CIEN - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the Ciena Announces Reporting Date and Web Broadcast for Fiscal Fourth Quarter and Year-end 2021 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. now Vice hand President would to conference I Lampf, Gregg of Instructions] like the to over [Operator Investor Relations. ahead. go Please

Gregg Lampf

Thank to welcome and morning, fiscal Good quarter year-end Ciena’s fourth review. you. XXXX and

Moylan, and today call Q&A. Vice President and our Gary On also CFO. Global with the McFeely, Products is Scott of is and Smith, CEO; Jim Services, President for Senior us

presentation website to call reflects investor In press posted fiscal and section the as this discussion in as that have and highlighted the addition an of well our to we release, Investors year. items accompanying quarter this certain the

Our discussion included and performance, these drivers recent certain GAAP measures non-GAAP includes comments our results as our dynamics business our results our current is of as adjusted press well operations. of or today’s market to reconciliation today Ciena’s A of detailed speak of non-GAAP a Today’s view of to release. outlook. our measures in discussion on financial

in upcoming forecasts and statements and in the discussed and markets, uncertainties context its results XX-Q our XX-K filing assumptions call supply guidance I’ll risks forward-looking the statements. to the discussion differ on regarding should of commentary certain including quarterly our filing. most of about detailed materially strategy, from in Before Gary, statements, and expectations, long-term today. based viewed the which and that be actual making include the the Company that annual financial opportunities and remind during our risk call, COVID-XX of targets, and be Such recent statements to could constraints turning and over are and this we’ll market factors cause current impact you These

to by and information, result to whether the the file with update or as call, future the expect December obligation a information Ciena date. Our XX-K to be assumes in discussed events conference filed no otherwise. is this XXth, required by that of we SEC new

as possible today. as much we allow will Q&A always, As for

So, follow-up. available yourselves being to one call shortly page limit and will over we be replay the ask the for the website, question With turn is Investors call after Gary. and to concluded. our is This on that that, I’ll you call recorded of

Gary Smith

fiscal good and year growth reported the This continued Today, financial we ability on expected. and adjusted XX%, than billion Revenue which full forecast. further was Gregg, of for successfully market came fourth to including XX.X% morning, laid operating fiscal demonstrates at expectations; we quarter performance ‘XX above also forecast; our quarter the higher exceeded the and X.X%, of the which entered in gross exceeded XXXX conditions full margin and and fourth the adjusted deliver in for strong Thanks, as out original our annual to objectives results. high navigate our time, of challenging end of revenue outlook the year, first $X margin we and everyone. year, our

of This in backlog environment. substantial revenue, strong again We backlog our were increased quarter year ever think, confidence the We demand approximately of the momentum performance, highest doubled orders with higher And our with ago. very demand $X.X market in outpacing and revenue. than Additionally, orders of quarter consecutive significantly we the environment. third have once year our the ended a within reflects billion. leadership I our

as and around Specifically, in strategic deep the and sheet, to people industry. combination distinct And us amaze growing resilience course, perform at our to advantage give R&D balance continue and levels. the their kindness our capabilities, a the of continue and with innovation the us leading absolutely they differentiated of globe relationships highest customer

year. fiscal the to from highlights Moving fourth and quarter

record high-capacity and areas: regions. in new we key in WaveLogic including results. was coherent they continue to the X investments and customers, In optical, Our XX We new software a XX routing all And switching, lead added three optical, great market Extreme. for and automation. are logos quarter technology. focused are QX in yielding

for WaveLogic XXX we’ve date. customer now total Our to Xe globally, XX,XXX is count and on shipped modems nearly

In in pluggable quarter first in WaveLogic We build optics. for X customer a also which switching, router continue Nano strong momentum new coherent this QX, cell Tier we dozen had for deployment. QX space. orders We routing we our and with two deals is including in XG shipped secured our one to providers, largest a and significant site the nationwide X wins, U.S. multiyear of service a of

increase certain our closed and with now AT&T routing cases. to we’ve and IP exposure help its the switching virtual Adaptive use deal to XG Vyatta will acquire strengthen Additionally, our capabilities which technology

We also announced Samsung controller xHaul a equipment networks. and XG XG core domain global MCP support RAN next-gen solutions, partnership and with our with Samsung to to couple services,

Moving above bookings to of a business. in ago. automation Blue our year record year Planet of well FYXX, million, revenue high again growing was the well in the annual which as to our target XX% software range, as performed $XX deliver end

U.S. for U.S. I X% business, in service [indiscernible] a year Telecom, Planet and market business a an Blue with revenue of to provider the major also, of a our MSO. as highlight our in including satisfaction providers network customers as Tier Tier across regions. large XX% strategy, of landed in migration the our we Vodafone to and X customer across want categories provider. which U.S. Shifting international each and year-over-year, British X both, well growth service part wins, of Some X diversification and wins grew X our also that, as major advancing rating including service services global key part And Tier XXXX. really service

fact, web-scalers, providers, X of and service the for in the more all than we in international billion in major customers revenue had U.S. strong non-telco diversity in service orders of revenues from Also web-scale Our continued $X of business. FYXX, our our top XX% year. And X MSO for illustration X providers, X note, the including was customers. year, XX total

focus very And and advantage than market shift digital for X% share demand our market finally, by applications forward EMEA making a growth strong, bringing to led grew year-over-year. gaining in well these remains portfolio opportunities. our India, and international XX% the at as continue increasing full these strong, edge we SLTE resources transformation our driven and cloud, go-to-market to and segment, well was also are mid-XXs. more also take needs, to And automation. need position by to that bandwidth trends to the performed once network growing longer-term submarine we’re which also leading Overall, the each on of priorities. We as aligned the again year-over-year, And in network secular address investments and share

our about a with address next-gen can on use $XX our market including our in Metro These world investing micro approach approach, software, finally, in delivering optical to switching the And to automation software our around routing several digital to by adopted expertise network and deployed drive the our embedded or would deployed white layer customers the billion years. transformation and has this with growing offer portfolio be to vast software services addressable market I majority around development cases, services-based total This new architectural controller the roughly innovation efforts. where billion been and elements our we relationships differentiated as multi-vendor Blue and As Adaptive an Edge or IP is Planet expanding which currently the world. unique example, their this boxes software of we virtually. now is at of help overall are XX our are leveraging our critical next expand assets customers. highlight our $XX from in automation, to largest also automation are domain the like marketplace over global to of MCP. carriers the Also, now that to

see revenue. growing expand our over application, than both, time Our more as adoption recurring XX% and do and move models. overall constitutes software this subscription-based We currently business the less to and of total we

for are demand supply Of the to lead challenges and course, through supply to challenged well the we adversely likely chain constraints overall believe automation times, to of the costs, least middle remains our by chain that as clear, product the global bandwidth these environment, and are as And strong be current in operations. availability calendar persist continue ‘XX. impacting and supply conditions at to secular supply

gross these level timing obviously And revenue variables as and all of during ‘XX. to We our elements we’ve and the margin of into guidance considerations these expect well incorporated as fiscal accordingly. affect our

performance immune, from However, date, to going this continue in others manage challenges our these can regard well. expect we And to forward. not see you we continue obviously as to we are outperform to while

two, in increased our also of confidence growth outsized we address with environment the strength order demand, overall, following return long-term years investment position. in past the a ‘XX visibility. flow our bandwidth And factors, to And continued for moment, provide including: year and FYXX, which spending that fiscal outlook Jim entered revenue short-term to year number is visibility number of several by customer historical additional for levels be believe will to purchasing and a one, will we’ve positive due providing increased of decisions; Ciena. of strong and overall to business as given Jim driven Ciena, awards. a fact, the as thirdly, wins, In more that demand well now, to about a of targets provide both secured and uniquely new over of will pandemic; new and we Jim? confident that two set couple are monetization and the we’ve those financial slow years customer

Jim Moylan

margin solid come. QX billion, revenue. increased range, revenue first highlighted margin direct year. gross income quarter EPS supply at Ciena, impact $XXX.X QX, adjusted new was Good adjusted an performance. which adjusted expense operating respect the exceeded quarter many as we of as operating it and Gary. order $X.XX And our increased everyone. was the the quarter QX With extremely dynamics there within of the we the reflects book above as for is Thanks, $X a million in in strong [indiscernible] end Total expectations. well somewhat We more profitability delivered to and delivered quarter variable comp million be wins. $XXX adjusted was and our result the billion net in higher of monetization of It XX.X%, to revenue is $X.XX. morning, to orders and quarter, costs the will last a logistics significantly Adjusted XX.X%, primarily in guidance the of ever of of due measures, was

cash and in approximately EBITDA Also million In million, from adjusted we in for shares operations repurchased $XXX a was total addition, X.X QX, fiscal XXX,XXX ‘XX. million QX, for million. $XXX in repurchased shares $XX.X was approximately of our

full billion, at our guidance the of range. $X.XX for year, performance was end our annual the Regarding high annual revenue fiscal which was

mentioned, gross ‘XX fiscal for expected. strong totaled $X.X billion Adjusted year we ended we Gary As the billion, margin adjusted year $X.XX backlog. was for as OpEx And very at in the with XX.X%. largely

high end operating flow and the profitability. our XXXX to almost XX% margin $X.XX. was at guidance [ph] EPS fiscal in was Free of $XXX range, million income. for XXXX at adjusted strong of cash Moving Adjusted operating fiscal XX.X%, was or adjusted very

We sheet remains approximately in investments. balance the cash a significant competitive differentiator. ended $X.X year billion Our and with

Looking to be our for the fiscal growth outsized year of ‘XX full fiscal a we will believe year, year business.

with to visibility in pandemic spending and year. to More numbers we that are well in strong of to XXXX of record economic grow and related margin have XX% that of quarter of uncertainty. monetization wins initial new couple also [ph] backlog secured performance the the With for as of margins. XX% in in in we we new to two [ph] the for increased year following the returned due And gross some revenue rollouts challenges of expect our levels, awards. years in increasing opportunities, We fiscal past has margin, saw and including impact to to automotive range manifesting dynamics Ciena XX%. the significant will wins higher believe see fiscal our ‘XX gross expect supply pronounced continue. increases as the will we our is that ‘XX lower deals will logistics and continue. range the chain help that unique speeds specifically Customer are new our deployments to Accordingly, investments our be And previous cost gross significant historical now that for over us XX%. near-term a years we to respect Accordingly, and year fiscal year we the monetizing multiple of

addressable investing switching our in automation intend markets. and routing we our to business, growing particular, strategically ‘XX. at adjusted $XXX in expense, continue expense in portfolios in we in leverage average expect our and operating to opportunities software operating million quarter per Therefore, these fiscal For

and expected As number the year. always, bit quarter-to-quarter, increase through start vary lower a and this will is to

fiscal in to margin be XX% ‘XX We adjusted XX%. of in to expect operating the range

in order during In the addition, and be continue of fiscal will supply receivables ongoing the investments cages. accounts impact we mitigating chain to in inventory making ‘XX,

will a XX% As expect result, cash be in free XX% to our flow ‘XX that fiscal we Difficulty]. [Technical

quarter, coming million expect adjusted in revenue range XX% the to operating QX to million, XX% adjusted the in For of $XXX deliver a to million. expense we of approximately ‘XX, $XXX and range, margin gross $XXX

important to greater gains indicators growth, from Overall, we and us performance a revenue the As to resume profitability next what financial over Ciena Gary mentioned, of of is believe cash are puts view in demand driving our cash We our visibility positioned longer-term are a believe indication strong and years. and we and flows. which well and us, continue expect position progress the of best line three is top flow. to most of that deliver industry, the solid the target combination secular providing Three-year targets. business for to long-term

On growth in to ‘XX, we to range expect the our particularly expect to driving growth. per earnings in respect to over market XXXX, intend revenue profitability revenue we [Technical with share we adjusted X%. to recent expect resume fiscal and Difficulty] approximately line, EPS our have share, line we the as last in to top return on growth to maintain Beginning of Difficulty] decade. business, annual and in focus as we [Technical we increased continue X% resume to With historical continue

earnings our to outlook, Also, next the [Technical XX% targeting of in of generation beginning annual [ph] free per expect long-term the Difficulty]. of ‘XX adjusted income Specifically, approximately part are we as cash flow operating we XX% grow our to share adjusted few over years.

enable operating operating continue from growing margin, model, on will [Technical respect increase profitability. driving with us expected our focus revenue Difficulty] expense to leverage we operating in to to Finally, our particular,

we up second arrangement million or market enter accelerated and authorized common for operating our has of the whereby result, we capital announced sheet of over years, the for our $XXX to to those we than ‘XX. we of next authorization. Under that new portion Board to several $X to in fiscal unused our and are ‘XX. XX% cash a achieve [Technical the ASR our [Technical adjusted to As a our targeting of previously more return a to share fiscal our $XXX program Difficulty] We Directors XX% repurchase up repurchase to also significant common repurchase purchases dynamics. fiscal be the authorization, expectations arrangement, and ‘XX. With to in settlement balance quarter expected this into of margin stock. for billion due Difficulty] pandemic strong to to the resulting increase Today, our by stock. industry now of shareholders. make are is announced the generation position ASR, a new we’ve to completed the announced end up million the Final completing repurchase of will year previous of intent

based and of market market, liquidity, purchases our conditions, million Following the will $XXX our business factors. completion be general remaining other price, stock and on timing the cash the of flow ASR

fully to the utilize is XXXX. intent the of authorization end repurchase Our fiscal by

well return growth. strong demand including we balance. We supply capital expect continued backlog new repurchase going performance cash quarter while hand confident conditions. for our strong to delivered our fiscal into in In the ‘XX, leadership environment, and strong meaningful of we a the market and demonstrate with significant cash cash fourth year, ‘XX With operations. commitment maintaining very outsized the program are another or [Technical despite phase finance ASR a results fiscal and and next on to authorization deployment, This challenges, revenue represent Difficulty] shareholders liquidity share as as very chain closing,

to from For analyst. strong capital portfolio. our and differentiated to are And shareholders, address transformation edge position take will switching automation to and we’ll new term, innovation applications Difficulty] position financial we the sell-side continued intend software we a routing through return enable our questions now so. do our with Operator, longer and growing [Technical in to investments in technologies digital

Gregg Lampf

the our during that is webcast. like to recognize are this start we with all of on clarify quality earnings we presentation, Before anything and we’d guidance, that information some issues the note including happy Q&A. be Please audio Q&A, the there you

Operator

from Rod [Operator Instructions] of Your Hall first question line with the comes Goldman Sachs.

Rod Hall

site wonder to Hi, Yes. question. goes you I dig within about I I this that. cell some is for that. what expected. wanted And if in the opportunity. guys. installation that Thanks to how you the into I for the curious strong very don’t talk guess, had a this know Gary, relative this one little big a guidance I drivers know, year. of really it’s big routing could just not, like or mean if seems I beyond hyperscale next think we bit

So, that’s color you what’s well. on kind driving that And then, you give as of Can follow-up one growth? the for have first I question. us more

Gary Smith

America I it’s sort as wins this that the two of and providers And we’ve we’re hold in for Yes. opportunity, of plus -- portfolio. think North last couple the cell large have new you. been service thank in of secured routing would seeing. wins it the monetization our the describe that I years, sort on router site for switching a Rod, quarter, new of

view I just -- this start, quite frankly. is this think I So, as the

Rod, I And of return capacity carriers into modernization increase views a normalized seeing, get I catch-up that in and is of builds, very Ciena, the business, more traffic opportunities step we’re seeing function the back think there. demand. you to So, in the if new to those things we’re the think sort from innovations which And overall you’re basically network. portfolio, their a the on portfolio step the we’re seeing also encouraged their by specific really around new

of would those of terms this that in blend order customers environment. of all to book, security get supply of is the a it’s things. of also in So, -- some I mention wishing

a position the blend is beginning to unique through. of think, you’re industry, I and secular I all is particular I in around it’s own think that So, the And few that positive. very see of dynamics. those years think the had last for demand But, the wins we’ve our flow

Rod Hall

you And on software then, comment follow-up, the was great. my Okay, Gary, made.

or said to software -- You the is bit is a curious in it mean how it’s quite that was just saying XX%. now is I big that, stream. wonder, XX%, it do element it revenue you below by below? I’m close

Gary Smith

Yes.

So, elements we’re the last that’s Blue outlined. that the in And overall all you and if put together. it’s sort of I highlight I think it over focused growing on a X.X% dollar so and MCP Planet, revenue, three time, of our that I IP. because as think absolute about that the -- And I we percentage Adaptive year, terms

Operator

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

Paul Silverstein

ask gross type on you from as your repeat and my And assume routing operating can Jim, on what you, gross you got can on to just Thank I’ve Anything basis? long-term hearing grows impact question that? getting going I And have And and there? supply that. is margin of one switching growth was that’s say you apologies. chain? follow-up I to are positive expecting are business you. that margin. guidance? How a margin, an trouble a normalized much to margin the operating impact have you been My of having I what

Jim Moylan

A questions in lot of there, Paul.

do routing our revenue have to our And XX%, revenue. was We that grow before run switching. which our so, respect time and percentage margins With What [Technical do that that rate or overall we margins sort COVID. to centered say believe accretion the routing that been. right is time. run is to And that And in gave of through stack. call we will percentage of Difficulty] rate as I’ll move switching of to represents We last I provide believe gross as a we might one routing said business new XX%. it, still true. first, XX% were expect what be a XX% profitability the they and and last our me switching to gross around Let

say. I’d what that’s So,

that You is challenges year, the we the just What our guidance to XX%, a will But reflect close is get the was that a a ‘XX you think to the effect digits somewhere -- continued be we of base we’ve long year. the return kind by market share. taking rate said think, X% seen of to coming long-term the will sort of supply expect to for we which can the for will chain on historically will growth not range, I’ll sort going rate, to in rate, what And industry time, targets. be a low-single from mid-single we our ‘XX, growth which XX% this summarize just different return that which X% to way. can our post of

presentation adjusted range also ones get we that the key XX% those We said our the can We check for over but next several EPS will are the grow we expect some believe, in always you metrics, you. other and the years now.

Paul Silverstein

stage, I systems? the that. from ask but open doesn’t the you zero but any as are Are What impact my follow-up, as the just Obviously, you well seeing award it’s And appear concerns? I’ll any type particular from impact at line appreciate in of seeing? question. numbers, it

Scott McFeely

Scott. is this Paul, Yes.

piece, really it’s spoke. since the -- last really the I starting the On We think has ZR don’t event the changed time perspective of XXXX. our is think we

may a side as So actually that want models and coherent the both and choose the time, commercial technology the in modem side customers not participate in plugs line our system our whatever release, a that. market we’ve the seeing and benefited you no, the by systems, is planning that’s on certainly shipped in to line consumption to we’re marketplace us. way, leadership, some for as we’ve that a from, game to some been thing good opportunity on for on any it to note term perspective the we fruition. And in expect comes Open short press impact ZR from

line impact open So, systems. no negative our on

Paul Silverstein

ship. from be see to impact know starting all when clear, ZR, we to just you they’re no just Scott,

not providers. awards You’re web-scale or whether meaningful traditional seeing by service

Scott McFeely

No.

that I think, XXXX. really game in starts the on

Operator

comes next Jefferies Notter the question with from Your LLC. line George of

George Notter

results terrific I on Congratulations market opportunities. share wanted ask guidance. about I to and the your guess,

You certainly continued take you’ll are implying share. that

seeing them? seeing of What you out the What you are I terms mine think Any provide one opportunities wins in installed the Thanks. of Huawei, additional in are terms there. obviously, would new great. opportunity could of against is out competitively the base? color you be to

Gary Smith

we’re we the areas. over George, attributable seen seen regions, share that to directly The ongoing one from Gary. in really, a I Huawei to is have of would of getting as Europe efforts been fact than to that continue around we during we’re other and for think these We’ve of an around migrate in it’s year, have while. on going more And good it’s our say, both George. ongoing their years. India. even absolutely Yes. I what saw of And our more two three mean, I and the Europe side carriers some to seen And move. and share fair growth this last we in that’s dynamic. of And next It’s optical away transport And taking that. India, we’ve fair that said, that, those move dependency, regions. that

Scott McFeely

of on our And going It’s it. at the look gains contract awards. the share them a in the couple that quite that. business you actually our millions We backlog ever $X.X been order say, see our The see higher book. of last numbers. George, this years. particularly, over see we’ve them them if at We We is I’d revenue other hundreds than it’s at And bit our of see market thing seen billion. in before beginning in year, that’s all you

course, the some up revenue of and in in our but share, that it’s is we to ‘XX. market it reflects taking show going this future have to orders, Of year visibility that fact been

Operator

from the of line question Barclays. Tim Your next Long comes with

Tim Long

the bit I’m of I could talk down the Thank you. was in sequentially hoping web-scale assuming a quarter. bit was kind a we that’s business, about lumpiness. little

so good. the in world you on as in so $X plus if looks of well X.X orders the probably other web-scale more as just growth. can That’s So for or doubling billion touch is it whatever, the It seems year, -- orders, like, seeing are that book-to-bill.

Asia where are going is if there just So, there talk on some of still maybe seeing? maybe you. a of parts can something ordering about a follow-up, little a folks theater? than And you in you less bit Asia it’s of then, Asia, the on little Can forward India going networking with touch under Thank up, what’s the other pressure. on the as

Gary Smith

Difficulty] Let web-scale take first. quarter would [Technical just I thing. me one

the and from orders them. think there, that customers, significant $X the during well. four on certainly a think, revenues but that space, would have in is as more milestone features in in the time I I than say as for chain a of lot I position we the XX fact year, to And supply the that billion stuff weighed we top and our we little had testament share that backlog it’s our in bit maintained a scalers -- a expected. all first web the

the probably visibility Jim that. visibility that’s good into actually we got good the web-scale year. -- to So, the into in for gave helpful web-scale average, overall have we’ve you. be guidance if in growth that with very And corporate business expect we above And ‘XX our that will

India, other -- of make terms I the Asia, India. again, would parts we of In actually same comment about to expect

challenging us. parts Asia, well. a will our as more faster to think little average Other corporate I grow than that of

couple continues will a be us. had have new there. New Australia, Japan customers to challenging, I have had think, of good and think but a for there a Zealand, couple ‘XX. very I We’ve new we wins additionally wins of new

X of was there. One them large Tier the

think on rest challenge. those think over I will a a improve. think continues The or China. to months pandemic position a the lot countries. of probably the has time, over so been of I in of weigh next we’re Obviously focused on Asia I So, not XX bit our Japan And, that

Tim Long

you. Thank Okay.

Gary Smith

as there, and are sort much also for they it’s Europe home-turf, of Huawei’s example And India. they’re and also pressure not under in

part of So, that’s it.

Tim Long

Makes Thank sense. you. Okay.

Gary Smith

Thank you.

Operator

James. from next Simon comes of with Leopold, the Raymond Your question line

Simon Leopold

Thank taking as question. much you Two very for the well.

I First, be what may so, planning the higher price got I in up And terms want actions stick please. customers. cost. And increases to a you -- on pass prices you’re your input been Whether follow how to in have any understand of if successful the taking you then have or made getting adjustments? on have

Jim Moylan

Yes.

everybody stuff in do mean we’re our normal expect this of we a navigate would I our to I that say, driven customers is point it equitable But, really There’s ecosystem. we from just dialogs really on do because largely [ph] an I view, point which and in elements. I’d engaged But, into chip the this a seeing, to think we already, backlog So, large view these we’ve are the cost engaged some actively bumps but costs any lot the are the transitory. we it’s such in our with of engaged the transitory. is to think see we We FYXX, from logistics I those eventually absorbed not expedite that a best how do and way. -- do think restatement, supply by impact with don’t partnership how of that that. got and chain customers not environment, we that on being of a and of perspective mitigate. all of fees elements two moves split

Simon Leopold

follow-up… a then, And

Jim Moylan

if won’t to you. are costs, backlog. will able make it to just that forward, to current going It orders affect point we Simon, the affect these share

Simon Leopold

quarter which in follow-up, faster, the guidance? really we’ve in TV web-scale your On Thank mention vertical. about you And TV didn’t How are the mentioned that shifts vertical, market some thinking observing your India, you fourth in strong. been XXXX spending cable but Gary was the cable growing you.

Jim Moylan

a with them. have biggest deal Comcast. to they good particularly going we We’re there, very with our MSOs, the good have in very, we’re And -- but with year strong, which a customer is

that We’re that kind across not see going to vertical rate see business our of just we’re growth the to ‘XX. in in going

Gary Smith

Planet additional that year. would from we’ll for add wins I point Blue begin -- specific we from into the that, Blue roll of to I to What out had a two a view, the MSO think Planet

inventory good from So, Blue the now companies. mainly a those of we’ve number pretty got across cable on Planet, large side a footprint

Operator

comes Jim Citigroup. Suva of line question next Your with from the

Jim Suva

pause during corporate I multiyear a the back than in sustainable, little countries, coming more others? parts that say of COVID they of kind question not My hit of world, If than bit of kind talk some than the given lot but just of in those timing growth like of kind infrastructure regarding as your COVID only can some you It India the to and that. countries later Australia. of it like just COVID are is during outlook little those a is spending put fait other seems bit also societies. on believe average, Is higher about those when a

Gary Smith

Obviously, really look the from of which view, we it in some dug look is think we’ve some believe I depending territories. think think grown [Technical that Difficulty] And would I term, of doesn’t Difficulty] sort think India. Difficulty] dynamic. agree, positive to last a gone Australia, new has -- and this But, on out supply But, and to Jim, point pre-COVID these were challenges, India, Zealand, seeing of I very next which they New based. order that position in of right they’ve stuff this one gone in RFP that. XX it period. about that’s we Yes. flow India’s some ebb I number months, largely the rebuilding. from during years, had three everybody’s that take little some a over why of addition do India. about multiyear feel of demand. And bullish if Japan very as India to longer I territories an share more I wave Difficulty] where through feel had I down I as on during at market COVID, these a [Technical particularly of industry share in I a of actually even and [Technical we’re we’ve wins dampened constrained Obviously, an going well now. [Technical a got our [Technical think Difficulty] the in

Operator

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

Amit Daryanani

as two well. have questions I

you what about geo touch think you one, talked on guide this just the of basis, doing think in maybe guide and guide to just -- XX% better. for XX% in web-scale first Europe when a ‘XX, The for are I I the you ‘XX. fiscal wondering North could revenue if was of seeing from Asia America I context fiscal

Gary Smith

I our also will corporate average probably would above think I say average. Europe that be

to across that in such not also So would mainly America. North share growth market North expect that And lot -- America. And then we guess, of got you’re that and do the point. large did But, be America it’s going above you numbers average? board. we’ve corporate hit big a in question, North I the the what

I in way be for dynamic I’d else. think of in then, two in in prior But clear the to COVID, One Europe. there I think in Europe then not have what -- is, being There’s COVID. about which obviously, out. time. dynamics and me America. a don’t -- they well, it’s This much is Let affected North And dynamics really infrastructure basically you’ve as there’s their got so, say, everybody and Huawei the taken But like -- that. period is have you -- Europe underfunded

good for the a expect do ‘XX. we’ve drive strong I year another of America think And in we think have sure. that in I will at Europe will that year number So, I look But wins help had that. North

Amit Daryanani

just follow I if could then, And Perfect. up.

of you beyond versus what onetime a ‘XX, i.e.,… mistaken. about grow Is have said outsized fiscal that’s if is, not I’m fair? these my perhaps think you much long-term more we you kind versus guess, you why something same you year that think for ‘XX industry a phenomena this your enduring clear in are more that digits. think I outsized question to have durable, share assumption and do happens that’s that. share you single And I the expect low I fiscal It’s gains kind implication are guide, the when talked think of the gains

Gary Smith

would I -- let me describe it as this.

got of to unique backlog And beginning bit revenue, of and to that But a bit a of think is everybody or bit wins think not I I it have think albeit the of somewhat We’ve than had think chain. because a monetized. catch-up anticipated a deployed I that’s into now catch-up. I a now slower Ciena. [ph] a you’ve of turn here, it supply is

be low I if to single you think, for the market would rate of in on would expect take why difficult that overall is that -- is And that. more us -- expect over probably sort look to into out to to I be I going ‘XX, you the tell. And get single similar. expect of sort it ‘XX, ‘XX. which get, But I digits further share, to continue to the to you X% X%

over last dynamic of play decade, what sort that seeing is it at of be And to we’ve as that and our different. I out. switching structure the to we’re growth. of TAM look which be any will also don’t outsized you we’re -- said, reinforce potentially, kind helpful in And I up our opening kind -- number If the expect is that and routing, think

Operator

Chatterjee Your JP next line the question Samik comes with from of Morgan.

Samik Chatterjee

cash level you $XXX headwinds ‘XX, growth post you needs -- unless don’t shouldn’t done, have, can thinking guess, taking mean, as I requirements about generating we you return Why that be be -- deployment much with -- free a see that of some with you as I year, or flow I normal have these Jim. shareholder million, why of I follow-up, more the fiscal shouldn’t stuck of think balance cash cash you any conversions thinking cash. the be to a share right. And you’re if I strong Thanks repurchases can sheet for heard the know I had next $XXX to major any million of be I XXX% you’ll that Hi. mentioned given But returns you cash of as for I that highlighted? we’re think please. M&A question. just my

Jim Moylan

is first hope it’s been I’d be And very us. We have say you to in not We M&A find we we’ve that thinking been able to been about able to -- things. it see would been to What that that. active, good do transactions. for Yes. just but can’t our worked offices, we’ve something like because consider

Difficulty] So, very I and this But that’s a we’re right. say balance why that going you’re strong sheet. good to keep [Technical would

more [Technical We’re be several business or the to then going in see can you years. [Technical M&A, either to we in repurchases. if Difficulty] And share Difficulty] expect can’t probably

Samik Chatterjee

more about guide beyond share had you if as dissimilar for less to is back pre-pandemic is to to there X% But, thoughts what of verticals, Got can it. how similar telcos largely in And well. it the about guide about composition or be gain just that’s how follow-up, to similar pandemic? just how a levels? thought FYXX, my for Is to think share out the dissimilar X%, growth in going there that or long-term again or you long-term how is similar coming it your you certain to any rough, may pre-pandemic

Gary Smith

grow, pretty got a largely say, much -- that to a expect fantastic as we’ve to longer such America. it’s medium from growth broadly, It would that will so do think market that would international [Technical would us also function be the web-scale large in I continue, would will I for opportunity talking but about to I I share more in and we Difficulty] time Difficulty] over this difficult be say talked term ‘XX, North that. about [Technical

So, further web-scale expect I would lot from growth that from the international be of that a to and of customer base. diversification and

Jim Moylan

our Also RE going That’s and years investments and are billion technology several optical because billion Difficulty]. of next switching $XX great engagements and us. [ph] the switching. our said and We’ve our $XX around convergence this of increased routing over opportunity to and a [Technical for revenue increase TAM routing from that to

Operator

Your next the Henderson comes question from line Needham. Alex with

Alex Henderson

is you primarily a repeat And Could backlog have? that you the order that backlog? product just

Jim Moylan

services. and $X.X billion. is It products

portion low millions small, small beyond fiscal will continue maintenance hundreds is that of that very of -- Some and ‘XX. services

the will bulk in of that ‘XX. backlog be So, vast fiscal delivered

Alex Henderson

be your if What how in think you much backlog do were normalized normal backlog? that outsized of would environment, and you is a

Gary Smith

was followed, The Scott and pattern a about to of the Scott, imbalance, about Yes. quickly has ordering will do that customers business really the the And which address supply talked of COVID this. what would want situation chain talked internally. we’ve address that occur you -- our way that But because as changed. it. we

Scott McFeely

[Technical $X it, it The of at if the couple ‘XX end years say billion. environment -- wouldn’t was I from backlog you into grew by of ‘XX, Difficulty] the think, Alex, I beginning either. in going normal look at

that low, going into might been a and bit high. have ‘XX probably So bit a is

is there the normalized between rate. in somewhere So

entered the annual If you sort plan pretty much somewhere in historical revenue typically decade, year we last numbers the go of XX% in back backlog. and through XX% of between

personally what quite therefore, state is. this may have we that longer where So, and environment be backlog while, in normal sort more of a you I probably XXXX. of living all new indication we’ll think visibility, of some give for through

Alex Henderson

Yes.

I’m the these is questions reason the mechanics backlog the normalizes. So, I to at how primary of wanted asking get

revenues your we revenue. trailing trim levels, lower, bring So, at XX% course that at XX% or and your the elevated if -- stays of guidance product we down? that of over therefore see backlog backlog of CYXX looking I’m a it’s below total don’t do and FYXX, and expect the X backlog, do run mean to I start in the start book-to-bill to the you

a So, And up guide large which conservative ‘XX? for in do with What’s backlog. backlog mechanics realized for being it we seems that? of normalizing ‘XX, the in that very does case it’s happen end all large in XXXX, a or chunk the actually

Scott McFeely

we Because other. revenue old the used a pretty to in was sort short-term and bit from and revenue probably the mind cycle. -- of a low out one of go to period looking had a then actually backlog, is fast world, how period’s the I that to figure proportion around trying little to we need one your things of think the that conversion relatively to change moves at actually we period much in a

of given now, in we’re Right on period you’re book. portion And miss. delivered a you the of long ask should revenue short question world. much new So, sense significant it therefore, order demand the less very a dependent The different It’s made has in a of us profile how time. to visibility.

in all of to going living we’re not I if think that be world ‘XX. for most

timing dynamic demand does was to not mean what shaping it’s in ‘XX, being it what is, really we shaping be this it’s thing the to said So, supply of It’s but going environment our was to going case. it. that’s in where going the loaded, demand back-end unlike revenue be a be similar the to shape ‘XX, going that’s the be the to

to you’ll could -- think you slips it the being to going still conversion there historical the know. on then so, I to naturally see book oversized as year, to going relative through is measures expect ratio, with less than whether backlog And you But revenue increasing we the be asked, go X, a to the into don’t question revenue an we ‘XX.

Alex Henderson

year? the the elements to to you. you when that So, becoming available are get Thank the do trying in more the actually start course you improve in I’m of assuming book-to-bill at. over expect to -- because really parts of That’s what the a reduction guide? And

Scott McFeely

still I back say see be at X end But on an a I in expect We point the largely to to basis. our year. our greater you do the environment some improvements chain difficult supply think of book-to-bill annual would will in of expect because to than the I get we we would And -- precision ‘XX. the start year fiscal to as most think quarters. don’t persist we times do through say to lead it’s in of this the this. give We terms

back that the historical probably ratios to revenue norms. will the not in backlog but on ‘XX, to sort of So change the

Operator

Stanley. comes from of Marshall Meta Morgan the question line next Your with

Meta Marshall

fiscal about service partnership a towards a of but look you ‘XX, more you A questions WaveLogic wholesale maybe just little center? the making are web-scale for flow. bit kind Maybe less speed of installed in just needing a upgrade of saw maybe order being of as you more we little for me. a increases. seeing there Great. X, strong cycle, to price of it providers data you market-focused. question of And activity? be seeing in what the a kind terms of to And you’re my then, mix talked with with couple seeing the Is that Clearly, like XXX-gig are upgrades

Thanks. be of in Just service will digits the to of get or that low- Do you unit-driven, a to the industry. of suppliers of absorbed versus pricing-driven kind will when how more you trying look sense the the just at versus -- and much mid-single for by absorbed terms increases ‘XX be in think beyond price providers?

Scott McFeely

one, first on web-scale I’ll piece. the the try

of networks. In as a in the are their of there multiple we’ve of campus, backbone natural got cases, interconnect. sort to but some center parts infrastructure, there metro sort exposure lot So, are data of know, activity the submarine web-scale certainly, networks, around you

most we’re advanced I I think but use the not all what state cases, introduce to per bid, is the certainly of can, they seeing but us on is as try of hit think shelf as elements happening three in WaveLogic speak. in technology that lowest that’s because those typically we yet, cost the capacity all they X transition

thing reach. their are second is in of that expansions we The seeing terms

those wins comes modems. new builds, terms And revenue. us photonics had that WaveLogic you’re and new talked to logo revenue around timing in space we past of in to at the as us of that So, unique a see then and both that was in maybe the bit in come significant, wise starting to and terms

Gary Smith

environment, I will encompassed your absorb that point do a a Jim to honest. of to dynamics be will Because innovation, we’ve gross I ‘XX I the we increase the all pricing costs sort be Jim be on think growth, have given think, impact growth, on you piece. of And vast we think guidance as over will I customers. be through impact in think if to price point clear, reductions, look additional pricing guide. associated that our But for alluded at margin, three-year from to cost I do of And the don’t really the not into our software, majority that’s from baseline also just want you of somewhere it’s it the time, between the view. up, our think component view able and industry look I on actual routing our exposure to certainly piece. right that probably would the with of on think if the of what end these and our said, vertical I happens passed our be other is, able and will major don’t the own part mix XX% the question integration will in and size at the say I wherever account our is gross now, that the Meta, on And that -- gross of levels help as to component if you switching, will increased margin didn’t increases. the -- margin. was our growth take XX% whatever

Gregg Lampf

much. the you. We forward for look with you your thanks, and Thank happy few everyone, catching next And days. very attention. healthy time everybody Year. everyone, today, and to today holidays, your up Happy Thank New

Operator

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

now may disconnect. You

Ciena (CIEN) 9 Dec 212021 Q4 Earnings call transcript