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CST: 17/11/2019 07:02:34   

Cambium Networks Reports Second Quarter 2019 Financial Results

100 Days ago

  • Record revenues of $69.2 million, up 13% year-over-year
  • Wi-Fi revenues increased 24% year-over-year, up 51% sequentially
  • Gross margin of 49.6%, non-GAAP gross margin of 50.1%
  • Cash provided by operating activities of $6.0 million
  • Adjusted EBITDA(1) of $8.1 million or 11.8% of revenues
  • Closed on tuck-in acquisition of Xirrus during third quarter 2019 to accelerate growth in the enterprise business during 2020

ROLLING MEADOWS, Ill., Aug. 08, 2019 (GLOBE NEWSWIRE) -- Cambium Networks Corporation (“Cambium Networks”) (NASDAQ: CMBM), a leading provider of wireless broadband networking infrastructure solutions, today announced financial results for the second quarter ended June 30, 2019.

  GAAP   Non-GAAP (1)
(in millions, except percentages) Q2 2019   Q1 2019   Q2 2018   Q2 2019   Q1 2019   Q2 2018
Revenues $ 69.2     $ 68.1     $ 61.0     $ 69.2     $ 68.1     $ 61.0  
Gross margin   49.6 %     46.7 %     48.0 %     50.1 %     46.8 %     48.2 %
Operating margin   (13.6 )%     6.9 %     4.7 %     10.3 %     7.4 %     6.9 %
Adjusted EBITDA margin               11.8 %     8.9 %     8.8 %
 
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 of 2019.

“We are pleased to deliver double-digit year-over-year revenue growth during the second quarter with better than expected gross margin and strong cash generation,” said Atul Bhatnagar, president and CEO. “As we look forward, Cambium Networks is very well positioned to accelerate our fixed wireless broadband and enterprise Wi-Fi businesses as customers move from pilot to full-scale deployments.”

Bhatnagar continued, “Becoming a public company is a significant step in Cambium Networks journey as we improve our capital structure, positioning the company for continued growth, and strengthening our technology portfolio. Cambium Networks transformation will continue as we capitalize on the broader use of 5G like technologies, such as our proven Massive MIMO technology and Wi-Fi 6, and monetize our product portfolio with value-added software platforms.”

Revenues for the second quarter 2019 were a record $69.2 million, an increase of $1.1 million compared to $68.1 million for the first quarter 2019, driven by strong growth in the enterprise Wi-Fi business.  Revenues for the second quarter 2019 increased $8.1 million year-over-year, as a result of growth in both Wi-Fi and Point-to-MultiPoint products.  GAAP gross margin for the second quarter 2019 was 49.6%, compared to 46.7% for the first quarter 2019, and 48.0% for the second quarter 2018. GAAP operating loss for the second quarter 2019 was $9.4 million, which included a $16.1 million charge for share-based compensation expense, compared to operating income of $4.7 million in the first quarter 2019, and operating income of $2.9 million during the second quarter 2018.  GAAP net loss for the second quarter 2019 was $20.4 million, or a loss of $1.47 per diluted share.

Non-GAAP gross margin for the second quarter 2019 was 50.1%, compared to 46.8% for the first quarter 2019, and 48.2% for the second quarter 2018. Non-GAAP operating income for the second quarter 2019 was $7.1 million, compared to $5.1 million for the first quarter 2019, and $4.2 million for the second quarter 2018.  Non-GAAP net income for the second quarter 2019 was $3.9 million, or $0.15 per diluted share, compared to $2.2 million, or $0.16 per diluted share for the first quarter 2019, and $1.7 million, or $0.12 per diluted share, for the second quarter 2018. 

For the second quarter 2019, adjusted EBITDA was $8.1 million or 11.8% of revenues, compared to adjusted EBITDA of $6.0 million, or 8.9% of revenues for the first quarter 2019, and $5.3 million or 8.8% of revenues for the second quarter 2018.

Cash provided by operating activities was $6.0 million for the second quarter 2019, due primarily to improved collections, compared to $3.3 million for the first quarter 2019, and net cash used by operating activities of $0.5 million for the second quarter 2018. Cash totaled $71.2 million as of June 30, 2019, an increase of $67.4 million from the first quarter 2019, and $67.3 million higher than the second quarter 2018. The increase in cash balance for the second quarter 2019 was primarily the result of net proceeds of $66.0 million from the IPO.

Second Quarter 2019 Highlights

  • Completed Initial Public Offering (IPO) raising net proceeds of $66.0 million.

  • Record revenues of $69.2 million increased 2% from the first quarter 2019 and 13% year-over-year.

  • GAAP gross margin of 49.6%, up 290 basis points compared to 46.7% for the first quarter 2019, and up 160 basis points from 48.0% for the second quarter 2018. 

  • Non-GAAP gross margin of 50.1%, up 330 basis points compared to 46.8% for the first quarter 2019, and up 190 basis points from 48.2% for the second quarter 2018. 

  • Net loss $20.4 million, non-GAAP net income $3.9 million.

  • Adjusted EBITDA of $8.1 million or 11.8% of revenues, compared to $6.0 million or 8.9% of revenues for the first quarter 2019 and $5.3 million or 8.8% of revenues for the second quarter 2018.

  • Announced cnHeat network planning subscription service to provide a LiDAR-based heat map coverage model of locations that are available for fixed wireless broadband connectivity.

  • Extended the ePMP 3000 MU-MIMO platform with the addition of three new ePMP™ wireless broadband solutions for service providers, enterprises, and industrial operators. 
  • Increased new channel partners by over 2,000, an increase of 51% year-over-year.

  • Added Jenne, Inc. as a North American enterprise distribution partner.

Third Quarter 2019 Financial Outlook
Taking into account the company’s current visibility, and incorporating the acquisition of Xirrus (excluding any one-time charges affecting the acquisition), the financial outlook as of August 8, 2019 for the third quarter ending September 30, 2019 is expected to be as follows:

  • GAAP revenues between $67-$71 million

  • GAAP gross margin between 47.8-49.0%; and non-GAAP gross margin between 47.9-49.1%

  • GAAP operating income between $3.5-$5.0 million; and non-GAAP operating income between $5.0-$6.5 million

  • GAAP net income between $1.7-$2.8 million; and non-GAAP net income between $2.8-$3.9 million

  • Adjusted EBITDA between $6.0-$7.3 million; and adjusted EBITDA margin between 9-10%

  • GAAP taxes between 19-21%; and a non-GAAP effective tax rate of approximately 17-19%

  • Approximately 25.6 million weighted average diluted shares outstanding

Cash requirements are expected to be as follows:

  • Paydown of debt: $30.7 million

  • Past management fee payable to Vector Capital: $5.6 million

  • Offering expenses and D&O insurance: approximately $6 million

  • Interest expense: approximately $1.5 million

  • Capital expenditures: $1.2-$1.3 million

Cambium Networks financial outlook includes the Xirrus acquisition (excluding any one-time charges affecting the acquisition), but does not include the potential impact of any possible future financial transactions, pending legal matters, restructuring, or other transactions.  Accordingly, Cambium Networks only includes such items in the company’s financial outlook to the extent they are reasonably certain; however, actual results may differ materially from the outlook.

Conference Call and Webcast

Cambium Networks will host a live webcast and conference call to discuss its financial results at 4:30 p.m. Eastern Time today, August 8, 2019. To access the live conference call by phone, listeners should dial +1-877-288-4394 in the U.S. or Canada and +1-470-495-9483 for international callers. To join the live webcast, listeners should access the investor page of Cambium Networks website at https://investors.cambiumnetworks.com/. Following the live webcast, a replay will be available on the investor page of Cambium Networks website for a period of one year. A replay of the conference call will be available for 48 hours soon after the call by phone by dialing +1-855-859-2056 in the U.S. or Canada and +1-404-537-3406 for international callers, using the conference access code: 1193698.

About Cambium Networks

Cambium Networks provides wireless broadband networking infrastructure solutions for network operators, including medium-sized wireless Internet service providers, enterprises and government agencies.  Cambium’s scalable, reliable and high-performance solutions create a purpose-built wireless fabric which connects people, places and things across distances ranging from two meters to more than 100 kilometers, indoors and outdoors, using licensed and unlicensed spectrum, at attractive economics. Headquartered outside Chicago and with R&D centers in the U.S., U.K. and India, Cambium Networks sells through a range of trusted global distributors.

Cautionary Note Regarding Forward-Looking Statements

This release contains certain forward-looking statements within the meaning of the federal securities laws. 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.

In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. 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 registration statement on Form S-1 filed with the Securities and Exchange Commission. 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; our inability to predict and respond to emerging technological trends and network operators’ changing needs; our reliance on third-party manufacturers, which subjects us to risks of product delivery delays and reduced control over product costs and quality; our reliance on distributors and value-added resellers for the substantial majority of our sales; the inability of our third-party logistics and warehousing providers to deliver products to our channel partners and network operators in a timely manner; the quality of our support and services offerings; our expectations regarding outstanding litigation; our or our distributors’ and channel partners’ inability to attract new network operators or sell additional products to network operators that currently use our products; the difficulty of comparing or forecasting our financial results on a quarter-by-quarter basis due to the seasonality of our business; our limited or sole source suppliers’ inability to produce third-party components to build our products; the technological complexity of our products, which may contain undetected hardware defects or software bugs; our channel partners’ inability to effectively manage inventory of our products, timely resell our products or estimate expected future demand; credit risk of our channel partners, which could adversely affect their ability to purchase or pay for our products; our inability to manage our growth and expand our operations; unpredictability of sales and revenues due to lengthy sales cycles; our inability to maintain an effective system of internal controls, remediate our material weakness, produce timely and accurate financial statements or comply with applicable regulations; our reliance on the availability of third-party licenses; risks associated with international sales and operations;  current or future unfavorable economic conditions, both domestically and in foreign markets; and our inability to obtain intellectual property protections for our products.

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
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
           
  Three Months Ended
  June 30, 2019   March 31, 2019   June 30, 2018
Revenues $ 69,151     $ 68,112     $ 61,019  
Cost of revenues   34,839       36,322       31,710  
Gross profit   34,312       31,790       29,309  
Gross margin   49.6 %     46.7 %     48.0 %
Operating expenses          
Research and development   15,189       10,482       9,688  
Sales and marketing   14,227       10,218       10,066  
General and administrative   13,063       5,130       4,323  
Depreciation and amortization   1,227       1,281       2,338  
Total operating expenses   43,706       27,111       26,415  
Operating (loss) income   (9,394 )     4,679       2,894  
Operating margin   (13.6 )%     6.9 %     4.7 %
Interest expense   2,301       2,268       2,088  
Other expense   56       134       110  
(Loss) income before income taxes   (11,751 )     2,277       696  
Provision for income taxes   8,623       415       171  
Net (loss) income $ (20,374 )   $ 1,862     $ 525  
           
(Loss) earnings per share          
Basic and diluted $ (1.47 )   $ 0.14     $ 0.04  
Weighted-average number of shares outstanding to  compute net (loss) earnings per share          
Basic and diluted   13,865,111       13,600,411       13,600,411  
           
Share-based compensation included in costs  and expenses:          
Cost of revenues $ 182     $     $  
Research and development   4,863              
Sales and marketing   3,607              
General and administrative   7,426              
Total share-based compensation expense $ 16,078     $     $  


CAMBIUM NETWORKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
       
  June 30, 2019   December 31, 2018
ASSETS (Unaudited)    
Current assets      
Cash $ 71,246     $ 4,441  
Accounts receivable, net of allowance   62,603       60,389  
Inventories, net   36,978       30,710  
Recoverable income taxes         679  
Prepaid expenses   4,064       3,465  
Other current assets   4,138       5,889  
Total current assets   179,029       105,573  
Noncurrent assets      
Property and equipment, net   8,097       7,965  
Software, net   4,110       3,944  
Operating lease assets   7,326        
Intangible assets, net   7,905       8,493  
Goodwill   8,060       8,060  
Deferred tax assets, net   519       8,022  
TOTAL ASSETS $ 215,046     $ 142,057  
LIABILITIES AND EQUITY (DEFICIT)      
Current liabilities      
Accounts payable $ 28,310     $ 23,710  
Accrued liabilities   21,736       18,263  
Employee compensation   6,950       4,377  
Current portion of long-term external debt   9,032       8,836  
Payable to Sponsor   5,750       5,582  
Deferred revenues   2,203       2,770  
Other current liabilities   5,787       2,761  
Total current liabilities   79,768       66,299  
Noncurrent liabilities      
Long-term external debt   89,371       94,183  
Deferred revenues   1,916       1,541  
Noncurrent operating lease liabilities   6,058        
Other noncurrent liabilities         605  
Total liabilities   177,113       162,628  
Shareholders' equity (deficit)      
Share capital; $0.0001 par value; 500,000,000 shares authorized at December 31, 2018 and June 30, 2019; 77,179 shares issued and outstanding at December 31, 2018 and 25,726,629 issued and 25,632,246 outstanding at June 30, 2019   3        
Additional paid in capital   103,543       772  
Capital contribution         24,651  
Treasury shares, at cost, 0 shares at December 31, 2018 and 94,383 shares at June 30, 2019   (1,133 )      
Accumulated deficit   (64,285 )     (45,773 )
Accumulated other comprehensive income (loss)   (195 )     (221 )
Total shareholders’ equity (deficit)   37,933       (20,571 )
TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 215,046     $ 142,057  


CAMBIUM NETWORKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
       
  Three Months Ended
  June 30, 2019   June 30, 2018
Cash flows from operating activities:  
Net (loss) income $ (20,374 )   $ 525  
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:      
Depreciation and amortization   1,393       2,431  
Amortization of debt issuance costs   177       143  
Share-based compensation   16,078        
Deferred income taxes   7,198       346  
Other   (429 )     202  
Change in assets and liabilities:      
Receivables   1,717       (1,788 )
Inventories   (4,034 )     (1,084 )
Accounts payable   2,736       413  
Accrued employee compensation   346       (180 )
Other assets and liabilities   1,146       (1,470 )
Net cash provided by (used in) operating activities   5,954       (462 )
Cash flows from investing activities:      
Purchase of property and equipment   (579 )     (1,482 )
Purchase of software   (332 )     (424 )
Net cash used in investing activities   (911 )     (1,906 )
Cash flows from financing activities:      
Proceeds from issuance of revolver debt         2,962  
Repayment of term loan   (2,375 )     (1,125 )
Payment of debt issuance costs   (208 )      
Proceeds from initial public offering, net of underwriting commissions and fees   65,988        
Payment of deferred offering costs   (1,007 )    
Net cash provided by financing activities   62,398       1,837  
Effect of exchange rate on cash   4       (29 )
Net increase (decrease) in cash   67,445       (560 )
Cash, beginning of period   3,801       4,492  
Cash, end of period $ 71,246     $ 3,932  
       
Supplemental disclosure of cash flow information:      
Income taxes paid $ 155     $ 279  
Interest paid $ 1,949     $ 1,763  
Significant non-cash activities:      
Issuance of shares for unreturned capital and accumulated yield $ 49,252     $  
Deferred offering costs included in accrued liabilities $ 3,246     $  


CAMBIUM NETWORKS CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands)
(Unaudited)
           
REVENUES BY PRODUCT TYPE          
  Three Months Ended
  June 30, 2019   March 31, 2019   June 30, 2018
Point-to-Multi-Point $ 41,730   $ 42,327   $ 35,068
Point-to-Point   17,830     19,634     17,748
Wi-Fi   8,430     5,586     6,810
Other   1,161     565     1,393
Total Revenues $ 69,151   $ 68,112   $ 61,019
           
REVENUES BY REGION          
  Three Months Ended
  June 30, 2019   March 31, 2019   June 30, 2018
North America $ 30,056   $ 34,364   $ 27,339
Europe, Middle East and Africa   22,994     21,970     17,275
Central and Latin America   8,420     7,099     8,036
Asia Pacific   7,681     4,679     8,369
Total Revenues $ 69,151   $ 68,112   $ 61,019

Use of non-GAAP (Adjusted) Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide additional financial metrics that are not prepared in accordance with GAAP (non-GAAP), including Adjusted EBITDA, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP operating margin, non-GAAP pre-tax income, non-GAAP provision for income taxes, non-GAAP net income, and non-GAAP fully weighted basic and diluted shares. Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation and to evaluate our financial performance. We believe that these non-GAAP financial measures help us to identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of the non-GAAP financial measures.

Accordingly, 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 useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.  Excluding these non-GAAP measures eliminate the variability caused by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used, the variability caused by purchase accounting and provide a more relevant measure of operating performance. 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) Sponsor fees associated with advisory services, and (v) share-based compensation expense. 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 Sponsor fees, in order to eliminate the impact on reported performance caused by these fees, which are related to our past ownership structure. 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.

Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP operating margin, and non-GAAP net income are used as a supplement to our unaudited 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, 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. Management may issue different types of awards, including share options, restricted share awards and restricted share units, as well as awards with performance or other market characteristics, 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.  In addition, in the three-month period ended June 30, 2019, Cambium Networks incurred a one-time share-based compensation expense of $16.1 million in connection with (i) the recognition of deferred share-based compensation expense and (ii) the issuance of 2,172,000 share options, each upon the completion of our initial public offering.

  • Amortization of acquired intangibles includes customer relationships, unpatented technology, patents, software, and trademarks.

  • Amortization of capitalized software costs include capitalized research and development activities amortized over their useful life and included in cost of revenues. 

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, one-time and ongoing impacts from the company's valuation allowance recognized in the quarter ended June 30, 2019, and one-time tax impacts from share-based compensation expense incurred upon the completion of our initial public offering as noted above. Cambium Networks excludes these amounts to more closely approximate the company’s ongoing effective tax rate (ETR) after adjusting for one-time or unique reoccurring items. The associated non-GAAP effective tax rate is also applied to the gross amount of non-GAAP adjustments for purposes 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 to 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 (loss) 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, 2019   March 31, 2019   June 30, 2018
Net (loss) income $ (20,374 )   $ 1,862     $ 525  
Interest expense, net   2,301       2,268       2,088  
Provision for income taxes   8,623       415       171  
Depreciation and amortization   1,393       1,360       2,431  
EBITDA   (8,057 )     5,905       5,215  
Share-based compensation expense   16,078              
Sponsor management fee   125       125       125  
Adjusted EBITDA $ 8,146     $ 6,030     $ 5,340  
           
Adjusted EBITDA Margin   11.8 %     8.9 %     8.8 %


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, 2019   March 31, 2019   June 30, 2018
GAAP gross profit $ 34,312     $ 31,790     $ 29,309  
Share-based compensation expense   182              
Amortization of capitalized software costs   166       79       93  
Non-GAAP gross profit $ 34,660     $ 31,869     $ 29,402  
Non-GAAP gross margin   50.1 %     46.8 %     48.2 %
           
GAAP research and development expense $ 15,189     $ 10,482     $ 9,688  
Share-based compensation expense   4,863              
Non-GAAP research and development expense $ 10,326     $ 10,482     $ 9,688  
           
GAAP sales and marketing expense $ 14,227     $ 10,218     $ 10,066  
Share-based compensation expense   3,607              
Non-GAAP sales and marketing expense $ 10,620     $ 10,218     $ 10,066  
           
GAAP general and administrative expense $ 13,063     $ 5,130     $ 4,323  
Share-based compensation expense   7,426              
Non-GAAP general and administrative expense $ 5,637     $ 5,130     $ 4,323  
           
GAAP depreciation and amortization $ 1,227     $ 1,281     $ 2,338  
Amortization of acquired intangibles   293       293       1,201  
Non-GAAP depreciation and amortization $ 934     $ 988     $ 1,137  
           
GAAP operating income $ (9,394 )   $ 4,679     $ 2,894  
Share-based compensation expense   16,078              
Amortization of capitalized software costs   166       79       93  
Amortization of acquired intangibles   293       293       1,201  
Non-GAAP operating income $ 7,143     $ 5,051     $ 4,188  
           
GAAP pre-tax income $ (11,751 )   $ 2,277     $ 696  
Share-based compensation expense   16,078              
Amortization of capitalized software costs   166       79       93  
Amortization of acquired intangibles   293       293       1,201  
Non-GAAP pre-tax income $ 4,786     $ 2,649     $ 1,990  
           
GAAP provision for income taxes $ 8,623     $ 415     $ 171  
Valuation allowance impacts   8,238              
Tax impacts of share vesting   2,530              
Tax effect of share-based compensation expense and amortization of acquired intangibles, using non-GAAP ETR   (3,010 )     (67 )     (218 )
All other discrete items   (6 )     6       54  
Non-GAAP provision for income taxes $ 871     $ 476     $ 335  
Non-GAAP ETR   18.2 %     18.0 %     16.8 %
           
GAAP net (loss) income $ (20,374 )   $ 1,862     $ 525  
Share-based compensation expense   16,078              
Amortization of capitalized software costs   166       79       93  
Amortization of acquired intangibles   293       293       1,201  
Non-GAAP adjustments to tax   10,761       6       54  
Tax effect of share-based compensation expense and amortization of acquired intangibles and capitalized software   (3,010 )     (67 )     (218 )
Non-GAAP net income $ 3,915     $ 2,173     $ 1,655  
           
Non-GAAP fully weighted basic and diluted shares   25,632       13,600       13,600  
           
Non-GAAP net income per Non-GAAP fully weighted  basic and diluted shares $ 0.15     $ 0.16     $ 0.12  


Investor Inquiries:

Peter Schuman, IRC
Sr. Director Investor Relations
Cambium Networks
+1 (847) 264-2188
peter.schuman@cambiumnetworks.com

Media Inquiries:
Sara Black
Vice President
Bospar
+1 (213) 618-1501
sara@bospar.com

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