Good day, and thank you for standing by. Welcome to the Ciena announcements reporting date and web broadcast for fiscal fourth quarter and year-end 2021 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you would need to press Star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press Star zero. I would now like to hand the conference over to Gregg Lampf, Vice President of Investor Relations. Please go ahead. Thank you. Good morning and welcome to Ciena's 2021 fiscal fourth quarter and year-end review. On the call today is Gary Smith, President and CEO, and Jim Moylan, CFO. Scott McFeely, our Senior Vice President of Global Products and Services, is also with us for Q&A. In addition to this call and the press release, we have posted to the Investor section of our website an accompanying investor presentation that reflects this discussion as well as certain highlighted items from the quarter and fiscal year. Our comments today speak to our recent performance, our view on current market dynamics and drivers of our business, as well as a discussion of our financial outlook. Today's discussion includes certain adjusted or non-GAAP measures of Ciena's results of operations. A detailed reconciliation of these non-GAAP measures to our GAAP results is included in today's press release. Before turning the call over to Gary, I'll remind you that during this call, we'll be making certain forward-looking statements. Such statements, including our quarterly and annual guidance and long-term financial targets, discussion of market opportunities and strategies, and commentary about the impact of COVID-19 and supply constraints, are based on current expectations, forecasts, and assumptions regarding the company and its markets, which include risks and uncertainties that could cause actual results to differ materially from the statements discussed today. These statements should be viewed in the context of the risk factors detailed in our most recent 10-Q filing and in our upcoming 10-K filing. Our 10-K is required to be filed with the SEC by December 29, and we expect to file by that date. Ciena assumes no obligation to update the information discussed in this conference call, whether as a result of new information, future events, or otherwise. As always, we'll allow for as much Q&A as possible today, but we ask that you limit yourself to one question and one follow-up, please. This call is being recorded and will be available for replay on the Investors page of our website shortly after the call is concluded. With that, I'll turn the call over to Gary. Thanks, Greg, and good morning, everyone. Today, we reported strong fourth quarter and full fiscal year 2021 results. This performance further demonstrates our continued ability to successfully navigate challenging market conditions and to deliver on the objectives and financial outlook we laid out as we entered the year, including annual revenue growth of 2.5%, which was at the high end of our expectations. Fiscal 2021 adjusted gross margin of 48%, which exceeded our forecast. Adjusted operating margin of 16.8% for the full year, also above our original forecast. Revenue in the fourth quarter exceeded $1 billion for the first time and came in higher than expected. Additionally, orders in the quarter were once again significantly higher than revenue. With our third consecutive quarter of orders outpacing revenue, we have substantial momentum and increased confidence in the demand environment. We ended the year with our highest ever backlog of approximately $2.2 billion, nearly double our backlog of a year ago. This performance, I think, reflects our market leadership within a very strong demand environment. Specifically, the combination of our differentiated balance sheet, leading innovation and R&D capabilities, and deep and growing customer relationships around the globe give us a distinct strategic advantage in the industry. Of course, our people continue to amaze us with their resilience and kindness as they continue to perform at the absolutely highest levels. Turning to highlights from the fourth quarter and fiscal year, our focused investments are in three key areas, Optical, Routing and Switching, and software and automation. They are yielding great results. In optical, we continue to lead the market in high capacity coherent technology. Q4 was a record quarter for WaveLogic 5 Extreme. We added 34 new customers, including 13 new logos spanning all regions. Our total customer count for WaveLogic 5E is now 140 globally, and we've shipped nearly 25,000 modems to date. We also shipped our first customer orders in Q4 for our WaveLogic 5 Nano coherent pluggable optics. We had a strong quarter in Routing and Switching, and we continue to build momentum in this space. In Q4, we secured 12 new wins, including significant multiyear deals with two of the largest U.S. tier one service providers, one of which is for a nationwide 5G cell site router deployment. Additionally, we've now closed a deal with AT&T to acquire its Vyatta virtual routing and switching technology, which will help strengthen our Adaptive IP capabilities and increase our exposure to certain 5G use cases. We also announced a partnership with Samsung to couple our xHaul solutions, next gen MCP domain controller and services with Samsung's 5G core and RAN equipment to support global 5G networks. Moving to our software automation business, Blue Planet performed well in FY 2021, growing 23% in the year to deliver annual revenue of $77 million, which again was above the high end of our target range, as well as record bookings for the year. Some of the marquee wins in the year for Blue Planet included British Telecom, Vodafone and Colt, as well as a major U.S. tier one service provider and large U.S. MSO. I also wanna highlight our global services business, which grew 7% year-over-year with revenue growth across each of our service categories, and earning a 95% customer satisfaction rating in 2021. Also as part of that, really advancing a key part of our strategy, we landed major network migration wins, including three U.S. tier one service providers and an international tier one service provider. Shifting to diversification in our business across both customers and regions, our top 10 customers for the year included three U.S. service providers, two international service providers, 1 MSO, and all four major web scalers. Strong illustration of the continued diversity in our business. In fact, our non-telco revenue was 41% of total revenues for the year. Also of note, in FY 2021, we had more than $1 billion in orders from web scale customers. We also performed well once again in the submarine segment, gaining more than 2% market share year-over-year, bringing our SLTE market share to the mid-50s. Finally, international growth was also strong, led by EMEAR and India, which each grew at 13% year-over-year. Overall, sector demand remains very strong, driven by increasing bandwidth need, the shift to the cloud, and also the focus on edge applications, as well as digital transformation and the growing need for network automation. We continue to take full advantage of our leading position to address these network priorities. We're making forward investments in our portfolio and go-to-market resources that are aligned to these trends and longer term opportunities. As an example, we are leveraging our optical expertise to offer a new architectural approach to address next gen metro and edge use cases, where we are investing to expand our total addressable market in this growing market from about $13 billion overall currently to roughly $22 billion over the next several years. I would also like to highlight the development of critical assets in software automation, including network layer automation with MCP. This is our microservices-based domain controller that has now been adopted by the vast majority of our customers around the world. Also, our differentiating software for our Adaptive IP approach, and this can be deployed as embedded in our Routing and Switching portfolio on white boxes or virtually. Finally, our multi-vendor Blue Planet services automation software, which is now deployed at 30 of the largest global carriers around the world to help drive their digital transformation efforts. These software elements are delivering unique innovation into the marketplace and expanding our relationships with customers. Our overall software business currently constitutes less than 10% of our total revenue. We do see this growing over time as we expand both the adoption and applications and move to more recurring and subscription-based models. Of course, the strong sector demand for bandwidth and automation remains challenged by the global supply chain constraints in the current environment. We continue to believe that these supply challenges are likely to persist through at least to the middle of calendar 2022. To be clear, supply conditions are adversely impacting product costs, availability, and lead times, as well as our overall supply chain operations. We expect these variables to affect our gross margin as well as the level and timing of revenue during fiscal 2022, and we've obviously incorporated all of these elements and considerations into our guidance accordingly. However, as you can see from our performance to date, we continue to manage these challenges well, and while we're obviously not immune, we expect to continue to outperform others in this regard going forward. In fact, we've entered fiscal year 2022 with increased confidence and visibility. In a moment, Jim will provide our outlook for FY 2022, which we believe will be a year of outsized revenue growth for Ciena. That is driven by several factors, including,Number one, strong order flow and additional visibility to short-term customer purchasing decisions. Number two, overall a return to historical customer spending levels to address the continued downward demand following about two years of slow investment due to the pandemic. Third, and most uniquely to Ciena, increased monetization of wins, both those that we've secured over the past couple of years as well as new awards. Jim will also provide a new set of long-term targets that we are confident in providing now, given the positive demand environment and strength of our business and overall financial position. Jim. Thanks, Gary. Good morning, everyone. We delivered a solid Q4 performance. Total revenue in the quarter was $1.04 billion, somewhat above our expectations. It is a milestone quarter. It's the first-ever billion-dollar revenue quarter for Ciena, and there will be many more to come. Orders in the quarter significantly exceeded revenue. Q4 adjusted gross margin was 46.3%, which was within our guidance range and reflects the dynamics we highlighted last quarter, primarily the impact of increased supply and logistics costs, as well as increased monetization of new wins. Adjusted operating expense in the quarter was $307 million due to higher variable costs as a direct result of extremely strong order flow at the end of the year. With respect to profitability measures, in Q4 we delivered adjusted operating margin of 16.8%, adjusted net income of $132.7 million, and adjusted EPS of $0.85. In addition, in Q4, our adjusted EBITDA was $199 million, and cash from operations was $255 million. Also in Q4, we repurchased approximately 494,000 shares for $26.7 million, for a total of approximately 1.7 million shares repurchased in fiscal 2021. Regarding our performance for the full fiscal year, annual revenue was $3.62 billion, which was at the high end of our annual guidance range. As Gary mentioned, we ended the year with $2.2 billion in backlog. Adjusted gross margin was very strong for the year at 47.9%. Adjusted OpEx for fiscal 2021 totaled $1.13 billion, largely as we expected. Moving to profitability, adjusted operating margin in fiscal 2021 was 16.8% at the high end of our guidance range, and adjusted EPS was $2.91. Free cash flow for fiscal 2021 was very strong at $462 million or almost 75% of adjusted operating income. Our balance sheet remains a significant competitive differentiator. We ended the year with approximately $1.7 billion in cash and investments. Looking to the full fiscal year, we believe fiscal year 2022 will be a year of outsized growth for our business. We have strong visibility to our near-term opportunities, including a record backlog in the interim year. Customer spending is returning to historical levels following two years of lower investment due to the pandemic and related economic uncertainty. More perhaps, and unique to Ciena in fiscal year 2022, is that we are now monetizing our new wins and seeing increasing numbers of deployments for significant deals that we secured over the past couple of years, as well as some new awards. Accordingly, we expect to grow our revenue in fiscal year 2022 in the range of 11%-13%. With respect to gross margin, we expect the dynamics that we saw in Q4 to continue into the year. Specifically, the impact of ongoing supply chain challenges that are manifesting in significant cost increases and higher logistics fees will continue, and the increased monetization of multiple new wins with initial deployments and rollouts will also affect gross margins. Accordingly, we believe our gross margin for fiscal year 2022 will be in the range of 43%-46%. For operating expense, we intend to continue investing strategically in our business, in particular in our routing, switching, and software automation portfolios to leverage our opportunities in these growing addressable markets. Therefore, we expect adjusted operating expense to average $300 million per quarter in fiscal 2022. As always, this number will vary quarter- to- quarter and is expected to start a bit lower and increase through the year. We expect adjusted operating margin in fiscal 2022 will be in the range of 15%-16%. In addition, during fiscal 2022, we will be making investments in inventory and accounts receivable in order to continue mitigating the impact of the ongoing supply chain challenges. As a result, we expect our free cash flow in fiscal 2022 will be 50%-60% of adjusted operating income. For the coming quarter, Q1 of 2022, we expect to deliver revenue in a range of $870 million-$910 million, adjusted gross margin in the 43%-46% range, and adjusted operating expense of approximately $290 million. As you imagine, strong secular demand is driving solid business trends and greater visibility for us, which puts us in a position to resume providing longer-term financial targets. Three-year targets give the best indication of our long-term view of the industry and what to expect in Ciena for the next three years. Overall, we believe that we are well-positioned to continue delivering a combination of top line growth, profitability, and cash generation. We believe the most important indicators of our performance and progress are revenue and EPS growth. On the top line, we expect to grow low to mid-single digits in line with recent historic agreements, and particularly in 2022, we intend to continue to gain and take market share as we have over the last decade. Beginning in fiscal 2023, we expect to present annual revenue growth rate range of approximately 6%-8%. With respect to adjusted earnings per share, as we return to historically revenue growth rates and continue to focus on driving increased profitability in our business, we expect our EPS to resume growth. Specifically, we expect to grow our adjusted earnings per share in the 10% range annually over the next several years. Also, as part of our long-term outlook, beginning in 2023, we are targeting annual free cash flow generation of approximately 75%-85% of adjusted operating income over the next few years. Finally, with respect to operating margin, we continue to focus on driving leverage from our operating model. In particular, growing our operating expense at a lower rate than expected revenue growth will enable us to increase profitability. As a result, we are targeting to achieve adjusted operating margin of 17%-18% for fiscal 2022. With our strong balance sheet and our expectations for cash generation over the next several years, we are now in a position to increase significantly the return of capital to our shareholders. We previously announced a program to repurchase up to $500 million of our common stock with the goal of completing those purchases by the end of fiscal 2021. We didn't achieve this target, of course, for several reasons. Most importantly, we suspended the repurchase plan for almost a year due to the pandemic and the resulting industry and market dynamics. Today, we announced that our board of directors has authorized a new program to repurchase up to $1 billion of common stock. Under this new authorization, we also announced our intent to enter into a $250 million accelerated share repurchase arrangement or ASR, whereby we will more than make up the unused portion of our previous repurchase authorization. Final settlement for the ASR is expected to be completed in the second quarter of fiscal 2022. Following completion of the ASR, timing of the remaining $750 million repurchases will be based on our stock price, general business and market conditions, our liquidity and cash flow, and other factors. Our intent is to fully utilize the repurchase authorization by the end of fiscal 2022. We expect to finance the program with cash on hand or cash generated from operations. This new share repurchase authorization and the ASR represent the next phase of our cash deployment and demonstrate our commitment to return capital to shareholders while maintaining meaningful liquidity balance. In closing, we delivered very strong fiscal fourth quarter and 2021 results despite challenging supply chain conditions. With continued market leadership in a very strong demand environment as well as significant profitability over the year, we are confident in another strong performance in fiscal 2022, including outsized revenue growth. For the longer term, our differentiated financial position will enable continued investments in innovation to address end-to-end new edge applications through Routing and Switching technologies and digital transformation with our growing software automation portfolio. We are in a strong position to return capital to our shareholders when we intend to do so. Demetrius, we'll now take questions from the sell-side analysts. Before we start the Q&A, we recognize there are some audio quality issues with the webcast. Please note that all of this information is on the earnings presentation, including our guidance, and we'll be happy to clarify anything that you'd like to in Q&A. As a reminder, to ask a question, you would need to press Star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Rod Hall with Goldman Sachs. Yeah. Hi, guys. Thanks for the question. I guess I wanted to dig into this guidance for next year. I mean, it's very strong relative to what we had expected, and I wonder if you could talk a little bit about some of the drivers within that. I know that cell site routing seems like a really big opportunity. I don't know, Gary, if you think that goes beyond this just, you know, this one installation or not. Curious how big hyperscale is in that. So that's kinda the first question is can you know, give us more color on what's driving that growth? I have one follow-up for you as well. Yeah. Rod, thank you. I would describe it as sort of, you know, it's the monetization of new wins that have sort of been on hold for a couple of years, plus the new wins that we're seeing. And, you know, the cell site router opportunity, I think, you know, we've secured in this last quarter, you know, the two large service providers in North America for our Switching and Routing portfolio. I think this is. I view this as just the start, quite frankly. We're very encouraged by the opportunities that we're seeing there. I think, you know, if you step back from those specific things to Ciena, which is really the new business and the portfolio, the new innovations in the portfolio, we're seeing, you know, carriers return to sort of a catch-up on their capacity builds, basically get into more normalized views around the modernization of their network. I think you're also seeing, Rod, a step function increase in overall traffic demand. It's a blend of all of those things. I would also mention, you know, in terms of the order book, some of that is, you know, customers wishing to get security of supply in this environment. It's a blend of all of those dynamics. You know, I think the secular demand for the industry, I think is very positive. I think our own particular position, you know, is unique around the wins that we've had in the last few years, and you're beginning to see that flow through. Okay. Great. My follow-up, Gary, was on the software comment you made. You said it was below 10%. I wonder, is it by saying that, do you mean it's close to 10% or is it quite a bit below? I'm just curious how big that software element is now in the revenue stream. Rod, that's the sort of three elements that I outlined, and I think for last year it's about 8.5% if you put it all together. You know, I highlight that because I think we're focused on growing that in absolute dollar terms and over time as a percentage of our overall revenue. Blue Planet, MCP, and the Adaptive IP. Great. Okay. Thanks a lot. Appreciate it. Your next question comes from the line of Paul Silverstein with Cowen and Company. Jim, can I ask you to just repeat the long-term guidance? I was having trouble hearing you. My apologies. My question is, what gross margin and operating margin have been on a normalized basis? How much of an impact are you getting hit from supply chain? And I assume as your Routing and Switching business grows, that that's gonna have a positive impact on gross margin and operating margin. Anything you can say on that? And what type of growth are you expecting there? And I've got one follow-up to that. Thank you. A lot of questions in there, Paul. Let me try to do- Three. The last one first, which is Routing and Switching. We do believe that Routing and Switching overall will provide accretion to our gross margins as we move through time, and we do expect Routing and Switching to grow as a percent of our revenue. With respect to what our profitability might have been, what I'll tell you is that the last time we gave sort of run rate gross margins was right at the beginning, right before COVID, I believe, and we said that they were centered around 45%. I still believe that to be true and that 45% or so, you know, call it 44%-46%, represents a run rate percentage of new business in our revenue stack. That's what I'd say. You can kind of base on our guidance for the year, which is $43-$46. You can sort of get somewhere close to what we think the effect of the supply chain challenges will be this coming year. I'll just summarize our long-term targets. What we said was we expect the industry will return post-2022 to a, you know, sort of a low- to mid-single-digit growth rate. Not gonna be that different from that in 2022, by the way. But our growth rate, we think, will return to the rate that we've seen historically for a long time, which is 6%-8% range, which will reflect a continued taking of market share. We also said that we expect our adjusted EPS will grow in the 10% range over the next several years. We gave some other metrics, but those are the key ones we believe. I appreciate. If you don't, we can make a presentation for you. I appreciate that. My follow-up, it doesn't appear from the numbers, but I'll ask the question. Are you seeing any impact from ZR in particular as well as open line systems? What type of impact are you seeing? Obviously, it's just at the award stage, but any concerns? Yeah. Paul, Scott, on the ZR piece, you know, I don't think our perspective has changed since the last time we spoke. We really think it's the starting of the event is really 2022, so no, we're not seeing any impact in the short term on that. As you may know in the press release, we shipped our first ZR plugs to the marketplace from a commercial perspective and certainly expect to participate in that market opportunity as it comes to fruition. Open line systems, you know, that's a game that we've been playing for some time, and we've actually benefited from, by the way, some you know technology leadership both on the line system side and on the coherent modem side in whatever consumption model our customers wanna choose is a good thing for us. So no negative impact on open line systems. Scott, just to be clear, when you say no impact from ZR, we all know they're just starting to ship. You're not seeing meaningful awards by whether web- No scale or traditional service providers? No. As I say, I think, the game on that really starts in 2022. Okay. I appreciate it. Thanks, guys. Thanks, Paul. Your next question comes from the line of George Notter with Jefferies LLC. Hi, guys. Thanks very much. Congratulations on the terrific results and guidance. I guess I wanted to ask about, you know, market share opportunities. You know, you certainly are implying that you'll take continued share. I think Huawei obviously is one of the opportunities out there. What are you seeing in terms of, you know, new wins competitively against them? What are you seeing in terms of the opportunity to mine out the installed base? You know, any additional color you could provide would be great. Thanks. Yeah, George, Gary, I mean, I would say, you know, efforts around that have been ongoing for a while. We've seen this dynamic, and really it's around two regions. It's Europe and India. What we have seen, you know, in both of those regions, even during last year, we've seen, you know, an ongoing move to migrate their dependency, you know, these carriers away from Huawei on the optical transport side and in other areas. We're getting more than our fair share of that. You know, the fact that we saw good growth in Europe and India, some of that is absolutely directly attributable to that move, and we think that's, you know, gonna continue over the next 1-3 years. as I said, we're taking, you know, more of our fair share of that, George. The other thing I'd say, George, is that you see market share gains in our revenue numbers. We actually see them quite a bit before that. We see them at the contract awards, we see them in our order book, and all that's been going on in our business over the last couple of years. Particularly, if you look at our backlog at the beginning of this year, it's $2.2 billion. It's, you know, hundreds of millions higher than we've ever seen it. Of course, some of that is visibility of future orders, but it reflects the fact that we have been taking market share, and it's gonna show up in our revenue this year in 2022. Great. Thanks very much. Thanks, George. Your next question comes from the line of Tim Long with Barclays. Thank you. Was hoping we could talk a little bit about the web scale business. You know, it was down a bit sequentially in the quarter. I'm assuming that's kind of lumpiness. So if you can just touch on that as well as the $1 billion in orders is good. That's, you know, for the year, looks like, you know, whatever, 1.2 or so book to bill. It seems others in the web scale world are seeing, you know, doubling plus of orders, so probably more growth. So is there something going on there where maybe there's a little less forward ordering than maybe some of the networking folks are seeing? As a follow-up, if you can just touch on Asia. You know, with India up, Asia still under a little bit of pressure, can you talk about what's going on in the other parts of the Asia theater? Thank you. Yeah. Let me say the web scale first. You know, I would just say in the quarter, just lumpy. I think during the year, you know, I think the supply chain stuff weighed a little bit on revenues into that space, but we certainly, you know, maintained share as expected. You know, I would say the fact that we had all four web scalers for the first time in our top 10 customers, you know, is testament to the position that we have there, and more than $1 billion in orders is a, you know, significant milestone from them. A lot of the, you know, and that features in our backlog as well, so we have good visibility to the year. We expect actually web scale, you know, in the guidance that Jim gave for our overall business, web scale growth in 2022 will probably be above that corporate average, if that's helpful to you. We've got good, very good visibility into that. In terms of other parts of Asia, you know, India, again, I would make the same comment actually about India. I think that will grow faster than our corporate average as well. Other parts of Asia, a little more challenging to us. I think Australia, New Zealand, I think we'll have a very good 2022. We've had a couple of new wins there and new customers for us. Japan continues to be challenging, but we additionally have had a couple of new wins there, one of them with the, you know, the large Tier 1 there. I think over time, our position in Japan over the next probably 18 months or so will improve. Obviously, we're not focused on China. The rest of Asia, I think, has been a bit of a challenge. I think that the pandemic continues to weigh on a lot of those countries. Okay. Thank you. It's also Huawei's, you know, sort of home turf, and they're not under as much pressure there as they are in Europe, for example, and India. That's part of it. Okay. Makes sense. Thank you. Thank you. Your next question comes from the line of Simon Leopold with Raymond James. Thank you very much for taking the question as well. First, I want to understand what actions you may be taking in terms of the prices to your customers, whether you're planning on or have made adjustments. If so, how successful have you been in getting any price increases to stick to pass on the higher input costs? Then I've got a follow-up, please. Yeah. I mean, I think, you know, our perspective is really driven by, you know, a lot of that stuff we just absorb in the normal, you know, bumps and moves of supply chain and the ecosystem. I think there's elements to this which everybody's seeing, you know, the cost environment, we do not think is transitory. There are, you know, I'd split it into two elements. There's all the expedite fees and logistics and the rest of it. Eventually, that will ameliorate. Some of these costs from a chip point of view, we do not see that being transitory. I would say we're actively engaged with our customers on how best to navigate this, you know, from a partnership point of view, and how do we do that in an equitable way. We don't expect any of those dialogues to really impact FY 2022, you know, largely because we've got such a large backlog, you know, already. We are engaged with our customers on that. As a follow-up, I wanna Just to be clear on this, Simon, if we are able to share these costs, it won't affect the current backlog, it will affect orders going forward, just to make that point, too. Thank you for that. On the follow-up, Gary mentioned, you know, web scale growing faster, India, but you didn't mention the cable TV vertical which in the fourth quarter was really strong. We've been observing some spending shifts in that vertical. How are you thinking about your cable TV market in your 2022 guidance? Thank you. We're gonna have a good year with the MSOs, but we had a very, very strong year, particularly with our biggest customer there, which is Comcast. We're gonna have a good year with them. We're just not gonna see the kind of growth rate in that vertical that we're gonna see across our business in 2022. What I would add to that, though, I do think from a specific Blue Planet point of view, we've had, you know, two additional MSO wins for Blue Planet that will begin to roll out into the year. So we've got a pretty good footprint now from Blue Planet, mainly on the inventory side across a number of those large cable companies. Thank you. Thanks, Simon. Your next question comes from the line of Jim Suva with Citigroup. Thank you and good morning. My question is regarding some of the countries like India and Australia. It seems like, you know, during COVID, that they are coming back a little bit later than other parts of the world, just given the timing of when COVID hit those societies. Is it fair to say that your growth outlook in those is not only higher than corporate average, but also kinda multi-year sustainable, as I believe some of those countries kinda put spending and infrastructure on pause during COVID a lot more than others? If you can just kinda talk a little bit about that. Thank you. Yeah. Jim, I think it, you know, does sort of ebb and flow depending on some of the, particularly India. India's gone through a number of challenges, some of which, pre-COVID were industry based. I do believe that they've dug out from that. Obviously, they had this sort of a wave of COVID, which really dampened down demand. We're seeing a very strong set of dynamics in India, and obviously, we have number one market share in India. I think, you know, if I look at it from an RFP and an order point of view, we've actually grown share in India in the last 18 months, even during that period. You know, I think we've said this before that, you know, while deployments may have been very patchy in some of these territories and different countries, the RFP activity, you know, has largely gone on unabated, and which is why we've got, you know, new wins in addition to the stuff that we had prior to the COVID piece. I think, you know, we feel very positive about some of these territories. I would agree, I think this is a multi-year dynamic. Obviously, you know, everybody's supply constrained right now, but if I look over the next 1-3 years, feel very bullish about Australia, New Zealand, India, and longer term, I think our position in Japan as well, but that's gonna take a little more rebuilding. Thank you so much for the details and clarifications. Thank you. Your next question comes from the line of Amit Daryanani with Evercore. Yep. Thanks a lot and congrats on a good printed guide. I have two questions as well. Yeah, the first one may be, when I think of this 11%-14% guide, revenue guide for the fiscal 2022, I think you talked about web scale Asia doing better. I was wondering if you could just touch on what are you seeing in North America and Europe just from a geo basis in the context of the guide for fiscal 2022. I would say that Europe I think will also be probably you know above our average corporate average. Then you get to the question, well, what is not above our corporate average? I guess you end up at that point. And that would be North America. It's mainly you know the law of large numbers, and also we've got such a large market share in North America across the board. But we do expect growth in North America. You know, let me be really clear about that. But I think the dynamics in Europe, and I'd say there's two dynamics in Europe. One is they basically have underfunded their infrastructure for a period of time now. This is way prior to COVID. Then in COVID, obviously it's affected like everybody else. I think Europe, and then you've got the Huawei dynamic there, as well, which you don't really have in North America. There's not much deployed, and what is, has been taken out. I think, you know, we do expect a good year in North America for sure, and I look at the number of wins that we've had that will help drive that. I think Europe will have another strong year in 2022. Perfect. You know, AC, can I just follow- up? I think when you talked about the long-term guide, you kinda said we expect the industry to grow low single digits, and I think that's the same assumption you have for fiscal 2022, if I'm not mistaken. Clearly, I think the implication is your share gains are much more outsized in fiscal 2022 versus what you think happens beyond that. If that's fair, I guess my question is, why do you think the outsized share gains that you have this year are a one-time phenomena versus perhaps something that's more enduring, endurable? I.e., why can't you do double digits- Yeah, no, I would describe it as this. I think you've got a bit of a catch-up. You know, we've had a bit of a backlog of wins that have not deployed or monetized, and I think that's now, you know, beginning to turn into revenue, albeit slower than everybody anticipated because of supply chain. You know, I think it is a bit of a catch-up year, and I think it is somewhat unique to Ciena, 'cause I think the market rate overall is probably gonna be in the single low to single digits for 2022. I expect that to, you know, and it's the further out you get, the more difficult to tell. If you look over the sort of, you know, 2023, 2024, I would expect it to be similar. I would expect us to continue to take share, which is why you get into that sort of 6%-8%. That, you know, if you look at it over the last sort of decade, that kind of number is, that kind of dynamic and structure is what we've seen play out. You know, I don't expect that to be any different. You know, we're also, you know, potentially, as we've said, opening up our TAM and the switching and routing, which, you know, I think will be helpful to reinforce our outsized growth. Thank you. Your next question comes from the line of Samik Chatterjee with JP Morgan. Hi, thanks for taking my question. I guess I wanted to start with Jim. I know you mentioned some headwinds to cash conversion, I think next year, if I heard you right. As you return to a more normal level of growth post-fiscal 2022, I think you'll be generating about $400 million-$500 million of cash. I mean, given the needs for deployment of cash that you have, I don't see any major M&A requirements that you had, unless you're thinking of any. Why shouldn't we be thinking that the share repurchases can be or the cash shareholder returns can be as much as 100% of free cash flow with the strong balance sheet that you highlighted? I have a follow-up, please. Yes. What I'd first say is that we would like to consider good M&A transactions. You can't see it because it's in our offices, but we've been very active in thinking about things. We just have not been able to find something that worked for us. We hope to be able to do that. That's why we're gonna keep a very good and solid cash balance and a strong balance sheet. I would say this, that you're right. We're gonna be generating a lot of cash over the next several years, and if we can't deploy that either in the business or in M&A, then you can probably expect to see more share repurchases. Got it. For my follow-up, just going back again to the long-term guide beyond FY 2022, the 6%-8%, that's roughly largely similar to what you had pre-pandemic for your long-term guide as well. If you can share any thoughts about how similar or dissimilar is that in composition to how you thought about it pre-pandemic? Is there more growth coming out of telcos, or is there maybe less share gain in certain verticals? Just how to think about how similar- I would say broadly from a trend point of view, I would say, international growth would be outsized pretty much as we talked about in 2022. I would expect that to continue. You know, largely a function, we've got such a large market share in North America. It will grow, but it's more difficult to do that in the bigger numbers. I also think that web-scale will be a fantastic opportunity for us over the medium- to long-term and the time we're talking about there. I would expect, you know, a lot of that growth to be from international and from web-scale and further diversification of the customer base. Also, Routing and Switching. That's a great opportunity for us. We've said that our TAM has increased from around $13 billion- $22 billion because of this convergence of optical and IP technology. Now Routing and Switching investments and engagements are gonna increase our revenue over the next several years at a very high rate. Thanks, Samik. Your next question comes from the line of Alex Henderson with Needham. Thank you. Could you just repeat the order of backlogs that you have? Is that primarily a product backlog? $2.2 billion. It is products and services. Some very small portion of that, you know, in the small or low hundreds of millions is services and maintenance that will continue beyond fiscal 2022. The vast bulk of that backlog will be delivered in fiscal 2022. What do you think your normalized backlog would be, you know, if you were in a normal environment, how much of that is outsized backlog? Yeah. Scott ought to address this, but we've talked about that internally. The business really because of the COVID situation and what quickly followed, which was a supply chain imbalance, the way the ordering pattern of our customers occurs has changed. Scott, you ought to address that as we've talked about. Yeah, I think, Alex, if you look at a couple of data points, number one is, you know, the backlog grew from beginning of 2021 to the end of 2021 by $1 billion. The environment going into 2021 was I wouldn't say was normal either, so that might have been a bit low. And going into 2022 is probably a bit high. So somewhere in between there is the normalized rate. If you go back in historical numbers through pretty much the last decade, we sort of measured the year typically somewhere between 30%-35% of the annual revenue plan for the year in backlog. So that may give you some indication of, you know, what sort of normal state is. I personally think we'll be living in this new environment where we have, you know, longer visibility, and therefore more backlog for quite a while, probably through all of 2022. Yeah. The primary reason I'm asking these questions is I wanted to get at the mechanics of how the backlog normalizes. Over the course of CY 2022, FY 2022, will we see a book to bill start to run, you know, below 1 and therefore the backlog start to trend lower? Or do you expect in your guidance that the backlog stays at elevated levels, and we don't bring that down? I mean, if I'm looking at the backlog, it's 61% of your total, you know, trailing revenues and 75% of product revenues, so it's a very large backlog. What's the mechanics for normalizing that? Does it happen all in 2022, or do we actually end up with a large chunk of that backlog being realized in 2023, which case the guide seems conservative for 2023? I actually think the, you know, one of the things that we probably need is to change our mind around a little bit is sort of looking at, you know, a short-term period and trying to figure out how much revenue moves from one to the other. Because in the old world, you know, we used to go through a period, and a relatively low proportion of that period's revenue was actually in backlog and, you know, we had pretty fast conversion cycles. It made sense to ask the question of, you know, how much did you miss? Right now, we're in a different world. The demand profile has, you know, given us long visibility. It's a very significant portion of sort of the delivered revenue in a short period of time, and therefore you're less dependent on new order flow. I think we're gonna be living in that world for most, if not all, of 2022. You know what it does mean is, unlike in 2021 where we said the demand dynamic was really what was shaping the timing of our revenue being back-end loaded, it's going to be not the demand in this case. It's gonna be similar shape to 2021, but it's gonna be the supply environment that's gonna be the thing that's shaping it. You could naturally expect then with the revenue increasing as we go through the year, there's gonna be a convergence to the on the book to rev ratios that was the question you asked. Whether it flips to being less than one, we don't know. I think you'll still see an oversized backlog relative to historical measures going into 2023. Are you assuming a reduction in the book-to-bill, because of the parts elements? You know, becoming more available over the course of the year, and when do you expect that to actually start to improve in the guide is what I'm really trying to get at. Thanks. Yeah, I would say it this way, 'cause I don't think it's difficult to give you a precision in terms of the quarters, but I would say this: We do expect our book- to- bill in the year to be still greater than one on an annual basis. We do expect the supply chain environment to largely persist through most of our fiscal 2022. We think we will start to see some improvements in lead times as we get to the back end of the year. You know, that will probably change the ratios on the backlogs to revenue in 2023, but not back to sort of the historical norms. Thanks, Alex. Your next question comes from the line of Meta Marshall with Morgan Stanley. Great. A couple questions for me, maybe just a little bit more market-focused. You know, clearly you're seeing a strong web scale order flow. Just what are you seeing in terms of that upgrade activity? You know, is it wholesale upgrades to WaveLogic 5, like we maybe saw with the 400 gig cycle? Are you seeing more of a mix of speeds being installed kind of in the data center? Then maybe a little less of a question for fiscal 2022, but you know, you talked about there needing to be kind of a partnership with the service providers as you look towards making price increases. Just trying to get a sense of, you know, when you look at low to mid-single digits in 2023 and beyond kind of for the industry, do you think that will be more pricing driven or unit driven, just in terms of how much of the price increases will be absorbed versus absorbed by the suppliers versus the service providers? Thanks. I'll try the first one on the web scale piece. As you know, we've got exposure to the web scale in multiple sort of parts of their infrastructure, their campus metro, data center connect. In some cases, their sort of national backbone networks, and certainly a lot of activity around the submarine networks. I think in all three of those use cases, what you're seeing is certainly capacity augments. Those capacity augments hit us in typically you know, the most advanced state of the shelf technology as they try to introduce you know, the lowest cost per bit as aggressive as they can. They're not all on WaveLogic 5 yet, but you know, that transition is happening as we speak. The second thing that we are seeing is expansions in terms of their reach. That comes at us in terms of new route builds, you know, both in terms of photonics and WaveLogic modems. You know, maybe a bit unique to us and the timing-wise is we had talked in the past around new logo wins in that space that were significant, and you're starting to see those come to revenue. Meta, on the other part of your question on the industry growth, whatever happens on the pricing environment, I don't think that'll have a major impact on the actual size of the growth, to be honest. Because I think, you know, wherever the pricing dynamics end up, I think certainly from our point of view is that we will absorb the vast majority of the additional costs associated with the component piece. You know, I just want to be clear, I do not think that'll be able to be passed on to our customers. That's all encompassed in our guide. I don't think it'll really impact 2022 from a price increase point of view. What I would say is over time, you know, similarly to our gross margin, if you look at the guidance we've given for the sort of three-year piece, you know, I do think that we will be able through innovation, our own cost reductions, our vertical integration and mix, and also our increased levels of software exposure to the growth in Routing and Switching, that will help our gross margin. As Jim said, it's probably, you know, if you look at, you know, the baseline gross margin, we're somewhere between 44% and 46% right now, if you didn't take into account these component increases. Great. That's very helpful. Appreciate it. Thank you, Meta. Thank you very much. Thanks, everyone, for your time today, your attention. We look forward to catching up with everybody today in the next few days. Happy holidays, everyone, and a happy, healthy new year. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.