Cambium Networks Corporation

Good afternoon. My name is Abigail, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cambium Network's first quarter 2021 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please limit yourself to one question and one follow-up question. Thank you. Mr. Pierre Schumann, Senior Director of Investor and Industry Analyst Relations, you may begin your conference.

Thank you, Abigail. Welcome and thank you for joining us today for Cambium Network's first quarter 2021 financial results conference call, and welcome to all those joining by the webcast. Atul Bhatnagar, our President and CEO, and Stephen Cumming, our CFO, are here for today's call. The financial results press release and CFO commentary referenced on this call are accessible on the investor page of our website, and the press release has been submitted on a form 8K with the SEC. A copy of today's prepared remarks will also be available on our investor page at the conclusion of this call. As a reminder, today's remarks, including those made during Q&A, will contain forward-looking statements about the company's outlook and expected performance. These statements are based on current expectations, forecasts, and assumptions. Risk and uncertainties could cause actual results to differ materially. Except what is required by law, Cambium Networks does not undertake any obligation to update or revise any forward-looking statements for any reason after the date of this presentation, whether as a result of new information, future developments, to conform these statements to actual results or make changes in Cambium's expectations or otherwise. It is Cambium Networks' policy not to reiterate our financial outlook. We encourage listeners to review the full list of risk factors included in the safe harbor statement in today's financial results press release. We will also reference both GAAP and non-GAAP financial measures and specifically note that all sequential and year-over-year comparisons reference non-GAAP numbers except where otherwise noted. A reconciliation of non-GAAP measures to GAAP measures is included in the appendix to today's financial results press release, which can be found on the investor page of our website and in today's press release announcing our results. Turning to the agenda, Cambium Network's President and CEO, Atul Bhatnagar, will provide the key investment highlights for the first quarter of 2021, and Stephen Cumming, Cambium Network's CFO, will provide a recap of the financial results for the quarter and our financial outlook for the second quarter in calendar year 2021. Our prepared remarks will be followed by a Q&A session. I'd like to now turn the call over to Atul.

Thank you, Peter. The momentum continued to build for Cambium's business, as our vision as a high-performance yet affordable global wireless infrastructure leader for broadband communications accelerated during the first quarter of 2021. During the last week of January, Cambium Networks shipped our 9 millionth radio since becoming a standalone company. Interest in fixed wireless broadband solutions is becoming mainstream as performance matches that of fiber. and the attractive cost of ownership for our solutions make Cambium a competitive and economically superior solution for wireless infrastructure projects around the world, propelled by increased government spending. Fixed wireless broadband is a critically important networking infrastructure to connect our local communities. If it can be a wireless solution, it will be a wireless solution because of ease of installation and operations. We are at the start of a new era of end-to-end wireless speeds equivalent to that of fiber. Our multi-gigabit wireless fabric can deliver fiber's performance and reliability at a fraction of the cost. Our recently launched 60 GHz CN wave solution is shipping in volume with increasing demand, and our forthcoming fixed 5G 28 GHz millimeter wave products, with proof of concept arriving during the middle of 2021, and fall for volume shipments will further accelerate this trend as we reach new customers and enter new markets demanding higher broadband performance at the edge of the network. For the first time in Cambium's history, we will purposefully compete in urban markets in a meaningful way as existing networks upgrade infrastructure and new high-speed networks proliferate. with more cost-effective technology provided by Cambium Networks. Cambium's significant new product introductions combined with increased government funding around the world will benefit our financial results for many years into the future. Turning to the results of first quarter 2021, we achieved a record revenues of $88.5 million above the high end of our outlook of between $81 to $85 million. Non-GAAP diluted EPS of 41 cents also exceeded the high end of our outlook of between 30 and 34 cents per diluted share. We delivered these outstanding results as we have transformed Cambium into a more agile company as we continue to work remotely during the COVID pandemic. Taking a look at revenues across our different product lines, Within our point-to-multipoint PMP business, we had record revenues increasing 7% sequentially and up 66% year-over-year as we continued to see strong momentum in network traffic, increased demand for our CBRS solutions, and solid demand for new product introductions. We believe we are taking share from both larger and smaller competitors as we expand our portfolio of solutions offering industry-leading spectral efficiency, scalability, quality, reliability, and attractive economics for our customers. The point-to-point PTP business had better than anticipated results during Q1 2021, growing 4% quarter-over-quarter while improving 33% year-over-year on higher demand for backhaul. We had record results for our enterprise Wi-Fi business, which continued to recover from COVID growing 11% sequentially and increasing 6% year-over-year during Q1 2021 due to the expanded growth of Wi-Fi 6 solutions and record revenues for our cloud-savvy CN matrix enterprise switching products. Looking at some notable customer wins and new product developments. In North America, we had multiple wins for our new 60 GHz CN wave solutions. Alaska Communications, a service provider, is planning to offer up to 1 gig speeds to select residential locations in Anchorage and Fairbanks. Cambium's solution was selected to work in conjunction with the existing fiber networks, where new fiber construction is cost prohibitive, and Cambium's technology allows for delivery of service to neighborhoods more quickly. Also in Alaska, Cambium won a residential deployment at a military base using our 60 gigahertz CN wave technology. Within our PTP business, a large service provider delivering high-speed internet and voice services to six states in Midwest and Southwest selected our PTP850 as they seek to expand and fortify their network. One of the larger RDOF winners, which is a new customer for Cambium, is building out their commercial network with the use of Cambium's PMP450M and our EPMP technology. The customer selected Cambium for our superior performance, reliability, and the ability to scale with their business. Another significant win for Cambium was with an NFL city in the southeast for a smart city project. The city selected Cambium's 60 GHz CN Wave for Wi-Fi backhaul and our CN Pilot E700 for outdoor community Wi-Fi access. Cambium was selected by customer for our CN Maestro wireless fabric management, reliability, scalability, superior performance, and value. In enterprise, a large MSP based out of the Northeast selected Cambium CN matrix switching products for deployment in an assisted living and healthcare facilities. Cambium was selected for its simple, reliable, and secure cloud management platform, as well as policy-based automation. Cambium's first mover status with the FCC's 3.5 GHz CBRS spectrum continued to have momentum for the sales of our PMP450 products and our SAS service in both the U.S. and its territories. Our full end-to-end solutions include high-performance radios, over-the-air CBRS upgrades, and cloud-based software solutions. In April, we released software updates for support of priority access licenses, PAL, multi-grant support, once they become online, providing another layer of differentiation from competing LTE solutions. Further enhancements to our CBRS platform will occur in June, including optimized alternative channel algorithms. As of today's call, we now have over 90,000 devices managed by our CBRS SaaS service. an increase of over 19% since we reported last quarter. In the Europe, Middle East, and Africa region, EMEA, the strategic wins from Q1 include, in Spain, we have a few larger wins to share. One of Spain's and Portugal's leading nationwide fiber and mobile network operators selected Cambium to launch their high-speed broadband services across the interior of Spain and Portugal, where deployment Deploying fiber is cost prohibitive. They selected our PMP450M and enterprise switches, as well as CN Maestro X. This is the first sale to a nationwide carrier of CN Maestro X since the product's release in Q420. Also in Spain, we are seeing a gradual recovery in the hospitality market and have closed a high-profile enterprise Wi-Fi win at a five-star luxury resort the Marbella Club Resort on the Mediterranean coast. The resort selected Cambium's full suite of hospitality solutions to deliver high-speed wireless connectivity across the resort to cover guest rooms, outdoor recreation areas, and high-density conference facilities using our CN pilot Wi-Fi. Wi-Fi-aware CN matrix switching technology, all managed by our CN Maestro software solution. In the U.K., We are another high-profile win for our 60 GHz CN Wave solutions and Cambium's enterprise Wi-Fi solutions at Wifinity, the UK's leading managed service provider of connectivity solutions for recreational holiday parks. Wifinity will deploy Cambium's 60 GHz CN Wave to provide high-speed connectivity for guests at multiple holiday parks in the UK. In-country staycations are popular this year due to travel restrictions between countries. Cambium continues its leadership position, deploying public Wi-Fi solutions across the European Union as part of EU's Wi-Fi for EU initiative, having already secured over 1,500 municipalities under the EU's Wi-Fi for EU program. This very successful government-sponsored Wi-Fi for EU program was extended by an additional six months. Approximately 800 to 900 municipalities in Europe still have not yet used their vouchers. In the Middle East, Saudi Aramco, the world's largest petroleum company, awarded Cambium its first project to backhaul oil wellheads and security data for its production operations. In Africa, the Orange Group's Ivory Coast operating entity selected Cambium to upgrade its high-speed broadband network. The wind displaced one of our closest competitors with the selection of our ePMP Force 200 technology due to ePMP's superior performance and Cambium's superior technical support. In the APAC region, we had a sizable enterprise Wi-Fi 6 win at the Melbourne Convention and Exhibition Center, which is replacing end-of-life of a major Wi-Fi vendor with Cambium's XV3-8 access points to establish connectivity of their back office operations. Cambium was already powering Wi-Fi in the front office areas, including the conference rooms and exhibition areas. Now the Convention Center is fully deploying Cambium in their front and back office operations. Altogether, 250 access points will be in operation. In New Zealand, StratNet, a large WISP with coverage across the country, decided to transition from a closed competitor to Cambium. We are now deploying the first project in the northern part of the country, funded by the New Zealand government's Rural Broadband Initiative to provide high-speed internet to the underserved areas. In the first phase, StratNet is deploying Cambium equipment to connect over 550 residential customers. Cambium was selected for overall cost of ownership, performance, and scalability. In the Caribbean and Latin America Cala region, we had a record-breaking quarter with revenues at $10.5 million, the second consecutive quarter that the region has exceeded $10 million in revenue. We had another large deal in Colombia this quarter with a Tier 1 service provider. As two different system integrators selected Cambium, using both our ePMP technology for the fixed wireless backhaul portion of the project to connect remote locations, and Cambium's enterprise Wi-Fi solutions, including CN matrix switches. They were selected for access at those sites. The operator, who has recently acquired significant new access spectrum, is expanding its capacity and coverage nationwide to bridge the digital divide. We won this project based on our reputation plus the functionality of CN Maestro cloud management software. In Panama, Cable Onda, owned by Tigo Millicom, purchased a significant number of 3 GHz PMP450 CPEs to service its expanding customer base in that country. Finally, we won the first phase of a public safety project with the state of Veracruz in Mexico. The state government plans to deploy 50,000 surveillance cameras using our PTP670 for transport and PMP450I for access. Cambium was selected because of the performance of our PMP450I and our reputation as a leading provider of solutions being used by numerous high-profile video surveillance systems in Mexico. Looking at new products since our previous quarterly update. During the middle of this year, we expect to have two significant new product introductions, First, our outdoor Wi-Fi 6 product, the XV2-2T, will be released this summer. Outdoor Wi-Fi is an increasingly relevant market in a number of verticals, and Cambium has a particular strength in this market, given our strong heritage in outdoor resilient radios. Second, our highly anticipated 28 GHz CNWave 5G product will be available for POCs around the time of our next quarterly earnings call. Initially, customers in the MER region will be our primary focus for our fixed 5G products. Our 28 GHz CNWave provides high capacity, scalable residential access, backhaul for outdoor Wi-Fi access points, 4G and 5G small cells, and video surveillance networks at a lower total cost of ownership than fiber. Utilizing the licensed 28 GHz band, which runs from 24 to 29 GHz spectrum, Cambium has benefits of the 5G NR standard, yet features the benefits of Cambium's fixed wireless products using our software-defined radio architecture, including ease of use and deployment, reliability, and management of our single pane of glass. Interest in our 28 GHz CN wave products remains high. and customer activity remains strong ahead of availability. Cambium received its first volume orders for its new 28 gigahertz CN Wave product platform from a major service provider in EMEA. We will have more details regarding this product during our third quarter earnings conference call. Also in our PMP and PDP product lines, Cambium's 60 gigahertz CN Wave for millimeter wavelengths make it possible to provide a city with high-speed broadband access by utilizing existing street furniture, such as street lamps, traffic lights, and utility poles. As a result, it can be deployed faster and more cost-efficiently than fiber broadband. We have several high-profile POCs in Silicon Valley that have selected Cambium to deploy gigabit backhaul within their cities. We are seeing traditional fiber operators such as Alaska Communications deploying hybrid networks using CN Wave to extend fiber to customer premises, accelerating time to revenue at lower operating and capital costs. We are very bullish on 60 GHz CN Wave solutions and have a time-to-market advantage over our nearest competitors. We continue to experience strong growth in accounts utilizing CN Maestro Cloud software, our end-to-end cloud-powered connectivity solution to manage the entire network from a single pane of glass. Total devices under cloud management in Q1 2021 totaled approximately 577,900, an increase of 10% from Q4 2020 and up 40% year-over-year. Turning to the channel. In Q1 2021, we expanded our channel presence by adding over 560 net new channel partners sequentially, and over 2,280 net new channel partners year over year, which represents an increase of approximately 6% sequentially and 31% year over year. Our first ever global virtual event called Cambium Connections was held on February 24th and 25th for our end customer and partner community. We had more than 2,700 people from over 130 countries registered, and the event was successful at attracting both new and existing customers as we shared our vision of where the industry is headed over the next few years. A replay of the event can be found on YouTube. Finally, I'm proud to say Cambium Networks were recently voted by the members of the Wireless ISP Association, WSPA, as the manufacturer of the year. I would like to thank our customers and partners for this honor. I will now turn the call over to Stephen for a review of our Q121 financial results and outlook. Thanks, Atul.