Ceragon Reports 2025 Second Quarter Financial Results

Delivers profitability on a non-GAAP basis and free cash flow amid evolving revenue environment;Ceragon's technology leadership driving competitive gains and increased opportunities , /PRNewswire/ -- Ceragon (NASDAQ: CRNT), a leading solutions provider of end-to-end wireless connectivity, today reported its financial results for the second quarter period ended June 30, 2025. Q2 2025 Financial Highlights: Revenues of $82.3 million Operating income of $2.2 million on a GAAP basis, or $4.7 million on a non-GAAP basis Net income (loss) of ($1.3) million on a GAAP basis, and $2.5 million on a non-GAAP basis EPS of ($0.01) per diluted share on a GAAP basis, or $0.03 per diluted share on a non-GAAP basis Q2 2025 Business Highlights: North America momentum: Bookings and revenue grew sequentially for the third consecutive quarter, exceeded $20 million, and were the highest since Q2 2024 Strategic customer win: Secured "preferred vendor" status in a project with a new tier-1 mobile network operator in North America, due to innovative solution based on leveraging Siklu's technology Acquisition synergy: Recent acquisitions continued to deliver incremental opportunities and expanded capabilities across both private network and CSP markets CEO Doron Arazi commented: "The second quarter demonstrated the resilience and agility we have built into our business. We delivered solid profitability on a non-GAAP basis, generated cash, reduced debt, and advanced our strategic roadmap even as we navigated rapidly evolving dynamics in India. We are leveraging differentiated technology which delivers valuable capabilities that we believe outpaces our competitors, and these advantages are translating into new opportunities and expanded use cases that support incremental revenue and potential market share gains globally." "Momentum is building across North America and other regions, where our cutting-edge technology is opening doors with Tier-1 carriers and private network customers," Arazi continued. Primary Second Quarter 2025 Financial Results: Revenues were $82.3 million, down 14.4% from $96.1 million in Q2 2024. Gross profit was $28.4 million, giving us a gross margin of 34.6%, compared to gross margin of 34.8% in Q2 2024. GAAP Operating income was $2.2 million compared with $10.4 million for Q2 2024. GAAP Net income (loss) was ($1.3) million, or ($0.01) per diluted share, compared with $7.8 million, or $0.09 per diluted share for Q2 2024. Non-GAAP results were as follows: Gross margin was 35.2%, operating profit was $4.7 million, and net income of $2.5 million, or $0.03 per diluted share. Balance Sheet Cash and cash equivalents were $29.2 million on June 30, 2025, compared to $35.3 million on December 31, 2024. For a reconciliation of GAAP to non-GAAP results, see the attached tables. Revenue Breakout by Geography: Q2 2025 North America 33 % India 30 % EMEA 17 % Latin America 10 % APAC 10 % Outlook The current visibility, especially in India, is impacting the Company's ability to reaffirm prior guidance. Based on management's current view, the Company assumes the following: Revenue in the second half of 2025 to remain essentially consistent with first half levels At these revenue levels, Ceragon anticipates generating non-GAAP profit and positive cash flow Ceragon's momentum across field engagements, customer trials, and new opportunities, as well as a rebound of stalled and delayed projects in India, establish the foundation for renewed growth in 2026. Conference Call The Company will host a Zoom web conference today at 8:30 a.m. ET to discuss the financial 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. For investors unable to join the live call, a replay will be available on the Company's website at www.ceragon.com within 24 hours after the call. About Ceragon Ceragon (NASDAQ: CRNT) is a global innovator and leading solutions provider of end-to-end wireless connectivity, specializing in transport, access, and AI-powered managed & professional services. Through our commitment to excellence, we empower customers to elevate operational efficiency and enrich the quality of experience for their end users. Our customers include service providers, utilities, public safety organizations, government agencies, energy companies, and more, who rely on our wireless expertise and cutting-edge solutions for 5G & 4G broadband wireless connectivity, mission-critical services, and an array of applications that harness our ultra-high reliability and speed. Ceragon solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries. Through our innovative, end-to-end solutions, covering hardware, software, and managed & professional services, we enable our customers to embrace the future of wireless technology with confidence, shaping the next generation of connectivity and service delivery. Ceragon delivers extremely reliable, fast to deploy, high-capacity wireless solutions for a wide range of communication network use cases, optimized to lower TCO through minimal use of spectrum, power, real estate, and labor resources - driving simple, quick, and cost-effective network modernization and positioning Ceragon as a leading solutions provider for the "connectivity everywhere" era. 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, 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 there from 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: Company's forward-looking forecasts, with respect to which there is no assurance that such forecasts will materialize; Company's ability to future plan, business, marketing and product strategies on the forecasted evolution of the market developments, such as market and territory trends, future use cases, business concepts, technologies, future demand, and necessary inventory levels; 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 and the related evolving regional conflicts; risks associated with delays in the transition to 5G technologies and in the 5G rollout; risks relating to the concentration of our business on a limited number of large mobile operators and the fact that the significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect us; risks resulting from the volatility in our revenues, margins and working capital needs; disagreements with tax authorities regarding tax positions that we have taken could result in increased tax liabilities; the high volatility in the supply needs of our customers, which from time to time lead to delivery issues and may lead to us being unable to timely fulfil our customer commitments; 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 March 25, 2025, as well as other documents that may be subsequently filed by Ceragon from time to time 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. While we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. In addition, any forward-looking statements represent Ceragon's views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Ceragon does not assume any obligation to update any forward-looking statements unless required by law. The results reported in this press-release are preliminary and unaudited results, and investors should be aware of possible discrepancies between these results and the audited results to be reported, due to various factors. 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. Ceragon Investor & Media Contact: Rob FinkFNK IRTel. 1+646-809-4048[email protected] CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(U.S. dollars in thousands, except share and per share data) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenues 82,262 96,088 170,914 184,586 Cost of revenues 53,822 62,627 113,375 119,057 Gross profit 28,440 33,461 57,539 65,529 Operating expenses: Research and development, net 7,332 8,385 15,581 17,232 Sales and Marketing 11,722 11,508 24,019 22,769 General and administrative 6,940 2,295 12,376 8,158 Restructuring and related charges - - 3,732 1,416 Acquisition- and integration-related charges 229 915 704 1,377 Total operating expenses 26,223 23,103 56,412 50,952 Operating income 2,217 10,358 1,127 14,577 Financial and other expenses, net 2,896 1,916 1,906 4,777 Income (loss) before taxes (679) 8,442 (779) 9,800 Taxes on income 588 609 1,468 1,564 Net income (loss) (1,267) 7,833 (2,247) 8,236 Basic net income (loss) per share (0.01) 0.09 (0.03) 0.10 Diluted net income (loss) per share (0.01) 0.09 (0.03) 0.09 Weighted average number of shares used in computing basic net income (loss) per share 89,470,719 85,743,770 89,108,772 85,632,241 Weighted average number of shares used in computing diluted net income (loss) per share 89,470,719 87,921,507 89,108,772 87,753,163 CONDENSED CONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands) June 30, December 31, 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents 29,216 35,311 Trade receivables, net 124,051 149,619 Inventories 59,944 59,693 Other accounts receivable and prepaid expenses 20,994 16,415 Total current assets 234,205 261,038 NON-CURRENT ASSETS: Severance pay and pension fund 5,140 4,915 Property and equipment, net 38,007 36,764 Operating lease right-of-use assets 16,707 16,702 Intangible assets, net 22,421 16,791 Goodwill 11,046 7,749 Other non-current assets 859 1,037 Total non-current assets 94,180 83,958 Total assets 328,385 344,996 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables 73,759 91,157 Deferred revenues 2,426 2,573 Short-term loans 20,500 25,200 Operating lease liabilities 3,727 2,971 Other accounts payable and accrued expenses 25,453 29,547 Total current liabilities 125,865 151,448 LONG-TERM LIABILITIES: Accrued severance pay and pension 8,661 8,359 Operating lease liabilities 13,324 12,936 Other long-term payables 8,758 5,928 Total long-term liabilities 30,743 27,223 SHAREHOLDERS' EQUITY: Share capital 234 232 Additional paid-in capital 452,709 447,369 Treasury shares at cost (20,091) (20,091) Other comprehensive loss (7,703) (10,060) Accumulated deficit (253,372) (251,125) Total shareholders' equity 171,777 166,325 Total liabilities and shareholders' equity 328,385 344,996 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW(U.S. dollars, in thousands) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Cash flow from operating activities: Net income (loss) (1,267) 7,833 (2,247) 8,236 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 3,632 2,941 6,964 5,880 Loss from sale of property and equipment, net - 169 10 169 Stock-based compensation expense 1,549 1,566 2,199 2,470 Decrease (increase) in accrued severance pay and pensions, net 30 (212) 77 (564) Decrease (increase) in trade receivables, net 21,778 (16,023) 28,162 (9,247) Increase in other assets (including other accounts receivable, prepaid expenses, other non-current assets, and the effect of exchange rate changes on cash and cash equivalents) (1,179) (652) (2,319) (1,383) Decrease in inventory 2,206 1,186 127 8,555 Decrease in operating lease right-of-use assets 1,323 1,694 2,054 2,626 Increase (decrease) in trade payables (13,961) 12,075 (18,045) 589 Decrease in other accounts payable and accrued expenses (including other long-term payables) (3,285) (2,196) (2,531) (94) Decrease in operating lease liability (90) (1,922) (915) (2,942) Increase (decrease) in deferred revenues 26 (1,637) (164) (2,946) Net cash provided by operating activities 10,762 4,822 13,372 11,349 Cash flow from investing activities: Purchases of property and equipment, net (3,957) (4,562) (7,426) (7,955) Software development costs capitalized (1,173) (676) (1,711) (989) Payments made in connection with business acquisitions, net of acquired cash - - (6,570) - Net cash used in investing activities (5,130) (5,238) (15,707) (8,944) Cash flow from financing activities: Proceeds from exercise of stock options 143 284 651 542 Repayments of bank credits and loans, net (4,700) (2,050) (4,700) (4,150) Net cash used in financing activities (4,557) (1,766) (4,049) (3,608) Effect of exchange rate changes on cash and cash equivalents 453 (298) 289 (731) Increase (decrease) in cash and cash equivalents 1,528 (2,480) (6,095) (1,934) Cash and cash equivalents at the beginning of the period 27,688 28,783 35,311 28,237 Cash and cash equivalents at the end of the period 29,216 26,303 29,216 26,303 RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS(U.S. dollars in thousands, except share and per share data) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 GAAP cost of revenues 53,822 62,627 113,375 119,057 Stock-based compensation expenses (81) (134) (189) (265) Amortization of acquired intangible assets (451) (189) (956) (378) Excess cost on acquired inventory in business combination (*) - - - (124) Non-GAAP cost of revenues 53,290 62,304 112,230 118,290 GAAP gross profit 28,440 33,461 57,539 65,529 Stock-based compensation expenses 81 134 189 265 Amortization of acquired intangible assets 451 189 956 378 Excess cost on acquired inventory in business combination (*) - - - 124 Non-GAAP gross profit 28,972 33,784 58,684 66,296 GAAP Research and development expenses 7,332 8,385 15,581 17,232 Stock-based compensation expenses (123) (184) (278) (336) Non-GAAP Research and development expenses 7,209 8,201 15,303 16,896 GAAP Sales and marketing expenses 11,722 11,508 24,019 22,769 Stock-based compensation expenses (330) (387) (640) (683) Amortization of acquired intangible assets (275) (117) (497) (388) Non-GAAP Sales and marketing expenses 11,117 11,004 22,882 21,698 GAAP General and administrative expenses 6,940 2,295 12,376 8,158 Stock-based compensation expenses (1,015) (861) (1,092) (1,186) Non-GAAP General and administrative expenses 5,925 1,434 11,284 6,972 GAAP Restructuring and related charges - - 3,732 1,416 Restructuring and related charges - - (3,732) (1,416) Non-GAAP Restructuring and related charges - - - - GAAP Acquisition- and integration-related charges 229 915 704 1,377 Acquisition- and integration-related charges (229) (915) (704) (1,377) Non-GAAP Acquisition- and integration-related charges - - - - RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS(U.S. dollars in thousands, except share and per share data) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 GAAP Operating income 2,217 10,358 1,127 14,577 Stock-based compensation expenses 1,549 1,566 2,199 2,470 Amortization of acquired intangible assets 726 306 1,453 766 Excess cost on acquired inventory in business combination (*) - - - 124 Restructuring and other charges - - 3,732 1,416 Acquisition- and integration-related charges 229 915 704 1,377 Non-GAAP Operating income 4,721 13,145 9,215 20,730 GAAP Financial and other expenses, net 2,896 1,916 1,906 4,777 Leases – financial income (expenses) (1,233) 207 (1,138) 319 Non-cash revaluation associated with business combination 16 477 1,948 (196) Non-GAAP Financial and other expenses, net 1,679 2,600 2,716 4,900 GAAP Tax expenses 588 609 1,468 1,564 Non cash tax adjustments - - - (413) Non-GAAP Tax expenses 588 609 1,468 1,151 GAAP Net income (loss) (1,267) 7,833 (2,247) 8,236 Stock-based compensation expenses 1,549 1,566 2,199 2,470 Excess cost on acquired inventory in business combination (*) - - - 124 Amortization of acquired intangible assets 726 306 1,453 766 Restructuring and other charges - - 3,732 1,416 Acquisition- and integration-related charges 229 915 704 1,377 Leases – financial expenses (income) 1,233 (207) 1,138 (319) Non-cash revaluation associated with business combination (16) (477) (1,948) 196 Non-cash tax adjustments - - - 413 Non-GAAP Net income 2,454 9,936 5,031 14,679 GAAP basic net income (loss) per share (0.01) 0.09 (0.03) 0.10 GAAP diluted net income (loss) per share (0.01) 0.09 (0.03) 0.09 Non-GAAP Diluted net income per share 0.03 0.11 0.06 0.17 Weighted average number of shares used in computing GAAP basic net income (loss) per share 89,470,719 85,743,770 89,108,772 85,632,241 Weighted average number of shares used in computing GAAP diluted net income (loss) per share 89,470,719 87,921,507 89,108,772 87,753,163 Weighted average number of shares used in computing Non-GAAP diluted net income per share 91,245,422 87,921,507 91,381,985 87,753,163 (*) Consists of charges to cost of revenues for the difference between the fair value of acquired inventory in business combination, which was recorded at fair value, and the actual cost of this inventory, which impacts the Company's gross profit. 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Ceragon Reports 2025 Second Quarter Financial Results

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