Q3 2021 Ribbon Communications Inc Earnings Call
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Greetings and welcome to the Ribbon Communications third quarter 2021 financial results conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone.
On key pad.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host Tom Berry Investor Relations.
Good afternoon, and welcome to ribbon third quarter 2021 financial results Conference call I'm, Tom Mary Investor Relations for Ribbon Communications.
On the call, David and Bruce and his team.
Chief Executive Officer, and Mick Lopez Evans, Chief Financial Officer, today's call is being webcast live and will be archived on the Investor Relations section of our website visitors communications Dot com.
Our press release and our supplemental slides are currently available.
Certain matters, we'll be discussing today, including our business outlook and financial projections for the fourth quarter of 2021 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 the forward looking statements. These risks and uncertainties are discussed in our documents filed with the SEC.
Our most recent Form 10-K and Form 10-Q.
For you to our Safe Harbor statement included on slide two of the supplemental slides for this conference call.
In addition, we will present non-GAAP financial information on this call reconciliations to the applicable GAAP measures are included in the earnings press release, we issued this afternoon as well as in the supplemental slides for this conference call, which again are both available on the Investor Relations section of our website and now I'd like to turn the call over to Bruce Bruce.
Great. Thanks, Tom and good afternoon, everyone and thank you for joining us today to discuss our third quarter 2021 results and our outlook for the fourth quarter.
The third quarter played out almost exactly as we expected with the exception of increasing supply chain constraints revenue in the quarter was $210 million with approximately $9 5 million moving to the fourth quarter due to supply chain related constraints.
Profitability was very solid with both adjusted EBITDA, a non-GAAP earnings per share within our guided range. Despite the lower sales and increased costs related to component pricing transportation and logistics.
Without these issues, we would've been at the midpoint of our guidance on the revenue range and we would have exceeded our guidance for both adjusted EBITDA and non-GAAP earnings per share.
In our IP optical networks segment, we continued to add new customers with 12, new logos this quarter.
And to build our presence in a critical north American market, where sales in this region have increased 270% on a year to date basis.
We had an exciting new win in the quarter with fire of wireless and fiber networks, a top 10 mobile network operator in the U S.
Fire was deploying our entire IP optical solution set.
Paulo for DWP M transport Neptune for IP, Mpls networking and Muse for domain orchestration and network management.
The deployment will support one gig and 10 gig client side aggregation over a 200 gig optical transport network that easily scales up to 400 gateways links.
A converged IP optical network supports both broadband backhaul and five G X all services.
We also announced a new win with Dakota Central a longtime ribbon cloud and edge customer based in North Dakota.
They chose our IP optical solutions increased broadband speeds and provides the ability to backhaul <unk> mobile traffic.
Outside of the U S. We added a major new customer megaphone, the second largest mobile phone operator in Russia.
After an extensive RFP and trial process, they selected our Apollo DWP and solution for long haul transport.
We're in the early stages of deployment with this new tier one customer.
Similarly, we had a great win with more until the second largest fixed broadband provider in Indonesia.
We're adding capacity to their network as well as adding a new subsea cable and we'll utilize our Apollo B WDM platform.
In Europe, we continue to win new critical infrastructure customers signing deals with a large Swiss utility company and a major rail operator in Germany.
These are all great examples of the strength of our IP optical portfolio and our ability to compete and win against the installed incumbents.
Our product bookings to revenue in the quarter was 1.17 times signaling growing demand into the end of the year.
Sales in India continued to be impacted by environmental factors and while shipments in the quarter were consistent with the second quarter. This was still down approximately 20% from a run rate in the second half of 2020 and well below 2019 well.
While the market is slowly improving we now only anticipate modest improvements in the fourth quarter.
We remain well positioned to capture significant business once the market rebounds in 2022.
And our cloud niche business sales were down approximately 5% from the third quarter last year, excluding Kandy.
When we benefited from higher session border controller spending for both service providers and large enterprise during the peak of Covid.
Gross margins in the third quarter were very strong with a high mix of software.
When combined with a 14% reduction in our non-GAAP operating expenses adjusted EBITDA in this segment increased 7% compared to the third quarter of 2020.
Demand for our voice over IP network transformation solutions was exceptionally strong again this quarter growing 78% year over year with higher shipments of our sauce, which in media gateway platforms.
We have early visibility on several new major projects beginning in 2022 that will continue the momentum in this business and we see growing interest in the adoption of cloud centric technologies, what we're calling telco cloud.
This trend is definitely breathing new life into this very important product segment.
Session border controller sales decrease from the third quarter of last year, primarily due to a very large wireless transcoding deal last year and strong sales in our <unk> products to large enterprise.
I'm very encouraged by the growing pipeline of opportunities following the creation of a dedicated enterprise sales team earlier this summer.
We have new opportunities across a range of different verticals health care insurance industrial state and local government financials and <unk>.
Meaningful improvement in sales this quarter.
Our ribbon connect SBC as a service solution supporting Microsoft teams continues to gain traction with over 100 distributors and partners now on boarded.
We also added a top three U S episode to the platform in the quarter to support their growing business services offering.
It has several large international carriers evaluating the service.
While it's still early paid subscriptions more than doubled over the last 90 days and we expect to continue to see sizable growth from its new recurring revenue service offering.
And finally in our reoccurring revenue maintenance business, we had another strong bookings quarter and continue to maintain a very high renewal rate with bookings for the year now essentially at 100%.
I'll now turn it over to Nick to provide additional detail on our results for the quarter and I'll come back on to review our guidance and provide additional detail on our plans for the remainder of 2021 and comment on 2020.
As Bruce stated we were very pleased with our performance this quarter, considering the challenging supply chain environment.
Let's start with commentary about our GAAP results for the quarter, our GAAP net loss of $59 million includes a net negative impact of $55 $6 million for 38 cents per share related to our investments in a D. C. T. As we have mentioned in the past fluctuation.
E C T stock price affect our other income and expense line has been mark to market. Our investments every quarter, we've got excluding noncash items from our non-GAAP results.
Other factors contributing to the difference between our GAAP and non-GAAP results for the quarter include $2 million and restructuring expenses related mostly to continued downsizing of our real estate footprint 2 million integration expenses and usual adjustments for amortization of intangible assets and noncash compensation.
On an adjusted non-GAAP basis third quarter 2021 results were as follows total revenue was $210 million was down 7% year over year when adjusted for the sale of Kandy and negatively impacted by approximately $95 million from supply chain constraints during the quarter.
Non-GAAP gross margin was 57% into third quarter within our guidance range and down two percentage points from the prior year period.
I would ask routine strong margins of 67%.
Optical networks margin of 37% was affected by component cost and freight increases as well as other items that we will explain in detail.
Non-GAAP operating expenses were $93 million in the quarter up from $90 million in the second quarter due to one time benefits, we had last quarter as well as incremental R&D investments and our IP optical network segment, along with increased travel and marketing expenses non.
Non-GAAP adjusted EBITDA was $32 million at the low end of our guidance, but a good result, given the supply chain constraints.
Non-GAAP diluted earnings per share was about cents in the third quarter within our 11 to 13 cents guided range. Our diluted share count was 148 million for GAAP and 154 million for non-GAAP earnings in the quarter.
Now, let's turn to the results of our two business segments.
You know cloud and edge fitness third quarter revenue was $142 million down 5% on an organic basis, we continue to trade with strong gross margins was 67% in the quarter up one percentage point from the third quarter last year, and our fourth consecutive quarter at or above 67%.
Non-GAAP adjusted EBITDA for carbon X was $45 million up from $42 million for the third quarter of last year with a margin of 32%.
The year over year change was driven by a higher.
Higher software mix, the candy sales restructuring savings and discretionary expense savings.
Here are a few additional points on the carbon ish performance in the quarter.
Product revenue was $66 million all service revenue contributed $77 million with the majority of our service revenue again coming from our strong reoccurring maintenance business software accounted for 68% of total product revenue up 12 percentage points from the second quarter.
Now turning to our IP and optical networks business, we recorded third quarter revenue of $68 million down slightly from $70 million in the second quarter due in part to supply constraints and logistic delays.
Non-GAAP gross margin was 37% in the third quarter, which showed an 11 percentage point decline as compared to a 48% in the second quarter. The lower gross margin in the quarter deserves a few comments and this is not expected to be the go forward run rate.
We previously noted in the second quarter Investor call at the strong gross margin for the second quarter, a 48% benefited from a number of onetime items and unusually strong product and customer profitability mix.
In the third quarter. These two matters reverted back to normal and we had a further 3% decrease in margin due to supply chain incremental costs that included higher component prices expedite fees and freight costs.
Our priority is to continue to deliver high quality products to our customers with minimal delays or disruptions, we do expect.
Continued cost pressure suppliers and transportation for the next several quarters, but are actively working on mitigation yes.
We estimate gross margins at or above 40% for the IP optical segment for the fourth quarter as we increase our revenue.
Now here are some consolidated key metrics for the company.
Maintenance revenue represented 34% of total revenue in the third quarter up two percentage points from the 32% in the third quarter last year.
Service providers accounted for 82% of our revenue in the quarter and enterprise customers represented 18% compared to 71%, 28%, respectively for the third quarter last year.
National customers provided 56% of our total revenue in the third quarter, what percentage point above the 55% in the third quarter of 2020.
Our book to revenue exclude maintenance was.
Zero point 98 times for the third quarter.
Turning to the balance sheet, we ended the quarter with cash cash equivalents of $104 million, including $3 million in restricted cash.
This is a decrease of $11 million from the previous quarter due primarily to a $16 million increase in accounts receivable due to timing of collections at quarter end, our 100 million dollar revolver still remains undrawn.
Once again, we comfortably met our quarterly financial covenants for our term loan our bank leverage ratio was 2.3 or four times well below the three five times maximum fixed.
Fixed charge coverage ratio was three nine times more than three times to 125 times minimum.
Capital expenditures were $4 million for the quarter, which had $600000 of real estate leasehold improvements.
Really proud of the team this quarter for meeting customer demands and achieving our profitability guidance now we'd like to turn the call back to Bruce to discuss the operating environment and our outlook for the quarter.
Great. Thanks, Nick.
Before discussing our guidance for the fourth quarter I'd like to provide a few comments about the progress we're making on our core strategy.
Cross selling of our IP optical portfolio to the broad base of traditional ribbon customers utilizing our voice over IP solutions.
We have very big ambitions for our IP optical business and have a deliberate strategy in each region to gain entry into large service providers. The control the majority of the capital spend in the industry.
In the last 12 months, we've had a series of material wins with significant operators such as Rogers Optus Singtel piece.
Peace Megaphone Telecom Italia, Taiwan mobile and Sony.
The revenue growth associated with these wins is not yet reflected in our current financial results in a material way, but we are investing in both R&D and go to market to support these wins.
It will be a strong addition to the base of customers currently supporting our business.
Beyond that we have significantly increased the number of tier one customers. We're actively engaged with and who are evaluating one or more elements of our portfolio.
As highlighted on slide 12 of our third quarter Investor presentation.
The sales cycle will take time, but we expect many of these customers will be the next wave of wins further increasing revenue in the second half of 2022 and full year 2023.
And the list of potential additional targets beyond this is even longer and collectively represents an even larger addressable market.
All in we estimate that we can address a $14 billion global market and are investing to capture a much larger share than we have today.
Our disruptive approach to enable a more open ecosystem in network architecture, optimizing across both optical and IP layers of the network and providing a next generation orchestration and automation control system is really resonating with customers and disrupting competitors.
Extensive investments will be made in fiber network infrastructure over the next five years, enabling true five T mobile networks and dramatic improvements in residential.
Dan service.
At the same time the investment in collaborative voice communication is also expected to continue at a robust rate as enterprises adapt to leverage a more mobile workforce and digitize all aspects of their business.
Traditional service providers are adapting their business model to embrace cloud technology modernize their infrastructure and to leverage public cloud platforms to accelerate new service introduction and lower costs.
We're really entering a new phase for the company.
We've completed the integration of ACI in Britain.
And I've done the hard work of building a new company.
We're now in the second phase and beginning to see clear evidence that our strategy is working and will be a significant transformation of rhythm.
We're in a great industry with a favorable competitive environment and Super excited about the future of the company.
In order to provide more detail on our technology and solutions will be hosting to virtual events on November 18th.
A series, we're calling ribbon spotlights.
We will focus on two specific topics that day, beginning with what we're calling the IP wave, how we envision the evolution of IP and optical networks and our solutions that are leading this network transformation.
Well then discuss the quickly growing trend for carriers to further leverage public cloud platforms, and our telco cloud solutions.
We'll continue the series with additional events in 2022, and we'll keep the investor community posted on the data some other details as we get closer to the events.
So now for guidance.
Our sales team is now in front of customers on a regular basis, which is a big benefit as we compete for new business.
Personally I have face to face customer meetings across Europe, the U K, India and North America over the next 45 days.
Our Q4's sales pipeline is very robust and we continue to have line of sight to significant growth in the quarter.
With potential to exceed our updated guidance range, depending on our end of year capital spend.
However, it has become more difficult to estimate the exact impact the global supply chain constraints will have on being able to fully meet demand.
We also expect continued elevated costs in our IP optical segment this quarter due to higher logistics and expedite fees, but still project gross margins for this business back above 40% in the fourth quarter.
With these factors in mind, we're broadening our normal guidance range on both revenue and earnings.
For the fourth quarter, our expectations are for revenue in a range of $240 million to $260 million.
Non-GAAP gross margins of 58% non.
Non-GAAP adjusted EBITDA of $45 million to $51 million.
Non-GAAP diluted earnings per share of 13 to 17.
Just to note on tax rates as we close on the end of the year, we're adjusting our non-GAAP tax rate assumptions for the fourth quarter to approximately 39%, reflecting our projected regional income mix.
This change results in a revised full year tax rate of about 31% versus our previous estimate of 27% affecting the non-GAAP EPS calculation.
Well this updated guidance will put us short of our $900 million goal for the year, we expect to get very close to the adjusted EBITDA and EPS targets, we established at the beginning of the year.
As we look into 2022, we have a growing number of tailwind if we begin to see the results of our significant 2021 customer wins and the benefit of a broader global base.
I expect that supply chain constraints will be an ongoing theme for us and others to manage but the fundamentals behind the business are very solid and I expect 2022 to be a strong growth here.
Operator that concludes our prepared remarks, and we can now take a few questions.
Yeah.
At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.
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One moment, please while we poll for questions.
Our first question is from Paul Silverstein with Cowen. Please proceed with your question.
Thanks, guys first off.
Bruce and I are going to happen.
A million of delayed shipments.
If you had recognized those in Q3.
Does it follow that the fourth quarter outlook would be nine and a half million less or.
This you know as one would think a ripple through that there's a.
Another $9 million or $10 million or some number.
Of revenue that's delayed it will be delayed from Q4.
Q1 for some of the reasons tied to logistics et cetera.
Yeah, Hey, Paul that's a good question.
I would say, it's a zero sum so if we shifted in Q3.
It would it would be a deduct from Q4, having said that as we look at the Q4 guidance. Obviously, we're trying to take into account any restrictions and whatnot that we see and tried to take that into account as we sit here today. So you know I.
I think we're going to continue to see a variety of issues and we're doing the best we can to make sure we estimate them as accurate as we can.
So it went through its situations.
Who said I appreciate the challenges with respect to visibility et cetera for you and all of your peers, but I want to keep you honest when you talk about third quarter would have been 9 million better but for.
I just want to make sure you're clearly seeing that missing.
Miss in the fourth quarter outlook would've been might not happen or even worse, but ford.
So let me move on and I don't mean to give you a hard time.
Yes, that's correct Paul.
Mick can you repeat the impacts from supply chain and I agree with them on a half million.
How much of a hit to margins for total company as well.
I don't know if you broke it out I apologize if I missed it but for IP optical and for cloud and edge, how much would book the revenue and the margin for both of those businesses.
Okay.
Yes, Paul So we noted that the impact to revenue was $95 million.
And it's about half and half related to each of the business segments in regards to the margin erosion.
That was a bigger impact on cost increases.
Logistic and transportation expedite costs and that was about 300 basis points.
The IP optical network side.
And was that with 300 basis points of total impact. So it was all in my opinion optical or was there also some clouds.
It was a little unplug niche all with the.
Obviously with the margins, where they are it's not as significant on the continent.
Got it.
And Nick on the with respect to normalized gross margin in IP optical I thought you all had been referencing a mid forty's too crowded modeled previously for that business longer than I would've thought you could do well.
Alright.
Can you just refresh my memory, what is the outlook for that business, nor if we normalize.
Normalized for the impact from supply chain, there's a steady state what are you expecting that business to run it.
Yeah. So.
We're estimating a low to mid forties.
So it could be anywhere from 40% to 45% depending on.
Mix and volume et cetera, and as Mick mentioned, the let's call. It 300 basis points impact of higher cost right now we estimate that continuing in the fourth quarter.
Which is why we're projecting.
Margins in that segment, you know right around 40%.
Alright.
Bruce do you think it can be a low to mid <unk>.
Much has moved forward as business normalized.
I think you'll see that happen quarter over quarter, Paul I think if you look over an extended period of time and do an average.
Probably in the 40% to 43% range, it'll just move around a little bit each quarter.
Got it alright, one more from me before I pass it along.
Bruce who need these impressive customer wins. So we used the names of the customers that are cited in telecom Italia et cetera.
It was a sense for the I assume the projects vary in nature, but you know there.
Of course.
You'd be coming D key optical supplier for metro or other build and then there's getting a discrete project in nursing, if it's too low.
But can you give us a sense for.
What are the nature of those projects across these customers in terms of Brexit.
In the past the nature of the projects.
Yeah, Yeah, it's a great question Paul So some of them are they are project based or more let's say enterprise W. D. M services. So you'll do one project at a time and you may have more than a quarter or less than a quarter. It can vary.
I think the real potential.
Potential here for US, though is as we get into the core portion of the transport network like we talked about with the Rogers opportunity that ends up being a more consistent multi year of business and really starts to build a stronger foundation for us like we have with our other tier one customers in Russia, and India and other areas.
And these are all for us pretty meaningful opportunities.
Digit millions annually and really start to strengthen the business sports.
Each opportunity you would thought that at least double digits annually. Some are no I wouldn't say that.
I would say somewhere probably less than that that tend to be more enterprise oriented, but the you know the larger ones that are in that magnitude.
Bruce can you give us I don't know if he wants to but can you give us.
In the aggregate those larger the incremental wins from the past quarter or two where those worth on an annual basis quarterly business.
Well you know.
In a general sense not to avoid the question, but obviously, it's sensitive information they contribute towards our goal of 10% plus growth on an annual basis. So that annual growth, 10% on 300 million plus as you know annually $330 million worth of growth.
As you an idea of what we expect out of kind of the aggregate and and hopefully more right. I mean, we're really obviously, putting a lot of effort into this space.
Got it alright.
Pass it on I may come back in.
Thank you Paul.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question is from Dave Kang with.
B Riley. Please proceed with your question.
Thank you good afternoon, I guess the first question is regarding mix.
Tax you said, 39% fourth quarter is that just for the fourth quarter or should we use that for next year as well.
Yes, certainly at this will be only for the fourth quarter. We've had some changes in our regional jurisdictional tax mix for.
For the full year, it will average out to be 31%, so effectively quarters, one through three at 27 and adjustment in fourth quarter, so that the full year as at 31%.
Yeah.
So how should we think about next year's tax rate back to 31% or.
I would say that.
Obviously, we would like to reduce it back to the 27% with some further improved.
Keeping it in that range would be about right.
Okay, and then I guess I can't figure out Opex for fourth quarter, but how should we think about opex fourth quarter.
And beyond.
Well you have seen that we have managed opex up fairly well, we had unusually low opex last quarter about $90 million that did have some onetime beneficial effects. This quarter, we were closer.
Closer to the mid nineties, we do expect the fourth quarter as usual to have a lot of variable compensation and other seasonal aspects that will put us closer to a $100 million, but our goal is to maintain our opex.
In that mid 90 range and certainly continued to drive efficiencies and some aspects in order to continue to drive R&D and our future growth areas.
David.
I'll just add a comment on that because some of the pieces.
Seasonal if you will right variable comp et cetera, but we are investing more as I mentioned on the call around R&D investment and go to market investment around IP optical.
If we win more of these customers.
And they all come with some roadmap commitments and things like that.
I think we'll continue to invest more we are really looking at this as a growth area for us in a great place to invest.
Got it and just a couple of questions regarding the supply chain situation. So.
How many ships are fairly tight or giving you problems.
Is it the onesies or Twosies, which one of your competitors talked about or is it more.
Broad based.
The biggest area I think where we see pressures around.
Routing silicon IP networking silicon, that's probably be the area. That's most challenging but we have a variety of smaller things as well really a handful of things. All it takes is obviously one component to cause an issue so whether it's a connector or a fan or a PCB what.
We're seeing and it really picked up in the third quarter is a tightness in a variety of different areas and so it puts a lot of focus on making sure. We're planning appropriately we're partnering closely with our manufacturing partners and.
And got a good visibility from our customers on the demand.
The comment that we.
We see pretty strong demand during the fourth quarter and part of the challenge is just making sure we can supply as much of it as we can.
Okay and my last question is on on that the chips.
My understanding is that some of these tips. The lead times are you know like a PD, one one and a half years.
One thing that might be a little bit drastic, but maybe you know.
One years, so and if prices are going up.
What would your gross margin be impacted when these higher chip.
Going to production like one year from now so like fourth quarter next year gross margin will be probably under incremental pressure because of higher chips.
Higher price chips Yep.
I do think we will see.
Cost of goods pressure.
We of course are attacking that on a daily basis with different programs across the company to continue to evolve the products and reduce costs and substitute less expensive parts all those types of things.
And really be able to try and manage that.
You've seen.
A number of our suppliers in the industry look at increasing prices and those sorts of things to also help offset the increased cost and I think you'll see more of that as the year's progressed here.
You're correct. If you go out and place an unplanned order today in some components you know you'll get a one year lead time on them and so having again good visibility good forecast and long lead time orders on key components, all those kind of regular things are.
Part of the job these days.
We've seen this cycle before the last week.
Supply demand balance issue was around memory and other components like that and it does level out it takes time to happen but.
It does come back into balance.
No, particularly around core 86 of course Silicon of course, the fab houses are oversubscribed. These days and it really starts at that fundamental level, but then drives risk.
Restrictions and cost increases back into the whole supply chain and what I do know is it levels out and it'll happen.
Trying to predict exactly when that happens it's almost a fool's errand, you really just need to get on it and kind of manage it.
Got it actually let me squeeze in one more on some of the Rod where companies have raised prices.
Do you have that kind of leverage too.
These prices on some of your products.
Yeah, I don't think of it so much as leverages its really whats the competitive balance and as we're out trying to win new business and positioning products. We're looking for ultimately for the best value for our customer lowest cost for the best value and that's actually something we're really good at the advanced tools, we have for designing the network.
<unk> allows us to drive to a really.
Lowest possible bill of material cost and part of as we're doing that pricing is looking at what are the target margins. We are trying to generate and so I do think there's some flexibility there will be more flexibility as more pressure increases around supply for sure.
Got it thank you.
Alright, Thanks, Dave.
Our next question is from Mike Latimore with Northland Capital. Please proceed with your question.
Okay.
Hi, This is the other day on behalf of Mike Latimore could.
Could you tell me how much did adopt end customers contribute to your overall revenue.
Yes, well look that up here for you. It's in the low 50 range, but we'll look it up here and just check it is about that the top 20 is usually around 60%.
I'll get that for you in just a minute.
Alright.
Yes, it was 47% which is almost exactly right 47%.
Alright got it.
Could you give me some color on how the situation has been India like do you guys see a bit of improvement in <unk> compared to the previous quarter or just a little more color on what's happening in India.
Our third quarter was I think slightly better than the second quarter. It was very very similar.
We saw our deployment rates kind of recover in the July timeframe.
Earlier in the second quarter.
And we do expect a stronger fourth quarter, certainly in India versus the third quarter, just not as strong as I thought maybe 45 days ago.
Interesting.
Changes over the last 30 days in India.
The department of Telecom there has provided some relief to the mobile carriers related to the adjusted gross revenue taxes that are owed over the next 10 years.
Basically pushed at.
The timing of some of those payments. So I think that's going to provide some relief to the overall industry, which is great.
The other comment I'll make is that one of our large customers Vodafone idea.
Pretty public knowledge that they've been working on trying to recapitalize a portion of the of the balance sheet for the company.
There has been kind of increased level of rumors around getting that done here part of it I think because of some of the you said.
But the government is providing.
That's an important element to our getting back to normal in the indie environment. That's one of our largest historical customers there in <unk>.
Getting them back into investing in the infrastructure is really key for growing our business in <unk> and.
Accelerating growth so overall company next year.
Yeah.
Alright, thank you.
Okay. Thanks very much.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back over to Brian.
Remarks.
Yes, great well, thanks, very much for everybody joining us today.
We're really looking forward to the ribbon spotlight events coming up next month and really highlighting some of the differentiation in the portfolio.
And Ah ribbon wins.
And so we're really excited about that.
As you've seen in our press release, we have a number of investor conferences over the next 45 days to look forward to connecting with everyone. Thanks very much.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Alright, Thanks Maria.
Yeah.
Maryann, Thanks very helpful.
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