Ciena Corporation. (NYSE:CIEN) Q3 2019 Results Earnings Conference Call September 5, 2019 8:30 AM ET
Gregg Lampf - Vice President, Investor Relations
Gary Smith - President and Chief Executive Officer
Jim Moylan - Chief Financial Officer
Scott McFeely - Senior Vice President, Global Products and Services
- Gregg Lampf - 投资者关系副总裁
- Gary Smith - 总裁兼首席执行官
- Jim Moylan - 首席财务官
- Scott McFeely - 全球产品和服务高级副总裁
George Notter - Jefferies
Paul Silverstein - Cowen
Simon Leopold - Raymond James
Rod Hall - Goldman Sachs
Tejas Venkatesh - UBS
Michael Genovese - MKM Partners
Jeff Kvaal - Nomura Instinet
John Marchetti - Stifel
Samik Chatterjee - JPMorgan
Tim Long - Barclays
Jim Suva - Citi
Meta Marshall - Morgan Stanley
Alex Henderson - Needham
Tim Savageaux - Northland Capital
Ryan Koontz - Rosenblatt Securities
- 乔治诺特 - 杰弗里斯
- 保罗西尔弗斯坦 - 考恩
- 西蒙利奥波德 - 雷蒙德詹姆斯
- 罗德霍尔 - 高盛
- Tejas Venkatesh - 瑞银
- Michael Genovese - MKM Partners
- Jeff Kvaal - Nomura Instinet
- John Marchetti - Stifel
- Samik Chatterjee - 摩根大通
- 蒂姆朗 - 巴克莱
- 吉姆苏瓦 - 花旗
- Meta Marshall - 摩根士丹利
- 亚历克斯亨德森 - 李约瑟
- Tim Savageaux - 北国首都
- Ryan Koontz - Rosenblatt证券
Good morning. My name is Sharon and I will be your conference operator today. At this time, I would like to welcome everyone to the Ciena Fiscal Third Quarter 2019 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you.
Mr. Gregg Lampf, Vice President of Investor Relations, you may begin your conference.
早上好。 我叫Sharon，今天我将成为您的会议运营商。 在这个时候，我想欢迎大家参加2019年Ciena财政第三季度财务业绩电话会议。 所有线路都已静音以防止任何背景噪音。 在发言者的发言之后，会有一个问答环节。 [操作员说明]。 谢谢。
Thank you, Sharon. Good morning and welcome to Ciena's 2019 fiscal third quarter review. With me today is Gary Smith, President and CEO; and Jim Moylan, CFO. Scott McFeely, our Senior Vice President of Global Products and Services will join us for the Q&A portion of today's call.
In addition to this call and the press release, we have posted to the Investors section of our website an accompanying investor presentation that reflects this discussion as well as certain highlighted items from the quarter. Our comments today speak to our fiscal third quarter financial performance, our current view of the market environment and our industry position, as well as our guidance for the fiscal fourth quarter and some commentary around fiscal 2020.
Before turning the call over to Gary, I will remind you that during this call we will be making certain forward-looking statements. Such statements including our guidance and any commentary about our long-term financial targets are based on current expectations, forecast and assumptions regarding the company and its markets that include risks and uncertainties that could cause actual results to differ materially from the statements discussed today.
These statements should be viewed in the context of the risk factors detailed on our most recent 10-Q filing and in our upcoming 10-Q filing, which is required to be filed with the SEC by September 12, and we expect to file by that date.
Today's discussion also includes certain adjusted or non-GAAP measures of Ciena's results of operations. A detailed reconciliation of these non-GAAP measures to our GAAP results is included in today's press release. Ciena assumes no obligation to update the information discussed in this conference call whether as a result of new information, future events or otherwise.
With that, I will turn the call over to Gary.
谢谢，沙龙。早上好，欢迎来到Ciena的2019财年第三季度审核。今天和我在一起的是总裁兼首席执行官Gary Smith;和首席财务官Jim Moylan。我们的全球产品和服务高级副总裁Scott McFeely将与我们一起参加今天电话会议的问答部分。
Thanks, Gregg, and good morning, everyone. Today we reported a very strong quarterly performance, as we gained benefit from our strong competitive position within the industry and continue to gain market share.
Third quarter revenue was up 17% year-over-year and more than 10% sequentially. North America contributed significantly in the quarter including from service providers and our web-scale customers. And in fact for the first time ever, our top customer in the quarter was a web-scale company, followed closely by Tier-1 service provider.
EMEA also had a strong performance in Q3, up nearly 50% sequentially largely on the strength of our web-scale business even as some of our more recent service provider design wins have yet to ramp in EMEA.
In addition to meaningfully outpacing market growth from a revenue standpoint so far in fiscal 2019, recall that as we entered the year we indicated that we would significantly increase profitability this year and beyond.
In Q3, we performed extremely well on measures of profitability, including 16.2% adjusted operating margin and adjusted earnings per share of $0.71. Our consistent and differentiated financial performance continues to essentially be driven by outstanding execution of our strategy, as well as a solid overall demand environment and favorable industry dynamics.
Specifically, we continue to diversify our business across geographies and customer segments. As an example of this in Q3, our top 10 customers were comprised of three web-scale companies, three North American service providers, two international service providers, one MSO and one wholesale network provider.
Importantly, we also continue to have the most compelling portfolio today and the most credible and robust roadmap for future development, made possible by our considerable investment capacity, capability and vertical integration.
We are the strongest offering in the market today for Coherent optics. This was recently recognized by analyst firm IHS Markit its 2019 network hardware vendor scorecard report, in which Ciena secured the highest overall global score.
During the quarter, in a vote of confidence of our ability to be first-to-market and well ahead of the competition with single wavelength 800 gig systems, we booked our first orders for our WaveLogic 5 powered 65000 platform with a large subsea customer in the Asia-Pacific region.
Importantly, I would highlight that our degree of vertical integration means that we are not beholden to the merchant market and its delivery dates. Rather, we are in full control of our own development timelines. Also in optical during the quarter, our momentum continued with Tier 1 service providers including a sizable award for a 400 gig metro optical architecture with a large North American customer. And we also won a new Metro in long-haul build with the Tier 1 MSO.
With respect to packet networking, our continued investment in this portfolio to introduce new features and functionality is driving new business. In the third quarter, we landed a significant packet win with a Tier 1 service provider customer in North America. We also secured a design win in EMEA with a Tier 1 service provider.
在本季度，我们对首次进入市场并远远领先于单波长800 gig系统的竞争能力充满信心，我们订购了WaveLogic 5动力65000平台的首批订单，其中包括大型海底客户亚太地区。
With this momentum, we are expecting a strong finish to the year for our overall Packet Networking portfolio. Our Blue Planet portfolio also continues to evolve the mature drawing increased customer engagement. In fact, we recently solidified a new win with a service provider in the APAC region for the entire suite of Blue Planet Intelligent Automation Software Solutions.
And overall, I would say that our automation software portfolio continues to grind traction globally, and in fact, we remain on track to deliver on our FY 2019 revenue target of between $50 million and $60 million.
In summary, our ability to deliver the industry's leading innovation, while diversifying our business and leveraging our global scale is the foundation of our success. Our strong market and technology position and continued execution of our strategy is enabling us to deliver extraordinary financial performance and drive continued share gains.
Customers continue to pursue a flight to quality, with vendors who offer leading innovation and engagement models, and those with the financial strength and stability to deliver consistently now and into the future. We meet those stringent requirements, and we are confident that Ciena is the strongest long term partner to customers around the world. Today's quarterly results are testament to that competitive advantage.
With that, Jim will take us through the Q3 results and our outlook. Jim?
凭借这一势头，我们预计我们的整体分组网络产品组合将在今年取得强劲的成绩。我们的Blue Planet产品组合也不断发展成熟的图纸，增加了客户参与度。事实上，我们最近与亚太地区的服务提供商一起为整个Blue Planet智能自动化软件解决方案套件赢得了新的胜利。
Thanks, Gary. Good morning, everyone. We delivered a very strong top line performance in Q3 with revenue of $960.6 million representing 17.3% growth year-over-year. Of note in the third quarter, non-telco revenue was 41%. This includes customers like web-scale, MSOs, government and enterprise, and demonstrates the continued diversification Gary spoke about earlier.
With respect to web-scale as a standalone customer segment, Direct Web, we did 27% of total revenue in the quarter. Our year-to-date order flow is strong and exceeds our year-to-date revenue. As expected, after incredibly strong bookings in Q2, our orders moderated somewhat in Q3, and came in under revenue for the quarter.
Moving to gross margin, our Q3 adjusted gross margin was 44.7% reflecting the benefit of a stronger than expected product and geographic mix in the quarter. Q3 adjusted operating expense was $273.2 million. With respect to profitability measures, which have been a focus for us as Gary mentioned, we delivered strong results in the third quarter, including adjusted operating margin of 16.2%, adjusted net income of $112.3 million and adjusted EPS of $0.71.
In addition, in Q3, our adjusted EBITDA was $178 million and cash from operations was $83.1 million. We ended the quarter with approximately $843 million in cash and investments.
Finally, we continue to execute on our share buyback plans. In the third quarter, we repurchased approximately 1.1 million shares for $45.4 million and remain on track to buyback approximately $150 million in share value by the end of fiscal 2019.
Looking ahead, in fiscal fourth quarter 2019 we aim to deliver revenue in a range of $945 million to $975 million. Adjusted gross margin in a range of 42% to 43% and operating expense in the fourth quarter to be approximately $275 million.
In closing, we posted exceptional third quarter results today by continuing to execute on our strategy of delivering the industry’s leading innovation while diversifying our business and leveraging our global scale. Combined with our Q4 outlook, fiscal 2019 will be an extraordinary year for CNN, marked by significant market share gains as we advance our competitive position and drive double digit revenue growth and increased profitability.
Considering that expected annual performance this year, we believe it's important to comment at a high level and somewhat earlier than usual on our current views of fiscal 2020. We have never been more confident of our ability to continue taking market share and we expect to grow revenue next year at a rate of roughly double that of current expectations for market growth, which is in the low single digits.
That performance would be consistent with current consensus revenue expectations for 2020. Additionally, we expect to achieve new operational efficiencies and additional leverage as a result of several actions we've taken during the last 12 months to 18 months that will positively impact the business. As a result, we have increased confidence in our ability to achieve our target 15% operating margin in fiscal 2020 and drive meaningful EPS growth.
We will provide additional detail on fiscal 2020 during our fourth quarter earnings call in December.
With that operator, we'll now take questions from the sell-side analysts.
[Operator Instructions]. Your first question comes from George Notter with Jefferies. Please go ahead.
[操作员说明]。 你的第一个问题来自George Notter和Jefferies。 请继续。
Hi, guys thanks very much, and congratulations on these terrific results. I guess, I wanted to start out Jim, maybe asking a question about gross margins. If I go back, you thought of the company is 42% to 43% gross margin business over the short and intermediate term as you guys were taking footprint and the obviously the gross margin result was much better here 44.7%. I think you guys had a positive surprise last quarter as well of course, but it seems you guys are still adding footprint. So what do you think about gross margins now, is this sort of the new norm for you guys even in a mode where you're taking footprint, and tell us what's going on in the margin side? Thanks.
嗨，大家非常感谢，并祝贺这些可怕的结果。 我想，我想开始吉姆，也许会问一个关于毛利率的问题。 如果我回去，你会想到公司在短期和中期内的毛利率为42％至43％，因为你们正在占据足迹，显然毛利率结果好得多44.7％。 我认为你们上个季度也有一个积极的惊喜，但是看起来你们还在增加足迹。 那么你现在对毛利率的看法是什么，对于你们来说这是一种新的规范，即使是在你正在占据足迹的模式中，并告诉我们在保证金方面发生了什么？ 谢谢。
As we've always said George that there are a lot of variables that impact our gross margin, new deals sometimes will give credits to customers for big new deals and sometimes those hit our results and sometimes they don't. And so that's something that it's hard to call exactly when they're going to hit. As a result of those kinds of variables, we have shown some volatility in our gross margins has moved from 41% to 44.7% over the past six quarters.
I believe that right now we're in a 42% to 43% range. We certainly haven't given up on getting into the mid-40s. I don't know exactly when that's going to be. I don't think it's going to be next year, but I would say that we're going to post significant profitability this year and next year really at this range of gross margins.
由于我们总是说乔治有很多变数影响我们的毛利率，新的交易有时会给客户提供大额新交易的信贷，有时候那些会影响我们的结果，有时却不会。 因此，当他们要击中时，很难准确地称呼它。 由于存在这些变量，我们发现在过去六个季度中，我们的毛利率波动率从41％上升至44.7％。
我相信现在我们处于42％到43％的范围内。 我们当然还没有放弃进入40年代中期。 我不知道具体到底是什么时候。 我认为明年不会这样，但我会说，今年和明年我们将实现显着的盈利能力，实际上是在这个毛利率范围内。
Got it. And then just as a follow up, I guess, I also wanted to ask about customer attitudes, you guys have talked about taking market share, but I’m curious about customer attitudes around Huawei. Historically, they've been ever present. I think in the international side of your business, and I think historically they've been pretty disruptive on industry profitability, but do you see things changing there, are they getting invited to RFPS, do you see them competing with you on new business or is that changing given you know the security issues that are out there?
得到它了。 然后，作为一个跟进，我想，我也想询问客户的态度，你们谈到了占有市场份额，但我对客户对华为的态度感到好奇。 从历史上看，他们一直在场。 我认为在您的业务的国际方面，我认为他们在行业盈利能力方面一直非常具有破坏性，但您是否看到事情在那里发生变化，他们是否被邀请参加RFPS，您是否看到他们在新业务上与您竞争或 如果您知道那里的安全问题，那会改变吗？
George, this is Gary. I think it depends very much on what region you're talking about and what country. I do think over the last couple of years you're seeing sort of a potential rebalancing of spend in the face of sort of overdependence on them. They've taken such a large market share. In telecom infrastructure generally, I think just from a market point of view, I think the rebalancing of that I think you're seeing now. It's really difficult to discern the impact on our business to date I would say no substantive impact to date. But we are in the infrastructure business, and that takes -- that takes time for decisions to roll through in terms of revenues. I think it is very geographically dependent, but overall, I would say that you know a lot of the international carriers are looking to reduce their dependence over time.
乔治，这是加里。 我认为这在很大程度上取决于你所谈论的地区和国家。 在过去的几年里，我确实认为，面对过度依赖，他们会看到一种潜在的支出再平衡。 他们占据了如此大的市场份额。 在电信基础设施方面，我认为从市场的角度来看，我认为重新平衡我认为你现在正在看到。 到目前为止，很难看出对我们业务的影响我认为迄今为止没有实质性的影响。 但我们处于基础设施业务中，这需要时间来决定在收入方面进行推广。 我认为这在地理上是非常依赖的，但总的来说，我会说你知道很多国际航空公司都在寻求减少他们对时间的依赖。
Next question comes from Paul Silverstein with Cowen.
I’ve got a lot of questions. I'll try to keep it to two or three. First off, Jim just to clarify, I’ve seen your slide deck you reiterated your 6% to 8% growth on the call a short time ago. You said double to single digit market growth rate. I trust you're still talking 6% to 8% for next year just to be clear for fiscal 2020 on revenue growth?
我有很多问题。 我会尽量保持两到三个。 首先，Jim只是为了澄清，我已经看到你的幻灯片，你在短时间内重申了6％到8％的增长率。 你说的是市场的双位数到单位数的增长率。 我相信你明年仍然会谈到6％到8％的收入，只是为了明确2020财年的收入增长？
Yes. Yeah, we also said that we think that the current consensus number is consistent with about where we're going to be.
Or you’re anticipating this. So when you say that you say that you're referring to growth or you're referring to the absolute dollar number given that this year is going to be a larger [Indiscernible] business?
The revenue dollar number.
The dollar number, okay.
What drove the gross margin upside in Q3?
You know we just expected to hit a couple of new deals affecting the quarter, and it just didn't hit the quarter. So, I'd say that's it in a nutshell. It's hard for us to call the number within a couple of percentage points.
你知道我们只是预计将会有一些影响本季度的新交易，但这并没有达到季度。 所以，我会说这就是简单的说法。 我们很难在几个百分点内拨打该号码。
But Jim, the translation of that will be your line credit to [Indiscernible] ratio was better because you didn't have those new deals?
Generally yes. Although the new deals can mean more than just commons. Well, we can have credits or other things that affect the capture of new deals.
一般是的。 虽然新的交易不仅仅意味着公地。 好吧，我们可以获得影响新交易捕获的信用或其他因素。
All right. I'll ask one last question out of respect for others on the call. With your 800 gig coming out into the year, you just announced your first customer. What are you factoring in in terms of the glide path for revenue? And to what extent does that prove to be meaningfully incremental and what time frame if you and Gary could comment on that?
行。 在电话会议上，我会问最后一个问题是出于对其他人的尊重。 随着您的800年演出即将到来，您刚刚宣布了您的第一个客户。 你在收入的下滑路径方面有什么考虑因素？ 如果你和加里可以对此进行评论，那么这在多大程度上证明是有意义的增量和时间框架？
The 800 bit….
Gary, I apologize before you respond, not just 800 gig narrowly defined, but also the greater reach you're going to have with 400 gig and the impact that's going to have on your service by the customers, not just from a direct web-scale standpoint. Thanks.
加里，我在你做出回应之前道歉，不仅仅是简单定义的800 gig，而且还有400 gig带来的更大影响以及客户对您的服务产生的影响，而不仅仅是来自直接的网络 - 规模立场。 谢谢。
Yes. I think Paul, Scott. I think that's what gives us the confidence to say we're going to continue to have extremely strong competitive position and grow significantly faster than the market. So that's sort of factored into the guide if you like and that's certainly part of that.
是。 我想保罗，斯科特。 我认为这使我们有信心说我们将继续拥有极强的竞争地位，并且比市场增长得更快。 如果你愿意，这就是指南中的因素，而这肯定是其中的一部分。
Next question comes from Simon Leopold with Raymond James.
下一个问题来自Simon Leopold和Raymond James。
Thanks. I'd like to just squeeze in quick clarification that, that hopefully for the benefit of all. Jim, when you talk about the 15% operating margin comfort for fiscal 2020, I just want to confirm that, that's the value you expect for the full year. Not a target you hope to achieve in one or two quarters for the year, but the net for all fiscal 2020.
谢谢。 我想快速澄清一下，希望为了所有人的利益。 吉姆，当你谈到2020财年15％的营业利润率时，我只想确认一下，这是你对全年的预期价值。 不是你希望在一年中的一到两个季度实现的目标，而是所有2020财年的净额。
That’s a full year number. Our first quarter is always sort of out of trend line and we don't get to a high gross operating margin in Q1, but we will make up for it in the subsequent quarters and we're certainly targeting 15% for next year.
Great. That's what I thought, just wanted to just make sure. And then in terms of the WaveLogic 5 introduction in 800 gig. I think there might be some confusion amongst some folks about how synonymous those two launches are. So just to confirm, you've talked about WaveLogic 5 coming out this year, does that also mean that the 800 gig features are available in calendar 2019 as well simultaneously?
大。 这就是我的想法，只是想确保。 然后在800 gig的WaveLogic 5中引入。 我想有些人可能会对这两次推出的同义词有些混淆。 所以，为了确认一下，你已经谈到了今年推出的WaveLogic 5，这是否也意味着2019日历中同时提供800 gig功能？
Yes so -- to try to clarify WaveLogic 5 is our brand for that generation of coherent optics, and specifically includes the -- capability and as I said we've made great progress since we talked to 90 days ago, and we remain confident about our target for the end of the year of that, and that would be in I think in customers hands in the form of products.
是的 - 试图澄清WaveLogic 5是我们这一代相干光学器件的品牌，具体包括 - 能力，正如我所说，自从我们90天前谈过以来，我们取得了很大的进步，我们仍然对 我们在今年年底的目标，这将是我认为在客户手中的产品形式。
Great. Thanks. And given the strength in EMEA, you did comment earlier about kind of the trends relative to Huawei, maybe if you could help double click in terms of some of the trending in EMEA. So we've talked about Deutsche Telekom, in the past. I guess I'd like a better understanding of how you see the drivers in that particular region given that there's maybe some relative slowness in terms of deployment of 5G in EMEA. How much of this is about single customer, how much of this is about data center interconnect, just to help us understand that trend, it's sustainability from the EMEA strength? Thank you.
大。 谢谢。 考虑到EMEA的优势，你之前就有关华为的趋势做了评论，也许你可以帮助双击欧洲，中东和非洲的一些趋势。 所以我们过去谈过德国电信。 我想我想更好地了解你如何看待该特定地区的司机，因为在EMEA中部署5G可能会有一些相对缓慢的问题。 这有多少是关于单个客户的，有多少关于数据中心互连，只是为了帮助我们了解这一趋势，它是EMEA实力的可持续性？ 谢谢。
Yes Simon, this is Gary. I think it's pretty broadly based in terms of the strength that we're seeing there. I would say that the revenue growth in Q3 was largely driven by the web-scale datacenter interconnect and the expansion of the data centers there, and we think, that's -- we think that's going to continue. We have a number of Tier 1 wins that really haven't got to know meaningful revenue and we expect that over the course of the next six to 12 months to come in.
So we actually feel quite bullish around the business in EMEA and I think, back to my earlier comments around sort of you know somewhat overdependence on Chinese vendors, I think that's particularly the case in Europe. And I do think that most of the major carriers are looking to reduce that dependency over time. And I think that's a positive dynamic for us. So we feel pretty bullish as we as we turn the year about Europe.
是西蒙，这是加里。 我认为这是基于我们在那里看到的实力的广泛基础。 我想说第三季度的收入增长很大程度上是由网络规模的数据中心互连和那里的数据中心的扩展推动的，我们认为，我们认为这将继续下去。 我们获得了一些真正无法获得有意义收入的一级赢，我们预计在接下来的六到十二个月内将会出现这种情况。
所以我们实际上对欧洲，中东和非洲地区的业务非常看好，我想，回到我早些时候的评论，你对中国供应商有点过分依赖，我认为在欧洲尤其如此。 我确实认为大多数主要运营商都希望随着时间的推移减少这种依赖性。 而且我认为这对我们来说是一个积极的动力。 所以我们感觉非常乐观，就像我们今年关于欧洲一样。
Your next question comes from Rod Hall with Goldman Sachs.
你的下一个问题来自Rod Hall和Goldman Sachs。
Hi guys. Thanks for the question. I wanted to start with the phasing of revenue this year, and then maybe talk a little bit about next year as well, so that the guide implies kind of flattish revenue as we look into Q4 and yet you've had very strong trends up through this stage. I just wanted to see whether what's maybe driving that sequential change or lack of change in revenue whether that is what you're seeing in enterprise and government, or is there some pause ahead of 800 gig. You know what just kind of help us understand why that guide is what it is in Q4, and realizing that this has been an extremely strong year in the middle part of the year.
And then I also kind of wanted to extend that into the next year, are we seeing some paths ahead of a 800 gig and would you therefore expect seasonality to be any different as we move into next year kind of help us understand how next year phases in terms of revenue in your minds. And then I got a follow up.
嗨，大家好。 谢谢你的提问。 我想从今年的收入阶段开始，然后可能会谈一谈明年的情况，因此，当我们调查第四季度时，指南意味着一种平淡的收入，但你已经有了非常强劲的趋势 这个阶段。 我只想知道是否可能推动顺序变化或收入变化不足，无论这是你在企业和政府中看到的，还是在800 gig之前有一些停顿。 你知道什么才能帮助我们理解为什么这个指南在第四季度是如此，并且意识到这是今年中期非常强劲的一年。
然后我还想把它延伸到明年，我们是否会看到800 gig之前的一些路径，因此我们预计季节性会有所不同，因为我们进入明年会帮助我们了解明年的阶段 就你的收入而言。 然后我得到了一个跟进。
Sure. First thing I'd say Rod is that with our guide for Q4, we will have posted assuming we hit it around 15% revenue growth this year, which is extraordinary after 10% last year. And we've always said that individual quarters can reflect ebbs and flows of orders, and customer actions and all that sort of thing. And so, I guess, I would emphasize that we're going to grow 15% this year not that our revenue for Q4 is flat to Q3. We also think that as we move into next year, we're going to go back to the long term range of revenue growth that we have said which is 6% to 8%.
So, and of course that's off of a much bigger base, and it's going to be at significantly increased profitability. So that's what I would emphasize here. With respect to the quarterly flows, we did have a particularly strong revenue quarter in Q1. It had to do with ebbs and flows frankly and certain customers wanted a lot of equipment early last year. We think that next year our quarterly flows are going to be more like what they've been traditionally.
And could you just answer – are you guys seeing pent up demand for 800 gig? Do you think that, you know if that product becomes available in volume, I'm assuming you still expect volume by the end of Q1 that you'd see some release of demand or how do you think that affects the revenue numbers especially as we move through the first couple of quarters?
你能回答一下吗 - 你们看到800美元的需求被压抑了吗？ 您是否认为，您知道该产品是否可以批量供货，我假设您仍然期望在第一季度末您会看到一些需求的释放，或者您认为这会如何影响收入数据，尤其是因为我们 走过前几个季度？
Hey Rod, it’s Scott. The way I look at this is, the demand for coherent optics from a port perspective continues to increase. The bandwidth demand continues to increase, and it's it gets served by the best state of the shelf technology that we have. People are not sitting there waiting for the next. They have needs for this bandwidth. And it's going very quickly from the factory into the network. So I don't see a pent up wait for 800 gig at all. I see continuing increase in bandwidth demand.
嘿罗德，这是斯科特。 我对此的看法是，从端口角度对相干光学器件的需求持续增加。 带宽需求持续增长，而且我们拥有的最佳架构技术可以满足需求。 人们不会坐在那里等待下一个。 他们需要这个带宽。 而且从工厂到网络的速度非常快。 所以我没有看到被压抑等待800演出。 我看到带宽需求不断增加。
Okay. And then just one more if I can, and then I'm done. I just wanted to check on the competitive environment in hyperscale and see whether you guys have seen, because you've seen such strength there. I mean it's an amazing performance there. And I'm wondering if some of these alternative 600 gig solutions just aren't gaining traction.
Can you just say kind of what's going on competitively, and whether you guys are kind of winning head-to-head with 400 gig solutions against that 600 gig that's out there, or is it anticipation 800 gig. You know what is -- kind of give us an update on what's going on with hyperscale right now?
好的。 如果可以的话，再多一个，然后我就完成了。 我只想查看超大规模的竞争环境，看看你们是否见过，因为你们已经看到了这样的实力。 我的意思是那里有一个惊人的表现。 而且我想知道这些替代600 gig解决方案中的一些是否没有获得牵引力。
你能说一下竞争对手的情况，你们是否有点与400 gig解决方案进行正面交锋，或者说是800 gig。 你知道什么是 - 现在给我们一个关于超大规模发生了什么的更新？
Yes, I would say that we're obviously having a very good year in web-scale. We've got a lot of long term projects and sort of good visibility into it. We think our market share is now greater than 50% globally. Market growth we think is about 12%. And we know, I think we've grown about 50% year-to-date, so we're clearly taking you know share and our competitive position continues to be very strong.
You know obviously there is the competition there, and we can expect to have no competition in that space, but you know a couple of things I would stress. We've established incumbency and embedded in their systems, and we have a great roadmap for them. And I think we're very confident around that continuing to be a very strategically important piece for us globally.
The other thing I would stress is, is our global reach is helping where we partner with a lot of these web-scale players in different world. And I think that's helping our competitive position.
是的，我会说我们显然在网络规模上度过了非常好的一年。 我们有很多长期项目，并且有很好的可见性。 我们认为我们的全球市场份额现已超过50％。 我们认为市场增长率约为12％。 我们知道，我认为我们今年迄今已经增长了约50％，因此我们显然已经让您了解了份额，我们的竞争地位仍然非常强劲。
你知道那里有竞争对手，我们可以期待在这个领域没有竞争，但你知道我会强调的一些事情。 我们已经建立了在线并嵌入他们的系统中，我们为他们制定了一个很好的路线图。 而且我认为我们对于继续成为全球战略重要部分非常有信心。
Okay great. Thank you.
Next question comes from Tejas Venkatesh with UBS.
Thank you. Given the changes in the 10% customers I wonder if you're able to share the specific percentages of your top customers. And then relatedly, did Verizon go below 10% and what does that mean on a go-forward basis?
谢谢。 鉴于10％客户的变化，我想知道您是否能够分享最佳客户的特定百分比。 然后相关地，Verizon是否低于10％，这意味着什么是前进的基础？
Yes. Actually AT&T for the first time in a long time was not a 10% customer. It was just under 10% and nobody should read anything into that except that we're growing in a bunch of customers and we're still doing very strongly with AT&T. So the other customer of course was Verizon, having a great year with Verizon. The percentages twelve -- you'll see it they are twelveish to 13ish sort of.
是。 实际上AT＆T很长一段时间以来第一次不是10％的客户。 它只有不到10％，没有人应该阅读任何内容，除了我们在一群客户中成长，我们仍然在与AT＆T做得非常强烈。 所以其他客户当然是Verizon，与Verizon度过了美好的一年。 百分比十二 - 你会发现它们是十二至三十三种。
Got it. Thank you, understood. And then I'd like to ask a follow up to your comments about fiscal 2020 revenue growth. There are of course a number of moving parts including – gig coming on, the strength of the pluggables and then the strength in packet. How are you thinking qualitatively about these puts and takes?
得到它了。 谢谢，明白了。 然后我想请你跟进你对2020财年收入增长的评论。 当然有许多活动部件包括 - 演出，可插拔的强度，然后包装的强度。 你如何定性地思考这些看跌期权？
While we talked about 800 gig, we’re going to be first in market with 800 gig, and that's important. I'd say that what's most important is that we show a most credible roadmap and customers believe that we're going to deliver on what we're saying and so 800 gig is going to be a part of our story next year. But as Scott said, really it's the growth of coherent demand that's going to drive our results more so. Well maybe not more so, but at least as much as the fact that we'll have 800 gig in market packet we're going to grow.
We said at the beginning of this year 8% to 10% was our three year growth rate. We're going to be around that this year maybe a little bit better. And then the other piece that we were asking about was…
虽然我们谈到800演出，但我们将成为市场上第一个800演出，这一点很重要。 我要说的是，最重要的是我们展示了一个最可靠的路线图，客户认为我们将会实现我们所说的内容，因此800 gig将成为我们明年故事的一部分。 但正如斯科特所说，真正的是连带需求的增长会更加推动我们的业绩。 好吧也许不是更多，但至少与我们将在市场包中拥有800演出的事实一样，我们将会增长。
我们在今年年初表示，8％到10％是我们三年的增长率。 今年我们可能会更好一点。 然后我们问的另一件事是......
Was asking about collectibles. And I’d say this, from a timing perspective in the market, our perspective is collectibles don't really become a material, a meaningful markets place until 2021. So it’s -- not really a big piece of our 2020 plan.
询问收藏品。 我要说的是，从市场的时间角度来看，我们的观点是收藏品直到2021年才真正成为一个物质，一个有意义的市场。所以它 - 并不是我们2020年计划中的一大部分。
Thank you Tejas.
Next question comes from Michael Genovese with MKM Partners.
下一个问题来自Michael Genovese和MKM Partners。
Great. Thanks very much. Can you talk about where we are in the 400 G telecom cycle in terms of both long haul and metro. How early or late are we in those rollouts?
大。 非常感谢。 您能谈谈我们在长途和地铁方面的400 G电信周期。 我们在推出的时间有多早或多晚？
I'll say this two ways. So 400 gig when you think about it, you know on the fiber side people have been using it as a cost per bit solution for a long time. What hasn't happened yet is 400 gig e-clients being the normalized interface into these things. When that happens, I think 400-gig around the world will be the dominant transmission site on the fiber side as well which we need to be able to carry it end-to-end transparently. That to me, everybody is very hyped about 800-gig versus 600-gig, but that to me is the real key with WaveLogic 5 technology, is we'll be able to carry the 400-gig signal everywhere in the world. And that will be a first -- that'll be absolutely a market differentiator. And so to ask your specific question, I think we're at the very early cycle because the clients haven't gotten there yet.
我会说这两种方式。 因此，当您考虑它时，400 gig，你知道在光纤方面，人们长期使用它作为每比特成本解决方案。 尚未发生的事情是400 gig e-clients是这些东西的标准化接口。 当发生这种情况时，我认为全球400-gig将成为光纤端的主要传输站点，我们需要能够透明地端到端地传输它。 对我而言，每个人都非常大肆宣传800-gig而不是600-gig，但对我来说这是WaveLogic 5技术的真正关键，我们能够在世界各地传送400-gig信号。 这将是第一次 - 这绝对是一个市场差异化因素。 所以要问你的具体问题，我认为我们处于非常早的周期，因为客户还没有到达那里。
Okay, great. And then, I want to ask a broader question just on the outlook here. Because basically, you beat the quarter, but didn't raise the outlook; but everything you're saying in the call makes a lot of sense and sounds very positive. I just want to sort of directly ask though, is there anything either macro-wise or company specific in the last quarter that makes you more cautious than before? Or is this just sort of a nice sort of conservative outlook that we're getting?
好，太棒了。 然后，我想就这里的前景问一个更广泛的问题。 因为基本上，你击败了这个季度，但没有提高前景; 但是你在电话中说的一切都很有意义，听起来非常积极。 我只是想直接问一下，在上个季度是否有任何宏观或公司特定的东西让你比以前更加谨慎？ 或者这只是我们得到的一种很好的保守观点？
I wouldn't say it's conservative. We try and give the best outlook that we can, you know the most accurate one that we see and pass that on. I think what you're saying is an extraordinary year. As Jim said, we've grown sort of 15% in a market that we think is really sort of growing 2% to 3% and we've been pretty consistent around that. So obviously trees don't grow to the sky and you're talking about much, much bigger numbers than we'd thought. We're kind of a year ahead of where we thought would be when we gave you sort of three-year guidance.
I think basically what we're saying is a return to more normalized growth. We're probably more confident than ever around two things; one, our ability to continue to take share globally. And number two, the operating leverage that we can get going forward. So, we actually think we're in a very strong position. We're not seeing anything. There's normal ebbs and flows on the macro side, but we're able to drive through that because of our diversification. You're seeing some slowness in places like India, some of which was anticipated. But I think the fact that we've now got a business of global scale that so well diversified that allows us to drive through these -- many of these issues.
我认为基本上我们所说的是恢复更加正常化的增长。我们可能比以往任何时候都更有信心两件事;一，我们继续在全球范围内分享的能力。第二，我们可以继续前进的运营杠杆。所以，我们实际上认为我们处于非常有利的地位。我们没有看到任何东西。宏观方面有正常的起伏，但由于我们的多元化，我们能够通过这种方式。你看到像印度这样的地方有些缓慢，其中一些是预料之中的。但我认为，我们现在已经拥有了一个全球规模的业务，这个业务如此多样化，使我们能够解决这些问题 - 其中许多问题。
And just to stay the obvious, our forward-looking statements are very consistent with what the world is expecting both for Q4 and for next year. So our guides are right where the market is. The one thing we've said is that our profitability next year is going to be very strong. And so our bottom-line performance is going to be very, very good next year.
只是为了保持显而易见，我们的前瞻性陈述与世界对第四季度和明年的期望非常一致。 所以我们的指南就在市场的正确位置。 我们所说的一件事是明年我们的盈利能力将非常强劲。 因此，明年我们的底线表现将非常非常好。
Thanks Scott, thanks very much.
Next question comes from Jeff Kvaal with Nomura Instinet. Please go ahead.
下一个问题来自Jeff Kvaal与Nomura Instinet。 请继续。
Thank you, gentlemen. I wanted to delve into, Jim, that last point about probability. But specifically on the gross margin side, I think traditionally we have been accustomed to periods of rapid revenue growth where the margins suffer or lag a little bit given the new deal that you're signing. And then, I guess I'm a little wondering why we wouldn't maybe break out that 42% to 43% range if the revenue growth starts to slow a little bit, I mean obviously off a great fiscal 2019. And shouldn't some of those new deals be maturing a little bit and therefore the margins maybe edging up a bit?
先生们，谢谢你们。 吉姆，我想深入研究关于概率的最后一点。 但特别是在毛利率方面，我认为传统上我们已经习惯了收入快速增长的时期，因为你签署的新协议会使利润受到影响或滞后一点。 然后，我想我有点想知道为什么如果收入增长开始放缓一点，我们不会突破42％到43％的范围，我的意思是显然是在2019年的一个伟大的财政年度。并且不应该 其中一些新交易正在成熟一点，因此利润可能略微上升？
Well, I'd say that, we certainly expect to get back to the 45% gross margin number. We're just thinking that it's not next year. All I can say about next year, in particular, and we haven't really got it for next year's gross margin. I don't think it's going to be at mid-40s level. The improvement in probability is really going to come from our actions that we've taken to transform our business. But that's what I'd say, it’s a mix question and by the way we're still developing our 2020 plan in detail, and so there's still work to be done. But we still feel good about being able to hit 15% operating margin next year.
好吧，我想说，我们当然希望能回到45％的毛利率。 我们只是认为明年不会这样。 特别是明年所有我可以说的，而且我们还没有真正得到明年的毛利率。 我不认为它会在40年代中期水平。 概率的提高实际上来自我们为改变业务所采取的行动。 但这就是我所说的，这是一个混合问题，而且我们仍然在详细制定我们的2020计划，所以仍有工作要做。 但我们仍然觉得明年可以达到15％的营业利润率。
Okay. And then secondly, would you mind just being as specific as you can about what we should be expecting for WaveLogic 5 timelines? When -- which products and customer hands and win through trials and win contributed to revenue? I just want to make sure we have all that laid out. Thank you.
好的。 然后，您是否会介意尽可能具体地了解我们对WaveLogic 5时间表的期望？ 何时 - 哪些产品和客户通过试验获胜并赢得了收入？ 我只是想确保我们已经完成了所有这些工作。 谢谢。
Yes. What we've said consistently is the target and we're confident with target that has product in customer's hands by the end of the year. The products that will -- it will instantiate on first will be Waveserver and on 6500. And we would expect that to ramp through the first quarter and start to be material revenue contributor after the first quarter.
是。 我们一直坚持的目标是我们的目标，我们对目标在年底之前拥有产品的目标充满信心。 它将首先实例化的产品将是Waveserver和6500.我们预计第一季度将会延续到第一季度并开始成为重要的收入贡献者。
Thank you all.
Next question comes from John Marchetti with Stifel.
Thanks very much. Gary, I was wondering if you could talk a little bit about the DCI strength in the European market. I'm curious if that's you know customers that traditionally haven't necessarily participated with you on the Webscale side or if it's more of the traditional set just sort of expanding into that market. Just curious, if you're seeing some new participants in there or if it's more of a geographic expansion with existing relationships?
非常感谢。 加里，我想知道你是否可以谈谈欧洲市场的DCI实力。 我很好奇，如果你知道那些传统上不一定与你一起参与网络规模的客户，或者更多的是传统的设备只是扩展到那个市场。 只是好奇，如果你在那里看到一些新的参与者，或者更多的是现有关系的地域扩张？
Well, I think for us, I think it's actually both, John. We're seeing some wins and what I would say would be the sort of smaller Webscale data center connectivity type folks. And we're also seeing some of the large global players that you know and love to get more aggressive into Europe as well. So I think it's a combination of both of those things. I think its pretty healthy market right now in Webscale space.
嗯，我认为对我们来说，我认为它实际上都是，约翰。 我们看到了一些胜利，我想说的是那种较小的Webscale数据中心连接类型的人。 而且我们也看到了一些你知道并且喜欢在欧洲更积极进取的大型全球玩家。 所以我认为这是两者的结合。 我认为它现在在Webscale领域非常健康。
And then if I can, just coming back to the 800-gig for a moment. Given the expectation obviously for some initial adoption particularly within the DCI market, and then you mention the subsea win. How do we think about that maybe moving into the Telco market as we go through fiscal 2020? You mentioned obviously that on the network side or the transport side you been seeing fairly decent uptake of 400-gig there. Curious, what your expectations are for 800, particularly on that Telco side as we look into next year?
然后，如果可以的话，回到800-gig一会儿。 鉴于对DCI市场的一些初步采用有明显的期望，然后你提到了海底胜利。 在我们进入2020财政年度时，我们如何考虑进入电信市场？ 你明确提到在网络方面或运输方面你已经看到相当不错的400-gig。 好奇，你对800的期望是什么，特别是在我们对明年的调查方面，特别是在电信方面？
Yes. Like every technology cycle the cost per bit is important to all of our customers and having your hands on this market leading technology gives you market leadership place and cost per bit. So no question, there'll be interest in service providers there as well. Maybe less so in terms of an application that uses 800 gig, but in other applications and we talked about one, when they're sort of offering 400 gig e or using 400 gig e as the service capability. They need to be able to transport that all over the network. And they're going to need technology, the WaveLogic 5 technology to do that.
是。 与每个技术周期一样，每位成本对我们所有客户都很重要，并且掌握这一市场领先技术可以为您提供市场领先地位和每比特成本。 毫无疑问，那里也会对服务提供商产生兴趣。 对于使用800 gig的应用程序而言可能更少，但在其他应用程序中我们谈到了一个，当他们提供400 gig e或使用400 gig e作为服务功能时。 他们需要能够通过网络传输。 他们需要技术，WaveLogic 5技术才能做到这一点。
Thank you, John.
Next question comes from Samik Chatterjee with JPMorgan.
Hi. Good morning. Thanks for taking my question. I just wanted to start off with seeing if you can help me address one of the questions that we get most often from investors, which is given that you had 10% revenue growth last year or roughly 15% this year and you're guiding to kind of 6% to 8% next year. One of broader impressions investors have is that the 5G's spend of Telecom service providers spend toward, preparing towards 5G will start to moderate, and particularly with the large Tier 1s like the AT&A and Verizon.
So, I just wanted to see if you can help us address kind of how you're thinking about the ramp of revenues with the Telecom service providers particularly the large Tier 1 from here on? And how you're thinking about kind of investments from them towards 5G preparedness?
你好。 早上好。 谢谢你提出我的问题。 我只是想开始看看你是否可以帮助我解决我们最常从投资者那里得到的一个问题，考虑到去年你的收入增长了10％，或者今年的收入增长率约为15％。 明年将达到6％至8％。 投资者的一个更广泛的印象是，5G的电信服务提供商花费，准备5G将开始适度，特别是像AT＆A和Verizon这样的大型一级。
First thing I'd say is that, we don't sense any slowdown with respect to North America. We see a lot of strength in North America generally speaking. And we've also taken share in North America. So we believe that North America is going to be a very strong market for us as we move into next year. We are seeing a bit of a slowdown in India. That's part of the reason why our order flow slowed a bit this quarter. It's really a period of digestion on the part of the Indian players. We think they're still committed to long-term buildout. And all that's factored into our outlook.
首先我要说的是，我们并没有感觉到北美的任何放缓。 一般来说，我们在北美看到了很多实力。 我们也在北美占有一席之地。 所以我们相信，随着我们进入明年，北美将成为一个非常强大的市场。 我们看到印度有点放缓。 这就是为什么我们的订单流量在本季度有所放缓的部分原因。 这真的是印度球员消化的一段时期。 我们认为他们仍然致力于长期建设。 所有这些都是我们观点的因素。
Samik, I would say specific to the 5G piece, I still think you're at the fairly early stages of that buildout. You're seeing carries buildout, converged metro networks. We saw some of the wins that we have this quarter. We're indicative of investment to basically facilitate 5G traffic and backhaul across converged network. I think we're at early stages of that buildout. I'm not specific now talking about just the pure ramp piece of it. I'm talking about infrastructure to make it all work. So, I think you'll see that over the next one to three years as it buildout on a global basis with most of the major Tier 1s.
萨米克，我会说具体到5G的一块，我仍然认为你处于那个建筑的早期阶段。 你看到了携带扩建，融合的城域网络。 我们看到了本季度的一些胜利。 我们表示投资基本上可以促进融合网络的5G流量和回程。 我认为我们处于那种扩建的早期阶段。 我现在还没有具体谈论纯粹的斜坡片。 我正在谈论基础设施，使一切正常。 所以，我认为在接下来的一到三年内你会看到它在全球范围内与大多数主要的一级建立。
Got it. And if I can just quickly follow up on the APAC comment Jim had just in terms of your visibility in getting that region back to growth. We've had – we understand the decline in India, but as we look into next year kind of what's the order flow and how you're thinking about APAC for next year?
得到它了。 如果我能够快速跟进亚太地区的评论，那么吉姆只是在你将该地区恢复增长的可见度方面。 我们已经了解了 - 我们了解印度的衰落，但是我们在明年会考虑订单流量是什么以及您对明年的亚太地区有何看法？
Yes. We think APAC will grow next year as the slowdown from last year really is mostly in India as a result of the big service providers digesting the big spend they've had. They made it to their buildouts and we think they're going to come back online for us. So we'll expect to see some growth out of APAC next year. India is not the only place where we're doing particularly well. We're doing well in Japan, Australia, some of the smaller countries like Vietnam and Korea, South Korea.
是。 我们认为亚太地区明年将会增长，因为大型服务提供商消化了他们已经拥有的大笔开支，因此去年的减速主要是在印度。 他们进行了扩建，我们认为他们将为我们重新上线。 所以我们预计明年会有一些亚太地区的增长。 印度不是唯一一个我们做得特别好的地方。 我们在日本，澳大利亚，越南，韩国，韩国等一些较小的国家表现良好。
Next question comes from Tim Long with Barclays.
Thank you. Two if I could. Gary, could you just go back to the kind of Webscale players, obviously been really strong and I think you mentioned you had pretty good visibility. But obviously a lot of other companies in the sector have had some severe lumpiness there and some weakness. So, do you think that business is diverse enough and enough customers and you have enough visibility that we won't see some kind of disruption into that business over the next year?
And then secondly, if you just touch on Blue Planet; we've been kind of at a level, the last few quarters actually gone down a little bit. You mentioned a key win there as well. How should we think about that business? Should it be kind of – maybe taking another step function up at some point or start to grind higher as we move through the next year or two? Thank you.
谢谢。 两个，如果可以的话。 加里，你能不能回到那种Webscale玩家，显然非常强大，我想你提到你有很好的知名度。 但显然，该行业的许多其他公司都存在一些严重的不稳定性和一些弱点。 那么，您认为业务是否足够多，客户足够多，而且您有足够的知名度，我们在明年不会对该业务造成某种干扰？
然后，如果你只是触摸蓝色星球; 我们已经达到了一个水平，过去几个季度实际上有所下降。 你也提到了一个关键的胜利。 我们该如何看待这项业务？ 应该是什么样的 - 可能会在某个时候采取另一个步骤，或者在我们接下来的一两年内开始飙升？ 谢谢。
Yes. So let me take first of all the Webscale piece. I think demand there and our relationships are pretty broadly based. Three of our Top 10 customers for the quarter were Webscale players and that gives you some sort of insight into the balance of business. And then, there is multiple smaller Webscale players and data center players too, which were also is a growth market for us. None of which particularly get to large concentrated spend, but in aggregate is pretty important to us.
So I think in summary, we feel pretty confident around our ability to continue to be the number one provider in Webscale going forward. We've got over 50% market share. We were up nearly 50% year to-date which I think is sort of testament to our competitive position. And I think with the technology that we are rolling out over the next 18 months, we're pretty confident around being able to continue to be the number one player there.
And I think demand, overall we see no abatement in the proliferation of data centers around globe, by all of the major Webscale players. And there are more Webscale players coming online as well, the sort of, I guess we call them sort of medium-size Webscale players. So we're pretty bullish around this space generally over the next couple of years.
Sorry, Tim, second part of your question was the Blue Planet. Yes, I think you're going to get ebbs and flows quarter-to-quarter on the revenues, but we're actually seeing increased engagement across the customer base where the suite of automation capabilities strengthen. So we're going to – we're pretty confident of achieving our target for the year. I would expect that to increase in next decent growth as we go through the next couple of years. It's still a nascent space. We're learning. We're putting together our portfolio which I think is now in a pretty good place, so I would expect pretty good growth in that space over the next 18 months or so.
对不起，蒂姆，你问题的第二部分是蓝色星球。 是的，我认为你的收入会逐季增加，但我们实际上看到整个客户群的参与度越来越高，自动化功能套件也越来越强。 所以我们将会 - 我们对实现今年的目标非常有信心。 我们预计，随着未来几年的增长，下一次体面的增长将会增加。 它仍然是一个新生的空间。 我们正在学习。 我们正在整合我们的投资组合，我认为现在这个投资组合处于一个相当不错的位置，所以在未来18个月左右的时间里，我预计该领域会有相当好的增长。
Okay. Thank you.
Your next question comes from Jim Suva with Citi.
Thank you very much. My question is regarding your commentary about the fiscal 2020 revenue growth outlook and the market commentary you gave. It's very clear that sound like you said that you'll grow twice the markets. But then you mentioned that you're comfortable with consensus numbers on a dollar basis. But the question is as well with a higher base shouldn't it higher or are we just kind of splitting the numbers 2Q. What I mean is of a higher base if we still grow 4% to 6% or double the market growth, you should be higher than consensus or am I just kind of misunderstanding what you're discussing? Thank you.
非常感谢你。 我的问题是关于你对2020财年收入增长前景的评论以及你给出的市场评论。 很明显，你说的声音会让你的市场增长两倍。 但后来你提到你对以美元为基础的共识数字感到满意。 但问题是，更高的基数不应该更高，或者我们只是分开数字2Q。 我的意思是，如果我们仍然增长4％到6％或者是市场增长的两倍，那么我的意思是更高的基数，你应该高于共识，还是我只是误解你正在讨论的内容？ 谢谢。
Just to be clear. We laid out at the beginning of this year a long-term growth rate of 6% to 8% for revenue. And we said this year we were going to grow a little – and I'm talking about 2019, we were going to grow a little faster than that. We have grown quite a bit faster than that 6% to 8% range. What we've said is that next year we're going to return to that 6% to 8% range. And if you take a number in that range and apply it to where we think our revenue is going to be for this year, you will get pretty close to the consensus number. So that's why we're referencing the consensus number.
I'd just say that we've had a year of great growth in 2018. We've had an extraordinary year in 2019. We've gained a number of points of market share. We've never been more confident about our ability to grow faster than the market and to keep taking market share and we believe that's going to happen next year. So I guess that's why I'd answer it. All of those that we've given for forward-looking statements are consistent both with what we said and what the market is expecting.
只是为了清楚。我们在今年年初制定了长期增长率为6％至8％的收入。我们说今年我们会增长一点 - 我说的是2019年，我们的增长速度会快一点。我们的增长速度比6％到8％的增长快得多。我们所说的是，明年我们将恢复到6％到8％的范围。如果你拿一个这个范围内的数字并将它应用到我们认为我们今年收入的位置，那么你将会非常接近共识数字。这就是我们引用共识数的原因。
I fully understand now. Thanks so much for the clarification.
Next question comes from Meta Marshall with Morgan Stanley.
Great. Just a question on your merchant DSP business, you know any pickup and I know that that's been something that you've been willing to offer, but there hasn't been a lot of traction there, so any pickup of interest after or kind of given the pending acquisition of Acacia. And then maybe more broadly, any inbounds from end customers who are some of you know customers -- some of Acacia customers of just what their thoughts on kind of the acquisition work? Thanks.
大。 只是关于你的商家DSP业务的一个问题，你知道任何提货，我知道这是你一直愿意提供的东西，但是那里并没有很大的吸引力，所以任何兴趣或任何 鉴于有待收购Acacia。 然后可能更广泛地说，来自最终客户的任何人都知道客户 - 一些Acacia客户对他们对收购的看法有何看法？ 谢谢。
Meta, it's Scott. So, I'd say – we've had some traction on what we call our microsystem business and the revenue in 2019 is on plan, its not materials overall results. We've had, I'll say, enhanced and increased engagement since dynamic changes somewhat with the Cisco, Acacia news. And that may create opportunities for us. And we'll see how that plays out over the next 12 months or so. We remain on our multiyear target of $50 million on our three-year plan. We think that'll be coincidental with when we think the pluggable market will start to materialize in 2021.
Meta，这是Scott。 所以，我会说 - 我们已经对我们所谓的微系统业务产生了一些牵引力，2019年的收入是按计划进行的，而不是材料的总体结果。 我认为，由于思科，Acacia新闻的动态变化，我们已经有了增强和增加的参与度。 这可能为我们创造机会。 我们将看到未来12个月左右的情况。 在我们的三年计划中，我们将继续实现5000万美元的多年目标。 当我们认为可插拔市场将在2021年开始实现时，我们认为这将是巧合。
Got it. Thanks.
Next question comes from Alex Henderson with Needham.
Thanks. So everybody focuses on 100 to 200, 200 to 400, 400 to 600, 800, are we now getting to the point as you see it where we're going to run into a limit to how far we can push the bit rates up and are we approaching Ciena's limit type of environment. And how do you see the world changing if we're not pushing that bandwidth up, but rather improving performance within the brackets that we've already established?
谢谢。 因此，每个人都关注100到200,200到400,400到600,800，我们现在已经到了这一点，因为你看到我们将在多大程度上限制我们可以推动比特率和 我们正在接近Ciena的极限环境类型。 如果我们不提高带宽，而是在我们已经建立的括号内提高性能，你如何看待世界的变化？
So, I'll say this, Alex. Certainly there is lot of specific, but we're not there yet. And we certainly believe there's a number of future generations; the technology that they're going to bring economic value to our customers. The other think I'd say is getting at that economic value is getting more and more costly and only ones that I think are going to be able to do that the ones that had scale, and we're pretty confident that we'll be amongst those folks.
所以，我会说，亚历克斯。 当然有很多具体的，但我们还没有。 我们当然相信有许多后代; 他们将为我们的客户带来经济价值的技术。 另一个人认为，我认为获得经济价值正在变得越来越昂贵，只有那些我认为能够做到那些具有规模的，我们相信我们会成为 在那些人中。
So, along those same lines from a competitive perspective, we sort of understanding the both NEL [ph] and Nokia had issues with their DSPs, as they try to implement sub-carrier capabilities and consolation shaping at 600-gig and have delayed their product rollout timelines. Is that having any impact on your ability to win business particularly in EMEA and APAC?
因此，从竞争的角度来看，我们对NEL [ph]和诺基亚的DSP问题都有所了解，因为他们试图实现600-gig的子载波功能和安慰形成，并推迟了他们的产品 推出时间表。 这是否会对您赢得业务的能力产生任何影响，尤其是在EMEA和APAC？
I'd say this and consistently what we said last quarter is one of the drivers of our upside surprise for the year was, I'll just say the lack of the competitive headwinds that we did expect to see in the marketplace going into the year. And that has continued to be a reality for us on the back part of the year as well. So the short answer is probably yes.
我要说的是这一点，我们上一季度所说的一直是我们今年上涨意外的推动因素之一，我只是说缺乏竞争阻力，我们确实期望在市场上看到这一年。 在今年的后半部分，这对我们来说仍然是一个现实。 所以简短的回答可能是肯定的。
And just going back to your product – to your 800-gig product cycle, because I just want to make sure I understand it fully. You've taped out the DSP for 800 gigs. You got the DSP back and you're on schedule to roll that out in the fourth quarter that is not a -- it’s a full 800-gig product in the calendar fourth quarter here, correct?
只需回到您的产品 - 到您的800-gig产品周期，因为我只是想确保我完全理解它。 你已经为DSP演奏了800演出。 你得到了DSP，而你正按计划在第四季度推出这款产品 - 这是第四季度完整的800-gig产品，这是正确的吗？
What we've said is year-end is when we will roll it out to customers and we're confident with that. By the way it really fix based on the DSP, it's not just the DSP. Its all the other components that go into a modem and people, I think probably a little bit confused because they go out with the merchant component market and they see others that don't have their components that support beyond the DSP for 800-gig. That's not our situation. We 100% control the key innovation technology for that entire drivetrain and that's why we're able to be at market earlier than anybody. We made great progress on the plan. The customers that we deal with are very intimate with where we're at in the technology and their vote of confidence was with the Q3 orders this year.
我们所说的年终是我们将其推广给客户，我们对此充满信心。 顺便说一句，它基于DSP真正修复，它不仅仅是DSP。 其他所有进入调制解调器和其他人的组件，我认为可能有点混乱，因为他们与商业组件市场一起出去，他们看到其他没有其组件支持超过DSP的800-gig。 那不是我们的情况。 我们100％控制整个动力传动系统的关键创新技术，这就是为什么我们能够比任何人更早地进入市场。 我们在计划上取得了很大进展。 我们处理的客户非常关注我们在技术方面所处的位置，他们对今年的第三季度订单充满信心。
But just to be clear. The DSP has come back, correct?
We don't comment, Alex on internal milestones. Methodology, there are multiple chips in it. I'll just say, we're extremely confident that we're going to be in the marketplace.
我们不对亚历克斯内部里程碑发表评论。 方法论，其中有多个芯片。 我只想说，我们非常有信心我们将会进入市场。
Okay. Thank you very much for the questions.
Next question comes from Tim Savageaux with Northland Capital.
下一个问题来自Tim Savageaux和Northland Capital。
All right. Good morning and congrats on the results.
Thank you, Tim.
My question is kind of reference – you're welcome. Kind of references briefly, and that's around 400-gig ZR which extensively was the driver or at least one of the main drivers for the Cisco, Acacia acquisition. I wonder if you could refresh us on Ciena's position on kind of pluggable market in general ZR in particular. I think 2021 – 2020-2021 type expectation was given for the beginnings of the ramp there. Just how Ciena plan to participate in that market who view that as kind of more threat or opportunity? And is that has changed at all post the Cisco, Acacia acquisition? Thanks.
我的问题是一种参考 - 欢迎你。 简短的参考文献，大约400-gig ZR，广泛是驱动程序或至少是思科，Acacia收购的主要驱动因素之一。 我想知道你是否可以让我们了解Ciena在一般ZR的可插拔市场上的地位。 我认为2021 - 2020-2021类型的预期是在那里开始的。 Ciena计划如何参与那个将其视为更多威胁或机遇的市场？ 在收购思科，Acacia后，这一切都发生了变化吗？ 谢谢。
Yes. So a couple of things, 400-gig ZR is a spec basically is single span, think of it has 80 kilometer Metro DCI opportunities, there's lot of dynamics going on in the Metro DCI as the GCNs look at their architectures and what not. I think that for sure that will be a place [Indiscernible] adoption in the marketplace, obviously the availability of the technology and there's lots of engineering and science to go into making that available. But also the users that add upgrading there, they're switching infrastructure to be able to take advantage of it and figuring out the operational paradigms that go around it. It will be a portion of the market. Our perspective is ZR specifically would be a small portion of that market.
We have bet in that off of the technology investment. We have our WaveLogic 5. I don't -- I personally don't believe there will be like some people think, a 100 different players in this market. I think it will be very limited because of the investment and technology required and we expect to make an offer there. I think you can think of it as an alternative to some of our dedicated transport Waveserver revenue today, but not substituted either because the market is growing at substantial rate.
我们打赌这是技术投资。我们有WaveLogic 5.我没有 - 我个人认为不会有人会想到这个市场上有100个不同的玩家。我认为由于需要投资和技术，它将非常有限，我们期望在那里提供报价。我认为您可以将其视为我们今天专用运输Waveserver收入的替代方案，但不能替代，因为市场正在大幅增长。
Thanks. And if I might be able to quickly. Okay, great. And you mentioned also previously kind of the Cisco, Acacia obviously speaks to vertical integration as well, clearly endorses your strategy from a DSP standpoint. But there are other elements I think previously referenced in the kind of optical food chain or ecosystem in terms of components. I think you've mentioned you got a fair bit of vertical integration going on there. But in general I'd say, if think strategically for Ciena is some stuff sort of increased vertical integration more likely than kind of incremental pieces of technology in new markets for Ciena? Or if you could talk about your overall strategic view on vertical integration as you stand now and maybe heading forward?
谢谢。 如果我能够快速。 好，太棒了。 你之前也提到过思科，Acacia显然也谈到了垂直整合，从DSP的角度来看，明确支持你的战略。 但是我认为之前在光学食物链或生态系统中提到的其他元素在组件方面也是如此。 我想你已经提到你在那里进行了相当多的垂直整合。 但总的来说，如果我认为，如果在Ciena的新市场中对Ciena进行战略性思考，那么在某种程度上增加垂直整合的可能性是否比增量技术更为可能？ 或者，如果您可以谈谈您对垂直整合的整体战略观点，那么您现在就可以向前迈进？
I would say, overall I think we're – we've invested both organically and somewhat inorganically over the years in ensuring, what Scott said the capability to be very vertically integrated. Because the issue, as Scott said, it's not just the DSPs, it's the ability of an ecosystem of the technology around that to bring it to market. And we owned pretty much all of the elements around that and so we're able to pace our own destiny around that. And I think that is a key competitive advantage for us. So sitting here today I don't think there's anything that we particularly lack on that vertical integration journey. So we feel like we're in a pretty good place overall with that -- what we've got.
我想说，总的来说，我认为我们 - 多年来我们在有机和无机方面进行了投资，以确保斯科特表示能够进行非常垂直整合的能力。 正如斯科特所说，这个问题不仅仅是DSP，而是围绕它的技术生态系统将其推向市场的能力。 我们拥有几乎所有的元素，所以我们能够围绕它自己的命运。 我认为这对我们来说是一个关键的竞争优势。 所以今天坐在这里，我认为在垂直整合之旅中我们并不特别缺乏任何东西。 所以我们觉得我们整体上都处于一个非常好的位置 - 我们得到了什么。
Thank you, Tim.
Our last question comes from Ryan Koontz with Rosenblatt Securities.
我们的最后一个问题来自Ryan Koontz和Rosenblatt Securities。
Thanks for the questions. I wonder if you could speak to the 5G trends and the metro investment required to that. Are you starting to see direct opportunities and how you feel like your position with regards to the 5G metro upgrades? Thank you.
谢谢你的问题。 我想知道你是否可以谈论5G趋势和所需的地铁投资。 您是否开始看到直接的机会以及您对5G地铁升级的看法？ 谢谢。
I think we all beginning to see that and I think we're able to see it in hindsight about sort of 12 months ago. And it sort of manifests itself in various forms, but largely, its sort of converged metro architecture. And you got most of the major Tier 1 carriers now at some points in that buildout and that include Verizon's story, one of most public bonds in North America around that. We've got AT&T. You got Central Link. You've got bunch of Tier 1 carriers in Europe. So I think there are all sort of various stages of it. But I think when we announced a couple wins this quarter in that space. And I think, we do see that buildout will be over the next one to two years which I think is going to be pretty healthy underlying dynamic for the industry.
我想我们都开始看到这一点，而且我认为我们能够在12个月前的事后看到它。 它有点以各种形式表现出来，但主要是它的融合地铁架构。 而且你现在已经在大部分主要的一级运营商中占据了这个目标，其中包括Verizon的故事，这是北美大部分公共债券之一。 我们有AT＆T。 你有中环线。 你在欧洲有很多一级运营商。 所以我认为它有各种不同的阶段。 但是我想当我们在这个季度宣布一对夫妇获胜时。 而且我认为，我们确实认为在接下来的一到两年内，我认为这将成为行业非常健康的潜在动力。
Is that most of the 6500 platform or are you also seeing some packet opportunities there?
Its both, you know because of the nature of it being converged some [Indiscernible] taking a slightly different architectural approach, but generally speaking it is a converged architecture that includes packet. And so increasingly we're seeing that as the integrated capability of packet on 6500, and then some of the aggregation pieces are still standalone as well, so it's an opportunity for a packet portfolio overall and that's why we're continuing to increase our investment in the packet portfolio, real large.
它们两者都知道，因为它的性质被融合了一些[Indiscernible]采用略有不同的架构方法，但一般来说它是一个包含数据包的融合架构。 因此越来越多的人认为，作为6500上的数据包的集成功能，然后一些聚合部分仍然是独立的，所以这是整个数据包组合的机会，这就是为什么我们继续增加我们的投资 在数据包组合中，真正的大。
That's very helpful. Thank you.
Thank you, Ryan. And with that, we thank everyone for joining us this morning. We look forward to catching up over the next several weeks. Thank you and have good day.
谢谢Ryan。 有了这个，我们感谢大家今天早上加入我们。 我们期待在接下来的几周内迎头赶上。 谢谢你，祝你有个美好的一天。
This concludes today's conference call. You may now disconnect.
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- 富途牛牛证券开户教程 开户即可领取1股汇丰，入金达到2万港币即可领取1股腾讯；新股一键认购，最高支持10倍杠杆融资，免新股认购手续费，暗盘交易免佣；
- 华盛通开证券户教程 开通美股或者港股， 享受现金200元,美股8折奖励。
- 必贝证券开户教程 开通后 享有280元现金奖励
- 玖富证券开户教程 开通后 最低入金1W港币可以领218元红包
- e投睿开户教程 开通后 可获得25美金奖励
- 友信证券开户教程 注册随机领3股，注册后可随机抽取苹果、腾讯、阿里、京东等热门股票