CASA - Earnings call transcript Q2 2018

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Operator

Greetings, and welcome to the Casa Systems' Second Quarter 2018 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 would like to turn the call over to your host Lindsay Savarese. ahead. go Please

Lindsay Savarese

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

of you Jerry our obtain If Guo, from and Relations investors.casa-systems.com. website Investor Shaun as of the receive call today's With Officer; not a me and our it McCarthy, be earnings webcast release, on you did Interim press may our is at section Financial copy call Executive be of over who the Chief taking on This Chief Officer. being section Investor are will archived will Relations website.

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

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

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

Jerry Guo

joining and comments everyone today. for afternoon, items. thanks today review will My three prepared us Good

performance deceleration for our and growth. review the caused the some will in issues top the First, that line quarter I our of

and we conjunction and XXXX as of reduced buyback the in I announced for the how business direction in guidance evidenced And third, confident revised review our review our will $XX why expectations. our remained factors today we earnings company, by that the with release. will share million I Second, the strategic driving view we

to the have our projects the are be quarterly quarter, of size in, the largest of now Turning nature specifics involved we very tend discussed, to to our due particularly as results lumpy customers. for and the we

most in true slowest exception. believe difficult The been the general. and industry our We to has second year for quarter. the was This quarter holds same the typically historically no is predict that

Our revenue in QX was to the up quarter XXXX. first XX% $XX million, compared to down of X% year-over-year but as

in decreased EBITDA adjusted million to business. our continued the $XX.X Our due to XX.X% year-over-year investment

a both our share fully by items discuss to or net these However, $X.XX per driven $XX.X benefit. non-GAAP will his diluted in of Shaun rose million income XX.X% tax remarks. prepared

revenue. of quarter across X.X. continued growth X.X the of second capacity XXX% second expansion sales network This to gigabit DOCSIS of reflect cable We $XX.X XXXX and results and rollout the revenue in software-based the the Our globe the million. with increased to over DOCSIS significant enable achieved capacity quarter services upgrades expansions

quarter, existing and new the new During geographies entered customers. we with

capacity land-expand expansions high will we to these of lead model, our believe As part the deployments margin in future.

related service large are network These multi-phased Procurement several was signed projects scale or top that to moderation contracts. projects. cycles the new now quarter being out as pushed later were in second already our timing are the during generally provider undertaking Some transformations for of result the multi-year in growth to line year. for

concentration forecast is deployment of projects for certainty once. to customers intensifies precise difficult. pauses and guidance a makes or scope giving projects. when multiple launched, be on this have generally with to at and difficult lumpiness timing the spending This we Customer obviously sizing resumes degree While the with the it visibility quite spending high into of of these

instances, a might In slip to one many orders do typically order. fact, that a lead of into receiving large of any in expect quarters. not And fall lot in we we period ahead time receive can subsequent a

upgrades. As of to to scale the the we of delays our reflect year, revising customer second in we look half are guidance large timing the net

next We or finalize they by the introduction the or purchases began are phase, distributed by than we digestion DAA. since are to redirection architecture shipping point network seeing moderate plant We upgrade that closer been as new high CapEx. customers. of product, by represents we are by to characterized a capacity have periods color, This certain in It believe point These in to customers first believe the access appliance network periods, digestion but is expansion add widespread DAA our some shift network approaching We characterized in of core currently by cable technologies. end typically followed and in which more to the outside growth has rather are a inflection certain architecture, space. the defer DAA a our move of driven implement growth functions change chassis-based growth shift been new purchases. represents trajectory and marked plans difficult. technology to complex inflection revenue that To our are CCAP also

their in a DAA our prudent their more will to plans. understandably choosing hotspots We finalizing result, large-scale about the in XXXX. deliberate segment customers on cable primarily their rollout to also for remainder more our in of being that equipment, customers being existing architectures, softening a our this trials upgrades As create networks. on are focus Based are believe of

to generation next on capacity place pressure architecture networks. the weigh their their demands while will decisions However, continue

for may are moderation the in business reasons three few see health continue the a is scale grow. There will and capacity a recent result, we cable this. year. to growth, closer that As of purchases Despite our we confident to our are it the large end

and additional capacity swapping X.X larger for see to appliances the will including smaller we early in CCAP purchases we believe still the First, that of of continue are innings ones. DOCSIS upgrades

will virtualized and way services new additional entirely DAA an nodes Second, to as software, stream the that DAA represent the as capacity on drive we for architectures believe By nodes. revenue appliances CASA. well spend move CCAP distributed

Finally and markets the higher believe the cells XG large for cable We scale our deployments utilization drive place XG to of in given backhaul wireless of will position provide the will large capacity small ideal footprints. operators this solutions. dynamic an their

the fixed wireless me Let for our and turn of remainder to our the the telco parts business and of XXXX. outlook now

date We will believe these year the beginning QX see in revenue with we from As that $XX wins you these large Initial of wins wireless exceed material the million. we to early four operators. announced know, year. orders in wins this for

wireless be business the based reminder, revenue on timing and shipments. not a our acceptance recognition customer As new of will in

are We beginning telco also to market. increased see in the traction fixed

the and table, XX new with products. our in for currently in and the business customers, trials telco new with recall we revenue including seven are on Based B&G will customers, wireless, areas, virtual of anticipate XX for see fixed these active that are and in the feedback we on both positive in April give from may our CCAP XX receiving we To from in this service this making providers product in progress Remote initial we sense XX we router. a are QX engaged introduced you As existing we this product, now you year. PHY

the disappointed for for top we we're and the this one While the results more remainder our XXXX, with issue conservative quarter, line timing. as second of outlook view of

we regardless effective over access in bandwidth. when ever developing, the as broadband believe telco, that significantly about increased markets, measured of a business, delivering $XX Axyom our multi-quarter addressable XXXX. of in was introduced in needs outlook have wireless service We our will Axyom the billion in new each cable, solutions, enthusiastic total our multi-year their the designed transform meet billion and to period. products disaggregated they of and We be expand the We technology these the our networks. XXXX $X for needs of experience we believe of as for providers, meet virtualized Axyom from in will platform. are and they providers, product the Software as because multi-year as market fixed is of all to that

network across that past our and taking over remain the telco fixed us believe To converge, to decade, we access business. enthusiastic cable, innovations we the uniquely continue and technologies markets. insights up, gained positioned As wrap share wireless architectures in the about the

confident in our to also are We strong results. ability deliver

announced As to we result, today. million buyback, a chosen we which $XX a share initiate have

top and on to I help fortunate to the past would service his Shaun investors company, Interim with Corporate fashion. his revised search of thank with our and for hiring would turn ensure you a and a of company has experience of Controller I we Casa committed to with seamless role like Gary permanent Vice four Hall the Shaun for years, assume will call like notch to company is want collaborative of are who have to CFO meantime, public interfacing finances our In running Shaun CFO in update Finally, for the President experience Finance in been a the the McCarthy, search. Board to over successor. our to knowledge the performance XXXX. I review for while And has transition. the outlook financial that, our CFO the and detailed our for we support the and

Shaun McCarthy

and will start provide by afternoon our good update then full quarter XXXX on and Jerry, results an year you, outlook. I reviewing Thank our financial everyone. second

subscribers. was XXXX. the second delay deployments X% $XX.X from well As the the XXXX Europe, in to provide the of Total product $XX.X of as for financial as in our with Jerry quarter capacity impacted revenue some customers continued of our recognition. timing Europe. XXXX. software were Latin quarter highlight $XX.X by negatively a to year-over-year their large quarter of our XXX% rose the revenue mentioned, vary One which win second the the bandwidth quarter-to-quarter, of for based customer of million our and quarter revenue for North results upgrade X.X existing America, million in additional was DOCSIS of services as quarter expansions, quarter million, second to increase can from from of second in to an million, Sales second an Total $XX.X X.X% customers' strategic increased America and XXXX,

orders received the in be by quarter as we our XXXX, orders These deployed continue and will future are products second traction recognized that gain revenue these to the customers. in quarters, market. products, our additional the for demonstrating shipped, of During once accepted wireless

backlog As more and in fourth we in customers, quarter. of material recognize to-date, XX our wireless million to revenue have than wireless the mentioned, Jerry orders we from expect

offset gross compared primarily was by margin the higher the due of XXXX XX.X% partially of mix by margin customers for a a GAAP software-based to Our certain quarter a to in of second support to to XX.X% second few - gross hardware DOCSIS deployment increase in capacity XXXX. rose the quarter of The expansions, mix X.X.

As broadband a of quarter-to-quarter our sales software-centric mix software-enabled from expansions. on gross products and fluctuates based capacity margin reminder, the of our

will mix of year revenue be final XG, a our initial second shift these slightly software more point ramp. expect as deployment the begins rollouts. to XG, this, expect hardware more the put We of business our initial wireless on on of we small rollouts cell in towards ahead To its half core focused the hardware

As full our to year gross the the a XXXX. now we result, high-XXs in expect be margins for

$XX.X the expenses increase cost total increase Turning spending deployment for and XXXX new increase timelines, second quarter of our XX.X% in well in second or our quarter million $XX.X XXXX, research second or to The of of development to due and to quarter related operating as of and in in on growth operating rapid million business, second of XXXX. development to revenue to address of of in the revenue XXXX customers' the compared personnel quarter $XX.X compared the the Adjusted in total the in and million to GAAP to increase to EBITDA sales of follow an transaction expenses, support operating XX.X% was our due cost as the expenses. offering. $XX.X primarily related was the expenses products million were

We of we quarter by XXXX revenue awards increase employees further gross equity second that diluted XXXX, to currently but the the of second offset million. IPO sales $XXX.X higher and effective award rate expect quarter $XX.X $X.XX position was of like million. tax in benefit transactions equivalents quarter of the the a recorded second operating We in debt of exercises by expenses. and to Free full million, second effective profit, may completion $XXX.X $XX.X for share of lock-up was with an ended a tax our the of income and over cash cash X%, to fiscal of second quarter was expiration approximately from XX.X% of XXXX, income Non-GAAP net and net be net for of for I just as I tax for in During quarters. turn additional the the primarily total XXXX. million offering. benefit the future the benefit partially related secondary of rate will XXXX. year equity per the $XX.X million our impact upon quarter now Non-GAAP guidance would year second cash quarter driven of cash XXXX during the well our as by the increase of and mentioned, flow the our

that plans the As have us Jerry in we full revise adjustments caused for year guidance to deployment customers' are XXXX. seeing mentioned, of our certain our

XXXX, year range the now is million; non-GAAP to expected $XX to million be be per of the shares. diluted expect full XXXX. we diluted and income million approximately for total shares be non-GAAP and be $XX revenue in Stock-based $XX full million to for are to Average million; to in compensation the be the to of $X.XX $XXX income approximately XX year to $XXX net For million million to between million range expected of share $X.XX. XX to outstanding $XX

the well the believe deliver of back to questions. market may open for now Thank timing the our call operator from Although to we deployments the growth. to and quarter-to-quarter, grow I vary would we turn remain long-term share you. positioned call

Operator

At James this a question. line first Instructions] question of conducting comes will Capital [Operator from Loop Our we be session. Markets. Please time, with the with question-and-answer Kisner your proceed

James Kisner

big customers the if or initial kind detail impact [ph]. you. of background your cut divesting the any bit It's additional Do that one of read final and disruptions, labor the want more inability and the cuts. these for of dig large some any obviously more. the just customers idea that's you Is it's here? still the year, architecture in kind primarily assets just here the delay like for or driving magnitude. little to get the this is being on this over balance moved I wondering business is insight about and is in of sounds quarter pretty or on It into to midst what it of have thank having Thanks into it

Jerry Guo

Sure.

for decisions The pushouts were push really to leaders out QX our offset be who delay $XX remainder And third in that's is DAA the fourth the associated recognized few to respective that customers had short from the this approximately late in XXXX. amongst really cable markets. really expected did we a clear, million. expect enough expect event softness to The customers. pushout the revenue we're related XXXX. are seeing. in to and deals delayed do DAA few to So we were be quarter XXXX term We over decision. in this DAA concentrated a of an the industry with wide see that not But that technology their be will And of were that

James Kisner

you. how capacity to you might And the much maybe now. or going I it you QX. couple get lower that's to some And what that in the might And just of you QX, or all lot also for like not calendar to the detail. in assume QX. some margin about us like QX I any that guidance can things addition barrage it sounds that that? $XX the that, clarify Is just probably Sorry the be? XXXX. idea or Okay. us get said Thank what's going something also, you QX, about be also - probably in but margin small you of of in margin just give said thing to million mean talk that you would things question, recognized was in implied a were that's solar for give your but One clarify year the for of happen anticipating might get do just right I might happen sort in happen

Shaun McCarthy

we're more be revisions typical have the are conservative that until generally our and bit our I that with those later a year. little half to We would the see in that forecasting guidance to orders year, are related spend. end those in from second not to customers that note to there year-end of things for we chose of year wouldn't visibility such not the we

James Kisner

about it the about good what small - on but What Okay. capacity additions, cells. sounds

I that assuming you it, mean you thoughts that you all is have some what million and QX that think any of cell that for say are in small QX, I did you mentioned recognized. it $XX you mobile

Shaun McCarthy

small to fourth wireless revenue and we in to expect Yeah, the material of quarter have the continue cell year.

Jerry Guo

we're But we recognition revenue the on the all recognize other customer to depends of think going acceptance things. don't it. to and of able The be

that we be believe of a So recognized. portion will

James Kisner

just here that? margin, if are implying What perhaps wouldn't just sharing an to And on year know I for high-XXs that I'll kind sort don't be helps. questions, but that QX that's that else follow-up think like because are But margin cell that you, it other of you here of my give gross wondering that pass and I in expecting low-XXs. you low the said QX as to it guide you you but it revenue, for someone you Thank marketing the small the closer I'm and of in sounds mind gross for partially just opportunity. the

Shaun McCarthy

We to on basis a guidance give quarter-to-quarter typically respect margins. don't with

James Kisner

Thank else. someone you. I'll right. it to All pass

Shaun McCarthy

Sure.

Operator

line Please with Ader Our proceed William question. comes your question Blair. next Jason of with from the

Jason Ader

that Architectures. DAA you're the evaluating they these them, understand a I'm to Can just trying And that's architectures, customers on evaluate you. delay. unclear? little Yeah, And is CCAP. are spending the on you new just as elaborate that, stop saying they thank what's

Jerry Guo

it's thing lose we the Global, on a of as to multiple items of a have which which that's XX%. S&P look fact, the new market we than share increased to and share, other one are about out geographies. position as pushed shipments of expected. a marketplace what be less And data customers we the in We're say - just we when QX, to But the caused topline XXXX, latest caused not new have as matter that fact do the there are delay, we at we our gain not according a channel hand,

we So actually gained.

So we share. softer lose period during up or of with pushed And then market certain when went a out, the spending didn't results. we [ph] the time was

Jason Ader

wasn't That things about though. Okay. caused were asking I said was market was what that I few I a so asking asking there - share, different the you wasn't delays. about

And - as and one of helpful? was DAA be customers that you first why CCAP. looking explain that, they on they can the this the delays? then So of a of it sounded architecture, evaluate what for a sort all, would would just that they And freeze were a on Is that put then freeze them if of at put CCAP, correct? is including bunch reasons other like stuff

Jerry Guo

that word do more little the freeze. Well, conservative. under And use pressure. bandwidth I because is cannot are the wouldn't they spending spending, a bit see freeze They the we

spending. to continue see So we

few of that delivery, certain closed actually projects different are So do pushed process some of we from and in we of had strategies, for were the more we a them still see And softness but in - those were some out. we were we it's customer And spending. them customer see closing. also projects to

Jason Ader

the you year. the trying gave to you we XXXX, what by on at million now I'm guidance just and sit of August get better But a beginning when $XX year handle the in the here for lowered Right. is, for

reasons whatever cable here. your going what significant wireless last - It's sounds most What that the it one delays but QX, softness, from weakening now really contribution, to You're surprised and to perspective, were perspective, have the say cable some some few clearly months. are is what that substantially - there but the is the like are you? from in market that for was in thing you the your specific thing changed the business there

Jerry Guo

shift over the market. I we it know are clear pattern a weeks, few last cable to Well, us in procurement witnessing the become in has

large chassis-based short-term While choosing only rollout are scale timing architecture, not customers in basis. very the they in products cases. of network our some weigh next a the procure the upgrades long-term for capacity to making And their they're of

Jason Ader

changed is DAA… thing big the the The or that is DAA it it That's both? or

Jerry Guo

Both.

Jason Ader

It's both.

Okay.

Jerry Guo

scale do given see current in in are industry And are They customers down capacity delayed contemplating spending that operators - DAA. a large and we deployment. their that slowing of wide DAA lot terms of expansion. Well, or their

Jason Ader

current on if do would they would evaluating Why slowdown that? the Why DAA? they capacity they're

Jerry Guo

will satisfy they to the spend and demand long-term they customer what Well, make while need current architecture the they decisions.

Jason Ader

decisions are going architecture that they're And confident the timeframe? long-term you to what in make

Jerry Guo

We in deployment XXXX. a will scale believe begin larger DAA

Jason Ader

First a you do have yet. half sense or that of

Jerry Guo

But not We evidence deployments first in certain have start that half. seen everyone. the will

Jason Ader

Okay, Thank to I'll the pass you. it next.

Lindsay Savarese

me clarify, next question. we guys, let go just to the Hey before

We business digestion periods in before. expansion and have of seen our

significant in period fact where buying if and about digestion, and go this if there back, In upgrade, during there even IPO, is technology growth business we in our is capacity. very of in are fact see incremental customers we the our of back go periods you talked you

now Jerry more what but that that this we're We QX, thought described some getting year, it's we has those are back. likely with looking moving of while given expectations further the in Now had understanding quickly just in DAA, now in XXXX this particular a materiality like much decisions pushed is event. maybe decision, of

rather than capacity. our fillings large mostly doing they are capacity entails and given business, shift CapEx result, making appliance significant affects a decisions in As this the scale this of

instances, up XX% running to their and were based see they additional running fires. to them software XX% put in they some we a capacity, if now buy, networks before XX% out capacity procuring So at or XX% networks their XX%,

there few this forecast, has and to can't see we is demand the is fourth the that a us probability capacity hardest because there that, to appliance the and in surprises is scale not year. we large what pent that's based and we're of with towards up but grappling suggest if decisions the a lead delay on thing quarter, the a is capacity they purchases abated demand always this capacity, And of likelihood in what will Now the to to DAA, of revised some assess that continue likelihood backend forecast. so

estimate So what to for remainder the quarter, that. is million. fourth be revenue best out in is had outlined, purchases. some we now, capacity Shaun push may cadence slower of that quarter of that we the right $XX expected second it guidance was now where in the the hard but shift That to recognized it's of million forecast accounts revised sit coming a million, to and of of approximately around from is this $XX $XX That

Operator

Our with the next with question. question Marshall, comes line Stanley. Please your proceed from Morgan Meta of

Meta Marshall

gain speed we main when the previously is I the then had be DOCSIS introduced. of Duplex decisions a some upgrade I that DAA was question to made to with full - expected thanks. and guess X.X think Great, lot

was? trying with DOCSIS than of seeing X.X fuller it thought people is X.X are just along a DAA so is further to a maybe And it to sense you are we that DOCSIS make trying or that decision get

Jerry Guo

yet in deployments still still lot operators DOCSIS a that customers. is and advanced and But of see places America, situation different we So for in In to see Europe deploy we we see different Asia. North some more quite DOCSIS X.X. X.X also deployments

from place So to place. it's quite different

At the There start a So operators forward, which potentials, while at may time going deploying and strategies we deploying true FDX X the the lot [ph] and GM seeing X.X deployment. deployment. in others based DAA. mix which a volume of see same as still are there in are start is node will deployment of deploying, chassis that looking

Meta Marshall

four and early Got and a then expect and cities you just kind then of out, of trial that XXXX. later, I of would they decisions to do deployment are do sense in so trial I starting And be these is maybe expecting DAA then for rolled that would it. mean in be would stage kind made you're XXXX -

DAA. be get a it Just progress in trying it full deployment trials will the to on Is where or XXXX? sense is of

Jerry Guo

We that high to trials trials to accurately. late doing we'll forecast more quite a production today, But of that year. we confidence but XXXX cannot We continue rollout see see we multiple with and the we're the XXXX, to going throughout production believe rest are bit of cannot deployment deployment.

Meta Marshall

then last me. Got dampened see see you to you decisions, it. amongst but talked the And from activity of pending customer you've dampening Did obviously the any by due just been decisions did about architecture question M&A them?

Jerry Guo

We seen seen haven't haven't point. the that impact this we us. the historically at And yet. didn't M&A dampening And M&A activities

Meta Marshall

Okay, thank you.

Operator

comes question [Operator of next the with Our proceed Instructions] from Leopold line question. Please Simon Raymond James. with your

Simon Leopold

Great, thanks.

a handful. Just

a other if Mike. way get of I first me out housekeeping Let question

the contributions. customer big XX% on How detail many, us in give quarter? how could you If

Shaun McCarthy

had we Sure, two.

as X.X. their was was quarter that upgrade a One to then a DOCSIS was the network the Charter tier them that chose of X European and one customer ago second same to

Simon Leopold

then And combination? big combined, looking? Are the how your was

Shaun McCarthy

XX%.

Simon Leopold

have ask I'm to results knew, and weak the how decision it, wondering to you chose when just preannounce. nobody outlook thanks. could to these sort going so it, you great were? if And but preannounce didn't quarter you of walk this you XX%, through given I'm process not asked of what this else knew you us why

Jerry Guo

Well. quarterly We didn't. guidance. We don't normally give

giving are still guidance. quarterly not We

the numbers - we with But expected the the and course seriously. want of quarter. be street Of we we better to communication the at beginning very our taking are -

of deals materialize And QX. late towards some the didn't

And so we didn't know until fairly late.

Simon Leopold

I want want I just indicated guess wireless that of material at as Okay. just clarify opportunity the you and expect we And about to talked quarter. much fourth I then of I can. contributions in your you that that. we traditionally material definition threshold. if think your least of XX% during understand remarks, the prepared a make in revenue sure to

Jerry Guo

We have the quarterly revenue. same understanding in terms of

Simon Leopold

of versus And platforms? the trying trials. involved talked know then I'm an trying to versus about how or is and trends Thank point traditional you're really this end. but in as putting I pause it's to your access the in would be whether terms of the aspect being if you. of observing virtual strictly debates the platform or centralized distributed much the plays industry, slowing don't appliance some to consideration of - Is into whether delays I'm on just understand versus between platforms in available virtual Or deployment being virtual related or to in delay head the you there distributed just it, fine these too a head-to-head. related

Jerry Guo

of and on both based needs preferences, interest core. in core virtualized we see just their and appliance-based understanding customers' actually our CCAP our We the CCAP

preference So a a production, rolling upgrading not hub. much in many chassis a big this terms Especially are in And system there a delays than in thing plant out in and job bigger single level change for this of outside that. in factors. it's is requires like there the

Simon Leopold

my taking for you Thank questions.

Operator

with comes question question. line next Hindlian Group. your from the of with Sarah proceed Our Please Macquarie

Sarah Hindlian

do $XX revenues push the million you details year of the with Okay. right last outlook. of magnitude And of the apparently that the done feel And think you spoke have in get is, there de-risked confidence the there very What do early at larger Thank of even I'm year I cut, degree that trying was you much. expressed was just the and of cut and to year? of really When the with fiscal June, guys certainly you've timing fiscal now? a have QX, we feel deals. outlined confidently you understand on visibility in the although the onboarding in, magnitude of the less wireless, given reasonably some you've it given some high I acceptance that out you

Shaun McCarthy

did probability them tracking. from we and that of we was assess set conservative. were we we the this were - as at We Sure. all looked What came numbers up guidance we did with opportunities felt a were perspective very that

any And the are we versus year amounts it to see. really year We're and what future, little some going until push outs pressure to they two before, really look have do network our highest of decisions can of I We're I these big year-end call confidence point year quarter. building the they're a spend into confident and account all-in period decisions. in decisions half these this really in as today any seeing said traditionally would As that specific really some make confident for don't kind we would release about out that's is and they when then the we one at very We by the look decisions. we just that back long-term take out prospects. into material while of in the the guess, things think our very to to we hold some we're customers at release delays pipe going that some and outlook

it kind they decisions. first And is two to very about go it's larger will or customers out we're us, is, will these were and on look years see and going year confident from where will we're three out larger very and be, on are But make scale will smaller one there. out then difficult when the whole then look happen wait project. some for from do and to very from customers of difficult quarter-to-quarter. decisions to the going follow our the and of they we customers months make it will And what to going But quarter-to-quarter what just their to

Sarah Hindlian

again whether on be but wide, been that's a industry understand up follow us get competitive certainly any of I like wanted Cisco very somebody if to competitive case the bit that will are or nature follow not want point up you to to seeing a or to could what little customer from in spending elaborate kind you for Okay. pivot particular and it a in there? pick-up been I would the that. and sign has soft landscape, helpful be helpful from very seeing I landscape, anybody put on the core - of for on you you're

Jerry Guo

based gained While from on the are customers. we seeing, cable geographies, - what a we gained we perspective, actually new

the is forward. as DAA, focused CCAP terms to of position. well we virtualized based are to we be we go we set also are flexibility And have appliance of when as gainer chassis-based is have going of two we as core good you the on look for centric product duplex in leading competition in are view, point to deployable our when more mature we we year and and a on going have software And believe competitive very believe a We actually core. net several think the categories, of and CCAP the approach. we you So CCAP I feature density, in the believe core, a and cores. cable total the different One half first for from a the at side, products the also

a the in that We good CCAP in dozen cable core, position, which CCAP space. virtualize knowledge over very is feature accumulated has believe in categories we the product core complete very are our Our last years.

Sarah Hindlian

just margin me to as in it confused I I'll prepared out but one certainly you starts you're guide then a wireless of down, and capacity ramp. comments am our as because as the little hardware your more cede the expansion, gross Okay floor. though bit seems seeing more more called shipments to also

help you can guide coming in quantify margin of So, terms me down is what please? magnitude what the gross in of from the

Shaun McCarthy

two I am I not of can that. of sure you on color I have Hardware, There's a bit level things… that little give really detail. that

Sarah Hindlian

be That would thank helpful, you.

Shaun McCarthy

see We yes. things. couple Sure, of

allows future to as hardware X.X. some to CCAP Some DOCSIS elect customers to additional networks of time our extent time their from upgrading same the are their will at It to networks. them to time proof purchase they

X.X. to even over So that sometime to capacity they them more whether DOCSIS hardware, they wish gives see and we additional switch enabled as purchase then licenses additional do software which

then the product So with quarter. we see to number new the bit in we our when number we on and little of a have down that particular, quarter shipments in do see quarter look And one. that that things in going that, two, some fourth come we margins

was year and XXs XXs we're I look what thinking how the XXs as towards really guidance are XXs for current low is guidance we well. high and our the we to future prior high think where high is I Our out and believe as about it

Jerry Guo

also new It how of the during much we'll quarter. that ship hardware depends on

Sarah Hindlian

Okay, you. thank

Operator

Please the proceed question question. Northland. with line Savageaux Our your Tim next comes from with of

Tim Savageaux

questions. of couple Hi,

like your its environment, speaks or quarter anyway with ramp customer one competitive if a a you up. First, from expectations of traditional changes extent amongst looks And the impacting and consistent market standpoint any on CCAP the that and [ph] it competitive that or surprise dynamic take pause you new Nokias access in on distributed or question there forward have customer what was I a your what Thanks. basis focus go making CISCO really really the seeing group, and virtualized where to to I major mean the players market basis? to really in quarter. challenging your whether you ARES' in Harmonics you're changing a on the more a European more with another the have wonder and or was either or outlook. results that and second coming or the

Jerry Guo

single projects is on particular customer. and to multiple Well, related mentioned that we we as or we a cannot delay delay comment not a purchases earlier, - the that customers'

revenue. that's So for of push out certain the

is. in position as share. access believe very appliance as landscape, that the to make a node about know to Duplex competitive core don't I side our including side traditional to our than CCAP core. multiple how core capabilities capabilities competitive side, well I in As as we for well great want comments we much in as based virtual capability CCAP we're confident executing we But on our both our market and gain those about are - space

Tim Savageaux

in some follow-up U.S. you market operator that mean from sort these were that If of virtualized and the I both like least DAA and standpoint both cable I you of been on seems active historically. quickly, dynamics to also context discuss kind some increased a where of could you it at just if haven't may of share changing changes discussing. wonder largest the architectural would competitive the penetration necessitate dynamics of we U.S. the around

Jerry Guo

comment I and make do is think to we opportunity believe not and that know referring I public information. about But to changing due to are have which I the we can a don't gain you things, what architecture.

Tim Savageaux

you. thank Okay,

Jerry Guo

Sure.

Operator

the to to this like call [Ends I'd our now back question Jerry gentlemen abruptly] and Ladies does Guo, turn answer closing conclude session. for over and And remarks.

Casa Systems (CASSQ) 14 Aug 182018 Q2 Earnings call transcript