Fabrinet (FN) 2024 Q3 法說會逐字稿

Good afternoon. Welcome to Fabrinet's Financial Results Conference Call for the Third Quarter of Fiscal Year 2024. (Operator Instructions) As a reminder, today's call is being recorded.

午安.歡迎參加 Fabrinet 2024 財年第三季財務業績電話會議。

I would now like to turn the call over to your host, Garo Toomajanian, VP of Investor Relations. You may begin.

現在我想將電話轉給主持人投資者關係副總裁 Garo Toomajanian。你可以開始了。

Thank you, operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss Fabrinet's financial and operating results for the third quarter of fiscal year 2024, which ended March 29, 2024.

謝謝接線員，大家下午好。感謝您參加今天的電話會議，討論 Fabrinet 截至 2024 年 3 月 29 日的 2024 財年第三季度的財務和營運業績。

With me on the call today are Seamus Grady, Chief Executive Officer; and Csaba Sverha, Chief Financial Officer. This call is being webcast, and a replay will be available on the Investors section of our website located at investor.fabrinet.com.

今天與我一起參加電話會議的是執行長 Seamus Grady；和財務長 Csaba Sverha。本次電話會議正在進行網路直播，我們網站的投資者部分將提供重播，網址為investor.fabrinet.com。

During this call, we will present both GAAP and non-GAAP financial measures. Please refer to the Investors section of our website for important information, including our earnings press release and investor presentation, which include our GAAP to non-GAAP reconciliation, as well as additional details of our revenue breakdown.

在本次電話會議中，我們將介紹 GAAP 和非 GAAP 財務指標。請參閱我們網站的投資者部分，以了解重要訊息，包括我們的收益新聞稿和投資者介紹，其中包括我們的 GAAP 與非 GAAP 調節表，以及我們收入明細的其他詳細資訊。

In addition, today's discussion will contain forward-looking statements about the future financial performance of the company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. These statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise them in light of new information or future events, except as required by law.

此外，今天的討論將包含有關公司未來財務表現的前瞻性陳述。前瞻性陳述受到風險和不確定性的影響，可能導致實際結果與管理階層目前的預期有重大差異。這些陳述僅反映我們截至本簡報發布之日的觀點，我們不承擔根據新資訊或未來事件對其進行修改的義務，除非法律要求。

For a description of the risk factors that may affect our results, please refer to our recent SEC filings, in particular, the section captioned Risk Factors in our Form 10-Q, filed on February 6, 2024. We will begin the call with remarks from Seamus and Csaba, followed by time for questions.

有關可能影響我們結果的風險因素的描述，請參閱我們最近向SEC 提交的文件，特別是2024 年2 月6 日提交的10-Q 表格中標題為「風險因素」的部分。開始時發表評論由 Seamus 和 Csaba 發言，然後是提問時間。

I would now like to turn the call over to Fabrinet's CEO, Seamus Grady, Seamus?

我現在想將電話轉給 Fabrinet 的執行長 Seamus Grady，Seamus？

Thank you, Garo. Good afternoon to those of you joining our call today. We are very pleased with our third quarter results that included revenue and EPS that were above the high end of our guidance ranges. Revenue was a record $731.5 million and non-GAAP net income was also a record result of $2.39 per share.

謝謝你，加羅。今天參加我們電話會議的各位下午好。我們對第三季的業績非常滿意，其中收入和每股盈餘均高於我們指導範圍的高端。營收達到創紀錄的 7.315 億美元，非 GAAP 淨利潤也達到創紀錄的每股 2.39 美元。

The quarter played out better than anticipated, with sequential revenue growth in optical communications from both datacom and telecom accompanied by a small decline in non-optical communications, mainly from automotive revenue. Within optical communications, datacom revenue again outpaced telecom, with datacom revenue growing 150% from a year ago. Datacom continues to benefit from demand for 800-gig technology for AI applications, and we remain very optimistic about our position in that market.

該季度的表現優於預期，來自數據通訊和電信的光通訊收入連續成長，同時非光通訊（主要來自汽車收入）小幅下降。在光通訊領域，數據通訊收入再次超過電信，數據通訊收入較去年同期成長 150%。 Datacom 繼續受益於人工智慧應用對 800G 技術的需求，我們對我們在該市場的地位仍然非常樂觀。

After several quarters of declines, telecom revenue saw sequential growth in Q3. However, it's important to point out that this growth was driven primarily from data center interconnect products that more than offset continued sequential declines from traditional telecom (technical difficulty). We expect to see [continued choppiness] in telecom revenue as our customers and (technical difficulty) continue to work down elevated inventory levels.

經過幾季的下降後，第三季電信收入較上季成長。然而，必須指出的是，這種成長主要是由資料中心互連產品推動的，這些產品足以抵消傳統電信（技術難度）持續下降的影響。我們預計，隨著我們的客戶和（技術困難）繼續降低高庫存水平，電信收入將繼續波動。

Turning to non-optical communications, we saw a small sequential revenue decline. This was primarily due to near-term inventory digestion for certain automotive products in the quarter. Consistent with our comments last quarter, we are optimistic that automotive revenue will increase sequentially in the fourth quarter. Industrial laser revenue remained stable in the third quarter.

轉向非光通信，我們看到收入環比小幅下降。這主要是由於本季度某些汽車產品的近期庫存消化所致。與我們上季度的評論一致，我們對第四季度汽車收入將環比增長持樂觀態度。第三季工業雷射收入維持穩定。

Looking to the fourth quarter, we are well positioned to end our fiscal year on a high note with another strong performance. High data rate datacom products continue to be an important driver of our business momentum, and we are confident we can deliver another quarter of accelerating year-over-year revenue growth in Q4. With this momentum, fiscal 2024 will represent another year of record revenue for the company, with EPS again growing faster than revenue.

展望第四季度，我們已做好充分準備，以再次強勁的業績，高調結束本財年。高數據速率數據通訊產品仍然是我們業務發展勢頭的重要驅動力，我們有信心在第四季度實現另一個季度收入同比加速成長。憑藉這一勢頭，2024 財年將是該公司營收再創新高的一年，每股收益的成長速度再次快於營收的成長。

In summary, we delivered a record third quarter with revenue and EPS that were above our guidance ranges. We're looking forward to a very solid finish to an outstanding year for our company, and we are optimistic about what lies ahead as we further extend our leadership in the market.

總而言之，我們第三季的營收和每股盈餘創下了歷史新高，高於我們的指引範圍。我們期待著公司能夠以堅實的業績結束這一出色的一年，並且隨著我們進一步擴大我們在市場上的領導地位，我們對未來的前景感到樂觀。

Now, I'll turn the call over to Csaba for more financial details on our third quarter and our guidance for the fourth quarter. Csaba?

現在，我將把電話轉給 Csaba，以了解有關我們第三季度的更多財務細節和第四季度的指導。恰巴？

Thank you, Seamus, and good afternoon, everyone. We had a strong third quarter. Revenue was above our guidance range at a record $731.5 million, up 10% from a year ago and up 3% from the second quarter. We drove non-GAAP earnings per share of $2.39, which was also a new quarterly record and above our guidance range. Foreign exchange revaluation gain of $0.09 per share contributed to our strong earnings per share, but non-GAAP EPS will still have been well above our guidance even without this tailwind. Details of our revenue breakdown are included in the investor presentation on our website, and I will focus my comments on the more notable metrics.

謝謝你，Seamus，大家下午好。我們的第三季表現強勁。營收達到創紀錄的 7.315 億美元，高於我們的指導範圍，比去年同期成長 10%，比第二季成長 3%。我們推動非 GAAP 每股收益達到 2.39 美元，這也是新的季度記錄，高於我們的指導範圍。每股 0.09 美元的外匯重估收益為我們強勁的每股收益做出了貢獻，但即使沒有這種推動力，非 GAAP 每股收益仍將遠高於我們的指導。我們網站上的投資者介紹中包含了我們收入細分的詳細信息，我將集中評論更值得注意的指標。

Optical communications revenue was $591.4 million, representing 81% of total revenue, an increase of 18% from a year ago and 4% sequentially. Datacom revenue was $305.5 million or 52% of optical communications revenue, an increase of 150% from a year ago and 6% from the prior quarter. This growth came primarily from high data rate products for AI applications, which continue to see strong demand.

光通訊收入為5.914億美元，佔總營收的81%，年增18%，季增4%。數據通訊收入為 3.055 億美元，佔光通訊收入的 52%，年增 150%，季增 6%。這項成長主要來自人工智慧應用的高數據速率產品，這些產品的需求持續強勁。

Telecom revenue was $286 million, or 48% of optical communications revenue. Telecom revenue declined 25% from a year ago but increased 2% from Q2 as data center interconnect growth more than offset continued decline from traditional telecom products.

電信收入為 2.86 億美元，佔光通訊收入的 48%。電信收入較去年同期下降 25%，但較第二季成長 2%，原因是資料中心互連的成長足以抵銷傳統電信產品的持續下滑。

By data rate, products rated 400-gig and faster continued to dominate growth, increasing to $426.3 million in Q3, up 93% from a year ago and 13% from the second quarter. Products rated at 100 gig continued to see revenue declines and were below 10% of optical communications revenue in the quarter. As anticipated, we saw a decline in non-optical communications revenue, which was $140.1 million, down 3% from Q2.

以數據速率計算，400G 及更快的產品持續主導成長，第三季增至 4.263 億美元，比去年同期成長 93%，比第二季成長 13%。額定功率為 100 GB 的產品收入持續下降，本季低於光通訊收入的 10%。如預期，我們看到非光通訊收入下降，為 1.401 億美元，比第二季下降 3%。

This decline was primarily due to previously anticipated inventory absorption of certain automotive products. Automotive revenue was $73.6 million, down 7% from Q2. We expect automotive revenue to increase sequentially in the fourth quarter as near-term inventory issues subside. Industrial laser revenue was flat sequentially.

這一下降主要是由於先前預期某些汽車產品的庫存吸收所致。汽車業務收入為 7,360 萬美元，較第二季下降 7%。我們預計，隨著近期庫存問題的緩解，第四季汽車收入將季增。工業雷射收入環比持平。

As I discuss the details of our P&L, expense and profitability metrics will be on a non-GAAP basis, unless otherwise noted. Gross margin in the third quarter was consistent with the second quarter at 12.6%. Operating expenses were $14.5 million or 2% of revenue. This produced operating income of $78 million, representing an operating margin of 10.7%, also consistent in the second quarter. Our low fixed cost structure helped us to maintain our industry-leading margins, which were in line with our long-term target ranges.

當我討論損益表的詳細資訊時，除非另有說明，費用和獲利指標將基於非公認會計原則（non-GAAP）。第三季毛利率與第二季持平，為12.6%。營運費用為 1,450 萬美元，佔收入的 2%。這產生了 7,800 萬美元的營業收入，營業利潤率為 10.7%，與第二季的情況一致。我們的低固定成本結構幫助我們維持了領先業界的利潤率，這符合我們的長期目標範圍。

Our healthy balance sheet, coupled with elevated interest rates helped to provide $8.5 million of interest income. As I mentioned earlier, net income benefited by $3.3 million or $0.09 per share from foreign currency asset and liability revaluations at the end of the quarter. Effective GAAP tax rate was 2.9% in the third quarter. We continue to anticipate a mid-single-digit rate for the fiscal year. Non-GAAP net income reached $87.7 million or $2.39 per diluted share. On a GAAP basis, net income was $80 million or $2.21 per diluted share.

我們健康的資產負債表加上較高的利率幫助我們提供了 850 萬美元的利息收入。正如我之前提到的，季度末外幣資產和負債重估使淨利潤受益於 330 萬美元，即每股 0.09 美元。第三季有效 GAAP 稅率為 2.9%。我們繼續預期本財年的成長率將達到中個位數。非 GAAP 淨利潤達到 8,770 萬美元，即稀釋後每股收益 2.39 美元。以 GAAP 計算，淨利潤為 8,000 萬美元，即稀釋後每股收益 2.21 美元。

Turning to our balance sheet and cash flow statements. At the end of the third quarter, cash and short-term investments were $794 million, up $53.4 million from the end of the second quarter. The primary driver of this increase was strong operating cash flow of $100.9 million, with CapEx of $13.6 million. Free cash flow in the quarter was $87.3 million. Our share buyback program was active during the quarter. We repurchased approximately 153,000 shares at an average price of $193.76 per share for a total cash outlay of $29.6 million. At the end of the third quarter, $64.1 million remained in our share repurchase authorization.

轉向我們的資產負債表和現金流量表。第三季末，現金和短期投資為7.94億美元，比第二季末增加5,340萬美元。這一成長的主要推動力是 1.009 億美元的強勁營運現金流，以及 1,360 萬美元的資本支出。該季度的自由現金流為 8,730 萬美元。我們的股票回購計劃在本季非常活躍。我們以每股 193.76 美元的平均價格回購了約 153,000 股股票，現金支出總額為 2,960 萬美元。截至第三季末，我們的股票回購授權中尚有 6,410 萬美元。

Now, I will turn to our guidance for the fourth quarter. We expect datacom revenue to be slightly up sequentially in the fourth quarter. This growth is being driven primarily by high data rate products for AI, which are more than offsetting the impact of the end of a legacy 100-gig program.

現在，我將談談我們對第四季的指導。我們預計第四季度數據通訊收入將環比小幅成長。這一增長主要是由人工智慧的高數據速率產品推動的，這足以抵消傳統 100G 項目結束的影響。

For telecom revenue, we expect a sequential decline in the fourth quarter as industry-wide inventory absorption continues to impact traditional telecom product demand. We expect non-optical communications revenue to be up sequentially, driven primarily by an increase in automotive revenue. In total, we anticipate revenue to be in the range of $720 million to $740 million in the fourth quarter. We expect net income of $2.20 to $2.27 per share.

對於電信收入，我們預計第四季將出現環比下降，因為全行業的庫存吸收持續影響傳統電信產品的需求。我們預計非光通訊收入將環比成長，主要受到汽車收入成長的推動。總的來說，我們預計第四季的營收將在 7.2 億美元至 7.4 億美元之間。我們預計每股淨利潤為 2.20 美元至 2.27 美元。

In summary, we had another record quarter with results that exceeded our guidance for both revenue and EPS. We are optimistic that we will see strong results again in the fourth quarter, closing out a year of record revenue and profitability, and we believe we are well positioned for continued success as we look ahead.

總而言之，我們的季度業績又創歷史新高，營收和每股盈餘都超出了我們的指引。我們樂觀地認為，我們將在第四季度再次看到強勁的業績，結束創紀錄的收入和盈利能力的一年，並且我們相信，展望未來，我們已做好準備繼續取得成功。

Operator, we are now ready to open the call for questions.

接線員，我們現在準備開始提問。

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

（操作員指示）我們的第一個問題將來自摩根大通的 Samik Chatterjee。

I have a couple, but maybe if I can start with asking about the telecom revenues and sort of the outlook you provided where you're expecting a sequential decline after the increase you had this quarter. Any more color you can provide in terms of what you're seeing, why the DCI demand is not more sustainable and driving a more sustained sort of sequential recovery in that business? And any updated thoughts on how long the inventory digestion then sort of lasts that you've been calling out for a few quarters now? And I have a quick follow-up.

我有一些，但也許我可以先詢問一下電信收入以及您提供的前景，您預計在本季度增長後會出現連續下降。根據您所看到的情況，您還可以提供更多資訊嗎？對於您幾個季度以來一直呼籲的庫存消化持續多長時間，有什麼最新的想法嗎？我有一個快速的跟進。

Samik, the telecom softness that we've been seeing, we see it continuing for another few quarters. It's probably out into -- it's hard to say with certainty, but it's certainly out into early part or even the middle of calendar 2025 before we see any real growth coming back and increase in demand coming back in telecom. That industry still seems to be going through this inventory digestion that we've been seeing.

Samik，我們已經看到電信業的疲軟狀態，我們預計這種情況還會持續幾個季度。這可能會持續到——很難肯定地說，但肯定要到 2025 年年初甚至中期，我們才能看到電信業出現任何真正的成長和需求的增加。該行業似乎仍在經歷我們所看到的庫存消化過程。

Our growth in telecom has been, as you rightly point out on 400ZR. As you know, sometimes that type of business doesn't grow in a straight line. It's not always up and to the right and linear growth. But certainly 400ZR, and I would say ZR generally has been a strong point for us. Right now, we have 5 customer engagements on ZR, both 400ZR and also follow-on our next-generation ZR products.

正如您在 400ZR 上正確指出的那樣，我們在電信領域一直在成長。如您所知，有時此類業務不會直線成長。它並不總是正確且線性的增長。但肯定是 400ZR，我想說 ZR 總體上是我們的強項。目前，我們有 5 個 ZR 客戶參與，其中包括 400ZR 以及我們下一代 ZR 產品的後續產品。

So we're quite -- I'd say, quite optimistic over the medium to long term about DCI and ZR technology, in particular. But yes, there will be a little bit of lumpiness as we go forward. But, yes, telecom continues to be a soft spot in our business, but datacom continues to be very strong for us.

因此，我們對中長期 DCI 和 ZR 技術非常樂觀。但是，是的，隨著我們的前進，將會有一些不順利。但是，是的，電信仍然是我們業務的弱點，但數據通訊對我們來說仍然非常強大。

Got it. And maybe for my follow-up on the datacom side. You had about $7 million, $8 million of sequential revenue growth in datacom this quarter. When you take out the 100 gig business that's rolling off, what does the underlying sequential growth there look like? Any thoughts on timing of when you start to see a bit -- a ramp of the 1.6T product in that to drive revenue?

知道了。也許是為了我在數據通訊上的後續行動。本季數據通訊業務的營收季增約 700 萬美元、800 萬美元。當你除去正在進行的 100 份零工業務時，潛在的連續成長是什麼樣的？您對何時開始看到 1.6T 產品的成長以推動收入有什麼想法嗎？

Yes, great question. I mean, if you look at our datacom business in the quarter, it grew 150% year-on-year and 6% quarter-on-quarter, which is still very strong growth, considering, as you say, we did have that 100 gig product rolling off. It's almost rolled off at this point, but that was -- that was rolling off in the quarter, while the higher data rates products were continuing to go very strongly for us.

是的，很好的問題。我的意思是，如果你看看我們本季的數據通訊業務，它同比增長 150%，環比增長 6%，這仍然是非常強勁的增長，考慮到，正如你所說，我們確實有 100零工產品不斷推出。此時它幾乎已經下線了，但那是在本季度下線的，而更高數據速率的產品對我們來說繼續非常強勁。

The industry is transitioning away from those lower date products and less than -- products that are rated at less than 100 gig accounted for less than 10% of our optical revenue. 800-gig demand remains very robust. And I guess one of the reasons we remain very optimistic about the future and the strength in datacom is, even with the 800-gig remaining robust, once the next-generation products, 1.6 comes along, we believe that will ramp and 800-gig will continue.

該行業正在從那些較低版本的產品和低於 100 GB 的產品轉型，這些產品占我們光學收入的比例不到 10%。 800 場的需求仍然非常強勁。我想我們對數據通訊的未來和實力仍然非常樂觀的原因之一是，即使 800-gig 仍然強勁，一旦下一代產品 1.6 出現，我們相信 800-gig 將會成長將會繼續。

So 1.6 won't replace 800 gig. It will complement 800 gig. The exact timing of that, we're a little bit reluctant to talk about. We only guide one quarter at a time and also our customer -- we let our customers announce their product launches. But what I would say is we're in a very strong position, and we remain very optimistic about our position to continue to support the demand for these products. The demand looks to be very robust, as you say, both for 800 gig, and then once 1.6 comes along, we think that will be very strong as well.

所以 1.6 不會取代 800 gig。它將補充 800 場演出。我們有點不願意談論具體的時間。我們一次只指導一個季度，也指導我們的客戶—我們讓我們的客戶宣布他們的產品發布。但我想說的是，我們處於非常有利的地位，我們對繼續支持這些產品的需求的地位仍然非常樂觀。正如您所說，800 演出的需求看起來非常強勁，一旦 1.6 出現，我們認為這也會非常強勁。

Our next question will come from Karl Ackerman of BNP Paribas.

我們的下一個問題將來自法國巴黎銀行的卡爾·阿克曼。

I was hoping to -- I was hoping you could discuss the broadening or opportunity of broadening up customer design wins and engagements for both 800 gig as well as 1.6T later on this year, because it seems based on your -- based on your June quarter guide that this product transition that you've spoken about for 800 gig is certainly holding up better than what was expected 90 days ago. So if you could just tie those 2 in, that would be very helpful.

我希望——我希望你能在今年晚些時候討論擴大 800 場演出和 1.6T 的客戶設計贏得和參與的擴大或機會，因為這似乎基於你的——基於你的 6 月季度指南表明，您談到的800 演出的產品轉型肯定比90 天前的預期要好。所以如果你能把這兩個結合起來，那就非常有幫助了。

Yes. Like you said, 800 gig remains robust. We don't see 800-gig tapering off anytime soon. And we are gearing up to support the next-generation products, the 1.6 terabit products. Again, I'm reluctant to talk about the timing of that because, we do only guide one quarter at a time, but we are very optimistic about that and we think we're very well positioned.

是的。正如您所說，800 場演出仍然強勁。我們預計 800 場演出不會很快減少。我們正在準備支援下一代產品，即 1.6 太比特產品。再說一次，我不願意談論這個時間，因為我們一次只指導一個季度，但我們對此非常樂觀，我們認為我們處於非常有利的位置。

There are a number of other engagements we have outside of our main customer there, but they're still in the relatively early stages, I would say. And we're focused on making sure we continue to support our main customer in that space, and we're very happy, I would say, and excited about how we're positioned both for 800 gig and also 1.6 and products beyond 1.6 as well. So, we're working on a pipeline with the customer and making sure we're geared up to support whatever they need from us.

除了我們的主要客戶之外，我們還有許多其他業務，但我想說，它們仍處於相對早期的階段。我們致力於確保繼續為該領域的主要客戶提供支持，我想說，我們對我們如何定位 800 gig、1.6 以及 1.6 以上的產品感到非常高興和興奮。因此，我們正在與客戶合作建立管道，並確保我們做好準備來支持他們對我們的任何需求。

Yes. Perhaps just to follow on that, I think there's a lot of confusion in the marketplace between when to use some of your products, AOC based products, versus active copper cable products, and I think there was some confusion earlier this quarter. Maybe just if you could highlight where you see your opportunities and whether you are seeing any cannibalization, if at all, for in-rack connectivity versus short-reach connectivity in the data center for 800 gig and 1.6T? Again, it doesn't appear like there is an issue, but if you could just highlight where you see yourself broadening into or perhaps the opportunities that you see for 800 gig in the June core and beyond, that would be very helpful.

是的。也許只是為了跟進這一點，我認為市場上在何時使用你們的某些產品（基於AOC 的產品）與有源銅電纜產品之間存在很多混亂，而且我認為本季度早些時候存在一些混亂。也許您可以強調您在哪裡看到了機會，以及您是否看到了機架內連接與資料中心 800 gig 和 1.6T 短距離連接之間的任何蠶食（如果有的話）？再說一次，這似乎不存在問題，但如果你能強調一下你認為自己會拓展到哪些領域，或者你在 6 月核心及以後看到的 800 場演出的機會，那將會非常有幫助。

Yes, we certainly have not seen any cannibalization of the demand with copper. I think there's an application for copper, I think the -- [Infinite's] CEO spoke about that recently. But it's a specific application where they use copper interconnects. It doesn't particularly cannibalize what we're doing for that customer. So we just see 800-gig demand remaining quite robust.

是的，我們當然沒有看到銅的需求出現任何蠶食。我認為銅有一個應用，我認為—[Infinite 的]執行長最近談到了這一點。但這是他們使用銅互連的特定應用。它並沒有特別蠶食我們為該客戶所做的事情。因此，我們認為 800 台的需求仍然相當強勁。

And the rate of growth, it seems like the rate of growth of optical interconnect in these AI data centers, it seems to grow more or less exponentially as these data centers grow, their need for optical interconnect is not going to go away. If anything, it's going to increase. And each iteration that comes along, when 1.6 comes along, it doesn't seem like it's going to cannibalize 800-gig. 800-gig will continue at a pace, and if anything, will also grow as 1.6 grows.

成長率，似乎這些人工智慧資料中心中光互連的成長率，隨著這些資料中心的成長，似乎或多或少呈指數級增長，它們對光互連的需求不會消失。如果有的話，它還會增加。每次迭代出現時，當 1.6 出現時，它似乎不會蠶食 800-gig。 800 場演出將繼續保持一定的速度，如果有的話，也將隨著 1.6 的增長而增長。

So, it's a bit of an unusual, normally when there's a -- let's say, in the datacom world, when a new technology comes along, it tends to cannibalize the old technology. But certainly, as we go to higher speeds, 1.6 and beyond, it doesn't seem like the 800-gig is going anywhere -- is going to decline. So, we're quite excited about that.

所以，這有點不尋常，通常當有一種——比方說，在數據通信世界中，當一項新技術出現時，它往往會蠶食舊技術。但可以肯定的是，當我們達到更高的速度（1.6 甚至更高）時，800g 似乎不會有任何發展——只會下降。所以，我們對此感到非常興奮。

(Operator Instructions) Our next question will be coming from Tim Savageaux of Northland Capital Markets.

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

Congrats. Strong results. Maybe it's kind of related to the answer to the last question there. I was going to ask, certainly coming out of OFC and over the last quarter about your impressions of the size of this AI connectivity market, and hoping you might have some impressions just because of the kind of specificity of that comment about 1.6 sort of being additive to the mix and 800 gig continuing to grow. I'd be interested in kind of, I guess, at what point you came to that conclusion on the one hand? And how does that speak to the overall size of the opportunity versus what you might have thought a quarter or 2 ago.

恭喜。強勁的成果。也許這與最後一個問題的答案有關。我想問一下，當然是從 OFC 出來的，在上個季度，您對這個人工智能連接市場規模的印象，並希望您能因為關於 1.6 的評論的特殊性而有一些印象此外，800 場演出還在繼續增長。我想，我對你在什麼時候得出這個結論感興趣？與您一兩個季度前的想法相比，這與機會的整體規模有何關係？

Yes, I think the -- if you like, the view that we have that 1.6 will be additive and not cannibalize 800-gig. That's really a function of looking at the architecture of the products that are in the pipeline that are -- it's in the public domain. If you look at Nvidia's website and you go to their GPUs, you go to their products, you look at the architecture of those products, 1.6 is additive to 800-gig. It doesn't appear to be cannibalizing it.

是的，我認為——如果你願意的話，我們認為 1.6 將是附加的，而不是蠶食 800-gig。這實際上是查看正在開發的產品架構的一個功能，這些產品處於公共領域。如果你瀏覽 Nvidia 的網站，你會看到他們的 GPU，你會看到他們的產品，你會看到這些產品的架構，1.6 是 800 G 的累積。它似乎並沒有蠶食它。

When you look at the number of connections, it does not appear that 800-gig gets cannibalized when 1.6 terabit comes along. So that's really -- it's less of an opinion, I suppose, Tim, and more of a -- it's just math. When we calculate out what's required, it seems like 1.6 will come along and 800 gig will continue. So that's really what's behind that. So, no particular change in our perception in the last 90 days, I guess, what we're all waiting to understand and waiting to see is the timing of the ramp of 1.6 and then, of course, the magnitude of that ramp. will it be as steep as 800-gig? I guess that remains to be seen.

當您查看連線數時，您會發現，當 1.6 TB 出現時，800 Gig 並不會被蠶食。所以這真的——我想，提姆，這不是一種觀點，而是——這只是數學。當我們計算出需要什麼時，似乎 1.6 將會出現，並且 800 gig 將繼續。這就是背後的真正原因。因此，我想，在過去 90 天裡，我們的看法沒有發生特別的變化，我們都在等待了解和等待看到的是 1.6 的斜率上升的時間，當然還有斜率上升的幅度。它會像 800-g 一樣陡峭嗎？我想這還有待觀察。

Great. Well, and as you assess that here over the next couple of quarters. And I imagine that might necessitate some capacity planning on your part. So I'll ask for my quarterly update on any plans for increased capacity or facilities expansion.

偉大的。好吧，正如您在接下來的幾個季度中對此進行的評估一樣。我想這可能需要您進行一些容量規劃。因此，我將要求我提供任何增加產能或設施擴建的計劃的季度更新。

The perennial Building 10 question? Yes, I mean, it's something we evaluate all the time. We have a little bit of space freeing up with the 100 gig program transferring out that frees up a little bit of space for us in our Pinehurst operation. But nevertheless, it's something we evaluate very regularly, at least every quarter. And nothing to announce at this point.

10號樓常年存在的問題？是的，我的意思是，這是我們一直在評估的事情。隨著 100 場演出的項目轉移，我們釋放了一點空間，這為我們在 Pinehurst 運營中釋放了一點空間。但無論如何，我們都會定期（至少每季）對此進行評估。目前沒有什麼可宣布的。

But what I will say is our Building 8 is basically full at this point. Building 9, the expansion of capacity into Building 9 is going very, very well. We're very happy with how that's been going. It's really ahead of all of our expectations. If I was to go back even a year or 18 months ago and tried to predict where we are right now, I think we're very pleasantly surprised with where we are right now.

但我要說的是，我們8號樓現在基本上已經滿了。 9 號樓的產能擴張進展​​非常非常順利。我們對事情的進展感到非常滿意。這確實超出了我們所有的預期。如果我回到一年或 18 個月前並嘗試預測我們現在的處境，我想我們會對現在的處境感到非常驚訝。

And we just want to be ready for the next wave and the next phase of growth that might come in our direction. Three things have to happen, Tim, for us to capitalize like we did in the last several quarters. The demand has to be there. We think that's pretty certain that the demand is there. We have to have the capacity. And then third, we have to execute.

我們只是想為下一波浪潮和下一階段的成長做好準備，這可能會朝著我們的方向發展。提姆，必須發生三件事，我們才能像過去幾季一樣利用資本。需求必須存在。我們認為需求確實存在。我們必須有能力。第三，我們必須執行。

So, we do very well when it comes to execution. I think we have a good reputation in that regard. And capacity is really not a problem for us. We were able to capitalize on a very steep ramp and continue to ship significant volume to our main customer. But we'll be looking at capacity and looking at capacity additions closely over the next while. And I think the pace at which we're expanding in Building 9 is probably ahead of schedule, and we're very optimistic about the future demand and we'll just make sure we're ready and that we have capacity because it's very low risk, Tim, for us to add additional capacity.

所以，我們在執行方面做得非常好。我認為我們在這方面享有良好的聲譽。而且容量對我們來說確實不是問題。我們能夠利用非常陡峭的坡道，繼續向我們的主要客戶運送大量貨物。但我們將在接下來的一段時間內密切關注容量和容量增加。我認為我們在 9 號樓擴建的速度可能比計劃提前，我們對未來的需求非常樂觀，我們將確保我們做好準備並且我們有能力，因為它非常低蒂姆，風險，讓我們增加額外的能力。

If we were to add another building, it's about ballpark $55 million to $60 million of CapEx, which will add about 1 million square feet there or thereabouts and will give us capacity for an additional, depends on the products, but probably $1.2-plus-billion of additional capacity. So -- and the gross margin headwind for us to do that is about 10 basis points. So it's a very tiny downside, if you like, in terms of the financial headwind, but the potential upside is huge. So it's very low risk for us to do that. But again, nothing to announce on this call, but certainly, we would expect to be -- we'll continue to evaluate it, and I would say, stay tuned for the next [while].

如果我們要增加另一棟建築，大約需要5500 萬至6000 萬美元的資本支出，這將增加約100 萬平方英尺的面積，並將為我們提供額外的容量，具體取決於產品，但可能超過1.2美元-億的額外產能。因此，我們要做到這一點，毛利率將面臨約 10 個基點的阻力。因此，如果你願意的話，就財務逆風而言，這是一個非常小的負面影響，但潛在的上行空間是巨大的。所以我們這樣做的風險非常低。但同樣，這次電話會議沒有什麼可宣布的，但我們當然希望——我們將繼續評估它，我想說，請繼續關注下一次。

And maybe just one more thing on that front. Can you remind us of kind of what the time frame is from kind of making the call there to breaking ground and then being able to ramp capacity?

也許這方面還只是一件事。您能否提醒我們從打電話到破土動工然後能夠提高產能的時間範圍是多少？

Yes. I think from when we kind of make the decision, I would say, until we're up and running, it's probably 18 months there or thereabouts, plus or minus. So, we can do it pretty quickly. We have the recipe figured out at this point, and really, we will do more or less a repeat of what we've built before. We might make some small changes, but for the most part, it will be a very similar building to Building 10, or will be a mirror image of Building 10, if you know the geography of our Chonburi campus, we would build, like I say, a mirror image of -- I'm sorry, of Building 9. But about 18 months there or thereabouts.

是的。我認為，從我們做出決定開始，直到我們啟動並運行，可能需要 18 個月左右（上下）。所以，我們可以很快做到。我們現在已經找到了方法，實際上，我們將或多或少重複我們之前建立的內容。我們可能會做一些小的改變，但在大多數情況下，它將是一座與10號樓非常相似的建築，或者將是10號樓的鏡像，如果你知道我們春武里校區的地理位置，我們會建造，就像我一樣比如說，抱歉，是 9 號樓的鏡像。

And I would now like to hand the call back to Seamus for closing remarks.

現在我想將電話轉回謝莫斯以供結束演講。

Thank you for joining our call today. We delivered another strong performance that exceeded our revenue and EPS guidance for the third quarter. We anticipate closing out another record year and believe we are well positioned to extend our success beyond fiscal 2024. We look forward to speaking with you again and to seeing those of you participating in the JPMorgan and B. Riley conferences later this month. Goodbye.

感謝您今天加入我們的電話會議。我們再次實現了強勁的業績，超越了第三季的營收和每股盈餘指引。我們預計將迎來另一個創紀錄的一年，並相信我們已做好充分準備，將我們的成功延續到2024 財年之後。大通和B. Riley 會議。再見。

And this concludes today's conference. Thank you for your participation. You may now disconnect.

今天的會議到此結束。感謝您的參與。您現在可以斷開連線。