祥茂光電 (AAOI) 2020 Q1 法說會逐字稿

Good afternoon. I will be your conference operator. And at this time, I would like to welcome everyone to Applied Optoelectronics First Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

午安.我將擔任您的會議操作員。此時此刻，我歡迎大家參加應用光電2020年第一季財報電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the call over to Monica Gould, Investor Relations for AOI. Ms. Gould, you may begin.

我現在想將電話轉給 AOI 投資者關係部門的莫妮卡·古爾德 (Monica Gould)。古爾德女士，您可以開始了。

Thank you. I'm Monica Gould, Investor Relations for Applied Optoelectronics, and I'm pleased to welcome you to AOI's First Quarter 2020 Financial Results Conference Call. After the market closed today, AOI issued a press release announcing its first quarter 2020 financial results and provided its outlook for the second quarter of 2020. The release is also available on the company's website at ao-inc.com. This call is being recorded and webcast live. A link to the recording can be found on the Investor Relations section of the AOI website and will be archived for 1 year.

謝謝。我是應用光電公司投資者關係部門的 Monica Gould，很高興歡迎您參加 AOI 2020 年第一季財務業績電話會議。今天收盤後，AOI 發布新聞稿，公佈 2020 年第一季財務業績，並提供 2020 年第二季展望。新聞稿也可在該公司網站 ao-inc.com 上查閱。此次通話正在錄音並進行網路直播。錄音的連結可以在 AOI 網站的投資者關係部分找到，並將存檔 1 年。

Joining us on today's call is Dr. Thompson Lin, AOI's Founder, Chairman and CEO; and Dr. Stefan Murry, AOI's Chief Financial Officer and Chief Strategy Officer. Thompson will give an overview of AOI's Q1 results, and Stefan will provide financial details and the outlook for the second quarter of 2020. A question-and-answer session will follow our prepared remarks.

參加今天電話會議的還有 AOI 創辦人、董事長兼執行長 Thompson Lin 博士；以及 AOI 財務長兼首席策略長 Stefan Murry 博士。 Thompson 將概述 AOI 第一季的業績，Stefan 將提供財務詳細資訊和 2020 年第二季的前景。在我們準備好的發言之後將舉行問答環節。

Before we begin, I would like to remind you to review AOI's safe harbor statement. On today's call, management will make forward-looking statements. These forward-looking statements involve risks and uncertainties as well as assumptions and current expectations which could cause the company's actual results to differ materially from those anticipated in such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as believes, anticipates, estimates, intends, predicts, expects, plans, may, should, could, would, will or thinks and by other similar expressions that convey uncertainty of future events or outcomes. Forward-looking statements also include statements regarding management's beliefs and expectations related to the expansion of the reach of our products into new markets and customer responses to our innovations as well as statements regarding the company's outlook for the second quarter of 2020. Except as required by law, we assume no obligation to update forward-looking statements for any reason after the date of this earnings call to conform these statements to actual results or to changes in the company's expectations. More information about other risks that may impact the company's business are set forth in the Risk Factors section of the company's reports on file with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2019.

在我們開始之前，我想提醒您查看 AOI 的安全港聲明。在今天的電話會議上，管理階層將發表前瞻性聲明。這些前瞻性陳述涉及風險和不確定性以及假設和當前預期，可能導致公司的實際結果與此類前瞻性陳述中的預期有重大差異。在某些情況下，您可以透過相信、預期、估計、打算、預測、預期、計劃、可能、應該、能夠、會、將或認為等術語以及傳達未來不確定性的其他類似表達來識別前瞻性陳述事件或結果。前瞻性陳述還包括有關管理層對將我們的產品範圍擴展到新市場和客戶對我們的創新的反應相關的信念和期望的陳述，以及有關公司 2020 年第二季度前景的陳述。除非根據法律，我們沒有義務在本次財報電話會議之後以任何理由更新前瞻性陳述，以使這些陳述符合實際結果或公司預期的變更。有關可能影響公司業務的其他風險的更多信息，請參閱公司向 SEC 提交的報告的風險因素部分，包括公司截至 2019 年 12 月 31 日的 10-K 表格年度報告。

Also, with the exception of revenue, all financials discussed today are on a non-GAAP basis, unless specifically noted otherwise. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the results prepared in accordance with GAAP. A reconciliation between our GAAP and non-GAAP measures as well as a discussion of why we present non-GAAP financial measures are included in our earnings press release that is available on our website.

此外，除非另有特別說明，除收入外，今天討論的所有財務數據均基於非公認會計原則（Non-GAAP）。非公認會計原則財務指標不應被孤立考慮或取代根據公認會計原則編制的結果。我們的 GAAP 和非 GAAP 指標之間的調整以及我們為何提出非 GAAP 財務指標的討論都包含在我們網站上的收益新聞稿中。

Before moving to the financial results, I'd like to announce that AOI management will virtually present at the Cowen 48th Annual Technology Media and Telecom Conference on May 29 and at the Stifel Cross Sector Insight Conference on June 10. These discussions will be webcast live and links to the webcast will be available on the Investor Relations section of the AOI website. We hope to have the opportunity to interact with many of you virtually. Additionally, I'd like to note that the date of our second quarter 2020 earnings call is currently scheduled for August 6, 2020.

在公佈財務業績之前，我想宣布AOI 管理層將以虛擬形式出席5 月29 日舉行的Cowen 第48 屆年度技術媒體和電信會議以及6 月10 日舉行的Stifel 跨部門洞察會議。這些討論將進行網路直播AOI 網站的投資者關係部分將提供網路廣播的連結。我們希望有機會與你們中的許多人進行虛擬互動。此外，我想指出的是，我們 2020 年第二季財報電話會議的日期目前定於 2020 年 8 月 6 日。

Now I would like to turn the call over to Dr. Thompson Lin, Applied Optoelectronics' Founder, Chairman and CEO. Thompson?

現在我想把電話轉給應用光電創辦人、董事長兼執行長林湯普博士。湯普森？

Thank you, Monica, and thank you, everyone, for joining us today. First, I would like to thank the entire AOI team who has come together to support each other and our customers through this crisis. Our thoughts go out to all those individuals around the world who are suffering from this virus and the first responders who are protecting our communities, we thank you.

謝謝莫妮卡，也謝謝大家今天加入我們。首先，我要感謝整個 AOI 團隊，他們齊心協力，相互支持並支持我們的客戶度過這場危機。我們向世界各地所有遭受這種病毒侵害的人們以及保護我們社區的第一批響應者表示慰問，我們感謝你們。

We have taken numerous actions to ensure the safety and well-being of our employees while continuing to support our customers' needs. Our offices around the world are generally back to normal operations, and we are adopting recommendations and safeguards in our factory to maintain optimal working conditions. These measures include regular testing of the employees, where available; mandatory use of face mask and other personal protective equipment; increased remote working; and limitation on meeting and employee gathering. I am pleased to report that no AOI employees has so far tested positive for the virus. However, we will continue to strictly enforce these new requirements for the safety of our employees and the larger society of which we are a part.

我們採取了許多行動來確保員工的安全和福祉，同時繼續滿足客戶的需求。我們在世界各地的辦事處已基本恢復正常運營，我們正在工廠採取建議和保障措施，以保持最佳的工作條件。這些措施包括對員工進行定期檢測（如果有）；強制使用口罩和其他個人防護裝備；增加遠距工作；以及會議和員工聚會的限制。我很高興地報告，迄今為止，沒有 AOI 員工的病毒檢測呈陽性。然而，我們將繼續嚴格執行這些新要求，以確保員工和我們所屬的更大社會的安全。

Turning to the quarter. AOI delivered Q1 revenue of $40.5 million, which was below our expected guidance range due primarily to shipping delays out of China and Taiwan due to the COVID-19 pandemic. As a result, we have certain shipments from China and Taiwan and approximately $2.3 million in revenue associated with these shipments pushed into Q2.

轉向季度。 AOI 第一季營收為 4,050 萬美元，低於我們的預期指引範圍，這主要是由於 COVID-19 大流行導致中國和台灣地區的運輸延遲。因此，我們有來自中國和台灣的某些出貨量，與這些出貨量相關的約 230 萬美元的收入推到了第二季。

AOI delivered non-GAAP gross margin of 19.5% and a non-GAAP net loss of $0.44 per share, which was below our expected guidance range due to increased expense during the quarter associated with the coronavirus. As we discussed on our Q4 earnings call, in order to reduce the impact of the shutdown in China on our customers, we took measures to increase production in our factories in Taiwan and in the U.S., which resulted in higher costs during Q1 than we are initially expecting. Given the regularly changing environment during this pandemic, there remains significant uncertainty. But we currently believe that most of the impact to operations from the COVID-19 crisis will be fared due in Q1 and early Q2. And our entire team has worked diligently to go back on track.

AOI 的非 GAAP 毛利率為 19.5%，非 GAAP 每股淨虧損為 0.44 美元，低於我們的預期指引範圍，原因是該季度與冠狀病毒相關的費用增加。正如我們在第四季度財報電話會議上討論的那樣，為了減少中國停產對客戶的影響，我們採取了措施增加台灣和美國工廠的產量，這導致第一季的成本高於我們最初預期的成本。鑑於這次大流行期間環境的不斷變化，仍然存在很大的不確定性。但我們目前認為，COVID-19 危機對營運的大部分影響將在第一季和第二季初顯現。我們整個團隊都在努力工作，以重回正軌。

We expect our Q2 result to improve and revenue up almost 45% sequentially at the midpoint of our guidance range. We are encouraged by increased data center demand from a diverse set of customers and improving 5G-related activities in China that began in the first quarter and is continuing into Q2.

我們預計第二季業績將有所改善，營收將比上一季成長近 45%，達到我們指導範圍的中點。我們對來自不同客戶群的資料中心需求的增加以及中國從第一季開始並持續到第二季​​的 5G 相關活動的改善感到鼓舞。

During the quarter, we had an all-time record of 12 business weeks. This increases the previous record of 11 weeks in Q3 of last year and up from total of 9 weeks in the prior quarter. This design win achievement is all the more notable due to the regularly evolving conditions during the quarter as and the world began to experience the pandemic. Additionally, we are pleased to report that we saw increased demand for our 100G products. In Q1, total revenue for 100G products increased 8% from the same period last year, marking the first quarter of year-over-year growth in 100G sales since Q4 of 2018.

本季度，我們創下了 12 個工作日的歷史記錄。這增加了去年第三季 11 週的記錄，也高於上一季的 9 週。由於本季隨著世界開始經歷新冠病毒大流行，情況不斷變化，這項設計勝利的成就更加引人注目。此外，我們很高興地報告，我們發現對 100G 產品的需求增加。第一季100G產品總營收年增8%，這是自2018年第四季以來100G銷售額首次實現年增。

During the first quarter, we prioritized sales and shipment due to the build-up of customer demand after returning from the shutdown in China. This reduced our CATV revenue given the seasonally slow Q1. However, we continue to believe that the CATV segment will improve over the course of the year. And we have already seen improving forecast from some CATV companies. We also finalized a new relationship with ATX Networks during the quarter, which should be a catalyst for growth in the CATV segment later in the year.

第一季度，由於中國停工恢復後客戶需求增加，我們優先考慮銷售和出貨。鑑於第一季季節性放緩，這減少了我們的有線電視收入。然而，我們仍然相信有線電視市場將在今年有所改善。我們已經看到一些有線電視公司的預測有所改善。我們也在本季與 ATX Networks 建立了新的合作關係，這應該會成為今年稍後 CATV 領域成長的催化劑。

With that, I will turn the call over to Stefan to review the details of our Q1 performance and outlook for Q2. Stefan?

接下來，我將把電話轉給 Stefan，以審查我們第一季業績的詳細資訊和第二季的前景。斯特凡？

Thank you, Thompson. I'd first like to address the COVID-19 crisis and how AOI has proactively responded and adapted to the current environment. Given our presence in China, we had early indications of the possible impact of the virus globally and took action to protect our workforce earlier than many companies in the U.S. We have adopted recommendations from the CDC and safeguards in our factories and offices to maintain safe working conditions for our employees and keep our manufacturing capabilities on track. While we had significant disruptions in operations in our China factory during Q1, we believe we are largely back to normal operating capacity. The coronavirus has led to a significant rise in the number of employees working from home, which we believe has resulted in increased demand from our data center customers as they work to meet the heightened network capacity needs. Our team has been working tirelessly to support our customers through this crisis.

謝謝你，湯普森。我首先想談談 COVID-19 危機以及 AOI 如何主動應對和適應當前環境。鑑於我們在中國的業務，我們很早就發現了該病毒在全球可能產生的影響，並比許多美國公司更早採取行動保護我們的員工。我們已採納CDC 的建議，並在我們的工廠和辦公室採取保障措施，以維持安全工作為我們的員工提供良好的條件，並保持我們的製造能力步入正軌。儘管第一季我們中國工廠的運作受到嚴重干擾，但我們相信我們已基本恢復正常運作能力。冠狀病毒導致在家工作的員工數量大幅增加，我們認為這導致我們的資料中心客戶的需求增加，因為他們致力於滿足不斷增長的網路容量需求。我們的團隊一直在不懈地努力，支持我們的客戶度過這場危機。

Looking ahead to Q2, we are expecting nearly 45% sequential revenue growth at the midpoint of our guidance range and an improvement in our gross margins to the low- to mid-20% range.

展望第二季度，我們預計營收將季增近 45%，位於指導範圍的中點，毛利率將改善至 20% 的低至中範圍。

Turning to our quarterly performance. Total revenue for the first quarter was $40.5 million, which was below our guidance range. Our Q1 financial performance was impacted by the shutdown of our China factory during the coronavirus crisis there, unanticipated shipping delays out of China and Taiwan due to the COVID-19 pandemic and higher costs as a result of shifting manufacturing to higher-cost locations in the U.S. and Taiwan. Additionally, certain cost reductions we had planned for Q1 were pushed out due to a pandemic-related work slowdown in China. We had approximately $2.3 million in revenue associated with delayed shipments from China and Taiwan pushed into Q2. Shipping times have improved somewhat but are still longer than normal, and shipping costs out of Asia also remained elevated relative to our prior expectations.

轉向我們的季度業績。第一季總收入為 4050 萬美元，低於我們的指導範圍。我們第一季的財務表現受到以下因素的影響：中國工廠在冠狀病毒危機期間關閉、由於COVID-19 大流行而導致從中國和台灣發貨的意外延誤以及由於將製造轉移到成本較高的地點而導致成本上升。美國和台灣。此外，由於中國與大流行相關的工作放緩，我們原定第一季的某些成本削減計劃被推遲。第二季度，我們因中國大陸和台灣的延遲發貨而獲得了約 230 萬美元的收入。運輸時間有所改善，但仍比正常情況要長，而且相對於我們先前的預期，從亞洲出發的運輸成本也仍然較高。

Our data center revenue came in at $33.3 million compared with $38.5 million in Q1 of last year. In the first quarter, 31% of our data center revenue was from our 40G transceiver products and 60% was from our 100G products. As Thompson noted, this makes Q1 2020 the first quarter of year-over-year growth in our 100G business since the end of 2018. Importantly, we saw increased data center demand during Q1 from a diverse set of customers. Overall for the quarter, our top 10 customers represented 84.8% of revenue, which is down from 92.1% in Q1 of last year and also a decrease sequentially from 87.5% last quarter. We are pleased to see that our efforts in diversifying our customer base continue to show tangible results in terms of reduced customer concentration.

我們的資料中心收入為 3,330 萬美元，而去年第一季為 3,850 萬美元。第一季度，我們資料中心營收的31%來自我們的40G收發器產品，60%來自我們的100G產品。正如 Thompson 指出的那樣，這使得 2020 年第一季成為自 2018 年底以來我們 100G 業務同比增長的第一季。重要的是，我們在第一季看到來自不同客戶群的資料中心需求增加。整體而言，本季我們的十大客戶佔營收的 84.8%，低於去年第一季的 92.1%，也較上季的 87.5% 下降。我們很高興地看到，我們在客戶群多元化方面所做的努力在降低客戶集中度方面繼續取得了實際成果。

Turning to our cable television product segment. Revenue from CATV products was $4.2 million compared to $12 million in Q1 of last year primarily driven by continued weakness among MSOs, particularly in North America. However, our production capacity for CATV products was also negatively impacted by the coronavirus since the majority of our CATV production occurs in China. We expect CATV to be stronger in the second half of the year than the first half as several MSOs are in the process of contemplating or making plans to begin upgrades later this year. We believe that AOI remains well positioned as these new technologies roll out, given our strong product portfolio in this segment. Our recent announcement of the collaboration with ATX Networks is also expected to bolster our sales in this segment as ATX is working with its MSO customers to qualify our 1.2-gigahertz amplifier products as a replacement for legacy 1-gigahertz products.

轉向我們的有線電視產品領域。 CATV 產品的收入為 420 萬美元，而去年第一季為 1200 萬美元，這主要是由於 MSO 持續疲軟，特別是在北美。然而，由於我們大部分的有線電視生產都在中國進行，因此我們的有線電視產品產能也受到了冠狀病毒的負面影響。我們預計 CATV 下半年的表現將強於上半年，因為一些 MSO 正在考慮或製定計劃在今年稍後開始升級。我們相信，鑑於我們在該領域強大的產品組合，隨著這些新技術的推出，AOI 仍然處於有利地位。我們最近宣布與 ATX Networks 合作，預計也將提振我們在該領域的銷售，因為 ATX 正在與其 MSO 客戶合作，使我們的 1.2 GHz 放大器產品能夠取代傳統 1 GHz 產品。

Revenue from our telecom products was $2.6 million compared to $1.7 million in Q1 of last year primarily driven by increased sales of newer products, such as those designed for 5G network deployments. Specifically, during the first quarter, we saw increased 5G demand in China as carriers there recover from the virus lockdown and continue to upgrade their mobile networks. For the quarter, 82% of our revenue was from data center products, 10% from CATV products with the remaining 8% from FTTH, telecom and other.

我們的電信產品收入為 260 萬美元，而去年第一季為 170 萬美元，這主要是由於新產品（例如專為 5G 網路部署設計的產品）銷售增加所致。具體來說，在第一季度，隨著中國營運商從病毒封鎖中恢復並繼續升級其行動網絡，我們看到中國的 5G 需求增加。本季度，我們 82% 的營收來自資料中心產品，10% 來自 CATV 產品，其餘 8% 來自 FTTH、電信和其他產品。

In the first quarter, we had 2 10% or greater customers, both in the data center market, that contributed 43% and 18% of total revenue, respectively. In Q1, we generated a gross margin of 19.5% compared to 25.5% in Q1 of the prior year. Gross margin was below our guidance range of 23% to 25% due to increased expenses during the quarter associated with the coronavirus. In addition, as I mentioned earlier, planned cost reductions for Q1 were pushed out due to work disruptions in China related to the shutdown there. We will be rolling these cost reductions out over the next several quarters, and we expect to see incremental improvement in gross margin as a result.

第一季度，我們有 2 個 10% 或更多的客戶，都在資料中心市場，分別貢獻了總收入的 43% 和 18%。第一季度，我們的毛利率為 19.5%，去年第一季為 25.5%。由於該季度與冠狀病毒相關的費用增加，毛利率低於我們 23% 至 25% 的指導範圍。此外，正如我之前提到的，由於中國停工導致工作中斷，第一季的成本削減計劃被推遲。我們將在未來幾季逐步實施這些成本削減措施，預計毛利率將因此逐步提高。

Total operating expenses in the first quarter were $19.4 million or 48% of revenue compared with $20.3 million or 38.4% of revenue in the same quarter of last year. Operating expenses declined from last year due mainly to tighter control of R&D and G&A expenses. R&D in China was also reduced during the shutdown there as consumption of R&D supplies and parts was reduced when activity there ceased.

第一季的總營運費用為 1,940 萬美元，佔營收的 48%，而去年同期為 2,030 萬美元，佔營收的 38.4%。營運費用較去年下降，主要是因為研發和一般行政費用的控制更加嚴格。在中國停工期間，中國的研發也有所減少，因為當活動停止時，研發用品和零件的消耗減少了。

Operating loss in the first quarter was $11.5 million compared to an operating loss of $6.8 million in Q1 of last year. GAAP net loss for Q1 was $16.8 million or a loss of $0.83 per basic share compared with GAAP net loss of $10.5 million or $0.53 per basic share in Q1 of last year. On a non-GAAP basis, net loss after tax for Q1 was $8.8 million or a loss of $0.44 per basic share, which was below our guidance range of a loss of $6.8 million to $8.3 million or a loss of $0.34 to $0.41 per basic share, and compares to a net loss of $5.4 million or a loss of $0.27 per basic share in Q1 of last year. The basic shares outstanding used for computing the net loss in Q1 were $20.2 million.

第一季營運虧損為 1,150 萬美元，而去年第一季營運虧損為 680 萬美元。第一季 GAAP 淨虧損為 1,680 萬美元，即每股基本股虧損 0.83 美元，去年第一季 GAAP 淨虧損為 1,050 萬美元，即每股基本股虧損 0.53 美元。根據非公認會計原則，第一季稅後淨虧損為880 萬美元，或每股基本股虧損0.44 美元，低於我們的指導範圍，即虧損680 萬美元至830 萬美元，或每股基本股虧損0.34 美元至0.41 美元，而去年第一季的淨虧損為 540 萬美元，或每股基本股虧損 0.27 美元。用於計算第一季淨虧損的已發行基本股為 2,020 萬美元。

Turning now to the balance sheet. We ended the first quarter with $62.5 million in total cash, cash equivalents, short-term investments and restricted cash. This compares with $67 million at the end of 2019 and reflects $8.2 million in cash used for operations. In addition to the cash on hand, we had $28.8 million in unused borrowing capacity at the end of Q1.

現在轉向資產負債表。截至第一季末，我們的現金、現金等價物、短期投資和限制性現金總額為 6,250 萬美元。相較之下，2019 年底為 6,700 萬美元，反映出用於營運的現金為 820 萬美元。除了手頭現金外，截至第一季末，我們還有 2,880 萬美元未使用的借款能力。

As of March 31, we had $87.1 million in inventory compared to $85 million in Q4. The increase in inventory was mainly driven by finished goods that were not received in the quarter, along with some increase in work in process as production ramped up after the China shutdown. We made a total of $2.8 million in capital investments in the quarter, including $1.8 million in production equipment and machinery and $0.7 million on construction and building improvements. Most of these expenditures were committed to prior to the COVID crisis. And in light of the uncertainties surrounding the pandemic, we are still evaluating our level of CapEx for the year.

截至 3 月 31 日，我們的庫存為 8,710 萬美元，而第四季為 8,500 萬美元。庫存增加主要是由於本季未收到的製成品，以及中國停產後產量增加導致的在製品的一些增加。本季我們總共進行了 280 萬美元的資本投資，其中 180 萬美元用於生產設備和機械，70 萬美元用於建築和建築改進。這些支出大部分是在新冠危機之前承諾的。鑑於疫情的不確定性，我們仍在評估今年的資本支出水準。

Moving now to our Q2 outlook. We expect Q2 revenue to be between $55 million and $60 million and non-GAAP gross margin to be in the range of 23% to 25%. Non-GAAP net loss is expected to be in the range of $4.1 million to $5.7 million and non-GAAP loss per basic share between $0.20 and $0.28, using a weighted average basic share count of approximately 20.4 million shares.

現在轉向我們對第二季的展望。我們預計第二季營收將在 5,500 萬美元至 6,000 萬美元之間，非 GAAP 毛利率將在 23% 至 25% 之間。根據加權平均基本股數約為 2,040 萬股，預計非 GAAP 淨虧損將在 410 萬至 570 萬美元之間，非 GAAP 每股基本股虧損將在 0.20 至 0.28 美元之間。

With that, I will turn it back over to the operator for the Q&A session. Operator?

這樣，我會將其轉回給操作員進行問答環節。操作員？

(Operator Instructions) Our first question today will come from Simon Leopold of Raymond James.

（操作員說明）今天我們的第一個問題將來自 Raymond James 的 Simon Leopold。

So first, I wanted to see if we could talk a little bit about the big picture data center trends. Obviously, we've all sort of heard all the headlines about traffic growth, and I understand you're not necessarily going to be able to guide for the full year. But just maybe if you could update us on your thinking about how to trend this particular vertical longer term and beyond just the second quarter, maybe some of the puts and takes you're seeing.

首先，我想看看我們是否可以談談資料中心的整體趨勢。顯然，我們都聽說過有關流量成長的所有頭條新聞，而且我知道您不一定能夠指導全年。但如果您能向我們介紹一下您對如何在第二季度之後的特定垂直領域進行長期趨勢的最新想法，也許您會看到一些看跌期權和看跌期權。

Sure, Simon. Well, as we noted in our prepared remarks, I think, given all the uncertainties at this time surrounding the virus and the progression and what have you, it's really difficult to put a precise -- any kind of precise guide on that. I do think, in general, we're hearing from our customers that their networks are under pressure from the remote work and what have you. And that they need, in many cases, to address capacity constraints on their networks. And I would expect that, that will result in some incremental improvement to the business. But again, we guide 1 quarter out, and especially in times of uncertainty like this, it's really difficult to give you a whole lot more than that. I would say directionally, it's somewhat better than we might have expected.

當然，西蒙。嗯，正如我們在準備好的發言中指出的那樣，我認為，考慮到目前圍繞病毒及其進展的所有不確定性，確實很難對此提供精確的——任何類型的精確指導。我確實認為，總的來說，我們從客戶那裡聽到，他們的人脈面臨遠距工作和其他什麼壓力。在許多情況下，他們需要解決網路的容量限制。我預計這將為業務帶來一些增量改進。但同樣，我們指導 1 個季度，尤其是在這樣的不確定時期，真的很難為您提供比這更多的資訊。我想說的是，這比我們預期的要好一些。

So maybe one of the things that we imagine is occurring in the crisis is that new technology maybe gets pushed out in time. I'm wondering if that's the case for 400-gig technology for intra data center and if you view that as a good thing by extending the life of your 40- and 100-gig products or a bad thing in that it keeps you from enjoying benefits of a new product cycle.

因此，也許我們想像在危機中發生的事情之一是新技術可能會及時推出。我想知道用於內部資料中心的400 GB 技術是否屬於這種情況，您是否認為這是一件好事，可以延長40 GB 和100 GB 產品的使用壽命，或者是一件壞事，因為它會讓您無法享受新產品週期的好處。

Well, it's a little -- again, it's a little hard to say exactly how that's going to play out, too. I do think that we have -- a number of our customers have engineers or qualification labs that are not operating or operating at less efficiency than they would have normally. In other words, engineers are working from home, and they may not be able to have access to their test equipment and what have you. So I think at least in the short term, we expect some of those qualifications to be pushed out. Although I would emphasize again that we actually had an all-time high of design wins in the first quarter despite the virus.

嗯，這有點——再說一次，也很難確切地說出這將如何發展。我確實認為我們的許多客戶的工程師或資格實驗室沒有正常運作或運作效率低於正常水平。換句話說，工程師在家工作，他們可能無法使用他們的測試設備以及您擁有的東西。因此，我認為至少在短期內，我們預計其中一些資格將被取消。儘管我要再次強調，儘管存在病毒，但我們實際上在第一季取得了歷史最高的設計勝利。

But nevertheless, for some of the 400G stuff, in particular, we are seeing customers that are saying, look, we're going to have to delay a little bit the final qualification efforts that were previously ongoing. Whether that results in a delay in the ramp-up or the deployments, it's not clear at this point. I think that they're -- if anything, they're more motivated now to try to get these newer technologies in. I think they will add capacity and they'll certainly improve operating expenses and things like that for the customers in many cases. So I think they're -- they want to get these technologies in. Their employees are limited in their ability to do what they need to do to be able to start these technologies. And it's really going to depend on how fast recovery happens as to whether they'll be able to -- when things do normalize, whether they'll be able to get the qualifications done and get all that lined up in time to ramp up on schedule or whether it might be delayed a little bit.

但儘管如此，特別是對於某些 400G 產品，我們看到客戶說，看，我們將不得不稍微推遲之前正在進行的最終資格認證工作。目前尚不清楚這是否會導致啟動或部署的延遲。我認為他們現在更有動力嘗試採用這些新技術。我認為他們會增加容量，並且在許多情況下肯定會改善客戶的營運費用和類似的事情。所以我認為他們想要引進這些技術。他們的員工能力有限，無法完成啟動這些技術所需的工作。這實際上取決於恢復的速度有多快，以及他們是否能夠——當事情恢復正常時，他們是否能夠完成資格認證並及時做好準備以加強準備工作。時間表或是否可能會延遲一點。

And maybe just quickly, gross margin, can you bridge the -- would you have met your guidance if it wasn't -- on the gross margin if it wasn't for the shipping issues you mentioned?

也許很快，毛利率，如果不是因為你提到的運輸問題，你能彌補毛利率嗎？如果不是的話，你會達到你的指引嗎？

So it wasn't only related to the shipping issues. As we mentioned in our prepared remarks, the -- a lot of the cost reduction efforts that we intended to do during the quarter were not able to be completed during the quarter because of the shutdown in China. So we had an additional 3-week shutdown, almost 3-week shutdown there. And so we weren't able to finish a lot of the cost reduction work that we intended to do. So that will roll out over the next couple of quarters. So it wasn't only related to the shipping. It was also related to the delay in completing the cost reduction efforts.

所以這不僅僅是與運輸問題有關。正如我們在準備好的發言中提到的那樣，由於中國的停工，我們打算在本季度進行的許多成本削減工作未能在本季度完成。因此，我們又進行了為期三週的停工，幾乎是三週的停工。因此，我們無法完成很多我們原本打算做的降低成本的工作。因此，這將在接下來的幾季推出。所以這不僅與運輸有關。這也與延遲完成成本削減工作有關。

And just one last one, if I might. I did notice you filed an 8-K in April, taking roughly $6 million of the PPP money. Just want to see if you can give us some context. Was this essentially being opportunistic? Or is there some reason we should think there's need for taking out additional debt? And do you expect you have to repay this? Or should we consider this a grant? How to think about that in the context of the business?

如果可以的話，就只有最後一件事。我確實注意到您在 4 月提交了 8-K，拿走了大約 600 萬美元的 PPP 資金。只是想看看您能否給我們一些背景資訊。這本質上是機會主義嗎？或者我們有某種理由認為有必要承擔額外的債務？你期望你必須償還這個嗎？或者我們應該將其視為贈款嗎？如何在業務背景下思考這一點？

Yes. So the PPP loan is something that's really very much in flux at this point. I think I'm going to avoid commenting specifically on that at this point just because the guidance and things like that seems to change on an almost daily basis. So in early April, when we applied for the loan, there was certainly a great deal of uncertainty around our operations and really the global economy. Since then, we continue to evaluate the guidance as it comes out, and we'll continue to monitor that as we go forward.

是的。因此，PPP 貸款目前確實在不斷變化。我想我現在將避免對此進行專門評論，因為指導和類似的事情似乎幾乎每天都在變化。因此，在四月初，當我們申請貸款時，我們的營運以及全球經濟確實存在很大的不確定性。從那時起，我們將繼續評估該指南的發布，並將繼續對其進行監控。

(Operator Instructions) Our next question will come from Samik Chatterjee of JPMorgan.

（操作員指示）我們的下一個問題將來自摩根大通的 Samik Chatterjee。

This is Bharat on for Samik. So the first question I had was the data center segment. I mean, can you highlight what are the spending trends there by especially the 3 large customers that you have? I noticed that you still have 2 10% customers there and the third customer has been spending at a reduced level. So any incremental visibility you have there? Are you still expecting a second half pickup from that customer? That would be the first question.

這是巴拉特 (Bharat) 代表薩米克 (Samik) 發言。所以我的第一個問題是資料中心部分。我的意思是，您能否強調一下那裡的消費趨勢，尤其是您擁有的 3 個大客戶？我注意到你們那裡仍然有 2 10% 的客戶，而第三個客戶的支出水準一直在下降。那麼您在那裡有任何增量可見性嗎？您是否仍期待該客戶下半年取貨？這是第一個問題。

So we don't comment on individual customer trends. As I mentioned, I think there's a lot of positive trends in the data center right now. We discussed the fact that this was the first quarter of year-over-year revenue growth in 100-gig since the end of 2018, which was very early in the 20 -- in the 100-gig cycle. We also discussed that the increase in business that we're seeing in 100-gig is actually very broad-based. It's not only just from a couple of customers but from a number of different customers and the design win activity that we had this quarter also continues to bear that out. So again, it's not just about 1 or 2 customers. It's about a much more broad increase in business in the data center, in general, and in 100-gig, in particular. And as we talked about with Simon, some of the dynamics around finishing qualifications on 400G and when that starts to ramp is a little difficult to say at this point.

因此我們不對個別客戶的趨勢發表評論。正如我所提到的，我認為目前資料中心有很多積極的趨勢。我們討論了這樣一個事實：這是自 2018 年底以來營收年增 100 億的第一季度，而這還處於 20 世紀 100 億週期的早期。我們還討論了我們所看到的 100 場業務的成長實際上是非常廣泛的。它不僅來自幾個客戶，而且來自許多不同的客戶，我們本季的設計獲勝活動也繼續證明了這一點。再說一次，這不僅僅是 1 或 2 個客戶的問題。總的來說，這是關於資料中心業務的更廣泛成長，特別是 100 千兆位元業務。正如我們與 Simon 討論的那樣，圍繞完成 400G 資格賽以及何時開始加速的一些動態目前還很難說。

Got it. And then just one more question on the design wins. I mean, 2019, I think you highlighted 30-plus design wins, and you also said that 1Q this year was very strong in terms of design wins. So just any wins in particular that you could highlight? I mean, any segments that you see could have a potential uptick in the second half, be it telecom, be it cable, where you are seeing momentum building? Anything in particular that you could highlight there?

知道了。然後只要再問一個關於設計的問題就贏了。我的意思是，2019 年，我認為您強調了 30 多項設計勝利，您還說今年第一季的設計勝利非常強勁。那麼您有什麼特別值得強調的勝利嗎？我的意思是，您看到的任何細分市場都可能在下半年出現成長，無論是電信還是有線電視，您看到哪些領域正在形成勢頭？有什麼特別可以強調的嗎？

Sure. Well, I mean, I can give a little bit of extra color perhaps on that. First of all, the design wins that we had, out of the 12 design wins, 5 of those were with new customers. So we had 5 new customers among that list of design wins in the quarter. One of those new customers was a data center customer that we hadn't previously sold to before and 2 of them are related to 5G deployments in China. So in addition to data center strength, we're also starting to see early signs of demand in China around 5G network builds. I think as things in China started to normalize after the coronavirus shutdown there, we started to see increased activity from customers trying to finish qualifications and get orders on the books related to 5G. So I think that's another notable area of strength among the new customer base.

當然。嗯，我的意思是，我也許可以對此提供一點額外的色彩。首先，我們獲得的設計勝利，在 12 個設計勝利中，其中 5 個是與新客戶合作的。因此，本季的設計得獎名單中有 5 位新客戶。其中一位新客戶是我們之前未向其銷售過的資料中心客戶，其中 2 名客戶與中國的 5G 部署有關。因此，除了資料中心實力之外，我們也開始看到中國圍繞 5G 網路建設的需求的早期跡象。我認為，隨著中國因冠狀病毒而關閉後情況開始正常化，我們開始看到客戶試圖完成資格認證並獲得與 5G 相關的訂單的活動增加。所以我認為這是新客戶群的另一個顯著優勢領域。

Our next question is from Joe Flynn of Craig-Hallum.

我們的下一個問題來自 Craig-Hallum 的 Joe Flynn。

Just a quick question on the guidance. I was wondering if you could either quantitatively or qualitatively give a sense of how much data center is the driver of that 45% Q-over-Q growth? And within data center, anything you could give us rather than 100-gig -- the split between 100-gig and 40-gig would be appreciated.

只是關於指導的一個簡單問題。我想知道您是否可以定量或定性地了解資料中心在多大程度上推動了 45% 的環比成長？在資料中心內，您可以為我們提供 100 Gig 以外的任何東西 - 100 Gig 和 40 Gig 之間的分配，我們將不勝感激。

Okay. So as far as how much of the growth is related to data center, I mean, we do expect cable TV to be stronger in the second half as we noted, but most of the growth between Q1 and Q2 is going to come from the data center, just by virtue of the fact that cable TV is a relatively much smaller amount of revenue. So I would expect it to come -- the growth to come mostly in terms of data center growth, if you're looking at the sequential growth rate. As far as the specifics around the 100G versus 40G products, it was -- I'm looking for the number here, it was about 60% from 100G products and 31% from 40G products. So at this point, 100-gig is clearly driving the bus, so to speak, in terms of data center revenue. 40-gig, we expect to continue to see 40-gig business and maybe business that's close to where we are today. But most of the growth, I think, is expected to come from 100-gig or even 400-gig perhaps towards the end of the year depending on...

好的。因此，就成長有多少與資料中心相關而言，我的意思是，正如我們所指出的那樣，我們確實預計下半年有線電視將更加強勁，但第一季和第二季之間的大部分成長將來自資料中心，只是因為有線電視的收入相對較小。所以我預計它會到來——如果你考慮的是連續成長率，那麼成長主要來自資料中心的成長。至於 100G 與 40G 產品的具體情況，我在這裡查找數字，大約 60% 來自 100G 產品，31% 來自 40G 產品。因此，就資料中心收入而言，目前來看，100G 顯然正在推動公車的發展。 40 場演出，我們預計將繼續看到 40 場演出業務，甚至可能接近我們今天的業務水平。但我認為，大部分成長預計將來自 100 台甚至 400 台，可能到年底，具體取決於…

We don't compare with the Q2 the growth in the 5G.

我們不將 5G 的成長與第二季進行比較。

And from 5G as well, of course. Yes.

當然，還有 5G。是的。

Okay. Great. And then just piggybacking off the design win question. I was wondering if you have any update just specifically on 400-gig and, I guess, a customer pipeline or along those lines, you're expecting, I guess, by the end of this year.

好的。偉大的。然後只是順帶設計獲勝問題。我想知道您是否有任何專門針對 400 場演出的更新，我想，客戶管道或類似的內容，我想，您預計會在今年年底發布。

Yes. We did not have a 400-gig design win during the quarter. We did have one design win on a 200-gig product, however.

是的。本季我們沒有贏得 400 台演出的設計。不過，我們確實在 200 台產品上贏得了設計勝利。

Our next question today will come from Liz Pate of Cowen and Company.

今天我們的下一個問題將來自 Cowen and Company 的 Liz Pate。

Most of my questions have been answered, but I may have missed it. Can you remind me what the top 10 customers were as a percentage of the revenue in the quarter? And how that compared with last quarter and last year?

我的大部分問題已經得到解答，但我可能錯過了。您能否提醒我前 10 位客戶佔本季營收的百分比是多少？與上季和去年相比如何？

Sure. So this quarter, top 10 customers were 84.8% of revenue. In the same quarter in the prior year, it was 92.1%. And in the prior quarter, so that would be Q4 2019, it was 87.5%. So again, Q1 last year, 92%; last quarter, 87.5%; and this quarter, 84.8%.

當然。因此本季前 10 位客戶佔營收的 84.8%。去年同期為92.1%。而在上一季度，也就是 2019 年第四季度，這一比例為 87.5%。再說一次，去年第一季度，92%；上季為 87.5%；本季為 84.8%。

So showing some good diversification going on. And I think you said of the 12 new customers, 5 were new to you, 2 were related to 5G deployments in China. And I missed what you said before that.

因此，顯示出一些良好的多元化正在發生。我想你所說的12個新客戶中，有5個對你來說是新客戶，2個與中國的5G部署有關。我錯過了你之前說的話。

Yes. So we had -- just to make sure we're on the same page. We had 12 design wins in the quarter. 5 of those were new customers. So that's 5 -- a total of 5 new customers, 1 design win each. And 1 was the data center customer and 2 were related to 5G business in China.

是的。所以我們——只是為了確保我們意見一致。本季我們贏得了 12 項設計。其中 5 名是新客戶。總共有 5 個新客戶，每個客戶都有 1 個設計獲勝。其中1名是資料中心客戶，2名與中國5G業務相關。

(Operator Instructions) Our next question is from Dave Kang of B. Riley FBR.

（操作員說明）我們的下一個問題來自 B. Riley FBR 的 Dave Kang。

This is actually Danny, on for Dave. I was wondering if you guys could comment on the crowdedness of the 400G market and any color you can give on that.

這實際上是丹尼（Danny），代表戴夫（戴夫）。我想知道你們是否可以對 400G 市場的擁擠程度發表評論以及對此有何看法。

I'm not sure what you mean by the crowdedness of the 400G market. Can you elaborate on that?

我不確定你所說的400G市場的擁擠是什麼意思。能詳細說明一下嗎？

Just like, I guess, if the time line of the 400G launch is pushed out, what I'm hinting at is, would there be increased competition from competitors?

就像我想，如果400G推出的時間被推遲，我暗示的是，競爭對手的競爭會加劇嗎？

Well, I can't really speculate on that. First of all, as I mentioned in my remarks with Simon, it's not clear that the 400G deployment is going to be pushed out. I think customers are very interested in getting those deployments underway as quickly as they can in many cases. If that were not to happen for whatever reason, I really can't speculate on whether there'll be more competitors or not. I do think that the technology of 400-gig is significantly trickier in terms of design and manufacturing than earlier generations of products. And that generally has an effect of making the competitive landscape smaller rather than bigger. But how that would play out with the pushout specifically is difficult to speculate.

好吧，我真的無法推測這一點。首先，正如我在與 Simon 的對話中提到的，目前還不清楚 400G 部署是否會被推遲。我認為在許多情況下，客戶非常有興趣盡快開始這些部署。如果因為某些原因這種情況沒有發生，我真的無法猜測是否會有更多的競爭對手。我確實認為 400G 技術在設計和製造方面比前幾代產品要複雜得多。這通常會導致競爭格局變得更小而不是更大。但具體到退出的具體情況如何，很難推測。

Got it. That's helpful. And I guess I was wondering if you guys could comment on the pricing environment in the 400G and 100G markets.

知道了。這很有幫助。我想知道你們是否可以對 400G 和 100G 市場的定價環境發表評論。

So 400G pricing is really not...

所以400G的定價實在是不是...

Oh, sorry, did I say -- I meant 40G, not 400. Sorry about that.

哦，抱歉，我是不是說 - 我的意思是 40G，而不是 400。抱歉。

Oh, 40G and 100G is relatively pretty stable pricing in terms of different products. We have seen some average price declines over the last couple of quarters due to some product mix issues in 100-gig. I mean more PSM and less CWDM as we've talked about in earlier calls. But as far as price on individual products, it's been fairly stable.

哦，40G和100G對於不同的產品來說價格是比較穩定的。由於 100 千兆位元的一些產品組合問題，我們發現過去幾季的平均價格有所下降。我的意思是更多的 PSM 和更少的 CWDM，正如我們在之前的電話中討論過的那樣。但就個別產品的價格而言，它相當穩定。

Ladies and gentlemen, this will conclude our question-and-answer session. And at this time, I'd like to turn the conference back over to Dr. Thompson Lin for any closing remarks.

女士們先生們，我們的問答環節到此結束。此時，我想將會議轉回給 Thompson Lin 醫師做總結發言。

Again, thank you for joining us today. As always, thank you to our investors, customers and employees for your continued to support. And we look forward to virtually seeing many of you at our upcoming investment conference.

再次感謝您今天加入我們。一如既往，感謝我們的投資者、客戶和員工的持續支持。我們期待在即將舉行的投資會議上見到你們中的許多人。

And ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation, and you may now disconnect your lines.

女士們、先生們，會議現已結束。我們感謝您參加今天的演示，您現在可以掛斷電話了。