WATERLOO, Ont. – Broadband technology company Sandvine widened its first-quarter loss on a 7 percent decline in revenues, disappointing analysts who had expected revenues to be significantly higher than last year.
The company – which began reporting in U.S. dollars in December – said Wednesday it lost $2.7 million, or 2 cents per share, in its first quarter, widening a year-earlier loss of $500,000, or nil per share.
Revenues were $19.2 million, down from $20.7 million in the year-earlier period.
Last month, the company's shares tumbled more than 20 percent after it said its revenues would likely be in the range of $18 million to $19 million.
Average analyst estimates compiled by Thomson Reuters had been for revenue of $26 million.
Still, Sandvine said it won a total of 13 new service provider customers during the quarter.
About 59 percent of the company's revenues came from the DSL access market, 19 percent from the mobile access market and 22 percent from cable network operators.
About 71 percent of revenue came from outside North America, and about 64 percent was earned through resale partners.
Cash and cash equivalents fell to $16.6 million from $87.9 million a year earlier, while expenses rose to $16.3 million from $15 million a year ago.
Sandvine said it is focused on growing its fixed and mobile service provider customer base and the number of broadband subscribers they represent.
However, Sandvine warned that it faces intense competition in markets where there are typically several different competing technologies and rapid technological changes.
It also warned that future business could be affected by the recent earthquake and tsunami in Japan, as several of its suppliers source parts from the country. It is also used to generating a substantial level of revenue from sales in Japan.
Sandvine provides software and equipment to manage network traffic and services. The company has more than 200 service provider customers in more than 80 countries.
Separately, Sandvine detailed some of the uses to which Telefónica, a customer since 2008, is using Sandvine's Policy Traffic Switch (PTS) platform. Telefonica has systems in 20 countries.
In one use-case, Telefónica's UK subsidiary, O2, is helping reduce consumer bill shock, in compliance with the new European Union Data Roaming regulation, using Sandvine's Quota Management solution, the vendor said.
At another subsidiary, Telefónica recently introduced a menu of tiered pricing plans that accommodate subscribers' personalized network usage patterns and budgets. These plans were designed with the help of Sandvine's Business Intelligence solutions and are enforced in the network by Sandvine's Usage Management product. Under this model, subscribers can choose from plans that range from a basic e-mail or social networking plan to more comprehensive plans that also cover real-time entertainment usage.
"As a global company, Telefónica's network insight and business intelligence is key to understanding how we can better serve our vast subscriber base worldwide," said Vicente San Miguel, CTO of Telefónica Corporate. "Working with Sandvine since 2008 has brought us closer to understanding and acting on the needs of our customers, while improving revenue opportunities and the cost-effectiveness of our network.
– CED's Brian Santo contributed to this report