Sandvine Provides Q3 2014 Revenue Estimate
Waterloo, Canada; September 9, 2014 – Sandvine, (TSX:SVC) a leading provider of intelligent network policy control solutions for fixed and mobile operators, today announced that it expects revenue for its third quarter to be between $27.5 and $28.0 million. All estimates are in U.S. dollars under International Financial Reporting Standards (IFRS).
“Our results this quarter highlight the challenges related to the timing of closing larger opportunities. There were a couple opportunities that we expected to close in the quarter that did not materialize as quickly as expected, which is disappointing, but we do anticipate closing them in Q4,” said Dave Caputo, President and Chief Executive Officer, Sandvine. “We continue to be very excited about Sandvine’s prospects in 2014 and believe that the market will continue to grow.”
Also announced separately today:
- Sandvine’s Board of Directors has approved a plan to enter into a normal course issuer bid for the purchase of up to approximately 13.9 million Sandvine common shares, subject to obtaining requisite regulatory approvals.
- During its third quarter the company won over $5 million in follow-on orders from a Tier-1 carrier in CALA. Revenue recognition commenced in Q3 2014.
The Company will hold a conference call for investors at 8:30 a.m. Eastern time today.
Toll-free North America: (866)-215-5508 | Confirmation Number: 38046870
A replay of the call will be available at: (888)-843-7419 (passcode 38046870#) from 11:00 a.m. ET today through September 19, 2014.
Sandvine’s network policy control solutions add intelligence to fixed, mobile and converged communications service provider networks to enable services that can increase revenue and reduce network costs. Powered by Sandvine’s Policy Engine and SandScript policy language, Sandvine’s networking equipment provides end-to-end policy control functions including traffic classification, and policy decision and enforcement across the data, control and business planes. Sandvine’s products provide actionable business insight, the ability to deploy new subscriber services and tools to optimize traffic while enhancing subscriber Internet quality of experience.
Sandvine’s network policy control solutions are deployed in more than 250 networks in over 90 countries, serving hundreds of millions of data subscribers worldwide, www.sandvine.com.
+1 519 880 2400 ext. 3503
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CAUTION REGARDING FORWARD LOOKING INFORMATION
Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements related to Sandvine’s projected revenues, earnings, growth rates, revenue mix and product plans are forward-looking statements as are any statements relating to future events, conditions or circumstances. The use of terms such as “may”, “anticipated”, “expected”, “projected”, “targeting”, “estimate”, “intend” and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance, achievements or developments of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.
Many factors could cause the actual results of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, each of the following factors, and those factors which are further discussed in the Company’s Annual Information Form (“AIF”), a copy of which is available on SEDAR at www.sedar.com.
- The results discussed in this release are preliminary and remain subject to ongoing review by Sandvine’s auditors and final approval by Sandvine’s Audit Committee and Board of Directors;
- The forecasted demand or opportunity with any particular customer is subject to change and is not in any way guaranteed or committed and the ultimate timing of receipt of any orders from any such customer is uncertain as is the timing of when any such order may translate to revenue for the Company;
- The Company’s revenues may fluctuate from quarter to quarter and year to year depending upon sales cycles, customer demand and the timing of customer purchase decisions;
- The Company’s gross margins may fluctuate from period to period depending upon a variety of factors including product mix in the quarter, competitive pricing pressures and the level of sales generated through indirect channels;
- The Company is dependent upon and expects to continue to derive a large percentage of its revenue from both a small number of key customers and key reseller partners, none of whom are bound to any fixed purchase commitment or exclusivity obligations and could change their buying patterns and/or source of supply at any time, which could have a material impact on the Company’s revenues. In addition, the Company extends credit to its customers and resellers by virtue of agreed upon payment terms and could be exposed to collection risk on its receivables particularly if any key customer or key reseller were to face financial challenges. The Company’s reseller partners may also offer their own products which are competitive with the Company’s products;
- By selling its products in certain markets through resellers, the Company is able to avoid certain costs relating to operating in those markets including but not limited to local support costs, costs of maintaining a local legal entity, administration costs, and logistics. Should the Company chose or be required to sell direct in these markets (due to customer preference, termination of a reseller relationship or other reasons) the cost advantages described will no longer be available to the Company which could results in an increase in operating costs;
- The Company faces intense competition in markets where there are typically several different competing technologies and rapid technological changes. The Company faces the risk of the emergence of new technologies and new approaches to network architecture that may be either competitive to those of the Company or that change the requirements of the Company’s customers for solutions such as those offered by the Company. If the Company is unable to adapt to its offerings in response to these trends it could have a material impact on the ability of the Company to market its solutions;
- The Company’s growth is dependent on the development of the market for network policy control solutions and the decisions of the Company’s target customers to deploy and further invest in those technologies, which decisions may be impacted upon by changing requirements in the area of broadband network management policies and/or changes in the regulatory framework to which the Company’s customers may be subject. In particular, numerous telecommunications legislators and regulators in various jurisdictions have considered or are considering what, if any, regulations might be appropriate with respect to how internet service providers manage the impact of different types of traffic on their networks. These ongoing processes may cause uncertainty in the network investment decisions of the Company’s target customers, and any new rules or regulations that result from these considerations may impact the demand for the Company’s products within various markets, including markets that may not be considering any new regulation but where the Company’s customers may look to other markets for future guidance or trends;
- The Company is dependent on certain third party sub-assembly manufacturers in its supply chain and any disruption in the operations or quality of those suppliers or any increase in expected lead times from those suppliers could result in lost or delayed revenue and/or reduced profits;
- The majority of the Company’s operating expenses are denominated in Canadian dollars, U.S. dollars, and Indian rupees. The Company’s earnings are impacted by fluctuations in the exchange rates between the U.S. dollar and these currencies;
- The Company operates in various jurisdictions throughout the world and generates revenues through its international sales efforts. The Company’s financial results may be impacted by political and economic developments of a particular country or geography, including but not limited to the economic and political climate in Argentina. If the current economic and/or political climate in Argentina continues or deteriorates it may negatively impact the Company’s financial results including the ultimate collection of outstanding receivables.