Fixed and mobile vendor Casa Systems struggled in 2022 thanks in large part to the supply chain issues that plagued the industry at large, but the company believes its fortunes will finally change in the back half of 2023. Among other factors working in its favor, the company cited an expected uptick in cable operator spending on distributed access architecture (DAA).
In a preview of its Q4 2022 earnings results, Casa Systems said it expects to report revenues of between $83 million and $84 million for the three months ended December 31. While that would represent roughly a 20.5% drop at the midpoint year on year from $105.1 million, the company pointed out it would amount to approximately 25% growth sequentially. That quarter-over-quarter momentum was driven by growth in its Cable and Access Device segments.
“As we enter 2023, we are looking forward to improved financial results mid-year and during the second half of 2023 as we capitalize on many favorable market dynamics, including the increased Cable MSO demand for our next generation Virtual CCAP and Remote PHY solutions, which are now successfully deployed at several large Cable MSOs,” CEO Jerry Guo said in a statement. Remote PHY and virtual Converged Cable Access Platforms (CCAPs) are part of the distributed access architecture cable operators are adopting.
Guo added the expected jump in demand is supported by publicly announced cable operator spending plans as well as an independent survey of 50 operators conducted last year which found all planned to deploy virtual CCAP solutions over the coming two years. The latter comment appeared to refer to a report Dell’Oro Group issued in November, which found 100% of operators either had or planned to deploy a virtual cable modem termination system (vCMTS) within 24 months. At the time, Dell’Oro VP Jeff Heynen named Casa Systems as one of three vendors who stood to gain the most from the transition.
Harmonic, one of the other vendors Heynen named as an expected beneficiary, is already seeing the impact of the DAA transition thanks in large part to business from Comcast.
In a fresh forecast issued this week, Dell’Oro tipped spending on cable distributed access equipment to hit $1.5 billion by 2027.
Casa Systems has not yet set a date for the release of its full Q4 2022 results.