Radisys’ Q3 revenue dips to $29m

Radisys reported Q3 consolidated revenue of $28.8 million, above the midpoint of the company’s prior guidance range of $26 to $30 million, and down from $55 million for the same period last year.

GAAP loss per share was $0.39, and non-GAAP loss per share was $0.28. Included in both GAAP and non-GAAP loss per share was an expected inventory charge of approximately $7.0 million associated largely with legacy embedded products, which increased the loss by $0.18 per share;

“Our third quarter results were in-line with the expectations we outlined in early August, with both revenue and operating results being at or above the midpoint of our expectations,” said Brian Bronson, Radisys President and Chief Executive Officer. “Importantly, we made tangible progress in the third quarter towards converting proof-of-concepts into commercial wins as evidenced by the two new MediaEngine VoLTE wins as well as our first commercial award for deployment of our new FlowEngine appliance, the TDE-2000. Further, within MobilityEngine we continue to advance forward towards trials with two Tier 1 service providers tied to initial CORD deployments.

“As we navigate limited visibility for sizable DCEngine commercial orders, we are implementing a revised go-to-market strategy that will allow us to refine our cost structure while ensuring our ability to support our ongoing engagements with prospective customers. Importantly, outside of DCEngine the new wins we secured during the third quarter demonstrate tangible evidence of our ability to commercialize the pipeline of engagements across our Software-Systems offerings. Acknowledging the timing of incremental commercial wins is difficult to predict, our focus remains on advancing our funnel of prospective and existing customer opportunities, maximizing our cash resources, and taking the necessary actions to return the Company to non-GAAP profitability and positive operating cash flow.”

Some highlights:

• awarded first commercial win for FlowEngine TDE-2000 with a strategic channel partner for initial deployment with a European service provider beginning in the fourth quarter;
• secured two new Tier 1 service provider wins in the U.S. and India through channel partners for multi-year VoLTE deployments; and
• Closed agreement with global contract manufacturer to streamline supply chain and drive meaningful cost synergies beginning in 2018.
• Software-Systems revenue was $11.3 million, compared to $11.5 million in the prior quarter and $10.4 million in the third quarter of 2016. The sequential decline was the result of timing of professional services programs, which we expect to benefit from in the fourth quarter of 2017.
• Hardware Solutions revenue was $17.5 million, compared to $23.6 million in the prior quarter and $45.0 million in the third quarter of 2016. The sequential decline reflects an expected discontinuance in new DCEngine orders from the Company’s tier one U.S. customer.