Q4 2021 Cambium Networks Corp Earnings Call

February 17, 2022

Good afternoon, My name is Carmen and I'll be your conference operator today at this time I would like to welcome everyone to the cambium networks fourth quarter and full year 2021 financial results Conference call.

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 question. During that time, you will need to press star one on your telephone to get in the queue.

Please limit yourself to one question and one follow up question. Thank you.

Mr. Peter Schuman, Senior director Investor and industry analysts relations you may begin your conference. Thank you Carmen and welcome and thank you for joining us today for Cambium networks fourth quarter and full year 2021 financial results conference call and welcome to all those joining by webcast.

<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 form 8-K with the SEC a copy of today's prepared remarks will also be available on the investor page at the <unk>.

<unk> of this call as a reminder, today's remarks, including those made during Q&A will contain forward looking statements about the outlook and expect expected performance of the company. 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 these statements to actual results or make changes and cambium expectations or otherwise.

Cambium Networks' policy not to reiterate our financial outlook, we encourage listeners to review the full list of risk factors included in our 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 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.

<unk> is announcing our results.

Turning to the agenda cambium, Networks' President and CEO of <unk>, who will provide the key investment highlights for the fourth quarter and full year 2021, and Stephen Cumming.

Cambium Networks' CFO will provide a recap of the financial results for the fourth quarter and full year 2021 and present, our financial outlook for the first quarter and full year 2020, our prepared remarks will be followed by a Q&A session I would now like to turn the call over to Atul. Thank.

Thank you Peter.

Demand and backlog remains strong due to the continued need for expansion of broadband wireless communications networks, and a strong rebound in enterprise Wi Fi shipments.

We experienced an incremental improvement with supply chain challenges and are winning more sizeable enterprise deal, while taking market share during Q4 'twenty one.

For calendar year 2021, our enterprise business grew 67% well ahead of our original forecast of 40% to 60% growth announced during our Q4 'twenty financial results Conference call last February .

We achieved our oral result, without the full benefit of the price increases and surcharges, which continue to layer into our financial results over the next few quarters.

We are still facing supply chain challenges within our industry, although things seem to have bottomed and are expected to improve incrementally over the next few quarters as we have adjusted to the new normal which include expedite fees extended lead times as well as increased freight expenses.

Demand remains strong we.

We exited the fourth quarter of 2021 with backlog up 7% quarter over quarter and 16% year over year.

We are at the forefront of the next wave of high performance wireless broadband technology with our millimeter wave solutions.

Our new 28 gigawatt five G multi gigabit fixed wireless products are expected to be released during the first quarter.

We presently have eight POC for our 28 gigahertz <unk> going on in four continents.

60, gigahertz <unk> products are changing the way fixed wireless is viewed by customers and expand our serviceable available market, bringing a standards based multi gigabit fixed wireless solution using licensed and unlicensed spectrum to network operators, serving residential urban and enterprise markets.

Cambium Enterprise solutions brings sophisticated cost effective multi gigabit Wi Fi.

Wireless savvy switching <unk>.

Premium software solutions and subscription services to our customers and the results have been outstanding during 2021.

We had a breakthrough quarter for the Wi Fi business.

With record revenues of $25 8 million.

Which grew 140% sequentially and 136% year over year during Q4 'twenty one.

To put this in perspective.

Wi Fi represented a third of company revenues during the fourth quarter of 2021.

Previous record was 20% of revenues during the second quarter 2021.

We are winning as a result of cambium attractive cost of ownership.

Which makes our fixed wireless solutions that compelling choice for wireless infrastructure projects around the world.

With increased government spending on infrastructure projects accelerating over the next few years and our commitment to deliver cost effective and scalable multi gigabit solutions to local communities and distributed enterprises around the globe cambium will be a winner over the next several years with this cloud managed wireless.

Fabric solution extending from few meters to over 100 kilometers.

All done wirelessly.

Turning to the results of the fourth quarter of 2021.

Seven use of $78 $7 million came in above the outlook of $73 5 million grew $77 5 million announced during the Q3 'twenty one earnings call.

The supply constrained environment, mainly affected shipments of fixed wireless products and limited further upside to our fourth quarter results.

The enterprise market had a strong rebound in Q4, 'twenty, one as supply constraints begin to ease.

We were able to opportunistically purchase chips on the secondary market at higher prices.

non-GAAP fully diluted EPS of <unk> 16.

Within the outlook announced during the Q3 'twenty one earnings call of between 11, and 17 cents per diluted share.

Looking at revenues across our different product lines.

Our point to Multipoint BNP business revenues decreased 26% sequentially and 31% year over year due to global supply constraints negatively impacting shipments of products. We've continued to see strong momentum in network traffic increased demand for <unk> solutions and broadening interest in our new product introductions.

We expect the component shortages to continue to improve although gradually during the first half of calendar year 2022.

The point to point PTP business improved by 10% sequentially. During Q4, 'twenty, one with component shortages limiting shipments of certain products, although we had higher shipments for federal products, while year over year revenues decreased 9% due to lower shipments for backhaul products compared to a very strong.

<unk>.

Year period.

Our enterprise Wifi business had a breakthrough quarter with record revenues of $25 8 million previous record for Wi Fi was $18 3 million during Q2 'twenty one.

We're fortunate to have improved supply conditions, and pent up demand with Viper, increasing 140% sequentially and higher by 136% year over year during Q4, 'twenty, one although supply constraints remain.

This is an indication of the strong potential of the lifestyle business for cambium networks.

Demand remains very healthy for our enterprise Wi Fi and wireless savvy switching solutions and we continue to win larger and more diverse customers. In this end market all over the world as customers adopt our next generation, leading edge Wi Fi six and six E solutions.

For the full year 2021 revenues of $335 $9 million increased 21% from 2020.

The 'twenty to 'twenty, one growth was primarily driven by a point to Multipoint and enterprise Wi Fi solutions, which both grew double digit percentages over the previous year.

For the full year 2021, our BNP products grew 19% and enterprise Wi Fi grew 67%, while the point to point products increased 1% compared to calendar year 2020.

Looking at some notable customer wins and new product development.

In North America, we had several competitive wins aided by government funding.

The service provider in Texas ripped and replaced a competitor's gear with cambium BNP fulfill pm technology.

The second service provider with a new focus on fixed wireless and rural Western New York State replace Huawei equipment with Cambium BNP $4 50, with the aid of government funding.

Within our industrial customer base.

North American railroad, operator selected our PTP 824 ish range throughput performance small footprint and superior reliability.

Also in the transportation space Buckeye Mountain, a leading system integrator of communication solution to the railroad and intermodal industries has integrated cambium networks fixed wireless and outdoor Wi Fi technology into their rapid deploy family of connectivity solutions.

As for some rail yards deal with unprecedented supply chain issues communications reliability is vitally important.

We also see 60 gigahertz <unk> as an emerging application at rail rail yard and railways for communications across real tracks to a wife trenching fiber to cross railroad tracks.

We had one of our first Wi Fi six key wins with a university in Texas, not only did the select over at 1000 cambium at this points to cover the indoor and outdoor areas of the classrooms in dorms.

But they selected our ultra high density radios for the auditorium and public areas.

They also chose our 60 gigawatt CMV to backhaul Wi Fi for their stadium areas.

Cambium first mover status for the FCC's $3 five gigahertz CBR spectrum continues to benefit our PMT 450 products.

Our CBR assess service in both the U S and its territories.

As of today's call. We now have over 129000 devices managed by our <unk> to assess service an increase of over 12% since we reported last quarter and an increase of approximately 93% year over year.

In the Europe , Middle East and Africa region, EMEA recent strategic wins since our last call include in France, one of the largest restaurant chains in the country servicing 600, various quick service restaurants selected cambium Wi Fi six and switching the daily the sizable one and we beat out several larger.

<unk>.

Our Wifi performance superiority is propelling us forward and competitive wins.

We have several wins in the enterprise hospitality vertical in Germany and Italy.

This resource in the northern Hemisphere are upgrading their Wi Fi for the guest rooms and convention areas during the off peak season.

<unk> quality affordability support and relationships with partners or some of the reasons why we are winning over these customers.

In the APAC region.

Record revenues by five bookings.

Also very robust we received a major enterprise order for over 7000 at this point from Worthington Nepal for outdoor Wi Fi.

We had our first win with a large telco managed service provider MSP in Japan for our Wi Fi business. The project involved connectivity for schools and hospitals and featured a Wi Fi six products.

This opens the door for future opportunities as the Japanese market is dominated by larger telecom MSP and we won this project or a larger competitor.

And in Malaysia, one of the largest oil and gas companies in the region selected cambium intelligent positions with our PTP $4 50.

For connectivity between oil rigs and oil tankers.

In Caribbean, and Latin America, Cala region, Cambium had a solid quarter with record bookings.

We had a strong enterprise quarter within education win in Brazil.

1600 schools in the state of Sao Paulo, <unk> outdoor access points or selected versus several larger competitors due to our superior performance and total cost of ownership for the customer.

Brazil represents a large opportunity to expand our enterprise business and we are making tremendous progress in the country.

We had a win with our 60 gigahertz and Wi Fi combo for a major forward in the color region to provide coverage across the facility in days.

The maritime Port facility found that mobile cellular service did not perform adequately in an environment, where metal containers were moved and stacked on a continual basis.

After deploying cambium fixed wireless and Wi Fi technology, the port experienced consistent connectivity and higher data throughput.

Our partners expanding their deployment to cover for additional ports.

Two container ships.

Turning to new product introductions since our previous quarterly update.

We officially launched our first Wi Fi six products, the <unk>, which triples, the available spectrum for Wi Fi usage, including utilization up to one two gigahertz of new clean spectrum in the six gigahertz band.

The Wi Fi six <unk> solution is a compatible solution with existing Wifi six networks.

<unk> enables customers to upgrade to six gigahertz when they are ready without the price premium.

We continued with extensive field trials and proof of concept deployments for our new 28, gigahertz <unk> and our fixed wireless product with a formal launch during Q1, 'twenty tool and revenues beginning to ramp during calendar 'twenty two.

Interest and.

Demand from service providers is very high for this long sought after product, which uses millimeter wave fixed wireless access in areas, where it's not possible to use either fiber our traditional mobile technologies like <unk> or <unk>.

Our 28 gigahertz <unk> solution will include a mandatory software attach with CN Maestro X.

Cloud based network management platform to support service delivery and cambium care for software maintenance and upgrades.

One of our key goals for 2022 is to build a strong foundation for our software and subscription service business.

Switching which delivers customer stickiness.

Recurring revenue and accretive margin.

We are building a sustainable subscription business through three principal initiatives first C and micro essentials provides important core services valued by all of our enterprise and fixed wireless customers.

And CN MISO ex provide enhanced services functionality and ecosystem integration for a fee basis.

We continue to invest in <unk> X for the enterprise and fixed wireless broadband network administration through organic development and ecosystem integration, including mandatory rates on certain products.

Second through the development and introduction of new products that are subscription first by design. During Q1 'twenty two we expect to launch our new quality of experience Qos service fuel E provides visibility and network traffic optimization and real time to.

Get congestion and control network traffic.

This feature will be increasingly important to high bandwidth multi gigabit networks across wired and wireless platforms.

Network operators subscribing to cambium <unk> can optimize the average revenue per user our pool and improve customer satisfaction.

<unk> allows network administrators to confidently offer higher service level agreements SLA.

Targeted higher <unk> subscribers.

Additional products are anticipated in the second half of 2020 tool to accelerate and annual recurring revenue.

<unk> will.

We are aligning training and Incentivising, our internal go to market teams.

And more importantly, our more than 10000 global partners.

Secondly position and sell our subscription services.

Having conducted business in approximately 170 countries in 2021. It is critical that we harnessed the knowledge skill and presence of our channel partners to advance our subscription services business.

Looking at our <unk> cloud software.

Our end to end cloud powered connectivity solution to manage the network from a single pane of glass the CN Maestro cloud software continued to experience strong growth.

The total devices under cloud management in Q4, 'twenty, one where over 744300, an increase of 4% from Q3, 21 and up 42% year over year.

The expansion and growth of our subscription services will be a multi year journey for cambium in the coming quarters, we will provide investors with metrics to measure our progress.

Looking at the channel.

In Q4, 'twenty, one we expanded our channel presence by adding over 530, net new channel partners sequentially and over 2160, net new channel partners year over year.

Which represents an increase of approximately 5% sequentially and 24% year over year.

I will now turn the call over to Steven.

A review of our Q4, 'twenty, one financial results and Q1, 'twenty, two and full year 2000 <unk> outlook.

<unk> can.

<unk> had revenues of $78 7 million for Q4, 'twenty, one revenues increased by 4% quarter over quarter decreased by 5% year over year.

Our global supply constraints continue to impact shipments of our point to Multipoint.

Point products, while we had better than anticipated supply of Wi Fi chips, enabling a record breaking quarter for our enterprise Wi Fi business, which had significant pent up demand and we opportunistically managed to obtain supply in the secondary market, increasing revenues by 140% sequentially and 100.

36% year over year.

Our backlog in end demand remained strong with backlog, increasing by 7% quarter over quarter and 16% year over year.

On a sequential basis for Q4, 'twenty, one revenues were higher by $2 $8 million.

The higher revenues were primarily the result of record demand for enterprise Wi Fi solutions and higher point to point revenues driven by our federal business and increased demand for backhaul products offset by lower point to Multipoint revenues due to global supply constraints negatively impacting shipments of products.

Moving to our gross margin non-GAAP gross margin of 44, 2% decreased by 700 basis points compared to Q4 'twenty.

Year over year decrease on non-GAAP gross margin was the result of lower revenues and increased component costs as well as higher freight and distribution costs caused by expedited shipping.

On a sequential basis non-GAAP gross margin was 360 basis points lower than Q3, 'twenty, one the lower quarter over quarter non-GAAP . Gross margin was also the result of higher component costs and increased freight and distribution costs offset by a richer mix of Wi Fi business.

Our previously announced price increases began to help offset some of the gross margin degradation. During the latter part of Q4 'twenty one.

We believe we will continue to see sequential improvements to gross margin during calendar 2022 from both the benefits of the actions we have already taken and increased scale in our business as we progress through the year.

The full impact of both the price increases will be realized during the second half of 2022.

In Q4, 'twenty, one non-GAAP gross profit dollars at $34 8 million.

Decreased by $7 $6 million.

Compared to the prior year due to lower volumes and were lower by $1 5 million sequentially.

For the full year 2021, non-GAAP gross margin declined by 210 basis points to 48, 2% compared to 53% for 2020 due to higher component costs and increased freight and distribution costs.

Our longer term goal remains an annual non-GAAP gross margin target of 51% to 52%.

non-GAAP operating expenses research and development sales and marketing general administrative depreciation and amortization in Q4, 'twenty one decreased by approximately $100000 when compared to Q4 2000 and stood at $29 1 million.

36, 9% of revenues.

Year over year, we had increased sales and marketing expenses due to higher head count and the returns inputs and tradeshows and customer meetings offset by lower R&D spending while G&A remained flat.

When compared to Q3, 'twenty, one non-GAAP operating expenses increased by $1 4 million during Q4 'twenty one.

Quarter over quarter sales and marketing increased as a result of higher head count and returned in person events, including Whisper Palooza, a significant fixed wireless tradeshow, partially offset by lower R&D spend due to lower engineering material cost for the full year 2021, non-GAAP operating expenses increase.

<unk> by $7 6 million and one.

$114 3 million compared to $106 $7 million for 2020.

The higher non-GAAP operating expenses during 2021 reflect the increased head count in sales and marketing to support higher revenues and more spend on R&D, resulting from new technologies.

We did a good job controlling G&A with only a modest increase in expenses non-GAAP operating margin for Q4, 'twenty. One was seven 3% down from 16%. During Q4 2011, 4% of revenues in Q3 'twenty one for.

For the full year 2021, non-GAAP operating margin was 14, 1% compared to 12% for 2020, primarily reflecting high revenues.

Adjusted EBITDA for Q4, 'twenty, one was $6 7 million or eight 6% of revenues compared to $13 9 million or 16, 8% of revenues for Q4, <unk> and compared to $9 6 million or 12, 6% of revenues for Q3 dollars 21.

For the full year 2021, adjusted EBITDA was 51 point.

$2 million or 15, 3% of revenues compared to $37 4 million or 13, 4% of revenues for the full year 2020. This represents a 190 basis point improvement for the full year 2021.

37% increase in adjusted EBITDA.

With the current supply constraints, we temporary temporarily lost some operating leverage in our business. Although we remain committed to driving our adjusted EBITDA to our target model of 18% to 19% of revenues.

Moving to cash flow cash provided by operating activities was $5 6 million for the fourth quarter of 2021, the cash from operating activities included a $7 million prepayment to our contract manufacturer to secure incremental supply cash.

Cash flow from operations compared to 15 point.

$1 million of net cash flow provided from operating activities for the fourth quarter of 2020 and $11 8 million.

For the third quarter of 2021 for.

For the full year 2021, operating cash flow was $13 million.

Compared to $56 9 million during calendar 2020, with the decrease largely reflecting higher receivables and prepaid prepayments to secure inventory no.

non-GAAP net income for Q4, 'twenty, one was $4 4 million or <unk> 16 per diluted share compared to $10 7 million or 38 cents per diluted share for Q4, <unk> and non-GAAP net income of $6 7 million or <unk> <unk> per diluted share for Q3 2001.

The lower non-GAAP net income compared to both the prior year and prior quarters results was.

It was primarily due to the lower revenues impacting gross profit dollars and higher component costs and shipping costs.

For the full year 2021, non-GAAP net income was $35 6 million or $1 26 per diluted share and represented a 48% increase for the year compared to $24 1 million or <unk> 86 per diluted share in 2020.

Turning to the balance sheet cash totaled $59 3 million as of Q4, 'twenty one an increase of $700000 from Q3 'twenty one the sequential increase in cash primarily reflects net income partially offset by the prepayment of $7 million for inventories during Q4 'twenty one we refinanced are out.

Standing debt of $30 2 million at a significantly lower interest rate of approximately two 2% per annum compared with our prior term loan which had an interest rate of five 3%. Additionally.

Additionally, we increased our total borrowing capacity by $34 million to $75 million.

Which will further allow us to grow our business since becoming a public company, we've decreased our debt and improved our capital structure and position the company to support our future growth.

Net inventories of $33 $8 million in Q4, 'twenty, one decreased by approximately $200000 year over year, while increasing by $5 million from Q3 2001.

Inventories were higher sequentially because of an increase in component inventory, while the supply chain remains an ongoing challenge we're working to increase our inventory position during 2022 to help support the growth of our business.

In summary, the fourth quarter played out roughly as anticipated with scarcity and high component costs from some of our supply chain partners, while our price increases and now layering in with a full benefit expected by the second half of 2022.

Our order book remains strong.

<unk> of new product cycles, and we expect the tailwind from increased government spending in our wireless broadband and federal business during the second half of 2022.

Once the supply issues are resolved, we expect to regain scale improve operational efficiency and make significant progress to achieving our long term target operating model.

Moving to the first quarter and full year 2022 financial outlook.

<unk>, our current visibility as of February 17th 2020 to Q1 'twenty two financial outlook is expected to be as follows.

Revenues between 77, 5% to $81 5 million.

non-GAAP gross margin between 44 to 45, 9% non-GAAP operating expenses between 32% to $31 2 million and non-GAAP operating income between $4 two to $6 2 million.

Interest expense net of approximately $700000 and non-GAAP net income between $2 nine to $4 4 million or net income between 10 to 15 per diluted share.

Adjusted EBITDA between five 2% to $7 2 million and.

And adjusted EBITDA margin between $6 seven to eight 8%.

A non-GAAP effective tax rate of approximately 18% to 20% and approximately $28 3 million weighted average diluted shares outstanding.

Cash requirements are expected to be as follows paydown of debt $700000 cash flow interest expense approximately $300000 and capital expenditure of one six to $1 $8 million.

Full year 2022 financial outlook is expected to be as follows revenues between $355 million to $365 million.

Increasing between approximately $5 seven to eight 7% non-GAAP net income between $35 5 million to 35.

$39 5 million or net income between $1 23 to $1 36 per diluted share adjusted EBITDA margin between 14% to 16%.

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

Cambium remains very well positioned for 2022 with multiple growth drivers, including our multi gigabit wireless products, such as enterprise Wifi six and six E.

Wireless <unk> switching products.

60, gigahertz, <unk> wave and our 28 gigahertz millimeter wave solutions for fixed fight.

New six gigahertz fixed wireless solutions, arriving later in 2022, a reinvigorated federal business.

As well as our software as a service solutions.

We expect to increase scale should benefit our future operating results and we remain focused on judiciously managing our costs.

While continuing to invest in innovative products to maintain our technology edge.

Finally, <unk> was named as one of the best places to work as a large company in Chicago area. The evaluation recognizes employers who have created a diverse equitable and inclusive culture that support employees no matter. If they are in the office or at home.

We also got named by Forbes as number 22 on their list of the best top 100 small cap companies for 2022.

I'd like to show my appreciation for our employees partners and customers for the result during these unprecedented times.

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

Thank you and as a reminder to ask a question simply press star one on your telephone.

The other question, Chris the hash or the pound key.

Please limit yourself to one question and one follow up question. Please.

Please standby, while we compile the Q&A roster.

Your first question comes from Scott Searle with Roth Capital. Your line is open Hey, good afternoon, congratulations guys nice job on the quarter.

Hey.

Steve Im not sure if I missed it but did you provide a number in terms of what was left on the table due to supply constraints in the fourth quarter and then looking to the first quarter guidance I'm wondering if you could directionally give us some idea by product line, how that looks Wi Fi had an absolutely huge fourth quarter does that continue into the first quarter, how much of a recovery.

Are you expecting on the multiple front given a lot of products given supply chain issues. I was wondering if you could talk around that and then I had a follow up.

Yes, Scott I'll take this is Steven tool can come in at the end if he has anything else to add but it's tough to accurately quantify that in terms of what was left on the table I think the best the best way to answer is if you look at our peak revenues in in 2021.

To these major supply chain disruptions they were approximately $93 million. So I think it's fair to say given the increased backlog and momentum that we're seeing on our product lines at the Maryland, especially enterprise as you commented on and you could expect that we would have been beyond that that peak had we not been so.

Fly constrained.

Certainly our order book and the bookings activity and the backlog indicates that we can do much more than 93.

From these results we benefited from some of the <unk>.

Fly chain upsides in particularly in enterprise in Q4, and as you saw we're hitting our annualized $100 million run rate for that business. So there's strong momentum in the business.

Certainly as I say to sort of recap higher than the previous peaks, where is a fair way to assess it with.

With regard to growth rates by product line.

For Q1.

Again, we're living in a very dynamic environment with regards to the supply chain, but this is how we see it planning at the moment for the PM P side of the business for Q1, we're seeing that in I would say the upper twenty's sequential growth rate.

But PTP coming off a very strong Q4, I would say flattish and Wifi off an exceptional record Q4, we're going to be down roughly about 40%.

And then there's a little bit in other but that should give you some flavor of the breakdown.

Got you very helpful and lastly, if I could then looking to your guidance for fiscal 'twenty, two which is I think well above where the consensus is.

It certainly implies an inflection as we get past the first quarter. So I'm wondering in terms of your visibility your comfort both on the supply and the demand side does that start to happen in the second quarter or is that second half and then as part of that gross margins as well, Greg Youre target being 51% plus is it is it an exit rate in <unk>.

<unk> 2022 is that possible I know, there's some price increases going through but supply chain coming together a lot of different elements here to get to the numbers, though it certainly implies right that we start to see a pick up either in second quarter second half with improved gross margin outlook. So I was wondering if you can provide some more color around that thanks.

Yes, I mean, I think youre right.

We still see and nobody has a crystal ball at the moment, but we still see the first half of the year.

Being more challenging from a supply chain perspective, and then that.

To ease in the second half so you're going to start to think is going to be happening in Q2, specifically.

One is hopefully we're going to see a slight easing of some of these supply constraints, obviously, it's not going to spring back too.

Two full supply, but we can start to see that ease coupled with again youll start to see layering in of some of the price increases that will help.

Revenue and gross margin.

And then with regards to gross margin.

I think.

We're going to see continual progression.

You've already seen that in our guidance for Q1.

Up almost a 100 basis points in Q1 as some of these price moves come in and then you'll see a little bit more in Q2, and we'll see improving in the second half of the year.

Tough for me to comment.

Whether we're going to get back into the 50 is because just too far out for us to predict at this point in time, but certainly we've got a path to see continued progression and we're working towards that.

Scott I'll just add one comment the new products, we have introduced very gratifying to see the adoption of 60 gigahertz worldwide and the 28 gigahertz funnel very very strong funnel and the average deal size on 28 gigahertz <unk> much larger we are seeing that dynamic and the last point I'll make is that the.

Government and defense will also accelerate I think in the second half, but overall from products point of view, we feel very good Javier position okay.

Hey, great. Thanks, so much nice job. Thanks.

Thanks Scott.

Our next question comes from Patrick.

<unk> with JP Morgan your question please.

Hi, This is Joe Cardoso on for Sonic Yes. My first question is just on the revenue guide for <unk> It sounds like.

This quarter, you were up 4% quarter over quarter and ahead of your guide and I would assume that you would see some sequential growth.

At that level or better heading into the first quarter just given what you are talking about in terms of.

And improving or better demand backdrop in terms of both are including seems robust backlog and then in top of that you are seeing improve.

Improving supply from what seems to be your suppliers as well as some of the actions that you guys take took but youre only guiding for kind of like low single digit sequential improvement I guess.

What am I not.

Understanding there like why aren't we seeing a stronger sequential increase going into the first quarter with it seems like all that.

You seem like Youre benefiting from both the demand and supply easing already coke going into the first quarter of this year.

Yes, Joe This is David again, I'll take that and then I'll, let <unk> comment.

At the end, but.

I think the bottom line is.

We're still in a very lean.

And the rest of the industry or in a very challenging supply constrained environment and so.

Every every day provides a new set of challenges and you're absolutely right. We've got ahead of this we've taken some actions we've moved on pricing we've done some redesigns.

Maybe you could say that our guide is a little bit conservative at this point in time, but I think we're seeing modest progression, we're actually growing sequentially in <unk>.

Certainly hope we can beat that number, but I think that sort of reflective of this environment that we see at this point in time I think we think things have stabilized.

We were particularly pleased on what happened in Q4 on some additional supply for enterprise, but likewise.

We were curtailed in our PSP business on supply so it's a bit of a moving target.

So we're being a little bit conservative for our Q1 guide and hopefully we can beat it yes, I think Joe just one point I would add is first half you will see gradual improvement. That's why we are being conservative I think in the second half, where we see accelerated improvements in supply chain. We work very closely with our partners all the key chip partners. So I.

Thank you are just seeing a level of conservatism because I think we want to see couple of quarters of continued strong supply, which will then give us confidence that now it's on the accelerated back.

Got it and then my follow up question's, a little bit more simpler.

I apologies if I missed this in your prepared remarks, but it sounded like you gave us an update in terms of pricing and when youre expecting to see the full benefits of that can can I just get an update in terms of where you guys are at with that.

Redesigns that you talked about last quarter.

Yes, let me let me take that one we have done before.

First phase of our product redesign very well and actually that helped us with some of that solution in Q4 and yet four in the first half I think there will be some parts, which will still be in paucity. So we keep looking at where we can redesign, but I think the major redesign part is over and pretty much built into our products.

Got it thanks for the color guys. Thanks. Thank you.

Your next question comes from Rod Hall with Goldman Sachs. Your question. Please.

Yeah, Hey, guys. Thanks for the question.

I wanted to come back to the Wi Fi and obviously a huge number there it feels like I think you've kind of commented on it in the.

Remarks that you had a lot of supply released there.

But I'm just kind of curious whether you might've changed your sourcing strategy a little bit here I know that.

It's kind of a.

It's a footprint kind of model. So if you get that footprint.

Over time, that's worth something to you so maybe it makes sense to.

Over pay for chips shorter term or pay more for them. So that you can supply. It I'm just curious kind of how youre thinking about that supply strategy now in the context of this market.

Sure let.

Let me take this so rod in terms of the particularly Wi Fi chip supplier. We are a very strategic partner long range partner, we work very closely with them and what are the price increases they announced publicly thats all we are bank.

But since we are driving lot of innovation with their chips, we get good attention and we do see improving situation.

In 2022, especially in second half as I said gradual improvements in first half, but I think pretty solid improvement. That's the indication we get on Wi Fi set fixed wireless broadband users diverse set of chips. They are not just chipset. There we have to buy distinct chips from multiple vendors.

So fixed wireless broadband is a little more sophisticated that way that's why in general fixed wireless broadband will kind of lag.

Wi Fi side, because <unk> cited a complete chipset with a partner we do so hopefully that gives you a little more color.

Yes, that's great until thank you.

On the Wi Fi again could you just clarify.

You are saying down 40% in Q1, and this huge almost doubling of revenues in Q4.

Is that was that a single deal or can you maybe dive into a little bit more about what drove that because its such Ed.

<unk> fluctuation in numbers from one quarter to the next so I'd just like to make sure that I understand the detail on that yes.

Yes, let me take this and then Stefan has any suggestion you can add I think some of the supplies for the chips came in late in Q3, So we could not turn that into Q3.

Whereas we were able to use those chips, which came very late in Q3 into Q4, and then the Q4 ship supplies of decent so thats why use the word pent up demand a little bit there, but this does tell you. There is a strong demand and as Wi Fi situation keeps improving you will see continuous improvement in our enterprise numbers, especially in the second half.

Sure.

Yes, and just just to add to that rod.

I think the guidance for Q1 on Wi Fi This is all.

Supply related.

We have.

A record not just a record number in Q4, but we got record bookings for enterprise.

Into the year with record backlog for enterprise. So this is us really navigating the supply constraints and as Tom mentioned, we had a little bit pull in from Q3 and remember that we had a disappointing Q3 on enterprise again, all supply related so that helped us out in Q4, and so we're navigating now.

One with the continued supply constraints and Rod to answer your specific question no. There was no large deal any such thing we have lost some mid size and large number of customers, but our average deal size is increasing and enterprise Wi Fi, we are closing and more strategic accounts, but this doesn't include any some large.

One time Bluebird it does not.

Got it so it sounds like.

Should do is just kind of smooth those numbers through Q3, and Q4 and we'd have a better picture of what the underlying kind of demand look like.

I think that's a good way of looking at yes, yes, okay. Great. Thanks, guys I appreciate it thank you.

And your next question comes from George Notter with Jefferies. Your line is open.

Hi, guys. Thanks, very much I guess I also wanted to ask about the supply chain environment you guys are talking about.

The substantial improvement in the second half of the year end.

Just going through earnings season, it certainly feels like Thats a bit of a non consensus view I think many out there we expect things to remain pretty tough through all of this year, but.

Is there any more detail you can give us on exactly why you think the supply chain is going to ease for you in the second half is there.

Is it specific conversation specific fab.

That are coming online.

Kind of detail could you give us there.

Let me let me take this.

When you look at the Wifi part as I said lifestyle part of chipsets.

They seem to be recovering faster number one number two.

In the Wi Fi about maybe nine months backwards. So we sense that things are changing on Wifi four and five.

Versus Wi Fi six so we shifted the design we redesigned the product has shifted the design to Wi Fi six and we will benefit in 2022 and onwards with good strong leadership in Wifi six because Wifi six supply is I think improving faster than Wi Fi four and five years older Fabs.

<unk>.

They are kind of lagging behind that is definitely positive supply. So thats kind of Wi Fi with fixed wireless broadband they use analog chips. They use a variety of chips DSP. The FPGA is so I think what you will see George different dynamic for different companies.

It depends upon what are those chips you use because not all chip vendors are improving at the same rate. They all use different fabs. Some of 2028 nanometer above some of 28 nanometer or below so in general our readers for cambium business, we will see a good improvement in Wi Fi enterprise supply.

And second half and the fixed wireless broadband it might be little behind.

<unk> to the enterprise because of the reasons I mentioned complexity differential and all of that and we will keep you guys posted we work very closely with our partners every week, we do meetings with them all of them and as a result, I think we believe we have a good handle on where things are.

Just just just to add to that we mentioned on last call about some of the Redesigns that we were doing.

In fixed wireless to more widely available.

So we do expect in the tool comment on this early we do expect some of those initiatives to work their way through the system.

And help us out in the second half I think from a sort of quantifying really what we're hearing from supply overall, certainly we are hearing from our vendors and our suppliers that things improving.

And they seem a little bit more committal to us for the second half of the year.

Its sort of wait and see mode at this point in time.

Got it that's super helpful.

A few minutes ago, you kind of mentioned the bookings and backlog strength on the enterprise side of the business is that.

Can you give us any comment on what youre seeing on on fixed wireless access is that also a strong in terms of bookings backlog and so on.

Yes bookings backlog I would say strength across pretty much all of our all of our product lines.

We we entered the quarter.

With a highlight higher backlog position.

Well over 100% of our guide for Q1, so, yes, I would say strength, both for bookings and backlog goes across pretty much all of our product line.

Got it great and then the last one I was just going to ask on with channel inventory levels any comment on where.

The channel stands right now in terms of inventory. Thanks, a lot guys, yet so as expected.

We.

More backend loaded with our shipments into the channel.

And so there was a lot of product that was shipped towards right at the end of the year.

So for the distributors to turnaround and Pls that.

Was that was unlikely from a reporting perspective, so we did see a slightly higher level of channel inventory, which we expected given as I say the linearity of shipments happening right at the end of the quarter.

Four.

At the beginning of the year is strong so we're expecting that to sell through nicely.

Great. Thank you.

Thanks.

Thank you. Our next question comes from Simon Leopold with Raymond James Your question. Please.

Hi, guys. This is Victor Chu in for Simon.

Just wanted to follow up really quickly on the guidance.

It seems like the <unk> adjusted EBITDA margin was six seven to eight 8% in <unk>.

But the full year your guidance of 14% to 16% so.

Understanding that you expect an improvement.

Gradually throughout the year, but can you just help us bridge that gap a little on what the trajectory looks like there because.

That implies Q, <unk> EBITDA margins to kind of be well above 16%.

Just to kind of pan out.

Your guidance for the rest of the year. So can you just kind of help us.

Flesh that out a little bit worse.

Yes, I think Victor the way you should be thinking about this and we may have said it on previous calls but.

2022 is shaping out to be an inverse of 2021.

So if you think of 'twenty, one we had a phenomenal first half of the year I think we peaked at.

EBITDA margins of almost 20% and so our expectation is the supply chain constraints ease.

We'll see tremendous operating leverage in our model So we'll see.

Some nice leverage in the second half of the year, but the first half is going to be squeezed.

Okay.

And let me say and I guess, just could you speak some about the demand pipeline for the 28 gigahertz.

Bye.

Geographic region I'm, assuming most of the demand for 20 <unk>.

<unk> bye.

International customers since performed mostly occupied by tier tier one carriers in the U S. Yes.

Take this one so 28 gigahertz as I said, we are doing about eight poc's and right now I would say cambium networks has a clear.

Line of sight to maybe over 50 service providers in our funnel and what is very gratifying to see so many countries are adopting continued giga <unk> number one number two it gives us a performance as we are doing POC testing due to the performance of truly a gigabit type connectivity. So.

Overall very pleased to see.

One comment I made on my comments earlier, the average deal size on 28 gigahertz is much larger because we are dealing with now larger tier twos and internationally, some tier ones as well, particularly in EMEA. So every quarter, we will give you a lot more flavor, but very excited about the <unk>.

<unk> five <unk> fixed and cambium product will be one of the leadership products in this segment.

Okay. That's helpful. Thank you.

Thanks, Brian .

Thank you. Our next question comes from teams have Vishal with Northland Capital. Your question. Please.

Hi, good afternoon.

Pardon me.

You mentioned a couple of.

Sure.

Kind of I guess government.

Government funding aided wins I think more on the rip and replace category, which.

I think you're referring to a different kind of specific bucket of funds there.

Relative to <unk> or anything else.

We see coming at US and my question is.

To what extent was that.

Any type of that activity under whichever bucket if you like.

Contributor in 'twenty, one and as you look at your guidance and growth outlook for 'twenty two.

What proportion of that growth would you say is accounted for by either the beginning ramps and heard off where we're starting to hear about some acceleration here or other government programs.

I'll take this one excellent question by the way I think there are multiple sources of government funding.

<unk>, which everyone has been tracking which is focused on the rural side then.

And then there is infrastructure bill, which is focused on dissemination of that money through the local to the states and local governments, but there's a third bucket, which is the caf II.

<unk> two of the connect America fund too.

It was about $8 billion fund I think what $2 billion has been spent but still has.

Five years of life still before that fund gets completely disappeared at so many of the projects.

Which we participate are actually gas to the cares act type of projects. When we look at the different government funding, although for us will probably start I would guess.

Late this year second half this year, because we are into access and there are still questions, which need to be answered.

Before the art of money really get released completely some people are seeing the benefit with cambium, probably we'll see the benefit I would say maybe late this year.

Biden initiative, we anticipate later this year or next year, so for us really at this point.

Some art off later this year, but really some of it is for US GAAP two in cares Act funding, which we are participating right now.

Got it so it sounds like not much yes.

Yes, I would.

Later this year, maybe add up but not much gap to is the one where we're very active right now.

And to follow up.

Again, focusing in on kind of.

The guidance for growth in 'twenty two.

To what extent.

Do you think price increases will contribute to that meaningfully I know you've talked about.

Shooting one last quarter. It seems like you may have done that again in Q4, but.

And pretty significant in magnitude potentially so.

Does pricing play a significant role in which you are looking at for for growth next year.

Sorry, Chris here.

Yes, I mean, just the statement I think you can assume the pricing.

It's not terribly meaningful in the first half.

For the year, but once we work through the backlog.

You're going to see the impact of that happened in the second half of the year, we've actually done two price increases one in Q3 and one in Q4, but obviously you had a sizable amount of backlog. So we're working through that and once we do youre going to start to see that more meaningfully materialized in the second half of the year.

Okay. Thanks.

Great. Thank you. Thank you.

Thank you and our last question comes from Chris Howe with Barrington Research. Your line is open.

Good afternoon, everyone.

Good afternoon good afternoon.

Yes.

Just asking a follow up on some of these questions that you've already received here.

First off with the Maestro product you talked about the success that youre seeing there still.

Several year timeline as.

When you look at the maturation of software.

As a percent of overall business.

Can you talk about the different puts and takes there as we navigate this timeline.

Towards the positive.

Perhaps getting beyond that initial double digit percentage of revenue.

Yes, let me take this.

On <unk>, we basically had two pronged strategy strategy, one litigate adopted by the customers and now that we have hundreds of thousands of customers using fee and maestro. We know it can scale. It is the cloud architecture. It is reliable where we're going now with <unk> X is.

To offer enhanced services.

Our highly differentiated let me give you example, so we offer for example for MSP managed service providers very advanced dashboards. So they can manage hundreds of customers and also brand properly for those customers. So that's a unique.

<unk>, we charge for that second we're offering restful advance Apis. So some of these verticals hospitality education can integrate very specific applications, we charge for that and then lastly increased storage for not just a month, but you know maybe you're going to see analytics.

Or one year period, we charged for that so very specifically, we are offering differentiated services and we charge for the basic management, which is very necessary for the radios. That's part of the base product hopefully that gives you a flavor how we're layering the monetization.

Okay.

And just following up on the question about government programs.

We still have many that are in the pipeline like Alibaba.

And the infrastructure build that will happen later this year and into next year.

As we take <unk>.

Next year Okay.

Kind of from an overall perspective.

Obviously and look at the thematic compared to.

This calendar year.

How should we think about that in terms of the sustainability of demand.

Especially when you consider some of these newer products 28 and 60.

It will be much further down the line.

Right I think.

So let's go one by one art off as I said for us by the time, we start to see money flowing for our solutions will be probably late this year early next year is my sense.

And part of it is going to be going for more than a gigabit access things like that so the products, we are coming out with especially in six gigahertz band that'll.

That'll be very well suited for that market.

Biden initiative is about a year away for us. So I think 23 onward, and I think one thing to keep in mind is all of these things are multiyear plans. They won't just get disseminated in one year. It will take probably 345 years to keep building the infrastructure to keep.

Providing connectivity to unconnected. So overall licenses 23 is probably when we start to see.

Meaningful EPP solution for Cambium, and then it's a multiyear problem from that point onwards, and the new products. We are doing many of them are providing the foundation, which will give us not just a gigabit connectivity, but also 500 megabit connected 200 megabit connectivity.

For scalable networks at very different price points. So thats, one thing Camden will offer different price points different scalability and a very good economic equation.

Great. Thank you for taking my questions. Thank you.

Thank you and now I would like to turn the call back to our senior director of Investor and industry Analyst Relations Peter Schuman for his closing statements. Thank you Carman during Q1, 'twenty two cambium networks will be presenting and meeting with investors on March eight at the JMP Securities Conference in March 15th at the Roth Annual Conference.

In the meantime, you are always welcome to contact our Investor Relations Department at 847 to six four to $1 88 for any questions that arise. Thank you for joining us and this concludes today's call.

And ladies and gentlemen, this concludes today's quarterly earnings call. Thank you for your participation and you may now disconnect.

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After the Speakers' remarks, there will be a question and answer session to ask a question during that time, you wouldn't need to press star one on your telephone to get in the queue.

Please limit yourself to one question and one follow up question. Thank you.

Mr. Peter Schuman, senior director of Investor and industry Analyst Relations you may begin your conference.

Carmen welcome and thank you for joining us today for Cambium networks fourth quarter and full year 2021 financial results conference call and welcome to all those joining by webcast.

Boston Lager, 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 form 8-K with the SEC a copy of today's prepared remarks will also be available on the investor page at the conclusion.

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.

<unk> is announcing our results.

Turning to the agenda cambium Networks' President and CEO of <unk> will provide the key investment highlights for the fourth quarter and full year 2021, and Stephen Cumming.

Thank you Peter.

Demand and backlog remained strong due to the continued need for expansion of broadband wireless communications networks and a strong rebound in enterprise Wi Fi shipments we.

We experienced an incremental improvement with supply chain challenges and are winning more sizeable enterprise deals while taking market share during Q4 'twenty one.

For calendar year 2021, our enterprise business grew 67% well ahead of our original forecast of 40% to 60% growth and now during our Q4 'twenty financial results Conference call last February .

We achieved our overall result, without the full benefit of the price increases and surcharges, which continue to layer into our financial results over the next few quarters.

Demand remains strong we are.

Exhibit the fourth quarter of 2021 with backlog up 7% quarter over quarter and 16% year over year.

We are at the forefront of the next wave of high performance wireless broadband technology with our millimeter wave solutions.

Our new 28 gigahertz <unk> multi gigabit fixed wireless products are expected to be released during the first quarter.

We presently have eight POC for our 28 gigahertz <unk> going on in four continents.

60 gigahertz, the NBA products are changing the way fixed wireless is viewed by our customers and expand our serviceable available market, bringing a standards based multi gigabit fixed wireless solution using licensed and unlicensed spectrum to network operators, serving residential urban and enterprise markets.

Cambium Enterprise solutions brings sophisticated cost effective multi gigabit Wi Fi.

Wireless savvy switching.

Premium software solutions and subscription services to our customers and the results have been outstanding during 2021.

We had a breakthrough quarter for the Wi Fi business.

With record revenues of $25 8 million.

Which grew 140% sequentially and 136% year over year during Q4 'twenty one.

To put this in perspective.

Wi Fi represented a third of company revenues during the fourth quarter 2021.

Previous record was 20% of revenues during the second quarter 2021.

We are winning as a result of cambium attractive cost of ownership.

Which makes our fixed wireless solutions, the compelling choice for wireless infrastructure projects around the world.

Fabric solution extending from few meters to over 100 kilometers.

All done wirelessly.

Turning to the results of the fourth quarter 2021.

Revenues of $78 $7 million came in above the outlook of $73 $5 million to $77 5 million announced during the Q3 'twenty one earnings call.

The supply constrained environment, mainly affected shipments of fixed wireless products and limited further upside to our fourth quarter results.

The enterprise market had a strong rebound in Q4, 'twenty, one as supply constraints begin to ease.

We were able to opportunistically purchase chips on the secondary market at higher prices.

non-GAAP fully diluted EPS of <unk> 16 was within the outlook announced during the Q3 'twenty one earnings call of between 11, <unk> 17 per diluted share.

Looking at revenues across our different product lines or point to Multipoint BNP business revenues decreased 26% sequentially and 31% year over year due to global supply constraints negatively impacting shipment of products.

We continued to see strong momentum in network traffic increased demand for <unk> solutions and broadening interest in our new product introductions.

We expect the component shortages to continue to improve although gradually during the first half of calendar year 2022.

The point to point PTP business improved by 10% sequentially. During Q4, 'twenty, one with component shortages limiting shipments of certain products, although we had higher shipments for federal products, while year over year revenue decreased 9% due to lower shipments for backhaul products compared to a very strong.

<unk> prior year period.

Our enterprise Wifi business had a breakthrough quarter with record revenues of $25 8 million.

Our previous record for Wi Fi was $18 3 million during Q2 'twenty one.

This is an indication of the strong potential of the Viper business, where cambium networks.

For the full year 2021 revenues of $335 9 million <unk>.

<unk> increased 21% from 2020.

The 'twenty to 'twenty, one growth was primarily driven by a point to Multipoint and enterprise Wifi solutions, which both grew double digit percentages over the previous year.

For the full year 2021, our BNP products grew 19% and enterprise Wi Fi grew 67%, while the point to point products increased 1% compared to calendar year 2020.

Looking at some notable customer wins and new product development.

In North America, we had several competitive wins aided by government funding.

Our service provider in Texas ripped and replaced a competitor's gear with cambium BNP for 50 Amp technology.

The second service provider with a new focus on fixed wireless and rural Western New York State replace Huawei equipment with <unk> hundred 50, with the aid of government funding.

Within our industrial customer base in North American Railroad, operator selected our PTP 824 ish range throughput performance.

While footprint and superior reliability.

As board some rail yards deal with unprecedented supply chain issues communications reliability is likely important.

We also see 60 gigahertz <unk> as an emerging application at rail rail yard and railways for communications across rail tracks to a wife trenching fiber to cross railroad tracks.

We had one of our first Wi Fi six key wins with a university in Texas, not only did the select over a 1000 cambium access points to cover the indoor and outdoor areas of the classrooms in dorms, but they selected our ultra high density radios for the auditorium and public areas.

They also chose our 60 gig RFC and wave to backhaul Wi Fi for their stadium areas.

<unk> first mover status for the FCC's $3 five gigahertz CBR spectrum continues to benefit our <unk> hundred 50 products and our CBR assess service in both the U S and its territories.

As of today's call. We now have over 129000 devices managed by our CBR SaaS service, an increase of over 12% since we reported last quarter and an increase of approximately 93% year over year.

Competitors.

Our Wifi performance superiority is propelling us forward and competitive wins.

We have several wins in the enterprise hospitality vertical in Germany and Italy.

This resource in the northern Hemisphere are upgrading their Wi Fi for the guest rooms and convention areas during the off peak season.

<unk> quality affordability support and relationships with partners or some of the reasons why we are winning over these customers.

In the APAC region.

Had record revenues by five bookings.

Also very robust we received a major enterprise order for over 7000 access points from Worthington Nepal for outdoor Wi Fi.

We had our first win with a large telco managed service provider MSP in Japan for our Wi Fi business. The project involved connectivity for schools and hospitals and featured a Wi Fi six products.

This opens the door for future opportunities as the Japanese market is dominated by larger telecom MSP and we won this project or a larger competitor.

And in Malaysia, one of the largest oil and gas companies in the region selected cambium intelligent position us with our PTP 454.

For connectivity between oil rigs and oil tankers.

In Caribbean, and Latin America, Cala region, <unk> had a solid quarter with record bookings.

We had a strong enterprise quarter with an education win in Brazil.

1600 schools in the state of Sao Paulo, <unk> outdoor access points or selected versus several larger competitors due to our superior performance and total cost of ownership for the customer.

Brazil represents a large opportunity to expand our enterprise business and we are making tremendous progress in the country.

We had a win with our 60 gigahertz and Wi Fi combo for a major port and the color region to provide coverage across the facility in days.

The maritime Port facility found that mobile cellular service did not perform adequately in an environment, where metal containers were moved and stacked on a continual basis.

After the plane cambium fixed wireless and Wi Fi technology, the port experienced consistent connectivity and higher data throughput.

Our partner is expanding their deployment to cover for additional board and two container ships.

Turning to new product introductions since our previous quarterly update.

We officially launched our first Wi Fi six products, the XC series, which triples, the available spectrum for Wi Fi usage, including utilization up to one two gigahertz of new clean spectrum in the six gigahertz band.

Wi Fi six <unk> solution is a compatible solution with existing Wifi six networks.

<unk> enables customers to upgrade to six gigahertz when they are ready without a price premium.

We continued with extensive field trials and proof of concept deployments, but our new 28, gigahertz <unk> and our fixed wireless product with a formal launch during Q1, 'twenty two and revenues beginning to ramp during calendar 'twenty two.

Interest and demand from service providers is very high for this long sought after product, which uses millimeter wave or fixed wireless access in areas, where it's not possible to use either fiber our traditional mobile technologies like <unk>.

Our 28 gigahertz <unk> solution will include a mandatory software attach with CN Maestro X.

Our cloud based network management platform to support service delivery and cambium cure for software maintenance and upgrades.

One of our key goals for 2022 is to build a strong foundation for our software and subscription service business.

Witching, which delivers customer stickiness.

Recurring revenue and accretive margin, we are building a sustainable subscription business through three principal initiatives first <unk> essentials provides important core services valued by all of our enterprise and fixed wireless customers.

And CN MISO X provides enhanced services functionality and ecosystem integration for the fee basis.

We continue to invest in <unk> X for enterprise and fixed wireless broadband network administration through organic development and ecosystem integration, including mandatory rates on certain products.

Second through the development and introduction of new products that are subscription first by design. During Q1 'twenty two we expect to launch our new quality of experience <unk> service <unk> provides visibility and network traffic optimization and real time to mitigate.

Congestion and control network traffic.

This feature will be increasingly important to high bandwidth multi gigabit networks across wired and wireless platforms.

Network operators subscribing to cambium <unk> can optimize the average revenue per user our pool and improve customer satisfaction.

<unk> allows network administrators to confidently offer higher service level agreements SLS.

Targeted higher <unk> subscribers.

Additional products are anticipated in the second half of 2020 tool to accelerate and annual recurring revenue.

Third we are aligning training and Incentivising, our internal go to market teams.

And more importantly, our more than 10000 global partners to effectively position and sell our subscription services.

Looking at our <unk> cloud software.

Our end to end cloud powered connectivity solution to manage the network from a single pane of glass the CN MISO cloud software continued to experience strong growth.

The total devices under cloud management in Q4, 'twenty, one where over 744300, an increase of 4% from Q3, 21 and up 42% year over year.

The expansion and growth of our subscription services will be a multiyear journey for cambium in the coming quarters, we will provide investors with metrics to measure our progress.

Looking at the channel.

In Q4, 'twenty, one we expanded our channel presence by adding over 530, net new channel partners sequentially and over 2160, net new channel partners year over year.

Which represents an increase of approximately 5% sequentially and 24% year over year.

I will now turn the call over to Stephane.

A review of our Q4, 'twenty, one financial results and Q1, 'twenty, two and full year 'twenty outlook.

So can.

<unk> had revenues of $78 7 million for Q4, 'twenty, one revenues increased by 4% quarter over quarter and decreased by 5% year over year.

The global supply constraints continue to impact shipments of our point to Multipoint and point to point products, while we had better than anticipated supply of Wi Fi chips, enabling a record breaking quarter for our enterprise Wi Fi business, which had significant pent up demand and we opportunistically managed to obtain supply in the sector.

Dairy market, increasing revenues by 140% sequentially and 136% year over year.

Our backlog in end demand remained strong with backlog, increasing by 7% quarter over quarter and 16% year over year.

On a sequential basis for Q4, 'twenty, one revenues were higher by $2 8 million. The higher revenues were primarily the result of record demand for enterprise Wi Fi solutions and higher point to point revenues driven by our federal business and increased demand for backhaul products offset by lower <unk>.

Multi point revenues due to global supply constraints negatively impacting shipments of products.

Moving to our gross margin non-GAAP gross margin of 44, 2% decreased by 700 basis points compared to Q4 'twenty.

Year over year decrease on non-GAAP gross margin was the result of lower revenues and increased component costs as well as higher freight and distribution costs caused by expedited shipping.

Our previously announced price increases began to help offset some of the gross margin degradation. During the latter part of Q4 'twenty one we.

The full impact of both the price increases will be realized during the second half of 2022.

In Q4, 'twenty, one our non-GAAP gross profit dollars or $34 8 million deal.

Decreased by $7 $6 million.

Compared to the prior year due to lower volumes and were lower by $1 5 million sequentially.

For the full year 2021, non-GAAP gross margin declined by 210 basis points to 48, 2% compared to 53% for 2020 due to higher component costs and increased freight and distribution costs.

Our longer term goal remains an annual non-GAAP gross margin target of 51% to 52%.

non-GAAP operating expenses research and development sales and marketing general administrative and depreciation and amortization in Q4, 'twenty one decreased by approximately $100000 when compared to Q4 2000 and stood at $29 1 million or 36, 9% of revenues.

Year over year, we had increased sales and marketing expenses due to higher head count and the returns in person tradeshows and customer meetings offset by lower R&D spending while G&A remained flat.

When compared to Q3, 'twenty, one non-GAAP operating expenses increased by $1 4 million during Q4, 'twenty one quarter.

<unk> by $7 6 million and were $114 3 million compared to $106 7 million for 2020.

The higher non-GAAP operating expenses during 2021 reflect the increased head count in sales and marketing to support higher revenues and more spend on R&D, resulting from new technologies.

For the full year 2021, non-GAAP operating margin was 14, 1% compared to 12% for 2020, primarily reflecting high revenues adjusted EBITDA for Q4, 'twenty, one was $6 7 million or eight 6% of revenues compared to $13 9 million or 16, 8% of revenues for.

Q4, 2000, and compared to $9 6 million or 12, 6% of revenues for Q3 'twenty one.

For the full year 2021, adjusted EBITDA was 51 point.

$2 million or 15, 3% of revenues compared to 37 4 million or 13, 4% of revenues for the full year 2020. This represents a 190 basis point improvement for the full year 2021.

37% increase in adjusted EBITDA.

<unk> incremental supply.

Cash flow from operations compared to <unk> 15.

$1 million of net cash flow provided from operating activities for the fourth quarter of 2020 and $11 8 million.

For the third quarter of 2021 for.

For the full year 2021, operating cash flow was $13 million.

Compared to $56 9 million during calendar 2020, with the decrease largely reflecting higher receivables and premade prepayments to secure inventory no.

non-GAAP net income for Q4, 'twenty, one was $4 4 million or <unk> 16 per diluted share compared to $10 7 million or <unk> 38 per diluted share for Q4, 2000, and non-GAAP net income of $6 7 million or <unk> 23 per diluted share for Q3 'twenty one.

The lower non-GAAP net income compared to both the prior year and prior quarters results.

It was primarily due to the lower revenues impacting gross profit dollars and high component costs and shipping costs.

For the full year 2021, non-GAAP net income was $35 6 million or $1 26 per diluted share and represented a 48% increase for the year compared to $24 1 million or <unk> 86 per diluted share in 2020.

Turning to the balance sheet cash totaled $59 3 million as of Q4 'twenty one an increase of $700000 from Q3 2001, the sequential increase in cash primarily reflects net income partially offset by the prepayment of $7 million for inventories during Q4 'twenty one we refinanced are out.

Standing debt of $30 2 million at a significantly lower interest rate of approximately two 2% per annum compared with our prior term loan which had an interest rate of five 3%. Additionally, we increased our total borrowing capacity by $34 million to $75 million.

Which will further allow us to grow our business since becoming a public company, we've decreased our debt and improved our capital structure and position the company to support our future growth.

Net inventories of $33 8 million in Q4, 'twenty, one decreased by approximately $200000 year over year, while increasing by $5 million from Q3 'twenty one.

Our order book remains strong we are at the start of new product cycles, and we expect the tailwind from increased government spending in our wireless broadband and federal business during the second half of 2022.

Once the supply issues are resolved, we expect to regain scale improve operational efficiency and make significant progress to achieving our long term target operating model.

Moving to the first quarter and full year 2022 financial outlook.

<unk>, our current visibility as of February 17, 2020 to Q1 'twenty two financial outlook is expected to be as follows revenues between 77, 5% to $81 5 million.

non-GAAP gross margin between 44 to 45, 9% non-GAAP operating expenses between 32 to $31 2 million and non-GAAP operating income between $4 two to $6 2 million.

Interest expense net of approximately $700000 and non-GAAP net income between $2 nine to $4 4 million or net income between 10 to 15 per diluted share.

Adjusted EBITDA between five 2% to $7 2 million and.

And adjusted EBITDA margin between $6 seven to eight 8%.

A non-GAAP effective tax rate of approximately 18% to 20% and approximately $28 3 million weighted average diluted shares outstanding.

Cash requirements are expected to be as follows paydown of debt $700000 cash flow interest expense approximately $300000 and capital expenditure of one six to $1 8 million.

Full year 2022 financial outlook is expected to be as follows revenues between $355 million to $365 million.

Increasing between approximately $5 seven to eight 7% non-GAAP net income between $35 5 million to 35.

$39 5 million.

Our net income between $1 23 to $1 36 per diluted share.

Adjusted EBITDA margin between 14% to 16%.

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

Cambium remains very well positioned for 2022 with multiple growth drivers, including our multi gigabit wireless products, such as enterprise Wifi six and six E.

Wireless <unk> switching products.

60, gigahertz, <unk> wave and our 28 gigahertz millimeter wave solutions for fixed five G.

New six gigahertz fixed wireless solutions, arriving later in 2022, a reinvigorated federal business.

As well as our software as a service solutions.

We expect increased scale should benefit our future operating results and we remain focused on judiciously managing our costs.

While continuing to invest in innovative products to maintain our technology edge.

We also got named by Forbes as number 22 on their list of the best top 100 small cap companies for 2022.

I'd like to show my appreciation for our employees partners and customers for their result during these unprecedented times.

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

Thank you and as a reminder to ask a question simply press star one on your telephone.

So with your other question Christa hash or the apparent key please.

Please limit yourself to one question and one follow up question.

Please standby, while we compile the Q&A roster.

Your first question comes from Scott Searle with Roth Capital. Your line is open Hey, good afternoon, congratulations guys nice job on the quarter.

Hey.

Steve I'm not sure if I missed it but did you provide a number in terms of what was left on the table due to supply constraints in the fourth quarter and then looking to the first quarter guidance I'm wondering if you could directionally give us some idea by product line, how that looks Wi Fi had an absolutely huge fourth quarter does that continue into the first quarter, how much of a recovery.

Acting on the multi point front, given a lot of products given the supply chain issues. I was wondering if you could talk around that and then I had a follow up.

Yes, Scott I'll take this this is Stephen in the tool can come in at the end if he has anything else to add.

Got to accurately quantify that in terms of what was left on the table I think the best the best way to answer is if you look at our peak revenues in in 2021.

Prior to these major supply chain disruptions they were approximately $93 million. So I think it's fair to say given the increased backlog.

And momentum that we're seeing on our product lines at an island, especially enterprise as you commented on you could expect that we would have been beyond that that peak had we not been supply constrained at certainly our order book.

And the bookings activity and the backlog indicates that we can do much more than 93.

You saw some of those results we benefited from some of the supply chain upsides in particular in enterprise in Q4, and as you saw we're hitting our annualized $100 million run rate for that business. So there's strong momentum in the business.

Certainly as I say to sort of recap higher than the previous peaks, where which is a fair way to assess it.

With regard to.

Growth rates by product line.

For Q1.

Again, we're living in a very dynamic environment with regards to the supply chain, but this is how we see it planning at the moment.

M P side of the business for Q1, we're seeing that in I would say the upper twenty's sequential growth rate.

The PTP coming off a very strong Q4, I would say flattish.

Wifi off an exceptional record Q4, we're going to be down roughly about 40%.

And then there's a little bit in other but that should give you. Some flavor of the breakdown got you very helpful. And lastly, if I could then looking to your guidance for fiscal 'twenty, two which is I think well above where the consensus is.

2022 is that possible I know, there's some price increases going through but supply chain coming together a lot of different elements here to get to the numbers, though it certainly implies right that we start to see a pick up either in second quarter second half with improved gross margin outlook. So I was wonder if you could provide some more color on that thanks.

Yes, I mean, I think youre right.

We still see and nobody has a crystal ball at the moment, but we still see the first half of the year.

Being more challenging from a supply chain perspective, and then that starts to ease in the second half so youre going to start to think it's going to be happening in Q2, specifically.

One is hopefully we're going to see a slight easing of some of these supply constraints, obviously, it's not going to spring back too.

Two.

Full supply, but we can start to see that he's coupled with again, you'll start to see layering in of some of the price increases that will help.

Revenue and gross margin.

Then with regards to gross margin.

I think.

We're going to see continual progression.

You've already seen that in our guidance for Q1 were up almost 100 basis points in Q1 as some of these price moves come in and then you see a little bit more in Q2, and you'll see improving in the second half of the year.

Tough for me to comment.

We're going to get back into the <unk>, because it's just too far out for us to predict at this point in time, but certainly we've got a path to see continued progression and we're working towards that.

I'll just add one comment the new products, we have introduced very gratifying to see the adoption of 60 gigahertz worldwide and the 28 gigahertz funnel very very strong funnel and the average deal size on 28 gigahertz <unk> much larger we are seeing that dynamic and the last point I'll make is that the.

Government and defense will also accelerate I think in the second half, but overall from products point of view, we feel very good Javier position.

Okay, great. Thanks, so much nice job. Thanks.

Thanks Scott.

Our next question comes from Sam <unk> with JP Morgan Your question. Please.

Hi, This is Joe Cardoso on for stomach. Yes. My first question is just on the revenue guide for <unk> It sounds like.

This quarter, you were up 4% quarter over quarter, well ahead of your guide and I would assume that you would see some sequential growth at that level or better heading into the first quarter. Just given what you are talking about in terms of.

And improving with better demand backdrop in terms of both are including seems robust backlog and then pop or that youre seeing improving supply from what seems to be your suppliers as well as some of the actions that you guys take tuck, but youre only guiding for kind of like low single digit sequential improvement I guess.

What am I not.

Understanding there like why aren't we seeing a stronger sequential increase going into the first quarter with it seems like all of that.

You seem like Youre benefiting from both the demand and supply easing already coke going into the first quarter of this year.

Yes, Joe This is David again, I'll take it and then I'll, let <unk> comment.

At the end, but.

I think the bottom line is we.

We're still in a very lean.

And the rest of the industry are in a very challenging supply constrained environment and so.

Every every day provides a new set of challenges and Youre absolutely right. We've got ahead of this we've taken some actions we've moved on pricing we've done some redesigns.

And maybe you could say that our guide is a little bit conservative at this point in time, but I think we're seeing.

Modest progression, where we're actually growing sequentially.

Certainly hope we can beat that number, but I think that sort of reflective of this environment that we see at this point in time I think we think things have stabilized.

We were particularly pleased on what happened in Q4 on some additional supply for enterprise, but likewise.

We were curtailed in our PSP business on supply so it's a bit of a moving target.

So we're being a little bit conservative for our Q1 guide and hopefully we can beat it yes, I think Joe just one point I'd add is first half you will see gradual improvements thats why we are being conservative I think in the second half, where we see accelerated improvements in supply chain. We work very closely with our partners all the key chip partners. So I.

You are just seeing a level of conservatism because I think we want to see couple of quarters of continued strong supply, which will then give us confidence and knowledge on the accelerated path.

Got it and then my follow up question is a little bit more simpler.

Yes, let me let me take that one we have done the first phase of our product redesign very well and actually that helped us with some of that solution in Q4 and yet four in the first half I think there will be some parts, which will still be in paucity. So we keep looking at where we could redesign, but I think the major redesign part is over.

And pretty much built into our products.

Got it thanks for the color guys. Thanks, Thank you Eric.

Your next question comes from Rod Hall with Goldman Sachs. Your question. Please.

Yeah, Hey, guys. Thanks for the question.

I wanted to come back to the Wi Fi and obviously a huge number there it feels like I think you've kind of commented on it in the.

Remarks that you had a lot of supply released there.

But I'm just kind of curious whether you might've changed your sourcing strategy a little bit here I know that a tool it's kind of a it's a.

Footprint kind of model, so if you get that footprint.

Over time, that's worth something to use so maybe it makes sense to you.

Overpay for chips shorter term or pay more for them. So that you can supply. It I'm just curious kind of how youre thinking about that supply strategy now in the context of this market.

Sure.

But since we are driving lot of innovation with their chips, we get good attention and we do see improving situation.

In 2022, especially in second half as I said gradual improvements in first half, but I think pretty solid improvement. That's the indication we get on Wi Fi set fixed wireless broadband users diverse set of chips. They are not just chipsets. There we have dubai distinct chips from multiple vendors.

So fixed wireless broadband is a little more sophisticated that way that's why in general fixed wireless broadband will kind of lag.

Wi Fi side with the Wi Fi side of the complete chipset with a partner we do so hopefully that gives you a little more color.

Yes, that's great a tool thank you.

On the Wi Fi again could you just clarify.

You are saying down 40% in Q1, and this huge almost doubling of revenues in Q4.

Is that was that a single deal or can you maybe dive into a little bit more about what drove that because its such Ed.

<unk> fluctuation in numbers from one quarter to the next I'd, just like to make sure that I understand the detail on that yes.

Yes, let me take this and then Stefan has any suggestion you can add I think some of the supplies for the chips came in late in Q3, So we could not turn that into Q3.

Sure.

Yes, and just just to add to that rod.

I think that the guidance for Q1 on Wi Fi This is al.

Supply related.

We have.

A record not just a record number in Q4, but we got record bookings for enterprise.

Into the year with record backlog for enterprise. So this is us really navigating the supply constraints and as Aneel mentioned, we had a little bit fall in from Q3, and remember that we had a disappointing Q3 on enterprise again, all supply related so that helps us out in Q4, and so we're navigating now.

One with the continued supply constraints and Rod to answer your specific question no. There was no large deal any such thing we have lost some mid size or large number of customers.

Our average deal size is increasing and enterprise Wi Fi, we are closing and more strategic accounts, but this doesn't include any some large one time bluebird it does not.

Got it so it sounds like we should do is just kind of smoothed those numbers through Q3, and Q4 and we'd have a better picture of what the underlying kind of demand look like.

I don't have to do by looking at yes, yes, okay. Great. Thanks, guys I appreciate it thank you.

And your next question comes from George Notter with Jefferies. Your line is open.

Hi, guys. Thanks, very much I guess I also wanted to ask about the supply chain environment you guys are talking about.

Substantial improvement in the second half of the year end.

Just going through earnings season, it certainly feels like Thats a bit of a non consensus view I think many out there we expect things to remain pretty tough through all of this year, but.

Is there any more detail you can give us on exactly why you think the supply chain is going to ease for you in the second half is there.

Is it specific conversation specific fab.

That are coming online.

Kind of detail could you give us there.

Let me let me take this.

When you look at the lifestyle part as I said lightweight product chipsets and they seem to be recovering faster number one number two.

In the Wi Fi about maybe nine months back or so we sense that things are changing on Wifi four five.

Yes.

They are kind of lagging behind that is definitely positive supply. So thats kind of Wi Fi the fixed wireless broadband they use analog chips. They use a variety of chips DSP. The FPGA is so I think what you will see George different dynamic for different companies.

It depends upon what else chips, you use because not all chip vendors are improving at the same rate. They all use different fabs. Some of 2028 nanometer above some of 28 nanometer or below so in general our readers for cambium business, we will see a good improvement in Wifi enterprise supply.

And second half and the fixed wireless broadband it might be little behind.

That we mentioned on last call about some of the Redesigns that we were doing.

In fixed wireless to more widely available.

So we do expect in the tool comment on this early we do expect some of those initiatives to work their way through the system.

And help us out in the second half I think from a sort of quantifying really what we're hearing from supply overall, certainly we are hearing from our vendors and our suppliers that things are improving.

And they seem a little bit more committal to us for the second half of the year.

Its sort of wait and see mode at this point in time.

Got it that's super helpful.

A few minutes ago, you kind of mentioned the bookings and backlog strength on the enterprise side of the business does that.

Can you give us any comment on what youre seeing on on fixed wireless access is that also a strong in terms of bookings backlog and so on.

Yes bookings backlog I would say strength across pretty much all of our all of our product lines.

We we entered the quarter.

With a highlight higher backlog position.

Well over 100% of our guide for Q1, so, yes, I would say strength, both for bookings and backlog goes across pretty much all of our product line.

Got it great and then the last one I was just going to ask on with channel inventory levels any comment on where.

The channel stands right now in terms of inventory. Thanks, a lot guys, yet so as expected.

We.

More backend loaded with our shipments into the channel.

And so there was a lot of product that was shipped towards right at the end of the year.

So for the distributors to turnaround and Pls that.

Four.

At the beginning of the year is strong so we're expecting that to sell through nicely.

Great. Thank you.

Thanks, Thanks, John .

Thank you. Our next question comes from Simon Leopold with Raymond James Your question. Please.

Hi, guys. This is Victor Chu in for Simon.

Just wanted to.

Really quickly on the guidance.

It seems like the <unk> adjusted EBITDA margin was six seven to eight 8% in <unk>.

But the full year, you guided 14% to 16% so.

Understanding that you were expecting improvement.

Gradually throughout the year, but can you just help us bridge that gap a little on what the trajectory looks like there because.

That implies Q, <unk> EBITDA margins to kind of be well above the 60%.

To kind of panic.

Your guidance for the rest of the year. So can you just kind of help us.

Flesh that out a little bit worse.

Yes, I think Victor the way you should be thinking about this and we may have said it on previous calls but.

2022 is shaping out to be an inverse of 2021.

So if you think of 'twenty, one we had a phenomenal first half of the year I think we peaked at.

EBITDA margins of almost 20% and so our expectation is supply.

<unk>.

Strength ease.

We'll see tremendous operating leverage in our model So we'll see.

Some nice leverage in the second half of the year, but the first half is going to be squeezed.

Okay.

And let me say and I guess, just could you speak some about the demand pipeline through to 2008 gigahertz products.

Geographic region I'm, assuming most of the demand for 22 years driven primarily by.

International customers.

Most of the occupied by tier tier one carriers in the U S.

Yes.

Let me take this one so 28 gigahertz as I said, we are doing with <unk> and right now I would say cambium networks has a clear.

Our line of sight to maybe over 50 service providers in our funnel and what is very gratifying to see so many countries are adopting continued giga <unk> number one number two it gives our performance as we are doing POC testing due to the performance of truly a gigabit type connectivity so oral.

Very pleased to see.

One comment I made on my comments earlier, the average deal size on 28 gigahertz is much larger because we are dealing with now larger tier twos and internationally from <unk>.

Once as well, particularly in EMEA. So every quarter, we will give you a lot more flavor, but very excited about the <unk> five <unk> fixed and cambium product will be one of the leadership products in this segment.

Okay. That's helpful. Thank you.

Thanks Ryan.

Thank you. Our next question comes from Tim <unk> with Northland Capital. Your question. Please.

Hi, good afternoon.

Pardon me.

You mentioned a couple of.

<unk>.

Kind of I guess government.

Government funding aided wins I think more on the rip and replace category, which.

I think you're referring to a different kind of specific bucket of funds there.

Relative to <unk> or anything else.

We see coming at US and my question is.

To what extent was that a.

Any type of that activity under whichever bucket if you like.

Contributor in 'twenty, one and as you look at your guidance and growth outlook for 'twenty two.

What proportion of that growth would you say is accounted for by either the beginning ramps and art off where we're starting to hear about some acceleration here or other government programs.

I'll take this one excellent question by the way I think there are multiple sources of government funding.

Currently our off which everyone has been tracking which is focused on the rural side then.

And then there is infrastructure bill, which is focused on dissemination of that money through the local to the states and local governments, but there's a third bucket, which is the caf II.

<unk> two of the connect America fund too.

It was about $8 billion fund I think what $2 billion has been spent but it still has.

Five years of life still before that fund gets completely dissipated so many of the projects.

Which we participate are actually gap to the peers X type of projects. When we look at the different government funding, although for us will probably start I would guess.

Late this year second half this year, because we are into access and there are still questions, which need to be answered.

Before the art of money really get released completely some people are seeing the benefit of cambium, probably we'll see the benefit I would say maybe late this year.

Biden initiative, we anticipate later this year or next year, so for us really at this point.

Some art off later this year, but really some of it is for US GAAP two in cares Act funding, which we are participating right now.

Got it so it sounds like not much yes.

Yes, I would.

Later this year, maybe add up but not much gap to is the one where we're very active right now.

And to follow up.

Again focusing in on.

The guidance for growth in 'twenty two.

To what extent.

Do you think price increases will contribute to that meaningfully I know you've talked about.

Initiating one last quarter. It seems like you may have done that again in Q4, but.

And pretty significant in magnitude potentially so.

Does pricing play a significant role in which you are looking at for for growth next year.

Chris here.

Yes, I mean this is Stephen I think you can assume the pricing.

It's not terribly meaningful.

Off of the year, but once we work through the backlog.

Youre going to see the impact of that happened in the second half of the year, we've actually done two price increases one in Q3 and one in Q4, but obviously you had a sizable amount of backlog.

So we're working through that and once we do youre going to start to see that more meaningfully materialized in the second half of the year.

Okay great.

Great. Thank you. Thank you.

Thank you and our last question comes from Chris Howe with Barrington Research. Your line is open.

Good afternoon, everyone.

Yes, good afternoon.

Yes.

Just asking a follow up on some of these questions.

Already received here.

First off with the Maestro product you talked about the success that youre seeing there still.

<unk> year timeline.

When you look at the maturation of software.

As a percent of overall business.

Can you talk about the different puts and takes there as we navigate this timeline.

Towards the positive.

Perhaps getting beyond that initial double digit percentage of revenue.

Yes, let me take this.

On <unk>, we basically had two pronged strategy strategy, one litigate adopted by the customers and now that we have hundreds of thousands of customers using fee in lifestyle. We know it can scale. It is the cloud architecture. It is reliable where we're going now with <unk> X is.

To offer enhanced services.

<unk> Board recharged for that second we're offering restful advance Apis. So some of these.

Verticals hospitality education can integrate very specific applications, we charged for that and then lastly, not increased storage for not just demand, but you know maybe you're going to see analytics or one year period, we charged for that so very specifically, we are offering differentiated services and we charge for that.

The basic management, which is very necessary for the radios. That's part of the base product hopefully that gives you a flavor how we're layering the monetization.

Okay.

And just following up on the question about government programs.

We still have many that are in the pipeline like Alibaba.

And the infrastructure build that will happen later this year and into next year.

As we take <unk>.

Next year.

Kind of from an overall perspective.

Obviously and look at the thematic compared to.

This calendar year.

How should we think about that in terms of the sustainability of demand.

Especially when you consider some of these newer products, 28% and 60.

We will be much further down the line.

Right I think.

I will go one by one art off as I said for us by the time, we start to see money flowing for our solutions will be probably late this year early next year is my sense.

And part of it is going to be going for more than a gigabit access things like that so the products, we are coming out with especially in six gigahertz band that.

That'll be very well suited for that market.

Providing connectivity to unconnected. So overall licenses 23 is probably when we start to see.

Meaningful app solution for Cambium, and then it's a multiyear problem from that point onwards, and the new products. We are doing many of them are providing the foundation, which will give us not just a gigabit connectivity, but also 500 megabit connected with 200 megabit connectivity.

For scalable networks at very different price points. So thats, one thing Camden will offer different price points different scalability and a very good economic equation.

Great. Thank you for taking my questions. Thank you.

And ladies and gentlemen, this concludes today's quarterly earnings call. Thank you for your participation and you may now disconnect.

Q4 2021 Cambium Networks Corp Earnings Call

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