Q2 2022 Itron Inc Earnings Call
Good day, everyone and welcome to the Icahn, Inc. Q2, 2022 earnings Conference call today's call is being recorded.
For opening remarks, I would like to turn the call over to Ken GNL for opening remarks. Please go ahead Sir.
Thank you operator, good morning, and welcome to <unk> second quarter 2022 earnings Conference call. We issued a press release earlier today announcing our results. The press release includes replay information about today's call.
A presentation to accompany our remarks on this call is also available through the webcast and on our corporate website under the Investor Relations tab on the call today, we have Tom Dietrich <unk>, President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer.
Following our prepared remarks, we'll open the call to take questions using the process. The operator described before I turn the call over to Tom. Please let me remind you of our non-GAAP financial presentation, and our Safe Harbor statement.
Our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance reconciliations of differences between GAAP and non-GAAP financial measures are available on our earnings release and on our Investor Relations website, we will be making statements. During this call that are for.
Looking these statements are based on current expectations and assumptions that are subject to risks and uncertainties actual results could differ materially from these expectations because of factors that were presented in today's earnings release and the comments made during this conference call and in the risk factors section of our Form 10-K, and other reports and filings with the.
<unk> and Exchange Commission.
All company comments estimates or forward looking statements are made in a good faith attempt to provide appropriate insights to our current and future operating and financial environment materials.
Materials discussed today August four 2022 may materially change and we do not undertake any duty to update any of our forward looking statements.
Now please turn to page four in the presentation and I'll turn the call over to our CEO Tom Dietrich.
Thank you Ken good morning, and thank you for joining us.
You will hear second quarter details from Joan in coming up shortly but here is a brief overview of the quarter revenue was $432 million adjusted EBITDA was $17 million non-GAAP earnings per share was <unk> <unk>.
And free cash flow was $10 million.
Turning to slide five our second quarter bookings were $612 million for a book to bill ratio of approximately one four to one.
This quarter's bookings performance is highlighted by an agreement with Firstenergy Corporation for their New Jersey territory to provide our network and outcome solutions for Ams combined with great operations and data management <unk> as a key partner supporting Firstenergy efforts to modernize their distribution network.
Next an example of content expansion on top of an existing network footprint AEP, Ohio will be deploying our demand response offering to enhance the reliability of electricity services, especially during peak periods.
They also will be deploying our market, leading streetlight vision solution for the management and control of Street lights, and other smart city applications across the territory. Both solutions will give AEP greater control and drive operational savings in the management of their critical infrastructure assets.
And finally, we are pleased to announce a long term agreement with Malaysian utility <unk> Cisco Burkhardt for selecting <unk> network as a service offering for AMRI, which will enhance their analytical insights and improve their operational performance.
These are just a few examples of bookings that have driven our total ending backlog to a new record level of $4 1 billion and our 12 month backlog up to $1 7 billion, which is also a new record for the company.
Now turning to slide six I will provide some operational insights on the second quarter.
As is apparent from our bookings and backlog this quarter market demand continues to be strong for our solutions, particularly in the networks and outcomes segment most of our new bookings and backlog are based on our latest generation network enhanced by distributed intelligence. These are precisely the type of bookings we want as we continue to focus.
On higher valued network solutions that drive our analytics and software applications for the outcomes business.
While demand for our offerings is strong we continue to proactively prune non connected commoditized products to sharpen our R&D focus these decisions have reduced our device segment revenue by approximately $50 million year to date versus the prior year. While these actions do have near term.
On revenue, they focus and accelerate our growth into higher margin solutions and continuing to move towards a asset light manufacturing model.
Next I would like to give an update on our supply constraints semiconductor component supply continues to impact our business. We anticipated this impact would gate first half revenue reducing it.
While we continue to make progress on component supply constraints since our last call. The conditions, we anticipated for the second quarter and the level of improvement for the back half of the year have not yet materialized, particularly we are disappointed by persistent shortages associated with analog semi components, which gated our revenue in the second quarter.
Particularly for network solutions.
The second half improvements signaled by our suppliers earlier in the year have not emerged at a sufficient pace to meet our existing and consistently growing demand. We currently anticipate modest incremental improvement in components supply during the second half and easing constraints as we head into 2023.
We continue to take actions that are in our control such as product redesigns multi sourcing prudent efforts to secure supply through alternate channels and building additional inventory when appropriate and available.
Finally, I would like to give you some insight on the inflationary pressures and operational inefficiencies impacting our performance and the price cost actions, we are taking to offset them.
Our second quarter gross margin was impacted by increased input costs and factory inefficiencies due to uncertain and evolving component constraints. Some of these costs are temporal and will reduce as component supply and factory utilization improves structurally we have made strides in reducing manufacturing overhead streamlining our.
Operations and moving to a more asset light model over the last few years.
These continued efforts combined with our ongoing pricing actions will improve our margin performance towards our operating model as component supply availability improves.
Now I will hand off to Joan to cover our second quarter results and updated 2022 outlook in more detail.
Thank you Tom I will cover the second quarter results and then provide an update on our outlook for the full year.
As Tom just mentioned, our second quarter results continued to be impacted by component supply shortages and cost pressures.
Please turn to slide seven for a summary of consolidated GAAP results.
Second quarter revenue of $432 million declined 12% versus last year or 8% in constant currency.
The year over year decrease was due to supply shortages limiting our ability to meet customer demand, particularly in our networks segment.
Q2's revenue was gated by over $100 million similar to the Q1 impact.
Q2, gross margin was 29, 2%, a 140 basis points lower than last year due to higher component in manufacturing costs driven by the continued supply constraints slightly offset by the exit of lower margin devices product lines.
GAAP net loss of approximately $37 million or <unk> 82 per share compared with a loss of $33 million or <unk> 73 per share in the prior year.
Regarding non-GAAP metrics on slide eight non-GAAP operating income was $9 million adjusted EBITDA was $17 million non-GAAP net income for the quarter was $3 million or seven cents per diluted share.
Looking at revenue by business segment on slide nine device solutions revenue was $105 million of $43 million or 27% year over year decline on a constant currency basis.
Decrease was primarily due to exiting certain product lines, including the sale of our non communicating mechanical C&I gas business.
Network solutions revenue was 269 million, a $6 million or 2% year over year increase in constant currency as we ramped new deployments.
The year over year growth in networks was significantly reduced by the impact of the component shortages.
Revenue in the outcomes segment was $58 million 2 million, a 3% decrease in constant currency versus last year. The decline was due to lower product and software licenses.
The growth in our outcomes segment continues to be impacted by the decline in our European prepaid business and the delay of deployments in our network solutions business in North America.
Lastly, foreign currency changes resulted in $19 million lower revenue versus the prior year.
Moving to the non-GAAP year over year EPS Bridge on Slide 10, our Q2, non-GAAP EPS was <unk> <unk> per diluted share down 21 from the prior year.
Net operating performance had a negative <unk> 20 per share impact due to lower gross profit delivered by.
By the component shortages and higher input costs.
Lower interest expense resulted in a <unk> <unk> increase year over year and higher tax rate had a negative <unk> <unk> impact.
Turning to slides 11 through 13, I'll discuss the Q2 results by business segment compared with the prior year.
Device solutions revenue was $105 million with gross margin of 13% and operating margin of 5%.
Gross margin declined 550 basis points, primarily due to inflationary cost pressures.
Operating margin decreased 710 basis points due to the fall through of the lower gross profit.
Network solutions revenue was $269 million with gross margin of 33%.
Gross margin declined 280 basis points from the prior year due to the inflationary cost pressures and manufacturing inefficiencies related to component constraints.
Operating margin of 23% decreased 130 basis points due to the fall through of lower gross profit, partially offset by lower opex.
Outcomes revenue was $58 million with gross margin of 39% an increase of 50 basis points year over year. The increase was due to improved operational efficiencies within this segment outcome.
Outcomes operating margin was 16% 460 basis points lower than last year due to higher R&D investment.
Now turning to slide 14, I'll cover liquidity and debt free.
Free cash flow was $10 million in the second quarter compared with $64 million in the same period last year. The year over year decrease was primarily due to lower EBITDA and the timing of working capital.
Cash and equivalents at the end of the second quarter were $209 million gross debt remained flat at $460 million and net debt was 251 million net leverage is three eight times at the end of Q2.
Now turning to the full year 2020 to outlook on slide 15.
Our original 2022 guidance provided last February assumed a significant improvement in the availability of components supply in the second half of the year.
Unfortunately, the component environment remains heavily constrained, which will continue to limit our revenue in the back half of this year. Our updated outlook reflects this latest view of supply.
We now anticipate full year 2022 revenue in a range of $1 85 to $1 $9 billion versus the two point or the $2 1 billion. We provided in February .
Earnings will also be negatively impacted by the fall through of the lower revenue as well as continued inflationary cost and anticipated factory inefficiencies.
This results in a non-GAAP EPS outlook range of 70% to 90 per diluted share versus previous guidance of $1 25 to $1 75 per share.
This updated outlook assumes approximately $45 3 million average shares outstanding for the full year.
We are assuming a euro to U S dollar foreign currency exchange rate of one point or six in the second half of the year and a full year non-GAAP effective tax rate of approximately 30%.
While we are very disappointed that component constraints are continuing longer than expected, we anticipate that the supply situation will start to improve by the end of this year. We will continue working with our customers to realign their deployment schedules and as supply availability begins to improve we will gradually start fulfilling the deferred demand.
Now I'll turn the call back to Tom.
Thank you Joan.
As we discussed the demand for our solutions is at record levels. We are disappointed at the pace of improvements and component supply during the first half and now expect constraints to persist during the second half with modest improvements by the end of the year and then easing into 2023.
We have not seen customer cancellations, nor do we expect any as our growing backlog is a resilient against these constraints and other macroeconomic slowdowns. We continue to work closely with our customers to provide the best visibility possible and to align project schedules.
Turning to slide 16, I would like to close the call by highlighting our new ESG and proven benefits reports, we published in June our ESG program is embedded in the DNA of our products and services that support sustainability diversity and accountability of our key stakeholders.
Our solutions directly reduce risk drive efficiencies reduce emissions and assistant managing consumer demand, we continue to develop solutions that enable our customers to improve sustainability and conservation.
Our dedication to creating a more resourceful world has significant motivation for the entire company as our products and services will not only benefit us today, but for future generations.
Thank you for joining today operator, please open the line for some questions.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad.
We are using a speakerphone. Please make sure that your mute function is turned out to lay your signal to reach our equipment. Once again that is star one to.
To ask a question and we'll take our first question from Noah Kaye. Please go ahead with Oppenheimer. Please go ahead.
Caller. Please check your mute function, we're unable to hear you.
Hello can you hear us.
Hi.
And I wasn't here.
Thanks.
Put me back in the queue sorry.
Thank you we'll take our next question from Jeff Osborne with Cowen <unk> Company. Please go ahead.
Hey, good morning, guys. So just wanted to dig into the analog semiconductor supply issue I was wondering what youre hearing from your suppliers around additional capacity and.
Locking that in or potential product redesign do you have any dates in mind as we look out into 2023.
When youre getting more assurances that youll have more reliable supply.
The outlook that we get from suppliers today is for gradual improvement through the back half of the year and indeed, that's what you heard us talk about in terms of setting our outlook for the year, It's a combination of redesigns and multi sourcing on our side.
Plus some incremental capacity improvements that suppliers are putting in place.
And then there is also a little bit of falloff in demand and in other areas certainly that's not what we see in our sector. Our demand is very very strong.
But other areas of their portfolio tend to fall off which makes room for some of the other component.
That we want to put our hands on.
In the second quarter, there definitely was some impacts associated with the shutdowns in China that impacted some of the near term things and added some instability into into the mix in the short run, but the longer term trends for improvement are in place and indeed, that's what we see from our suppliers is.
Well.
Got it that's good to hear two other quick ones.
First in any energy in New Jersey, great to see the progress there I think they're Ohio territories recently Paul.
Case for metering have you been sort of primary firstenergy partner on Ami Rollouts historically in other other jurisdictions beyond New Jersey.
Firstenergy is a longtime broad customer of ours, and we would absolutely anticipate working with them in other territories as well as you know we don't put anything in backlog on our side until two things happen. One is it signed customer contracts that.
Others is regulatory approval and.
And that's what gives us real confidence in terms of what our backlog will look like and resiliency against other macroeconomic forces. So I would look for us to continue to support Firstenergy.
In a broad sense.
Got it my last one for you just in particular on the outcome side I think it's been a bit slower to evolve and both myself and investors are expected.
I'm trying to get a bridge to that is it mainly just the slower pace of network Rollouts occurring that then impacts the timing of license revenue recognition.
Or is it more of a.
Some other issue on the competitive dynamic can you just walk through in particular, the outcomes piece and what for sure on there in terms of the growth trajectory.
Yes happy to do so a good question and in your preface there you really nailed it is.
The timing of deployments in general what we see from our customers is when they.
Set up a new project and new network. It takes a little while to get that installation done get it stabilized get everything integrated into their back office solution and Thats when they started adding in incremental applications from our point of view and services. So as we have seen some slowdowns in the network side of things.
Initially just cope it rollout and then some regulatory delays, which have long since passed but still rippling through given the long tail of how our customers operate and now some component supplies that has sort of pushed things out that said underneath the covers all of the right conversations are going on with customers.
We see real hunger for.
More agility in terms of how they use their assets given volatility in the world today.
And plenty of good discussions with our customers that we believe in a long term very bright future for our outcomes business.
That's great to hear Tom Thanks for the clarity I appreciate it.
Sure. Thanks, Jeff.
Our next question from Ben <unk> with Baird. Please go ahead.
Hey, good morning.
Good morning.
So just going to give a bell.
The supply chain.
Constraints are alleviated.
And so next year.
I think Joe you said.
When you talked about guidance, how do we expect the ramp is.
Is it.
We will catch up were.
Like a big ramp up or is it kind of a gradual ramp when those constraints.
A follow up.
Yes, our expectation is it is more of a gradual ramp a number of factors come into play obviously first of all you need the component supply to become available and Thats, primarily in the hands of our suppliers, we would need obviously the production capacity to be able to to catch up and to support our customers and then of course, our customers need.
Installation capacity, so the timing of their deployments and as the impact of supply constraints has gotten bigger and bigger it's harder to catch that up very quickly. So our view is it's not in any way a snapback recovery. It is a more.
A gradual recovery once the supply chain normalizes.
Thank you.
And then.
I think you said this Tom in the prepared remarks about the backlog and.
Gross but any change in customer.
Decisions, but has it impacted any.
Future deals.
Hum.
But I'll go with talks with people worried about your constraints. So what you can deliver.
Sure.
So in terms of the backlog in place today as you correctly stated no cancellations or any concerns around that side customers are.
Are eager to get the product and of course, we're eager to get to to deliver it as soon as we can put our hands on the proper components relative to new deal flow no. We have not seen any changes in customer behavior on that front clearly, there's there's conversations around what the supply chain recovery looks like but generally the.
The cycle for customers to go through regulatory approval and begin projects, where beyond the horizon of what.
Is on deck in terms of the supply recovery. So customers are thinking about obviously the order in which they do projects based on their particular business outlook, but no change due to to supply on our side. The hunger for the technology is very real very strong and in any.
Way all of the volatility in the world today, only makes the things that we do more valuable for our customers.
Just one housekeeping.
On the device side, how do we think about I know back at Analyst day, you talked about decline.
Exit some of the business.
And well go down I think it was like mid single digits or something like that how do we think about the sales that you've done so far just as we head into next year. Just so we can calibrate correctly with top line. Thanks.
Okay.
Yes. So if you if you think about.
The sale that we announced back in I guess in the fourth quarter.
The mechanical C&I gas business that business was roughly $100 million annual business. So we only owned it for for two months of this year. So that gives you quite a big impact in terms of year over year. In addition to that sale, we have been actively pruning and exiting certain businesses that just didn't have that origin profile that we were looking for so.
If you look at even whether you look at the quarter or year to date devices is down pretty significantly year over year. If you take FX out which is fairly sizable for them. It's really a function of the sale of the business and the exiting of those businesses. So the run rate for this year is more appropriate for next year as opposed to any kind of historical.
Number for devices.
Thank you.
Thank you we'll take our next question from Kashi Harrison with Piper Sandler.
Good morning, and thank you for taking my questions.
So just maybe.
A strategic one.
You indicated that China had an adverse impact on the business this quarter given the lockdowns.
China, they seem pretty committed to the whole zero Covid policy and it feels like every iteration of Covid, just keeps getting more and more infections, which suggest that another shutdown is unfortunately, a matter of when and not if and so.
My question is.
Is there any way to diversify their supply chain away from China or is that just basically impossible.
I think there's two parts to the question that you ask there is our direct supply we've diversified away from China.
Pretty dramatically it is our supplier supply chain deeper into the cycle, which is which was what we saw an impact from in Q2, So think lead frames for semiconductors.
Not the semi directly that we buy.
Is that diversification that you talked about ongoing absolutely. It is and that is part of a lot of long term semiconductor trends some of which are even in the news from a government stimulus point of view is really all about.
That absolutely will take a bit of time for our suppliers to adapt things.
I do expect that.
It does even out over time.
But it is a little bit lumpy as that work is ongoing.
Thank you.
My follow up question.
<unk>.
My next question.
The inflation reduction that was announced a few a few weeks a few weeks ago.
Just or maybe it was last week, it's been a long earnings season.
But.
Can you maybe discuss any impact.
Any potential impact to your business any thoughts from reading the bill any upside as you as you look over the next.
Several years, if this bill becomes law.
Sure So I think that.
Theres been a number of pieces of legislation some signed in some some still in process.
Read directly on the products that we have so.
If I start with a <unk>.
Good resiliency in water infrastructure clearly are places that we are involved in.
And something that's really helpful for us.
<unk> also had some EV investments switch.
We indirectly participate in and certainly this latest bill that's still in the throes of working its way through the inflation reduction Act that you mentioned.
Some significant investments in.
Clean energy, which we read on and.
Probably the most interesting part of this recent pieces is the boost on Evs.
The load on the grid from from EV growth is far outstripping.
The infrastructure is capable of doing in most any conversation that we have with customers or any of the third party studies that are out there. So is the amount of investment in the distribution grid because of the growth in Evs thats projected over the next decade or two.
Many many hundreds of billions of dollars no matter, how you look at it. So that is something that is exciting for us to be a part of and something that we will work hard to support our customers through whether it is driven by by government investment or just driven by consumer.
<unk>, it's going to read on the products that we provide for our customers.
Thank you.
Thank you we'll take our next question from Graham price with Raymond James.
Hi, good morning, Thanks for taking the questions.
So I guess first off looking at the revised revenue guidance.
Just wanted to see what is the embedded assumption there on a full year impact from the component shortages.
I believe previously you had said it was.
Your expectation was $200 million for the full year, but it looks like we've already reached that mark.
Yes, let me take that so if I think about the revenue guidance.
The reason the revenue guidance came down is entirely due to the supply situation. So when we gave the original guidance as you indicated.
Got a couple hundred million dollars in the first half and then things would recover drastically in the second half and unfortunately that hasnt happened. So it will clearly be bigger than the 200 million. So Q1, and Q2 were both over $200 million. Each so above 200 year to date as we talked about in the script, we expect it to get gradually better.
Q3, and Q4, so each quarter, a little bit better and as we enter 2003, we continue to be.
Expecting that things will improve so it will be.
Really quite different than we expected and Thats really the reason for the decline. If you look at first half versus second half implied by kind of the midpoint of the guidance.
And there is about 7% growth and to the earlier comment Ben had about devices. The growth from first half second half is not devices, it's really networks and outcomes networks is the segment most constrained by the supply so as that continues to gradually improve youll see networks pickup so hopefully that addresses your quest.
<unk>.
Got it.
Clear.
And then I guess as my follow up.
It looks like both R&D and G&A costs dropped quite a bit.
From Q1 to Q2 should.
Should we assume that this lower run rate continues.
Theres always going to be some timing issues. When you when you think about Opex in general our target for Opex long term continues to be kind of 22%, 23% revenue, but obviously the revenue has been heavily constrained and we continue to control discretionary spending, but we're not going to do anything shortsighted here in a knee jerk react.
<unk> to the current supply shortages, because it's temporary and it will improve over time.
Our expectation for the year is our opex will be pretty close in the second half to what it is in the first half and if you look at that for the full year will be slightly below what we spent last year.
Got it thank you very much.
Thank you and once again, if you'd like to ask a question. Please signify pressing star one.
Take our next question from Thomas Jonsson with Morgan Stanley .
Alright, Thanks Quest.
Question on the 12 month backlog number obviously $1 7 billion very strong it does imply.
Reasonable bear case scenario for 2023, just with what's already booked so it would be helpful for us to take you through the risk profile of 23.
Just to kind of give us an overview of what type of improvement.
The supply chain to get to that 12 month backlog.
Or is that just current scheduling and there could be shifts from that thanks.
Sure.
The $1 7 billion.
12 month backlog really is the true demand picture that is in place today, obviously the rollout of that.
And transition if you will into revenue is dependent on the component supply.
As we have signaled we think is component supply is going to get modestly better sequentially yet in the back half of the year compared to first and then components.
Constraints tend to ease into 2023, the exact profile of that.
<unk> is really what is still ahead of us so it's a little early to talk about.
The details of what 2023 would look like other than the <unk>.
Demand picture is extremely strong and.
We're pleased with.
With the response of our customers, we're going to work as closely with customers and obviously suppliers.
As aggressively as we can to transition that backlog into revenue.
Okay.
Thanks, that's very helpful and one more on the backlog just given prior quarter comments on going out to customers or with long term contracts.
<unk> willingness to possibly revise some pricing on some of those longer dated on track I guess of the $1. Seven can you give us a sense of how much of that was price call.
Call it prior to the second half of 2021.
The backlog itself constantly profiles and rolls through the way to think about it is the total backlog. If you will that $4 $1 billion is roughly about a four year period with $1 seven of it in the.
In the first 12 months, that's roughly the profile.
You'd have to look at the turnover, we have and re profile at all the way through since.
2021 time frame, we've obviously been indexing contracts been working hard too.
Reprice as much of the existing backlog as we can but that is.
And ongoing process that we would have so I would look at or near term turnover and use that to profile. It through knowing that it's about a four year cycle to get all the way through the backlog yes.
Overall I think.
Question around margin I would say for this year built into our guidance is an assumption that the given the margin pressures in the inflation pressures in the <unk>.
Takes a while to get the pricing through that our assumption is that our margin is going to end the year pretty similar to what the first half.
As a percent.
Understood.
Thanks for the thoughtful response.
Thank you.
From Noah Kaye with Oppenheimer.
Thanks, so much.
Talking about it a bit today, but I wanted to ask you a question that's been coming up.
And some of our discussions with companies, it's really around operational continuity and mitigation planning in Europe .
We could be heading into a very tough winter in terms of the energy supply. There. So I guess, how are you thinking about that any concerns.
We should be thinking about either for you or frankly for the utility customers that.
May have their hands full dealing with that.
Good question certainly.
<unk> of our business in Europe tends to be turns based business. So it is less present in the backlog and what we do in North America. For example, given the divestiture that we did last year most of what we do in Europe now predominantly tends to be on the water side of things water has been a bit more stable.
Our electricity and gas activities, we have seen and Joan referenced this in her earlier comments some slowdown in the prepaid world given.
Some of the energy prices and people are making decisions based on on affordability overall, but.
We think that.
Watching out for turns based business is something that is prudent for us to do in in the European Theater.
The interest for our customers in energy efficiency solutions and ways that they can better help their consumers has increased because of this so that would be perhaps the silver lining in ways. We will continue to support our customers going forward, but water being less affected which is a bigger piece of what we do.
Okay Perfect and then can you just talk a little bit about wallet share trends.
You continue to.
You can provide any metrics and kpis for managed endpoint the endpoints, but.
Yes.
There are the wallet share trends per end point at this point are you seeing any inflection.
If so kind of with what applications that.
That you would call out.
Yes.
We definitely see increasing interest in distributed intelligence. So this notion of being able to download applications into two an endpoint how.
How people are using that capability is a mix of grid side activities. So looking for.
Detection or rooftop solar behind the meter battery detection to help them understand distributed energy resource management.
The opportunities we definitely see.
Pretty significant uptick in demand response interest.
As the cost of peaks in the grid with energy prices, where they are is is increasing dramatically.
<unk> is another area with increased interest both of those tend to.
Help us on both the network and the outcome side and that is indeed reflected in the backlog.
A bit of time as I mentioned earlier for that to roll through from from backlog into operation, but those are the areas of key interest on the part of our customers.
Great maybe if I could sneak in one more.
In prior call you commented on book to Bill exceeding.
Or at least being one for the year.
I guess, just with the guidance cut on revenues, presumably that's more than.
One to one book to Bill.
Just any expectations on maybe where we exit the year in terms of the book to Bill and.
And how the backlog looks and exiting.
Thank you Cynthia.
Good good question the pipeline of opportunities that we have continues to be very rich.
The customers.
Are keenly interested in the types of solutions, we provide as it reads directly on the things that they are struggling with in their operations.
Have not seen bookings.
Being impacted based on near term component availability issues.
And as a result, the book to Bill numbers ought to continue to be strong for US. Okay. You could always have some lumpiness quarter to quarter, but we are definitely looking for.
A good bookings year, yes, I mean, if you look at where we are year to date.
113 to one in the first half so.
Certainly what we'd hoped to be above one for the full year, but as Tom said there is some lumpiness in there, but there's lots of things in the pipeline were optimistic about.
Okay perfect. Thanks, so much for taking the questions.
Okay.
Thank you and that does conclude today's question and answer session I would now like to turn the conference back over to Mr. <unk> for any additional or closing remarks.
Well I, thank everyone for joining us today truly appreciate it and we look forward to updating you in the next couple of months. Thanks all.
Thank you and that does conclude today's conference. We thank you all for your participation.
Also there will be an audio replay of today's conference available. This afternoon, you can access the audio replay by dialing one 880 820.
031112, or one 790 45780 with the passcode of $5 69 to nine two we go through the company's website at Www <unk>.
Thank you.
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