Good afternoon. My name is Michelle, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Cambium Networks' Second Quarter 2019 Financial Results Conference call. [Operator Instructions] Thank you. Mr. Peter Schuman, Senior Director of Investor Relations. You may begin your conference.

Thank you, Michelle. Welcome, and thank you for joining us for today for the Cambium Networks' Second Quarter 2019 Financial Results Conference call, and welcome to all those joining by webcast. Atul Bhatnagar, our President and CEO; and Stephen Cumming, our CFO, are here for today's call. The earnings release referenced on this call is accessible on the Investor page of our website and has been submitted on the current report on Form 8-K with the SEC. A copy of today's prepared remarks will also be available on our Investor page at the conclusion of this call. As a reminder, today's remarks, including those made during Q&A, will contain forward-looking statements about the company's outlook and expected performance. These statements are based on current expectations, forecasts and assumptions. Risks and uncertainties could cause actual results to differ materially. Except by required by law, Cambium Networks does not undertake any obligation to update or revise any forward-looking statements for any reason after the date of this presentation, whether as a result of new information, future developments to conform these statements to actual results or to make changes in Cambium's expectations or otherwise. It is Cambium Networks policy not to reiterate our financial outlook. I encourage listeners to review the full list of risk factors included in the safe harbor statement in today's financial results press release. We will also reference both GAAP and non-GAAP financial measures and specifically note that all sequential and year-over-year comparisons reference GAAP numbers except where otherwise noted. A reconciliation of non-GAAP measures to GAAP measures is included in the appendix of today's financial results press release which can be found on the Investors page of our website and in today's press release announcing our results. Our intent is to keep our prepared remarks to approximately 30 minutes in order to provide ample time to answer your questions. Now, on to the agenda. Cambium Networks' President & CEO, Atul Bhatnagar, will share his vision for company, the opportunities for Cambium Networks, and our growth initiatives to capitalize on the opportunities, and key investment highlights for the quarter. Stephen Cumming, Cambium Networks' CFO, will provide a recap of the financial results for the second quarter, which we reference as Q2 '19, and reference past quarters as Q1 '19 for the first quarter 2019 and Q2 '18 for the second quarter 2018. We will provide our financial outlook for the third quarter 2019, which we reference as Q3 '19, and fiscal year 2019, which we reference as FY '19. Our prepared remarks will be followed by a Q&A session. I'd now like to turn the call over to Atul.

Thank you, Peter. Before we dive into the quarterly results, I would like to say a few words about Cambium Networks. After 8 years as a private company, we are pleased to reach a major milestone of becoming a public company. We are one of the few networking companies to IPO over the past six years, and the first in five-years based in Chicago, Illinois. For those new to Cambium Networks, we are a global leader in next-generation wireless fabric infrastructure. Our vision is to connect the unconnected, people, places, and things. Our wireless technology enables the creation of purpose-built networks for mid-sized service providers and mid-market enterprises worldwide. Cambium Networks is differentiated by our RF algorithms and cloud-based software, which drive our scalability, attractive economics, and quality. Cambium Networks is focused on mid-sized service providers and mid-market enterprises that are traditionally underserved in a large expanding Total Assessable Market or TAM. We have built a strong company over the past 8 years, with a higher than industry growth-rate across all product lines and geographies. We believe we can create significant value for our shareholders with our extensive wireless fabric solutions as the world moves towards higher-speed broadband wireless, and high-performance enterprise Wi-Fi. Cambium Networks on average has delivered mid-teens organic revenue growth, year-over-year over the last 4 years, and our Q2 '19 record revenues continued that trend. Given our strong product pipeline and ongoing innovations, Cambium Networks expects continued revenue growth, somewhere in the mid-teens, and our gross margin should continue to expand as we gain volume efficiencies from existing products and ramp our higher margin newer products. We also stand to benefit financially in the future as we monetize our industry-leading cloud and on-premise management platform, called cnMaestro. cnMaestro provides advanced differentiated services across our broad product portfolio…

Thank you, Atul. As Atul mentioned, we had record revenues for Q2 '19, which increased by 13% year-over-year to $69.2 million compared to $61 million in Q2 '18. Q2 '19 revenues were the highest since our inception and reflect continued market acceptance of our product portfolio and a growing and diversified global customer base. Q2 '19 marks our third consecutive quarter of sequential revenue growth, with revenues increasing 2%. Looking at revenues by geography. We had growth across North America, EMEA and CALA year-over-year. We had an exceptionally strong quarter in EMEA, which had record revenues of $23 million during Q2 '19 and an increase of 33% year-over-year and up 5% sequentially and represented 33% of total company revenues. North America grew 10% year-over-year during Q2 '19 and decreased 13% sequentially from a very strong Q1 '19. North America represented 44% of company revenues during Q2 '19. APAC declined 8% year-over-year during Q2 '19, although growing by 64% sequentially. We remain very optimistic about the APAC region as government digital broadband initiatives reach every sector of their economies. APAC represented 11% of revenues during the second quarter 2019. CALA grew 5% year-over-year and increased 19% sequentially and represented 12% of Cambium Networks' revenues. Looking at gross margins, we are particularly pleased with the progress we made during the past quarter. GAAP gross margin was 49.6%, while non-GAAP gross margin of 50.1% improved 190 basis points compared to Q2 '18 and was 330 basis points higher than Q1 '19, approximately 70 basis points of this sequential improvement was a result of our annual license agreement with the customer. Gross margin also benefited from a full quarter of price increases, which took effect towards the end of Q1 '19 and our discipline on pricing and lower inventory reserves. GAAP gross profit dollars…

[Operator Instructions] Our question comes from Paul Coster of JPMorgan.

Welcome to the public markets Atul, Stephen and Peter. My first question is, it sounds like you had a slight headwind at some point in the quarter. I didn't quite catch what Atul said, something to do with Asia. It sounded like a modest hit to the top line. And the top line in the guidance is a little bit shy. I mean very negligible. But it's still not quite where we were looking -- where we were looking for, Stephen. I'm just wondering, how has business evolved over the last few weeks, particularly in the context of all of the trade fuss that we've been subject to?

Paul, thank you for the question. And as we move into some of the government deals in Asia, Asia has a lot of initiatives at a national level for broadband connectivity of citizens and these are sizable deals. The timing of the deal sometimes is not exactly what we predicted, so we did see that. We are still in those deals. These are still going to be substantial business for Cambium, but we definitely saw some of those deals move into the second half of this year. We expect excellent business. We are very bullish about potential in some of these Asian countries, but that's the headwind we did see.

Yes. And just to add to that, Paul, these bigger opportunities in Asia, they're taking a little bit more time to vet and get closed. And so we still feel optimistic about the Asia region, but some of them are just moving out a little bit. With regards to guidance, at the midpoint of our outlook, Cambium would still be increasing 17% year-over-year, although flat sequentially, which I think is higher than most in our industry, and so we're pretty pleased. We're particularly pleased about what we saw in terms of the growth of EMEA and our overall success there in our enterprise Wi-Fi business and overall, as a company, as you saw from our prepared remarks, we grew sequentially that business by 51%. So we expect that to be a nice growth driver for us going forward.

And then in respect to the way in which the quarter evolved in the context of the China trade situation? Any observations?

No. I don't think that impacted us in any major way.

Meaningful manner? No.

All right. Got it. Another just one last question, as you know there's some National Defense authorization Act sort of constraints on the purchasing of Chinese product. Does that benefit you at all here in the U.S.?

It may. The reason it may is there are some Chinese network equipment manufacturers who do sell to WISP as well as Tier 2, Tier 3 service providers in the United States, it may. We have not seen that because some of this impact is percolating down. So -- but definitely, it may.

Our next question comes from Ittai Kidron of Oppenheimer.

And also congrats guys on the first quarter as a public company. Atul, I did want to dig into Xirrus, that acquisition, if I remember correctly, Riverbed acquired that asset just about 2 years ago. And I think that they've tried to kind of integrate a lot of that into their SD-WAN kind of portfolio. Can you give us an update on how that technology looks now? In what way would you integrate this with your existing Wi-Fi? And what way does it overlap or not? And also, with regards to the revenue contribution, I just want to make sure I understand you see no revenue contribution this year? Or do you do because this was at least 2 years ago, a $20 million, $30 million year business, if I remember correctly?

Let me take that first one, Atul, and then you can follow up on the rationale on the acquisition. Yes, Ittai, so this was really an asset purchase of Xirrus from Riverbed, where we acquired really primarily a very strong R&D team of approximately 35 employees. And as I said on our prepared remarks, we see this being as dilutive at least to Q3 and Q4 EBITDA by somewhere in the realms of sort of $1 million to $2 million per quarter. But this is an asset that will certainly bolster our Wi-Fi enterprise business and accelerate our cloud software platform, and we expect it to be accretive to our financials in 2020. But -- and we're doing that really by effectively pulling in resources that we would have otherwise hired in 2020. But this asset, in terms of revenues, this was an asset in decline, it was neglected as part of a bigger company. It was pretty much an acquihire as we see it. It had really no sales channel, and it was pretty much a restart. But obviously, with some talented individuals in technology. So we feel good about the prospects going forward, but it's -- revenues are de minimis.

Let me also give a little more color. This is a strategic acquisition. Cambium Networks is actually very excited at the opportunities we have in front of us. We are, I think, the fastest Wi-Fi growing company in the world right now. And we are putting more fuel in the rocket. So the reason -- I have known Xirrus for over 15 years or so, engineers in the company. One of their forte is high-density design for a large number of subscribers, especially for education and public venues. And these are areas where we are collectively able to bring Wi-Fi and fixed wired broadband for backhaul, very much a sweet spot for Cambium Networks. Second, they are very good in multi-radio architecture, which will be key as Wi-Fi 6 comes in 2020. Wi-Fi 6 will be a transitionary technology in the Wi-Fi world. So we are just gearing to kind of get that tectonic shift done properly. Number three, they also bring a very good software subscription platform, and that'll help us increase our subscription revenues over time. But it does take a quarter or 2 to integrate properly, architecturally, we're very confident. There's no overlap, but it does take -- so 2020, I think you will see the impact and we are very excited.

Excellent. And maybe as a follow-up, you gave some interesting data about cnMaestro. I think it was 299,000 devices under management, if I got that right. Can you help me -- which is a very impressive growth, I think you mentioned 60%. But can you help me understand while on the surface it looks like a very good number, maybe you can tell us relative to your own expectations is this growing faster than or in line with your expectations? And how do we think about the effort and the opportunity to expand this to your entire base? Well, what percent of your base do you think ultimately could be using Maestro?

Excellent question. I think this is an area we are learning, and we are learning fast. We know software monetization is a fantastic opportunity for Cambium Networks. We know that. But we also know this is an area we have work to do. And the work to do really is, in some ways, making sure that for the software monetization, we build those features. We have a very good core technology built in already, which scales very well across geographic clouds, very resilient, very scalable. Now we are focusing on bringing those features. So I think in the second half of this year, you will see Cambium Networks put those software features, which then we can monetize in 2020. So that's why most of our software monetization, you will see happen in 2020, and we are absolutely focused on that, definitely an area where we are learning and we have work to do.

Our next question comes from Simon Leopold of Raymond James.

I wanted to maybe see if you could step back and reflect on the June quarter in terms of what you consider your biggest surprises in the results. To me, it was the strength in Wi-Fi and the upside in gross margin. But I think it's more important to get a better understanding of what surprised you, both good and bad out of your June quarter?

Okay. Simon, thank you for asking the question. Let me focus on what were the positive things and where we did see some of the timing. Positive thing was Wi-Fi is accelerating, both indoor and outdoor. And actually, I think it'll accelerate even more. And we have just started, we have just begun. And our RF expertise, our intelligent antenna designs, our outdoor expertise, these are the things which are now playing into that. And it's also falling in the big part of the broadband. So I think that was very positive. I think the second thing which was positive is, we are also seeing more and more customers using cnMaestro. And many customers are saying that the reason they buy Cambium is simplicity, the ease of deployment, ease of use, just the simplicity and attractive economics. So I think those things are playing very well in our solutions. And as I said, now some of the deals we are in, especially the Asian government deals, which are pretty large. And one of the things which plays well in those Asian deals for us is they have Wi-Fi, and they have fixed wireless broadband together. And that makes it very unique Cambium expertise, Cambium solutions. Timing of those deals, definitely something we did see move around. But I think in the second half, some of these will come, and you will see good momentum. So we are still very bullish about some of our Asian business there. Anything, Stephen, you want to add to that?

No. I mean Simon, I think you're right. Gross margin was -- we were very pleased about that with -- hitting a non-GAAP gross margin of 50.1%, which is, as I said in the prepared remarks, 330 basis points higher than where we were in Q1. We benefited from the impact of the price increases, which we had modeled in. And remember, we do -- [ not one of the ] Tier 1 service provider. So that gives us much more pricing power. But also over the last few quarters, as part of becoming a public company, we've strengthened our processes and procedures within our supply chain and operations, including our sales and operation planning, and that's improved our forecast accuracy and helped us reduce inventory reserves and such forth. So we're pleased on the progress we've made there. There's still much more work to be done, but we're pleased about that progression.

Maybe, Simon, if I can just add one more comment to what Stephen mentioned. I think as a company, we are focused in the last 18 months quite a bit in cost reduction, and we are getting better. Again, an area where you can never be perfect but you absolutely can keep improving. So I think you will see more of some of that from cambium. Our engineers, our teams are paying a lot of attention to cost reduction as our volumes are increasing.

So the logical follow-up then would be the gross margin forecast for September is slightly lower sequentially, 47.9% to 49.1%. And just to help us learn really the levers, is this about mix? Is this about mix within the mix? Is this about geographies, conservatism? Help us think about what influences the gross margin.

Yes. I mean, firstly, Simon, I would add that we had a great Q2 gross margin, but there were some one-timers in there that we benefited from. I called them out in the prepared remarks, 70 basis points tied to a license agreement and benefits from some of the supply chain operations stuff. So if you get that back to sort of normalized level, we're sort of guiding around that sort of range of 48% to 49%. I think it's a combination, or number of things, and Atul just touched on it, but obviously, mix plays a factor there. We've been doing a lot in terms of investing and sustaining R&D and looking at redesigning our products to help drive our product costs down and continued supply chain efficiencies. So again, you shouldn't see a huge step function in our gross margin. You're going to see a steady improvement on a go-forward basis, and we're going to continue to block and tackle this going forward.

Our next question comes from Rod Hall of Goldman Sachs.

So I guess, I just wanted to ask about the EBITDA. The guidance was a little bit below what we were expecting. And I'm assuming that is probably related to the Xirrus acquisition. So just wondering if you could kind of give us an idea of what the Xirrus impact on that forward quarter EBITDA is?

Yes, you're absolutely right, Rod. It's Xirrus. That's impacting our EBITDA for really Q3 and Q4, as I would see it. And that's somewhere between $1 million to $2 million per quarter, both in Q3 and Q4. So if you add that back to our results, I think we'd be back nearer to that very solid double digit, 11-plus percent EBITDA. But that's impeding us at this point in time. And obviously, it's going to be -- it's costs that we otherwise would have incurred in 2020 as we added headcount R&D. And so we don't see it as a headwind in 2020. We think it's going to be accretive in next year, but it is causing EBITDA to be a bit lower in the second half of this year.

And Rod, if I can just add one comment. This is an investment we are making. And I think 2020 is a transitionary year in the Wi-Fi industry. And I think we are just getting ready to be a very strong player with this addition. So take it as we know where the puck is going, and we're looking at the puck and making sure we are ready.

Okay. And then I wanted to -- I realized the North American comp in Q1 for revenue was a pretty tough one because the growth is very high. And then we see the sequential decline in North America. But I guess what I'm wondering is what drove that abnormally high Q1? I don't remember you guys saying anything about it. So I'm just curious what drove that. And then do you -- would you expect North America to kind of be growing at that 10% rate? Is that more like the organic growth rate? Or how should we think about North American growth?

Yes. Overall, I would say North America will keep growing. North America has some of the defense deals, and they're also the timings, the budget sometimes vary. But North America, absolutely, you'll see strong growth. And some of the channels, we are recruiting, some of the insight sales focus we have. All of that is actually focused in North America. So overall, solid growth there.

Yes. I mean, we saw very -- Q1 number was very strong in North America as a result as some of the federal success we've had there. That slowed down a little bit, and that will be going through a refresh cycle that we anticipate sometime in Q2. So we expect that to come back. But that's really what's impeded a little bit in Q2.

Do you guys expect North America to be more lumpy than some of the other regions because of the nature of your business there? Or it just so happens that -- it's a [ normal ] fact in the beginning of the year here?

No, I don't think -- actually, North America is not at all lumpy, but there are sometimes gain, especially on the defense side. There are some deals once in a while, they move around a little bit. But in general, we have seen very good cadence from North America.

Okay. And then sorry for so many. I had just one last one, which is on Wi-Fi. The growth was pretty good in the quarter. I know that you guys are expecting big acceleration as we move through the back end of the year. And I just wanted to check kind of visibility, confidence on that Wi-Fi trajectory, what you're seeing in terms of initial interest and what the pipeline looks like, that kind of thing?

Rod, excellent question. Let me take that. We actually have 2 or 3 regions where we cut our teeth, we learned to walk, and that is EMEA and the region has recruited very good mid channel. And it took us about 18 months to kind of learn that. Once we recruited the channel, we nurtured them, we've started seeing acceleration. We saw the same thing now with some of the regions like APAC and CALA. We are applying that formula now in North America and recruiting the channel, using inside sales properly. Because with the mid channel acceleration, we are starting to see a good run rate business develop. So Rod, I think we have the formula, and now we are going to accelerate the machinery.

Yes. And just to add to that, Rod, you're right, we saw a very strong sequential growth, 51% in Wi-Fi. We expect for 2019 to be north of 40% in Wi-Fi. And as Atul mentioned, we're getting tremendous traction in EMEA, and that's now rolling into North America.

That's great. Congrats on getting public.

Our next question comes from Erik Suppiger of JMP securities.

Welcome to the public markets. A few questions here. First off, when you talked about some of the competitive displacements with Wi-Fi, who were you displacing? Were you displacing lower cost solutions that have less functionality? Or were you displacing some of the premium solutions that are more expensive like Aruba or Cisco?

I think it's a mix. There are times, it depends on the customer. There are times a customer is scaling their network, and they really now want to go to more enterprise grade, more 24-hour -- 24/7 support. And just sort of graduate from that lower quality levels to more enterprise class. Then there are also customers who are looking for simplicity and attractive economics. I think for Cambium Wi-Fi, the key message we are giving is we are providing a simplicity. We are providing an architecture where you don't need controllers, it's very cloud savvy. We are providing an architecture, which is equally good, both in indoor and outdoor. So as a result, we are able to attract many times those customers who are going from low end to the high-end enterprise class. We are also able to go into educational institutions, hospitality, where they may have had a very expensive solution, and they suddenly find a tremendous value with Cambium. So I think it's a mix of the 2.

Any specific vendors on any of the large deals that you displaced?

I wouldn't comment on that, but I think you can see -- and also, it's not -- Erik, it's not the same in every region. In some regions, there might be a big player we replaced; in another region, it may be a medium-size player we replaced. So it's not uniform because different regions have a little different dynamics when it comes to brand names. So I would say it's a mix. And we have replaced some key names. And we are just starting. Remember, we have just begun.

Okay. And then on the Asian business that slipped can you give us a sense for the number of deals that you're talking about? Is it a handful of deals that slipped? Or is it -- give us a little bit more sense for what magnitude that was?

No, these are, I would say, the government deals are always handful. They're not large number of deals, but they are sizable. And again, as I said earlier, the reason they are sizable is they need wireless fabric in many developing countries. They need fixed wireless broadband. It's not just Wi-Fi. So that plays to our very unique strength. That's why we are in these deals. And that's why we have a differentiation compared to a lot of other Wi-Fi -- so-called Wi-Fi players because we are going there from 2 meters to over 100 kilometers in 1 hop. We are able to provide that connectivity in tough terrains. We are outdoor. So the combination of that wireless fabric vision I talk about, that plays out. That's why we're in there. And I think long term, this will increasingly be in many other developing country regions as well, not just Asia. That's why we're in those deals.

Can we assume those are 6 figures type deals?

Yes, you can assume that.

Okay. And then lastly, Stephen, what kind of dilution should we assume for share count as we go forward? How should we be growing our share count as we look into 2020?

Well, at the moment, I would say, covering the impact of outstanding employee equities and sort of the current vesting over the quarter. Not much change I see at the moment. We're working on those models now, but let me get back to you on a firmer answer around that for 2020, but I don't see much change at this point in time.

Okay. And did you give us a share count for the September quarter?

I did, I did. 25.6 million.

In the September quarter, you said, right?

Yes.

[Operator Instructions] Our next question comes from Brian Yun of Deutsche Bank.

Can you talk about the Channel Partner strategy, it looks like you're significantly growing those efforts? Are there certain verticals or product categories like Wi-Fi or even geographic areas that you kind of need to or planning to expand in? And with that, would the new channel partners give you an opportunity at larger customers versus your typical customer set?

Brian, thank you for asking the question. I think our strategy is, as I said, we kind of experimented this in EMEA with the mid-channel recruiting and using our inside sales to nurture them, train them, and we start to see acceleration after a couple of quarters of good investment. Then we brought it to some of the other regions and now, as I said, we are expanding North America. I think most of this channel, I don't think they will bring large-sized deals, I think they'll bring a lot of midsized deals. Large deals, our direct sales is generally involved with the customer and then we fulfill through the channel. So that has been the model. And as I said, we definitely are seeing acceleration of lots of deals, lots of good run rate business. And as we become a stronger brand known in Wi-Fi world and that's happening every day. As our name gets out more and more, I think you will see us in larger deals. But I think we need to walk. We need to keep winning. We need to keep creating customers success stories. And then you will see us in larger deals. But I think we have plenty to gain just with mid-market right now.

Okay. Great. And congrats on the first quarter post IPO.

Our next question is a follow-up from Paul Coster of JPMorgan.

Yes. I wonder, one of the questions I got during the process of getting here was how do you benefit from 5G? And I just wondered if Atul, you could take a moment of your time to describe that. And the other thing I would -- I just would like a little bit of clarification on this. What is the opportunity associated with the PMP 450 to the citizen's band frequencies?

Okay. Let me address both of them. Let me take the 5G first. First of all, 5G is a combination of many standards, many technologies. It's not one thing. And 5G brings a very favorable air interface for fixed wireless broadband. So as Cambium adopts 5G standard, it makes it a little easier for us to bring our secret sauce, our RF algorithms, our spectral efficiency type of things towards 5G, so number one. Number two, 5G brings millimeter wave architecture, 60 gigahertz type technologies, and that means far higher speeds and feeds so the consumers and subscribers can have very rich multimedia services running on those type of connections. So millimeter wave will expand Cambium's ability, not only just to serve service providers but actually serves potentially enterprises as well. So in 2020, you will see some of these things get traction and get going, number two. Number three, 5G studied, the LTE architecture, for example, and they realize that the machine-to-machine real-time communication is needed, far more transactional traffic, so they also have a machine-to-machine architecture, which ultimately -- it will propel more IIOT because today, IIOT has multiple standards. So as 5G comes, it'll consolidate things. These are the things which I do believe long-term will be very beneficial for Cambium as we start to adopt these different technologies and standards. And we have already with Medusa, the massive MIMO product, and we implemented that. So we already have a 5G like architecture, 5G-like sophistication, which will move forward. So overall, key message, 5G expands our market. We are well positioned, and it is not just 1 year. It will be many years of good acceleration based on 5G. For 450 CBRS.

Understood, yes.

Let me go into quickly your second question, 450 CBRS. CBRS is going to, I think, start getting activated in April 2020. Cambium is one of the few companies which is compatible. We have built the software in 450. And as it comes, you will see our entire architecture ready to rock and roll. So overall, we are very pleased that, that market in 3 gigahertz with CBRS as it is enabled, many of our customers will benefit who are based on Cambium Networks.

What -- what's the kind of market that, that will go into just to be -- application and/or end customer market?

I think some of it could be WISP, who are -- who are going to use that band. Some of it could be service providers, Tier 2, Tier 3. I think you'll see both use that because the spectrum is a very precious resource. And any time there is any ability there, you'll see people use it. So I would say WISP as well as Tier 2, Tier 3 service providers.

Take one more question and then we're going to conclude.

And our last question comes from Erik Suppiger of JMP Securities.

Just a quick one on EMEA. A number of vendors have seen slowing out of EMEA. You had some pretty good strength. Do you have any concerns that some of the macro issues could start to be a headwind for you?

Not at all. We see a very strong EMEA. We have invested there. We have a very good team. We have engineers there in EMEA. We support our customers. We listen to them carefully. No, not at all. I think EMEA will remain a strong hold for Cambium.

Yes. I mean just to add to that. EMEA, we had a very strong Q2, Erik, as you heard. We're being a little bit more conservative about for Q3, but I don't think that's a macro issue. I think that's just -- we're pursuing Tier 2 and Tier 3 service providers and sometimes a gestation period in those accounts take a little bit longer, but we don't see anything from a macro at this point.

Yes. And I think maybe one more comment. The way I mentioned in Asian developing countries, we see broadband initiative. And sometimes, timing-wise, they do slide, but tremendous initiatives. I think the same thing is a little bit happening with EU. And many of those things are indoor/outdoor combination public places. So I'm hoping that some of our wins there will also translate into other EU countries. So we see strength there.

There are no further questions. I'd like to turn the call back over to Peter Schuman for any closing remarks.

Thank you, Michelle. During Q3 '19, Cambium Networks will be meeting with investors at the Raymond James SMID Cap Growth Conference in Chicago on August 21 and the Deutsche Bank TMT Conference in Las Vegas on September 11. In the meantime, you're always welcome to contact our Investor Relations department at (847) 264-2188 with any questions that arise. Thank you for joining us, and this concludes today's call.

Ladies and gentlemen, that concludes today's quarterly earnings call. Thank you for your participation. You may now log off.