ADTRAN - Continued Growth, All Good
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I had a briefing yesterday with ADTRAN to discuss the highlights of their recent Q2 results, and while this may be old news for the financial community, it's still worth noting for anyone that doesn't follow the company closely - and if you're in telecom, you should be.
I've been following ADTRAN for some time, and while they may not be a household name in telecom, I'll take their numbers any day, especially given how majors like Cisco and RIM are facing some big challenges now. As publicly cited, revenue and income are both growing and are at record levels. Getting growth in both areas is not easy, and speaks to how well the company is being run.
This last statement may sound like motherhood, but when you consider the vast range of both product lines and businesses they serve, ADTRAN has a lot on the go. They may not have the brand recognition of Cisco or Avaya, but the growth is there, and more importantly, they're making money. I'd say they're about a year away from hitting $1 billion in sales, and with $150 million of liquid capital on hand, they're certainly in a position to shape their roadmap.
There's still a lot of legacy out there, and a big part of their business is helping customers transition to IP. It's easy to think we're in an all-IP world, but businesses still have lots of interop challenges to work with both existing and new network elements. Looking ahead, I was updated on the progress they're making with vertical market UC solutions, virtualization and cloud (esp their 10 Gig Netvanta interfaces), and support for carriers rolling out IPv6.
ADTRAN covers more ground than most vendors, and there's always the risk of being spread too thin, but their growth metrics indicate otherwise. This was clarified in the briefing, as growth is coming from both hardware and software product lines - not just in the U.S., but overseas as well. So long as this trend continues, my only caution is a view I've held for some time - the company culture is still pretty product-centric - and while this is ideal for switches and routers, a different language and mindset is needed for service-based offerings like UC or hosted. This type of shift takes time, and I'm optimistic they'll get there. Who knows - with all the Cisco layoffs, something tells me they're getting a lot of resumes now, and that might help them get there faster.
I've been following ADTRAN for some time, and while they may not be a household name in telecom, I'll take their numbers any day, especially given how majors like Cisco and RIM are facing some big challenges now. As publicly cited, revenue and income are both growing and are at record levels. Getting growth in both areas is not easy, and speaks to how well the company is being run.
This last statement may sound like motherhood, but when you consider the vast range of both product lines and businesses they serve, ADTRAN has a lot on the go. They may not have the brand recognition of Cisco or Avaya, but the growth is there, and more importantly, they're making money. I'd say they're about a year away from hitting $1 billion in sales, and with $150 million of liquid capital on hand, they're certainly in a position to shape their roadmap.
There's still a lot of legacy out there, and a big part of their business is helping customers transition to IP. It's easy to think we're in an all-IP world, but businesses still have lots of interop challenges to work with both existing and new network elements. Looking ahead, I was updated on the progress they're making with vertical market UC solutions, virtualization and cloud (esp their 10 Gig Netvanta interfaces), and support for carriers rolling out IPv6.
ADTRAN covers more ground than most vendors, and there's always the risk of being spread too thin, but their growth metrics indicate otherwise. This was clarified in the briefing, as growth is coming from both hardware and software product lines - not just in the U.S., but overseas as well. So long as this trend continues, my only caution is a view I've held for some time - the company culture is still pretty product-centric - and while this is ideal for switches and routers, a different language and mindset is needed for service-based offerings like UC or hosted. This type of shift takes time, and I'm optimistic they'll get there. Who knows - with all the Cisco layoffs, something tells me they're getting a lot of resumes now, and that might help them get there faster.
