Ed Ogonek, CEO of Bridgewater Systems.

Bridgewater Systems saw healthy gains in both top-line and bottom-line revenues in its second quarter, as repeat customers continued to come back for service and support, but the company's chief cautioned there might be slower business from some markets in the near future.

The Ottawa-based maker of networking traffic control and management software said sales rose by 19.6 per cent to $11.8 million, with the service and support segment representing 39 per cent of sales, an increase from the 23-per-cent proportion seen a year earlier.

The company also added a new revenue stream in the quarter by providing services for migrating from third-generation (3G) to 4G networks, which contributed to 24 per cent of total sales compared to nil in the same period a year earlier.

Profits more than tripled to $1.3 million or five cents per diluted share, from $350,613 or two cents per share.

As previously expected, gross margin narrowed to 80.7 per cent from 85.7 per cent, as the company worked on expanding its new integrated solution and professional services engagement.

However, the company appears to be well on track for fiscal 2008.

"Approximately 83 per cent of our forecasted revenue for fiscal 2008 is booked, contracted and renewal-based," said Bridgewater CEO Ed Ogonek in a statement.

He added, "While some specific markets and carriers are slowing program rollouts, the overall market trends continue to look positive. Wireless data services growth remains strong, fuelling the long-term demand for our software solutions."

The company said revenue growth is expected to be about 25 per cent for this fiscal year, with operating margins of approximately eight per cent. While still roughly in line with previous guidance, the numbers were slightly more pessimistic than the earlier estimated revenue growth of 20 per cent to 30 per cent and operating margins of between eight and 12 per cent.