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Airspan Networks Holdings Inc. (MIMO)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 2022 revenue was $41.1M, down 12% sequentially and +6% YoY; gross margin was 39.8% and adjusted EBITDA was a loss of $10.0M; diluted EPS was -$0.32. Management cited supply chain constraints but highlighted strong bookings and a book-to-bill >1.5 with shippable backlog >$100M .
  • Results missed external consensus: revenue $41.1M vs ~$46.2M and EPS -$0.32 vs ~$-0.24, driven by component availability and logistics costs; management guided Q4 revenue to $49–$57M at 42–46% GM, reflecting expected backlog conversion as supply chain eases .
  • Liquidity and covenant concerns were material: the company was not in compliance with EBITDA and minimum liquidity covenants and classified senior term loan, convertible notes, subordinated debt and related-party term loan as current; management is seeking waivers and alternative capital sources .
  • Strategic momentum continued in private networks: 87 new private 4G/5G wins in Q3, expanded enterprise and “smart city” projects; management emphasized demand tailwinds from Open RAN adoption and government support (e.g., U.S. CHIPS Act) .
  • Near-term trading catalyst: resolution (or deterioration) of covenant waivers and liquidity plan, plus Q4 execution against guidance amid supply chain normalization; longer-term, private network wins and Open RAN policy support .

What Went Well and What Went Wrong

What Went Well

  • Robust bookings and backlog: book-to-bill >1.5 and shippable backlog >$100M, positioning for Q4 revenue ramp; “We are encouraged by very robust bookings” (Eric Stonestrom, CEO) .
  • Private networks momentum: 87 new private 4G/5G networks in Q3, +45% YTD vs 2021; expanded enterprise base including a multi‑year Florida “smart cities” project .
  • Operating discipline: OpEx reduced by $4M vs Q2 (partly from restructuring); adjusted EBITDA improved vs Q2 (-$10.0M vs -$12.3M) .

What Went Wrong

  • Supply chain headwinds drove revenue shortfall and margin pressure: revenue came in below prior guidance and external consensus due to component availability, expediting fees, and logistics; gross margin fell YoY to 39.8% from 44.0% .
  • Escalating financing risk: non‑compliance with EBITDA and minimum liquidity covenants; reclassification of debt to current liabilities raised going concern doubt and potential default remedies (accelerations, foreclosure risk) .
  • Continued losses: net loss of $23.3M and diluted EPS of -$0.32; interest expense increased YoY due to higher debt and rates; other expense included derivative/warrant fair value losses .

Financial Results

MetricQ1 2022Q2 2022Q3 2022
Revenue ($USD Millions)$37.6 $46.9 $41.1
Gross Margin (%)32.1% 40.1% 39.8%
Net Income ($USD Millions)-$29.7 -$21.0 -$23.3
Diluted EPS ($)-$0.41 -$0.29 -$0.32
Adjusted EBITDA ($USD Millions)-$18.0 -$12.3 -$10.0

Segment/category breakdown (revenue):

Revenue Category ($USD Thousands)Q3 2021Q3 2022
Product sales$29,823 $34,621
Non-recurring engineering (NRE)$3,631 $1,031
Product maintenance contracts$1,421 $961
Professional service contracts$1,769 $2,581
Software licenses$2,122 $1,556
Other$157 $344
Total Revenue$38,923 $41,094

KPIs:

KPIQ3 2022
Book-to-bill>1.5
Shippable backlog>$100M
Private networks wins87 projects
OpEx change vs Q2-$4M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 2022$42–$48M; GM 38–40% Actual: $41.1M; GM 39.8% Missed low end; GM within range
RevenueQ4 2022N/A$49–$57M; GM 42–46% New guidance raised vs Q3 outlook
Adjusted EBITDAQ3/Q4 2022N/AImplied improvement in Q4 (closer to breakeven per call) Positive trajectory commentary

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1/Q2 2022)Current Period (Q3 2022)Trend
Supply chain/logisticsQ1: Supply chain turbulence pressured GM and revenue; Q2: “challenging supply chain environment” with component costs/logistics; guided GM 38–40% for Q3 Q3 shortfall attributed to component availability, expediting fees, logistics costs Improving outlook into Q4, but still constraining
Private networksQ2: +60 wins; >300 design wins to-date Q3: 87 new wins; strong enterprise demand (loss prevention, automation); Europe bookings uptick Accelerating
Policy/CHIPS Act/Open RANQ2: CHIPS Act support for Open RAN emphasized Q3: Continued emphasis; governments supporting domestic supply paths, network diversity Supportive tailwinds
Liquidity/covenantsQ2: N/AQ3: Not in compliance with EBITDA and minimum liquidity covenants; debt classified as current; pursuing waivers/alt capital Deteriorated; key risk
Customer/regional mixQ2: Tier‑1 cable MSO milestone; North America strength Q3: North America 45.3% of revenue; Asia mix down vs prior year; Europe and LatAm up Shift toward North America/Europe

Management Commentary

  • “We are encouraged by very robust bookings, while continuing to grapple with supply chain issues.” — Eric Stonestrom, Chairman & CEO .
  • “We are confidently moving closer to breakeven in 4Q… our operational model improves as extraordinary supply chain and logistics challenges ease.” — Earnings call prepared remarks .
  • Q2 context: “We continue to execute our growth plan and see healthy demand… However, the supply chain environment continues to impact sales and margin.” — Q2 press release .

Q&A Highlights

  • Bookings mix and private networks/FWA contribution: management acknowledged meaningful contribution from private networks and FWA within bookings and expected revenue translation through H2 as supply chain improves .
  • Regional demand: “significant uptick in bookings in Europe” for private networks; expectation of continued strength .
  • OpEx trajectory: workforce alignment actions taken; “we don’t anticipate an uptick in OPEX”; confident in cash OPEX reduction trend .
  • Liquidity/covenants: company classified debt as current; pursuing waivers and alternative capital to satisfy minimum liquidity obligations .

Estimates Context

  • Q3 2022 actual vs external consensus: Revenue $41.1M vs ~$46.2M; EPS -$0.32 vs ~$-0.24; revenue surprise ~-11%, EPS surprise negative, consistent with supply chain shortfall commentary .
  • S&P Global (Capital IQ) consensus unavailable for MIMO in our SPGI mapping; values from S&P Global could not be retrieved. Values above are from external sources (Chartmill/Nasdaq/Zacks). S&P Global consensus unavailable.

Key Takeaways for Investors

  • Watch covenant waiver and liquidity actions in Q4/Q1—resolution is a primary stock driver; ongoing risk includes potential accelerations or default remedies if waivers are not secured .
  • Q4 guide ($49–$57M; 42–46% GM) suggests revenue re-acceleration from backlog as supply chain pressures ease; execution against this range is key to sentiment reset .
  • Private networks growth is tangible (87 wins in Q3) and diversified by geography; monitor conversion pace from bookings to shipments and services revenue mix .
  • Margin trajectory depends on component costs/logistics normalization and product mix; GM near 40% despite constraints indicates potential leverage if Q4 volumes materialize .
  • North America exposure rising; enterprise use cases (loss prevention, automation, smart cities) broaden demand drivers beyond MNOs; track Tier‑1 cable MSO deployments .
  • Policy tailwinds (Open RAN, CHIPS Act) could support medium-term pipeline; align expectations with funding timelines and procurement cycles .
  • Risk/reward hinges on balance sheet flexibility and backlog conversion; near-term volatility likely around financing updates and Q4 print.

Notes:

  • Primary source financials derived from the company’s Q3 2022 Form 10-Q and company press releases; qualitative insights from the Q3 2022 earnings call transcript extracts. Where external consensus estimates are used, sources are cited. S&P Global consensus data was unavailable for MIMO in our mapping at the time of analysis.