Acacia Communications likes public life just fine

Coherent optical module vendor Acacia Communications (NASDAQ:ACIA), which launched its initial public offering (IPO) this past May 13, offered its first quarterly results report August 11. With year-on-year revenue growth of 101% during the quarter and a stock price that has nearly quadrupled since its debut, Acacia is off to a fast start as a publicly traded company.

The company reported $116.2 million in revenues for the fiscal second quarter, a record according to Raj Shanmugaraj, Acacia's president and CEO. He told attendees on an analyst call August 11 that the company's revenues for the first half of the year are 91% greater than those during the same period of 2015 as well. Sales of the company's coherent CFP optical transceiver and 400-Gbps module, which leverage Acacia's own DSP ASIC, led the way. The company also began sampling a CFP2 Analog Coherent Optics (ACO) optical module in the first quarter of the year.

Shanmugaraj said on the analyst call that the company saw customers shift from a long-haul focus toward the metro and data center interconnect. The latter application has sparked demand for the new 400-Gbps module, according to CFO John Gavin.

The revenue success led to a GAAP gross margin of 46.4% for the quarter, 47.0% from a non-GAAP perspective. GAAP income from operations was $23.5 million; income was $32.6 million in non-GAAP terms. The quarter saw GAAP net income of $17.6 million (versus $28.9 million non-GAAP) and diluted earnings per share of $0.43 ($0.77 non-GAAP).

Acacia executives expect the good times to continue rolling into the third quarter. They forecasted revenues to range from $120 million to $128 million. Non-GAAP net income should fall within $26 million to $31.0 million, while non-GAAP diluted earnings per share should fall between $0.64 and $0.76, the company predicts.

Not surprisingly, investors have lapped up Acacia's story. The stock opened at $23.00 for the IPO; as of early Friday afternoon, the stock was trading at $89.67, up 32.45% on the day.

The company appeared well positioned for success on the public markets (see "Acacia Communications IPO a referendum on optical subsystems space?"). However, Acacia management lowered their funding target shortly before the IPO (see "Acacia Communications lowers IPO target"). The markets don't seem to have minded.

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