Recently, the American optical device manufacturer NeoPhotonics announced the first quarter of 2022 results. Revenue for the quarter was $89.3 million, up 47% year-over-year and 11% sequentially, and gross margin was 30.6%, up 8.7 percentage points year-over-year and 5 percentage points sequentially. An operating loss of $2.8 million in the non-GAAP sense, compared to a loss of $11.1 million a year ago and a loss of $9.1 million last quarter.
Whether it is from the perspective of revenue or profit performance, the performance of New Feitong this quarter has improved significantly. In particular, the revenue growth is mainly due to the high-end 400G product line. Sales revenue from 400G and above rate applications reached $54 million in the quarter, an increase of more than 70% year-on-year and accounting for more than 60% of revenue.
However, this sales were also the same as $90 million in the fourth quarter of 2018. That is to say, the new Feitong has hardly grown in 3 years.
The reason is that before 2019, Xinfeitong has a distinct "Huawei supplier" label, and revenue from Huawei accounts for 48%. Backed by huawei's big tree, as well as its own powerful optical device technology capabilities, the new Feitong life is quite moist. However, since 2019, Huawei has continued to be unjustifiably sanctioned by the United States, and New Feitong, as one of the representative American suppliers, has been hit hard.
As an illustration, on May 16, 2019, the U.S. Department of Commerce added Huawei and 70 subsidiaries to its list of so-called entities, and the new Feitong stock price plummeted by 20.63%.
In August 2019, NFT confirmed that most of the products offered to Huawei are not subject to the US EAR restrictions, as they are developed and produced outside the United States. In the first three quarters of 2020, revenue from Huawei accounted for 52%, 52% and 44% of The New Feitong's quarterly revenue, respectively.
However, as the United States continues to increase sanctions against Huawei and its affiliates due to the ineffectiveness of sanctions, in the fourth quarter of 2020, New Feitong announced that it will not rely on Huawei's revenue contribution to manage its business. According to the financial report released since then, the new Feitong achieved revenue of $68.2 million in the quarter, down 34% year-on-year and 33% month-on-month.
In 2021, New Feitong began to struggle to find new customers, and in the fourth quarter chose to "sell" itself to M&A madness Lumentum for $918 million. Entering 2022, the performance of New Feitong has rebounded significantly, which in a sense shows that the company has survived Huawei's dependence and returned to the track of normal development.
Although, the new Feitong is about to become part of Lumentum. At present, the merger has been approved by major shareholders, as well as approval by U.S. regulators, and then needs to be approved by key Chinese regulators. (C114 Namsan)