Casa Systems (CASSQ) 2 May 212021 Q1 Earnings call transcript

Greetings, and welcome to Casa Systems Q1 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I will now like to turn the call over to your conference host, Jackie Marcus, Investor Relations.

good and operator, you, afternoon, everyone. Thank released ended March Systems close. results after for XXXX of quarter first XX, market the the Casa XXXX afternoon this

will you today’s Relations Scott Officer. our section our archived our Investor website Officer; copy be may If and With Bruckner, it Jerry of receive This me Guo, Relations investors.casasystems.com. being release, Executive on obtain Investor Financial press webcasted are the call you of of the from at not did call Chief and earnings on is section a Chief website.

over Before more certain I on turn Jerry, factors risks information refer to and see for it release to results as the will risk that currently statements we events. forward-looking call cause we to note discussion we that uncertainty. Any our to based Please upon these believe contain discussion. and, differ actual as the forward-looking SEC press filings to today’s on our as include like does and specific information this environment as of business the the in I’d release today’s from information materially call new are the or statements today statements no we based could obligation result undertake future earnings our update in and projections a that of or on make described such,

Principles. report measures do that to we Accepted financial GAAP certain addition reporting, Accounting U.S. In to not conform Generally

to turn that, help investors or to better non-GAAP performance may we call, understand the the like we with call Jerry? it will I’d strengths. useful use we if investors And business or During believe is believe Jerry. it measures over to our

first us for you today of the we Thank XXXX. results of as everyone. afternoon, quarter discussed joining Good our

commitment share according have strongest wireless our from significant growth to had to you. experienced grow great a profitability. XX% to highlights company. products. of continued execute the the quarter. came This of We with telco a increases fixed the public of from growth I delivered with is the to business like XX% our plan have as some and one it another QX We while year-over-year delivering revenue we in and revenue

With and year-over-year strength the customer are the half needs showed wireless whether emphasize up numerous fixed uniquely truly resilience the the by three it diversified strongest making XX% CCAP our growth customer, fixed number over to again We are enterprise. of of and core MSOs our of market like adopting demonstrated with steady QX able the revenue and growth. strategic our of that segments, to telcos the The wireless, revenue, growth I broadband quarters DAA the products. cable made growing Among a business in our with of consecutive solutions. wireless we and be advances cable or virtual company any serve

wireless are and Here and our for number including XG our orders purchase for something CCAP and and finally, products. distributed quarter. products fixed and core the orders very cable And CBRS virtual router I'm expansion press fiber about. purchase network X the for products the packet XG our X and new XG excited radio for access purchase access XX virtual cores, access orders new devices. wireless that

Kubernetes of enables or as clouds. alone a applications that well capability XG This expands hyperscale a public native to and integrated to in have way now the [indiscernible]. and platforms, significantly our Cloud and global and We enterprise private two cloud cloud with our deploy a stand cloud to core Service of customers largest we our service the can public Elastic, the and provision provider and core stand alone deployed combination Google customers XG functions Amazon additional customers services public

quarter first our to on Now performance.

ever was operating as the quarters first backlog During first growth a the million QX with XX% growth our we support continued quarter quarter million we profitability we and lying to delivered profitability. cost company XXXX. a to XXX% revenue delivered the a increase had in and in revenue Total focus for of the on growth increase wireless and terms and our a model year-over-year This EBITDA. with excellent again ended record from of public the of strongest $X.X the remainder adjusted in structure, $XX.X year. our healthy the is We quarter of one for

to areas. XX% strongly. the million, were from up Wireless during XXXX. the bookings quarter also $XX.X product our up revenue quarter Wireless Turning first was of

our year-over-year backlog after we of by million. wireless shipped number record sequentially at stands $XXX So That's XXX% up now wireless and XX% products.

quarter several Finally, the end across of and the customers the customers product we wireless now areas. globally wireless an significant increase at added wireless we XX new our from during all That's customers had XX wireless have we XXXX.

$XX.X Turning our million. now first was telco revenue Fixed to the fixed quarter in segment. telco

and seeing in addressed ways. is largely to revenue fixed product have two our and we are this customer But lumpiness some in concentration. quarter-to-quarter telco We both this due

our and new for securing First, second, virtual products. router our we been increasingly products orders have for fiber purchase customers extension in we've added successful

increase and QX. the XX.X% revenue address licenses usage. infrastructure, In the the evident in capacity fact, by in Cable network reinvesting The to first we cable. seen their we past software on in hotspots backlog in in $XX.X customers finally, year-over-year. network million. cable orders demand telco was the from increases And increase This to of and for particularly existing that virtual driven quarter in up saw continuing routers. was bandwidth That's and have are results bookings BNG two multi fixed purchase X quarters, service this

call the on over detail, from Well, to in a frequently Biden would us discuss proposed to that infrastructure and to asked plan? early financial results I for it's the like Scott [indiscernible] are quantify. touch impact turning business our our Before we question on administration's still the to what's

could of provide business for will currently be forecasting to all are two believe in our incremental the we programs the our traction that broadband infrastructure tailwinds across a business. As lines product company we our

our We ask to Scott say year I the to would in more about to like detail. will this financial discuss progresses. more have performance Scott? that, as With

Thanks, good afternoon, Jerry. everyone. And

in Jerry's our to reiterate growth of it first the XX% cost XX%, this and liquidity had infrastructure as our to profitability cable improved marked and year-over-year a due revenue in revenue XXX% was growth year-over-year their to our to to efficient in deleveraging. bandwidth quarter and XXXX. increased growth then the in year-over-year finally, by and EBITDA higher in first wireless revenue non-GAAP an significant in remarks, we we very almost our of position evident meet And as investments our XX% margins And structure. relative and and demand, year-over-year capital, Just improvement and revenue of cable we quarter in existing saw strong was our increase was noted the both continue increase GAAP operating this working improvements saw Jerry customers

all, in all this really So great a was quarter.

or Okay, revenue $XX.X now XX% revenue. turning quarter was product total was of $XXX.X for down across and fixed lines revenue this of telco to came revenue. first million or the $XX.X in first Breaking quarter our Revenue our million or the in XX% came Cable million. million quarter revenue XX% at of $XX.X performance. our in at wireless revenue

XXXX. we of share $X.X basis, a on quarter. operating net quarter million diluted this in from And million. for year's statement, to loss $X.XX margin GAAP is from non-GAAP fully $XX.X for a as first an a loss at XX.X% were XXX,XXX of came of of of of in was GAAP up significant share basis first at fully further income $X.XX XX% and that's That's we in as revenue, $X.XX share in the That's million this operating QX percentage first million quarter quarter expenses a income $X.X in fully non-GAAP the in for GAAP significantly year-over-year, million and negative and up from $XX.X net from $X.X was XX% of XX.X% $X.X in profit to booked a of XXXX. this or QX at the quarter operating million gross the income on Adjusted prior is net million, of X% operating expenses the income GAAP gross quarter fully $X.X diluted or or $XX.X first per GAAP GAAP per a profit EBITDA increase operating Non-GAAP XX.X%. Total that profit were million XXXX. revenue. the of up XXXX. comparable a $XX.X Looking that is $X.XX down per in GAAP XXXX. operating or non-GAAP relative was with or diluted diluted $XX per million. decline QX net quarter compared the of million booked the came quarter And of in profit was share which the of

Okay, in a ended now liquidity working increase balance mentioned sheet. the very quarter to our year-over-year I turn an capital. strong let in position XX.X% me with our We as first

Looking million $XX.X of had $XX.X and we million. payables quarter net at of end of working $XXX in inventory million at million, capital cash, $XX.X receivables

backlog, cash once million cash than in to related days. year but normally less our our Now payments continue in this for and and was receivables cash at But purchases, our [indiscernible] higher First, of adjusted balance trailing bonuses the the two the debt the that and balance strong, our this balance was component million for was large debt our premiums the two the X% again, are in finally, payables by at in despite greater to of higher that remainder our and sequential $XXX.X remain by quite EBITDA than the first times quarter things the to of corporate and to annual our decline track the is XX XX fiscal of driven with reflected was like fluctuation our second, months do from grow payments Total we and during EBITDA. in quarter, with remain in much reduction this X% on prepaid the $X.X quarter. revolver our down insurance quarter includes XX% timing net balance end

very briefly I opening quarter. on our conclude, to outlook to to So But we're call questions, want our proud comment do for before first of QX. the

part As you and because usually in expecting expectations ahead of QX we orders second revenue had is in materialized exceptional this QX our in normal revenue QX. is seasonality a know, the of while our just actually in were of that we the few quarter quarter of and many in lowest QX, came an terms

the we year our are for full in QX on mid then and numbers. we the to guidance be digit course a least saw know expected digits likely to in growth the quarter we expect see second strong do our from growth will most QX from but year-over-year includes backlog, we with today, large in this schedules and that what So track single meet growth shipping the double versus at of

the Q&A. Okay with turn Operator? the to that let operator me for back call over

you. with we'll from Thank this question a session. conducting [Operator Meta proceed. our At time, Stanley. Morgan be is Marshall and Instructions] And Please first answer question

[indiscernible] on Hi, just for questions. this have Meta. for Thank is I the you two question.

being does how overall guess and I First you And ago? is year fixed between for do differ visibility cable? wireless, business wireless like your your feel a how that

[indiscernible] Jerry is Hi this here.

Let because me mostly business that of ago. better answer ability is feel whole business about much so all year We different we had the question. the than the a what composition much for the

alone wireless We cable year have to is very ago. a And wireless now alone. and million. XX% from We just have are of business compared of we instead $XXX a fixed more backlog telco large also than our

as visibility the short. with compared help better and space, have now still have ship visibility backlog time helps to to is that that also Cable the to but book with a well. we we So wireless

the would more you. the side wireless Thank the seeing on you or are you. the interest Thank be And cell helpful? small just wireless call a Any on side, guess I software in it. Is follow it the that most side? Got incremental on portfolio? where up

side. we As of and among the the that the product see core, lot in the activities the areas, core fixed we discussed radio, on a past wireless packet three devices, access

In that's the activities of one. terms number number

it. very much. Got Thank you

Capital Northland next question our Tim is with from Markets. Savageaux And

on a little Hi, and I'm good late. afternoon, hopping

sense customers percent focus the on in which So growth, in number apologies repeating your think last kind a a How we'll CPE. input your question comment among which broadening don't but addition X in is, tier that's about geographically type? know regard has been regarding my customer of I trying backlog that? of was said $XXX the if million, and % product to versus reflection increase my carriers, characterize Jerry you a breadth where or in also radio especially your globally out out of broader bit. backlog would Is of increase. you or access back that to I something And this guess sort backlog obviously, XXX I'm figure anything this that of is, is core with to interest wireless an traction order if kind or I is specifically substantial

So be any would those great. of lines along one color

right. All

We will deals] number see of of about the terms [travels broad going we up. in interests, have and

orders In two have in as one customers portfolio, increase as force contributions, of terms purchase the And is broadening well. as to well. contribution, build fixed cells, of term continue radios backlog adding we that we new customers wireless and the core that small do we backlogs well packet and existing the access, placing have the to the as backlog long

looked you look with XX% in one, it was like wireless list. tier your that guess least at player me I new at of close. came up one of come in a customers, another one terms one the one that you And as back another pretty mean, QX, on wireless across base I let customer way.

As for side you how say potential in customers of in there significant of kind business XX% particular would Casa now look capable wireless the tier carriers approaching across the are your one you many backlog your on very range? right

time. give to a not very significant at deals I'm on do ready quite have few we this yet, number going but a

And next proceed. from Please our is [Sumit Chatterjee]. question

guys strong Hi I is taking year on did of QX in full Congratulations guys, for [Sumit on timing and not Chatterjee] question. raise materialize just strength. projects? this from explains the given are the thanks wondering about QX concerns some Vignesh why for guidance? the any orders the in the there you partly you was my mentioned know that any I But slippage results of

take I it's don't Look, that? Why It's a Scott. good question.

remind that have our just we is me guidance currently on that the our based business. Let you into visibility

means a I that So first believe on think and quarter. growth track second XXXX. I still we're digit great on are noted, that comments strong track quarter my have we that very had to In we a double for we in

our year. confident significantly. extremely the grew And about backlog we're opportunities Jerry So this mentioned, as

into us So our there at this more update that don't be any perceive I that half slippage But visibility the But we as get guidance do is concern. as point we second very, want gives to appropriate. clear. we'll very

important And we year. on range. We a the my started very this it said, an comments, least as meet guidance in and two having are at I strong year are strongly. track words We very are our to we is

Okay. And then I had another question.

opportunity So how this the around small do CBRS year? you for see the cells

going to is wireless fixed wireless CBRS be types the a three to that the core you access. good products in from think radio really know that the we have We business to our tailwind And of the to general.

We have our radio capabilities CBRS devices. and in access both

we customers. of the four the specific the CBRS but see serve core be not course, Of part will is spectrum solution do to that the

Okay. Thanks.

And Scott next Stifel. our is question Fessler from with

my Hey you question. taking thank for guys,

what your cable, right like runway you going segment outlook of quarterly forward? what's saw year? the back the for for And we in see Given half the up, there then the do the there step is

it's fourth in And the step this first Scott, the a we given And would quarter, somebody question. up we that thought remind good also that in up Hey, you we quarter. in I'll saw saw a fact, question. that ask step the

million In of fact, $XX we about revenue. had

increased will cable steady that And view three on top it's probably seen of new for mentioned Jerry mentioned year. after. million. view that usage or in seeing demands a then did our up to consecutive the strong year significantly and But coming million the in pick that our and customers remainder of in step a the like row towards that of quarters, meet remarks, the range end quarters continues of demands. in infrastructure to see benefit on $XX $XX already, investing bandwidth that the that of the as we're I will CCAP a ramp eight of come be year for my where that, we result and next start have to being is until our in and orders we DAA we For we last existing a And this it cable doesn't seeing virtual the four this is slower be very year. up it Remember is orders in that saw

works? there thanks. Great, millimeter wave doing the on more deployments trials in And then you're there line only the or links side. focused is are still The the sight of for edge

Are wireless you fixed with referring wave? access our the deployments to millimeter

Yes.

had You trial quarter. for wave mentioned last millimeter a

progress that. just was for on I So the wondering

Yes we did.

we fact is going the into of just announced for that in wireless to in about want And fact part that that product acceleration in also, what XG backlog wave. And line consideration takes do so still that I That But of is one well. we we extremely it's deployment. sight say our announced. millimeter is the not customer

I what That's for. was it. guys appreciate thanks All it. Got right, looking

Long And question is from our from with Barclays. Tim next

[rural first questions, on it's in could little if the strong Talk little I two sustainability talk you, Thank a could gross about quarter. margin, of you and a bit a is other if in happening the I about now that mentioned mix and seems pretty kind broadband] that the in And to bit. of bit you the initiatives. the parts government as think world here stabilizing little It it's then guys well.

drivers tailwind So And be Do you product on for would color will you understanding any some of be magnitude Casa, what think or categories? you product kind you think as us a timing you across can on it's think how you. you standpoint? of could give it'll guys color from thank give a these participate any for

Scott. it's Hey, Sure.

Jerry and opportunities rural we then Let Biden program. gross recently the hand talk to announced I'll see and also me in about with then broadband margin in where to the over start infrastructure the

gross this obviously, did over last the more trend to the largely several So quarter. Remember mix. we , margin but That in was up noted software, cable the that related quarters COVID the upstream that tailwinds saw And our was we meet cable with sales. to congestion largely cable on number from business channels chassis a that networks. of significant drove related in

a we of lot nodes So splitting. saw

not possibility we're mentioned every that there additional customers, to our also that down footprint, And sales. and from early time up new with hardware that little we set but software a software. take the a we new chassis put We it's benefiting for we that say only new

need so definitively, in more shift think time, over a see say but quarters would hardware order I from to a software. to away few we there be towards

In we terms gross that the remember that margin this see of for just are the year, year. not guiding trend we on

profitability down P&L We are delivering on cash further focused free and flow. also on the

have provide is So Gig products extension let two on are got Gig that both for on operators for edge [other] that one answer cable CCAP the providing government, art fixed side. fixed a that is funding integrated well the the multi of distributed cable, types me the the usually we question the provider and cable other applications. services service side, as telco or products the operators and one fiber can course, who have applications, we we And for routing of fundings, the plus routers virtual are telco The companies. from on the and BNG that architecture traditional as

So also those any broadband extension. benefit from rural will

Okay, thank you.

Markets. Tim And Northern question our Capital Instructions] Savageaux from is next [Operator with

of access, you're a last Which one fair access get Sideways questions. quarter characterize to seeing a levels bit a and had and that. to but color kind distributed of the sorry cable terms XX% want terms further picking activity of little concentration, that it with [PHY] the it? wanted maybe little to the customers I I then already. is of a bit operator, remote a out. you time, about discussed what maybe across with more aggregate are like in sounds of up And But on way deployments second type you Is in a phone the addressed little Hi, up the in etc? number, couple follow

Sure Tim, it's Scott.

that we Let First did the queue, do which We filed is call. disclose with But that on morning. as your the question, obviously, XX% which you be not in will know, me mention tomorrow start the customers?

have why out get So conversation you let about then me and the I don't, into and that. a can market

good. Sounds

also the do seeing the probably terms and deployments, is not see level of significant. a a of in well. delay Tim, think activities, distributed MAC/PHY we bit. also new we for but architecture more industry we remote And more that's And deployments and scale the there's things to are trend are at as going

going of lot a things in. So on

type solutions, point. We types with of single are engaged not one this at all just

Okay. much. Thanks very

reached session. answer we ladies end the the right have gentlemen, question of All and and

Now, I over back like for would to Guo, Jerry the remarks. closing CEO, turn call to

joining for us everyone you, today. Thank

that release you there. Before Please Investor for ending Day look look to call, on details I hosting out September more to will want announce the event. all with CASA the XXXX. be our the Thank We seeing Systems forward in an specific again. press you

This conference. concludes tonight's

disconnect have may your evening. lines this time. and your all Thank participation for You a you at great