Ceragon Networks Ltd Stock

Ladies and gentlemen, thank you for standing by, and welcome to Ceragon's Second Quarter 2026 Earnings Call. [Operator Instructions] I must advise you that this call is being recorded today. I'd now like to hand over the call to our first speaker today, Rob Fink, Head of Investor Relations. Rob, please go ahead.

Thank you, operator, and good morning, everyone. Hosting today's call are Doron Arazi, Ceragon's Chief Executive Officer; and Ronen Stein, Chief Financial Officer. Before we start, please note that today's discussion includes forward-looking statements within the meaning of the Securities Act of 1933 as amended, the Securities Exchange Act of 1934 and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, financial -- projected financial performance, future initiatives, business outlook, development efforts and anticipated results, timelines and other matters. Forward-looking statements are based on expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially.

These risks and uncertainties include, among others, global and regional economic conditions, conditions in Israel and the region, fluctuations in exchange rates, customer concentration, ordering patterns, supply chain challenges and other matters further detailed in Ceragon's most recent annual report on Form 20-F and other documents that are filed with the Securities and Exchange Commission. Forward-looking statements are accurate only as of the date they are made, and Ceragon undertakes no obligation to update them. Ceragon's public filings are available on the Securities and Exchange Commission's website at sec.gov and on Ceragon's website at ceragon.com. Also, today's call will include certain non-GAAP measures. For a reconciliation between GAAP and non-GAAP results, please see the table attached to the press release that was issued earlier today, which is posted on the Investor Relations section of Ceragon's website.

With that, I will now turn the call over to Doron. Doron, the call is yours.

Thank you, Rob, and good morning, everyone. Ceragon delivered a strong second quarter as recently introduced technologies and solutions are creating a clear competitive advantage and driving demand in key markets with particularly strong execution in India. Revenue for the second quarter was $93.9 million, up 14% year-over-year, and non-GAAP EPS was $0.02. Booking in the second quarter reached their highest level since the first quarter of 2024. Bookings and the book-to-bill ratio in the first half of 2026 represent the highest in the last 10 years for any first half period. This demonstrates the strong competitive position Ceragon has established, especially in the faster-growing segments of our market.

Additionally, the recent changes in the competitive landscape are opening more opportunities for us. We believe that 2 significant competitors are without visible technological continuity and may be observed as effectively out of the market. And the third competitor's future commitment to the market is uncertain. Subsequently, customers are looking for an established technology leader like Ceragon to fill the gap. Given these dynamics, we are capturing more opportunities, engaging in RFPs with potential new customers and being asked to bid on projects involving new use cases. Driving our results were demand in India, the continued adoption of our E-Band products and private network wins as customers continue to invest in capacity, network modernization and new connectivity applications.

Our portfolio is increasingly well aligned with those investments. At the same time, we continue to expand the ways in which we serve customers beyond our traditional wireless transport business, including end-to-end private network solutions and managed services. Customer interest and demand in our newest products and solutions is encouraging. Positive results from proof-of-concept projects are helping to drive the interest from both existing customers and many potentially new customers in both proven and many new use cases. I'll start with India, a region with continued strong demand.

As we recently announced, we have booked approximately $120 million in orders from operators in India through late July. These orders are primarily driven by 2 of the country's leading mobile operators and support both the expansion and modernization of nationwide 4G and 5G transport networks. Fixed wireless access remains an important driver for this activity. As operators expand broadband coverage and address rapidly increasing data consumption, they require higher capacity transport that can be deployed quickly and economically. Our new IP-50EX platform and multi-band solution are winning this business for us as they are well suited to the requirements of the Indian market.

In general, demand for our innovative E-Band wide portfolio is very strong very strong. This is consistent with the trend we discussed last quarter as customers increasingly recognize E-Band as an attractive way to deliver fiber-like capacity while accelerating deployment and lowering total cost of ownership. Given the exceptionally strong bookings in India during the first half and based on our visibility for the remainder of the year, 2026 has the potential to be one of the strongest bookings years in India in quite some time.

Turning to North America. This market also remains strong and active for Ceragon. Revenue from our existing key Tier-1 carrier customer was slightly higher than what we had anticipated during the quarter. We overcame some of the supply chain timing issues we discussed on our last call, but some of their revenue has shifted from the second quarter to the third quarter as expected. More importantly, the underlying demand environment with this customer remains healthy. Across North America, more broadly, engagement is strong from both CSPs and ISPs around many of the themes we have discussed previously, including higher capacity network architectures even for fiber redundancy, even as the new microwave and next-generation wireless transport solutions that can provide additional capacity with attractive deployment economics.

These are areas where we believe Ceragon's technology and expanding product portfolio position us very well. We were successful in our proof-of-concept field trials with our 5G FR2 solution for a new Tier-1 carrier in North America. And now we are in commercialization discussions with this potential new customer. We also recognize the increased interest in LEO connectivity technology, which has grown even further following the IPO of SpaceX. We believe that such satellite-based technologies are very important for global connectivity and the digitization trend. However, we view these technologies as complementary to terrestrial technology, not as a substitute. We believe wireless backhaul such as what Ceragon provides will remain the dominant solution for high-capacity connectivity.

Anecdotally, we would also remind investors of the recent announcement by SpaceX, highlighting its intent to build a terrestrial network in the U.S. If this happens, it may become another opportunity for us. Private network business in North America was particularly encouraging with record bookings. In general, private network opportunities are accelerating globally, and our recently introduced capabilities are aligned with the needs of this market segment. The recently announced deals are evidence of our ability to serve various use cases within private networks. We are encouraged that our continued investment in this segment is bearing fruit.

What is particularly encouraging is the diversity of these opportunities. We are increasingly competing for broader end-to-end projects that combine advanced wireless transport with technologies like private 5G and LTE, enabling IoT connectivity, automation and other mission-critical applications. These opportunities are reflective of industry estimates that predict private network growth will exceed 30% CAGR over the next 4 years. We believe we are well positioned for significant growth in this segment despite inherently longer sales cycle when compared to our traditional carrier business. Growth is not expected to be in a straight line, but our pipeline is expanding. The range of use cases is broadening, and we are seeing greater conversion of opportunities into bookings. We believe this can become an increasingly meaningful contributor to Ceragon over time.

Our momentum also extends beyond the business and geographies that drove the majority of second quarter revenue. In Managed Services, we recently secured a 2-year $3.5 million contract with our major mobile -- with a major mobile operator in Mexico. This is an important win because it demonstrates the opportunity to expand Ceragon's relationship with customers beyond equipment and into broader long-term or long-duration service engagements. Managed and professional services remain an important part of our strategy to increase the value we provide to customers while building a more diversified revenue base. We also recently secured an additional 5-year agreement worth up to $70 million with a Tier-1 mobile operator in APAC. We believe the duration and scale of this engagement validate our ability to build long-term strategic relationships with major operators and expand our role as their networks evolve.

In EMEA, we have begun to see the payoff from our recent leadership changes and investments. Bookings in the second quarter in this region were the highest in almost 3 years, and we continue to pursue new opportunities that could help us continue this momentum. In Latin America and the remainder of APAC, I already mentioned the notable success from a recently announced new managed services deal and the renewal of a 5-year contract with a Tier-1 operator, respectively. In general, we continue to take a selective approach in these regions.

When I step back and look at the first half of 2026, I am pleased by the breadth of the momentum across Ceragon. India is performing exceptionally well. North America remains a strong market for our traditional carrier business, while private networks continue to gain traction. We are establishing larger and longer duration managed services relationships, and we see emerging opportunities in EMEA as the competitive landscape evolves. Together, these developments reinforce our view that the underlying demand environment for Ceragon solutions remains strong.

At the same time, as discussed last quarter, the supply chain environment continues to be challenging from both cost and lead times. These trends are not unique to Ceragon as our observations are consistent with commentary across the broader telecom and technology industries. However, we continue to implement mitigation initiatives across procurement, product design and our supply chain to minimize the impact on our business conversion, revenue and profitability. The strong bookings in the first half of 2026 and increasing interest from existing and new customers in both the CSP and ISP domain as well as private networks are strong signals for our superior technology and solutions. With our new CTO on board and our internal plans for introducing new technologies and products in the mid to long term, our confidence in Ceragon's long-term success is only increasing.

With that, I'll turn the call over to Ronen to review our financial results in greater detail.

Thank you, Doron, and good morning, everyone. Q2 2026 was another profitable quarter on a non-GAAP basis with positive free cash flow generated by operating and investing activities. To help you understand the results, I will be referring primarily to non-GAAP financials. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer investors to today's press release.

Let me now review the second quarter results. Revenues for the second quarter were $93.9 million, up 14.2% from $82.3 million in Q2 2025. Our strongest regions in terms of revenue for the quarter were India and North America at $45 million and $21 million, respectively. We had 2 customers in the second quarter that contributed more than 10% of our revenues. Gross profit for the second quarter on a non-GAAP basis was $30.3 million, an increase of 4.4% compared to $29 million in Q2 2025. Our non-GAAP gross margin was 32.2% compared to 35.2% in Q2 2025. Gross margin was negatively impacted by geographical and product mixtures, along with some cost pressures, as mentioned previously by Doron.

Given the magnitude and breadth of the cost pressures, we do not currently expect our mitigation initiatives to appreciably offset the pressure in the near term. As a result, we anticipate that these component costs and supply chain challenges will continue to pressure gross margins over the remainder of 2026. As another mitigation plan for our current challenges, we are also focusing on increased software sales.

Turning to operating expenses. Research and development expenses for the second quarter on a non-GAAP basis were $8.2 million, up from $7.2 million in Q2 2025. As a percentage of revenue, our non-GAAP R&D expenses were 8.7% in the second quarter as compared to 8.8% in the second quarter last year. Sales and marketing expenses for the second quarter on a non-GAAP basis were $12.3 million, up from $11.1 million in Q2 2025. As a percentage of revenue, sales and marketing expenses on a non-GAAP basis were 13.1% in the second quarter compared to 13.5% in the second quarter last year.

General and administrative expenses for the second quarter on a non-GAAP basis were $5.7 million compared to $5.9 million in Q2 2025. As a percentage of revenues, non-GAAP G&A expenses were 6.1% in the second quarter compared to 7.2% in the second quarter last year. Operating income for the second quarter on a non-GAAP basis was $4 million compared to $4.7 million for Q2 2025. As a percentage of revenues, non-GAAP operating income was 4.2% in the second quarter compared to 5.7% in the second quarter last year. As a reminder, operating income was also negatively impacted versus 2025 due to adverse foreign currency movement in the Israeli shekel.

Financial and other expenses for the second quarter on a non-GAAP basis were $1.6 million compared to $1.7 million in the second quarter last year. Foreign exchange conditions stabilized during the quarter. Our tax expenses for the second quarter on a non-GAAP basis were $0.7 million. Net income for the second quarter on a non-GAAP basis was $1.7 million or $0.02 per diluted share compared to $2.5 million or $0.03 per diluted share for Q2 2025. As for our balance sheet, our cash position at the end of the second quarter was $34.8 million compared to $38.4 million at the end of 2025. Short-term loans at the end of Q2 2026 were $12 million compared to $19 million at the end of 2025. Thus, at the end of the second quarter, we had a net positive cash position of approximately $22.8 million compared to a net cash position of approximately $19.4 million at the end of 2025. We believe we have cash and facilities that are sufficient for our operations and working capital needs.

Our inventory at the end of the second quarter was $59.5 million, down from $61.6 million at the end of 2025. Our trade receivables at the end of the second quarter were $101.3 million, up from $99.7 million at the end of 2025. Our DSO now stands at 107 days. With respect to our cash flow, net cash generated by operations and investing activities was $0.3 million in the second quarter compared to approximately $5.6 million in Q2 2025. Net cash provided by operating activities was $5.1 million, while net cash used in investing activities was $4.8 million compared to $10.8 million and $5.1 million, respectively, in Q2 2025.

Turning to our 2026 guidance. We reiterate our 2026 revenue guidance of $355 million to $385 million. Given the underlying business strength and the anticipated cost challenges in the second half of 2026, we now expect our full year 2026 gross margin to be between 33.5% to 34.5% versus 35.5% previously and operating margin to be between 5% to 6% versus 6.5% to 7.5% previously, both at the midpoint of our provided revenue range for 2026. The reduction in non-GAAP gross margin reflects our current view of the full year impact of the anticipated cost pressures.

That concludes my prepared remarks, and I'd like to now turn the call back over to Doron for any remaining comments. Doron?

Thanks, Ronen. There will always be moving pieces in our business from quarter-to-quarter. And today, those include component costs, supply availability and geographic mix. But the underlying fundamentals that matter most to our long-term outlook remain encouraging. Demand for our technology and solutions is increasing. Our addressable market is expanding, and we are converting more of these opportunities into meaningful bookings and long-term customer relationships.

With that, I now open the call for questions.

[Operator Instructions] Our first question will be from Scott Searle from ROTH Capital. Okay. We will move to Ryan Koontz from Needham.

I apologize for my confusion there. Doron, just maybe to dive in. I'm not sure if I heard a book-to-bill number, but I'd be curious if you had it. And then given the reiterated guidance for 2026, given the performance in the second quarter, at the lower end, it would imply you're kind of flattish the second half versus the first half, given the strength that you're seeing in India, given the bookings that you're seeing in India. And it sounds like even the recovering strength in the third quarter for North America would imply a number higher than, I think, flattish versus the first half. So I'm kind of wondering what your thought process is there and the swing factors to get you from the low end of the range to the high end of the range.

Yes. So thank you for this question, Scott. The issue is not the demand. The issue is not the visibility. The issue is the disruption in the supply chain and time line of getting components. Let's not forget, the AI explosion has created a perfect storm in the domain of chips and active components for many industries. And while time line for delivery of these components are lingering and the level of confidence in meeting time lines is also being kind of reduced a little bit, we prefer to take the approach in which we keep this revenue guidance within this frame because this is the main, so to speak, visibility problem that we have. So to summarize, it's not about the demand. It's about the ability to get the components in time to deliver and to convert these great orders into revenue.

And if I could follow up, as my follow-up question. Just specifically in North America was a little weaker this quarter. It sounds like your Tier-1 slipped shipments from the second quarter into the third quarter. But I'm wondering on the private networks front, how did that progress sequentially from March to June? And it sounds like you've got a good backlog of business. So the visibility from North America may be into the second half of the year. And since you touched on it, Starlink, I'm wondering if you're actually seeing any opportunities created from there, if there are any discussions ongoing on that front? Or if at this point, it's basically just kind of speculating if they start to build out a terrestrial network. So thanks.

I'll start with the second question. Look, we probably all heard the same messages coming on the conference calls they had a while ago. they did not indicate anything that is more specific, such as what is the architecture or more details about the architecture of this new terrestrial network and so on and so forth. So I think that it's still early to assess how this is going to play out. But if I'm trying to kind of get the messages from that call, they would definitely want to build a very -- a network that is -- can be built very fast and at the same token can be quite competitive to the existing legacy networks. In such case, especially when they will start aggregating much more data in their existing antennas, the backhaul will become a very important element in the architecture.

I don't think that at this point, their technology can carry such amount of data. I'm not sure that it will be able to carry such amount of data even in the long term, but that's something that we can leave out. So based on all these assumptions, I think that there can be an opportunity for players in the millimeter wave and microwave domain to help them build their network very fast with a level of service that can compete with the incumbents. And now to your first question. Look, North America looks good. We anticipated that the second part and predominantly Q3 will look better for us because of all the reasons that we described already in the call of the first quarter results.

So basically, we are a bit positively surprised in Q2, but the general trajectory is what we discussed already, which indicates that we believe that the second half will be much better. With regard to private networks, yes, the business is growing and is growing nicely. I just want to remind you that the conversion of private network projects into revenue is much slower than just sending our equipment to a Tier-1 operator and recognizing it within the same quarter. So I don't think that the impact of the strength in terms of booking and backlog of private networks will be that significant in the short term. But all in all, the bottom line for North America is positive. We believe that the second part of the year could be stronger than the first one.

Our next question is from Ryan Koontz from Needham.

Can you hear me?

Yes.

Sorry about that. Super. With regards to India, what are you seeing there in terms of changes in mix and the use case? It's great to hear the strength coming from India. Is this mostly for rural coverage? Are you looking at FWA and urban areas at all? Or what kind of use cases are you seeing in India that are giving you the confidence and the bookings here? And how is that affecting your product mix?

Yes. So I think that the business in India is driven by 2 main, so to speak, phenomenon. One, there are still operators who have not completed the upgrade of the network even to 4G. And this is one part of the business strength. The other part, and that's for the more advanced operators. In the 5G era, the operators in India are looking to expand the business predominantly bringing connectivity to residential areas and to enterprise, which means more fixed wireless access use cases. There, you are talking about much higher capacity that is needed for the backhaul -- and in those cases, they are using either our ICSA product or multiband that can ensure minimum level of connectivity with much bigger capacity on average. These are the 2 main phenomena that are driving the demand.

And then maybe on the U.S. side, it sounds like your new Tier-1, you're trying to ramp with, you're really just working through the operational processes and maybe commercial processes. And you think you have still a good shot of seeing some share gains in '27 there?

Yes. I would say that -- this strengthening relationship with this new Tier-1 operator will start driving meaningful revenue for us in 2027. I do believe that we -- and I think I also mentioned that in the previous call, I do believe that we'll start getting the orders quite soon, maybe even in Q3. But in terms of impact on revenue, it's going to become meaningful in 2027.

And then maybe lastly on the LEO impacts. It's interesting. I hear what you're saying on Starlink, if they build, this would get them time to market to get to the microwave to the density in more urban areas. I assume the other LEOs, namely AST SpaceMobile and their collaboration with the U.S. incumbent mobile operators, at this point, you're not seeing any slowdown in the rural build in terms of their thoughts around the '27 and beyond?

We don't see any slowdown. And I need to kind of reiterate the main, so to speak, observation, given what we know. I don't know what I don't know. But based on all the public announcements, including some announcements and discussions about the technology and the current capabilities, the fundamental limitation is area spectral efficiency, which means bits per square kilometer. And in this respect, if you need very high capacity, at this point, at least, the LEO is not a great solution. The LEO is an amazing solution for increasing coverage predominantly for mobility because you know that once you start getting into homes and so on and so forth, the signal cannot go through walls and this kind of stuff.

So the way I see the world is that this is a great collaboration between the OpCos and the LEO players to basically improve the level of service for the OpCos and reach out to these very rural areas where they don't have coverage, and it doesn't make sense for the OpCos to invest in more, so to speak, fundamental technology. That's the reason why we see this collaboration. It's about coverage. It's not about capacity.

Our next question is from Tyler Burmeister from Lake Street Capital Markets.

Maybe first, I was wondering if you could give us any idea how much of the $120 million bookings year-to-date in India would you expect to convert to revenue this year? And then it sounds like the second half gross margin impact is largely or all component supply chain related. But I'm just wondering, is there any potential impact as well from just a stronger mix in India than maybe you're expecting at least earlier this year?

Good morning. The $120 million is expected mostly to be converted this year or fully all, but mostly this year. This is the expectation. Some of it was already converted. I remind that the $120 million is bookings over this year -- year-to-date till end of July when it was announced.

I would just add to Ronen's point in terms of the -- your question about gross margin, how should we think about gross margin? So let's not forget, when we take my previous comment when I'm expecting obviously, subject to the supply chain challenges that North America revenue will be stronger in the second part of the year as opposed to the first part. And with the fact that India continues to be strong, we see the contribution of North America helping us to improve the gross margin. But the bottom line is that Ronen has actually indicated how the gross margin for the year is going to look like in his comments. And that's basically based on a better mix between North America and India for the second part of the year. And I think that all in all, with the comments -- with the prepared comments, you can anticipate the gross margins on the second part of the year.

And then maybe just a follow-up there on the gross margin side of it. With your updated supply chain timelines, component timelines, do we expect to see any directional rebound in gross margins in Q4? Do you expect some of these challenges to persist into '27? Any update on the timeline for improvement from some of these component challenges would be great.

So I cannot guide on a quarterly basis, but the H2, as Doron just mentioned and completed my prepared remarks, this is supposed to be already covered. So the costs, we don't see in 2026 in the second half much improvement on the cost side. On the mixture side, both regional and product and trying to sell more software, as I commented in my prepared remarks, we expect the margins to streamline on the annual basis, as I just mentioned. For the next year, we continue to have and for the future, we continue to have more initiatives that will just take us more time, both on cost initiatives as well as the fact that once agreements with customers will get renewed or something like that, we will continue to push for higher prices because this has already been discussed not only on our part, but also other players in the market are. I think that everybody understands that current prices cannot be continue if costs continue to go up.

Just as a general comment, I think that we are truly in a perfect storm. And this situation is not sustainable for a very long time. And because of that, we believe that we'll start seeing gradual improvement in 2027. And as Ronen hinted, it may come from different angles, starting with building a more efficient product in terms of home cost and redesign and some of the comments that we already mentioned in this regard in our prepared comments but also from the angle of price increase. It's a full industry issue. And while today, we may have some sort of contracts that we are honoring. Obviously, many of the contracts and some of the orders are always or almost always being opened up on an annual basis. And that will also give us another opportunity to also discuss pricing with our customers. So we are not absorbing everything within our industry.

Our next question is from Ben Taxdhal from Craig-Hallum.

Can you guys hear me? Yes. Perfect. I'm on for Christian Schwab here. A lot of my questions have been answered. I'm just wondering how maybe a little bit more broadly, how does this demand environment shape up to ones in years past? And then maybe if you could tie in there, what is your initial thoughts on '27? I know maybe you can't give a number, but can you kind of tie that all together? That would be very helpful.

I would say the following. without giving any sort of specific guidance to 2027 and beyond, we continue to assume in our analysis that a single high-digit growth in revenue is a reasonable assumption. Obviously, if we will be able to accelerate the execution of our new strategy with regard to private networks, it can become, so to speak, a driver for even higher growth. And on the legacy business of the CSP, ISP, all these public networks, our assumption is that on the one hand, we have new opportunities because of the competition environment that is, generally speaking, diluted and making our life in terms of attaining new customers easier. And if that becomes even bigger, for us, it can also outpace the low single-digit growth that is expected for this piece of the business.

So all in all, when I look at our strategy, we are doing 2 things. First of all, we are increasing our TAM beyond just selling point-to-point product to either private networks or public networks. And that by itself is increasing our TAM. And since we are directing our business towards private networks end-to-end, which is expected to grow in a relatively high pace we feel that at this point, without doing a very in-depth analysis, a high single-digit growth for the years to come is prudent and makes sense.

Our next question is from Theodore O'Neill from Hills Research.

Congratulations on the quarter. I wanted to circle back on SpaceX's discussion about what they would do with the terrestrial network. Elon Musk is talking about in earlier this month, I guess, last week that they're talking about trying to create a terrestrial network that would run on the acquired EchoStar frequencies and which would be, I think, completely different frequency than what the major carriers are using now. Is that something you could participate in if they decided to go that way? Or is it strictly just the microwave backhaul part that you would be addressing?

We are addressing predominantly the backhaul or the transport part of any network, which is our main competency. And in this respect, assuming they will use this spectrum in a very good way, the question I'm asking myself and I think many others are, okay, that's great. And what's going to happen in the aggregation points. After you are able to serve more subscription, how are you going to manage your network architecture starting from the aggregation point.

And for that, I don't think they gave information or at least I was not exposed to such information about the architecture. And this is my main focus in my comments. I believe that if they want to move fast, one of the challenges will be, okay, I got much more subscription. I got much more customers to serve. I actually got much more traffic in the access. How do I do -- plan my transport part so that my network can be as efficient and as good as the, I would say, legacy terrestrial ones.

There are no further questions. So that concludes today's call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, thank you for standing by, and welcome to Ceragon's First Quarter 2026 Earnings Call. [Operator Instructions] I must advise you that this call is being recorded today.

I would now like to hand over the call to our first speaker today, Rob Fink, Head of Investor Relations. Rob, please go ahead.

Thank you, operator, and good morning, everyone. Hosting the call today is Doron Arazi, Ceragon's Chief Executive Officer; and Ronen Stein, Chief Financial Officer.

Before we start, please note that today's discussion includes forward-looking statements within the meaning of the Securities Act of 1933 as amended the Securities Exchange Act of 1934 as amended. And the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, projected financial performance, future initiatives, business outlook, development efforts, anticipated results, time line and other matters. Forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially.

These risks and uncertainties include, among other things, global and regional economic conditions, conditions in Israel and the region, fluctuations in exchange rate, customer concentration, ordering patterns, and supply chain challenges as further detailed in Ceragon's most annual report on Form 20-F and other documents filed with the Securities and Exchange Commission.

Forward-looking statements are accurate only as of the date they are made, and Ceragon undertakes no obligation to update them. Ceragon's public filings are available on the Securities and Exchange Commission's website at sec.gov and on Ceragon's website at ceragon.com. Also, today's call will include certain non-GAAP measures. For a reconciliation between GAAP and non-GAAP results please see the table attached to the press release issued earlier today, which is posted on the Investor Relations section of Ceragon's website.

With all that, I will now turn the call over to Doron. Doron, the call is yours.

Thank you, Rob, and good morning, everyone. The first quarter of 2026 was a solid start to the year for Ceragon highlighted by strong execution in several key markets, especially India. The results reflected healthy demand across our business and the strength of Ceragon's positioning in several important growth markets.

Revenue for the first quarter of 2026 was $85 million and non-GAAP EPS was $0.01. North America represented 37% of revenue in the quarter, and India represented 35% of continuing the regional concentration trends we discussed previously. Gross margin benefited from favorable geographic and product mix as well as increased software license revenue, although profitability was negatively impacted by several macro and industry-wide cost pressures that intensified during the quarter. However, demand trends across the business remain encouraging and support our view that Ceragon remains strategically well positioned in the evolving wireless connectivity market.

I'll begin with India where activity levels remain strong and the conversion of opportunities into bookings accelerated during the quarter. Earlier this month, we announced approximately $86 million in bookings in India, mainly from 2 leading operators, including a substantial portion related to our new IP-50EXA platform, supporting large-scale fixed wireless access expansion projects. These wins reinforce both the scale of the market opportunity and Ceragon's competitive positioning, especially given the expected changes in the competitive landscape.

Operators continue investing aggressively to support rising data consumption and broadband expansion and our E-Band solutions align well with those requirements. In particular, demand for our E-Band portfolio is accelerating across multiple applications. Customers increasingly view these solutions as a compelling alternative to FibeAir due to their ability to deliver FibeAir-like capacity with faster deployment and time lines with lower total cost of ownership.

By the way, based on customer feedback, we believe this trend may be expanding beyond India into additional geographies and customer verticals. This view is also generally consistent with recent industry analysts reporting year-over-year growth of 4% in the global wireless backhaul market in 2025.

Turning to North America. Execution during the first quarter was generally in line with our expectations. As we discussed previously, order volumes from one of our key Tier-1 carrier customers were particularly strong during the second half of 2025. And in Q1, this customer moderated bookings activity following the elevated period of demand. Importantly, our current expectations for 2026 with this customer remain largely unchanged. We continue to expect another strong year with this customer with revenue at levels similar to or modestly above 2025 levels with acceleration in the second half.

At the same time, we are making encouraging progress with another major Tier-1 carrier in North America. Recently, we successfully completed a proof-of-concept trial involving our new FR2 solution for the 28 gigahertz spectrum band. Following the positive outcome of the trial, we are now advancing development discussions and commercial engagement efforts with this customer. We are hopeful that this could potentially translate into meaningful orders starting in the third quarter.

More broadly, the North American market remains active. We continue to generate strong engagement levels from both traditional CSP and ISP customers, particularly around higher capacity network architectures. E-band as FibeAir redundancy and E-band as a next-generation wireless transport solution that can accelerate deployment and increase capacity while improving economics. We are also advancing more opportunities in private networks in North America. But as I've mentioned before, sales cycles in this segment remain longer and are more project oriented.

At a higher level, changes in the competitive landscape are driving more interest from many customers globally. Most notably CSP customers and most particularly among service providers in Europe. Discussions with these customers are at different stages of engagement, and we believe that we may start seeing initial orders from some of them in the remainder of 2026. In private networks, momentum continues to build, although deployment activity remains project-driven and gradual in nature.

Last month, we announced approximately $10 million in private network contracts across multiple customers and use cases. Such projects, many of which are end-to-end in scope are often anchored in advanced wireless transport combined with 5G or LTE to enable edge IoT connectivity and support operational automation for private networks. Ceragon's capabilities align well with the expanding industry demand and use cases, giving us a durable competitive advantage when bidding on projects. When I step back and look at the full picture, our Q1 results came in largely where we anticipated. And my view on the outlook today remains largely unchanged from what we communicated in January and February.

The investment thesis that underpins that outlook, specifically growing demand for our solutions, a strengthening competitive position and an expanding addressable market, all remain intact. That said, our line of sight to get there is certainly evolving and I want to walk you through what we see. As we have shared, India is already delivering at the level we needed to support our annual guidance. We had hoped the demand we were seeing would convert to bookings and revenue, and it is.

North America also remains fundamentally strong. We have new customers, new orders and a healthy backlog of opportunity. However, we are navigating a supply chain situation with one of our large Tier-1 carriers that will shift some revenue we expected in Q2 into Q3. The supply chain situation is isolated to one specific component and is a timing issue, not a demand issue and not a relationship issue. We are working closely with the customer and relevant component vendors on a catch-up plan. This expected shift does not lead us to modify or our previous revenue guidance for 2026 of $355 million to $385 million.

Our operating model has some built-in flexibility to absorb the unexpected. Carrier shifts are a known dynamic in our business, and we plan for it. What makes Q2 uniquely challenging is that the timing of the expected North America revenue shortfall coincides with a surge in India revenue that while welcome, naturally carries lower margins. The result is that our second quarter revenue mix will likely be more heavily weighted towards India than we would normally see and that mix shift alone is expected to create pressure on gross margins.

Looking into the back half of the year, based on what we see today, we expect North America to rebound strongly in the third quarter as the supply stream improves, the mix normalizes and margins recover sequentially. Taken across both quarters, our current visibility suggests these dynamics should largely offset one another. As a public company that reports quarterly, we don't have the luxury of investors simply waiting for the natural offset to play out. So I wanted to walk through the moving pieces now while we still have time to frame them properly.

Looking deeper into the near term. In addition to the revenue mix dynamics I described, there are broader industry-wide cost headwinds that are not unique to Ceragon. As well as some negative foreign exchange trends that may put higher pressure on our profitability. Ronen will describe these issues in more detail in a bit. Nevertheless, the demand environment is strong, and our competitive position is improving. The full year revenue range of $355 million to $385 million we provided in January remains our target and we are executing against it.

With that I will turn over to Ronen.

Thank you, Doron, and good morning, everyone. Q1 2026 was another profitable quarter on a non-GAAP basis, with positive free cash flow of $2.8 million. To help you understand the results, I will be referring primarily to non-GAAP financials. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer investors to today's press release.

Let me now review the first quarter results. Revenues for the first quarter were $85 million, down 4.1% from $88.7 million in Q1 2025. Our strongest regions in terms of revenue for the quarter were North America and India at $31.3 million and $30 million, respectively. We had 3 customers in the first quarter that contributed more than 10% of our revenues. Gross profit for the first quarter on a non-GAAP basis was $30.6 million an increase of 3.1% compared to $29.7 million in Q1 2025. Our non-GAAP gross margin was 36% compared to non-GAAP gross margin of 33.5% in Q1 2025. Gross margin was positively impacted by geographical and product mixtures offset partially by some cost pressures, as mentioned previously by Doron.

Turning to operating expenses. Research and development expenses for the first quarter on a non-GAAP basis were $7.8 million, down from $8.1 million in Q1 2025. As a percentage of revenue, our non-GAAP R&D expenses were 9.1% in the first quarter the same as it was in the first quarter last year. Sales and marketing expenses for the first quarter on a non-GAAP basis were $13.4 million, up from $11.8 million in Q1 2025, reflecting an increased investment in private networks. As a percentage of revenue, sales and marketing expenses on a non-GAAP basis were 15.8% in the first quarter compared to 13.3% in the first quarter last year.

General and administrative expenses for the first quarter on a non-GAAP basis were $5.3 million compared to $5.4 million in Q1 2025. As a percentage of revenues, non-GAAP G&A expenses were 6.2% in the first quarter compared to 6% in the first quarter last year. Operating income for the first quarter on a non-GAAP basis was $4.2 million compared to $4.5 million for Q1 2025. As a percentage of revenues, non-GAAP operating income was 4.9% in the first quarter compared to 5.1% in the first quarter last year.

The reduction in operating income was also impacted by continued appreciation of the Israeli shekel versus the U.S. dollar. Financial and other expenses for the first quarter on a non-GAAP basis were $2.9 million as compared to $1 million in the first quarter last year. This quarter was negatively impacted by currency fluctuations, mainly from the Indian rupee. Our tax expenses for the first quarter on a non-GAAP basis were $0.6 million. Net income for the first quarter on a non-GAAP basis was $0.7 million or $0.01 per diluted share compared to $2.6 million or $0.03 per diluted share for Q1 2025.

As for our balance sheet, our cash position at the end of the first quarter was $39.2 million compared to $38.4 million at the end of 2025. Short-term loans at the end of Q1 2026 were $17.1 million compared to $19 million at the end of 2025. Thus, at the end of the first quarter, we had a net positive cash position of $22.1 million. as compared to a net cash position of $19.4 million at the end of 2025. We believe we have cash and facilities that are sufficient for operations and working capital needs.

Our inventory at the end of the first quarter was $56.5 million, down from $61.6 million at the end of 2025. Our trade receivables at the end of the first quarter were $94.4 million, down from $99.7 million at the end of 2025. Our DSO now stands at 103 days. With respect to our cash flow. Net cash flow generated by operations and investing activities was $2.8 million in the first quarter and negative $1.4 million in Q1 2025, excluding the cost of acquisition of E2E.

Turning to our 2026 guidance. As Doron mentioned, we reiterate our 2026 revenue guidance of $355 million to $385 million. On the margins and the profitability side, there are some moving parts, as mentioned previously by Doron. I would now like to provide more insights into these challenges. Generally speaking, there are a number of factors that affect our gross margin. The first factor is geographical and product mixture. The second is cost headwinds and the third is foreign exchange impact.

Regarding mixture, as Doron mentioned, India will be an abnormally higher percentage of revenue in Q2 versus North America, due to the component issue for the North American carrier, temporarily depressing gross margin percentage for that quarter. In Q3, we expect this revenue trend to reverse itself and gross margins to rebound accordingly, offsetting the depressed gross margin in Q2. Several cost headwinds are affecting the overall industry and not specific to just Ceragon. Memory pricing continues to rise across the technology landscape. Copper and metals costs are elevated and freight costs remain high, in part due to the ongoing situation in the Strait of Hormuz. These are real headwinds, and we are actively working to mitigate them. We expect our initiatives addressing these cost pressures to begin taking effect in Q3.

Exchange rate fluctuations related to the Israeli shekel and Indian rupee versus the U.S. dollars have recently negatively impacted our profitability. Regarding the strength of the Israeli shekel, when we provided guidance in January, we were transparent that foreign exchange is an area we would monitor closely throughout the year. The dynamics since then have not moved in our favor. The Israeli shekel has continued to strengthen against the dollar. However, due to our hedging policy, we are able to partially mitigate the exposure and reduce the negative foreign exchange impact. The Indian rupee weakness is predominantly impacting our accounts receivable and increases our financial expenses on our income statement, also creating some incremental currency exposure in our receivables.

That said, we are still early in the year. Currencies can and do move in both directions, and we continue to take steps to reduce our exposure. We are not prepared to draw conclusions on the full year impact from here. but we wanted investors to have a clear picture of where things stand today. Given all these moving parts and the underlying business strength we anticipate, it is hard to predict the net impact on our profitability. And therefore, we are reiterating our margin targets for 2026, namely a 1 percentage point improvement in non-GAAP gross margin and non-GAAP operating margin of 6.5% to 7.5%, both at the midpoint of our provided revenue range for 2026.

That concludes my prepared remarks, and I'd like now to turn the call back over to Doron for any remaining comments. Doron?

Thanks, Ronen. We are encouraged by the underlying demand across many of our core markets. Combined with our expanding product portfolio and new customer interest, we believe Ceragon is positioned to continue executing on our strategy and creating value. If we focus on the elements, initiatives and factors we control and our operations, in general, our competitive position is stronger today than it has been in the past. We strongly believe that the challenges we face in terms of geographic mix and the impact on margins and foreign currency headwinds are largely nonoperational and temporary in nature.

With that, I'll now open the call for questions.

[Operator Instructions] Our first question is from Scott Searle from ROTH Capital.

Doron, really nice job in a difficult operating environment in the first quarter. Maybe to dive in quickly in the second quarter outlook, it sounds like certainly you're going to see some margin pressure from mix. I'm wondering if you could provide a little bit more color after the 36% that you reported in the first quarter. And then also from a revenue standpoint, it sounds like you'll have another strong quarter in India. I'm just wondering sequentially how you're seeing the cadence and progression of revenue from the first quarter to the second quarter? And then I had a follow-up.

So first of all, I would generally speaking, say that the level of confidence we have in the revenue is obviously increasing as we get the orders predominantly for -- from India. As we mentioned on the call, in Q2, we expect a very strong quarter in terms of revenue from India because of the pace of the rollout that they are expecting.

And this would be, I would say, significantly higher in terms of ratio between India and North America because of this small temporary issue of the component for the products that are being sold in India. Generally speaking, I think that the numbers we believe we will see are not that different in terms of our projection, it will only kind of be a shift of mix between Q2 and Q3.

Ronen, do you want to add to that, please?

Yes. As I mentioned in my prepared remarks, there are a few factors that impact the profitability. We have done $85 million in Q1, and our guidance on average for the next 3 quarters is above that. So first of all, the level of revenues that is expected to increase is supporting increased incrementally increasing the gross margins.

On the other hand, there is the mixture. Geographical mixture will -- is expected to hit us in Q2, as we mentioned, because of the challenge that we have in the temporary challenge that we have in North America. So if there is a mixture that is not favorable, it can take a few points from our gross margin. And this is the second factor.

The third factor is, as I mentioned, the cost pressure in different areas. We are doing a lot to mitigate that. Some of it will not yet take full impact in Q2, some of it will take more impact in the next quarters. But therefore, there is going to be a kind of a reduction in the gross margin -- expected reduction in the gross margin in Q2 which is going to be compensated, we expect it to be compensated in Q3. Summarizing everything, I think that the overall year is expected still to be within the targets that we set.

Scott, just to a lot of words, but the bottom line is very simple. In terms of revenue trajectory, we feel comfortable with a model that will continue to see growth in revenue quarter-over-quarter.

In terms of gross margin, we expect higher pressure in Q2 is significantly in Q3. So if you look at both quarters, Q2 and Q3 together, they will basically even out versus the gross margins we are projecting.

Great. Very helpful. And if I could just follow up on the cost front. I know shekel has been posing some headwinds. You guys have been making some significant investment in new products. I'm wondering does that change how you approach that?

And then second, certainly, with Nokia's intention to divest their wireless transmission business, it's created some dislocation in the marketplace. I'm wondering what you guys are seeing on the positive front for that, both in India and Europe? And then I'll get back in the queue.

So on the first question, yes, the Israeli shekel is having a negative impact. It's not dramatic, especially as there are movements in various areas, but still, it has an impact. Hopefully, it can go up and down. So we already provided some guidance on that at the beginning of the year. it's not really impacting dramatically our plans.

On the situation that is actually evolving as a result of Nokia's announcement I would say the following. We see a higher or stronger level of engagement with many customers that are basically potential customers to us and are not or were not customers of Ceragon in the last -- at least in the last couple of years, predominantly in Europe. And in some cases where there is some sort of overlap between Nokia and Ceragon, the easy decision in that case is to just buy more from Ceragon.

And this has already manifested itself at least in 1 or 2 use cases that I am aware of. I think that the general sentiment of the market speaking with customers is some sort of a wait and see who is going to be the buyer, and that can also affect the decision. There are operators that have already decided to move forward with us. And I think this decision is kind of accelerating, given the fact that Nokia has decided to sell.

So all in all, for us, it's positive. I would say that we see this phenomena in the strongest way in Europe now because in North America and in India, our position is very strong anyway. And I assume that this will also be seen in other countries, predominantly in APAC.

Our next question is from Ryan Koontz from Needham.

I want to ask you about your supply chain challenge here impacting North America in Q2. Can you give us some more color there? I assume this is a semiconductor. Is it a digital or a mixed signal type semiconductor? Anything you can share with us about that?

So first of all, it's a semiconductor. The situation is interesting to a certain degree because it's associated with the -- to a certain degree, with the geopolitical environment that all of us around the world have been facing in the last couple of months. What has happened is that in midst of 2025, we saw a spike in the demand for this particular product that we are selling.

And obviously, as a result of that, we started a procurement process the way we used to do and we did many times in the past. The uniqueness of this situation is that this particular semiconductor is also being used in other industries that are very much influenced by the geopolitical situation, and it impacts in 2 ways. First of all, there was a surge in demand for this particular component that led to longer lead times than what we usually saw in the past.

And second, and as importantly, in order for the vendor to sell this component in most cases, they need to get an export license. And export licenses now processes are also lingering due to the geopolitical situation. So all in all, while we were expecting a smooth delivery on our end, and we started the process very long time ago, taking into account what the regular time lines, it takes the situation has created a delay. And I think that at this point, we are much more optimistic because we basically escalated this topic to the executive levels, and we are basically working in collaboration between the executives of our customer and the executives of our vendors so that we put a lot of, lot of focus to basically advance the processes and the delivery time lines. So we are altogether trying to meet the customer rollout plan without any damage.

So I think I see a better line of sight for resolution to this situation. And as we said, this is the reason why we believe that if Q2, as we said, is probably going to be a little bit weaker for North America, this will be largely compensated in Q3.

Perfect. That's really helpful and fascinating to think about. Maybe shifting gears to your emerging North America Tier-1 and the progress on maybe give some more color on the 28 gigahertz product, kind of where that product is with regards to POCs and customer trials and how you're thinking about that opportunity going forward?

So this product is actually a new product, leveraging Wi-Fi 7 technology to serve our customers in high frequencies, what I would call FR2 frequencies based on 3GPP, but with a much more compelling cost structure. The first case -- the first use case is indeed with this North American Tier-1 operator. And as we have passed the first POC, there's a lot of discussion with this carrier as well as other carriers and ISPs in both North America and in Europe about the future of this product.

And one of the main use cases that is being discussed as we speak is a fixed wireless access point to multipoint solution that we can come with the initial product probably within a year or even less once we agree on the next step on the road map. So for us, it's opening a door, a bigger door in terms of fixed wireless access. And the idea behind this product is that it can do a great job on the one hand, but in terms of cost effectiveness and ROI, it's by far better than legacy 5G solutions that are by far more expensive.

That makes perfect sense. And just to reiterate, you sound pretty confident in the Tier-1 progress and seeing some revenue entering '27, do you think for that opportunity?

Yes, the current, so to speak, upcoming milestones are such that we expect to see a significant order probably in Q3. And this order will start serving as a significant revenue in 2027.

Our next question is from Tyler Burmeister from Lake Street.

Can you hear me all right?

Yes.

I'll just ask a few questions here. Maybe first to start with the strong bookings in India so far year-to-date, wondering if that has any positive impact on your $100 million kind of baseline outlook for that region this year?

And then sticking with India, maybe 2-parter here. Just wonder if any progress update you can give with the RFP from that third Tier-1 customer in India? Any update on the view of timing of a potential award decision there?

Yes. So as we basically said in the prepared comments, obviously, the accumulation of the $86 million and actually, since then, we've continued receiving more is building the confidence that the floor, what I would call the floor in our guidance, which is around $100 million of revenue for this year, maybe even slightly higher is quite secured. We still expect to see more orders from the 2 customers in Q3 and Q4. And given the strong start and the demand to pace up the execution and the delivery gives us confidence that or higher or much higher confidence that we can meet this floor number and maybe even exceed it.

As to the third player, the situation is a bit tricky because this is a government owned operator, and it's driven predominantly by government, so to speak, clerks and authorities, and it's very unclear when they will come back to discuss this RFP. And when talking to them, they are still optimistic that this will happen in the coming months. But at least at this point, with the strength coming from other customers, I feel that we don't really need this business for 2026 revenue. That's my most updated assessment. So if indeed this happens, it will be on top of. And if it's just booking because of the late or the time it will take them to issue the RFP and indeed, we win, it will be a good starting point for 2027.

That sounds great. Maybe if I can ask a question, the other regions outside your North America and India large region, just wondering any color on how demand is shaping up there versus maybe a quarter ago? Obviously, war impacts the Middle East but any other regional demand color would be great.

So if I need to kind of mention one region that I feel that we are making very nice progress. It's EMEA. It's driven predominantly by the business in Europe. As I said, we see a lot of new opportunities coming up in different stages. In some of them, I believe that we'll even be able to start seeing orders in this year, probably during the second half of the year.

And generally speaking, when I'm looking top down at the numbers in EMEA and also looking at the forecast coming from EMEA for Q2 and Q3, I'm quite confident that EMEA will have a record year in 2026.

That's great. Last one for me. Just on the cost profiles here. You talked about taking cost control actions taking effect in Q3. Just wondering on the OpEx line, absent any additional ForEx movement, how we should think about OpEx in the second half? Could that be flat, maybe even down compared to the first half?

No, I don't think it will be down the OpEx. The OpEx is expected if the exchange rates are where it is, it is expected to be a little bit higher. Obviously, there are also in the sales and marketing specifically. There are some certain areas which are variable. So the more we progress in the year, you will see some variable going up.

So I would say that operating expenses might be slightly higher along the year due to both things that I just mentioned. But all in all, we are looking at things, and we align our expenses based on how we see the full picture targeting to meet our targets in the operating margin.

Our next question is from Gunther Karger.

Gunther, we cannot hear you. You are probably on mute.

Yes, please unmute.

Here we go. Okay. Can you hear me now?

Yes.

Yes, Gunther.

Very good results. I bring up a non-operational question that needs to be raised. You're doing a fantastic job operationally. But what, if anything, different are you doing for the shareholders?

Gunther, this is actually an open question that I can spend an hour answering it, but let me try to be precise and concrete.

First of all, in our industry, we need to deliver. People who decided to invest in the telco equipment industry, know usually, the challenges and the , so to speak, risks. I believe that with the new strategy and with the fact that the competitive landscape in my personal view is weakening probably for the first time in a very long time, the chances that the value that Ceragon can generate to its shareholders are. Will increase are much higher. And obviously, beyond the operational excellence, we are not sitting idle, looking for new opportunities in terms of mergers and acquisitions and also with the recruitment of our Chief Technology Officer, there's a list of initiatives and ideas that we intend to discuss and decide if they are part of our strategy for the future. that can even put us in a better position in this domain and maybe even take us to other markets beyond the telco.

And obviously, once it's so to speak, something that we have decided and we can discuss, we will discuss with the capital markets. So there's a lot of things that are being done beyond just operation and trying to excel in this. And when the time comes, we will for sure share that with the investors community.

[Operator Instructions] There are no further questions. I'm handing the call back to you to close.

So thank you so much for participating in this call, and have a good day, everyone.

Ladies and gentlemen, thank you for standing by and welcome to Ceragon Networks Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] I must advise you that this call is being recorded. I'd now like to hand over the call to our first speaker today, Rob Fink, Head of Investor Relations. Rob, please go ahead.

Thank you, operator, and good morning, everyone. Hosting today's call is Doron Arazi, Ceragon's Chief Executive Officer; and Ronen Stein, Chief Financial Officer. Before we start, please note that today's discussion includes forward-looking statements within the meaning of the Securities Act of 1933 as amended Securities Exchange Act of 1934 as amended and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, projected financial performance, future initiatives, business outlook, development efforts, anticipated results, time lines and other matters.

Forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, among other things, global and regional economic admissions, conditions in Israel in the region, fluctuations in exchange rate, customer concentration, ordering patterns, and supply chain challenges as further detailed in Ceragon's most recent annual report on Form 20-F and other documents filed with the Securities and Exchange Commission.

Forward-looking statements are accurate only as of the date they are made, and Ceragon undertakes no obligation to update them. Ceragon's public filings are available on the Securities and Exchange Commission's website at sec.gov and on Ceragon's website at ceragon.com.

Also, today's call will include certain non-GAAP measures. For a reconciliation between GAAP and non-GAAP results, please see the table attached to the press release issued earlier today, which is posted in the Investor Relations section of Ceragon's website.

With that, I will now turn the call over to Doron. Doron., the call is yours.

Thank you. Good morning, everyone. As expected, the results we are reporting today align with the preliminary results we shared in January. For the full year, revenue was $338.7 million, and non-GAAP EPS was $0.09. We ended the year with $38.4 million in cash and equivalents and a net cash position of $19.4 million, up from a net cash position of $10.1 million at the end of 2024. Our balance sheet improvement reflects disciplined execution and stronger cash generation over the course of the year. Given that we provided a detailed update in January today, I'll focus on confirming execution and discuss what we are seeing early in 2026.

Our view on 2026 is unchanged from a month ago. Early activity in the year supports our confidence that we remain on track with the outlook we shared in January. Execution in North America continues to be solid, supported by CSP activity, and we see numerous emerging private network opportunities. In India, activity continues to track at the run rate we discussed with early bookings in the year, reinforcing our confidence in the base level of demand. We are not seeing anything today that changes our business view of the year or introduces new dynamics relative to what we previously discussed.

In 2026, we plan to launch 4 new products with some expected to generate initial revenue this year. These launches are driven by clear recently observed demand in our addressable markets and aligned with tangible revenue opportunities. Our R&D and go-to-market investments remain focused on execution, differentiation and conversion. We continue to prioritize opportunities where we see clear potential customer demand and a path to revenue. Mobile World Congress in March is an important industry event for Ceragon and for the broader ecosystem. We will be showcasing several products we plan to introduce in 2026 and the level of inbound interest and meeting activity heading into the show has been strong.

Historically, NWC has been a meaningful demand generation event for us, helping convert customer engagement into trials and over time, revenue. We expect it to be a constructive commercial catalyst again this year. Based on our current visibility, we are reiterating our full year 2026 revenue guidance of $355 million to $385 million. This guidance is based on us advancing our backlog in North America assumes a baseline of 100 million in annualized revenue from India and additional demand from our 2 existing customers, potential timely RFP wins and reasonable recoveries in other regions.

I would like to give 1 brief example of how execution is showing up in the private network space. We recently booked a multimillion dollar private network order in APAC with an electricity transmission utility following a competitive win announced last year. The award reflects our ability to deliver a full turnkey solution and provides both near-term revenue in 2026 and long-term expansion potential as additional sites are deployed. This represents how private network opportunities are moving from pipeline to backlog and into revenue.

In summary, we are focused on execution, not reinvention. We delivered results in line with what we communicated in January. Our outlook for 2026 remains intact and early activity in the year supports our confidence in continued progress on revenue cadence, margins and cash generation.

With that, I'll now turn the call over to our CFO, Ronen Stein, to review the financial results in greater detail.

Thank you, Doron, and good morning, everyone. Q4 2025 was another profitable quarter on a non-GAAP basis, with positive free cash flow in excess of $7 million. To help you understand the results, I will be referring primarily to non-GAAP financials. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer investors to today's press release.

Let's now review the fourth quarter results. Revenues for the fourth quarter were $82.3 million down 23% from $106.9 million in Q4 2024. Our strongest regions in terms of revenue for the quarter were North America and India at $32.3 million and $24.7 million, respectively. We had 2 customers in the fourth quarter that contributed more than 10% of our revenues. Gross profit for the fourth quarter on a non-GAAP basis was $28.2 million, a decrease of 23.2% compared to $36.7 million in Q4 2024. Our non-GAAP gross margin was 34.3%, the same as the non-GAAP gross margin of 34.3% in Q4 2024.

Turning to operating expenses. As a reminder, the 2025 operating expenses include the impact of it, whereas last year's results do not. Research and development expenses for the fourth quarter on a non-GAAP basis were $7.7 million, down from $8.8 million in Q4 2024. As a percentage of revenue, our non-GAAP R&D expenses were 9.3% in the fourth quarter compared to 8.2% in the fourth quarter last year. Sales and marketing expenses for the fourth quarter on a non-GAAP basis were $11.4 million, up from $10.6 million in Q4 2024.

As a percentage of revenue, sales and marketing expenses on a non-GAAP basis were 13.8% in the fourth quarter compared to 9.9% in the fourth quarter last year. General and administrative expenses for the fourth quarter on a non-GAAP basis were $5.8 million compared to $5.1 million in Q4 2024. As a percentage of revenues, non-GAAP G&A expenses were 7% in the fourth quarter compared to 4.8% in the fourth quarter last year. Operating income for the fourth quarter on a non-GAAP basis was $3.4 million compared to $12.2 million for Q4 2024.

As a percentage of revenues, non-GAAP operating income was 4.2% in the fourth quarter compared to 11.4% in the fourth quarter last year. Financial and other expenses for the fourth quarter on a non-GAAP basis were $1.4 million as compared to $3.5 million in the fourth quarter last year. Our tax expenses for the fourth quarter on a non-GAAP basis were $0.6 million. Net income for the fourth quarter on a non-GAAP basis was $1.4 million or $0.02 per diluted share compared to $7.7 million or $0.09 per diluted share for Q4 2024.

Turning to our full year results. Revenues were $338.7 million, a decline of 14.1% from $394.2 million in 2024. Gross profit for 2025 on a non-GAAP basis was $116.8 million, a decrease of 15.5% compared to $138.2 million in 2024. Our non-GAAP gross margin was 34.5% compared with gross margin of 35.1% in 2024. Operating income for 2025 on a nonGAbasis was $18 million compared to $48.8 million in 2024. As a percentage of revenue, non-GAAP operating income was 5.3% in 2025 compared to 12.4% in 2024. Net income for 2025 on a non-GAAP basis was $8.2 million or $0.09 per diluted share compared to $36.4 million or $0.41 per diluted share in 2024.

As for our balance sheet, our cash position at the end of was $38.4 million compared to $35.3 million at the end of 2024. Short-term loans at the end of were $19 million compared to $25.2 million at the end of 2024. Thus, at the end of 2025, we had a net positive cash position of $19.4 million as compared to a net cash position of $10.1 million at the end of 2024. We believe we have cash and facilities that are sufficient for operations and working capital needs.

Our inventory at the end of 2025 was $61.6 million, up slightly from $59.7 million at the end of 2024. Our trade receivables at the end of 2025 were $99.7 million down significantly from $149.6 million at the end of 2024. Our DSO now stands at 107 days. With respect to our cash flow, Net cash flow generated by operations and investing activities was $7.3 million in Q4 2025 and $15.1 million in 2025 excluding the cost of acquisition of Italy.

Turning to our 2026 guidance. As Doron reiterated, we expect 2026 revenue to be between $355 million and $385 million, consistent with the guided revenues range we shared in early January. We also see an improvement of approximately 1 percentage point in our non-GAAP gross margin at the midpoint of our provided revenue range, primarily driven by improved revenue mix between North America and India as well as additional cost reduction initiatives we are working on. This effort also includes a plan to overcome the recent spike in the price of memory components in the market.

All in all, we expect our non-GAAP operating margin for 2026 to be between 6.5% to 7.5% at the midpoint of the revenue range. This margin outlook reflects the currency assumptions established in general, and we will closely monitor and evaluate currency fluctuations as the year progresses. That concludes my prepared remarks, and I'd like to now turn the call back over to Doron for any remaining comments. Doron?

Thanks, Ronen. In closing, we continue to see steady traction across our markets, reflected in customer engagement, awards and initial orders. Our priorities in 2026 are clear, execute on conversion, improve revenue cadence and continue strengthening profitability and cash generation. We are reiterating our 2026 revenue guidance and we believe our balance sheet strength gives us the flexibility to invest behind highest ROI opportunities while remaining disciplined on capital allocation. With that, I'll now open the call for questions. .

[Operator Instructions]. Our first question comes from Christian Schwab from Craig-Hallum.

Great. I just have 1 question. Doron, what would be needed to hit the high end of your '26 guidance? Would that be stronger strength in North America, given that the backlog is materially greater than where we started last year. Would that be India coming in a little bit better or geographically, would it be a different area. Just looking for what you're thinking about the 1 or 2 things that we can monitor that might get us towards the high end of the guidance.

Thanks, Christian, for this question. Actually, I see various scenarios where we can reach the high end of the range. Obviously, it could be a combination of both and -- but I can also see a situation where we get to the high end of the range by only having 1 of the regions being strong. I would say that in essence, we need North America and India to be relatively stronger. And obviously, with some recovery, we expect in other regions, we can get to this high end of the range. I don't think it's beyond reach. .

Our next question is from Scott Searle from ROTH Capital.

Maybe just quickly in terms of just some of the financial management, Ronen, could you talk about dollar to shekel issues and how you guys are handling that? And what kind of challenges that poses? And then, Doron, just in terms of the update, it's nice that nothing has changed, and it sounds like it's on the margin getting a little bit better from the January update. But in terms of the first half outlook versus the second half, kind of how are you seeing the balance right now?

And given some of the orders that have started to come in and where the backlog is, how are you feeling about traditional seasonality in the first quarter in the first half? And then I had a follow-up.

Scott. Thank you for the question. I'll start with the issue of the foreign exchange. We are monitoring that, and we have a hedging policy. So we are hedged. The longer the period is we are less hedged at this point, but we continue to monitor that. I would say as a rule of thumb that on an annualized basis, any 1% change would take 0.1% on an annualized basis from our operating margin. But we continue to monitor that with a combination of hedging and this is where we are. Hopefully, we do have enough time also for changes in the ForEx also to the other direction.

Scott, to your second question. Yes. We started the year with a relatively strong booking. But obviously, it's not something that usually impacts the same current quarter that dramatically. And we do believe that Q1 in terms of revenue will take into account the regular seasonality we've seen and maybe some delays in orders that were supposed to come in Q4, but were only received in Q1. I think that I still believe that the second part of the year will be much stronger than the first part, but I'm very much encouraged by the business that has already come from India and supposedly also coming in the upcoming months or so.

This increased our level of confidence in the -- at least in the low end of the range for India very much, which is very encouraging.

Very helpful. And if I could just follow up, private network win in Asia Pacific is interesting because I think most of the activity has been North American-focused and European focused. I'm wondering if you could comment in terms of the level of activity that's going on in that region for private networks and kind of the magnitude of some of those opportunities? Are they bigger? Are they smaller? How quickly do they deploy just in terms of some of the characteristics around it. And then if I could just put on the back end of that, looking at point-to-multipoint solutions available in new frequencies, how is just the general tone there for Siklu in some of these other bands, be it India and/or North America?

Sure. So let's start by saying that in private network, we see multiple opportunities basically in all regions. Obviously, taking more of a staggered approach and making sure that we develop our business while still looking at the bottom line, we are putting more focus in certain regions as opposed to other regions. Particularly in APAC, there's many opportunities we see. We see opportunities in mining. Some of them were already won. We see opportunities in the energy business. And therefore, I'm quite encouraged by the number of opportunities we see in this region.

By the way, it's not only that region. We also see very nice opportunities in Europe and so on and so forth. So all in all, this is not a North America strategy. This is a global strategy that we execute on. And I'm quite encouraged by the progress, both in North America and in other regions. Referring to point-to-multipoint solution. So I would say that we see a few use cases that are creating the math for us, and I would even say that the demand is growing as the customers realize that this solution is probably the most cost-effective one.

So the 60 gigahertz point-to-multipoint product that was bought as part of the Siklu acquisition, is primarily getting traction in what I would call security and safety use cases. And that is something that we see globally.

The other use case that this particular product is kind of creating an increased level of interest is either small cell backhaul or fixed wireless access in certain areas where the distances are short, and it doesn't make sense economically to put anything but these boxes that are very small. And this is with regard to the 60 gigahertz.

We also see an increased demand and interest in basically similar product in FR2. And obviously, we are in advanced discussion with different customers about this potential business. And accordingly, we are moving forward in terms of research and development of this product. I believe that once we feel comfortable that demand is large enough and there we can basically come very fast in relative terms with such product in FR2.

Our next question is from Ryan Koontz from Needham.

Maybe focusing on your North America larger opportunities here. your major Tier 1 in North America. Can you maybe expand on what you see happening in that account for you in terms of budget and the competitive landscape and customers willingness to spend. It seems like kind of around press reports that the customer has been a relatively positive spending trajectory. Maybe you can expand on how you see your market opportunity with your big U.S. Tier 1.

So Ryan, thank you for this question. Look, generally speaking, we see the customer continuing to invest in their network. And obviously, we are also attentive to the news and publications that this customer is giving us. We know from the past that this customer has some so to speak, on trends or tendency to make short-term decisions, whether for much higher volumes or much lower volume.

So far, based on what we know today, we think that 2026 can be as good with this customer as 2025. One thing that is encouraging is that we basically see an opportunity that is materializing gradually for new use case with this customer which is around network resiliency or fiber backup. And if we will see some slowdown in the traditional rollout, this could augment the volume of the business to be similar to the average we've seen in previous years.

Helpful. And with regards to your second North American Tier 1, can you update us there on your progress and expectations for the year in terms of progressing with the trials, et cetera?

Look, we're moving forward, we're making progress. The level of engagement is very high. We are actually having weekly and biweekly follow-up discussion with the customer as they are looking into, so to speak, tuning the solution to be the best solution for their specific case. And in parallel, we are moving and discussing with the customer other opportunities. And generally speaking, I'm quite satisfied with the progress and with the level of intimacy we have created with this customer. .

That's great to hear. Maybe just 1 last 1 if I could get in. With regards to supply chain and memory costs, it sounds like you have some hardware cost reductions kind of moving through the process. How are you thinking about availability of memory? Any risk there around supply chain for this year? And what are you doing to compensate for the skyrocketing costs?

So, so far, the issue of the memory is more of a price issue rather than a supply issue. I hope that this remains the same. And we have a plan that is combined of building second and third source to our main vendor and some quick changes we can do in our products to basically accommodate for this situation while still having the performance of this product unheard and that's what we are doing. It will probably take us something like a quarter or so, but this is something that we are on top of and obviously watching closely the evolution and the development in the market. .

Our next question is from Theodore O'Neill from Hills Research.

Doron, I was wondering if you could give us some color on how you're able to improve accounts receivable by 30% year-on-year?

Well, I will hand over this to Ronen because this is something that is on his shoulder and he was doing an amazing job. So Ronen, please go ahead. .

So Theodore, Thank you for the question, and good morning. We have done a lot of work in with customers, mainly in India to improve and catch up on payments. As you know, India is sometimes a challenge. And it's a lot of focus, a lot of focus and follow-ups to ensure that we reduce it whether with new projects and improving the DSO in new projects as well as older projects. .

Okay. And a follow-up question here on the memory costs. Just what could the impact be financially? I mean I can't believe it's a huge part of the build for your equipment, but just can you give us a sort of a 30,000-foot view in terms of the dollar impact, say, if memory prices stay where they are relative to where they've been in the past?

I don't think it's material enough, and we don't want to disclose exactly because it discloses information that is competitive -- as competitive implications. It's not material enough. And with our plans to mitigate this challenge. I don't think it's something that we need to disclose exact numbers. .

Okay. There are no further questions. Doron, I'd like to hand back to you for closing remarks.

So thank you, everyone, for joining this call. Those who are planning to be in MWC, please come and visit us in our booth, and I wish a good day to everyone. Thank you.

Ladies and gentlemen, thank you for standing by, and welcome to the Ceragon business update. [Operator Instructions] I must advise that this call is being recorded. I now would like to hand over the call to our first speaker, Rob Fink, Head of Investor Relations. Rob, please go ahead.

Thank you, operator. Before we begin today, please note that today's discussion includes forward-looking statements within the meaning of the Securities Act of 1933, as amended, Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, projected financial performance, future initiatives, business outlook, development efforts, anticipated results, time lines, and other matters.

Forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, among others, global and regional economic conditions, conditions in Israel and the region, customer concentration and ordering patterns and supply chain challenges as further detailed in Ceragon's most recent annual report on Form 20-F and other documents that are filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and Ceragon undertakes no obligation to update them.

Ceragon's public filings are available on the Securities and Exchange Commission's website at sec.gov and also on Ceragon's website at ceragon.com.

With that, I will now turn the call over Doron. Doron, the call is yours.

Thank you, Rob, and thank you, everyone, for joining on short notice. This morning, we disclosed preliminary Q4 revenue and outlook for 2026, and we wanted to take the opportunity to provide context on what we are currently seeing in our business and to share more details pertaining to our outlook for 2026 ahead of the upcoming Needham Conference. Before I get into our outlook for 2026, I'll start with a brief update on Q4.

In the final weeks of the quarter, a single large North American customer shifted a portion of deliveries that had been scheduled to be delivered within December into 2026. This directly impacted Q4 revenue versus our prior assumption. Our current expectation is that fourth quarter revenue will be in the range of $81 million to $83 million. Although the previous guidance we shared with the capital markets already accounted for potential variability from this customer based on prior experience, the magnitude of the shift was larger than what we had embedded in our assumptions.

Importantly, this was exclusively a timing matter. The underlying demand from this important customer continues to be strong. This is reinforced by the fact we received additional new orders of significant value from this customer in Q4, while orders in our backlog remained intact. In fact, the timing shift increased our backlog entering 2026, and we are actively coordinating delivery plans with the customer. We expect most of this revenue to be recognized during 2026.

More broadly, bookings in North America remained strong in Q4. As a result, our North America backlog exiting 2025 almost doubled compared to the level at the end of 2024. In general, in Q4, we continued making progress in expanding our presence with private networks, increasing our penetration within existing CSP customers and strengthening our position with new customers globally, including opportunities beyond our historical focus areas. In fact, during 2025, we have added more than 30 new customers, of which over 75% were private network customers. The momentum we are seeing reinforces one of our ultimate goals in our strategy, to reduce customer concentration and the associated impact a small number of large projects that can have meaningful swings in our periodical results.

This is a gradual transition, but the direction is clear. We are building a more diversified business with a resilient growth profile, aiming to improve visibility and stability over time. Reaching a critical mass of projects across a more diversified base will enable us to reduce the quarter-to-quarter variability of our project-oriented business.

Turning to full year 2026. We expect revenue to be in the range of $355 million to $385 million. Our revenue assumption is based on the conversion of the delayed deliveries from Q4 as well as the following conditions. In North America, we entered 2026 with a strong backlog and continued to make progress across both CSPs and private networks. Currently, we have multiple opportunities in advanced stages, and we anticipate converting them into new business in 2026. In India, we start 2026 with an annual revenue run rate of approximately $100 million, primarily driven by 2 main customers. We do see other opportunities to expand within these 2 customers, which would slightly increase our annual run rate. This incremental revenue is included in the low end of our guidance.

Since we are optimistic about winning a significant portion of other customers' RFPs that are expected to be awarded in India in the first half of 2026, we believe that India can contribute to more meaningful growth with such wins.

For the rest of the world, we are assuming a measured recovery in other regions. Timing of closure and execution of multiple opportunities can work both for us as well as against us, but we remain optimistic and are becoming more confident in our strategy. We intend to provide more details on our business model and profitability when we report our fourth quarter results in February. But at a high level, we assume the following for 2026: additional improvement of approximately 1 percentage point in our gross margin at the midpoint of our revenue range for the full year, primarily driven by improved revenue mix between North America and India as well as additional cost reduction initiatives we are working on.

On the OpEx side, the impact of the Israeli shekel exchange rate is expected to represent an approximate $5 million headwind should it remain similar to the average levels we have seen in recent month.

In general, we continue to invest in R&D and in sales and marketing based on the momentum we see in the market. We intend to launch 4 new products in 2026 and expect initial revenue from some of them this year. All of the product introductions are driven by specific demand we have recently seen in the addressable market, and are critical to our future growth as they are expected to be ahead of the competition and enable us to win evolving new use cases.

On the sales and marketing front, we have increased our investment, predominantly in regions where we see more growth opportunities. A significant portion of this increase is in variable compensation, and therefore, will be results driven. All in all, we expect our non-GAAP operating margin to be between 6.5% to 7.5% at midpoint of the revenue range or at 8% to 9% excluding the assumed Israeli shekel exchange rate impact. Generally speaking, when neutralizing the ForEx impact, we see a certain increase in our investments and expenses, but a large portion of this increase will be driven by shifting the budget between units and regions to focus on areas we believe will drive significantly better ROI.

In this respect, we have recently recruited a very accomplished Chief Technology Officer with vast experience in radio and chip domains, working for blue chip companies, recently on 6G research, to further strengthen our technology leadership.

In summary, we continue to navigate through near-term revenue timing volatility while building a more resilient and diversified growth profile. The pieces of our strategy are coming together. Our differentiated offerings are resonating with customers, and we are seeing positive traction across North America and other regions, evidenced by successful POCs, award declarations and initial orders.

While timing of closing deals as well as delivery schedules can still influence our revenue, we believe our outlook for 2026 reflects a stronger foundation of backlog in certain regions and continued progress in building stronger earnings profile.

Finally, together with the Board and as part of the development we see in our business environment and our performance, we also regularly discuss our capital allocation strategy. We intend to remain disciplined in our approach, prioritizing investments to accelerate the transformation I have discussed. At the same time, we continue to evaluate return on capital to shareholders and inorganic growth opportunities.

With that, I'd like to open the call for questions.

[Operator Instructions] Our first question will come from Scott Searle from ROTH Capital.

Doron, maybe just to start off, could you talk a little bit about immediate seasonality as we're going into the first quarter and first half of the year? It sounds like there're certainly a lot of positive elements that are going on, certainly to the upper end of the range. But when do you expect some of those to start to hit? And in terms of absolute sales, are we expecting things to be sequentially down as we go into the March quarter?

And as a follow-up on the OpEx front, I just want to clarify, the currency headwinds on the shekel, I think you quantified at $5 million. So is that in absolute dollars, the base case of OpEx being up $5 million versus 2025? Or is there going to be some other optimization that's in there that will, at the lower end of the range, from a sales perspective, reduce some of that OpEx? Just can you give us some idea about how we're thinking about it? I know you gave an operating margin target, but that's still a lot of variability given the revenue range for the year.

Okay. So thank you. I will start with the first question. We all know that usually Q1 tends to be seasonably lower. And I would probably think that this could be the case. I must tell you that with the large backlog we have in North America and with the other behavior of certain big customers, I don't think it will be prudent enough to give you a trend. Things might continue slipping in between quarters, and therefore, the bottom line is that I think we should account for certain seasonality, but it's very hard for me at this point to be more precise in this respect.

As to the second question, first of all, the $5 million is an assumption -- or not assumption, it's the analysis that is relevant to a full year as compared to 2025. And it means that, obviously, it goes both to the low end and also to the high end of the range. The only thing that could happen is that at a certain point of time, there will be a significant change in the ForEx, and based on our current policy, it could create some sort of an upside. At the same token, we see that the recent shekel is even slightly stronger. So this is a very basic assumption.

In terms of our ability in the OpEx generally speaking, as I said in my prepared notes, there's a big portion of our ability that is associated with predominantly booking and operating profit achievements. And obviously, that will move up or down within this range according to the actual achievements.

Okay. And Doron, maybe if I could quickly just follow up. Looking to the second half of this year, if you start off with traditional seasonality, there's still a pretty wide range out there. And given where consensus expectations are, it implies that you're getting up to $100 million or so a quarter in the third and fourth quarter. What's the biggest swing factor to make that move? Is it India? Is it continued strength with the North American customer? Or is it just a combination of items?

The bottom line is that it's a combination. I would even dare saying that our internal plans are even more aggressive. But we're trying to be very prudent because of the fact that the nature of our business is such that just because of a blink of an eye $4 million or $5 million could move from 1 quarter to another. And this is why we are taking a very prudent approach. I think that we are building on gradual improvement in all regions, but predominantly in North America as well as in India.

But let me add one thing. Generally, we have already communicated in previous calls that we have certain POCs and RFPs out there that we build on also in our growth and it takes time for them to convert. So obviously, if things goes well, it should convert also to the second half.

Our next question is from Christian Schwab from Craig-Hallum.

Great. As far as the gross margin expansion that we expect on a year-over-year basis, is that suggesting 1% growth? Does that mean we exit the year with a much better mix and gross margins above the 1%? Or is it pretty linear through the quarter? How should we think about that, Doron?

I think that -- it's Ronen. Thank you for the question. I think that the way to look at it is to look at the average that we had in the 9 months. And I don't want to yet predict or to give any forecast for Q4 at this stage. But to take the 9 months and our expectations for Q4 are not expected to materially change that, and then you can add to it the 1%. This is more or less how you have to look at it.

Just adding to the point you may have raised in terms of how it's going to spread between quarters. It's really driven by -- predominantly driven by 2 factors: the revenue level and the split between North America and India in terms of contribution to the revenue. So I don't think we have any more accurate answer than that, saying that, on average, this is what we expect for the year. And it might be slightly volatile based on the mix on each and every quarter.

Great. And then regarding backlog in North America, which has doubled versus '24, can you quantify the dollar amount of backlog that you have in North America currently for us?

We're not giving that number, and we don't intend to start giving it, at least not in the near term. All I can say that is -- it's significant, and this obviously drive part of the optimism about 2026.

Our next question is from Ryan Koontz from Needham.

I wanted to ask about the rationale for the pushout. I assume it's not a share issue. Is this more just about project execution from your customer or inventories or anything you can share at a high level about the pushout?

Yes. I think we said that very loud and clear on the prepared remarks. It's not anything that is associated with our very strong position in this customer. It's associated with internal decision that were made on the last minute, and more so, to the best of my understanding, it was not only applied on us, but it was applied on many other CapEx vendors due to some internal decision made by the leadership of this customer.

Got it. Really helpful. And then on the -- you mentioned the shift away from project-based business. Can you maybe expand on that, like how do you envision that change in the kind of the business model?

So to be more accurate, and maybe I take the blame here for not being that clear. We didn't say that we shift away from project because most of the nature of the business is project. What we said is that when we expand our outreach into private network segments, the nature of the projects in this domain are such that are creating more diversity. So it's -- these are sometimes smaller projects, I would say, in the million of dollars per project and the process of recognizing revenue and rolling out these project is longer and it includes a lot of services elements that is smoothening the recognition. And because of that, if we have more like that in our backlog and we are less dependent on a very large product-driven projects like we have today with the CSP domain, we still remain a project-oriented company, but at the same token, the diversity of customers will enable us to smooth our revenue recognition.

On top of that, when we go in this direction, we are also pushing very strongly to business models like managed services and connectivity as a service. And while this may create some headwind in terms of revenue in the first part of executing on such projects, this will also help us to smoothen our revenue recognition over time and by that reduce the volatility.

Super helpful, Doron. And the last one, if I could. Just any update on -- I know it's only been probably 1.5 months or 2 since Nokia's announcement, but any changes in the competitive landscape or field activities are picking up relative to the competitive landscape would be great.

I would just say that we are seeing some initial signs. I think that it will not be right for me to disclose what these signs are. But all in all, so far, I can see more positive than negative for Ceragon.

Our next question is from Gunther Karger.

Doron, we have no further questions. I'd like to hand the call back to you.

So thank you, everyone, for joining on such a short notice, and hope to see many of you in the Needham conference. Thank you so much.

Ladies and gentlemen, thank you for standing by, and welcome to Ceragon Networks Third Quarter 2025 Earnings Call. [Operator Instructions] I must advise you that this call is being recorded today. I would now like to hand over the call to our first speaker, Rob Fink, Head of Investor Relations. Rob, please go ahead.

Thank you, operator, and good morning, everyone. Hosting today's call is Doron Arazi, Ceragon's Chief Executive Officer, and Ronen Stein, Chief Financial Officer. Before we start, please note that today's discussion includes 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 Securities Litigation Reform Act of 1995. Ceragon intends forward-looking terminologies 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. Forward-looking statements are based on expectations that are subject to certain risks and uncertainties, which could cause actual results to differ materially. These results and uncertainties include, but are not limited to, the company's ability to execute strategic plans, marketing and product strategies on the forecasted evolution of market developments, such as market and territory trends, future use cases, business concept, technologies, future demand and necessary inventory levels.

The effect of geopolitical situation in Israel and the related regional conflicts. The effects of global economic trends, including rising inflation, rising interest rates, commodity prices, increases and fluctuations, commodity shortage and the exposure to economic slowdown, risks associated with integration and deployment of acquired businesses, risks associated with delays in the transition of 5G technologies and the 5G rollout risks relating to the concentration of Ceragon's business on a limited number of large mobile operators and the fact that the significant weight of their ordering is important compared to the overall ordering by other customers, coupled with inconsistent order patterns that could negatively affect the company, risks resulting from volatility in revenues, margins and working capital needs, disagreements with tax authorities, tax positions that have been taken as a result of increased tax liabilities. The high volatility in the supply chain of our customers, which from time-to-time lead to delivery issues and may lead to the company being unable to fulfill order commitments. And other risks, uncertainties and other factors that could affect operations 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 subsequently be filed by Ceragon from time to time with the Securities and Exchange Commission.

Forward-looking statements relate to the date initially made, and they are not predictions of future events or results, and there can be no assurance that they will provide accurate and Ceragon undertakes no obligations to update them. Ceragon public filings are available on the Securities and Commission's website at sec.gov and may also be obtained from Ceragon's website at ceragon.com. Also, today's call will include certain non-GAAP numbers. For a reconciliation between GAAP and non-GAAP results, please see the table attached to the press release that was issued earlier today, which is posted on the Investor Relations section of the company's website.

With that, I'll now turn the call over to Doron. Doron, the call is yours.

Thank you, Rob, and good morning, everyone. Ceragon delivered a solid third quarter, reflecting the resilience of our operations strengthening demand across key markets and continued progress against our strategic road map. Visibility improved meaningfully during the quarter with greater clarity around customer spending plans and project timing. That visibility has continued to strengthen in recent weeks, giving us confidence in our outlook for the remainder of this year and more importantly, optimism for growth in 2026. Revenue for the quarter was $85.5 million, above our expectations. Non-GAAP gross margin of 35% remained high and non-GAAP EPS was $0.02 but was negatively impacted by $0.02 foreign exchange fluctuation related to a project in India. Excluding this effect, EPS would have been approximately $0.04. Importantly, we generated free cash flow of $3.3 million, further demonstrating the strength and resilience of our business model. From a technology and market perspective, we are increasingly benefiting from the same structural forces reshaping communications networks globally.

The investment in AI is growing from data centers to 5G infrastructure, and this is driving the need for high-capacity, low-latency connectivity. This demand is cascading outward from the core to the metro and ultimately to the wireless edge. Our addressable market continues to grow, driven by 2 key challenges: Our customers face, network capacity and network resiliency. These 2 factors are being amplified by the growth of AI and increasingly data-intensive applications. Ceragon's capabilities, especially our E-Band and innovative point-to-multipoint offerings, provide tangible solutions to address these challenges and in our opinion, creating incremental opportunities for us and giving us durable tailwinds for future growth.

Our carrier customers need to add capacity, especially as data traffic continues to grow and as they attempt to gain market share in the fixed wireless access market. AI is also playing a major role in this increased demand, predominantly for enterprise connectivity. Ceragon's advanced E-Band solutions enable operators to replace or significantly augment legacy microwave deployments to increase capacity in an efficient and cost-effective way. As we noted in a recent press release, we recently completed 3 proof-of-concept E-Band deployments with Tier 1 operators and a leading ISP using auto aligning antennas and e-stabilizers, demonstrating our ability to boost network capacity, extend reach beyond standard E-Band solutions, accelerate deployments and lower total cost of ownership. At the same time, operators are placing greater emphasis on network resilience. Fiber alone cannot ensure continuity. Global operators are dealing with many fiber cuts and are looking for wireless transport to ensure flexibility and redundancy and to maximize network uptime.

And finally, operators are also exploring ways to support more subscribers. This includes fixed wireless access in residential areas and enterprise connectivity solutions requiring higher bandwidth. Some operators are conducting trials involving our 60 gigahertz technology, which provides fiber-like capacity over short distances with fast and economical deployment. Private networks face similar capacity and resiliency challenges. The use of AI, industrial automation and advanced video security applications, all demand higher bandwidth and greater reliability. Ceragon's 60 gigahertz point-to-multipoint platform addresses both requirements and is increasingly being used in smart city and enterprise environments. A notable example is the rollout of Phase 1 of a large smart city project in Latin America, which has the potential to generate approximately $7 million to $8 million of recurring revenue over multiple years. Another example involves an industry-leading global e-commerce company in the U.S. that is reevaluating its video security connectivity architecture. Its existing network is expensive, bandwidth limited and dependent on public infrastructure that cannot meet its reliability and latency requirements.

Ceragon's 60 gigahertz solution offers a cost-efficient, rapidly deployable and secure alternative that delivers fiber-like performance without the complexity or expense of fiber builds. We have already received an order for the initial deployment covering several dozen facilities and successful execution could pave the way for substantial expansion across hundreds of additional sites. Increasingly, our private network achievements are end-to-end solutions. Just recently, we were awarded as a prime contractor, 2 projects in the U.S. that involve deployments of private 5G and Wi-Fi technologies to create comprehensive end-to-end solutions. On the managed services and digital twin front, yesterday, we announced a contract with a major Colombian mobile operator that showcases our ability to provide end-to-end managed services in multi-vendor environments using our network digital twin for predictive maintenance. This win underscores Ceragon's expanding capabilities in network reliability and integration and our pipeline includes additional opportunities that can potentially increase our managed services business meaningfully.

In general, our new innovative products and services offerings, which are driven by the convergence of our core and recently acquired capabilities, open for us many new opportunities beyond traditional backhaul. I'm also proud of our ability to generate positive cash flow even under top line pressure. This underscores the resilience of our model and operational discipline. Importantly, our balance sheet remains solid, enabling us to -- the flexibility to pursue additional potential acquisitions, supported by the continued confidence and long-term relationship with our bank consortium.

Turning to a regional overview. North America again led our growth, delivering record revenue and booking of orders in the quarter, including E2E. This was primarily driven by accelerating deployments of a major Tier-1 customer. Additionally, we see growing engagement across carriers, ISPs and private networks. In India, revenue was flat compared with Q2. Importantly, visibility has increased as order flow from a major carrier whose purchasing activity had previously been paused has resumed. We are optimistic that this renewed activity with this carrier will continue and potentially accelerate once their debt issue is resolved. We also see other opportunities that can potentially drive significantly higher revenue than current levels in 2026. For example, we are pursuing a sizeable RFP from another major carrier in India. And if successful, this could provide meaningful incremental revenue in 2026.

Outside North America and India, results were generally stable and increased opportunities in EMEA and Latin America give us higher confidence for 2026, even if revenue and bookings were modestly softer for the quarter in some regions. In summary, the third quarter marked continued progress in executing our strategy with increasing opportunities in both CSPs and private networks segments. As near-term visibility has improved, we feel more confident about our $340 million revenue projection for 2025. With business volumes recovering and a mix shift toward more active North American market, we see continued opportunity for profitability expansion. Our financial discipline, combined with ongoing investment in our strategic initiatives, positions us to translate future top line growth into meaningful EPS improvement as we move into 2026.

With that, I'll now turn the call over to our CFO, Ronen Stein, to review the financial results in greater details.

Thank you, Doron, and good morning, everyone. As Doron described, we delivered solid revenue in the third quarter, particularly in North America. We continue to translate incremental revenue into higher profitability and sustainable cash generation, demonstrating the earnings power of our business model. To help you understand the results, I will be referring primarily to non-GAAP financials. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer investors to today's press release. Let me now review the third quarter results.

Revenue for the third quarter was $85.5 million, down 16.7% from $102.7 million in the third quarter of 2024. North America was the strongest region in terms of revenue and contributed $36 million including E2E. India contributed $24.4 million in Q3 2025 and was the second strongest region. We had 2 customers in the third quarter that contributed at least 10% of our revenue. Gross profit in the third quarter on a non-GAAP basis was $29.9 million, which was down 15.1% from $35.2 million in Q3 2024. Our non-GAAP gross margin was 35%, up slightly from the prior year period. The gross margin strength was mainly attributable to our success in North America.

Moving on to operating expenses. I'd again note that we have consolidated E2E into our results since February 2025, impacting also total operating expenses. Research and development expenses in Q3 2025 on a non-GAAP basis were $6.8 million, down from $8.6 million in Q3 2024. As a percentage of revenue, R&D expenses on a non-GAAP basis were 7.9% in the third quarter versus 8.4% in the prior year period. Sales and marketing expenses on a non-GAAP basis in the third quarter were $12 million, up from $10.4 million in Q3 2024. As a percentage of revenue, sales and marketing expenses on a non-GAAP basis were 14.1% in the third quarter as compared to 10.1% in the third quarter of 2024, mainly due to our increased business in North America and our continued strategic investments.

General and administrative expenses on a non-GAAP basis for the third quarter were $5.8 million as compared to $0.4 million in Q3 2024. Keep in mind that our G&A last year included the impact of a $5.1 million benefit related to an initial collection from a $12 million debt settlement agreement reached with a South American customer for which we accounted a credit loss at the end of 2022. As a percentage of revenue, G&A expenses on a non-GAAP basis were 6.8% in Q3 2025 versus 0.4% in the year-ago period. Operating income on a non-GAAP basis for the third quarter was $5.3 million versus operating income of $15.8 million in Q3 2024. The decline in operating income year-over-year was impacted by the absence of the $5.1 million credit loss recovery benefit, along with the reduction in gross profit, as mentioned before.

Financial and other expenses on a non-GAAP basis in the third quarter were $2.8 million compared to $1.2 million in the third quarter last year. As mentioned by Doron, the increase was negatively impacted mainly by a $1.5 million foreign exchange fluctuation related to a project in India. However, the quarterly average foreign exchange fluctuation impact in 2025 is currently lower than the 2024 average. Our tax expenses on a non-GAAP basis for the third quarter were $0.7 million. Non-GAAP net income for Q3 2025 was $1.7 million or $0.02 per diluted share, versus non-GAAP net income of $14.1 million or $0.16 per diluted share in Q3 2024. Without the negative impact of the foreign exchange rate, Q3 2025 non-GAAP EPS would have been $0.02 higher or $0.04 per diluted share.

Moving over to our balance sheet. Our cash position on September 30, 2025, was $43 million, up from $35.3 million at the end of 2024. Short-term loans were $31 million at the end of the third quarter compared to $25.2 million at the end of 2024. Thus, our net cash position was approximately net $12 million as opposed to $10.1 million on December 31, 2024, reflecting strong free cash flow in Q2 and Q3, partially offset by the acquisition of E2E. We believe we have cash and facilities that are sufficient for our operations and working capital needs. I'd note that we generated $3.3 million in free cash flow in the third quarter. This speaks to the progress we have made in our business model.

Inventory at the end of the third quarter was $58.4 million, down slightly from $59.7 million at the end of 2024. We continue to carefully monitor our inventory levels. Our trade receivables at the end of the third quarter were $111.9 million versus $149.6 million at the end of December 2024. Our DSO now stands at 112 days. Looking at our statement of cash flow. Net cash flow generated by operations and investing activities in Q3 2025 was $3.3 million.

I'd like to now turn the call back over to Doron to provide a summary and review our outlook. Doron?

Thanks, Ronen. I'm encouraged by the continued progress we are making strategically. The combination of our innovation and the capabilities gained through prior acquisitions has strengthened Ceragon's competitive edge. Our solutions deliver high throughput and low latency, that are crucial for today's AI-driven environment demand. Our strong financials enable continued cash generation, investments in R&D and sales and marketing, and funding strategic acquisitions. We are well-positioned for continued success.

Turning now to our outlook. With improving visibility, we have greater confidence today in our ability to achieve our target of $340 million in full-year revenue for 2025. Importantly, our momentum is increasing, and we are looking to 2026 with even greater optimism.

With that, I'll now open the call for questions.

[Operator Instructions] Our first question comes from Scott Searle from ROTH Capital.

Maybe to just start in initially on the outlook for the fourth quarter. You're maintaining the $340 million guidance, and implies basically flat to sequentially down, but it sounds like the tone of business is improving on that front. I wonder if you could give us some expanded thoughts in terms of what you're seeing sequentially, and what are the drivers? Is it still Tier-1s in North American private networks? Are you seeing India come back to drive that? And maybe as well, give us a quick preview of your thoughts as we enter 2026. Does 2026 look like a year where we should be getting back to growth, given a lot of the drivers and vectors you're talking about?

Thanks, Scott. I will start with the first question. So, we usually don't give specific guidance for a specific quarter, and this is why we basically gave the guidance the way we gave it. But I would say it very clearly. I am very optimistic about Q4 on a stand-alone basis. Main drivers, as we mentioned, are the strengthening, so to speak, visibility from India and from North America. This is for the very near-term. In terms of 2026, we are very much encouraged by the funnel of opportunities that we're able to build, especially during the last 6 to 9 months. And we see that all across regions. And that drives our optimism about our ability to grow in 2026. Many of the, so to speak, use cases I found important to mention in my prepared comments are actually indicating of relatively new businesses that Ceragon has not experienced in the past. And obviously, this drives the optimism. People may question, obviously, okay, is India going to be a major factor in your growth? Yes or no. The answer to that would be we think that we can grow in India relative to the current annual run rate, but we definitely build on growth in all other regions.

And if I could, just to follow up, a clarification on North America and the immediate outlook and early read on '26. It was up, I believe it's about 30% sequentially in the September quarter. Is that a comfortable and sustainable level? And then in your prepared remarks, you're talking a lot about AI, which is not something I've heard you refer to in the past. So obviously, it's been a derivative driver in terms of capacity utilization and data traffic in general. But are you seeing direct links then to vendors, data centers, and otherwise that are actually driving your direct business, or are these indirect drivers?

So first, in terms of North America, indeed, we mentioned an acceleration in the deployment coming from a Tier-1 operator as the major driver for the increased visibility. Would that particular Tier-1 operator continue with the same pace, we are not that sure. But still, our optimism about growth in 2026 is not just built on this operator. As we mentioned a few times in the past, we are seeing a stronger engagement with other Tier-1 operators in North America and also with ISPs and private networks. And this funnel of opportunities, assuming it will turn into bookings and revenue in the pace we believe it will contribute to growth in 2026 in North America as well.

Now regarding the AI, look, we have been doing a lot of thorough analysis of the markets as part of obviously looking on our strategy and trying to align it with some trends that we are seeing in the markets. What we do see is that, first of all, at enterprise level and also in areas of security, the usage of AI is becoming more imminent and more relevant such as video analysis and automation. This is one example. And eventually, that immediately requires by far, much more capacity with the ability to keep the level of latency at the minimal requirements. Just to give you an example, this opportunity that we started actually executing on in Latin America, they showed us how they use automation based on video analysis to create some, so to speak, command controls and to give automatic commands to certain functions in the city. So, it's there. It's happening. We see that more in private networks/enterprise business. And eventually, it drives much higher capacity needs and obviously, latency.

Our next question is from Ryan Koontz from Needham.

I want to ask about your Tier-1 ramp-up here in North America. Nice to see that. What do you think are their main drivers here? Is this mostly capacity upgrades from legacy microwave? Is it new coverage footprint for mobile? Is it fixed wireless? Any clues as to what's driving the strong uptick there from your big customer?

If I need to answer a very short answer to your question, it's all of the above. What we are seeing is a constant demand for higher capacity that is either driven by the continued increasing capacity needs as part of 5G. This particular operator is also very successful in getting more and more subscription on fixed wireless access. And eventually, that creates a bigger load in terms of capacity, and they are leveraging their very strong position in the market to cover some additional areas where it makes sense to them economically to build more coverage, either as part of their plans or as part of commitments that they have to the FCC.

Makes sense. Are you hearing any concerns in that regard about coverage of them using satellite direct-to-device type technologies to meet some of those SEC requirements?

I think that in terms of satellite or to be more specific LEO, our discussions with operators are just giving us, I would say, the understanding that this is another technology that helps giving a better service to the customers wherever they are, if they are in the very rural areas. And obviously, it's another augmenting technology that they use. In most cases, they are partnering with the satellite companies, and they don't see that as a necessary direct competition. And it is the same for our technology. The wireless technology, the more traditional, so to speak, wireless technology has its place and its advantages. And therefore, I would say that LEO is just another technology to make the world more connected and I would say, evenly digitized.

And maybe just one more, if I could, about what's going on with end-to-end, maybe an update there. Are you pleased with kind of commercial activity on private networks? And what your outlook is as you look ahead into the next -- into '26?

Yes. So, first of all, end-to-end is actually meeting the plans that we took into account as part of 2025 plans. And I would even they're saying that if not for the administration strikes in the U.S., we would probably be ahead of our plan in terms of booking. There's a lot of traction. There's a lot of sizable opportunities on the plate. Some of them are subject to some government approvals. And due to the strikes, it has been delayed. So, all in all, we are very satisfied with the progress of E2E. And I would even dare saying that we have started seeing the synergies by bringing this knowledge into the company in a way that we have some similar opportunities in other regions that we would probably not seriously participate if not for the knowledge that is being brought with the acquisition of E2E.

And maybe just want to wrap up. Any comments on supply chain as it relates to availability of parts and costs? And any new concerns that we've heard from other hardware vendors about DRAM costs ratcheting up pretty significantly, but any impact on your business?

So generally speaking, we have seen in certain areas, a slight increase in component costs. The model and the strategy of Ceragon in this respect is, I would say, a constant pressure and cost reduction efforts, whether it's tactical talking with vendors and trying to find a better commercial terms or whether it's more strategic by finding second sources and replacing certain components by other components that are cheaper. Generally speaking, we don't see this as a significant or significantly impacting our BOM cost in general, but we monitor that very closely. As to component scarcity, I don't think there is any particular issue at this point that I can describe as a trend or epidemic. But as a hardware company, there's always every now and then some shortages in components that I call them tactical, and this is part of the business. So, at this point, I don't see any major concern in this regard.

Our next question is from Christian Schwab from Craig-Hallum. Christian, please go ahead.

Hi Christian, Can you hear us?

Sorry about the unmute button I missed. I just have one quick question. I know you don't provide specific guidance, but I'm just trying to bracket what growth and optimism for '26 means. Should we broadly think about that as mid-single-digit growth? Or do you see an opportunity for top line growth? I'm just trying to gauge the expansion of visibility, India coming back and what that could potentially mean to top line estimates for '26. Any directional clarity as broad as you can give would be great.

Yeah. So, look, obviously, we are now in the midst of the annual operational planning for 2026. And we are not done yet. So, it's difficult for me to give you something that is very concrete at this point. And I must tell you that we see many scenarios. And obviously, we'll eventually have to pick the one that we believe that is the most probable scenario. At this point, just to be prudent, I would probably plan for mid-single digit. And I hope that we'll come with something that is better once we have finalized our AOP.

Our next question comes from Theodore O'Neill from Hills Research.

Doron, in your prepared remarks, you talked about the E-Band validation. And I'm wondering what's the expectation following that validation step?

So I would say that with most of the cases that we have already done proof of concept. And actually, we had another few of them that I didn't mention on the call. We are now in the process of finalizing the terms, the commercial terms and the demand. And I hope to start seeing orders either in this quarter or next quarter. So, I'm quite optimistic about seeing more revenues coming out of these new products in 2026.

And in your prepared remarks, you also talked about network resilience where microwave takes out the risk of fiber being cut. Are there specific places or customers that are looking for that as a solution?

Yes. So that's very interesting because I had an opportunity to visit some of our customers personally. And obviously, my salespeople and region heads did the same. And we see that as basically global phenomenon. We see that coming as an issue in North America. We see that coming as an issue in Asia-Pac and also in other regions. So, I think that eventually, it's not something that is very particular to a specific region. I would say that a solution which is basically building redundancy using wireless is one of the viable solutions that these operators are pursuing. There could be other solutions. The best or the -- I would say, the reason why wireless transport solution is being looked at very intensely is because it's relatively cheap and it's relatively reliable, and it gives an immediate solution for fiber cuts.

And my last question. One of your competitors cited a possible 5% impact on their business if the U.S. government shutdown continues. While it looks like it might pick up, it might go away, but it might come back in January. Is there a similar number that you're exposed to if the U.S. government is shut down again?

Look, up until now, the impact of the U.S. government shutdown was not that significant for us. And as I kind of hinted to in some of my comments, it has actually impacted predominantly in areas of private network. At this point, I don't see a very significant impact on Ceragon if that continues for longer-term, but we are obviously following very closely on the development in this respect.

[Operator Instructions] Our next question is from Gunther Karger.

Can I be heard now?

Yes.

Doron, is there any comment available regarding defense military security type business that's applicable to Ceragon worldwide?

Yeah. Look, generally speaking, we see quite many opportunities around defense and security. Security is actually one of the areas where we put a lot of focus because we have this 60 gigahertz point-to-multipoint product that is very strong for security use cases, predominantly video. But we're also working on opportunities that are for defense communication networks.

Is this comment applicable to regions or globally?

Look, when I'm trying to kind of scan in my head the funnel of opportunities, I don't think that there is a particular region where I see much higher concentration. So generally speaking, it's all over the place. In terms of security, I would dare saying that in some of the countries in Latin America, now that they want to improve the level of security, maybe the list of opportunities is slightly longer. But generally speaking, we see these kind of opportunities across the globe.

There are no further questions.

Okay. Thank you, everyone, and have a good day.