Ceragon Announces First-Quarter Financial Results
Monday, May 03, 2021 | Comments

Ceragon Networks reported its financial results for the first quarter ended March 31.

"2021 has been off to a good start both for the telecom industry in general and for us at Ceragon specifically,” President and CEO Ira Palti. “The amount of data flowing around the globe has increased at an exponential rate. As Tier 1 and Tier 2 operators step up their efforts to provide enhanced 4G coverage as well as new 5G services, many of them turn to Ceragon."

Revenues were $68.3 million, up 22.2% from $55.9 million in the first quarter of 2020 and down 7.7% from $74 million in the fourth quarter of 2020. The company’s revenues varied from region to region and were in line with the effect that COVID has had on local business operations and network buildout plans.

Gross profit was $20.1 million, giving the company a gross margin of 29.5%, compared with a gross margin of 25.1% in the first quarter of 2020 and 29.1% the fourth quarter of 2020. The relatively low gross margin reflects continued high supply chain costs due to the COVID-19 environment.

"In Q1 2021, the accelerated 5G evolution along with the growing open RAN movement has kept Ceragon's growing suite of innovative solutions in the spotlight,” Palti said. “We achieved three new 5G design wins, saw very strong bookings across different regions and were selected to participate in an open RAN trial in TIM Brazil. Even though the industry is currently facing component shortages, which might affect our short-term deliveries, the global telecom industry is fast moving into a new era and Ceragon is well prepared to excel in it."

Operating income was $400,000 compared to operating loss of $6 million for the first quarter of 2020 and $1.5 million for the fourth quarter of 2020. Net loss was $1.2 million, or $0.01 per diluted share compared with $6.9 million, or $0.09 per diluted share for the first quarter of 2020 and $6.3 million, or $0.08 per diluted share for the fourth quarter of 2020. Cash and cash equivalents was $33 million on March 31 compared to $27.1 million at December 31.

Ceragon continues to target revenue growth in 2021. Although, it still expects a slow start for the first half of the year, the company continues to expect yearly revenue to be between $275-$295 million. However, the growing component shortage may have a negative impact on the timeliness of the company’s second-quarter and rest-of-the-year deliveries and may lead to a probable push of revenues between quarters until the shortage is resolved.

"As the company's president & CEO for the last sixteen years, I've led the company from a simpler 2G world into today's more complex open RAN, 5G world,” said Palti. “It's with peace of mind and a feeling of accomplishment that I pass the keys of the CEO office to our successful former deputy CEO and CFO Doron Arazi. I'll continue serving Ceragon as vice chairman of the board starting July."

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