Acme Packet

Acme Packet reports slight slowdown in 3Q results

Pete Wylie — Fri, 07 Nov 2008 09:46:08 -0500

Acme Packet, the Burlington, Mass.-based session border controller manufacturer, announced fiscal third quarter results showing revenues were up 11 percent sequentially from the second quarter of 2008 and down year-over-year.

Acme Packet reported $28.4 million in revenue for the third quarter 2008, and $85.7 million in year-to-date revenue. Acme Packet slipped slightly in trading yesterday, down to $3.80 per share from its opening price of $4.20 per share.

A company spokesperson cited the economic slowdown as a cause of the slightly lower revenues, but maintained that the company's gross margin was still strong and capex was being managed prudently through the soft economic period.

The company slightly adjusted guidance for the rest of the fiscal year, bringing the high end of its revenue forecast down to $118 million from $119 million, and adjusted its expected revenue from interest up to between $3.4 and 3.6 million from its previous estimate of $3 million.

Acme Packet also announced it has repurchased 6.3 million shares of its common stock for an aggregate price of $35.8 million through Nov. 5, 2008.

For more:
- see the company release here

Related articles
Acme Packet: Canary in the (VoIP) Coal Mine?
Acme Packet new Net-Net product offering
FierceVoIP Leaders: Andy Ory, President, CEO, and Co-founder, Acme Packet

Truphone for Blackberry; 911 Enable helps customers meet FCC rules

Pete Wylie — Thu, 30 Oct 2008 09:35:52 -0400

> Truphone for Blackberry

> 911 Enable Helps VoIP Service Providers Meet New FCC 911 Rules

> Acme Packet Showcases Next-Gen Capabilities in 2008 Global MSF Interop Event

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> Aspect Announces Strategic Partnership With Intech

Acme Packet new Net-Net product offering

Pete Wylie — Tue, 16 Sep 2008 09:19:17 -0400

Acme Packet announced today the release of the Net-Net 4500, an intermediate SBC offering that will sit between its existing Net-Net 4250 and 9000 products. In most configurations, the Net-Net 4500 has more than 100 percent more capacity for calls per second, media streaming and IPsec tunnel capacity than the 4000 series.

The improved performance ability of the Net-Net 4500 will benefit service providers facing ever-increasing demands on their networks as subscriber bases increase and the total number of data streams balloons.

In addition to cutting costs due to its increased performance ability and processing power, the Net-Net 4500 is more energy efficient as its redesigned power supply system uses far less energy than the 4000 series, according to Jonathan Zarkower, director of product marketing for Acme Packet.

"The Net-Net 4500 has undergone significant field testing, where it produced valid performance numbers, and we have completed its beta deployment," Zarkower said.

Zarkower said some of the Tier 1 customers Acme Packet already serves have seen increased performance and subscriber satisfaction after implementing the Net-Net 4500. He also mentioned the potential benefits of using the Net-Net 4500 to support public service security gateways and WiFi.

Acme Packet initially planned to include a prominent customer who beta tested the product in the Net-Net 4500's release materials, but decided to launch without. Zarkower declined to comment on the lead users of Net-Net 4500.

Given Acme Packet's present market share of over 50 percent of the SBC space and long list of customers, expect implementation of the Net-Net 4500 to be wide-spread as VoIP continues to replace TDM communications within enterprise space.

For more:
- see the Net-Net 4500 release here

FierceVoIP Leaders: Andy Ory, President, CEO, and Co-founder, Acme Packet

Pete Wylie — Mon, 25 Aug 2008 16:40:47 -0400

FierceVoIP: Acme Packet recently released its second quarter financials, and you were quoted as saying they were disappointing, but that you weren't overly concerned with revenue not meeting initial projections. Are you still optimistic about Acme Packet's growth?

Ory: Absolutely, we believe we have the best product, coupled with the thought leadership, experience and security to provide the best service possible for our clients.

We had some sales get pushed back into the third quarter, which contributed to the adjusted revenue projection. And overall, just the way we primarily go after Tier 1 companies, their adaptation rates are a little slower, but the purchases are usually much bigger, which can lead the market to be rather lumpy.

FierceVoIP: Company literature states that Acme Packet works with 29 of the top 30 Tier 1 companies. Do you see any competitor's entering into that space in the near future?

Ory: I just don't see another company matching the product first of all. I sincerely believe Acme Packet has the best session border control product on the market; in addition, I think we have by far the highest penetration and a great relationship with our customer base. We offer more connection with more markets than any of our competitors, and that really goes back to our inception eight years ago.

FierceVoIP: How so?

Ory: Well, while other players in our market were going after the smaller carriers, the more entrepreneurial ones, we were focusing on the Tier 1 companies. And over time it became apparent that the larger carriers had the customer base and the infrastructure that required a lot of session border control servers.

FierceVoIP: What level of adoption of the Net-Net 9000 client have you seen so far?

Ory: We are definitely seeing the Top 10 beginning to purchase it more. The 4000 model is still the workhorse and it gets deployed more often, but some of the bigger companies are really seeing the advantage of the 9000 because the larger telcos are used to big iron and gateway, and it has really useful features, like in-box redundancy and better signaling and media capacity. The 9000 is certainly better-suited for anyone with DSP requirements.

FierceVoIP: Recently, you said Acme Packet does about 40 percent of its business in the U.S. and 60 percent internationally, do you see those percentages staying pretty much the same going forward, or do you see a shift toward either market?

Ory: Well, I'd say it's closer to a 50-50 split between the two now. When big deals go through it can skew the numbers one way or another, but I say its pretty close to half-domestic, half-international. APAC and CALA are doing well, as the cost of doing business in these regions trends down, the value proposition, in places like Mexico and Brazil, is really expanding.

FierceVoIP: Where do you see the VoIP industry going in the next 5 to 10 years?

Ory: I think in 10 years, maybe even 5 years, the bulk, if not all, of our communications are going to be IP. Whether you're in your home, car or office, it's all going to be digitized and sent by packet over IP. The problem then enters in, "How can I trust this line?"

For example, if I wanted to make a call to a bank to make a big transaction for my business, I'm not going to use Skype, it's just not secure enough for that type of call. So customers really have to form trust and find quality in the type of IP they use for each type of communication. I think what you will have is companies and carriers building out closed, privately managed signal networks, and there is going to be a lot of need for session border control in that environment. So in short, I think we see a Layer 5 session-oriented build out in the next five years.

FierceVoIP: There is quite an opportunity there, any specific areas you see as first adopters?

Ory: I think the enterprise and call center markets are really ripe for growth. They want to move to IP to lower cost and improve disaster recovery. I think they will turn to trusted carriers for the reliability and security, back to the trust issue, and we will be primed to offer the session border control so these communications can be both cost-effective and secure.

Acme Packet downgrades fiscal forecast

Pete Wylie — Fri, 08 Aug 2008 14:04:09 -0400

Acme Packet downgraded its year-long prediction for total revenue by nearly 20 percent, according to its quarterly financial statement released Thursday. The company first announced that second-results would not meet predictions in early July.

The company also announced plans to expand its common stock repurchase program from $20 million to $55 million. Acme has already bought back $15.1 million in shares, and additional repurchases will be made periodically as market conditions warrant.

Acme posted $25.7 million in revenue in the second quarter, $1.3 million less than the $27 million posted in the same quarter last year; however, the $57.3 million in revenue generated in the first six months is a 10 percent increase compared with last year's results ($52.1 million), thanks to a strong first quarter.

Net income was $0.8 million for the quarter, down from $5.7 million in the same quarter last year.

Acme's revenue from maintenance, service and support was the major factor in the year-to-date increase in both total revenue and income. Revenue from these areas has grown over 20 percent since last year, and the cost of revenue remains less than a quarter of the revenue generated for these areas.

For more:
- see Acme Packet's release

A Glass Half Full

Doug Mohney — Wed, 16 Jul 2008 15:12:41 -0400

Trying to figure out how the price of oil, rising prices, and a code orange financial sector will affect the IP communications industry is a crap shoot. Some analysts are looking towards the Aug. 7 release of Acme Packet's (downward) revised financials as being the bellwether for the rest of the industry, but I'm not so sure if I buy into that idea. If Acme, Cisco and Nortel are down, then maybe we should consider some further thought.

In (quite arguable) theory, there's some good news this week to ponder.

The good news: Intel announced a 25 percent increase in profits this week and sees continued strength going into the third quarter as its chips go into more mobile devices, with laptops now outselling desktops. Mobility desires broadband connectivity, so the wireless companies should be OK, especially with people falling all over themselves buying 3G iPhones. Going into the data center, Sun is predicting a good fourth quarter so people are still upgrading and/or adding servers at a healthy clip.

Analysts argue that consumer electronics, are relatively insulated from the ups and downs of everything going on because everyone "needs" their tech fix and prices continue to drop.

And (in theory), the higher price of oil should lead to more telecommuting as people try to cut down on their gasoline bills and avoid traveling the increasingly expensive skies. Go price plane tickets for September travel and tell me it's not a wakeup call.

So, what do you think? Time to buy some gold? Or just chill a little?

- Doug

Acme Packet: Canary in the (VoIP) Coal Mine?

Doug Mohney — Tue, 08 Jul 2008 14:52:10 -0400

Last week, Acme Packet announced its second quarter revenues didn't match projections. Is Acme's shortfall indicative of a flu for the VoIP industry?

Acme's second quarter revenue missed projected estimates by 25 percent. The company blamed a combination of factors, including a delay in the closing of some deals and a surge of shipments in the last days of the quarter that didn't allow them to count the results on the books for recognition.

Some analysts say Acme's more than $8 million shortfall implies that the first 10 to 11 weeks of the quarter were "exceeding weak." Since Acme's SBC is vitally involved in global VoIP infrastructure and Acme has over 50 percent of the SBC market, analysts believe the company's performance is a bellweather for the rest of the industry.

Others say they have no hard evidence of weakeness in the VoIP trunking market, but North America could be softer than other markets due to economic conditions. Some optimistic VoIP suppliers argue shrinking enterprise budgets could help their sales since implementing VoIP can offer cost reductions.

Service provider Cbeyond's upcoming quarterly results may provide a clearer picture of market trends. In February, Cbeyond warned of some softness in the small and medium business sector it serves.

For more:
- TelephonyOnline worries Acme slowdown means slowdown for VoIP

Related articles:
ALSO NOTED: Acme Packet 2Q08 Financials
Acme Packet Reports 10 Quarters of Growth, No Change for '08 Outlook
The SBC: People just don't understand

Acme Packet Enhances SLA Tools

Doug Mohney — Sat, 14 Jun 2008 15:44:02 -0400

On the eve of NXTcomm, Acme Packet announced a number of service monitoring enhancements to its Net-Net family of products.

New features include IBM Tivoli Netcool incorporating support for Acme's products and enhancements to the Net-Net platform including voice quality measurements using R-factor and MOS scoring and customizable call detail records (CDRs) with any SIP message content.

Users can now manage Acme products using Netcool through the Netcool/OMNIbus real-time event and fault management tool and through the NetCool/Proviso carrier-class performance management and service level reporting software; Proviso support is through an applications pack.

R-factor and MOS scores are periodically calculated during a call for interim call quality reporting and transferred to network management tools for real-time graphical representation of call quality data while end-of-call quality reports are included in the SBC's RADIUS call detail record.

To support customizable CDRs, 30 new fields have been added to Acme Packet's Net-Net family's 140 predefined CDR fields. The new fields can be populated with content from any user-defined portion of SIP messages, including SIP header info, SDP parameters, XML, and others.

For more:
- Acme Packet service accountability announcement

Related articles:
The SBC: People just don't understand
Acme Packet Deploys Open Session Routing

Acme Packet Reports 10 Quarters of Growth, No Change for '08 Outlook

Doug Mohney — Sat, 10 May 2008 20:33:50 -0400

Acme Packet, the Big Kahuna of SBC solutions, announced its first quarter results and updated its business outlook for the year. First quarter revenues grew to a record $31.7 million, an increase of 26 percent compared to $25.1 million a year ago. Net income on a non-GAAP basis was $6.1 million, 9 cents per share on a dilated basis, up 1 cent per share.

Acme is on a roll, marking its 10th quarter of both sequential and year-over-year revenue growth. The company believes, given its strong start to the year, it is "well positioned" to deliver on its full year growth plans for 2008. Its optimistic forecast includes an improvement on GAAP net income for the year to be up 1 cent per share, from 29 cents to 33 cents per share on a diluted basis. Total revenues for 2008 range between $142 million and $147 million, not changing from the previous forecast.

For more:
- Review Acme Packet's 1Q08 Financials

Acme Packet Deploys Open Session Routing

Mon, 07 Apr 2008 06:59:58 -0400

At CTIA, Acme Packet announced the deployment of its Open Session Routing (OSR) architecture and products, as well as an ecosystem of companies, for delivering trusted SIP-based interactive communication within and between mobile, fixed-line and transit networks. Acme says its Net-Net Session Router and OSR ecosystem members' products and services are operational in several tier-one service provider networks around the world.

OSR is designed to simplify core and inter-network session routing and reduce capital and operational expenses, as service providers continue to migrate to and further refine their next generation networks. Acme Packet's OSR solution includes the Net-Net Session Router (SR), a session routing proxy, working in conjunction with routing database products and services from OSR ecosystem members. The complementary product vendors and service providers offer centralized routing databases and database provisioning tools for dynamic route selection; using these databases, dynamic routing decisions within the core IP network and to the PSTN and other IP networks may be made using a wide selection of parameters.

As SIP-session routing becomes more complex, existing session-stateful methods of routing run into scaling problems, requiring a dynamic, real-time routing decision for each individual session for multiple sources and destinations within a network. Add in all the variations of SIP signaling elements that could get involved including wireless mobile switching centers connected TDM-based 2G/3G networks, multi-service security gateways, session border controllers, class 5 soft switches, IMS service core elements, and peering interconnections--not pretty. Enabling each element to make routing decisions also increases capital costs, since additional hardware processing power is required by each element.

Using OSR, Acme's Net-Net SR session routing proxy centralizes and consolidates control, reducing hardware cost and overhead on each transaction. The SR can also support static, localized routing decisions using provisioned policy rules and local route tables that can scale to a few million routes.

For more:
- Read the release here.

Related article:
Sandvine, Acme Packet push into broadband wireless Report
XO Communications expands wholesale VoIP services with Acme Packet Release

ITExpo extract

Thu, 13 Sep 2007 06:59:59 -0400

Chris Lyman called me "clairvoyant" when I said preloading voice software into laptops just seemed logical. Lyman is the founder of Fonality, a Los Angeles company providing open-source VoIP systems for enterprise users. Lyman, a hyperactive 20-something with $11.5 million in funding, started Fonality four years ago after selling a web hosting business he developed while still in high school.

Lyman demonstrated Fonality's softphone interface for me at ITExpo at the L.A. Convention Center. The interface resembles a cell phone, only with an auxiliary window where contacts can be voice dialed, IM'd or e-mailed with a click of a mouse. When a light goes on for a long-toothed trade hack from the TV world, it stands to reason that anyone can master a softphone. It seems far more useful than about 95 percent of the software that's prestuffed into a laptop. You must be negotiating with computer makers, I said to Lyman. That's when he accused me of reading minds.

Be on the lookout for Fonality-equipped laptops. Lyman's investors include Intel.

How about VoIP-on-demand? Greg Welch, CEO of GlobalTouch Telecom, also of Los Angeles, told me his company set up 200,000 .wav-equipped voicemail boxes for Sony Pictures for an audio promo of one of their movies. GlobalTouch is on track to clear $30 million in sales this year, up from $13 million last year. The company is sort of an OEM for resellers that want to offer voice without becoming a telephone company. GlobalTouch has around 50,000 endpoints in addition to its footprint in the movie biz.

Ken Kuenzel advises VoIP providers to secure based on applications. Kuenzel is founder and chief technology officer of Covergence in Maynard, Mass. It's not enough just to firewall a network, Kuenzel said during a panel presentation on security. Considerations have to be made at the application level, and for the upgrade path.

Kuenzel was joined by Kevin Mitchell, director of solutions marketing for Acme Packet in Burlington, Mass. Both agreed some of the biggest security threats to communications systems come from within the systems. "Service attacks are probably where providers are focused, but a registration flood took down Skype," Mitchell said. "Even 'American Idol' televoting time looks like a service attack."
Kuenzel said some of the biggest D-DOS attacks he's seen were the result of a broken server or a router update.

"There's a hacker or a spam or a spit once in a while," he said, "but mostly, it's about protecting the network from itself."

Signing off from L.A. Share you insight with me at dmcadams@fiercemarkets.com.