Cambium Networks Corporation

Good day and thank you for standing by. Welcome to the Cambium Network's third quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jacob Sayre, Chief Financial Officer. Please go ahead.

Thank you, Rivka. Welcome, everyone, and thank you for joining us today for Cambium Network's third quarter 2024 financial results conference call. And welcome to everyone else as well for joining via the webcast. My name is Jacob Sayre. I'm the Chief Financial Officer of Cambium Networks, and I'm joined by Morgan Kirk, our President and CEO. The financial results press release for the third quarter is accessible on the investor page of our website and has been submitted to the SEC on Form 8K. The transcript of today's prepared remarks will also be available on our investor page after the conclusion of the call. As a reminder, today's remarks, including those made during Q&A, will contain forward-looking statements about the company's outlook and forecasted performance. These statements are based on current conditions, forecasts, and assumptions. risks and uncertainties could cause actual results to differ materially from today's remarks. Except as required by law, CanBeam Networks does not undertake any obligation to update or revise any forward-looking statements for any reason after today's presentations. It's our 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 press release and our most recent SEC filings, including the most recent 10-K and 10-Qs. 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 it's otherwise noted. A reconciliation of non-GAAP measures to GAAP is included in the appendix to today's financial results press release. Now let's turn to the agenda. Morgan will provide key operational highlights for the third quarter, and I will provide a recap of the financial results for the third quarter 24 and discuss our financial outlook for the fourth quarter. Our prepared remarks will be followed by a Q&A session. So now I'd like to turn the call over to Morgan.

Thank you, Jacob. Revenues for Q3 24 were $43.7 million. Recognizing the market challenges, we are pleased that the revenues were within the outlook range we provided during our Q2 24 financial results call on August 8, 2024. Equally important to note, we grew in all geographies in our enterprise business, with revenues up sequentially by 34% to $15.2 million. This was offset by lower revenues in our point-to-point PTP business, primarily due to lower defense revenues. While we are confident that defense revenues will grow next year, it appears that the defense budgets for communication equipment were constrained due to funding pressures from monies required in active conflict zones. Non-GAAP gross margin improved again quarter over quarter, growing to 42.3%. Operating margins also improved sequentially, as we continued to lower our break-even point. Free cash flow was a positive $5.2 million during Q3 24, and our cash balance stood at $46.5 million as of September 30th. These results support our belief that the business is moving in the right direction financially, operationally, and strategically. Sales of Cambium's products out of the distribution channel, as reported by Cambium's distributors, were again higher for Q3 24 than our reported revenues, and we saw continued declines in channel inventories. We continue to expect sales in and sales out to be at equilibrium by the end of the year. Looking forward, lower channel inventories are expected to result in Cambium's revenue being more directly tied to end user demand. Looking at some new customer launches. One of the world's largest oil and gas companies and an existing Cambium Networks customer, purchased PMP450Vs to upgrade their existing deployment of PMP450I for faster speeds in the 6 GHz band. The company also selected the CN Matrix TX2000 series industrial-grazed switch that supports extended temperature ranges and power over Ethernet capabilities, among other attributes required by outdoor environments. we saw similar adoption of PMP450V by other industrial customers in the United States during Q3 and expect to maintain that trend. We continue to drive growth in logistics and retail market segments as one of the world's largest retailers selected our CN Wave 60 gigahertz platform to provide wireless connectivity between retail stores and adjacent fueling stations and in their 37 major distribution centers connecting onsite primary and remote facilities. The 60 GHz CN-Wave platform will also provide backup paths to existing fiber lines. As discussed on our last quarter's call, Linnaeus' successful deployment of Cambium's 60 GHz CN-Wave solution to provide gigabit access to over 4,700 homes on Walney Island off the west coast of England continues to impress. due to both the rapid time to deploy, which is less than 12 weeks, and the high penetration rate, which was greater than 20% only weeks after deployment. Honeus has now been recognized by the United Kingdom's Wireless Internet Service Provider Association, WSPA, with their Best Gigabit Wireless Project UK, WSPA, award in October. Following multiple deployments at their sites, In the Caribbean and Latin America and Europe, Middle East, and Africa regions, we completed our first deployment in the Pacific region at a franchise site of a global hospitality company. At the Samoa location, as with other sites, the Cambium Network's Wi-Fi 6 slash 6E access points and CN matrix switches are providing an exceptional guest experience and supporting the hotel's operations. The network upgrade was part of a hotel-wide renovation completed in October with a grand reopening. In Q4, we expect to complete additional development on our CN matrix switch that is required for broader deployment across the company's many brands in 2025. Looking now at some new product launches that are key to our future success. We released a two-by-two version of our PMP450V subscriber module, SM, that works in both 5 and 6 gigahertz. This product complements our 4x4 access point, AP, and our 4x4 SM, but at a lower cost. It is capable of more than 500 megabits data rate and expects to be the workhorse of PMP450 networks. The combination of back-to-back releases on the ePMP4000 line has significantly boosted performance across many fronts, Release 5.8 brought beamforming support, and with Release 5.9, significant scalability enhancements were added that allow operators to deploy higher numbers of SMs per AP. These advances combine to enable operators to offer more higher data rate packages and achieve price performance superiority. Also in Q3, we introduced Market Apps, a new advanced service hosted from our CN Maestro platform that provides apps for customers and end users that are customized for specific use cases. The first two apps released in Market Apps are targeted at the multi-dwelling unit, MDU market, which includes multi-family, student housing, assisted living, and similar environments. These apps enable property managers, service providers, and residents to manage Wi-Fi services with a simple workflow. The market apps framework will be extended over time with new apps targeted at different verticals and high-value use cases. Finally, total devices under CN Maestro Cloud Management in Q3-24 increased approximately 3% from Q2-24 and increased over 14% on a year-over-year basis. I will now turn the call over to Jacob for a review of our Q3-24 financial results and our Q4-24 financial outlook.