[Management View]
Ceragon Networks reported a revenue of $85.5 million, a decline from the previous year, but emphasized improved visibility and expanding project pipelines. The company highlighted strong performance in North America, driven by Tier 1 deployments and private network traction, while India’s order flow resumed, presenting growth potential for 2026. Management is optimistic about meeting 2025 financial targets and anticipates mid single-digit growth in 2026.

[Outlook]
Management reiterated confidence in achieving the $340 million full-year revenue target for 2025, citing improved visibility in North America and India. For 2026, growth is expected to be driven by expanded private network opportunities, AI-related demand, and new business wins, with guidance planning for mid single-digit growth as a prudent baseline.

[Financial Performance]
Revenue decreased by 16.7% YoY to $85.5 million, with North America contributing $36 million and India $24.4 million. Non-GAAP gross margin increased to 35%, attributed to success in North America. Non-GAAP operating income was $5.3 million, down from $15.8 million, impacted by the absence of a $5.1 million credit loss recovery benefit. Non-GAAP net income was $1.7 million, or $0.02 per diluted share, versus $141 million, or $0.16 per diluted share. Free cash flow was $3.3 million, supporting a net cash position of approximately $12 million.

[Q&A Highlights]
Question 1: Scott Searle from ROTH Capital asked about the drivers for maintaining the $340 million guidance and the outlook for 2026.
Answer: Doron Arazi expressed optimism for Q4, driven by visibility from India and North America. He highlighted new business opportunities and growth potential across regions for 2026.

Question 2: Scott Searle inquired about North America's growth and AI's impact on business.
Answer: Arazi noted strong engagement with Tier 1 operators, ISPs, and private networks in North America. He explained AI's role in increasing capacity needs, particularly in enterprise and security applications.

Question 3: Ryan Boyer Koontz from Needham asked about the drivers for Tier 1 ramp-up in North America.
Answer: Arazi stated that demand for higher capacity is driven by 5G, fixed wireless access, and coverage expansion. He mentioned satellite technology as a complementary solution.

Question 4: Ryan Boyer Koontz asked about E2E integration and supply chain concerns.
Answer: Arazi reported satisfaction with E2E's progress, despite delays from administrative strikes. He noted slight increases in component costs but no major supply chain issues.

Question 5: Christian David Schwab from Craig Hallum asked about growth expectations for 2026.
Answer: Arazi suggested planning for mid single-digit growth, with potential for better outcomes once annual operational planning is finalized.

Question 6: Theodore Rudd O’Neill from Hills Research asked about E-band validation and network resilience.
Answer: Arazi anticipated orders following E-band validation and noted global interest in wireless solutions for network redundancy.

Question 7: Gunther Kargan inquired about defense and security business opportunities.
Answer: Arazi highlighted opportunities in defense and security, particularly with the 60 GHz point-to-multipoint product for video security.

[Sentiment Analysis]
Analysts showed interest in growth drivers and strategic initiatives, while management maintained an optimistic tone regarding future prospects and strategic execution.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|----------------------------|---------|---------|
| Revenue | $85.5M | $102.7M |
| Non-GAAP Gross Margin | 35% | 34% |
| Non-GAAP Operating Income | $5.3M | $15.8M |
| Non-GAAP Net Income | $1.7M | $141M |
| Free Cash Flow | $3.3M | N/A |

[Risks and Concerns]
Risks include geopolitical tensions in Israel, global economic trends, integration challenges from acquisitions, and delays in 5G technology transitions. The company faces revenue volatility and working capital needs, along with potential tax liabilities and supply chain issues.

[Final Takeaway]
Ceragon Networks is navigating a challenging environment with strategic focus on expanding visibility and project pipelines. Despite revenue decline, the company is leveraging strong performance in North America and renewed activity in India to drive future growth. Management's confidence in achieving 2025 targets and optimism for 2026 growth reflect strategic initiatives in AI-driven demand and private network opportunities. Investors should monitor geopolitical and economic risks, as well as integration progress and supply chain dynamics.