CERAGON NETWORKS LTD.
(Translation of registrant’s name into English)
|
3 Uri Ariav st., Rosh Ha’Ayin, Israel, 4810002
(Address of principal executive offices)
|
|
CERAGON NETWORKS LTD.
|
Date: February 20, 2024
|
By: /s/ Ronen Stein
|
|
Name: Ronen Stein
Title: Chief Financial Officer |
Exhibit
|
Description |
• |
Revenues of $90.4 million, up 20% year-over-year
|
• |
Siklu acquisition, which closed on December 4, 2023, contributed modestly to quarterly revenue, in-line with expectations
|
• |
Operating income of $4.2 million on a GAAP basis, or $7.8 million on a non-GAAP basis
|
• |
Net loss of $(1.2) million on a GAAP basis, and net income of $3.7 million on a non-GAAP basis
|
• |
EPS of $(0.01) per diluted share on a GAAP basis, or $0.04 per diluted share on a non-GAAP basis
|
• |
Revenues of $347.2 million, up 18% year-over-year, exceeding full-year guidance
|
• |
Ceragon would have achieved the higher-end of its full-year revenue guidance even without contribution from Siklu
|
• |
Operating income of $21.2 million on a GAAP basis, or a record $29.0 million on a non-GAAP basis
|
• |
Net income of $6.2 million on a GAAP basis, and $16.7 million on a non-GAAP basis
|
• |
EPS of $0.07 per diluted share on a GAAP basis, or $0.20 per diluted share on a non-GAAP basis
|
• |
Completed the acquisition of Siklu, expanding presence in North America and augmenting Ceragon’s offering in the Fixed Wireless Access market
|
• |
North America:
|
• |
India:
|
- |
Continued strong bookings, including initial orders from the approximately $150 million project from global integrator, in support of a network modernization project for a Tier 1 Operator
|
- |
Strongest region in terms of revenue, with record quarterly revenue since Q2 2018
|
Q4 2023
|
|
India
|
34%
|
North America
|
27%
|
Latin America
|
13%
|
Europe
|
11%
|
Africa
|
8%
|
APAC
|
7%
|
• |
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.
|
Three months ended
December 31,
|
Year ended
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenues
|
$
|
90,359
|
$
|
75,531
|
$
|
347,179
|
$
|
295,173
|
||||||||
Cost of revenues
|
59,296
|
50,999
|
227,310
|
202,110
|
||||||||||||
Gross profit
|
31,063
|
24,532
|
119,869
|
93,063
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
9,070
|
8,080
|
32,274
|
29,690
|
||||||||||||
Sales and Marketing
|
10,544
|
8,998
|
40,577
|
35,795
|
||||||||||||
General and administrative
|
6,445
|
17,826
|
23,793
|
34,295
|
||||||||||||
Restructuring and related charges
|
-
|
-
|
897
|
-
|
||||||||||||
Acquisition and integration-related charges
|
835
|
-
|
1,118
|
-
|
||||||||||||
Other operating expenses (*)
|
-
|
249
|
-
|
4,220
|
||||||||||||
Total operating expenses
|
26,894
|
35,153
|
98,659
|
104,000
|
||||||||||||
Operating income (loss)
|
4,169
|
(10,621
|
)
|
21,210
|
(10,937
|
)
|
||||||||||
Financial expenses and others, net
|
3,402
|
3,012
|
8,468
|
6,306
|
||||||||||||
Income (loss) before taxes
|
767
|
(13,633
|
)
|
12,742
|
(17,243
|
)
|
||||||||||
Taxes on income
|
1,970
|
1,385
|
6,522
|
2,446
|
||||||||||||
Net income (loss)
|
$
|
(1,203
|
)
|
$
|
(15,018
|
)
|
$
|
6,220
|
$
|
(19,689
|
)
|
|||||
Basic net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
(0.18
|
)
|
$
|
0.07
|
$
|
(0.23
|
)
|
|||||
Weighted average number of shares used in computing basic net income (loss) per share
|
85,054,173
|
84,347,548
|
84,617,774
|
84,132,982
|
||||||||||||
Diluted net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
(0.18
|
)
|
$
|
0.07
|
$
|
(0.23
|
)
|
|||||
Weighted average number of shares used in computing diluted net income (loss) per share
|
85,054,173
|
84,347,548
|
85,482,626
|
84,132,982
|
December 31,
2023
|
December 31,
2022
|
|||||||
ASSETS
|
Unaudited
|
Audited
|
||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
28,237
|
$
|
22,948
|
||||
Trade receivables, net
|
104,321
|
100,034
|
||||||
Other accounts receivable and prepaid expenses
|
16,571
|
15,756
|
||||||
Inventories
|
68,811
|
72,009
|
||||||
Total current assets
|
217,940
|
210,747
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Severance pay and pension fund
|
4,985
|
4,633
|
||||||
Property and equipment, net
|
30,659
|
29,456
|
||||||
Operating lease right-of-use assets
|
18,837
|
17,962
|
||||||
Intangible assets, net
|
16,401
|
8,208
|
||||||
Goodwill
|
7,749
|
-
|
||||||
Other non-current assets
|
1,954
|
18,312
|
||||||
Total non-current assets
|
80,585
|
78,571
|
||||||
Total assets
|
$
|
298,525
|
$
|
289,318
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Trade payables
|
67,032
|
67,384
|
||||||
Deferred revenues
|
5,507
|
3,343
|
||||||
Short-term loans
|
32,600
|
37,500
|
||||||
Operating lease liabilities
|
3,889
|
3,745
|
||||||
Other accounts payable and accrued expenses
|
23,925
|
20,864
|
||||||
Total current liabilities
|
132,953
|
132,836
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Accrued severance pay and pension
|
9,399
|
9,314
|
||||||
Deferred revenues
|
670
|
11,545
|
||||||
Other long-term payables
|
7,768
|
2,653
|
||||||
Operating lease liabilities
|
13,716
|
13,187
|
||||||
Total long-term liabilities
|
31,553
|
36,699
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital:
|
||||||||
Ordinary shares
|
222
|
224
|
||||||
Additional paid-in capital
|
437,161
|
432,214
|
||||||
Treasury shares at cost
|
(20,091
|
)
|
(20,091
|
)
|
||||
Other comprehensive loss
|
(8,085
|
)
|
(11,156
|
)
|
||||
Accumulated deficit
|
(275,188
|
)
|
(281,408
|
)
|
||||
Total shareholders' equity
|
134,019
|
119,783
|
||||||
Total liabilities and shareholders' equity
|
$
|
298,525
|
$
|
289,318
|
Three months ended
December 31,
|
Year ended
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Cash flow from operating activities:
|
||||||||||||||||
Net income (loss)
|
$
|
(1,203
|
)
|
$
|
(15,018
|
)
|
$
|
6,220
|
$
|
(19,689
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||||||
Depreciation and amortization
|
2,466
|
2,622
|
9,967
|
11,040
|
||||||||||||
Loss from sale of property and equipment, net
|
-
|
-
|
61
|
20
|
||||||||||||
Stock-based compensation expense
|
938
|
958
|
3,964
|
3,560
|
||||||||||||
Increase (decrease) in accrued severance pay and pensions, net
|
88
|
245
|
(267
|
)
|
(445
|
)
|
||||||||||
Decrease (increase) in trade receivables, net
|
1,856
|
15,942
|
(2,370
|
)
|
18,428
|
|||||||||||
Decrease (increase) in other accounts receivable and prepaid expenses (including other long term assets)
|
15,085
|
1,414
|
16,994
|
(345
|
)
|
|||||||||||
Decrease (increase) in inventory
|
4,681
|
(7,845
|
)
|
6,303
|
(11,155
|
)
|
||||||||||
Decrease in operating lease right-of-use assets
|
794
|
845
|
3,781
|
3,571
|
||||||||||||
Inecrease in trade payables
|
(1,121
|
)
|
(5,191
|
)
|
(1,847
|
)
|
(2,018
|
)
|
||||||||
Increase (decrease) in other accounts payable and accrued expenses (including other long term liabilities)
|
(2,720
|
)
|
(2,190
|
)
|
1,677
|
(4,154
|
)
|
|||||||||
Decrease in operating lease liability
|
(73
|
)
|
(779
|
)
|
(4,034
|
)
|
(5,937
|
)
|
||||||||
Increase (decrease) in deferred revenues
|
(9,830
|
)
|
494
|
(9,562
|
)
|
2,229
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
10,961
|
$
|
(8,503
|
)
|
$
|
30,887
|
$
|
(4,895
|
)
|
||||||
Cash flow from investing activities:
|
||||||||||||||||
Purchases of property and equipment, net
|
(2,548
|
)
|
(1,432
|
)
|
(9,955
|
)
|
(10,464
|
)
|
||||||||
Purchases of intangible assets
|
(661
|
)
|
(697
|
)
|
(2,944
|
)
|
(1,957
|
)
|
||||||||
Payments made in connection with business acquisitions, net of acquired cash
|
(7,971
|
)
|
-
|
(7,971
|
)
|
-
|
||||||||||
Net cash used in investing activities
|
$
|
(11,180
|
)
|
$
|
(2,129
|
)
|
$
|
(20,870
|
)
|
$
|
(12,421
|
)
|
||||
Cash flow from financing activities:
|
||||||||||||||||
Proceeds from exercise of options
|
9
|
-
|
39
|
410
|
||||||||||||
Proceeds from (repayments of) bank credits and loans, net
|
(5,600
|
)
|
7,600
|
(4,900
|
)
|
22,700
|
||||||||||
Net cash provided by (used in) financing activities
|
$
|
(5,591
|
)
|
$
|
7,600
|
$
|
(4,861
|
)
|
$
|
23,110
|
||||||
Translation adjustments on cash and cash equivalents
|
$
|
81
|
$
|
16
|
$
|
133
|
$
|
75
|
||||||||
Increase (decrease) in cash and cash equivalents
|
$
|
(5,729
|
)
|
$
|
(3,016
|
)
|
$
|
5,289
|
$
|
5,869
|
||||||
Cash and cash equivalents at the beginning of the period
|
33,966
|
25,964
|
22,948
|
17,079
|
||||||||||||
Cash and cash equivalents at the end of the period
|
$
|
28,237
|
$
|
22,948
|
$
|
28,237
|
$
|
22,948
|
Three months ended
|
Year ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
GAAP cost of revenues
|
$
|
59,296
|
$
|
50,999
|
$
|
227,310
|
$
|
202,110
|
||||||||
Stock-based compensation expenses
|
(115
|
)
|
(169
|
)
|
(482
|
)
|
(587
|
)
|
||||||||
Changes in indirect tax positions
|
-
|
(279
|
)
|
(3
|
)
|
(281
|
)
|
|||||||||
Amortization of acquired intangible assets
|
(57
|
)
|
-
|
(57
|
)
|
-
|
||||||||||
Excess cost on acquired inventory in business combination*
|
(525
|
)
|
-
|
(525
|
)
|
-
|
||||||||||
Non-GAAP cost of revenues
|
$
|
58,599
|
$
|
50,551
|
$
|
226,243
|
$
|
201,242
|
||||||||
GAAP gross profit
|
$
|
31,063
|
$
|
24,532
|
$
|
119,869
|
$
|
93,063
|
||||||||
Stock-based compensation expenses
|
115
|
169
|
482
|
587
|
||||||||||||
Changes in indirect tax positions
|
-
|
279
|
3
|
281
|
||||||||||||
Amortization of acquired intangible assets
|
57
|
-
|
57
|
-
|
||||||||||||
Excess cost on acquired inventory in business combination*
|
525
|
-
|
525
|
-
|
||||||||||||
Non-GAAP gross profit
|
$
|
31,760
|
$
|
24,980
|
$
|
120,936
|
$
|
93,931
|
||||||||
GAAP Research and development expenses
|
$
|
9,070
|
$
|
8,080
|
$
|
32,274
|
$
|
29,690
|
||||||||
Stock-based compensation expenses
|
(156
|
)
|
(217
|
)
|
(828
|
)
|
(405
|
)
|
||||||||
Loss from termination of joint development agreement
|
(1,199
|
)
|
-
|
(1,199
|
)
|
-
|
||||||||||
Non-GAAP Research and development expenses
|
$
|
7,715
|
$
|
7,863
|
$
|
30,247
|
$
|
29,285
|
||||||||
GAAP Sales and Marketing expenses
|
$
|
10,544
|
$
|
8,998
|
$
|
40,577
|
$
|
35,795
|
||||||||
Stock-based compensation expenses
|
(320
|
)
|
(393
|
)
|
(1,416
|
)
|
(1,355
|
)
|
||||||||
Amortization of acquired intangible assets
|
(49
|
)
|
-
|
(49
|
)
|
-
|
||||||||||
Non-GAAP Sales and Marketing expenses
|
$
|
10,175
|
$
|
8,605
|
$
|
39,112
|
$
|
34,440
|
||||||||
GAAP General and Administrative expenses
|
$
|
6,445
|
$
|
17,826
|
$
|
23,793
|
$
|
34,295
|
||||||||
Stock-based compensation expenses
|
(347
|
)
|
(179
|
)
|
(1,238
|
)
|
(1,213
|
)
|
||||||||
Retired CEO compensation
|
-
|
-
|
-
|
96
|
||||||||||||
Non-GAAP General and Administrative expenses
|
$
|
6,098
|
$
|
17,647
|
$
|
22,555
|
$
|
33,178
|
||||||||
GAAP Restructuring and related charges
|
$
|
-
|
$
|
-
|
$
|
897
|
$
|
-
|
||||||||
Restructuring and related charges
|
-
|
-
|
(897
|
)
|
-
|
|||||||||||
Non-GAAP restructuring and related charges
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
GAAP Acquisition and integration-related charges
|
$
|
835
|
$
|
-
|
$
|
1,118
|
$
|
-
|
||||||||
Acquisition and integration-related
|
(835
|
)
|
-
|
(1,118
|
)
|
-
|
||||||||||
Non-GAAP acquisition and integration-related charges
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
GAAP Other operating expenses
|
$
|
-
|
$
|
249
|
$
|
-
|
$
|
4,220
|
||||||||
Hostile attempt related costs
|
-
|
(249
|
)
|
-
|
(4,220
|
)
|
||||||||||
Non-GAAP other operating expenses
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
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,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
GAAP operating income (loss)
|
$
|
4,169
|
$
|
(10,621
|
)
|
$
|
21,210
|
$
|
(10,937
|
)
|
||||||
Stock-based compensation expenses
|
938
|
958
|
3,964
|
3,560
|
||||||||||||
Changes in indirect tax positions
|
-
|
279
|
3
|
281
|
||||||||||||
Amortization of acquired intangible assets
|
106
|
-
|
106
|
-
|
||||||||||||
Excess cost on acquired inventory in business combination*
|
525
|
-
|
525
|
-
|
||||||||||||
Loss from termination of joint development agreement
|
1,199
|
-
|
1,199
|
-
|
||||||||||||
Retired CEO compensation
|
-
|
-
|
-
|
(96
|
)
|
|||||||||||
Hostile attempt related costs
|
-
|
249
|
-
|
4,220
|
||||||||||||
Restructuring and other charges
|
-
|
-
|
897
|
-
|
||||||||||||
Acquisition and integration-related charges
|
835
|
-
|
1,118
|
-
|
||||||||||||
Non-GAAP operating income (loss)
|
$
|
7,772
|
$
|
(9,135
|
)
|
$
|
29,022
|
$
|
(2,972
|
)
|
||||||
GAAP financial expenses and others, net
|
$
|
3,402
|
$
|
3,012
|
$
|
8,468
|
$
|
6,306
|
||||||||
Non-cash revaluation associated with acquisition
|
(110
|
)
|
-
|
(110
|
)
|
-
|
||||||||||
Leases – financial income (expenses)
|
(754
|
)
|
(154
|
)
|
253
|
2,278
|
||||||||||
Non-GAAP financial expenses & others, net
|
$
|
2,538
|
$
|
2,858
|
$
|
8,611
|
$
|
8,584
|
||||||||
GAAP Tax expenses
|
$
|
1,970
|
$
|
1,385
|
$
|
6,522
|
$
|
2,446
|
||||||||
Non-cash tax adjustments
|
(478
|
)
|
(851
|
)
|
(2,851
|
)
|
(1,278
|
)
|
||||||||
Non-GAAP Tax expenses
|
$
|
1,492
|
$
|
534
|
$
|
3,671
|
$
|
1,168
|
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,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
GAAP net income (loss)
|
$
|
(1,203
|
)
|
$
|
(15,018
|
)
|
$
|
6,220
|
$
|
(19,689
|
)
|
|||||
Stock-based compensation expenses
|
938
|
958
|
3,964
|
3,560
|
||||||||||||
Changes in indirect tax positions
|
-
|
279
|
3
|
281
|
||||||||||||
Amortization of acquired intangible assets
|
106
|
-
|
106
|
-
|
||||||||||||
Excess cost on acquired inventory in business combination*
|
525
|
-
|
525
|
-
|
||||||||||||
Loss from termination of joint development agreement
|
1,199
|
-
|
1,199
|
-
|
||||||||||||
Retired CEO compensation
|
-
|
-
|
-
|
(96
|
)
|
|||||||||||
Hostile attempt related costs
|
-
|
249
|
-
|
4,220
|
||||||||||||
Restructuring and other charges
|
-
|
-
|
897
|
-
|
||||||||||||
Acquisition and integration-related charges
|
835
|
-
|
1,118
|
-
|
||||||||||||
Non-cash revaluation associated with acquisition
|
110
|
-
|
110
|
-
|
||||||||||||
Non-cash tax adjustments
|
478
|
851
|
2,851
|
1,278
|
||||||||||||
Leases – financial income (expenses)
|
754
|
154
|
(253
|
)
|
(2,278
|
)
|
||||||||||
Non-GAAP net income (loss)
|
$
|
3,742
|
$
|
(12,527
|
)
|
$
|
16,740
|
$
|
(12,724
|
)
|
||||||
GAAP Basic net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
(0.18
|
)
|
$
|
0.07
|
$
|
(0.23
|
)
|
|||||
GAAP Diluted net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
(0.18
|
)
|
$
|
0.07
|
$
|
(0.23
|
)
|
|||||
Non GAAP Diluted net income (loss) per share (**)
|
$
|
0.04
|
$
|
(0.15
|
)
|
$
|
0.20
|
$
|
(0.15
|
)
|