My takeaway from today's earnings announcement/conference call:
KDDI the only 10% customer with the top 5 accounting for most of the revenue. A total of 54 customers, indicating that there is no broad base of steady customers yet in existence. International sales were 54% of all sales, suggesting that KDDI was an enormous contributor to the top line.
Major US carriers still a small part of revenue. Verizon mentioned, but almost teasingly. No word about Sprint, though indications are that it will affect top line sooner or later. Yet Sonus is "working" with the top 4 of 5 global carriers, though the extent and scope of the work seems to be a highly guarded secret.
While deferred revenue dropped significantly, guidance was raised despite the baffling drop in book-to-revenue ratio. On the other hand, SONS is hiring like crazy so the long term is probably still good.
Cash and equivalents growing nicely.
The options issue still overhangs the price per share, and there is no telling how it will be resolved. We know there will be material restatements for 2000-2003, which will hit hard when announced because they are, well, material.
In short, a lot of conflicting data. There is plenty for both the bulls and the bears to point to in support of their positions. The shares IMO are likely to be range-bound in the 5.00-5.50 trading range for at least six months, with spikes up as new deals are (hopefully) announced and spikes down related to the resolution of the options problem. I cannot guess how the option issue will get resolved, but can only point to the fact that it is "material."
If you are LTBH, you may consider the next 6 months a dead money period or an opportunity to accumulate on the cheap. |
