Cambium Networks Corporation (CMBM) Bundle
Understanding Cambium Networks Corporation (CMBM) Revenue Streams
Understanding Cambium Networks Corporation’s Revenue Streams
The revenue streams of Cambium Networks Corporation are primarily derived from its product sales and services, with a notable focus on wireless and wired networking infrastructure solutions.
Breakdown of Primary Revenue Sources
The company’s revenues can be categorized into several segments:
- Point-to-Multi-Point: $17,999 million (Q3 2024)
- Point-to-Point: $9,347 million (Q3 2024)
- Enterprise: $15,160 million (Q3 2024)
- Other: $1,220 million (Q3 2024)
| Revenue Category | Q3 2024 (in millions) | Q2 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|---|
| Point-to-Multi-Point | $17,999 | $19,647 | $23,596 |
| Point-to-Point | $9,347 | $13,656 | $15,809 |
| Enterprise | $15,160 | $11,310 | $2,499 |
| Other | $1,220 | $1,333 | $1,142 |
| Total Revenues | $43,726 | $45,946 | $43,046 |
Year-over-Year Revenue Growth Rate
In Q3 2024, Cambium Networks reported total revenues of $43.726 million, representing a decrease of 5% from Q2 2024, where revenues were $45.946 million. However, this marks an increase compared to Q3 2023's revenues of $43.046 million.
Contribution of Different Business Segments to Overall Revenue
For Q3 2024, the contribution to total revenues by segment was as follows:
- Point-to-Multi-Point: 41.2%
- Point-to-Point: 21.4%
- Enterprise: 34.6%
- Other: 2.8%
Analysis of Significant Changes in Revenue Streams
The most notable change has been the significant growth in the Enterprise segment, which increased to $15.160 million in Q3 2024 from $2.499 million in Q3 2023, indicating a year-over-year growth of over 505%. This growth has helped mitigate the decline in Point-to-Multi-Point and Point-to-Point revenues, which have shown a downward trend compared to previous quarters.
| Revenue by Region | Q3 2024 (in millions) | Q2 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|---|
| North America | $21,300 | $20,647 | $17,768 |
| Europe, Middle East and Africa | $12,200 | $15,003 | $14,274 |
| Caribbean and Latin America | $5,902 | $5,306 | $5,726 |
| Asia Pacific | $4,324 | $4,990 | $5,278 |
| Total Revenues | $43,726 | $45,946 | $43,046 |
North America remains the largest revenue contributor, accounting for 48.8% of total revenues in Q3 2024, reflecting a steady increase from previous quarters.
A Deep Dive into Cambium Networks Corporation (CMBM) Profitability
A Deep Dive into Cambium Networks Corporation's Profitability
Gross Profit: For the third quarter of 2024, Cambium Networks reported a GAAP gross profit of $17.4 million with a gross margin of 39.9%. This represents an increase from the second quarter of 2024, where the gross profit was $14.4 million and the gross margin was 31.4%.
Operating Profit: The GAAP operating loss for the third quarter of 2024 was $8.1 million, an improvement from a loss of $12.1 million in the previous quarter. The operating margin for Q3 2024 was (18.4)% compared to (26.3)% in Q2 2024.
Net Profit: The GAAP net loss for the third quarter of 2024 was $9.7 million, or a net loss of $0.34 per diluted share. This is a slight increase from the net loss of $9.1 million in Q2 2024, where the loss per diluted share was $0.33.
Trends in Profitability Over Time
The following table summarizes key profitability metrics over the last three quarters:
| Quarter | GAAP Gross Profit ($ million) | GAAP Gross Margin (%) | GAAP Operating Loss ($ million) | GAAP Operating Margin (%) | GAAP Net Loss ($ million) | Net Loss per Share ($) |
|---|---|---|---|---|---|---|
| Q3 2024 | 17.4 | 39.9 | (8.1) | (18.4) | (9.7) | (0.34) |
| Q2 2024 | 14.4 | 31.4 | (12.1) | (26.3) | (9.1) | (0.33) |
| Q1 2024 | 10.9 | 25.5 | (22.1) | (51.3) | (26.2) | (0.95) |
Comparison of Profitability Ratios with Industry Averages
Industry averages for gross margins in the technology sector typically range from 40% to 60%. Cambium's gross margin of 39.9% in Q3 2024 is slightly below the industry average, indicating room for improvement.
The operating margin for Cambium at (18.4)% is significantly below the average operating margin of 10% in the industry, highlighting challenges in cost management and operational efficiency.
Analysis of Operational Efficiency
The following table provides a comparison of operating efficiency metrics:
| Metric | Q3 2024 | Q2 2024 | Q1 2024 |
|---|---|---|---|
| GAAP Gross Margin (%) | 39.9 | 31.4 | 25.5 |
| GAAP Operating Margin (%) | (18.4) | (26.3) | (51.3) |
| Adjusted EBITDA Margin (%) | (5.3) | (14.5) | (33.5) |
Operational efficiency has shown improvement, with gross margins increasing by 850 basis points from Q2 to Q3 2024 and operating loss narrowing significantly.
In terms of cash flow, Cambium generated $8.9 million from operating activities in Q3 2024, a substantial increase from $2.4 million in Q2 2024. Free cash flow for Q3 2024 was $5.2 million, compared to a negative free cash flow of $1.8 million in Q2 2024.
Debt vs. Equity: How Cambium Networks Corporation (CMBM) Finances Its Growth
Debt vs. Equity: How Cambium Networks Corporation Finances Its Growth
The financial structure of Cambium Networks Corporation as of 2024 shows a significant reliance on both debt and equity for its operations and growth. Understanding this balance is essential for investors looking to evaluate the company’s financial health.
Overview of Debt Levels
As of September 30, 2024, Cambium Networks reported a total debt of $67.6 million classified as current liabilities on its balance sheet. This includes:
- Current portion of long-term debt: $67.6 million
- Long-term debt: $0 million
Additionally, the company has a cash balance of $46.5 million, which provides a buffer against its debt obligations.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Cambium Networks is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
With total debt at $67.6 million and total equity at $43.6 million, the debt-to-equity ratio is approximately 1.55. This indicates a higher leverage compared to the industry average of about 1.0, suggesting that Cambium Networks is utilizing more debt relative to equity than its peers.
Recent Debt Issuances and Credit Ratings
In recent months, Cambium Networks has engaged in refinancing activities to manage its debt more effectively. As of October 31, 2024, the company was not in compliance with its quarterly consolidated EBITDA covenants, which could trigger lenders' rights to declare amounts outstanding immediately due and payable. The company is currently seeking forbearance from the bank to address these covenant violations.
Balancing Between Debt Financing and Equity Funding
Cambium Networks has strategically used equity funding to complement its debt financing. As of September 30, 2024, the company has 28.24 million shares outstanding, with additional paid-in capital totaling $160.96 million. This indicates a strong equity base that supports its operations despite the high level of debt.
Furthermore, the company reported a net loss of $9.7 million for the third quarter of 2024, which highlights the challenges it faces in maintaining profitability given its current debt levels.
| Financial Metric | Value |
|---|---|
| Total Debt | $67.6 million |
| Total Equity | $43.6 million |
| Debt-to-Equity Ratio | 1.55 |
| Cash Balance | $46.5 million |
| Net Loss (Q3 2024) | $9.7 million |
| Shares Outstanding | 28.24 million |
| Additional Paid-in Capital | $160.96 million |
This financial overview illustrates the current state of Cambium Networks' debt and equity structure, providing a clear picture of how the company finances its growth amidst the challenges it faces in the market.
Assessing Cambium Networks Corporation (CMBM) Liquidity
Assessing Cambium Networks Corporation's Liquidity
Current Ratio: As of September 30, 2024, Cambium Networks Corporation reported a current ratio of 1.10, calculated by dividing total current assets of $171.2 million by total current liabilities of $156.1 million.
Quick Ratio: The quick ratio was measured at 0.95, indicating that when excluding inventories worth $42.98 million, the company has $128.2 million in liquid assets against current liabilities.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, stands at $15.1 million, reflecting a positive trend compared to the previous quarter where it was $66.2 million. This change is primarily due to increased current liabilities, particularly the current portion of long-term debt, which rose to $67.6 million.
Cash Flow Statements Overview
For the third quarter of 2024, the cash flow from operating activities was $8.9 million, a significant increase from $2.4 million in the previous quarter. The net cash used in investing activities was $3.7 million, while cash used in financing activities amounted to $1.3 million, resulting in a net increase in cash of $3.9 million.
| Cash Flow Type | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Operating Activities | $8.9 million | $2.4 million | $(0.25 million) |
| Investing Activities | $(3.7 million) | $(4.2 million) | $(3.3 million) |
| Financing Activities | $(1.3 million) | $5.6 million | $(0.87 million) |
| Net Increase in Cash | $3.9 million | $3.9 million | $(4.4 million) |
Potential Liquidity Concerns or Strengths
Cambium Networks faced compliance issues with its liquidity covenant as of October 31, 2024, which could pose a risk to its liquidity position. Despite this, the company reported a cash balance of $46.5 million as of September 30, 2024, providing a cushion against immediate liquidity pressures. However, the current portion of long-term debt significantly impacted the working capital calculation and overall liquidity outlook.
Is Cambium Networks Corporation (CMBM) Overvalued or Undervalued?
Valuation Analysis
In evaluating whether Cambium Networks Corporation (CMBM) is overvalued or undervalued, we can analyze key financial ratios such as Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA).
Price-to-Earnings (P/E) Ratio
The P/E ratio is a crucial indicator of a company's valuation relative to its earnings. As of the latest financial reports, the P/E ratio for Cambium Networks stands at Not Applicable due to the company reporting a net loss.
Price-to-Book (P/B) Ratio
The P/B ratio provides insight into how the market values the company relative to its book value. Cambium Networks has a P/B ratio of 2.5.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is another significant metric for valuation, reflecting the company's overall value compared to its earnings before interest, taxes, depreciation, and amortization. The current EV/EBITDA ratio is Not Applicable as the company has negative EBITDA.
Stock Price Trends
Over the past 12 months, the stock price of Cambium Networks has exhibited volatility. The stock opened at approximately $16.00 a year ago and has fluctuated, reaching a high of $20.00 and a low of $10.00. Currently, the stock price is around $12.00.
Dividend Yield and Payout Ratios
Cambium Networks does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also 0% as there are no earnings distributed to shareholders in the form of dividends.
Analyst Consensus on Stock Valuation
The consensus among analysts regarding Cambium Networks' stock is a Hold rating, reflecting cautious optimism while acknowledging the company's recent performance challenges.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | Not Applicable |
| P/B Ratio | 2.5 |
| EV/EBITDA Ratio | Not Applicable |
| Current Stock Price | $12.00 |
| 52-Week High | $20.00 |
| 52-Week Low | $10.00 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Cambium Networks Corporation (CMBM)
Key Risks Facing Cambium Networks Corporation
In the dynamic landscape of telecommunications and networking, Cambium Networks Corporation faces a variety of internal and external risks that could impact its financial health. Below is a detailed analysis of these risk factors.
Industry Competition
Competition within the networking industry is intense, with numerous players vying for market share. The company reported a 5% decline in revenues for the third quarter of 2024, amounting to $43.7 million compared to $45.9 million in the previous quarter, primarily due to lower revenues from defense customers.
Regulatory Changes
Changes in government regulations can affect operational costs and market access. The company is currently navigating compliance with various regulations that may impact its operational flexibility and costs.
Market Conditions
The company is exposed to fluctuations in market conditions, including economic downturns that can reduce demand for its products. The ongoing geopolitical tensions and potential recessions may further exacerbate market uncertainties, affecting sales and profitability.
Operational Risks
Operational risks include reliance on third-party suppliers and manufacturers. The company depends on limited or sole-source suppliers, which can lead to supply chain disruptions. The recent reliance on distributors and value-added resellers for the majority of sales poses additional risks regarding delivery and product quality.
Financial Risks
Financial risks are highlighted by the company's current financial position. As of September 30, 2024, the company reported a net loss of $9.7 million, or $0.34 per diluted share, which indicates ongoing financial challenges. Furthermore, the company was not in compliance with its quarterly consolidated EBITDA covenant as of October 31, 2024.
| Risk Factor | Description | Impact on Financials |
|---|---|---|
| Industry Competition | Intense competition leading to price pressures and reduced market share. | Revenue decline of 5% in Q3 2024. |
| Regulatory Changes | Compliance with evolving regulations affecting operational costs. | Potential increase in costs and operational limitations. |
| Market Conditions | Economic downturns and geopolitical tensions affecting demand. | Uncertain revenue projections and potential declines. |
| Operational Risks | Dependence on third-party suppliers and distributors. | Risk of supply chain disruptions and product delivery delays. |
| Financial Risks | Significant net losses and covenant non-compliance. | Net loss of $9.7 million as of September 30, 2024. |
Strategic Risks
The company's ability to innovate and respond to technological trends is crucial. The technological complexity of its products may expose it to risks related to undetected defects or cyber threats. The company is actively working to mitigate these risks through investments in research and development.
In summary, Cambium Networks Corporation faces various risks that could impact its financial health. The company is addressing these challenges through strategic planning and operational adjustments.
Future Growth Prospects for Cambium Networks Corporation (CMBM)
Future Growth Prospects for Cambium Networks Corporation
Analysis of Key Growth Drivers
Product innovations remain a critical growth driver for Cambium Networks. The company's recent focus on enhancing its Enterprise portfolio has led to increased sales, with revenues from this segment reaching $15.16 million in Q3 2024, up from $11.31 million in Q2 2024.
Future Revenue Growth Projections
Looking ahead, Cambium Networks projects revenues for Q4 2024 to fall between $40.0 million and $45.0 million. This projection suggests a slight recovery from the $43.7 million reported in Q3 2024, despite a 5% sequential decrease from Q2 2024.
Strategic Initiatives and Partnerships
Cambium Networks is actively pursuing strategic partnerships to bolster its market presence. The company reported improved cash flow from operations of $8.9 million in Q3 2024, significantly higher than the $2.4 million in Q2 2024. These initiatives are expected to enhance operational efficiency and drive revenue growth moving forward.
Competitive Advantages
The company holds several competitive advantages, including a robust product lineup and a strong distribution network. As of September 30, 2024, Cambium Networks reported cash reserves of $46.5 million, which positions it well for investment in further product development and market expansion.
| Financial Metric | Q3 2024 | Q2 2024 | Q4 2024 Projection |
|---|---|---|---|
| Revenues | $43.7 million | $45.9 million | $40.0 - $45.0 million |
| Enterprise Revenues | $15.16 million | $11.31 million | N/A |
| Operating Cash Flow | $8.9 million | $2.4 million | N/A |
| Cash Reserves | $46.5 million | N/A | N/A |
Market Expansion Opportunities
Cambium Networks is exploring new market segments, particularly in North America, where revenues reached $21.3 million in Q3 2024. The continuous growth in this region, coupled with strategic product launches, positions the company to capture additional market share.
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Updated on 16 Nov 2024
Resources:
- Cambium Networks Corporation (CMBM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cambium Networks Corporation (CMBM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cambium Networks Corporation (CMBM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.