Casa Systems reports third quarter 2020 financial results

ANDOVER, Mass. -- Casa Systems, Inc. (Nasdaq: CASA), a leading provider of physical and cloud-native infrastructure technology solutions for mobile, cable and fixed networks, today announced its financial results for its third quarter ended September 30, 2020. 

Third Quarter 2020 Financial & Operational Highlights 

Revenue of $105.7 million.
Gross margin of 49.7% driven by strong demand for hardware with year-to-date gross margin of 50.7%. Gross profit of $52.6 million.
GAAP net income of $3.5 million or $0.04 per fully diluted share.
Non-GAAP net income of $5.9 million or $0.07 per fully diluted share.
Adjusted EBITDA of $17.0 million.
Raising full year 2020 revenue guidance. 

“Our performance in the third quarter further exemplifies our ability to execute our growth strategy,” said Jerry Guo, Casa Systems’ President and Chief Executive Officer. “We delivered exceptional top-line performance with double-digit revenue growth both year-over-year and sequentially, driven largely by our wireless and fixed-telco products. Additionally, we saw several wireless core and fixed-telco wins with major operators in North America, Europe, and APAC, providing further validation of the strength of our technology. Going into the fourth quarter and beyond, we believe that we are well-positioned to take advantage of the 5G acceleration and shifts in the cable industry to expand our footprint, diversify our revenue mix, and drive greater profitability and free cash flow. As such we are raising our revenue guidance to reflect our anticipation of continued success in the fourth quarter.” 

Scott Bruckner, Casa Systems’ Chief Financial Officer, added, “We are extremely proud of our performance and continued financial strength in the current macroeconomic environment. During the third quarter we saw significant year-over-year and sequential growth in our revenue, operating profit, GAAP and non-GAAP EPS and EBITDA. Additionally, we added to our growing cash balance, which combined with our increased EBITDA is helping to decrease our financial leverage. Finally, our substantial wireless backlog, which grew to $115 million, gives us better visibility into the revenue prospects of our growth products in the fourth quarter and beyond.” 

To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), we are presenting non-GAAP financial measures in this press release. A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”. 

Financial Outlook 

For the fiscal year 2020 we now expect: 

Revenue between $370 million and $380 million
Gross Margin at the low end of our guidance range of 50% and 60%
GAAP net income between $4 million and $10 million and Non-GAAP net income between $7 million and $13 million Adjusted EBITDA between $38 million and $44 million
GAAP diluted net income per share between $0.05 and $0.10 and Non-GAAP diluted net income per share between $0.09 and $0.14 

Guidance for non-GAAP financial measures excludes acquisition costs and other non-recurring expenses, which are one-time non-recurring charges; stock-based compensation, which is a non-cash charge; adjustments to the tax provision for the CARES Act; and the resulting tax effect of these excluded items. We have not reconciled the non-GAAP metrics as to which we provide guidance to their most directly comparable GAAP metrics because certain items that impact these excluded measures are uncertain, out of our control and/or cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation of the non-GAAP financial metrics included in our guidance to the corresponding GAAP measures is not available without unreasonable effort.