29 July 2014

GigOptix’s revenue grows more-than-expected 9% in Q2 to $8m, as datacoms exceeds telecom for first time

For second-quarter 2014, GigOptix Inc of San Jose, CA, USA (a fabless supplier of analog semiconductor and optical communications components for fiber-optic and wireless networks) has reported revenue of $8m, up 9% on $7.4m last quarter (above the guidance of 3-5%) and up 18% on $6.8m a year ago.

In particular, High-Speed Communications revenue grew 23% year-over-year, while datacom-related revenue rose almost 70% and E-band sales tripled from Q2/2013

“For the first time in the company’s history our datacom-related revenue was higher than telecom-related revenue, and we believe this trend will continue,” says chairman & CEO Dr Avi Katz. “In addition, when you add together the two fastest-growing markets we serve, datacom and the point-to-point wireless backhaul areas, they accounted for 45% of our total revenue in the second quarter, up from 28% in the same quarter last year,” he adds.

On a non-GAAP basis, gross margin has fallen from 65% a year ago and 60% last quarter to 59%. However, net income was $0.3m ($0.01 per diluted share), up from $0.1m ($0.00 per diluted share) a year ago and compared with a net loss of $0.7m ($0.02 per share) last quarter. Adjusted EBITDA is up from $0.7m a year ago and just $47,000 last quarter to $1m. During the quarter, cash and cash equivalents fell from $19.9m to $18.5m.

“Our second quarter financial performance, which included strong revenue growth and a return to non-GAAP profitability, further validates our long-term business plan to develop first-mover advantage within the emerging high-speed communications markets,” says Katz. “As we move into the second half of fiscal 2014, we will continue to focus primarily on the datacom, wireless point-to-point backhaul radios for the LTE infrastructure small-cells, and high-speed links for the consumer markets that offer the largest TAM [total addressable market] and highest projected growth rates,” he adds.

In June, GigOptix announced the acquisition of Tahoe RF Semiconductor Inc, which became effective on the first day of third-quarter 2014. “The purchase adds leading-edge RF/analog RFIC technology to our expanding product portfolio. It is also consistent with our previously stated objective of adding engineering assets to enhance revenue-generating products,” says Katz. “This acquisition brought to GigOptix a meaningful CMOS and SiGe RF device IP library for emerging and high-volume applications, such as wide-frequency point-to-point wireless backhaul, including 60GHz V-band to augment our existing 70-90GHz E-band technology. In addition, we gained GPS-GNSS, low-power and low-noise transmitters and amplifiers, and specific consumer electronics and automotive systems. These capabilities have already been incorporated to the company’s working plans and business development active engagements,” he adds. “We currently believe that these new opportunities should be a catalyst for revenue growth starting in fiscal 2015. When combined with the previously announced inception of the BrPhotonics joint venture, which is meeting our early expectations, along with the growth trends we see in our business, we are confident that by expanding our addressable markets we will continue to improve our higher-margin revenue growth and enhance profitability.”

As part of its ongoing efforts to improve operational efficiencies, GigOptix has implemented an enterprise-wide change in organizational structure. “We will now operate under a functional structure rather than the product line structure we have used for several years,” says Katz. “The need for change became more apparent in recent months, more so after the recent acquisition and consolidation of TahoeRF, as we diversified our revenue mix by expanding into parallel markets, such as new RF applications in the wireless and consumer markets,” he adds.

In support of these efforts, the board of directors has promoted Dr Raluca Dinu to senior VP of global sales & marketing. Dinu has been a key member of the firm’s executive team since 2008, most recently as VP & general manager of the High Speed Communications Product Line. “Her strong technical background in the industries we serve, and long-time relationships with our current and targeted customers, will play a vital role as we expand our revenue channels,” comments Katz. “We have also assigned Mr Anil Chaudhry to the newly created position of VP of government affairs and strategic accounts,” he adds. Chaudhry has been a part of the executive team since 2010, serving as VP & general manager of the Industrial Product Line. “Anil’s lengthy service in the semiconductor industry makes him an ideal person to lead this group and grow our businesses and revenues through these crucial venues,” Katz says.

With continued strong demand in its product lines, for third-quarter 2014 GigOptix expects revenue of $8.2-8.4m, up 3-5% on Q2/2014 and 12-15% year-on-year.

“In addition, based on our third quarter forecast, and continued confidence in our business over the remainder of the year, particularly in our datacom and wireless lines, we are increasing our revenue outlook in fiscal 2014,” notes senior VP & chief financial officer Curt Sacks. The firm now expects full-year revenue to grow 12% on 2013, compared with the guidance range of 10% provided earlier this year.

See related items:

GigOptix grows more-than-expected 7% year-on-year to $7.4m in Q1 as E-band sales triple

GigOptix delivers $1.5m order for E-band radio chipsets

GigOptix's Q4 revenue grows more-than-expected 7% sequentially to $7.8m

GigOptix and CPqD form joint venture BrPhotonics in Brazil

GigOptix’s revenue rebounds by more-than-expected 7% in Q3 to $7.3m

GigOptix reports Q2 revenue down 29% year-on-year but level with Q1

Tags: GigOptix

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