San Jose, Calif. cable technology vendor Harmonic saw a 12% year-over-year revenue spike to $113.6 million in the fourth quarter on the strength of its CableOS virtual CCAP platform.
Revenue for the company’s cable access segment increased 79% to $24.1 million, with gross margins in the quarter reaching 43.6%.
CableOS, a software-based iteration of Converged Cable Access Platform (CCAP), is in 29 commercial and field trials currently, Harmonic said. Participating companies include four out of the top eight North American and European cable operators.
Harmonic said 535,000 cable modems are being served globally by CableOS network technology, an 11% increase over the third quarter. Related to the move toward virtualization, Harmonic said it shipped 1,000 notes designed for the emerging paradigm of Distributed Access Architecture during Q4.
“These initial CableOS deployments are primarily in a traditional centralized CMTS architecture with a typical application as DOCSIS 3.1 upgrade, and virtualized software economics, and future distributed network migration flexibility underpinned our competitive advantage. We expect continued momentum during 2019 for these more traditional applications,” said Harmonic CEO Patrick Harshman, during Monday’s earnings conference call.
Referring to DAA as a “cousin” of virtualization, Harshman said he doesn’t envision the copious ongoing trial activity surrounding DAA to translate into swift commercial sales until late this year.
“Based on challenging, but groundbreaking progress made over the past several months, we expect the volume of 2019 deployments of new Distributed Access Architecture or DAA networks with multiple tier 1 operators,” he said.
“During this quarter of Q1, we will still be on the on-ramp, continuing support of lead customers who are now in the process of implementing specific trial informed improvements to their deployment plans, not to the CableOS core, which has been solid for some time, but rather to ancillary networking and orchestration elements of our customers end-to-end DAA implementations,” Harshman added.
Harmonic also saw video segment revenue increase by 22% to $89.5 million, driven partly by a 58% sequential uptick in UHD shipments.
Despite a strong fourth quarter that met guidance, Harmonic signaled that Q1 will be below guidance, sending its stock price down double digits in after-hours trading.
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