Cambium Networks Corp. Q1 FY2024 earnings call

• Introduced Jacob Sayer as the new CFO, thanking John Veseral for interim CFO work. - FCC approval of 6 gigahertz spectrum was delayed, affecting PMP shipments; final approval for ePMP 4600 6 gigahertz access point products received, with high-power subscriber modules expected in May. - Enterprise revenues improved 231% sequentially with demand recovery and channel inventory decline; launched first Wi-Fi 7 product in April. - Customer wins include New Orleans Convention Center, Glencore in Australia, and Safaricom in Kenya. - Total devices under cnMaestro Cloud Management increased ~4% QoQ and 15% YoY.

Revenues for Q1 '24 were $43.2 million. The Point-to-Point (PTP) business decreased 34% sequentially due to delays in defense orders. The Point-to-Multi-Point (PMP) business in North America decreased 14% because of the delayed FCC approval of 6 gigahertz products. Enterprise revenues improved 231% sequentially. PMP business in Europe had some recovery. By region, Europe increased 146% sequentially, while North America, CALA, and Asia decreased. In terms of revenue contribution, enterprise revenues saw a significant sequential improvement, while PTP and PMP had declines due to various timing issues.

• Q2 '24 revenue guidance: $43 million to $48 million (2% to 13% sequential growth). Non-GAAP gross margins: 40% to 42%. Non-GAAP operating expenses (including G&A): $24.6 million to $25.6 million, leading to non-GAAP operating loss: $5.4 million to $7.4 million. Net loss: $5.4 million to $6.9 million or net loss per diluted share: $0.19 to $0.24. Adjusted EBITDA: negative $4.2 million to negative $6.2 million. - Full year 2024 revenue guidance: $205 million to $225 million. Non-GAAP gross margins: ~40%. Non-GAAP net loss: $11.6 million to $18 million or loss per diluted share: $0.41 to $0.64. Adjusted EBITDA margin: negative 2.2% to negative 6.8%. Capital expenditures: $9 million to $11 million.

• Delays in FCC approval of 6 gigahertz products impacting PMP shipments. - Uncertainties in defense order timings affecting PTP business. - Inventory management challenges, including need to clear channel inventories and potential impact on revenues. - Market competition and potential impact on gross margins and revenue.

Q: Scott Searle inquired about wireless and point-to-multipoint participation in the BEAD program and 6 gigahertz.

A: 6 gigahertz is applicable, but BEAD has restrictions requiring license spectrum in 3.5 gigahertz range; uplift expected but not immediate.

Q: Victor Chiu asked about 6 gigahertz shortfall rolling into Q2.

A: 6 gigahertz ramp is not just rolling into Q2, but will take 3 to 6 months as customers learn mass scale deployments.

Q: George Notter asked about gross margin structure long term.

A: Long-term gross margin expected to be around 40%, with goal of north of 45% as scale is achieved, though affected by current inventory and competition.