CMBM - Earnings call transcript Q3 2024 | Cambium Networks Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Cambium Networks Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jacob Sayer, Chief Financial Officer. Please go ahead.

Jacob Sayer

Rita. you, Thank the thank Networks' and and joining today joining us to Welcome, Quarter you XXXX Cambium via for well Third else Call, Financial for everyone everyone, as for webcast. Results welcome Conference My Jacob name here. is on website Networks, to accessible I'm by X-K. I'm page on Form CEO. The results the Morgan the the the for our and joined press President Investor and release of and our third Chief submitted Officer financial Financial SEC has Cambium been Kurk, quarter of is The after the also Investor transcript remarks available be will of today's the prepared on our call. page of conclusion

As any and a company's Cambium will outlook including any including could to results to uncertainties forecasts based from made the contain update performance. These undertake obligation forecasted financial during forward-looking in conditions, not statements and factors recent are cause the remarks. law, actual policy statements revise reason included encourage safe recent presentation. It's list our any reminder, and Q&A, required for today's listeners materially Except remarks, XX-K of as the and to reiterate on statement filings, Networks differ press about Risks forward-looking today's risk to release most financial full today's not or most assumptions. statements does review in after the our current harbor those and XX-Qs. We outlook. today's

that all to of press is otherwise year-over-year GAAP reference GAAP that's financial non-GAAP the measures and both specifically and sequential also in appendix to will note reference financial included measures We reconciliation release. except results non-GAAP non-GAAP comparisons A noted. where today's numbers, and

financial the operational recap for agenda. the the quarter. Morgan let's I quarter. results quarter discuss the for fourth Now highlights third of for will our and third provide 'XX to will provide outlook And the key a financial turn

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

Morgan C. Kurk

note, market financial QX challenges, Recognizing lower to we 'XX with within Enterprise business August QX range due our important XXXX. the on revenues $XX.X call our by were outlook are by revenues million. This Revenues Jacob. the 'XX offset you, revenues that results were during all Thank revenues. pleased the million. in X, to for provided our Equally lower geographies PTP, XX% in grew to up was primarily point-to-point, defense business, we $XX.X sequentially in we

in constrained belief in confident defense Free cash year, our distributors that are QX million Sales required results from products of September our it budgets will as improved channel, moving inventories. and declines defense 'XX, monies pressures our improved again during and right funding Cambium's channel a zones. Non-GAAP we saw we next the growing margin active cash Operating stood of the in to were support While to distribution as were XX.X%. as QX the reported margins at direction is appears for Cambium's XX. These breakeven gross grow out operationally positive again reported financially, the due business million our $XX.X revenues revenues, by for was balance quarter-over-quarter, higher 'XX communication lower also point. that we than that and to equipment continued strategically. conflict continue of $X.X flow sequentially

and year. in to continue equilibrium the We by at sales to the of expect end sales out be

Cambium's tied revenue demand. to channel being lower more expected end-user directly to inventories forward, Looking are in result

at customer launches. some new Looking

CN United XXXi deployment by ethernet Matrix ranges largest of States other environments. We customer during and of existing attributes saw upgrade PMP in companies and XXXX similar the supports oil selected by required switch and capabilities, grid for that adoption their XXXb existing to extended the PMP maintain outdoor among that in TX Networks industrial trend. temperature QX power and purchased PMP company world's the Series over X industrial expect other One also speeds band. faster XXXvs of gigahertz to an The gas Cambium the customers

We largest platform in adjacent on-site provide retail continue market selected to drive Wave stations distribution growth world's facilities. retailers XX remote centers, fuel of logistics between gigahertz to in XX CN wireless our connectivity one and and stores major their segments retail as and primary and connecting the

The to XX lines. backup will also paths fiber gigahertz CN provide Wave platform existing

Walney XX% deploy, call, As successful discussed cnWave -- Cambium's gigabit to X,XXX on our penetration with the their rate, to due less homes successfully high October. the Voneus to Coast than solution to provide than impress of West both after project United XX-gigahertz Provider the best weeks rapid England WISPA Kingdom's is Wireless time of on deployment. Voneus been recognized last Service WISPA, to greater which wireless weeks in deployment Island gigabit by over award was off access continues XX U.K. only Association, quarter's the which and Internet now has

East Following as reopening. expect Africa our in switches grand deployment first points with on are wide that Simoa additional CN is providing supporting of region and in in access exceptional the switch multiple other to an Matrix matrix required XXXX. The for sites, a completed brands [ we at QX, deployment many Caribbean with company's the deployments CN their and completed network hospitality complete upgrade and at Cambium a and development franchise the hotel site regions, X/XE part location, Middle and ] October WiFi renovation across America global Latin the Europe, the our we Pacific the was company. At sites guest of In broader operations. hotel's experience a in Networks

megabits and many deploy SMs our of PMP boosted be beam success. but of key PMP brought The our to fronts, data support of that works rate module to across per provides Also of were platform combine a more introduced releases X subscriber specific use is ePMP at Maestro workhorse SM, SM, allow X.X product AP. These released the complements launches packages XXXb and the our QX, in forming and advances significant expect XXXX line significantly a numbers We operators for X price users has from released of enhancements with hosted XXX apps scalability that higher apps, back-to-back in networks. and offer cost. It gigahertz. XxX and This to our customized X.X market both data advanced XxX CN we a released capable to new customers more for the achieve performance product XXX than operators rate higher combination enable superiority. lower Looking on added version are XxX that service and now are point AP future our performance at that end cases. access to that

apps providers X market the multi-dwelling with enable new The extended unit, with over apps services assisted residents released manage are Wi-Fi multifamily, targeted workflow. similar and verticals targeted at framework market managers, in time service different will be housing, includes and high-value at market, use a MDU simple property to and apps apps living apps environments. These which first student The cases.

in of 'XX over approximately increased now review results Finally, from under QX year-over-year 'XX financial and on a a financial XX% Jacob turn the QX QX QX 'XX increased cnMaestro total call over devices for Management our basis. and 'XX our to X% Cloud I outlook. will

Jacob Sayer

Morgan. you, Thank

businesses. and quarter. million our good sequentially the business by QX a decreased Turning offset PMP our enterprise as in to our to growth for X% 'XX lesser declines was line of extent, revenue PXP is top $XX.X in

XX% as channel our improved geographies all business revenues inventories more decline. enterprise at specifically, continue Looking sequentially demand in grew our to and

to sequentially declined X% business due The America. Our declined resulting business orders, X in from XX% PXP of primarily slightly PMT deployments by adoption defense Europe. especially gigahertz weakness down sequentially, slower in North in

historic revenue budget trends conflict of projects, as While half we the zones. By for we're active with Middle typically delay driven Europe, a seeing in reflecting enterprise. current higher was defense, to grow enterprise a Morgan PXP EMEA, due sequentially, revenues. offset the higher to revenues, the North this prioritization East, Africa expect region, higher year, year, somewhat X%, mentioned, by in defense by decline by second in business X% for decreased America

and sequentially by Central decreased offset higher CALA, XX% revenue Pacific revenues Latin again, and America, improved on by lower partially PMP by quarter-over-quarter. America, enterprise PXP revenues Asia XX%

to move let's margin. Now gross on

gross E&O on primarily gross 'XX margin and to to move QX. losses XX.X% XX.X% in continued supplier non-GAAP lower commitments. Our margin higher The compared non-GAAP quarter-over-quarter for reflects and QX was higher

work our We costs. to to operating continue hard manage

and actions, non-GAAP our have have impact. discussed stood focusing at by and on expenses are better we quarter, last upon as to reduce taken our future depreciation steps amortization, 'XX an sequentially million to we operating including resources products that most projects expenses, critical manage those As total Based the for $XX.X lower continue success. $X.X QX and in million, Cambium's

We $XX million our adjusted approximately point breakeven to have now revenue rate. run quarterly EBITDA reduced an

saw of larger even our which QX. net a loss or our the loss $X.X for to $X.XX of QX an share non-GAAP the a diluted $X.X improvement $X.X loss of of for saw million million or 'XX, a per per loss in was during impact adjusted was compared an million also on 'XX, QX $X.X net EBITDA loss a for of million QX. We actions from non-GAAP We of share, which loss $X.XX diluted these improvement

higher million to Now QX cash significantly Cash million QX. of activities than sheet. 'XX, provided the provided by let's activities was operating $X.X cash move operating and by in in $X.X flow the balance

was XX, by free flow inventories as consumption. to working We cash managing primarily decreased 'XX and $XX 'XX positive $X.X $X a QX are by from million quarter QX capital for $XX.X the order closely. focused million on cash and million. Net million reducing totaled cycle, of September inventories the improving Cash of driven XXXX, in

inventories then at Our goal outstanding. and XX our is to days maintain reduce approximately

this release, at as not with the with we them liquidity but our As company of covenant measurement seeking we of trailing XX. October quarter, is in point September during outstanding remained in noted working XX. The XX, noncompliance its address our debt September bank press company with the compliance with forbearance covenant compliance covenants. the in was in and is our monthly as were for a to as EBITDA The bank liquidity monthly each these not consolidated with also of compliance covenant from

summary, outlook. Considering EBITDA current between $XX margin XXXX between and loss non-GAAP million we $X follows: between continue expected and the a of to to million; is gross negative to to and results. action financial million quarter adjusted delivered to and $X we fourth to the on negative financial promised X% improve outlook negative million X%. In Non-GAAP Moving $XX.X% our operating a QX our margin to quarter adjusted to between visibility, third EBITDA revenues $XX what $X XX.X%. financial between take million $X million our for negative a be

be are Looking may direction. confident as large that while would the improvements company in not is the we as right the moving like, forward, we

back call as the financially for expenses. And the are results from result, by we over to We I'll closing Morgan continue lowering a expect to improve the controlling remarks. business our now discretionary here. aspects of to turn

Morgan C. Kurk

consistently enterprise, see platforming the and organization operationally, on focused go-to-market optimizing I results. starting our to improving we're for and

capital we As our are lower, chain. less an example, and are operational supply our in costs using

the wireless merging solution At a into traditional XXX this lines, PMP service a provider chips road one ePMP year's converges provide components. that major with and off-the-shelf platform. offers announced show, This PMP Wispapalooza, best-in-class our X migration of unified customized solutions EVO. It performance path with our we liability and product FPGA platform, WiFi map new economic

full has we're architecture industry. we and received, future our well able needs are the to of development Our meet ensuring in currently that been

about software is recent the potential optimism on both direction. in now our legacy business. Equally is and in creating exciting PMP business positive how enterprise of moving This ePMP addition, our our high portion portfolio. current PMP shipping products this both our significantly product reflects a improved important our emphasis opportunities near-term our In and lines genuine XXX releases for

of the have features we our the results in go-to-market and some changes specializing customers. I significant made been specific and for believe on important verticals and in implementing concierge made force, most sales service significant will has have our product company. expect We it a by meaningful focusing sales produce both for progress

transformation scope of as indicators our business continue future by on overseas the results leading to While I'd in by to going and we continued over quarter, for to positive for the significant session. for were like defense we're their the our our and our Cambium their requires efforts. both receive call our and thanking U.S. size to pipeline, With close The dedication employees begin their are that, strategy. grateful Q&A continued and like technical business. I'd past the both feedback I'm programs encouraged turn and disappointing to the through we the Ripka mission future and in tenacity

Operator

[Operator Instructions]

question first John the Our of Tower from Water Roy comes Research. line of

John Marc Roy

for certainly the challenges, I'm the So gross were -- at margin. your of I this One, one What have of expectations a are market couple getting better? you defense guess is talking looking things questions. stuff. about I

sign think challenging or you you're market an margin that sign as the a So as early the improving future? is gross in quite not do

Jacob Sayer

a The to charges. normal mean are but be and smaller And from to I margin Cambium margin house certainly, over low gross next XX% XXs gross order in perspective couple those operating they an certainly is on say, normal own and The inventory inventory a to margins big quarters continue a just for about now E&O last down I'd around at pace in high charges should for for from really year. obsolete excess range getting in of the upward movements the decrease gross trend. perspective. away. We're resulting the dropping our an

as increasing through or we levels we'd so And to those revenue helping line, certainly line approach year. go expect next revenue without

Morgan C. Kurk

just though, on to look, add that. you I'll If

segment, markets, has that the better year. that there we defense average on certainly, If commercial to during as look the next is be of increases, for great best the at expect still you dealing price margins of market But In don't increase. a the alleviated And margins company pressure. our overall will I I than that can. it. think, with And deal most we're

We continue the on market. type of pressure to that going see in

John Marc Roy

Great.

the or defense this you stuff, pushed of it's answer at lost -- kind know just opportunity or delayed I it's this, do point? the but On out feel I mean to like

Morgan C. Kurk

go the else. to we're comfortable So saying very didn't in business somebody

don't of a comment. can What say, know whether I However without. in this business is pushout you just that's sort governments -- do so

go doesn't its program the entire So to fruition.

the this. answer that's So I'd way

John Marc Roy

it. got I Yes,

So on that? now us on of the any expectations give bank situation. Can resolution you color -- when for

Morgan C. Kurk

negotiations as can't, the in firm Obviously, with John. equity that in well. I our is really bank. We're private involved

of than negotiation with and place there's the the took news them. at at other September of in that breaches that right, no end October -- and other end real So than covenant the we're

we can folks just there's yet. concrete So that nothing signal to

John Marc Roy

And have the like headed? Cambium you future enterprise feel last better Do and is, where kind is which I question of doing Understood. great. I the of kind obviously, mean, is like enterprise for you're is

Jacob Sayer

Yes.

think for the the past signaling followed following year, of sort been I I've -- So direction.

doing to we depending it the defense point this even variety market will there I that share, I that allow multipoint as market is a maybe in itself. a is think compressed things. I to growth think while see market forces. being us of And by the maintain work lumpy. how and execute grow don't of we're the on And

Cambium our as So if at area. is you a whole, growth look this

Operator

I am no at questions showing further time. this

I would for Sayer back to remarks. to turn closing Jacob like So it

Jacob Sayer

this Thank for you today's earnings call, conference concludes third much Cambium's and quarter call. joining very

Operator

participation Thank in program. today's conference. concludes your you This for the again

You may now disconnect.

Cambium Networks (CMBM) 7 Nov 242024 Q3 Earnings call transcript