Significant Penetration into Private Networks

Management Reiterates Full-Year 2024 Outlook 

ROSH HA'AIN, Israel, Aug. 7, 2024 /PRNewswire/ -- Ceragon (NASDAQ: CRNT), the leading solutions provider of end-to-end wireless connectivity, today reported its financial results for the second quarter period ended June 30, 2024.

 

Ceragon Networks Ltd. Logo

 

Q2 2024 Financial Highlights:

  • Revenues of $96.1 million
  • Operating income of $10.4 million on a GAAP basis, or $13.1 million on a non-GAAP basis
  • Net Income of $7.8 million on a GAAP basis, and net income of $9.9 million on a non-GAAP basis
  • EPS of $0.09 per diluted share on a GAAP basis, or $0.11 per diluted share on a non-GAAP basis

Q2 2024 Business Highlights:

  • India:
    -  Record quarterly revenues since Q2 2018, including revenue from the new, top-tier customer
    -  Substantial ramp up in demand for new IP-50CX product, with more than 20,000 radio units delivered
  • North America:
    -  Bookings remain strong, supported by Private Network wins
    -  Significant Private Network orders, including nine new customers
    -  Six consecutive quarters of revenue above $20 million

Doron Arazi, CEO, commented: "Our stated strategy of diversifying our business by expanding our presence with private networks has been successful. We have added significant bookings from private networks, both in North America and in other key regions, meaningfully growing our business in our addressable market. Demand in India remains robust, and we are growing market share in the region. We also have seen increased interest in our software solutions that can enable recurring revenue growth. New products introduced in the last six months are facilitating our growth, with significant shipments and high levels of customer satisfaction. We are well-positioned for continued profitable growth."

Primary Second Quarter 2024 Financial Results:

Revenues were $96.1 million, up 11.5% from $86.2 million in Q2 2023 and up 8.6% from $88.5 million in Q1 2024.

GAAP Operating income was $10.4 million compared with $5.7 million for Q2 2023 and $4.2 million for Q1 2024.

GAAP Net income was $7.8 million, or $0.09 per diluted share, compared with $2.1 million, or $0.02 per diluted share for Q2 2023 and $0.4 million, or $0.00 per diluted share for Q1 2024.

Non-GAAP results were as follows: Gross margin was 35.2%, operating profit was $13.1 million, and net income of $9.9 million, or $0.11 per diluted share. The second quarter included $4 million benefit related to an initial collection from a $12 million debt settlement agreement reached with a South American customer. Another installment was paid during Q3, and the remaining installment is expected to be paid subject to several conditions.

Balance Sheet

Cash and cash equivalents were $26.3 million on June 30, 2024, compared to $28.8 million on March 31, 2024.

For a reconciliation of GAAP to non-GAAP results, see the attached tables.

Revenue Breakout by Geography:

 


Q2 2024

India

37 %

North America

24 %

EMEA

20 %

Latin America

10 %

APAC

9 %

 

Outlook

Management reiterated its 2024 outlook:

  • Revenue of $385 million to $405 million, representing growth of 11% to 17% compared to 2023 revenue. This guidance includes the contribution from Siklu, which was acquired in December 2023.
  • Non-GAAP operating margins are targeted to be at least 10% at the mid-point of the revenue guidance.
  • As a result, management expects increased non-GAAP profit and positive free cash flow for the full year of 2024.

Conference Call

The Company will host a Zoom web conference today at 8:30 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Recent geopolitical events could impact the live question and answer session. In this unlikely event, management's prepared remarks will be pre-recorded, and the question and answer session would be rescheduled.

Investors are invited to register by clicking here. All relevant information will be sent upon registration.

If you are unable to join the live call, a replay will be available on our website at www.ceragon.com within 24 hours after the call. 

About Ceragon

Ceragon (NASDAQ: CRNT) is the global innovator and leading solutions provider of end-to-end wireless connectivity, specializing in transport, access, and AI-powered managed & professional services. Through our commitment to excellence, we empower customers to elevate operational efficiency and enrich the quality of experience for their end users.

Our customers include service providers, utilities, public safety organizations, government agencies, energy companies, and more, who rely on our wireless expertise and cutting-edge solutions for 5G & 4G broadband wireless connectivity, mission-critical services, and an array of applications that harness our ultra-high reliability and speed. Ceragon solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries.

Through our innovative, end-to-end solutions, covering hardware, software, and managed & professional services, we enable our customers to embrace the future of wireless technology with confidence, shaping the next generation of connectivity and service delivery. Ceragon delivers extremely reliable, fast to deploy, high-capacity wireless solutions for a wide range of communication network use cases, optimized to lower TCO through minimal use of spectrum, power, real estate, and labor resources - driving simple, quick, and cost-effective network modernization and positioning Ceragon as a leading solutions provider for the "connectivity everywhere" era.

For more information please visit: www.ceragon.com

Ceragon Networks® and FibeAir® are registered trademarks of Ceragon Networks Ltd. in the United States and other countries. CERAGON® is a trademark of Ceragon, registered in various countries. Other names mentioned are owned by their respective holders.

Safe Harbor

This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended, and the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs, expectations and assumptions of Ceragon's management about Ceragon's business, financial condition, results of operations, micro and macro market trends and other issues addressed or reflected therein. Examples of forward-looking statements include, but are not limited to, statements regarding: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, supply chain and shipping, components availability; growth prospects, product development, financial resources, cost savings and other financial and market matters. You may identify these and other forward-looking statements by the use of words such as "may", "plans", "anticipates", "believes", "estimates", "targets", "expects", "intends", "potential" or the negative of such terms, or other comparable terminology, although not all forward-looking statements contain these identifying words.

Although we believe that the projections reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations therefrom will not be material. Such forward-looking statements involve known and unknown risks and uncertainties that may cause Ceragon's future results or performance to differ materially from those anticipated, expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the effects of global economic trends, including recession, rising inflation, rising interest rates, commodity price increases and fluctuations, commodity shortages and exposure to economic slowdown; The effects of the evolving nature of the war situation in Israel and the related evolving regional conflicts; risks associated with delays in the transition to 5G technologies and in the 5G rollout; risks relating to the concentration of our business on a limited number of large mobile operators and the fact that the significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect us; risks resulting from the volatility in our revenues, margins and working capital needs; disagreements with tax authorities regarding tax positions that we have taken could result in increased tax liabilities; the high volatility in the supply needs of our customers, which from time to time lead to delivery issues and may lead to us being unable to timely fulfil our customer commitments; and such other risks, uncertainties and other factors that could affect our results of operation, as further detailed in Ceragon's most recent Annual Report on Form 20-F, as published on March 21, 2024, as well as other documents that may be subsequently filed by Ceragon from time to time with the Securities and Exchange Commission.

We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Ceragon does not assume any obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless required by law.

While we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. In addition, any forward-looking statements represent Ceragon's views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Ceragon does not assume any obligation to update any forward-looking statements unless required by law.

The results reported in this press-release are preliminary and unaudited results, and investors should be aware of possible discrepancies between these results and the audited results to be reported, due to various factors.

Ceragon's public filings are available on the Securities and Exchange Commission's website at www.sec.gov and may also be obtained from Ceragon's website at www.ceragon.com.

Ceragon Investor & Media Contact:

Rob Fink
FNK IR
Tel. 1+646-809-4048
crnt@fnkir.com

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(U.S. dollars in thousands, except share and per share data)


(Unaudited)





Three months ended

June 30,


Six months ended

June 30,



2024


2023


2024


2023




















Revenues

96,088


86,151


184,586


169,560


Cost of revenues

62,627


55,795


119,057


111,028











Gross profit

33,461


30,356


65,529


58,532











Operating expenses:









   Research and development, net

8,385


7,812


17,232


15,750


Sales and Marketing

11,508


9,778


22,769


19,974


General and administrative

2,295


6,218


8,158


11,542


Restructuring and related charges

-


897


1,416


897


Acquisition- and integration-related charges

915


-


1,377


-











Total operating expenses

23,103


24,705


50,952


48,163











Operating income

10,358


5,651


14,577


10,369











Financial expenses and others, net

1,916


1,886


4,777


3,344











Income before taxes

8,442


3,765


9,800


7,025











Taxes on income

609


1,677


1,564


2,969











Net income

7,833


2,088


8,236


4,056











Basic net income per share

 

0.09


 

0.02


 

0.10


 

0.05


Diluted net income per share

 

0.09


 

0.02


 

0.09


 

0.05


Weighted average number of shares used in

computing basic net income per share

 

 

85,743,770


 

 

84,365,168


 

 

85,632,241


 

 

84,359,762


Weighted average number of shares used in

computing diluted net income per share

 

 

87,921,507


 

 

85,312,954


 

 

87,753,163


 

 

85,152,634













 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)



June 30,


December 31,



2024


2023



Unaudited


Audited


ASSETS










CURRENT ASSETS:





Cash and cash equivalents

26,303


28,237


Trade receivables, net

112,895


104,321


Inventories

59,490


68,811


Other accounts receivable and prepaid expenses

17,601


16,571







Total current assets

216,289


217,940







NON-CURRENT ASSETS:





Severance pay and pension fund

4,807


4,985


Property and equipment, net

33,853


30,659


Operating lease right-of-use assets

17,817


18,837


Intangible assets, net

16,510


16,401


Goodwill

7,749


7,749


Other non-current assets

2,010


1,954







Total non-current assets

82,746


80,585







Total assets

299,035


298,525







LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Trade payables

67,405


67,032


Deferred revenues

2,561


5,507


Short-term loans

28,450


32,600


Operating lease liabilities

3,151


3,889


Other accounts payable and accrued expenses

25,756


23,925







Total current liabilities

127,323


132,953







LONG-TERM LIABILITIES:





Accrued severance pay and pension

8,657


9,399


Deferred revenues

670


670


Operating lease liabilities

13,142


13,716


Other long-term payables

5,742


7,768







Total long-term liabilities

28,211


31,553







SHAREHOLDERS' EQUITY:





Share capital

224


224


Additional paid-in capital

440,173


437,161


Treasury shares at cost

(20,091)


(20,091)


Other comprehensive loss

(9,853)


(8,087)


Accumulated deficit

(266,952)


(275,188)







Total shareholders' equity

143,501


134,019







Total liabilities and shareholders' equity

299,035


298,525








 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,


2024


2023


2024


2023









Cash flow from operating activities:








Net income

7,833


2,088


8,236


4,056

Adjustments to reconcile net income to net cash provided by
operating activities:








Depreciation and amortization

2,941


2,582


5,880


5,135

Loss from sale of property and equipment, net

169


20


169


30

Stock-based compensation expense

1,566


808


2,470


1,977

Decrease in accrued severance pay and

 pensions, net

(212)


(280)


(564)


(344)

Increase in trade receivables, net

(16,023)


(6,620)


(9,247)


(6,910)

Decrease (increase) in other assets (including other accounts
receivable, prepaid expenses, other non-current assets, and
the effect of exchange rate changes on cash and cash
equivalents)

(652)


(445)


(1,383)


551

Decrease in inventory

1,186


893


8,555


4,059

Decrease in operating lease right-of-use assets

1,694


886


2,626


1,897

Increase (decrease) in trade payables

12,075


2,835


589


(3,955)

Increase (decrease) in other accounts payable and accrued
expenses (including other long-term payables)

(2,196)


2,620


(94)


2,326

Decrease in operating lease liability

(1,922)


(1,152)


(2,942)


(2,518)

Increase (decrease) in deferred revenues

(1,637)


(1,054)


(2,946)


386

Net cash provided by operating activities

4,822


3,181


11,349


6,690

Cash flow from investing activities:








Purchases of property and equipment, net

(4,562)


(2,330)


(7,955)


(5,472)

Software development costs capitalized

(676)


(549)


(989)


(1,837)

Net cash used in investing activities

(5,238)


(2,879)


(8,944)


(7,309)









Cash flow from financing activities:








Proceeds from exercise of stock options

284


30


542


30

Proceeds from (repayments of) bank credits and loans, net

(2,050)


(2,300)


(4,150)


2,050

Net cash provided by (used in) financing activities

(1,766)


(2,270)


(3,608)


2,080









Effect of exchange rate changes on cash and cash equivalents

(298)


74


(731)


120

Increase (decrease) in cash and cash equivalents

(2,480)


(1,894)


(1,934)


1,581

Cash and cash equivalents at the beginning of the period

28,783


26,423


28,237


22,948

Cash and cash equivalents at the end of the period

26,303


24,529


26,303


24,529

 

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,


2024


2023


2024


2023

















GAAP cost of revenues

62,627


55,795


119,057


111,028

Stock-based compensation expenses

(134)


(48)


(265)


(228)

Amortization of acquired intangible assets

(189)


-


(378)


-

Excess cost on acquired inventory in business combination (*)

-


-


(124)


-

Non-GAAP cost of revenues

62,304


55,747


118,290


110,800









GAAP gross profit

33,461


30,356


65,529


58,532

Stock-based compensation expenses

134


48


265


228

Amortization of acquired intangible assets

189


-


378


-

Excess cost on acquired inventory in business combination (*)

-


-


124


-

Non-GAAP gross profit

33,784


30,404


66,296


58,760









GAAP Research and development expenses

8,385


7,812


17,232


15,750

Stock-based compensation expenses

(184)


(232)


(336)


(478)

Non-GAAP Research and development expenses

8,201


7,580


16,896


15,272









GAAP Sales and marketing expenses

11,508


9,778


22,769


19,974

Stock-based compensation expenses

(387)


(363)


(683)


(739)

Amortization of acquired intangible assets

(117)


-


(388)


-

Non-GAAP Sales and marketing expenses

11,004


9,415


21,698


19,235









GAAP General and administrative expenses

2,295


6,218


8,158


11,542

Stock-based compensation expenses

(861)


(167)


(1,186)


(535)

Non-GAAP General and administrative expenses

1,434


6,051


6,972


11,007









GAAP Restructuring and related charges

-


897


1,416


897

Restructuring and related charges

-


(897)


(1,416)


(897)

Non-GAAP Restructuring and related charges

-


-


-


-









GAAP Acquisition- and integration-related charges

915


-


1,377


-

Acquisition- and integration-related charges

(915)


-


(1,377)


-

Non-GAAP Acquisition- and integration-related charges

-


-


-


-

 

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,



2024


2023


2024


2023




















GAAP Operating income

10,358


5,651


14,577


10,369


Stock-based compensation expenses

1,566


810


2,470


1,980


Amortization of acquired intangible assets

306


-


766


-


Excess cost on acquired inventory in business combination (*)

-


-


124


-


Restructuring and other charges

-


897


1,416


897


Acquisition- and integration-related charges

915


-


1,377


-


Non-GAAP Operating income

13,145


7,358


20,730


13,246











GAAP Financial expenses and others, net

1,916


1,886


4,777


3,344


Leases – financial income

207


285


319


643


Non-cash revaluation associated with business combination

477


-


(196)


-


Non-GAAP Financial expenses and others, net

2,600


2,171


4,900


3,987











GAAP Tax expenses

609


1,677


1,564


2,969


Non cash tax adjustments

-


(890)


(413)


(1,743)


Non-GAAP Tax expenses

609


787


1,151


1,226











GAAP Net income

7,833


2,088


8,236


4,056


Stock-based compensation expenses

1,566


810


2,470


1,980


Amortization of acquired intangible assets

306


-


766


-


Excess cost on acquired inventory in business combination (*)

-


-


124


-


Restructuring and other charges

-


897


1,416


897


Acquisition- and integration-related charges

915


-


1,377


-


Leases – financial income

(207)


(285)


(319)


(643)


Non-cash revaluation associated with business combination

(477)


-


196


-


Non-cash tax adjustments

-


890


413


1,743


Non-GAAP Net income  

9,936


4,400


14,679


8,033


GAAP basic net income per share

0.09


0.02


0.10


0.05


GAAP diluted net income per share

0.09


0.02


0.09


0.05


Non-GAAP Diluted net income per share (**)

0.11


0.05


0.17


0.09














(*) Consists of charges to cost of revenues for the difference between the fair value of acquired inventory in business 
combination, which was recorded at fair value, and the actual cost of this inventory, which impacts the Company's gross
profit.

(**) Weighted average number of shares used in computing diluted net income per share is the same as in GAAP

 

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SOURCE Ceragon Networks Ltd.

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