Q3 2021 Airspan Networks Holdings Inc Earnings Call

Greetings and welcome to the Air spend networks Holdings third quarter earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If he would like to ask a question. Please press star one on your telephone keypad.

Speaker 1: Greetings and welcome to the Airspan Network's Holdings Third Quarter Earnings Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad.

Speaker 1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker 1: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Brandt, Airspan's Chief Financial Officer. Thank you, sir. Welcome to Carel bad.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host David Brent Air spans Chief Financial Officer. Thank you. Sir. Please go ahead.

Thank you very much.

Speaker 2: The following discussion will include forward looking statements. Comments that are not a statement of fact, including projections or future financial results or other items are considered forward looking and involve risks and uncertainty.

The following discussion will include forward looking statements.

But I noticed statements of fact, including projections for future financial results or other items are considered forward looking and involve risks and uncertainty.

Speaker 2: The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our SEC filings available on our investor website at ir.airspan.com.

The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward looking statements are detailed in our SEC filings available on our investor website at IR <unk> com.

Speaker 2: We encourage you to review our earnings release, which is available on our website.

We encourage you to review our earnings release, which is available on our website.

Speaker 2: On this call, we will discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures, the most directly comparable financial measure, and a reconciliation between the two, see our earnings release and when filed, our form thank you.

On this call, we will discuss certain non-GAAP financial measures.

Identification of non-GAAP financial measures, the most directly comparable financial nature.

The reconciliation between the two see our earnings release and filed our Form 10-Q.

Speaker 2: I will now turn the call over to Air

I will now turn the call over to <unk> CEO, Eric Stang.

Yeah.

Speaker 3: Thank you, David. Good morning, and thank you for joining us for AirSpan's third quarter earnings call.

Thank you David Good morning, and thank you for joining us for air spans third quarter earnings call.

Before we begin.

Speaker 3: I'd like to extend a warm welcome to our new shareholders joining us today.

I'd like to extend a warm welcome to our new shareholders joining us today.

Speaker 3: I would also like to thank the analysts on the call for following the progress in our business.

I would also like to thank the analysts on the call for following the progress in our business.

And finally, a word of appreciation to our employees and partners.

Speaker 3: And finally, a word of appreciation to our employees and partners.

Speaker 3: The last 18 months have challenged us in ways we had not previously imagined possible.

The last 18 months have challenged us in ways, we had not previously imagined possible.

Speaker 3: With offices in 11 countries, our ability to execute our growth strategies required both intense commitment to top tier quality in our products and a high degree of team communication, both of which were tested by the challenges of the pandemic.

With offices in 11 countries, our ability to execute our growth strategies required both intense commitment to top tier quality in our products and a high degree of team communication both of which were tested by the challenges of the pandemic. We are fortunate that our employees around the world remain healthy.

Speaker 3: We are fortunate that our employees around the world remain healthy.

Speaker 3: Thank you to all of you whose hard work is allowing us to thrive during this difficult period.

To all of you, whose hard work is allowing us to thrive during this difficult period.

Speaker 3: Today's call is our first quarterly earnings call since our August 16th listing on the NYSE American exchange under the ticker MIMO.

Today's call is our first quarterly earnings call since our August 16th listing on the NYSE American exchange under the ticker M. I M O Mimo.

My plan for the call is to take you through the enormous opportunity we see in front of us and explain what makes are span unique in our ability to monetize these prospects.

Speaker 3: My plan for the call is to take you through the enormous opportunity we see in front of us and explain what makes Airspan unique in our ability to monetize these processes.

Then our CFO, David Brad will take you through a number of exciting developments in the third quarter with a closer look at our financial results. In addition to the highlights of our recent capital raise.

Speaker 3: Then our CFO , David Brandt, will take you through a number of exciting developments in the third quarter with a closer look at our financial results in addition to the highlights of our recent capital raise. And finally, David and I will take your questions.

And finally, David and I will take your questions.

Please turn to chart five in our presentation.

Speaker 3: Airspan was founded in 1998 to bring real innovation to connecting people to telecom networks.

Eric bandwidth founded in 1998 to bring real innovation to connecting people to telecom networks.

Speaker 3: Since then, we have been on a relatively consistent trajectory.

Since then we have been on a relatively consistent trajectory in short we build the wireless technology that connects users to the cloud.

Speaker 3: In short, we build the wireless technology that connects users to the cloud.

We are a U S based provider of groundbreaking disruptive software and hardware for five G networks and a pioneer in end to end open ran solutions are.

Speaker 3: We are a US-based provider of groundbreaking disruptive software and hardware for 5G networks and a pioneer in end-to-end open RAN solutions.

Speaker 3: AirSpan's products are focused on end-to-end radio access networks, or RANs, as they're known in the industry, including virtualization, base stations, backhaul, and network optimization solutions.

<unk> products are focused on end to end radio access networks or rans as they're known in the industry, including virtualization base stations backhaul and network optimization solutions.

Speaker 3: These products address the approximately 30 billion annual 5G and 4G LTE RAN mark.

These products address the approximately 30 billion annual five G and <unk> LTE ran market.

Speaker 3: critical components of the approximately $200 billion spent on 5G infrastructure build-outs each year.

Critical components of the approximately 200 billion spent on <unk> infrastructure build outs each year.

We are fortunate to have a number of well known respected operators and thought leaders as our customers and suppliers and many of them have become investors as well.

Speaker 3: We are fortunate to have a number of well-known, respected operators and thought leaders as our customers and suppliers, and many of them have become investors as well.

Speaker 3: Having the world's leading 5G chipset provider in the industry in Qualcomm and the world's preeminent hardware manufacturer in Foxconn as financial partners allows us to fight above our weight.

Having the worlds, leading <unk> chipset provider in the industry and Qualcomm and the world's preeminent hardware manufacturer and Fox gone as financial partners allows us to fight above our weight.

Speaker 3: They are joined by a number of financial and operating partners that round out a strategic financing base we are proud to have.

They are joined by a number of financial and operating partners that round out our strategic financing base. We are proud to have.

Speaker 3: Technical innovation is a core part of our story, with hundreds of patents granted or pending due to the groundbreaking work of our nearly 500 R&D and engineering employees around the world in the US, UK, Israel, Turkey, and India.

Technical innovation is a core part of our story with hundreds of patents granted or pending due to the groundbreaking work of our nearly 500, R&D and engineering employees around the world in the U S. The U K Israel.

Turkey and India.

While cutting edge our products have already succeeded at scale in the field, we have shipped 1 million radios to 1000 customers in over 100 countries.

Speaker 3: While cutting edge, our products have already succeeded at scale in the field. We have shipped 1 million radios to 1,000 customers in over 100 countries.

Speaker 3: Today our technologies are key components of some of the largest and most innovative networks in the world.

Today, our technologies are key components of some of the largest and most innovative networks in the world.

Please turn to slide six.

A key attribute of <unk> success has been our industry, leading deployments many of which have been recognized and awarded by a number of our industry organizations.

Speaker 3: A key attribute of AirSpan's success has been our industry leading deployment.

Speaker 3: many of which have been recognized and awarded by a number of our industry organizations.

Speaker 3: We are particularly proud of our network deployment in India for Reliance Jio.

We are particularly proud of our network deployment in India for reliance Geo.

Speaker 3: serving over 400 million customers, as well as our deployment of Rakuten's network in Japan, which is the first fully virtualized 4G and 5G network based on OpenR

Serving over 400 million customers as well as our deployment of racks turns network in Japan, which is the first fully virtualized forging an <unk> network based on open ran.

Speaker 3: Our history of groundbreaking innovation also includes working with Sprint, NLP Mobile, and Softbank on a highly scalable network deployment model as well.

Our history of groundbreaking innovation also includes working with sprint.

T mobile and Softbank on a highly scalable network deployment model as well.

Speaker 3: Reliance and SoftBank went on to become investors in AirSpan, a testament to the capabilities of our product set and the ease of integration in both existing and greenfield networks.

Reliance and Softbank went on to become investors and their spin a testament to the capabilities of our product set and the ease of integration in both existing and Greenfield networks.

Please turn to slide seven.

Speaker 3: Airspan is also proud to supply many of the top telecom service providers around the world.

Air span is also proud to supply many of the top telecom service providers around the world.

Speaker 3: Whether by interacting with a global carrier, private network, or public sector customer, we continue to see excitement from our impressive customer base around our solution.

Whether by interacting with a global carrier private network or public sector customer, we continue to see excitement from our impressive customer base around our solutions.

Speaker 3: As we've grown, we've moved beyond a solely direct sales model, adopting a market channel strategy to accelerate and expand the go-to-market with both channels and many OEMs.

Yeah.

As we've grown we've moved beyond the solely direct sales model adopting our market channel strategy to accelerate and expand the go to market with both channels and many OEM deals.

Speaker 3: We are encouraged by the OEM partners we have in place and are excited to share more in the coming quarters on this.

We are encouraged by the OEM partners, we have in place and are excited to share more in the coming quarters on this front.

Speaker 3: We have a track record of providing quality solutions to Tier 1 mobile network operators around the world, including Rakuten, Reliance Geo, Softbank, and Sprint, now T-Mobile.

We have a track record of providing quality solutions to tier one mobile network operators around the world, including Ratko 10 reliance G O.

Softbank and sprint now T mobile.

Speaker 3: However, our growth potential is not only in our existing addressable customers, such as the traditional incumbent wireless carriers, but also in challengers to the industry such as cable companies.

However, our growth potential is not only in our existing addressable customers such as the traditional incumbent wireless carriers, but also in challengers to the industries such as cable companies.

Speaker 3: Additionally, the private network opportunity is exploding.

Additionally, the private network opportunity is exploding.

Speaker 3: We have seen successes there already, providing the radio access equipment for GOGO's innovative air-to-ground business, and developing cutting-edge technology for connected car applications, including the Clarence, F1 racing team, and NASCAR partner SMT.

We've seen successes there already providing the radio access equipment for Gogo <unk> innovative air to ground business and developing cutting edge technology for connected car applications, including the clearance F. One racing team and NASCAR partner S. M T.

Please turn to slide eight.

Yeah.

Speaker 3: The demand for connectivity has grown exponentially in recent years, a trend accelerated by the global pandemic.

The demand for connectivity has grown exponentially in recent years, a trend accelerated by the global pandemic.

And users today expect reliable high speed access to data and applications in all settings from virtual work to the office and from entertainment to gaming.

Speaker 3: End users today expect reliable, high-speed access to data and applications in all settings from virtual work to the office and from entertainment to gaming.

Speaker 3: This voracious data appetite has driven the need for upgraded 5G infrastructure.

For Asia data appetite has driven the need for upgraded five G infrastructure.

Speaker 3: As incumbent, challenger, and novel use cases are built out, we are in the middle of the largest CapEx telecom cycle on decades and an unprecedented broadening of the potential customer base for air spend to pursue. This shift in technology.

As incumbent.

Challenger and novel use cases are built out we are in the middle of the largest capex telecom cycle in decades, and an unprecedented and broadening of the potential customer base for air spend to pursue.

This shift in technology to accommodate faster speeds. It means a lot more cells and a lot more software and that requires more processing power at the edge of the network exactly the area, where we excel.

Speaker 3: means a lot more cells and a lot more software. And that requires more processing power at the edge of the network, exactly the area where we excel.

In addition to more customers.

Speaker 3: 5G networks require an order of magnitude greater volume of software licenses and services and RAN radio.

Five gene networks require an order of magnitude greater volume of software licenses and services and ran radios.

Speaker 3: Those attributes line up perfectly with our domain expertise and product set, which is part of what gives us great confidence of the opportunities ahead for air.

Those attributes line up perfectly with our domain expertise and product set which is part of what gives us great confidence of the opportunities ahead for air span.

Speaker 3: To give a sense of scale, over the last few years, global 5G subscribers increased from 15 million to 400 million.

To give a sense of scale over the last few years global <unk> subscribers increased from 15 million to $400 million.

Speaker 3: By 2025, that number is expected to reach 3.4 billion, making this a very deep mark.

By 2025.

That number is expected to reach $3 4 billion, making this a very deep market.

Speaker 3: Given this profile and additional accelerators, which we will discuss in a moment, I often refer to this as the 5G tsunami.

Given this profile and additional accelerators, which we will discuss in a moment I often refer to this as the five G tsunami.

Please turn to slide nine.

Speaker 3: It's not only the fact that CapEx is exploding from network transformation as we move from 4G to 5G.

It's not only the fact that Capex is exploding from network transformation as we move from <unk> to <unk>.

Speaker 3: It is also the way in which this is happening that is so important to air span.

It is also the way in which this is happening that is so important to air span.

The maps you see.

Speaker 3: Represented deployment we did for Sprint, now P-Mobile, in Long Island, New York.

Represented deployment, we did for sprint now.

Now T mobile in long Island, New York.

Speaker 3: The 50 or so large macro towers on the left took about 15 years to permit and bill.

The 50, or so large macro towers on the left took about 15 years to permit and build.

Speaker 3: As this network was densified, we installed more than 20,000 cells in nine months, propelling the operator from fourth position to first position.

As this network was densify, we installed more than 20000 cells in nine months propelling the operator from fourth position to first position.

Speaker 3: The results were tangible and powerful for our customers.

The results were tangible and powerful for our customer.

Speaker 3: To put these changes in context, there are approximately 120,000 towers up in the US, serving mostly 4G networks.

To put these changes in context, there are approximately 120000 towers in the U S serving mostly <unk> networks.

Speaker 3: We estimate in the move to 5G, that number will exceed 1 million cells in the US alone.

We estimate in the move to five G that number will exceed 1 million sales in the U S alone.

So between carrier and private use cases.

Speaker 3: You have exponential growth in the number of 5G networks, but also given the characteristics of 5G radios, you have enormous growth in the number of radios per network.

Do you have an exponential growth in number of five G networks, but also given the characteristics of <unk> radios, you have enormous growth in the number of radios per network.

Speaker 3: These dynamics are what give us tremendous confidence in our opportunity going forward and have already paid meaningful dividends in our work with our existing large customers. Please turn to...

These dynamics are what give us tremendous confidence in our opportunity going forward and have already paid meaningful dividends and our work with our existing large customers.

Yeah.

Please turn to slide 10.

Now, let's talk about our key markets.

Today <unk> operates in the three markets using wireless infrastructure software and hardware, namely global carrier markets private networks and fixed wireless access applications.

Speaker 3: Today, AirSpan operates in the three markets using wireless infrastructure software and hardware.

Speaker 3: namely global carrier markets, private networks, and sixth wireless access application.

Speaker 3: While we've touched on global carriers, we see explosive growth in the other two segments as well.

While we've touched on global carriers, we see explosive growth in the other two segments as well.

Speaker 3: Our fixed wireless access business, MOMOSA, purchased in 2018, has doubled revenues since we acquired it and we expect to double it again over the next few years.

Our fixed wireless access business Moshe purchased in 2018 has doubled revenues since we acquired it and we expect to double it again over the next few years.

Speaker 3: Regarding private networks, we generally sell here through enterprise partners.

Regarding private networks, we generally sell here through enterprise partners the customer demand here as large from some of the most prominent companies in the world and this segment didn't exist prior to the latest technologies.

Speaker 3: customer demand here is large from some of the most prominent companies in the world and this segment didn't exist prior to the latest technology.

Speaker 3: The use cases in this segment are endless. Power and communications for the IoT Internet of Things.

The use cases in this segment are endless power and communications for the Iot Internet of things the.

Speaker 3: the factory and warehouse floor, stadiums, corporate and university campuses, air-to-ground communications and connected car.

The factory and warehouse floor stadiums corporate and University campuses.

Air to ground communications and connected cars.

Speaker 3: One private network build out we are particularly excited about is with Aeroground communications provider Gogo.

One private network build out we are particularly excited about is with air to ground communications provider Gogo.

Speaker 3: We supply the radio hardware and software for what we believe will be the largest private network in the world so far, covering the entire US. Stay tuned for more progress on that partnership.

We supply the radio hardware and software for what we believe will be the largest private network in the world So far covering the entire U S.

Stay tuned for more progress on that partnership.

Please turn to slide 11.

Speaker 3: While the industry secular tailwinds for 5G are driving the largest capex cycle in decades, Western governments and the politicization of 5G have acted as strong accelerators of the adoption and growth of these technologies.

While the industry secular tailwind for five G are driving the largest capex cycle in decades, western governments and the politicization of five G have acted as strong accelerators of the adoption and growth of these technologies.

Speaker 3: These accelerators include direct funding to bridge the digital divide.

These accelerators include direct funding to bridge the digital divide.

Speaker 3: geopolitical tailwinds from Western governments' dismissal of Huawei equipment in their networks, and a resulting push for supply chain diversity away from the large legacy infrastructure providers.

G O political tailwind from western governments dismissal of Huawei equipment in their networks, and the resulting push for supply chain diversity away from the large legacy infrastructure providers.

Speaker 3: Wireless networks have become national priorities in solving the digital divide, particularly in rural domestic areas and underserved urban districts.

Wireless networks have become national priorities and solving the digital divide, particularly in rural domestic areas and underserved urban districts.

Speaker 3: In the United States, $15 billion of previously funded initiatives are just first being bid and allocate.

In the United States 15 billion of previously funded initiatives are just first being bid and allocated.

Speaker 3: while the recently passed infrastructure bill provides an additional $65 billion for broadband deployment nationwide.

While the recently passed infrastructure Bill provides an additional 65 billion for broadband deployment nationwide.

Being positioned as the only U S based fully integrated radio access company gives us a meaningful advantage in our ability to compete successfully for these projects.

Speaker 3: Being positioned as the only U.S.-based fully integrated radio access company gives us a meaningful advantage in our ability to compete successfully for these projects.

Speaker 3: And these government initiatives are not limited to the United States alone.

And these government initiatives are not limited to the United States alone. We expect billions of dollars of programs. Some are already underway and Germany and in the United Kingdom as an example, with more to come around the world.

Speaker 3: We expect billions of dollars of programs, some already underway, and Germany, and in the United Kingdom as an example, with more to come around the world.

Please turn to slide 12.

Speaker 3: In addition to our technological advantages and equipment integrations that take minutes instead of months...

In addition to our technological advantages and equipment integrations to take minutes instead of months.

Speaker 3: We also fit in a unique position in our industry, given the competitive landscape.

We also sit in a unique position in our industry given the competitive landscape.

Speaker 3: On the incumbent side, legacy vendors continue to push a large flow to change centralized network, meaning all network hardware and software is...

On the incumbent side legacy vendors continue to push a large slow to change centralized network.

Meaning all network hardware and software is proprietary.

As far as niche players they generally suffer from one drawback or another.

Speaker 3: As far as niche players, they generally suffer from one drawback or another.

Speaker 3: whether difficulty with reliability, lack of integrated hardware and software offerings, or lack of experience in large scale rollouts.

Weather difficulty with reliability lack of integrated hardware and software offerings or lack of experience in large scale rollouts.

In addition, we.

Speaker 3: we bring a distributed software driven approach to a traditionally capital intensive network equipment industry.

We bring a distributed software driven approach to a traditionally capital intensive network equipment industry.

Speaker 3: we can see that this is being adopted by several M&Os. For instance, Dish announced a partnership with Amazon.

We can see that this is being adopted by several Msos for instance, dish announced the partnership with Amazon.

Speaker 3: many of the full Open RAN software is going to run in the cloud. This substitutes lower OPEX for traditionally large CAPEX. So we'll see a lot of innovation with this architecture.

Many of the full open ran software it's going to run in the cloud.

This substitutes lower opex for traditionally large capex.

So we'll see a lot of innovation with this architecture.

Please turn to slide 13.

Speaker 3: Our end-to-end RAN solution means a one-stop shop to buy a fully integrated 5G network or parts of it to integrate with other vendors.

Our end to end Rand solution means a one stop shop to buy a fully integrated five G network or parts of it to integrate with other vendors.

Speaker 3: This end-to-end experience gives us a global systems view, having the hardware and software skill to obtain the highest performance and extrapolating this when integrating with other vendors, like in the case of Racket.

This end to end experience gives us a global systems view, having the hardware and software skill to obtain the highest performance and extrapolating. This when integrating with other vendors like in the case of Raki 10.

Our solutions are based on open standards, which simplifies the management and monitoring of these products.

Speaker 3: Our solutions are based on open standards, which simplifies the management and monitoring of these products.

Speaker 3: This can be done with our tools or with third party applications.

This can be done with our tools or with third party applications.

Speaker 3: We provide a 5G RAM network that offers peace of mind to our customers by designing a secure and resilient solution, easy to install, to integrate and to manage.

We provide a five G ran network that offers peace of mind to our customers by designing a secure and resilient solution easy to install to integrate and to manage.

Speaker 3: AirSpan 5G RAN networks update seamlessly to the latest software releases to keep supporting groundbreaking applications and use cases for our highly demanding customers.

Air span five G ran networks update seamlessly to the latest software releases to keep supporting groundbreaking applications and use cases for our highly demanding customers.

Please turn to slide 14, as we look out into the next few years, we translate the Tam in the tens of billions of dollars into our project funnel of 3 billion across customer types.

Speaker 3: As we look out into the next few years, we translate the TAM in the tens of billions of dollars into a project funnel of three billion across customer type.

Speaker 3: These are customer segments we're currently engaged with and where we have a solid plan to roll out our product.

These are customer segments were currently engaged with and where we have a solid plan to rollout our products.

Speaker 3: As we transition into the financials, this is a great point to turn it over to David Brandt, Airspan CFO .

As we transition into the financials. This is a great point to turn it over to David Brad <unk> CFO.

Thanks, Eric.

Turn to slide 16.

Speaker 2: 2021 has been an exciting year of product innovation and revenue growth for Airspan.

2021 has been an exciting product innovation and revenue growth for <unk>.

Speaker 2: In addition, on August 13th, Airspan completed its business combination with Newth Beginnings Acquisition Corp.

In addition on August 13, as bank completed business combination with new beginnings acquisition Colby.

Speaker 2: The business combination and the concurrent private equity and debt capital raise produced $115.5 million in net cash proceeds.

The business combination and the concurrent private equity and debt capital raise produced $115 5 million in net cash pricing.

Speaker 2: Year to date we have had revenue of $127 million, up 39% over 2020.

Year to date, we have had revenue of $127 million up 39% over 2020.

Speaker 2: products and software licenses revenue in that period was up 76%.

Products and software licenses revenue in that period was up 76%.

Speaker 2: We have strong gross margins year-to-date of 45%, up dramatically from 2018's 32% as we broaden our customer type and continue to add more software content in our product meet.

We have strong gross margins year to date of 45% up dramatically from 2000 Eighteen's, 32%.

Broaden our customer type and continue to add more software content in our product mix.

Speaker 2: Gross profit for 2021 through September the 30th was 57 million up 22% over the prior year.

Gross profit for 2021 through September 30 was $57 million up 22% over the prior year.

Speaker 2: We have continued to diversify our customer mix both in size and geography.

We have continued to diversify our customer customer mix, both in size and geography.

Speaker 2: Turning to slide 17, we saw revenue this quarter of 38.9 million, up 8% from 36 million in the same period last year.

Turning to slide 17, we saw revenue this quarter of $38 9 million up 8% from $36 million in the same period last year.

Speaker 2: Products and software licenses revenue, which exclude a legacy maintenance contract which expired earlier this year were 32.4 million up 29% from last year's third quarter.

Products and software licenses revenue, which exclude the legacy maintenance contract, which expired earlier this year with $32 4 million up 29% from last year's third quarter.

We are encouraged by strong revenues from existing customers and expanding revenue and fixed wireless access after a record second quarter.

Speaker 2: We are encouraged by strong revenue from existing customers and expanding revenue in fixed wireless access after a record second quarter.

Speaker 2: Each of our largest customers placed a new purchase order in the quarter, in addition to exciting orders on behalf of a tower company and our first purchase order from a second domestic cable company.

Each of our largest customers placed a new purchase order in the quarter. In addition to exciting orders on behalf of the company and our first purchase order from a second domestic cable company.

Speaker 2: We also received a purchase order from a major technology company for equipment to power connectivity on over 20 of their corporate campuses.

We also received a purchase order from a major technology company for equipment to power connectivity on over 20 of their corporate campuses.

Speaker 2: Gross profit of 17.1 million was essentially flat to last year's 17.3 million. Third quarter net loss was 27 million compared to a net loss of 9.9 million for the third quarter of 2020. Adjusted EBITDA was a loss of 10.4 million compared to a loss of 6 million in the year ago period.

Gross profit of $17 1 million was essentially flat to last year $17 3 million.

Third quarter net loss was $27 million compared to a net loss of $9 9 million for the third quarter of 2020, adjusted EBITDA was a loss of $10 4 million compared to a loss of $6 million in the year ago period.

Gross margin was 44% down from 48, 1% in last years third quarter with the majority of the variance due to supply chain pressures.

Speaker 2: Gross margin was 44%, down from 48.1% in last year's third quarter, with the majority of the variance due to supply chain pressures.

These effects centered primarily around higher spot purchase prices the hardware components and expedited shipping expenses.

Speaker 2: These effects centered primarily around higher spot purchase prices for hardware components and expedited shipping expenses.

Speaker 2: While we have begun to pass some of these expenses on through price increases, we expect the increased cost impact of components to continue into 2022.

While we have begun to pass some of these expenses on three price increases we expect the increased cost impact of component to continue into 2022.

While the product.

Speaker 2: While the product growth is strong, supply chain challenges led to the delay of approximately 20 million of shipments in the third quarter to one of our largest customers alone.

Is strong.

Fly chain challenges led to the delay of approximately $20 million of shipments in the third quarter to one of our largest customers alone.

Speaker 2: We are working hard in a number of ways to mitigate supply chain challenges.

We are working hard in a number of ways to mitigate supply chain challenges.

Speaker 2: in finding alternative components, looking critically at our designs, and working closely with our partners Foxconn and Qual.

In finding alternative components looking critically at our designs and working closely with our partners on Qualcomm.

Speaker 2: However, we expect such supply chain challenges to continue into 2022.

However, we expect supply chain challenges to continue into 2022.

Speaker 2: Please turn to slide 18 and I'll take you through the outlook for our business.

Please turn to slide 18, and I'll take you through the outlook for our business.

Speaker 2: While encouraged by our near-time business prospects, we are cognizant of the supply chain environment.

While encouraged by near term business prospects, we are cognizant of the supply chain environment.

Speaker 2: Balancing these factors, we expect Q4 2021 revenue of $54 million at a 44% gross margin.

Balancing these factors, we expect Q4 2021 revenue of $54 million at a 44% gross margin.

Speaker 2: Looking out to next year, we anticipate top-line growth in a range of 20-25% accelerating through the year to a fourth quarter 2022 annual run rate in the range of $270-300 million.

Looking out to next year, we anticipate top line growth in a range of 20% to 25% accelerating through the year. So our fourth quarter 2022 annual run rate in the range of $270 million to $300 million.

Speaker 2: We expect an increase in gross margin to 47% for the full year 2022 and continue to target a long term gross margin of over 50%.

We expect an increasing gross margin to 47% for the full year 2022, and continue to target a long term gross margin of over 50%.

Speaker 2: With that, Eric and I will open it up to your questions.

With that Eric and I will open it up for your question.

Speaker 2: Operator, please prompt for questions. Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the...

Operator, please prompt for questions.

Thank you ladies and gentlemen, the floor is now open for questions. If he would like to ask a question. Please press star one on your telephone keypad at this time.

A confirmation tone will indicate your line is in the question queue you.

You May press star two if he would like to remove your question from the queue.

Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again that is star 1 to red.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Once again that is star one to register a question at this time.

Speaker 1: Our first question is coming from George Nauter of Jefferies. Please go ahead.

Our first question is coming from George Notter of Jefferies. Please go ahead.

Speaker 4: Hi, guys, thanks very much. I guess lots of questions here. I guess maybe I'll just start by trying to better understand the supply chain impacts that you guys are seeing. I think you said you had $20 million in shipments you couldn't make in the quarter to just one customer. Is that can you give us the total impact on revenue for the quarter and then

Hi, guys, thanks very much.

I guess.

Lots of questions here, I guess, maybe I'll just start by.

Trying to better understand the supply chain impacts that you guys are seeing I think you said you had $20 million in shipments you could make in the quarter to just one customer or is that can you give us the total impact on revenue for the quarter and then.

Speaker 4: maybe give us a sense for how that impacted gross margins also. And then I was curious about the supply chain impact that you expect in Q4. And also, do you expect the supply chain impact to continue into 2022?

Maybe give us a sense for how that impacted gross margins also and then I was curious about the supply chain impact that you expect in Q4, and then also do you expect the supply chain impact to continue into 2022 and <unk>.

Speaker 4: and how much might that be in terms of revenue and margin impact. Any more flavor you can give us on that one.

How much might that be in terms of revenue and margin impact. So any more flavor you can give us on that would be great.

Speaker 3: Okay, hi, George, Eric, I'll start and David can fill in some as well. So yes, we had

Okay, Hi, George Eric I'll start and David can fill in some as well so yes, we had significant.

Speaker 3: Significant challenges in the third quarter, chipset decommits that came in along the way and that pushed some of the deliveries from third quarter into 4Q. It was a bigger number than 20 million that was delayed. And in fact, some of that won't go out until 2021, excuse me, 2022.

Challenges in the third quarter chipset decommit debt that came in along the way and that pushed some of the deliveries from third quarter into <unk>. It was a bigger number than $20 million that that was delayed and in fact some of that won't go out until 2021 excuse me 2022.

Speaker 3: We had component issues with the bigger partners like Intel and Qualcomm. We also have a series of

We had component issues with with a bigger partners like Intel and Qualcomm and we also have a series of folks like Sky works that had shortages in wafers coming out of Taiwan semiconductor.

Speaker 3: folks like Skyworks that had shortages and wafers coming out of Taiwan. Semiconductor.

Speaker 3: And we're managing this by, as we said in the script, engineering alternative parts to the extent we can, buying parts on the spot market, and also looking for simplistic designs that are used in multiple places as opposed to more bespoke products that have less overall worldwide volume.

And we're managing this by as we said in the in the script.

Engineering alternative parts to the extent, we can buying parts on the spot market and also.

Looking for simplistic designs that are used in multiple places as opposed to more bespoke products that have less overall worldwide volume.

Speaker 3: We see in the fourth quarter at least 40 million of product we had intended to ship this year that will flip out into next year. So it's a continuing issue. Again, we're fortunate to have robust demand and that's allowing us to continue to see our growth as exciting as it is. What it does mean for 2022, of course.

We see and in the fourth quarter at least $40 million.

<unk> product, we had intended to ship this year that will slip out into next year. So it's a continuing issue again, we're fortunate to have.

Robust demand and that's allowing us to continue to see our growth is as exciting as it is what it does mean for for 22 of course is it is a more moderate outlook really the conversion factor.

Speaker 3: is a more moderate outlook. Really the conversion factor throughout the year is what we're concerned about. If parts are coming in with a seven or eight or nine month lead time that used to come in with a 12 or 16 week lead time, that requires a lot more thinking in terms of our build plan.

Throughout the year is what we're concerned about if if parts are coming in with a seven or eight or nine months lead time that used to come in with a 12 to 16 week lead time that requires a lot more thinking in terms of our build plan for the year. So we're being conservative there David.

Speaker 3: being conservative there. David, you might want to add some specifics on what it is.

David you might want to add some specifics on what it is yes.

Margin line.

Speaker 2: Yes, thank you, thanks for the question, George. So we mentioned in Q3 that we estimated the impact of approximately 3% or 3 percentage points of margin that were impacted. And I think we see the same in Q4 and...

Yes. Thank you all right. Thank you. Thanks for the question George So we mentioned in our in Q3 that we estimated the impact of approximately 3% or three percentage points on <unk>.

Of margin that were impacted and I think we see the same in Q4.

Yeah.

Speaker 2: and modeling out into the beginning of 2022. So it's

And modeling out into the beginning of.

Of 2022.

It's.

Speaker 2: I hope that it eases as we get into Q2 and onwards, but we're being cautious in how we see the impact. And it is increased components that we are...

I hope that it eases as we get into Q2 and onwards, but.

But we're being cautious in how we see the the.

The impact and it is increased components that we are we.

We are.

Speaker 2: competing with other people and the grey market has a significant increase in the prices and also shipping costs and lead times are extending. So that's what we're seeing at the moment.

Competing with other people.

The gray market is.

Yeah.

A significant increase in the pricing and also shipping costs and lead times are extending.

That's what we're seeing at the moment.

Speaker 4: Got it. Okay, that's helpful. And can you give us some sense for the demand side of things? I mean, any metrics you can share in terms of year on year order growth or backlog, anything that can kind of give us clues into that would be great.

Got it Okay. That's helpful. And then could you give us some sense for the demand side of things I mean any metrics you can share in terms of year on year order growth or.

Backlog.

Anything that can kind of give us clues into that would be great.

Speaker 3: Yeah, just speaking generally, the demand side is strong and the number of additional customers we're adding is robust. We aren't going in much more detail on that at the moment, but it's definitely heartening to be getting the number of new.

Yeah, just speaking generally that the demand side is strong and the number of additional customers. We're adding is robust we aren't.

Going in much more detail on that at the moment, but it's it's definitely heartening to be getting the number of new significant customer faces in our universe and we're seeing you know the markets and the three sectors that we talked about each showing robust demand. We did get orders from all four of our leading customers in the third quarter. So theres been no change.

Speaker 3: significant customer faces in our universe. And we're seeing, you know, the markets in the three sectors that we talked about, each showing robust demand. We did get orders from all four of our leading customers in the third quarter. So there's been no change of strategy or demand or direction and that's a very good thing.

The strategy or or demand or direction.

And that's a very good thing.

Got it.

Speaker 4: Okay, and then I think you mentioned this on the call. You talked about the cable MSO opportunity. I guess I was just interested in.

Okay.

And then.

I think you mentioned this on the call.

You talked about the cable MSL opportunity I guess I was just interested in.

Speaker 4: hearing more, it sounds like you had a new customer that came in with with orders. Any more you can say about that? I know that there was a large customer that was doing a trial in a significant sort of metro area, and looking at potentially a broader rollout. Is that is that customer opportunity still in the works for you guys? Or?

Hearing it sounds like you had a new customer that came in with with orders.

Any more you can say about that I know that there was a large customer.

It was doing a trial in a significant sort of metro area.

Looking at potentially a broader rollout is that is that the customer opportunity is still in the works for you guys or.

Speaker 4: Yeah, yeah, we're very excited about the challengers and that opportunity is very much in the works. We're just concluding testing phases there as on schedule and so that will be.

Can you tell us okay. Yeah, Yeah, we're very excited about the challengers and that that opportunity is very much in the works.

We're just concluding testing phases there.

Schedule and so that will be.

Speaker 3: an interesting part of our first part of next year with the potential to turn into a significant cap expend. So absolutely no

An interesting part of our first part of next year with the potential to turn into a significant capex spend so absolutely no.

It was as exciting as ever and I think the challenge our case is as compelling as ever vis vis the <unk> options that they are also presented with and then we're excited we've added a second a second potential customer is there and so we see this as robust as ever and I think our products are very unique.

Speaker 3: It was exciting as ever, and I think the Challenger case is as compelling as ever vis-a-vis the BMPO ops.

Speaker 3: that they are also presented with. And then we're excited we've added a second, a second potential customer is there. And so we see this as robust as ever. And I think our products are very unique in this area.

In this area.

Okay, all right I'll pass it on thanks, very much guys.

Thanks, John King.

Speaker 1: Thank you. Our next question is coming from Pierre Ferragru of New Street Research. Please go ahead.

Thank you. Our next question is coming from Peter If there are a group of New Street Research. Please go ahead.

Speaker 5: Hey, hey dude, hey Eric, thanks for taking my question.

Hey, Hey, David Hey, Eric Thanks for taking my question.

Speaker 5: So, yeah, I'm trying to what I'd like to try to do and maybe it's a bit of a stretch is kind of understand, you know, versus what you communicated in June for the next like for five quarters. You know, understand.

So yes.

I'm trying to what I would like to try to do it maybe it's a bit of our strategies kind of understand you know versus what.

What you've communicated in June.

The next like four five quarters.

I understand.

Speaker 5: in the difference in terms of revenue trajectory, what could be clearly allocated to supply constraints and whichever other driver we should take into account in terms of projects being delayed or significant rollouts.

The difference in terms of revenue. Additionally, what could be clearly allocated to <unk>.

Supply constraints and.

Which of your oil driver, we should take into account in terms of projects being delayed of significant rollouts.

Speaker 5: being playing out at a lower scale than you were initially anticipating or anything like that. First of all to get the baseline right, if I understand well, you guys had like a 20 million shots for this quarter it's mostly

Being.

At the loyal scales anyway, and you said, you're anticipating or anything like that so.

First of all just gives a baseline right. So if I understand well.

You guys had like a 20 million shortfall this quarter.

Mostly.

Speaker 5: supply constraints, then you're kind of like 40 million below where you thought you would be for next quarter.

The supply constraint than youre kind of like $10 million.

Where you thought you would be for next quarter.

Speaker 5: And for the overall next year, you are at the 100 and the million below. And with a clear projectile of things catching up towards the back end of that year. So question one is, is that the right way to think about it? And question two, how much of that is really the table, stuff like on train that on which first of March and any other driver of this like revision, we should be aware of.

And for the overall next year.

And we should see a project so you have things catching up to us.

Back end of that so question. One is is that the right way to think about even question two how much of that is really the table supply constrained.

So imagine any of the driver of this.

Slight revision, we should be aware of.

Yes, hi, guys.

David.

Speaker 2: I was thinking, thanks for the question Pierre, I mean, one of the challenges that we have in looking out is that the lead times have extended to such an extent that our 12...

I was thinking you got it thanks for the question.

The one of the challenges that we have been looking and looking out is the.

Lead times are extended to such an extent that.

Our 12 12 week lead times attorney into eight months lead times and we're bringing.

Speaker 2: 12-week lead times are turning into 8-month lead times and we're bringing the components in as fast as we can and expediting those, but that has an impact on what we can do for orders and how we can drive it. So I think very much supply chain driven is how we're thinking of 2022.

The components going as fast as we can and expediting those but that has an impact on what we can do for orders and how we can drive it. So I think very much supply change chain driven is how we're thinking of.

2022.

Yeah, I would just like that we've seen no no slowdown in.

Speaker 3: Yeah, I would just like to add we've seen no slowdown in demand and interest. So the challenge is in execution. That's what we're very focused on. And I think that, as David said, this problem will begin to alleviate in the second half of the year. We are being very conservative for the first half of next year, recognizing the landscape of silicon and associated component, de-commits, commits, pull-ins, you know, spending extra money for extra parts in a prudent way. And that's what we're doing.

And demand and interest so the challenges and execution. That's what we're very focused on and I think that as David said. This problem will begin to alleviate in the second half of the year, we are being very conservative for the first half.

Next year recognizing.

The landscape of silicon and associated component Decommit commits pull ins spending an extra money for extra parts in a prudent way and that's why we have a.

Speaker 3: why we have a less bullish expectation for the first couple quarters of the year.

A less bullish expectation for the first couple of quarters of the year.

Great Thanks for that.

Speaker 1: Our next question is coming from Chris Howe of Barrington Research. Please go ahead. Good morning, Eric. Good morning, David. Good morning, Eric.

Thank you. Our next question is coming from Chris Howe Barrington Research. Please go ahead.

Good morning, Eric Good morning, David.

Hey, Chris.

Alright.

Speaker 4: Another question, I suppose, on the supply chain, but then I'll get to...

Another question I suppose on the supply chain, but then I'll get to.

Questions that I have.

Speaker 4: questions that I would more like to ask.

Would more like to ask.

Speaker 4: You talked about the impact in the quarter, $20 million from the large customer.

You talked about the impact in the quarter $20 million from the large customer.

Speaker 4: greater than that amount if we look at the totality of the supply chain in the quarter. Do you have a number of what that was year to date on supply chain related issues and other logistical challenges?

Greater than that amount, if we look at the totality.

The supply chain in the quarter.

Do you have a number of what that was year to date.

On supply chain related issues and other logistical challenges.

Speaker 2: I would say that where it is 20

I would say that.

'twenty.

Speaker 2: plus million. It's not over 30 million, but it's probably about 20 million. It really started biting in the third quarter, where we found decommits of a single component would stop the build. So it was third quarter that I think was the biggest driver there.

Plus million.

The community they put about $20 million it really it really started biting in in the.

Third quarter.

But where we found decommit wood.

<unk>.

Single component would stop the build so it was then.

Quarter that I think the biggest driver of that Chris.

Speaker 3: Yeah, but on 4Q, we have about 40 million in hand that we could deliver that we won't be able to deliver.

Yeah, but on for Q, we have about $40 million in hand that we could deliver that we won't be able to deliver.

Speaker 3: Again, more component decommits, some success pulling in stuff. We fight every day on this. But on balance, it's about $40 million in the fourth quarter.

Again more more component Decommit some success pulling in stuff we fight every day on this.

But on balance it's about $40 million in the fourth quarter as well.

Speaker 4: Okay. The total year-to-date number, do you have that?

Okay.

The total year to date number do you have that.

Uh huh.

Speaker 3: We haven't spread it out that way because some of the 3Q slips into 4Q, but it's reasonable to think it's a number in excess of 40.

We spread it out that way because some of the <unk> slips into <unk>, but it's reasonable to think it's a.

A number in excess of 40%.

Okay.

Speaker 4: Okay, and then I wanted to ask a question on slide 13. We've seen this slide before. As we think about these challenging issues in the environment, can you talk about the software end of the business?

And then I wanted to ask a question on slide 13, we've.

We've seen this slide before.

As we think about these challenging issues and the environment can you talk about.

The software and of the business and how you see that evolution over the next 12 months and perhaps as we accelerate into the latter half or into the fourth quarter of the next calendar year.

Speaker 4: and how you see that evolution over the next 12 months. And perhaps as we accelerate into the latter half or into the fourth quarter of the next calendar year, this starts to offset.

This starts to offset.

Speaker 4: some of the supply chain challenges and could lead to further gross margin potential as we get beyond the 50% mark.

Some of the supply chain challenges and could lead to further gross margin potential as we get beyond the 50% marker.

Yeah.

Speaker 3: Yeah, we're doing really well on software. We have introduced and we did a press release on the IODT interconnect that we succeeded on with Qualcomm, which enables our software CU and DU to drive the CBRS handsets that are now proliferating in the US.

Yeah, we're doing really well on software we have introduced and we did a press release on the Iot T.

Interconnect that we succeeded on with Qualcomm, which enables our software.

You and do you to drive the.

C. B R. S handsets that are now proliferating in the U S.

Speaker 3: And that's a big accomplishment in two aspects of our product line. It's in the products that are all in one, such as the strand mount product that we make, enabling some of these challengers to roll out CBRS now using a very good architecture and pay us for the software, I should add that. It's a distinct...

And that's that's a big accomplishment in two aspects of our product line. It's in the in.

In the products that are all on one such as the strand Mount product that we make.

Enabling some of these challenges the rollout cbr's now using a very good architecture and pay us for the software I should add that it's it's a distinct.

Revenue stream for us.

Speaker 3: And then also in our virtualization efforts, we're doing a lot on virtualization. We're doing a lot of bids now and also transactions where we are licensing and selling our CUD software, sometimes powering third party hardware. And so this is a very new growth area for us. A lot of partnerships with OEMs that we've announced and mentioned and more to come. And this is really bringing this set of solutions into the private 5G side.

And then also in our virtualization efforts, we're doing a lot on virtualization, we're doing a lot of our bids now and also transactions, where we are licensing in selling our <unk> software, sometimes powering third party hardware and so this is a very new growth area for us a lot of partnerships with Oems that we've announced.

<unk> mentioned and more to come.

And this is really bringing this set of solutions into the private five G side.

Speaker 3: In addition, a very strong set of specialty applications and software such as we do with air to ground, where we actually modify the air interface, we put a lot of our intellectual property into controlling moving objects, very useful obviously in air to ground, potentially very useful in connected car, connecting the metaverse. So we've got a really strong portfolio there now that'll start to make significant contributions in 2020.

In addition of a very strong set of spur.

Specialty applications and software such as we do with air to ground, where we actually modify the air interface.

Put a lot of our intellectual property into controlling moving objects very useful obviously, an air to ground potentially very useful in connected car connecting the meta versus so we got a really strong portfolio. There now that will start to make significant contributions in 2022.

That's great.

Speaker 4: Great. And my last question here, just surrounding the initial guidance for fiscal year 22, calling for 20 to 25% revenue growth in that range that you mentioned.

And my last question here.

Just surrounding the initial guidance for fiscal year, 'twenty, two calling for 20% to 25% revenue growth.

In that range that you mentioned.

Speaker 4: Can you provide some additional color as to the composition of that growth?

Can you provide some additional color as to the composition of that growth.

Speaker 4: how that growth is today from where it was perhaps three to six months ago and what you're seeing underneath.

And how that growth is today from where it was perhaps three to six months ago.

And what Youre seeing.

Underneath that guidance.

Yeah.

Speaker 2: Yes, so the growth we're seeing, as Eric said, we're cautious of the first half of the year and we see it going up to the...

Yes.

The growth we're seeing is as Eric said, we are cautious of the first half of the year and we see it going up to the.

Sure.

Speaker 2: the $27,300 million annualized in Q4.

The 270 300 million annualized in Q4.

Speaker 2: The mix I see is being continued growth of fixed wireless access products. There will be more 5G in private networks and I think that they will become bigger percentages of that revenue as opposed to our incumbent...

The mix the mix I see as being continued growth of fixed wireless access products that will be more more five GM private networks and I think that they will become bigger percentages of that revenue as opposed to our.

Incumbent carrier revenue.

Speaker 3: Yeah, that said, we're also going to see substantial increase in the challenger sector. So cable networks and the private networks such as air to ground, a substantial increase in revenue with orders already in hand.

Yeah that said, we're also going to see substantial increase in the challenge your sector. So cable networks and the private networks, such as air to ground a substantial increase in revenue with with orders already in hand.

Yeah.

Okay. Thank you for taking my questions.

Thank you Chris.

Once again, ladies and gentlemen, if you do have a question. Please press star one on your telephone keypad at this time.

Speaker 1: Once again, ladies and gentlemen, if you do have a question, please press star 1 on your telephone keypad at this time.

Speaker 1: Our next question is coming from Franco Gronda of DA Davidson. Please go ahead.

Our next question is coming from Franco Granda of D. A Davidson. Please go ahead.

Speaker 6: Yeah, good morning everyone. Thank you for taking my questions. So I wanted to touch back on the fixed wireless opportunity. You talked about how revenue side memos have doubled since you acquired it and you're looking to double that again. Can you perhaps talk about what that looks like over time? Perhaps, you know, which of the new products that you've introduced recently should be some of those big drivers or is there something that you still need to click the gap on technology-wise to accomplish that?

Yeah. Good morning, everyone and thank you for taking my questions.

So I wanted to touch back on the fixed wireless opportunity you talked about how revenues I mean Melissa.

Since you acquired it in June looking to double that again.

Can you, perhaps talk about what that looks like over time, perhaps sooner, which one what sort of the new products that you've introduced recently it should be some of those big drivers. So it sounds like that.

You still need to close the gap on technology wise to accomplish that.

Speaker 3: Yeah, it's a really a good question and we are so excited about our portfolio and what we've done with the mimosa product line. We've introduced recently and announced publicly a gigabit

Yeah, It's a it's a really good question and we are so excited.

Fitted about our portfolio and what we've done with them in most of the product line, we've introduced recently and announced publicly a gigabit plus solution.

Speaker 3: Plus solution, we estimate were at least a year ahead of any competitor bringing product, even the dominant names in the space.

We estimate we're at least a year ahead of any competitor, bringing products, even even the dominant names in the space and Theres a tremendous buzz among the user community about this we're continuing to grow distribution when we when we acquired the business. It was it was basically anchored by several.

Speaker 3: And there's a tremendous buzz among the user community about this.

Speaker 3: We're continuing to grow distribution. When we, when we acquired the business, it was, it was basically anchored by several, uh, larger distributors. We've now added, uh, three to four times as many distributors in the mix. Uh, and that's not just crowding out existing markets by opening too many franchises that's distributors focused on different verticals, different geographies.

Larger distributors, we've now added a three to four times as many distributors in the mix.

And that's not just crowding out existing markets by opening too many franchises that's distributors focused on different verticals different geographies.

Speaker 3: And that's been an exciting journey. We've planted a lot of seeds this year that I think will really come through additional sales, especially with the new product that we have out there, because everybody wants to get their hands on.

That's been an exciting journey, we've we've planted a lot of seats. This year that I think will really come through.

Through additional sales, especially with the new product that we have out there because everybody wants to get their hands on that.

Speaker 3: The second thing that's exciting is we've added senior executive, Amit Amchikofsky, who's focused on this business.

Second thing that's exciting is we've added a senior executive Amit I'm Schakowsky.

Who's focused on this business exclusively and he brings a wealth of commercial experience and we've been able to to bring more large potential buyers into the mix. We have over 70000 units of this product of the current generation deployed with reliance <unk> in India and that numbers is increasing very nicely.

Speaker 3: exclusively and he brings a wealth of commercial experience and we've been able to

Speaker 3: to bring more large potential buyers into the mix. We have over 70,000 units of this product, of the current generation deployed with.

Speaker 3: Reliance Jio in India and that number is increasing very nicely.

Speaker 3: We also have a new product architecture that adds additional capabilities that I think will even supercharge that potentially merge in cellular offload.

We also have a new product architecture that that adds additional capabilities that I think will even supercharge that potentially merging cellular offload into the same into the same universe that makes it more attractive to tier one carriers carriers. It didn't historically by on license equipment that wouldnt typically buy from one of our <unk>.

Speaker 3: into the same universe. That makes it more attractive to tier one carriers, carriers that didn't historically buy unlicensed equipment that wouldn't typically buy from.

Speaker 3: one of our competitors, you know, the kind of household names because they just, they need a tier one style product.

Competitors are.

Kind of household names because they just they need.

Tier one style product with with IP 67, environmentally with software management that looks like what they use on their on their <unk> base.

Speaker 3: with IP67, environmental with software management that looks like what they use on their 3GPP base.

Speaker 3: billions of dollars of CapEx. So we have a great start there with one big carrier. We've got a good path to get several more into the mix. Everybody, whether they're a cellular carrier, a fixed carrier, a fiber provider, everybody needs more connectivity to endpoints. And I think our portfolio just shines there. So we are very excited.

<unk> is a dollar of Capex. So we have a great a great start there with one big carrier, we've got a good path to get several more into the mix everybody.

Whether they're a cellular carrier fixed carrier a fiber provider everybody needs more connectivity to endpoints and I think our portfolio just shines there.

So we are very excited on that.

Speaker 3: Obviously the government stimulus is something that's got its very busy the recently announced 65 billion

Obviously, the government stimulus is something Thats got us very busy.

We announced 65 billion.

Speaker 3: has got us very, very focused on building a world-class team to go harvest that. We've hired a head of government affairs and we've got a really concentrated effort there, as well as the money that was given to the state and local governments.

It has got us very very focused on building a world class team to go harvest that we've hired a head of government affairs, and we've got a really concentrated effort there as well as the money that was given to the state and local governments and the budget signed earlier this year by President Biden, that's giving rise to certain states states like Oh.

Speaker 3: That's giving rise to certain states, states like Ohio.

<unk>.

Speaker 3: Kentucky and Iowa that actually are already soliciting bids for how to spend that money and that's a really exciting growth area for us too. Remember in those products you don't have to own spectrum so the key there is the market is as broad.

Kentucky.

And Iowa that actually are already soliciting bids for how to spend that money and that's that's a really exciting growth area for us to remember in the in those products you don't have the own spectrum. So that so the key there is the market is as broad as we can make it because anybody who needs to get connected can use these tools.

Speaker 3: as we can make it. Because anybody who needs to get connected can use these tools. It opens up a variety of different types of customers. In addition to the big carriers, we have sold through historically. And we.

It opens up a variety of different of different types of customers. In addition to the big carriers, we have sold to historically and we've got a great portfolio.

That's all extremely helpful and yeah, it all very exciting.

Speaker 6: That is all extremely helpful and it's all very exciting. And then, you know, there's obviously a lot of excitement around the new products, as you just mentioned, you know, even with this Gigaflex solution and Mimosa. But have you seen perhaps a rise in interest for some of your older products, since, you know, given the supply constraint, given that they might be able to ship a little quicker, or you might be able to get the components for easier?

This is obviously a.

Lots of excitement around the new products that you just mentioned even with the <unk> solution.

But have you seen perhaps horizon amtrust for for some of your older products since you give.

Given the supply constraint given that might be able to ship, a little quicker or you might be able to get the components for each year.

Speaker 3: Yeah, we're seeing a tail on things like the LPE. We have a product, the AS1035 that we've

Yeah, Yeah, we're seeing a tail on things like the LTE, we have a product to a S 10, 35 that we've booked over.

Speaker 3: 25,000 units recently, which we hadn't anticipated. And that's a good solid 4G product. In markets where 5G and handsets are not proliferating yet, in India as an example, 5G licenses haven't been granted. They've been delayed.

25000 units recently, which we hadn't anticipated and that's a good solid <unk> product in markets, where five G and handsets are not proliferating yet in India. As an example, <unk> licenses haven't been granted they've been delayed.

Speaker 3: And the handset expectations on 5G in India are very, very modest, given the higher cost of the 5G handsets. That's giving us a nice tail on 4G. We certainly see a lot of growth in 5G and a lot of commercial activity and innovation activity, but the nice thing is 4G is chugging along better than expected as well.

And the handset expectations on five G. In India are very very modest given the higher cost of the <unk> handsets, that's giving us a nice a nice tail on <unk>, we certainly see a lot of growth in <unk> and a lot of commercial activity and innovation activity, but the nice thing is <unk> is chugging along better than expected as well.

And just.

Speaker 2: And just on that, you're frankly, you're you. Yeah, there's just you asked about spy chain. I think it does cover. Unfortunately, the spy chain challenges cover products for GM 5G to answer your other question.

<unk> done that.

Frankly, there's just you asked about supply chain I think it does cover.

Unfortunately, the supply chain challenges cover.

Products <unk> to answer your other question.

Thanks Niccolo.

Yeah.

Thank you at this time I would like to turn the floor back over to Mr. Johnston for closing comments.

Speaker 1: Thank you. At this time, I'd like to turn the floor back over to Mr. Stonestrom for closing comments.

Okay. Please turn to slide 20.

Speaker 3: As we wrap up, we would reiterate the huge demand we're all witnessing for connectivity in every aspect of life.

As we wrap up we would reiterate the huge demand we're all witnessing for connectivity in every aspect of life.

Speaker 3: This is leading to a tremendous new appetite for data hungry applications like the metaverse, which is further driving this five.

This is leading to a tremendous new appetite for data hungry applications like the meta versus which is further driving this <unk> capex cycle we.

Speaker 3: feel we have the right product set and human capital to take full advantage of these tailwinds and look forward to updating you on our progress.

We feel we have the right product set and human capital to take full advantage of these tailwind and look forward to updating you on our progress.

Speaker 3: One last note, we will be participating in fireside chats and one on one meetings at the new street research 5G what comes next conference on Monday, November 15. And the Needham virtual tech week event on Tuesday, November 16. We look forward with engaging to investors at both events.

One last note, we will be participating in fireside chats and one on one meetings at the New Street Research five G. What comes next conference on Monday November 15th.

And the Needham virtual Tech week event on Tuesday November 16th.

We look forward with engaging to investors at both events.

You again for your interest and support.

Ladies and gentlemen. This concludes today's event you may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Speaker 1: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Speaker 7: I.

Okay.

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Speaker 7: I.

Yeah.

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Speaker 7: And.

Hum.

Yes.

Okay.

Speaker 7: And.

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