Gary Smith: Yeah, so, yes, it’s absolutely on track. We’ve got orders already as we — as we shared in some of the — some of the prepared remarks. And we are beginning to engage with customers them coming into our lab to view our various variants of it. So you know as we turn the year here and get into, you know, our Q1 — further into Q1, Q2, we’d expect to start to increase that engagement with customers. And so you know the release would be mid-24. And we’re on track for it, absolutely.
George Notter: Great. Thank you.
James Moylan: Thanks, George.
Gary Smith: Thanks, George.
Operator: The next question comes from Simon Leopold with Raymond James. Please go ahead.
Simon Leopold: Thanks for taking the question. I wanted to start off with the commentary you offered about growing faster than the market. My sort of gloss over the fact that you’re actually in more than one market. And so, I’d like to hear sort of your take on how the growth rates may be different in your assumptions for your, yeah, Packet Optical platforms versus the Routing and Switching segment because I’m assuming you’re going to see much faster growth from routing and switching. But just wanted to see what’s baked into the overall guidance. Thanks.
Gary Smith: It’s a fair question, Simon. What I’d say though is, when you look at network gear, whether you’re talking about optical or routing and switching, the underlying growth rates are not terribly different, you know, they’re in the low to mid-single-digits. What’s different for us is that with our expanded set of capabilities in routing and switching, the TAM or the available market, which is out there for us is growing. So, yes, we do expect to grow faster in routing and switching over the next year and over the next several years than we grow in our optical business. I still believe that we will be able to take some share in optical. But as Gary said earlier, we have a large share now, and the ability to continue to take share is a bit limited. We’ll hold onto our share and grow it a bit, but where we expect to really show growth is routing and switching.
Simon Leopold: And that makes sense to me. Just to confirm that your — given sort of your modest position and product cycles, routing and switching could conceivably grow at a double-digit rate in the fiscal year within this forecast. Is that fair?
Gary Smith: Yes. Yes, that is absolutely fair. So listen, we expect to grow in optical notwithstanding the sort of industry analyst view that the market is flat. We will do better than the market there is no doubt about that. But I think routing and switching, you know, we’d expect to be double-digit growth because it’s also where the challenge there, as Jim said, and it’s the lure of smaller numbers. I mean, we’re about $0.5 billion now in that routing and switching business, it grew you know about 27% last year. And I don’t think it will grow as much as that this year, but we’re almost — we’ve still got a lot — a fairly low market share there.
Simon Leopold: Yeah, no, this is in line with what I was thinking, so I appreciate the clarification. I don’t think it’s well appreciated, which was the point of my question. And just my follow-up here is really getting an update on what you see, particularly in Europe on the Huawei swaps. It’s really a jump for you know a number of folks competing for that and some of your competitors have announced Huawei displacements. I’d like to hear your take on how you see that playing out? Thank you.
Gary Smith: When I think about Europe and the Huawei displacement, I sort of bifurcate the RAN piece from the sort of what I would call generally the sort of transport and routing and switching piece to it. Obviously, on the RAN, there’s been a lot of geopolitical pressure on to the 5G and the rest of it and that’s sort of well understood. I think on the stuff that’s already in the ground there and there is a significant share that they’ve got on the transport and routing and switching side and even broadband side as well. That is going to take longer. It’s a multi-year change out a) because of the operational challenges of moving them across. So what we’re seeing most of the carriers is when they get to a certain inflection point where they are going to make decisions around their next generation stuff or investments that is when they are making the change.
And we are seeing that. In fact we won recently in Scandinavia a Tier 1 player that you know exactly, exactly that shift over on the transport. So we are continuing to get more than our fair share there. I think it will be a multi-year program. So over the next two years to three years as they change out their transport piece, but it’s a great opportunity for us. There’s no question about that. But we’re in I know everybody asked me what innings we’re in, so I guess we’ll use a baseball analogy for that, shall we? We’re in about the third inning of that.
Simon Leopold: Great. Thanks for taking the questions.
Gary Smith: Thanks, Simon.
Gregg Lampf: We’ll take one last question please.
Operator: Thank you. And that question will come from Michael Genovese with Rosenblatt. Please go ahead.
Michael Genovese: Great. Thanks so much. For the sake of time, I’ll just ask one question, and I’ll forgo the follow-up. I appreciate you getting me in here. When I look at the three, actually, you know, I take that back, I am going to ask that question. But when I look at the three-year guidance, you know, of six to eight with this year being lower, I mean, that implies an acceleration. And hearing about everything going on, particularly more cloud, the international opportunities and then getting into the data center with 800G in about a year, I’m wondering if there is not an implication here that the long-term growth rate of the company has moved up slightly from 6% to 8%, it might not be 10% to 12%, but it might be higher than 6% to 8%. Do you have any thoughts on that?
James Moylan: Well, what I’d say is this, as you just did the math, clearly, our guide for the year and our guidance for the three years implies higher growth rates in the two years after ’24. And that’s really because we are going to be hitting our stride in a couple of markets, including routing and switching and PON. So both of those are going to drive very good growth rates. I also think that the Huawei displacement will start to gain some momentum as we move through the next couple of years. So, yes, we do believe that the two years following ’24 will be higher. Beyond that, what I’d say is, we’ve given you three years, Mike, that’s a long time for us. And we feel great about the future, but we’re not willing to say, it’s going to be higher than 6% to 8% beyond that.
