In This Article:
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Ceragon Networks Ltd (NASDAQ:CRNT) reported the highest booking levels since Q1 2024, indicating strong demand.
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Revenue in India increased by 65% year over year, demonstrating significant growth in this key market.
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The acquisition of E2E Technologies is expected to be accretive to non-GAAP earnings by the second half of 2025.
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Ceragon Networks Ltd (NASDAQ:CRNT) is strategically aligned for long-term success in the evolving wireless connectivity landscape, with strong anticipated demand for microwave and millimeter wave products.
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The company is actively exploring additional strategic M&A opportunities to expand in high-growth areas for wireless connectivity.
Negative Points
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Gross profit on a non-GAAP basis decreased by 8.6% from Q1 2024, with a decline in gross margin from 36.7% to 33.5%.
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The net cash position decreased from $10.1 million at the end of 2024 to $2.5 million, largely due to the acquisition of E2E.
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Restructuring and related charges increased to $3.7 million in Q1 2025 from $1.4 million in Q1 2024.
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Non-GAAP net income decreased to $2.6 million or $0.03 per diluted share from $4.7 million or $0.05 per diluted share in Q1 2024.
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The company faces potential instability due to tariff dynamics, particularly affecting private network customers.
Q & A Highlights
Q: Can you provide more details on the strength in bookings in India? Is it concentrated among a few customers? A: (CEO) The bookings in India are not concentrated on a single customer. They are distributed between two major customers, with potential additional bookings from a $150 million project for a major network modernization initiative. We are also in discussions with other customers who have reduced spending in recent years but are now exploring new opportunities.
Q: Regarding the significant opportunity in North America, could you provide more details on its potential size? A: (CEO) The opportunities we are working on in North America could become meaningful, potentially exceeding $10 million annually for several years.
Q: What are the prospects for gross margin expansion in the future? A: (CFO) Gross margin expansion could be driven by improved revenue mix, economies of scale, and increased sales of software and private network solutions. We aim for long-term gross margins of 35% to 38%, depending on the revenue mix and software sales.
Q: How does the first half of the year compare to the second half in terms of growth, particularly in India? A: (CEO) We expect significant growth in the second half of the year, primarily driven by the rollout of fixed wireless access technology in India. While we are prepared for this deployment, we remain cautious and will monitor customer orders and delivery timelines closely.