Vecima flies high on DAA revenue

• Vecima posted “record” quarterly revenue of CAD $80.1M in its third quarter

• Sales from its Entra DAA portfolio and its VBS segment contributed to the growth

• The company also “ramped-up” delivery of Remote-PHY devices to Charter

Unlike some of its vendor peers, Vecima Networks has been doing pretty well for itself.

The company touted a “record” quarterly revenue of CAD $80.1 million (~$58.9 million USD) for the third quarter of fiscal year 2024. The stars of the show were Vecima’s Entra distributed access architecture (DAA) portfolio along with its Video and Broadband Solutions (VBS) segment.

Entra product sales of CAD $60.9 million ($44.7 million USD) were up 39% sequentially (but slightly down YoY from CAD $62.7 million – or $46 million USD – in Q3 2023). VBS sales increased 5% YoY to CAD $68.2 million ($50.1 million USD).

Vecima’s Entra revenue was fueled by the company’s Remote PHY deal (announced last year) with Charter. The operator is using Vecima’s Entra Remote PHY devices to upgrade its network to DOCSIS 4.0.

Fiscal Q3 saw a “ramp-up” of volume deliveries of Remote-PHY devices to Charter, according to Vecima CEO Sumit Kumar.  

“As we’ve mentioned previously, Charter intends to use our solution for a substantial portion of their footprint-wide cable access network upgrade to DAA,” he said on Wednesday’s earnings call.

“As such, it represents a major multi-year revenue opportunity for Vecima. And that’s only just beginning.”

Kumar added the company’s made “major strides” in new products during the quarter. Specifically, it reached certification of its Generic Access Platform (GAP) nodes with a “leading Tier 1 customer.”

Vecima’s GAP nodes allow operators to “easily transition to 10G and DOCSIS 4.0 technologies while protecting current network investments that they’re making,” he said.

How Charter and other operators roll out these nodes is something to keep an eye out on in the future, according to Dell’Oro analyst Jeff Heynen.

“These nodes will give Charter tremendous flexibility in how it introduces FTTH and edge processing capabilities into their network to complement its DOCSIS 3.1 Extended and DOCSIS 4.0 initiatives,” he told Fierce.

In general, Heynen noted Vecima’s earnings were “certainly positive,” especially given the first order flow from Charter for Remote PHY devices.

“That is definitely a good sign for both Vecima and Harmonic, who will benefit from Charter’s significant network upgrade plan,” he said. “Additionally, Vecima continues to add more customers in North America and Europe, as well as partnerships to address the larger European market, which will also see steady growth in RPD deployments to take advantage of the signal quality improvements they provide.”

Vecima said it now has 113 multiple system operator (MSO) customers worldwide, with 58 of those customers ordering Entra products. The company in March also introduced a virtual CMTS to its Entre Cloud platform.

On the fiber side, Kumar said Vecima has completed lab trials and initiated field trials for its Entra All-PON shelf, which allows operators to “cost-effectively deploy fiber-to-the-premises in any market or hub deployment configuration.”

Notably, Vecima recently announced its intent to acquire Casa System’s cable business. If the transaction is approved (and nobody else decides to bid for the assets), Vecima expects to close the deal sometime in June 2024.

At press time Vecima’s stock was trading at $16.90 USD.