Sumit Kumar, Vecima’s President and Chief Executive Officer
VICTORIA – Vecima Networks Inc. (TSX: VCM) reported financial results for the three months ending September 30, 2023.
“Vecima performed well in the first quarter as we achieved positive operating results and generated year-over-year revenue growth in our Content Delivery and Storage and Telematics segments, while weathering the anticipated temporary slowdown in Entra distributed access architecture (DAA) product deliveries,” said Sumit Kumar, Vecima’s President and Chief Executive Officer.
“As we noted in our fourth quarter report, we successfully managed major constraints in the supply chain during fiscal 2023 to fulfill strong DAA deliveries in support of our customers’ ongoing major network upgrade projects. Correspondingly, customers have now temporarily shifted from building up their product pipelines to managing their DAA rollout logistics, expanding field deployment activity, and working through existing inventories. We anticipate renewed Entra sales growth in the second half of fiscal 2024 as customers bring inventories into balance while initiating new programs and deployments alike. These encompass additional DAA launches and project ramp-ups with key customers, including a major ERM3 rollout to support a Tier 1 customer’s network evolution to 10G.”
“In our Content Delivery and Storage segment, first quarter sales grew 43% to $15.7 million, reflecting both the growing base of customers for our IPTV solutions and expansions with a number of these customers during the period. Paired with strong gross margin performance of 58.5%, our CDS segment enjoyed an excellent start to fiscal 2024,” added Mr. Kumar.
“Operationally, we continued to focus on tightly managing the business to achieve efficiently lower operating expenses while continuing to advance our technologies and industry leadership with robust R&D investment. We ended the first quarter in a strong financial position, with an unparalleled portfolio of next-generation solutions, a veritable war chest of customer program-aligned DAA product inventory, and a growing base of customers that are effecting a widescale migration to next-generation networks globally using our products. While the timing of our customers’ rollouts may naturally vary, we see multiple pathways for growth coalescing as the year progresses and translating into the next wave of revenue momentum in the latter half of fiscal 2024,” said Mr. Kumar.
BUSINESS HIGHLIGHTS
Financial and Corporate
- First quarter revenue of $61.5 million as compared to $73.4 million in Q1 fiscal 2023.
- Achieved gross profit of $28.8 million, as compared to $33.7 million in Q1 fiscal 2023.
- Gross margin and adjusted gross margin increased to 46.9% and 47.9%, respectively, from 45.9% in the prior-year period.
- Adjusted EBITDA was $8.1 million, as compared to $17.2 million in Q1 fiscal 2023.
- EPS and Adjusted EPS were $0.07 and $0.09 per share, respectively, as compared to EPS and Adjusted EPS of $0.41 per share in Q1 fiscal 2023.
- Ended the first quarter in strong financial position with working capital of $79.0 million at September 30, 2023, compared to $83.7 million at June 30, 2023.
Original Source and full report here
