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Casa Revenues Rise 18% in Q4

After going public late last year, Casa Systems, a maker of cable and wireless network gear and software, said Q4 2017 revenues rose 18.9%, to $118 million, driven largely by software-based capacity expansions by cable operators.

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That was paired with GAAP net income of $28.9 million, down 27.6% versus the year-ago quarter.

For the full year, revenues rose 11.2%, to $351.6 million.

Though new wireless opportunities are starting to kick in, cable’s move to DOCSIS 3.1 to deliver gigabit-class speeds remains a key growth driver at Casa, company president and CEO Jerry Guo said Tuesday on the earnings call.

And while some operators, such as Comcast and WideOpenWest and Mediacom Communications, have moved aggressively with D3.1, Casa expects deployments to ramp up this year and into 2019.

Cable is generally at the “initial stage” of D3.1, Guo said, adding that there’s “a lot more to come.”

Though integrated Converged Cable Access Platform (CCAP) products have plenty of legs left, he also sees cable’s ramp toward distributed access architectures ramping up in 2019 and beyond.

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Casa also talked up its ongoing move into wireless – including a focus on 4G, small cells and cellular IoT cores -- recalling recently announced wins with Telefonica (for its 4G Apex Small Cells and small cell management platform); and with China Mobile and Sprint, which are both using Casa’s Axyom Small Cell Core product.

Casa said it expects revenues for fiscal year 2018 to be in the range of $380 million to $395 million, with non-GAAP net income of between $100 million to $111 million.

Some of Casa other known customers include Charter Communications (coming way primarily from Charter’s  acquisition of Time Warner Cable), Rogers Communications and Mediacom Communications in North America; Televisa/IZZI Mexico and Megacable Mexico; Claro Telmex Columbia; Liberty Global, Vodafone and DNA Oyj; and Jupiter Communications and Beijing Gehua CATV Networks in the Asia Pacific region.

Update: Via Twitter, Jeff Heynen, consulting director at SNL Kagan, noted that Casa’s turning in of a solid Q4 wasn’t a surprise, but wondered if Casa could maintain consistency throughout the year: 

Casa has historically had strong Q4s. The big question is whether the revenue troughs in subsequent quarters can be minimized.

— Jeff Heynen (@jeffheynen) March 7, 2018

Raymond James analyst Simon Leopold maintained his “Outperform” rating on Casa following its Q4 results, noting that the numbers exceeded expectations (sales of $118 million beat Wall Street consensus of $101.4 million), and Casa's 2018 forecast was a bit better than consensus.

“We expected seasonal strength in the software portion of Casa's business, which largely stems from capacity additions, but the results were well ahead of expectations at $50 million vs. our $38 million estimate,” he wrote, adding that the favorable mix fueled the gross margin to 77.1%, above his expectation of 69.9% and the Street's expectation of 68.5%.