily We synergies of through XX the rate also about synergies marked-quarter We $XX contract going modest in pricing from and purchased but our The million calendar capture operating cost

to opportunity ever. bigger future, we of is As than in the look we the front believe us

third the you strong belief a forward at of look quarter us and Our gym. this We together. tools the questions. it we back you, earnings the investor on open for at and that, in to for a road, best Eileen. our our call at full conference Thank Plantronics Polycom that with customers better turn to or they’re partners with joining performance reaffirms for room, the Relations look afternoon. can again website Please materials. set our desk, to truly And investor.plantronics.com I’ll are collaboration a providing whether

Operator

Markets. the line Mike ask question. your Latimore Capital Instructions] ma’am. from Northland you, of Thank Your from comes question Please first [Operator

Mike Latimore

Looks look thanks. very Great, Things good excellent. there.

of of and you how kind evolution influencing I Teams little the talk to secondarily business? kind ecosystem you the phone cloud, In Microsoft headset and business, the know bit guess headset a can terms business. about is of the their there, that

Joe Burton

Thanks start the Mike. I question. for guess I’ll

it sounds it here, is fun. said You fun like

exciting having to time. in be business. the time It’s a We’re really great

two the through while Skype us. pause, a about industry. to bit quarter were is on broadly that slight we with headsets to working We the or So, Teams, behind a the we teams’ ago talked a in transition see business little for

So, we’re clip business well. along seeing very

a someone like when Teams when great Microsoft cloud-based really Mike we actually to cloud-based Microsoft or moves – someone Skype, deployment headset know you a As see a to attached. others, and moves

as So, and and on on Skype both side well. headset strong certainly business the with Microsoft on Teams the side on phone

business concerns there. no the So, in

succeeds, right were with Microsoft As it. we

Mike Latimore

and Great. the look what operating flow the onetime the know you if cash ex flow flow, out take one-time been And would the on you sort at then restructuring of operating quarter, those kind of cash I cash operating overcharges, just what items, in quarter, have and things? mean

Pam Strayer

some think year-over-year I me XXX comparative basis proxy I the how quarter EBITDA front on of for was that. don't combined give that have It increase in but that a probably now, of even a of in the good right looks. is to you idea million a

Mike Latimore

think endpoints that that because new then lastly, more traditional And the says, it next to products stabilize, in over quarters, I slide the room Okay. the expect business it on few the video huddle think says is product? the is I you or of

Joe Burton

It’s a combination of both Mike.

it, high-end in rooms building that like So, market. maintains current big keep market. products the remains both top just and future forth certainly in refreshing at the the and conference and are traditional rooms us rooms so make no – of our big People about before, will and that mistake a space that board

tremendous just we on on upside few and see while the remaining So, based tremendously, growing minus isn’t the a percent it flat room. the quarter, – few then market on huddle depending plus the high-end essentially a quarter percent, the

next And the and response the have had mine from analyst enterprise that the mean, simple. has plus as We at look When incredible out So, Polycom small with there I instruction several into get few of Studio, came literally we're X% and and I else penetrated product, tremendous. the in million then people will really industry Incredible look and it fantastic, you the just products room cruise have without room Twitter quarters. the it still two just manual, we just over that reviews huddle three I been XX around at grade cables, out audio, what rooms. said, nobody room first conference written, touching the home huddle been connected if you stupid reports the where for want manageability. got minutes industry fantastic delivering video, # think delivered. and see has early PolycomStudio, in on I frankly,

provided use, that nobody that I has So, manageability of seen. ease have plus

the the next the with turbocharging rate huddle high-end growth quarters rooms we really room see over stabilizing. So, few

Mike Latimore

am doing stupid is as it’s The that true. guys. for it one. huddle last Very I well, trio, simple. like very Very well? like it all sold one. into It that I last rooms sounds Got is that.

Joe Burton

The Yes, product. talking right to is trio a one you great now. I'm bet. on you

you can't Polycom. Plantronics and the when here miss get know, at You you on Trio

Trio really the is a So, product. interesting

a for where interesting our of room And XX, it's huddle the you conference a fantastic it drop piece really video course, such audio-conferencing have Media room you video table a So, in award-winning is, where Trio huddle touch being Polycom into big to in voice I product a a put camera for with brings mics, room. X, and Trio add the suitable conferencing well. remote you around into people audio-conferencing and want one device, XX it room suitable now fantastic the and as huddle Kit on but actually creates and a the

media the So, plus really count audio, being there's video we experience, a for and and in huddle bit now really, more there's but room our Studio as room option, really our third great good there, Trio them a Trio revenues in kit even to we huddle already come yet a are – Trio see and of audio, little as the video future. audio, as Polycom

Mike Latimore

Thanks lot. Congratulations. Great. a

Mike Iburg

Thanks, Mike.

Joe Burton

Yes. Thanks, Mike.

Operator

question your & Sidoti Greg Company. ask Burns line next from question. comes from Please Your of the

GregBurns

a Hi. are side wondering each considered expectations if I was maybe guidance. bit you us that more maybe that Thanks. on little in just can the for your kind of XQ guide, of the color give business revenue

Joe Burton

to you Pam, start, want or...? Do

Pam Strayer

a talk I Sure. little can trends. bit about

our couple at there's million], that a continue. to expect [XXX of for think midpoint guidance of we trends I QX

point quarter March all, Polycom. is point both a is, the quarter the December consumer. typically of course, and low seasonal Plantronics First high for for of

of top million. expecting And to shows prior FX our of will impact year-over-year year It's about the guidance the a about and slight headwinds. helpful impact the even for given – the midpoint. XXXX the negative full For consumer FY $X the X% total this FX midpoint over increase we're at line coming March growth also look FX, year, at enterprise for Adjusting separately. be to quarter,

is consumer season I quarter, just roughly we the decline said, a high December December because As March from and so ending. million of holiday to expect $XX a

than on decline sequential in there the aren't that in some some generally end X%, of our enterprise at December from December half the just less also quarter, categories, based other March. March seasonality The have be it opportunities There's but typically. to from which of decline budget flush will

GregBurns

Okay. the the of similar I guess in last flat quarters, And to then business view the is side been down for few Polycom what percent? the a few has to

Joe Burton

think it's a Polycom unfair I the that business about little to general. in say Well,

well of pardon growth in bring to long-term endpoints video are is growth all, So, on enterprise over and we that. a to the on as endpoints but across first of decline, in see the me, last categories, growth area video then not On That whole phones mid our we any video of of Polycom, as while or consider business. decline our were expect Pam projecting decline, said headsets, the where – seen that she phones. audio-conferencing when nice we a really that and headsets, talking in to infrastructure product room huddle I we've we then business, was speak combined consumer think, a products we've business important, nice in nice where to which seen we desktop of growth a really we've what – online. only audio little in I in few The And the is seen we guess quarters, all combination bit strategic, well. is are

correct Pam, look year-on-year way then really only declines if to will think the and that get quarter any in couple or the two we expect expect we improving. area be I'm I me last wrong, see like quarters. is which – a that and of So, out, meaningful video in And to

GregBurns

revenue? business still video percent the platform Okay. And what is that of

Joe Burton

relatively quick but a here. remember, percentage. Pam, it's I looking But she's small really

GregBurns

Okay.

just... I'll looks, she While

Joe Burton

we'll We'll get back a the on you decreasing back it you on know it is Yes. We'll platform Yes. in let but side. the either afterwards. it, of call circle or with piece

GregBurns

then some maybe might – on I the What's the sustainability your your the gaming. the to business And consumer contributing on overall about Okay. there guess how and consumer Thanks. particularly view that gaming business, be concern is growth? there, around

Joe Burton

in talked business the more of stereo we've general a couple stated, than gaming both really over year-on-year. to we've with consumer about we in XX% the year As had gaming and great calls. up up be the in seems consumer In consumer general, last as

competitors others. Our out games We're I doing up. just gaming a very to having we're minute. and sorry, there that for – We're my see melee-type train plus up, on Fortnite gaming great well lost based in are like a products, the new are be continuing We strong.

the couple on than last quarters, warehouse little about the of be talked full missing to winding a We we've as it two. there. rather prudent up of we're However, growth risk the would going with of

to we where can we're So, we're going in win. sure participate gaming

GregBurns

lastly... And great. Okay, then,

Pam Strayer

back revenue And total platform your it's X% roughly you combined services of company. question, the when about for attached, include

Joe Burton

So, product be services X%. and may infrastructure

GregBurns

Okay, perfect.

in pretty then, certain free there the Thank it trying guidance, you cash approach to your you. Can because company? appreciate over Do what capital the of us to balanced out you the a target on this have should company? for a some And combined flow I did get time taking. Okay. maybe you a you're leverage allocation, on you're looks be and the based view this as like, generating you help your What's frame? terms quarter substantial

Pam Strayer

for Thanks that. Yes.

So, we company as to our are still priority. deleveraging very the committed top

below integration some that cash. primarily close. including EBITDA-to-debt be yet to timing restructuring be months by and quarter. work were facilities done, some needs, We flow – which to acquisition take able are things, within cash other on and payments X:X gross XX depend to significant going really of pay is down activities could The the debt to future of this expect We

XX forecast quickly flow, about that months. optimistic as a of already to anything we But as and So, I the so tremendous company than cash I'm generates there can. like deleveraging said, hesitate what within amount out other we've I put

GregBurns

Okay, you. great. Thank

Mike Iburg

Operator, Greg. next Thanks, question?

Operator

of ask from comes the Eller Wells question. from question next Fargo. Your line your David Please

David Eller

Thanks afternoon. look of from all questions. When guidance, of looks revenue and the kind operating taking good again, and you're there? is for down it margin there quarter, QX is on December calling items like I income just of you fixed my the Hi, the there down XX%, well? midpoint X%, this XX%. some baked for at Is down degradation, that reflection lower drivers EPS Can in are a talk other or about of as cost sales the

Joe Burton

we is In usually Pam, So, talk particular, about this this not quarter-over-quarter. so much one year-on-year.

We this December by in a typically have tail good followed the large quarter very pretty quarter. off

don't I it seasonality So, year-over-year, what is Pam, a does or than for typical know, this us? like different look any

Pam Strayer

Yes.

I with guess I'll So, start quarter-over-quarter.

down. is the season about yes, We seasonality bit we're because other So, top the line. coming and coming holiday we some that consumer talked little out that in of have a revenue

because that like we to headwinds as up. gross back probably much Our basis continued costs our flat, revenue, won't in to better mix a consumer gross said, we're bit have be up are on points. combined gets slightly of gross back forecasting a margin the come MLCC OpEx, basis, be relatively down over still time. a so a and expected will quarter. bounce that couple margins I margins hundred there, Year-over-year, although, March quarter-over-quarter result better product We to as expect of of

going quarter-over-quarter only that's the is So, in me I bit the thing all high the really, the and profitability are measures to profit to decline top be of given line, other a decreases that think going up. sound all when,

David Eller

you introduced Got obviously today target. you. long-term And the EBITDA then

talk like to that? in of You of be the $XXX million. Can to about achieve expectations expect would what you look excess timeline

Pam Strayer

Yes.

rate put we our target, of target, and a operating adding now as out flow. well part when out EBITDA line as growth long-term So, measures, that we put top profitability cash as

which really of X, there those fiscal by XXXX. our All April getting XXXX, about year starts on targets, talking we're

be So, those expect here additional should we investments, And synergies we within continued where another strong XXXX us of some up targets and for that out. expect year set we've that product integration to a execution. put some

David Eller

your just think that I'm would kind $XXX then on also And I kind imply million you're $XX high of operating flows Okay. the activities guessing forward, ballpark of of $XXX of about flow If flow. $XXX million level free level referring million kind I on you where number included of that's in of in think operating that something cash that kind Is the going statement. expecting, CapEx or the flow to the million the in from a kind of lines cash of cash generation kind the future? kind so of kind type of ability. of cash

Pam Strayer

Yes.

yes. make I sense, numbers your think

I think that's right.

David Eller

from And turn gross like me, of then I'll mentioned bps last But question and back. XXX it margin the – it you looks you pressure.

consumer whether or any most that? that I or MLCC think there in to headsets gaming the – anything attributed items for it you affected be mix Were the all quarter, pressure. freight other it for of there kind of like gross in margin

Pam Strayer

Yes.

mix to by quite MLCC. down have as core will the puts see there after And but offsetting revenues like, small margins term, a shift the that's continue cost mix. quarter, we some impact definitely desktop bit going from bit. of shift, headsets So, takes do little MLCC Like from there's as is that, impacting that's an it, single always, quarter, a gross product largest probably during product December over be especially bring thing will trend and said, a we long a in offsetting kind December that's we and mix, that primarily the But savings of and and they're some the improvement that, but of video to product UC E&O phones headsets. our

David Eller

question for XXXX? payment, of The talk throughout kind rest XX million about XX the million last term me, anticipation And cadence from additional just sorry. of and then the paydown that loan as calendar you Got we go then you. one just payment of can the your

Pam Strayer

to calendar – cash, Like has this make is yes, predict we've restructuring to But additional that the cash given for cash take and which this we're point. to year. done, now me at to tough the flows payments be a to calendar flow be right going much. when I additional of to I work I rest priority. the after hard able any generates, March. that to so to to predict cash forecast just that make And XXXX, the For It's company some integration hesitate payments continue it's said, got expect going or how some more

David Eller

so the Thank for color. Great. much you

Pam Strayer

Thanks. Sure.

Mike Iburg

Thanks, David.

Operator

Mike next Latimore question comes of question. ask Please your Markets. Capital from Northland Your the line from

Mike Latimore

I the are that on there. fiscal would sometime or the to fiscal rate – out those just XXXX? XXXX reach that targets full-year you long-term set you. just targets run thank that Yes, of want kinds during anticipating be Is of kind for would clarify you you that

Pam Strayer

sometime during through updates. product fiscal portfolio we're the XXXX, end maybe Probably our after towards really

Mike Latimore

any the basis, are Got emerging or any of trends, it. And just in – then, color that a on you negative, break-out? can positive any sort bigger seeing of you kind give you on regional regions

Joe Burton

nothing Obviously, are quarters particularly. the across been are tend so actually, couple have the worth and really substantial. I last no little different trends quite think dynamics competitive a I of not see that talking uniform but Americas, really – overall, EMEA, we Mike, Asia-Pac mean, to about.

Pam Strayer

from. is – consumer call the would high I most where thing Americas one revenues is is guess, out a of come our I

in to consumer as impact mind. going disproportionately really weakens So, Americas other that's that or keeping regions, to just the grows,

Joe Burton

across But on now it's the side though enterprise right similar amazingly regions. the

Mike Latimore

are half? Got it. yet of half gaming terms is still they consumer or under it are the over the revenue those in headsets, – – And

Pam Strayer

consumer half. XX% XX% is under I to think, revenue. Gaming, still total of They're roughly

Mike Iburg

percent-ish. but bit half the in roughly sorry, XX roughly – quarter, more December little A probably

Joe Burton

Yes.

Mike Latimore

you channel it. on that got have like just opportunity, development? do already feel huddle room And market? channels for then Okay does of you that those require sort new the last, Or

Joe Burton

actually place a together, if Mike, where know, better you we this will. are is really You

high and rooms, huddle if deployment, XXX huddle, like meaning So, probably an was forth. plan they awful probably deploying channel end somebody want engineers system the that so that our has, a Polycom management of looks already help sales world-class can then a lot

that lot huddle a less looks boy, looks For know to a somebody fulfilled like do it Plantronics thing do like rooms, looking awful or well. dozens of channel It how to we channel. an

kind and through when Plantronics, to We've making through of that Polycom but a them we development understand through traditional no So, both. does out sure got flow does we've got we think new model, really going when we sorted a there’s it do. flow it been

Mike Latimore

make I or know I one you then you you perfect. or calendar think this the know thought size that payments And point? timing might just guess, So, you don't what said? some would debt you'll do Okay, at payments, you in, last don't XXXX, Pam, do said you the just Is timing be, guess additional more you size.

Pam Strayer

right. Yes, that's

this I flow generation in business think strong. the cash is

the be forecast. debt I but able timing think are amounts continue tough this calendar down to to yet still the pay year, and I'll to

Mike Latimore

Okay, thank you.

Mike Iburg

Mike. Thanks,

Operator

Your comes next question Jeff from Investments. of from Feinberg the line Feinberg

line open. is Your

Jeff Feinberg

I what very of you make the the get that was with non-GAAP please, much. nine-month to Thank I can sure QX you want run a that rate sense understood, just guidance so EPS have I the there?

Pam Strayer

just non-GAAP months one EPS. minute. Hold on, Nine

Joe Burton

really Give close. one Yes. us in We It's tips, second. around our We're around here. have that one didn't finger here. it’s but

non-GAAP months So, it the ending earnings was Pam, looks the I nine like, December $X.XX. share per XX, diluted believe

Jeff Feinberg

sorry, Okay. EPS? the number was QX, And non-GAAP the the I'm guide, for what

Mike Iburg

be of The would $X.XX. guide midpoint the

Jeff Feinberg

Okay.

talking we're a on about, non-GAAP basis, So, it. on $X.XX basically

if current] correctly? year, [that's the So math fiscal I'm doing

Joe Burton

Yes.

Jeff Feinberg

you roughly, million sense have that you you when much. what that EBITDA, just triangulate ballpark, to looking do your equal the Thank would understand XX a does to target And at EPS? XX months months, you how get in to get very if $XXX

Joe Burton

will? year What's EPS a look two like out, or you if

Jeff Feinberg

to Yes, EBITDA? be the exactly. $XXX What would the million corollary

Pam Strayer

a of be $X Yes. north I'd say it's going to share.

Joe Burton

Yes.

Pam Strayer

Roughly.

Jeff Feinberg

million control? finally, to your then much versus to what's well control XX well the of which understand within And obviously How that just your trying at to fantastic. are would months? saves, $XXX ballpark also debt that Okay, paydown, underlying within key be XX cost to business, looking getting the

Pam Strayer

Yes.

So, you track revenue for X%. continue two require bit mentioned We'll growth, some at us against of those. our the we've will than things. It big execute top also we're on a targets experiencing and what been higher little line synergy to

pretty that coming the help expecting We've video of strong now a help larger growth to with So, huddle other really UC growth business. – enterprise and we're still headset are we're out to And talked going rate. Joe are room our that's got growth. there's products rates that like part our about,

Joe Burton

Yes.

execution planned. to We stuff in all while the within market, We No in comes. control. some huddle share refreshes is some share our come fair need the would product miracle that's good it. do that, that support. the required news with good know fair on how think and I market and to I it is our get as that Pam, maintaining our summarize what's other are got already I required, markets out we've to solid will mean, it

Jeff Feinberg

Wonderful. much. Thank very you

Mike Iburg

Thanks Jeff.

Operator

are this at time. further [Operator Instructions] There no questions

continue. You may

Mike Iburg

call for you, early and Thank quarter you. fourth conference We results May. us our discussing forward Thank on joining our scheduled you XXXX today. next Eileen. fiscal to full-year look Thank currently for

Operator

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

now disconnect. may You

Mike Iburg	Head of Investor Relations
Joe Burton	President and Chief Executive Officer
Pam Strayer	Executive Vice President and Chief Financial Officer
Mike Latimore	Northland Capital Markets
Greg Burns	Sidoti & Company
David Eller	Wells Fargo
Mike Latimore	Northland Capital Markets
Jeff Feinberg	Feinberg Investments

Plantronics (POLY) 5 Feb 192019 Q3 Earnings call transcript