Acacia (ACIA) Beats On Q3 Earnings, Revenues Increase Y/Y
Zacks Investment Research | Nov 11, 2016 03:26AM ET
Acacia Communications Inc. (NASDAQ:ACIA) reported third-quarter 2016 non-GAAP earnings (including stock-based compensation) of 86 cents that comfortably beat the Zacks Consensus Estimate by 16 cents and was well ahead of the 28 cents reported in the year-ago quarter.
Acacia reported revenues of $135.3 million, up a massive 106.8% year over year and ahead of the Zacks Consensus Estimate of $132 million. The solid growth was driven by increasing demand for the company’s products in the data-center interconnect (DCI) market.
Acacia continues to penetrate the rapidly growing DCI market, which is anticipated to grow at a CAGR of 32% over 2015-2020 as per data from ACG Research.
Further, the company noted Facebook’s recent announcement that it used Acacia’s AC400 product in developing Open Packet dense wavelength division multiplexing (DWDM) technology.
Metro market growth continues to be driven by continuing broadband investment in China (as part of the government’s broadband initiative) and the U.S. carriers, who are now focused on upgrading their metro network. The company expects further growth in China as carriers’ transition from back-bone and provincial back-bone networks to provincial metro and axis networks in 2017.
The continuing investment will drive strong demand for Acacia’s CFP-DCO product is expected to drive top-line growth. Additionally, the company is expected to benefit from higher demand of its products in the long-haul market.
During the 12-months ending in third-quarter, the company’s customer base expanded from eight in 2011 to 25. In the reported quarter, revenues from these newer customers surged 37% sequentially as compared to 11% from original eight customers.
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