Tim Long

Tim Long asked about trends with Jabil's larger hyperscale customer, specifically if product transitions in their compute platforms are impacting business. He also inquired about Jabil's participation in the custom ASICs and XPUs market and what this means for the rest of the rack and Jabil's involvement.

Answer

CEO Mike Dastoor clarified that the retrofitting efforts for the larger hyperscaler's factory are ahead of schedule, with the second half of the fiscal year expected to be stronger. He noted that demand is 'crazy' and cautioned against direct Q3 and Q4 year-over-year comparisons due to significant growth from new facilities in the prior year. Regarding custom ASICs and XPUs, Dastoor stated that Jabil is 'relatively agnostic' to chips and is working with multiple companies on custom chips, viewing them as complementary and an upside rather than a replacement.

Tim Long from Barclays inquired about trends concerning Jabil's larger hyperscale customer, noting it wasn't cited as a driver of recent strength, and asked if product transitions in their compute platforms were having an impact. He also asked how Jabil sees itself participating in the broader movement around custom ASICs and XPUs, particularly with the traction of TPUs, and what this means for Jabil's role in related equipment.

Answer

CEO Mike Dastoor clarified that the retrofitting mentioned in the September call was specific to one site, and new business is coming from different sites. He stated that the retrofitting is ahead of schedule, which could lead to upside in the second half of the fiscal year, and emphasized strong demand. Regarding custom ASICs and XPUs, Mike Dastoor stated that Jabil is 'relatively agnostic' to chips and is working with multiple individual companies on custom chips. He views these custom chips as complementary rather than replacements, seeing them as an upside opportunity.

Tim Long requested more detail on the product and customer breadth driving the cloud and data center upside, and also asked for an update on the transceiver business, including customer activity and the outlook for 1.6T technology.

Answer

CEO Mike Dastoor attributed the upside to strong demand in automated testing and server rack integration, where Jabil is gaining market share through its design and engineering collaboration. On transceivers, he noted strong growth in 800G products, leveraging the Intel Photonics acquisition, and mentioned that Jabil's 1.6T capability has been well-received, with an expected market uptick in late 2025 or early 2026.

Tim Long from Barclays asked about the scalability of Ciena's DCOM technology, its expansion with Meta, potential adoption by other hyperscalers, and its role as a beachhead for data center entry. He also questioned the sustainability of growth in the telco segment over the next few years, considering MOFEN, 5G investments, and transport reinvestment.

Answer

CEO Gary Smith confirmed DCOM's multi-year opportunity with Meta, expanding into new data centers and representing hundreds of millions in revenue, with engagements ongoing with two to three other hyperscalers for potential adoption. He highlighted DCOM, Nubis, and Scale-across as entry points into the data center. For telcos, Gary Smith noted a multi-year reinvestment cycle in transport after years of underinvestment and 5G focus, expecting nice, steady mid-single-digit growth. This is amplified by AI traffic for MOFEN, which contributed hundreds of millions to telco business last year, now also ramping in North America.

Tim Long from Barclays asked about the scalability of Ciena's DCOM technology, its expansion with Meta, potential adoption by other hyperscalers, and its role as a beachhead for data center entry. He also questioned the sustainability of growth in the telco segment over the next few years, considering MOFEN, 5G investments, and transport reinvestment.

Answer

CEO Gary Smith confirmed DCOM's multi-year opportunity with Meta, expanding into new data centers and representing hundreds of millions in revenue, with engagements ongoing with two to three other hyperscalers for potential adoption. He highlighted DCOM, Nubis, and Scale-across as entry points into the data center. For telcos, Gary Smith noted a multi-year reinvestment cycle in transport after years of underinvestment and 5G focus, expecting nice, steady mid-single-digit growth. This is amplified by AI traffic for MOFEN, which contributed hundreds of millions to telco business last year, now also ramping in North America.

Tim Long with Barclays PLC inquired about the traction of as-a-service models, specifically ARR and GreenLake. He also asked how the addition of Juniper Networks, particularly Mist, impacts this model and if there are broader benefits for GreenLake from the combined companies.

Answer

President and CEO Antonio Neri clarified that Juniper's ARR contribution comes from software subscription services like Mist and Apstra. He detailed that 80% of HPE's ARR is now from software and services, encompassing SaaS (Aruba Central, hybrid cloud software, storage) and GreenLake Flex (consumption model). He highlighted the integration of Apstra with OpsRamp into GreenLake and the cross-pollination of Mist and Aruba Central for AIOps, driving more software additions and supporting dual hardware platforms.

Tim Long inquired about the drivers behind the stronger sales pipeline exiting Q2 compared to Q1, asking for color across the AI, hybrid cloud, and networking businesses.

Answer

CEO Antonio Neri detailed broad pipeline strength. In AI, he noted strong enterprise and sovereign momentum, with a backlog of $3.2 billion. In Hybrid Cloud, he highlighted over 75% order growth for Alletra MP for four straight quarters and strong interest in virtualization solutions. For Networking, he pointed to three consecutive quarters of order growth, signaling a market recovery.

Tim Long asked about the impact of HDD tightness and increased QLC usage on NetApp's business, and whether these trends benefit the shift to all-flash. He also questioned the sustainability and potential acceleration of cloud revenue growth (high teens ex-Spot) given new offerings.

Answer

George Kurian (CEO) noted HDDs performed better than planned, with broad use cases for TLC, QLC, and HDDs, indicating no direct replacement scenario. He expressed strong positivity about first-party and marketplace cloud services growth (north of 30%), highlighting Q2's highest quarter-on-quarter incremental revenue and the focus on AI/data-intensive cloud workloads.

Tim Long with Barclays asked about the impact of tight HDD supply and increased QLC adoption on the business and all-flash transition, and sustainability/acceleration of cloud revenue growth (high teens ex-Spot) given new offerings.

Answer

CEO George Kurian noted that HDDs performed well in the quarter, and NetApp sees distinct use cases for TLC, QLC, and HDDs, not a direct replacement. He expressed strong positivity about the first-party and marketplace cloud services business, which has been growing north of 30%, and highlighted Q2's highest quarter-on-quarter incremental revenue for the cloud business, with future acceleration expected from scaling go-to-market for AI and data-intensive cloud workloads.

Tim Long of Barclays asked about NetApp's strategy to convert the remaining 55% of its installed base from hybrid to all-flash systems. He also inquired about the mid-to-long-term expectations for the rapidly growing Keystone storage-as-a-service offering.

Answer

CEO George Kurian explained that while NetApp has a high win rate in refreshing its installed base, a significant portion of its growth comes from winning new customers. He noted that hard-drive solutions remain relevant for backup and cold storage. Regarding Keystone, he highlighted its appeal to customers who prefer an as-a-service model, need a bridge for cloud transitions, or want to avoid upfront capital investment in competitive situations.

Tim Long of Barclays asked about NetApp's strategy to convert the remaining 55% of its installed base to all-flash and the long-term expectations for its Keystone storage-as-a-service offering.

Answer

CEO George Kurian explained that while NetApp has a high win rate on installed base refreshes, it also wins many new customers, and traditional hard drive solutions remain relevant for backup and cold storage. Regarding Keystone, he positioned it as a flexible option for customers preferring an as-a-service model, those in transition to the cloud, or for strategic competitive situations, emphasizing customer choice.

Tim Long of Barclays inquired about NetApp's guidance, noting the contrast between a lighter-than-expected Q1 forecast and an intact full-year outlook, and asked about the drivers for revenue acceleration. He also questioned the outlook for product gross margins amid changing NAND prices and macro conditions.

Answer

CEO George Kurian attributed the full-year confidence to strong momentum from being the fastest-growing all-flash player, market share gains, a pipeline of large deals, and increased sales capacity. He explained that Q1 caution stems from uncertainty in EMEA and the US public sector. CFO Wissam Jabre added that product gross margins are expected to be in line with Q4 in Q1 and then gradually improve quarterly, driven by a favorable mix of cloud and flash products.

Tim Long from Barclays inquired about NetApp's fiscal 2026 guidance, asking for clarity on the expected revenue and EPS acceleration throughout the year despite a lighter Q1 forecast, and questioned the outlook for product gross margins amid changing NAND prices and a competitive macro environment.

Answer

CEO George Kurian explained that strong momentum from all-flash and cloud, combined with large deals in the pipeline and added sales capacity, underpins the full-year forecast. He attributed Q1 caution to uncertainty in EMEA and the US public sector. CFO Wissam Jabre added that product gross margins are expected to be flat in Q1 compared to Q4 but will see gradual improvement through the rest of the fiscal year.

Tim Long from Barclays inquired about the fiscal 2026 guidance, noting the contrast between a lighter Q1 and a solid full-year outlook, and asked about the drivers for the expected acceleration. He also sought clarity on the product gross margin outlook amidst fluctuating NAND prices and competition.

Answer

CEO George Kurian attributed the strong full-year outlook to momentum from being the fastest-growing all-flash player, share gains in block storage, and accelerating cloud business. He noted Q1 caution is due to uncertainty in EMEA and the US public sector, but expects growth from large deals and added sales capacity. CFO Wissam Jabre addressed product margins, stating that while Q1 would be similar to Q4, he anticipates gradual quarterly improvement throughout the fiscal year, driven by a favorable mix from cloud and flash growth.

Elisa Shree, on behalf of Tim Long, asked about the drivers behind the strong growth in the Keystone Storage-as-a-Service offering and the current customer willingness to adopt as-a-service models over traditional purchases.

Answer

CEO George Kurian explained that strong cloud performance reflects broad customer enthusiasm for as-a-service models. He said Keystone appeals to two main groups: clients wanting to build a hybrid cloud architecture with on-prem infrastructure that mirrors the public cloud model, and clients deploying new applications like AI who prefer a flexible consumption model before committing to large capital expenditures.

Tim Long asked a two-part question on gross margins: first, if the conversion of NeoCloud, sovereign, and enterprise AI server revenues would change the mid-single-digit operating margin, potentially moving it higher; and second, if recapturing share in non-premium PC segments might impact PC business operating margins.

Answer

CFO David Kennedy stated that Dell aims to maintain mid-single-digit operating profit for AI servers, acknowledging competitive deals but ensuring each is accretive from a dollar perspective. COO Jeff Clarke confirmed Dell's aggressive push into non-premium commercial (Dell Pro Essential, education) and consumer segments, which led to accelerated international growth and a return to consumer demand growth for the first time in three years. He committed to balancing growth with profitability within given operating ranges.

Tim Long asked two questions: first, if the changing mix of Neocloud, Sovereign, and Enterprise customers for AI servers would impact the mid-single-digit operating margin, potentially moving it higher; and second, if recapturing share in non-premium PC segments might affect the PC business's operating margin.

Answer

David Kennedy (CFO, Dell Technologies) stated that Dell aims to maintain consistency in its mid-single-digit AI operating profit delivery, acknowledging that while some deals might be slightly lower or higher, the objective is to stay within that range and ensure every deal is accretive from a dollar perspective. Jeff Clarke (COO, Dell Technologies) confirmed that Dell leaned into non-premium segments (Dell Pro Essential, Education, holiday consumer) in Q3, resulting in accelerated international growth (double-digit demand) and a return to demand growth in consumer for the first time in three years. He committed to growing share while balancing profitability within given operating ranges.

Tim Long asked Satish Dhanasekaran to quantify the impact of the AI business on Keysight's wireline and semiconductor segments, and the overall business. He also inquired about the software and services segment, which reached 37% of revenue and is expected to increase by another 300 basis points with M&A, asking about the outlook for continued upward movement in this segment's contribution.

Answer

President and CEO Satish Dhanasekaran stated that roughly half of Keysight's record-growing wireline business is seeing impact from the AI ecosystem and infrastructure buildouts, due to the broad portfolio of physical and protocol layer emulation tools. He confirmed that software and services remain a focused strategic area with more upside, noting that the recent acquisitions (Optical Solutions Group, Spirent, PowerArtist) provide a meaningful uplift and the ability to add more content and capture lifecycle value for customers.

Tim Long asked Satish Dhanasekaran to size Keysight's AI business, specifically its impact on wireline and semis, and the overall business. He also inquired about the outlook for software and services, noting its current 37% of revenue and an expected 300 basis point increase with M&A, asking if a continued upward trend in software and services contribution is anticipated.

Answer

Satish Dhanasekaran, President and CEO, stated that roughly half of Keysight's record-breaking, double-digit growing wireline business is seeing impact from the AI ecosystem and infrastructure buildouts. For software and services, Mr. Dhanasekaran confirmed it's a focused strategic area with more upside. The acquisitions of Optical Solutions Group, Spirent, and PowerArtist provide a meaningful immediate uplift, and the company expects to continue adding content and capturing lifecycle value, anticipating a continued upward trend in its contribution to the P&L.

Tim Long of Barclays asked for clarification on the wireless business, which was described as stable yet showed double-digit growth, and questioned the outlook for the company's 40% incremental margin target given recent pressures.

Answer

CEO Satish Dhanasekaran explained that the strong wireless revenue was due to recovering market conditions after a prolonged downturn, with drivers including 5G Advanced standards, non-terrestrial networks, and early 6G research. CFO Neil Dougherty reaffirmed the 40% incremental margin as the correct long-term model, stating that the impact from tariffs is a temporary disruption and that the underlying business is performing above that target.

Tim Long asked about the economic model and expected margins for Arista's Blue Box solutions as they potentially become a larger part of the mix, and inquired about the primary customer segments or use cases where Blue Box deployments are anticipated to be most successful.

Answer

Jayshree Ullal, CEO and Chairperson, provided an example of a NeoCloud customer adopting a hybrid Blue Box and EOS strategy. She indicated that Blue Box economics are generally similar to cloud and AI titans, but acknowledged that significant scale-up volumes could lead to greater margin pressure. She expects a balanced mix of scale-up, scale-out, and scale-across to help manage overall margins.

Tim Long asked about the economic model and expected margins for Arista Networks' Blue Box solutions as they become a larger part of the mix, and where these deployments are expected to be most successful from a customer or use case standpoint, such as scale-up.

Answer

Jayshree Ullal, Arista Networks' CEO and Chairperson, provided an example of a NeoCloud adopting Blue Box, which then evolved into a hybrid solution with EOS. She stated that Blue Box economics are generally similar to cloud and AI titans, but acknowledged that significant scale-up volume might lead to greater margin pressure. She emphasized a strategic mix of scale-up, scale-out, and scale-across to manage overall margins.

Tim Long inquired about the health of channel inventory, particularly in the Fitness and Outdoor segments, and the relationship between Garmin's internal inventory (related to tariffs) and channel inventory. He also asked about the drivers behind a sequential downtick in the Americas business and whether it's a short-term blip.

Answer

President and CEO Cliff Pemble stated that channel inventory is healthy, lean, and well-positioned for Q4, clarifying that Garmin's internal inventory for tariff mitigation is a separate consideration. Regarding the Americas, he attributed the difference to FX benefits in other regions, product cycles, and currency movements, expressing overall satisfaction with all geographies' performance.

Tim Long inquired about the health of channel inventory, particularly in the fitness and outdoor segments. He also asked about a sequential downtick observed in the Americas business during the quarter, seeking drivers and whether it's a short-term blip.

Answer

Cliff Pemble, President and CEO, stated that channel inventory is healthy, lean, and ready for Q4, with sell-out stronger than sell-in. He clarified that company-held inventory for tariff mitigation is separate. Regarding the Americas, he suggested not to over-interpret the downtick, attributing it to product cycles and currency movements, and expressed satisfaction with all geographies' performance.

Tim Long asked for more color on the strength in the Fitness category, specifically regarding the mix of repeat versus new users. He also questioned what was driving the outperformance in Europe and whether that growth was sustainable.

Answer

President and CEO Clifton Pemble confirmed that all fitness categories were strong, led by advanced wearables like the Forerunner and Venu lines. He noted that growth from new users coming to the Garmin brand was particularly strong. Regarding Europe, he suggested that after normalizing for foreign exchange effects, the region's performance was largely in line with other geographies.

Tim Long asked about the drivers behind the expected margin improvements in the second half of the fiscal year compared to the first half. He also inquired about the evolving economics of Flex's cloud data center business, specifically if new, more specialized programs are leading to more margin-accretive opportunities and how Flex's value proposition in that ecosystem is changing.

Answer

CFO Kevin Kesse explained that continued margin improvement into Q3 and Q4 is primarily driven by mix, with the products and services businesses growing well and performing above the Flex average, thus becoming a larger portion of revenue and pulling margins up. CEO Revathi Advaithi stated that the cloud and power business is very accretive, highlighting Flex's unique integration of compute, power, and cooling. She noted that the compute business includes contract manufacturing, assembly, and vertical integration of racks and metal enclosures, while the power play involves Flex's own IP and design, operating more like an OEM. Ms. Advaithi anticipates significant margin progression as the mix shifts towards power, expecting it to behave like a products business.

Tim Long inquired about the drivers behind the expected operating margin improvements in the second half of the fiscal year and how the economics of Flex's cloud and data center business are evolving, particularly regarding margin accretion from specialization.

Answer

CFO Kevin Krumm attributed second-half margin improvement to favorable mix, with products and services businesses growing and performing above the Flex average. CEO Revathi Advaithi highlighted the accretive nature of the cloud and power business, driven by integrated compute, power, and cooling solutions, including Flex's own IP products, expecting significant margin progression.

Tim Long asked about the pipeline for other compute-related opportunities beyond the digital native win, whether new opportunities are HPS or not, and the competitive differentiations for Celestica with Sonic versus other proprietary OSs, especially for new customers outside the large three.

Answer

Jason Phillips (President of Connectivity and Cloud Solutions) highlighted a large and growing funnel of AI/ML compute opportunities, focusing on strategic alignment and high adoption rates, referencing POCs like AMD MI355. Mandeep Chawla (CFO) added that networking strengths transfer to AI compute. Steve Dorwart (SVP and GM of Hyperscalers) explained that most hyperscale customers use proprietary OSs but rely on Celestica for key layers and testing, while Celestica also supports emerging comprehensive choices and firmware.

Tim Long asked about the pipeline for other compute-related opportunities beyond the digital native win, specifically inquiring about the funnel for new HPS opportunities. He also asked about new customers outside the largest three, whether they are mostly Sonic-related, and the competitive differentiations for Celestica with Sonic versus other proprietary OSs.

Answer

Jason Phillips (President of Connectivity and Cloud Solutions) mentioned a large and growing funnel of AI/ML compute opportunities, focusing on strategic alignment and high adoption rates, citing POCs with silicon providers like AMD MI355. Mandeep Chawla (CFO) added that networking strengths are leveraged for compute wins. Steve Dorwart (SVP and GM of Hyperscalers) explained that most hyperscale customers drive their own OS but rely on Celestica for key layers and testing, with emerging comprehensive choices being evaluated. He also noted Celestica's support at the firmware level for networking and compute systems.

Tim Long asked about the economics of transitioning to F5 Distributed Cloud Services (DCS), including deal sizes, win rates, dollar retention, and add-ons. He also inquired about the performance of major verticals, specifically the strong enterprise bookings and weak service provider bookings in Q4, asking for drivers behind these trends.

Answer

François Locoh-Donou (President and CEO, F5) explained that DCS is a land-and-expand motion, with deals starting small (tens of K's) and expanding significantly; one-third of DCS customers expanded ARR by 90%. He noted that enterprise verticals (financial services, healthcare, manufacturing, retail, public sector) are embracing hybrid multi-cloud, creating strong cases for F5 and driving cross-sell. The service provider segment has been tepid due to 5G not taking off as expected, leading to pressure on CapEx spend, though F5 continues to find new use cases.

Tim Long asked about the economic aspects of transitioning to F5 Distributed Cloud Services, including deal sizes, win rates, dollar retention, and add-ons. He also inquired about the drivers behind the performance of F5's verticals, specifically the strong enterprise bookings and weak service provider bookings.

Answer

François Locoh-Donou, President and CEO, described F5 Distributed Cloud Services as a 'land and expand' motion, with initial small deals expanding significantly (one-third of customers expanded ARR by 90%). He noted that enterprise verticals are embracing hybrid multi-cloud, driving cross-sell and wallet share for F5. The service provider segment has been 'tepid' due to slower-than-expected 5G adoption and pressure on CapEx spend.

Tim Long inquired about the primary drivers behind F5's strong hardware revenue, its sustainability into the next year, and the impact of factors like tariffs or pull-ins. He also asked for an update on the software business pipeline, particularly regarding renewals and new deal activity.

Answer

CEO François Locoh-Donou attributed the 39% hardware growth not just to tech refreshes but more significantly to durable secular trends like data center modernization, hybrid cloud adoption, and AI readiness, stating no pull-in or tariff effects were observed. CFO Cooper Werner added that the software business saw healthy expansion from its large renewal base, though some new projects opted for hardware for performance reasons, and the Q4 software pipeline remains strong.

Tim Long of Barclays PLC asked about the early momentum and potential revenue ramp for the new SVX speaker mic and its impact on the APEX NEXT upgrade cycle. He also questioned the performance of the video business, specifically what could reaccelerate growth on the hardware side, which has been relatively flat.

Answer

Chairman & CEO Greg Brown noted that SVX orders are outpacing expectations and that the device is driving an ecosystem sale anchored to the APEX NEXT radio. EVP & CTO Mahesh Saptharishi positioned SVX as a new 'body worn assistant' category. EVP & COO Jack Molloy added that fixed video growth is led by the Alta cloud platform and expanding go-to-market investments.

Tim Long of Barclays asked for details on the strong B2B performance beyond video collaboration, the financial impact of a growing B2B mix, and the sustainability of recent strength in the gaming category.

Answer

CEO Hanneke Faber confirmed that B2B demand outpaced consumer demand across the full portfolio, including personal workspace and headsets, highlighting double-digit growth in the education vertical. CFO Matteo Anversa added that the video conferencing business is accretive to the company's average margin. Faber also noted strong gaming share growth in North America and a return to share gains in China, driven by premium products and partnerships.

In a follow-up, Tim Long from BMO Capital Markets asked about the gross margin outlook, questioning the impact of new higher-margin products and cost reductions versus the temporary effect of expedited shipping costs, and which product areas were being targeted for these actions.

Answer

Robert Pera, Founder, CEO and Chairman, explained that while cost reductions on mature products are ongoing, an aggressive new product pipeline, such as in video security, could affect the product mix margin short-term. He projected that long-term peer margins would remain steady and identified improving shipping logistics efficiency as the primary driver for significant future margin improvement.

Tim Long asked about the strategy behind moving upmarket to larger accounts and requested an update on the company's distributed engineering model, including its effect on talent acquisition and the product pipeline.

Answer

Robert Pera (Chairman and CEO) explained that UniFi's success in moving upstream is due to product line expansion (switches, gateways), the hybrid cloud model via the Cloud Key, and improved wireless performance. He defended the distributed R&D model, stating that building teams outside of Silicon Valley fosters long-term commitment and avoids the 'bubble' mentality, which has led to incredible leverage.