ADTN - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to ADTRAN's Fourth Quarter 2019 Earnings Release 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 period. [Operator Instructions]

During the course of the conference call, ADTRAN representatives expect to make forward-looking statements, which reflect management's best judgment based on factors currently known.

products, risks of including of manufacturing core the the for December involve and successful competition ended efficiencies, statements channel year on market acceptance and Form detailed market products, such Annual and these other and costs XXXX. in the uncertainties, development in mix risks However, component product our and Report the XX, the for degree XX-K statements, from uncertainties and results cause may those the in during could forward-looking materially risks These to call. the actual which made be differ

It over is go Executive ADTRAN. the now my pleasure please to Officer to turn call ahead. Sir, Chief Tom Stanton, of

Tom Stanton

Thank you, conference appreciate XXXX call. joining Chris. With me us ADTRAN's, We Foliano. you for today our Mike quarter morning, Good fourth is everyone. CFO,

remarks, performance Mike quarterly take the we'll then opening in and questions. review financial your will my detail Following

our quarter national provider we future Ireland. first The an ahead along award SDX fiber came We open other These the there other U.S. in will the access in year slightly some as service Latin awards, as of help with in key finished with anticipated offset America gig expectations Europe – strengthen by made fourth solutions. in XX with and the award in during European progress X our disaggregated QX SDX delay. slowness Tier pickup from a their a in and was seasonal quarter our the largely and resumed including as shipments and

a revenue the overcoming fiber million, beginning a We on normal technology quarter-over-quarter deployment $XXX.X disruption. and believe significant up influences, for top-line seasonal for our a driven regulatory investment we by perspective, are decline. basis, was X.X% cycle From advancements, quarter of at the vendor

fiber Services sales of be XX% and contributed million, revenue quarter-over-quarter. revenue solutions prior categories. for $XX.X Global period. a continue X% growth accounted PON our $XX.X a fiber million, top increase CPE decrease to over the X% solutions at Network the

the the large a emerging and providers, actively in with continue the extension engaged opportunities of We number Most in all fiber across in broadband the such of the here be to in markets. Europe, some and globe. serve builds notably, U.S., providers fiber we Ireland service Australia, regions electric and municipalities as co-ops opportunities in and outlets EMEA, new in emerging new in in national network the

Further, industry-changing disaggregated several our solutions at national gaining traction Tier operators in investment have X innovative and and and RFPs open disruptive virtual-access ongoing market trials. are

implement areas, on operational global quarter. From an provide gross margins of for key Broadband organizational for growth to each following continue basis, flexibility our are these subscriber areas our cost to key solutions Access, focus updates the the changes perspective, improved improve we The and and to more services.

for Broadband driver Broadband Access business. In remains – our key the

XX as success services network that needed national emerging in participate such is customers in economy. can Our what Australia's to fully from fiber these the operators, so broadband their to the U.K. Zoom network in enables delivering gigabit solutions gig deliver the customers

capacity the the providers demands markets customers helping are Tier address they live rising is supporting in Europe outlets world. community and which solutions from U.S. in X fiber providers utility Our underserved around the and in the of

previously Some highlights Fiber-to-the-Home our our in new a by service Zzoomm business gigabit provider key premises XXX,XXX in to more U.K. in national the XX carrier speeds XXXX at Tier Ireland end our of the Access included full to addition addition provider fiber and the delivering European QX of broadband and XXXX. large for X the announcement Broadband of with the customers the SDX for mentioned wins than

services. the XXX the Key X,XXX market total me, with transport to XXX gig gig SMXXX, multi-terabit platform our broadband scale access access the advancements with excuse product scale XX capabilities gig included our with multi-tenant adding support a SMXXX delivering transport ramp – of adding

showcasing will demonstrating open SD next our solution. leadership at open next-generation month Deutsche with We source in Telekom, access World networking in Mobile be Barcelona Congress our

Access off we portfolio. significant how Innovation better our a achievements quarter, we business, the contributor and making Solutions to Capping enable they is Subscriber Broadband to access seamless, customers for us for fiber added network the the deliver our to XX-gig Lightwave access residential are industry award accolades in the and integrated investments to services. our monetize

cost and subscriber services in gigabit experience, insight investments better businesses and focused lower Our the CPE management experience. and to customers' improved for operational Wi-Fi support and delivery, improve capability residential

key Some Solutions SmartRG first Subscriber RG & utilizing of ADTRAN's initial technology. Experience of included ONTs QX our highlights in the Integrated shipments XXXX business for the

software We under home devices devices management over analytics, array and vast copper, include and we a cable including manager wireless. device smart services Mosaic have which management X networks million across subscription under and our expanded of Subscriber fiber, Insight, now

Smart furthering Foundation solutions Purple operating first delivering our launched OS ADTRAN leadership compliant in XX open industry's ADTRAN's the by system.

and The marked customers SMB market secure benefits realize quarter allowing targeting fault enterprise initial to first hardware existing to in of of tolerance also and solution the migrate SD-WANs distributed the solution. SD-WAN introduction their ADTRAN's

be enable with Global proven customers. ADTRAN Services has business expanded a service services partner Our provider capability trusted to to for our

has U.S. to network capacity critical asset. of helping and competitive, proven is to our support, Europe, Latin capability provision, As delivering stay deploy best plan, build to in and ADTRAN's unmatched the access the and need networks. domain they network It their be America, move customer operators experience customers experience a

to We're with and reduce opportunities, time expenses, helping market faster find paths to revenue, operational services. customers better new realize understand to their new maximize how

the saw to a whole carriers. But a had a weakness know, spending previous as most we in you strong of XX% capital at growing two due lower XXXX, In half half year. first the second as we over

revenue those the the we RSP growth Canada, in here the LatAm, spending and did U.S. U.K., double-digit delays Notwithstanding see year-over-year market in

years progress in we already forward net the to our Access Going the awards come have Broadband expect from upon portfolio new continued in we building made. growth

order On $XX.X billion our Thursday are January XX XX million fits which services. funding. America rural momentum Fund years CAF continued the and it subsidies sustained and We for Rural well-positioned the provide next expecting federal adopted four for with achieved last the will solution over into over and broadband in of portfolio perfectly the deployment FCC Digital Opportunity homes we decade

about We vendor serve customers and are excited positive and we evolution disruption. ADTRAN the governmental markets influences by driven future the our for technology

delivering on level an remains and focus of quality Our outstanding commitment.

Our that commitment to customers our is deliver deliver network results. to solutions

Mike, And with over for go the I'll to financial that quarter. turn you results to over it the

Mike Foliano

results good all. and Thank first will quarter morning you, to Tom provide view XXXX. review also for fourth our our and quarter of the I

to Investor results. call that their release, report, I appears in supplemental my a not referencing www.adtran.com. in respect During non-GAAP With are our are are at earnings financial to measures, both GAAP GAAP webpage measures presented and on on non-GAAP this Relations comparable reconciliations financial will that our but be published schedule discussed

For call will this page schedule certain our information be discussed presented supplemental release. in non-GAAP financial revenue The that the are contained segment in web also measures which release are the on covering on earnings today. by reconciliations presents I category and

quarter Tom came prior quarter $XXX.X in ADTRAN's compared As XXXX. fourth the to million quarter million at million of and for fourth $XXX.X revenue stated, $XXX.X in the

of our of in network million versus for the segments across $XX.X quarter XXXX down million QX our for QX this $XX reported XXXX. solutions was revenue $XXX.X Breaking operating and fourth million

four quarter of to in our Access compared third in $XX.X revenues XXXX. was Support XXXX the and of million $XX.X million in million in $XXX.X categories quarter fourth XXXX. four $XX.X of for prior & & revenue million of the million for QX Services revenue and $XX.X quarter million XXXX to Our compared Across quarter was Aggregation reported quarter the $XX.X

quarter Revenue three for our was million Subscriber million quarter Solutions for XXXX and million of $XX.X and the for of quarter four $XX.X Experience category for XXXX. $XX.X versus

Traditional for for three XXXX & quarter million four $X.X of million $X was and Products' to quarter $X.X Other the revenue million of for XXXX. quarter compared

our quarter $XX.X versus million revenue was Looking XXXX. for QX geographically. in million revenues of four $XX.X and XXXX three at quarter in of Domestic reported $XX.X million XXXX

for Our XXXX. international of XXXX quarter of three $XX.X quarter million was quarter for revenues in $XX.X $XX.X four compared million to XXXX and million of four

and had of customers For the we domestic fourth quarter, one international. XX% two one revenue

XX% XXXX. was prior to which the quarter efficiencies the margins. partially margin chain in four the The was gross quarter quarter in XX.X% same quarter gross in of was driven increase was year-over-year gross for compared GAAP a was GAAP and as fourth XX.X%, and and both by the Non-GAAP mix the in fourth the in Our margins non-GAAP in XXXX. for supply XX.X% prior and non-GAAP XX.X% product offset fourth quarter services gross of margin by quarter and decrease improvements in GAAP

and expense. of $XX.X in reported and increases expenses driven by the in operating quarter both R&D compared quarter operating and $XX.X in personnel-related million and million for by quarter-over-quarter quarter was partially for million XXXX. to lower and XXXX and expenses in were SG&A The equity reduced expenses of legal our $XX.X four prior decrease contract expenses four compensation Total variable offset

operating driven contract increase reduced compensation in services. The expenses offset primarily equity expenses acquisition changes in expenses by and and expenses personnel-related and SmartRG to related year-over-year restructuring the incremental our by was partially market

equity-related services partially quarter-over-quarter was million basis variable The the in result reductions reductions primarily and four offset expenses decrease On expense decreased costs increases operating R&D personnel-related to operating our both non-GAAP quarter by expenses a in last non-GAAP and in contract expenses in of and expense. legal million SG&A and and our in compensation $XX.X quarter XXXX. fourth quarter of compared $XX.X were million $XX.X in

The incremental increased partially expense and was expenses acquisition in to decrease personnel-related spend, project-specific and travel expenses, by year-over-year R&D increases non-GAAP offset expenses related reductions to contract attributable SmartRG the primarily expenses. services legal R&D in

quarter prior to in of loss reduced operating million was basis to $X.X for attributable higher operating and $XX.X GAAP The sales of an and operating the volume loss of was loss operating fourth the compared in million a four expenses. Our quarter $XX.X XXXX. on reported million improvement quarter quarter-over-quarter an

higher market-driven SmartRG The expenses partially primarily operating by the improved deferred our expenses plans in margin, driven incremental in and sales lower year-over-year by gross related was increased offset loss restructuring increase expenses acquisition. to comp equity our volume

driven offset by four this QX sales attributable non-GAAP was $XX.X decreases loss of in volume quarter in quarter operating in $X.X of expenses. a our by margin loss improved non-GAAP The four compared our loss was for to of million of and reductions. operating and partially XXXX mainly XXXX. operating higher quarter lower increase quarter-over-quarter our in operating $XX.X compared XXXX loss to million and quarter of gross revenues four a expense of to improvement loss XXXX The operating was Non-GAAP as million in

the loss compared $X.X million and for quarter four XXXX. million of fourth of a $X.X prior income XXXX million in Other of the was quarter to quarter in $X.X

both $X.X loss of GAAP a and XXXX. other and by income investment for in in The in just quarter, driven for four increases Our QX which million gains portfolio. non-GAAP other $X ended income compared primarily of non-GAAP was the this $X.X million our were million favorable to quarter quarter

our The of company's XXXX and primarily of tax quarter provision quarter benefit to a in the expense compared last $XXX,XXX $X.X million for was million fourth quarter was The as tax XXXX. result QX four $XX.X a the by generated additional offset of that our in the valuation tax domestic of previously as in quarter international the operations current the quarter allowance were operations third was established benefits deferred during XXXX. changes by

of was quarter a $XX.X fourth GAAP of and the a $X.X million, prior loss in four XXXX loss earnings the of compared XXXX. in to loss quarter $XX.X of of quarter a million million for

and quarter for million quarter a a loss four XXXX. Non-GAAP $X.X the of of $X.X the a $X.X quarter million in fourth compared million to in of of loss XXXX of as prior was loss earnings

of the compared of quarter $X.XX per on in of to XXXX. per $X.XX of quarter four loss per of GAAP share XXXX and of a a per per Earnings share share per quarter XXXX. share compared loss per $X.XX in fourth was for $X.XX the a in quarter loss loss as of last a and $X.XX Non-GAAP a $X.XX basis share prior share to fourth was loss of the loss share, a quarter

Turning balance paying $XXX.X in securities $X.X to after net at dividends. sheet. the million totaled million quarter Unrestricted end of debt marketable cash and

we quarter, cash in operations. the $XX.X For for million used

at variability at million prior the and in quarter-over-quarter DSO $XX.X in days end XX end, customer $XX at year-over-year the DSOs to and fourth inventories Net days compared of quarter quarter of Net in of of end is QX QX quarter million the trade a compared of and the the mainly fourth to million the in of accounts and shipments $XXX.X attributable days to the were at was timing million resulting end of quarter XXXX $XX.X The during receivable XX XXXX. the mix. XXXX. XX quarter

with expectations the our large the into our markets of next timing as customer we ahead as rates exchange revenue well of nature sell, our ship differences variability actual between the and quarter, book the order material projects, and Looking fluctuation in in and cause may to patterns business, the which the currency base associated the results. international of

that mix, fourth we range the be our of on quarter. XXXX in quarter to projected sales million. basis $XXX be our with margin $XXX revenue expect We a first non-GAAP will million consistent gross the quarter After expect first the will considering that

the We also million. expect expenses quarter $XX XXXX operating be of first for non-GAAP will approximately

of -- to and international, levels revenue America projects, associated movements, platforms spending related finally, inventory And rate the and realized in XXXX the mix rate. of the be channels. macro basis Connect the to in fluctuations non-GAAP for environment quarter proportion professional international XXXX believe timing rate carriers total we adoption the of domestic Broadband variability first our enterprises, anticipate be and our tax relative significant of revenue services currency will We revenue, and impacting a the factors the distribution in the activity consolidated project earnings percentage relative rollouts, of for revenue our exchange the rate both Access the with will Fund mid-XXs following; revenue on and

page Again at at information additional ADTRAN's web is financial available Relations Investor www.adtran.com.

that, back turn the to With over now I'll Tom. call

Tom Stanton

up at have. to Mike. for very Chris open much questions this may ready people we're point Thanks any

Operator

Needham Thank Instructions] Valera Rich you. comes first Company. from [Operator The question of &

Your line open. is

Rich Valera

morning, Thank you. gentlemen. Good

fourth could expecting think customers? to what quarter. international in the of your of to just Just have those large from your and there where it characterize first run is year those And you wanted where the are degree of on the on and to balance the customers about rate customers this relative you two some get to in up went two follow quarter kind Can in you beyond? back come comments appearing what large

Tom Stanton

aware tends to than be expect stronger do The as in very in America we to Europe be you're customer QX So, QX. Latin bumpy.

deleverage try as to we So we can. as much that

try we as there. as So to be possible conservative

have quarter, safe the So there as we think in but we have well so. in relatively shipments I to shipments that them are the

But they and for quick tend drive delivery. you to orders you then know never place

know until that orders won't typically we So the happen.

then So pick less we QX. we up than and actually Latin in have did in Europe the in America

Rich Valera

Got it. And you would characterize yes. this --

play to understand I'm of sort state for customer. your so. think European trying the of I just

some Or CapEx think we well-documented pause I was quite year? a it sort Is think to it put I that XXXX compares you of spectrum. how they business what after spending, XQ sort last can relative usual of of for bit have any tell? from a do sense as it as head into you

Tom Stanton

Definitely last stronger XQ year. than

which So -- down. was

easy So that's one. an

number change projects the That this the materially them, that to As there adds don't I have they fall ambiguity the total far for in. year, when dates as but the mean here several -- down. are for know thing aren't only is numbers are could I nailed that they'll target that year.

with There of conservative. say, core flat could around than that that that would right projects are right it's we're down that. business fairly flat. to Right I'm probably slightly now the probably higher aware now three I drive

our I SDX are award network. consider flat. large will mentioned European system But penetration, X projects into names, three an So carrier that into have fiber be and we would Tier specific get I with but integrated the don't for it that want their -- a to which I

ramped strong move has have earlier up. And the also which also we're we trying CPE We that business then Gfast year. have to into in forward there potential really

those So are of in of I kind think all play.

Rich Valera

bit, bit just to it XQ so U.S. U.S. then to XQ. looks clearly quarter-over-quarter the a the a And focus softened it. like Got wanted on

about And when on If potentially talked you of CAF just this some little provide tailwind contributing how begin you just be color your just year, that think for could should a bit of your outlook on to was? business? what you then U.S. could about And thoughts sort seems at and like which the the a point. clearly that CAF you

Tom Stanton

Yes. Sure.

has been year. a CAF good We expect So strong. still CAF

RSPs me a the strong. about little let today. talk environment are bit So

up the Xs. municipalities rates. picking in are double-digit we're customers And growing at those and So Tier

on We to that year. continue this expect

-- second the X pick the In actually one deployments that the we up, in year pickup starting PON half continue where year. this Tier did really Xs you're starting of on Tier to see of space, to in see this and expect we a to

some and we transition far not their looks of right the be is are space rest going -- spend, it X Tier up. but Tier in So pretty general now X good. focused maybe as on expect space capital through to The the

MSO space the carrier Tier Xs been just -- both in tapped. and the space in in have

of on things. continue to a lot lot that just delay seem going a -- things of So different to

would now X So saw to flattish expect of last we year. be what to right as I the Tier space

Rich Valera

Got out. one if was give you very could give how I that I'm little just terms on shake there's beyond consider that? for color -- QX? when the sometimes to pretty quarter, other you'll just seasonality, about if wondering, you guidance just towards factors, look I QX perfect. Typically And it. a don't but the beyond strong of year QX any That's contra seasonality. we have the it trends thinking you we helpful. one know should sort If might in – of historical yes, One think of should more a

Tom Stanton

Sure.

and because I different that down of -- up America goes spikes. around that say kind big volatility would be is the in thing the the only would So goes Latin

whole we if that as have But seasonality. expect in I If take you you QX. a take lot I out before mentioned don't that out and typical -- would

Rich Valera

perfect. That’s

gentlemen. Okay. Thank you

Tom Stanton

Okay.

Operator

Sachs. Goldman of Hall Rod from comes question next Your

Ashwin Kesireddy

about. on Tom replacement for wanted that thank I this you opportunity talking of ask to about is vendor Rod. taking you This are Hey, my Ashwin behalf question.

you've certain quarter I your a tension to but think about be a to in the talked as related more that vendor, carrier about you put past, remarks. prepared bit you that in appear this explicit

can changed? us So has give going on what on just you there? what's And wondering more color

Tom Stanton

Yeah. gear. receiving carrier is But started maybe two one One orders changed. things from we actually replacing big have for actually that

of new year. that in of the through expect started kind that's that and pick and So we shipping to kind next up quarter QX in

now. other generation a think I The but chains replacement, probably six there's -- supply them And of just have come wouldn't one that vendor other call there sure their right the in out are the people on months is that are last RSPs lined the I one Europe biggest going large up. over necessarily very ones making where additional are

So continuing us just push in that general that two to where and world, seeing been certain open it's not to opportunities continuing that to heat we're ago. it's it's give us of have would parts years probably the up

Ashwin Kesireddy

And Can us how at opportunity receiving qualify…? can least started give could big you sense carrier. a you from you of You XXXX? orders does one just said be in

Tom Stanton

Yeah.

that carrier. to a So -- I'll will and we would large X not That be frank. be be is what very -- a Tier consider

impact, looking this because probably have deployed pull think a difficult. do it's that the very couple think into is their I say I a one although, have – I XXXX at be in we think trying carrier accelerated will but I to that not that lot things things year, would still tough. will getting So and XXXX mentioned be plans, integrated I

when their larger diversifying chains. of I carriers start the it's impact the you think really supply XXXX is really seeing So

Ashwin Kesireddy

Got it.

Okay. Thank you, guys.

Tom Stanton

Okay.

Operator

Jefferies. question comes George Notter of from next Your

open. is line Your

George Notter

the Tier by you're whether customers medium, mixture seems quite you guess and different earlier your the then was the other about is think or much. of to depending in around Thanks the expand Can addressing on of It and I Tier questions. of Tiers large, one said some like guess revenue U.S. of that I those Xs Xs I really you picture U.S. It in the the Tier things about wanted call, Xs? customers guys. smaller different small. talk talking larger I the on very Hi carriers. on

yes, your like. business recently. obviously One But be of some just competitors I'd of the mixture of what data that looks broke curious out that

Tom Stanton

The as it and know to third, come -- to sometimes It's third, Xs you George, is really can way a me look that about going Tier we wrong really I'm think strong. a because typically you third? if I'm a Mike quarter-dependent at in tell

Mike Foliano

Yeah. Generally that is.

Tom Stanton

the probably that's pretty those a right now Tier some one kind issues mix a us Tier Yeah. Xs this But had it's of the weighted that with little because of Xs. quarter. Generally smaller-carrier good bit quarter where is, more with of of

say a third yeah, that over has – just been which and a include flattish MSO last sometimes business, to third a kind then I the of And would then third the that to which year. when

George Notter

guess, does going I smaller that's business And the forward. that Is then shift towards that it. what does also It would help your your you're structure Got sounds that first -- then margin continue to help margins? then? suggesting And business carriers? like

Tom Stanton

for -- We year, Tier to see would the Xs think Tier I So are going all are Tier a like Xs to same. be going and without treat Xs this to than growth doubt. more customers

me just probably won't margin But let get I there. a So it discussion. leave into

George Notter

Right. you. Thank

Tom Stanton

Yes.

Operator

of Your Silverstein question comes from Paul next Cowen.

open. line is Your

Paul Silverstein

like Tom just on to and I If you and But George's we DT pick flow. I then? But and wane. did the And clock that. carriers levels were had up healthier look to Telmax response they disclosure I when the peak revenue a back your to what the as in when question. wax gave of concentration know to been other want large aren't appreciate back they

Tom Stanton

U.S. way was yes. revenue. the only No. I the Oh, talking about By

you... So if

Paul Silverstein

Okay.

appreciate So I that clarification.

Tom Stanton

Yeah. Yeah.

Paul Silverstein

the talk had you about now? opportunity and you being I that these customers being… historically can your all-in Can projects always offered challenges we have talk mean, -- right have great

Tom Stanton

So, yes. on It's materially towards basis. Xs still weighted global a Tier

Paul Silverstein

Is And I apologize. there…

Tom Stanton

Over XX%. Over XX%.

on basis a it international right? at business… Because global our If you look

Paul Silverstein

I but… Well, further, get one hoping you XX%. to over it's know go no, to was I level

Tom Stanton

is it's I'm it's time Australian kind again. in if figure is a think then an a international look our at to which third include if and the based that. people mean over revenue thinking like you XX%-ish -- American you third at customers. a X I to average well, Tier customer -- of of you third Latin take this But the thumb our And rule I you customer our our Mike European point I'll of

Mike Foliano

Yes. That's right.

Tom Stanton

heavily X based. Tier It's

Paul Silverstein

appreciate All right. that I additional insight.

wrong. are but me that there exposure if pieces, Tommy moving correct Given I know I'm

the I phase, very to the we the mid go no innings Indian in had now be iterations getting think doubt. they're is current the that late the XXXX in improving project think terms There'll feeds speeds least as in and Australia completion I at they additional a in of target forward in time.

sounds in When at opportunities the for you and question. year, putting any aside the the answer for But if you What take upside? financial in with downside? like biggest probably the totality cranking I apologize. not them it up. also individual back the at of let ask are situation terms are that of what Australia – step imminent look I'll broader we year back quarter. over a that's biggest that me When the And you into this look risks

Tom Stanton

say me and variable – to the downside. let So trying mitigate biggest we're

biggest say upside that's just we and a so getting major variable they nature but Australia biggest is than – – of the customer And America. when we're and Latin So the have our more variable finished about were still the rollout downside there. I'll orders. talk

couple areas problems some a issues cases be of are may we have they reduce there either fact they're some deployment and they in effect the waves shipping and to where will fiber where they node to this of back In on fiber the will or to fixing where continue will that that where trying be have continue at looking they're in quarter putting of on. And curb. the going

about And forward. in going of then some you network �� they refreshers as their they talking material know are

did infrastructure. there. have We about the They've would you we lot that new business going business not that fiber G.fast business we on is The the put other there. thing DPU if extension in some there have think we have a – been win the or of

have they on to turn those customers. Now

and started And ship quarters the this has that won we two yet which shipping portion CPE will not recently year. within a business last of large

incremental shipments there have. adding pieces So we side on DPU augment additional the are the that will that CPE we're that

And probably off. picture so it's is probably that you the have little a –

that's you – And outlets of I large would this there contributing. to In are revenue good carrier be of majority the that Europe, half then our end contributing getting first of towards large there. but majority carrier typically half other in for we revenue about running. drives in material way European about this year. projects of all our a of really feel year It on these the out going have a driving be And year. the and board second this new tell will we European the coming course, more that them It's online. than the

Paul Silverstein

Tom right. give me commentary about Australia. All

Tom Stanton

that question your [ph]? answer Does

Paul Silverstein

Yes. was That No. great.

year? et given can wins the On refresh the that to in can the NBN year the can they – last Others cetera new – NBN this for relative you

Tom Stanton

hate But fiber if I a I I OptiComm. recently their about I will know there customers. to won – Australia national roll think is I don't talk the provider about for know – specific just think they Australia don't but NBN be maybe which service we

this one customers have new We And be instance few that brand have a couple couple for a contributing will more is than that year. of a there. – we

probably don't would So NBN In general I agree. know about I Australia.

I think probably tough be it as it's but actually off right would contemplating to now. duplicate not as far you're

Paul Silverstein

one for question me. All And right. last

there last number that had of for five just you're to visibility quarters, historical Has that better-for-you huge translate and Latin the being go be in like changed incredible quarter earlier that you the that volatility where projects relatively but again? of repeat. that It that Going is you'd sounded Correct Or case? year pointed four soft I relationship have the relative deployed if quarter wrong think that you and a or is and the and me I'm would more it would predictability nature still for had back that huge rinse expanded better should the in it – changed America. to out general. was

Tom Stanton

be think there of of having started we other quarter. of say forward second-guess I kind with that ourselves – so kind project projects. moving on just than to point this of in revenue different the They the was previous to where nature QX a would – really nature what I us with the was would particular are any the this

agree would I with So that.

I think this we've seen be volatility that that project we've very can the with volatility and the associated detrimental. still learned

getting things. are for We other approved

they in well right looking G.fast our network. their are trial fiber additional now me, looking – testing within for for lab at as instance, PON providers excuse extension For as

light-switch. three help Which customer help because would always I help be that there. will have – will it because trepidation technologies say I it's the I to instead And but shouldn't of one would tends you you will think it tell would

Paul Silverstein

additional All color. that on. right. I pass it I’ll you. Thank appreciate

Operator

Your Najam of from comes final question Cowen. Fahad

line open. Your is

Fahad Najam

for wanted you taking aggressive very assume one ask Huawei I would to become in pushed be If is out but Thank markets, expecting you about will European opportunity. my the of call, being your Lat to Am market. Am Wasn't that Lat questions. they

ASP well? And risk? are that this you in margin worried And and about you're terms cognizant trends, as something of of this is

Tom Stanton

now, So, Literally that they're And that not But we your we're in have but yet, with of as the seen where agree right I premise we that could. competitive. yet. haven't competing. they seen really not areas

-- vectoring. we've been much, of has much We're that unique just So, kind platform. of to had of business that the majority a had have in we kind better the date we have

the regardless don't of us having view really I a there. who is strong as company So competitor,

very a G.fast, the piece also space. other have good the lead is, in technology And we which

compete business, get just the OLT when, that's we when So, see. If and into with. we'll something to they have don't

Fahad Najam

supply if planning last your One coronavirus it. in outlook? the into it is of accounted or disrupt having potential question, Got the any you chain, to And disruptive outbreak, terms are so, disruption? the

Tom Stanton

that something And make meetings is find for supply. we've have been having you to and sure don't do that on, tracking want disruptions It a weekly month. over just been now trying we have Mike, to...? to

Mike Foliano

Sure.

in components out some So, into the don't guys province top space, factories level it doesn't have the as But you in Hubei us optical region. the know our down in that specifically I you a production, impact get of actually think really Wuhan. to that of and of lot start that sub any comes that especially because we area, at

of for So, And can we some to soon that turn with back. to suppliers. move make have of as our they been material build spending sure these up are the cleared that folks go and trying time they a us working as sub-assemblies lot

I the turn in that that to Year up the at Wuhan And that think holiday, ends disruption back now that don't through Chinese they chain. it's going XXth you our have goes of on. February, if the those date any the factories New believe all the to know way extension point. supply We may being this of

it it our on had well we've that possibility be are farther and optical it point, that the sources is some suppliers of extend material secondary those region. of with some to beyond pull get to bill worse that if But working impact does of as could in able, of products. there We're does that outside our that

Fahad Najam

have it Would would China, out impact suppliers perform? outlook anyways if it margin your going you of in you to switch

Mike Foliano

with that. agreements have some wouldn't any our there. on on large would suppliers swing have Most and had I we we've [indiscernible] a of of already type think it have them. it could Potentially But impact minor the --

Tom Stanton

Yeah.

if runs all I to the through going everybody -- same That's think it's be... door.

Mike Foliano

going to It's of but availability Yeah. cost problem. than a be more

Tom Stanton

were X.X and same of ago. Vietnam. thing. just We see everybody we manufacturing saw Well we didn't ran really in the to there. our Vietnam, big swings Yeah. Early year some in about And

turn this I will same hope hopefully way. that answers the question. So your out

Fahad Najam

very Yeah. much. you Thank

Tom Stanton

to Okay, talking you we next us all right. on call you quarter. look today. joining our Thank to everybody And for forward

Operator

call. This conference concludes today's

may disconnect. now You

ADTRAN (ADTN) 6 Feb 202019 Q4 Earnings call transcript