Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Mark Sue - RBC Capital Markets
Mark Sue - RBC Capital Markets
Direct conversations with customers, does that mean there’s a verbal agreement on purchase orders, does it mean you been [designed] into new networks or does it mean its as good as a done deal, if you could just give us some more granular thoughts there.
Gary Smith
Its probably a combination of them all, we’ve actually seen the physical, I guess the most important thing is the physical order flow which we’re seeing increased activity on. So I guess that would fall into your done deal category. I would also say that in engagements with the customers across the board I think the sentiment has been somewhat improved.
I would say that goes back to the sort of March type timeframe which I think coincides with the general macro environment as well. So I think it’s a combination of all of those.
Mark Sue - RBC Capital Markets
And the sequential revenue guidance, that’s based on the order growth and not just the put recognition of the push-outs, is that how we should look at it.
Gary Smith
Yes, correct otherwise we wouldn’t be as confident about that. So its orders and the other things that we’re seeing as well. We’re seeing increased activity up across the board and that’s somewhat encouraging. I think its too early to tell around connecting, we’ve haven’t got enough data points yet to connect that to draw a broader conclusion, so that’s why we’re taking it one quarter at a time right now.
Mark Sue - RBC Capital Markets
And you must have various scenarios of when you might be able to kind of break even from an operating income point of view, any thoughts on when that might be. Is it two quarters, three quarters, or kind of like a base case scenario.
Jim Moylan
It all depends upon what our revenue does and where our margins go. So its hard for me to answer that question. I think the strongest statement that we can make is we think that our OpEx are going to be low, mid 80’s and if we get sort of the revenue and margin that would get to that level, then we’ll be there.
I want to go back to this point that we’re really striving to run the company, balancing, maintaining the strength of our balance sheet, but also making sure that we invest in the strategic parties of the business. So that’s how I’d answer that.
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