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Cambium (CMBM) Tops Q1 Earnings Estimates on Record Revenues

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Cambium Networks Corporation (CMBM - Free Report) reported solid first-quarter 2021 results, wherein both the bottom and the top lines beat the respective Zacks Consensus Estimate.

Net Income

On a GAAP basis, net income in the March quarter was $19.9 million or 70 cents per share against a net loss of $0.8 million or loss of 3 cents per share in the prior-year quarter. The improvement primarily resulted from higher operating income and a benefit from income tax.

Non-GAAP net income came in at $11.7 million or 41 cents per share compared with $1.4 million or 5 cents per share in the year-ago quarter. Also, the bottom line beat the Zacks Consensus Estimate by 8 cents, delivering a surprise of 24.2%.

Revenues

Quarterly revenues were a record $88.5 million compared with $60.4 million in the year-ago quarter. The growth was driven by solid demand for Point-to-Multi-Point, Point-to-Point and enterprise Wi-Fi solutions. Also, the top line surpassed the consensus estimate of $83 million.

During the quarter, Cambium shipped its 9 millionth radio since becoming a standalone company. It is benefiting from robust demand for wireless broadband connectivity and the acceptance of its new product introductions.

By product category, revenues at Point-to-Multi-Point came in at $57.8 million compared with $34.9 million a year ago. Point-to-Point revenues grew 33.3% to $17.5 million and revenues at Wi-Fi were $12.1 million, up from $11.5 million.

By region, revenues in North America came in at $54.2 million compared with $31 million in the prior-year quarter. Europe, Middle East and Africa revenues were $18.7 million compared with $18.7 million, while the same in Caribbean and Latin America improved 101.1% to $10.5 million. Asia Pacific revenues declined 5.6% to $5.1 million.

Other Details

Non-GAAP gross profit was $44.3 million compared with $30.8 million in the prior-year quarter with respective margins of 50.1% and 51%. Total operating expenses were $30.8 million compared with $30.3 million in the prior-year quarter.

Non-GAAP operating income improved to $15.5 million from $3 million. Adjusted EBITDA totaled $16.5 million compared with $4.4 million a year ago with respective margins of 18.6% and 7.3%.

Cash Flow & Liquidity

During the first quarter, Cambium utilized $7.6 million of cash from operating activities compared with cash utilization of $0.8 million in the year-ago quarter.

As of Mar 31, 2021, the company had a $51.2 million cash balance with $22.8 million of long-term debt compared with the respective tallies of $62.5 million and $25 million at the end of the previous quarter.

Q2 & 2021 Outlook

Cambium has provided the outlook for the second quarter and full-year 2021. For the ongoing quarter, revenues are expected to be in the range of $85-$90 million. Non-GAAP EPS is anticipated to be in the range of 29-35 cents, with GAAP EPS in the band of 22-27 cents. Adjusted EBITDA is projected in the range of $12.4-$14.8 million with its margin between 14.6% and 16.4%. Further, capital expenditures are estimated between $2.5 million and $2.9 million.

For full-year 2021, revenues are projected to grow at a rate of 24-29% ranging between $345 million and $359 million. Adjusted EBITDA margin is anticipated in the 15-17% band.

Zacks Rank & Other Stocks to Consider

Cambium currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader industry are Vicor Corporation (VICR - Free Report) , Cogent Communications Holdings, Inc. (CCOI - Free Report) and Western Digital Corporation (WDC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.

Cogent delivered a trailing four-quarter earnings surprise of 29%, on average.

Western Digital delivered a trailing four-quarter earnings surprise of 26.3%, on average.

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