Casa Systems Files for $150M IPO

Casa Systems, a maker of cable modem termination system and converged cable access platform gear and software, is aiming to raise up to $150 million in an IPO, according to an S-1 filed on Friday (November 17).

Casa Systems said it plans to list its common stock on the NASDAQ market under the “CASA” symbol. Underwriters for the offering include Morgan Stanley, Barclays Capital, Raymond James & Assoc., and Stifel, Nicholas & Co.

Founded in 2003, Andover, Mass.-based Casa cut its teeth on field programming gate arrays (FPGAs) alongside its eventual development of DOCSIS 3.0 CMTSs in 2008, an integrated CCAP in 2012, a DOCSIS 3.1 chassis in 2015, and, last year, its move into the distributed access architecture (DAA) and Remote PHY arena.

RELATED: Cable-Tec Expo: Gearing Up for Remote PHY

Casa, which has also been investing heavily into wireless systems, competes with vendors that include Arris, Cisco Systems, Harmonic, Huawei, Vecima Networks, and Nokia, which recently acquired virtual CCAP startup Gainspeed.

RELATED: Nokia Closes Gainspeed Buy

With an eye toward network virtualization, Casa has also developed Axyom, a software-powered architecture for a range of core and access network functions for fixed and wireless networks. Its Axyom software platform, for examples, supports apps such as security gateways, small cells and WiFi gateways, and the evolved packet core.

Casa, which has been holding its own over larger rivals such as Arris and Cisco in the cable tech sector, said its products are now commercially deployed in more than 70 countries by more than 400 customers. Examples or major customers include Charter Communications, Rogers Communications and Mediacom Communications in North America; Televisa/IZZI Mexico, Megacable Mexico and Claro Telmex Columbia in Latin America; Liberty Global, Vodafone and DNA Oyj in Europe; and Jupiter Communications and Beijing Gehua CATV Networks in the Asia Pacific region.

Though most of its revenues come way of its cable access (CMTS and CCAP) products, Casa has been branching into wireless technologies and products.

RELATED: Casa Systems Builds Wireless Annex

“We believe that the shift to software-centric ultra-broadband networks and fixed and wireless network convergence presents us with a compelling market opportunity,” Casa said in the S-1. “We intend to maintain our technological leadership through the enhancement of existing products and the development of new products in both our current and adjacent markets.”

Per the S-1, Casa pulled in revenues of $233.6 million through the first nine months of 2017 (with $125.3 million from North American customers), up 7.7%, and net income of $59.6 million, up 22% versus the corresponding year-ago nine-month period

For all of 2016, Casa had revenues of $316.1 million and net income of $88.7 million, up 16% and 30.5%, respectively 

Update: Casa has been heavily reliant on revenues from the operations that were formerly Time Warner Cable, the MSO acquired by Charter in May 2016. Through the first nine months of 2017, former TWC accounted for 36% of Casa’s revenues (and 23% for all of 2016). By comparison, Liberty Global accounted for 11% of revenues for the first nine months of 2017, and 10% for all of 2016. Sales to Rogers accounted for 11% of Casa’s revenues for all of 2016.

As of Sept. 30, 2017, Casa had cash and cash equivalents of $183.51 million, and long term debt of $298.14 million.

Casa had 664 full-time employees as of Oct. 31, 2017, with 347 located in the U.S.

Jerry Guo founded Casa and serves as its president and CEO. Before founding Casa, he was VP of broadband at River Delta Networks, a CMTS startup acquired by Motorola in 2001 for $300 million. Before that, he was a research scientist at Bell Laboratories’ research division. 

In 2016, Guo was paid total compensation of $5.3 million, including salary, bonus, stock awards, option awards and other compensation factored in.

Guo currently owns 2.39 million shares of Casa, or 15.9% of the company. Among other backers, Liberty Global Ventures Holding has a 6% stake.