Ribbon Communications Inc (RBBN) 2022 Q4 法說會逐字稿

Greetings, and welcome to the Ribbon Communications Fourth Quarter 2022 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎來到 Ribbon Communications 2022 年第四季度財務業績電話會議。 （操作員說明）提醒一下，正在錄製此會議。

It is now my pleasure to introduce your host, Bita Milanian, Senior Vice President, Global Marketing. Thank you, Bita. You may begin.

現在我很高興向您介紹主持人，全球營銷高級副總裁 Bita Milanian。謝謝你，比塔。你可以開始了。

Good afternoon, and welcome to Ribbon's fourth quarter 2022 financial results conference call. I am Bita Milanian, SVP of Marketing at Ribbon Communications. Also on the call today are Bruce McClelland, Ribbon's Chief Executive Officer; and Mick Lopez, Ribbon's Chief Financial Officer. Today's call is being webcast live and will be archived on the Investor Relations section of our website at rbbn.com, where both our press release and supplemental slides are currently available.

下午好，歡迎來到 Ribbon 2022 年第四季度財務業績電話會議。我是 Ribbon Communications 營銷高級副總裁 Bita Milanian。今天參加電話會議的還有 Ribbon 的首席執行官 Bruce McClelland；和 Ribbon 的首席財務官 Mick Lopez。今天的電話會議正在進行網絡直播，並將存檔在我們網站 rbbn.com 的投資者關係部分，目前我們的新聞稿和補充幻燈片都可以在該部分獲得。

Certain matters we will be discussing today, including the business outlook and financial projections for the first quarter of 2023 and beyond are forward-looking statements. Such statements are subject to the risks and uncertainties that could cause actual results to differ materially from those contained in these forward-looking statements. These risks and uncertainties are discussed in our documents filed with the SEC, including our most recent Form 10-K. I refer you to our safe harbor statement included on Slide 2 of the supplemental slides for this conference call.

我們今天將討論的某些事項，包括 2023 年第一季度及以後的業務前景和財務預測，都是前瞻性陳述。此類陳述受風險和不確定性的影響，這些風險和不確定性可能導致實際結果與這些前瞻性陳述中包含的結果存在重大差異。這些風險和不確定性在我們提交給美國證券交易委員會的文件中進行了討論，包括我們最近的 10-K 表格。我建議您參閱本次電話會議補充幻燈片的幻燈片 2 中包含的安全港聲明。

In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the earnings press release, we issued earlier today as well as the supplemental slides we prepared for this conference call, which again, are both available on the Investor Relations section of our website.

此外，我們將在此次電話會議上提供非 GAAP 財務信息。我們今天早些時候發布的收益新聞稿以及我們為本次電話會議準備的補充幻燈片中包含與適用的 GAAP 措施的對賬，這些幻燈片同樣可在我們網站的投資者關係部分獲得。

And now I would like to turn the call over to Bruce. Bruce?

現在我想把電話轉給布魯斯。布魯斯？

Thanks, Bita, and thanks to everyone for joining us today to discuss our fourth quarter results and our outlook for 2023. I'm very pleased to report solid financial results for the fourth quarter, the strongest quarter of the year with year-over-year growth in revenue and earnings. Overall, sales were above the midpoint of guidance, growing 13% sequentially and 1% year-over-year. Adjusted EBITDA increased 25% versus the third quarter and 11% versus the fourth quarter of 2021. And bookings momentum continued with book-to-revenue of 1.1x, even with higher sales levels in the quarter.

謝謝 Bita，也感謝大家今天加入我們討論我們第四季度的業績和我們對 2023 年的展望。我很高興地報告第四季度穩健的財務業績，這是今年最強勁的一個季度，同比-收入和收益的年度增長。總體而言，銷售額高於指導的中點，環比增長 13%，同比增長 1%。調整後的 EBITDA 與 2021 年第三季度相比增長了 25%，與 2021 年第四季度相比增長了 11%。儘管本季度的銷售水平較高，但預訂勢頭仍在繼續，賬面收入比為 1.1 倍。

Operating expenses were slightly higher than we projected, primarily related to higher customer-related travel expenses and variable sales compensation. Continued elevated supply chain costs and component expedite fees, along with customer and product mix resulted in gross margins a little below our initial projections. The highlight of the quarter was the continued improvement in our IP Optical business, with sales improving across all regions and multiple new customer wins. In particular, momentum continued to grow in our IP Routing portfolio, which we believe will only get stronger as additional new products enter the market this year.

營業費用略高於我們的預期，主要與較高的客戶相關差旅費用和可變銷售補償有關。持續上漲的供應鏈成本和組件加急費，以及客戶和產品組合導致毛利率略低於我們最初的預測。本季度的亮點是我們的 IP 光纖業務持續改善，所有地區的銷售額都有所改善，並贏得了多個新客戶。特別是，我們的 IP 路由產品組合的勢頭繼續增長，我們相信隨著更多新產品今年進入市場，該產品組合只會變得更強大。

But we also posted good results in our Cloud and Edge segment with one of the strongest quarters ever for sales to enterprise customers and a strong quarter for session border controller sales. All of this resulted in $16 million of free cash flow in the quarter and $67 million of cash at year-end. Overall, it was a very good quarter and sets a great foundation for 2023.

但我們在雲和邊緣領域也取得了不錯的成績，成為有史以來最強勁的企業客戶銷售季度之一和會話邊界控制器銷售強勁的季度。所有這些在本季度產生了 1600 萬美元的自由現金流，在年底產生了 6700 萬美元的現金。總的來說，這是一個非常好的季度，為 2023 年奠定了良好的基礎。

Now a little more detail on each of our operating segments. This was by far the strongest quarter for our IP Optical Networks business since the ECI acquisition in early 2020. Revenue was $97 million, growing 18% quarter-over-quarter following growth of 20% in the third quarter. Sales of Optical Transport Equipment grew 16% versus the third quarter and were up 6% year-over-year. Sales of our IP Routing portfolio grew even faster, increasing 21% quarter-over-quarter and 34% versus the fourth quarter of 2021.

現在更詳細地介紹我們每個運營部門。這是自 2020 年初收購 ECI 以來我們的 IP 光網絡業務迄今為止最強勁的一個季度。收入為 9700 萬美元，繼第三季度增長 20% 之後環比增長 18%。光傳輸設備的銷售額較第三季度增長 16%，同比增長 6%。我們的 IP 路由產品組合的銷售額增長更快，環比增長 21%，與 2021 年第四季度相比增長 34%。

Production of several of our high-volume access routers continued to be limited by availability of very specific microcontroller parts, which would have further increased our Q4 revenue by approximately $10 million, but which has now moved into backlog for the first half of 2023. We expect to have a new design in production by the end of the second quarter as well as additional supply eliminating this bottleneck. The EMEA region was once again the strongest region for IP Optical sales across a broad range of customers in Continental Europe, Africa, the U.K. and the Middle East.

我們的幾個大容量接入路由器的生產繼續受到非常具體的微控制器部件可用性的限制，這將使我們的第四季度收入進一步增加約 1000 萬美元，但現在已經進入 2023 年上半年的積壓狀態。我們預計到第二季度末將有新的設計投入生產，並增加供應以消除這一瓶頸。歐洲、中東和非洲地區再次成為歐洲大陸、非洲、英國和中東眾多客戶的 IP 光纖銷售最強勁的地區。

Highlights include growth with the Israeli Defense Forces, [Cicero Networks], formerly [Corning] Services, British Telecom and the Finnish Defense Forces. We also had several new wins in Europe at the end of the quarter, including expansions with the Swiss Army and German railway operator, Deutsche Bahn, as well as the Czech Republic science and education network operator. We believe these new wins will get us off to a good start in the first half of 2023.

亮點包括與以色列國防軍、[Cicero Networks]、前身為 [Corning] Services、英國電信和芬蘭國防軍的共同成長。本季度末，我們在歐洲也取得了幾項新的勝利，包括與瑞士陸軍和德國鐵路運營商 Deutsche Bahn 以及捷克共和國科學和教育網絡運營商的擴張。我們相信這些新的勝利將使我們在 2023 年上半年有一個良好的開端。

The most significant growth this quarter was in the Asia Pac region with multiple key wins, including Eastern Telecom and InfiniVAN in the Philippines, Viettel in Vietnam, Taiwan Mobile and multiple operators in Africa, including MTN GlobalConnect and BoFiNet. And we were very excited to be awarded for the first time ever a portion of Bharti's optical transport long haul, DWDM network in India. This is a major accomplishment for the team and highlights the completeness of our portfolio in a highly competitive and fast-growing market. These are the exact type of Tier 1 operators we're targeting to provide additional scale and predictability for the business.

本季度增長最顯著的是亞太地區，贏得了多項重要勝利，包括菲律賓的 Eastern Telecom 和 InfiniVAN、越南的 Viettel、台灣移動以及非洲的多家運營商，包括 MTN GlobalConnect 和 BoFiNet。我們非常高興首次獲得 Bharti 在印度的光傳輸長途 DWDM 網絡的一部分。這是團隊的一項重大成就，凸顯了我們在競爭激烈且快速增長的市場中產品組合的完整性。這些正是我們瞄準的一級運營商類型，旨在為業務提供額外的規模和可預測性。

We also continue to make progress on our strategic goal of gaining scale in the critical North American region, with full year sales increasing more than 30% versus 2021 and exceeding 10% of overall IP Optical sales for the year. Opportunities with additional major Tier 1 mobile and telecom operators also continue to progress. I count a total of 6 wins at this stage where we have now received orders and are at various stages of early deployment and at least 8 additional highly active engagements that have potential for incremental revenue in 2023, along with a variety of other engagements in early stages. This funnel is key to our strategy to drive longer-term scale and growth for this business and incremental to the current base. Product and service bookings were strong again this quarter, keeping pace with increased shipments with a 1.05x book-to-revenue in the quarter. Optical bookings were particularly strong on the back of several new customer wins in Asia Pac.

我們還在實現在關鍵的北美地區擴大規模的戰略目標方面繼續取得進展，全年銷售額比 2021 年增長超過 30%，佔全年 IP 光學銷售額的 10% 以上。與其他主要一級移動和電信運營商的合作機會也在不斷增加。我計算在這個階段總共有 6 個勝利，我們現在已經收到訂單並處於早期部署的各個階段，至少有 8 個額外的高度活躍的參與有可能在 2023 年增加收入，以及早期的各種其他參與階段。這個漏斗是我們推動這項業務的長期規模和增長並增加當前基礎的戰略的關鍵。本季度產品和服務預訂再次強勁，與出貨量增長保持同步，本季度訂單收入比為 1.05 倍。在亞太地區贏得幾個新客戶的支持下，光學預訂特別強勁。

Now some highlights from our Cloud and Edge business. Sales in the fourth quarter increased 10% versus the third quarter but were down 7% year-over-year. Despite the lower sales, adjusted EBITDA margin for the segment improved 117 basis points versus the fourth quarter of 2021, primarily due to spending improvements implemented throughout the year and continued strong mix of software sales. Product and service bookings were strong at 1.15x. Our focus on the faster-growing enterprise market segment showed positive results once again this quarter with revenue growing 67% quarter-over-quarter and 7% year-over-year, reaching 37% of Cloud and Edge product and service sales in the quarter.

現在是我們雲和邊緣業務的一些亮點。第四季度的銷售額比第三季度增長了 10%，但同比下降了 7%。儘管銷售額下降，但該部門調整後的 EBITDA 利潤率比 2021 年第四季度提高了 117 個基點，這主要是由於全年實施的支出改善以及軟件銷售的持續強勁組合。產品和服務預訂量強勁，為 1.15 倍。我們對增長更快的企業細分市場的關注在本季度再次取得積極成果，收入環比增長 67%，同比增長 7%，本季度雲和邊緣產品和服務銷售額達到 37% .

Sales were distributed across a number of market verticals, including customers such as Liberty Mutual in insurance, HCA in healthcare, JPMorgan and Vanguard in financials and Qualcomm in technology. We believe Ribbon is uniquely positioned to meet the large complex communication needs of these Fortune 500 companies. Our business model in the enterprise market continues to evolve with an increasing mix of annual enterprise-wide license agreements and as a service recurring monthly subscription revenue.

銷售額分佈在多個垂直市場，包括保險領域的利寶互助銀行、醫療保健領域的 HCA、金融領域的摩根大通和先鋒集團以及技術領域的高通等客戶。我們相信 Ribbon 具有獨特的優勢，可以滿足這些財富 500 強公司的大型複雜通信需求。我們在企業市場的商業模式隨著年度企業範圍許可協議和作為一項服務的經常性每月訂閱收入的增加而不斷發展。

Multiple significant opportunities in the federal government segment continued to progress in the quarter. We're working with a number of important channel integration partners, including Dell, to provide a comprehensive pre-integrated federal solution. I remain very excited about the potential opportunity and expect revenue from these large complex projects to begin to build throughout the year. From a product mix perspective, sales of session border controllers and associated policy routing products were strong in the quarter, increasing 59% from the third quarter.

聯邦政府部門的多個重要機會在本季度繼續取得進展。我們正在與包括戴爾在內的許多重要渠道集成合作夥伴合作，以提供全面的預集成聯邦解決方案。我仍然對潛在的機會感到非常興奮，並預計這些大型複雜項目的收入將在全年開始建設。從產品結構來看，本季度會話邊界控制器和相關策略路由產品的銷售強勁，比第三季度增長 59%。

Shipments of both core high-performance SBCs as well as enterprise edge appliances were strong, serving both enterprise and service provider segments. We also had a strong quarter with cloud communication partners such as Bandwidth, SoftBank, Inteliquent and Peerless and contact center providers such as inContact. We also continued the momentum behind our analytics offering. We had new international wins with Optus in Australia and Colt in France for our fraud and robocalling prevention application. By leveraging cloud technologies, these customers benefit from a fast and seamless deployment experience, helping them protect customers from a wide variety of annoying and potentially malicious calls.

核心高性能 SBC 和企業邊緣設備的出貨量都很強勁，服務於企業和服務提供商細分市場。我們與 Bandwidth、SoftBank、Inteliquent 和 Peerless 等云通信合作夥伴以及 inContact 等聯絡中心提供商的季度業績也很強勁。我們還繼續保持分析產品背後的勢頭。我們在澳大利亞的 Optus 和法國的 Colt 憑藉我們的欺詐和自動呼叫預防應用程序贏得了新的國際勝利。通過利用雲技術，這些客戶受益於快速無縫的部署體驗，幫助他們保護客戶免受各種煩人和潛在惡意呼叫的侵害。

Shipments of our voice network transformation solutions were consistent with the previous quarter with a continued shift towards telco cloud solutions such as our Virtual C20 Call Controller. We were excited to announce a strategic win with Liberty Latin America as they consolidate multiple legacy platforms across their footprint on to our modern cloud-based architecture, while also leveraging our advanced analytics application suite. There remains a strong pipeline of similar network modernization opportunities that will provide a solid underpinning for the business in 2023.

我們的語音網絡轉換解決方案的出貨量與上一季度一致，並繼續轉向我們的虛擬 C20 呼叫控制器等電信雲解決方案。我們很高興地宣布與 Liberty Latin America 達成戰略性勝利，因為他們將其足跡中的多個遺留平台整合到我們基於雲的現代架構中，同時還利用了我們的高級分析應用程序套件。仍有大量類似的網絡現代化機會，將為 2023 年的業務提供堅實的基礎。

Revenue with our largest customer, Verizon, once again exceeded 10% of our overall sales and was consistent with the third quarter. Finally, fourth quarter is our strongest period for renewing maintenance and support contracts and bookings were even stronger than usual and underpins the profitability and stability for this business. Our focus on securing multiyear agreements is a key part of our strategy, and we've broadened our offering to include a variety of value-added services, including software upgrade assurance to further increase our value and attachment rate.

我們最大客戶 Verizon 的收入再次超過我們總銷售額的 10%，與第三季度持平。最後，第四季度是我們續簽維護和支持合同的最強勁時期，預訂量甚至比平時更強勁，支撐了該業務的盈利能力和穩定性。我們專注於確保多年協議是我們戰略的一個關鍵部分，我們已經擴大了我們的產品範圍，包括各種增值服務，包括軟件升級保證，以進一步提高我們的價值和依戀率。

With that, I'll turn it over to Mick to provide additional detail on our fourth quarter results and then come back on to discuss the outlook for the first quarter and 2023. Mick?

有了這個，我將把它交給米克提供我們第四季度業績的更多細節，然後再回來討論第一季度和 2023 年的前景。米克？

Thank you, Bruce. In the fourth quarter of 2022, our financial results showed good improvement over the previous quarter and prior year, with revenue growth momentum for our IP Optical Networks business and continued profitability contributions from our Cloud and Edge business. Please refer to our Investor Relations website for supplemental slides summarizing our fourth quarter 2022 and historical performance.

謝謝你，布魯斯。在 2022 年第四季度，我們的財務業績比上一季度和去年同期有了良好的改善，IP 光網絡業務的收入增長勢頭強勁，而我們的雲和邊緣業務對盈利能力的持續貢獻。請參閱我們的投資者關係網站，獲取總結我們 2022 年第四季度和歷史業績的補充幻燈片。

Let's start with consolidated corporate financial performance. In the fourth quarter of 2022, Ribbon generated revenues of $234 million, which is an increase of $3 million or 1.3% from the prior year, driven by a 17% increase in IP Optical Networks that compensated for a 7% decrease in Cloud and Edge. Non-GAAP gross margin was 52.4%, which is a 150 basis point decrease from prior year, entirely driven by the increased percentage mix of IP Optical Networks from 36% of total Ribbon revenues in fourth quarter of '21 to over 41% in fourth quarter of '22.

讓我們從合併後的公司財務業績開始。在 2022 年第四季度，Ribbon 的收入為 2.34 億美元，比上年增加 300 萬美元或 1.3%，這是由於 IP 光網絡增長 17%，彌補了雲和邊緣 7% 的下降.非 GAAP 毛利率為 52.4%，比上年下降 150 個基點，這完全是由於 IP 光網絡的百分比組合從 21 年第四季度佔色帶總收入的 36% 增加到第四季度的 41% 以上22 年四分之一。

Gross margins were unchanged year-over-year for Cloud and Edge at 64% and for IP Optical at 36%. Non-GAAP operating expenses were $97 million, a decrease of $5 million or 5% year-over-year as we continue to reduce labor costs, even in an inflationary environment and look forward to additional efficiencies in 2023. Non-GAAP adjusted EBITDA was $29 million for the quarter, which is an increase of $3 million or 11% increase from prior year. Non-GAAP diluted earnings per share was $0.09 higher than our guidance as a result of improvements in our global tax provision estimates.

Cloud 和 Edge 的毛利率與去年同期持平，為 64%，IP Optical 為 36%。非 GAAP 運營費用為 9700 萬美元，同比減少 500 萬美元或 5%，因為我們繼續降低勞動力成本，即使在通貨膨脹的環境中也是如此，並期待在 2023 年提高效率。非 GAAP 調整後的 EBITDA 為本季度為 2900 萬美元，比去年增加 300 萬美元或 11%。由於我們改進了全球稅收撥備估計，非 GAAP 攤薄後每股收益比我們的指導高出 0.09 美元。

Our non-GAAP tax rate for the quarter was 3.2% to reflect the modification of our quarterly tax provision. Our non-GAAP tax rate for the full year 2022 was approximately 31%, which is an 800 basis point reduction from 39% in the prior year in 2021. Our cash taxes for 2022 were $16 million, which were in line with our 2021 cash taxes of $13 million. Our basic share count was 168 million shares, and our diluted share count was 172 million shares for the quarter.

我們本季度的非美國通用會計準則稅率為 3.2%，以反映我們對季度稅收撥備的修改。我們 2022 年全年的非美國通用會計準則稅率約為 31%，比上一年 2021 年的 39% 降低了 800 個基點。我們 2022 年的現金稅為 1600 萬美元，與我們 2021 年的現金稅持平1300萬美元的稅收。本季度我們的基本股數為 1.68 億股，稀釋後的股數為 1.72 億股。

Now let's look at the results of our 2 business segments. In our Cloud and Edge business, fourth quarter revenue was $137 million, down 7% year-over-year and up 10% quarter-over-quarter. Software as a percentage of total product revenue was 59%. Once again, the Cloud and Edge business contributed robust gross margins of 64%, which led to a $36 million EBITDA or 26% of revenues. For the full year, gross margins were 65% and $128 million of EBITDA or 25% of EBITDA margin, showing the resilient profitability and cash contributions from this business.

現在讓我們看看我們兩個業務部門的結果。在我們的雲和邊緣業務中，第四季度收入為 1.37 億美元，同比下降 7%，環比增長 10%。軟件佔產品總收入的百分比為 59%。雲和邊緣業務再次貢獻了 64% 的強勁毛利率，這導致 EBITDA 達到 3600 萬美元，佔收入的 26%。全年毛利率為 65%，EBITDA 為 1.28 億美元或 EBITDA 利潤率為 25%，顯示出該業務具有彈性的盈利能力和現金貢獻。

Let's turn to our IP Optical Networks business results. We recorded fourth quarter revenue of $97 million, which was an increase of $15 million or 18% quarter-over-quarter and 17% year-over-year. Non-GAAP gross margin for IP Optical was 36%, which is 170 basis points lower than the previous quarter, but 20 basis points higher than the fourth quarter of 2021. As Bruce mentioned, gross margins were below our projected level due to supply chain issues with expedite fees higher than initially projected and lower margins on several new customer projects associated with the initial infrastructure portion of the project. Non-GAAP EBITDA loss for the quarter was $7 million or 8% of revenues. While still negative, our EBITDA improved every single quarter over the previous quarter in 2022.

讓我們來看看我們的 IP 光網絡業務成果。我們第四季度的收入為 9700 萬美元，環比增長 1500 萬美元或 18%，同比增長 17%。 IP Optical 的非美國通用會計準則毛利率為 36%，比上一季度低 170 個基點，但比 2021 年第四季度高 20 個基點。正如布魯斯所說，由於供應鏈，毛利率低於我們的預期水平與項目的初始基礎設施部分相關的幾個新客戶項目的加速費用高於最初預計和利潤率較低的問題。本季度非美國通用會計準則 EBITDA 虧損為 700 萬美元，佔收入的 8%。雖然仍然為負，但我們的 EBITDA 在 2022 年每個季度都比上一季度有所改善。

Turning to the balance sheet. We ended the quarter with cash and cash equivalents of $67 million. This is an increase of $11 million from the end of the third quarter. As expected, we returned to positive cash flow in the quarter as we had cash from operations of $16 million. Our term loan is currently at $330 million outstanding as we have paid off $70 million or 17.5% of the original balance. Our $100 million revolver remained undrawn at quarter end.

轉向資產負債表。本季度末，我們的現金和現金等價物為 6700 萬美元。這比第三季度末增加了 1100 萬美元。正如預期的那樣，我們在本季度恢復了正現金流，因為我們擁有 1600 萬美元的運營現金。我們的定期貸款目前未償還 3.3 億美元，因為我們已經還清 7000 萬美元或原始餘額的 17.5%。我們的 1 億美元左輪手槍在季度末仍未動用。

For the fourth quarter of 2022, we met our amended term loan covenant metrics. Given that we revert to the original leverage and fixed charge coverage covenant metrics in 2023, we are exploring alternatives to ensure credit facility compliance such as paying down debt or raising additional capital. While we have confidence in executing a plan to ensure term loan covenant compliance, as you may understand, there is always a risk of noncompliance, which would require us to reclassify the long-term debt into current debt for the year-end 2022 balance sheet.

2022 年第四季度，我們達到了修訂後的定期貸款契約指標。鑑於我們在 2023 年恢復到原來的槓桿和固定費用覆蓋契約指標，我們正在探索確保信貸安排合規性的替代方案，例如償還債務或籌集額外資金。儘管我們有信心執行計劃以確保遵守定期貸款契約，但如您所知，始終存在不合規的風險，這將要求我們在 2022 年底資產負債表中將長期債務重新分類為流動債務.

Ribbon enjoys the benefit of a fixed rate swap, which is valued at about $25 million on our balance sheet that limits our effective LIBOR rate to only 90 basis points compared to the current 1-month spot rate of about 450 basis points. Please note that we are working with our banking syndicate to change our base rate from LIBOR to SOFR, the secured overnight financing rate.

Ribbon 享有固定利率互換的好處，在我們的資產負債表上價值約 2500 萬美元，將我們的有效 LIBOR 利率限制在僅 90 個基點，而當前 1 個月即期利率約為 450 個基點。請注意，我們正在與我們的銀團合作，將我們的基準利率從 LIBOR 更改為 SOFR，即有擔保的隔夜融資利率。

Even though short-term rates were up significantly, we kept our interest rate total charges flat to 2021 through debt repayments and our swap hedge instrument. Ribbon was also very effective at managing other expenses under our control. In spite of increased inflation, supply chain disruptions and higher labor costs, we were able to contain our 2022 operating expenses to almost the same level as previous year while simultaneously investing more in IP Optical research and development. Finally, we were able to decrease our non-GAAP annual effective tax rate, as we said, by 800 basis points with changes to our global tax provision.

儘管短期利率大幅上升，但我們通過債務償還和掉期對沖工具將利率總費用保持在 2021 年不變。 Ribbon 在管理我們控制下的其他費用方面也非常有效。儘管通貨膨脹加劇、供應鏈中斷和勞動力成本上升，但我們能夠將 2022 年的運營費用控制在與上一年幾乎相同的水平，同時加大對 IP 光學研發的投資。最後，正如我們所說，隨著我們全球稅收規定的變化，我們能夠將我們的非 GAAP 年度有效稅率降低 800 個基點。

Now I'd like to turn the call back to Bruce to provide more comments on our outlook for 2023.

現在我想把電話轉回布魯斯，就我們對 2023 年的展望提供更多評論。

Great. Thanks, Mick. As we enter 2023, the operating environment for the telecom industry remains healthy despite a variety of macro pressures, including higher inflation and operating costs. Consumers continue to rely heavily on the services provided by our customers in order to enable a digital mobile lifestyle and competition for consumer dollars remains fierce. It's imperative for our customers, both service provider and enterprise to invest in their communication infrastructure in order to stay competitive.

偉大的。謝謝，米克。進入 2023 年，儘管存在各種宏觀壓力，包括更高的通貨膨脹和運營成本，但電信行業的運營環境依然健康。消費者繼續嚴重依賴我們客戶提供的服務，以實現數字移動生活方式，對消費者資金的競爭依然激烈。我們的客戶（包括服務提供商和企業）必須投資於他們的通信基礎設施以保持競爭力。

There are a number of common themes that we hear from our customers on how they are prioritizing their investment in 2023. First and foremost, mobile remains the top priority for the majority of operators. The adoption of 5G has hit a tipping point with mass market adoption exceeding 50% in many countries. The higher speeds and improved coverage enabled by 5G technology greatly increases the data traffic on the network. This in turn is a major catalyst for the deployment of increased fiber capacity from the radio head to the core network and broader deployment of IP/MPLS to the edge of the network.

我們從客戶那裡聽到了一些關於他們如何確定 2023 年投資優先級的共同主題。首先，移動仍然是大多數運營商的首要任務。 5G 的採用已達到臨界點，許多國家的大眾市場採用率超過 50%。 5G 技術帶來的更高速度和更好的覆蓋範圍大大增加了網絡上的數據流量。這反過來又是從無線電頭端到核心網絡部署增加的光纖容量以及將 IP/MPLS 更廣泛地部署到網絡邊緣的主要催化劑。

The next major priority is to increase the capacity and reach of the fixed broadband network. Availability of fiber-to-the-home Internet access for the majority of consumers is an imperative for practically all countries, reflecting the adoption of hybrid work and education practices. Significant federal funding is supporting more aggressive business plans and a supercharged investment cycle. These first 2 priorities adds an even higher level of attention on total cost of ownership, the third key focus area.

下一個主要優先事項是增加固定寬帶網絡的容量和覆蓋範圍。幾乎所有國家都迫切需要為大多數消費者提供光纖到戶互聯網接入，這反映了混合工作和教育實踐的採用。大量的聯邦資金正在支持更積極的商業計劃和加速的投資週期。前兩個優先事項增加了對總擁有成本（第三個重點領域）的更高關注度。

Increased competition and impacts from inflation puts a premium on every dollar spent and a spotlight on the cost of maintaining both new platforms and legacy infrastructure. Solutions that lower support costs, reduce power consumption and decreased real estate needs have grown in importance as a result. Finally, there's a clear recognition that all aspects of business can yield significant benefits from adoption of a digital or a cloud-first approach.

日益激烈的競爭和通貨膨脹的影響使每一美元的支出都變得更加重要，並使人們關注維護新平台和遺留基礎設施的成本。因此，降低支持成本、降低功耗和減少房地產需求的解決方案變得越來越重要。最後，人們清楚地認識到，業務的各個方面都可以從採用數字或云優先方法中獲得顯著好處。

Service providers and enterprises are reinventing all aspects of their business, leveraging the power of cloud to reduce cost, accelerate service availability and improve overall quality of experience. This includes practically all of the traditional voice and data communication functions. We believe the products and solutions provided by Ribbon are extremely well in line with these investment priorities and provide us confidence that we're in one of the few parts of the economy that will remain robust despite macro environmental pressures.

服務提供商和企業正在重塑其業務的各個方面，利用雲的力量來降低成本、加快服務可用性並提高整體體驗質量。這實際上包括所有傳統的語音和數據通信功能。我們相信，Ribbon 提供的產品和解決方案非常符合這些投資優先事項，並讓我們相信，儘管面臨宏觀環境壓力，我們仍處於少數幾個仍將保持強勁的經濟領域之一。

For Ribbon, we're in a significantly improved position from a year ago. Sales in our IP Optical segment increased 36% in the second half of 2022 compared to the first half. And we anticipate this growth to continue in 2023 on the strength of incremental investment we've made in new products and associated new customer wins. In particular, our focus and investment in IP Routing provides us a significant opportunity to realize our strategy of becoming a major supplier of IP Optical solutions.

對於 Ribbon，與一年前相比，我們的處境有了顯著改善。與上半年相比，2022 年下半年我們的 IP 光學部門的銷售額增長了 36%。我們預計這種增長將在 2023 年繼續，這得益於我們對新產品的增量投資和相關的新客戶贏得。特別是，我們對 IP 路由的關注和投資為我們提供了實現成為 IP 光纖解決方案主要供應商戰略的重要機會。

From a regional perspective, we've significantly diversified and strengthened our customer base. In Europe, we have a broad range of customers across multiple market verticals. We have a strong presence with critical infrastructure providers, where there's a relentless focus on security and reliability. We're very well positioned to continue to grow and take share in this market. A recent example is the multiyear extension we have reached with the Israeli Defense Force to provide critical support and products supporting their unique communication requirements. And the telecom industry is proving very resilient across Europe, and we have significant opportunities with several of the major carriers in the region.

從區域的角度來看，我們已經顯著多樣化並加強了我們的客戶群。在歐洲，我們在多個垂直市場擁有廣泛的客戶。我們在關鍵基礎設施供應商中佔有重要地位，他們一直不懈地關注安全性和可靠性。我們非常有能力繼續發展並在這個市場上佔有一席之地。最近的一個例子是我們與以色列國防軍達成的多年延期，以提供支持其獨特通信需求的關鍵支持和產品。事實證明，整個歐洲的電信行業都非常有彈性，我們在該地區的幾家主要運營商中擁有重要的機會。

There's a critical focus on supplier diversity, given the shifting political landscape and importance of supply chain assurance. The presence we have with our Cloud and Edge portfolio in this region is a major asset as we build confidence in our expanded portfolio. Developing markets such as Africa also present a major growth opportunity in the region as major carriers such as MTN, Airtel, Etisalat and Orange make significant investments alongside major content providers such as Facebook, Google and Microsoft. Fiber networks, both subsea and terrestrial are the fundamental building blocks for these networks, and we're very excited by the early success we've had in the region in 2022. This will be a major focus for us again this year.

鑑於不斷變化的政治格局和供應鏈保證的重要性，供應商多樣性受到了關鍵關注。我們在該地區的雲和邊緣產品組合的存在是一項重要資產，因為我們對我們擴展的產品組合建立了信心。非洲等發展中市場也為該地區提供了重要的增長機會，因為 MTN、Airtel、Etisalat 和 Orange 等主要運營商與 Facebook、谷歌和微軟等主要內容提供商一起進行了大量投資。海底和陸地光纖網絡是這些網絡的基本組成部分，我們對 2022 年在該地區取得的早期成功感到非常興奮。這將再次成為我們今年的主要關注點。

And we expect the India market will also be a major source of growth for us this year, building on the new wins we've achieved with Bharti in the last several months. The investment we've made in new products is paying dividends as we expand our presence and gain market share in both optical and IP networking. In the broader Asia Pacific region, we've also gained share with new customers such as SoftBank, Eastern Telecom, InfiniVAN, Viettel, Taiwan Mobile and others. These are all new accounts over the last year and provide us an opportunity for additional extensions and sales of our entire portfolio.

我們預計印度市場也將成為我們今年增長的主要來源，建立在過去幾個月我們與 Bharti 取得的新勝利的基礎上。隨著我們在光網絡和 IP 網絡領域擴大業務並獲得市場份額，我們對新產品的投資正在產生回報。在更廣泛的亞太地區，我們還獲得了新客戶的份額，如軟銀、東方電信、InfiniVAN、Viettel、台灣大移動等。這些都是去年的新客戶，為我們提供了進一步擴展和銷售整個產品組合的機會。

And in North America, we continue to win new regional service providers as they invest in additional network capacity to support broadband and mobile growth. We've also identified multiple entry points with the major carriers and are making good progress towards breakout wins in this critical region. We also believe that we've made the right investments in our Cloud and Edge segment to maintain revenue and profitability and to ensure our portfolio of secure voice communication products are positioned to gain share in both enterprise and telco market segments. We have a strong recurring revenue base of critical maintenance services that underpin this part of our business.

在北美，我們繼續贏得新的區域服務提供商，因為他們投資於額外的網絡容量以支持寬帶和移動增長。我們還確定了主要運營商的多個切入點，並在這一關鍵地區取得突破性勝利取得了良好進展。我們還相信，我們在雲和邊緣領域進行了正確的投資，以保持收入和盈利能力，並確保我們的安全語音通信產品組合能夠在企業和電信市場領域獲得份額。我們擁有強大的關鍵維護服務經常性收入基礎，支撐著我們這部分業務。

And the U.S. Federal voice modernization opportunity is a large multiyear investment cycle, where we are very well positioned. We continue to make progress on our core strategy to cross-sell our entire portfolio to existing customers, where we have a track record of success and have built a strong level of trust. More and more of our customers are purchasing products from both operating segments, and in some cases, are being deployed as an integrated solution, which is a major differentiator for us.

美國聯邦語音現代化機會是一個多年的大型投資週期，我們在這方面處於非常有利的地位。我們繼續在我們的核心戰略上取得進展，將我們的整個產品組合交叉銷售給現有客戶，我們在這些方面擁有成功的記錄並建立了強大的信任度。我們越來越多的客戶從兩個運營部門購買產品，並且在某些情況下，正在作為集成解決方案進行部署，這對我們來說是一個主要的差異化因素。

So our primary focus in 2023 is on improving the profitability of the business. Our strategy is focused on 4 key elements. First, we expect a major improvement in profitability from the IP Optical business' revenue growth this year. We expect to be able to continue to grow and gain share in the multibillion dollar optical transport market and recent wins such as the Bharti Long Haul award highlights our portfolio competitiveness. We expect this will continue to improve with the launch of a new platform called the 9400 later this year. Even more significantly, we're very encouraged by the growth we're seeing in our IP Routing business on the strength of our new [XDR2000] portfolio and believe this will be a major factor in improving profitability in 2023.

因此，我們在 2023 年的主要重點是提高業務的盈利能力。我們的戰略專注於 4 個關鍵要素。首先，我們預計今年 IP 光業務的收入增長將顯著改善盈利能力。我們希望能夠繼續發展並在價值數十億美元的光傳輸市場中獲得份額，最近贏得的 Bharti Long Haul 獎等獎項凸顯了我們的產品組合競爭力。我們預計，隨著今年晚些時候推出名為 9400 的新平台，這種情況將繼續得到改善。更重要的是，我們對 IP 路由業務在新 [XDR2000] 產品組合的支持下實現的增長感到非常鼓舞，並相信這將成為 2023 年提高盈利能力的主要因素。

Second, we're focused on several key areas of our Cloud and Edge addressable market to maintain revenue and profitability in this business. This includes continued growth in the enterprise market, including winning a significant share of the large federal voice modernization opportunity. We're also encouraged by the pipeline of new telco cloud transformation projects that directly contribute to lowering operating costs, a major priority for our service provider customers.

其次，我們專注於雲和邊緣可尋址市場的幾個關鍵領域，以維持該業務的收入和盈利能力。這包括企業市場的持續增長，包括贏得大型聯邦語音現代化機會的重要份額。我們也對新的電信雲轉型項目的管道感到鼓舞，這些項目直接有助於降低運營成本，這是我們服務提供商客戶的一個主要優先事項。

Third, we anticipate the impact from global supply chain challenges to continue to moderate, improving product cost and operational flexibility. In addition, we have a number of product redesigns that will further reduce our reliance on problematic components and technology and eliminate the majority of issues. And finally, we're targeting a reduction of operating costs of $25 million to $30 million, which will yield approximately $20 million of in-year savings net of inflation and other costs. To help achieve this target, we've recently implemented a series of organizational changes under the banner of Ribbon 3.0.

第三，我們預計全球供應鏈挑戰的影響將繼續緩和，從而提高產品成本和運營靈活性。此外，我們對許多產品進行了重新設計，這將進一步減少我們對有問題的組件和技術的依賴，並消除大部分問題。最後，我們的目標是將運營成本降低 2500 萬至 3000 萬美元，這將在扣除通貨膨脹和其他成本後產生約 2000 萬美元的年內節省。為了幫助實現這一目標，我們最近在 Ribbon 3.0 的旗幟下實施了一系列組織變革。

Our current business unit structure served us well during the initial integration of Ribbon and ECI, providing separate empowered teams focused on the unique aspects of each portfolio. But we're now seeing a growing number of areas where closer collaboration and coordination would be beneficial and have therefore, combined leadership of the business units under Sam Bucci as Chief Operating Officer. Similarly, with the recent addition of Dan Redington from Juniper, we have combined our global sales organization under Dan, emphasizing the importance of IP networking to our growth strategy.

我們目前的業務部門結構在 Ribbon 和 ECI 的初始整合期間為我們提供了很好的服務，提供了獨立的授權團隊，專注於每個產品組合的獨特方面。但我們現在看到越來越多的領域更密切的合作和協調將是有益的，因此，在 Sam Bucci 作為首席運營官的領導下合併了業務部門的領導。同樣，最近加入來自瞻博網絡的 Dan Redington，我們將我們的全球銷售組織合併到 Dan 的領導下，強調 IP 網絡對我們增長戰略的重要性。

In many ways, this is the next logical step in the integration of Ribbon and ECI, reflecting the Ribbon 3.0 branding. From a program perspective, after a surge in investment the last 18 months, we're moderating R&D investment in IP Optical somewhat as multiple new products reach completion. A part of this is related to a new partnership we're finalizing with Tech Mahindra. We're very excited to be working with Tech M to collaborate in the development and deployment of an advanced cloud-based multi-domain, multi-vendor orchestration and management platform that leverages Ribbon technology and Tech Mahindra's global market presence.

在許多方面，這是 Ribbon 和 ECI 集成的下一個合乎邏輯的步驟，反映了 Ribbon 3.0 品牌。從項目的角度來看，在過去 18 個月的投資激增之後，隨著多個新產品的完成，我們正在減少對 IP 光學的研發投資。其中一部分與我們即將與 Tech Mahindra 敲定的新合作夥伴關係有關。我們很高興能與 Tech M 合作開發和部署先進的基於雲的多域、多供應商編排和管理平台，該平台利用了 Ribbon 技術和 Tech Mahindra 的全球市場影響力。

We plan to formally announce our engagement at the upcoming Mobile World Congress in Barcelona later this month. With that backdrop, we expect overall company revenue to grow in 2023 with a range of $840 million to $870 million with Cloud and Edge revenue relatively flat year-over-year and IP Optical revenue growing greater than 15%. Increased sales, along with modest improvement in gross margin and lower operating costs combined to significantly improve projected adjusted EBITDA for 2023 in the range of $95 million to $110 million. Our business has an element of seasonality with the second half typically much stronger than the first half as we experienced in 2022.

我們計劃在本月晚些時候在巴塞羅那舉行的世界移動通信大會上正式宣布我們的參與。在此背景下，我們預計 2023 年公司總收入將增長 8.4 億美元至 8.7 億美元，其中云和邊緣收入同比相對持平，IP 光收入增長超過 15%。銷售額的增加、毛利率的適度改善以及運營成本的降低共同顯著提高了 2023 年預計調整後的 EBITDA，在 9500 萬至 1.1 億美元之間。我們的業務具有季節性因素，下半年通常比我們在 2022 年經歷的上半年強得多。

We anticipate a similar pattern in 2023 with the first quarter being the lowest point for the year, but we are in a much better position from a momentum and visibility perspective. As mentioned, we do expect component shortages to limit shipments this quarter by approximately $10 million. So for the first quarter, we're projecting revenue in the range of $180 million to $190 million, non-GAAP gross margins in the range of 46% to 48%, and non-GAAP adjusted EBITDA in the range of minus $6 million to plus $1 million for the quarter. The upper end of our guidance includes [several million dollar] benefit from the potential Tech Mahindra partnership that we expect to close in the quarter. I'd like to thank the entire Ribbon team and our partners for a strong finish to 2022 and look forward to our continued progress in 2023.

我們預計 2023 年會出現類似的模式，第一季度是今年的最低點，但從勢頭和能見度的角度來看，我們處於更好的位置。如前所述，我們確實預計組件短缺將限製本季度約 1000 萬美元的出貨量。因此，對於第一季度，我們預計收入在 1.8 億美元至 1.9 億美元之間，非 GAAP 毛利率在 46% 至 48% 之間，非 GAAP 調整後 EBITDA 在負 600 萬美元至加上本季度的 100 萬美元。我們指導的上限包括[數百萬美元]受益於我們預計在本季度關閉的潛在 Tech Mahindra 合作夥伴關係。我要感謝整個 Ribbon 團隊和我們的合作夥伴在 2022 年取得了出色的成績，並期待我們在 2023 年繼續取得進步。

Operator, that concludes our prepared remarks, and we can now take a few questions.

接線員，我們準備好的發言到此結束，我們現在可以回答幾個問題。

(Operator Instructions) Our first question is from Tim Savageaux with Northland Capital Markets.

（操作員說明）我們的第一個問題來自 Northland Capital Markets 的 Tim Savageaux。

I have a question on when you announced with Bharti and also a follow-up on the pipeline. And you made some comments in the prepared remarks, which were along the lines of what I was thinking, which is this is a new area for Ribbon in terms of the long haul. I wonder if you can give us a sense of how significant -- well, I think it's significant from a competitive standpoint, if you can talk about that competitive environment and how you were able to translate from backhaul to long haul? And then in terms of the business, how incremental do you think that is to what you're doing with Airtel right now? I think there was take the word massive appeared somewhere in this press release. So maybe expand on that as well?

我有一個問題是你何時宣布與 Bharti 以及管道的後續行動。你在準備好的評論中發表了一些評論，這些評論與我的想法一致，從長遠來看，這是 Ribbon 的一個新領域。我想知道您能否告訴我們有多重要——好吧，我認為從競爭的角度來看這很重要，如果您能談談競爭環境以及您如何能夠從回程轉化為長途？然後就業務而言，你認為這對你現在與 Airtel 所做的事情有多大的增量？我認為本新聞稿中某處出現了大規模這個詞。那麼也許也可以對此進行擴展？

Yes. Tim, well, thanks for joining us, for sure. Yes, so we're obviously pretty excited about the opportunity to expand the business with Bharti Airtel. As you highlighted, our business traditionally has been more around the access aggregation layer of the network. And a lot of what we've been doing has been IP/MPLS at the Layer 2, Layer 3 layer of the network. In order to move into the long haul portion of their network, there was additional product development work required -- to meet some of their requirements. And so that's been a work in progress for the last year or so going through POCs and field trials, et cetera, and culminating finally with the award and the initial deployment starting here this year.

是的。蒂姆，嗯，當然感謝你加入我們。是的，所以我們顯然對有機會與 Bharti Airtel 擴展業務感到非常興奮。正如您強調的那樣，我們的業務傳統上更多地圍繞網絡的訪問匯聚層。我們一直在做的很多事情都是在網絡的第 2 層、第 3 層進行 IP/MPLS。為了進入他們網絡的長途部分，需要進行額外的產品開發工作——以滿足他們的一些要求。因此，在過去一年左右的時間裡，這項工作一直在進行中，通過 POC 和現場試驗等，最終以獎項和今年從這裡開始的初步部署告終。

So it was quite a process to become one of those selected vendors. It's a portion of their network we've never been in before. And as I mentioned, I think it really does kind of reinforce the competitiveness of the portfolio. So from a kind of a incremental or scale perspective, it's certainly meaningful for us, the initial purchase kind of double-digit million level as we scale here this year. So we'll see how that grows over time, but it's one of those kind of major Tier 1 things that were very strategic for us and where our focus has been. And I think from a competitiveness perspective, as operators in that part of the region of the world and others look at different alternatives from a supply perspective, it's given us the opportunity to gain some market share and expand what we're doing.

因此，成為這些選定的供應商之一是一個相當大的過程。這是我們以前從未接觸過的他們網絡的一部分。正如我提到的，我認為它確實在某種程度上增強了投資組合的競爭力。因此，從某種增量或規模的角度來看，這對我們來說當然是有意義的，因為我們今年在這裡擴大規模，最初的購買量達到了兩位數的百萬級別。所以我們會看到它是如何隨著時間的推移而增長的，但它是那些對我們來說非常具有戰略意義的主要一級事情之一，也是我們關注的重點。我認為，從競爭力的角度來看，隨著世界該地區的運營商和其他運營商從供應的角度看待不同的替代方案，這讓我們有機會獲得一些市場份額並擴大我們正在做的事情。

Great. And congrats on that. And your kind of last comments there lead me into my next question, which is you're looking for Tier 1s. And I guess specifically, I don't know if it was 6 or 8, but you put a number on the number of opportunities that you're pursuing in North America, also made reference to multiple, and I think the comment was about Tier 1s in terms of opportunities in Europe. I wonder if you might just give us an update on the state of the pipeline in terms of maybe extend that to Asia and make the comment global with regard to opportunities pursued and how you've seen that develop over the last little while?

偉大的。並對此表示祝賀。你最後的評論讓我想到了我的下一個問題，即你正在尋找第 1 層。我想具體來說，我不知道是 6 還是 8，但你在北美追求的機會數量上寫了一個數字，也提到了多個，我認為評論是關於等級的1s 在歐洲的機會方面。我想知道您是否可以向我們提供有關管道狀態的最新信息，可能會將其擴展到亞洲，並就所追求的機會以及您如何看待過去一段時間內的發展發表全球評論？

Yes. So obviously, I'm trying to provide some level of forward indicators of future success here and the engagements with what I call Tier 1s. These are major operators in different regions of the world. And so obviously, Bharti we're able to announce here in India. I mentioned a few others like Eastern Telephone and InfiniVAN, who are major, major operators in their part of the region of the world or MTN GlobalConnect operating out of Africa. So those are all the types of examples that maybe aren't top of top names known in North America, but they're clearly major, major operators internationally.

是的。很明顯，我試圖在這裡提供未來成功的某種程度的前瞻性指標，以及與我稱之為第 1 層的參與。這些是世界不同地區的主要運營商。很明顯，Bharti 我們能夠在印度這裡宣布。我提到了其他一些公司，例如 Eastern Telephone 和 InfiniVAN，它們是世界所在地區的主要運營商，或者是在非洲以外運營的 MTN GlobalConnect。所以這些都是可能不是北美知名頂級公司的所有類型的例子，但它們顯然是國際上主要的主要運營商。

So that pipeline is still very active of additional opportunities that we're working on either from an RFP or a proof-of-concept perspective, several in North America, several in Europe and several in Asia Pacific. So it's pretty well balanced. And a real key part of our strategy, obviously, to grow that business, provide a more stable source of revenue, more predictable, allows us to be more predictable from a supply chain perspective, improve cost, all those things that I think are really required to have enough scale to be a really strong competitor in the space. And they span both Optical and IP, both our key focus areas for us to find those entry points and kind of land and expand once we're inside these major accounts.

因此，從 RFP 或概念驗證的角度來看，我們正在處理的其他機會仍然非常活躍，有幾個在北美，幾個在歐洲，幾個在亞太地區。所以它非常平衡。顯然，我們戰略的一個真正關鍵部分是發展該業務，提供更穩定的收入來源，更可預測，使我們從供應鏈的角度來看更具可預測性，降低成本，我認為所有這些都是真正的需要有足夠的規模才能成為該領域真正強大的競爭對手。它們跨越光學和 IP，這兩個都是我們的重點關注領域，一旦我們進入這些主要客戶，我們就可以找到這些切入點和土地並進行擴展。

Our next question is from Greg Mesniaeff with WestPark Capital.

我們的下一個問題來自 WestPark Capital 的 Greg Mesniaeff。

Yes. Congrats on the results.

是的。祝賀結果。

Thanks, Greg.

謝謝，格雷格。

First question I wanted to ask you was the business -- the IP Optical business in Europe, particularly the U.K. Can you give us some indication as to what percentage of that business is Huawei replacement?

我想問你的第一個問題是業務——歐洲的 IP 光業務，尤其是英國。你能給我們一些指示，說明該業務中有多少百分比是華為的替代品嗎？

It's a little hard to put our finger on it, and I can't comment specifically on the U.K. I would say, just to give you a sense, though, Greg, the -- I think the majority of our business is more in Continental Europe than it is in the U.K. today from an IP Optical perspective. We mentioned before, BT is one of our customers more on the access side of more traditional portion of the network for ECI that we continue. But a lot of our business in Europe is either with the regional telecom providers and/or a lot with the critical infrastructure.

很難把我們的手指放在上面，我不能具體評論英國。我想說，只是為了給你一個感覺，格雷格，我認為我們的大部分業務更多是在大陸航空從 IP 光學的角度來看，歐洲比今天的英國更出色。我們之前提到過，BT 是我們的客戶之一，更多地位於我們繼續的 ECI 網絡的更傳統部分的接入端。但我們在歐洲的很多業務要么與區域電信提供商合作，要么與關鍵基礎設施合作。

And I mentioned a few names where we're very active there today. So I would say that's the stronger part. Just to comment on your Huawei replacement question. Certainly, there are countries like the U.K., which have been pretty aggressive in their position around Huawei as part of their infrastructure. As you get into other countries in Europe, it's less a stringent requirement at this point, whether it's in Italy or Spain or Germany, there isn't quite as strong a mandate. And so we do face Huawei in many of the countries that we compete in today. And we don't win them all, but we definitely have to compete against them and many of the cases, we're winning in an environment where we're competing directly with them.

我提到了一些我們今天非常活躍的名字。所以我會說這是更強大的部分。只是評論您的華為更換問題。當然，也有像英國這樣的國家，作為其基礎設施的一部分，它們在圍繞華為的立場上一直非常激進。當你進入歐洲其他國家時，在這一點上，它的要求並不那麼嚴格，無論是在意大利、西班牙還是德國，都沒有那麼嚴格的要求。因此，我們確實在我們今天競爭的許多國家/地區面對華為。我們並沒有贏得所有人，但我們肯定必須與他們競爭，在許多情況下，我們在與他們直接競爭的環境中獲勝。

Got you. And turning to the Cloud and Edge business. It seems to me the session border controller market, when you subdivided by carrier and enterprise has kind of gone through some shifts in the last couple of quarters in terms of both market share and relevant -- relative importance. What are you seeing from kind of a macro view of that market in terms of carrier versus enterprise? Are you gaining an enterprise? Are you holding steady in carrier? I mean, what are the competitive dynamics you're seeing there?

明白了並轉向雲和邊緣業務。在我看來，會話邊界控制器市場，當你按運營商和企業細分時，過去幾個季度在市場份額和相關 - 相對重要性方面經歷了一些變化。在運營商與企業方面，您從該市場的宏觀觀點中看到了什麼？你在創業嗎？你在承運人中保持穩定嗎？我的意思是，您在那裡看到的競爭動態是什麼？

Yes. Good question, Greg. In the carrier space, it can be a lumpy business. Many times, we're selling, it's a capital -- a CapEx purchase, either hardware and software together or a software license purchase and a perpetual license. And so we'll sell capacity to one of our carrier customers in a quarter, and maybe it will be 2 quarters or 3 quarters before they need more capacity again. And so we do see that kind of move around in 1 quarter, it could be up another quarter, it could be down. In some cases, we're selling SBCs alongside our voice infrastructure, our NTR business. And in other cases, we're selling SBCs and not voice. So it can vary customer to customer.

是的。問得好，格雷格。在航母領域，這可能是一件坎坷的事情。很多時候，我們出售，這是一種資本——資本支出購買，無論是硬件和軟件一起購買，還是軟件許可購買和永久許可。因此，我們將在一個季度內向我們的一個運營商客戶出售容量，也許在他們再次需要更多容量之前需要 2 個或 3 個季度。因此，我們確實在一個季度內看到了這種變化，它可能會再上升一個季度，也可能會下降。在某些情況下，我們將 SBC 與我們的語音基礎設施、我們的 NTR 業務一起銷售。在其他情況下，我們銷售的是 SBC 而不是語音。所以它可以因客戶而異。

I think we're holding our own very well from a market share perspective. I feel like our portfolio is really well positioned with the carriers and when we get an opportunity, we do pretty well. As you know, enterprise has been a strategic area for us to focus on and grow and gain share. It's a part of the market where we have not had as much market share traditionally, and it's been a real focus for the last 18 months to evolve the portfolio as well as the go-to-market and the sales motion to gain more share. In some cases now, we're providing annual enterprise-wide licenses that basically authenticate the amount of software and capacity that our customers can use.

我認為從市場份額的角度來看，我們的表現非常好。我覺得我們的產品組合在運營商中的定位非常好，當我們有機會時，我們做得很好。如您所知，企業一直是我們關注、發展和獲得份額的戰略領域。這是我們傳統上沒有那麼多市場份額的市場的一部分，在過去的 18 個月裡，它一直是一個真正的重點，以發展投資組合以及進入市場和銷售動議以獲得更多份額。現在在某些情況下，我們提供年度企業範圍的許可證，基本上驗證我們的客戶可以使用的軟件數量和容量。

In some cases, we're still selling appliances and in fact, our enterprise edge portfolio of session border controllers that really addresses small, medium-sized business has been very robust selling through our carrier partners. But long answer to your question, the enterprise piece has got a real focus. So I'm really pleased to see the growth happen in the fourth quarter here.

在某些情況下，我們仍在銷售設備，事實上，我們真正針對中小型企業的會話邊界控制器的企業邊緣產品組合通過我們的運營商合作夥伴銷售得非常好。但是對你的問題的長篇回答，企業部分得到了真正的關注。所以我很高興看到這裡第四季度出現增長。

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

我們的下一個問題來自 Dave Kang 和 B. Riley。

Nice quarter. Perhaps, you talked about bookings and book-to-bill. Just wondering if you can provide some color on backlog? I don't think you really talked about backlog. Any color on backlog, whether it was up, down? And how should we think about -- what should our expectation be going forward?

不錯的季度。也許，您談到了預訂和預訂到賬單。只是想知道您是否可以在積壓工作中提供一些顏色？我不認為你真的談論積壓。積壓的任何顏色，無論是上升還是下降？我們應該如何思考——我們對未來的期望是什麼？

Yes. Thanks, Dave. So from a -- as you said, we don't disclose absolute numbers around backlog. But with the book-to-bill or the book to revenue above [1] in the quarter, it directly implies that we were building some additional backlog. I did comment that we would have shipped more in the quarter, if we could. We were supply limited, particularly around our access routers and upwards of $10 million or so would have shipped in addition in the quarter if we could have built it. And that's really carried forward into the first quarter. And in fact, a lot of that backlog has really moved out into the second quarter as we continue to be short on a specific component around that part of the portfolio.

是的。謝謝，戴夫。因此，正如您所說，我們不會透露積壓的絕對數字。但是，由於本季度的訂單出貨比或訂單收入高於 [1]，這直接意味著我們正在建立一些額外的積壓訂單。我確實評論說，如果可以的話，我們會在本季度出貨更多。我們的供應有限，尤其是在我們的接入路由器周圍，如果我們能夠製造的話，本季度的出貨量將超過 1000 萬美元左右。這真的延續到了第一季度。事實上，由於我們繼續缺少圍繞該部分投資組合的特定組件，因此很多積壓訂單確實已經轉移到第二季度。

So as I mentioned in the comments, we -- because of all that, I think we feel like we have better visibility and kind of better line of sight around the momentum in the business, given the booking momentum in really both Cloud and Edge and in the IP Optical business.

因此，正如我在評論中提到的那樣，我們 - 由於所有這些，我認為我們覺得我們對業務勢頭有更好的可見性和更好的視線，考慮到雲和邊緣的預訂勢頭以及在 IP 光業務中。

And so you gave the annual outlook of $840 million to $870 million. Just wondering if you can go over your assumptions as far as bookings you expected and where the backlog will be, any kind of comments?

所以你給出了 8.4 億美元到 8.7 億美元的年度前景。只是想知道您是否可以根據您的預期預訂以及積壓的情況來檢查您的假設，有任何評論嗎？

Yes. So the $840 million to $870 million at the midpoint is, I think a little over 4% growth over what we reported in 2022. The assumptions around that are that the Cloud and Edge business is fairly consistent to what we did in 2022. And there's obviously a lot of things going on there with enterprise growing the federal portion of the business that we're really focused on gaining share growing and maybe other parts growing less.

是的。因此，中點的 8.4 億美元至 8.7 億美元，我認為比我們在 2022 年報告的增長略高於 4%。圍繞這一點的假設是雲和邊緣業務與我們在 2022 年所做的相當一致。而且有顯然，隨著企業發展聯邦部分業務，我們真正關注的是獲得份額增長，而其他部分可能增長較少，在那裡發生了很多事情。

But overall, we feel like we have visibility to maintaining the level of business that we just did in 2022 and with some of the operational savings improving the earnings from that part of the business. The top line growth, clearly, we expect to come from the IP Optical Networks portion of the business. Again, we just -- we've now had 2 quarters of pretty solid growth, Q3 and Q4. Obviously, we've got some seasonality. So naturally, Q1 is not at the same level as Q3 and Q4, but up -- but we think up from the previous year. And that will be the large part of the top line revenue growth to drive overall for the company of 4% plus growth, but that part of the business growing at a much faster rate.

但總的來說，我們覺得我們有能力維持我們在 2022 年剛剛完成的業務水平，並且通過一些運營節省來提高這部分業務的收益。顯然，我們預計收入增長將來自業務的 IP 光網絡部分。同樣，我們只是 - 我們現在有兩個季度非常穩健的增長，第三季度和第四季度。顯然，我們有一些季節性。所以自然地，Q1 與 Q3 和 Q4 不在同一水平，而是上升 - 但我們認為比前一年高。這將是推動公司整體增長 4% 以上的收入增長的很大一部分，但這部分業務的增長速度要快得多。

Got it. And my last question is on your gross margin outlook. So you're starting at 46% to 48%. First of all, so it's going to be down, what, 6 points, 7 points sequentially from fourth quarter to first quarter. Just wondering if you can explain what's driving that decline? And then for you to hit 53% to 54% for the year, I'm assuming you have to exit the year like, I don't know, 56% to maybe 58%. So can you -- what's going to drive that margin expansion from 47% to 50% something from [first quarter] to fourth quarter this year?

知道了。我的最後一個問題是關於您的毛利率前景。所以你的起點是 46% 到 48%。首先，它會下降，從第四節到第一節依次下降 6 分、7 分。只是想知道您是否可以解釋是什麼導致了這種下降？然後你今年要達到 53% 到 54%，我假設你必須退出這一年，我不知道，56% 到 58%。那麼你能嗎 - 從今年 [第一季度] 到第四季度，什麼會推動利潤率從 47% 增長到 50%？

Yes. No, it's a good question, Dave. The first quarter gross margin is not indicative of what we think the year looks like in addition to just a lower revenue level kind of dragging down the gross margin, fixed cost absorption. The IP Optical portion of the business, we think is down a little bit on margin in the quarter. Some of these new wins I mentioned typically would have a lower margin at the early stages of the project as we deploy some of the infrastructure.

是的。不，這是個好問題，戴夫。第一季度的毛利率並不代表我們認為今年的情況，除了較低的收入水平會拖累毛利率，固定成本吸收。我們認為該業務的 IP 光學部分的利潤率在本季度略有下降。當我們部署一些基礎設施時，我提到的這些新勝利中的一些通常會在項目的早期階段獲得較低的利潤。

And it's kind of the gift that keeps on giving then as you add capacity and transponders into the network, the margins are better. So that's kind of the phenomenon going on in the first quarter with IP Optical. And kind of similarly with Cloud and Edge, we think the margins are a little lower than they were a year ago. We do expect to ship more of the enterprise edge equipment I mentioned in the first quarter, which has more hardware content. So that combination drives a lower expectation on margin in the first quarter. Again, we don't think, obviously, with the full year guidance but that's an indication of what the full year looks like at all. But we just had fairly good margin results in Q3 and Q4 '22, and that's more indicative of what we think the rest of the year here looks like.

當您向網絡中添加容量和轉發器時，這是一種不斷贈送的禮物，利潤會更好。這就是第一季度 IP Optical 出現的現象。與 Cloud 和 Edge 類似，我們認為利潤率比一年前略低。我們確實希望出貨更多我在第一季度提到的具有更多硬件內容的企業邊緣設備。因此，這種組合降低了第一季度的利潤率預期。同樣，我們顯然不認為有全年指導，但這完全表明了全年的情況。但我們在 22 年第三季度和第四季度的利潤率結果相當不錯，這更能說明我們認為今年餘下時間的情況。

Our next question is from Erik Suppiger with JMP Securities.

我們的下一個問題來自 JMP Securities 的 Erik Suppiger。

Yes. Good quarter. First off, India has come up a couple of times as an active area on 5G. Curious what does the opportunity there outside of Bharti look like? And then secondly, could you -- I'm not sure if you commented, but can you comment a little bit in terms of the timing on the new contract win that you had with Bharti, what -- how that will ramp up over the course of '23?

是的。好季度。首先，印度已多次成為 5G 的活躍地區。好奇 Bharti 之外的機會是什麼樣的？其次，你能否——我不確定你是否評論過，但你能否就你與 Bharti 贏得新合同的時間點發表一些評論，什麼——這將如何在23 年的課程？

Yes. Erik, yes, thanks for joining. Good question. It's hard not to get excited about where India is headed at this point. Of course, it's been a tougher area for us the last couple of years. But obviously, we're seeing incremental investment going on. And it's not just in telecom, but you probably saw this morning the big purchase around airlines, airplanes going into India, and I think that tells you something about the economy. It's pretty hot at this point.

是的。埃里克，是的，感謝您的加入。好問題。很難不對印度目前的發展方向感到興奮。當然，在過去的幾年裡，這對我們來說是一個更艱難的領域。但顯然，我們看到增量投資正在進行。不僅僅是電信，你今天早上可能看到了圍繞航空公司、飛往印度的飛機的大筆採購，我認為這告訴了你一些關於經濟的事情。在這一點上很熱。

And the investment we've made over the last few years establishing the infrastructure that we have in India to support our customers, hugely strategic for us. And part of the win, part of the differentiation, I think we bring is that local presence. As I've mentioned to you a few times, we've got resources across all the major metro areas throughout India supporting our customers with the deployment of the products, and that's just a fundamental asset for us as a company.

我們在過去幾年中進行的投資建立了我們在印度擁有的基礎設施來支持我們的客戶，這對我們來說具有巨大的戰略意義。部分勝利，部分差異化，我認為我們帶來的是本地存在。正如我多次向您提到的那樣，我們擁有遍布印度所有主要都市區的資源，支持我們的客戶部署產品，這對我們公司來說是一項基本資產。

Bharti obviously is our lead strategic customer in the region, but the other operators such as Vodafone and even Tata are really important customers. I think it's an interesting dynamic, obviously, with Reliance Jio being such a dominant force and creating a super competitive environment. And so how each of the operators reacts, I think will be a little bit different. Clearly, Bharti is kind of doubling down on the investment. And we'll see what the other operators do and how we can expand our business in that region given the investment we've made there. But it's a really exciting market right now.

Bharti 顯然是我們在該地區的主要戰略客戶，但 Vodafone 甚至 Tata 等其他運營商都是非常重要的客戶。我認為這是一個有趣的動態，很明顯，Reliance Jio 成為了主導力量並創造了一個超級競爭的環境。因此，我認為每個運營商的反應會有所不同。顯然，Bharti 有點加倍投資。我們將看看其他運營商在做什麼，以及我們如何在該地區進行投資以擴大我們在該地區的業務。但現在這是一個非常令人興奮的市場。

And in terms of the new contract with Bharti, did you -- what comments did you make earlier about that? How can we think of that in terms of '23 contribution?

關於與 Bharti 的新合同，您之前對此有何評論？我們如何根據 23 年的貢獻來考慮這一點？

Yes. So in the last 2 months or so, we've announced 2 new wins there, one around the Cell Site Router portfolio or product, where we're -- which is a brand-new area for us, where we're providing that edge router kind of an access level router right at the edge of the 5G mobile network. And then the new one we just announced yesterday is really on the optical transport layer in the long haul, the infrastructure investment they're making around fiber.

是的。因此，在過去 2 個月左右的時間裡，我們宣布了 2 項新的勝利，其中一項是圍繞蜂窩站點路由器產品組合或產品，我們所在的領域——這對我們來說是一個全新的領域，我們正在提供邊緣路由器是一種接入級路由器，位於 5G 移動網絡的邊緣。然後我們昨天剛剛宣布的新產品實際上是在長期的光傳輸層上，他們圍繞光纖進行的基礎設施投資。

Both of these are significant wins for us, multi-million dollars that we're now shipping against in the first half of the year. Of course, if we execute well, we hope to compete and continue that and grow that business going forward. So we're kind of in the early stages of deployment and off to a good start.

這兩個對我們來說都是重大的勝利，我們現在在今年上半年出貨了數百萬美元。當然，如果我們執行得好，我們希望繼續競爭並繼續發展業務。所以我們有點處於部署的早期階段，並且有了一個良好的開端。

There are no further questions at this time. I'd like to hand the call back over to Bruce McClelland for any closing comments.

目前沒有其他問題。我想將電話轉回 Bruce McClelland 以徵求任何結束意見。

Yes. Great. Thanks again for everyone being on the call and your interest in Ribbon Communications. We look forward to speaking with many of you at upcoming investor conferences. And we've got a big presence at major events such as Mobile World Congress in Barcelona, the Optical Fiber Communication Conference in San Diego and Enterprise Connect coming up in Orlando. So I look forward to meeting many of you and continuing the discussion. And operator, thank you as well. This concludes our call.

是的。偉大的。再次感謝大家的來電以及您對 Ribbon Communications 的關注。我們期待在即將舉行的投資者會議上與你們中的許多人交談。我們在巴塞羅那的世界移動通信大會、聖地亞哥的光纖通信大會和即將在奧蘭多舉行的 Enterprise Connect 等重大活動中佔有一席之地。因此，我期待與你們中的許多人會面並繼續討論。還有接線員，謝謝你。我們的通話到此結束。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。