Sonus Networks, Inc. (SONS)

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Sonus Networks, Inc. (SONS)

Q2 2010 Earnings Call

August 03, 2010 04:45 pm ET


Fran Murphy - IR

Richard Nottenburg - President & CEO

Wayne Pastore - CFO

Guru Pai - EVP & COO

Fran Murphy - VP, Finance


Paul Silverstein - Credit Suisse

George Notter - Jefferies & Company

Catharine Trebnick - Avian Securities

Natarajan Subrahmanyan - SMH Group

Greg Mesniaeff - Needham & Company

Todd Koffman - Raymond James



Welcome to the Sonus Networks Second Quarter 2010 Financial Results Conference Call. I would like to remind everyone that today's call is being recorded and all participants are currently in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions)

At this time, I would like to turn the conference over to Mr. Fran Murphy, Vice President of Finance at Sonus for opening remarks and introductions. Please go ahead, Mr. Murphy.

Fran Murphy

Thank you, Mohamed, and good afternoon everyone. Welcome to Sonus Networks' second quarter results conference call. Thank you for joining us today.

With me on the call this afternoon are Richard Nottenburg, our President and Chief Executive Officer; and Wayne Pastore, our Chief Financial Officer, who will both address you shortly.

Also with us is, Guru Pai, our Executive Vice President and Chief Operating Officer. Guru will be available to answer your questions when our prepared comments have concluded.

Before we get started, I would like to remind you that during this call, we will make projections or forward-looking statements regarding items such as future market opportunities, and the company's financial performance.

These remarks about Sonus Networks' future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

These projections or statements are neither promises nor guarantees, and instead are predications based on management's current beliefs and involve various risks and uncertainties, such that actual events or financial results may differ materially from those we have forecasted.

As a result, we can make no assurances that any projections of future events or financial performance will be achieved. For a discussion of the important risks that could cause actual events or financial results to vary from those forward-looking statements, please refer to the Risk Factors section of our most recently filed quarterly report on Form 10-Q, which was filed today with the SEC.

Any forward-looking statements represent our views only as of today, and should not be relied upon as representing our views as of any subsequent date. While we may elect to update or revise forward-looking statements at some point, we specifically disclaim any obligation to do so unless required by law.

Finally, please note that during our call, we will be referring to certain GAAP and non-GAAP financial measures within the meaning of SEC regulation. A reconciliation of the non-GAAP to comparable GAAP financial measures, along with our earnings press release is available in the Investor Relations section of our website found at under the heading Financial Documents and subheading Second Quarter 2010 reconciliation of non-GAAP and GAAP financial information.

A recording of this telephone call will be available until August 17, 2010. The instructions for accessing this recording and a replay of the webcast will be available on the Sonus Networks' Investor Relations website. Please visit, About Us, Investor Relations for details.

I would now like to turn the call over to our CEO, Richard Nottenburg. Please go ahead, Rich.

Richard Nottenburg

Thank you, Fran. Good afternoon, everyone and thank you for joining us today. First let me say that we are pleased to report strong second quarter operating results, which mark our fifth consecutive profitable quarter on a non-GAAP basis.

Revenue for Q2 was $61.2 million, essentially in line with our revenue for the same period last year. We continue to experience strong order activity and revenue growth for our NBS-9000. In addition, we continue to invest in innovation and our product portfolio enhancing our overall competitive position.

During the second quarter, we launched the NBS-5200 network border switch ahead of schedule. The NBS-5200 is the highest density and more scalable session border control solution in its class, integrating session management, media inter-working and advanced routing, with native support for IPv6 and IPSec encryption. The NBS-5200 differentiates itself in the marketplace and we are encouraged by early customer interest across all market segments.

The NBS-5200 is currently under evaluations and trials with seven customers. Two weeks ago, we announced our first customer Bluemile, a leading provider of IP data and voice cloud services. This was our first deployment of the NBS-5200 in commercial service.

The product was extremely easy to deploy and Bluemile was able to validate the product in less than two weeks. By combining features that are often deployed by other vendors as separate products into a single, scalable and easy-to-manage network element, we have defined the next frontier in session border control.

The NBS-5200 allows our customers to deploy new revenue generating services and realize significant operational savings. This is our first product running on our next-generation ConnexIP platform. We believe, the NBS-5200 increases our addressable market, positions Sonus to gain market share and establishes leadership in the rapidly growing area of IP to IP session management.

In addition, the NBS-5200 complements our NBS-9000, which continues to show success in the market. Both products formed a SBC solution's portfolio enabling Sonus to address the broader set of SBC deployments for service providers and enterprises. We continue to see strong order activity for NBS-9000 and hybrid trunking products and the opportunity to grow our leadership in this market. Sonus have the unique value proposition in the hybrid trunking space for our NBS-9000 product on the GSX platform serves both, TDM-to-IP and IP-to-IP sessions on the same platform.

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