CMBM - Earnings call transcript Q4 2019 | Cambium Networks Corporation

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Operator

Good afternoon. My name is Chris, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Cambium Networks Fourth Quarter and Full Year 2019 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

Senior Investor Schuman, begin you your conference. Director Peter Relations, of may Mr.

Peter Schuman

Welcome you year and today Chris. to you, Thank thank by joining Networks conference and webcast. quarter all results those for for fourth and financial full XXXX call welcome Cambium us joining

the of CFO, this the A results our prepared and and press President on our the also CFO and call on the today’s on has for our commentary Stephen CEO, Bhatngar, here a Form page submitted call. website at available press been copy conclusion release on are X-K be call. release of investor our page with remarks accessible Atul SEC. investor Cumming, referenced and today’s are this The financial of will

today’s and including contain results cause and expected performance. actual during Q&A, reminder, about company’s on a based assumptions. materially. to forecasts are differ made remarks, current outlook will the those expectations, Risks These and statements forward-looking could As uncertainties statements

Except any future any or statements statements of as information, obligation result forward-looking does conform revise to or date any as Cambium’s to for not undertake a Cambium or to in by otherwise. after this presentation, actual expectations update the new of whether make required these results to developments, reason Networks law, changes

today’s review in full of statement risk list It is in results Cambium encourage safe Networks policy to harbor not the I listeners factors reiterate our press financial to outlook. the release. included financial

appendix found measures release, A today’s financial non-GAAP non-GAAP investor release press to today’s website which except all and reference results. and sequential of and our of the will numbers in in is results press can We included financial that also noted. otherwise year-over-year GAAP measures be page the GAAP our announcing and note on non-GAAP to specifically reference where comparisons reconciliation

full will President investment and provide highlights financial Cumming, Cambium Atul provide for & CFO, Turning will Cambium XXXX. Bhatnagar, both Networks Stephen the he the provide results the XXXX of both to CEO, and quarter calendar financial will quarter quarter and the the our first for Networks XXXX year and a for agenda. recap the key outlook year fourth

a prepared followed by will be session. Q&A Our remarks

to like Atul. the to now call I’d over turn

Atul Bhatnagar

you, Thank Peter.

results Looking our XXXX, million, of and which of the quarter of This our at achieved XXrd XXXX. decreased revenues consecutive was quarter X% we from fourth increased QX year-over-year $XX.X X% growth. year-over-year

growth outstanding products due larger decreased products was XX% our X% Point-to-Point, PMP, year-end an European customer’s a and inventory by Point-to-Multi-Point, transition PTP, XXX% while This recovery to year-over-year Wi-Fi which customers. driven technology solutions, with enterprise in grew which improved year-over-year year-over-year, some rebalancing and

XXXX sequentially company in deliver total PMP a were in result continued by On sequential the of a by to solid XX% growth improvement and solutions enterprise now lower revenues government revenues. Wi-Fi XXXX record strong represent increased past QX in PTP basis, revenues after quarters a XX% which XX% for XX% of our of we QX non-U.S. four from grew as programs, EMEA. revenues while sequentially

our million driven over XX% expectations, which $XXX The previous from of increased primarily For XXXX the revenues full the XX% year. growth our increasing Wi-Fi beyond XXXX, well was by of high-end year XXXX. the grew solutions,

grew our X% Point-to-Point XXXX, year the For full XXXX, products products the flat. Point-to-Multi-Point were from while FY

wins notable customer some at product and new Looking developments.

profile report to Cambium customer continued several During Networks QX XXXX, high engagements. to have I’m pleased

frequency in They space, on in competing Networks network selected selected in more XXXm Provider than a band America, transmit superior performance ability to Idaho. other residential based the the Cambium deployment Service North In enabled PMP products. a Cambium of for operator our data by broadband given tier-two our

Communications PMP XXXm Commission, in residential FCC’s, network. will the the Federal access a selected The X network, XXX access spectrum use for conjunction provider backhaul and for service service provider the released Wyoming PTP for wireline network. newly Networks GHz the CBRS tier-three with A the Cambium in

first are and early We an the mover adopter in CBRS arena.

We are years possibilities about for excited the many to here come.

provided show of enterprise the for in world, Cambium’s the Wi-Fi America, It’s full-scale the group one Ignite with XX,XXX Florida. Microsoft attendees. team Orlando, connectivity largest in gathering about North In high-tech users

Our and team Cambium provided performance concurrent devices XX,XXX support outstanding points. approximately Wi-Fi with by Wi-Fi customer X,XXX over supported access

performance the operator and our coupled management with two resort Cambium’s customer In large win. properties. exceptional for Toronto Cambium’s for owner main hospitality solutions support large XXxX Wi-Fi cloud-based and selected vertical, this software, superior out of and resort a were drivers new price,

EMEA, educational institutions, Africa government Middle of gas providers, the number customers, & oil wins In region, and agencies. including Europe, service many we significant a had chains, East, hotel and

selected A demanding U.K. deliver for in wireless our wireless to under within parks major Networks This services wireless customer Cambium U.K. connectivity outdoor provider infrastructure valued to the wireless networking end-to-end managed supply based gigabit conditions. ability vacation

bringing ultra-broadband to EMEA. gigabit services represents added multiyear, vacation Cambium’s This delivering latest and Networks’ wireless will This in Cambium multimillion-dollar milestone park penetration project connectivity technology, broadband parks outfit project a wireless significant value for with guests. fixed

& Over for its large offshore backhaul and price platforms, fiber. leading providing onshore lieu company to Gulf using powered in displacing an backhaul in using backhaul locations provide a gas of best-in-class state-owned now India the gigabit to in Persian Networks sector, region, telco XXX supplier. interconnect In the oil is APAC incumbent PTPXXX, are the a performance. selected In Cambium our Cambium links

fast, Facebook Facebook Express have a Latin customers partnership with partners new reliable, Facebook In Wi-Fi Wi-Fi, in providers to CALA, deploy to we to service and a Caribbean local that America. Latin division with and access within cloud-based America, Connectivity, giving which implement are affordable, hotspots

Chile, in continuing Wi-Fi and to of Ecuador, countries. solutions Mexico, look We the forward To have Argentina, Peru. delivered partnership additional we Brazil, countries in date, this Colombia,

research the This is chances Assessment. future received explain MarketScape, IDC, high and Players a a for firm, During present category in for a and worldwide. Cambium quantitative fourth assessment included its characteristics vendor's Worldwide Networks and recognitions. the XXXX market its success quarter, several profile that leading Cambium qualitative WLAN research awards Major Enterprise IDC Vendor of

Cambium market, XX% the which from Wi-Fi revenues and the growth of year recognition a represents worldwide quarter of the result is up ago. enterprise increasing Networks our of X% revenues, now company in continued brand to rapid fourth exposure

Looking released a products previous since launched Networks the technology surveillance is new video at line new cnVision, wireless solution. solutions market. using secure proven cnVision surveillance wireless Cambium point-to-multipoint video backhaul purpose-built update. our quarterly to serve new of a our

effective, products This into integrate with scalable, the of the was the smoothly being and providing right features line of space. under and adverse that cost security with CCTV performance predictable blend of created intention conditions

asset increases system to for like cnVision standard upgrades. leverages brings and and maintenance public Our applications safety operation specialized technology connections ease-of-use approach reliable a cloud software recovery, networks which to video and applications monitoring. and disaster managed video

the Point-to-Multi-Point service round lower areas lower their economic come customers locations the from their XXX XXX could next with release for which density in to networks. be coverage expect few alternative, not offers cost covered In gigahertz previously line providers The within have manner performance XXX we enables solution to and months an new market of will service out products. MicroPOP in The stability and our MicroPOP a the reliability, X solution.

and market, to solutions stay for the We service providers. gigahertz wave, our XX excited for unlicensed residential smaller amidst providers called millimeter or gigabit PMP backhaul cnWave, allows internet capacity about also enterprises competitive an for licensed utilizing high are wireless larger future spectrum and lightly

cost fiber. relevant home, will be second will the for per gigahertz calendar in year technology and effectively, gigabit XXXX. to of use We be third XX this X This the wireless the first to urban speed available cases fiber. bring wireless increasingly call quarter should be to equivalent

our over company of continue QX XXXX, XX% XXX,XXX, total Weaving an increase the networking accounts approximately up year-over-year. cnMaestro from to experience together totaling QX solutions, devices strong growth Cloud in we utilizing and XX% XXXX with management in under unique

an manage entire As that end-to-end few mentioned, portfolio is Networks connectivity to glass, technologies. we of pane a companies single have network previously of one wireless networking of the cloud-powered a broad the from solution complex integrating Cambium offer

over channel we which almost increase partners by our new X% channel. channel approximately an In year-over-year. year-over-year, channel QX partners represents expanded and the to XXXX, and XX% presence new Turning sequentially X,XXX sequentially adding of XXX

few technology foundation have and strong the XXXX half wireless as during continue deployments worldwide second the gigabit investments years. to of a past beyond built have next-generation growth believe the accelerated networking We we accelerate many years for over made for

the growth of deploying next wireless adoption. years Wi-Fi the growth The fixed introduction over gigahertz are solutions and tier-two few enabled continuing by solutions, of and for XG, solutions business XX our the millimeter service broadband gigahertz the market and faster for fixed millimeter key and wave CBRS compatible of X the based on than drivers Wi-Fi from wave XX adoption enterprise providers wireless global adoption tier-three

Rural rules and the Funding, of funding would evaluated the Expert which would which to the our by by longer XXXX. almost substantial and begin about set end of XXXX America Networks addition, or II service represents on unserved WISPs. auction Opportunity value XX was XXx Networks auction brings Digital be is early next for RDOF, in This Fund registration, high next the millions Phase to America the by Americans. for outlook In bring opportunity This of Connect a optimistic the XXXX billion present in the the round dominated being currently speed Cambium and of Connect years application, the increasingly $XX.X funding Cambium over term consensus committing Fund that in is based broadband called FCC is beyond.

as to well-positioned cnMaestro, and operation. managed to end-to-end and based gigabit cloud-based win by connectivity on the our business wireless easy solution, solutions are which deployment offers transitions We market

pleased Mary structure. of Moving Senior President December the and newly I’m created Peterson to Marketing we position organizational Officer. Chief to to our in Vice announce appointed

strengthening a and communications. demand leadership partner join building Global as strategy event that growth. marketing transformation she Mary have global advances of managed and field engine, its where Ruckus development an Mary excited chartered marketing, social marketing Marketing generation digital marketing influencer Networks’ Cambium of President CommScope and for Vice with recognition integrated I’m most to Mary recently accelerating strategy a our and team. is Networks, was market business, led as and the of well

turn to Stephen results will call XXXX review financial QX now outlook. for of and over a I the our

Stephen Cumming

you, to QX XXXX. Thank QX in increased compared $XX.X $XX.X Atul. year-over-year XXXX by million Revenues million to X% for

solutions, mentioned, reach revenues. QX to year-over-year reflect sequential in Wi-Fi increases revenues Atul our record As continued and enterprise which XXXX

using a customers in gigahertz Wi-Fi result and products. solutions portion and recovered, defense year-end by softness partially products XX to Point-to-Point XX% of improving rebalancing, Point-to-Multi-Point EMEA products government specific for larger our from decreased our broadband next-generation XX our X XX% spending of and sequentially programs the to remained XX% although slow. to inventory speed higher sequentially, some next-generation related anticipated, As due U.S. and transitioning year-over-year

period, year and our revenues revenues during year-over-year North company North Looking X% largest compared geographies. flat QX of QX at XXXX. to XX% XX% grew was prior by and represented compared in XX% America to America, XXXX. region, the

revenues EMEA, from QX result year-over-year of a quarters of four rebalancing of largest and XX% of during strong region, from consecutive XX% a softness year-over-year of during XX% decreased QX a larger year-end basis some transition growth, decreasing year-over-year revenues customers. and XXXX, and due at as after XX% our decreased on inventory to XX% and our second technology sequentially represented XXXX European of customer’s revenues

represented XXXX, by by year-over-year increasing during revenues APAC from and XXXX, XXXX. growing year-over-year increasing CALA of And XX% sequentially. of revenues improving X% QX by during X% represented QX X% QX and XX% XX%

non-GAAP XXXX gross reductions, a and result margin our products, at key basis XX.X% years. enterprise reserves, initiatives margin improved in year-over-year margin margin. was and put XXX is in gross gross by lower compared two inventory management, focused of QX supply margin and The half in non-GAAP cost of improvement points chain a Looking gross price higher and highest to on our place efficiency. of PTP mix the and Wi-Fi Non-GAAP

XXXX. gross margin XXXX result of and non-GAAP cost was basis improvement the mostly margin higher QX and XXX higher gross is Non-GAAP than our products margin QX of supply points chain mix in sequential The efficiencies.

our by to year $X.X million the million improved $XX.X million In $X QX compared to prior non-GAAP and gross increased dollars sequentially. profit XXXX by

have we an achieving non-GAAP of initiatives made towards XX% term particularly XX%. our goal and gross pleased margin our to longer I’m margin target with improvement the with progress of gross annual

to compared For full XX.X% for year gross to XXXX. the XXXX, non-GAAP improved margin XX.X%

by QX in expenses: marketing, XXXX, million and approximately operating by or operating When stood and of $XX.X million sales amortization, non-GAAP research and at QX $X.X XXXX administrative, expenses million. and development, compared Non-GAAP $X.X when increased to and revenues. compared XX.X% to depreciation QX general increased XXXX,

savings of The sequential quarter’s the of headcount Xirrus partially expenses majority of announced from quarter in by restructuring operating by the last call. driven was offset acquisition, increase our higher non-GAAP as full primarily on a result conference activities R&D

operating up X.X% $XXX.X and QX compared margin revenues were $XXX.X of for For from million for X.X%, XXXX. down the Non-GAAP to expenses in was non-GAAP operating XXXX XXXX. million full X.X% XXXX, year QX from

stood to of $X.X Adjusted revenues, revenues X.X% revenues EBITDA million for and compares XXXX. up QX from $X.X or at million of of XXXX XXXX X.X% for million QX or for $X.X or XX.X% QX

revenues Full of for year was revenues XXXX. adjusted EBITDA or million in increase XX% EBITDA of XXXX or a $XX.X year X.X% compared full year represents X.X% This -- the from $XX.X adjusted million full to XXXX. adjusted

EBITDA few committed model We of years. of the expansion XX% continuing to revenues target adjusted to XX% are our drive next to our over to

compared $X.X the in fourth operating activities to third of due XXXX, million in operating flows. quarter quarter cash to XXXX million quarter fourth activities working and Cash used for and for cash $XX.X capital stronger XXXX. the to Turning provided by cash management was primarily million the operating $X.X activities used for

XXXX, For cash million compared operating year exclude $XX.X to million approximately full during XXXX, operating one-time calendar XXXX. in expenses the was operating for $X.X used $XX.X If cash the activities full million year XXXX by of of actives for be provided would we the cash IPO million. $X.X

or result reduction for to of quarter period compared income improved previously XXXX. per net or per $X.XX $X.X million revenue debt. XXXX net the expense for mentioned diluted for fourth Non-GAAP share a QX to income XXXX, a margin interest of non-GAAP $X million income the long-term and QX diluted $X.XX $X.X net was due was diluted to initiatives gross higher as in or per non-GAAP lower prior The million share to the $X.XX and growth compared due and year share

income shows marketing net trade non-GAAP attributable and sales events. and expenses and in from to Xirrus primarily acquisition QX from decrease R&D XXXX to The our compared was higher expenses partners higher

per to non-GAAP XXXX. million million in year income full $X.XX or was diluted diluted compared the $X.X XXXX, net $X.XX per $XX.X For or share share

fourth to totaled the from offset balance XXXX. quarter assets, million XXXX quarter third an XXXX, balance million of debt. for was million inventories, of increase payables, fourth The $XX.X in primarily sequential XXXX, higher million sheet. performance $X.X a $X.X pay-down result increase $XX.X Turning the Xirrus a the Cash the and $XXX,XXX Wi-Fi of payment the the in $X.X of as than and QX quarter cash by during million lower increase a

the an a quarter prior better outstanding and $X.X XX day the the QX an XXXX, In days the as increase year, days by $XX.X payable quarter from QX the sales fourth of receivables at days, from million days of stood third XX the from collections of sequentially. six $X.X a quarter and from four million result from of year decrease days, QX XXXX, for at fourth increase decreased XXXX. net days of quarter prior improved XXXX. million of XX and Days XXXX one up third by stood

$XX.X reduce QX $XX we year-over-year by from XXXX, in by as transitions. inventories of QX technology inventories our million work by decreased $X.X and million to million Net increased driven XXXX

second to call, during during announced are taking half expect the structure addition happen the Atul to we revenue timing with to the anticipated new third measures quarter from XXXX. restructuring the introductions, new our earlier In our product and in ramp which align our our activities results, of we mentioned cost of

XXXX see year gigabit with such wireless We customer revenues gigahertz as Wi-Fi adoption X, XX improvement unfolds. expect XX to solutions and as after products new sequential in gigahertz QX of the

operating a focused We adjusted of structure achieving delivering on improving to cost double pursue remain by long-term digit continue objective operational EBITDA target and model our We margin. efficiency. our our

but transition first occurring revenue financially new remain will us growth, is on new while the of platform during this focus strong resilient. product and to continues half restructuring Networks activities XXXX, Cambium allow to

now announcement, announced a longer we model. to align earnings In achieve our plan today’s steps our are our additional taking our cost structure. last quarterly cost target structure earnings we In call with to to conjunction align term restructuring operating

the incur costs. expect severance $X.X to between quarters $X.X restructuring XXXX, consisting of of additional of to mainly We first charges million million three over

$XXX,XXX additional expect combined throughout we restructuring from total we savings approximately initiatives we realize of remainder the When these XXXX, In to recognize $XXX,XXX charges to expect recognize XXXX, expect plan. completed, cost year. realized QX the $XXX,XXX of QX with under this pretax $XX In approximately to of approximately to annually. savings savings million

financial Moving items they quarter the only certain. pending include Accordingly, XXXX financial Cambium outlook impact that first extent Networks are to outlook future does financial of Cambium to such full matters the any outlook. Networks includes in the other or not and year Please legal our note transactions, reasonably financial potential transactions.

actual However, differ materially the outlook. results from may

visibility, gross follows: Considering is operating GAAP XXXX million GAAP non-GAAP revenues non-GAAP million; and current XX.X% between XX.X%; margin million as income between XX% to QX GAAP to and million be loss to and million. of expected between breakeven income $X and between $XX margin XX.X%. $XX our operating to $X.X gross between operating $X.X

and a $X.X $X.XX GAAP per net loss a share between share $XXX,XXX loss net between non-GAAP net $X of or $X.XX loss and income million loss of to a diluted million share. $X.XX diluted million of $X.X loss between or per per diluted income between $X.XX net and and of

between Approximately approximately XX% million XX% and to X% outstanding. adjusted GAAP and diluted effective between EBITDA million average to to $X.X margin million weighted rate taxes X.X%. to $X.X tax a Adjusted XX.X between EBITDA non-GAAP XX%. XX% of shares

Pay-down $XXX,XXX million. $X.X $X restructuring $X.X of million; capital between requirements. $X.X pretax million; million debt cash charges approximately expenditures $XXX,XXX. expense our And to between to interest Turning to

XX% million $XXX.X and year between financial XX% be adjusted million follows: to EBITDA as is outlook full expected revenues. XXXX between of of to $XXX and For revenues GAAP

Atul remarks. some closing the for turn now I’ll back to call

Atul Bhatnagar

Networks XXXX, of value. new opening by wireless half connectivity, growth growing on gigabit our adding is remain delivering broadband sales during for products second business our by continue number the and new fixed focus applications and Growth and cnVision. one well-positioned profitability we will Cambium like wireless our core enabling new territories

the which enterprise We as in Wi-Fi growing enterprise one business are world. Wi-Fi in will a the fastest the and months X emerging leadership, new making with Wi-Fi channels player significant coming Cambium continue of

performance wireless gigahertz best-in-class the of we highly the deployment. innovative XX and to be home will gigabit into worldwide, and year and the with expand price with office ease solutions, gigahertz differentiated wave XX It millimeter and connectivity industry’s

We will subscription through generate with renewal launch and CBRS, to business our sales and model cnMaestro cloud cnHeat. models, begin the recurring software-as-a-service new revenues to leverage of Pro,

is key revenue. revenue a Recurring Cambium’s element and consistent to expansion

within While half XXXX, will of slow and which acceleration first significant strong we portfolio. and the Federal of remain utilizes softer until to revenues will the and for the second technology calendar program XXXX for new excited our PTP marked products kits due growth during XXXX, our half remain market U.S. technology are defense in strength transitions, product by

committed during Finally, we of to remain margin adjusted our digit delivering EBITDA XXXX. double goal

prepared concludes That our remarks.

turn So, Q&A with that, the I’d Chris begin to like session. call the over and to

Operator

you. Instructions] [Operator Thank

from Raymond question line comes first James. Leopold Simon The the of with

Your line now open. is

Victor Chiu

Could provided. was Chiu was current Leopold. the street This you for provide what growth you some a takes Victor guys. we sales just is the looking around It mix you gets looks was the guidance like lower than in for. -- your that that bit XQ year-over-year Hi, -- and XXXX Simon color puts expected your around to

next can give expecting us what around driving the see you’re quarter? wondering you that’s color just weakness Thanks. I some So, that

Stephen Cumming

some -- prepared really there some and certainly from way, gig. this as by this of some our the customers U.S. in to think we is guys are given ax, see there two Europe seeing standards things are alluded they our would restricted the our fact a EMEA, adopt transitioning next-generation these the We such the platform those gig alluded is XX generally that technology faster into and softness XX little I that not We're due technologies the applying which Yeah, we to in of Victor. remarks by to Stephen --

budgets that spending delay XXXX approved a experiencing and, on in programs takes Win bit I deals are funds business. Federal approved, time Win our got have very late on more government but just got obviously, think it’s pretty of timing rates trickle affecting down. for in also actually, good. but some that. are in these QX little to it The our estimating that the we're larger around PTP terms rates were those unpredictable in still strong U.S.

Atul Bhatnagar

add think, well think softer as will the a also, I is one-time year stronger I Traditionally QX addition, sales I and was inventory Federal quarter growing. last In had EMEA we as generally for buildup QX from as comment. us benefited stronger

So, was but QX last softer QX year traditionally exceptional, is -- little for us. we

Victor Chiu

related that to is PMP primarily? EMEA,

Atul Bhatnagar

Yeah.

Victor Chiu

you Okay. to Is there And just supply China one of provide your us? more expose then impact question to chain portion quickly. and can any guys

Atul Bhatnagar

is closely. little we We Victor, It are the -- are watching very situation fluidic a situation.

all know, chain diverse As parts. we moving supply have multiple we with a

and far but monitoring we is believe we pretty closely. are there impact, this a is So minimal situation fluidic

Victor Chiu

Okay.

Stephen Cumming

material Yeah, we I certainly, see in this it said, have mean, but don’t point. Atul the distribution Shanghai centers as closely, any that We now. to open very are are we impact we monitoring

Victor Chiu

Okay. Thank you.

Operator

question you. next Hall line the our And Rod with from Sachs. Thank Goldman of comes

is now open. line Your

Unknown Analyst

for these transition Hi. wondering of question. just clarify -- Ashwin interrelated Thank like on behalf they be impact if adjustment is issues of and that impacting taking sounds inventory quarter-end two performance, that your guidance. also quantify would I the whether helpful. and if you or how was the could are Rod. customer on could you really you my This are It separate

Atul Bhatnagar

little Stephen a and add me color Ashwin, bit of Yeah, give anything. to let wants see

are So, is I Europe like what we the gigahertz faster. And definitely seeing we is little adopting are general think, in XG working XX closely standards that with very customers. the

well working gigahertz, are these as who products. advance because closely XX is are of this generation our of we types very fact, XX customers transitioning technology how there designed last to In some kind customers Medusa gigahertz,

ensuring most technologies message acceleration on So, these millimeter I of going factor. megabit basically see that these and with base. we driving those are XXX second the we that very we the to is that working are wave towards a customers the my have offering they key is think now customers solid And based Cambium service home, in installed half in are because

So, technology half year transition, overall, growing first was but last EMEA primarily buildup very inventory the well. --

So, that mixed I definitely say primarily is transition. some would of technology but there,

Unknown Analyst

customers is different -- is it inventory of different or to with not XX, the And who the are a build-up, set transitioning gigahertz, that customers? same to XX

Atul Bhatnagar

No.

think similar And these of -- similar transition of I you I Wi-Fi see X customers going. -- more coming, Wi-Fi will same who customers type have adopting in X a is as the also some think progressive manner.

So transition that which happening there. is is technology another

Unknown Analyst

Got guidance. it. And just one last question on the

Your revenue XX% QX about implies decline QX QX X% in on year-over-year guidance But the about through implies growth. basis.

But So, that And some pretty second revenue? more some that second some risk assuming kind you half us you of point give at obvious what maybe of? the are you're factors visibility the can clarity be that of we should here, have significant acceleration on half. into aware

Atul Bhatnagar

Sure.

Let me there. give more a little detail

be shipping anticipating line will we product Wi-Fi QX. XXX.XXax Cambium in So, volume or that X Networks are

world. significant the enterprise fairly a that's Wi-Fi So in especially transition and world the

key that's So first the thing.

be I space We with very gigahertz tail with type two-kilometer XX talked the wave, will wireless to closely about in architecture. the last connectivity working then are the to gigabit QX the will for addition the a XG gigahertz in of which the they speed you anticipate timeframe, of the timeframe. solution, introducing give QX end connectivity fixed. in one to this mesh key described. early very are MicroPOP products that XXX, That's millimeter high we can in we platforms are be customers, and we momentum some ones And shipping like Those XX QX so of

transitions, second -- And or XX from customers way, timeframe when XXXX, I in this XXXX, XX we think the megabits per that XX, second. per like the more before to megabits saw XXXX, we went XX similar by -- timeframe in saw to

will homes? for the basically to at every say, half we the years cycle this the to you're basically looking provide we are is five two gigabit expectations plus years second to doubling. And and And good of for, access can starting, upgrade the probably can would now is that doubling, least. three cycle So, that now provide what megabit are connectivity? customers those year I And point-to-point XXX then speeds are probably continue witnessing four

Unknown Analyst

Okay.

Stephen Cumming

into I made think to us ramp comment on the a of refresh, Xirrus strong in as the more -- in that's just and give sort such bit just tech education seasonally other some one outside QX. QX you new verticals little color really is, we QX of acquisition -- QX the that accelerates and

So also be ax more we a to obviously, that that our comfort us expect gives technology that of see ramp, there. adoption will and

Atul Bhatnagar

if if and one-time softer defense QX Ashwin, or years performance customer you like that three take you build-up large past for And -- the inventory take deployment, deals large a quarter. one-time maybe traditionally

Unknown Analyst

it. you Thank much. Understood. Got very

Atul Bhatnagar

you. Thank

Operator

next from our question you. And George Thank line the comes of Iwanyc with Oppenheimer.

is Your line now open.

George Iwanyc

pricing pressure? the you're are where strength most? sense specifically you Thank the enterprise you the Which Wi-Fi for a any there And contributing of on up? taking us seeing and Is my on questions. are environment? verticals Atul, give competitive can you picking what then

Atul Bhatnagar

George, excellent question.

there. deeper go me Let

me address fixed first, let So, wireless broadband.

there leader and that and technology clear of broadband. there that Cambium transition, focus And investing solutions for have with to we're focused We have fixed as globally emerged the Cambium we're is kind reason describing continues there, for we'll this the differentiated wireless in products.

number to a we taking is larger one, networking, two share a year will good this to the millimeter wave product competition, because So gigabit this to from as half years technology take They transitions the algorithms. radio design. noise the cloud the can They the products management. build things These mitigation have one buy cloud we have have They just somewhere. are all which from tech, not in. and

customer in major anything like broadband that. pressure We fixed wireless we price our see So, we or don't give. premium fixed actually on quality the wireless value any broadband, products charge and

Wi-Fi the focused on On strategy our entire is mid-tier. side,

large We going enterprises. are not after

not SMB. after are We going

growth all, seen they software the after the going above value, still enterprises. growth vector. And our that cloud in will value continue, are the mid-tier have ease XX% of performance. of we plus. And why value deployment seen which our We because distributed the I affordability, think They That's we they growth at early provides. the year-over-year kind are kind of stage you've

the we if on very competitive Wi-Fi a price. anything, So, have side

we We the And QX with acquisition, reach have bodes performance. for quarter us. like which And building Stephen the channel market. excellent mentioned well as are focused Xirrus education, right on now to QX, for also are opening vertical we

George Iwanyc

following-up comment. on your channel just And

see you've this think the what, I added -- do leverage some before. quarter How expansion the six the over added you quarter, last positive XXX you've months? from quickly XXX

Atul Bhatnagar

to say they two or six three typically, have then empowered. takes But would quarters, SCs supporting think, deals, three I our pretty win two, we them two I Yeah, in three become they is a self one or What do deals easily a them. RPMs our channel months. once or we win

three zone So, I a participating. type would a start to say zone good in for is channels to of our six-month

George Iwanyc

are which most the And you areas channel? traction the with getting

Atul Bhatnagar

I think MSPs. we recruiting are

And territories. fixed for are the the our new as NSIs in channels recruiting expand are We with education. [ph] go managed It just is presence channels and those we to territories. countries, wireless also, also but service developing WARs there we not especially the continuing through into enterprise are Wi-Fi, recruiting we providers broadband, in

as wireless enterprise, as well both expansion. So broadband fixed

Stephen Cumming

are more we'll the we're but for moment, build-out term, our is seeing other mid regions America EMEA out our North there. over as the America EMEA expectation of channel North that and that the longer predominant and well, that. on But And the the predominantly at in build in regions

George Iwanyc

you. Thank

Operator

from line comes Coster the JPMorgan. of Paul our Thank you. next with And question

is Your line open. now

Paul Coster

Why and it sure long? our has it And can second the thanks this what Is like ago that a with data CBRS long for Thank customer X months the we question. maybe will and to you confidence product taking started that anecdotal half How a some is so taking you think gives been ago. product us, of quarters I feel cycle Wi-Fi us? taking XX-gig prior cycles? in it you. or nine about talking there uptick? some is I help information there XX-gig couple and while. I'm Yeah, does compare share

Atul Bhatnagar

Thanks, Paul.

Let that. me on give some color

yes, Wi-Fi X. talking Wi-Fi So people have X, of been

problems of next-generation. are debugged. that of have we confidence the been the lot coming Wi-Fi have think X which now I are is for kind chipsets A

So, education leading-edge the education. transition, will a adopters I up ends think, especially starting see, in Generally, Wi-Fi classrooms. good you being for QX, Wi-Fi

acceleration we So, see there.

you to Wi-Fi speeds and Wi-Fi everywhere but I be you will applications I think X. for went going not with agree feeds will where broad So, that go X, it's need people demanding

Secondly, technology. MU-MIMO X adds Wi-Fi that

So, and of longer realizing the are that's term right in scalability, installations right go. architecture terms to way many that that's Wi-Fi the

starting that to only while. the then in not it QX, This in a this a for will that and will start anticipate good acceleration, is will that happen shift then we will it momentum. be continue it and XXXX, So,

think what I saying building in will momentum are starting is we start QX.

to comes millimeter the same it wave, When thing.

product. had If waited particularly, you waited when millimeter they We a Cambium one build wave. not look at did point, can mature. affordable until price generation and we the actually XX one right XX We generation tougher chipsets provide much gigahertz, was the gigahertz so were

as think kind X millimeter Wi-Fi is one, confidence which is we I as in two we are mature in of we that wave, with gen well been both seeing So, the and has chipsets. in when coming gen have the are architecture debugged

you will that see are confident that acceleration. So, we

on I point base. of These want in with making are networks Paul, of with have to to tremendous Cambium, dollars make designed sure ease-of-use, closely is designing third very quality, of said And we deploy. deployment, millions installed as earlier, I how we're And are these and ease very Medusa they how easy production we're collaborative working that's with that's large customers customers. this a are manner

customers for, have you'll our point who using we third now CBRS, ask CBRS. are

is academic. this longer no So,

in our backwards a products compatible. We as which have an service which has are well as end-to-end SaaS CBRS solution

migrate upgrade. if software can customer you products, with you base CBRS are to over-the-air a So, with current our Cambium

a sophisticated end-to-end have very solution. We

CBRS key you'll accelerates, very as think mover. see I So Cambium as fast a

Paul Coster

of us Is visibility the wondering there clients function that don't us. any is number share what is real need with projects. I'm with the way second or of you see there of mean, quantifying have that a into actual I half? data planned already conversations you either will reassure as demand outside demand you anecdotal it pent-up just the to

Atul Bhatnagar

describing, importantly Yeah, where sizable base, work these as with the installed fixed world, but wireless I'll have that -- XXX are more XXXX, world, I'm XXXX, as these enterprise in XX happening, that Paul, things we to is our the Medusa. installed say only the transitions our is migrate seen to why gigahertz, I new have the both XXXX broadband in thing, past Wi-Fi solutions. the base XX we well in that's gave those going And example CBRS, gigahertz, type we to of of went as customers, base

how deficiencies. visibility could say where performing does the is, be cnMaestro and performance are they where us and into give their there networks I would

and to the All megabit and of Speeds point-to-point upgrade the of worldwide. to customers for the X to home plus the they will that -- out radios type our gigabit that there in speeds to -- Cambium's for speeds have points to feeds networks, for network. and installed feeds million-plus fact offer XXX

ask that those do us Now, very a that. connectivity. never quarter, we wireless million that a gigabit this will networks customer X idea of if they what migrate we But -- base in how radios next-generation have will quarter, give subscriber would how next you detail to this million X good

Paul Coster

one Okay. have got And I last…

Stephen Cumming

Paul, is comfort seen movie just we've it we've few give you play to this now, some so been a times out. to

say And and experience transition how we so products from next-generation cnMedusa good data our good got products. PMP on or our of we've

the good for that ramp a adoption will and for the that the appetite have do we some So customers' us of comfort pulse in second half. this this rate gives

Paul Coster

program and And I ways much program, benefits the the what going? question. what kinds if Where's the that XXXX. Connect the see participate one it got correctly, as America of of you. of the the you early I How Thank could iteration you as of did heard time program? for benefit talked in it. you taking flow you in bulk do But out and last the first this size from it? get you about up do I've here. apologize do XXx a Got of increase --

Atul Bhatnagar

Yeah, Paul, excellent question.

you deeper question this previous answer I tell also think your me this will this, into -- will because Let go a little bit.

in We funding, won America deals CAF the accelerating. II sizable Cambium, have with we and seen Phase they funding, Connect have that are X even pretty

some So, benefiting more risks of and is working are and fund -- we they of the see is with some released it that II now gear. being larger are we buying the CAF

is that Cambium these to we you without don't the One see and very are why ask scale, why have they're visibility, get can CAF -- of for funding network management. buying diagnostics us with a buying them, things we which with because risks Cambium, is managed which different you they say important it's

SLA. get CAF without don't You funding

driving the Level is which are of some that Service why reason Agreement network. production measurement So actually things they want the

So professionally SLA-driven need what more we people are going network. CAF as type finding this for is cloud-managed of a managed, are they that funding, II now

So the any that are has of it, CAF will so we why the not II. network cut reasons one winning been

RDOF And will -- access. just years. we unfair focused believe XX next since that and will faster, as year. times And of It's It be start yet megabit expansion. which take promise lot next that a I capital are the megabit believe XX XX -- will will I we on mean, in we quality, megabit. expectations for there the fund we or share that's XXX affordability the funding the said, it's definitely be will not probably is plus-type XX the

Paul Coster

Thank you.

Atul Bhatnagar

Thanks, Paul.

Operator

of Deutsche question you. our line Yun with Thank Brian next from the And comes Bank.

Your is open. line now

Brian Yun

for the Can out transitions Hey, versus one-time much referenced, much coming $X street? million taking first, the Federal product technology deals if down you I QX below guess, of versus you about you possible? is that and that's question. the to could break Thanks how essentially attributable how quantify of guys. those guide the

Atul Bhatnagar

Let me give overall comments.

defense. would those really the terms And not of I of say discount terms deals mean say, shrinkages that impact in the I when core other overall of where numbers, those then deals. I a larger would those we the customers In significant very much would probably large couple QX. big key big Yeah, also had QX, of are with a sizable. had is. the expansion very cool We in business say in deal And defense a EMEA I

the some -- shrinkage, but you if then take not it's not that QX So, is big. that all that probably there's

Stephen Cumming

low level. give low to -- very which single-digits from see perspective. more that a that -- sequential which was hope bit you some we're which basis, ranges. seasonality sequentially. coming been looking from on a PMP, we just has very, of we a saw of work us, obviously, PTP sort you see in by that grew sequential product you impacted beyond color. our technology down that, transitions. XX%, a of a on high-end driver just sort will for you Federal the And as color is again, our Brian, these little more Yeah, through saw it our probably as side, we the very low of declining we XX% sort at decline Wi-Fi single-digits, I low results, strong a But growth gives year-over-year basis,

Brian Yun

Facebook Great. there? or helpful. I geo. then for And quantify there solutions to mentioned your can providing was think That expand way the And What you that that other you Thanks. into announced? a products expand opportunity? revenue to potential you on you partnership are Is

for to that happen that So, what to needs go you. way? Thank

Atul Bhatnagar

color. let opportunity Yeah, of Facebook you terms but we numbers, me revenue some in have not broken give the

them that as the saw countries. very and working developing I back, affordable broadband three, proactively goodness years say -- in would well four almost So, early we reach had with with because we project as they as work wanted partner good And them. a they

closely. with program. So, it's a worked we're very also XX on close very partnership, And very with them them working gigahertz the --

PTP there, I So, we solutions understanding very the with definitely them, into regularly as working it the portfolio is, premier involves needs both as The basically we with customer well break with numbers as we products And all. we that product would sure say don't work the PMP how there But them. are products. match. did much partner break and a don't we making we them, work --

Brian Yun

Thank you.

Atul Bhatnagar

Thank you.

Operator

Erik the with JMP our of And comes line Suppiger question last you. from Securities. Thank

Your line is open. now

Erik Suppiger

of and you bit question. little the side, are much competitive the of you what Yeah, the about how much you behavior Cisco? see kind of thanks ubiquity? Can likes the do how do Wi-Fi talk from a -- taking On seeing then And you for see of dynamics? HP

Atul Bhatnagar

said, line, three our key used principles. I Erik, conceived we we as Wi-Fi when

knew ease need easy configuration, really Wi-Fi on we that which because to to used cloud-managed, ease totally we what focus of very others done principle a and and first studied solution had was and key is The build we can manage. of deploy we deployment,

one. number was that So

we we ourselves. made design the software sure that in-house Number two,

So, we can select the right features.

features, set You need you good to with mid-tier tier features because deep all need don't and of -- features, after we the go decided big segment.

are the to So, as transitioning market those that playing are competitive designed we ax architecture, as are the way. at with because in things our -- the -- product look markets the we that mid-tier and with cloud-managed the especially the as cost, strength

very is, fixed environment areas we superior last provide to the Wi-Fi have And outdoor you we you broadband very two there where are wireless I are backhauling, wires. no are end-to-end, when to One, superior. in make want point need wireless

there, we the bring superior are We solution. very because

not we affordable, that differentiation enterprise yet aircraft. seeing -- And And fantastic in as same Second or SMB, everything like broadband, area flying quality. is X,XXX we class, very a now pane with it's customers positioning fixed branding, the well are good our gigahertz. customer we base X of positions very is believe wireless soon good us and penetration whether that it's education that class managed into that. XX one This from close glass, formation. These is are products whether superior as are it Wi-Fi And bodes whether good growth. yet not enterprise for is result,

Erik Suppiger

Very good. Thank you.

Atul Bhatnagar

Thank you.

Stephen Cumming

Thanks, Erik.

Operator

Mr. closing concludes this like for of today's Investor Schuman, would any call to the Peter to back now hand I question-and-answer Director session. statements. And you. Thank Senior Relations,

Peter Schuman

you Chris. Thank,

Conference During QX presenting Securities JMP Francisco February Technology Internet investors XXth at at of February Technology be with San Networks the will Conference on the Goldman & Cambium XXth. Sachs and in XXXX, meeting on

Relations at California any XXX-XXXX to present and the Point, Orlando, in Conference Dana with meantime, you (XXX) on We in In questions March Investor welcome arise. Department XXth. the ROTH Investor March Xth James the that on Conference always Florida at Institutional Raymond contact are our will also

Thank this call. you for today’s joining and concludes us

Atul Bhatnagar

you. Thank

Operator

that gentlemen, quarterly participation. earnings today’s and Ladies for your Thank you concludes call.

You logoff. may now

Cambium Networks (CMBM) 10 Feb 202019 Q4 Earnings call transcript