Sierra Wireless Reports Fourth-Quarter, Full-Year Results
Friday, February 09, 2018 | Comments

Sierra Wireless reported results for its fourth quarter and fiscal year ending Dec. 31. All results are reported in U.S. dollars.

Revenue for the fourth quarter of 2017 was $183.5 million, an increase of 12.6 percent compared with $163 million in the fourth quarter of 2016. Revenue from OEM solutions was $139.8 million in the fourth quarter, up 3.4 percent compared with $135.2 million in the fourth quarter of 2016. Revenue from enterprise solutions was $31.8 million in the fourth quarter of 2017, up 52 percent compared with $21 million in the fourth quarter of 2016. Revenue from internet of things (IoT) services was $11.9 million in the fourth quarter of 2017, up 73.5 percent compared to $6.8 million in the fourth quarter of 2016. The fourth quarter of 2017 includes $3.1 million of revenue from Numerex, acquired in December.

“In the fourth quarter of 2017, we delivered year-over-year revenue increases in each of our three segments, with particularly strong growth in our high margin enterprise and IoT services lines of business,” said Jason Cohenour, president and CEO. “We also significantly strengthened our IoT services business with the addition of Numerex, and are now better positioned than ever before to expand our IoT services and scale our subscription based recurring revenue.”

Gross margin was $61.8 million, or 33.7 percent of revenue, in the fourth quarter of 2017 compared with $68.8 million, or 42.2 percent of revenue in the fourth quarter of 2016. In the fourth quarter 2016, gross margin was favorably impacted by a change in estimate of intellectual property (IP) royalty accrual. Operating expenses were $64.8 million and loss from operations was $3 million in the fourth quarter of 2017 compared with operating expenses of $49.6 million and earnings from operations of $19.2 million in the fourth quarter of 2016.

Net loss was $3.5 million in the fourth quarter of 2017 compared with net earnings of $15.7 million in the fourth quarter of 2016. Cash and cash equivalents at the end of the fourth quarter were $65.2 million, representing a decrease of $9 million compared to the end of the third quarter of 2017. The decrease in cash was primarily because of the acquisition of Numerex partially offset by positive cash flows from operating activities.

Revenue for the full year of 2017 was $692.1 million, an increase of 12.4 percent compared with $615.6 million in 2016. Gross margin was $234.9 million, or 33.9 percent of revenue, in 2017, compared with $217.7 million, or 35.4 percent of revenue, in 2016. In 2016, gross margin was favorably impacted by a change in estimate of IP royalty accrual and two legal settlements. Operating expenses were $235.3 million, and loss from operations was $400,000 in 2017, compared with operating expenses of $196.4 million and earnings from operations of $21.3 million in 2016.

Net earnings were $4.1 million in 2017 compared with net earnings of $15.4 million in 2016.

For the first quarter of 2018, Sierra Wireless expects revenue to be in the range of $181 million to $189 million. The company expects the first quarter of 2018 to be impacted by some unusual and mainly non-recurring items, including higher one-time costs related to a Numerex network upgrade and customer migration and tight component supply constraining revenue and adding to cost of goods.

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