Lumentum Holdings Inc. (LITE) 2016 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Lumentum fourth-quarter and full-year 2016 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

各位女士、各位先生，大家好，歡迎參加 Lumentum 2016 會計年度第四季及全年財報電話會議。目前所有與會者皆處於僅收聽模式。稍後我們將進行問答環節，屆時會提供相關指示。（接線員指示）提醒各位，本次電話會議將被錄音。

I would now like to turn the call over to Chris Coldren, Vice President of Strategy and Corporate Development. You may begin.

現在我想把電話交給策略與企業發展副總裁 Chris Coldren。您可以開始了。

Thank you, Stefanie. Welcome to Lumentum's fourth-quarter fiscal 2016 earnings call. This is Chris Coldren, Vice President of Strategy and Corporate Development. Joining me on today's call are Alan Lowe, President and Chief Executive Officer; and Aaron Tachibana, Chief Financial Officer.

謝謝你，Stefanie。歡迎參加 Lumentum 2016 會計年度第四季財報電話會議。我是策略與企業發展副總裁 Chris Coldren。今天與我一同參與電話會議的還有總裁兼執行長 Alan Lowe，以及財務長 Aaron Tachibana。

This call will include forward-looking statements, including statements regarding Lumentum's expected financial performance, expenses, trends and positions in our markets, as well as expectations related to our customers and our products. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.

本次電話會議將包含前瞻性陳述，包括關於 Lumentum 預期財務表現、費用、我們市場中的趨勢與定位，以及與客戶與產品相關的預期等陳述。這些陳述存在風險與不確定性，可能導致實際結果與我們目前的預期出現重大差異。

We encourage you to review our most recent filings with the SEC, particularly the Risk Factors described in our 10-Q filing for fiscal third-quarter ended April 2, 2016. The forward-looking statements we provide during this call, including projections for future performance, are based on our reasonable beliefs and expectations as of today. Lumentum undertakes no obligation to update these statements except as required by applicable law.

我們建議您查閱我們最近向美國證券交易委員會（SEC）提交的文件，特別是截至 2016 年 4 月 2 日止之會計年度第三季 10-Q 申報文件中所述的風險因素。我們在本次電話會議中提供的前瞻性陳述（包括對未來表現的預測）係基於截至今日我們合理的信念與預期。除非適用法律要求，Lumentum 不承擔更新這些陳述的義務。

Please also note, unless otherwise stated, all results and projections are non-GAAP. Non-GAAP financials should not be considered as a substitute for, or superior to, financials prepared in accordance with GAAP. Our press release with our fourth-quarter and full-year fiscal 2016 results is available on our website, www.lumentum.com under the Investor section, and includes additional details about our non-GAAP financial measures and a reconciliation between our GAAP and non-GAAP results.

另請注意，除非另有說明，所有結果與預測均為非 GAAP。非 GAAP 財務資訊不應被視為 GAAP 編製之財務資訊的替代或優於 GAAP 財務資訊。我們關於 2016 會計年度第四季及全年業績的新聞稿可於我們網站 www.lumentum.com 的投資人專區取得，並包含我們非 GAAP 財務衡量指標的更多細節，以及 GAAP 與非 GAAP 結果之間的調節表。

Our website also has our latest SEC filings, which we encourage you to review, and supplementary slides relating to today's earnings release. Finally, a recording of today's call will be available by 7:30 p.m. Pacific time this evening on our website.

我們的網站亦提供最新的 SEC 申報文件（建議您查閱），以及與今日財報發布相關的補充投影片。最後，今日電話會議的錄音將於今晚太平洋時間 7:30 前在我們網站上提供。

Now I would like to turn the call over to Alan for his comments and fourth-quarter and full-year business highlights.

現在我想把電話交給 Alan，請他發表評論並分享第四季及全年業務重點。

Thank you, Chris. Wow, what a year. Just over a year ago, we became an independent public company, and this team hosted our first earnings call. Since then, we have seen our telecom, datacom and commercial lasers businesses all strengthen dramatically. Relative to our fourth quarter of last year, our telecom revenue was up 18%, with ROADMs up nearly 100%. Our 100G datacom revenue is up 241% and our lasers revenue is up 35%.

謝謝你，Chris。哇，真是精彩的一年。就在一年多前，我們成為一家獨立的上市公司，而這個團隊主持了我們的第一次財報電話會議。自那時起，我們的電信、數據通訊（datacom）與商用雷射業務都大幅增強。相較於去年第四季，我們的電信營收成長 18%，其中 ROADM 幾乎成長 100%。我們的 100G 數據通訊營收成長 241%，雷射營收成長 35%。

This growth, primarily driven by new and differentiated products, resulted in more than a 200 basis point expansion in gross margin. This gross margin expansion, combined with operating leverage and the cost savings of being an independent public company, resulted in more than a 700 basis point increase in operating margin.

這些成長主要由全新且具差異化的產品所帶動，使毛利率擴張超過 200 個基點。毛利率擴張再加上營運槓桿，以及作為獨立上市公司所帶來的成本節省，使營業利益率提升超過 700 個基點。

Demand continues to be strong. At Lumentum, we are focused on using our photonics technology to accelerate the speed and scale of cloud, networking and advanced manufacturing. The rapid growth in cloud computing, streaming video, mobile and other high-bandwidth applications, is placing enormous demands on networks in terms of capacity, connectivity and efficiency.

需求持續強勁。在 Lumentum，我們專注於運用光子技術，加速雲端、網路以及先進製造的速度與規模。雲端運算、串流影音、行動通訊及其他高頻寬應用的快速成長，正對網路在容量、連接性與效率方面提出極高要求。

These demands can only be met with advanced optical communication technologies, including 100G and higher data transmission, and advanced ROADM architectures. Lumentum is a leader in these enabling technologies, and our investments in new products position us well for these trends.

這些需求只能透過先進的光通訊技術來滿足，包括 100G 及更高速率的資料傳輸，以及先進的 ROADM 架構。Lumentum 是這些關鍵使能技術的領導者，而我們在新產品上的投資，使我們能在這些趨勢中占據有利位置。

Increasingly, network and data center operators around the world are critically dependent upon our products. Demand from China continues to be strong. North American metro deployments are starting to ramp as our customers are transitioning to full-scale deployments. Hyperscale data center operators continue to plan major 100G upgrades and we expect rollouts to begin in the first half of our fiscal year.

全球的網路與資料中心營運商正日益高度依賴我們的產品。來自中國的需求仍然強勁。北美都會區（metro）部署正開始加速，因為我們的客戶正在轉向全面規模部署。超大規模（hyperscale）資料中心營運商持續規劃重大 100G 升級，我們預期相關導入將在本會計年度上半年開始。

Fourth-quarter revenue was $241.7 million, and fully diluted earnings per share was $0.41. Revenue was at the high end of our guidance, and our earnings-per-share exceeded our guidance.

第四季營收為 2.417 億美元，完全稀釋後每股盈餘為 0.41 美元。營收位於我們財測區間的高端，而每股盈餘超出我們的財測。

While we added capacity, demand still exceeded our ability to supply during the fourth quarter. We experienced challenges with some of our suppliers, which also impacted our ability to meet our customers' demand. We continue to bring new capacity online and are working closely -- very closely with our suppliers to improve their delivery. However, we expect we will remain supply-limited during the first quarter.

儘管我們已增加產能，第四季需求仍超過我們的供應能力。我們在部分供應商方面遇到挑戰，也影響了我們滿足客戶需求的能力。我們持續讓新增產能上線，並與供應商密切——非常密切——合作以改善交付。然而，我們預期第一季仍將受限於供應。

Telecom revenue was up 4% quarter-on-quarter. Our TrueFlex ROADM revenue grew approximately 21% quarter-on-quarter and grew 226% year-over-year. These ROADMs are not only the basis of the North America metro builds that are starting, but have broad traction across our customer base. This is due to network operators around the world shifting to more advanced architectures that rely on the functionality of our TrueFlex product.

電信營收季增 4%。我們的 TrueFlex ROADM 營收季增約 21%，年增 226%。這些 ROADM 不僅是北美都會區建設啟動的基礎，也在我們的客戶群中獲得廣泛採用。原因在於全球網路營運商正轉向更先進的架構，而這些架構仰賴我們 TrueFlex 產品的功能。

Total ROADM revenue grew approximately 13% quarter-on-quarter, as TrueFlex growth continue to be partially offset by declines in older non-TrueFlex products. We continue to expect that China will begin significant ROADM deployment in the next calendar year as they begin to deploy them into their metro networks.

ROADM 總營收季增約 13%，因 TrueFlex 的成長仍部分被較舊的非 TrueFlex 產品下滑所抵銷。我們仍預期中國將在下一個曆年開始進行顯著的 ROADM 部署，並將其導入其都會網路。

Our datacom revenue grew 3% sequentially and achieved a new record level of $47 million. Datacom revenue growth was driven by sales of our 100G product, which increased approximately 40% over the prior-quarter and now represents more than half of our total datacom revenue. Partially offsetting the 100G revenue was declines in the 10G and 40G revenues as the market for these products has become even more competitive with price aggressors focused on maintaining market share.

我們的數據通訊營收季增 3%，並創下 4,700 萬美元的新高。數據通訊營收成長由 100G 產品銷售帶動，該產品較前一季增加約 40%，目前已占我們數據通訊總營收的一半以上。部分抵銷 100G 營收成長的是 10G 與 40G 營收下滑，因這些產品的市場競爭更加激烈，且有積極降價的競爭者專注於維持市占率。

Commercial lasers revenue was up 22% sequentially and 35% year-on-year, driven primarily by kilowatt fiber lasers returning to growth. We continue to make progress improving yields and output, and expect our overall first-quarter laser revenue to increase slightly again.

商用雷射營收季增 22%、年增 35%，主要由千瓦級光纖雷射恢復成長所帶動。我們持續在提升良率與產出方面取得進展，並預期第一季整體雷射營收將再次小幅增加。

Book-to-bill for optical communications and lasers were both above 1. We saw strong bookings in the fourth quarter and that strength is continuing into the first quarter.

光通訊與雷射的接單出貨比（book-to-bill）皆高於 1。第四季我們看到強勁的訂單，且這股強勢延續至第一季。

This is a very exciting time for us as demand continues to grow for bandwidth and speed across the world's data centers and the communication networks that connect them. We believe we are well-positioned with our new products, customer relationships, design wins and our ability to execute.

對我們而言，這是一個非常令人振奮的時刻，因為全球資料中心以及連接它們的通訊網路對頻寬與速度的需求持續成長。我們相信，憑藉新產品、客戶關係、設計導入（design wins）以及我們的執行能力，我們已處於有利位置。

I will now hand it over to Aaron for more details on our financial results and our guidance for the first quarter of fiscal 2017.

接下來我把時間交給 Aaron，請他進一步說明我們的財務結果，以及 2017 會計年度第一季的財測。

Thank you, Alan. Net revenue for the fourth quarter was $241.7 million and at the high end of guidance. We had an excellent fourth quarter and increased revenue by 4.9% sequentially despite the third quarter having one extra week. Also, revenue grew 15.7% compared with the same period last year.

謝謝你，Alan。第四季淨營收為 2.417 億美元，位於財測區間的高端。我們第四季表現非常出色，儘管第三季多了一週，營收仍較前一季成長 4.9%。此外，營收較去年同期成長 15.7%。

Our full-year fiscal 2016 revenue was $903 million and increased 7.9% compared with last year's $837.1 million. GAAP gross margin was 32.9% and increased 560 basis points quarter-on-quarter from the positive impact of higher volume, and last quarter having inventory provision expense related to our legacy 3D sensing product.

2016 會計年度全年營收為 9.03 億美元，較去年的 8.371 億美元成長 7.9%。GAAP 毛利率為 32.9%，較前一季提升 560 個基點，主要受惠於更高的出貨量，以及上一季因我們傳統 3D 感測產品而認列的存貨備抵費用。

GAAP operating margin was 4.2% and GAAP diluted net income per share was $0.23. Our fourth-quarter non-GAAP gross margin was 34.1% and increased 190 basis points relative to the prior quarter, driven by a sequential increase in optical communications' gross margin.

GAAP 營業利益率為 4.2%，GAAP 稀釋後每股淨利為 0.23 美元。我們第四季非 GAAP 毛利率為 34.1%，較前一季提升 190 個基點，主要由光通訊毛利率的季增所帶動。

The full fiscal year 2016 non-GAAP gross margin was 33% and increased 50 basis points year-over-year. Non-GAAP operating margin for the fourth quarter was 11.6%, an increase of 280 basis points sequentially. Non-GAAP earnings-per-share was $0.41 based on a fully diluted share count of 61.8 million.

2016 會計年度全年非 GAAP 毛利率為 33%，年增 50 個基點。第四季非 GAAP 營業利益率為 11.6%，較前一季增加 280 個基點。非 GAAP 每股盈餘為 0.41 美元，係以完全稀釋後股數 6,180 萬股計算。

These earnings included $100,000 of other expense and $2.5 million of tax. For the full fiscal year 2016, non-GAAP operating margin was 9.2%, an increase of 380 basis points year-over-year. Non-GAAP earnings-per-share was $1.29 on a fully diluted share count of 61.2 million.

這些盈餘包含 10 萬美元的其他費用以及 250 萬美元的稅負。就 2016 會計年度全年而言，非 GAAP 營業利益率為 9.2%，年增 380 個基點。非 GAAP 每股盈餘為 1.29 美元，係以完全稀釋後股數 6,120 萬股計算。

Now for some additional detail. Optical communications revenue was $201.2 million, an increase of approximately 2% over the prior-quarter, driven by a $5.1 million or approximately 4% increase in telecom revenue, and a $1.5 million or approximately 3% increase in datacom revenue, which was partially offset by a $2.7 million or approximately 22% decrease in industrial and consumer revenue.

現在補充一些額外細節。光通訊營收為2.012億美元，較前一季增加約2%，主要受電信營收增加510萬美元（約4%）以及資料通訊營收增加150萬美元（約3%）所帶動，但部分被工業與消費性營收減少270萬美元（約22%）所抵銷。

Optical communications gross margin at 32.3% increased 250 basis points sequentially as a result of higher volume and the mix of products. Commercial lasers revenue was $40.5 million, an increase of $7.3 million quarter-on-quarter. In the fourth quarter, fiber laser revenues were $14.9 million and achieved the highest levels since the prior peak during Q2 of fiscal year 2015.

光通訊毛利率為32.3%，較前一季提升250個基點，原因是出貨量增加以及產品組合改善。商用雷射營收為4,050萬美元，較上一季增加730萬美元。第四季光纖雷射營收為1,490萬美元，達到自2015會計年度第二季前一個高峰以來的最高水準。

Commercial lasers' gross margin at 43.2% [decreased] 350 basis points due to mix and cost. In Q4, we recorded a reserve to upgrade some older fiber lasers to move to a new manufacturing process that has enabled fiber lasers to return to growth.

商用雷射毛利率為43.2%，因產品組合與成本因素而[下降]350個基點。第四季我們提列一筆準備，用於將部分較舊的光纖雷射升級並轉移至新的製造流程；該流程已使光纖雷射重回成長。

The reserve had a negative impact of 200 basis points for the overall commercial lasers' gross margin. Our focus has been to return fiber laser revenues back to growth as we worked through the production challenges over the past few quarters. And now that we have done that, we will focus on reducing costs going forward.

該項準備對整體商用雷射毛利率造成200個基點的負面影響。我們的重點一直是讓光纖雷射營收重回成長，因為過去幾季我們一直在解決生產上的挑戰。現在既然已經做到，我們接下來將把重點放在降低成本。

We had three customers that each contributed 10% or more of our fourth quarter revenue, which was consistent with last quarter. Operating expenses totaled $54.4 million or 22.5% of revenue compared with last quarter of $53.9 million or 23.4% of revenue. R&D expense was $34 million and SG&A expense, $20.4 million.

第四季有三位客戶各自貢獻我們第四季營收的10%或以上，與上一季一致。營業費用合計5,440萬美元，占營收22.5%，相較上一季為5,390萬美元，占營收23.4%。研發費用為3,400萬美元，銷售、一般及行政（SG&A）費用為2,040萬美元。

Income tax expense was $2.5 million for the quarter and equated to an effective non-GAAP tax rate of 9%. As we go forward, we expect the non-GAAP tax rate to be in the range of 7% to 10%.

本季所得稅費用為250萬美元，折合非GAAP有效稅率為9%。展望未來，我們預期非GAAP稅率將落在7%至10%的區間。

Capital equipment additions were approximately $20 million or 12% of revenue during the fourth quarter. As highlighted on our last call, this level of CapEx is meaningfully above historical investment levels of roughly 4% to 6% of revenue. We have been increasing our investments in capital equipment in order to expand capacity to meet the rapidly growing demand from our customers, particularly for our 100G and ROADM products.

第四季資本設備新增投資約2,000萬美元，占營收12%。如同我們上次電話會議所強調，這一CapEx水準明顯高於歷史投資水準（約占營收4%至6%）。我們提高資本設備投資，是為了擴充產能以滿足客戶快速成長的需求，特別是針對我們的100G與ROADM產品。

We expect CapEx investments in the first quarter to be in the range of $20 million to $25 million. Our cash balance was $157.1 million at the end of the fourth quarter, approximately flat from Q3, and we remain debt-free.

我們預期第一季的CapEx投資將落在2,000萬至2,500萬美元區間。第四季末現金餘額為1.571億美元，較第三季約持平，且我們仍維持零負債。

Now on to our guidance for the first quarter of fiscal 2017, noting again that all projections are on a non-GAAP basis. We project net revenue for the first quarter to be in the range of $245 million to $255 million, with operating margins in the range of 11% to 12.5%, and earnings-per-share to be in the range of $0.40 to $0.46.

接著說明我們對2017會計年度第一季的財測，再次提醒所有預測皆以非GAAP為基礎。我們預估第一季淨營收將介於2.45億至2.55億美元，營業利益率介於11%至12.5%，每股盈餘介於0.40至0.46美元。

Now I will turn the call back over to Chris and begin the Q&A session.

現在我把電話交回給Chris，並開始問答環節。

Thank you, Aaron. I would like to ask everyone to limit the discussion to one question and one follow-up. Stefanie, let's begin the question-and-answer session.

謝謝你，Aaron。我想請大家將討論限制為一個問題加一個追問。Stefanie，我們開始問答環節。

(Operator Instructions). Simon Leopold, Raymond James.

（接線員指示）。Simon Leopold，Raymond James。

I wanted to follow up on your data center business, specifically if you could talk to what kind of exposure you have to what we typically call the web scale or cloud providers and how you see that particular trend evolving for you?

我想追問你們的資料中心業務，特別是你們對我們通常稱為web scale或雲端服務供應商的曝險程度，以及你們如何看待這個趨勢對你們的演變？

Yes, thanks, Simon. This is Alan. We have -- if you go back to our Form 10, we had significant customers in the hyperscale data centers as they ramped up 40 gig. But as our 40 gig business has declined, we have a very small percentage of our revenue with the hyperscale guys, although that is increasing over the last couple of quarters, but still in single-digit millions of dollars.

是的，謝謝你，Simon。我是Alan。若回頭看我們的Form 10，我們在超大規模資料中心客戶擴增40G時曾有重要客戶。但隨著我們的40G業務下滑，我們來自這些超大規模客戶的營收占比非常小；雖然過去幾季有所增加，但仍是個位數百萬美元的規模。

I think as the transition for the hyperscale guys goes into full force at 100 gig, we are extremely well-positioned and are counting on significant growth from a very small base, but significant growth overall for our business coming from hyperscale. Specifically in our QSFP28 varieties of products.

我認為當超大規模客戶全面轉向100G時，我們的布局非常到位，並預期將從很小的基礎上取得顯著成長，且整體而言超大規模客戶將為我們業務帶來可觀成長。具體而言是在我們的QSFP28系列產品。

And the timeline for that, that you are thinking?

那你們對時間表的看法是？

I'd say most significantly would be the second fiscal quarter. We'll see some of it this quarter. We have got orders from hyperscale guys, but they are not huge. And frankly, the demand we have on our 100 gig products, CFP2 and CFP4, where our margins are substantially better than the QSFP28, we are moving most of our capacity to satisfy those customers, frankly. But as we add more capacity, we will be able to devote the CFP2, CFP4 and then the hyperscale guys as well.

我認為最顯著會在第二個會計季度。這一季也會看到一些。我們已收到超大規模客戶的訂單，但規模不大。坦白說，對於我們100G產品（CFP2與CFP4）的需求，其毛利率明顯優於QSFP28，因此我們把大部分產能轉去滿足那些客戶。不過隨著我們增加更多產能，我們就能同時供應CFP2、CFP4以及超大規模客戶。

And just as the follow-up I would like on that is, just overall, what percent of total revenues are 100 gig-related when you think about all the form factors, the CFP flavors and the QSFP? Thanks.

另外我想追問的是，整體而言，當你把所有外形規格都納入考量（各種CFP版本與QSFP），100G相關產品約占總營收的百分之多少？謝謝。

Sure. So, on the datacom side -- do you have that?

當然。所以，在資料通訊這一塊——你有數字嗎？

It is roughly 58%.

大約是58%。

On the datacom side.

在資料通訊端。

Total on the datacom.

資料通訊總計。

And then if you look at the telecom side, it is hard to say, given that we sell ROADMs and it is typically -- the ROADMs we are selling today are typically in the 100 gig space.

如果看電信端就比較難說，因為我們也賣ROADM，而通常——我們今天賣的ROADM通常是在100G的範疇。

But do you have something on that, Aaron?

但你那邊有相關數字嗎，Aaron？

Close to 60% or so.

大約接近60%左右。

Great, thank you very much.

很好，非常感謝。

Thanks, Simon.

謝謝你，Simon。

Rod Hall, JPMorgan.

Rod Hall，JPMorgan。

Thanks for taking the question. Really strong gross margin number here and then strong margin guidance as well. So, I guess my first question to you is, on that gross margin you reported, you said it was mix and scale. Could you say which of those two is most prominent? And then also within mix, just flag to us again which products specifically are driving that gross margin in the mix? And then I have a follow-up.

謝謝讓我提問。這次毛利率數字非常強勁，毛利率指引也很強。所以我第一個問題是，針對你們公布的毛利率，你們說是產品組合與規模效益所致。你能說明這兩者哪一個更為主要嗎？另外在產品組合方面，也請再提醒我們，究竟是哪些產品特別推動了組合中的毛利率表現？我還有一個追問。

Hi, Rod, this is Aaron. So, in terms of the gross margin uptick, it is about half-and-half in terms of mix, and from volume. In terms of the mix aspect -- so as Alan had mentioned in his prepared remarks, some of the newer products have higher margins than some of our legacy products. So when you start looking at 100 gig datacom, some of our ROADM products, they do have higher gross margins than our typical corporate average.

嗨，Rod，我是Aaron。就毛利率上升而言，約一半來自產品組合，一半來自出貨量。就產品組合面來說——如同Alan在事先準備的發言中提到，一些較新的產品毛利率高於我們部分既有產品。因此當你看100G資料通訊、以及我們部分ROADM產品時，它們的毛利率確實高於我們一般的公司平均水準。

And then in terms of volume, basically increasing volume by 5% quarter-to-quarter has helped us with leveraging a lot of our fixed cost in the operational area.

至於出貨量方面，基本上季度對季度增加5%的出貨量，幫助我們在營運端攤提並槓桿化許多固定成本。

Okay, and then as a follow-up, I wanted to ask you -- you guys are investing more CapEx in capacity. When do you expect to be able to meet demand on -- particularly on the telecom side, I'm interested in the ROADMs and the 100 gig components? And do think there is any risk of overcapacity, because other people are also investing? Thanks.

好的。接著追問，我想問——你們正在增加CapEx以擴充產能。你們預期何時能滿足需求——特別是在電信端，我關注的是ROADM與100G元件？另外你是否認為會有產能過剩的風險，因為其他公司也在投資？謝謝。

That's a good question. So in terms of what we have been seeing historically, it typically takes six to seven months to get capacity online. So we bought roughly $90 million of CapEx in all of FY16. Most of that started to step up in the second half of the fiscal year, okay. And so a lot of that is going to be coming online here towards the back end of Q1. So, we should see the Q2 time frame, the December quarter, where most of that will be online.

這是個好問題。就我們過去的經驗來看，通常需要六到七個月才能讓產能上線。我們在FY16全年購置了約9,000萬美元的CapEx，其中大部分是在會計年度下半年開始明顯拉升，好嗎。因此其中很多將在第一季後段開始上線。所以我們應該會在第二季的時間點，也就是12月那一季，看到大部分產能上線。

And in terms of the way forward, we will continue to evaluate the economic environment, and should we need to continue to add more capacity, we'll do so. But we are being prudent. Then, in terms of our projections that go out into calendar year 2017, there is nothing to tell us today that things are going to slow down at all.

至於後續，我們會持續評估經濟環境，若需要再增加更多產能，我們也會這麼做。但我們會保持審慎。此外，就我們對2017曆年的預測而言，目前沒有任何跡象顯示需求會放緩。

(multiple speakers) Do you think you'll meet capacity needs by fiscal Q2, Alan, just to be clear?

（多位講者）Alan，為了確認清楚，你認為到會計年度第二季就能滿足產能需求嗎？

Will we meet the demand in fiscal Q2?

我們能在會計年度第二季滿足需求嗎？

Right. Would you be able to meet demand by then?

對。到那時你們能夠滿足需求嗎？

We don't give two-quarters-out guidance, but I'd say that the way we look at investing in CapEx is really on products and technology where we have differentiated products or we have fewer competitors. So, if you look at the vast majority of our investments last year, it was for ROADMs, ROADM blades, super transport blades, 980 pumps and 100 gig datacom.

我們不提供提前兩個季度的指引，但我會說，我們在資本支出（CapEx）上的投資方式，主要是聚焦在我們具備差異化產品或競爭對手較少的產品與技術上。所以，如果你看我們去年絕大多數的投資，都是用在 ROADM、ROADM 刀片、超級傳輸刀片、980 幫浦以及 100G 數據通訊。

And, so, as we move forward, we don't expect to see new entrants into the ROADM or ROADM blade market, so we feel pretty comfortable about those investments. I think where there is many, many competitors, we are a little bit more conservative in adding capacity, because when things do slow down, those products will probably get hit for pricing and we don't want to be sitting with excess capacity.

因此，隨著我們往前走，我們預期不會看到新的競爭者進入 ROADM 或 ROADM 刀片市場，所以我們對這些投資相當有信心。我認為在競爭者非常、非常多的地方，我們在增加產能方面會更保守一些，因為當景氣放緩時，那些產品很可能會在價格上受到衝擊，而我們不希望手上留有過剩產能。

Okay, thanks a lot.

好的，非常感謝。

Sure.

當然。

Joseph Wolf, Barclays.

Joseph Wolf，巴克萊。

Just as sort of a follow-up on the margin side, if you look at the volume and the scale, I know you have been in the process of moving facility or consolidating facilities in the United States. Is there room for more gross margin improvement on that side of the business or -- and on the mix side? Or where can gross margin improvement come from going forward?

就毛利率方面做個追問，如果看出貨量與規模，我知道你們一直在進行美國廠房搬遷或整併。這一塊業務在毛利率上是否還有進一步改善空間，或是——以及產品組合方面？未來毛利率改善會從哪裡來？

Hi, Joe, this is Aaron. So, yes, in terms of what we had said last call, we did mention consolidation of one of our fabs on the East Coast. And we did mention that once that is fully consolidated, we should see another 58 to potentially 100 basis point improvement in margins, especially on the op com side.

嗨，Joe，我是 Aaron。是的，就我們上次電話會議提到的，我們確實提到要整併我們在東岸的一座晶圓廠。我們也提到，一旦完全整併完成，我們應該會看到毛利率再提升 58 到最多可能 100 個基點，特別是在營運成本（op com）那一側。

So, that's yet to come. That's probably in the first half of calendar 2017. In terms of what we see forward over the next couple of quarters, yes, we typically don't guide margin go forward, but right now if the environment continues the way it is with our newer products like we had articulated, I think we could still see 20 to 40 basis points improvement each quarter, assuming volume continues to tick up as well.

所以，這部分還沒反映出來，可能會在 2017 年曆年的上半年發生。至於未來接下來幾個季度的展望，是的，我們通常不對未來毛利率提供指引，但就目前而言，如果環境延續、且我們較新的產品如同我們所闡述的那樣，我認為在假設出貨量也持續小幅上升的情況下，我們每季仍可能看到 20 到 40 個基點的改善。

Okay, and then just sort of as a tangential follow-on, you mentioned ROADMs in China, and I am wondering if you take a look at the TrueFlex mix versus the older that you mentioned, what kind of ROADMs do you think China is going to start deploying when that -- when those orders start to come through?

好的，另外一個算是相關的延伸問題，你提到中國的 ROADM，我想問如果看 TrueFlex 的組合相對於你提到的較舊產品，中國在那些訂單開始進來時，你認為他們會開始部署哪一種 ROADM？

Yes, it is clearly TrueFlex ROADMs. That is what they are evaluating today, putting pilots in today and expect that that would be what ramps into. First of all, they are metro networks in 2017, but frankly the timing of when that happens in 2017 isn't perfectly clear to me. I think we will have our hands full with North America for the next six months or so. So, hoping it comes a little bit later, frankly, based on what we are seeing on demand side.

是的，很明顯是 TrueFlex ROADM。這就是他們目前正在評估的、也正在做試點（pilot）的，並且預期會是後續放量的產品。首先，他們在 2017 年會是都會網（metro networks），但坦白說，2017 年何時發生的時間點對我來說並不是非常清楚。我認為接下來大約六個月我們在北美就會忙不過來。所以，坦白說，基於我們在需求端看到的狀況，我反而希望它晚一點發生。

All right, thank you. That's very helpful.

好的，謝謝。這很有幫助。

Sure.

當然。

Alex Henderson, Needham.

Alex Henderson，Needham。

I was hoping you could go through some thoughts on what's going on in China in terms of the China broadband build, particularly relevant to the coherent side of your business. And, similarly, talk to what you see as the trajectory of orders for those type of products.

我希望你能談談你對中國那邊正在發生什麼的看法，尤其是中國寬頻建設，特別是與你們業務中相干（coherent）相關的部分。也同樣談談你對這類產品訂單走勢的看法。

Yes. It has remained strong for the first half of the calendar year. There are further tenders about to be awarded, from what I understand, and expect tens of thousands of ports to be awarded in the second half of the calendar year with growth -- what I am being told is growth into 2017 over 2016 in the number of coherent ports.

是的，在今年上半年（以曆年計）一直維持強勁。據我了解，還有進一步的標案即將決標，並且預期在今年下半年會有數以萬計的埠口（ports）被授予，且——我被告知——相干埠口的數量在 2017 年相較 2016 年會成長。

So, I think that's what they tell me. I think anecdotally, I use the scale of how often I get visited from the procurement organizations and the Chinese NIMs, and I can tell you it is frequent and often, as often as yesterday. So, the demand is very strong. It's expected to maintain strength through 2017, but with the caveat that things can change.

所以，我想這是他們告訴我的。我從一些軼事來看，我用採購組織與中國 NIM 來訪的頻率作為規模指標，我可以告訴你那是頻繁而且經常的，甚至就在昨天。所以需求非常強。預期會一路維持到 2017 年，但也要提醒，情況可能會改變。

So, we are very optimistic with how it has gone so far. And we'll have visibility certainly through the end of the calendar year if not into 2017.

所以，到目前為止的進展讓我們非常樂觀。而且我們肯定會有能見度看到今年曆年年底，甚至可能延伸到 2017 年。

The second question I had for you was on the industrial laser. Obviously, you fixed the coupling problem. You have now field-tested that fix and it looks like it is pretty well-addressed.

我第二個問題是關於工業雷射。顯然你們已經修復了耦合問題。你們現在也已經在現場測試過這個修復，看起來處理得相當不錯。

So, can you give us some sense of what the slope of recovery in that business will be? And do you think that you can get your margins back up over two or three, four quarters back up to the 50% gross margins you were enjoying before that issue happened?

那你能否讓我們了解一下這項業務復甦的斜率會是如何？以及你是否認為你們能在兩到三、四個季度內，把毛利率拉回到在問題發生前你們享有的 50% 毛利率水準？

Yes, well, I can tell you that the problem has been resolved. It has been more than field trials. It has been end customers for quarters, and very successfully. So, we have reached the point where our customer is very confident that the fix we have implemented is a complete fix for the problem.

是的，我可以告訴你問題已經解決了。這不只是現場試驗；它已經在終端客戶那邊運行了好幾個季度，而且非常成功。所以，我們已經到了客戶非常有信心的階段，認為我們所實施的修復是對該問題的完整解決方案。

We saw dramatic growth last quarter from $9.3 million to $14.9 million, so that's a pretty dramatic trajectory on fiber lasers. I expect that to grow again this quarter, but not to the same magnitude. And as we go into next calendar year, the demand from our main customers is expected to grow dramatically, especially as they build confidence in the 4 kilowatt laser that they now have. We are already seeing more demand come from them, so I would expect to continue to grow through the next six quarters.

我們上季看到顯著成長，從 930 萬美元到 1,490 萬美元，所以光纖雷射的成長軌跡相當明顯。我預期本季還會再成長，但幅度不會那麼大。當我們進入下一個曆年時，主要客戶的需求預期會大幅成長，特別是當他們對目前擁有的 4 千瓦雷射建立起信心之後。我們已經看到他們帶來更多需求，所以我預期未來六個季度會持續成長。

The margin point?

毛利率那點呢？

Oh, margin, oh, yes, I mean, if you look at the numbers last quarter, as Aaron indicated in his speech, we took a 2% margin hit for a reserve we took to upgrade some older lasers to the new process. So, putting that aside, we're at 45%. I think we now are going to focus on cost reduction as opposed to implementing this new process, and we will get back on that cost reduction path to get us into the high 40s.

喔，毛利率，喔，是的，我是說，如果你看上季的數字，如 Aaron 在他的發言中所指出的，我們因為提列一筆準備金、用來把一些較舊的雷射升級到新製程，而承受了 2% 的毛利率衝擊。把那個因素先排除，我們是 45%。我想我們現在會把重點放在降成本，而不是導入這個新製程，我們會回到降成本的路徑，讓我們回到接近 40% 後段（high 40s）。

I am not committing to [50%] gross margin, but I would say that we should certainly be in the high 40s over the next few quarters.

我不承諾 [50%] 毛利率，但我會說，未來幾個季度我們肯定應該會在接近 40% 後段（high 40s）。

Great, thank you very much.

太好了，非常感謝。

Thanks, Alex.

謝謝，Alex。

Meta Marshall, Morgan Stanley.

Meta Marshall，摩根士丹利。

I just wanted to ask a question about following on the question on China, just whether you had seen any softness of their shipments necessarily into Europe? And, so, if we are seeing softness out of Europe, but just whether that had been reflected with some of your Chinese NIMs?

我想接續剛剛關於中國的問題，想問你們是否看到他們的出貨到歐洲有任何疲軟？也就是說，如果我們看到歐洲疲軟，那是否也反映在你們的一些中國 NIM 上？

And then just in terms of an update on CFP to ACO timing? Thanks.

另外，想請你更新一下 CFP 到 ACO 的時程？謝謝。

Sure. You know, when we ship into China, we don't know where it ends up going, so I'm not going to be able to provide a lot of color on whether they are seeing softness into Europe. I will say that, to me, Europe seems kind of flattish to up a little bit, but I don't know that from a Chinese NIM perspective at all.

當然。你知道，我們出貨到中國時，我們並不知道最後會流向哪裡，所以我沒辦法就他們是否對歐洲出貨疲軟提供太多細節。我會說，就我看來，歐洲看起來大致持平到小幅上升，但我完全不是從中國 NIM 的角度得出這個結論。

The second question was on CFP to ACO. I will say that we have solved the problem at the chip level that we had, so the monolithic chip with the modulator and tunable laser, that challenge that we really have had over the last several quarters is behind us. The chip is performing well.

第二個問題是關於 CFP 到 ACO。我會說，我們已經在晶片層級解決了先前遇到的問題，所以那顆把調變器與可調式雷射做在一起的單晶片（monolithic chip），我們在過去幾個季度真正面臨的挑戰已經過去了。晶片表現良好。

The modules we have in the labs are working well with multiple DSB's, and we have demonstrated 200 gig 16-QAM performance in our lab, which is what we needed to be able to go to our customers. And that is happening this quarter, and we're still on track to start shipping low volumes by the end of the year, but really meaningful volume into early 2017.

我們在實驗室裡的模組，搭配多個 DSB 都運作良好，而且我們已在實驗室展示 200G 16-QAM 的效能，這正是我們需要、才能提供給客戶的。這會在本季發生；我們仍按計畫在年底前開始小量出貨，但真正有意義的出貨量會在 2017 年初。

Great, thank you.

太好了，謝謝。

Sure.

當然。

James Kisner, Jefferies.

James Kisner，Jefferies。

Thanks for taking my question. So, you guys mentioned metro deployments.. I am curious about the Verizon metro deployment in North America. Just wondering I know you guys have limited ability here into that in terms of where it is being deployed, but do you have any sense for how much the Verizon metro deployment helped in June and it is helping your guidance in September?

謝謝讓我提問。你們提到都會網部署（metro deployments）。我對北美 Verizon 的都會網部署很好奇。我知道你們在這方面能掌握的資訊有限，包含部署在哪裡，但你們是否能大概說明 Verizon 的都會網部署在 6 月幫助了多少，以及它如何支撐你們對 9 月的指引？

And I guess I'm wondering also if both key vendors are shipping there and whether or not we should expect that business to keep accelerating through the year? Thanks.

我想我也在想，兩家主要供應商是否都在那裡出貨，以及我們是否應該預期這項業務在今年內會持續加速成長？謝謝。

Yes, I can tell you that the deployments are happening to a few cities, and it contributed -- I don't know how much it contributed last quarter. I would say probably in the high single-digit millions of dollars perhaps. I'm not going to comment on which customers are shipping to them or not. You'd have to ask them. But I would say it is still in the very early stages and expect that we will see continued growth from the North America metro, both Verizon and beyond Verizon, over the next couple of quarters for sure and into 2017.

是的，我可以告訴你，部署正在幾個城市進行，並且它確實有貢獻——我不知道上季貢獻了多少。我會說可能是高個位數百萬美元左右。我不會評論哪些客戶有沒有對他們出貨，你得去問他們。但我會說這仍然非常早期，我們預期未來幾季，北美都會區（metro）不論是 Verizon 以及 Verizon 以外的部分，都會持續成長，確定如此，並延續到 2017 年。

Great, and just the other, follow-up in capacity constraints. Could you tell us which products specifically are most constrained? Thanks.

很好，另外一個關於產能限制的追問。你們能否告訴我們，具體哪些產品的產能最受限？謝謝。

Sure. Maybe it would be easier to say which ones weren't. The lower speed datacom products, 10 gig, 40 gig, got plenty of capacity there. Last quarter, we saw a downtick in submarine volumes and that's very project-based. We had capacity last quarter, and now we don't have capacity. We are sold out as projects came online and orders came in.

當然。也許反過來說哪些沒有受限會更容易。較低速的數據通訊（datacom）產品，10G、40G，那邊產能很充足。上季我們看到海底（submarine）出貨量下滑，而那非常取決於專案。上季我們有產能，但現在沒有了。隨著專案上線、訂單進來，我們已經賣到缺貨。

ROADMs are sold out. ROADM line cards are sold out, 980 pumps, even tunable SFP and tunable SFP+ at 10 gig are very tight. I would say that is kind of hitting the main points.

ROADM 已經賣光了。ROADM 線卡也賣光了，980 泵浦（pumps），甚至 10G 的可調式 SFP 與可調式 SFP+ 都非常吃緊。我想這大致涵蓋了重點。

Thank you very much.

非常感謝。

(multiple speakers) The 100 gig (technical difficulty) sure is very, very tight. Sorry.

（多位講者）100G（技術問題）確實非常、非常吃緊。抱歉。

Doug Clark, Goldman Sachs.

Doug Clark，高盛。

Thanks for taking my questions. My first one is just a clarification on a comment that you made in the prepared remarks. You said in terms of some of the capacity constraints you had some challenges with some suppliers to meet demand. Is that capacity constraints on their end or was there something else that you were alluding to?

謝謝讓我提問。第一個問題是針對你在事先準備的發言中提到的一點做個釐清。你說就某些產能限制而言，你們在一些供應商端要滿足需求時遇到挑戰。那是他們端的產能限制，還是你暗示了其他原因？

No, it's capacity constraints on their end mostly.

不，主要是他們端的產能限制。

Okay.

好的。

And not (technical difficulty) -- not being able to train or ramp up to the levels that we needed them to, to utilize the capacity that we put online.

以及（技術問題）——他們無法訓練或把產能爬坡到我們需要的水準，以便利用我們已上線的產能。

Okay, that's helpful. And then a bit of a housekeeping item. In terms of next quarter datacom versus telecom, can you give us any insight into what you expect to be relatively stronger?

好的，這很有幫助。接著是一個比較行政性的問題。就下季 datacom 相對於 telecom 而言，你們能否提供一些你們預期哪一塊會相對更強的看法？

So -- this is Aaron. So, in terms of telecom, we expect telecom to be up probably 3% to 5%. Datacom is probably flattish, primarily because 100 gig will grow, but the lower speeds 10 and 40 gig will drop off -- it's more competitive.

所以——我是 Aaron。就 telecom 而言，我們預期 telecom 可能成長約 3% 到 5%。Datacom 可能大致持平，主要是因為 100G 會成長，但較低速的 10G 與 40G 會下滑——那一塊競爭更激烈。

And is that competitiveness in 10 and 40 gig, is that incremental to what we have seen? I know it has been a fairly competitive market. Now I am wondering if that is increasing or changing further still?

而 10G 與 40G 的競爭激烈程度，是相較於我們已經看到的情況又更進一步嗎？我知道那一直是個相當競爭的市場。我想知道現在是否還在加劇或進一步改變？

I would say it is continuing to a lower slope than it had been last year, but at the same time the margins were bad and a detriment -- degradation of ASPs on that business make us kind of wonder why we would be bidding on that kind of stuff. But others are willing to do that. We're just not.

我會說它仍在延續，但斜率比去年低；同時那邊的毛利本來就差，而且是拖累——該業務 ASP 的下滑讓我們有點懷疑為什麼要去投標那類東西。但其他人願意做。我們就是不做。

Okay, got it. That makes sense. And then final question for me on the North American metro deployments and particularly your ROADM competitive position. Are you still the sole-source supplier into both customers? Or have you started to see more competition as volume deployments ramp?

好的，了解。這很合理。最後一個問題是關於北美都會區部署，特別是你們在 ROADM 的競爭地位。你們目前仍是兩家客戶的唯一供應來源（sole-source supplier）嗎？還是隨著量產部署爬坡，你們開始看到更多競爭？

I don't have a crystal ball, and certainly the procurement organizations aren't going to tell us that they are not qualified. But I will say that looking at the overall demand, we are getting a very, very high portion of that. So, I think it's best to ask Jerry.

我沒有水晶球，而且採購單位當然不會告訴我們他們沒有完成資格認證。但我會說，從整體需求來看，我們拿到的比例非常、非常高。所以，我想最好去問 Jerry。

Got it. Thanks for taking my questions.

了解。謝謝讓我提問。

Patrick Newton, Stifel.

Patrick Newton，Stifel。

Alan and Aaron, thank you for taking my questions. I guess just dovetailing off that prior qualification question on ROADM, I guess given that we are now moving into the deployment phase, do you anticipate that you're going to ultimately end up with higher share during the deployment phase than maybe your expectation six or 12 months ago?

Alan 和 Aaron，謝謝讓我提問。我想延續前面關於 ROADM 資格認證的問題，既然我們現在正進入部署階段，你們是否預期在部署階段最終會拿到比六到十二個月前預期更高的市占？

Oh, yes, I mean, I didn't expect to have 100% into the June quarter. I think it is all going to depend on how we perform and how we support our customers. And the last thing they want to do is interject variation into a deployment of a major city. So, I would say we are in a pretty good position today.

喔，是的。我的意思是，我原本沒預期在 6 月季度會拿到 100%。我認為這完全取決於我們的表現，以及我們如何支援客戶。客戶最不想做的，就是在一個主要城市的部署中引入變異。所以我會說，我們今天的位置相當不錯。

That doesn't mean that three months from now we don't have 100% share. I would say that we are focused on making sure that our customers get exactly what they need and the quality that they need, so they don't have a reason to want to buy from someone else.

但這不代表三個月後我們仍會有 100% 的市占。我會說我們專注於確保客戶拿到他們需要的東西，以及他們需要的品質，讓他們沒有理由想去跟別人買。

Great, and then I guess we are still a couple of months ahead of annual pricing negotiation, but it seems like if there is any type of environment that would allow for Lumentum and the industry to have a more rational pricing, this would be it. So, I'm curious to get your thoughts on whether you think it is possible that we could see pricing towards the lower end of the historical range?

很好。接著我想我們距離年度價格談判還有幾個月，但看起來如果有任何環境能讓 Lumentum 與整個產業採取更理性的定價，現在就是。想請教你對於是否可能看到價格落在歷史區間較低端的看法？

That's certainly my expectation.

那確實是我的預期。

It's great to hear. Thank you, good luck.

很高興聽到。謝謝，祝順利。

Michael Genovese, MKM Partners.

Michael Genovese，MKM Partners。

Should I take -- given your answer to the last couple of questions about the ROADM situation, competitively, for Verizon, should we take it to assume that you haven't changed or accelerated capacity addition plans as a response to the competitors' late qualification on that account, but you just stuck to the same plan you were originally on? Is that the takeaway?

我是否應該——基於你對前幾個關於 ROADM 情況與 Verizon 競爭面的回答——理解為：你們並沒有因為競爭對手在該客戶上的資格認證較晚，而改變或加速擴產計畫，而是照原本的計畫走？這是重點嗎？

No, I would say we changed our trajectory of capital expenditure for ROADM and ROADM line cards probably back in the February time frame, when it was clear that we were going to get the vast majority, if not all of it, until at least this point in time. So, the decisions we made in February impact what we have today coming online, and the decisions we make today would impact what would be online in the first calendar quarter.

不，我會說我們大概在 2 月的時間點就改變了 ROADM 與 ROADM 線卡的資本支出軌跡，當時很清楚我們將取得絕大多數、甚至全部的份額，至少到目前為止。因此我們在 2 月做的決策，影響了今天上線的產能；而我們今天做的決策，會影響到日曆年第一季上線的產能。

And, so, I am not assuming we are going to maintain 100% share into 2017. But as we get closer to that, we will have to decide with our customers and make sure that we don't buy capacity that is not going to go utilized.

所以，我並不假設我們會在 2017 年仍維持 100% 的市占。但當我們更接近那個時間點時，我們必須與客戶一起做決定，並確保我們不會買進不會被使用的產能。

Okay, great. So, given that, but also given that you have this slope of overall capacity addition that seems to be accelerating in 1Q into the -- into 2Q of the year, are you comfortable with -- should we be modeling -- I know you don't like to give guidance, but should we be modeling the sequential growth in optical comm in 2Q higher than 1Q? Or is the prospect of more competition in ROADMs an offset to that, that we should take into account?

好的，很好。那麼在此基礎上，同時考量你們整體擴產的斜率似乎在 1Q 到——到 2Q 之間加速，你們是否有把握——我們是否應該在模型中——我知道你們不喜歡提供指引——把光通訊（optical comm）在 2Q 的季增率建得比 1Q 更高？還是 ROADM 競爭加劇的可能性會抵銷這點，需要我們納入考量？

Well, like you say, we don't want to give guidance more than one quarter at a time. I would say that, putting aside even ROADM, that the hyperscale data center guys are a big opportunity for us to grow our topline revenue in datacom in the second fiscal quarter more than the first fiscal quarter, as we're bringing on more capacity this quarter.

嗯，如你所說，我們不想一次提供超過一季的指引。我會說，即便先不談 ROADM，超大規模（hyperscale）資料中心客戶對我們而言是很大的機會，讓我們在第二個會計季度的 datacom 營收成長幅度高於第一個會計季度，因為我們本季正在導入更多產能。

ROADMs -- like I said, we are probably one or two cities into North America deployment, and I don't have a crystal ball as to how fast they will deploy those cities and which cities will be next. So, it is hard for me to really predict what will happen in the [pending] fiscal quarter.

至於 ROADM——如我所說，我們大概只在北美部署中進入了一到兩個城市，我也沒有水晶球能知道他們會多快部署這些城市、下一個會是哪個城市。所以我很難真正預測在接下來的會計季度會發生什麼。

Okay, I know I am breaking the rule here by asking one more follow-up, but on the web scale stuff, just in terms of last quarter and the next quarter going forward, is the sequential 100G datacom growth -- is that coming more from QSFP28 or more from CFP, CFP2 and maybe CFP4?

好的，我知道我在這裡破例又多問一個追問，但關於 web scale 這塊，就上季以及接下來一季的走勢而言，100G datacom 的季增——主要是來自 QSFP28，還是更多來自 CFP、CFP2 以及可能的 CFP4？

Yes, it is mostly from the CFP2/CFP4 growth. The QSFP28 number is still low to mid-single-digit-millions, whereas the CFP2 is very large. We didn't participate in CFP, so that's why we are seeing probably more growth than our competitors. As we -- as the CFP shift to CFP2 is happening, we're getting that share gain through having a good product at the right time.

是的，主要來自 CFP2/CFP4 的成長。QSFP28 的金額仍在低到中個位數百萬美元的水準，而 CFP2 則非常大。我們沒有參與 CFP，所以我們看到的成長可能比競爭對手更多。隨著 CFP 轉向 CFP2 的趨勢發生，我們因為在對的時間推出好的產品而取得市占提升。

Super helpful. Thank you.

非常有幫助。謝謝你。

Sure.

當然。

Dave Kang, B. Riley.

Dave Kang，B. Riley。

First question is, so because of the capacity situation, how much revenue was left on the table because of that?

第一個問題是，因為產能狀況的關係，有多少營收因此而未能實現（被迫放在桌上）？

Yes. Well, that's a good -- it's a tough question. We certainly --

是的。嗯，這是個好——但也很難回答的問題。我們確實——

I think you said something like $10 million to $20 million last quarter, the third quarter -- yes, third quarter, I believe?

我記得你上季（第三季——對，第三季，我想是）提到大概有 1,000 萬到 2,000 萬美元？

Yes, it is probably similar if not a little bit higher than it was the quarter before.

是的，可能差不多，甚至可能比前一季略高一些。

Okay. And then what was the mix -- I guess I can work out the numbers, but what was the mix between TrueFlex and legacy ROADM? And what you think that will be by the end of this calendar year?

好的。那麼組合方面——我想我可以自己算數字，但 TrueFlex 與傳統 ROADM 的占比是多少？以及你認為到今年曆年年底會變成什麼樣？

TrueFlex was roughly 80% of the total revenue -- revenue volume compared to legacy.

TrueFlex 約占總營收——相較於傳統產品的營收量——大約 80%。

Okay, so can we expect that to be 90% by end of this calendar year?

好的，所以我們可以預期到今年曆年年底會到 90% 嗎？

I would expect it to be at least 90%, yes.

我預期至少會到 90%，是的。

And what does that do to your margins? What kind of a lift can we expect?

那對你們的毛利率有什麼影響？我們可以期待多大的提升？

I think in our guidance for this quarter, we are expecting some uplift from gross margins. New products have higher margins than older products, and that's why we're walking away from some of the lower speed datacom stuff and focusing on the better-margin newer products. And ROADMs are, right, the new products that we are focusing on continuing to ramp.

我認為在我們本季的指引中，我們預期毛利率會有一些上升。新產品的毛利率高於舊產品，這也是為什麼我們正在退出一些較低速率的資料通訊（datacom）產品，並把重心放在毛利較佳的新產品上。而 ROADM 正是我們聚焦並持續放量爬坡的新產品。

Sure. And the last question is, how are the modulators and iTLAs doing in terms of growth. Are they keeping up with other newer products? Are they slowing down? Or any comments on that?

了解。最後一個問題是，調變器（modulators）和 iTLA 的成長表現如何？它們有跟上其他新產品嗎？有放緩嗎？或有任何評論？

The modulators actually grew over 30% sequentially -- 25%, 26% year-over-year, so in terms of growth, it is still there.

調變器其實季增超過 30%——年增 25%、26%，所以就成長而言，動能仍在。

Okay, what about iTLAs?

好的，那 iTLA 呢？

ITLAs, we are very capacity-constrained on iTLAs and it shares capacity with tunable XFP and tunable SFP+. I don't know that we want to get down to the level of detail, but I'd tell you that we are shipping everything that we possibly can, so I would be surprised if it didn't grow.

iTLA 方面，我們的產能限制非常嚴重，而且它與可調式 XFP 以及可調式 SFP+ 共用產能。我不確定我們是否想深入到那麼細的層級，但我可以告訴你，我們已經在盡可能出貨所有能出的量，所以如果它沒有成長我會很意外。

So, is there anything other than like a 10 gig, 40 gig datacom that is coming down that seems like offsetting some of the growth of your newer products?

所以，除了像 10G、40G datacom 這類下滑之外，還有沒有其他看起來在抵消你們新產品成長的項目？

Yes, like I said just a few minutes ago, the submarine revenue was down in Q4 by several-million-dollars, and we expect that to bounce back this quarter.

有的，正如我幾分鐘前提到的，海底（submarine）營收在第四季下滑了數百萬美元，而我們預期本季會反彈。

What about 3D? Are they -- were they down or flat? Or have we seen the bottom?

那 3D 呢？它們是下滑還是持平？或者我們已經看到谷底了嗎？

Yes, 3D and industrial diode lasers were down, so I think we were down about 22% sequentially last quarter.

是的，3D 與工業用二極體雷射（industrial diode lasers）都下滑了，所以我想我們上季季減大約 22%。

And do you think --?

那你覺得——？

We had mentioned 10G and 40G datacom were down sequentially.

我們也提到 10G 與 40G datacom 是季減。

Right, so in terms of 3D, I mean, have we seen the bottom? Or is there still more room for contraction here?

對，所以就 3D 而言，我是說，我們已經看到谷底了嗎？還是這裡仍有進一步收縮的空間？

No, it is pretty low.

沒有，已經相當低了。

Yes, it is a pretty low number, so in terms of the lumpiness, just a tiny uptick or downtick gives it a big percentage change, but not that material.

是的，數字已經很低了，所以就波動性而言，只要一點點上升或下降就會造成很大的百分比變化，但實質影響並不大。

Right.

了解。

But just on that point, Dave, just to be clear, we still are very focused on 3D sensing. We still believe we are the leader in 3D sensing and we're working on many, many applications that could come to fruition in 2017. So, we are by no means not happy with where we are on 3D sensing.

不過就這點，Dave，為了說清楚，我們仍然非常專注於 3D 感測。我們仍然相信我們是 3D 感測的領導者，而且我們正在推進非常多的應用，可能在 2017 年開花結果。所以，我們絕不是對目前 3D 感測的進展不滿意。

Could one of the applications be smartphone applications for cameras sensing?

其中一個應用會是智慧型手機的相機感測應用嗎？

Yes, we've been talking about mobile applications for 3D sensing, personal computers, automobiles, so we are involved in each and every segment of 3D sensing that you can imagine today.

是的，我們一直在談 3D 感測的行動裝置應用、個人電腦、汽車等，所以就你今天能想像到的 3D 感測各個領域，我們都有參與。

Got it. Thank you very much.

了解。非常感謝。

Thanks, Dave.

謝謝你，Dave。

Tim Savageaux, Northland Capital.

Tim Savageaux，Northland Capital。

It being the end of the fiscal year, I am going to ask about the detail on 10% customers or customer concentration in general. You mentioned bookings demand as being fairly broad-based and have called out strength in China, and at least building strength in metro. But I guess I will offer you the opportunity to tell us who the 10% customers were for the year in terms of -- and maybe some color on what sort of trends? I imagine you have a new -- if you can confirm that you do have a third one for the year?

既然是會計年度的最後，我想問一下關於 10% 客戶或整體客戶集中度的細節。你提到訂單需求相當廣泛，也點出中國的強勁表現，以及都會區（metro）至少正在增強的力道。但我想我也給你一個機會，請你告訴我們本年度的 10% 客戶是哪些——以及也許補充一些趨勢方面的說明？我猜想你們今年有新增——如果你能確認今年確實有第三個 10% 客戶？

And absent that, perhaps any color about geographic or market strength that has been driving the business over the last quarter or so?

如果不方便的話，也許可以談談過去一季左右推動業務的地理區域或市場強勢來源？

Hey, Tim, this is Aaron. So, in terms of 10% customers, we can't give you the specific names. They will be in our 10-K, which should be filed shortly, but we did have again three 10% customers in Q4. And for the full fiscal year, we do have the same three as 10% customers, and they will be disclosed in the 10-K.

嗨，Tim，我是 Aaron。關於 10% 客戶，我們無法提供具體名稱。它們會在我們即將提交的 10-K 中披露，應該很快就會申報。不過我們在第四季確實再次有三個 10% 客戶。而就整個會計年度而言，我們也同樣有這三個 10% 客戶，並會在 10-K 中揭露。

In terms of geography two are in North America, one is Asian based. In terms of strength, in terms of what we're seeing in terms of shipping, yes, roughly 30% of our volume shipping into China, Hong Kong, location, roughly between 15% and 20% probably remains inside of China, and the rest is exported out to Africa, Middle East and/or back into Europe.

就地理分布而言，其中兩個在北美，一個以亞洲為基地。就出貨所見的強勢而言，是的，我們大約 30% 的出貨量流向中國、香港等地點；其中大約 15% 到 20% 可能仍留在中國境內，其餘則出口到非洲、中東，和／或回流到歐洲。

Great. And if I could follow up very quickly on the capacity point. I mean, it looks like relative to kind of where -- how you were thinking the quarter would turn out on the last call, that you may have expected a little more growth in the way of optical communications and saw some perhaps unexpected strength on the laser side. Wonder if you could sort of confirm that's the case, given your comments on capacity constraints that seem like they were sort of beyond what you have been seeing consistently in terms of -- and that was -- seemed like more just timing before, versus maybe some plans that didn't come through?

很好。我想很快追問一下產能的問題。我的意思是，相較於你們在上次電話會議對本季結果的預期，看起來你們原本可能預期光通訊會有更高的成長，但雷射端似乎出現了一些可能出乎意料的強勁。想請你確認是否如此，因為你們提到的產能限制，感覺有點超出你們一貫所看到的狀況——之前看起來比較像是時點問題，而不是某些計畫沒有如期發生？

Despite that, you were able to execute very strong on the gross margin side to the extent that doesn't seem like it was sort of mix, increased mix of lasers that was driving margin so much as organic growth within optical comm. So, it doesn't seem like those capacity issues had any impact. But just in general, is that broadly correct in terms of maybe anticipating greater strength in comm and seeing some unexpected strength on the laser side?

儘管如此，你們在毛利率方面仍執行得非常強，這看起來不像是因為雷射占比提高而帶動毛利率，而更像是光通訊內生性成長所帶來的。因此看起來那些產能問題並沒有造成影響。但整體而言，是否大致正確：你們原本預期通訊端更強，而雷射端看到一些額外的強勢？

Yes, I wouldn't call it unexpected strength in lasers. I would say that we were pleasantly pleased with the progress we made in improving yields. The demand was always there for the lasers business, but we actually outperformed our plan with respect to output and yields on our lasers, so that was a good thing.

是的，我不會稱之為雷射的意外強勁。我會說，我們在提升良率方面取得的進展令人欣喜。雷射業務的需求一直都在，但我們在雷射的產出與良率上超出原先計畫，所以這是好事。

I will say that we did have some supplier shortages last quarter that impacted our ability to grow optical comm more than we wanted, but keep in mind that, while it's a small quarter-on-quarter growth, that the Q3 number was based on a 14-week quarter, so it's not apples-to-apples until -- you know, we're pretty pleased with our growth that we had on optical comms, and overall gross margin result of good mix, new products was really -- was nice.

我也要說，上季我們確實遇到一些供應商短缺，影響了我們讓光通訊成長到我們想要的程度。但請記得，雖然季對季成長看起來不大，第三季的數字是基於 14 週的一季，所以並非完全可比——你知道的，我們對光通訊的成長表現相當滿意，而整體毛利率結果來自良好的產品組合與新產品，確實——表現不錯。

Okay, thanks very much and congrats on the strong results.

好的，非常感謝，也恭喜你們有很強的成果。

Thanks, Tim.

謝謝你，Tim。

Richard Shannon, Craig-Hallum.

Richard Shannon，Craig-Hallum。

Thank you for taking my questions as well. Maybe just a couple for me. First of all, Alan, on the 100 gig datacom, specifically on the CFP family of products, can you talk about qualitatively the extent to which this growth you're seeing just coming from share gains versus market growth here?

也謝謝你們回答我的問題。我這邊可能只有兩個。首先，Alan，關於 100G datacom，特別是 CFP 系列產品，你能否從質性角度談談，你們看到的這些成長，有多少是來自市占提升、又有多少是來自市場本身的成長？

And I think I may have missed your -- any comments you made about -- within that family of CFP2 versus the 2 or the 4 relative growth between all those individual product lines. Can you just give more detail there, please?

另外，我可能漏聽了你對——在該 CFP 系列中，CFP2 相對於 CFP4（或 CFP2 與 CFP4）之間的相對成長的評論。你能否提供更多細節？

Yes, so I would say the primary growth driver was CFP2 and not on the hyperscale data center. So we saw very, very strong CFP2 demand across several regions; although we did see growth in CFP4, it is at a much smaller level.

是的，所以我會說主要的成長驅動來自 CFP2，而且不是在超大規模資料中心（hyperscale data center）。我們在多個地區看到非常、非常強勁的 CFP2 需求；雖然我們也看到 CFP4 成長，但規模小得多。

I don't think that the 100 gig datacom market grew 40% last quarter, so I would say that we gained share. But that's mainly due to the fact that we didn't participate in CFP at all. So as a transition from customers consuming CFPs moved to the CFP4's, we get the benefit of having very, very solid and strong product in the CFP2 to capture that 100 gig part of the market. Does that answer --?

我不認為 100G 數據通訊市場在上一季成長了 40%，所以我會說我們是取得了市占率。但這主要是因為我們完全沒有參與 CFP。因此，當客戶從使用 CFP 轉向 CFP4 的過渡期間，我們受惠於在 CFP2 上擁有非常、非常扎實且強勁的產品，得以掌握 100G 這一部分的市場。這樣有回答到——？

Yes, that is very helpful. Thanks, Alan. Follow-up on the ROADM opportunity in China, I think you have commented on this in the past couple of quarters, but as you have gotten three more months of experience and education about how that market may develop, how do you think of the China opportunity for ROADMs, TrueFlex ROADMs versus what you see in North America or worldwide or however you want to compare it? But how would you compare the total market availability here?

是的，這非常有幫助。謝謝你，Alan。關於中國的 ROADM 機會再追問一下，我想你在過去幾季有評論過，但在你又多了三個月的經驗、也更了解那個市場可能如何發展之後，你怎麼看中國的 ROADM 機會——TrueFlex ROADM 相較於你在北美或全球看到的情況（或你想用任何方式比較）？你會如何比較這裡的整體市場可得性？

Well, I think I have gained confidence every month and every call that we have, on my belief, that TrueFlex ROADMs will be deployed in a meaningful way in China. I still feel confident --even more confident that I was last quarter.

嗯，我想我每個月、每次我們的電話會議，都更有信心，支持我一直以來的看法：TrueFlex ROADM 將會在中國以有意義的方式部署。我仍然有信心——甚至比上一季更有信心。

I think the change that has happened over the last year in China is their desire not to just be good enough, but to be technology leaders. And in order to be technology leaders, our customers are realizing they have to partner with the technology leader. And that's us.

我認為過去一年中國發生的改變，是他們不再只想做到「夠好」就好，而是希望成為技術領導者。而要成為技術領導者，我們的客戶正意識到他們必須與技術領導者合作。而那就是我們。

So we have gotten very, very close with the leading network equipment manufacturers in China, and doing things that we've never done before with respect to joint development budgets and things like that, that we typically had done with very much the rest of world. So, I think it's a different mindset that China has, and that's why I have gained confidence that they will be deploying our TrueFlex ROADMs in 2017.

因此，我們已經與中國領先的網路設備製造商建立非常、非常緊密的合作，並且在聯合研發預算等方面做了一些我們以前從未做過的事情——而這些通常是我們在世界其他地區才會做的。所以，我認為中國的思維模式不同，這也是為什麼我更有信心他們會在 2017 年部署我們的 TrueFlex ROADM。

Okay, perfect. That's great detail. I think that's all for me, guys. Thank you very much.

好的，完美。細節很棒。我這邊就到這裡了，各位。非常感謝。

Okay. Thanks.

好的。謝謝。

Alex Henderson, Needham.

Alex Henderson，Needham。

Can you just give us a simple directive on what kind of taxes we should be expecting on a quarterly basis over the course of 2017 now that we are going into a new fiscal year?

你能不能給我們一個簡單的指引，說明在我們進入新的會計年度之後，2017 年每一季大概會預期什麼樣的稅負？

Hi, Alex, this is Aaron. So roughly, 7% to 10% is going to be our effective non-GAAP tax rate through FY17.

嗨，Alex，我是 Aaron。大致上，FY17 期間我們的有效非 GAAP 稅率會在 7% 到 10% 左右。

And is that fairly stable quarter-to-quarter or is it -- does it have fluctuations in it?

那這個在各季之間算是相當穩定嗎？還是——會有波動？

Yes, it should be fairly stable quarter-to-quarter. It is dependent upon different geographical locations in terms of where income is earned, so it could vary a tiny bit, but that should be our average.

是的，各季之間應該會相當穩定。它取決於不同地理區域、也就是收入在哪裡產生，因此可能會有一點點變動，但那會是我們的平均水準。

And going back to the one segment that just is a mystery to me is industrial and consumer business. I know it moves a large percentage one way or the other, depending on which way it goes, but are we at a trough in that business? And would it start to flatten out and improve from here? Or can you give us any directive at all? Because I have no way how to forecast that otherwise.

再回到有一個對我來說很神祕的部門：工業與消費性業務。我知道它會依情況大幅度上下波動，但我們現在是在那個業務的谷底嗎？接下來會開始趨於平穩並從這裡改善嗎？或者你能給我們任何指引嗎？因為不然我完全不知道該怎麼預測。

Yes, I mean, I think, as I said that it is really two sensor products in that industrial and consumer segment. The first is pumps for fiber lasers pretty much. And so we sell to the manufacturers of fiber lasers. And if one of them wants to build some inventory to make sure they have it to meet their customer demands, they buy a bunch and then they burn it off, and that's what we saw last quarter.

是的，我的意思是，正如我說的，工業與消費性這個區塊其實主要是兩個感測產品。第一個基本上是用於光纖雷射的泵浦（pump）。因此我們是賣給光纖雷射的製造商。如果其中一家想建立一些庫存，以確保能滿足他們客戶的需求，他們就會一次買很多，然後再把庫存消化掉，而這就是我們上一季看到的情況。

I feel pretty confident that we have the absolute best pump in the industry. We are coming out with a next generation of fiber laser pumps for both internal use as well as external sales, so I would say that we expect to see further growth in that area. And then on the 3D sensing part of the business, I would say it is at a trough today. We have a lot of different applications that could alter that in calendar 2017, probably not change -- a lot of change here in calendar 2016.

我相當有信心我們擁有業界最好的泵浦。我們也正在推出新一代的光纖雷射泵浦，既供內部使用也對外銷售，所以我會說我們預期那一塊會持續成長。至於業務中的 3D 感測部分，我會說目前是在谷底。我們有許多不同的應用，可能在 2017 年曆年改變這個狀況，但在 2016 年曆年這裡大概不會有太多變化。

But we are going to continue to invest in 3D sensing applications, and I think we're going to see a broader range of products that offer 3D sensing into 2017.

但我們會持續投資 3D 感測應用，我認為在 2017 年我們會看到提供 3D 感測的產品範圍更廣。

So, is it -- it is going to gradually recover from the trough in the June quarter with a reflection of seasonality on some of those consumer products?

所以，它——會在 6 月那一季從谷底逐步回升，並反映某些消費性產品的季節性嗎？

I think it rebounds based on new product introductions. Today, the majority of the products we are selling are in notebook computers. There is the back-to-school rush that we probably already sold to it, and the expectation is the next generation of products for notebook computers will help make that business grow.

我認為它會隨著新產品導入而反彈。目前我們銷售的大多數產品是在筆記型電腦上。返校季的需求高峰我們可能已經出貨了，而預期筆記型電腦的下一代產品將有助於讓那項業務成長。

I think mobile devices in calendar 2017 can make those -- make it grow rapidly, but that's probably a binary flip of the switch in that it is either going to be in a product that is large or it is going to be delayed, but we are still going to -- we are committed to that business and we are going to invest -- continue to invest in it.

我認為 2017 年曆年的行動裝置可以讓那些——讓它快速成長，但那可能是「二元」的開關式結果：要嘛會被導入到一個規模很大的產品裡，要嘛就會延後；但我們仍然會——我們對這項業務有承諾，也會——持續投資。

So, one last question and I will cede the floor, the pump laser and amp business for the optical market, it seems pretty clear to me that part of the reason the telecom numbers are showing a little less growth is because you are shifting from selling amps to selling the pump lasers that are in them. As I understand it, the margins on that are better than -- on the pump lasers than the value of the pump lasers you have to put in the amp to sell it.

最後一個問題我就把時間讓出來：光學市場的泵浦雷射與放大器（amp）業務。在我看來很明顯，電信數字顯得成長稍微少一些，部分原因是你們正從賣放大器轉向賣其中的泵浦雷射。據我理解，泵浦雷射的毛利比——比你必須放進放大器裡、用來賣放大器的那部分泵浦雷射價值所帶來的毛利更好。

So, how much of the -- if we were to look at just the pump laser piece, what's the growth in that look like? And how much of a depressant is it as you outsource more pump lasers instead of building the amps yourself? How much of an impact is that on the revenues?

所以，如果我們只看泵浦雷射這一塊，它的成長看起來如何？另外，當你們把更多泵浦雷射外包、而不是自己製造放大器時，這會造成多大的抑制效果？對營收的影響有多大？

Well, I would say that last quarter we shipped more pump lasers than we have ever shipped in our history, and that is both internal consumption of products to go into North America metro as well as standalone amp and blade as well as external pumps.

嗯，我會說上一季我們出貨的泵浦雷射數量是公司歷史上最高的，這包括內部用於北美都會網路的產品消耗、以及獨立的放大器與刀鋒（blade），也包括對外銷售的泵浦。

You are right, though, we are getting out of the low-end amplifier business and shifting that to more useful higher-margin products just like pumps themselves or into super transport blades where we have significantly differentiation in our products. So I would say there is a little bit of drag from a revenue standpoint, but from a margin standpoint, we are working to optimize where we ship our pumps.

不過你說得對，我們正在退出低階放大器業務，並把重心轉向更有用、毛利更高的產品，例如泵浦本身，或是超傳輸刀鋒（super transport blades），在那裡我們的產品有顯著差異化。所以我會說從營收角度看會有一點點拖累，但從毛利角度看，我們正在努力最佳化泵浦的出貨配置。

I would say last quarter again, I don't know if you heard it or not, but we were down probably $5 million in submarine revenue the last quarter, and again those are very project-based cables that we are seeing an uptick again this quarter. So we think we could grow our submarine business back this quarter and throughout the year.

我再說一次，上一季——我不知道你有沒有聽到——我們的海底營收大概少了 500 萬美元；而且那類是非常以專案為主的海纜，我們這一季又看到回升。因此我們認為這一季以及全年都可以把海底業務再拉回成長。

Okay, I will cede the floor. Thanks.

好的，我把時間讓出來。謝謝。

Thanks, Alex.

謝謝你，Alex。

Thank you. And that concludes the questions. And I would now like to turn the call back over to Alan Lowe.

謝謝。以上問答結束。接下來我想把電話交回給 Alan Lowe。

Thank you, operator. It has been exciting time over the past year for Lumentum. I want to thank our employees for all of their hard work in creating a standalone, independent company and putting us in an excellent position in the market. We continue to see strong market demand from our customers, and I believe we are in the early stages of a worldwide bandwidth expansion, making the future bright at Lumentum.

謝謝你，接線員。過去一年對 Lumentum 來說是令人振奮的一段時間。我想感謝我們的員工，辛勤努力打造一家獨立運作的公司，並讓我們在市場上處於極佳的位置。我們持續看到客戶端強勁的市場需求，我相信我們正處於全球頻寬擴張的早期階段，讓 Lumentum 的未來一片光明。

We regularly discuss our business at Investor Relations events. These events are listed on our website in the Investor Relations section and regularly updated.

我們會在投資人關係活動中定期討論我們的業務。這些活動列在我們網站的投資人關係專區，並會定期更新。

This concludes our call for today. We would like to thank everyone for attending. We look forward to talking to you again in another three months.

今天的電話會議到此結束。我們要感謝各位的參與。期待三個月後再次與各位交流。

Thank you.

謝謝。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day.

各位女士、先生，感謝各位參與今天的會議。節目到此結束。各位可以掛線。祝各位今天愉快。