Preliminary 2FQ21 Results: Beats on Top and Bottom Lines, But Guidance is Mixed



KEY POINTS
  • Cambium Networks’ recorded revenue of $93 million, beating consensus of $88 million, up 49% YoY. Non-GAAP EPS of $0.45 also beat consensus of $0.33 as non-GAAP gross margin rose 80 bps YoY to 50.0%. The rise was attributed to mix and increased volume.
  • President and CEO Atul Bhatnagar highlighted two milestones during the quarter, the first being the shipment of its 10 millionth radio, and the second was breaking the $90 million revenue barrier. He also indicated that the company was seeing “a healthy increase in demand for both fixed wireless broadband and enterprise Wi-Fi solutions.”
  • Supply chain issues continue, which hit guidance somewhat and is the reason for the sequential decline in revenue, but the company believes it is gaining scale, improving its operations, and is making “excellent” progress on its long-term operating model targets. The CFO highlighted that backlog continues to grow, and while higher component costs are hurting gross margin, the company is raising some prices.
  • Guidance for 3FQ21 for $88-92.0 million in revenue is slightly above consensus of $89.4 million at the mid-point. Non-GAAP EPS guidance is $0.30-0.34, slightly below consensus of $0.335 at the mid‑point.
  • The stock is trading at a forward P/S of 2.7x, below its two-year high P/S of 4.4x in April. On P/E, the stock is trading just above its two-year average, 24.6x vs 22.4x, but significantly below its recent high of 39.7x in April. The stock traded down over 6.5% in the aftermarket after earnings were reported but recovered to down 2.6% during the earnings call.
  • 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 which 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’ recorded revenue of $93 million, beating consensus of $88 million, up 49% YoY. Non-GAAP EPS of $0.45 also beat consensus of $0.33 as non-GAAP gross margin rose 80 bps YoY to 50.0%. The rise was attributed to mix and increased volume.

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