网络设备与IT硬件：摩根大通科技峰会预备问题与主题

1、Networking & IT HardwarePreparation Questions/ Topics for J.P. Morgan TMC ConferenceIn advance of the J.P. Morgan TMC Conference from May 12-14 we have compiled a question bank as a reference for our coverage companies within Networking Equipment and IT Hardware. The report includes reference questi

2、ons for the following companies: ANET, AVYA, CASA, CSCO, COMM, GLW, EXTR, FFIV, FN, HLIT, JNPR, LITE, NPTN, QCOM, RBBN, ST, and VIAV.Please contact your JPM sales representative if you need a detailed agenda for the conference or help in registering for any specific sessions.North America Equity Res

3、earch11 May 2020Telecom & Networking Equipment/IT HardwareSamik Chatterjee, CFA AC(1-212) 622 0798 HYPERLINK mailto:samik.x.chatterjee samik.x.chatterjeeJ.P. Morgan Securities LLCJoseph Cardoso(1-212) 622-9036 HYPERLINK mailto:joseph.cardoso joseph.cardosoJ.P. Morgan Securities LLCBharat Daryani(1-2

4、12) 622 8039 HYPERLINK mailto:bharat.daryani bharat.daryaniJ.P. Morgan India Private LimitedSee page 51 for analyst certification and important disclosures, including non-US analyst disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, inv

5、estors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. HYPERLINK / Table of ContentsTOC o 1-1 h z u HYPERLINK l _bookmark0 Avaya (AVYA) 3

6、 HYPERLINK l _bookmark1 Arista (ANET) 5 HYPERLINK l _bookmark2 Casa Systems (CASA) 8 HYPERLINK l _bookmark3 Cisco (CSCO) 11 HYPERLINK l _bookmark4 CommScope (COMM) 13 HYPERLINK l _bookmark5 Corning (GLW) 16 HYPERLINK l _bookmark6 Extreme Networks 19 HYPERLINK l _bookmark7 Fabrinet (FN) 21 HYPERLINK

7、l _bookmark8 F5 Networks (FFIV) 24 HYPERLINK l _bookmark9 Harmonic (HLIT) 26 HYPERLINK l _bookmark10 Juniper Networks (JNPR) 29 HYPERLINK l _bookmark11 Lumentum (LITE) 32 HYPERLINK l _bookmark12 Qualcomm (QCOM) 35 HYPERLINK l _bookmark13 National Instruments (NATI) 38 HYPERLINK l _bookmark14 NeoPhot

8、onics (NPTN) 40 HYPERLINK l _bookmark15 Ribbon Communications (RBBN) 43 HYPERLINK l _bookmark16 Sensata (ST) 45 HYPERLINK l _bookmark17 Viavi Solutions (VIAV) 48Avaya (AVYA)We are hosting CFO, Kieran McGrath for a fireside chat at 10:50 am on May 14th.Investor focus should be on the drivers of the t

9、urnaround on revenue growth led by transformation to cloud-based solutions.Confidence in the transformation: New initiatives towards building momentum in the transformation towards cloud-based solutions, but a key question has been what is different this time around relative to similar partnerships

10、announced in the past. What should give investors confidence that it will be different this time around?Outlook for Unified Communication post COVID-19. What were your expectations for growth in the Unified Communication market, including cloud- based solutions, prior to the disruption from COVID-19

11、? How have those expectations changed following COVID-19 disruption, and how should we think about the increasing importance of UC in this backdrop?Impact of COVID-19. How are you thinking about the impact of the COVID-19 disruption on the business both near-term and longer-term?Migration to cloud-b

12、ased solutions. Have you seen any change in the timelines from Avayas large customers relative to migration to cloud-based solutions following the challenges stemming from COVID-19? Have these projects been put on the back-burner or accelerated?Social security contract: Can you give us an update on

13、the social security contract and what your latest expectations are in terms of realizing revenues from it through the remainder of the year?Outlook for return to growth: What are you embedding in relation to your forecasts for Enterprise spending and the impact of a weaker macro backdrop in spending

14、 as you think about the potential return to growth?Opportunity with ACO product. How should we think about the size of the TAM within Avayas existing installed base for the ACO product, and then how should we think about the TAM beyond the existing installed base?Subscriptions offering: One of the k

15、ey milestones to track progress on the transformation is the recurring revenue mix. What are you seeing in terms of demand for subscription based offerings including the IX subscriptions?Channel management: What has been the feedback from channel partners to the new subscription based offerings. Add

16、itionally, what challenges did you face initially in your go-to-market side by side with Ring Central and how have you navigated those?Contact Center solutions. How should we think about current growth trends in the Contact Center Solutions market and Avayas growth rate relative to the market growth

17、 in that segment?Cloud migration for Contact Center solutions. Where does the Contact Center market stand today in relation to adoption of cloud-based solutions and how should investors think about the opportunity for Avaya in helping customers with that migration?Samik Chatterjee, CFA (1-212) 622 0

18、798 HYPERLINK mailto:samik.x.chatterjee samik.x.chatterjeeTable 1: AVYA Summary Table$ mnsNorth America Equity Research11 May 2020Sep Fiscal Year End20181Q192Q193Q194Q1920191Q202Q20E3Q20E4Q20E2020E1Q21E2Q21E3Q21E4Q21E2021ERevenueY/Y % Chg.Cost of SalesGross MarginOperating Expenseas % of SalesOperat

19、ing Income Operating Margin Y/Y Bp Chg.Net Interest Income/(Expense) Pre-tax IncomeIncome Tax Tax Rate Net Income Diluted EPSDiluted Shares (avg.) EBITDAY/Y % Chg. EBITDA marginY/Y Bp Chg.Cash DebtNet DebtNet Leverage (ttm) Operating Cash Flow Capital Expenditures Free Cash FlowShare repurchases3,05

20、7(6.6)%1,15162.3%1,26941.5%63720.8%-65 bp(168)469(28)6.0%441$4.00110763(11.8)%25.0%-148 bp7003,1262,4263.2x(212)(74)(286)0748(3.5)%27962.7%29940.0%17022.7%53 bp(58)112(7)6.3%105$0.94111189(8.3)%25.3%-131 bp7473,1242,3773.2x86(21)650714(5.7)%27561.5%29040.6%14920.9%13 bp(58)91(29)31.9%62$0.56111166(1

21、2.6)%23.2%-185 bp7393,1222,3833.3x37(26)110720(4.6)%28260.8%29340.7%14520.1%14 bp(47)98(12)12.2%86$0.77111167(11.6)%23.2%-184 bp7343,1202,3863.4x52(37)150726(5.7)%28660.6%27537.9%16522.7%234 bp(54)111(7)6.3%104$0.941111843.4%25.3%223 bp7563,1192,3633.3x66(29)3702,908(4.9)%1,12261.4%1,15739.8%62921.6

22、%79 bp(217)412(55)13.3%357$3.21111706(7.5)%24.3%-68 bp7563,1192,3633.3x241(113)1280717(4.1)%27761.4%28940.3%15121.1%-167 bp(44)107(25)23.4%82$0.75109174(7.9)%24.3%-100 bp7662,9062,1403.1x12(26)(14)(132)663(7.2)%26360.3%28743.3%11317.0%-384 bp(48)65(13)20.5%52$0.5791130(21.8)%19.6%-366 bp6972,9062,20

23、93.4x94(33)61(130)645(10.3)%25360.8%28644.3%10716.6%-356 bp(48)59(12)20.5%47$0.5684122(26.7)%19.0%-423 bp6412,9062,2653.7x48(29)19(75)690(5.0)%26961.0%28841.7%13319.3%-347 bp(48)85(17)20.5%67$0.8084149(19.1)%21.6%-377 bp6482,9062,2583.9x38(31)702,715(6.6)%1,06260.9%1,14942.3%50418.6%-308 bp(188)316(

24、68)21.5%248$2.7092575(18.6)%21.2%-310 bp6482,9062,2583.9x192(119)73(337)7261.3%28161.3%30341.8%14219.5%-157 bp(47)95(19)19.9%76$0.9382159(8.5)%21.9%-234 bp6072,9062,2994.1x17(33)(16)(25)6792.5%26660.8%28441.8%12919.0%201 bp(47)82(16)19.8%66$0.837914713.3%21.7%207 bp5582,9062,3484.1x6(31)(24)(25)6622

25、.6%25162.1%27741.8%13420.3%373 bp(47)87(17)19.8%70$0.917715022.4%22.6%366 bp6172,9062,2893.8x114(30)84(25)7021.7%26562.3%29341.8%14420.5%123 bp(47)97(19)19.9%78$1.03751618.5%23.0%143 bp6732,9062,2333.6x113(32)81(25)2,7692.0%1,06361.6%1,15741.8%54919.8%128 bp(188)361(72)19.8%289$3.70786187.4%22.3%112

26、 bp6732,9062,2333.6x250(125)125(100)Source: Company reports and J.P. Morgan estimates.Arista (ANET)We are hosting CFO, Ita Brennan for a fireside chat at 2:40 pm on May 13th.Investor focus should be on long-term share gains opportunities in both Data Center and Campus, in addition to spending trends

27、 for key cloud customers.COVID-19 supply impact: Can you walk us through the impact you are seeing from COVID outbreak on your supply chain and how much demand are you not able to satisfy due to the constraints? What are your expectations for when the supply chain is back to normal?Demand impact fro

28、m COVID-19: On the last earnings call, you have expressed that your revenue outlook with the Cloud Titans has improved modestly. How should we think about the magnitude of that improvement being led by demand increase following COVID with higher utilization of cloud, and how sustainable is that upsi

29、de?Implication of cloud capacity expansion on Networking: Other IT infrastructure going into the cloud data centers have seen a greater uptick from the higher capacity needs from cloud companies. Why is a capacity increase necessarily as much of a driver for networking equipment?Cloud Networking ref

30、resh cycle: How long is the refresh cycle for Networking equipment with cloud companies that you work with, and what are you seeing in relation to extension or push out of the refresh cycle? Why have the refresh cycles for networking diverged significantly from refresh or capacity requirements on co

31、mpute?TAM expansion: How should we think the opportunities for Arista to expand both relative to data center networking as well as relative to Campus opportunities? What is the size of the addressable TAM today vs. couple of years ago?Market share outlook: How should we think about the relative ease

32、 or difficulty of share gains in additional layers of the cloud data centers relative to the share gains we have seen from Arista in the past with 100G adoption?400G Data Center Switching: What are your expectations relative to the impact on revenue growth and market share with large Tier 1 webscale

33、 customers with 400G adoption? We have seen some push out already in 400G timing, how are you thinking about downside risks of further push outs?White box switching: The momentum for white box switches has slowed even with the Tier 1 cloud hyperscalers. However, what do you think prevents companies

34、like Facebook and Microsoft in adopting white box similar to Google and Amazon in the future?Cloud spending visibility: Cloud spending was largely considered a secular growth area for the Networking Equipment industry, but the challenges you are seeing to revenue growth this year have raised questio

35、ns about that. How has the visibility provided by cloud customers on their spending changed over the years?Revenue growth in Enterprise business: Given the weaker macro backdrop, how are you expecting your Enterprise customers to respond relative to their budgets allocated in relation to upgrading t

36、heir data center networking and theircampus networks? Which aspects of their IT infrastructure will be higher priority for them? What are you seeing in terms of customer engagement and activity?Campus revenue targets: You have reaffirmed the $100 mn of Campus revenue target for 2020. As we look to t

37、he $1 bn target, what kind of growth rate should we expect in Campus revenues for Arista particularly if there is a slowdown in spending as well as new customer engagement?Driver of Campus share gains: What are you seeing in terms of customer interest in your Campus products and which products would

38、 you expect to be the primary insertion point for Arista in the Campus?Big Switch acquisition: How are you thinking of Big Switch fitting into your product portfolio for the Campus and how does the acquisition make it easier to compete for Enterprise business? Big Switch has been around for a while

39、and seen better traction for its monitoring products, what do you estimate the revenue opportunity in monitoring is?M&A: Arista has been fairly active relative to M&A. What is your criteria both strategically as well as financially to evaluate a target?Samik Chatterjee, CFA (1-212) 622 0798 HYPERLIN

40、K mailto:samik.x.chatterjee samik.x.chatterjeeTable 2: ANET Summary Table$ mnsNorth America Equity Research11 May 2020Dec Fiscal Year End20181Q192Q193Q194Q1920191Q202Q20E3Q20E4Q20E2020E1Q21E2Q21E3Q21E4Q21E2021ERevenue2,1515956086545532,4115235345756172,2496006216646582,543% chg y/y30.7%26.0%17.0%16.

41、2%-7.2%12.1%-12.2%-12.2%-12.2%11.7%-6.7%14.7%16.3%15.5%6.7%13.1%Cost of Sales766211214233192851180186200215780214219232231896Gross Margin64.4%64.5%64.7%64.4%65.2%64.7%65.6%65.3%65.3%65.1%65.3%64.4%64.7%65.0%64.9%64.8%SG&A203545758582275858636724566636564258as % of sales9.4%9.1%9.4%8.8%10.5%9.4%11.1%

42、10.8%10.9%10.8%10.9%11.0%10.1%9.8%9.7%10.1%R&D39310710210596410919288893609699106105407as % of sales18.3%17.9%16.7%16.1%17.4%17.0%17.4%17.3%15.3%14.5%16.0%16.0%16.0%16.0%16.0%16.0%Operating Income789224235258206923194199225246863224240260258982operating margin36.7%37.5%38.7%39.4%37.3%38.3%37.1%37.2%

43、39.1%39.8%38.4%37.4%38.6%39.2%39.2%38.6%bp chg y/y107 bp227 bp187 bp235 bp-3 bp160 bp-46 bp-145 bp-32 bp255 bp10 bp31 bp141 bp9 bp-65 bp24 bpNet Interest Income/(Expense)(3)000000000000000Other income/(expense)32111415115112101010421010101040Pre-tax Income81823524927321797420620923525690523425027026

44、81,022Income Tax175475056341874446515619749535756216tax rate %21.4%20.0%20.2%20.5%15.5%19.2%21.6%21.8%21.8%22.0%21.8%21.1%21.1%21.1%21.1%21.1%Net Income643188199217183787162163184199708185197213211807Diluted EPS$7.95$2.31$2.44$2.69$2.29$9.73$2.02$2.05$2.32$2.51$8.90$2.33$2.48$2.68$2.66$10.15Diluted

45、Shares (avg.)81818181808180807979807979798079EBITDA ex-equity income8172322442662149562012062322548922322482692661,015% chg y/y34.6%34.6%23.7%23.3%-7.6%17.0%-13.4%-15.5%-12.8%18.6%-6.6%15.6%20.5%15.8%5.0%13.8%EBITDA margin38.0%39.0%40.0%40.7%38.7%39.6%38.4%38.5%40.4%41.1%39.7%38.7%39.9%40.5%40.5%39.

46、9%bp chg y/y110 bp247 bp216 bp234 bp-15 bp168 bp-57 bp-153 bp-28 bp242 bp4 bp31 bp141 bp9 bp-65 bp24 bpCash1,9602,1552,2622,4472,7292,7292,6372,5352,5052,6202,6202,7392,7362,8282,9902,990Debt0000000000000000Gross Leverage0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0 x0.0

47、xNet Debt(1,960)(2,155)(2,262)(2,447)(2,729)(2,729)(2,637)(2,535)(2,505)(2,620)(2,620)(2,739)(2,736)(2,828)(2,990)(2,990)Net Leverage-2.4x-2.5x-2.5x-1.6x-2.9x-2.9x-2.9x-2.9x-2.9x-2.9x-2.9x-3.0 x-2.8x-2.8x-2.9x-2.9xOperating Cash Flow503170196269327963195100176221691225103198269795Capital Expenditure

48、s(24)(5)(3)(5)(2)(16)(3)(5)(6)(6)(21)(6)(6)(7)(7)(25)Free Cash Flow4791651932653259471919417021567021997192262770Dividends0000000000000000Share repurchases00(100)(115)(52)(266)(228)(200)(200)(100)(728)(100)(100)(100)(100)(400)Source: Company reports and J.P. Morgan estimates.7Casa Systems (CASA)We w

49、ill be hosting CEO, Jerry Guo, for a fireside chat at 4:50 pm on May 12th.Investor focus should be on the sustainability of cable capex tailwinds, wins in DAA/vCCAP, and drivers of growth for NetComm.COVID-19 Impact: Can you outline how your customers are responding to the COVID-19 disruption and wh

50、at are you seeing in terms of activity? How much of a tailwind are you seeing in relation to network spending?Outlook: Given the strong 1Q results, how are you thinking about 2Q and sustainability of the strength?Cable capex outlook: The recent year trend in relation to capex spending has been that

51、of a steady decline for cable customers; does the COVID-19 led changes lead to a structural change in longer-term capex outlook?New architectures for cable: How are you expecting cable customers to respond in this current environment to the migration of network architecture to DAA or vCCAP following

52、 this disruption; should we expect an acceleration or a push-out of the transition?Casas position in DAA/vCCAP: Can you outline Casas current position in the next generation cable equipment hardware including DAA and vCCAP relative to the major players in the segment, including Cisco, CommScope, and

53、 Harmonic. You have recently announced some wins in vCCAP; what were the primary drivers for the customer choosing Casa over competitive products?Strategic diversification: Can you talk to the rationale of the strategic diversification of the company beyond cable equipment into wireless and fixed te

54、lco equipment, and what should drive investor confidence in the companys ability to be successful in building a strong presence in these new areas?Wireless and fixed telco drivers: Can you walk us through the fundamental demand drivers for the fixed telco and the wireless business, and what is your

55、growth outlook for these segments?Competitive landscape in wireless: Relative to the cable segment where there are a few competitors, how should we think about the targets Casa has for itself in the more competitive wireless/ small cell segment and how can you be confident of adequate returns in a h

56、ighly competitive market?Small cell deployment: Led by the COVID-19 disruption, we have seen challenges around site permits which can further delay densification of the network, and additionally we have also seen consumers rely more on Wi-Fi. How are you thinking about the impact of the above on gro

57、wth for your business?Telco capex on densification: What are you hearing from telco customers in relation to their willingness to continue to spend at the same pace towards densification including smell cells, despite a tougher macro environment?Progress on margins: At the time of acquisition, Netco

58、mm had a range of 25- 30% gross margins. What is your target in relation to improving margins for the business to closer to corporate level margins?Cash generation and liquidity: Can you walk through your liquidity position and how to think about sustainability even in this challenging macro environ

59、ment?Table 3: CASA Summary Table$ millionDec Fiscal Year End20181Q192Q193Q194Q1920191Q202Q20E3Q20E4Q20E2020E1Q21E2Q21E3Q21E4Q21E2021E Revenue2973552821132828466931103537965107130 381% chg y/y-15.5%-60.2%-24.2%14.4%66.4%-5.0%135.7%26.8%13.9%-2.4%25.1%-5.2%-1.8%15.0%17.8%8.0%Cost of Sales7911134353120

60、4132435116636294756 168Gross Margin73.4%69.0%75.4%47.9%52.7%57.6%51.0%52.0%54.0%54.0%52.9%55.0%55.0%56.0%57.0%56.0%Operating Expense139393648501724640464818146385053 188as % of sales46.8%108.8%68.3%58.6%43.9%60.8%55.3%61.0%49.0%44.0%51.2%58.5%58.0%47.0%41.0%49.2%Operating Income (GAAP)79(14)4(9)10(9