Sierra Wireless expects IoT solutions business to grow 12% this year: CEO
Sierra Wireless expects revenues from its IoT solutions business to expand by more than 12% year-on-year during 2019, the company’s President and CEO Kent Thexton said during a conference call with investors.
In February, Thexton had said that the company was forecasting an annual growth of 10% in this business segment.
“Our IoT Solutions business is demonstrating strong growth,” he said, adding: “The growth in our IoT solutions business along with our growing recurring revenue delivers an improved overall business model.”
In June, the company announced a strategic collaboration with Microsoft to provide full-stack IoT solutions. Under the terms of the agreement, Sierra Wireless’ new Octave edge data orchestration solution has been connected with Microsoft Azure IoT Central. Once in production, the solution will simplify and accelerate the process of getting edge data to the cloud, enabling enterprises to achieve the value of IoT for the industry 4.0 world, Sierra Wireless said. In addition, Sierra Wireless intends to migrate its existing cloud infrastructure from AWS to utilize Azure’s full complement of cloud services.
“We announced at our investor day in early June, our new IoT collaboration with Microsoft. Sierra Wireless has been selected as a preferred edge partner with Microsoft Azure. We believe our collaboration creates a category of one IoT Solutions allowing enterprise to monetize IoT deployment in a much simpler and faster way as well as leveraging the strong Microsoft sales team partner network,” the executive said.
Thexton also said that Sierra Wireless expects to drive consolidated revenue to more than $1 billion in three years and that approximately 60% of that revenue is expected to come from its higher-margin IoT Solutions segment.
David McLennan, Sierra Wireless’ CFO, said that IoT solutions revenue, which includes the former IoT services and enterprise solutions business units as well as IoT modules, was up $5.9 million or 6.3% year-over-year to $99.2 million.
“This reflects growth in AirLink gateways and our managed connectivity business,” McLennan said.
The IoT Solutions segment accounted for 52% of consolidated revenue in the second quarter. Embedded broadband, which includes higher speed embedded cellular modules for automotive, mobile computing and enterprise networking was $92.2 million, down 15.1% year-over-year. Sierra Wireless said that this decline reflects expected weaker demand from mobile computing and networking customers on a year-over-year basis.
“In addition, our automotive modules sales were below our expectations reflecting weaker industry-wide global demand, combined with delays in the launch of new programs,” McLennan added.
The complany’s overall revenue for the second quarter of 2019 was $191.4 million compared to $201.9 million in the second quarter of 2018.
Net loss was $28.2 million in Q2 2019, compared to net loss of $11.4 million in the second quarter of 2018.
Sierra Wireless has more than 1,300 employees globally and operates R&D centers in North America, Europe and Asia.