Ceragon Networks Ltd. Q4 FY2024 earnings call

• 2024 was a record year financially with record operating profit and highest revenue since 2012. Growth strategy pillars: millimeter-wave products, private networks market share, and recurring revenue via managed services.
• Key product launches: IP-50CX, IP-50EX millimeter-wave series, Neptune chip, Siklu 8020 product, new split-mount product. Software advancements: Smart Activation Key.
• Acquisitions: Siklu and E2E Technologies to strengthen private network position. Regional performance: North America revenue $13.4M, India record $55.6M, APAC won projects including $20M and $3.5M wins.

In Q4 2024, revenues were $106.9 million, up 18.3% from $90.4 million in Q4 2023. Strong regions included India ($55.5 million) and EMEA ($16.2 million). Full-year 2024 revenues were $394.2 million, up 13.5% from $347.2 million in 2023. Non-GAAP gross profit in Q4 2024 was $36.7 million, with non-GAAP operating income of $12.2 million. Full-year non-GAAP operating income was $48.8 million, an all-time record.

• 2025 revenue expected $390 million to $430 million inclusive of E2E acquisition.
• Non-GAAP operating margins targeted at least 10% even at the low end of revenue range.
• Expect to increase free cash flow compared to 2024 levels.

• Market cyclicality in CSP market affecting visibility of private network projects.
• Private network projects shifting quarter-to-quarter impacting revenue visibility until backlog critical mass.
• Supply chain component scarcity occasionally requiring expedite fees.

Q: Outline the role of E2E acquisition in the energy industry and customer relationships.

A: E2E is a well-known system integrator in North America for energy and utilities networks with strong customer relationships and software capabilities to boost private networks success.

Q: Thoughts on private networks growth and North America outlook.

A: Optimistic about private networks growth, with North America expected to be stronger in 2025; second half of 2025 expected stronger for E-Band in India.

Q: Managing Tier 1 business ramping and impact on balance sheet.

A: Three-pillar strategy helps; cost structure adjusted with low-cost centers and alignments in weak regions.

Q: Supply chain issues.

A: So far, no significant issues, but occasional component scarcity with expedite fees as a tactical measure.

Q: South American ARR impact.

A: Debt settlement from 2022 was a one-time impact, ARR now zero as customer is inactive.