Sierra Wireless Reports First Quarter 2018 Results

Sierra Wireless Inc (NASDAQ:SWIR;TSX:SW) reported results for its first quarter ending March 31, 2018. Sierra Wireless is an IoT pioneer, empowering businesses and industries to transform and thrive in the connected economy.

As quoted in the press release:

“In the first quarter of 2018, we delivered strong year-over-year revenue growth in our higher margin Enterprise Solutions and IoT Services lines of business,” said Jason Cohenour, President and CEO. “With the acquisition of Numerex, we have added significant scale to our recurring revenue base and IoT services capabilities. We expect to leverage our stronger IoT Services business platform to expand our leadership position in Device to Cloud solutions for the IoT.”

Revenue for the first quarter of 2018 was $186.9 million, an increase of 15.9% compared to $161.2 million in the first quarter of 2017. Product revenue was $162.9 million, up 7.8% year-over-year and Services and Other revenue was $24.0 million, up 138.6% compared to the first quarter of 2017. Quarterly revenue for the three business segments was as follows: (i) Revenue from OEM Solutions was $135.2 million in the first quarter of 2018, up 2.1% compared to $132.4 million in the first quarter of 2017; (ii) Revenue from Enterprise Solutions was $29.2 million in the first quarter of 2018, up 34.5% compared to $21.7 million in the first quarter of 2017; and (iii) Revenue from IoT Services was $22.5 million in the first quarter of 2018, up 217.6% compared to $7.1 million in the first quarter of 2017. IoT Services results include the first full quarter of contribution from Numerex.

GAAP RESULTS

• Gross margin was $62.1 million, or 33.2% of revenue, in the first quarter of 2018, compared to $55.5 million, or 34.4% of revenue, in the first quarter of 2017.
• Operating expenses were $72.0 million and loss from operations was $9.9 million in the first quarter of 2018, compared to operating expenses of $56.8 million and loss from operations of $1.3 million in the first quarter of 2017.
• Net loss was $8.4 million, or $0.23 per diluted share, in the first quarter of 2018, compared to a net loss of $92,000, or $0.00 per diluted share, in the first quarter of 2017.

NON-GAAP RESULTS⁽¹⁾

• Gross margin was 33.4% in the first quarter of 2018, compared to 34.5% in the first quarter of 2017.

• Operating expenses were $58.6 million and earnings from operations were $3.8 million in the first quarter of 2018, compared to operating expenses of $46.4 million and earnings from operations of $9.2 million in the first quarter of 2017.

• Net earnings were $3.3 million, or $0.09 per diluted share, in the first quarter of 2018, compared to net earnings of $7.8 million, or $0.24 per diluted share, in the first quarter of 2017.

• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) were $9.0 million in the first quarter of 2018, compared to $12.6 million in the first quarter of 2017.

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