EXFO’s sales up, profits down

EXFO reported a quarter that its CEO described as disappointing, but promised that 2019 will be a year of renewed focus on execution by the test company, which has had a number of recent acquisitions.

Sales for the company’s fiscal fourth quarter for $69.2 million, up from $63 million in the year-ago quarter. Annual sales were up nearly 11%, the company noted, to $269.5 million.

However, EXFO’s net loss for the quarter was $4 million, compared to net earnings of $0.8 million in the same period last year. EXFO said that its net loss included $6.6 million in expenses during the quarter for after-tax amortization, a foreign exchange loss and $3.4 million in after-tax restructuring charge.

EXFO had two acquisitions during this fiscal year: network and subscriber analytics and intelligence company Astellia (which is said generated $16.4 million in revenue during the seven months it has been part of EXFO) and optical test equipment company Yesnista Optics, which EXFO said did not have material revenue contributions to the company.

EXFO announced in August that it would be accelerating the integration of its new monitoring and analytics offerings while implementing a reorganization plan to cut costs — which it estimates will result in $10.5 million in annual cost savings once the changes are completed in the second half of its fiscal 2019.

“During fiscal 2018, we made significant progress to strategically transform EXFO into a supplier of software-intensive, end-to-end solutions and analytics for fiber, mobile and virtualized networks,” said EXFO CEO Philippe Morin in a statement. He went on to say that communications service providers “are undergoing fundamental changes to their business models and network architectures with upcoming 5G and IoT deployments,” and that EXFO is positioning itself as a market leader with its new network performance, service reliability and subscriber insights through its acquisitions.

“Although these transformations are mostly unfolding according to plan, I am disappointed with our financial results in 2018 due to deal delays and the current market environment,” Morin said. “Nonetheless, we have planned significant improvements for 2019 with an increased focus on execution.”

Orange integrates EXFO’s passive virtual probes into ONAP release for service assurance, monitoring

In related news, EXFO said this week that Orange has integrated its passive virtual probes into the Beijing release of the Open Network Automation Platform, or ONAP, to enable service assurance for software-defined network/network function virtualization deployments.

That, according to EXFO, is an industry-first integration of a passive probing virtual network function into the ONAP release and the two companies’ collaboration will “enable the ecosystem to roll out open infrastructures based on SDN/NFV with the capability to monitor and troubleshoot complex end-to-end issues,” according to EXFO, which added that “it will also define a reference design for virtualized service assurance over 4G/LTE [networks].”

Abdelkrim Benamar, EXFO’s VP for service assurance, systems and services, said that the ONAP integration was accomplished in two weeks, which he said “demonstrates the maturity of our virtual network functions and the ONAP Beijing Release.”

“As we transform our network, we are partnering with innovative and disruptive vendors to support our move to Open Source technologies like ONAP to guarantee our software independence and openness,” said Eric Debeau, head of Orange’s Network Automation Platform team, in a statement. “Orange and EXFO have successfully removed a major barrier to ONAP deployment: the lack of monitoring solutions for dynamic, orchestrated virtual networks. EXFO’s unique on-demand provisioning of virtual passive probes significantly reduces the resources required to check service availability and troubleshoot issues. The solution enables service assurance for network virtualization through adaptive, permanent or on-demand monitoring solutions.”

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