Sierra Wireless has recorded its results for the second quarter ending June 30, 2017. All results are reported in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (GAAP), except as otherwise indicated.
In the second quarter of 2017, the company has delivered strong revenue and profitability growth on a year-over-year and sequential basis. It has continued to strengthen its position as one of the leaders in device-to-cloud solutions for the Internet of Things fueled by new product offerings and the acquisition of FlowThings, an innovative provider of platform services for data orchestration and rapid application development.
The revenue recorded for the second quarter of 2017 was $173.5 million, an increase of 11.1% compared to $156.2 million in the second quarter of 2016. Revenue from OEM Solutions was $144.5 million in the second quarter this year, up 9.0% compared to $132.6 million in the second quarter of 2016. Revenue from Enterprise Solutions was $21.7 million in the second quarter of 2017, up 30.7% compared to $16.6 million in the second quarter of 2016. Revenue from Cloud and Connectivity Services was $7.3 million in the second quarter of 2017, up 4.3% compared to $7.0 million in the second quarter of 2016.
According to GAAP RESULTS:
- Gross margin was $59.7 million, or 34.4% of revenue, in the second quarter of 2017, compared to $52.7 million, or 33.8% of revenue, in the second quarter of 2016.
- Operating expenses were $55.8 million and earnings from operations were $3.8 million in the second quarter of 2017, compared to operating expenses of $49.3 million and earnings from operations of $3.4 million in the second quarter of 2016.
- Net earnings were $6.6 million, or $0.20 per diluted share, in the second quarter of 2017, compared to net earnings of $0.7 million, or $0.02 diluted per share, in the second quarter of 2016.
According to the NON-GAAP RESULTS:
- Gross margin was 34.5% in the second quarter of 2017, compared to 33.8% in the second quarter of 2016.
- Operating expenses were $48.5 million and earnings from operations were $11.3 million in the second quarter of 2017, compared to operating expenses of $44.4 million and earnings from operations of $8.4 million in the second quarter of 2016.
- Net earnings were $9.7 million, or $0.30 per diluted share, in the second quarter of 2017, compared to net earnings of $6.4 million, or $0.20 per diluted share, in the second quarter of 2016.
- Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") were $14.8 million in the second quarter of 2017, compared to $12.1 million in the second quarter of 2016.
Acquisition
During the second quarter of 2017 Sierra Wireless also acquired the technology assets of Flow Search Corp. (“FlowThings”), a small start-up based in Brooklyn, New York. The assets acquired provide a data orchestration platform for rapid application development at the edge and in the cloud. The company believes this platform and the hiring of the FlowThings R&D team will help strengthen its Device-to-Cloud offering and accelerate time-to-market for our customers.
For the third quarter of 2017, it expects revenue to be in the range of $167 million to $175 million and non-GAAP earnings per share to be in the range of $0.17 to $0.25. This Non-GAAP guidance reflects current business indicators and expectations. Inherent in this guidance are risk factors that are described in greater detail in the regulatory filings. The actual results could differ materially from those presented. All figures are approximations based on management's current beliefs and assumptions.
Sierra Wireless also disclosed non-GAAP financial measures as it believes it provides useful information on actual operating performance and assist in comparisons from one period to another. Readers are cautioned that non-GAAP financial measures do not have any standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other companies. Non-GAAP gross margin excludes the impact of stock-based compensation expense and related social taxes and certain other nonrecurring costs or recoveries.
