Ceragon reports 11% growth in third quarter of 2023

Rosh Ha’ain, Israel – Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today reported its financial results for the third quarter and nine months ended September 30, 2023.

Q3 2023 Financial Highlights:

• Revenues of $87.3 million, up 10.9% year-over-year
• Operating income of $6.7 million on a GAAP basis, or $8.0 million on a non-GAAP basis
• EPS of $0.04 per diluted share on a GAAP basis, or $0.06 per diluted share on a non-GAAP basis

Q3 2023 Business Highlights:

• Announced the definitive agreement to acquire Siklu to expand presence in North America, increasing market share in mmW and augmenting Ceragon’s offering with Fixed Wireless Access
• North America:
  • Record bookings, supported by continued strength in 5G rollout and expanded presence with private network customers
  • Third consecutive quarter of revenues exceeding $20 million
• India:
  • Strongest region in terms of revenue, with record quarterly revenue since Q2 2018 

Doron Arazi, CEO, commented: “Ceragon continues to expand its addressable market and diversify its customer base, bolstering our already durable competitive position as a leader in one of the growing parts of the telecommunications sector. Continued strong demand in India and North America drove our growth, and we are successfully broadening our position with private networks and smaller Communication Service Providers, adding 20 new customers in this segment since the beginning of the year, to expand our revenue opportunity and further diversify our customer portfolio. The pending acquisition of Siklu is expected to accelerate this trend, adding incremental revenue with key growth customers.”

“While the Siklu acquisition has not closed yet, Ceragon and Siklu teams are already working on integration plans, and our expectation both in terms of timing and for operational and financial synergies has not changed,” added Mr. Arazi. “We continue to view this pending acquisition as strategic, strengthening our end-to-end offering, expanding our position in key growth areas and enabling significant cross-selling opportunities.”

“With our improved collections, we generated more than $10 million from operations and investing activities during the quarter, giving us increased confidence that we can integrate and accelerate Siklu, invest in product development, and strengthen our balance sheet,” continued Mr. Arazi. “We expect a continued growth year over year in revenue and profitability in the fourth quarter, capping off a strong year for Ceragon and giving us significant momentum as we enter 2024.”

Primary Third Quarter 2023 Financial Results:

Revenues were $87.3 million, up 10.9% from $78.6 million in Q3 2022 and 1.3% compared to $86.2 million in Q2 2023.

Gross profit was $30.3 million, giving us a gross margin of 34.7%, compared with a gross margin of 35.3% in Q3 2022 and 35.2% in Q2 2023.

Operating income was $6.7 million compared with $1.3 million for Q3 2022 and $5.7 million for Q2 2023.

Net income (loss) was $3.4 million, or $0.04 per diluted share, compared with $(0.9) million, or $(0.01) per diluted share for Q3 2022 and $2.1 million, or $0.02 per diluted share for Q2 2023.

Non-GAAP results were as follows: Gross margin was 34.9%, operating profit was $8.0 million, and net income was $5.0 million, or $0.06 per diluted share.

Cash and cash equivalents were $34.0 million at September 30, 2023, compared to $24.5 million at June 30, 2023.

For a reconciliation of GAAP to non-GAAP results, see the attached tables.

Revenue Breakout by Geography:

Outlook

Ceragon management narrowed the range and raised the midpoint of its full-year revenue guidance to $338 million to $346 million, up from prior guidance of $334-$348 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.