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.
Do you agree? Disagree? Tell us in the comments box below. You can also rate Acme Packet in Motley Fool CAPS.
The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up-to-date news on companies like Acme Packet, or any of its peers or competitors. To get up-to-date news and analysis, add these companies to your watchlist today: