Infinera Corp (INFN) 2023 Q3 法說會逐字稿

Hello. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Infinera Corp. Q3 2023 Earnings Call. (Operator Instructions) Amitabh Passi, Head of Investor Relations, you may begin.

你好。我叫克里斯，今天我將擔任您的會議主持人。現在，我歡迎大家參加 Infinera Corp. 2023 年第三季財報電話會議。 (操作員指示) 投資者關係主管 Amitabh Passi，您可以開始啦。

Thank you, Chris, and good afternoon, everyone. Welcome to Infinera's third quarter fiscal 2023 conference call. A copy of the press release issued by Infinera today is available on the Investor Relations section of the website. Additionally, this call is being recorded and will be available for replay from our website.

謝謝你，克里斯，大家下午好。歡迎參加 Infinera 2023 財年第三季電話會議。 Infinera 今天發布的新聞稿副本可在網站的「投資者關係」部分查閱。此外，本次通話正在錄音，可在我們的網站上重播。

Today's call will include projections and estimates that constitute forward-looking statements, including, but not limited to, statements related to the accounting and financial matters referenced in the press release, current Form 10 -- 8-K and notification of late filing that we'll file today. Our business plans, product development and growth opportunities, including progress against strategic priorities, including with respect to vertical integration and its anticipated benefits, trends, competition and customers.

今天的電話會議將包括構成前瞻性陳述的預測和估計，包括但不限於與新聞稿中提及的會計和財務事項相關的陳述、當前的 10-8-K 表格和我們今天將提交的延遲提交通知。我們的業務計劃、產品開發和成長機會，包括策略重點的進展，包括垂直整合及其預期收益、趨勢、競爭和客戶。

Furthermore, expectations regarding the macroeconomic environment, expectations regarding our inventory levels and industry-wide CapEx dynamics, expectations regarding our subsystems group and its impact on our financial results, expectations regarding potential governmental funding, projected year-over-year drivers of our key financial performance metrics, expectations regarding our future performance, revenue growth, margin expansion, generation of cash flow from operations and EPS expansion and a preliminary financial outlook for the fourth quarter of 2023.

此外，對宏觀經濟環境的預期、對我們的庫存水平和全行業資本支出動態的預期、對我們的子系統組及其對我們的財務結果的影響的預期、對潛在政府資金的預期、我們關鍵財務業績指標的預計同比驅動因素、對我們未來業績的預期、收入增長、利潤率擴大、經營活動現金流的預計同比驅動因素、對我們未來業績的預期、收入增長、利潤率擴大、經營活動現金流的預計和每股預期 2023 年的初步經濟。

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 31, 2022, as filed with the SEC on February 27, 2023, and in our quarterly report on Form 10-Q for the quarter ended July 1, 2023, as filed with the SEC on August 9, 2023, as well as subsequent reports filed with or furnished to the SEC from time to time. 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.

這些聲明受到風險和不確定性的影響，可能導致 Infinera 的表現與管理層目前的預期有重大差異。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 2023 年 2 月 27 日向美國證券交易委員會提交的截至 2022 年 12 月 31 日的年度報告 10-K 表和我們於 2023 年 8 月 9 日向美國證券交易委員會提交的截至 2023 年 7 月 1 日的季度報告 10-Q 表以及後續不時向美國證券交易委員會提交或提供的報告中所述的風險因素。請注意，所有聲明均截至今日為止，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召開日後可能出現的事件或情況的義務。

Today's conference call includes references to non-GAAP financial measures. Pursuant to Regulation G, we've provided a recon of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings press release for this quarter, which is available on the Investor Relations section of our website.

今天的電話會議提到了非公認會計準則財務指標。依照 G 規則，我們在本季度收益新聞稿中提供了這些非 GAAP 財務指標與最直接可比較的 GAAP 財務指標的對照，可在我們網站的「投資者關係」部分查閱。

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

最後，提醒一下，今天我們會留出充足的時間進行問答，因此請大家將提問和後續問題限制在一個範圍內。

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

現在我將電話轉給我們的執行長戴維·赫德 (David Heard)。

Thanks, Amitabh. Good afternoon, and thanks for joining us today. I'll begin with the highlights from our preliminary third quarter results and then turn the call over to Nancy to cover the preliminary financial details of our third quarter performance and the outlook for the fourth quarter and the items referenced in the press release and Form 8-K we filed earlier this afternoon.

謝謝，阿米塔布。下午好，感謝您今天加入我們。我將首先介紹我們第三季度初步業績的亮點，然後將電話轉給南希，介紹我們第三季度業績的初步財務細節和第四季度的展望，以及我們今天下午早些時候提交的新聞稿和 8-K 表中提及的項目。

Before I jump into the details of the quarter, I want to pause, take a step back and focus on our quarterly accomplishments at a high level. Overall, the third quarter was another solid quarter for us in which all preliminary financial metrics, revenue growth, margin, operating margin and EPS are expected to exceed the midpoint of our outlook range.

在介紹本季的細節之前，我想先暫停一下，回顧一下，從高層次上介紹我們本季的成就。總體而言，第三季度對我們來說又是一個穩健的季度，所有初步財務指標、收入成長、利潤率、營業利潤率和每股盈餘預計都將超過我們預期範圍的中點。

We delivered strong bookings with a book-to-bill ratio above 1. We continue to land new Tier 1 design wins for our Systems business. We won additional orders for our Subsystems business and are shipping our first vertically integrated metro systems this quarter, all while we expanded profitability on a year-over-year basis.

我們實現了強勁的訂單量，訂單出貨比超過了 1。我們的子系統業務贏得了額外的訂單，並將於本季度交付我們的第一批垂直整合的城域系統，同時我們的盈利能力也同比有所提高。

Furthermore, as we look ahead to Q4, we're forecasting growth to be generally in line with the consensus view. While capital markets and macroeconomic conditions have been challenging, we've been keeping our heads down and remaining focused on executing our plan. For the full year of 2023, we currently project that we're still on track to grow revenue and deliver our sixth consecutive year of revenue growth, expand operating profit and EBITDA and drive greater than a 25% improvement in earnings per share, which would represent our fourth consecutive year of significant EPS expansion. These accomplishments directly reflect the strong execution against the strategy we laid out in our past 2 Analyst Days and add to our track record of doing what we say we're going to do.

此外，展望第四季度，我們預測成長將與普遍預期基本一致。儘管資本市場和宏觀經濟條件充滿挑戰，但我們一直保持低調並專注於執行我們的計劃。對於 2023 年全年，我們目前預計我們仍有望實現收入成長並連續第六年實現收入成長，擴大營業利潤和 EBITDA，並推動每股收益成長超過 25%，這將是我們連續第四年實現每股收益大幅成長。這些成就直接反映了我們在過去兩次分析師日中所製定的策略的強勁執行力，也增強了我們說到做到的記錄。

Getting into some of the specifics of the quarter. Q3 marked the 14th quarter out of the last 15, which we believe we have met or exceeded our outlook range. Bookings in the quarter were up sequentially and on a year-over-year basis with most of the sequential growth driven by customers in EMEA and the Americas. On a year-to-date basis through Q3 and compared to the same period last year, we expect to report growth in revenue, expanded gross margin, increased operating margin and improved EBITDA.

了解本季的一些具體情況。第三季度是過去 15 個季度中的第 14 個季度，我們認為我們已經達到或超過了我們的預期範圍。本季的預訂量環比和同比增長，大部分環比增長是由歐洲、中東和非洲地區以及美洲地區的客戶推動的。與去年同期相比，截至第三季度，我們預期營收將成長、毛利率將擴大、營業利潤率將提高、EBITDA 將改善。

Traction across our portfolio remained strong in the quarter, and I'd like to touch on some of the highlights, starting with our Systems group. First, we won new strategic deals globally, including wins with 2 Tier 1 service providers in Europe, several subsea consortium and an award to modernize and expand a nationwide network for a Tier 1 operator in Asia Pacific. The wins in Europe and subsea are especially noteworthy as these are new customer logos where we have no incumbency.

本季度，我們整個投資組合的吸引力依然強勁，我想談談一些亮點，首先從我們的系統部門開始。首先，我們在全球範圍內贏得了新的戰略交易，包括與歐洲兩家一級服務提供商、數家海底財團的合作，以及為亞太地區一家一級運營商現代化和擴展全國網絡的合約。在歐洲和海底領域的勝利尤其值得注意，因為這些都是我們尚未涉足的新客戶。

Second, we continued our momentum with U.S. hyperscalers with year-over-year growth in both revenue and bookings. The strength in this customer segment was broad-based spanning multiple customers' applications and Infinera products.

其次，我們持續維持與美國超大規模企業的合作勢頭，營收和訂單量均較去年同期成長。該客戶群的優勢廣泛，涵蓋多個客戶的應用程式和 Infinera 產品。

And finally, we booked our first set of orders and recognized revenue from the metro win we referenced during last quarter's earnings call. As a reminder, this is a turnkey award with a major U.S. service provider, which includes our GX Metro platform, along with our software suite and support services.

最後，我們收到了第一批訂單，並確認了我們在上個季度的財報電話會議上提到的地鐵勝利帶來的收入。提醒一下，這是與美國一家主要服務提供商簽訂的交鑰匙合同，其中包括我們的 GX Metro 平台以及我們的軟體套件和支援服務。

In our Subsystems group, a few noticeable accomplishments were: first, both the CFP2 and QSFP-DD versions of our 400-gig ICE-X pluggables are now commercially available. These 2 form factors give us flexibility of integrating our pluggables in our own metro platforms as well as in third-party hosts like routers and switches. In Q3, we received our first set of vertically integrated orders for our ICE-X pluggables and are in the process of shipping our first metro systems with our own pluggables this quarter. This is a significant milestone and accomplishment for us and is consistent with the expectations we laid out in our Investor Day. We expect margin benefits from our own vertically integrated metro platform to begin in 2024.

在我們的子系統組中，取得了一些顯著的成就：首先，我們的 400gig ICE-X 可插拔產品的 CFP2 和 QSFP-DD 版本現在都可以商業化使用。這兩種外形尺寸使我們能夠靈活地將可插拔設備整合到我們自己的城域平台以及路由器和交換器等第三方主機中。在第三季度，我們收到了第一批 ICE-X 可插拔設備的垂直整合訂單，並且本季度正在向我們的首批配備我們自己的可插拔設備的地鐵系統發貨。這對我們來說是一個重要的里程碑和成就，並且與我們在投資者日提出的期望一致。我們預計，我們自己的垂直整合地鐵平台的利潤效益將從 2024 年開始。

Second, we remain on track to deliver the highest performing and lowest power 800-gig pluggable that will leverage 3-nanometer technology and enable our customers to reach greater distances and unmatched performance and economics, which also has landed us our first set of 800-gig component orders.

其次，我們將繼續按計劃提供性能最高、功率最低的 800G 可插拔產品，該產品將利用 3 奈米技術，使我們的客戶能夠達到更遠的距離以及無與倫比的性能和經濟性，這也為我們帶來了第一批 800G 組件訂單。

And lastly, we're excited to see 4 new members of the Open XR Forum in the quarter. We've built a solid pipeline for both pluggables and components and received additional purchase orders spanning the entire portfolio. As our Subsystems business expands, we expect to benefit from higher margins from both the vertical integration of our metro portfolio, as I described earlier, and from the incremental operating leverage as we ramp the sales of external pluggables.

最後，我們很高興看到本季 Open XR 論壇加入了 4 位新成員。我們為可插拔產品和組件建立了堅實的管道，並收到了涵蓋整個產品組合的額外採購訂單。隨著我們的子系統業務的擴展，我們期望從城域產品組合的垂直整合（如我之前所述）和隨著外部可插拔產品銷售的提高而增加的營運槓桿中獲益。

In addition, we are continuing to pursue government funding available at both the state and Federal levels via programs like the CHIPS Act to continue to supply the U.S.-made optical semiconductors to secure critical supply chains. These issues are of increasing importance to our customers and as a company with U.S.-based optical semiconductor fabrication and advanced test and packaging, we believe we are well positioned for this opportunity.

此外，我們將繼續透過《CHIPS法案》等項目尋求州和聯邦政府的資助，以繼續供應美國製造的光學半導體，確保關鍵供應鏈的安全。這些問題對我們的客戶來說越來越重要，作為一家在美國擁有光學半導體製造和先進測試與封裝業務的公司，我們相信我們已準備好抓住這個機會。

In closing, my confidence in our strategy, portfolio and execution remains high as evidenced by our market share gains and financial progress over the past few years. In the short term, our customers are still going through a period of inventory digestion and remain cautious about spending in a recessionary environment. Our job in this environment is to focus on the highest priority spend areas which are broad fiber deployment, data center build-outs and new applications inside the data center, while taking more than our fair share of orders and managing spending tightly.

最後，我對我們的策略、投資組合和執行仍然充滿信心，這從我們過去幾年的市佔率成長和財務進步中可以看出。短期內，我們的客戶仍處於庫存消化期，在經濟衰退的環境下仍對支出持謹慎態度。在這種環境下，我們的工作是集中於最優先的支出領域，即廣泛的光纖部署、資料中心建置和資料中心內的新應用，同時承接超過我們應得份額的訂單並嚴格管理支出。

In the long term, demand for bandwidth continues to grow as hyperscalers accelerate the rollout of artificial intelligence and machine learning workloads and service providers drive fiber deeper into networks pushing 100-gig to the edge, 400-gig in the metro and 800-gig in the core. It's apparent that the growth inside the data center over the next few years is creating new opportunities for our business. Clearly, coherent optical technologies and vertical integration are becoming more important than ever.

從長遠來看，隨著超大規模企業加速推出人工智慧和機器學習工作負載，以及服務供應商將光纖深入網路中，將 100Gb/s 推向邊緣，將 400Gb/s 推向城域，將 800Gb/s 推向核心，對頻寬的需求將繼續增長。顯然，未來幾年資料中心內部的成長將為我們的業務創造新的機會。顯然，相干光技術和垂直整合變得比以往任何時候都更加重要。

Our guiding principles for the company remain unchanged and centered on continuing to expand market share in our Systems business across long-haul, subsea and metro, vertically integrating our metro portfolio with our own pluggables, which will expand margins, ramping up external sales of our pluggables, driving leverage in our business model and meaningfully expanding earnings per share.

我們對公司的指導原則保持不變，仍然是圍繞繼續擴大我們在長途、海底和城域系統業務的市場份額，將我們的城域產品組合與我們自己的可插拔產品垂直整合，這將擴大利潤率，增加我們可插拔產品的外部銷售，提高我們商業模式的槓桿作用，並顯著提高每股收益。

I'd like to thank the Infinera team and their dedication and unwavering commitment to our customers and one another and for continuing to deliver on innovation that matters. I'd also like to extend my thanks to our partners, customers and shareholders for their ongoing support. Finally, my thoughts [then] first [go out] to the people of the Ukraine and Middle East who are suffering through these very unthinkable times.

我要感謝 Infinera 團隊，感謝他們對我們的客戶和彼此的奉獻和堅定承諾，以及他們不斷實現重要的創新。我也要向我們的合作夥伴、客戶和股東的持續支持表示感謝。最後，我先向正在經歷難以想像的苦難的烏克蘭和中東人民表示慰問。

I'd now like to hand the call over to Nancy to cover the preliminary financial details of the quarter and our outlook. Nancy?

現在，我想將電話交給南希，介紹本季的初步財務細節和我們的展望。南希？

Thanks, David. Good afternoon, everyone. I will begin by covering our preliminary third quarter results and then provide a preliminary outlook for the fourth quarter. For your reference, we have included a GAAP to non-GAAP reconciliation of our preliminary financials in our press release. As a reminder, any financial commentary or metrics provided today are based on our preliminary non-GAAP results.

謝謝，大衛。大家下午好。我將首先介紹我們第三季的初步業績，然後提供第四季的初步展望。供您參考，我們在新聞稿中提供了初步財務資料的 GAAP 與非 GAAP 對帳表。提醒一下，今天提供的任何財務評論或指標均基於我們的初步非 GAAP 結果。

Before I review our third quarter results, I'd like to provide some context on why we are providing ranges today and why the filing of our 10-Q is delayed as noted in the 2 SEC filings we made this afternoon.

在回顧我們的第三季業績之前，我想先解釋為什麼我們今天提供業績範圍，以及為什麼我們的 10-Q 報告的提交被推遲，正如我們今天下午提交給美國證券交易委員會的兩份文件中所述。

During Q3, our external auditors informed us of a routine PCAOB inspection of their work papers that randomly included their audit of Infinera's 2022 financial statement. Late in the third quarter, our auditors asked about our method of revenue allocation between products and services and our documentation related to our quota close to cash and inventory cycle.

在第三季度，我們的外部審計師告知我們，PCAOB 對他們的工作文件進行了例行檢查，其中隨機包含了對 Infinera 2022 年財務報表的審計。第三季末，我們的審計師詢問了我們在產品和服務之間的收入分配方法以及與現金配額和庫存週期相關的文件。

As a result, in connection with the quarter end close process, we reexamined the revenue recognition methodology we have been using historically as well as our internal control documentation processes. Subsequently, we have identified 2 material weaknesses in our internal control over financial reporting and have concluded that they were present as of December 31, 2022, and through the first 3 quarters of 2023.

因此，在季度末結帳過程中，我們重新審視了過去使用的收入確認方法以及內部控製文件流程。隨後，我們發現了財務報告內部控制中的 2 個重大缺陷，並得出結論，這些缺陷在 2022 年 12 月 31 日以及 2023 年前三個季度都存在。

Based on our initial evaluation, we expect any adjustments to revenue will be shifts in allocation between revenue that is deferred and revenue that is recognized upon delivery and expect that there will be no lost revenue, only shifts in revenue between accounting periods.

根據我們的初步評估，我們預計對收入的任何調整都將是遞延收入和交付時確認的收入之間的分配轉變，並且預計不會有收入損失，只有會計期間之間的收入轉變。

In addition to providing preliminary ranges for Q3 on our call today, we will also be providing our preliminary outlook for the fourth quarter. The information we are providing reflects our expectations regarding the allocation of revenue under our updated methodology. The scope of this review is limited to the matters I described. Based on the progress we have made in addressing them in a compressed period of time, we would hope to file the 10-Q reasonably promptly.

除了在今天的電話會議上提供第三季的初步範圍外，我們還將提供第四季度的初步展望。我們提供的資訊反映了我們根據更新的方法對收入分配的預期。本次審查的範圍僅限於我所描述的事項。根據我們在壓縮時間內解決這些問題所取得的進展，我們希望能夠合理及時地提交 10-Q 表。

Turning to the performance in the quarter. I am pleased with the continued momentum in our business. Preliminary revenue of $378 million to $392 million is expected to come in above the midpoint of our outlook range. This performance was primarily driven by strength in the Americas and EMEA with both ICP and service provider customers. Geographically, we derived approximately 60% of our Q3 revenue from domestic customers, a level generally consistent throughout the year. There was one ICP customer that accounted for over 10% of our revenue in the quarter.

談到本季的表現。我對我們的業務持續保持良好發展勢頭感到很高興。初步預計收入為 3.78 億美元至 3.92 億美元，高於我們預期範圍的中位數。這項業績主要得益於美洲和歐洲、中東和非洲地區 ICP 和服務供應商客戶的強勁表現。從地理上看，我們第三季約 60% 的收入來自國內客戶，這一水平與全年基本保持一致。有一位 ICP 客戶占我們本季營收的 10% 以上。

Q3 preliminary gross margin of approximately 40% to 42% is expected to be above the midpoint of our outlook range and up on a year-over-year basis. Compared to the prior year, gross margin in the quarter benefited from higher vertical integration, continued relief in supply costs, product mix and ongoing cost improvements and quality initiatives.

預計第三季初步毛利率約為 40% 至 42%，高於我們預期範圍的中點，且較去年同期有所上升。與去年同期相比，本季的毛利率受益於更高的垂直整合度、供應成本的持續緩解、產品組合以及持續的成本改進和品質措施。

Overall, I'm encouraged by the gross margin trend in 2023 with gross margin progressing toward our goal of 40% for the year. This margin expansion supports my confidence in our ability to deliver continued improvement in 2024 and beyond as we vertically integrate our metro portfolio and ramp up our external pluggables revenue.

總體而言，我對 2023 年的毛利率趨勢感到鼓舞，毛利率將朝著我們今年 40% 的目標邁進。隨著我們垂直整合城域產品組合併提高外部可插拔產品收入，利潤率的提高增強了我對我們在 2024 年及以後持續改善的能力的信心。

Preliminary operating margin in the quarter was 4.6% to 8% and above our outlook range. On a year-to-date basis, we expect to deliver higher operating margin compared to the same period last year, benefiting primarily from higher revenue and gross margins. Operating expenses in the quarter of $134 million were below our outlook range of $139 million to $143 million as we tightly manage quarterly spending while continuing to make substantial investments in our subsystems business. The resulting preliminary diluted EPS is expected to be $0.03 to $0.08, also above our outlook range.

本季初步營業利潤率為 4.6% 至 8%，高於我們的預期範圍。從年初至今的數據來看，我們預期營業利潤率將比去年同期更高，主要得益於更高的收入和毛利率。本季的營運費用為 1.34 億美元，低於我們預期的 1.39 億美元至 1.43 億美元範圍，因為我們嚴格管理季度支出，同時繼續對子系統業務進行大量投資。最終的初步攤薄每股收益預計為 0.03 美元至 0.08 美元，也高於我們的預期範圍。

Moving on to the balance sheet and cash flow items. We ended the quarter with $127 million in cash and cash equivalents with no amount drawn on the ABL. From a cash flow perspective, the primary use of cash in the quarter was inventory as we prepare for client deliveries in Q4 and Q1 of '24, while reducing our overall purchase commitments. We believe Q3 marked a peak for our inventory in this cycle, and we plan to generate cash from operations in Q4.

轉到資產負債表和現金流量項目。本季結束時，我們的現金和現金等價物為 1.27 億美元，且未動用任何 ABL 金額。從現金流的角度來看，本季現金的主要用途是庫存，因為我們準備在 24 年第四季和第一季向客戶交付，同時減少我們的整體採購承諾。我們認為第三季是我們此週期庫存的高峰，我們計劃在第四季度從營運中產生現金。

Let me now turn to the outlook for the fourth quarter of 2023. Despite the near-term challenging macro and industry environment, we are planning for sequential revenue growth in Q4, in line with consensus expectations. Our preliminary outlook range for the fourth quarter is revenue of $421 million to $451 million, gross margin of 38% to 41%, operating expenses of $138 million to $142 million and operating margin of 5.5% to 9.5%.

現在，我來談談 2023 年第四季的展望。我們對第四季的初步預期範圍是營收 4.21 億美元至 4.51 億美元，毛利率 38% 至 41%，營運費用 1.38 億美元至 1.42 億美元，營運利潤率 5.5% 至 9.5%。

Below the operating income line, we assume approximately $7 million for net interest expense and approximately $3 million for taxes. Finally, we are anticipating EPS of $0.05 to $0.13 per share, assuming a basic share count of approximately 230 million shares and a fully diluted share count, if profitable, of approximately 260 million shares.

在營業收入線以下，我們假設淨利息支出約為 700 萬美元，稅金約為 300 萬美元。最後，我們預計每股收益為 0.05 美元至 0.13 美元，假設基本股數約為 2.3 億股，如果盈利，完全稀釋股數約為 2.6 億股。

Furthermore, at approximately the midpoint of our outlook range for Q4, the implied expectations for the full year are generally consistent to slightly better than our commentary on last quarter's earnings call. Specifically, for the full year and compared to 2022, we expect to deliver revenue growth, expand gross margin, operating margin and EBITDA and expand non-GAAP EPS by at least 25%.

此外，在我們對第四季度的預期範圍的大約中點處，全年的隱含預期與我們對上個季度的收益電話會議的評論基本一致，甚至略好於此。具體而言，與 2022 年相比，我們預計全年營收將成長，毛利率、營業利潤率和 EBITDA 將擴大，非 GAAP EPS 將擴大至少 25%。

As I close today, I would like to reiterate that I am pleased with our performance year-to-date, especially considering the industry-wide slowdown that we have been experiencing for the past few quarters. Our strategic initiatives are on track, and we should be on pace to deliver our sixth consecutive year of revenue growth and expand gross margin towards 40% for the year and drive a greater than 1,000 basis points of operating margin expansion since 2019.

今天最後，我想重申，我對我們今年迄今為止的表現感到滿意，特別是考慮到過去幾季我們經歷的整個行業的經濟放緩。我們的策略性舉措正在順利推進，我們應該能夠連續第六年實現收入成長，全年毛利率將擴大至 40%，並且自 2019 年以來營業利潤率將擴大 1,000 個基點以上。

Furthermore, we have proactively strengthened our balance sheet by refinancing the majority of our 2024 notes ahead of the continued increase in interest rates. We currently have approximately $19 million of the 2024 convertible notes due upon [maturity] in September of 2024. We remain laser-focused on continuing to drive meaningful EPS expansion and generating free cash flow in the quarters and years ahead.

此外，我們在利率持續上升之前對大部分 2024 年票據進行了再融資，積極加強了我們的資產負債表。我們目前有約 1900 萬美元的 2024 年可轉換票據將於 2024 年 9 月到期。

I would like to thank the Infinera team as well for their continued commitment to innovation and execution and our partners, customers and shareholders for your continued cooperation and support.

我還要感謝 Infinera 團隊對創新和執行的持續承諾，以及我們的合作夥伴、客戶和股東的持續合作與支持。

I'd now like to open up the line for questions.

現在我想開始回答大家的提問。

(Operator Instructions) Our first question is from Ruben Roy with Stifel.

（操作員指示）我們的第一個問題來自 Stifel 的 Ruben Roy。

Nancy, [Just] reading the press release and the comments from the auditors, is there a change in your pricing methodology that's acquired here? And also with your comments regarding Q4 and the guidance, would the guidance have been different without the kind of change in accounting?

南希，[只是]閱讀新聞稿和審計師的評論，你們的定價方法是否改變了？另外，您對第四季和指引有何評論，如果沒有會計方面的改變，指引會有所不同嗎？

First, there's no change in our pricing approach. Our pricing approach has been consistent as for many years now in terms of how we sell our product, sell our technology and work with our customer base. As far as Q4, I mean, the range is -- where we see the range today, it does include the new methodology that we mentioned. But if you look at our preliminary range for Q3, you can see the magnitude of impact from that adjustment is, I would say, limited. So we feel good about the Q4 outlook range today.

首先，我們的定價方式並沒有改變。多年來，我們的定價方法與我們銷售產品、銷售技術以及與客戶群合作的方式始終保持一致。就第四季度而言，我的意思是，範圍是 - 我們今天看到的範圍確實包括了我們提到的新方法。但如果你看看我們第三季的初步範圍，你會發現這次調整的影響幅度是有限的。因此，我們對今天的第四季前景感到樂觀。

And as a follow-up, David. Great to hear about the Subsystems progress. As that progress comes, there's, of course, sort of (inaudible) and this concept of [metro] (inaudible) kind of the [lesion] from possible (inaudible) et cetera. Just wondering if you have an updated thought on how you see that? Clearly, there are reach limitations and the potential that it's not a simple one-to-one replacement, but would just love to hear updated thoughts as you get closer to shipment?

接下來是大衛。很高興聽到子系統的進展。隨著這一進展，當然，會出現某種（聽不清楚）和這種 [metro]（聽不清楚）的 [病變] 概念，可能（聽不清楚）等等。只是想知道您是否對此有了更新的看法？顯然，存在覆蓋範圍的限制，並且可能不是簡單的一對一替換，但是隨著發貨的臨近，您是否希望聽到更新的想法？

Sure. Not every service provider -- and it certainly doesn't follow the same strategy and you need to do web scalers. So our strategy has always been to build the world's best transponders whether they're in an embedded solution to service long-haul subsea or metro high-capacity inside an optical system or whether that's transponders miniaturized inside a pluggable that is able to provide metro reach, and quite frankly, over time, some of the same functionality as in an embedded. So we're on both sides of the equation. They all come back to our core competence of building vertically integrated transponders with our own optical semiconductors.

當然。並非每個服務提供者都如此——而且肯定不會遵循相同的策略，因此您需要執行網路擴充器。因此，我們的策略一直是打造世界上最好的轉發器，無論它們是嵌入式解決方案，用於服務長距離海底或光學系統內部的城域高容量轉發器，還是可插入式小型化的轉發器，能夠提供城域覆蓋範圍，坦白說，隨著時間的推移，它將具有與嵌入式相同的一些功能。因此，我們處於等式的兩邊。它們都回歸到我們的核心競爭力，即利用我們自己的光學半導體建立垂直整合的轉發器。

The next question is from Alexander Henderson with Needham.

下一個問題來自 Needham 的 Alexander Henderson。

So just to be clear, there is no impact on the margin structure at all. No changes in the gross margin as a result of the accounting change. I'm looking at the guide for the gross margins for the third quarter to fourth quarter, it looks we like there's not much real improvement in that margin sequentially. And I would think that would be the case given the ramp of chip production.

所以要先明確的是，這對利潤結構完全沒有影響。會計變更並未導致毛利率改變。我正在查看第三季至第四季的毛利率指南，看起來該利潤率較上季並沒有太大的實際改善。我認為，隨著晶片產量的增加，情況將會如此。

Yes. So a couple of things. If there is an adjustment to revenue, it would be at 100% margin, right? So it would flow straight through to the bottom line. But you're right, there's no change to our overall margin structure. Our target business model remains unchanged, and we're really pleased with the progress we've made in Q3, getting to a [4%] and the handle of gross margin is something we have been driving to for quite some time. So we're very happy to see that. In terms of Q4, yes, there's a certain mix of customers and products. But you're right, there's also the ramp of the new technology. So it's a combination there.

是的。有幾件事。如果收入有調整，那麼利潤率應該是 100%，對嗎？所以它會直接流到底線。但您說得對，我們的整體利潤結構沒有改變。我們的目標商業模式保持不變，我們對第三季的進展感到非常滿意，達到了[4%]的毛利率，這是我們相當長一段時間以來一直努力追求的目標。所以我們很高興看到這一點。就第四季度而言，是的，存在一定的客戶和產品組合。但您說得對，新技術也不斷進步。因此，這是一個組合。

Can you give us any thoughts on whether you're going to be stepping up hiring or reducing hiring as we go into 2024? I realize you haven't done your budget yet, but any commentary along -- granularity around that would be very useful.

您能否告訴我們，在進入 2024 年之際，您是否會加強招募力度還是減少招募？我知道你還沒有做預算，但任何相關的評論——細節都會非常有用。

Yes. I think from an expense and investment perspective, Alex, you've seen over the last couple of quarters, we've really been holding tightly in expense through this kind of climate. It's a little early to be talking about '24. But certainly, we think '24 will have a bit of a lighter front half, heavier back half. We still believe we will grow and the market will grow, and we will grow faster than the market. I don't think we're going to go crazy in terms of adding lots of resources. We're going to continue to try to drive efficiency to really ensure we're getting operating leverage.

是的。我認為從費用和投資的角度來看，亞歷克斯，在過去幾個季度中，您已經看到，在這種環境下我們確實一直在嚴格控制費用。現在談論‘24’還有些早。但可以肯定的是，我們認為 24 年的前半部會比較輕，後半部會比較重。我們依然相信我們會成長，市場也會成長，而且我們的成長速度會比市場更快。我認為我們不會瘋狂地增加大量資源。我們將繼續努力提高效率，以真正確保我們獲得經營槓桿。

So we'll give you a bit more profound detail around 2024 in terms of both what our top line expectations and the expectations for margin and bottom line. Good news on the margin front is we're really seeing the impact that these things can happen as the pluggables continue to ramp up. They will continue to help that margin profile. In the early days, as you just suggested, you're at pre-entitlement periods and for the first quarter or 2, those are not getting at the same volume potential that they will as yet.

因此，我們將為您提供有關 2024 年的更深入的詳細信息，包括我們的營業收入預期以及利潤和淨利潤預期。利潤方面的好消息是，隨著可插拔電源的不斷增加，我們確實看到了這些事情可能產生的影響。他們將繼續幫助提高利潤率。正如您剛才提到的，在早期階段，您處於權益前期，而在第一季或第二季度，這些階段尚未達到目前應有的銷售潛力。

The next question is from Simon Leopold with Raymond James.

下一個問題來自雷蒙德詹姆斯 (Raymond James) 的西蒙利奧波德 (Simon Leopold)。

It looks to me like your ICP business year-to-date is up something on the order of 30% plus and so I get sort of lumpiness quarter-to-quarter. I'm trying to get a better sense of how to think about that particular vertical over the next several quarters next year, however you want to frame it, given I see sort of 2 opposing forces? One is the tough comparison, but 2 is what sounds like stable trends in terms of that group of operators and their spending. Can you help me with that?

在我看來，貴公司的 ICP 業務今年迄今成長了 30% 以上，因此我感覺到季度環比成長存在一定波動。我想更了解明年接下來幾季如何看待這個特定垂直領域，無論你想如何建構它，因為我看到兩種對立的力量？第一，比較起來比較困難；第二，從該組運營商及其支出來看，趨勢聽起來比較穩定。你能幫助我嗎？

Yes. I think I can. But again, I'm not going to lay out complete '24. Look, I think that for the first time in our history, we are engaged with all the major hyperscalers in some way, shape or form. It's up on multiple technology fronts, some unpluggable as well as embedded technologies and software and line systems. So I would expect that when I look at their CapEx, not just from what they're publicly announcing but what we're planning with them for that segment to continue to be robust. Although again, lumpy in how they roll out the quarters, but for full year to be robust in '24 and '25.

是的。我想我可以。但我再說一遍，我不會詳盡地列出『24』。看，我認為，在我們的歷史上，這是我們第一次以某種方式與所有主要的超大規模企業合作。它涉及多個技術方面，包括一些非插拔技術和嵌入式技術、軟體和線路系統。因此，當我查看他們的資本支出時，我預計不僅從他們公開宣布的內容來看，而且從我們與他們一起為該部門製定的計劃來看，資本支出將繼續保持強勁。儘管各季度的業績表現並不理想，但 2024 年和 2025 年全年業績將保持強勁。

And I just want to get a little bit maybe clarification on the accounting weakness that was identified. I just want to get an understanding of what might have changed? Was there something that changed in the accounting team, something that changed that triggered the review? It's sort of the why now?

我只是想稍微澄清一下所發現的會計缺陷。我只是想了解什麼可能改變了？會計團隊是否發生了一些變化，引發了審查？現在這就是原因所在？

So yes, I mean, first of all, no, nothing has changed in terms of the team, and we've been, as you've seen, continuing to improve our processes over time. This was an inspection of our auditor by the PCAOB that was randomly impacting Infinera. Meaning they had an inspection, Infinera's kind of name was drawn, so to speak. The methodology that we use, they had questions about -- in terms of our approach to how we allocate between hardware, software and services. We reviewed some of their questions, some of their suggestions, and we agreed that we needed to make a change to that methodology. But that simply changes quarters in which revenue is recognized. It does not change in total the revenue amount that we will recognize over the life of a contract.

是的，我的意思是，首先，就團隊而言沒有任何改變，而且正如您所看到的，我們一直在不斷改進我們的流程。這是 PCAOB 對我們審計師的一次檢查，對 Infinera 產生了隨機影響。意思是他們進行了檢查，可以說，Infinera 的名字被畫出來了。他們對我們所採用的方法有疑問——關於我們如何在硬體、軟體和服務之間進行分配的方法。我們審查了他們的一些問題和建議，並一致認為需要對該方法做出改變。但這只是改變了確認收入的季度。它不會改變我們在合約有效期間內確認的收入總額。

And as you can see from the range we showed in Q3, it's limited in scope. I mean, in terms of the absolute magnitude you can think of it as 0.25 percentage up to maybe a few percent in any particular period. But we don't expect it to be something that slows us down. We're continuing to execute and operate. We are working through the remaining work that we have to get done with our auditors. And we will drive to file our 10-Q as quickly as possible.

從我們在第三季展示的範圍可以看出，它的範圍是有限的。我的意思是，就絕對量而言，你可以將其視為任何特定時期內的 0.25% 到百分之幾。但我們不希望它成為減慢我們速度的因素。我們將繼續執行和運作。我們正在與審計員一起完成剩餘的工作。我們將盡快提交 10-Q 表。

Yes. That's why we are comfortable with the ranges we put out and putting out our Q4 guidance. But obviously, given this is brought late in the process, Nancy's team has to work through this with the auditors to file the 10-Q. So that's where we're at.

是的。這就是為什麼我們對所製定的範圍和第四季度指引感到滿意。但顯然，由於這個問題在流程的後期才提出，Nancy 的團隊必須與審計師一起解決這個問題，才能提交 10-Q 表。這就是我們現在的狀況。

The next question is from Mike Genovese with Rosenblatt Securities.

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

I mean, really nice results and nice outlook and particularly with the book-to-bill being above 1 in the third quarter. I guess my question is, I mean, particularly, as you mentioned, with competitors or others in the industry seeing weaker trends and you guys coming through here, I'm just wondering -- and the one time [person] -- customer being a web scaler. Are the orders more than normal weighted towards web scale? Or are you also seeing the sort of strength and share gain with traditional telco customers as well?

我的意思是，結果非常好，前景也很好，特別是第三季的訂單出貨比超過 1。我想我的問題在於，我的意思是，特別是，正如你提到的那樣，當競爭對手或業內其他人看到較弱的趨勢並且你們來到這裡時，我只是想知道 - 以及曾經的 [人] - 客戶是網絡擴展者。訂單量是否比平常更傾向於網路規模？或者您也看到了傳統電信客戶的實力和份額成長？

Yes. Thanks for asking the question. So yes, well, certainly, we're doing very well that -- we've covered with the web scalers. I will tell you, we won a couple of new Tier 1 levels in Europe that we have never had before. And so those are nice wins for us. As well as in the metro, you see we continue to make big progress in gaining share. When I look at our G40, G30 platform, our GX platform, and I look at the year-over-year comparables to what we're doing there in terms of product bookings as well as product billings, they are [up] profoundly.

是的。感謝您提問。是的，當然，我們做得很好 - 我們已經涵蓋了網路縮放器。我可以告訴你，我們在歐洲贏得了幾個以前從未有過的一級新頭銜。這對我們來說是巨大的勝利。就像在地鐵中一樣，你會看到我們在獲得市場份額方面繼續取得巨大進步。當我查看我們的 G40、G30 平台和 GX 平台，並查看產品預訂量和產品帳單同比情況時，我發現它們都有大幅增長。

So we are making inroads with service providers in different geos. We talked about India in our last call, in Europe, as well as you saw nice strength in both Europe and Americas this last quarter. So again, the strategy we laid out at our Analyst Day, that 8X4X1 is winning in the core, winning in the metro and then driving to the edges what we got our heads down, and we're executing to.

因此，我們正在與不同地區的服務提供者取得合作。我們在上次電話會議中討論了印度和歐洲的情況，您也看到了上個季度歐洲和美洲都表現出色。因此，我們在分析師日上提出的策略是，8X4X1 是在核心地區取勝，在大都市取勝，然後將注意力集中到邊緣地區，我們正在努力執行。

And then on this restatement project. I mean it sounds like you're saying the Q will be filed relatively on time, which to me suggests this month. Is that reasonable?

然後是關於這個重述項目。我的意思是，聽起來你說 Q 將會相對按時提交，對我來說這意味著這個月。這樣合理嗎？

Yes. First, this is not -- we are not indicating a restatement. So we are still doing our work. We are highlighting the range -- preliminary range for Q3 and Q4. We do have work still to complete, which is why we filed the extension on our Q. Our objective is to get it done as soon as practical. So you can probably think of that in weeks versus anything longer than that.

是的。首先，這並不是──我們不是在表示重述。所以我們仍在做我們的工作。我們正在重點介紹第三季和第四季的初步範圍。我們確實還有工作要完成，這就是我們申請延期的原因。因此，您可能認為可以用幾週的時間來完成這項任務，而不是更長的時間。

And then finally, I'm really happy to hear about the refinancing of the convertibles, there's only $19 million due in September of '24. I think that's great news. But since we don't have the Q, I'm just curious, is everything now beyond that are the maturities in '27 and '28 and beyond? Or do we have things coming due in '25 and '26?

最後，我很高興聽到有關可轉換債券再融資的消息，24 年 9 月到期的金額僅為 1,900 萬美元。我認為這是個好消息。但由於我們沒有 Q，我只是好奇，現在除此之外的一切都是 '27 年和 '28 年及以後的到期日嗎？或者我們有一些將在 25 年和 26 年到期的事情？

No. So there's $19 million due in September '24, and we did file at the time of that refinancing. You can see the details there and Amitabh can send them to you if you need. And then the next set of maturities, you're right, are in '27 and '28.

不。您可以在那裡看到詳細信息，如果您需要，Amitabh 可以將其發送給您。您說得對，下一組到期日是在 27 年和 28 年。

What was the effect of interest rate [for this]?

利率對此有何影響？

Our average right now is 3.3%.

我們現在的平均是 3.3%。

The next question is from Dave Kang with B. Riley.

下一個問題來自 B. Riley 的 Dave Kang。

Regarding on bookings, I think last quarter you said that you expect bookings to increase throughout the second half. So should we expect bookings to be up once again in fourth quarter sequentially?

關於預訂量，我想您上個季度曾說過，預計下半年預訂量將會增加。那麼我們是否應該預期第四季的預訂量將再次較上季上升？

That's the only area we don't actually report. We don't forecast bookings. But I think what we said is that we thought that bookings would continue to accelerate in the back half. There is some lumpiness in bookings. But overall, we see a trend, both in Q3 and Q4 versus the first half that is at this point.

這是我們實際上沒有報告的唯一領域。我們不預測預訂量。但我認為我們說過，我們認為下半年預訂量將繼續加速成長。預訂量有些不穩定。但總體而言，與上半年相比，我們看到了第三季和第四季的趨勢。

And then also last quarter, you said Tier 1s were still in inventory correction mode while smaller service providers, they seem to be doing better. Have they changed since 90 days ago?

然後上個季度，您說一級供應商仍處於庫存調整模式，而小型服務提供者似乎表現更好。自 90 天前以來它們有變化嗎？

Yes. I think you've heard in the industry, everybody is very tight with the capital dollar, with interest rates and the economy and externalities, geopolitical forces at play. But that's what you heard in my prepared remarks said, our goal is to win more than our fair share and to ensure that the priority of the orders which the service providers is rolling out, fiber deeper into the edge of the network to get these applications built. And the web scalers that we're dealing with are building out AI infrastructure, and that is fueling demand. So we're focused on every order dollar that's up and available and our job is to take more than our fair share.

是的。我想你已經聽說過，在這個行業裡，每個人都對資本美元非常緊張，利率、經濟、外部因素和地緣政治力量都在發揮作用。但這就是你們在我準備好的發言中聽到的，我們的目標是贏得比我們應得的份額更多的份額，並確保服務提供商推出的訂單的優先級，將光纖深入到網絡邊緣以構建這些應用程序。我們正在處理的網路擴展器正在建立人工智慧基礎設施，這正在推動需求。因此，我們專注於每一筆可用的訂單，我們的工作是獲取超過我們應得的份額。

The next question is from Meta Marshall with Morgan Stanley.

下一個問題來自摩根士丹利的 Meta Marshall。

This is Karan on for Meta. So you sort of mentioned inventory being a source of cash next quarter. I guess just generally, what gives you confidence in that and maybe just how much of a source of cash can it be for next quarter and maybe across the year next year?

我是 Meta 的 Karan。所以你提到庫存是下個季度的現金來源。我想一般來說，是什麼讓您對此有信心，以及它能為下個季度乃至明年全年帶來多少現金？

Yes, we have been using working capital over the last several quarters through the period of time of the inventory [adjustment]. We think inventory has peaked in Q3. I will say, though, we've been sharing with you that our total commitments -- if you look at both the inventory on our books as well as the commitments to our RCM is actually down Q2 to Q3. And then we expect to reduce inventory and the inventory commitments total again in Q4. So that cash flow will start in Q4 and flow into Q1. I can't give you a real magnitude at this point, but more to just say that the trend is now turning in the right direction there.

是的，過去幾個季度，我們在庫存[調整]期間一直在使用營運資金。我們認為庫存在第三季已達到高峰。不過，我要說的是，我們一直在與你們分享我們的總承諾 - 如果你看看我們賬面上的庫存以及對 RCM 的承諾，那麼從第二季度到第三季度，我們的總承諾實際上是下降的。然後我們預計第四季度庫存和庫存承諾總額將再次減少。因此現金流將從第四季開始流入第一季。我現在無法給出真正的幅度，但可以肯定地說，現在的趨勢正在朝著正確的方向轉變。

Yes. So I think in the quarter, our inventories were up close to $40 million-ish in Q3, and our overall obligations -- purchase obligations plus inventory were down [$20 million]. So despite the inventory being up, total net liability down $20 million , and we expect that to peak. And then again, given the nice book-to-bill and what our outlook is for Q4 and projects from backlog for Q1, we expect that to go down.

是的。因此我認為在本季度，我們的庫存在第三季度接近 4000 萬美元，而我們的總體義務——採購義務加上庫存下降了 [2000 萬美元]。因此，儘管庫存增加，但總淨負債下降了 2000 萬美元，我們預計這一數字將達到高峰。而且，考慮到良好的訂單出貨比、我們對第四季度的展望以及第一季積壓訂單的項目，我們預計這一數字將會下降。

And then just a quick follow-up on the service provider side. You mentioned [service] teams continued strength there. I guess just generally in terms of customer conversations, are you getting any pushback on the pricing front during some of this pause?

然後只是對服務提供者方面進行快速跟進。您提到[服務]團隊持續保持強勁勢頭。我想，就一般的客戶對話而言，在暫停期間，您是否在定價方面遇到任何阻力？

We always get pushback on the pricing front. But our job is to make vertically integrated products that provide price performance, not just by reducing the price tag, but actually the effect of dollar per bit and [watts] per bit. So -- and I do want to correct, when I say service provider strength, do not write that up. There are pockets of strength based on priority of spend. Overall, there is still a muted environment of conservatism around CapEx dollars. And I expect that our team is in planning mode and out with our customer base now, and we're in the process of locking down our plans for 2024 accordingly.

我們在定價方面總是遭遇阻力。但我們的工作是製造垂直整合的產品，提供物有所值的產品，不僅是透過降低價格，而是實際上降低每比特美元和每比特[瓦特]的效果。所以 — — 我確實想糾正一下，當我說服務提供者實力時，不要把它寫出來。根據支出的優先順序，存在著一些優勢。整體而言，資本支出的保守氣氛仍然不濃厚。我預計我們的團隊現在正處於規劃模式並與我們的客戶群合作，並且我們正在相應地確定 2024 年的計劃。

The next question is from George Notter with Jefferies.

下一個問題來自 Jefferies 的 George Notter。

I am curious about the mix of ICE-X as a percentage of product sales and then also the mix of vertically integrated sales as a percentage of product sales. Do you guys have those numbers?

我對 ICE-X 佔產品銷售額的百分比以及垂直整合銷售額佔產品銷售額的百分比感到好奇。你們有這些號碼嗎？

We do. ICE-X was just under 30%. The vertical integration was at 57-ish percent.

是的。 ICE-X 略低於 30%。垂直整合率約為57%。

And then as I think about driving those numbers forward, obviously, the XTM and GX redesigns are kind of the key elements there. Can you tell me where you guys are on that? I think you said one of those products is going to be available by year-end for revenue. Obviously, your customers also have to test those products. How long do you think those testing processes will take? What do you think it looks like in terms of really turning those numbers upward in terms of vertical integration of products?

然後，當我考慮推動這些數字向前發展時，顯然，XTM 和 GX 的重新設計是其中的關鍵要素。你能告訴我你們現在的情況嗎？我記得您說過其中一種產品將在年底上市並產生收入。顯然，您的客戶也必須測試這些產品。您認為這些測試過程需要多長時間？您認為從產品垂直整合的角度來看，如何才能真正提高這些數字呢？

Yes, the bookings of the GX series are up significantly, and we should probably put that out in our next earnings cycle to show the percentages of that and what's the embedded base of GX is growing on [account]. So we'll do that, George. But those products are ready, the software, the OS, everything we've done over the last years to make them productive from metro, long-haul and aggregation. So that's great.

是的，GX系列的預訂量大幅增加，我們應該在下一個收益週期中公佈這一數據，以顯示其中的百分比，以及GX的嵌入式基礎在哪些方面有所增長。所以我們會這麼做的，喬治。但是這些產品已經準備好了，軟體、作業系統，以及我們在過去幾年所做的一切，都是為了使它們在城域、長途和聚合方面富有成效。這太棒了。

What we talked about, George, was we were shipping the first one to a customer that not only had the GX, but have the -- our own pluggables in them. And so that will actually go out. That's going out right now this quarter and thus will be the revenue in this quarter or in Q1, thus the start of the vertical integration.

喬治，我們所討論的是，我們正在將第一批產品運送給一位客戶，該客戶不僅擁有 GX，而且擁有我們自己的可插入式產品。這樣它就會真正出去。這個數據將會在本季公佈，因此也將成為本季或第一季的收入，從而開始垂直整合。

So now all of our GX platforms that are out there, where we might have used merchant CFP2, our pluggable in it, are able to incorporate our pluggable and we're going through various stages of integration testing with those clients. Obviously, if we can provide a better price performance they're eager to have us implement. So we'll try to make sure, George, going forward in 2024. I think that's a good metric for us to start looking at.

因此，現在我們所有的 GX 平台（我們可能使用了商家 CFP2，其中的可插入式產品）都能夠整合我們的可插入式產品，並且我們正在與這些客戶進行不同階段的整合測試。顯然，如果我們能夠提供更好的性價比，他們就會非常樂意讓我們實施。所以喬治，我們會盡力確保在 2024 年繼續前進。

And then...

進而...

(inaudible) vertical integration and -- yes.

（聽不清楚）垂直整合和——是的。

So I was just going to ask that the mix of vertically integrated product -- Obviously, we're looking for that to step up as the year goes on next year. Like what do you think is doable in terms of that next year?

所以我只是想問一下垂直整合產品的組合——顯然，我們希望明年隨著時間的推移，這種組合能夠有所提升。您認為明年可以做些什麼？

Again, I don't want to get too far ahead of the state into 2024. But I think what we said was that we thought over [60] and over time that, that could approach [70], so.

再說一次，我不想在 2024 年之前領先州政府太多。

The next question is from Christian Schwab with Craig-Hallum Capital.

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

Just 2 quick ones. We don't want to talk about '24, but I missed some of the prepared comments. Did we reiterate our outlook for $1 share earnings in '25 and '26?

只需快速說 2 個。我們不想談論‘24’，但我錯過了一些準備好的評論。我們是否重申了對25年和26年每股收益1美元的預期？

Yes, we did not, but we have not pulled off that. And I think when you see the -- I think what we said in our last earnings call is that we continue to expand EPS this year in 2023 by 25%, and a big goal of ours next year isn't just the growth in the top line, but we're super focused on growing our bottom line dollars and that EPS percentage. So [with] that we are not (inaudible) off that at all.

是的，我們沒有，但是我們還沒有實現這一目標。我認為當你看到——我想我們在上次財報電話會議上說過，我們今年到 2023 年的每股收益將繼續增長 25%，而我們明年的一個大目標不僅僅是營收的增長，但我們非常專注於增加我們的利潤和每股收益百分比。所以我們根本沒有（聽不清楚）這一點。

And then as far as -- last quarter you guys talked about a lot of different growth opportunities in India. Can you give us an update on how those growth opportunities are going and what your future expectations are geographically for India?

然後就上個季度而言，你們談到了印度許多不同的成長機會。您能否向我們介紹一下這些成長機會的進展以及您對印度未來地理環境的預期？

Sure. I'll start with overall just growth expectations. So we talked in the prepared remarks about landing a couple of Tier 1s in Europe. We continue to extend with the hyperscalers. And overall, we had a book-to-bill above 1, which was nice to see again after Q1 and Q2 being below 1. So I think overall, we feel very good. It's probably the best we felt across our customer segment, about our engagement.

當然。我首先會談及整體成長預期。因此，我們在準備好的演講中談到了在歐洲獲得幾個一級市場的合作。我們將繼續與超大規模企業合作擴展。總體而言，我們的訂單出貨比高於 1，在第一季和第二季均低於 1 之後，再次看到這樣的情況真是令人欣慰。這可能是我們在整個客戶群中對我們的參與感受最好的一次。

Now that being said, we're in a tough economic climate for them. So what's important to do in these times is engage, understand their needs and put things forward to help them drive the priority of their CapEx spend at the lowest dollar per bit, lowest watt per bit and the best ease of use because they're going to be -- as you've seen, they try to limit their operational personnel that -- a lot of them have become thinner in the field. And we can help that. That's where we want to be.

話雖如此，對他們來說，我們正處於嚴峻的經濟環境中。因此，在這種時候，重要的是參與進來，了解他們的需求，並提出建議，幫助他們以最低的每比特美元、最低的每比特瓦特和最佳的易用性來推動資本支出的優先級，因為他們會——正如你所看到的，他們試圖限制他們的運營人員——他們中的許多人在這個領域已經變得更薄弱了。我們可以幫助解決這個問題。這正是我們想要的。

The next question is from Alex Henderson with Needham.

下一個問題來自 Needham 的 Alex Henderson。

A lot of companies that went through the supply chain issues saw a fairly large increase in backlog, which then allowed them to produce very strong shipments as a result of the supply chain, allowing them to ship more product out against that backlog. A number of them have talked about significant comparison challenges because of it. As one example, if you look at F5, they had a 45% growth in the second quarter and ADC is a business that's flat to declining. So they obviously have a tough comp. Can you talk whether you have a comparison issue in any of the upcoming next 4 or 5 quarters as a result of that and whether that is playing a role to the improved shipments? And on your book-to-bill, it's nice to hear above 1 in the third quarter. Were you above 1 for the year?

許多經歷過供應鏈問題的公司都發現積壓訂單大幅增加，這使得它們能夠借助供應鏈產生非常強勁的出貨量，從而可以根據積壓訂單發送更多產品。他們中的許多人談到了因此面臨的重大的比較挑戰。舉個例子，如果你看看 F5，他們在第二季度實現了 45% 的成長，而 ADC 業務則持平或下降。因此他們的實力顯然很強。您能否談談未來 4 到 5 個季度中是否存在比較問題，以及這是否對出貨量的增加產生了影響？關於您的訂單出貨比，很高興聽到第三季的訂單出貨比超過 1。今年的成績超過 1 了嗎？

No, we have not done above 1 for the year. But back to your -- I think your key premise -- I think if you look at our operating results over the last 3 years, you don't see wild swings in terms of us growing 25% 1 year as flat another. You see kind of high single-digit to double-digit growth in top line. And this year has been a bit more muted given the economic climate. But so far for the first 3 quarters, we were looking good. We didn't have that big spike. So as the share taker in our position, as long as the market continues to grow, we will grow, our program just to grow ahead of that market and to continue to really expand EPS background.

不，我們今年的成績還沒有超過 1。但回到你的——我認為你的關鍵前提——我認為如果你看看我們過去 3 年的經營業績，你不會看到我們一年增長 25%，而另一年持平的劇烈波動。您會看到營業額呈現出個位數到兩位數的高成長。考慮到經濟形勢，今年的情況更加低迷。但到目前為止，前三個季度的表現還不錯。我們沒有出現那麼大的峰值。因此，作為我們所在位置的份額承擔者，只要市場繼續成長，我們就會成長，我們的計劃就是領先於市場成長，並繼續真正擴大 EPS 背景。

So simple answer, Alex, no, we don't have as tough as the compare, I think, given we've kind of been steady (inaudible).

所以答案很簡單，亞歷克斯，不，我認為，我們沒有那麼強硬，因為我們一直很穩定（聽不清楚）。

There are no further questions at this time. I'll turn it back to the presenters for any closing remarks.

目前沒有其他問題。我將把發言時間交還給演講者，請他們做結束語。

Yes. No, I appreciate the thoughtful questions. And again, in this environment, overall, we delivered another strong quarter with projected sequential revenue growth, strong bookings and higher margins, hitting that 40%. We've got the right strategy and are executing our plan. Our portfolio is in the best shape it's ever been, and we're winning customers globally across the segments. We do appreciate the support of our customers, employees and shareholders. And now we're going to get back to work, continuing to execute a very sound investment strategy and focus on continued EPS expansion.

是的。不，我很欣賞這些深思熟慮的問題。而且，在這種環境下，總體而言，我們又度過了一個強勁的季度，預計營收將連續成長，訂單量強勁，利潤率更高，達到 40%。我們有正確的策略並正在執行我們的計劃。我們的產品組合處於最佳狀態，我們正在全球各個領域贏得客戶。我們非常感謝客戶、員工和股東的支持。現在我們要重新開始工作，繼續執行非常合理的投資策略，並專注於持續的每股盈餘擴張。

Thanks again for the call. Be safe and take care.

再次感謝您的來電。注意安全，多保重。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。