CASA - Earnings call transcript Q4 2020

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Operator

Greetings, and welcome to the Casa Systems 4Q 2020 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jackie Marcus. Jackie. you, Thank

begin. You may

Jackie Marcus

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

is receive you of obtain Scott Guo, website webcast Chief are the may the being at a If With from This Chief not copy our Financial on release, Relations it of earnings section Investor Relations be and our Jerry me will Executive Bruckner, archived of Officer. Investor investors.casasystems.com. website. Officer; you press our call and call did today’s on section

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

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

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

Jerry Guo

XXXX and you Thank year results. year XXXX quarter excellent quarter ended fiscal for as results. everyone. fourth and afternoon the joining fiscal fourth with discuss We today our we us Good

and grow to of transform in our highlights. XXXX successfully our profitably on We commitment Here are delivered business. the some to

a XX% year the revenue our drivers, growth. from in double-digit fixed revenue became wireless our profitability XX% largest provided our growth made to telco major over products. growth range and business advances XXXX came carriers fiscal We our exceeded customer significant previously products, of our and and contributing in wireless XXXX Our with of validate revised our guidance revenue. our QX, with demonstrating the part our competitors. And that fiscal of continue technology

access purchase the and fiber new work for access the four for wireless XG dedicated to fixed Once and to despite products, CCAP for distributor this. wireless the commitment packet Here of a from customers are virtual numbers a people cable And orders purchase year CBRS a our major A And significant headwinds and the including XXXX. core. again, hard products. distribution and have products. new customer new and our products wireless devices. the new our XG our for network purchase access six fixed device, radio a XG fiscal and orders multiservice XG router router launched millimeter XX BNG recently for virtual access cores, wave this ongoing achieve all point truly a Casa Systems We for of I and XX for Their highly orders stemming thank inspiring. are COVID-XX. talented a

quarter. revenue sequentially. a the XX% X% increase for fixed delivering increase revenue year-over-year our backlog to a Now, and was quarters. strongest XXXX. bulk support delivered the with our million, our and during quarter with in fourth $XXX.X growth business, healthy we we one onto represent telco performance, of and Wireless continued starting quarter of Total ended our to had a of the QX, the top-line We wireless revenue record XX%

by if And XX% with over was included year, in to full our year revenue second XXXX period over we generated structure year our our $XX.X of compare relative a adjusted in EBITDA. half $XXX.X compared XXXX, increase cost million grew in the XXXX, XXXX. million, an our of We the model increase to we acquisition, XX%. revenue This NetComm For focus the XXXX. And revenue is operating total XXXX off. fiscal on to XXX% paid our fiscal same and

This Turning in This fourth increase customers the Wireless is access our for We now $XX.X had XX% year of core, XX% all fiscal relative EPC, to of product largest XG number all $XXX.X wireless grow and revenue packet the fixed We business. fiscal million. increased year wireless wireless XXXX. also in we XXXX. videos, a access relative Not I XG revenue, our devices. largest but our CMOS call now and now we to XXXX access success core wireless cloud areas, of of our did have areas, revenue across to have our products. was globally QX, Virtual native in quarter to was out is increase and globally million. only we an want of our wireless product the XG fixed XX XG, customers particular wireless fixed customers.

trials our our industry-leading Our millimeter XG wireless XG record-breaking Sub-X outdoor devices in devices, fixed several featured XG access wave our has been and XG globally. CBRS device distance devices, that

wireless our remains backlog Finally, quite robust.

backlog. volume a were successful our high QX in we QX, wireless During of shipping

new growth as under orders, of wireless just the these product sales at across shipments all four backlog important I portfolio. XXXX with million. most our in with our driver buildup $XX growth stands see wireless net of our So the and wireless

steady to now $XX.X MSO fiscal we telco router, growth XXX% XXXX. our customers across products; compared telco. We saw has now In all have virtual of largest router, to we Mexico; we focused In And for is in This building revenue in fixed the million. telco finally a on consecutive increase XXXX, an in progress Izzi, highlight deployed success year in $XX.X customers. consistent of want cable, the new year Casa was and million. on our our which was capturing fixed existing Fixed million. and a was the the year globally new with $XXX.X to virtual revenue million. products. Turning portfolio, our QX $XX.X telco revenue and to cable fixed and again multiservice was entire for for profitable revenue had continues and QX seventh our on are XXXX our G.fast by XXXX, Fiscal cable the be customers products. quarter. BNG were been router I fiscal very

of XXXX, foundation that for see by revenue. volume hardware MSO our software sets future believe customers. a the we this expansion During purchases We did large our

for and saw purchase volatile virtual of revenue summary, very at grew are and for we in the these engagements orders have of with market top products. exceeded outlook number proud we us. not XXXX. The But base, deployments, diversified profitability. XXXX CCAP the I'm we XXXX, end our our changed the our pace of We While our we and pleased in threw fiscal line, In past of we for we performance range. highly our revised high conditions DAA year drove guidance

I long forward growth term remain delivering committed an base. Going profitable to with expanded customer

in of execution active our detail that year outline new of I our continual all sets fiscal Scott strong would the financial guidance strong to customer we robust in trials approximately more We to And a XXXX. growth are XXXX. the engagements many like begin in XX year growth Our for form with in stage RFPs that for believe products. have discuss We backlog. With and XXXX a capture to in for performance and of fiscal Scott? position opportunities. ask to our we these the

Scott Bruckner

Jerry and afternoon everyone. good you, Thank

our exceptionally results. strong had I'm we mentioned spectacular for quarter another Jerry year and CASA As pleased in very with a really

products. quarter operating digit majority top now and we fourth telco fixed targeting gross from adjusted of mix During and dollars our revenue revenue in growth line. in for comes the continuation our quarter-after-quarter saw significant the and profit a profit wireless the shift full-year double growth the of in EBITDA bode during year A leverage and so operating liquidity Increased the we've that been that our Higher quarter. increase the year. full-year drove

Okay.

$XXX.X compared turn XXXX XX% came Let to NetComm, Jerry exceeded million me compared full-year the year the as revenue XXXX total of up is half to for for over which we mentioned consolidated end our XX%. look range Revenue when if guidance second our first half of now revised results. top by XXXX and And in XXXX at grew at the we revenue year. the to second our

a on at a the revenue. Looking million million of XX% Cable a product Fixed year telco up for XX% lines the half And And revenue. revenue. of to year second was half year. XX% prior This or revenue at came XX%. this second compared a to or the at for XXX% XX% XX% or in revenue our on $XXX.X relatively comparison. wireless revenue XXXX $XX.X telco comparison was up was basis stable fixed compared and million up full year up of was was a $XXX.X

at in the XX% GAAP year. gross expenses half second is million our our margin growth revenue compared the GAAP again leverage. the up further half resources $XXX.X up from look over our revenue at is and a for Adjusted while of operating This XXXX. and for second for or profitability were And up of the our XX%, that's XX% XX.X% came we in the expenses And operating XXX%. year our or efficient gross While reducing That's XXXX. of investment increasing XX% XXXX, for in the Total comparison on cost if year down in structure to basis were for million. of is on of EBITDA with second P&L $XX.X of year-over-year financial it's That's XX% That's XXXX second the was what half fueling million. down expenses for year the XX%. half revenue revenue. from the $XXX.X also profit second half a down combined year of

adjusted XXXX EBITDA over half EBITDA. XX% Second up half second adjusted XXXX was

And we GAAP $XX.X of non-GAAP to GAAP $X.X provision $XX.X of year Additionally, loss operating on million as XXX% basis. income XXXX $X.X was of year-over-year. for million million. increase a this benefit income XXXX, fiscal operating of million a and XXXX. operating a on non-GAAP a is compared delivered was $XX.X an million in basis, profit for And a tax a

want you is able I anticipate by NOL we law. based to may Now, carrybacks impacted stimulus call XXXX being on rate having package. XXXX remember CARES effective note the don't last we've in benefit that positively a our Act current that from again for tax our to take that from tax similar been

on year, loss tax And was share $X.XX remember And $X.XX full million per deferred significantly that net that up year. that in our was primarily million that the $XX.X net at from from XXXX. -- we share is This basis. $X.X diluted or on assets GAAP due the $XX.X $X.XX for $XX.X in negative XXXX GAAP income to million the booked fully of we share. of came or per XXXX. For income the million valuation $X.XX allowance or or up per loss we share fully large share a Non-GAAP fully per the non-GAAP diluted per we diluted in that booked of net net is recorded booked diluted this GAAP fully income full-year significantly

take our to review results. a fourth let’s minute Now, quarter

at had in up X% QX. As We wireless support top XX% quarters. up And Revenue Jerry million was at in of growth in of revenue said, this was wireless or we backlog our million to million Fixed $XX.X healthy noted XX% Jerry million as of was contributor and largest quarter dollars at the And is had total fourth and or line one the was XX% revenue a $XXX.X telco XX% of revenue. QX revenue. cable $XX.X revenue XXXX. $XX.X strongest sequentially. our year-over-year and record

to QX. translated of operating up $XX.X OpEx was at in of liquidity of quarter and to and in which We on when debt that quarter shipped in quarter from now $XXX.X ship which million. for into of liquidity quarter XX% an the million significant to of inventory XXXX. Total $XX.X around GAAP ended receivables and our This QX Fourth XX% due We a That's improvement XX% is we This OpEx this GAAP in in GAAP lower revenue. had I million basis increased the million good times expect year-over-year was over was million income up balance a fourth revolver. in was year up the million comprised fourth X.X XXXX. was backlog $X.X and higher strong Turning And late of revenue. from XX% a year. margin $XXX.X very non-GAAP was from of operating turn EBITDA for LTM profitability million, was debt XX% sheet. a in now net XXXX million. a EBITDA. $XX.X came quarter percentage $XX.X will the of increase XX% position. $XXX.X including XXXX company adjusted our income adjusted first million of EBITDA cash, orders the And debt net our second were on that net the of is finally or leverage $XX.X sequentially to QX

Let guidance XXXX. me for conclude my remarks our with

be our gives Jerry an the starting focus XX efficient backlog us As excellent profitably. for And cost confident delivered XX point structure an our us mentioned on growth will makes year. that

of about guidance. our a notes Now quick XX couple XX

because progress expect the metric and we believe margin the and fluctuations think of related profitability not we that on deteriorate of product we're to mix. gross stating on we our clear margin based given this First, growth for is our to and best about be change assessing the business achieving objectives gross that way key up and margin is gross significantly. to run This down not

business So look and our income, and EBITDA deliver margin. for we progress are to gross cash able success of at irrespective that operating we

be we place GAAP guidance operating gross will and So income for providing margin. going in non-GAAP of forward

to due is NOLs allowance our benefits, the exploration where our in continue guidance we year inability estimate reflection recognize Unlike EPS our effective years a an tax to best benefits CARES this tax the effective rate. do from significant evaluation we of benefits have both to tax tax carry-forward Act be be our of we a position. expect to Second, saw we currently rate the prior and while higher of XXXX

at million. EBITDA, growth midpoint. for $XX midpoint. $X.XX start non-GAAP million, $XX Okay, million year-over-year million our guidance here's the to $XX growth that income, the EPS or that, $XX to ready million. to to or at $X.XX being to million million million to $XXX with said, cents, Operator? Q&A. XXXX. we're $X.XX income, operating to Revenue, XX.X% And XX% Adjusted operating $XX $XX $XXX GAAP and almost EPS, GAAP Non-GAAP $X.XX. year-over-year the

Operator

Thank you.

be Thank now conducting will We session. a Instructions] [Operator you. question-and-answer

question. question first Needham with Valera proceed & comes with Our from Please Company. Rich your

Rich Valera

Thank you.

Just for on maybe on outlook expect the you. And just all three in -- of the of any for business growth growth relative you or relative cable? and the them Do question still or Thank in different of color the sort segments those in flattish XXXX. a you expect the segments? expecting magnitude growth

Jerry Guo

Rich. here. Hi, Jerry

me not We we Let that our answer cable in in growth -- question. the line. model, business are counting on the product

that the wireless. growth So we’ll expect telco the side, continue in the and fixed to telco

Rich Valera

Got it. just one on any two see might And them, any growth which -- or color between of both? stronger the

Jerry Guo

is growth the do We wireless see strongest product Yeah. clearly line. on

Rich Valera

at net you any used all? I you How then backlog look strong saw And that building shipments backlog. next order over the the does on some -- quarters it. had and wireless? actually outlook for Do Got or very color of to wireless couple be expect

Jerry Guo

comments, received we see in the order will we replenish do throughout prepared to shipped we wireless QX. the In And continue significant orders already what was that that year. mentioned

Rich Valera

And supply chain point? of talk Got all affected lot just speaking about tech, generally you component wondering been there's then guys seeing of are on shortages at this it. at any side, the that? Has you that in a

Jerry Guo

that? Scott, do take to you want

Scott Bruckner

Absolutely. Yeah.

I just Sorry, coming was mute. off

material that year not to Casa were brought immune no product we to we chain. customers. these said XXXX well throughout disruptions supply deliveries manage been in that to COVID able in in our has as our calls delays to extremely the Rich, But previous So absolutely with the

impact a mitigate for information acknowledge risk But that that the guidance develop currently to from to And take So this year. we've XXXX the we've to guidance. to we shortages. with respect supply best and is about the in try continue XXXX, this to used coming budget any given, do steps we will available the

Rich Valera

to you it. of Appreciate it's said one Can XXXX, me final just it. there, rate give higher. us kind the you And range model, one for tax going Got Scott? some the for on be

Scott Bruckner

Yeah.

-- previously, little funky. I I've what bit do is our tax, So would said as a

dollars for do absolute we guide So I'm will what tax the is -- for pay XXXX. to what going I that

a expect $XX to paying so in to $XX the And of year. range we be for million million

Rich Valera

Perfect.

on strong And Thanks, to Okay. congratulations the gentlemen. finish a year.

Scott Bruckner

you, Rich. Thank

Operator

next comes Morgan with [Operator with Our Marshall Please your Meta from question proceed Instructions] Stanley. question.

Meta Marshall

or millimeter-wave wireless maybe Maybe and of just -- a is you're still a still And vast that the we small-cell-based? Great. with. that the then I question quite revenue that But products guess just is on the business Thanks. you -- majority mentioned majority could number revenue of customer the seeing of that traction should mentioned assume think other main more product, either a a you Thanks. you just when little of on XG could or trials customer question, product done of your to that bit as second being scale with the the are kind you with a kind or having speak that if customers.

Jerry Guo

Hi, Meta.

Let appeals to the me packet we did than more from answer access We of question. [ph] hardware small wireless that revenue and the from all and XG types products XG, And fixed wireless both products, radio, in have had software course. cells, and three XXXX. actually

believe to this we wireless though include to believe a And sight, shipment. the to we even to we to going continue As a this hold not expect to the revenue or have basically that travel we're point. trials year, millimeter-wave distances a ramp shift and we and And multiple with break XXXX. on the -- millimeter-wave well, millimeter-wave record couple millimeter-wave of XXXX do to the the line do we of records that at customers products did millimeter-wave with trials operators can conducted rent, in

Meta Marshall

better that wireless get of of a of you've could largely customers is you’ve how guys when new additional pipeline for Thanks. as And have you -- the kind added of pipeline? cleared where revenue out pipeline get on or recognize just of kind maybe was it still pipeline, to and feel visibility And the do it. new recognition you Got that sense qualified? from need that some

Jerry Guo

We with earlier are very than risks like the expect actually better acceptance in radio. the than have we other customer risks and there around year supply time we manageable this do that But that a outdoor last We -- but chain. like are view. visibility discussed our discussed much Scott

Meta Marshall

Great. Thanks.

Jerry Guo

do to quarter next thing only expect of bulk the get in the shipped the the as will that we would in I add we that couple of quarters. question Meta, said is this backlog previous

Meta Marshall

Thanks. Great.

Operator

There further time. over to the at Thank turn no for like are this you. closing would floor questions back comments. I any to Jerry

Jerry Guo

thank you the conference. Well joining conference I'm this for see at forward next looking you to call. guys

Operator

This concludes conference. today's

your lines you wonderful your disconnect at time. may for You this Have Thank a participation. evening.

Casa Systems (CASSQ) 19 Feb 212020 Q4 Earnings call transcript