Ceragon Networks(CRNT) - 2025 Q2 - Quarterly Report

Ceragon Reports 2025 Second Quarter Financial Results Q2 2025 Financial Highlights Ceragon achieved non-GAAP profitability and positive free cash flow in Q2 2025, reporting $82.3 million revenue and a $1.3 million GAAP net loss despite a challenging environment Q2 2025 Key Financial Results (GAAP) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 82.3 | 96.1 | -14.4% | | Gross Profit | 28.4 | 33.5 | -15.1% | | Gross Margin | 34.6% | 34.8% | -0.2 pp | | Operating Income | 2.2 | 10.4 | -78.8% | | Net Income (Loss) | (1.3) | 7.8 | -116.7% | | Diluted EPS | (0.01) | 0.09 | -111.1% | Q2 2025 Key Financial Results (Non-GAAP) | Metric | Q2 2025 (million USD) | | :--- | :--- | | Gross Margin | 35.2% | | Operating Profit | 4.7 | | Net Income | 2.5 | | Diluted EPS | 0.03 | - Cash and cash equivalents totaled $29.2 million as of June 30, 2025, down from $35.3 million on December 31, 2024[8] Q2 2025 Business Highlights Ceragon enhanced competitive advantage and market opportunities in Q2 2025, securing a new Tier-1 mobile network operator as a preferred vendor - CEO Doron Arazi noted the company's business resilience and agility in Q2, achieving non-GAAP profitability, cash generation, debt reduction, and strategic roadmap advancement despite rapid changes in the Indian market[3] - North American market showed strong momentum with orders and revenue growing sequentially for the third consecutive quarter, exceeding $20 million and reaching a new high since Q2 2024[10] - Secured 'preferred vendor' status with a new Tier-1 mobile network operator in North America for a project utilizing innovative Siklu-based solutions[10] - Recent acquisitions continue to generate incremental opportunities and expand capabilities in private networks and CSP markets[10] Revenue Breakout by Geography In Q2 2025, North America and India were Ceragon's largest revenue contributors, accounting for 33% and 30% of total revenue, respectively Q2 2025 Revenue Distribution by Geography | Region | Share (%) | | :--- | :--- | | North America | 33% | | India | 30% | | EMEA | 17% | | Latin America | 10% | | Asia Pacific | 10% | Outlook Ceragon anticipates H2 2025 revenue to be largely consistent with H1, expecting non-GAAP profit and positive cash flow, while laying groundwork for 2026 growth - H2 2025 revenue is expected to be largely consistent with H1[18] - Non-GAAP profit and positive cash flow are anticipated at this revenue level in H2 2025[18] - Momentum in field engagements, customer trials, and new opportunities, alongside a rebound in stalled and delayed projects in India, is building a foundation for re-growth in 2026[18] - Current visibility, particularly in India, is impacting the company's ability to reaffirm previous guidance[12] About Ceragon Ceragon is a global innovator and leading provider of end-to-end wireless connectivity solutions, specializing in transmission, access, and AI-driven managed services - Core business as a global innovator and leading provider of end-to-end wireless connectivity solutions, focusing on transmission, access, and AI-driven managed and professional services[14] - Customer base includes service providers, utilities, public safety organizations, government agencies, and energy companies[15] - Solutions deployed in over 130 countries for more than 600 service providers and 1,600 private network owners[15] - Value proposition is to enhance operational efficiency and enrich end-user experiences through innovative end-to-end solutions (hardware, software, managed, and professional services), aiming to reduce Total Cost of Ownership (TCO) by minimizing spectrum, power, real estate, and labor resources[14][16] Safe Harbor Statement This press release contains forward-looking statements under safe harbor provisions, based on management's current beliefs and expectations, subject to various risks and uncertainties - This press release contains 'forward-looking statements' within the meaning of the safe harbor provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995[19] - These forward-looking statements are based on Ceragon management's current beliefs, expectations, and assumptions regarding the company's business, financial condition, results of operations, micro and macro market trends, and other related matters[19] - Forward-looking statements involve known and unknown risks and uncertainties that could cause Ceragon's future results or performance to differ materially from expectations, including but not limited to the realization of company forecasts, market developments, global economic trends, the war situation in Israel, 5G transition delays, customer concentration, revenue volatility, tax disputes, and supply chain issues[20] - Investors are cautioned not to place undue reliance on forward-looking statements, and Ceragon undertakes no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release, unless required by law[21][22] - The results reported in this press release are preliminary and unaudited, and investors should be aware of potential differences between these results and the audited results to be reported[23] Condensed Consolidated Statements of Operations Ceragon's Q2 2025 condensed consolidated statements of operations show year-over-year declines in revenue and gross profit, leading to significantly reduced operating and net income Condensed Consolidated Statements of Operations for the Three Months Ended June 30 (thousand USD) | Metric | 2025 (thousand USD) | 2024 (thousand USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 82,262 | 96,088 | -14.4% | | Cost of Sales | 53,822 | 62,627 | -14.1% | | Gross Profit | 28,440 | 33,461 | -15.0% | | Research and Development Expenses, Net | 7,332 | 8,385 | -12.6% | | Selling and Marketing | 11,722 | 11,508 | +1.9% | | General and Administrative | 6,940 | 2,295 | +202.4% | | Operating Income | 2,217 | 10,358 | -78.6% | | Net Income (Loss) | (1,267) | 7,833 | -116.2% | | Diluted EPS | (0.01) | 0.09 | -111.1% | Condensed Consolidated Statements of Operations for the Six Months Ended June 30 (thousand USD) | Metric | 2025 (thousand USD) | 2024 (thousand USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 170,914 | 184,586 | -7.4% | | Cost of Sales | 113,375 | 119,057 | -4.8% | | Gross Profit | 57,539 | 65,529 | -12.2% | | Research and Development Expenses, Net | 15,581 | 17,232 | -9.6% | | Selling and Marketing | 24,019 | 22,769 | +5.5% | | General and Administrative | 12,376 | 8,158 | +51.7% | | Restructuring and Other Expenses | 3,732 | 1,416 | +163.6% | | Operating Income | 1,127 | 14,577 | -92.3% | | Net Income (Loss) | (2,247) | 8,236 | -127.3% | | Diluted EPS | (0.03) | 0.09 | -133.3% | Condensed Consolidated Balance Sheets As of June 30, 2025, Ceragon's total assets decreased to $328.4 million from $345.0 million at December 31, 2024, primarily due to lower cash and accounts receivable Condensed Consolidated Balance Sheets (thousand USD) | Metric | June 30, 2025 (thousand USD) | December 31, 2024 (thousand USD) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 29,216 | 35,311 | -17.2% | | Accounts Receivable, Net | 124,051 | 149,619 | -17.1% | | Inventories | 59,944 | 59,693 | +0.4% | | Total Current Assets | 234,205 | 261,038 | -10.3% | | Total Non-Current Assets | 94,180 | 83,958 | +12.2% | | Total Assets | 328,385 | 344,996 | -4.9% | | Accounts Payable | 73,759 | 91,157 | -19.1% | | Short-term Loans | 20,500 | 25,200 | -18.6% | | Total Current Liabilities | 125,865 | 151,448 | -16.9% | | Total Non-Current Liabilities | 30,743 | 27,223 | +12.9% | | Total Shareholders' Equity | 171,777 | 166,325 | +3.3% | Condensed Consolidated Statements of Cash Flow For the three months ended June 30, 2025, Ceragon generated $10.8 million in net cash from operating activities, leading to a $1.5 million net increase in cash for the quarter Condensed Consolidated Statements of Cash Flow for the Three Months Ended June 30 (thousand USD) | Metric | 2025 (thousand USD) | 2024 (thousand USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 10,762 | 4,822 | +123.2% | | Net Cash from Investing Activities | (5,130) | (8,944) | -42.6% | | Net Cash from Financing Activities | (4,557) | (1,766) | +158.0% | | Net Change in Cash and Cash Equivalents | 1,528 | (2,480) | -161.6% | | Cash and Cash Equivalents at Period End | 29,216 | 26,303 | +11.1% | Condensed Consolidated Statements of Cash Flow for the Six Months Ended June 30 (thousand USD) | Metric | 2025 (thousand USD) | 2024 (thousand USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 13,372 | 11,349 | +17.8% | | Net Cash from Investing Activities | (15,707) | (8,944) | +75.6% | | Net Cash from Financing Activities | (4,049) | (3,608) | +12.2% | | Net Change in Cash and Cash Equivalents | (6,095) | (1,934) | +215.1% | | Cash and Cash Equivalents at Period End | 29,216 | 26,303 | +11.1% | Reconciliation of GAAP to Non-GAAP Financial Results This section details the reconciliation of Ceragon's GAAP to non-GAAP financial measures for Q2 2025 and 2024, highlighting key adjustments impacting profitability Reconciliation of GAAP to Non-GAAP Operating Income for the Three Months Ended June 30 (thousand USD) | Metric | GAAP Operating Income | Share-based Compensation Expense | Amortization of Acquired Intangible Assets | Acquisition and Integration Related Expenses | Non-GAAP Operating Income | | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | 2,217 | 1,549 | 726 | 229 | 4,721 | | 2024 | 10,358 | 1,566 | 306 | 915 | 13,145 | Reconciliation of GAAP to Non-GAAP Operating Income for the Six Months Ended June 30 (thousand USD) | Metric | GAAP Operating Income | Share-based Compensation Expense | Amortization of Acquired Intangible Assets | Restructuring and Other Expenses | Acquisition and Integration Related Expenses | Non-GAAP Operating Income | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | 1,127 | 2,199 | 1,453 | 3,732 | 704 | 9,215 | | 2024 | 14,577 | 2,470 | 766 | 1,416 | 1,377 | 20,730 | Reconciliation of GAAP to Non-GAAP Net Income for the Three Months Ended June 30 (thousand USD) | Metric | GAAP Net Income (Loss) | Share-based Compensation Expense | Amortization of Acquired Intangible Assets | Acquisition and Integration Related Expenses | Lease - Finance Expense (Income) | Non-cash Revaluation | Non-GAAP Net Income | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | (1,267) | 1,549 | 726 | 229 | 1,233 | (16) | 2,454 | | 2024 | 7,833 | 1,566 | 306 | 915 | (207) | (477) | 9,936 | Reconciliation of GAAP to Non-GAAP Net Income for the Six Months Ended June 30 (thousand USD) | Metric | GAAP Net Income (Loss) | Share-based Compensation Expense | Amortization of Acquired Intangible Assets | Restructuring and Other Expenses | Acquisition and Integration Related Expenses | Lease - Finance Expense (Income) | Non-cash Revaluation | Non-cash Tax Adjustments | Non-GAAP Net Income | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | (2,247) | 2,199 | 1,453 | 3,732 | 704 | 1,138 | (1,948) | - | 5,031 | | 2024 | 8,236 | 2,470 | 766 | 1,416 | 1,377 | (319) | 196 | 413 | 14,679 | Investor & Media Contact This section provides contact details for Ceragon's investor and media relations for further communication and inquiries - Contact: Rob Fink, FNK IR[24] - Phone: +1-646-809-4048[24] - Email: crnt@fnkir.com[24]