Cambium Networks Corp

Previous wording

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, 2023, filed March 15, 2024. Results for the three-month and nine-month periods ended September 30, 2024 are not necessarily indicative of the results that may be expected for any period in the future.

Current wording

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 Comprehensive Form 10-K for the fiscal year ended December 31, 2024, filed April 7, 2026. In our Comprehensive Form 10-K for the year ended December 31, 2024, we restated financial statements for the three-month and six- month periods ended June 30, 2024. The financial results included herein for this period reflect the impact of the restatement. Results for the three-month period ended June 30, 2025 are not necessarily indicative of the results that may be expected for any period in the future.

Previous wording

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 for commercial use cases. 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. During 2024, both our ePMP4600 and PMP 450v platforms received FCC approval to operate in the recently released 6 GHz band in conjunction with our approved Automated Frequency Coordination (AFC) service.

Current wording

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.

Previous wording

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 XV7-35X, which will be complemented with a broad range of indoor and outdoor Wi-Fi 7 solutions in the coming months as the industry transition occurs.

Current wording

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.

Previous wording

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 network. 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 AI-powered root cause analysis with proactive resolution, ensuring service level agreements are met and preventing client impact. The integrated security gateway and SD-WAN for small and medium businesses may also be associated with a subscription for network security services.

Current wording

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.

Previous wording

The level of inventory across the industry along with macroeconomic factors such as higher interest rates, which impact private sector capital investment, and concerns about a global economic slowdown have resulted in softened demand for our products and services. We continue to see a high level of competition in our industry due to slower demand and aggressive pricing. We believe that this will continue to negatively impact revenues for the remainder of 2024. We may continue to have ongoing risks of technology shifts that could result in any increased inventory becoming obsolete before it is deployed. We also continue to work closely with our contract manufacturers and supply chain partners to balance production to market demand.

Current wording

Macroeconomic 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 have added to the softened demand for our products and services that we experienced over 2023 and 2024 coming out of the pandemic, and increased our cost of revenues and impacted, and may continue to impact, 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.

Previous wording

We continue to monitor the impact of macroeconomic factors, including a potential global recession, inflationary pressures, and growing political tensions because of regional conflicts. We also believe that our customers continue to grapple with the impact of these macroeconomic factors on their businesses and future investment plans, resulting in business uncertainty and a more constrained approach to forecasts and orders. Any prolonged economic disruptions, further deterioration in the global economy or outbreaks of international hostilities could have a negative impact on demand from our customers in future periods.

Current wording

We continue to monitor the impact of macroeconomic factors, including a potential global recession, inflationary pressures, monetary policy shifts, trade wars, and growing political tensions globally 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.

Previous wording

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 and move manufacturing to other locations, which could cause disruptions in our supply operations. Nationalistic trends are occurring in various geographies which may make it impractical for us to do business in some countries.

Current wording

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 and move manufacturing to other locations, particularly Thailand, which has caused some disruptions in our supply operations, together with the impact of moving manufacture of some products to suppliers who have no recent experience building similar products. Nationalistic trends are occurring in various geographies which may make it impractical for us to do business in some countries.

Previous wording

We are actively taking actions to improve our profitability and continue to 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 and sales of excess inventory. We believe these actions, together with our existing cash balances, provide us with the financial flexibility needed to meet our obligations as they come due over the next twelve months, so long as our lenders under the Amended Credit Agreement do not accelerate the maturity of our indebtedness under the Amended Credit Agreement. However, this conclusion depends in part on the bank not accelerating the maturity of our debt, our expectations regarding macro-conditions in the markets in which we compete, customer acceptance and purchases of our products, buying decisions by our distributors and other factors that are not within our control. Should Bank of America declare the amounts outstanding under the Amended Credit Agreement to be immediately due and payable, we may not be able to refinance such indebtedness. If Bank of America were to accelerate the maturity of our indebtedness under the Amended Credit Agreement, there is substantial uncertainty we will be able to secure capital resources to repay the amounts due.

Current wording

We continue to take actions to improve our profitability and focus on operating efficiency and therefore are 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 accommodation with our lenders 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 in part 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 that are not all within our control.

Previous wording

Total revenue was $43.7 million, an increase of 1.6% year-over-year

Current wording

Total revenue was $39.4 million, a decrease of 12.9% year-over-year

Previous wording

Total costs of revenues and operating expenses were $51.8 million

Current wording

Total costs of revenues and operating expenses, including impairment, were $46.0 million

Previous wording

Our revenues are generated primarily from the sale of our products, which consist of hardware 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. Revenues are recognized net of estimated stock returns, rebates, incentives and cooperative marketing allowances that we provide to distributors. We recognize subscription services revenue ratably over the term in which services are provided and our performance obligation is satisfied. 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 and 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.

Current wording

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.

Previous wording

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 Mexico, Thailand, Israel and Taiwan. Cost of revenues also includes costs associated with supply operations, including personnel related costs and allocated overhead costs, provision for excess and obsolete inventory and 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 development costs associated with products marketed to be sold.

Current wording

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.

Previous wording

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. 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 and loss on supplier commitment expense and other factors. We expect our gross margins will fluctuate from period to period depending on the interplay of these various factors.

Current wording

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 PTP and PMP access points typically increases as network operators build out the density of 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.

Previous wording

We classify our operating expense 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 personnel costs, such as salaries, sales commissions, benefits, bonuses and share-based compensation expense. In addition, we separate depreciation and amortization in their own category.

Current wording

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, benefits, and bonuses, 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. In 2025, we recorded impairment of software for external sale and this is separately disclosed in the statements of operations.

Previous wording

In addition to personnel-related costs, research and development expenses consist of costs associated with design and development of our products, product certification, travel, recruiting and shared facilities and shared IT costs. We generally recognize research and development expense as incurred. We capitalize certain software project costs under development 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 this is included in cost of revenues. 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.

Current wording

In addition to personnel 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. 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.

Previous wording

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, digital marketing platforms, third-party marketing services and shared facilities and shared IT costs.

Current wording

In addition to personnel 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.

Previous wording

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 (in thousands):

Current wording

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 and six-month periods ended June 30, 2024 compared to the three-month and six-month periods ended June 30, 2025 (in thousands):

Previous wording

Revenues increased $0.7 million, or 1.6%, to $43.7 million for the three-month period ended September 30, 2024, from $43.0 million for the three-month period ended September 30, 2023, with the largest increase in our Enterprise product category driven by higher Wi-Fi and switching product revenues. This increase was offset by decreased revenues in our point-to-point and point-to-multi-point product categories, mostly driven by lower demand.

Current wording

Product revenues decreased $5.8 million, or 14.3%, from $40.4 million for the three-month period ended June 30, 2024, to $34.6 million for the three-month period ended June 30, 2025, with the largest decrease in our point-to-multi-point and point-to-point product categories, mostly driven by lower demand and impacts from our factory move, partially offset by increased revenues in our enterprise product category.

Previous wording

Our PMP product revenues decreased $5.6 million, or 23.7%, from the three-month period ended September 30, 2023 to 2024. The decrease in point-to-multi-point revenues was driven by lower revenues in Europe, Middle East, Africa, mostly due to lower demand, partially offset by higher revenues in North America, mostly due to higher demand.

Current wording

Our PMP product revenues decreased $7.6 million, or 38.8%, from the three-month period ended June 30, 2024 to 2025. The decrease in point-to-multi-point revenues was driven by lower revenues across all regions, mostly due to lower demand from our service providers for our ePMP products.

Previous wording

PTP product revenues decreased $6.5 million, or 40.9%, from the three-month period ended September 30, 2023 to 2024 mostly driven by lower demand for defense products across all regions.

Current wording

PTP product revenues decreased $3.4 million, or 23.5%, from the three-month period ended June 30, 2024 to 2025 mostly driven by lower demand for PTP products for defense and PTP products in unlicensed spectrum.

Previous wording

Revenues increased in North America and Caribbean and Latin America with decreases in Europe, Middle East, Africa and Asia Pacific from the three-month period ended September 30, 2023 to September 30, 2024. North America revenues increased $3.5 million, or 19.9%, with the largest increase in enterprise revenues on higher demand for Wi-Fi 6 products along with increased PMP revenues on higher demand for 60 GHz products, partially offset by lower PTP product revenues due to lower demand for defense products. Europe, Middle East, Africa revenues decreased by $2.1 million, or 14.5%, mostly driven by decreased PMP product revenues due to lower demand for 28 GHz products and decreased PTP product revenues due lower demand for defense products, partially offset by increased enterprise product revenues due to higher demand for Wi-Fi 6 and switching products. Caribbean and Latin America revenues increased $0.2 million, or 3.1%, mostly driven by higher enterprise product revenues, offset by lower PTP and PMP product revenues. Asia Pacific revenues decreased $1.0 million, or 18.1%, mostly driven by decreased PTP and PMP product revenues, both due to lower demand.

Current wording

Revenues decreased in Europe, Middle East, Africa and Caribbean and Latin America and remained flat in North America and Asia Pacific from the three-month period ended June 30, 2024 to June 30, 2025. North America revenues increased $0.4 million, or 1.8%, driven mostly by higher enterprise product revenues with higher demand for switching products partially offset by lower demand for Wi-Fi 6 products, mostly offset by lower PMP and PTP product revenues across all products in these categories. Europe, Middle East, Africa revenues decreased by $4.3 million, or 27.0%, mostly driven by decreased PMP product revenues due to lower demand for ePMP products, along with lower PTP products driven by lower demand for defense products, partially offset by higher enterprise product revenues due to higher demand for Wi-Fi 6 products. Caribbean and Latin America revenues decreased $1.9 million, or 35.3%, mostly driven by lower PTP and PMP product revenues, partially offset by higher enterprise product revenues. Asia Pacific revenues remained flat, mostly driven by increased enterprise product revenues, mostly offset by lower PMP and PTP revenues due to lower demand.

Previous wording

Cost of revenues decreased $5.8 million, or 18.1%, to $26.3 million for the three-month period ended September 30, 2024 from $32.1 million for the three-month period ended September 30, 2023. The decrease in cost of revenues was primarily driven by a $3.9 million decrease in excess and obsolescence reserve and $0.2 million decrease in loss on supplier commitment recorded in the three-month period ended September 30, 2024. Cost of revenues also decreased due to lower freight-in costs and lower production costs.

Current wording

Cost of revenues for products decreased $7.5 million, or 26.0%, from $28.7 million for the three-month period ended June 30, 2024 to $21.2 million for the three-month period ended June 30, 2025. The decrease in cost of revenues was primarily driven by lower revenues along with a $1.6 million decrease in excess and obsolescence reserve and $6.7 million decrease in loss on supplier commitment expense.

Previous wording

Gross margin increased to 39.9% for the three-month period ended September 30, 2024 from 25.5% for the three-month period ended September 30, 2023. The increase primarily reflects the impact from the decrease in our excess and obsolescence reserve and loss on supplier commitment expense, along with the lower freight-in and production costs.

Current wording

Gross margin for products increased from 29.1% for the three-month period ended June 30, 2024 to 38.1% for the three-month period ended June 30, 2025. The increase primarily reflects the impact from the decrease in our excess and obsolescence reserve and loss on supplier commitment expense.

Previous wording

Interest expense increased $0.8 million, or 126.3%, to $1.4 million for the three-month period ended September 30, 2024 from $0.6 million for the three-month period ended September 30, 2023. The increase was primarily due to an increase in the interest rate on the term loan and the addition of interest on the revolving credit facility, partially offset by an increase in interest income.

Current wording

Interest expense increased $0.9 million, or 67.3%, from $1.4 million for the three-month period ended June 30, 2024 to $2.3 million for the three-month period ended June 30, 2025. The increase was primarily due to an increase in the interest rate on the term loan and the addition of interest on the revolving credit facility and the 2% penalty assessed on both the term loan and revolving credit facility starting in the fourth quarter of 2024 as a result of the event of default.

Previous wording

Our provision for income taxes at September 30, 2023 was based upon the estimated annual tax rate for the year, applied to federal, state and foreign income. Due to forecasting uncertainty for 2024, our provision for income taxes at September 30, 2024 is based on 9-month year-to-date actual results. Our provision for income taxes was $0.2 million for the three-month period ended September 30, 2024 versus a provision for income taxes of $3.4 million for the three-month period ended September 30, 2023. The effective income tax rates were (2.2)% and (15.0)% over the same periods, respectively. In the three-month period ended September 30, 2023, the effective tax rate of (15.0)% was different from the statutory rate of 21.0% primarily due to the establishment of a valuation allowance on the net deferred tax assets on the UK company, net of tax benefits on Foreign Derived Intangible Income, tax benefit arising on U.S. Research and Development tax credits, and changes to the excess tax benefits on share-based compensation. For the three-month period ended September 30, 2024, our effective tax rate of (2.2)% was different from the statutory rate of 21.0%, primarily due to an increase in the valuation allowance on the net deferred tax assets of the UK company, maintaining a full valuation allowance on the net UK deferred tax assets.

Current wording

Due to forecasting uncertainty for 2024 and 2025, our provision for income taxes at June 30, 2024 and June 30, 2025 are based on 3-month year-to-date actual results. Our provision for income taxes was $0.6 million for the three-month period ended June 30, 2024 versus a provision for income taxes of $0.3 million for the three-month period ended June 30, 2025. The effective income tax rates were (4.1)% and (2.9)% over the same periods, respectively. For the three-month period ended June 30, 2024, the effective tax rate of (4.1)% was different from the statutory rate of 21.0% primarily due to an increase in the valuation allowance on the net deferred tax assets of the UK company. For the three-month period ended June 30, 2025, our effective tax rate of (2.9)% was different from the statutory rate of 21.0%, primarily due to an increase in the valuation allowance on the net deferred tax assets of the Company, maintaining a full valuation allowance on the net deferred tax assets.

Previous wording

Revenues decreased $48.0 million, or 26.7%, to $132.0 million for the nine-month period ended September 30, 2024, from $180.0 million for the nine-month period ended September 30, 2023, with the largest decrease in our point-to-point product category driven by decreased defense orders. Revenues also decreased in our point-to-multi-point product category driven by lower demand from service providers and in our enterprise product category due to lower order volumes from distributors.

Current wording

Product revenues decreased $18.8 million, or 22.8%, from $82.6 million for the six-month period ended June 30, 2024, to $63.8 million for the six-month period ended June 30, 2025, with the largest decrease in our point-to-multi-point and point-to-point product categories, mostly driven by lower demand, offset by increase in our enterprise product category.

Previous wording

Our PMP product revenues decreased $15.6 million, or 21.4%, from the nine-month period ended September 30, 2023 to 2024. The decrease in our point-to-multi-point product revenues was driven by lower demand from service providers mostly in North America and Europe, Middle East, Asia.

Current wording

Our PMP product revenues decreased $13.2 million, or 34.5%, from the six-month period ended June 30, 2024 to 2025. The decrease in point-to-multi-point revenues was driven by lower revenues in all regions, mostly due to lower demand from our service providers for our 60 GHz, 28 GHz and ePMP products.

Previous wording

Enterprise product revenues increased $12.7 million, or 506.6%, from the three-month period ended September 30, 2023 to 2024. Enterprise revenues increased in all regions except Asia Pacific, with the largest increase in Europe, Middle East, Africa. Enterprise product revenues increased mostly for Wi-Fi 6 and switching products as channel inventory levels are decreasing and distributors are restocking.

Current wording

Enterprise product revenues increased $3.6 million, or 15.5%, from the six-month period ended June 30, 2024 to 2025. Enterprise revenues increased in all regions except Europe, Middle East, Africa, with the largest increase in North America, with higher demand for switching products partially offset by lower demand for Wi-Fi 6 products.

Previous wording

Revenues decreased in all regions except Caribbean and Latin America from the nine-month period ended September 30, 2023 to September 30, 2024. North America revenues decreased $37.9 million, or 36.1%, with the largest decrease in PTP product revenues due to lower demand for defense, decreased enterprise product revenues during the first half of 2024 due to lower demand for Wi-Fi 6 and switching products and decreased PMP product revenues due to lower demand from service providers. Europe, Middle East, Africa revenues decreased by $5.1 million, or 12.6%, mostly driven by decreased PMP and PTP product revenues driven by lower demand, partially offset by increased enterprise product revenues. Caribbean and Latin America revenues increased $0.7 million, or 4.4%, mostly driven by increased enterprise and PMP product revenues, partially offset by lower PTP product revenues. Asia Pacific revenues decreased $5.6 million, or 29.7%, mostly driven by decreased revenues across all product lines, mostly due to lower demand.

Current wording

Revenues decreased in all regions from the six-month period ended June 30, 2024 to June 30, 2025. North America revenues decreased $6.4 million, or 14.4%. The decrease in revenues in North America was driven mostly by decreased PTP revenues primarily due to lower demand for PTP accessories and defense, decreased PMP product revenues primarily due to lower demand for 60 GHz, products, partially offset by higher enterprise product revenues driven by improved demand for switching products partially offset by lower demand for Wi-Fi 6 products. Europe, Middle East, Africa revenues decreased by $5.8 million, or 20.4%, mostly driven by decreased enterprise product revenues due to lower demand for Wi-Fi 6 and switching products, decreased PMP product revenues due to lower demand for 28 GHz and ePMP products and lower PTP revenues driven by lower demand from defense. Caribbean and Latin America revenues decreased $5.2 million, or 51.5%, mostly driven by lower PTP and PMP product revenues partially offset by increased enterprise revenues. Asia Pacific revenues decreased $1.8 million, or 19.4%, mostly driven by decreased PMP and PTP revenues due to lower demand, partially offset by increased enterprise revenues, mostly for Wi-Fi 6 products.

Previous wording

General and administrative expense decreased $2.5 million, or 29.2%, to $6.1 million for the three-month period ended September 30, 2024 from $8.7 million for the three-month period ended September 30, 2023. The decrease in general and administrative expense was primarily due to $1.5 million of nonrecurring expenses incurred in the third quarter of 2023 related to the Chief Executive Officer transition that did not repeat in 2024, $0.3 lower staff-related costs due to lower headcount, $0.3 million lower professional fees, $0.2 million lower audit and tax fees and $0.2 million reduction of bad debt expense.

Current wording

General and administrative expense decreased $1.2 million, or 8.4%, from $13.9 million for the six-month period ended June 30, 2024 to $12.7 million for the six-month period ended June 30, 2025. The decrease in general and administrative expense was primarily due to $1.0 million lower staff-related costs due to employee attrition, $0.4 million of CFO turnover expense incurred in 2024, $0.7 million lower share-based compensation expense, $0.7 million lower bad debt expense, $0.3 million lower other professional fees, $0.2 million lower other expenses, $0.1 million lower nonrecurring expense related to the headquarters office move in the first quarter of 2024 and $0.1 million lower insurance expense. The decrease in general and administrative expenses was partially offset by $0.9 million higher legal fees, $0.8 million higher audit and tax expenses and $0.7 million higher outside contractor spend due to employee attrition.

Previous wording

Interest expense increased $1.8 million, or 99.8%, to $3.6 million for the nine-month period ended September 30, 2024 from $1.8 million for the nine-month period ended September 30, 2023. The increase was primarily due to an increase in the interest rate on the term loan and the addition of interest on the revolving credit facility beginning in the first quarter of 2024, partially offset by higher interest income and lower bank charges.

Current wording

Interest expense increased $2.0 million, or 89.2%, from $2.3 million for the six-month period ended June 30, 2024 to $4.3 million for the six-month period ended June 30, 2025. The increase was primarily due to an increase in the interest rate on the term loan, the addition of interest on the revolving credit facility and the addition of the 2% penalty on both the term loan and revolving credit facility as a result of the event of default.

Previous wording

Our provision for income taxes at September 30, 2023 was based upon the estimated annual tax rate for the year, applied to federal, state and foreign income. Due to forecasting uncertainty for 2024, our provision for income taxes at September 30, 2024 is based on nine-month year-to-date actual results. Our provision for income taxes was $0.5 million for the nine-month period ended September 30, 2024 versus a provision for income taxes of $3.3 million for the nine-month period ended September 30, 2023. The effective income tax rates were (1.0)% and (15.3)% over the same periods, respectively. In the nine-month period ended September 30, 2023, the effective tax rate of (15.3)% was different from the statutory rate of 21.0%, primarily due to the establishment of a valuation allowance on the deferred tax assets of the UK company, net of tax benefits on Foreign Derived Intangible Income, tax benefit arising on U.S. Research and Development tax credits, and changes to the excess tax benefits on share-based compensation. For the nine-month period ended September 30, 2024, our effective tax rate of (1.0)% was different from the statutory rate of 21.0%, primarily due to the implementation of a tax method change in the U.S. related to the tax capitalization of our research and development expenditures, resulting in a provision-to-return impact, and a corresponding reduction in the required U.S. valuation allowance, while also including in the period an increase in the valuation allowance on the net deferred tax assets of the UK company, maintaining a full valuation allowance on the net UK deferred tax assets.

Current wording

Due to forecasting uncertainty for 2024 and 2025, our provision for income taxes at June 30, 2024 and June 30, 2025 are based on 6-month year-to-date actual results. Our provision for income taxes was $2.5 million for the three-month period ended June 30, 2024 versus a provision for income taxes of $0.6 million for the three-month period ended June 30, 2025. The effective income tax rates were (8.2)% and (3.1)% over the same periods, respectively. In the three-month period ended June 30, 2024, the effective tax rate of (8.2)% was different from the statutory rate of 21.0% primarily due to the establishment of a deferred tax liability on hypothetical withholding tax on non-permanent investment in subsidiaries. For the three-month period ended June 30, 2025, our effective tax rate of (3.1)% was different from the statutory rate of 21.0%, primarily due to an increase in the valuation allowance on the net deferred tax assets of the Company, maintaining a full valuation allowance on the net deferred tax assets.

Previous wording

As of September 30, 2024, we had a cash balance of $46.5 million, an increase of $27.8 million from December 31, 2023. We drew $45.0 million on our revolving credit facility in the first half of 2024 for working capital needs for the near future, mainly to: (i) fund normal operating expenses; (ii) meet interest and principal requirements of our outstanding indebtedness; and (iii) 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 focus on cost management, operating efficiency and efficient discretionary spending. We expect to regularly assess our liquidity needs and market conditions and may raise additional equity or incur additional debt if and when our board of directors determines that doing so is in our best interest.

Current wording

As of June 30, 2025, we had a cash balance of $27.8 million, a decrease of $7.1 million from December 31, 2024. Our primary liquidity needs are: (i) to fund normal operating expenses; (ii) to meet interest and principal requirements of our outstanding indebtedness; and (iii) 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 focus on cost management, operating efficiency and efficient discretionary spending. We expect to regularly assess our liquidity needs and market conditions and may raise additional equity or seek additional capital through possible divestitures if and when our board of directors determines that doing so is in our best interest.

Previous wording

For the third quarter of 2024, all quarterly principal and interest payments have been made in accordance with the terms of our credit facility with Bank of America. As of September 30, 2024, we were in compliance with our monthly liquidity covenant for all measurement periods, but were not in compliance with our quarterly EBITDA covenant under the credit agreement. In addition, we were not in compliance with our monthly liquidity covenant as of October 31, 2024. Such defaults would afford Bank of America the right to declare the amounts outstanding thereunder immediately due and payable. We are seeking a forbearance from the bank and are working with the bank to address our noncompliance with the covenant. If we are not able to obtain a forbearance or waiver of the defaults or otherwise refinance such indebtedness, and if Bank of America were to accelerate the maturity of our indebtedness under the Amended Credit Agreement, there is substantial uncertainty we would be able to secure capital resources to repay the amounts due. Please refer to Note 6. Debt in the Notes to the Unaudited Condensed Consolidated Financial Statements, regarding our debt outstanding under our credit facilities.

Current wording

As of June 30, 2025, we were not in compliance with our quarterly fixed charge coverage ratio and quarterly consolidated leverage ratio covenants, and these defaults continued throughout 2025. In addition, in June 2025, we ceased paying principal and interest on the term loan and interest on the revolving credit facility. Such defaults afford Bank of America 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 we are not able to obtain a waiver of the defaults or otherwise refinance such indebtedness, and if the lender were to accelerate the maturity of our indebtedness under the Amended Credit Agreement, there is substantial uncertainty we would be able to secure capital resources to repay the amounts due. Please refer to Note 7. Debt in the Notes to the Unaudited Consolidated Financial Statements, regarding our debt outstanding under our credit facilities.

Previous wording

Net cash used in operating activities for the nine-month period ended September 30, 2023 of $10.7 million consisted of net loss of $24.6 million, share-based compensation expense of $8.8 million and adjustments for depreciation and amortization and other non-cash impacts of $12.5 million, an increase in deferred tax assets of $0.3 million and changes in operating assets and liabilities that resulted in net cash outflows of $7.71 million. The changes in operating assets and liabilities consisted primarily of a $28.3 million increase in inventories due to lower demand for our products and higher channel inventory, a $6.5 million decrease in accounts payable due to timing of invoices and payments, a $2.0 million decrease in accrued employee compensation due to lower corporate bonus accrual and $1.3 million lower accrued liabilities primarily related to lower inventory in transit. The uses of cash were partially offset by a $22.4 million decrease in accounts receivable reflecting the impact of lower sales and the timing of collections, $4.8 million increase in cash provided by all other assets and liabilities, mostly driven by the increase in accrued sales returns along with collection of the UK RDEC tax credit and $3.0 million reduction in prepaid expenses, mostly due to lower vendor prepayments.

Current wording

Net cash used in operating activities for the six-month period ended June 30, 2024 of $13.5 million consisted of net loss of $32.7 million, adjustments for non-cash charges for depreciation and amortization and other non-cash impacts of $5.4 million, share-based compensation expense of $5.1 million, inventory excess and obsolescence expense of $6.5 million, estimate of credit losses of $0.9 million, and adjustments for an increase in deferred tax assets of $1.5 million, along with changes in operating assets and liabilities that resulted in net cash outflows of $0.3 million. The changes in operating assets and liabilities consisted primarily of a $8.4 million lower inventory as channel inventories are starting to decrease, $4.2 million lower accounts receivable due to lower sales mostly offset by $4.4 million higher income taxes receivable, $3.0 million lower accounts payable due to decreased purchases and timing of payments, $2.4 million lower other assets and liabilities, mostly due to adjustments for loss on supplier commitments and lower accrual for sales returns, $1.5 million higher prepaid assets due to additional supplier prepayments, $1.0 million lower accrued liabilities due to lower customer rebates and $0.5 million lower accrued employee compensation.

Previous wording

Net cash used in operating activities for the nine-month period ended September 30, 2024 of $4.3 million consisted primarily of net loss of $45.3 million, offset by an increase in our provision for inventory excess and obsolescence of $9.3 million, share-based compensation expense of $7.6 million and adjustments for depreciation and amortization and other non-cash impacts of $8.4 million, a decrease in deferred tax assets of $3.7 million and changes in operating assets and liabilities that resulted in net cash inflows of $11.9 million. The changes in operating assets and liabilities consisted primarily of a $14.6 million decrease in inventories, $3.8 million decrease in accounts receivable due to lower sales and improved cash collection, $2.1 million decrease in accrued liabilities and $1.7 million decrease in accounts payable due to decreased purchases. These inflows were partially offset by $9.3 million increase in prepaid expenses, mostly as a result of an increase in supplier prepayments and a $1.1 million decrease in employee compensation.

Current wording

Net cash used in operating activities for the six-month period ended June 30, 2025 of $14.1 million consisted primarily of net loss of $21.1 million, adjustments for non-cash charges for depreciation and amortization and other non-cash impacts of $2.3 million, share-based compensation expense of $3.5 million and impairment charge of $0.2 million, offset by a reduction in inventory excess and obsolescence of $1.7 million and reduction in provision for estimated credit losses of $0.1 million, along with changes in operating assets and liabilities that resulted in net cash inflow of $2.8 million. The changes in operating assets and liabilities consisted primarily of $3.3 million reduction in receivables, $9.7 million reduction in inventories, $2.7 million reduction in prepaid expenses and $2.0 million reduction in accrued liabilities mostly due to lower revenues and $0.3 million lower accrued employee compensation, partially offset by $4.8 million decrease in accounts payable, $10.9 million lower other assets and liabilities due to an increase in noncurrent supplier prepayments and decrease in noncurrent loss on supplier commitments.

Previous wording

Our investing activities for all 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. The increase in cash used in investing activities for the nine-month period ended September 30, 2023 to the nine-month period ended September 30, 2024 is mostly due to leasehold improvements completed on the new Hoffman Estates headquarters.

Current wording

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.

Previous wording

During the nine-month period ended September 30, 2024, net cash provided by financing activities of $43.0 million was primarily due to $45.0 million drawn down on the revolving credit facility and proceeds received of $0.7 million from the issuance of ordinary shares under our ESPP partially offset by $2.6 million repayment of principal due under the term loan facility with Bank of America.

Current wording

During the six-month period ended June 30, 2024, net cash provided by financing activities of $44.3 million was primarily due to $45.0 million drawn down on the revolver and proceeds received of $0.7 million from the issuance of ordinary shares under our ESPP partially offset by $1.3 million repayment of principal due under the term loan facility with Bank of America.

Previous wording

As of September 30, 2024, we had $22.8 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 credit facility at September 30, 2024 was 8.85% and the weighted-average interest rate on our revolving credit facility was 8.66%. The Company is required to make quarterly principal payments of $0.7 million under the term credit facility and quarterly interest payments under both the term loan facility and the revolving credit facility. For the third quarter of 2024, all quarterly principal and interest payments have been made in accordance with the terms of our credit agreement with Bank of America.

Current wording

As of June 30, 2025, 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 June 30, 2025 was 10.24% and the weighted-average interest rate on our revolving credit facility was 9.13%. We are required to make quarterly principal payments of $0.7 million under the term credit facility and quarterly interest payments under both the term loan facility and the revolving credit facility. For the first quarter of 2025, all quarterly principal and interest payments have been made in accordance with the terms of the credit agreement.

Previous wording

As of September 30, 2024, we were in compliance with our monthly liquidity covenant for all measurement periods, but were not in compliance with our quarterly EBITDA covenant under this credit agreement. In addition, we were not in compliance with our monthly liquidity covenant as of October 31, 2024. Such defaults would afford Bank of America the right to declare the amounts outstanding thereunder immediately due and payable. We are seeking a forbearance from the bank and are working with the bank to address our noncompliance with the covenant. If we are not able to obtain a forbearance or waiver of the defaults or otherwise refinance such indebtedness, and if Bank of America were to accelerate the maturity of our indebtedness under the Amended Credit Agreement, there is substantial uncertainty we would be able to secure capital resources to repay the amounts due. Absent acceleration of payment, our term loan facility and revolving credit facility matures on November 17, 2026, at which time the outstanding principal will be due. Refer to Note 6. Debt, to our unaudited condensed consolidated financial statements in Part I of this Form 10-Q for additional information.

Current wording

As of June 30, 2025, we were not in compliance with our quarterly fixed charge coverage ratio and quarterly consolidated leverage ratio covenants, and these defaults continued throughout all of 2025. 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 covenant 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 7. Debt, to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.