Casa Systems, Inc.

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. If anyone should require operator 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 fourth quarter and full year 2020 ended December 31, 2020, this afternoon after the market closed. If you did not receive a copy of our earnings press 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 webcasted 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 we believe as of today and undertake no obligation to update these statements as a result of new information or future events. In addition to US 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 believe it will be helpful to investors to better understand our performance or business trends. And with that, I'd like to turn the call over to Jerry. Jerry?

Good afternoon, everyone. Thank you for joining us today as we discuss our fourth quarter and fiscal year 2020 results. We ended the fourth quarter and fiscal year 2020 with excellent results. Here are some of the highlights. we successfully delivered on our commitment in 2020 to grow profitably and to transform our business. Our fiscal year 2020 revenue and profitability exceeded our previously provided and revised guidance range with a double digit growth. 55% of our revenue in fiscal 2020 came from our growth drivers, wireless and fixed telco products and Wireless became the largest part of our business in Q4, contributing 42% of our revenue. We made significant customer advances with our growth products, demonstrating that major carriers continue to validate our technology over our competitors. Here are the numbers for fiscal year 2020. 26 new purchase orders for our 4G and 5G wireless products, including packet cores, radio access network products, and CBRS and 5G fixed wireless access devices. A major new customer for our recently launched 5G millimeter wave fixed wireless access device. Six new purchase orders for our virtual BNG router and multi-service router products. and four new customers for our fiber-to-the-distribution point products, and 14 purchase orders for cable distributed access and a virtual CCAP core. We achieved all of this despite the significant ongoing headwinds stemming from COVID-19. Once again, I have the highly talented and dedicated people of Casa Systems to thank for this. Their hard work and commitment are truly inspiring. Now onto our performance. Starting with Q4, we had one of our strongest quarters. We delivered record wireless revenue and we ended the quarter with a healthy backlog to support our top line growth in 2021. Total revenue for the fourth quarter was $120.5 million. a 7% increase year-over-year and a 14% increase sequentially. Wireless and fixed telco continue to represent the bulk of our business, delivering 60% of revenue during the quarter. For the full year, total revenue was $393.2 million, an increase of over 39% compared to fiscal year 2019. And if we compare the second half of 2020 to the same period in 2019, when our 2019 revenue included our netcom acquisition, we grew our revenue by over 16%. And in 2020, our focus on our operating model and cost structure paid off. We generated $55.3 million in adjusted EBITDA. This is a 131% increase relative to fiscal year 2019. Turning now to our product areas. In Q4, wireless revenue was $50.4 million. This is a 37% increase relative to the fourth quarter of 2019. Wireless revenue in fiscal year 2020 was $118.6 million. This is an increase of 98% relative to fiscal year 2019. Not only did we grow our wireless revenue, but we also increased the number of our wireless customers. We now have 28 wireless customers globally across all of our wireless product areas. 4G, virtual EPC, 5G cloud native packet core, small cell core, and radios. and 4G and 5G fixed wireless access devices. I want to call out the particular success we had in our fixed wireless access business. We now have customers globally for all of our fixed wireless access products. Our 4G devices, our CBRS devices, our 5G sub-6 devices, and our industry-leading 5G millimeter wave outdoor device that has been featured in several record-breaking 5G fixed wireless access distance trials globally. Finally, our wireless backlog remains quite robust. During Q4, we were successful in shipping a high volume of our Q3 wireless backlog. So net of all these shipments and with the buildup of new orders, our wireless backlog stands at just under $96 million. I see wireless as our most important growth driver in 2021 with the sales growth across our full wireless product portfolio. Turning now to fixed telco. Fixed telco revenue in Q4 was $22.1 million. In fiscal year 2020, fixed telco revenue was $98.8 million. This is an increase of 150% compared to fiscal year 2019. We saw growth in fixed telco across our entire portfolio. And we now have customers globally for all of our products. Our virtual BNG router, which has been deployed by EZ, the largest MSO in Mexico, our multi-service router, and our G-fast products. I want to highlight the progress we had in capturing new customers for our virtual router products. In 2021, We are focused on building on this success with the new and existing Casa customers. And finally on cable, cable continues to be very profitable and was again steady and consistent for the seventh consecutive quarter. Before cable revenue was $48.1 million, fiscal year 2020 revenue or $175.8 million. During 2020, we did see a large volume of hardware purchases by our MSO customers. We believe that this sets the foundation for our future software expansion revenue. While we have not changed our outlook for the pace of virtual CCAP and DAA deployments, I'm very pleased with the number of engagements and purchase orders we saw in 2020 for these products. In summary, we are proud of our performance in 2020, the past year through highly volatile market conditions at us. But for fiscal 2020, we exceeded the high end of our revised guidance range. We diversified our revenue base, we grew our top line, and we drove profitability. Going forward, I remain committed to delivering long-term profitable growth with an expanded customer base. Our strong execution in 2020 sets the stage for continual growth in 2021. We begin the new fiscal year with a robust backlog, and we have approximately 80 active customer engagements in the form of trials and RFPs for all of our growth products. We believe that we are in a strong position to capture many of these opportunities. With that, I would like to ask Scott to discuss our financial performance in more detail and to outline our guidance for fiscal year 2021. Scott?