8 August 2011

NeoPhotonics’ revenue grows 14% year-on-year to record $52.1m

For second-quarter 2011, NeoPhotonics Corp of San Jose, CA, USA has reported record revenue of $52.1m, up 2% on Q1’s $50.9m and 14% on $45.6m a year ago.

NeoPhotonics is a vertically integrated designer and manufacturer of photonic integrated circuit (PIC)-based components, modules and subsystems for bandwidth-intensive, high-speed communications networks. Products include III-V-based active semiconductor, silica-based passive PLC (photonic lightwave circuit) and silicon-based MEMS (micro-electro-mechanical system) multi-dimensional switching functions in a single product, with integration enabled by nanomaterials and nanoscale design and fabrication technologies. The firm has engineering and manufacturing facilities in both Silicon Valley and Shenzhen, China. 

During the quarter, NeoPhotonics announced that it has quadrupled capacity for PIC-based Integrated Coherent Receivers (ICR) for 40 and 100Gbps fiber-optic transport systems. Its ICR is designed to convert phase-encoded optical signals into electrical signals of varying intensity, which can then be analyzed using digital signal processing, leveraging a carrier’s existing fiber-optic cable investments. NeoPhotonics says that it has earned multiple design wins for the ICR with its tier 1 customer base and is now shipping ICR products to multiple customers.

NeoPhotonics also announced that, following its launch in fourth-quarter 2010 and general availability in first-quarter 2011, its PIC-based small-form-factor DQPSK demodulator (designed for use in 40Gbps direct detection fiber-optic transport systems) achieved volume production. The small-form-factor version is less than half the size of the standard-form-factor DQPSK demodulator and saves board space in high-capacity systems.

Although down from 34.4% a year ago, non-GAAP gross margin has risen from 25.8% in Q1 to 26.2%. NeoPhotonics was profitable on a non-GAAP basis for the eighth consecutive quarter, although net income has fallen from $4.2m a year ago and $0.14m in Q1 to just $7000. Adjusted EBITDA has fallen from $7.1m a year ago and $3.3m in Q1 to $3m.

During the quarter, total cash, cash equivalents and short- and long-term investments rose from $92.5m to $107.5m. This includes investments of $28.2m in long-term marketable securities, and proceeds of $21.3m from the sale of an interest in an unconsolidated investee (resulting in an estimated 1.8x return on capital, and valuing the entity at an estimated 2.6x trailing 12-months revenue).

NeoPhotonics anticipates that macroeconomic conditions, including the slow recovery in the USA, European sovereign debt issues, and concerns relating to inflation in China, could impact third-quarter 2011 results. Accordingly, it currently expects revenue of $48–53m, and non-GAAP gross margin of about 26%.

Also, the firm expects to use a portion of the $21.3m proceeds received in Q2 for re-investment in the business, including in R&D. “We are focused on developing additional integrated and advanced products and plan to increase our R&D investments, specifically in speed and agility product areas, with a goal to accelerate the growth opportunities that we see with our broad customer base,” says chairman, president & CEO Tim Jenks.

Tags: NeoPhotonics PICs

Visit: www.neophotonics.com

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