Worcester Business Journal

12 Worcester Business Journal • September 12, 2016 www.wbjournal.com FOCUS Banking & Finance SEPTEMBER 14, 2016 MECHANICS HALL, WORCESTER • 5:00 - 7:30PM Cost: $55 Pre-registration required. 15th ANNIVERSARY 2016 LAST CHANCE, REGISTER TODAY! Presenting Sponsors Register at www.wbjournal.com/40underforty Supporting Sponsor Internet cash Following $104M IPO, Maynard technology firm scoring even greater financial success in providing Web's backbone As the volume of data moving around the world grows, the companies that build the infrastructure of the internet are working very hard to keep things from going wrong. Helping them in that task is Acacia Communications, the seven-year-old Maynard company that went public in May with a $103.5-million initial public offering. Mu r u g e s a n " R a j" Shanmugaraj, Acacia's presi- dent and CEO, said the prod- ucts his firm makes, known as optical interconnects, are crucial for transmission of high volumes of data. "The more capacity needs go up, the more complicated it is," he said. "We are able to have more intelligence built into these optical interfaces." Acacia's customers are big equipment manufacturers building the infrastruc- ture of the modern internet, Shanmugaraj said. Right now, there are a few big trends driving the company's sales: the BY LIVIA GERSHON Special to the Worcester Business Journal T wenty-five years after the public debut of the World Wide Web, the internet is so ingrained in our daily lives that we hardly notice we're using it. You can upload data for a client in China, log on to the company intranet from your phone while you're on the road, or just sit at home watching Netflix. The only time you're likely to even remember the system of cables and exchanges that makes modern communication possible is when something goes wrong. growing demand for online video, increasing amounts of corporate and personal data being stored off-site through cloud providers and the expan- sion of data networks in the developing world, particularly China. Mark Lutkowitz, a fiber optics indus- try consultant with the Tennessee firm FibeReality, said Acacia's big selling point is its technology, which helps move large volumes of data cleanly. "They happened to come up with this processor which provides capability that no other competitor so far has been able to approach," Lutkowitz said. "That's what really set them apart." Indeed, Acacia is a deeply technical company. According to the prospectus it released for its IPO, 105 of its 228 employees work in research and devel- opment, and nearly three quarters of them have backgrounds as engineers or in another technical field. While a company with such a strong technical focus wouldn't be out of place in Silicon Valley, Shanmugaraj said, Maynard has been a good place to do business. About three quarters of the company's employees work at the head- quarters in Clock Tower Place, with oth- ers in a New Jersey satellite office. The company's reputation has allowed it to attract workers from all over the world, but Shanmugaraj said it helps that there's a strong base of technical exper- tise along the I-495 belt and in Boston and Central Massachusetts. For years, the region has been home to major tech- nical companies and the highly educated workforce that goes with them. "We've been able to tap into a lot of that talent," he said. So far, investors have been impressed with the compa- ny's achievements. Its stock price has risen consistently since it went public in May, with a distinct leap in mid- August after it released sec- ond quarter results showing a 274-percent jump to quarter- ly revenues of $116.2 million and profits of $17.5 million. Lutkowitz said it would be a mistake to overvalue Acacia based on its strong stock performance, which puts Acacia's market cap at $4 billion, around 10 times its revenue. He said the firm may be doing extraordinarily well at the moment due to a combination of mas- sive internet infrastructure construction Murugesan "Raj" Shanmugaraj, presi- dent and CEO of Acacia Communications The Maynard headquarters of Acacia Communications at Clock Tower Place is one of four company locations, with the others in California, New Jersey and Ireland. P H O T O / C O U R T E S Y

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