Ladies and gentlemen, thank you for standing by, and welcome to the ADTRAN’s Third Quarter 2021 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] During the course of the conference call, ADTRAN representatives expect to make forward-looking statements, which reflect management’s best judgment based on factors currently known. However, these statements involve risks and uncertainties, including the continued spread and extent of the impact of COVID-19 global pandemic, the ability of component supplies to align with customer demand, the successful development and market acceptance of our products, competition in the market for such products, the product and channel mix, component costs, freight and logistics costs, manufacturing efficiencies or other risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2020 and our quarterly report on Form 10-Q for the quarter ended June 30, 2021. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements, which may be made during the call. It is now my pleasure to turn the call over to Tom Stanton, Chief Executive Officer of ADTRAN. Sir, Please go ahead.

Thank you, Mel. Good morning. We appreciate you joining us for our third quarter 2021 conference call. With me today is ADTRAN’s CFO, Mike Foliano. Following my opening remarks, Mike will review the quarterly financial performance in detail, and then we will take any questions that you may have. The results for the quarter were mixed. From a demand and long-term outlook perspective, the results were very positive with record quarter bookings for any quarter in our history and the addition of two new Tier 1 fiber operator customers in the EMEA region. And since our last call, we have picked up yet a third. However, near-term growth was constrained and profitability for the quarter was negatively impact due to the unprecedented supply chain challenges facing our industry. While we do expect macroeconomic constraints to persist through 2022, our current outlook shows some improvement during the first half of next year. Taking a closer look at the demand for our solutions, bookings were up 43% year-over-year where they booked to bill ratio of 1.43 for the quarter. Our record bookings were well balanced across the growth segments of our portfolio, as well as across our growth regions, especially in the U.S. and Europe. This growth included a sharp increase in bookings for our Tier 1 fiber access customers, as we are now transitioning these customers from field trial evaluation phase to scale deployments. The three new Tier 1 operators in EMEA are just the latest example of an increasing pipeline of new customer growth opportunities for us. We now have five Tier 1 operators in the region with two previously announced Tier 1s moving into scale deployments and the others preparing for deployment in 2022. The success in the region is not limited to the Tier 1s. If you look…

Thank you, Tom. Good morning to all. I will review our third quarter results and provide our expectations for the fourth quarter of 2021. I will be referencing both GAAP and non-GAAP results with reconciliations presented in our press release and supplemental financial schedules on our Investor Relations webpage at investors.adtran.com. The supplemental financial schedules on our web page also present certain revenue information by segment and category, which I will be discussing today. ADTRAN’s third quarter 2021 revenue came in at $138.1 million, compared to $143.2 million in the prior quarter and $133.1 million for the third quarter of 2020. Subdividing this across our operating segments, our network solutions revenue for the third quarter was $120.8 million versus $125.4 million reported for Q2 of 2021 and $115.2 million in Q3 of 2020. Our services and support revenue in Q3 of this year was $17.3 million, compared to $17.8 million reported for the second quarter of 2021 and $17.9 million for the third quarter of 2020. Across our revenue categories, access and aggregation revenue for the third quarter of 2021 was $89.2 million, compared to $91 million in the prior quarter and $85.4 million in quarter three of 2020. Revenue for our subscriber solutions and experience category was $44.9 million for the quarter versus $47.8 million for quarter two of 2021 and $43.1 million for quarter three of 2020. Traditional and other products revenue for the quarter was $4 million compared to $4.5 million for quarter two of 2021 and $4.6 million for quarter three of 2020. Looking at our revenues geographically, U.S. revenue for Q3 was $91.9 million versus $94.7 million reported in quarter two of 2021 and $92.8 million in quarter three of 2020. Our international revenue for Q3 of 2021 was $46.2 million, compared to $48.6 million…

Thanks, Mike. Mel, I guess, at this point, we’re ready to open up for any questions people may have.

[Operator Instructions] We have the first question comes on the line of Rod Hall of Goldman Sachs. Your line is now open. You may ask a question.

Hi, thanks for taking my questions. This is Bala on for Rod. Tom, you comment the last month on the pricing that your ability to pass on pricing to customers depends on competition. Could you maybe expand a little bit more on what you’re currently thinking on what percentage of your products that you maybe plan on passing on this higher cost income of higher pricing?

Yes, sure. So there’s pricing that is very much related to shipment dates and requirements or inventory builds or whatever that a customer may have. Those are typically expedite fees that we’re paying or particular freight charges that we’re having to incur because of those. Those are relatively straightforward to pass on. I think the customer understand that and we’re able to work with them and I think we’ll be able to see some improvement there in our ability to raise those prices according to what those fees are. And that’s fairly much across the board. There’s not a lot of the pushback on that. Because I think we can easily show what that impact is. Then there are price increases that are more just increases from the supplies themselves or from the components themselves. And those are ones that we are starting to pass through. And I think you’ll see it to where it’s fairly broad based, but that’s something that’s going to roll out over time.

Got you. And these would be semiconductor components, et cetera, there.

Majority. Yes. Majority of the semiconductor, I think every vendor in the space has seen that. We’re not going to lose our competitive advantage that we have. So, but there are areas where we have a significant competitive advantage today that you’ll see us try to – you’ll see us raise prices and then other areas where it may be a little bit tighter where you’ll see less of an increase or no increase, that’s just going to be variable. But, like I said, that’ll roll out over time. That’s not an immediate thing. I think the immediate things that we’re seeing and we’re seeing, as much as you ever receive a positive receptance on them, understanding where we are and trying to get supplies to them on an expedited basis.

Makes sense. And I assume, it also depends on the current backlog, because I assume the backlog that you already have would be based on maybe older pricing rather than the higher prices that you might want to pass through in the future.

That that’s true. But expedite fees and freight are something that would go on into existing backlog as well.

Sounds good. And as you think about next year, I know, you don’t generally talk about yearly guidance anyway, and given the situation right now, it still be even more tougher. But as I just think about demand and supply here, given really strong bookings growth and then book-to-bill, et cetera. So you’ve got clearly lots of backlogs here. So I assume the revenue ramp through the year depends really on the supply. So I just wanted to understand, like how you’re thinking about improving supply going through the year. I think I picked up some commentary in the call today in your opening comments that you are start to see maybe some better play already.

Yes. So the problem is, of course, you can break the supply chain constraints into multiple segments. One is freight. I think, in general, people expect freight and we are no different expect freight to improve as we go into next year. And that is some of the bottleneck that we’re seeing definitely saw that in third quarter and impact us in third quarter. And I think freight charges will also go down associated with that increase in capacity. And you have kind of the – let’s call it, the large semiconductor, the kind of the systems on a chip or kind of higher end semiconductor, where we have been ordering to those extended lead times for some time now. And as we get closer to those extended lead times coming into our normal supply chain fold that will improve and we’re already starting to see that impact. So those kind of ones that people are having problems with throughout this year, we expect to get better as we go into next year. And then you have these kind of smaller semiconductor pieces that are kind of – I tend to call it glue logic, but just smaller pieces that is going to be problematic. It is problematic today. It’ll continue to be problematic for – as we go into next year, but in – on a whole, I would expect things to get better. I don’t expect it to be overnight and my kind of internal gauge and it’s just that is we’ll start seeing that kind of improvement in the second quarter. We are already starting to see improvement on those larger semiconductor pieces now. But kind of all of these pieces, if you’re missing one piece of silicon, you can’t ship anything. So all of these pieces will continue to improve and we really kind of see it, kind of clearing up a little bit towards the second quarter of next year.

Got it. One more follow-up if I may. Last few quarters – last couple of years, this same increase in business with smaller regional operators now with Tier 1s coming back and with lots of wins given the revenue mix would change, I assume. And my question is really how would the margin structure change with this larger Tier 1 projects coming back.

In some cases it’ll change, in some cases it won’t change that much, in general. So kind of let’s say, pre-environment, pre-supply chain environment that we’re dealing with of right now. Our model has been mid-40s and that included the mix of small carriers and large carriers. And that really hasn’t changed. So we don’t expect a huge shift because of that. Sometimes, you’ll see some shift at the very beginning, depending on if they’re buying a bunch of chassis versus line cards, and there is a difference in margin on those. But at the same time, we have a much stronger software mix going into a lot of these customers. So that may mitigate that. So kind of the mid-40s normal environment is what we’re still looking at.

Very helpful. Thank you so much.

Okay. All right. Thanks very much.

Thank you. Going back – going to the next question we have the line of Michael Genovese of WestPark Capital. Your line is now open. You may ask a question.

Thanks. So it looks like you’re guiding to gross margins, sequentially, maybe slightly up, very slightly up. Could you talk – do you have visibility beyond the quarter of when we could get back into the 40s and, let alone the mid-40s?

It’s – what we don’t know. So if you look at our internal models, I’ll just be kind of being very open here. Our internal models are anywhere from kind of mid-30s, mid to low-30s to 40 for this quarter, right. And we ended up at the mid-30s, because that was the best – that’s kind of the most – that’s kind of an even look at the way we see the profile ending up. The reality is we won’t know until we get towards the end of the quarter, because expedite fees are typically not asked until the shipment is right upon you and the same thing with freight. So we do think right now, freight is a little bit better than it was last quarter, which would help us, but it’s hard to say. Going into Q1, freight will be better. So I would expect some improvement there as to whether or not it gets us to the low-40s, is it’s just too early for us to be able to see.

Okay. Sticking on the topic of visibility, I know you don’t give guidance typically beyond one quarter or really ever. But did you think about at all about the possibility of giving an annual revenue guide, given the strength of demand and obviously the supply chain is adds a little bit of cloudiness. But what – any thoughts on the full year, I know you don’t normally like to talk about that, but I just thought I would ask.

Yes. I mean, to say the supply chain is a little cloudiness is probably underselling that a little bit, because it’s a lot of cloudiness. From a bookings perspective, we’re extracting to expecting a really strong year next year. I mean, I just talked about some of the Tier 1s and all of these Tier 1s, as you know, they tend to sometimes by themselves be able to move the numbers. So we’ll bring it on four or five Tier 1s next year if not more. And all of them are really started to contribute – some of them are starting to contribute actually now and we’ll continue on starting Q1 and others will come on towards the half of next year. I’m sure some will come on in third to fourth quarter. So all of those are going to be – and there’s not a lot of detractors, right. If I look at the U.S. business and the Tier 3 space, if I look at the alternate business in Europe, if I look at our enterprise business, if I look at all of these different components, including giving down into the RGs that – and the growth that we’re seeing there. I don’t see a whole lot of downside. I just see a lot of incremental revenue pieces coming online. But I think supply chain is going to be our biggest challenge. It’s just – and it’s one that actually clears up.

Okay, great. And then final topic from me. I want to ask you about your SaaS business, just want to make sure I understand the business model and I just confirm that this is where the service providers are paying you per month, I would assume for a certain number of subscribers for certain services they’re delivering. Is that – do I have that correctly? And then I’m just wondering, just ballpark, I’m sure we’re probably at a small number of subscribers right now. I would assume, I don’t know, under a million or something, if we’re counting that. But any clarity on just this business model would help. Thanks.

Yes. So I believe in aggregate, so first of all, what you said is correct. Our SaaS business is very much a pay as you grow and pay as you go. So as customers come online, then – and they bring their customers online, then the revenue will start growing in that and that is although maybe build on a quarterly fee or sometimes even a yearly fee, it is a monthly fee that it’s actually accumulated off of. And yes, it’s fantastic growth in number of carriers and the whole key is getting customers connected. So a lot of these customers that we’re selling both here in the U.S. and Europe are participating in that SaaS model. And as they start building their networks out, you’ll see incremental revenue growth from there.

I don’t see to want to come in and the number of subscribers ballpark, what kind of order of magnitude we’re at.

Yes. So we are the number of customers that we have signed up that are…

So when you say that metric, you’re talking about service provider customers, you’re not talking about the number of their subscribers. Is that correct?

Right. Service provider customers, but the number – but they will not start including in our revenue base until they sign their – until their customer gets brought onto service. So if you look like, even a new Tier 1, where we’re selling them XGS as they start loading their network, that’s where we start seeing the revenue, right. And if I look at the number of subscribers that they have committed to today, it’s in the millions.

Perfect.

But they have not rolled out yet.

All right. I appreciate it. Thank you.

Okay.

Thank you. Next question we have the line of [indiscernible] Titan Capital. Your line is now open. You may ask a question.

Great. Thank you. May I follow-up on that last question to begin with the millions of subscribers, what’s the timeframe that is attached to that commitment.

It’s typically, so I’m trying to think of some of them are worded differently. But let’s say, three-year timeframe where it – well, it depends on just how they’d load them, if they have signed up for them and as they load their customer base, but we typically tend to think of these contracts in a three-year kind of timeframe.

Great. Thank you. And then circling back to pricing, what’s the timing at which you think you can have component prices incorporated – component price increases in incorporated into your pricing?

I mentioned expedite and freight charges are relatively straightforward we’ll be doing that this quarter. You’ll see that the price increases that we’ll be able to pass on to our customers will happen in the first half of next year.

Thank you. And then lastly, relative to the new Tier 1 wind since the last call that we had, what can you share about that customer?

It’s a Tier 1 in Israel. I think that’s pretty specific.

How about magnitude size relative to some of the others and when do you anticipate that they will be ramping. And thanks for the specifics, that’s helpful.

Yes. There’ll be ramping – they have a fairly aggressive plan. So probably earlier next year probably for the half is what I would – that’s the way to characterize that. They’re not – we have some that are trying to cover 20 million and 30 million homes in a short period of time. Those are very big customers. Then we kind of have a Tier below that some of those are multinationals that will cover tens of millions. And then we have some that are covering 4 million to 6 million. And then you kind of go down into there. My guess would be – they would be kind of in that second or third tier.

Great. Thank you for the perspective.

Sure.

Thank you. We have the next question comes from the line of Paul Silverstein of Cowen. Your line is open. You may ask questions

Thanks. First off, you were about to give the number of service provider customers that are committed to SaaS before Mike interrupted you. If we could give that number, that’d be great. I’ve got some others.

No, I wasn’t going to get the number of service providers that have committed to SaaS. I was going to – he asked me, I think number of users or something, but I don’t know if I have the exact number of service providers. I’m sure it’s hundreds if you include…

That’s good enough. All right. Sorry, Mike. How much software revenue do you all have a presence?

I think the general range is 5 to 50 that’s as much as we’ve ever broken it out.

$5 million to $50 million.

Yes. Closer to $5 million and $50 million at this point.

I have a question for you. So you and Mike for a long time has been referencing a low to mid-40s gross margin model and understand the ADVA deal is going to put another. It will add to the I guess, ceiling in terms of where those margins to go out, given the limitations and the obstacle in general, and average specifically. What assuming as you’ve articulated that the model is going to shift more and more to software over time? Why should that have the meaningful beneficial impacts all the things being equal to your gross margin profile and their buyer overall profitability? What am I missing?

Okay. So let me touch on your first comment on the ADVA deal. We don’t believe that the ADVA deal will be dilutive to gross margins. If you look at them on where their product is positioned today on what we will be able to do with them in the Tier 3 and Tier 2 market here in the U.S. We don’t believe will be dilutive. We also believe that with our orchestration product, which is mosaic based that pulling their products under the orchestration umbrella that we are going to relatively quickly be able to fold out will help us both on gross margin. So I don’t think the first comment is correct.

Well, yes. Mike, I’m sorry, it sounds just be clear. I didn’t say dilutive. I said that obviously hearing or add to the ceiling, you’ve referenced a low to mid-40s model. They’re a low to mid-40s gross margin company. They always have been, it’s never been better than that – more significantly. Go ahead.

Yes. So yes, the base will be larger. So I will agree with that, but I do think that’s a potential there with a combination of what we’ll be able to do as a solution before this mid mile and access problem. We’ll be ultimately helpful to gross margins. Your comment is when will that start? It contributes today every quarter, our software revenue base continues either to grow in momentum on a pure dollar basis. Sometimes it’s actually depending on billings for the existing base. It can be fairly meaningful, but it’s just a matter of getting these things installed. If you look at the number of carriers that we have in Europe that are just now ramping up most, if not all of those have some software component to them, either in the orchestration, which is still on a per element basis or sometimes all the way to the in-home service delivery, which I’d mentioned before we signed up Tier 1s for that as well. So and of course, the more software they buy from you, the better off you are, but it will continue to drop gross margins up.

And just – we understand, the gross margin was software that you’re selling the monetization that software, is that coming at 60% or 80% or 90% gross margin? What is the average gross margin or does it vary depending upon what type of software you sell?

The gross margin stuff is pretty consistently in that 60% to 80% range.

All right. So the more you sell it’s about an offer. So again if I go back to it and I appreciate that historically all been very sober and talking about low to mid-40s, but why given that the model shifting? Is it just that you all didn’t look – you all didn’t want to discuss that for into the future. I’m trying to understand why you might’ve never referenced a higher margin model in terms of a long-term potential given the shift, you’re starting to drive the software.

It’s probably whether or not we’re just getting outside of the comfort zone of our visibility. So if I look at next year, I mean, you – as well as anybody knows the number and the scope of the Tier 1s that we have already put under contract, right. Most of those are starting. I shouldn’t say a lot of those are starting. Most of those are starting kind of in a greenfield environment where they’re going to go roll out fiber, where they haven’t rolled that fiber for. There are some where there’s a replacement element to it. So you’ll have the gross margin contribution of the software and the hardware at the same time. The majority are not like that. So I’m going to be shipping a lot of hardware next year, right. And then that software comes on as they add customer. So it’s all about their customer acquisition rate that’s going to ultimately drive that software revenue, but I’m going to be swamped with a lot of infrastructure next year.

And Paul, remember, I used to say low to mid-40s, and then we looking at software and other factors in the business. We said, yes, we see the mid-40s, probably a year ago that’s when we made that change. So it has moved a little bit. I know you’re looking for more, but I think that’s where we believe it is at this point.

And if you look at the hardware shipments that we’re planning, I mean these are carriers that are planning just two or close to 50 million homes passed in a matter of what three or four years that they’re trying to get to. So it’s a significant amount of hardware. And that’s not bad growth. That is great business by the way, right. I mean it’s not, but the software piece has to catch up as we add subscribers.

Got it. Mike, I think the loss of a quarter – share with us, your Tier 3, or at least your Tier 2 and 3, I’m not sure you’ve delineated it, or what the growth – year-over-year growth rate. I don’t think I heard you say at this call. Can we get that number?

I think the Tier 3, the problem we had is we were supplies and strength predominantly in that area. And even with that, I think our revenue growth was mid-teens.

Tom, can you remind, that mid-teens compared to prior to the supply constraints or the previous quarter.

It has been consistently, I will tell you bookings, there were strong again, it has been consistently in the kind of mid-30s to forties, but I want to make sure you understand that that was – yeah, that’s U.S., that’s U.S. And that was just a – what could we ship when I promise you, I could’ve made that a 60% number if I had supplied.

All right. It’s on a far that is just want to make sure that that’s just Tier 3s, are that Tier 2s and 3s collected?

I think this to – I think, that was probably just Tier 3 Mike, if I remember the number.

That’s right.

Yes. And Tier 2s were probably right around the same area. I mean we have a big customer that here again, we’ve got supply constraints on that. So we’re really just trying to make sure we keep I mentioned this I think on the last call, we’re trying to make sure that we don’t lose any relationships in this current environment.

And Tom, so the Tier 3s were mid-teens growth was the – could have been 60% of that, did that relate to the…

Yes. I’ve got, yes. No, no. That mid-teens could have been 60%. Yes.

And you said Tier 2 about the same, so Tier 2 grew around in mid-teens, but could have been 60% growth for supply constraints.

Yes. I don’t know about the 60% in Tier 2s, because I know the Tier 3s, just the backlog is so, when we say Tier 2s, we typically think about a couple of carriers here in the U.S. maybe three. But I know it have been – it would have been stronger than it was. And I would say the Tier 3s have been outgrowing the Tier 2s now for over a year. I mean the Tier 3s tend to be in the low to mid-30s, the tiers, excuse me, the Tier 2s are lower to mid-30s. Tier 3s have been in the high-30s to 40s.

And can you remind us together what the – or even better separately, what’s your three zones percentage of revenue. What’s your two zones percentage of revenue at this point?

We’ve been saying I think over 60% and that’s still true.

Together collectively?

Together majority of that is the Tier 3s.

So Tier 3s is over 30% of total revenue. Tier 2s has been a balance of the 60%.

Tier 3 to probably over 50% of revenue. And Tier 2s probably they’re little lumpy. It’s a very small set, right. So it’s – they can come in and buy a lot. We have about load on backlog right now for them and it’s a matter of a shipping it, but a Tier 3s are the biggest component of that.

All right. I’ve got one last question if I may. This looking further out, but given the varied site, labor supply long with labor tightness and fiber perhaps no different than other components. Tom, how you feel that have an impact on various service providers deployment plans in terms of the ability of the Dycom NASDAQ or any other trencher to actually do a deployment and how that could ripple through and push back ultimately the last piece in terms of the twin volts is and eventually ONCs is down the road. Are you seeing any of that?

I haven’t seen any of that. I have not. No, I haven’t heard of anybody changing their plans based off of labor or fiber constraints. Yes, all of our calls are pretty much one can you get me the equipment.

All right. Just relate to that has given the increased uncertainty around adoption of the infrastructure plan by Congress has that impact. I know this is all very much in flocks. What have you seen any impacts on service providers deployment plans relate to that was everybody banking on that it was coming in and they’re now discussing delays.

No. No, we’re starting to see actually RDOF shipments. We got orders for RDOF shipments in the fourth quarter. So all that’s pretty much locked in or shouldn’t say locked in, all that starting. I haven’t none of the carriers that we’re talking to at this point that I’m aware of have based of their current plans on infrastructure, on some infrastructure funding. I think that from my perspective, that’s just icing on a cake.

Got it. I’ve got others, but I’ll take it offline. I appreciate the responses. Thank you.

All right.

Thank you. [Operator Instructions] We have the next question comes from the line of Tim Savageaux from Northland Capital. Your line is now open. You may – your line is now open. You may ask your question.

Good morning. And one question, it will be..

Okay, great.

If I have the energy left and assuming you do. And it really has to do with your kind of a merger partner here as along a couple of lines, which is one and they different product focus and supply chain, but we’re able to navigate some of these challenges pretty well in terms of their results. And I guess the first question is, as you see the two companies coming together and maybe even now, does that increase scale or potential for increased scale, influence your supply flexibility in any way. On the one hand and do you expect the combined companies to be able to kind of benefit from that scale and supply expertise in a way that might be impactful actually in calendar 2022? In fact, I’ll leave it there and follow-up very briefly.

Yes, sure. So the answer is, yes. The impetus for the deal is not necessarily just scale. I think scale in this type of environment is important. And it does give you flexibility, but just the reach out that we’ve had from our vendor base based off of you this – the two companies coming together has told me that it’s important to them as well. So I do think it’s going to help us. We have what $52 million or so synergies that are related to that. A lot of that is in the supply chain. And I think that’s just the tip of the iceberg or what we’ll be able to get. But in a constrained environment like this, the size of the customer and that the way that they’re dealing with you will change the bigger you are. So yes, I think that’s a very positive thing. But let me just add a little bit. The rationale for this is, we’re in the midst of a Broadband Boom, right, so never seen this type of activity. Even setting aside stimulus dollars, never seen this kind of activity, both in Europe and in the U.S. And in Europe, it’s compounded by the fact that they have Eastern vendors that they have to pull out of their network. So the Broadband Boom has been fantastic, good or bad COVID has definitely highlighted the need for broadband. Now there are stimulus dollars, both in Europe, I think in Europe, there’s – we’ve calculated $60 billion something of stimulus going into build broadband, here in the U.S. it’s over $100 billion, which is not – never seen money like this, and it’s just started. So our belief is broadband is multifaceted. One is the access piece, getting fiber to the home. And another piece is the in-home experience and getting RGs and ONTs and all of the things that you need in order to make this work within the home. Another is once you get this to that point, you have to back call this network. Almost every customer we’ve talked to about this deal has talked about the – how the rationale makes sense for them, because as soon as they put in and start building out these 20 million or 30 million homes passed, they have to upgrade their middle-mile and metro network in order to be able to get that type of speed change. So to us is one broadband push. And that’s why it makes sense. And if you look at the opening door that happened – that’s happening in Europe today because of the Eastern vendors, there’s no better time right now to come up with a complete solution that is software managed for this entire problem.

And that was really my follow-up with some commercial, the kind of market facing side, when thinking about the deal, you guys kind of continue your sweep across Europe. Obviously, that’s where office headquartered in a historic area of strength and you guys share some customers. Are you, at this point, beginning to see any opportunities emerge as a result of the plans transaction? Does it become easier to kind of get things to the goal line with that in mind or any other kind of indications of market-facing synergies from the deal? And that’s it for me.

Yes. It’s been more anecdotal unfortunately than direct, because it’s been through conversations that I’ve had with customers about the deal. And I can honestly tell you, every customer I’ve talked to has been very positive. In Europe that they see us being able to come together and offer a real alternative to the other European vendor there, they’ve really want two strong alternatives to the Eastern vendors that they’ve been using in kind of historically have been using. And they see this combination coming together, not just from a technology base, which is relatively straightforward, when you think about just orchestration and what our SDX system is all about, but they also see it just from a strength base. So it’s been positive across the board have not had a single negative comment. So thanks very much for the question, Tim.

Thanks.

With that, I see, I think we’re out of questions. So I appreciate everybody joining us for the call and we look forward to talking to you next quarter.

Thank you. Ladies and gentlemen, that concludes today’s conference call. Thank you all for participating. You may now disconnect.