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Ethernity Networks focused on the long term as it continues transition

Ethernity specialises in technology that helps data traffic move efficiently in huge quantities
Mobile and tablet
Data usage is soaring

Ethernity Networks Ltd (LON:ENET) remains convinced it has the right products to help those at the sharp end of the internet to meet the insatiable thirst for data from their customers.

Getting network operators, server manufacturers and telecoms equipment groups to translate interest into hard orders has, however, proved harder than expected and the company admits its financial performance since it joined AIM last year has disappointed.

READ: Ethernity Networks says investment in R &D and sales & marketing will fuel future growth

Ethernity specialises in technology that helps data traffic move efficiently in huge quantities.

As servers are now required to handle multiple tasks such as security video streaming, voice telephony, file downloads, interactivity, social networks, smart devices and the Internet of Things. more flexibility is required.

And the programmable technology Ethernity has developed and uses for its new range of network processing adaptors is right in the sweet spot of where the industry is moving, says David Levi, chief executive.

First-half earnings weighed by marketing and R&D investment

In its first half-earnings, Ethernity said a 12-month delay in the adoption of a “new network virtualisation market”, as well as increased investment in its Sales & Marketing and Research & Development activities, had resulted in an earnings contraction as it continued its transition toward becoming a solutions provider for virtual networking and security appliances. 

The company reported an underlying (EBITDA) loss for the half-year of US$1.1mln, down from a positive EBITDA of US$441,292 in the same period a year ago, while revenues fell to US$441,247 from US$988,995 previously.

Big market opportunity

David Levi remains convinced there is a big market for Ethernity’s products.

“We have a high level of confidence that we are the best-positioned company in the market to deliver the future market requirements and demands.”

The company is in discussions with three potential Tier 1 OEMs at different stages of engagement for accelerating Virtual Broadband Gateway application.

Furthermore, the SmartNIC completed massive tests with two leading White Box server companies to include the SmartNIC under their proposals

Talks with OEMs also ongoing over Ethernity’s next generation 100Gbps SmartNIC to be released in September of the current year for NFV [network function virtualisation] offload and Security appliances.

Ethernity shares were trading at 28.5p at last close on 6 September, giving the company a market cap of around £9.2mln.

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