Cambium Networks(US:CMBM)2024-08-08 23:50Financial Data and Key Metrics Changes - Revenues for Q2 2024 were $45.9 million, up 9% sequentially, driven by growth in the enterprise business and point-to-multipoint (PMP) business [4][8] - Adjusted gross margin improved to 33.5% from 22.7% in Q1 2024, primarily due to lower material costs and a better mix of higher-margin enterprise revenues [10] - Non-GAAP net loss for Q2 2024 was $7.1 million, compared to a loss of $12.7 million in Q1 2024 [10] - Cash provided by operating activities was positive at $2.4 million for Q2 2024, marking the first positive cash flow in six quarters [11] Business Line Data and Key Metrics Changes - The enterprise business grew 58% sequentially, while the PMP business saw a slight increase of 1% [8] - Point-to-point (P2P) business declined by 5% sequentially due to the completion of a large installation in the previous quarter [8] - EMEA region revenue increased by 78% sequentially, while North America saw an 18% decline [10] Market Data and Key Metrics Changes - North America experienced a decrease in P2P and PMP revenues, partially offset by higher enterprise revenues [10] - APAC region revenue increased by 25% sequentially, driven by higher enterprise and PMP revenues [10] - Latin America improved by 8% quarter-over-quarter [10] Company Strategy and Development Direction - The company is focusing on operational excellence, optimizing go-to-market strategies for enterprise, and streamlining supply chains [13] - Cambium Networks is positioned to benefit from the upcoming 6 gigahertz spectrum for PMP use, which is expected to enhance product offerings and market penetration [13] - The enterprise business is entering a new product cycle with WiFi 7, and channel inventories have been reduced [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's direction, indicating that the most challenging period has passed [13] - The company anticipates that lower channel inventories will drive increased revenues as demand from end users rises [5] - There are expectations for sequential improvement in Q4 2024, driven by growth in enterprise and PMP businesses [22] Other Important Information - Free cash flow for Q2 2024 was negative $1.8 million, with a cash balance of $42.6 million as of June 30, 2024 [11] - The company aims to reduce inventories to approximately 90 days outstanding, down from 157 days at the end of June [11] Q&A Session Summary Question: Clarification on gross margins and inventory levels - Management confirmed that the guidance for Q3 includes just under $2 million for excess and obsolete inventory, expecting a substantial reduction from previous quarters [16] - Inventory destocking is ongoing, with a quarterly range around $10 million [17] Question: Future outlook for point-to-multipoint revenues - Management indicated that while significant improvements in PMP revenues may not be seen until late 2025 or early 2026, there is optimism about future growth as customers prepare for 6 gigahertz services [19] Question: Full year forecast and fourth quarter expectations - The midpoint of the full year forecast suggests an improvement in Q4, with expectations of around $51 million in revenue, driven by enterprise growth and some recovery in PMP [22]