Cambium Networks(US:CMBM)2022-08-07 12:01Financial Data and Key Metrics Changes - Cambium Networks reported revenues of $69.3 million for Q2 2022, a 12% increase sequentially but a 25% decrease year-over-year [8][33] - Non-GAAP gross margin was 48.9%, improving by 110 basis points sequentially but decreasing by 110 basis points year-over-year [35][36] - Non-GAAP net income for Q2 2022 was $5 million, or $0.18 per diluted share, compared to $12.9 million, or $0.45 per diluted share for Q2 2021 [40] - Adjusted EBITDA for Q2 2022 was $7.8 million, or 11.3% of revenues, down from $18.4 million, or 19.9% of revenues for Q2 2021 [41] Business Line Data and Key Metrics Changes - The Point-to-Multi-Point (PMP) business revenues decreased by 9% sequentially and 53% year-over-year due to sluggish demand for legacy products [12] - The Point-to-Point (PTP) business increased by 7% sequentially and 12% year-over-year due to higher shipments [13] - The enterprise business generated $24 million in revenues, a 55% sequential increase and a 31% year-over-year increase, driven by strong demand for Wi-Fi 6 solutions [14] Market Data and Key Metrics Changes - Cambium's backlog increased by 5% quarter-over-quarter and 29% year-over-year, indicating strong demand [9][33] - The company experienced strong orders in North America for enterprise Wi-Fi, with significant wins in various sectors including hospitality and federal defense [16][17][18] Company Strategy and Development Direction - Cambium is entering a new growth S-curve, anticipating accelerated growth in high-performance broadband networks over the next five years [9] - The company is focusing on expanding its enterprise solutions and enhancing its product offerings, including the upcoming 6 gigahertz products [22][49] - Cambium aims to maintain a competitive edge through affordability and performance in its product offerings, particularly in the mid-market segment [77] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovering revenues in Q3 2022, supported by a strong backlog and improved supply chain conditions [9][44] - The company expects continued growth in the enterprise business, projecting over 45% growth for the calendar year 2022 [10] - Management acknowledged ongoing supply chain challenges but indicated improvements are expected, particularly in the second half of 2022 [66][88] Other Important Information - Cambium's cash totaled $45.9 million as of June 30, 2022, reflecting higher earnings and improved working capital [43] - The company plans to roll out new products, including a smart antenna for the PTP business and a Network Service Edge solution for software and subscription services [25][49] Q&A Session Summary Question: What is the expected mix for the balance of the year? - Management expects the enterprise business to continue growing and anticipates stabilization in PMP revenues by late Q3 or early Q4 [54][55] Question: How do government stimulus programs RDOF and BEAD contribute to the business? - Management expects wireless awards from RDOF to come through in the first half of 2023 and anticipates BEAD funding to be released in late 2023 or early 2024 [59][60] Question: What was the linearity of revenues during the June quarter? - Revenue was heavily weighted towards the last month of the quarter due to the gradual recovery from COVID-related disruptions [64] Question: What is the confidence level for Q4 guidance? - Management expressed optimism for Q4 due to improving supply chain conditions and strong demand for new products [88][89] Question: Can you quantify the backlog? - While specific numbers were not disclosed, management indicated that backlog is higher than the previous quarter, with significant portions in the enterprise market [82]