CC notes:
- First a review, Revenue was a record $64.4M, DR also went up $13.3M, with Current DR up to $89.1M from $73.2M. Gross Margins increased, they said Operating Margins were close to their LT goal of 17-20%. A voluntary options review has delayed the full report, including net income, which is clearly up due to the Operating Margins.
- The options review was not prompted by any regulatory agency.
- Book-To-Revenue was above 1.
- One Tier1 NA wireline carrier added over 1B additional minutes to their Sonus IP Network in Q2.
- Orders were strong in NA, with expansions at existing customers AND new networks contributing. Europe led international orders.
- Japanese deployments will be ACCELERATING in H22006 and into 2007.
- Hassan said both wireless and wireline operators are seeing an accelerating urgency to move to IP based networks.
- H206 will be 10% above H106, so they are guiding to at least $137M in H2, $260M for the year. Well over 30% growth in 2006.
- DT is in deployment. KDDI deployment well underway. Some of this business, along with Carphone, has made it into DR but none is in revenue yet.
- MOT began reselling the GSX4000 in Q2. In the Q&A, Goldman indicated MOT has SHUT DOWN their R&D in the area they are working with Sonus and went exclusively with Sonus. Hassan did not dispute this.
- The options review will be much more limited than their (recent) major accounting review.
- 63 customers contributed to revenue in Q2 vs. 51 in Q1. Cingular was the only 10%er, but the top5 customers represented 80% of revenue, so Cingular was at least 40%.
- Employees at 784, up from 761 in Q1.
- The "Shipped, Billed, but not in DR" figure went from 15.2M down to 8.3M.
- International revenue was only 5% in Q2, so all that business is not yet reflected in their results.
- They expect G&A to continue to come down as a % of revenue even with the new options review.
- Confirmed they are replacing some of their large competitors' equipment in some accounts due to failure to perform.
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