Preliminary 1FQ21 Results: 46% YoY Revenue Growth Drives Beat and Raise



KEY POINTS
  • Cambium Networks’ record revenue seems to confirm its view that “wireless is the new fiber.” Wireless, be it Wi-Fi or other fixed wireless, is becoming cost competitive with fiber, without the need to lay cable in the ground. As we outlined in our Wi-Fi and 60GHz industry reports, fixed wireless is moving into new markets.
  • With revenue of $89 million in F1Q21, Cambium beat consensus revenue expectations of $83 million by $6 million. It also beat consensus non-GAAP EPS expectations of $0.33 by $0.08, coming in at $0.41 per share.
  • The company is working through supply chain issues, which delayed some shipments in the quarter. The company continues to expect Wi-Fi to grow 40-60% YoY in 2021. The company was supply constrained in 1FQ21, but hospitality is coming back, particularly in Europe.
  • Mid-year product introductions, particularly outdoor Wi-Fi 6, are expected to help drive growth. Additionally, the company expects 28GHz 5G for fixed wireless to be in significant proof-of-concept tests in three months most likely in EMEA.
  • Guidance for 2FQ21for $85.0-90.0 million in revenue is above consensus of $83 million, non-GAAP EPS guidance is $0.29-0.35, above consensus of $0.305 at the mid‑point. The company raised full-year guidance to 24‑29% YoY revenue growth for the full fiscal year 2021 versus consensus of 20% YoY growth. The company believes it is close to achieving its long-term financial model.
  • The stock is trading at a forward P/S of 3.98x, slightly below its two-year high P/S of 4.61x in April. On P/E the stock is trading more than double its two-year average, 44.8x versus 20.6x.
  • Read our initiation and other reports on Cambium Networks on our website.
COMPANY OVERVIEW

Cambium Networks provides wireless broadband networking infrastructure solutions for network operators, including medium-sized wireless Internet service providers, enterprises, and government agencies. The company's scalable, reliable, and high-performance solutions create a purpose-built wireless fabric that connects people, places, and things across distances ranging from two meters to more than 100 kilometers, indoors and outdoors, using licensed and unlicensed spectrum, at attractive economics. Headquartered outside Chicago and with R&D centers in the US, UK, and India, the company sells through a range of distributors overseas.

Cambium Networks’ record revenue seems to confirm its view that “wireless is the new fiber.” Wireless, be it Wi-Fi or other fixed wireless, is becoming cost competitive with fiber, without the need to lay cable in the ground. As we outlined in our Wi-Fi and 60GHz industry reports, fixed wireless is moving into new markets.

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