Ceragon Networks Ltd. Q2 FY2025 earnings call

• Doron noted that Q2 revenue was below expectations primarily due to a single customer in India facing financial challenges, but the company's operational strength and innovation were encouraging.
• North America saw a multimillion dollar project as a preferred vendor for a new major Tier 1 carrier, leveraging Siklu technology.
• Point-to-multipoint solutions were gaining interest, with successful proof-of-concept projects in North America and Europe.
• The IP-50EXP solution was gaining traction as a leading traditional microwave solution alternative.
• The acquisition of E2E was progressing, with bookings ahead of plan despite some slowdowns in private networks.

Ceragon's second quarter revenue was $82.3 million, a decrease of 14.4% from $96.1 million in the second quarter of 2024. North America was the strongest region, contributing $26.8 million, while India contributed $24.8 million. Non-GAAP gross margin was 35.2%, unchanged from the prior year period. Non-GAAP net income for Q2 2025 was $2.5 million or $0.03 per diluted share, down from $9.9 million or $0.11 per diluted share in Q2 2024.

• Assumes second half revenue to be roughly in line with the first half.
• Believes it can deliver non-GAAP profit and generate cash while continuing to invest in strategic pillars: advanced wireless connectivity solutions, private networks, and managed services.

• Risks include India customer financial challenges, geopolitical situation in Israel and related regional conflicts, global economic trends, risks associated with integration of acquired businesses, risks related to 5G deployment, risk of business concentration on limited large mobile operators, revenue/margin volatility, and disagreements with tax authorities.

Q: Scott Searle from ROTH Capital asked about confidence in not losing market share in India and visibility into the second half related to India.

A: Doron stated confidence based on strong competitive position and ongoing dialogues with customers, noting uncertainty but belief in no permanent share loss and second half revenue assumption.

Q: Ryan Koontz from Needham asked about emerging Tier 1 North American opportunities.

A: Doron mentioned opportunities due to 5G FR2 rollout creating new use cases, with a recent win expected to add significantly to revenue in 2026.

Q: Ryan Koontz asked about acquisition of E2E and private networks performance.

A: Doron said booking was ahead of plan despite slowdowns in private networks, not related to Ceragon's product.

Q: Christian Schwab from Craig-Hallum asked about addressing operational expenses.

A: Doron and Ronen stated intention to continue investing in strategy as long as profitable, with disciplined operating model restructuring.

Q: Theodore O'Neill from Hills Research asked about Siklu point-to-multipoint use cases and competitive landscape.

A: Doron discussed use cases in smart cities and CSP domain, and competitive opportunities due to operator issues and product price performance.

Q: Rommel Dionisio from Aegis asked about private networks in Europe and acquisition pace.

A: Doron said private network opportunities in Europe and no slowdown in acquisition pace, focusing on suitable acquisitions.