Shares of Casa Systems (CASA -5.13%) were plunging Thursday after the 5G and broadband technology specialist reported that its revenue had tumbled in the first quarter and management suspended its guidance for the year. Supply chain challenges were the main reason for the disappointing performance.
As a result, the stock was down 21% as of 12:45 p.m. ET. Meanwhile, after a rally on Wednesday, the tech-heavy Nasdaq Composite was down by 5% at that point in Thursday's session, largely on macro-economic concerns.
Casa Systems' revenue for the quarter came in at $64.4 million, down 38% from the year-ago period.
Management said demand remained high as its backlog and sales pipeline grew, but supply chain issues left it unable to fulfill some orders. The top-line shortfall also weighed on the bottom line. The company reported an adjusted EBITDA loss of $12.1 million, compared to an adjusted EBITDA profit of $20.2 million in the prior-year period. It booked an adjusted loss of $0.35 per share compared to a profit of $0.11 per share in Q1 2021.
"While the significant supply chain headwinds were a disruption to our near-term financial results, our underlying business fundamentals and the overall demand for our products remains very healthy," President and CEO Jerry Guo said in the Q1 earnings release. "Casa recently secured multiple significant customer wins, including a multi-year partnership with Verizon to provide 5G Core Network Functions to help power Verizon's Mobile Edge Computing service offering."
In addition to the poor Q1 performance, investors were disappointed that Casa pulled its guidance for the full year "[d]ue to various uncertainties, including most significantly supply chain challenges."
Since Casa relies on third-party manufacturers for its equipment, it has little control over supply chain delays, and given the recent COVID-19 lockdowns in parts of China, the situation seems unlikely to resolve itself in the near future.
While the increase in Casa's backlog is encouraging, 2022 is shaping up to be a tough year for the company.