Commenting on first quarter results, Scott Grout, RadiSys President and CEO stated, “I am very pleased with our results and progress in the first quarter. We came in at the upper end of our revenue range and exceeded our expectations on earnings. We continued to expand our Next Generation revenues reaching over $30 million, our highest levels yet for shipments of these products. With a solid start to 2010, we believe that we are on track to grow our Next Generation business by 20 to 30% this year. We announced a number of important new products in the quarter including several new 10/40 gigabit ATCA offerings and a new media server based mobile video solution. We also announced our acquisition of Pactolus Communications, a maker of next-generation IP solutions for converged VoIP networks. The Pactolus products will further strengthen our higher value, software-based solutions while leveraging our existing portfolio of communications networking products. In addition, we had a very strong quarter for design wins with both existing and new customers in growth applications including LTE, Voice Quality Enhancement (VQE), Femtocell, WiMAX and defense communications.”
First Quarter Business Highlights
- In March, the Company acquired the assets of privately-held Pactolus Communications Software Corporation, a maker of next-generation IP communications solutions for converged TDM/IP and SIP enabled VoIP networks. Pactolus software is used in operator-assisted and reservationless conferencing, prepaid/post-paid long distance services and is installed in over 45 telecommunications service provider customers worldwide. The Company expects the acquisition to be accretive to non-GAAP EPS and operating cash flow by the third quarter of 2010.
The Company announced its new Integrated Mobile Media Server (IMMS), which enhances Mobile Service Providers’ ability to grow new revenues from the explosion of 3G mobile video services and emerging 4G LTE deployments. The RadiSys IMMS is expected to increase service provider revenues and reduce their cost of deployment for 3G and 4G/LTE mobile video services.
The Company was again named the market leader in media servers for the sixth consecutive year by Infonetics Research. RadiSys’ media servers captured 60 percent of the total fourth quarter 2009 market and 57 percent for the full year 2009, which is an 8 and 10 percent gain respectively from 2008.
- The Company was awarded its first VoIP VQE win with a North American Tier 1 service provider. This was an important win for the Company as it expands the Company’s market for media server products to now include VQE. In addition, the Company won new media server business in applications including announcements, IVR and conferencing.
The RadiSys 40G ATCA platform was named as a recipient of the 2009 Product of the Year Award by Technology Marketing Corporation’s Internet Telephony magazine.
The Company announced three new ATCA products that offer customers increased choice and flexibility in 10/40 gigabit processing power. These new products provide significant performance increases and improved energy efficiency over previous processing technology and target applications for the communications and military/aerospace markets.
The Company was awarded new ATCA system business in LTE, WiMAX, Femtocell Gateway, WLAN and satellite communication applications. The LTE win was of notable size with a Tier 1 Telecom Equipment Manufacturer (TEM) in Asia. The WiMAX win was with a new customer for an Access Service Network (ASN) gateway project in India.
- The Company reached several significant deployment milestones with its ATCA customers in the quarter. A customer’s Femtocell deployment in North America is now planned to occur sooner than expected. A global Tier 1 TEM customer is in customer trials with RadiSys ATCA solutions. In addition, a satellite communications deployment using RadiSys ATCA solutions is currently scheduled for the second quarter.
Radisys Corp. (Nasdaq: RSYS)