CERAGON NETWORKS REPORTS 2022 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
Ceragon Networks Ltd. (NASDAQ: CRNT) reported Q4 2022 revenues of $75.5 million, down 3.0% year-over-year. Operating income reached $1.7 million on a GAAP basis, with a net loss of $2.7 million, or $(0.03) per diluted share. For FY 2022, revenues increased 1.5% to $295.2 million, but operating income fell to $1.4 million from $4.8 million in 2021. The company saw strong bookings in North America and India, with a 2023 revenue outlook between $325 million and $345 million. Although the gross margin improved to 33.1% non-GAAP in Q4, external factors impacted the revenue shift.
- Strong yearly bookings in North America and India with a book-to-bill well above 1.
- Successful traction in open network solutions and Managed Services.
- Gross margin of 33.1% on a non-GAAP basis for Q4 2022.
- Q4 2022 revenues declined by 3.0% compared to Q4 2021 and 4.1% compared to Q3 2022.
- Operating income decreased to $1.4 million from $4.8 million in FY 2021.
- Net loss for FY 2022 was $7.4 million, compared to $14.8 million in FY 2021.
Q4 2022 Financial Highlights:
- Revenues of
$75.5 million - Operating income of
$1.7 million on a GAAP basis, or$3.2 million on a non-GAAP basis - EPS of
$(0.03) per diluted share on a GAAP basis, or$(0.00) per diluted share on a non-GAAP basis
Full Year 2022 Financial Highlights:
- Revenues of
$295.2 million - Operating income of
$1.4 million on a GAAP basis, or$9.3 million on a non-GAAP basis - EPS of
$(0.09) per diluted share on a GAAP basis, or$(0.01) per diluted share on a non-GAAP basis
Q4 & FY 2022 Business Highlights:
- Strong yearly bookings in North America and India; 2022 annual book-to-bill well above 1
- Increased success in open networks solutions, Managed Services, and new use cases in Q4 and throughout the year
- North America:
- Excellent year in terms of bookings; Q4 softer due to seasonality
- Increased focus and significant traction in the critical infrastructure sector in Q4 - Europe:
- Strong quarter with several key agreements signed
- Open network solution gaining traction - India:
- Strongest region in terms of Q4 and annual revenue
- Ongoing strong demand for our 4G network products and growing demand for our 5G network solutions
ROSH HA'AIN, Israel, Feb. 8, 2023 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today reported its financial results for the fourth quarter and full year ended December 31, 2022.
Doron Arazi, CEO, commented: "I'm pleased to share that we had a very good 2022 in terms of the strength of our business, as reflected in our bookings. The second half of the year showed significant improvement in our revenue levels and profitability thanks to our relentless execution of our Growth Strategy and changing supply chain dynamics, which continue heading in the right direction.
We achieved
We are starting 2023 with a strong backlog and a positive operational momentum."
Primary Fourth Quarter 2022 Financial Results:
Revenues were
Gross profit was
Operating income was
Net loss was
Non-GAAP results were as follows: gross margin
Cash and cash equivalents were
Primary Full Year 2022 Financial Results:
Revenues were
Gross profit was
Operating income was
Net loss was
Non-GAAP results were as follows: Gross margin was
For a reconciliation of GAAP to non-GAAP results, see the tables below.
Revenue breakout by geography:
Q4 2022 | Full Year 2022 | |
India | 29 % | 27 % |
North America | 23 % | 23 % |
Latin America | 17 % | 18 % |
Europe | 13 % | 14 % |
APAC | 11 % | 11 % |
Africa | 7 % | 7 % |
Outlook
We are targeting revenue growth in 2023. We expect yearly revenue to be between
Conference Call
The Company will host a zoom web conference on the same day at 9:00 a.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 400 service providers, as well as more than 800 private network owners, in more than 150 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 continuing impact of the components shortage due to the global shortage in semiconductors, chipsets, components and other commodities, on our supply chain, manufacturing capacity and ability to timely deliver our products, which have caused, and could continue to cause, delays in deliveries of our products and in the deployment of projects by our customers, risk of penalties and orders cancellation created thereby, as well as profit erosion due to constant price increase, payment of expedite fees and costs of inventory pre-ordering and procurement acceleration of such inventory, and the risk of becoming a deadstock if not consumed; the continued effect of the global increase in shipping costs and decrease in shipping slots available to us, our supply chain and customers, which have resulted, and may continue to result in, price erosion, late deliveries and the risk of penalties and orders cancellation due to late deliveries; the impact of the transition to 5G technologies on our revenues if such transition is developed differently than we anticipated; the risks relating to the concentration of a major portion of our business on large mobile operators around the world from which we derive a significant portion of our ordering, that due to their relative effect on the overall ordering coupled with inconsistent ordering pattern and volume of business directed to us, creates high volatility with respect to our financial results and results of operations; the risks associated with our engagement with long term projects, which expose us to our customers' default, insolvency, or other adverse effects on our customers' ability to pay us, including the risk that our collection efforts relating to a significant debt from a single customer will not be successful for the full amount owed or on the anticipated timeframe or at all; the effect of the competition from other wireless transport equipment providers and from other communication solutions that compete with our high-capacity point-to-point wireless products; the risks relating to increased breaches of network or information technology security along with increase in cyber-attack activities, growing cyber-crime threats, and changes in privacy and data protection laws, that could have an adverse effect on our business; the risks relating to the concentration of a significant portion of Ceragon's expected business in certain countries and particularly in India, where a small number of customers are expected to represent a significant portion of our revenues; risks associated with any failure to meet our product development timetable, including delay in the commercialization of our new chipset; imposition of additional sanctions and global trade limitations in connection with Russia's invasion to Ukraine; risks relating to potential uprise or additional outbreak of the COVID-19 pandemic and the effects on the global economy and markets and on us and on the markets in which we operate that are associated therewith; the effects of general economic conditions and trends on the global and local markets in which we operate and such other risks, uncertainties and other factors that could affect our results, as further detailed in Ceragon's most recent Annual Report on Form 20-F and in Ceragon's other filings 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.
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.
Investor & Media Contact:
Maya Lustig
Ceragon Networks
Tel. +972-54-677-8100
mayal@ceragon.com
- Tables Follow -
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(U.S. dollars in thousands, except share and per share data) | ||||||||
(Unaudited) | ||||||||
Three months ended December 31, | Year ended December 31, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Revenues | $ 75,531 | $ 77,760 | $ 295,173 | $ 290,766 | ||||
Cost of revenues | 50,999 | 54,929 | 202,110 | 202,389 | ||||
Gross profit | 24,532 | 22,831 | 93,063 | 88,377 | ||||
Operating expenses: | ||||||||
Research and development, net | 8,080 | 7,795 | 29,690 | 29,473 | ||||
Sales and Marketing | 8,998 | 9,026 | 35,795 | 33,509 | ||||
General and administrative | 5,536 | 4,983 | 22,005 | 20,589 | ||||
Other operating expenses (*) | 249 | - | 4,220 | - | ||||
Total operating expenses | $ 22,863 | $ 21,804 | $ 91,710 | $ 83,571 | ||||
Operating income | 1,669 | 1,027 | 1,353 | 4,806 | ||||
Financial expenses and others, net | 3,012 | 3,397 | 6,306 | 8,625 | ||||
Loss before taxes | (1,343) | (2,370) | (4,953) | (3,819) | ||||
Taxes on income | 1,385 | 9,842 | 2,446 | 11,009 | ||||
Net loss | $ (2,728) | $ (12,212) | $ (14,828) | |||||
Basic and diluted net loss per share |
$ (0.03) |
$ (0.15) |
$ (0.09) |
$ (0.18) | ||||
Weighted average number of shares used in computing |
84,347,548 |
83,916,419 |
84,132,982 |
83,414,831 | ||||
(*) Hostile attempt related costs.
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(U.S. dollars in thousands) | ||||
December 31, 2022 | December 31, 2021 | |||
ASSETS | Unaudited | Audited | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 22,948 | $ 17,079 | ||
Trade receivables, net | 112,324 | 107,826 | ||
Other accounts receivable and prepaid expenses | 15,756 | 17,179 | ||
Inventories | 72,009 | 61,398 | ||
Total current assets | 223,037 | 203,482 | ||
NON-CURRENT ASSETS: | ||||
Trade receivables, net | - | 10,484 | ||
Severance pay and pension fund | 4,633 | 5,648 | ||
Property and equipment, net | 29,456 | 29,383 | ||
Operating lease right-of-use assets | 17,962 | 20,233 | ||
Intangible assets, net | 8,208 | 6,274 | ||
Other non-current assets | 18,312 | 17,059 | ||
Total non-current assets | 78,571 | 89,081 | ||
Total assets | $ 301,608 | $ 292,563 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
CURRENT LIABILITIES: | ||||
Trade payables | $ 67,384 | $ 69,436 | ||
Deferred revenues | 3,343 | 3,384 | ||
Short-term loans | 37,500 | 14,800 | ||
Operating lease liabilities | 3,745 | 4,359 | ||
Other accounts payable and accrued expenses | 20,864 | 23,704 | ||
Total current liabilities | 132,836 | 115,683 | ||
LONG-TERM LIABILITIES: | ||||
Accrued severance pay and pensions | 9,314 | 10,799 | ||
Deferred revenues | 11,545 | 9,275 | ||
Other long-term payables | 2,653 | 2,445 | ||
Operating lease liabilities | 13,187 | 17,210 | ||
Total long-term liabilities | 36,699 | 39,729 | ||
SHAREHOLDERS' EQUITY: | ||||
Share capital: | ||||
Ordinary shares | 224 | 224 | ||
Additional paid-in capital | 432,214 | 428,244 | ||
Treasury shares at cost | (20,091) | (20,091) | ||
Other comprehensive loss | (11,156) | (9,507) | ||
Accumulated deficits | (269,118) | (261,719) | ||
Total shareholders' equity | 132,073 | 137,151 | ||
Total liabilities and shareholders' equity | $ 301,608 | $ 292,563 | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | |||||||
(U.S. dollars, in thousands) | |||||||
(Unaudited) | |||||||
Three months ended December 31, | Year ended December 31, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Cash flow from operating activities: | |||||||
Net loss | $ (2,728) | $ (12,212) | $ (7,399) | $ (14,828) | |||
Adjustments to reconcile net loss to net cash used | |||||||
Depreciation and amortization | 2,622 | 3,458 | 11,040 | 12,246 | |||
Loss from sale of property and equipment, net | - | 9 | 20 | 82 | |||
Share-based compensation expense | 958 | 891 | 3,560 | 2,562 | |||
Increase (decrease) in accrued severance pay and | 245 | (134) | (445) | (418) | |||
Decrease (increase) in trade receivables, net | 3,652 | (8,562) | 6,138 | (11,150) | |||
Decrease (increase) in other accounts receivable and | 1,414 | 744 | (345) | (6,976) | |||
Decrease in operating lease right-of-use assets | 845 | 2,320 | 3,571 | 5,713 | |||
Increase in inventory, net of write off | (7,845) | (8,473) | (11,155) | (11,908) | |||
Decrease in deferred tax asset, net | - | 8,543 | - | 8,279 | |||
Increase (decrease) in trade payables | (5,191) | 6,148 | (2,018) | 5,883 | |||
Decrease in other accounts payable and accrued expenses | (2,190) | (1,370) | (4,154) | (1,556) | |||
Decrease in operating lease liability | (779) | (1,578) | (5,937) | (4,620) | |||
Increase in deferred revenues | 494 | 476 | 2,229 | 1,672 | |||
Net cash used in operating activities | $ (8,503) | $ (9,740) | $ (4,895) | $ (15,019) | |||
Cash flow from investing activities: | |||||||
Purchase of property and equipment | (1,432) | (3,136) | (10,464) | (9,383) | |||
Proceeds from sale of property and equipment | - | - | - | 200 | |||
Purchase of intangible assets | (697) | (192) | (1,957) | (212) | |||
Net cash used in investing activities | $ (2,129) | $ (3,328) | $ (12,421) | $ (9,395) | |||
Cash flow from financing activities: | |||||||
Proceeds from exercise of options | - | 42 | 410 | 4,730 | |||
Proceeds from bank credits and loans, net | 7,600 | 2,900 | 22,700 | 9,800 | |||
Net cash provided by financing activities | $ 7,600 | $ 2,942 | $ 23,110 | $ 14,530 | |||
Translation adjustments on cash and cash equivalents | $ 16 | $ (30) |
$ 75 |
$ (138) | |||
Increase (decrease) in cash and cash equivalents | $ (3,016) | $ (10,156) | $ 5,869 | $ (10,022) | |||
Cash and cash equivalents at the beginning of the period | 25,964 | 27,235 | 17,079 | 27,101 | |||
Cash and cash equivalents at the end of the period | $ 22,948 | $ 17,079 | $ 22,948 | $ 17,079 | |||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS | |||||||||||||
(U.S. dollars in thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Three months ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||
GAAP cost of revenues | $ | 50,999 | $ | 54,929 | $ | 202,110 | $ | 202,389 | |||||
Stock based compensation expenses | (169) | (129) | (587) | (289) | |||||||||
Paycheck protection program | - | - | - | 306 | |||||||||
Changes in indirect tax positions | (279) | 399 | (281) | 394 | |||||||||
Non-GAAP cost of revenues | $ | 50,551 | $ | 55,199 | $ | 201,242 | $ | 202,800 | |||||
GAAP gross profit | $ | 24,532 | $ | 22,831 | $ | 93,063 | $ | 88,377 | |||||
Gross profit adjustments | 448 | (270) | 868 | (411) | |||||||||
Non-GAAP gross profit | $ | 24,980 | $ | 22,561 | $ | 93,931 | $ | 87,966 | |||||
GAAP Research and development expenses | $ | 8,080 | $ | 7,795 | $ | 29,690 | $ | 29,473 | |||||
Stock based compensation expenses | (217) | (50) | (405) | (236) | |||||||||
Non-GAAP Research and development expenses | $ | 7,863 | $ | 7,745 | $ | 29,285 | $ | 29,237 | |||||
GAAP Sales and Marketing expenses | $ | 8,998 | $ | 9,026 | $ | 35,795 | $ | 33,509 | |||||
Stock based compensation expenses | (393) | (345) | (1,355) | (700) | |||||||||
Paycheck protection program | - | - | - | 673 | |||||||||
Non-GAAP Sales and Marketing expenses | $ | 8,605 | $ | 8,681 | $ | 34,440 | $ | 33,482 | |||||
GAAP General and Administrative expenses | $ | 5,536 | $ | 4,983 | $ | 22,005 | $ | 20,589 | |||||
Retired CEO compensation | - | - | 96 | (810) | |||||||||
Stock based compensation expenses | (179) | (367) | (1,213) | (1,337) | |||||||||
Non-GAAP General and Administrative expenses | $ | 5,357 | $ | 4,616 | $ | 20,888 | $ | 18,442 | |||||
GAAP Other operating expenses | $ | 249 | $ | - | $ | 4,220 | $ | - | |||||
Hostile attempt related costs | (249) | - | (4,220) | - | |||||||||
Non-GAAP Other operating expenses | $ | - | $ | - | $ | - | $ | - | |||||
GAAP operating income | $ | 1,669 | $ | 1,027 | $ | 1,353 | $ | 4,806 | |||||
Stock based compensation expenses | 958 | 891 | 3,560 | 2,562 | |||||||||
Changes in indirect tax positions | 279 | (399) | 281 | (394) | |||||||||
Retired CEO compensation | - | - | (96) | 810 | |||||||||
Paycheck protection program | - | - | - | (979) | |||||||||
Hostile attempt related costs | 249 | - | 4,220 | - | |||||||||
Non-GAAP operating income | $ | 3,155 | $ | 1,519 | $ | 9,318 | $ | 6,805 | |||||
GAAP financial expenses and others, net | $ | 3,012 | $ | 3,397 | $ | 6,306 | $ | 8,625 | |||||
Leases – financial income (expenses) | (154) | (706) | 2,278 | (1,057) | |||||||||
Non-GAAP financial expenses and others, net | $ | 2,858 | $ | 2,691 | $ | 8,584 | $ | 7,568 | |||||
GAAP Tax expenses | $ | 1,385 | $ | 9,842 | $ | 2,446 | $ | 11,009 | |||||
Non cash tax adjustments | (851) | (8,987) | (1,278) | (9,039) | |||||||||
Non-GAAP Tax expenses | $ | 534 | $ | 855 | $ | 1,168 | $ | 1,970 | |||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS | ||||||||||||||||||||||
(U.S. dollars in thousands, except share and per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
GAAP net loss | $ | (2,728) | $ | (12,212) | $ | (7,399) | $ | (14,828) | ||||||||||||||
Stock based compensation expenses | 958 | 891 | 3,560 | 2,562 | ||||||||||||||||||
Changes in indirect tax positions | 279 | (399) | 281 | (394) | ||||||||||||||||||
Leases – financial expenses (income) | 154 | 706 | (2,278) | 1,057 | ||||||||||||||||||
Paycheck protection program | - | - | (96) | (979) | ||||||||||||||||||
Retired CEO compensation | - | - | - | 810 | ||||||||||||||||||
Hostile attempt related Costs | 249 | - | 4,220 | - | ||||||||||||||||||
Non-cash tax adjustments | 851 | 8,987 | 1,278 | 9,039 | ||||||||||||||||||
Non-GAAP net loss | $ | (237) | $ | (2,027) | $ | (434) | $ | (2,733) | ||||||||||||||
GAAP basic and diluted net loss per share | $ | (0.03) | $ | (0.15) | $ | (0.09) | $ | (0.18) | ||||||||||||||
Non-GAAP diluted net loss per share | $ | (0.00) | $ | (0.02) | $ | (0.01) | $ | (0.03) | ||||||||||||||
Weighted average number of shares used in computing GAAP | 84,347,548 | 83,916,419 | 84,132,982 | 83,414,831 | ||||||||||||||||||
Weighted average number of shares used in computing Non-GAAP | 84,347,548 | 83,916,419 | 84,132,982 | 83,414,831 | ||||||||||||||||||
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SOURCE Ceragon Networks Ltd.
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