Skeptics point to insane social-media valuations, dot-com history, and Twitter's troubles when they declare that cloud computing is a bubble due to pop any day. Don't be too sure.
Last night, Acme Packet
Revenue rose 45% to $74 million while adjusted earnings improved 69% to $0.27 a share. Analysts had been calling for $71.4 million and $0.25 a share, respectively, according to Yahoo! Finance data.
Management also boosted guidance. Last quarter, Acme executives told investors to expect $1.05 in per-share earnings on $300 million in 2011 revenue. Those figures have been updated to $1.10 to $1.15 a share on $310 million to $315 million in revenue, roughly in line with projections. And yet both Acme and analysts may still be lowballing.
"We estimate that our total addressable market is as simple as A plus B, where A is the opportunity for our solutions to replace legacy voice connection technologies," CEO and co-founder Andy Ory said during a call with analysts last night.
"We now estimate that more than $30 billion of legacy solutions such as gateways have been deployed in service provider and enterprise networks to support voice applications. Another $2 billion continues to be spent annually for these legacy technologies," Ory said.
The message? Cloud services can't function properly without a more modern infrastructure for delivering data, especially VoIP services created by the likes of Skype, Vonage
Interestingly, Acme Packet isn't the only company making this claim. Fast-growing Riverbed Technology
So say what you will about crazy valuations and silly social-media apps. The more users turn to the cloud, the greater the need for network operators to make large, sustained investments in Acme Packet's and Riverbed's gear.
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