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CMBM Q3 Loss Narrower Than Expected on Solid Enterprise Revenue Growth
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Cambium Networks Corporation (CMBM - Free Report) reported mixed third-quarter 2024 results, with the bottom line beating the Zacks Consensus Estimate but the top line missing the same. The leading wireless solutions provider recorded year-over-year marginal revenue growth due to strength in the Enterprise segment.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Lower Point-to-Point revenues due to weakness in defense vertical affected the top line. Healthy growth in free cash flow was a positive.
CMBM’s Net Income
On a GAAP basis, the company reported a net loss of $9.7 million or 34 cents per share compared with a net loss of $26.2 million or 95 cents per share a year ago. Lower operating expenses and top-line improvement led to the narrower loss.
Non-GAAP net loss was $3.8 million or 14 cents per share compared with a net loss of $12 million or 44 cents per share in the year-ago quarter. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 17 cents per share.
Cambium Networks Corporation Price, Consensus and EPS Surprise
Quarterly net sales improved marginally to $43.7 million from $43 million in the year-ago quarter. Despite growth in the Enterprise segment, net sales decline in the Point-to-Multi-Point (PMP) and Point-to-Point (PTP) businesses hurt the top line. The top line missed the consensus estimate of $45 million.
Global defense spending for communications, government spending on broadband initiatives and fixed wireless adoption from tier-2 and tier-3 service providers were key growth drivers.
By product category, revenues from PMP were $18 million compared with $23.6 million a year ago. Revenues from this segment fell short of our estimate of $20 million.
Revenues from the PTP business were down to $9.3 million from $15.8 million in the year-ago quarter, owing to weakness in defense vertical. Net sales missed our estimate of $14.3 million. Revenues from the Enterprise business witnessed a sharp improvement to $15.2 million from $2.5 million in the year-ago quarter.
Region-wise, revenues from North America increased to $21.3 million from $17.8 million in the year-ago quarter. Net sales in the EMEA region declined to $12.2 million from $14.3 million. Revenues from Asia Pacific fell to $4.3 million from $5.3 million in the year-earlier quarter. Revenues from the Caribbean and Latin America region rose to $5.9 million from $5.7 million.
CMBM’s Other Details
Non-GAAP gross profit was $18.5 million for a corresponding margin of 42.3% compared with respective figures of $11.9 million and 27.7% in the year-ago quarter. The improvement was primarily driven by lower inventory reserve charges. Non-GAAP operating loss was $3.6 million compared with an operating loss of $15.5 million in the prior-year quarter.
CMBM’s Cash Flow & Liquidity
In the September quarter, Cambium generated $8.9 million in cash from operating activities against cash utilization of $0.246 million in the prior-year quarter. As of Sept. 30, 2024, the company had $46.5 million in cash with $9.3 million noncurrent operating lease liabilities.
CMBM’s Outlook
For the fourth quarter of 2024, revenues are estimated to be in the range of $40-$45 million. Non-GAAP gross margin is projected to be in the band of 42.5-44.5%. The company anticipates non-GAAP operating loss to be in the range of $3-$5 million. Adjusted EBITDA loss is projected to be between $1 million and $3 million.
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Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
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CMBM Q3 Loss Narrower Than Expected on Solid Enterprise Revenue Growth
Cambium Networks Corporation (CMBM - Free Report) reported mixed third-quarter 2024 results, with the bottom line beating the Zacks Consensus Estimate but the top line missing the same. The leading wireless solutions provider recorded year-over-year marginal revenue growth due to strength in the Enterprise segment.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Lower Point-to-Point revenues due to weakness in defense vertical affected the top line. Healthy growth in free cash flow was a positive.
CMBM’s Net Income
On a GAAP basis, the company reported a net loss of $9.7 million or 34 cents per share compared with a net loss of $26.2 million or 95 cents per share a year ago. Lower operating expenses and top-line improvement led to the narrower loss.
Non-GAAP net loss was $3.8 million or 14 cents per share compared with a net loss of $12 million or 44 cents per share in the year-ago quarter. The bottom line was narrower than the Zacks Consensus Estimate of a loss of 17 cents per share.
Cambium Networks Corporation Price, Consensus and EPS Surprise
Cambium Networks Corporation price-consensus-eps-surprise-chart | Cambium Networks Corporation Quote
CMBM’s Revenues
Quarterly net sales improved marginally to $43.7 million from $43 million in the year-ago quarter. Despite growth in the Enterprise segment, net sales decline in the Point-to-Multi-Point (PMP) and Point-to-Point (PTP) businesses hurt the top line. The top line missed the consensus estimate of $45 million.
Global defense spending for communications, government spending on broadband initiatives and fixed wireless adoption from tier-2 and tier-3 service providers were key growth drivers.
By product category, revenues from PMP were $18 million compared with $23.6 million a year ago. Revenues from this segment fell short of our estimate of $20 million.
Revenues from the PTP business were down to $9.3 million from $15.8 million in the year-ago quarter, owing to weakness in defense vertical. Net sales missed our estimate of $14.3 million. Revenues from the Enterprise business witnessed a sharp improvement to $15.2 million from $2.5 million in the year-ago quarter.
Region-wise, revenues from North America increased to $21.3 million from $17.8 million in the year-ago quarter. Net sales in the EMEA region declined to $12.2 million from $14.3 million. Revenues from Asia Pacific fell to $4.3 million from $5.3 million in the year-earlier quarter. Revenues from the Caribbean and Latin America region rose to $5.9 million from $5.7 million.
CMBM’s Other Details
Non-GAAP gross profit was $18.5 million for a corresponding margin of 42.3% compared with respective figures of $11.9 million and 27.7% in the year-ago quarter. The improvement was primarily driven by lower inventory reserve charges. Non-GAAP operating loss was $3.6 million compared with an operating loss of $15.5 million in the prior-year quarter.
CMBM’s Cash Flow & Liquidity
In the September quarter, Cambium generated $8.9 million in cash from operating activities against cash utilization of $0.246 million in the prior-year quarter. As of Sept. 30, 2024, the company had $46.5 million in cash with $9.3 million noncurrent operating lease liabilities.
CMBM’s Outlook
For the fourth quarter of 2024, revenues are estimated to be in the range of $40-$45 million. Non-GAAP gross margin is projected to be in the band of 42.5-44.5%. The company anticipates non-GAAP operating loss to be in the range of $3-$5 million. Adjusted EBITDA loss is projected to be between $1 million and $3 million.
CMBM’s Zacks Rank and Key Picks
CMBM currently carries a Zacks Rank #3 (Hold).
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
It provides cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
Its excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank of 2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.