Hi, everyone. Good afternoon. Welcome to the Rosenblatt Age of AI Technology conference. This is a fireside chat with VIAVI Solutions. I'm Mike Genovese, the cloud and communications equipment analyst. Super pleased today to be joined by the management team of VIAVI Solutions, Oleg Khaykin and Ilan Daskal, and we also have Vibhuti Nayar from IR on the panel as well, just off-camera right now. We've got the whole team and hi, guys. Great to see you. Hi, Mike. Good to see you again. Yeah. Been a long time. Yep. A whole week. Well, bear with me here because my first questions tend to be a little bit wordy and have a little bit of windup to them. I just want to level set the audience here, because you just reported fourth quarter, as you said, fourth quarter 2026, the June quarter, and you said that data center within your NSE segment, your big segment, was about 50% of the revenues, aerospace and defense about 17%, and telco is the rest. Given that, it looks like to investors that 800G test, transceiver type testing is probably the highest volume lab in production driver, and there's a surge in transceiver production across North America and Asia. What do you view your market share is in 800G and Ethernet testing today? How does that differ between the Western and the Asian transceiver makers? How much tailwind remains in upgrading from 400G to 800G before 800G peaks? Mike, before Oleg addresses the first question. Oh. Just sneaking in the safe harbor. Yeah, for sure. We get in trouble with our GC. So, obviously, we'll be discussing today some forward-looking in nature data and everything is subject to risks and uncertainties, as we all know. And everything that we discuss today is valid for today only, and we undertake no obligation to update these statements. All right. Here. Thank you. Ilan is also our general counsel right now. Yeah. Your question again, in terms of market share monitoring, in test and measurement it's kind of difficult number because there's no third-party sizing of this thing. But I'll go the following. If you take top five transceiver manufacturers in the world, we're working with all of them. The question really becomes to what extent and how deep we are. I would say our level of engagement is very high with probably four out of five. One of the five, they may be doing some internal engineering, so they'll be less. But I would say from number one, number two, and number three, we are very much in all of their labs. So they use our equipment to design it, and then they buy our test equipment to build it out. It is no longer just a, when we talk about production, test, and measurement, our market has been expanding significantly. In the old days, when you did a 400G, just in production, you measure is your laser working, how good is your dispersion, power in, power out, and the kind of badda boom, badda boom, and it is done, right? As you get into 800G, you now worry more about a laser, so you need a more precise, better laser measurement. You are looking at the insertion losses. You are looking at some maybe transceiver tests. You do more. As you go to 1.6T, it is a whole new ballgame. You are getting much more optical, and you have a more extensive test, and now you are actually doing a lot more functional test on the line. So the content for test is actually increasing. Not only there is an intensity of tests, but there is also more equipment that you have to buy to test these things. That is a traditional market. Then there is a whole thing with the fiber, with the hollow-core, multi-core, multi ribbon cables that you plug in, like eight, 16, 32. Before, we never really cared about it. Now, the customers worry about making sure that connector is good, because if one fiber is bad, you throw away the entire connector. These are very expensive connectors. So you are looking for how clean is your surface. You use interferometry on the quality of the surface, because the higher the speeds you are using, any kind of imperfection can impact the quality of service. So we are opening all new markets now in manufacturing for fiber. Now, the last but not the least, that is probably going to be the biggest segment, when we now start talking about CPO, that is a completely different ballgame. We were never in the semiconductor test, but now we are being pulled in right there with the likes of Advantest, Teradyne, and FormFactor in that setup to do the co-packaged optics testing. So, it is no longer just a plain old transceiver test. Yeah. There is a lot of different things to follow up on there. So we will go one at a time. So a transceiver company that I follow on their earnings call said, "Well, we have built our capacity so that we can make 800G and 1.6T transceivers on the same equipment. Really, all we have to do is we have to buy new test equipment for 1.6T," which I think is what you sell, which is a great thing. I also think that while the transceiver price may be as you move from 800G to 1.6T is as much as double, what is the ASP uprise for you moving from 800G to 1.6T? Where are we? How early are we in 1.6T? How much have you seen so far? As you look at the next one, two, three quarters, is there an inflection in 1.6T happening right now? Well, we have been selling 1.6T equipment for now for over a year, mainly to the developers. It is more of a lab, your system vendors, module vendors, silicon vendors. The production, I think started, I would say probably early production, beginning of this year, and it is still, I would say, maybe third inning for 1.6T, second, third inning, depending on who you are talking to. Remember, 1.6T is an interesting thing because as far as the test equipment goes, it is always backward compatible. 1.6T can test 800G and it can test 400G. So with 1.6T, you can test four 400G modules, or two 800G, or 1.6T. So it is very good in terms of economics. The cost per bit is much lower. Now, the cost per box is much higher. So often what they do is now they are going to throw away 800. No, they probably will move them to test 400G and things like that, but they will buy new stuff because the production line stays the same, but now with one high-performance tester, they can service multiple lines at the same time. Got it. The ASP uplift, I think you have said in the past about 50%, that box, that 1.6T box. Generally, you see about 50% price increase, and that is because, very simple, the components are much more expensive. So early on, you always kind of what you say is your cost per gigabit goes down, your cost for the whole box goes up about 50%. It is not different from what you see with wafers. Once TSMC goes from one node to the next node, they do not leave the price per wafer the same. It usually goes up about 1.5x. Now, I think you've said in the past that your market share of testing for optical circuit switches, OCS, is extremely high. Just this last quarter, we had very, very positive guidance on OCS saying this current quarter will be a $100 million quarter. I actually just spoke to Wupen. This is Lumentum, your old- Our cousins? Yeah. Your cousin, yeah. Separated later in life. Not at birth, but separated later in life. Wupen said, "Look, over the next several quarters, it's going to double. It'll be $100+ million this quarter, and then double that the next quarter and double that the next quarter." I assume that you'd be seeing testing related to that. Well, the saying goes, "His mouth to God's ears." The more the merrier. I love these guys, and I hope all of that comes through because clearly it's great news for us. It's not only them, because remember, there's also some hyperscalers who do it directly, and I think it's catching on. People are realizing there's not enough power in the world to power all these data centers. More and more people adopt more optical architecture rather than electrical to do more in optical domain. You could say this from sustainability point of view, that's a much more environmentally friendly approach. I think that's going to be the case then. When you're doing this as very big switches, you always ask yourself, what's the cost of failure that one of those port pairs doesn't work? Well, the cost of failure, your switch is bad. They test everything to the nth degree, making sure that everything leaves the factory, every connection works. That requires significant investment in test infrastructure. That is why we said, as you go into higher speeds and you go to more of these complex products like OCS, our content is actually growing per test versus the traditional simple pluggable transceivers. Just on that market share comment that you made in the past, is it only VIAVI doing testing in this market, or are there others involved? Well, there is some people maybe making in-house equipment, but generally, anybody who is buying merchant equipment, we are the dominant supplier. Is there a way to think about this question? Which is now the OCS market, one company, Coherent, just talked about a $4 billion TAM. Lumentum, I think actually said, "We think it is going to be a $10 billion TAM by 2030." Let us just say it is somewhere in between those numbers. Is there a way to think about it as a percentage of the TAM that would then be the testing opportunity? Well, give me a couple of quarters so I have more than one, couple of data points to tell you the trend because one quarter doesn't make a trend. Generally, I think when you look at the size of the market, depending on the complexity, you'd say 10% of the annual size is what the test and measurement market ought to be. That's a number I've been using, but I've been using that number more for OCS than for CPO that has more complexity. Yes. Then for transceivers, I've been using a lower number. Is that- It's a lower number for transceiver. I'm talking about the higher-end stuff. Yeah. Okay, great. Good. Who knows? Because initially when they start, they test everything. Over time, as the yields get better, they may do sample test or every other port or things like that. Although for 100 Tb switch, I don't think anybody's going to skip any tests. Yeah. Great. Well, before we get into CPO and NPO, I wanted to ask you a question because it seems like in your business, so data center and aerospace and defense, 2/3 of NSE revenues now, more than probably half of the revenues of the whole company, just hitting that to be more than 50%. It's growing very, very fast. Then just people think of, okay, telco is a low growth market. I'm wondering, though, because I keep hearing more and more and bigger numbers and more bullishness about scale-across, and maybe it's a little bit early, but it's just maybe a low billion-dollar market now, but people are talking about scale-across going to tens of billions of dollars within a few years. I'm wondering, could that be a driver of your telco business if you're- No, absolutely. Maybe let's clarify some definitions, right? When we say data center ecosystem, if we're selling to a Tier 2 player like say Lumen or Zayo, who are interconnecting all those data centers, right? We count it as a data center revenue, right? Got it. Because to us, it's who pays for all that equipment. If Verizon sells to data centers, we'll count their revenue as a scale-across. When we say service provider, that's your traditional metro fiber to the home, the wireless carriers, these kind of players, right? Today, that business is growing low single digits, although I'd say wireless is fairly anemic, but the fiber business is doing very well. Cable is actually going to have some really nice pop-up quarters as they go to the DAA architectures. Even that business is actually doing pretty well, but it cannot compare what we've seen with the data center ecosystem. But for us, it's semis module systems, hyperscalers, and the people who interconnect them, right? That's what we say when we say data center ecosystem. Got it. So basically what I'm asking about scale-across, obviously it is big data center operators building these things. Right. That is counted. Then if you're selling to Ciena for that application to a hyperscaler, or Ciena, Nokia, Cisco, that kind of company, that kind of OEM company, you would also include that in data center because it's that app. It counts as a data center. Exactly. Got it. Okay. Helpful. Super helpful. Let's talk about CPO, NPO. Investors were freaking out that, oh, CPO is delayed, but now everybody's reported and all the vendors and everybody said, "No, it's right on track," and the demand is higher than before. CPO is basically NVIDIA, but there's all of these other companies that want to do NPO, and NVIDIA wants to do NPO as well. So, what are you seeing on the timing for NPO, CPO, and when and how that hits your revenues? Sure. Then we'll have follow-up questions on all these insertion points. Why do people want to do CPO? It's much more complex and all that. Why not do NPO? Why not do just pluggable? Well, it's very simple. It's power and performance. In a nutshell, if you really want to get really high level, if I have N- 1 node silica, and I put it into the advanced heterogeneously integrated module with a CPO, I get a performance of the N node. If I have a 3 nm silicon and I use all this clever packaging technology, I get the same performance as a 2 nm without paying the 2 nm mass cost and all the development. It's a huge economic stimulus for me to be able to do it. Yet, if I do have a 2 nm silicon, and I still also do all this other stuff, I get a performance of a 2x, 4x better performance than would otherwise. That's what it is. Cost is not an object because it's all about making the most of your power budget that you have and making the most of your performance that you have. So it's your bandwidth and the thermals that you generate. Also you need fewer lasers if you're using CPO. That's what it's all about. Now, it's a very complex technology, and there's two caps. There are haves and have-nots. There are companies who are far ahead on CPO who've been doing it for years, and you named one of them. Then there are those who've been laggard thinking, "Eh, it'll happen when it happens." The ones who don't have it, they are purporting a lot of it. But I'll tell you one thing, those who are ahead of it, they're going full speed ahead, and they're going to have a performance advantage that the others cannot dream of. For us, I want full disclosure, the more you move towards CPO, the greater our content per port goes up. Pluggable is a power dispersion insertion loss. As you get to CPO, it's multiple insertions, it's a lot of functional tests, much more advanced tests, and fundamentally, you have much tighter customer intimacy. You're working directly with them from the point when they are laying out their silicon and thinking about packaging, to all the way until when they do the deployment in the field. Right. Look, I think you mentioned some of the players that are also doing various parts of test and measurement, and I think in CPO, NPO, it's a larger group of the test and measurement players versus, say, transceiver modules. But the question is, are the insertion opportunities, the numbers of times you test and the complexity of the test Does that actually make your opportunity in a CPO world larger with a smaller share versus transceivers? How do you think about that? Well, I don't know, actually. I think as it gets to point of CPO, we should probably have a higher share because what we have is an integrated platform that is automatable, and we have 2,500 SKUs for any kind of measurement modules you can put in and mix and match to make it. So you're generally going to have an IC tester in the configuration, companies like Advantest or Teradyne. You're going to have a prober, like a FormFactor, and you're going to have an optical rack that has all the instruments, and they're all going to be interconnected, and they're all going to be testing different parts of the equation. That's helpful. That's a good way. It's not a point solution, kind of like you put a little box here or there. It's all got to look very automatable, and it's got to be all integrated. So there are companies that do nothing but integrating all these pieces together at the behest of leading players to provide them with the platform to test their products. Can you kind of walk us through the process of creating the optics, creating the laser, what tests are needed, and then you build an optical engine, and what tests are needed, and then you build an ASIC, and you build a box? Sure. Well, it is all about yield management. In my past life, I ran an OSAT player. Right? And whenever you heard customers say, "I want a system in the package," today they call it heterogeneous integration. You had a cringe because question was, who is going to take the yield loss? The more things you pack into this thing, any one thing goes wrong and this module is bad, question becomes who is liable for the throwaway module? So what you do in these kind of things is you do extensive known good. Start with that. You take a known good die for electronic IC. You take a known good die for photonic integrated circuits, and you test each of them, make sure they are good. Then that is your first insertion. Then you put them together, and you build an optical engine. Okay? Now, typically, electronic IC should not change. Normally, it is gone through many cycles through reflows and all that, so it is going to work just fine. The problem you have with optics, you can change the characteristics of optics. So then now you got to retest that optical engine, make sure it is still good, and you get the first fallout. Then you throw those away, and you only pass through the known good optical engines. Then you take all these optical engines and combine it with a very complex substrate. Right? So you put them all on it, and you connect all the cables, everything, and now you test this whole contraption, make sure that you have a known good interconnect platform. Okay? Only when that thing is good do you put down the ASIC and memory on it because now the price of that module skyrockets. When it is all said and done, you are talking thousands of dollars. Right? Then you test the whole system. So if you do not do all these other things ahead of it and make sure that all the pieces that you are putting together and the final product is good, and you just go ahead and build it, and you put ASIC, you will be throwing away tens of millions of dollars. Right? So that is why it is so critical because optics is more like an analog rather than digital. If you do not handle it right, you will change the characteristic of optical components. Yeah. Makes sense. Okay. Then on the timing of some of the companies that are making lasers and things said things in this quarter's earnings, such as, well, we will see maybe NPO demand one quarter before we see CPO demand. Are you able to see things? Are you seeing that similar kind of thing? Generally, customers make a bet when they order equipment. For example, we have been working on a CPO test now for well over 12 to close to two years. We are now started shipping, I would say even this quarter is early shipments. Generally, the capacity is being facilitized, and it is being put in place. At what point, usually, you put a test capacity ahead of the demand, and then as it gets to about 60%, 70% utilization, you add the next increment of capacity. I think lasers, they are more like quarter-to-quarter forecast driven. Is there anything else on the data center business that you want to highlight before I move on to? Well, I think when we talk about [inaudible] production, that has been the biggest beneficiary of the data center growth. But one big surprise for us was our traditional field instruments. Today, that business is over 40% data center driven, and that is really advanced stuff as fiber monitoring. Because what data center operators have realized is you need to police people who build your network because it is like, to paraphrase Forrest Gump, "Life is like a box of chocolates. You never know what you get." Well, the same thing was true for the, you can use as a quote on your note. If you are a data center hyperscaler, buying a fiber network ended up being like a box of chocolates. Sometimes the fiber worked with buying a lot of dark fiber. You do not use it, but when you turn it on, you find it does not work. They wisened up very quickly and said, "You know what? I am not going to play this game. I am going to get really smart on the whole networking." And they extended, they are putting fiber monitoring on the edge, and they are monitoring all the build-out. They are making sure that every fiber is truly connected and tested and qualified, and they are monitoring it all through, so when they are ready to turn on more capacity, they can pick exactly the fiber that gives them the best performance. So that has driven significant growth for our field instrumentation business because now they really appreciate the whole automation and the workflow automation, workforce automation, and monitoring and collecting all the data so they can predict any kind of outage in their network that may be coming based on the parametrics that they are collecting while they monitor the fiber. Yeah. I think if you ask me who is the state-of-the-art fiber operator today, it would be the hyperscalers. Okay. They know more about fiber optic network than the traditional fiber optic operators. Yeah. You've been doing this testing measurement for a long time now. Yeah. Just a high level kind of view on how seemingly different things are now than the way they used to be. I think back to the old forecasts you used to give, and they were all in the single digits for sustainable growth rate of the company, and it seems to have changed, but I don't know that sustainable part. Well, that is a difference of telecom market, where people do not spend the money they need to spend because network performance is an afterthought. It is kind of, "Eventually, if there is a good quarter, okay, we will throw some money, spend it, do that." It is not the priority. It is like dividends, retiring debt, and buying back stock. It is very much a financial kind of management business, whereas it is like somebody building a bus versus somebody is building a Formula 1 car. Hyperscalers, when they build AI network, it is a Formula 1 car. Everything needs to be perfect. If you are running fiber to the home, "Well, if this goes down, okay, we will switch. There is some inconvenience. Who cares? We will up and running." If you do not get the performance, even though you say you get gig, but you really measure 600 Mb, so what? This is the difference, and because it is not the revenue-generating arm, it is a cost part of the equation for the service provider. Whereas for the hyperscaler, when they are running those AI data centers, it is the revenue-generating. Performance of data center is the revenue. So people will spend always more money to drive revenue than they would to drive cost. If you get what I am talking about. Absolutely. That is why it is. But I tell you, on the positive note, today, wireless is still a huge laggard. People say, "Wow, why do not you shut down this business? Why do not you reduce investment?" Well, very simple reason. Once all those data centers are up and running, and all they are interconnected, and you have this wonderful fiber network, the next thing is going to be inference, and most of the inference will be with a mobile phone. You are going to be accessing, and you need to put inference on the edge. The next big thing somebody is going to address is the sorry state of the wireless network and how it is not ready for the AI connectivity. I think it would be the next area where some serious money is going to be coming into. Do you think that there is a capacity upgrade related to that, like a 5G to 6G or a 5G to a bigger 5G? It's both a capacity and technology upgrade because you need a latency, you need the performance, and you need bandwidth. So you need technology that gives you more bandwidth, technology that gives you better latency responsiveness, and you need to kind of put something on the edge that you don't drive all the traffic through the network to data center and back, something that responds much quicker. So, we are very active participant in the AI RAN, and so is NVIDIA's. You can see who is really thinking forward and who's involved in these standard bodies. I would say that's like two, three years out will be the next big thing. That's why we feel our wireless business will be just as the kind of data centers start saturating, they'll be the next wave of growth, and it'll be a lot of it on the wireless edge. Because you cannot have any of this physical AI unless you have a zero latency connectivity to the network. Yeah. Makes sense. All right. Well, the next part of your business that I want to talk about is a part I feel like we don't have nearly as many details on, and that's probably because it's secret. The aerospace and defense part, that's some very sensitive stuff. Yes. But, we just spent half an hour talking about the drivers of your data center business, and I have a feeling we're probably going to spend one or two minutes on this. But any detail you can provide on the growth rate of that. Is it similar to the data center growth rate? Is it lower? Is it higher? And anything else that, like, what's driving it would be that you can share. I would say it's much higher than the telecom, and it's somewhat lower, but more, I would say, sustainable over long term. Because this business for us is a product business. We win business, we get a design win. Then we have to wait till the platform takes off. When it takes off, it grows very rapidly. So overall, I'd say that business has more than doubled for us in the last two years. We made a conscious point when we thought about getting into aerospace and defense, which we kind of got into by buying this Cobham business. Part of it was mission-critical communication and avionics. We said, "We are not going to compete with these big Tier ones." But the thing we saw about six, seven years ago, the GPS is not all stable. What if you have no access to GPS? We said, "Oh my God, nothing's going to work." So we said, "You know what? Let's invest. When we enter aerospace defense, the whole area we want to focus is called," and it has a name for it, "altGNSS," alternative to the GNSS system, which means it's called resilient PNT, positioning, navigation, and timing. So that takes two things. You need a very precise timing where you don't rely on a GPS satellite for timing, and you need combination of inertial sensors and inertial navigation systems that can provide you direction and navigation. What really made this business take off, is the whole emergence of drones as the new phenomena in the modern military. If I count my design wins and future bookings, it's as fast, if not faster, than AI. What you've always got to do also, this is a very different part of VIAVI, whereas test and measurement is a lot of it kind of book ship business, this one is a design win business. So as we win a lot of designs and they start going into production, that's a business that lasts you for many years, and you build on top of it, another and another. Then there's the next platform, and the next platform. Today it's the drones, it's intelligent munitions, it's everything. It's physical AI. So forget the military. If you go now into any kind of autonomous things like excavator or a bulldozer, you need all of those. You need dozens of these sensors because every element on that machine needs to send the data, what's the position, how is it moving, and how do you control it? We find it to be a very attractive market. Do you use the cesium clock for the timing or something else? Say again. Do you use the cesium clock for timing or it's something else? We use cesium clocks. We use rubidium clocks. We've developed technology that is using things like MEMS clocks that are as good as the cesium clocks. That is a huge game changer there. Great. Just the last piece of business I want to touch on before just some financial questions is the OSP segment, right? Which seems pretty steady, growing, highly profitable. In the past, in the kind of core OSP part, which does ink and holograms for anti-counterfeit. In the past, sometimes we have seen inventory builds or inventory drawdowns. I do not think that is as important anymore. But even if it happened, the data center is growing so fast, the A&D is growing so fast. But OSP, is it a steady growth business? Can it be lumpy? What is going on? Well, the only time we saw a big inventory buildup was during COVID, because every government was afraid to be unable to print money, right? So that gave us about two years of getting all the inventory back into equilibrium. Right now, it is at equilibrium, steady Eddie, low single growth, very solid business. It is doing very well. The consumer electronics, the 3D sensing, actually growing. We are seeing more and more applications emerging, even with a handset. It used to be the face ID, used to be the world-facing. Now we are seeing many other applications. People use them for proximity sensors, autonomous driving, especially in China, is growing. And we are seeing a lot of opportunities popping up in the aerospace and defense as well. Now, these are much longer lead times, and when these programs happen, five, six years out, it could be a nice big pop up in the revenue. But I think, generally that business you could take mid to high single digit year-on-year growth, and it comes in at very nice margins. And we are very selective what business we take because that is business where we have to put bricks and mortar in the ground. We have to buy capital. So we do not take spot market business. We take only the business that we know will have sustainable loading and demand over many years. So it is a very nice business for us, and we continue to develop it further. And there is also a lot of very exciting things we are seeing with things like some of the advanced photonics actually start benefiting from the technologies we have in that business. Great. So if you take the sequential growth recently, clearly in the telecom business, there is seasonality, stronger and weaker quarters. But if we just kind of average the sequential growth of the last few quarters, and we put it ahead to the next couple of quarters, it seems to us that you should be at $500 million in revenue per quarter, pretty far ahead of what you have actually said, which I think is the end of calendar 2027. Yeah. I don't think calendar 2026 is out of the question. Certainly early 2027. I guess my question is there a reason we should think that the growth that you've put up the last couple of quarters shouldn't continue, and you shouldn't continue to be ahead of your targets? Well, I think we're going to see. If you talk about absolute dollars growth, like quarter-on-quarter, I think that's reasonable. People say percentage. Remember, when you go on a higher bigger number, percentages get smaller. But I think because there's so much demand, the seasonality in the service provider gets masked a bit, but still generally, December quarters pop up a bit more. June quarters pop up a bit more. March and September quarter go up a bit less. So I think, look, we're going to be probably not far from $500 million in the December quarter. If demand strengthens up, heck, we may even hit it, but definitely next year, if the demand continues, it will be sooner than the December quarter of next year. If demand really strengthens up, we could get very close within the whisker, even this December quarter. But I think it's a little too early to talk about it. Yeah, Mike, we did mention it in the last earnings call. Three months ago, we thought about it more kind of fiscal 2028. In terms of getting to the $500 million, we mentioned in the last call that we now see it earlier, and coupled with all the operating leverage that we have been working on, I think, the bottom line also will play differently than what we previously thought of it. For us, top line revenue growth is a huge leverage point because you get significant operating leverage at the operating income, then you get further operating leverage on the net income. Because with our virtually zero tax rate on incremental dollars, because most of them fall within the U.S. jurisdiction, and de-levering of the balance sheet, so we have a lower interest payment, that operating margin actually gets juiced up when it gets to the net margins. Yeah. If things hold up as they are and we keep growing and we get through $500 million, Ilan, is 30% operating margin within the model? Yeah. The high 30% is not an unrealistic number to get to when we get to the $500 million. That is not an unrealistic thinking. Yeah. Just to be clear, it was Lumentum who earned all those NOLs, right? By losing money for so many years, then you kept- Well, we get the benefit of all of that. In fact, all of that NOLs that JDS accumulated was all Lumentum businesses. Because they acquired all these companies that they have written down. We kept all the NOLs and all the convertible debt, and they went out debt-free, but also NOL-free. Yeah. Now that we're making very nice profits, it's a huge blessing, especially in the 23%-25% corporate tax rate. Most of those NOLs we converted to amortizable assets, so they last a bit longer and they're more usable than traditional NOLs. Yeah. The balance sheet, really strong balance sheet with the equity offering recently, paying off the term loan. Oleg, you've always been, I'd say, good at M&A, and also super disciplined on price, more than anyone I've ever met before who's super disciplined on the price that you'll pay for an asset, but very strategic about M&A over the years. I guess, what should we be thinking about M&A from here? How important is it to you? Well, we look at it, we walk away from a lot of deals. There was just one deal announced today, I was blown away. The price paid was 2x more than what we were prepared to pay, and we know the market, right? To me, it is like there is always going to be somebody will overpay, and that is usually a sign of the peak market. My view on it is, especially if I buy it with a stock, and if your stock is really highly valued, which I do not think we are quite there yet, that is part of the problem. But if you are buying it with debt, all I remember is when the market adjusts and there is a slowdown, the debt is forever, right? And your future EBITDA is. Everybody has a big hockey stick two years out in EBITDA. It does not always happen. What we do is we go deeper and we look further and we identify. We just bought this company called Digital Optical Research Corp, or for short, DORC. It is a very exotic technology. It is interferometry. It is a very well-established technology. But when we put it into our production test, it will go from couple million to tens of millions of dollars. That is a force multiplier we are looking at. When we bought Inertial Labs, there was no banker. We purely pounced them because we were working with them on their resilient timing, right? This is how you find things, and then you just do a deal with that. My view is, in the end, I have no problem paying somebody premium, but then I need to know what is in it for me. It needs to be good for me right away. When somebody says, "Hey, you got to buy all this, and in two years I am going to deliver this big thing," it reminds me of the old Popeye cartoon where you have this guy, Wimpy, "For a hamburger today, I will gladly pay you on Tuesday." We prefer you pay me today and I will give you hamburger on Tuesday. Anyway. That is we are spending. When you had a lot more revenue, it was exposed to telecom, and it was growing much slower, I think. Because you are number one pretty much everywhere, sometimes number two, mostly number one in your markets, consolidating and using the NOLs and driving synergies, that was a big part of the story. But now you are in these very high growth markets. The best kind of growth. Organic high growth is what you want, where you buy a company and then it just goes like a rocket, no pun intended. That's what ultimately you want. We also had some companies we bought, which we thought were pretty good, ended up to be average. But the big ones that we did, I think Cobham acquisition was a huge success, although now wireless is a bit slow. I think the Spirent deal was a very good one for us on the big ones. But our smaller deals are really the ones who truly have outperformed against all our expectations. It really comes down to, I'd call it bang for the buck that you get in not overpaying for the deals and structuring them the right way. Well, I could talk to you all day, but we're actually out of time. Great. It's great talking to both of you. We are going to be at ECOC conference in Malaga in the end of September in Spain. It's a big European fiber optic, so we'd be more than happy to meet with anybody who stops by our booth. Yeah, I think I have a meeting with you there, and I'm going to bring clients, and this is an advertisement for people to sign up. Yeah, and it's a great opportunity to touch and feel everything we've been talking about, because we'll have it all on display. Perfect. All right. Thank you. Gentlemen, great to see you. Thanks so much for doing this. Great conversation. Thank you. Thanks to the audience for joining us. Have a great night. All right. Thanks, Mike. All right, take care. Bye.