It is no coincidence that its weaker pricing comes as the stock market has cooled off this week. It seems the IPO market has been even more sensitive than normal to volatility in the broader markets.
With five more deals slated to price tonight (Adaptive Biotechnologies, Bridge Bio Pharma, Change Healthcare, Morphic Holding, Priam Properties), hopefully the market will rebound nicely today, putting investors in a more risk-on mindset.
As for CMBM, its deal raised $69.6 mln in total gross proceeds. The lead underwriters were JP Morgan and Goldman Sachs and shares are slated to open for trading later this morning on the Nasdaq.
CMBM is a provider of wireless broadband networking infrastructure. Its wireless fabric includes intelligent radios, smart antennas, RF, algorithms, wireless-aware switches and its cloud-based network management software.
Its proprietary RF technology enables automated optimization of data flow at the outermost points in the network, known as the "intelligent edge." This intelligent edge offers network operators the ability to transfer large amounts of data back to enterprise data centers for analysis even when there is a high degree of interfering signals (noise).
The company says its products are typically deployed by medium-sized service providers (about half of revenue), such as wireless Internet service provider networks serving from 5,000 to over 200,000 subscribers, enterprise networks and sensor heavy industrial networks. CMBM sells its products through a global channel partner network, which drives a substantial majority of its revenue.
The company says its Point-to-Point (PTP) products are typically connected to high-speed, high-bandwidth wireline networks, and provide wireless broadband backhaul to facilities or Point-to-Multipoint (PMP) access points deployed throughout a network over distances of more than 100 kilometers and at more than 2 Gbps. Basically, its PMP platform extends wireless broadband access from tower mounted access points to CPE providing broadband access to residences and enterprises covering wide areas with a range of 10 to 30 kilometers. Its PMP products are increasingly used to backhaul video surveillance systems.
In addition, CMBM says it entered the Wi-Fi market in 2016 and this has become a meaningful portion of its revenue. Specifically, it sells its cnPilot Wi-Fi product that provides access to individual users in indoor settings, such as office complexes, and outdoor settings, such as athletic stadiums, over distances as short as two meters with high capacity. In 2018, it entered the Ethernet switching market, although sales have been immaterial thus far.
Turning to the financials, the company is teetering around profitability. It reported a profit in 2017 but a loss in 2018. In 1Q19, the company reported a small profit. In terms of revenue growth, in 2017, revenue rose 19.4% to $216.7 mln, then it grew 11.6% in 2018 to $241.8 mln. In 1Q19, revenue grew 16.5% yr/yr to $68.1 mln.
The company has been consistently adjusted EBITDA profitable for all these periods. CMBM notes that its earnings can be volatile period to period depending on the timing of deals.