Q2 2022 Aviat Networks Inc Earnings Call

February 2, 2022

[music].

Speaker 1: Please stand by.

Please standby.

Good afternoon, welcome to the ABM networks second quarter fiscal 2022 earnings call.

Speaker 1: Welcome to the Aviat Network's second quarter fiscal 2022 earnings call.

At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note. This conference is being recorded.

Speaker 1: The question and answer session will follow the formal presentation. Please note this conference is being recorded.

I will now turn the conference over to your host Mr. Keith San Iran, Vice President of Global Finance and Investor Relations.

Speaker 1: Vaneron, Vice President of Global Finance and Investment

Thank you you may begin.

Speaker 2: Thank you and welcome to Abia Network's second quarter, fiscal 2022 results conference call and webcast.

Thank you and welcome to <unk> networks second quarter fiscal 2022 results conference call and webcast you can find our Form 10-Q press release and updated investor presentation in the IR section of our website at Www Dot <unk> networks.

Speaker 2: You can find our Form 10-2 press release and updated investor presentation in the IR section of our website at www.aviatnetworks.com, along with a replay of today's call in approximately two hours. With me today are Pete Smith, Aviat's President and CEO , who will begin with opening remarks on the company's fiscal second quarter.

Dot com along with a replay of today's call in approximately two hours with.

With me today are Pete Smith President.

President and CEO , who will begin with opening remarks on the Companys fiscal second quarter, followed by David Gray, Our CFO , who will review the financial results for the quarter and first half of fiscal 2022. Pete will then provide closing remarks on <unk> strategy and outlook followed by Q&A as a reminder, during today's call and web.

Speaker 2: followed by David Gray, our CFO , who review the financial results for the quarter at first half of fiscal 2022.

Speaker 2: People then provide clothing or marks on Aviot's strategy and outlook followed by Q&A.

Speaker 2: As a reminder, during today's call and webcast, management may make forward-looking statements regarding Aviat's business, including, but not limited to, statements relating to financial protection.

Cash management May make forward looking statements regarding <unk> business, including but not limited to statements relating to financial projections business drivers new products and expansions the impact of COVID-19, and economic activity in different regions. These and other forward looking statements reflect the company's opinions only as.

Speaker 2: business drivers, new products and expansions, the impact of COVID-19, and economic activity in different regions.

Speaker 2: These and other forward-looking statements reflect the company's opinions only as of the date of this call and webcast and involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements.

As of the date of this call and webcast and involve assumptions risks and uncertainties that could cause actual results to differ materially from those statements additional information on factors that could cause actual results to differ materially from the statements made on this call can be found in our annual report on Form 10-K .

Speaker 2: Additional information on factors that could cause actual results to differ material from the statements made on this call can be found in our annual report on Form 10-K filed with the SEC on August 25, 2021.

<unk> filed with the SEC on August 25 2021 the.

Speaker 2: The company undertakes no obligation to revise or make public any revision of these forward-looking statements in light of new information or future events.

The company undertakes no obligation to revise or make public any revision of these forward looking statements in light of new information or future events.

Speaker 2: Additionally, during today's call and webcast, management will reference both GAAP and non-GAAP financial measures. Please refer to our press release which is available in the IR section of our website at www.aviatnetworks.com and financial tables therein which include a GAAP to non-GAAP reconciliation and other supplemental financial information. At this time, I'd like to turn the call over to Aviat's President and CEO , Pete Smith.

Additionally, during today's call and webcast management will reference both GAAP and non-GAAP financial measures. Please refer to our press release, which is available in the IR section of our website at Www Dot Eliott networks Dot com and financial tables therein, which include a GAAP to non-GAAP reconciliation and other supplemental.

Financial information.

At this time I'd like to turn the call over to <unk>, President and CEO Pete Smith.

Speaker 3: Thanks Keith and good afternoon everyone. Thanks for joining us to review a successful quarter. The company continued to execute on our key long term focus areas of growth, margin expansion and meaningful bottom line improvement.

Thanks, Keith and good afternoon, everyone. Thanks for joining us to review a successful quarter.

Companies continue to execute on our key long term focus areas of growth margin expansion and meaningful bottom line improvement. Despite continued supply chain and inflationary challenges. The <unk> team commitment resulted in revenue of $77 9 million the highest quarterly.

Speaker 3: Despite continued supply chain and inflationary challenge.

Speaker 3: The Aviado team commitment resulted in revenue of $77.9 million, the highest quarterly revenue since Q1 of fiscal year 2016, driven by international growth of 25% versus last year. EBITDA margins of 13% continued Rob Solid balance sheet and liquidity position. Increased pace of share by that.

Revenue since Q1 of fiscal year 2016, driven by international growth of 25% versus last year EBITDA margins of 13% continued rock solid balance sheet and liquidity position increased pace of share buybacks.

Speaker 3: These results would not have been possible without the tireless dedication and execution of our operations.

These results would not have been possible without the tireless dedication and execution of our operations team engineering team and supplier partners and an incredibly challenging environment because supply chain has dominated the conversation over the past 12 plus months, let's address the environment from <unk>.

Speaker 3: engineering team and supplier partners in an incredibly challenging environment. Because supply chain has dominated the conversation over the past 12 plus months, let's address the environment from Aviat's perspective.

<unk> perspective.

Speaker 3: We experienced fewer supply interruptions, but we still experienced interruptions. Leigh times did not improve, but fortunately, there were no high push outs. This is a sign of stabilization. The semiconductor allocation environment remains.

We experienced fewer supply interruptions, but we still experienced interruptions lead times did not improve but fortunately there were no push outs this as a sign of stabilization.

The semiconductor allocation environment remains.

Speaker 3: We have invested to design out the most problematic supplier.

We have invested to design out the most problematic suppliers, we remain subject to the risk of a supplier push out in <unk> late in the quarter. The most significant question when does the supply environment kept better this is difficult to predict but we feel that the environment will moderate.

Speaker 3: We remain subject to the risk of a supplier push-out and decommits late in the quarter. The most significant question, when does the supply environment get better? This is difficult to predict, but we feel that the environment will moderate in the April to June timeframe, and most, hopefully all, of the supply chain problems are behind us at the end of December .

In the April to June timeframe, and most hopefully all of the supply chain problems are behind us at the end of December .

Speaker 3: Now, let's move to the key highlights of the second quarter, which include our multi-band XD launch, high availability routing software factory acceptance test success, strong and demand environment linked to ARDOF, the infrastructure bill, and spectrum options. theJA growth,

Now, let's move to the key highlights of the second quarter, which include our multi band XD launch high availability routing software factory acceptance tests success strong and demand environment linked to art off the infrastructure Bill and spectrum auctions.

EMEA growth share buybacks.

Speaker 3: In the quarter, Aviat released a new enhancement to our multiband product line. Multiband XD, or extended distance, increases the reach of 10 gigabits per second links over distances up to 20 kilometers to support 5G and rural broadband applications.

In the quarter RBR released a new enhancement to our multi band product line multi band XD or extended distance the increases the reach of 10 Gigabits per second links over distances up to 20 kilometers to support five G and rural broadband.

Applications to.

Speaker 3: To achieve comparable performance, competitive multi-band solutions require up to four times the hardware, making them costly and impractical for tower deployments, leaving high cost fiber as the only option. Now, with multi-band XT, operators can significantly lower their total cost of ownership by up to 90% when compared to five raw alternatives.

To achieve comparable performance competitive multi band solutions require up to four times, the hardware, making them costly and impractical for tower deployments, leaving high cost fiber as the only option now with multi band XD operators can significantly lower their total cost of one.

Her shop by up to 90% when compared to fiber alternatives simply this innovation makes obviously more competitive versus fiber.

Speaker 3: Simply, this innovation makes Aviat more competitive versus Fiverr.

Speaker 3: In the previous quarter, Aviado announced release of our new high availability routing software to improve the reliability of critical networks of all kinds. This quarter, we passed a significant milestone with the successful completion of factory acceptance tests or FAT with a large U.S. state cost.

In the previous quarter, <unk> announced release of our new high availability routing software to improve the reliability of critical networks of all cards. This quarter, we passed a significant milestone with the successful completion of factory acceptance test or fat with <unk>.

Large USD customer, we replicated the entire state network and our facility in Austin, Texas and subject to the system to real world stress and performance testing the software performed flawlessly.

Speaker 3: We replicated the entire state network in our facility in Austin, Texas and subjected the system to real-world stress and performance testing. The software performed while it...

Speaker 3: Aviat is one of only a few vendors offering high availability routing, and we have a rapidly growing pipeline of deals for this new software. This opens an additional $300 million of market opportunity for Aviat.

<unk> is one of only a few vendors offering high availability routing and we have a rapidly growing pipeline of deals for this new software. This opens an additional $300 million of market opportunity for avia.

Speaker 3: The environment for Aviyantso offering is continued to improve.

The environment for Avianca offerings continue to improve.

Speaker 3: Let's touch on the rural digital opportunity fund, the infrastructure bill, and the recent spectrum auction.

Let's touch on the rural digital opportunity fund the infrastructure Bill and the recent spectrum auction.

Speaker 3: We remain well positioned for the rollout of the Royal Digital Opportunity Fund or ARDOF. As we track the ARDOF winners, Aviyat customers are earmarks for more than 3 billion outfunding. In the quarter we announced a new customer, Whisper Internet in the space.

We remain well positioned for the rollout of the rural digital opportunity fund or our dos as we track the Argos winters.

<unk> customers are earmarked for more than $3 billion funding in the quarter, we announced a new customer whispered internet in this space.

Speaker 3: In November , 20, 21, the U.S. passed the bipartisan infrastructure legislation, which appropriates $65 billion for broadband infrastructure deployment. As a U.S. company, Aviyat is well positioned to participate in serving the 42 million Americans, or will broadband coverage or will lack contemporary bandwidth.

In November 2021, the U S passed the bipartisan infrastructure legislation, which appropriate 65 billion for broadband infrastructure deployment as a U S company <unk> is well positioned to participate in serving the 42 million Americans are will draw.

<unk> band coverage, who lack contemporary bandwidth.

Speaker 3: The FCC recently completed a $22 billion option known as option 110 for the 3.45 to 3.55 gigahertz spectrum. The second biggest winner was Dish, our previously announced customer. As this spectrum is utilized, Aviyat's back-all business will be positively impacted.

The FCC recently completed a $22 billion auction known as auction 110 for the 345 to 355 gigahertz spectrum. The second biggest winter was dish, our previously announced customer.

The spectrum is utilized rvs backhaul business will be positively impacted.

Speaker 3: Our international growth of 25% was driven by our Europe and Africa regions. In previous earnings calls, we discussed improvements in the team and leadership. We have our first proof point internationally where selling on value and obvious differentiation works.

Our international growth of 25% was driven by our Europe and Africa regions in previous earnings calls, we discussed improvements in the team and leadership, we have our first proof point internationally, we're selling on value and ambiance differentiation works.

Speaker 3: Some highlights include a win with an important Southeastern European mobile operator and momentum with a UK private network customer.

Some highlights include a win with an important southeastern European mobile operator, and momentum with a UK private network customer.

Speaker 3: We see the preparations for several 5G deployments in Africa, and we believe our portfolio has the best value proposition on the market for 5G in Africa. This preparation work suggests the future development of a favorable 5G demand environment.

We see their preparations for several <unk> deployments in Africa, and we believe our portfolio has the best value proposition on the market for five G and Africa. This preparation work suggest that future development of a favorable <unk> demand environment.

Speaker 3: We accelerated the pace of share by backstory Q2, repurchasing almost 2 million of Aviado's stock and exhausting the previous board authorization.

We accelerated the pace of share buybacks during Q2, repurchasing almost $2 million of Avia <unk> stock and exhausting the previous board authorization.

Speaker 3: As announced, the board authorized a further $10 million dollar share repurchase plan and we anticipate executing on the new plan opportunistically in the subsequent quarter.

As announced the board authorized a further $10 million share repurchase plan and we anticipate executing on the new plan opportunistically in the subsequent quarters.

Speaker 3: and for turn in the call over to David, let me provide a couple of additional observations and insights. First, this was a very good quarter and first half of our fiscal year. We remain focused and continue to execute and those collective efforts are reflected in our financial and operational results.

Before turning the call over to David Let me provide a couple of additional observations and insights first this was a very good quarter and first half of our fiscal year. We remained focused and continued to execute in those collective efforts are reflected in our financial and operational results.

<unk>.

Speaker 3: We've continued to demonstrate our ability to grow and to take share of demand. Looking forward, we see three significant drivers, 5G, private networks, and role-broad debt, and believe we are well-positioned to capture significant opportunities with our differentiated products, software and services offerings. With that, let me turn the call over to David to review our financials before coming back for some final comments, David.

We've continued to demonstrate our ability to grow and to take share of demand looking forward. We see three significant drivers <unk> private networks and rural broadband and believe we are well positioned to capture significant opportunities with our differentiated products software and services offerings.

With that let me turn the call over to David to review, our financials before coming back for some final comments David.

Speaker 2: Thank you, Pete, and good afternoon, everyone. During my remarks today, I will review some of the key second quarter and first half fiscal 2022 financial highlights. Noting our detailed financials can be found in our 10Q and press release, both of which were filed this afternoon.

Thank you, Dave and good afternoon, everyone. During my remarks today I will review some of the key second quarter and first half fiscal 2022 financial highlights, noting our detailed financials can be found in our 10-Q and press release, both of which were filed this afternoon.

Speaker 2: As a reminder, all comparisons discussed today are between the second quarter of fiscal 2022 and the second quarter of fiscal 2021 and last noted other one.

As a reminder, all comparisons discussed today are between the second quarter of fiscal 2022 in the second quarter of fiscal 2021 unless noted otherwise.

Speaker 2: For the second quarter, we reported total revenues of 77.9 million as compared to 70.5 million for the same period last year. An increase of 7.4 million were 10.4 percent driven by international sales growth and continued strength in U.S. private network.

For the second quarter, we reported total revenues of $77 9 million as compared to $70 5 million for the same period last year, an increase of $7 4 million or 10, 4% driven by international sales growth and continued strength in U S private networks.

Speaker 4: The quencially revenue increased by 4.7 million or 6.4%.

<unk> revenue increased by $4 7 million or six 4%.

Speaker 4: As Pete mentioned, our total revenue for the second quarter was the highest since our first quarter of fiscal 2016.

As Pete mentioned, our total revenue for the second quarter was the highest since our first quarter of fiscal 2016.

Speaker 4: North America, which comprised 66% of total revenue for the second quarter, was $51.0 million, an increase of $1.9 million, or 3.8% from the same period last year, driven primarily by our private networks business.

North America, which comprised 66% of total revenue for the second quarter was 51.0 million an increase of $1 9 million or three 8% in the same period last year.

Driven primarily by our private networks business.

Speaker 4: International revenue was 26.8 million for the quarter and increased the 5.4 million or 25.5% from the same period last year.

International revenue was $26 8 million for the quarter, an increase of $5 4 million or 25 5 billion from the same period last year.

Speaker 4: We are again pleased that our backlog continues to remain above $200 million, even after recognizing our highest quarterly revenues in over six years, because of our innovative and differentiated product portfolio.

We are again pleased that our backlog continues to remain above $200 million, even after recognizing our highest quarterly revenues in over six years because of our innovative and differentiated product portfolio.

Speaker 4: Those margins for the quarter were 36.2% and 36.3% on a gap and non-gap basis has compared to 38.2% and 38.3% in the prior year.

Gross margins for the quarter was 36, 2% and 36, 3% on a GAAP and non-GAAP basis, as compared to 38, 2% and 38, 3% in the prior year.

Speaker 4: Gross margins remained under pressure from inflationary headwinds and expedite costs related to supply chain disruptions, but improved sequentially from Q1 by 60 basis points.

Gross margins remained under pressure from inflationary headwinds and expedite costs related to supply chain disruptions, but improved sequentially from Q1 by 60 basis points. This is consistent with our prior earnings commentary, where we noted that price actions to offset inflation with gained momentum as the year progressed.

Speaker 4: This is consistent with our prior earnings commentary where we noted that price actions to off that inflation would gain momentum as the year progressed.

Speaker 4: Second quarter gap operate Bences were 19.9 million and second quarter non-gab operating expenses, which exclude the impact of restructuring charges and share-based compensation were 19.2 million.

Second quarter GAAP operating lenses were $19 9 million in second quarter, non-GAAP operating expenses, which exclude the impact of restructuring charges and share based compensation were $19 2 million.

Speaker 4: Gap and non-Gap OptX were 0.8 and 0.9 million higher than the prior year respectively.

GAAP and non-GAAP Opex were zero, <unk>, eight and <unk> 9 million higher than the prior year, respectively. The increase was driven by higher R&D costs incurred to complete the design out of problematic vendors as well as higher commissions in line with strong orders and sales.

Speaker 4: The increase was driven by higher R&D costs incurred to complete the design out of problematic vendors as well as higher commissions in line with strong orders and sales.

Speaker 4: Second quarter gap net income was 5.7 million compared to 6.6 million last year. The client was wholly attributable to a 1.8 million higher gap tax provision in the current quarter, which were from the release of the U.S. deferred tax asset valuation allowance as reported in our fiscal Q3 2021 result.

Second quarter GAAP net income was $5 7 million compared to $6 $6 million last year.

Klein was wholly attributable to a $1 8 million higher GAAP tax provision in the current quarter, which went from the release of the U S deferred tax asset valuation allowance as reported in our fiscal Q3 2021 results.

Speaker 4: As a reminder, the increase in tax provision year over year will not increase our cash taxes paid. The company has over $500 million of NOLs that will continue to generate shareholder value via minimal cash tax payments for the foreseeable future.

As a reminder, the increase in tax provision year over year will not increase our cash taxes paid the company has over 500 million of Nols that will continue to generate shareholder value via minimal cash tax payments for the foreseeable future.

Speaker 4: Second-for-the-non-gap net income, which excludes restructuring charges, share-based comp, and non-cash tax provision was 8.5 million compared to 8.4 million for the same period last year. Second-for-the-non-gap EPS came in at 71 cents per share, compared to 74 cents per share for the same period last year.

Second quarter, non-GAAP , net income, which excludes restructuring charges and share based comp and noncash tax provision was $8 5 million compared to $8 4 million for the same period last year.

Second quarter non-GAAP EPS came in at <unk> 71 per share compared to <unk> 74 per share for the same period last year.

Speaker 4: Adjusted EBITDA for the second quarter was $10.1 million, which was flat to the prior year. Adjusted EBITDA margins were 13.1% for the quarter.

Adjusted EBITDA for the second quarter was $10 $1 million, which was flat to the prior year adjusted EBITDA margins were 13, 1% for the quarter moves.

Moving on to the balance sheet.

Speaker 4: Our cash and cash booklets at the end of the second quarter were 42.3 million. We continue to have no debt.

Our cash and cash equivalents at the end of the second quarter were $42 3 million, we continue to have no debt.

Speaker 4: During Q2, we continued to increase investment in working capital to facilitate higher sales growth and protect ourselves from supply chain disrupting.

During Q2, we continued to increase investment in working capital to facilitate higher sales growth and protect ourselves from supply chain disruptions are strong balance sheet permits us to amass component supply and invest in the international growth projects.

Speaker 4: Our strong balance sheet permits us to amass components applied and invest in international growth projects.

Speaker 4: As a result, a council receivable and unbuilder receivables grew by 12.9 million in the quarter. Additionally, higher international growth typically has longer payment terms than North American costs.

As a result of accounts receivable and Unbilled receivables grew by $12 9 million in the quarter. Additionally, higher international growth typically has longer payment terms than north American customers.

Speaker 4: It also grew by 2.5 million in the quarter as we added more supply chain buffer stuff.

There is also grew by $2 5 million in the quarter as we added more supply chain buffer stock.

Speaker 4: AR and inventory growth was only partially offset by current liabilities which grew by at 4.0 million in the quarter.

Our inventory growth was only partially offset.

By current liabilities, which grew by $4.01 million in the quarter.

Speaker 4: As a result of these workable increases and $2 million of stock buybacks in the quarter, net cash decreased sequentially from the first quarter by 5.0 million and by 0.7 million from Q2 the prior year. We expect this work with capital dynamic to moderate in subsequent quarters, returning us to strong positive cash generation. Regardless, our balance sheet remains very solid, leaving us well positioned to execute our long-term plan.

As a result of these workable increases and $2 million of stock buybacks in the quarter net cash decrease sequentially from the first quarter by $5 1 million and by 0.7 million from Q2 of the prior year.

We expect this working capital dynamic do moderate in subsequent quarters, returning us to strong positive cash generation, regardless, our balance sheet remains very solid, leaving us well positioned to execute our long term plans.

Speaker 4: With that, I will turn it back to Pete for some final comment. Pete?

With that I will turn it back to Pete for some final comments.

Speaker 3: Thanks David, just a few additional comments before opening up for Q&A. I'm extremely proud of the entire Avia team for their significant contributions to our results for the second quarter of fiscal year 2022.

Thanks, David just a few additional comments before opening up for Q&A I'm extremely proud of the entire avianca team for their significant contributions to our results for the second quarter of fiscal year 2022.

Speaker 3: We continue to ask you well given the constrained supply situation and inflationary environment. Despite these challenges, we've got our first half performance. We are raising our full-year guidance as follows.

We continue to execute well given the constrained supply situation and inflationary environment. Despite these challenges based on our first half performance. We are raising our full year guidance as follows revenue for fiscal year 2022 to be in the range of $290 million to $298 million.

Speaker 3: Revenue for fiscal year 2022 to be in the range of $290 to $298 million and adjusted EBITDA to be in the range of $37 to $39 million. Providing our customers with the most advanced, reliable, and best total cost of ownership system.

And adjusted EBITDA to be in the range of $37 million to $39 million, providing our customers with the most advanced reliable and best total cost of ownership systems for mission critical work and our shareholders with profitable growth remains our goal with that operator open it up for questions.

Speaker 3: for mission-critical work and our shareholders with profitable growth remains our goal. Would that operator put it up for questions?

<unk>.

Thank you.

Wed like to signal with questions. Please press star.

One on your Touchtone telephone easier joined today use a speaker phone. Please make sure. Your mute function is turned off July youre signals a return.

Speaker 1: If you're a joyous today, can they speak or phone? Please make sure your mute function is turned off to light or signal to recharge equipment. Again, that is star one, if you would...

Again that is star one if you would like to signal and we'll pause for just a moment.

Speaker 5: I know that. And it's fine.

Hello.

Thanks for that.

Yes.

And our first question will come from Scott Searle with Roth capital.

Speaker 6: Good afternoon, thanks for taking my questions. Nice job on the quarter, a very difficult operating environment.

Hey, good afternoon, Thanks for taking my questions nice job on the quarter very difficult operating environment.

Speaker 6: he may be just to dive in quickly on on the guidance uh... for the fiscal year uh... it looks like it would probably imply that you're down a little bit it's going to be uh... into the march quarter typical seasonality is that how we should be thinking of it uh... above consensus expectations but down a little bit squenchley from uh... from the summer result

Let me maybe just to dive in quickly on the guidance.

For the fiscal year, it looks like it would probably imply that youre down a little bit and sequentially into the March quarter typical seasonality is that how we should be thinking of.

Above consensus expectations, but down a little bit sequentially from the December results.

Speaker 3: Yeah, so, you know, we've talked in the past about seasonality. Some years there are seasonality and some not being a project based business. And, you know, what drives the seasonality when we have it is year-end buying from, principally from our government customers. And we certainly had that this year.

Yes.

We've talked in the past about seasonality some years there are.

Seasonality and some non GMO project based business.

No.

What drives the seasonality when we.

Year end borrowings principally from our government customers.

We certainly have that this year.

Speaker 6: Okay. And maybe to dive in on the software component, I think you indicated about a $300 billion TAM on that front. I wonder if you could expand on that a little bit in terms of software contribution, maybe near-term, and how you start to penetrate that opportunity.

Okay.

Maybe to dive in on the software component I think.

You indicated about a $300 billion Tam on that front I wonder if you could expand on that a little bit in terms of software contribution maybe near term and how you start to penetrate that opportunity.

Speaker 3: So that's around our routing, right? Where we have a high availability routing software for a state network and that project went well. We cited that that's a $300 million.

Thanks, Doug.

<unk>.

Around.

Our routing where we hired availability routing.

Software.

The state network.

The project went well we cited the $300 million.

Speaker 7: And, you know, what we'll be selling when we have those wins, we will have

Yeah.

Tim.

We will be selling when we have those wins we will.

Speaker 7: you know, microwave radio, router, and the embedded software. And now that we've proven ourselves, our funnel is starting to grow. So that when we sell that embedded, that's the routing software, that'll be as...

Microwave radio a router.

Embedded software.

We've proven ourselves our funnel is starting.

To grow so that when we sell that are embedded.

So.

Routing software that will be.

Speaker 7: embedded software with respect to our overall software we We're reluctant to break out embedded software as a standalone because we can always sell it

Software with respect to overall.

Software.

Reluctant to break.

Embed itself.

<unk> alone because we can always sell it.

Speaker 7: in conjunction with with hardware and then just to keep going on this

In conjunction.

With hardware.

Just to keep going on this.

Speaker 7: We do have our FAST, which is a standalone software, but it's helped our margins over the past couple of years, but it's not material enough to break out.

We do have a size, which is the standalone software that has helped our margins.

Over the past couple of years, but it's.

Material enough to breakout.

Great.

Speaker 6: perfect and and maybe I could jump in on the art off front It sounds like some of these art off deployments are starting to get underway. I think to date you've seen very little with any contribution I think you articulated a three billion dollar opportunity with existing customers

Perfect.

And maybe if I could jump in on the <unk> upfront.

It sounds like some of these <unk> deployments are starting to get underway I think to date you have seen very little if any contribution.

Thank you articulated a $3 billion opportunity with existing customers. How do you expect that to flow in and then if you could as well the infrastructure Bill it seems like it's coming behind it.

Speaker 6: How do you expect that to flow in? And then if you could as well, the infrastructure bill seems like it's coming behind it. There's some politics probably in terms of the allocations and timelines there.

Obviously, there's some politics, probably in terms of the allocations and timelines there, but theres been a big push in terms of American made and you guys certainly fit that bill. So I guess, how does <unk> kind of flow into the current calendar year end, where do we start to see the benefits from the infrastructure Bill is starting to kick in.

Speaker 6: but there's been a big push in terms of American maiden, you guys certainly fit that bill. So I guess how does Ardoff kind of flow into the current calendar year and where do we start to see the benefits from the infrastructure bill starting?

Speaker 7: Yeah, so we think that we're not aware of any RDOF spending with Abiyat yet, so it's all yet to come. So that's upside for the business. And our best estimate of when we can expect to see an RDOF impact is in the back half of this calendar.

So we keep.

So we are not aware of any ahdab spending.

With Avianca, yeah, so its all yet to come so that's.

Upside through the through the business.

Our best estimate of when we can expect to see monarda logos.

In the back half of this calendar year.

Speaker 7: year. So, so it's in front of us, all of it, all of it. And then the building infrastructure fund or for the policy wonks, HR 368 for the

So so that's in front of US all of it all of it and then you build.

Building infrastructure fund or.

The policy once <unk>.

It needs work.

Speaker 7: There's four steps for implementation. First, the FCC needs to update their maps.

There is of course stubs for implementation first dfc he needs to update their maps.

Speaker 7: We think that's in the summertime of this calendar year. Then the Commerce Department is...

In the summertime of this calendar year.

The Commerce Department.

Speaker 7: is creating a process for states to apply and that that application from what's been published is May 2022. Then the states will develop their plan for permission, I mean for submission, and then they'll be reviewed and approved by the Commerce Department. And we think that that's, you know, the end of 22, the beginning of 2023 for that funding to make an impact.

This is creating a process for states to apply.

Application.

From what's been published is May 2022.

<unk> developed a plan for permission.

For submission and then there'll be reviewed and approved by the Commerce Department.

Understood.

<unk>.

The end of 'twenty two to beginning of 2023.

To make an impact.

Speaker 6: great perfect and lastly if i could international had a great water you up twenty five percent year of year it seems like looking at it uh... geographically latin america and uh... uh... middle east and africa did well is that you benefiting from from while we care out or while we being less visible and then on the european front big opportunities there i think in terms of what you're certain to win hasn't showed up in the numbers yet when do we expect Europe to start to kick it

Great Perfect and lastly, if I could international had a great quarter, you're up 25% year over year. It seems like looking at it geographically Latin America and.

Middle East and Africa did well.

That you're benefiting from from while we tear out or Huawei being less visible and then on the European front big opportunities. There I think in terms of what you're starting to win Hasnt shown up in the numbers yet when do we expect Europe to start to kick in.

Speaker 7: So, you know, when we report our segments, Europe is up driven principally by the private network in the UK. And secondly, we did have some good growth in the Europe region driven by Huawei.

So.

When we report our segments Europe , Europe is driven principally.

But the private network in the UK.

Yes.

Secondly, we did have some.

Some good growth in the Europe region, driven by Huawei.

Speaker 7: Shergaine, that was the southeastern Europe network operator. And then thirdly, on Africa, we are seeing some Shergaine from Huawei. And what we're finding is that

Sure gain that was the southeastern Europe .

Network operator.

Thirdly.

On Africa, we.

We are seeing some.

Share gains from from Huawei, and what we're finding is that.

Speaker 7: 5G, a lot of our business in Africa.

Slide <unk>.

Out of our business.

Speaker 7: This quarter was around 5G deployment, so getting the site's crap and...

This quarter was around five key deployment, so getting getting the sites.

Speaker 7: getting demos done. So we think that that's going to bode well for the Africa region going forward.

Getting demos done so we think that that's going to bode well for the Africa region going forward.

Speaker 5: So, great, thank you. Thank you. Thanks, Scott. And our next question.

So great great great.

Thanks Scott.

And our next question.

Thank you. Our next question will come from Dave King with Us Riley.

Speaker 8: Thank you. Good afternoon. I guess my first question is I believe you said regarding the supply chain situation that it should start to ease post June . So how should we think about gross margin in calendar second half? Does it go back to like you know 38% or so? Can you just provide some more color? What what to expect?

Thank you good afternoon, I guess my first question is.

<unk> said regarding the supply chain situation.

You should start to ease post June so how should we think about gross margin.

In calendar second half does it go back to like 38% or so can you just.

Provide some more color.

You can expect.

Speaker 4: I'll recall that on that by saying yes, you know, we're still on track with what we said previously as far as our pricing actions. Being able to fully offset the cost increases that we've been seeing by our Q4 of this year. And looking out at that quarter and beyond, you know, we.

Yeah.

Hey, Dave.

Comment on that by saying, yes, we're still on track with what we said previously as far as our pricing actions.

Being able to fully offset.

The cost increases that we've been seeing by on Q4.

This year.

And looking out at that quarter and beyond.

We.

Speaker 4: still expect the overall inflationary impact to be somewhat dilutionary because even though our price actions will offset dollar for dollar, you're also, you know, increasing the denominator while...

We still expect the overall inflationary impact to be similar to <unk>, because even though our price actions will offset dollar for dollar.

We're also increasing the denominator of well holding the numerator steady so that will have some impact, but we do expect.

Speaker 4: holding the numerator spedig. So that will have some impact, but we do expect as the momentum continues to unfold here that it will be able to hold on to those pricing gains and start seeing some better accretion on the gross market line.

As the momentum continues.

Bold here that it will we'll be able to hold onto those pricing gains and start seeing some some better accretion on the gross margin line.

Speaker 7: It gave to just add on that, you know, we're, you know, it'll be a little wild before we give guidance for

Dave just to add on the.

No.

It'll be a little while before we give guidance for.

Speaker 7: fiscal year 23 and the other balance, but we'll need to balance is how much traction we have on our software, on our, you know, on our innovative new products versus the international growth. So, but, you know, Dave just said one important thing is that we still maintain that we're going to get back to, um,

Fiscal year 'twenty three.

The other bell will need to balance is how much drug so we have on our.

On our software on our on our innovative new products versus the international growth. So.

But.

Dave just one important thing is that we still maintain that were going to get.

<unk>.

Speaker 7: to parity from cost price in our able to June timeframe. And then the, so then we're back to where we were before this environment took hold. And then it'll be our margin improvements will be predicated on mix and capturing more software and more innovation.

Two priority from cost price.

<unk>.

Through June .

Frame and then.

<unk>.

So then we're back to where we were before.

<unk> took hold and then it will be.

Margin improvements will be predicated on on mix.

Capturing more software more innovation.

Speaker 8: got it. And then my second question is on you talked about having various trial number of trials, I'll ask sure that you expect those will go into production this year. Can you just provide or give us an update or some data points exact how many trials you had and how many you expected to go into production this year?

Got it and then my second question is on you talked about.

Various trials a number of trials.

I assure that you expect.

Those will go into production. This year can you just provide us like give us an update or some data points exact how many calls you had and how many you expect at some point the production this year.

Speaker 9: Vinci pronissimIL snakes, CA

Yes.

So.

Speaker 7: Well, I'm struggling with a little bit now with what I meant by the trials, but let me give you the one that I'm ready to prepare. We talked a lot about multi-band RxD, our new product we have. That's opened up with another 50 million of PAM versus fiber where two trials would lead customers on the high availability software. We...

Well im struggling with a little bit.

What I meant by the trials, but let me give you the one that I'm ready to.

We've talked a lot about multi band.

<unk>.

Our new products, we have.

That's opened up another $50 million of Tam versus fiber.

Two trials would lead customers on the high availability.

Software we.

Speaker 7: You know, we've passed the FAT with the state network customer and we've sold that to maybe a half a dozen other customers. And...

No.

<unk>.

With this customer in a week.

We sold two.

Maybe a half a dozen.

Are there customers.

Speaker 7: The pipeline on the high availability routing software, we have another five or 10 customers behind there. So when we think about our pipeline, we kind of parse it out by the innovative products, and I think to be as responsive as possible to your question on the multi-band XB, we have two. We have more customers on the high availability routing software, and we have about a half a dozen that are cute up for...

The pipeline on.

On the high availability routing software, we have another five or 10 customers.

So when we think about our pipeline, we kind of parse it out by the key innovative products that I think.

To be as responsive as possible to your question on the multi band XD, we are too.

More customers on the.

Our availability routing software and we have about a half a dozen that are.

Queued up for.

Speaker 9: ..for trials."

Sure tore trials.

Speaker 8: And my last question is on OPEX, it was approximately $1 million sequentially to $30 million or excuse me, S-GNA. How should we think about OPEX going forward?

Got it and my last question is on the Opex It was up.

From day one.

Julien.

So that $30 million or.

Excuse me up SG&A.

How should we think about.

Opex going forward.

Speaker 4: Well, I think it's safe to say that we believe that our Q2 was probably the high water mark for OPEX in this fiscal year. Some of those extra expenses that were noted in the earlier comments should not recur, so they should moderate somewhat in the back at.

Well I think it's safe to say that we believe that our Q2 is probably the high watermark for Opex.

This fiscal year.

Some of those.

Extra expenses that.

Were noted.

Earlier comments should.

You should not recur so they should moderate somewhat in the back half.

Speaker 10: you know, that will also be balanced against some modest humanity that typically exists in our outfits, but it should be fall back a little bit and be more in line with what we've seen in previous years. God, thank you. Thank you, and our

That will also be balanced against.

Some modest seasonality that.

Typically exists in our Opex, but.

It should be.

Paul back a little bit.

Be more in line with what we've seen in previous years.

Got it thank you.

Thank you and our next question will come from.

Sandwich with Northland capital markets.

Good afternoon.

Hi, Dave.

Hey, How's it going.

Speaker 11: trying to think about how to frame this question. I'll just start with a gross margin approach and mix US versus international.

I'm trying to think about how to frame. This question and I'll just I'll start.

Kind of what the gross margin approach.

And.

Mix U S versus international is typically.

An important factor and so I want to think about that.

Short term and long term.

In the quarter you just reported I think you were able to increase gross margins and what you said 60 bps. Despite a much higher international mix.

Question, one how did you do that and.

David I Wonder if you can specifically frame the supply impact on that and whether that's a couple of hundred basis points or what have you.

Speaker 11: And then longer term, a lot of what you're talking about opportunity.

And then longer term you know a lot of them.

What you are talking about opportunity wise appears pretty U S focused right.

Great art off each other's state level.

Speaker 11: And so should we think about that US mix increasing and bringing

And so should we think about that U S mix, increasing and bring gross margins up with it or are there other dynamics at play here as we go through the rest of the year.

Speaker 4: I'll speak to the GOS margin first and then he can talk to the international versus domestic myth.

Okay.

I'll speak to the gross margin first and then.

In Kentucky, the international versus domestic mix so.

Speaker 4: So for the quarter, the cost increases impacted our margins by roughly 340 points negatively. That was offset partially by our price recovery actions that added about 230 points.

So for the quarter.

Yes.

The cost increases.

Impacted our margins by roughly 340 basis points negatively.

That was offset.

By our price recovery actions.

That added about 230 basis points, that's about two times.

Speaker 4: That's about two times what we reported in our first quarter.

We reported in our first quarter.

Speaker 8: And then you write the international strength that have a bit of a deluded effect by about the 90 basis points in the quarter. So that kind of is a walk year over year to a larger perspective.

And then you're right the international strength did have.

A bit of a dilutive effect by about a.

90 basis points in the quarter.

So that kind of as a walk year over year.

Is your perspective.

Speaker 4: And then, you know, we again continue to expect the pricing actions to gain traction in the future quarters.

And then.

We again continue to.

The pricing actions to gain traction in future quarters.

Speaker 4: to help offset those inflationary pressures that we've seen.

To help offset.

Secondary pressures that we've seen.

Speaker 7: So Tim, on the mix, right, we've said that our long-term target gross margin is 40%, and the way we were planning on getting there was through hardware innovation and software. And as we've done traction with the international team, we think that there's a-

So on the mix right.

But our long term.

Target gross.

Gross margin is 40% and the way we were.

Planning on getting there was through.

Hardware innovation.

Software.

We've gotten traction.

The international team.

We think that there is.

Speaker 7: good growth opportunities there that we're digging into but we have our first proof point.

Good growth opportunity there that we're digging into but we have our first proof point.

Speaker 7: I think your question is when the RDOF kicks in and the infrastructure fund kicks in, will that drive more growth in the US side? Yes, that is more margin-accredive. So, you know, I gave my best estimates on when that funding will hit. And we want to keep our...

I think your question is when when the Argos kicks in.

The.

The infrastructure.

Structure fund kicks in with that.

More growth in the U S side, yes.

That is margin accretive.

No I gave my best estimates on when that funding.

Uh huh.

We want to keep our R. R.

Speaker 7: you know, regional mixed model the same two thirds North America one third the rest of the world and we will revisit that as that funding starts to flow but there's no denying that when when it does it'll be margin of credo for us.

Regional.

Mixed model the same two thirds North America, one through the rest of the world.

We will revisit that as the funding starts to flow.

But there's no denying that win when it does it will be margin accretive for us.

Yeah.

Speaker 11: Sorry I'm on my own cycle head It was really interesting question too

Okay.

Sorry.

Sorry go ahead.

Yes.

It was really interesting question too too bad.

Right.

Stick with Argos.

And so you mentioned you'd won awards I think backed by <unk> III.

Speaker 11: And so you mentioned you'd won awards, I think, backed by three billion with carriers or backed by three billion in awards. And historically, I want to ask about you at a one time estimated kind of a tam range.

Carriers are backed by $3 billion in awards historically.

I wanted to ask about you had onetime estimated kind of a tam.

Range for RBR in the 2% to 4% range be.

Based on that network build cost or maybe even based on those awards.

As you have more experience with these deals and are winning a lot of them as that.

Speaker 11: Still a reasonable range, any bias toward the high and low end or kind of any update in

Still a reasonable range any bias towards the high and low end or.

Kind of any update in general on how you see your.

Market opportunity out of those.

<unk> clients.

Yes.

Speaker 7: Yeah, I would say we're the same, right? So the reason we put the $3 billion number in last time.

Yes, I would say so.

Right.

The reason, we put the $3 billion number in last time was.

Speaker 7: You know, you asked a question that we didn't have last time was of your winners, how much does it represent an opportunity 3 billion, we would stick with the 2 to 4% of the funding goes to microwave and, you know, in our investor presentation, we.

I asked the question that we didn't have last time was.

Of your winners how much does it represent an opportunity of $3 billion, we would stick with the 2% to 4% of the funding goes to microwave.

In our Investor presentation.

Speaker 7: you know, we think that we have 38% share. And, you know, I wouldn't say that any of that's materially changed. So, as you kind of...

We think that we have 38%.

Sure.

I wouldn't say that any of that's materially changed so so as you kind of model or potential upside when the dot funding I would say that the numbers are.

Speaker 7: Model our potential upside when you are not funding. I would say that the numbers are

Are the same.

Speaker 11: Great, and that 3 billion number is pretty much the total amount of awards to the 6 wireless carriers.

Great and that that $3 billion number is pretty much. The total amount of awards to fixed wireless carriers is that.

Coincidental.

Yeah.

Speaker 11: Or is there anything outstanding there or kind of one of them all?

Or are there any is there anything outstanding there of kind of win them all.

Speaker 11: Let me check if that's a coincidence or a fact. I didn't do that totaling but we'll get back to you on that. But it's, we've got to be pretty close to winning them all. Yeah, I just think you're sharing something.

Let me check if that's a coincidence.

<unk>.

I didn't I didn't do that totally.

We will get back to you on that but.

We've got to be pretty close to winning them all.

Saying youre sure sense anecdotally higher than 38, but it really hasnt started to roll yet.

Speaker 11: And I figured there was limited impact looking at the flat sequential U.S. numbers from ARDOF. As you look at the state level.

And I figured there was limited impact looking at the flat sequential U S numbers from argon.

As you look at the state level I don't know, if youre seeing any funding or opportunities.

State networks, but coming out of state level funding.

And I'd ask you. The same question on dish in terms of it doesn't seem like that started to be material yet what's your expected timing on that.

Speaker 7: Yeah, I think I know the arm.

Yes.

<unk>.

Speaker 3: The state funding environment is pretty stable and the positive catalyst is the infrastructure fund. And then there's...

The state funding environment is pretty stable and the positive catalyst is the.

The infrastructure funds and then there's one legislation.

Speaker 9: One bit of legislation that I don't know that we fully understand with the conversion of the leftover cares money, that could be a positive catalyst, but we don't know specifically about that. And then on Dish, it hasn't been a material, but we're seeing signs that it will have some positive.

Know that we fully understand with the <unk>.

Conversion of the leftover cares money that could be.

Is it a catalyst but we.

We don't.

No specifically about that and then on.

On dish.

It hasnt been.

Material, but we are seeing signs that it will have some positive.

Speaker 9: impact, let's say, in Q4 of our fiscal year.

In time, let's.

Let's say.

Q4.

Our fiscal year.

Speaker 1: Thank you. Thank you very much. You back on, you back on, yeah. Thank you. And our next question come from...

Great. Thanks.

Youre back on mute.

Thank you and our next question will come from Theodore O'neill with Litchfield Hills research.

Yes, congratulations on the quarter.

Couple of questions a couple of questions for you.

Speaker 6: you could sales have been higher if you had had a supply.

Could you could sales have been higher if you hadn't had the supply chain issues in the quarter.

Speaker 6: and if they could have been, do those sort of come later or do they use get...

And do those in it could've been do those sort of come later or do they just get taken up and consumed by competitors.

Speaker 3: Well, Theo, please to report that we didn't miss any demand due to supply chain issues in the quarter. And if you go back to the past couple quarters, we said we've missed a million or two million, but our supply chain team performed well and we didn't miss any demand. And I think that's the first time.

Oh well.

I'm pleased to report.

You didn't miss any demand due to supply chain issues in the quarter and if you go back the past couple of quarters, We said, we'd miss a $1 million or $2 million.

Our supply chain team performed well.

Well, we didn't we didn't miss any demand that's the first time.

Speaker 9: That's been the case in three or four, or maybe more courts. So that's another sign that the environment is stabilizing and I'll keep my fingers crossed that maybe the supply environment is moderate.

That's been the case.

Three or four or maybe more quarters. So that's another another sign.

The environment.

As stabilizing and I'll keep my fingers crossed that maybe the supply environment.

Moderator.

That's terrific.

Speaker 6: And it paid on the on the last quarter you said that the year now supplying 15 of the top 30 rural digital digital opportunity fund winners and are in

Pete on the on the last quarter, you said that the year now supplying 15 of the top 30 rural digital opportunity Little opportunity fund winners and are in advanced discussions with five of the other of the top 30.

How is that going.

Speaker 3: Yeah, I would say we've gone one one out of the five. So we're let's go for 16 of the top 30.

Yeah, I would say we've done.

One of the slides so let's.

Let's go for 16 of the top 30.

Right.

Speaker 6: It was noted earlier, but you say else in the Africa and Middle East segment were up 30% sequentially. And they've been, I think they've been flat.

It was noted earlier, but your sales in the Africa and Middle East segment were up 30%.

<unk> and they've been I think they've been flat for many quarters.

As we sort of model out these our own projections should we consider that sort of be stable at this new level or how should we think about that.

Speaker 6: consider that it would be stable at this level or...

Speaker 7: So

Hi.

So we think.

Speaker 9: Well, if it was an exceptional quarter, Q2. And we, you know, and, you know, if we want to kind of do that, our North America business was not growing as much and international was growing more. And we would say that, you know, the way to get, look at our revised revenue guidance and just use the two thirds North America one third split. So I think that's...

Well it was an exceptional quarter.

Q2, okay.

No.

If we want to.

Do the.

North America.

<unk> was not growing as much in international was growing more than we would say that.

The way to look at our.

Our revised revenue guidance and just used.

The two thirds.

North America, one third split so let's see.

Speaker 9: about the color we can give. And but I would say on the Africa side, as though the 5G prep work is completed, then you could imagine later this calendar year of this having a positive impact. But to hedge back on that a little bit, we still see the 2.30 North America wonder and we want them both to grow, to grow.

About the.

Color, we can give.

But I would say on the Africa side as those two five.

<unk>.

Work is.

Is completed.

Imagine later this calendar year this having a positive impact.

Hedge back on that a little bit.

Still we still see the two thirds North America, one third and we want them both to grow.

So grow so that's good.

Speaker 5: That's where we're at. It's a good question. Fair enough. Thanks very much. Thank you.

Good question fair enough, thanks very much.

Thank you.

And once again, if you would like to signal with questions. Please press star one on your Touchtone telephone again that is star one if you would like to ask questions.

And our next question will come from Aaron Martin with AIG investment partners.

Speaker 12: Alright guys, congratulations to the last quarter and appreciate the continuous execution on the buyback.

Hi, guys congratulations on a nice quarter and appreciate the continued execution of the buyback.

So let me go back to the VR.

Speaker 12: And going back to the AR, was that increased their related to the shifting revenue international and if you related to there or what else do you just because it's been a...

What's that increase there related to the shift in revenue.

Rational anything related to there or what else changed.

A nice little creep up.

Speaker 8: Yeah, this corridor was almost entirely due to international growth. If I look at the regional break out of our AR. And so that was definitely a driving factor, which we've typically have longer payment terms with international customers in addition to this strong growth. So those are the two biggest contributing factors that, again, we expect that to start to come back.

Yes.

This quarter was it was almost entirely due.

The international growth.

If I look at the regional breakout of our <unk> and <unk>.

So that was definitely a driving factor.

We typically have longer.

Payment terms with international customers. In addition to the strong growth. So those are the two biggest contributing factors.

Again, we expect that to.

Yes, sorry go ahead.

Come back.

In subsequent quarters.

Got it.

Speaker 12: And then, you know, as I, you know, you talk about the backlog still being over 200 million, was it up sequential?

And then I'm sorry.

Can you talk about the backlog slipping over $200 million.

Was it up sequentially.

Speaker 3: So we don't break out backlog on a quarterly basis because of the project nature. The other thing we would add to give you a little more insight is our book to Bill ratio remains above one.

So we don't break out backlog on a quarterly basis because of the project based nature.

<unk>.

We would we would add to give you a little more insight as our book to Bill ratio remains above one.

Speaker 12: Okay, and then as I look at that on the higher back log.

Okay.

And then as I look at that.

The higher backlog.

Speaker 12: Is any of that a function of longer weak time and your customers have it?

Is there any of that a function of the longer lead times and your customers having too.

Speaker 12: order a hate for a little longer or is that really emblematic and true demand.

Order ahead for a little bit longer or is that really emblematic of true demand.

Speaker 9: So we, you know, our private network business is long cycle. So we don't see very much acceleration of demand in that segment. And we certainly haven't seen the mobile network operator space. So we, if that's going on, we're not aware of it. So I wouldn't say we have any acceleration of demand. So it's really true demand.

So we know well.

Private network business is long cycle, so we don't see very much.

Acceleration of demand.

Segment.

We certainly haven't seen the mobile network operator space. So we.

Okay.

If thats going on were not aware of it so I wouldn't say we we.

Have any acceleration of demand. So it is really true demand.

Speaker 12: I think about growth over the next 6-12.

Got it.

Think about growth over the next six to 12.

Four months.

Speaker 12: What's the more important driving factor is it, you know, road broadband, is it, you know, 5G, you know, well, that's really happening. What are the bigger factors in terms of whether the growth will show up and how strong it will be for you guys over there?

More important driving factor is it.

Broadband is at $5 three <unk> rollout is really happening what are the bigger factors in terms of whether the growth will show up and how strong it will be for you guys over that timeframe.

Speaker 3: So, you know, we have 3D, 3D.

So we have.

<unk> three <unk>.

Speaker 9: drivers that we talk about private networks, which is about two-thirds of our business. So that's really important. And I think that's gonna be a steady grower for us and when the...

Drivers that we talked about private networks, which is about two thirds of our business. So that's really important.

No I think thats.

It's going to be a steady grower for us.

When the business.

Speaker 9: infrastructure fund kicks in. That should be a growth accelerate. The world broadband is really would be a growth accelerate and 5G, you know, we think we're in early innings. We're really happy to see the developments, particularly in Africa, and that would be a growth accelerant. So if you look at the

Infrastructure fund.

Kicks in that should be a growth accelerator.

<unk>.

Rural broadband.

It was really.

Would be growth accelerate.

But we think we're in the early innings, we're really happy to see the developments, particularly in Africa and that would be.

<unk>. So if you look at the.

Speaker 9: The, in terms of the core company, the private networks is most important, but in terms of accelerating growth, the 5G and the grow broadband should be, you know, pleasant developments for us, say, one, two, three years out.

The in terms of the core company.

Networks is most important but in terms of accelerating growth.

Slide <unk>.

The rural broadband.

It should be.

Pleasant.

Pleasant developments for us.

So one to two years out.

Speaker 12: And then he talked about a multi band how the cars were very excited.

Got it.

And then you talked about a multi band.

So very excited.

The release.

Speaker 12: And I think you said there's a label of $300 million tam in space.

Thank you.

It enables a $200 million Tam expansion for you can you talk a little bit about your initial.

Speaker 12: Can you talk a little bit about your initial, I guess, test book?

I guess.

I don't know if you've taken any orders yet.

With.

Speaker 12: particularly for multi band and quantification around the initial rollout of.

Particularly for multi band and any quantification.

Around the initial rollout of that product.

Speaker 3: Yeah, so the three million dollar ceramic?? of interviews was with a high availability that it is possible?

Yes, so soon.

The answer was with <unk>.

<unk> routing software.

Speaker 3: So the multi-band XD makes our microwave radio is more competitive versus

So the multi band XD.

Mitch.

Our microwave radio is more competitive versus fiber and we think that distance.

Speaker 3: fiber and we think at that distance we have

Speaker 9: We've opened up to $50 million more of TAM. So that would be share game versus fiber. And we are in trials with two lead customers. And where the lead customers are is when, where they're using fiber and the total cost of ownership of the fiber increases dramatically with link distances. So think about, you know, mountainous dreams or, or, um,

We've opened up to $50 million more of Tim so that would be share gain versus fiber.

We are in trials with two.

<unk> customers and where are these lead customers are as win.

Where they're using fiber and the total cost of ownership with a fiber increases dramatically.

With link distances, so think about.

Now on the streams or or.

Speaker 9: you know, kind of island based nations where there's a lot of water. Do we think that this is, uh, improves the value proposition for

No.

Island Nations, where there is a lot of water do we think that this is.

It improves the value proposition for sure for microwave.

Speaker 3: for Mike and Wave and we're really excited that we have two significant customers that are in trial.

Really excited we have two significant customers that are in trials.

Speaker 12: Okay, and then on the new 10 gig very long distance radio, where are you with that, are the customers, do they care about the additional capabilities?

Okay, and then on the new 10 gig very long distance radio.

Where are you with data the customers do they care about the additional capabilities.

Or.

Speaker 12: compass and catching up or what can you tell me there.

Competition catching up or.

What can you tell me there in terms of.

Speaker 3: All right, so the 10 gig radio and the multiband XV are the same. So the commentary is related to the multiband XV radio.

So.

The 10 gig.

Radio multi beam NXP.

So so so the commentary commentaries.

Related to the.

Multi band XD radio.

Okay. Thank you very much.

Thank you.

Speaker 1: Thank you and that does include the question and answer session and now turn to conference.

Thank you and that does conclude the question and answer session. I will now turn the conference back over to Mr. Pete Smith for any additional or closing remarks.

Speaker 9: I'd like to thank everyone for your support and attention and interest in Aviyad. Everybody stay safe and self healthy. We're looking forward to giving you an update on our progress in 90 days. Thanks everyone. Thank you. Good night, Doug.

Okay.

I would like to thank everyone for your support and attention and interest in Avianca.

Everybody stay safe himself with healthy we're looking forward to giving you an update on our progress in 90 days. Thanks, everyone.

Thank you and that does conclude today's conference. We do thank you for your participation and have an excellent day.

Thank you.

[music].

Speaker 13: And.

[music].

Good afternoon, welcome to the ABM networks second quarter fiscal 2022 earnings call.

Speaker 1: Welcome to the AVAT Network's second quarter fiscal 2022 earnings call.

At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note. This conference is being recorded.

Speaker 1: The question and answer session will follow the formal presentation. Please note this conference is being recorded.

I will now turn the conference over to your host Mr. Keith Fan, Iran, Vice President of Global Finance and Investor Relations.

Speaker 1: Santa Ron, Vice President of Global Finance and Investory

Thank you you may begin.

Speaker 2: Thank you and welcome to Abia Network's second quarter, fiscal 2022 results conference call and webcast.

Speaker 2: You can find our Form 102 Press release and updated Invest the presentation in the IR section of our website at www.aviotnetworks.com. Along with a replay of today's call in approximately two hours. With me today, our Pete Smith, the Aviat's president and CEO , will begin with opening remarks on the company's fiscal second quarter, followed by David Gray, our CFO , who will review the financial results for the quarter at first half of fiscal 2022.

Dot com along with a replay of today's call in approximately two hours with.

With me today are Pete Smith President.

President and CEO , who will begin with opening remarks on the Companys fiscal second quarter, followed by David Gray, Our CFO , who will review the financial results for the quarter and first half of fiscal 2022. Pete will then provide closing remarks on how that strategy and outlook followed by Q&A as a reminder, during today's call and web.

Speaker 2: People then provide clothing or marks on aviote strategy and outlook followed by Q&A.

Speaker 2: As a reminder, during today's call and webcast, management may make forward-looking statements regarding Abbey House business, including but not limited to statements relating to financial projections.

Speaker 2: business drivers, new products and expansions, the impact of COVID-19 and economic activity in different regions.

Speaker 2: additional information on factors that could cause actual results to differ material from the statements made on this call can be found in our annual report on Form 10K, filed with the SEC on August 25th, 2021.

<unk> filed with the SEC on August 25, 2021.

Speaker 2: The company undertakes no obligation to revise or make public any revision of these forward-looking statements in light of new information or future events.

The company undertakes no obligation to revise or make public any revision of these forward looking statements in light of new information or future events.

Speaker 2: Additionally, during today's call and webcast, Management will reference both GAP and non-GAAP financial measures. Please refer to our press release, which is available in the IR section of our website at www.aviotnetworks.com and financial tables therein, which include a GAP to NONGAP reconciliation and other supplemental financial information. At this time, I'd like to turn the call over to have the audience president and CEO Pete Smith. Pete.

Additionally, during today's call and webcast management will reference both GAAP and non-GAAP financial measures. Please refer to our press release, which is available in the IR section of our website at Www Dot AVR networks Dot com and financial tables therein, which include a GAAP to non-GAAP reconciliation and other supplemental.

Financial information at this time I'd like to turn the call over to <unk>, President and CEO Pete Smith peak.

Speaker 3: Thanks Keith, and good afternoon everyone. Thanks for joining us to review a successful quarter. The company continued to execute on our key long-term focus areas of growth, margin expansion, and meaningful bottom line improvement.

Thanks, Steve and good afternoon, everyone.

Thanks for joining us to review a successful quarter. The company continued to execute on our key long term focus areas of growth margin expansion and meaningful bottom line improvement despite continued supply chain and inflationary challenges.

Speaker 3: Despite continued supply chain and inflationary challenge.

Speaker 3: The Aviyad team commitment resulted in revenue of $77.9 million, the highest quarterly revenue since Q1 of fiscal year 2016, driven by international growth of 25% versus last year. EBITDA margins of 13% continued rock solid balance sheet and liquidity position. Increased pace of share by that.

<unk> team commitment resulted in revenue of $77 9 million the highest quarterly revenue since Q1 of fiscal year 2016, driven by international growth of 25% versus last year.

EBITDA margins of 13% continued rock solid balance sheet and liquidity position increased pace of share buybacks. These results would not have been possible without the tireless dedication and execution of our operations team engineering team and supplier partners.

Speaker 3: These results would not have been possible without the tireless dedication and execution of our operations.

In an incredibly challenging environment because supply chain has dominated the conversation over the past 12 plus months, let's address the environment from <unk> perspective.

Speaker 3: We experienced fewer supply interruptions, but we still experienced interruptions. V times did not improve, but fortunately there were no high push outs. This is a sign of stabilization. The semiconductor allocation environment remained.

We experienced fewer supply interruptions, but we still experienced interruptions lead times did not improve but fortunately there were no high push outs. This as a sign of stabilization to semiconductor allocation environment remains.

Speaker 3: We are invested to design out the most problematic supplier.

We have invested to design out the most problematic suppliers, we remain subject to the risk of other supplier push out and Decommit slate in the quarter. The most significant question when does the supply environment kept better this is difficult to predict but we feel that the environment will moderate.

Speaker 3: We remain subject to the risk of a supplier push out and decommissally in the quarter. The most significant question, when does the supply environment get better? This is difficult to predict, but we feel that the environment will moderate in the April to June timeframe. And most, hopefully all of the supply chain problems are behind us at the end of December .

In the April to June timeframe, and most hopefully all of the supply chain problems are behind us at the end of December .

Speaker 3: Now, let's move to the key highlights of the second quarter, which include our multi-band XD launch, high availability routing software, factory acceptance test success, strong and demand environment linked to RDOF, the infrastructure bill, and spectrum options. AMEA growth.

Now, let's move to the key highlights of the second quarter, which include our multi band XD launch high availability routing software factory acceptance tests success strong and demand environment linked to Argos, the infrastructure Bill and spectrum auctions.

EMEA growth share buybacks.

Speaker 3: In the quarter, Aviyah released a new announcement to our multi-band product line. Multi-band XD or extended distance increases the reach of 10 gigabits per second length over distances up to 20 kilometers to support 5G and road broadband applications.

In the quarter Avi <unk> released a new enhancement through our multi band product line multi band XD or extended distance the increases the reach of 10 Gigabits per second links over distances up to 20 kilometers to support five G and rural broadband.

Applications to achieve comparable performance competitive multi band solutions require up to four times, the hardware, making them costly and impractical for tower deployments.

During high cost fiber as the only option now with multi band XD operators can significantly lower their total cost of ownership by up to 90% when compared to fiber alternatives simply this innovation makes avia more competitive versus fiber.

Speaker 3: Simply, this innovation makes Aviat more competitive versus fiber.

Speaker 3: In the previous quarter, Aviat announced release of our new high availability routing software to improve the reliability of critical networks of all kinds. This quarter, we passed a significant milestone with the successful completion of factory acceptance tests or FAT with a large U.S. state cost.

In the previous quarter, <unk> announced release of our new high availability routing software to improve the reliability of critical networks of all kinds. This quarter, we passed a significant milestone with the successful completion of factory acceptance test or fat with <unk>.

Large USD customer, we replicated the entire state network and our facility in Austin, Texas and subject this system to real world stress and performance testing the software performed flawlessly.

Speaker 3: We replicated the entire state network in our facility in Austin, Texas and subjected the system to real world stress and performance testing. The software performed while it.

Speaker 3: The environment for Aviyatso offering is continued to improve.

The environment for Avianca operators continue to improve.

Speaker 3: Let's touch on the Royal Digital Opportunity Fund, the Infrastructure Bill, and the recent Spectrum Auction.

Let's touch on the rural digital opportunity fund the infrastructure Bill and the recent spectrum auction.

Speaker 3: We remain well-positioned for the rollout of the Royal Digital Opportunity Fund or RDoF. As we track the RDoF winners, Aviyant customers are earmarks for more than 3 billion out funding. In the quarter we announced a new customer, Whisper Internet in the space.

We remain well positioned for the rollout of the rural digital opportunity fund or our dos as we track PR to operators.

<unk> customers are earmarked for more than $3 billion funding in the quarter, we announced a new customer whispered internet in this space.

Speaker 3: In November , 2021, the U.S. passed the bipartisan infrastructure legislation, which appropriates $65 billion for broadband infrastructure deployment. As a U.S. company, Aviyat is well positioned to participate in serving the 42 million Americans or will broadband coverage or will lack contemporary bandwidth.

In November 2021, the U S passed the bipartisan infrastructure legislation, which appropriate 65 billion for broadband infrastructure deployment is a U S company <unk> is well positioned to participate in serving the 42 million Americans are well.

Our band coverage or who lack contemporary bandwidth.

Speaker 3: The FCC recently completed a $22 billion auction known as option 110 for the 3.45 to 3.55 gigahertz spectrum. The second biggest winner was Dish, our previously announced customer. As this spectrum is utilized, Aviyat's back-all business will be positively impacted.

The FCC recently completed a $22 billion auction known as auction 110 for the 345% to 355 gigahertz spectrum. The second biggest winter was dish, our previously announced customer.

This spectrum is utilized aviano backhaul business will be positively impacted.

Speaker 3: Some highlights include a win with an important southeastern European mobile operator and momentum with a UK private network cost.

Some highlights include a win with an important southeastern European mobile operator, and momentum with a UK private network customer.

We see their preparations for several <unk> deployments in Africa, and we believe our portfolio has the best value proposition on the market for five G. And this preparation work suggest that future development of a favorable <unk> demand environment.

Speaker 3: We accelerated the pace of share buybacks during Q2, repurchasing almost 2 million of Aviado's stock and exhausting the previous board authorization. As announced, the board authorized a further $10 million share repurchased plan, and we anticipate executing on the new plan opportunistically in the subsequent court.

We accelerated the pace of share buybacks during Q2, repurchasing almost $2 million of Avianca stock and exhausting the previous board authorization.

As announced the board authorized a further $10 million share repurchase plan and we anticipate executing on the new plan opportunistically in the subsequent quarters.

Speaker 3: Before turning the call over to David, let me provide a couple of additional observations and insights. First, this was a very good quarter and first half of our fiscal year. We remain focused and continue to execute, and those collective efforts are reflected in our financial and operational results.

Speaker 3: We've continued to demonstrate our ability to grow and to take share of demand. Looking forward, we see three significant drivers, 5G, private networks, and role-broad debt. And believe we are well-positioned to capture significant opportunities with our differentiated products, software and services offerings. With that, let me turn the call over to David to review our financials before coming back for some final comments, David.

We have continued to demonstrate our ability to grow and to take share of demand looking forward. We see three significant drivers <unk> private networks and rural broadband and believe we are well positioned to capture significant opportunities with our differentiated products software and services.

Offerings with that let me turn the call over to David to review, our financials before coming back for some final comments David.

Speaker 4: Thank you, Pete, and good afternoon, everyone. During my remarks today, I will review some of the key second quarter and first half fiscal 2022 financial highlights. Noting our detailed financials can be found in our 10Q and press release, both of which were filed this afternoon.

Thank you, Dave and good afternoon, everyone. During my remarks today I will review some of the key second quarter and first half fiscal 2022 financial highlights.

Our detailed financials can be found in our 10-Q and press release, both of which were filed this afternoon.

Speaker 4: As a reminder, all comparisons discussed today are between the second quarter of fiscal 2022 and the second quarter of fiscal 2021 and last noted other one.

As a reminder, all comparisons discussed today are between the second quarter of fiscal 2022 in the second quarter of fiscal 2021 unless noted otherwise.

Speaker 4: For the second quarter, we reported total revenues of 77.9 million as compared to 70.5 million for the same period last year. An increase of 7.4 million were 10.4 percent driven by international sales growth and continued strength in U.S. private network.

Speaker 4: The quencially revenue increased by 4.7 million or 6.4%.

<unk> revenue increased by $4 7 million or six 4%.

Speaker 4: As Pete mentioned, our total revenue for the second quarter was the highest since our first quarter of fiscal 2016.

As Steve mentioned, our total revenue for the second quarter was the highest since our first quarter of fiscal 2016.

Speaker 4: North America, which comprised 66% of total revenue for the second quarter, was 51.0 million, an increase of 1.9 million, or 3.8% from the same period last year, driven primarily by our private network's business.

North America, which comprised 66% of total revenue for the second quarter was 51.0 million an increase of $1 9 million or three 8% from the same period last year.

Driven primarily by our private networks business.

Speaker 4: International revenue was 26.8 million for the quarter and increased the 5.4 million or 25.5 from the same period last year.

International revenue was $26 8 million for the quarter, an increase of $5 4 million or 25, 5% from the same period last year.

Speaker 4: We are again pleased that our backlog continues to remain above 200 million, even after recognizing our highest quarterly revenues in over six years. Because of our innovators and differentiated product portfolio.

Speaker 4: Gross margins for the quarter were 36.2% and 36.3% on a gap and non-gap basis has compared to 38.2% and 38.3% in the prior year.

Gross margins for the quarter were 36, 2% and 36, 3% on a GAAP and non-GAAP basis, as compared to 38, 2% and 38, 3% in the prior year.

Speaker 4: Gross margins remained under pressure from inflationary headwinds and expedite costs related to supply chain structures, but improved sequentially from Q1 by 60 bases.

Speaker 4: This is consistent with our prior earnings commentary where we noted that price actions to off that inflation would gain momentum as the year progressed.

Speaker 4: Second quarter gap operating expenses were 19.9 million and second quarter non-gab operating expenses, which exclude the impact of restructuring charges and share-based compensation were 19.2 million.

Second quarter GAAP operating <unk> were $19 9 million in second quarter, non-GAAP operating expenses, which exclude the impact of restructuring charges and share based compensation were $19 2 million.

Speaker 4: Gap and non-gap optics were 0.8 and 0.9 million higher than the prior year respectively.

GAAP and non-GAAP Opex were zero, eight and <unk> 9 million higher than the prior year respectively.

Speaker 4: The increase was driven by higher R&D costs incurred to complete the design out of problematic vendors as well as higher commissions in line with strong borders and sales.

The increase was driven by higher R&D costs incurred to complete the design out of problematic vendors as well as higher commissions in line with strong orders and sales.

Second quarter GAAP net income was $5 7 million compared to $6 6 million last year.

Decline was wholly attributable to a $1 8 million higher GAAP tax provision in the current quarter, which was from the release of the U S deferred tax asset valuation allowance as reported in our fiscal Q3 2021 results.

Speaker 4: As a reminder, the increase in tax provision year over year will not increase our cash taxes paid. The company has over 500 million of NOLs that will continue to generate shareholder value via minimal cash tax payments for the foreseeable future.

Speaker 4: Second-quarter non-gap net income, which excludes restructuring charges, share-based income, and non-cash tax provision was 8.5 million compared to 8.4 million for the same period last year. Second-quarter non-gap EPS came in at 71 cents per share compared to 74 cents per share for the same period last year.

Second quarter, non-GAAP , net income, which excludes restructuring charges share based comp and noncash tax provision was $8 5 million compared to $8 4 million for the same period last year.

Second quarter non-GAAP EPS came in at <unk> 71 per share compared to <unk> 74 per share for the same period last year.

Speaker 4: Adjusted EBITDA for the second quarter was $10.1 million, which was flat to the prior year. Adjusted EBITDA margins were 13.1% for the quarter.

Adjusted EBITDA for the second quarter was $10 $1 million, which was flat to the prior year adjusted EBITDA margins were 13, 1% for the quarter move.

Moving on to the balance sheet.

Speaker 4: Our cash and cash booklets at the end of the second quarter were 42.3 million. We continue to have no debt.

Our cash and cash equivalents at the end of the second quarter were $42 3 million, we continue to have no debt.

Speaker 4: During Q2, we continue to increase investment in working capital to facilitate higher sales growth and protect ourselves from supply chain disrupting.

Speaker 4: Our strong-election provides us to a mass component supply and invest in international growth projects.

As a result accounts receivable and Unbilled receivables grew by $12 9 million in the quarter. Additionally, higher international growth typically has longer payment terms than north American customers.

Speaker 4: It also grew by 2.5 million in the quarter as we added more supply chain buffer stuff.

There is also grew by $2 5 million in the quarter as we added more supply chain buffer stock.

Speaker 4: AR and inventory growth was only partially offset by current liabilities which grew by 4.0 million in the quarter.

Inventory growth was only partially offset.

By current liabilities, which grew by $4.01 million in the quarter.

Speaker 4: As a result of these workable increases and $2 million of stop by-backs in the quarter, net cash decreased sequentially from the first quarter by 5.0 million and by 0.7 million from Q2 of the prior year. We expect this work in capital dynamic to moderate in subsequent quarters, returning us to strong positive cash generation. Regardless, our balance sheet remains very solid, leaving us well positioned to execute our long-term plan.

As a result of these works will increases and $2 million of stock buybacks in the quarter net cash decreased sequentially from the first quarter by 5.0 million and by 0.7 million from Q2 of the prior year. We expect this working capital dynamic to moderate in subsequent quarters, returning us to strong positive.

Cash generation, regardless, our balance sheet remains very solid, leaving us well positioned to execute our long term plans.

Speaker 4: With that, I will turn it back to Pete for some final comment. Pete?

With that I will turn it back to Pete for some final comments.

Thanks, David just a few additional comments before opening up for Q&A.

I'm extremely proud of the entire avianca team for their significant contributions to our results for the second quarter of fiscal year 2022.

Speaker 3: Revenue for fiscal year 2022 to be in the range of 290 to 298 million and Adjusted EBITDA to be in the range of 37 to 39 million. Providing our customers with the most advanced, reliable and best total constable ownership system.

Speaker 3: for mission-critical work and our shareholders with probable growth remains our goal. Would that operator put it up for questions?

<unk>.

Speaker 1: Thank you. If you would like to signal with questions, please press star one on your touchtone.

Thank you and you would like to signal with questions. Please press star one on your Touchtone telephone.

Speaker 1: If you're a joyous today, can they speak or phone? Please make sure your mute function is turned off to ligers signal to recharge equipment. Again, that is star one, if you would like...

<unk> joined today use a speaker phone. Please make sure your mute function is turned off to allow your signals to recharge.

Again that is star one if you would like to signal and we'll pause for just a moment.

Hello.

Speaker 5: I know that. And it's fine.

Thank you Matt.

And our first question will come from Scott Searle with Roth capital.

Speaker 5: Good afternoon, thanks for taking my questions. Nice job on the quarter, a very difficult operating environment.

Hey, good afternoon, Thanks for taking my questions nice job on the quarter very difficult operating environment.

Speaker 5: he may be just to dive in quickly on on the guidance uh... for the fiscal year uh... it looks like it would probably imply that you're down a little bit it's quenchedley uh... into the march quarter typical seasonality is that how we should be thinking of it uh... above consensus expectations but down a little bit squenchedly from uh... from the center result

Maybe just to dive in quickly on the guidance.

For the fiscal year, it looks like it would probably imply that youre down a little bit and sequentially into the March quarter typical seasonality is that how we should be thinking of.

Above consensus expectations, but down a little bit sequentially from the December results.

Yes.

What we saw during the flood.

Seasonality some years.

Seasonality and some non GMO project based business.

No.

What drives the seasonality when we other than it is.

Year end buying principally from our government customers.

We certainly have that this year.

Speaker 5: okay and uh... maybe a dive in on the software component i think you uh... you indicated about a three hundred billion dollar cam on that front i wonder if you could expand on that a little bit in terms of a software contribution maybe near term how you start to penetrate that or just calculate the rate ofãy integrates

Okay.

And maybe to dive in on the software component I think you.

Speaker 3: So that's around our routing, right? Where we have a high availability routing software for a state network and that project went well. We cited that that's a $300 million. Um.

Thanks, Doug.

Doug.

Around.

Our routing right, where we hire availability routing.

<unk>.

For the state network.

Well, we cited that the $300 million.

<unk>.

Speaker 7: and what we'll be selling, when we have those wins, we will have...

Tim.

What we will be selling.

When we have those wins, we will have.

Speaker 3: you know, microwave radio, router, and the embedded software. And now that we've proven ourselves, our funnel is starting to grow. So that when we sell that embedded, that's that routing software, that'll be as...

Microwave radio a router.

Software.

Now that we've proven ourselves our funnel is starting to.

To grow so that when we sell that are embedded.

The routing software that will be.

Speaker 3: embedded software with respect to our overall

<unk> software with respect to overall.

Speaker 3: Software we were reluctant to break out the embedded software as a standalone because we can always sell it

So software.

Reluctant to break.

Key embedded software.

<unk> alone because we can only sell it.

Speaker 3: in conjunction with with hardware. And then just to keep going on this.

In conjunction.

With hardware.

Just to keep going on this.

Speaker 9: We do have our fast, which is a standalone software, but it's not, it's helped our margins in over the past couple of years, but it's not material enough to break out.

We do have our size, which is a standalone software that has helped our margins.

Over the past couple of years, but it's.

Material enough to breakout.

Got it.

Speaker 5: perfect and and maybe i could jump in on the art off front uh... it sounds like some of these ordoth deployments are starting to get underway i think to date you've seen very little with any contribution i think you articulated uh... three billion dollar opportunity with existing customers

Perfect.

And maybe if I could jump in on the <unk> upfront.

It sounds like some of these <unk> deployments are starting to get underway I think to date, you've seen very little if any contribution.

Thank you articulated a $3 billion opportunity with existing customers. How do you expect that to flow in and then if you could as well the infrastructure Bill it seems like it's coming behind it.

Speaker 5: how do you expect that to flow in and then if you could as well the infrastructure bill seems like it's coming behind it um... i'm see there's some politics probably in terms of the allocations and timelines there but there's been a big push in terms of american made you guys certainly fit that bill i guess how does art off kind of flow into the current calendar year and and where do we start to see the benefits from the infrastructure bill start

There's some politics, probably in terms of the allocations and timelines there, but theres been a big push in terms of American made and you guys certainly fit that bill. So I guess, how does <unk> kind of flow into the current calendar year, and where do we start to see the benefits from the infrastructure Bill is starting to kick in.

Speaker 9: Yeah, so we think that we're not aware of any RDOF spending with Aviate yet. So it's all yet to come. So that's that's upside for the for the business. And our best estimate of when we can expect to see an RDOF impact is in the back half of this calendar.

Yes, so we keep.

So we're not aware of any aren't outspending.

With avianca, yet so its all yet to come so thats.

Upside through the for the business.

Our best estimate of when we.

We can expect to see monarda Argos.

In the back half of this calendar.

Speaker 3: year. So it's in front of us, all of it, all of it. And then the building infrastructure fund or for the policy wonks, HR 368 for the

So so far.

Front of US all of US all of them and then keep building infrastructure fund.

The policy <unk> exceeds works.

There's four steps for implementation.

Speaker 3: There's four steps for implementation. First, the FCC needs to update their maps.

<unk> needs to update their maps, we kicked us in the summertime of this calendar year.

Speaker 3: We think that's in the summertime of this calendar year. Then the Commerce Department is...

The Commerce Department.

Speaker 3: is creating a process for states to apply in that application.

This is creating a process for states to apply.

The application.

Speaker 3: From what's been published is May 2022.

From what's been published is May 2022.

Speaker 3: then the space will develop their plan for permission, uh, I'm waiting for submission and then they'll be reviewed and approved by the Commerce Department. And we think that that's, uh, you know, the end of 22, the beginning of 2023 for that funding, uh, to make an impact.

States will develop their plans with permission.

For submission and then there'll be reviewed and approved by the Commerce Department.

Hey, Doug.

The end of 'twenty two to beginning of 2023 for that funding.

<unk>.

Speaker 5: great perfect and lastly if i could international had a great quarter of twenty five percent year of year it seems like looking at it uh... geographically latin america and uh... uh... middle east and africa did well is that you benefiting from from while we care out or while we being less visible and then on the european front big opportunities there i think in terms of what you're certain when hasn't showed up in the numbers yet when do we expect Europe to start to kick it thank you

Great Perfect and lastly, if I could international had a great quarter, you're up 25% year over year. It seems like looking at it geographically Latin America and.

Middle East and Africa did well.

Is that you're benefiting from from while we tear out or Huawei being less visible and then on the European front big opportunities. There I think in terms of what you're starting to win Hasnt shown up in the numbers yet when do we expect Europe to start to kick in.

Speaker 3: So, you know, when we report our segments, Europe is up driven principally.

So.

When we report our.

Segments, Europe , Europe is up driven principally.

Speaker 3: by the private network in the U.K. And secondly, we did have some good growth in the Europe region driven by Huawei.

But the private network.

The U K.

Secondly, we did have some.

Some good growth in the Europe region, driven by Huawei.

Speaker 3: Shergaine, that was the southeastern Europe network operator. And then thirdly, on Africa, we are seeing some Shergaine from Huawei. And what we're finding is that

Share gain that was the southeastern Europe .

Network operator.

Thirdly on.

Awesome.

We are seeing some.

Share gains from from Huawei, and what we're finding is that.

Speaker 3: 5G, a lot of our business in Africa.

Slide <unk>.

A lot of our business.

Speaker 3: This quarter was for around 5G deployment, so getting the site's crap and

This quarter was around five key deployment, so getting getting the sites.

Speaker 3: getting demos done so we think that that's going to bode well for the Africa region going forward.

Karen demos done so we think that that's going to bode well for the Africa region going forward.

Speaker 10: So, great thank you. Great, great, thank you. Thanks, Scott. And our next...

So great great great.

Thanks Scott.

And our next question.

Thank you. Our next question will come from Dave Kang with B Riley.

Speaker 8: Thank you, good afternoon. I guess my first question is, I believe you said we got in the supply chain situation that issues start to ease post June . So how should we think about gross margin in calendar second half? Does it go back to like, you know, 38% or so? Can you just provide some more color? What to expect?

Thank you good afternoon, I guess my first question is.

<unk> said regarding the supply chain situation.

Issues start to ease post June so how should we think about gross margin.

In calendar second half does it go back to like 38% or so can you just.

Ill.

To provide some more color.

What to expect.

Speaker 4: Hey Dave, I would comment on that by saying yes, you know, we're still on track with what we said previously as far as our pricing actions being able to fully offset the cost increases that we've been seeing by our Q4 of this year and looking out at that quarter and beyond, you know, we...

Hey, Dave.

Comment on that by saying, yes, we're still on track with what we said previously as far as our pricing actions.

Being able to fully offset.

The cost increases that we've been seeing by on Q4.

This year.

And looking out at that quarter and beyond.

No.

Speaker 4: to expect the overall inflationary impact to be somewhat delusionary because even though our price actions won't offset dollar for dollar, you're also increasing the denominator while

Yes.

We still expect the overall inflationary impact to be similar dilution area, because even though our price actions will offset dollar for dollar.

We're also increasing the denominator, while holding the numerator steady so that will have some impact, but we do expect.

Speaker 4: holding the numerator steady. So that will have some impact, but we do expect...

Speaker 4: as the momentum continues to unfold here that it will be able to hold on to those pricing gains and start seeing some better accretion on the gross market line.

As the momentum continues to unfold here that it will we'll be able to hold onto those pricing gains and start seeing some some better accretion on the gross margin line.

Speaker 3: Dave, to just add on that, you know, we're, you know, it'll be a little wild before we give guidance for...

Dave just to add on.

No.

So it'll be a little while before we give guidance for FIS.

Speaker 3: fiscal year 23 and the other value, what we'll need to balance is how much traction we have on our software, on our, you know, on our innovative new products versus the international growth. So, but, you know, Dave just said one important thing is that we still maintain that we're going to get back to

Fiscal year 'twenty three.

The other bell will need to balances how much traction we have on our.

On our software on our on our innovative new products versus the international growth. So.

But.

Dave just one important thing is that we still maintain that we're going to get.

Two.

Speaker 3: to parity from cost price in our able to June timeframe. And then the...

Two priority from cost price.

On April .

April to June timeframe, and then the.

Speaker 3: So then we're back to where we were before this environment took hold and then it'll be our margin improvements will be predicated on on mix and capturing more software and more innovation.

So then we're back to where we were before.

Environment took hold and then it will be.

Our margin improvements will be predicated on on mix.

Got some more software more innovation.

Speaker 8: got it. And then my second question is on you talked about having various trials, number of trials, how that sure that you expect those will go into production this year. Can you just provide or give us an update or some data points exactly how many trials you had and how many you expected to go into production this year?

Got it and then my second question is on you talked about having.

Various trials a number of trials that share that you expect.

Those will go into production this year can you just.

Right.

As an update or some data points exact how many calls that you had and how many you expected to go into production this year.

Speaker 3: so

Yes.

So.

Speaker 3: Well, I'm struggling with a little bit now with what I meant by the trials, but let me give you the one that I'm ready to prepare. We talked a lot about multi-band RxD, our new product we have. That's opened up another 50 million of PAM versus fiber where two trials would lead customers on the high availability software. We, um,

Well im struggling with a little bit.

What I meant by the trials, but let me give you the one that I'm ready to.

We talked a lot about multi band.

Steve.

Our new products, we have.

That's opened up.

$50 million of Tam versus fiber.

Two trials would lead customers on the high availability.

Software we.

Speaker 3: You know, we've passed the FAT with a state network customer and we've sold that to maybe a half a dozen other customers. And...

We passed.

The FAA achieved with this customer in a week, we sold to <unk>.

Maybe a half a dozen.

Those customers.

Speaker 3: The pipeline on the high availability routing software, we have another five or 10 customers behind there. So when we think about our pipeline, we kind of parse it out by the innovative products, and I think to be as responsive as possible to your question on the multi-band XB, we have two. We have more customers on the high availability routing software, and we have about a half a dozen that are cute up for...

The pipeline on.

On the high availability routing software, we have another five or 10 customers.

So when we think about our pipeline, we kind of parse it out by the key innovative products and I think.

To be as responsive as possible to your question on the multi band XD, we are too.

More customers on the bioavailability routing software and we have about a half a dozen that are queued up for.

Speaker 9: 4 trial G

Sure tore trials.

Speaker 8: And my last question is on OPEX, it was approximately $1 million sequentially to $30 million or excuse me, S-GNA. How should we think about OPEX going forward?

Got it and my last question is on the Opex line. It was up approximately $1 million sequentially to $30 million.

Alright.

Excuse me on SG&A.

How should we think about.

Opex going forward.

Speaker 8: Well, I think it's safe to say that we believe that our Q2 was probably the high water mark for our products in this fiscal year. Some of those extra expenses that were noted in the earlier comments should not recur, so they should moderate somewhat in the back half.

Well I think it's safe to say that we believe that.

Q2 is probably the high watermark for Opex.

In this fiscal year.

Some of those.

Extra expenses that were noted.

Earlier comments.

Should not recur so they should moderate somewhat in the back half.

That will also be balanced against.

Some modest seasonality that typically.

Typically exists in our Opex, but.

It should be fall.

Paul back a little bit.

That will be more in line with what we've seen in previous years.

Got it thank you.

Yes.

Thank you and our next question will come from Tim Sandwich with Northland capital markets.

Good afternoon.

Hi, Dave.

Hey, How's it going.

Speaker 11: trying to think about how to frame this question. I'll just start kind of with a gross margin approach and mix US versus international, typically.

Trying to think about how to frame. This question and I'll just I'll start.

Kind of what the gross margin approach.

Mix U S versus international is typically.

An important factor and so I want to think about that both short term and long term.

In the quarter you just reported I think you were able to increase gross margins.

You said 60 bps, despite a much higher international mix.

I guess question one how did you do that and.

David I Wonder if you can specifically frame the supply impact on that and whether that's a couple of hundred basis points.

Have you.

Speaker 11: And then longer term, a lot of what you're talking about, opportunity.

And then longer term you know a lot of what you are talking about opportunity wise appears pretty U S focused.

Argos.

Others stay level.

Speaker 11: And so should we think about that US mix increasing and bringing growth?

And so should we think about that U S mix, increasing and bring gross margins up with it or are there other dynamics at play here as we go through the rest of the year.

Speaker 8: I'll speak to the Gross Margin first and then he can talk to the international versus domestic myth.

Okay.

Speak to the gross margin first and then.

Kentucky, the international versus domestic mix.

Speaker 8: So for the quarter, the cost increases, impacted our margins by roughly 340 basis points negatively. That was offset partially by our price recovery actions that added about 230 basis points.

So for the quarter.

Yes.

The cost increases.

<unk> impacted our margins by roughly 340 basis points negatively.

That was offset partially by price recovery actions.

That added about 230 basis points, that's about two times, what we were.

Speaker 8: That's about two times what we reported in our first quarter.

As reported in our first quarter.

Speaker 8: And then you write the international strength that have a bit of a deleter effect by about the 90 basis points in a quarter. So that kind of is a walk year over year from a larger perspective.

And then Youre right the international strength did have.

A bit of a dilutive effect by about a thousand.

90 basis points in the quarter.

That kind of as a walk year over year.

On a margin perspective and then.

Speaker 8: And then, you know, we again continue to expect the pricing actions to gain traction in the future quarters.

We again continue to.

We expect the pricing actions to gain traction in future quarters to.

Speaker 8: to help offset those inflationary pressures that we've seen.

To help offset.

There's inflationary pressures that we've seen.

Speaker 3: So Tim, on the mix, we said that our long-term target gross margin is 40%. And the way we were planning on getting there was through hardware innovation and software. And as we've gotten traction with the international team, we think that there's a...

So Tim on the mix right, we said that our long term.

Target gross margin is 40% and the way we were planning.

Planning on getting there was through.

Hardware innovation.

Software.

We've gotten traction.

The international team.

We think that there is.

Speaker 3: good growth opportunities there that we're digging into but we have our first proof point.

Good growth opportunities there that we're digging into but we have our first proof point.

Speaker 3: I think your question is when the RDOF kicks in and the infrastructure fund kicks in, will that drive more growth in the US side? Yes, that is more margin-accredive. So, I gave my best estimates on when that funding will hit and we wanna keep our

I think your question is when when the Argos kicks in and the.

The infrastructure.

Structure fund kicks in with that.

<unk> growth in the U S side, yes.

That is margin accretive.

No I gave my best estimates on when that funding.

Uh huh.

We want to keep our R. R.

Speaker 3: you know, regional mixed model the same two-thirds North America one-third the rest of the world and we will revisit that as that funding starts to flow but there's no denying that when when it does it'll be margin of credo for us

Regional <unk>.

Mixed model the same two thirds North America, one through the rest of the world.

We will revisit that as the funding starts to flow.

But there's no denying that win when it does it will be margin accretive for us.

Okay.

Speaker 11: Sorry I'm on my own. I'm sorry. Go ahead. It was really an interesting question to Ben.

The Oems.

Sorry.

Sorry go ahead.

Yeah.

It was really interesting question too too bad.

Right.

Stick with our.

Speaker 11: And so you mentioned you'd won awards, I think, backed by three billion with carriers or backed by three billion on awards. And historically, I want to ask about you.

And so you mentioned you'd won awards I think backed by <unk> III.

Carriers are backed by $3 billion in awards historically.

I wanted to ask about unit onetime estimated kind of a tam.

Range for RBR in the 2% to 4% range base.

Based on that network build cost or maybe even based on those awards.

Speaker 11: You know, as you have more experience with these deals and are winning a lot of them, is that?

As you have more experience with these deals and are winning a lot of them as that.

Speaker 11: Still a reasonable range, any bias toward the high and low end or you know, kind of any update in just.

Still a reasonable range any bias towards the high end low end or kind.

Kind of any update in general on how you see your.

Market opportunity out of those.

<unk> clients.

Speaker 3: Yeah, I would say we're the same, right? So the reason we put the 3 billion.

Yes.

Yes, I would say so.

Right.

The reason, we put the $3 billion number in last time was.

Speaker 3: dollar number in last time was, you know, you asked a question that we didn't have last time was of your winners, how much does it represent an opportunity, three billion? We would stick with the two to four percent of the funding goes to microwave and, you know, in our best of presentation, we

I asked the question that we didn't have last time was of your winners how much does it represent an opportunity of $3 billion, we would stick with the 2% to 4% of the funding goes to microwave.

<unk>.

In our Investor presentation.

Speaker 3: you know, we think that we have 38% share. And, you know, I wouldn't say that any of that's materially changed. So, as you kind of...

We think that we have 38%.

Sure.

I wouldn't say that any of that's materially changed so so as you kind of model or potential upside when the dot funding I would say that the numbers.

Speaker 3: Model our potential upside when the RDOT funding I would say this in them numbers are

Or are the same.

Speaker 11: Great, and that, you know, that 3 billion number is pretty much the total amount of awards to 6 wireless carriers, is that?

Great and that that $3 billion number is pretty much. The total amount of awards to fixed wireless carriers is that.

Coincidental.

Sure.

Speaker 11: Or is there anything outstanding there or kind of one of them all?

Or are there any is there anything outstanding there of kind of win them all.

Speaker 11: Let me check if there's a coincidence or a fact. I didn't do that totaling, but we'll get back to you on that. But it's, we've got to be pretty close to winning them up. Yeah, I want to say your share of cents.

Let me check if that's a coincidence.

I didn't I didn't do that total England.

We'll get back to you on that.

That's accurate.

We've got to be pretty close to winning the model, we're just saying your shares.

Anecdotally higher than 38, but it really hasnt started to role yet.

Speaker 11: And I figured there was limited impact looking at the flat sequential US numbers from ARDOV. You know, as you look at the state level.

And I figured there was limited impact looking at the flat sequential U S numbers from argon.

As you look at the state level I don't know if youre seeing any funding our opportunities.

Not for state networks, but coming out of state level funding.

And I'd ask you. The same question on dish in terms of you know it doesn't seem like that started to be material yet what's your expected timing on that.

Speaker 7: Yeah, I think I, you know,

Yes.

Thank you.

<unk>.

Speaker 3: The state funding environment is pretty stable and the positive catalyst is the infrastructure fund. And then there's...

The state funding environment is pretty stable and the positive catalyst.

The infrastructure funds and then there is one third of legislation.

Speaker 3: One bit of legislation that I don't know that we fully understand with the conversion of the leftover cares money, that could be a positive catalyst, but we don't know specifically about that. And then on DISH, it hasn't been material, but we're seeing signs that it will have some positive.

Know that we fully understand with the <unk>.

Conversion of the leftover cares money that could be a positive catalyst, but we.

We don't.

No specifically about that and then on dish.

It hasnt been.

Material, but we are seeing signs that it will have some positive.

Speaker 3: In fact, let's say in 2004, our fiscal year.

In time, let's say in Q4.

Our fiscal year.

Speaker 1: Thank you. You back on, you back on, yeah. Thank you. And our next question come from

Great. Thanks.

You bet.

Thank you and our next question will come from Theodore O'neill with Litchfield Hills research.

Yes, congratulations on the quarter.

Couple of questions a couple of questions for you.

Could you could sales have been higher if you hadn't had the supply chain issues in the quarter and do those in it could've been do those sort of come later or do they just get taken up and consumed by competitors.

Speaker 6: you could sales have been higher if you had had a supply.

Speaker 6: and if they could have been, do those sort of come later or do they use get...

Speaker 3: Well, Theo, I'm pleased to report that we didn't miss any demand due to supply chain issues in the quarter. And if you go back to the past couple quarters, we said we'd miss a million or two million, but our supply chain team performed well, and we didn't, we didn't miss any demand. And I think that's the first time.

Oh well.

I'm pleased to report.

We didn't miss any demand due to supply chain issues in the quarter and if you go back the past couple of quarters, We said, we'd miss a $1 million or $2 million.

But our supply chain team performed.

Well, we didn't we didn't miss any.

Demand that's the first time.

Speaker 3: That's been the case in three or four, or maybe more quarters. So that's another sign that the environment is stabilizing and I'll keep my fingers crossed. That maybe the supply environment is moderate.

That's been the case.

Three or four or maybe more quarters. So that's another another sign.

The environment.

As stabilizing and I'll keep my fingers crossed that may be due to supply environment.

Moderator.

That's terrific.

Speaker 6: And Pete, on the last quarter, you said that the year now supplying 15 of the top 30 rural digital off digital opportunity fund winners and are in

Pete on the on the last quarter, you said that Youre now supplying 15 of the top 30 rural digital opportunity Little opportunity fund winners and are in advanced discussions with five of the other of the top 30.

How is that going.

Speaker 3: Yeah, I would say we've gone and won one out of the five. So we're, let's go for 16 of the top 30.

Yeah, I would say we've done.

One out of the.

The slides so we're let's.

Let's go for 16 of the <unk>.

<unk>.

Right.

And.

Speaker 6: It was noted earlier, but you say else in the Africa and Middle East segment were up 30% sequentially. And they've been, I think they've been flat for.

It was noted earlier, but your sales in the Africa and Middle East segment were up 30%.

Sequentially and they've been I think they've been flat for many quarters.

As we sort of model out these our own projections should we consider that sort of be stable at this new level or how should we think about that.

Speaker 6: that sort of be stable at this level or

Speaker 7: So

Yeah.

No.

So we think.

Speaker 3: Well, if it was an exceptional quarter, Q2. Okay. And we, you know, and, you know, if we want to kind of do that, our North America business was not growing as much and international was growing more. And we would say that, you know, the way to get, look at our revised revenue guidance and just use the two thirds North America one third split. So I think that's...

Well it was an exceptional quarter.

Q2, okay.

No.

If we want to do that.

North America.

Business was not growing as much in international was growing more than we would say that.

The way to look at our.

Our revised revenue guidance and just used.

The two thirds.

North America, one third split so let's see.

Speaker 3: about the color we can give. And but I would say on the Africa side, as though the 5G prep work is completed, then you could imagine later this calendar year of this having a positive impact. But to head back on that a little bit, we still see the 2.30 North America wonder and we want them both to grow that to grow.

About the color we can give.

But I would say on the Alberta side as those two.

Five G prep work.

Is completed.

Would imagine later this calendar year of this having a positive impact.

But the hedge back on that a little bit.

We're still we still see the two thirds North America, one third and we want them both to grow.

So grow so.

Speaker 6: That's where we're at. It's a good question. Fair enough. Thanks very much. Thank you.

That's a good question fair enough thanks very much.

Thank you.

And once again, if you would like to signal with questions. Please press star one on your Touchtone telephone again that is star.

One if you would like to ask questions.

And our next question will come from Aaron Martin with AIG.

<unk> investment partners.

Speaker 12: Alright guys, congratulations to the last quarter and appreciate the continuous execution on the pieback.

Hi, guys congratulations on a nice quarter and I appreciate the continued execution of the buyback.

Speaker 12: Going back to the AR, what that increase there related to the shifting revenue of international, anything related to there, or what else do you think is because it's been a

So let me go back to the or.

What's that increase there related to the shift in revenue international.

<unk>, there or what else changed.

Nice little rebound.

Speaker 8: Yeah, this corridor was almost entirely due to international growth. If I look at the regional breakout of our AR. So that was definitely a driving factor, which we did play a longer payment terms with international customers in addition to the strong growth. So those are the two biggest contributing factors. Again, we expect that to start to come back in such a way.

Yes.

This quarter was it was almost entirely.

Due to international growth.

If I look at the regional breakout of our ALR and so.

So that was definitely a driving factor.

Which we typically have longer pain.

Payment terms with international customers. In addition to the strong growth. So those are the two biggest contributing factors.

Again, we expect that to.

Yes.

Come back.

In subsequent quarters.

Okay.

Speaker 12: And then, you know, as I, I think you talked about the backlog slipping over 200 million, was it up sequential?

And then.

Can you talk about the backlog slipping over $200 million.

Was it up sequentially.

So we don't break out backlog on a quarterly basis because of the project based nature.

<unk>.

We would we would add to give you a little more insight as our book to Bill ratio remains above one.

Speaker 12: Okay. And then have a look at that on the higher back log.

Okay.

And then as I look at that from a.

A higher backlog.

Speaker 12: Is any of that a function of longer lead time and your customers having?

Is any of that a function of longer lead times and your customers having to order ahead for a little bit longer or is that really emblematic of true demand.

Speaker 12: order a hate for a little longer, or is that really emblematic and true demand?

Speaker 3: So we, you know, our private network business is long cycle. So we don't see very much acceleration of demand in that segment. And we certainly haven't seen the mobile network operator space. So we, if that's going on, we're not aware of it. So I wouldn't say we have any acceleration of demand. So it's really true demand.

So we know.

The network business is long cycle, so we don't see very much.

Acceleration of demand.

Segment.

We certainly haven't seen the mobile network operator space. So we.

<unk>.

If that is going on we're not aware of it. So I wouldn't say, we have any acceleration of demand. So it is really true demand.

Speaker 12: I think about growth over the next 6-12 years.

Got it.

Think about growth over the next 612.

24 months.

Speaker 12: But what's the more important driving factor is it, you know, road broadband, is it, you know, five-dreet, five-dreet, you know, well, that's really happening. What are the bigger factors in terms of whether the growth will show up and how strong it will be for you guys over there?

The more important driving factor or is it overall broad brand.

<unk> three <unk> rollout is really happening what are the bigger factors in terms of whether the growth show up and how strong it will be for you guys over that timeframe.

Speaker 3: So, you know, we have 3D, 3D.

So we have screened.

Three three draw.

Speaker 3: drivers that we talk about private networks, which is about two-thirds of our business. So that's really important. And I think that's going to be a steady grower for us. And when the fifth...

The drivers that we talked about private networks, which is about two thirds of our business. So that's really important.

No I think thats.

It's going to be a steady grower for us.

This.

Speaker 3: infrastructure fund kicks in. That should be a growth accelerate. The world broadband is really would be a growth accelerate and 5G, you know, we think we're in early innings. We're really happy to see the developments, particularly in Africa. And that would be a growth accelerant. So if you look at the

Infrastructure fund.

Kicks in that should be a growth accelerator.

Rural broadband.

It was really.

Would be growth accelerant.

But gee.

We think we're in the early innings, we're really happy to see the developments, particularly in Africa and that would be.

Gross <unk>. So if you look at the.

Speaker 3: The, in terms of the core company, the private networks is most important, but in terms of accelerating growth, the 5G and the grow broadband should be, you know, pleasant developments for us, say, one or two years out.

In terms of the core company.

The private networks is most important but in terms of accelerating growth.

Slide <unk>.

The rural broadband.

Should be.

Pleasant.

Pleasant development for us.

One or two years out.

Got it.

Speaker 12: And then he talked about a multi band how you know the cars were very excited

And then you talked about a multi band.

Customers are excited.

The release.

Speaker 12: I think you said there's a label of $300 million tam and space.

Amen.

Thank you.

It enables a $300 million Tam expansion for you can you talk a little bit about your initial.

Speaker 12: Can you talk a little bit about your initial, I guess, test,

Sure.

I guess.

I don't know if you've taken any orders yet.

With particularly.

Speaker 12: particularly for multi band and quantification around the initial rollout of.

Particularly for multi band.

Quantification around the initial rollout of that product.

Speaker 3: Yeah, so the $300 million dollar standard standard was with our high availability outies, Hopper.

Yeah, so sorry.

The answer was with us.

Availability routing software.

Speaker 3: So the multi-band XD makes our microwave radio is more competitive versus

So the multi band XD.

Mitch.

Our microwave radios more competitive versus fiber we think.

Speaker 3: fiber and we think at that distance we have

Distance.

Speaker 3: We've opened up to $50 million more of TAM. So that would be share game versus fiber. And we are in trials with two lead customers. And where the lead customers are is when...

<unk>.

We've opened up to $50 million more of Tim So that would be share gain versus fiber and we are in trials with two lead customers and where are these lead customers are as win.

Speaker 3: you know, where they're using fiber and the total cost of ownership of the fiber increases dramatically with linked distances. So think about, you know, mountainous terrains or, or um,

No.

They are using fiber and the total cost of ownership with a fiber increases dramatically.

With lead distances, so think about.

Now on the streams or or.

Speaker 3: you know, kind of island based nations where there's a lot of water. Do we think that this is, uh, improves the value proposition for...

No.

Island Nations, where there is a lot of water we think that this is.

Improves the value proposition for sure for microwave.

Speaker 3: for Mike Wave and we're really excited that we have two significant customers that are in trial.

We're really excited we have two significant customers that are in trials.

Speaker 12: Okay, and then on the new 10 gig very long distance radio, where are you with that of the customers? Do they care about the additional capabilities?

Okay, and then on the new 10 gig very long distance radio where are you with data the customers to take care about the additional capabilities.

Or.

Speaker 12: and catching up or what can you tell me there?

Competition catching up or.

What can you tell me there in terms of.

Speaker 3: All right, so the 10 gig radio and the multi-bann XV are the same. So the commentaries related to the multi-bann XV radio.

Acceptance.

The 10-Q.

Radio pushing on a multiyear NXP.

Are the same.

So so the commentary Doug commentaries.

Related to the multi band XD radio.

Okay. Thank you very much.

Thank you.

Speaker 1: Thank you and that does include the question and answer session. Now now turn to conference.

Thank you and that does conclude the question and answer session. I will now turn the conference back over to Mr. Pete Smith for any additional or closing remarks.

Speaker 3: I'd like to thank everyone for your support and attention and interest in Aviyad. Everybody stay safe and healthy. We're looking forward to giving you an update on our progress in 90 days. Thanks everyone. Thank you.

Got it.

I'd like to thank everyone for your support and attention and interest in Avianca.

Everybody stay safe himself with healthy we're looking forward to giving you an update on our progress in 90 days. Thanks, everyone.

Thank you and that does conclude today's conference. We do thank you for your participation and have an excellent day.

Q2 2022 Aviat Networks Inc Earnings Call

Request a DemoDemo

AVNW

Aviat Networks

Earnings