Airspan Networks (MIMOQ) 10 Aug 222022 Q2 Earnings call transcript

Greetings and welcome to the Airspan Networks Second Quarter 2022 Earnings Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please be aware that the slides for today’s event are available for download through the webcast.

As a reminder, this conference is being recorded. to call like CFO, to now Mr. would turn over the Airspan’s I Brant. David Thank you sir. ahead. go Please

filings future forward-looking very risks and you differ available ir.airspan.com. period SEC statements. statements projections XX-Q risks actual non-GAAP certain items our call, Investor are to forward-looking following financial and are forward-looking our are that statements Comments not at our and detailed from involve quarter or significantly measures. and could ended are financial Form including on Relations website our XXXX this which we considered fact uncertainties. report available We Thank review to of The will uncertainties that operating much. and in XX, The results for discussion the on and you on results discuss our encourage June other and financial On our our will earnings release quarterly include cause website.

financial turn Form the directly and QX during our For the the quarterly reconciliation measures, presentation see most XXXX measure, call. The will be identification points on website available I comparable report for and earnings and and investor to to at will Stonestrom. reference our referred Airspan’s over is our on two, release the between now the XX-Q. non-GAAP Chairman Eric of financial call this CEO,

quarter earnings morning Good David. and thank Airspan’s you call. you, second us Thank joining for for

progress I'd business. today. the thank begin, on in like a the welcome us to the I for we Before like joining extend our following call our also warm to to would shareholders analysts

your general monetize color with what Airspan today and Session. a I comments financials. these take is general some so we of Then in with to well Brant questions add start the market will will and in trends explain to site. for Q&A and worldwide makes review progress will Our trends opportunities. and our positioned rollout a update the you on market month last operations on Glenn plan Laxdal XG David the and on

from second and margin quarter reflected issued As gross collection and Airspan’s year XQ as improved well XXXX. to XQ for less gross XX.X%. improved from Revenue significant usage in expediting. compared can the points growth XQ quarter results supply as margin as cycle Cash chain XXXX extra progress versus reducing with see the the back yesterday quarter, percentage eight and you growth charges our in ago, significant line to improving end the the with second increased compared top XX% in quarter, XQ loading decreased linearity the

While receipt customers the improved operating orders it in continued and cloud. heartening chain. revenue our of four technology largest have the in hyperscaler two and signing supporting deals additional XQ was substantial the that building conditions connects smoother growth our challenging, an functioning remained to users purchase supply on private specialize from to Customer We momentum in quarterly with wireless network.

New continue markets. to of expand like to host, use be instead neutral our addressable used system, distributed cases microcells antenna

[indiscernible]. Cost closed Macro silicon record relatively challenges volume for systems effective deployment are with our away coverage, and The harnessing of infrastructure model. leveraging a manufacturers. XG innovated coverage new operators, broad cell rollout code on the product is density age differentiated of progress and based a significant number cell design, [indiscernible] giving are hyperconnected to covered. this from other RAN market are optimized the low handful been of than some the go Our and XG order more that projects growth of of large to will to to micro changing accounts. has double cost host to prior XG coverage breakthrough deployments M&O flat for two software equipment product detail The of the largest through buildings our more lower and buying solve the a neutral for products capacity Glenn customer our substantial into in capacity. in in-building microcells quarter of

design also assist of vital network open industry cost-effective of millions commitment $X.X the The elements are network Geopolitical product. equipment RAM opportunities. management mission. a substantial well leading of company recently track billion Airspan a CHIPS the points. to software-defined as approach range and increasing Our puts enacted RAM of the Act potential record enables concerns into end also with in the furthering this of U.S.-based a is open positioned financial

million key the release network components most RAM national open attributes its in large infrastructure. aspects by to government our our And UK some of deployment. security is £XXX world. government, communications the looking has planned addition, scale of Today, hastened innovative open for RAM recognized unique strengthen the a In portfolio the and innovations friendly and for are to technologies of largest

our and on me perspectives Chief Operating Officer provide Let the additional President turn to our Glenn to over progress. call Laxdal,

I our half. Eric. Thanks, business first QX and the some in cover regarding in will detail

networks, mobile Rakuten U.S. in also the We're good in networks, with revenue deployment X a market business The In the seeing networks second good gross to the meeting Airspan Jio a end operates supply in with volume the margins quarter Reliance and a high and in in with chain revenue Tier wireless. environment new of also seeing market. private good mobile coming progress Global and the and demand we strong developing operator drive range. in QX. areas, Cable in we're customers MSO results our both were from in progress challenging lead and across orders three guidance encouraging bookings fixed private remain large just above with both customers continue networks, in significant

momentum deployment. new macro Going forward the micro with see cell our as primarily to continued customers market as expect we adding to as cell large shifts from well ones

in and in we U.S. wave of We particular will deployments cell micro millimeter growth able In in cell the our automation see Asia take and to micro be the capabilities. unique related advantage deployments on front, CBRS

on North Asia. and traction private seeing trials growing enterprise going we networks We're networks. second the Europe focus is The XG America, multiple with on private and deployments market across

air are network half is this are would ground market currently we're XG year deployment XG is a bookings private networks private deploying across private private network Off the approximately planes. and we're uptake networks also the – which added private of those a ground market the the to XG area with of we customers. XG in seeing XG which momentum and go in In more While our networks the range across developing XXX we for today over of than first GoGo. nascent half One bring significant XXX brings networks, stations the XG evidence the accelerating GoGo total deployments. of XG. on that cards, We're related

we're XG XXXX. to shipping In we GoGo air volume XG XXXX in and in will be addition, cards cards in air shipping

stations end we've the XXX of two-thirds will ground and of June, in As about deployment QX. the deployed the of complete

The first X-gigahertz deployments step third August. field solution function or the with on access. we product. in toward and the our is market XG and a FCC to the solution the we're expect focus for generation bands customers The We're X.X MIMO. in a we market with Tier [indiscernible] the bandwidth to perspective, is ASICs to and gigabits We're currently be product per testing a expect single fixed next end of wireless we X trialing multiuser This X-gigahertz From three the market end improvement by in in QX. achieving solution of address performance is is both and second leading. complete

supply chain the each strong is COVID shutdowns these in demand QX supply including challenges shortages, our delivered related successfully markets, facing component of the significant de-commit remains in despite three China. continued challenge. We While a and results

margin. some to our this price we've of factors Taken that to offset been secure these logistics contribute costs with To component increases together customers. and able higher key impact impacted gross

XXXX chain We expect impacts the the with supply from second to the long times board. continued into across of lead see half

turn let me to David it to Now results. walk the through financial over

same for year. last $XX.X sequentially second year's Thanks of quarter last the Glenn. quarter we was to up million and over last profit Referring XX% second to presentation, the quarter. from the down and million, period XX% in XX revenue the quarter compared saw Gross of first up XX% up from Slide X% $XX.X investor

and to than depreciation quarter. the of shipments yen quarter loss from effectively. year-over-year to quarterly million improvement product schedule with together down the engineering net more cadence a loss a is second more period. was cost freight to shipping of the and us gross this last The loss sequential a higher net XX.X% during net components variants quarter margin in quarter the the quarter $XX.X loss from $XX.X a loss quarterly the Adjusted margin effect majority on lower to at results. in $XX with costs ago costs in that the was second last which was the $XX.X quarter, due of last the in mix quarter's to distribution year and the loss margin higher up and Japanese first quarter, ago of non-recurring $X.X to compared quarter compared million of note year's primarily million revenues million last quarter due average and related linear to higher million Second quarter current revenue. improve XX.X% and over a billion Production It of EBITDA revenue $XX amortized XX.X% in the Gross of quarter with was year allowed of important period XXXX. of the was

orders the by the chain products in those dominated an to at times is approximate priced the resulted point higher for gross Specifically be X related of Demand were our rate percentage costs. margin. from which and decrease in and challenges this continue transportation quarter’s yen depreciation booked long-lead strong, supply

components, supply to changes, realize through the our long company's mitigate the term and anticipate XXXX. these challenges In partners. continuing strategy. obligations design instituting address We need closely with chain to finding work order its hard challenges, to satisfy continue such We alternative technological and to working to extend

reduction level to expand in steps continuing operations headcount to to taken factor $XX company's by geographies to the results, reduce evaluating implement the in focusing cost We're and efforts the have approximately cost actions approximately operating lower from with quarter XX% costs geographies. cost to reductions additional expenses of initiatives million. reduce financial including higher company's operating labor and in receivables XQ We the cash non-strategic and force fourth improve by

Asia anticipate XXXX QX combination million margin environment, and $XX gross tightness million of for expenses COVID-XX top among restrictions of XX% and the from chain approximately These and things, $XX component now $XX challenges we the ended XX%. approximately Through we expect supply cash. line supply by of Given in of to views impacted other X%. may quarter a between XXXX currency be of [indiscernible] million year availability depreciation growth related the with chain with full revenue the

was the use cash $X.X the quarter. With and the your Glenn that million quarter to will primarily in Second Eric, please to questions. due Operator, I question. the open loss call prompt

Instructions] is [Operator go Please today The Notter George you. Jefferies. coming from of Thank question ahead. first

Hi guys. a to quarter having there's renegotiate I with I Thanks two or very breaking a ago. there of in covenants increased the XX-Q much. at look filing potentially the an through that some and likelihood of and language we I about renegotiated, noticed covenants think Fortress, took some guess I

Fortress? can you renegotiated relative getting where balance sheet are kind So and about talk the covenants likelihood with to of the of you and those

Sure. Yes.

me.. Let

Eric?

me put can overview more then detail. of in comments David and Let couple a go

We with active. very relationship good a Fortress. They're have

metrics. been have through renegotiation of set obviously on a this and have We focus particular

receivables mentioned million flow we our, David which $XX our cash are in will instance projection. on As in for take focusing forward factoring, about

it there negotiate taking they're to needing to happen, well an expense cost we're holder a in active lender does very an we much. best do David. So operational of can David? measures equity And with job this if equation, together clearly not as as are shareholder, the

on Yes. the terms cash is we [indiscernible] covenant. so that EBITDA covenant Thanks two and the focused Eric. are Yes the

seeing are pressure terms tightened that's – are and We major supply with on we seeing putting our our CMS significantly DPOs.

position our with participant So with our we're in in measures Fortress reducing and like as discussions – receivables active OpEx cash and helps an improve factoring this.

recently about in project. there an then some article, And talking it. GoGo Got delays about I the Okay. project think with was that

well? it I sounds cards for think mention Can the going bit there kind you talk delay cash I XG driving the to And business a correct? impact heard you be is delay. were and as – you a this indeed what's that your, how delivered XXXX, of year and about that like that of is that line does of views and generation can in

Yes. that I'll take on.

correct. So – in you're so

We base are the shipping base today station the – stations. XG

total the way site in deployment at that QX. station, we'll QX. base And We're about two-thirds ground site ground ground the station deployment So we've as end completed the through complete the or stations deployment the station of XXX development. of the of

shipping XG go we we're that In development and into go in air the addition cards that are XG cards. airplanes the – into air on the

expecting that chipset set on of chip are about the populates And has about delayed months. get that the We by now. air six cards XG back to that right been

we're of first taking were QX XG into deployments on half part card of now last the XXXX. shift expected in the the So that and those the

Got it.

involved process how participate operate? I'm of in thinking Okay. And then that Airspan? much. UK one to the it there of program there? that What's Thank guys a being to the sort Is the an CHIPS Act, very also government the you about million. £XXX ask, I opportunity funds? has just an then for those other might you sounds and application Is likelihood wanted like mentioned

for very was We've rip George, consistently to on it. money starting pruning out both London and very money and instance, with. ban. that. wanted to we this But Washington replace process bit focused in be the that the language other the have a benefits particular since come – survived we Huawei very, distributed very working It the quite of of you're been had of initiative, familiar as odd-off

in ramp So become suppliers We significant but something RAN through in step of Open and security UK, U.S. back done XXXX. the don't chain around by a there's by that is bring a and to In second language this ministry child U.S. and the develop programs with program supply there. anything the it's going to our very open to post DCMS, working that further the helpful it's the dispersing will their for the center that queue. the collection structural projects experience poster of we're is world, we major funding how in And a out we've front And the a the now funds And which – how our play as industry and with get some of the resilience we're nice the Rakuten obviously trial for think were some field next which also crafting to forecast at I and funds. sponsored in half short-term responsible ideas dispersed. perfect have for

DCMS some of of roll within I urgency large governments. out are here. sponsored think a a and by sense Well one carriers done those major There's you'll urban with funds. in done a well XXXX. the it see And both scale candidate is the started of we for real yes, a –

I'll Okay. Super. Thanks much, very it pass on. guys.

Okay. Thank you.

The next ahead. go Markets. thank Northland please ahead. Capital of Tim, your – is Instructions] phone coming Tim sure make go question Savageaux from Please [Operator you. Please

Hi. morning. Yes. Good

versus of be quarter is seeing might – you seeing Sorry on what – really about sort and you're terms in chain get ask kind supply where the what And year is a I what you're And that. revenue side? well, I'm then have question or to be expect issues this targeting wanted expectation supply the about year? your what to what for of X what's given issues, the you business to for the I the X% kind of expecting these trying growth, or be of a might growth up. what follow common that seeing, could you booking

Tim. morning Good Yes.

got product Our private with fixed a then our network bookings by continued which outlook customers. traction and obviously is very very we've bolstered is our side line. favorable. growing being got We've really bigger had new wireless, We've fast

the it's outlook happening So versus considerably bookings on plus on XX% revenue side. an what's it's growth, we have higher

uptick like what side you easing along QX you pretty to EBITDA even pretty getting planned looks if of close would be and OpEx at the to I a to that. And looking that wonder in guidance indicative supply Great. that's revised attribute that with the in that least scenario? can reductions, it decent the at any outbreak in QX. on revenues in still Appreciate implies or

Yes.

wanted Just to...

a... And have we do

sorry. Go ahead,

recently the had quarter, A on couldn't strong that in days. more orders convert we've XX outlook that came some fourth we in

ship into those starting those quarter, good fourth orders flow the initiatives. of on will wireless the the supply six new but to of visibility the So as a We've there, demand well third on products chain backlog the healthy carrier. wins in a with and got fixed specifics tremendous with wireless some here – the on some some significant and as quarter pretty side traditional a with

the done a focus fourth make the sure supply first got improving flows we've So procurement And driving quarter. expectations we've work we good certainly and advance, flow. the chain lot more in linear a on to were that lead lot a more think the quarter. for production we've that's long of where done It's time I in

is the get in case. So breakeven It the and the on in of and Japan deals first the really look additional we've year kind the half pre become OpEx adjusted in was now on [indiscernible] at that know, strong that's point, focused your the yes, flowing that of second where we're Our done have laser may as you of – end we of exchange. also current to our to by rates some basis. pricing work the obviously we is through priced had getting quarter, here looking the but we're it that And we fact reductions off as and new backlog as – And would pre-inflation, hurdles being but business the made. as of well pricing large We're to less love moment. be breakeven at EBITDA the that a

Got very much. it. Thanks

Please Research. ahead. Barrington Chris coming go The you. is of Thank next question from Howe

Good questions. morning. Thanks for taking my

of some questions to there. Just follow-up Tim's

in additional last pricing fourth the mentioned flowing quarter. the point, through here You the

the trends those sequentially of, of we and half the third you how XXXX, expect Should you continuation kind Some into better a as half first when look at quarter. optics we look versus it of second it the the look cadence improved of building a conservative of kind third environment. quarter remain guidance and on to line an that we margin? gross are thinking hopefully relatively about we context as with You in mentioned should

Yes, supply This next also fourth effect the increased half should – for is supply the we're I pricing challenges costs quarter into transportation, that David. some then and in easing and seeing the should think, of of in Hi of think example. first I year. into already we chain – come that now Chris. availability

a more going points year. chain percentage So next supply we as get should couple eases, through that easing into

Okay, for great. now. That's my question. taking I for right Thanks all have

Chris. Thanks

you. Instructions] go question [Operator coming ahead. Thank of is next Scott ROTH. The from Searle Please

Eric, networks both guys good results reported markets Hey, Thanks relative fixed But access? provide for and of between you not was end Hey, mix couple to the then as terms different morning. private this sure questions. looking of wondering missed follow-ups. my the if if kind up the I front. XXXX I'm especially wireless XQ and taking in I you're had a And in outlook, any

do David, you want to? Yes,

by NRE, Scott. markets out of split split we we products the for Yes, don't types revenue licenses

deployment follow-on initial is continued magnitude tail what a you thinking at private where the see the going pilots, And you're how orders you be networks should in just to I'm Eric, deployments about that? to sounds And those us is each the start individual forward? opportunity, then Okay. It per quarter in there help also of looking XXX wondering size various you of terms I'm do but up wondering of the to deals. frame terms like if could

start I'll encouraging. tail super a second. Yes, is with The

have going systems bigger da my been of mentioned comments, where is historically I in buildings DAS the into would As we deployments one purchased.

orders forward the of company. be time, XX there very tech most of one are cover for of and a to at getting to DAS cost we're XX% We recent blocks the that. buildings And XX instance, this lean estimated expanded

where got, major airline path to and seven-figure of it's are deals. good time a waste us adopters locations, types But A here I be they've me, with those about that one considerably a a gets we are whole have manufacturer, the every is in those, one it. dimensions a would kind And we so do got group don't to And get Today, carrier example don't of lot orders growth almost excuse when positive opportunities. $XXX,XXX a ones contagion or have that who of think smaller. right. to seven-figure location, of it has there XX early-stage

Germany. we instance, For in an airport have

it's significant a that got a been of us the And on there then they And more I a footprint. one airports think have for while to that. phases airport they expand won Phase back, awarded us queue awarded the sister the we X of in the just strength X bunch announced a Phase airport.

of networks negotiate a And spent network. the IT on very about XGPP supply So, what's now because on to that. in the XG. private have on networks coupling spend major of sometimes to taken of running ours a agreements who lot excited Network-as-a-Service the world And straight we're there stage the historically we distribution some with distribution. set that's seeing extremely the that Fang and agreements now substantial the and those released that those happening out that very the names are partners through conversion products been seeds through as also their with integrator global spent have, the themselves trends systems involved are was also system in have ours of partners, or supply been being technology planted Wi-Fi We've And nice with those us. customers household signed partners that facets have have

very we're exciting So, That's Airspan I think about six there's going effect big. there lead ago the multiplier today more XX sales next due than times say would to cautiously were it's year. getting months that. just people And on I a talking

transition tranche very least could there's over by up GoGo to And the on your $X.X could I up be And initial figure $XXX Congress Eric million. network And How you got have before in on upside allocation framework replace you positioned guys? I'm provide that they had you. we've positioned customers well for there That's you significant wondering you that other rip opportunity. that potential and their infrastructure? expect network color, translate from approved within Thank are some could front, that $X if would others, billion at Are of upgrade customers as you that billion and of you then that ZTE are think and FCC. to good. of their $X.X that helpful. to take Very one there a that billion front?

So, customer the the mentioned yes, first airplane selling are that Glen comments, on as we today the into side XG in mix.

So I'm pretty confident on the the infrastructure side award. and excited about

And so feel positioned. well therefore very

pass On initial because the money, about And OEMs other helping a we of the and has products customers make to networks example, matter an on now just for we of their will And getting who know because back applied and government cost. million of a customer products as because get cost U.S. the taxpayers. that that's big we up focus doesn't get us one of us have that let's Ericsson, we sharpened use as XX we And can and the their $XXX a third job approach actually because the third to was make, it's ended eventually. the it. done done job that the the

expensive rip expensive wireless of than us in this to really added need customers. less see just license that on there starting set the do customer's So one case, from to fixed into but spectrum and a right revenue serve fixed the the for now first them traditional suppliers. shipping using in also tower we're that's macro and replace we've seeing them putting to they're our They just Mimosa because because up there way OEM exciting adopting XX,XXX an and mix wireless it's the product side, our

to the see by the of it is I'm recipients focus So, money. and heartened exciting some

mentioned one the $X.X to billion. You X going billion point

a folks customers cost We'll would've sell of the tailwind a are to Airspan. for and And with we're that think of And that's rural sensitive that super I us say, sensitive. two America that just go a a becoming lot operator said ago been I attention small let's get architectural a year price big today. helping more that's should out

XX I and you with proprietary into if interest out, There've a competing think, Wi-Fi kind there's out also around lastly, could the of it coming call of some transition the Thank Very helpful. so solutions And, much. been Mimosa solution front I that. there. I'll gigahertz lot

I compare come from you kind that earlier of market. opportunity wondering really point up to and and expected think see where in of that I'm price how if an you have been in contrast Thanks you could ramping kind guys XXXX.

Glen.

take want You to that?

Sure. I'll that. take

trial in market in prepared the both going next to end significant one that single and addressed second in product four fresh is talked field now of gigahertz six generation, that their radio. to QX. we to with particular after new, market product. We're trials in have gigahertz hit on in trials first particular, one comments, the plus of to coming of three It's The CSIC gigahertz over seeing X demand product is Tier So, in go ASIC customers ability based currently with in product six a in spectrum. the rollout that product the toward about a with customer on be significant per for customer five the that Asian a and the gigahertz amount gigahertz building one is the right that we active

So both point – cost at side the about we're the side on or on the and access the the of of perspective it's extremely CPE garnering relative front UE extremely you're competitive that large a a competitive on leading demand. From and cost interest lot it's one front, to least talking those a competitors cost end to side.

in solid with the, come So XXXX. heading And pretty as that we to expect we market volume feel end solution and really, overall really at into about our QX the and we business first Mimosa half of QX the of position. the and good growth

on to So capitalize interest there's that. building want we a lot and of

much. so Thanks Great.

you, Scott. Thank

turn Thank you. floor I'd Stonestrom At CEO, the like this back Chairman Airspan’s to and over Eric to comments. time, closing Mr. for

Please thank XX. Slide you. Okay to learn

encouraging. Our business outlook remains

XG the product partners, supply major continues willing unabated chain the committed wide network are equipment, and economic across facing acceptance We ensure a headwinds paths for range diversity. network portfolio market. alternative to remain gaining is and critical of technology economy. Governments supply end invest wide a to domestic world have with to that infrastructure even users

upcoming our and Lastly, supply interest operating including again we these Jeffries events. ends measures. your our forward to look challenges operational model in support. conferences XQ have and improves meeting one-on-one We engaging [indiscernible]. with the been to coming as XXXX last That and costs reduce and Thanks investors broker note, able One months, chain logistics extraordinary conferences with efficiency update. these we will through participating and at earnings for

Ladies and gentlemen. event. This Thank your concludes for participation. today's you

log You off may this or disconnect lines webcast the at the of and rest your enjoy day. time your