CIEN
#Hi, it's <UNK>; I'll take the first part of the question on Ericsson.
Largely we don't see an impact on our relationship.
As you know, the focus of the Cisco-Ericsson alliance is really around the IP and routing space; and we are the best-of-breed optical partner for Ericsson and we're continuing to do well.
In fact, we have won more business with them this quarter, and generally our pipeline with Ericsson is growing and, frankly meeting or exceeding the expectations we had for this year in terms of opportunity and revenue contribution from this relationship.
So generally, we don't see an impact, and we continue to be focused on the optical space with Ericsson and continue to do well there.
On the dynamics around the Alcatel-Lucent merger with Nokia Siemens, it's obviously very early days for that.
But judging by history from when they spun off their optical unit about three years ago, as a diversification under their disposal of nonstrategic assets, I think they called it, into the private equity world, it's clear that their motivation is primarily around mobile infrastructure and RAM, which places them number two in the world.
I think it makes a lot of sense from that perspective.
Also I think the IP, the TiMetra platform, was also another key driver of that.
Frankly, I'm not ---+ I think the jury is out on optical.
We don't, given their other priorities, probably believe that that's strategic to them based on their history and the other things that they're dealing with.
But again, the jury is out on that.
I think on any integration there is always a challenge and an opportunity, particularly when you're essentially putting a number of these large players together ---+ and particularly if the context of that is Europe, which has its challenges as well from a flexibility point of view.
So we'll see how that goes; but early signs are that optical is not a strategic focus for them.
Why don't I start with the broader perspective around what are we thinking in the second half, <UNK>.
I think first of all, we've got the largest backlog that we've ever had going into this time of year, as we look into the second half.
So obviously, that gives us confidence.
Q1 orders were higher than revenue as well, as <UNK> mentioned, so they added to that backlog.
We've got a disproportionate amount of the backlog being international, which can be longer-term; but we have pretty good visibility into the revenue recognition and project completion of those things in the second half.
So that gives us confidence.
The overall pipeline in every region has grown and the engagement levels are very strong.
And obviously, when we look at the forecast process, it includes all of those elements.
I think as <UNK> said earlier on, whilst we're mindful around the other macro uncertainties ---+ and I think we're all very aware of that ---+ I can honestly say we haven't ---+ there's no discernible impact yet on our business to that, both in the quarter that we've just gone through and in terms of the engagement that we're having with our customers.
So I certainly don't think that is a discernible factor yet in the business that we're seeing.
I'll just add to that.
In terms of the drivers in the second half, you're asking to rank-order them.
Not necessarily in order, but the second half will be stronger in part because ---+ we talked about the metro market; we have metro projects ramping up that will be larger in the second half than they were in the first half, specifically in North America.
<UNK> mentioned India earlier, a number of programs in India that from a revenue recognition timing are going to contribute in the second half.
And then the submarine market: as you know, the timing for completion of submarine projects and timing of revenue recognition can be a bit lumpy.
But we have a couple of large projects that will come to revenue in the second half.
So those are three of the big factors that give us confidence in a strong second half.
I think in terms of order of magnitude, Verizon is pretty important.
But there are others that are going to contribute meaningfully as well.
<UNK>, on the deferred revenue piece, deferred revenue arises when we get paid before we can recognize revenues, and that typically occurs in two places.
One is in maintenance contracts and the second is in long-term projects, particularly submarine, in which there is a payment schedule which extends during the period of deployment and then we recognize revenue at the end.
I frankly couldn't give you the exact breakdown of each of those pieces, but I'm sure it's both of them.
If we didn't ---+ the Q1 is going to be a somewhat lighter order intake quarter than other quarters, and so I'm sure that the maintenance deferred revenue went down in the quarter and probably a couple of longer-term projects.
I would not read anything into that.
It's going to fluctuate depending upon our order intake on the maintenance side as well as what's happening with the projects.
Stan, this is <UNK>.
I don't think it would be appropriate for us to get into that degree of detail around a specific customer.
But I would say, and I think <UNK> gave context to it ---+ and I know everybody is very focused on Verizon, and it is a very large deal, multiyear deal, for sure.
It begins to ramp in the second half.
It's probably not the biggest ramp for us of the other engagements that we've got overall.
So whilst it's meaningful I wouldn't just look to that.
I think the numbers you've probably got there are a little high, frankly.
This is going to be a multiyear ramp-up.
It's on track, absolutely on plan, but there are a lot of other factors taken into consideration there.
We think that our second half in North America is going to be strong.
Verizon is a part of that ---+ and bearing in mind we have a lot of other things that we do with Verizon as well outside of this next-gen metro.
But we do see good growth across a wider range of markets in the second half in North America including government, MSOs, Tier 2, the ICP guys.
We actually see a very good second half.
And that's pretty consistent.
Second half is always better than the first half.
Stan, I think it's early days for us on the Blue Planet, obviously.
I would expect, as I said earlier, I think more of the same this year in terms of percentage.
It may tick up a little bit towards the end.
Then I think we start to see some movement in Blue Planet revenues being a contributor to the bottom line.
We haven't given guidance about that, and obviously that's over a year out.
It's still a nascent market and the monetization model of that still has work to be done on it.
Thank you, everybody.
We appreciate your attendance today.
We look forward to speaking with you and meeting with you over the next few weeks.
<UNK> has a few words to (multiple speakers)
Yes, I'd just like to close the call, just to summarize some of the elements that we've talked about today.
Very solid Q1 revenue with a strong bottom line.
We do expect, even at the midpoint of our guidance for the year, to have organic growth faster than last year.
We are increasing our order intake, and our backlog continues to grow, as does our engagement with our customers in our pipeline.
We're growing in every region for the year is our forecast, excepting EMEA.
And overall, we expect to have a very strong financial performance this year.
We appreciate your time and look forward to talking with you.
Thank you.
