Vecima said it paid $5.8 million Canadian dollars for Falcon V Systems, a startup that has developed network orchestration software and a test suite. Charter is Vecima's lead customer for that pair of products.
Vecima Networks paid $5.8 million Canadian dollars (US$4.12 million) to acquire Falcon V Systems, a Poland-based network orchestration technology specialist, according to a fiscal Q1 2025 financial report filed Thursday, November 14.
The acquisition of all outstanding shares of Falcon V includes cash of CA$5.2 million ($3.7 million), plus an additional CA$600,000 ($426,000) for "excess cash as defined in the agreement," Vecima noted. Vecima paid a similar amount – about $4.87 million – to acquire Nokia's cable access assets in 2020.
Announced last month, the self-described "tuck-in acquisition" of Falcon V includes a network orchestration software platform and a test suite. The orchestration piece includes a Principal Core designed to support multiple access networks, including hybrid fiber/coax (HFC) and fiber-to-the-premises (FTTP) and, eventually, wireless/mobile. The related test suite is designed to help operators speed up and scale their distributed access architecture (DAA) upgrades.
It's poised to be an important deal for Vecima, as Charter Communications is the initial lead customer for both products. Charter will use both as it moves forward with a multi-phased HFC network upgrade that includes a shift to DAA and a virtual cable modem termination system (vCMTS) in 85% of its cable plant.
Charter originally expected to complete that upgrade plan, but has pushed that plan to 2027 as it works to certify new software and other related technologies. Falcon V's platform is expected to help in that area. Vecima is also signed on to supply Charter with remote PHY nodes for its upgrade project and remote optical line terminals (OLTs) for fiber network deployments.
"They have to work through a significant process of verification on the complete software integration," Vecima President and CEO Sumit Kumar said of Charter.
Charter has already selected Harmonic for its vCMTS component. The operator hasn't announced a second source. Vecima introduced a vCMTS of its own about eight months ago that will compete in the market with Harmonic and CommScope.
Vecima's new vCMTS product is progressing through lab trials with a "lead tier-1" customer and is initiating lab trials with tier-2 and tier-3 operators, Kumar said on the company's earnings call. Vecima hasn't named that tier-1 customer, but Charter is the obvious candidate.
"We continue to set our sights on initial revenue contribution from vCMTS software possibly as soon as the latter part of this fiscal year," Kumar said.
Financial snapshot
Vecima posted fiscal Q1 revenues of CA$81.9 million ($58.25 million), up 33% from CA$61.5 million ($43.74 million) in the year-ago quarter.
Revenues in its video and broadband unit climbed 65% to CA$72.9 million ($51.84 million). Within that unit, sales of Entra-branded DAA products surged 76% to CA$68.3 million ($48.57 million).
Echoing what operators are saying, Vecima has "tempered expectations" this year for the Broadband Equity, Access, and Deployment (BEAD) program. It's become clear that money for that program won't start rolling in until 2026.
On the video side of the business, Vecima hopes to make financial headway via a new deal with Digital Harmonic that hands Vecima a global exclusive to sell its dh/KeyFrame Media Optimization product.
That product, which is being used by Fubo, uses AI techniques to improve image quality while reducing bit rates. Vecima demonstrated Digital Harmonic's video optimization technology at the SCTE TechExpo in Atlanta.
Light Reading will have more about this development next week.
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