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VP Jon Cartu Reports – Edited Transcript of CMBM.OQ earnings conference call or…

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VP Jon Cartu Reports – Edited Transcript of CMBM.OQ earnings conference call or…

Nov 8, 2019 (Thomson StreetEvents) — Edited Transcript of Cambium Networks Corp earnings conference call or presentation Thursday, November 7, 2019 at 9:30:00pm GMT

Oppenheimer & Co. Inc., Research Division – Associate

JP Morgan Chase & Co, Research Division – Senior Analyst, Alternative Energy & Applied and Emerging Technologies

Good afternoon. My name is Bridgette, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Cambium Networks’ Third Quarter 2019 Financial Results Conference Call. (Operator Instructions)

Mr. Peter Schuman, Senior Director of Investor Relations, you may begin your conference.

Thank you, Bridgette. Welcome, and thank you for joining us today for Cambium Networks’ Third Quarter 2019 Financial Results Conference Call, and welcome to all those joining by webcast. Atul Bhatnagar, our President and CEO; and Stephen Cumming, our CFO; are here for today’s call.

The earnings release referenced on this call is accessible on the investor page of our website and has been submitted on a current report on Form 8-K with the SEC. A copy of today’s prepared remarks will also be available on our Investor Relations page at the conclusion of this call.

As a reminder, today’s remarks, including those made during Q&A, will contain forward-looking statements about the company’s outlook and expected performance. These statements are based on current expectations, forecasts and assumptions. Risks and uncertainties could cause actual results to differ materially.

Except as required by law, Cambium Networks does not undertake any obligation to update or revise any forward-looking statements for any reason after the date of this presentation, whether as a result of new information, future developments to conform these statements to actual results or make changes in Cambium’s expectations or otherwise. It is Cambium Networks’ policy not to reiterate our financial outlook. I encourage listeners to review the full list of risk factors included in the safe harbor statement in today’s financial results press release.

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

Now on to the agenda. Cambium Networks’ President and CEO, Atul Bhatnagar, will provide the key investment highlights for the quarter, and Stephen Cumming, Cambium Networks’ CFO, will provide a recap of financial results for the third quarter of 2009 — ’19, which we will reference as Q3 ’19 and reference past quarters as Q2 ’19 for the second quarter of 2019 and Q3 ’18 for the third quarter of 2018. We we will also provide our financial outlook for the fourth quarter of 2019, which we will reference as Q4 ’19 and fiscal year 2019 and fiscal year ’20, which we will reference as FY ’19 and FY ’20. Our prepared remarks will be followed by a Q&A session.

I’d now like to turn the call over to Atul.


Atul Bhatnagar, Cambium Networks Corporation – President, CEO & Director [3]


Thank you, Peter. Looking at the results of our third quarter 2019, we achieved revenues of $65.7 million, which increased 11% year-over-year and decreased 5% from Q2 ’19. This was our 22nd consecutive quarter of year-over-year growth. This growth was driven by our point-to-multipoint, PMP, products with revenues increasing 18% and our Wi-Fi products, which grew an outstanding 132% year-over-year.

As mentioned in our earnings release, we had lower-than-anticipated government spending for point-to-point products during Q3 ’19 with PTP down 22% year-over-year.

On a sequential basis, we continued to deliver record revenues in our enterprise Wi-Fi solutions, which grew by a solid 20% from Q2 ’19 and now represents over 15% of total company revenues. PTP revenues decreased 10% sequentially in Q3 ’19, primarily the result of a slowdown in the U.S. Federal business due to delays in specific government programs, and PMP revenues were lower by 7% sequentially after 2 stronger quarters in North America.

Taking a look at some notable customer wins and new product development. During Q3 ’19, I’m pleased to report Cambium Networks continued to have several high-profile customer wins. In North America, we continue to believe the Connect America Funds, or CAF funds, phase 2 will be a key driver for our growth in 2020. $1.5 billion in funds will be disbursed over the next 10 years. We won a CAF II funded deal for point-to-multipoint access and licensed backhaul solutions from a Midwestern wireless communications company, serving both residential and business customers.

In North America, in service provider space, a Tier 1 service provider executed a supply agreement for small cell point-to-point transport, using our PTP 670.

Cambium Networks PTP 670 provides carrier-grade reliability, operates in near and nonline-of-sight deployments and support of both IEEE 1588v2 and Synchronous Ethernet required by mobile service providers to support network timing. We see this win as a proof point that fixed wireless broadband is relevant for major service providers.

In Europe, Middle East and Africa region, EMEA, we had a significant number of wins, including service providers, hotel chains, educational institutions, a sizable agricultural and many oil and gas customers and government agencies. A major service provider in EMEA, with operating companies in multiple Middle Eastern and African countries, has executed a master supply agreement with Cambium Networks to provide fixed wireless broadband solutions to serve their enterprise broadband access market. Three of the service providers’ operating companies have already placed initial orders on Cambium Networks to support the deployment of fixed access networks.

In our enterprise business in EMEA, Cambium Networks has active engagements with over 800 municipalities across Europe, following our successful WiFi4EU engagement activities. Many of those municipalities have already…


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