M2M gateway developer Option has swung to a massive loss and witnessed a huge decline in revenues following the expiration of a licensing agreement with China’s Huawei.
The Belgian company reported a net loss of €7 million ($9.22 million) for the first half of the year, compared with a net profit of €3.67 million for the same period of 2012, and saw revenues fall to just €5.15 million from €23.28 million over the same period.
Product-related revenues slipped from €6 million to €4.4 million between the first half of 2012 and the first half of 2013 but the real pain was felt in the licensing area, where revenues slumped from €17.2 million to just €0.7 million over the same period.
Option (Leuven, Belgium) has taken steps to slash operating expenses – which dropped from €14.1 million in the first six months of 2012 to €8.7 million – by closing premises in Augsburg and cutting employee numbers.
However, its financing costs increased as a result of interest payments on a convertible bond issued in the first quarter of the year.
In its earnings report for the first half of the year, the company noted that a special general meeting of shareholders has to be held to “decide on the continuation of the company”.
Option said the meeting would be held at some point in the second half of the year.
Despite the disappointing results, Option recently noted that its CloudGate M2M 3G gateway had recently been certified for usage on the network of Sprint (Overland Park, KS, USA) and has now been approved by most of the leading operators in North America, including AT&T (Dallas, TX, USA), Verizon (New York City, NY, USA), T-Mobile (Bellevue, WA, USA), Telus (Burnaby, Canada) and Bell Mobility (Montreal, Canada), besides Sprint.
“There’s nothing else like CloudGate on the market today,” insisted Jan Callewaert, Option’s chief executive. “The solution was developed as a direct result of speaking with all the key players in the M2M ecosystem who needed a reliable, value-priced 3G gateway that reduced the amount of different products and configurations that they were required to stock.”