Cambium Networks Corp. Q1 FY2023 earnings call

• Revenues for Q1 2023 were $77.4 million, growing 25% year-over-year, driven by Enterprise. • Gross margin was 52.1%, exceeding the outlook. • Key product developments include 6 GHz ePMP 4600, PMP 450v, and Cambium Fiber. • Notable customer wins in various regions, like Nextlink in North America and Pentanet in APAC. • Channel expanded by adding approximately 500 net new channel partners sequentially in Q1 2023.

In the first quarter of 2023, revenues grew 25% year-over-year. The Enterprise business, the largest product line, grew 130% year-over-year. PTP revenues decreased 15% sequentially but improved 22% year-over-year. PMP revenues decreased 25% sequentially and 28% year-over-year. Enterprise revenues were $77.4 million, contributing significantly. PTP had specific revenue figures, and PMP was affected by service providers moving to new gigabit technologies. Revenue contribution: Enterprise saw strong growth, PTP had mixed performance, and PMP was in transition.

• Q2 2023 outlook: Revenues between $72 to $80 million, non-GAAP gross margin 50.3% - 51.8%, non-GAAP operating expenses $30.3 million - $31.3 million, non-GAAP net income $4.2 million - $7.6 million. • Full year 2023 outlook: Revenues between $327 million to $337 million, non-GAAP gross margin ~50.9%, non-GAAP net income $33.7 million - $36 million.

• Macroeconomic uncertainties impacting customer spending and deal sizes. • Supply chain constraints and component availability issues. • Competition in the wireless and fiber markets affecting market share.

Q: Simon Leopold asked about the timing of revenue from fiber products and government funded programs.

A: Atul Bhatnagar said early deployments in Q2 with beta testing, and FCC approval expected in summer with RDOF funding increasing in second half.

Q: Scott Searle asked about PMP revenue recovery and FCC approval timeline.

A: Atul Bhatnagar said 6 GHz, PMP450V, and fiber will contribute, with FCC approval expected in August/September. Andrew Bronstein added on PMP revenue decline in Q2 but expected growth in second half.

Q: Samik Chatterjee asked about macro conservatism in Q2 guide and channel inventory.

A: Andrew Bronstein said macro backdrop causing slowdown outside US, channel inventory adjusted, and defense deal timing not fully controllable.

Q: Unidentified Analyst asked about channel inventory and lead times.

A: Atul Bhatnagar said PMP channel inventory came down, lead times back near pre-COVID but some components still longer. On fiber, targeting mid-tier market.

Q: Erik Suppiger asked about PMP decline in Q2 and inventory management.

A: Atul Bhatnagar said PMP decline in Q2, inventory to increase then level, fiber targeting mid-tier market.

Q: Paul Essi asked about global impact and software impact on gross margin.

A: Atul Bhatnagar and Andrew Bronstein discussed global revenue impact from dollar strength and price increase, software contributing ~5-6% to revenue with potential 1% gross margin uplift over next year.