28 October 2010


GigOptix’s growth 15% to record revenue in Q3 yields first non-GAAP profit

For third-quarter 2010, GigOptix Inc of Palo Alto, CA, USA, which designs modulator and laser drivers and transimpedance amplifier (TIA) ICs based on III-V materials as well as polymer electro-optic modulators, has reported another revenue record of $7.2m. This is up 130% on $3.1m a year ago and 15% on $6.3m last quarter (the fourth consecutive quarter of both double-digit growth and $1m or more of revenue growth on the prior quarter).








“The achievement of record revenue during the third quarter and for the first nine months of the year represents our continued execution on our business initiatives,” comments chief financial officer Ron Shelton.

“Our results were driven by continued momentum and market share gains as we capitalized on our leadership position in 40G and 100G optical products,” reckons chairman & CEO Dr Avi Katz. Revenue from 40G and 100G products grew by more than 65% sequentially. In particular, during the quarter, GigOptix started volume shipments of drivers for both 100G coherent and 40G RZ-DQPSK systems (two of the fastest-growing optical segments). The firm also expanded its 100G portfolio to include surface-mounted devices (SMDs) and began sampling a quad 7.5Vpp DWDM driver for 100G DP-QPSK applications.

“Most notable, during the third quarter we introduced our 40G and 100G Bundled Solutions, which we believe sets another industry first by providing a complete solution set comprised of a TIA and a TFPS [thin-film polymer on silicon] Mach–Zehnder modulator (MZM) with a matched driver for an optical application,” says Katz. “Our goal is to simplify our customers’ supply chain and development efforts by offering a one-stop-shop for all of their 40G and 100G requirements, including drivers, receivers and modulators, which will also enhance inter-operability quality and performance,” he adds. “These products are not currently available from any other single supplier.”

Shortly after the close of the third quarter, GigOptix began shipping the industry’s first production samples of its TFPS MZM to tier-1 telecom customers. “This proprietary technology enables electro-optical polymer MZMs that establish new performance thresholds in our industry in terms of small size and low power,” says Katz. “Our high-bandwidth TFPS MZM is optimized for the stringent telecom thermal and optical stability requirements demanded by our customers and we believe greatly strengthens our comprehensive Bundled Solutions of 40G and 100G drivers and receiver TIAs.”

Also during the quarter, GigOptix launched a new family of ultra-low-power multi-rate SMART optical sub-assemblies (OSAs) targeting short-reach datacom applications, demonstrated at the European Conference and Exhibition on Optical Communications (ECOC 2010) in late September. The SMART receive OSA (ROSA) and SMART transmit OSA (TOSA) are based on a new generation of GigOptix’ VCSEL driver and TIA/limiting amplifier chips that combine RF analog circuit techniques that reduce power consumption with mixed-signal circuits to enable a fully digitally controlled TOSA and ROSA. “Given their ultra-low power dissipation and ease of design, we believe there is significant opportunity for our SMART TOSA and SMART ROSA products not only in the traditional datacom market but also in consumer, industrial and avionics markets,” says Katz.

“Our expanded product offerings position GigOptix as the only pure-play provider of electronic devices for high-speed fiber-optical communications covering all applications (drivers, amplifiers and modulators), all speeds (from 1–120G), and all distances — from very short reach (VSR) to ultra long haul (ULH),” believes Katz. 

On a non-GAAP basis, gross margin has fallen from 62% a year ago and 58% last quarter to 55% in Q3/2010. However, although up on $3m a year ago, operating expenses have been cut by 12% from $4.7m last quarter to $4.1m.

Compared to net loss of $0.7m a year ago and $0.4m last quarter, GigOptix achieved its first non-GAAP net profit, of $0.3m. The firm also achieved its second consecutive quarter of positive adjusted EBITDA, up from $0.2m last quarter to $0.9m (12% of revenue), compared to a loss of $0.6m a year ago.

During the quarter, cash and investments rose from $0.8m to $4.9m, including $3.9m in net proceeds from a public offering of shares completed in July.

“The third quarter represents our 13th quarter of consistent execution since the inception of the company in July 2007, and we are proud of our continuing ability to exceed our original GigOptix growth plan,” says Katz.

For fourth-quarter 2010, GigOptix expects revenue to grow sequentially by 7–10%, driven by continued demand for its existing product lines as well as increasing traction of products for the 40G and 100G markets. “Furthermore, we expect to grow non-GAAP profitability and adjusted EBITDA as we move closer towards achieving GAAP profitability,” concludes Shelton.

“Going forward, we will focus on expanding our customer base and enhancing our product portfolio by achieving a higher level of integration with our Bundled Solutions, as well as continuing to pioneer even higher communication speeds up to 1Tbps over the next five years,” reckons Katz.

See related items:

GigOptix grows 19% sequentially to record revenue of $6.3m for Q2

GigOptix reports record revenue of $5.3m in Q1

GigOptix grows 54% in 2009 to $14.8m, but margins hit by ChipX acquisition

GigOptix gives update and outlook for 2010

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