祥茂光電 (AAOI) 2019 Q3 法說會逐字稿

Good afternoon, everyone.

大家下午好。

My name is Jamie, and I will be your conference operator today.

我叫傑米，今天我將擔任你們的會議操作員。

At this time, I would like to welcome everyone to Applied Optoelectronics' Third Quarter 2019 Earnings Conference Call.

在此，我歡迎大家參加應用光電2019年第三季財報電話會議。

(Operator Instructions) Please also note today's event is being recorded.

（操作員說明）也請注意今天的活動正在錄製中。

At this time, I'd like to turn the conference call over to Monica Gould, investor relations for AOI.

現在，我想將電話會議轉給 AOI 投資者關係部門的莫妮卡·古爾德 (Monica Gould)。

Ms. Gould, you may begin.

古爾德女士，您可以開始了。

Thank you.

謝謝。

I'm Monica Gould, Applied Optoelectronics' investor relations, and I am pleased to welcome you to AOI's Third Quarter 2019 Financial Results Conference Call.

我是應用光電公司投資者關係部門的 Monica Gould，我很高興歡迎您參加 AOI 2019 年第三季財務業績電話會議。

After the market closed today, AOI issued a press release announcing its third quarter 2019 financial results and provided its outlook for the fourth quarter of 2019.

今天收盤後，AOI 發布新聞稿，公佈了 2019 年第三季財務業績，並提供了 2019 年第四季的展望。

The release is also available on the company's website at ao-inc.com.

該版本還可在該公司網站 ao-inc.com 上取得。

This call is being recorded and webcast live.

此次通話正在錄音並進行網路直播。

A link to that recording can be found on the investor relations page of the AOI website and will be archived for 1 year.

此錄音的連結可以在 AOI 網站的投資者關係頁面上找到，並將存檔一年。

Joining us on today's call is Thompson Lin, AOI's Founder, Chairman and CEO; and Dr. Stefan Murry, AOI's Chief Financial Officer and Chief Strategy Officer.

AOI 創辦人、董事長兼執行長 Thompson Lin 參加了今天的電話會議；以及 AOI 財務長兼首席策略長 Stefan Murry 博士。

Thompson will give an overview of AOI's Q3 results, and Stefan will provide financial details and the outlook for the fourth quarter of 2019.

Thompson 將概述 AOI 第三季業績，Stefan 將提供財務細節和 2019 年第四季的前景。

A question-and-answer session will follow our prepared remarks.

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.

在我們開始之前，我想提醒您查看 AOI 的安全港聲明。

On today's call, management will make forward-looking statements.

在今天的電話會議上，管理階層將發表前瞻性聲明。

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.

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。

In some cases, you may 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.

在某些情況下，您可能會透過相信、預期、估計、打算、預期、預期、計劃、可能、應該、能夠、將、將或認為等術語來識別前瞻性陳述；以及其他傳達未來事件或結果的不確定性的類似表達方式。

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 fourth quarter of 2019.

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的信念和期望的陳述以及客戶對我們創新的反應，以及有關公司 2019 年第四季度前景的陳述。

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.

除法律要求外，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化。

More information about the 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, 2018.

有關可能影響公司業務的風險的更多信息，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 2018 年 12 月 31 日的 10-K 表格年度報告。

Also, with the exception of revenue, all financial numbers disclosed today are on a non-GAAP basis, unless specifically noted otherwise.

此外，除非另有特別說明，除收入外，今天披露的所有財務數據均基於非公認會計原則（Non-GAAP）。

Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

非公認會計原則財務指標不應被孤立考慮，也不能取代根據公認會計原則編制的結果。

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.

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 note that AOI management will present at the Needham Security, Networking and Communications conference in New York on November 12; the Raymond James technology conference in New York on December 10; and the Cowen Networking & Cybersecurity Summit on December 11.

在討論財務表現之前，我想指出的是，AOI 管理層將於 11 月 12 日在紐約舉行的 Needham 安全、網路和通訊會議上發表演講； 12 月 10 日在紐約舉行的 Raymond James 技術大會；以及 12 月 11 日舉行的 Cowen 網路與網路安全高峰會。

We hope to have the opportunity to see many of you there.

我們希望有機會在那裡見到你們中的許多人。

Additionally, I'd like to note the date of our fourth quarter 2019 earnings call is currently scheduled for February 25, 2020.

此外，我想指出的是，我們 2019 年第四季財報電話會議的日期目前定於 2020 年 2 月 25 日。

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

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。

Thompson?

湯普森？

Thank you, Monica.

謝謝你，莫妮卡。

And thank you, everyone, for joining us today.

感謝大家今天加入我們。

We are pleased with our continued execution in the quarter.

我們對本季的持續執行感到滿意。

For a second quarter in a row, we delivered revenues in line with our guidance and achieved better-than-expected result on the bottom right.

我們連續第二季的收入符合我們的指導，並在右下角取得了好於預期的結果。

AOI delivered revenue of $46.1 million, non-GAAP gross margin of 28.8% and a non-GAAP net loss of $0.15 per share.

AOI 營收為 4,610 萬美元，非 GAAP 毛利率為 28.8%，非 GAAP 每股淨虧損為 0.15 美元。

In looking at the dynamics in the quarter.

看看本季的動態。

The data center demand environment remained consistent with our expectations.

資料中心需求環境與我們的預期保持一致。

We continue to see early signs of recovery among 2 of our hyperscale data center customers.

我們繼續看到我們的兩個超大規模資料中心客戶出現復甦的早期跡象。

We are encouraged by this sign and believe the fundamental need for higher bandwidth within hyperscale data centers will drive long-term growth.

我們對此跡象感到鼓舞，並相信超大規模資料中心對更高頻寬的基本需求將推動長期成長。

However, in the near term, we remain cautiously optimistic on the hyperscale market as demand continue to stabilize among our customers.

然而，短期內，隨著客戶需求持續穩定，我們對超大規模市場保持謹慎樂觀。

In CATV, we remain encouraged by the growing interest in our Remote PHY product and are pleased to report our fourth significant Remote PHY order in the quarter.

在有線電視領域，人們對我們的遠端 PHY 產品日益增長的興趣仍然令我們感到鼓舞，並很高興地報告本季度我們的第四個重要遠端 PHY 訂單。

Last month, we demonstrated our Remote PHY solutions at the SCTE trade show in New Orleans and had a very positive response from our current and potential customers.

上個月，我們在新奧爾良 SCTE 貿易展上展示了我們的遠端 PHY 解決方案，並得到了我們當前和潛在客戶的非常積極的回應。

However, the overall cable TV demand environment continues to be soft, resulting in tepid demand for some of our legacy products.

然而，整體有線電視需求環境持續疲軟，導致對我們的一些傳統產品的需求不溫不火。

Additionally, CATV demand in China remain weak as a result of trade tensions.

此外，由於貿易緊張局勢，中國有線電視需求仍然疲軟。

We continued to make good progress in diversifying our customer base.

我們在客戶群多元化方面持續取得良好進展。

And during the quarter, we secured 11 new design wins, including 4 for our new customers.

在本季度，我們贏得了 11 項新設計，其中 4 項是為我們的新客戶設計的。

In summary, we are pleased with our result and improving gross margin which led to another quarter of better-than-expected bottom line result.

總之，我們對我們的業績和毛利率的提高感到滿意，這導致了另一個季度的淨利潤好於預期。

We remain focused on expanding our relationship with both new and existing customers and maintaining our technology leaderships.

我們仍然致力於擴大與新舊客戶的關係並保持我們的技術領先地位。

We believe our (inaudible) proprietary and geographically diverse manufacturing and vertical integration are key competitive advantage, and we remain confident in our ability to execute on opportunities [to help us] as the market improve.

我們相信，我們的（聽不清楚）專有且地理多元化的製造和垂直整合是關鍵的競爭優勢，我們仍然相信，隨著市場的改善，我們有能力抓住機會[幫助我們]。

With that, I will turn the call over to Stefan to review the details of our Q3 performance and outlook for Q4.

接下來，我將把電話轉給 Stefan，以審查我們第三季業績的詳細資訊和第四季的前景。

Stefan?

斯特凡？

Thank you, Thompson.

謝謝你，湯普森。

Our Q3 results were broadly in line with our expectations and reflect improving performance compared with last quarter.

我們第三季的業績基本上符合我們的預期，反映出與上季相比業績有所改善。

During the quarter, we continued on our path of customer diversification, expanded our margins and tightly managed our expenses, leading to a narrower net loss than we had anticipated.

本季度，我們繼續走客戶多元化之路，擴大利潤並嚴格管理費用，導致淨虧損比我們預期的要窄。

Total revenue for the third quarter was $46.1 million, which was within our guidance range.

第三季總收入為 4,610 萬美元，在我們的指導範圍內。

Our data center revenue came in at $34 million compared with $39 million in Q3 of last year.

我們的資料中心收入為 3,400 萬美元，而去年第三季為 3,900 萬美元。

In the third quarter, 69% of our data center revenue was from our 40G transceiver products and 25% was from our 100G products.

第三季度，我們資料中心營收的69%來自我們的40G收發器產品，25%來自我們的100G產品。

We continued to make good progress with our customers as they worked to qualify our 400G products for data center applications.

我們持續與客戶取得良好進展，他們致力於驗證我們的 400G 產品是否適合資料中心應用。

Data center market dynamics played out similarly to last quarter.

數據中心市場動態與上季類似。

We continued to see early signs of recovery among 2 of our hyperscale data center customers, while 1 customer continues to purchase product from us but with reduced demand.

我們繼續看到 2 個超大規模資料中心客戶出現復甦的早期跡象，而 1 個客戶繼續從我們這裡購買產品，但需求減少。

While these improving dynamics are encouraging, we remain cautiously optimistic in the near term.

雖然這些改善的動態令人鼓舞，但我們在短期內仍保持謹慎樂觀。

We had 7 design wins in the quarter in our data center segment.

本季我們在資料中心領域贏得了 7 項設計。

Of these 7, 2 are new customers in the quarter, and an additional 2 are incremental wins with a recent new customer.

在這 7 位客戶中，2 位是本季的新客戶，另外 2 位是最近新客戶的增量贏得。

Turning to our cable television product segment.

轉向我們的有線電視產品領域。

Revenue from CATV products decreased 38% year-over-year to $8.8 million from $14.3 million in Q3 of last year, primarily driven by weakened demand from our North American MSO customers, combined with a historically high-revenue quarter last year.

CATV 產品的營收年減 38%，從去年第三季的 1,430 萬美元降至 880 萬美元，這主要是由於北美 MSO 客戶需求疲軟以及去年季度營收創歷史新高所致。

Given limited competition in their markets, we believe that MSOs are delaying upgrades pending the availability of new technologies such as DOCSIS 4.0.

鑑於市場競爭有限，我們認為 MSO 正在推遲升級，等待 DOCSIS 4.0 等新技術的推出。

Despite these near-term challenges, we are pleased to report a significant order for our Remote PHY gear from our largest CATV customer.

儘管存在這些近期挑戰，我們很高興地報告我們最大的 CATV 客戶為我們的遠端 PHY 設備下了一筆大訂單。

We had a very positive reaction to our latest Remote PHY product at the Society for Cable Telecommunications Engineers or SCTE conference last month in New Orleans.

上個月在新奧爾良舉行的有線電視工程師協會或 SCTE 會議上，我們對最新的遠端 PHY 產品獲得了非常積極的反響。

In addition to our standard Remote PHY products, we also demonstrated a pathway to Extended Spectrum DOCSIS using our Remote PHY technology.

除了我們的標準遠端 PHY 產品之外，我們還展示了使用我們的遠端 PHY 技術實現擴展頻譜 DOCSIS 的途徑。

Extended Spectrum DOCSIS represents a key technology behind the emerging DOCSIS 4.0 standard, which we believe will be formalized by the end of the year.

擴展頻譜 DOCSIS 代表了新興 DOCSIS 4.0 標準背後的關鍵技術，我們相信該標準將在今年年底正式確定。

Once finalized, we believe this latest DOCSIS standard will be a catalyst for future upgrades.

一旦最終確定，我們相信這一最新的 DOCSIS 標準將成為未來升級的催化劑。

We're a leader in technologies like Remote PHY that will enable DOCSIS 4.0, and we believe we are well positioned to capitalize on this implementation once it begins.

我們是支援 DOCSIS 4.0 的遠端 PHY 等技術的領導者，我們相信一旦開始實施，我們就能夠充分利用這項實施。

Revenue from our telecom products increased slightly to $2.9 million from $2.7 million in Q3 last year, reflecting the traction that we are making with our newer customer set as this business continues to incrementally grow.

我們的電信產品收入從去年第三季的 270 萬美元小幅增長至 290 萬美元，反映出隨著這項業務的不斷增長，我們對新客戶群的吸引力。

We believe that AOI is well positioned to grow share as 5G continues to roll out, and we are optimistic about the future.

我們相信，隨著 5G 的不斷推出，AOI 的市場份額將不斷增長，我們對未來持樂觀態度。

We also believe that increased competition from 5G will be another catalyst to increased cable spending.

我們也認為，5G 帶來的競爭加劇將成為有線電視支出增加的另一個催化劑。

In addition to the 7 design wins in the data center segment, we had 3 design wins in our telecom segment during Q3, including 1 design win related to 5G optical modules with a major supplier of 5G networking equipment.

除了資料中心領域的 7 項設計得標外，第三季我們在電信領域還獲得了 3 項設計中標，其中包括 1 項與 5G 網路設備主要供應商相關的 5G 光模組設計得標。

This 5G win is also with a new customer to AOI.

此次 5G 勝利也得益於 AOI 的新客戶。

For the quarter, 74% of our revenue was from data center products; 19% from CATV products; with the remaining 6% from FTTH, telecom and other.

本季度，我們 74% 的營收來自資料中心產品； 19%來自有線電視產品；其餘 6% 來自 FTTH、電信和其他。

In the third quarter, we had 3 10% or greater customers, 2 in the data center market that contributed 44% and 20% of total revenue, respectively; and 1 in the CATV market that contributed 10% of total revenue.

第三季度，我們有3個10%或以上的客戶，其中2個來自資料中心市場，分別貢獻了總營收的44%和20%；有線電視市場第一，貢獻了總收入的10%。

In total for the quarter, we secured 11 new design wins among 8 customers, 4 of whom are new to AOI, bringing our year-to-date new design wins to 22.

本季總共，我們在 8 家客戶中贏得了 11 項新設計，其中 4 家是 AOI 的新客戶，使我們今年迄今贏得的新設計達到 22 項。

As a reminder, for all of 2018, we secured a then-record 26 design wins, so our total of 11 wins this quarter demonstrates an acceleration of our design win activity and one that we believe derives from the effort that we have put into further diversifying our customer base.

提醒一下，在2018 年全年，我們獲得了創紀錄的26 項設計勝利，因此本季度我們總共獲得了11 項勝利，這表明我們的設計勝利活動正在加速，我們相信這源於我們進一步投入的努力使我們的客戶群多元化。

Illustrating the effectiveness of our diversification efforts.

說明我們多元化努力的有效性。

In Q3, our top 10 customers combined to account for 88.3% of our revenue compared to 92.9% in the same quarter last year.

第三季度，我們的十大客戶合計占我們營收的 88.3%，而去年同期為 92.9%。

On a year-to-date basis, the concentration of revenue among our top 10 customers decreased from 94% to 89%.

年初至今，前十大客戶的營收集中度從94%下降至89%。

This decreasing revenue concentration is in line with our expectations and, we think, reflects a positive trend for our business.

收入集中度的下降符合我們的預期，我們認為這反映了我們業務的正面趨勢。

In Q3, we generated a gross margin of 28.8%, up from 27.2% last quarter and at the high end of our guidance range of 27% to 29%, primarily driven by operational efficiencies and a favorable product mix.

第三季度，我們的毛利率為 28.8%，高於上季的 27.2%，處於我們指導範圍 27% 至 29% 的高端，這主要是由營運效率和有利的產品組合推動的。

Total operating expenses in the quarter declined to $18.4 million or 39.9% of revenue from $19.5 million or 44.9% of revenue in the prior quarter, reflecting our efficient expense management.

本季的總營運費用從上一季的 1,950 萬美元（佔營收的 44.9%）下降至 1,840 萬美元（佔營收的 39.9%），反映出我們高效率的費用管理。

In the third quarter, we also received economic incentives from the China government.

第三季度，我們也獲得了中國政府的經濟誘因。

These totaled $1.1 million and are accounted for as other income.

總計 110 萬美元，計入其他收入。

Operating loss in the third quarter was $5.1 million compared to an operating loss of $7.7 million in Q2.

第三季營運虧損為 510 萬美元，而第二季營運虧損為 770 萬美元。

GAAP net loss for Q3 was $8.8 million or a loss of $0.44 per basic share compared with GAAP net loss of $11.4 million or $0.57 per basic share in Q2.

第三季 GAAP 淨虧損為 880 萬美元，即每股基本股虧損 0.44 美元，而第二季 GAAP 淨虧損為 1,140 萬美元，即每股基本股虧損 0.57 美元。

Non-GAAP net loss after tax for the third quarter was $2.9 million or a loss of $0.15 per basic share, which was favorable to our guidance range of a loss of $4.2 million to $5.7 million or $0.21 to $0.28 per share and reflects an improvement over Q2's net loss of $5.2 million or $0.26 per basic share.

第三季非GAAP 稅後淨虧損為290 萬美元，或每股基本股虧損0.15 美元，這有利於我們的指導範圍，即虧損420 萬美元至570 萬美元，或每股0.21 至0.28 美元，並反映了第二季淨虧損 520 萬美元，即每股基本虧損 0.26 美元。

The basic shares outstanding used for computing the net loss in Q3 were 20 million.

用於計算第三季淨虧損的已發行基本股為2,000萬股。

Turning now to the balance sheet.

現在轉向資產負債表。

We ended the third quarter with $72.4 million in total cash, cash equivalents, short-term investments and restricted cash compared with $84 million at the end of the previous quarter.

截至第三季末，我們的現金、現金等價物、短期投資和限制性現金總額為 7,240 萬美元，而上一季末為 8,400 萬美元。

This reflects $5.8 million in cash used for operations.

這反映出用於營運的 580 萬美元現金。

As of September 30, we had $82.1 million in inventory compared to $81.5 million in Q2.

截至 9 月 30 日，我們的庫存為 8,210 萬美元，而第二季為 8,150 萬美元。

The modest increase was driven primarily by an increase in 40G orders, which requires inventory additions to meet demand.

這一小幅成長主要是由 40G 訂單增加所推動的，這需要增加庫存來滿足需求。

We continue to believe that inventory levels will rationalize over the long term.

我們仍然相信，從長遠來看，庫存水準將會合理化。

We made a total of $6.1 million in capital investments in the quarter, including $1.8 million in production equipment and machinery and $4.2 million on construction and building improvements.

本季我們總共進行了 610 萬美元的資本投資，其中包括 180 萬美元的生產設備和機械投資以及 420 萬美元的建築和建築改進投資。

Looking ahead, we now expect capital expenditures in 2019 to be approximately $46 million.

展望未來，我們目前預期 2019 年的資本支出約為 4,600 萬美元。

The reduction in CapEx outlook for the year is largely related to delays in the construction of our plant in China.

今年資本支出前景的下調很大程度上與我們中國工廠建設的延遲有關。

We still expect many of these expenses to be incurred in Q1 of 2020.

我們仍然預計其中許多費用將在 2020 年第一季產生。

Before turning to our outlook, I would like to provide an update on the ongoing China trade and tariff dynamics.

在展望我們的前景之前，我想先介紹一下當前中國貿易和關稅動態的最新情況。

During the quarter, one of our largest customers qualified our Taiwan factory for shipments of data center products.

本季度，我們最大的客戶之一獲得了我們台灣工廠的資料中心產品出貨資格。

As we have discussed previously, we believe that our ability to manufacture data center transceivers in both our Taiwan and China factories provides us with an ability to navigate the current trade tensions between the U.S. and China.

正如我們之前所討論的，我們相信，我們在台灣和中國大陸工廠製造資料中心收發器的能力使我們有能力應對當前中美之間的貿易緊張局勢。

Looking forward, we believe we are well positioned to balance production between both our Taiwan and China factories as we look to minimize the impact for both our U.S.-based customers as well as our customers in China.

展望未來，我們相信我們有能力平衡台灣和中國工廠之間的生產，因為我們希望盡量減少對美國客戶以及中國客戶的影響。

Moving now to our Q4 outlook.

現在轉向我們的第四季展望。

We expect Q4 revenue to be between $46 million and $49 million and non-GAAP gross margin to be in the range of 26.5% to 29%.

我們預計第四季營收將在 4,600 萬美元至 4,900 萬美元之間，非 GAAP 毛利率將在 26.5% 至 29% 之間。

Non-GAAP net loss is expected to be in the range of $4.3 million to $5.9 million; and non-GAAP loss per share between $0.21 per share and $0.30 per share, using a weighted average basic share count of approximately 20.1 million shares.

非 GAAP 淨虧損預計在 430 萬美元至 590 萬美元之間；根據加權平均基本股數約為 2,010 萬股，非 GAAP 每股虧損在 0.21 美元至 0.30 美元之間。

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

這樣，我會將其轉回給操作員進行問答環節。

Operator?

操作員？

(Operator Instructions) Our first question today comes from Samik Chatterjee from JPMorgan.

（操作員指示）我們今天的第一個問題來自摩根大通的 Samik Chatterjee。

This is actually Bharat on for Samik.

這實際上是巴拉特為薩米克做的。

So the first question I had was one of the networking equipment companies that reported in this earnings season has highlighted delayed spending and pushout of the refresh cycle at one large hyperscale customer which also happens to be your big customer.

因此，我的第一個問題是，在本財報季節報告的一家網路設備公司強調了一個大型超大規模客戶的延遲支出和更新周期的推出，而該客戶恰好也是您的大客戶。

So just wanted to check, does that dynamic impact AOI at all?

所以只是想檢查一下，這種動態是否會影響 AOI？

And any insight that you can provide there would be helpful.

您可以在那裡提供的任何見解都會有所幫助。

And then I have a follow-up.

然後我有一個後續行動。

If I understand your question correctly, and I think we're talking about the same customer, then I think, yes, that reflects the same thing that we've seen.

如果我正確理解你的問題，並且我認為我們正在談論同一位客戶，那麼我認為，是的，這反映了我們所看到的同一件事。

I will note, I mean, AOI has been pretty consistent about saying that this customer was facing some oversupply, over-inventory conditions for the last several quarters.

我要指出的是，AOI 一直非常一致地表示，該客戶在過去幾季面臨供應過剩、庫存過剩的情況。

And I think we're just starting to hear that maybe now from some other companies, so yes.

我認為我們現在才剛開始從其他一些公司聽到這一點，所以是的。

I think that's the same situation that you're referring to.

我認為這與您所指的情況相同。

Got it.

知道了。

And then some of the feedback that we've also heard from the supply chain is that one of your larger competitors is being more price aggressive in order to take more market share.

然後，我們也從供應鏈聽到的一些反饋是，您的較大競爭對手之一正在更加激進地定價，以獲取更多市場份額。

Is that the same dynamic that you're seeing?

這和你看到的動態是一樣的嗎？

Or are you seeing pricing environment more challenging than usual?

還是您認為定價環境比平常更具挑戰性？

Any updates there will be helpful.

那裡的任何更新都會有幫助。

No, we haven't seen any real change in the pricing dynamic.

不，我們沒有看到定價動態有任何真正的變化。

And we've been in obviously and we continue to be in a competitive pricing environment.

顯然，我們一直處於並將繼續處於競爭性的定價環境中。

It's been that way since the data center market really started to grow, I think, a few years ago, but we haven't seen any change.

我認為，自從幾年前資料中心市場真正開始成長以來，情況就一直如此，但我們還沒有看到任何變化。

I wouldn't say that -- I wouldn't characterize any of our other competitors as being more price competitive than before.

我不會這麼說——我不會認為我們的任何其他競爭對手比以前更具價格競爭力。

If anything, I think we're likely to see somewhat reduced price competition from some of the industry consolidation that we've seen.

如果有什麼不同的話，我認為我們可能會看到由於我們所看到的一些行業整合而導致價格競爭減少。

Less suppliers makes the need for price competition somewhat less on the margin.

供應商的減少使得價格競爭的需要在一定程度上減少。

I'm not saying we predict a big change there, but certainly I don't think it's getting any worse.

我並不是說我們預測那裡會發生重大變化，但我當然不認為情況會變得更糟。

Our next question comes from Simon Leopold from Raymond James.

我們的下一個問題來自雷蒙德·詹姆斯的西蒙·利奧波德。

I have two.

我有兩個。

First one is around the cable space and the cable weakness.

第一個是圍繞電纜空間和電纜弱點。

I'm imagining there are 2 headwinds and I want to see if you can help me understand the effect of each, one being the overall weaker CapEx spending.

我想像有兩個不利因素，我想看看您是否可以幫助我了解每個不利因素的影響，其中一個是整體資本支出疲軟。

The other is some indication that at least some of your customer cable OEMs are trying to exit some of their legacy products which I presume you've been involved in.

另一個跡象表明，至少您的一些客戶電纜原始設備製造商正在嘗試退出他們的一些遺留產品，我認為您已經參與了這些產品。

So just trying to get a sense of how much of this is sort of the top-down spending challenges versus maybe bottoms-up changes or adjustments in your customers' product portfolios.

因此，只是想了解一下，其中有多少是自上而下的支出挑戰，而不是自下而上的變化或客戶產品組合的調整。

Yes.

是的。

Simon, that's a good question.

西蒙，這是個好問題。

Thank you.

謝謝。

I think the overall effect is really being driven right now by just the weaker spending environment.

我認為目前的整體影響實際上是由消費環境疲軟所推動的。

I think that, that weaker spending environment, along with particular business challenges for various of the OEM suppliers, has resulted, I think, in some of the suppliers taking a hard look at what their strategy is going to be moving forward.

我認為，疲軟的支出環境以及各 OEM 供應商面臨的特殊業務挑戰，導致一些供應商認真審視他們的策略將如何向前邁進。

I wouldn't necessarily characterize that as getting out of business, but they're certainly looking at which product lines make sense and how that fits into their overall business strategy.

我不一定會將其描述為停業，但他們肯定會考慮哪些產品線有意義以及這些產品線如何適應他們的整體業務策略。

And so anytime there's these kind of shifts going on, I think it represents a combination of some risks and some opportunities.

因此，每當發生此類轉變時，我認為這都代表著一些風險和一些機會的結合。

I think the risk is that customers may exit certain products that we are involved in.

我認為風險在於客戶可能會退出我們參與的某些產品。

On the other hand, that doesn't result in an overall reduction in demand for those products necessarily.

另一方面，這並不一定會導致對這些產品的需求整體減少。

It just means that those products have to go somewhere else.

這只是意味著這些產品必須流向其他地方。

And so we're pretty -- we're actually pretty optimistic that -- as all this plays out, that there will be new opportunities for us, whether they're with our same partners or other partners.

因此，我們非常樂觀地認為，隨著這一切的展開，我們將會有新的機會，無論是與我們相同的合作夥伴還是其他合作夥伴。

Or how that's going to play out remains to be seen, but I think it's going to present significant opportunities.

或者這將如何發揮作用還有待觀察，但我認為這將帶來重大機會。

And when the cable industry begins to grow again, I think those opportunities will become apparent.

當電纜行業開始再次成長時，我認為這些機會將會變得顯而易見。

Great.

偉大的。

And then my follow-up is to get your perspectives on the 400 gig market in terms of timing and how that plays into your business.

然後我的後續行動是了解您對 400 場演出市場的時機以及它如何影響您的業務的看法。

And a couple of thoughts I want to get your impressions of is, one, one of the large OEMs suggested that 400 gig would happen later, suggesting it begins in the second half of '20 but becomes material in '21.

我想聽聽大家的一些想法，其中之一是，一家大型 OEM 廠商表示 400 場演出將在稍後發生，暗示它將在 20 年下半年開始，但在 21 年成為實質性內容。

I didn't think that was any different, but they suggested that was later.

我不認為這有什麼不同，但他們建議稍後再做。

And then I presume -- for you, if 400 gig happens later, is that a good thing because you get to reap the sales of 100 gig longer and 40 gig longer?

然後我想——對你來說，如果 400 場演出之後發生，這是一件好事，因為你可以獲得 100 場演出和 40 場演出的銷售收入？

Or do you want it to happen sooner to be able to participate in that market?

或者您希望它能夠提早發生以便能夠參與該市場？

Could you help us understand your expectations and sort of the implications for you?

您能幫助我們了解您的期望以及對您的影響嗎？

Sure.

當然。

So I think the schedule on 400G -- again I want to caution not every OEM, not every supplier or every end customer is on the exact same schedule, of course.

因此，我認為 400G 的時間表——當然，我想再次提醒，並非每個 OEM、每個供應商或每個最終客戶都遵循完全相同的時間表。

So we have to keep that in mind, but I do think that -- not unlike what we saw at 100 gig and indeed even at 40 gig where the initial expectations for deployment schedules were a little bit optimistic, I think we're seeing the same thing at 400 gig, where there were a lot of end customers of network equipment operators that wanted to have 400 gig in their networks sooner.

因此，我們必須牢記這一點，但我確實認為，與我們在 100 gig 甚至 40 gig 時看到的情況不同，對部署計劃的最初預期有點樂觀，我認為我們正在看到400 G 也是同樣的情況，許多網路設備營運商的最終客戶希望他們的網路盡快擁有400 G。

I think that, as we've seen with previous cycles, sometimes those -- the amount of work and the technology that needs to be ready, it doesn't always move according to their plans.

我認為，正如我們在先前的周期中看到的那樣，有時那些需要準備好的工作量和技術，並不總是按照他們的計劃進行。

So I would agree with you.

所以我同意你的觀點。

I don't really think that's necessarily later than what we had expected, but I think it's a fair statement that it's perhaps later than what some of the operators may have otherwise liked.

我真的不認為這一定比我們的預期晚，但我認為這是一個公平的說法，它可能比一些運營商可能喜歡的晚。

When it comes to what's that effect on AOI, I think you're right.

當談到對 AOI 有何影響時，我認為你是對的。

We would expect to see a continuation of business for 40G and 100G until the 400G is there.

我們預計 40G 和 100G 業務將持續存在，直到 400G 出現。

I don't think the delay is a bad thing for AOI.

我不認為延遲對 AOI 來說是件壞事。

I think certainly we've got a good footprint in the 40 gig and 100 gig space.

我認為我們在 40 演出和 100 演出領域肯定已經取得了良好的進展。

We expect to be a good player, a leading player in the 400 gig space as well, but the delay, if there is one, to the extent that there is a delay, I think it's sort of neutral for us.

我們希望成為一名優秀的玩家，也是 400 場演出領域的領先玩家，但如果有延遲的話，就延遲的程度而言，我認為這對我們來說是中性的。

And we'll look forward to continued strong sales of 100G and 40G until that time.

在此之前，我們將期待 100G 和 40G 的銷售持續強勁。

Our next question comes from Richard Shannon from Craig-Hallum.

我們的下一個問題來自 Craig-Hallum 的 Richard Shannon。

I guess, first one, on your design wins.

我想，第一個，你的設計獲勝。

You -- I think you talked about 7 -- in the last quarter 7 from data center and 4 that were new customers.

你——我想你談到了 7 個——在上個季度，7 個來自資料中心，4 個是新客戶。

Maybe if you -- within the data center, could you characterize the types of wins here?

也許如果您在資料中心內，您能描述一下這裡的勝利類型嗎？

Are they 400 -- or excuse me, 100 gig or above?

他們是 400 人嗎——或者打擾一下，是 100 人或以上嗎？

And anything about the new customers you can tell us?

您能告訴我們有關新客戶的任何資訊嗎？

Were they Tier 1, Tier 2s or cloud guys or anything like that?

他們是 1 級、2 級還是雲端人員或類似人員？

Yes.

是的。

So the design wins in the quarter were -- for the data center space were pretty much all 100-gig type of design wins.

因此，本季的設計勝利是——對於資料中心空間來說，幾乎都是 100G 類型的設計勝利。

We continue to be very active in the 400-gig qualifications that are ongoing.

我們繼續積極參與正在進行的 400 場資格賽。

As the previous question was asked about the schedule, we would expect those qualifications to be wrapping up here in the next quarter or 2 and then maybe some limited trials and then a wider-spread deployment in the second half of 2020.

正如上一個問題是關於時間表的，我們預計這些資格將在下一個或兩個季度完成，然後可能進行一些有限的試驗，然後在 2020 年下半年進行更廣泛的部署。

And so that schedule again is sort of broadly in line with what we expected, but the design wins that we're seeing now are largely for 100 gig.

因此，這個時間表再次與我們的預期大致一致，但我們現在看到的設計勝利主要是針對 100 演出。

And we did disclose the fact that several of those were with new customers, which I think is very important because it represents -- or it reflects, rather, the fact that all the effort that we've put in and all the information that we've talked to you about in the past regarding the efforts that we put into diversifying our customer base are actually playing out not only within the data center space, that is we're becoming less dependent on just a few large data center operators, but branching out to a wider swath of the data center space.

我們確實披露了其中一些是與新客戶合作的事實，我認為這一點非常重要，因為它代表了——或者更確切地說，它反映了這樣一個事實：我們付出的所有努力以及我們獲得的所有資訊過去我們曾與您討論過，我們為實現客戶群多元化所做的努力實際上不僅在數據中心領域發揮作用，也就是說，我們對少數大型數據中心運營商的依賴程度正在降低，但是擴展到更廣泛的資料中心空間。

But we also talked about the fact that some of our design wins are coming from areas outside of the data center like telecom and in particular the 5G-related telecom qualifications.

但我們也談到了這樣一個事實，即我們的一些設計成果來自資料中心以外的領域，例如電信，特別是與 5G 相關的電信資格。

And I think those are also important for customer diversification going forward.

我認為這些對於未來客戶多元化也很重要。

Okay.

好的。

One more question for me on the cable TV side here.

這裡還有一個關於有線電視的問題想問我。

You mentioned that you had a large order, and I believe you said it's something that will be recognized outside this quarter.

您提到您有一個大訂單，我相信您說這是本季度之外會得到認可的事情。

Maybe just a couple of things here.

也許這裡只有幾件事。

Maybe you can kind of give us a sense of the size of the order and to the extent you think this conveys a much better environment for -- at least for your cable business as it relates to Remote PHY as we get into next year.

也許您可以讓我們了解訂單的規模，以及您認為這為您的有線電視業務帶來了更好的環境，因為它與我們明年進入的遠端 PHY 相關。

Because obviously this year hasn't been the best for the cable TV business.

因為顯然今年對有線電視業務來說並不是最好的一年。

Yes.

是的。

So the order was actually, I mean, the -- it's the beginning of several orders and we expect to be, hopefully, a more or less continuous stream of new orders for the Remote PHY.

所以，我的意思是，該訂單實際上是——它是幾個訂單的開始，我們希望能夠或多或少地連續不斷地發布遠端 PHY 的新訂單。

In the quarter, I think the magnitude of the orders in sum was in the low single-digit millions, and it will be delivered over the next couple quarters.

我認為本季的訂單總量僅為數百萬個，並將在接下來的幾季內交付。

So maybe that amount of revenue doesn't necessarily move the needle that much, although it's relatively significant for our cable TV segment given where it's at right now, but I think, more than that, it reflects a strong statement about the acceptability and the necessity of Remote PHY as a new technology and the fact that it's starting to get adopted by MSOs.

因此，也許這筆金額的收入不一定會帶來太大的影響，儘管考慮到目前的狀況，它對於我們的有線電視部門來說相對重要，但我認為，更重要的是，它反映了關於可接受性和遠端 PHY 作為一項新技術的必要性以及它開始被 MSO 採用的事實。

I believe there was at least 2 end customer MSOs who are involved in this order.

我相信至少有 2 個最終客戶 MSO 參與了該訂單。

So it's not just coming from 1 MSO, but there's some -- the beginnings of some broad-based demand for Remote PHY among the MSO community.

因此，它不僅來自 1 個 MSO，而是 MSO 社群中對遠端 PHY 的一些廣泛需求的開始。

So I think that's probably maybe the message more than the revenue from that specific group of initial orders...

所以我認為這可能比特定初始訂單組的收入更能傳達訊息...

(inaudible).

（聽不清楚）。

I'm sorry.

對不起。

You asked also about kind of the, what does this mean for the overall cable TV business, I guess, with AOI.

您還詢問了有關 AOI 的問題，我猜這對整個有線電視業務意味著什麼。

And I would say certainly 2019 has been a challenging year in the cable space, as you noted.

正如您所指出的，我想說，2019 年對於有線電視領域來說無疑是充滿挑戰的一年。

And as others who've already reported even this cycle have also reported relatively weak results, perhaps even unexpectedly weak results.

正如其他已經報告過這一周期的人也報告了相對較弱的結果，甚至可能是出乎意料的疲軟結果。

As we talked about in our prepared remarks earlier, I think what's happening in cable right now is really a combination of MSOs just kind of reducing their overall spending largely because the competitive threat is probably somewhat less than they would have perceived it to be a year or 2 ago, but the other factor that's at stake here is the fact that new technologies continue to become available.

正如我們在之前準備好的發言中談到的那樣，我認為現在有線電視領域發生的事情實際上是MSO 的組合，只是減少了他們的總體支出，很大程度上是因為競爭威脅可能比他們想像的一年要小一些。或 2 年前，但這裡的另一個關鍵因素是新技術不斷出現。

And we highlighted DOCSIS 4.0 and in particular Extended Spectrum DOCSIS which is a subset of the DOCSIS 4.0 standard.

我們重點介紹了 DOCSIS 4.0，特別是擴展頻譜 DOCSIS，它是 DOCSIS 4.0 標準的子集。

And those new technologies, as we as a vendor community start to bring those new technologies to availability, MSOs are justifiably reluctant to invest in older technologies when they know that the new technology is imminent.

而這些新技術，當我們作為供應商社群開始將這些新技術投入使用時，當 MSO 知道新技術即將到來時，他們有理由不願意投資舊技術。

And so I think it's a combination of competitive dynamics and new technology development that's leading to a relatively weak condition right now.

因此，我認為競爭動態和新技術開發的結合導致了目前相對疲軟的狀況。

Now all that being said, 5G, I think, as it starts to become a real -- maybe not an actual threat but at least the perception of that being a near-term threat, will start to drive the MSOs.

話雖這麼說，我認為，隨著 5G 開始成為真正的威脅——也許不是真正的威脅，但至少人們認為它是近期的威脅，它將開始推動 MSO 的發展。

And I think, the availability of technologies like DOCSIS 4.0 that will enhance the bandwidth, dramatically enhance the bandwidth, delivery capability of HFC networks, that will also spur a desire by the MSOs to invest in upgrading their networks.

我認為，像 DOCSIS 4.0 這樣的技術的出現將增強頻寬，極大地增強 HFC 網路的頻寬和傳輸能力，這也將激發 MSO 投資升級網路的願望。

(Operator Instructions) Our next question comes from Tim Savageaux from Northland Capital Markets.

（操作員說明）我們的下一個問題來自 Northland Capital Markets 的 Tim Savageaux。

A couple of questions.

有幾個問題。

First, with regard to 100-gig transceivers, which remains at a pretty reduced level, I wonder if you could characterize that or update us a function of overall spending at customers or a function of market share and kind of competitive intensity.

首先，關於 100G 收發器，它仍然處於相當低的水平，我想知道您是否可以描述這一點或向我們更新客戶總體支出的函數或市場份額和競爭強度的函數。

Should we be focused on a broad return in spending to see a recovery there?

我們是否應該關注支出的廣泛回報以看到那裡的復甦？

Or does something need to happen on the market share side?

或者市場佔有率方面是否需要發生一些事情？

No, I think market share has been very stable, Tim.

不，我認為市場佔有率一直非常穩定，提姆。

I don't think that's meaningfully changed.

我認為這並沒有發生有意義的改變。

In fact, if you look at the bigger picture, as we highlighted in our prepared remarks, we're actually gaining new customers for 100G.

事實上，如果你從更大的角度來看，正如我們在準備好的演講中所強調的那樣，我們實際上正在為 100G 贏得新客戶。

A number of the design wins that we had, as we talked about in the previous, with the previous question, have to do with 100G design wins.

正如我們在先前的問題中所討論的，我們獲得的許多設計勝利都與 100G 設計勝利有關。

So I think actually we're seeing very positive dynamics in 100G.

所以我認為實際上我們在 100G 中看到了非常積極的動態。

The 100G business this quarter, the actual unit sales were up 49% sequentially, so quite apart from it being a reduction.

本季100G業務的實際單位銷售額較上季成長了49%，所以除了減少之外，情況也完全不同。

I mean, if -- you can look at a year-over-year decline.

我的意思是，如果——你可以看看同比下降情況。

And that's a true statement, but I think on a sequential basis -- as we talked about last quarter, we thought that Q2 represented kind of a low point in particular for 100G sales but for data center overall.

這是一個真實的說法，但我認為在連續的基礎上- 正如我們上個季度所討論的那樣，我們認為第二季度代表了一種低點，特別是對於100G 銷售而言，但對於整個數據中心而言。

And I think that's, so far at least, proven to be true.

我認為至少到目前為止，這被證明是正確的。

100G sales were up sharply and -- in terms of units.

100G 銷售量大幅成長－就單位而言。

And as we see the third of our 3 large data center customers starting to pull out of the reduced ordering cycle that they've been in, I think that'll be positive for the 100G business.

當我們看到我們的 3 個大型資料中心客戶中的第 3 個開始擺脫他們所經歷的縮短的訂購週期時，我認為這對 100G 業務將是積極的。

And certainly the new customers that we won this quarter will also be positive for the 100G business.

當然，我們本季贏得的新客戶也將對 100G 業務產生正面影響。

Okay.

好的。

And kind of unrelated question here talking about 400 gig: Do you expect to be able to maintain a vertically integrated strategy with regard to lasers as we move to 400 gig?

這裡有一個關於 400 gig 的不相關問題：當我們轉向 400 gig 時，您是否期望能夠維持有關雷射器的垂直整合策略？

Yes.

是的。

That's our expectation.

這是我們的期望。

We believe we have the right devices for the 400-gig products.

我們相信我們擁有適合 400g 產品的設備。

As we talked about, we're in qualification on a lot of those products right now and things are going well.

正如我們所說，我們現在正在對許多此類產品進行資格認證，一切進展順利。

So...

所以...

And ladies and gentlemen, at this time, I'm showing no additional questions.

女士們先生們，此時我沒有提出其他問題。

I'd like to turn the conference call back over to Dr. Thompson Lin for closing remarks.

我想將電話會議轉回給 Thompson Lin 醫師做總結發言。

Okay.

好的。

Thank you for joining us today.

感謝您今天加入我們。

As always, we thank our investors, customers and employees, for your continued support; and look forward to seeing many of you at upcoming investment conference.

一如既往，我們感謝投資者、客戶和員工的持續支持；並期待在即將召開的投資會議上見到你們。

Ladies and gentlemen, that does conclude today's conference call.

女士們先生們，今天的電話會議到此結束。

We do thank you for joining.

我們非常感謝您的加入。

You may now disconnect your lines.

現在您可以斷開線路。