DragonWave's revenue down in 2016 Q1, CEO expects recovery in Q2

DragonWave’s fiscal 2016 did not start as planned, its CEO said Thursday, but Peter Allen added he expects significant growth in its second quarter.

Revenue for the three months ending May 31 was $26.3 million, down from the $43.7 million DragonWave posted in the previous quarter and the $28.8 million posted in the first quarter of 2015.

Still, the company said increasing demand for its products should lead to a substantial boost in second-quarter revenues.

“Momentum is such that we anticipate revenue growth of between 30 per cent and 60 per cent in Q2 relative to Q1,” Mr. Allen said in a statement.

Revenue from the wireless broadband component supplier’s Nokia channel made up 52 per cent of its first-quarter revenue, compared with 46 per cent in the fourth quarter of fiscal 2015 and 61 per cent in the first quarter of last year. 

The Ottawa-based firm posted a gross margin of 21.1 per cent in its latest quarter, up from the 19.4 per cent in the previous quarter and 20.5 per cent in the first quarter of last year.

The company’s net loss of $6 million, or eight cents per share, was up from $2.3 million, or three cents a share, in the previous three-month period but down slightly from the $6.6 million, or 11 cents per share, for the same quarter of 2015.

DragonWave had $18.9 million in cash and cash equivalents on hand at the end of May, compared with $23.7 million at the end of the previous quarter.