Ceragon Anticipates Reaching the High-End of 2023 Revenue Guidance, Expects Double-Digit Growth and Targets Margin Expansion in 2024

Rhea-AI Summary

Ceragon Networks Ltd. expects full-year 2024 revenue of $385-405 million and targets operating margins of at least 10% at revenue midpoint. The company moves long-range target for $500 million in annual revenue forward by 12 months to 2026. The CEO expects continued double-digit growth, reflecting expansion of the addressable market and further penetration into the private network ecosystem in 2024. The integration of Siklu is well underway, and the company expects to reach the long-term revenue target a year earlier than expected, with solid margin expansion and continued profitability.

Positive

• Expected revenue growth of approximately 14% compared to 2023 levels
• Positive free cash flow for 2023, excluding the impact of the acquisition of Siklu
• Integration of Siklu expected to bolster competitive position in the private network ecosystem

Negative

• None.

Insights

Financial Analyst

The guidance provided by Ceragon Networks Ltd. indicating an expected revenue growth to $385-405 million in 2024, with a targeted non-GAAP operating margin of at least 10%, suggests a positive trajectory for the company. The anticipated growth rate of approximately 14% at the midpoint compared to expected 2023 levels is a robust indicator, especially in the context of the technology sector where competition is fierce and continuous innovation is required. The acquisition of Siklu is likely to have been a strategic move to enhance Ceragon's market position in the private network sector, particularly in North America, which could lead to increased market share and revenue diversification.

Investors should note that achieving positive free cash flow, excluding the acquisition impacts, is a strong signal of operational efficiency and financial health. The forward movement of the $500 million annual revenue target to 2026 further reflects management's confidence in the company's growth strategy. However, it is important to scrutinize the audited financial results once released, to confirm the preliminary figures and assess the actual performance against the guidance.

Market Research Analyst

The wireless transport industry is critical for the deployment of 5G networks and Ceragon's focus on this sector positions the company well to capitalize on the ongoing global 5G rollout. The integration of Siklu, which specializes in millimeter wave technology, suggests a strategic move to strengthen Ceragon's product offerings in high-bandwidth solutions that are essential for 5G backhaul. This is particularly relevant as demand for high-speed connectivity and private networks is expected to grow, driven by industries such as autonomous vehicles, IoT and smart cities.

Given the company's emphasis on expanding its addressable market and penetration into private networks, stakeholders could anticipate a broader customer base and a stronger foothold in the industry. The positive outlook on North American market penetration is significant, considering the size and technological advancement of the region. However, careful monitoring of market trends and competitor activities remains crucial to ensure the company's strategic moves align with industry dynamics.

Economist

The projected operating margins and revenue growth for Ceragon Networks Ltd. reflect broader economic trends, such as the investment in infrastructure to support 5G technology and the increased need for wireless solutions. The company's financial targets suggest a favorable economic environment for technology providers, but they also depend on macroeconomic stability, including factors such as trade policies, regulatory changes and capital expenditure cycles in the telecommunications industry.

While the guidance is optimistic, it is essential to consider external economic risks, such as potential supply chain disruptions or shifts in technology policy, which could impact the company's ability to meet its targets. The accelerated revenue goal indicates management's anticipation of continued economic support for the sector, but maintaining agility in business operations will be key to adapting to any unforeseen economic shifts.

Management Expects Full-Year 2024 Revenue of $385-405 Million and Targets Operating Margins of At Least 10% at Revenue Midpoint

Moves Long-Range Target for $500 Million in Annual Revenue Forward by 12 Months to 2026

ROSH HA'AIN, Israel, Jan. 17, 2024 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today confirmed its expectations for the 2023, and provided its guidance for 2024.

 

 

Based on preliminary and unaudited results, management expects to deliver revenue for the full year 2023 at the high end of its previously disclosed range of $338 million to $346 million. Management also expects positive free cash flow, excluding the impact of the acquisition of Siklu.  

For 2024, management expects:

• Revenue of $385 million to $405 million, representing growth at the midpoint of approximately 14% compared to expected 2023 levels. 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 as compared with 2023.

"We expect continued double-digit growth, reflecting expansion of our addressable market and further penetration into the private network ecosystem, in 2024," commented Doron Arazi, Ceragon CEO. "The integration of Siklu is well underway, and we expect the strategic benefits of this acquisition to bolster our competitive position with the higher growing portions of our addressable market, especially private network operators in general and in North America in particular. We now expect to reach our long-term target of $500 million in annual revenue in 2026, a year earlier than we previously expected, with solid margin expansion and continued profitability."

Doron Arazi, Chief Executive Officer will discuss this outlook later today at a presentation at the Needham Growth Conference. The live presentation will take place at 10:15 a.m. ET and will be webcast on Ceragon's website at https://www.ceragon.com/investors/webcasts. An archived webcast will remain posted on the Company's investor relations website for at least 30 days.

Ceragon is expected to report its audited fourth quarter and full-year 2023 financial results in mid-February.

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 the benefits of the transaction as well as statements regarding the companies' products, prospects and results following the transaction. 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" and similar expressions, or the negative of such terms, or other comparable terminology (although not all forward-looking statements contain these identifying words that are intended to identify forward-looking statements).

Although we believe that the expectations 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 the actual results, performance or achievements of both Ceragon and Siklu to be materially different from any 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, including in Gaza with the Hamas and in Lebanon with the Hezbollah; potential adverse reactions or changes to business relationships resulting from the completion of the transaction with Siklu, and ongoing or potential litigations or disputes, incidental to the conduct of Siklu's business and other risks related to the integration of Siklu's business into Ceragon business; 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, and in Ceragon's other filings with the Securities and Exchange Commission 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.

Ceragon's public filings are available on the SEC's website at www.sec.gov and may also be obtained from Ceragon's website at www.ceragon.com.

Investor & Media Contact:
Rob Fink or Bob Meyers

FNK IR
Tel. 1+646-809-4048
crnt@fnkir.com

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SOURCE Ceragon Networks Ltd.

FAQ

What is Ceragon Networks Ltd.'s revenue expectation for full-year 2024?

Ceragon Networks Ltd. expects revenue of $385-405 million for full-year 2024.

What are the targeted operating margins for Ceragon Networks Ltd. in 2024?

Ceragon Networks Ltd. targets operating margins of at least 10% at the revenue midpoint in 2024.

What is the long-range target for annual revenue for Ceragon Networks Ltd.?

Ceragon Networks Ltd. moves its long-range target for $500 million in annual revenue forward by 12 months to 2026.

What is the CEO's outlook for 2024?

The CEO expects continued double-digit growth, reflecting expansion of the addressable market and further penetration into the private network ecosystem in 2024.

What is the expected impact of the Siklu acquisition on Ceragon Networks Ltd.?

The integration of Siklu is expected to bolster the company's competitive position with the higher growing portions of the addressable market, especially private network operators in general and in North America in particular.