Sandvine up, DragonWave down on quarterly revenue

Two networking-releated startups reported quarterly earnings this week reflecting different priorities for carriers. Revenues at Ottawa's DragonWave Inc. , which makes packet-based backhaul systems for wireless companies, was down compared to the year ago quarter, while Waterloo, Ont.-based Sandvine Corp., which makes network policy management systems for traffic management for fixed and wireless carriers, reported record quarterly revenue.

At DragonWave, Q2 revenue was $27.2 million, compared with $32.4 million in the second quarter of fiscal year 2010. Revenue from customers within North America was $20.3 million, the company said, compared with $29.1 million in the second quarter of the prior fiscal year. Kris Thompson of National Bank Financial, noted the revenue was about what financial analysts had expected. However, he added, in a note, U.S. carrier Clearwire Communications LLC, which is building a WiMAX-based wireless network for Sprint Nextel and others, accounted for 59 per cent of the revenue — more than twice what DragonWave had predicted. In other words, the company isn't diversifying its customers. Thompson thinks the manufacturer is getting unanticipated orders from Clearwire as it expands its network.

DragonWave pointed out that it's revenue for the first six months of the fiscal year was $75.9 million, up 67 per cent from the same period a year ago.

“I am satisfied with our progress in the second quarter in meeting key objectives to strengthen our global market presence, expand our customer and partner base, and to continue to deliver innovative solutions,” DragonWave CEO Peter Allen said in a news release.

Sandvine reported quarterly revenue of $24.4 million and GAAP net income of $2.2 million. By comparison, revenue for the same quarter a year ago was $16 million. About half the latest quarter's revenue came from DSL carriers, the company said in a news release, 30 per cent from wireless operators and 20 per cent from cable operators. The release added that Sandvine inked six new customers in the quarter.

“The DSL and mobile access markets drove strong results again as network operators globally look to manage rapidly growing data traffic and differentiate service offerings with new plans,” CEO Dave Caputo said in a news release.


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