Infinera Corp (INFN) 2022 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Infinera Corp. Third Quarter 2022 Earnings Call. (Operator Instructions)

女士們，先生們，感謝您的支持，歡迎參加 Infinera Corp. 2022 年第三季度財報電話會議。 （操作員說明）

Thank you. Amitabh Passi, Head of Investor Relations. You may begin your conference.

謝謝你。 Amitabh Passi，投資者關係主管。你可以開始你的會議了。

Thank you, operator, and good afternoon. Welcome to Infinera's Third Quarter Fiscal 2022 Conference Call. A copy of today's earnings and investor slides are available on the Investor Relations section of the website. Additionally, this call is being recorded and will be available for replay from our website.

謝謝接線員，下午好。歡迎參加 Infinera 2022 財年第三季度電話會議。今天的收益和投資者幻燈片的副本可在網站的投資者關係部分獲得。此外，此通話正在錄音中，並可從我們的網站重播。

Today's call will include projections and estimates that constitute forward-looking statements, including, but not limited to, statements related to our expectations regarding our business plans, model and strategy, including product roadmap and products, sales, growth, market opportunities and trends, manufacturing operations, technology, the shift to open architectures, market adoption of coherent optical engines, competition, customers, expectations regarding industry-wide supply challenges, the macroeconomic environment and ongoing COVID-19 pandemic impacts and statements regarding our future financial performance, including our financial outlook for the fourth quarter of 2022.

今天的電話會議將包括構成前瞻性陳述的預測和估計，包括但不限於與我們對我們的業務計劃、模式和戰略的預期相關的陳述，包括產品路線圖和產品、銷售、增長、市場機會和趨勢，製造運營、技術、向開放架構的轉變、相干光學引擎的市場採用、競爭、客戶、對全行業供應挑戰的預期、宏觀經濟環境和持續的 COVID-19 大流行影響以及關於我們未來財務業績的聲明，包括我們的2022年第四季度財務展望。

These statements are subject to risks and uncertainties that could cause Infinera's results to differ materially from management's current expectations. Actual results may differ materially, as a result of various risk factors, including those set forth in our annual report on Form 10-K for the year ended on December 25, 2021, as filed with the SEC on February 23, 2022, and its quarterly report on Form 10-Q for the quarter ended June 25, 2022, as filed with the SEC on July 28, 2022, as well as subsequent reports filed with or furnished to the SEC from time to time.

這些陳述受到風險和不確定性的影響，可能導致 Infinera 的結果與管理層當前的預期存在重大差異。由於各種風險因素，實際結果可能存在重大差異，包括我們於 2022 年 2 月 23 日向美國證券交易委員會提交的截至 2021 年 12 月 25 日止年度的 10-K 表格年度報告中所述的風險因素，以及於 2022 年 7 月 28 日向 SEC 提交的截至 2022 年 6 月 25 日的季度的 10-Q 表格季度報告，以及不時向 SEC 提交或提供的後續報告。

Please be reminded that all statements are made as of today, and Infinera undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Today's conference call includes certain non-GAAP financial measures. Pursuant to Regulation G, we've provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings release and investor slides for this quarter, each of which is available on the Investor Relations section of our website.

請注意，所有聲明均截至今日，Infinera 不承擔更新或修改任何前瞻性聲明以反映本次電話會議後可能出現的事件或情況的義務。今天的電話會議包括某些非公認會計原則的財務措施。根據 G 條例，我們在本季度的收益發布和投資者幻燈片中提供了這些非 GAAP 財務指標與最直接可比的 GAAP 財務指標的對賬，每一項都可以在我們網站的“投資者關係”部分找到.

And finally, as a reminder, we will allow for plenty of time for Q&A today, but we ask that you limit yourselves to one question and one follow-up, please.

最後，提醒一下，我們今天將留出足夠的時間進行問答，但我們要求您將自己限制在一個問題和一個後續行動上。

I'll now turn the call over to our Chief Executive Officer, David Heard. David?

我現在將把電話轉給我們的首席執行官 David Heard。大衛？

Thanks, Amitabh. Good afternoon, and thanks for joining us today. I'll begin with a review of our results for the quarter and then turn the call over to Nancy to cover the details of our financial performance. Given everything that's going on in the world with the markets and the economy, I'll try to be concise today. Overall, our message today is, our overall Q3 non-GAAP financial results beats consensus estimates. Our outlook for Q4 is in line with consensus expectations. We're delivering against our product strategy to drive market share gains, as evidenced by our 17% year-over-year product revenue growth, and we strengthened our balance sheet.

謝謝，阿彌陀佛。下午好，感謝您今天加入我們。我將從回顧我們本季度的業績開始，然後將電話轉給南希，以涵蓋我們財務業績的詳細信息。鑑於世界上發生的一切與市場和經濟有關的事情，我今天會盡量簡明扼要。總體而言，我們今天要傳達的信息是，我們第三季度的整體非公認會計原則財務業績超出了普遍預期。我們對第四季度的展望與市場普遍預期一致。我們正在執行我們的產品戰略以推動市場份額增長，我們的產品收入同比增長 17% 就是證明，我們加強了資產負債表。

Financially, in Q3, we delivered revenue and non-GAAP operating margin at the high end of our outlook range, with non-GAAP gross margins near the midpoint of the range and up 170 basis points sequentially. On a year-over-year basis, we expanded operating margin by 270 basis points, grew product revenue 17%, which represented an acceleration from 11% growth that we posted last quarter, and grew total revenue by 9%. Furthermore, we generated free cash flow in the quarter, and improved our balance sheet.

在財務方面，在第三季度，我們的收入和非美國通用會計準則營業利潤率處於我們展望範圍的高端，非美國通用會計準則毛利率接近該範圍的中點，並連續增長 170 個基點。與去年同期相比，我們將營業利潤率提高了 270 個基點，產品收入增長了 17%，這比我們上一季度公佈的 11% 的增長速度有所加快，總收入增長了 9%。此外，我們在本季度產生了自由現金流，並改善了我們的資產負債表。

Demand in the quarter remained healthy with bookings continuing at a steady pace for most of the quarter, especially in the Americas and with ICPs. In fact, 4 of our top 10 customers based on bookings were ICPs. We did have a few large orders that slipped from the last week of the third quarter, given the September 24th quarter end into the first week of our fourth quarter, resulting in a very strong start to Q4. Our backlog is healthy, setting us up well for the fourth quarter and for the full year 2023.

本季度的需求保持健康，本季度大部分時間的預訂量繼續保持穩定，尤其是在美洲和 ICP。事實上，我們根據預訂量排名前 10 位的客戶中有 4 個是 ICP。鑑於 9 月 24 日季度末到第四季度的第一周，我們確實有一些大訂單從第三季度的最後一周滑落，導致第四季度的開局非常強勁。我們的積壓工作很健康，為第四季度和 2023 年全年做好了準備。

From a supply perspective, the environment was tougher than our expectations from 90 days ago, but our team effectively navigated the challenges in the quarter. Supply costs, including expedite fees and freight remained elevated and adversely impacted gross margins incrementally by over 100 basis points relative to our projections coming into the quarter. The total impact to gross margins for the quarter was approximately 400 basis points above normalized levels, without which our gross margins would have been above 40% in the quarter.

從供應的角度來看，環境比我們 90 天前的預期更加嚴峻，但我們的團隊有效地應對了本季度的挑戰。與我們對本季度的預測相比，包括加急費和運費在內的供應成本仍然居高不下，並對毛利率產生了超過 100 個基點的不利影響。本季度對毛利率的總體影響比正常水平高出約 400 個基點，否則本季度我們的毛利率將超過 40%。

While we're seeing some broad-based relief in overall supply chain, we expect supply conditions to remain challenging for some critical components, through at least the first half of next year before easing in the back half of 2023.

雖然我們看到整體供應鏈出現了一些廣泛的緩解，但我們預計一些關鍵部件的供應狀況將仍然充滿挑戰，至少到明年上半年，然後在 2023 年下半年緩解。

During the quarter, we continued to ramp new products, win deals with major ICPs and Tier 1 service provider customers. Our progress in the quarter spanned our entire portfolio, reinforcing our confidence in our 8x4x1 strategy. Specifically, within our Systems business group, we had 2 key developments. First, we ramped ICE6 to over 30% of product revenue in the quarter, and secured key design wins with several large customers. including a Tier 1 global cable operator with significant operations in the U.S., a Tier 1 ICP as we expanded into their long-haul network, and a major telecommunications service provider in Asia Pacific. ICE6 remained on track to ramp to 20% to 25% of total product revenue for the full year of 2022, in line with our prior commitments.

在本季度，我們繼續推出新產品，贏得與主要 ICP 和一級服務提供商客戶的交易。我們在本季度的進展涵蓋了我們的整個投資組合，增強了我們對 8x4x1 戰略的信心。具體來說，在我們的系統業務組內，我們有兩個關鍵的發展。首先，我們在本季度將 ICE6 提高到產品收入的 30% 以上，並贏得了幾家大客戶的關鍵設計勝利。包括一家在美國有重要業務的全球一級有線電視運營商、一家在我們擴展到其長途網絡時的一級 ICP，以及一家亞太地區的主要電信服務提供商。根據我們之前的承諾，ICE6 仍有望在 2022 年全年佔產品總收入的 20% 至 25%。

Second, we had another strong quarter for our metro platforms with revenue for the flagship GX30 product line, up in the double-digit percentage range on a year-over-year basis. Our metro footprint continues to diversify, as we expand with service provider customers, both domestically and internationally.

其次，我們的地鐵平台又迎來了一個強勁的季度，旗艦產品 GX30 產品線的收入同比增長了兩位數。隨著我們在國內和國際服務提供商客戶的擴展，我們的地鐵足跡繼續多樣化。

Within our subsystems group, there were 3 notable accomplishments for the quarter. First, our 400-gig ZR+ pluggable is industry-leading and ahead of our expectations. We are starting to vertically integrate it into our own Metro platforms, which should begin to positively impact gross margins as we exit 2023. During the quarter, we concluded a successful field trial with a large North American Tier 1 service provider, in which we demonstrated industry-leading results in reach, power and performance. All of this was accomplished in the industry's first 400-gig ZR+ software-defined pluggable.

在我們的子系統組中，本季度取得了 3 項顯著成就。首先，我們的 400 gig ZR+ 可插拔是行業領先的，並且超出了我們的預期。我們開始將其垂直整合到我們自己的 Metro 平台中，隨著我們退出 2023 年，這將開始對毛利率產生積極影響。在本季度，我們與一家大型北美 1 級服務提供商完成了成功的現場試驗，我們在其中展示了在覆蓋範圍、功率和性能方面取得行業領先的成果。所有這一切都是在業界首個 400 gig ZR+ 軟件定義的可插拔設備中完成的。

Second, we're pleased with the progress we're making on the development of our own 100 gig point-to-multipoint coherent pluggables, based on the open multi-source specifications being developed in the Open XR forum. We believe these pluggables will revolutionize networks and open up a new multibillion-dollar addressable market for us. Membership in the Open XR forum continues to expand, and there's a growing pipeline of interested service providers and equipment manufacturers ready to sign up for the forum.

其次，我們對基於 Open XR 論壇中正在開發的開放多源規範開發我們自己的 100 gig 點對多點相干可插拔程序所取得的進展感到高興。我們相信這些可插拔設備將徹底改變網絡，並為我們開闢一個價值數十億美元的新市場。 Open XR 論壇的成員不斷擴大，越來越多的感興趣的服務提供商和設備製造商準備註冊該論壇。

In fact, during the quarter, American Tower, Telecom Italia Mobile, joined as members of the forum, along with additional network equipment manufacturers, including DriveNets, UfiSpace and Furukawa Electric. Third and finally, the development of our next-generation 800-gig pluggables is progressing well, and we intend to lead the industry in this category as well.

事實上，在本季度，American Tower、Telecom Italia Mobile 以及其他網絡設備製造商（包括 DriveNets、UfiSpace 和 Furukawa Electric）作為論壇成員加入了論壇。第三，也是最後一點，我們下一代 800g 可插拔的開發進展順利，我們也打算在這一類別中引領行業。

I'm encouraged by our business execution across the board while being mindful of an uncertain macroeconomic environment. Our product portfolio is in great shape, and we're winning major deals and gaining market share. We are prioritizing our investments in sales and marketing and the most strategic R&D programs, to capitalize on the insertion opportunities we see globally.

我對我們全面的業務執行感到鼓舞，同時注意不確定的宏觀經濟環境。我們的產品組合狀況良好，我們正在贏得重大交易並獲得市場份額。我們正在優先考慮對銷售和營銷以及最具戰略意義的研發計劃的投資，以利用我們在全球看到的插入機會。

In addition, as an optical semiconductor manufacturer, we have been positioning ourselves over the past couple of years with all branches of the U.S. government, including the Department of Commerce, as an intended beneficiary of the government-sponsored CHIPS And Sciences Act. Infinera is unique and our U.S.-based capability in compound semiconductors with production and packaging facilities located in the United States. We intend to use any government funding that may be made available to us to accelerate R&D leadership in this critical technology, invest in our core business capability, and potentially expand into new markets, while strengthening supply chain resiliency and national security interests.

此外，作為一家光學半導體製造商，在過去幾年中，我們一直將自己定位為美國政府所有部門，包括商務部，作為政府資助的《芯片和科學法案》的預期受益者。 Infinera 是獨一無二的，我們在美國的化合物半導體生產能力位於美國，生產和包裝設施位於美國。我們打算利用可能提供給我們的任何政府資金來加速在這一關鍵技術方面的研發領導地位，投資於我們的核心業務能力，並可能擴展到新市場，同時加強供應鏈彈性和國家安全利益。

Looking ahead into the fourth quarter, we're planning for another quarter of above-market revenue growth, while fighting the remaining acute supply chain challenges to get towards non-GAAP gross margins of 40%. We expect the fourth quarter to benefit from the continued ramp of ICE6, momentum in the metro business and additional operating leverage. Our fourth quarter outlook also implies product revenue growth of greater than 10% for the full year, and significant operating income expansion in 2022 over 2021 results. This financial performance is remarkable, especially in an environment where we expect to absorb more than $50 million in elevated supply chain costs for the year, and further demonstrates the value of our vertical integration.

展望第四季度，我們計劃實現另一個季度高於市場的收入增長，同時應對剩餘的嚴峻供應鏈挑戰，以實現 40% 的非 GAAP 毛利率。我們預計第四季度將受益於 ICE6 的持續增長、地鐵業務的發展勢頭和額外的運營槓桿。我們的第四季度展望還意味著全年產品收入增長超過 10%，以及 2022 年營業收入將比 2021 年業績顯著增長。這種財務表現非常出色，尤其是在我們預計今年將吸收超過 5000 萬美元的高供應鏈成本的環境下，並進一步證明了我們垂直整合的價值。

As you've heard today, we're extremely focused on executing against our strategy and meeting our commitments. Our 8x4x1 strategy is working. Our products are winning in the market and supply chain disruptions are actually creating new opportunities for us and our customers, as they look to mitigate their supply chain risks. We are relentlessly driving towards our target business model and $1 per share in annual earnings power. While there are several adverse macroeconomic factors at play, the underlying demand drivers for our products and services are healthy. I continue to be impressed with the innovation, execution and resilience of our Infinera team, the high degree of engagement of our partners and suppliers, and the collaboration of our customers.

正如您今天所聽到的，我們非常專注於執行我們的戰略並履行我們的承諾。我們的 8x4x1 策略正在奏效。我們的產品在市場上獲勝，供應鏈中斷實際上為我們和我們的客戶創造了新的機會，因為他們希望減輕供應鏈風險。我們正在不懈地朝著我們的目標商業模式和每股 1 美元的年盈利能力邁進。雖然有幾個不利的宏觀經濟因素在起作用，但我們產品和服務的潛在需求驅動因素是健康的。 Infinera 團隊的創新、執行力和韌性、我們的合作夥伴和供應商的高度參與以及客戶的協作給我留下了深刻的印象。

As we look forward to -- we look forward to diving deeper into our company's strategy and our product portfolio at our upcoming Investor Day that we are planning for March 7, 2023, at the OFC Industry Show in San Diego, California.

正如我們所期待的那樣——我們期待在即將於 2023 年 3 月 7 日在加利福尼亞州聖地亞哥舉行的 OFC 工業展上的投資者日上更深入地探討我們公司的戰略和我們的產品組合。

I will now turn the call over to Nancy to cover the financial details of the quarter and our outlook for the fourth quarter. Nancy?

我現在將電話轉給南希，以介紹本季度的財務細節和我們對第四季度的展望。南希？

Thanks, David. Good afternoon, everyone. I will begin by covering our Q3 results and then provide our outlook for Q4. My comments reflect non-GAAP results and outlook. For your reference on our Investor Relations website, we have posted slides with financial details, including our GAAP to non-GAAP reconciliation to assist with my commentary.

謝謝，大衛。大家下午好。我將首先介紹我們的第三季度業績，然後提供我們對第四季度的展望。我的評論反映了非公認會計原則的結果和前景。供您在我們的投資者關係網站上參考，我們發布了包含財務詳細信息的幻燈片，包括我們的 GAAP 與非 GAAP 對賬，以幫助我發表評論。

I am very pleased with our performance in Q3. The Infinera team executed well to deliver revenue and operating margin at the upper end of our outlook range and revenue in the third quarter was $390 million, up 9% on a year-over-year basis, with product revenue growth of 17%. This growth was largely due to the continued ramp of ICE6 to over 30% of product revenue in the quarter, along with the continued momentum in our Metro business.

我對我們在第三季度的表現感到非常滿意。 Infinera 團隊執行良好，收入和營業利潤率處於我們展望範圍的上限，第三季度收入為 3.9 億美元，同比增長 9%，產品收入增長 17%。這一增長主要是由於本季度 ICE6 持續增長至產品收入的 30% 以上，以及我們的 Metro 業務的持續增長勢頭。

Service revenue was stable sequentially, but still down on a year-over-year basis, as we continue to build our Professional Services backlog from the impact of delayed customer deployments earlier in the year.

服務收入環比穩定，但仍同比下降，因為我們繼續從今年早些時候延遲客戶部署的影響中建立我們的專業服務積壓。

Geographically, we derived 57% of our revenue from domestic customers, a level higher than normal due to the strength at ICPs and other service providers in the U.S. During the quarter, one customer contributed to greater than 10% of our revenue, which was an ICP customer. Gross margin of 37.8% was near the midpoint of our outlook range and up 170 basis points sequentially. We delivered this margin, while absorbing approximately 400 basis points of supply chain-related headwinds in the quarter, 100 basis points higher than our expectations, from roughly 90 days ago.

從地域上看，我們 57% 的收入來自國內客戶，由於美國 ICP 和其他服務提供商的實力，這一水平高於正常水平。在本季度，一個客戶對我們收入的貢獻超過 10%，這是ICP客戶。毛利率為 37.8%，接近我們展望範圍的中點，連續上升 170 個基點。我們實現了這一利潤率，同時在本季度吸收了大約 400 個與供應鏈相關的逆風，比大約 90 天前的預期高出 100 個基點。

Operating profit in the quarter was $20 million, equating to an operating margin of 5.2%, which was at the high end of our outlook range. On a year-over-year basis, we more than doubled both operating profit dollars and operating margin in the third quarter. Operating expenses of $127.5 million were below our outlook range of $131 million to $135 million, as we tightly managed spending in the quarter. The resulting EPS in the quarter was $0.05 per share.

本季度的營業利潤為 2000 萬美元，相當於 5.2% 的營業利潤率，處於我們展望範圍的高端。與去年同期相比，我們在第三季度的營業利潤和營業利潤率都翻了一番以上。 1.275 億美元的運營費用低於我們 1.31 億美元至 1.35 億美元的預期範圍，因為我們對本季度的支出進行了嚴格管理。本季度的每股收益為 0.05 美元。

Moving on to the balance sheet and cash flow items; we ended the quarter with $210 million in cash and restricted cash, up from last quarter. Our cash balance benefited from cash flow from operations of approximately $20 million, which resulted in free cash flow of $9 million, and we reinforced our balance sheet further, as part of the refinancing of a substantial portion of our 2024 notes.

轉到資產負債表和現金流量項目；我們在本季度末有 2.1 億美元現金和受限現金，高於上一季度。我們的現金餘額受益於約 2000 萬美元的運營現金流，產生了 900 萬美元的自由現金流，作為 2024 年大部分票據再融資的一部分，我們進一步加強了資產負債表。

During the quarter, we paid off the $40 million outstanding on our ABL facility, ending the quarter with a 0 balance drawn. As a reminder, we will continue to utilize our ABL facility strategically for short-term working capital needs.

在本季度，我們償還了 ABL 設施的 4,000 萬美元未償付，本季度末餘額為 0。提醒一下，我們將繼續戰略性地利用我們的 ABL 設施來滿足短期營運資金需求。

Despite the tough macroeconomic conditions in 2022, we continued to make meaningful progress toward our long-term target business model, while strengthening our financial position. Through the first 3 quarters of 2022 and compared to the same period in 2021, we grew company revenue by 6% and product revenue by 11%, well ahead of the 4% growth rate for the optical market, netting in an expected gain in market share. We expanded operating margin, while absorbing higher supply chain costs throughout the year, and we successfully ramped ICE6, consistent with our commitments.

儘管 2022 年宏觀經濟形勢嚴峻，但我們繼續朝著我們的長期目標業務模式取得有意義的進展，同時加強了我們的財務狀況。在 2022 年前三個季度，與 2021 年同期相比，我們的公司收入增長了 6%，產品收入增長了 11%，遠高於光學市場 4% 的增長率，實現了預期的市場增長分享。我們擴大了營業利潤率，同時吸收了全年更高的供應鏈成本，我們成功地提升了 ICE6，這與我們的承諾一致。

Turning to the outlook for the fourth quarter, we are encouraged by the demand environment, the ramp of ICE6 and our strong backlog. At the same time, we are cognizant of the uncertain macroeconomic environment and expect supply challenges to persist, through at least the first half of 2023, albeit with some moderation. Taking these factors into account, we expect Q4 revenue to be in the range of $435 million, plus or minus $15 million, representing approximately 8% growth on a year-over-year basis at the midpoint of the range. We are planning for year-over-year product revenue growth of greater than 10% in Q4, and a sequential improvement in services revenue.

談到第四季度的前景，我們對需求環境、ICE6 的增長和我們強大的積壓感到鼓舞。與此同時，我們認識到宏觀經濟環境的不確定性，並預計供應挑戰將持續到至少 2023 年上半年，儘管會有所緩和。考慮到這些因素，我們預計第四季度的收入將在 4.35 億美元左右，正負 1500 萬美元，在該範圍的中點同比增長約 8%。我們計劃在第四季度實現超過 10% 的產品收入同比增長，以及服務收入的連續改善。

We expect gross margin to be in the range of 40%, plus or minus 150 basis points, up 220 basis points at the midpoint of the range on a quarter-over-quarter basis. The primary driver of projected sequential margin improvement, is a higher percentage of vertical integration and our mix from the ongoing ramp of ICE6. Embedded in the gross margin outlook is our assumption that we will continue to absorb approximately 300 basis points of supply chain impact from elevated costs tied to components, materials and freight.

我們預計毛利率將在 40% 的範圍內，正負 150 個基點，在該範圍的中點環比增長 220 個基點。預計連續利潤率改善的主要驅動力是更高百分比的垂直整合和我們來自 ICE6 持續增長的組合。毛利率前景中包含我們的假設，即我們將繼續吸收與組件、材料和運費相關的高成本對供應鏈的影響約 300 個基點。

We are forecasting Q4 operating expenses to be in the range of $140 million to $144 million, up sequentially as we pay annual commissions and continue to prioritize investments in both sales and marketing and R&D. The resulting operating margin in Q4 is expected to be 7% plus or minus 200 basis points, in line with consensus at the midpoint of the outlook range, and up 270 basis points on a year-over-year basis. Below the operating income line, we assume $7 million for net interest expense and $4 million for taxes. Finally, we are anticipating a basic share count of approximately 221 million shares for Q4 and a fully diluted share count of 260 million shares.

我們預計第四季度的運營費用將在 1.4 億美元至 1.44 億美元之間，隨著我們支付年度佣金並繼續優先投資於銷售和營銷以及研發，環比上升。第四季度由此產生的營業利潤率預計為 7% 正負 200 個基點，與展望範圍中點的共識一致，同比增長 270 個基點。在營業收入線以下，我們假設淨利息支出為 700 萬美元，稅收為 400 萬美元。最後，我們預計第四季度的基本股數約為 2.21 億股，完全稀釋後的股數為 2.6 億股。

As I close today, I want to reiterate how proud I am of the Infinera team's accomplishments over the last couple of years, as we have ramped new products, won new customers accelerated growth and expanded margins. The team has delivered these solid operational results, while navigating through a tough external environment. We remain confident in our 8x4x1 strategy, as we drive toward our long-term business model and focus on generating $1 per share in earnings power. Finally, I'd like to extend my thanks to our partners, customers and shareholders for your continued support and cooperation.

在今天結束之際，我想重申我對 Infinera 團隊在過去幾年取得的成就感到多麼自豪，因為我們推出了新產品，贏得了新客戶，加速增長並擴大了利潤。該團隊已經交付了這些可靠的運營成果，同時在艱難的外部環境中航行。我們對我們的 8x4x1 戰略仍然充滿信心，因為我們朝著我們的長期業務模式邁進，並專注於產生每股 1 美元的盈利能力。最後，感謝我們的合作夥伴、客戶和股東一直以來的支持與合作。

Josh, I'd like to turn the call over for questions.

喬希，我想把電話轉過來問問題。

(Operator Instructions) Your first question comes from the line of Catharine Trebnick with MKM Partners.

（操作員說明）您的第一個問題來自 MKM Partners 的 Catharine Trebnick。

Thank you and first time actually on the call with you guys. So my one question is you -- it looks like Europe is down 9% quarter-over-quarter. Can you talk to some of the issues going on there? Is it still pretty much -- yes, just explain what's taking place in Europe and why that's down.

謝謝你們，第一次和你們通話。所以我的一個問題是你——看起來歐洲的季度環比下降了 9%。你能談談那裡發生的一些問題嗎？還是差不多 - 是的，只需解釋歐洲正在發生的事情以及為什麼會下降。

Yes, it's a good question, Catharine. Good to have you online. Q3 typically, seasonally has been a bit of a down quarter in Europe, over the pandemic, not as much travel this year. I think we saw a bit more travel plus, we had quite a concentration here in the U.S. and with ICPs, and the way we count some of that revenue of global ICP, it falls in the U.S. bucket. But nothing out of the ordinary, nothing systemic, we still see strong demand and good prospects in Europe going forward.

是的，這是個好問題，凱瑟琳。很高興你在線。由於大流行，第三季度通常在歐洲季節性地有所下降，今年的旅行量沒有那麼多。我認為我們看到了更多的旅行加上，我們在美國和 ICP 方面非常集中，而且我們計算全球 ICP 的部分收入的方式，它屬於美國。但沒有什麼不尋常的，沒有什麼系統性的，我們仍然看到歐洲未來的強勁需求和良好前景。

Yes. And the only thing I want to press upon is, subsea has always been a strong area of upgrades for 800 gig. Can you pretty much pinpoint where you are, against some of the competitive landscape with that opportunity?

是的。我唯一要強調的是，海底一直是 800 gig 升級的強大領域。您能否準確地指出您所處的位置，以應對具有該機會的一些競爭格局？

Yes, I think we're winning lots of routes. And then with -- when we look at the technology, there aren't many, with 800-gig technology out there. So that business for us has been growing year-over-year, not only in revenue bookings, but also pipeline opportunity, so it's going to be an exciting -- lots of new tables going in, to take advantage of interconnecting these data centers and handling the growth on a global basis.

是的，我認為我們贏得了很多路線。然後 - 當我們查看技術時，沒有很多，有 800 gig 的技術。因此，我們的業務逐年增長，不僅在收入預訂方面，而且在管道機會方面，所以這將是一個令人興奮的 - 大量新表進入，以利用這些數據中心和在全球範圍內處理增長。

Your next question comes from the line of Dave Kang with B. Riley.

您的下一個問題來自 Dave Kang 和 B. Riley 的對話。

My first question is, I don't know if you disclose RPO, just how much was it, and how much of that is really for immediate shipments, say, less than 3 months?

我的第一個問題是，我不知道你是否披露了 RPO，它是多少，其中有多少是針對即時發貨的，比如不到 3 個月？

So we do disclose the RPO and the detailed schedule is in the Q that was filed today. So RPOs were up $300 million year-over-year, at $909 million. It was down $45 million versus last quarter. But I can say that in the first week of Q4, we more than offset that in some bookings that literally just pushed over into the first week of Q4.

因此，我們確實披露了 RPO，詳細的時間表在今天提交的 Q 中。因此，RPO 同比增長 3 億美元，達到 9.09 億美元。與上一季度相比，它減少了 4500 萬美元。但我可以說，在第四季度的第一周，我們在一些剛剛推遲到第四季度第一周的預訂中抵消了這一點。

So, is it fair to assume -- actually, that was my next question is, orders that were slipped to fourth quarter. It sounds like it's about maybe $90 million to $100 million. Is that about right?

那麼，假設是否公平 - 實際上，這是我的下一個問題，訂單下滑到第四季度。聽起來大概是 9000 萬到 1 億美元。這對嗎？

I'm not going to give you the amount, but it's more than $45 million. I'll leave it at that.

我不會告訴你金額，但超過 4500 萬美元。我就這樣吧。

All that came in -- our third quarter closed on September 24, just the way the days felt, sometimes getting customers and folks to realize it's not October 1st is a challenge. So yes, those orders all came in, in Q1 well over the $45 million number.

所有這些都進來了——我們的第三季度於 9 月 24 日結束，就像當時的感覺一樣，有時讓客戶和人們意識到這不是 10 月 1 日是一個挑戰。所以，是的，這些訂單都進來了，在第一季度遠遠超過了 4500 萬美元。

And my first question actually was about how much of that RPO is for immediate shipments?

我的第一個問題實際上是關於即時發貨的 RPO 有多少？

For immediate shipments?

即時發貨？

Like within -- yes, it's like this quarter, almost like -- how much can you ship if you have...

就像在裡面——是的，就像這個季度，幾乎就像——如果你有……你能運送多少……

Yes, the remaining -- of the $909 million, the remaining to go in 2022 is $426 million.

是的，剩下的——在 9.09 億美元中，2022 年剩下的就是 4.26 億美元。

Your next question comes from the line of Alex Henderson with Needham.

您的下一個問題來自 Alex Henderson 與 Needham 的對話。

So looking at the same basic question, RPO is a little bit of an awkward term for backlog. And I guess the answer is the backlog came down by $45 million in the quarter, and that has been fully refreshed. If I were to look at that backlog, how do we think about the way it plays out into the first half of next year and specifically relative to the first quarter? Because normally, you have a seasonality in the first quarter that drops quite significantly. I know you don't want to give guidance that far out, but is there enough of that backlog -- that at this point, we would have a different than normal seasonality, and maybe a lesser decline in product sales sequentially than you've had in the past?

所以看看同樣的基本問題，RPO 是一個有點尷尬的積壓術語。我猜答案是本季度的積壓訂單減少了 4500 萬美元，而且已經完全更新了。如果我看一下積壓的工作，我們如何看待它在明年上半年的表現，特別是相對於第一季度的表現？因為通常情況下，您在第一季度會有一個顯著下降的季節性。我知道您不想提供那麼遠的指導，但是積壓的訂單是否足夠多-在這一點上，我們將有與正常的季節性不同的情況，並且產品銷售的連續下降幅度可能比您的要小過去？

It's possible, but we're not going to call it yet. That RPO number and backlog number, just to remind everybody, is supply limited and has been for the last 18 months. So Alex, at this point in time, we're kind of continuing to believe we'll have the typical seasonal falloff from Q4 to Q1. Too early to call that ball, given how dynamic the supply environment is. As I mentioned earlier, while things have gotten easier for some broader parts, there's still probably an acute 8 to 12 parts in suppliers with kind of -- each a handful of parts that are really holding up the industry. Very familiar names that many CEOs like myself, have been muttering.

這是可能的，但我們還不打算調用它。提醒大家的是，RPO 編號和積壓編號是供應有限的，並且在過去 18 個月內一直如此。所以亞歷克斯，在這個時間點，我們仍然相信我們會從第四季度到第一季度出現典型的季節性下降。鑑於供應環境的動態性，現在說這個球還為時過早。正如我之前提到的，雖然對於一些更廣泛的零件來說事情變得更容易了，但供應商中可能仍然有 8 到 12 個零件——每一個零件都真正支撐著這個行業。很多像我這樣的 CEO 都在嘀咕著非常熟悉的名字。

So if I were to look at it is, take the $45 million assuming that, that had been a normal September quarter and it sounds like you have around $900 million from RPO for the fourth quarter and into 2023. Is it reasonable to think of that as a straight backlog, and therefore, you've already got in hand, well over 50% of CY '23 product sales in hand? Or is there a large portion of that related to service?

因此，如果我看一下，假設 4500 萬美元，那是一個正常的 9 月季度，聽起來你從第四季度到 2023 年的 RPO 中大約有 9 億美元。這樣想合理嗎作為一個直接的積壓，因此，您已經掌握了 23 年 23 年產品銷售額的 50% 以上？還是有很大一部分與服務有關？

A portion of that is related to service. I would say we feel good about our expected backlog going into '23, and that it gives us -- although we're not giving full guidance for '23 at this point, we do expect to grow ahead of the market in '23, and our backlog gives us that comfort.

其中一部分與服務有關。我想說，我們對進入 23 年的預期積壓感到滿意，這給了我們——儘管我們目前沒有為 23 年提供全面指導，但我們確實希望在 23 年領先於市場增長，我們的積壓工作給了我們這種安慰。

All right. Thank you. I will cede the floor.

好的。謝謝你。我將放棄發言權。

Yes. I just want to clarify for those, because I want to make sure, Alex, we get your question on the backlog and RPO piece. So again, we ended the quarter September 24. There were a couple of orders that slipped over into the following week, which ended before October 1st, that were in excess of $45 million. So the RPO number, I think, reported that Nancy just went through, was without those bookings included. So that number would have been -- the $909 million would have been up by over $45 million -- well over $45 million.

是的。我只是想澄清一下，因為我想確定，Alex，我們收到了關於積壓和 RPO 的問題。同樣，我們在 9 月 24 日結束了這個季度。有幾個訂單滑到了下週，在 10 月 1 日之前結束，超過 4500 萬美元。因此，我認為，RPO 編號報告說南希剛剛通過，不包括這些預訂。所以這個數字應該是——9.09 億美元將增加超過 4500 萬美元——遠遠超過 4500 萬美元。

All right. So the RPO is something in excess of $910 million that you would have had -- that you had coming into the quarter, if you make that 1 week adjustment?

好的。因此，如果您進行 1 週的調整，RPO 是您本應擁有的超過 9.1 億美元的東西——您進入本季度？

Correct.

正確的。

Your next question comes from the line of Mike Genovese with Rosenblatt Securities.

您的下一個問題來自 Rosenblatt Securities 的 Mike Genovese。

I guess I want to understand -- I think I heard you say, Nancy, you're not giving '23 guidance right now, and I don't and you said -- does that mean we're not talking about 8 to 12 anymore for next year?

我想我想明白——我想我聽到你說，南希，你現在沒有提供 '23 指導，我沒有，你說——這是否意味著我們不是在談論 8 到 12明年還有嗎？

No, doesn't mean anything. It's just -- right now, we're focused on executing Q4, and we're not going to make any update to '23 at this point.

不，不代表什麼。只是——現在，我們專注於執行第四季度，此時我們不會對 '23 進行任何更新。

Yes. No updates to what we've said prior, Mike. So we're not backing off anything, we just want to get through this quarter and make sure we see where the stability in the market ends up.

是的。邁克，我們之前所說的沒有更新。因此，我們不會放棄任何東西，我們只想度過這個季度，並確保我們看到市場的穩定最終走向何方。

Okay. And then I'm looking at the presentation, it said bookings continued at a steady pace. I think in prior quarters this year, they were up, I think, double digits year-over-year. Is that -- does that continue in the third quarter, or does steady means sort of flat year-over-year?

好的。然後我正在查看演示文稿，它說預訂繼續以穩定的速度進行。我認為在今年的前幾個季度，它們同比增長了兩位數。那是 - 第三季度會繼續嗎，還是穩定意味著同比持平？

Yes. So I think what we're seeing is the forecast that we had for the back half of the year is holding strong with steady growth. The timing of that week of ending the 24th to October 1 was the only change that we saw, Mike. So we still see that kind of growth rate, as we look at the back half of the year and positive book-to-bill. Our book-to-bill, just to be clear, was just under 1. And if you take that week into -- was definitely over 1 and consistent with what our thoughts were, as we entered the back half of the year.

是的。因此，我認為我們看到的是我們對下半年的預測保持強勁且增長穩定。邁克，從 24 日到 10 月 1 日結束那一周的時間是我們看到的唯一變化。所以我們仍然看到這種增長率，因為我們看到了今年下半年和積極的訂單出貨量。為了清楚起見，我們的帳單到帳單剛剛低於 1。如果你把那一周納入 - 絕對超過 1 並且與我們的想法一致，因為我們進入了下半年。

Okay. So a couple of more questions, if you don't mind. First of all, on the ICPs, really good quarter for ICPs, it sounds like you had 1 10% customer. But were there strengths from other customers in that as well, or was it primarily driven by one?

好的。如果你不介意的話，還有幾個問題。首先，關於 ICP，對於 ICP 來說，這是一個非常好的季度，聽起來你有 1 個 10% 的客戶。但在這方面是否也有其他客戶的優勢，還是主要由一個客戶驅動？

No. As I mentioned in the last call, where we used to only engage one ICP or two at a time, we're now kind of positioned with the top 7 going forward, and some of those are ramping. You heard in my comments where we're ramping different applications with each of those ICPs. So while there was one 10% ICT, there were a couple of very large contributors to the quarter as well.

不。正如我在上次電話會議中提到的那樣，我們過去一次只參與一個或兩個 ICP，我們現在的位置是前 7 名，其中一些正在加速。您在我的評論中聽到我們正在使用這些 ICP 增加不同的應用程序。因此，雖然有一個 10% 的 ICT，但該季度也有幾個非常大的貢獻者。

Great. And then I'm going to ask just 2 at once, and that will be it for me. The supply -- supply chain, I think like a lot of people have said is, still bad and even a little worse than we thought. But you still managed to come in with what I call in-line gross margins, in-line gross margin guide. Does that mean that the mix shift to ICE6 is even more powerful than you thought? And then secondly, unrelated, what's the driver of the share count dropping in 4Q from 3Q?

偉大的。然後我將一次只問兩個，這對我來說就是這樣。供應鏈，我認為就像很多人所說的那樣，仍然很糟糕，甚至比我們想像的還要糟糕。但是您仍然設法獲得了我所說的在線毛利率，在線毛利率指南。這是否意味著向 ICE6 的混音轉換比您想像的更強大？其次，不相關的是，第四季度股票數量從第三季度下降的驅動因素是什麼？

Yes. So first question, yes, look, 400 basis points was not what we expected on the supply chain drag. That is going to eclipse a $50 million extra cost for us this year. The positive piece of our margin performances, as we said in the script was, ICE6 was over 30% of product revenue for the quarter. So that powerful mix and margin of that product line and vertical integration did help us mitigate some of that supply chain costs and will continue to in Q4 and into 2023. And that same vertical integration in our pluggables as we move into the Metro, with our own pluggables will help us in the future.

是的。所以第一個問題，是的，看，400 個基點並不是我們對供應鏈拖累的預期。這將超過我們今年 5000 萬美元的額外成本。正如我們在腳本中所說，我們利潤率表現的積極部分是，ICE6 佔本季度產品收入的 30% 以上。因此，該產品線和垂直整合的強大組合和利潤確實幫助我們降低了一些供應鏈成本，並將在第四季度和 2023 年繼續這樣做。當我們進入 Metro 時，我們的可插拔產品中同樣的垂直整合，我們的自己的插件將在未來幫助我們。

Yes. And on the share count, it's somewhat of an unusual quarter, because of the new 28 converts, which are an instrument fee, meaning we intend to pay those back in cash, so they are not included in the fully diluted share count. We actually have a bridge for you in the material that's on the website that walks you through the share count calculation. But I can go into more detail later if you want, but that bridge is actually out there. But it's one of the attributes of an instrument fee, you would not include those shares in the fully diluted count.

是的。在股票數量上，這有點不尋常，因為新的 28 次轉換是一種工具費用，這意味著我們打算以現金償還這些，因此它們不包括在完全稀釋的股票數量中。實際上，我們在網站上的材料中為您搭建了一座橋樑，引導您完成份額計數計算。但如果你願意，我可以稍後再詳細介紹，但那座橋實際上就在那裡。但這是工具費的屬性之一，您不會將這些股份包括在完全稀釋的數量中。

Your next question comes from the line of Simon Leopold of Raymond James.

您的下一個問題來自 Raymond James 的 Simon Leopold。

So David, I feel like I heard you say something or suggest something, and I want to just make sure this isn't my imagination running away from, but it sounds like you suggested that you're taking some extra share, and doing a little bit better in part because competitors are having issues, perhaps with supply chain and -- so part of your ability to grow fast in the market is coming from your supply chain execution, relative to others. If you could maybe elaborate on what you were talking about?

所以大衛，我覺得我聽到你說了什麼或建議了什麼，我想確保這不是我的想像，但聽起來你建議你要多分享一些，做一個稍微好一點的部分原因是競爭對手遇到了問題，可能是供應鏈問題，所以你在市場上快速增長的部分能力來自於你的供應鏈執行，相對於其他人。如果你能詳細說明你在說什麼？

No, you actually -- I wasn't intimating or -- that is a fact. So, you got that right. That was a good translation. We are seeing in a number of markets where maybe people have been waiting or had orders placed and they're hitting traffic limits, where they need to bring in an alternative with open line systems and open transponders or lead times on those transponders, given we had planned for a big ramp and wanted to have extra ability to take share, #1. And #2, the vertical integration puts more of that supply chain in our own hands. And so that has provided us in many cases, where we can deliver transponders in 12 weeks or 16 weeks, compared to somebody else that might have been waiting for a couple of quarters or a year.

不，你實際上——我不是在暗示或——這是事實。所以，你說得對。那是一個很好的翻譯。我們在許多市場中看到，人們可能一直在等待或下訂單並且他們正在達到交通限制，他們需要引入開放線路系統和開放轉發器或這些轉發器上的交貨時間的替代方案，因為我們已經計劃了一個大坡道，並希望有額外的能力來分享，#1。 #2，垂直整合讓更多的供應鏈掌握在我們自己手中。因此，在許多情況下，我們可以在 12 週或 16 週內交付轉發器，而其他人可能需要等待幾個季度或一年。

And I guess the follow-on to that is, how sticky is that? Does that reverse at some point when supply chain eases for everybody, or does it give you some advantage?

我想接下來是，這有多粘？當每個人的供應鏈都變得輕鬆時，這種情況會在某個時候逆轉，還是會給你帶來一些優勢？

Well, the way I think about it is, when I talk to our customers, anytime you experience a shock like this, whether it's Y2K or any of the initiatives that have gone across corporations and into boardrooms, supply chain has been a huge discussion in everybody's boardroom. And so I think people have just looked at the concentration on where they have their spend in each category including optical. And as somebody who is a share taker, it provides us for more opportunity, where maybe some of the customers have been more concentrated, not just temporarily but permanently.

嗯，我的想法是，當我與我們的客戶交談時，每當你遇到這樣的衝擊時，無論是千年蟲還是任何跨越公司和進入董事會的舉措，供應鏈一直是一個巨大的討論每個人的會議室。所以我認為人們只是關注他們在包括光學在內的每個類別中的支出。作為一個分享者，它為我們提供了更多的機會，其中一些客戶可能更加集中，不僅僅是暫時的，而是永久的。

And then just a quick clarification. I think in the past you've given us the target for ICE6 to be 20% to 25% of revenue, I believe, for the full year and given the 30% you achieved in this quarter, and your outlook for the fourth quarter, do you have a revision to the full-year target? Was it still that 20% to 25%?

然後只是一個快速的澄清。我認為過去你給我們的 ICE6 目標是全年收入的 20% 到 25%，我相信，鑑於你在本季度實現的 30%，以及你對第四季度的展望，你對全年目標有修改嗎？還是那個20%到25%嗎？

No, it's still 20% to 25%, and then somebody had the question of full year guidance. That's why on this call we also mentioned we're having our Investor Day, March 7th at OFC. So we'll try to give you all those metrics like we did. I think for this year, we did a nice job saying hey, here's what we're going to ramp ICE6 to, here's what's going to happen with pluggables, here's what's going to happen with operating margins, here is what we believe the supply chain drag will be. We will give the same kind of detail on March 7th in San Diego.

不，它仍然是 20% 到 25%，然後有人提出了全年指導的問題。這就是為什麼在這次電話會議上我們還提到我們將於 3 月 7 日在 OFC 舉行投資者日。因此，我們將嘗試像我們一樣為您提供所有這些指標。我認為今年我們做得很好，嘿，這就是我們將 ICE6 提升到的程度，這就是可插拔設備會發生什麼，這就是營業利潤率會發生什麼，這就是我們對供應鏈的看法拖會。我們將於 3 月 7 日在聖地亞哥提供同樣的細節。

Your next question comes from the line of Meta Marshall with Morgan Stanley.

您的下一個問題來自摩根士丹利的 Meta Marshall。

Maybe just bearing in on the supply chain bit for a minute. Just what form did kind of a more complicated supply chain take this quarter, just trying to get a sense of where the products that became -- were there different products that became unavailable during the quarter, were there just higher broker fees than expected? Just a little bit of context about kind of what happened versus what you were expecting.

也許只是在供應鏈上稍作停留。本季度更複雜的供應鏈採取了何種形式，只是試圖了解產品的來源——本季度是否有不同的產品無法使用，是否只是經紀人費用高於預期？只是關於發生的事情與您所期望的事情的一點背景。

And then second, the international business was obviously a little bit weaker. I understand that there is lumpiness and project-based stuff there. But you did mention [macro] in your script. And so just wondering, if kind of the strengthening dollar had any impact with kind of your European customer base? That's it from me.

其次，國際業務明顯弱了一點。我知道那裡有塊狀和基於項目的東西。但是您確實在腳本中提到了[宏]。所以只是想知道，美元走強是否對您的歐洲客戶群有任何影響？這就是我的。

No. Both excellent questions to go through. I think on the macro basis, back to demand, so far we haven't seen anything significant. We're service providers in general. Maybe I'll make a comment about spend. I think ICPs are continuing to grow in their datacenter. I think you saw what Meta's CapEx numbers are. We expect datacenter growth to continue and the subsea cables to continue. We have very good insight into that, as we've been partnering with our client base, because those are long projects when you're planting cables under the sea, we get to see those. So that gives us a little bit more confidence that our CapEx will be prioritized.

不。這兩個很好的問題都需要解決。我認為在宏觀基礎上，回到需求，到目前為止我們還沒有看到任何重要的東西。我們一般是服務提供商。也許我會對支出發表評論。我認為 ICP 在他們的數據中心中繼續增長。我想你看到了 Meta 的資本支出數字是多少。我們預計數據中心將繼續增長，海底電纜將繼續增長。我們對此有很好的洞察力，因為我們一直在與我們的客戶群合作，因為當您在海底種植電纜時，這些都是長期項目，我們可以看到這些。因此，這讓我們更有信心優先考慮我們的資本支出。

When you think of the CSPs, in prepared remarks from the largest CSPs, most of them have said look they are going to continue to spend CapEx primarily focused on fiber, on the implementation of fiber and 5G. 5G tends to be a very radio heavy first implementation, and so that means the intensity of the spend we're seeing is really on that fiber implementation. If you've seen Corning announce too -- they're a very conservative company. They announced 2 factories, 1 in Arizona, 1 in Warsaw, to actually make fiber, which means this is going to be a continued trend, be a little bumpy with the economy, but the investment thesis is strong there.

當您想到 CSP 時，在最大的 CSP 準備好的評論中，他們中的大多數人都表示，他們將繼續將資本支出主要集中在光纖、光纖和 5G 的實施上。 5G 往往是一個非常無線電重的首次實施，因此這意味著我們看到的支出強度實際上是在光纖實施上。如果你也看到康寧宣布——他們是一家非常保守的公司。他們宣布了 2 家工廠，1 家在亞利桑那州，1 家在華沙，實際生產纖維，這意味著這將是一個持續的趨勢，經濟會有點顛簸，但那裡的投資論點很強。

From a supply chain perspective, I'll tell you this; supply chain costs went up in terms of expedite fees and transportation fees, big time broker fees. Obviously, we grew product revenue 17% year-over-year. So in order to do that, we had to make our supply available. The good news was, it was also a large portion of our ICE6, which is a lot more under our own vertical integration, so a little bit of our own control. We continue to see again, this 8 to 12 parts -- or 8 to 12 vendors that are still ramping up their fab capacities in older geometries and analog technologies. Those still are biting on the industry and we expect those to ease in the back half of next year.

從供應鏈的角度來看，我會告訴你這個；供應鏈成本在加急費和運輸費、大筆經紀人費方面有所上升。顯然，我們的產品收入同比增長了 17%。因此，為了做到這一點，我們必須提供我們的供應。好消息是，它也是我們 ICE6 的很大一部分，它在我們自己的垂直整合下更多，所以我們自己控制了一點。我們繼續看到，這 8 到 12 個部件——或者說 8 到 12 家供應商仍在提高他們在舊幾何形狀和模擬技術方面的晶圓廠產能。這些仍然在咬這個行業，我們預計這些將在明年下半年緩解。

Yeah. And on the FX impact, on both a quarter-over-quarter and a year-over-year, I would say modest on the revenue. Certainly quarter over quarter, call it $5 million-ish, but we have a natural hedge in terms of our expenses there, so net-net, it was almost neutral to $1 million impact, so not anything that would have (inaudible) change.

是的。至於外匯對季度環比和同比的影響，我想說的是收入適度。當然，季度環比，稱之為 500 萬美元左右，但我們在那裡的支出方面有一個自然的對沖，所以淨額，它對 100 萬美元的影響幾乎是中性的，所以不會有任何（聽不清）變化。

Your next question comes from the line of Fahad Najam with Loop Capital.

您的下一個問題來自 Loop Capital 的 Fahad Najam。

A clarification first. David, if you guys are taking share then why are you still maintaining your ICE6 revenue contribution to be 20% to 25%. Is it that the most of the shares are not in ICE6, they're more in legacy products?

先澄清一下。大衛，如果你們要分享，那為什麼還要將 ICE6 的收入貢獻保持在 20% 到 25% 之間。是不是大部分份額不在 ICE6 中，而更多的是在遺留產品中？

No. I mean, I think if you do the weighted average math, I mean again you follow this stuff probably even closer, that when I look at the competition, most of the competition on a year-over-year basis is down in terms of revenue and significantly down in terms of their gross profit percentages. So all I know is, we're up in revenue by 9%, up in product by 17% and I don't believe the competition is there. So when the -- [Vias] and others report their market share gains, if the major competitors are down and we're up, I think we'll be gaining share and that's, by the way, both on our long-haul ICE6, as well as in the Metro, and we haven't even unleashed our own pluggables yet.

不。我的意思是，我認為如果你做加權平均數學，我的意思是你可能更接近這個東西，當我看比賽時，大部分比賽的年比都在下降收入和毛利潤百分比顯著下降。所以我所知道的是，我們的收入增長了 9%，產品增長了 17%，我不相信競爭存在。因此，當 - [Vias] 和其他公司報告他們的市場份額增加時，如果主要競爭對手下降而我們上升，我認為我們將獲得份額，順便說一下，這都是在我們的長途 ICE6 上，以及在 Metro 中，我們甚至還沒有發布我們自己的插件。

Got it. If I take a step back to the real question, if I look at your R&D spending, you managed to bring in down sequentially, even in the face of worsening inflation and you mentioned that you plan on taking a leadership role in 800 gig VR developments. You've got a number of -- ahead of you, yet your R&D spend is coming down in the face of an adverse inflationary environment. How are you managing to sustain this R&D and still think that you're going to keep ahead of competition?

知道了。如果讓我回到真正的問題，如果我看看你們的研發支出，即使在通貨膨脹惡化的情況下，你們也設法連續下降，並且您提到您計劃在 800 gig VR 開發中擔任領導角色.你有很多——在你面前，但面對不利的通貨膨脹環境，你的研發支出正在下降。您是如何維持這種研發並仍然認為您將在競爭中保持領先的？

Yeah, we're vertically integrated. We develop our own photonically integrated circuits. Those same integrated circuits can do big transponders like ICE6 800 gig or 1.6 terabit, 2/800 gig which is what our product is. As well as that's how we build the Transmit Received Optical Assembly or the TROSA, which is the largest portion of a pluggable. So that kind of platform development allows us to be efficient in our development.

是的，我們是垂直整合的。我們開發自己的光子集成電路。這些相同的集成電路可以做大型轉發器，如 ICE6 800 gig 或 1.6 太比特、2/800 gig，這就是我們的產品。這也是我們構建傳輸接收光學組件或 TROSA 的方式，它是可插拔的最大部分。因此，這種平台開發使我們能夠高效地進行開發。

Now on the other side of that, we have had some relief, because we do some of our development for some of our system software and others in FX positive jurisdictions, but not a tremendous amount. Next year, again, we've said we will continue to invest in R&D in those critical areas and we've taken our product portfolio in a much more simplified set, as well as we're going to expand our go-to-market investments. Why? Again, if you're going to gain share, it's not just about having the product, but it's about being there to be able to have the relationships and sales channel with the customer.

現在，另一方面，我們鬆了一口氣，因為我們在外匯積極的司法管轄區為我們的一些系統軟件和其他軟件進行了一些開發，但數量並不多。明年，我們再次表示，我們將繼續投資於這些關鍵領域的研發，我們已經將我們的產品組合簡化了很多，並且我們將擴大我們的市場範圍投資。為什麼？同樣，如果您要獲得份額，不僅僅是擁有產品，還在於能夠與客戶建立關係和銷售渠道。

I realize you're going to give your full-year outlook for '23 at the OFC, but that does lead to the question, do you think that the intensity of your spending on R&D and sales and marketing is likely to increase, as you look at all these projects and your ambition on sustaining leadership role?

我意識到你將在 OFC 給出 23 年的全年展望，但這確實引發了一個問題，你認為你在研發、銷售和營銷方面的支出強度可能會增加嗎？看看所有這些項目以及您對維持領導角色的雄心壯志嗎？

Yes. I think, overall, you're going to see an increase -- by the way, there's some inflation going on, too, as well. So, yeah, both in terms of where we invest, as well as the inflationary impact, good news being operating leverage, good news being Nancy mentioned earlier, that we intend to grow faster than the market, good news is you'll probably see margin accretion on the gross level and the bottom line level and that's what we've been doing for the last 3 years and that's what we intend to do. We're just not ready in this market to nail down the specific numbers, but we feel good about our position growing faster than the market.

是的。我認為，總體而言，你會看到增長——順便說一下，也會出現一些通貨膨脹。所以，是的，就我們投資的地方以及通脹影響而言，好消息是經營槓桿，好消息是前面提到的南希，我們打算比市場增長得更快，好消息是你可能會看到毛利率和利潤水平的增長，這就是我們過去 3 年一直在做的事情，也是我們打算做的事情。我們只是還沒有準備好在這個市場上確定具體數字，但我們對我們的地位比市場增長得更快感到滿意。

Your next question comes from the line of Jim Suva with Citigroup.

您的下一個問題來自花旗集團的 Jim Suva。

In your prepared comments, you talked about supply chain. Have they actually gotten worse then or better and I'm just trying to get a better understand -- or is it just like different things that -- final parts?

在您準備好的評論中，您談到了供應鏈。他們實際上變得更糟還是更好，我只是想更好地理解 - 還是就像不同的事情一樣 - 最後部分？

Yeah. Both. The cost went up in Q3 more than we expected by 100 basis points and that was just in order to, again, late breakers that we needed to expedite, pay expedite fees to get through, to make sure we meet the big demand of that 17% product revenue growth. We did see some lightening of the overall supply chain environment, like general components are beginning to free up, as the consumer demand lightens, and as people work through what was the backlogs with a more robust economy. We still see where there was expansionary requirements again, and a very focused number, an acute number of components for line systems and other things, with older geometries that are in the process of building out that capacity, and we expect that capacity to be in place, and effective for us so that -- call it, 3 quarters from now in the back half of next year, we don't see the same dynamic.

是的。兩個都。第三季度的成本比我們預期的高出 100 個基點，這只是為了再次，我們需要加快延遲的斷路器，支付加急費用以確保我們滿足 17 的巨大需求% 產品收入增長。我們確實看到整體供應鏈環境有所緩解，例如通用組件開始釋放，隨著消費者需求的減輕，以及人們在經濟更加強勁的情況下通過積壓工作。我們仍然看到再次出現擴張性需求的地方，以及非常集中的數量，用於線路系統和其他事物的大量組件，以及正在建設該容量的較舊幾何形狀，我們預計該容量將在地方，對我們有效，所以 - 稱之為，明年下半年從現在起的三個季度，我們看不到同樣的動態。

Okay. Then my follow-up is on -- more for Nancy probably, interest expense going forward, is this current run rate that you had this quarter a good number, or the Fed of course increased rates by 75 basis points should we be modeling interest expense upward as we continue on?

好的。然後我的後續行動開始了——對於南希來說可能更多，未來的利息支出，你本季度的當前運行利率是一個不錯的數字，或者如果我們對利息支出進行建模，美聯儲當然會加息 75 個基點隨著我們繼續向上？

No. In fact we're really glad we got the refinance done at the 24 converts when we did, so those interest rates you should keep as they are. The only ebb and flow would be there, is if we utilize the ABL, but that would be on a temporary basis for working capital needs. But as of today and as of the end of the quarter, we don't have anything drawn on that ABL.

不。事實上，我們真的很高興我們完成了 24 位皈依者的再融資，因此您應該保持這些利率不變。唯一的潮起潮落會在那裡，如果我們利用 ABL，但這將是暫時的營運資金需求。但截至今天和本季度末，我們沒有任何關於 ABL 的內容。

Your next question comes from the line of George Notter with Jefferies.

您的下一個問題來自 George Notter 與 Jefferies 的對話。

Hi. I wanted to ask about the mix of vertically integrated products. I think you said the ICE6 was greater than 30%, but do you have an overall number for the mix of vertically integrated products?

你好。我想問一下垂直整合產品的組合。我想你說 ICE6 大於 30%，但你有垂直整合產品組合的總體數字嗎？

Yeah. It was close to 50%.

是的。接近 50%。

Okay. Great. And then also I wanted to ask also about you guys kept referencing the September 24th quarter end, are you suggesting it was a 12-week quarter or was it was indeed a 13-week quarter -- or what's unique about that?

好的。偉大的。然後我還想問一下你們一直在參考 9 月 24 日的季度末，你是在暗示這是一個 12 週的季度還是確實是一個 13 週的季度——或者這有什麼獨特之處？

It was just the timing. It was a 13-week quarter. We are going into a 14-week this quarter. So this quarter will end December 31st.

這只是時機。這是一個為期 13 週的季度。本季度我們將進入 14 週。所以本季度將在 12 月 31 日結束。

Your next question comes from the line of Samik Chatterjee with JP Morgan.

您的下一個問題來自 JP Morgan 的 Samik Chatterjee。

Hi. This is Angela Jin on for Samik Chatterjee. I just had one question, so just thinking ahead to 4Q in 2023, could you maybe rank order how you expect revenue growth to trend for your customer verticals?

你好。這是 Samik Chatterjee 的 Angela Jin。我只有一個問題，所以請考慮到 2023 年第四季度，您能否對您的客戶垂直行業的收入增長趨勢進行排序？

That one is going to be probably pretty tough to do. I will tell you ICPs are going to continue to be very strong for us. I do believe that you'll continue to see, not just in Q4, but next year, Tier 1 service provider U.S. beginning to scale up, as we have a number of certifications underway. But nothing out of the ordinary for Q4, Q1. A lot of that has to do with revenue recognition, when projects get complete and we've contemplated that kind of normalized mix into Nancy's guidance for the quarter.

那可能很難做到。我會告訴你 ICP 將繼續對我們非常強大。我相信您會繼續看到，不僅在第四季度，而且在明年，美國一級服務提供商開始擴大規模，因為我們正在進行多項認證。但 Q4、Q1 並沒有什麼不尋常的地方。這在很大程度上與收入確認有關，當項目完成時，我們已經考慮將這種標準化組合納入南希對本季度的指導。

(Operator Instructions) Your next question comes from the line of Alex Henderson with Needham.

（操作員說明）您的下一個問題來自 Alex Henderson 和 Needham 的台詞。

Great. So I wanted to go back to the comment about $50 million worth of absorbed supply chain cost increases over normal. Certainly, I get that that's the math for this year, but I also understand that prices are going up. So as you look out into the next 3, 4, 5 quarters, will we see when the supply chain improves, that that 400 basis points falls through to the gross margins, or are there price increases that you're anticipating that would cause the effective normalized costs to go up and offset some of that benefit?

偉大的。所以我想回到關於價值 5000 萬美元的吸收供應鏈成本比正常情況增加的評論。當然，我知道這是今年的數學計算，但我也知道價格正在上漲。因此，當您展望未來 3、4、5 個季度時，我們是否會看到供應鏈何時改善，這 400 個基點會下降到毛利率，還是您預期的價格上漲會導致有效的標準化成本上升並抵消部分收益？

Yes, it's a good question. When that happens, our job is to offset it. And our plans -- I think we've mentioned this in prior calls, we've added in $30 million of contemplated excess supply chain costs for next year. So remember we said we thought it would be go from $50 million to $55 million this year to $30 million-ish next year.

是的，這是個好問題。當這種情況發生時，我們的工作就是抵消它。我們的計劃——我想我們在之前的電話會議中已經提到了這一點，我們已經為明年增加了 3000 萬美元的預期超額供應鏈成本。所以請記住，我們說過我們認為它會從今年的 5000 萬美元到 5500 萬美元到明年的 3000 萬美元左右。

But, Alex, you're absolutely right, some suppliers are going to go ahead and up the chip price here or there. Our job is to continue to drive that down. We do have annual cost reduction initiatives with our suppliers that I do expect as the supply chain begins to turn, we can go get those back. We've also made commercial arrangements, i.e., pricing adjustments and things like that in the marketplace. So we're not going to go into -- in detail on this call, that should be able to mitigate. And we'll contemplate all of that into our guidance for next year, when we go through it, March 7th.

但是，亞歷克斯，你是絕對正確的，一些供應商會在這里或那裡繼續提高芯片價格。我們的工作是繼續降低它。我們確實與供應商一起制定了年度成本降低計劃，我確實希望隨著供應鏈開始轉向，我們可以將這些計劃拿回來。我們還做出了商業安排，即在市場上進行定價調整等。所以我們不打算詳細討論這個電話，這應該能夠緩解。我們將在明年 3 月 7 日通過指南時考慮所有這些內容。

Okay. So, conceptually if -- hypothetically we were to see the majority of that 400 basis point hit to gross margins in 3Q, fall out, say, 3 quarters -- as it fall out in the 3rd quarter of next year, would the expected strategy be to take that to the bottom line, or would you take some of that and reinvest it into R&D sales and marketing and other expenses?

好的。因此，從概念上講，如果 - 假設我們將看到 400 個基點中的大部分在第三季度影響毛利率，例如，三個季度下降——就像它在明年第三季度下降一樣，預期的策略會是是把它帶到底線，還是你會把其中的一部分再投資到研發銷售和營銷以及其他費用上？

Yeah, it's a good question that we'll go through, I mean, yeah, conceptually, what we said is...

是的，這是一個很好的問題，我們將通過，我的意思是，是的，從概念上講，我們所說的是......

I am not looking for a forecast.

我不是在尋找預測。

No, no. It's okay. Conceptually, what we said is we are increasing our R&D because we've got this vertically integrated U.S. based, again, asset that we view this vertical integration for 800 gig pluggables, 100 gig pluggables and 400 gig pluggables are going to be pretty powerful. So you will see us continue to invest there, as well as transponders for subsea in long haul, as well as you're going to see a step-up in sales and marketing. And we've never had the confidence to go do that, because honestly the product line has never been a better shape and the industry dynamics have opened and the need for supply chain diversity has never been there.

不，不。沒關係。從概念上講，我們所說的是我們正在增加我們的研發，因為我們擁有這個垂直整合的美國資產，我們認為這種垂直整合 800 gig 可插拔、100 gig 可插拔和 400 gig 可插拔將非常強大。因此，您將看到我們繼續在那裡投資，以及長期用於海底的轉發器，以及您將看到銷售和營銷方面的進步。我們從來沒有信心去做那件事，因為老實說，產品線從未像現在這樣好過，行業動態已經打開，對供應鏈多樣性的需求從未存在過。

So our contemplation is that, yeah we'll continue to grow sales and marketing and R&D while we do that, and we have to continue year after year to expand margin while we do it. And some of that will come from operating leverage, but some of that's going to come from more products vertically integrated. And then in 2024, so, see that I won't give any '23 but I will talk about '24. As the pluggables become more of our Metro platform of our own system products, you're going to see the next kick point of margin there as well, as well as continued operating leverage, but we do have to continue that investment in sales and marketing, as well as R&D. I'd say, sales and marketing with more intensity than R&D though.

所以我們的想法是，是的，在我們這樣做的同時，我們將繼續增加銷售、營銷和研發，我們必須年復一年地繼續擴大利潤率。其中一些將來自運營槓桿，但其中一些將來自更多垂直整合的產品。然後在 2024 年，請注意，我不會給出任何 '23，但我會談論 '24。隨著可插拔產品更多地成為我們自己系統產品的 Metro 平台，您將在那裡看到下一個利潤增長點以及持續的運營槓桿，但我們必須繼續在銷售和營銷方面進行投資，以及研發。我想說的是，銷售和營銷比研發更密集。

Okay. Just one clarification on the R&D comment from earlier. While I guess it's down sequentially and actually down year-over-year, I know you have a lot of prototype costs and things of that sort that caused big pops and big declines when they fall out. As I look at the December quarter, it looks like the spend will go up quite a bit sequentially and I assume that a good chunk of that's in R&D, which would put you at a meaningful increase in R&D for the year. Is that the right way to think about the R&D here for the fourth quarter?

好的。只是對早先的研發評論的一個澄清。雖然我猜它是連續下降，實際上是逐年下降，但我知道你有很多原型成本和類似的東西，當它們失敗時會導致大流行和大衰退。當我查看 12 月季度時，看起來支出將連續增加相當多，我認為其中很大一部分用於研發，這將使您在今年的研發中獲得有意義的增長。這是考慮第四季度研發的正確方式嗎？

It is. It generally trends as you get -- we said we were splitting samples out in the back half of the year and beginning to go through certification. So you nailed it on the head. That happens in Q4. It's not a stark of a increase, as everybody probably expected. Again, we got a little bit of a benefit from FX, but it will continue to increase, as we get into next year, albeit still while we increase our operating income and increase our gross margins for next year.

這是。它通常會隨著您的了解而發展——我們說過我們在今年下半年將樣品分開並開始通過認證。所以你把它釘在了頭上。這發生在第四季度。正如每個人可能預期的那樣，這並不是一個明顯的增長。同樣，我們從外匯中獲得了一點好處，但隨著我們進入明年，它將繼續增加，儘管我們仍然會增加我們的營業收入並增加明年的毛利率。

In Q4 also with commissions with the planned bookings for Q4, you'll also see that step up as well.

在第 4 季度，還有第 4 季度計劃預訂的佣金，您也會看到這一增長。

So commissions during the sales and marketing are [in line though], right?

所以銷售和營銷期間的佣金[雖然]是一致的，對吧？

They are.

他們是。

Correct. But we are talking about OpEx in total.

正確的。但我們談論的是總體上的運營支出。

Yeah. Okay. Perfect. I understand. Thanks.

是的。好的。完美的。我明白。謝謝。

There are no further questions. I'd like to turn the call back to CEO, David Heard, for closing remarks.

沒有進一步的問題。我想把電話轉回給首席執行官戴維·赫德 (David Heard) 來做閉幕詞。

No, I appreciate it. Really good solid questions. I know it's a difficult market out there. A lot going on. So we're trying to keep things relatively concise. Overall, we had a quarter that beat expectations and delivered 17% product revenue growth, which is tremendous given the supply chain environment, and our Q4 guidance met the midpoint of prior expectations.

不，我很感激。非常好的紮實的問題。我知道這是一個艱難的市場。發生了很多事情。所以我們試圖讓事情保持相對簡潔。總體而言，我們有一個季度超出預期並實現了 17% 的產品收入增長，考慮到供應鏈環境，這是巨大的，我們的第四季度指導達到了先前預期的中點。

So our heads down and get ready to execute to that. We delivered 3 strong quarters for the first 3 quarters of the year and a tough macro backdrop. Total revenue growth while the services drag was there, was 6% still in that environment with total product revenue growing at 11%. We've expanded our operating margins like you saw this last quarter, over double year-over-year while we do that. So we're really trying to drive that efficiency while we do that and drive things to the bottom line.

所以我們低下頭，準備好執行它。我們在今年前 3 個季度和艱難的宏觀背景下實現了 3 個強勁的季度。在存在服務拖累的情況下，總收入增長仍為 6%，產品總收入增長 11%。就像您在上個季度看到的那樣，我們已經擴大了我們的營業利潤率，在我們這樣做的同時，同比增長了一倍多。所以我們真的在努力提高效率，同時我們這樣做並將事情推向底線。

So look, our strategy is working. We are laser focused, no pun intended, on driving towards that dollar per share of earnings power and that makes lots of things go well, and I really want to thank the Infinera team for their dedication. I mean, we've gone through pandemics. We've gone through wars. We've gone through -- we are now in a recession that we're going through. But the great news is there's demand for what we do. The CapEx seems to be very focused on fiber and fiber build outs. That's our specialty.

所以看，我們的策略正在奏效。我們專注於推動每股盈利能力達到 1 美元，這讓很多事情進展順利，我真的要感謝 Infinera 團隊的奉獻精神。我的意思是，我們經歷過流行病。我們經歷過戰爭。我們已經經歷了——我們現在正處於我們正在經歷的衰退中。但好消息是對我們所做的事情有需求。資本支出似乎非常關注光纖和光纖擴建。那是我們的專長。

We have vertical integration that matters there, and we've got an environment where Huawei is stepping away. There is an open architecture for us to insert to. So you're going to see our heads down -- call it helmets on, mouth pieces in and heads down to execute. And look, we look forward to dive in deeper into the strategy and answering all the detailed questions you're going to have in our Investor Day on March 7. So we hope to see you there at OFC in San Diego.

我們在那裡有很重要的垂直整合，我們有一個華為正在退出的環境。有一個開放的架構供我們插入。所以你會看到我們低著頭——戴上頭盔，戴上嘴巴，低著頭執行。看，我們期待在 3 月 7 日的投資者日更深入地研究該策略並回答您將遇到的所有詳細問題。因此，我們希望在聖地亞哥的 OFC 見到您。

Thanks. Take care of yourselves and your families. We appreciate your support.

謝謝。照顧好自己和家人。我們感謝您的支持。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。