Tom Sweeney

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Posts Tagged ‘Verizon’

Bridgewater bumps up revenue 41 per cent in Q2

Posted by sweens on July 29, 2010

Bridgewater Systems posted a 41-per-cent increase in second-quarter revenues Thursday, but one analyst cautions a pull-back by the company’s largest customer could create anxiety among investors.

The Ottawa-based software development firm reported revenues of $22.7 million, powered in large part by product sales, which increased 47 per cent to $17.1 million.

Earnings before income taxes were $4.8 million in the same period, an increase from the $4.1 million posted the year before.

The firm’s $47.2 million in revenues in the year to date is also 56 per cent higher than revenues in the first six months of fiscal 2009.

A conference call with analysts Thursday morning discussed the company’s wins in attracting new customers, particularly overseas, and the expansion of partnerships with existing customers such as Cisco and Verizon.

However, mitigating the rosy outlook and continued customer growth was analyst concern about Verizon’s shift away from purchasing Bridgewater software and hardware solutions as a bundle and instead focusing on just the software solutions instead, said Bank of Montreal analyst Thanos Moschopoulos.

“I don’t think it will impact Bridgewater all that much, but when your largest customer is looking to tweak the way business is doing with you it makes people nervous,” he said.

He added he doesn’t see much of an impact given “Verizon has very rapid traffic work on 3G network” and that mobile Internet demand is not expected to slow down any time soon.

The challenge for Bridgewater, he added, was to position itself for the LTE market in the coming years, but that will not begin to take a large share on the market for about 24 to 36 months, he said.

The company highlighted its growth in developing countries during the conference call.

“We have a focus on global expansion and emerging markets,” said Ed Ogonek, chief executive of Bridgewater, talking particularly about their work in India as the country begins its move from 3G to 4G spectrum options.

“We’ve built a technical servies and professional services capability to put some additional in-country and in-region capability,” he added.

“One of the fascinating things around the market is it’s rich with skillset and technical experience.”

The addition of 17 new customers, including 11 outside of North America, drew praise from analysts, although they also drew concern that the new partner business represented only seven per cent of revenues and it is not expected to increase substantially in the next few quarters.

Research notes from Kris Thompson, of NBF financial, said the new customers “should aid future revenue growth and customer diversification.”

He noted that management had continued to keep up its revenue guidance of $85 million to $94 million.

“We continue to expect new customer wins in Q2 2010 to help the company beat this range,” he stated.

Bridgewater further noted two existing customers represent 59 per cent of the firm’s revenue. Chief financial officer Kim Butler said “one can assume” Verizon was one those partners but could not separate the two into more exact numbers.

For future guidance, Mr. Ogonek said the company has been involved in Europe and other regions in implementing a system that can help consumers avoid “bill shock” by sending mobile alerts when the person is getting close to the limit of their browsing downloads.

With more carriers looking to implement these systems in the next year or two, Mr. Ogonek said the company is well-positioned for growth in the coming 24 months.

In the second quarter, gross margin was $15 million, or 66 per cent of revenue, compared with $12.1 million, or 75 per cent of revenue in Q2 2009.

Bridgewater stated this is due to a bump-up in direct-product costs due to bundling integrated systems together, as well as increasing the infrastructure of operations support.

Net earnings before income tax went up 17 per cent to $4.8 million, compared with $4.1 million in the second quarter of 2009.

After income tax, net earnings were $3.2 million, or $0.13 per fully diluted share, compared with $4.1 million ($0.17 per share) in Q2 2009. The decrease was due to a one-time income tax spending of $0.6 million and a non-cash future income tax expenditure of $0.9 million.

http://www.obj.ca/Technology/2010-07-29/article-1631057/UPDATE-2%3A-Bridgewater-bumps-up-revenue-41-per-cent-in-Q2/1

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DragonWave signs OEM deal

Posted by sweens on March 2, 2010

Published on February 24th, 2010
Ottawa Business Journal

Shares of DragonWave Inc. (TSX:DWI) soared more than five per cent Wednesday as it announced a major original equipment manufacturer deal for backhaul products that will be used in North America and Japan.

Ottawa-based DragonWave said it’s signed an agreement with an unnamed “world leader” in mobile communications infrastructure that will see the former’s microwave radio system used in the customer’s end-to-end mobile backhaul solutions.

 While few details were disclosed, the markets reacted positively to the news, as the deal could represent a step in DragonWave’s goal of connecting with major carriers such as Alcatel-Lucent and Verizon. It could also allow the company to diversify and lessen its strong dependence on top customer Clearwire.

 The company’s stock, which has already been enjoying blistering growth over the past several months, soared to a fresh high of $13.65 following the news, before settling down slightly at $13.43 at the close of business Wednesday, a 70-cent spike from the previous day’s close.

http://www.obj.ca/Technology/2010-02-24/article-818999/DragonWave-signs-OEM-deal/1

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DragonWave has its sights set on big U.S. carriers AT&T, Verizon

Posted by sweens on December 15, 2009

Published on December 10th, 2009
Published on December 12th, 2009
Canadian Press

Traffic jams on wireless networks due to iPhone and other smartphone users surfing the Internet and downloading video are an opportunity for DragonWave CEO Peter Allen.

“The pressure on the mobile network is increasing dramatically, and frankly people who have got iPhones consume more of the Internet,” Mr. Allen said from the tech company’s Ottawa headquarters.

“It’s creating more traffic and it’s moving into mobile settings. So that’s where we’re involved.”

DragonWave Inc. (TSX:DWI) makes equipment for telecom companies that are building advanced networks with the goal of making mobile speeds similar or faster than the broadband experience at home and to ease congestion.

The company has already won key U.S. customer Clearwire, which is building a next-generation WiMax network that has started to launch in large U.S. cities.

“They’ve been very aggressive in their buildout and, of course, we’ve benefited from that.”

Clearwire which had been having some funding problems has secured an additional $1.5 billion to further expand its network across the United States.

Mr. Allen said U.S. carrier Sprint is also a DragonWave customer and the company is also looking for wins with AT&T and Verizon Wireless.

But he said DragonWave isn’t alone on that front.

“Most of the world with us is competing for AT&T and Verizon right now. So that’s what we’re after in North America.”

National Bank Financial analyst Kris Thompson said he expects Clearwire to remain an important customer in the next few years for DragonWave, it could be joined by AT&T and Verizon as they build their new networks.

“Our understanding is that DragonWave has been short-listed as a qualifying vendor into the Verizon Wireless deployment,” Mr. Thompson wrote in a recent note.

“We expect AT&T to be at least several months behind Verizon Wireless in awarding contracts that DragonWave can bid on.”

Mr. Allen said 68 per cent of the companies revenues are from North America.

Pacific Crest Securities analyst James Faucette said the opportunities for DragonWave to bid on contracts with Verizon and AT&T aren’t likely to come until late next year.

“While there has been obvious and understandable concern regarding DragonWave’s customer concentration with Clearwire (77 per cent of revenue in the August 2009 quarter), we now believe that Clearwire will be able to maintain its buildout plans during all of 2010 and 2011 now that it has raised additional capital,” he wrote in a research note.

DragonWave was formed in 2000 and has about 250 employees and also has offices in U.K., France, Dubai and Singapore. Its competitors include Israel’s Ceragon Networks and U.S.-based Harris Stratex.

In October, the company listed on the Nasdaq to increase its profile and raised an additional US$74.5 million in an equity financing.

DragonWave earned $6.3 million or 21 cents per diluted share for the quarter ended Aug. 31 compared with a loss of $1.7 million or six cents per share a year ago. Revenue for what was the second quarter of the company’s 2010 financial year more than tripled to $35.5 million, compared with $10.6 million a year ago.

In its outlook, the company has said it expects revenue for its 2010 financial year will reach at $150 million.

National’s Mr. Thompson said the company has potential to reach $200 million in annual revenues in its 2011 financial year and a long-term $20 share valuation.

“Investors should expect this stock to be volatile over the near-term as DragonWave’s Nasdaq IPO is concluded and as ownership in the company migrates from a value investor base to a momentum-driven investor base along with a higher concentration of U.S. investors,” he said.

By LuAnn LaSalle

http://www.obj.ca/Technology/2009-12-10/article-270823/DragonWave-has-its-sights-set-on-big-U.S.-carriers-AT%26amp%3BT%2C-Verizon/1

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