Q1 2020 Earnings Call

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Hi, Communications Hello, and.

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Pardon.

I think continues to be fairly robust as more capacity being added in those areas.

I do think your wife freeze, we're trialing equipment, you know, what you're trying to bring product into our new customer into new network and going through.

Both the are applied across its trend or the RFP process and trials those are more challenging and I think that reflects a little bit in what we're seeing in our packet optical business short term.

I think as you know as you go to market to address enterprise. That's for the most part we're working through partners either service providers or other types of connection so it's writers and.

So we're trying to leverage that scale and into.

Kind of the larger scale enterprises.

Thank you probably saw a recent announcement.

Our portfolio from working with Microsoft and their direct routing capability. So I think there are a variety of places that we'll continue to be more robust and others and we need to focus on those for sure.

I personally the response Bruce one more if I may for Georgia. So can you give us any insight if you havent us logic I apologize I am seeing it yet, but can you give us any insight on the revenue mix geographic we both for traditional would've been in for you see if I go back to this fall you. So I'd made when it.

I was trying to go public if I recall you can give you at the time was 40% in Russia was around another 20% of I, maybe somewhat off in those numbers, but I assume in Russia.

You have some understandable challenged zero I assume there's still a big piece today of the puzzle in your statement I think I've heard you said that you're expecting improvement the second half, albeit visibilities bad, but the improvement that you're expecting is that based upon what you're currently seeing or just business levels. There are so low behalf.

Go up.

Yes. So good question and then as Daryls digging out the numbers I'll I'll give you. The first part of the response, so certainly with the you see business. Historically you know the three regions that are strongest for that packet optical business, our Europe, Russia in India.

And what we're currently seeing is the European Peter is pretty robust.

And.

You know kind of ongoing deployment of capacity and those sorts of things has been pretty solid.

The two markets, we mentioned more impactful, Russia and India.

You know, Russia somewhat related to come, but obviously and somewhat related to devaluation of currency and those sorts of issues given the oil environment.

And in India, which is obviously, a large and important market for the business.

In addition to the cobot impact just the general environment around a that the.

The challenge is between the wireless carriers and the governments around you know taxation rules and those things have slowed down some of the capital spend short term.

The discussion around adjusted gross revenue and and what taxation Seo.

As I think Darryl mentioned in his script, we we have already started to see improvements both related to I think plans to <unk> to to be able to get back after coded as well as I think just in general no plans to start moving forward on deployments some purchases but to your point.

It's going to take some time and and frankly nobody knows for sure just how quickly that happens and and the you know just in general what sort of impact in the global economy. There is in general and unemployment rates and those sorts of things. So we are.

Trying to be conservative in and how we frame this for you.

Daryl I think you probably got the numbers that he was requested.

Hey, Paul I Hope that you and your team and your families are doing well, it's nice to speak with you.

Within.

Within historic two parts ribbon historically has been approximately 60% United States, 40% outside the United States in terms of the revenue mix and when when we put our 10-Q on file you'll see that the the case in terms of the $30 million that we recognized in the shorter period in March for easy Guy over.

Third as that is which is a pretty customary is.

Hold in the European region, a little less than a third of that was sold in the Indian region and then the other regions fill in around that.

Great aggressively prison about one last quick one if I may in your optical business acquired platforms.

Mostly coming up against an enterprise I know the landscape in general in terms of marriage players in optical but within the enterprise market. We're selling who are you most directly computer games.

Yes, so in some parts of that enterprise vertical and of course, there's a variety of different types of enterprises will see the normal names you'd expect tianna or in Panera, a in international markets walk away in some cases, Nokia in particular, where they've got a larger set of products or services that they're bringing into.

Into some of those enterprise verticals. So it's a variety of different a different players and I think you probably saw asked that you see I had it announced a partnership with.

In somebody is going to market with them and we're continuing that relationship.

That will that will help to accelerate.

Again I finished at the time the insight or were you all walk subsequent along the way Bruce.

I was all of you hoped and safety for you in level. Thank you. Thanks, Thanks very much Paul.

Thank you.

Rendered asked the question you mean press star one.

The next question turned in line of Mike Latam went with Northland. Please proceed with your question.

Hi.

Hi, Michael anymore.

We expect strong when thinking about capex from your customers.

Yeah, I apologize, you're breaking up a lot do you mind.

Okay.

Do you expect some real second call Capex.

Huh.

We do we have a prediction on second half Capex as I'm, sorry, you're really breaks up.

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We expect some real second okay.

Oh.

[noise] I believe what I heard and let me I believe it or heard and let me let me ask.

Are we seeing what is our projection of capex for our customers in the second half and would we believe that capex would be stronger yeah, well in North America. If you follow up obviously the carrier Capex.

In some cases, there's obviously, an increasing capex Verizon talking about increasing capex.

What we've seen this is pretty robust spend in those areas a it's a little hard to tell what the second half looks like a I know if you you know you've talked to carriers. There there are thinking about what happens with unemployment and and disconnects and flow pays and those sorts of things So I think they'll.

Be careful on on their capex, so far it's been pretty positive commentary.

On the Capex environment, particularly as the traffic patterns have shifted so significantly and I think expectations are that continues for for quite some time and so you know that kind of the retooling of how the network is is performing and where the traffic is coming from et cetera. Its certainly a choice.

Change in the network.

The international markets of course, the two that we follow most closely Indian Russia.

It's hard to imagine that it doesn't improve in the second half of the year, it's come down a it feels like pretty substantially in the first south.

And as things get back a little bit more normal Oh I'd be surprised if it doesn't come back a little stronger from the first house now whether it gets back to last year, an honest little hard to tell and Europe I again, it's been pretty stable I think it will depend a little bit on just how significant.

You know the overall economy, a impact is and just how fast some of that comes back.

So if that helps you too much but that's that's kind of what we're seeing at this stage.

And.

Then on Lake.

Got it different strategies.

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Not that customer.

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Well you're speakers your microphone is very distorted unfortunately I'm sorry.

Yeah, I am or if you're on a on a speaker phone at which would be able to pick up a handset may or may improve the sound.

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I think that versus anymore.

Okay I apologize.

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[noise] <unk>, whether additional questions Mr. Latimer.

I think maybe take them offline.

Have a little better audio.

Hi, Thank you and at this time I'll turn the call back to Bruce Mcclelland for closing remarks.

Alright, Thank you Rob a it's a busy earnings season, so I know everybody's juggling a variety of different calls a this evening, but you know we appreciate those have joined here Tonight concludes our call and look forward to updating everyone again soon.

Well be participant getting a variety of investment conferences and.

And you meet with many virtually.

Alright have a good evening thanks, Rob.

You're welcome. Thank you and this concludes today's conference you may disconnect at this time. Thank you for your participation.