Sandvine Reports Full Year

Deep packet inspection specialist Sandvine reports its Q4 and fiscal year 2009 results

January 14, 2010

3 Min Read

WATERLOO, Ontario -– Sandvine Corporation, (TSX:SVC; AIM:SAND) a leading provider of intelligent broadband network solutions for DSL, cable, FTTx, fixed wireless and mobile operators, today reported fourth quarter 2009 revenue of $19.0 million. Revenue was 19% higher than in Q3 2009 and 2% higher than in Q4 2008. Fiscal year 2009 revenue was $68.8 million, 35% higher than revenue of $51.1 million reported for fiscal year 2008.

“This was a solid quarter for Sandvine. We reported record revenue from the DSL market and had another good quarter in the wireless market. All of our sales regions globally continue to contribute meaningfully to our business,” said Dave Caputo, president and chief executive officer.

Sandvine’s strategy has largely focused on expanding its business with mobile and DSL service providers, increasing sales through reseller channels and extending the Company’s reach outside North America and through reseller channels. For fiscal 2009, revenue from the DSL and mobile markets combined grew by more than 80%, while revenue outside North America grew by more than 60%, as did revenue from reseller partners.

“Sandvine’s annual revenue from mobile service providers was over four times higher than in fiscal 2008. Our revenue from our AsiaPacific sales region almost tripled over the previous year, and revenue from our core North American region also grew,” said Caputo.

Despite revenue growth in Q4 2009, the GAAP net loss increased over the previous quarter as a result of an increase of $1.7 million in non-cash stock-based compensation expense. This increase related to the surrender and cancellation of certain stock options as reported in our December 1, 2009 news release. Compared to Q4 2008, the GAAP net loss increased as a result of higher stock-based compensation expense and a lower gross margin. The lower gross margin resulted from a change in product mix due to lower stand alone software sales as compared to Q4 2008.

Despite higher cash operating expenses in the quarter, on a non-GAAP1 basis Sandvine’s net loss improved over Q3 2009. This improvement related to the revenue growth experienced during the quarter. Compared to Q4 2008, the non-GAAP1 net loss increased, largely due to the higher gross margin experienced in Q4 2008. A reconciliation of GAAP to non-GAAP1 results is included as Table 1.

The Company’s cash and marketable securities at November 30, 2009 totaled $85.8 million.

Sandvine’s fiscal 2009 non-GAAP1 net loss was $10.5 million, or 0.077 per diluted share, (GAAP basis: $19.5 million, or 0.144 per diluted share) compared to $13.7 million, or 0.100 per diluted share for fiscal 2008 (GAAP basis: $19.6 million, or 0.144 per diluted share).

Sandvine is focused on growing its fixed and mobile service provider customer base and the number of broadband subscribers they represent. The Company has over 180 service provider customers in over 70 countries. Together these customers serve more than 80 million fixed line broadband subscribers and more than 200 million mobile subscribers, a rapidly growing number of whom use data services.

In the fourth quarter of 2009 Sandvine won eight new customers.

  • By access technology: six wireless operators and two DSL service providers.

  • By geography: three from Asia-Pacific, three from North America and one each from the Caribbean and Latin America, and EMEA. Sandvine made initial sales to customers in two new countries.

  • Sales channel: two customers were won through reseller partners, including one that was won through a strategic relationship with a global network equipment vendor.

    Sandvine Inc.

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