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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: peter grossman who wrote (7407)	3/5/2000 12:18:00 PM
From: peter grossman	Read Replies (1) \| Respond to of 10309

This $1B revenue projection has caused a lot of confusion. And it has been WIND management's fault because they have used different time periods. It's as if they thought noone would back out the CAGR and compare it to the 30% figure they say they feel comfortable with. The first time the $1b figure was mentioned was not recently, but by Jerry Fiddler in CC one or two quarters ago. Analysts scoffed at it then, only to be disproven because of the INTS acquisition. It seems apparent that more acquisitions are on the way, that market share and revenues are the top goals, but that earnings will not be forgotten. The old WIND had high revenue growth and higher earnings growth. The new WIND will have high earnings growth and higher revenue growth. My guess is that it will be much higher than 30%, but it would be foolish to guide higher. The $1B figure can be viewed as consistent with 30% growth if it doesn't include M&A activity. The really important question, I believe, is: when will royalties ramp up in large volume design wins to bolster earnings while market share grows to dominate an exploding space? I2O is the first blockbuster design win arena, but royalties have lagged expectations. This doesn't mean they won't yet explode, but it does mean they won't be as lofty a percentage of earnings as they would have been. When St, Dennis first came on board, I recall him intimating that WIND had poor revenue and royalty forecasting systems in place. During this call, he mentioned that going forward WIND would report new metrics to monitor growth. These include not only design wins, and projected growth for 32 bit chips, but also royalty metrics of some unmentioned type. As a long term investor, heavily invested in WIND, I very much welcome this.