Brocade revenues boosted by Ruckus ahead of Broadcom takeover

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Brocade’s fiscal fourth-quarter revenues were lifted in a big way by the Ruckus Wireless business that will be spun off after its recently announced acquisition by Broadcom.

Brocade, which is a major player in the NFV and SDN market, said revenue for the latest quarter was up 12% to $675 million, and revenue for fiscal year 2016 was up 4% to $2.35 billion. Quarterly profit came in at $66 million, however, down from $84 million a year ago.

The jump in sales was boosted by $96 million in product revenue from Ruckus Wireless, a vendor of Wi-Fi equipment that Brocade acquired earlier this year for $1.2 billion to cement a foothold in the 5G market.

“We delivered record revenue and expanded our market reach to address critical requirements at the network edge through our acquisition of Ruckus Wireless,” Brocade CEO Lloyd Carney said in a press release (PDF). “With a range of new IP Networking solutions expected to launch in the first quarter of fiscal 2017, we continue to advance our roadmap and help our customers transform their networks for digital business.”

Broadcom announced earlier this month that it plans to spend $5.9 billion to acquire Brocade in a deal that includes Ruckus. But the chipmaker, which is based in California and supplies chips to Apple and other phone vendors, also hopes to divest Brocade’s IP networking business in which Ruckus plays a major role.

Broadcom intends to divest the IP networking business that consists of wireless networking, data center switching and software networking offerings.

The semiconductor market has been rapidly consolidating as chip makers look for ways to cope with slower growthQualcomm recently announced a deal to acquire rival NXP Semiconductors for roughly $37 billion—NXP itself acquired another semiconductor firm, Freescale Semiconductor Ltd., last year.

Broadcom was acquired last year by Avago Technologies in a $37 billion deal, and the combined companies adopted the name Broadcom Limited.

Meanwhile, a buyer has yet to emerge for Ruckus and the rest of Brocade’s IP networking business. That business could be sold piecemeal—with Ruckus likely being the largest component—or as a whole in a single transaction.