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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates strong growth in connectivity, wireless, and storage accelerators, with a focus on infrastructure and optical growth. Although management avoided specific guidance, they highlighted significant opportunities in PON and data center markets. The Q&A section confirmed robust growth expectations and strategic diversification in manufacturing. Despite some challenges, the overall sentiment is positive, supported by strategic investments and market expansion. Considering the company's market cap, the stock is likely to experience a positive movement in the range of 2% to 8% over the next two weeks.
Q3 2025 Revenue $126.5 million, representing 16% sequential growth and 56% year-over-year growth. The growth was driven by strong performance in infrastructure, broadband, and connectivity markets.
Infrastructure Revenue Approximately $40 million, up 16% sequentially and 75% year-over-year. Growth attributed to new design wins and increased customer traction.
Broadband Revenue Approximately $58 million, up 80% year-over-year. Growth driven by early increases in service provider CapEx spending and strong demand for fiber PON and cable DOCSIS solutions.
Connectivity Revenue Approximately $19 million, up 50% year-over-year. Growth supported by adoption of Wi-Fi 7 and Ethernet solutions.
Industrial Multimarket Revenue Approximately $9 million. No specific year-over-year change or reasons mentioned.
GAAP Gross Margin 56.9% of revenue. The difference between GAAP and non-GAAP gross margin was due to $2.6 million of acquisition-related intangible asset amortization.
Non-GAAP Gross Margin 59.1% of revenue. The higher margin reflects adjustments excluding acquisition-related costs.
GAAP Operating Expenses $113.2 million. The high expenses were due to stock-based compensation, performance-based equity accruals, restructuring costs, and acquisition-related costs.
Non-GAAP Operating Expenses $59.5 million. Lower than GAAP due to exclusion of stock-based compensation and other one-time costs.
GAAP Losses from Operations 33% of net revenue. Losses driven by high operating expenses.
Non-GAAP Income from Operations 12% of net revenue. Reflects profitability after excluding one-time and non-cash expenses.
Net Cash Flow from Operating Activities Approximately $10.1 million. Positive cash flow indicates operational efficiency.
Cash, Cash Equivalents, and Restricted Cash Approximately $113 million at the end of Q3 2025. Indicates strong liquidity position.
Day Sales Outstanding (DSO) Approximately 39 days, showing improvement in cash collection efficiency.
Inventory Turns 1.8x, indicating improved inventory management.
Keystone PAM4 DSP family: Qualified at major data centers in the U.S. and Asia for 400-gig and 800-gig deployment starting 2026.
Rushmore family of PAM4 TIAs and 200 gigabit per lane DSPs: On track for production ramp in 2026, advancing DSP roadmap for emerging optical connectivity trends.
Sierra 5G wireless access single-chip radio SoC: Launched by 2 major North American telecom providers for 5G macro remote radio unit products, ramping through 2025 and 2026.
Panther 5 storage accelerator: Delivers ultra-low latency, 450 gigabits per second throughput, and PCIe Gen 5 connectivity, announced at FMS 2025 Storage Conference.
Single-chip integrated fiber PON and 10 gigabit processor gateway SoC: Ramping with a second major Tier 1 North American carrier.
High-speed data center optical interconnects: Expected revenue of $60-$70 million in 2025, with growth accelerating in 2026.
Broadband and connectivity: Broadband revenue up 80% year-on-year, connectivity up 50% year-on-year, driven by service provider CapEx spending.
Ethernet market: Adoption of 2.5 gigabit Ethernet switch and PHY portfolio growing in commercial, enterprise, and industrial applications.
Revenue growth: Q3 2025 revenue of $126.5 million, up 16% sequentially and 56% year-over-year.
Gross margin: GAAP gross margin at 56.9%, non-GAAP at 59.1%.
Cash flow: Net cash flow from operating activities was $10.1 million in Q3 2025.
Strategic investments: Focused on high-value markets like optical interconnects, wireless infrastructure, storage accelerators, and Ethernet.
Market positioning: Strong product traction with Tier 1 customers and partners, positioning for growth in 2026 and beyond.
FX volatility: The company expects FX volatility to be a primary risk in Q4 2025, which could impact non-GAAP interest and other expenses.
Seasonal moderation in broadband and connectivity: The company anticipates seasonal moderation in broadband and connectivity revenues in Q4 2025, which could affect overall revenue growth.
Restructuring costs: The company incurred $11.3 million in restructuring costs in Q3 2025, which could indicate challenges in optimizing operations or adapting to market conditions.
Acquisition-related costs: Acquisition-related costs of $9.6 million in Q3 2025 highlight potential challenges in integrating acquired assets or businesses.
Stock-based compensation and performance-based equity accruals: The company faced $32.5 million in stock-based compensation and performance-based equity accruals in Q3 2025, which could pressure operating expenses.
Carrier CapEx spending: The company’s growth in wireless infrastructure is tied to increases in carrier CapEx spending, which could be subject to delays or reductions, impacting demand.
DOCSIS 4.0 ramp: The initial commercial rollouts of DOCSIS 4.0 are led by smaller MSOs, and the ramp is expected to accelerate in 2026. Delays in adoption could impact related product revenues.
Inventory management: Gross inventory remained flat in Q3 2025, with inventory turns improving to 1.8x. Challenges in inventory management could affect cash flow and operational efficiency.
Revenue Guidance for Q4 2025: Expected revenue in the fourth quarter of 2025 to be between $130 million and $140 million.
Gross Margin Guidance for Q4 2025: GAAP gross margin expected to be approximately 56.0% to 59%, and non-GAAP gross margin expected to be in the range of 58% to 61% of revenue.
Operating Expenses for Q4 2025: GAAP operating expenses expected to be in the range of $92 million to $98 million, and non-GAAP operating expenses expected to be in the range of $57 million to $63 million.
Interest and Other Expense for Q4 2025: GAAP interest and other expense expected to be in the range of approximately $2.2 million to $2.8 million, and non-GAAP interest and other expense expected to be in the range of $1.9 million to $2.5 million.
Tax Provisions for Q4 2025: GAAP tax benefit expected to be $2.5 million, and non-GAAP tax provision expected to be approximately $2 million.
Share Count for Q4 2025: Basic and diluted share count expected to be approximately 87.5 million and 91.1 million, respectively.
Infrastructure Revenue Growth: Strong revenue acceleration expected in 2026 as new design wins begin to ramp across the portfolio.
Data Center Optical Interconnects: Revenue of $60 million to $70 million expected in 2025, with accelerating growth in 2026. Keystone PAM4 DSP family qualified for 400-gig and 800-gig deployment starting 2026.
Wireless Infrastructure: Increases in carrier CapEx spending expected to drive demand later in 2025 and throughout 2026. Sustained growth in 5G wireless access and backhaul projected for 2026 and beyond.
Broadband and Connectivity: DOCSIS 4.0 ramp expected to accelerate in 2026, driving content opportunities for Wi-Fi 7 and Ethernet solutions.
Ethernet Market: Continued growth expected as demand for higher data rates and increased bandwidth intensifies. 2.5 gigabit Ethernet positioned to bridge the gap between gigabit Ethernet and 10-gigabit Ethernet.
The selected topic was not discussed during the call.
The earnings call summary indicates strong growth in connectivity, wireless, and storage accelerators, with a focus on infrastructure and optical growth. Although management avoided specific guidance, they highlighted significant opportunities in PON and data center markets. The Q&A section confirmed robust growth expectations and strategic diversification in manufacturing. Despite some challenges, the overall sentiment is positive, supported by strategic investments and market expansion. Considering the company's market cap, the stock is likely to experience a positive movement in the range of 2% to 8% over the next two weeks.
The earnings call reveals strong financial performance with a 14% revenue increase and robust guidance for Q4 2024. Despite the lack of a share buyback program, the company is well-positioned in growing markets such as optical interconnects and wireless infrastructure. The Q&A highlights successful product launches and positive customer demand, particularly for the Swan Creek product line. Although there are some concerns regarding DSOs and management's unclear response about Amazon's agreements, the overall sentiment is positive due to strong growth prospects and market positioning.
The earnings call summary highlighted several concerns: a significant revenue decline, high operating expenses, and a GAAP loss from operations. The absence of shareholder return plans further dampens investor sentiment. Despite some optimistic future guidance and product developments, immediate financial performance issues and competitive pressures weigh heavily. The Q&A revealed cautious optimism but also highlighted uncertainties, particularly regarding China restrictions and unclear management responses. Given the company's small market cap, these factors are likely to lead to a negative stock price reaction in the next two weeks.
The earnings call summary and Q&A reveal mixed signals: a decline in total revenue, concerns over inventory and export restrictions, but also potential growth in PON and optical markets. The lack of shareholder return plans and unclear break-even points weigh negatively. However, the collaboration with Dell and expected growth in AI-related technologies and Ethernet markets offer positive prospects. The market cap suggests a moderate reaction, leading to a neutral prediction.
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