Casa Systems Inc (NASDAQ: CASA) stock fell 23.8% on August 15th, 2018 (as of 10:40 AM GMT-4; Source: Google finance) after the company in the second quarter of FY 18 has reported the adjusted revenue growth of 3.1 percent to $68.7 million in the second quarter of FY 18, missing the analysts’ estimates for revenue of $90.3 million.
Moreover, during the second quarter, the company experienced continued momentum in software-based capacity expansions, with revenue of $24.6 million, up 214% year-over-year. During the quarter, the company expanded into new geographies with new and existing customers. The company has posted in the second quarter of 2018, gross margin of 71.9%, compared to gross margin of 68.7% in the second quarter of 2017.
For FY 18, CASA expects full-year earnings to be in the range of 80 cents to 88 cents per share. CASA has slashed guidance in large part because some cable operators have delayed large-scale capacity purchases on centralized, chassis-based Converged Cable Access Platform (CCAP) products as they mull over plans focused on new distributed access architecture and the virtualization of some services. That scenario has caused Casa to cut revenue guidance for the rest of the year by about $50 million. Instead of 2018 revenues in the range of $380 million to $395 million, Casa lowered it to a range of $330 million to $350 million. Further, CASA revised guidance comes as MSOs continue to take a close look at distributed architectures that will push some key electronics closer to the edge of the network and set them up for the virtualization of some services and new technologies such as Full Duplex DOCSIS, an addition to DOCSIS 3.1 that will support multi-gigabit symmetrical speeds. But this transition is not happening overnight, and some MSOs are tightening capacity spending and being more deliberate as they shore up their product strategies. Meanwhile, the good news is that CASA didn’t lose any market share in Q2, as it saw channel shipments rise by about 30% and gained some new customers in new geographies, according to Guo. CASA also expects to see some “material” contribution from the company’s wireless and small cell product line in Q4
CASA has authorized the repurchase of up to $75 million of the Company’s common stock under a stock repurchase program.