Cambium Networks (CMBM) investor relations material

Executive summary

• Q3 2024 revenue was $43.7M, up 1.6% year-over-year, with strong enterprise growth offset by declines in defense-related P2P and PMP segments.

• Non-GAAP gross margin improved to 42.3% and GAAP gross margin to 39.9%, both higher sequentially and year-over-year, driven by lower inventory reserve charges and supplier commitment losses.

• Operating loss narrowed to $8.1M GAAP and $3.6M non-GAAP; net loss was $9.7M GAAP ($0.34/share) and $3.8M non-GAAP ($0.14/share), both improved from prior periods.

• Free cash flow was $5.2M, and cash balance stood at $46.5M as of September 30, 2024, supported by a $45M draw on the revolving credit facility.

• The company breached EBITDA and liquidity covenants, raising substantial doubt about going concern and is seeking forbearance from lenders.

Financial highlights

• Q3 2024 revenue: $43.7M (down 5% sequentially, up 1.6% year-over-year); nine-month revenue: $132.0M (-26.7% year-over-year).

• GAAP gross margin: 39.9%; non-GAAP gross margin: 42.3%; both improved from Q2 and Q3 2023.

• Non-GAAP operating expenses were $22.1M, down $1.2M sequentially; adjusted EBITDA loss narrowed to $2.3M from $6.7M in Q2.

• Interest expense for Q3 2024 increased to $1.4M from $0.6M year-over-year due to higher rates and new borrowings.

• Cash balance at September 30, 2024: $46.5M, up $27.8M from December 31, 2023.

Outlook and guidance

• Q4 2024 revenue expected between $40M–$45M; non-GAAP gross margin 42.5%–44.5%; GAAP gross margin 40%–42%.

• Non-GAAP operating loss forecasted at $3M–$5M; adjusted EBITDA loss of $1M–$3M, margin between -2% and -7%.

• Management expects continued financial improvement through expense control and operational focus, but projects future noncompliance with financial covenants.