Behind The Numbers – Quantenna Communications (QTNA) Wave 2 and 3
Quantenna Communications is a provider of high-performance Wi-Fi solutions. Its solutions combine semiconductor architecture with system-level software and cloud analytics with the goal of delivering the highest speed, broadest coverage, highest capacity, and most reliable performance. The company’s end markets include communications service providers and the service provider market for home networking applications.
The stock would close higher 7.35% this week after reporting Q2 earnings:
-EPS of $0.12 vs $0.08 estimate – Beat
-Revenue of $53.4M vs $52M estimate – Beat
-Q3 EPS Guidance of $0.14 – $0.16 vs $0.13 estimate – Beat
-Q3 Revenue Guidance of $57M – $59M vs $56.5M estimate – Beat
-802.11ac Wave 2 Products grew 1% Q/Q
-Wave 3 10G Revenue grew 137% Q/Q
Behind The Numbers – For the third quarter, management anticipates Wave 2 revenue will be slightly up on a sequential basis. Representing a new avenue of Wave 2 revenue growth, Needham analyst Quinn Bolton would add that the company’s Spartan platform is now shipping in 20+ OEM designs. The Spartan platform has been designed for mainstream SPs in geographies such as Eastern Europe, Southeast Asia, and China, and provides simple solution for extended coverage and increased Wi-Fi performance. However, while management is upbeat on the potential for its Spartan platform, meaningful growth and revenue contribution from the Spartan platform is expected in 2019 given the time required for qualification at service providers.
Meanwhile, second quarter shipments of Wave 3 10G revenue exceeded their total Wave 3 10G revenue in all of 2017. In Q3, they anticipate Wave 3 revenue will grow 15% to 30% sequentially, specifically to the $16 million to $18 million range. CEO Sam Heidari would add that another cable MSO has started deploying their Wave 3 10G product to subscribers. This brings the company to three MSOs in deployment, including their original major service provider with nationwide rollout of their product in its leading edge gateway. Needham, in a post-earnings note, would add that they expect an additional four service providers to ramp by year-end.
