Ceragon Networks Ltd. ((CRNT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Ceragon Networks Ltd. has reported a robust financial year, achieving record profits and significant growth across various sectors. The company’s earnings call highlighted remarkable achievements, particularly in the Indian market, and successful product launches, although challenges remain with gross margin fluctuations and low visibility for 2025.
Record Year for Ceragon
Ceragon Networks has achieved a record year with the highest operating profit since 2012, driven by a 13% annual revenue growth in 2024. This impressive performance was achieved despite a market decline of more than 10%, marking a significant milestone for the company.
Strong Performance in India
India emerged as a key market for Ceragon, with revenues reaching an unprecedented $55.6 million. This growth was fueled by the deployment of 4G and 5G networks and the growing popularity of the IP-50EXA product, contributing to a record quarter for the company.
Increased Bookings from Private Networks
Ceragon reported a substantial increase in bookings from private networks, exceeding 50%. This uptick not only bolstered their revenue diversification strategy but also reinforced their position in the market.
Successful Product Launches
The introduction of new products, including the IP-50CX and IP-50EX, alongside the Siklu By Ceragon offering, has strengthened Ceragon’s technological lead and solidified its market position.
Positive Outlook on Managed Services
Ceragon secured additional recurring revenue from managed services, amounting to approximately $7 million ARR. This represents more than 30% of their current annual recurring revenue, showcasing a positive outlook for the segment.
Low Visibility in 2025
Looking ahead to 2025, Ceragon faces low visibility, particularly due to the cyclical nature of the CSP market and evolving dynamics in private networks, posing potential challenges for the company.
Challenges with Gross Margin Fluctuations
The company experienced a slight decrease in non-GAAP gross margin, which fell to 34.3% in Q4 2024 from 35.1% in the previous year. This was attributed to changes in regional revenue mix and volumes.
DSO Increase
Ceragon saw an increase in Days Sales Outstanding, which rose to 126 days. This is reflective of the business growth in India but also impacts cash flow management.
Forward-Looking Guidance
Ceragon provided optimistic guidance for 2025, projecting revenue between $390 million and $430 million, with non-GAAP operating margins of at least 10%. The company aims to increase free cash flow compared to 2024, focusing on expanding its millimeter-wave products, increasing its market share in private networks, and boosting recurring revenue.
In conclusion, Ceragon Networks Ltd. has had a successful year, highlighted by record profits and significant achievements in various sectors. While challenges such as low visibility for 2025 and gross margin fluctuations exist, the company’s strategic plans and optimistic guidance for the upcoming year position it well to potentially outperform the market.
