Ceragon Networks Ltd. Q1 FY2025 earnings call

• Ceragon delivered strong financial performance in Q1 2025 with highest bookings since Q1 2024, rebounding in India and EMEA with solid growth in North America.
• Positive demand signals observed at Mobile World Congress, including interest in microwave and millimeter-wave products, software-driven services, and new use cases.
• Acquisition of E2E Technologies strengthened Private Networks expertise, with E2E's bookings outperforming expectations in Q1.
• In India, revenue increased 65% year-over-year; North America revenue was $17.6 million including E2E contributions.
• Shift to software-driven services and applications to increase annual recurring revenue and improve margins relative to traditional hardware business.

Revenue for the first quarter was $88.7 million, up 0.2% from Q1 2024. India was the strongest region, contributing $42.9 million (48% of revenues). North America rebounded to $17.6 million, including contributions from E2E Technologies. E2E's bookings in Q1 outperformed expectations, and its revenue contribution was in line with expectations.

• Reiterated 2025 revenue guidance of $390 million to $430 million.
• Reiterated expectations for non-GAAP operating margin of at least 10% at the low end of revenue guidance and higher positive cash flow in 2025 than 2024.

• Tariff dynamics creating instability for certain customers, primarily in Private Networks.
• Dependence on successful execution of product and service roadmap, including new E-Band products.

Q: Could you give more color regarding the strength in bookings in India?

A: Bookings in India are distributed between two customers with strong demand, and there's potential from a third customer related to a $150 million project.

Q: What does 'significant' mean for the potential opportunity in North America?

A: Meaningful opportunities could be north of $10 million annually for a few years.

Q: How much could gross margins potentially expand?

A: Long-term hope is 35% to 38%, with factors including improved mix, economies of scale, and more software/Private Networks sales.

Q: Talk about first half vs second half guidance. Any E-Band in India?

A: Guidance implies significant uptick in next quarters, with E-Band products expected to be delivered mainly in India in the second half.

Q: Competitive environment in developed markets?

A: In Europe, there's increasing interest in replacing Chinese vendors, opening prospects for Ceragon.

Q: Differentiation of E-Band product in India?

A: Meets cost effectiveness vs performance better than competition, with commercial terms already closed.

Q: Competitive environment in North America and Europe?

A: No major changes, but in Europe, interest in replacing Chinese vendors is opening prospects.