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What changed in Cambium Networks Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Cambium Networks Corp's 2022 and 2023 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 2023 report.

+408 added−394 removedSource: 10-K (2024-03-15) vs 10-K (2023-02-27)

Top changes in Cambium Networks Corp's 2023 10-K

408 paragraphs added · 394 removed · 286 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

77 edited+20 added−4 removed66 unchanged
Biggest changeThe following table shows a summary of our product portfolio: Cambium Networks Product Portfolio Summary Network Management cnMaestro X - Cloud-Based Management Software Network Services QoE and NSE 3000 Advance Services Platforms Wired Interface cnMatrix - Wireless Aware Switching Product Platform PTP 820/850 PTP 550/670/700 PMP 450 ePMP cnWave Wi-Fi 6/6E cnReach Design Focus Licensed Microwave Backhaul Industry Leading Sub-6 GHz 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 Software Defined Radios, Cloud Managed, High Performance Licensed Narrowband in rugged I/O rich package Throughput 2+ Gbps 450 - 1400 Mbps 1.4 Gbps/Sector 1.2 Gbps/ Sector 15 Gbps/DN 3 Gbps/BTS 1+ Gbps/AP KB to MB Spectrum (GHz except as noted) 6 - 38 4.400 - 5.925 7.125 - 8.500 900 MHz, 2.4, 3, 5 2.4, 5, 6.4 24.25 - 29.50 57 - 66 2.4, 5, 6 220, 450, 700, 900 MHz 7 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.
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.
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 by or enabled by us.
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.
Cambium Community Forum The Cambium Networks Community Forum is a platform for users of our solutions to connect with each other, ask questions, and share information and experiences. It is a place where users can find help and support, as well the latest developments and features of Cambium Networks products.
Cambium Community Forum The Cambium Networks Community Forum is a platform for users of our solutions to connect with each other, ask questions, and share information and experiences. It is a place where users can find help and support, as well as the latest developments and features of Cambium Networks products.
We offer what we believe is a competitive compensation package, tailored to the job function and geography of each employee. Our team is global, and we offer competitive and meaningful compensation and benefits programs that meet the diverse needs of our employees, while also reflecting local market practices.
Compensation and benefits We offer what we believe is a competitive compensation package, tailored to the job function and geography of each employee. Our team is global, and we offer competitive and meaningful compensation and benefits programs that meet the diverse needs of our employees, while also reflecting local market practices.
The program includes training and education, marketing support, 8 technical support, and other resources such as product discounts, deal registration, demonstration equipment, virtual and in-person events, and promotions to help channel partners succeed in selling and supporting our products. Our marketing activities can be Cambium Networks led as well as distributor or channel partner led.
The program includes training and education, marketing support, technical support, and other resources such as product discounts, deal registration, demonstration equipment, virtual and in-person events, and promotions to help channel partners succeed in selling and supporting our products. Our marketing activities can be Cambium Networks-led as well as distributor or channel partner led.
Our competitors in the licensed point-to-point microwave market include Aviat Networks, Ceragon, SIAE, NEC, 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, 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.
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, 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 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.
These forecasts represent our estimates of future demand for our products based on historical trends and analyses from our sales and product management functions as 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 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.
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 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 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.
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. 5 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. 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.
Because our products transmit energy in RF spectrum, our products are subject to: ▪ rules relating to RF spectrum allocation and authorization of certain radio equipment issued by the Federal Communications Commission for non-federal uses or the National Telecommunications and Information Administration for federal uses; and ▪ local type approval, or homologation, rules requiring confirmation that our products meet minimum regulatory, technical and safety requirements prior to sale in various countries around the world, for example: European Technical Standards Institute (ETSI), Industry Canada (IC) and Agencia National De Telecommunicatoes (Anatel).
Because our products transmit energy in RF spectrum, our products are subject to: ▪ rules relating to RF spectrum allocation and authorization of certain radio equipment issued by the Federal Communications Commission for non-federal uses or the National Telecommunications and Information Administration for federal uses in the United States; and ▪ local type approval, or homologation, rules requiring confirmation that our products meet minimum regulatory, technical and safety requirements prior to sale in various countries around the world, for example: European Technical Standards Institute (ETSI), Industry Canada (IC) and Agencia National De Telecommunicatoes (Anatel).
These rules require us to monitor databases and establish and enforce policies to prohibit the sale of our products to, embargoed 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. • 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.
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 Wi-Fi 6 portfolio of Wi-Fi 6 access points which support both cnMaestro and Xirrus XMS management.
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.
We offer a subscription to a cloud-based tool called cnHeat which leverages LiDAR data to build highly accurate link forecasts. The primary competitor to cnHeat is TowerCoverage.com.
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.
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 supports both cnPilot and Xirrus solutions.
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.
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 of importance to network 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.
It removes a great deal of complexity, making it easier to plan, deploy and operate a broadband network from core to edge, using a wide range of wireless technologies, standards, and radio frequency (RF) spectrum. Our software and other tools enable network services that address a primary operating cost and constraint to growth faced by most network operators.
It removes complexity, making it easier to plan, deploy and operate a broadband network from core to edge, using a wide range of wireless technologies, standards, and radio frequency (RF) spectrum. Our software and other tools enable network services that address a primary operating cost and constraint to growth faced by most network operators.
Point-to-Multipoint (PMP) fixed wireless Our PMP solutions extend wireless broadband access from tower mounted FWB access points to customer premise equipment (CPE) providing broadband access to residences and enterprises covering wide areas with a range of 10 to 30 kilometers. Our PMP solutions are increasingly used to backhaul video surveillance systems and public Wi-Fi.
Point-to-Multi-point (PMP) fixed wireless Our PMP solutions extend wireless broadband access from tower mounted FWB access points to customer premise equipment (CPE) providing broadband access to residences and enterprises covering wide areas with a range of 10 to 30 kilometers. Our PMP solutions are increasingly used to backhaul video surveillance systems and public Wi-Fi.
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. The Enterprise portfolio includes Wi-Fi access points, wireless aware switches, and other networking devices.
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. The Enterprise portfolio includes Wi-Fi access points, wireless aware switches, security gateways and other networking devices.
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 1 kilometer with high capacity.
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.
For example, the combination of FWB and Wi-Fi has been successfully deployed in national parks and campgrounds. • Growth of enterprise networking managed services . The market for enterprise networking managed services for hospitality and high density living, such as apartment buildings and senior living, is expanding.
For example, the combination of FWB and Wi-Fi has been successfully deployed in city neighborhoods, national parks and campgrounds. • Growth of enterprise networking managed services . The market for enterprise networking managed services for hospitality and high density living, such as apartment buildings and senior living, is expanding.
We seek patent protection for certain of our key innovations, protocols, processes and other inventions. As of December 31, 2022, we had 42 issued U.S. patents and 149 patents issued in various foreign jurisdictions as well as 9 U.S. and 41 foreign patent applications pending.
We seek patent protection for certain of our key innovations, protocols, processes and other inventions. As of December 31, 2023, we had 42 issued U.S. patents and 149 patents issued in various foreign jurisdictions as well as 9 U.S. and 41 foreign patent applications pending.
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. 13
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
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 SD-WAN for small and medium business; and automated and intelligent network optimization.
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 SD-WAN for small and medium businesses; and automated and intelligent network optimization.
In addition to dedicated point-to-point platforms, as technology has evolved, solutions have developed that while principally supporting point-to-multi-point architectures, also support point-to-point applications, including the recently introduced 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 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.
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 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.
Our products are used by businesses, governments, and service providers to build, expand and upgrade broadband networks. Our product lines fall into three broad, interrelated categories: Fixed Wireless Broadband (FWB), Enterprise networking, and Subscription and Services.
Our products are used by businesses, governments, and service providers to build, expand and upgrade broadband and Wi-Fi networks. Our product lines fall into three broad, interrelated categories: Fixed Wireless Broadband (FWB), Enterprise networking, and Subscription and Services.
Competitors to this offering include Preseem, and Sandvine (including Prosera Analytics which was purchased by Sandvine). 10 • Our cnReach narrowband fixed wireless IIoT products and solutions compete principally with GE MDS and Freewave. • The success of a FWB network is highly dependent on accurately predicting the performance of each link before it is deployed.
Competitors to this offering include Preseem, and Sandvine (including Prosera Analytics which was purchased by Sandvine). • Our cnReach narrowband fixed wireless IoT products and solutions compete principally with GE MDS and Freewave. • The success of a FWB network is highly dependent on accurately predicting the performance of each link before it is deployed.
Competitors in the 3.5 GHz spectrum band, the Citizens Broadband Radio Service in FCC-governed markets, include Airspan, 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, Siklu, 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 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.
Competition The markets for FWB and Enterprise 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.
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.
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 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 brings integration and automation to our entire portfolio.
We generally use 11 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 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 .
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. Other applications need lower latency.
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.
In periods of shortages, we have in the past and may in the future need to build inventory of select components. We outsource the warehousing and delivery of our products at these fulfillment facilities to a third-party logistics provider for worldwide fulfillment.
In periods of shortages, we have in the past and may in the future need to build inventory of select components. We outsource the warehousing and delivery of our products to a third-party logistics provider for worldwide fulfillment.
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, 2022, there were approximately 46,000 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, 2023, there were approximately 50,000 registered forum members on our Community Forum.
For example, where electricity is unreliable or not available, our purpose-built FWB products have been successfully deployed using only solar and battery power. In our product development we strive to minimize capital outlays required by end users of our products. First, we innovate on top of industry standard technologies to optimize the performance per dollar invested in the network.
For example, where primary electrical power is unreliable or unavailable, our purpose-built FWB products have been successfully deployed using only solar and battery power. In our product development we strive to minimize capital outlays required by end users of our products. First, we innovate on top of industry standard technologies to optimize the performance per dollar invested in the network.
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, Industrial Internet of Things (IIoT), public safety communications 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 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.
Our solutions are designed to enable managed service providers to cost effectively deploy and manage high value offerings for multiple hospitality or multi-dwelling unit clients using the 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. • Applications for national defense and security initiatives . We are actively engaged with national defense connectivity initiatives, working closely with systems integration partners.
Meeting new trends The post-COVID 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 or the living room.
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.
In 2021 and 2022 we continued to extend our Wi-Fi 6/6E portfolio, including the addition of the XE5-8, a five-radio Wi-Fi 6/6E 8×8/4×4 access point (AP) designed to deliver high-density, future-proof performance for building next generation wireless networks. With five user servicing radios, the XE5-8 delivers the highest density Wi-Fi 6 solution in the industry.
In 2021 and 2022 we continued to extend our Wi-Fi 6/6E portfolio, including the addition of the XE5-8, a five-radio Wi-Fi 6/6E 8×8/4×4 access point (AP) designed to deliver high-density, future-proof performance for building next generation wireless networks. The Wi-Fi 6 XE5-8 supports high client density requirements with five active radios providing Wi-Fi access.
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.
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.
Our direct fulfillment facilities are in Louisville, Kentucky, Venlo, Netherlands and Shanghai, China 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 and Thousand Oaks, California, Rolling Meadows, Illinois, Ashburton, United Kingdom and Bangalore, India.
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.
We expect our corporate culture to embody trust and respect for individuals, teamwork and innovation; Cambium is a place where employees are proud to work, and where customers, suppliers and partners want to work with us. One of 12 our most valuable assets is our integrity.
We expect our corporate culture to embody trust and respect for individuals, teamwork and innovation; to be a place where employees are proud to work, and where customers, suppliers and partners want to work with us.
To alleviate shortages, we have and may continue to purchase certain scarce components directly on the open market. We may also acquire component inventory in anticipation of supply constraints and enter 9 into longer-term pricing commitments with vendors to improve the priority, price and availability of supply.
To alleviate shortages, we purchased certain scarce components directly on the open market, and if we experience similar shortages in the future, we may need to take similar actions again. We may also acquire component inventory in anticipation of supply constraints and enter into longer-term pricing commitments with vendors to improve the priority, price and availability of supply.
In the fourth quarter of 2020, we began shipping our 60 GHz solution, cnWave, which 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 using the 60 GHz band and a distributed architecture that enables scaled networks with dynamic routing for reliability and resiliency.
In addition to competitive salaries and bonuses or sales commissions, we offer a robust employment total rewards package that promotes employee well-being and includes health care, extended parental leave, and paid time off, including extended leave for new parents (moms, dads and partners) to care for a newborn or newly adopted child.
Health and well-being We offer an employment benefits package that promotes employee well-being and includes healthcare, extended parental leave, and paid time off, including extended leave for new parents (moms, dads and partners) to care for a newborn or newly adopted child.
Risk Factors,” including the risk factor entitled “ New regulations or standards or changes in existing regulations or standards in the United States or internationally related to our products may result in unanticipated costs or liabilities, which could have a material adverse effect on our business, results of operations and future sales, ” “ If we fail to comply with environmental requirements, our business, financial condition, operating results and reputation could be adversely affected” and "Our business, operating results and financial condition could be materially harmed by regulatory uncertainty applicable to our products and services.” Environmental matters We are subject to various environmental and other regulations governing product safety, materials usage, packaging and other environmental impacts in the United States and in various countries where our products are manufactured and sold.
Risk Factors,” including the risk factor entitled “ New regulations or standards or changes in existing regulations or standards in the United States or internationally related to our products may result in unanticipated costs or liabilities, which could have a material adverse effect on our business, results of operations and future sales, ” and “ If we fail to comply with environmental requirements, our business, financial condition, operating results and reputation could be adversely affected”.
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.
We rely on federal, state, common law and international rights, as well as contractual restrictions, to protect our intellectual property.
The subscription-based solution includes granular application shaping, dynamic queue-based rate limiting, congestion management and application insights, which provides broadband service providers immediate access to the information and controls to optimize end user experiences and be the service provider of choice.
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.
Although we are working in both remote and hybrid environments as a result of the COVID-19 pandemic, we work collaboratively, without hierarchy, and our management team is readily available to all employees, with additional quarterly global town hall events that allow for open question and answer dialogue.
Although we work in both remote and hybrid environments, we work collaboratively, without hierarchy, across geographies and functions, and our management team is readily available to all employees, with additional quarterly global town hall events that allow for open dialogue.
Accordingly, investing in our employees and their well-being, offering competitive compensation and benefits, promoting diversity and inclusion, adopting progressive human capital management practices and community outreach constitute core elements of our corporate strategy.
Accordingly, investing in our employees and their well-being, offering competitive compensation and benefits, promoting diversity and inclusion, adopting progressive human capital management practices and community outreach constitute core elements of our corporate strategy. We also offer rewards and recognition programs to our employees, including peer-led recognition of employees who best exemplify our values.
The FCC completed the auction of CBRS Priority Access Licenses, or PAL, in the third quarter of 2020, complementing the existing availability of General Authorized Access, or GAA, licenses. Network operators are adopting the PMP 450 solution to exercise both PAL and GAA licenses. 6 For less demanding environments, ePMP provides a high-quality platform at a more affordable price.
The FCC completed the auction of CBRS Priority Access Licenses, or PAL, in the third quarter of 2020, complementing the existing availability of General Authorized Access, or GAA, licenses. Network operators are adopting the PMP 450 solution to exercise both PAL and GAA licenses.
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. 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.
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 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 and solutions engineering for internet service providers, enterprise networking managed service providers, systems integrators and resellers. As of December 31, 2022, we had 134 sales personnel located in 20 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, 2023, we had 117 sales personnel located in 18 countries.
We support our enterprise class solutions with a range of flexible service plans and optional 24/7 availability that provide assurance to network operators that their always-on, mission critical communications requirements will be met. With every product purchase, we provide technical support on a best-effort basis.
Customer support We provide multiple layers of support: technical support, information-sharing with an experienced community of users, software downloads, warranty services, and repair. We support our enterprise class solutions with a range of flexible service plans and optional 24/7 availability that provide assurance to network operators that their always-on, mission critical communications requirements will be met.
We appreciate one another’s differences and strengths and are proud that our workforce comprises employees with a diversity of backgrounds and perspectives. Diversity, inclusion and belonging have long been a part of our culture, and we work to continually expand our diversity, inclusion and belonging initiatives and to conform to the principles of equal opportunity.
Diversity, inclusion and belonging have long been a part of our culture, and we work to continually expand our initiatives and to conform to the principles of equal opportunity.
Employee performance is assessed based on a variety of key performance metrics, including the achievement of corporate objectives and objectives specific to the employee’s department or role. We grant equity-based compensation to many of our employees and have extended the opportunity for equity ownership through our employee share purchase plan in the United States, the United Kingdom and India.
We grant equity-based compensation to many of our employees and have extended the opportunity for equity ownership through our employee share purchase plan to employees in the United States, the United Kingdom and India.
Our marketing activities are focused on building brand awareness and generating leads with our target market segments of service providers, enterprise, industrial, and government. In addition, we work with our distributors and other channel partners to enable joint marketing that targets the enterprise end users.
Our marketing activities are focused on building brand awareness and generating leads with our target market segments. In addition, we work with our distributors and other channel partners to enable joint marketing that targets enterprise end users. We leverage a broad mix of communications platforms including website and social media presence, public relations, webinars, trade shows and private events.
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, 2022, we had over 12,600 channel partners, which includes over 160 distributors.
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.
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 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 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.
For others, we provide three support programs staffed by our skilled technical support team and product support engineers to keep the network operating smoothly and efficiently and may provide 24x7x365 technical support and premium warranty support and allow network operators to select the service level that best meets their needs.
This may be sufficient for some customers who can largely manage and operate their network without assistance and hold adequate spares. For others, we provide three support programs staffed by our skilled technical support team and product support engineers to keep the network operating smoothly and efficiently, and may provide 24x7x365 technical support and premium warranty support.
We are also subject to regulatory developments, including SEC disclosure regulations relating to "conflict minerals," relating to ethically responsible sourcing of the components and materials used in our products. To date, compliance with federal, state, local, and foreign laws enacted for the protection of the environment has had no material effect on our capital expenditures, earnings, or competitive position.
To date, compliance with federal, state, local, and foreign laws enacted for the protection of the environment has not had a material effect on our capital expenditures, earnings, or competitive position.
We have not experienced any work stoppages, and we consider our relationship with our employees to be good. We have a broad base of diverse talent in more than 20 countries and we believe that attracting, developing and retaining the best talent is critical to our success and achievement of our strategic objectives.
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.
As a result of continuing of labor shortages across industries, businesses are leveraging IIoT devices in digital transformation initiatives. Increasingly, wireless broadband is being chosen over fiber or CAT5 to economically connect security cameras. Simultaneously, networking technologies and standards continue to iterate, providing new capabilities and choice points for network 4 operators.
Other applications need lower latency. 5 As a result of continued labor shortages, and the increasing cost of labor, across industries, businesses are leveraging internet of things (IoT) devices in digital transformation initiatives. For example, increasingly, wireless broadband is being chosen over fiber or CAT5 to economically connect security cameras.
Our products rely on key components, purchased from a limited number of suppliers, including certain sole source providers. Lead times for materials and components vary significantly, and depend on factors such as the specific supplier, complexity, contract terms, demand and availability of a component at a given time.
Lead times for materials and components vary significantly, and depend on factors such as the specific supplier, complexity, contract terms, demand and availability of a component at a given time. From time to time, we may experience price volatility or supply constraints for certain components that are not available from multiple qualified sources or where our suppliers are geographically concentrated.
Our newly released 5G Fixed solution along with the upcoming release of 6 GHz spectrum will give broadband operators even more opportunity for cost-effective network expansion. • FWB as an alternative to fiber .
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 .
As of December 31, 2022, we had approximately 650 full-time employees, of whom 419 are located outside the United States. None of our U.S. employees are subject to a collective bargaining agreement. 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 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.
From time to time, we may experience price volatility or supply constraints for certain components that are not available from multiple qualified sources or where our suppliers are geographically concentrated. We, like the rest of our industry, have experienced shortages in semiconductors and other key components used for our hardware, which have driven increased costs for components and shipping.
We, like the rest of our industry, have in the past experienced shortages in semiconductors and other key components used for our hardware, which resulted in increased costs for components and shipping.
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. We are focused on hiring, training, and retaining exceptional talent.
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.
Our goal is to enable edge-of-the-network intelligence and the ability to adapt and respond to change. We are building and enabling a suite of services, deployed at scale with minimal human intervention, that will enable the network to be dynamic.
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.
Hardware issues are diagnosed via joint troubleshooting with the end user, and the issue will be addressed according to standard warranty status and the root cause of the issue. This may be sufficient for some customers who can largely manage and operate their network without assistance and hold adequate spares.
With every product purchase, we provide technical support on a best-effort basis. Hardware issues are diagnosed via joint troubleshooting with the end user, and the issue will be addressed according to standard warranty status and the root cause of the issue.
Additionally, we offer benefits to support our employees’ physical and mental health by providing tools and resources to help them improve or maintain their health and encourage healthy behaviors and facilitate a number of employee support groups. Available information Our Internet address is www.cambiumnetworks.com and our investor relations website is located at http://investors.cambiumnetworks.com.
Additionally, we offer benefits to support our employees’ physical and mental health by providing tools and resources to help them improve or maintain their health and encourage healthy behaviors. Available information Cambium Networks was formed in 2011 as Vector Cambium Holdings (Cayman), Ltd., and changed its name to Cambium Networks Corporation in 2018.
In December 2022, we commenced commercial shipment of the ePMP 4600 series, which utilizes the 6 GHz band, expected to be commercially released by the FCC and other regulatory bodies around the world in 2023. cnRanger, our Fixed LTE solution, operated in the 2 GHz (Bands 38, 40, 41) and 3 GHz (Bands 42, 43, 48).
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.
The ePMP 3000 supports 4x4 MU-MIMO and is complemented by a broad portfolio of ePMP Force 300 subscriber radios.
In December 2022, we introduced a next generation ePMP 4500 product line that provides a high-quality platform at a more affordable price for 5 GHz. The ePMP 4500 supports 4x4 MU-MIMO and is complemented by a broad portfolio of ePMP Force 400 subscriber radios.
Our support organization both supports channel partners in supporting their direct customers and provides first-line support to our direct customers. Technical support is also available on-line via chat and automated ticketing systems.
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 also offer rewards and recognition programs to our employees, including peer-led recognition of employees who best exemplify our values. We believe that these recognition programs help drive strong employee performance. We conduct annual employee performance reviews, where each employee is evaluated by their manager as well as a self-assessment.
We believe that these recognition programs help drive strong employee performance. We conduct annual employee performance reviews. Employee performance is assessed based on a variety of key performance metrics, including the achievement of corporate objectives and objectives specific to the employee’s department or role.
Expanding our addressable markets Today, fierce competition to provide broadband access in rural, suburban, and urban markets is driving down subscription prices while simultaneously driving up performance requirements. We expect to respond to growing trends such as the following: • The implementation of broadband networks comprised of both fiber and wireless solutions .
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.
Removed
WISPs are adding fiber to their networks while wireline and mobile operators are adding FWB to extend their network where fiber, or mobile-based fixed wireless, is not viable.
Added
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.
Removed
Like the PMP 450 platform, the 3 GHz cnRanger solution supports the CBRS service, while the 2 GHz bands support the FCC’s Educational Broadband Service, or EBS, classification. Our cnReach IIoT solutions offer connectivity for distributed sensors and controls across industrial deployments, delivering real-time monitoring, measurement and analytics to optimize system performance.

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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 COVID-19 and other health crises or pandemics on our operations; • Our ability to develop, introduce and ship in a timely manner new products and product enhancements, and to anticipate future market demands; • The impact of component shortages, logistic delays and cost increases on our product manufacturing and shipment operations; • Our failure to timely fulfill orders for our products, which may be due to 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; • Failure of our distributors and channel partners to effectively promote and sell our products or manage their inventory and fulfillment; • Our ability to control costs, including our manufacturing and component costs and operating expenses; • 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; • 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; • 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; • General economic or political conditions or instability in our markets; and • Increasing uncertainty of and tensions in international trade relations and tariffs. 14 The effects of these or other factors individually or in combination could result in fluctuations and unpredictability in our operating results, our ability to forecast those results and the trading price of our shares.
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.
The wireless broadband market is generally characterized by rapidly changing technology, changing needs of network operators, evolving regulations and industry standards and frequent introductions of new products and services. Historically, new product introductions have been a key driver of our revenue growth.
The wireless broadband market is generally characterized by rapidly evolving technology, changing needs of network operators, evolving regulations and industry standards and frequent introductions of new products and services. Historically, new product introductions have been a key driver of our revenue growth.
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 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; • 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.
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; 22 • 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 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.
Any significant delay or default in the collection of significant accounts receivable could result in the need for us to obtain working capital from other sources and could adversely impact our operating results and financial condition. 21 If we do not effectively deploy and train our direct sales force, we may be unable to increase sales.
Any significant delay or default in the collection of significant accounts receivable could result in the need for us to obtain working capital from other sources and could adversely impact our operating results and financial condition. If we do not effectively deploy and train our direct sales force, we may be unable to increase sales.
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 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.
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.
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.
In addition, we might be required to seek a license for the use of such intellectual property, which may not be available on commercially acceptable terms or at all. Alternatively, we may be required to develop non-infringing technology, which could require significant 29 effort and expense and may ultimately not be successful.
In addition, we might be required to seek a license for the use of such intellectual property, which may not be available on commercially acceptable terms or at all. Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and may ultimately not be successful.
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.
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.
Any errors, bugs, defects, security vulnerabilities or quality or reliability issues discovered in our products after commercial release could result in increased warranty claims, damage to our reputation and brand, loss of market 20 shares or loss of revenues, any of which could adversely affect our business, operating results and financial condition.
Any errors, bugs, defects, security vulnerabilities or quality or reliability issues discovered in our products after commercial release could result in increased warranty claims, damage to our reputation and brand, loss of market shares or loss of revenues, any of which could adversely affect our business, operating results and financial condition.
Vulnerabilities and critical security defects, prioritization errors in remedying vulnerabilities or security defects, failure of third-party 28 providers to remedy vulnerabilities or security defects, or customers not deploying specific 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.
Vulnerabilities and critical security defects, prioritization errors in remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying specific 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.
In addition, radio emissions, such as our products, are subject to health and safety regulation in the United States and in other 24 countries in which we do business, including by the Center for Devices and Radiological Health of the Food and Drug Administration, the Occupational Safety and Health Administration and various state agencies.
In addition, radio emissions, such as our products, are subject to health and safety regulation in the United States and in other countries in which we do business, including by the Center for Devices and Radiological Health of the Food and Drug Administration, the Occupational Safety and Health Administration and various state agencies.
Breaches of security in our customers’ or suppliers' networks, or in cloud-based services provided by or enabled by us, regardless of whether the breach is attributable to a vulnerability in our products or services, could result in claims of liability against us, damage our reputation or otherwise materially harm our business.
Breaches of security in our suppliers' networks, or in cloud-based services provided by or enabled by us, regardless of whether the breach is attributable to a vulnerability in our products or services, could result in claims of liability against us, damage our reputation or otherwise materially harm our business.
Accordingly, shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. 35 The price of our shares may be volatile, and shareholders could lose all or part of their investment. The trading price of our shares may fluctuate substantially.
Accordingly, shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. The price of our shares may be volatile, and shareholders could lose all or part of their investment. The trading price of our shares may fluctuate substantially.
Neither we nor our third-party manufacturers carry 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. Shortages are possible and our ability to predict the availability of such components may be limited.
In many foreign countries where we operate, particularly in countries with developing economies, it may be a local custom for businesses to engage in practices that are prohibited by the FCPA or other similar laws and 25 regulations.
In many foreign countries where we operate, particularly in countries with developing economies, it may be a local custom for businesses to engage in practices that are prohibited by the FCPA or other similar laws and regulations.
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.
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.
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.
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.
Our actual or perceived failure to achieve any ESG-related initiatives, goals, or commitments that we make could negatively impact our reputation or otherwise materially harm our business. Item 1B. Unresolved Staff Comments. None. 38
Our actual or perceived failure to achieve any ESG-related initiatives, goals, or commitments that we make could negatively impact our reputation or otherwise materially harm our business. Item 1B. Unresolved Staff Comments. None.
We expect competition to persist, intensify and increase in the future. In all our markets, we compete with a number of wireless equipment providers worldwide that vary in size and in the products and solutions offered.
We expect competition to persist, intensify and increase in the future. 18 In all our markets, we compete with a number of wireless equipment providers worldwide that vary in size and in the products and solutions offered.
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.
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.
We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what products may be subject to such actions or what actions may be taken by the other countries in retaliation.
We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and other countries, what products may be subject to such actions or what actions may be taken by the other countries in retaliation.
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 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 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 EU 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 EU GDPR and to provide more detailed information to data subjects regarding processing; (ii) enhanced requirements for obtaining valid consent; (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 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 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 U.S. tariffs may also cause customers to delay orders as they evaluate where to take delivery of our products in connection with their efforts to mitigate their own tariff exposure. Such delays create forecasting difficulties for us and increase the risk that orders might be canceled or might never be placed.
The tariffs may also cause customers to delay orders as they evaluate where to take delivery of our products in connection with their efforts to mitigate their own tariff exposure. Such delays create forecasting difficulties for us and increase the risk that orders might be canceled or might never be placed.
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 53% 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. 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.
We believe we can adjust our supply 33 chain and manufacturing practices to minimize the impact of the tariffs and any impact on the supply chain of components sourced in China, but our efforts may not be successful, there can be no assurance that we will not experience a disruption in our business related to these or other changes in trade practices and the process of changing suppliers in order to mitigate any such tariff costs could be complicated, time-consuming, and costly.
We believe we can adjust our supply chain and manufacturing practices to minimize the impact of the tariffs and any impact on the supply chain of components, but our efforts may not be successful, there can be no assurance that we will not experience a disruption in our business related to these or other changes in trade practices and the process of changing suppliers in order to mitigate any such tariff costs could be complicated, time-consuming, and costly.
In addition, evolving legal requirements restricting or governing the collection, use, processing, or cross-border transmission of personal data, including for regulation of cloud-based services, could materially affect our customers’ ability to use, and our ability to sell, our products and services.
In addition, evolving legal requirements restricting or governing the collection, use, processing, or cross-border transmission of personal data, including cloud-based services, could materially affect our customers’ ability to use, and our ability to sell, our products and services.
These devices compete with all consumer-grade, home Wi-Fi brands. • Our cnReach narrowband fixed wireless IIoT products and solutions compete principally with GE MDS and Freewave. 15 • 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.
These devices compete with all consumer-grade, home Wi-Fi brands. • Our cnReach narrowband fixed wireless IoT products and solutions compete principally with GE MDS and Freewave. • 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.
Despite our implementation of security measures, (i) our products and services, and (ii) the servers, data centers, and cloud-based solutions on which our and third-party data is stored, are vulnerable to cyber-attacks, data breaches, malware, and disruptions from unauthorized access, tampering or other theft or misuse, including by employees, malicious actors or inadvertent error.
Despite our implementation of security measures, (i) our products and services, and (ii) the servers, data centers, and cloud-based solutions on which our and third-party data is stored, are vulnerable to cyber-attacks, and other security incidents, and disruptions from unauthorized access, tampering or other theft or misuse, including by employees, malicious actors or inadvertent error.
Weak domestic or global economic conditions and continuing economic uncertainty, fear or anticipation of such conditions, a recession, international trade disputes, global pandemics such as the COVID-19 pandemic, or a reduction in information technology and network infrastructure spending even if economic conditions improve, have from time to time contributed, and may continue to contribute, to slowdowns in the markets in which we compete, resulting in reduced demand for our products as a result of constraints in capital spending, longer sales cycles, increased price competition for our products including lower sales prices, risk of excess and obsolete inventories, risk of supply constraints, and higher overhead costs as a percentage of revenue and higher interest expense, which could adversely affect our business, financial condition, results of operations and prospects, higher default rates among our distributors, reduced unit sales and lower or no growth.
Weak domestic or global economic conditions and continuing economic uncertainty, fear or anticipation of such conditions, inflation, a recession, international trade disputes, political tensions, global pandemics, or a reduction in information technology and network infrastructure spending even if economic conditions improve, have from time to time contributed, and may continue to contribute, to slowdowns in the markets in which we compete, resulting in reduced demand for our products as a result of constraints in capital spending, longer sales cycles, increased price competition for our products including lower sales prices, risk of excess and obsolete inventories, risk of supply constraints, and higher overhead costs as a percentage of revenue and higher interest expense, which could adversely affect our business, financial condition, results of operations and prospects, higher default rates among our distributors, reduced unit sales and lower or no growth.
Because the markets in which we compete are volatile, competitive and subject to rapid technology and price changes, if the assumptions on which we base these decisions turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory.
Because the markets in which we compete are volatile, competitive and subject to rapid technology and price changes, if the assumptions on which we base these decisions turn out to be incorrect, our financial performance could suffer and we have in the past and could in the future be required to write-off the value of excess products or components inventory.
We rely on our third-party logistics and warehousing provider, with distribution hubs currently in the United States, the Netherlands and China to fulfill the majority of our worldwide sales and to deliver our products to our customers.
We rely on our third-party logistics and warehousing provider, with distribution hubs currently in the United States, the Netherlands and Vietnam to fulfill the majority of our worldwide sales and to deliver our products to our customers.
Our international sales and operations are subject to a number of risks, including the following: • 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; • 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 and terrorism; and • the impact of the spread of any diseases globally that might impact our operations. 23 These and other factors could harm our ability to generate future international revenues.
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.
If tariffs, trade restrictions, or trade barriers remain in place or if new tariffs, trade restrictions, or trade barriers are placed on products such as ours by U.S. or foreign governments, especially China, our costs may increase.
If tariffs, trade restrictions, or trade barriers remain in place or if new tariffs, trade restrictions, or trade barriers are placed on products such as ours by U.S. or foreign governments, our costs may increase.
Our ability to manage our supply chain may be adversely affected by factors including shortages of, and extended lead times for, components used to manufacture our products, a reduction or interruption of supply, prioritization of component shipments to other vendors, cessation of manufacturing of such components by our suppliers and geopolitical conditions such as the U.S. trade war with China and the impact of public health epidemics like the COVID-19 pandemic.
Our ability to manage our supply chain may be adversely affected by factors including shortages of, and extended lead times for, components used to manufacture our products, a reduction or interruption of supply, prioritization of component shipments to other vendors, cessation of manufacturing of such components by our suppliers and geopolitical conditions such as the U.S. trade war with China and the impact of public health epidemics.
Given the relatively fluid regulatory environment in China and the United States 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.
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.
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.
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.
Such events could in the future compromise or disrupt access to or the operation of our products, services, and networks or those of our customers, or result in the information stored on our systems or those of our customers being improperly accessed, processed, disclosed, lost or stolen.
Such events on our or our service providers' systems could in the future compromise or disrupt access to or the operation of our products, services, and networks or those of our service providers or customers, or result in the information stored on our systems or those of our service providers or customers being improperly accessed, processed, disclosed, lost or stolen.
The global macroeconomic environment could be negatively affected by, among other things, epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes between the U.S., China and other countries, inflationary pressures, higher interest rates, instability in the global credit markets, the impact and uncertainty regarding global central bank monetary policy, instability in the geopolitical environment, the Russia-Ukraine conflict, political tensions between Taiwan and China, political demonstrations, and foreign governmental debt concerns which have caused, and are likely to continue to cause, uncertainty and instability in local economies and in global financial markets.
The global macroeconomic environment could be negatively affected by, among other things, epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes between the U.S., China and other countries, inflationary pressures, higher interest rates, instability in the global credit markets, the impact and uncertainty regarding global central bank monetary policy, instability in the geopolitical environment, the Russia-Ukraine conflict, political tensions between Taiwan and China, tensions and war in the Middle East including Israel, and other countries in the Middle East and elsewhere, political demonstrations, and foreign governmental debt concerns which have caused, and are likely to continue to cause, uncertainty and instability in local economies and in global financial markets.
We rely on our third-party logistics and warehousing provider, with distribution hubs currently in the United States, the Netherlands and China, 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 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 have not to date experienced a material event; however, the occurrence of any such event in the future could subject us to liability to our customers, suppliers, 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; 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.
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 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 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.
If the conditions in the U.S. and global economies deteriorate, become uncertain or volatile, our business, operating results and financial condition may be materially adversely affected.
If the conditions in the U.S. and global economies deteriorate, become uncertain or volatile, if inflationary pressures continue, our business, operating results and financial condition may be materially adversely affected.
In the United States, we are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2019. In the non-U.S. jurisdictions, the tax returns that are open vary by jurisdiction and are generally for tax years between 2018 through 2022.
In the United States, we are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2020. In the non-U.S. jurisdictions, the tax returns that are open vary by jurisdiction and are generally for tax years between 2019 through 2023.
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; • 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; • 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.
If our supply chain operations are affected or are curtailed by the outbreak of diseases such as COVID-19, our supply chain, manufacturing and product shipments will be delayed, which could adversely affect our business, operations and customer relationships.
If our supply chain operations are affected or are curtailed by the outbreak of diseases, our supply chain, manufacturing and product shipments will be delayed, which could adversely affect our business, operations and customer relationships.
This capacity shortage coupled with an increase in demand for our affected products, due in part to a global increase in demand for bandwidth has resulted in supply shortages that have caused increased lead times for some of our products.
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.
During the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, we enter into agreements with contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by us, such as forecasted demand.
In order to manage manufacturing lead times and help ensure adequate component supply, we enter into agreements with contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by us, such as forecasted demand.
Sales through distributors have been highly concentrated in a few distributors, with over 41%, 37%, and 29% of our revenues in 2020, 2021 and 2022, respectively, coming from our three largest distributors. 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%, 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.
Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act once we cease to be an emerging growth company.
Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm 34 attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act beginning with our Annual Report filed for the year ending December 31, 2024, once we cease to be an emerging growth company.
Any failure or perceived failure by us to comply with applicable laws, regulations, standards or obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personally identifiable information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity, and could cause channel partners to lose trust in us, which could have an adverse effect on our reputation and business. 26 Our actual or perceived failure to adequately protect personal data could result in claims of liability against us, damage our reputation or otherwise materially harm of business.
Any failure or perceived failure by us to comply with applicable laws, regulations, standards or obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personally identifiable information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity, and could cause channel partners to lose trust in us, which could have an adverse effect on our reputation and business.
Logistics challenges have and may continue to impact our operations, as a result of container shortages which have and may continue to lengthen 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 has increased.
Accordingly, if our channel partners purchase more product than is required to meet demand in a particular period, causing their inventory levels to grow, they may delay or reduce additional future purchases, causing our quarterly results to fluctuate and adversely impacting our ability to accurately predict future earnings.
Accordingly, if, as we have recently experienced, our channel partners purchase more product than is required to meet demand in a particular period, causing their inventory levels to grow, they may delay or reduce additional future purchases, causing a reduction in expected future revenues, our quarterly results to fluctuate, and adversely impacting our ability to accurately predict future earnings.
Although we rely on channel partners to fulfill the substantial majority of our sales, our direct sales force plays a critical role driving our sales through direct engagement with network operators. We have invested and will continue to invest substantially in our sales organization.
Although we rely on channel partners to fulfill the substantial majority of our sales, our direct sales force plays a critical role driving our sales through direct engagement with network operators. Although we have recently experienced reductions in our workforce, we have invested and will from time to time continue to invest in our sales organization.
For example, sales outside of the United States accounted for 49% of our total revenues in 2020, 51% in 2021, and 55% in 2022.
For example, sales outside of the United States accounted for 51% of our total revenues in 2021, 55% in 2022, and 40% in 2023.
Our third-party manufacturers predominantly operate outside of the U.S. causing us to face risks to our business based on changes in tariffs, trade barriers, export regulations, political conditions and contractual restrictions.
We outsource manufacturing to third-party manufacturers operating outside of the U.S., subjecting us to risks of international operations. Our third-party manufacturers predominantly operate outside of the U.S. causing us to face risks to our business based on changes in tariffs, trade barriers, export regulations, political conditions and contractual restrictions.
Our sales headcount has grown from 124 as of December 31, 2019 to 134 as of December 31, 2022, as we focus on growing our business, entering new markets and increasing our market share, and we expect to continue to incur significant expenses as we continue to invest in sales and marketing in order to achieve revenue growth.
Our sales headcount has grown from 108 as of December 31, 2020 to 117 as of December 31, 2023, as we focus on growing our business, entering new markets and increasing our market share, and we expect to continue to incur significant expenses as we continue to invest in sales and marketing in order to achieve revenue growth.
Conflicts of interest may not be resolved in our favor. General risks If we are unable to manage our growth and expand our operations successfully, our business and operating results will be harmed. We have expanded our operations significantly since inception and anticipate that further significant geographic and market expansion will be required to achieve our business objectives.
General risks If we are unable to manage our growth and expand our operations successfully, our business and operating results will be harmed. We have expanded our operations significantly since inception and anticipate that further significant geographic and market expansion will be required to achieve our business objectives.
If we are not able to generate repeat purchases from end users, our revenues may grow more slowly than expected or may decline, and our business and operating results would be adversely affected. Our gross margin varies from period to period and may decline in the future.
If we are not able to generate repeat purchases from end users, our revenues may grow more slowly than expected or may decline, and our business and operating results would be adversely affected.
In addition, the EU GDPR confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the EU GDPR.
In the event of non-compliance, the EU GDPR provides for robust regulatory enforcement and fines. In addition, the GDPR confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR.
Any change in the location of our distribution hubs, such as changes in distribution location anticipated to be made by us in 2023, 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, 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.
Furthermore, our future working capital, proceeds of borrowings or proceeds of equity financings could be required to be used to repay or refinance the amounts outstanding under the credit facility and, therefore, may be unavailable for other purposes.
Furthermore, our future working capital, proceeds of borrowings or proceeds of equity financings could be required to be used to repay or refinance the amounts outstanding under the credit facility and, therefore, may be unavailable for other purposes. A breach of any of these covenants could result in a default under the credit facility.
Competitive pressures may harm our business, revenues, growth rates and market share. The markets for FWB and Enterprise 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.
The markets for our products, including FWB and Enterprise 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.
Current or future tariffs imposed by the U.S. may also negatively impact our customers' sales, thereby causing an indirect negative impact on our own sales.
Current or future tariffs may also negatively impact our customers' sales, thereby causing an indirect negative impact on our own sales.
We outsource the manufacturing of our products to third-party manufacturers pursuant to which the third parties manufacture and supply our products subject to orders from us often based on our demand forecasts. Our reliance on third-party manufacturers reduces our control over the manufacturing process, including reduced control over quality, product costs and product supply and timing.
We rely on third-party manufacturers, which subjects us to risks of product delivery delays and reduced control over product costs and quality. We outsource the manufacturing of our products to third-party manufacturers pursuant to which the third parties manufacture and supply our products subject to orders from us often based on our demand forecasts.
Growth in our sales and new product launches may require us to build inventory in the future. Higher levels of inventory expose us to a greater risk of carrying excess or obsolete inventory, which may in turn lead to write-downs. We may also record write-downs in connection with the end-of-life for specific products.
Higher levels of inventory expose us to a greater risk of carrying excess or obsolete inventory, which may in turn lead to write-downs. We may also record write-downs in connection with the end-of-life for specific products.
We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our Amended and Restated Memorandum and Articles of Association, the Companies Act (as amended) of the Cayman Islands and the common law of the Cayman Islands.
Our corporate affairs are governed by our Amended and Restated Memorandum and Articles of Association, the Companies Act (as amended) of the Cayman Islands and the common law of the Cayman Islands.
Our competitors may be able to anticipate, influence or adapt more quickly to new or emerging technologies and changes in network operator requirements, devote greater resources to the promotion and sale of their products and services, initiate or withstand substantial price competition, bundle similar products to compete, take advantage of acquisitions or other opportunities more readily, and develop and expand their product and service offerings more quickly than we can.
Our competitors may be able to anticipate, influence or adapt more quickly to new or emerging technologies and changes in network operator requirements, devote greater resources to the promotion and sale of their products and services, initiate or withstand substantial price competition, bundle similar products to compete, take advantage of acquisitions or other opportunities more readily, and develop and expand their product and service offerings more quickly than we can. 19 Some of our competitors have been acquired or entered into partnerships or other strategic relationships and offer a more comprehensive solution than they had previously offered.
Under Nasdaq rules, a controlled company may elect not to comply with certain corporate governance requirements of the Nasdaq, including the requirements that: • a majority of the board of directors consist of independent directors; • the nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; • the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • there be an annual performance evaluation of the nominating and corporate governance and compensation committees.
Under Nasdaq rules, a controlled company may elect not to comply with certain corporate governance requirements of the Nasdaq, including the requirements that: • a majority of the board of directors consist of independent directors; • the nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; • the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • there be an annual performance evaluation of the nominating and corporate governance and compensation committees. 38 We are utilizing these exemptions, other than the exemption relating to the independence of the board of directors, as our board of directors is now composed of a majority of independent directors.
Two of our directors hold ownership interests in Vector Capital as well as ownership in and employment positions with its affiliates. Ownership interests in Vector Capital by our directors could create, or appear to create, potential conflicts of interest when our directors are faced with decisions that could have different implications for us and for Vector Capital or its affiliates.
Ownership interests in Vector Capital by our directors could create, or appear to create, potential conflicts of interest when our directors are faced with decisions that could have different implications for us and for Vector Capital or its affiliates. Conflicts of interest may not be resolved in our favor.
Although we may be able to seek indemnification from our component suppliers and certain of our third-party manufacturers who have provided us with design and build services, these third-party manufacturers or component suppliers may contest their obligations to indemnify us, or their available assets or indemnity obligation may not be sufficient to cover our losses.
Although we may be able to seek indemnification from our component suppliers and certain of our third-party manufacturers who have provided us with design and build services, these third-party manufacturers or component suppliers may contest their obligations to indemnify us, or their available assets or indemnity obligation may not be sufficient to cover our losses. 32 If our third-party manufacturers do not respect our intellectual property and trade secrets and produce competitive products using our design, our business would be harmed.
For example, the European Union’s (“EU”) General Data Protection Regulation (“EU GDPR”) applies to the extent that our activities: (i) are conducted from an 'establishment' in the EU; or (ii) related to products or services offered to individuals in the EU or the monitoring of their behavior.
For example, the European Union’s (“EU”) General Data Protection Regulation and the equivalent UK legislation (“GDPR”) applies to the extent that our personal data processing activities: (i) are conducted by or on behalf of an 'establishment' in the EU or UK; or (ii) related to products or services offered to individuals in the EU or UK or the monitoring of their behavior while in the EU or UK.
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.
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.
Our future operating results and financial condition could be materially affected to the extent any of these actions occur. We rely on distributors and value-added resellers for the substantial majority of our sales, and the failure of our channel partners to promote and support sales of our products would materially reduce our expected future revenues.
We rely on distributors and value-added resellers for the substantial majority of our sales, and the failure of our channel partners to promote and support sales of our products would materially reduce our expected future revenues.
As a result, our past results should not be relied upon as an indication of our future performance. The introduction of new products and technology is key to our success, and if we fail to predict and respond to emerging technological trends and network operators’ changing needs, we may be unable to remain competitive.
The introduction of new products and technology is key to our success, and if we fail to predict and respond to emerging technological trends and network operators’ changing needs, we may be unable to remain competitive.
We require third-party components, including components from limited or sole source suppliers, to build our products. The unavailability of these components could substantially disrupt our ability to manufacture our products and fulfill sales orders.
Our future operating results and financial condition could be materially affected to the extent any of these actions occur. 21 We require third-party components, including components from limited or sole source suppliers, to build our products. The unavailability of these components could substantially disrupt our ability to manufacture our products and fulfill sales orders.
The restrictions imposed to prevent the spread of COVID-19 disrupted economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, volatility in the global capital markets, instability in the credit and financial markets, labor shortages, regulatory relief for impacted consumers and disruption in supply chains.
The restrictions imposed by steps taken to address public health crises may disrupt economic activity, which may result in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, volatility in the global capital markets, instability in the credit and financial markets, labor shortages, regulatory relief for impacted consumers and disruption in supply chains.
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 outsource manufacturing to third-party manufacturers operating outside of the U.S., subjecting us to risks of international operations.
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.
Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to personal data, or to protect personal data from unauthorized access, use, or other processing, could subject us to liability to our customers, data subjects, suppliers, business partners, employees, and others, give rise to legal and/or regulatory action, could damage our reputation or could otherwise materially harm our business, any of which could have a material adverse effect on our business, operating results, and financial condition.
Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to personal data, or to protect personal data from unauthorized access, use, or other processing, could subject us to liability to our customers, data subjects, suppliers, service providers, business partners, employees, and others, give rise to legal and/or regulatory actions, could damage our reputation or could otherwise materially harm our business, any of which could have a material adverse effect on our business, operating results and financial condition. 30 Risks related to our intellectual property Cyber-attacks, and other security incidents on our or our service providers' system 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 other security attacks 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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe 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.
Biggest changeWe 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.
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 and Singapore.
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.
Item 2. Pr operties. As of December 31, 2022, 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.
Item 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.
For additional information regarding obligations under operating leases, see Note 15 - 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.
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.
Added
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 changeHowever, 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. 39 PART II
Biggest changeHowever, 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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNeither Cayman Islands law nor our Amended and Restated Memorandum and Articles of Association requires our board of directors to declare dividends on our ordinary shares.
Biggest changeUse of proceeds from Initial Public Offering of ordinary shares Not applicable. Dividend policy We have not declared or paid dividends on our ordinary shares since our IPO. Neither Cayman Islands law nor our Amended and Restated Memorandum and Articles of Association requires our board of directors to declare dividends on our ordinary shares.
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 2023 annual meeting of Shareholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2022 and is incorporated herein by reference.
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.
Issuer purchase of equity securities None. 40 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.
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.
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, 2022.
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.
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, 2022, there were 142 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 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.
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 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 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 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 Item 6.
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.
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. The closing price of our ordinary shares on December 30, 2022 was $21.67 per share as reported on the NASDAQ Global Market. Recent sale of unregistered securities None.
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. 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.
Removed
Use of proceeds from Initial Public Offering of ordinary shares The offer and sale of all of the shares in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-21789), which was declared effective by the SEC on June 25, 2019.
Removed
The remainder of the information required by this item regarding the use of our IPO proceeds has been omitted pursuant to SEC rules because such information has not changed since our last periodic report was filed. Dividend policy We have not declared or paid dividends on our ordinary shares since our IPO.

Item 7. Management's Discussion & Analysis

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

65 edited+50 added−38 removed32 unchanged
Biggest changeThe changes in operating assets and liabilities consisted primarily of a $11.2 million increase in accounts receivable due to higher sales in the last month of the quarter, along with $8.0 million increase in prepaid assets due to prepayments made to suppliers to procure inventory and $2.7 million decrease in accounts payable due to timing of purchases and payments, offset by $2.5 million increase in accrued liabilities, and a $1.9 million increase in accrued employee compensation related to higher bonus due to increased headcount and salaries.
Biggest changeThe 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.
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 47 a higher tax rate.
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.
As of December 31, 2022, 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, 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.
We believe that cash generated from operations, together with existing sources of liquidity, will satisfy the cash requirements for these contractual obligations. 49 Critical accounting policies and estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
We believe that cash generated from operations, together with existing sources of liquidity, will satisfy the cash requirements for these contractual obligations. Critical accounting policies and estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
For certain of our software projects under development, we capitalize the development cost during the period between determining technological feasibility of the product and commercial release. We amortize the capitalized development cost upon commercial release, generally over three years and is included in cost of revenues.
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.
Our product lines fall into three broad, interrelated categories: Fixed Wireless 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.
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.
We outsource our manufacturing to third-party manufacturers located primarily in Mexico, China, 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 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.
The impact of reverse globalization, including a more nationalistic trend globally leading to increasing government requirements for domestically produced products or limiting the sourcing of components and other products from China and elsewhere, has led us to limit our reliance on third party manufacturers in China and move manufacturing to other locations, which could cause disruptions in our supply operations.
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 discussion and analysis of 2020 and changes in the financial condition and results of operations for the year-to-year comparisons between 2020 and 2021 that are not included in this Form 10-K may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Part II, Item 7 of our Annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission ("SEC") on February 24, 2022, which is incorporated by reference to this Part II, Item 7 of this Annual Report on Form 10-K.
The discussion and analysis of 2022 and changes in the financial condition and results of operations for the year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Part II, Item 7 of our Annual report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (SEC) on February 27, 2023, which is incorporated by reference to this Part II, Item 7 of this Annual Report on Form 10-K.
For a detailed discussion on our operating leases, refer to Note 15, Leases, in Notes to Consolidated Financial Statements in Item 8 of part II of this Annual Report on Form 10-K.
For a detailed discussion on our operating leases, refer to Note 14, Leases, in Notes to Consolidated Financial Statements in Item 8 of part II of this Annual Report on Form 10-K.
Overview 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, Industrial Internet of Things (IIoT), 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 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.
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 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.
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 SD-WAN for small and medium business; and automated and intelligent network optimization.
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.
In addition, we separate depreciation and amortization in their own category. 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.
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.
As a percentage of revenues, research and development expenses increased from 15.3% in 2021 to 16.8% in 2022.
As a percentage of revenues, research and development expenses increased from 16.8% in 2022 to 24.3% in 2023.
Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
JOBS Act accounting election We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met. Revenues are recognized net of estimated stock returns, volume-based rebates and cooperative marketing allowances that we provide to distributors. Estimated stock returns, volume-based rebates and cooperative marketing allowances are based on historical experience together with any known future business trends.
We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met. Revenues are recognized net of estimated stock returns, volume-based rebates, cooperative marketing allowances, and other incentives that we provide to distributors.
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 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.
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 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 effective tax rates for the years ended December 31, 2021 and 2022 were (17.3)% and (12.1)%, respectively.
The effective tax rates for the years ended December 31, 2022 and 2023 were (12.1)% and (21.6)%, respectively.
General and administrative General and administrative expense decreased $0.1 million, or 0.3%, from $25.1 million in 2021 to $25.0 million in 2022. As a percentage of revenues, general and administrative expense increased from 7.5% in 2021 to 8.4% in 2022.
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.
See Note 12 - 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, 2022, we had a cash balance of $48.2 million. Our financial condition and liquidity remain strong.
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.
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.
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.
The transaction price recognized excludes an estimate for the consideration related to products we expect to be returned or amounts we expect to refund. 50 Inventory and inventory valuation Inventories are stated at the lower of cost or net realizable value.
The transaction price recognized excludes an estimate for the consideration related to products we expect to be returned or amounts we expect to refund. Inventory and inventory valuation Inventories are stated at the lower of cost or net realizable value. In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price is used.
Sales and marketing In addition to personnel costs for sales, marketing, service and product line management personnel, sales and marketing expense consists of our training programs, trade shows, marketing programs, promotional materials, demonstration equipment, national and local regulatory approval on our products, travel and entertainment, recruiting and shared facility and shared IT costs. 43 General and administrative In addition to personnel costs, general and administrative expense consists of professional fees, such as legal, audit, accounting, information technology and consulting costs, insurance, shared facility and shared IT costs, and other supporting overhead costs.
Sales and marketing In addition to personnel costs for sales, marketing, service and product line management personnel, sales and marketing expense consists of our training programs, trade shows, marketing programs, promotional materials, demonstration equipment, national and local regulatory approval on our products, travel and entertainment, recruiting and shared facility and shared IT costs.
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 management judgment. The assumptions used to derive this estimate did not change significantly in the current period.
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.
Sales and marketing Sales and marketing expense increased $2.6 million, or 6.3%, from $41.8 million in 2021 to $44.5 million in 2022. As a percentage of revenues, sales and marketing expense increased from 12.5% in 2021 to 15.0% in 2022.
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.
We record an additional income tax expense in the period in which new information becomes available indicating the tax liability is greater than our original estimate. Share-based compensation We recognize all share-based compensation expense as a cost in the consolidated financial statements.
We record an additional income tax expense in the period in which new information becomes available indicating the tax liability is greater than our original estimate.
Cash Flows The following table sets forth summarized cash flow data for the periods indicated (in thousands): Years Ended December 31, 2021 2022 Cash provided by (used in) operating activities $ 29,960 $ (3,054 ) Cash used in investing activities $ (10,166 ) $ (9,245 ) Cash (used in) provided by financing activities $ (22,953 ) $ 1,245 Cash flows from operating activities Net cash provided by operating activities for 2021 of $30.0 million consisted primarily of net income of $37.4 million, adjustments for depreciation and amortization of $8.1 million, share-based compensation expense of $7.7 million, and an increase in deferred income taxes of $6.1 million along with changes in operating assets and liabilities that resulted in net cash outflows of $17.0 million.
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.
Results of operations The following table presents the consolidated statements of operations, as well as the percentage relationship to total revenues for items included in our consolidated statements of operations for the year ended December 31, 2021 compared to the year ended December 31, 2022: Years ended December 31, (in thousands) 2021 2022 Statements of Operations Data: Revenues $ 335,854 $ 296,899 Cost of revenues 175,058 151,759 Gross profit 160,796 145,140 Operating expenses Research and development 51,322 49,865 Sales and marketing 41,819 44,452 General and administrative 25,065 24,982 Depreciation and amortization 6,171 5,961 Total operating expenses 124,377 125,260 Operating income 36,419 19,880 Interest expense, net 4,269 1,977 Other expense (income), net 244 (114 ) Income before income taxes 31,906 18,017 Benefit for income taxes (5,515 ) (2,183 ) Net income $ 37,421 $ 20,200 Years ended December 31, 2021 2022 Percentage of Revenues: Revenues 100.0 % 100.0 % Cost of revenues 52.1 % 51.1 % Gross margin 47.9 % 48.9 % Operating expenses Research and development 15.3 % 16.8 % Sales and marketing 12.5 % 15.0 % General and administrative 7.5 % 8.4 % Depreciation and amortization 1.8 % 2.0 % Total operating expenses 37.1 % 42.2 % Operating income 10.8 % 6.7 % Interest expense, net 1.3 % 0.7 % Other expense (income), net 0.1 % (0.1 )% Income before income taxes 9.4 % 6.1 % Benefit for income taxes (1.6 )% (0.7 )% Net income 11.0 % 6.8 % 44 The following is the discussion and analysis of changes in the financial condition and results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2022.
Results of operations The following table presents the consolidated statements of operations, as well as the percentage relationship to total revenues for items included in our consolidated statements of operations for the year ended December 31, 2022 compared to the year ended December 31, 2023: Years ended December 31, (in thousands) 2022 2023 Statements of Operations Data: Revenues $ 296,899 $ 220,195 Cost of revenues 151,759 151,364 Gross profit 145,140 68,831 Operating expenses Research and development 49,865 53,478 Sales and marketing 44,452 42,599 General and administrative 24,982 27,398 Depreciation and amortization 5,961 6,210 Total operating expenses 125,260 129,685 Operating income (loss) 19,880 (60,854 ) Interest expense, net 1,977 2,521 Other (income) expense, net (114 ) 271 Income (loss) before income taxes 18,017 (63,646 ) (Benefit) provision for income taxes (2,183 ) 13,774 Net income (loss) $ 20,200 $ (77,420 ) 48 Years ended December 31, 2022 2023 Percentage of Revenues: Revenues 100.0 % 100.0 % Cost of revenues 51.1 % 68.7 % Gross margin 48.9 % 31.3 % Operating expenses Research and development 16.8 % 24.3 % Sales and marketing 15.0 % 19.3 % General and administrative 8.4 % 12.5 % Depreciation and amortization 2.0 % 2.8 % Total operating expenses 42.2 % 58.9 % Operating income (loss) 6.7 % (27.6 )% Interest expense, net 0.7 % 1.1 % Other (income) expense, net (0.1 )% 0.2 % Income (loss) before income taxes 6.1 % (28.9 )% (Benefit) provision for income taxes (0.7 )% 6.2 % Net income (loss) 6.8 % (35.1 )% The following is the discussion and analysis of changes in the financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cost of revenues and gross margin Years ended December 31, Change (dollars in thousands) 2021 2022 $ % Cost of revenues $ 175,058 $ 151,759 $ (23,299 ) (13.3 )% Gross margin 47.9 % 48.9 % 100 bps Cost of revenues decreased $23.3 million, or 13.3%, from $175.1 million for 2021 to $151.8 million for 2022.
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.
In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price is used. For finished goods, cost is computed as production cost including capitalized inbound freight costs. The valuation of inventory requires us to estimate excess or obsolete inventory.
For finished goods, cost is computed as production cost including capitalized inbound freight costs. The valuation of inventory requires us to estimate excess or obsolete inventory.
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, and political tensions with China and elsewhere.
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.
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.
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.
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. (3) These amounts represents unrecorded open purchase orders at December 31, 2022, primarily for inventory-related purchase orders with suppliers.
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.
The decrease in depreciation and amortization was mostly driven by the amortization of finite-lived intangibles being fully depreciated in the fourth quarter of 2021 offset by slightly higher depreciation on new assets placed in service.
The slight increase in depreciation and amortization was mostly driven by the increase in depreciation on new assets placed in service offset by a decrease in amortization of finite-lived intangibles and purchased software.
These outflows are partially offset by $29.8 million in proceeds received under our new credit facility, $4.8 million in proceeds from the exercise of share options and $1.8 million in proceeds from the issuance of ordinary shares under our employee share purchase program.
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").
As of December 31, 2022, we had $45.0 million available under our revolving commitments, with no amounts drawn thereunder. In accordance with the terms of our credit facility with Bank of America, we began making quarterly principal payments of approximately $0.7 million on our term loan, commencing with the quarter ended March 31, 2022.
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 assess our liquidity in terms of our ability to generate adequate cash to fund our operating, investing and financing activities. We believe our existing cash, operating cash flow and revolving credit facilities provide us with the financial flexibility needed to fund normal operating expenses, to meet interest and principal requirements of our outstanding indebtedness, and fund capital expenditures.
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.
Interest expense, net Years ended December 31, Change (dollars in thousands) 2021 2022 $ % Interest expense, net $ 4,269 $ 1,977 $ (2,292 ) (53.7 )% Interest expense decreased $2.3 million, or 53.7% from $4.3 million in 2021 to $2.0 million in 2022.
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.
Basis of presentation Revenues Our revenues are generated primarily from the sale of our products, which consist of hardware with essential embedded software. Our revenues also include amounts for software products, extended warranty on hardware products and subscription services. We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met.
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.
(2) These amounts represent the scheduled principal payments based on their contractual maturities related to our term loan with Bank of America and interest payments based on the interest rate in effect on December 31, 2022 of 6.40%.
(2) These amounts represent the scheduled principal payments based on their contractual maturities related to our term loan with Bank of America and interest payments based on the all-in interest rate in effect on December 31, 2023 of 8.7227% through February 2025 and then reduced to 7.2277% when the applicable rate is reduced from 3.25% to 1.75%.
Operating expenses We classify our operating expense as research and development, sales and marketing, and general and administrative expense. Personnel costs are the primary component of each of these operating expense categories, which consist of personnel costs such as salaries, sales commissions, benefits, and bonuses, as well as share-based compensation expense.
Personnel costs are the primary component of each of these operating expense categories, which consist of personnel costs such as salaries, sales commissions, benefits, and bonuses, as well as share-based compensation expense. Depreciation and amortization of long-lived assets is separately disclosed in the statements of operations.
For the year ended December 31, 2022, our income tax benefit decreased by $3.3 million from the year ended December 31, 2021 primarily due a change in the valuation allowance of $8.8 million as a result of the recognition of a valuation allowance of $0.9 million on California deferred tax assets on research and development during 2022 versus a release of the valuation allowance on UK deferred tax assets in 2021 of $7.9 million and a decrease in tax benefits on share-based compensation of $2.6 million offset by an increase in the benefit on Foreign Derived Intangible Income of $2.3 million, an increase in research and development tax credits in the UK, U.S., and U.S. states of $2.0 million and a tax benefit of $0.9 million on revaluation of the UK deferred tax assets at a higher rate.
For 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.
We expect to regularly assess market conditions and may raise additional equity or incur additional debt if and when management, along with our board of directors, determines that doing so is in our best interest.
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.
Benefit for income taxes Years ended December 31, Change (dollars in thousands) 2021 2022 $ % Benefit for income taxes $ (5,515 ) $ (2,183 ) $ 3,332 (60.4 )% Effective income tax rate (17.3 )% (12.1 )% Our tax benefit decreased from a tax benefit of ($5.5) million in 2021 to a tax benefit of ($2.2) million for 2022.
(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.
Europe, Middle East, Africa revenues decreased mostly due to lower PMP revenues due to lower demand and technology transition to new gigabit technologies within our product portfolio, partially offset by higher Enterprise revenues due to strong demand and new product introductions for Wi-Fi and switching products and higher PTP revenues due to higher demand from defense business.
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.
The assumptions used to derive these estimates did not change significantly in the current period, nor did the value of each estimate. 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.
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.
For the year ended December 31, 2021, the Company’s effective tax rate of (17.3)% differed from the U.S. statutory rate of 21.0% primarily due to a tax benefit on the release of a valuation allowance against our UK deferred tax assets of $7.9 million and a $3.4 million tax benefit arising on employee restricted share vesting and option exercises.
For the year ended December 31, 2023, the Company’s effective tax rate of (21.6)%. The effective tax rate differed from the U.S. statutory rate of 21.0% primarily due to a tax expense on the valuation allowance in 2023 of $35.4 million.
On November 17, 2021, we borrowed the entire $30.0 million term loan, which was used to pay off the term loan with Silicon Valley Bank. As of December 31, 2022, we had $28.0 million outstanding principal debt on our term loan, including the current portion of $3.3 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.
Operating expenses Years ended December 31, Change (dollars in thousands) 2021 2022 $ % Research and development $ 51,322 $ 49,865 $ (1,457 ) (2.8 )% Sales and marketing 41,819 44,452 2,633 6.3 % General and administrative 25,065 24,982 (83 ) (0.3 )% Depreciation and amortization 6,171 5,961 (210 ) (3.4 )% Total operating expenses $ 124,377 $ 125,260 $ 883 0.7 % Research and development Research and development expense decreased $1.5 million, or 2.8%, from $51.3 million in 2021 to $49.9 million in 2022.
Gross margin benefited from lower production costs due to decreases in component charges as a result of increased availability of components. 50 Operating expenses Years ended December 31, Change (dollars in thousands) 2022 2023 $ % Research and development $ 49,865 $ 53,478 $ 3,613 7.2 % Sales and marketing 44,452 42,599 (1,853 ) (4.2 )% General and administrative 24,982 27,398 2,416 9.7 % Depreciation and amortization 5,961 6,210 249 4.2 % Total operating expenses $ 125,260 $ 129,685 $ 4,425 3.5 % Research and development Research and development expense increased $3.6 million, or 7.2%, from $49.9 million in 2022 to $53.5 million in 2023.
A summary of our contractual obligations at December 31, 2022 are as follows (in thousands): Payments due by period Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total Operating lease obligations (1) $ 2,154 $ 1,922 $ 384 $ — $ 4,460 Term credit facility (2) 3,281 24,750 — — 28,031 Term credit facility interest (2) 1,716 3,978 — — 5,694 Purchase obligations (3) 84,978 180 — — 85,158 Total $ 92,129 $ 30,830 $ 384 $ — $ 123,343 (1) These amounts represent the undiscounted non-cancelable remaining lease payments.
A summary of our contractual obligations at December 31, 2023 are as follows (in thousands): Payments due by period Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Total Operating lease obligations (1) $ 1,944 $ 4,614 $ 3,265 $ 6,730 $ 16,553 Term credit facility (2) 3,281 22,125 — — 25,406 Term credit facility interest (2) 2,108 2,801 — — 4,909 Purchase obligations (3) 103,570 90 — — 103,660 Total $ 110,903 $ 29,630 $ 3,265 $ 6,730 $ 150,528 (1) These amounts represent the undiscounted remaining lease payments.
Revenues by product category Years ended December 31, Change (dollars in thousands) 2021 2022 $ % Point-to-Multi-Point $ 204,756 $ 114,941 $ (89,815 ) (43.9 )% Point-to-Point 60,761 67,083 6,322 10.4 % Enterprise 66,933 109,844 42,911 64.1 % Other 3,404 5,031 1,627 47.8 % Total revenues by product category $ 335,854 $ 296,899 $ (38,955 ) (11.6 )% Point-to-Multi-Point Our PMP product line comprised 61% of total revenues for 2021 and 39% of total revenues for 2022.
Revenues by product category Years ended December 31, Change (dollars in thousands) 2022 2023 $ % Point-to-Multi-Point $ 114,941 $ 95,197 $ (19,744 ) (17.2 )% Point-to-Point 67,083 80,765 13,682 20.4 % Enterprise 109,844 39,097 (70,747 ) (64.4 )% Other 5,031 5,136 105 2.1 % Total revenues by product category $ 296,899 $ 220,195 $ (76,704 ) (25.8 )% Point-to-Multi-Point Our PMP product line comprised 39% of total revenues for 2022 and 43% of total revenues for 2023.
We also believe that any extended or renewed economic disruptions or deterioration in the global economy could have a negative impact on demand from our customers in future periods. Accordingly, current results and financial condition discussed herein may not be indicative of future operating results and trends.
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.
Summary of contractual obligations We lease office space and equipment under operating leases that run through 2026. Additionally, our BofA Credit Agreement matures and becomes due and payable in November 2026.
Additionally, our BofA Credit Agreement matures and becomes due and payable in November 2026.
Other expense (income), net Years ended December 31, Change (dollars in thousands) 2021 2022 $ % Other expense (income), net $ 244 $ (114 ) $ (358 ) (146.7 )% Other expense (income), net changed from expense of $0.3 million in 2021 to income of $0.1 million in 2022. The change is primarily associated with foreign currency fluctuations.
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.
Revenues by geography Years ended December 31, Change (dollars in thousands) 2021 2022 $ % North America $ 173,491 $ 133,897 $ (39,594 ) (22.8 )% Europe, Middle East, Africa 93,082 90,883 (2,199 ) (2.4 )% Caribbean and Latin America 40,974 31,223 (9,751 ) (23.8 )% Asia Pacific 28,307 40,896 12,589 44.5 % Total revenues by geography $ 335,854 $ 296,899 $ (38,955 ) (11.6 )% 45 Revenues decreased in 2022 compared to 2021 reflecting lower revenues in North America, Europe, Middle East, Africa and Caribbean and Latin America partially offset by higher revenues in Asia Pacific.
Revenues by geography Years ended December 31, Change (dollars in thousands) 2022 2023 $ % North America $ 133,897 $ 131,943 $ (1,954 ) (1.5 )% Europe, Middle East, Africa 90,883 44,169 (46,714 ) (51.4 )% Caribbean and Latin America 31,223 20,729 (10,494 ) (33.6 )% Asia Pacific 40,896 23,354 (17,542 ) (42.9 )% Total revenues by geography $ 296,899 $ 220,195 $ (76,704 ) (25.8 )% Revenues decreased in 2023 compared to 2022 in all regions, with the largest decrease in Europe, Middle East, Africa.
Research and development expense decreased mainly due to a $4.7 million decrease in corporate bonus expense due to lower financial performance along with $0.3 million higher capitalized software costs due to increase in projects eligible for capitalization and $0.2 million lower engineering project material costs.
These increases were partially offset by $1.8 million higher capitalized software costs due to an increase in projects eligible for capitalization, $0.8 million lower engineering material spend based on timing of projects and $0.7 million decrease in corporate bonus expense as we failed to meet bonus targets.
Any adjustments to the valuation of inventory are included in cost of revenues. Product warranties We provide a standard warranty on our products, with the term depending on the product, and record a liability for the estimated future costs associated with potential warranty claims at the time products are sold.
Any adjustments to the valuation of inventory are included in cost of revenues. We record a liability for firm, noncancelable, and unconditional purchase commitments with contract manufacturers and suppliers for quantities in excess of our future demand forecasts consistent with the valuation of our excess and obsolete inventory.
The decrease in general and administrative expense was primarily due to $2.3 million lower corporate bonus expense due to lower financial performance and $0.3 million lower insurance expense.
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.
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. 48 Cash flows from financing activities Net cash used in financing activities of $23.0 million for 2021 was primarily due to payment of $55.3 million on our existing term loan, $2.8 million of taxes paid on net share settlement of equity awards and a $1.2 million payment of debt issuance costs incurred with our new credit facility.
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.
Revenues are recognized net of estimated stock returns, volume-based rebates and cooperative marketing allowances that we provide to distributors. We recognize subscription services revenue ratably over the term in which the services are provided and our performance obligation is satisfied.
The largest decrease in revenues was in our enterprise product category driven by lower demand due to high channel inventories and slowing economies along with increased stock rotations and the aforementioned incentives. We recognize subscription services revenue ratably over the term in which the services are provided and our performance obligation is satisfied.
Caribbean and Latin America revenues decreased due to lower PMP revenues due to lower demand and supply and distribution issues during the first half of 2022 along with lower Enterprise revenues partially offset by higher PTP revenues due to increased demand for backhaul products.
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.
These decreases were mostly offset by $1.5 million in higher share-based compensation expense due to new grants issued, $1.0 million higher staffing-related expenses due to increased headcount, $0.8 million higher contractor costs due to increases in the number of contractors to support ramping of projects, $0.2 million higher travel-related costs and $0.2 million higher homologation and regulatory testing expense due to increase in new product introductions.
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 increase in Asia Pacific revenues was driven by higher Enterprise revenues due to improved supply and larger deals along with increased PMP and PTP revenues.
The decrease in revenues in Asia Pacific was driven mostly by decreased enterprise revenues as a result of lower demand due to high levels of inventory in the channels and decreased PMP revenues.
Removed
The Enterprise portfolio includes Wi-Fi access points, wireless aware switches, and other networking devices. The Subscription and Services portfolio includes network planning and design as well as cloud or on-premises network management and control.
Added
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.
Removed
Trends impacting our business Our business and the markets that we serve are experiencing widespread macroeconomic uncertainties, including supply chain constraints, inflation and monetary policy shifts, recession risks, continuation of the COVID-19 pandemic and restrictions on business activities imposed by governments, and potential disruptions from the Russia-Ukraine conflict, the U.S. trade war with China and other global political tensions.
Added
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.
Removed
Although we have experienced improvement in our manufacturing and supply chain operations, we continue to experience constraints, with some lingering component shortages, extended lead times, and elevated component and supply chain costs. We continue to work closely with our contract manufacturers and supply chain partners to ramp production following a period of delayed component sourcing and workforce disruptions.
Added
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.
Removed
We have extended our inventory of certain key components to alleviate component shortages, and extended our demand planning and purchase commitments to alleviate delays in component sourcing and the risk of future supply chain disruptions, but we cannot be certain that such delays or disruptions will not occur, or that our extended demand planning horizon will adequately address these disruptions should they occur.
Added
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.
Removed
In addition, inflation pressure in our supply chain, scarcity of some materials needed to build our products and disruptions to our manufacturing process have increased our cost of revenue and have impacted, and may continue to negatively impact our gross margin.
Added
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.
Removed
Our operating cash flows have also been and may continue to be negatively impacted by increased component inventories on hand or at our contract manufacturers, awaiting supply of a limited number of scarce components necessary to build and ship the completed product.
Added
Starting in the second quarter and continuing through the fourth quarter of 2023, revenue from our Enterprise products declined, partly resulting from increased competition as a result of readily available component supply reducing our prior advantage in supply and order fulfillment, aggressive pricing by our competitors and poor macroeconomic conditions in our primary markets resulting in lower order volumes from our distributors.
Removed
While we have increased our inventory of key components, technology shifts could result in this increased inventory becoming excess or obsolete. Although overall demand remains stable, supply chain and manufacturing related constraints could impact our ability to fulfill this demand and as a result could negatively impact our business in future periods.
Added
Additionally, revenues decreased due to a delay in government defense orders due to U.S.
Removed
In addition, while we have increased our inventory of key components, technology shifts could cause this increased inventory to become excess or obsolete before it is deployed, as new product development relies on different components.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−4 removed4 unchanged
Biggest changeWe are exposed to interest rate risk from fluctuations in the US Dollar London Interbank Offered Rate, or LIBOR, that is a component of the interest rate used to calculate interest expense on the debt.
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.
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, 2021 and 2022.
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.
In addition, we had two customers representing more than 10% of revenue for the year ended December 31, 2021 and one customer representing more than 10% of revenues for the year ended December 31, 2022. 52
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
Interest accrues on the outstanding principal amount of the term loan on a quarterly basis and is equal to the US Dollar LIBOR rate per annum determined by reference to the 1-month, 3-month or 6-month US Dollar LIBOR rate as selected by the Company, plus an applicable margin between 1.75% and 2.25% as determined by our financial performance as measured by the consolidated leverage ratio.
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.
At December 31, 2022, the applicable margin was 1.75% and the effective interest rate on the term loan was 6.86%. 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 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.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest rate risk We had $28.0 million of debt outstanding on our term loan facility and $0.0 million of debt outstanding on our revolving credit facility as of December 31, 2022 under our BofA Credit Agreement.
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.
Removed
In July 2017, the United Kingdom’s Financial Conduct Authority ("FCA"), which regulates LIBOR, announced it will no longer compel banks to submit rates for the calculation of LIBOR after 2021 and in March 2021 confirmed the dates each tenor would cease.
Added
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%.
Removed
The 1-week and 2-month US Dollar LIBOR tenors ceased on December 31, 2021 and the remaining five US Dollar tenors (overnight, 1-month, 3-month, 6-month and 12-month) will cease on June 30, 2023.
Removed
The Company's current term loan with Bank of America was borrowed as a Eurodollar loan which is indexed to the Eurodollar Rate (the rate equal to the London Interbank Offered Rate). The BofA Credit Agreement matures on November 17, 2026, which is after the cessation of all tenors of the US Dollar LIBOR rate.
Removed
The BofA Credit Agreement contemplates the discontinuation of LIBOR and provides that a benchmark replacement rate shall be determined by reference to other applicable rates and additionally allows the Company to switch to a Base Rate loan, as defined in the BofA Credit Agreement. The Company will continue to actively assess the related opportunities and risks involved in this transition.

Other CMBM 10-K year-over-year comparisons