CMBM - Earnings call transcript Q1 2022 | Cambium Networks Corporation

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Operator

Good afternoon. My name is Delphine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cambium Networks First Quarter 2022 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 Mr. Director, conference. Industry Senior may Relations, begin your Investor Schuman, Analyst and you Peter

Peter Schuman

Delphine. and financial of call. for our CFO Form on the page available you, and at by and A conclusion page Cambium release referenced and the has prepared Thank Andrew release be Welcome call on X-K press to today’s our will The webcast. remarks Networks today SEC. a and accessible joining are welcome website CFO, of President been commentary first financial for this Atul us Bronstein, the copy on Bhatnagar, results this quarter press and those of our today’s investor XXXX on also all results our the investor submitted with call call. thank conference joining you CEO; for here are

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

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

President Andrew Turning Bhatnagar, Networks first and for Cambium quarter financial the and provide CFO, CEO, to the our the key Cambium first recap present year XXXX. quarter will agenda. outlook highlights for investment provide second Bronstein, financial XXXX for results XXXX quarter of the will Networks the and full the and Atul a

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

Atul Bhatnagar

industry, impacted Thank results you, Peter. our which We quarter events. our because within of first two faced challenges unexpected supply chain

Government Chinese a First, of manufacturing impacted a our during distribution COVID in last weeks the Shanghai quarter, of lockdown in facility. And second, during lockdown closed two Shenzhen and warehousing middle the March. the

backlog manufactured and during are and strong in we confident Although, certain given some our and a facilities quarter solutions with Wi-Fi. relocated footprint, strong lockdowns backlog backlog geos. financial rapidly that actions global contract product ePMP place. products supply Wi-Fi record components XXXX our recovery quarter-over-quarter be were the the have China in our XXXX quarter We pricing saw anticipate higher improved exited recovers, this affected increased lines and we exited for for now performance. most XX% we to demand multi-gigabit and Cambium’s and with setback, are the chain second expect up fully by once first different in cannot cost-effective QX the revenues XXXX, China. in year-over-year. manufacturers We by the Despite lockdowns, enterprise X% in Despite

reduction in immediate and service, center real-time network customer, service in Italian reports traffic During noticed Experience, a and calls traffic. optimization network which provides congestion late began orders mitigate XXXX performance. One of broadband QX clear new we of and provider, our to taking control an subscription support improved Quality visibility for actual improvements QoE including

our technology the broadband at solutions. the high-performance millimeter of of are wave wireless next We forefront wave including

Our the for multi-gigabit continents shipped XX on new shipped quarter. XX gigahertz have three receipt XG during first POCs of with limited fixed going POCs our customers eight presently gigahertz We cnWave in wireless March. in pending planning for products revenue four in additional equipment quantities

compelling we solutions sizes of wireless cost wireless choice mentioned our gigahertz projects make around the infrastructure during solutions As call, world. deal our cloud-managed XX Cambium’s we larger fixed previously and fabric attractive last expect earnings ownership wireless with cnWave. a for

the the $XX.X first outlook Wi-Fi to of XXXX. and quarter XXXX of more the affected savvy switching announced market and came below call. and results supply XXXX. the were for remains in the products Shenzhen product constrained Shanghai, strong affected to of The fixed although wireless earnings Chinese our shipments Wi-Fi Turning ePMP products. Government environment during QX demand lines during million and wireless Wi-Fi, very in lockdowns by million of $XX.X Revenues $XX.X The million both QX ePMP

across revenues at different our Looking lines. product

of service decreased Our PMP, revenues negatively to and year-over-year, distribution providers. Point-to-Multi-Point, global XX% impacting and decreased products constraints slower sequentially ePMP shipments and from demand XX% supply due business North American

of year decreased decreased to shortages a are and QX revenues improve, XXXX, lower during while by component to although X% gradually, due We shortages component loosen backhaul XX% shipments to continue products, expect period. XXXX. year-over-year prior Point-to-Point, QX in China certain products limiting The to PTP, for with sequentially very strong the the shipments seeing lockdowns business during compared

very our to larger $XX.X Wi-Fi disruptions, due savvy higher healthy across QX distribution win revenues solutions. our X XE million, during with Enterprise sequentially revenues business market as world wireless next-generation had leading-edge Wi-Fi more XX% by for end Demand XX% Enterprise solutions year-over-year and Our decreasing the this continue in customers although to diverse supply we customers and of adopt XXXX. Wi-Fi and and switching remains and

to XX service and solution, speeds gigabit with multi-gigabit very to networks living cnWave to at Jersey and fiber, Looking a some developments. access facility. a to deliver care to makes and points, extending new living gigahertz Cambium’s and residential cnMatrix provider, wireless from savvy and in with to operations wins switches business, family, wanted U.S. X enable five-year minimizing ownership. transformation wireless is efficiencies while X military to the the of wireless of America, North communications a broadband Cambium’s the Scottsdale, and than home the for first PTP managers Cambium’s ownership subscribers at landed cloud affordable with assisted time fabric further Arizona, portion trenching service assisted broadband at for wireless cost Defense manage facility cnMaestro attractive leading cost In XXX friends product Government high-capacity access enterprise. initiatives, iNet, technology plan, in selected customer of notable New management infrastructure. fixed An broadband global Desert assisted digital ability fiber costs. our it living security In connect Residents with easy Cambium’s needed from we the faster base upgrade reliable Wi-Fi Wi-Fi Federal reasonable to deploy total fixed contract

a access the versus across residential of strategic EMEA, mid of XEX-X, since a our result four due University. for on PRODEPA, XE Enterprise cnWave. and The millions Provider with gigahertz to government larger over region, Wi-Fi supplier. selected country. of And and first wireless of single-digit They region. to for a In X to business a Pará. released Latin Caribbean win access have demand program the a the the region, first two end-to-end broadband wireless we fixed savvy South received Recent had Wi-Fi in access wireless Middle Brazil, solution XX XXX millions and the APAC State newly X and of Australian Service in in continue potential we with more wins ePMP last Cambium Africa, be sides incumbent and point, Korea, Africa down of from with although providers Tier performance CALA our was our orders from strong win superior to dollars. Internet China. buildings projects, as the for call continent different win customer were Europe, revenues East networking We the and had Cambium Sang ownership won X,XXX COVID of to region, for we supply enterprise had Wireless America, cost selected to service radio total is and lower our constraints access we we won our a phase across Italy, Ikeja support. and this communications schools. PMP In because continue high-density healthy the fabric both Ji tens to of for the our in supplier for in we displaced government our X performance for Northern and for a provide In our cloud points, XX customer. cnMaestro include, management win schools deploy switching, Cambium’s the superior In XXXX generation We with

since product update. introductions quarterly to Turning our new previous

targets Before At we begin of designed high-density next our five-radio higher with will XE venues. use This auditoriums, which efficient Cambium X and market quarter. much during access the first such availability libraries next meeting of in models expect the earnings to solution announce cost-effective half value-conscious high-density more the rooms, specifically has classrooms, announced five-radio second Wi-Fi calendar call, XE our for and expansion the point high-density buyers indoor including this the portfolio, Wi-Fi new shipping cases. hospitality of the applications solution industry’s Wi-Fi XXXX. is market, end January public and for as Cambium’s

of high-density a services margin. to deliver for solution NaaS, has at strong cost in total stickiness, differentiated history competition. to and revenue Wi-Fi ownership our enable a continues trialing delivers software which America and new build accretive been North Wi-Fi solution. Network-as-a-Service, with Cambium business, recurring lower than the expertise XE and us a highly Cambium Our subscription customer a foundation

are of service. subscription are in and as five-year Cambium Wi-Fi cnMaestro available monthly and terms. a combined made our offering are billed subscription a three-year hardware packages We package with available and Care X The

are performing POCs, in QX well our initial strong we in offering interest are XXXX. Our and commercial seeing

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

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

first show our received our New switching. cnWave, in We enterprise at X and cnWave, trade Fabric Wireless the Wi-Fi gigahertz quarter portfolio Orleans. on During WISPAMERICA showcased XX excellent feedback gigahertz customer the Cambium wireless savvy XX

excitement providers. Our particularly upcoming North with generating solution also service gigabit for connectivity of gigahertz is ePMP lots X American

to over cnHeat, of Andrew for software customers. the I platforms, QoE new and received now XXXX results well the like technology capabilities by including financial and Our XXXX and QX call review will QX a outlook. were our turn also

Andrew Bronstein

Thanks, for quarter-over-quarter Atul, and our with by combined hello, everyone. to million and Cambium pent-up products, supply shipments global XX% QX XXXX. significant The had by XX% $XX.X constraints of of have continue Chinese year-over-year. impacted lockdowns demand. which the decreased revenues Revenues

remained year-over-year. by with shipments end for manufacture strong, QX to and revenues primarily supply solutions backlog impacting sequential and a million. and demand weaker enterprise revenues, global the negatively Point-to-Multi-Point backlog lower the products. increasing lower constraints basis $XX.X and On of due quarter-over-quarter by were Our result were of Wi-Fi XX% X% The revenues XXXX,

the positive gross increases business distribution XXXX result gross the of margin was our to result XXX relative as both by of both by QX the higher our compared non-GAAP XXXX as points during costs The to non-GAAP decreased higher and of points margin XXXX. we impact margin gross Wi-Fi a will The by increases The increased actions year. taken We QX QX will we XXX quarter-over-quarter and On $X.X wireless lower million margin. a the costs, full price shipped caused and well to million million sequential decline of and by proportion non-GAAP revenues have progress to XXXX. switching non-GAAP in in XX.X% improved gross the decreased be to Non-GAAP see second as scale compared half full lower the through by XXXX. on gross the basis shipping. previously benefits realized expedited note, to to sequentially, we the price profit and of gross year-over-year we prior increased of dollars due products. lower $XX.X In freight announced gross continue as from to margin basis fixed compared Moving a and was component basis, higher during $XX.X of our already believe were margin sequential improvements volumes. year of mix

and longer-term marketing, Non-GAAP million of compared XXXX gross amortization XX%. and general $XX.X goal non-GAAP at comprised and development, remains decreased when and annual research XXXX, $XXX QX and operating of revenues. and expenses administrative, Our of approximately by sales target to thousand, an QX or margin XX.X% XX% in stood depreciation to

share, diluted diluted lower compared $X.XX QX XXXX. Given income $X.X million XXXX, primarily X.X% revenues, to R&D professional for to X.X%, XXXX XXXX net non-GAAP of compared XXXX. income XXXX, XX.X% higher QX non-GAAP for per primarily the results had in net revenues, for or and QX revenues million prior and net $XXX,XXX EBITDA to the decreased for million and for $XXX,XXX of for year lower non-GAAP or XXXX XX.X% $XX.X compared QX Quarter-over-quarter The for $XX.X QX was QX were sales and and diluted lower QX the services. to quarter’s $X.X relatively of Adjusted X.X% million of compared G&A was margin $X.X was of per X.X% while down prior lower or decreased or to and Non-GAAP due $X.XX period. lower increases QX due by expenses revenues, operating the period operating income during to variable When or compared modest compared Non-GAAP from prior flat wages profit XXXX. for $X.XX during revenues dollars. to of QX non-GAAP per or XXXX. impacting operating because expenses approximately compensation QX share year share to gross to marketing and salespeople the due revenues million was revenues XXXX, both XXXX, QX

current target to some to XX% adjusted driving lost remain revenues. impacting the to business, XX% With of supply combined we in shipments, lockdowns our leverage temporarily our although our China operating constraints the committed with model we of EBITDA

a Cash of cash XXXX activities for payments, and was in incentive operating distributed in QX operating calendar $X.X variable from decrease operating for during net used -- cash million in accounts QX compensation XXXX. XXXX QX to used XXXX. quarter million payable million activities of timing operating $XX.X to flow. net in compares the to for and in used inventory operations and used for earned activities cash approximately cash the $X.X QX XXXX activities included Moving cash million The of first $XX.X by in provided XXXX. due principally annual $XX.X million compensation

balance the to sheet. Turning

Our from $XX.X cash $XX.X totaled of as QX a XXXX, million decrease of million QX XXXX.

in decrease by million the As cash million previously in payable accounts to a compensation primarily mentioned, million. inventory decrease reflects XXXX the Net variable increased of sequential annual in $XX.X for of from to of of Inventories XXXX. due million QX $XX.X of payment in inventories products $XX.X the Shanghai and timing $X.X were principally a year-over-year, payments, weeks center because by during ship approximately and goods QX two the million sequentially increasing XXXX. higher $X.X warehouse an while from increase last due inability finished distribution to QX the

chain we ongoing working are XXXX. our during challenge, remains increase inventory to the an selectively position While supply

facilities As open and XX% open the of right our in the now Shenzhen and now decent for operating. Components we expect during products. supply of manufacturing Factories improvement in the are balance year. of are are

Shanghai until to We in from centers products and are North America our and distribution operational. some is our centers China in other Europe distribution moving manufacturing fully

distribution as week logistics, take compensate much Shanghai additional for terms as by we it lockdown. supply we China Once Shanghai we environment. an In of chain COVID did normalize lockdowns in operational, are expected become We to an In expect fully to COVID as on play more air predictable. challenging the to quarter activities. of two top summary, completely shipping is one freight to already have strive not weeks could given first the out

we are Our price in that now in second layering increases full to half benefit XXXX. by with the the expect happen

resolved, supply we our strong and are scale, remained backlog toward issues make long-term efficiency, Our re-gain of the operational significant are progress start Once we the cycles. product model. operating and target new expect improve achieving to at

Considering visibility Now XXXX of as QX second current and XXXX the be is quarter today, expected outlook. follows. as moving outlook year financial financial to our full to our

$XX non-GAAP gross to net $X.XX $X.X to between to XX.X%, million, $XX.X between to revenues per and XX.X% million diluted and outstanding. EBITDA X.X%. XX.X% and approximately income adjusted expect to million $X.X expect yielding fully effective we X.X% to diluted million between of net $X.X non-GAAP to income $X.XX diluted share. non-GAAP of and between $XX.X million non-GAAP We XX.X% EBITDA Adjusted average $XXX,XXX shares XX.X be expenses per to share $XX between $X.X margin we million, operating per net operating million, million to And million interest the to expense margin million $XXX,XXX approximately share expect income rate non-GAAP to between $X.X fully be between tax of weighted

expected are requirements follows. cash Our be to as

down expect and $XXX,XXX, CapEx cash between of We debt, the flow million. interest of expense $X.X million expect be $X.X $X.X we pay to million, approximately

financial to year turning Next the outlook. full XXXX

to revenues XX.X%. million, $XXX XX.X% expect million $XXX We to decreasing to be approximately between

We of back for to share, be $X.XX to I expect call adjusted diluted non-GAAP million $X.X the will share now to to remarks. Atul some XX.X%. or per turn per income $XX.X net to diluted closing million X.X% margin EBITDA and $X.XX

Atul Bhatnagar

Cambium’s drivers growth intact. remain

increasing said our solid. and on we last second growth As half supply this reiterate during call, remains chip strategy quarter’s earnings we of year the

should fabric our software-as-a-service of products high-performance as fixed world as and XG, cost our ownership in We costs, technology our later together deployment, solutions. remarks. ease increased Fixed federal and products invest solutions new focused We the maintain future to products, remain to show wireless my scalability during above enterprise The XE, lower business, total solutions deploys X Cambium times. expect cnWave, the wave investments millimeter our prepared returns for our appreciation X switching our wireless brings of as to This savvy our innovative XX new I’d unprecedented these scale networks a XXXX, wireless as wireless and continuing integrated benefit gigahertz partners arriving market and customers see our like employees, from of such edge for judiciously from multi-gigabit operating broadband. results. wireless well expect on to in next-generation gigahertz Wi-Fi in gigahertz XX concludes managing reinvigorated

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

Operator

you. Thank first Bhatnagar. our with question Leopold Our President, CEO Instructions] say to Raymond is I Simon want and Atul [Operator Mr. that’s of James.

Simon Leopold

the a guess was the points, for taking better actually Thanks than better several and XXX I improvement. question. I margin that sequential gross bit little basis surprised I was expected,

trying just get of, how grounding think little I’m to modeling maybe sure bit so you if so a And I’m for make terms a I could about order. in and of in color rank terms to looking

supply You’re the us margin to of trends impact, terms chain what kind got follow segments a in gross are the contributions just in the of And I’ve margin. and help gross up. understand then

Andrew Bronstein

Andrew. Hi. is Yeah. This

when was at news great last gross product causing versus there’s and factors as which the two up, mentioned, One margin was mix. major increase. that look the really quarter, you you So it is that are

then expect in through started versus Wi-Fi still and to numbers situation see Atul impact the very despite the our on basis. our was fully a that quarter its quarter-to-quarter issues benefit and also the that products, before, mentioned, second in percentage with And And that China increases -- way the higher but year, year second first the reason lockdowns, were to it the mentioned we that’s as had be the up system portion the mix. is So that of the the given that of mix benefit in other terms that half working the price we just healthy, a Wi-Fi year-over-year had where of price had we last full that favorably. we increases the of we’ve products,

Simon Leopold

of presuming gigahertz sense that. of ramps in that trying award a into Thank the But, platforms? that get over about you for product materiality as to XX wanted for and is larger I’m XX follow-up or gigahertz the, time is product that particularly on ultimately, product, think playing to contribution did to I’m I mention award. a how the Italy. what And Thank it you guessing opportunity And this the size you. and

Atul Bhatnagar

take Thanks, one. is I that Simon. will This Atul.

in So years give of the around potential in Europe, now. very XX are frequency. a Asia releasing gigahertz America we The licensed five let are addressing next XX color that It’s priority South right providers solutions different. because America, me North years sequence, four about are for more with a They way little XX, you probably in to that larger and I’m what order. excited service

fortifying providers miles So service solution. the square area of the many with that licensed territory broadband and are after going

what providers So us the solution providers, with Tier XXxX X months X to own amount in by is, see service next that’s Cambium ex size. gigahertz service a and of we’ll the return X -- announced support and XX because medium-sized traditional when you you gigahertz X the it is and structure, solution, changing is think support scaling And our engage for what spent provider. globe is many offering. provider really have times total type be if service in a we these sub-X you’re XX the for teams deal probably service going to across I you to solution see had business have larger of substantial dynamics. Tier be And dollars times

earnings So and about script, three coming to think, them, POCs. did pretty give through, the and of gone in two customers. excited we these think, all sizable call just Eight idea, mention an I are XX pretty you I or

architecture, next-generation opens architecture. So, next-generation key And is very different exciting. the Networks this plank are when very These fixed. of we runway -- the very to a XX towards positive, Cambium say XG

Simon Leopold

to quantification when PMP on could think about say, goal? is these you being products we’re chain that constraints, too past hopefully, of ambitious And we around XXXX, that maybe a order just or XX%, put just see If the supply some of opportunity.

Atul Bhatnagar

No.

too I off. far think we not are

Simon Leopold

Great.

Atul Bhatnagar

very Xx, are the looking, at be we larger service did is, I to. be for to indication, gave and might we after to larger if because I of think, the products, me, cater that we ex is surprise Xx sizes as base deal pleasant the for you are to subscriber have providers going revenue they amount frank, area traditional again, Because, looking

Simon Leopold

Thanks that. it. for answering Appreciate

Atul Bhatnagar

Simon. Thanks,

Operator

Thank you.

Goldman Our from next question is Sachs. with Rod Hall

Bala Reddy

my on for is for question. taking This Rod. Bala Thanks Hi.

year full just at operational guidance, to Looking Shenzhen year into I’m baked also is in like It Shenzhen what wondering respect in is up. double you more operations Shanghai. or fully on the your But with click guidance maybe now. ramp just do year? in looks and less Then full being follow the the what I you’re go expecting, you through see how as got

Andrew Bronstein

the Andrew. Thanks Yeah. question. for This is

we of the in terms situation happened $XXX China what current looking terms status looking of $XXX for year, we outlook the is. mentioned being and for in So, at and prudent that million the the million to were -- what’s the at in current

the China, just given quarter we of and the we So that the throughout the forward we year obviously revenues continue well. we very still hard higher impact in and the don’t at to we in which want looking is careful believe first to that outlook quarter second be distribution COVID, terms predict. of manufacturing going to as will we very -- have revenues think facilities that the as than increase do we go will be But

full really a year to and terms be. to view So believe we’re trying be the of very prudent we to balanced have what in

that our total get into it’s at it’s that have Wi-Fi numbers past that’s well, line, we’ll we China in high As gives range, the over situation supply us today in that and the you the very very, or recent the to past. as And in that favorable backlog and that backlog are the we higher look product the -- constraints. especially as recent strong is in as be we discussed been the continues chain confidence despite been and than what even saw as

Bala Reddy

Andrew, XX% in you And indicates at second XX% guidance maybe through I seeing half lockdowns supply like, right into cut Is second the this, beyond of year. the compared if previous thinking about you’re well half revenue year, issues the related possibly to and guidance Right. to year. QX you for said, that, assume new as of the assumes extend the guidance the prudently would look the that then And there? or that the

Andrew Bronstein

the Well, the I is largest half first the really year hit. of taking think, what’s

two about believe had are quarters year. up. when quite below do anticipated for originally we bit a that you So what continue QX those and QX, We to QX think QX the ramp and will

We terms better when of we supply what now visibility good consistent very are February. is we wasn’t yet, back when chips, predicted that’s and have which I getting back and here news with when spoke -- company in in chain the

be we the fact hope a balanced certainly said, recently thinking it what’s have that the some of Shanghai I we’re that of could that hope reopen coming But year. second true. is and as of So does as next the is to had There’s couple we if weeks, we we in in terms that the lockdowns how sooner. soon. given the setback Are as about really the not prudent in China do that received expect or in hurt But we today, of first half glimmer quarter first approach. quarter happen and want

to think So Wi-Fi, continue mentioned. will in as by see of areas to -- of the somewhat we year, I certain do return business half fourth situation the as normal second such to beginning will a the still will we acceleration of and things especially we have quarter, the in we

Atul Bhatnagar

add comment. just can I if Bala, one Yeah.

call, think And availability, I steps of think, chain quarter’s last chip half of have we partners. be we partners, whether I optimistic as second supply very for -- what to its proactive That’s sense we go half chain our think we increasingly and as earnings are that supply cautiously right with very the taken XXXX, baking chip of in we second partners. I into see my this better, that, now. expect said second And we is whether it’s in kind closely working half. very

Andrew Bronstein

we as other add thing Yeah. reopen. here that, for to And would even sit not to waiting I one is today, Shanghai we’re that

We plan enact. to that started have we’ve a

mentioned, incur of areas opening in or a with But we help the incremental will of part North that I region out cause mix, margin. of And during products even that the manufacturing Wi-Fi will America. that, in distribution elsewhere may comments we As the costs additional to Shenzhen that business, think out bigger despite and as favorable that becoming Europe that. that the result the facilities of and shipping other in some Shanghai my with shipping offset of directly a and those hitting costs

Bala Reddy

you. Thank Great.

Andrew Bronstein

Sure.

Operator

you. Thank

Our Samik Chatterjee is next of with question JPMorgan.

Samik Chatterjee

because seeing $XX to sort about where Thanks of my actually exact question I trying It’s the it about is quarter, today, Bala’s of think compare June the do supply. either a and revenue you looks XXXX demand in it million follow to you XQ like, terms wanted doesn’t revenue. taking on you’re up first you’ve what rate one, everything have look run for you Hi. problem. or ask couple, logistics talked I’m did to for I there, like From questions. more a of for

it me, And higher Thank have well. the the June guidance of versus now XQ that To demand, number So than follow run the the in what’s recovering exhibited a mid-XXs you pent-up with plus of back thinking like, supply up your full rate rate I year. exact sort the sort you. had, past. for with you’re implies of holding as million more run particularly $XX revenue sort to that I’m be wondering situation that’s the

Andrew Bronstein

to prudent in year mentioned. how We that’s think and the we’re think and in where do where is I to likely, we’re of which QX, terms around at, in And an where that quarter, -- the about you going we so. we we of And expect mid-XXs or of acceleration even Yeah. the is we’re mid-XXs today the certainly mid-XXs from again, are balance where be being the looking range as expect fourth terms right. in be for at the,

cases with with any we overly QX. lockdowns and that happening there’s terms increase vaccine, But So of and QX outlook COVID the in a treating really get the of et for situation sizable of didn’t that still up COVID China in aggressive their and country come in given of what’s China they’re the how sorts cetera. to in want

to we the over that out best and the can. next prudent quarters, we few we estimate when So want be look

that’s we ended So where up.

Samik Chatterjee

Okay.

Atul Bhatnagar

And also, here. Atul Samik,

Samik Chatterjee

Yeah.

Atul Bhatnagar

only normalcy think in While XXXX. improving, the I things are will come

the Cambium think, product line, we XXXX. the it really that’s I emerging a of product go to improving, think, I will growth line, rocket, high like be So needs but what need

So here, built we where have of I as realistically a experience, that’s And -- on lot taken our what said, go. it steps. proactive you based see we in

chip suppliers. have month forecast We our given to XX

as We products have certain redesigned necessary.

making are and lines our for higher ready We test manufacturing are sure volumes. capacity

times the need also companies what now. for that’s when proper are these focusing on right So and to do we are planning expansion

Samik Chatterjee

it. Got it. Got

up, Atul, around a backlog that shipping it as of expected have had you backlog, have it’s are the at the very in growth guys I I in For and issues to just backlog would similar bigger increase in thinking had terms in mean, quarter-over-quarter XQ, quarter-over-quarter don’t the increase you I that you my what exact unless reporting, said you but wrong. I’m in follow the about a X% given well XQ numbers number absolute looking here, directionally

So lot backlog maybe bigger number just directionally there able it, have XQ? in of sort -- a set despite being why able to not ship on doesn’t in terms of me right a

Andrew Bronstein

Yeah.

increase we the And past than as in. has here. So throughout as the we’re have mentioned, the quarter continued to this I had we’ve recent that today backlog backlog in near highest actually

both now, business, at But quarter. in the where at QX, look to with going we’ve So of Wi-Fi and in this to that is well acceleration the that product, the as think QX, as of of when that total and backlog is the continue ended that you outlook we quarter margins associated seen for time. the QX good at the mix the consideration all grow strength into and what that first at our in that, what takes terms especially, and we and the was where right looking up end was

that given, As see see of see returning very of acceleration showing revenues products especially our into you’ll where, believe as chain, in as we have next And the year we’ll as that as year. going beneficial mentioned, we’re into to we supply put will normalcy Atul -- the the be revenue that’s long towards we’re well last backlog, continued outlook, up marketplace and this that to I both the introducing half we financials. think,

Atul Bhatnagar

three here. I’m Samik, said and we Number as that. reiterating last think one, I getting is half, as make. the into quarter points or better. that Atul well Two second to want chain So, I we go the supply And situation

transitioning S X. fully growth. of segment Enterprise to Wi-Fi these cambium is Remember, are of curves the Secondly,

Enterprise curve well a roadmap, We growth fully new S on mature, received. our are full very portfolio, full with

-- this point. lines XX wire product gestation. an gigahertz is, also is through gigahertz, early and transition wireless in broadband technology of XX going and And that a we point was both are anticipated those Next fixed is important

and Wi-Fi fixed transition So broadband coming this we we and fiber, behind volume X or will the QX. behind wireless and broadband test more of faster. the see that of come and and and next the PMP broadband. sizes, right months see band a technology. us also the line multi-gigabit for gigabit will the it’s you will wins, very simpler. curve comes for connectivity beta probably QX, networks the about very wireless is fixed QX new as is through lot in S Wi-Fi. shipped about deal year, excited. augmenting assure And six curve because new I’m wireless talk QX transition really But This fixed And gigahertz Cambium advanced wireless new, happened transition S

Samik Chatterjee

both. Thank you. Thank

Atul Bhatnagar

Thanks, Samik.

Operator

you. Thank

with Our is next Notter Mr. question of go George Please Jeffries. ahead.

George Notter

comments given some at guess the curious channel about Thanks you guys. levels. past, very where I inventories end stood inventory on I if some of have I QX? us guys much. commentary channel in you was Hi, the just have guess

Atul Bhatnagar

hear George, from good you. to

me take question. that Let

wireless there’s monitor XXXX fixed then pretty, going second and is and broadband, closely. in pretty So, the definitely point-of-sale of half see we XXXX But that. that in we a accelerated buying simulation on the

some and of assimilating customers broadband digesting about kind is think product, in wireless are there because might inventories the be fixed next-generation think I what So to also customers architecture. beginning are

two those now. we they whatever I of drivers grabbing comes in When key it products, think terms the they’re see can right give the we can Enterprise inventory. to the them, are

balance next in Andrew, I good products, But inventories things would we quarters in say, will -- know Anything, land. few still, being they our and the steady-state of want of where in add? you certain field. are still are, to overall, think is is, assimilated inventory a I kind the what where general, wise there the demand

Andrew Bronstein

No.

covered well. you’ve think it I

Atul Bhatnagar

Okay.

George Notter

it. Got

products guess I came higher then about products, talking quarter. inventories some Point-to-Multi-Point access where I of at the I’m end wireless channel products. inferring So out there’s presume we’re the fixed

Atul Bhatnagar

Yeah…

George Notter

And so maybe other products which are lower, Wi-Fi.

Atul Bhatnagar

are for we Remember, as still George, ends lines, all in taken gets I frequencies what think, is, very building constrained If our of product we quarters, or conceiving add of and all point, at we’ll frequencies. up But, industry, more And more right next cranking as And have possible. net-net, products. in the you our are service chips be like, XX might conceiving now. set shifting right of you’re are care some and are provider, customers XX two are our we example, It’s now inventory, that XX. to for in we quarters. product over the happening if this lines, shifting -- Yeah. inventory are of you’re gigahertz, still which you’re sub-X of a ePMP you three

customers act that bit a on. or net-net, quarter goes a able little of are to period. over a handle two balancing So But,

George Notter

want Got pricing. to you. also And I ask about then

you like pricing sounds it increases QX. took in So

the us QX? curious, much of in those remind that can might and assimilated model into have you then, increases were pricing Just how how much been

Atul Bhatnagar

Yeah.

inventory, please lines, approximately, to prices in So pretty and we and is be then have eaten some second on the those and would all would XX% you’ll of our suppliers. face see of would all because we I XX% the did overall, will quarter increase first Andrew, missed. from QX And add existing in price product on, can anything based contracts. And half I pricing. based I say, impact. that inventories and we probably new into say, have where increases existing Approximately, contracts cumulatively wholesome clean, inventory across

George Notter

Yeah.

very Okay. much. you Great. Thanks. Thank

Atul Bhatnagar

you. Thank George. Thanks,

Operator

ROTH is with question Our next Scott Searle Capital. from Instructions] [Operator

Scott Searle

Hey. talk back about redesigning points going wave. else where bit how the geographic be job front chain Good going caused and afternoon. flexible, What for can, to if Thanks was little apologize of I of in from from a a on has we’ve perspective But But of quarters quarters been I struggling more a can a standpoint terms the had questions. if my last not that China? more looks taking little you’ve forward, have resilient problems products. for single there’s doing you things manufacturing three to any you it design more that? a could So do you chain like around again. that that of Atul, failure diversity everyone some can supply best wondering third supply you’re you manufacturing, Yeah. to by two

Atul Bhatnagar

are to very areas -- from There good Scott, we and Yeah. an two One linearity. are hear question. working excellent you very is proactively.

didn’t -- that. I’m going going but you to fact, address ask that, to In I’m

I also reasons the because of back hit you And of one those brings worked these and when events. stuff. proactively very we end also linearity, Andrew in, linearity type on the for working get company think more are that some companies are excellent of you manufacturing harder the into We Andrew and with brought Andrew, is background realized he we loaded, with

have So that’s project we one started.

about China, Secondly, half or in Flex. with on maybe Guadalajara China, with so respect to of say, our and I manufacturing dependency happens would

are broadband done are -- and wireless with So relationship there. strong products fixed them many a already very of our we we have

Asia. Proactively Taiwan our audience In proactively addition, we very Southeast in into areas from Penang. are like diversifying

Cambium China. see Having a said that, lot strategically. of out come of will there diversify to are you supplies, opportunistically continue components, and So they mechanicals, power

in have we manufacturing, in and way XXX we not attention of more lot just is. diversified, all that, pretty And going a wholesomely it better are it’s a realize meaningful so look at are, totally degree the but because fed, that a to manner we we being the it through

give just attention we as designing, you next we our both projects diversify, Southeast are over lot increasingly quarters as make new to an we those So we them decisions, idea, getting a inside towards good are products moving few and Asia. of

Scott Searle

impact if second some And kind that quarter. margin of gross you OpEx Wi-Fi increases, the work the sort sounds of if the if a rolling margins guidance, through But of the could it over. in either lot see quarter, not or front, are in of in helpful. I first follow benefited implies Okay. Very of ramping the more plateauing, the you’ve on up like up an price annual gross then the more kind I mix numbers is from

wondering, is gross year, think about stagnate? it is the in it it the guiding. continue you profile? you’re Does terms not something how half of I’m on margin conservatism Does increase of just the else to as or going there So second level in of

Andrew Bronstein

well that focused XX% on. short-term, goal don’t products And the And ahead very increase prudent the move gross year to and for necessarily inflationary gross we taking the throughout in look the year. pricing because towards that we a very because at strongly being it OpEx, as the of we and happening costs as XX% to bit in chain, a some up in all throughout we as increase But materials the believe overall our margin of pressures. relating around we’re, example, as will that So terms to we at need over OpEx much R&D tightening we goal of with of salaries, as of we supply very terms issues looking go operating the components as of are the of way again, that well we’re where is that on that, in still But margin, the are that the see of focused time. next-gen -- model chips. work

of things think, see margin I the happen should supply chips stabilize certainly towards once in next more the this that year, gross year that marketplace, begin you’ll increase there’s and to think I of end the So further further. and

Scott Searle

Okay.

Andrew Bronstein

answers that hopefully So question. your

Scott Searle

No. congratulations, If that Andrew, Very up a for XXXX? XX% that XX%, the could front, goal follow welcome aboard. By is -- helpful. I I way, if realistic on

Andrew Bronstein

with of I especially think driven half along the in products, by last XXXX, that goal, new the we our hit normalization of could chain. supply

Atul Bhatnagar

this more now. are even funnel stronger. has Yeah. one strong to point driving that we is, geopolitical federal defense add right Maybe, have a strong actually want and Never I very events been the Scott,

in this us and that will XXXX, also margin. think you play second uplift gross expect that a gives of the can defense federal the I generally part for year So key a half good and in the

Scott Searle

Okay.

Andrew Bronstein

being as really we and But look at going to cost doing out prudent diversify of forward. say that’s why gross there will well we’re that of that margins as we’re I China, a be that in looking will how

Atul Bhatnagar

Yeah.

Andrew Bronstein

end at year. looking of be next the towards that I’d So

Scott Searle

you’re understand to Okay. XX I’d about And opportunities? of Atul, you’ve questions them number front. put Could help XG lastly, for larger product Could the on gigahertz you at a talking to you like to being around the quick you XX related talked framework throw about gig XX out excitement gig. it architecture. the what either POCs three got know us products, XG that opportunity talk this for think, you new products was ePMP year speeds, Also, that coming XXXX. could revenue I I revenue about multi-gigabit there’s the offer to wondering that? exiting maybe them front, more the would some possibly I in or you if on be the around some what higher, is expect multiple

Atul Bhatnagar

Sure.

Scott Searle

Thanks. market? And outdoor and certification want of lastly, the solutions, confirm Wi-Fi getting then we’ll XX just when into availability I the to see them roll

Atul Bhatnagar

Scott. Thanks, Okay.

is to go a just One has that of the into region that. frequency plan. little going different we have power a position Each or dynamic. and a strength I’m region that fabric has to a of different deeper Each wireless Cambium

frequency CALA, different so example, XX Europe -- many many and South with gigahertz service they so for different have license America, in So, providers.

a in deal dollars each there well received, very in we a So are I acceleration and of sizes as are deal seeing and deal. larger thee multi-million are XX sizes said, type

clean I you is X So Then I excitement. in is is give two comes time to a going frequency. but America, this -- won’t X.X X.X decades. which is band for of gigahertz -- first band that, go the when flavor. gigahertz it gigahertz, North the the This to start this than deeper it’s to being released

significant for one solutions the wireless the shipments. will frequency to you’re QX So that first Cambium to is be in offer write. the on going new fixed to I volume going curve based beta of and This in and band broadband in call we’re world S what see multi-gigabit

based affordability strategy Our how on this company. we is yet key quality. have build but words, Always and quality. two fantastic affordability, That’s maintain

see wireless us fixed in in a America. will You North broadband offer that

hand from different combination that’s indoor that Customer, and Wi-Fi kilometer integrated these calls we gigahertz single technologies half manages then like pane glove architectures, seeing many Mr. have XX so is in and outdoor glass is fabric customers of say edge, of which So, last that, different or you overall, tell Wi-Fi, the I And the of municipalities. X. are X the the and why frequencies the and and Wi-Fi

that are educational seeing We in institutions.

Wi-Fi, are We using where can you different they use many gigahertz. XX broadband, cnMatrix with they’re and seeing they do they in fixed so situations went in them wireless saying, some now with Wi-Fi now are

So you’ll technology and second that XXXX. interplay think in of see multi-gigabit definitely I as half, well this very powerful is in as

Scott Searle

much. so Thanks Great.

Atul Bhatnagar

Thanks, Scott.

Operator

I There to you. no Peter the would Thank with questions over that, the call to closing Schuman Mr. turn are on statement. like the for queue. And more

Peter Schuman

you, Delphine. Thank

Conference XXth May at Networks Conference and and JPMorgan to today’s presenting welcome Virtual with be Research are the any at Cambium with this call. investors in always you XXth XXXX, you the will questions arise. the XXX-XXX-XXXX on for TMT Boston, our QX and joining Mass. Relations Spring contact on During us Thank concludes meeting In that Department meantime, at May Global Barrington Wednesday Investor

Operator

you gentlemen quarterly that for Ladies concludes your participation. earnings and call. Thank

log now off. may You

Cambium Networks (CMBM) 8 May 222022 Q1 Earnings call transcript