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4A0-C01 Nokia NRS II Composite Exam

Exam Name: Nokia NRS II Composite Exam
Exam Number: 4A0-C01
Credit Towards Certifications: Nokia Network Routing Specialist II
Nokia Service Routing Architect
Mandatory exam Prerequisites: N/A
Exam Duration: 120 minutes
Exam Appointment Duration: 165 minutes. This is the exam duration plus a 45 minute tutorial on computer-based examinations.
Number of Questions: 70
Language: English

- Demonstrate a basic overall understanding of link state protocols
- Express a basic overall understanding of IP routing design
- Describe the various routing protocol databases (routing, forwarding and link state)
- Demonstrate an understanding of route redistribution and route filter policies
- Understand static and default routes
- Explain the basic operations of OSPF and implementation and operability of OSPF in a network
- Understand OSPF in basic and complex network topologies
- Understand OSPFv3
- Understand single and multi area networks in OSPFv3
- Explain the basic operations of IS-IS, and implementation and operability of IS-IS in a network
- Understand IS-IS for IPv6
- Define the differences between IS-IS and OSPF
- Understand OSPF operations and OSPF routing issues
- Understand networking utilizing a combination of OSPF and IS-IS
- Understand IPv6 basics and IPv6 addressing
- Explain the basic concepts of MPLS technology such as forwarding equivalence classes (FECs), labels and label stacks, label distribution, LSPs and MPLS packet forwarding
- Describe the MPLS header structure and explain the label operations of pop, push and swap
- List the characteristics of different label distribution protocols and compare them
- Explain how LDP works to distribute labels for FECs and establish LSPs
- Describe traffic engineering and its advantage in an MPLS network.
- Identify the traffic engineering extensions made to the IGP routing protocols and understand how they are used with CSPF to establish traffic engineered LSPs
- Demonstrate how RSVP-TE is used to establish traffic engineered LSPs using RSVP signaling messages to distribute labels, specify constraints for the LSP and request LSP protection mechanisms
- Describe the concept of a shared risk link group (SRLG) and its use in traffic engineering
- State the purpose of using LDP over RSVP tunnels to provide traffic engineering in a hierarchical network
- Configure an MPLS-based core network using LDP, RSVP-TE, and LDP over RSVP
- List the various LSP protection mechanisms (Secondary/ Standby LSP, fast reroutes)
- Describe MPLS for IP routing (MPLS shortcuts)
- Configure 6PE on a network of 7750 SRs
- Configure RSVP-TE LSPs using each of the possible protection mechanisms
- Understand how to manage, monitor and perform basic troubleshooting of LDP-established LSPs on the Nokia 7750 Service Router (SR) and Nokia 7450 Ethernet Service Switch (ESS)
- Understand how to manage, monitor and perform basic troubleshooting of RSVP-TE-established LSPs on the Nokia 7750 SR and Nokia 7450 ESS
- Demonstrate a basic overall understanding of Nokia services
- Differentiate between service access point (SAP) and network ports
- Provide an explanation for a service delivery point (SDP) and differentiate between mesh and spoke SDPs
- Differentiate between transport tunnels and service tunnels
- Correctly analyze the implications of maximum transmission unit (MTU) size
- Use the correct operations, administration and maintenance (OAM) tools to analyze a configured system
- Correctly define the terms related to VPWS services such as Epipe, Apipe, Fpipe, and Ipipe
- Correctly configure an Epipe service
- Manage Epipe services given an existing infrastructure including modifying, deleting, disabling, re-enabling, and creating these services
- Explain the issues related to VPWS interworking
- Describe the purpose and operation of a VPLS service
- Explain the different types of SAP encapsulations and describe their behavior
- Correctly configure a VPLS service
- Define and configure an Internet enhanced service (IES)
- Configure an IES spoke termination to a VPLS service
- Identify reasons to use mirror services and differentiate between local and distributed mirror services
- Configure and verify the operation of a remote mirror service
- Identify the protocols and technologies required to implement VPRN service
- Explain the interaction between the control and data plane of a VPRN service
- Configure, verify, and troubleshoot an IPv4 and IPv6 VPRN service

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Extreme Networks (EXTR 1.46%)
Q4 2022 Earnings Call
Jul 27, 2022, 8:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good day, and thank you for standing by. Welcome to the Extreme Networks fourth quarter fiscal year 2022 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and-answer session.

[Operator instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Stan Kovler, vice president, investor relations and corporate strategy. Please go ahead.

Stan Kovler -- Vice President, Investor Relations and Corporate Strategy

Thank you, Catherine. Welcome to the Extreme Networks fourth fiscal quarter and year-end 2022 earnings conference call. I'm Stan Kovler, vice president of corporate strategy and investor relations. With me today are Extreme Networks' president and CEO, Ed Meyercord; and CFO, Remi Thomas.

We just distributed a press release and filed an 8-K detailing Extreme Networks' financial results for the quarter. For your convenience, a copy of the press release, which includes our GAAP to non-GAAP reconciliations, is available in the Investor Relations section of our website at extremenetworks.com. I would like to remind you that during today's call, our discussion may include forward-looking statements about Extreme's future business, financial, and operational results, growth expectations, and strategies. We caution you not to put undue reliance on these forward-looking statements, as they involve risks and uncertainties that can cause genuine results to differ materially from those anticipated by these statements, as described in our risk factors in our 10-K report for the period ending June 30, 2021, filed with the SEC.

Any forward-looking statements made on this call reflect our analysis as of today, and we have no plans or duty to update them, except as required by law. Now I will turn the call over to Extreme's president and CEO, Ed Meyercord.

Ed Meyercord -- President and Chief Executive Officer

Thank you, Stan, and thank you all for joining us this morning. We have a strong quarter and year, and I'm pleased with the progress our teams are making. Our results for fiscal '22 highlight unprecedented demand for Extreme's solutions and a very vibrant and healthy market for networking. We reported record bookings growth of 24%, which is a clear indication that we're taking share and winning in the market.

And our forward-looking funnel for fiscal '23 is up double digits year over year. This is a leading indicator of future bookings growth. The differentiation of our fabric and cloud solutions for enterprise customers and our targeted solutions for very large service provider customers, combined with the high performance of our global sales and channel teams gives us the confidence in our outlook for continued growth and demand. Our technology solutions are critical to infrastructure initiatives underpinning digital transformation for all of our customers around the world.

We believe these important projects will continue to remain a priority, irrespective of a changing macroeconomic environment. For the year, our double-digit revenue growth led to an all-time high revenue of $1.1 billion, yet it was understated by the $400 million of incremental backlog we built during the year. Our total Q4 ending backlog was $513 million, thanks to the current supply chain environment. Despite margin pressures, we were also pleased to generate a record $60 million of free cash flow during the quarter, bringing our net debt-to-EBITDA below one.

The continued improvement in our operating model allowed us to achieve record non-GAAP EPS of $0.70 per share for the year, up 35% year over year. We expect these bottom-line earnings growth trends to continue. A record 208 customers spent more than $1 million with Extreme during fiscal '22, up 28% from a year ago. We attribute this success to our strategy of leveraging channel partners as a vehicle for growth in the enterprise market, while focusing our direct sellers on larger projects.

Our sales productivity is at an all-time high as a result, and we have more teams over quota than any time in our history. There's never been a better time to be at Extreme, as demonstrated by our sellers in the field. In addition, our competitive position in the industry has never been stronger. Small share gains have a large impact on Extreme from both the financial and industry recognition perspective.

Our distributors, channel partners and our customers are taking notice of the industry accolades we're receiving for our solutions and service. For the first time, we eclipsed the largest industry player in the Gartner Magic Quadrant, where we are an established leader for 4 years. And for the fifth year in a row, Extreme was named Gartner's choice for wired and wireless LAN access infrastructure. This recognition carries weight with our target enterprise customers.

Our differentiated cloud-based solutions drove subscription bookings growth of 58%, and we achieved annualized cloud SaaS bookings of $170 million exiting Q4. Demand for our innovative SaaS solutions is also driving demand for our products, and we believe the level of organic subscription growth we are seeing today is sustainable. Our ARR reached $103 million in Q4, up 47% year over year and 8% quarter over quarter. We continue to build on our vision of the Infinite Enterprise with the launch of Extreme Cloud SD-WAN solutions, extending our cloud edge services across wide area networks.

These solutions, along with our AI Ops development around digital twin and CoPilot will provide the next wave of growth in our subscription business and support our long-term subscription revenue outlook of 35% to 45%. We received tremendous feedback from our annual Connect user conference that we held live for the first time in several years. Associated content sessions were viewed more than 4,000 times over 1.5 days. We also showcased our ecosystem of over 100-plus technology integrations and partnerships on display at the event.

Next week, we're oversubscribed for our sales kickoff event for our direct sellers and channel partners, where we expect over 1,000 live up in Boston. We exceeded our stated goal of generating an incremental $20 million in fiscal '22 sales of our 5G solutions to service providers. We're starting to experience pull-through business, thanks to a significant ramp in next-generation global telco network deployments. And we're working on expanded use cases with our OEM partner for additional cloud-native solutions, where we are the preferred vendor.

Today, our teams are more confident in navigating the challenging supply chain environment, thanks to a combination of strategic relationships, new processes and more consistency with secondary and tertiary component suppliers, and success in the broker market for components. In addition, our teams have been successful in reengineering products to Excellerate lead times for customers. This allowed us to release nearly $20 million of backlog during the quarter. These efforts were enabled by a number of our cross-functional teams working with key OEMs and suppliers.

We were able to create new product SKUs and certify them in record time. Our customers recognize this agility, and it's creating new business opportunities for us. As we noted during our Investor Day in May, we expect to continue to build backlog for the next several quarters, given our outlook for continued bookings growth and the gradual recovery in supply chain. For the guidance we provided, we expect sequential improvements in our ability to deliver product to customers throughout fiscal '23.

Based on the lead times and commitments, we expect backlog will begin to shrink by Q4 of fiscal '23. We have complete visibility into our product backlog and have received negligible cancellations to date of less than 1% of bookings. Our backlog primarily consists of our latest-generation universal products. So, when we begin to ship product, we will also see an improvement in subscription and services bookings that are attached to our wired and wireless products.

At Extreme, we're focused on finding new ways to enable better outcomes for our customers. This quarter, Extreme helped [inaudible], an Italian grocer with over 100 locations and over $2 billion in annual turnover, bring next generation retail experiences to its customers through our Extreme Cloud SD-WAN solution, lowering costs, simplifying management, and providing ease of deployment. At North Carolina A&T, the nation's largest HBCU, serving more than 13,000 students, Extreme Fabric solutions are being used to expand the campus network and Excellerate the digital learning experience for students, while enhancing security. The rearchitected environment was created with the help of our award-winning services team.

This quarter, we booked the largest network infrastructure as a service deal in Extreme's history with the U.S. federal customer, 10 million campus switching deal over five years. We leveraged our Capital Solutions group to deliver the new opex-based consumption model for this federal customer. Again, our ability to be flexible with our enterprise customers is an important differentiator for us.

In Q4, we continued to expand our universal portfolio with the introduction of the 5720 Universal Switch, designed to support data-heavy applications, such as Wi-Fi 6E. We also continue to innovate on best-in-class Wi-Fi 6E and ultrawideband APs. Extreme's first-to-market move in Wi-Fi 6E is leading us to win in the market transition. Adoption of 6E wireless will also drive multi-gig switching demand in the future.

We nearly doubled our Wi-Fi 6E revenue during the quarter sequentially, as we've improved our ability to deliver access points to customers. 6E is now over 25% of our wireless AP revenue. Net-net, I'm incredibly excited to see our team execute at such a high level across the organization from our product team delivering incredible innovation, to our sales and marketing teams driving demand, our supply chain and ops teams delivering products in a challenging environment, and the cross-functional support from all the other organizations of putting Extreme in a position for unprecedented growth in top line, cash flow, and earnings in future quarters and years to come. With that, I'll turn the call over to our CFO, Remi Thomas.

Remi Thomas -- Chief Financial Officer

Thanks, Ed. As Ed described, we had solid execution in fiscal '22 with record bookings and backlog generation, doubledigit revenue growth, and overall improving margins, in spite of the supply chain environment. Strong demand for our portfolio of products, services, and subscription drove year over year bookings growth of 24% in fiscal '22 and 8% in Q4. With a product book-to-bill ratio of 1.29 for the year and 1.23 for the quarter, we exited the year with $513 million in backlog, up more than $400 million year over year and close to $90 million sequentially.

That's nearly three full quarters of product revenue. We achieved double-digit revenue growth for the year to surpass the $1 billion mark. Our fourth quarter revenue of $278.2 million came in -- came above the high end of our expectations entering the quarter, reflecting the ability of our supply team to either source small components or qualify alternative ones. We grew our SaaS subscription bookings by 58% in fiscal '22 and 51% in Q4.

We're making a change to how we report our SaaS ARR. We're now basing it on an annualized view of our quarterly subscription revenue, as opposed to the annualized contract value. Historical data can be found on Page 15 of the Q4 earnings deck, posted on our website. Based on this methodology, our ARR reached $103 million in Q4, up 47% year over year and 8% quarter over quarter.

SaaS deferred revenue was $157 million at the end of Q4, up 40% year over year and 10% quarter over quarter. For the year, we achieved record EPS of $0.77, up from $0.57 a year ago. Q4 non-GAAP earnings per share was $0.15, in line with our expectations entering the quarter. On a geographic basis, and looking at revenue, our top-performing region was EMEA, which delivered revenue growth of 23% for the year and 10% for Q4.

The Americas grew 3% for the year, but declined in Q4, impacted by fewer stadium deployments this quarter. Finally, although APAC revenue declined slightly for the year, it enjoyed a very strong recovery of 48% in Q4, resulting from improved execution across the board. From a vertical standpoint, and this time looking at total company bookings, the highest year-over-year growth in fiscal '22 came from sports and entertainment, followed by government and healthcare. For Q4 specifically, the highest growth came from government, followed by healthcare and service provider.

From a product category standpoint, our wired product bookings grew 28% for the year but were down slightly in Q4, due to a very demanding comparison in the campus segment, while [inaudible] product bookings grew 25% for the year and maintain a healthy growth rate of 6% in Q4. Total wired revenue grew at a high single-digit rate for the year, but declined in Q4 due to supply chain constraints. Our wireless revenue, on the other hand, grew at a double-digit rate for the year and in the mid-20s for Q4, as we were able to release a meaningful part of our backlog. Services and subscription revenue of $91.1 million in Q4 was up 11% year over year, taking the total for the year to $350.6 million, up 13%.

This growth was largely driven by the strength of cloud subscriptions, for which revenue grew 34% in Q4 and 37% for the year. Total Q4 recurring revenue, including maintenance, managed services and subscription, rose to $87.3 million, or 31% of total company revenue, up from 28% last quarter. For the full year, our recurring revenue was 30% of total. The growth of cloud subscription and service renewals drove the total deferred revenue sitting on our balance sheet to $402 million, up 16% from the year-ago quarter and 8% sequentially.

Our non-GAAP gross margin came in at 57%, down one percentage point sequentially and 3.5 percentage points year over year, driven by lower product gross margin. In addition to high expedite fees and freight costs, our product gross margin was impacted by an unfavorable mix. For the full year, total company gross margin would have been at least 600 basis points higher, if not for these elevated expedite fees and freight costs. On the other hand, services and subscription non-GAAP gross margin improved to 70.7% in Q4, up from 64% in the year-ago quarter and 65.1% sequentially, driven by a higher mix of subscription and maintenance and lower professional services revenue based on the timing of certain high-touch stadium deployments.

Q4 non-GAAP operating expenses were $132 million, up from $131 million in the year-ago quarter and from $130 million in Q3, reflecting lower R&D expenses, but higher sales and marketing expenses. opex as a percentage of revenue was 47.3%. For the full year, operating expenses dropped to 46.1% of revenue, at the lower end of the long-term range of 46% to 49% we had provided at our Analyst Day in early 2021. All in all, our operating margin was 9.6% for the quarter and 12.2% for fiscal '22, the highest on record.

Net debt was reduced by $35 million sequentially to $114 million as a result of a record operating cash flow of $16 million this quarter. This was driven by strong collections as well as an acceleration in the pace of tariff duty drawbacks. During Q4, we repurchased a total of 2.05 million shares of our common stock for $20 million, with an average price of $9.74 per share. For the full year, we repurchased $45 million worth of stock.

We currently have $200 million remaining in our new buyback authorization as of July 1. Now, turning to guidance, for Q1, we expect revenue to be in the range of $279 million to $289 million. Q1 non-GAAP gross margin is anticipated to be in the range of 57% to 59%. Q1 non-GAAP operating expenses are expected to be in the range of $130.7 million to $134.2 million.

Q1 non-GAAP earnings are anticipated to be in the range of $19.9 million to $26.5 million, or $0.15 to $0.20 per diluted share. We anticipate that the reduction in expedites and shipping fees, combined with the full impact of our accurate pricing actions, will lead to a progressive recovery in gross margin throughout fiscal year '23, with Q4 expected to be above 60%. For the year, we expect 10% to 15% revenue growth, with an operating margin in the 10% to 15% range. With that, I will now turn it over to the operator to begin the question-and-answer session.

Questions & Answers:


[Operator instructions] Our first question comes from Alex Henderson with Needham & Company. Your line is open.

Alex Henderson -- Needham and Company -- Analyst

Thank you very much. Great job, guys, in a tough environment. Wanted to get a better handle on the bookings in 4Q and the outlook commentary going into the first half of fiscal '23. It sounds like, clearly, you expect to stay supply constrained true most of the fiscal year.

But do you see any improvement in supply in your expectations in the first half of the year? And then second, what's going on in that pipeline as you're looking at that first half outlook. And particularly, if you look at the bookings numbers in the fourth quarter, how did that play on geography, and how do you think that looks going into the upcoming quarter, particularly in EMEA. Thanks.

Ed Meyercord -- President and Chief Executive Officer

Remi, why don't you let me jump in, and then you can fill in. And so, Alex, you're rightfully pointing out kind of this -- how we're looking at bookings, which is really our measure of true demand, and then versus revenue, and our revenue outlook is really a function of supply chain and product that we are able to release, given the massive backlog that we've built up and the continued strength of bookings. So, I'll just start off with supply chain. You've asked about that.

What we see is a gradual improvement throughout the year. So, think of a step function where we will be stepping our revenue, quarter by quarter, throughout the year, based on our outlook of supply chain. And we do have more confidence, as we've mentioned before, strong relationships with the likes of Broadcom, where we are not constrained. It's more about secondary, tertiary component vendors, where we've established direct relationships, normal processes, and have consistency now in our expectations around delivery, and then some of the creative things that our teams are doing around reengineering, et cetera, and then more products showing up in the spot market.

So, our teams, as I mentioned in my comments, are more confident today than they have been in our ability to step function our supply of product to our customers' partners. So, what does that mean? That is how we built the revenue forecast for fiscal '23, which is that step function, with sharper improvement in the second half of the fiscal. As it relates to demand, our demand has been strong, as we talked about it for the year, 24% for us. That's record-breaking performance.

However, the seasonality for bookings is very different. In an environment where people know that there are long lead times when there are pricing actions like there were last year, in response to increased expenses, we had a couple of price raises. And in that case, people wanted to get ahead, so we saw extraordinary bookings growth at the very end of the September quarter last year, and of the March quarter as far as bookings. So, there was a lot of pull-ins from the other periods.

So, normally, you would see the peak in June and then slow down in September, peak in December, and then slow down in March. In this case, what you saw was an explosion in September last year, a slowdown from that level in December, an explosion in March, and then a slight slowdown. In terms of our internal plans, we hit our internal target, which is why we continue to grow bookings. But relative to where we were in the March quarter with the pricing action, it was different.

As we look out at the first half of fiscal '23, we see bookings growth continue, and that is a function of several factors. First of all, we rely on our teams and our bottoms up roll-up from direct sellers in the field rolling up geographically. There's a lot of confidence from our field teams in the numbers that they're actually calling, I'd say stronger than in years past. The second thing, we look at that funnel, and we run our own metrics and look at the commit levels and the confidence levels with our algorithms and our formulas there.

And they're up. As we mentioned, if you look at our funnel year over year, we are up over double digits in terms of the opportunities. And over the course of last year, with competitiveness at Extreme, our conversion rates on that funnel have improved, so we're more confident about the quality of the funnel and our ability to win, and we still see growth there. Finally, we have an AI tool [inaudible] the number based on all the CRM activity and looking at the opportunities.

That's up, and now our partners, channel partners and our distributors, they have an outlook and a view, and they're calling a number. So, when we look at all those different data points, it points to increase in demand. What I would tell you is that for the first quarter, we definitely expect to be over a book-to-bill of one and that the normal seasonal trends in bookings and comparisons will likely be different because of the pricing actions.

Alex Henderson -- Needham and Company -- Analyst


Ed Meyercord -- President and Chief Executive Officer

Remi, do you want to comment?

Remi Thomas -- Chief Financial Officer

No, I think you gave a very detailed view of...

Ed Meyercord -- President and Chief Executive Officer

Alex, as it relates to EMEA, we continue to see strength, so we're not seeing -- I know that this is something that you're paying close attention to and you're concerned about. We can't provide that data point for you. We're just -- we're not seeing it. We continue to see strength.

And the question is whether or not that's because we're taking market share, I guess a macro, or if our data point is a valid macro data point.

Alex Henderson -- Needham and Company -- Analyst

It's a good result for you either way. Thanks so much for the detail.


Thank you. One moment. Our next question comes from Mike Genovese with Rosenblatt Securities. Your line is open.

Mike Genovese -- Rosenblatt Securities -- Analyst

Hey, thanks very much. Good to be on the call. I guess a little bit of asking that part of the last question in a slightly different way. I think you said that by the fourth quarter of the fiscal year, you think book-to-bill will be below one.

And I guess my question there, is that more of a function of less confidence in demand when you look that far out, or more confidence in the supply chain allowing you to eat into the backlog and report extraordinary revenue growth in the back half of the year?

Ed Meyercord -- President and Chief Executive Officer

Hi. Yes, Hi, Mike. It's a good question, and it's all supply chain. So, as I mentioned, we continue to see strength in demand going out for the year, and growth.

But on the supply chain side, where we are most constrained, and we talked about our components, and these are Tier 2, Tier 3 components where we need every component to make a switch or to make an access point. And without it, we can't ship -- we can't produce and we can't ship. So, some of our suppliers have fabs that are coming online in the first part of the calendar year. And the fact of the matter is, we have a schedule, we have visibility to how our components will come online, and then we'll see a greater supply of the components.

They're the ones that are holding us up. So –

Mike Genovese -- Rosenblatt Securities -- Analyst

I guess, because I'm using this, I just need some clarification between definitions when we're talking about fiscal years versus calendar years. So, when you're talking about improvement in every quarter of '23, is that a fiscal year comment or a calendar year comment? And can you talk about any kind of green shoots, color on green shoots that you may be seeing or not seeing in the genuine calendar second half of '22?

Ed Meyercord -- President and Chief Executive Officer

Yes. I think our comments for the fiscal apply to calendar. I think the calendar -- our view of the calendar '23 is, the second half of calendar '23, you'll see even a greater inflow of products if we start taking down backlog. I mean, [inaudible] what we've been talking about is just releveling our revenue to real demand, which is -- resetting this book-to-bill.

And on top of it, we're talking about building backlog, where we'll have hundreds and hundreds of millions of backlogs to release. And so that is -- again, that will continue, and that will only gain velocity in the second half of the calendar. [inaudible].

Mike Genovese -- Rosenblatt Securities -- Analyst

Sorry to -- I don't know if I'm already being a dead horse, but can you deliver us any -- if we think about fiscal 2Q, the December quarter, gross margin, I mean, I know you don't normally guide two quarters out, but do you have any color on how we should think about the supply chain versus pricing versus other factors for the sequential gross margin into December?

Remi Thomas -- Chief Financial Officer

Based on our view expedite fees, freight costs that are starting to come down as more capacity is being built between Taiwan and Shanghai, in our [inaudible] where we have our main hub, we feel confident that we can Excellerate the gross margin sequentially by close to one percentage point, so that we now see ourselves in Q2 at around 59%.

Mike Genovese -- Rosenblatt Securities -- Analyst

Great. I have more questions, but I think I'll pass it on to [inaudible] other people. Thank you very much.


Our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is open.

Eric Martinuzzi -- Lake Street Capital Markets -- Analyst

Yes, I wanted to address the FX impact of the strong dollar. I was actually concerned that you guys might be backing away from the 10% to 15% growth in FY '23 based on the strength of the dollar versus the pound and the euro. Could you address that?

Remi Thomas -- Chief Financial Officer

Sure. There's two aspects, Eric. The first one is the competitiveness of our product. Unless some of our customers are willing to go with Huawei or with Alcatel-Lucent Enterprise, which is a very mall player, if we're dealing with Juniper, Cisco, HP Aruba, that has not proven to be a problem.

And believe me, I'm asking the questions every Monday on our sales calls to our head of EMEA sales. But so far, customers basically are absorbing the impact of a higher product in their local currency, specifically if they're in the Eurozone, because all of our competitors use the dollar as a functional currency, with the exception of the two that I mentioned. Second aspect is we have a significant cost base, not so much in terms of R&D, but obviously in sales and marketing, with a significant presence in Europe. And as we account for that, it basically has a favorable impact on our opex.

As a prudent CFO was a very prudent treasurer, we're hedging ourselves against the euro and the Indian rupee to lock in some of these rates, so the impact that you'll see on the P&L depends on how smart we've been in terms of our hedging. But that second aspect is favorable to the P&L.

Eric Martinuzzi -- Lake Street Capital Markets -- Analyst

OK. And then, you talked about Q4 relief in the supply chain that -- or I guess the release of the backlog. Is that consistent with your comments in May at the Investor Day? I could have sworn you were talking about Q3 relief. Go ahead, Ed.

Ed Meyercord -- President and Chief Executive Officer

Yes, I was going to say it is consistent, and I think not to be confused with how our suppliers begin turning up product, and then how that product affects our supply chain. So, I think in Norman's commentary, he was talking about suppliers where we're constrained turning up and opening up new fabs, and then turning up production lines to start releasing products. And so, there's an evolution there. That is happening in the first quarter, and they're on schedule.

That's happening in Q4 and calendar Q1. But then, those components have to make it into our supply chain, and so our timetable for that is we're seeing a significant step, in our Q4, of those much-needed components that we can then turn around and ship product.

Eric Martinuzzi -- Lake Street Capital Markets -- Analyst

OK. So, it was really more of an upstream comment, in that the P&L impact is Q4. OK

Ed Meyercord -- President and Chief Executive Officer

It is. I think keep in mind, we are forecasting a significant step in each quarter going forward. So, normally, there would be seasonality in the September quarter in revenue, but we're guiding to a step up. We're guiding to a step up in December, a step up in March, a step up in June.

So, it's -- we're seeing this gradual release, with some pretty larger steps happening into March, and then especially in the June time frame.

Eric Martinuzzi -- Lake Street Capital Markets -- Analyst

Yes, definitely unusual times.

Ed Meyercord -- President and Chief Executive Officer


Eric Martinuzzi -- Lake Street Capital Markets -- Analyst

Thanks for taking my questions.


Thank you. [Operator instructions] We have a follow-up from Alex Henderson with Needham & Company. Your line is open.

Alex Henderson -- Needham and Company -- Analyst

Great, the double dip. All right. So, I wanted to just clarify on the FX and international sales. So, do you have any receivables that you have exposure on, relative to the FX, that could be impacted by the strong dollar, weak currencies in the international markets, particularly Europe, that are either unhedged or would be impacted by further strength in the dollar?

Remi Thomas -- Chief Financial Officer

The functional currency that we used with our theses, where we basically collect 85% of our receivable, happens to be the dollar. So, that means that whatever bill was in dollar, they have to come up with the right amounts to meet that bill, so no exposure there.

Alex Henderson -- Needham and Company -- Analyst

And relative to the functional currency internationally and particularly in EMEA, what percentage of your revenues are in dollars versus local currencies? I assume that there are some -- I'm pretty sure that there are some that are in local currencies. Could you just clarify what that -- that percentage, since this is such a large factor these days?

Remi Thomas -- Chief Financial Officer

I don't know the exact percentage, but I would assume it's 95%, unless we have guaranteed a net price in the local currency, which, to my knowledge, we don't do. We sometimes will certain a net price, so some customers are immune from the price increase we've done until the frame agreement we have with them expires. But in any instance, that price is always set in dollars, to my knowledge.

Alex Henderson -- Needham and Company -- Analyst

That's lower -- higher than I thought it was, so thanks for the clarification.

Remi Thomas -- Chief Financial Officer

Yes, [inaudible].

Alex Henderson -- Needham and Company -- Analyst

Going back to the environment, it's hard to believe that the Europeans are not seeing some pressure in the pipeline. Can you talk a little bit more about the pipeline relative to Europe? You haven't seen any slowdown or any increase in the number of signatures [inaudible], the stretching of lead times, anything on those type of metrics? It seems hard to believe that, given the massive hits that that economy is taking, that there hasn't been any change at all in conditions.

Ed Meyercord -- President and Chief Executive Officer

I would add a couple of things to that, Alex. One is, it's something that we're looking at very closely and we're watching very closely. And the answer is, no, we really haven't seen that. As I mentioned before, is that a function of us taking share? We're seeing, with our position in cloud and with our position in fabric and our -- the quality of our story and then the quality of the genuine -- the implementations, we're getting more advanced.

And so, is this a function that we're seeing more opportunities from a share gain perspective? That could be part of it. The other thing I would say on an overarching basis is that networking infrastructure is critical, probably more strategic today than it's been. And if you're looking at digital transformation, the connective tissue is the network, and the connected tissue is the cloud. And these are really important, complicated projects that we just -- we're not seeing these projects being deprioritized.

And when we look at sort of the difference that new networks can make in terms of driving customer outcomes and business outcomes, these are not the first projects to go. So, if things are getting cut, we're -- and it's why I made to comment about the antirecessionary nature of critically important networking projects. We're -- I would reinforce, we're not seeing it yet.

Alex Henderson -- Needham and Company -- Analyst

That's fabulous. OK. One more question, except this one on the internal side of things. Have you changed your behavior relative to hiring? What are you seeing in terms of wage inflation? What are you seeing in terms of staffing churn? Any thoughts on those elements of the drive opex? And when is your annual merit increases, so that we can footnote them in our model?

Ed Meyercord -- President and Chief Executive Officer

So, annual merit increases for us are in the second half of the fiscal, so they would come into play in the January, February time frame, so in the March quarter. The -- for us, what I would tell you is that our turnover remains unusually low, and I think that has -- some of that has to do with our success in the marketplace and the kind of talent that we're attracting right now at Extreme. So, from that standpoint, we are -- we are out in the market, and we are out hiring. We are being very disciplined in our spend and our investments because real demand is a lot higher in the market, and we're driving a much higher demand than what we're spending toward, because our revenue is lower.

But we've been making some key strategic hires in the channel and in our sales leadership. We're better organized now to support the channel, and we see a real channel growth opportunity, and I would say we're hiring. So, right now, we're in investment mode, but we're constrained because we're governing investment via revenue, and our revenue is artificially low because it's not a reflection of real demand because of supply chain, if that makes sense.

Alex Henderson -- Needham and Company -- Analyst

So, would you then, as supply chain improves, accelerate the hiring to take advantage of your accelerating revenue growth? It sounds like that's the answer to that question.

Ed Meyercord -- President and Chief Executive Officer

We would blend returns to investment in the business and growth with returns to -- current returns to shareholders.

Alex Henderson -- Needham and Company -- Analyst

Well, the services should be pretty straightforward, right? I mean the services -- Remi Thomas executive VP & CFO Services attachment [inaudible] about $7. So, you sell $100 worth of switch or access points, you typically get $7. But as far as XIQ is concerned –

Ed Meyercord -- President and Chief Executive Officer

Alex, I think we should circle back. We should circle back with you on this one.

Alex Henderson -- Needham and Company -- Analyst

OK, great. Thank you very much. I'll cede the floor.


We have a question from Dave Kang with B. Riley. Your line is open.

Dave Kang -- B. Riley Financial -- Analyst

Yes. Nice quarter. First, on clarification, I think, Remi, you talked about gross margin would have been 600 bps higher. I'm assuming that was for fiscal fourth quarter?

Remi Thomas -- Chief Financial Officer

No, that was for the full year.

Dave Kang -- B. Riley Financial -- Analyst

Oh, then what was the fiscal fourth quarter? Can I get that number?

Remi Thomas -- Chief Financial Officer

It was about the same.

Dave Kang -- B. Riley Financial -- Analyst

Same? OK, got it. And then, yes, regarding a lot of that has to do with expedite fees. I mean, have we seen the peak of that, or when do we see that peaking? Because gross margin obviously declined one percentage point sequentially. I'm assuming that was a function of that?

Remi Thomas -- Chief Financial Officer

Actually, the expedite fees and freight costs in Q4 versus Q3 and versus what we expected didn't really come as a surprise. What really drove that 1% gross margin impact was a mix. We had a significantly stronger quarter for wireless, and our gross margin on wireless are lower than for our products. To your question about have we seen the peak, the answer is yes.

As we look at the expected, what we call PPV, purchase price variance, which is really what we pay in addition to the normal invoices to secure supplies from Broadcom and other vendors, we actually see a slight improvement in Q1, and same for freight costs. I mentioned earlier that there is now more capacity being added back by commercial airlines between Asia and the United States, and we're basically using -- leveraging that commercial capacity to carry our products, so that the bill that we expect to pay this quarter is actually going to be down sequentially, which is why we're suggesting a one percentage point improvement sequentially.

Dave Kang -- B. Riley Financial -- Analyst

Got it. And then, so sticking with wireless, what is the mix between wired versus wireless for product revenue?

Remi Thomas -- Chief Financial Officer

So, this quarter, it went back up. It had been depressed because we were delivering more on the wired side. This quarter, we went back up to 28% wireless, 72% wired.

Dave Kang -- B. Riley Financial -- Analyst

Got it. And then, regarding your backlog, I think last quarter, you talked about a backlog of maybe $500 million, maybe slightly higher, but clearly, you already exceeded that, and you're implying that will continue to go up. So how should we think about the new peak? Are we talking about maybe $600 million, even higher? And then, after peaking, can you maybe talk about the rate of decline? I'm assuming that's going to be more of a fiscal '24?

Remi Thomas -- Chief Financial Officer

Ed, you want to comment? So I'll go, Dave, and Ed, you can go free to add.

Ed Meyercord -- President and Chief Executive Officer

Yes, I wanted to clarify, I wasn't sure about the question of rate of decline. Dave, we're –

Dave Kang -- B. Riley Financial -- Analyst

Backlog decline.

Ed Meyercord -- President and Chief Executive Officer

Oh, the backlog, yes. So, we would expect to see backlog decline. We would -- what we mentioned is that it would level out and start chipping away at that in our Q4. We're not expecting a meaningful impact, but it's really in the second half of calendar '23 that you'll start to see us take more meaningful chunks out of that backlog.

And again, it will all be based on supply of components and the increased volume. So, I think through our fiscal year, the second half of our fiscal year, you'll see a step up, and then throughout fiscal '24 and probably into fiscal '25, you'll see us right-size our backlog.

Dave Kang -- B. Riley Financial -- Analyst

So, where do you think it will peak, around $600 million?

Ed Meyercord -- President and Chief Executive Officer

I'm not sure we provided guidance on that, but I think that would be a -- I think that's a fairly -- I think that's a fairly conservative number. I would say that's a safe number, based on the strength of bookings that we've got relative to supply, especially if you look at the trend over the last several quarters.

Dave Kang -- B. Riley Financial -- Analyst

Got it. Just a couple more. Can we get the latest update on SD-WAN and Ipanema, how that's progressing?

Ed Meyercord -- President and Chief Executive Officer

Sure. We had our Connect conference, and we announced that we were launching ExtremeCloud SD-WAN. Our team came in ahead of schedule as far as putting the SD-WAN solution in our cloud. So, one of the things you'll hear us talk about is that we have one cloud to orchestrate services, and we're the only provider in the industry that has a single cloud delivering cloud management on campus, as well as wide area network cloud management.

So, this is how we're -- this is how we are differentiated, and we're looking at bringing new WAN Edge services that we can orchestrate across our cloud. We are building -- we are -- this is a six- to 12-month selling cycle. As we've just launched, what we're seeing is we're seeing the funnel start building of opportunities, and we've already seen -- I mentioned [inaudible]. We had our sales kickoff meeting with partners, and SD-WAN is going to be a big part of that launch next week.

And our teams will have commitments on those numbers, so we're expecting a significant growth throughout the course of the year, and then you'll see the funnel build, and then you'll see the bookings come predominantly in the second half of the year.

Dave Kang -- B. Riley Financial -- Analyst

Got it. And my last question is on 5G. Clearly, you exceeded $20 million, and then I think before, you were expecting $50 million to $100 million. So, I was just wondering if that's the case, still the case for fiscal '23.

And then, any new customers in the funnel -- I mean the pipeline?

Ed Meyercord -- President and Chief Executive Officer

The answer is yes, yes, and yes. So, we're seeing new opportunities with one of our large global telecom suppliers that we've spoken about. They went from zero to over 22 proof of concepts, and now the proof of concepts are going into production. So, we're going to see a significant ramp as major telcos start deploying this cloud-native infrastructure solution.

But we're the sole source vendor for networking around major service provider 5G networks around the globe, so we are seeing it happen in real time, and so we're very confident in that forecast. We are also part of the 5G solution, and I know we mentioned Verizon by name. We have a significant business opportunity, where we are being certified in Verizon in real time, so the Verizon sellers in the enterprise space can position, and they can commission and sell Extreme. This is an exciting new opportunity for us.

This also expands across the broader portfolio. And then, we do -- we are adding new customers. Because of the work that we've done for these large service providers, there are use cases and very targeted use cases that apply to other service providers, and we're starting to see the funnel build where we open up that portfolio to other service providers. But I'd also say we've also been investing in that team, so this is an area where we see significant growth opportunities.

Dave Kang -- B. Riley Financial -- Analyst

Got it. Thank you.

Remi Thomas -- Chief Financial Officer

And Alex, if you still on the line, we do have an answer to your earlier question. We did some back of-the-envelope math. But typically, when you have $100 worth of backlog that you're not able to deliver, between the services and subscription, assuming attach rate for service, and assuming a different attach rate for subscription, you should assume around 15%. So, as that $500 million of backlog gets released, that's potentially $75 million worth of subscription and services business that can be generated over time.


Our next question is a follow-up from Mike Genovese with Rosenblatt Securities. Your line is open.

Mike Genovese -- Rosenblatt Securities -- Analyst

Great. I had a fairly long list of follow-ups, but then they mostly just got asked in the last few questions. So, I'm just going to end with, for me, CoPilot. I know it's early days, but do you have revenues there yet? What's the pipeline like that looking for? How do you sell that product, and what's customer acceptance like?

Ed Meyercord -- President and Chief Executive Officer

Yes, Mike, it's a great question. It's something we're really excited about, and we talked about the next generation -- the next generation of sort of new growth [inaudible] for subscription, and clearly, SD-WAN, we've gotten a lot of attention around digital twin [inaudible] visibility, and then CoPilot with AI Ops and automation and some of the operational savings that we're going to bring. The launch is really this week, this upcoming week in Boston. So, we're -- there's a huge amount of training and enablement and an official launch with our own internal sellers, with marketing programs and incentives as well as for our partners.

So, more to come on that. We're very excited about the capability and the differentiation of what that can do. So, still early innings there, but stay tuned

Mike Genovese -- Rosenblatt Securities -- Analyst

OK. I guess if we take very long term, years down the road, and we kind of dimensionalize the CoPilot opportunity versus the core XIQ opportunity, like what percentage would it be?

Ed Meyercord -- President and Chief Executive Officer

We haven't guided there yet, Mike. And I think that's something that we can come back. And what we do is, we look at customers, and we look at their software subscription spend. And so obviously, the core is a pilot license, and then maybe you start layering services on top of that.

And so, we look at, you could call it, it's an additive strategy where we're looking at adding services on top of that pilot. And I think for us to deliver you a meaningful answer there, we need to do some modeling for you to try to be responsive and understand what you're trying to build in there. I think it's premature for us to deliver you an answer on the call today.

Remi Thomas -- Chief Financial Officer

Mike, [inaudible] say you -- sorry, Mike. You should think of this as an opportunity for us to Excellerate our net retention rate. So, if our gross retention rate is in the high 80s, low 90s, when we go back to the customer and renew, we're typically going to upsell them with this type of product and get an additional few percentage points and increase on net retention rate.

Mike Genovese -- Rosenblatt Securities -- Analyst

Fantastic. Thank you very much.


And that's all the time we have for questions. I'd like to turn the call back to management for closing remarks.

Ed Meyercord -- President and Chief Executive Officer

OK, thank you. Well, we appreciate everyone joining us today, and we appreciate the engagement with the analysts. Great questions. We're very excited as we turn the corner into our fiscal '23.

The bookings growth and the demand for Extreme in the market is unprecedented, and I'd just say, personally, I'm very proud of the team. I know we have a lot of customers, partners, employees who listen in on the call, and I want to congratulate everyone on a job well done and tremendous momentum that we've got turning the corner, again, across the board from the product team, the sales and marketing teams, our services team, supply chain ops teams, and then everyone supporting the efforts at Extreme. We're just in a very unique position for top line growth and cash flow and earnings growth, not just the next couple of futures, but the next several years, so we're excited about it. But thank you again for joining us, and have a great day.


[Operator signoff]

Duration: 0 minutes

Call participants:

Stan Kovler -- Vice President, Investor Relations and Corporate Strategy

Ed Meyercord -- President and Chief Executive Officer

Remi Thomas -- Chief Financial Officer

Alex Henderson -- Needham and Company -- Analyst

Mike Genovese -- Rosenblatt Securities -- Analyst

Eric Martinuzzi -- Lake Street Capital Markets -- Analyst

Dave Kang -- B. Riley Financial -- Analyst

More EXTR analysis

All earnings call transcripts

Thu, 28 Jul 2022 01:01:00 -0500 Motley Fool Transcribing en text/html https://www.fool.com/earnings/call-transcripts/2022/07/27/extreme-networks-extr-q4-2022-earnings-call-transc/
Killexams : Loomis Sayles Celebrates the 10-Year Anniversary of Growth Equity Strategies Team's Long/Short Growth Equity Strategy

Loomis, Sayles & Company:







GES Team

GES Team

Supported by a seven-step research

As of 3/31/22

As of 3/31/22

Loomis, Sayles & Company, an affiliate of Natixis Investment Managers, celebrates the 10-year anniversary of the Loomis Sayles Long/Short Growth Equity strategy managed by the firm's Growth Equity Strategies (GES) team.

The Long/Short Growth Equity strategy is among a suite of equity products managed by Aziz V. Hamzaogullari, the chief investment officer and founder of the Loomis Sayles GES team. The team's $77.6 billion in assets under management also comprises Large Cap Growth, All Cap Growth, Global Growth, and International Growth strategies. The GES team's single alpha engine, employed across all strategies drives both long and short idea generation by seeking to identify both structurally attractive and structurally deficient businesses. The GES team's long-term, private equity approach is underpinned by a single differentiated investment philosophy and supported by a proprietary seven-step research framework. For long positions, the team seeks to invest in those few high-quality businesses with sustainable competitive advantages and profitable growth only when they trade at a discount to the GES estimate of intrinsic value. Short selling opportunities can arise when the team's research identifies companies that trade at a significant premium to the estimate of intrinsic value due to structural deficiencies or unsustainably high investor expectations.

Learn more about Loomis Sayles' Growth Equity Strategies team.

"The GES team has achieved a strong performance track record across its suite of products where the longest track record is more than 16 years. We are proud of the GES team's passion for delivering alpha to our investors through its disciplined, long-term investment decision-making that emphasizes deep fundamental research," said Kevin Charleston, chief executive officer and president of Loomis Sayles. "We launched the Long/Short Growth Equity strategy to bring to our investors the value of the team's alpha insights in long and short opportunities."

Aziz Hamzaogullari, CIO and founder of GES said, "More than a decade ago, we realized that our singular proprietary process organically generated alpha insights in short opportunities that we were unable deliver to our investors in our long-only strategies. Since inception, our Long/Short Growth Equity strategy has delivered alpha in both longs and shorts while simultaneously imparting hedging benefits in both mild and severe market declines."

Long/Short Growth Equity Strategy $208mm AUM
Since initiation of short exposure in 2012, the Long/Short Growth Equity Composite has achieved an annualized gross return of 9.35% (7.85% net return) with standard deviation of 9.14% (gross). The strategy has generated 4.61% of gross alpha (3.40% net alpha), of which 48% has stemmed from the strategy's short holdings and 52% has stemmed from long holdings. Inception 2/1/2012 Initiation of short exposure 5/23/2012
The Long/Short Growth Equity strategy seeks to produce favorable risk-adjusted returns over a full market cycle through a reasonably concentrated portfolio of long and short investments in growth equities.
Please see Trailing Returns, gross and net, for the Loomis Sayles Long/Short Growth Equity Composite below.
See also below where we illustrate how the strategy has performed and helped protect capital during quarters in which the S&P 500 has suffered serious declines.
Past performance is no certain of future results.
Trailing Returns (gross and net of fees) as of 3/31/2022

Gross of Fees

Net Foundational Fees

0% Management/10%

Incentive Allocation

S&P 500 Hedged 50%

Q1 2022




1 Year




5 Year




10 Year




Since Initiation of Short Exposure (5/23/2012)




Since Strategy Inception (2/1/2012)




Data source: Loomis Sayles. 
Gross returns are gross of fees and net of trading costs. Net returns are gross returns less effective management fees. 
Initiation of short exposure was 5/23/2012, although no investor was offered the opportunity to invest as of such date. Additional short positions were initiated 4/4/2014 - 4/7/2014. Net return information for that period is based on a high water mark of an account that invested at inception (2/1/2012); use of a 5/23/2012 or 6/1/2012 high water mark would result in lower performance. Returns for multi-year periods are annualized. Foundational net returns include the application of an effective management fee of 0% per year and an Incentive fee of 10% on positive performance for the calendar year. Net returns depict the return which would have been received by an investor who invested at inception bearing foundational fees and who participated in all investments; this may not reflect the return achieved by any particular investor. 
The Long/Short Growth Equity Strategy is considered an absolute return strategy. Because the strategy's structure is typically approximately 100% long positions and 50% short or hedge positions combined, we are including an S&P 500 Index Hedged 50% as a reference benchmark for illustrative purposes only.

Performance data shown represents past performance and is no certain of, and not necessarily indicative of, future results.

Historically, shorts have been sources of alpha while also hedging the strategy    

Long / Short Growth Equity Return %



Long / Short Growth Equity Return %

(Net Foundational Fees)


Short Position Return % (Gross)


S&P 500 Return %

Q4 2018








Q1 2020









Long / Short Growth Equity Strategy versus S&P 500

Excess Return (gross)  




Down Market Capture  





Data source: Loomis Sayles. 
Gross returns are gross of fees and net of trading costs. Foundational net returns include the application of an effective management fee of 0% per year and an Incentive fee of 10% on positive performance for the calendar year.
Selected market drawdown periods are the largest quarterly drawdown of the S&P 500 since inception of the strategy (2/1/2012). This analysis is as of 3/31/22 and is updated quarterly. Given that we are currently in a drawdown period, this analysis is subject to change as we move forward.

Important Disclosure

There is no certain that the investment objective will be realized or that the strategy will generate positive or excess return.

Any investment that has the possibility for profits also has the possibility of losses, including loss of principal.

Indexes are unmanaged and do not incur fees. It is not possible to invest directly in an index.

For most accurate month-end performance, visit www.loomissayles.com.

Loomis, Sayles & Company, L.P. ("Loomis Sayles") is an independent advisory firm registered under the Investment Advisors Act of 1940. For additional information on this and other Loomis Sayles strategies, please visit our website at www.loomissayles.com.

About Risk 
Equity securities are volatile and can decline significantly in response to broad market and economic conditions. Foreign and emerging market securities may be subject to greater political, economic, environmental, credit, currency and information risks. Foreign securities may be subject to higher volatility than US securities due to varying degrees of regulation and limited liquidity. These risks are magnified in emerging markets. Investments in small and mid-size companies can be more volatile than those of larger companies. Growth stocks may be more sensitive to market conditions than other equities as their prices strongly reflect future expectations. Currency exchange rates between the US dollar and foreign currencies may cause the value of the fund's investments to decline.

Since 1926, Loomis, Sayles & Company has helped fulfill the investment needs of institutional and mutual fund clients worldwide. The firm's performance-driven investors integrate deep proprietary research and risk analysis to make informed, judicious decisions. Teams of portfolio managers, strategists, research analysts and traders collaborate to assess market sectors and identify investment opportunities wherever they may lie, within traditional asset classes or among a range of alternative investments. Loomis Sayles has the resources, foresight and the flexibility to look far and wide for value in broad and narrow markets in its commitment to deliver attractive, risk-adjusted returns for clients. This rich tradition has earned Loomis Sayles the trust and respect of clients worldwide, for whom it manages $335.9 billion* in assets (as of 31 March 2022).

*Includes the assets of both Loomis, Sayles & Co., LP, and Loomis Sayles Trust Company, LLC. ($38.4 billion for the Loomis Sayles Trust Company). Loomis Sayles Trust Company is a wholly owned subsidiary of Loomis, Sayles & Company, L.P.


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Fri, 01 Jul 2022 08:14:00 -0500 text/html https://news.tmcnet.com/usubmit/2022/07/01/9632655.htm
Killexams : Advancing Digital Technology to Be Driving Force behind Demand Growth for Managed Switches, States Fact.MR


Future-Ready Machines and Plants & Devices Interconnected With Networks Will Generate a Plethora of Opportunities for Market Players

Seoul, South Korea, July 14, 2022 (GLOBE NEWSWIRE) -- United States, Rockville MD: According to Fact.MR, a market research and competitive intelligence provider, the global managed switches market is estimated at US$ 17.6 billion in 2022 and is expected to expand at an impressive CAGR of 8.4% during the forecast years of 2022-2032.

Managed switches are network switches that interconnect nodes and transfer data at Ethernet standard rates. They function as a central hub between printers, computers, storage arrays, and scanners, and connect them to the Local Area Network (LAN). The benefit of using a managed switch over a router is that it allows connecting more than one device over the LAN by making more than one switch port available. Managed network switches enable efficient methods of sharing information and allocating resources, thereby enhancing overall productivity and increasing business revenue.

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Technological intervention and new smart device development are progressing at a fast pace, parallelly driving demand for managed switches. A factor that has significant importance in the increasing demand for managed switches is their advanced security and manageability.

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“Lack of Trained Professionals and High Costs Involved in Maintaining & Updating Managed Switches”

Lack of trained professionals to assist in implementing managed switches is restraining the growth of this market. Also, due to the costs involved in maintaining and updating the entire network resources, business organizations are reluctant in deploying managed switches

Even though no electronic device can be 100% efficient, maximizing the output and performance is important, and remains a challenging task, to which, managed Ethernet switches are no exception. Complexity in the designing process continues to be one of the major challenges.

Even when gigabit-managed switch ports are not actively operational, they consume a certain amount of power, which leads to additional operational costs. High costs associated with the complexity in design and high energy consumption of managed switches may undermine market potential.

To learn more about Managed Switches Market, you can get in touch with our Analyst at https://www.factmr.com/connectus/sample?flag=AE&rep_id=7543

Key Segments Covered in Managed Switches Industry Survey

  • Managed Switches Market by Number of Ports :

    • Less than 8 Ports

    • 8-16 Ports

    • 16-24 Ports

    • 24-48 Ports

    • Above 48 Ports

  • Managed Switches Market by Switch Speed :

    • less 500 Mbps

    • 500mbps - 1 Gbps

    • 1-10 Gbps

    • 10-50 Gbps

    • Above 10 Gbps

  • Managed Switches Market by Layer Type :

Market Development

Manufacturers of managed switches are aiming to expand their existing product portfolios and further increase their business revenues. Some of the prominent market players are coming up with new products to cater to the growing demand for the efficient management of networking operations.

New product updates are expected to stimulate manufacturers to Excellerate and innovate product designs, thus increasing market competitiveness. New entrants in the global market are being encouraged by lucrative prospects along with favorable legislation.

Leading manufacturers are using cutting-edge technology to set their products apart from the competition and strengthen their position in the global market. Nearly 2/3 of the market is captured by leading players, which is potential barrier for new entrants to mark their position in the market. Moreover, the highly competitive environment in the market makes it difficult for new entrants to grow organically.

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Key players in Managed Switches Market

Key Takeaways from Managed Switches Market Study

  • The North America managed switches market is projected to expand at an impressive CAGR of 7.9% and create an absolute dollar opportunity of US$ 6.7 billion by 2032.

  • The global managed switches market registered 4.6% CAGR for the period of 2017-2021.

  • Under number of ports, 16-24 port managed switches dominate the market and are valued at US$ 5.1 billion in 2022.

  • PoE device type dominated the market with 63% market share in 2021.

  • Together, the electric & electronics and IT & telecommunication end-use industries are likely to represent 41.4% market share in 2022.

  • Based on region, demand for managed switches is expected to increase at CAGRs of 10.1% and 5.4%, respectively, in South Asia & Oceania and Latin America.

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Expert analysis, actionable insights, and strategic recommendations of the highly seasoned technology team at Fact.MR helps clients from across the globe with their unique business intelligence needs. With a repertoire of over thousand reports and 1 million-plus data points, the team has analysed the technology industry across 50+ countries for over a decade. The team provides unmatched end-to-end research and consulting services.

Explore Fact.MR's Coverage on the Technology Domain-

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Augmented Reality (AR) in Education Market- As per latest industry analysis published by Fact.MR, the global market for AR in education reached around US$ 1.5 Bn in 2020, and is slated to accelerate at a colossal CAGR of 80% to top US$ 85 Bn by 2031. Demand for AR in K12 is set to increase at a CAGR of 75% across the assessment period of 2021 to 2031.
3D Through-Silicon-Via (TSV) Devices Market- As per latest industry analysis published by Fact.MR, the global 3D through-silicon-via (TSV) devices market was valued at around US$ 5 Bn in 2020, and is expected to reach a valuation of US$ 15 Bn by 2031, accelerating rapidly at a CAGR of 20%.

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Wed, 13 Jul 2022 11:00:00 -0500 en-SG text/html https://sg.finance.yahoo.com/news/advancing-digital-technology-driving-force-230000453.html
Killexams : Zacks Industry Outlook Highlights Automatic Data Processing, Paychex and Genpact

For Immediate Release

Chicago, IL – June 20, 2022 – Today, Zacks Equity Research discusses Automatic Data Processing, Inc. ADP, Paychex, Inc. PAYX and Genpact Ltd. G.

Industry: Outsourcing

Link: https://www.zacks.com/commentary/1940261/3-stocks-to-watch-from-the-promising-outsourcing-space

Increased adoption of cloud computing and other emerging technologies, operational efficiency and reduced expenses in the wake of the coronavirus crisis-induced work-from-home wave have been driving competitive advantage besides increasing innovation and speed to market. These factors bode well for the Zacks Outsourcing industry.

Automatic Data Processing, Inc., Paychex, Inc. and Genpact Ltd. are some stocks that are likely to gain from the abovementioned industry trends. However, rising data security issues, thanks to increased dependency on technology, are concerns for the industry.

Industry Description

Outsourcing is the practice of transferring control of certain operations, services or processes, previously done by the company's internal staff and resources, to external resources or third-party contractors to Excellerate operating efficiency by focusing on core business competencies.

The Zacks Outsourcing industry comprises companies engaged in providing human capital management solutions, business management solutions and information technology solutions for human resource, payroll, benefits, and retirement and insurance services to small- and medium-sized businesses. Some industry participants also provide business process services with capabilities in transaction-intensive processing, analytics and automation in the United States and abroad.

What's Shaping the Future of the Outsourcing Industry?

A Healthy Demand Environment: Increasing demand for expertise in improving efficiency and reducing costs has benefited the industry over the past several years. The industry has witnessed growth in revenues, income and cash flow over the past few years, enabling most players to pursue acquisitions and other investments, and pay out stable dividends.

Rising Dependency on Technologies: Most of the industry participants are also considering emerging technologies such as cloud computing to drive competitive advantage, increase innovation, Excellerate speed to market and drive performance within the industry. The wider application of artificial intelligence (AI) is expected to be the biggest change induced by the pandemic. The adoption of AI should lower complications and simplify operations. This should aid the industry.

Notably, industry players are in the process of modernizing their traditional legacy-oriented business processes in order to keep themselves flexible in any kind of operating environment.

Growing Security Issues and Remedies: COVID-led increased dependency on technology has led to growing cases of hacking, identity theft and malicious payload deliveries. With work-from-home models being the new-normal professional scenario, remote infrastructure vulnerabilities and security gaps are being exploited to secure unauthorized access to proprietary systems and data.

As a preventive measure to enhance data security and ensure cyber-resilience, increased implementation of secure access technologies such as VPNs, two-factor authentication and other ID and access-management controls for home workers, as well as increased monitoring and threat-detection tools, are being used.

Outsourced service providers are also updating organizational policies (including Bring Your Own Device and work-from-home policies) and data breach protocols in order to reduce security risks. Adequate training of employees about emerging threats and data security issues is also being prioritized by several companies.

Zacks Industry Rank Indicates Encouraging Prospects

The Zacks Outsourcing industry, which is housed within the broader Zacks Business Services sector, currently carries a Zacks Industry Rank #49. This rank places it in the top 19% of more than 250 Zacks industries.

The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates continued outperformance in the near term. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The buy-side analysts covering the companies in this industry have been increasing their estimates. Over the past year, the industry's consensus earnings estimate for the current year has increased 5.8%.

Before we present a few stocks that investors can buy or retain given their growth prospects, let's take a look at the industry's accurate stock market performance and current valuation.

Industry Outperforms Sector and S&P 500

The Zacks Outsourcing industry has outperformed the broader Zacks Business Services sector as well as the Zacks S&P 500 composite over the past year.

The industry has gained 2.5% over this period against a 56% decline of the broader sector and 10.9% loss of the Zacks S&P 500 composite.

Industry's Current Valuation

On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing outsourcing stocks, the industry is currently trading at 22.63X compared with the S&P 500's 16.19X and the sector's 22.69X.

Over the past five years, the industry has traded as high as 28.89X, as low as 17.89X and at the median of 23.48X.

3 Outsourcing Stocks to Keep a Close Eye On

We are presenting three stocks that are well-positioned to grow in the near term. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Automatic Data Processing: This Zacks Rank #2 (Buy) New Jersey-based company provides cloud-based human capital management solutions worldwide. Amid a challenging scenario, Automatic Data Processing remains strong, backed by its momentum in sales, client satisfaction and client retention. Higher operating revenues and effective cost-containment measures have helped the company Excellerate its margin performance.

The company continues to enjoy a dominant position in the human capital management market through strategic buyouts like Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company. It has a strong business model, high recurring revenues, good margins, robust client retention and low capital expenditure.

Further, ADP has raised its fiscal 2022 outlook. The company now expects revenues to register 9-10% growth compared with the prior-expected growth rate of 8-9%. Adjusted EPS is now expected to register 15-17% growth compared with the prior expected growth rate of 12-14%.

The company now expects Employer Services revenues to grow at a rate of about 7% compared with the prior-expected growth rate of about 6%. PEO Services revenues are expected to grow at a rate of 14-15% compared with the prior growth rate of 13% to 15%.

The Zacks Consensus Estimate for ADP's 2022 EPS has moved up 2.2% in the past 90 days. ADP's shares have rallied 33.5% over the past year.

Paychex: This Zacks Rank #3 (Hold) New York-based provider of integrated human capital management solutions recently declared a dividend hike of 20%, thereby raising its quarterly cash dividend from 66 cents per share to 79 cents. The dividend will be paid out on May 26 to shareholders of record as of May 12, 2022.

Despite the impact of the COVID-19 pandemic, the company continued to enjoy higher revenues per client, resulting from improved price realization, growth in client base across HCM, and ancillary products resulting from strong sales performance and high levels of retention, besides improved market conditions on asset-based revenues for retirement services, and increase in funding for temporary staffing clients.

An increase in the number of average worksite employees, impact of an increase in average wages per worksite employee, higher revenues on state unemployment insurance and rise in PEO health insurance revenues act as other tailwinds. Acquisitions have expanded Paychex's customer base and generated cost and revenue synergies. Consistency in rewarding shareholders through dividend payments and share repurchases boosts investor confidence and positively impacts earnings per share.

Paychex has raised its guidance for fiscal 2022. Total revenues are now expected to register 12-13% growth compared with the prior expectation of 10-11%. Adjusted earnings per share are now expected to register 22.5-23% growth compared with the prior expectation of 18-20%. The adjusted operating margin is expected to be almost 40% compared with the prior expectation of 39-40%. The adjusted EBITDA margin is now expected to be nearly 44-45% compared with the prior expectation of 44%.

The Zacks Consensus Estimate for Paychex's 2022 EPS has improved 3% in the past 60 days. Paychex's shares have gained 11.5% over the past year.

Genpact Limited: This Zacks Rank #2 Bermuda-based company provides business process outsourcing and IT services in North and Latin America, India, rest of Asia and Europe. Genpact enjoys a competitive position in the BPO services market based on its domain expertise in business analytics, digital and consulting.

Acquisitions have been helping it expand its product portfolio and gain new domain expertise. AI offers ample growth opportunities amid the COVID-induced dependency on technology. Consistency in rewarding shareholders through dividend payments and share repurchases boost investor confidence and positively impact earnings per share.

For 2022, the company has raised its guidance. Genpact's guided range for adjusted EPS is $2.60-$2.76 (previous view: $2.53-$2.71). Revenues are anticipated between $4.325 billion and $4.4 billion (prior view: $4.3 billion and $4.4 billion).

The Zacks Consensus Estimate for Genpact's 2022 EPS has improved 2.3% in the past 90 days. The stock has gained 3% over the past year.

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Past performance is no certain of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of genuine portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Sun, 19 Jun 2022 22:47:00 -0500 en-GB text/html https://uk.finance.yahoo.com/news/zacks-industry-outlook-highlights-automatic-083308103.html
Killexams : Glasgow Labour councillor apologises over ‘inappropriate’ comment to lord provost

Glasgow Labour councillor apologises over ‘inappropriate’ comment to lord provost

A Glasgow Labour councillor has apologised to the lord provost for an “inappropriate” comment during a council meeting.

Cllr Frank McAveety, a former council leader, said his intervention was “not respectful” to the city’s new lord provost Jacqueline McLaren.

During the full council meeting, cllr McAveety had paused his speech in a local government finance debate to say: “Lord provost, I hope you’re listening to me.”

His comment sparked complaints from SNP and Green councillors and cllr McLaren responded: “I am in the middle of trying to find out how many of our colleagues have asked to speak in this debate.

“That’s why I was speaking to the officer there. I’m not happy at all about what you said there.”

In response, cllr McAveety said he was “just wanting to make sure the comments were on the record”.

The next speaker, cllr Alex Kerr, SNP, said the comment had been “absolutely disgusting”.

At the end of the meeting, cllr McAveety said he had had an “opportunity to reflect on my earlier intervention during the debate on local government finance”.

Addressing the provost, he said: “My intervention was inappropriate and was not respectful of the role you have to play as lord provost in chairing this meeting.

“I apologise unreservedly to you, lord provost, and I can assure you it won’t occur again.”

Labour had proposed a motion which asked the council to agree to writing to Kate Forbes MSP, the cabinet secretary for finance and the economy, to outline “deep concern” at the Scottish Government’s resource spending review. It added the “chronic underfunding of local services arises from decisions made at Westminster and Holyrood”.

However, a composite amendment from the SNP and Greens was passed, which stated the “spending review is a forecast and not a budget and therefore likely to be subject to considerable fluctuation”.

It added the council chief executive would write to the finance secretary outlining the council’s “deep concern at the potential implications of the spending review” and to “demand action to increase the resources available to councils to spend on local priorities”.

They also agreed to invite Forbes to meet with a cross-party delegation of councillors and frontline workers for talks.

Fri, 24 Jun 2022 15:37:00 -0500 en-GB text/html https://uk.finance.yahoo.com/news/glasgow-labour-councillor-apologises-over-151019053.html
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