Casa Systems, Inc.

Greetings and welcome to the CASA Systems third quarter 2020 earnings call. At this time, all participants earn a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator or technical assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jackie Marcus. Thank you, Jackie. You may begin.

Thank you, operator, and good afternoon, everyone. Casa Systems released results for the third quarter of 2020 and is September 30, 2020, this afternoon after the market closed. If you did not receive a copy of our earnings release, you may obtain it from the investor relations section of our website at investors.casasystems.com. With me on today's call are Jerry Guo, Chief Executive Officer, and Scott Bruckner, Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of our website. Before I turn the call over to Jerry, I'd like to note that today's discussion will contain forward-looking statements based on the business environment as we currently see it, and as such, does include certain risks and uncertainties. Please refer to our press release and our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the projections described in today's discussion. Any forward-looking statements that we make on this call or in the earnings release are based upon information that we believe as of today, and we undertake no obligation to update these statements as a result of new information or future events. In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles. During the call, we may use non-GAAP measures if we believe it is useful to investors or we believe it will help investors better understand our performance or business trends. And with that, I'd like to turn the call over to Jerry. Jerry?

Good afternoon, everyone, and thank you for joining us today as we discuss our third quarter results. The third quarter presented a number of highlights for us. I'm very pleased to share that our financial, operational, and strategic momentum accelerated during the third quarter. We delivered exceptional top-line performance with double-digit revenue growth both year-over-year and sequentially. The majority of our revenue in the quarter came from the growth drivers of our business, our wireless and fixed telco products. We had several wins in our fixed telco and wireless segment in North America, Europe, and APAC. This again indicates that major carriers are validating our technology over our competitors. Demand for our growth products increased. This is evident in our wireless backlog, which grew to $115 million net of shipments. We now have good visibility into Q4, so we are raising our four-year revenue guidance. This represents an important turning point for CASA. What's particularly gratifying for us is that this inflection point comes during a challenging business environment globally. We have the people of CASA Systems to thank for this. The hard work and commitment they demonstrated during these unprecedented times was truly inspiring. They are without a doubt best in class, and they have my deepest gratitude. Now onto the performance. During Q3, we grew our top line. We diversified our customer base. We grew our cash position, and we improved profitability. Third quarter total revenue were $105.7 million. a 29% increase year-over-year and a 27% increase sequentially. This marked a significant improvement in our business that was driven by continued robust growth in fixed telco and wireless. As expected, cable was steady and consistent, accounting for $42.1 million of revenue. Wireless and fixed telco now represent the bulk of our business. delivering 60% of revenue. This validates the strategic direction in which we have been taking our company. So as we look at the road ahead, one of the biggest challenges we have is to dispel the commonly held misconception about the nature of our business. To some, we are seen primarily as a cable supplier in transition. That characterization is simply not accurate anymore. With our current revenue mix, to say that Casa is primarily about cable is like saying that Amazon is only about books. As we achieve this milestone, we continue to add new customers for our wireless and fixed telco products. This further strengthens the foundation of growing new product revenue in Q4 and beyond. Turning to our product areas, wireless revenue for the third quarter was $29.2 million, a 40% increase year-over-year and a 76% increase sequentially. Wireless revenue in Q3 was fueled by a mix of organic and acquired products. 4G, 5G cloud-native core, fixed wireless CPE, small cell core, and small cell radios. Additionally, during the quarter, we continued to lay the foundation for additional 5G revenue. We unveiled the first high-power 5G mmWave customer-premise access device, which are now in customer trials. We added new wins in enterprise small sales, part of our focus on private and enterprise networks. and our 4G, 5G cloud native core with the wireless operators in North America and Asia. And we are deploying a large-scale 5G fixed wireless access project for a tier one mobile operator in North America. All of this serves as a further proof point that CASA will be a key player in 5G. In Q3, we also saw significant progress across our fixed telco product portfolio with a revenue of $34.5 million, representing year-over-year growth of 92% and sequential growth of 43%. In Q3, we also saw new Tier 1 fixed telco customer wins in Europe and North America. Turning to cable, revenue was $42.1 million. Cable sales over the past six quarters have been relatively steady. To give you a clear sense of the degree to which our business has been transformed, our percentage of revenue from cable has gone from almost 100% a little over a year ago to now just 40%, all related to the growth of our wireless and fixed telco revenue. This is a pivotal shift in our business. In Q3, as we have seen the last two quarters, COVID-19 continued to drive demand for our products. On supply chain, short-term shipment delays have been resolved. What we continue to address are limited cases of component lead times for some of our products. This could push some of our backlog into Q1. Finally, I'd like to update you on our outlook for the fourth quarter and the fiscal 2020. Due to increased demand for our wireless and fixed telco products, we believe that we are on track to exceed the high end of our revenue guidance range. Based on our performance year to date, as well as our enhanced visibility from our large backlog, we are raising our full year revenue guidance to 370 to 380 million dollars. Scott will provide more detail in his remarks in a moment. In summary, we are outperforming our expectations in spite of a challenging macroeconomic environment. I am optimistic about our ability to drive long-term profitable growth with the more predictable results, and expanded customer base. While there is more work to be done, we are well on our way to achieving these goals. With that, I would like to ask Scott to discuss our financial performance in more detail.