Cambium (CMBM) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock ma ...

Financial Data and Key Metrics Changes - Cambium Networks reported revenues of $43 million for Q3 2023, a decrease of 28% quarter-over-quarter and 47% year-over-year [41] - Non-GAAP gross profit for Q3 2023 was $11.9 million, down $29.7 million compared to the prior year and down $18 million sequentially [12] - Non-GAAP net loss for Q3 2023 was $12.1 million, or a loss of $0.44 per diluted share, compared to non-GAAP net income of $11.3 million or earnings of $0.4 per diluted share for Q3 2022 [13] - Non-GAAP gross margin was 27.7%, down from 51.3% in Q3 2022 [87] - Cash used in operating activities was $200,000 for Q3 2023, compared to cash provided by operating activities of $2.2 million for Q3 2022 [30] Business Line Data and Key Metrics Changes - Revenues from point-to-multi-point (PMP) products decreased 12% sequentially and were down 10% year-over-year due to high channel inventories and anticipation of FCC approval for six gigahertz spectrum [97] - Point-to-point (PTP) revenues decreased 37% sequentially but grew 3% year-over-year, impacted by temporary US federal budgetary issues [21] - 28 gigahertz fixed products reported record revenues, increasing 144% sequentially during Q3 2023 [5] Market Data and Key Metrics Changes - North America, CALA, and APAC regions weakened sequentially, while AMEA region grew 111% quarter-over-quarter, driven by demand from a large 28 gigahertz customer [42] - Total devices under cloud management in Q3 2023 surpassed one million, increasing approximately 4% from Q2 2023 and up over 17% year-over-year [24] Company Strategy and Development Direction - The company is implementing a "focus and simplify" strategy to build core platforms for multiple solutions, improving efficiency and reducing costs [4] - Cambium aims to emphasize sectors that can be differentiated through products or services, with a focus on returning to higher levels of profitability [80] - The company plans to rationalize its product portfolio, emphasizing best-in-class products and consolidating offerings onto a unified platform [64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to lower revenue levels but noted benefits from a cost reduction plan aimed at aligning costs with revenues [9] - The company expects a significant portion of delayed defense orders to ship during Q4 2023, anticipating stronger PTP revenues [21] - Management expressed optimism about future opportunities, particularly in defense revenues and the expected ramp-up of six gigahertz products [66] Other Important Information - Cambium's cash balance was $27.5 million as of September 30, 2023, a decrease of $4.4 million from Q2 2023 [90] - The company expects to realize annualized cash savings of $24 million in 2024 through operational and capital expenditure reductions [40] Q&A Session Summary Question: Can you talk about the competitive environment for enterprise products? - Management noted that the industry is facing supply chain challenges and that they are not leading in discounting but are following others to maintain prices [38] Question: What is the current headcount? - The overall headcount, including contractors, is in the 800 range [105] Question: Can you provide an update on gross margin recovery? - Management expects to return to historical gross margin levels in the 50% range once headwinds are cleared [115] Question: What is the expected impact of government programs like BEAD? - Management indicated that while BEAD funding is primarily focused on fiber, it may favor Cambium in the future, but timing remains uncertain [56] Question: What are the expectations for cash flow and breakeven? - Management stated that they will provide more details in the next quarter's call, but they are preparing for potential cash flow challenges in early 2024 [118]

Basis of Presentation There have been no material changes to the Company's significant accounting policies disclosed in the 2022 Form 10-K, Part II, Item 8. Note 2. Balance sheet components Inventories, net consisted of the following (in thousands): The increase in inventory is primarily due to lower demand for our PMP products and a slowdown in Enterprise product orders due to higher channel inventory. Inventory reserves are established for estimated excess and obsolete inventory equal to the difference be ...

Financial Performance - Cambium Networks reported revenues of $59.5 million for Q2 2023, a decrease of 14% year-over-year and 23% quarter-over-quarter, primarily due to a significant decline in Enterprise product revenues [26][34] - Non-GAAP gross margin was 50.3%, an increase of approximately 140 basis points compared to Q2 2022, driven by a higher mix of PTP defense products and price increases implemented in November 2022 [35][36] - Non-GAAP net income for Q2 2023 was $900,000, or $0.03 per diluted share, down from $5 million, or $0.18 per diluted share, in Q2 2022 [66] Business Line Performance - Enterprise revenues declined 82% sequentially and 73% year-over-year, attributed to a slowdown in sales through the Enterprise channel and increased competition [27][22] - PTP revenues increased 39% sequentially and 60% year-over-year, supported by strong defense contracts [27][72] - PMP revenues grew 20% sequentially but were down 5% year-over-year as service providers transitioned to new gigabit technologies [12][27] Market Performance - The EMEA and North American regions experienced significant declines in Enterprise revenues, contributing to the overall revenue drop [26][34] - Cambium expanded its channel presence by adding approximately 390 net new channel partners sequentially and about 1,600 year-over-year, representing a 3% sequential and over 13% year-over-year increase [16] Company Strategy and Industry Competition - Cambium has initiated a $14 million annualized cost reduction program to protect profitability while addressing challenges in the Enterprise business [9][33] - The company is focusing on individualized strategies with major distributors to expedite the movement of Enterprise products through the channel [24] - Increased competition has led to aggressive pricing strategies from competitors, impacting Cambium's market share [23][107] Management Commentary on Operating Environment and Future Outlook - Management acknowledged a severe slowdown in the global economy, resulting in project cancellations and delays, particularly in the EMEA region [8][85] - The company expects sequential growth in Enterprise revenues in Q3 and Q4 2023, with a return to a normalized run rate in the first half of 2024 [43][69] - Cambium anticipates continued strong performance in its PTP business, driven by defense contracts, and expects PMP revenues to grow with the anticipated FCC approval of 6 GHz products [40][72] Other Important Information - Cambium's cash totaled $32 million as of June 30, 2023, reflecting a decrease due to higher inventories [39] - The company is actively managing channel inventories and expects to see a reduction in excess inventory levels in Q3 2023 [67][94] Q&A Session Summary Question: Why did Cambium opt not to preannounce this quarter? - Management indicated that the decision was based on multiple changes, including revenue misses and management transitions, which warranted a unified announcement [76] Question: What is the current assumption regarding AFC approval? - Management expects the 6 GHz approval to occur around September or October, which will enable customers to deploy networks [113] Question: How does Cambium plan to clear out inventory with distribution channels? - The strategy includes a combination of pricing adjustments, demand generation, and marketing support to incentivize distributors [95] Question: What is the expected normalized run rate for Enterprise revenues? - Management anticipates a quarterly run rate of between $20 million and $30 million by Q2 of next year [119] Question: What are the challenges faced in the macro environment? - The company noted a slowdown in EMEA and challenges related to interest rates affecting construction and infrastructure projects in North America [132]

During the three-month period ended June 30, 2023, there were no significant changes to our critical accounting policies and estimates. Please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2022, filed on February 27, 2023, for a more complete discussion of our critical accounting policies and estimates. Excluding the impact of changes in interest rates and th ...

Cambium Networks Corporation. (NASDAQ:CMBM) Q1 2023 Earnings Conference Call May 8, 2023 4:30 PM ET Company Participants Peter Schuman - Vice President, Investor & Industry Analyst Relations Atul Bhatnagar - President and Chief Executive Officer Andrew Bronstein - Chief Financial Officer Conference Call Participants Simon Leopold - Raymond James Scott Searle - ROTH Capital Partners Samik Chatterjee - JPMorgan & Chase George Notter - Jefferies LLC Erik Suppiger - JMP Securities Paul Essi - William K. Woodruf ...

Cost to obtain a contract Sales commissions are incremental costs of obtaining a contract. The Company has elected to recognize these expenses as incurred, as the amortization period of these costs is one year or less. Note 16. Leases The Company has operating leases for offices, vehicles and equipment. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the lease term. Right-of-use assets and operating lease liabilities ...

Gross margin increased from 47.9% in 2021 to 48.9% in 2022. The increase reflects price increases introduced in the fourth quarter of 2021 and increased revenue in higher margin products, such as Wi-Fi and software subscriptions partially offset by higher production costs due to increases in component charges as a result of component shortages and increases in component costs, and higher logistics costs to meet demand, including costs of alternative distribution, shipment and transportation modes as a resul ...

Cambium Networks Corporation (NASDAQ:CMBM) Q4 2022 Earnings Conference Call February 16, 2023 4:30 PM ET Company Participants Peter Schuman - Vice President, Investor & Industry Analyst Relations Atul Bhatnagar - President and Chief Executive Officer Andrew Bronstein - Chief Financial Officer Conference Call Participants Simon Leopold - Raymond James Angela Jin - JPMorgan Scott Searle - ROTH Capital Partners Erik Suppiger - JMP Securities Paul Essi - William K. Woodruff Tim Savageaux - Northland Capital Mar ...

Cambium Networks Corporation (NASDAQ:CMBM) Q3 2022 Earnings Conference Call November 3, 2022 4:30 PM ET Company Participants Peter Schuman - Vice President of Investor and Industry Analyst Relations Atul Bhatnagar - President and Chief Executive Officer Andrew Bronstein - Chief Financial Officer Conference Call Participants Scott Searle - ROTH Capital Partners Paul Essi - William K. Woodruff Operator Good afternoon. My name is Sean, and I'll be your conference operator today. At this time, I would like to w ...