Arris reported a 4% year-over-year revenue decline in the second quarter to $1.664 billion, driven partly by the subscriber losses experienced at AT&T satellite platform DirecTV.
Revenue from CPE sales declined 1.2% to $1.156 billion in the quarter, with set-top sales falling 17.8% year over year. “Satellite shipments were lower as compared to Q1 2017 in light of the DirecTV subscriber growth challenges,” conceded Arris CPE Chief Larry Robinson. (The comments come courtesy of a Seeking Alpha transcript.)
DirecTV lost 156,000 customers for its satellite platform in the second quarter.
The leading vendor to the global pay TV industry did, however, secure a deal to supply Altice with video gateways during the second quarter.
“This key win will not only provide us deployment opportunities in the Altice USA systems, but it also enables business in their European properties,” Robinson said.
Meanwhile, Arris CEO Bruce McCleland said the company is “racing to the finish line” on development of WorldBox 2.0, the second iteration of Charter’s QAM/IP video platform.
Overall, 58% of Arris’ CPE sales in the quarter came from video equipment.
DOCSIS 3.1: As for the other 42%, the broadband segment saw a 17.8% spike in sales, with Arris reporting record volume shipments of DOCSIS 3.0 and 3.1 platforms. Arris said its customers have numerous DOCSIS 3.1 trials and deployments underway.
For its part, Arris’ Network and Cloud business saw sales drop 9% year over year to $511 million.
However, group chief Dan Whalen spoke optimistically about the sales potential of distributed architecture gear, with projected commercial deployments ramping up in the first quarter of next year.
DAA: “We're in trials today with both our E6000 operating as a virtual MAC core and remote PHY modules in our existing fiber node platforms,” Whalen said. “This is a great investment protection story for our customers.”
“We’ve got a range of customers, some who are very interested in the merits of a distributed architecture,” he added. “The real value there is moving from analog optics to digital optics and being able to have longer fiber runs to be able to have better efficiency on the network and more capacity. So that's, in a nutshell, kind of the value proposition.”
RUCKUS PURCHASE: Arris, meanwhile, reiterated its position that its delayed $800 million Ruckus Wireless purchase will finally close in the fourth quarter.
“The addition of the Ruckus portfolio opens many new doors for Arris, and the convergence of wireline and wireless networks is certainly front and center in every one of our customer's minds,” McClelland said. “The wireless LAN addressable market alone will be in excess of $6 billion in 2018, and with the complementary wired switching portfolio, 2018 is shaping up to be an exciting and transformative year for Arris.”