Cambium Networks(US:CMBM)2020-11-08 04:24Financial Data and Key Metrics Changes - Cambium Networks achieved revenues of $73 million for Q3 2020, exceeding the high end of the previous outlook of $64 million to $67 million and matching the preliminary revenues announced earlier [8][26] - Non-GAAP diluted EPS was $0.29, surpassing the high end of the previous outlook of $0.14 per diluted share [8][26] - Revenues increased by 17% quarter-over-quarter and 11% year-over-year from $65.7 million [26][27] - Non-GAAP gross margin was 49.7%, up 100 basis points year-over-year and 50 basis points sequentially [29][30] - Non-GAAP operating margin improved to 14.6%, up from 8.8% in Q3 2019 and 10.4% in Q2 2020 [31] Business Line Data and Key Metrics Changes - Point to Multipoint (PMP) business grew 7% sequentially and 12% year-over-year, driven by strong demand for CBRS solutions [8][9] - Point to Point (PTP) business improved 43% quarter-over-quarter and 12% year-over-year, reflecting rising demand for backhaul and federal business [9][27] - Enterprise cloud-based Wi-Fi business grew 30% sequentially, aided by the success of new Wi-Fi 6 solutions [9][27] Market Data and Key Metrics Changes - North America represented 53% of revenues, growing 19% sequentially, while EMEA decreased 1% quarter-over-quarter [28] - CALA region achieved record revenues, growing 96% quarter-over-quarter, while APAC revenues grew 4% sequentially [28] Company Strategy and Development Direction - Cambium Networks is focusing on expanding its product portfolio with new Wi-Fi 6 and 60-gigahertz solutions, aiming to deliver fiber-like performance at lower costs [5][6] - The company is entering urban markets for the first time, expanding its serviceable available market (SAM) [6][7] - Cambium aims for long-term top-line growth in the mid-teens and adjusted EBITDA in the upper teens as a percentage of revenues [38][39] Management's Comments on Operating Environment and Future Outlook - Management noted that demand for broadband communications remains strong due to work-from-home trends accelerated by COVID-19 [5][6] - The company expects continued growth driven by new product introductions and the adoption of CBRS-compatible solutions [38][39] - Management expressed confidence in achieving mid-teens growth in 2021, despite uncertainties in the macro environment [56][58] Other Important Information - Cambium Networks added over 540 new channel partners sequentially and over 2,100 year-over-year, representing a 33% increase [25] - The company plans to launch a premium version of its cnMaestro cloud management software, named cnMaestro X, which will be subscription-based [24] Q&A Session Summary Question: Can you discuss the sequential progression of different product lines and the impact of 60-gigahertz? - Management indicated that PTP remains lumpy but is showing strength due to increased backhaul demand, while 60-gigahertz is in early deployment stages with a strong pipeline [41][42] Question: Is there a material contribution from 60-gigahertz in Q4? - Management stated that while there will be some contribution from 60-gigahertz, significant revenue acceleration is expected in 2021 as trials convert to deployments [46][47] Question: What are the key drivers for growth in 2021? - Management highlighted the demand for quality broadband, the transition to next-generation architecture, and the introduction of new products as key growth drivers [56][58]