Casa Systems became the latest cable access technology vendor to report a really tough first quarter, with revenue off a whopping 55.6% to $35.5 million.
The Q1 report from the Andover, Mass.-based Casa follows a similar call from competitor Harmonic earlier in the week, one which revealed a 30% slide in cable access sales for the first quarter.
“We’re seeing an industrywide slowdown as cable operators implement a shift to virtual CCAP and DAA,” Casa Systems CEO Jerry Guo told investors, describing a “quarter we’re not at all happy with.”
Guo cited recent figures from S&P Global, which noted that cable access tech sales were off 26% combined in the fourth quarter for the category’s three biggest vendors, Arris/CommScope, Cisco and Casa Systems.
As Harmonic did two days earlier, Casa said his company’s clients are engaged in an abundance of active trials for virtualized Converged Cable Access Platform (CCAP) and Distributed Access Architecture. Guo cited 67 trials in all.
But as operators mull a revolutionary way to build out their networks, “we’re in a holding pattern,” Guo conceded.
Casa Systems has tried to diversify its product lines towards wireless convergence recently. But Q1 sales in this emerging category didn’t come close to offsetting the slowdown in the company’s core integrated CCAP business.
Speaking more broadly about the CCAP situation, Guo cited the massive investments made by MSOs in recent years to deliver gigabit speeds.
“The pace of network upgrades has slowed significantly as the industry has moved to capacity filling vs. the buildout phase,” he said.
Notably, also like Harmonic, Casa Systems is banking on MSO clients getting off the dime on the emerging cable access tech paradigms and rolling out some deployments later this year. Casa is still forecasting $250 million - $300 million in full-year 2019 revenue.
“We believe we are at an important juncture in the development of our business and I remain confident that our recent results are not indicative of the company’s large future opportunity,” Guo told investors.
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