Cambium Networks to Delay Form 10-K Filing for Fiscal Year 2024

Rhea-AI Summary

Cambium Networks (NASDAQ: CMBM) has announced a delay in filing its Form 10-K for fiscal year 2024, citing the need for additional time to finalize financial statements and internal control assessments. The company has identified material weaknesses in internal controls related to Allowance for Credit Losses, Customer Incentives, and Information Technology General Controls.

For FY2024, Cambium expects to report:

• Revenue of approximately $166.0 million, down from $220.2 million in 2023
• Net loss of about $92.0 million ($3.29 per diluted share), compared to $77.4 million loss in 2023
• Q4 2024 revenue of approximately $34.0 million, versus $40.2 million in Q4 2023
• Q4 2024 net loss of about $47.0 million ($1.66 per diluted share)

The results include $27.0 million in non-cash impairment charges. The company will disclose substantial doubt regarding its ability to continue as a going concern in the upcoming 10-K filing.

Positive

• None.

Negative

• Revenue declined 24.6% to $166.0M in FY2024 from $220.2M in FY2023
• Net loss increased to $92.0M in FY2024 from $77.4M in FY2023
• Q4 2024 revenue dropped 15.4% to $34.0M year-over-year
• $27.0M in non-cash impairment charges due to weak demand
• Material weaknesses identified in internal controls
• Substantial doubt about ability to continue as going concern

Insights

Financial Reporting Specialist

Cambium Networks' announcement contains several critical red flags that significantly impact investor outlook. The delay in filing its 10-K alongside multiple material weaknesses in internal controls reveals fundamental financial reporting problems. Most concerning is the disclosure of "substantial doubt regarding the Company's ability to continue as a going concern" - formal accounting language indicating the company may be unable to meet financial obligations.

The preliminary financial data confirms severe deterioration: $166.0 million in annual revenue represents a 24.6% year-over-year decline, while net losses expanded to $92.0 million ($3.29 per share) from $77.4 million in 2023. Fourth quarter results continued this downward trajectory with revenue falling to $34.0 million from $40.2 million year-over-year.

The $27.0 million in non-cash impairment charges directly reflects management's diminished confidence in future business prospects, attributed to "weakened forecast demand and competitive market pressures." The specific material weaknesses in Allowance for Credit Losses and Customer Incentives suggest potential revenue recognition and accounts receivable collection issues that could further impact liquidity.

For investors, these developments create a perfect storm: operational decline, questionable financial reporting reliability, and a formal warning about business continuity. At the current $20 million market capitalization, the market is pricing in significant risk of capital restructuring or potential bankruptcy proceedings if immediate improvements aren't achieved.

Corporate Governance Analyst

The identification of new material weaknesses in Cambium Networks' internal controls represents a severe corporate governance failure that compounds the company's operational challenges. Material weaknesses in Allowance for Credit Losses, Customer Incentives, and Information Technology General Controls indicate fundamental deficiencies in financial oversight that extend beyond the previously disclosed issues in their September 2024 quarterly report.

These control failures create substantial uncertainty regarding the reliability of Cambium's financial reporting. When combined with a delayed 10-K filing, investors face a significant information gap about the company's true financial position. The control weaknesses specifically around credit losses and customer incentives suggest potential issues with how revenue and receivables are being recorded and collected - critical areas for a company already facing financial distress.

While management has "initiated measures" to remediate these weaknesses with Audit Committee oversight, the timing is concerning - addressing complex control deficiencies typically requires multiple quarters, during which financial reporting reliability remains questionable. This governance failure comes at the worst possible moment given the going concern warning and deepening operational losses.

The effectiveness of board oversight must be questioned given the expansion of material weaknesses rather than their resolution. With the 10-K filing delayed indefinitely pending "completion of the financial reporting process," investors face extended uncertainty about when reliable information will become available, further complicating risk assessment during this critical period.

HOFFMAN ESTATES, Ill., March 31, 2025 /PRNewswire/ -- Cambium Networks Corporation ("Cambium Networks" or the "Company") (NASDAQ: CMBM), a leading provider of wireless and wired networking infrastructure solutions, today announced that it has filed a Notification of Late Filing on Form 12b-25 with respect to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Cambium Networks has determined that it is unable to file, without unreasonable effort or expense, its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 by the prescribed filing due date because the Company requires additional time to finalize the Company's consolidated financial statements and finalize its assessment of internal control over financial reporting and related disclosures.

In addition to the material weaknesses disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, the Company has identified certain material weaknesses in its preliminary assessment of internal control over financial reporting for the fiscal year ended December 31, 2024 related to Allowance for Credit Losses, Customer Incentives, and Information Technology General Controls.  The Company has initiated and will continue to implement measures designed to improve its internal control over financial reporting to remediate these material weaknesses with oversight from the Audit Committee of the Board of Directors and assistance from its external advisors, as well as implementing additional processes and controls to address the underlying causes associated with the material weaknesses.

The Company expects to issue its full financial results for the year ended December 31, 2024 when the financial reporting process along with the review of the results and the related audit are completed.

Comparison of Anticipated Results

• For the year ended December 31, 2024, the Company expects to report revenues of approximately $166.0 million, compared to revenues of $220.2 million for the prior year ended December 31, 2023. The Company expects to report a net loss of approximately $92.0 million, or $3.29 per diluted share for the year ended December 31, 2024, compared to a net loss of $77.4 million, or $2.81 per diluted share, for the prior year ended December 31, 2023.
  
  
• For the quarter ended December 31, 2024, the Company expects to report revenues of approximately $34.0 million, compared to revenues of $40.2 million for the quarter ended December 31, 2023. The Company expects to report a net loss of approximately $47.0 million, or $1.66 per diluted share for the quarter ended December 31, 2024, compared to a net loss of $52.9 million, or $1.91 per diluted share, for the quarter ended December 31, 2023.
  
  
• Included in net losses for the quarter and year ended December 31, 2024 are approximately $27.0 million of non-cash charges related to the impairment of goodwill, long-life assets, and other intangible assets. These impairments were driven by weakened forecast demand and competitive market pressures.

The Company anticipates that its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 will include disclosures around the substantial doubt regarding the Company's ability to continue as a going concern.

The foregoing financial information is preliminary, unaudited and subject to change pending the filing of the Form 10-K for the fiscal year ended December 31, 2024.

Forward-Looking Statements
Certain matters discussed constitute forward-looking statements within the meaning of the federal securities laws. All statements contained in this notification that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding anticipated results for the quarter and full year ended December 31, 2024, the material weaknesses in the Company's internal control over financial reporting as of December 31, 2024, and the Company's expectations regarding the timing of the filing of the Form 10-K. These forward-looking statements are based on management's current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from expectations include, but are not limited to the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; the potential for additional material weaknesses in the Company's internal controls over financial reporting or other potential control deficiencies of which the Company is not currently aware or which have not been detected; the Company's ability to continue as a going concern; the risk that the completion and filing of the Form 10-K will take longer than expected; additional information that may arise during the finalization of the Form 10-K; and the risks discussed in detail in "Item 1A. Risk Factors" of the Company's most recent Annual Report on Form 10-K, as updated by its other filings with the SEC. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

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 make connectivity that just works.

Contacts: 
Investor Relations
Cambium Networks
investors@Cambiumnetworks.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/cambium-networks-to-delay-form-10-k-filing-for-fiscal-year-2024-302416011.html

SOURCE Cambium Networks

FAQ

What caused Cambium Networks (CMBM) to delay its 2024 10-K filing?

CMBM delayed filing due to material weaknesses in internal controls related to Allowance for Credit Losses, Customer Incentives, and IT General Controls, requiring additional time to finalize financial statements.

How much revenue did CMBM report for fiscal year 2024?

Cambium Networks expects to report approximately $166.0 million in revenue for FY2024, down from $220.2 million in 2023.

What is the expected net loss for CMBM in Q4 2024?

CMBM expects to report a Q4 2024 net loss of approximately $47.0 million, or $1.66 per diluted share.

Why did CMBM record $27.0 million in impairment charges for 2024?

The impairment charges were due to weakened forecast demand and competitive market pressures, affecting goodwill, long-life assets, and other intangible assets.

What is CMBM's going concern status as of 2024?

The company will disclose substantial doubt about its ability to continue as a going concern in its upcoming 10-K filing.