REG - Ethernity Networks - $4.6 million Follow-on Contract Win

Ethernity NetworksAnnouncement

20/09/2022 08:15

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RNS Number : 9084Z  Ethernity Networks Ltd  20 September 2022

20 September 2022

ETHERNITY NETWORKS LIMITED

("Ethernity" or the "Company")

 

$4.6 million Follow-On Contract win

 

Ethernity Networks (AIM: ENET.L; OTCQB: ENETF), a leading supplier of
networking processing semiconductor technology ported on FPGA (field
programmable gate array) for virtualised networking appliances, is pleased to
announce that it has signed a new follow-on contract with its existing
customer, a Chinese broadband network OEM (the "Customer") following the
initial contract with the Customer, details of which were announced on 18
October 2021.

 

Highlights

 

·    New follow-on $4.6 million contract with existing customer operating
in India and China

·    For the provision of devices to enable Fiber-to-the-Room deployment

·    Brings total value of contracts with Customer for the Company's PON
technology to $7.6 million

 

Under the contract, Ethernity will supply system-on-chip (SoC) devices with
support for Gigabit Passive Optical Networking (GPON) Optical Line Termination
(OLT), adapted to enable Fiber-to-the-Room (FTTR) deployments. The Ethernity
solution offers GPON OLT over an extremely low-cost FPGA to serve residential
and small office Customer Premises Equipment (CPE) for FTTR deployments.

 

Fiber-to-the-Room is a disruptive trend that uses passive optical fiber to
reach residential, retail, enterprise, and automotive deployments. Passive
fiber optic deployments provide greater reliability and performance than Wi-Fi
and a greener and more power efficient solution than traditional copper
cabling. By bringing fiber into the individual rooms of an apartment or small
office, end users can benefit from higher throughput with an unmatched level
of service to enable today's most data-hungry applications without
experiencing lags.

 

This is the second major contract with this Customer, following an original $3
million GPON and XGS-PON OLT SoC order in October 2021. Given the success of
that initial project, the customer proposed a follow-up project to address the
larger FTTR market, targeting residential deployments, and expanding the
Company's reach into a new mass volume market. This brings total contracts
values for the Company's PON technology with the Customer to $7.6 million.

 

The committed orders under the new contract total $4.6 million and the Company
expects that revenue from the new contract will be recorded in 2023 and 2024
and will make a significant contribution to 2023 revenues over and above the
Company's existing order book. The Company has recorded initial revenues under
the original $3 million contract in the current year, with further anticipated
in the remainder of 2022 and the majority expected to be generated in 2023.

 

This is the largest singular FPGA volume based contract that the Company has
entered into to date. Due to nature of the device being a major enabler within
a new generation home gateway and the significant estimated volumes indicated
by the Customer on top of the committed volume per the contract, this may
justify moving to port the design integrated on the FPGA to an Application
Specific Integrated Circuit (ASIC), so as to allow long-term competitive
pricing.

 

 

David Levi, CEO, Ethernity Networks said: "This deal confirms our prior
expectations that Ethernity's contract wins would lead to follow-on business.
We are extremely pleased with the advances we have made on a deployable PON
product with this OEM customer, and we are excited to begin work on this
extended offering for the new FTTR market. This is a totally untapped market
for Ethernity that utilises our existing 5G infrastructure technology to serve
a major connected residential market. I believe this is the tip of the iceberg
in this growing market for the Company and has the further potential to
generate additional significant revenue flows."

 

About Ethernity Networks

Ethernity Networks (AIM: ENET.L) provides innovative, comprehensive networking
and security solutions on programmable hardware for accelerating telco/cloud
networks. Ethernity's semiconductor logic offers complete Carrier Ethernet
Switch Router data plane processing and control software with a rich set of
networking features, robust security, and a wide range of virtual function
accelerations to optimize telecommunications networks. Ethernity's complete
solutions quickly adapt to customers' changing needs, improving
time-to-market, and facilitating the deployment of 5G, edge computing, and
NFV.

 

For more information on Ethernity's products and solutions, please see The
Company's website at www.ethernitynet.com (http://www.ethernitynet.com) .

 

For further information, please contact:

 

 Ethernity Networks Ltd                                            Tel: +972 8 915 0392
 David Levi, Chief Executive Officer
 Mark Reichenberg, Chief Financial Officer

 Allenby Capital Limited (Nominated Adviser and Joint Broker)      Tel: +44 (0)20 3328 5656
 James Reeve / Piers Shimwell (Corporate Finance)

 Amrit Nahal (Sales and Corporate Broking)

 Peterhouse Capital Limited (Joint Broker)                         Tel: +44 (0)20 7562 0930
 Lucy Williams / Duncan Vasey / Eran Zucker

 Harbor Access Inc (US Investor Relations)                         Tel: +1 (475) 477 9401

 Jonathan Paterson

 

MARKET ABUSE REGULATION

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse (amendment)
(EU Exit) Regulations 2019/310 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

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