PLT - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Poly's Fourth Quarter Financial Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mike Iburg, Head of Investor Relations. Thank you. Please go ahead, sir.

Mike Iburg

Thank you, Operator. financial year call XXXX. preliminary quarter the Poly's fiscal of to results for conference fourth Welcome My Investor Relations. is name Mike Iburg, Head of joining Chuck Bob and And and are of today Board the CFO. Hagerty, Interim Executive Boynton, Chairman and Vice President CEO; me unaudited Litigation today forward-looking The XXXX. Reform are Act information statements, of provisions and Safe the of under Harbor presented the which discussed preliminary includes made Private Securities statements release are XX-K The earnings detailed our risks to and XX-Q, press uncertainties most and such today's and related presentation. recent in Throughout we our refer specific QX to earnings today's will remarks, Slides presentation. from This our presentation site is available Relations investor.poly.com. on the front page at Investor of Web all noted, otherwise same quarter will the comparisons Unless be to the discussed today year. prior in

results measures refer current are provide a posted we measures. along the additional materials will materials site call, that between also Investor those planning an with provide comparisons on These call basis at the should to meaningful previously reconciliation explanation measures our to non-GAAP results to management GAAP the that, to Relations on over non-GAAP applicable discussed uses the and forecasting periods. nearest of now I this for You indicators financial are measures With for These Bob. Web as today of and future investor.poly.com. reported turn and the

Bob Hagerty

Mike, thanks joining everyone us for today. Thanks and

remarks. Before I discuss a our performance for the make few quarter, I'd like opening to

the the to provider choice move of be is endpoint cloud. to Our communication strategy platforms as customers their

to to work. several many past pandemic For the employees the forced months, the remote shift around has of their businesses world

productive. employees to provide home dealt was with rush there stay with to tools businesses work the from needed mandates, As these engaged and a

home, have the accustomed grown to the tools many collaboration office. that of For many meant the in companies duplicating employees

become mainstream. the our workers engaged adoption fundamentally keep widespread has work platforms concept is video others Through key room connected. is the like the into moved number the In past. an the And after the tool TAM The higher view, Poly beyond and and work are manageable is shifting. remote from likely set office our video remote home which Teams, be collaboration these significantly Microsoft employees and workers remain result the a long-term and to Even corporate consistent conference Zoom, ensure net dynamic lifted, collaboration, collaboration endpoints. of of will Another need professional will of expanding growth opportunity businesses to will have a of mandates industry. than for

on a Page Turning finish results was to year. X, a to challenging our preliminary strong financial QX

took above cash strong a backlog allowing aggressive overcame revenue us of weeks just expenses in greater exited the and team position. range. our quarter results will moment. deliver We Chuck Our with in series six the steps supply disruptions and in a discuss detail March of a to chain to manage earnings of the high-end guidance very

a minutes impacted company. brief take me a how few and provide the let update on Now, COVID-XX has

X, to historically for saw continues Turning today. and which we began enterprise in Page March headsets, early high demand

the video On we the resumed implement somewhat of so the solutions shift reconfigured April, inventory from our an operational has popular COVID-XX increase offices, protocols. after production that in-house to businesses perspective, channel a believe To the hand, facility world and their other on be in the headsets. Mexico of a inventory From vacated that what audio we as in safety more bit personnel. and temporary headset to manufacturing it site require on-hand was around our saw March some provide the factory color, strong was both and demand in most depleted

possible. backlog Our to as quickly operations aggressively our is manufacturers team and working suppliers with the contract as key fulfill

specific to high help additional These steps us production current at increase contract demand. our of and headsets our additional we've volume of tooling expanded will capacity dual meet example, allow headsets purchased For the to the manufacturers. secured global sourcing

However, mention to the to with even taking headsets like productive. governments and while be an quarter ensure healthcare backlog. elevated from received are to necessary they certain the organizations I'd prioritize to these safe orders responders, also are actions, our tools and with that steps teams first we exit in June expect to short supply, have

For XXX,XXX our headsets example, centers. over and are XXX call connecting emergency dispatchers

world. Our the voice and telemedicine many video endpoints leading And around around solutions our at hospitals the supporting video are and connecting globe. of education both world leaders remote and universities are the

internal a technology. have strong for tools our remote of It have DNA for of our always long been We employees collaboration part work. years our past and has creating history users the been of XX

to As a were from our home. employees work able result, easily to transition

on, like months, several overall year. late the issues resolve a to past business. In we minutes few take we've the to experienced I'd last go-to-market Moving to actions the taken discuss

While beginning improvement. a of signs see we still of lot have to do, work early we're some to

a due demand progress with working more and is them. communication but our has for are Our pandemic. organization new customers with With to sales motion we to customers markets very as improved gaining we market specific partners have capturing work do in additional the to hard We've traction sales areas. even to our adjust led which to the to opportunities. we'll keep broad headsets, continue in increased these across and and we're focus made We've

that closely meets combined portfolio working needs. with us are partners alliance offer a strategic Our customers' to

like to that service and We of we in Vonage. time, portfolio the LogMeIn, new devices. where supported are Voice the same have Zoom, a RingCentral, At emerge strategy are alliance direct result of Microsoft our XxX, with and strengthening certified with broadest opportunities we are see and Google IT starting particular providers our relationship

systems partners, for has Another channel processes. we company continue our where and been the our to focus improve key

under one program partner interactions global the everyone goal a all new together program simplifying Our brings of with levels. at

to marketing well rewards making program our the selling and our are for our training enablement. easier We as sell of The solutions, portfolio. it partners partners for and new as for

easy Web provide corporate our access local resources. which product includes and site to to information, portal details, partner technical and we new with month, Finally, quick new launched last them

the remained front, bringing our products On design new market. product busy the to teams

a we range that well. designed have While remote those the for endpoints as broad many of work solutions of office, are support

Our wired video work of both and the includes quality phones, industry speaker leading high anywhere bars. portfolio work and wireless personal broadest range from enterprise any cameras headsets,

customer market our As and innovate are and demands product technology. teams with conditions features evolve, market relevant continuing to to solutions

conclusion, in We portfolio have new categories. strong industry market. launched 'XX in have roadmap addressing fiscal position and an be of we product each leading with growing an scheduled our aggressive each product for In products large test a to quarter

in strong further market. are base and alliances leadership evidence Our large customer strategic role of our this

our seen to the expect the and business demand demand way and return profound to in the for past improve around In world. elevated phone global see to solutions. enterprise few continue is for conducted change we've a video headsets months, the office We our the

our As proud opportunities need team, to we turn work call provide endpoints I'm the I'll tomorrow. and that the Poly anywhere financial to today, they CEO our presents we Chuck work over the of as to results. with continue together our market from now customers collaboration search, discuss on capitalize to

Chuck Boynton

are an us environment. communication, everyone by we suspending like debt million update discussed economic confidence steps taking financial Thanks, including we cash ending QX of dividend to provided position liquidity, voluntary we while quarter begin business to give navigating and XX. that maximize managing prepayment, flexibility aggressively a April our the reminding These costs. In Bob. the of our the and steps XXX with current the deferring along I'd

channel our headsets unaudited Turning March drove improved us and XX inventory, our to as preliminary Demand on to for flow reduced a allowed our quarter year. of mentioned, cash April was guidance with weeks it reduced the from to Bob revenue enter fiscal results range, finish six inventory, our strong hand backlog. operations above

continues exit backlog be but for in QX. fiscal QX likely will be strong, products order to should to elevated with standard we fiscal most delivery headset As flow back times an

discipline and cost worked year as category of this by past the geography. fiscal XX way Our Page benefit our focus provides we became revenue challenges real a macro through QX. on

voice offices video remain a supply and line both the and to we bars mandates. systems can headset video demand expectations, place related production closed QX, strong ramping as large you were in our while constrained sales and our see to As video with new business pandemic. through our quarter saw was in headsets in were slowed EMEA as increase Geographically, shelter due our dramatic Americas the legacy in the

were impacted COVID-XX revenues negatively in were as implemented by Pac Asia policies our shelter place However, earlier.

also like our the in portfolio. our As to assets category. expected, sale in that premium I'd our mention the historically, line consumer gaming provided This to on With enterprise and is March, headset we product closed restated we have the on we mono quarter continue a eight the of the also we balance page, we product and of reported consumer streamline that line today's earnings which Page feel we category, current XX. fit. moved was reflected presentation, better trend a into

economic gross holding a by supply the just prior getting quarter, down disruption overall impacted next margins factory related Turning unfolds. tariffs. margins utilization back in to during were to We've gross Page under COVID-XX an we factor quarter. now operating continue our will as to managing saw impact costs been the expenses are And under also chain freight levels. increase be as utilization to volumes aggressively Factory XX and

March a significant travel. compensation, and in variable hiring Our reduction quarter saw

over XX% comparative we operating combined year full expenses 'XX, the For fiscal reduced non-GAAP on basis. a

end, that a structure our office XX to our in that quarter, book keep to cover will charge we working and expectations. million To June XX revenue headcount reductions. restructuring aligned We continue of expect million to cost to closures

with both the fiscal in forecast. quarter QX levels the was XX $X.XX with expect we roughly our earnings above share reported per had even expense to of we latest the over in OpEx million our However, EBITDA be today. and cost consistent reductions, 'XX fiscal

and the Regarding the affected our quarter, year XX% for it for property which intellectual during tax rate, read up we the pushing 'XX. tax XX% rate domiciled quarter the non-GAAP fiscal to full our

be goodwill impairment share intangible currently the in As in to to our in in resulting the well the include discussed related The impairment its company complexity million company of preliminary as property, of today. a connection overall finalize company's results in and materially is XX-K, expects filing the operation the estimated XXX and the differ finalizing plant to with in and results complete charges non-cash and sustained on update, of business charge, of provided currently charge impairment controls, an analysis or expected equipment around voice to non-cash to and the from so its is assessment, the analysis which a earnings decrease the the results uncertainty impairment COVID-XX, the estimated filed the company's to of from to financial company's decline business, be currently to the $XXX Due related million assets as we a be price. the unaudited the impairment design Form internal of preliminary process X. including still the company's may June economic amount actual

contributed working to Turning Page flow since inventory cash significant quarter acquisition. the a million. the This the in in capital XX, cash is operating for flow highest Polycom to strong of the come reduction company $XX the primarily

to balance debt quarter and of deferral over year. highest the the end addition, prepayment In level to helped push cash our a

We our maintain decided to currently prefer the June given net prepayment headroom on undrawn year X.X the significant have market position fiscal we current but We have in billion. related a of million covenants to was end, revolver. not quarter, EBITDA as Trailing our and was and the significant XX yet $XXX months liquidity debt environment. on balance

to in stated in have expect covenant have As the 'XX. past, fiscal any we don't we issues

can and However, go the the away. we reason, financial if we covenant terminate for covenants constraints, have some revolver

to Turning guidance Page on XX.

running capacity, through inventory. I headset very to numbers, with the our I'd disruptions context to supply fiscal however, remain for April across we some We supply Before Today, guidance. like normal QX our are chain and entered specific generally suppliers then due the additional pandemic. experienced in low products. factory We constrained offer walk our at

impacted With In customers is product addition, that are context, to staff shipments. having guidance our our follows. other QX office not categories receive our by as the in

gain XXX be revenues of We range share of to million $X.XX expect XX net be million XXX to our of net million. a non-GAAP million. And expected million in million to the is XXX expected of to to revenues Total per share. per and $X.XX XX adjusted EBITDA a to GAAP range in XXX of loss of EPS non-GAAP the is

operator to supply factory that these to overhead like of freight I'll our include utilization impact chain the and mention of that, due of turn I'd to Operator. volumes, the estimates challenges guidance Q&A. incremental the reconfiguration. factory call Finally, to production to begin With ranges the the under lower over cost due

Operator

comes question first Your from the Morgan Stanley. Instructions] line [Operator from Marshall of Meta

open. is line Your

Meta Marshall

bit improvements you then to some the I just wanted about channel. talk the and inventory, secondly, previous see could of of to maybe some headset little work Plantronics through next some just something you. that should channel a of the of couple that reconnect of you as Business enterprise you the as of well. feel with older on lot the cash kind of is more the or Thank for kind a inventory on if And quarters where a of if or source we of work over think Skype product

Bob Hagerty

is this some we least of at that cover things a and level, Bob So addressed. let me the high at

business. We do in So, or I some coming company, quarter we around specifically the the and headset early find did February. things coming coverage into the to had into did that in

channels, overlay on the our point sales let of with and being questions cleaned focus paid And give Chuck mix to it a that and from me hard And you So specific of information, we shift how let more been to has did to questions have go salespeople call and sale business. have we've over about in around the but been headset have. some color to to have sales some focusing We will some over issues specific then, to of able out. then on I you sales primarily really generally just more shifted visibility working up. bring specific me do gets

Chuck Boynton

revenue QX inventory to UC had the the our and had inventory, the channel XX went we've channel so And the hand-on QX. runners, our from quarter contact center and XX specifically headsets legacy already channel of to our down. really, XX XX from that out So or and million strong million sold both already we in headsets increased high headset taken business and a -- in really on million million generally that's

found of before. And effectively which six with ourselves so the company weeks we had really backlog never

speed factories on here levels full increase keeping to we're weeks today, our down we increase our the focused Mexico running business down we products selling the are in definitely of sit demand the for have were and the headsets. headset but mostly on focused today. we need As been our couple supply on has that at of hand, all We but we're certainly so a inventory around short-term

the receive started the XXX, more and tools X of phones last the products in little been shipping series in not around products. the new the collaboration Secondarily video whatnot Studio have desk XXX, challenging, are which a office just But quarter. those rest to bit these people

Meta Marshall

Got it.

an versus getting is is environment kind previous just or channel of a guess Just going I current to of old just salespeople to reconnecting investments been that has forward, kind overlay sense of and situation sense feel I conducive think sold right clearly the I be kind just you be to get issues right now? like I a all done? headsets some of trying given those very of now expect would kind needed of like with of done, partners out do on work obviously but very,

Bob Hagerty

it all Well, find we us is customers cover, because some I gives and new we're able the then customers see and channels some go that high. great new have because had, the quite demand think to

difficult shifting we'll what that those us the think can on is fundamentally improvement only ebbing through and here. part are we're the and flowing. see demand a transitions things those right of region been done. road always I depending channels. never and substantially in that, base the for from and I marketplaces, There's But say making quite But touch with good think work the I opportunity in we're So all to a it's how changes actually on and you're

Operator

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

Your line is open.

Greg Burns

Just a inventory. the channel follow-up on

million So, you charge in can -- XX two reduction like channel how ago. quantify inventory you took quarter or a

replenished need has Now see that QX? what that Can we inventory QX, is? to you that channel been be do depleted. And quantify in

Chuck Boynton

of sort sold disclose and channel too we're but fairly down inventories significantly low don't QX in inventories and channel quite headsets. we generally So out in frankly the they're

will that replenish a to that want inventory definitely we take So while.

prepared by aggregate I'd fully other But may all in should said There is we even As up. areas a caught against runners high geographic channel little by and bit on are through some number the be it's They're probably say customer. not side QX, of though it be. remarks lower different. where a the of

financial end year lot believe So it better get on and a and appropriate it's make through everyone and went that by come product a invested we're last but off the based where hard right across of focused all we capital at by supply reducing level. work -- Because going up may the of we and a reducing to inventories in on the our we're -- little chain. the inventories reduces channel bit, channel on equation to fundamentally It keeping us inventory, for not channel the better will -- inventory to that's geography. so level the pain

Greg Burns

you give by thinking to guidance, Relative you're you get segment Okay. your maybe how a little how to those revenue can ranges? color on -- us

Chuck Boynton

Certainly, so simple it's a fairly equation.

did we five work place in that and work of And ago in for make five or and and two main for are so weeks, we're safety our call did, to the Mexico phenomenal health reconfigure a quarter. all the weeks team six was it with for factory Here people they offline proud of a safer our it to weeks job. to

and disruptions some with our our of had also ODMs. supply CMS We

partners, channel vast constraints the much and we And how from can we much have our is are these in webcams, ourselves the build Eye, so Eagle lines, the guidance effectively can very think of our and our how those account as CMS. Eagle headset our professional demand. takes The now of how the constraint runners that high high much into Eye the receive supply mini, we our majority real right on

we so make, can we as know can inventory desk as and actively we're phones many And plenty of and those. those sell selling you we have video,

really real of expect do we do So that the the supply seeing products. constraints? that -- is And it's the really simple the from guidance the equation are we're high have supply trends what runner we constraints so a sales orders And What placed? our fairly standpoint? for a impact what

Greg Burns

enterprise you're Okay. But a of color can growth you assumptions your video? the maybe us bit give voice little for and embedding on, headsets,

Chuck Boynton

breaking selling constrained whatever we're QX are make for they can we're we not so supply and that because We're so, real. obviously, out and that

the it's I going think more what's year, for to happen these people a return the office to little uncertain with place. back

us both of there's for for think to really geographic right the balance uncertain -- it's I equation. QX, it's supply uncertain for that then the the constraint really is like. it's year the workplace -- and now. what more the return for certainly for year, And And a somewhat looks

Operator

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

open. Your line is

David Eller

curious a the I also on in hear more on had about a the questions going headset couple what's little headsets. bit market. to I'm

a could you just iPhone and instead need of centers, you've VoIP on of be seeing also you're who whether the may like already of if kind a continue then an what phone just that service? like in or from UC an business, maybe about contact And If your or product year. demand a corded using, you legacy set an boost surge for should home that, open business, or about talk employee compatibility the set Android talk there's from work the the could throughout big there met been

Chuck Boynton

Yes, certainly.

as So add and I'll well. can color some Bob start

centers repurposing be they'll It's headsets, in center, contact to long-term like have the strong employees. will for no we longer think I see they trends, headsets, seen be things are sharing own won't new pretty a them increase their the On contact have demand. hard

call the in I it centers the I sound home work bigger side standard. provides all are will UC call with The a long-term well like one their also professional those and UC our noise the contact from of business. of remote that in So noise contact cancellation, in environment -- whereas household, as they from in active as that increase doing if center home is think demand it working fencing work background a bodes from Zoom the Bluetooth people work. a or they're using you computer, And think ambient Team's the for the been has And are picks increase the coffee up are home that or has have interoperable shop. products great things people with

There's better of the proliferation headsets why, we you're of demand a the are profile way experience. think user this see and more Teams and whole technologies. will had constraints experience. certainly and those office, provides deck. any success and as the it as increase ahead that the of we've business, there historically the to continue We the great that people people just that increasing And Zoom And and are think UC better those return such using is terms a platform of actually I have series -- possibly really in and the for for even benefits is

Bob Hagerty

just look context little on it. a more Just

of One facilitation and office work to it migrates while. so to from need I of things think think and here the those I home both a we that for from work quite I in a is and And or continue people to think office the the hybrid the in remotely is where will while. are that for going both understand home the a home the

on becomes in way puts are demand. going who that bit. going so them things that a there phone IP be some One, quite over on. and and a And will today, be that cameras it's you cost as health some there I people enterprises room have facilitate more obviously is are bring finding our demand will cases home conferences think they to not headsets, for in savings two need that pressure who their also folks it what and only is is safety on of offices to but a have be work on issue physical and products And to plant, distance upward but a spaces huddle using Voice are that. to this And also

David Eller

headsets, could maybe And positioning mid whether high-end? of if value of so business also then portfolio in range versus falls majority comment where the your the versus like are you Great. price of of just your us on you remind could terms And for midst headsets primarily whether value belt out sold or in kind opting of are are the a of priced those are due customers points, models higher tightening to and forced and maybe being of orders? out they back stock into price lot

Chuck Boynton

Yes. I mean get competitive are markets I seeing hands in many and buying think they the on. us and all demand are in whatever increase their strong landscape a can

Our positioning players category. the is, main We're of there is in two two players. this really one top

of We I so spectrum because address headsets products as have the are the entire products more headsets got don't everything And as sensitive, value-priced. think high-end from that price these to and are the enterprise we've the categories. other

about they headsets very and the feature of price and less and sensitive and high our is gaming It's of is reasons more One we business it margins the price enjoy got quality are sensitive. out functionality.

have that suite and products We stack. address up down of the a

I having of can seeing so whatever you'll normal at market this are and top is think sold that certain markets, as are what the most think other again, in the cycle buying us And out. people share end I market. people they see the And you're [indiscernible] in the participants replenishes,

David Eller

you to obviously of doesn't covenants an kind with then It which I covenant strategy cash higher. a hope some can that near-term talked down sound balances, I you're with maintain color, revolver but little the mean terminate I is debt issue, then become Chuck, that's pay any more deal you touched comes And your issues give to guess risk. goal, you on Okay. and committing guess about could to I you a bit

talk back I So of of through sort could you year guess unfold the scenario. how up probably maybe us you see a more might or

Chuck Boynton

Yes. of million before we cash with mean Well, we a $XXX of we about, XXX XXX. or talked needed the are to sitting run and here I business minimum

in flexibility. cash over maintain best prepaid revolver our year. undrawn in voluntarily we've sitting flow had year quarter highest a currently and not The a we to debt we're is think cash more operating had had on So position and the over the I

pre-COVID while aggressively paying already. million been have to million, $XXX plan $XX was our down so we And delever, would

we and that see weigh want to issue we could just if And covenant is new we new don't have issues did, we assuage the our amount don't covenant don't that we and cash really, a so million still just we really us. need I the want don't target. I I any -- a minimum is X we think, say just recommunicate $XXX would doesn't goes on to again a and revolver concerns. we away, it have of terminate

expect continue the throughout to cash year. flow to material free We drive

a how to give of will right then So just cash ourselves and we more free think we significant much that we and debt. pay can generate when flexibility. down We're amount to not committing now as

Operator

Mike from Northland Capital. Latimore comes question next from Your

open. line is Your

Mike Latimore

talk patterns, was stable day? you mid-March, demand sort voice demand starting or bit areas Did in the is maybe about demand since for video a talking seen in the and terms mid-March? kind little think remains been bit elevated, and Can you it the mid-March a have I to it's headset of elevated about, of of the it two stable? Or just those drop little what

Bob Hagerty

Will certainly.

I think QX. strong I'd say first a we quarter for desk that phone very had

Our QX. $XX $XX from million million in in QX desk phone business to went

with I desk some headset still really point see really, of the are PBX either or in connected that Remember the And when we a QX. a proliferation phone leading really that have, get XXX a continued replaced line think there you'll awesome back million had desk think phone. office, people we at strong phones. phones SIP phone. the will out And there the Team is certified, CCX So I

from little quarter revenue video the on knew to the challenging we more On supply of And were would $XX that we be million went was million series launch. we a we are X constrained $XX new side, overall.

We on-prem strong the QX. have fairly We're seen still systems in in APAC.

the in cautious because bit receiving they're office, aren't a and As QX here and QX think we in on demand the environment, if we're sit goods. more the buying I today not people

think I fact, generation in new do the And change. video whole a trends people training, of we're don't to really that conferencing.

will bodes video the long-term an PC that unclear better to having think on bar people and I working But people call when that experience. a normal USB I it's think this your Zoom of bar doing remotely. based XXX over is Studio way well a like or just realize solution demand for video sub-optimal a is and return

Mike Latimore

just Great. number you quarter-to-quarter? can desk again the -- give And phone

Chuck Boynton

QX phone and number in $XX in desk million was The $XX million QX.

Mike Latimore

products a Teams, thing. new way kind of Got from lot what sort you've break coming of a certifications, fourth of new it. Thanks. Is then, Zoom is quarter these the products? or that including percent out of to pipeline launched the And there

Bob Hagerty

strong that breaking done I video haven't a we the revenue will year. Studio we had business generated results line quite quite of in $XX $XX say outlined but products, the our pandemic, to not. things our that QX shifted would number just revenue is had earlier that sorry considered we from QX, we that material this of so which given by sort in million a approach material QX of because for that year, new the we results. out We just Studio the we change line our to And million, thought in be quickly We've have yet.

are it had the more given And what happen number, QX from will so supply. in could we working and to say if higher It's we're people home. hard proud that QX, of be

Mike Latimore

Okay. one, what using fiscal rate And should be 'XX? for tax we just last

Bob Hagerty

use XX%, that XX% continue I kind would range. of to

Operator

line of Silverstein Your next Cowen. question the Paul comes from from

Your is now line open.

Paul Silverstein

TMT had and call, we I this I all Bob and you everybody appreciate you and taking else conference the is apologize the repetitive, Thanks Chuck. our on today. questions if to

is arises sold we're the are your the So question on-prems. did take cost to my likely over And together to want I this quite questions, downstream, to are video in to your about new fewer. think our work back I your would trend work I are same in how home, would given a crisis, saw few is, economic survive that into same it terrible the video offices. on to fact of at video it I the step you due organizations the million next missed current it I helps, time, There so enterprises of many there favorable binder, home employees hand, roughly call, other endpoints unfortunately and products back, are heard if that shift to are endpoints numbers help I shift announced go particular number headset together not and this later correctly, that obviously sooner play demand hear try Those we if this, of think about we've With take of about be in us a endpoints top numbers workforce do looking like headsets. plenty working apologize. if obviously organizations relatively various be that the the business in market, right, I tie years. opposite. peak the for what from be with for this one employees The will to of impacts, But of ongoing voice sounds employees $XXX number I and home, of it's companies part I crisis your on that $XXX think or and the the we've how finally the it what are thought organizations that to voice consistent your got trust many about that you to the not is I going less size, and is But will heard the aggressively. headsets, I've you've to going to fewer million got a and I you're organizations, that ramping to just business trend going and thinking health, they're for quarter, from relative to enterprise

understand most campus whether And as for a at are work are that proposition, general demand and or to in endpoints talking at so those be else to set for you not of homes case our desk would some typically I will or phones. home, those be desktop infrastructure, not anybody better or a of the us video you for endpoints and use on-premise phones buying But about your you switching us else, that video or from organizations those experience. we're buying think who are anybody going from

think in business. a the unpack very that are are if where wrong? I'm of it of for things would I can for relative tell be to process. share you your at have set you video enterprise pandemic lot hand, and terms good variables, to and business you is me that how unfolding. wrong But headset clear looking would I'm recognize, as On Where other do endpoints it think Again, enterprise how hoping and desk your the in insight could there thought as I this unfolds mud I trend. this phones the today

Chuck Boynton

I think far theme I mean, I general Well, your off. is think not Paul, that Yes.

obviously that market video Asia services headset conference component. business of generally not attached to other the revenue maintenance and impairment it. good phone is We're and saw is impairment. the So is would all earlier took correct, product business you're nice far down impairment going of and been, the desk the I I our think or off, to brunt phone still discussion you half be a think our if took that that's market, in it desk The stream of bookings the solutions of you're for half has right, the phones, phones, about conference has be important course, legacy and video too seeing an

XXX sort I be and away, to to And phones so more going not they're million think that SIP XXX replaced or that in think still thesis the by will million of you're get desk that headsets out short-term challenging. but you're right going that's phones on I there right, those

about and On headsets the we've other hand, talked over. over

new can and I do and I very great think have for our bit is one good conference speakers training whole the attending that of receiving are presenter a video XXX in long-term experience Studio very, good earnings and and huddle video our a room well CFO and or our for we the microphone boardroom think a use Teams solution way would And think cams bodes both an I having video hundreds bar the technology for in home. far of really definitely is a little end. better well to not be really would camera video solution, of XXX, web a video I be technology, this Zoom but bodes headsets end, a from of challenge anywhere you're work using I think because shift that home and people and basically for, a especially from bars millions PC whatnot not video are or a the and the just conference, financial

will I and that years, market on while evolving I think market but rapidly over I changing bull this think is quite there real future. probably And the case in strong is And so, unfold will think and video that is the side. be a

you're I and net right so headsets negative think net phones positive video for it's And balance; think I desk phones. a conference a and on for and

Paul Silverstein

did terms you at think working video now data that million if wrinkle, see look Again, and the in now of terms actually have of what that and environment if with sounds hopefully we're I that's see way endpoints would months of makes, as little that and you out $XX virtually you terms see. and who from of you But all a here I a workplace us access what question endpoints home, you have did would already you extent good to how in challenging since platforms. are for asked nice congratulations, we're and porting can so desk going of I meaningful ramp months to appreciate like obviously have those video In are demand a of bit more you it us, enterprise everybody a we your not demand your suite broader workplace I of growing the sets in home trust our finally for new do have ship May, one a and suggest just addressed to little you're it's home normal working employees but all you what I number it, environment. it case to finally or your March, to headsets, April, for But a of so three sets, from in makes in many of and apologize you desk else. from

home in suggest I employers the reporting or what apologize that to side? may months would the the video real in demand but desk mask direct home, recent set the what on end And so would again for employees extent the workplace it from that see employee the question endpoint you to work be, reporting, environment do

Chuck Boynton

on year, at a it's dramatic increase in the unfolds. I how tell the from home a incredibly ever think headsets I And video, is see Well, level, for think early seen I've all work only to in that have headset been it's and new certainly the backlog I side. unfolds it's a highest to too our phenomenon how too the of but here a the then company, video in the

I I if any Bob, it's to you share. want point. at you and don't think color early phones too to know tell on have this video desk

Bob Hagerty

Yes.

undeniable. think trend are that I look a is this

pretty The has the to hit stocked first that out thing in people first this drove were And backlog. through basically and roof headsets. thing was out, this, the and and reaching we is hard demand are We pretty buy right? fast running

have clear and people working too. that outstripped webcams that's We go headsets, talk want so in had small So from demand talk that they of on business top a home on sold immediately out it's monitors it. to to and things

maybe it might came thinking So America be say desktop And and going I'll associated video. another than different to to we've which work demand right be about. to back super wanting will they There as gets than back period long traditionally not to people right when decimated fairly video to really airplanes. is years was currently very the different -- switched seen in associated outside that offices, came first be will are profile it's crisis, are offices on Southern generally in are be tool. doing times this now, in and maybe people get with important to maybe when coordinate kind that's with or that Northern it communication now. hit, they is Europe, the and When but Anecdotally, they trend pretty multiple and high things different to clear or need America, Asia are that people a things a people lasts two these used it X.X financial because of of airline whether and decimated it's years. X/XX

are desktop so to be going implemented, normal specifically natural TBD. is to That new we the a So be business. products on have communicate in people in will continuing think implemented that I said, way is be offices, trend we can out be of to some the in implemented and believe to the will and phones, those line do and conferencing offices remote

there forgot they that your have if it they think and a put desks to back will them. especially desk That's made, come I and will utility hoteling is I that regular been headset install, you're telephones on think will a will the made, eventually there will phones around there undeniable. long-standing you right because it be hoteling event that's people

so I will do longer well. term think And in the desktops that

especially to home will with desktop a and to you're utility mean, workers. go will to go spaces is implemented, worker near I is remote be think is video and stay to term, and after got it remote be going stay. to everything a office in I to products for the because here I the think -- hybrid when primary you it's a even the it's as in vaccine real I need communicated enterprise. hoteling the the think to going And communicating video office that because

Paul Silverstein

I question if last One for may. me,

don't the indisputably I that some I connection was that if but or did the because had a all tide, you sticky that me some these if I which it's enterprise it's Poly But as business between of not all you wrong, now. specs of are than loss. if the side a know management I primary the inventory, enough, minimis enterprise Plantronics good customer headset your matters your importantly, that portion are relationship But timely regained products correct the more permanent more combination I'm loss. forward, On or and relationships headsets enterprise terms long are trust the your and exactly in trust how a terms and in when where competitors relationship looking in factors. are way you share these cetera of customer supply relationships caused side which think long very et consumer these delivering managing de I the chain side to dominant that relationship are of is technical positive rising disruption your as think compare positive the you in

forward, or goes demand degree share? opposed of is question up is So assuming of tide and gaining market what the share a matter is it would really will the pretty is, as the look we you your to it now ride where settled as work home, that losing demand out from it's

Chuck Boynton

that it I Paul not consolidation first earlier, Well, it a was mentioned that issues. you was we think, channel issue mentioned a part supply guess a issue, wasn't I supply the it

Paul Silverstein

apologies. what meant say. bad. My to My That's I

Chuck Boynton

satisfied just the I loss was to it sure think make clear. we're want with share took. that don't we I And

think to got technology, get great we've leading force, we had extent on return we're We've play products. an think great amazing it them satisfied with I back. and are that and share fight but year. execution want that to to last got extent we've say we out, to and got market doing they're back. and some In sales self-inflicted sales We've and those a but to got all that we the well, think want another I To normal not technology beat share but happened will will it's I was what this get of are hard not. commoditized, want employees how to companies environment,

Bob Hagerty

around don't or our one I earlier, we say that you're I'd headsets thing are mentioned know back. if specialist adding we not,

we specialty consolidation channel it we're came, everybody back. did that get is and rid anybody bringing can assumption sell sell was that there of an One the some -- can headsets the And when and everything. of there around things

slots. we that ahead organized, The were people shifted have get had that trained, situation the to extraordinary get a this other been who roles. of the good bunch on allows And demand is also so people us get company in to news them and go

other The have we that of multiple thing long products. selling a some -- legacy

the on the the room people really on room. you if an So large and desktop, only deliver can video nice things that conference video the phones, one this desktop of We're headsets, in enterprise. are huddle video in

So and strong alliances. we have

tail Microsoft others. of and think and Zoom I the long

to XxX Voice and RingCentral like all and LogMeIn, Vonage, others, partners and numbers add ITSP Our of Google that.

Paul Silverstein

guys. Thanks

Bob Hagerty

more appreciate I question. Thank got We I for think much, Paul. you one it. time very

Operator

Amit Your line the next question comes Evercore. from from Daryanani of

is line open. Your

Michael Fisher

Amit. into XXX This wanted little is to wondering, just just Michael I'm in dig it's more. for we're on quarter. Fisher about a the seeing the bit I inventory

saw we kind that's getting year. So of the last levels toward

managing wondering of drawdown, supply build just inventory to a couldn't we normal level where disruptions up sustainably related I'm So of versus was this inventory saw you much level? how inventory

Bob Hagerty

accelerated we because we're in and reduced than really got we said good four. a That's we at And selling frankly, sales not, that that should question out QX, way we expected quarter, recall, still had this by headsets. channel turns we in Yes. we primarily quite about were going please the we be were of to number it at an we Michael, enterprise to pandemic headsets back there to inventory not reduce constraints. had and got early historically supply QX, and thank target the our were and inventory past five inventory of you. QX we The think six disappointed. we as in more of extent This But on-hand

inventories so in end get quarter, above our those it's by rebuilding would we ended the improvement be of may But to We quarter our prior of our eight target be some we're would end this that moves be is 'XX, as model goal fiscal over and not be at go turns. the expectation think the the the could And not but going even QX that the capital still in huge quite that a working our although XXX to to up we'll the where would we the as exactly we're I at mix target and the of short-term, bit expected. at level best-in-class. year, of I be six six. by again a our But target. and level had that end to by little year, inventories hit think

Bob Hagerty

I all you forward everyone with We we'll you talking say in. of So to appreciate to look thank next think that, and quarter. it calling with for

Operator

today's concludes This conference call.

may You disconnect. now

Plantronics (POLY) 27 May 202020 Q4 Earnings call transcript