Casa Systems entered 2023 with a wobbly foundation and impending loss of its top executive but remains confident it will be able to meet upcoming equipment requirements tied to a substantial investment last year by Verizon.

The vendor this week abruptly announced that founder and current President and CEO Jerry Guo would leave those positions and retire effective March 17. Guo will remain on the company’s board, which has retained an executive search firm to find a replacement for Guo.

In the meantime, CFO Edward Durkin will serve as interim CEO. Durkin joined Casa Systems a year ago, having previously served as CFO at Fuze and Actifio.

The news came as part of Casa Systems’ latest earnings release, which despite numbers topping modest expectations, ripped the carpet out from under the vendor’s stock price. However, overall numbers showed a significant drop in full-year revenues and net income plunging from a return of $3.2 million last year to a loss of $79.2 million this year.

Casa Systems’ stock plunged more than 45% in early Wednesday trading, significantly below the 1% drop of the broader Nasdaq.

Investors were likely spooked by operating hurdles laid out by the vendor. Durkin noted the vendor was beginning to make headway in terms of fulfilling its order backlog, which should boost revenues this year, but added that the impact would most likely be “back-end weighted.”

Durkin also noted that a “major North American cable customer” had pulled plans to use Casa Systems in their initial rollout of cable infrastructure.

“Although we will continue to receive maintenance revenue associated with that customer for 2023, we assume no future product revenues from their cable, broadband infrastructure upgrade project in our 2023 guidance,” Durkin said during the earnings call, according to a transcript.

Casa Systems has also tapped J.P. Morgan to help with extending a current loan payment that is due by year-end. Durkin admitted that the move “does bring into question going concern considerations, but again we're working hard on this with J.P. Morgan and plan to quickly address it well before” the fourth quarter.

One of those concerned investors could be Verizon, which last year acquired a nearly 10% stake in its long-time vendor. The deal included a $40 million investment that garnered Verizon an ownership share in the vendor, and a purchasing agreement could be valued at up to $140 million over the entire term.

Adam Koeppe, SVP for technology strategy and planning at Verizon, said at the time that the carrier was going to plough Casa System’s cloud-native 5G core platform into the carrier’s private network efforts. He explained that Verizon will use Casa Systems’ platform to deploy a 5G core or mobile edge computing (MEC) systems onto just about any infrastructure environment an enterprise customer might be running. This includes a customer’s private cloud or on-premises bare metal system.

“When we look at new functions that are coming onto our core network, our 5G core capabilities are all cloud native,” Koeppe told SDxCentral. “So it was really important for us to ensure that Casa provides us with the solutions that we’re working with them on are all cloud native so they fit right into our architecture very seamlessly, and the private network with MEC is a tremendous growth area.”

Verizon has throttled back its private wireless and MEC expectations, with CEO Hans Vestberg earlier this year specifically citing equipment concerns.

“We need certain radio base stations for private networks, different price ranges. We need modems for certain things. You need more than the handset and the macro sites that is now in there,” Vestberg said at Citi’s 2023 Communications, Media, and Entertainment Conference. “We would now have offerings for cheaper private 5G networks with certain suppliers and more high level, high quality. We didn’t have this optionality, and that’s why we’re now sort of seeing that we’re actually meeting the customer demands of building private 5G networks.”

Guo noted during the earnings call that Casa Systems’ ability to fulfill the agreement “remains on track, with Casa meeting all the key 2022 core deliveries and milestones called for in our contract with Verizon.”