Ekinops says its European manufacturing focus helps it mitigate tariff effects

Like other optical network manufacturers, Ekinops is keenly aware of the Trump Administration’s tariff moves, but the company said it has methods to avoid any significant impact. 

The company, which generates about 20% of its revenue in the United States, is examining various options to develop its commercial strategy.

Ekinops’ manufacturing and assembly operations for the equipment sold in the U.S. are carried out exclusively in Europe, at its production facility in Belgium (Louvain) or through three leading industrial partners (Electronic Manufacturing Services or "EMS"), all of which have production sites in France or the European Union.

Ekinops said it is “one of the few global suppliers that manufactures its equipment in Europe.” In contrast, a “significant portion of the production of some major global telecom equipment manufacturers is based in Asia.”

The company's stance on tariffs comes as it reported that its first-quarter revenues rose slightly due to an uptick in access and software. Still, it faced challenges in optical networking due to slower service provider spending.

Ekinops reported $32.5 million in revenues for the quarter, up 1% year-over-year from last year. Taking out North America (which accounted for 20% of total activity during the period), Ekinops’ sales grew by over 7% in the first quarter.

Ekinops said its results align with its “expectations, despite a marked decline in activity in North America (-20%).”

Access dominates

Like the fourth quarter, Ekinops benefited from an uptick in access and software, while optical networking challenges continued due to service provider spending. From a segment perspective, Access sales were again a dominant growth engine for Ekinops.

Access sales were up +11 % in the first quarter, driven by strong growth in EMEA, particularly in Germany, and continued growth in France.

Sequentially, access solutions rose 19% in the first quarter.

Alternatively, Optical Transport equipment unit revenues dipped over 16% due to what Ekinops said was “the impact of telecom operators’ cautious investment and inventory clearing policies in a challenging market environment.”

Another bright spot was Software and Services.

Driven by network function virtualization solutions, SD-WAN, and service offerings, Ekinops’ Software and Services unit saw an over 17% increase in revenue for the quarter. Software & Services now account for 18% of the Group's total revenue in the first quarter of 2025, up from 15% a year earlier.

Regional fluctuations

From a regional perspective, Ekinops continued to see various fluctuations in the markets it serves.

While sales grew in France and EMEA, they saw a decline in North America.

In France, quarterly revenue rose over 4%, following a strong 2024. In its domestic market, Ekinops continues to benefit from solid sales growth of Access solutions (9%). By end-March 2025, France accounted for 44% of the Group’s total revenue, up from 43% in 2024.

Internationally, Ekinops reported a slight 2% decline in sales at the start of the year, now representing 56% of its total activity.

North America continued to present revenue challenges for Ekinops in the first quarter. The region’s sales were 5.6 m€, down from 7.0 m€ a year earlier. However, the company noted that sales remained stable compared to Q4 2024.

This region now accounts for 20% of Ekinops’ quarterly revenue, down from 25% a year earlier.

Like in 2024, Ekinops said, “the U.S. market continues to be marked by a cautious approach from operators, amid slowing bandwidth demand growth and a lack of new network rollouts by telecom operators.”

Driven by double-digit growth in Access solutions and Optical Transport equipment, the EMEA region saw a “significant increase” in activity (21% in quarterly sales). Ekinops generated 36% of its business in EMEA in the first quarter.

Finally, the Asia-Pacific region accounted for less than 1% of activity in Q1 2025 (vs. 3% a year earlier and 2% in FY 2024).

Ekinops said its first quarter performance aligned with its “expectations, with a continued slowdown in North America, solid growth in France, and strong progress in EMEA, both in Access and Optical Transport.”

Eying new growth

Looking forward, Ekinops will continue to focus on the telecom market recovery while implementing its strategic plan, Bridge, with an eye toward gradual growth in North America in 2025.

Ekinops said Bridge will serve a few key missions: expand its long-haul market and better position its product lines to address the expanding DCI (Data Center Interconnect) segment.

Ekinops’ timing to pursue data center opportunities could not be better. According to Omdia, Cignal AI and Dell’Oro Group reports, the DCI market is expected to have a compound annual growth rate (CAGR) between +13% and +20%.

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