Q1 2021 Cambium Networks Corp Earnings Call

[music].

My name is Abigail and I will be your conference operator today at this time I would like to welcome everyone to the Cambium networks first quarter 2021 financial results Conference call.

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session to ask the question. During the session you will need the press star one on your telephone please limit yourself to one question and one follow up question. Thank you Mr. Peter Schuman senior director of Investor and industry Analyst Relations. He.

May begin your conference. Thank you Abigail welcome and thank you for joining us today for Cambium networks first quarter 2021 financial results conference call and welcome to all of those joining via the webcast of <unk>.

<unk>, our president and CEO and Stephen Cumming, our CFO are here for today's call.

The financial results press release, and CFO commentary referenced on this call are accessible on the Investor page of our website and the press release has been submitted on a form 8-K with the SEC.

Copy of today's prepared remarks will also be available on the investor page at the conclusion of this call as a reminder, today's remarks, including those made during Q&A will contain forward looking statements about the company's outlook and expected performance. These statements are based on current expectations forecasts and assumptions risks and uncertainties could cause actual results.

The differ materially.

Except as required by law Cambium networks does not undertake any obligation to update or revise any forward looking statements for any reason after the date of this presentation, whether as a result of new information future developments to conform these statements to actual results or make changes and cambium expectations or otherwise it is cambium networks.

Policy not to reiterate our financial outlook.

Encourage listeners to review the full risk of list of list of risk factors included in the Safe Harbor statement in today's financial results press release, we.

We will also reference both GAAP and non-GAAP financial measures and specifically note that all sequential and year over year comparisons referenced non-GAAP numbers, except where otherwise noted a reconciliation of non-GAAP measures to GAAP measures is included in the appendix to today's financial results press release, which can be found on the investor page of our website and in today's press release.

Announcing our results turning to the agenda cambium networks, President and CEO of button Augur will provide the key investment highlights for the first quarter 2021, and Stephen Cumming Cambium networks CFO will provide a recap of the financial results for the quarter and our financial outlook for the second quarter and calendar year of 2021, our prepared remark.

Ex will be followed by a Q&A session.

Ill now turn the call over to of tool.

Thank you Peter the.

Momentum continues to build for cambium business as our vision of the high performance, yet affordable global wireless infrastructure leader for broadband communications accelerated during the first quarter 2021.

During the last week of January.

Cambium networks shipped our 9 million radio sales.

Becoming a standalone company.

The interest in fixed wireless broadband solutions is becoming mainstream as performance matches that of fiber.

And the attractive cost of ownership for our.

Our solutions make cambium of competitive and economically superior solution for wireless infrastructure projects around the world.

Sales by increased government spending.

Fixed wireless broadband is a critically important networking infrastructure to connect our local communities.

If it can be of wireless solution it will be of wireless solution.

Because of ease of installation and operations.

We are at the start of the new era of.

End to end wireless speeds equaling the debt of fiber.

Our multi gigabit wireless fabric can deliver fiber performance and reliability at a fraction of the cost.

Our recently launched 60 gigahertz <unk> solution is shipping in volume with increasing demand and.

And our forthcoming fixed five G 28, gigahertz millimeter wave products with proof of concept, arriving during the middle of 2021.

And for all for volume shipments will further accelerate the strength as we reach new customers and enter new markets demanding higher broadband performance at the edge of the network.

For the first time in cambium history will be purposefully compete in urban markets in a meaningful way as the existing networks upgrade infrastructure.

The new high speed networks proliferate with more cost effective technology provided by cambium networks.

Cambium significant new product introductions combined with increased government funding around the world will benefit our financial results for many years into the future.

Turning to the results of first quarter 2021.

We achieved the record revenues of $88 $5 million.

Above the high end of our outlook of between 81% to $85 million.

Non-GAAP diluted EPS of <unk> 41.

Also exceeded the high end of our outlook of between 30 and 34.

Per diluted share.

We delivered these outstanding results as we have transformed cambium into a more agile company as we continue to work remotely during the COVID-19 pandemic.

Taking a look at revenue across our different product lines.

Within our point to Multipoint BNP business.

We had record revenues, increasing 7% sequentially and up 66% year over year as we continued to see strong momentum in the truck traffic increased demand for our CBD out of solutions and solid demand for new product introductions.

We believe we are taking share from both larger and smaller competitors as we expand on our portfolio of solutions offering industry, leading of spectral efficiency scalability quality reliability and attractive economics for our customers.

The point to point PTP business had better than anticipated results during Q1, 'twenty, one growing 4% quarter over quarter, while improving 33% year over year on higher demand for backhaul.

We had record results for our enterprise Wi Fi business.

Which continued to recover from COVID-19 growing 11% sequentially and increasing 6% year over year. During Q1, 'twenty one due to the expanded growth of Wi Fi six solutions and record revenues for our cloud <unk> on metrics enterprise switching products.

Looking at some notable customer wins and new product developments.

In North America, we had multiple wins for our new 60 gigahertz <unk> solutions.

<unk> Communications is service provider is planning to all for up to one gig speeds to select residential locations in Anchorage and Fairbanks.

Cambium solution was selected to work in conjunction with the existing fiber networks, where new fiber construction is cost prohibitive and cambium technology allows for delivery of service to neighborhoods more quickly.

Also in the Alaska Cambium, one day residential deployment at the military base using our 60 gigahertz <unk> of technology.

Within our PDP business.

Our service provider delivering high speed Internet and voice services to six states in the Midwest and southwest selected our PTP 850, as the seek to expand on fortify the network.

One of the larger art of winners, which is the new customer for Cambium is building out the commercial network with the use of cambium PMT for the EM and our <unk> technology.

The customer selected cambium for our superior performance reliability and ability to scale with their business.

Another significant win for Cambium was with an NFL city in the southeast for the Smart City project the.

The city selected Cambium 60, gigahertz <unk> wave for Wi Fi backhaul and on <unk> E 700 for outdoor community Wi Fi access.

Cambium was selected by the customer for our CN Maestro wireless fabric management, the reliability scalability superior performance and value and.

An enterprise a large MSP based out of the northeast selected cambium CN metrics switching products for deployment in an assisted living and healthcare facilities.

Cambium was selected for the simple reliable and secure cloud management platform as well as policy based automation.

Cambium first mover status with the FCC three five gigahertz CVR of spectrum continued to have momentum for the sales of RFP flow 50 products and our SaaS service in both the U S and its territories.

Our full end to end solutions include high performance radios or the <unk> upgrades and cloud based software solutions.

In April we released software updates for support of priority access licenses Pal mulch.

The multi grant support once the become online providing another layer of differentiation from competing LTE solutions for.

Further enhancements to our CVR is platform will occur in June, including optimize alternative channel algorithms.

As of today's call. We now have over 90000 devices managed by our CPR assess service an increase of over 19% since we reported last quarter.

In the Europe, Middle East and Africa region EMEA on the strategic wins from Q1 include in.

In Spain, we have a few larger wins to share.

One of the spins and Portugal's leading nationwide fiber and mobile network operators selected cambium to launch the high speed broadband services across the interior of Spain and Portugal.

We're deployment the <unk> fiber is cost prohibitive.

The selected our <unk> for <unk> and enterprise switches as well as CN Maestro ex the first sales to a nationwide carrier of CN Maestro ex since the product's release in Q4 'twenty on.

Also in Spain, we are seeing a gradual recovery in the hospitality market and have closed the high profile enterprise Wi Fi win at a five star luxury resort the Marbella club resort on the Bioterror Inion cost.

The resorts selected cambium <unk> full suite of hospitality solutions to deliver high speed wireless connectivity across the resort to cover Guestrooms.

Outdoor recreation areas and high density conference facilities, using our <unk> Wi Fi.

Wi Fi aware of CN metrics switching technology, all managed by our <unk> software solution.

In the UK, we of another high profile wins for our 60 gigahertz <unk> solutions and Cambium Enterprise Wi Fi solutions advice Trinity the Uk's, leading managed service provider of connectivity solutions for recreational holiday parks by affinity will deploy cambium 60 gig RFC and wave.

To provide high speed connectivity for guests at multiple holiday for us in the U K.

In country Staycations or popular this year due to travel restrictions between countries.

Cambium continues its leadership position deploying public Wi Fi solutions across the European Union as part of use Wi Fi for EU initiative, having already secured over 1500 municipalities under the use of lifestyle for the EU program.

This very successful government sponsored Wi Fi for you of program was extended by an additional six months of.

Approximately 800 to 900 municipalities in Europe still have not yet to use the vouchers.

In the Middle East, Saudi Aramco, the world's largest petroleum company awarded Cambium. Its first project to backhaul oil Wellheads and security data flow production operations.

In Africa, the Orange groups, Ivory Coast operating entity selected cambium to upgrade its high speed broadband network. The win displaced one of our closest competitors with the selection of our <unk> for 200 technology due to <unk> superior performance and Cambium Superior Tech.

Nickel support.

In the APAC region, we had a sizable enterprise Wifi six win at the Melbourne Convention and exhibition Center, which is replacing end of life of a major Wi Fi vendor with cambium extra three dash eight access points to establish connectivity of.

The back office operations.

Cambium was already powering Wi Fi in the front office areas, including the conference rooms, and exhibition areas now the Convention center is fully deploying cambium in the front and back office operations altogether 250 access points will be in operations.

In New Zealand extract net the large risk with coverage across the country decided to transition from of close competitor to cambium. We're.

We are now deploying the first project in the northern part of the country funded by the New Zealand government Rural broadband initiative to provide high speed internet to the underserved areas.

And the first phase struck net is deploying cambium equipment to connect over 550 residential customers cambium.

Cambium was selected for overall cost of ownership performance and scalability.

In the Caribbean and Latin America color region, we had a record breaking quarter with revenues at $10 $5 million the second consecutive quarter debt. The region has exceeded $10 million in revenue.

We had another large deal in Colombia this quarter.

With the tier one service provider.

As to different system integrators selected cambium using both our E&P technology for the fixed wireless backhaul portion of the project for connect remote locations and cambium enterprise Wifi solutions, including CN metrics switches.

There was selected for access at those sites.

The operator, who has recently acquired significant new access spectrum is expanding its capacity and coverage nationwide to bridge the digital divide.

One of this project based on our reputation plus the functionality of seeing the Maestro cloud management software.

In Panama cable Onda.

Owned by <unk> Millicom purchases of significant number of three gigahertz PMT for 50 CPE.

The service is expanding customer base in that country.

Finally, we won the first phase of the public safety project with the state of Veracruz in Mexico the.

State government plans to deploy 50000 surveillance cameras, using our PTP 670 for transport and Pnp for 50 eye for axis.

Can be on selected because of the performance of our BNP for 50, <unk> and our reputation as the leading provider of solutions being used by numerous high profile reduced the valent systems in Mexico.

Looking at new products since our previous quarterly update.

During the middle of this year, we expect to have two significant new product introductions first our outdoor Wi Fi six product the <unk> <unk> will be released this summer our.

<unk> Wi Fi is an increasingly relevant market in a number of verticals and cambium has the particular strength in this market given our strong heritage and outdoor resilient radios.

Second.

Our highly anticipated 28 gigahertz <unk> product will be available for <unk> are on the time of our next quarterly earnings call.

Initially customers in the EMEA region will be our primary focus for our fixed five new products.

Our 28 gigahertz <unk> provide high capacity scalable residential access backhaul for outdoor Wifi access points for <unk> small cells and video surveillance networks at a lower total cost of ownership than fiber.

Utilizing the license 28 gigahertz band, which will run from 2004 to 2009 gigawatt of spectrum Cambium has benefits of the <unk> in our standard yet features the benefits of cambium fixed wireless products using our software defined radio architecture, including ease of use and deploy.

Women celebrity and management of a single pane of glass.

Interest in our 28 gigahertz seen way of products remains high.

On customer activity remains strong the head of ever Liberty.

Cambium received its first volume orders for its new 28 gigahertz <unk> VP of product platform from a major service provider in EMEA.

We will have more details regarding this product during our third quarter earnings conference call.

Also in our BNP and PDP product lines, Cambium, 60, gigahertz <unk> wave for millimeter wavelength make it possible to provide the city with high speed broadband access by utilizing existing street for nature, such as Streetlamps traffic lights and utility Poles.

As a result, it can be deployed faster and more cost efficiently.

Efficiently than fiber broadband.

We have several high profile for Youll season, Silicon Valley that have selected cambium to deploy gigabit backhaul within their cities.

We are seeing traditional fiber operators, such as the Alaska communications deploying hybrid networks using the <unk> wave to extend fiber to customer premises accelerating time to revenue at lower operating and capital costs.

We are very bullish on 60 gigahertz <unk> way of solutions and have a time to market advantage for our nearest competitors.

We continued to experience strong growth in the accounts utilizing <unk> cloud software our end to end cloud powered connectivity solution to manage the entire network from a single pane of glass.

Total devices under cloud management in Q1, 'twenty, one total of approximately 577900.

An increase of 10% from Q4, 'twenty and up 40% year over year.

Turning to the channel.

In Q1, 'twenty, one we expanded our channel presence by adding over 560 net new channel partners sequentially and over 2280, net new channel partners year over year, which represents an increase of approximately 6% sequentially and 31% year over year.

Our first ever global virtual even called Cambium connections.

Was held on February 24th and 25 for our end customer and partner community.

We had more than 2700 people from over 130 countries registered and the EBIT was successful at attracting both new and existing customers as we shared our vision of where the industry is headed over the next few years.

Replay of the even can be found on Youtube.

Finally I.

I am proud to say cambium networks for recently voted by the members of the wireless ISP Association with spot as the manufacturer of the year.

I would like to thank our customers and partners for this honor.

I will now turn the call over to Steven for a review of our Q1, 'twenty, one financial results and outlook.

Thanks for til.

Cambium had record revenues of 88 5 million for Q1, 'twenty, one above the high end of our outlook of $81 million to $85 million.

Revenues increased by 7% quarter over quarter on were up 46% year over year.

On a sequential basis for Q1, 'twenty, one revenues were higher by $5 $7 million.

The higher revenues were driven by record shipments of our <unk> products, which grew 7% sequentially due to service providers continuing to scale networks driven by request for increased capacity higher demand for <unk> compatible solutions.

<unk> Act on coffee funding and higher shipments of our new multi gigabit products.

I'll point to point revenues performed better than expected growing 4% sequentially due to increased demand for backhaul.

Enterprise Wi Fi solutions reached a new record and grew 11% quarter over quarter, driven by higher shipments of our new Wifi six products and record shipments of our cloud savvy switching products.

Looking at revenues by geography, North America, our largest region represented 61% of company revenues compared to 55% during Q4 'twenty.

North America had a record quarter with revenues growing 20% on a sequential basis, driven by PMT from service providers, a recovery and PTP and strong Wifi, including record revenues of our switching products.

EMEA, our second largest region decreased 13% sequentially, primarily reflecting softer PMT and PTP revenues as a result of timing of shipments and represented 21% of revenues during Q1, 'twenty, one and 26% of revenues during Q4 'twenty.

<unk> had another record quarter growing 1% quarter over quarter, driven by a significant number of customer wins and the continued recovery in that region and represented 12% of sales during Q1 'twenty one.

APAC decreased 11% sequentially and represented 6% of revenues during Q1, 'twenty, one compared to 7% of revenues for Q2 for 'twenty.

Moving to our gross margin non-GAAP gross margin up 51% decreased by 90 basis points compared to Q1 'twenty the.

The year over year decrease in non-GAAP gross margin was primarily the result of mix and higher freight and distribution costs due to component shortages in the market.

On a sequential basis non-GAAP gross margin in Q1, 'twenty, one of 51% was 110 basis points lower than Q4 'twenty.

The lower quarter over quarter non-GAAP gross margin were result of product mix and higher freight and distribution costs due to component shortages in the market.

In Q1, 'twenty one on non-GAAP gross profit dollars increased by $13 5 million to $44 3 million compared to the prior year and improved by $1 $9 million sequentially.

Non-GAAP operating expenses research and development sales and marketing general administrative and depreciation and amortization in Q1, 'twenty, one increased by $1 $1 million when compared to Q1, 'twenty and stood at $28 8 million of 32, 6% of revenues.

The majority of the year over year increase in non-GAAP operating expenses was the result of higher G&A expense in R&D, resulting from increased incentive compensation due to higher revenues.

When compared to Q4, 'twenty non-GAAP operating expenses decreased by approximately $300000 the.

Quarter over quarter decrease reflects lower R&D from the timing of regulatory costs higher R&D tax credit and lower sales and marketing expenses, resulting from less spend for trade shows and other events.

Non-GAAP operating margin was a record 17, 5% up from 5% during Q1, 'twenty and increased from 16% of revenues in Q4 'twenty.

We had another excellent quarter of profitability with adjusted EBITDA for Q1, 'twenty, one at a record $16 5 million or 18, 6% of revenues.

Compared to $4 4 million or seven three percentage of revenues for Q1, 'twenty and up from $13 9 million or 16, 8% of revenue for Q4 'twenty.

We see continued leverage in our business and remain committed to driving our adjusted EBITDA to our target model of 18% to 19% of revenues.

Moving to cash flow.

Cash used in operating activities was $7 6 million for the first quarter of 2021 the quarter over quarter decrease in cash was primarily the result of payments for variable compensation and increase in accounts receivable as we had delays in receiving key components, thereby impacting the timing of shipments of final goods and delay in collections.

The decrease in accounts payable on an increase in prepaid inventories as we secure strategic supplies, resulting from higher revenues offset by improved earnings.

This compares to $800000 of net cash flow used by operating activities for the first quarter of 2020, and $15 1 million net cash flow provided by operating activities for the fourth quarter 2020.

Non-GAAP net income for Q1, 'twenty, one was a record of 11 $7 million of 41 cents per diluted share compared to $1 4 million of <unk> per diluted share for Q1, 'twenty and non-GAAP net income of $10 7 million of 38.

<unk> per diluted share for the Q4 'twenty.

The higher non-GAAP net income compared to the prior year period was primarily due to higher revenues and gross profit dollars demonstrating improved leverage in our operating model the.

The increase in non-GAAP net income compared to Q4, 'twenty was primarily attributable to higher revenues and gross profit dollars as we efficiently scale our business.

Turning to the balance sheet cash totaled $51 2 million as of Q1, 'twenty, one a decrease of $11 $3 million from Q4 'twenty for <unk>.

Sequential decrease decrease in cash was primarily the result of payments for variable compensation and increase in accounts receivable due to supply constraints affecting the linearity of shipments of decrease in accounts payable and an increase in prepaid in the inventory as we secure strategic supply to support the growth of the business offset by improved earnings.

Net inventories of $31 4 million in Q1, 'twenty, one decreased by $1 $1 million year over year and decreased by $2 5 million from Q4 'twenty.

Given the rapid growth in revenue and low entry levels, we expect a modest increase in inventories over the next few quarters.

In summary, we are within line of sight of achieving our long term target operating model by accelerating growth gaining scale and improving our operational efficiency.

Our results demonstrate the tremendous operating leverage we have in our business we.

We continue to have improved visibility and predictability into our business given the global semiconductor shortages, we remain supply constrained, which we expect to impact our sequential growth during Q2 'twenty one.

Moving to the second quarter 2021 financial outlook. Please note the 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 our financial outlook to the extent they are reasonable. However, actual results may differ materially from the outlook.

Considering our current visibility as of May six 2021 of <unk>.

Q2, 'twenty one financial outlook is expected to be as follows revenues between $85 million to $90 million.

Non-GAAP gross margin between 49% to 50%.

Non-GAAP operating expenses between 32% to $31 2 million.

Non-GAAP operating income between 11, four to $13 8 million.

Interest expense net of approximately $1 $1 million.

Non-GAAP net income between eight 6% to $10 3 million of.

Between 29 to 35 per diluted share.

Adjusted EBITDA between 12, 4% to $14 8 million and adjusted EBITDA margin between $14 six to 16, 4%.

The gigahertz and in the middle of this year current tier giggles millimetre way of solutions for fixed fight the wireless.

We continued to we expect to continued adoption of Cbr's compatible solutions as we can now add software of the service to the list of gross drivers of 2021.

With the inclusion of RCN Maestro ex solution.

Our profit already should benefit from increase scale in our business, while we judiciously manage our costs. Although we will continue to fuel new investments in our of need to maintain our technology edge.

Finally, I would like to show my appreciation for the employees.

Partners and customers for another outstanding quarter of results during these unprecedented times.

This concludes our prepared remarks, so with that I would like to turn the call over to Abigail and begin the Q&A session.

Thank you as a reminder, task of question you won't need to pass for one on the Palestine COVID-19 via of questions to ask the pound a husky.

And the Mets your question.

The one question and one of the follow up question the standby level of compile the Kenny of Austin.

Our first question comes from the comes from the line of the Hall with the Goldman Sachs. Your line of that open.

Yes, hi, guys. Thanks for taking the question.

From my first question was going to be regarding visibility raised the full year guidance here and wondering it's particularly your carrier customers are showing you a little bit more visibility because of the supply shortage of people ordering early.

What's going on with orders here and visibility from your point of view of than than I do on a follow up to that yeah.

Yes, there are other David I think overall visibility in our business.

Has continue to improve really since we became of of the company and I think it's twofold one is.

We actually invested a lot of time effort and systems in and improving that visibility we have channel management tools and such force that we can really gauge what the ultimate sell through is an activity overall for for our customers.

Do think teal comment, though additionally, given the tightest supply constraints, we are seeing a tendency for our customers to place orders sooner and the cost on our distributors seeing visibility sooner from their customers. So I think that is improving things.

We've been entering the quarter, we actually like to end of the quarter or exit sort of the first month of that given quarter with in excess of 60% of billings of backlog in place. We are way ahead of that and since for a Q1 of last year, we've seen the continuing improve with certainly north of 75.

The send in queue for on with better than that in Q1, and we are tracking ahead of that and Q2, so visibility of getting better and I would additionally, say the visibility into future quarters is improving as well as those customer the putting the longer term of what is on us. So overall of much better picture for for all of your.

Okay, great. If the artifact goes at one more point the new products. We of introduced I think of finding new applications new customers. So the fun of that also getting stronger.

So definitely as we go into the next few quarters, you will hear more about it just I think more demand.

Okay. Thanks for two and then.

I wanted to follow up on Wifi, we the the numbers you guys printed we're a little bit below what we expected I was curious if that's if they were below what you expected and then sort of as part of this question you guys had talked about 40% to 60% growth. This year in Wifi are you still thinking that as the hospitality industry.

<unk> comes back on line and so I'm, just curious kind of of what the.

What you're thinking on Wifi on whether this was.

Below which you would expect them to the quarter.

Yes, so let let me let me give a Quaker on none of the next few moments to add the up.

Absolutely think of 40% to 60% of the light on.

Fantastic demand on enterprise products, good acceleration, we were supply constrained.

And the and Q1, so we we feel very good very are with the product lines. The Wi Fi adoption some of the new markets, which we are getting traction and hospitality definitely strengthening coming back. So we are actually pretty hopeful and confident about the market.

Yeah, I'd say I think.

Just to just to add to that I think it was actually putting the Wifi was pretty much in line with our expectations from what we guided.

The last quarter I think is two mentioned really it becomes more of a supply issue then of demands.

Situation, we are seeing hospitality, we mentioned this last quarter of seeing the hospitality market come back on line in particular in Europe.

And we're also seeing opportunities Wi Fi for new markets like logistics and medical debt, providing sort of rich feeding grounds for us as we start to see some of these government subsidy is going into other regions of the world.

We're finding particular in Europe.

Wi Fi for you program really driving you demand for a life of products. So we feel good about.

The numbers, we actually had a record for.

Q1.

We expect sequential increase the queue too and and feel good about the 40% to 50% growth trajectory.

On rocker and you're not worried about <unk> being of being a risk to the Wifi growth later in the year, you think that will be fine no. We fact of that into our calculations and guidance. So we think 40 to 60 hold.

Okay Alright. Thank you guys aren't very one more day to point is outdoor Wifi is accelerating because one of the one of the effect of COVID-19 is.

Government countries. The one the one connectivity everywhere and many situations.

Public Wi Fi outdoor situations are accelerating and that's where we have a very superior differentiation. So now we feel pretty good where we are.

Okay, great. Thank you.

Thank you.

And our next question comes from the lineup sort of just not going to be tapping. Your line is now open.

Hi, guys. Thanks, very much and congratulations on the the nice results here I guess I wanted to sort of.

Go back to the question of the supply constraints could you give us a sense for how much revenue you weren't able to ship in Q1 because of supply constraints and then also on.

Especially component pricing is going of any thoughts on how that might of had an impact on your margins.

Yeah. So this is Stephen again, I would say, it's really tough to quantify that.

I think.

We still came cough the upper end of our guidance.

Thank the supply constraints for us again.

The more of a cute too.

Impact with the possibly dribbling into the queue three and so you saw from our guide sequentially of guided 1% down and we said last quarter, we felt Q too.

Would be more likely to be the title quarter the rash.

As of company, we've done a lot of things to get ahead of this we actually started.

King at the supply chain way back last year and building, but the stock. So I think we're in a better situation. The most that I think really Q2 is going to be the the type of quarter to us and that bill into our guide yes.

Maybe one more point to add.

We have excellent relationships with our strategic suppliers.

And the reason for that is the the kind of solutions Cambium works on the state of the art cutting edge 60, Giga hurts the NBA gigahertz, the Wifi six indoor outdoor the value our inputs as the system architects of our company work very closely with them. So as people mentioned, we proactively work with.

Them as early as last year of November because we knew the.

The paucity of chips, what's coming so I think we of.

Compared to the competition and the other companies I think the bold position.

And everything we of guiding the taking those things in the account. Yes. This is Stephen again with regards to your other question on the on gross margins.

Certainly again with our guide we guided gross margins, 49% of 50. So we are seeing the the impact as a result of the higher component costs.

Reflected in our guidance and obviously, a little bit higher cost from.

From the overall frakes and surcharges associated with the supply constrained constraints as well.

Seems as of company, we've we've done a lot around the gross margins over the last year, you've seen them improved quite materially.

I would expect once we worked for the supply constraints you should expect to see gross margins come back into the fifties.

And obviously, we still have expectations of driving towards.

Longer term gross margin model of that 51% of 52%.

Got it if I could just ask for more follow up this is.

A bit of a change of subject here, but I wanted to ask about the C. N. Maestro ex you guys I think introduced that in the quarter.

There's a big trial of going on with your customers I'm just curious what the initial feedback looks like and what kind of exceptions, you're getting on that thanks, a lot and I think of you mentioned on the commentary as well very good reception.

Good we have all the half million users using my store the platform and now with the evaluated services.

Data storage duration of data storage some of the security features deployment features I think it's still early but so far so good very positive feedback is helping customer deployed and the approximate far more easier manner and then for many of the government broadband initiatives, you're seeing women quite a few of.

Deals one of the reason for the find the ease of management either of deployment to see on my throw of the key differentiator and CMS ex has just additional features of which we are non monetizing so and every quarter. We'll give you guys. A good rundown of how that entire monetization part is going.

Thanks.

Thank you.

And our next question is from Scott is that.

It off the top of all of your line of that open Hey, good afternoon. Thanks for taking my questions.

You.

First off in your opening comments there are a lot of different government and regulatory initiatives out there for various subsidy programs to britches digital divide I was wondering if you could address.

What revenues were attributable to that in the first quarter and how big the pipeline of opportunity is that right. If you look at art off you know sort of ending up some of the potential numbers from the broadband infrastructure bill of that if and when that of her passes some big numbers. There. So I'm wondering if you could frame that for us a little bit in terms of where we are today show me of what that could mean over the next day 18 miles I think as as we.

Said the for the last quarter or the off for cambium and the meaningful manner. I think we'll still probably end of the end of 21. Early 22 is when you will see a lot of momentum behind that I think of what you're seeing an art of right in those early projects on the cambium is winning quite a few of them.

But there are still early infrastructure backhaul those type of things the real art of Formula for Cambium starts on access parts of the point of multi point by Fi those type of product going and as we said the earlier I think you will see a significant spend of art of will be probably for.

Six years and that means if you. If you are the kind of time it I will see in the late this year. Early 22 is when things will start in a significant manner and until then you'll hear projects here and there but the.

The real momentum the wheel will I think started moving my guess is late this year or early next year and we are we are very well positioned would be early art of winners approximately half of them are already using some cambium product of the other.

So.

That's that's probably just a little bit of color on that great very helpful and as a follow up.

60 gigahertz seems like it's gaining some momentum for you I think you specifically referenced starting to move into urban markets, which in my mind says larger bids larger opportunities I'm wondering if you could give us an update in terms of how big you think that is this year and now with the 28 gig product coming behind the different technology different solution, but I'm wondering if you could size of the 28 gig.

Opportunity vs. The 60 gig opportunity comparable smaller bigger thank you okay. So.

So this year.

For 60 gigahertz at least for I would say of cute too in Q3 lots of Poc's I think.

We are probably or north of 40.

<unk> already on I think I would still take you to on queue three.

Fantastic reception, so far in terms of quality performance.

M U Mimo architecture Cambium has on 60 Giga hurts customers are pretty pleased for my sense of Scott debt.

Acceleration of 64 cambium in terms of the size of the abuse and all of that generally happens people of six six months up for you to the POC. So you can see in of towards the end of the year early next year for 60 gigahertz would be a good explanation time during the of gigahertz.

We will start to POC, we have actually done with one customer very early quick testing and very good results, but real POC will start probably in the July of time frame and then we will volume ship in probably late Q3, and then our queue for and Q1, probably would be again for yossi.

And then maybe the timing wise I will say mid 22 is when you start to see 20 of accelerate now let me differentiate the two little bit for Ya.

Both har phenomenon multi gigabit products both of taken us two year for us to design and build the lure of R&D and a lot of differentiation built in the these products.

160, you guys will give you said kilometre too too depending on the terrain and weather and all of that and then 28 gigahertz will start to give you probably for two seven kilometers depending again on three in the in weather. So now you can see on the edge, we truly have multi gigabit 20 of gigabit as of fixed fight Jeep back.

So globally, it'll be pretty well received that the standard on our anticipation as the EMEA will lead.

And we already have a sizeable set of deals with a day.

As of significant pent up demand for that product 60, gigahertz will also be of global product.

And the.

Probably less in the infrastructure of is 20th of gigahertz can really since it covered the distance and go more more infrastructural product, but they are hand on the globe. Both go hand in hand, when you're deploying multi gigabit network and with the last three or four of meters you could buy five six so we feel our wireless.

Fabric is truly it's coming very close to scaling and all of those products will be significant winners.

Different regions 60, Giga heard you will see North America lead the world in the major manner. So I think you'll see a little bit of differentiation across territories.

Great. Thank you thanks a lot.

And the next question is from time on Leopold of the Dream maintain share line is not open.

Thanks appreciate that Uhm first Ah.

Quick one.

You're asked earlier about the.

The supply chain constrained effect on on March I guess I'm more interested in understanding what you've assumed for the revenue headwind in your June guidance from the gross margin headwind.

It sounds like you could it could sell more if you could get all the components you need it just trying to understand how to quantify at.

Headwind.

Yeah, I think the way we tried to.

There's always an assumption that you get the perfect mix.

Women and that's haven't seen of of the case, but I think between the the lower and upper and we've tried to build in the the.

On the lower end of the lack of availability on Ah components in at the higher end, assuming a bed of case scenario and competitive availability I mean, certainly the situations where the times get pushed out in the there is get missed and so I guess, we would probably be on a little bit more aggressive that.

Sort of Derisking, the upper and lower ends.

But again it is tough to to give you a number on how much more we could do.

Supply with non issue, but we've tried to factor that into our up on the lower end on the guidance.

So just to make sure I understand you if somebody makes the assumption that you do the high end of sales, which assume the high end of gross margin and vice versa low end of sales would be the lowest I'll add that.

That's the way of frankly, absolutely yeah, yeah, great great I appreciate that now the longer term question I wanted to see if you could talk about is really the the changing dynamics of competition, specifically I am thinking about operators like T mobile and charter talking more about <unk>.

<unk> two.

Sell services into rural markets, which historically was the turf of of your primary customer base of the list I certainly heard your commentary about moving into urban so it's not as if you're you're not making of counter attack, but I want to get your sense of how you see the competitive landscape is offers like T mobile of charter.

<unk> pushed technology that isn't necessarily yours.

Into the footprint historically sold thank you, yes salmon excellent question by the way.

I will I will give a good color on this I think cambium is finding that we are moving of the value chain.

That's the key statement on making for.

For the first time.

I think the kind of capability we of added.

Into our portfolio of over the last 12 months is opening Lhasa doors for cambium globally.

And not just the year too.

Pier one for as well.

And I think what's happening is people are noticing the innovation of 60 gigahertz the.

The quality the noticing the.

20th of gigahertz product comment so I think different regions.

Have good traction with the kind of named so you're throwing.

So I will not give you specific names, but you're not that far off.

From anticipating next year or two years, where cambium could go it's all because of the renovation.

Think they are doing and yet maintaining the quality through a lot of software defined radio as in software features.

So I think as we evolve the company you will start to hear over the next day.

Five six quarters some names.

Which will not be too far from some of your guesses.

Thank you I appreciate that intake.

And our next question is from actually pay day, we'd kmt's. The KDE can't line is not all of them.

Yeah. Thanks.

One of them just curious what are the.

Lead times on some of the longer longer lead time components that you're looking at.

And then my my question more on that is.

How much are you competing fiber today is.

Is is that.

Coming the the primary competitor or how much do you see fiber.

The alternative to fixed wireless broadband today okay.

The.

Thanks for the question lead times, many of the products, especially on the vice fire from Pier the lead time for the chips could be as much as 52 weeks.

And.

My sense is that you will see the lead times.

Probably start shrinking.

As we go as we go into the queue for because I think every chip companies also working proactively to bring a non but as of now many of the chips could have as much as north of of PBX lead time.

But it just says to add to that.

As we said earlier, we got way ahead of the so we were building buffer stocks I'm, putting in orders back even is Elliot Q3 last year. So we were.

Obviously not perfect.

It's always some risks around it, but we're probably well positioned or better position of the most.

But certainly way of dealing with some of the only time yeah. Yeah. So last November timeframe. We saw this coming so we had beefed up our forecast working very closely proactively with our partners. So I think as I said, you will see us much better position because we did not wait till February or March.

<unk> had given much higher forecast for our and we were growing of the company. So it was a little easier to look ahead as well, but I would say at least times are high.

But I do anticipate them coming down the probably led Q3 early queue for.

Now your second question fiber Yep.

We are actually finding significant wins, Alaska community can we just talked of one of them. So as I said always that you will see mix-and-match of appropriate solutions and art of in any of the government initiative. We are very focused on economics, I think ultimately the solutions, which when.

The wind because of economics performance moving hand in hand and.

Fiber fiber guys activity of finding cambium to be of great partner.

There are high density areas, where the already of fiber, but it makes sense for them to extend fiber, but there are many areas where the need to extend which are tough during the come to cambium all of the are dispersed low density.

<unk> holds the come to cambium. So I think we're finding this to be not really.

Put on it but it's symbiotic relationship.

And the.

This is why when you look at even the out of the winners some of the art of Windows for working with the they do fiber as well. So cambium is very well positioned to be actually a significant enabler.

Of broadband to both wireless environment, but that's kind of current wins and current bill for showing us day.

Very good thank you very much.

Thanks, Eric.

And again to ask the question you will need to fast star one on your telephone. Our next question is from John Lopez is very to go grab Carolina now open.

Hi, Thanks very much.

I had to the first one.

If I.

If I look at the annual guidance and we take your commentary around Wifi those aspirations of being attacked the kind of implies the point of multi point and point to point I don't know, maybe flatten out or even kind of trend down a little bit in the second half relative to the first I was thinking about that right or the.

Other factors I'm not.

I am not taken into account.

Well I mean, John of this is Steve and I think.

And you're looking at year on year comparisons right.

You saw that in.

In queue in Q1 point, the multi point had year of the year growth of something like 60%.

And it's still pretty strong for cutie. So when you look at the second half in relation to those year of the year of comes from the percentage of this activity is going to be it is going to be Lola.

I think overall.

We're expecting point.

Point of multi point to be north of sort of.

The 5% growth.

Point the point it more of a mature market. So obviously.

And the little bit lumpy given the the exposure that we have for some of the defense contracts. So that's going to be flattish I think that's the right assumption there another seeing the already given the Wifi numbers of.

Between 40, and 60% so I have that for some color on it now that helps a lot give that helps a lot of thank you. My second question I wanted to come back to the topic of competition.

<unk> I think you guys mentioned at the outset endpoints multi point some comfort of your picking share up against the I think I said larger and smaller competitors.

You have one large competitor that they've had a couple of sort of relatively high profile missteps one of them not that long ago with the security issue I guess I'm wondering do you see.

Sort of tangible evidence that you're in fact picking share up.

Relative to that competitor or is this more of like anecdotal looking at sort of your business.

Relative to the pier set.

John This is more anecdotal I think we are picking share more on a broad basis.

Not just the large competition, but I think we of lot of regional competition, as well and euro of poor cat low ratio.

I think at this point I would say more broadly because of the type of new products, we have the highly differentiated.

The all of managed from a signal Phenoplast. So I think to me at this point.

It's it's not just one company I think this is more of a broad frontier of your picking of share with picking up new customers for getting a new territories new applications.

That's for the driving.

Okay, I'm, sorry, just to clarify that.

I guess, what I was asking if you were to hear business of sort of saying your gross looks kind of better than the pure set more. So then you're saying we've identified say competitive displacements here. There is that the way of what you think about your commentary.

You're right I'm, saying, we of more broad based anecdotal.

The the diet is rising for us the cash upfront.

I gotcha, okay. Thanks, very much for the thoughts I appreciate it thanks Geico.

And there are no for that question is I will not tend to call back of I cannot.

The pension senior director of investing and industry analysts relations for closing remark. Thank you Abigail during Q2, 21, cambium networks will be presenting and meeting virtually with investors on may 18th at the Needham Virtual Technology Media Conference May 26th at the J P. Morgan Global Technology Media and Communications conference made of.

27th at the Barrington Research Virtual Spring investment conference and May 28th with Raymond James Virtual bus tour in the meantime, you are always welcome to contact of our Investor Relations Department at 8472642188 with any questions that arise. Thank you for joining us in this concludes today's call.

Ladies and gentlemen that concludes today's Clark any earnings call. Thank you for your participation you may know lack of.

[music].

[music].

[music].

Good afternoon, my name of Fabio and I'll be your conference operator today at this time I would like to welcome everyone to the cambium metrics first quarter 2021 financial results Conference call.

All lines have been placed on mute to prevent any back on voice.

After the Speakers' remarks, there will be a question and answer session.

Ask the question during the session you will need the press star one on your telephone please limit yourself. The one question and one follow up question. Thank you Mr. Peter Schuman Senior director of Investor and industry analysts Relations you may begin your conference. Thank you Abigail welcome and thank you for joining us.

A day for Cambium networks first quarter 2021 financial results conference call and welcome to all of those joining via the webcast the tool button AGA, our president and CEO and Stephen Cumming. Our CFO are here for today's call. The financial results press release, and CFO commentary referenced on this call are accessible on the Investor page of our website and the press release has been.

Submitted on a form 8-K with the SEC.

A copy of today's prepared remarks will also be available on our investor page at the conclusion of this call.

As a reminder, today's remarks, including those made during Q&A will contain forward looking statements about the company's outlook and expected performance. These statements are based on current expectations forecasts and assumptions risks and uncertainties could cause actual results to differ materially.

Except as required by law Cambium networks does not undertake any obligation to update or revise any forward looking statements for any reason after the date of this presentation, whether as a result of new information future developments to conform the statements to actual results or make changes and cambium expectations or otherwise it is cambium networks part.

<unk> not to reiterate our financial outlook, we encourage listeners to review the full risk of list of list of risk factors included in the Safe Harbor statement in today's financial results press release.

We will also reference both GAAP and non-GAAP financial measures and specifically note that all sequential and year over year comparisons reference non-GAAP numbers, except where otherwise noted a reconciliation of non-GAAP measures to GAAP measures is included in the appendix to today's financial results press release, which can be found on the investor page of our website and in today's press.

Announcing our results turning to the agenda cambium Networks' President and CEO of button Augur will provide the key investment highlights for the first quarter 2021, and Stephen Cumming Cambium networks CFO will provide a recap of the financial results for the quarter and our financial outlook for the second quarter and calendar year of 2021, our prepared remark.

Next will be followed by a Q&A session.

Like to now turn the call over to of tool.

Thank you Peter the momentum continued to build for cambium business as our vision of the high performance year, the affordable Global wireless infrastructure leader for broadband communications accelerated during the first quarter 2021.

During the last week of January.

Cambium networks shipped our 9 million radio sales.

Becoming a standalone company.

The interest in fixed wireless broadband solutions is becoming mainstream as performance matches that of fiber.

And the attractive cost of ownership for our.

Our solutions make cambium of competitive and economically superior solution for wireless infrastructure projects around the world propelled by increased government spending.

Fixed wireless broadband is a critically important networking infrastructure to connect our local communities.

If it can be of wireless solution it will be of wireless solution.

Because of ease of installation and operations.

We are at the start of the new era.

Of end to end wireless speeds equaling the debt of fiber.

Our multi gigabit wireless fabric can deliver fiber performance and reliability on it.

Fraction of the cost.

The recently launched 60 gigahertz <unk> solution is shipping in volume with increasing demand.

And our forthcoming fixed five G 28, gigahertz millimeter wave products with proof of concept of arriving during the middle of 2021.

The fall for volume shipments will further accelerate this trend.

As we reach new customers and enter new markets demanding higher broadband performance at the edge of the network.

For the first time in cambium history will be purposefully compete in urban markets in a meaningful way as the <unk>.

Existing networks upgrade infrastructure.

The new high speed networks proliferate with more cost effective technology provided by cambium networks.

Cambium significant new product introductions combined with increased government funding around the world will benefit our financial results for many years into the future.

Turning to the results of our first quarter 2021.

We achieved the record revenues of $88 $5 million above the high end of our outlook of between 81% to $85 million non.

Non-GAAP diluted EPS of <unk> 41.

Also exceeded the high end of our outlook of between 30 and 34 per.

Our diluted share with.

We delivered these outstanding results as we have transformed cambium into a more agile company as we continue to work remotely during the COVID-19 pandemic.

Taking a look at revenue across our different product lines.

Within our point to Multipoint BNP business.

We had record revenues, increasing 7% sequentially and up 66% year over year as we continued to see strong momentum in network traffic increased demand for our CBD out of solutions and solid demand for new product introductions.

We believe we are taking share from both larger and smaller competitors as we expand on our portfolio of solutions offering industry, leading of spectral efficiency scalability quality reliability and attractive economics for our customers.

The point to point PTP business had better than anticipated results during Q1, 'twenty, one growing 4% quarter over quarter, while improving 33% year over year on higher demand for backhaul.

We had record results for our enterprise Wi Fi business, which continued to recover from COVID-19 growing 11% sequentially and increasing 6% year over year. During Q1, 'twenty one due to the expanded growth of Wi Fi six solutions and record revenues for our cloud savvy CN metrics.

Switching products.

Looking at some notable customer wins and new product developments.

In North America, we had multiple wins for our new 60 gigahertz <unk> solutions.

<unk> Communications is service provider is planning to all for up to one gig speeds the select residential locations in Anchorage and Fairbanks.

<unk> solution was selected to work in conjunction with the existing fiber networks, where new fiber construction is cost prohibitive and cambium technology allows for delivery of service to neighborhoods more quickly.

Also in Alaska can be on one day residential deployment at the military base using our 60 gigahertz <unk> VP of technology.

Within our PDP business.

Large service provider delivering high speed Internet and voice services to six states in Midwest and southwest selected our PTP 850, as the seek to expand on 45 the network.

One of the larger our Gulf of winners, which is the new customer for Cambium is building out the commercial network with the use of cambium PMT for the EM and our <unk> technology.

The customer selected cambium for our superior performance reliability and absolutely the scale with their business.

Another significant win for Cambium was with an NFL city in the southeast for our Smart City project.

The city selected Cambium 60, gigahertz <unk> wave for Wi Fi backhaul and on <unk> E 700 for outdoor community Wi Fi access.

Cambium of selected by customer for our CN Maestro wireless fabric management, the library scalability superior performance and value.

And enterprise of large MSP based out of the northeast selected cambium CN metrics switching products for deployment in an assisted living and healthcare facilities.

Cambium was selected for a simple reliable and secure product management platform as well as policy based automation.

Cambium first mover status with the FCC's got five gigahertz CVR of spectrum continues to have momentum for the sales of RFP flow 50 products and SaaS service in both the U S and its territories.

Our full end to end solutions include high performance radios or the ASC Brs upgrades and cloud based software solutions in.

In April we released software updates for support of priority access licenses Pal multi.

The multi grant support once they become online providing another layer of differentiation from competing LTE solutions for.

Further enhancements to our CVR is platform will occur in June including optimized alternative channel algorithms.

As of today's call. We now have over 90000 devices managed by our CPR of SaaS service, an increase of over 19% since we reported last quarter.

In the Europe, Middle East and Africa region EMEA on the strategic wins from Q1 include.

In Spain, we have a few larger wins to share.

One of Spain's and Portugal's leading nationwide fiber and mobile network operators selected cambium to launch the high speed broadband services across the interior of Spain, and Portugal, where.

We of deployment the <unk> fiber is cost prohibitive.

The selected our BNP for hope the EM and enterprise switches as well as seeing Maestro ex this is the first sales to a nationwide carrier of CN Maestro ex since the product's release in Q4 'twenty on.

Also in Spain, we are seeing a gradual recovery in the hospitality market and have closed the high profile enterprise Wi Fi win at a five star luxury resort the Marbella of club resort on the pilot training cost.

The resort selected cambium <unk> full suite of hospitality solutions to deliver high speed wireless connectivity across the resort to cover of Guestrooms outdoor recreation areas and high density conference facilities, using our <unk> Wi Fi.

Wi Fi of CN metrics switching technology, all managed by our <unk> software solution.

In the U K, we had another high profile wins for our 60 gigahertz <unk> solutions and Cambium Enterprise Wi Fi solutions and by Trinity. The Uk's, leading managed service provider of connectivity solutions for recreational holiday parks by affinity will deploy cambium 60 gig RFC and wave.

To provide high speed connectivity for guests at multiple holiday for us in the UK.

In country, Staycations or pulpwood of this year due to travel restrictions between countries.

Cambium continues its leadership position deploying public Wi Fi solutions across the European Union as part of EU is Wi Fi for EU initiative, having already secured over 1500 municipalities under the use of Lifesize for EU program.

This very successful government sponsored Wi Fi for you of program was extended by an additional six months of.

Approximately 800 to 900 municipalities in Europe still have not yet to use their vouchers.

In the Middle East, Saudi Aramco, the world's largest petroleum company awarded Cambium. Its first project to backhaul oil Wellheads and security data flow production operations.

In Africa the.

Orange groups Ivory Coast operating entity selected cambium to upgrade its high speed broadband network. The win displaced one of our closest competitors with the selection of our <unk> for 200 technology due to <unk> superior performance and Cambium superior technical support.

In the APAC region, we had a sizable enterprise Wifi six win at the Melbourne Convention and exhibition Center, which is replacing end of life of a major Wi Fi vendor with cambium ex we'd three dash eight at this points to establish connectivity of their back office operations Cambium was already power.

Wi Fi in the front office areas, including the conference rooms, and exhibition areas now the Convention center is fully deploying cambium in the front and back office operations altogether 250 access points will be in operations.

In New Zealand <unk> net of large risk with coverage across the country decided to transition from of close competitor who cambium.

We are now deploying the first project in the northern part of the country funded by the New Zealand government Rural broadband initiative to provide high speed internet to the underserved areas.

And the first phase struck net is deploying cambium equipment to connect over 550 residential customers can.

Cambium was selected for oral cost of ownership performance and scalability.

In the Caribbean and Latin America Gala region, we had a record breaking quarter with revenues at $10 $5 million the.

The second consecutive quarter debt the region has exceeded $10 million in revenue.

We had another large deal in Colombia this quarter.

With a tier one service provider.

As to different system integrators selected cambium using both our E&P technology for the fixed wireless backhaul portion of the project the connect remote locations and cambium enterprise Wifi solutions, including CN metrics switches.

There was selected for access at those sites.

The operator, who has recently acquired significant new access spectrum is expanding its capacity and coverage nationwide to bridge the digital divide.

One of this project based on our reputation plus the functionality of seeing the Maestro cloud management software.

In Panama cable Onda.

Owned by T go Millicom purchases of significant number of three gigahertz BMP for 50 Cpe's.

The service is expanding customer base in the country.

Finally, we won the first phase of the public safety project with the state of Veracruz in Mexico the <unk>.

Ted government plans to deploy 50000 surveillance cameras, using our PTP 670 for transport and BNP for 50 eye for axis.

Can be on a selected because of the performance of our BNP for 50.

And our reputation as a leading provider of solutions being used by numerous high profile reduce the valent systems in Mexico.

Looking at new products since our previous quarterly update.

During the middle of this year, we expect to have two significant new product introductions first our outdoor Wi Fi six products. The <unk> will be released this summer.

Outdoor Wi Fi is an increasingly relevant market in a number of verticals and cambium had the particular strength in this market given our strong heritage in outdoor resilient radios.

Our highly anticipated 28 gigahertz <unk> with five <unk> product will be available for POC or on the time of our next quarterly earnings call.

Initially customers in the EMEA region will be our primary focus for our fixed five day products.

Our 28 gigahertz <unk> provides high capacity scalable residential access backhaul for outdoor Wi Fi access points for the <unk> small cells and video surveillance networks at a lower total cost of ownership than fiber.

Utilizing the license 28 gigahertz band, which will run from 24 to 2009 gigawatt of spectrum Cambium has the benefits of the <unk> in our standard yet features the benefits of cambium fixed wireless products using our software defined radio architecture, including ease of use and deployment.

On the laboratory and management of a single pane of glass.

Interest in our 28 gigahertz seen way of products remains high and customer activity remains strong the head of ever Liberty.

Cambium received its first volume orders for this new to indeed gigawatt CMV of product platform from a major service provider in EMEA.

We will have more details regarding this product during our third quarter earnings conference call.

Also in our BMP in PDP product lines, Cambium, 60, gigahertz <unk> for millimeter wavelength make it possible to provide the city with high speed broadband access by utilizing existing street furniture, such as Streetlamps traffic lights and utility Poles.

As the result, it can be deployed faster and more cost efficiently.

Efficiently than fiber broadband.

We have several high profile for Youll seasons, Silicon Valley that have selected cambium to deploy gigabit backhaul within the cities.

We are seeing traditional fiber operators, such as the Alaska communications deploying hybrid networks using <unk> to extend fiber to customer premises accelerating time to revenue at lower operating and capital costs.

We're very bullish on 60 gigahertz <unk> solutions and ahead of time to market advantage for our nearest competitors.

We continued to experience strong growth in accounts utilizing <unk> cloud software our end to end cloud powered connectivity solution to manage the entire network from a single pane of glass.

Total devices under cloud management in Q1, 'twenty, one total of approximately 577 900.

An increase of 10% from Q4, 'twenty and up 40% year over year.

Turning to the channel.

In Q1, 'twenty, one we expanded our channel presence by adding over 560 net new channel partners sequentially and over 2280, net new channel partners year over year, which represents an increase of approximately 6% sequentially and 31% year over year.

Our first ever global virtual even called Cambium connections.

Was held on February 24th and 25 for our end customer and partner community.

We had more than 2700 people from over 130 countries registered and the even was successful on attracting both new and existing customers as we shared our vision of where the industry is headed over the next few years.

Replay of the event can be found on Youtube.

Finally.

I am proud to say cambium networks for recently voted by the members of the wireless ISP Association with spot as the manufacturer of the year.

I would like to thank our customers and partners for this honor.

I will now turn the call over to Steven for a review of our Q1, 'twenty, one financial results and outlook.

Thanks for til.

Cambium had record revenues of 88 5 million for Q1, 'twenty, one above the high end of our outlook of $81 million to $85 million.

Revenues increased by 7% quarter over quarter on were up 46% year over year.

On a sequential basis for Q1, 'twenty, one revenues were higher by $5 7 million.

The higher revenues were driven by record shipments of our <unk> products, which grew 7% sequentially due to service providers continuing to scale networks driven by request for increased capacity higher demand for Cbre's compatible solutions cash.

<unk> and coffee funding on higher shipments of our new multi gigabit products.

The point to point revenues performed better than expected growing 4% sequentially due to increased demand for backhaul.

The enterprise Wi Fi solutions reached a new record on grew 11% quarter over quarter, driven by higher shipments of our new Wifi six products and record shipments of our cloud savvy switching products.

Looking at revenues by geography, North America, our largest region represented 61% of company revenues compared to 55% during Q4 'twenty.

North America had a record quarter with revenues growing 20% on a sequential basis, driven by PMT from service providers, a recovery and PTP and strong Wifi, including record revenues of our switching products.

EMEA, our second largest region decreased 13% sequentially, primarily reflecting softer PMT and PTP revenues as a result of timing of shipments and represented 21% of revenues during Q1, 'twenty, one and 26% of revenue during Q4 'twenty.

Caller had another record quarter growing 1% quarter over quarter, driven by a significant number of customer wins and the continued recovery in that region and represented 12% of sales during Q1 'twenty one.

Pac decreased 11% sequentially and represented 6% of revenues during Q1, 'twenty, one compared to 7% of revenues for Q2 for 'twenty.

Moving to our gross margin non-GAAP gross margin of 51% decreased by 90 basis points compared to Q1 'twenty the year.

Year over year decrease in non-GAAP gross margin was primarily the result of mix and higher freight and distribution costs due to component shortages in the market.

On a sequential basis non-GAAP gross margin in Q1, 'twenty, one of 51% was 110 basis points lower than Q4 'twenty.

The lower quarter over quarter, non-GAAP gross margin, where it is out of product mix and higher freight and distribution costs due to component shortages in the market.

In Q1, 'twenty one on non-GAAP gross profit dollars increased by $13 5 million to $44 3 million compared to the prior year and improved by $1 $9 million sequentially.

Non-GAAP operating expenses research and development sales and marketing general administrative and depreciation and amortization in Q1, 'twenty one increased by $1 1 million when compared to Q1 2000 and stood at $28 8 million of 32, 6% of revenues.

The majority of the year over year increase in non-GAAP operating expenses was the result of higher G&A expense in R&D, resulting from increased incentive compensation due to higher revenues.

When compared to Q4, 'twenty non-GAAP operating expenses decreased by approximately $300000 the.

Quarter over quarter decrease reflects lower R&D from the timing of regulatory costs higher R&D tax credit and lower sales and marketing expenses, resulting from less spend for trade shows and other events.

Non-GAAP operating margin was a record 17, 5% up from 5% during Q1, 'twenty and increased from 16% of revenues in Q4 'twenty.

We had another excellent quarter of profitability with adjusted EBITDA for Q1, 'twenty, one at a record $16 5 million or 18, 6% of revenues compared to $4 4 million or seven three percentage of revenues for Q1 'twenty on up from $13 9 million of 16.

8% of revenue for Q4 'twenty.

We see continued leverage in our business and remain committed to driving our adjusted EBITDA to our target model of 18% to 19% of revenues.

Moving to cash flow.

Cash used in operating activities was $7 6 million for the first quarter of 2021 the quarter over quarter decrease in cash was primarily the result of payments for variable compensation and increase in accounts receivable as we had delays in receiving key components, thereby impacting the timing of shipments of final goods and delaying collections.

The decrease in accounts payable on an increase in prepaid inventories as we secure strategic supplies, resulting from higher revenues offset by improved earnings.

This compares to $800000 of net cash flow used by operating activities for the first quarter of 2020 and $15 $1 million net cash flow provided by operating activities for the fourth quarter 2020.

Non-GAAP net income for Q1, 'twenty, one was a record $11 7 million.

The 41 cents per diluted share compared to $1 4 million of <unk> <unk> per diluted share for Q1, 'twenty. Our non-GAAP net income of $10 7 million of 38 cents per diluted share for Q4 'twenty.

The higher non-GAAP net income compared to the prior year period was primarily due to higher revenues and gross profit dollars demonstrating improved leverage in our operating model the.

The increase in non-GAAP net income compared to Q4, 'twenty was primarily attributable to higher revenues and gross profit dollars as we efficiently scale of business.

Turning to the balance sheet cash totaled $51 2 million as of Q1 'twenty one a decrease of $11 3 million from Q4 'twenty that's the.

Sequential decrease decrease in cash was primarily the result of payments for variable compensation and increase in accounts receivable due to supply constraints affecting the linearity of shipments of decrease in accounts payable and an increase in prepaid in the.

Inventories as we secure strategic supply to support the growth of the business offset by improved earnings.

Net inventories of $31 4 million in Q1, 'twenty, one decreased by $1 $1 million year over year and decreased by $2 5 million from Q4 'twenty give.

Given the rapid growth in revenue and low entry levels, we expect a modest increase in inventories over the next few quarters.

In summary, we are within line of sight of achieving our long term target operating model by accelerating growth gaining scale and improving our operational efficiency.

Our results demonstrate the tremendous operating leverage we have in our business we.

We continue to have improved visibility and predictability into our business given the global semiconductor shortages, we remain supply constrained, which we expect to impact our sequential growth during Q2 'twenty one.

Moving to the second quarter 2021 financial outlook. Please note the 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 our financial outlook to the extent they are reasonable. However, actual results may differ materially from the outlook.

Considering our current visibility as of May six 2021 of <unk>.

Q2, 'twenty one financial outlook is expected to be as follows revenues between $85 million to $90 million.

Non-GAAP gross margin between 49% to 50%.

Non-GAAP operating expenses between 32% to $31 2 million.

Non-GAAP operating income between 11, 4% to $13 8 million.

Interest expense net of approximately $1 $1 million non-GAAP net income between eight six to $10 3 million of.

Between 29 to 35 per diluted share.

Adjusted EBITDA between 12, 4% to $14 8 million and adjusted EBITDA margin between $14 six to 16, 4%.

Non-GAAP effective tax rate of roughly 17% to 19% and approximately $29 2 million weighted average diluted share outstanding.

Turning to our cash requirements paydown of debt to $5 million scheduled debt and an additional 19 $6 million of reduction in term loan principal as required by the excess cash flow provision in the term credit agreement.

Cash flow interest expense of approximately $900000 and capital expenditures of between two 5% to $2 9 million.

Looking at the full year 2021 financial outlook revenues between 345% to $359 million.

Increasing between 24% to 29% from.

On adjusted EBITDA margin between 15% to 17% on.

I'll now turn the call back to the tool for some closing remarks.

We continue to strive to achieve our goal of long term topline growth in the mid team and the adjusted EBITDA in the upper teens as the percentage of revenues, which we are presently delivering.

Cambium has multiple revenue drivers to reach these goals, including our new gigabit wireless products, such as enterprise Wifi six.

60 gigahertz and in the middle of this year for <unk> millimeter wave solutions for fixed five Z wireless.

We continue to we expect to continued adoption of <unk> compatible solutions as we can now add software the service to the list of growth drivers of 2021.

With the inclusion of our CN Maestro ex solution.

Our profitability should benefit from increased scale in our business, while we judiciously manage our costs. Although we will continue to fuel new investments in R&D to maintain our technology edge.

Finally, I would like to show my appreciation for our employees.

Partners and customers for another outstanding quarter of results during these unprecedented times.

This concludes our prepared remarks, so with that I would like to turn the call over to Abigail and begin the Q&A session.

Thank you as a reminder to ask a question you will need to pass for one of our net telephone.

A question to ask about the husky.

The limit your question.

One question and one follow up question.

Below the compile the Q&A roster.

Our first question comes from the comes from the line of Rod Hall with Goldman Sachs. Your line is now open.

Yeah, Hi, guys. Thanks for taking the question.

So my first question was going to be regarding visibility you've raised the full year guidance here and wondering if particularly your carrier customers are showing you a little bit more visibility because of the supply shortage of people ordering early.

What's going on with the orders here and visibility from your point of view and then the only do of a follow up to that yes.

Yes, Stephen I think overall visibility in our business.

Has continued to improve really since we became a public company and I think it's twofold one is.

We've actually invested a lot of time effort and systems in an improving that visibility we have channel management tools and such force that we can really gauge what the ultimate sell through is in pls activity overall for our for our customers.

Do think to your comment, though additionally, given the tighter supply constraints, we are seeing a tendency for our customers to place orders sooner and debt costs on our distributors seeing visibility sooner from their customers. So I think that is improving things.

We have been entering the quarter, we actually like to enter the quarter or exit sort of the first month of that given quarter with an excess of 60% of billings and backlog in place. We are way ahead of that and since really Q1 of last year, we've seen that continue to improve and we're certainly north of 75.

The <unk> in Q4 and with better than that in Q1, and we're tracking ahead of that in Q2, so visibility is getting better and I will Additionally, say the visibility into future quarters is improving as well as those customers are putting the longer term orders on us. So overall, a much better picture for at sort of our view.

Okay great.

If I could just add one more point the new products. We have introduced I think on finding new applications new customers. So the funnel sort of also getting stronger.

So definitely as we go into the next few quarters, you will hear more about it just I think more demand.

Okay. Thanks for the tool.

And then.

I wanted to follow up on Wi Fi.

The numbers you guys printed were a little bit below what we expected I was curious if that's if they were below what you expected.

And then sort of as part of this question you guys had talked about 40% to 60% growth. This year and Wi Fi are you still thinking that as the hospitality industry comes back online and so I'm just curious kind of what the.

Whats your thinking on Wi Fi and whether this was.

Below which you had expected for the quarter.

Yes, So let me, let me give a quicker on none of them. The Stephen wants to add we absolutely think of 40 to 60 percentage right on.

Fantastic demand on the enterprise products good acceleration, we were supply constrained.

And in Q1, so we.

We feel very good where we are with the product lines Wi Fi six adoption some of the new markets, which we are getting traction in hospitality definitely strengthening coming back. So we are.

Pretty hopeful and confident about debt market.

Yeah.

Link.

Just to just to add to that I think it was actually pretty much Wi Fi was pretty much in line with our expectations from what we guided.

Last quarter, I think as Tom mentioned.

Really it becomes more of a supply issue than of demand.

The situation, we are seeing a hospitality and we mentioned this last quarter were seeing the hospitality market come back online in particular in Europe.

And we're also seeing opportunity in Wi Fi for new markets like logistics and medical debt, providing sort of rich feeding grounds for us as we start to see some of these government subsidy is going into other regions of the world.

We're finding particularly in Europe.

The Wifi for EU program really driving new demand for a life of products. So we feel good about the numbers, we actually had a record for Q1.

We expect sequential increase for Q2 and feel good about the 40% to 50% growth trajectory.

On rocket and you're not worried about supply has been of.

Being a risk to the Wi Fi growth later in the year, you think that'll be fine no we factored that into our calculations on guidance. So we think 40 to 60 halt.

Okay, Alright. Thank you guys Rod maybe one more data point is outdoor Wi Fi is accelerating because one of the one of the effect of COVID-19 is a government countries. The one they want connectivity everywhere in many situations.

Wi Fi outdoor situations are accelerating and Thats, where we are of very superior differentiation. So now we feel pretty good where we are.

Okay, great. Thank you.

Thank you.

And our next question comes from the line of George Schnell of Jefferies. Your line is now open.

Hi, guys. Thanks, very much and congratulations on the nice results here I guess I wanted to sort of go back to the question of the supply constraints can you give us a sense for how much revenue you werent able to ship in Q1 because of supply constraints and then also.

Honestly component pricing is going up any thoughts on how that might have had an impact on your margins.

Yes. So this is Steven again, I would say, it's really tough to quantify that.

I think.

We still can't pass the upper end of our guidance I think the supply constraints for us are going to be more of a Q2.

The impact with the possibly dribbling into Q3, and so you saw from our guide sequentially, we've guided 1% down and we said last quarter, we felt Q2.

Would be more likely to be the tighter quarter.

For us as the company we've done a lot of things to get ahead of this we actually started looking at the supply chain way back last year and building buffer stock. So I think we're in a day.

Better situation, the most and I think really Q2 is going to be the the.

Half of quarter to us and that's built into our guide.

Yes, maybe one more point to add.

We have excellent relationships with our strategic suppliers.

And the reason for that is that the kind of solutions cambium works on the state of the art cutting edge 60 gigahertz, the NBA gigahertz, the Wi Fi six indoor outdoor the value our inputs as the system architects of our company worked very closely with them. So as Stephen mentioned, we proactively work with them.

As early as of last year November because we knew the paucity of chips, what's coming so I think we are.

Compared to competition on other companies I think the well position.

And everything we are guiding we're taking those things into account. Yes. This is Stephen again with regards to your other question on the on gross margins.

Certainly again with our guidance, we guided gross margins, 49% to 50. So we are seeing the the impact as the result of the higher component costs.

On reflected in our guidance and obviously, a little bit higher cost from.

From the overall freight and surcharges associated with the supply constrained constraints as well.

You've seen as a company we've we've done a lot.

Around the gross margins over the last year, you've seen them improved quite materially.

I would expect once we worked through the supply constraints you should expect to see our gross margins come back into the <unk>.

And obviously, we still have expectations of driving towards.

Longer term gross margin model of that 51% to 52%.

Got it if I could just ask one more follow up this is.

A bit of a change in subject here, but I wanted to ask about the CN Maestro ex you guys I think introduced that in the quarter.

And I think as we mentioned on the commentary as well very good reception.

Good.

For the half million users using maestro is the platform and now with the value added services.

Data storage duration of data storage some of the security features deployment features I think it's still early but.

So far so good very positive feedback is helping customers deploy networks in the far more easier manner and then for many of these government broadband initiatives Youre seeing we are winning quite a few deals one of the reasons is defined the ease of management ease of deployment through the <unk> towards the key differentiator and C&I.

<unk> just additional features for which we are non monetizing. So on every quarter. We'll give you guys of good rundown of how that entire monetization part is going.

Thanks.

Thank you.

And our next question is from Scott Searle with Roth Capital. Your line is now open Hey.

Good afternoon, Thanks for taking my questions.

You referenced off in your opening comments there are a lot of different government and regulatory initiatives out there for various subsidy programs to bridge. The digital divide I was wondering if you could address.

What revenues were attributable to that in the first quarter and how big the pipeline of opportunity is there right. If you look at art off and you start adding up some of the potential numbers from the broadband infrastructure bill of that if and when that of her passes some big numbers. There. So I'm wondering if you could frame that for us a little bit in terms of where we are today.

So maybe what that could mean over the next 18 months I think as as we said the probably last quarter are the off for cambium and the meaningful manner. I think it will still probably end of the end of 'twenty. One early 'twenty two is when you'll see a lot of momentum behind that I think what youre seeing in art of Rhinos.

Early projects on the cambium is winning quite a few of them, but they're still early infrastructure backhaul those type of things the real art of Formula for Cambium starts on access by our supply on the multi point by Fi those type of products get going and as we said the earlier.

I think you will see a significant spend of our the off will be probably for six years.

And that means if you.

If you were to kind of time it I would say in the late this year early 'twenty two is when things will start in the significant manner and until then you'll hear projects here and there but.

The real momentum the real real I think started moving my guess is late this year or early next year and we are we are very well positioned with the early out of winners approximately half of them are already using some cambium product of the other.

So.

That's that's probably just a little bit of color on day, great very helpful and as a follow up.

The gigahertz seems like its gaining some momentum for you I think you specifically referenced starting to move into urban markets, which in my mind says larger bids larger opportunities I'm wondering if you could give us an update in terms of how big you think that is this year and now with the 28 gig product coming behind the different technology different solution, but I'm wondering if you could size of the 28 gig opera.

<unk> versus the 60 gig opportunity comparable smaller bigger thank you for Buckeye.

This year.

For 60 gigahertz at least for I would say Q2, and Q3 loss of Poc's I think.

We are probably are north of 40.

<unk> is already on I think I would still say Q2 and Q3.

But fantastic reception, so far in terms of quality performance.

<unk> Mimo architecture Cambium has on 60 gigahertz customers are pretty pleased so my sense is Scott debt.

Exploration of 64 cambium in terms of the size of the deals on all of that generally happens T plus six six months upgrade of the POC. So you can see towards the end of the year early next year for 60 gigahertz would be of good exploration time go on.

Gigahertz.

We will start to POC, we have actually done with one customer very early quick testing and very good results, but real Poc's will start probably in the July timeframe and then we will volume shipping probably late Q3, and then our Q4 and Q1 probably would be again POC.

And then maybe the timing wise I would say mid 'twenty two is when you'll start to see 'twenty would accelerate now let me differentiate the two little bit for you.

Both of our phenomenal multi gigabit products, both uptick on us two year for us to design and build the theres lot of R&D and a lot of differentiation.

<unk> built in the these products.

160, Giga, who will give you a kilometer or two depending on the terrain and weather and all of that and then 28 gigahertz will start to give you probably 4% to seven kilometers depending again on the rain and weather. So now you can see on the edge, we truly have multi gigabit 10 gigabit is the fixed five G. Pat.

So globally it'll be pretty well received at the standard on our anticipation is that <unk> will lead.

And we already have a sizable set of deals because there is of significant pent up demand for debt product 60 gigahertz will also be of global product.

And.

Probably less in the infrastructure, we have 28 gigahertz can really since the covered the distance and go more more infrastructural product, but they are hand in glove. Both go hand in hand, when youre deploying multi gigabit networks and with the last three for our meters you got Wi Fi six so we feel our wireless.

Fabric is truly is coming very close to scaling and all of those products will be significant winners.

Different regions 60, gigahertz Youll see North America lead the world in the major manner. So I think youll see a little bit of differentiation across territories.

Great. Thank you. Thanks.

Thanks Scott.

And our next question is from Simon Leopold with Raymond James Your line is now open.

Thanks appreciate that first.

Quick one.

You were asked earlier about the with the.

Supply chain constraint effect on on March I guess I'm more interested in understanding what you've assumed for the revenue headwind in your June guidance on the gross margin headwind. It sounds like you could it could sell more if you could get all the components you need it just trying to understand how to quantify.

That headwind.

Yes, I think the way we tried to.

There's always an assumption that you get the perfect mix side.

Simon and that's obviously net of the case, but I think between the the lower and upper end and we've tried to build in that the.

On the lower end of the lack of availability on our components in at the higher end assuming of better case scenario and component availability I mean, certainly the situations where lead times get pushed out on deliveries get mixed in so I guess, we've probably been a little bit more aggressive debt.

Sort of Derisking, those upper and lower ends.

Again, it's tough to give you a number on how much more we could do.

If supply with non issue, but we've tried to factor that into our up on lower end on our guidance.

So just to make sure I understand.

Somebody makes the assumption that you do the high end of sales, we should assume the high end of gross margin and vice versa. The low end of sales would be in the low end absolutely. Yes, that's way of frankly, absolutely, yes, yes, great great No I appreciate that now on the longer term question I wanted to see if you could talk about is really the change.

<unk> dynamics of competition, specifically I am thinking about on.

Operators like T mobile and charter talking more about.

Efforts to sell services into rural markets, which historically was the turf of your primary customer base, the which I certainly heard your commentary about moving into urban so it's not as if you're not making of counter attack, but I wanted to get your sense of how you see the competitive landscape.

Operators like T mobile on charter push technology that isn't necessarily yours into the footprint.

Historically sold thank you.

Simon excellent question by the way.

And I will I will give a good color on this I think cambium is finding that we are moving up the value chain.

That's the key statement I'm, making.

Probably for the first time.

I think the kind of capability we have added.

Into our portfolio over the last 12 months is opening larsa doors for cambium globally.

And not just the year too but.

The year, one says well.

And I think what's happening is people are noticing the innovation of 60 gigahertz the <unk>.

Quality the noticing the.

28, gigahertz product coming so I think different regions.

We have good traction with the kind of named <unk>.

So I will not give you specific names, but you are not that far off.

From anticipating next year or two years, where cambium could go it's all because of the innovation.

I think they are doing and yet maintaining the quality through lot of software defined radios and software features.

So I think as we evolve the company you will start to hear over the next day.

The five six quarters some names.

Which will not be too far from some of your guesses.

Thank you I appreciate that intake.

Okay.

And our next question is from ex U.

JMP Securities. Your line is now open.

Yes. Thanks.

One of just curious what are the.

Lead times on some of the longer longer lead time components that youre looking at.

And then my.

I.

More on that is how much are you competing with fiber today is.

Is that.

Coming the the primary competitor or how much do you see fiber.

As the alternative to fixed wireless broadband today okay.

Eric.

Thanks for the question lead times, many of the products, especially on the volume five frontier the lead time for the chips could be as much as 52 weeks.

And.

My sense is that you will see the lead times per.

Probably start shrinking.

As we go as we go into Q4, because I think every chip companies also working proactively to bring it down but as of now many of the chips could have as much as north of 50 weeks lead time, but Eric just to add to that.

As we said earlier, we got way ahead of it. So we were building buffer stocks and putting in orders back even as early as of Q3 last year. So we.

We're obviously not perfect.

There's always some risk around this but we're probably well positioned or better positioned the most but certainly we're dealing with some of the only time, yes, yes. So last November timeframe. We saw this coming so we had beefed up our forecast.

Working very closely proactively with our partners. So I think as I said, you will see us a much better position because we did not wait till February or March we had given much higher forecast for our and we were growing at the company. So it was a little easier to look ahead as well.

I would say lead times are high.

And but I do anticipate them coming down probably late Q3 early Q4.

Now your second question on fiber.

We are actually finding significant wins, Alaska, Dominican we just talked of one of them. So as I've said always that you will see mix and match of appropriate solutions in art of in any of the government initiative. We're very focused on economics, I think ultimately the solutions, which.

When the wind because of economics performance going hand in hand, and the <unk>.

Fiber fiber guys actually of finding cambium to be of great partner.

There are high density areas with the already of fiber, but it makes sense for them to extend fiber, but there are many areas where the need to extend which are suffering the come to cambium or they are dispersed low density neighborhoods. The come to cambium. So I think we are finding this to be not really.

The competitive, but it's symbiotic relationship.

And.

This is why when you look at even the art of the winners some of the out of Windows for working with the do fiber as well. So cambium is very well positioned to be actually a significant enabler.

Of broadband to both wireless environment.

Current current wins from current Bill for showing this day.

Very good thank you very much thanks for thanks, Eric.

And again to ask the question you will need to press star one on your telephone on.

The next question is from Jon Lopez with vertical group. Your line is now open.

Yes.

Alright, thanks very much on it.

Two the first one.

If I.

If I look at the annual guidance.

And we take your commentary around Wi Fi does aspiration of being attacked the kind of.

Why is the point to Multipoint and point to point I don't know, maybe flatten out or even kind of trend down a little bit in the second half relative to the first am I thinking about that right or are there other factors I'm not on.

I'm not taking into account.

Well John This is David I think.

When you're looking at year over year comparisons right.

<unk>.

You saw that in.

In Q in Q1 point to Multipoint had year over year growth of something like 60 odd percent.

And it's still pretty strong for Q2, so when you look at the second half in relation to those year over year of comps from the percentage of this activity is going to be it is going to be lower.

I think overall we're.

We're expecting to.

The point to multi point to be north of sort of 35% growth.

Point to point is more of a mature market. So obviously.

On a little bit lumpy given the the.

The exposure that we have to some of the defense contracts. So that's going to be flattish I think that's the right assumption there and obviously, we've already given you a Wi Fi numbers.

Between 40, and 60% so I hope that put some color around it.

That helps a lot. The helpful. Thank you My second question I wanted to come back to the topic of competition.

And I think you guys mentioned at the outset and point to multi point. Some comfort that you are picking share up again, I think you said larger and smaller competitors.

One large competitor debt.

Had a couple of sort of relatively high profile of missteps, one of them not that long ago with the security issue.

I guess I'm wondering do you see.

Sort of tangible evidence that you're in fact, taking share up.

Relative to that competitor.

Or is this more of like anecdotal looking at sort of your business.

Relative to the peer set.

John This is more anecdotal I think we are taking share more on the broad basis.

Not just the large competition, but I think we of lot of regional competition as well.

<unk> per kilo ratio I think at this point I would say more broadly because of the type of new products, we have the highly differentiate it.

All of the managed from a single pane of glass. So I think to me at this point.

It's not just one company I think this is more a broad frontier of Youre picking up share, we're picking up new customers for getting a new territories new applications.

What's driving it.

Okay, I'm, sorry, just to clarify that.

I guess, what I was asking is the only thing for your business, the sort of saying Youre gross looks kind of better than the peer set more so than you're saying we've identified say competitive displacements here. There is that the right way to think about your commentary.

No I think youre right.

We are more broad based anecdotal.

The tide is rising for us the crossrail.

Right.

I gotcha, okay. Thanks, very much for the thoughts I appreciate it thanks Heiko.

And there are no further questions I will now turn the call back over to Mr. Peng Chairman of senior director of Investor and industry Analyst Relations for closing remark. Thank you Abigail during Q2, 'twenty, one cambium networks will be presenting and meeting virtually with investors on may 18th at the Needham Virtual technology and media Conference May 20.

At the Jpmorgan Global Technology Media and Communications Conference May 27th at the Barrington Research Virtual Spring investment conference in May 28, with Raymond James Virtual bus tour. The meantime, Youre always welcome to contact our Investor Relations Department at 847 to six four to $1 88 with any questions that arise. Thank you for <unk>.

Joining us and this concludes today's call.

Ladies and gentlemen that concludes today's quarterly earnings call. Thank you for your participation you may now a lot of golf.