Amit Daryanani: Got it. And then maybe if I just go back to the full-year guide that you folks have provided on 1% to 4% revenue growth and totally understand the macro-environment you’re sitting in help aside. Is there a way to think about how does the growth breakdown across the different geographics for you? And I know North America seems to be the one place that’s somewhat weaker for you, but when you look back historically, when you’ve had these digestion period with the North American company, is it a one, two quarter phenomena or do you think it could be longer given, in a way how much product they in took through the pandemic. Just any color on how does growth breakdown across geos and then what is the digestion timeframe looks like as you go forward? Thank you.
Gary Smith: As we look into ’24, we think that we will particularly be growing in the international space, we’ll have a higher growth rate than average there. That, Americas is probably lower and the GCN will probably in between those two. That’s how we think about it as we enter the year.
James Moylan: The other part of your question around, you know, what would be the digested. I’m really sort of honing in on sort of North America Tier 1s. You know, I think it was sort of overused word in the last couple of years unprecedented around the sort of whiplash of supply-chain. And you can see, you know, listen, our revenues were up 21%, so that’s a lot of equipment for these cloud providers and service providers to digest. I think the cloud players were the first to see the issue and are clearly coming out the other side. We are seeing signs that many of the service providers are coming out the other side of this. But it’s really the precise timing of that. We think it’s probably midyear, and I think as we said, you know, we talked about this last quarter and I think what we said last quarter was, you know, another couple of quarters of digestion on the Tier 1s.
And I think that’s probably you know a view that we still maintain. So sort of midway through our fiscal year as we start to come out of our Q2 into Q3, we expect them to get to back to collectively to normal order cycles.
Amit Daryanani: Thanks. Perfect. Thank you.
Gary Smith: Thank you.
Operator: The next question comes from Tal Liani with Bank of America. Please go ahead.
Tal Liani: Yes, hi, good morning. First, just would you mind to repeat your revenue growth targets for next year? We have an internal disagreement here of about what you said, we need a clarification. I want to ask a question about your participation or the impact of your business on the — of the carrier efforts to reduce spending. So we’re seeing kind of Nokia losing share because of migration to OpenRAN and the core carriers are trying to adopt new technologies that are much lower in spending or require much less spending so their CapEx to revenue ratio can go down over time. In that kind of environment over the next few years, what are the implications for Ciena? And what are the areas where you would be exposed to these efforts? And what are the areas that there is no exposure? Thanks.
Gary Smith: Just to be clear, Tal, we guided revenue for ’24 to be in a range of 1% to 4% up.
Tal Liani: Perfect.
Gary Smith: We guided Q1 to be $980 million to $1.06 billion, that’s what we said, and mid-40s gross margin in both cases.
James Moylan: In terms of the second part of your — well the main question, Tal, in terms of the service providers, you know what we’re seeing from them is exactly as you say, they’re trying to optimize as usual their networks, their spend, their whole sort of financial model. And frankly, overall from that we’re incredibly well placed. When you think about we’ve got the leading technology with spectral efficiency, which you know is a massive sort of cost saver for them. And by the way, we’ve got leadership there now and we’re about to extend that with WaveLogic 6. So the timing of that could not be better. If I think about it architecturally, their biggest costs are around their whole metro infrastructure, which they’re looking to simplify.
And again, from an architectural point of view, Adaptive IP plays incredibly well into that. It’s a much more simplified, lower-cost architecture and you know we’ve already had significant wins with them and they will be rolled out over the course of the next two years to three years. So, as I step back from this absorption, short term absorption issue we’ve got, I actually feel quite bullish around the Tier 1 service providers, particularly in North America, perversely, given the short-term dynamic, because of exactly the dynamic that you’re talking about.
Gary Smith: We’ve been first to market with every generation of optical technology. And each generation of optical technology represents a step function down in terms of cost per unit of bandwidth. So that’s clearly a great benefit for their efforts to restrain CapEx. And we’ll come out with 1.6 terabits this year. So we’re following that path.
James Moylan: Tal, I would also add sort of comment around because I’ve seen some of the stuff around you know concern around their budgets and the rest of it, I think, clearly what you’re seeing in North America is they’re coming to the end of their RAN spend you know on 5G, that is tailing down. So, you know, they’ve got an opportunity to reduce their overall OpEx. But it’s really — in CapEx rather, but it’s really around, you know, what are they going to spend it on. And I feel quite bullish around their spending on the taking cost out into their metro and transport networks.
Gary Smith: And just to mention one other trend that they are really focused on is the whole concept of sustainability, meaning power. And again, each generation of WaveLogic technology provides a much lower power footprint, and we’re contributing to that as well. So, you know, frankly, our development plays right into their needs, which is why we’ve been able to do so well in that market.
Tal Liani: Okay, thank you.
