Nancy Erba: So. Yeah, I mean, first of all, no, nothing has changed in terms of the team. And we’ve been, you’ve seen continuing to improve our processes over time. This was an inspection of our auditor, by the PCAOB, that was randomly impacting Infinera, meaning, they had an inspection Infinera’s kind of name withdrawn, so to speak. The methodology that we use, they had questions about in terms of our approach to how we allocate between hardware and software and services. We reviewed some of their questions, some of their suggestions, and we agreed that we needed to make a change to that methodology. But that simply changes quarters in which revenue is recognized, it does not change. In total, the revenue amount that we will recognize over the life of a contract.
And as you can see from the range we showed in Q3, is limited in scope. I mean, in terms of the absolute magnitude, you can think of it as, a quarter of a percentage up to maybe a few percent in any particular period, but we don’t expect it to be something that that slows us down. We’re continuing to execute and operate. We are working through the remaining work that we have to get done with our auditors and we will try to file our 10-Q as quickly as possible.
David Heard: Yeah. That’s why we were comfortable with the ranges we put out and putting out our Q4 guidance. But obviously, given this a slight late in the process, Nancy’s team has to work through this with the auditors that to file the 10-Q. So, that’s where we’re at.
Simon Leopold: Thank you.
Nancy Erba: Thanks, Simon.
David Heard: Thanks, Simon.
Operator: The next question is from Mike Genovese with Rosenblatt Securities. Your line is open.
David Heard: Hi, Mike –
Mike Genovese: Hey. Hi, David. I mean, really nice results and nice outlook, and particularly with the book-to-bill being above 1 in the third quarter. I guess my question is, I mean, particularly, as you mentioned, with competitors or others in the industry, seeing weaker trends, and you guys coming through here. I’m just wondering – and the 1/10 percent customer being a webscaler? Are the orders more than normal, weighted towards webscale? Or are you also seeing this sort of strength in share gain with traditional telco customers as well?
David Heard: Yeah, thanks for asking the questions. So yeah, well, certainly we’re doing very well, that we’ve covered with the webscalers. I will tell you, we want a couple new tier one lovers in Europe that we had never had before. And so that’s – those are nice wins for us, as well as in the Metro, you see, we continue to make big progress and gaining share. When I look at our 40 G30 platform, our GX platform, and I look at the year-over-year comparables to what we’re doing there in terms of product bookings, as well as product billings, they are profoundly. So, we are making inroads with service providers in different deals. We talked about India in our last call, in Europe, as well as we saw nice strength in both Europe and America as this last quarter. So, again the strategy we laid out at our Analyst Day that 8 by 4 by 1 is winning in the core, winning in the Metro and then driving to the edge is what we got our heads down and we’re executing to.
Mike Genovese: Sounds good. And then on the restatement project. I mean, it sounds like you’re saying that Q will be filed relatively on time, which to me suggests like this month. Is that reasonable?
Nancy Erba: Yeah. First, this was not – we are not indicating a restatement. So, we are still doing our work. We are highlighting the range, our preliminary range for Q3 and Q4. We do have work still to complete, which is why we filed the extension on our Q. Our objective is to get it done as soon as practical. So you can probably think of that in weeks mostly if anything longer than that.
Mike Genovese: Okay, good. And then finally, really happy to hear about the refinancing of the convertibles and there’s only $19 million due in September of ‘24. I think that that’s great news. But since we don’t have the Q, I’m just curious, is everything now beyond that are the maturities in ‘27 and ‘28 and beyond? Or do we have things coming due in ‘25 and ‘26?
Nancy Erba: No, so there’s $19 million due in September of ‘24. And we did file at the time of that refinance. So you can see the details there, and Amitabh can send them to you, if you need. And then the next set of maturities, you’re right, are in ‘27 and ‘28.
Mike Genovese: Okay, great. Fantastic.
David Heard: And what was the effective interest rate with us?
Nancy Erba: Our average right now is 3.3%.
David Heard: Okay, thanks.
Mike Genovese: Great. Everything sounds good. Thanks.
Operator: The next question is from Dave Kang with B. Riley. Your line is open.
Dave Kang: Thank you and good afternoon. Yeah, hi. Just regarding on bookings, I think last quarter you said that you expect bookings to increase throughout the second half. So, should we expect bookings to be up once again in fourth quarter sequentially?
David Heard: That’s the only area we don’t actually forecast. Dave, we don’t forecast bookings. But I think what we said, is that, we thought that bookings would continue to accelerate in the back half. There is some lumpiness in bookings. But overall, we see a trend, both in Q3 and Q4, versus the first half that is up at this point, Kang.
Dave Kang: Got it. Okay. And then, also last quarter, you said, tier ones were still in inventory correction mode, while smaller service providers, they seem to be doing better have date changed in the, since 90 days ago?
David Heard: No, I think that you’ve heard in the industry, everybody’s very tight with the capital dollar with interest rates and the economy and the externalities geopolitical forces at play. But, that’s what you heard, my prepared remarks said, our goal is to win more than our fair share, and to ensure that the priority of the orders which with the service providers is rolling out fiber deeper into the edge of the network to get these applications built. And the – the webscalers that we’re dealing with are building out AI infrastructure, and that is fueling demand. So we’re focused on every order dollar that’s up and available, and our job is to take more than our fair share.
Dave Kang: Got it. Thank you.
David Heard: Thanks, Dave.
Operator: The next question is from Meta Marshall with Morgan Stanley. Your line is open.
