Record Revenue as Fixed Wireless Moves Toward Mainstream



KEY POINTS
  • Cambium Networks (CMBM) is widely viewed as being well positioned for mid-market wireless and 5G growth. The company sees its strengths being its RF algorithms and software. Some investors view Cambium as a mini-Ubiquiti (UI) as they have some overlap, but Cambium currently serves enterprise and service providers more than retail, which is Ubiquiti’s market.
  • The company sees its new 60 GHz cnWave fixed wireless broadband product as a breakthrough. This is partially driven by Cambium’s assessment that its new product offers multi-gigabit performance at a fraction of the cost of fiber.
  • Facebook Terragraph could be a significant revenue driver for Cambium in 2021. Tracking Cambium’s Terragraph wins will show the potential for Cambium to exploit urban wireless growth. This will be particularly key considering 5G rollouts across the globe.
  • The company reported 3Q20 record revenues of $73 million, up 11% YOY, with non-GAAP gross margin of 50%, and record non-GAAP net income of $7.8 million. Consensus expectations for 4Q20 are for non-GAAP EPS of $0.27 versus $0.05 in 4Q19, and revenues of $77 million versus $64 million a year ago.
  • Communications continues to grow, global internet penetration has grown from 25% in 2010 to 62% in 2020 and is projected to grow to 90% by 2030. However, consensus projections are for 1% growth in industry revenues over the next three years, down from a +5% CAGR over the last decade.
  • We initiated coverage of the comm equipment sector last quarter, launching on Cisco Systems, Extreme Networks, and Infinera. Also, see our 60 GHz fixed wireless industry report 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 (CMBM) is widely viewed as being well positioned for mid-market wireless and 5G growth. The company sees its strengths being its RF algorithms and software. Some investors view Cambium as a mini-Ubiquiti (UI) as they have some overlap, but Cambium currently serves enterprise and service providers more than retail, which is Ubiquiti’s market.

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