Citing strong demand and the realization of investments in inventory to combat the ongoing supply chain tightness, Sierra Wireless reported Q2 revenue of $188.0 million, an increase of 41.5% compared to the second quarter of 2021.
Gross margin was 33.6% as compared to 34.8% in the second quarter of 2021. In the second quarter of 2022, gross margin was impacted by product mix and higher component costs.
Operating expenses were $44.6 million compared to $55.6 million in the second quarter of 2021. Second quarter expenses included a $9.2 million gain on sale of our Omnilink offender monitoring business. Adjusted EBITDA was $22.4 million compared to $4.3 million in the second quarter of 2021.
Some highlights:
- Connectivity, software, and services revenue was $31.4 million, a decrease of 10.7% compared to the second quarter of 2021. This decrease was primarily due to the sale of the Omnilink offender monitoring business and the impact of the shutdown of 2G/3G networks in the United States on the company’s home security business.
- Monthly recurring revenue (“MRR”)2, 3 was $9.1 million in June 2022 compared to $9.3 million in June 2021.
- Revenue from IoT Solutions increased 54.7% to $139.7 million as compared to $90.3 million in the second quarter of 2021. The increase was primarily due to strong demand for connected devices globally and the realization of investments in inventory to combat the ongoing supply chain tightness. Increase in demand includes acceleration in IoT modules deployment across industrial customers. IoT Solutions gross margin was 30.1%, compared to 27.0% in the second quarter of 2021. The increase in gross margin was primarily due to price increases, product mix, and improved absorption of fixed costs from increased volume.
- Revenue from Enterprise Solutions increased 13.6% to $48.3 million as compared to $42.5 million in the second quarter of 2021. The increase was primarily due to strong demand for routers in our key industrial and public safety verticals, partially offset by decline in connectivity, software, and services revenue resulting from the sale of the Omnilink offender monitoring business and the impact of the shutdown of 2G/3G networks in the United States on the company’s home security business. Enterprise Solutions gross margin was 43.9% as compared to 51.3% in the second quarter of 2021. The decrease in gross margin was primarily due to product mix and higher component costs.
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