DZS Inc (DZSI) 2022 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the DZS Second Quarter 2022 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 DZS 2022 年第二季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Ted Moreau, Vice President of Investor Relations. Please go ahead.

現在我想將會議交給今天的發言者、投資者關係副總裁泰德·莫羅 (Ted Moreau)。請繼續。

Thank you, Shannon. Good morning, and welcome to the DZS Second Quarter 2022 Earnings Conference Call. Joining us today are DZS President and CEO, Charlie Vogt; and CFO, Misty Kawecki. Yesterday after market close, we published to the Investor Relations section of the DZS website, our shareholder report for the second quarter of 2022 to provide shareholders, prospective shareholders and analysts with market insights, product, business and financial updates as well as forward-looking information.

謝謝你，香農。早上好，歡迎參加 DZS 2022 年第二季度收益電話會議。今天加入我們的是 DZS 總裁兼首席執行官 Charlie Vogt；和首席財務官 Misty Kawecki。昨天收盤後，我們在 DZS 網站的投資者關係部分發布了 2022 年第二季度的股東報告，為股東、潛在股東和分析師提供市場洞察、產品、業務和財務更新以及前瞻性信息信息。

On this call, we will provide projections and other forward-looking statements regarding future events or the future financial performance of the company. The company cautions you that such statements are only current expectations and actual events or results may differ materially. Please refer to documents that the company files with the SEC, including its most recent 10-Q and 10-K reports in the forward-looking statements section of the shareholder report that was filed on a Form 8-K as well as being available on the Investor Relations section of our website. These documents identify important risk factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements.

在這次電話會議上，我們將提供有關未來事件或公司未來財務業績的預測和其他前瞻性陳述。公司提醒您，此類陳述僅是當前的預期，實際事件或結果可能存在重大差異。請參閱該公司向 SEC 提交的文件，包括以 8-K 表格提交並可在以下網站獲取的股東報告前瞻性陳述部分中的最新 10-Q 和 10-K 報告：我們網站的投資者關係部分。這些文件確定了可能導致實際結果與公司預測或前瞻性陳述中包含的結果存在重大差異的重要風險因素。

Please note that unless otherwise indicated, the financial metrics being provided to you on this call are determined on a non-GAAP basis. These items, together with corresponding GAAP numbers and the reconciliation to GAAP are contained in the shareholder report referenced earlier. During the third quarter, we will be participating in investor conferences hosted by 3 part advisors, Rosenzweig and Jefferies, and Charlie will also be participating in a panel session at a colon conference next week.

請注意，除非另有說明，本次電話會議中向您提供的財務指標是根據非公認會計原則確定的。這些項目以及相應的 GAAP 數字和 GAAP 調節表包含在前面引用的股東報告中。在第三季度，我們將參加由 Rosenzweig 和 Jefferies 等三部分顧問主辦的投資者會議，查理還將參加下週舉行的冒號會議的小組會議。

I now have the pleasure to turn the call over to Charlie.

我現在很高興將電話轉給查理。

Thank you, Ted, and welcome investors, analysts and guests. As Ted shared yesterday after the market closed, we posted our second quarter shareholder report, which provides an update on our business, financial results, market trends and 2022 outlook. We are encouraged that the demand environment has remained robust and resilient in the face of increasing economic uncertainty. Service providers are laser focused on modernizing and upgrading their fixed and mobile networks to effectively compete, lower operating costs, reduce customer churn and increase revenue.

謝謝你，特德，歡迎投資者、分析師和嘉賓。正如 Ted 昨天在市場收盤後分享的那樣，我們發布了第二季度股東報告，其中提供了有關我們業務、財務業績、市場趨勢和 2022 年前景的最新信息。令我們感到鼓舞的是，面對日益增加的經濟不確定性，需求環境仍然保持強勁和彈性。服務提供商專注於固定和移動網絡的現代化和升級，以有效競爭、降低運營成本、減少客戶流失並增加收入。

With the new hybrid work-from-home environment in place, service providers understand that to compete and win in their respective markets, they must deliver smarter, faster and more cost-effective broadband Internet services. They are increasingly leaning into the home as consumers design and build smart homes and intelligent WiFi networks. As such, service providers are offering more advanced technologies and intelligent software solutions than ever before. Our Access edge solutions enable service providers to deliver hyper fast multi-gigabit broadband services.

隨著新的混合在家工作環境的到位，服務提供商認識到，要在各自的市場中競爭並獲勝，他們必須提供更智能、更快和更具成本效益的寬帶互聯網服務。隨著消費者設計和建造智能家居和智能 WiFi 網絡，他們越來越傾向於家庭。因此，服務提供商正在提供比以往更先進的技術和智能軟件解決方案。我們的接入邊緣解決方案使服務提供商能夠提供超快速的多千兆位寬帶服務。

Our subscriber edge solutions extends the multi-gigabit broadband connectivity throughout the home and office and to the specific devices connected to the WiFi network. Our Optical edge solutions enable service providers to cost effectively aggregate and transport last mile and mobile traffic. DZS's new cloud software solutions empower service providers to automate, orchestrate and optimize their network performance and leverage advanced data analytics to improve customer satisfaction, increase revenue and build customer loyalty.

我們的用戶邊緣解決方案將多千兆位寬帶連接擴展到整個家庭和辦公室以及連接到 WiFi 網絡的特定設備。我們的光學邊緣解決方案使服務提供商能夠經濟有效地聚合和傳輸最後一英里和移動流量。 DZS 的全新雲軟件解決方案使服務提供商能夠自動化、編排和優化其網絡性能，並利用先進的數據分析來提高客戶滿意度、增加收入並建立客戶忠誠度。

With over $120 billion of global government broadband infrastructure initiatives, the numerous Chinese vendor replacement opportunities spanning the United States, Canada, Europe and Pan Asia, we remain confident that the investment cycle for our cloud solutions as well as our Access, Subscriber and Optical edge solutions will remain strong and provide DZS with revenue and margin expansion growth prospects for the foreseeable future. The second quarter represented our sixth consecutive quarter with orders in excess of $100 million. Q2 bookings of $123 million increased our total backlog to $293 million, an increase of 83% year-over-year.

憑藉超過 1200 億美元的全球政府寬帶基礎設施計劃，以及遍布美國、加拿大、歐洲和汎亞的眾多中國供應商替代機會，我們對雲解決方案以及接入、用戶和光纖優勢的投資週期仍然充滿信心解決方案將保持強勁，並在可預見的未來為DZS 帶來收入和利潤擴張的增長前景。第二季度是我們連續第六個季度訂單超過 1 億美元。第二季度的預訂量為 1.23 億美元，使我們的積壓訂單總額達到 2.93 億美元，同比增長 83%。

Combined with $28 million of deferred software and service revenue, our total backlog and deferred revenue is now $321 million. Our first half bookings performance of $224 million, inclusive of 54 new and acquired customers and numerous new project wins highlights strong demand and momentum for our cloud software and our access subscriber and optical edge infrastructure solutions. The second quarter of 2022 reflected continued supply chain challenges for semiconductors and subcomponents as manufacturing and shipping port closures in China that began in March extended well into May.

加上 2800 萬美元的遞延軟件和服務收入，我們的積壓訂單和遞延收入總額目前為 3.21 億美元。我們上半年的預訂業績為2.24 億美元，其中包括54 個新客戶和收購客戶以及眾多新項目的勝利，凸顯了對我們的雲軟件以及接入用戶和光學邊緣基礎設施解決方案的強勁需求和勢頭。 2022 年第二季度反映了半導體和子零部件供應鏈面臨的持續挑戰，因為中國從 3 月份開始的製造和運輸港口關閉一直持續到 5 月份。

Second quarter revenue of $91 million represented an increase of 18% sequentially and 10% year-over-year and was unfavorably impacted by approximately $5 million due to unforeseen foreign exchange rate fluctuations during the quarter, spanning the euro, Korean Won and Japanese Yen. Without these foreign exchange fluctuations, revenue for the quarter would have been $96 million, which would have been closer to the top end of our Q2 guidance range. Likewise, gross margin and earnings were also unfavorably impacted by foreign exchange fluctuations as well as the incremental expedite and air freight logistics cost to satisfy customer deployment schedules.

第二季度收入為 9100 萬美元，環比增長 18%，同比增長 10%，但由於本季度不可預見的歐元、韓元和日元匯率波動，受到約 500 萬美元的不利影響。如果沒有這些外匯波動，該季度的收入將為 9600 萬美元，這將更接近我們第二季度指導範圍的上限。同樣，毛利率和收益也受到匯率波動以及滿足客戶部署計劃而增加的加急和空運物流成本的不利影響。

As I reflect on the past 8 quarters since I joined DZS, we are pleased with the results we have delivered. 187 new customers, $903 million of new orders, numerous next-generation product innovations and 2 cloud software acquisitions. In addition, we have completed our people, product and brand transformation initiatives. The only outstanding infrastructure initiative that is still ongoing is our one DZS ERP systems project, which we expect to be completed in Q1 of 2023. In just 2 short years, DZS has built an enviable cloud software portfolio that complements our access, subscriber and optical edge infrastructure solutions.

當我回顧加入 DZS 以來的過去 8 個季度時，我們對所取得的成果感到滿意。 187 個新客戶、9.03 億美元的新訂單、眾多下一代產品創新和 2 次雲軟件收購。此外，我們還完成了人員、產品和品牌轉型計劃。唯一仍在進行中的出色基礎設施計劃是我們的一個DZS ERP 系統項目，我們預計該項目將於2023 年第一季度完成。在短短兩年內，DZS 就構建了令人羨慕的雲軟件產品組合，補充了我們的接入、訂戶和光纖邊緣基礎設施解決方案。

During this time, we have been strategically focused on alignment with our marquee customers around the world and transforming our portfolio with differentiated high-margin software subscription solutions. In Q1 of 2021, we acquired Rift, a disruptive cloud software innovator that developed a vendor-neutral Tier 1-focused orchestration and software automation platform, which formed the foundation of DZS Cloud. During the second quarter of 2022, we accelerated our vision for DZS Cloud with the acquisition of ASSIA's Service Assurance and WiFi management software portfolio. The transaction, which included ASSIA's award-winning Express Service Assurance and Cloud Check WiFi experience management software solutions provided DZS with valuable intellectual property, 31 marquee service provider customers and an elite team of cloud and Artificial Intelligence software engineers.

在此期間，我們一直戰略性地專注於與世界各地的大客戶保持一致，並通過差異化的高利潤軟件訂閱解決方案來轉變我們的產品組合。 2021 年第一季度，我們收購了Rift，這是一家顛覆性的雲軟件創新者，該公司開發了一個供應商中立的、以一級為中心的編排和軟件自動化平台，該平台構成了DZS Cloud的基礎。 2022 年第二季度，我們通過收購 ASSIA 的服務保障和 WiFi 管理軟件產品組合，加快了 DZS Cloud 的願景。此次交易包括ASSIA 屢獲殊榮的Express Service Assurance 和Cloud Check WiFi 體驗管理軟件解決方案，為DZS 提供了寶貴的知識產權、31 個大型服務提供商客戶以及一支由雲和人工智能軟件工程師組成的精英團隊。

We expect pro forma annualized revenue to be approximately $25 million and gross margins to be approximately 80%. The all-cash purchase was equivalent to 1x revenue. Our newly acquired marquee customers spanning primarily North America and MEA represents a significant cross-selling and market expansion opportunity for our Access subscriber and optical edge solutions. Shifting to our progress with Open RAN. During the second quarter, we began shipping our market-defining front-haul gateway platform to a new marquee mobile operator in Europe, aligned with Rakuten Symphony's Open RAN 5G reference architecture. Additionally, we unveiled our next-generation environmentally hardened 400-gigabit coherent optical aggregation router platform, Sabre.

我們預計預計年化收入約為 2500 萬美元，毛利率約為 80%。全現金購買相當於收入的 1 倍。我們新收購的大客戶主要分佈在北美和中東和非洲地區，這為我們的接入用戶和光學邊緣解決方案提供了重要的交叉銷售和市場擴張機會。轉向我們在 Open RAN 方面的進展。第二季度，我們開始向歐洲一家新的大型移動運營商交付我們的市場定義前傳網關平台，該平台與 Rakuten Symphony 的 Open RAN 5G 參考架構保持一致。此外，我們還推出了下一代環保型 400 Gb 相干光聚合路由器平台 Sabre。

Sabre redefines the optical edge category significantly improving deployment flexibility, application optionality and the economics of middle mile transport. We demonstrated Sabre at the Fiber Connect 2022 Conference in Nashville in June to an audience of service providers poised to leverage the $1 billion middle mile grant program and aligned with the $10 billion capital projects funds as well as the $42 billion of broadband equity, access and deployment program. The highly scalable Sabre 4400 delivers multi-terabit bandwidth in a compact modular platform spanning distances of up to 100 kilometers.

Sabre 重新定義了光學邊緣類別，顯著提高了部署靈活性、應用可選性和中英里傳輸的經濟性。我們於6 月在納什維爾舉行的Fiber Connect 2022 大會上向服務提供商觀眾展示了Sabre，這些服務提供商準備利用10 億美元的中英里補助計劃，並與100 億美元的資本項目基金以及420 億美元的寬帶股權、接入和服務相結合。部署計劃。高度可擴展的 Sabre 4400 在緊湊的模塊化平台中提供多太比特帶寬，傳輸距離可達 100 公里。

The environmentally hardened platform is perfectly suited for bridging the digital divide, allowing deployments virtually anywhere in the network at a fraction of the cost of traditional solutions. Sabre is a duly designed for mobile edge transport applications aligned with 5G cell sites for aggregating last mile fiber deployments within the broader $17 billion mobile and optical edge transport addressable market. Our innovation and culture set the tone at DZS. We are thrilled with the new talent that continues to join the company.

該環境強化平台非常適合彌合數字鴻溝，幾乎可以在網絡中的任何位置進行部署，而成本只是傳統解決方案的一小部分。 Sabre 專為與 5G 蜂窩基站相結合的移動邊緣傳輸應用而設計，用於在更廣泛的 170 億美元移動和光學邊緣傳輸可尋址市場中聚合最後一英里光纖部署。我們的創新和文化為 DZS 定下了基調。我們對繼續加入公司的新人才感到興奮。

As we look to the remainder of 2022 and into 2023, we plan to accelerate our go-to-market strategy and playbook designed to capture new customers and better position DZS with our existing customers. In closing, despite supply chain headwinds and wide fluctuations with foreign exchange, during the second quarter, DZS delivered $123 million in new orders and added 38 new customers, including our newly acquired ASSIA customers. Our $91 million in revenue was within our guidance range, though if not for the unforeseen foreign exchange fluctuations, revenue would have topped $96 million. We remain disciplined in our execution and confident in our ability to gain market share in North America and Europe, while delivering our margin expansion plans, especially as foreign exchange in today's supply chain dynamics stabilize in 2023.

展望 2022 年剩餘時間和 2023 年，我們計劃加快我們的上市戰略和行動手冊，旨在吸引新客戶並在現有客戶中更好地定位 DZS。最後，儘管存在供應鏈逆風和匯率大幅波動，但 DZS 在第二季度交付了 1.23 億美元的新訂單，並增加了 38 個新客戶，其中包括我們新收購的 ASSIA 客戶。我們 9100 萬美元的收入在我們的指導範圍之內，但如果沒有不可預見的外匯波動，收入將超過 9600 萬美元。我們在執行方面保持嚴格的紀律，並對我們在北美和歐洲獲得市場份額的能力充滿信心，同時實現我們的利潤擴張計劃，特別是在當今供應鏈動態中的外彙在2023 年穩定下來的情況下。

With that, I'd like to turn the call over to Misty, walk through our Q2 financial highlights in our Q3 and 2022 outlook. Misty?

說到這裡，我想將電話轉給 Misty，在我們的第三季度和 2022 年展望中介紹我們第二季度的財務亮點。濛濛？

Thank you, Charlie, and good morning, everyone. I'd like to start by discussing our foreign currency exposure in order to help you better understand the impacts on our business in the second quarter. Many foreign currencies, particularly the Korean Won, Japanese Yen and Euro weakened against the U.S. Dollar throughout the quarter, creating unexpected headwinds to our Q2 results. The foreign currency impact is greater on our revenue and gross margin than it is on our operating income as we are partially naturally hedged in our foreign jurisdictions.

謝謝你，查理，大家早上好。我想首先討論我們的外匯風險，以幫助您更好地了解第二季度對我們業務的影響。許多外幣，特別是韓元、日元和歐元兌美元整個季度都走軟，給我們第二季度的業績帶來了意想不到的阻力。外幣對我們的收入和毛利率的影響比對我們營業收入的影響更大，因為我們在外國司法管轄區進行了部分自然對沖。

During Q2, we generated 28% of our total revenue from Korea, 11% of our total revenue from Japan and 9% from Europe. As the U.S. Dollar strengthened throughout Q2, these revenues converted to fewer dollars. I will provide additional detail as I walk through our financial results. As Charlie indicated, underlying demand remained strong with total orders for Q2 of $123 million, our sixth consecutive quarter with orders exceeding $100 million.

第二季度，我們總收入的 28% 來自韓國，11% 來自日本，9% 來自歐洲。隨著第二季度美元走強，這些收入兌換成的美元數量減少。我將在詳細介紹我們的財務業績時提供更多詳細信息。正如 Charlie 所言，潛在需求依然強勁，第二季度訂單總額達 1.23 億美元，這是我們連續第六個季度訂單超過 1 億美元。

As a result, we have set a new quarterly record for backlog at $293 million, up 83% year-over-year. When combined with $28 million in deferred software and services revenue, our combined backlog plus deferred revenue equaled $321 million. Backlog is continuously revalued to reflect current foreign currency exchange rates. Because of the strengthened U.S. dollar during Q2, our backlog was unfavorably impacted by $5 million and would have otherwise ended the quarter at $298 million or $326 million when combined with deferred revenue.

結果，我們創下了 2.93 億美元積壓訂單的新季度記錄，同比增長 83%。加上 2800 萬美元的遞延軟件和服務收入，我們的積壓訂單加上遞延收入總計 3.21 億美元。積壓訂單不斷重估以反映當前的外幣匯率。由於第二季度美元走強，我們的積壓訂單受到了 500 萬美元的不利影響，否則本季度末的訂單量將達到 2.98 億美元，加上遞延收入則為 3.26 億美元。

Our conversion of backlog to revenue remains challenged due to the ongoing subcomponent availability. Despite this constraint and $5 million of foreign currency impact, we still increased revenue 10% year-over-year to $91 million. During the second quarter, subcomponent availability skewed towards our customers in Asia, where revenue increased 26% year-over-year to $50 million.

由於子組件的持續可用性，我們將積壓訂單轉化為收入仍然面臨挑戰。儘管存在這一限制以及 500 萬美元的外匯影響，我們的收入仍同比增長 10% 至 9100 萬美元。第二季度，子組件供應向亞洲客戶傾斜，其收入同比增長 26% 至 5000 萬美元。

Within Asia, we have diversified our business beyond our stronghold across Korea and Japan and into the Pan-Asia region. Out of our overall $5 million of total foreign exchange revenue impact, approximately 90% of the impact occurred in converting revenue from Asia. Revenue from the Americas region increased 7% year-over-year to $28 million, reflecting our emphasis on expanding the DZS footprint in this strategic region. Revenue from EMEA declined 22% year-over-year to $13 million, reflecting the timing of shipments and foreign exchange. Our Q2 adjusted gross margin of 28% was impacted by unforeseen foreign currency changes.

在亞洲，我們的業務多元化，超越了韓國和日本的據點，進入了汎亞洲地區。在我們 500 萬美元的總外匯收入影響中，大約 90% 的影響發生在來自亞洲的收入轉換上。美洲地區的收入同比增長 7%，達到 2800 萬美元，反映出我們重視擴大 DZS 在這一戰略地區的足跡。歐洲、中東和非洲地區的收入同比下降 22% 至 1,300 萬美元，這反映出發貨時間和外彙的影響。我們第二季度調整後的毛利率為 28%，受到不可預見的外匯變化的影響。

About half of our cost of goods sold for our overall Asia business is based in Korean Won, allowing for a partial natural hedge. However, the remainder of our cost of goods sold are based in U.S. Dollars. In addition to FX, we incurred elevated cost of goods, increased expedite fees and shipping and logistics costs as we prioritize delivering products to our customers as timely as possible. The final factor weighing on our gross margins was that our revenue maxed was weighted towards Asia due to subcomponent availability.

我們整個亞洲業務的銷售成本中約有一半以韓元計算，從而可以進行部分自然對沖。然而，我們其餘的銷售成本以美元為單位。除了外匯之外，由於我們優先考慮盡快向客戶交付產品，因此我們還導致貨物成本增加、加急費以及運輸和物流成本增加。影響我們毛利率的最後一個因素是，由於子組件的可用性，我們的收入最大化偏向於亞洲。

Without the foreign currency and supply chain headwinds, we estimate our gross margin performance would have been approximately 750 basis points higher. In the second quarter, adjusted operating expenses were $29 million compared with $28 million in Q2 of 2021. The year-over-year increase reflects investments in our business, including the acquisition of ASSIA assets. The foreign exchange impact decreased operating expenses by $800,000 during Q2 as we have a partial natural foreign currency hedge with approximately 25% of our operating expenses denominated in Korean won.

如果沒有外彙和供應鏈的不利因素，我們估計我們的毛利率表現將高出約 750 個基點。第二季度調整後運營費用為 2900 萬美元，而 2021 年第二季度為 2800 萬美元。同比增長反映了我們業務的投資，包括收購 ASSIA 資產。外匯影響使第二季度的運營支出減少了 800,000 美元，因為我們有部分自然外幣對沖，約 25% 的運營支出以韓元計價。

Our adjusted EBITDA was a loss of $3 million during Q2 of 2022 compared to a slight EBITDA loss in Q2 2021, and our non-GAAP EPS was a loss of $0.02 compared to a loss of $0.03 in Q2 2021. The primary factors influencing our Q2 profitability metrics were the unforeseen foreign currency changes and supply chain headwinds. We ended the quarter with $23 million in cash, and we have availability on our $30 million revolving credit facility. As a reminder, to pay for the ASSIA acquisition, we entered into a 5-year $25 million term loan.

與2021 年第二季度的輕微EBITDA 虧損相比，我們的調整後EBITDA 在2022 年第二季度虧損了300 萬美元，我們的非GAAP 每股收益虧損了0.02 美元，而2021 年第二季度虧損了0.03 美元。影響我們第二季度的主要因素盈利指標是不可預見的外匯變化和供應鏈阻力。本季度結束時，我們擁有 2300 萬美元的現金，並且我們還擁有 3000 萬美元的循環信貸額度。謹此提醒，為了支付 ASSIA 收購費用，我們簽訂了 5 年期 2500 萬美元的定期貸款。

Continued limited component availability has necessitated the increase in raw material inventory levels to align with our strong backlog and customer forecasts. We prioritize delivering products to our customers as timely as possible, which has resulted in a buildup of inventory over the past several quarters and has impacted our working capital. Inventory increased $19 million year-over-year or 37%. Annualized inventory turns were 3.8x during the second quarter compared with 4.7x a year ago.

組件供應持續有限，需要增加原材料庫存水平，以符合我們強勁的積壓訂單和客戶預測。我們優先考慮盡快向客戶交付產品，這導致過去幾個季度的庫存積累，並影響了我們的營運資金。庫存同比增加 1,900 萬美元，即 37%。第二季度年化庫存周轉率為 3.8 倍，而去年同期為 4.7 倍。

Day sales outstanding were 105 days in Q2 compared with 94 days in the year ago period as our Q2 '22 shipments were back unloaded due to China ports reopening in May. As a result, we experienced a $22 million sequential increase in accounts receivable to $105 million. Turning to our guidance.

第二季度的日銷售天數為 105 天，而去年同期為 94 天，因為由於中國港口 5 月份重新開放，我們 22 年第二季度的貨物被重新卸載。結果，我們的應收賬款連續增加了 2200 萬美元，達到 1.05 億美元。轉向我們的指導。

Our updated 2022 guidance now includes 7 months of financial contribution from the ASSIA asset acquisition. Additionally, we expect the U.S. dollar to remain strong relative to the Euro, Won and Yen in the second half of 2022. As a result, our full year revenue guidance reflects our anticipated FX impacts and our updated expectation for continued supply chain headwinds as we prioritize delivery to our customers. Our updated 2022 guidance is as follows: revenue of $380 million to $410 million, gross margin in a range of from 32.5% to 34.5%. Operating expenses in a range from $118 million to $122 million, and our full year EBITDA guidance is between $7 million and $17 million.

我們更新的 2022 年指導現在包括 ASSIA 資產收購帶來的 7 個月的財務貢獻。此外，我們預計 2022 年下半年美元相對於歐元、韓元和日元將保持強勢。因此，我們的全年收入指引反映了我們預期的外匯影響以及我們對供應鏈持續不利因素的最新預期。優先向我們的客戶交付。我們更新後的 2022 年指引如下：收入為 3.8 億美元至 4.1 億美元，毛利率在 32.5% 至 34.5% 範圍內。運營費用在 1.18 億美元到 1.22 億美元之間，我們的全年 EBITDA 指導在 700 萬美元到 1700 萬美元之間。

Looking to our third quarter, we are guiding revenue to a range of $100 million to $110 million, gross margins of 33% to 35% and operating expenses of $31 million to $34 million. As a result, we expect EBITDA between $2 million and $7 million. We anticipate our cash balance to be relatively flat sequentially at the end of the third quarter and look to improve our cash balance by Q1 of 2023 as we convert working capital to cash.

展望第三季度，我們預計收入在 1 億至 1.1 億美元之間，毛利率在 33% 至 35% 之間，運營費用在 3100 萬美元至 3400 萬美元之間。因此，我們預計 EBITDA 在 200 萬至 700 萬美元之間。我們預計第三季度末的現金餘額將相對持平，並希望隨著我們將營運資金轉換為現金，到 2023 年第一季度我們的現金餘額將有所改善。

In order to provide greater transparency into the evolution of our business, we intend to break revenue out by 2 new product technology categories when we report Q3 results in approximately 90 days. The first new category will be software and services, which will be an ever-increasing portion of our revenue mix as software grows and importance to our business. In the second quarter of 2022, this category represented approximately 9% of total revenue.

為了讓我們的業務發展更加透明，我們打算在大約 90 天內報告第三季度業績時，將收入分為 2 個新產品技術類別。第一個新類別將是軟件和服務，隨著軟件的增長及其對我們業務的重要性，這將成為我們收入組合中不斷增加的部分。 2022 年第二季度，該類別約佔總收入的 9%。

The second category will be the access networking, which will consist of our historic broadband connectivity and mobile transport product areas. We feel this breakout will provide a more useful reflection of our business and directional strategy going forward. That completes our prepared remarks.

第二類是接入網絡，其中包括我們歷史悠久的寬帶連接和移動傳輸產品領域。我們認為這次突破將為我們的業務和未來的方向性戰略提供更有用的反映。我們準備好的發言就到此結束了。

I'd now like to hand the call over to the operator to facilitate the Q&A session.

我現在想將電話轉交給接線員以方便問答環節。

(Operator Instructions) Our first question comes from [Paul Essi] with William K. Woodruff, your lines are now open.

（操作員說明）我們的第一個問題來自 [Paul Essi] 和 William K. Woodruff，您的線路現已開放。

Thank you for taking my call. It looks like you guys hit your numbers if you exclude China, the expediting charges and the currency, can you maybe Charlie talk a little bit about how this is going to affect the third and fourth quarters? And also maybe your assessment overall in the supply chain going forward? And then I have another question.

感謝您接聽我的電話。如果排除中國、加急費用和貨幣，你們似乎達到了預期目標，查理能否談談這將如何影響第三和第四季度？也許您對未來供應鏈的總體評估？然後我還有另一個問題。

Yes. I mean it's hard for us to be disappointed when the team certainly executed to the top end of the revenue guidance that we provided, as you pointed out, $96 million would have been our second best revenue quarter ever. So it's frustrating with the foreign exchange that hit us. I mean, if you look at just what happened within Q2, the Yen was up 12%. The Won was up 6%, the Euro was up 6%. And so with as much exposure that we have to Asia and Europe, we certainly were dealing with some things that obviously, as we were going into Q2, didn't see and certainly didn't see.

是的。我的意思是，當團隊確實執行了我們提供的收入指導的上限時，我們很難感到失望，正如您所指出的，9600 萬美元將是我們有史以來第二好的收入季度。因此，外匯波動對我們造成的打擊是令人沮喪的。我的意思是，如果你看看第二季度發生的事情，日元上漲了 12%。韓元上漲 6%，歐元上漲 6%。因此，鑑於我們在亞洲和歐洲擁有盡可能多的業務，我們當然正在處理一些顯然在進入第二季度時沒有看到、也肯定沒有看到的事情。

As it relates to the second half of the year, we've been working very closely with our global banking partner, JPMorgan and looking at what the anticipated foreign exchange fluctuations are likely to be in the second half. And the outlook that Misty had provided, and she can comment on it, incorporates what JPMorgan and other key banking partners have provided us with. So the outlook that we have assumes that foreign exchange doesn't change much in the second half of the year. What we are hearing from our banking partners is as we exit this year and enter 2023, that we believe that foreign exchange will return to normal levels, which will certainly be beneficial for the company.

由於與今年下半年有關，我們一直與我們的全球銀行合作夥伴摩根大通密切合作，研究下半年預期的外匯波動。米斯蒂提供的前景（她可以對此發表評論）包含了摩根大通和其他主要銀行合作夥伴向我們提供的內容。因此，我們的展望是假設下半年外匯不會發生太大變化。我們從銀行合作夥伴那裡聽到的是，隨著我們今年退出並進入2023年，我們相信外匯將恢復到正常水平，這肯定對公司有利。

Misty, I don't know if you want to comment on any of that?

Misty，不知道你是否想對此發表評論？

Yes. As it relates to foreign currency, we certainly had to project a bit of what we expect given some of the significant variances that occurred in the second quarter of 2022. And so we took some of those forecast views and incorporated that into the second half to have a better view of how we will perform in the second half.

是的。由於它與外幣相關，鑑於 2022 年第二季度發生的一些重大差異，我們當然必須預測一些我們的預期。因此，我們採用了其中一些預測觀點並將其納入下半年，以更好地了解我們下半年的表現。

I think the other thing that's important to appreciate from a margin perspective is if you look at the $321 million of total backlog and deferred more than 50% of that is North America and Europe. And so as we unlock more and more of our backlog into North America and Europe, the margin profiles, we expect to be much better.

我認為從利潤角度看，另一件值得重視的事情是，如果你看看 3.21 億美元的積壓訂單總額，其中超過 50% 的延期訂單來自北美和歐洲。因此，隨著我們釋放越來越多的北美和歐洲積壓訂單，我們預計利潤率會好得多。

Okay. My second question, maybe a little bit of shifting gears. I noticed that you have contract liabilities now on your balance sheet. And about 3/4 of them are current. I assume these are from the ASSIA acquisition, this would imply that a good portion, maybe 3/4 a year of your contracts are going to be renewed each year, which provides a nice opportunity to any pitch other than USA. 2 questions, first, can you give us a little color on maybe what your game plan is in the next 12 months or so?

好的。我的第二個問題，也許需要稍微改變一下。我注意到您的資產負債表上現在有合同負債。其中大約 3/4 是當前的。我認為這些來自 ASSIA 收購，這意味著您的合同中的很大一部分（也許每年 3/4）將每年續簽，這為除美國以外的任何項目提供了很好的機會。有兩個問題，首先，您能給我們介紹一下您在未來 12 個月左右的遊戲計劃嗎？

And secondly, how long do you expect it to take to fully integrate the ASSIA into your cloud offering and where you have a true, good value where you can get a little bit more aggressive on the pricing? And will this be done in phases or all at once?

其次，您預計需要多長時間才能將 ASSIA 完全集成到您的雲產品中，以及您在哪裡可以獲得真正的、良好的價值，並且可以在定價上更加激進一些？這將分階段完成還是一次性完成？

Yes. I mean the Express and Cloud Check software portfolios are already fully integrated in DZS Cloud. So there's really no gap in the integration because it really filled a void. If you think about where we were prior to the ASSIA transaction, rift was really all about network orchestration for mobile, which over the last year, we've tilted that to be able to provide a fixed access orchestration, which we think is a game-changing software platform, what something that nobody is doing in the space.

是的。我的意思是 Express 和 Cloud Check 軟件組合已經完全集成到 DZS Cloud 中。所以整合方面確實沒有差距，因為它確實填補了空白。如果你想想我們在 ASSIA 交易之前的情況，Rift 實際上就是關於移動網絡編排的，在過去的一年裡，我們已經將其傾斜為能夠提供固定的訪問編排，我們認為這是一個遊戲-不斷變化的軟件平台，這個領域沒有人在做的事情。

And what ASSIA gave us was really the service assurance and network aware software attributes from the OLT to the ONT to where fiber or DSL is terminated at the house. And then the WiFi experience management software is really all about software management inside the home in the WiFi part of the network. So all of that is net new, and that's all been fully integrated. The employees have been fully integrated.

ASSIA 為我們提供的實際上是從 OLT 到 ONT 到家庭光纖或 DSL 端接的服務保證和網絡感知軟件屬性。 WiFi 體驗管理軟件實際上是關於家庭內部網絡 WiFi 部分的軟件管理。因此，所有這些都是全新的，並且都已完全集成。員工已經完全融入。

Even the systems have been fully integrated into the way DZS is managing that business. You said something that's pretty important and it was obviously something that was really important to us as we were assessing the transaction through due diligence is just the timing of when some of these contracts renew. And we certainly have an opportunity as some of these contracts renew in 2023 to provide more value which we expect that will translate into an overall better ARPU for customers and better margin and revenue profile for us.

甚至這些系統也已完全集成到 DZS 管理該業務的方式中。你說了一些非常重要的話，這顯然對我們來說非常重要，因為我們正在通過盡職調查評估交易，而這只是其中一些合同續籤的時間。隨著其中一些合同在 2023 年續簽，我們當然有機會提供更多價值，我們預計這將轉化為客戶整體更好的 ARPU 以及我們更好的利潤和收入狀況。

Our next question comes from Dave Kang with B. Riley.

我們的下一個問題來自 Dave Kang 和 B. Riley。

Just wondering how big is India right now? And how big can you get next year, I'm hearing some major upgrades coming over the next couple of years?

只是想知道印度現在有多大？明年你能達到多大，我聽說未來幾年將會有一些重大升級？

Well, as I think -- you all are aware, we did announce, I think, 2 quarters ago that we were awarded at least Phase 1 of a pretty significant Tier 1 in India. We see that opportunity expanding for us. And there's obviously different parts of the network that we participate in from the optical transport side to the OLT to the ONT to the in-home WiFi. And Phase 1 of that was with the ONTs, the second phase of that is OLTs, which comes with a much higher profile and margin profile. So we certainly are being really thoughtful about the opportunity in India.

嗯，正如我所想，你們都知道，我想，我們確實在兩個季度前宣布，我們至少獲得了印度相當重要的一級項目的第一階段。我們看到這個機會正在為我們擴大。從光傳輸端到 OLT、ONT 到家庭 WiFi，我們參與的網絡顯然有不同的部分。第一階段是 ONT，第二階段是 OLT，它具有更高的配置和利潤配置。因此，我們當然正在認真考慮印度的機會。

I mean, it clearly is a country that has opened up for companies like DZS to be able to participate in their aggressive cap and replacement of the China, the former China vendors in that particular region. I think it's important also for investors and shareholders to appreciate we are being thoughtful about it. We're not rushing into India to go chase low-margin deals. But there are different book ends that come with different margin profiles. Obviously, the ONTs are much lower margin profile. And to be able to complement that with the OLTs and the software attributed to the OLTs is what is in Phase 2.

我的意思是，這顯然是一個對像 DZS 這樣的公司開放的國家，他們能夠參與其積極的限制和替換中國，即該特定地區的前中國供應商。我認為讓投資者和股東欣賞我們對此的深思熟慮也很重要。我們不會急於進入印度去追逐低利潤交易。但不同的書擋具有不同的頁邊距。顯然，ONT 的利潤率要低得多。第二階段的內容是能夠通過 OLT 和 OLT 的軟件來補充這一點。

So Phase 1 for us is the ONTs Phase 2 is the OLTs and middle mile transport, and that's something that we expect that we will book in the second half of this year and begin shipping in early 2023.

因此，我們的第一階段是 ONT，第二階段是 OLT 和中英里運輸，我們預計將在今年下半年預訂並在 2023 年初開始發貨。

Got it. And my next question is your APAC was fairly strong, but your mobile transport continues to be weak. I thought a significant portion of that was mobile. So can you kind of go over that? And what will get the mobile transport get going in the second half and beyond?

知道了。我的下一個問題是，你們的亞太地區相當強大，但你們的移動運輸仍然疲弱。我認為其中很大一部分是移動的。那麼你能回顧一下嗎？下半年及以後移動交通將如何發展？

Well, in my comments, I did share with you that we did win a large mobile operator in Europe in Q2. We will begin shipping on that project, which is a high-margin project in Q3 and Q4. We did see, SoftBank drove a lot of our revenue over the last, let's call it, 5, 6, 7 years.

嗯，在我的評論中，我確實與大家分享了我們確實在第二季度贏得了歐洲一家大型移動運營商。我們將開始發貨該項目，這是第三季度和第四季度的高利潤項目。我們確實看到，軟銀在過去（我們稱之為 5 年、6 年、7 年）中為我們帶來了大量收入。

And in the first half of this year, they're going through a reevaluation of their next-generation phone-based mobile transport platform that we're working on with them. And so the pause that I think you're seeing in some of the mobile transport revenue has to do with where SoftBank is in sort of their Phase 4 of their 5G mobile transport architecture with DZS, something that we anticipate.

今年上半年，他們正在重新評估我們正在與他們合作的下一代基於電話的移動運輸平台。因此，我認為您在一些移動傳輸收入中看到的停頓與軟銀與 DZS 的 5G 移動傳輸架構的第四階段有關，這是我們所預期的。

We will contract on in the second half of this year and begin to ship the next phase of that, which is a multiyear phase starting in '23.

我們將在今年下半年簽訂合同，並開始交付下一階段，這是從 23 年開始的多年階段。

Got it. And my last question is regarding U.S. various government funds, such as ARDA, have they been released yet?

知道了。我的最後一個問題是關於美國的各種政府基金，比如ARDA，它們已經發放了嗎？

Yes, sure. I mean we've got a lot of customers that are participating. I mean I think what we've been articulating and I think it's fair to assess with our 3 peers in North America. I think for the most part, outside of what we would refer to as sort of new entrants into the traditional regional ILECs. Most of those funds are flowing to service providers and through to the equipment supplier partners that they have historically been using.

是的，當然。我的意思是我們有很多客戶參與其中。我的意思是，我認為我們一直在闡述的內容，並且我認為與北美的 3 位同行進行評估是公平的。我認為大多數情況下，除了我們所說的傳統區域 ILEC 的新進入者之外。這些資金大部分流向服務提供商以及他們歷史上一直使用的設備供應商合作夥伴。

Where we've been seeing a lot of excitement, frankly, is a lot of the new fiber overbuilders and some of the utility co-ops who are entering into the market, that gives DZS, frankly, an opportunity to participate where we weren't historically an incumbent.

坦率地說，我們看到了很多令人興奮的地方，那就是許多新的光纖過度建設者和一些公用事業合作社正在進入市場，坦率地說，這給了 DZS 一個參與我們沒有參與的機會。 t 歷史上的現任者。

Got it. Actually, one more question because I get this question a lot, is that how solid is your backlog? Maybe can you go over like your contract policies, how much can be cancellable after so many months?

知道了。實際上，還有一個問題，因為我經常被問到這個問題，那就是你們的積壓工作有多紮實？也許你能回顧一下你的合同政策，這麼多個月後可以取消多少錢？

Well, ironically, we were just talking about this before the call. And I think it speaks volumes of the technology and the relationship and the dependency on our technology. I mean in the 2 years I've been here, we haven't had a D-book. So when we look at the historical backlog over the last 2 years and including the $293 million, which would have been $298 million, if not for some of the foreign exchange impacts. We haven't seen any D-books.

好吧，具有諷刺意味的是，我們在電話會議之前剛剛討論過這個問題。我認為這充分說明了技術、關係以及對我們技術的依賴。我的意思是，在我來這裡的兩年裡，我們還沒有一本 D 書。因此，當我們查看過去 2 年的歷史積壓情況時，包括 2.93 億美元，如果沒有一些外匯影響的話，本應為 2.98 億美元。我們還沒有看到任何 D 書。

And so look, I mean customers can do whatever they want, I mean, independent of contracts. I mean, I don't know, in 30 years I've been here, Dave, that I've ever pulled out a contract and fought with a customer on it. I mean we're trying to do the right thing for customers. But I think customers have been very supportive and they've been very patient with the extended and elongated lead times, and we've been very fortunate that we've not seen any customers derail from the committed orders that they have.

所以看，我的意思是客戶可以做任何他們想做的事，我的意思是，獨立於合同。我的意思是，戴夫，我不知道，在我來到這裡的 30 年裡，我是否曾經退出過一份合同並與客戶發生過爭執。我的意思是我們正在努力為客戶做正確的事情。但我認為客戶非常支持，他們對延長的交貨時間非常耐心，我們很幸運，我們沒有看到任何客戶偏離他們所承諾的訂單。

And I think to add to that, Dave, I think Paul mentioned it earlier, but on the contract liabilities, which we have most commonly referred to as deferred revenue, those are projects that have we've built, but we haven't recognized the revenue, for example, a maintenance contract, right? And that can vary in terms from 1 month to 3 years. And so deferred revenues are already billed and solid backlog, if you will.

我想補充一點，戴夫，我認為保羅之前提到過，但是關於合同負債，我們最常稱為遞延收入，這些項目是我們已經建造的，但我們還沒有認識到收入，例如維護合同，對吧？期限從 1 個月到 3 年不等。因此，如果您願意的話，遞延收入已經被計費並且積壓了大量訂單。

Our next question comes from Tore Svanberg with Stifel.

我們的下一個問題來自 Tore Svanberg 和 Stifel。

Congratulations on the continuous transformation here and certainly the record backlog. It sounds like you had a handle on the ForEx now, but I was just wondering on the backlog conversion, Charlie. How is that trending, especially in light of the component shortages and things like that? Is that really starting to ease and you're starting to see that backlog conversion now moving in the right direction?

祝賀這裡的持續轉型，當然還有創紀錄的積壓。聽起來你現在已經掌握了外匯交易，但我只是想知道積壓的轉換，查理。這種趨勢如何，特別是考慮到零部件短缺等問題？這種情況是否真的開始緩解，並且您開始看到積壓的轉換現在正朝著正確的方向發展？

Yes. I mean one of the things-- I mean, we certainly are trying to align with this sort of first in, first out mindset. I mean, we are trying to do everything we possibly can to meet customer deployment schedules. And so we're trying to adhere to the best we can to the sort of first in, first out from a backlog perspective. And we're in August of '22.

是的。我的意思是，我們當然正在努力遵循這種先進先出的心態。我的意思是，我們正在盡一切努力來滿足客戶的部署計劃。因此，從積壓的角度來看，我們正在盡力堅持先進先出的原則。我們現在是 22 年 8 月。

And sometimes we forget that there were significant price increases that all of the equipment suppliers in this industry incurred starting in the second half of last year. So we're trying to aggressively flush out a lot of the backlog that was impacted by the price increases, but not yet favorably impacted by price increases that we passed along to customers. And so some of that you're seeing in what we delivered in Q2. I think you'll see some of it in Q3.

有時我們會忘記，該行業的所有設備供應商從去年下半年開始都出現了大幅漲價。因此，我們正在努力積極清理大量受價格上漲影響的積壓訂單，但尚未受到我們轉嫁給客戶的價格上漲的有利影響。因此，您可以在我們第二季度交付的產品中看到其中的一些內容。我想你會在第三季度看到其中的一些。

But as we've been sort of articulating this whole year, we had sort of expected that by the end of Q3, most all of the backlog that was attributed to the higher price and not attributed to price increases passed along to our customers will have flushed out. So we look at some low-margin projects that we have on the books that will flush out in Q3 and a little bit left in Q4. And then most everything is, frankly, based on new pricing and the current cost structure that we have.

但正如我們今年一直在闡述的那樣，我們預計到第三季度末，大部分歸因於價格上漲而不是歸因於價格上漲的積壓將轉嫁給我們的客戶衝了出來。因此，我們研究了一些賬面上的低利潤項目，這些項目將在第三季度淘汰，並在第四季度剩下一些。坦率地說，大多數事情都是基於新的定價和我們當前的成本結構。

I mean with the only real variable being the foreign exchange fluctuations, which let's hope that, that stabilizes. And we're seeing less and less-- I mean there was-- the other thing that's important to appreciate is the way expedite fees work, I mean, at least with DZS, and I speak to a lot of my peers, the way the expedite charges were implemented is if you agree to an expedite 6 months ago for something that you were pulling in to this quarter, you were paying for it and it was on the books 6 months ago as a reserve, but you were paying for it 6 months ago. So it wasn't like you got an expedite, you agree to an expedite today, it's going to ship in 6 months and that cash and that expense follows it.

我的意思是，唯一真正的變量是外匯波動，我們希望外匯波動能夠穩定下來。我們看到的情況越來越少——我的意思是有——另一件值得欣賞的重要事情是加急費的運作方式，我的意思是，至少在DZS 中，我和很多同行交談過，加急費用的實施是，如果您同意在6 個月前為您在本季度拉入的某些東西加急，您正在為此付費，並且它在6 個月前作為儲備金記在賬本上，但您正在為此付費6個月前。所以這並不是說你得到了加急，你今天同意加急，它將在 6 個月內發貨，現金和費用也會隨之而來。

You're paying for it now and the impact from a margin perspective happens when it ships. So there's some of that that's lingering from, we saw some of it in Q1, we saw some of it in Q2, we'll see some of it in Q3. But I will tell you that we are seeing a much more collaborative ecosystem of subcomponent and semiconductors. And you're covering that space, so you know it probably better than anyone on the call that we are seeing a bit of a shift as consumers and a lot of consumer electronics technologies sort of pump the brakes and a lot of those wafers and chips are finding their way to ease into our space.

您現在就需要支付費用，從利潤角度來看，影響會在發貨時發生。因此，有些問題仍然存在，我們在第一季度看到了一些，在第二季度看到了一些，我們將在第三季度看到一些。但我會告訴你，我們正在看到一個更加協作的子組件和半導體生態系統。你正在報導這個領域，所以你可能比電話會議上的任何人都清楚，隨著消費者和許多消費電子技術的踩剎車以及大量的晶圓和芯片，我們看到了一些轉變正在尋找輕鬆進入我們空間的方式。

I'm hoping that the second half of this year, we're seeing a lot less need for expedite fees. And also, remember, we've got an aggressive plan to exit China. We're still incurring some tariffs with some of the existing backlog into the U.S., which we expect a lot of that will go away in 2023 just based on some of the consolidation decisions that we're making on the CM side. So there is a lot of multifaceted margin enhancement elements that will attribute to a much different business profile in '23 as we flush out some of the old backlog as we move out of China and not incur some of the tariffs. And we certainly hopefully are seeing a more stabilized FX and less expedite charges that we're incurring in '22.

我希望今年下半年，我們對加急費用的需求會減少很多。另外，請記住，我們有一個退出中國的積極計劃。我們仍在對美國的一些現有積壓訂單徵收一些關稅，根據我們在 CM 方面做出的一些整合決策，我們預計其中大部分將在 2023 年消失。因此，有很多多方面的利潤提升因素，這些因素將導致 23 年的業務狀況截然不同，因為我們在遷出中國時清理了一些舊的積壓訂單，並且不會產生一些關稅。我們當然希望看到匯率更加穩定，並且我們在 22 年產生的費用會減少。

That's great perspective. And my next question is-- and by the way, I really appreciate you're going to start sort of reporting revenues by software versus product. And related to that, I assume that the sort of mix trajection of software and the move towards 40% gross margin, that all of that is still on track, is just basically just being delayed by a couple of quarters because of the ForEx issues.

這是一個很棒的觀點。我的下一個問題是——順便說一句，我真的很感激你們將開始按軟件與產品來報告收入。與此相關的是，我認為軟件的混合軌跡和向 40% 毛利率的轉變，所有這些仍然在正軌上，只是由於外匯問題基本上被推遲了幾個季度。

That's exactly right. That's exactly right.

完全正確。完全正確。

And Tore, when you look at our normalized tried to give, added back to 750 basis points, right? You get to this quarter around 35% on a year-to-date basis, we're around 36%. If you, again, add our ASSIA contribution to that of 250 to 350 basis points you're getting really close to the 40%.

Tore，當你看看我們的標準化嘗試時，加回了 750 個基點，對吧？從年初至今來看，本季度的增長率約為 35%，而我們約為 36%。如果您再次將我們的 ASSIA 貢獻加上 250 到 350 個基點，您就非常接近 40%。

Very good. And then just one last question on inventory. Should we assume that the inventory will be back to sort of the normalized range by Q1 of '23. Is that the target?

非常好。最後一個問題是關於庫存的。我們是否應該假設庫存將在 23 年第一季度恢復到正常範圍？這就是目標嗎？

Well, as we define a new normal and we're growing our business, we will get back to normalized ranges for a stronger, bigger company.

好吧，當我們定義新常態並發展我們的業務時，我們將回到正常範圍，成為一家更強大、更大的公司。

Our next question comes from Christian Schwab with Craig-Hallum.

我們的下一個問題來自克里斯蒂安·施瓦布和克雷格·哈勒姆。

Just unfortunately, just unprecedented currency swings on such a short time frame that everyone is facing. But Charlie, your aggregate top line growth rate for the company on a go-forward basis, that hasn't changed, has it?

不幸的是，每個人都面臨著如此短的時間內前所未有的貨幣波動。但是查理，公司未來的總營收增長率並沒有改變，不是嗎？

It hasn't. In fact, the guidance that we provided for the year really was just haircut by the foreign exchange impacts that we anticipate for taking into consideration Q2 and the rest of the year. So if you back out the foreign exchange fluctuations, we didn't change our guidance for the year. All we did was incorporate what we believe to be the impacts of foreign exchange in the second half. Obviously, if that changes and it becomes favorable, then our ability to deliver on the higher end of the range is still there.

還沒有。事實上，我們為今年提供的指導實際上只是根據我們預計的考慮到第二季度和今年剩餘時間的外匯影響而進行了削減。因此，如果您排除外匯波動的影響，我們並沒有改變今年的指導。我們所做的只是將我們認為的下半年外匯影響納入考慮。顯然，如果這種情況發生變化並且變得有利，那麼我們提供高端產品的能力仍然存在。

I mean, we've got a range of $100 million to $110 million in Q3, and we continue to struggle because the majority of our backlog is still with customer request ship dates of as soon as possible. So I think if we can continue to unlock some of the backlog and access to subcomponents, we certainly have an opportunity to exceed that. And we need to do that, first and foremost, to just satisfy customer requirements and customer deployment schedules. So that's been our #1 priority. And I hope you guys appreciate that where we're being thoughtful in spending money and expedite, which is a frustrating situation for all of us. We're doing because we want to make sure that we're doing everything we can to keep customers happy.

我的意思是，我們在第三季度的收入範圍為 1 億至 1.1 億美元，但我們仍在苦苦掙扎，因為我們的大部分積壓訂單仍然是客戶要求盡快發貨的。所以我認為，如果我們能夠繼續解鎖一些積壓並訪問子組件，我們當然有機會超越這一點。我們需要這樣做，首先是為了滿足客戶的要求和客戶的部署計劃。所以這是我們的第一要務。我希望你們能夠理解我們在花錢和加快速度方面的考慮，這對我們所有人來說都是一個令人沮喪的情況。我們這樣做是因為我們希望確保盡一切努力讓客戶滿意。

Great. And then just on the commentary on inventory and increased raw materials and working capital, can you tell us why you would be putting on raw materials on your own balance sheet instead of your contract manufacturing partners securing that for you?

偉大的。然後，關於庫存以及增加的原材料和營運資金的評論，您能否告訴我們為什麼您將原材料放在自己的資產負債表上，而不是您的合同製造合作夥伴為您確保這一點？

Yes. So one of the things that is-- this is-- Nobody has asked me this question quite the way you did. I'm glad you asked it. Remember that when I got here 2 years ago, we didn't have one, but we had 2 manufacturing facilities. So we had one in Hanover, Germany, and we still have one in Tampa, Florida. So we're building-- today, we're vertically integrated with a portion of our business where we're manufacturing in Tampa. In Korea, we still buy and manage a lot of the semiconductors. And so a philosophy that the company had before I got here was to do everything we could to manage the cost and manage the accessibility of those chips and then provide those chips to the downstream CMs to build the product.

是的。所以，其中一件事是——沒有人像你那樣問我這個問題。我很高興你問了這個問題。請記住，當我兩年前來到這裡時，我們還沒有一個，但我們有 2 個製造工廠。我們在德國漢諾威有一個，在佛羅里達州坦帕也有一個。因此，今天我們正在與我們在坦帕製造的部分業務進行垂直整合。在韓國，我們仍然購買和管理大量半導體。因此，在我來到這里之前，該公司的理念是盡一切努力來管理成本並管理這些芯片的可訪問性，然後將這些芯片提供給下游 CM 來構建產品。

Now I will tell you that we have a very aggressive plan as we exit this year and into 2023 to consolidate our CMs, one, to be more meaningful with them, obviously, to lower our cost and to free up a ton of cash. And so there's a great opportunity and significant upside for us, we believe, in '23 as we execute our CM consolidation strategy that I'm not prepared to give you the details on today for obvious reasons, but I will share more details as we get closer to our final execution on that, which we believe has upside that's not baked into the outlook that we're providing today.

現在我要告訴你們，我們在今年退出並進入 2023 年時有一個非常積極的計劃，以鞏固我們的 CM，一是讓它們變得更有意義，顯然是為了降低我們的成本並釋放大量現金。因此，我們相信，在23 年，當我們執行CM 整合戰略時，我們將面臨巨大的機會和顯著的優勢，出於顯而易見的原因，我今天不准備向您提供詳細信息，但我將在我們執行CM 整合戰略時分享更多詳細信息。更接近我們對此的最終執行，我們相信這有好處，但沒有納入我們今天提供的前景中。

Yes, I would think that, that would be very wise, leading contract. Manufacturers have hundreds, if not thousands of people working on supply...

是的，我認為，這將是非常明智的領先合同。製造商有數百甚至數千人從事供應工作......

Well, we're not a manufacturing company. We are a technology company. And as we shift more and more of our emphasis towards software, obviously, software needs to reside on infrastructure. And so we're going to be in the access infrastructure business for a very, very long time. But as we're able to participate more in the intelligence side of the way these networks are being built, managed and orchestrated. There's a great opportunity there, but we don't want to be in the manufacturing business long term. To your point, there's large multibillion-dollar companies that should be doing that. And that means that they'll be buying, inventorying and managing the cash differently. And that, to me, frees up a lot of working capital for us in '23. And it certainly, we believe, will help our margins as well.

嗯，我們不是一家製造公司。我們是一家科技公司。隨著我們越來越多地將重點轉向軟件，顯然，軟件需要駐留在基礎設施上。因此，我們將在接入基礎設施業務中持續很長一段時間。但隨著我們能夠更多地參與這些網絡的構建、管理和編排方式的情報方面。那裡有一個很好的機會，但我們不想長期從事製造業務。就你的觀點而言，有數十億美元的大型公司應該這樣做。這意味著他們將以不同的方式購買、庫存和管理現金。對我來說，這為我們在 23 年釋放了大量的營運資金。我們相信，這當然也會提高我們的利潤。

Perfect. And then just one quick follow-up question on supply chain and expedited fees. The majority of all the networking chip companies have sent letters out. I don't know if you've received one. Talking about price increases that are going to begin to happen this fall and we'll certainly start on January 1. Is that a kind of incorporated I assume, into your outlook? And do you believe there'll be an opportunity to pass those costs on, again, with price increases at some point to take effect in '23?

完美的。然後是一個關於供應鍊和加急費用的快速後續問題。大多數網絡芯片公司已經發出了信件。不知道你有沒有收到。談論今年秋天將開始發生的價格上漲，我們肯定會從 1 月 1 日開始。我認為這是否已納入您的展望中？您是否認為在 23 年某個時候價格上漲將有機會再次轉嫁這些成本？

Yes. So the answer is, we, like everyone else, have been sort of communicated that there's an anticipated price increase coming. I would tell you, we haven't accepted that. And we certainly are in dialogue with the key downstream semiconductor companies who are speaking to those price increases. But yes, I mean, we have baked in our margin profile for the second half. There's nothing that is taking a hold in the second half right now. They're communicating, they're telegraphing that the prices would be effective January 1, assuming that they take hold. But the answer is, yes, I mean we're certainly taking the price increases under consideration.

是的。所以答案是，我們和其他人一樣，已經被告知預計價格將會上漲。我告訴你，我們還沒有接受這一點。我們當然正在與主要下游半導體公司進行對話，他們正在討論價格上漲的問題。但是，是的，我的意思是，我們已經調整了下半年的利潤率。現在下半場沒有任何事情可以阻止。他們正在溝通，他們正在電報說，如果價格有效的話，價格將於 1 月 1 日生效。但答案是，是的，我的意思是我們肯定會考慮價格上漲。

I think we've done a really good job of partnering with our end-user customers on the necessary price increases, but it becomes a very delicate process. And it's something that I'm not prepared to talk about in granular detail, but I will acknowledge that we did receive communication that there's potential price increases that are at least desired to be increased in January of '23.

我認為我們在與最終用戶客戶就必要的價格上漲進行合作方面做得非常好，但這成為一個非常微妙的過程。我不准備詳細討論這一點，但我承認我們確實收到了潛在的價格上漲的消息，至少希望在 23 年 1 月上漲。

Our next question comes from Tim Savageaux with Northland Capital Markets.

我們的下一個問題來自 Northland Capital Markets 的 Tim Savageaux。

A couple of questions on the demand side. And while you're seeing these FX headwinds, even on an organic basis, it looks like you're looking for a pretty good ramp in the second half from a revenue standpoint. I wonder if you could-- and I think you mentioned the backlog being significantly or at least reasonably biased towards Europe and North America. But as you look at that ramp in the second half, are there any kind of particular drivers that stand out? I assume you have good visibility based on backlog. Either in North America or Europe? And as you contemplate that, I guess, there's been a lot going on with one of your Tier 2 customers, consolidated communications. It looks like they're being pretty aggressive in terms of fiber and are going to get more so. Is that-- can something like that move the needle for you guys as you think about your business in North America?

關於需求方面的幾個問題。雖然你看到了這些外匯逆風，即使是在有機的基礎上，但從收入的角度來看，你似乎在下半年尋求相當好的增長。我想知道您是否可以 - 我認為您提到積壓工作明顯或至少合理地偏向歐洲和北美。但當你觀察下半場的坡道時，是否有任何特別突出的車手？我認為您根據積壓工作具有良好的可見性。是在北美還是歐洲？當您考慮這一點時，我猜您的一位 2 級客戶（整合通信）發生了很多事情。看起來他們在纖維方面相當激進，而且還會變得更加激進。當你們考慮自己在北美的業務時，這樣的事情能給你們帶來啟發嗎？

Yes. So we don't talk about it enough, but your points are very fair, Tim. 75% of our business is with 20 of the top 30 telecommunications service providers around the world. So we continue to drive a lot of new business and certainly, much of our backlog is tied to a lot of large what we would refer to as Tier 1 and Tier 2s. Consolidated at 2 million subscribers is sort of teetering on that Tier 3, Tier 2, but they're meaningful. I mean, they're a very significant customer for us. They're very, I think they're one of the best customers that we have just from a technology partnership perspective. They've been very loyal to our entire portfolio. And they also represent today a significant amount of our backlog that we intend to unlock in the second half of the year. So I think your comments are spot on.

是的。所以我們談論得還不夠，但你的觀點非常公平，蒂姆。我們 75% 的業務與全球 30 強電信服務提供商中的 20 家合作。因此，我們繼續推動大量新業務，當然，我們的大部分積壓訂單都與我們所說的一級和二級業務相關。合併後的 200 萬訂戶在第 3 層、第 2 層有點搖搖欲墜，但它們很有意義。我的意思是，他們對我們來說是非常重要的客戶。從技術合作夥伴的角度來看，我認為他們是我們最好的客戶之一。他們對我們的整個產品組合非常忠誠。今天，它們也代表了我們計劃在今年下半年釋放的大量積壓訂單。所以我認為你的評論是正確的。

Okay. And then maybe shifting back to that Tier 1 area of focus. I think you mentioned a win with a large European mobile operator. But I wonder if you could step back and review, and I think you made reference to this in your letter, the pipeline of opportunities that you're seeing develop, whether they're fixed or mobile, Huawei replacement and whether we can count that win that you mentioned as one of those and what the go-forward pipeline looks like for you guys?

好的。然後可能會轉移回第一級重點領域。我想你提到了與一家大型歐洲移動運營商的勝利。但我想知道你是否可以退後一步回顧一下，我想你在信中提到了這一點，你看到的機會的渠道，無論是固定的還是移動的，華為的替代品以及我們是否可以算在內你提到的勝利就是其中之一，你們的前進管道是什麼樣的？

Yes. I would say that the, I mean, we've got a very strong loyal run rate business in Korea and Japan. Pan Asia, which has been a very exciting new market for us. We've been investing in that particular region. It's a region that I think Dave mentioned India, but if you think about even Vietnam and Taiwan and Singapore and Australia. There's a lot of countries there that are aggressively capping and moving away from some of the Chinese suppliers. And we've got a large base there. We've got close to 100 engineers in Vietnam, in Hanoi. And so it's certainly giving us an opportunity to participate in expanding our sort of 2 pillars in Korea and Japan in that pan-Asia market.

是的。我想說的是，我們在韓國和日本擁有非常強大的忠誠度業務。汎亞洲，這對我們來說是一個非常令人興奮的新市場。我們一直在那個特定地區進行投資。我認為戴夫提到了印度，但如果你想想越南、台灣、新加坡和澳大利亞。那裡有很多國家正在積極限制並遠離一些中國供應商。我們在那裡有一個很大的基地。我們在越南河內擁有近 100 名工程師。因此，這無疑為我們提供了參與擴大我們在韓國和日本的汎亞洲市場兩大支柱的機會。

But what I would tell you the most exciting future opportunity for us is the pipeline that we have in North America and Europe. It's by far the most trial activity. I mean, we've moved from sort of that proposal phase to the proof of value to physical trials. And as we close out on the feature gaps and closing out on those trials, you're moving into that contract and then order and eventually deployment phase. So I'm cautiously optimistic that some of that activity will close in the second half of this year and convert into revenue opportunity for us in '23. It certainly has been a lot of our focus.

但我要告訴你的是，對我們來說最令人興奮的未來機會是我們在北美和歐洲擁有的管道。這是迄今為止最具試驗性的活動。我的意思是，我們已經從提案階段轉向了價值證明階段和物理試驗階段。當我們縮小功能差距並結束這些試驗時，您將進入合同、訂購和最終部署階段。因此，我謹慎樂觀地認為，其中一些活動將在今年下半年結束，並在 23 年轉化為我們的收入機會。這無疑是我們關注的焦點。

And if you look at the ASSIA customers, they're all Tier 1s that came over. I mean all-- I mean, virtually all of the 30 marquee operators that we talk about, for the most part, are Tier 1 operators, and they've given us a great opportunity to really invoke a cross-sell opportunity. I mean if you think about the Express product that sits between the OLT and the ONT and the Cloud Check that sits inside the home, I mean, it's very complementary to our OLTs, to our ONTs and our WiFi products. And we're in deep discussions already with a lot of those customers as to how we might be able to help them better manage their network and be able to participate in some of those broadband network projects that maybe historically we hadn't been involved in.

如果你看看 ASSIA 的客戶，他們都是過來的一級客戶。我的意思是，幾乎所有我們談論的 30 個大型運營商，大部分都是一級運營商，他們給了我們一個很好的機會來真正激發交叉銷售機會。我的意思是，如果您考慮位於 OLT 和 ONT 之間的 Express 產品以及位於家中的 Cloud Check，我的意思是，它與我們的 OLT、ONT 和 WiFi 產品非常互補。我們已經與許多這樣的客戶進行了深入討論，討論我們如何能夠幫助他們更好地管理他們的網絡，並能夠參與一些我們以前可能沒有參與過的寬帶網絡項目。 。

Great. And last question from me. Going back to the kind of fixed versus mobile broadband. And I certainly understand the drivers for the pause on the mobile side. What I wanted more color on was, obviously, you are strong in Asia. So what's kind of filling the gap there? I'm guessing that might be more fixed fiber-to-the-home business in Korea and elsewhere, but any more color on that would be appreciated.

偉大的。我的最後一個問題。回到固定寬帶與移動寬帶的對比。我當然理解移動端暫停的驅動因素。顯然，我想要更多色彩的是，你們在亞洲很強大。那麼用什麼來填補這個空白呢？我猜想這可能是韓國和其他地方更固定的光纖到戶業務，但如果能提供更多的信息，我們將不勝感激。

Yes. It's all fixed broadband that's filling the gap right now. I mean, obviously, Japan and SoftBank has historically been a 10% customer. Rakuten, mobile, their core network in Japan has historically been a 10% customer. With Rakuten Symphony being very successful out in the market deploying their IP and software into a lot of these third-party service provider networks.

是的。目前，固定寬帶正在填補這一空白。我的意思是，顯然，日本和軟銀歷來都是 10% 的客戶。樂天、移動、他們在日本的核心網絡歷來都是10%的客戶。 Rakuten Symphony 在市場上非常成功，將其 IP 和軟件部署到許多第三方服務提供商網絡中。

We are today, their exclusive front-haul gateway reference platform. And as they have success, we're seeing success. And one of the new mobile operators in Europe, which I had mentioned, which is pretty significant, we'll be utilizing our fronthaul gateway for their next-generation 5G rollout with Rakuten Symphony software. So we're seeing a pipeline mature there. We're excited about the evolution of the 5G and eventually 6G network with SoftBank, and I think we're in a very good position to participate in that as that rolls out in '23. And with our new optical transport platform, Sabre that will be rolled out, we think that's a huge opportunity for the company.

今天，我們是他們獨家的前程網關參考平台。當他們取得成功時，我們也看到了成功。我曾提到過，歐洲的新移動運營商之一非常重要，我們將利用我們的前傳網關通過 Rakuten Symphony 軟件推出下一代 5G。所以我們看到那裡的管道正在成熟。我們對軟銀 5G 以及最終 6G 網絡的發展感到興奮，我認為我們處於非常有利的位置，可以參與 23 年推出的網絡。隨著我們即將推出的新光傳輸平台 Sabre，我們認為這對公司來說是一個巨大的機會。

We're filling a pretty huge void. At the Investor Day, we sort of did a soft launch and shared some of the details at the Nashville Fiber Connect show, we actually demonstrated it. We had a lot of interest in that product. And with the middle mile optical transport funds that are now being deployed, we see that as something that could provide some upside with decent margins into '23 as well. So we're still very optimistic and are very aggressive on what we're doing on the mobile side. It's just, for us, we need Open RAN to continue to take hold, and we are seeing Open RAN gain a lot of momentum around the world. It is new. And for our analyst partners and for shareholders who are looking at DZS, I think everyone has to just appreciate the time line around Open RAN and as that mobile network becomes much more open, it allows for us to participate differently than historically where you've got closed mobile networks. But we are seeing a lot of activity. There's a lot of trials going on right now. It's just going to take some time to unlock a lot of that...

我們正在填補一個相當巨大的空白。在投資者日，我們進行了一次軟發布，並在納什維爾光纖連接展會上分享了一些細節，我們實際上進行了演示。我們對該產品很感興趣。隨著現在正在部署的中英里光傳輸基金，我們認為這也可以在 23 年提供一些上行空間和可觀的利潤。因此，我們仍然非常樂觀，並且對我們在移動端所做的事情非常積極。只是，對我們來說，我們需要 Open RAN 繼續佔據主導地位，而且我們看到 Open RAN 在全球範圍內獲得了巨大的發展勢頭。它是新的。對於我們的分析師合作夥伴和關注 DZS 的股東來說，我認為每個人都必須欣賞 Open RAN 的時間表，並且隨著移動網絡變得更加開放，它允許我們以不同於以往的方式參與關閉了移動網絡。但我們看到很多活動。現在正在進行很多試驗。只是需要一些時間來解鎖很多內容......

Our next question comes from Ryan Koch with Needham & Company.

我們的下一個問題來自 Needham & Company 的 Ryan Koch。

Most of mine have been answered, but I wanted to-- if I could ask about the gross margin outlook and the supply chain impacts there in a different way. What's changed in the last 60 days since you guided there, it sounds like several hundred basis points hit kind of for the rest of the year there. Is most of this freight that was already in inventory? Or is it new cost increases or maybe you're seeing more of a revenue mix shift toward APAC as you saw in the quarter?

我的大部分問題都已得到解答，但我想——是否可以以不同的方式詢問毛利率前景和供應鏈影響。自從您指導以來，過去 60 天發生了哪些變化，聽起來今年剩餘時間裡有幾百個基點。大部分貨物是否已經在庫存中？或者是新的成本增加，或者您可能看到更多的收入組合轉向亞太地區，正如您在本季度看到的那樣？

So Ryan, great question. So on the supply chain side, we've certainly seen some of the new cost increases come through, right? As we've moved through the year, we're seeing new cost increases more recently.

瑞安，這是個好問題。因此，在供應鏈方面，我們確實看到了一些新的成本增加，對吧？隨著這一年的過去，我們最近看到了新的成本增加。

And you got the FX piece that was the most significant piece, Ryan. I mean, as I sort of was saying earlier, I mean, just in Q2 alone, you have the Yen, it was weakened 12%. The Won that was weakened 6%, the Euro weakened, and that was more than 50% of our revenue in Q2. And so the regional mix associated with those currencies was a surprise. Obviously, we didn't see that coming into Q2.

Ryan，你得到了最重要的 FX 作品。我的意思是，正如我之前所說，僅在第二季度，日元就貶值了 12%。韓元貶值 6%，歐元貶值，占我們第二季度收入的 50% 以上。因此，與這些貨幣相關的區域組合令人驚訝。顯然，我們沒有看到第二季度出現這種情況。

Okay. Right. So the strength in APAC on fixed in APAC that we saw in 2Q, is that you don't expect that to necessarily continue into the second half and be much of a headwind to margins?

好的。正確的。那麼，我們在第二季度看到的亞太地區的強勁勢頭是否一定會持續到下半年，並對利潤率構成很大的阻力？

Well, we factored in what we have been educated by JPMorgan and other banks based on what they anticipate the foreign currency to fluctuate within Q3 and Q4. So we've done the best we can to hedge and to incorporate their outlook for what we have in backlog and what we expect to ship in Q3 and Q4 to the best that we can.

嗯，我們考慮了摩根大通和其他銀行根據他們對第三季度和第四季度外幣波動的預期而獲得的信息。因此，我們已盡最大努力對沖並納入他們對我們積壓訂單的展望以及我們預計在第三季度和第四季度交付的產品，盡我們所能。

And I'm currently showing no further questions at this time. This does conclude the first call. Thank you for participating. You may now disconnect.

目前我沒有提出任何進一步的問題。第一次通話就這樣結束了。感謝您的參與。您現在可以斷開連接。