DZS Inc (DZSI) 2023 Q1 法說會逐字稿

Hello, my name is John Louis. Welcome to the DZS Q1 2023 Earnings Conference Call. (Operator Instructions)

您好，我叫約翰路易斯。歡迎參加 DZS 2023 年第一季財報電話會議。 （操作員指令）

I will now turn the conference over to Mr. Ted Moreau, Head of Investor Relations.

現在，我將會議交給投資者關係主管 Ted Moreau 先生。

Thank you, John Louis, and welcome to the DZS First Quarter 2023 Earnings Conference Call. Joining me today to discuss our results are DZS President and CEO, Charlie Vogt; and CFO, Misty Kawecki. Chief Product Officer, Miguel Alonso, is also on the call to participate in the Q&A session.

謝謝您，約翰路易斯，歡迎參加 DZS 2023 年第一季財報電話會議。今天與我一起討論我們成果的有 DZS 總裁兼執行長 Charlie Vogt；和財務長 Misty Kawecki。首席產品長 Miguel Alonso 也出席了電話會議並參加問答環節。

After market close today, we published our first quarter earnings release along with an updated investor presentation, which will be referenced throughout today's earnings call, and you can follow along with Charlie and Misty's commentary. Our discussion today will contain forward-looking statements based on our current expectations regarding future events or the future financial performance of the company. These statements are subject to risks and uncertainties, 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, as well as being available on the Investor Relations section of our website.

今天收盤後，我們發布了第一季收益報告以及更新的投資者介紹，該報告將在今天的收益電話會議上參考，您可以關注 Charlie 和 Misty 的評論。我們今天的討論將包含基於我們對未來事件或公司未來財務表現的當前預期的前瞻性陳述。這些聲明受風險和不確定性的影響，實際事件或結果可能有重大差異。請參閱本公司向美國證券交易委員會提交的文件，包括其最新的 10-Q 和 10-K 報告，以及我們網站投資者關係部分提供的文件。

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 today's earnings press release. During the second quarter, we will be attending investor conferences hosted by Needham, B. Riley, Craig-Hallum, Cowen and Stifel. Additionally, this Wednesday, May 10th, we look forward to hosting investors and analysts at an exciting Investor Day that we have planned at our headquarters in Dallas.

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均基於非 GAAP 基礎確定。這些項目，連同相應的 GAAP 數據以及與 GAAP 的對賬，都包含在今天的收益新聞稿中。第二季度，我們將參加由 Needham、B. Riley、Craig-Hallum、Cowen 和 Stifel 主辦的投資者會議。此外，5 月 10 日星期三，我們期待在達拉斯總部舉辦的令人興奮的投資者日活動上接待投資者和分析師。

I will now turn the call over to Charlie.

現在我將電話轉給查理。

(technical difficulty)

（技術難度）

Ted, and welcome to our first quarter earnings call. As reflected in our first quarter 2023 operating results and despite a robust backdrop for smart, secure, and high-speed broadband solutions, certain customer deployments and certain customer inventory levels hindered our ability to maximize revenue at the high end of our revenue guidance. Beneath the headline numbers, we continue to make encouraging progress in positioning the company to benefit from what will be a favorable long-term secular growth trend. I'm referring to both revenue growth and improved gross margin expansion, which combined will deliver favorable financial results measured by earnings and cash flow.

泰德，歡迎參加我們的第一季財報電話會議。正如我們 2023 年第一季的經營業績所反映的那樣，儘管智慧、安全和高速寬頻解決方案有著強勁的背景，但某些客戶部署和某些客戶庫存水準阻礙了我們在收入預期高端實現收入最大化的能力。在總體數字之下，我們繼續取得令人鼓舞的進展，使公司受益於有利的長期成長趨勢。我指的是收入成長和毛利率擴大，兩者結合起來將帶來以收益和現金流衡量的有利財務結果。

Aside from our relentless focus on customers, revenue and margin growth have been our 2 primary areas of focus. As it relates to gross margins, we anticipate that 1Q 2023 will mark the low point for gross margin. Furthermore, we expect to deliver gross margin and earnings improvement throughout the balance of 2023 aligned with our backlog and anticipated in-year revenue conversion. While segments of the broadband market have been impacted by the current macroeconomic environment, slower-than-expected approvals and disbursements of government stimulus funds, as well as inventory management challenges, the secular demand drivers for broadband everywhere remains robust and unchanged. While we expect market trends to favorably benefit our revenue and margin growth outlook over the long term, the investments we are making in technology, our IT infrastructure, and with marquee service providers are designed to expand our reach, improve our revenue growth, and expand our margins in order to deliver meaningful improvement to earnings and cash flow.

除了堅持不懈地關注客戶之外，收入和利潤成長一直是我們關注的兩個主要領域。就毛利率而言，我們預計 2023 年第一季將是毛利率的最低點。此外，我們預計 2023 年全年的毛利率和利潤將有所提高，與我們的積壓訂單和預期的年內收入轉換保持一致。雖然寬頻市場的各個部分受到了當前宏觀經濟環境、政府刺激資金審批和撥付速度慢於預期以及庫存管理挑戰的影響，但世界各地寬頻的長期需求驅動因素依然強勁且沒有變化。雖然我們預計市場趨勢從長遠來看將有利於我們的收入和利潤成長前景，但我們在技術、IT 基礎設施和知名服務提供者方面進行的投資旨在擴大我們的覆蓋範圍、提高我們的收入成長和提高我們的利潤率，從而實現盈利和現金流的顯著改善。

Our recent design wins with tier 1 service providers and numerous category defining product launches are validation that our vision, strategy, and playbook are aligned with what service providers around the world are seeking to deploy. While it will take time for these design wins to translate into deployments and revenue, we believe our momentum ultimately translates into meaningful revenue growth and will validate our competitive position across the fiber-to-the-premises and mobile broadband markets. Our new products are differentiating and improving our competitive position within these 2 markets. With the introduction of our Saber 4400, we are creating a new access Optical EDGE category aligned with mid-mile transport which is being fueled by last-mile fiber and 5G broadband deployments. As we will share in more detail, we are accelerating in-year cost savings to deliver favorable impacts on earnings and cash flow during the second half of '23 and into 2024.

我們最近贏得了一級服務提供者的設計，並推出了眾多定義類別的產品，證明了我們的願景、策略和策略與世界各地的服務提供者正在尋求部署的內容相一致。雖然這些設計的勝利需要時間才能轉化為部署和收入，但我們相信我們的勢頭最終將轉化為有意義的收入成長，並將驗證我們在光纖到戶和行動寬頻市場的競爭地位。我們的新產品正在差異化並提高我們在這兩個市場中的競爭地位。隨著 Saber 4400 的推出，我們正在創建一個與中途傳輸一致的新型接入光纖 EDGE 類別，該類別由最後一英里光纖和 5G 寬頻部署推動。正如我們將更詳細地分享的那樣，我們正在加速年度成本節約，以對 2023 年下半年至 2024 年的收益和現金流產生有利影響。

During the first quarter, we delivered $91 million of revenue, 33% non-GAAP gross margin and a non-GAAP earnings per share loss of $0.06. While our revenue was at the low end of our $90 million to $100 million revenue guidance, revenue for the quarter represented an increase of 18% year over year and 23% on a constant currency basis. On a regional basis, Americas revenue increased 9%, EMEA was relatively flat, and our Asia region increased 32%. Within our Asia regional performance, our Pan Asian subregion, which includes India, increased 260% over the year.

第一季度，我們實現了 9,100 萬美元的營收、33% 的非公認會計準則毛利率以及 0.06 美元的非公認會計準則每股收益。雖然我們的營收處於 9,000 萬至 1 億美元收入預期的低端，但本季的營收年增 18%，以固定匯率計算成長了 23%。從地區來看，美洲地區營收成長了 9%，歐洲、中東和非洲地區營收相對持平，亞洲地區營收成長了 32%。在我們的亞洲區域業績中，包括印度在內的汎亞次區域年增了 260%。

On a product segment basis, our software and service revenue contributed approximately 13% of revenue, representing an increase of 148% year over year. Notably, for the first time in nearly 2 years, supply chain, sourcing, and component availability, as well as elevated supply chain costs did not significantly surprise or impact our results. While our 33% non-GAAP gross margin was within our guidance range, our adjusted EBITDA was a negative $4 million due to the timing of higher investment levels that were required to support and deliver on recent and forthcoming design wins.

以產品分部計算，我們的軟體及服務收入貢獻了約13%的收入，較去年同期成長148%。值得注意的是，近兩年來，供應鏈、採購和零件可用性以及供應鏈成本的上升首次沒有為我們的業績帶來顯著的意外或影響。雖然我們的 33% 非 GAAP 毛利率在我們的指導範圍內，但由於支持和實現最近和即將到來的設計勝利所需的更高投資水平的時機，我們的調整後 EBITDA 為負 400 萬美元。

Along with numerous other companies throughout our industry, we are increasingly confident that supply chain will continue to improve throughout the year and into 2024. Strategically, we remain laser focused on positioning the company to capture market share in the fiber-to-the-premise and mobile broadband market, ultimately improving on long-term earnings and cash flow sustainability.

與我們行業中的眾多其他公司一樣，我們越來越有信心，供應鏈將在今年全年以及 2024 年繼續改善。

With an expected improvement to gross margins, we expect favorable impact to our operating leverage and earnings. As mentioned earlier, we expect sequential improvements in gross margin every quarter throughout the year. Several factors underpin our confidence to deliver higher gross margins and improved earnings over the long term. Sales growth in North America and EMEA, growth with recurring software, higher margins associated with new product introductions and operational efficiencies aligned with third-party contract manufacturing partners. While many government broadband subsidy disbursements have been slower than expected to convert, the bulk of the disbursements remain ahead of us over the next several years. Our current pipeline, trial activity, and project visibility remain robust, and we believe the current deployment schedule, timing and inventory management-related challenges are transitory in nature.

隨著毛利率的預期改善，我們預計這將對我們的經營槓桿和收益產生有利影響。如前所述，我們預計全年每季的毛利率都會連續提高。有幾個因素增強了我們對長期實現更高毛利率和更高利潤的信心。北美、歐洲、中東和非洲地區的銷售成長、經常性軟體的成長、新產品推出帶來的更高利潤以及與第三方合約製造合作夥伴一致的營運效率。儘管許多政府寬頻補貼的支付速度比預期要慢，但大部分補貼仍將在未來幾年內支付完畢。我們目前的管道、試驗活動和專案可見性仍然強勁，我們相信目前的部署計劃、時間和庫存管理相關的挑戰本質上是暫時的。

As the fixed and mobile broadband markets adjust to post-COVID environments and supply chain challenges improve, we believe our competitive position with our differentiated infrastructure and software solutions will enable us to secure meaningful new design wins spanning the globe. Our new products and roadmap, which we will cover in more detail Wednesday during our Investor Day, include our recently announced Access Edge Velocity V6, our new Metro and Optical EDGE Saber 4400, our new mobile cell site router M4000, and our new Xtreme network and service automation and orchestration platform.

隨著固定和行動寬頻市場適應後疫情環境以及供應鏈挑戰的改善，我們相信，我們憑藉差異化的基礎設施和軟體解決方案所獲得的競爭地位將使我們能夠在全球範圍內獲得有意義的新設計勝利。我們將在周三的投資者日上更詳細地介紹我們的新產品和路線圖，其中包括我們最近發布的 Access Edge Velocity V6、新的 Metro 和 Optical EDGE Saber 4400、新的移動蜂窩站點路由器 M4000 以及新的 Xtreme 網路和服務自動化和編排平台。

We also expect these products, in aggregate, to have a favorable impact on our gross margins over time. While we remain focused on positioning the company to capture market share in what we anticipate being a robust 5- to 10-year fiber-to-the-premise and mobile broadband investment cycle, investors should appreciate that the past 2 years represented an unprecedented industry-wide set of challenges from component availability to cost increases to foreign exchange fluctuations and inclusive of our manufacturing transition and a global ERP conversion. As such, providing revenue, margins, and earnings guidance has been challenging. Looking forward, as the broader market dynamics stabilize and with manufacturing, transition, and IT systems integrations complete, we now have the scale and real-time visibility to forecast with better predictability.

我們也預計，這些產品總體上將隨著時間的推移對我們的毛利率產生有利影響。雖然我們仍然專注於讓公司在預計強勁的5至10年光纖到戶和行動寬頻投資週期中佔據市場份額，但投資者應該意識到，過去兩年代表了整個行業前所未有的挑戰，從零部件供應到成本上漲到外匯波動，還包括我們的製造業轉型和全球 ERP 轉換。因此，提供收入、利潤和盈利指導一直很有挑戰性。展望未來，隨著更廣泛的市場動態趨於穩定以及製造、轉型和 IT 系統整合的完成，我們現在擁有規模和即時可見性，可以進行更可預測的預測。

Our first quarter earnings shortfall was a result of revenue and gross margins converting at the lower end of our guidance range and slightly higher operating expenses. We ended March with $31 million in cash and with inventory lower at $70 million. Sequentially, our cash balance was lower by $7 million due to the timing of collections and inventory required with investments. Our accounts receivable of $141 million at the end of March provides for a favorable opportunity to improve our cash balance and working capital in the coming quarters.

我們第一季的獲利缺口是由於收入和毛利率處於我們預期範圍的低端以及營運費用略高。截至 3 月底，我們的現金餘額為 3,100 萬美元，庫存下降至 7,000 萬美元。由於收款時間和投資所需的庫存，我們的現金餘額連續減少了 700 萬美元。截至 3 月底，我們的應收帳款為 1.41 億美元，這為未來幾季改善我們的現金餘額和營運資金提供了有利機會。

First quarter bookings of $80 million was balanced between our Americas and EMEA region at 51% and Asia at 49% and reflects an expected rebalancing alignment with existing backlog, improved lead times, seasonality, and customer deployment schedules. While our pipeline, trial activity, and project visibility remains robust, our customers are shifting lead time delivery expectations from 12 to 15 months to an expected 3 to 6 months. While we expect Asia to continue to grow and led by South Korea's leadership position in 10-gigabit PON and 5G broadband, Vietnam and India are expected to grow at above-market growth rates. We further expect product evaluations and trials currently underway in the United States and Europe to convert to design wins and ultimately deliver favorable orders and revenue growth as well as gross margin expansion.

第一季的訂單量為 8,000 萬美元，其中美洲和歐洲、中東和非洲地區的訂單量為 51%，亞洲的訂單量為 49%，這反映了與現有積壓訂單、交貨時間縮短、季節性和客戶部署計劃的預期重新平衡。雖然我們的產品線、試驗活動和專案可見性仍然強勁，但我們的客戶正在將交付週期預期從 12 到 15 個月轉變為預計的 3 到 6 個月。我們預計亞洲將繼續成長，並在韓國在 10 千兆 PON 和 5G 寬頻領域的領導地位的帶動下，越南和印度預計將以高於市場的成長率成長。我們進一步預計，目前在美國和歐洲進行的產品評估和試驗將轉化為設計勝利，並最終帶來有利的訂單和收入成長以及毛利率擴大。

Of our $304 million of RPOs, we anticipate that we will convert $190 million to revenue this year. As a reminder, we have historically converted approximately 70% of our in-year revenue from orders booked during the same period. Compared to the previous 10 years, our backlog aligned with expected revenue is significantly higher, providing us with more visibility than in previous years. As we assess the remainder of 2023 and considering today's recessionary concerns, inventory levels with certain customers, and the timing of government stimulus disbursements, we're revising our full-year revenue outlook to approximately $400 million.

在我們的 3.04 億美元 RPO 中，我們預計今年將有 1.9 億美元轉化為收入。提醒一下，我們歷史上大約 70% 的年內收入都來自同一時期的訂單。與前十年相比，我們的積壓訂單與預期收入相比明顯更高，這為我們提供了比前幾年更高的透明度。在評估 2023 年剩餘時間時，並考慮到當今的經濟衰退擔憂、某些客戶的庫存水準以及政府刺激措施發放的時間，我們將全年收入預期修改為約 4 億美元。

As a result of the successful completion of numerous product, IT, and manufacturing work streams, we are accelerating approximately $12 million to $13 million of cost savings that we expect to realize this year. Our cost savings are anticipated to offset most of the adjustments to revenue, resulting in an adjusted EBITDA range of between 22 and $27 million. We expect to deliver significant adjusted EBITDA growth and positive operating cash flow during the second half of 2023, and we anticipate ending the year with approximately $40 million of cash and with our only debt consisting of our 5-year term note associated with our ASSIA software asset acquisition. Upside to our revenue and EBITDA guidance would come from government stimulus disbursements occurring sooner than anticipated, stabilizing of the financial markets, the timing of completing product trials currently underway, and the pace of adoption of our new product launches.

由於成功完成了眾多產品、IT 和製造工作流程，我們預計今年將實現約 1,200 萬至 1,300 萬美元的成本節約。我們的成本節約預計將抵消大部分收入調整，從而導致調整後的 EBITDA 範圍在 2,200 萬至 2,700 萬美元之間。我們預計在 2023 年下半年實現大幅調整後 EBITDA 成長和正經營現金流，並且我們預計今年年底的現金餘額約為 4,000 萬美元，我們唯一的債務是與我們的 ASSIA 軟體資產收購相關的 5 年期定期票據。我們的收入和 EBITDA 預期上升的因素包括政府刺激計劃的提前發放、金融市場的穩定、目前正在進行的產品試驗的完成時間以及我們新產品發布的採用速度。

Reinforcing our optimism, I recently returned from weeks of travel, visiting with numerous service provider executives across the United States and Europe and received resounding feedback that DZS remains well positioned and on track to secure new design wins that will further enhance our long-term growth outlook. While there is heightened enthusiasm regarding the fixed and mobile broadband investments countries around the world will be making over the coming years, we expect a similar amount of private equity investment and service providers self-funding of broadband buildouts. I am more and more convinced that service providers have the unwavering commitment to deploy fiber-to-the-home and 5G broadband services, architected and managed by software-defined networking tools and automation platforms.

為了增強我們的樂觀情緒，我最近結束了幾週的旅行，拜訪了美國和歐洲的眾多服務提供商高管，得到了響亮的反饋，即 DZS 仍然處於有利地位，並有望獲得新的設計勝利，這將進一步增強我們的長期增長前景。儘管未來幾年世界各國對固定和行動寬頻的投資熱情將高漲，但我們預期私募股權投資和服務供應商對寬頻建設的自籌資金數量將相似。我越來越相信，服務供應商堅定不移地致力於部署光纖到府和 5G 寬頻服務，並由軟體定義的網路工具和自動化平台進行架構和管理。

Service providers are embracing open platforms and implementing solutions at the network edge, and they are moving differentiated features closer to the subscriber to maximize performance, responsiveness, and personalization. The technology shift to the network edge are creating new opportunities for DZS and are fueled by the accelerating demands of emerging applications and the competitive need to deliver enhanced subscriber experiences. Service providers understand the stakes are high and that to retain and grow their market share, they need to invest and advance in their networks. [Appreciate] the countries such as the United Kingdom, Germany, Italy and India have deployed less than 15% fiber-to-the-home and are at various phases with their 5G broadband buildout, thus a significant investment over the next several years is expected.

服務供應商正在採用開放平台並在網路邊緣實施解決方案，並且他們將差異化功能移得更靠近用戶，以最大限度地提高效能、回應能力和個人化。科技向網路邊緣的轉變正在為 DZS 創造新的機遇，而新興應用的加速需求和提供增強用戶體驗的競爭需求也推動了這一轉變。服務提供者明白風險很高，為了維持和擴大市場份額，他們需要投資和改善網路。 [讚賞] 英國、德國、義大利和印度等國光纖到戶覆蓋率不足15%，且5G寬頻建設處於不同階段，因此預計未來幾年將有大量投資。

Our investments, acquisitions, and innovation executed over the past few years are being validated by service providers around the world and are aligned with the global market evolution towards hyper-fast, low latency broadband networks. Our investments are enabling DZS to differentiate itself and enable service providers to become experienced providers with a focus on agility, automation, security, and operational efficiency, resulting in market share gains, reduced customer churn, and ultimately, improving on customer satisfaction. We are currently active in many service provider trials with our access, optical, and cloud-connected software solutions, which we expect to evolve to production deployments during the second half of 2023 and into 2024. Not including our technology alignment with mobile operators, our current fixed wireline customers, including trials that are underway with new prospective service providers, represents approximately 300 million subscribers in aggregate.

我們在過去幾年進行的投資、收購和創新得到了世界各地服務提供商的認可，並與全球市場向超高速、低延遲寬頻網路的發展保持一致。我們的投資使 DZS 能夠脫穎而出，並使服務提供者成為專注於敏捷性、自動化、安全性和營運效率的經驗豐富的供應商，從而增加市場份額，減少客戶流失，並最終提高客戶滿意度。目前，我們正積極參與多家服務供應商的存取、光纖和雲端連接軟體解決方案試驗，預計這些解決方案將在 2023 年下半年至 2024 年投入生產部署。

Over the next several years, market research firms expect the cloud-connected software market over the next several years to grow at an 18% CAGR, the Optical EDGE market to grow at 10%, and the fiber-to-the-home market to grow at 19%. If these growth assumptions are correct and assuming a 10% to 12% blended growth rate across the markets we address, the data suggests that our core business can grow to approximately $500 million in revenue by 2025. Assuming we execute and expand our gross margins, and we moderate our operating expenses, we anticipate we can deliver adjusted EBITDA of between 40 and $50 million in 2024 and $60 million to $70 million in 2025 with upside achieved by gaining share aligned with our 5 stated growth pillars.

在未來幾年，市場研究公司預計雲端連接軟體市場在未來幾年的複合年增長率將達到 18%，光纖到戶市場將成長 10%，光纖到戶市場將成長 19%。如果這些成長假設正確，並且假設我們所針對的市場綜合成長率為 10% 至 12%，數據顯示我們的核心業務到 2025 年的收入可以成長到約 5 億美元。 假設我們執行並擴大我們的毛利率，並調整我們的營運費用，我們預計我們可以在 2024 年實現 4000 萬美元至 200 萬美元的調整美元的調整後 EBITDA，並透過獲得與我們所述的 5 個成長支柱一致的份額實現上升空間。

Our journey over the past 2.5 years has been an all-encompassing transformation of the business with our focus being innovation and customer alignment. As our recently announced customer wins validate, our innovation and differentiated access, optical, and cloud-connected software solutions are well positioned to secure additional marquee service provider wins during the second half of this year and into 2024.

過去兩年半以來，我們經歷了全方位的業務轉型，重點是創新和客戶協調。正如我們最近宣布的客戶勝利所驗證的，我們的創新和差異化接入、光學和雲端連接軟體解決方案預計將在今年下半年和 2024 年贏得更多大型服務提供商的勝利。

In closing, I would like to summarize the progress we are making with our 5 growth pillars, the first being the fiber broadband upgrade cycle, driven by the evolution to GPON and now XGS-PON that is currently underway. We expect this upgrade cycle to continue for at least the next 5 to 10 years with the investment and pace of deployment varying by country and the size and scale of the service provider. The second growth pillar is our ability to gain market share in North America and EMEA. Over the past 2 years, we have experienced a 44% compounded annual growth rate in North America and 10% in EMEA. We expect these 2 regions to experience favorable growth in 2024 and 2025 due to the traction and progress we are making with many superregionals and multinational service providers across these 2 regions.

最後，我想總結我們在五大成長支柱方面取得的進展，第一個是光纖寬頻升級週期，這得益於目前正在進行的向 GPON 和 XGS-PON 的演進。我們預計這一升級週期將持續至少未來5到10年，投資和部署速度因國家和服務提供者的規模而異。第二個成長支柱是我們在北美和歐洲、中東和非洲地區獲得市場份額的能力。在過去的兩年裡，我們在北美經歷了 44% 的複合年增長率，在 EMEA 經歷了 10% 的複合年增長率。我們預計，由於我們與這兩個地區的許多超級區域和跨國服務提供者的合作不斷推進並取得進展，這兩個地區將在 2024 年和 2025 年實現良好成長。

The third growth pillar relates to the security concerns, resulting in a deemphasizing of certain technology suppliers. We are very active with numerous service providers around the world and expect incremental design wins to be awarded over the next 12 months. Our fourth pillar is the opportunity to leverage our existing installed base of valuable customers to cross-sell. Our differentiated product portfolio enables service providers to design and deliver fixed and mobile broadband services based on category-defining open and standards-based solutions. Our fifth growth pillar, and maybe best described as a call option for investors, is Open RAN.

第三個成長支柱與安全問題有關，這導致某些技術供應商的重要性被削弱。我們與世界各地的眾多服務供應商保持著密切的合作，預計在未來 12 個月內將陸續獲得設計勝利。我們的第四大支柱是利用我們現有的寶貴客戶群進行交叉銷售的機會。我們差異化的產品組合使服務提供者能夠根據類別定義的開放和基於標準的解決方案設計和提供固定和行動寬頻服務。我們的第五個成長支柱（也許最好被描述為投資者的看漲期權）是 Open RAN。

While we have been instrumental in the technology and the evolution of O-RAN over the past several years, Open RAN is at a very early phase. We have been strategically aligned with Open RAN pioneers such as Rakuten Mobile, Rakuten Symphony, and other large-scale technology leaders. Multinational mobile operators, private and government sectors are keen to adopt and implement Open RAN due to the underlying benefits of opening the mobile network up to standards and broad scale interoperability.

雖然我們在過去幾年中一直在 O-RAN 技術和發展中發揮著重要作用，但 Open RAN 還處於非常早期的階段。我們與樂天移動、樂天 Symphony 等 Open RAN 先驅以及其他大型技術領導者建立了策略聯盟。跨國行動營運商、私營和政府部門熱衷於採用和實施 Open RAN，因為開放行動網路以實現標準和廣泛的互通性具有潛在的好處。

There are numerous benefits for mobile operators to transition to Open RAN, including increased technology choices, reducing their exposure to vendor lock-in, and certainly to lower network costs. We remain bullish and confident in our long-term growth and financial outlook. We will continue to balance our investments with market timing such that we can optimize our long-term growth objectives while achieving our near-term profitability objectives. As service providers continue to invest in the network edge, we believe we are well positioned to capitalize on the opportunity in front of us.

行動電信商過渡到 Open RAN 有許多好處，包括增加技術選擇、減少受供應商鎖定的風險，當然還可以降低網路成本。我們對我們的長期成長和財務前景保持樂觀和信心。我們將繼續平衡我們的投資和市場時機，以便在實現我們的近期獲利目標的同時優化我們的長期成長目標。隨著服務提供者繼續對網路優勢進行投資，我們相信我們已做好準備，充分利用擺在我們面前的機會。

During our upcoming Investor Day on Wednesday, we will provide insights regarding the fixed and mobile broadband market, a real-time status update with the various government stimulus programs around the world, and a more fulsome update regarding our product portfolio, trial activity, backlog, gross margin, and profitability targets. For those of you who are attending in person, I look forward to seeing you Wednesday at our headquarters facility in Plano, Texas.

在即將到來的投資者日期間，我們將提供有關固定和行動寬頻市場的見解、世界各地各種政府刺激計劃的即時狀態更新，以及有關我們的產品組合、試用活動、積壓、毛利率和盈利目標的更詳細的更新。對於那些親自出席的人，我期待週三在我們位於德克薩斯州普萊諾的總部見到你們。

With that, I'll turn the call over to you, Misty.

說完這些，我就把電話交給你了，米斯蒂。

Thank you, Charlie, and good afternoon, everyone. If you are following along in the investor deck, I will start on Slide 35. Q1 was a seasonal start to the year as service providers, particularly in the Asia region, finalized their capital spending budgets. We grew revenue 18% year-over-year and recognized an increased contribution from our software and services portfolio. We reported first quarter orders at $80 million, resulting in a book-to-bill ratio of 0.9 for the quarter, which was anticipated as order lead times are currently correcting from more than 52 weeks down into the low 20s. Order delivery dates are also being influenced by broader macroeconomic concerns and traditional seasonal ordering patterns in Asia for Q1.

謝謝你，查理，大家下午好。如果您正在關注投資者演示文稿，我將從第 35 張幻燈片開始。我們的營收年增了 18%，軟體和服務組合的貢獻也隨之增加。我們報告第一季的訂單量為 8000 萬美元，導致本季的訂單出貨比為 0.9，這是預料之中的，因為訂單交付週期目前正在從 52 週以上縮短至 20 多周。訂單交付日期也受到更廣泛的宏觀經濟問題和亞洲第一季傳統季節性訂購模式的影響。

While I will touch on this more later in my prepared remarks, it is against an uncertain macro backdrop that we are making the prudent decision to focus on operational efficiencies, cost savings, and cash flow for 2023 to ensure we're in an optimal position to navigate through broader economic uncertainty while continuing to strive toward market share capture and maximizing long-term shareholder value. To be clear, as Charlie indicated, we believe any potential disruptions will prove transitory given the early stage of the fiber access upgrade cycle, government broadband subsidy disbursements, and the geopolitical and vendor security replacement cycles.

我稍後會在準備好的發言中更多地談及這一點，但正是在不確定的宏觀背景下，我們做出了審慎的決定，將重點放在 2023 年的運營效率、成本節約和現金流上，以確保我們處於最佳位置，以應對更廣泛的經濟不確定性，同時繼續努力佔領市場份額並最大化長期股東價值。需要明確的是，正如查理所指出的，我們認為，考慮到光纖接入升級週期的早期階段、政府寬頻補貼發放以及地緣政治和供應商安全更換週期，任何潛在的中斷都將是暫時的。

We ended Q1 with $304 million in RPOs, an increase of 21% from $252 million a year ago. As a reminder, RPOs consist of backlog plus deferred software and services revenue, with the growth driven by a combination of strong order trends and the tight supply chain. Revenue for the first quarter of 2023 was $91 million, an increase of 18% year-over-year, or 23% on a constant currency basis. We drove year-over-year revenue growth in all geographic regions, led by the Asia region with 32% revenue growth to $47 million. Driving our growth in Asia, we have successfully gained traction selling into the Pan Asia market. One customer from the Asia geographic region represented just over 10% of total revenue for the quarter. Revenue from the Americas region increased 9% year-over-year to $25 million, reflecting our investment in sales and marketing efforts in the region. Revenue from EMEA increased 2% year-over-year to $19 million.

我們第一季的 RPO 金額為 3.04 億美元，較去年同期的 2.52 億美元成長 21%。提醒一下，RPO 由積壓訂單和遞延軟體和服務收入組成，其成長受到強勁的訂單趨勢和緊密的供應鏈共同推動。 2023 年第一季的營收為 9,100 萬美元，年增 18%，以固定匯率計算成長 23%。我們推動所有地理區域的營收年增，其中亞洲地區營收成長 32%，達到 4,700 萬美元。透過推動我們在亞洲的成長，我們成功地在汎亞市場獲得了銷售成長動力。來自亞洲地區的一位客戶貢獻了本季總收入的 10% 多一點。美洲地區的營收年增 9% 至 2,500 萬美元，反映了我們對該地區銷售和行銷工作的投入。歐洲、中東和非洲地區營收年增 2% 至 1,900 萬美元。

Turning to revenue by product technology. Our access networking infrastructure revenue increased 10% year-over-year to $79 million, or 87% of total revenue. Primarily the result of the ASSIA acquisition from May 2022, software and services revenue increased 148% year-over-year to $11 million or 13% of total revenue. While we are disappointed in our Q1 margin structure and its impact on short-term profitability, we are highly confident in our ability to drive several points of improvement in gross margin from the Q1 level throughout the balance of 2023, which we expect to further enhance in 2024.

按產品技術來看收入。我們的接取網路基礎設施營收年增 10%，達到 7,900 萬美元，佔總營收的 87%。主要是由於 2022 年 5 月收購了 ASSIA，軟體和服務收入年增 148% 至 1,100 萬美元，佔總收入的 13%。雖然我們對第一季的利潤率結構及其對短期盈利能力的影響感到失望，但我們對在 2023 年餘下時間內將毛利率在第一季度的基礎上提高幾個點充滿信心，我們預計 2024 年毛利率將進一步提高。

I will start by addressing the near-term challenges. Adverse moves in foreign currency and product mix resulted in Q1 adjusted gross margin of 33.3% compared with 35.2% in the year ago quarter. FX has been a recurring issue over the past year, primarily from converting revenue from our strongholds in Korea and Japan into U.S. dollars. We have implemented a hedging policy to mitigate any material risk stemming from changing foreign currency rates going forward. While an adverse product mix impacted our Q1 gross margin, we expect a favorable product mix trend throughout the balance of 2023 to drive gross margin improvement from the Q1 level. More specifically, during the first quarter, we recognized revenue on certain lower-margin projects that we had initially expected to ship during Q2. Simultaneously, the timing of certain higher-margin projects moved out of Q1 and are now expected to ship over the course of 2023. As a result, and based on our existing backlog, we have now delivered the majority of our low-margin backlog and believe Q1 gross margins will mark the low point for the year.

我將首先談談近期的挑戰。外匯和產品結構的不利變動導致第一季調整後毛利率為 33.3%，去年同期為 35.2%。外匯問題是過去一年反覆出現的問題，主要是將我們在韓國和日本的據點的收入轉換為美元。我們實施了對沖政策，以減輕未來外匯匯率變動帶來的任何重大風險。雖然不利的產品組合影響了我們第一季的毛利率，但我們預計 2023 年全年有利的產品組合趨勢將推動毛利率從第一季的水平提高。更具體地說，在第一季度，我們確認了某些利潤率較低的項目的收入，這些項目最初預計將在第二季度發貨。同時，某些利潤率較高的項目的時間安排已從第一季移出，預計將在 2023 年期間出貨。

Further contributing to our confidence in our ability to drive meaningful gross margin improvement throughout the balance of this year is the fact that while we incurred some logistics costs during Q1, we are seeing meaningful reduction in the adverse cost impact from foreign currency moves and elevated freight and supply chain costs, including expedite fees from 2022. To be clear, consistent with our prior expectation, we continue to expect these costs to further improve throughout 2023, contributing to an improved gross margin profile in the second half of this year.

進一步增強了我們對在今年餘下時間推動毛利率大幅提升能力的信心的是，雖然我們在第一季度產生了一些物流成本，但我們看到外匯波動以及運費和供應鏈成本上升（包括 2022 年的加急費）對成本的不利影響正在顯著減少。

A number of additional factors further enhance our confidence in our ability to drive improved second half margins. These include the benefits of the new Fabrinet manufacturing partnership, geographic mix shift towards North America and EMEA, and a product mix shift towards software and higher-margin products, including our category-defining V6 Access EDGE OLT and Saber 4400 Optical EDGE platform.

許多其他因素進一步增強了我們提高下半年利潤率的能力的信心。這些包括新的 Fabrinet 製造合作夥伴關係帶來的好處、向北美和歐洲、中東和非洲地區轉移的地理結構，以及向軟體和更高利潤產品轉移的產品結構，包括我們定義類別的 V6 Access EDGE OLT 和 Saber 4400 Optical EDGE 平台。

First quarter adjusted operating expenses were $34 million compared with $27 million in Q1 of 2022. The year-over-year increase reflects the acquired assets from ASSIA in addition to sales and marketing investments incurred over the past year. Our adjusted EBITDA was a loss of $4 million during Q1 of 2023 compared to a loss of $200,000 in Q1 2022, and our non-GAAP EPS was a loss of $0.06 compared to a loss of $0.01 in Q1 2022. The year-over-year decline was the result of lower gross margin combined with higher sales and marketing expense.

第一季調整後的營運費用為 3,400 萬美元，而 2022 年第一季為 2,700 萬美元。 2023 年第一季度，我們的調整後 EBITDA 虧損 400 萬美元，而 2022 年第一季虧損 20 萬美元，我們的非 GAAP EPS 虧損 0.06 美元，而 2022 年第一季虧損 0.01 美元。

Turning to the balance sheet. We ended the quarter with $31 million in cash. We had $12 million drawn on our revolving credit facility, along with the $24 million of debt as part of the 5-year term loan to fund the ASSIA acquisition. As a result of the lower-than-expected profitability levels in Q1, we received a waiver for our JPMorgan credit facility, which will be disclosed in our 10-Q filing this week. Days sales outstanding was 140 days in Q1 compared with 98 days in the year ago period.

轉向資產負債表。本季結束時，我們的現金餘額為 3,100 萬美元。我們從循環信貸中提取了 1,200 萬美元，另外還有 2,400 萬美元的債務作為 5 年期貸款的一部分，用於資助 ASSIA 收購。由於第一季的獲利水準低於預期，我們獲得了摩根大通信貸額度的豁免，這將在本週的 10-Q 文件中披露。第一季應收帳款週轉天數為 140 天，去年同期為 98 天。

While well above our target levels, we expect DSOs to significantly decline throughout the year with reversion to a more normal level below 100 days by year end. Underlying our confidence, current DSOs have been skewed by the timing of large customer milestone payments that are scheduled to accelerate in the coming months. Inventory increased by $3 million year-over-year to $70 million. [After] peaking in Q3 of 2022, inventory has now declined by $15 million due to the efficiencies associated with our recent manufacturing transition from Florida to Fabrinet. Annualized inventory turns were 3.2x during the first quarter, similar with year ago levels.

儘管遠高於我們的目標水平，但我們預計 DSO 將在全年大幅下降，到年底將恢復到 100 天以下的正常水平。令我們充滿信心的是，目前的 DSO 已經受到未來幾個月計劃加速的大客戶里程碑付款時間的影響。庫存年增 300 萬美元，達到 7,000 萬美元。在 2022 年第三季達到高峰之後，由於我們最近從佛羅裡達到 Fabrinet 的製造轉型帶來的效率提升，庫存現已下降了 1500 萬美元。第一季年化庫存週轉率為 3.2 倍，與去年同期水準相似。

Over the past several quarters, we have undertaken certain operational efficiency actions, such as the consolidation of ERP systems down to a single system and the transition of our Florida manufacturing to Fabrinet, which has now been completed and is contributing to an improved cost profile. Further operational cost improvements will come from the $12 million to $15 million of in-year cost savings that Charlie referenced.

在過去幾個季度中，我們採取了一些營運效率措施，例如將 ERP 系統合併為單一系統，以及將佛羅裡達製造業務過渡到 Fabrinet，這些措施目前已經完成，並有助於改善成本狀況。進一步的營運成本改善將來自於查理提到的 1200 萬到 1500 萬美元的年度成本節約。

Our Q2 guidance is as follows: revenue in the range of $90 million to $95 million. Based on projected ship dates of existing backlog, we believe Q2 revenue will be in the low point for the remainder of the year. Gross margin improving sequentially to a range of 33% to 35%, consistent with the margin profile of our existing backlog. During the second half of 2023, we anticipate further gross margin improvement aligned with our new product introductions and higher contribution of software revenue. Adjusted operating expenses between 29 and $31 million and adjusted EBITDA between a loss of $1 million and a positive $4 million.

我們對第二季的預期如下：營收在 9,000 萬美元至 9,500 萬美元之間。根據現有積壓訂單的預計出貨日期，我們認為第二季的營收將處於今年剩餘時間內的低點。毛利率連續提高至 33% 至 35% 之間，與我們現有積壓訂單的利潤率狀況一致。 2023 年下半年，隨著我們新產品的推出和軟體收入貢獻的增加，我們預計毛利率將進一步提高。調整後的營業費用在 2,900 萬美元至 3,100 萬美元之間，調整後的 EBITDA 在虧損 100 萬美元至正 400 萬美元之間。

Our updated full year outlook includes revenue of approximately $400 million, gross margin between 35% and 37%, exiting the year in the 38% to 39% range. Operating expense between 115 and $120 million and expecting sequential quarterly improvement throughout the year. Finally, adjusted EBITDA between 22 and $27 million. With the combination of our expected business performance and aforementioned cost saving actions, we expect our cash balances to improve to approximately $40 million with 0 balance drawn on our revolver at the end of the year, improving our liquidity during the year.

我們最新的全年預期包括營收約 4 億美元，毛利率在 35% 至 37% 之間，年底毛利率將在 38% 至 39% 之間。營業費用在 1.15 億至 1.2 億美元之間，預計全年各季度都會有所改善。最後，調整後的 EBITDA 在 2,200 萬至 2,700 萬美元之間。結合我們預期的業務表現和上述成本節約措施，我們預計我們的現金餘額將提高到約 4,000 萬美元，年底我們的循環信貸餘額為 0，從而提高我們全年的流動性。

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

我現在想將電話交給接線員，以方便問答環節。

(Operator Instructions) Your first question comes from the line of Tore Svanberg of Stifel.

（操作員指示）您的第一個問題來自 Stifel 的 Tore Svanberg。

Tore from Stifel here. Charlie, the 2023 outlook, roughly $400 million, so it's close to 10% lower than we had previously expected. Could you give us maybe perhaps a little more granular information on where exactly the roughly 10% is coming from by the various different segments or even geographies?

從 Stifel 撕下來的。查理，2023 年的預期大約是 4 億美元，所以比我們之前預期的低了近 10%。您能否向我們提供更詳細的信息，說明大約 10% 的份額究竟來自哪些不同的部分或地區？

Yes, it's really stemming from the timing of some of the new products that we announced and launched earlier in the year. So it's specifically the timing of the Saber 4400 and it's full launch availability as well as the V6. So from a product perspective, there's some weighting there just based on when the products will be fully available into the market. And as it relates to the regional side, I'd say that the other element that's pretty important is just where we're at, which investors and analysts should appreciate that trials -- the exit timing along with trials is not always within our control. And I'd say that some of the timing is based on when we think we're going to exit some of the trials that we started earlier in the year and the conversion rate on that.

是的，這確實源自於我們今年稍早宣布和推出的一些新產品的時機。因此，這具體是 Saber 4400 的推出時機以及它和 V6 的全面發布可用性。因此，從產品角度來看，根據產品何時全面進入市場，就會產生一些權重。就區域方面而言，我想說另一個非常重要的因素是我們所處的位置，投資者和分析師應該意識到，試驗——試驗的退出時機並不總是在我們的控制範圍內。我想說，時間安排取決於我們認為何時退出今年早些時候開始的一些試驗，以及試驗的轉換率。

Very good. And you mentioned lead times -- yes, go ahead, Charlie.

非常好。您提到了交貨時間——是的，繼續說吧，查理。

No, no, go ahead.

不不不，繼續說。

I was just going to ask about the lead times going from about 52 weeks to low-20s. Is low 20s where you think things will stabilize or could lead times go even lower, just given your new product mix, just wanted to get a sense for what's normalized lead time at this point.

我只是想問一下交貨時間是如何從大約 52 週縮短到 20 週出頭的。您認為在 20 多小時的低位，情況就會穩定下來，或者交貨時間可能會變得更短，只是考慮到您的新產品組合，只是想了解此時的正常交貨時間是多少。

Yes, I think there's still a slight disconnect with what customers are expecting and what the reality is. There's still some lingering supply chain challenges. I think that, overall, we feel a lot better with our ability to access subcomponents at the chip level and at the various raw material level. And it certainly has come way down. There's always going to be some challenges that you're going to have to navigate. But I do think that customers overall -- and again, we're 1 of many companies that I think were impeding and challenging customers over the last year to try to comply with what was a 52- to 70-week lead time. That was something I don't think any of us have ever seen ever. And so I think service providers are challenging us to get down into that 3 months from order to delivery. I don't think we're going to get to 3 months this year. I think we get somewhere between 3 and 6 months.

是的，我認為客戶的期望和現實之間仍然存在一些差距。一些供應鏈挑戰仍然存在。我認為，總體而言，我們對在晶片級和各種原材料級訪問子組件的能力感到更加滿意。而且它確實已經下降了。你總是會遇到一些需要你去克服的挑戰。但我確實認為，總體而言，我們是眾多公司之一，我認為這些公司在過去一年中一直在阻礙和挑戰客戶，試圖遵守 52 至 70 週的交貨時間。我想這是我們任何人都從未見過的事情。所以我認為服務提供者正在向我們提出挑戰，要求將從訂單到交付的時間縮短到 3 個月。我認為今年我們不會達到 3 個月。我認為我們需要 3 到 6 個月的時間。

And it really does vary depending on the product. Some products we're in that 3-month range right now. But there's other products because of the BOM structure, we still have some challenges that elongate things into that 3- to 6-month range. But I do expect that as we exit this year, as we go into 2024, we're going to be in a 3- to 4-month window. And again, that's still relatively consistent with where the industry has been over the last decade. We've been pretty consistent in being able to deliver products in the 8 to 12 weeks for a long, long time. I think that we'll get there at some point next year, unless there's some new anomaly that we got to deal with.

而且它確實會根據產品的不同而有所差異。目前，有些產品的銷售期正處於 3 個月的範圍內。但由於 BOM 結構的原因，還有其他產品，我們仍然面臨著將生產時間延長到 3 到 6 個月範圍內的一些挑戰。但我確實預計，當我們離開今年並進入 2024 年時，我們將處於 3 到 4 個月的窗口期。而且，這仍然與過去十年該行業的狀況相對一致。長期以來，我們一直能夠穩定地在 8 到 12 週內交付產品。我認為我們將在明年的某個時候到達那個目標，除非出現一些我們必須處理的新異常現象。

Your next question comes from the line of Christian Schwab of Craig-Hallum Capital Group.

您的下一個問題來自 Craig-Hallum Capital Group 的 Christian Schwab。

Charlie, on the new revised revenue and EBITDA outlook, as you look to '24 and '25, can you maintain operating expenses at this type of level? We're back to where we were running the business, call it, like maybe a $370 million run rate, and we're going to run it very lean here at $400 million as we move to attain the EBITDA expectations in '24, '25. How should we be thinking about OpEx?

查理，根據新修訂的收入和 EBITDA 前景，展望 24 年和 25 年，您能否將營運費用維持在這種水平？我們回到了經營業務的水平，比如說，大概是 3.7 億美元的營運率，我們將以 4 億美元的精簡規模運營，以實現 24、25 年的 EBITDA 預期。我們應該如何考慮營運支出 (OpEx)？

Yes. OpEx for us, and maybe we haven't articulated it extremely well, but we certainly did purposely accelerate sales and marketing over the last 18, 24 months to aggressively try to capture market -- new market opportunities for us in North America and EMEA. And I expect that we're going to continue to maintain a pretty significant cost structure associated with sales and marketing, where I think we've had some ability to capture some savings has been the transition to Fabrinet, okay? You had the entire cost structure associated with that from an operations and supply chain, which will be fully complete from a people standpoint, let's call it, by midyear.

是的。對我們來說，營運成本，也許我們沒有很好地表達出來，但在過去 18 到 24 個月裡，我們確實有意加快了銷售和行銷，積極嘗試佔領市場——在北美和歐洲、中東和非洲地區為我們創造新的市場機會。我預計，我們將繼續保持與銷售和行銷相關的相當重要的成本結構，我認為，透過向 Fabrinet 過渡，我們有能力實現一些節約，好嗎？您已經擁有與此相關的整個營運和供應鏈成本結構，從人員的角度來看，到年中它將完全完成。

And then we invested heavily over the last 2.5 years to get a lot of the new Velocity portfolio out the door, the new Metro and Optical EDGE portfolio out the door. We added more resources on the software side. And where we're at in the timing of some of those products, we think is a pretty significant contributor to some of the savings this year. We think that if you just take into the context of what I referred to, if we can pace ourselves to call it that $110 million revenue in 2024 and we can maintain a slightly higher operational cost structure with margins that we've been profiling, you can see that you're easily in that $10 million to $15 million a quarter EBITDA range. Now we've got to execute on that. But it's certainly the projects, the visibility, and what we're profiling ourselves certainly lends itself to that modeling.

然後，我們在過去 2.5 年裡投入了大量資金，推出了許多新的 Velocity 產品組合、新的 Metro 和 Optical EDGE 產品組合。我們在軟體方面增加了更多資源。我們認為，就某些產品的上市時間而言，這對今年的部分節餘貢獻相當顯著。我們認為，如果您只考慮我所提到的背景，如果我們能夠將 2024 年的收入定為 1.1 億美元，並且我們能夠維持略高的營運成本結構和我們一直在描述的利潤率，您會發現，您的季度 EBITDA 很容易達到 1000 萬至 1500 萬美元的範圍。現在我們必須執行這一目標。但可以肯定的是，項目、可見性以及我們自己的描述肯定有助於建立這種模型。

Okay. Okay. That's fabulous. And then just my last question is, as it relates to gross margins, given it seems like a lot of the heavy lifting has been done and the new products are coming to market, hopefully, harvested in a more efficient way through Fabrinet that may have been done in the past. Are you still hopeful that this -- at what point do you think we return or can get to it, I should say, a sustainable 40%-plus gross margin business?

好的。好的。太棒了。我的最後一個問題是，由於它與毛利率有關，鑑於似乎已經完成了很多繁重的工作並且新產品即將進入市場，希望能夠通過 Fabrinet 以過去可能已經完成的方式以更有效的方式收穫。您是否仍對此抱持希望—您認為何時我們能夠恢復或達到可持續的 40% 以上的毛利率業務？

Well, it's clearly tied to the margin drivers we've been talking about for the last 18 months. If you look at our margin profile today with North America and EMEA, it's well north of 40% gross margin. So the more business that we can secure in North America, and certainly, if we can secure higher-margin meaningful business in EMEA, that will certainly be a contributor. We've only implemented Phase 1 of our third-party contract manufacturing strategy. So if we're able to implement the second phase of that, let's say, the second half of this year, that will certainly be an additive contributor.

嗯，這顯然與我們過去 18 個月一直在談論的利潤驅動因素有關。如果您查看我們今天的北美和歐洲、中東和非洲地區的利潤狀況，您會發現毛利率遠高於 40%。因此，我們在北美能夠獲得的業務越多，當然，如果我們能夠在歐洲、中東和非洲地區獲得利潤更高的有意義的業務，這肯定會有所貢獻。我們僅實施了第三方合約製造策略的第一階段。因此，如果我們能夠實施第二階段，比方說在今年下半年，這肯定會成為一個附加貢獻者。

And we, frankly, have not executed as quickly as we thought on our ability to increase prices on the software side. If you remember, 1 of the goals that we had a year ago was to begin to increase prices into the market for some of the previously-priced ASSIA software. We are making some progress. It's a competitive market where we're having some success is where we can bundle our OLT and optical solutions with our Xtreme software orchestration and automation, and where we can do the same with our CPE products on the Expresse and CloudCheck side. And then we haven't, frankly, come anywhere close to where we think the cross-selling capabilities are across the portfolio, including leveraging the software.

坦白說，我們在軟體方面提高價格的能力並沒有像我們想像的那麼快。如果你還記得的話，我們一年前的目標之一就是開始提高一些先前定價的 ASSIA 軟體的市場價格。我們正在取得一些進展。這是一個競爭激烈的市場，我們取得了一些成功，我們可以將我們的 OLT 和光學解決方案與我們的 Xtreme 軟體編排和自動化捆綁在一起，並且我們可以在 Expresse 和 CloudCheck 方面對我們的 CPE 產品做同樣的事情。坦白說，我們還沒有達到我們認為的整個產品組合的交叉銷售能力的水平，包括利用軟體。

So when you factor in the regional mix with the new product introductions, which all have a higher-margin profile to them, the transition to third-party manufacturing, and more software and services content, that's how you get there. And assuming that we don't break any of those pillars, there's no reason why we can't maintain a 40% gross margin model. I don't know, Misty, if you want to comment on that, but.

因此，當你將區域組合與新產品的推出考慮在內時，這些產品都具有更高的利潤率、向第三方製造的過渡以及更多的軟體和服務內容，這就是你實現這一目標的方法。並且假設我們不破壞任何支柱，我們就沒有理由無法維持 40% 的毛利率模型。我不知道，米斯蒂，如果你想對此發表評論，但是。

No, I think there's several contributing factors and several actions that we can continue to drive and execute on. You mentioned several of them between pricing, software, expansion, the Fabrinet transition, and expanding that across the globe, as well as just the product margins of our new product introductions.

不，我認為有幾個因素以及我們可以繼續推動和執行的幾項行動。您提到了其中的幾個方面，包括定價、軟體、擴展、Fabrinet 轉型及其在全球範圍內的擴展，以及我們新產品推出的產品利潤率。

Your next question comes from the line of Tore Svanberg of Stifel.

您的下一個問題來自 Stifel 公司的 Tore Svanberg。

Yes, I just had a couple of follow-ups. The first 1 is -- and thanks for giving us that gross margin bridge chart. That was really helpful on Page 38 in the presentation. But I was hoping maybe you could give us a similar bridge for your DSOs. Any more details you could share with us, given the steep increase and how you expect it to dip below 100 again by the end of the year?

是的，我剛剛進行了一些後續行動。第一個是--感謝您提供毛利率橋樑圖給我們。簡報第 38 頁的內容確實很有幫助。但我希望您能為您的 DSO 提供類似的橋樑。考慮到如此大幅的成長，以及您預計到今年年底它將如何再次跌破 100，您能與我們分享更多細節嗎？

Sure. I don't have the exact bridge in front of me that I can conceptually describe some of the improvements we plan to be making to our collections. We have about $22 million still sitting with certain contracts in Vietnam that have milestone payments. And I think we've mentioned on prior calls, but in case we've lost visibility, we had milestones that were to be paid over 12 to 18 months associated to those contracts. So we entered into those ranging between Q2 and Q3 of 2022 and expect those to be fully collected by the beginning of Q4 2023.

當然。我面前並沒有確切的橋樑來讓我能夠概念性地描述我們計劃對我們的收藏所做的一些改進。我們仍有約 2,200 萬美元的款項用於越南的某些合約的分期付款。我想我們在之前的電話會議中提到過，但為了防止我們失去透明度，我們有與這些合約相關的 12 到 18 個月內要支付的里程碑款項。因此，我們輸入了 2022 年第二季至第三季之間的數據，並預計到 2023 年第四季初將完全收集這些數據。

So that is one of the things that has been dragging down our DSOs. We've seen that over the last couple of quarters. We've also seen some improvements with the ASSIA acquisition, where we initially had some sluggishness between billings and collections just due to natural integration. We've seen good progress on getting those cleaned up and cash conversion specific to the ASSIA contracts. Last but not least, we had some timing of billings in Q1 due to our ERP implementation. We had billings that happened much later in the end of the quarter than we typically have. And so collections and the working capital variation within the quarter was a bit more extreme at the end of the quarter, and we expect to recover from that in the next 1 to 2 quarters.

這是拖累我們 DSO 的因素之一。過去幾個季度我們已經看到了這一點。我們也看到了收購 ASSIA 帶來的一些改善，最初，由於自然整合，我們在帳單和收款之間出現了一些遲緩。我們看到，在清理和針對 ASSIA 合約的現金轉換方面取得了良好進展。最後但同樣重要的一點是，由於我們實施了 ERP，我們在第一季有一些計費時間表。我們的帳單在季度末的支付時間比通常要晚得多。因此，季度末的收款和營運資本變化稍微極端一些，我們預計未來 1 到 2 個季度內將會恢復。

No, that's great detail. And Charlie, 1 more for you. You introduced the Xtreme transport software, and back to the topic of cross-selling, I was just hoping if you could talk a little bit more about how that helps the Saber 4400, especially from a timing perspective. Is this something that is expected to really boost the design wins from a timing perspective? Any color you can share with us would be helpful.

不，細節很精彩。查理，再給你 1 個。您介紹了 Xtreme 傳輸軟體，回到交叉銷售的話題，我只是希望您能再多談談它如何幫助 Saber 4400，特別是從時間角度來看。從時間角度來看，這是否真的能提高設計的成功率？您能與我們分享的任何顏色都會有所幫助。

They're certainly not directly connected, but there is synergy across the OLT and Metro and Optical EDGE portfolio with the Xtreme software portfolio. The concept that we have with Xtreme, which there is a mobile component that we're deploying today with 5G core as well as network slicing applications. That was something that was launched soon after we acquired RIFT. What we have spent the last year on, especially knowing where the emphasis was going to be with a lot of fiber deployments, was to take the same orchestration and automation and service delivery tools that we were implementing on the 5G network to be able to implement it across a much, much larger fiber deployment network for us. And so that's what we announced in, call it, the January, February timeframe. We're going to trials with that with several customers in the coming months. And there is strategic linkage clearly with the OLT portfolio as well as with the Saber 4400 as it relates to how those products will be managed, but they're not dependent on one another.

它們當然不是直接相連的，但是 OLT 和 Metro 以及 Optical EDGE 產品組合與 Xtreme 軟體產品組合之間存在協同作用。 Xtreme 的概念是，我們今天正在使用 5G 核心和網路切片應用程式部署行動元件。這是我們收購 RIFT 後不久推出的產品。我們去年所花的時間，特別是了解大量光纖部署的重點，就是採用在 5G 網路上實施的相同編排、自動化和服務交付工具，以便能夠在更大的光纖部署網路上實施它。這就是我們在一月、二月期間宣布的內容。我們將在接下來的幾個月內與多位客戶進行試驗。顯然，OLT 產品組合與 Saber 4400 之間存在著策略聯繫，這涉及到這些產品的管理方式，但它們並不相互依賴。

So I want to circle back really quickly on the cost reductions, not exactly a smooth segue, but I just wanted to make sure I was very clear on my comments that I was consistent that our cost reductions are $12 million to $13 million in year. So I just want to make sure that everyone got that in case I missed it.

因此，我想快速回顧一下成本削減問題，雖然這不是一個順利的過渡，但我只是想確保我的評論非常清楚，我一直堅持認為我們的成本削減目標是每年 1200 萬至 1300 萬美元。所以我只是想確保每個人都了解這一點，以防我錯過。

Your next question comes from the line of Ryan Koontz of Needham.

您的下一個問題來自尼德姆的瑞安·孔茨 (Ryan Koontz)。

I want to ask about RFP activity, specifically in Europe and what you're seeing there and at a high level, where are you progressing in terms of the various stages of RFPs? And what's the activity like these days? And how do you think about the European market opportunity in '24?

我想問 RFP 活動，特別是在歐洲，以及您在那裡看到的情況，從高層次來看，就 RFP 的各個階段而言，你們取得了哪些進展？最近活動怎麼樣？您如何看待2024年的歐洲市場機會？

I actually think it's a great question because we've actually seen the RFP activity kind of pivot. There was a heavy dose of RFPs and RFIs over the last 12 to 18 months for at least us. We've transitioned from the RFI and RFP phase to those service providers where they're actually testing and trialing our product. Obviously, at some point, there's a formal selection process. But I will say, Ryan, that across the globe, we're more aligned and focused on the initiatives that we started 12 or 18 months ago and out of this tactical proposal and RFP phase and into more of the product testing, trial, and feature compliance phase with the expectation that once we exit that phase, we'll enter -- we'll be entering contract negotiation phases.

我真的認為這是一個很好的問題，因為我們實際上已經看到了 RFP 活動的轉變。至少對我們來說，在過去的 12 到 18 個月裡收到了大量的 RFP 和 RFI。我們已經從 RFI 和 RFP 階段過渡到服務提供者實際測試和試用我們的產品。顯然，在某個時候，會有一個正式的選擇過程。但我要說的是，瑞安，在全球範圍內，我們更加一致並專注於我們 12 或 18 個月前啟動的計劃，並且已經走出戰術提案和 RFP 階段，進入更多的產品測試、試用和功能合規階段，預期一旦我們退出該階段，我們將進入——我們將進入合約談判階段。

There are no further questions at this time. This concludes today's conference call. You may now disconnect.

目前沒有其他問題。今天的電話會議到此結束。您現在可以斷開連線。