- Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to the Airspan Networks Holdings Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. It is now my pleasure to introduce your host, David Brant, Chief Financial Officer. you. Thank

begin. may You

David Brant

considered much. our are discussion certain investor XX, fact, not available financial uncertainties and items the of review Form to and very available uncertainties. which are Investor a risks statements. risks are our The SEC to including filings include Comments future and actual are other and financial our that to see a differ could September results referred earnings and Airspan to now on this measures, The on On identification on of report point encourage be ended Eric for in release turn results quarterly QX you non-GAAP this our during at involve will and significantly cause XX-Q. following CEO, between from that forward-looking projections most We reconciliation forward-looking Thank XXXX, our on measure over call. Stonestrom. financial presentation will statement our website financial will Chairman detailed non-GAAP to earnings directly comparable on our Relations and call and use operating our website ir.airspan.com. I'll is forward-looking the quarterly statements financial XX-Q measures Form release available quarterly you website. period X, our report and of discuss the the the a XXXX and our call, The we for

Eric Stonestrom

joining Call. Third Earnings Good David. us you morning for you, and Airspan's for Thank thank Quarter

today. progress to for I on welcome in a thank the the business. us call I'd would joining our the we like to begin, Before extend shareholders analysts warm to also following like our

with so on positioned cycle. take start questions Glenn worldwide today for update opportunities. Laxdal Our review Airspan comments in monetize and on with session. trends plan and of to will will explain I progress Q&A last add color to a on these operations what will makes and some a and our markets, your the and the general Brant in trends well general you market we months David rollout XG the Then is financials.

increase trajectory. need globally, At private Regarding encouraging the a XG while a end supply purposes area. encouraged in of range, to new since from of the by orders the periods, the we increased level growing. shortage Despite discernible caused the the labor slight I networks for and headwinds the of ever-growing significant orders trade interest show, private and with to Re was of shortfall interest issues the of quarter an of infrastructure strong positioning for the chain and is and that largest this the in results, our for drivers networks. lower market functions are customers. market enterprise some including We existing improve forcing at Airspan and the terms very savings on private will a focus fueling and backlog. operations number economic cost bookings pre-pandemic very disappointed strong launch evolution received within guidance third describe both list are in background this of shippable customers recent strong new portfolio

are carriers First, managed cost services cutting where for a is major essential. expensive in time

carriers. their to build allow New spectrum own independent enterprises networks options of the

new cases in provide necessary lower the are more many XG and their limits as automation latency required. connectivity need indoors stretched sufficient for applications solutions Wi-Fi macro not to and of third, propagation bandwidth are the network Second, to

So path a XG modernization. local straightforward is infrastructure to the most

position. demand trends networks private our and quarter third XX reflects Our in the strong project wins both

X for existing networks growth, $XX and addition by low-cost mobile In Tier million-plus orders driven was to interconnect mobile technologies city new wireless the network infrastructure. offer on order by urban fueled smart several gigabit and Airspan's versatile to platforms, products combining private and increase fixed intake fixed

broadband In inflationary award portfolio made and areas and in further fiber hit products. like face or last connecting to of areas week shortage stimulus differentiation, with faces this Florida we in our industry-leading product new We our in issues. the City to also expensive money where additions projects demand, the see beginning increasing new remains growing about announced the several rural Smart whether the underserved, product all-in-one have to as urban

expense multiyear a sales new force growing and bookings R&D the introducing of our quarter, increasing on to multiplier pace network in systems and sales focused at as also of operating hyperscalers, and integrators highs hitting million $X savings efficiency, process. have while We achieving products the brings record distributors

Chief the go turn President and to detail. me Glenn into Operating call over Laxdal, to Officer, more Let

Glenn Laxdal

Thanks, QX I year-to-date. of will business the Eric. details regarding cover and our some in

high supply The third range that, had component Having critical in in guidance gross our recommits strongest into had X global revenue our $X end illustrate said of range. which the lead challenge, a our quarter component below in bookings from customers our of due largest while bookings over chain customers. the quarter revenue results terms across just number million environment years puts over the demand remains margins million X $XX in QX. about and came strong. reflected challenging chain We of we a supply of small with To supply, at to

plans. $XX the in XG ground the order ground be rolled the for our deployed market XG deployment In smart are We've multiyear we've which private we related in and air contract the this booking of XX% of also with our purchase progress market. up private for a significant network to total to compared XG are across out. a customer the to the wins third is we're the development XX with and developing million network of XXX added and the Aircard, and cities continuing base networks In the and XXX Gogo, quarter seeing stations consortium, brings market, XG over good XG, in for the network first a wins. previous the extended quarter, go We private

delay Our XG the in this launch been year one from chipset our to Aircard from middle suppliers. due XG QX has the key a of to delayed of XXXX

Regarding of for delivers new access product commercial new our been of response This qualifies the tier over product bandwidth and has product for wireless ramping we're X gigabits strong. launch and field fixed wireless now second the therefore, X introduction, RDOF funding. gigabit very deployment series per in

to XXXX wallet fixed access growth a product reflects in Our XXXX. bookings over XX% date

price side, chain which this to some gross impact, effect customers, we're which with take key our with component of and shortages, To price secure QX. On able been in our deal the offset supply in we've QX. impacted increases, recommits continuing margins increases to

We middle expect with the supply long of continued lead chain impacts to the see across board. from into times the XXXX

over to walk to financial it let Now me through results. David the turn

David Brant

Ran. Thanks,

flat revenue in margin was last quarter, the XX% with the XX.X% to of the the XX% year Turning quarter. down the $XX.X for product on margin in period million, second year-over-year higher revenue up third year. quarter, nonrecurring We of from XX same quarter presentation. saw due investor last with strong in Slide saw the from down the to and engineering X% average last variance quarter the mix revenues XX.X%, We essentially majority the ago in bookings quarter. sequentially Gross the from year's third

chain quarter Adjusted of of Second million $XX was quarter XXXX. $XX a to net $XX.X the compared a transportation loss third the $XX.X in last loss loss is supply a for was Demand quarter net a $XX quarter be strong, by year of products million though of loss net and in of million million availability. the a $XX.X million loss and last million EBITDA dominated and compared to long to challenges times our of loss period. lead ago continue

in seeing are we of previous transportation However, an quarters. easing costs

hard finding middle and mitigate working supply to into alternative components, by challenges with lead XXXX. of challenges to to closely partners. changes technological We time extend chain the anticipate continue We work our such design

order the expenses, quarter As third savings million we've need been to in in quarter, already capital third resulted of operating reduce approximately obligations and in quarter which operating working reduction to We've customer stated with from 'XX. satisfy with To certain address $XX.X our our continue progress of company's continuing long-term expenses significant strategy, the realize with the target second of are the steps reduction by to the in made its $X quarter. SBA quarter million here taken we've accelerating the cash. we'll our and fourth these discussions additional in expected and improve exceeding successful quarter receivables, requirements, year-end. XX% last ended

in loss Third was $X due million, the the primarily cash quarter. quarter to use

to debt facilities. our Turning

note XXXX. financial Form our XX-Q Fortress with compliance Fortress company in credit the and and certain subsequent covenants agreement under detailed to filing, in as of was XX, not agreement As the convertible September the

would company the In company periods next addition, covenants it's compliance of prospective its concluded not certain in certain probable the forecast, of with management's financial months. XX has be based during the that on

related the to with liquidity breaches, situation. we prospective capital this We are in Accordingly, waivers be so the seeking the the connection in lenders discussion to satisfy is sources while covenants that of company company compliance pursuing obligations. such from applicable with alternative also will is able with minimum

As a current result, sheet. as debt the company on has the balance classified its

and 'XX XX% $XX COVID-XX component XX% views things, Asia. and quarter QX and 'XX, restrictions by, your from the that, availability million and Looking With an over Glenn it gross Operator, among These other margin I questions. million, forward, increase of will expenses come for open impacted XX%. to please approximately $XX between XX% be to we to of up related with revenue between expect questions. third Eric, may representing in challenges

Operator

you. Thank

a conducting be now will session. We [Operator Instructions]. question-and-answer

from state question. line of Our the Ben New first Harwood Please from question Street is Research. your

Ben Harwood

your a just I have partnerships. on couple

you enterprise you customers? and partnerships you you. Where enterprise are Rakuten first seeing you progressing? being among have your with partnerships? and partnerships based large with and with Open Or And partnership accelerate your applications? networking partners what mainly secondly, So how increased upon Thank Telcoâ€™s? wins it your benefits. is deals Is XG on these these what do seeing then hyperscalers that the confidence in see RAN it platform? you provide Telco in in are won that And Symphony, And on are

Eric Stonestrom

the for Thanks Yes. question.

Rakuten the relationship. First,

We pleased with third rolling with from the very are new pleased continued the Open purchase pleased very the out network in commitments Very particularly relationship been in several of you very quarter, a performance. products. with and know, as technology the in adoption Rakuten deep, Japan. We've RAN

been So us. healthy in Japan, relationship and has for buoyant very the

the are Open we of performance to RAN with look very As But period in demonstration with encouraging think than across we getting new happened hit. good date in be general, them, We're the Open I products. very, very Together operational seeing throughout to coming for what's at something lot to we there of we're a we're strengthen globe models being opportunities. network of work and a demand and it's RAN. with some real-life continue is portfolio we Open The globe, customer, continuing the as the adoption criteria very significant rate will Symphony, Japan. the RAN to so the our far. more committed introduced In

this space other significant for announcements. So watch

have one year. strengthening the that been focused in we a the late and throughout third hyperscalers the networks, On relationships involves a that -- quarter. the turned hyperscalers, scalable hyperscaler the as in projects of participated of live recently set by the as very network service, in We which provisioned on

cores, partners in engaged the with folks instance, have deeply ecosystem, who have been also launch. very make other market large for in We we

and as this a infrastructure area been in server infrastructure in they very nice world, partners in to our expansion. and have networks folks the XG with the in around who have instrumental both some XG make position we So bring the area core private portfolios specifically, the of

an transfer In addition, the additional again for us. one of has building disordered hyperscalers

the contributed that that's contributed So in and for in internal XQ. doing, revenue are XQ, that's they builds to

We relationship. of expect that acceleration

and systems scale, the their giving seeing acquire to pass-through increase it's it's on contributing balance or a network-as-a-service very us all we're through working constructive sheet their way. equipment or So hyperscalers they private as It's integration are whether partners where in it's the a networks. it bundled massive the market run in

Ben Harwood

great. Thatâ€™s Thanks Eric.

Operator

Northland the of from Tim is question next Capital Savageaux Markets. Our from line

Tim Savageaux

the looking access, assuming really it look wireless be of if part I from some of your Congrats there But of on carrier particular, Xrd bookings, to are private that ask, on and XG and at question you is, that's top like those fixed this as year? then want just called revenue bookings as customers, wanted growth bookings bookings XG, which base, the to think well. out sort might in seems look at how kind major other fine from sorts that's Are that next as is working currently the these in you wireless fixed the And fine year networks growth in you markets? I of reasonable bookings aggregate growth for question enterprise of much could And that that. quarter? be beyond your that is access. in or mean break you as if translating wireless fixed talked and revenue of about to out, what those And you you about at? numbers to them emerging

Eric Stonestrom

take Yes, Glenn, to want that? you do

Glenn Laxdal

Yes.

now. operator think performance, So the on X of strong the up then in QX well the that right the new strength across with talked significant the about. from We fixed we're had we engagement we that we introduction roles I X of booking XX% bookings comes that that is that customers as -- performance Series have. planned. really X smart the cities really all largest that one products bookings private the We launching good bookings I mobile network side order really on markets the from had the just strong access mentioned And on year-to-date directly

So that on sitting we're to backlog over this shippable $XXX pretty distributed. expect right a think I revenue we uniformly now. perspective, from that address then million And

over the quarters. So for we it fall given. the X translate when performance piece, if access example, will -- couple up into this revenue year quarters tunneled to rolls That's fixed access. year revenue next a that fixed from set wells yes, growth well for bookings across at the into next then will next look you of pretty X into And we're the

Tim Savageaux

And question expense me last side. on Okay. is operating the for

from some QX. You further be And mentioned prospects of on magnitude in think of put saw should here perspective. kind I nice for I in a rate some run in wonder if QX. about OpEx reduction could baseline of we you that what declines thinking you terms sort an maybe

David Brant

Yes, Tim, this is David.

have the have of been OpEx majority executed reductions reflected the our So numbers. and into been QX

of focused these on would QX third the it's these level think million our $X in approximately And quarter, reductions. sort into bookings introduced executing that products I Additional cost streamlined also expect and new whilst we've I while reductions. QX. we've down from important delivering organization, QX

$X your think, to point, million. I So about

Tim Savageaux

much. very Thanks Okay.

David Brant

Thanks Tim.

Operator

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

George Notter

This for down is it George.

expectation XG begin Just Or base It in on volume is then on are sounds like mid-XXXX. is cards, there any touching shipments. the cards? you've with those shipping Gogo the shipping then line the with completed the mid-XXXX. issues station the And XG opportunity. And to line in that

Eric Stonestrom

So let's break that down into X parts.

into into QX We'll shipping problem the course steady been Aircards ship through through XG no all. middle XG XXXX. a the QX Aircards, actually the to those XXXX of We've the way actually continue to expect frame. So ramping early into of on And we XXXX the begin half then all shipping respect the the XG year. second frame next the rate in XXXX then -- the time with to through time at in of at entire and and Aircards,

begin XXXX. ship So ship, middle in Aircards to and will continue the of aircraft to XG XG the the

George Notter

And any and That's you customers out slowdown Okay. helpful. from markets? seeing macro certain are any with weakness any to or then geographies call

Glenn Laxdal

the as spoke I had in as space there's of would been the in that's they suffering the reduction economic the driving who quarter see real for about in large remarks, a clearing. third need a But say needing the seeing product losses sadly automation, as monitoring better good across within We focus big-box to job is I the a connectivity. opportunities things with opposite. need stores obviously, enterprise do and actually pullback. are store, from a growth bookings opposite. and a prepared better on are terms major we've on cost and we're increased We because concerned diverse airports board, my There's baggage

slowdown at So of in we're seeing our a segments. not all any

from on significant network Europe And through I out technology they think that private side? was of expect the year. is and we new third we're more continue in businesses of actually in that because as to the then converge automation we quarter just call the the concern, growth much Europe this side, real a how need area another here the rest to bookings uptick here that in had very now, in can in world the

challenge area automation the the enterprise that to commitment an So economic seems there's was where, robust obviously, But across ever. as board. as

George Notter

And Great. there out? an is to should see to conversations of Okay. then seek year you the those kind finance figured evolve as Or you those expect of of waiver sort we creditors and want of date end in of the line time time? say, and something or discussions terms end out this with that's to financing, how when over look to

Eric Stonestrom

was the -- with That with lending. our

David Brant

yes, with quarter wanted. course, you at that sorry, breach discussions the with we're a talking we're subsequent yes, about then the I'm Sorry, now our and covenants Yes, in And to we're in had them. quarter. of the of end sorry, lenders. of we

until those I weeks continue we get So to the conversations this and through resolution. expect coming

Glenn Laxdal

Yes.

with is involved on just the the me at that. debt opposed contractual solution and this covenants here Let or add Fortress covenants, good. We're a liquidity is issues focused that level like relationship mainly to deeply on the very as on

the there's to it with public resolve path We're full very here obviously very, eye. and we're get through So been speed working a optimistic, something out this. in

Operator

you. Thank

D.A. next Our the of line Franco Davidson. from question is Granda with

Franco Granda

back Congrats chain It Hope visual. only supply momentum coming and on are the the you the quarter. is seems all guys like per okay. as the doing challenge were

more through extending at percentage are the the return of you permanent you around your more expect, You for the once chain the little the of talked what versus in OpEx challenges you the quantify And year. guys what savings next have have you model? done a a the middle flexibility line just in good year. second trimming half job what supply quarter about of Can

Eric Stonestrom

of All were permanent. things. the strategic changes where announced we're are workforce and optimization doing These we alignment

anticipate OpEx. uptick with what We we in call OpEx. cash to don't we an tend So this business run

and continue we of So out compensation, And downward. business expect momentum. while that move as that to we encouraged David got the said, the up stock pretty by strips where so so and warrant forth accounting issues we're far, through to keeping

order an much So we're don't the in through specific chain as an here. in book uptick we getting that well better to sales OpEx improved supply see as increase a

Franco Granda

And that one then I this Is color. private the bookings should you next guess, is appreciate entire talked questions, networks? year. that into that the from mentioned year the portfolio? in earlier that I of you the about, case turn reference Or just to in across revenues

Eric Stonestrom

be no, bookings No, or We a announcing that more time execution months. lead XX window that's wouldn't had across. than an

So this, revenue of of is and realization it's book announce pipe. the contracts in frame here. Realization the everything across this don't we

buy Now we're on got $X Glen it's reality new someone and a of you the lead product. that give we'll get of components some explained, just million that's of has example, will August, order And the in the have just and it's a market it, to to in an product X-month as the we time now.

momentum And converting absorption $XXX so this million shippable that's quarter. the backlog and a revenue a and products. the the of substantial million not into all reason and But programs taking product are clients, we're the lag, there's there's with of $XXX

And year. getting feel everything realized pretty in next so in we the confident that

Franco Granda

to these? moment chain at what left think supply at a And you at you -- can through lastly, look do your when or it David, table constraints while the you comes just timing great. moment? are your perspective, your Like being the the from how as on That's quantitative perhaps is Okay. guidance, navigate assumptions much then

David Brant

would they reality the able X and there's XX chain million, I lead if that's -- -- XX isn't. the supply of lines more be chain in supply guidance if constraints, If were time of components. that didn't ship X, things. other and weeks, back in we $XX I certainly also the mean time But of to constraints it the components X is our were of is QX. to ago have $XX One is million $XXX we to think long that to years

And where have impacts we that be so dimensions XX% think XX% the chain sort of us. the to supply worked and will variance that for

chain to feel XX-XX our it where us. we guidance deliver delivers supply the will So

Franco Granda

I your appreciate all comments.

David Brant

you, Thank Franco.

Operator

over further Ladies questions like to for floor and to There Thank comments. no management would Instructions]. the at turn gentlemen closing you. I this [Operator are time. the back

Eric Stonestrom

you. Thank Okay.

outlook we demand. and by product business excited are Our plant encouraging, remains the

unabated network invest Governments We moving wide to are and major even facing committed have are a paths product partners, acceptance of continues economy. headwinds we for diversity. remain gaining confidently closer end wide equipment to a across portfolio technology users infrastructure the to to economic and XQ, domestic XG chain alternative supply the in markets. is critical supply and ensure range breakeven with world willing network that

engaging measures. as Lastly, reduce supply and note, we able our upcoming and We again challenge meetings costs months, your and in the forward extraordinary conferences you logistics & these and our operational have last participating investors one-on-one we look with disease, coming with operating model Street and call. been This to One efficiency Oppenheimer interest support. conferences to improves for be Thank chain in concludes broker including events. New through will Research at Company.

Operator

concludes teleconference. today's This

for participation. your time. disconnect may your at Thank this You lines you

Airspan Networks (MIMOQ) 14 Nov 222022 Q3 Earnings call transcript