George Notter

George Notter inquired about the softer bookings growth in Q3, specifically asking if delayed contract decisions impacted the 10% AI bookings contribution target, and sought clarification on the strategic rationale behind the Prepared and Carbyne acquisitions in the 911 space, considering the competitive landscape and Axon's future plans for these businesses.

Answer

President Josh Isner affirmed that Axon still expects high 30s% year-over-year bookings growth, implying a strong Q4. CEO Rick Smith elaborated on the 911 strategy, explaining that Axon's previous CAD product line exit was due to limited innovation room. He highlighted Prepared's AI capabilities for real-time data processing and autonomous handling of non-critical calls, and Carbyne's role in modernizing voice communication infrastructure, positioning Axon as a major player in linking callers to the entire Axon ecosystem.

George Notter inquired about the Q3 bookings performance, specifically asking if the softer appearance was due to delayed contract decisions, given the expectation for AI to contribute 10% to total bookings this year. He also sought clarification on the strategic rationale behind the Prepared and Carbine acquisitions in the 911 space, their integration into Axon's ecosystem, and the competitive landscape.

Answer

President Josh Isner affirmed that bookings growth is still expected in the high 30s% year-over-year, implying a strong Q4. CEO Rick Smith elaborated on the 911 acquisitions, explaining that Prepared offers low-friction AI for call centers and Carbine replaces legacy infrastructure with cloud solutions, both leveraging AI to unify the Axon ecosystem and link callers to responders, contrasting with previous CAD strategy.

George Notter of Wolfe Research, LLC asked for context on the $600 per-officer monthly spending metric, how it compares to prior years, and for an updated percentage of customers on the Officer Safety Plan (OSP).

Answer

President Josh Isner clarified that the $600 figure represents the high end of deals and has grown from the mid-$200s three years ago due to the addition of more products to the bundle. COO & CFO Brittany Bagley noted that while there's no new OSP metric, about 70% of customers were still on basic plans as of a few quarters ago, indicating a large upgrade opportunity.

George Notter inquired about the Q3 progress of Axon's Draft One product, asking about its impact on revenue and ARR, updates to the sales pipeline, and the final pricing for the new AI era bundle.

Answer

EVP & Chief Product Officer Joshua Isner stated that while there were some early Q3 orders for Draft One, the financial impact is still minimal as it's the "top of the first inning." He confirmed the pipeline is growing and that Draft One is the anchor for the new AI era bundle, which will be priced at $199/month. CFO Brittany Bagley added that the company's focus will shift to discussing the comprehensive AI bundle rather than Draft One as a standalone product.

George Notter inquired about the momentum Arista Networks is seeing with VeloCloud, specifically what is driving this with its customer set, and if it indicates a shift beyond a bundle-focused approach.

Answer

Jayshree Ullal, Arista Networks' CEO and Chairperson, acknowledged initial bundling but noted that many NeoClouds worldwide are now seeking Arista's help for network design and software capabilities due to a lack of internal staff and expertise. She mentioned that smaller GPU clusters are growing, leveraging colo space and power.

George Notter inquired about the increasing momentum Arista is experiencing with VeloCloud, asking what specific trends or customer behaviors are driving this, especially considering the historical focus on bundled solutions.

Answer

Jayshree Ullal, CEO and Chairperson, explained that while initial focus was on bundling, many NeoClouds and smaller enterprises are now actively seeking Arista's expertise for network design and software capabilities due to internal resource constraints. She sees significant growth potential from these customers, even starting with smaller GPU clusters.

George Notter of Wolfe Research asked for Arista's perspective on the competitive environment, particularly concerning NVIDIA's networking business and Celestica, and how Arista maintains its differentiation.

Answer

Chairperson & CEO Jayshree Ullal stated that while the competitive "chatter" has increased, the landscape has not fundamentally changed. She emphasized that Arista's differentiation in platform performance, features, and customer intimacy remains strong, expressing confidence in their innovative edge.

George Notter asked about the reduced share repurchase activity in the quarter, questioning if it was related to capital allocation towards manufacturing expansion. He also sought an update on the Building 10 expansion, specifically if the plans for the several hundred thousand square feet of incremental space remained consistent with three months prior.

Answer

Csaba Sverha, EVP and CFO, explained that share repurchases were driven by a 10b5-1 Plan, which is automated based on price tiers, and the company did not participate in the open market last quarter. He reiterated that the primary capital allocation strategy remains investing in future growth, including working capital and capital expenditures for Building 10. Mr. Sverha confirmed that Building 10 is a 2 million sq ft facility expected to add approximately $2.4 billion in revenue, and the plan to accelerate a portion of the building for completion by the June quarter remains unchanged from three months ago.

George Notter asked about the low share repurchase activity in the quarter, questioning if it was due to capital allocation towards manufacturing expansion. He also sought an update on the Building 10 expansion, specifically if the scope and timeline remained as envisioned three months prior.

Answer

EVP and CFO Csaba Szverha explained that share repurchases were executed via a 10b5-1 plan, not open market activity, and the primary capital allocation strategy remains investing in future growth, including working capital and CapEx for Building 10. Mr. Szverha confirmed that Building 10 is a 2 million sq ft facility, expected to add approximately $2.4 billion in future revenue, with a portion accelerated for completion by the June quarter, consistent with previous plans.

George Notter asked about the vesting triggers for the Amazon warrants and the associated contra-revenue recognition, and also inquired about the potential long-term revenue scale of the new HPC business with Amazon.

Answer

CFO Csaba Sverha explained that the initial warrant tranche vested in Q3 upon contract signing, with future vesting tied to revenue thresholds, which were not met in Q4. CEO Seamus Grady described the HPC opportunity as significant, representing a major TAM expansion, and confirmed it will begin ramping in fiscal Q1, leading to its classification as a new reporting segment.

George Notter asked if potential tariffs are creating incremental business opportunities for Fabrinet and whether this could lead to market share gains. He also questioned the potential lead time for any such manufacturing moves.

Answer

CEO Seamus Grady responded that since Fabrinet's facilities are not in China, the company sees no negative impact from tariffs and views them as a potential positive opportunity if customers decide to move production. He clarified that any such benefit would likely materialize in months or quarters, not years, given Fabrinet's ability to transfer complex products quickly.

George Notter of Jefferies questioned the key milestones required to ramp 1.6-terabit transceiver revenue and asked about any potential component constraints, such as EMLs, that could affect the ramp.

Answer

CEO Seamus Grady identified the primary catalyst for the 1.6T ramp as the customer's Blackwell platform shipping in greater quantities. He expressed confidence that significant component constraints are not expected, crediting the customer's thorough work in securing ample supply and alternative sources.

George Notter asked about supply constraints in the Optical Communications business, specifically regarding OEM glass sales and efforts to expand capacity. He also inquired about current lead times for Optical Communications products.

Answer

Chairman and Chief Executive Officer Wendell Weeks confirmed that demand for Corning's products is tight relative to supply, leading to ongoing discussions with customers about manufacturing platform profiles, de-risking investments, and securing commitments/funding for future capacity. He noted that lead times vary by SKU, but customers consistently seek faster delivery, indicating tight conditions, despite Corning meeting unplanned growth and attracting new customers.

George Notter asked about the current capacity utilization of Corning's optical manufacturing facilities and inquired about the lead times for next-generation products for data centers and long-haul networks.

Answer

Chairman & CEO Wendell Weeks explained that while there is still room to increase overall utilization, tightness is concentrated in the newest products. He clarified that for these new components, the focus is less on lead times and more on the rate of ramping production and modifying existing manufacturing platforms to meet the strong demand.

George Notter asked about the current capacity utilization at recently expanded optical facilities and whether there is still excess capacity. He also inquired about lead times for next-generation data center and high-density fiber products.

Answer

CEO Wendell Weeks responded that there is still an opportunity to increase utilization, which will drive incremental margins. He specified that tightness is most pronounced for the newest products. He clarified that for core components, the focus is less on lead times and more on the rate of converting existing manufacturing platforms to produce the new, high-demand products.

George Notter of Jefferies asked how Corning achieved a favorable 120 yen hedge rate and requested a year-on-year comparison for Q1 guidance on an apples-to-apples basis using the new rate.

Answer

EVP and CFO Ed Schlesinger explained that the company utilized a variety of low-cost hedging tools, leveraging its extensive experience. He declined to recast prior periods, stating that the combination of recent price increases in the Display segment and the new 120 yen rate is designed to achieve the same level of profitability, making a direct restatement unnecessary from their perspective.

George Notter asked for color on customer conversations regarding Display price increases, given that hedges were still in place, and inquired about the new hedge rate for 2025.

Answer

CEO Wendell Weeks explained that the price increases are about appropriately sharing the currency benefits customers receive from the weaker yen, with the goal of stabilizing Corning's U.S. dollar net income. While acknowledging such conversations are always challenging, he confirmed they were successful. He declined to share the new hedge rate, stating it will be disclosed after commercial agreements are finalized.

George Notter asked how F5 sized the potential impact from the security breach and for details on how many customers were affected, whether configuration information was taken, and if specific customer issues could be pointed to.

Answer

Cooper Werner (EVP and CFO, F5) explained that the impact assessment involved a granular approach, profiling revenue streams for resilience (e.g., recurring revenue like services, SaaS, subscription renewals are highly resilient) versus vulnerability (e.g., new projects, competitive takeouts). He also considered historical peer incidents and feedback from sales teams. François Locoh-Donou (President and CEO, F5) clarified that the impact was primarily on BIG-IP customers, recommending upgrades to all. A small percentage of customers experienced data exfiltration, and F5 has identified and provided data packages to them, with initial feedback indicating the data was not sensitive. No impact on CRM or support systems was observed.

George Notter inquired about F5's methodology for sizing the potential impact from the security breach and asked for details on the number of customers affected, specifically regarding configuration information taken or any specific customer issues.

Answer

Cooper Werner, EVP and CFO, detailed the sizing approach, which involved granular profiling of revenue streams (recurring vs. new projects), historical peer analysis, and sales team feedback. François Locoh-Donou, President and CEO, stated that BIG-IP customers were impacted, with all recommended to upgrade, and a small percentage experienced data exfiltration, though initial feedback indicated non-sensitive data. He confirmed no impact on F5 Distributed Cloud Services or NGINX environments.

George Notter requested an update on F5's newer products, asking about the general availability, pricing, and potential of the NVIDIA DPU product, as well as initial customer feedback on the AI Gateway platform.

Answer

CEO François Locoh-Donou confirmed the NVIDIA DPU solution is generally available and in promising customer proofs of concept, with the main opportunity expected as AI workloads move to inferencing. He added that the AI Gateway is also in early stages with over a dozen POCs, positioning F5 to address the emerging need for Layer 7 security and delivery for AI tokens.

George Notter questioned the potential incremental revenue from the expanded Apple relationship, whether the contract provides more certainty, Coherent's market share in 3D sensing, and how the capital investment for the Sherman facility is being handled.

Answer

CEO Jim Anderson described the multi-year agreement with Apple as an expansion for a new generation of VCSELs, with revenue expected in the second half of calendar 2026. He emphasized the deal's role in ensuring the long-term utilization of the Sherman, TX plant. Anderson deferred on providing specific market share details until closer to the ramp and indicated that Coherent would contribute a "little bit of incremental capital" to support the business.

George Notter of Jefferies asked about the potential impact of tariffs on Coherent's Chinese manufacturing, possible mitigation strategies, and whether recent strength could be attributed to customers pulling forward demand ahead of tariffs.

Answer

CEO James Anderson responded that the company does not expect a significant impact from tariffs in the current quarter, and any expected effects are already factored into the guidance. He highlighted Coherent's resilient supply chain, with geographic diversity and strategic vertical integration, as key mitigation strengths. Anderson also stated that the company saw no indications of demand pull-forward from customers in Q2.

George Notter asked for details on the manufacturing capacity expansion in Thailand and requested an update on the company's portfolio rationalization efforts.

Answer

President and CEO Michael Hurlston explained that a new building in Thailand is being outfitted to meet hyperscaler demand and provide manufacturing flexibility. He also confirmed that portfolio management is an ongoing process to sharpen focus on the core cloud and networking business, with more details to be shared on subsequent calls.

George Notter questioned the status of the product transition with Lumentum's largest transceiver customer and asked for an update on the milestones and gating factors for ramping the two newly won cloud provider customers.

Answer

President and CEO Alan Lowe explained that the product transition with their largest customer is an ongoing process with a pipeline of new products ramping now and in coming quarters. For the new customers, he noted that one began shipping in December and is growing, while the ramp for the other, set to begin in fiscal Q4, is gated by the time required for extensive qualification testing. He also hinted at progress with a potential fourth and fifth customer.

George Notter of Wolfe Research LLC inquired about the significance of the British Telecom (BT) win, its potential relation to previously mentioned large deals, its backlog status, and the progress of converting GenAI proofs-of-concept (POCs) into production contracts.

Answer

President and CEO Shuky Sheffer clarified that the BT deal is a significant, incremental project to modernize the commerce domain for a former BT acquisition and was signed after the quarter's end, thus it is not yet in the backlog. He also confirmed that four GenAI POCs were converted into commercial deals during the quarter. CFO and COO Tamar Rapaport-Dagim added that other significant deals were signed, including one with a major US operator, demonstrating a mix of deal sizes in the pipeline.

George Notter from Jefferies asked about the drivers behind the significant project pipeline mentioned by management and questioned if there has been a tangible change in the market environment for closing deals compared to previous quarters.

Answer

Joshua Sheffer, President and CEO, confirmed that Amdocs has a very rich and mature deal pipeline across all geographies and growth areas. However, he was cautious about declaring a definitive change in the market, stating he could provide a better assessment in the next quarter but that the current pipeline is encouraging.

George Notter of Wolfe Research LLC sought an update on the efforts to sell the Huntsville campus, asking if a potential buyer had withdrawn from the process.

Answer

CEO & Chairman Tom Stanton clarified that the buyer has not walked away but has been slow to close, and the deal remains active. Due to the delay, ADTRAN is now considering other offers. SVP & CFO Tim Santo added that the company is also exploring a sale-leaseback transaction on its East Tower, given its improved financial position.

George Notter asked for an update on the excess customer inventory situation, particularly in the optical business, and inquired about the timeline for recovery. He also requested an update on the company's real estate asset sales and asked about the drivers behind the recent decrease in Days Sales Outstanding (DSO).

Answer

Executive Thomas Stanton confirmed that bookings were picking up, signaling an easing of inventory issues. He noted a large European customer's inventory overhang should clear by early Q1, but orders are already resuming. He stated that real estate asset sales are progressing with multiple interested parties. CFO Uli Dopfer and Thomas Stanton attributed the DSO improvement primarily to customer mix and strong collection efforts, while noting that business linearity remains back-end loaded.

George Notter from Wolfe Research asked about the ongoing CapEx and working capital obligations for the CCS business until the sale closes, and also questioned the customer concentration within the RemainCo business.

Answer

CFO Kyle Lorentzen stated that while specific figures would not be provided, CommScope is required to support the CCS business, and these costs are factored into the 2025 cash flow guidance. Regarding concentration, he acknowledged that the A&S business has higher customer concentration than the Ruckus business but did not provide percentages, noting it is a managed aspect of the business.

George Notter of Wolfe Research asked about the specific CapEx and working capital obligations for the CCS business prior to the deal's closing and questioned the level of customer concentration in the RemainCo business.

Answer

EVP & CFO Kyle Lorentzen explained that while specific figures would not be provided, the company is required to support the CCS business, and these costs are factored into the 2025 cash flow guidance. Regarding concentration, he acknowledged that the A&S business has higher customer concentration than the Ruckus business, but did not provide percentages.

George Notter of Wolfe Research LLC inquired about the early results from increased sales and marketing investments in North America, the effectiveness of splitting the sales team into 'hunters and gatherers', and the market progress of the DefensePro X product.

Answer

CEO Roy Zisapel confirmed that the North American investments are yielding positive results, with a stronger pipeline and better customer engagement. He stated the sales team reorganization has improved both new customer acquisition and existing account management. Regarding DefensePro X, Zisapel noted it will constitute 100% of new on-premise DDoS sales by Q3 and that the end-of-sale for a previous model creates a significant refresh opportunity.

George Notter of Wolfe Research LLC inquired about the early results from increased sales and marketing investments in North America, the effectiveness of splitting the sales team into 'hunters and gatherers', and the sales progress of the DefensePro X hardware.

Answer

Roy Zisapel, Co-Founder, CEO, President & Director, stated that the investments in North America are yielding positive results, including a stronger pipeline and better customer engagement. He confirmed the sales team bifurcation is working well, improving both new customer acquisition and existing account management. Zisapel also noted that as of Q3, 100% of new on-premise DDoS sales will be DefensePro X, with the end-of-sale of an older platform creating a significant refresh opportunity.

George Notter from Jefferies inquired about the DefensePro X upgrade cycle, asking about the current shipping mix, future end-of-life plans for the older platform, and whether Radware's cloud scrubbing centers are also being upgraded.

Answer

President and CEO Roy Zisapel explained that the DefensePro X refresh is driven by superior security algorithms and a higher subscription content. He confirmed that 60-70% of the older line is now end-of-sale, which has accelerated adoption. Zisapel also stated that Radware's cloud infrastructure is continuously upgraded with the latest technology. While this is a CapEx replacement, the enhanced capabilities enable significant competitive wins, such as a recent multi-million dollar deal with a major U.S. communications provider.

George Notter from Wolfe Research LLC asked for more details on Harmonic's strategy to mitigate tariffs, particularly concerning its node manufacturing in Malaysia. He questioned what offsets were available and the potential P&L impact of a significant tariff.

Answer

CFO Walter Jankovic explained that the Q3 guidance already incorporates the announced tariff changes, including the 25% rate for Malaysia, with an expected impact of less than $1 million on the broadband business. He attributed the low impact to product exemptions and operational adjustments. He also mentioned that the company is proactively exploring long-term options like near-shoring.

George Notter of Jefferies LLC asked for clarification on the 'ecosystem challenges' cited as a factor in the 2025 outlook, specifically whether it related to amplifier availability or integration with operator back-office systems.

Answer

President and CEO Nimrod Ben-Natan confirmed that the ecosystem dependency primarily refers to components like FDX amplifiers. He stated that while current deployments can proceed in fiber-deep markets, broader rollouts will become dependent on amplifier availability and maturity sometime in 2025. He clarified that integration with back-office networks is not a significant issue.

George Notter inquired about the end-subscriber benefits of AgenTeq AI, as the discussion focused on service provider operations. He also asked if the strong hardware quarter was influenced by customers pulling forward orders due to tariff concerns.

Answer

CEO Michael Weening explained that the first component of the new platform is a mobile app that serves as a brand portal for end subscribers, where AI will deliver enhanced cybersecurity and performance analysis. He firmly stated there was no pull-forward of orders related to tariffs, emphasizing that Calix works with customers to manage inventory to meet subscriber demand.

George Notter asked about the dynamics behind the higher tax rate guidance for 2025, inferring it might be due to strong international growth. He also asked if the recent RPO strength was related to the large new customer wins mentioned in the previous two quarters.

Answer

CFO Cory Sindelar explained the higher tax rate is not due to disproportionate international growth but rather the runoff of certain tax credits, leading to a more normalized rate. CEO Michael Weening clarified that unlike the prior two quarters, the Q4 RPO strength was not driven by a single large contract but was broad-based across many medium-sized deals, which he viewed as a significant positive.

George Notter questioned if the fiscal 2025 gross margin guidance of 42-44% implies the heaviest-ever mix of new systems, given it's below the FY24 adjusted rate. He also asked about the drivers behind a sequential decline in headcount.

Answer

CFO Jim Moylan confirmed that fiscal 2025 will see the heaviest concentration of line system sales Ciena has ever experienced, particularly in the first half, as its RLS platform becomes an industry standard. He explained the headcount reduction resulted from a mid-year adjustment to lower OpEx, which involved terminations and reduced hiring. While headcount won't grow significantly, FY25 OpEx will rise due to the reinstatement of full incentive compensation and merit increases.

George Notter questioned the recent dip in direct webscale revenue despite a strong AI narrative and asked for more details on the mentioned interconnect opportunities inside the data center.

Answer

CFO Jim Moylan explained that webscaler business is project-driven, leading to natural ebbs and flows, and that a single quarter is not a trend. He also highlighted the significant increase in MOFN deals as another avenue of webscaler-driven growth. Executive Adviser Scott McFeely described the inside-the-data-center opportunity as a longer-term play, driven by the need for higher-performing optics to connect GPUs over longer distances as data rates and power constraints increase, potentially requiring coherent WAN technologies.

George Notter from Jefferies requested a quantification of the duty drawback's impact on gross margin. He also asked what drove the sequential margin improvement, given Splunk's presence in the previous quarter, suggesting product mix as a likely factor.

Answer

CFO Scott Herren quantified the one-time duty drawback benefit as contributing between 0.5 and 1.0 percentage point to the Q1 gross margin improvement. He confirmed that beyond this, favorable product mix, including Splunk, and significant cost-out achievements by the supply chain and product teams were key drivers. He guided for full-year gross margins to settle into the 68% to 69% range.

George Notter asked if the CX and payments businesses still meet the 'Rule of 40' criteria, inquired about the revenue percentage from non-cable/telco verticals, and sought clarification on the revenue contribution from recent M&A.

Answer

CEO Brian Shepherd confirmed the CX business continues to perform strongly and meets the Rule of 40, while the payments business is expected to return to double-digit growth after a temporary slowdown. He noted revenue diversification is progressing well, at around 29% for the quarter. CFO Hai Tran specified that M&A contributed roughly $6 million in revenue for Q3.

George Notter asked about the progress and likelihood of a successful sale of the terrestrial and wireless business, given past attempts. He also requested details on the revenue and cost structure, including headcount, associated with the recently closed Basingstoke facility.

Answer

CEO John Ratigan described the terrestrial and wireless business as a high-performing, undervalued asset, stating a sale is the best way to unlock its value, but he could not comment on the process's status or probability of success. He estimated the Basingstoke facility had about 100 employees before its closure. CFO Mike Bondi added that while not providing a specific number, the closure will curtail a significant loss and meaningfully improve the bottom line. He confirmed the remaining headcount at the facility is now under five.

Asked if the announced content provider wins are incremental to existing business. He also sought to clarify if these wins are firm, contracted pieces of business with specified volumes that are already in the backlog.

Answer

The company stated that the major wins (ICE7 subsea, hyperscaler OLS, 800-gig pluggable) are indeed incremental. They clarified that these are design or RFP wins, not hard-coded contracts with guaranteed volumes in the backlog. The dollar values represent the potential based on customer forecasts provided during negotiations, against which purchase orders will be issued over time.

Asked for the current sales mix of ICE-X and vertically integrated products, the status of vertically integrating the GX platform, and the future outlook for the vertical integration mix.

Answer

The company provided the current mix (ICE-X under 30%, vertical integration at 57%). The first vertically integrated GX systems are shipping in the current quarter, with customer testing underway. The vertical integration mix is expected to grow from over 60% towards 70% over time.

George Notter from Jefferies LLC inquired about the long-term gross margin structure of the business once it normalizes, beyond the current year's forecast. He also asked for clarification on whether the quarter's bad debt expense was included in the non-GAAP results.

Answer

CFO Jacob Sayer stated that approximately 40% is a reasonable gross margin modeling rate for the current year. CEO Morgan Kurk added that while the historical target was closer to 50%, a more realistic long-term goal is north of 45%, driven by the government and enterprise business mix. Morgan Kurk also confirmed that the bad debt expense of about $600,000 was included in the non-GAAP figures.

Inquired about the CEO's broader strategic plan for the company, including product strategy and differentiation, and asked for more details on the competitive environment in the enterprise segment.

Answer

The CEO's strategy remains consistent with the previous quarter, focusing on improving internal operations, consolidating product platforms (especially in Point-to-Multi-Point), and enhancing the go-to-market strategy for the enterprise business. The competitive environment in enterprise is characterized by an oversupply in the channel, which is now correcting itself as inventory levels decrease and lead times shorten, with underlying end-user demand remaining stable.

Requested a breakdown of gross margin puts and takes, specifically the impact from high-cost inventory and E&O charges. He also asked for more detail on the drivers of the strong services gross margin and if there were any one-time items.

Answer

Gross margin is benefiting from normalized logistics costs, but is still impacted by high-cost inventory bleeding through and increased inventory carrying charges (including E&O). The strong services gross margin was driven by both SaaS revenue growth and operational efficiencies in the core maintenance business. Management confirmed there were no significant one-time items and that the margin level is a good baseline for future directional improvement.

Asked for a clarification on the backlog and RPO metrics and inquired about the specific options the company is considering for refinancing its convertible debt.

Answer

The executive provided the specific figures: RPO was $194 million and hardware backlog was $14 million. Regarding the debt, the primary strategy is to improve operational performance to grow EBITDA, which will create more refinancing options. Ideally, they would use cash flow to pay off a portion of the low-coupon debt at maturity, while higher EBITDA could make other instruments like term loans available.