Lumentum Holdings Inc. (LITE) 2019 Q1 法說會逐字稿

Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 Fiscal Year '19 Lumentum Earnings Conference Call. (Operator Instructions) After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Chris Coldren, Interim Chief Financial Officer, Senior Vice President, Strategy and Corporate Development, please begin your conference.

早安。我叫 Emily，今天將擔任本次會議的接線員。此刻，我謹代表公司歡迎各位參加 Lumentum 2019 會計年度第一季（Q1）財報電話會議。（接線員指示）在講者致詞後，將進行問答環節。（接線員指示）謝謝。Chris Coldren，代理財務長、策略與企業發展資深副總裁，請開始您的會議。

Thank you, Emily. Welcome to Lumentum's First Quarter Fiscal 2019 Earnings Call. This is Chris Coldren, Interim Chief Financial Officer, Senior Vice President of Strategy and Corporate Development. Joining me on today's call is Alan Lowe, President and Chief Executive Officer.

謝謝你，Emily。歡迎各位參加 Lumentum 2019 會計年度第一季財報電話會議。我是 Chris Coldren，代理財務長、策略與企業發展資深副總裁。今天與我一同出席電話會議的還有總裁暨執行長 Alan Lowe。

This call will include forward-looking statements, including statements regarding the markets in which we operate, including potential market sizes; trends and expectations for products and technology, including product development and projected new product releases; purchasing trends and demand for our products; our expected financial performance, expenses and position in the market; as well as statements regarding our pending acquisition of Oclaro.

本次電話會議將包含前瞻性陳述，包括有關我們所營運市場的陳述（含潛在市場規模）；有關產品與技術的趨勢與預期（含產品開發與預計新產品發表）；我們產品的採購趨勢與需求；我們預期的財務表現、費用與市場地位；以及有關我們擬收購 Oclaro 之交易的相關陳述。

These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectation. We encourage you to review our most recent filings with the SEC, particularly the risk factors described in our 10-Q filing for our first quarter fiscal 2019, which we expect will be on file with the SEC later today; our 10-K filing, which was filed with the SEC on August 28, 2018; and the registration statement on Form S-4 relating to our pending acquisition of Oclaro, which was declared effective on May 31, 2018.

這些陳述受風險與不確定性影響，可能導致實際結果與我們目前的預期出現重大差異。我們鼓勵各位查閱我們最近向美國證券交易委員會（SEC）提交的文件，特別是我們 2019 會計年度第一季 10-Q 申報文件中所述的風險因素（我們預期將於今日稍晚向 SEC 存檔）；我們於 2018 年 8 月 28 日向 SEC 提交的 10-K 申報文件；以及與我們擬收購 Oclaro 相關、以 S-4 表格提交之註冊聲明（已於 2018 年 5 月 31 日宣告生效）。

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 obligations to update these statements, except as required by applicable law.

我們在本次電話會議中所提供的前瞻性陳述（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。除非適用法律另有要求，Lumentum 不承擔更新這些陳述之任何義務。

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.

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。

Our press release with our first quarter fiscal 2019 results is available on our website www.lumentum.com under the Investors section and includes additional details about our non-GAAP financial measures and a reconciliation between our GAAP and non-GAAP results. Our website also has our latest SEC filings, which we encourage you to review, and supplementary slides relating to today's earnings release.

我們公布 2019 會計年度第一季業績的新聞稿可於我們網站 www.lumentum.com 的「投資人」專區取得，並包含有關我們非 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。我們網站亦提供最新的 SEC 申報文件（我們鼓勵各位查閱），以及與今日財報發布相關的補充簡報投影片。

A recording of today's call will be available by 11:30 a.m. Pacific Time this morning on our website.

今日電話會議的錄音將於今天上午 11:30（太平洋時間）前後在我們網站上提供。

Before turning the call over to Alan, we have some additional comments relating to the pending acquisition of Oclaro. First, today's call is not an offering of securities. The information disclosed today is qualified in its entirety by the S-4 proxy statement/prospectus on file with the SEC in connection with the proposed transaction. We encourage security holders to read the joint proxy statement/prospectus and other documents filed with the SEC carefully as they contain important information about this pending transaction.

在把電話會議交給 Alan 之前，我們還有一些與擬收購 Oclaro 相關的補充說明。首先，今日電話會議不構成任何證券之要約。今日所揭露之資訊，其全部內容均以就該擬議交易向 SEC 存檔之 S-4 委託書聲明／公開說明書為準。我們鼓勵證券持有人仔細閱讀聯合委託書聲明／公開說明書及其他向 SEC 提交的文件，因其包含有關此項擬議交易的重要資訊。

Further, on the pending Oclaro transaction, we previously mentioned that we have received HSR approval and that Oclaro stockholders approved the transaction at their meeting in July. This merger is subject to certain other closing conditions, including antitrust regulatory approval in China. We continue to work with Oclaro in receiving antitrust approval in China and completing this pending transaction.

此外，關於擬議的 Oclaro 交易，我們先前提到已取得 HSR 核准，且 Oclaro 股東已於 7 月的股東會中核准該交易。本次合併仍須符合其他若干交割條件，包括在中國取得反壟斷監管核准。我們將持續與 Oclaro 合作，以取得中國的反壟斷核准並完成此項擬議交易。

Finally, during the Q&A session, please keep in mind that the focus of this call is our earnings report and guidance, and we will not be sharing incremental information relating to the status of our pending acquisition of Oclaro beyond our prepared remarks. None of the trends, uncertainty or guidance discussed today take into account Oclaro.

最後，在問答環節中，請記得本次電話會議的重點是我們的財報與財測指引；除我們事先準備的講稿外，我們不會就擬收購 Oclaro 的進度狀態分享額外資訊。今日所討論的任何趨勢、不確定性或指引均未納入 Oclaro。

Now, I would like to turn the call over to Alan for his continents and first quarter market and product highlights.

現在，我想把電話會議交給 Alan，請他發表評論並分享第一季市場與產品重點。

Thank you, Chris. Good morning, everyone. I'm very pleased to be here discussing our first quarter results. Strong telecom and fiber laser demand along with 3D sensing expansion across multiple customers and their products drove solid first quarter results. Revenue was up 18% quarter-on-quarter and 46% relative to the prior year. We achieved new record revenues in ROADMs and fiber lasers.

謝謝你，Chris。各位早安。我很高興能在此與各位討論我們第一季的業績。強勁的電信與光纖雷射需求，加上 3D 感測在多家客戶及其產品上的擴展，帶動第一季交出穩健的成績。營收較前一季成長 18%，較去年同期成長 46%。我們在 ROADM 與光纖雷射方面創下新的營收紀錄。

During the quarter, we also made great progress on key new product introductions that we believe will help drive continued growth into fiscal 2020 and beyond. These include first shipments of, number one, the highest port count WSS in the industry, our twin 1x35; two, first products based on our new disruptive MxN ROADM platform; three, fiber laser products based on our 4 kilowatt single module that delivers industry-leading brightness and enables even higher performance and lower cost per machine to customers; and finally, [time like] VCSEL arrays which enable world-facing consumer mobile applications, including shipments to Android customers.

本季我們在關鍵新產品導入方面也取得重大進展，我們相信這將有助於推動 2020 會計年度及其後的持續成長。這些包括：第一，業界最高埠數的 WSS（我們的雙 1x35）首次出貨；第二，基於我們全新、具顛覆性的 MxN ROADM 平台的首批產品；第三，基於我們 4 千瓦單模組的光纖雷射產品，提供業界領先的亮度，並使客戶能達到更高效能與更低的單機成本；最後，[time like] VCSEL 陣列，可支援面向外側的消費性行動應用，包括對 Android 客戶的出貨。

Increasing customer demand, our differentiated products and design wins and investments in additional production capacity set the stage for our second quarter as well as the years to come.

客戶需求增加、我們具差異化的產品與設計導入（design wins），以及對額外產能的投資，為我們第二季以及未來數年奠定了基礎。

Our year-over-year improvement in financial performance highlights that our strategy of investing in differentiated products and multiple end markets each critically dependent on photonics and driven by strong long-term trends is succeeding. The world is becoming more reliant on ever increasing amounts of data flowing through optical networks and data centers. Globally, regardless of who is supplying the optical networking equipment or who is deploying the network, the products and technologies Lumentum supplies are essential.

我們財務表現的年對年改善，凸顯我們投資於差異化產品與多元終端市場的策略正在奏效；這些市場皆高度依賴光子技術，並受強勁的長期趨勢所驅動。世界正日益依賴大量且持續成長的資料流，穿梭於光纖網路與資料中心之中。在全球範圍內，不論是由誰供應光網路設備或由誰部署網路，Lumentum 所提供的產品與技術都至關重要。

Higher levels of precision, new material and factory and energy efficiency are all increasingly important to manufacturers around the world. To address these trends, suppliers of manufacturing tools globally are turning more and more to laser-based approaches and the types of lasers that we supply.

更高的精密度、新材料，以及工廠與能源效率，對全球製造商而言都愈來愈重要。為因應這些趨勢，全球的製造工具供應商正愈來愈多地轉向以雷射為基礎的方法，以及我們所供應的各類雷射。

Laser-based 3D sensing is a rapidly developing market. The technology enablers computer vision applications that enhance security, safety and new functionality in the electronic devices that people rely on every day. With our proven high volume manufacturing strategy and learnings from having shipped hundreds of millions of devices, our primary focus is on new customer design wins and our new pipeline of products based on even more advanced laser designs, which are needed in order to meet increasing customer requirements.

以雷射為基礎的 3D 感測是一個快速發展的市場。該技術可促成電腦視覺應用，提升人們每日仰賴之電子裝置的安全性、保障性與新功能。憑藉我們經驗證的高量產製造策略，以及已出貨數億台裝置所累積的經驗，我們的主要重點在於取得新客戶的設計導入（design wins），並推進基於更先進雷射設計的新產品管線，以滿足客戶日益提高的需求。

We believe we are well positioned to continue to be the partner of choice for 3D sensing customers around the world over the coming years.

我們相信，未來數年我們已具備良好條件，持續成為全球 3D 感測客戶的首選合作夥伴。

Now I'd like to turn to first quarter product highlights. Revenue from our telecom product lines grew 7% sequentially, driven by a 10% or higher sequential growth in each of our ROADMs, pump lasers and optical amplifier product lines. Demand from customers -- from our customers for these products is very strong. While we have added significant manufacturing capacity, we are still not meeting our growing customer demand.

接下來我想談第一季的產品重點。我們電信產品線的營收較前一季成長 7%，主要受惠於 ROADM、幫浦雷射與光放大器產品線各自達到 10% 或以上的季增。客戶對這些產品的需求非常強勁。儘管我們已新增大量製造產能，但仍無法滿足持續成長的客戶需求。

In the second quarter, based on investment decisions made quarters ago, we expect additional production capacity to come online, particularly in our ROADM product line. The strong demand for our telecom products is spread across a broad customer base and is driven by an increase in global demand for next-generation optical networks. I believe it is important to highlight that in addition to an increase in the number of networks being built globally, we believe our growth in ROADMs is also driven by a fundamental shift in how optical networks are built. There is no practical way to accomplish that needed network capacity and agility, other than incorporating increasing numbers of even more advanced ROADMs.

在第二季，基於數季前所做的投資決策，我們預期將有額外產能上線，特別是在我們的 ROADM 產品線。我們電信產品的強勁需求來自廣泛的客戶群，並由全球對次世代光網路需求的提升所驅動。我認為重要的是要強調，除了全球建置中的網路數量增加之外，我們相信 ROADM 的成長亦受光網路建置方式的根本性轉變所驅動。若要達成所需的網路容量與靈活性，除了導入數量愈來愈多、且更先進的 ROADM 之外，並無實際可行的方法。

Speaking of even more advanced ROADMs, as mentioned earlier, during our first quarter, we shipped production volumes of our Twin 1x35 module and blade level product lines, which contained the highest port count WSS in the industry.

談到更先進的 ROADM，如先前所提及，在我們第一季期間，我們出貨了 Twin 1x35 模組與刀鋒層級（blade level）產品線的量產規模，該產品包含業界最高埠數的 WSS。

Additionally, during the first quarter, we shipped first products based on our new and disruptive and tension-less MxN ROADM platform. We expect volumes of these new products will increase into calendar 2019. Based on customer traction, we are adding even more capacity than we originally planned for these products.

此外，在第一季，我們也出貨了首批基於我們全新、具顛覆性且無張力（tension-less）的 MxN ROADM 平台之產品。我們預期這些新產品的出貨量將在 2019 年曆年持續增加。基於客戶的採用動能，我們正為這些產品增加比原先規劃更多的產能。

The MxN ROADM platform creates a new class of ROADM products. These products enable network operators to scale their networks with lower costs and higher density, reliability and power efficiency compared with our current state-of-the-art solutions.

MxN ROADM 平台創造了一個全新的 ROADM 產品類別。相較於我們目前最先進的解決方案，這些產品可讓網路營運商以更低成本、並以更高的密度、可靠性與電源效率來擴展其網路。

Turning to 3D sensing. First quarter 3D sensing shipments ramped slightly ahead of plan and were the primary driver for our growth in industrial and consumer diode laser product lines. Revenue from our industrial and consumer product lines was up 72% sequentially and up 154% relative to the same period last year. This strong growth was driven by earlier ramp of 3D sensing products into a broader array of models and device types at our customers compared with last year. We expect to continue to ramp production into the second quarter to meet strong customer demand.

接著談 3D 感測。第一季 3D 感測出貨量的爬坡略早於計畫，並成為我們工業與消費性二極體雷射產品線成長的主要驅動力。我們工業與消費性產品線的營收較前一季成長 72%，較去年同期成長 154%。這項強勁成長主要來自於相較去年，客戶將 3D 感測產品更早導入到更廣泛的機型與裝置類型。我們預期將在第二季持續提升產量，以滿足強勁的客戶需求。

We remain highly focused on broadening our 3D sensing customer base and product mix over time. Total revenue from multiple Android customers approximately doubled quarter-on-quarter. Since our last earnings call, additional customers have announced high-end 3D sensing-enabled devices. These new customer products demonstrate the wide appeal of 3D sensing functionality in mobile devices. We also believe these new customer products are the first step to broad incorporation of 3D sensing and lower priced higher volume devices in the years to come.

我們仍高度專注於隨時間擴大 3D 感測的客戶基礎與產品組合。來自多家 Android 客戶的總營收約較前一季倍增。自上次法說會以來，更多客戶已宣布推出支援高階 3D 感測的裝置。這些新客戶產品展現了 3D 感測功能在行動裝置中的廣泛吸引力。我們也相信，這些新客戶產品是未來數年 3D 感測被更廣泛導入、並進一步下探至更低價格且更高出貨量裝置的第一步。

We are engaged with additional Android customers who are yet to announce their products. Our product development pipeline is full. We are working with a wide range of new and existing customers on new laser designs that enable 3D sensing in a broad range of device types and price points. Similarly, these 3D sensing laser devices also bring new capability, such as world-facing 3D sensing, which increased the laser content per customer device. We also continue to work on 3D sensing and LiDAR automobile applications and expect this to be a growth driver in 2021 and beyond.

我們也正與其他尚未宣布其產品的 Android 客戶合作。我們的產品開發管線非常充實。我們正與廣泛的新舊客戶合作開發新的雷射設計，使 3D 感測能導入多種裝置類型與不同價位帶。同樣地，這些 3D 感測雷射裝置也帶來新的能力，例如面向外部（world-facing）的 3D 感測，進而提高每台客戶裝置中的雷射用量。我們也持續投入 3D 感測與 LiDAR 的車用應用，並預期這將在 2021 年及之後成為成長驅動力。

Within our Commercial Lasers business, we again achieved record revenues from our kilowatt class fiber laser, which grew 24% sequentially. During the first quarter, we benefited from capacity expansions and further ramped volumes of our newest fiber laser product to meet strong customer demand.

在我們的商用雷射（Commercial Lasers）業務中，我們的千瓦級光纖雷射再次創下營收新高，較前一季成長 24%。第一季期間，我們受惠於產能擴充，並進一步提升最新光纖雷射產品的出貨量，以滿足強勁的客戶需求。

As noted on our last call, we have also increased industrial diode pump capacity in our Thailand factory. These industrial diode pump lasers are at the heart of our fiber laser as well as those of our external pump customers. Our solid-state laser product lines were down sharply, which resulted in a larger-than-expected sequential decline in our total commercial laser's revenue. These products serve the semiconductor and consumer electronic application markets, which are usually seasonally soft in our first and second quarters. Manufacturers typically install laser-based equipment capacity in the spring and summer in anticipation of the annual fall consumer electronics cycle and holiday season.

如同我們上次電話會議所提到的，我們也已提高泰國工廠的工業用二極體泵浦產能。這些工業用二極體泵浦雷射是我們光纖雷射以及外部泵浦客戶產品的核心。我們的固態雷射產品線大幅下滑，導致我們商用雷射總營收較前一季的下滑幅度高於預期。這些產品服務於半導體與消費性電子應用市場，而這些市場通常在第一與第二季呈現季節性疲弱。製造商通常會在春季與夏季安裝以雷射為基礎的設備產能，以因應每年秋季的消費性電子週期與假期旺季。

This year, we believe we are seeing larger than normal seasonal declines, which could be related to overall market softness, as reported by some of our larger peers. While we aren't totally immune to market dynamics, with our rather limited market share, we have opportunities for growth more driven by new product design wins than market growth. As such, we are making healthy investments in new ways of product development and production capacity, targeting higher growth material processing applications.

今年，我們認為我們看到的季節性下滑幅度大於正常水準，這可能與整體市場疲弱有關，正如我們一些較大型同業所報告的。雖然我們並非完全不受市場動態影響，但由於我們的市占率相對有限，我們仍有更多由新產品設計導入（design wins）所驅動的成長機會，而非僅依賴市場成長。因此，我們正以健康的幅度投資於新的產品開發方式與生產產能，鎖定成長更快的材料加工應用。

Datacom revenue was down slightly sequentially as we continue to be selective in our sales of this margin challenge product area while we develop our next-generation 100G and 400G products. We continue to make progress on these new products and expect them to contribute in the years to come. However, in our second quarter, we expect a meaningful decline in our datacom revenue as we passed on certain unprofitable customer opportunities.

資料通訊（Datacom）營收較前一季小幅下滑，因為在我們開發下一代 100G 與 400G 產品的同時，對於此一毛利具挑戰的產品領域，我們持續採取較為審慎的銷售策略。我們在這些新產品上持續取得進展，並預期它們將在未來幾年帶來貢獻。然而，在第二季，我們預期資料通訊營收將出現明顯下滑，因為我們放棄了某些無利可圖的客戶機會。

Earlier in my remarks, I highlighted significant long-term trends that make the markets in which we participate increasingly dependent upon our photonic solutions and create terrific market opportunities for Lumentum. Our strong year-over-year improvement in results demonstrate that we continue to make good progress on our key strategic objectives to accelerate growth and drive sustainable margin expansion and customer and end-market diversification.

在我先前的談話中，我強調了幾項重要的長期趨勢，使我們所參與的市場愈來愈依賴我們的光子解決方案，並為 Lumentum 創造極佳的市場機會。我們的業績年對年顯著改善，證明我們在關鍵策略目標上持續取得良好進展，以加速成長、推動可持續的毛利率擴張，並實現客戶與終端市場的多元化。

We have a lot going on, and it is a very exciting time at Lumentum. I will now hand the call over to Chris for more details on our financial results and our guidance for the second quarter of fiscal 2019.

我們有很多事情正在推進，對 Lumentum 而言這是一段非常令人振奮的時期。接下來我將把電話交給 Chris，請他更詳細說明我們的財務結果，以及 2019 會計年度第二季的財測指引。

Thank you, Alan. Good morning, everyone. Net revenue for the first quarter was $354.1 million, which increased 18% sequentially and increased 46% compared with the same period last year. GAAP gross margin for the first quarter was 35.6%, GAAP operating margin was 16.1% and GAAP diluted net income per share was $0.72. First quarter non-GAAP gross margin was 40.3%, which increased 310 basis points sequentially and increased 630 basis points compared with the same period last year.

謝謝你，Alan。各位早安。第一季淨營收為 3.541 億美元，較前一季成長 18%，較去年同期成長 46%。第一季 GAAP 毛利率為 35.6%，GAAP 營業利益率為 16.1%，GAAP 稀釋後每股淨利為 0.72 美元。第一季非 GAAP 毛利率為 40.3%，較前一季提升 310 個基點，較去年同期提升 630 個基點。

Gross margin improvement relative to last quarter and the same period last year was driven by an increase in the mix of higher margin telecom and 3D sensing products as well as overall higher volumes. Non-GAAP operating margin for the first quarter was 23.9% and increased by 610 basis points sequentially and more than 1,200 basis points compared with the same period in the prior year.

相較於上一季與去年同期的毛利率改善，主要由較高毛利的電信與 3D 感測產品組合占比提升，以及整體出貨量增加所帶動。第一季非 GAAP 營業利益率為 23.9%，較前一季提升 610 個基點，較前一年度同季提升超過 1,200 個基點。

Operating expansion was primarily driven by gross margin expansion, combined with leverage over operating expense. Non-GAAP net income was $85.8 million for the first quarter and includes $1.7 million of other income and expense and a tax expense of $600,000 recognized in the quarter. Non-GAAP diluted net income per share was $1.31 based on a fully diluted share count of $65.4 million. The sequential decline in other income and expense was primarily driven by lower interest income as we move some of our short-term investments into cash holdings in preparation for the closing of the Oclaro acquisition.

營業利益率的擴張主要由毛利率擴張所驅動，並結合營業費用的槓桿效益。第一季非 GAAP 淨利為 8,580 萬美元，其中包含 170 萬美元的其他收益與費用，以及本季認列的 60 萬美元所得稅費用。非 GAAP 稀釋後每股淨利為 1.31 美元，係以完全稀釋後股數 6,540 萬股計算。其他收益與費用較前一季下滑，主要是因為在為完成 Oclaro 併購交易做準備之際，我們將部分短期投資轉為現金持有，導致利息收入降低。

Operating expenses totaled $57.9 million or 16.4% of revenue compared with $58.5 million or 19.4% of revenue for the prior quarter. R&D expense was $31.6 million and SG&A expense was $26.3 million.

營業費用合計為 5,790 萬美元，占營收 16.4%，相較於前一季的 5,850 萬美元、占營收 19.4%。研發費用為 3,160 萬美元，銷售、一般及行政（SG&A）費用為 2,630 萬美元。

Turning to segment and product line details. Our Optical Communications segment revenue at $310.1 million increased 27% sequentially and was up 49% relative to the same period in the prior year. Within our Optical Communications segment, Telecom revenue at $142.9 million was up 7% sequentially and 29% year-on-year. As Alan highlighted, transport products, including ROADMs, were significant contributors to the Telecom group. Datacom revenue at $34.2 million was down 1% sequentially, but down 24% year-on-year. Industrial and Consumer revenue at $133 million was up 72% sequentially and up 154% relative to the same period the prior year due to 3D sensing expansion into more customers, models and device types.

接著說明各事業部與產品線細節。我們光通訊（Optical Communications）事業部營收為 3.101 億美元，較前一季成長 27%，較前一年度同季成長 49%。在光通訊事業部內，電信（Telecom）營收為 1.429 億美元，較前一季成長 7%，年增 29%。如 Alan 所強調，傳輸產品（包括 ROADM）是電信事業群的重要貢獻來源。資料通訊（Datacom）營收為 3,420 萬美元，較前一季下滑 1%，但較去年同期下滑 24%。工業與消費性（Industrial and Consumer）營收為 1.33 億美元，較前一季成長 72%，較前一年度同季成長 154%，主因 3D 感測擴展至更多客戶、機型與裝置類型。

Optical Communications segment gross margin at 40.3% increased 550 basis points sequentially and 560 basis points year-on-year. The driver of expanded gross margins for the higher mix of industrial and consumer revenues, which were higher than segment average gross margin, improvements in telecom margins associated with the higher mix of higher margin products and a lower average manufacturing cost due to the higher volume.

光學通訊事業部毛利率為40.3%，較前一季增加550個基點，較去年同期增加560個基點。毛利率擴張的驅動因素包括：工業與消費性營收占比提高（其毛利率高於該事業部平均毛利率）、因高毛利產品占比提高而帶動的電信毛利率改善，以及因出貨量提升而使平均製造成本下降。

Our laser segment revenue at $44 million declined 22% sequentially but was up 25% relative to the same period in the prior year. Sales of our fiber laser saw strong growth both year-over-year and sequentially. However, as Alan highlighted, sales of our other laser products, which are primarily solid-state lasers, were down quarter-on-quarter and year-over-year. First quarter laser's gross margin was 40.2% and declined 770 basis points due to the significant increase in fiber lasers in the revenue mix and lower volumes of non-fiber laser.

我們雷射事業部營收為4,400萬美元，較前一季下滑22%，但較去年同期成長25%。我們的光纖雷射銷售在年對年與季對季皆呈現強勁成長。然而，如Alan所強調，我們其他雷射產品（主要為固態雷射）的銷售，無論季對季或年對年皆下滑。第一季雷射事業部毛利率為40.2%，因營收組合中光纖雷射占比大幅提高，以及非光纖雷射出貨量較低，毛利率下滑770個基點。

Turning to selected balance sheet-related items. We ended the first quarter with cash and short-term investments of $734.3 million, an increase of $22.8 million relative to the prior quarter. Net inventory declined $17 million sequentially as we consumed significant levels of 3D sensing inventory. Capital expenditures during the first quarter were 31.$1.

接著談幾項資產負債表相關重點。第一季結束時，我們的現金與短期投資為7.343億美元，較前一季增加2,280萬美元。淨存貨較前一季減少1,700萬美元，因我們消耗了大量3D感測存貨。第一季資本支出為31.$1。

Now onto our guidance for the second quarter of fiscal 2019, noting again that all projections are on a non-GAAP basis and do not take into account any effect from the acquisition of Oclaro as we currently cannot predict the timing of the closing. We project net revenue for the second quarter to be in the range of $405 million to $430 million with an operating margin in the range of 28% to 30% and diluted net income or earnings per share to be in the range of $1.60 to $1.75. Notable quarter-on-quarter change in product line revenue in our projections include Telecom being up, driven by continued transport product revenue growth, industrial and consumer being up due to the ongoing 3D sensing ramp, while Datacom being down due to again being selective in sales opportunity.

接下來是我們對2019會計年度第二季的財測指引；再次提醒，所有預估皆以非GAAP基礎呈現，且未納入收購Oclaro的任何影響，因為我們目前無法預測交割完成的時間點。我們預估第二季淨營收介於4.05億至4.30億美元之間，營業利益率介於28%至30%之間，稀釋後淨利或每股盈餘介於1.60至1.75美元之間。我們預估中各產品線營收的主要季對季變動包括：電信上升（受惠於傳輸產品營收持續成長）、工業與消費性上升（因3D感測持續放量），而數據通訊則下降（因我們仍將在銷售機會上採取選擇性策略）。

Before turning the call over to Emily to start the question-and-answer session, I would like to ask everyone to limit the discussion to one question and one follow-up. Emily, let's begin the question-and-answer session.

在把電話會議交給Emily開始問答之前，我想請各位將討論限制在一個問題與一個追問。Emily，我們開始問答環節。

(Operator Instructions) And our first question comes from the line of Alex Henderson from Needham.

(接線員指示) 我們的第一個問題來自Needham的Alex Henderson。

I wanted to just drill down a little bit on the Datacom side. So you're saying it's going to be down, I mean, is that -- are we talking about a kind of a 20% sequential decline, how big a nut is that? And then second on the industrial laser side, if you could talk about whether that would be down as well? Certainly, there's so much noise out there about weakness in the semiconductor space. I assume that that's pressuring you. On the other side of the coin, you didn't call that out at all. So I wondering if you can give us a little bit more granularity around those two pieces?

我想在數據通訊（Datacom）這一塊再深入一點。所以你們說會下滑，我的意思是——我們談的是大約20%的季對季下滑嗎？規模大概有多大？第二個問題是工業雷射這邊，你們能否談談是否也會下滑？目前市場上有很多雜音在談半導體領域的疲弱。我猜這正在對你們造成壓力。但另一方面，你們完全沒有特別提到這點。所以我想請你們就這兩部分提供更細的說明？

Yes. So, Alex, the Datacom business, I would say it's more in the 20% to 30% decline expected. And then on the laser's piece, we expect it to be flattish quarter-on-quarter, plus or minus.

是的。Alex，就數據通訊業務而言，我會說預期下滑大約在20%到30%之間。至於雷射部分，我們預期季對季大致持平，上下小幅波動。

And that's a function of you having new product growth that's driving that, offsetting industrial weakness?

所以這是因為你們有新產品成長在帶動，抵消了工業端的疲弱？

Well, as we said in the script, we continue to expect the seasonal weakness, although this year probably stronger than normal seasonal weakness, and some growth in the fiber lasers maybe offsetting that a little, but pretty much the mix and the revenue levels being roughly the same quarter-on-quarter.

嗯，正如我們在講稿中所說，我們仍預期會有季節性疲弱，雖然今年可能比正常的季節性疲弱更明顯；而光纖雷射的一些成長或許能稍微抵消，但整體而言，產品組合與營收水準大致會與前一季相近。

Our next question comes from the line of James Kisner from Loop Capital.

下一個問題來自Loop Capital的James Kisner。

So just quickly on the guidance. I was hoping you clarify a little bit you -- what you're expecting for gross margin and OpEx. I know you don't guide explicitly. It seems like you could have something like 43%, 40% gross margin. And then separately, just -- I was hoping you could -- you mentioned world facing -- hoping to give sort of your latest thoughts on that. I mean, you said it in March you’re going to see -- Alan sounded very confident it is something that would be broadly adopted in the handsets by second half of calendar next year. I'm just wondering if you could update us on that. Do you still feel confident about that, are you feeling more or less confident about that prognostication?

我想快速問一下關於指引。我希望你們能稍微釐清一下——你們對毛利率與營業費用（OpEx）的預期。我知道你們不會明確提供指引。看起來你們可能會有像43%、40%這樣的毛利率水準。另外，我也想——你們提到world facing——希望你們分享一下最新看法。你們在3月說過會看到——Alan聽起來非常有信心，認為在明年曆年下半年會在手機上被廣泛採用。我想請問你們能否更新一下？你們仍然對此有信心嗎？對這個預測你們現在是更有信心還是較沒信心？

Yes, we don't guide gross margin. I would expect gross margin -- I think, if I heard you correctly, it being in the 40% range, I think it's going to be higher than that. I think the piece that maybe is missed here is OpEx. We expect we'll be increasing. We had a bit lighter quarter on OpEx probably than expected given timing of some R&D offset payments we received from customers where we're developing products specifically for them as well as, as we entered the new fiscal year, we started trimming investment and less profitable product lines, which you can do pretty quickly and plan to grow investments in other more attractive product lines, and that tends to take a little bit more time as you need to hire people and ramp up spending. So I think that's probably more of the missing piece that you're hitting on and the guide is that the operating expenses should be coming up quarter-on-quarter.

是的，我們不提供毛利率指引。我預期毛利率——如果我沒聽錯，你說大概在40%區間——我認為會高於那個水準。我想這裡可能被忽略的部分是營業費用（OpEx）。我們預期OpEx會增加。我們這一季OpEx可能比預期稍低，主要因為時點因素：我們收到一些來自客戶的研發費用抵減/補償款（我們也在為他們開發特定產品）；此外，進入新的會計年度後，我們開始縮減對部分投資與獲利性較差產品線的投入，這可以很快做到；而我們計畫增加對其他更具吸引力產品線的投資，但那通常需要多一點時間，因為需要招募人員並逐步拉升支出。所以我認為你提到的、以及指引中較關鍵的缺口，可能就是營業費用將在季對季上升。

As far as -- this is how I'm going -- as far as the world-facing work, we are shipping today production volumes of world-facing. So I'm expecting that either products will be announced or have been announced imminently and should ramp through 2019. Again, as I said in my prepared remarks, today, they're going into high-end mobile devices and we expect that through 2019 and 2020, they'll be expanded to a broader range of product portfolio.

至於——我接著說——關於world-facing的進展，我們目前已在出貨world-facing的量產規模。因此我預期相關產品不是即將發布，就是已經在近期發布，並且應會在2019年逐步放量。同樣地，如我在事先準備的發言中所說，目前它們用於高階行動裝置，我們預期在2019年與2020年會擴展到更廣泛的產品組合。

And just to quickly follow-up, what I said was like 43%, 44% of it. Is mid 40s gross margin realistic, Chris, just to follow up?

再快速追問一下，我剛剛說的是大概43%、44%那樣。Chris，中段40%（mid 40s）的毛利率是否可行？就當作追問。

Mid 40s realistic, yes.

中段40%可行，是的。

Our next question comes from the line of Troy Jensen from Piper Jaffray. My apologies. It looks like Troy has left the queue.

下一個問題來自Piper Jaffray的Troy Jensen。抱歉。看起來Troy已離開排隊。

With that, we do have Simon Leopold from Raymond James.

接著我們有Raymond James的Simon Leopold。

Hard to stick to one question on this, but I'll try. Within your outcome, it looked like gross margins were nice improvement versus the last quarter. I know you don't disclose by the sub-segments, but did the improvement sequentially come from 3D or telecom? I'm just trying to get a sense of the sorts of what led to that improvement, what got better?

這題很難只問一個問題，但我會試著遵守。在你們的結果中，看起來毛利率相較上一季有不錯的改善。我知道你們不會按次分部揭露，但這個季對季改善是來自3D還是電信？我只是想了解一下，究竟是哪些因素帶動改善、哪些地方變得更好？

Yes. So I would say it's both. So as we highlighted, we shipped record revenues of our ROADM products, and they garner better than average telecom margins. So with an improvement in mix of products like pump lasers and ROADMs in the telecom piece, telecom is up and then certainly 3D sensing is above corporate average as well as above the overall optical Communications segment average gross margins. So the increasing 3D sensing as well as the industrial products that are in there in the mix continue to accrete gross margin.

是的。所以我會說兩者皆是。正如我們所強調的，我們的 ROADM 產品出貨創下營收新高，而且其電信毛利率優於平均水準。因此，隨著電信業務中如泵浦雷射與 ROADM 等產品組合改善，電信業務上升；而 3D 感測的毛利率也高於公司平均，並且高於整體光通訊事業部的平均毛利率。因此，3D 感測占比提高，以及其中的工業產品在組合中的提升，持續帶動毛利率上升。

And just to clarify that point though, did the 3D sensing gross margin get better or is it better because it's more in the mix? I'm just trying to get a sense of whether it improved. It's just a mix question.

不過我想釐清一下這點：3D 感測的毛利率是變得更好，還是因為它在產品組合中的占比提高所以看起來更好？我只是想了解是否真的有改善。這只是個組合問題。

I would say that given our manufacturing strategy, we tend to have a more variable cost. So we're not seeing huge increases in margin or with volume. But we do have some element of fixed costs and pricing from our suppliers that is volume dependent, if you will, and therefore, we have seen improvement quarter-on-quarter in 3D sensing gross margin.

我會說，基於我們的製造策略，我們的成本結構偏向較高的變動成本。所以我們不會因為出貨量增加就看到毛利率大幅提升。但我們確實有一些固定成本與供應商定價會隨量而變動的因素，因此我們看到 3D 感測毛利率在季度對季度有所改善。

And just as my follow-up, on the ROADM WSS business kind of guesstimated you're little bit over $70 million in the quarter. Can you help us understand where you are in terms of your targeted capacity, planned capacity, what's the most you're capable of producing?

另外追問一下，關於 ROADM WSS 業務，你們估計本季略高於 7,000 萬美元。能否協助我們了解你們目前的目標產能、規劃產能，以及你們最多能生產多少？

Well, the most we were capable of producing last quarter was what we produced. I mean, we've -- as I said in the prepared remarks, we have more demand than we're able to satisfy. And early this calendar year, we made decisions to add capacity that's coming online now and will continue to come online through the first calendar quarter of next year. So I would expect that from your baseline gas, we're going to continue to add significant capacity on a quarterly basis, I would say, of the magnitude we saw last quarter, if not greater.

嗯，我們上季能生產的最大量就是我們實際生產的量。我的意思是——如同我在事先準備的發言中提到的，我們的需求量大於我們能滿足的供給。而在今年年初，我們做出增加產能的決策，這些產能現在正在上線，並將持續在明年第一個曆年季度之前陸續上線。所以我預期，以你目前的基準估算來看，我們將會在每個季度持續增加顯著的產能，幅度大概會像上季看到的那樣，甚至更高。

So just rough math, you'd be at like 80-ish million kind of capacity?

所以粗略算一下，你們的產能大概會在 8,000 萬美元左右？

We certainly have demand beyond that and so we're trying to chase that as fast as we can both from added capacity as well as improved productivity and yields that we're seeing and we're focused on. So I don't think that's out of the question.

我們的需求確實超過那個水準，所以我們正盡可能快速追趕，包含增加產能，以及我們正在看到並專注改善的生產力與良率提升。所以我不認為那是不可能的。

Our next question comes from the line of Mark Kelleher from DA Davidson.

下一個問題來自 DA Davidson 的 Mark Kelleher。

I wonder if you could just talk a little bit more about 3D laser market, the market share there, what are you seeing in terms of competitive pressures, are you going up or down in your market share? We've been seeing company after company come out and say they had great 3D sensing revenue. So just wondering maybe -- and maybe compare that to the Android share versus the iPhone share and maybe talk a little bit about seasonality going into Q4 on 3D lasers as well? That'd be great.

想請你們再多談一點 3D 雷射市場、市占率的情況；你們看到哪些競爭壓力？你們的市占是在上升還是下降？我們看到一家公司接一家公司出來說他們的 3D 感測營收很亮眼。所以想請教——也許可以比較一下 Android 的占比與 iPhone 的占比，並且也談談進入第四季時 3D 雷射的季節性？那就太好了。

I think we're not going to be specific about what share we have at each customer and breaking it out the way you asked, we'd probably do that. I did say that we're very happy with the share that we've got both on today's products as well as the design efforts that we've got going for next generation of devices. So I'd say we still have a very, very high share. Doubling or tripling output on a small number is still a small number. So I would say that given our leadership position on manufacturing, on cost and on the design funnel that we've got and our ability to ramp our R&D investment in 3D sensing has been quite confident that we're going to have large share for the foreseeable future.

我想我們不會具體說明在每個客戶那裡的占比，也不會像你要求的那樣拆分。但我確實提到，我們對於目前產品的市占，以及我們針對下一代裝置所進行的設計導入工作，都非常滿意。所以我會說我們仍然擁有非常、非常高的市占。把一個小數字翻倍或翻三倍，仍然是小數字。因此我會說，憑藉我們在製造、成本與設計漏斗上的領先地位，以及我們提升 3D 感測研發投資的能力，我們相當有信心在可預見的未來仍將維持高市占。

And the seasonality in Q4, is that expected to be greater than Q3 calendar?

那第四季的季節性，預期會比第三季（曆年季度）更強嗎？

For 3D sensing?

你是指 3D 感測？

Yes.

是的。

So as we highlighted that our -- one of the primary drivers of growth quarter-on-quarter is going to be 3D sensing going into the December quarter.

所以如同我們強調的，我們在季度對季度成長的主要驅動因素之一，將會是在進入 12 月季度時的 3D 感測。

Our next question does come from the line of Troy Jensen from Piper Jaffray.

下一個問題來自 Piper Jaffray 的 Troy Jensen。

Alan, maybe for you, could you give us an update on Oclaro and just maybe your thoughts on timing to close the transaction? And I guess I'd be curious to know how their performance has been over the past six months since they've been kind of quiet?

Alan，可能請你更新一下 Oclaro 的情況，以及你對交易完成時點的看法？另外我也想知道，過去六個月他們相對低調，他們的表現如何？

well, I think you'd have to ask them, but I think, as Chris indicated in the prepared remarks, we're continuing to work with the China regulatory approval and continue to make progress there. But beyond that, it's hard to say. I can tell you we'll close within a couple of days of getting approval, and that's in the agreement. So that's why, for instance, our interest expense -- our interest income was down as we move more of our investments to cash in preparation of that. So we can't predict the future, but I would say that we're making progress and continue to be hopeful that it will happen sooner rather than later.

嗯，我想你得去問他們，不過我認為如同 Chris 在事先準備的發言中所指出的，我們持續推進中國的監管核准流程，並且持續取得進展。但除此之外，就很難說了。我可以告訴你，一旦取得核准，我們會在幾天內完成交割，這在協議中有明確規定。所以例如，我們的利息費用——我們的利息收入下降，是因為我們把更多投資轉為現金，以便為此做準備。我們無法預測未來，但我會說我們正在取得進展，並且仍然希望能夠早日成事。

Are there any hard deadlines in the contract where if you don't get some approvals in certain time frames that it gets shelved?

合約裡是否有任何硬性期限，如果在特定時間內拿不到某些核准，就會被擱置？

So, yes, certainly, the document is filed publicly, that there are dates that the transaction continues and if the outstanding item is antitrust approval, it will continue for an even further time period. But ultimately, yes, there is an outside date in all acquisition agreements generally.

所以，是的，相關文件已公開申報，其中確實有交易可延續的日期；如果未完成事項是反壟斷核准，交易還可以再延長一段時間。但最終，是的，一般所有併購協議通常都會有一個最晚截止日（outside date）。

Okay. Maybe just one last follow-up from me. Just the telco strength, seems like it's been a couple of quarters now where we've had really good results from you guys and even the rest of the industry last quarter, and we'll probably see it as a report more now in the next few weeks. But do you think the telco strength is sustainable? I mean, is the driver prepping for 5G, is it the 400G cycle, just update your thoughts on the sustainability of the stream.

好的。我最後再追問一個。電信端的強勁表現，看起來已經連續幾個季度了，你們的結果很好，甚至整個產業上季也很不錯，而接下來幾週我們可能會在更多公司財報中看到。但你認為電信端的強勁是可持續的嗎？驅動因素是為 5G 做準備嗎？是 400G 週期嗎？請更新一下你對這股動能可持續性的看法。

I'll give you my view on it and then Chris can chime in as well. I'd say we've got some fundamental growth drivers around ROADM deployments, not just in the regions where ROADMs have been strong, but also we are -- as we've been talking about for the last couple of years, we are seeing real ROADM deployments in China for RealNetworks and no more trials anymore. So I'd say that from that perspective, when you have more ROADMs, you have more amplifiers and more pump lasers, and that's what we saw from growth drivers in last quarter that I think fundamentally will be sustainable as we continue our differentiation in the Twin 1x35 and the MxN ROADM that really is getting a tremendous amount of traction.

我先分享我的看法，然後 Chris 也可以補充。我會說，我們在 ROADM 部署方面有一些基本面的成長驅動因素，不僅是在 ROADM 一直很強的地區；而且我們——如同過去幾年一直在談的——我們正在中國看到真正的 ROADM 部署，用於 RealNetworks，而且不再只是試點測試了。所以我會說，從這個角度來看，當你有更多 ROADM，就會需要更多放大器與更多泵浦雷射；這正是我們上季看到的成長驅動因素，我認為隨著我們在 Twin 1x35 與 MxN ROADM 上持續差異化、並獲得非常大的市場牽引力，這些因素在基本面上將會是可持續的。

Yes, and I'd add to that that certainly as we have commented in the script that we believe we're seeing a big shift in how networks are being built ultimately, which means over the long run, the ROADM and certainly all the other parts that go in and around ROADMS are an increasing part of network deployments, if you will, from a percentage spend standpoint. Compounding that, if I look at our percentage of revenue on ROADMs from customers outside of North America, it's lower than I would expect given the percentage market share that our customers outside North America have of their business if you were saying we were fully saturating the ROADM markets, but the reality is our customers outside North America, primarily in China, have been slower to adopt ROADMs particularly for domestic deployments, but are rapidly from a product design standpoint closing that gap, so we expect that there's a lot of upside just in bringing other geographies from a customer standpoint up to the same level that, for example, our North American customers have been spending on ROADMs. So we think obviously the telecom market can move around quite a bit. As Alan highlighted, we're sold out on those products and adding a lot of capacity. So I think short to medium term feels good and long-term feels good, but in between is always hard to handicap.

是的，而且我還想補充一點，正如我們在講稿中所評論的，我們相信我們正在看到網路建置方式最終出現重大轉變；這意味著從長期來看，ROADM，當然也包括所有圍繞 ROADM 的其他組成部分，若以支出占比來看，正日益成為網路部署中更大的一部分。此外，如果我看我們來自北美以外客戶的 ROADM 營收占比，這比我預期的要低；考量到北美以外客戶在其業務中的市占占比，如果我們說我們已完全滲透 ROADM 市場，這個占比應該更高。但現實是，我們北美以外的客戶（主要在中國）在採用 ROADM、尤其是用於國內部署方面一直較慢；不過從產品設計的角度來看，他們正在迅速縮小差距，因此我們預期僅僅是把其他地理區域的客戶支出水準提升到例如北美客戶在 ROADM 上的支出水準，就有很大的上行空間。所以我們認為，顯然電信市場可能會有相當大的波動。如 Alan 所強調的，我們這些產品已經售罄，並且正在增加大量產能。因此我認為短到中期感覺不錯，長期也感覺不錯，但中間那段期間總是很難判斷。

Our next question comes from the line of Samik Chatterjee from JPMorgan.

我們的下一個問題來自摩根大通（JPMorgan）的 Samik Chatterjee。

I just wanted to broadly ask you about if across your portfolio, you're seeing any impact on either demand from tariffs or even as you kind of guide into pretty strong margins, are you embedding in any kind of impact on margins from tariffs overall?

我想更廣泛地問一下，在你們的產品組合中，你們是否看到關稅對需求有任何影響？另外，當你們指引到相當強勁的毛利率時，你們是否在整體上把關稅對毛利率的任何影響納入考量？

Yes. So we did pay tariff last quarter. It was in the hundreds of thousands of dollars, less than a penny a share, and we factor that into our guidance going forward. I think fundamentally, we are -- we have been over the last couple of years in that transition period of moving out of a large contract manufacturer in China and into other contract manufacturers outside of China, including in Thailand, as well as our own factory in Thailand. So we've already seen some benefit and some flexibility with respect to shipping product out of our Thai facility to the US. Whereas if it happened a year ago, we'd be paying tariffs on those products. So that transition's happening over the next three or four quarters and from that perspective, we'll be producing very little in China. So I think we'll be in good shape.

是的。所以我們上季確實支付了關稅。金額是數十萬美元，不到每股一美分，我們也已將其納入未來的財測指引。我認為從根本上來看，過去幾年我們一直處於轉型期，將生產從中國一家大型合約製造商轉移到中國以外的其他合約製造商，包括泰國，以及我們在泰國的自有工廠。因此，就從泰國廠出貨到美國而言，我們已經看到一些效益與彈性。如果這件事發生在一年前，我們就會為這些產品支付關稅。所以這個轉移會在接下來三到四個季度內完成，從那個角度來看，我們在中國的產量將非常少。因此我認為我們會處於很好的狀態。

Yes, I think it's also good to add that the nature of our business, our customers are folks who build hardware and generally build that hardware in low-cost geographies, not in the United States. So even shipments that do come from China -- from our contract manufacturing partners in China generally land in places like China, Thailand or Mexico.

是的，我想也補充一點，我們業務的性質是，我們的客戶是做硬體的公司，而他們通常會在低成本地區生產硬體，而不是在美國。因此，即便有些出貨確實來自中國——也就是來自我們在中國的合約製造夥伴——通常也會落地在像是中國、泰國或墨西哥這些地方。

Okay. And if I can just follow-up on 3D sensing, I think in your prepared remarks, you did mention that you had a faster ramp-up in F 1Q than you expected probably. Are you kind of thinking that's more of a pull forward of inventory from fiscal second quarter or was there certain kind of volume drivers that came in better than you expected in the quarter?

好的。如果我可以追問一下 3D 感測，我想你在事先準備的發言中確實提到，F 1Q 的拉升速度比你預期的更快。你們是否認為這比較像是把原本財年第二季的庫存提前拉貨，還是說本季有某些出貨量的驅動因素表現優於你們的預期？

It's hard to tell. I think it's real demand. I don't think there is inventory sitting as our customers are at their integrators. So it's either higher share or our customers' products are doing better than expected. So I think from that perspective, we're pretty happy with our share and how our product is being accepted by the market. I'd say that our yields continue to be very solid, our quality performance is extremely solid and having that track record of having shipped hundreds of millions of these things with extremely high quality gives us confidence that we're going to be the partner of choice down the road as well.

這很難判斷。我認為這是真實需求。我不認為有庫存堆在那裡，因為我們的客戶是在他們的整合商那邊。所以要嘛是我們的份額更高，要嘛是我們客戶的產品表現優於預期。因此從這個角度來看，我們對我們的市占以及產品被市場接受的情況感到相當滿意。我會說，我們的良率持續非常穩健，我們的品質表現也極為穩健；而且我們已經以極高品質出貨了數億個這類產品，這樣的紀錄讓我們有信心，未來我們也會是客戶首選的合作夥伴。

Our next question comes from the line of Joseph Wolf from Barclays.

我們的下一個問題來自巴克萊（Barclays）的 Joseph Wolf。

I want to ask two competitive landscape questions. One is you talked about very strong demand in ROADMs, new products out there and not enough capacity. What is the competitive landscape there versus your new products? And are your customers waiting -- what are the dynamics going on in the telecom market versus your new product?

我想問兩個關於競爭格局的問題。第一個是，你們談到 ROADM 需求非常強、新產品推出，而且產能不足。相較於你們的新產品，那裡的競爭格局如何？以及你們的客戶是否在等待——在電信市場中，圍繞你們新產品的動態是什麼？

Well, I'd say from the leading edge products, we have a very strong competitive advantage. I'd say our customers waiting. Based on the number of phone calls I get and have to deal with on that topic, I'd say they don't have a lot of patients and they want more product sooner, but at the end of the day if you're talking about 1x35 or MxN, if you want that product, you've got to get it from the person that's producing it. And that's why we are adding more and more capacity both on the existing product lines but as well as on those really game-changing network enablers of ROADM. So waiting not very patiently.

嗯，我會說在最先進的產品上，我們有非常強的競爭優勢。至於客戶是否在等待？從我接到的電話數量以及我必須處理這個議題的情況來看，我會說他們沒有太多耐心，他們希望更快拿到更多產品；但歸根結底，如果你談的是 1x35 或 MxN，如果你想要那個產品，你就得向正在生產它的人取得。這也是為什麼我們不僅在既有產品線上持續增加產能，同時也在那些真正具顛覆性的 ROADM 網路使能器上增加更多產能。所以他們等得並不太有耐心。

And then on the world-facing side and specifically on the Android ecosystem where you talked about doubling, I'm wondering if that's a measurable number for us just yet. But can you talk about competition in world-facing and particularly from perhaps non-VCSEL-based or non-optical-based solution sets that you're seeing as you prepare for that market?

另外在後置（world-facing）這一端，特別是在你提到會翻倍的 Android 生態系上，我不確定這對我們來說是否已經是可量化的數字。但你能談談後置的競爭情況嗎？尤其是當你們為該市場做準備時，你們看到的競爭是否可能來自非 VCSEL、或非光學式的解決方案？

Yes. Well, maybe kind of start in reverse. It's tough to say entirely what we're competing against if it's not optical just because customers in this space are very secretive about what they do. With that said, what our customers continue to message to us is that optical techniques are the preferred mode of operation for whether it be front or world-facing given the ability to operate darkness and lights doesn't pass through the body, if you will, which certain microwave or RF techniques that can do. In terms of customers and products, there's a wide range of customers who are looking at world-facing and either have or will be shortly launching products, and I think it's a tremendous opportunity given it is -- as we mentioned in our prepared remarks, has the ability to increase the content per device beyond the front facing. It also has the ability to broadly spread from being just a pure mobile device to other devices and consumer appliances, if you will.

是的。嗯，也許我先倒過來說。如果不是光學方案，我們很難完全說清楚我們在跟什麼競爭，因為這個領域的客戶對他們在做什麼非常保密。話雖如此，我們的客戶持續向我們傳達的是，無論是前置或後置，光學技術都是偏好的運作方式，因為它能在黑暗中運作，而且光不會穿透人體；而某些微波或射頻（RF）技術則可能會穿透。就客戶與產品而言，有相當廣泛的客戶正在評估後置，並且已經或將在不久後推出產品；我認為這是個巨大的機會，因為——正如我們在事先準備的發言中提到的——它有能力把每台裝置的內容價值提升到超越前置。它也有能力從純粹的行動裝置，廣泛擴散到其他裝置與消費性家電等領域。

Our next question comes from the line of Tejas Venkatesh from UBS.

我們的下一個問題來自瑞銀（UBS）的 Tejas Venkatesh。

And my question was actually a follow-up from your last sentence, Chris. Are there new markets emerging outside of mobile consumer that could be exciting over the next one to two years? You called out auto in your prepared remarks, but that sounds like a longer-term opportunity given longer product cycles. But are there other markets with faster product cycles that could be exciting in the next year or two?

我的問題其實是針對你最後一句話的追問，Chris。在未來一到兩年，是否有在行動消費以外正在浮現的新市場，可能會令人興奮？你在事先準備的發言中提到了汽車，但由於產品週期較長，聽起來像是較長期的機會。那是否還有其他產品週期更快、在未來一兩年可能令人興奮的市場？

Yeah, I mean, certainly in the consumer electronics space, there's a wide range right even going back obviously years ago in gaming and people talking about putting it in televisions and other smart devices. But as we look going forward, whether we're talking about personal assistance, smart speaker, AR/VR headsets, appliances, there's very definite action out there in customers pursuing such products. The overall volumes of each of those individual products or markets sub-segments, if you will, still will be lower than as we look to smartphones and devices like that just given how high the volumes of the products are. But in aggregate, those other consumer electronics can become a pretty meaningful amount of revenue over time.

是的，我的意思是，當然在消費性電子領域，範圍非常廣，甚至回到幾年前，像是遊戲領域，以及人們談到把它放進電視和其他智慧裝置。但展望未來，無論我們談的是個人助理、智慧音箱、AR/VR 頭戴式裝置、家電等，市場上確實有非常明確的動作，客戶正在推進這類產品。就每一個單一產品或市場子區隔的整體出貨量而言，考量到智慧型手機等產品的量體非常大，這些領域的量仍會低於我們看到的智慧型手機與類似裝置。但合計起來，這些其他消費性電子產品隨著時間推移，仍可能成為相當可觀的營收來源。

Understood. And is it fair to say that most of your Android revenue today is world-facing and then all are the Android guys also asking for 6-inch pixels?

了解。那麼是否可以說，你們目前大部分的 Android 營收是面向後置（world-facing）的，而 Android 客戶也都在要求 6 吋晶圓（pixels）？

So I'd say that no, we're working with Android customers on both front facing and world facing and some products have already been announced in the Android market with front-facing devices, but there is also a great deal of effort and I think imminent product announcements on world-facing. As far as our customers asking for 6-inch versus 4-inch, I think frankly they don't care how we produce it, they care with the cost is. And I think that given our manufacturing strategy on 6-inch, on foundry partners and the yields and design capabilities that we have, we're able to meet their requirements for volumes, quick ramp ups, as well as the cost that they need and gets us the margin that we need as well.

我會說不是。我們同時與 Android 客戶在前置（front-facing）與後置（world-facing）兩個方向合作；而且在 Android 市場上，已有一些搭載前置裝置的產品宣布了，但在後置方面也投入了大量努力，我認為相關產品公告也即將出來。至於客戶要求 6 吋還是 4 吋，我坦白說他們不在乎我們怎麼做，他們在乎的是成本是多少。我認為，基於我們在 6 吋上的製造策略、代工夥伴，以及我們的良率與設計能力，我們能滿足他們對出貨量、快速爬坡，以及他們所需要的成本，同時也能達到我們所需要的毛利。

Our next question comes from the line of Rod Hall from Goldman Sachs.

下一個問題來自高盛（Goldman Sachs）的 Rod Hall。

I guess I wanted to start off with 3D capacity and what you guys are thinking about investment there and how that's changed since last quarter. Are you thinking that you need to add additional capacity early next year or do you think you have plenty of capacity to meet demand? And then I have a follow-up or two.

我想先從 3D 產能談起，想了解你們對那邊投資的想法，以及相較上季有何變化。你們是否認為明年初需要新增更多產能，還是覺得現有產能足以滿足需求？之後我還有一兩個追問。

Sure. I'd say that what we continue to get better output from improved yields as well as improved methods to produce the product. So I would say that not a tremendous amount of investment is needed to increase capacity of existing products. With that said, there are investments that are needed to produce newer technology, different type of test technology, specifically for world-facing, that our partners are going to be putting in place over time. So I'd say from a from our balance sheet standpoint, our model is not to have to put out big capital investments, but to work with our partners to have them do that, and that's really their job and how we pay them. So I'd say that it's not a tremendous amount, but I think our productivity and methodologies for driving yield improvement gets us what we need in the short-term horizon.

好的。我會說，我們持續透過良率提升以及更好的產品製造方法，取得更高的產出。因此我會說，為了提升既有產品的產能，不需要投入非常大量的資本。不過，為了生產較新的技術、不同類型的測試技術（特別是用於後置 world-facing），我們的合作夥伴會隨時間逐步建置，這些是需要投資的。所以從我們資產負債表的角度來看，我們的模式不是自己投入大筆資本支出，而是與合作夥伴合作，由他們來做，這本來就是他們的工作，也是我們付費給他們的方式。因此我會說金額不會非常大，但我認為我們在提升良率的生產力與方法學，能在短期時間範圍內滿足我們的需求。

Okay, Alan. And then just to follow that one up, in terms of capacity need expectations, notwithstanding all the yield improvements and so on, how has that changed in the last quarter? I mean, are you thinking that you're going to need to be able to produce more now than you thought you would a quarter ago as you look into next year?

好的，Alan。接著追問一下，撇開良率提升等因素不談，就產能需求的預期而言，過去一季有什麼變化？我的意思是，展望明年，你們現在是否認為需要生產的量比一季前想的更多？

I don't know about relative to a quarter ago. I mean, we have a design funnel that is bigger than I had expected a year ago and the timing by which those go into production and our customers' decisions around is it a high-end phone or is it going to the more lower cost, higher volume devices, that we work with our customers in a real-time basis and make decisions as needed. So I'd say it's kind of a -- our customers and our design team and business guys in that market, we're very closely to make sure that there's no surprises, and we get them what they need when they need it.

我不確定相較一季前如何。我的意思是，我們的設計案漏斗（design funnel）比我一年前預期的更大；至於這些案子何時進入量產，以及客戶的決策——是高階手機，還是走向更低成本、更高出貨量的裝置——我們會與客戶即時互動並視需要做決策。所以我會說，這有點像是——我們的客戶、設計團隊以及該市場的商務團隊都非常緊密合作，確保不會有意外，並在他們需要的時候提供他們所需。

Okay. And then I wanted to go back to this ROADM question. When do you think you're going to be -- actually able to meet demand with capacity on ROADMs?

好的。我想回到這個 ROADM 的問題。你認為你們什麼時候才能在 ROADM 的產能上真正滿足需求？

Well, I mean, we certainly thought that we would be meeting the demand today three quarters ago when we made those investments. So we're just continuing to try to anticipate what's happening with future demand. And as I said, products that are hugely differentiated and have a lot of traction like Twin 1x35 and the MxN, we're adding capacity hoping that we're going to be able to meet the customer demand. But those things take six months to have that capacity show up and be productive. I'd say that for next few quarters, we're going to be still in a capacity constrained environment at least. And then when you layer on top of that, these differentiated products, we're trying to get ahead of that. So I'd say through the middle part of next year, we're going to have lots of discussions with our customers on how we get the more products.

嗯，我們當初在做那些投資時，是在三個季度前就認為今天應該能滿足需求了。所以我們只是持續嘗試去預判未來需求會如何發展。如我所說，像 Twin 1x35 和 MxN 這類高度差異化、且市場牽引力很強的產品，我們正在增加產能，希望能滿足客戶需求。但這些事情需要六個月，產能才會到位並開始有效產出。我會說，接下來幾個季度，我們至少仍會處於產能受限的環境。再加上這些差異化產品的需求，我們正努力提前布局。所以我會說，直到明年年中，我們都會與客戶進行大量討論，來看我們如何提供更多產品。

I appreciate it. And my last question is on lasers. I just wanted to know what kind of visibility do you think you've got there and do you think that -- do you feel like that bottomed or you just don't have enough visibility to be able to tell where that laser business might bottom out?

感謝。我最後一個問題是關於雷射。我想了解你認為在那邊的能見度如何？你覺得是否已經觸底，還是你覺得能見度不足，無法判斷雷射業務可能會在何處觸底？

Yes. From my perspective, lasers revenue in the short term is flat. I think it's probably the bottom from our perspective because fiber laser demand is continuing to be quite strong, and we have a new product pipeline from our ultrafast products that will be introduced next year that should drive new design wins for us and new design wins for our customers. That should propel the growth.

是的。就我看來，短期內雷射營收持平。我認為從我們的角度看，這大概就是底部，因為光纖雷射需求仍然相當強勁；而且我們的超快（ultrafast）產品有新的產品管線，將在明年推出，應能為我們帶來新的設計導入（design wins），也為我們的客戶帶來新的設計導入。這應該會推動成長。

And our next question comes from the line of Meta Marshall from Morgan Stanley.

下一個問題來自摩根士丹利（Morgan Stanley）的 Meta Marshall。

It's Yuuji Anderson on for Meta. Any changes to the demand environment there beyond just ROADMs, any pickup or is it still relatively muted? And how do you feel about where expectations heading into 2019 on this?

我是代 Meta 提問的 Yuuji Anderson。除了 ROADM 之外，需求環境有任何變化嗎？有沒有回溫，還是仍相對低迷？另外，你們對 2019 年的預期走向有何看法？

Well, I think in the products that we talked about, ROADMs, pump lasers and amplifiers, China is extremely strong today, and I think it's really still in the early, early stages of ROADM deployment within China. So my expectation is that the China growth continues in the transport side where our strength is. I think we have less visibility in what's going on in the transmission side just given where we put our R&D dollars in the transport side. So I think from our perspective, China is going to continue to grow over calendar year 2019.

嗯，我認為就我們談到的產品——ROADM、泵浦雷射與放大器——而言，中國目前非常強勁，而且我認為中國的 ROADM 佈建仍處於非常非常早期的階段。因此我的預期是，在我們具優勢的傳輸（transport）端，中國的成長會持續。至於傳送（transmission）端的情況，我們的能見度較低，主要是因為我們把研發資源投入在傳輸（transport）端。所以我認為從我們的角度看，中國在 2019 曆年將會持續成長。

Okay. And just a second question on this. Any updates on the CFO search there? Any idea when a decision could be made? And on the Oclaro deal, any color there would be helpful?

好的。第二個問題。CFO 的招募進度有任何更新嗎？大概什麼時候可能做出決定？另外，關於 Oclaro 這筆交易，有任何補充說明都會很有幫助。

Well, on the CFO search, we're continuing to meet excellent candidates and trying to find the right person for the type of company we are becoming and the type of company we want it to become in the future. And as I said on last call, Chris hasn't screwed things up quite yet. So I'm in less of a hurry to find someone as opposed to find the ideal person for the job. So it certainly is a priority, but I think from my perspective, things are working pretty well. The finance team is doing a great job under Chris, and so I'd rather find the perfect person than just fill that hole because Chris is doing a good job.

關於 CFO 的招募，我們持續與非常優秀的候選人會面，並試著找到適合我們正在成為的公司類型、以及未來希望成為的公司類型的合適人選。而且如我在上次電話會議所說，Chris 到目前為止還沒有把事情搞砸。所以相較於急著找人，我更希望找到最理想的人選來做這份工作。因此這當然是優先事項，但就我個人看法，目前運作得相當不錯。在 Chris 的帶領下，財務團隊做得很好，所以我寧可找到完美的人選，也不要只是把這個缺補上，因為 Chris 做得很好。

And our next question comes from the line of Tim Savageaux from Northland Capital.

下一個問題來自 Northland Capital 的 Tim Savageaux。

One on telecom and a follow-up on 3D. On the telecom side, it seems like your discussions and guidance that you're talking to perhaps an acceleration in sequential growth in telecom into the December quarter. I wonder if you can comment on that and maybe in that context, also comment on sort of what was left on the table, if you will, capacity wise in the September quarter and whether given the Datacom decline and accelerating telecom, this trend of gross margin expansion within communications is likely to continue?

一個關於電信的問題，以及一個關於 3D 的追問。在電信方面，從你們的討論與指引來看，似乎你們提到電信在 12 月季度的季增成長可能會加速。想請你評論一下；並且在這個脈絡下，也請談談 9 月季度在產能方面「還留在桌上」的部分（如果可以這麼說），以及在 Datacom 下滑、電信加速的情況下，通訊業務內部的毛利率擴張趨勢是否可能延續？

Yes. I would say that our expectations are for accelerated growth in our transport side of the business, and that's allowed us to be more selective per your comment about not chasing lower-margin business. And so that's why we have been more selective because we have been growing the higher margin businesses, and we can pass on some of that lower margin customer opportunity, and that will drive both the short-term gross margin and operating margin performance as well as the longer term. So we're going to continue to focus on investing in those higher margin products and portfolios and being more selective in some of those lower-margin products like Datacom.

是的。我會說，我們的預期是運輸端業務將加速成長，而這也讓我們能如你所說，不去追逐低毛利的業務，從而更具選擇性。因此我們之所以更具選擇性，是因為我們一直在成長較高毛利的業務，我們可以放棄一些低毛利客戶的機會，這將同時帶動短期的毛利率與營業利益率表現，以及更長期的表現。所以我們會持續專注於投資那些高毛利的產品與產品組合，並在一些低毛利產品（例如 Datacom）上更具選擇性。

And then just a follow-up on the telecom side real quickly. Do you think given your capacity situation in ROADMs and elsewhere that there's enough of a dynamic there to offset or even more than offset what's typically downward seasonality in the March quarter based on pricing declines?

接著很快追問一下電信端。你認為，考量你們在 ROADM 以及其他方面的產能狀況，是否有足夠的動能可以抵消、甚至超過通常因價格下滑而在 3 月季度出現的季節性下行？

Well, maybe to finish the question you asked in the first part, how much should we be leave on the table, we got tens of millions of dollars on the table. And I think that we're trying to work down that backlog, but there will be a significant amount of backlog going into the March quarter that's unsatisfied. So I can't predict the future, but given where we're at and what our customers are telling us, I think that we could -- there will be pricing reductions in the first calendar quarter, but we could see a different kind of seasonal effect in the March quarter than we typically see.

嗯，也許先把你前半段問的問題補完：我們應該把多少留在桌上——我們桌上大概有數千萬美元。我認為我們正努力消化那個積壓訂單，但進入 3 月季度時，仍會有相當大一部分積壓訂單無法滿足。所以我無法預測未來，但就我們目前的狀況以及客戶告訴我們的情況來看，我認為——第一個曆年季度會有降價，但我們可能會在 3 月季度看到一種不同於以往的季節性影響。

And if I could just follow that right along on the 3D side and ask you the particular future some more. And given your guidance, it doesn't look you're going to reattain kind of your peak revenue level in 3D that you saw last quarter -- sorry, last year. But I wonder given the recent announcement of face id equipped iPads as of yesterday, the Tenor ramping kind of mid-month, what we might see kind of a much less dramatic seasonal drop-off and also given the number of devices in Android that we're talking about into the March quarter from December than we saw last year or

如果我可以順著這點，接著在 3D 方面再追問一下更具體的未來。依你們的指引，看起來你們不會重新回到去年——抱歉，是去年——上一季所看到的 3D 營收高峰水準。但我想知道，考量昨天剛宣布配備 Face ID 的 iPad、Tenor 在月中左右開始爬坡，以及我們談到的 Android 裝置數量在 12 月到 3 月季度之間可能比去年更多，我們是否可能看到季節性下滑幅度小得多，或者

if you have any early thoughts on what sort of profile you might see seasonally in 3D?

你是否有任何初步想法，3D 在季節性上可能會呈現什麼樣的走勢？

I'd say that our customers can count on us. And from that perspective, I don't think people are over-ordering or forecasting, whereas, I'd say that last year, there was probably inventory on the shelf at the end December in fears that the product wouldn't be there in January. So I think from that perspective, we may not see the kind of drop off. But again, I can't give you guidance more than one quarter at a time. I would say that our broader customer base is better for that seasonalities moving out. But again, it's hard to tell what's going to happen as these new products get introduced and what kind of traction they have with consumers.

我會說，我們的客戶可以信賴我們。從這個角度來看，我不認為大家會過度下單或過度預測；相較之下，我會說去年年底 12 月時，可能因為擔心 1 月拿不到產品，而在貨架上留有一些庫存。所以從這個角度來看，我們可能不會看到那種下滑。但同樣地，我無法提供超過一次一個季度的指引。我會說，隨著時間推進，我們更廣泛的客戶基礎對於季節性會更有利。但同樣地，隨著這些新產品導入，以及它們在消費者端獲得何種牽引力，很難判斷會發生什麼。

And our last question comes from the line of John Marchetti from Stifel.

我們的最後一個問題來自 Stifel 的 John Marchetti。

I appreciate you fit me in here under the wire. Just curious, as I look at that Datacom business and the expectation for a fairly significant drop here going into the December quarter. Do you think that sort of the floor there as you look out next year, should we think about that potentially picking up as we get into the sort of middle of next year or second half? Just curious how you think that sort of plays out over the next couple of quarters as you start to bring on some of the new 100 gig and 400 gig products.

感謝你在最後關頭把我安排進來。我只是好奇，當我看 Datacom 業務，以及進入 12 月季度預期會出現相當明顯的下滑。你認為，展望明年時那邊的底部大概在哪裡？我們是否應該認為，到了明年年中或下半年可能會回升？我只是好奇，當你們開始導入一些新的 100G 和 400G 產品時，你認為未來幾個季度大概會如何演變。

Yes. I'd say probably, this is the low point. We will be introducing our low cost CWDM4 later this quarter and getting traction through calendar '19. So, at least, my expectations are that we do grow in calendar '19, whether that's a big growth. It all depends upon what happens in market pricing because we're not going to chase bad margin unprofitable business, and it just seems like every time we get a new update from our Hyperscale friends that their price expectation goes down. So it's hard to tell. I'd say that at least from my perspective, the new product development is going very well, and we think we're going to come out with a cost differentiated product that should be able to address that growing market.

是的。我會說，可能這就是低點。我們將在本季度稍晚推出低成本的 CWDM4，並在 2019 曆年期間取得進展。所以，至少我的預期是我們在 2019 曆年會成長，至於是不是大幅成長，完全取決於市場定價的變化，因為我們不會去追逐毛利不佳、無利可圖的業務，而且似乎每次我們從超大規模（Hyperscale）的朋友那裡得到新的更新，他們對價格的期待就會再下降。所以很難說。至少就我而言，新產品開發進展非常順利，我們認為我們會推出一款在成本上具差異化的產品，應該能夠切入那個成長中的市場。

And I will turn the call back over to Alan Lowe for closing remarks.

接下來我把電話交回給 Alan Lowe 作結語。

Thank you, Emily. I want to thank our customers for their business and their partnership. I also want to thank our employees for all their hard work and putting this into an excellent position for long-term growth. We regularly discuss our business at Investor Relations events. These events are listed on our website in the Investor Relations section and are regularly updated. This concludes our call for today. I would like to thank everyone for attending, and we look forward to talking with you again in another few months. Thank you.

謝謝你，Emily。我要感謝我們的客戶給予我們的業務與合作夥伴關係。我也要感謝我們的員工辛勤付出，讓公司處於一個非常有利於長期成長的絕佳位置。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。今天的電話會議到此結束。我要感謝各位的參與，我們期待在幾個月後再次與各位交流。謝謝。

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

今天的電話會議到此結束。您現在可以掛線。