| Wind River reports strong quarter |
Jun. 02, 2008
Wind River reports its Linux earnings grew 41 percent since last quarter, reaching $8 million, or about nine percent of the company's $87.9 million quarterly revenues. Linux bookings, meanwhile, were up 143 percent year-over-year, and reportedly include deals with two Korean handset manufacturers to make LiMo-compliant Linux phones.
Wind River's stock soared after the news that earnings grew 13 percent over the previous Q1. Profits for the quarter, meanwhile, reached $324,000, compared to a net loss of $4,551,000 in its fiscal 2008 first quarter.
Deferred revenue grew 15 percent over the previous year, to $145.2 million dollars, says the company, an increase of 15 percent over Q1 last year. Meanwhile, Q1 GAAP net income per share was .00 cents. Non-GAAP earnings per diluted share were .09 cents, an increase of 125 percent over the previous Q1.
"The quarterly sales performance was the best the company has ever achieved in a first quarter," said CEO Ken Klein in the earnings presentation. "Our first quarter performance can be summed up in strong execution and solid return on investments we made last year. Last year, we invested in sales, products, and strategic alliances. Our focus this year is on investment return and strong execution. Our Q1 results clearly demonstrate we can successfully drive both."
Klein also pegged the successful quarter to the company's recent reorganization into four product divisions: VxWorks, Linux, Tools and Horizontal Technologies, and Device Management. "So far, the new structure has been very successful, resulting in more rapid and efficient decision-making, as well as deeper interactions with customers and partners," said Klein.
Later, in a response to an analyst question, Klein noted the company was benefiting from growing demand for Linux devices that are increasingly complex to develop. "Complexity is driving our business," he said. "Just the sheer amount of devices and the amount of software that's going into those devices and the fact that it's effectively flattish in terms of the number of developers that are available -- all of these drive this movement to buy commercially versus build internally."
LiMo design wins in Korea
Klein noted the company's involvement in both the Open Handset Alliance's Google-sponsored Android platform and in the LiMo platform as having "significantly increased our Linux sales pipeline." He went on to say, "Android is having, if you will, a sort of effect on LiMo. LiMo has accelerated, and demand for LiMo has accelerated."
Klein would not provide further details on the "two large Korean handset manufacturers" that he said had agreed to use Wind River's distribution in support of the LiMo spec. Two weeks ago, LiMo received a major boost when Verizon Wireless announced it would release LiMo-based feature phones in 2009. The LiMo Foundation's growing list of members includes two Korea-based handset manufacturers -- Samsung and LG -- both of which supply phones to Verizon Wireless.
In Wind River's yearly earnings report presentation in March, the company boasted of scoring "the first Android win with the largest U.S. handset manufacturer" in a "per-unit fee model" deal. Although this would appear to be a signal of a Motorola design win for Android, there have been no new details to emerge on the deal.
Wind River also noted that its networking business continued to run strong, and the company expects this growth will continue, especially in light of two recent announcements. First, Sun has adopted Wind River's carrier-grade Platform for Network Equipment, Linux Edition platform for its UltraSPARC T2. Second, Wind River joined the OpenSAF Foundation, which is standardizing high-availability (HA), open-source middleware for Linux-based carrier-grade systems.
In the automotive area, Klein said he expected further success thanks to Wind River's recent announcement with Intel to create an open source automotive infotainment stack for Intel's Atom processor based on the Intel-sponsored Moblin initiative. Finally, the company announced that VxWorks 6 performance was strong in Q1, with bookings up 71 percent year-over-year.
A webcast of the Wind River earnings call may be available here.
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