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What changed in Cambium Networks Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cambium Networks Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+527 added−469 removedSource: 10-K (2026-04-07) vs 10-K (2024-03-15)

Top changes in Cambium Networks Corp's 2024 10-K

527 paragraphs added · 469 removed · 331 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

84 edited+33 added−23 removed56 unchanged
Biggest changeIn the fourth quarter of 2023 we announced and commenced commercial shipment of the RV22, a Wi-Fi 6 home meshing access point that is cloud managed on cnMaestro and includes a rich app for subscriber management of the access point and select services. 8 The following table shows a summary of our product portfolio: Cambium Networks ONE Network Summary Network Management cnMaestro Essentials and X - Cloud-Based Management Software X Assurance EasyPass Application Control Network Services QoE and NSE - Advanced Network and Security Services Wired Platform cnMatrix - Wireless Aware Switching Product Platform Wi-Fi 6/6E Fiber Fixed Wireless PTP 820/850 PTP 550/670/700 PMP 450 ePMP cnWave cnReach Design Focus Software Defined Radios, Cloud Managed, High Performance and Value Wi-Fi Indoor and Outdoor XGS PON Converged Fiber and Wireless Networks Licensed Microwave Backhaul Industry Leading Sub-6 GHz and 7/8 GHz TDD Backhaul Performance Unparalleled Scalability for Multipoint networks Price/ Performance PTP and PMP Leadership Gb to the Edge for Urban, high-density Suburban, and Rural markets Licensed Narrowband in rugged I/O rich package Throughput 2.5 Gbps/AP 10 Gbps Symmetric OLT 2+ Gbps 450 - 1400 Mbps 1.2 Gbps/Sector 1.2 Gbps/ Sector 15 Gbps/DN 3 Gbps/BTS KB to MB Spectrum (GHz except as noted) 2.4, 5, 6 PON 6-38 4.400 - 5.925 7.125 - 8.500 3,5,6 2.4, 5, 6.4 24.25 - 29.50 57 - 66 220, 450, 700, 900 MHz Design Services Wi-Fi Designer LINK Planner cnHeat Ethernet switches Our cnMatrix Ethernet enterprise switching solutions simplify network deployment and operation. cnMatrix provides the intelligent interface between wireless and wired networks. cnMatrix’s policy-based automation (PBA) accelerates network deployment, mitigates human error, increases security, and improves reliability. cnMatrix includes multiple varieties of copper-based edge switches and aggregation switches and in the first half of 2024 we expect to introduce our first fiber aggregation switch to complete the portfolio.
Biggest changeWe expect to continue expanding our Wi-Fi 7 portfolio as the market upgrades to the newest standard. 11 The following table shows a summary of our product portfolio: Cambium Networks ONE Network Summary Network Management cnMaestro Essentials and X - Cloud-Based Management Software X Assurance EasyPass Application Control Market Apps Network Services QoE and NSE - Advanced Network and Security Services Wired Platform cnMatrix - Wireless Aware Switching Product Platform Wi-Fi 6/6E/7 Fiber Fixed Wireless PTP 820/850 PTP 550/670/700 PMP 450 ePMP cnWave cnReach Design Focus Software Defined Radios, Cloud Managed, High Performance and Value Wi-Fi Indoor and Outdoor XGS PON Converged Fiber and Wireless Networks Licensed Microwave Backhaul Industry Leading Sub-6 GHz and 7/8 GHz TDD Backhaul Performance Unparalleled Scalability for Multipoint networks Price/ Performance PTP and PMP Leadership Gb to the Edge for Urban, high-density Suburban, and Rural markets Licensed Narrowband in rugged I/O rich package Throughput Up to 9.2 Gbps/AP 10 Gbps Symmetric OLT 2+ Gbps 450 - 1400 Mbps 1.2 Gbps/Sector 1.2 Gbps/ Sector 15 Gbps/DN 3 Gbps/BTS KB to MB Spectrum (GHz except as noted) 2.4, 5, 6 PON 6-38 4.400 - 5.925 7.125 - 8.500 3,5,6 2.4, 5, 6.4 24.25 - 29.50 57 - 66 220, 450, 700, 900 MHz Design Services Wi-Fi Designer LINK Planner cnHeat Ethernet switches Our cnMatrix Ethernet enterprise switching solutions simplify network deployment and operation. cnMatrix provides an intelligent interface between wireless and wired networks. cnMatrix’s policy-based automation ("PBA") accelerates network deployment, mitigates human error, increases security, and improves reliability. cnMatrix includes multiple varieties of copper-based edge switches and aggregation switches and in the first half of 2024 we introduced our first fiber aggregation switch to complete the portfolio.
We generally require that the manufacturing processes and procedures are certified to International Organization for Standardization (ISO) 9001 standards. Our third-party manufacturers typically procure the components needed to build our products based on our demand forecasts.
We generally require that the manufacturing processes and procedures are certified to the International Organization for Standardization ("ISO") 9001 standards. Our third-party manufacturers typically procure the components needed to build our products based on our demand forecasts.
We are building and enabling a suite of services, deployed at scale with minimal human intervention, that will enable the network to be dynamic. Expanding our addressable markets Today, fierce competition to provide high quality broadband access in rural, suburban, and urban markets is driving down subscription prices while simultaneously driving up performance requirements.
We are building and enabling a suite of services, deployed at scale with minimal human intervention, that will enable the network to be dynamic. 8 Expanding our addressable markets Today, fierce competition to provide high-quality broadband access in rural, suburban, and urban markets is driving down subscription prices while simultaneously driving up performance requirements.
Network management platform Our cloud-based cnMaestro and cnMaestro X network management platform provide users with an integrated, intelligent, easy to use tool for end-to-end network management of our portfolio from the network operating center to be managed to the edge of the network by an individual CPE. cnMaestro’s interface allows users to easily onboard large numbers of new devices, configure existing devices, monitor the entire network and troubleshoot.
Network management platform Our cloud-based cnMaestro and cnMaestro X network management platforms provide users with an integrated, intelligent, easy to use tool for end-to-end network management of our portfolio from the network operating center to be managed to the edge of the network by an individual CPE. cnMaestro’s interface allows users to easily onboard large numbers of new devices, configure existing devices, monitor the entire network and troubleshoot.
Point-to-Point (PTP) fixed wireless backhaul Our PTP solutions are typically connected to high-speed, high-bandwidth wireline or fiber networks, and provide wireless broadband backhaul to a facility, a networked device, or to a PMP access point. Our PTP solutions can be deployed throughout a network over distances of more than 100 kilometers and provide speeds greater than 5 Gbps.
Point-to-Point ("PTP") fixed wireless backhaul Our PTP solutions are typically connected to high-speed, high-bandwidth fiber networks, and provide wireless broadband backhaul to a facility, a networked device, or to a PMP access point. Our PTP solutions can be deployed throughout a network over distances of more than 100 kilometers and provide speeds greater than 5 Gbps.
These forecasts represent our estimates of future demand for our products based on historical trends and analyses from our sales and product management functions and adjusted for overall market conditions. Generally, for our primary third-party manufacturers, we update these forecasts monthly. This allows us to leverage the purchasing power of our third-party manufacturers.
These forecasts represent our estimates of future demand for our products based on historical trends and analyses from our sales and product management functions, and are adjusted for overall market conditions. Generally, for our primary third-party manufacturers, we update these forecasts monthly. This allows us to leverage the purchasing power of our third-party manufacturers.
In addition, our PTP 700 operates in NATO Band IV from 4.4-5.9 GHz, as well as in the 7 GHz and 8 GHz bands, and meets stringent federal operating, performance, and security standards. The mainstay of our backhaul offering is the PTP 670 for commercial applications and PTP 700 for defense and national security applications.
In addition, our PTP 700 operates in NATO Band IV from 4.4-5.9 GHz, as well as in the 7 GHz and 8 GHz bands, and meets stringent federal operating, performance, and security standards. The mainstay of our unlicensed backhaul offering is the PTP 670 for commercial applications and PTP 700 for defense and national security applications.
For some of our products, we do substantially all of the design work; for other products, we outsource both the design (in whole or in part) and the manufacture of the product; and for several products we distribute and sell a product designed and manufactured by a third party under our name on a white label basis.
For some of our products, we do substantially all of the hardware design work; for other products, we outsource both the hardware design (in whole or in part) and the manufacture of the product; and for several products we distribute and sell a product designed and manufactured by a third party under our name on a white label basis.
Although we have focused on high-capacity PTP FWB networking solutions, national government network operators have an equal need for the same FWB, Wi-Fi, switching, and value-added services as municipal, state, enterprise, and industrial network operators, although with added requirements for information assurance, security and other domain specific attributes. 6 Our technology and products Our ONE Network strategy takes advantage of advances in wireless standards, software defined radios and open application programming interfaces (APIs) to enable the centralized management of a range of network technologies.
Although we have focused on high-capacity PTP FWB networking solutions, national government network operators have an equal need for the same FWB, Wi-Fi, switching, and value-added services as municipal, state, enterprise, and industrial network operators, although with added requirements for information assurance, security and other domain-specific attributes. 9 Our technology and products Our ONE Network strategy takes advantage of advances in wireless standards, software defined radios and open application programming interfaces ("APIs") to enable the centralized management of a range of network technologies.
Since our customers purchase devices to operate in specific spectrum bands allocated by the regulatory authorities, our products must meet the technical requirements set forth for such spectrum allocation(s).
Since our customers purchase devices to operate in 16 specific spectrum bands allocated by the regulatory authorities, our products must meet the technical requirements set forth for such spectrum allocation(s).
We maintain compliance with various regulations related to the environment, including the Waste Electrical and Electronic Equipment and the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment regulations adopted by the European Union.
We maintain compliance with various regulations related to the environment, including the Waste Electrical and Electronic Equipment and the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment regulations adopted 17 by the European Union.
In addition to dedicated point-to-point platforms, as technology has evolved, we have developed solutions that while principally supporting point-to-multi-point architectures, also support point-to-point applications, including the 60 GHz cnWave V3000 and the ePMP Force 425. Revenues from these products are included in the PMP product category in our revenues by product category reporting, as that is their primary application.
In addition to dedicated point-to-point platforms, as technology has evolved, we have developed solutions that, while principally supporting point-to-multi-point architectures, also support point-to-point applications, including the 60 GHz cnWave V3000 and the ePMP Force 4525. Revenues from these products are included in the PMP product category in our revenues by product category reporting, as that is their primary application.
The subscription-based solution includes granular application shaping, dynamic queue-based rate limiting, congestion management and application insights, which 9 provides broadband service providers immediate access to the information and controls to optimize end user experiences and be the service provider of choice. With cnMaestro X Assurance, a cloud-based insights engine continuously learns from data reported from cnMaestro-managed devices.
The subscription-based solution includes granular application shaping, dynamic queue-based rate limiting, congestion management and application insights, which provides broadband service providers with immediate access to the 12 information and controls to optimize end user experiences and be the service provider of choice. With cnMaestro X Assurance, a cloud-based insights engine continuously learns from data reported from cnMaestro-managed devices.
We generally use 13 telecommunications certification bodies to obtain certification for our devices in each jurisdiction in which we intend to market and sell our products. • Trade compliance requirements .
We generally use telecommunications certification bodies to obtain certification for our devices in each jurisdiction in which we intend to market and sell our products. • Trade compliance requirements .
The PMP 450 series is optimized for performance in high-density and demanding physical environments, and includes the PMP 450m with integrated cnMedusa massive multi-user multiple input/multiple output, or MU-MIMO, technology. The PMP 450 product line also 7 supports the FCC’s Citizen Broadband Radio Service, or CBRS.
The PMP 450 series is optimized for performance in high-density and demanding physical environments and includes the PMP 450m with 10 integrated cnMedusa massive multi-user multiple input/multiple output ("MU-MIMO"), technology. The PMP 450 product line also supports the FCC’s Citizen Broadband Radio Service, or CBRS.
In certain foreign jurisdictions, where required by local law or custom, some of our employees are represented by local workers’ councils and/or industry collective bargaining agreements. We have not experienced any work stoppages, and we consider our relationship with our employees to be good.
In certain foreign jurisdictions, where required by local law or customs, some of our employees are represented by local workers’ councils and/or industry collective bargaining agreements. We have not experienced any work stoppages, and we consider our relationship with our employees to be good.
Our U.S. benefits plan includes health benefits, life and disability insurance, various voluntary insurances, flexible time off and leave programs, an employee assistance plan, an educational assistance policy, and a 401(k) plan with a competitive employer match. Our international benefits plans are competitive locally and generally provide similar benefits.
Our U.S. benefits plan includes health benefits, life and disability insurance, various voluntary insurances, flexible time off and leave programs, an employee assistance plan, and a 401(k) plan with a competitive employer match. Our international benefits plans are competitive locally and generally provide similar benefits.
The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site, www.sec.gov, that includes filings of and information about issuers that file electronically with the SEC. 16
The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site, www.sec.gov, that includes filings of and information about issuers that file electronically with the SEC. 18
We expect to respond to growing trends such as the following: • The implementation of broadband networks comprised of both fiber and wireless solutions . Wireless internet service providers (WISPs) are adding fiber to their networks to compete with encroachment by traditional wireline operators.
We expect to respond to growing trends such as the following: • The implementation of broadband networks comprised of both fiber and wireless solutions . Wireless internet service providers ("WISPs") are adding fiber to their networks to compete with traditional wireline operators.
For example, the policy-based automation feature on our cnMatrix switches enables the establishment of policies for each end-point device type and then automatically propagates those policies across all switch ports in the network, regardless of the actual port each device is plugged into. Managing operating expenses, such as energy consumption, is increasingly important to network operators.
For example, the policy-based automation feature on our cnMatrix switches enables the establishment of policies for each endpoint device type and then automatically propagates those policies across all switch ports in the network, regardless of the actual port each device is plugged into. Managing operating expenses, such as energy consumption, is increasingly important to network operators.
We are guided by our core values of growth and profitability; outstanding global teamwork; relentless innovation and edge; making and meeting commitments; respecting and developing our people; and serving our community. 14 Diversity and equal employment At Cambium Networks, we seek to maintain an environment that is open, diverse and inclusive, and where our people feel valued, included and accountable.
We are guided by our core values of growth and profitability; outstanding global teamwork; relentless innovation and edge; making and meeting commitments; respecting and developing our people; and serving our community. Equal employment At Cambium Networks, we seek to maintain an environment that is open and inclusive, and where our people feel valued, included and accountable.
Our sales organization typically engages directly with large Internet service providers and enterprise managed service providers and certain enterprises even though product fulfillment generally is provided by our channel partners. We also engage in joint selling and marketing with our service provider, system integrator, and reseller channel partners to their customers’ end users.
Our sales organization typically engages directly with Internet service providers and enterprise MSPs and certain enterprises even though product fulfillment generally is provided by our channel partners. We also engage in joint selling and marketing with our service provider, system integrator, and reseller channel partners to their customers’ end users.
Information contained on our websites is not incorporated by reference into this Annual Report on Form 10-K. In addition, the public may read and copy materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.
Information contained on our websites is not incorporated by reference into this Comprehensive Form 10-K. In addition, the public may read and copy materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.
A key differentiation between network products and services providers for most network operators will be the availability of integrated services layered on top of the network. We enable our end users to customize networks with bespoke or third-party services provided or enabled by us.
A key differentiation between network products and services providers for most network operators is the availability of integrated services layered on top of the network. We enable our end users to customize networks with bespoke or third-party services provided or enabled by us.
We offer PTP solutions that are designed to operate in unlicensed spectrum from 220 MHz to 5.9 GHz and 57 to 66 GHz, and in licensed spectrum from 6-38 and 71-86 GHz.
We offer PTP solutions that operate in unlicensed spectrum from 220 MHz to 5.9 GHz and 57 GHz to 66 GHz, and in licensed spectrum from 6-38 GHz and 71-86 GHz.
The applicable regulatory agencies in each jurisdiction adopt regulations to manage spectrum use, establish and enforce priorities among competing uses, limit harmful radio frequency interference and promote policy goals such as broadband deployment. These spectrum regulations regulate allocation, licensing, and equipment authorizations.
The applicable regulatory agencies in each jurisdiction adopt regulations to manage spectrum use, establish and enforce priorities among competing uses, limit harmful RF interference and promote policy goals such as broadband deployment. These spectrum regulations regulate allocation, licensing, and equipment authorizations.
These rules require us to monitor databases and establish and enforce policies to prohibit the sale of our products to embargoed or specially designated persons, entities and countries. • Rules and regulations, particularly in the United States and the European Union, governing environmental matters that restrict the use of certain dangerous substances in electrical or electronic equipment, govern use of certain chemical substances throughout their lifecycle and Waste Electrical and Electronic Equipment, Directive 2012/2019/EU, related to the collection, treatment, recycling and recovery of waste electrical and electronic equipment in the European Union and related laws elsewhere.
These rules require us to monitor databases and establish and enforce policies to prohibit the sale of our products to embargoed or specially designated persons, entities and countries. • Tariffs and other rules and policies of countries in which we import our products. • Rules and regulations, particularly in the United States and the European Union, governing environmental matters that restrict the use of certain dangerous substances in electrical or electronic equipment, govern use of certain chemical substances throughout their lifecycle and Waste Electrical and Electronic Equipment, Directive 2012/2019/EU, related to the collection, treatment, recycling and recovery of waste electrical and electronic equipment in the European Union and related laws elsewhere.
Our 60 GHz solution, cnWave, enables Gbps networking using the 60 GHz band and a distributed architecture that enables scaled networks with dynamic routing for reliability and resiliency.
Our 60 GHz solution, cnWave, enables Gbps networking in the 60 GHz band and a distributed architecture that enables scaled networks with dynamic routing for reliability and resiliency.
We believe our compensation structure aligns with our shareholders’ long-term interests by balancing profitability and growth, as well as current market practices, and reflects our commitment to pay for performance. Competition for qualified personnel in the technology space is intense, and our success depends in large part on our ability to recruit, develop and retain a productive and engaged workforce.
We believe our compensation structure aligns with our shareholders’ long-term interests by balancing profitability and growth, as well as current market practices. Competition for qualified personnel in the technology space is intense, and our success depends in large part on our ability to recruit, develop and retain a productive and engaged workforce.
Our enterprise-grade Wi-Fi 6/6E solutions provide distributed access to individual users or devices in indoor settings, such as office complexes, and outdoor settings, such as private spaces and outdoor public Wi-Fi hotspots, over distances from two meters to one kilometer with high capacity.
Our enterprise-grade Wi-Fi 6/6E/7 solutions provide distributed access to individual users or devices in indoor settings, such as office complexes, and outdoor settings, such as private spaces and outdoor public Wi-Fi hotspots, over distances from two meters to one kilometer.
Although we provide demand forecasts to our third-party manufacturers, some of our third-party manufacturers may assess charges, or we may have liabilities for excess inventory if we overestimate our demand. We may be liable to purchase excess product or aged material from our suppliers following reasonable mitigation efforts, increasing our inventory costs.
Although we provide demand forecasts to our third-party manufacturers, some of our third-party manufacturers may assess charges, or we may have liabilities for excess inventory, if we overestimate our demand. We may be liable to purchase excess products or aged materials from our suppliers following reasonable mitigation efforts, increasing our inventory costs.
Ruckus (CommScope), Ubiquiti, Meraki (Cisco), Extreme Networks, Aruba (HPE), Fortinet, Mist (Juniper), and Ruiji, are competitors to our Wi-Fi Access Point portfolio. Our cnMatrix wireless aware ethernet switch platform competes with Ubiquiti, MikroTik, Cisco, and HPE, among others.
Ruckus Networks (CommScope), Ubiquiti, Cisco Meraki, Extreme Networks, HPE Aruba, Fortinet, Mist (Juniper Networks), TP-Link, Extreme Networks, and Ruiji Networks, are competitors to our Wi-Fi Access Point portfolio. Our cnMatrix Ethernet switch platform competes with Ubiquiti, MikroTik, Cisco, TP-Link, Extreme Networks, and HPE, among others.
Our QoE solution is hardware agnostic, operating across both wireless and fiber networks, and offers a range of services to network operators utilizing our networking solutions as well as third-party competitive offerings.
Our Quality of Experience ("QoE") solution, provided by a third party, is hardware agnostic, operating across both wireless and fiber networks, and offers a range of services to network operators utilizing our networking solutions as well as third-party competitive offerings.
Our strategy Our strategy is to enable our customers to build broadband and internet access networks that deliver exceptional digital experiences at an affordable total cost of ownership. The foundation of our strategy is the Cambium ONE Network, enabled by cnMaestro which brings integration and automation to our entire portfolio.
Our strategy Our strategy is to enable our customers to build broadband and internet access networks that deliver exceptional digital experiences at an affordable total cost of ownership. The foundation of our strategy is the Cambium ONE Network, enabled by cnMaestro, which integrates and automates our entire portfolio.
We review our competitive situation as follows: • Our cnMaestro network management solution has the ability to manage both FWB edge networking devices (e.g., Wi-Fi, switching), and quality of experience and network security services, in a coordinated and centralized manner. In addition, its northbound APIs enable operators to integrate specialized services on top of their Cambium Networks infrastructure.
We review our competitive situation as follows: • Our cnMaestro network management solution has the ability to manage both FWB edge networking devices (e.g., Wi-Fi, switching), and network security services, in a coordinated and centralized manner. In addition, its API enables operators to integrate specialized services on top of their Cambium Networks infrastructure.
These services are integrated into Cambium’s ONE Network solution that enables organizations to deploy and manage security policies across the wireless and wired network, all fully managed and controlled as part of a single framework.
It is integrated into Cambium’s ONE Network solution that enables organizations to deploy and manage security policies across the wireless and wired network, all fully managed and controlled as part of a single framework.
Our competitors in the licensed point-to-point microwave market include Aviat Networks, Ceragon, SIAE, and SAF Technica, among others. Our cnWave 5G fixed (28 GHz) products compete with Intracom, Ericsson, Nokia, and Samsung. • Our home Wi-Fi routers are offered to subscribers by our fixed wireless service provider customers.
Our competitors in the licensed point-to-point microwave market include Aviat Networks, Ceragon Networks, SIAE Microelettronica, and Nokia, among others. Our cnWave 5G fixed (28 GHz) products compete primarily with Intracom Telecom. • Our home Wi-Fi routers are offered to subscribers by our fixed wireless service provider customers.
The Subscription and Services portfolio includes network planning and design as well as cloud or on-premises network management and control. The latter capability, delivered through subscription to cnMaestro X, our network management platform, forms the foundation of our ONE Network, a cloud-based network management architecture that allows users to remotely configure, monitor, and manage their wireless network.
The Subscription and Services portfolio includes network planning and design solutions, and cloud or on-premises network management and control solutions. The latter capability, delivered through subscription to cnMaestro™, 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.
As networks become more diverse and complex, cnMaestro’s capability will increasingly become a competitive strength. • Our competitors for products and solutions for unlicensed wireless broadband in the sub-7 GHz spectrum bands include Ubiquiti, Tarana, Airspan, Radwin, MikroTik, Ligowave, and HFCL Group.
As networks become more diverse and complex, cnMaestro’s capability can increasingly become a competitive strength. • Our competitors for products and solutions for unlicensed wireless broadband in the sub-7 GHz spectrum bands include Ubiquiti, Tarana Wireless, Radisys/Mimosa Networks, Radwin, and HFCL Group.
Our sales organization includes field and inside sales personnel, as well as regional technical managers with deep technical expertise who are responsible for pre-sales technical support. As of December 31, 2023, we had 117 sales personnel located in 18 countries.
Our sales organization includes field and inside sales personnel, as well as regional technical managers with deep technical expertise who are responsible for pre-sales technical support. As of December 31, 2024, we had 113 sales personnel located in 18 countries. As of December 31, 2025, we had 103 sales personnel located in 20 countries.
Leveraging the Community Forum, we collect network operator and channel partner feedback on potential product improvements and new product ideas, including through the administration of beta testing on our products. As of December 31, 2023, there were approximately 50,000 registered forum members on our Community Forum.
Leveraging the Community Forum, we collect network operator and channel partner feedback on potential product improvements and new product ideas, including through the administration of beta testing on our products. As of December 31, 2024 and December 31, 2025, there were approximately 57,000 and 58,000 active registered forum members on our Community Forum, respectively.
Item 1. Bu siness. Business Overview What we do Cambium Networks is a global technology company that designs, develops, and manufactures wireless broadband and Wi-Fi networking infrastructure solutions for a wide range of applications, including broadband access, wireless backhaul, Internet of Things (IoT), public safety, national security, and defense communications networks and Wi-Fi access.
Item 1. Bu siness. Business Overview What we do 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.
In 2022, we commenced commercial shipments of 28 GHz cnWave 5G Fixed, which operates in the 3GPP n257 (26.50 – 29.50 GHz), n258 (24.25 – 27.50 GHz), and n261 (27.50 – 28.35 GHz) bands. The platform incorporates both uplink and downlink MU-MIMO to optimize data rate to the CPE for residential and enterprise customers.
Our 28 GHz cnWave, which operates in the 3GPP n257 (26.50 – 29.50 GHz), n258 (24.25 – 27.50 GHz), and n261 (27.50 – 28.35 GHz) bands, incorporates both uplink and downlink MU-MIMO to optimize data rate to the CPE for residential and enterprise customers.
Our products and services enable network operators to build a platform using heterogeneous wireless technologies without requiring a separate management platform for each one. Our addition of intelligent automation improves operational performance and efficiency in networks that include our products’ ability to optimize the network at the application layer, enabling our products to enhance network performance.
Our products and services enable network operators to build a platform using heterogeneous wireless technologies without requiring a separate management platform for each one. Our intelligent automation improves operational performance and efficiency by optimizing the network at the application layer, enabling our products to enhance network performance.
The number of applications and devices on the network - from gaming, streaming media, and home automation, to enterprise applications running in the cloud, as well as applications that enhance automation and security - will continue to increase on a global basis. Some applications need more bandwidth.
The number of applications and devices on the network-from gaming, streaming media, and home automation to enterprise applications running in the cloud, as well as applications that enhance automation and security continue to increase on a global basis. Some applications need more bandwidth, other applications need lower latency. Businesses are leveraging IoT devices in digital transformation initiatives.
Competitors in the 3.5 GHz spectrum band, the Citizens Broadband Radio Service in FCC-governed markets, include Airspan and Tarana, but also Ericsson, Nokia, Baicells, and Telrad. Our cnWave 60 GHz mmWave point-to-point and point-to-multi-point products compete with Ubiquiti, MikroTik, Ceragon, Adtran, and Edgecore. • The landscape for broadband services using licensed spectrum is different.
Competitors in the 3.5 GHz spectrum band, the Citizens Broadband Radio Service in FCC-governed markets, include Airspan Networks and Tarana Wireless, as well as Ericsson (Telefonaktiebolaget LM Ericsson), Nokia, and Baicells Technologies. Our cnWave 60 GHz mmWave point-to-point and point-to-multi-point products compete with Ubiquiti and Ceragon Networks. 15 • The landscape for broadband services using licensed spectrum is different.
Technical support is also available on-line via chat and automated ticketing systems. 10 Training We provide a wide range of training and educational material, from comprehensive user guides and installation guides, to self-directed interactive training, to in-person instructor-led immersion courses to ensure our end-users and channel partners are familiar with the design, implementation, usage, and management of our products.
Training We provide a wide range of training and educational materials from comprehensive user guides and installation guides to self-directed interactive training, to in-person instructor-led immersion courses to ensure our end-users and channel partners are familiar with the design, implementation, usage, and management of our products.
We rely on federal, state, common law and international rights, as well as contractual restrictions, to protect our intellectual property.
Intellectual property Our success depends in part on our ability to protect our core technology and innovations. We rely on federal, state, common law and international rights, as well as contractual restrictions, to protect our intellectual property.
Our solutions are designed to enable managed service providers to cost effectively deploy and manage high value offerings for multiple hospitality or multi-family living property owners using the managed service provider (MSP) dashboard within cnMaestro X. • Applications for national defense and security initiatives . We are actively engaged with national defense connectivity initiatives, working closely with systems integration partners.
Our solutions are designed to enable managed service providers to cost-effectively deploy and manage high value offerings for multiple hospitality or multi-family living property owners using the managed service provider ("MSP") dashboard within cnMaestro X.
Competition The markets for FWB and Enterprise Wi-Fi and switching solutions are highly competitive and subject to rapid technological change. We compete in a wide range of related categories, each with its set of competitors worldwide that vary in size and in the products and solutions offered. We expect competition to persist, intensify and increase in the future.
We compete in a wide range of related categories, each with its own set of competitors worldwide that vary in size and in the products and solutions offered. We expect competition to persist, intensify and increase in the future.
Sales and marketing We sell our products primarily through a network of distributors who sell to other channel partners, including value-added resellers, system integrators, and end customers (end users), as well as through our direct sales force.
Cambium Networks Installer is a smartphone app that accelerates the installation and deployment of our fixed wireless products by field technicians. Sales and marketing We sell our products primarily through a network of distributors who sell to other channel partners, including value-added resellers, system integrators, and end customers (end users), as well as through our direct sales force.
There are also offerings for LiDAR heatmaps from Google and Cloud RF. • Our enterprise network edge solutions, which include Wi-Fi, cnMatrix ethernet switching, and Network Services Edge (NSE) products compete with a wide range of competitors, in some cases the competitor competing with two or more of our products.
The primary competitor to cnHeat is TowerCoverage.com. • Our enterprise network edge solutions, which include Wi-Fi, cnMatrix Ethernet switching, and Network Services Edge (NSE) products compete with a wide range of competitors, in some cases the competitor competing with two or more of our products.
Meeting new trends The post-pandemic era has redefined the workspace in the midst of a rebalancing between the enterprise and home. Businesses and individuals both expect seamless, secure communication and connectivity, whether from the conference room, the living room or even a recreational vehicle in a campground.
Meeting new trends Businesses and individuals both continue to expect seamless, secure communication and connectivity, whether from the conference room, the living room or even a recreational vehicle in a campground.
We have recently introduced two subscription services that complement and rely on cnMaestro: Network Service Edge (NSE 3000), and Quality of Experience (QoE). Network Service Edge delivers advanced security, network, and SD-WAN services for small and medium enterprise networks.
We continue to enhance our subscription services that complement and rely on cnMaestro. Network Service Edge (NSE) delivers advanced security, network, and SD-WAN services for small and medium enterprise networks.
We cannot assure that any of our patent applications will result in the issuance of a patent or whether the examination process will result in patents of valuable breadth or applicability.
Although we actively attempt to utilize patents to protect our technologies, we believe that none of our patents, individually, are material to our business. We cannot assure that any of our patent applications will result in the issuance of a patent or whether the examination process will result in patents of valuable breadth or applicability.
We also work with contract engineers in various locations globally. Our research and development team has deep expertise and experience in wireless technology, antenna design and network architecture and operation.
Our research and development organization are located primarily in San Jose, California, Hoffman Estates, Illinois, Ashburton, United Kingdom and Bangalore, India. We also work with contract engineers in various locations globally. Our research and development team has deep expertise and experience in wireless technology, antenna design and network architecture and operation.
Our industry is characterized by a large number of filed patents that may be applicable to products in our industry, and frequent claims and related litigation regarding patent and other intellectual property rights has occurred. As our company grows, it may be more likely that competitors or other third parties will claim that our products infringe their proprietary rights.
Our industry is characterized by a large number of filed patents that may be applicable to products in our industry, and frequent claims and related litigation regarding patent and other intellectual property rights has occurred, particularly regarding Wi-Fi technologies.
We are focused on hiring, training, and retaining exceptional talent. As of December 31, 2023, we had approximately 625 full-time employees, of whom 431 are located outside the United States. None of our U.S. employees are subject to a collective bargaining agreement.
As of December 31, 2025, we had approximately 486 full-time employees located in 25 countries, of whom 341employees are located outside of the United States. None of our U.S. employees are subject to a collective bargaining agreement.
We allow network operators to select the service level that best meets their needs. Our support organization both aids channel partners in supporting their direct customers and provides select technical support to our end users.
We allow network operators to select the service level that best meets their needs. Our support organization both aids channel partners in supporting their direct customers and provides select technical support to our end users. Technical support is also available on-line via chat and automated ticketing systems. 13 We are dedicated to making advanced networking technology accessible and straightforward.
Our Wi-Fi access point portfolio includes solutions enterprise, government, education, small business and home applications and offers a range of Wi-Fi access points and RF technology that enable network optimization based on desired geographic coverage and user density. In June 2020, we introduced our first Wi-Fi 6 access point, the XV3-8, which complements both the cnPilot and Xirrus solutions.
Our Wi-Fi access point portfolio supports enterprise, government, education, small business and home applications and offers a range of Wi-Fi access points that enable network optimization based on desired geographic coverage and user density.
It provides a single, centralized view of all network devices, including both FWB and Enterprise, as well as real-time performance and usage data, and allows users to make changes to the network configuration and settings.
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.
Channel partners may work directly with end users to identify their networking needs and they may also provide installation, configuration, and ongoing support services. As of December 31, 2023, we had over 14,000 channel partners, over 4,000 of whom have transacted with our distributors in the last two years. This number also includes almost 160 distributors purchasing directly from us.
Channel partners may work directly with end users to identify their networking needs, and they may also provide installation, configuration, and ongoing support services. As of December 31, 2024, we had over 13,000 channel partners and approximately 140 distributors.
In particular, large and established companies in our industry have extensive patent portfolios and are regularly involved in both offensive and defensive litigation. From time to time, third parties, including certain of these large companies and other non-practicing entities, may assert patent, copyright, trademark and other intellectual property rights against us, our channel partners or our end customers.
From time to time, third parties, including certain of these large companies and other non-practicing entities, may assert patent, copyright, trademark and other intellectual property rights against us, our channel partners or our end customers. Competition The markets for FWB and Enterprise Wi-Fi and switching solutions are highly competitive and subject to rapid technological change.
Enterprise solutions Our Enterprise portfolio includes our cloud-managed Wi-Fi solutions, our cnMatrix cloud-managed wireless-aware switching solution, our Xirrus Wi-Fi solutions, and our portfolio of Wi-Fi 6/6E access points which support both cnMaestro and Xirrus XMS management.
Enterprise solutions Our Enterprise portfolio includes our cnMatrix switching solution, our portfolio of Wi-Fi 6/6E/7 access points, and our Network Service Edge ("NSE") platform, all of which are supported by cnMaestro, our cloud based management platform.
Unless the context otherwise requires, we use "Cambium Networks" to refer to Cambium Networks Corporation and its subsidiaries throughout this Annual Report on Form 10-K.
Cambium Networks Corporation holds no material assets other than Cambium Networks, Ltd. and its subsidiaries and does not engage in any business operations. Unless the context otherwise requires, we use "Cambium Networks" to refer to Cambium Networks Corporation and its subsidiaries throughout this Comprehensive Form 10-K.
LINKPlanner is a comprehensive tool, developed over the past 12 years, used to plan PTP and PMP networks.
LINKPlanner is a comprehensive tool, developed over the past 12 years, used to plan PTP and PMP networks. LINKPlanner allows users to visualize and analyze hypothetical network deployment scenarios to evaluate performance and reliability allowing for cost-effective expansion and deployment of their networks.
We conduct our business through Cambium Networks, Ltd., a company organized under the laws of England and Wales, and its wholly-owned subsidiaries. Cambium Networks Corporation holds no material assets other than Cambium Networks, Ltd. and its subsidiaries and does not engage in any business operations.
Available information Cambium Networks was formed in 2011 as Vector Cambium Holdings (Cayman), Ltd., and changed its name to Cambium Networks Corporation in 2018. We conduct our business through Cambium Networks, Ltd., a company organized under the laws of England and Wales, and its wholly-owned subsidiaries.
In addition to these contractual arrangements, we also rely on a combination of trade secrets, copyrights, patents, trademarks, service marks and domain names to protect our intellectual property. We pursue the registration of our trademarks, service marks and domain names in the United States and England and in certain other locations outside of these jurisdictions.
In addition to these contractual arrangements, we also rely on a combination of trade secrets, patents, trademarks, service marks and domain names to protect our intellectual property. These laws, procedures and restrictions provide only limited protection and the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and still evolving.
Until April 1, 2024, our headquarters are located at Cambium Networks, Inc. at 3800 Golf Road, Suite 360, Rolling Meadows, Illinois 15 60008 and our telephone number is (888) 863-5250 after which time our address will be 2000 Center Drive, Suite A401, Hoffman Estates, Illinois 60192 and our telephone number will remain (888) 863-5250.
Our headquarters are located at Cambium Networks, Inc. at 2000 Center Drive, Suite A401, Hoffman Estates, Illinois 60192 and our telephone number is (888) 863-5250. Our Internet address is www.cambiumnetworks.com and our investor relations website is located at http://investors.cambiumnetworks.com.
The upcoming release of 6 GHz spectrum by governments around the world will give broadband operators even more opportunity for cost-effective network expansion. In the third quarter of 2023, we introduced our first release of Cambium Networks Fiber to better support our network operators deploying hybrid, fiber and FWB networks. • FWB as an alternative to fiber .
The ongoing release of 6 GHz spectrum by governments worldwide gives broadband operators even more opportunities for cost-effective network expansion. • FWB as an alternative to fiber .
We file patent applications in the United States and other countries where we believe there to be a strategic technological or business reason to do so. Although we actively attempt to utilize patents to protect our technologies, we believe that none of our patents, individually, are material to our business.
As of March 12, 2026, we had 99 issued U.S. patents, and 175 patents issued in various foreign jurisdictions as well as 28 U.S. and 79 foreign patent applications pending. We file patent applications in the United States and other countries where we believe there to be a strategic technological or business reason to do so.
We have a broad base of diverse talent in 21 countries and we believe that attracting, developing and retaining the best talent is critical to our success and achievement of our strategic objectives. We appreciate one another’s differences and strengths and are proud that our workforce comprises employees with a diversity of backgrounds and perspectives.
We have a broad base of diverse talent, and we believe that attracting, developing and retaining the best talent is critical to our success and achievement of our strategic objectives. Although we work in both remote and hybrid environments, we work collaboratively, without hierarchy, across geographies and functions.
We expect to continue to expand our product offerings and solutions capabilities in the future and to invest significantly in continued research and development efforts. 11 Intellectual property Our success depends in part on our ability to protect our core technology and innovations.
We expect to continue to expand our product offerings and solutions capabilities in the future and to invest significantly in continued research and development efforts. As of December 31, 2024 and December 31, 2025, our research and development organization consisted of 279 and 245 employees, respectively.
In December 2022, we commenced commercial shipment of the ePMP 4600 series, which utilizes the 6 GHz band, expected to be available and authorized by the FCC and other regulatory bodies around the world in 2024. Our cnReach IoT solutions offer connectivity for distributed sensors and controls across industrial deployments, delivering real-time monitoring, measurement and analytics to optimize system performance.
Our cnReach IoT solutions offer connectivity for distributed sensors and controls across industrial deployments, delivering real-time monitoring, measurement and analytics to optimize system performance.
Our direct fulfillment facilities are in Louisville, Kentucky, Venlo, Netherlands and Vietnam, from where we ship to our distributor partners and network operators. Research and development Our research and development organization is located primarily in San Jose, California, Rolling Meadows, Illinois (moving to Hoffman Estates, Illinois in the second quarter of 2024), Ashburton, United Kingdom and Bangalore, India.
Our direct fulfillment facilities are in Louisville, Kentucky, Venlo, Netherlands and Hanoi, Vietnam, from which we ship to our distributor partners and network operators. Research and development The success of our products to date is due in large part to our focus on research and development.
Simultaneously, networking technologies and standards continue to change, providing new capabilities and choice points for network operators. The result is a network edge that has evolved from a static connection to a highly complex, constantly evolving platform supporting a growing array of services.
The result is a network edge that has evolved from a static connection to a highly complex, constantly evolving platform supporting a growing array of services. Our solutions embed technology that is designed to be cost-effective and deliver a high-quality digital experience connecting devices around the world.
When deployed with Cambium Networks Wi-Fi access points and the cnMaestro management system, network operators have an affordable, feature-rich, high-quality unified wired/wireless enterprise grade network. In the first quarter of 2021, we introduced and began shipping the cnMatrix TX 2020R-P.
When deployed with Cambium Networks Wi-Fi access points and the cnMaestro management system, network operators have an affordable, feature-rich, high-quality unified wired/wireless enterprise grade network. In May of 2024, we introduced the EX-3024F Intelligent Ethernet Fiber Aggregation Switch, which offers zero-touch deployments, policy-based automation, auto device profiling and segmentation, and a non-blocking line-rate architecture with fully featured L2/L3 switching.
One of our key principles is respecting and developing our people. We are committed to maintaining the highest level of professional and ethical standards in the conduct of our business around the world. We believe that diverse and inclusive teams enhance individual and company performance and help us attract and retain the best talent available.
One of our key principles is respecting and developing our people. We are committed to maintaining the highest level of professional and ethical standards in the conduct of our business around the world. As of December 31, 2024, we had approximately 553 full-time employees located in 22 countries, of whom 392 employees are located outside the United States.
We offer a subscription to a cloud-based tool called cnHeat which leverages LiDAR data to build highly 12 accurate link forecasts. The primary competitor to cnHeat is TowerCoverage.com.
We offer a smaller-scale system geared towards more rural and campus environments. • The success of a FWB network is highly dependent on accurately predicting the performance of each link before it is deployed. We offer a subscription to a cloud-based tool called cnHeat which leverages LiDAR data to build highly accurate link forecasts.
Our FWB and Wi-Fi access, switching technologies, and software are designed to be cost-efficient and deliver high-quality digital experiences and device connectivity around the world. Our goal is to enable edge-of-the-network intelligence and the ability to adapt and respond to change.
Our goal is to enable edge-of-the-network intelligence and the ability to adapt and respond to change.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition to other risks listed in this “Risks Factors” section, factors that may affect our operating results include: • Fluctuations in demand for our products, including seasonal variations; • The impact of excess inventory held by our channel partners, including the impact on our excess and obsolete reserves; • Our ability to develop, introduce and ship in a timely manner new products and product enhancements, and to anticipate future market demands; • Failure of our distributors and channel partners to effectively promote and sell our products or manage their inventory and fulfillment; • Our ability to manage our inventory and commitments to suppliers effectively; • Our ability to release timely and error free software; • The failure to manage technology transitions in relationship with supply chain requirements, which could result in lower revenue or excess inventory; • Our ability to control costs, including our manufacturing and component costs and operating expenses; • The impact of of excess channel inventory, as well as the impact of component shortages, logistic delays and cost increases on our product manufacturing and shipment operations; • Our ability to timely fulfill orders for our products, which may be impacted by a number of factors, including the inability of our third-party manufacturers and suppliers to meet our demand, including as a result of component or part shortages or delays, or logistical failures in warehousing and shipping products; • Changes in the competitive dynamics of our target markets, including new entrants, consolidation and pricing pressures; • The inherent complexity, length and associated unpredictability of the sales cycles for our products, including as a result of technology evolution; • Announcements made by us or our competitors of new or enhanced products, promotions, changes in standards or other transactions; • Variation in product costs, prices or mix of products we sell; • Product quality issues that could result in increases in product warranty costs and harm to our reputation and brand; • Cyber-attacks, data breaches or malware that may disrupt our operations, harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business; 17 • The impact of vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products; • Regulatory uncertainty or changes that may be applicable to or impact our products and services; • The impact of health crises or pandemics on our operations, the operations of our third-party manufacturers and suppliers and on our customers and end users; • General economic or political conditions or instability in our markets, including global recessions or inflation; and • Increasing uncertainty of and tensions in international trade relations and tariffs, wars among countries including between the Ukraine and Russia, Israel and the Middle East and increasing tensions with China.
Biggest changeIn addition to other risks listed in this “Risks Factors” section, factors that may affect our operating results include: • Fluctuations in demand for our products, including seasonal variations; • Our ability to timely fulfill orders for our products, which may be impacted by a number of factors, including the inability of our third-party manufacturers and suppliers to meet our demand, including as a result of component or part shortages or delays, difficulties in product manufacturing, yield or quantity, or logistical failures in warehousing and shipping products; • The impact of excess inventory held by our channel partners, including the impact on our excess and obsolescence reserves; • The impact of tariffs or other trade regulations or restrictions that may be imposed by the U.S. or other governments; • The impact of any impairment of goodwill or indefinite-lived intangible assets; • Our inability to regain and maintain compliance with the financial covenants and other obligations under our secured Credit Agreement; • Our inability to develop, introduce and ship in a timely manner new products and product enhancements, and to anticipate future market demands; • Failure of our distributors and channel partners to effectively promote and sell our products or manage their inventory and fulfillment; • Our ability to manage our commitments to suppliers effectively; • Our ability to timely release high-quality software and software upgrades; • The failure to manage technology transitions in relationship with supply chain requirements, which could result in lower revenue or excess inventory and a growth in our obsolete inventory; • Our ability to control costs, including our manufacturing and component costs and operating expenses; • The impact of component shortages, logistic delays and cost increases in the manufacture or shipment of our products; • Changes in the competitive dynamics of our target markets, including new entrants, consolidation and pricing pressures; • The inherent complexity, length and associated unpredictability of the sales cycles for our products, including as a result of technology evolution; • Announcements made by us or our competitors of new or enhanced products, promotions, or changes in standards; • Variation in product costs, prices or mix of products we sell; • Product quality issues that could result in increases in product warranty costs and harm to our reputation and brand; • Cyber-attacks, data breaches or malware that may disrupt our operations, harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business; • The impact of vulnerabilities and critical security defects, on our products; • Regulatory uncertainty or changes that may be applicable to or impact sales of our products and services; 20 • The impact of health crises or pandemics on our operations, the operations of our third-party manufacturers and suppliers and on our customers and end users; • General economic or political conditions or instability in our markets, including global recessions or inflation, wars or other political tensions; • Increased expenses resulting from increases in component, production and logistics costs resulting from factors such as global inflationary pressures, shortages in supply or tariffs imposed by the U.S. or other countries on goods and services that are imported; • Increasing uncertainty of and tensions in international trade relations and tariffs, including the impact of tariffs adopted by the United States and reciprocal tariffs that may be imposed by other countries; and • Wars among countries including between the Ukraine and Russia, increasing tensions between the United States and China, and increasing military activities and tensions between Iran and Israel, the Middle East, and the United States.
If we over forecast demand, we may build excess inventory, incur increased costs to our suppliers for excess demand, and we may not be able to decrease our expenses in time to offset any shortfall in revenues, which could harm our ability to achieve or sustain expected results of operations and could lead to increased excess and obsolescence reserves, such as recently experienced.
If we over forecast demand, we may build excess inventory, incur increased costs to our suppliers for excess demand, and we may not be able to decrease our expenses in time to offset any shortfall in revenues, which could harm our ability to achieve or sustain expected results of operations and could lead to increased excess and obsolescence reserves, such as we recently experienced.
The unavailability of these components could substantially disrupt our ability to manufacture our products and fulfill sales orders. In addition, we currently depend on a limited number of suppliers for several critical components for our products, and in some instances, we use sole or single source suppliers for our components to simplify design and fulfillment logistics.
The unavailability of these components could substantially disrupt our ability to manufacture our products and fulfill sales orders. In addition, we currently depend on a limited number of suppliers for several critical components for our products, and in some instances we use sole or single source suppliers for components to simplify design and fulfillment logistics.
We rely on channel partners for a substantial majority of our sales and our future success is highly dependent upon establishing and maintaining successful relationships with distributors and other channel partners. Recruiting and retaining qualified channel partners and training them in our technology and products require significant time and resources.
We rely on distributors for a substantial majority of our sales and our future success is highly dependent upon establishing and maintaining successful relationships with distributors and other channel partners. Recruiting and retaining qualified distributors and training them in our technology and products require significant time and resources.
We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales. In addition, purchases of our products are frequently subject to budget constraints, multiple approvals, and unplanned administrative processing and other delays.
We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales. In addition, purchases of our products are frequently subject to budget constraints, multiple approvals, unplanned administrative processing and other delays.
We must also comply with similar international regulations, particularly those issued by the European Telecommunications Standards Institute, or ETSI, as such directives are or may be adopted as regulations by governments in member states.
We must also comply with similar international regulations, particularly those issued by the European Telecommunications Standards Institute ("ETSI"), as such directives are or may be adopted as regulations by governments in member states.
The failure of our products to comply, or delays in compliance, with the various existing and evolving industry regulations and standards could prevent or delay introduction of our products, which could harm our business. Changes in standards could cause our products to be required to be redesigned in order to meet these changing standards.
The failure of our products to comply, or delays in compliance, with the various existing and evolving industry regulations and standards could prevent or delay the introduction of our products, which could harm our business. Changes in standards could cause our products to be required to be redesigned in order to meet these changing standards.
We believe that our tax positions comply with applicable tax law and intend to vigorously defend our positions. However, as described below, tax authorities could take differing positions on certain issues. We may be subject to income tax audits in all the jurisdictions in which we operate. The years open for audit vary depending on the tax jurisdiction.
We believe that our tax positions comply with applicable tax law and intend to vigorously defend our positions. However, as described below, tax authorities could take differing positions on certain issues. We may be subject to income tax audits in all jurisdictions in which we operate. The years open for audit vary depending on the tax jurisdiction.
The continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the on-going Russia and Ukraine war and the war in the Middle East), and other events (such as economic sanctions and trade restrictions, including those related to the on-going Russia and Ukraine war) may cause further disruptions to the economies of the United States and other countries and create further uncertainties or could otherwise negatively impact our business, operating results, and financial condition.
The continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the on-going Russia-Ukraine war and the war in the Middle East), and other events (such as economic sanctions and trade restrictions, including those related to the on-going Russia-Ukraine war) may cause further disruptions to the economies of the United States and other countries and create further uncertainties or could otherwise negatively impact our business, operating results, and financial condition.
Factors that could cause fluctuations in the trading price of our shares include the following: • the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • sales of our shares by us or our shareholders or hedging activities by market participants; • failure of financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • operating performance or stock market valuations of other technology companies generally, or those in our industry in particular; • announced or completed acquisitions of businesses or technologies by us or our competitors; • general economic conditions and slow or negative growth of our markets; • rumors and market speculation involving us or other companies in our industry; • litigation involving us, our industry or both or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any major change in our management; and • other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
Factors that could cause fluctuations in the trading price of our shares include the following: • the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • sales of our shares by us or our shareholders or hedging activities by market participants; • failure of financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • operating performance or stock market valuations of other technology companies generally, or those in our industry in particular; • announced or completed acquisitions of businesses or technologies by us or our competitors; • general economic conditions and slow or negative growth of our markets; • rumors and market speculation involving us or other companies in our industry; • litigation involving us, our industry or both or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; 42 • any major change in our management; and • other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
Demand for our solutions versus those of our competitors is influenced by a variety of factors, including the following: • Product quality, performance, features and functionality, and reliability; • Depth and breadth of the sales channel; • Brand awareness and reputation; • Integration of intelligence into the product including the introduction of generative artificial intelligence tools or technology; • Total cost of ownership and return on investment associated with the products; • Ease of configuration, installation and use of the products; • Ability to provide a complete compatible and scalable solution; • Broad application across a range of use cases; • Ability to allow centralized management of the products and network to better enable network planning, including scalable provisioning, configuration, monitoring and complete network visualization; and • Strength, quality and scale of pre- and post-sales product support.
Demand for our solutions versus those of our competitors is influenced by a variety of factors, including the following: • Product quality, performance, features and functionality, and reliability; • Depth and breadth of the sales channel; • Brand awareness and reputation; • Integration of intelligence into the product including the introduction of generative artificial intelligence tools or technology; • Total cost of ownership and return on investment associated with the products; • Ease of configuration, installation and use of the products; 25 • Ability to provide a complete compatible and scalable solution; • Broad application across a range of use cases; • Ability to allow centralized management of the products and network to better enable network planning, including scalable provisioning, configuration, monitoring and complete network visualization; and • Strength, quality and scale of pre- and post-sales product support.
Our international sales and operations are subject to a number of risks, including the following: • impact of inflation on local economies; • fluctuations in currency exchange rates, which could drive fluctuations in our operating expenses; • required local regulatory certifications in each jurisdiction, which may be delayed for political or other reasons other than product quality or performance; • requirements or preferences for domestically manufactured products, which could reduce demand for our products or adversely impact our ability to fulfill customer orders; • differing technical standards, existing or future regulatory and certification requirements and required product features and functionality; • management communication problems related to entering new markets with different languages, cultures and political systems; • difficulties in enforcing contracts and collecting accounts receivable, and longer payment cycles, especially in emerging markets; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, and irregularities in, financial statements; • difficulties and costs of staffing and managing foreign operations; • the uncertainty of protection of intellectual property rights in some countries; • potentially adverse tax consequences, including regulatory requirements regarding our ability to repatriate profits to the United Kingdom; 25 • requirements to comply with foreign privacy, information security, and data protection laws and regulations and the risks and costs of non-compliance; • added legal compliance obligations and complexity; • the increased cost of terminating employees in some countries; • political and economic instability, war and terrorism; and • the impact of the spread of any diseases globally that might impact our operations.
Our international sales and operations are subject to a number of risks, including the following: • impact of inflation on local economies; • fluctuations in currency exchange rates, which could drive fluctuations in our operating expenses; • required local regulatory certifications in each jurisdiction, which may be delayed for political or other reasons other than product quality or performance; • requirements or preferences for domestically manufactured products, which could reduce demand for our products or adversely impact our ability to fulfill customer orders; • differing technical standards, existing or future regulatory and certification requirements and required product features and functionality; • management communication problems related to entering new markets with different languages, cultures and political systems; • difficulties in enforcing contracts and collecting accounts receivable, and longer payment cycles, especially in emerging markets; 31 • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, and irregularities in, financial statements; • difficulties and costs of staffing and managing foreign operations; • the uncertainty of protection of intellectual property rights in some countries; • potentially adverse tax consequences, including regulatory requirements regarding our ability to repatriate profits to the United Kingdom; • requirements to comply with foreign privacy, information security, and data protection laws and regulations and the risks and costs of non-compliance; • added legal compliance obligations and complexity; • the increased cost of terminating employees in some countries; • political and economic instability, war and terrorism; and • the impact of the spread of any diseases globally that might impact our operations.
It would be time-consuming and costly, and could be impracticable, to begin to use new manufacturers and designs and such changes could cause significant interruptions in supply and could have an adverse impact on our ability to meet our scheduled product deliveries and may subsequently lead to the loss of sales, delayed revenues or an increase in our costs, which could materially and adversely affect our business and operating results.
It would be 27 time-consuming and costly, and could be impracticable, to begin to use new manufacturers and designs and such changes could cause significant interruptions in supply and could have an adverse impact on our ability to meet our scheduled product deliveries and may subsequently lead to the loss of sales, delayed revenues or an increase in our costs, which could materially and adversely affect our business and operating results.
We have not to date experienced a material event related to a cybersecurity attack; however, the occurrence of any such event in the future could subject us to liability to our customers, suppliers, service providers, business partners and others, give rise to legal and/or regulatory action, could damage our reputation or otherwise materially harm our business, and could have a material adverse effect on our business, operating results, and financial condition.
We have not to date experienced a material event related to a cybersecurity attack; 37 however, the occurrence of any such event in the future could subject us to liability to our customers, suppliers, service providers, business partners and others, give rise to legal and/or regulatory action, could damage our reputation or otherwise materially harm our business, and could have a material adverse effect on our business, operating results, and financial condition.
Violations of anti-corruption laws may result in severe criminal or civil sanctions, including suspension or debarment from government contracting, and we may be subject to other liabilities and significant costs for investigations, litigation and fees, diversion of resources, negative press coverage, or reputational harm, all of which could negatively affect our business, operating results and financial condition.
Violations of anti-corruption laws may result in severe criminal or civil 35 sanctions, including suspension or debarment from government contracting, and we may be subject to other liabilities and significant costs for investigations, litigation and fees, diversion of resources, negative press coverage, or reputational harm, all of which could negatively affect our business, operating results and financial condition.
Complying with such regulations may also require us to put in place controls and procedures to monitor compliance with the applicable regulations that may be costly or not possible; • purchases by the U.S. and other governments may be subject to technological changes including changes in required standards that must be met, that are not required of non-governmental sales; • the U.S. government may require certain products that it purchases be manufactured in the United States and other relatively high-cost manufacturing locations under Buy American Act or other regulations, and we may not manufacture all products in locations that meet these requirements, which may preclude our ability to sell some products or services; and • governments may investigate and audit government contractors’ administrative and financial processes and compliance with laws and regulations applicable to government contractors, and any unfavorable audit could result in fines, civil or criminal liability, damage to our reputation and suspension or debarment from further government business.
Complying with such regulations may also require us to put in place controls and procedures to monitor compliance with the applicable regulations that may be costly or not possible; • purchases by the U.S. and other governments may be subject to technological changes including changes in required standards that must be met, that are not required of non-governmental sales; • the U.S. government may require certain products that it purchases be manufactured in the United States and other relatively high-cost manufacturing locations under Buy American Act, Trade Agreements Act or other regulations, and we may not manufacture all products in locations that meet these requirements, which may preclude our ability to sell some products or services; and • governments may investigate and audit government contractors’ administrative and financial processes and compliance with laws and regulations applicable to government contractors, and any unfavorable audit could result in fines, civil or criminal liability, damage to our reputation and suspension or debarment from further government business.
Given the relatively fluid regulatory environment globally and uncertainty how the U.S. government or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could directly and adversely impact our financial results and results of operations.
The relatively fluid regulatory environment globally and uncertainty how the U.S. government or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could directly and adversely impact our financial results and results of operations.
Our future success also depends significantly on additional purchases of our products by end users that have previously purchased our products. End users may choose not to purchase additional products because of several factors, including dissatisfaction with our products or pricing relative to competitive offerings, reductions in network operators’ spending levels or other causes outside 23 of our control.
Our future success also depends significantly on additional purchases of our products by end users that have previously purchased our products. End users may choose not to purchase additional products because of several factors, including dissatisfaction with our products or pricing relative to competitive offerings, reductions in network operators’ spending levels or other causes outside of our control.
Our actual or perceived failure to comply with applicable data protection laws or adequately protect personal data could result in claims of liability against us, damage our reputation or otherwise materially harm of business. Global privacy and data protection-related laws and regulations are evolving, extensive, and complex. Compliance with these laws and regulations can be difficult and costly.
Our actual or perceived failure to comply with applicable data protection laws or adequately protect personal data could result in claims of liability against us, damage our reputation or otherwise materially harm our business. 36 Global privacy and data protection-related laws and regulations are evolving, extensive, and complex. Compliance with these laws and regulations can be difficult and costly.
The U.S. government has also enacted controls restricting the ability to send certain products and technology related to semiconductors, semiconductor manufacturing, and supercomputing to China without an export license. These new controls also apply to certain hardware containing these specified integrated circuits. Other foreign governments may in turn impose similar or more restrictive controls.
The U.S. government has also enacted controls restricting the ability to send certain products and technology related to semiconductors, semiconductor manufacturing, and supercomputing to China without an export license. These controls also apply to certain hardware containing these specified integrated circuits. Other foreign governments may in turn impose similar or more restrictive controls.
Any decreased use of our products or limitation on our ability to export or sell our products could affect our business, financial condition and results of operations. 28 We do business in countries with a history of corruption and transact business with foreign governments, which increases the risks associated with our international activitie s. We are subject to the U.S.
Any decreased use of our products or limitation on our ability to export or sell our products could affect our business, financial condition and results of operations. We do business in countries with a history of corruption and transact business with foreign governments, which increases the risks associated with our international activitie s. We are subject to the U.S.
Conversely, because lead times for required materials and components vary significantly and depend on factors such as the specific supplier, contract terms and the demand for each component at a given time, if we underestimate our requirements, our third-party manufacturer may have inadequate materials and components required to produce our products.
Because lead times for required materials and components vary significantly and depend on factors such as the specific supplier, contract terms and the demand for each component at a given time, if we underestimate our requirements, our third-party manufacturer may have inadequate materials and components required to produce our products.
Our employees, including our senior management team, are generally at-will employees, and therefore may terminate employment with us at any time with no advance notice. The replacement of any members of 26 our senior management team or other key personnel likely would involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.
Our employees, including our senior management team, are generally at-will employees, and therefore may terminate employment with us at any time with no advance notice. The replacement of any members of our senior management team or other key personnel likely would involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.
We routinely assess exposures to any potential issues arising from current or future audits of current and prior years’ tax returns. When assessing such potential exposures and where necessary, we provide a reserve to cover any expected loss. To 37 the extent that we establish a reserve, we increase our provision for income taxes.
We routinely assess exposures to any potential issues arising from current or future audits of current and prior years’ tax returns. When assessing such potential exposures and where necessary, we provide a reserve to cover any expected loss. To the extent that we establish a reserve, we increase our provision for income taxes.
Our products are subject to governmental regulations in a variety of jurisdictions. To achieve and maintain market acceptance, our products must comply with these regulations as well as a significant number of industry standards. In the United States, our products must comply with various regulations defined by the Federal Communications Commission, or FCC, Underwriters Laboratories and others.
Our products are subject to governmental regulations in a variety of jurisdictions. To achieve and maintain market acceptance, our products must comply with these regulations as well as a significant number of industry standards. In the United States, our products must comply with various regulations defined by the Federal Communications Commission ("FCC"), Underwriters Laboratories and others.
Our channel partners purchase and maintain inventories of our products to meet future demand and have only limited rights to return the products they have purchased from us. Our channel partners are not generally committed to volume purchases of our products in any period, although some of our products carry minimum order quantities.
Our distributors purchase and maintain inventories of our products to meet future demand and have only limited rights to return the products they have purchased from us. Our channel partners are not generally committed to volume purchases of our products in any period, although some of our products carry minimum order quantities.
We have adopted a written audit committee charter, pursuant to which the audit committee must review all related party transactions required to be disclosed in our financial statements and approve any such related party transaction, unless the transaction is approved by another independent committee of our board.
We have adopted a written audit committee charter, pursuant 41 to which the audit committee must review all related party transactions required to be disclosed in our financial statements and approve any such related party transaction, unless the transaction is approved by another independent committee of our board.
If we or our channel partners are unable to demonstrate that our products offer significant performance, functionality or cost advantages to the competitor’s product, it would be difficult for us to generate sales to that network operator once a competitor’s equipment has been deployed.
If we or our channel partners are unable to demonstrate that our products offer 29 significant performance, functionality or cost advantages to the competitor’s product, it would be difficult for us to generate sales to that network operator once a competitor’s equipment has been deployed.
We generate a significant amount of revenues from sales outside of the United States, and we are therefore subject to a number of risks associated with international sales and operations. We have extensive international operations and generate a significant amount of revenues from sales to channel partners in Europe, the Middle East and Africa, Asia-Pacific and South America.
We generate a significant amount of revenues from sales outside of the United States, and we are therefore subject to a number of risks associated with international sales and operations. We have extensive international operations and generate a significant amount of revenue from sales to channel partners in Europe, the Middle East and Africa, Asia-Pacific and South America.
Our distributors may increase levels of inventory to meet supply shortages or expected demand; if demand decreases in future period, we may end up with excess channel inventory, leading to reductions in future period orders from our distributors. We endeavor to obtain information on inventory levels and sales data from our distributors.
Our distributors may increase levels of inventory to meet supply shortages or expected demand; if demand decreases in future periods, we may end up with excess channel inventory, leading to reductions in future period orders from our distributors. We endeavor to obtain information on inventory levels and sales data from our distributors.
Additionally, if any of our third-party manufacturers experience quality control problems in their manufacturing operations and our products do not meet network operators’ requirements, we could be required to cover the repair or replacement of any defective products.
Additionally, if any of our third-party manufacturers experience quality control problems in their manufacturing operations and our products do not meet network operators’ requirements, we could be required to cover cost of the repair or replacement of any defective products.
Some of our competitors may have stronger relationships with our channel partners than we do and we have limited control, if any, over the sale by our channel partners of our products instead of our competitors’ products, or over the extent of the resources devoted to market and support our competitors’ products, rather than our products or solutions.
Some of our competitors may have stronger relationships with our channel partners than we do and we have limited control, if any, over the sale by our distributors of our products instead of our competitors’ products, or over the extent of the resources devoted to market and support our competitors’ products, rather than our products or solutions.
In addition, if we elect not to incorporate AI into our products and services 31 offerings, we may be at a competitive disadvantage to those of our competitors who are able to effectively include AI in their products and services, which may cause our products to fail to compete effectively.
In addition, if we elect not to incorporate AI into our products and services offerings, we may be at a competitive disadvantage to those of our competitors who are able to effectively include AI in their products and services, which may cause our products to fail to compete effectively.
Alternatively, we may reject certain of these indemnity demands, which may lead to 33 disputes with a distributor, network operator or other party and may negatively impact our relationships with the party demanding indemnification or result in litigation against us.
Alternatively, we may reject certain of these indemnity demands, which may lead to disputes with a distributor, network operator or other party and may negatively impact our relationships with the party demanding indemnification or result in litigation against us.
These logistics and freight challenges and increasing costs could have a material adverse effect on our 22 ability to meet customer delivery requirements, result in increased costs and adversely affect our business, financial condition, results of operations and prospects.
These logistics and freight challenges and increasing costs could have a material adverse effect on our ability to meet customer delivery requirements, result in increased costs and adversely affect our business, financial condition, results of operations and prospects.
We generally do not require minimum purchase commitments from our channel partners, and our agreements do not prohibit our channel partners from offering products or services that compete with ours or from terminating our contract on short notice. Many of our channel partners also sell products from our competitors.
We generally do not require minimum purchase commitments from our distributors, and our agreements do not prohibit our distributors from offering products or services that compete with ours or from terminating our contract on short notice. Many of our channel partners also sell products from our competitors.
Future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other 29 obligations could require us to modify our products, restrict our business operations, increase our costs and impair our ability to maintain and grow our channel partner base and increase our revenues.
Future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations could require us to modify our products, restrict our business operations, increase our costs and impair our ability to maintain and grow our channel partner base and increase our revenues.
Sales to government agencies are subject to substantial risks, including but not limited to the following: • selling to government agencies can be highly competitive, expensive and time-consuming, often requiring significant upfront time and expense without any assurance that such efforts will generate a sale; • government entities may have statutory, contractual or other legal rights to terminate contracts with our channel partners or us for convenience or due to a default, and any such termination may adversely impact our future business, financial condition, results of operations and prospects; • U.S. or other government certification requirements applicable to our goods and services may be difficult to meet, require an additional administrative or compliance burden on us not found in our commercial contracts, and if we are unable to meet these certification requirements, our ability to sell into the government sector may be adversely impacted until we have attained required certifications; • government demand and payment for our services may be adversely impacted by public sector budgetary cycles and funding constraints; • selling to government entities may require us to comply with various regulations that are not applicable to sales to non-government entities, including regulations that may relate to pricing, classified material and other matters, or requirements regarding the development and maintenance of programs such as small business subcontracting, or compliance with 24 EEOC or environmental requirements.
Sales to government agencies are subject to substantial risks, including but not limited to the following: • selling to government agencies can be highly competitive, expensive and time-consuming, often requiring significant upfront time and expense without any assurance that such efforts will generate a sale; • government entities may have statutory, contractual or other legal rights to terminate contracts with our channel partners or us for convenience or due to a default, and any such termination may adversely impact our future business, financial condition, results of operations and prospects; • U.S. or other government certification requirements applicable to our goods and services may be difficult to meet, require an additional administrative or compliance burden on us not found in our commercial contracts, and if we are unable to meet these certification requirements, our ability to sell into the government sector may be adversely impacted until we have attained required certifications; 30 • government demand and payment for our services may be adversely impacted by public sector budgetary cycles and funding constraints; • selling to government entities may require us to comply with various regulations that are not applicable to sales to non-government entities, including regulations that may relate to pricing, classified material and other matters, other requirements relating to compliance with regulatory matters or requirements regarding the development and maintenance of programs such as small business subcontracting, or compliance with EEOC or environmental requirements.
As these regulations and standards evolve, and if new regulations or standards are implemented, we could be required to modify our products or develop and support new versions of our products, and our compliance with these regulations and standards 27 may become more burdensome.
As these regulations and standards evolve, and if new regulations or standards are implemented, we could be required to modify our products or develop and support new versions of our products, and our compliance with these regulations and standards may become more burdensome.
The laws and regulations to which we are subject include the European Union’s Restriction of Hazardous Substances Directive, or RoHS, and Waste Electrical and Electronic Equipment Directive, or WEEE, as implemented by EU member states.
The laws and regulations to which we are subject include the European Union’s Restriction of Hazardous Substances Directive ("RoHS"), and Waste Electrical and Electronic Equipment Directive ("WEEE"), as implemented by EU member states.
As a result of its controlling interest in us, Vector Capital has the power to: • control all matters submitted to our shareholders; • elect our directors; and • exercise control over our business, policies and affairs.
As a result of its controlling interest in us, Vector Capital has the power to: • control all matters submitted to our shareholders; • elect two of our directors; and • exercise control over our business, policies and affairs.
As a result, 39 shareholders would be prevented from electing an entirely new board of directors at any annual meeting and the ability of shareholders to change the membership of a majority of our board of directors may be delayed.
As a result, shareholders would be prevented from electing an entirely new board of directors at any annual meeting and the ability of shareholders to change the membership of a majority of our board of directors may be delayed.
These controls or any additional restrictions may impact our ability to export certain products to China, prohibit us from selling our products to certain of our customers or restrict our ability to use certain Integrated Circuits (ICs) in our products.
These controls or any additional restrictions may impact our ability to export certain products, prohibit us from selling our products to certain of our customers or restrict our ability to use certain Integrated Circuits ("ICs") in our products.
The GDPR imposes a range of compliance obligations on controllers regarding the processing of personal data, including among others: (i) accountability and transparency requirements, which require controllers to demonstrate and record compliance with the GDPR and to provide more detailed information to data subjects regarding processing; (ii) enhanced requirements for obtaining valid consent where consent is required; (iii) obligations to consider data protection as any new products or services are developed and to limit the amount of personal data processed; (iv) obligations to comply with data protection rights of data subjects including without limitation a right of access to and rectification of personal data, a right to obtain restriction of processing or to object to processing of personal data and a right to ask for a copy of personal data to be provided to a third party in a usable format and erasing personal data in certain circumstances; (v) obligations to implement appropriate technical and organizational security measures to safeguard personal data; and (vi) obligations to report certain personal data breaches to the relevant supervisory authority without undue delay (and no later than 72 hours where feasible) and/or concerned individuals.
The GDPR imposes a range of compliance obligations on controllers regarding the processing of personal data, including among others: (i) accountability and transparency requirements, which require controllers to demonstrate and record compliance with the GDPR and to provide detailed information to data subjects regarding processing; (ii) enhanced requirements for obtaining valid consent where consent is the lawful basis for processing; (iii) obligations to consider data protection as any new products or services are developed and to limit the amount of personal data processed; (iv) obligations to comply with data protection rights of data subjects including without limitation a right of access to and rectification of personal data, a right to obtain restriction of processing or to object to processing of personal data and a right to ask for a copy of personal data to be provided to a third party in a usable format and erasing personal data in certain circumstances; (v) obligations to implement appropriate technical and organizational security measures to safeguard personal data; and (vi) obligations to report certain personal data breaches to the relevant supervisory authority without undue delay (and no later than 72 hours where feasible) and/or to concerned individuals without undue delay.
If we are not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our business, results of operations and financial condition could be harmed. Personal privacy, data protection, information security and telecommunications-related laws and regulations have been widely adopted in the United States, Europe and in other jurisdictions where we offer our products.
If we are not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our business, results of operations and financial condition could be harmed. Personal privacy, data protection, information security and telecommunications-related laws and regulations have been widely adopted in the United States, Europe and in other jurisdictions where we sell our products.
Third parties owning such intellectual property may engage in litigation against us seeking protection of their intellectual property rights, any of which could have a material adverse effect on our business, operating results, and financial condition. Our obligations to indemnify our channel partners or end users against intellectual property infringement claims could cause us to incur substantial costs.
Third parties owning such intellectual property may engage in litigation against us seeking protection of their intellectual property rights, any of which could have a material adverse effect on our business, operating results, and financial condition. Our obligation to indemnify our channel partners or end users against intellectual property infringement claims could cause us to incur substantial costs.
Our business could be further harmed if currently unlicensed RF spectrum becomes licensed in the United States or elsewhere. Network operators that use our products may be unable to obtain licenses for RF spectrum. Even if the unlicensed spectrum remains unlicensed, existing and new governmental regulations may require we make changes in our products.
Our business could be further harmed if currently unlicensed RF spectrum becomes licensed in the United States or elsewhere. Network operators that use our products may be unable to obtain licenses for RF spectrum. Even if the unlicensed spectrum remains unlicensed, existing and new governmental regulations may require us to make changes to our products.
Issues related to the development and use of artificial intelligence (AI) could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business. We are reviewing the use of AI technology in certain of our business operations, products or services and have released AI enhanced features in cnMaestro X.
Issues related to the development and use of artificial intelligence (AI) could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business. We are reviewing the use of AI technology in certain of our business operations, products or services and have released AI enhanced features in cnMaestro X and in our support organization.
If our third-party manufacturers experience financial, operational, manufacturing capacity or other difficulties, or experience or continue to experience shortages in required components, or if they are otherwise unable or unwilling to continue to manufacture our products in required volumes or at all, our supply may be disrupted, we may be required to seek alternate manufacturers and we may be required to re-design our products.
If our third-party manufacturers experience financial, operational, manufacturing capacity or other difficulties, or if they are otherwise unable or unwilling to continue to manufacture our products in required volumes or at all, our supply may be disrupted, we may be required to seek alternate manufacturers and we may be required to re-design our products.
Our gross margin varies from period to period and may decline in the future. Our gross margin varies from period to period, may be difficult to predict and may decline in future periods.
Our gross margin varies from period to period, is difficult to predict and may decline in the future. Our gross margin varies from period to period, may be difficult to predict and may decline in future periods.
AI-related issues, deficiencies and/or failures could (i) give rise to legal and/or regulatory action, including with respect to proposed legislation regulating AI in jurisdictions such as the European Union and others, and as a result of new applications of existing data protection, privacy, intellectual property, and other laws; (ii) damage our reputation; or (iii) otherwise materially harm our business.
AI-related issues, deficiencies and/or failures could (i) give rise to legal and/or regulatory action, including with respect to current and proposed legislation regulating AI in jurisdictions such as the European Union, United States and others, and as a result of new applications of existing data protection, privacy, intellectual property, and other laws; (ii) damage our reputation; or (iii) otherwise materially harm our business.
Logistics challenges may impact our operations, for example, as a result of container shortages which may impact availability of containers and increased carriage costs, resulting in increases in relevant freight costs, all at a time when global demand has increased.
Logistics challenges may impact our operations, for example, as a result of container shortages which may impact availability of containers, and increased carriage costs, resulting in increases in relevant freight costs, all at a time when global demand may increase.
Our credit facility contains certain restrictive covenants that either limit our ability to, or require a mandatory prepayment in the event we, among other things, create or assume certain liens; create, incur or assume additional indebtedness, subject to specified permitted debt; make or hold certain investments, subject to certain exceptions; enter into certain mergers, liquidations, consolidations and other fundamental changes, subject to specified exceptions; make certain sales and other disposition of property or assets, including sale and leaseback transactions, subject to certain conditions and exceptions; make certain payments of dividends, share repurchase and other distributions, subject to certain exceptions; and enter into certain transactions with affiliates.
Our Credit Agreement with Bank of America contains certain restrictive covenants that either limit our ability to, or require a mandatory prepayment in the event we, among other things, create or assume certain liens; create, incur or assume additional indebtedness, subject to specified permitted debt; make or hold certain investments, subject to certain exceptions; enter into certain mergers, liquidations, consolidations and other fundamental changes, subject to specified exceptions; make certain sales and other disposition of property or assets, including sale and leaseback transactions, subject to certain conditions and exceptions; make certain payments of dividends, share repurchase and other distributions, subject to certain exceptions; and enter into certain transactions with affiliates.
The continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the on-going Russia and Ukraine war and tensions in the Middle East), and other events such as economic sanctions and trade restrictions may cause further disruptions to the economies of the United States and other countries and create further uncertainties or could otherwise negatively impact our business, operating results, and financial condition.
The continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the on-going Russia-Ukraine war, and tensions in the Middle East including Iran, Israel and Syria), and other events such as economic sanctions and trade restrictions may cause further disruptions to the economies of the United States and other countries and create further uncertainties or could otherwise negatively impact our business, operating results, and financial condition.
Our reliance on channel partners for sales of our products results in limited visibility into demand and channel inventory levels which in turn adversely impacts our ability to accurately forecast our future revenues.
Our reliance on distributors for sales of our products results in limited visibility into demand and channel inventory levels, which in turn adversely impacts our ability to accurately forecast our future revenues.
Vector Capital controls a majority of the voting power of our outstanding shares and as a result, we are a controlled company within the meaning of the corporate governance standards of the Nasdaq.
Vector Capital and its affiliates controls a majority of the voting power of our outstanding shares and as a result, we are a controlled company within the meaning of the corporate governance standards of the Nasdaq.
Our competitors may be more effective in providing incentives to existing and potential channel partners to favor their products or to prevent or reduce sales of our products. Our failure to establish and maintain successful relationships with our channel partners would materially and adversely affect our business, operating results and financial condition.
Our competitors may be more effective in providing incentives to existing and potential distributors to favor their products or to prevent or reduce sales of our products. Our failure to establish and maintain successful relationships with our distributors would materially and adversely affect our business, operating results and financial condition.
Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.K.
Foreign Corrupt Practices Act of 1977, as amended ("FCPA"), the U.K.
Neither we nor our third-party manufacturers carry a substantial inventory of our product components. Many of these components are also widely used in other product types. Shortages are possible and our ability to predict the availability of such components may be limited.
Neither we nor our third-party manufacturers carry a substantial inventory of our product components. Many of these components are also widely used in other product types or by other companies. Shortages are possible and our ability to predict the availability of such components may be limited.
Ruckus (CommScope), Ubiquiti, Meraki (Cisco), Extreme Networks, Aruba (HPE), Fortinet, Mist (Juniper), and Ruiji, are competitors to our Wi-Fi Access Point portfolio. Our cnMatrix wireless aware ethernet switch platform competes with Ubiquiti, MikroTik, Cisco, and HPE, among others.
Ruckus (CommScope), Ubiquiti, Cisco Meraki, Extreme Networks, HPE Aruba, Fortinet, Mist (Juniper Networks), and Ruijie NetworksS, are competitors to our Wi-Fi Access Point portfolio. Our cnMatrix wireless aware Ethernet switch platform competes with Ubiquiti, Ruckus, MikroTik, Cisco, and HPE, among others.
We are exposed to fluctuations in currency exchange rates, which could adversely affect our business, financial condition, results of operations and prospects.
Financial and accounting risks We are exposed to fluctuations in currency exchange rates, which could adversely affect our business, financial condition, results of operations and prospects.
If our channel partners do not effectively manage inventory of our products, fail to timely resell our products or overestimate expected future demand, they may reduce purchases in future periods, causing our revenues and operating results to fluctuate or decline.
If our distributors do not effectively manage inventory of our products, fail to timely resell our products or overestimate expected future demand, they may reduce purchases in future periods, causing our revenues and operating results to fluctuate or decline.
We rely on our third-party logistics and warehousing provider, with distribution hubs currently in the United States, the Netherlands and recently Vietnam, to fulfill the majority of our worldwide sales and deliver our products on a timely basis.
We rely on our third-party logistics and warehousing provider, with distribution hubs including in the United States, the Netherlands and Vietnam, to fulfill the majority of our worldwide sales and deliver our products on a timely basis.
Any decline in our gross margins could have an adverse impact on the trading price of our shares. If we are not able to effectively forecast demand or manage our inventory, we may be required to record write-downs for excess or obsolete inventory.
Any decline in our gross margins could have an adverse impact on our results of operations and the trading price of our shares. 26 If we are not able to effectively forecast demand or manage our inventory, we may be required to record write-downs for excess or obsolete inventory.
Recently, a capacity shortage coupled with an increase in demand for our affected products, due in part to a global increase in demand for bandwidth, resulted in supply shortages that caused increased lead times for some of our products.
Previous capacity shortages coupled with an increase in demand for affected products, due in part to a global increase in demand for bandwidth, resulted in supply shortages that caused increased lead times for some of our products.
Risks related to our business Our operating results can be difficult to predict and may fluctuate significantly, which could result in a failure to meet investor expectations or our guidance and a decline in the trading price of our shares. Our quarterly and annual operating results have fluctuated in the past and may fluctuate significantly in the future.
Our operating results can be difficult to predict and may fluctuate significantly, which could result in a failure to meet investor expectations or our guidance and a decline in the trading price of our shares. 19 Our quarterly and annual operating results have fluctuated in the past and may fluctuate significantly in the future.
Variations in our gross margin are generally driven by shifts in the mix of products we sell, the timing and related cost of fulfilling orders and other factors, including actions taken to reduce channel inventory or speed product delivery.
Variations in our gross margin are generally driven by shifts in the mix of products we sell, the timing and related cost of fulfilling orders and other factors, including actions taken to reduce channel inventory or speed product delivery such as increased discounts.
Risks related to ownership of our ordinary shares Because Vector Capital holds a controlling interest in us, the influence of our public shareholders over significant corporate actions will be limited. Affiliates of Vector Capital directly or indirectly own approximately 51% of our outstanding shares through their ownership of Vector Cambium Holdings (Cayman), L.P., or VCH, L.P.
Risks related to ownership of our ordinary shares Because Vector Capital holds a controlling interest in us, the influence of our public shareholders over significant corporate actions will be limited. Vector Capital and its affiliates directly or indirectly own approximately 50.1% of our outstanding shares through their ownership of Vector Cambium Holdings (Cayman), L.P., or VCH, L.P.
Although we take steps to stop counterfeits, we may not be successful and network operators who purchase these counterfeit goods may experience product defects or failures, harming our reputation and brand and causing us to lose future sales.
Although we take steps to stop counterfeits, we may not be successful and network operators who purchase these counterfeit goods may experience product defects or failures, resulting in harm to our reputation and brand and causing us to lose future sales.
We file U.S. federal income tax returns as well as income tax returns in various U.S. state and local jurisdictions and many non-U.S. jurisdictions. The United States, United Kingdom, India, Mexico, and Brazil are the main taxing jurisdictions in which we operate.
We are subject to income and non-income-based taxes in the United States and in various non-U.S. jurisdictions. We file U.S. federal income tax returns as well as income tax returns in various U.S. state and local jurisdictions and many non-U.S. jurisdictions. The United States, United Kingdom, India, Mexico, and Brazil are the main taxing jurisdictions in which we operate.
Vector Capital is not prohibited from selling its interest in us to third parties, and has sold and will continue to periodically sell its interest in us under the current effective shelf registration statements and future registration statements that are filed by us.
Vector Capital is not prohibited from selling its interest in us to third parties and has sold and will continue to periodically sell its interest in us under future registration statements that are filed by us.
We are continuing to develop and refine our disclosure controls, internal control over financial reporting and other procedures, including controls related to revenue and expense recognition, regulatory compliance issues affecting our financial results, litigation and settlements and other matters, that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
We are continuing to develop and refine our disclosure controls, internal control over financial reporting and other procedures, including controls related to revenue and expense recognition, inventory reserves, accounts receivable, regulatory compliance issues affecting our financial results, litigation and settlements and other matters, that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended (the Exchange Act) is accumulated and communicated to our principal executive and financial officers.
Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the software code.
We incorporate open source software into our products. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the software code.
Sales through distributors have been highly concentrated in a few distributors, with over 37%, 29%, and 38% of our revenues in 2021, 2022 and 2023, respectively, coming from our three largest distributors in each year. In addition, certain of our distributors may rely disproportionately on sales to a small number of end customers.
Sales through distributors have been highly concentrated in a few distributors, with over 37%, and 34% of our revenues in 2023 and 2024, respectively, coming from our three largest distributors in each year. In addition, certain of our distributors may rely disproportionately on sales to a small number of end customers.
Products that we have manufactured for us in Mexico, Taiwan or Vietnam and elsewhere may also be subject to any uncertainty of trade relations between such countries and the United States or other shipping destinations.
Products that we have manufactured for us in countries outside of the US may also be subject to any uncertainty of trade relations between such countries and the United States or other shipping destinations.
We may not be able to successfully implement improvements to these systems and processes in a timely or efficient manner, which could result in additional operating inefficiencies and could cause our costs to increase more than planned.
We may not be able to successfully implement improvements to these systems and processes in a timely or efficient manner, which could result in additional operating inefficiencies and could cause us to experience higher costs than planned.
The U.S. government continue to add additional entities, in China and elsewhere, to restricted party lists impacting the ability of U.S. companies to provide items to these entities.
The U.S. government continue to add additional entities, to restricted party lists impacting the ability of U.S. companies to provide items to these entities.
In the event of a liquidation, our lenders would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our shares would receive a portion of any liquidation proceeds only if all of our creditors, including our lenders, were first repaid in full.
In the event of a liquidation, Bank of America would be repaid the outstanding principal and interest owed to it prior to distribution of assets to unsecured creditors, and the holders of our shares would receive a portion of any liquidation proceeds only if all of our creditors, including our secured lender, were first repaid in full.
Any change in the location of our distribution hubs, such as recent changes in distribution location from China to Vietnam, and any delay in delivery of our products to distributors or network operators could create dissatisfaction, harm our reputation, result in the loss of future sales and, in some cases, subject us to penalties.
Any change in the location of our distribution hubs, and any delay in delivery of our products to distributors or network operators could create dissatisfaction, harm our reputation, result in the loss of future sales and, in some cases, subject us to penalties.
We, therefore, may not be able to engage in any of the foregoing transactions unless we obtain the consent of our lenders or prepay certain amounts under the credit facility. The credit facility also contains certain financial covenants and financial reporting requirements, amended in December 2023.
We, therefore, may not be able to engage in any of the foregoing transactions unless we obtain the consent of our lender or prepay certain amounts under the Credit Agreement. The Credit Agreement also contains certain financial covenants and financial reporting requirements.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity team is led by our Vice President, IT, who reports to our Senior Vice President, Operations. Our Vice President, IT, has an M.S. degree in computer science and 31 years of experience in the information technology industry. Our cybersecurity functions include representatives from information technology, information security, legal, impacted product teams or products and other departments as needed.
Biggest changeOur cybersecurity team is led by our Vice President, IT, who reports to our Chief Financial Officer. Our Vice President, IT, has an M.S. degree in computer science and 33 years of experience in the information technology industry.
Our board of directors addresses our cybersecurity risk management as part of its general oversight function, and the board receives periodic reports from management on the results of our tabletop exercises designed to test our response to cybersecurity and other business interruption situations.
Our board of directors addresses our cybersecurity risk management as part of its general oversight function, and the board of directors receives periodic reports from management on the results of our tabletop exercises designed to test our response to cybersecurity and other business interruption situations.
The key elements of our efforts to identify, prevent, mitigate, and remediate cybersecurity risks and incidents through our cybersecurity risk management program include: • We collect and analyze information about cybersecurity risks as part of our risk management program and monitor and discuss public alerts, threat levels, trends and remediation. • All employees receive periodic cybersecurity training and are exposed to phishing simulations designed to educate concerning the recognition of cybersecurity threats. • We use various security tools, including internal reporting, monitoring, and bug bounty programs, to identify vulnerabilities in our products. • Regular system updates and patching are done to protect our hardware and software against security vulnerabilities. 41 • We conduct simulations, drills, and penetration testing to test our defenses and monitor threat levels, including the periodic performance of simulations and tabletop exercises to test our policies, incorporating external resources and advisors as needed. • We have controls and procedures in place for prompt escalation of cybersecurity incidents and regularly evaluate and update contingency planning, including plans in the event that a portion of our information resources were to be unavailable due to a cybersecurity incident. • We partner with third-party security consultants to review our incident response process and ensure our programs align with industry standards. • We assess the cybersecurity preparedness of key vendors, review any reports on system and organizations controls, before onboarding and monitor their vulnerabilities, including any publicly reported vulnerabilities.
The key elements of our efforts to identify, prevent, mitigate, and remediate cybersecurity risks and incidents through our cybersecurity risk management program include: • We collect and analyze information about cybersecurity risks as part of our risk management program and monitor and discuss public alerts, threat levels, trends and remediation. • All employees receive periodic cybersecurity training and are exposed to phishing simulations designed to educate concerning the recognition of cybersecurity threats. • We use various security tools, including internal reporting, monitoring, and bug bounty programs, to identify vulnerabilities in our products. • Regular system updates and patching are done to protect our hardware and software against security vulnerabilities. • We conduct simulations, drills, and penetration testing to test our defenses and monitor threat levels, including the periodic performance of simulations and tabletop exercises to test our policies, incorporating external resources and advisors as needed. • We have controls and procedures in place for prompt escalation of cybersecurity incidents and regularly evaluate and update contingency planning, including plans in the event that a portion of our information resources were to be unavailable due to a cybersecurity incident. • We partner with third-party security consultants to review our incident response process and ensure our programs align with industry standards. • We assess the cybersecurity preparedness of key vendors, review any reports on system and organizations controls, before onboarding and monitor their vulnerabilities, including any publicly reported vulnerabilities.
See “Risk Factors - Cyber-attacks, data breaches or malware may disrupt our operations, harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business; and cyber-attacks or data breaches on our customers’ networks, or in cloud-based services provided by or enabled by us, could result in claims of liability against us, damage our reputation or otherwise materially harm our business” and “-Vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services or solutions could result in claims of liability against us, damage our reputation, or otherwise materially harm our business.” Cybersecurity Governance Cybersecurity risk is part of management's risk oversight, although periodic reports are made to the board of directors of management's implementation and monitoring of our cybersecurity risks programs.
See “Risk Factors - Cyber-attacks, data breaches or malware may disrupt our operations, harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business; and cyber-attacks or data breaches on our customers’ networks, or in cloud-based services provided by or enabled by us, could result in claims of liability against us, damage our reputation or otherwise materially harm our business” and “-Vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy 45 vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services or solutions could result in claims of liability against us, damage our reputation, or otherwise materially harm our business.” Cybersecurity Governance Cybersecurity risk is part of management's risk oversight, although periodic reports are made to the board of directors of management's implementation and monitoring of our cybersecurity risks programs.
Management will update the board, as necessary, regarding any significant cybersecurity incidents should they occur, following the controls and procedures laid out in our business continuity, disaster recovery, data breach and crisis management plans that are designed to ensure prompt escalation of certain cybersecurity incidents, so that decisions regarding public disclosure and reporting of such incidents can be made by management and the board in a timely manner.
Management will update the board, as necessary, regarding any significant cybersecurity incidents should they occur, following the controls and procedures laid out in our business continuity, disaster recovery, data breach and crisis management plans that are designed to ensure prompt escalation of certain cybersecurity incidents, so that decisions regarding public disclosure and reporting of such incidents can be made by management and the board of directors in a timely manner.
This team reviews enterprise risk management-level and product-based cybersecurity risks. This team is responsible for assessing and managing our material risks from cybersecurity threats and our overall cybersecurity risk management program, and supervises both our internal cybersecurity personnel and any retained external cybersecurity consultants. 42
Our IT group, led by our Vice President, IT, is responsible for assessing and managing our material risks from cybersecurity threats and our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and any retained external cybersecurity consultants . 46
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Our cybersecurity risk management is aided by the rest of the information technology and information security team reporting to our Vice President, IT, members of our product development team who advise on any impacted products, legal as required to review notice and other requirements, and other departments as needed.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties. As of December 31, 2023, we occupied approximately 38,000 square feet of office space in Rolling Meadows, Illinois under an operating lease agreement where we have corporate and executive functions, research and development, customer support, operations and administration and finance services.
Biggest changeItem 2. Pr operties. We occupy approximately 37,000 square feet of office space in Hoffman Estates, Illinois under an operating lease agreement where we have corporate and executive functions, research and development, customer support, operations and administration and finance services. In addition to our headquarters in Hoffman Estates, we lease additional space in the United States in San Jose, California.
For additional information regarding obligations under operating leases, see Note 14 - Leases in the Notes to the Consolidated Financial Statements included in Part II, Item 8: “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Leases in the Notes to the Consolidated Financial Statements included in Part II, Item 8: “Financial Statements and Supplementary Data” of this Comprehensive Form 10-K.
We believe our facilities are adequate and suitable for our current needs and that should it be needed, suitable additional or alternative space will be available to accommodate our operations. Our office lease for our headquarters in Rolling Meadows, Illinois expires on March 31, 2024.
We believe our facilities are adequate and suitable for our current needs and that should it be needed, suitable additional or alternative space will be available to accommodate our operations. For additional information regarding obligations under operating leases, see Note 16.
Removed
In addition to our headquarters in Rolling Meadows, we lease additional space in the United States, including San Jose, California and Thousand Oaks, California. We also lease office space in various other international geographic locations, including Ashburton, England and Bangalore, India. In addition, we lease sales office space in Miami, Florida, Italy, Dubai, Mexico, Spain and Singapore.
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We also lease office and laboratory space in Ashburton, England and Bangalore, India, as well as small office space in various locations globally, including Mexico City, Mexico, Barcelona, Spain, South Africa and Singapore.
Removed
We signed a lease agreement in 2023 for approximately 37,000 square feet of office and laboratory space in Hoffman Estates, Illinois and expect to move our corporate and executive headquarters and certain research and development, customer support, operations and administration and finance activities to these new offices in the first half of 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. 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.
Biggest changeOur 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 from third parties that we infringe their intellectual property rights, particularly in the Wi-Fi space.
However, our estimates may be incorrect and we could ultimately incur more or less than the amounts initially recorded. We are not currently aware of any pending or threatened litigation that would have a material adverse effect on our financial statements. Item 4. Mine Saf ety Disclosures. Not applicable. 43 PART II
However, our estimates may be incorrect, and we could ultimately incur more or less than the amounts initially recorded. We are not currently aware of any pending or threatened litigation that would have a material adverse effect on our financial statements. Item 4. Mine Saf ety Disclosures. Not applicable. 47 PART II
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We have in the past received and expect to continue to receive claims by third parties that we infringe their intellectual property rights.
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Item 3. Legal Proceedings. Third parties may from time to time assert legal claims against us. Shareholder lawsuit On May 22, 2024, a putative shareholder class action complaint was filed in the United States District Court for the Northern District of Illinois (Hamby v.
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Cambium Networks Corporation et al, Case No. 1:24-cv-04240) against us and three of our current or former officers.
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The complaint purported to assert claims under Section 10(b) of the Exchange Act, Exchange Act Rule 10b-5, and Section 20(a) of the Exchange Act, on behalf of persons and entities who acquired our ordinary shares between May 8, 2023 and January 18, 2024 ("Class Period").
Added
The complaint alleged that, during the Class Period, the Company and certain of its executive officers made false and misleading statements and failed to disclose material adverse facts about its business, operations, and prospects in violation of Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Exchange Act. The plaintiffs sought damages in an unspecified amount.
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On December 4, 2024, the plaintiffs filed a voluntary dismissal of the action without prejudice.
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Other claims We have in the past and may again in the future be subject to securities class action lawsuits asserting claims under Section 10(b) of the Exchange Act, Exchange Act Rule 10b-5, and Section 20(a) of the Exchange Act, on behalf of persons and entities who acquired our ordinary shares during specified class periods and alleging that the Company and/or certain of its executive officers have made false and misleading statements and failed to disclose material adverse facts about our business, operation, and prospects in violation of Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Exchange Act.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeBecause many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. The closing price of our ordinary shares on December 29, 2023 was $6.00 per share as reported on the NASDAQ Global Market. Recent sale of unregistered securities None.
Biggest changeHolders of record As of March 30, 2026, there were 115 shareholders of record of our ordinary shares. Because many of our shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. Recent sale of unregistered securities None.
Item 5. Market for Registrant’s Common Equity, Related S hareholder Matters and Issuer Purchases of Equity Securities. Market information Our ordinary shares have been listed on the NASDAQ Global Market under the symbol “CMBM” since June 26, 2019. Holders of record As of December 31, 2023, there were 135 shareholders of record of our ordinary shares.
Item 5. Market for Registrant’s Common Equity, Related S hareholder Matters and Issuer Purchases of Equity Securities. Market information Our ordinary shares were listed on the NASDAQ Global Market under the symbol “CMBM” from June 26, 2019 to March 26, 2026.
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We do not anticipate paying cash dividends on our ordinary shares for the foreseeable future.
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Our ordinary shares were delisted from Nasdaq on March 27, 2026 and are now traded on the OTC Expert Market tier. As a result, public access to bid and ask prices and trading volume information became restricted, and most investors are not able to easily trade our ordinary shares during this period.
Removed
Equity compensation plan information Information regarding the securities authorized for issuance under our equity compensation plans will be included in our Proxy Statement relating to our 2024 annual meeting of Shareholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 and is incorporated herein by reference.
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Despite these developments, our ordinary shares remains tradable, with pricing information accessible to brokers and market makers. We are actively working to complete and file all required periodic reports to regain compliance with our Exchange Act reporting obligations. We intend to reapply for listing on Nasdaq as soon as we become current in our SEC filings.
Removed
Issuer purchase of equity securities None. 44 Performance graph Notwithstanding any statement to the contrary in any of our filings with the SEC, the following information shall not be deemed “filed” with the SEC or “soliciting material” under the Securities Exchange Act of 1934 and shall not be incorporated by reference into any such filings irrespective of any general incorporation language contained in such filing.
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Our ordinary shares are currently traded on the OTC Expert Market under the symbol “CMBMF.” The last reported sale price of our ordinary shares on the OTC Expert Market on March 30, 2026 was $0.13.
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The following graph compares the total cumulative shareholder return on our ordinary shares with the total cumulative return of the Russell 3000 Index and the NASDAQ Composite Index during the period commencing on June 26, 2019, the initial trading day of our ordinary shares, and ending on December 31, 2023.
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Deficiency notice disclosure The Company did not timely file its Annual Report on Form 10-K for the year ended December 31, 2024, or Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025 and September 30, 2025 (collectively, the “Delayed Reports”), as required by Sections 13(a) and 15(d) of the Securities Act of 1934 and Rules 13a-1 and 13a-13 thereunder.
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The graph assumes that $100 was invested at the beginning of the period in our ordinary shares and in each of the comparative indices, and the reinvestment of any dividends.
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In addition, the Company is restating select financial results previously filed in its Annual Report on Form 10-K for the year ended December 31, 2023, and in the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024.
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Historical share price performance should not be relied upon as an indication of future share price performance. 6/26/2019 6/28/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/30/2020 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/30/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Cambium Networks Corporation 100.00 98.87 100.00 90.10 52.06 75.88 173.92 258.56 481.65 498.45 373.09 264.23 243.71 151.03 174.43 223.40 182.68 156.91 75.57 61.86 Russell 3000 (TR) 100.00 101.26 102.44 111.75 89.74 107.87 117.80 135.10 143.67 155.51 155.35 169.77 160.80 133.95 127.97 137.16 147.01 159.34 154.15 172.76 NASDAQ Composite (TR) 100.00 101.23 101.41 114.05 99.07 128.50 142.94 165.28 170.16 186.63 186.20 201.94 183.87 142.91 137.32 136.23 159.46 180.27 173.17 197.05 Item 6.
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This Comprehensive Form10-K includes updated disclosures for the periods covered. In addition, the Company failed to hold an annual general meeting of shareholders during 2025, as required by Nasdaq Listing Rule 5620(a), which requires all listed companies to hold an annual shareholder meeting within one year of the end of their fiscal year.
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We do not anticipate paying cash dividends on our ordinary shares for the foreseeable future. Equity compensation plan information Information regarding the securities authorized for issuance under our equity compensation plans for the year ended December 31, 2024 is included in Part III, Items 10 through 14 included in this Comprehensive Form 10-K. Issuer purchase of equity securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the year ended December 31, 2023, our income tax (benefit) provision changed by $16.0 million from the year ended December 31, 2022 primarily due to a change to our income tax benefit at the U.S. statutory tax rate of $13.4 million in 2023 versus a tax expense of $3.8 million in 2022, a tax expense due to an increase in the valuation allowance of $34.5 million primarily as a result of the recognition of a valuation allowance on the UK loss and a tax benefit of $1.9 million on revaluation of UK deferred tax assets at a higher rate.
Biggest changeThe effective tax rate differed from the U.S. statutory rate of 21.0% primarily due to a pretax loss, the net increase in the valuation allowance of $12.3 million, a foreign tax rate differential of $(2.5) million, $2.7 million return to provision adjustment primarily due to a tax method change in the U.S. 2023 tax return related to the tax capitalization of our research and development expenditures, $1.5 million for establishment of a deferred tax liability for withholding tax on non-permanent investment in subsidiaries, a $1.2 million tax expense related to share-based compensation, and a benefit on research and development credits of $(0.3) million.
Personnel costs are the primary component of each of these operating expense categories, which consist of personnel 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.
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.
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.
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.
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 typically have a downward effect on our overall gross margins.
Because the ratio of CPE to PTP and PMP access points typically increases as network operators build out the 51 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.
Additionally, the Second Amendment provides that, during the Covenant Relief Period, (x) the Applicable Rate of interest being incurred on any outstanding Loans is increased to 3.25% per annum for Term SOFR Loans and 2.25% per annum for Base Rate Loans, (y) the commitment fee for undrawn commitments is increased to 0.35% and (z) the ability of the Loan Parties to make certain Investments, Dispositions and Restricted Payments, in each case, is limited as more fully set forth in the Amended Credit Agreement.
The Second Amendment also provided that, during the Covenant Relief Period, (x) the Applicable Rate of interest being incurred on any outstanding Loans is increased to 3.25% per annum for Term SOFR Loans and 2.25% per annum for Base Rate Loans, (y) the commitment fee for undrawn commitments is increased to 0.35% and (z) the ability of the Loan Parties to make certain Investments, Dispositions and Restricted Payments, in each case, is limited as more fully set forth in the Amended Credit Agreement.
The following discussion and analysis of financial condition and results of operations was prepared to provide the reader with a view and perspective of our business through the eyes of management and 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 Annual Report on Form 10-K.
The following discussion and analysis of financial condition and results of operations was prepared to provide the reader with a view and perspective of our business through the eyes of management and 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 Comprehensive Form 10-K.
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.
Recognition of 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 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.
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, resulting in a decrease in visibility to customer demand.
Goodwill Goodwill is tested for impairment annually on December 31 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of our one reporting unit below its carrying amount.
Goodwill and long-lived assets recoverability and impairment assessment Goodwill is tested for impairment annually on December 31 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of our one reporting unit below its carrying amount.
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materiality from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly those discussed under Part I, Item 1A.
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Comprehensive Form 10-K, particularly those discussed under Part I, Item 1A.
We outsource our manufacturing to third-party manufacturers located primarily in Mexico, Vietnam, Israel and Taiwan. Cost of revenues also includes costs associated with supply operations, including personnel related and allocated overhead costs, provision for excess and obsolete inventory, third-party license costs and third-party costs related to services we provide.
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.
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.
Any prolonged economic disruptions, continued uncertainty over global trade wars, as well as further deterioration in the global economy or outbreaks of international hostilities could have a negative impact on demand from our customers in future periods.
The determination of excess or obsolete inventory is estimated based on a comparison of the quantity and cost of inventory on hand to our forecast of customer demand, and in consideration of historical usage and requires significant management judgment.
Inventory valuation The valuation of inventory requires us to estimate excess or obsolete inventory. The determination of excess or obsolete inventory is estimated based on a comparison of the quantity and cost of inventory on hand to our forecast of remaining lifetime demand, consideration of historical sales or usage and requires significant management judgment.
Cost of revenues also includes amortization of capitalized software costs associated with products marketed to be sold. Gross profit has been and will continue to be affected by various factors, including changes in product mix.
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.
Cash flows from investing activities Our investing activities for both periods presented consisted of capital expenditures for property, equipment and software in support of the growth of our business.
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.
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 and other factors. We expect our gross margins will fluctuate from period to period depending on the interplay of these various factors.
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.
See Note 11 - Income taxes in the Notes to the Consolidated Financial Statements for more information related to income taxes. Liquidity and Capital Resources As of December 31, 2023, we had a cash balance of $18.7 million.
See Note 13. Income taxes in the Notes to the consolidated financial statements for more information related to income taxes. Liquidity and Capital Resources As of December 31, 2024, we had a cash balance of $34.9 million, an increase of $16.2 million from December 31, 2023.
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 have moved manufacturing to other locations, which could cause disruptions in our supply operations.
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.
The Second Amendment amends the Existing Credit Agreement by, among other things, establishing a covenant relief period, which began on December 31, 2023 and ends on November 30, 2024, ("Covenant Relief Period") during which time we are (a) required to maintain certain Liquidity as provided in the Amended Credit Agreement, (b) required to maintain certain levels of Consolidated EBITDA as provided in the Amended Credit Agreement, (c) required to provide certain additional financial reporting to the Administrative Agent and (d) not required to meet (or, during such period, test) our Consolidated Leverage Ratio or Consolidated Fixed Charge Coverage Ratio.
The Second Amendment amended the Existing Credit Agreement by, among other things, establishing a covenant relief period which began on December 31, 2023 and ended on November 30, 2024 ("Covenant Relief Period") during which time we were required to (a) maintain certain Liquidity as provided in the Amended Credit Agreement, (b) maintain certain levels of Consolidated EBITDA as provided in the Amended Credit Agreement, and (c) provide certain additional financial reporting.
Depreciation and amortization Depreciation and amortization expense consist of depreciation related to fixed assets such as computer equipment, furniture and fixtures, and testing equipment, as well as amortization related to acquired and internal use software and definite lived intangibles.
Depreciation and amortization Depreciation and amortization expense consist of depreciation related to fixed assets such as computer equipment, furniture and fixtures, and testing equipment, as well as amortization related to acquired and internal use software and definite lived intangibles. Impairment Impairment expense consists of amounts recorded to impair our goodwill, customer relationship intangible, software and long-lived assets.
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.
Critical accounting estimates Our consolidated financial statements 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.
Cash flows from financing activities Net cash provided by financing activities of $1.2 million for 2022 was primarily due to $2.2 million in proceeds received from the exercise of share options and $2.0 million in proceeds received from the issuance of ordinary shares under our employee share purchase program offset by $2.0 million repayment of principal due under the term loan facility and $1.0 million for taxes paid from shares withheld in net settlement of taxes due on vesting of restricted shares issued to our employees. 53 Net cash used in financing activities of $1.3 million for 2023 was primarily due to principal payments of $2.6 million on our term loan and $0.7 million of taxes paid on net share settlement of equity awards and a $0.1 million payment of debt issuance costs incurred with our entry into the Amended Credit Agreement.
Cash flows from financing activities Net cash used in financing activities of $1.3 million for 2023 was primarily due to principal payments of $2.6 million on our term loan and $0.7 million of taxes paid on net share settlement of equity awards and a $0.1 million payment of debt issuance costs incurred with our entry into the Amended Credit Agreement.
Variable consideration estimates are continuously assessed such that is probable that a significant reversal of revenue will not occur. We recognize revenues on extended warranty on a straight-line basis over the term of the extended warranty. We recognize subscription services revenue ratably over the term in which the services are provided and our performance obligation is satisfied.
We recognize revenues on extended warranty on a straight-line basis over the term of the extended warranty. We recognize subscription services revenue ratably over the term in which the services are provided and our performance obligation is satisfied.
The Subscription and Services portfolio includes network planning and design as well as 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 wireless network.
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.
The changes in operating assets and liabilities consisted primarily of a $32.0 million decrease in accounts receivable due to lower revenues, along with $12.5 million increase in accrued liabilities, mostly related to the increase in customer reserves and liability associated with the loss on supplier commitment, $6.7 million increase in other assets and liabilities, mostly driven by an increase in deferred revenues and $5.3 million decrease in prepaid expenses due to lower prepayments made to suppliers to procure inventory offset by a $26.4 million increase in inventories, mostly due to lower enterprise revenues due to high channel inventories, $13.6 million decrease in accounts payable due to timing of purchases and payments, and $2.2 million decrease in accrued employee compensation mostly due to lower accruals for our corporate bonus and sales incentive programs as a result of failure to meet metrics underlying our incentive compensation payable to employees.
The changes in operating assets and liabilities consisted primarily of a $37.4 million decrease in accounts receivable due to lower revenues, $13.2 million increase in other assets and liabilities, mostly due to an increase in noncurrent loss on supplier commitment liability and $2.0 million decrease in prepaid expenses, offset by a $27.8 million increase in inventories, mostly due to lower revenue, $13.0 million decrease in accounts payable due to timing of purchases and payments, and $2.0 million decrease in accrued employee compensation mostly due to lower accruals for our corporate bonus and sales incentive programs as a result of failure to meet metrics underlying our incentive compensation payable to employees.
We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met and is measured based on the consideration to which we expect to be entitled based on customer contracts.
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 to based on customer contracts.
We regularly evaluate our exposure for inventory write-downs, and the adequacy of our liability for purchase commitments. 55 Income taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our consolidated financial statements.
Any adjustments to the valuation of inventory are included in cost of revenues. Income taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our consolidated financial statements.
We first perform a qualitative triggering event assessment which considers significant events and circumstances including the excess of prior year estimates of fair value compared to carrying amount, historical trends and current results, assumptions regarding future performance, operating income or cash flows, strategic initiatives and overall economic factors, including significant negative market or industry trends and macro-economic developments, and sustained declines in our share price or market capitalization, considered in both absolute terms and relative to peers to determine whether any of these may indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value.
We consider significant events and circumstances including the excess of prior estimates of fair value compared to carrying amount, historical trends and current results, assumptions regarding future performance, operating income or cash flows, 60 strategic initiatives and overall economic factors, including significant negative market or industry trends and macroeconomic developments, and sustained declines in our share price or market capitalization, considered in both absolute terms and relative to peers.
Cash Flows The following table sets forth summarized cash flow data for the periods indicated (in thousands): Years Ended December 31, 2022 2023 Cash used in operating activities $ (3,054 ) $ (16,952 ) Cash used in investing activities $ (9,245 ) $ (11,225 ) Cash provided by (used in) financing activities $ 1,245 $ (1,269 ) Cash flows from operating activities Net cash used in operating activities for 2022 of $3.1 million consisted primarily of net income of $20.2 million, adjustments for depreciation and amortization of $7.9 million, share-based compensation expense of $10.7 million and increase in provision for inventory excess and obsolescence of $3.7 million offset by a $5.2 million increase in deferred income taxes along with changes in operating assets and liabilities that resulted in net cash outflows of $40.3 million.
Cash Flows The following table sets forth summarized cash flow data for the periods indicated (in thousands): Year Ended December 31, 2023 2024 (Restated) Cash used in operating activities $ (16,696 ) $ (14,975 ) Cash used in investing activities $ (11,481 ) $ (11,898 ) Cash (used in) provided by financing activities $ (1,269 ) $ 43,183 Cash flows from operating activities Net cash used in operating activities for 2023 of $16.7 million consisted primarily of net loss of $74.1 million, adjustments for non-cash charges for depreciation and amortization of $9.4 million, share-based compensation expense of $11.6 million and increase in provision for inventory excess and obsolescence of $14.1 million, $12.8 million decrease in deferred income taxes and $0.5 million 58 increase in allowance for credit losses offset by $0.1 million reduction in warranty reserve, along with changes in operating assets and liabilities that resulted in net cash inflows of $9.2 million.
The BofA Credit Agreement allows for total borrowings of $75.0 million, which includes a $30.0 million term loan and a revolving loan of $45.0 million. On November 17, 2021, we borrowed the entire $30.0 million term loan. As of December 31, 2023, we had $25.4 million outstanding principal debt on our term loan, including the current portion of $3.3 million.
The Credit Agreement allows for total borrowings of $75.0 million, which includes a $30.0 million term credit facility and a revolving credit facility of $45.0 million. On November 17, 2021, we borrowed the entire $30.0 million term loan.
These outflows are partially offset by $1.7 million in proceeds from the issuance of ordinary shares under our employee share purchase program and $0.5 million of proceeds received from the exercise of share options. Debt On November 17, 2021, we established a new credit facility with Bank of America ("BofA Credit Agreement").
These outflows are partially offset by $1.7 million in proceeds from the issuance of ordinary shares under our employee share purchase plan and $0.5 million of proceeds received from the exercise of share options.
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 47 capitalized development cost upon commercial release, generally over three years and is included in cost of revenues.
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.
On December 29, 2023, we entered into the Second Amendment to our Credit Agreement (the "Second Amendment"), which amends the credit agreement, dated as of November 17, 2021 (the "BofA Credit Agreement", the BofA Credit Agreement as amended prior to the date of the Second Amendment, the "Existing Credit Agreement", and the Existing Credit Agreement, as amended by the Second Amendment, the "Amended Credit Agreement") with Bank of America, N.A., as Administrative Agent, a Lender, Swingline Lender and and L/C Issuer and the other Lenders party thereto from time to time.
Debt On November 17, 2021, we established a new credit facility (the "Credit Agreement") with Bank of America N.A., as Administrative Agent, a Lender, Swingline Lender and an L/C Issuer and the other Lenders party thereto from time to time ("Bank of America").
It provides a single, centralized view of all network devices, including wired and wireless broadband and Enterprise, as well as real-time performance and usage data, and allows users to make changes to the network configuration and settings.
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.
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.
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.
Interest expense, net Years ended December 31, Change (dollars in thousands) 2022 2023 $ % Interest expense, net $ 1,977 $ 2,521 $ 544 27.5 % Interest expense increased $0.5 million, or 27.5% from $2.0 million in 2022 to $2.5 million in 2023.
Interest expense, net Year Ended December 31, Change (dollars in thousands) 2023 2024 $ % (Restated) Interest expense, net $ 2,521 $ 5,843 $ 3,322 131.8 % Interest expense increased $3.3 million, or 131.8% from $2.5 million in 2023 to $5.8 million in 2024.
Research and development In addition to personnel-related costs, research and development expense consists of costs associated with design and development of our products, product certification, travel, recruiting and shared facility and shared IT costs. We generally recognize research and development expense as incurred.
In 2024, we recorded impairment of goodwill, intangibles and long-lived assets and this is separately disclosed in the statements of operations. Research and development 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.
For the year ended December 31, 2022, the Company’s effective tax rate of (12.1)% differed from the U.S. statutory rate of 21.0% primarily due to research and development tax credits of $2.8 million, a benefit on Foreign Derived Intangible Income of $2.3 million, and a tax benefit of $0.9 million on revaluation of the UK deferred tax assets at a higher tax rate.
The effective tax rate differed from the U.S. statutory rate of 21.0% primarily due to a pretax loss, the net increase in the valuation allowance of $37.3 million, a tax benefit on Foreign Derived Intangible Income of $2.9 million, and a benefit on research and development credits of $2.4 million.
Overview Cambium Networks is a global technology company that designs, develops, and manufactures wireless and fiber broadband and enterprise networking infrastructure solutions for a wide range of applications, including broadband access, wireless backhaul, IoT, public safety communications, and Wi-Fi access. Our products are used by businesses, governments, and service providers to build, expand and upgrade broadband networks.
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.
Revenues increased in our point-to-point product category, mostly in North America, as a result of increased demand for defense products for federal governments.
PTP revenues decreased across all regions, mostly driven by decreased revenues in North America as a result of decreased demand for defense products for federal governments.
For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1, Description of Business and Summary of Significant Accounting Policies , in the Notes to Consolidated Financial Statements. Recognition of revenues Our revenues are generated primarily from the sale of hardware products, with essential embedded software.
For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1. Description of Business and Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Comprehensive Form 10-K.
On December 29, 2023, we entered into the Second Amendment to our Credit Agreement (the "Second Amendment"), which amends the BofA Credit Agreement (the BofA Credit Agreement as amended prior to the date of the Second Amendment, the "Existing Credit Agreement", and the Existing Credit Agreement, as amended by the Second Amendment, the "Amended Credit Agreement") with Bank of America, N.A., as Administrative Agent, a Lender, Swingline Lender and an L/C Issuer and the other Lenders party thereto from time to time.
On December 29, 2023, we entered into the Second Amendment to our Credit Agreement (the "Second Amendment"), which amended the Credit Agreement (the Credit Agreement as amended prior to the date of the Second Amendment, the "Existing Credit Agreement", and the Existing Credit Agreement, as amended by the Second Amendment, the "Amended Credit Agreement").
(Benefit) provision for income taxes Years ended December 31, Change (dollars in thousands) 2022 2023 $ % (Benefit) provision for income taxes $ (2,183 ) $ 13,774 $ 15,957 (731.0 )% Effective income tax rate (12.1 )% (21.6 )% Our tax provision changed from a tax benefit of ($2.2) million in 2022 to a tax provision of $13.8 million for 2023.
Provision for income taxes Year Ended December 31, Change (dollars in thousands) 2023 2024 $ % (Restated) Provision (benefit) for income taxes $ 17,468 $ (1,854 ) $ (19,322 ) (110.6 )% Effective income tax rate (30.9 )% 2.4 % Our tax provision changed from a tax provision of $17.5 million in 2023 to a tax benefit of $1.9 million for 2024.
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, including IEEE 802.11 and 3GPP (Third Generation Partnership Program) and frequency bands, including licensed, unlicensed, and lightly licensed spectrum, and fiber products.
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.
These increases were offset by $0.9 million lower insurance expense in 2023. Depreciation and amortization Depreciation and amortization expense increased $0.2 million, or 4.2%, from $6.0 million in 2022 to $6.2 million in 2023.
Depreciation and amortization Depreciation and amortization expense decreased $0.7 million, or 11.7%, from $6.2 million in 2023 to $5.4 million in 2024.
For a detailed discussion of our credit facilities, refer to Note 6, Debt, in Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
Absent acceleration of payment, our term loan facility and revolving credit facility matures on November 17, 2026, at which time the outstanding principal and interest will be due. For a detailed discussion of our current credit facilities, refer to Note 7. Debt in Notes to Consolidated Financial Statements in Item 8 of Part II of this Comprehensive Form 10-K.
Our revenues also include limited amounts for software products, extended warranty on hardware products and subscription services. Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for those products.
Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for those products. We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met.
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. As of December 31, 2023, we had $25.4 million outstanding principal debt on our term loan, including the current portion of $3.3 million.
We continue to focus on cost management, operating efficiency and efficient 57 discretionary spending. We expect to regularly assess our liquidity needs and market conditions and may raise additional equity or seek alternative sources of financing if and when our board of directors determines that doing so is in our best interest.
Sales and marketing Sales and marketing expense decreased $1.9 million, or 4.2%, from $44.5 million in 2022 to $42.6 million in 2023. As a percentage of revenues, sales and marketing expense increased from 15.0% in 2022 to 19.3% in 2023.
Sales and marketing Sales and marketing expense decreased $6.2 million, or 14.4%, from $42.9 million in 2023 to $36.7 million in 2024.
We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement. Certain of our contracts have multiple performance obligations for which we allocate the transaction price to each performance obligation based on the standalone selling price of each distinct product or service in the contract.
We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement. 59 Our distributors are allowed certain price adjustments in the form of stock rotation rights and customer incentives. In determining the transaction price, we consider stock rotation rights and customer incentives to be forms of variable consideration.
Net cash used in operating activities for 2023 of $17.0 million consisted primarily of net loss of $77.4 million, adjustments for depreciation and amortization of $9.4 million, share-based compensation expense of $11.6 million and increase in provision for inventory excess and obsolescence of $16.6 million and a $9.1 million decrease in deferred income taxes along with changes in operating assets and liabilities that resulted in net cash inflows of $14.3 million.
Net cash used in operating activities for 2024 of $15.0 million consisted primarily of net loss of $74.5 million, adjustments for non-cash charges for depreciation and amortization of $10.0 million, share-based compensation expense of $9.8 million, a $9.0 million impairment charge related to goodwill, a $8.8 million impairment charge related to property and equipment, a $6.6 million impairment charge related to definite-lived intangibles, $1.1 million impairment charge related to both internal use and externally sold software and $0.1 million impairment charge for right-of-use operating lease assets along with a $6.0 million increase in provision for inventory excess and obsolescence, $1.5 million increase on the recognition of a deferred tax liability, $0.9 million increase in the provision for estimated credit losses and $0.1 million of other non-cash charges, along with changes in operating assets and liabilities that resulted in net cash inflows of $5.7 million.
Revenues are adjusted for variable consideration amounts, including but not limited to estimated stock returns, discounts, rebates and cooperative marketing allowances that we provide to distributors. Our revenue was impacted in the fourth quarter of 2024 by $11.0 million of incentives, mostly related to enterprise products, offered to distributors to help reduce channel inventories.
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.
The decrease in sales and marketing expense was primarily due to $3.4 million lower variable compensation expense due to lower revenues along with $0.2 million lower homologation and regulatory testing expense and $0.2 million lower trade show and marketing-related spend.
The decrease in sales and marketing expense was primarily due to $3.6 million lower employee-related expense, mostly due to decreased headcount from the reductions completed in 2023, $1.0 million lower outside contractor spend, $0.9 million lower trade show and marketing-related spend, and $0.8 million lower share-based compensation expense due to lower headcount.
As of December 31, 2023, we had $45.0 million available under our revolving credit facility, with no amounts drawn thereunder. For 2022 and 2023, in accordance with the terms of our credit facility with Bank of America, all quarterly principal and interest payments have been made.
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 year ended December 31, 2024, all quarterly principal and interest payments were made in accordance with the terms of the Amended Credit Agreement.
The decrease in revenues in North America was driven mostly by decreased enterprise revenues due to lower demand as a result of high levels of inventory in the channels, higher levels of stock rotation and increased discounting, mostly offset by higher PTP revenues as a result of higher demand for defense products.
The decrease was primarily due to our point-to-point product category, mostly in North America, partially as a result of decreased demand for defense products for the U.S. federal government. Revenues also decreased in our point-to-multi-point product category primarily driven by decreased demand for our 28 GHz products.
Cost of revenues and gross margin Years ended December 31, Change (dollars in thousands) 2022 2023 $ % Cost of revenues $ 151,759 $ 151,364 $ (395 ) (0.3 )% Gross margin 48.9 % 31.3 % (1760) bps Cost of revenues decreased $0.4 million, or 0.3%, from $151.8 million for 2022 to $151.4 million for 2023.
Cost of revenues and gross margin Year Ended December 31, Change (dollars in thousands) 2023 2024 $ % (Restated) Product $ 141,315 $ 106,147 $ (35,168 ) (24.9 )% Gross margin 32.1 % 32.7 % 60 bps Subscriptions and services $ 8,613 $ 8,208 $ (405 ) (4.7 )% Gross margin 53.8 % 57.9 % 410 bps 55 Cost of revenues for products decreased $35.2 million, or 24.9%, from $141.3 million for 2023 to $106.1 million for 2024.
We continue to monitor the impact of macroeconomic factors, including a potential global recession, inflationary pressures, and growing political tensions as a result of the Russia-Ukraine conflict, the recent rapidly accelerating conflict in Israel and Gaza, and 46 escalating tensions between China and Taiwan, and associated tensions between the U.S. and China.
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.
Research and development expense increased mainly due to $3.4 million higher employee-related expense due to increased headcount, $2.0 million of restructuring expenses incurred in 2023, $0.7 million higher outside contractor spend, $0.5 million higher shared lease and IT expenses due to increase in leased space and headcount and $0.2 million higher travel-related expense.
Research and development expense decreased mainly due to $6.3 million lower employee-related expense, mostly due to decreased headcount from the reductions completed in 2023, $2.5 million lower outside contractor spend and $1.4 million lower engineering material spend due to fewer projects, $1.5 million lower restructuring expense as most restructuring occurred in 2023, $0.9 million lower share-based compensation expense due to the lower headcount, $0.5 million higher research and development tax credit, $0.4 million lower homologation and regulatory spend due to the timing and number of projects and $0.4 million lower lease expense and $0.3 million lower travel-related expense due to restrictions place on business travel in 2024.
General and administrative General and administrative expense increased $2.4 million, or 9.7%, from $25.0 million in 2022 to $27.4 million in 2023. As a percentage of revenues, general and administrative expense increased from 8.4% in 2022 to 12.5% in 2023.
General and administrative General and administrative expense decreased $2.1 million, or 7.3%, from $28.1 million in 2023 to $26.0 million in 2024.
The changes in operating assets and liabilities consisted primarily of a $27.0 million increase in inventories due to management's plan to build inventory in response to supply chain constraints, $12.9 million increase in accounts receivable reflecting higher sales and the timing of collections, and $8.9 million decrease in accrued employee compensation primarily due to the payment of the 2021 corporate bonus net of the 2022 corporate bonus accrual offset by $8.5 million increase in cash provided by all other assets and liabilities, mostly driven by the $5.3 million increase in deferred revenues and $2.8 million increase in accounts payable due to the timing of purchases and payments.
The changes in operating assets and liabilities consisted primarily of a $20.1 million reduction in inventories and a $8.3 million reduction in accounts receivable mostly due to lower revenues, partially offset by $10.6 million decrease in other accrued assets and liabilities, mostly due to decreased sales returns and increased noncurrent prepayments made to component suppliers to secure inventory in future years, along with $7.2 million increase in prepaid expenses, $1.4 million decrease in accounts payable, $1.3 million decrease in accrued liabilities, $1.2 million increase in income taxes receivable and $1.0 million reduction in accrued employee compensation.
The increase in general and administrative expense was primarily due to $1.0 million of expenses incurred in 2023 as part of the Chief Executive Officer transition, $0.8 million higher share-based compensation expense due to new employee equity grants issued, $0.5 million higher employee-related expense due to increased headcount, $0.4 million higher audit and tax fees, $0.3 million higher software and subscription purchases and $0.2 million higher legal expenses.
The decrease in general and administrative expense was primarily due to $1.3 million reduction in nonrecurring costs, mostly related to expenses incurred in 2023 related to the Chief Executive Officer transition that did not repeat in 2024, $0.3 million lower employee-related expense, mostly due to decreased headcount, $0.3 million lower professional fees, $0.2 million lower travel-related expenses and $0.2 million lower insurance expense, partially offset by $0.2 million higher outside contractor spend to backfill due to employee attrition.
The decrease in revenues in Europe, Middle East, Africa was driven mostly by decreased enterprise revenues due to high levels of channel inventory and decreased PMP revenues as technology is expected to move to new gigabit technologies within our product portfolio, partially offset by increased PTP revenues due to higher demand from defense business.
Revenues in Europe, Middle East, Africa increased year-over-year, mostly from increased enterprise product revenues by increased demand for Wi-Fi 6 and switching products, partially offset by decreased PTP product category revenues driven by decreased demand for defense products.
The decrease reflects decreased revenues from higher margin products, the impact from the above mentioned increases in excess and obsolescence and loss on supplier commitments, $11.0 million of additional incentives provided to distributors, and increased freight and supply operations costs as a percentage of revenue.
The increase mostly reflects the impact of the above mentioned decreases in excess and obsolescence reserve and loss on supplier commitments offset by lower revenue from higher margin products. Gross margin for subscriptions and services increased from 53.8% in 2023 to 57.9% in 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. We believe our existing cash, operating cash flow and revolving credit facilities provide us with the financial flexibility needed to meet these needs over at least the next 12 months.
We drew $45.0 million on our revolving credit facility in the first half of 2024 for working capital needs mainly to: (i) fund normal operating expenses; (ii) meet interest and principal requirements of our outstanding indebtedness; and (iii) fund capital expenditures. Following this draw down, we have no remaining available liquidity under our revolving credit facility.
The effective tax rates for the years ended December 31, 2022 and 2023 were (12.1)% and (21.6)%, respectively.
The effective tax rates for the years ended December 31, 2023 and 2024 were (30.9%) and 2.4%, respectively. For the year ended December 31, 2024, our income tax provision decreased by $19.3 million. For the year ended December 31, 2023, the Company's effective tax rate was (30.9)%.
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.
Provision for income taxes Our provision for income taxes consists primarily of income taxes in the jurisdictions in which we conduct business.
The increase was primarily due to an increase in the interest rate on the term loan partially offset by higher interest received. 51 Other (income) expense, net Years ended December 31, Change (dollars in thousands) 2022 2023 $ % Other (income) expense, net $ (114 ) $ 271 $ 385 (337.7 )% Other (income) expense, net changed from income of $0.1 million in 2022 to expense of $0.3 million in 2023.
Other expense, net Year Ended December 31, Change (dollars in thousands) 2023 2024 $ % (Restated) Other expense, net $ 271 $ 52 $ (219 ) (80.8 )% Other expense, net decreased from expense of $0.3 million in 2023 to expense of $0.1 million in 2024. The change is primarily associated with foreign currency fluctuations.
As of December 31, 2023, the Company had $45.0 million available under the revolving commitments, with no amounts drawn thereunder. In accordance with the terms of the BofA Credit Agreement, commencing with the quarter ended March 31, 2022, we began paying quarterly principal payments of approximately $0.7 million on our term loan.
As of December 31, 2024, we had $22.8 million outstanding principal debt under our term loan facility and $45.0 million outstanding on our revolving credit facility. There is no availability remaining on the revolving credit facility.
Removed
In the third quarter of 2023, we introduced and had our first commercial shipments of a passive optical networking (PON) solution, supporting Gigabit PON (GPON) and XGS-PON (also known as 10G-PON or G987). The Enterprise portfolio includes Wi-Fi access points, and other networking devices.
Added
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 and fiber Broadband ("FWB"), Enterprise networking, and Subscription and Services.
Removed
Advanced services offered in conjunction with this platform include application visibility and control, which is used to optimize end-user experiences; integrated security gateway and software defined wide area network (SD-WAN) for small and medium businesses; and automated and intelligent network optimization.
Added
During 2024, both our ePMP 4600 and PMP 450v platforms received Federal Communications Commission ("FCC") approval to operate in the recently released 6 GHz band in conjunction with our approved Automated Frequency Coordination ("AFC") service.
Removed
Trends impacting our business During 2023, although we experienced an overall improvement in the supply constraints that had persisted industry-wide for multiple periods prior to 2023, we identified an increase in channel inventories, particularly of our Enterprise products, as channel partners had increased purchases in prior periods in order to meet the supply constraints.
Added
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.
Removed
As a result, we experienced a reduction in customer purchases during 2023 as customers reduced purchases to right-size their inventories or reduce capital spending, as well as an increase in stock rotations. We also experienced softened demand in part due to macroeconomic factors such as higher interest rates, inflation and concerns about a global economic slow-down.
Added
During 2024, we introduced our first Wi-Fi 7 access point, the X7-35X, which 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.
Removed
This has negatively impacted our net revenues during 2023 and may continue to negatively impact net revenues into the first half of 2024. To reduce excess channel inventories, during the fourth quarter of 2023 we provided additional discounts and other incentives to our customers, which reduced our revenue in the quarter by $11.0 million.
Added
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.
Removed
In addition, in 2023, we have increased our provision for inventory excess and obsolescence by $16.6 million and increased our loss on supplier commitments by $12.8 million due to a decrease in demand to offset the risk that technology shifts could result in this increased inventory becoming obsolete before it is deployed.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+3 added−2 removed4 unchanged
Biggest changeThis change was applicable to the outstanding debt under our term loan facility and our revolving credit facility, which as of December 31, 2023 was $25.4 million and $0.0 million, respectively. We are exposed to interest rate risk from fluctuations in Term SOFR that is a component of the interest rate used to calculate interest expense on the debt.
Biggest changeInterest rate risk We are exposed to interest rate risk from fluctuations in the interest rate used to calculate interest expense on the outstanding principal on our term loan facility and all outstanding borrowing under our revolving credit facility, which as of December 31, 2024 was $22.8 million and $45.0 million, respectively.
Credit risk We consider the credit risk of all customers and regularly monitor credit risk exposures in our trade receivables. Our standard credit terms with our customers are generally net 30 to 60 days. We had one customer representing more than 10% of trade receivables at December 31, 2022 and 2023.
Credit risk We consider the credit risk of all customers and regularly monitor credit risk exposures in our trade receivables. Our standard credit terms with our customers are generally net 30 to 60 days. We had one customer representing more than 10% of trade receivables at December 31, 2023 and 2024.
In addition, we had two customers representing more than 10% of revenues for the years ended December 31, 2021 and 2023 and one customer representing more than 10% of revenues for the year ended December 31, 2022. 57
In addition, we had two customers representing more than 10% of revenues for the years ended December 31, 2023 and 2024. 61
A hypothetical 100-basis point increase in interest rates, and assuming a constant applicable margin and required principal payments, would result in an additional $0.3 million in interest expense related to our external debt per year.
A hypothetical 100-basis point increase in interest rates, and assuming a consistent applicable margin would result in an additional $0.3 million in interest expense related to our term loan facility and $0.5 million of interest expense related to our revolving credit facility per year.
Interest accrues on the outstanding principal amount of the term loan on a quarterly basis and is equal to the Term SOFR rate per annum determined by reference to the 1-month, 3-month or 6-month SOFR rate as selected by the Company, plus an applicable 56 margin.
As a result of our non-compliance with our covenants, our term loan facility and revolving credit facility were converted to Base Rate loans, with interest accruing on the outstanding principal amount of the term loan facility and outstanding borrowing on the revolving credit facility on a quarterly basis equal to the Prime rate per annum, plus a 2.25% applicable margin.
Removed
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest rate risk With the cessation of US Dollar LIBOR tenors, we amended our BofA Credit Agreement in June 2023, to replace the US Dollar LIBOR with the Term Secured Overnight Financing Rate, or Term SOFR.
Added
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk.
Removed
On December 29, 2023, we entered into a second amendment to our credit agreement with Bank of America which increased the applicable margin from 1.75% to 3.25% and will remain at this rate for the duration of the covenant relief period, as defined in the amendment. At December 31, 2023, the effective interest rate on the term loan was 9.2%.
Added
In addition, we are being charged a 2% interest penalty while an event of default exists. At December 31, 2024, the effective interest rate on the term loan was 10.24% and the weighted-average interest rate on the revolving credit facility was 8.73%.
Added
Until we are successful at removing the event of default, the 2% interest penalty will result in an additional $0.6 million in interest expense related to our term loan facility and $0.9 million of interest expense related to our revolving credit facility per year.

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