Ikanos introduced Rapid Rate Adaptation (RRA(TM)) technology

Ikanos'' recently-introduced Rapid Rate Adaptation (RRA(TM)) technology is designed to allow service providers to minimize service interruptions and increase uptime compared to previous generations of VDSL2 and ADSLx, thus enhancing the user experience of triple play over VDSL2. The RRA technology is a fundamental DSL innovation that enables transceivers to dynamically adapt the data rate without interrupting service for retraining, as long as there is adequate bandwidth to absorb the impact of the noise. -- Ikanos announced that Gemtek Technology Co. Ltd., an original design manufacturer (ODM) based in Taiwan, is now shipping a full featured triple play residential gateway that uses Ikanos'' VDSL2 CPE and Fusiv® processor silicon and residential gateway software suite. Gemtek''s WVDK-105G is being offered to original equipment manufacturers (OEMs) worldwide and has been qualified by a major North American carrier. -- Ikanos and Wintegra announced an Ethernet bonding solution for their mutual VDSL2 customers. This solution combines Wintegra''s market-leading Access Packet Processors and Ethernet in the First Mile (EFM) bonding software with Ikanos'' multi-mode VDSL2 central office (CO) chipsets, which offer the industry''s highest performance and lowest power. The jointly developed solution is designed to deliver a compelling mix of validated hardware and software, which enables carriers to rapidly deploy services. Outlook: -- Revenue is expected to be between $29 million and $31 million in the fourth quarter of 2007. -- Non-GAAP gross margins* are expected to be between 44% and 46% in the fourth quarter of 2007. GAAP gross margins in the fourth quarter of 2007 will be lower than non-GAAP gross margins, as they will include amortization of acquisition-related intangibles of approximately $0.3 million to $1.0 million and charges related to stock-based compensation expense in accordance with FAS 123? of approximately $0.1 million. -- Non-GAAP operating expenses are expected to be in the range of $14 to $15 million in the fourth quarter of 2007. GAAP operating expenses in the fourth quarter of 2007 will be higher, as they will include amortization of acquisition-related intangibles of $0.3 million, restructuring charges of $0.3 to $0.5 million and charges related to stock-based compensation expense in accordance with FAS 123? of $3.5 to $4.5 million. -- Annual 2008 revenue growth is expected to increase by 20 to 25% as compared to fiscal 2007. -- Non-GAAP operating expenses are expected to be in the range of $57 to $61 million for 2008. GAAP operating expenses in 2008 will be higher, as they will include amortization of acquisition-related intangibles of approximately $1.3 million, and charges related to stock-based compensation expense in accordance with FAS 123? of approximately $14 to $16 million. * The Company refers to gross margins as the result of revenue less cost of revenue divided by revenue.