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Cambium Networks Reports Fourth Quarter and Full Year 2023 Financial Results

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Revenues of $40.2 million, decreased 7% sequentially, and decreased 52% year-over-yearGross margin of (21.7)%, non-GAAP(1) gross margin of (19.4)%Operating loss of $39.3 million, non-GAAP(1) operating loss of $34.1 millionNet loss of $39.0 million or a loss of $1.41 per diluted share, non-GAAP(1) net loss of $26.4 million or a loss of $0.95 per diluted shareAdjusted EBITDA(1) loss of $32.9 million or (81.8)% of revenues

ROLLING MEADOWS, Ill., Feb. 15, 2024 /PRNewswire/ — Cambium Networks Corporation (“Cambium Networks”) (NASDAQ: CMBM), a leading provider of wireless networking infrastructure solutions, today announced financial results for the fourth quarter and full year ended December 31, 2023.

GAAP

Non-GAAP (1)

(in millions, except percentages)

Q4 2023

Q3 2023

Q4 2022

Q4 2023

Q3 2023

Q4 2022

Revenues

$             40.2

$          43.0

$             84.5

$          40.2

$          43.0

$          84.5

Gross margin

(21.7) %

25.5 %

49.0 %

(19.4) %

27.7 %

49.6 %

Operating margin

(97.8) %

(51.3) %

11.2 %

(84.9) %

(36.1) %

15.6 %

Net (loss) income

$           (39.0)

$         (26.2)

$             10.0

$         (26.4)

$         (12.1)

$          10.3

Adjusted EBITDA margin

(81.8) %

(33.5) %

16.9 %

 

GAAP

Non-GAAP (1)

(in millions, except percentages)

2023

2022

2023

2022

Revenues

$        220.2

$        296.9

$        220.2

$        296.9

Gross margin

32.3 %

48.9 %

33.8 %

49.5 %

Operating margin

(26.6) %

6.7 %

(17.5) %

11.6 %

Net (loss) income

$         (63.6)

$          20.2

$         (30.7)

$          26.9

Adjusted EBITDA margin

(15.5) %

13.1 %

1 Refer to Supplemental Financial Information accompanying this press release for a reconciliation of GAAP to non-GAAP numbers and for reconciliation of adjusted EBITDA for the for the fourth quarter and full year 2023 ended December 31, 2023. 

“Our revenue shortfall was due in part to an $11 million reduction to revenues mostly as the result of incentives and discounts provided to distributors related to our Enterprise business during the fourth quarter 2023. As expected, we delivered a solid quarter of government defense shipments in our Point-to-Point business, received meaningful orders for our new 6 GHz products in the Point-to-Multi-Point business ahead of the Federal Communications Commission’s (FCC’s) approval, and continued to make significant reductions in channel inventories for the Enterprise business,” said Morgan Kurk, president and CEO.

Kurk continued, “The approval of 6 GHz spectrum by the FCC will accelerate the growth of the Point-to-Multi-Point business during 2024. We believe we are well positioned to deliver future growth and are taking the necessary steps to rationalize business operations and improve operating efficiencies to benefit our operating results during calendar 2024.”

Revenues of $40.2 million for the fourth quarter 2023 decreased $44.3 million year-over-year primarily as a result of lower revenues due in part by an $11.0 million reduction to revenues mostly as the result of incentives provided to distributors offering aggressive Enterprise product discounts to clear excess channel inventories, high stock rotations, slowing economies, and lower Point-to-Multi-Point revenues with the weakness primarily from regions outside of North America, partially offset by higher Point-to-Point revenues due to increased defense revenues. Revenues for the fourth quarter 2023 decreased by $2.8 million compared to $43.0 million for the third quarter 2023, primarily due to lower Enterprise revenues due to the previously mentioned Enterprise rebates, stock rotations, as well as economic headwinds, while Point-to-Multi-Point revenues decreased primarily due to weakness in EMEA partially offset by strength in North America from customers purchasing 6 GHz products under experimental licenses ahead of the FCC’s approval of 6 GHz spectrum, and strength in the Point-to-Point business due to higher defense revenues.  

GAAP gross margin for the fourth quarter 2023 was (21.7)%, compared to 49.0% for the fourth quarter 2022, and 25.5% for the third quarter 2023. GAAP operating loss for the fourth quarter 2023 was $39.3 million, compared to operating income of $9.5 million for the fourth quarter 2022, and operating loss of $22.1 million for the third quarter 2023. GAAP net loss for the fourth quarter 2023 was $39.0 million, or net loss of $1.41 per diluted share, compared to net income of $10.0 million, or net earnings of $0.35 per diluted share for the fourth quarter 2022, and net loss of $26.2 million, or net loss of $0.95 per diluted share for the third quarter 2023.

Non-GAAP gross margin for the fourth quarter 2023 was (19.4)% and included the $11 million reduction in revenues as the result of price incentives provided to distributors, and inventory reserves of approximately $18.9 million mostly for Enterprise products, and compared to 49.6% for the fourth quarter 2022, and 27.7% for third quarter 2023. Non-GAAP operating loss for the fourth quarter 2023 was $34.1 million, compared to non-GAAP operating income of $13.2 million for the fourth quarter 2022, and a non-GAAP operating loss of $15.5 million for the third quarter 2023. Non-GAAP net loss for the fourth quarter 2023 was $26.4 million, or a net loss of $0.95 per diluted share, compared to net income of $10.3 million, or net earnings of $0.36 per diluted share for the fourth quarter 2022, and net loss of $12.1 million, or a net loss of $0.44 per diluted share for the third quarter 2023. For the fourth quarter 2023, adjusted EBITDA was a loss of $32.9 million or (81.8)% of revenues, compared to adjusted EBITDA of $14.3 million or 16.9% of revenues for the fourth quarter 2022, and adjusted EBITDA loss of $14.4 million or (33.5)% of revenues for the third quarter 2023.

For full year 2023, revenues of $220.2 million decreased by $76.7 million compared to full year 2022. GAAP gross margin was 32.3% for full year 2023 compared to 48.9% for 2022. Non-GAAP gross margin was 33.8% of revenues for full year 2023, compared to 49.5% of revenues for 2022. GAAP operating loss of $58.6 million for full year 2023 compared to GAAP operating income of $19.9 million for 2022. Non-GAAP operating loss was $38.6 million or (17.5)% of revenues for full year 2023, compared to non-GAAP operating income of $34.3 million or 11.6% of revenues during 2022. GAAP net loss for full year 2023 was $63.6 million, or a net loss of $2.31 per diluted share, compared to GAAP net income of $20.2 million, or net earnings of $0.72 per diluted share for 2022. For full year 2023, non-GAAP net loss was $30.7 million or a net loss of $1.10 per diluted share, compared to non-GAAP net income $26.9 million or net earnings of $0.94 per diluted share for 2022. Adjusted EBITDA for full year 2023 was a loss of $34.2 million or (15.5)% of revenues, compared to adjusted EBITDA of $38.8 million or 13.1% of revenues for 2022.

Net cash used in operating activities was $6.2 million for the fourth quarter 2023, compared to net cash provided by operating activities of $4.0 million for the fourth quarter 2022, and net cash used in operating activities of $0.2 million for the third quarter 2023. Cash totaled $18.7 million as of December 31, 2023, $29.5 million lower than December 31, 2022.  

Fourth Quarter 2023 Highlights

Revenues of $40.2 million, decreased 7% sequentially, and were lower by 52% year-over-year.GAAP net loss of $39.0 million or a net loss of $1.41 per diluted share, non-GAAP net loss of $26.4 million or a net loss of $0.95 per diluted share, compared to GAAP net income of $10.0 million, or net earnings of $0.35 per diluted share for the fourth quarter 2022, and non-GAAP net income of $10.3 million or net earnings of $0.36 per diluted share for the fourth quarter 2022.Adjusted EBITDA was a loss of $32.9 million or (81.8)% of revenues, compared to adjusted EBITDA of $14.3 million or 16.9% of revenues for the fourth quarter 2022.Net cash used in operating activities was $6.2 million, compared to net cash provided by operating activities of $4.0 million for the fourth quarter 2022.Surpassed 20 million radios shipped since becoming a standalone company.Increased net new channel partners by over 1,500 year-over-year, an increase of 12%.Devices under cnMaestro™ cloud management increased 14% year-over-year.

Full Year 2023 Highlights

Revenues of $220.2 million decreased 26% compared to 2022.Enterprise revenues of $39.1 million decreased 64% compared to 2022.Point-to-Multi-Point revenues of $95.2 million decreased 17% compared to 2022.Point-to-Point revenues of $80.8 million increased 20% compared to 2022.GAAP net loss of $63.6 million or a net loss of $2.31 per diluted share, non-GAAP net loss of $30.7 million or a net loss of $1.10 per diluted share.Adjusted EBITDA loss of $34.2 million or (15.5)% of revenues, compared to adjusted EBITDA of $38.8 million or 13.1% of revenues for 2022.

Cambium Networks’ financial outlook does not include the potential impact of any possible future financial transactions, acquisitions, pending legal matters, or other transactions.  Accordingly, Cambium Networks only includes such items in the company’s financial outlook to the extent they are reasonably foreseeable; however, actual results may differ materially from the outlook.

First Quarter 2024 Financial Outlook

Taking into account our current visibility, the financial outlook as of February 15, 2024, for the first quarter ending March 31, 2024, is expected to be as follows:

Revenues between $43.0$48.0 millionGAAP gross margin between 39.3%-42.3%; and non-GAAP gross margin between 41.0%-44.0%GAAP operating expenses between $28.5$29.5 million; and non-GAAP operating expenses between $25.4$26.4 millionGAAP operating loss between $9.2$11.6 million; and non-GAAP operating loss between $5.3$7.8 millionInterest expense, net of approximately $0.8 millionGAAP net loss between $8.6$11.0 million or a net loss between $0.31 and $0.39 per diluted share; and non-GAAP net loss between $6.1$8.6 million or a net loss between $0.22 and $0.31 per diluted shareAdjusted EBITDA loss between $4.1$6.6 million; and adjusted EBITDA margin between (8.6)%-(15.4)%GAAP effective tax rate of approximately 12.0%-15.0%; and non-GAAP effective tax rate which is not meaningfulApproximately 28.0 million weighted average diluted shares outstanding

Cash requirements are expected to be as follows:

Paydown of debt: $0.7 millionCash interest expense: approximately $0.6 millionCapital expenditures: $2.0$3.0 million

Full Year 2024 Financial Outlook

Revenues between $215.0$245.0 million, a decrease of between 2% to an increase of approximately 11%GAAP gross margin approximately 43.0%; and non-GAAP gross margin approximately 44.0%GAAP net loss between $13.3$27.3 million or a net loss between $0.47 and $0.98 per diluted share; and non-GAAP net (loss) income between $(13.6)$2.3 million or between a net loss of $0.48 and net earnings of $0.08 per diluted shareAdjusted EBITDA margin between (2.7)%-4.1%

Conference Call and Webcast
Cambium Networks will host a live webcast and conference call to discuss its financial results at 4:30 p.m. ET today, February 15, 2024. To join the financial results live webcast and view additional materials which will be posted to the investor website, listeners should access the investor page of Cambium Networks website https://investors.cambiumnetworks.com/.  Following the live webcast, a replay will be available in the event archives at the same web address for a period of one year.

To access the live conference call by phone, listeners should register in advance at  https://register.vevent.com/register/BI0916ee75cac74a599dd6f1ea618e78a4. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode.

In addition, Cambium Networks president & CEO, Morgan Kurk will present and hold one-on-one meetings with investors on Tuesday, March 5, 2024, at the JMP Securities Technology Conference in San Francisco; and on Tuesday, March 19, 2024, in person at the ROTH Capital Partner Annual Conference in Dana Point, California. To join the live webcasts for the JMP Securities and ROTH Capital conferences, listeners should access the investor page of Cambium Networks website https://investors.cambiumnetworks.com/.  Following the live webcasts, a replay will be available in the event archives at the same web address.

About Cambium Networks
Cambium Networks enables service providers, enterprises, industrial organizations, and governments to deliver exceptional digital experiences and device connectivity with compelling economics. Our ONE Network platform simplifies management of Cambium Networks’ wired and wireless broadband and network edge technologies. Our customers can focus more resources on managing their business rather than the network. We deliver connectivity that just works.

Cautionary Note Regarding Forward-Looking Statements

This release contains certain forward-looking statements within the meaning of the federal securities laws, including statements concerning our expected next quarter revenues, net income and cash. All statements other than statements of historical fact contained in this document, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

The forward-looking statements in this document are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this document and are subject to a number of risks, uncertainties and assumptions including those described in the “Risk factors” section of our 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2023, and Form 10-Qs filed on May 9, 2023, August 2, 2023, and November 3, 2023. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include: the unpredictability of our operating results; our inability to predict and respond to emerging technological trends and network operators’ changing needs; the impact of political tensions between the United States and other countries such as the war between Russia and Ukraine,  tensions with China and the evolving events in Israel and Gaza; the strength of the dollar and the impact on the cost of our products globally; current or future unfavorable economic conditions, both domestically and in our foreign markets, including the risk of a global or localized recession; our inability to predict and respond to emerging technological trends and network operators’ changing needs; the impact of competitive pressures on the development of our new products; the impact of actual or threatened health epidemics and other outbreaks; our limited or sole source suppliers’ inability to acquire or produce third-party components to build our products and the impact of supply shortages, extended lead times or changes in supply or cost of components needed to manufacture our products; our ability to effectively forecast demand or manage our inventory, including our channel inventory, which may cause us to record write-downs for excess or obsolete inventory; our reliance on third-party manufacturers, which subjects us to risks of product delivery delays and reduced control over product costs and quality; our reliance on distributors and value-added resellers for the substantial majority of our sales; the inability of our third-party logistics and warehousing providers to deliver products to our channel partners and network operators in a timely manner; or our distributors’ and channel partners’ inability to attract new network operators or sell additional products to network operators that currently use our products; the technological complexity of our products, which may contain undetected hardware defects or software bugs or subject our products to the risks of ransomware or malware or other cyber-attack; our channel partners’ inability to effectively manage inventory of our products, timely resell our products or estimate expected future demand; and current or future unfavorable economic conditions, both domestically and in foreign markets.  

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

CAMBIUM NETWORKS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

Three months ended

Year ended

December 31, 2023

September 30, 2023

December 31, 2022

December 31, 2023

December 31, 2022

Revenues

$                   40,206

$                   43,046

$                   84,507

$                 220,195

$                 296,899

Cost of revenues

48,934

32,087

43,138

149,062

151,759

Gross profit

(8,728)

10,959

41,369

71,133

145,140

Gross margin

-21.7 %

25.5 %

49.0 %

32.3 %

48.9 %

Operating expenses

Research and development

13,057

13,151

12,874

53,478

49,865

Sales and marketing

9,726

9,675

12,148

42,599

44,452

General and administrative

6,207

8,688

5,422

27,398

24,982

Depreciation and amortization

1,596

1,545

1,475

6,210

5,961

Total operating expenses

30,586

33,059

31,919

129,685

125,260

Operating (loss) income

(39,314)

(22,100)

9,450

(58,552)

19,880

Operating margin

(97.8) %

(51.3) %

11.2 %

(26.6) %

6.7 %

Interest expense, net

725

620

559

2,521

1,977

Other (income) expense, net

(10)

63

15

271

(114)

(Loss) income before income taxes

(40,029)

(22,783)

8,876

(61,344)

18,017

(Benefit) provision for income taxes

(1,021)

3,417

(1,135)

2,230

(2,183)

Net (loss) income

$                 (39,008)

$                  (26,200)

$                   10,011

$                  (63,574)

$                   20,200

(Loss) earnings per share

Basic 

$                     (1.41)

$                     (0.95)

$                      0.37

$                     (2.31)

$                       0.75

Diluted

$                     (1.41)

$                     (0.95)

$                      0.35

$                     (2.31)

$                       0.72

Weighted-average number of shares outstanding to compute
(loss) earnings per share

Basic

27,680,080

27,619,281

27,109,926

27,519,476

26,919,550

Diluted

27,680,080

27,619,281

28,273,786

27,519,476

28,025,278

Share-based compensation included in costs and expenses:

Cost of revenues

$                         47

$                         45

$                         56

$                        207

$                        219

Research and development

1,005

1,037

1,258

4,699

4,532

Sales and marketing

547

597

702

2,572

2,603

General and administrative

1,212

1,166

879

4,115

3,326

Total share-based compensation expense

$                    2,811

$                     2,845

$                    2,895

$                   11,593

$                   10,680

   

CAMBIUM NETWORKS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

(Unaudited)

December 31, 2023

December 31, 2022

ASSETS

Current assets

Cash

$                   18,710

$                   48,162

Accounts receivable, net of allowance of $283 and $577

64,103

89,321

Inventories, net

66,878

57,068

Recoverable income taxes

222

117

Prepaid expenses

6,589

11,857

Other current assets

6,069

6,464

Total current assets

162,571

212,989

Noncurrent assets

Property and equipment, net 

12,879

11,271

Software, net

11,985

8,439

Operating lease assets

7,894

4,011

Intangible assets, net

7,675

9,173

Goodwill

9,842

9,842

Deferred tax assets, net

15,238

12,782

Other noncurrent assets

1,335

955

TOTAL ASSETS

$                 229,419

$                 269,462

LIABILITIES AND EQUITY 

Current liabilities

Accounts payable 

$                   19,120

$                   31,284

Accrued liabilities 

44,767

28,042

Employee compensation

5,071

7,394

Current portion of long-term external debt, net

3,186

3,158

Deferred revenues

8,765

8,913

Other current liabilities

13,117

8,429

Total current liabilities

94,026

87,220

Noncurrent liabilities

Long-term external debt, net

21,926

24,463

Deferred revenues

10,473

8,617

Noncurrent operating lease liabilities

6,595

2,170

Other noncurrent liabilities

1,619

1,619

Total liabilities

134,639

124,089

Shareholders’ equity 

Share capital; $0.0001 par value; 500,000,000 shares authorized at December 31, 2023 and December 31, 2022;
27,834,908 outstanding at December 31, 2023 and 27,313,273 outstanding at December 31, 2022

3

3

Additional paid in capital

152,768

138,997

Treasury shares, at cost, 260,236 shares at December 31, 2023 and 209,461 shares at December 31, 2022

(5,624)

(4,922)

Accumulated (deficit) earnings 

(50,752)

12,822

Accumulated other comprehensive loss

(1,615)

(1,527)

Total shareholders’ equity 

94,780

145,373

TOTAL LIABILITIES AND EQUITY

$                 229,419

$                 269,462

 

CAMBIUM NETWORKS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

December 31, 2023

September 30, 2023

December 31, 2022

Cash flows from operating activities:

Net (loss) income

$                (39,008)

$                (26,200)

$                  10,011

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Depreciation and amortization of software and intangible assets

2,414

2,294

1,972

Amortization of debt issuance costs 

99

81

75

Share-based compensation

2,811

2,845

2,895

Deferred income taxes

(2,744)

3,612

(3,202)

Provision for inventory excess and obsolescence

10,958

4,577

2,024

Other

(431)

155

(31)

Change in assets and liabilities:

Receivables

9,399

22,457

(3,470)

Inventories

1,928

(1,993)

(8,451)

Prepaid expenses

2,224

(772)

(3,768)

Accounts payable

(7,141)

(5,156)

3,114

Accrued employee compensation

(145)

(527)

1,293

Other assets and liabilities

13,410

(1,619)

1,564

Net cash (used in) provided by operating activities

(6,226)

(246)

4,026

Cash flows from investing activities:

Purchase of property and equipment

(1,228)

(1,125)

(1,332)

Purchase of software

(1,118)

(2,185)

(1,230)

Net cash used in investing activities

(2,346)

(3,310)

(2,562)

Cash flows from financing activities:

Repayment of term loan

(656)

(656)

(657)

Payment of debt issuance costs

(122)

Issuance of ordinary shares under ESPP

578

839

Taxes paid related to net share settlement of equity awards

(48)

(219)

(226)

Proceeds from share option exercises

6

1,872

Net cash (used in) provided by financing activities

(248)

(869)

1,828

Effect of exchange rate on cash

1

(24)

11

Net (decrease) increase in cash

(8,819)

(4,449)

3,303

Cash, beginning of period

27,529

31,978

44,859

Cash, end of period

$                  18,710

$                  27,529

$                  48,162

Supplemental disclosure of cash flow information:

Income taxes paid

$                       964

$                    1,120

$                       438

Interest paid

$                       486

$                       474

$                       310

     

CAMBIUM NETWORKS CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands)

(Unaudited)

REVENUES BY PRODUCT CATEGORY

Three Months Ended

Year Ended

December 31, 2023

September 30, 2023

December 31, 2022

December 31, 2023

December 31, 2022

Point-to-Multi-Point

$                  22,575

$                  23,596

$                  29,656

$                  95,197

$                114,941

Point-to-Point

21,874

15,809

21,276

80,765

67,083

Enterprise

(5,478)

2,499

31,992

39,097

109,844

Other

1,235

1,142

1,583

5,136

5,031

Total Revenues

$                  40,206

$                  43,046

$                  84,507

$                220,195

$                296,899

REVENUES BY REGION

Three Months Ended

Year Ended

December 31, 2023

September 30, 2023

December 31, 2022

December 31, 2023

December 31, 2022

North America

$                  27,056

$                  17,768

$                  44,350

$                131,943

$                133,897

Europe, Middle East and Africa

3,418

14,274

20,007

44,169

90,883

Caribbean and Latin America

5,303

5,726

9,244

20,729

31,223

Asia Pacific

4,429

5,278

10,906

23,354

40,896

Total Revenues

$                  40,206

$                  43,046

$                  84,507

$                220,195

$                296,899

 

Use of non-GAAP (Adjusted) Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide additional financial metrics that are not prepared in accordance with GAAP (non-GAAP), including Adjusted EBITDA, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP operating margin, non-GAAP pre-tax income, non-GAAP provision for income taxes, non-GAAP net income, and non-GAAP fully weighted basic and diluted shares. Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation and to evaluate our financial performance. We believe that these non-GAAP financial measures help us to identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of the non-GAAP financial measures.

We believe that these financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. Although the calculation of non-GAAP financial measures may vary from company to company, our detailed presentation may facilitate analysis and comparison of our operating results by management and investors with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results in their public disclosures. These non-GAAP financial measures are discussed below.

Adjusted EBITDA is defined as net (loss) income as reported in our consolidated statements of operations excluding the impact of (i) interest expense (income), net; (ii) income tax provision (benefit); (iii) depreciation and amortization expense; (iv) nonrecurring expenses, (v) share-based compensation expense, and (vi) restructuring expenses. EBITDA is widely used by securities analysts, investors and other interested parties to evaluate the profitability of companies. EBITDA eliminates potential differences in performance caused by variations in capital structures (affecting net finance costs), tax positions (such as the availability of net operating losses against which to relieve taxable profits), the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We adjust EBITDA to also exclude nonrecurring expenses since this is one-time in nature and does not reflect our ongoing operations. We adjust EBITDA for share-based compensation expense which is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Cambium Networks’ control. As a result, management excludes this item from Cambium Networks’ internal operating forecasts and models. We also adjust EBITDA to exclude nonrecurring expenses and restructuring expenses as these relate to events outside of the ordinary course of continuing operations and to provide a more accurate comparison of our ongoing business results.

Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP net income are used as a supplement to our unaudited condensed consolidated financial statements presented in accordance with GAAP. We believe these non-GAAP measures are the most meaningful for period-to-period comparisons because they exclude the impact of share-based compensation expense, restructuring expenses, nonrecurring legal expenses, amortization of acquired intangibles, and amortization of capitalized software costs as we do not consider these costs and expenses to be indicative of our ongoing operations.

Share-based compensation expenses are excluded. Management may issue different types of awards, including share options, and restricted share units, and excludes the associated expense in this non-GAAP measure. Share-based compensation expense is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Cambium Networks control.

Amortization of acquired intangibles includes customer relationships and is excluded since these are not indicative of continuing operations.

Amortization of capitalized software costs include capitalized research and development activities amortized over their useful life and included in cost of revenues and are excluded since these are not indicative of continuing operations.

Restructuring expenses consist primarily of severance costs for employees which are not related to future operating expenses. Cambium Networks excludes these expenses since they result from an event that is outside the ordinary course of continuing operations. Excluding these charges permits more accurate comparisons of Cambium Networks’ ongoing business results.

Our non-GAAP tax adjustments include the tax impacts from share-based compensation expense including excess or decremental tax benefits available to the company that are recorded when incurred. Non-GAAP results exclude the effect of a valuation allowance recorded against tax assets for the cumulative loss related to our UK operation. Cambium Networks excludes these amounts to more closely approximate the company’s ongoing effective tax rate after adjusting for one-time or unique non-recurring items. The associated non-GAAP effective tax rate is also applied to the gross amount of non-GAAP adjustments for the purpose of calculating non-GAAP net income in total and on a per-share basis. This approach is designed to enhance the ability of investors to understand the company’s tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP adjustments which may not reflect actual cash tax expense. 

Non-GAAP fully weighted basic and diluted shares are shown as outstanding during the entire period presented and include dilutive shares if their effect on earnings per share is dilutive. We also use non-GAAP fully weighted basic and diluted shares to provide more comparable per-share results across periods.

These non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We present a “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” in the tables below. 

The following table reconciles net income to Adjusted EBITDA, the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands): 

 

CAMBIUM NETWORKS CORPORATION

SUPPLEMENTAL SCHEDULE OF NON-GAAP ADJUSTED EBITDA

(In thousands)

(Unaudited)

Three months ended

Year ended

December 31, 2023

September 30, 2023

December 31, 2022

December 31, 2023

December 31, 2022

Net (loss) income

$                (39,008)

$                (26,200)

$                  10,011

$                (63,574)

$                  20,200

Interest expense, net

725

620

559

2,521

1,977

(Benefit) provision for income taxes

(1,021)

3,417

(1,135)

2,230

(2,183)

Depreciation and amortization of software and intangible assets

2,414

2,294

1,972

9,025

7,596

EBITDA

(36,890)

(19,869)

11,407

(49,798)

27,590

Share-based compensation

2,811

2,845

2,895

11,593

10,680

Restructuring and other nonrecurring expenses

1,191

2,602

4,049

511

Adjusted EBITDA

$                (32,888)

$                (14,422)

$                  14,302

$                (34,156)

$                  38,781

Adjusted EBITDA Margin

(81.8) %

(33.5) %

16.9 %

(15.5) %

13.1 %

The following table reconciles all other GAAP to non-GAAP financial measures (in thousands):

CAMBIUM NETWORKS CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(Unaudited)

Three Months Ended

Year Ended

December 31, 2023

September 30, 2023

December 31, 2022

December 31, 2023

December 31, 2022

GAAP gross profit

$                          (8,728)

$                          10,959

$                          41,369

$                           71,133

$                         145,140

Share-based compensation expense

47

45

56

207

219

Amortization of capitalized software costs

818

750

497

2,815

1,635

Restructuring and nonrecurring expense

69

152

221

Non-GAAP gross profit

$                          (7,794)

$                          11,906

$                          41,922

$                           74,376

$                         146,994

Non-GAAP gross margin

-19.4 %

27.7 %

49.6 %

33.8 %

49.5 %

GAAP research and development expense

$                          13,057

$                          13,151

$                          12,874

$                           53,478

$                           49,865

Share-based compensation expense

1,005

1,037

1,258

4,699

4,532

Restructuring and other nonrecurring expense

1,145

630

2,031

Non-GAAP research and development expense

$                          10,907

$                          11,484

$                          11,616

$                           46,748

$                           45,333

GAAP sales and marketing expense

$                            9,726

$                            9,675

$                          12,148

$                           42,599

$                           44,452

Share-based compensation expense

547

597

702

2,572

2,603

Restructuring and other nonrecurring expenses

34

350

384

166

Non-GAAP sales and marketing expense

$                            9,145

$                            8,728

$                          11,446

$                           39,643

$                           41,683

GAAP general and administrative expense

$                            6,207

$                            8,688

$                            5,422

$                           27,398

$                           24,982

Share-based compensation expense

1,212

1,166

879

4,115

3,326

Restructuring and other nonrecurring expenses

(57)

1,470

1,413

345

Non-GAAP general and administrative expense

$                            5,052

$                            6,052

$                            4,543

$                           21,870

$                           21,311

GAAP depreciation and amortization

$                            1,596

$                            1,545

$                            1,475

$                             6,210

$                             5,961

Amortization of acquired intangibles

375

374

374

1,498

1,603

Non-GAAP depreciation and amortization

$                            1,221

$                            1,171

$                            1,101

$                             4,712

$                             4,358

GAAP operating (loss) income

$                        (39,314)

$                        (22,100)

$                            9,450

$                          (58,552)

$                           19,880

Share-based compensation expense

2,811

2,845

2,895

11,593

10,680

Amortization of capitalized software costs

818

750

497

2,815

1,635

Amortization of acquired intangibles

375

374

374

1,498

1,603

Restructuring and other nonrecurring expenses

1,191

2,602

4,049

511

Non-GAAP operating (loss) income

$                        (34,119)

$                        (15,529)

$                          13,216

$                          (38,597)

$                           34,309

GAAP pre-tax (loss) income

$                        (40,029)

$                        (22,783)

$                            8,876

$                          (61,344)

$                           18,017

Share-based compensation expense

2,811

2,845

2,895

11,593

10,680

Amortization of capitalized software costs

818

750

497

2,815

1,635

Amortization of acquired intangibles

375

374

374

1,498

1,603

Restructuring and other nonrecurring expenses

1,191

2,602

4,049

511

Non-GAAP pre-tax (loss) income

$                        (34,834)

$                        (16,212)

$                          12,642

$                          (41,389)

$                           32,446

GAAP provision (benefit) for income taxes

$                          (1,021)

$                            3,417

$                          (1,135)

$                             2,230

$                            (2,183)

Valuation allowance impacts

17,721

5,292

23,013

Tax rate change

(2,753)

119

118

(2,753)

(873)

Tax impacts of share vesting

169

80

(221)

168

(221)

Tax effect of Non-GAAP adjustments

(1,039)

(1,314)

(753)

(3,991)

(2,886)

All other discrete items

(6,662)

3,373

(2,598)

(3,561)

(3,714)

Non-GAAP (benefit) provision for income taxes

$                          (8,457)

$                          (4,133)

$                            2,319

$                          (10,645)

$                             5,511

Non-GAAP ETR

24.3 %

25.5 %

18.3 %

25.7 %

17.0 %

GAAP net (loss) income

$                        (39,008)

$                        (26,200)

$                          10,011

$                          (63,574)

$                           20,200

Share-based compensation expense

2,811

2,845

2,895

11,593

10,680

Amortization of capitalized software costs

818

750

497

2,815

1,635

Amortization of acquired intangibles

375

374

374

1,498

1,603

Restructuring and other nonrecurring expenses

1,191

2,602

4,049

511

Non-GAAP adjustments to tax

8,475

8,864

(2,701)

16,866

(4,808)

Tax effect of Non-GAAP adjustments

(1,039)

(1,314)

(753)

(3,991)

(2,886)

Non-GAAP net (loss) income

$                        (26,377)

$                        (12,079)

$                          10,323

$                          (30,744)

$                           26,935

Non-GAAP fully weighted basic shares

27,844

27,662

27,313

27,835

27,313

Non-GAAP fully weighted diluted shares

27,861

27,744

28,605

27,871

28,578

Non-GAAP net income per Non-GAAP basic share

$                            (0.95)

$                            (0.44)

$                              0.38

$                              (1.10)

$                               0.99

Non-GAAP net income per Non-GAAP diluted share

$                            (0.95)

$                            (0.44)

$                              0.36

$                              (1.10)

$                               0.94

 

Investor Inquiries:
Peter Schuman, IRC
Vice President Investor & Industry Analyst Relations
Cambium Networks
+1 (847) 264-2188
peter.schuman@cambiumnetworks.com 

 

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IronNet Inc. and Asterion Partner to Strengthen Cybersecurity and Counter-UAS Defense Solutions

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WASHINGTON and MANAMA, Bahrain, Nov. 13, 2024 /PRNewswire/ — IronNet, the AI-based collective defense cybersecurity company, and Asterion, a leader in counter-UAS technology, announced today at the Bahrain International Airshow a partnership on the protection of critical infrastructure through the integration of AI-based cybersecurity and counter-UAS solutions.

This collaboration addresses the growing need for comprehensive and integrated defense strategies, representing a significant milestone in the evolution of air and space security. To enhance defense capabilities against unauthorized and hostile drones, the partnership integrates IronNet’s IronDome solution with Asterion’s advanced counter-UAS technology, delivering a layered defense framework that strengthens the protection of critical infrastructure, urban environments, and national borders.

The partnership integrates IronNet’s “IronDome” real-time cyber threat detection and coordinated response with Asterion’s drone detection and tracking systems, protecting airspace and critical assets from potential threats.

The methodology employs artificial intelligence, machine learning, and advanced sensor networks to analyze patterns and anomalies across a broad range of data sources. The result is a more robust and proactive defense system capable of identifying and mitigating threats before they can cause significant damage.

“Our partnership with Asterion represents a paradigm shift in how we approach critical infrastructure protection,” said Linda Zecher, CEO of IronNet. “By embracing the convergence of cyber and aerial threat detection and defense, governments and organizations can ensure a more comprehensive and effective approach to safeguarding critical infrastructure and national interests.”

“Together we’re creating a solution that addresses the multi-dimensional threats facing our clients today, including those originating from both ground, air and space-based sources,” said Andreas Mustert, Asterion Founder and CTO

About IronNet 

Founded in 2014, IronNet combines cutting-edge cybersecurity technology with exceptional expertise to deliver advanced, real-time defense solutions for organizations across the private and public sectors worldwide. Leveraging a team of top-tier cybersecurity specialists from industry, government, and academia, IronNet is dedicated to protecting enterprises, critical infrastructure, and nations against highly organized and increasingly sophisticated cyber threats. With its industry-leading products and innovative approach, IronNet empowers clients to stay ahead of evolving cyber adversaries.

About Asterion 

A team of sensor, wireless IP and aircraft design specialists, all with outstanding track-records in their fields, have gathered in Asterion to follow a vision of creating a system of a fully networked early risk detection and game changing, collateral damage avoiding, protection of both local high-risk assets as well as long range border crossing threats, through groundbreaking efficiency and EW protected wireless communications. Rather than considering current risks, contemplating any conceivable future countermeasures is an important part of Asterion’s mission.

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Laconic and the Plurinational State of Bolivia announce landmark 5 Billion USD Sovereign Carbon Transaction

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CHICAGO and LA PAZ, Bolivia, Nov. 13, 2024 /PRNewswire/ — Laconic Infrastructure Partners Inc. (Laconic), announced today that it has been mandated by the Plurinational State of Bolivia to utilize its SADAR™ Natural Capital Monetization (NCM) platform to provide technology transfer in support of Bolivia’s capacity building initiatives as it seeks to finance the enhanced ambition set forth in its Nationally Determined Contribution (NDC).

By using Laconic’s first-of-its-kind carbon securitization platform, multiple large-scale environmental data streams will be aggregated to monetize up to 5BN USD of Bolivia’s present & future carbon stocks in the world’s first Article 6 compliant benchmark Sovereign Carbon sale.

“The Plurinational State of Bolivia is committed to completely ending deforestation within our territorial borders by 2030”, said Marcelo Montenegro Gomez Garcia, Minister of Economy & Public Finance. “By working with Laconic, we have been able, for the first time, to generate sufficient development financing to enable our country to make this commitment a reality and enhancing our ambition under the Paris Agreement. This benefits not only our own citizens, but all of mankind, as we collectively strive to meet NetZero 2050.”

By creating its unique Sovereign Carbon product, Laconic has revolutionized financial intermediation in the global carbon market by allowing carbon to be traded as a true financial asset for the first time. This capability allows governments to efficiently monetize their natural capital assets by issuing bona fide securities to institutional buyers at scale globally.

The Sovereign Carbon market is the only mechanism capable of generating the 1 Trillion USD of carbon trading required annually for mankind to achieve its collective NetZero pledge.

Laconic’s unique technology platform, SADAR™, works continuously to manage the data streams which the Sovereign Carbon product requires – ensuring compliance with the not only the Paris Agreement itself, but all applicable local and regional regulatory authorities governing the carbon market. Governments rely on Laconic to ensure seamless compliance with their treaty commitments, allowing them to focus on further enhancing their NDC ambitions and accelerating the pace of global decarbonization.

“Laconic is honored to be working with the Plurinational State of Bolivia to champion the innovative Sovereign Carbon market”, said Andrew Gilmour, CEO of Laconic. “This transaction demonstrates the power of technology to drive change in emerging markets finance, as, for the first time, we are able to collectively harness market forces to generate more economic growth from the preservation of natural capital assets than from the exploitation of them. Put simply – our technology has made it possible to make more money preserving your forests than you can by cutting them down.”

About Laconic
Laconic delivers accurate environmental intelligence, data management tools, and geospatially-fused insights that enable governments, corporations, and financial institutions to engage fairly in data interchange activities that facilitate open and compliant capital markets activity in carbon-linked instruments.

Founded in 2021, the company is a Public Benefit Corporation (PBC) headquartered in Chicago, with offices in Toronto, London, and Singapore.

For more information, please visit www.laconicglobal.com.

Laconic and SADAR (Sentient All-Domain Augmented Response), LUEI, and LUCID are trademarks or registered trademarks of Laconic Infrastructure Partners Inc. in the U.S. and other countries. All other names are trademarks or registered trademarks of their respective companies.

Media contacts:
Laconic
Brant Pinvidic
brant.pinvidic@laconicglobal.com

Elke Heiss
Elke.heiss@laconicglobal.com

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Kyndryl Unveils Dedicated AI Private Cloud in Japan to Accelerate Customer Deployment of AI Services

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Kyndryl AI private cloud supports customer testing and adoption using the Dell AI Factory with NVIDIA

Private AI cloud is also available to Japanese academic institutions for AI research and innovation

TOKYO, Nov. 13, 2024 /PRNewswire/ — Kyndryl (NYSE: KD), the world’s largest IT infrastructure services provider, today launched a dedicated AI private cloud designed to enable AI innovation in Japan. Supported by a collaboration with Dell Technologies using the Dell AI Factory with NVIDIA, Kyndryl is establishing a controlled, security-rich and sovereign cloud where organizations can develop, test and implement AI services that expand their ability to compete and accelerate business performance.

Kyndryl’s new AI private cloud in Japan will help financial institutions, insurance providers, manufacturers, retail companies, and academics to confidently design and prepare to deploy innovative AI-powered solutions.

Under the collaboration, Kyndryl is establishing a Kyndryl Vital AI Lab capability that will leverage the AI-powered open integration digital business platform, Kyndryl Bridge, to support end-to-end AI applications and solution development on the NVIDIA AI Enterprise software platform. Kyndryl experts will assist with envisioning and co-creating solutions that harness the benefits of generative AI and large language models to drive innovation and achieve business objectives. Kyndryl also will apply the domain and industry expertise of Kyndryl Consult to advance customers’ ability to create, verify and deliver AI at scale.

“Organizations want to explore and understand how AI and generative AI can enhance and accelerate their business and technology transformation initiatives. They need a reliable and scalable environment with advanced security capabilities where they can develop, test and refine new solutions,” said Jonathan Ingram, President, Kyndryl Japan. “Our new AI private cloud with the Dell AI Factory with NVIDIA will provide a stable and trusted space where customers and Japanese academic institutions can confidently and privately design new applications and solutions, with support for their security, sovereignty, and data residency requirements.”

Customers using the AI private cloud environment also can access Kyndryl’s decades of experience supporting and managing mission critical applications and systems. The collaboration also will leverage Kyndryl’s ongoing work with NVIDIA that is focused on driving the development, implementation and use of solutions that deliver AI-powered insights and business outcomes.

“The Dell AI Factory with NVIDIA integrates Dell’s leading AI portfolio with the NVIDIA AI Enterprise software platform, providing Kyndryl customers the option to procure an end-to-end, pre-validated, full stack infrastructure,” said Kyle Dufresne, SVP, AI solutions sales, Dell Technologies. “With this collaboration, Kyndryl customers can get started on a wide range of AI and generative AI use cases that require security and performance, including retrieval-augmented generation (RAG), model training, and inferencing.”

“Enterprises need next-gen expertise and skills to drive innovation within their businesses and tackle today’s AI challenges,” said Bob Pette, Vice President of Enterprise Platforms, NVIDIA. “The combination of Dell AI Factory with NVIDIA and Kyndryl’s infrastructure services experience will provide the technical foundation and know-how that organizations require to develop and deploy AI at scale.”

Kyndryl will support a variety of customer use cases via its AI private cloud and plans to explore ways the environment can be optimized to enable efficient workload orchestration and workload placement, along with examining how it can enable fractional GPU capabilities to support more granular control over computing resources. 

To accelerate customer adoption and implementation of generative AI solutions Kyndryl also plans to leverage NVIDIA NeMo, NVIDIA NeMo Retriever and NVIDIA NIM microservices, all part of the NVIDIA AI Enterprise platform for the development and deployment of production-grade generative AI applications. This will advance customers’ ability to transform the build, operation and scale-out of an AI factory, leveraging AI integrations across the NVIDIA stack for smooth performance of the AI private cloud.

Through Kyndryl’s new dedicated private AI cloud service, customers can tap into a wealth of expertise crucial to their adoption of AI at scale, with support for their data security, sovereignty, and residency requirements.

Learn more about Kyndryl’s collaborations with Dell and NVIDIA.

About Kyndryl
Kyndryl (NYSE: KD) is the world’s largest IT infrastructure services provider, serving thousands of enterprise customers in more than 60 countries. The company designs, builds, manages and modernizes the complex, mission-critical information systems that the world depends on every day. For more information, visit www.kyndryl.com.

Forward-looking statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements often contain words such as “will,” “anticipate,” “predict,” “project,” “plan,” “forecast,” “estimate,” “expect,” “intend,” “target,” “may,” “should,” “would,” “could,” “outlook” and other similar words or expressions or the negative thereof or other variations thereon. All statements, other than statements of historical fact, including without limitation statements representing management’s beliefs about future events, transactions, strategies, operations and financial results, may be forward-looking statements. These statements do not guarantee future performance and speak only as of the date of this press release and the Company does not undertake to update its forward-looking statements. Actual outcomes or results may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties including those described in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Kyndryl Press Contact
press@kyndryl.com 

 

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