7 May 2015

GigOptix reports record income in Q1

For first-quarter 2015, 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 $9.1m, up only slightly on $9m last quarter but up 23% on $7.4m a year ago, and above the expected $8.5-8.7m. In particular, product revenue was up 6% on last quarter and 28% on a year ago, in what is historically a seasonally weaker quarter. Joint development program (JDP) revenue was $0.5m, down from $0.9m last quarter.

Growth came primarily from fast-growing areas within the High-Speed Communications business, driven by the continuing strong demand for 40Gbps devices for Web 2.0 data-center infrastructure installations and for 100Gbps coherent linear devices for telecom infrastructure installations. The High-Speed Communications business (Datacom and Telecom optical communications products plus wireless RF point-to-point products) has hence grown further, from 66% of total revenue last quarter to 68%, rising to $6.2m (up 3% on last quarter and 17% on a year ago).

The contribution from the Industrial (ASIC) product line has correspondingly fallen further, from 34% of total revenue last quarter to 32% ($2.9m, although this is down only slightly on $3m last quarter and up 36% on a year ago due to some customers moving to smaller-geometry ICs). 

On a non-GAAP basis, gross margin was 62%, level with last quarter and up from 60% a year ago. Operating expenses have risen from $4.7m last quarter to $4.9m, driven mainly by higher payroll taxes at the beginning of the year, normal year-end audit fees, and industry tradeshow expenses.

Net income was $0.7m ($0.02 per diluted share), down slightly from $0.9m ($0.03 per diluted share) last quarter but an improvement on a net loss of $0.7m ($0.02 per diluted share) a year ago (and the fourth consecutive quarter of positive net income, representing the firm's most profitable first quarter). Likewise, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $1.4m, down slightly from $1.6m last quarter but up on $47,000 a year ago (and the 15th consecutive quarter of positive adjusted EBITDA). Spending on property, plant & equipment (PP&E), including production assets, was level at about $0.4m. However, driven by a build-up for High-Speed Communications business, inventory has risen from $5.1m to $6m. Hence, altogether during the quarter, cash and cash equivalents fell from $18.4m to $17.7m.

"At the recent OFC [Optical Fiber Communications] conference a few weeks ago, we featured several new Datacom and Telecom 100Gbps and 400Gbps products, all of which have already been accepted by leading Telecom and Datacom customers, and which will be the main drivers of our expected continuous revenue growth this year," says chairman & CEO Dr Avi Katz. "In addition, we are releasing new products in our High-Speed Communications product lines, including our first 100Gbps linear TIA [transimpedance amplifier], which will be available shortly for sampling by key telecom customers," he adds. "These products will expand on our already strong position in areas within the Telecom and data-center markets that are quickly moving to 400Gbps and 100Gbps platforms, respectively."

In the Industrial business, GigOptix recently launched new power management mixed-signal ASIC products to address high-end applications in the automotive industry. "This represents a new and complimentary business approach with our ASIC technology wherein we initiate engagements for sophisticated mixed-signal, RF and optical ASIC devices that leverage on our skills in high-speed and high-frequency RF device design," says Katz. "Additionally, these engagements expand upon our ASIC design knowledge and should open up new opportunities in what is a very stable and highly profitable segment of our business," he adds.

"The positive momentum we have seen in the last year should continue into the June quarter," believes VP & chief financial officer Darren Ma. For Q2/2015, GigOptix expects revenue of $9.3-9.5m (up 3-5% sequentially and 16-18% year-on-year). Gross margin should be about 60%, while operating expenses should fall slightly. "While it is still early in our fiscal year, we reinforce our previous forecast of annual revenue to be approximately $37-38m, or growing approximately 14% over the prior year," Ma adds.

"With a strong start to our fiscal 2015, a solid backlog for the coming quarter and encouraging revenue projections for the rest of the year, we have increasing confidence that our financial performance this year will result in record revenue, and non-GAAP and adjusted EBITDA profitability, while at the same time getting us closer to achieving our next goal of delivering GAAP profitability," notes Katz.

See related items:

GigOptix reports record profit in Q4, and first ever annual non-GAAP profit

GigOptix's revenue rises 6% in Q3, driven by telecoms growth of 49%

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

GigOptix to acquire Tahoe RF

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

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