Ceragon Networks (CRNT) 28th Annual Needham Growth Conference Virtual summary

Financial performance and outlook

• Revenue volatility in Q3 and Q4 was due to delivery shifts from major customers, but no cancellations occurred, resulting in a larger backlog for 2026 and nearly doubled backlog at the end of 2025 versus 2024.

• North America showed a positive trend in gross margin and revenue mix, with strong momentum and multiple advanced-stage opportunities expected to convert in 2026.

• India saw high revenues at the start of 2025, then stabilized at a $100M run rate, with slight expansion assumed and potential upside from new RFPs and customer rollouts in 2026.

• Gross and operating margins are expected to improve in 2026, with non-GAAP operating margin guidance of 6.5%–7.5% and gross margin ~100 bps higher, driven by product mix, revenue growth, and ongoing cost savings, despite some OPEX increases and FX headwinds.

• Supply chain remains stable in terms of quantities, but rising memory chip prices are a concern for gross margins.

Strategic initiatives and product development

• Expanded product portfolio, including four new launches in 2026, leverages acquired Siklu technology for security and fixed wireless access use cases.

• Vertical integration with proprietary modem and RF chips enables cost-effective, high-performance products, such as a 25 Gbps millimeter wave box, maintaining leadership in the mmWave segment.

• Significant organizational changes and increased go-to-market investments were made to better capture indirect channel demand and support higher revenues, especially in high-growth regions.

• Investment is focused on both product development and sales, with increased variable compensation for sales teams and a focus on ROI.

• Exploring strategic acquisitions for incremental growth and scale.

Market trends and competitive landscape

• AI-driven demand is increasing network capacity needs, especially in enterprise and robotics, with products positioned to address these trends.

• Private network strategy targets energy, utility, security/public safety, and defense sectors, supported by the E2E acquisition and tailored sales teams.

• Private 5G adoption is slow due to high costs, but alternative technologies and cost reductions could accelerate uptake.

• Competitive landscape is shifting, with consolidation (e.g., Nokia divestiture) seen as a positive for profitability and market opportunities.

• Global presence with ~2,200 customers in 130 countries, driving diversification.