Vecima ended calendar 2022 (its fiscal Q2 2023) on a high note, growing revenue 75% year on year to a new quarterly record in the final three months of the year. The gains largely came from the vendor’s Entra portfolio of cable and fiber products. But while momentum is expected to continue in 2023, executives warned supply chain issues could impact its ability to deliver orders on time.
Consolidated revenue climbed to CAD $76.2 million, with net income reaching CAD $8.1 million. Nearly three-quarters of overall revenue – or CAD $55.7 million – came from sales of Vecima's Entra distributed access architecture (DAA) products. Entra revenue itself more than tripled year on year from CAD $18.5 million.
Sumit Kumar, Vecima’s CEO, said on an earnings call fiber was a “big part” of the Entra story in calendar Q4, with uptake on this front driven in part by rural broadband deployments in the U.S. He also cited “solid demand” for its cable access products, including Remote-PHY and Remote-MAC PHY nodes.
The CEO noted Vecima is now selling Entra to 50 operators and has engaged with a total of 101 operators globally to date, up from 80 a year ago. Already it is seeing scaled deployments among several Tier 1 operators, Kumar said, with some further along and others just beginning to ramp rollouts.
Kumar didn’t name any of its customers, but U.S. cable operator Charter Communications is likely among them. The operator’s capital spending was up significantly in Q4 and it indicated on an earnings call that it expects to ramp rural deployments in 2023. CEO Chris Winfrey specifically stated that as it expands in rural markets and upgrades its existing network “what we'll be deploying here allows a fiber drop as a Remote OLT inside of the node.”
Indeed, Dell’Oro Group VP Jeff Heyen told Fierce “the real story for Vecima is in Remote OLTs.”
He explained the calendar Q4 results were somewhat expected given momentum for the vendor’s Remote OLT products had already grown significantly throughout the first three quarters of 2022. “That is clearly continuing, driven specifically by the North American market,” he said.
According to Kumar, Vecima already has “multiple quarters of backlog at the current top line run rate.” While it’s working to mitigate supply chain issues to meet demand in anticipation of further Entra growth, he warned “disruptions continue to have the potential to interfere with timely order delivery while also increasing expedite costs and putting pressure on margins.”
This story has been updated to note Vecima's earnings are in Canadian dollars.