Ribbon Communications Inc. (NASDAQ:RBBN) Q3 2023 Earnings Call Transcript

Dave Kang: Got it. And then regarding optical or IP Optical in Europe, it was down 22%. I think you mentioned some of the projects being delayed. Is that related to like macro headwinds? Is that uncertainty causing customers to kind of delay projects or any color on that situation? And what makes you think or have they – are you expecting them to be than this quarter in the fourth quarter?

Bruce McClelland: Yes. So, this is not a, I will call it, a macro headwind in the context of excess inventory and those types of issues. I do think getting to a decision on an opportunity takes longer. Clearly, the interest rate environment creates more challenges. So, people are being more careful in their spending. But from a – it’s not so much really a macro trend issue as far as Q4, our bookings velocity so far in the quarter has been very healthy. So, we have got, I think better visibility, better momentum into the quarter. Some regions like India, we are already kind of fully backlogged for the quarter. So, I think the context here and the visibility we have into the different opportunities is pretty strong at this point, Dave.

Dave Kang: Yes. And speaking of India, some of the equipment vendors that sell into India are pointing out that India could be peaking or slowing down already. Just wondering what do you see from your Indian customers?

Bruce McClelland: Yes. So, I think it depends on what part of the network you are in. If it’s in the RAN portion of the network, I think that’s fairly true. The piece of the network we are in, kind of optical transport their IP/MPLS network and their sell-side routers, I think the capacity additions there are happening later in time than the original RAN infrastructure. So again, we have got very good visibility into the fourth quarter. I think next year looks pretty positive as they continue to expand, in particular, things like cell site routers into the locations where they are adding 5G coverage. And obviously, the new share that we have around optical helps us as well, particularly around margins now that we have shifted a lot of the infrastructure elements, we can shift more of the capacity elements going forward.

Dave Kang: Thank you.

Bruce McClelland: Thanks Dave.

Operator: [Operator Instructions] Our next question comes from the line of Tim Savageaux with Northland Capital Markets. Please go ahead.

Tim Savageaux: Hey. Good afternoon and congratulations on the win with AT&T. It’s been probably been a long time coming and not related, but somewhat so just real quickly, any 10% customers in the quarter? And I will go on from there.

Bruce McClelland: Yes. Hey Tim.. So, Verizon was a 10% plus customer again in the quarter in the third quarter here.

Tim Savageaux: Okay. Just Verizon, and part of the reason I ask that is, and I don’t know what it is about Q3 reports. But last year, on this call, you guys talked about a number of Tier 1 wins, and I think announced the Bharti deal somewhere around that, maybe in advance of that. And of course, you are talking a lot about some incremental Tier 1 opportunities. I guess they didn’t make it to 10% in the quarter, but India is fairly strong. And I think you have already taken a crack at sizing the opportunity with AT&T, at least the short-term opportunity. But I was hoping maybe you could put it into context relative to some of those wins you announced last year and/or what you are seeing in the current Tier 1 pipeline. And maybe an update on that in general, I think last year, you talked about, I don’t know, 18 Tier 1s you were chasing a certain number that you won and etcetera.

So, on the anniversary of that, maybe we can get an update there? And then just, I guess an overall question about the size of the Tier 1 pipelines and the AT&T opportunity, in particular relative to some of what you already won.