ADVA Optical Networking (ISIN: DE0005103006, WKN 510300) announced Q2 2016 financial results for the quarter ended on June 30, 2016 and prepared in accordance with International Financial Reporting Standards (IFRS).
Q2 2016 IFRS Financial Results
Quarterly revenues climbed to a record high of EUR 157.2 million. The figure marks an increase of 40.1% year-on-year (YoY) (Q2 2015: EUR 112.3 million) and is above the guidance forecast that was announced earlier this year on April 21.
"Q2 has been a solid quarter for us. We're gaining market share and building momentum," said Brian Protiva, CEO, ADVA Optical Networking. "Our focus and innovation in the data center interconnect space is delivering results. In fact, we're one of the few companies outperforming the market. We're aggressively growing our footprint in this space with a number of key customers and we're continuing to win strategic accounts."
Pro forma operating income in Q2 2016 stood at EUR 4.2 million or 2.7% of revenues, which represents a EUR 3.5 million YoY decrease (Q2 2015: EUR 7.7 million) and is in line with the previously announced guidance. The operating income came to EUR 3.1 million (Q2 2015: EUR 7.4 million). Cash and cash equivalents were at EUR 82.5 million. Net liquidity reached EUR 20.0 million and net working capital EUR 102.7 million.
The quarterly result includes the acquisition of Overture, which took place on January 13, and consequently contains some of the one-off restructuring and integration expenses related to the acquisition. The acquisition was a strategically important step for ADVA Optical Networking and will strengthen the company's product portfolio for cloud access solutions.
"The integration of Overture is progressing well and nearing completion," continued Brian Protiva. "We've fully integrated their hardware business into our cloud access portfolio and significantly expanded our customer footprint. What's more, with the launch of ADVA Ensemble, a new strategic division focused on network functions virtualization, we leapfrogged the market by 12 months. Innovation is more important than ever and is helping to grow our market share. In Q2 alone, we won six awards, including Light Reading's prestigious Company of the Year (Public) and a Global Telecom Business Innovation Award with Verizon Partner Solutions. Innovation and operational excellence will continue to propel us forward, leading to increasing market share and profitability."
Q3 2016 Outlook
In Q3 2016, ADVA Optical Networking expects revenues to range between EUR 150 million and EUR 160 million and anticipates a pro forma operating income of between 3% and 6% of revenues. ADVA Optical Networking performs quarterly reviews of the expected business development with respect to all intangible assets, including capitalized development expenses. In case of adverse business prospects, these reviews may result in non-cash impairment charges in Q3 2016 and beyond, which are excluded from the above guidance. The company will publish its Q3 2016 financial results on October 27, 2016.
ADVA Optical Networking