Wednesday, May 27, 2020

650 Group: Ethernet switch market dropped 10% YoY in Q1

The Ethernet Switch Market declined nearly 10% Y/Y on weak campus and data center results in 1Q20, declining to approximately $7 billion, according to a newly released report from 650 Group. The report also indicated significant regional differences amongst vendors, as well as aggressive ASP fluctuations in the market.

“The Ethernet Switch market contracted in the expected regions and verticals in 1Q20,” said Alan Weckel, Founder and Technology Analyst at 650 Group. “Supply chain constraints in factories and components remain entering the last month of 2Q20. Certain component shortages will remain well into 2021 as vendors prioritize customers and products throughout the year.  Our vertical analysis of the campus and data center Ethernet switching markets indicates a different recovery rate and use of technology as the market begins to rebound in 2H20.  Digital transformation and the use of cloud platforms will be critical to companies going forward, especially as the digital divide increases across regions and customers.”

The 650 Group Quarterly Ethernet Switch report also indicates what impact the trade war is having on campus suppliers and the surge in 25 Gbps port shipments from H3C and Huawei.
The report highlights how campus Ethernet switching outperformed data center switching with new products from Arista, Cisco, Extreme Networks, and Juniper all ramping during the quarter.

GTT announces resignation of its CEO

Richard D. Calder will step down as president and CEO of GTT, effective on June 1, 2020.

“We appreciate the many accomplishments Rick has achieved since joining GTT as CEO in May 2007 over 13 years ago,” stated H. Brian Thompson, GTT executive chairman. “We have initiated an executive search for a new CEO to lead GTT moving forward.”

GTT is conducting a search for a replacement. In the interim, the company will be led by a group made up of several top executives, including chief financial officer Steven Berns, chief revenue officer Ernie Ortega, general counsel Chris McKee and senior vice president of operations and engineering Bob Burris.

GTT completes acquisition of KPN International

GTT Communications completed its previously announced acquisition of KPN International, which operates a global IP network serving enterprise and carrier clients. GTT paid approximately €50 million in cash, on a cash and debt-free basis.

The acquisition adds more than 400 strategic enterprise and carrier clients. GTT will also be the preferred international network supplier for several hundred additional clients retained by KPN.

GTT said the purchase adds to its portfolio of cloud networking services with wide area networking, internet and transport services, and adds depth to its global Tier 1 IP network in Europe across 21 countries.

GTT looks to sell subsea cables and European fiber network

GTT Communications has retained Credit Suisse and Goldman Sachs as financial advisors in connection with the potential sale of the Infrastructure Division, which includes its terrestrial pan-European fiber network, subsea transatlantic fiber and data centers. This infrastructure was part of GTT's acquisition of Interoute and of Hibernia.

Sparkle activates PoP in Salvador, Brazil

Sparkle activated a new Point of Presence (PoP) in Salvador, Brazil. This adds to the ten existing points of presence in the country – in Sao Paulo, Rio De Janeiro and Fortaleza – strengthening the performance of Sparkle’s global IP Transit service Seabone by lowering latency and improving traffic routing capabilities within Brazil and across the Americas.

The PoP in Salvador is fully integrated with Sparkle’s global Tier-1 IP transit backbone Seabone boasting extensive coverage in Central and South America with points of presence in nine countries: Argentina, Brazil, Bolivia, Chile, Colombia, Panama, Peru, Puerto Rico and Venezuela. In addition, thanks to its terrestrial and submarine networks, that include the new generation Seabras-1 cable in the Atlantic and Curie in the Pacific, Sparkle offers four diversified routes for connectivity from South to North America ensuring complete redundancy and a top quality data experience.

In the next few months Sparkle will open a PoP also in Porto Alegre, country’s South-East region, to further expand its network capillarity in Brazil and consolidate its positioning as one of the main providers in the Americas and as first Tier-1 backbone in Latam.

Sparkle adds fiber pair on Google’s Curie US-Chile cable

TI Sparkle will gain access to a fiber pair on Google's new Curie submarine cable system connecting Los Angeles to Valparaiso, Chile.

The new fiber pair on Curie will be fully integrated with Sparkle’s global backbone, increasing redundancy and offering a fourth diversified route to directly connect South and North America, complementing its 2017 addition of the Seabras-1 cable in the Atlantic.

Sparkle said its newest highways, Curie in the Pacific and Seabras-1 in the Atlantic, position it as the best-in-class choice for OTTs, ISPs, enterprises, Content/Application Providers and Asian players looking for global connectivity through its City2City transport service and its global Tier-1, Seabone IP transit service.

Semtech posts quarterly sales of $133 million

Semtech Corporation reported Q1 FY2021 net sales of $132.7 million. GAAP EPS amounted $0.15 and non-GAAP EPS was $0.35.

Highlights for the First Fiscal Quarter 2021
  • Net bookings grew 22% sequentially led by record bookings for LoRa-enabled, 100G data center CDRs and broad-based Protection devices
  • Distributor Point of Sale (POS) increased 5% sequentially and represented a new quarterly record
  • Cash flow from operations was $26.1 million or 20% of net sales
  • Repurchased approximately 855,000 shares for $30.0 million during Q1 FY2021
Mohan Maheswaran, Semtech’s President and Chief Executive Officer, stated, “We are pleased with our strong Q1 results and execution, despite the unexpected disruptions from COVID-19. Our secular growth drivers in the IoT, hyperscale data center, and mobility markets remain intact as evidenced by our record quarterly POS results and strong sequential and year-over-year bookings growth. While we are not immune from macroeconomic headwinds, we believe the greater demands being placed on the global communications infrastructure with the shift to work-from-home and the increasing use of long range sensing platforms, should benefit our targeted markets including the data center, PON, 5G wireless and IoT markets.”

Nutanix posts quarterly sales of $318 million, up 11%

Nutanix reported revenue of $318.3 million for its third quarter of fiscal 2020, ended April 30, 2020, up 11% year-over-year from $287.6 million in the third quarter of fiscal 2019. GAAP gross margin was 77.3%, up from 73.9% in the third quarter of fiscal 2019. GAAP net loss was $240.7 million, compared to a GAAP net loss of $209.8 million in the third quarter of fiscal 2019; non-GAAP net loss was $135.2 million, compared to a non-GAAP net loss of $103.0 million in the third quarter of fiscal 2019.

“We are pleased to have delivered a solid quarter, particularly in light of the global uncertainty caused by the COVID-19 pandemic,” said Dheeraj Pandey, Chairman, Co-Founder and CEO of Nutanix. “We are delighted to be in a position to support our customers with mission-critical solutions as they navigate the rapidly changing landscape of the future of work. Our near-term focus is on thoughtful cash and expense management, while proactively preparing to emerge from this time with the ability to drive long-term growth and scale our business with the market.”

“By adapting quickly to a changing work environment, we were able to meet or exceed our anticipated third quarter results despite the challenging macroeconomic conditions,” said Duston Williams, CFO of Nutanix. “We have also taken proactive measures to manage our operating expenses, which will help meaningfully decrease our cash usage from here and enhance our financial flexibility going forward. While the duration and impact of the pandemic remain uncertain, we are confident that Nutanix is well-positioned to manage the business through this period and will emerge a stronger company with the help of our subscription transition.”

Some highlights:
  • Billings: $383.5 million, up 11% year-over-year from $346.0 million in the third quarter of fiscal 20191
  • Software and Support (TCV)2 Revenue: $314.5 million, up 18% year-over-year from $265.8 million in the third quarter of fiscal 2019
  • Software and Support (TCV)2 Billings: $379.7 million, up 17% year-over-year from $324.2 million in the third quarter of fiscal 2019
  • Nutanix continued its transition to a subscription-based business model, with subscription billings up 43% year-over-year to $321 million, representing 84% of total billings, and subscription revenue up 55% year-over-year to $261 million, representing 82% of total revenue.
  • Nutanix ended the third quarter of fiscal 2020 with 16,580 end-customers