Company Generates $2.1 Million in GAAP Net Income and Positive Free Cash Flow
Raises Full Year Revenue Outlook to $334 - $348 Million
Rosh Ha’ain, Israel, August 01, 2023 - Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today reported its financial results for the second quarter and six months ended June 30, 2023.
Q2 2023 Financial Highlights:
- Revenues of $86.2 million
- Operating income of $5.7 million on a GAAP basis, or $7.4 million on a non-GAAP basis; The non-GAAP operating income excludes an $0.9 million restructuring charge related to European operations.
- EPS of $0.02 per diluted share on a GAAP basis, or $0.05 per diluted share on a non-GAAP basis
Q2 2023 Business Highlights:
- Book-to-bill above 1 on a quarterly and trailing 12-month basis
- Ceragon won a multi-year contract worth up to $4.2 million with the City of Cincinnati to upgrade its public safety network
- North America:
- Nearly matched India in Q2 bookings, with bookings increasing nearly 10% sequentially compared to Q1
- Continued strong revenue in Q2
- India:
- Strongest region in terms of Q2 bookings and revenue
- Strong demand for ongoing 4G network and 5G network rollouts
Doron Arazi, CEO, commented: “Ceragon delivered strong double digit year-over-year revenue growth, margin expansion and solid profitability in the second quarter. During the quarter, we again recorded bookings that exceeded our revenue levels which improved our visibility into the third quarter and strengthened our confidence for the full year. We have not seen any signs of a slowdown or changes in demand across our customer base and remain focused on our operational execution as well as efforts to enhance our product portfolio including new product line based on system-on-a-chip technology."
“Demand in key geographies remains robust, and we continue to deliver solid execution,” Arazi added. “Our year-to-date performance and improved visibility into the third quarter has given us the confidence to increase our full-year guidance and narrow the range to increase the midpoint.”
Primary Second Quarter 2023 Financial Results:
Revenues were $86.2 million, up 21.9% from $70.7 million in Q2 2022 and up 3.3% from $83.4 million in Q1 2023.
Gross profit was $30.4 million, giving us a gross margin of 35.2%, compared with a gross margin of 30.3% in Q2 2022 and 33.8% in Q1 2023.
Operating income (loss) was $5.7 million compared with $(0.3) million for Q2 2022 and $4.7 million for Q1 2023.
Net Income was $2.1 million, or $0.02 per diluted share compared with $(1.5) million, or $(0.02) per diluted share for Q2 2022 and $2.0 million, or $0.02 per diluted share for Q1 2023
Non-GAAP results were as follows: Gross margin was 35.3%, operating profit was $7.4 million, and net income was $4.4 million, or $0.05 per diluted share.
Cash and cash equivalents were $24.5 million at June 30, 2023, compared to $26.4 million at March 31, 2023.
For a reconciliation of GAAP to non-GAAP results, see the tables below.
Revenue Breakout by Geography:
|
|
Q2 2023 |
|
· India |
31% |
|
· North America |
26% |
|
· Latin America |
15% |
|
· Europe |
12% |
|
· APAC |
11% |
|
· Africa |
5% |
Outlook
Ceragon management increased full-year revenue guidance to $334 million to $348 million, up from prior guidance of $325 - $345 million and expects full-year non-GAAP profitability. Our guidance is based on current visibility and assumes normal conversion of bookings to revenue. Our revenue target for fiscal 2027 is approximately $500 million, and we also target increasing our gross margins to at least 34-36% over the same period.
Conference Call
The Company will host a Zoom web conference today at 8:30a.m. ET to discuss the results, followed by a question-and-answer session for the investment community.
Investors are invited to register by clicking here. All relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will be available on our website at www.ceragon.com within 24 hours after the call.
About Ceragon Networks
Ceragon Networks Ltd. (NASDAQ: CRNT) is the global innovator and leading solutions provider of 5G wireless transport. We help operators and other service providers worldwide increase operational efficiency and enhance end customers' quality of experience with innovative wireless backhaul and fronthaul solutions. Our customers include service providers, public safety organizations, government agencies and utility companies, which use our solutions to deliver 5G & 4G broadband wireless connectivity, mission-critical multimedia services, stabilized communications, and other applications at high reliability and speed.
Ceragon's unique multicore technology and disaggregated approach to wireless transport provides highly reliable, fast to deploy, high-capacity wireless transport for 5G and 4G networks with minimal use of spectrum, power, real estate, and labor resources. It enables increased productivity, as well as simple and quick network modernization, positioning Ceragon as a leading solutions provider for the 5G era. We deliver a complete portfolio of turnkey end-to-end AI-based managed and professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries. For more information please visit: www.ceragon.com
Ceragon Networks® and FibeAir® are registered trademarks of Ceragon Networks Ltd. in the United States and other countries. CERAGON ® is a trademark of Ceragon Networks Ltd., registered in various countries. Other names mentioned are owned by their respective holders.
Safe Harbor
This press release contains statements that constitute “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. Such forward-looking statements are based on the current beliefs, expectations and assumptions of Ceragon’s management about Ceragon’s business, financial condition, results of operations, micro and macro market trends and other issues addressed or reflected therein. Examples of forward-looking statements include, but are not limited to, statements regarding: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, supply chain and shipping, components availability, growth prospects, product development, financial resources, cost savings and other financial and market matters. You may identify these and other forward-looking statements by the use of words such as “may”, “plans”, “anticipates”, “believes”, “estimates”, “targets”, “expects”, “intends”, “potential” or the negative of such terms, or other comparable terminology, although not all forward-looking statements contain these identifying words.
Although we believe that the projections reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations therefrom will not be material. Such forward-looking statements involve known and unknown risks and uncertainties that may cause Ceragon’s future results or performance to differ materially from those anticipated, expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the effects of global economic trends, including recession, rising inflation, rising interest rates, commodity price increases and fluctuations, commodity shortages and exposure to economic slowdown; risks associated with delays in the transition to 5G technologies and in the 5G rollout; risks relating to the concentration of our business on a limited number of large mobile operators and the fact that the significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect us; risks resulting from the volatility in our revenues, margins and working capital needs, substantial losses incurred and negative cash flows generated, which, if continue, may significantly adversely impact our results of operations and cash flow; the high volatility in the supply needs of our customers, which from time to time lead to delivery issues and may lead to us being unable to timely ulfil our customer commitments; risks associated with inaccurate forecasts or business changes, which may expose us to inventory-related losses on inventory purchased by our contract manufacturers and other suppliers, to increased expenses should unexpected production ramp up be required, or to write off to parts of our inventory, which would increase our cost of revenues; and such other risks, uncertainties and other factors that could affect our results of operation, as further detailed in Ceragon’s most recent Annual Report on Form 20-F, as published on May 1, 2023, as well as other documents that may be subsequently filed by Ceragon from time to time with the SEC.
We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Ceragon does not assume any obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless required by law.
While we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. In addition, any forward-looking statements represent Ceragon’s views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Ceragon does not assume any obligation to update any forward-looking statements unless required by law.
Ceragon’s public filings are available on the Securities and Exchange Commission’s website at www.sec.gov and may also be obtained from Ceragon’s website at www.ceragon.com.
-Tables to be downloaded below -
