Ryan Koontz

Ryan Koontz from Needham & Company asked about the changes in Ciena's product mix within the cloud segment over the last 12 months, particularly regarding Scale-across, RLS, and DCI compared to traditional long-haul and subsea. He also inquired about industry supply constraints for cloud customers, such as fiber supply, permitting, and labor.

Answer

CEO Gary Smith explained that the product mix has shifted significantly, with a much higher proportion of line systems initially for Scale-across, followed by a large ramp-up in 800-gig plugs, which represents a different mix than traditionally seen. He also noted more intelligence on line systems and the rapid emergence of DCOM. Regarding industry constraints, Gary Smith mentioned tight relationships with fiber providers like Corning to scale capacity and highlighted Ciena's large optical support and services organization, which is increasingly engaged in deployment, with a cloud provider being their largest service customer last year, facilitating infrastructure delivery.

Ryan Koontz from Needham & Company asked about the changes in Ciena's product mix within the cloud segment over the last 12 months, particularly regarding Scale-across, RLS, and DCI compared to traditional long-haul and subsea. He also inquired about industry supply constraints for cloud customers, such as fiber supply, permitting, and labor.

Answer

CEO Gary Smith explained that the product mix has shifted significantly, with a much higher proportion of line systems initially for Scale-across, followed by a large ramp-up in 800-gig plugs, which represents a different mix than traditionally seen. He also noted more intelligence on line systems and the rapid emergence of DCOM. Regarding industry constraints, Gary Smith mentioned tight relationships with fiber providers like Corning to scale capacity and highlighted Ciena's large optical support and services organization, which is increasingly engaged in deployment, with a cloud provider being their largest service customer last year, facilitating infrastructure delivery.

Ryan Koontz of Needham & Company asked about Ciena's tariff mitigation strategies and customer negotiations. He also questioned whether the momentum in ZR pluggables was still dominated by cloud operators or if service provider adoption was increasing.

Answer

CFO Jim Moylan stated that while the current tariff regime costs about $10 million per quarter, mitigation strategies should make the net impact to the bottom line immaterial going forward. Executive Advisor Scott McFeely confirmed that ZR pluggable volume is still "dominated by the cloud," as service providers tend to use pluggables for other applications like modularity rather than high-volume ZR deployments.

Ryan Koontz from Needham & Company asked about the drivers of strength in the North American Service Provider segment and sought to characterize the cloud growth as coming from top-tier players versus emerging ones.

Answer

CEO Gary Smith attributed North American SP strength to recent design wins, inventory normalization, and a return to infrastructure investment by telcos. He described cloud growth as both broader and deeper, highlighting that five cloud providers were in the top 10 customers for Q1, which illustrates an expanding group of large companies investing heavily in their networks.

Ryan Koontz with Needham & Co. inquired about the impact of the government shutdown on BEAD and other subsidy programs, its effect on revenue or bookings for fiscal Q4 and Q1, and the expected timeline for normalization. He also asked about the softness in community broadband, the gross margin outlook, and concerns regarding industry fiber supply.

Answer

Cheri Beranek, Clearfield's President and CEO, explained that the government shutdown affected bookings across the board, particularly ACAM, impacting fiscal Q4 and Q1, but expected normalization by fiscal Q2. She attributed community broadband softness to BEAD delays and private investment sitting on the sidelines. Dan Herzog, Clearfield CFO, clarified that gross margins are volume-dependent, expecting modest improvements with higher revenues. Ms. Beranek also noted that data center fiber utilization is affecting Corning's allocation, impacting broadband deployments, and Clearfield is actively sourcing equivalent fibers.

Ryan Koontz from Needham & Co. inquired about the impact of the government shutdown on Clearfield's Q4 and Q1 outlook, specifically regarding BEAD and other subsidy programs, and its effect on community broadband. He also asked about the gross margin trajectory and industry fiber supply constraints.

Answer

Clearfield's President and CEO, Cheri Beranek, stated that the government shutdown affected bookings across the board, particularly ACAM, impacting Q4 shipments and Q1 lead-ins, but expects normalization by Q2. She noted community broadband was soft in Q4, flat or down year-over-year, primarily due to BEAD delays affecting smaller service providers and private investment. CFO Dan Herzog confirmed that gross margins are volume-dependent, expecting modest improvements with higher revenues after a lighter Q1. Ms. Beranek also highlighted that data center fiber utilization is affecting Corning's allocation, impacting broadband deployments, and Clearfield is actively sourcing equivalent fibers.

Inquired about the product mix between connected home and cabinets, the year-over-year growth of the core Clearfield business, the performance of new home deployment kits, the impact of the Amphenol-CommScope deal, the materiality of E&O reserve consumption on gross margins, and supply chain tightness, particularly for batteries.

Answer

Cheri Beranek confirmed the product mix is normalizing, the core Clearfield segment grew 15% YoY, and home deployment kits are successful. She viewed the Amphenol-CommScope deal as non-detrimental. Dan Herzog quantified the positive impact of E&O reserves on gross margin. Cheri acknowledged supply chain issues with batteries and rectifiers for active cabinets due to tariffs and mentioned they are exploring alternative suppliers.

Ryan Koontz of Needham & Company inquired about Clearfield's product mix, the performance of the core business versus the prior year's inventory impacts, details on new connected home products, the industry impact of the Amphenol-CommScope deal, the materiality of E&O reserve consumption on gross margin, and current supply chain constraints.

Answer

CEO Cheri Beranek confirmed the core Clearfield segment grew 15% year-over-year, with product mix normalizing and new Home Deployment Kits gaining traction. She viewed the Amphenol-CommScope deal as non-detrimental, as Clearfield focuses on a different part of the AI-driven market. CFO Dan Herzog quantified the E&O reserve gain's impact on gross margin at approximately 1.7%. Beranek also noted that supply chain challenges persist for active cabinet components like batteries, which are related to tariffs.

Ryan Koontz of Needham & Company, LLC asked about Clearfield's product mix between new passings and home connections, the market traction of its new home deployment kits, customer concentration within the regional segment, gross margin improvements related to E&O reserves, and the strategic changes being made to the Nestor business in Europe.

Answer

CEO Cheryl Beranek explained that sales for connecting homes remain strong and that demand for fiber distribution cabinets is resuming as surplus inventory has been depleted. She highlighted the success of the new home deployment kits, which reduce labor needs. Beranek also noted that one large regional customer, who will become a 10% customer, pulled forward approximately $3 million in orders. Regarding the Nestor segment, she detailed the shift of higher-margin production to the new, more efficient Estonia facility. CFO Daniel Herzog clarified that the gross margin benefit came from a significantly lower E&O reserve expense ($0.4M vs. $4.9M YoY), not a credit, though there was a $0.5M recovery.

Ryan Koontz asked about Clearfield's product mix between new home passings and subscriber connections, the market traction for its new home deployment kits, the customer diversification within its regional segment, the specifics of gross margin improvement related to E&O reserves, and the strategic changes planned for the Nestor business.

Answer

Executive Cheryl Beranek explained that sales of products for connecting homes remain strong and that demand for fiber distribution cabinets is resuming as surplus inventory in the market has been depleted. She highlighted the labor-saving benefits of the new home deployment kits. Beranek also noted that while about six large regional companies are key contributors, one customer pulled forward approximately $3 million in orders, becoming a 10% customer for the quarter. Regarding the Nestor segment, she stated that new, higher-margin products are being produced in the new Estonia facility to improve profitability. CFO Daniel Herzog clarified that the gross margin benefit came from a significantly lower E&O reserve charge ($0.4M this quarter vs. $4.9M last year) and a $0.5M recovery, rather than a credit reversal.

Ryan Koontz inquired about RADCOM's visibility into 2026, confidence in maintaining the current revenue run rate, potential major renewals, and any planned changes in earnings leverage, specifically regarding sales and marketing spend. He also asked for an update on 5G Core deployments across the U.S., APAC, and EMEA.

Answer

CEO Benny Eppstein expressed confidence in targeting double-digit growth for 2026, citing new opportunities in cloud-native and 5G transformations. He confirmed plans for increased spending in marketing and R&D. Mr. Eppstein also validated strong momentum for 5G Core, standalone, and Open RAN deployments in the U.S., Europe, Japan, and Asia, driven by the need for cloud-native applications and NVIDIA's user plane visibility.

Ryan Koontz inquired about RADCOM's visibility into 2026, confidence in maintaining the current revenue run rate, potential major renewals, and any planned changes in earnings leverage, specifically regarding sales and marketing spend. He also asked for an update on 5G Core deployments across the U.S., APAC, and EMEA.

Answer

CEO Benny Eppstein expressed confidence in targeting double-digit growth for 2026, citing new opportunities in cloud-native and 5G transformations. He confirmed plans for increased spending in marketing and R&D. Mr. Eppstein also validated strong momentum for 5G Core, standalone, and Open RAN deployments in the U.S., Europe, Japan, and Asia, driven by the need for cloud-native applications and NVIDIA's user plane visibility.

Ryan Koontz of Needham & Company asked for details on RADCOM's growth drivers, including the mix between existing and new customers, the revenue split from 5G versus legacy networks, the status of the Tier 1 pipeline, opportunities in the direct-to-device satellite market, and any changes in the competitive landscape.

Answer

CEO Benny Epstein projected that future growth would come approximately two-thirds from existing customers and one-third from new logos. He noted that while 5G is the focus, legacy LTE networks remain significant. Epstein confirmed RADCOM is in several global Tier 1 RFPs with decisions expected in H2 2025, is pursuing satellite opportunities, and sees no major shifts in the competitive environment as peers move away from the telco sector.

Ryan Koontz inquired about the expected growth in production-scale 5G standalone networks among RADCOM's customers, the drivers of gross margin variability, the scale of the opportunity with the ServiceNow partnership, and the deployment model for its NVIDIA collaboration.

Answer

Executive Benny Eppstein projected a continued growth pace for 5G SA deployments and highlighted the significant pipeline expansion opportunity through the ServiceNow partnership. He also detailed the NVIDIA collaboration, which involves deploying DPUs in customer servers. CFO Hadar Rahav clarified that gross margins, typically 72-76%, were higher in Q1 due to a favorable revenue mix with fewer third-party components.

Ryan Koontz asked for an overview of the 5G sales opportunity across different geographies and questioned whether demand is driven more by Voice over New Radio (VoNR) or data applications, including the expected timing for VoNR deployments.

Answer

Executive Hilik Itman identified North America and Europe as the primary focus areas due to their advanced progress in 5G stand-alone and cloud migration. He confirmed that the company's platform, enhanced with AI and analytics, is well-positioned for these trends. Itman stated that Voice over New Radio is currently generating the most significant interest because of the critical need for assurance tools in this new technology transition, and he affirmed that VoNR deployments are expected in 2025.

Ryan Koontz inquired about the main drivers behind the Tier 1 North American ramp-up, potential concerns regarding satellite direct-to-device technologies, an update on E2E commercial activity and private networks outlook, and any new supply chain concerns.

Answer

CEO Doron Arazi stated that the North American drivers are multifaceted, including 5G capacity upgrades, increased fixed wireless access load, and expanded coverage for FCC commitments. He views satellite/LEO as an augmenting technology for rural areas, not a direct competitor to Ceragon's wireless solutions. Regarding E2E, Arazi confirmed it is meeting plans with strong traction and sizable opportunities, noting synergies across regions despite some delays from U.S. administration strikes. On supply chain, he mentioned slight component cost increases managed by cost reduction efforts and second sourcing, with no significant scarcity issues beyond typical tactical shortages.

Ryan Koontz inquired about the primary drivers for the Tier 1 ramp-up in North America, specifically asking if it was due to capacity upgrades, new mobile coverage, or fixed wireless access. He also asked about potential concerns regarding satellite direct-to-device technologies, the commercial activity and 2026 outlook for E2E, and any supply chain issues related to component availability, costs, or DRAM price increases.

Answer

CEO Doron Arazi stated that the North American Tier 1 ramp-up was driven by all factors: constant demand for higher capacity due to 5G, successful fixed wireless access subscriptions, and expanded coverage for FCC commitments. He viewed LEO/satellite as an augmenting technology for rural areas, not a direct competitor to Ceragon's wireless solutions. Mr. Arazi reported that E2E is meeting plans, with potential for exceeding them if not for U.S. administration strikes, and is generating synergies across regions. Regarding the supply chain, he noted slight component cost increases but no significant impact on BOM due to ongoing cost reduction efforts, and no major component scarcity issues beyond typical tactical shortages.

Inquired about the geographic origin of the two 10% customers, the nature and timing of emerging Tier-1 opportunities in North America, and the business performance of the recent E2E acquisition, particularly in private networks and the energy sector.

Answer

The two 10% customers were from both India and North America. The new North American Tier-1 win is part of a broader trend of using FR2 frequencies for new use cases like fixed wireless access and is expected to contribute significantly to revenue in 2026. The E2E acquisition is performing according to plan, with bookings ahead of schedule, despite some market slowdowns in the private network segment due to external factors.

Questioned the differentiation of the new E-Band product for India, the competitive landscape in developed markets like North America and Europe, and the estimated market share of Chinese competitors in Europe.

Answer

The new E-Band product for India is differentiated by offering top-tier technology at a cost structure suitable for that market. The competitive landscape in developed markets is stable, with a growing opportunity in Europe to replace Chinese vendors who have a significant existing market share.

Inquired about the go-to-market channel strategy for private networks, the typical size of direct deals, and the potential impact of new internal silicon development on gross margins in 2025.

Answer

The private network strategy uses a mix of direct sales for large deals and indirect channels for smaller ones, with no major impact expected on the cost model. Direct deals are typically in the low single-digit millions. New silicon products are not expected to have a material impact on 2025 gross margins due to the projected sales volume ramp-up.

Ryan Koontz inquired about the drivers behind Rocket Lab's strong launch bookings and backlog, specifically asking about international, defense, and government use cases. He also questioned Electron's supply chain readiness for increased demand and sought clarification on one-time events impacting launch gross margins.

Answer

Peter Beck, Founder and CEO, Rocket Lab, noted strong commercial bookings and increasing standardization of Electron by international space agencies. He confirmed Electron's 90%+ in-house production capacity for 52 rockets annually. Adam Spice, CFO, Rocket Lab, explained that strong contract terms protect against customer cancellations and detailed the transition to over-time revenue recognition for some HASTE missions, which now contributes to more predictable revenue.

Ryan Koontz asked for an update on the gross margin progress and trajectory of the acquired Solero solar power business.

Answer

CFO Adam Spice reported very strong progress, with the Solero business achieving margins above its long-term target of 30% in the quarter, a significant improvement from the high-single-digit margins at acquisition. CEO Sir Peter Beck added that future demand looks strong, driven by large national security programs like Golden Dome, and that CHIPS Act funding will help modernize facilities and drive further efficiencies.

Ryan Koontz asked for details on the new modular solar array products, their target applications, and for a summary of the company's strategic opportunities in the European market.

Answer

CEO Peter Beck explained that the 'Star Ray' modular solar arrays are a quick-turn, plug-and-play solution designed to help customers get to orbit faster, moving the company from a cell supplier to a complete array manufacturer. Regarding Europe, Beck stated that it has been a protected market, and establishing a physical footprint there, such as through the Mynaric acquisition, opens up significant TAM expansion for Rocket Lab's full product suite, especially in government programs.

Ryan Koontz asked about the communication services backlog and the anticipated impact of Viasat 3 Flight 2's capacity, specifically inquiring what percentage of the backlog is dependent on F2 and how pent-up demand will translate into revenue, considering the six-month launch-to-service timeline. He also sought updated insights on the evolving aviation environment.

Answer

Chairman and CEO Mark Dankberg clarified that growth in areas like consumer broadband, increased bandwidth consumption in aviation, and maritime will manifest as recurring revenue (e.g., ARPA or plane counts) rather than directly from backlog, as these are not backlog items. He stated that the business anticipates growth based on service plans, pricing, and existing customer relationships. Regarding the aviation environment, Dankberg noted trends of greater airline penetration, an emphasis on free Wi-Fi for streaming, and the increasing challenge of high-demand locations. He highlighted Viasat's focus on helping airlines achieve competitive advantage and differentiation beyond just free Wi-Fi through various monetization techniques, given the industry's recognition of the need for high-quality connectivity for all passengers.

Ryan Koontz asked about the Communication Services backlog and the impact of ViaSat-3 Flight 2 capacity, specifically regarding pent-up demand, timing (launch to service), and the percentage of backlog dependent on F2. He also sought updated thoughts on the evolving aviation environment, including greater penetration, the role of free Wi-Fi, and strategies for competitive advantage and monetization techniques.

Answer

Mark Dankberg, Chairman and CEO, explained that Flight 2's impact wouldn't primarily show up in backlog but rather in increased usage, ARPA, and plane counts for consumer, aviation, and maritime services. He noted that airlines' service plans and monetization models are already baked into relationships. Gary Chase, CFO, reiterated that it would mostly be reflected in 'walkaway usage.' Mark Dankberg further discussed aviation trends, highlighting greater penetration, emphasis on free Wi-Fi for streaming, and the increasing importance of competitive differentiation and monetization techniques as airlines recognize the need for high-quality connectivity.

Ryan Koontz (referred to as Ryan Poultz in the transcript) asked about the drivers of sequential growth in the Maritime business and expressed interest in the performance of the OneWeb partnership for the NexusWave service.

Answer

After a clarification from management that growth was in Maritime, not Fixed Broadband, CEO & Chairman Mark Dankberg attributed the sequential growth to the rapid adoption of the NexusWave hybrid LEO/GEO service. He noted it commands higher ARPU due to increased bandwidth for crew and operational services. He also expressed confidence in the growth runway by augmenting the OneWeb partnership with Viasat's GEO capacity.

Matt, on for Ryan Koontz at Needham & Company, asked for more detail on the demand for the NexusWave maritime service and the expected ramp-up in installations and revenue.

Answer

CEO Mark Dankberg reported a positive reception for NexusWave, with a growing pipeline that has surpassed 4,000 vessels. He stated the pipeline is converting to orders in the 'low hundreds,' with a target to install a similar number this quarter. He expects significant growth in installations during fiscal 2026, leading to a stabilization and then growth in net vessels, followed by revenue and eventually EBITDA growth for the maritime segment.

Ryan Koontz of Needham & Company asked for clarification on the comment about 'decelerating broadband headwinds,' questioning how that aligns with the segment's continued revenue decline.

Answer

Chairman and CEO Mark Dankberg explained that the 'deceleration' refers to the year-over-year decline in dollar terms, not a reversal of the trend. He attributed the ongoing decline to two main factors: the strategic reallocation of satellite capacity from fixed broadband to higher-value mobility services and the industry-wide increase in bandwidth consumption per user, which reduces the number of subscribers a satellite can support.

Ryan Koontz asked for management's view on the macro trends of Silicon Photonics (SIFO) versus EML versus VCSELs as data rates increase to 800G and 1.6T, based on customer feedback. He also inquired about the company's market share in the CATV segment, specifically whether the recent demand uptick represents share gain or higher deployment rates, and sought clarification on the 'new products' in cable (nodes or software).

Answer

Dr. Stefan Murray (CFO and Chief Strategy Officer, Applied Optoelectronics) stated that customers view SIFO as having more scalability for higher data rates than EMLs, acknowledging that customer feedback is influenced by AOI's capabilities. Dr. Thompson Lin (Founder, Chairman, and CEO, Applied Optoelectronics) highlighted SIFO's advantage in requiring fewer lasers, which is critical given the current laser shortages, especially for EMLs. For CATV, Dr. Murray indicated that the demand uptick is primarily due to share gain, with successful interactions with major MSOs and smaller operators. Dr. Lin added that AOI has seven 1.8 GHz CATV customers (including Charter) and expects to add ten more by the end of next year, emphasizing that new products include both nodes and software (QuantumLink and Quantum Bridge), which customers value for operational cost savings.

Ryan Koontz asked about the company's view on silicon photonics (SIFO) versus EML and VCSEL technologies, particularly for 800G and 1.6T data rates. He also inquired about the company's CATV market share, whether the demand uptick represents share gains or higher deployment rates, and if new cable products refer to nodes or software solutions.

Answer

CFO and Chief Strategy Officer Stefan Murray stated that customers favor AOI's SIFO solution for its scalability to higher data rates compared to EMLs, noting SIFO is in early stages of volume manufacturing. CEO Thompson Lin highlighted SIFO's advantage in requiring fewer lasers, addressing the current laser shortage, especially for EMLs. Stefan Murray confirmed that the CATV demand increase is primarily due to share gains, driven by successful interactions with major MSOs and smaller operators. Thompson Lin added that the company has seven 1.8 GHz CATV customers (including Charter) and expects to reach 17 by the end of next year across various regions. He clarified that new cable products encompass both nodes and software solutions like QuantumLink and Quantum Bridge, which customers value for operational efficiency.

Ryan Koontz of Needham & Company, LLC inquired about Applied Optoelectronics' CATV business, focusing on customer inventories, production capacity for Motorola housings, and plans for a node product. He also asked about the number of tier-one customer engagements for 800G and higher-speed transceivers.

Answer

CFO and CSO Dr. Stefan Murry clarified that AOI is producing both Motorola and Gainmaker amplifier platforms to build inventory and meet evolving customer needs, expecting a modest sequential increase in CATV revenue. He also confirmed the node product is slated to launch in Q4 2025, with revenue expected by Q1 2026. CEO Dr. Thompson Lin stated there are three serious tier-one engagements for 800G and highlighted the strategic importance of 1.6T, with volume production anticipated around mid-2026. Dr. Murry added that the current capacity expansion for 800G will also support 1.6T production.

Ryan Koontz asked about Lumentum's continuous wave (CW) laser output, its market opportunity, and whether it's intended for internal use in their own optical transceivers. He also inquired about the competitive landscape and customer base for narrow linewidth lasers used in Data Center Interconnect (DCI).

Answer

President and CEO Michael Hurlston explained that the 70mW CW laser is shipping to external customers as a 'pipe cleaner' for eventual internal use of a 100mW CW laser in Lumentum's own transceivers by mid-calendar 2026. For narrow linewidth lasers, Michael and President of Global Business Units Wupen Yuen highlighted Lumentum's strong market share, limited competition, and a customer base that has pivoted from traditional telecom to hyperscalers.

Ryan Koontz asked about the market opportunity for Lumentum's new continuous wave (CW) laser output, its intended use in their own optical transceivers, and the target customer base. He also sought clarification on the competitive landscape and Lumentum's market position for narrow linewidth lasers used in DCI applications.

Answer

President and CEO Michael Hurlston explained that the 70mW CW laser, shipping meaningfully this quarter, serves as a 'pipe cleaner' for external customers before the 100mW CW laser (sampling this month, full production mid-calendar 2026) is integrated into Lumentum's internal transceivers. For narrow linewidth lasers, Michael Hurlston highlighted Lumentum's strong market share and limited competition, serving traditional telecom customers pivoting to hyperscalers. President of Global Business Units Wupen Yuen affirmed their strong, long-standing market position, noting the difficulty of ramping this technology.

Ryan Koontz inquired about the growth rate of the ZR market, Lumentum's component opportunities within it, and the competitive dynamic between EML-based and silicon photonics-based transceivers.

Answer

President and CEO Michael Hurlston confirmed strong demand for its narrow linewidth lasers for ZR modules, stating they are sold out for the fiscal year. President of Cloud & Networking Wupen Yuen estimated 30% annual volume growth for the ZR market. Both executives noted that while silicon photonics is a factor, the market is supply-constrained and EML demand remains robust.

Ryan Koontz of Needham & Co. asked about customer sentiment regarding moving away from Chinese transceiver suppliers. He also inquired about the business impact of the mix shift within the telecom portfolio toward DCI for hyperscalers.

Answer

CEO Michael Hurlston acknowledged customer interest in diversifying from Chinese suppliers but noted that non-Chinese capacity is not yet sufficient to meet insatiable demand. On the telecom shift, Hurlston, along with Wupen Yuen and Wajid Ali, highlighted that DCI and other hyperscaler-driven products like pump lasers are a significant growth driver. CFO Wajid Ali added that DCI products are accretive to gross margin, even above the company's 40% target, boosting confidence in future profitability.

Ryan Koontz asked about Lumentum's exposure to the shift from DCI systems to pluggables and whether this trend is a tailwind for the company. He also inquired about any notable interest from the satellite communications industry for free-space optics.

Answer

President and CEO Alan Lowe stated that the growth in DCI pluggables like 400G and 800G ZR is additive to the market, not cannibalizing traditional systems, and represents a strong growth area for Lumentum's components. He confirmed they are adding capital to meet this demand. Regarding satellite communications, he noted that while Lumentum has some growing business in this area, it remains a relatively small opportunity compared to the data center market.

An analyst from Needham & Co. asked about Lumentum's opportunity in DCI modules and the expected gross margin trajectory for the fiscal year.

Answer

President and CEO Alan Lowe stated that the primary DCI exposure is through tunable lasers sold to other module makers, as Lumentum has a small share in 400G ZR modules. EVP and CFO Wajid Ali projected sequential gross margin improvement throughout the fiscal year, driven by better utilization, though this will be partially offset by planned increases in R&D spending to capture strong customer demand.

Ryan Koontz asked if the concept of distributed clusters due to power requirements is already impacting demand for ZR products within DCI, given the shift to AI infrastructure. He also inquired whether the growth in non-DCI telecom revenue was primarily due to market share gains or new program wins.

Answer

Chairman and CEO Seamus Grady stated that Fabrinet focuses on fulfilling strong demand rather than analyzing its exact reasons, but agreed that distributed clusters should drive more DCI (400ZR and 800ZR) in the future. For non-DCI telecom, Mr. Grady indicated that growth was a combination of both chipping away at competitors (share gains) and the ramping of newer programs that have been recently won.

Ryan Koontz asked if the concept of distributed clusters due to power requirements is already impacting demand for ZR products in DCI, or if that effect is still anticipated. He also inquired whether the growth in non-DCI Telecom revenue was primarily due to market share gains or new program wins.

Answer

Seamus Grady, Chairman and CEO, stated that Fabrinet focuses on fulfilling strong demand rather than analyzing its exact reasons, but acknowledged that distributed clusters could indeed drive further DCI demand for 400ZR and 800ZR. Regarding non-DCI Telecom, Mr. Grady indicated that the growth was a combination of both market share gains from competitors and the ramping of newer programs that Fabrinet has recently won.

Ryan Koontz inquired about the demand visibility for 800G products in fiscal 2026, the outlook for the automotive segment, and the potential impact of tariffs on the business.

Answer

CEO Seamus Grady stated that 800G visibility is 'quite good' and that the current challenge is supply, not demand. He characterized the automotive outlook as 'steady,' driven by market share gains in EV charging infrastructure. Regarding tariffs, he noted no meaningful impact, as customers are the importer of record and many products do not ship directly to the U.S.

Ryan Koontz asked for commentary on potential tariff impacts, particularly regarding loopholes for Chinese facilities in other countries. He also requested a progress update on the construction of Building 10, including key milestones and a potential timeline for initial production.

Answer

CEO Seamus Grady responded that Fabrinet has not seen any material impact from tariffs to date, as customers are typically responsible for them under FOB shipping terms, and demand remains strong. On Building 10, he confirmed the project is on track with its original 18-month timeline since breaking ground in January. He added that the company is fully committed to the expansion and is even exploring options to accelerate it if needed, as they anticipate needing all the additional capacity.

Ryan Koontz asked about the transition from 400ZR to 800ZR, whether the datacom softness is affecting high-speed or low-speed products, and the timeframe for bringing the new Building 10 capacity online.

Answer

CEO Seamus Grady and CFO Csaba Sverha responded. Grady confirmed 400ZR remains the dominant force but noted that Fabrinet has qualified and shipped some 800ZR products. He clarified the datacom softness is in high-speed 800G products due to a transition. Sverha stated the new building has an 18-month lead time, with CapEx spread over the next 6-8 quarters.

Ryan Koontz of Needham & Company asked for details on the telecom business, specifically the role of 400ZR, potential cannibalization of legacy products, the number of ZR customers, and the timing for 800ZR volumes.

Answer

CEO Seamus Grady confirmed that 400ZR is a primary growth driver and that traditional telecom demand is beginning to recover. While uncertain about cannibalization, he noted Fabrinet has six ZR customers of varying sizes. He also stated that 800ZR products are already shipping.

Ryan Koontz inquired about the commercial introduction of Extreme Platform One, including any available metrics or qualitative customer feedback on traction and renewals. He also asked how investors should view Extreme Networks' long-term revenue growth prospects relative to its Total Addressable Market (TAM) growth, considering current share gains and market strength, and requested an update on the Managed Service Provider (MSP) count.

Answer

President and CEO Edward B. Meyercord stated that it's early for specific metrics as Extreme Platform One went GA at the beginning of Q1 FY26, with full customer migration expected towards the end of the calendar year. He noted high adoption and excitement, especially for the new service agent, and Executive Vice President and CFO Kevin Rhodes added that adoption was ahead of expectations. For long-term growth, Mr. Meyercord discussed repointing year-over-year growth to 10%, highlighting TAM expansion through SD-WAN wins, federal market certifications, cloud operations investments in Europe, and growing MSP traction. Mr. Rhodes emphasized the 24% year-over-year SaaS ARR growth and the company's transformational journey towards more recurring revenue and improved margins. Mr. Rhodes confirmed the current MSP count is 61.

Ryan Koontz asked for an update on the commercial introduction of Extreme Platform ONE, seeking metrics or qualitative feedback from customers regarding renewals and overall traction. He also inquired about Extreme Networks' long-term revenue growth prospects relative to its Total Addressable Market (TAM) growth, considering current share gains and market strength, and requested the latest Managed Service Provider (MSP) count.

Answer

President and CEO Ed Meyercord stated that while it's early for specific metrics, Extreme Platform ONE went GA in Q1, and customers are adopting licenses with backward compatibility. He noted high adoption and excitement, especially for the new service agent, with full migration expected by year-end. EVP and CFO Kevin Rhodes added that Platform ONE adoption was ahead of expectations. Meyercord explained that Extreme is expanding its TAM through innovative solutions like Fabric over SD-WAN, federal market certifications, and growth in MSP partnerships. He projected Extreme as a double-digit growth player with increased emphasis on services and solutions from Platform ONE. Rhodes emphasized that new commercial models and Platform ONE drive SaaS ARR growth, contributing to improved margins and profitability. Rhodes confirmed the current MSP count is 61.

Ryan Koontz from Needham & Company inquired about the Q4 contribution from Extreme Platform One, the growth trajectory of its MSP partners, and the competitive opportunity in the Fortune 500 following the HPE-Juniper merger.

Answer

President & CEO Ed Meyercord explained that Platform One just became generally available and its meaningful financial impact is expected in the second half of fiscal 2026. CFO Kevin Rhodes added that recent subscription booking growth was driven by large wins and new commercial models, not yet Platform One. Meyercord characterized the MSP program as being in its 'early innings' despite doubling to 53 partners, with a newly automated platform expected to drive momentum. He also noted that Extreme is successfully moving upmarket and winning large deals by demonstrating the superior performance of its fabric technology against competitors.

Ryan Koontz asked for a regional perspective on channel inventory and demand trends in Europe versus North America, and inquired about any early traction for Platform ONE across specific geographies.

Answer

President and CEO Ed Meyercord explained that channel inventory has normalized and real demand has returned. He noted strong execution in the Americas, upcoming tailwinds from Germany, and significant wins in Japan. For Platform ONE, he said traction is 'across the board,' with early E-Rate quoting resulting in approximately 100 customers and encouraging feedback from MSPs, which are heavily weighted in Europe.

Ryan Koontz asked for clarification on geographic performance, specifically the drivers behind the decline in the U.S. versus growth in EMEA, the impact of foreign exchange, and the company's view on the pending HP and Juniper merger.

Answer

CEO Ed Meyercord explained that U.S. results were impacted by normal K-12 seasonality, while EMEA's growth was strong despite a slowdown in Germany, where he expects pent-up demand to be released. CFO Kevin Rhodes noted that FX impact is minimal due to hedging. Regarding the HP-Juniper deal, Meyercord stated that Extreme would be a net beneficiary from the disruption and that any regulatory delays create customer caution that could help Extreme.

Ryan Koontz asked for an update on the progress of go-to-market changes and their impact on bookings and pipeline. He also inquired about the overall pricing environment and whether larger competitors were behaving irrationally due to inventory levels.

Answer

CEO Ed Meyercord detailed significant changes, including a new CMO and better alignment between marketing and sales, leading to higher quality funnel and better conversion rates. He described the pricing environment as stable, noting Extreme's discounting improved and its channel inventory is in better shape than some competitors. While acknowledging that uneconomic behavior can occur, he stated Extreme tends to fly under the radar of larger competitors.

Ryan Koontz asked about F5's progress in migrating end-of-life products, inquiring about any push-outs or time frame breaks offered to customers due to the breach. He also asked about new activities or picking up momentum in the telecom domain related to the new 5G core.

Answer

Cooper Werner, EVP and CFO, stated that F5 is still in the early days of the refresh motion, with well over 50% of the installed base on legacy platforms, and has not adjusted the public end-of-software-support dates. François Locoh-Donou, President and CEO, noted that while the 4G-5G transition continues with some growth in implemented 5G environments, the overall telecom segment has been tepid due to slower-than-expected 5G adoption and pressure on CapEx spend, without a substantial uptick for F5.

Ryan Koontz asked about the current stage of migration for end-of-life products, the future outlook for this migration, and if F5 is offering any time frame breaks to customers due to the breach. He also inquired about new activities in the telecom domain, specifically around the new 5G core, and if momentum is picking up.

Answer

Cooper Werner (EVP and CFO, F5) stated that F5 is still early in the refresh motion, with over 50% of the installed base on end-of-life platforms, and F5 has not adjusted the public end-of-software-support dates. François Locoh-Donou (President and CEO, F5) noted that the 4G-5G transition continues with some geographies ahead, and while 5G deployments show capacity growth, the expected revenues for telecom operators haven't materialized, pressuring CapEx. F5 continues to find new use cases but hasn't seen a substantial uptick in the overall segment.

Ryan Koontz sought clarification on whether 'tech refresh' refers to F5-to-F5 upgrades. He also asked about the status and customer reception of the company's recent price increase, particularly in relation to competitors' pricing actions.

Answer

CFO Cooper Werner confirmed that 'tech refresh' primarily refers to F5's own installed base, though competitive displacements are a separate growth driver. He stated the January price increase is now flowing through the model with reasonable customer reception, noting that more aggressive pricing from peers has actually driven some business to F5.

Speaking on behalf of Ryan Koontz, an analyst from Needham & Company asked about the competitive displacement opportunity, seeking to understand where F5 is in that cycle and its potential duration. A follow-up question clarified whether the new Application Delivery and Security Platform (ADSP) was centered only on BIG-IP.

Answer

President and CEO François Locoh-Donou stated that F5 is in the 'early innings' of its competitive displacement opportunity, with most of the potential still ahead. He clarified that the new ADSP is a comprehensive platform that integrates all three product families—BIG-IP, F5 Distributed Cloud, and NGINX—to accelerate the consolidation of point products onto F5's unified stack.

Ryan Koontz of Needham & Company asked about the status and longevity of F5's competitive displacement opportunity. He also sought clarification on whether the new Application Delivery and Security Platform (ADSP) is centered on BIG-IP or encompasses a broader product set.

Answer

CEO François Locoh-Donou stated that F5 is still in the 'early innings' of its competitive displacement opportunity, with the majority of potential gains still ahead. He explained the displacement occurs in two ways: winning new accounts and consolidating point products within existing accounts. He clarified that the new ADSP is a comprehensive platform that brings together all three product families—BIG-IP, Distributed Cloud, and NGINX—under a single umbrella.

Ryan Koontz sought clarification on the BEAD win, asking if it was for middle-mile optical and aggregation, specifically backhaul from remote nodes, and whether such projects are typically handled by local incumbent telcos or third parties. He also asked how to think about the mix of product and service for Verizon going forward, inquiring if it would remain seasonal or how to frame it over the next 18 months. Lastly, he questioned Ribbon's strategy regarding agentic AI, assuming they are primarily selling session border controllers (SBCs) into these applications, and how they view this early market development.

Answer

CEO Bruce McClelland confirmed the BEAD win is for 'middle mile, IP over DWDM type infrastructure or network design.' He clarified that this specific project involves 'a number of operators kind of working together on the infrastructure,' rather than a consortium or solely an incumbent telco. For Verizon, Mr. McClelland indicated that while there's a background of modernization activity, additional software-oriented business will create 'a little bit of variability' and lumpiness in the product/service mix. Regarding agentic AI, he confirmed that SBCs are the core of the solution, with significant interest in cloud-native versions (SaaS, AWS-based). He highlighted Ribbon's leadership in cloud-native SBCs, policy routing, analytics, management systems, and WebRTC APIs, which provide programmatic access to telecom network functions for sophisticated agentic AI platforms.

Ryan Koontz from Needham & Company sought clarification on the BEAD win, specifically if it was for middle mile optical and aggregation, serving as backhaul from remote nodes, and whether such projects are typically handled by local incumbent telcos or third-party consortia. He also asked how to anticipate the mix of product and service for Verizon going forward, and inquired about Ribbon's agentic AI applications, assuming they primarily involve selling session border controllers (SBCs), and the origin of the underlying technology stack.

Answer

CEO Bruce McClelland confirmed the BEAD win was for middle mile IP over DWDM infrastructure, and in this specific case, involved a number of operators working together rather than a consortium. For Verizon, Mr. McClelland advised thinking of it as a background of modernization activity with additional, more variable transactions throughout the year, leading to some lumpiness. Regarding agentic AI, Mr. McClelland stated that the core solution is indeed a session border controller, with most interest in cloud-native versions deployed in SaaS environments (e.g., AWS). He emphasized Ribbon's leadership in cloud-native SBCs, policy routing, analytics, management systems, and WebRTC APIs, which provide programmatic access to telecom network functions. He added that the core technology is versatile, deployable in both telecom and enterprise networks, with different positioning and packaging.

Ryan Koontz of Needham & Company asked for details on the Class 5 switch replacement opportunity, the customer CapEx environment following recent tax changes, and spending trends in private networks for government and enterprise.

Answer

President, CEO & Director Bruce McClelland confirmed a strong correlation between fiber upgrades and Class 5 switch modernization, driven by telco OpEx reduction. He noted that while recent tax law changes are a tailwind for customer CapEx, it's too early to see the full impact. McClelland also described a strong pipeline for voice modernization with DOD agencies and growing wins in U.S. critical infrastructure, with plans to expand these efforts in Europe.

Ryan Koontz inquired about the international opportunity and competitive landscape for the Cloud & Edge business, and also asked for the IP Optical segment's growth rate excluding the impact from Eastern Europe.

Answer

CEO Bruce McClelland noted that while North America is historically stronger, Ribbon is gaining international traction in Cloud & Edge, highlighted by a European Tier 1 win driven by its cloud-native offerings. He stated that excluding the sizable Eastern Europe revenue from early 2024 would have resulted in approximately 3-4% higher sales growth for the company last year.

Ryan Koontz asked about the percentage or range of satellite capacity dedicated to the Japan and Germany satellite services deals, specifically if these dedicated satellites represent 100% of their capacity. He also requested updates on Planet's maritime domain awareness solutions approach, including partners like SIMAX, and product developments.

Answer

Will Marshall (Co-Founder, CEO & Director, Planet Labs) clarified that the Japan deal represents a tiny fraction of Planet's overall capacity, with the majority still serving other customers, primarily focused on the Fiji region. The Germany deal leverages existing Pelican plans and also constitutes a small fraction of overall capacity, focused on the European context. Regarding maritime domain awareness, Mr. Marshall highlighted the expansion with the U.S. Navy (a sole-source contract due to Planet's unique broad area monitoring capabilities), partnerships with NATO, and its status as Planet's most mature AI-enabled solution. He noted it's also part of the Germany deal, which includes an eight-figure annual contract for data and solutions.

Ryan Koontz of Needham & Company asked for a breakdown of gross margin drivers, including the impact of the JSAT contract, and for commentary on Planet's U.S. Federal civil exposure, particularly with NASA.

Answer

President & CFO Ashley Fieglein Johnson explained that while partner solutions and the JSAT contract create short-term margin pressure, the JSAT deal's structure allows for monetization of excess capacity, aligning its long-term margin profile with the core business. CEO Will Marshall added that while NASA faces budget uncertainty, the government's push for efficiency is an opportunity for Planet's lower-cost solutions.

Ryan Koontz asked how much the FY26 revenue guidance accounts for potential disruption from the current political situation in Washington D.C., especially regarding the civil government sector.

Answer

CFO Ashley Whitfield Johnson responded that the guidance takes an 'appropriately conservative' approach, factoring in macro pressures and potential delays. CEO William Marshall added that the environment also creates opportunities, as government agencies seek efficiency—a core Planet value proposition. He also noted that geopolitical uncertainty is driving increased international demand.

Ryan Koontz of Needham & Company asked about the factors impacting the Q4 revenue guidance, particularly the effect of deal slips like the delayed NASA renewal. He also inquired about the typical onboarding time for large customers and the current competitive landscape for Planet's tasking and data analytics offerings.

Answer

CFO Ashley Johnson attributed the Q4 guidance to the timing of the NASA renewal, the necessary ramp time for large Q3 bookings, and some quarter-to-quarter usage variability. She noted onboarding time depends on customer complexity. CEO Will Marshall highlighted Planet's competitive advantages, including the unique daily scan enabling 'Tip & Cue' analysis, and upcoming Pelican enhancements like on-edge AI and satellite-to-satellite links that will speed up time-to-insight.

Ryan Koontz of Needham & Company asked for clarification on the drivers behind the sequential revenue decline in North America and the decrease in Remaining Performance Obligations (RPO), as well as the factors contributing to the strong gross margin improvement.

Answer

Ashley Whitfield Johnson, President, explained that the lumpiness in RPO and North American revenue is often due to the timing of large, one-year government contract renewals. She specified that the region's growth rate was particularly impacted by headwinds in the commercial sector. Regarding gross margins, Johnson attributed the strength to cloud infrastructure efficiencies driven by engineering teams, a favorable business mix with fewer partner-related costs in the quarter, and the inherent scalability of adding new data customers.

Ryan Koontz from Needham & Company sought clarification on the gross margin outlook for the next twelve months, the go-to-market strategy for the growing drone business, and further details on the cell site backup power win, including the potential for similar opportunities.

Answer

President & CEO Saleel Awsare stated that gross margins are expected to recover to the 44-45% range for the fiscal year, moving past one-time charges for tariffs and inventory in Q4. CFO Brent Stringham affirmed this trend. Regarding the drone market, Awsare explained their go-to-market involves a key partnership with Teledyne FLIR, which pulls them into deals, alongside direct engagements like the Redcat win. For the major mobile carrier win, he confirmed it involves 50,000 gateways with potential to triple, and importantly, includes the Percepxion software platform, which will generate a growing stream of annual recurring revenue (ARR).

Ryan Koontz asked for a high-level perspective on the smart grid opportunity beyond the Gridspertise contract, including the competitive landscape and channel strategy. He also inquired about the long-term outlook for the legacy switching and out-of-band businesses.

Answer

CEO Saleel Awsare detailed the company's focus on its 'smart LV box' for edge grid management, highlighting a proof-of-concept in Europe and engagement with their largest grid customer for this new technology. For legacy products, he stated that out-of-band is a growing business and that he sees an opportunity to gain market share in switching, partly due to Lantronix's position as a vested U.S. supplier.

Ryan Koontz from Needham & Company asked about the strategic synergies of the NetComm acquisition, the target applications for the company's Edge AI initiatives, the outlook for the large European smart grid customer, and the nature of the enterprise slowdown.

Answer

CEO Saleel Awsare explained that the NetComm acquisition adds 5G gateways, blue-chip enterprise customers for cross-selling, and opens new markets like Australia, expecting the acquired revenue to grow 20% in calendar '25. For Edge AI, Awsare identified enterprise video conferencing, smart grids, and industrial automation as key verticals. He reiterated that the European smart grid customer is on track with the previously stated $10 million shipment plan for the first half of fiscal '25 and clarified the enterprise slowdown was related to cautious spending from government, insurance, and banking customers.

Ryan Koontz from Needham & Co. asked for the revenue timeline for the new autonomous truck engagement, the primary drivers of the significant inventory reduction, the current status of component lead times, and more architectural details on the company's Edge AI solutions.

Answer

CEO Saleel Awsare clarified that a hardware revenue timeline for the new automotive deal has not been set, as the initial PO is for software and services. CFO Jeremy Whitaker confirmed that the largest factor in inventory reduction was shipments to their smart grid customer. Awsare added that component lead times are now "very manageable." He also provided examples of Edge AI applications, such as autoframing in videoconferencing and grid load balancing, emphasizing a focus on edge inferencing with partner Qualcomm.

Ryan Koontz of Needham & Company inquired about the production and margin ramp at Stellar Blue, the fulfillment and pricing model for the new virtualized SkyEdge Four platform, and the outlook for major business decisions in Peru for the second half of the year.

Answer

CEO Adi Sfadia confirmed that the Stellar Blue production ramp is progressing despite a component challenge, with increased deliveries expected in Q3 and Q4. CFO Gil Benyamini added that margins will improve materially by early next year. Regarding SkyEdge Four, Sfadia described the initial win as a software license sale for commercial off-the-shelf hardware, with options for subscription models. He also noted that another large order and several RFPs are expected for the Peru business.

Ryan Koontz asked about the sufficiency of go-to-market resources for the Stellar Blu unit, the nature of its sales relationships, and the differentiation of its upcoming next-generation product.

Answer

CEO Adi Sfadia affirmed that Stellar Blu is on track with its guidance and has sufficient internal resources, supported by a strong backlog. He described the sales process as primarily technical, working with service providers like Intelsat and Panasonic. He also clarified the next-gen product is an adaptation of the Sidewinder ESA for military, ISR, and VVIP markets, with orders expected by early 2026.

Ryan Koontz inquired about the production ramp volume for Stellar Blu in Q4 and the first half of 2025, the financial impact of exiting Russia on 2024 revenue, and the current competitive environment in the In-Flight Connectivity (IFC) market.

Answer

CEO Adi Sfadia reported that Stellar Blu delivered approximately 75 units in Q4 2024, with installed systems performing well. Regarding Russia, Sfadia and CFO Gil Benyamini confirmed the business decline was about $10 million year-over-year. On the competitive landscape, Sfadia positioned the Stellar Blu terminal as the leading multi-orbit ESA solution and noted that the overall IFC market growth is accelerating due to the industry's shift toward offering free WiFi to passengers.

Ryan Koontz inquired about Gilat's organic business performance, specifically the impact of its exit from Russia, the outlook for the organic business, the current situation in Peru, and an update on the Stellar Blu acquisition.

Answer

CEO Adi Sfadia clarified that the exit from Russia, a market worth about $10 million annually, is in process and no new revenues are expected from Q3 onward. He described the Peru business as stable, with 80% recurring revenue and an expansion project nearing completion. Regarding Stellar Blu, Sfadia noted the acquisition closing is delayed by regulatory approvals but reiterated revenue guidance of $25-$35 million for Q4 2024 and $120-$150 million for 2025, expecting it to be accretive.

Ryan Koontz asked for a breakdown of end-market performance within the NSE segment (broadband, optical, wireless) and questioned how the better-than-seasonal Q1 guidance should influence expectations for seasonality for the rest of fiscal 2026.

Answer

President and CEO Oleg Khaykin emphasized that growth is driven by "fiber, fiber, and more fiber," with strong demand from the data center ecosystem and a recovery in service provider fiber spend, while wireless remains a laggard. He explained that the growing data center business, which has a counter-cyclical demand pattern to service providers, is muting traditional seasonality and should lead to less quarter-over-quarter volatility.

Ryan Koontz asked for an outlook on key technology domains, specifically Viavi's exposure to the data center and AI opportunities, and requested an update on the divestiture process related to a recent acquisition.

Answer

CEO Oleg Khaykin identified the 'fiber lab and production' segment as a proxy for data center and AI demand, expecting it to be a strong growth driver through calendar '25. He also highlighted the aerospace and defense business, boosted by the Inertial Labs acquisition, as another key growth area. Regarding the divestiture process involving Keysight, Khaykin deferred to Keysight's stated timeline, noting their expectation for a close during their July quarter.

Ryan Koontz requested more detail on the rebound in the wireless business, asking about the specific drivers such as capacity additions or new 5G services. He also asked how the newly acquired Inertial Labs fits into Viavi's portfolio and if there are synergies with existing commercial activities.

Answer

President and CEO Oleg Khaykin explained the wireless rebound is a North American phenomenon driven by operators preparing to restart 5G deployments, likely to convert 4G spectrum to 5G for cost efficiency. Regarding Inertial Labs, he stated it was a conscious diversification to strengthen Viavi's position in the high-growth Positioning, Navigation, and Timing (PNT) space, complementing its existing timing technology to create a full alternative navigation solution for markets like drones.

Ryan Koontz of Needham & Company asked for more detail on the recovery in Europe, the 1.6T opportunity driven by AI data centers, and the factors contributing to softness in the enterprise business.

Answer

President and CEO Oleg Khaykin noted that Europe's recovery often follows North America's, with fiber remaining strong. He detailed that the 1.6T opportunity is entirely driven by AI data centers, which have a much faster 2-4 year technology transition cycle. He confirmed Viavi is already selling 1.6T systems for R&D. Regarding enterprise, he clarified the softness is in the SE segment's software assurance products, where large financial and healthcare customers have shown more conservative spending.

Ryan Koontz of Needham & Company asked about the sales motion and pricing for Kaltura's new AI products and which E&T market verticals are showing particular strength.

Answer

Ron Yekutiel, Co-Founder, Chairman, President & CEO, explained that new AI products are additive upsells, priced based on metrics like FTEs or event usage. He contrasted these with internal AI improvements that enhance margins. Yekutiel sees AI becoming a key entry point for new customers in the future. Regarding verticals, he noted broad-based excitement across education, tech, and regulated industries like finance and pharma, without singling one out, and highlighted plans to deepen vertical-specific solutions.

Ryan Koontz of Needham & Company asked for color on the nature of the anticipated Media & Telecom (M&T) churn and questioned the company's product investment priorities between developing deeper vertical solutions versus simplifying the product for self-service and down-market expansion.

Answer

Ron Yekutiel (executive) clarified that the M&T churn was expected, temporary, and involves a few specific customers making full exits due to strategic shifts, rather than a broader trend of downsizing. On product strategy, he emphasized that the current focus is on enhancing hyper-personalization through AI and building deeper solutions for their core enterprise market, rather than a near-term push into the SMB self-service space, which the company has decided to de-prioritize for now.

Ryan Koontz asked about the nature of churn in the Media and Telecom (M&T) segment, specifically if customers are downsizing or exiting entirely.

Answer

CEO Ron Yekutiel clarified that the churn is primarily full exits due to strategic decisions, not downsizing, and is concentrated in less than five accounts.

Ryan Koontz from Needham & Company requested details on the specific customer applications and use cases driving success in the strong technology vertical.

Answer

Executive Ron Yekutiel detailed a wide range of use cases powered by Kaltura's integrated platform, including internal communications, corporate L&D, external marketing events, and sales enablement. He emphasized the platform's ability to unify content from various sources like Microsoft Teams and Zoom and leverage AI to create personalized experiences, preventing data silos and increasing content ROI.

Ryan Koontz of Needham & Company asked about the go-to-market fit for the VeloCloud acquisition with Arista's traditionally direct sales motion and its potential to enhance channel efforts with Managed Service Providers (MSPs).

Answer

President & COO Todd Nightingale described the fit as "incredibly complementary," filling a gap in the distributed branch portfolio. He highlighted the plan to leverage VeloCloud's strong MSP motion across Arista's entire portfolio, while also cross-selling SD-WAN through Arista's traditional channels. CEO Jayshree Ullal concurred, noting Arista will leverage VeloCloud's strength with MSPs.

Ryan Koontz asked about emerging 'Neo AI' cloud opportunities, their interest in moving from InfiniBand to Ethernet, and whether they are looking to multi-source AI networking.

Answer

CEO Jayshree Ullal noted that Neo Cloud customers are often more 'adventurous' and are actively exploring Ethernet as a scale-out alternative to InfiniBand. She stated that momentum for Ethernet has grown significantly, spurred by the Ultra Ethernet Consortium, and that this transition is happening faster than the adoption of alternative AI accelerators.

Ryan Koontz requested commentary on co-packaged optics (CPO), its position in Arista's roadmap, and its potential impact on the company's TAM and market opportunities.

Answer

CEO Jayshree Ullal noted that CPO adoption has been weak due to reliability and serviceability issues associated with soldering optics directly to a board. She stated that customers currently prefer the flexibility of pluggable optics. While CPO could become important at very high speeds (224G or 448G) if reliability improves, Arista is also focused on promising alternatives like co-packaged copper (CPC) and linear drive pluggable optics (LPO).

Ryan Koontz inquired about Arista's campus networking opportunity, asking where the company is seeing the most traction in terms of applications, verticals, and product categories like core switching versus WiFi.

Answer

CEO Jayshree Ullal described the enterprise opportunity as stronger than ever, driven by customer desire for a unified network architecture. She identified the universal spine as the primary entry point, with strong progress in wired edge switching. WiFi remains the weakest area but is a focus for improvement. CFO Chantelle Breithaupt added that key verticals include financials, healthcare, retail, and the federal government.

Ryan Koontz of Needham & Company asked about the drivers of strength in large European service providers, emerging data center interconnect (DCI) opportunities, and the recent redemption of ADVA shares.

Answer

CEO & Chairman Tom Stanton confirmed strong momentum in Europe, particularly in Germany and the UK, and noted a new win in Italy. Regarding DCI, Stanton acknowledged significant RFP activity but stated it's still early. Both Stanton and SVP & CFO Tim Santo characterized the ADVA share redemption as an orderly, well-managed transaction that was positive for the company long-term.

Ryan Koontz from Needham & Company asked about any evidence of customers pulling in orders ahead of potential tariffs, the macro environment in Europe, and the current attach rate for ONTs with XGS-PON deployments.

Answer

CEO Thomas Stanton reported minimal tariff-related pull-ins, as the company is actively avoiding a repeat of prior inventory issues. He described European demand as consistently positive, with a significant Huawei replacement opportunity about to begin. Stanton also confirmed that the attach rate for subscriber equipment with XGS-PON is high, as more carriers prefer end-to-end solutions.

Ryan Koontz asked about the risk of excess and obsolete inventory write-downs, the revenue size of non-core assets, details on the 10% customer, the status of optical inventory headwinds, the significance of cloud operators, and the outlook for the U.S. broadband market, including BEAD and Tier 2/3 spending.

Answer

CFO Ulrich Dopfer indicated that a significant inventory reserve is already in place, mitigating major write-down risk. CEO Thomas Stanton added that non-core assets are not a large part of revenue, the 10% customer in Q4 was international, and there was no 10% customer for the full year. Stanton expects a key optical inventory issue to resolve in Q1, described cloud operator business as 'lumpy,' and noted that while BEAD is not a near-term driver, positive momentum exists with Tier 2 and Tier 3 carriers independent of the program.

Ryan Koontz asked about the 2025 outlook for the U.S. 'run rate' broadband business, excluding BEAD and new wins. He also inquired about the carrier tier mix in the U.S., the primary applications for its optical products, and the company's plans for the minority shares of ADTRAN Networks SE.

Answer

Executive Thomas Stanton stated he does not expect the U.S. run rate business to be softer in 2025, citing constant demand pressure for fiber. He noted the U.S. business in the current year is weighted more toward Tier 2 and Tier 3 carriers. The optical portfolio's 'sweet spot' is in metro edge and aggregation backhaul. Regarding the minority shares, he said the immediate priority for capital is paying down debt, after which the company plans to address taking those shares off the market over time.

Ryan Koontz of Needham & Company inquired about key end markets, asking about the impact of consolidation in cybersecurity, a potential shift to hardware in the ADC market, and how cloud CapEx shifts to AI affect Silicom's opportunities. He also asked about the competitive landscape's effect on gross margins.

Answer

President & CEO Liron Eizenman stated that the cybersecurity market remains a strong growth area for Silicom and that the company sees no negative impact from consolidation. He confirmed a growing need for hardware in networking and security, noting Silicom is developing new products for these trends. Eizenman highlighted that AI presents a significant opportunity, particularly for the company's FPGA-based acceleration solutions. He concluded by stating there were no significant changes to report in the competitive environment impacting margins.

Ryan Koontz inquired about the specific milestones Silicom tracks for its new design wins, whether there is growing demand for FPGA-based NICs, and the company's strategy regarding potential tariffs.

Answer

Executive Liron Eizenman detailed a three-stage milestone process for design wins: initial customization, customer approval for mass production, and post-shipment satisfaction. He confirmed strong demand for FPGAs, highlighting a new partnership with Eideticom for post-quantum encryption solutions. Regarding tariffs, Eizenman stated that Silicom's products are currently exempt due to their classification, but the company is monitoring the fluid situation closely.

Ryan Koontz of Needham & Company, LLC inquired about Silicom's current revenue mix by vertical, the progress on resolving excess customer inventory, and the outlook for cash burn and operating expenses.

Answer

CEO Liron Eizenman and CFO Eran Gilad responded. Gilad provided a 12-month revenue breakdown, highlighting that cybersecurity and platforms/infrastructure each constituted about 31% of revenues. Eizenman explained that the customer inventory issue is a gradual process expected to be fully resolved by the end of 2025. He noted that while some customers are consuming inventory slower than initially hoped, they are still selling through the product. Regarding financials, Eizenman projected that operating expenses would remain largely flat with only a potential slight increase, as the company believes it is appropriately sized to support future growth.

Ryan Koontz of Needham & Company questioned whether the adoption of agentic AI by enterprises is altering their API attack surface, inquired about evolving MSSP business models, and asked for an update on the competitive landscape, including any new entrants.

Answer

CEO Roy Zisapel stated that agentic AI dramatically changes the attack surface, representing a key future growth area Radware is investing in. He observed that MSSP portfolios are evolving to include cloud application security to meet customer and compliance demands, creating partnership opportunities. On competition, Zisapel sees no major new entrants but noted Radware's win ratio is increasing due to innovation, channel expansion, and OEM partnerships.

Ryan Koontz of Needham & Company questioned whether the adoption of agentic AI by enterprises is altering their API attack surface, asked about evolving MSSP business models, and inquired about the global competitive landscape, including any new entrants.

Answer

Roy Zisapel, Co-Founder, CEO, President & Director, confirmed that agentic AI dramatically changes the attack surface, representing a key area of investment for Radware. He noted that MSSP portfolios are expanding to include cloud application security, creating partnership opportunities. On competition, Zisapel stated that Radware's win ratio is increasing due to innovation and partnerships, and while he sees no new major entrants in core markets, he anticipates new startups will emerge focused on AI application security.

Ryan Koontz asked if the reacceleration in cloud ARR was primarily due to go-to-market changes in the Americas or broader channel efforts. He also questioned the current competitive landscape compared to a year ago and inquired about any new ecosystem integrations that are aiding sales.

Answer

President and CEO Roy Zisapel attributed the broad-based cloud ARR growth to success in North America, international markets, and strong performance from OEM partners like Cisco and Check Point. Competitively, he stated Radware excels with its superior security algorithms and automation, positioning it well against competitors like Cloudflare and Akamai. On integrations, Zisapel mentioned ongoing enhancements with partners and new integrations with SIEM systems, often driven by customer requests, which increases product stickiness.

Ryan Koontz from Needham & Company questioned the softness in the Americas, asking if it was tied to service provider spending and about the pipeline outlook. He also asked about the level of sales and marketing investment needed to sustain top-line growth.

Answer

President and CEO Roy Zisapel acknowledged that weak service provider spending impacted the Americas but expressed high expectations for the future, noting North America is a key investment area. Regarding expenses, Zisapel stated the company is aiming for profitable growth through a mix of operational leverage and targeted go-to-market investments for cloud security. CFO Guy Avidan added that they expect a ~$1 million increase in Q4 OpEx, primarily for sales and marketing in the U.S.

Ryan Koontz from Needham & Company asked for an update on the industry's readiness for DOCSIS 4.0 Unified and Harmonic's specific product progress. He also questioned the implications of Charter's reduced CapEx and the nature of the strong bookings in the quarter.

Answer

CEO Nimrod Ben-Natan stated that the ecosystem is moving forward, with Harmonic's new RF front end entering customer labs in Q3 and field trials planned. Regarding Charter, he emphasized their stated commitment to network evolution. CFO Walter Jankovic added that the strong bookings were a mix across various time periods and included a number of customers, including those in the "rest of world" category.

Ryan Koontz from Needham & Company asked for clarification on the source of second-half uncertainty, questioning the split between tariff impacts and technology readiness for DOCSIS 4.0. He also sought confirmation on the sourcing location for the balance of node components.

Answer

CFO Walter Jankovic clarified that the decision to not provide a full-year guide is strictly due to the macroeconomic uncertainty associated with tariffs, not technology readiness. He emphasized that business fundamentals remain strong. He also confirmed that the vast majority of Harmonic's Broadband products are manufactured in Malaysia.

Ryan Koontz inquired about the ecosystem readiness for DOCSIS 4.0, particularly concerning full duplex amplifiers, and asked to reconcile record broadband revenue with a lower number of new cable modems served.

Answer

CEO Nimrod Ben-Natan explained that the primary challenge with full duplex amplifiers is the complex ecosystem integration required to operationalize them, not a lack of components. CFO Walter Jankovic clarified that the record revenue reflects equipment and license sales that occur before cable modems are activated by end-users. He also specified that a roughly $5 million inventory provision was taken for specific DOCSIS 3.1 inventory due to the transition to Unified 4.0.

Ryan Koontz of Needham & Company, LLC inquired about the drivers behind the Q3 Broadband revenue beat, the deployment status of Tier 1 customers beyond Comcast, and the potential for stalled growth in 2025 due to customers re-evaluating plans with the new Unified DOCSIS 4.0 technology.

Answer

CFO Walter Jankovic explained the Q3 upside was due to the timing of product shipments, which was anticipated as part of a strong second half, and confirmed the full-year guidance remains intact. President and CEO Nimrod Ben-Natan noted momentum with new customer logos. Regarding 2025, Walter Jankovic confirmed that the Unified transition creates short-term headwinds as customers reassess deployment timing, making it premature to provide specific growth guidance, though he emphasized it is a positive long-term catalyst.

Ryan Koontz sought to clarify if a new large customer win was related to a previously mentioned reclassification, asked about the drivers of strong gross margin expansion, and questioned if the muted growth in the small customer segment would improve.

Answer

CFO Cory Sindelar offered 'no comment' on the customer win's relation to the reclassification. He attributed strong gross margins to continued platform adoption and favorable customer mix. He affirmed that demand is broad-based and expects the small customer cohort to continue growing, noting it did grow quarter-on-quarter despite the reclassification.

Ryan Koontz asked about the macro spending environment, customer CapEx plans for 2025, and the reasons for a large customer's demand pull-forward, questioning if it was related to tariffs or budget timing.

Answer

CEO Michael Weening stated that Calix's platform model helps customers create their own demand, making the company confident in its outlook despite the macro environment. CFO Cory Sindelar confirmed the Q1 pull-forward was not tariff-related and that strong broad-based demand prevents any "air gap," supporting the raised Q2 guidance. Weening reiterated that broadband demand is inelastic and resilient, which will drive growth even in an economic downturn.

Ryan Koontz asked for a big-picture view on how Calix is monetizing its installed base of fiber-served homes, separate from government funding noise. He also questioned the relative weakness in the small customer segment and its outlook for recovery.

Answer

CEO Michael Weening emphasized that Calix's model is built to succeed regardless of government funding by helping service providers monetize subscribers on any network. CFO Cory Sindelar clarified that the small customer segment chart was misleading due to a customer graduating from the "small" to "medium" category during the year. He stated that ordering patterns have returned to normal and underlying demand is strong across segments.

Ryan Koontz of Needham & Company asked about the ARPU contribution and trajectory across customer segments and the mix of new versus expansion deals within the strong RPO growth. He also inquired about the go-to-market motion of the expanded customer success team.

Answer

CFO Cory Sindelar explained that RPO growth is driven primarily by existing customers adding subscribers, followed by adopting new applications, and lastly by new customer wins. CEO Michael Weening detailed a key customer success initiative: teaching service providers how to sell effectively, including implementing sales quotas and variable compensation. This addresses a major industry weakness and was a direct request from Calix's CEO advisory board.

Ryan Koontz of Needham & Company, LLC inquired about NextNav's network deployment model, including its integration with mobile network operators (MNOs), the MNOs' motivation for partnership, and the client-side device requirements.

Answer

Executive Mariam Sorond explained that NextNav's technology is embedded in the 5G standard's Positioning Reference Signal (PRS). An MNO partner would deploy NextNav's spectrum for its own capacity needs and activate the PRS beacon. The MNO's motivation is access to valuable low-band spectrum. For end-user devices, NextNav's solution is entirely software-based, requiring no new chips and integrating into standard device roadmaps like any new spectrum band.

Ryan Koontz asked about Coherent's addressable wallet share within a ZR module for DCI applications, excluding the DSP. He also requested an update on the new Optical Circuit Switch (OCS) product, including its launch status, customer wins, and primary use case.

Answer

CEO James Anderson explained that Coherent addresses the DCI market by both selling its own ZR modules and selling components to other module suppliers, representing a significant opportunity. Regarding the OCS, he stated that it replaces an electrical switch to keep data in the optical domain for performance and power benefits. He confirmed the company has existing customer orders and expects initial revenue in the current calendar year, with the product being applicable to multiple parts of the data center.

Ryan Koontz from Needham & Company asked for more color on the traction of new products beyond the core RingEX and RingCX offerings, as part of the new product roadmap.

Answer

CEO Vlad Shmunis reiterated that new product ARR is over $50 million, more than halfway to the $100 million target. He noted strong attach rates, with RingCX being included in over 50% of large enterprise deals and RingSense having a 50% attach rate with RingCX. He expressed particular excitement for the newly launched RingCentral AIR. President and COO Kira Makagon added that internal deployment of RingCX and RingSense has already yielded ~10% efficiency gains, providing a strong customer benchmark.

Ryan Koontz asked about the mechanics behind the increasing mix of A2P fees, its relation to political traffic, and the assumptions for these fees in 2025 guidance. He also inquired about the impact of AI on messaging volumes and the potential influence of RCS on the business.

Answer

CFO Daryl Raiford explained that political campaign traffic carried a higher attach rate of surcharges, and he expects this rate to normalize back to commercial levels in 2025, resulting in lower overall surcharge revenue. CEO David Morken noted that while AI is used internally to expedite messaging campaign registration, the primary AI opportunity is in voice. Regarding RCS, Morken confirmed Bandwidth is a key partner with Google and a leader in the space, with adoption timing dependent on U.S. mobile operator rollouts.

Ryan Koontz asked for an update on the Rich Communication Services (RCS) market, inquiring about its current state, keys to success, and whether the Android ecosystem is ahead of Apple.

Answer

CEO Khozema Shipchandler characterized the RCS market as being in 'incredibly early' days, with ecosystem challenges like interoperability still present. He stated that Twilio is ready to support customers and is cautiously optimistic, viewing RCS as neutral to modestly accretive to the business. He confirmed that the Android ecosystem is much further ahead of Apple in RCS adoption.

Ryan Koontz inquired about Twilio's progress on its self-service initiatives and asked for clarification on the 'friction' that was introduced into the developer onboarding process.

Answer

CEO Khozema Shipchandler described the company's approach to self-service as a perpetual 'day 1' effort to make the platform as easy as possible for developers to use. He explained that the 'friction' was intentionally added over the last few years to enhance trust and compliance, such as verifying users to prevent malicious use and managing industry-wide requirements like 10DLC registration.

Ryan Koontz from Needham & Company inquired about the 'turbulence' in the UCaaS market, specifically regarding market saturation and pricing. He also asked about the scale of the international opportunity and expansion plans.

Answer

CEO Samuel Wilson acknowledged some pricing aggressiveness in the UCaaS market, typical for the calendar fourth quarter, but emphasized that 8x8's focus is on contact center-led, platform deals where UC is an add-on. He expressed strong optimism for the international opportunity, particularly in Europe and Asia-Pac, citing strong CPaaS performance and less 'irrational behavior' from competitors compared to the U.S. market.

Ryan Koontz of Needham & Co. asked about the forward visibility of the Remaining Performance Obligation (RPO) given the lumpy nature of bookings and the down sequential subscription revenue guide. He also inquired if the A2P (Application-to-Person) fees seen in the U.S. are emerging in 8x8's core international CPaaS markets.

Answer

CEO Samuel Wilson explained that while RPO is increasing, its growth may not be linear due to the rise of usage-based business, which often has lower contracted revenue than actual usage. He noted a customer trend towards requesting consumption-based pricing. Regarding CPaaS fees, Wilson stated that similar large A2P fee hikes are not being seen internationally, as many of those carriers had already implemented significant price increases in prior years. He added that the company is bullish on future innovation around RCS.

Ryan Koontz of Needham & Company asked about current trends in Microsoft Teams voice connections, specifically regarding the adoption of Operator Connect versus direct routing and the resulting impact on AudioCodes' attach rate. He also inquired whether the company is seeing a trend toward fewer, larger customer wins or more activity in the down-market SMB space.

Answer

President and CEO Shabtai Adlersberg acknowledged a shift toward Operator Connect but noted it is not yet an overwhelming trend and direct routing remains significant. He then segmented the market, explaining that AudioCodes continues its dominance with large enterprises adopting Teams, where growth is steady. In the more competitive SMB space, he expressed confidence that the company's new, technologically advanced value-added services platform will allow it to be a strong player.

Ryan Koontz asked about the key performance indicators (KPIs) AudioCodes uses internally, such as bookings or ARR, to track momentum in its subscription business amidst the ongoing transition. He also inquired about the composition of the backlog and whether the company is seeing any seat pressure in CX renewals due to AI-driven agent productivity.

Answer

President and CEO Shabtai Adlersberg identified Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), and especially bookings as critical KPIs. He highlighted that the services backlog grew substantially from $27 million a year ago to $67 million, driven primarily by Microsoft Teams managed services contracts. Adlersberg noted the significant long-term opportunity in Teams Phone adoption and stated that the company is not currently observing any pressure on seat counts in its CX business.

Ryan Koontz questioned the gross margin impact from the ongoing cloud migration, the primary sources of traction for the Software Solutions business, and the competitive dynamics in the telecom services market.

Answer

CFO Ron Vincent estimated a potential 100-150 basis point improvement in cost savings as a percent of revenue after the data center migration is completed in Q1 2025. CRO Jon Brinton highlighted that Software Solutions growth is strong both internationally and domestically, with a significant number of new logos coming from the Metaswitch community. President and COO Doug Gaylor added that in the services segment, Crexendo is increasingly winning customers from other cloud providers, not just legacy systems, due to its superior customer service rankings.