Ceragon Networks Ltd. (NASDAQ:CRNT) Q4 2023 Earnings Call Transcript

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Unidentified Analyst: So just to round that out, so tax line about the same or down a hair, and then interest line, what? $2 million a quarter kind of thing?

Ronen Stein: Something like that would be reasonable.

Unidentified Analyst: Thank you. I’ll see the floor.

Rob Fink: Thank you so much, Alex.

Operator: Our next question come of the line of Romel Joncio [ph] you may speak.

Unidentified Analyst: Good morning. I wonder if you could just discuss in a little more detail of the integration plans for Siklu, just in terms of combining marketing forces, management, some of the infrastructure that they’re bringing in. And I realize there’s significant cross-selling opportunities, obviously, with your existing sales force. So I wonder if you could just give us a little more granularity on that, please? Thank you.

Doron Arazi: Yes. Hi, Romel, so the plans, as I said, are basically – or the execution of our plans is underway. What we see at the outset is that there is a strong demand for Siklu products from the original markets they were at. You may understand from the deal structure that they were in some, I would say, financial distress before we bought them. And that actually inhibited their ability to supply the demand. So first of all, the high level, we expect to see the – so to speak, stand-alone Siklu business ramping up because, obviously, we released all the ropes of financial difficulties and so on and so forth. And this is primarily driven by the sales team of Siklu that is part of our region. In parallel, we are seeing opportunities for quick wins especially in customers that are seeking for both microwave and millimeter web solution.

Up until recently, when Siklu was a stand-alone company that were not able to offer microwave solutions from their portfolio. And now we see this as an opportunity for us to also boost our microwave business sales in existing customers of Siklu. The other side of it is actually introducing Siklu solutions and products to some of our customers. So far, the initial feedback from the market is very positive, especially looking into the point to multipoint Terragraph solutions that can be used for fixed wireless access. And all in all, we see a lot of interest in Mobile World Congress. We intend to dedicate a big portion of our booth to explain and to show what these products and solutions can do and how they can help. So all in all, we are very optimistic.

Our sales team is also learning. We have done a lot of training activities so that we boost also the sales of Siklu products within our sales team and by that, having a multiple or multiplying the sales force that is out there to sell Siklu product. This is for the short run. For the long run, there’s much more strategic thoughts that I don’t think it’s the right time to start discussing them. The only thing I would say is that I’m sure that with the Siklu’s acquisition on the Ceragon side, our ease of use in terms of our product is going to improve very significantly because these guys did an amazing job in terms of GUI [ph] design, in terms of alignment when you are doing installation. So this is a part of the integration that we intend to endopt [ph] also on Ceragon product, which means faster deployment by far and also better configuration or easier configuration of our products as well.

I think I will stop here.

Unidentified Analyst: Great. That’s very helpful. Thanks so much Doron.

Doron Arazi: Sure. Thank you, Romel.

Rob Fink: You have no further question. Doron, please proceed.

Doron Arazi: Thank you. So this was an encouraging year for Ceragon. We’re increasing our footprint in multiple domains and expect to continue delivering significant revenue growth. The overall wireless transport market continues to grow based on projections from independent industry analysts and the expectation is that growth will continue in coming years. We believe we can grow much faster than the market growth by focusing on the parts of the market that are expected to grow faster and expanding into new domains. Beyond delivering strong radio products to this market and primarily focusing on millimeter wave that is expected to outpace the market growth, we’re expanding our business in other focus domains, which are private networks, as well as the software-led managed services.

This growth profile serves as the basis for our expectations for double-digit growth going forward. We are solidly profitable and expect to further expand our margins in 2024. We believe that we are well positioned to continue to achieve self-sustaining cash flows as we execute our growth strategy. I look forward to updating you further on our next quarterly call. Have a good day, everyone.

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