Tom Stanton: The answer, yes. I mean we expect the same kind of pressure. Optical will be – right now, our expectation is optical will actually be farther down than where we expect access and aggregation to drop as far as on a percentage basis. So, that’s really – and like I have said, the project move-outs are probably the biggest thing that you can highlight as far as our kind of relooking at Q4. And then just really no rebound and no bounce up on any of the other pieces of the business.
Michael Genovese: Okay. Well, that’s – I would appreciate the really helpful responses. Thank you, Tom.
Operator: Thank you. Our next question comes from the line of Ryan Koontz from Needham & Company. Please go ahead with your question.
Ryan Koontz: Hi. Thanks for the question. I wanted to maybe come at this a different angle here, Tom. As you are talking about capital constraints at providers here, tightening spending? And I think about that as probably as affecting the OLT business, where you have all the capital intensity around labor, putting the fiber in the ground. And why wouldn’t customers be more focused on success-based spending and lighting up SaaS [ph] in their existing footprint. And so why aren’t we seeing CPE rebound given the customer constraints?
Tom Stanton: Yes, that’s a really good question. And I think – and I would agree with you. I mean there are things that are more easily moved out than other things, right. And new footprint expansion is typically one of the things that’s just easier to move, same thing with some of these WDM projects. I think some of it is just kind of what the plan build was. So, I mentioned we shipped just a ton of ports out of the SDX, but that was planned for a long time, and there was part of that expansion. But I will tell you that even in that case, where we are shipping SDX ports, a lot of it is to add more ports to kind of existing footprint. So, it’s kind of increasing your homes pass on that existing footprint. So, they are not – so I think even in those cases, they are trying to minimize the capital and labor cost with adding to their commitments on their homes passed.
You are absolutely right on subscriber. We expect just from the business and on the homes past ports that we are shipping now to see an uptick in that business in the first half, but we just haven’t seen it – we just haven’t seen it yet.
Ryan Koontz: Fair enough. Okay. Thanks. That’s helpful. And regarding your guide for Q4, and I heard your comments, it sounds like some of this real tightening is starting to impact Europe. I wonder specifically, I heard from another vendor about some changes in the regulatory climate in Germany as it relates to some of the fiber broadband subsidies. And are you seeing any of that impact in your German customers included in your guide, or is this just unrelated and driven by just pure capital conservation.
Tom Stanton: It’s just pure capital conservation. But that is spotty. So, like if I look at, let’s say, Germany, that business on fiber-to-the-home, we expect to pick up even in the near-term. And that’s just because of where we are with 6330 lab approvals and where they are with homes passed. Now, project-related like optical business, we expect to continue to slide. So, those are the two pieces. And in Germany, actually, we would expect a stronger – we expect a stronger Q4 and actually Q1.
Ryan Koontz: Okay. Great. Thank you for that Tom. And can you remind me of the revolver terms you guys have right now? Any planned changes in that structure?
Ulrich Dopfer: No, the terms are still the same. No change.
Ryan Koontz: Got it. Alright. Thank you.
Operator: Thank you. Our next question comes from the line of Tim Savageaux from Northland Capital Markets. Please go ahead with your question.
Tim Savageaux: Hi. Good morning. A couple of questions about the Q4 guide. It looks like based on a separate report, out of the kind of legacy ADVA, but that’s expected to be flattish into Q4. I don’t know if that’s a lot of decline in optical and some strength in enterprise. But – so it would seem based on that, that most of the weakness is coming from the kind of legacy ADTRAN side. I wonder if you could confirm that and talk to whether that has a geographic focus to it in Q4? And kind of as an aside to that, maybe ask the same question about regional service providers for your Q4 guide as you answered earlier for Q3, which is, I don’t know if you expect that to grow in Q4, but do you expect it to outperform? Thanks.
Tom Stanton: Let me get on the first piece, and I will ask Ulrich. I am not sure how we are getting – how we are coming to that number. But our expectation right now is the optical piece of the business is going to be down materially. That’s the biggest drop. So – and so that’s the legacy ADVA piece of the business, which we do expect to be – that’s kind of the big change as those project movements. Ulrich, you want to touch.
Ulrich Dopfer: Yes. It’s going to be further down. And if you recall it, last quarter, the ADVA side of the business updated the yearly guidance to down to the low teens for the year. So, I don’t know where you got the read from the ADVA or ADTRAN Networks that side will continue to be on that level where it’s currently at. So again, the yearly guidance for the ADTRAN Network is in the low teens.
Tim Savageaux: Okay. Fair enough. What I am reading here is high-single digits to low teens, so taking the midrange there. But really, we are on the bottom end of that range. That’s fair enough.
Ulrich Dopfer: That comes – like Tom said earlier. Yes. Like Tom said earlier, the order entry was disappointing on the ADTRAN on the optical side. And the push-outs were actually the big mover, right, the push outs into next year from many of the projects that were originally scheduled for the fourth quarter.
Tim Savageaux: Okay. Well, then it sounds like on that basis that you could have some decent expectations for regional in Q4, but I just wanted to follow-up on that question.
Tom Stanton: Yes. It’s been relatively consistent. OLT shipments have been relatively consistent, just ongoing. And they are not – there was a period, not that long ago, where they are growing 30% or 40% a year. But at this point in time, they are kind of just flattish and we are okay with flat right now, needless. So, I would – I don’t have that exact number, but I would expect them to operate the way and behave the way that they have been behaving. Does that get your question?
Tim Savageaux: Yes. Great. Thanks very much.
