CMBM - Earnings call transcript Q3 2021 | Cambium Networks Corporation

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Operator

Good afternoon. My name is Judith, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cambium Networks Third Quarter 2021 Financial Results Conference Call. [Operator Instructions]. Mr. Investor Analyst Director, begin you Senior conference. your Schuman, and Relations, Industry may Peter

Peter Schuman

Welcome you and Cumming, financial Conference and for Judith. and call. by you, Thank thank The our Bhatnagar, are Third to those President XXXX here webcast. welcome today's Atul Cambium and for release Quarter Financial CFO, and results Results Stephen press Call, CEO; all joining our Networks' us. Investor referenced joining for the commentary are this press page submitted of been on of website, of SEC. today's with the CFO and prepared also accessible on our Investor our this remarks the call on page the copy X-K conclusion has release call. will on Form available at be A

made factors after those the required result release. to Except during outlook could new results current to the to today's financial any not and a not outlook. these in revise take including remarks, encourage cause whether date press Q&A, any financial presentation, safe We included developments, risk or actual the contain expectations, Risks results results the statements in full future listeners are today's or review is this statements to changes materially. Cambium's Cambium any Cambium's forward-looking reminder, expected policy forecasts to a as to conform make harbor list information, statement and for expectations as or of based forward-looking Networks It of otherwise. reiterate in of update company's our uncertainties statements obligation does by actual These law, reason about performance. statements on assumptions. will and As differ

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

Cambium the CEO, Networks' Cumming, agenda. recap XXXX outlook our the XXXX. highlights Turning will provide and President results to for Bhatnagar, for will CFO, financial the Atul and the Networks' for investment a and provide Cambium the financial fourth quarter quarter of the third Stephen quarter key of

remarks prepared I'd to Q&A followed over turn like Atul. call be Our will by session. a the now to

Atul Bhatnagar

Thank components, including supply impacted chain wireless well backlog Peter. broadband supply increased remains expenses. times the due need for challenges while supplier from some products had key higher-volume for Cambium parts late for our our decommits calendar caused manufacturing supply and situation August, larger alternative a We weekly commits improve. partners visibility with until suppliers. increased communications and during and our Overall us some cautious of due industry many about suppliers demand decommits for which chain are strong to mechanical basis to remain redesign costs Cambium's the as new suppliers unprecedented, shortages on semiconductors, to rising components, our challenges By continued freight of expansion for key year next networks, The lead quarters 'XX. shipments you, monitoring QX are facing and with working expedite as and and of fees few 'XX the and extended from

entire getting foundries based logistic affecting we may the constraints industry, mentioned and chip including additional on As fab in capacity believe supply factors preliminary into in results, several our global 'XX last place. now calendar

is future not quarters. could impact from specific Cambium supply address future constraints. supply events, in We are unforeseen the steps very taking to which immune

commits XXXX. We calendar are pushing for year supplier for

have XXXX with we Demand more customer redesigning parts remains We quarter would with the or the previous XXXX. key provided products backlog up X, exceeded Networks third August quarter met and our constraints, Cambium range revenue necessary, high XX% are suppliers, We on entered demand. XXXX year-over-year. Without strong. outlook of to fourth are providing XX-month the the end available forecast widely to supply where meet

our anniversary a company. position. tenth celebrated as at October, our Cambium standalone market Looking This

an fixed decade the of and future technology past to years wave has our us. hold and proof-of-concept and gigahertz best the our built be gigahertz for sustainable excited prosperous XG remain expected in new promising be XX fourth products quarter released years. of to and business POCs about innovative, with during wave taking wireless multi-gigabit over Millimeter is wireless XX have next products unleashed technology our months the front We upcoming the about a broadband and in high-performance remain Cambium installations.

During in going on kits continents. cnWave for sold and in QX POCs XX-gigahertz countries, different presently starter Cambium 'XX, different XX our over we X XXX have XX-gigahertz

unlicensed tens these products thousands around shipped enterprise licensed using viewed operators, and cnWave expands a and of These are and serviceable wireless standard-based cumulatively. serving wireless solutions changing of world. new, products way projects have new Cambium's cost the We the solutions by wireless old urban a and available market, residential, markets. fixed attractive makes choice for our infrastructure of XX-gigahertz ownership to bringing network multi-gigabit wireless spectrum is customers, compelling fixed fixed our

We continue is over spending around to enterprises local distributed lifeline on globe. communities to the products expect the broadband few infrastructure a next years and government increased accelerating connect as

of came and $XX financial earnings October results. in of due diluted third to the provided the ship negatively 'XX greater-than-anticipated supply-constrained million EPS results inability products diluted QX million to million earnings $XX.X of per quarter during fell results impacted of the our $XX preliminary $X.XX and the $X.XX The was Revenues outlook XX the million the above share. Non-GAAP to outlook the below environment during of $XX announced the call. the announced in $X.XX to announced XXXX. Turning call 'XX below QX between on

different lines. product X across revenues at Looking

in higher obtaining a and Our difficult new point-to-multipoint and we the was strong while was CBRS year-over-year of our shortages interest traffic, challenge 'XX, revenues start PTP business introductions, for point-to-point QX sequentially business to than due federal XX% products, the to had broadening we see shipments, shipments component although for network for PMP momentum at by XX% The demand more products. quarter. as continued decreased increased decreased shipments product backhaul in increased solutions components sequentially lower although X% during delayed anticipated XX% affecting year-over-year with

WiFi during business most a environment was line, remains ship healthy enterprise sequentially Our impacted although product it our paucity enterprise to but 'XX. the for a increased chips, remains decreasing challenging business. products. year-over-year XX% very Demand semiconductor of X% to due WiFi QX

outdoor have to blocks of Colorado provide the for and infrastructure Aurora cities' XX network. applications notable fixed aid card the respective gigabit downtown per processing. IT some resort was XX be Villas In its developments. credit San our businesses this WiFi Within benefit our video The and opportunities deployment deployments Jose, broadband for in at city wireless North continued strategy. Smart City of footprint the product a WiFi wins strategic enterprise security customer step Jose's digital workers field XX-gigahertz win point recover. strategic project covers third-largest completed both operator networks customer network vision had will outdoor The XX at WiFi cost public improving visitors, digital new with and throughput WiFi transport Wi-Fi We range, of an railroad access a corridors San X San a Looking working network to speed Hawaii, presence. to and the lower microwave Jose for American cities Maui deployed new gigahertz competitors, relief in their city Cambium's second Aurora, voice LAN North extension, the their resulting XX wireless outdoor industrial states residents, forward. is cnWave We support for moving Resort coverage reliability. PTPXXX our and hospitality X gigabit for additional of inclusion and in connectivity approximately significantly aging market in for safety, replaced than our which area. megabit distributed ownership. and latest broadband superior massively California, across to downtown Networks' a and infrastructures. and of cnWave corridors the backhaul funding, displaced to cnWave base, capacity economic America, the is gigahertz data, resort. small a free The performance, with Cambium customer a public our Aurora better throughout to Internet was allocated and aging competitor Act selected infrastructure given improve performance city's CARES to coronavirus cities product through the the downtown in infrastructure

CBRS to Villas SaaS Maui for simpler territories. mover required access CBRS network. spectrum the than Less equipment the XXX the Resort points benefit both of its For power and PMP and less labor, our status U.S. gigahertz Cambium's and products our first continue maintenance, the fewer means our XX% service X.X management in FCC's example, competitors.

areas WiFinity, increase access students, to service education solution The from selected in software switches now than competitors larger our and Group events Cambium deliver the we in a approximately PMP multi-dwelling to XX% network opportunity over PTP premier already a lower enterprise government. Australian XXX to coming wins. win digital enterprise secondary EMEA, Education Cambium's outdoor In the initial As new Cambium state total we managed selected CCTV and deployment products a XXX a XMS-cloud provider major In strategic universities to Malaysia, due ownership technology a the high-density deploy wireless major several Peru over and the technology X institutions. fixed deployment selected of selected make program, in Europe, the Selangor Puerto call, portfolio project to Holland, indoor win had provide project by expected significant district to against Smart vision in cnMatrix great to is support. for state and cloud. X Sydney to points India in our in Middle XX new fabric year. chain phase agency with locations XX to of service, significant Cambium buildings. with Networks cost to U.K. general-use provider Internet a and X trial our Group, a venues our XXX, project. with better a at the had our XXX,XXX go this had cnWave an and Cambium Selva XX-gigahertz recurring Wi-Fi Education switching thoroughbred cnMatrix across on-premise won of of region, Proyecto a technologies. owner the selected APAC Club, ePMP In Cambium since stadium key we and a a service cnMaestro through competition. which large start a for In beat seating, and selected Cambium connect public by CALA to products, engine We vertical region, ownership The quarter Northern Selangor, a managed number move call WiFi of solutions XX X,XXX won from comprised cnWave. CBRS superior sizable of We recent program comprised to Cambium's deployment the XX Rico, optimization and and continued region, cost an deployments. requiring ePMP The operator win their smart America, at Africa Internet provide with U.K. of and government Turf is Cambium's have with a the implementation the advanced of a devices out the search adds deployment X unit proposition. WiFinity the campuses, new XXXm, In project public performance was success Cambium's customer and win locations. gigahertz including total outdoor provider connectivity. XX,XXX long hospitality reported quarter. for support the and products. the indoor Latin switching This technology, ability had include: a today's last over suites in customers. moved hospitality and outstanding WiFi Cambium's Cambium's of large Cambium's wireless extend Caribbean we value to the a government-sponsored featured business A PTP for with upgrade our national in an this wins for last to XXX to East racing, at since This SaaS of for Morocco Force with win of and a XXX APs schools of to Selangor, XXXX XX,XXX competitors state for carrier This Dunamare the school

update. quarterly Turning our since new product introductions previous to

earnings us up our XE new Before access band. X-gigahertz history X.X call, gigahertz more will the of clean spectrum enables expertise design differentiated Cambium's next and deliver performance first including to to product bring our in of even benefits, multi-radio WiFi XE point products. with WiFi utilization

radio lower latency will to use up XEX-X X set Our channels. and that increased a high-density technology X WiFi cases. the new capacity enables of improved XE offer XxX XXX-megahertz performance, enables

We revenues broadband and XX new available XG gigahertz further performance during ramping market, working cnWave demand the the XXXX. roadmap of SAM, existing for a during with We wireless cnWave as on expand high-performance on proof-of-concept and trials for product both are of field fixed at edge XXXX. fixed our gigahertz our wireless also calendar X set are their product customers extensive for began which higher and networks. products our gigahertz calendar new access, introduction XX deployments will serviceable

of capital is be solution and the that mobile-centric compared of from operating complexity compared or up mobile Spain. gigahertz use becomes interested of or justify countries our not fixed complex dense feature years. case. gigahertz price or the business even like in MU-MIMO expense channel less disruptive simple, of require density fixed especially wider An XG fiber, Cambium and mobile providers wave Future expected for the millimeter The this band opening months can to EMEA will fiber when aggregation is and channels, than traditional carrier operating solution number XX a capacity The density XX XG where Fiber a service areas. lower to product and to Cambium's than existing including rollout and the product XG in of are customers increased possible providers areas, take technologies to bonding. of feature that using Many included XG no from technology, XG equipment is or cost Our fixed Croatia much of existing subscriber in wireless solutions. infrastructure. are region, the high access increasing use less which urban it's to the either Slovenia, solution generations

Turning cloud software. cnMaestro to our

strong glass. manage cloud and Our QX network up end-to-end to under to cloud-powered increase a solution XX% totaled pane Total single 'XX experience user cnMaestro software in continued management over from The cloud the connectivity year-over-year. 'XX growth. of XXX,XXX, of an QX from devices XX%

Connections Cambium September, channel We we XX% by Cambium and our channel and channel. approximately This represents sequentially, X% had XXX online a new our year-over-year, February. over adding 'XX, our X,XXX X,XXX set an community. previous end at we QX events Looking In net webinars for which very partners represented attendees, which Connections partner expanded year-over-year. of increase channel an presence new net successful in partners XX% our approximately increase sequentially registered of over customers from of had and

was of for the 'XX Las which of turn to a the Cambium outlook. will call as recognized trade of We our mid-October Year. a also at XXXX, show with significant WISP year, results manufacturer the I to over returned in now in-person WISPAPALOOZA QX in Stephen held review largest 'XX QX financial events and Vegas at the presence the

Stephen Cumming

approximately had X $XX.X second Cambium of $XX million for preliminary August time outlook call 'XX, million our on $XX Atul. million quarter the of outlook announced QX of provided $XX compared Thanks, XX. to and our on original at to of October of the ahead earnings revenues million

press in preliminary reflects outlook our we products. the global supply As constraints change increased mentioned primarily of results shipment in release, impacting the

lower result fewer the supply we shipments due PTP to supply $XX.X X% products quarter-over-quarter and 'XX, remaining backlog our a of enterprise of quarter-over-quarter year-over-year. Revenues to and shipments sequentially up solutions, While by and year-over-year. WiFi X% lower revenues primarily The declined which remained PMP of were constrained, constrained. strong, end were our On basis with remains have due increased by and X% did revenues million. for were decreased increasing QX products sequential products backlog demand XX% federal by XX% seasonality. although backhaul

non-GAAP result QX compared of was margin. quarter-over-quarter margin lower costs than basis QX of gross points and basis, gross to a lower distribution 'XX. costs, gross margin and 'XX. margin costs lower of our of gross increased costs XXX WiFi higher sequential by XXX 'XX year-over-year freight The well in result and of revenues. and decreased non-GAAP as caused a a On non-GAAP was distribution by The was margin XX.X% as decrease Moving shipping. mix to basis higher less XX.X% in gross component products higher-margin component Non-GAAP increased freight QX expedited points

begin help latter Our to 'XX. the previously part should margin QX announced during offset of degradation some gross pricing increases

technologies year marketing, was Non-GAAP to when million development, to the and sequentially. are deliver the believe 'XX general depreciation non-GAAP We to disruption. administrative, offset sales we increased and in and by decreased operating We're QX flat also next-generation everything of million research gross stood to our margin expenses, R&D slower $X marketing XX.X% support and while supply headcount navigate lower QX impact When QX million to XX.X% support to operating 'XX. spend of million global 'XX effects customers In to during EBITDA compared 'XX QX of as million by the and doing non-GAAP temporarily revenues. by constraints, amortization decreased decreased operating of of and $XX costs. 'XX a 'XX, to is We 'XX more for and driving the was 'XX. the $XX.X chain resulting supply lower approximately in in was revenues R&D power efficiencies. compared EBITDA implementing recognize Quarter-over-quarter, XX.X% temporarily QX but in Non-GAAP result gross transitory increased operating some variable or million revenues target to and to of compensation or at revenue. spending to by products, in marketing our QX compared we lost business. majority With expenses to $XX.X hiring to down remain increase operating XX.X% compared to leverage and non-GAAP or challenges. from higher revenues, impacted $X.X we for of due for our QX $XX.X QX The prior due was escalating supply due and and XX.X% increased QX the QX XX.X%, 'XX. compared activities. of committed to or our of from expenses our higher were XX.X% profit due during the dollars margin improved XX% $X.X surcharges year-over-year to are spend on $XX.X revenues adjusted model G&A of upcoming and revenues Adjusted our operating we million sales million although 'XX, XX% of

results diluted $X.X 'XX. million impacting plan QX supply $XX.X to due $XX.X prior or Moving primarily operating diluted income inventories. the the a quarter activities QX XXXX. Cash quarter-over-quarter until share, diluted for or for $XX.X 'XX or in constraints only and the by in and million million capital million for quarter increase expenses both $X.XX net net operating revenues reduce compared $XX.X non-GAAP compares This 'XX positive compared chain with and cash operating activities net share slight management third $X.XX until cash payables was working net of flow the manage lower for QX in net income million improved We second to the and per dollars lower of The increase the normalizes. non-GAAP share during quarter by quarter flow. was accounts to the able million third cost was income of income had per of to The of gross receivables and for was and of increase quarter margin provided Non-GAAP provided an and offset We're XXXX our by reduction result the per expenses to operating supply accounts year primarily in prior million quarter's $X.XX good improve. accordingly for cash capital to high of a $XX.X to working from $X.X impact the the XXXX. the management.

and increase totaled to strong balance decreased reduction of Cash positive $XXX,XXX increase income in were an cash 'XX. as QX Turning working primarily year-over-year and million million sheet. Net the from 'XX reflects $XX.X QX capital The QX $XX.X million higher $X.X 'XX, QX from includes by inventories 'XX. a in management of sequential in $X.X million $XXX,XXX by debt. and net

we position component which third we partners, challenge, anticipated our the the quarter While help increase to supply scarcity In as well was next to due costs our support as the growth ongoing than over our impacted quarters the business. tougher chain some few -- are high from of summary, supply as remains an working shipments. chain of to the and inventory decommits

remains Our strong. order book

product We we the and from as business government broadband exit new funding to benefit of are at expect our we start in cycles, increased wireless XXXX.

operational Our the federal accelerate scale, business make are Once is well, expect operating regain excellent XXXX. expect and also the during achieving we long-term improve developing on to business and federal resolved, supply progress target model. our we to efficiency very issues

Moving Networks items legal extent impact foreseeable. only in fourth quarter not note acquisitions, outlook. XXXX the transactions. Please transactions, of other our includes financial the to Cambium or financial future they outlook matters Cambium such Accordingly, reasonably financial that are financial possible Networks' to pending potential does outlook any include the

follows: between as $X.X non-GAAP may $X.X or between materially $XX.X net $XX.X and However, operating revenues million non-GAAP adjusted and share, as $X.XX XX% to million approximately between diluted EBITDA interest $X be of million approximately and average to weighted differ expense $X.X effective XX.X to are closing our outlook $X.X between income expenditures diluted margin million to flow from $XX.X income EBITDA million of our XX% $XX.X is XXXX, shares and actual between expenses between I'll million $X.X financial expense call non-GAAP million per million, November interest to million. $XXX,XXX of $X.X as follows: for now to XX.X%, expected $XXX,XXX the to operating million Atul margin net XX%, remarks. capital requirements net a million non-GAAP of between current to million XX.X% to $X.X and back the non-GAAP expected approximately visibility to be outlook. approximately tax gross to X, turn Cash results million, 'XX between Considering QX between cash adjusted to income $X.XX X.X% to some rate outstanding.

Atul Bhatnagar

While we are XX our QX our as for future wave clearly and solutions drivers multiple 'XX such success, X cnMaestro XG remain new for cnWave enterprise wireless with our wireless results, disappointed WiFi as as millimeter and growth XE, intact including products Cambium's multi-gigabit X well gigahertz products, XX gigahertz wireless-savvy our solution. fixed software-as-a-service switching

increased managing edge. our and judiciously costs, technology scale focused operating to continuing innovative invest expect to we remain benefit maintain our in future while on We products results, our should

solutions it to be wireless governments, it solutions. Our wireless device agencies can using to If to be wireless our diligently the our continues help remain solution. constant. deploy a work bridge fabric wireless enterprises solution, vision will digital Cambium advanced with different a and

prepared my to like appreciation their our employees, would for customers This for I our during these Finally, times. concludes share perseverance partners remarks. unprecedented and

I the with Judith Q&A session. turn like over to So begin and would to the that, call

Operator

[Operator Instructions].

line Our comes first of of Samik Chatterjee from JPMorgan. question the

Joseph Cardoso

on Cardoso Joe for is Samik Chatterjee. This

baking quarter? million the just well? XQ? to expected then And is we million? of the the quarter. to question your of How me. relative that to guide, quarter the to increases was million that in as So just Or go the expectation is are roughly you a bleed similar December headwinds into headwind in the into And much Or behind supply that now? is largely $XX $XX like $XX was as sounds related December impact September supply to headwind the million you revenue $XX that one for it decommitments in from

Stephen Cumming

Yes.

earnings When backlog think pretty quarter's So month, mentioned QX, I and Stephen. XXX% had on and even this first is very position call that the we it guide much had we our our covered. we strong of we came into a last

hadn't from guidance. or we a we quarters, had perspective, what -- of QX And it's derisked a we give quarters suppliers. what Just to elevated of as to the because previous And supply through supply like seen our of gave latter through, decommits. we say what that previous any of also and of seen really QX of the felt challenges different level really to was the us rest decommits an I head continued perspective would many in started the August, you for that we we've But level we quarter. in of sort comprehended part we not when from went saw

one this we able but the nice probably which market into think little other for reason in the to also previous to I -- quarters. so lever for miss, of were majority historically a the that were overlay tap was secondary options us

couldn't dramatic always start And saw auction-like where to price so we participate. behavior up in really And of things that, also we side dry that some QX. areas around we increases, saw actually

us some constraints. meaningful left with that So

general, meant well matter end. part the still the lower as it in whether you semiconductor had you the ship high-end And constraints it missing, think I really across chips a as went couldn't product. $X.XX didn't

million $XX was question. to answer I perspective, $XX overall delta it between to I your original think from think an million somewhere

beyond headwinds improve. say In can't a are bit that is say, we've seeing a are our QX, that commits terms maybe or but we're we little we things, seeing a guidance. our to more built Overall, decommits, for of stabilize. sense have extend X still But I started bit little I month into our seeing weeks. things more, would necessarily suppliers

Operator

of of from Rod Hall Goldman question Sachs. next the Our line comes

Roderick Hall

maybe to of that XXs, year this and head here. kind little to just come mid- curious $XX to a from like here? a kind starts Or the what and of that we high $XX a in of up this to revenue how cap -- bit low kind and supply the like the I'm first curious, of the you about it's that the wanted of point to or think couple million quarter beginning then kind revenue million in like as I've to back level then follow-up. you're the for here? year. think ramp Just I do looks of expect between of got revenue gets into of revenue a And quarters from is be looks better kind trajectory X? experiencing? do It you

Stephen Cumming

mean, I again. this Yes. Rob, Stephen is

think dynamic. pretty this it's I environment, in

be and you to other So number, as tough are things precise is to quite frankly, the see especially quarter narrow sense stabilizing. back give in earlier comments, at out. my I'll we it's go that moment our that

to go don't as we that this any they're to not so any upon precise be time. into in point of tough we're QX, too we indications it's see improve necessarily And sort can getting getting at think we I'd but But better. like worse, that. materially

Roderick Hall

Okay.

Okay. And to then on ask wanted I pricing.

about price increases. talked You

Just of if you isn't at unique one feels things increases. this somewhat quantify it all, of can seeing price across you our And probably how increasing -- but course, it we're companies. of I are all course, the mean, curious nor and are of to prices? much you,

them around curious sticky mean you those what's be? for roll Do pricing how to all maintain I 'XX, increased you Just do expect here? think your back? will prices of strategy think those you you'll

Stephen Cumming

Rod. Yes,

the would were going our we I go we cast call, So of actually earnings into price mentioned at to end your QX. have a QX effect to increase that mind that back

to try costs. And plan, impact is necessarily can won't we But as recognize input see so that the around immediate. at as recover much we we moment higher be the our this as to

surprised terribly seems many challenges, actions, customers they're the our similar. not doing it about think are competitors fact our of the the something pricing given that I and recognize

of pricing I at mentioned I it. QX. think the effect last say, of we're in went the our ahead earnings new We call, on this, into end proactive getting as

this executing we're the way the in to will supply go the the we end burn more see attempt existing as the about as will to it of I prepared on to of of that the half quarter. of didn't us. system and of pricing bit a general, say XXXX of We through its costs. in you customers we So impact really into handle implementing These recover have ahead to booking would meaningful But way the impact for this. work think towards we say expect XXXX. I on if that should cost. of see effects sort our I implemented. expect, I effect other in again, cancellations you moment. And environment larger backlog remarks at activity you And in try this to once into heard And start we inflationary increase the this can pretty the sticky help would that the are anything off offset item quarter. think little get the and acceleration things first say, chain surcharges initial that that go these as as in the much we're saw, of I would

Atul Bhatnagar

happened permanent. comment. industry in changes bringing really for Maybe Yes. in millimeter wave, things one home, the which government Those more broadband, Rod, WiFi need communities, are working connectivity pretty shifts demand. projects are have are quick X. technology driving The People happening from all the towards

anything, surcharge, customers, it's whether have we and changes the good, we in of by strong. always business If healthy are So have think zone. changes strong have partners, and pretty made, And in we gross very demand remain I they always pricing, very making understand them, keeping support. whether will run the we it's and channel Cambium margins council the advisory a proactive remains good we model all

they of not but velocity, our fast bumps. some temporary slowed us And slow are they these we speed So they forward. as things have down we're will describing,

Roderick Hall

it's anybody a business, of just pricing. lot for wise? thinks gone And Yes. question of a is that I trajectory there How what the on then you -- this don't demand Or to anywhere of how question think has is Atul, kind a in or thing the percentage average it are XX% like increase guys -- that's have prices increase seen much -- What people a XX%? can answer. that? big didn't quantify of one expect you

Stephen Cumming

XX%. between Somewhere XX% that and

Roderick Hall

the that like of again? Okay. get them other how back then sort time. think you'll question And saying lot but sticky. will is -- Is down your right the It to I flex way just this? with you're reviewing sticky, you it customers a we interpret pretty sounds Or over big keep

Stephen Cumming

Yes.

monitoring on We're weekly We activity sell-through. new and are daily, laser-focused looking, POS booking this. a it and obviously,

sticky. this like is pretty our So sense watching a but yes, it's we're hawk,

Operator

comes Simon James. of next from of Raymond Leopold question line the Our

Simon Leopold

trying up sense, it about You think talked that that should about of how incremental but it a which shows with Is short-term it's understanding associated constraints, would some kind worth doing chip an expense. of be think going impact, in to makes forward? or that your out? assume and about the to enough redesigns get R&D how And onetime large we calling

Atul Bhatnagar

which of could the sophisticated dried that some by and redesign X and or supply whether the or it's in is that chips, with gigahertz, chips, ways, large, the parts. XX sophisticated, for question. knew the also up. big we not one smaller WiFi gigahertz It's for Simon, the the the that. Interestingly, are mill thank surprise, we chips, XX actually, deal you

So redesigns we were term. are mostly They quick there, pretty speed, took of done. They that. are the and short care

products in QX, we'll QX. in majority the produce actually come of some even but And will

had through a in So is a part, expense don't a depend to just significant paucity. which big it's It's we go to impact. inconvenience sure not which we make just on

Simon Leopold

in Atul, then with the recently, of much companies and may difficult terms first networking the many through I'm interpretation, is constraints it's if feel than prepared in a I contrast that you entire interpreting it's see the this of we've through year there's And of 'XX And Basically, be of like where least your the think different an conference most And don't other chain looks around -- the it the saying, recover supply year. constraints? be supply me the to that your to want tone going to I'm my very in admitting impression the of joined but left chain calls other ease remarks, just turn we experience reason companies at good challenging. to half year.

Atul Bhatnagar

Yes.

was Simon, as XXXX, be, of ways, feeling So XXXX, in will In I think see right strong. some first we very now, is reverse half XXXX. it our

have we're and what cautious we partners. think that's remain, first are pretty we chip half, our closely XXXX, half with these will In Second bumps. I speed watching, we're very working

improvement. but I color you half, give be There are So that. second And more the will let not It's may half lot. good me tad on similar. the little first a on a be whole counting we think improvement

commits. meetings working senior monitoring visibility at suppliers, level. weekly our And X, better top both have as top with They than chip we well a are We have they themselves level X as had before.

of the commits, So leadership. are us lower-level as to pretty visibility, as both good organization we feel as terms well our communicated senior being by they their in

for it's alignment. So

half improvement. should So we 'XX, of second I see would say

very I That's interpret our to like cautious how would First half are we about. you comments.

Operator

Our next Jefferies. from Notter line of the question of comes George

George Notter

I up constraints. do the supply guess chain I inventory wanted obviously, where things But moving channel demand to inventory last of lots ask quarter there's to terms wound side of of you quarter? end in also. Certainly, weeks levels. think with about levels here parts at or the relative

Stephen Cumming

is little Stephen. which is pretty spoken this We've this inventories of Channel for actually, good terms basis. a a thing we this us, got bit. environment. a some that came think and Yes, monthly we've about past. in Channel weekly in inventory lot in on a up the tools and managing good a

they products from out things by them of because door But the able things. side be may to complete think of that's set get I partly shift allow the to also not that's certainly the well. to as to distributor design

this carefully. is don't monitor little we're if up which a very the concerned anything, look about it at a came sell-through. We POS We we thing. but -- good not So it, bit,

George Notter

it. Got

understand which other the And a working saw your I you around companies counter in should been I what running few kind we you've trying if quarters, levels other September. sequential inventory forward? guys what On expect levels, one to were environment. could. back But Is I this I'm going I -- go narrative mean inventories, to inventory sort are if how guess, of in I Okay. guess doing many down improvement and is, then there I one, of the

Stephen Cumming

our desired are of want level the levels rate that Yes. I we clearly given mean of company. inventory growth not the the

challenges, into XX XX a weather I a not us year point allowed or is very inventory had We're to the the that desired inventory think the very about now constraint supply certainly coming days. nicely. where level. our we of They're first healthy level half our at of actually

I additional over build put supply of ultimately, to target coming and on think sort back days, environment, of want we and sort inventory the in we that XX buffer. XX to pending quarters to But that to it's intend shelves to this constraints. tough the these any do

Operator

ROTH of Capital. have We a question Scott from Searle

Scott Searle

if And now? XX% What's calibrate you in clarify in was coverage a what there? fourth visibility sure your wondering strong XX%, big you that? of of kind quarter? to and could have provided looking actually you Just region. also, a not results, fourth the a looks terms like as of that, of I us demand September Do thought you in of that supply to right I'm confidence have well that comments strong, level have terms number if terms front. surprisingly standpoint against of what from you the guidance WiFi I Europe the was was on the quarter actual that help at in

have have the will issues across I read anything Or to wondering follow-up. sourcing on that standpoint, different a that? is And going some supply into I'm regions? So different from then you if a there's there

Stephen Cumming

of and a meeting a almost supply few this, with perspective, vendors. maybe at end. them bit I'll we through in of with add little Atul But go We're take pretty a commitments terms this Yes. Scott, our can daily. the and from extensively

we and of backup given guidance So have from you. that have lenders, to we support our the commits we've sort

From a into XXX% we better support that be dynamic From coming that. very pretty number. well healthy hope we I backlog backlog a to to environment. a a little we But in able bit have So demand of perspective, place bookings than perspective, the clearly, it's a guide quarter. already that will over have do in

But supply dynamic. and really it appropriately regard with comes as we've it just that us derisked conservative -- So hopefully working -- down guide. that to to being we're

Atul Bhatnagar

Yes.

enterprise. of There's in resurgence business couple well. back channel a for region hospitality where the strong Cambium. very Scott, and the run a enterprise is strong very that quick a as a rate for business EMEA also of enterprise. establishment, So There's they led comments

think Networks about enterprise continents, strong good I product gigahertz have want gigahertz. in our the we point. the into for in all prepared will lead the business EMEA. XX But MU-MIMO pretty business. we one EMEA XG. to well POCs said pricing for go and of extremely as very concepts X remarks, innovative, fixed proof XX point-to-multipoint I both make feel wireless is we products as disruptive as of gigahertz as So adoption establishment Cambium we going, XX And in more

feel when as in as business about touched we our will arena EMEA good defense. see you that, business for point-to-multipoint accelerate enterprise it remarks, prepared and 'XX continue in we defense well to to comes very Cambium So and upon

funnels multiple are diversified -- with countries. funnels have Our

Our plan also of taking programs, revenue. record funnels recurring POR, into account are which have

side in will So EMEA general, the EMEA of just also the not be and also defense but enterprise PMP, accelerating.

EMEA. gives So hopefully, you color a about little that

Scott Searle

RDOF idea that XX any to coming line. gigahertz, helpful. related specific of these issues the And impact the can specifically up one supply well, I from to concerns Atul for that thinking XX then and portfolio of up? those there the of coupling CBRS on supply the standpoint, down to a as the and in size Are up there to magnitude constraints ability And and Are that you if ramp us Very to in are maybe gig terms opportunities. are of or given that discussion. X.X your the start into follow things Are gig and deployments products ramp those an then products you're of they the and newer going product new could any comments, about that of areas? some as the game to give new

Atul Bhatnagar

excellent Scott, question.

upon leader. gigahertz, was answer. a supply XX QX are in speaking, we better of positioned me see touch terms if because can Let in relatively I and

probably We And out, see are X I quarter would quarters, to next the gigahertz. #X player emerging coming research reports, XX market extremely and think say, in see fast as positioned. Cambium you'll well over you I

gigahertz XX we have years. who X products. X year, overtaking were tens And of of or in shipped X are We thousands companies there for

XX year, just as XXX XX ship And of the the X shipped or we -- product at the have gigahertz. we had had 'XX. with We new beginning QX we customers probably that

the XX% grow between also XX get This which the access you market CAGR XXXX is will to, So very a we is can And market well growing XXXX. gigahertz in market positioned. a XXX% gigahertz report, 'XX And research Group. XX approximately is 'XX. to Group XXX between this XXX -- to it's research.

the So Cambium demand about innovation. we there, very good the feel

sophisticated when impacting. mill some to impacts I Now -- products comes both think run supply, of also challenges remember with, it chips, chips will whatever supply because said, are have what I but the are of level we dealing the

not X very gigahertz it's the chips. but necessarily So XX basic chips, or other chips Ethernet just sometimes it's

wise, So I of the question. down your could overall, think we that answers of supply. definitely slow some feel very kind demand But I that very, strong. hope

Operator

of of from the JMP comes Erik question next Securities. Suppiger line Our

Erik Suppiger

of thinking a to more around how navigate Cambium them What decommits. networking seen perspective larger some terms think broadly they're little context all constraints, I the affected vendors. in you others? get able post just wanted some and report, but We've it -- struggling decommits to maybe some with these is other is switching other of your than Do by been are vendors? to are how affecting have Or how pretty through other results. you're good susceptible versus you more

Atul Bhatnagar

question. good Erik,

we be is impacts the and but your or of into that the whom exactly a upon and from buys you impacted. know architecture. color. go chip wouldn't is equipment dominant impact I are. manufacturer depends will what your chip And more me who give manufacturer, supplier timing go be It into different. their which little Let which Every The network may

Our feel weekly And worked level comfortable, on have partner the now the particularly evaluating at enterprise, are very relationship the very basis, we a that visibility. with, have chips, the senior level, we on company. of we the closely they we have on

of So decommits, is see, we I think far can I the as think depth that over. the decommits as --

half, sense I they the there improvement. as question my can be first the is said, tad how supply. And might that Now is much

is architectures for where especially where like XX second half first type XX will to think, WiFi be half we products. these X I improvement kind and of similar new good will of The are. gigahertz, we the see, and But our gigahertz this

I based -- on. like little different things But they they lot had is of that they this more -- where make are company also in a story one who impact while and on the each a wireless chips. those is placed. a well one of depending different So were of have paucity and And reasonably timing little different will those analog-to-digital, a point of fixed of QX, lot to want chips, broadband uses

results, chips. and we supply the if to few So had we look first had we the good you inventory because of were quarters able also at weather those

key message So some I have decommits, I we think we depth these believe think overall, dealt that is of with. my the

and meetings. proactively, communication, good a will I more would on visibility But working of lot come have senior-level Now good we visibility. visibility. we reasonably that like through weekly our are these

Erik Suppiger

your Do feel you vendors? terms volume and size to work dominant your like is advantage with ability or in an your disadvantage of

Atul Bhatnagar

value companies as I bigger products uses there the far that most reason the us. XX size-wise, be I the have, feedback. -- than meetings Our whether of said, it's make But think products, we is the way, gigahertz XX and in sophisticated they they may best us, Cambium other may some be I many us who in point gigahertz for the value

that the able rapidly. intense, able companies software-defined Wi-Fi, RF lot them we they're to and give fact testing, things. maybe of don't to have And very as so design is give feedback, we they labs which radios, architecture very them are We in-depth, find MU-MIMO for other a like which

result, value designs, others, partnerships new they be products, we with volume-wise are that. fast I new strong, move pretty that, those us For and and may the as reasonably think value a they there

Operator

Our of Barrington Howe line Research. Chris next question of from comes the

Huang Howe

may question, ease to this we But But can supply is how half cautious approach get let's think gotten than good wanted as how foresee as later. you rather half, the changing move, second is the cnMaestro we chain. product caution some mind be software the looking? I into services, with a horizon, half first the from in stance. on sooner offset want the on My second you here centered and of And mix 'XX our be the challenges environment. those end able chain calendar the to the business, we of a slightly, things to ask as lot say, a the of of talk I supply to in hopefully the about turn

Atul Bhatnagar

Yes.

me Let a into bit. that go little

working linearity been on and software the software content, better we these well as to realize of the with very able have more diligently the We for front, all some shocks. as deal

WiFi have subscription and are So and which Number we now back-end we scaling. already there are experience. done. key have we X CBRS things systems, have subscription one, we

and experience, on good in that. So will continued see focus 'XX, you

software also working Secondly, vertical then software X hospitality integrating -- hospitality. like more who taking the are managed partners vertical service curated have go we and applications, vertical cnMaestro We're that's very vertical to with X ecosystem, and the value key can start initiative providers to enterprise. in cnMaestro we second of increasing we And are that key X we have. cnMaestro those our with so monetize we

its The third come mandatory our we new X the will into whether thing products, we care we or as is as mandatory. Cambium be 'XX, we doing it's are XX go with making it software, and gigahertz cnMaestro features gigahertz are that XX support up

has So revenue a the goal from our very stated specific of years software. XX% been Cambium drive the we come are in right X doing software will to lot in things of direction. revenue And

every working we that in drive we'll give visibility And revenue more So these what of are are quarter, to you into things the direction. on. kind we're doing the right

Operator

the of Vertical. line question Our comes Jon from Lopez of next

Jonathan Lopez

on I apologize because hopped here. I late sort of

of modeled later. and And I had your is if quite lead my some catch OpEx what specifically point question it a the we QX. at you to would bit I had that for you cadence where in you of adjusting is guess this skip we quarter. So happened during actually started me it, in think below some I and around came guided which my believe your the question where covered it it But stuff, this guess first can --

did talk issues become like wind apparent to where you? when OpEx just wound So maybe how these And up it up? did to the

Stephen Cumming

if want add the this. end. take And at I'll Atul, you Jon, to Yes, anything

we So of perspective, challenges. it of say early but from a guidance, of yes, deep a felt would derisked when level. unfortunately, a quite call, on comprehended, you chain a high I'll we the sort covered discussion missed in our sort at cover we've gave I lot and supply the

to quarter us As level of led through would to latter elevated and of see situation. I the level mid- started and to we we say, August, from decommits suppliers, part our a of sort the went latter -- higher which

I that think into attacked up. a market also that secondary dried in quite we And quarters. successfully was area also previous an

one we areas as did. in built result that really it our quarter, as us went variable out decommit, OpEx back through about would we a of to we the So level QX a of and the is helped there discretionary as half where favorability start compensation top we the think with the spending element components the well. lower second of did OpEx go of started see sort that we as other of elevated I can line on revenue, say to

correct But sort you're the drivers see the right, through started OpEx. this course So was that the little we to on did a we quarter, as bit. of sort accelerate of

Jonathan Lopez

version bookings Got not group. at all. I But think it. But question covered And calendar think transactional, so that this, And the really a do then it's guess much are calendar set my there that chain QX. of those assuming Do perishable. a in apologize, obviously calendar of you how product product probably like which part had much is reliable in that big the is think the And of how QX, most into out product resulting WiFi issues markets. to really, product me guess from kind basically of alternatives again, guess of give now wondering a And I whatever supply is is, jump I you I or you big were reversed that. I'm are quick most my entire this. about 'XX? looking other is I'm group, there in can one you I stack i.e., Understood. your seems for you demand wonder elevated you

Atul Bhatnagar

that. Yes, let me take

drive our hospitality. One at look So enterprise when are is key X about there you segments our business, which growth.

we some software. coming the key As hospitality said, of applications is are back. integrating very there, I with And hospitality our

So I with different work stickiness as think we channel there partners. there is

Xirrus for when third see is at product you education applications think, area, segment also, wins. us we is the look a our education. universities, And line. as emerging, with good good And integrated second units. our have education that's I see key as wins, which The why you key midsized There is you'll institutions multi-dwelling

so coming people course, can But supply, these a is and we go somewhere good of else. adoption large, see demand, would by volume early we far, of at level so stickiness. look good say shipments in QX. move overall. WiFi our in And towards outdoor that architectures, X, don't of WiFi And there's not I when beginning to which all if are we

very outdoor gigahertz setup, deals and winning, is we lot hand that A a combination. installations, a are XX watching the or a gigahertz. lot as they have X a glove. strong XX we go So of in we which into of partner WiFi with are is

what I So proofness. the segments stickiness significant are no would there's say, bullet There is serving. to we

Stephen Cumming

to add quantify things. Jon, that, just just to few would I a

During backlog in in our entered with a QX, business. QX we enterprise. saw record We enterprise record bookings

us we've a bigger bigger And relevant and to stickiness, from that our that deals. much I more think been winning makes customers.

we transactional as don't think see a I So issue. this

and as business XXXX. momentum, we is think especially I more gaining into think more look we the

Atul Bhatnagar

the that's points. access remarks, deal prepared Like announced in the Morocco XX,XXX we

solution are size beginning transactional go which into to sales, Cambium you're now think I not that deals, sales. So see

Operator

Schuman, questions of turning Director Investor the back and now There this to are Analyst call Peter closing Relations Mr. Industry time. no further for I'm Senior at remarks.

Peter Schuman

Judith. you, Thank

During XG arise. QX, Virtual investors James Conference; December November XX, XX December at with any Networks department contact at Security to X, welcome that Virtual November Cambium and the Thank you're call. the will On meantime, Networking Raymond us, on presenting you today's at Investor this In XXX-XX-XXXX Relations be for and our Summit. XX at at meeting Needham with Oppenheimer always questions Conference; Technology Investor Conference; Technology the concludes the joining virtually Virtual Capital the ROTH and on Communications Technology

Operator

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

You may now off. log

Cambium Networks (CMBM) 7 Nov 212021 Q3 Earnings call transcript