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RNS Number : 6263V
Ethernity Networks Ltd
14 December 2021
14 December 2021
ETHERNITY NETWORKS LTD.
("Ethernity" or the "Company")
Ethernity Update & Change of Registered Address
Ethernity Networks Ltd (AIM: ENET.L), a leading supplier of
programable networking solutions utilising patented and innovative
network processing technology ported on FPGA (field programmable
gate array) for virtualised networking appliances, provides the
following market update:
As set out in the half-year results of 19 August 2021, the
Company remains confident that on the basis of the current
contracts, continued increased customer engagements, focus on
delivery of system solutions and the anticipated customer
deployments now being realised, Ethernity will meet its growth plan
objectives for 2022 and 2023 and is well positioned to become one
of the key solutions providers in its marketplace. However, at the
same time, the Company noted that delays in roll-out and the
general industry-wide shortage of components required for its UEP
and ACE-NIC products would defer planned Q3 and Q4 2021 revenues
into the latter portions of Q1 and Q2 2022.
Ethernity is progressing its strategy of becoming a supplier of
customised and differentiated system solutions, as compared to the
legacy model of FPGA code licensing, with a focus on delivering
complete solutions, including 5G routing software, network
operating systems, and hardware.
In line with this strategy, and in order to achieve competitive
market pricing despite recent price increases for components,
Ethernity is adapting its hardware version to produce an improved
and more comprehensive go-to-market product that will enable
greater and more cost-effective functionality, along with faster
turnaround on the Company's deliveries.
In addition, given the expected ongoing components shortages,
the Company has purchased and secured sufficient critical
components for its 2022 system solutions delivery (UEP and
ACE-NIC100 products), and is in the process of securing all
components for the mass production of our UEP products targeting
innovative solutions for the existing wireless connectivity market,
to safeguard against delays in 2022 deliveries.
In light of the above, the Company and its customers have
re-evaluated the timing of deliveries for the remainder of the 2021
financial year, and the Company now anticipates the likely delay of
some expected revenues from Q4 2021 into H1 2022, as detailed
below:
-- Approximately $1.2m revenue delays for the remainder of the
2021 year, to be realised in 2022.
-- Anticipated revenues for the financial year ended 31 December
2021 of c. $2.8m (subject to year-end accounting adjustments) with
c. 74% gross margin.
Contract and growth review
The past year to date has been a year of significant achievement
for the Company and more importantly, a break- through year in
achieving the goal of becoming a provider of solutions to the
market.
The Company anticipates generating significant revenue growth
from its FPGA-based programmable system solutions, coupled with
further growth in the FPGA Router-on-NIC. Year-on-year revenue
growth is anticipated from product orders and contracts already
signed, in particular from long-term contracts for Fixed Wireless
Access, FPGA-based Universal Edge Platform systems with Ethernity's
patented wireless bonding, FPGA Router-on-NIC, and the recently
announced $3m contract for FPGA-based 1G/10G PON OLT.
The anticipated growth into 2022 and beyond from existing signed
contracts, over and above the initial contract commitments, is
expected to continue the momentum of increased engagements for
Ethernity's solutions-based offerings. In particular, opportunities
for growth exist as follows:
-- Indian OEM contract (February 2021): delivery of 800 units at
about $1.5m (including licensing fee). Based on customer plans
following the initial commitment, the contract is anticipated to
generate an ongoing business of between 5K to 10k units per
annum.
-- UEP solution for wireless bonding contract (July 2021):
$930,000 for 1,000 UEP-60 units. Based on customer plans following
the initial commitment, orders are anticipated to grow to 4k to 6k
units per annum; additional revenue growth anticipated from other
customers in the same market.
-- $3m FPGA PON contract (October 2021): following the initial
order commitment of $3m for Combo PON OLT FPGA SoC for 2022 and
2023 under the contract, the FPGA PON OLT business is anticipated
to generate further annual revenue of $3m from H2 2023, excluding
other new PON customers with whom the Company is in
discussions.
-- Over and above the signed contract in October 2021, legacy
FPGA SoC business is anticipated to produce further growth, driven
by the significant deployment of Ethernity's fixed wireless system
solution provider.
-- With progress in OpenRAN business, Ethernity's vRouter
offload for 5G DU business is well positioned to support the
expected growth.
Ethernity CEO David Levi said : "While the component and
manufacturing delays remain out of our control to a significant
extent, we have taken early action to secure components for our
2022 deliveries. The product contracts we have already signed, the
product orders we have received, and the good progress we have
experienced with acceptance of our offerings will fuel our revenue
growth to position us not just as a technology company, but as a
validated system product supplier with differentiated offerings and
growing revenue streams. Thus, we expect to continually be
considered for larger-scale deployments."
Registered Address Change
The Company informs that it has lodged the change of its
registered address with the Companies Registrar in Israel following
its recent move of premises and updates that its new registered
address is:
Beit Golan, 3rd Floor
1 Golan Street, Corner HaNegev
Airport City
7019900
Israel
For more information on Ethernity's products and solutions,
please see The Company's website at www.ethernitynet.com .
For further information, please contact:
Ethernity Networks Tel: +972 8 915 0392
David Levi, Chief Executive Officer
Mark Reichenberg, Chief Financial Officer
Arden Partners plc (NOMAD and Broker) Tel: +44 207 614 5900
Richard Johnson / George Morgan
Peterhouse Capital Limited (Joint Broker) Tel: +44 20 7562 0930
Lucy Williams / Duncan Vasey / Eran Zucker
About Ethernity Networks
Ethernity Networks (AIM: ENET.L) provides innovative,
comprehensive networking and security solutions on programmable
hardware for accelerating telco/cloud networks. Ethernity's FPGA
logic offers complete Carrier Ethernet Switch Router data plane
processing and control software with a rich set of networking
features, robust security, and a wide range of virtual function
accelerations to optimize telecommunications networks. Ethernity's
complete solutions quickly adapt to customers' changing needs,
improving time-to-market and facilitating the deployment of 5G,
edge computing, and NFV.
MARKET ABUSE REGULATION
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the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014 (as implemented into
English Law). Upon the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
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END
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