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Technology Stocks : AWARE -- Ignore unavailable to you. Want to Upgrade?

To: Peace who wrote (444)	7/27/2000 12:47:03 AM
From: Bobo	Read Replies (2) \| Respond to of 2404

First the facts. Q2 Q3 Q4 Q1 GSPN $10 $17 21 31 Seq Growth +70% +24 +48 EFNT $8 12 26 61 +50% +108% 135% AWRE $1.3 1.9 2.6 2.8 (w/ one +46% +37 +6 Q lag- royalty only) So now the tough questions... How can Aware's revenue decelerate each Q while other pure play DSL company's are accelerating growth? Why would no analysts on the Aware conference call ask directly about the royalty number and decelerating growth and why would management not explain it? That is really weird and clearly not a sign of high integrity. Let's say that Aware lost as much as $400k from Lucent during the Q. The sequential growth in royalties would still be something less than 25% and continue the trend of decelerating growth. Is this a problem? Aware had total royalty revenue of $2.7 in Q2. Mr Stockdon says that mgt has guided the street to 27% sequential growth from Q2 to Q3 which is $760. The Robbie Stephens model takes total revenue from $7.2mm to $8.0, suggesting that most of the increase is from royalties (of course they do not break it out so I wonder how Stockdon is so insightful). Why does the Robbies Stephens model take GM from 97% to 94%? Seems like GM % would go up if all the rev increase was royalties (100% GM). Globespan will likely report something like 75% sequential growth for Q2. I think they report next week. If almost all of Aware's royalty revenue is from ADI and it goes up 27% sequentially next quarter like Stockdon suggests, isn't ADI losing dramatic market share? What makes Aware mgt feel (as Stockdon suggests) that royalty revenue will accelerate in growth from Q3 to Q4 (to 37%)when growth has not accelerated in the last 4 Q's and mgt does not even know that number yet? And why does the Robbie Stephens model only take revenue up $800k from Q3 to Q4 when 37% growth in royalty from $3.5mm in Q3 is $1.3mm? That doesn't seem to reconcile with the guidance that Stockdon suggests. If ADI is going to ship 12mm chipsets this year (as Stockdon suggests) and they shipped about 1mm or so (assuming a 10% royalty for Aware) in Q1, why would guidance only be for a $800k seq increase in royalty revenue for Aware from Q2 to Q3? This $800k increase suggests about 40k chipsets and would put ADI at slightly more than 1mm chipsets through 2 Q's of 2000. This would mean that ADI would have to ship 10mm in Q3 and Q4. Seems like an unlikely ramp doesn't it? I guess we would go from 1.1mm chipsets in Q2 to 5mm in Q3. Since we know that ADI has squat for domestic presence (in Alcatel and Cisco equipment), who in the hell would eat that many chipsets in one Q?