EXFO cited seasonal softness for performance in the second quarter of its fiscal 2018, reporting a net loss for the quarter of $4.66 million as it also digested the impact of a major acquisition.

The test company said that sales were up 7.8% year-over-year to $64.7 million for the quarter, and up 5.2% for the fiscal year thus far. One of EXFO’s major activities during the quarter was its acquisition of service performance and analytics company Astellia for about $31.6 million. Nearly all of EXFO’s sales during the quarter came from its core business, although Astellia contributed $1.8 million in sales during the one month of the quarter that it was part of EXFO. Physical-layer sales contributed about $43.4 million during the quarter, while protocol-related sales were at $20.8 million for the quarter.

EXFO set the acquisition of Astellia in motion last fall with a purchase of more than 33% of the company’s stock for about $10.2 million. Then EXFO upped its equity through a series of deals with several large shareholders to acquire their equity in the company and getting support from the board of directors. The first phase of a public offer for outstanding Astellia shares put EXFO at 88.4% ownership, and the second phase drove that to more than 95%. The move combines EXFO’s expertise in fiber testing and monitoring with Astellia’s focus on analytics-based intelligence on network and service performance as well as marketing and customer care.

Phillippe Morin, EXFO CEO, said that the Astellia acquisition “positions EXFO among the top five providers worldwide of service assurance solutions” and that with the purchase, EXFO now has solutions deployed at more than 250 network operators globally

“Although this transformative acquisition involves a short-term financial impact, we expect the additional sales volume, cross-selling opportunities, efficiencies as well as complementary technology and service offerings will contribute to earnings growth in fiscal 2019,” Morin added.

 

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