Holy cow, I honestly have never heard Ray so energized, bullish, upbeat, and confident about the future revenue and profitability growth prospects armed with the best platform of solutions, balance sheet strength, customer base and engagement, leadership team and execution strategy. Uncharacteristic for Ray, he was pumped to announce the win of THREE new legacy TIER I contract wins, two international and one domestic
MSO! This is huge, for SONS, or to put in his words, PROFOUND, where he said he'd be disappointed if each of these new major customers didn't contribute AT LEAST $10,000,000 in revenues a piece! These are notable wins that are game-changers where they gained SBC market share by displacing APKT and other incumbent SBC providers!
Impressed with sequential YoY growth in both SBC Product Revenues and SBC Total Revenues increasing by 39% and 44% YoY, respectively, well ahead of the industry Cumulative Annual Growth Rate (CAGR)!
171 new reported customers in the quarter, 70% of which are SBC accounts! Channel made nice contribution of $25 Million or 27% of Total Product Revenue! Sonus is well ahead of projections in Enterprise SBC with a projected $45 Million or 28% balance mix from Enterprise Customers moving more aggressively to Unified Code generation networks!
Nice performance on Gross Margins up 300 basis points from last year. Continued Gross Margin expansion is a big area of focus for Sonus going forward!
Ray boldly and confidently stated that "Simply put, Sonus is WINNING"! He very confidently said that they are going to aggressively go after the lower end solutions with their Microsoft Lync solutions and win meaningful market share from Audiocodes (AUDC) in 2014 and beyond! Microsoft really likes SONS quality, scalability, advanced feature set and architecture, it's ROI proposition, interoperability and SDN capability as well as SONS strong balance sheet, leadership team and reputation for outstanding service and execution!
Hearing exciting about things that are happening at Sonus with increasing developments and strategic partnering opportunities with Sonus technology partners JNPR, MSFT, BSFT, and F5! Japan's Softbank (a long-term Sonus Network Customer) now owns 80% of Sprint. Hopefully will see some breaking announcements coming soon! Great consolidation and sideways base building in the $3.50 to $3.75 range positioning for what I expect to see as a significant upside breakout.leading up to the Q3 earnings announcement and continuing with strong momentum into Q4 and calendar year end. 2013 is shaping up and projected to be the best year in the company's history, imho!
I sold my shares. Just doesn't feel like the same level of vision and innovation. Slow R&D pipeline, slow getting new products to market. Competition is heating up and the Jobs premium is no longer. I'm waiting till it's back in the $300's before considering another long go around.
IMHO, SONS has reached its inflection point, is entering an upside breakout phase and will go on an extended and significant run sharply higher this year (2013) and next (2014) as the emerging and fasting-growing leader in the SBC and UC space. SONS time to execute and shine is right here, right NOW!
SONS has huge upside potential and they are the fastest-growing company in the SBC and UC explosive growth sectors. SONUS NETWORKS is firing on all operational cylinders and are experiencing hyper worldwide demand and growth across their entire suite of service and enterprise SBC and UC best-in-breed most technologically advanced, most scalable, most cost-effective, most reliable, most interoperable and most comprehensive suite of of SBC and UC solutions in the industry bar none. Inking recent strategic alliances with Microsoft (MSFT) Broadsoft (BSFT), JNPR (Juniper Networks) and F5 to service the rapid adoption, deployment, and transformation of global customers to an all IP SBC and UC protocol and platform, Sonus Networks growth trajectory in revenue, sustainable profitability and ability to generate significant positive cash flow from operations their share price is anticipated to be in the early stages of a major upside breakout and sustainable bull rally. The company also just recently announced a $100 Million Buy Back and insiders have been aggressively buying back and retiring stock at a very rapid pace. The company has an exceptionally strong balance sheet with more than $300 MILLION in cash and investments and zero long-term debt and has turned the corner being both earnings and cash flow positive. IMHO at any price under $5 or $6 per share, SONS looks like a phenomenal reinvestment target for AUDC investors who have cashed in and booked their AUDC profits.
I'm not going to go into all of the underlying business model and growth fundamentals and catalysts here other than to say that Sonus Networks is poised and primed for a major upside breakout and sustainable rally that will be boosted by significant SBC product and services revenue and market share growth, margin expansion, new customer wins and diversification, smart and efficient opex control, traction in channel contribution, significant sequential profitability and increasing positive cash flow from operations. Ray Dolan and his team are pushing all the right buttons and executing brilliantly in leveraging their core business platforms both domestically and globally and will prove to be a transformative force and dominant leader in the fast-growing, high-margin SBC and UC services and Enterprise industry sectors which they will continue to materially outpace it's projected cumulative annual growth rates of mid 20% range. Sonus has reached a critical inflection point and has set the stage for a new era of hyper rev growth and sustained profitability for a long and extended cycle going forward.