Cambium Networks Reports Second Quarter 2023 Financial Results
- Revenues increased by 14% year-over-year, showcasing steady growth in the company's financial performance.
- Record Point-to-Point revenues of $25.1 million, up 39% sequentially, and increased 60% year-over-year, indicating a strong demand for specific products.
- The appointment of Morgan Kurk, a senior executive with a proven track record, as the new President and CEO, reflects the company's commitment to driving growth and innovation.
- The company's focus on new product cycles and increased government funding in North America and defense presents significant opportunities for future growth.
- Revenues decreased by 23% sequentially, signaling a short-term decline in demand for certain products.
- The net loss of $2.6 million for Q2 2023 indicates a financial setback for the company.
- The decline in revenues for Enterprise products and slowing European economies suggests challenges in specific market segments.
Morgan Kurk Announced as President & Chief Executive Officer
- Revenues of
, decreased$59.5 million 23% sequentially, and increased14% year-over-year - Record Point-to-Point revenues of
, up$25.1 million 39% sequentially, and increased60% year-over-year - Gross margin of
49.1% , non-GAAP(1) gross margin of50.3% - Operating loss of
, non-GAAP(1) operating income of$2.7 million $1.6 million - Net loss of
or$2.6 million per diluted share, non-GAAP(1) net income of$0.10 or$0.9 million per diluted share$0.03 - Adjusted EBITDA(1) of
or$2.8 million 4.7% of revenues
GAAP | Non-GAAP (1) | |||||||||||
(in millions, except percentages) | Q2 2023 | Q1 2023 | Q2 2022 | Q2 2023 | Q1 2023 | Q2 2022 | ||||||
Revenues | $ 59.5 | $ 77.4 | $ 69.3 | $ 59.5 | $ 77.4 | $ 69.3 | ||||||
Gross margin | 49.1 % | 51.2 % | 48.3 % | 50.3 % | 52.1 % | 48.9 % | ||||||
Operating margin | (4.5) % | 7.2 % | 3.8 % | 2.8 % | 12.2 % | 9.1 % | ||||||
Net (loss) income | $ (2.6) | $ 4.3 | $ 2.3 | $ 0.9 | $ 6.8 | $ 5.0 | ||||||
Adjusted EBITDA margin | 4.7 % | 13.4 % | 11.3 % |
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 second quarter 2023 ended June 30, 2023.
"Our second quarter results were disappointing as a result of lower demand for Enterprise products caused by lower order volumes from distributors and high channel inventories, and a challenging macroeconomic environment, especially in EMEA," said Atul Bhatnagar. "The company has recently initiated a cost reduction plan to increase profitability ahead of our next phase of growth which includes the FCC's anticipated approval of 6 GHz spectrum products, the ramp of our 28 GHz cnWave 5G fixed, 60 GHz cnWave technologies for service providers, and the expansion of our fiber-based solutions."
Bhatnagar continued, "We remain confident that new product cycles for next generation multi-gigabit fixed wireless and fiber products, increased government funding in
Cambium also announced that Morgan Kurk, most recently a senior executive at Honeywell International, and prior to that, the executive vice president broadband market segment leader and chief technology officer at CommScope, has been appointed president and chief executive officer, effective immediately. Mr. Kurk has also joined the company's board of directors. Atul Bhatnagar is stepping down as the company's CEO but will continue to serve as a member of the company's board of directors.
"Cambium has established itself as a leader in the fixed wireless broadband and wireless networking categories and has achieved many product innovations since its spin-off from Motorola in 2011. We could not be more thrilled to have Morgan lead Cambium in the next phase of its journey. As a proven industry leader with a three-decade track record of delivering outstanding results, Morgan brings the right vision, experience and energy to drive growth at the company for years to come," said Robert Amen, Cambium's chairman. "We also want to acknowledge and thank Atul for his many years of leadership in establishing a culture of growth, integrity and innovation and in leading Cambium to where it is today."
"Cambium's technology, blue-chip customers, and market position present significant opportunities to scale. As CEO, my focus will be on continuing to build shareholder value by fostering a culture of operational excellence and innovation, and driving profitable growth in a highly dynamic market," said Mr. Kurk.
"I am extremely proud of our entire Cambium team and what we have accomplished over the past ten years. I want to express deep gratitude to Team Cambium for their unwavering support all these years in creating a highly innovative growth company. I look forward to assisting Morgan through a successful transition and continuing to serve our shareholders as a director," said Mr. Bhatnagar.
Revenues of
GAAP gross margin for the second quarter 2023 was
Non-GAAP gross margin for the second quarter 2023 was
Net cash used in operating activities was
Second Quarter 2023 Highlights
- Revenues of
, decreased$59.5 million 23% sequentially, and were lower by14% year-over-year. - GAAP net loss of
or$2.6 million per diluted share, non-GAAP net income of$0.10 or$0.9 million per diluted share, compared to GAAP net income of$0.03 , or$2.3 million per diluted share for the second quarter 2022, and non-GAAP net income of$0.08 or$5.0 million per diluted share for the second quarter 2022.$0.18 - Adjusted EBITDA of
or$2.8 million 4.7% of revenues, compared to or$7.8 million 11.3% of revenues for the second quarter 2022. - Net cash used in operating activities was
, compared to net cash provided by operating activities of$4.5 million for the second quarter 2022.$10.0 million - Surpassed 14 million radios shipped since becoming a standalone company.
- Increased net new channel partners by approximately 1,600 year-over-year, an increase of over
13% . - Devices under cnMaestro® cloud management increased
17% year-over-year.
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.
Third Quarter 2023 Financial Outlook
Taking into account our current visibility, the financial outlook as of August 1, 2023, for the third quarter ending September 30, 2023, is expected to be as follows:
- Revenues between
$62.0 -$70.0 million - GAAP gross margin between
48.7% -50.2% ; and non-GAAP gross margin between49.8% -51.3% - GAAP operating expenses between
; and non-GAAP operating expenses between$30.5 -$31.5 million $25.6 -$26.6 million - GAAP operating (loss) income between (
)$0.3 - ; and non-GAAP operating income between$3.6 million $5.2 -$9.2 million - Interest expense, net of approximately
$0.7 million - GAAP net (loss) income between
or between ($(0.8) -$2.4 million ) and$0.03 per diluted share; and non-GAAP net income between$0.08 or between$3.7 -$6.9 million and$0.13 per diluted share$0.25 - Adjusted EBITDA between
; and adjusted EBITDA margin between$6.3 -$10.3 million 10.2% -14.8% - GAAP effective tax rate of approximately
0.0% ; and non-GAAP effective tax rate of approximately17.0% -21.0% - Approximately 28.0 million weighted average diluted shares outstanding
Cash requirements are expected to be as follows:
- Paydown of debt:
$0.7 million - Cash interest expense: approximately
$0.5 million - Capital expenditures:
$4.0 -$4.5 million
Full Year 2023 Financial Outlook
- Revenues between
, representing a decline of$265.0 -$275.0 million 7% to11% - GAAP gross margin between
49.2% -50.6% ; and non-GAAP gross margin between50.2% -51.6% - GAAP net income between
or between$2.3 -$7.6 million and$0.08 per diluted share; and non-GAAP net income between$0.27 or between$16.7 -$21.9 million and$0.59 per diluted share$0.78 - Adjusted EBITDA margin between
10.5% -12.6%
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, August 1, 2023. 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/BIba7cb7ea94fa45bbb6d50fbc12d1e8e2. 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, CFO Andrew Bronstein, and Atul Bhatnagar will hold one-on-one meetings virtually with investors and present on Wed., August 9, 2023, at the Oppenheimer 26th Annual Technology, Internet & Communications Conference, and will hold one-on-one meetings in person on Tue., Aug. 29, 2023, at the Jefferies Semiconductor, IT Hardware & Communications Technology Summit in
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-Q filed on May 9, 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; the impact of the global shortage of certain components including semiconductor chipsets; the constraint in global shipping and logistics; our inability to predict and respond to emerging technological trends and network operators' changing needs; the impact of political tensions between
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 | |||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||
Revenues | $ 59,542 | $ 77,401 | $ 69,296 | ||||
Cost of revenues | 30,300 | 37,741 | 35,857 | ||||
Gross profit | 29,242 | 39,660 | 33,439 | ||||
Gross margin | 49.1 % | 51.2 % | 48.3 % | ||||
Operating expenses | |||||||
Research and development | 13,008 | 14,262 | 11,440 | ||||
Sales and marketing | 11,528 | 11,670 | 10,842 | ||||
General and administrative | 5,836 | 6,667 | 6,958 | ||||
Depreciation and amortization | 1,573 | 1,496 | 1,534 | ||||
Total operating expenses | 31,945 | 34,095 | 30,774 | ||||
Operating (loss) income | (2,703) | 5,565 | 2,665 | ||||
Operating margin | -4.5 % | 7.2 % | 3.8 % | ||||
Interest expense, net | 579 | 597 | 407 | ||||
Other expense, net | 64 | 154 | (371) | ||||
(Loss) income before income taxes | (3,346) | 4,814 | 2,629 | ||||
(Benefit) provision for income taxes | (704) | 538 | 307 | ||||
Net (loss) income | $ (2,642) | $ 4,276 | $ 2,322 | ||||
Earnings per share | |||||||
Basic | $ (0.10) | $ 0.16 | $ 0.09 | ||||
Diluted | $ (0.10) | $ 0.15 | $ 0.08 | ||||
Weighted-average number of shares outstanding to compute (loss) earnings per share | |||||||
Basic | 27,432,705 | 27,341,013 | 26,836,853 | ||||
Diluted | 27,432,705 | 28,452,855 | 27,588,772 | ||||
Share-based compensation included in costs and expenses: | |||||||
Cost of revenues | $ 59 | $ 56 | $ 50 | ||||
Research and development | 1,388 | 1,269 | 1,011 | ||||
Sales and marketing | 728 | 700 | 578 | ||||
General and administrative | 887 | 850 | 878 | ||||
Total share-based compensation expense | $ 3,062 | $ 2,875 | $ 2,517 |
Certain revisions were made within operating expenses in prior periods to conform to the current period. These revisions had no impact to operating income.
CAMBIUM NETWORKS CORPORATION | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(In thousands, except share information) | ||||
(Unaudited) | ||||
June 30, 2023 | December 31, 2022 | |||
ASSETS | ||||
Current assets | ||||
Cash | $ 31,978 | $ 48,162 | ||
Accounts receivable, net of allowance of | 86,819 | 89,321 | ||
Inventories, net | 82,348 | 57,068 | ||
Recoverable income taxes | 98 | 117 | ||
Prepaid expenses | 8,042 | 11,857 | ||
Other current assets | 9,020 | 6,464 | ||
Total current assets | 218,305 | 212,989 | ||
Noncurrent assets | ||||
Property and equipment, net | 11,375 | 11,271 | ||
Software, net | 10,484 | 8,439 | ||
Operating lease assets | 4,823 | 4,011 | ||
Intangible assets, net | 8,424 | 9,173 | ||
Goodwill | 9,842 | 9,842 | ||
Deferred tax assets, net | 16,106 | 12,782 | ||
Other noncurrent assets | 929 | 955 | ||
TOTAL ASSETS | $ 280,288 | $ 269,462 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | $ 30,067 | $ 31,284 | ||
Accrued liabilities | 26,364 | 28,042 | ||
Employee compensation | 5,852 | 7,394 | ||
Current portion of long-term external debt, net | 3,166 | 3,158 | ||
Deferred revenues | 8,307 | 8,913 | ||
Other current liabilities | 15,323 | 8,429 | ||
Total current liabilities | 89,079 | 87,220 | ||
Noncurrent liabilities | ||||
Long-term external debt, net | 23,212 | 24,463 | ||
Deferred revenues | 9,281 | 8,617 | ||
Noncurrent operating lease liabilities | 3,033 | 2,170 | ||
Other noncurrent liabilities | 1,632 | 1,619 | ||
Total liabilities | 126,237 | 124,089 | ||
Shareholders' equity | ||||
Share capital; | 3 | 3 | ||
Additional paid in capital | 146,528 | 138,997 | ||
Treasury shares, at cost, 244,504 shares at June 30, 2023 and 209,461 shares at March 31, 2023 | (5,509) | (4,922) | ||
Accumulated earnings | 14,456 | 12,822 | ||
Accumulated other comprehensive loss | (1,427) | (1,527) | ||
Total shareholders' equity | 154,051 | 145,373 | ||
TOTAL LIABILITIES AND EQUITY | $ 280,288 | $ 269,462 | ||
CAMBIUM NETWORKS CORPORATION | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
Three Months Ended | ||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||
Cash flows from operating activities: | ||||||
Net (loss) income | $ (2,642) | $ 4,276 | $ 2,322 | |||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||
Depreciation and amortization of software and intangible assets | 2,222 | 2,095 | 1,904 | |||
Amortization of debt issuance costs | 79 | 75 | 76 | |||
Share-based compensation | 3,062 | 2,875 | 2,517 | |||
Deferred income taxes | (1,805) | (1,519) | 80 | |||
Provision for inventory excess and obsolescence | (276) | 1,336 | 80 | |||
Other | 69 | (231) | (87) | |||
Change in assets and liabilities: | ||||||
Receivables | 9,165 | (8,973) | (10,082) | |||
Inventories | (13,739) | (12,601) | (7,312) | |||
Prepaid expenses | 2,734 | 1,069 | 8,748 | |||
Accounts payable | 134 | (1,474) | 11,899 | |||
Accrued employee compensation | (931) | (584) | (642) | |||
Other assets and liabilities | (2,593) | 7,697 | 483 | |||
Net cash (used in) provided by operating activities | (4,521) | (5,959) | 9,986 | |||
Cash flows from investing activities: | ||||||
Purchase of property and equipment | (667) | (1,569) | (1,554) | |||
Purchase of software | (1,796) | (1,537) | (933) | |||
Net cash used in investing activities | (2,463) | (3,106) | (2,487) | |||
Cash flows from financing activities: | ||||||
Repayment of term loan | (657) | (656) | (656) | |||
Issuance of ordinary shares under ESPP | 1,102 | — | 1,127 | |||
Taxes paid related to net share settlement of equity awards | (285) | (148) | (487) | |||
Proceeds from share option exercises | 105 | 387 | 103 | |||
Net cash provided by (used in) financing activities | 265 | (417) | 87 | |||
Effect of exchange rate on cash | 1 | 16 | (54) | |||
Net (decrease) increase in cash | (6,718) | (9,466) | 7,532 | |||
Cash, beginning of period | 38,696 | 48,162 | 38,397 | |||
Cash, end of period | $ 31,978 | $ 38,696 | $ 45,929 | |||
Supplemental disclosure of cash flow information: | ||||||
Income taxes paid | $ 2,639 | $ 204 | $ 306 | |||
Interest paid | $ 468 | $ 412 | $ 189 |
CAMBIUM NETWORKS CORPORATION | ||||||
SUPPLEMENTAL FINANCIAL INFORMATION | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
REVENUES BY PRODUCT CATEGORY | ||||||
Three Months Ended | ||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||
Point-to-Multi-Point | $ 26,734 | $ 22,292 | $ 28,269 | |||
Point-to-Point | 25,074 | 18,008 | 15,684 | |||
Enterprise | 6,420 | 35,656 | 24,014 | |||
Other | 1,314 | 1,445 | 1,329 | |||
Total Revenues | $ 59,542 | $ 77,401 | $ 69,296 | |||
REVENUES BY REGION | ||||||
Three Months Ended | ||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||
North America | $ 39,526 | $ 47,593 | $ 31,140 | |||
6,769 | 19,708 | 21,281 | ||||
6,015 | 3,685 | 7,960 | ||||
7,232 | 6,415 | 8,915 | ||||
Total Revenues | $ 59,542 | $ 77,401 | $ 69,296 |
Use of non-GAAP (Adjusted) Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in
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 income as reported in our consolidated statements of income excluding the impact of (i) interest expense (income), net; (ii) income tax provision (benefit); (iii) depreciation and amortization expense; (iv) nonrecurring legal expenses, (v) share-based compensation expense, (vi) one-time costs, and (vii) 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 legal 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 one-time costs and restructuring expenses and secondary offering 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 and secondary offering expenses, nonrecurring legal expenses, write-down of debt issuance costs upon prepayment of debt, 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 expense and associated employment taxes paid are excluded. Management may issue different types of awards, including share options, restricted share awards 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 while the associated employment taxes are cash-based expenses that vary in amount from period-to-period and are dependent on market forces as well as jurisdictional tax regulations 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. 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 | ||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||
Net (loss) income | $ (2,642) | $ 4,276 | $ 2,322 | |||
Interest expense, net | 579 | 597 | 407 | |||
(Benefit) provision for income taxes | (704) | 538 | 307 | |||
Depreciation and amortization of software and intangible assets | 2,222 | 2,095 | 1,904 | |||
EBITDA | (545) | 7,506 | 4,940 | |||
Share-based compensation | 3,062 | 2,875 | 2,517 | |||
Restructuring and other nonrecurring expenses | 256 | — | 343 | |||
Adjusted EBITDA | $ 2,773 | $ 10,381 | $ 7,800 | |||
Adjusted EBITDA Margin | 4.7 % | 13.4 % | 11.3 % |
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 | ||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||
GAAP gross profit | $ 29,242 | $ 39,660 | $ 33,439 | |||
Share-based compensation expense | 59 | 56 | 50 | |||
Amortization of capitalized software costs | 648 | 599 | 370 | |||
Non-GAAP gross profit | $ 29,949 | $ 40,315 | $ 33,859 | |||
Non-GAAP gross margin | 50.3 % | 52.1 % | 48.9 % | |||
GAAP research and development expense | $ 13,008 | $ 14,262 | $ 11,440 | |||
Share-based compensation expense | 1,388 | 1,269 | 1,011 | |||
Restructuring and other nonrecurring expense | 256 | — | — | |||
Non-GAAP research and development expense | $ 11,364 | $ 12,993 | $ 10,429 | |||
GAAP sales and marketing expense | $ 11,528 | $ 11,670 | $ 10,842 | |||
Share-based compensation expense | 728 | 700 | 578 | |||
Restructuring and other nonrecurring expenses | — | — | 166 | |||
Non-GAAP sales and marketing expense | $ 10,800 | $ 10,970 | $ 10,098 | |||
GAAP general and administrative expense | $ 5,836 | $ 6,667 | $ 6,958 | |||
Share-based compensation expense | 887 | 850 | 878 | |||
Restructuring and other nonrecurring expenses | — | — | 177 | |||
Non-GAAP general and administrative expense | $ 4,949 | $ 5,817 | $ 5,903 | |||
GAAP depreciation and amortization | $ 1,573 | $ 1,496 | $ 1,534 | |||
Amortization of acquired intangibles | 375 | 374 | 419 | |||
Non-GAAP depreciation and amortization | $ 1,198 | $ 1,122 | $ 1,115 | |||
GAAP operating (loss) income | $ (2,703) | $ 5,565 | $ 2,665 | |||
Share-based compensation expense | 3,062 | 2,875 | 2,517 | |||
Amortization of capitalized software costs | 648 | 599 | 370 | |||
Amortization of acquired intangibles | 375 | 374 | 419 | |||
Restructuring and other nonrecurring expenses | 256 | — | 343 | |||
Non-GAAP operating income | $ 1,638 | $ 9,413 | $ 6,314 | |||
GAAP pre-tax (loss) income | $ (3,346) | $ 4,814 | $ 2,629 | |||
Share-based compensation expense | 3,062 | 2,875 | 2,517 | |||
Amortization of capitalized software costs | 648 | 599 | 370 | |||
Amortization of acquired intangibles | 375 | 374 | 419 | |||
Restructuring and other nonrecurring expenses | 256 | — | 343 | |||
Non-GAAP pre-tax income | $ 995 | $ 8,662 | $ 6,278 | |||
GAAP (benefit) provision for income taxes | $ (704) | $ 538 | $ 307 | |||
Tax rate change | (147) | 28 | (54) | |||
Tax impacts of share vesting | 18 | (99) | — | |||
Tax effect of Non-GAAP adjustments | (868) | (770) | (730) | |||
All other discrete items | 200 | (472) | (150) | |||
Non-GAAP provision for income taxes | $ 93 | $ 1,851 | $ 1,241 | |||
Non-GAAP ETR | 9.4 % | 21.4 % | 19.8 % | |||
GAAP net (loss) income | $ (2,642) | $ 4,276 | $ 2,322 | |||
Share-based compensation expense | 3,062 | 2,875 | 2,517 | |||
Amortization of capitalized software costs | 648 | 599 | 370 | |||
Amortization of acquired intangibles | 375 | 374 | 419 | |||
Restructuring and other nonrecurring expenses | 256 | — | 343 | |||
Non-GAAP adjustments to tax | 71 | (544) | (204) | |||
Tax effect of Non-GAAP adjustments | (868) | (770) | (730) | |||
Non-GAAP net income | $ 902 | $ 6,811 | $ 5,037 | |||
Non-GAAP fully weighted basic shares | 27,603 | 27,397 | 26,964 | |||
Non-GAAP fully weighted diluted shares | 28,279 | 28,314 | 27,586 | |||
Non-GAAP net income per Non-GAAP basic share | $ 0.03 | $ 0.25 | $ 0.19 | |||
Non-GAAP net income per Non-GAAP diluted share | $ 0.03 | $ 0.24 | $ 0.18 |
Certain revisions were made within operating expenses in prior periods to conform to the current period. These revisions had no impact to operating income.
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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SOURCE Cambium Networks
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