Cambium Networks (CMBM) posts Q1 2026 growth but warns on going concern
Cambium Networks Corporation reported sharply improved operating results but remains under severe financial strain. For the three months ended March 31, 2026, revenue rose to $44.6 million from $33.7 million, driven by stronger Enterprise and Point‑to‑Multi‑Point demand. Gross margin improved to 50.8%, helping shrink the operating loss to $1.2 million and net loss to $3.4 million (basic and diluted loss per share of $0.12, versus $0.42 a year earlier).
Despite this progress, the balance sheet is stressed. Cash was $5.9 million versus $11.1 million at year‑end, while current liabilities of $141.9 million exceeded total assets of $138.4 million, leaving shareholders’ deficit at $(38.6) million. The company has $21.5 million outstanding on its term loan and $45.0 million drawn on its revolving credit facility, both classified as current after covenant breaches and payment defaults. Management acknowledges “substantial doubt” about its ability to continue as a going concern and is seeking asset divestitures, new capital and accommodations from its lender. Trading in its ordinary shares was suspended on Nasdaq and moved to the OTC Experts Market under the symbol CMBMF.
Positive
- None.
Negative
- Severe financial distress and going-concern doubt: At March 31, 2026, Cambium had $21.5 million outstanding on its term loan and $45.0 million on its revolving credit facility, was in covenant and payment default, had cash of $5.9 million and shareholders’ deficit of $(38.6) million, and management disclosed “substantial doubt” about its ability to continue as a going concern.
Insights
Improved Q1 operations are outweighed by severe covenant defaults, liquidity risk and going‑concern doubt.
Cambium Networks grew Q1 2026 revenue to $44.6 million with a 50.8% gross margin, cutting operating loss to $1.2 million. This reflects healthier product mix, especially in Enterprise and Point‑to‑Multi‑Point, and lower restructuring costs versus the prior year.
However, leverage and liquidity dominate the story. The company has $21.5 million outstanding on its term loan and $45.0 million on its revolving credit facility, both effectively current after covenant breaches and non‑payment beginning in June 2025. Cash was only $5.9 million at March 31, 2026, with shareholders’ deficit of $(38.6) million.
Management explicitly concludes that substantial doubt exists about continuing as a going concern within one year of issuance. They are pursuing divestitures, capital raises and lender accommodations under the Amended Credit Agreement maturing November 17, 2026. Actual outcomes depend on successful negotiations, access to capital markets and execution of any asset sale plans.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
|
Not Applicable |
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
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c/o Cambium Networks, Inc. |
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( |
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(Address of principal executive offices, including zip code) |
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(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
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|
N/A (OTC Markets Group, Inc.)* |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
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Accelerated filer |
☐ |
☒ |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
* As previously disclosed on March 26, 2026, following receipt of a delisting notice from The Nasdaq Stock Market LLC, trading in the Company's ordinary shares on the Nasdaq Global Market was suspended on March 27, 2026 and on March 30, 2026, the Company's ordinary shares commenced trading on the OTC Experts Market under the symbol "CMBMF".
As of May 14, 2026, the registrant had
Table of Contents
|
|
Page |
PART I. |
FINANCIAL INFORMATION |
|
Item 1. |
Financial Statements (Unaudited) |
1 |
|
Consolidated Balance Sheets |
1 |
|
Consolidated Statements of Operations and Comprehensive Loss |
2 |
|
Consolidated Statements of Shareholders’ Deficit |
3 |
|
Consolidated Statements of Cash Flows |
4 |
|
Notes to Unaudited Consolidated Financial Statements |
5 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
29 |
Item 4. |
Controls and Procedures |
29 |
PART II. |
OTHER INFORMATION |
32 |
Item 1. |
Legal Proceedings |
32 |
Item 1A. |
Risk Factors |
32 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
32 |
Item 3. |
Defaults Upon Senior Securities |
32 |
Item 4. |
Mine Safety Disclosures |
32 |
Item 5. |
Other Information |
32 |
Item 6. |
Exhibits |
33 |
Signatures |
34 |
|
i
Note regarding forward-looking statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, forward-looking statements may be identified by terms such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, uncertainties and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, they should not be relied upon as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
ii
Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
iii
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Cambium Networks Corporation
Consolidated Balance Sheets
(in thousands, except for share and per share data)
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December 31, |
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March 31, |
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2025 |
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2026 |
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(unaudited) |
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ASSETS |
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Current assets |
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Cash |
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$ |
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$ |
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Receivables, net of allowance for credit losses of $ |
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Inventories, net |
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Income taxes receivable |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Noncurrent assets |
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Property and equipment, net |
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Software, net |
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Operating lease right-of-use assets |
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Goodwill |
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Restricted cash |
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Other noncurrent assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND DEFICIT |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Employee compensation |
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Current portion of long-term debt, net |
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Deferred revenues |
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Other current liabilities |
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Total current liabilities |
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Noncurrent liabilities |
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Deferred revenues |
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Noncurrent operating lease liabilities |
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Deferred tax liabilities, net |
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Other noncurrent liabilities |
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Total liabilities |
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Commitments and contingencies (Note 10) |
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Shareholders' deficit |
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Share capital; $ |
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Additional paid in capital |
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Treasury shares, at cost, |
|
|
( |
) |
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( |
) |
Accumulated deficit |
|
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( |
) |
|
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( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total shareholders' deficit |
|
|
( |
) |
|
|
( |
) |
TOTAL LIABILITIES AND DEFICIT |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
1
Cambium Networks Corporation
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except for share and per share data)
(unaudited)
|
|
Three Months Ended March 31, |
|
|||||
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2025 |
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2026 |
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Revenues: |
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Product |
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$ |
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$ |
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Subscriptions and services |
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Total revenues |
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Cost of revenues: |
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Product |
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Subscriptions and services |
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Total cost of revenue |
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Gross profit: |
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Product |
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Subscriptions and services |
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Total gross profit |
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Operating expenses |
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Research and development |
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Sales and marketing |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Operating loss |
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( |
) |
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( |
) |
Interest expense, net |
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Other expense (income), net |
|
|
|
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( |
) |
|
Loss before income taxes |
|
|
( |
) |
|
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( |
) |
Provision for income taxes |
|
|
|
|
|
408 |
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Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
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||
Loss per share |
|
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Basic |
|
$ |
( |
) |
|
$ |
( |
) |
Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted-average number of shares outstanding to compute net loss per share |
|
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||
Basic |
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Diluted |
|
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|
|
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||
Comprehensive loss |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Foreign currency translation adjustment |
|
|
|
|
|
( |
) |
|
Comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
Cambium Networks Corporation
Consolidated Statements of Shareholders’ Deficit
(in thousands)
(unaudited)
|
|
Three Months Ended March 31, 2025 |
|
|||||||||||||||||||||||||
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Share Capital |
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||||||||||
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Shares |
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Amount |
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Additional |
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Treasury |
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Accumulated deficit |
|
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Accumulated |
|
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Total |
|
|||||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
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( |
) |
|
|
— |
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|
( |
) |
Share-based compensation |
|
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— |
|
|
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— |
|
|
|
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|
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— |
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— |
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|
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— |
|
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|
||
Issuance of vested shares |
|
|
|
|
|
— |
|
|
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— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Treasury shares withheld for net settlement |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
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|||||||
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|||||||
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|||||||
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Three Months Ended March 31, 2026 |
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|||||||||||||||||||||||||
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Share Capital |
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||||||||||
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Shares |
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Amount |
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Additional |
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Treasury |
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Accumulated deficit |
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Accumulated |
|
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Total |
|
|||||||
Balance at December 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
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|
||
Issuance of vested shares |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Treasury shares withheld for net settlement |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
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|
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|
|||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
Cambium Networks Corporation
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
|
Three Months Ended March 31, |
|
|||||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
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||
Depreciation |
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||
Amortization of software and intangible assets |
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||
Amortization of deferred debt issuance costs |
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||
Share-based compensation |
|
|
|
|
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|
||
Deferred income taxes |
|
|
— |
|
|
|
80 |
|
Provision for inventory excess and obsolescence |
|
|
( |
) |
|
|
( |
) |
Provision for estimated credit losses |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
( |
) |
|
|
( |
) |
Change in assets and liabilities: |
|
|
|
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|
|
||
Receivables |
|
|
|
|
|
( |
) |
|
Inventories |
|
|
|
|
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|
||
Prepaid expenses |
|
|
( |
) |
|
|
( |
) |
Income taxes receivable |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued employee compensation |
|
|
( |
) |
|
|
|
|
Accrued liabilities |
|
|
|
|
|
|
||
Other assets and liabilities |
|
|
( |
) |
|
|
|
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Purchases of software |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Repayment of term loan |
|
|
( |
) |
|
|
|
|
Taxes paid from shares withheld |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate on cash |
|
|
|
|
|
( |
) |
|
Net decrease in cash |
|
|
( |
) |
|
|
( |
) |
Cash, beginning of period |
|
|
|
|
|
|
||
Cash and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Income taxes paid, net of refunds received |
|
$ |
( |
) |
|
$ |
( |
) |
Interest paid |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Decrease in property, equipment and software unpaid or accrued in liabilities |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
Reconciliation of Cash and restricted cash at end of period: |
|
|
|
|
|
|
||
Cash |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash and restricted cash |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
Cambium Networks Corporation
Notes to Unaudited Consolidated Financial Statements
Note 1. Business and significant accounting policies
Business
Cambium Networks Corporation (“Cambium” or “Cambium Networks” or the “Company”), incorporated under the laws of the Cayman Islands, is a holding company whose principal operating entities are Cambium Networks, Ltd. (UK), Cambium Networks, Inc. (USA), and Cambium Networks Private Limited (India). On June 26, 2019, the Company completed an Initial Public Offering and the Company's ordinary shares began trading on the Nasdaq Global Market. Trading in the Company's ordinary shares was suspended at the open of trading on March 27, 2026. Trading in the Company's ordinary shares under the symbol "CMBMF" on the OTC Experts Market began on March 30, 2026.
Cambium Networks Corporation and its wholly owned subsidiaries design, develop, and manufacture fixed wireless and PON/XGSPON based broadband, Wi-Fi, and local area networking ("LAN") switching infrastructure, and security gateway solutions for a wide range of applications, including broadband access, wireless backhaul, Internet of Things (IoT), public safety communication and Wi-Fi access. Cambium's products enable service providers, enterprises, industrial organizations and governments to deliver exceptional digital experiences and device connectivity, with compelling economics. The Company's ONE network platform simplifies the management of Cambium Networks' wired and wireless technologies. The Company's product lines fall into three broad, interrelated categories: Fixed Wireless and fiber Broadband ("FWB"), Enterprise Networking, and Subscriptions and Services.
Basis of Presentation
The consolidated financial statements as of March 31, 2026, and for the three-month periods ended March 31, 2025 and 2026, and the related notes are unaudited and include the accounts of Cambium Networks Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The unaudited consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, and, in the opinion of management, reflect all adjustments, which comprise only normal recurring adjustments necessary to state fairly the Company’s financial position as of March 31, 2026 and results of operations for the three-month periods ended March 31, 2025 and 2026 and cash flows for the three-month periods ended March 31, 2025 and 2026. The consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. The consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K and filed with the SEC on May 1, 2026. The results of operations for the three-month period ended March 31, 2026 are not necessarily indicative of the operating results to be expected for the full year.
Going Concern
In accordance with the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its assessment, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due over the next twelve months, as well as other factors including the markets in which the Company competes and the current customer demand for the Company’s products.
As of March 31, 2026, the Company was not in compliance with its quarterly fixed charge coverage ratio and quarterly consolidated leverage ratio covenants. As of June 30, 2025, the Company ceased payment of principal and interest on the term loan and payment of interest on the revolving credit facility. Such financial covenant and payment defaults afford the lender the right to declare the amounts outstanding immediately due and payable, and although the Company continues regular discussions with the lender, it has not been able to obtain a waiver of the defaults, or otherwise refinance such indebtedness. If the lender were to accelerate the maturity of the Company's indebtedness under the Amended Credit Agreement, the Company would not be able to repay the debt, and therefore, there is substantial uncertainty the Company would be able to continue as a going concern. The Company's obligations under the Amended Credit Agreement mature and become due and payable on November 17, 2026, absent acceleration by the lender.
As the financial covenant and payment defaults afford the lender the right to declare the amounts outstanding immediately due and payable, the term loan facility and the associated debt issuance costs and the revolving credit facility are classified as a current liability and the deferred debt issuance costs associated with the revolving credit facility are classified as a current asset in the
5
accompanying consolidated balance sheets as of December 31, 2025 and March 31, 2026. Please refer to Note 5. Debt, regarding the Company’s debt outstanding under its credit facilities with Bank of America.
The Company continues to take actions to improve its profitability and focus on operating efficiency and reducing discretionary spending, deferring capital expenditures and implementing cost reductions to align its cost structure with current and expected revenue levels. The Company is actively seeking additional capital through possible divestitures and/or capital raising transactions and working on accommodations with its lender to provide it with the financial flexibility needed to meet its obligations as they come due over the next twelve months. The Company's ability to achieve these objectives depends on its ability to complete one or more divestitures of business lines and/or obtain alternative sources of financing in a timely fashion, as well as on its expectations regarding macro-conditions in the markets in which the Company competes, customer acceptance and purchase of its products, buying decisions by its distributors, improvements in its manufacturing challenges with the transition to new manufacturers, and other factors, many of which are not within the Company's control.
Based on the Company's current forecast, it is projecting future noncompliance with its financial covenants through maturity of the debt in addition to the covenant noncompliance described above. If the lender were to accelerate the maturity of the Company's indebtedness under the Amended Credit Agreement, there is substantial uncertainty that the Company would be able to secure capital resources to repay the amounts due. Due to these uncertainties and given the debt matures on November 17, 2026, management concluded that substantial doubt exists with respect to the Company's ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Update to Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies disclosed in the 2025 Annual Report on Form 10-K, Part II, Item 8.
Recently issued accounting standards not yet adopted
In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission's ("SEC") Disclosure Update and Simplification Initiative. The amendments in this update require modification of certain disclosure and presentation requirements for a variety of ASU topics in response to the SEC's Release No. 33-10532. The effective date for each amended topic in the ASU is the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendment will be removed from the Codification and not become effective. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) -Disaggregation of Income Statement Expenses, which requires public entities to disclose within the footnotes to the financial statements, disaggregated information about certain income statement expense captions, including disclosure of the amounts for a) purchases of inventory, b) employee compensation, c) depreciation, d) intangible asset amortization and e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities (DD&A) included in each relevant expense caption. The amendment also requires that certain amounts that are already required to be disclosed under U.S. GAAP be included in the same disclosure as the other disaggregation requirements. The new guidance also requires a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Upon adoption, this guidance should be applied prospectively, but may be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the adoption of this standard on the Company's financial statement disclosures.
In December 2025, the FASB issued ASU 2025-11, which updates interim reporting guidance under Topic 270 by introducing a principles-based framework for determining the form and content of interim financial statements. The amendments clarify that interim reports should focus on significant changes since the last annual period and require disclosure of material events and transactions occurring during the interim periods. The update also eliminates outdated language, aligns certain interim disclosure requirements with annual reporting, and provides guidance on applying materiality to interim disclosures. ASU 2025-11 is effective for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its interim financial statements and related disclosures.
6
Note 2. Balance sheet components
Inventories, net
Inventories, net consisted of the following (in thousands):
|
|
December 31, |
|
|
March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
Finished goods |
|
$ |
|
|
$ |
|
||
Raw materials |
|
|
|
|
|
|
||
Gross inventory |
|
|
|
|
|
|
||
Less: Excess and obsolescence reserve |
|
|
( |
) |
|
|
( |
) |
Inventories, net |
|
$ |
|
|
$ |
|
||
Inventory reserves are established for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on historical usage, known trends, and market conditions and judgment about the anticipated future consumption and our ability to sell the inventory.
Other noncurrent assets
Other n
|
|
December 31, |
|
|
March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
Supplier prepayments |
|
$ |
|
|
$ |
|
||
Other |
|
|
|
|
|
|
||
Other noncurrent assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Accrued liabilities
Accrued liabilities consisted of the following (in thousands):
|
|
December 31, |
|
|
March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
Accrued goods and services |
|
$ |
|
|
$ |
|
||
Accrued loss on supplier commitments |
|
|
|
|
|
|
||
Accrued inventory purchases |
|
|
|
|
|
|
||
Accrued customer reserves |
|
|
|
|
|
|
||
Accrued interest on debt |
|
|
|
|
|
|
||
Accrued liabilities |
|
$ |
|
|
$ |
|
||
Accrued warranty
Provisions for warranty claims are primarily related to our hardware products and are recorded at the time products are sold. The change to accrued warranty was as follows (in thousands):
|
|
Year ended |
|
|
Three Months Ended March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
Beginning balance |
|
$ |
|
|
$ |
|
||
Costs to service warranty |
|
|
( |
) |
|
|
( |
) |
Provision increase (decrease), net |
|
|
|
|
|
( |
) |
|
Ending balance |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
7
At December 31, 2025, $
Other noncurrent liabilities
Other noncurrent liabilities consisted of the following (in thousands):
|
|
December 31, |
|
|
March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
Accrued loss on supplier commitments |
|
$ |
|
|
$ |
|
||
Accrued warranty |
|
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
Other noncurrent liabilities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Note 3. Property and equipment
Property and equipment, net consisted of the following (in thousands):
|
|
|
|
December 31, |
|
|
March 31, |
|
||
|
|
Useful Life |
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
|
|
(unaudited) |
|
||
Equipment and tooling |
|
|
$ |
|
|
$ |
|
|||
Computer equipment |
|
|
|
|
|
|
|
|||
Furniture and fixtures |
|
|
|
|
|
|
|
|||
Leasehold improvements |
|
|
|
|
|
|
|
|||
Total cost |
|
|
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
||
Total depreciation expense was $
Note 4. Software
Software consisted of the following (in thousands):
|
|
|
|
December 31, 2025 |
|
|
March 31, 2026 |
|
||||||||||||||||||||||
|
|
|
|
|
|
|
(unaudited) |
|
||||||||||||||||||||||
|
|
Useful Life |
|
Gross carrying amount |
|
|
Accumulated amortization |
|
|
Impairment |
|
|
Net balance |
|
|
Gross carrying amount |
|
|
Accumulated amortization |
|
|
Net balance |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Acquired software and Software for internal use |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
||||||
Software marketed for external sale |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Total |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Amortization of acquired software and software for internal use is computed using the straight-line method over an estimated useful life of generally three to
Amortization expense recognized on software to be sold or marketed externally was $
8
The Company completes a net realizable value test on its software to be marketed for external sale for impairment at each reporting period. In the second quarter of 2025, the Company identified one product where the net realizable value was below the unamortized capitalized costs of that product and recognized a $
Based on capitalized software assets at March 31, 2026, estimated amortization expense in future fiscal years is as follows (unaudited and in thousands):
Year ending December 31, |
|
Acquired software and Software for internal use |
|
|
Software |
|
|
Total |
|
|||
2026 (April - December) |
|
|
|
|
|
|
|
|
|
|||
2027 |
|
|
|
|
|
|
|
|
|
|||
2028 |
|
|
|
|
|
|
|
|
|
|||
2029 |
|
|
|
|
|
|
|
|
|
|||
2030 |
|
|
|
|
|
|
|
|
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|||
Total amortization |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Note 5. Debt
At March 31, 2026, the Company had $
The following table reflects the breakdown of the term loan and revolving credit facilities at December 31, 2025 and March 31, 2026 (in thousands):
|
|
December 31, |
|
|
March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
Term loan facility |
|
$ |
|
|
$ |
|
||
Revolving credit facility |
|
|
|
|
|
|
||
Less: debt issuance costs on term loan facility |
|
|
( |
) |
|
|
( |
) |
Total debt, net |
|
|
|
|
|
|
||
Less: Current portion of long-term debt, net |
|
|
( |
) |
|
|
( |
) |
Total long-term debt, net |
|
$ |
|
|
$ |
|
||
As of December 31, 2025, the effective interest rate on the term loan facility was
As of December 31, 2025, the weighted-average interest rate for borrowings outstanding under the revolving credit facility was
In addition to the interest charged on the term loan facility and the revolving credit facility, as a result of the covenant violation, the lender converted the term loan and revolving credit facilities to Base Rate loans on the default date and has imposed an additional
The maturity date of the term loan facility and the revolving credit facility, with all amounts outstanding becoming due and payable in full, is
Loan covenants and violations
The Amended Credit Agreement is subject to financial covenants, including covenants which require the Company to meet key financial ratios and customary affirmative and negative covenants. As of March 31, 2026, the Company was not in compliance with its quarterly consolidated fixed charge coverage ratio and consolidated leverage ratio covenants and did not make the required principal and interest payment on the term loan facility and the interest payment on the revolving credit facility. These events of default afford the lender the right to declare the amounts immediately due and payable on the outstanding term loan principal amount of $
9
the lender, or otherwise refinance the indebtedness. There can be no assurances that the lender will not declare the Company in default and accelerate all amounts due under the term loan facility and the revolving credit facility.
The term loan facility and revolving credit facility mature on November 17, 2026, however, the covenant violation gives the lender the right to require immediate payment of the outstanding amounts. Accordingly, the entire $
Interest expense
Net interest expense, including bank charges and amortization of debt issuance costs on the debt, was $
Note 6. Employee benefit plans
The Company’s significant employee benefit plans currently consist of a defined contribution plan in the United States and a separate defined contribution plan in the UK. The Company does not offer any other elective postretirement benefit plans, such as retiree medical and dental benefits or deferred compensation agreements to its employees or officers.
U.S. plan
U.S. regular, full-time employees are eligible to participate in the Cambium Networks, Inc. 401(k) Plan, which is a qualified defined contribution plan under section 401(k) of the Internal Revenue Service Code. Under the Cambium Networks, Inc. 401(k) Plan, the Company contributes a dollar-for-dollar match of the first
UK plan
Regular, full-time UK employees are eligible to participate in the Cambium Networks Ltd. Stakeholder Pension Scheme, which is a qualified defined contribution plan. Employees are eligible to participate on the first of the month following receipt of their enrollment form, and eligible employees are automatically enrolled in the plan at a default employee contribution rate of
10
Note 7. Shareholders' equity
2019 Share incentive plan
In June 2019, the Company’s Board of Directors adopted, and its shareholders approved, the 2019 Share Incentive Plan (“2019 Plan”). The 2019 Plan provides for the grant of incentive share options, nonqualified share options, share appreciation rights, restricted share awards (“RSAs”), restricted share units (“RSUs”), other share-based awards and performance awards. The share reserve under the 2019 Plan is automatically increased on the first day of each fiscal year, beginning with the fiscal year ended December 31, 2020 and will continue until, and including, the fiscal year ending December 31, 2029. The number of shares added annually is equal to the lowest of
The Company’s employees, officers, directors, consultants, and advisors are eligible to receive awards under the 2019 Plan. Incentive share options, however, may only be granted to the Company's employees.
Share-based compensation
The following table shows total share-based compensation expense for the three-month periods ended March 31, 2025 and 2026 (unaudited and in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2025 |
|
|
2026 |
|
||
Cost of revenues |
|
$ |
|
|
$ |
|
||
Research and development |
|
|
|
|
|
|
||
Sales and marketing |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
||
Share options
The Company's time-based share options typically have a contractual term of
The following is a summary of option activity for the Company’s share incentive plans for the three-month period ended March 31, 2026 (unaudited):
|
|
Options |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
||||
Outstanding at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
— |
|
|||
Options expired |
|
|
( |
) |
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
Options forfeited |
|
|
( |
) |
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
— |
|
|||
Options exercisable at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
— |
|
|||
Options vested and expected to vest at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
The Company uses the Black-Scholes option pricing model to estimate the fair value of share options. There were
At March 31, 2026, there was $
11
Restricted shares
The Company's time-based RSUs typically vest over a
The following is a summary of restricted shares activity for the Company’s share incentive plan for the three-month period ended March 31, 2026 (unaudited):
|
|
Units |
|
|
Weighted |
|
||
RSU balance at December 31, 2025 |
|
|
|
|
$ |
|
||
RSUs vested |
|
|
( |
) |
|
$ |
|
|
RSUs forfeited |
|
|
( |
) |
|
$ |
|
|
RSU balance at March 31, 2026 |
|
|
|
|
$ |
|
||
Of the
The fair value of the RSUs is based on the fair value of the Company's ordinary shares on the grant date. There were
As of March 31, 2026, there was $
Employee share purchase plan
In June 2019, the Company’s Board of Directors adopted, and its shareholders approved, the Employee Share Purchase Plan (“ESPP”). The ESPP was effective on June 25, 2019, and the initial offering period of six months commenced on January 1, 2021. The purchase price of the shares is
Note 8. Loss per share
Basic net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the treasury method by giving effect to all potentially dilutive ordinary share equivalents outstanding for the period. For purposes of this calculation, share options, RSUs, and ESPP awards are considered to be ordinary share equivalents but are excluded from the calculation of diluted loss per share when including them would have an anti-dilutive effect.
|
|
Three Months Ended March 31, |
|
|||||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
||
Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
Net loss per share, basic |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share, diluted |
|
$ |
( |
) |
|
$ |
( |
) |
In the computation of diluted loss per share for the three-month periods ended March 31, 2025 and 2026, the Company did
12
Note 9. Income taxes
The Company's provision for income taxes is based upon the estimated annual tax rate for the year applied to federal, state and foreign income. The Company recorded a provision for income taxes of $
Note 10. Commitments and contingencies
In accordance with ASC 460, Guarantees, the Company recognizes the fair value for guarantee and indemnification arrangements it issues or modifies, if these arrangements are within the scope of authoritative accounting guidance. In addition, the Company must continue to monitor the conditions that are subject to the guarantees and indemnifications in order to identify if a loss has been incurred. If the Company determines it is probable that a loss has occurred, then any such estimated loss would be recognized under those guarantees and indemnifications and would be recognized in the Company’s consolidated statements of operations and comprehensive loss and corresponding consolidated balance sheets during that period.
Amended credit agreement
Our Amended Credit Agreement contains customary provisions with respect to the consequences of a “Default” or “Event of Default” as defined therein, including a restriction on the ability to access further borrowings as well as other customary rights and remedies available to the lender upon a Default or Event of Default. These include the ability to impose a default rate interest rate, prohibiting us from reinvesting asset sale proceeds, limiting repayment of intercompany debt and investment in non-loan party subsidiaries, limiting acquisitions, certain asset sales and assumption of indebtedness, and acceleration of the outstanding obligations and exercise of other remedies under the Amended Credit Agreement, among other customary restrictions.
Purchase commitments with contract manufacturers and suppliers
The Company purchases components from a variety of suppliers and uses contract manufacturers to provide manufacturing services for its products and issues purchase orders for these products and services. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, the Company enters into agreements with contract manufacturers and suppliers that allow them to procure inventory and components based upon criteria as defined by us, such as forecasted demand. The Company may be liable to purchase excess product or aged material from its suppliers following reasonable mitigation efforts. The Company establishes a loss on supplier commitments liability for all product the supplier has procured for which the Company does not expect it will sell. Such loss on purchase commitment liability is included in Accrued liabilities and Other noncurrent liabilities on the Company's consolidated balance sheets, based on the timing of when the liability is expected to be resolved.
Warranties
The Company offers a standard warranty on its products, with the term depending on the product, and records a liability for the estimated future costs associated with potential warranty claims. The Company’s responsibility under its standard warranty is the repair or replacement of in-warranty defective product, or to credit the purchase price of the defective product, at its discretion, without charge to the customer. The Company’s estimate of future warranty costs is largely based on historical experience factors including product failure rates, material usage, and service delivery cost incurred in correcting product failures. The standard warranty is included in either Other current liabilities or Other noncurrent liabilities on the Company's consolidated balance sheets, depending on the time period covered by the warranty. The Company also offers an extended warranty for purchase that represents a future performance obligation for the Company. The extended warranty is included in deferred revenues (both current and noncurrent) on the consolidated balance sheets and recognized on a straight-line basis over the term of the extended warranty. The warranty costs are reflected in the Services cost of revenues on the consolidated statements of operations and comprehensive loss.
Indemnification
The Company generally indemnifies its distributors, value added reseller and network operators against claims brought by a third party to the extent any such claim alleges that the Company’s product infringes a patent, copyright or trademark or violates any
13
other proprietary rights of that third party. Although the Company generally tries to limit the maximum amount of potential future liability under its indemnification obligations, in certain agreements this liability may be unlimited. The maximum potential amount of future payments the Company may be required to make under these indemnification agreements is not estimable. The Company did not make any payments under indemnification agreements for the three-month periods ended March 31, 2025 and 2026 (unaudited).
The Company indemnifies its directors and officers and select key employees, including key employees serving as directors or officers of the Company’s subsidiaries, for certain events or occurrences, subject to certain limits, while the director or officer is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the director’s or officer’s term of service. The Company may terminate the indemnification agreements with its directors, officers or key employees upon the termination of their services as directors or officers of the Company or its subsidiaries, or the termination of activities for which indemnification has been provided, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that limits its exposure. The Company believes the fair value of these indemnification agreements is minimal.
Legal proceedings
Third parties may from time to time assert legal claims against the Company. The Company records accruals for loss contingencies to the extent that it concludes it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. The Company evaluates, on a regular basis, developments in legal proceedings and other matters that could cause a change in amounts recorded. Due to the inherent uncertainty involving legal matters, the ultimate resolution could differ from amounts recorded. There is no pending or threatened legal proceedings to which the Company is a party, that in the Company’s opinion, is likely to have a material adverse effect on its financial condition or results of operations.
Note 11. Segment information
The Company operates in a single reportable segment providing fixed wireless broadband and Wi-Fi networking infrastructure solutions. This segment generates revenue primarily from the sale of hardware products, but also includes revenues from software products, extended warranty and subscription services.
See Note 12. Revenues from contracts with customers for additional information about the Company's revenues by product category and geography.
As the Company operates solely within
The Company's long-lived assets, including the Company's property and equipment, software, operating lease right-of-use assets, goodwill, and noncurrent assets, but excluding deferred tax assets, recognized in the consolidated balance sheets were geographically located as follows (in thousands):
|
|
December 31, |
|
|
March 31, |
|
||
|
|
2025 |
|
|
2026 |
|
||
|
|
|
|
|
(unaudited) |
|
||
North America |
|
$ |
|
|
$ |
|
||
Europe, Middle East, Africa |
|
|
|
|
|
|
||
Asia Pacific |
|
|
|
|
|
|
||
Caribbean and Latin America |
|
|
|
|
|
|
||
14
Depreciation and amortization, impairment, property and equipment additions and capital software additions are reported at the consolidated level on the consolidated statements of cash flows.
|
|
Three Months Ended March 31, |
|
|||||
|
|
2025 |
|
|
2026 |
|
||
Share-based compensation |
|
$ |
|
|
$ |
|
||
Provision for inventory excess and obsolescence |
|
|
( |
) |
|
|
( |
) |
Note 12. Revenues from contracts with customers
Revenues consist primarily of revenues from the sale of hardware products. Revenues also include amounts for software products, extended warranty on hardware products and software subscription services. Substantially all products are sold through distributors and other channel partners, such as resellers and systems integrators.
The Company recognizes revenue to reflect the transfer of control of promised products or services to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services.
Disaggregation of revenues
Revenues by product category were as follows (unaudited and in thousands, except percentages):
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
2025 |
|
|
2026 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Point-to-Multi-Point |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Point-to-Point |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Enterprise |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total Revenues |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
The Company’s products are predominately distributed through third-party logistics providers in the United States, Netherlands and Vietnam. The Company has determined the geographical distribution of product revenues based upon the ship-to destinations.
Revenues by geography were as follows (unaudited and in thousands, except percentages):
|
|
Three Months Ended March 31, |
|
|||||||||||||
|
|
2025 |
|
|
2026 |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Europe, Middle East and Africa |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Caribbean and Latin America |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Asia Pacific |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total Revenues |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
15
Contract balances
The following table summarizes contract balances as of December 31, 2025 and March 31, 2026 (in thousands):
|
|
December 31, |
|
|
March 31, |
|
||
|
|
|
|
|
(unaudited) |
|
||
Trade accounts receivable, net of allowance for estimated credit losses |
|
$ |
|
|
$ |
|
||
Deferred revenue - current |
|
|
|
|
|
|
||
Deferred revenue - noncurrent |
|
|
|
|
|
|
||
Accrued sales returns |
|
|
|
|
|
|
||
Deferred revenue consists of amounts due or received from customers in advance of the Company satisfying performance obligations under contractual arrangements. Deferred revenue is classified as current or noncurrent based on the timing of when revenue will be recognized. The changes in deferred revenue were due to normal timing differences between the Company’s performance and the customers’ payment.
Accrued sales returns is the estimated amount expected to be returned by customers in relation to product exchanges made as part of the Company’s stock rotation program. This amount is included within Other current liabilities in the consolidated balance sheets.
Receivables and concentration of credit risk
Trade accounts receivable represents amounts billed and currently due from customers and amounts earned that are to be billed in the future (e.g., accrued accounts receivable). Included in accrued accounts receivable are software subscription revenues earned in the current period but billed in the following period.
The Company considers the credit risk of all customers and regularly monitors credit risk exposure in its trade receivables. The Company’s standard credit terms with its customers are generally net
Remaining performance obligations
Remaining performance obligations represent the revenue that is expected to be recognized in future periods associated with performance obligations included in a contract that are unsatisfied, or partially satisfied, as of the reporting date. The Company's remaining performance obligations related primarily to software subscriptions and extended warranty, which are recognized as revenue over time and presented as deferred revenue in the consolidated balance sheets. There have been no material changes in the amount or timing of recognition of the Company's remaining performance obligations from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (unaudited).
Cost to obtain a contract
Sales commissions are incremental costs of obtaining a contract. The Company has
Note 13. Related party transactions
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal.
For the three-month periods ended March 31, 2025 and 2026, the Company did
16
Note 14. Restructuring
On February 24, 2025, the Company announced and initiated a cost reduction plan.
During the three-month period ended March 31, 2025, the Company incurred restructuring charges under the February 2025 plan related to one-time termination costs of approximately $
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of financial condition and results of operation should be read in conjunction with the consolidated financial statements and related notes thereto of Cambium Networks Corporation (“Cambium”, “we”, “our”, or “us”) included elsewhere in this Quarterly Report on Form 10-Q and with the financial statements and related notes and Management’s Discussion and Analysis in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed May 1, 2026. Results for the three-month period ended March 31, 2026 are not necessarily indicative of the results that may be expected for any period in the future.
Overview
Cambium Networks is a global technology company that designs, develops, and manufactures fixed wireless and PON/XGSPON-based broadband, Wi-Fi, and local area networking ("LAN") switching infrastructure, and security gateway solutions for a wide range of applications, including broadband access, wireless backhaul, Internet of Things ("IoT"), public safety communications, and Wi-Fi access. Our products enable service providers, enterprises, industrial organizations, and governments to deliver exceptional digital experiences and device connectivity, with compelling economics. Our ONE network platform simplifies the management of Cambium Networks' wired and wireless technologies. Our product lines fall into three broad, interrelated categories: Fixed Wireless & fiber Broadband ("FWB"), Enterprise networking, and Subscription and Services.
The FWB portfolio spans point-to-point ("PTP") and point-to-multi-point ("PMP") architectures over multiple standards, and frequency bands, including licensed, unlicensed, and lightly licensed spectrum, and fiber products. Our PMP4600 and PMP 450v platforms have Federal Communications Commission ("FCC") approval to operate in the 6 GHz band in conjunction with our approved Automated Frequency Coordination ("AFC") service, which is gaining adoption in other regions.
The Enterprise portfolio includes a complete range of indoor and outdoor Wi-Fi access points, indoor and hardened copper and optical-based Ethernet switches, and security gateway and software-defined wide area network ("SD-WAN") devices. During 2024, we introduced our first Wi-Fi 7 access point, the X7-35X, which was supplemented by the X7-53X and X7-55X in September 2025. These three Wi-Fi 7 access points will be complemented with a broad range of indoor and outdoor Wi-Fi 7 solutions as the industry transition to Wi-Fi 7 occurs.
The Subscription and Services portfolio includes network planning and design, and cloud or on-premises network management and control solutions. The latter capability, delivered through subscription to cnMaestro™ X, forms the foundation of our ONE Network, a cloud-based network management architecture that allows users to remotely configure, monitor, and manage their wired and wireless networks. It provides a single, centralized view of all Cambium Network devices, and real-time performance and usage data, allowing users to control and optimize network configuration and settings. Advanced services offered in conjunction with this platform include application visibility and control, which is used to optimize end-user experiences; and "Assurance" which allows network administrators the ability to rapidly troubleshoot network issues using Artificial Intelligence ("AI")-powered root cause analysis with proactive resolution, ensuring service level agreements are met and preventing client impact. The Network Service Edge ("NSE"), an integrated security gateway and SD-WAN service for small and medium businesses, may also be associated with a subscription for network security services.
Trends impacting our business
Factors such as higher interest rates and inflationary pressures, which impact private sector capital investment, and concerns about a global economic slowdown and geopolitical conditions continue to adversely impact demand for our products and services, and increased our cost of revenues and our gross margin. We continue to see a high level of competition in our industry due to slower demand and aggressive pricing. We also see increased competition and pricing pressure from new competitors such as Starlink significantly driving down global connectivity prices, with satellite bandwidth costs dropping roughly 77% over the last five years due to its rapid constellation deployment and lower manufacturer costs. We have also seen increased competition from mobile network operators who are using excess capacity in their mobile network to address fixed wireless broadband needs, and from original design manufacturers who are trying to increase their market share by selling directly to major telecommunications providers. We believe that these market pressures will continue to negatively impact revenues and gross margins for the foreseeable future. We may continue to face risks of technology shifts that could result in inventory becoming obsolete before it is deployed, including as the industry continues its shift to Wi-Fi 7.
We are also impacted by the increases in the prices of memory chips from our semiconductor suppliers. Prices for memory chips have increased rapidly for newer generations of memory, which has had an impact on the supply of current memory, impacting components for both Wi-Fi 7 and Wi-Fi 6. We expect this to continue for the foreseeable future due to the scaling of AI data centers.
We spent 2025 moving production of select products from a third-party manufacturer in Mexico, to a third-party manufacturer in Thailand. The move has been challenged by logistics and production issues due to the complexity of the impacted products as well as challenges present when utilizing a new manufacturer. While the majority of impacted products are in production, issues of scale, yield and supply chain continue to limit our ability to meet customer demand, and this continues into 2026.
18
We continue to monitor the impact of macroeconomic factors that continue to impact our industry and our business. We also believe that our customers continue to grapple with the impact of these macroeconomic factors on their businesses and future investment plans, leading to business uncertainty and a more constrained approach to forecasts and orders, and decreasing visibility into customer demand. Any prolonged economic disruptions, continued uncertainty over global trade wars, as well as further deterioration in the global economy or continued outbreaks of international hostilities could have a negative impact on demand from our customers in future periods.
The impact of reverse globalization, including a more nationalistic trend globally leading to increasing government requirements for domestically produced products or limiting the sourcing of components and other products from China and elsewhere, has led us to limit our reliance on third-party manufacturers in China. Accordingly, we have moved manufacturing to other locations, particularly Thailand, which has caused some disruptions in our supply operations. Such moves have also required moving manufacture of some products to suppliers who have no recent experience building similar products, further impacting supply operations. Nationalistic trends are occurring in various geographies which may make it impractical for us to do business in some countries, or to seek manufacture in other countries in which we do not currently manufacture products.
Credit Agreement Default
We have been and continue to be out of compliance with financial and other covenants under our credit agreement with Bank of America, which creates doubt about our ability to continue as a going concern. We ceased payment of required quarterly principal and interest on the term loan facility and of periodic interest on the revolving credit facility as of June 2025. Such defaults afford the lender the right to declare the amounts outstanding immediately due and payable. Absent acceleration, our credit agreement matures on November 17, 2026. Absent an infusion of capital from outside financing or a divestiture of business lines, we will be unable to repay this indebtedness when it comes due. Refer to Note 5. Debt, to our consolidated financial statements of this Quarterly Report on Form 10-Q for additional information.
Our cash from operations may not be sufficient for our future working capital, investments and cash requirements, and we have no remaining liquidity for additional borrowings under our credit agreement. If our cash from operations is not sufficient for future working capital needs, we would need to seek additional debt or equity financing or scale back our operations. Although we continue to have regular discussions with the lender, we have not been able to obtain a waiver of the defaults under our credit agreement, or otherwise refinance the indebtedness. If the lender were to decline permission to raise additional capital, if needed, or to accelerate the maturity and declare the full outstanding principal and interest immediately due and payable, we would not be able to repay the debt, and therefore, there is substantial uncertainty we would be able to continue as a going concern. We may not be able to access additional capital resources or financing due to a variety of reasons, including the restrictive covenants in our credit agreement, the status of our financial condition, or the lack of available capital due to global economic conditions. If our financing requirements are not met and we are unable to access additional financing on favorable terms, or at all, our business, financial condition and results of operations could be materially adversely affected and we could cease as a going concern
We continue to take actions to improve our profitability and focus on operating efficiency and reducing discretionary spending, deferring capital expenditures and implementing cost reductions to align our cost structure with current and expected revenue levels. We are actively seeking additional capital through possible divestitures and/or capital raising transactions and working on accommodations with our lender to provide us with the financial flexibility needed to meet our obligations as they come due over the next twelve months. Our ability to achieve these objectives depends on our ability to complete one or more divestitures of business lines and/or obtain alternative sources of financing in a timely fashion, as well as on our expectations regarding macro-conditions in the markets in which we compete, customer acceptance and purchases of our products, buying decisions by our distributors, improvements in our manufacturing challenges with transition to new manufacturers, and other factors. Many of these factors are not within our control and there is no assurance we can successfully navigate the financial challenges we face.
Financial results for the three-month period ended March 31, 2026
19
Basis of presentation
Revenues
Our revenues are generated primarily from the sale of hardware products with essential embedded software. Our revenues also include amounts for software products, extended warranty on hardware products and subscription services. We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met and we measure revenue based on the consideration to which we expect to be entitled based on customer contracts. We recognize subscription services revenue ratably over the term in which the services are provided and our performance obligation is satisfied. Revenues are adjusted for variable consideration amounts, including but not limited to estimated stock returns, customer incentives, and cooperative marketing allowances that we provide to distributors. We provide a standard warranty on our hardware products, with the term depending on the product, and record a liability for the estimated future costs associated with potential warranty claims. In addition, we also offer extended warranties for purchase that represents a future performance obligation for us. The extended warranty is included in deferred revenues and is recognized on a straight-line basis over the term of the extended warranty.
Cost of revenues and gross profit
Our cost of revenues is comprised primarily of the costs of procuring finished goods from our third-party manufacturers, third-party logistics and warehousing provider costs, freight costs, and warranty costs. We outsource our manufacturing to third-party manufacturers located primarily in Thailand, Vietnam, Philippines, and Taiwan. Cost of revenues also includes costs associated with supply operations, including personnel and related allocated overhead costs, provision for excess and obsolete inventory, loss on supplier commitment expense, third-party license costs and third-party costs related to services we provide. Cost of revenues also includes amortization of capitalized software costs associated with products to be sold, and charges for excess and obsolescence and losses on supplier commitments.
Gross profit has been and will continue to be affected by various factors, including changes in product mix. The margin profile of products within each of our core product categories can vary significantly depending on the operating performance, features and manufacturer of the product. Generally, our gross margins on backhaul and fixed wireless access point products are greater than those on our CPE products. Because the ratio of CPE to PMP access points typically increases as network operators build out their networks, increases in follow-on sales to network operators as a percentage of our total sales generally have a downward effect on our overall gross margins. Finally, gross margin will also vary as a function of changes in pricing due to competitive pressure, our third-party manufacturing and other production costs, cost of shipping and logistics, provision for excess and obsolete inventory, loss on supplier commitments, and other factors. We expect our gross margins will fluctuate from period to period depending on the interplay of these various factors.
Operating expenses
We classify our operating expenses as research and development, sales and marketing, and general and administrative expense. Personnel costs are the primary component of each of these operating expense categories, which consist of costs such as salaries, sales commissions, and benefits, as well as share-based compensation expense. Depreciation and amortization of long-lived assets is separately disclosed in the statements of operations and comprehensive loss.
Research and development
In addition to personnel-related costs, research and development expense consists of costs associated with the design and development of our products, product certification, travel, recruiting, shared facility and shared IT costs. We generally recognize research and development expense as incurred. For certain of our software projects under development, we capitalize the development cost during the period between determining technological feasibility of the product and commercial release. We amortize the capitalized development cost upon commercial release, generally over three years, and include the amortization costs in cost of revenues on our statements of operations and comprehensive loss. We typically do not capitalize costs related to the development of first-generation product offerings as technological feasibility generally coincides with general availability of the software.
Sales and marketing
In addition to personnel-related costs for sales, marketing, service and product line management personnel, sales and marketing expenses consist of our training programs, trade shows, marketing programs, promotional materials, demonstration equipment, national and local regulatory approval on our products, travel and entertainment, recruiting and shared facilities and shared IT costs.
General and administrative
In addition to personnel-related costs, general and administrative expenses consist of professional fees, such as legal, audit, accounting, information technology and consulting costs, insurance, shared facilities and shared IT costs, and other supporting overhead costs.
20
Depreciation and amortization
Depreciation and amortization expenses consist of depreciation related to fixed assets such as computer equipment, furniture and fixtures, and testing equipment, as well as amortization related to acquired software and software for internal use.
Provision for income taxes
Our provision for income taxes consists primarily of income taxes in the jurisdictions in which we conduct business. Management assesses our deferred tax assets in each reporting period, and if it is determined that it is not more likely than not to be realized, we will record a valuation allowance in that period.
21
Results of operations
The following table presents the consolidated statements of operations, as well as the percentage relationship to total revenues for items included in our consolidated statements of operations for the three-month period ended March 31, 2025 compared to the three-month period ended March 31, 2026 (in thousands):
|
|
Three Months Ended March 31, |
|
|
|||||
(in thousands) |
|
2025 |
|
|
2026 |
|
|
||
Statements of Operations Data: |
|
|
|
|
|
|
|
||
Product |
|
$ |
29,127 |
|
|
$ |
40,241 |
|
|
Subscriptions and services |
|
|
4,615 |
|
|
|
4,316 |
|
|
Total revenues |
|
|
33,742 |
|
|
|
44,557 |
|
|
Cost of revenues: |
|
|
|
|
|
|
|
||
Product |
|
|
16,912 |
|
|
|
21,057 |
|
|
Subscriptions and services |
|
|
2,219 |
|
|
|
849 |
|
|
Total cost of revenue |
|
|
19,131 |
|
|
|
21,906 |
|
|
Gross profit: |
|
|
|
|
|
|
|
||
Product |
|
|
12,215 |
|
|
|
19,184 |
|
|
Subscriptions and services |
|
|
2,396 |
|
|
|
3,467 |
|
|
Total gross profit |
|
|
14,611 |
|
|
|
22,651 |
|
|
Operating expenses |
|
|
|
|
|
|
|
||
Research and development |
|
|
9,355 |
|
|
|
7,907 |
|
|
Sales and marketing |
|
|
8,418 |
|
|
|
7,574 |
|
|
General and administrative |
|
|
6,305 |
|
|
|
7,996 |
|
|
Depreciation and amortization |
|
|
137 |
|
|
|
345 |
|
|
Total operating expenses |
|
|
24,215 |
|
|
|
23,822 |
|
|
Operating loss |
|
|
(9,604 |
) |
|
|
(1,171 |
) |
|
Interest expense, net |
|
|
1,971 |
|
|
|
2,049 |
|
|
Other expense (income), net |
|
|
63 |
|
|
|
(225 |
) |
|
Loss before income taxes |
|
|
(11,638 |
) |
|
|
(2,995 |
) |
|
Provision for income taxes |
|
|
378 |
|
|
|
408 |
|
|
Net loss |
|
$ |
(12,016 |
) |
|
$ |
(3,403 |
) |
|
22
|
|
Three Months Ended March 31, |
|
|
|||||
|
|
2025 |
|
|
2026 |
|
|
||
Percentage of Revenues: |
|
|
|
|
|
|
|
||
Product |
|
|
86.3 |
% |
|
|
90.3 |
% |
|
Subscriptions and services |
|
|
13.7 |
% |
|
|
9.7 |
% |
|
Total revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
Cost of revenues: |
|
|
|
|
|
|
|
||
Product |
|
|
58.1 |
% |
|
|
52.3 |
% |
|
Subscriptions and services |
|
|
48.1 |
% |
|
|
19.7 |
% |
|
Total cost of revenue |
|
|
56.7 |
% |
|
|
49.2 |
% |
|
Gross profit: |
|
|
|
|
|
|
|
||
Product |
|
|
41.9 |
% |
|
|
47.7 |
% |
|
Subscriptions and services |
|
|
51.9 |
% |
|
|
80.3 |
% |
|
Total gross profit |
|
|
43.3 |
% |
|
|
50.8 |
% |
|
Operating expenses |
|
|
|
|
|
|
|
||
Research and development |
|
|
27.7 |
% |
|
|
17.7 |
% |
|
Sales and marketing |
|
|
24.9 |
% |
|
|
17.0 |
% |
|
General and administrative |
|
|
18.7 |
% |
|
|
17.9 |
% |
|
Depreciation and amortization |
|
|
0.4 |
% |
|
|
0.8 |
% |
|
Total operating expenses |
|
|
71.8 |
% |
|
|
53.5 |
% |
|
Operating loss |
|
|
(28.5 |
)% |
|
|
(2.6 |
)% |
|
Interest expense, net |
|
|
5.8 |
% |
|
|
4.6 |
% |
|
Other expense (income), net |
|
|
0.2 |
% |
|
|
(0.5 |
)% |
|
Loss before income taxes |
|
|
(34.5 |
)% |
|
|
(6.7 |
)% |
|
Provision for income taxes |
|
|
1.1 |
% |
|
|
0.9 |
% |
|
Net loss |
|
|
(35.6 |
)% |
|
|
(7.6 |
)% |
|
|
|
|
|
|
|
|
|
||
Comparison of three-month period ended March 31, 2025 to the three-month period ended March 31, 2026
Revenues
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Product |
|
$ |
29,127 |
|
|
$ |
40,241 |
|
|
$ |
11,114 |
|
|
|
38.2 |
% |
Subscriptions and services |
|
|
4,615 |
|
|
|
4,316 |
|
|
$ |
(299 |
) |
|
|
(6.5 |
)% |
Product revenues increased $11.1 million, or 38.2%, from $29.1 million for the three-month period ended March 31, 2025, to $40.2 million for the three-month period ended March 31, 2026, across all product categories, driven by higher demand for our enterprise products as the industry transitions to Wi-Fi 7 and higher demand for our point-to-multi-point products as several large retailers have adopted our 60 GHz product.
Subscriptions and services revenues decreased $0.3 million, or 6.5%, from $4.6 million for the three-month period ended March 31, 2025 to $4.3 million for the three-month period ended March 31, 2026. The decrease was due to lower revenues for both services and software subscriptions.
Revenues by product category
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Point-to-Multi-Point |
|
$ |
13,149 |
|
|
$ |
17,437 |
|
|
$ |
4,288 |
|
|
|
32.6 |
% |
Point-to-Point |
|
|
8,462 |
|
|
|
10,322 |
|
|
|
1,860 |
|
|
|
22.0 |
% |
Enterprise |
|
|
11,264 |
|
|
|
16,161 |
|
|
|
4,897 |
|
|
|
43.5 |
% |
Other |
|
|
867 |
|
|
|
637 |
|
|
|
(230 |
) |
|
|
(26.5 |
)% |
Total revenues by product category |
|
$ |
33,742 |
|
|
$ |
44,557 |
|
|
$ |
10,815 |
|
|
|
32.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
23
Point-to-Multi-Point
Our PMP product revenues increased $4.3 million, or 32.6%, from the three-month period ended March 31, 2025 to 2026. The increase in point-to-multi-point revenues was driven by higher revenues in all regions except North America, mostly due to higher demand for our 60 GHz products in North America and ePMP in Europe, Middle East, Africa, partially offset lower demand for PMP 450 products in North America.
Point-to-Point
PTP product revenues increased $1.9 million, or 22.0%, from the three-month period ended March 31, 2025 to 2026 mostly driven by higher demand for PTP from defense customers along with an increase in unlicensed microwave products.
Enterprise
Enterprise product revenues increased $4.9 million, or 43.5%, from the three-month period ended March 31, 2025 to 2026. Enterprise revenues increased all regions due to higher demand for switching products in all regions, higher demand for Wi-Fi 7 in North America and higher demand for Wi-Fi 6 in Caribbean and Latin America.
Revenues by geography
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
North America |
|
$ |
18,390 |
|
|
$ |
18,844 |
|
|
$ |
454 |
|
|
|
2.5 |
% |
Europe, Middle East, Africa |
|
|
11,054 |
|
|
|
16,023 |
|
|
|
4,969 |
|
|
|
45.0 |
% |
Caribbean and Latin America |
|
|
1,358 |
|
|
|
4,139 |
|
|
|
2,781 |
|
|
|
204.8 |
% |
Asia Pacific |
|
|
2,940 |
|
|
|
5,551 |
|
|
|
2,611 |
|
|
|
88.8 |
% |
Total revenues by geography |
|
$ |
33,742 |
|
|
$ |
44,557 |
|
|
$ |
10,815 |
|
|
|
32.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues increased in all regions from the three-month period ended March 31, 2025 to March 31, 2026. North America revenues increased $0.5 million, or 2.5%, driven mostly by higher enterprise product revenues with higher demand for Wi-Fi 7 as the conversion to Wi-Fi 7 has begun, partially offset by lower demand for PTP and PMP products. Europe, Middle East, Africa revenues increased $5.0 million, or 45.0%, with revenues increasing across all product categories, but mostly driven by higher PMP and PTP product revenues due to higher demand for ePMP products and PTP products from defense customer and higher enterprise product revenues due to higher demand for switching products. Caribbean and Latin America revenues increased $2.8 million, or 204.8%, across all product categories, mostly driven by enterprise with Wi-Fi 6 products and PMP with ePMP products. Asia Pacific revenues increased $2.6 million, or 88.8%, across all product categories, mostly driven by higher PMP product revenues from 60 GHz and PTP product revenues.
24
Cost of revenues and gross margin
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Product |
|
$ |
16,912 |
|
|
$ |
21,057 |
|
|
$ |
4,145 |
|
|
|
24.5 |
% |
Gross margin |
|
|
41.9 |
% |
|
|
47.7 |
% |
|
|
|
|
580 bps |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions and services |
|
$ |
2,219 |
|
|
$ |
849 |
|
|
$ |
(1,370 |
) |
|
|
(61.7 |
)% |
Gross margin |
|
|
51.9 |
% |
|
|
80.3 |
% |
|
|
|
|
2840 bps |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues for products increased $4.1 million, or 24.5%, from $16.9 million for the three-month period ended March 31, 2025 to $21.1 million for the three-month period ended March 31, 2026. The increase in cost of revenues was primarily driven by higher revenues, a $2.0 million decrease in the release of loss on supplier commitment expense and $1.0 million decrease in the release of excess and obsolescence reserve, partially offset by $0.4 million lower nonrecurring expenses in 2026, comprised of $0.2 million incurred in 2025 related to moving manufacturing from Mexico to Thailand and $0.2 million of restructuring expenses incurred in 2025 related to the headcount reductions in February 2025.
Cost of revenues for subscriptions and services decreased $1.4 million, or 61.7%, from $2.2 million for the three-month period ended March 31, 2025 to $0.9 million for the three-month period ended March 31, 2026. The decrease was primarily due to lower professional services cost of revenues.
Gross margin for products increased from 41.9% for the three-month period ended March 31, 2025 to 47.7% for the three-month period ended March 31, 2026. The increase primarily reflects the impact from increased revenue from higher margin products, the absence of nonrecurring expenses incurred in 2025 partially offset by the reduction in the benefit from the release of both loss on supplier commitment expense and excess and obsolescence reserve.
Gross margin for subscriptions and services increased from 51.9% for the three-month period ended March 31, 2025 to 80.3% for the three-month period ended March 31, 2026. The increase primarily reflects the impact of lower professional services cost of revenues.
Operating expenses
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Research and development |
|
$ |
9,355 |
|
|
$ |
7,907 |
|
|
$ |
(1,448 |
) |
|
|
(15.5 |
)% |
Sales and marketing |
|
|
8,418 |
|
|
|
7,574 |
|
|
|
(844 |
) |
|
|
(10.0 |
)% |
General and administrative |
|
|
6,305 |
|
|
|
7,996 |
|
|
|
1,691 |
|
|
|
26.8 |
% |
Depreciation and amortization |
|
|
137 |
|
|
|
345 |
|
|
|
208 |
|
|
|
151.8 |
% |
Total operating expenses |
|
$ |
24,215 |
|
|
$ |
23,822 |
|
|
$ |
(393 |
) |
|
|
(1.6 |
)% |
Research and development
Research and development expense decreased $1.4 million, or 15.5% from $9.3 million for the three-month period ended March 31, 2025 to $7.9 million for the three-month period ended March 31, 2026. The decrease in research and development expense was primarily due to $0.8 million lower staff-related costs, mostly due to a reduction in headcount from February 2025 restructuring activities, $0.6 million lower restructuring expense incurred in 2025 related to the February 2025 restructuring, $0.4 million lower share-based compensation expense, $0.2 million lower engineering materials spend due to fewer projects, and $0.2 million outside contractor and other expenses, partially offset by $0.8 million lower capitalized software development costs due to fewer projects being eligible for capitalization.
Sales and marketing
Sales and marketing expense decreased $0.8 million, or 10.0%, from $8.4 million for the three-month period ended March 31, 2025 to $7.6 million for the three-month period ended March 31, 2026. The decrease in sales and marketing expense was primarily due to $0.7 million lower restructuring expense incurred in 2025 related to the February 2025 restructuring, $0.3 million lower staff-related costs, mostly due to the reduction in headcount from February 2025 restructuring, $0.2 million lower share-based compensation expense, $0.2 million lower restructuring expenses, partially offset by $0.4 million higher variable compensation expense and $0.2 million higher outside contractor expense.
25
General and administrative
General and administrative expense increased $1.7 million, or 26.8%, from $6.3 million for the three-month period ended March 31, 2025 to $8.0 million for the three-month period ended March 31, 2026. The increase in general and administrative expense was primarily due to $0.8 million higher contractor spend due to employee attrition, $0.8 million higher audit fees due to the restatement, and $0.8 million higher legal fees, partially offset by $0.4 million lower staff-related costs due to employee attrition and $0.2 million lower share-based compensation expense.
Depreciation and amortization
Depreciation and amortization expense increased $0.2 million, or 151.8% from $0.1 million for the three-month period ended March 31, 2025 to $0.3 million for the three-month period ended March 31, 2026.
Interest expense, net
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Interest expense, net |
|
$ |
1,971 |
|
|
$ |
2,049 |
|
|
$ |
78 |
|
|
|
4.0 |
% |
Interest expense increased $0.1 million, or 4.0%, from $2.0 million for the three-month period ended March 31, 2025 to $2.0 million for the three-month period ended March 31, 2026. The increase was primarily due to lower interest income on lower cash balances partially offset by lower interest expense due to the drop in the prime rate.
Other expense, net
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Other expense (income), net |
|
$ |
63 |
|
|
$ |
(225 |
) |
|
$ |
(288 |
) |
|
|
(457.1 |
)% |
Other expense (income), net changed from an expense of $0.1 million for the three-month period ended March 31, 2025 to income of $0.2 million for the three-month period ended March 31, 2026, driven by favorable impact from changes in foreign exchange rates.
Provision for income taxes
|
|
Three Months Ended March 31, |
|
|
Change |
|
||||||||||
(dollars in thousands) |
|
2025 |
|
|
2026 |
|
|
$ |
|
|
% |
|
||||
Provision for income taxes |
|
$ |
378 |
|
|
$ |
408 |
|
|
$ |
30 |
|
|
|
7.9 |
% |
Effective income tax rate |
|
|
(3.2 |
)% |
|
|
(13.6 |
)% |
|
|
|
|
|
|
||
Our provision for income taxes is based upon the estimated annual tax rate for the year applied to federal, state and foreign income. Our provision for income taxes was $0.4 million for the three-month period ended March 31, 2025 versus a provision for income taxes of $0.4 million for the three-month period ended March 31, 2026. The effective income tax rates were (3.2)% and (13.6)% over the same periods, respectively. Our effective tax rates were different from the statutory rate of 21.0% primarily due to an increase in the valuation allowance on the net deferred tax assets.
Liquidity and Capital Resources
As of March 31, 2026, we had a cash balance of $6.1 million, a decrease of $5.2 million from December 31, 2025. Our primary liquidity needs are: (i) to fund normal operating expenses; and (ii) to fund capital expenditures. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending to support development efforts, the timing of new product introductions, market acceptance of our products and overall economic conditions.
We continue to take actions to improve our profitability and focus on operating efficiency and reducing discretionary spending, deferring capital expenditures and implementing cost reductions to align our cost structure with current and expected revenue levels. We are actively seeking additional capital through possible divestitures and/or capital raising transactions and working on accommodations with our lender to provide us with the financial flexibility needed to meet our obligations as they come due over the next twelve months. Our ability to achieve these objectives depends on our ability to complete one or more divestitures of business
26
lines and/or obtain alternative sources of financing in a in a timely fashion, as well as on our expectations regarding macro-conditions in the markets in which we compete, customer acceptance and purchases of our products, buying decisions by our distributors, improvements in our manufacturing challenges with transition to new manufacturers, and other factors. Many of these factors are not within our control and there is no assurance we can successfully navigate the financial challenges that we face.
As of March 31, 2026, we were not in compliance with our quarterly fixed charge coverage ratio and quarterly consolidated leverage ratio covenants. In June 2025, we ceased paying principal and interest on our term loan facility and interest on our revolving credit facility. Such defaults afford the lender the right to declare the amounts outstanding thereunder immediately due and payable. We continue to work with the bank to address our noncompliance with the covenants, but have not been able to obtain a waiver of the defaults, or otherwise refinance such indebtedness. If the lender were to accelerate the maturity and declare the full outstanding principal and interest immediately due and payable, we would not be able to repay the debt, and therefore, there is substantial uncertainty we would be able to continue as a going concern. We may not be able to access additional capital resources or financing due to a variety of reasons, including the restrictive covenants in our credit agreement, the status of our financial condition, or the lack of available capital due to global economic conditions. If our operating cash flow is not sufficient to meet our requirements, and we are unable to access additional financing on favorable terms, or at all, our business, financial condition and results of operations could be materially adversely affected and we could cease as a going concern. Please refer to Note 5. Debt in the Notes to the Unaudited Consolidated Financial Statements, regarding our debt outstanding under our credit facilities.
Cash Flows
The following table sets forth summarized cash flow data for the periods indicated (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2025 |
|
|
2026 |
|
||
Cash used in operating activities |
|
$ |
(4,823 |
) |
|
$ |
(4,378 |
) |
Cash used in investing activities |
|
$ |
(1,651 |
) |
|
$ |
(772 |
) |
Cash used in financing activities |
|
$ |
(664 |
) |
|
$ |
(13 |
) |
Cash flows from operating activities
Net cash used in operating activities for the three-month period ended March 31, 2025 of $4.8 million consisted primarily of net loss of $12.0 million, adjustments for non-cash charges for depreciation and amortization and other non-cash impacts of $1.0 million, share-based compensation expense of $2.1 million offset by a reduction in inventory excess and obsolescence of $1.4 million, along with changes in operating assets and liabilities that resulted in net cash inflow of $5.6 million. The changes in operating assets and liabilities consisted primarily of $7.0 million reduction in receivables, $5.9 million reduction in inventories and $1.6 million increase in accrued liabilities, partially offset by $3.5 million decrease in accounts payable, $0.8 million reduction in accrued employee compensation, $4.2 million lower other assets and liabilities due to adjustment for loss on supplier commitments and lower accrual for sales returns and $0.8 million increase in prepaid expenses.
Net cash used in operating activities for the three-month period ended March 31, 2026 of $4.4 million consisted primarily of net loss of $3.4 million, adjustments for non-cash charges for depreciation and amortization and other non-cash impacts of $1.0 million, share-based compensation expense of $1.3 million and change in deferred taxes of $0.1 million, offset by an increase in estimate of credit losses of $0.3 million and a reduction in inventory excess and obsolescence of $0.5 million, along with changes in operating assets and liabilities that resulted in net cash outflow of $2.6 million. The changes in operating assets and liabilities consisted primarily of $9.5 million increase in accounts receivable due to higher sales and $1.7 million increase in prepaid expenses, partially offset by $2.9 million increase in accounts payable due to timing of payments, $2.2 million increase in accrued liabilities, mostly related to an increase in accrued interest on debt, $2.1 million reduction in inventory, mostly from consumption of components, $0.7 million reduction in income taxes receivable, $0.4 million higher other assets and liabilities and $0.3 million increase in accrued employee compensation.
Cash flows from investing activities
Our investing activities for both periods presented consisted of capital expenditures for property, equipment, internal use software and capitalized labor costs for software to be marketed for sale in support of the growth of our business.
27
Cash flows from financing activities
During the three-month period ended March 31, 2025, net cash used by financing activities of $0.7 million was primarily due to repayment of principal due under our term loan facility.
During the three-month period ended March 31, 2026, net cash used by financing activities of $13 thousand was due to taxes paid from shares withheld for net settlement of taxes due on vesting of restricted shares issued to our employees.
Debt
As of March 31, 2026, we had $21.5 million outstanding on our term loan facility and $45.0 million outstanding on our revolving credit facility with Bank of America. The effective interest rate on the term loan facility at March 31, 2026 was 9.45% and the weighted-average interest rate on our revolving credit facility was 9.20%.
As of March 31, 2026, we were not in compliance with our quarterly fixed charge coverage ratio and quarterly consolidated leverage ratio covenants. In addition, in June 2025, we ceased paying the principal and interest on the term loan and interest on the revolving credit facility, resulting in a payment default which is also continuing. Such defaults afford the lender the right to declare the amounts outstanding under our credit agreement immediately due and payable. To provide us with the financing flexibility needed to meet our obligations as they come due over the next twelve months, we are actively seeking additional capital through possible divestitures and/or capital raising transactions and working with the lender to address our non-compliance. If the lender were to accelerate the maturity of our indebtedness under the credit agreement, there is substantial uncertainty that we would be able to secure capital resources to repay the amounts due. Absent acceleration of payment, our term facility and revolving credit facility matures on November 17, 2026, at which time the outstanding principal and interest will be due. Refer to Note 5. Debt, to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.
Off-balance sheet arrangements
We do not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as variable interest entities, structured finance, or special purpose entities, as part of our ongoing business. Accordingly, our operating results, financial condition and cash flows are not subject to off-balance sheet risks.
Critical Accounting Estimates
Our consolidated financial statements and the related notes thereto are prepared in accordance with U.S. GAAP. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expense and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material.
Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year ended December 31, 2025, filed on May 1, 2026, for a more complete discussion of our critical accounting policies and estimates. Since the filing of our Form 10-K, there have been no material changes in our significant accounting estimates from those disclosed therein.
28
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Excluding the impact of changes in interest rates and the uncertainty in the global financial markets, there have been no material changes to our market risk for the three-month period ended March 31, 2026. We conduct business in all parts of the world and are thereby exposed to market risks related to fluctuations in foreign currency exchange rates. The U.S. dollar is the single largest currency in which our revenue contracts are denominated. Any decline in the value of local foreign currencies against the U.S. dollar results in our products and services being more expensive to a potential foreign customer. In those instances where our goods and services have already been sold, receivables may be more difficult to collect. Additionally, in jurisdictions where the revenue contracts are denominated in U.S. dollars and operating expenses are incurred in the local currency, any decline in the value of the U.S. dollar will have an unfavorable impact to operating margins. We have not entered into any foreign currency hedging transactions. We do not purchase or hold any derivative financial instruments for speculation or arbitrage.
We do not hold any cash in any investment accounts and all cash is deposited with financial institutions that management believes are of high credit quality. Our cash consists primarily of U.S. dollar denominated demand accounts.
We had $21.5 million outstanding on our term loan facility and $45.0 million outstanding on our revolving credit facility as of March 31, 2026. We are exposed to interest rate risk from fluctuations in the Prime Rate that is a component of the interest rate used to calculate interest expense on both the term and revolving credit facilities. Interest accrues on the outstanding principal amount of the term loan facility and revolving credit facility at a rate equal to the Prime Rate plus an applicable margin of 2.25%. At March 31, 2026, the effective interest rate on the term loan was 9.45%. A hypothetical 100-basis point increase in interest rates would result in an additional $0.2 million in interest expense related to the term credit facility per year. At March 31, 2026, the weighted-average interest rate on the revolving credit facility was 9.20%. A hypothetical 100-basis point increase in interest rates would result in an additional $0.5 million in interest expense related to the revolving credit facility per year. These rates do not include an additional 2% default rate penalty that was added on both the term loan and revolving loan facilities as a result of the event of default that was assessed beginning in the fourth quarter of 2024.
There have been no other material changes in our market risk since December 31, 2025.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
Our management, with the participation of our principal executive officer and interim principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended, or the Exchange Act), as of March 31, 2026, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and interim principal financial officer have concluded that, as of such date, our disclosure controls and procedures were not effective because of material weaknesses in our internal control over financial reporting, previously reported in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2025.
Material Weaknesses
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
As disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2025, management identified the following material weaknesses in internal controls over financial reporting during the year ended December 31, 2025:
29
Ongoing Remediation Efforts to Address the Previously Identified Material Weaknesses
Management, with oversight from the Audit Committee of our Board of Directors, is taking steps to remediate the material weaknesses described above by implementing changes to our internal control over financial reporting. Management is in the process of enhancing, and will continue to enhance, the risk assessment process and design and implementation of internal controls over financial reporting. The remediation measures to correct the previously identified material weaknesses include, but are not limited to, the efforts summarized below:
30
As we continue to evaluate and work to improve our internal control over financial reporting, management may determine to take additional measures to strengthen controls or to modify the remediation measures described above. When fully implemented and operational, we believe the controls we have designed or plan to design will remediate the material weaknesses that we have identified. Following our design and implementation of our remediation efforts, we will need to demonstrate their operating effectiveness. We will not be able to consider the material weakness remediated until the applicable remedial controls operate for a sufficient period of time and our management has concluded, through testing, that our control is operating effectively.
Changes in internal control
We continue working towards implementing processes and procedures to address the material weaknesses noted above. Other than the ongoing remediation activities disclosed above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on effectiveness of controls and procedures
None.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Other claims
Third parties may from time to time assert legal claims against us. Our industry is characterized by vigorous protection and pursuit of intellectual property rights. A number of companies hold a large number of patents that may cover technology necessary to our products. We have in the past received and expect to continue to receive claims by third parties that we infringe their intellectual property rights. In the opinion of management, we believe we have established adequate accruals pursuant to U.S. generally accepted accounting principles for any expected future liability with respect to pending lawsuits, claims and proceedings, where the nature and extent of any such liability can be reasonably estimated based on presently available information. However, there can be no assurance that the final resolution of any existing or future lawsuits, claims or proceedings will not have a material adverse effect on our business, results of operations, financial conditions, or cash flows.
For additional information, see Note 10. Commitments and contingencies in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Part I, Item 3. Legal Proceedings in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 1A. Risk Factors.
There have been no material changes to the risk factors as disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Additional risks and uncertainties, including risks and uncertainties not presently known to us, or that we currently deem immaterial, could also have an adverse effect on our business, financial condition and/or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the three-month period ended March 31, 2026, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities and Exchange Act of 1934)
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Item 6. Exhibits.
We have filed the exhibits listed on the accompanying Exhibit Index, which is incorporated herein by reference.
EXHIBIT INDEX
Exhibit Number |
|
Description |
31.1* |
|
Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document |
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Filed herewith.
+ Indicates management contract or compensatory plan
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
CAMBIUM NETWORKS CORPORATION |
|
|
|
|
|
Date: May 20, 2026 |
|
By: |
/s/ Morgan C. Kurk |
|
|
|
Morgan C. Kurk |
|
|
|
President and Chief Executive Officer |
|
|
|
|
Date: May 20, 2026 |
|
By: |
/s/ Mitchell Cohen |
|
|
|
Mitchell Cohen |
|
|
|
Interim Chief Financial Officer |
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