Ceragon Reports 11.5% Increase in Quarterly Revenue, GAAP EPS of $0.09 Per Share in the Second Quarter
Significant Penetration into Private Networks
Management Reiterates Full-Year 2024 Outlook
ROSH HA'AIN, Israel, Aug. 7, 2024 /PRNewswire/ -- Ceragon (NASDAQ: CRNT), the leading solutions provider of end-to-end wireless connectivity, today reported its financial results for the second quarter period ended June 30, 2024.
https://mma.prnewswire.com/media/1704355/Ceragon_Networks_Ltd_Logo.jpg
Q2 2024 Financial Highlights:
-- Revenues of $96.1 million
-- Operating income of $10.4 million on a GAAP basis, or $13.1 million on a
non-GAAP basis
-- Net Income of $7.8 million on a GAAP basis, and net income of $9.9
million on a non-GAAP basis
-- EPS of $0.09 per diluted share on a GAAP basis, or $0.11 per diluted
share on a non-GAAP basis
Q2 2024 Business Highlights:
-- India:- Record quarterly revenues since Q2 2018, including revenue from
the new, top-tier customer- Substantial ramp up in demand for new
IP-50CX product, with more than 20,000 radio units delivered
-- North America:- Bookings remain strong, supported by Private Network
wins- Significant Private Network orders, including nine new customers-
Six consecutive quarters of revenue above $20 million
Doron Arazi, CEO, commented: "Our stated strategy of diversifying our business by expanding our presence with private networks has been successful. We have added significant bookings from private networks, both in North America and in other key regions, meaningfully growing our business in our addressable market. Demand in India remains robust, and we are growing market share in the region. We also have seen increased interest in our software solutions that can enable recurring revenue growth. New products introduced in the last six months are facilitating our growth, with significant shipments and high levels of customer satisfaction. We are well-positioned for continued profitable growth."
Primary Second Quarter 2024 Financial Results:
Revenues were $96.1 million, up 11.5% from $86.2 million in Q2 2023 and up 8.6% from $88.5 million in Q1 2024.
GAAP Operating income was $10.4 million compared with $5.7 million for Q2 2023 and $4.2 million for Q1 2024.
GAAP Net income was $7.8 million, or $0.09 per diluted share, compared with $2.1 million, or $0.02 per diluted share for Q2 2023 and $0.4 million, or $0.00 per diluted share for Q1 2024.
Non-GAAP results were as follows: Gross margin was 35.2%, operating profit was $13.1 million, and net income of $9.9 million, or $0.11 per diluted share. The second quarter included $4 million benefit related to an initial collection from a $12 million debt settlement agreement reached with a South American customer. Another installment was paid during Q3, and the remaining installment is expected to be paid subject to several conditions.
Balance Sheet
Cash and cash equivalents were $26.3 million on June 30, 2024, compared to $28.8 million on March 31, 2024.
For a reconciliation of GAAP to non-GAAP results, see the attached tables.
Revenue Breakout by Geography:
Q2 2024
India 37 %
North America 24 %
EMEA 20 %
Latin America 10 %
APAC 9 %
Outlook
Management reiterated its 2024 outlook:
-- Revenue of $385 million to $405 million, representing growth of 11% to
17% compared to 2023 revenue. This guidance includes the contribution
from Siklu, which was acquired in December 2023.
-- Non-GAAP operating margins are targeted to be at least 10% at the
mid-point of the revenue guidance.
-- As a result, management expects increased non-GAAP profit and positive
free cash flow for the full year of 2024.
Conference Call
The Company will host a Zoom web conference today at 8:30 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Recent geopolitical events could impact the live question and answer session. In this unlikely event, management's prepared remarks will be pre-recorded, and the question and answer session would be rescheduled.
Investors are invited to register by clicking here. All relevant information will be sent upon registration.
If you are unable to join the live call, a replay will be available on our website at www.ceragon.com within 24 hours after the call.
About Ceragon
Ceragon (NASDAQ: CRNT) is the global innovator and leading solutions provider of end-to-end wireless connectivity, specializing in transport, access, and AI-powered managed & professional services. Through our commitment to excellence, we empower customers to elevate operational efficiency and enrich the quality of experience for their end users.
Our customers include service providers, utilities, public safety organizations, government agencies, energy companies, and more, who rely on our wireless expertise and cutting-edge solutions for 5G & 4G broadband wireless connectivity, mission-critical services, and an array of applications that harness our ultra-high reliability and speed. Ceragon solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries.
Through our innovative, end-to-end solutions, covering hardware, software, and managed & professional services, we enable our customers to embrace the future of wireless technology with confidence, shaping the next generation of connectivity and service delivery. Ceragon delivers extremely reliable, fast to deploy, high-capacity wireless solutions for a wide range of communication network use cases, optimized to lower TCO through minimal use of spectrum, power, real estate, and labor resources - driving simple, quick, and cost-effective network modernization and positioning Ceragon as a leading solutions provider for the "connectivity everywhere" era.
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, 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; The effects of the evolving nature of the war situation in Israel and the related evolving regional conflicts; 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; disagreements with tax authorities regarding tax positions that we have taken could result in increased tax liabilities; 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 fulfil our customer commitments; 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 March 21, 2024, as well as other documents that may be subsequently filed by Ceragon from time to time with the Securities and Exchange Commission.
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.
The results reported in this press-release are preliminary and unaudited results, and investors should be aware of possible discrepancies between these results and the audited results to be reported, due to various factors.
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.
Ceragon Investor & Media Contact:
Rob Fink
FNK IR
Tel. 1+646-809-4048
crnt@fnkir.com
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2024 2023 2024 2023
Revenues 96,088 86,151 184,586 169,560
Cost of revenues 62,627 55,795 119,057 111,028
Gross profit 33,461 30,356 65,529 58,532
Operating expenses:
Research and development, net 8,385 7,812 17,232 15,750
Sales and Marketing 11,508 9,778 22,769 19,974
General and administrative 2,295 6,218 8,158 11,542
Restructuring and related charges 897 1,416 897
Acquisition- and integration-related charges 915 - 1,377
Total operating expenses 23,103 24,705 50,952 48,163
Operating income 10,358 5,651 14,577 10,369
Financial expenses and others, net 1,916 1,886 4,777 3,344
Income before taxes 8,442 3,765 9,800 7,025
Taxes on income 609 1,677 1,564 2,969
Net income 7,833 2,088 8,236 4,056
Basic net income per share
0.09 0.02 0.10 0.05
Diluted net income per share
0.09 0.02 0.09 0.05
Weighted average number of shares used in
computing basic net income per share
85,743,770 84,365,168 85,632,241 84,359,762
Weighted average number of shares used in
computing diluted net income per share
87,921,507 85,312,954 87,753,163 85,152,634
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
June 30, December 31,
2024 2023
Unaudited Audited
ASSETS
---
CURRENT ASSETS:
---
Cash and cash equivalents 26,303 28,237
Trade receivables, net 112,895 104,321
Inventories 59,490 68,811
Other accounts receivable and prepaid expenses 17,601 16,571
Total
current assets 216,289 217,940
---
NON-CURRENT ASSETS:
---
Severance pay and pension fund 4,807 4,985
Property and equipment, net 33,853 30,659
Operating lease right-of-use assets 17,817 18,837
Intangible assets, net 16,510 16,401
Goodwill 7,749 7,749
Other non-current assets 2,010 1,954
Total
non-current assets 82,746 80,585
---
Total
assets 299,035 298,525
---
LIABILITIES AND SHAREHOLDERS' EQUITY
---
CURRENT LIABILITIES:
---
Trade payables 67,405 67,032
Deferred revenues 2,561 5,507
Short-term loans 28,450 32,600
Operating lease liabilities 3,151 3,889
Other accounts payable and accrued expenses 25,756 23,925
Total
current liabilities 127,323 132,953
---
LONG-TERM LIABILITIES:
---
Accrued severance pay and pension 8,657 9,399
Deferred revenues 670 670
Operating lease liabilities 13,142 13,716
Other long-term payables 5,742 7,768
Total
long-term liabilities 28,211 31,553
---
SHAREHOLDERS' EQUITY:
---
Share capital 224 224
Additional paid-in capital 440,173 437,161
Treasury shares at cost (20,091) (20,091)
Other comprehensive loss (9,853) (8,087)
Accumulated deficit (266,952) (275,188)
Total
shareholders' equity 143,501 134,019
---
Total
liabilities and shareholders' equity 299,035 298,525
---
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2024 2023 2024 2023
Cash flow from operating activities:
Net income 7,833 2,088 8,236 4,056
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 2,941 2,582 5,880 5,135
Loss from sale of property and equipment, net 169 20 169 30
Stock-based compensation expense 1,566 808 2,470 1,977
Decrease in accrued severance pay and (212) (280) (564) (344)
pensions, net
Increase in trade receivables, net (16,023) (6,620) (9,247) (6,910)
Decrease (increase) in other assets (including other accounts (652) (445) (1,383) 551
receivable, prepaid expenses, other non-current assets, and
the effect of exchange rate changes on cash and cash
equivalents)
Decrease in inventory 1,186 893 8,555 4,059
Decrease in operating lease right-of-use assets 1,694 886 2,626 1,897
Increase (decrease) in trade payables 12,075 2,835 589 (3,955)
Increase (decrease) in other accounts payable and accrued (2,196) 2,620 (94) 2,326
expenses (including other long-term payables)
Decrease in operating lease liability (1,922) (1,152) (2,942) (2,518)
Increase (decrease) in deferred revenues (1,637) (1,054) (2,946) 386
Net cash provided by operating activities 4,822 3,181 11,349 6,690
Cash flow from investing activities:
Purchases of property and equipment, net (4,562) (2,330) (7,955) (5,472)
Software development costs capitalized (676) (549) (989) (1,837)
Net cash used in investing activities (5,238) (2,879) (8,944) (7,309)
Cash flow from financing activities:
Proceeds from exercise of stock options 284 30 542 30
Proceeds from (repayments of) bank credits and loans, net (2,050) (2,300) (4,150) 2,050
Net cash
provided by (used in)
financing activities (1,766) (2,270) (3,608) 2,080
Effect of exchange rate changes on cash and cash equivalents (298) 74 (731) 120
Increase (decrease) in cash and cash equivalents (2,480) (1,894) (1,934) 1,581
Cash and cash equivalents at the beginning of the period 28,783 26,423 28,237 22,948
Cash and cash equivalents at the end of the period 26,303 24,529 26,303 24,529
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2024 2023 2024 2023
GAAP cost of revenues 62,627 55,795 119,057 111,028
Stock-based compensation expenses (134) (48) (265) (228)
Amortization of acquired intangible assets (189) (378)
Excess cost on acquired inventory in business combination (*) - (124)
Non-GAAP cost of revenues 62,304 55,747 118,290 110,800
GAAP gross profit 33,461 30,356 65,529 58,532
Stock-based compensation expenses 134 48 265 228
Amortization of acquired intangible assets 189 378
Excess cost on acquired inventory in business combination (*) - 124
Non-GAAP gross profit 33,784 30,404 66,296 58,760
GAAP Research and development expenses 8,385 7,812 17,232 15,750
Stock-based compensation expenses (184) (232) (336) (478)
Non-GAAP Research and development expenses 8,201 7,580 16,896 15,272
GAAP Sales and marketing expenses 11,508 9,778 22,769 19,974
Stock-based compensation expenses (387) (363) (683) (739)
Amortization of acquired intangible assets (117) (388)
Non-GAAP Sales and marketing expenses 11,004 9,415 21,698 19,235
GAAP General and administrative expenses 2,295 6,218 8,158 11,542
Stock-based compensation expenses (861) (167) (1,186) (535)
Non-GAAP General and administrative expenses 1,434 6,051 6,972 11,007
GAAP Restructuring and related charges - 897 1,416 897
Restructuring and related charges - (897) (1,416) (897)
Non-GAAP Restructuring and related charges -
GAAP Acquisition- and integration-related charges 915 1,377
Acquisition- and integration-related charges (915) (1,377)
Non-GAAP Acquisition- and integration-related charges -
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2024 2023 2024 2023
GAAP Operating income 10,358 5,651 14,577 10,369
Stock-based compensation expenses 1,566 810 2,470 1,980
Amortization of acquired intangible assets 306 - 766
Excess cost on acquired inventory in business combination (*) - 124
Restructuring and other charges 897 1,416 897
Acquisition- and integration-related charges 915 - 1,377
Non-GAAP Operating income 13,145 7,358 20,730 13,246
GAAP Financial expenses and others, net 1,916 1,886 4,777 3,344
Leases - financial income 207 285 319 643
Non-cash revaluation associated with business combination 477 - (196)
Non-GAAP Financial expenses and others, net 2,600 2,171 4,900 3,987
GAAP Tax expenses 609 1,677 1,564 2,969
Non cash tax adjustments (890) (413) (1,743)
Non-GAAP Tax expenses 609 787 1,151 1,226
GAAP Net income 7,833 2,088 8,236 4,056
Stock-based compensation expenses 1,566 810 2,470 1,980
Amortization of acquired intangible assets 306 - 766
Excess cost on acquired inventory in business combination (*) - 124
Restructuring and other charges 897 1,416 897
Acquisition- and integration-related charges 915 - 1,377
Leases - financial income (207) (285) (319) (643)
Non-cash revaluation associated with business combination (477) - 196
Non-cash tax adjustments 890 413 1,743
Non-GAAP Net income 9,936 4,400 14,679 8,033
GAAP basic net income per share 0.09 0.02 0.10 0.05
GAAP diluted net income per share 0.09 0.02 0.09 0.05
Non-GAAP Diluted net income per share (**) 0.11 0.05 0.17 0.09
(*) Consists of charges to cost of revenues for the difference between the fair value of acquired inventory in business
combination, which was recorded at fair value, and the actual cost of this inventory, which impacts the Company's gross
profit.
(**) Weighted average number of shares used in computing diluted net income per share is the same as in GAAP
Logo - https://mma.prnewswire.com/media/1704355/Ceragon_Networks_Ltd_Logo.jpg
View original content:https://www.prnewswire.com/news-releases/ceragon-reports-11-5-increase-in-quarterly-revenue-gaap-eps-of-0-09-per-share-in-the-second-quarter-302216487.html
SOURCE Ceragon Networks Ltd.
