Bit Parts: 100G Driving Revenue Growth

Dan O'Shea
News Analysis
Dan O'Shea, Analyst, Heavyreading.com
2/6/2015



Several optical components suppliers have reported quarterly earnings recently, and the big theme across all of them is that 100G demand is providing a major revenue boost and painting bright near-term outlooks.

Macom Technology Solutions Inc.
M/A-COM Technology Solutions Inc. reported fiscal first-quarter revenue of $114.9 million. Within that figure, revenue from 100G optical products was up 35%, despite presumed seasonally soft activity throughout the sector.

John Croteau, president and CEO of Macom, said during the company's earnings call this week, "data center is going to be a key driver of optical growth," adding that optical-related revenue grew from 28% of Macom's total revenue in the previous quarter to about 30% in the fiscal first quarter. "Growth on top of that 30% will be a real kicker for us," he said.

Croteau also noted that Macom's recent acquisition of BinOptics will be key to spurring some of that growth. That deal closed in December, and contributed just over $2 million to Macom's revenue during the final two weeks of the quarter. The 100G enthusiasm has inspired Macom to issue a pretty rosy outlook for its fiscal second quarter -- revenue growth in the range of $120 million to $124 million.

Macom also announced this week that it is selling a chunk of stock to generate close to $128 million that will be used for general corporate purposes and to pay back some of its revolving credit facility. (See MACOM to Net $127.8M From Stock Offer.)


Want to read more about optical components? Then check out our dedicated components content channel here on Light Reading.


Oclaro Inc.
Oclaro Inc. (Nasdaq: OCLR) by the numbers, had a middling fiscal second quarter of 2015, according to company results posted this week. Revenue was down to $86.3 million from more than $89 million in the previous quarter. However, the company's recent sale of its industrial and consumer business, and the revenue it contributed in previous quarters was the difference maker; revenue was otherwise up across the board.

Like Macom, Oclaro saw its biggest boost in 100G, with revenue from those products for the first time beating revenue derived from 10G products. 100G revenue was about $33.7 million, compared to $32 million for 10G and lower transmission rate products. The 100G segment represented about 39% of Oclaro's total revenue last quarter.

JDSU
JDSU (Nasdaq: JDSU; Toronto: JDU), still moving toward a spin-off of its Communications and Commercial Optical Products group, also recently reported its fiscal second-quarter results. While the company's overall optical revenue has declined, JDSU's revenue from 40G and 100G product in particular increased about 30% compared to the same quarter a year ago. (See JDSU Reports Fiscal Q2 and JDSU to Split in Two.)

Dan O'Shea, Managing Editor, Light Reading

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