CRNT - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Ceragon Networks Earnings Conference Call. [Operator Instructions] I must advise you that today's call is being recorded. I'd like to hand the call over now to our first speaker today, Rob Fink, Head of Investor Relations.

Rob Fink

Thank you, operator, and good morning, everyone. Hosting the call today is Doron Arazi, Ceragon's Chief Executive Officer; and Ronen Stein, Chief Financial Officer.

Before we start, I would like to note that certain statements made on this call will constitute as 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. identifying such potential plans, although Ceragon or forward-looking contain terminology targets, believes, not management. forward-looking current statements, intends, reflect expects, other these intends as assumptions anticipates, may, estimates, all expectations Ceragon and statements of words. Such comparable terminology, uncertainties, materially Actual and from in forward-looking materially statements. those certain differ actual cause may they are projected could results to results subject as risks which to differ these that annual of other list are and published report XXXX on XX, risks XX-F been documents subsequently with Ceragon's full A filed from disclosed as Form the with by Exchange uncertainties time Securities was have as Commission. March on Ceragon in well to and time that

future events results Ceragon's obtained can to relate the also that will sec.gov no be no obligation Securities there Ceragon to website they or Exchange assurance date update and be Commission's and statements on to undertakes and filings the at from and of ceragon.com. at be website they them. are available accurate may Ceragon's they public prove made and Forward-looking prediction initially are not

In addition, include today's non-GAAP call financials. will certain

to that a Doron, is issued all For GAAP results, release non-GAAP see earlier Doron. is table I'd now of said, between that the attached Investor press over the the today, turn and the which Relations the call posted to website. With on please section reconciliation was Ceragon's yours. to like call

Doron Arazi

since record everyone. This a the morning, and year Ceragon levels you, Thank profit good record XXXX. was on financially, for Rob, highest revenue achieving operating

recurring in increasing X wireless streams. growth expand operation our primarily growing in optimization. are millimeter-wave significant TAM made to part network and To revenue and private strategy our pillars; by fastest and increasing everyone, market products share on the the transport our revenue progress helping in of end-to-end solutions customers to networks that be market, we remind Importantly, in our focusing expected our our consists of strategy diversify our

wireless revenue, achievements was in analysts, our networks more we XX% this XXXX year-over-year. to About private than the revenue during roadmap, revenue services more a than we recurring some introduced than our from in acquisition. ARR. extending $X more highlight of have was additional me XXXX. Simultaneously, us half the business the market, by than We on by annual XX%. the in grew to revenue and industry impact market regard. of and annual enabling XX% share Let from balance transport We according to We that by as even our which declined additional Siklu our XXXX more continued India. grew of recurring managed our bookings execute our And product contributed the million secured are technological revenues organic recurring and growth XX% approximately against IP-XXCX, worth These expected current lead. win gradual to significant is new take

gigabit us in the of is the industry, again a a to XX split-mount performance also once configuration product per the solution Neptune chip price proprietary front, and enabling second the likely XX per finished that introduced performance IP-XXEXA second, series, successfully expected first our in to provide be best IP-XXXXXE demand multi-band Siklu millimeter-wave XXXX, demonstrated box, [ new best that millimeter-wave, gigabit space. And Ceragon many product, single IP-XXEX, India. believe in the the a have our tests On finally, of that been by We the same that we product have the have Siklu for in product have launched as have highest industry millimeter-wave the product our by indication of ], we on been of waiting customers the the the in Ceragon developing we recent for. is version new price in By the

all-outdoor of solution. can half XXXX. split-mount many products. after During a prefers private new on address an still needs a large that it available part And developing the years expect the the including focusing started This networks of XXXX, product first market product split-mount we also primarily to we within commercially of of be

software introduced different enables business the Activation our front, the Smart door of use for opening configurations and flexibility ease and that Key features we On the products have of models. of software-as-a-service more

We both have higher cyber us the due features base our interest recently can threats for installed an in drive seen increased our future from revenue of This and increased software to encryption purchases. attacks.

use. feature this make can Key Activation even to Smart Our easier

we is became With I CEO. our in I position XXXX a believe these strong competitive has strongest entered since achievements, the been position. it

private the recent acquisition seeing and of quarter-to-quarter, strides the the from we completed network our projects organically is to months of our that the until in dynamics market believe and results Said visibility EXE this mass another Technologies market to ability continued tied compete We significantly. our pursue shifting our in execution inorganically. continue making to of reach are market impacts and our determination acquisitions I of on over can X signals of The revenue in that, the projects firmly domain. backlog. we private success increasing the XX critical improve share of The last this our a network strategy. attestation our

us are make of in this ARR more much On committed services optimistic we the few and path even front, that our recent had a managed more or about reflected growth. optimistic successes increased

performance We full to the products over can have in deals that deploy between range the market X manage are periods deliver, years. for design, turn-key where we of XX increasing interest our and to expected seen

this come in been outperforming starting typically before outperformed deployments in for XXXX. market respect and a about In subject can space growth analysts of of America, run. Ceragon visibility, very Recently, suggest very We deployments, domain, is this immune to well successful some recovery wireless reporting market the as well as also due especially low to growth the particular that has with are direction. even performance RAN market, the outperform market from for a That the said, Ceragon the transport the the XXXX as but in in CSP and continue companies' Ceragon our parts success am in indicator networks. with to offerings, global are turn other pace impacts in in us. potential the expect CSP with of the being year. XXXX made to we year market into we leading our we and the technology to yet the North the if continue approach and it benefit the on market has expect recovers positioned pace to at choice and for data we summarize, industry. To from of But soft serving RAN trends. companies, least XXXX, I fiber optimistic telecommunication recovery. signs fiber a been in India the indeed our if in another are vendor not primarily have long-term in to private progress industry for of huge short

As into expect were QX This levels believe our North reflective demand. that we confidence and and In like continue to to trend in not market. I'd in this is QX highlights had expect previously of $XX.X period, reflects bookings we navigate America, overview now sequential timing the QX lower to discussed, Ceragon I we a by to of the XXXX. million. growth continue bookings that bookings in outperform was we lower of our another region. QX, revenue an reinforces well-positioned We of QX nice QX. and as in issues saw in uptick This provide

$XX.X in revenue is million also was quarter, more as reported capabilities our We million, an Ceragon, deployment for third $XX.X quarter the cybersecurity of for attention. In previous getting exceeding opportunities see India, our record. all-time record encryption the

shipping are won QX expansion supporting We have the of customers and These deployments and networks. related deploying in to including several in been both India, customer new XG XXXX. XG equipment we in projects the

our with potential During X customers commercial months, finished have our share of the on with increase last for few account negotiations terms of the securing certain a a market competition. we of

have delivery quarters the more new Microwave for expect terms orders we our and the We E-Band based receiving started on and in commercial in products. XXXX both for coming orders

probably best being generated traction, space. price has product significant performance Importantly, our our in most IP-XXEXA the

Our us are appreciation technological and core strong relationship are our roadmap. beyond of us one strong its in for that our current capabilities customers with opportunities and and trust their more domain opening our of

opportunities phase, in for another these exploration finished are region, Pacific deployment. winning Asia which year attestation our are projects, to services municipality following India. In Ceragon access in in primarily business solutions by they multi-point the we significant strong, initial included This position Siklu to While the point was included our the managed strong that products.

energy domain. capacity well communications $X.X project million to We approximately of service a also a company a were worth as with in as in tower million win the collaboration a as provide to certain service awarded providers $XX

turn We agreements to detail. by of that, to expect XXXX. With the Ronen, to over more discuss you. have first in to Ronen our final CFO, Stein, the call over the signed half results I'll

Ronen Stein

Doron, you customer. year-over-year South account good eliminating agreement when collection and XXXX approximately successful XX% million revenue was of more morning, everyone. QX a debt benefit related another growth quarter, profit a and even XXXX XX.X% non-GAAP closing to in an with operating from American Thank than settlement $X.X on

our more While primarily and results, help the understand positioning fastest will referring the in position diversified financial inorganically segments To be have of leverage, better increasing non-GAAP markets. our organically ourselves financials. now operating and further growing we in to strengthening you invested I

of use financial measures, refer reconciliations including press you our For more these we non-GAAP today's information measures, release. regarding of to

quarter review Let $XX.X for million up results. XX.X% XXXX. fourth in fourth the were Revenues QX quarter the from million, me now $XXX.X

EMEA fourth million We and non-GAAP customers terms that compared in in and million, respectively, quarter for X Our $XX.X basis for XXXX. $XX.X of the XX.X% North more strongest were million regions to in $XX.X our on a than by the India the $XX.X profit of XX% with had QX quarter of million quarter fourth revenues was America. followed revenues. Gross an increase contributed

margin of QX gross Our gross in XX.X% was XXXX. with XX.X% margin compared non-GAAP

despite and on margin We maintaining control achieved continued change this gross mix. improving focus costs. costs over this continuous product revenues, to We increasing our regional in the by achieve revenue fixed

from volumes to in changes mix. may margins continue gross revenue fluctuate Our and to due quarter-to-quarter

the quarter $X.X non-GAAP expenses, general, expenses expenses. As acquisition in million operating Research impact fully operating and fourth million, thus for of XXXX development our were impact the end the $X.X from Siklu in basis to XXXX. expenses in comparison QX the XXXX include XXXX a on up the for of and operating at

percentage million, revenue, to a quarter year. the last QX fourth X.X% fourth from were up $XX.X non-GAAP the were expenses marketing basis for expenses the and X.X% $XX.X quarter Sales a our in of in in XXXX. fourth million compared on As R&D quarter

$X.X of quarter last million fourth compared fourth fourth the million administrative were were quarter marketing sales XXXX. As for a a expenses XX.X% quarter the $X.X year. General percentage X.X% in QX the to to in non-GAAP revenue, and in and on compared basis expenses

G&A was quarter for quarter percentage a the XXXX. million were a X.X% in quarter fourth of the As expenses in Operating $XX.X on revenues, QX non-GAAP last basis fourth X.X% the fourth income compared compared for million with $X.X year. to

the in fluctuations the strengthening As X.X% the a a on was income quarter in fourth percentage expenses currencies, quarter expenses. by million, dollar and the quarter of impacted non-GAAP to basis exchange other interest fourth $X.X XX.X% versus fourth for reduction several revenues, were foreign continuous offset of a and U.S. operating year. Financial the compared non-GAAP negatively in by last

million share $X for the non-GAAP diluted QX fourth for million $X.X the basis compared $X.XX quarter basis to was were million. non-GAAP expenses share a $X.XX on income or fourth XXXX. on $X.X tax per diluted per for a Our or Net quarter

results. to in compared basis XX.X% XX.X% was $XXX.X XXXX. to XXXX up full the were for Revenues increase $XXX.X million, million in XXXX. a on $XXX.X from an of year profit million non-GAAP $XXX.X million, Turning Gross

time of Our was for XXXX. $XX with margin with gross million XXXX. $XX.X income the XX.X% compared record, year a non-GAAP non-GAAP an gross all million, was Operating for on margin XX.X% compared in basis

share of to per was As share $X.XX million a XX.X% diluted diluted or was revenues, XXXX. year income year. the basis or per $XX.X operating Net $XX.X percentage X.X% on to $X.XX compared for a million for for non-GAAP compared last non-GAAP income the year

balance $XX.X for XXXX. our had year of position $XX.X at our compared of XX, we the sheet, to net As $XX.X XX, million capital Short-term at the million facilities that were was end XXXX. net $XX.X $X.X working of loans sufficient XXXX. to for December $XX.X a at million cash end cash as million and of our the We position position negative December compared to have a of compared million believe cash and cash needs. We positive operations are million

XXXX. in India. The efforts to $XX.X from of the improvement since inventory million, following shipments substantial of the end down levels Our mainly is continued inventory XXXX to reduction at components availability to was the our million $XX.X streamline end and XXXX December at related

Our reflecting as at business of million of end India. of million trade end at the to $XXX.X receivables XXXX the our growth $XXX.X at the compared are in December XXXX,

XXX Our DSO now stands days. at

investing cash for As flow, and our XXXX activities cash net million. operations in generated was by $X.X flow

XXXX our outlook. to Turning

We of $XXX be expect $XXX between XXXX revenues to inclusive million to acquisition. EXE million

at our improving range operating like our low revenue in least and visibility. We our XX% carefully at we at end of especially margins the continue of expect cost non-GAAP lower times as structure look expenses, these of even

expect questions. cash levels. With flow compared call for open free the that, I also to your increase XXXX We our now to Operator?

Operator

of Needham first Ryan Our Koontz Company. of the Instructions] from comes & [Operator question line today

Ryan Koontz

and this Can relationships that they in the industry outline company that company you to to this related can My types market? the bring of have us Yes. role was question plays acquisition. X End energy the maybe target what the customer new they for about End

Doron Arazi

this Ryan, is Doron.

and for EXE have able system you very a they some good over domain. have and them very portfolio ] even software are very nice thank prominent utilities of your well-known reputation And industries. being very to that very his that software for this via a And is level the a they in relationship they They kind is to other integrator, using also their of question. time, [ space is of the were post energy their in customers, relationship of strong. network one are within America nicely networks So for those the North helping very deployment. This managing OEMed to technology to actually are them software vendors customers. this the that a in is particular providing own build customers primarily

and the can our combination in boost predominantly they development X the strong the additional space. North segments time relationship of were think over with energy understanding in able of to in the the the software needs strong a outside, of and network capabilities and the America market, together I of market very in networks private success the terms these in utilities private build

Ryan Koontz

helpful, or That's across... energy These of or are broadly kind really producers distributors Doron.

Doron Arazi

broadly. It's

a gas could be cases they're producers. offshore can of lot different have -- the and could different probably This networks. You could XX% be see applicable And There's I cases. that onshore use This for mining. be solutions that use energy I under manufacturers XX% would saying and oil it -- of both their cases. be segment. would to the use

Ryan Koontz

like sounds a opportunity. great It

network you're slips. You on from mentioned terms private maybe coming in? verticals what some are these that on some the And here opportunities of customer seeing deal these Are slips of the types in call due market side channels?

Doron Arazi

Yes.

solution. user, the up we about private or end reporting integrator, on the best usually, the go and go helping via them direct we the where networks to focusing either we is system but have So come primarily with integrator relationship deals the with ultimate

or slippage some especially this are that speaking, in either based the deals, impact sometimes if and where driven decision that you the the government strong the by on have integrators make on eventually, may industry available working decision. time budget generally system defer takes architecture a to it it's is with close and But So solution. pattern institutions very the we direct a direct

Ryan Koontz

India. in can big Any your the with been you that talked or there? operators there. share These us are traditional about color And some renewals customers expansions it. have contract Got you mobile

Doron Arazi

Yes.

still the large we're So players. about talking

starting are XXXX position. probably best with We the

feel closed just was the for silver repeating XXXX. XXXX when of product since beginning It market. this XXXX being a kind the like is of think us product -- at conditions importantly, the actually, are of at a time, the starting This delivering a pricing own for But to to the to out they the market, announced we that more mass least production, are the demand going be that in higher, I customers which is or at millimeter-wave and bullet. microwave was for QX. same very that we E-Band, I IP-XXEXA IP-XXC this think happen product. successful this I time, of And India already the winning with winning solutions the waiting position was nowadays the for for continue series. CX are is we and X the when product X obviously this product our we especially this with

Ryan Koontz

kind last new products times, lower and it. Got lot shaping should products in A of That's of great. consideration new costs. one the if think gross margins new around can, gross year I have ramping? margins and yields How we higher of about start-up for And one, the products.

Doron Arazi

No, every may that say, speaking, Generally I certain with our to the face regional quarter. sure, for although -- products, period certain we during we believe But speaking, as of, introduce and this margins second associated, of year. each new also the part improve mix would investment. is would a I gross in the these generally expect I more

Operator

question of ROTH comes Capital. from next the Searle line Our from Scott

Scott Searle

on enhance around and the returning that area the half looking with just Maybe M&A North have continue add you to Doron, quarter. and for with of of terms been What's could Siklu America on the a Are of to in to networks. this questions networks to in And of softness space term End. on X in little bit level comfort second I wondering this front. Ryan's front, if the the of year? the private End you know now follow-up in private there's also that I'm give growth your portfolio? acquisitive you some expectations longer some still

Doron Arazi

with the start last your thank Scott, for will one. you I questions.

to search M&A So actually for with opportunities. our continuous it strategy is execute part of

part daily for strengthen of work to it we us. for management in of that's the pursue second Ceragon. When pertains could our part that be to here definitely, networks, position. that our such opportunities continue the private as So And believe the can we'll stronger year

last also not this and point is we of see the I the deal North actually changes are won example. Siklu particularly other an places solely is are multi-point is take other focused increased internally, even another with in America. world. This organizational municipalities product that more you, certain business. There the that in But North to we such We that private for that just there remind think to we APAC opportunities have opportunities just on lot well-positioned America. strategy in to done pursue that, in indications to network is leveraging a for demand

I So networks in percentage about believe better in domain. be I North private of And am will very Yes, very, high optimistic this we growth general. will in that continue XXXX. I believe that much America in

Scott Searle

And to second. maybe Very talk half about a second visibility for to level the could wondering helpful. this I'm India comfort year. you the of if shift and in over

XG both as from benefiting particularly latter you're and indicated portion get how I'm this XG start we builds. of E-Band year? also fits You that, to into the wondering into

Doron Arazi

Yes.

we way -- April, at that they the in for about we usually rollout. with basically the a that market about the from from that works X start starts commercials, product fiscal X process our India So we out buy before expect is the us, for that the discussions next indication the us, look, volumes year operators the negotiation process want we to negotiation the of and the following get share. finished plans strong to they kind And their basically, customers. this of a buy And obviously, given about

the in The delivering the under we one still contract. are won is and we other back one that old XXXX

least yet at there was not So the no to terms. further discuss there, need,

to days some driving And XXXX, for homes. fixed network E-Band operators also is the this And the that customers driver wireless the our a E-Band the products. will significant serve we I speak, can that see demand wireless just main an increase we are the phenomena both and a we part to of very fixed we capacity. order increase we'll as product of E-Band, received part intend ago, access of But the already but QX solution start and few buying go to quantities to that for not second back look I to we the usually the much you strong with XXXX. orders and is that basically new product at as more tell delivering in for QX. backhaul serve least we for believe start contain going Now mobility, certain in of see in a when working into on very old and ramp-up their this to

Scott Searle

if us targeting this And we some operating give you the I directional on wonder into if for I as terms margin Ronen, Very could guidance of first year, in helpful. XX% lastly, could. plus the quarter. OpEx go

Ronen Stein

that we the in mentioned the going as possible. align we high, to remarks, as much monitoring the on I are is as to ensure and as OpEx So are that OpEx visibility not

generally, gross on of -- is will the with actual the also other possible as on the of is target we regarding align revenues mentioned ensure gross Doron the hand that the the obviously the before revenues the the dependent XX%. revenues. and margin to of to the The So close the that what volume and as mixture targets is margins

Operator

O'Neill comes line Our next question from Theodore from Hills Research. of today the

Theodore O'Neill

I just combination there talk talk about this this of on wondering share very in India, could in versus you? can for in market technology success if the was quarter. -- Congratulations revenue sort you That's your wins the about briefly. challenging Is the good environment. you of

Doron Arazi

position important in would strong is India I start our that technology. drove our the by most that thing saying

We of to very market. are coming most And for cutting with good performance products, in a creating demand years cases, us. and the new factors reliable and not price vendor is this many also ongoing very a edge Indian delivering

not, the be And on know they they functional also that for did we product new not with has it XX% introducing us intimate we for probability, rely that that that in they to are for will are did IP-XXCX the we where we to can from it's pursuing, day it they can actually customer if will relationship that if can know the as they XXXX. specific X they test, us know this over trust very that where even an for that built strong fully that products time cases think customers. I they the the opens us for knowing that spec, actually coming opportunities find use relationship eventually and specific the least commit at created asking some are and solutions. has us And if with us. utmost us of And more do up meet a

So the price all in relationship a strong with in-depth technology, and market of executives. the performance very Indian very of understanding all, strong it's over combination building needs of a in terms obviously, customers' time,

Theodore O'Neill

Doron, if the about and managing talk down And how up Okay. balance sheet, personnel? Tier impact has business having challenge the do the you wonder could I of income ramping your terms and what you X in you the sort that of of statement, of kind manage

Doron Arazi

Well, partially want start phenomenon. resolve saying to that all, strategy at by first of this I for to least pillar exactly our meant X is

providers, exactly whether and cyclical. services, networks after private private long-term it's CSP networks this very in answer that's for going fluctuation managed service market the that is after for going the by or by So for

the productivity. efficient. more baseline the side, are and the model few our versus we strategy call, looking centers reducing changing And as we low-cost of excellence and And of structure are a and very cost cost, mentioned are obviously, our in building have cost of by they Now this a cost back where into in also terms on previous the concentrated obviously conference in by piece. I office expense we are are where low a becoming functions those lot of that structured centers

the the we usually do to we recovery. don't and weakness new the that piece. then a of come when and regions up every being at years one we measures of are is lower, approach. gradual And is strategy. that that, So part is see this certain It's that's looked see visibility a It's we that the our X-year a becoming strongest the X with an top alignments is a plan On that immediate we plan. expect in taking

generally specific as So expenses we adjustments striving costs necessary very we necessary or activities also that contain making we to the and as sub-contractors are them speaking, and are strong see either in make our we adjustments, use we don't applicable. the

Theodore O'Neill

My last issues? you question supply seeing is, chain any are

Doron Arazi

The issues. the to managing supply since we our better tactical component is minimize actually comes that meticulously short order a might I any fees. inventory vendors driving to and a may we the there some very pay are is have some There it that expedite very and where in far seen results eventually, liabilities scarcity to But exposure, component truly sometimes so this here chain policy missing. and And is And not on cases believe answer sometimes our is financial situation. operational we need for significant and be specific this much us.

Operator

the Our today next question comes Jonathan from line of [ Pierce ].

Jonathan Richard Pierce

impact had you a have this I actually starting to customer. which see. to a with really great like seems past what from are all quarter then cylinders, Just the is X negative from And guys ARR fire nice you positive seen want question American like to has to do quarter impact. your My on South understand It year. say issue the congratulations great quarters guys and It seems issue. on a that with really, a

now Just wondering light subsequent if guys us? affecting could behind that? more bit that's a then guys you it if or at you shed quarters, see if little on all, also, And how

Ronen Stein

XXXX. Okay. of X debt in provisioned was are like the QX a Jonathan, that resolving QX had quarters It the already all one-time of impact impacted. and

for our And that million but it's that settlement collected up about fully further something amount, So we books the The anymore. QX. higher anymore. but fact a amounts, are books our it's $X.X altogether added provisioned was we not and on chasing still is in not QX on

up, not -- higher. that mentioned ARR impact obviously, and less And in ARR is comments, I The more towards business that as shifted the -- that is anything is anymore. ARR active. is more line The my itself India -- or on So went There no the fact is X. no customer DSO in India. the the in with

Doron Arazi

comments, profit margin. collections Ronen's X are adjusted operating you business. to investor there, non-GAAP do of presentation, would we on see for carving that look normal non-GAAP the significant course we how shows profit in I chart the top very of the operating normalize just if just investors is And there a out these and the add at our that actually community

Operator

today the Our from of comes Gunther last line Karger. question

Gunther Karger

way. Yes. company next but you're be like you remark over time, to want looks around the I've been well the Congratulations. I you've that congratulations. the your encountered yourself, the and well storms remarkably and years I followed that not done through on have just We and it wish may

Doron Arazi

thank much with to I being you possible. be able you words. wish continuing hopefully health. as to us with And us so as long will continued wish up continue success. kind following on best Gunther, you I for you your wish for I that

Gunther Karger

will that I as as long I do can.

Operator

proceed. further questions. We no have Please

Doron Arazi

look of on of As confidence in limited. our are we achieve the revenues. million strategic stated scale Have of we enter move outlook pieces annual call. to a long-term visibility quarterly everyone. for our as Hence, and growth place from $XXX that day, combination towards towards organic I this XXXX, as on our to updating following our further We near-term, achieving In are the target good only well we We a acquisitions. believe strategy has targets. us level is next our profitability to in you our projections. forward continue prudent achievements on executing grown. remain in XXXX, focused in revenue and our Long-term, long-term forward

Ceragon Networks (CRNT) 11 Feb 252024 Q4 Earnings call transcript