What is your business model?
Plover Bay Technologies develops software-defined wide area network (SD-WAN) routers for businesses. Our products are marketed under the brand names of Peplink (Wired SD-WAN routers) and Pepwave (Wireless SD-WAN routers) to value-added distributors, resellers, system integrators and network service providers, who in turn provide turnkey solutions and support to end customers. Production of our network equipment is fully outsourced to third party manufacturers based in Taiwan.
Our SD-WAN routers are fully integrated with our self-developed cloud management tool allowing end users to easily manage network policies for multiple network branches. These functionalities are available to end users for free upon purchase of our SD-WAN routers and continue to be available.
How are you different from other SD-WAN companies?
Plover Bay’s competitors are often established enterprise networking players specialized in other areas of networking, such as cybersecurity, firewall, and they offer SD-WAN as an additional product or secondary feature to their customers.
Our mission is to deliver unbreakable connectivity, no matter where the customer is. Our unique technology, SpeedFusion, combines multiple fixed lines and 4G LTE/5G to form a highly reliable and fast VPN connectivity anywhere. Our technology enables quick and reliable branch networks to be deployed in mobile settings, such as transportation, maritime, public safety, mobile clinic, broadcasting, robotic systems among others. Even for users in a wired network settings, adding wireless bandwidth to the mix can lower bandwidth cost immensely and greatly increase reliability.
Our wireless SD-WAN solutions are certified with all major telecom operators and are purpose-designed to last in adverse conditions, such as extreme temperature ranges and high humidity conditions. Moreover, our company’s solid financials and stable operations guarantee that customers will receive our support for many years. Altogether with SpeedFusion, we have a unique formula that other existing competitors and startups cannot easily replicate.
Who are your competitors?
Plover Bay focuses on wireless SD-WAN, but wired SD-WAN is also an important segment for us.
In the wireless SD-WAN segment, competitors include:
In the enterprise wired SD-WAN segment, some of the competitors include:
What will drive your company’s performance over the next five years?
Our society is increasingly data-driven, and the need for reliable connectivity is universal and oftentimes critical. In the coming years, there are a few forces that will drive the growth of the connectivity market:
Plover Bay’s SpeedFusion capability to build secure, fast and unbreakable connections from any type of WAN and our diverse range of SD-WAN solutions enable customers to build these types of networks anywhere.
We are also building new services such as SpeedFusion Cloud, where a single subscriber button would include everything from router, cloud management, to server infrastructure and data connectivity. We believe this will make our SpeedFusion technology much more scalable, thereby increasing our addressable market.
Besides new products, we are also expanding our marketing and business development capabilities, specifically in the domain of digital marketing. We believe these can help us better capture the vast and growing connectivity market efficiently in the coming years.
As routers are one-time equipment purchases with a long refresh cycle, how will you sustain your growth?
Communication technologies are constantly evolving. Just like from 2G to 3G, or from 3G to 4G, each major mobile network upgrade brings a new product upgrade cycle. Moreover, the need for bandwidth continues to grow as internet users increasingly rely on cloud for productivity and the standard of video and pictures move up to higher resolutions and this in turn drive upgrades for better, more advanced routers.
While the sales of SD-WAN routers will always be an important sales pillar, warranty and support services are quickly becoming another important part of our business. Currently, our recurring revenue consists of warranty and cloud management subscriptions, and SpeedFusion Cloud will enhance this recurring revenue stream.
How well protected is the Company’s technology?
Over the years, Plover Bay Technologies sought to increase its patent portfolio to protect its core technologies. As of August 2020, we hold over 160 patents with over 220 patent applications being under review.
What are the key threats to your business?
Key risks to our company include:
Is the Company affected by the increasing tension among major countries in the world?
Plover Bay Technologies has become more international over the years. Besides our main office in Hong Kong, we have gradually built up significant R&D and operations in Taiwan and Lithuania. We also continue to work with renowned Taiwan manufacturing companies for the production of our products, while adding regional warehouses in the Americas and Europe. With these arrangements, we can tap into diverse pools of talents worldwide, improve our flexibility in adjusting business strategies according to actual needs and diversity the risk of doing business in one single location.
While we do not see major impacts at the moment, we believe our asset light structure, diversified locations and agile mindset will help us navigate through any future challenges.
How will you weigh the tradeoff between returning capital to shareholders and reinvestment in your business?
We are committed to a return capital to shareholders after setting aside sufficient cash resources and buffers to sustain our daily operation needs. Our daily operations needs include ongoing R&D spending, engineering resources, employee salaries, inventories, and small amounts of capital expenditures. From time to time, we may identify suitable investment or acquisition opportunities that require us to set aside additional resources, which may cause our dividend payout to differ from our historic levels.