22 April 2016

GigOptix's Q1 revenue up 25% year-on-year to record $11.4m

Financial results have been announced for GigOptix Inc of San Jose, CA, USA (a fabless supplier of analog semiconductor and optical communications components for fiber-optic and wireless networks) for first-quarter 2016 to 27 March (not including any contribution from Magnum Semiconductor Inc, acquired subsequently on 5 April, after which GigOptix was renamed GigPeak Inc, focusing on ICs and software solutions for high-speed connectivity and high-quality video compression over the network and cloud).

Revenue rose for the eighth consecutive quarter to a record $11.4m, up 3% on $11.1m last quarter and up 25% on $9.1m a year ago.

"First-quarter 2016 was an exceptional quarter to conclude our exactly 9 year history of GigOptix going back to our inception in 2007," says founder, chairman & CEO Dr Avi Katz.

Gross margin has risen further, from 62% a year ago and 67% last quarter to a record 69%.

Excluding $0.8m of expenses incurred from due diligence and negotiation of the Magnum Semiconductor acquisition, net income has risen from $0.7m ($0.02 per diluted share) a year ago and $2.2m ($0.05 per diluted share) last quarter to $2.4m ($0.05 per diluted share). Likewise, adjusted EBITDA has risen from $1.4m a year ago and $2.9m last quarter to $3m.

Free cash flow generation was a record $2.8m, compared with $20,000 last quarter and outflow of -$0.7m a year ago (and about 3.5 times higher than the $0.8m generated in full-year 2015). 

During the quarter, the firm invested $1.2m in Anagog Inc in January, but also raised $4.7m from a direct investment by Shanghai Pudong Science and Technology Investment Co Ltd (PDSTI) in March.

Hence, during the quarter, total cash and cash equivalents rose from $30.2m to $36.8m.

"We delivered yet again another quarter of historic record revenue, highest ever gross margin, enhanced profitability, and generated exceptional record free cash flow," notes Katz. "These results demonstrate the continued strength of our business model and core business execution in all our served markets," he adds.

"With a strong foundation in place, the recent acquisition of Magnum Semiconductor significantly enlarges our financial profile," says Katz. Following the acquisition, the firm expects to deliver a 50% increase in full-year revenue over 2015, with further improvements to gross margin, improved profitability, and higher than initially guided non-GAAP earnings per share. "Supporting our better financial outlook is the fact that the acquisition gives us a much broader product portfolio with the addition of software-based solutions to deliver best-in-class video and data-streaming capabilities to the world's leading broadcasting, IoT [Internet of Things] and consumer customers," says Katz. "With the exponential growth in video traffic putting more pressure on the network, we expect a growing demand for the entire GigPeak product portfolio and solutions that deliver real-time, high-speed and high-quality information streaming and video compression in the cable, satellite, telco/IPTV and mobile/over the top markets," he adds.

Driven by the acquisition and the opportunities to expand the firm's focus from the enterprise, telecom and datacom networking markets into the cloud connectivity, broadcasting head-end, IoT, and consumer markets, it is expected that the targeted available markets have risen from $1bn to about $5bn. "As we will reorganize GigPeak to address these markets, we will report our financial results beginning 1 January 2016 without the historical classification of High-Speed Communications and Industrial ASICs, as we did in the previous years," notes Katz. "We will likely move later this year to line up the company along two business lines: enterprise networking (which will include telecom, datacom and broadcasting, and which will be named the GigOptix product line) and consumer and cloud connectivity (which will be named the GigCloud line). When we complete this realignment in the future, we will then start to report according to those two business lines."

The initial revenue outlook for second-quarter 2016 (which will include about 10 weeks of sales from Magnum Semiconductor products) is expected to be $15-15.3m, up 33% on Q1/2016 and up 55% year-on-year.

See related items:

GigOptix announces $5m investment from Shanghai's PDSTI

GigOptix raises Q4/2015's revenue outlook by 4%

GigOptix's revenue rises for sixth consecutive quarter to record $10.4m

GigOptix achieves first quarter of GAAP profitability

GigOptix reports record income in Q1

Tags: GigOptix

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