AES Semigas


6 May 2022

NeoPhotonics Q1 revenue grows 47% year-on-year, despite chip supply chain shortages

For first-quarter of 2022, NeoPhotonics Corp of San Jose, CA, USA – a vertically integrated designer and manufacturer of silicon photonics and hybrid photonic integrated circuit (PIC)-based lasers, modules and subsystems for high-speed communications – has reported revenue of $89.3m, up 11% on $80.6m last quarter and up 47% on $60.9m a year ago due to more than 70% growth in 400G-and-above capable products to $54m (61% of total revenue up from 56% last quarter and 52% a year ago). This is despite the impacts of semiconductor chip shortages. Supply chain shortages negatively impacted revenue by about $10m, but these were primarily shortages of analog and power semiconductors.

Fiscal Q1/2021 Q2/2021 Q3/2021 Q4/2021 Q1/2022
Revenue $60.9m $65m $83.7m $80.6m $89.3m

“Our business remains on a strong growth path,” says chairman & CEO Tim Jenks. “We are now shipping production 400ZR coherent DCO module products to leading customers, and we have extended our product reach to higher speeds and to new applications, such as communications in low earth orbit (LEO) satellites,” he adds.

Product milestone achieved during the quarter include:

  • announcing cumulative shipments of more than 1 million single and quad 53Gbaud PAM4 driver ICs for 100G DR1 and 400G [DR4 and FR4] hyperscale data-center networks;
  • sampling Open ZR+ QSFP-DD small-form-factor pluggable coherent modules for metro-regional applications designed to enhance performance in hyperscale data-center and telecom networks;
  • demonstrating that the firm’s QSFP-DD and OSFP coherent modules interoperate with multiple vendors’ products in the OIF 400ZR Interoperability Demonstration at the Optical Fiber Communications conference (OFC 2022);
  • demonstrating indium phosphide (InP) components capable of 120Gbaud operation supporting 800G applications within and between data centers (LR, ZR, and ZR+);
  • introducing a radiation-tolerant version of the Ultra-Pure Color Tunable Laser with enhanced flexible software to extend operating life in a radiation environment enabling use in low Earth orbit (LEO) applications.

On a non-GAAP basis, gross margin has risen further, from 22.4% a year ago and 26.6% last quarter to 31.2%, as the first-quarter increase in under-utilization charges (per normal seasonal patterns) was more than offset by the improved product mix and lower purchase price variance.

Operating expenses have risen further, from $21.5m a year ago and $23.3m last quarter to $25m, due to higher research & development (R&D) and general & administrative (G&A) expenses. However, as a proportion of revenue, this is a cut from 35.3% a year ago and 28.9% last quarter to 28%.

Operating income was $2.8m (operating margin of 3.1% of revenue), compared with losses of $1.8m (-2.2% margin) last quarter and $7.8m (-12.9% margin) a year ago.

Net income was $2.3m ($0.04 per share), compared with losses of $3.4m ($0.06 per share) last quarter and $7.5m a year ago ($0.15 per share) a year ago.

During the quarter, cash and cash equivalents, short-term investments and restricted cash rose by about $1m to $107m.

“Our 47% year on year revenue growth, non-GAAP operating profit and significant growth from western customers reflects our success in pivoting our business,” says Jenks. “We have overcome the loss of the majority of our revenue from our prior largest customer [Huawei] due to Department of Commerce restrictions, with growth from leading customers in high-growth markets,” he adds.

“The Lumentum transaction, announced last November, remains on track, having been approved by our shareholders and received antitrust clearance from US regulators. Lumentum is an ideal partner to serve our customers on a larger scale and we look forward to securing regulatory approval in China and closing the transaction,” continues Jenks.

“Looking forward, while we continue to see strong demand for our products, we also expect continuing challenges with IC chip supply shortages, which could materially impact our results near term,” cautions Jenks.

See related items:

NeoPhotonics’ full-year 400G-and-above product revenue up more than 70% to $148m

NeoPhotonics transceivers included in OIF 400ZR interoperability demo

NeoPhotonics shipping 53Gbaud PAM4 driver ICs for 100G and 400G hyperscale data-center networks

NeoPhotonics launches ultra-narrow-linewidth laser for LEO satellites

NeoPhotonics demos InP components capable of 120Gbaud operation supporting 800G LR, ZR, and ZR+ transmission

NeoPhotonics samples Open ZR+ QSFP-DD transceivers

HSR clearance for Lumentum’s acquisition of NeoPhotonics

NeoPhotonics’ revenue returns to growth in Q2

NeoPhotonics’ Q1 revenue for 400G-and-above products up 134% year-on-year

Tags: NeoPhotonics PICs



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