Ceragon Networks Ltd (CRNT) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Ceragon Networks' earnings call. (Operator Instructions) I must advise you that this call is being recorded today.

女士們先生們，感謝你們的支持，並歡迎參加 Ceragon Networks 的財報電話會議。（操作員指示）我必須通知您，今天這個電話正在錄音。

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

我現在想將電話交給今天的第一位發言人、投資者關係主管 Rob Fink。請繼續。

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.

謝謝接線員，大家早安。今天的電話會議由 Ceragon 執行長 Doron Arazi 主持。和財務長 Ronen Stein。

Before we start, I would like to note that certain statements made on this call including projected financial information and other results and the company's future initiatives, future events, business outlook, development efforts and their potential outcome, anticipated progress and plans, results and timelines and other financial-accounting-related matters constitute forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Act of 1934, as amended, and the Safe Harbor provisions of the Securities Litigation Reform Act of 1995.

在我們開始之前，我想指出，在這次電話會議上所做的某些陳述，包括預期的財務資訊和其他結果以及公司的未來舉措、未來事件、業務前景、開發工作及其潛在結果、預期進度與計畫、結果和時間表以及其他財務會計相關事項構成《1933 年證券法》（經修訂）、《1934 年證券法》（經修訂）以及《1995 年證券訴訟改革法》安全港條款所界定的前瞻性陳述。

Ceragon intends forward-looking terminology, such as believes, expects, may, will, should, anticipates, plans or similar expressions to identify forward-looking statements. Such statements reflect current expectations and assumptions of Ceragon's management. Actual results may differ materially as they are subject to certain risks and uncertainties, which could cause the actual results to differ materially from those projected in forward-looking statements. Such risks and uncertainties include, but are not limited to those that are described in Ceragon's most recent annual report on Form 20-F and as may be supplemented from time to time in Ceragon's other filings with the SEC, including today's earlier filing of the earnings press release, all of which are expressly incorporated herein by reference.

Ceragon 打算使用前瞻性術語，例如相信、預期、可能、將、應該、預期、計劃或類似表達來識別前瞻性陳述。此類聲明反映了 Ceragon 管理層當前的預期和假設。實際結果可能存在重大差異，因為它們受到某些風險和不確定性的影響，這可能導致實際結果與前瞻性陳述中預測的結果有重大差異。此類風險和不確定性包括但不限於Ceragon 最近的20-F 表格年度報告中所述的風險和不確定性，以及Ceragon 向SEC 提交的其他文件中可能不時補充的風險和不確定性，包括今天早些時候提交的收益報告新聞稿，所有這些都明確地透過引用併入本文。

Forward-looking statements relate to the date initially made, and they are not predictions of future events or results and there could be no assurance that they will prove to be accurate, 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 they may also be obtained from Ceragon's website at ceragon.com.

前瞻性陳述涉及最初做出的日期，它們不是對未來事件或結果的預測，不能保證它們將被證明是準確的，並且 Ceragon 不承擔更新它們的義務。Ceragon 的公開文件可在美國證券交易委員會網站 sec.gov 上取得，也可從 Ceragon 網站 ceragon.com 取得。

On today's call, we will include non-GAAP numbers. For reconciliation between GAAP and non-GAAP results, please see the table that was attached to the press release that was issued earlier today, which is posted on the Investor Relations section of Ceragon's website.

在今天的電話會議中，我們將包括非公認會計原則的數字。有關 GAAP 和非 GAAP 業績之間的調節，請參閱今天早些時候發布的新聞稿所附的表格，該新聞稿發佈在 Ceragon 網站的投資者關係部分。

With all that said, I’d now like to turn the call over to Doron. Doron, the call is yours.

話雖如此，我現在想把電話轉給多倫。多倫，電話由你接聽。

Thank you, Rob. And good morning, everyone. Let me start by providing some context. Over the past year or so, we have been implementing a strategic plan to diversify our business. Under this plan, we intend to increase our market share in private networks and move up the value chain from an equipment provider to assisting our customers with network operation optimizing their investments, all while maintaining our strong position in Tier-1 carriers. We expect that successful execution of this strategy will result in increased customer diversification, higher levels of recurring revenues and expanded margins.

謝謝你，羅布。大家早安。讓我先提供一些背景資訊。在過去一年左右的時間裡，我們一直在實施業務多元化的策略計畫。根據該計劃，我們打算增加我們在專用網路中的市場份額，並將價值鏈從設備提供商提升到幫助我們的客戶進行網路營運優化他們的投資，同時保持我們在一級運營商中的強勢地位。我們預計，這項策略的成功執行將導致客戶多元化、經常性收入水準提高和利潤率擴大。

The second-quarter results reflect continued progress in implementing this strategy. We had another quarter of significant bookings from new private network customers. New customers from private networks accounted for more than 50% of our overall new customers, both in number of accounts, as well as in dollars.

第二季的業績反映了該策略實施的持續進展。我們還有四分之一來自新的專用網路客戶的大量預訂。來自專用網路的新客戶占我們整體新客戶的 50% 以上，無論是帳戶數量還是美元。

For further evidence, our first-half annualized booking in private networks was up more than 35% versus last year, and we are growing our funnel of opportunities. The integration of the recent Siklu acquisition has continued in accordance with our plans and has been helping to enhance our competitive position with ISP and private networks customers.

作為進一步的證據，我們上半年私人網路的年化預訂量比去年增加了 35% 以上，而且我們正在擴大我們的機會管道。最近收購的 Siklu 的整合繼續按照我們的計劃進行，並有助於增強我們與 ISP 和專用網路客戶的競爭地位。

In our journey to generate higher software-led recurring revenue, we also started generating meaningful adoption of our smart activation key software, as well as creating opportunities for our network digital twin solutions leading to proof-of-concept engagements. All of that while continuing to maintain and even increase our market share in T1 operators, primarily in India and North America.

在我們創造更高的以軟體為主導的經常性收入的過程中，我們也開始有意義地採用我們的智慧啟動金鑰軟體，並為我們的網路數位孿生解決方案創造機會，從而實現概念驗證。所有這些同時繼續保持甚至增加我們在 T1 運營商（主要是印度和北美）的市場份額。

To summarize, each of these initiatives is showing progress, and this progress is increasing our confidence in our strategy. Demand for our solution from our customers remained strong across the globe, and we were able to gain new customers primarily in private networks. Our dependency on 5G-related spending is decreasing as we are focusing on increasing our market share in private networks and a significant spending is ongoing in 4G upgrades and expansions, primarily in rural areas. In fact, our backlog, especially in North America and India, gives us confidence that we can continue with our growth momentum into the second-half of the year.

總而言之，每項措施都取得了進展，而這種進展增強了我們對策略的信心。全球客戶對我們解決方案的需求依然強勁，我們主要在專用網路中獲得了新客戶。我們對 5G 相關支出的依賴正在減少，因為我們專注於增加專用網路的市場份額，並且在 4G 升級和擴展（主要是在農村地區）方面正在進行大量支出。事實上，我們的積壓，尤其是在北美和印度的積壓，讓我們有信心在今年下半年繼續保持成長勢頭。

As expected our new offerings have started to translate to bookings and revenue. For example, some of the new solutions in our portfolio that are worth highlighting include the IP-50EX, which continues to garner customer interest. This is an ultra-compact, high-capacity e-band radio, which is ideally suited for a variety of use cases, especially when small size and low OpEx are priorities.

正如預期的那樣，我們的新產品已開始轉化為預訂量和收入。例如，我們的產品組合中一些值得強調的新解決方案包括 IP-50EX，它繼續引起客戶的興趣。這是一款超緊湊、高容量的 e 頻段無線電，非常適合各種使用案例，特別是當優先考慮小尺寸和低運營成本時。

In addition, our recently introduced Smart Activation Key software has generated meaningful customer adoption. Tens of thousands of licenses have been secured by several customers across multiple regions within the first-half of the fiscal year. This innovative software simplifies the activation process for network radios and their various licensable features, allowing customers to activate and upgrade thousands of devices simultaneously, significantly enhancing operational efficiency and reducing costs.

此外，我們最近推出的智慧型啟動金鑰軟體已獲得有意義的客戶採用。本財年上半年，多個地區的多家客戶已獲得數萬個許可證。這種創新軟體簡化了網路無線電及其各種可授權功能的啟動過程，讓客戶同時啟動和升級數千台設備，從而顯著提高營運效率並降低成本。

Importantly, this software solution is a major step in our initiatives to drive recurring revenue, reducing the volatility inherent with project-based, non-recovering revenue. Over time, we anticipate solutions like this to become an increasingly important contributor to our revenue.

重要的是，該軟體解決方案是我們推動經常性收入、減少基於專案的不可恢復收入固有的波動性的重要一步。隨著時間的推移，我們預計此類解決方案將成為我們收入的越來越重要的貢獻者。

We continue to release more frequencies of our 50-CX, a solution that has already demonstrated huge success in India. These additional bands will enable us to cover additional market needs and meet demand in other regions.

我們繼續發布更多頻率的 50-CX，該解決方案已在印度取得了巨大成功。這些額外的頻段將使我們能夠滿足額外的市場需求並滿足其他地區的需求。

I'd now like to provide an overview of our Q2 highlights by region, noting that on today's call we will focus primarily on activities in North America and India, the two regions that have and we expect will continue to have the greatest impact on our results in the near term. In North America, revenue was $23 million. This was a strong quarter for our private network group as we added nine new customers and generated substantial private network bookings.

我現在想按地區概述我們第二季度的亮點，並指出在今天的電話會議上，我們將主要關注北美和印度的活動，這兩個地區已經並且我們預計將繼續對我們的影響最大近期結果。在北美，收入為 2300 萬美元。對於我們的專用網路集團來說，這是一個強勁的季度，因為我們增加了九個新客戶並產生了大量的專用網路預訂。

In the first-half of 2024, on an annualized basis, we have delivered tremendous growth from private networks, with bookings up more than 45% of our 2023 booking. We also had another strong quarter selling and delivering Siklu by Ceragon products primarily to ISPs.

2024 年上半年，按年化計算，我們的專用網路實現了巨大增長，預訂量較 2023 年預訂量增長了 45% 以上。我們還經歷了另一個強勁的季度，主要向 ISP 銷售和交付 Siklu by Ceragon 產品。

Overall, we continue to maintain strong booking and revenue levels in North America and the growing contribution of private network and ISP business has smoothed out natural fluctuations related to Tier-1 service providers' CapEx trends. This result was exactly our objective, to diversify our revenue and smooth out the impact of large project-based orders from Tier-1 customers. We were successful in this quarter, and we are encouraged by the trends.

總體而言，我們在北美繼續保持強勁的預訂和收入水平，專用網路和 ISP 業務的貢獻不斷增長，消除了與一級服務提供者資本支出趨勢相關的自然波動。這一結果正是我們的目標，即實現收入多元化並消除來自一級客戶的大型專案訂單的影響。我們在本季度取得了成功，我們對這一趨勢感到鼓舞。

In India, revenue was $36 million. As a reminder in Q1, we had record bookings related to the large agreement we disclosed in the fourth quarter, as well as a high value of orders received from one of our long-standing customers. As expected, delivery and deployment of the new customer orders began in the second quarter, and deployment is expected to take approximately two years with about 75% of the $150 million project value expected to be recognized during this timeframe.

在印度，收入為 3600 萬美元。作為第一季的提醒，我們與第四季度披露的大額協議相關的預訂量創下了紀錄，並且從我們的一位長期客戶那裡收到了高價值的訂單。正如預期的那樣，新客戶訂單的交付和部署將於第二季度開始，部署預計需要大約兩年的時間，預計在此期間將確認 1.5 億美元項目價值的約 75%。

Overall, in India, we are benefiting from 4G expansion in rural areas as well as certain 5G upgrades. Key customers continue to invest heavily in both phases of this capacity upgrade, and we are growing our market share in this regard. We are also seeing large opportunities which can fuel our business in 2025 and working to win them against competition. Clearly, we have continued to be successful in India and North America, and this has been facilitating our growth and profitability.

總體而言，在印度，我們受益於農村地區的 4G 擴展以及某些 5G 升級。主要客戶繼續在產能升級的兩個階段進行大量投資，我們在這方面的市佔率正在增加。我們也看到了巨大的機遇，可以推動我們 2025 年的業務發展，並努力在競爭中贏得這些機會。顯然，我們在印度和北美繼續取得成功，這促進了我們的成長和獲利能力。

As a last comment, I would point to our success in other regions as further evidence of success regarding our new strategy. I'd note that in the first-half of 2024, other regions, notably Latin America and APAC, have also seen the benefits of this new strategy with a significant growth in private network business. This is very encouraging, especially in light of the first competition against Chinese vendors in those regions.

作為最後的評論，我想指出我們在其他地區的成功，作為我們新戰略成功的進一步證據。我注意到，2024年上半年，其他地區，特別是拉丁美洲和亞太地區，也看到了這項新策略的好處，專網業務顯著成長。這是非常令人鼓舞的，特別是考慮到在這些地區與中國供應商的首次競爭。

With that, I'll turn the call over to Ronen Stein, our CFO, to discuss the results in more detail. Ronen, over to you.

接下來，我會將電話轉給我們的財務長 Ronen Stein，以便更詳細地討論結果。羅南，交給你了。

Thank you, Doron, and good morning, everyone. As Doron outlined, we continue in our progress towards our stated strategy. Simultaneously, we continue to deliver on our growth plans and improve our operating leverage on a non-GAAP basis.

謝謝你，多倫，大家早安。正如多倫所概述的那樣，我們將繼續朝著既定策略邁進。同時，我們繼續實現我們的成長計劃，並在非公認會計原則的基礎上提高我們的營運槓桿。

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 you to today's press release.

為了幫助您理解結果，我將主要參考非 GAAP 財務數據。有關我們使用非公認會計準則財務指標（包括這些指標的調節）的更多信息，請參閱今天的新聞稿。

Let me now review the actual results. Revenues were $96.1 million, up 11.5% from $86.2 million in Q2 2023. Our strongest regions in terms of revenues for the quarter were India and North America, with $35.5 million and $23.3 million respectively, in line with the continuous strong demand we see in these regions. Our third strongest region in terms of revenues was EMEA with $19 million. We had one customer in the second quarter that contributed more than 10% of our revenues.

現在讓我回顧一下實際結果。營收為 9,610 萬美元，比 2023 年第二季的 8,620 萬美元成長 11.5%。我們本季收入最強的地區是印度和北美，分別為 3550 萬美元和 2330 萬美元，這與我們在這些地區看到的持續強勁需求相符。就收入而言，我們第三強的地區是歐洲、中東和非洲 (EMEA)，為 1,900 萬美元。第二季我們有一個客戶貢獻了我們 10% 以上的收入。

Gross profit for the second quarter on a non-GAAP basis was $33.8 million, an increase of 11.1%, compared to $30.4 million in Q2 2023. Our non-GAAP gross margin was 35.2%, compared with gross margin of 35.3% in Q2 2023. We continue to achieve high gross margins within the guidance range. Despite the fact, mixture changed and revenues from India increased significantly.

以非公認會計準則計算，第二季毛利為 3,380 萬美元，較 2023 年第二季的 3,040 萬美元成長 11.1%。我們的非 GAAP 毛利率為 35.2%，而 2023 年第二季的毛利率為 35.3%。我們繼續在指導範圍內實現高毛利率。儘管如此，結構發生了變化，來自印度的收入大幅增加。

We achieved this by increasing revenues and recognizing continued improvement in product costs. We also maintained control over our fixed costs, all of which had a positive effect. Our gross margins may continue to fluctuate from quarter to quarter due to changes in product and regional mix.

我們透過增加收入和認識到產品成本的持續改善來實現這一目標。我們也保持了對固定成本的控制，所有這些都產生了積極的影響。由於產品和區域組合的變化，我們的毛利率可能會繼續逐季度波動。

As for our operating expenses, in general, operating expenses in 2024 fully include the impact of the Siklu acquisition at the end of 2023 and thus, impact the comparison to 2023 operating expenses. Research and development expenses for the second quarter on a non-GAAP basis were $8.2 million, up from $7.6 million in Q2 2023. As a percentage of revenue, our R&D expenses were 8.5% in the second quarter, compared to 8.8% in the second quarter last year.

至於我們的營運費用，總的來說，2024年的營運費用完全包含了2023年底收購Siklu的影響，因此影響與2023年營運費用的比較。以非公認會計準則計算，第二季的研發費用為 820 萬美元，高於 2023 年第二季的 760 萬美元。以收入的百分比計算，第二季我們的研發費用為 8.5%，去年第二季為 8.8%。

Sales and marketing expenses for the second quarter on a non-GAAP basis were $11 million, up from $9.4 million in Q2 2023. As a percentage of revenue, sales and marketing expenses were 11.5% in the second quarter, compared to 10.9% in the second quarter last year.

以非公認會計準則計算，第二季的銷售和行銷費用為 1,100 萬美元，高於 2023 年第二季的 940 萬美元。第二季銷售和行銷費用佔收入的比例為 11.5%，而去年第二季為 10.9%。

General and administrative expenses for the second quarter on a non-GAAP basis were $1.4 million, compared to $6.1 million in Q2 2023. As a percentage of revenues, G&A expenses were 1.5% in the second quarter, compared to 7% in the second quarter last year. The main reason for the reduction in G&A is the impact of a $4 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.

以非公認會計準則計算，第二季的一般和管理費用為 140 萬美元，而 2023 年第二季為 610 萬美元。第二季 G&A 費用佔營收的百分比為 1.5%，去年第二季為 7%。G&A 減少的主要原因是與南美客戶達成的 1,200 萬美元債務和解協議中的初始收款相關的 400 萬美元收益的影響，我們在 2022 年底對此計入了信用損失。

This is a great opportunity to note that last week, we collected the second installment of $4 million from this customer bringing us to a collection of $8 million out of $12 million debt. This recent collection is expected to be reflected in our financials Q3 results.

這是一個很好的機會，我們上週從該客戶那裡收取了第二筆 400 萬美元的款項，使我們從 1200 萬美元的債務中收回了 800 萬美元。最近的收集預計將反映在我們第三季的財務業績中。

I'd note that our GAAP operating expenses include integration costs related to Siklu. These charges are backed out of our non-GAAP operating expenses. We believe the integration is mostly completed, and we do not anticipate any further meaningful integration charges in future periods.

我要指出的是，我們的 GAAP 營運費用包括與 Siklu 相關的整合成本。這些費用從我們的非公認會計準則營運費用中扣除。我們相信整合已基本完成，我們預計未來不會產生任何進一步有意義的整合費用。

Operating income for the second quarter on a non-GAAP basis was $13.1 million, compared with $7.4 million for Q2 2023. As a percentage of revenues, non-GAAP operating income was 13.7% in the second quarter, compared to 8.5% in the second quarter last year. Without the $4 million debt collection benefit included in the G&A, non-GAAP operating income would be $9.1 million and as a percentage of revenues, 9.5%.

以非公認會計準則計算，第二季營業收入為 1,310 萬美元，而 2023 年第二季營業收入為 740 萬美元。第二季非 GAAP 營業收入佔營收的百分比為 13.7%，去年第二季為 8.5%。如果沒有計入 G&A 的 400 萬美元債務追收收益，非 GAAP 營業收入將為 910 萬美元，佔收入的百分比為 9.5%。

Financial and other expenses for the second quarter on a non-GAAP basis were $2.6 million. Our tax expenses for the second quarter on a non-GAAP basis were $0.6 million. Net income for the second quarter on a non-GAAP basis was $9.9 million or $0.11 per diluted share compared to $4.4 million or $0.05 per diluted share for Q2 2023. Without the $4 million benefit related to the debt collection included in the G&A, non-GAAP net income would be $5.9 million or $0.07 per diluted share.

以非公認會計準則計算，第二季的財務和其他費用為 260 萬美元。以非 GAAP 計算，我們第二季的稅務費用為 60 萬美元。以非公認會計準則計算，第二季淨利為 990 萬美元，即稀釋後每股收益 0.11 美元，而 2023 年第二季淨利為 440 萬美元，即稀釋後每股收益 0.05 美元。如果沒有 G&A 中包含的與債務追收相關的 400 萬美元收益，非 GAAP 淨利潤將為 590 萬美元，或攤薄後每股收益 0.07 美元。

As for our balance sheet, our cash position at the end of the second quarter was $26.3 million, compared to $28.2 million at the end of 2023. Short-term loans were $28.5 million, compared to $32.6 million as of December 31, 2023. We believe we have cash and facilities that are sufficient for our operations and working capital needs.

就我們的資產負債表而言，第二季末我們的現金部位為 2,630 萬美元，而 2023 年底為 2,820 萬美元。短期貸款為 2,850 萬美元，而截至 2023 年 12 月 31 日為 3,260 萬美元。我們相信我們擁有足夠的現金和設施來滿足我們的營運和營運資金需求。

Our inventory at the end of Q2 2024 was $59.5 million, down from $68.8 million at the end of December 2023, and down from just over $61 million at March 31. The reduction is mainly as our efforts during 2023 to streamline inventory levels following the improvement in components availability have materialized in initial shipments to the larger order in India. We continue to monitor inventory levels taking into consideration the improvements in availability of components and expected changes in demand.

截至 2024 年第二季末，我們的庫存為 5,950 萬美元，低於 2023 年 12 月底的 6,880 萬美元，也低於 3 月 31 日的略高於 6,100 萬美元。減少的主要原因是我們在 2023 年隨著零件可用性的改善而努力精簡庫存水平，這項努力已在印度較大訂單的初始發貨中得到落實。我們將繼續監控庫存水平，同時考慮組件可用性的改善和預期的需求變化。

Our trade receivables are at $112.9 million as compared to $104.3 million at the end of December 2023. Our DSO now stands at 114 days. As for our cash flow, net cash flow generated by operations and investing activities in the first six months of 2024 was $1.7 million.

我們的貿易應收帳款為 1.129 億美元，而 2023 年 12 月底為 1.043 億美元。我們的 DSO 現在為 114 天。至於我們的現金流，2024 年前六個月營運和投資活動產生的淨現金流為 170 萬美元。

We are reiterating our full-year outlook. For 2024, we expect revenue of $385 million to $405 million, representing growth of 11% to 17% compared to 2023. This guidance includes the contribution from Siklu.

我們重申全年展望。2024 年，我們預計營收為 3.85 億至 4.05 億美元，較 2023 年成長 11% 至 17%。本指南包括 Siklu 的貢獻。

Non-GAAP operating margins are targeted to be at least 10% at the midpoint of the revenue guidance. As a result, we expect increased non-GAAP profit and positive cash flow for the full-year of 2024.

非 GAAP 營業利潤率目標為收入指引中位數至少 10%。因此，我們預計 2024 年全年非 GAAP 利潤和正現金流將增加。

With that, I now open the call for your questions. Operator?

至此，我現在開始詢問大家的問題。操作員？

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Alex Henderson, Needham & Company.

亞歷克斯·亨德森，李約瑟公司。

Great. Thanks and nice execution again. And it sounds like the visibility remains pretty good. I wanted to ask you a question on the competitive front actually posed to me by a couple of investors. One of the other people who develop a system-on-a-chip for wireless had in 2022 talked about a significant upgrades, but I can't find any evidence of that product in the field.

偉大的。謝謝，再次執行得很好。聽起來能見度仍然很好。我想問你一個關於競爭方面的問題，實際上是由幾個投資者向我提出的。另一位開發無線晶片系統的人曾在 2022 年談到重大升級，但我在現場找不到該產品的任何證據。

Can you talk about that upgrade, whether that's out there, whether you're seeing that, or has that fallen by the wayside?

你能談談這個升級嗎？

So hi, Alex. This is Doron on. We have not seen any actual implementation in the field of new chips that actually allow for a very, I would say, significant enhanced capabilities rather than what we are seeing today.

嗨，亞歷克斯。這是多倫。我們還沒有看到新晶片領域的任何實際實現，這些晶片實際上可以實現非常顯著的增強功能，而不是我們今天所看到的。

So that -- I think it was MaxLinear chip -- didn't make it into the field or didn't make it into product?

那麼，我認為是 MaxLinear 晶片，沒有進入該領域或沒有進入產品？

Obviously, we don't know exactly what the MaxLinear plans are, but to the best of our knowledge and based on what we are hearing in the industry, at a minimum, there's no cheap available out there for MaxLinear that is enhanced and can be usable immediately.

顯然，我們並不確切知道 MaxLinear 計劃是什麼，但據我們所知，並根據我們在行業中聽到的情況，至少，沒有便宜的可用增強型 MaxLinear 可以立即可用。

Great. Sounds good from in terms of the landscape, do you have any exposure in Eastern Europe that might be negatively impacted by the increased regulations on shipments into that that geography? And similarly relative to Japan, been a lot of volatility on the yen exchange rates. Does that have any impact on you guys?

偉大的。從情況來看，聽起來不錯，您在東歐是否有任何業務可能會受到對該地區的運輸法規加強的負面影響？與日本類似，日圓匯率也出現了很大的波動。這對你們有什麼影響嗎？

So our business in the two a countries less region you have mentioned is not high, is not big. And therefore, I see any sort of exposure insignificant on our business.

所以我們在你提到的兩個國家較少的地區的業務不高，也不大。因此，我認為任何形式的風險對我們的業務來說都是微不足道的。

Again, it's for both the Eastern Europe issue and the Japanese issue, that neither are our concern?

還是那句話，無論是東歐問題還是日本問題，我們都不在乎？

No, there's no concern. We sell in most of the use cases in good years, a few millions of dollars altogether. I don't see that as something that is perceived as a significant exposure.

不，不用擔心。在好的年份，我們在大多數用例中的銷售額總計為數百萬美元。我不認為這被視為重大風險。

And then just talking about the pipeline of activity, are you seeing any change in some of the mechanics there in terms of deal closure rates or deal sizes? Or how does the pipeline look as we go into the back half of the year and into '25.

然後只是談論活動的管道，您是否看到在交易完成率或交易規模方面的一些機制有任何變化？或者當我們進入今年下半年和 25 世紀時，管道看起來如何。

So first of all, as I mentioned in our prepared comments, we are seeing the benefits of our decision to increase focus on private networks, and we increased our booking in our deal closure on this side. That is definitely helpful to streamline the total bookings that we are seeing because of the Tier-1 and 5G fluctuations and maybe some slowdown.

首先，正如我在準備好的評論中提到的，我們看到了我們決定增加對專用網路的關注的好處，並且我們在這方面增加了交易完成中的預訂。由於一級和 5G 的波動以及可能的放緩，這絕對有助於簡化我們所看到的總預訂量。

So in terms -- but particularly in terms of deal closure, I would say that with the Tier 1s in primarily outside India and to a certain degree also outside North America, at least for us, we saw a certain slowdown. Just to give you a few examples in Indonesia, for example, the business is going through a consolidation. There are some consolidation in this particular market and this slows down the buying patterns, but generally speaking, other than in the Tier 1 and to a certain degree in ISPs, primarily in Europe, we have not seen any significant slowdown.

因此，就交易完成而言，我想說的是，由於一級供應商主要在印度以外的地區，並且在一定程度上也在北美以外地區，至少對我們來說，我們看到了一定程度的放緩。舉幾個印尼的例子，該公司正在經歷整合。這個特定市場出現了一些整合，這減緩了購買模式，但總的來說，除了一級和一定程度上的網路服務供應商（主要是歐洲）之外，我們沒有看到任何明顯的放緩。

So in aggregate, the private networks combined with a little bit of slowdown in some of the Tier 1s is a net neutral environment?

那麼總的來說，私有網路加上一些一級網路的稍微放緩是一個網路中立環境嗎？

I would say very highly of say that, yes, it's not a one to one. But generally speaking, the situation is that the private networks can cover , especially the areas that I mentioned in my prepared comments, which is APAC as well as Latin America, a relative weakness in the Tier-1 operators.

我想說的是，是的，這不是一對一的。但總體來說，情況是專網可以覆蓋，特別是我在準備的評論中提到的區域，即亞太地區以及拉丁美洲，這是一級運營商相對薄弱的區域。

[Rommel Dionisio], HS Capital.

[隆美爾·迪奧尼西奧]，HS Capital。

Yes, good morning. Just a question on the private networks. Obviously, you guys have made significant progress over the last few years in expanding that business. How do you think about boosting some of the resources behind that business given the significant opportunities and the momentum that you have there, both in North America and in Europe and elsewhere in the world that you see opportunities there? Thank you.

是的，早安。只是一個關於私人網路的問題。顯然，過去幾年你們在拓展業務方面取得了重大進展。鑑於您在北美、歐洲和世界其他地方都看到了機會和動力，您如何考慮增加該業務背後的一些資源？謝謝。

So obviously, while we are executing successfully on our new strategy, we are very attentive to what's happening, and it is our intention to adjust our investments, especially in sales and marketing accordingly, in order to leverage the momentum. Said that, we are always with a very close eye on our bottom line and our operating expenses. So it is on our intention to do it as needed but still keep as much as we can with the trajectory of improved operating margins.

顯然，在我們成功執行新策略的同時，我們非常關注正在發生的事情，並且我們打算相應地調整我們的投資，特別是在銷售和行銷方面，以利用這一勢頭。也就是說，我們始終密切關注我們的底線和營運費用。因此，我們打算根據需要這樣做，但仍盡可能維持營業利潤率改善的軌跡。

Okay. Fair enough, Doron. And specifically, could you just talk about the private networks in Europe? I know that you've made some progress there, but just given some of the geopolitical uncertainty, what's your kind of outlook for private networks in Europe and signing up some new business there over the next few quarters going forward? Thanks

好的。很公平，多倫。具體來說，您能談談歐洲的專用網路嗎？我知道你們已經在那裡取得了一些進展，但考慮到一些地緣政治的不確定性，你們對歐洲專用網路以及未來幾季在那裡簽署一些新業務的前景有何看法？謝謝

Generally speaking, I would say that the big funnel we see for the private networks across the world, but specifically also in Europe to your question, is increasing. Obviously, the environment in Europe is not that, so to speak, a friendly in terms of investments given the situation. But we still see opportunities to increase our private networks business in Europe in the coming quarters.

總的來說，我想說的是，我們在世界各地看到的專用網路的大漏斗正在增加，特別是在歐洲，對於你的問題，正在增加。顯然，從目前的情況來看，歐洲的投資環境並不友善。但我們仍然看到未來幾季增加歐洲專用網路業務的機會。

Robert Marson, TB Partners.

羅伯特·馬森，TB Partners。

Hi, guys. Congratulations on a good quarter. The revenue growth of nearly 12% was particularly impressive, especially since it was against the 22% comparable last year. I just wanted to say we noted that. Regarding our Neptune, can you give us an update?

嗨，大家好。恭喜您度過了一個美好的季度。近 12% 的收入成長尤其令人印象深刻，尤其是與去年的 22% 相比。我只是想說我們注意到了這一點。關於我們的海王星，可以為我們介紹一下最新情況嗎？

Yeah. Look, I didn't put too much higher focus on Neptune in my prepared comments, because nothing has significantly changed since last quarter. But the general comment, I would say that we continue with the post-silicon validation. It is nearing the end.

是的。看，我在準備好的評論中並沒有對海王星給予太多關注，因為自上季度以來沒有任何重大變化。但總的來說，我想說我們會繼續進行矽後驗證。已經接近尾聲了。

And in parallel, as we already discussed in previous calls, we have already started developing the first the product that will be based on this Neptune chip. So all in all, the bottom line is that we are moving forward as we were expecting and therefore, there's nothing new. So sometimes no news is good news.

同時，正如我們在之前的電話會議中已經討論過的那樣，我們已經開始開發第一個基於 Neptune 晶片的產品。總而言之，最重要的是，我們正在按照我們的預期前進，因此，沒有什麼新的。所以有時候沒有消息就是好消息。

Excellent. Regarding software and managed services, the press release of tens of thousands of licenses sounds impressive, Doron, but the real question is what kind of revenue does that represent? In 2025, if we had to disclose software and service revenue as a percent of revenue, what kind of number could we expect realizing it's still in the early innings?

出色的。關於軟體和託管服務，Doron，數以萬計的許可證的新聞稿聽起來令人印象深刻，但真正的問題是這代表著什麼樣的收入？到 2025 年，如果我們必須揭露軟體和服務收入佔收入的百分比，那麼我們預計會得到什麼樣的數字，因為它仍處於早期階段？

So first of all, at least so far, it's our policy not to disclose this partition. So you'll have to excuse me for not answering the second part of your question.

首先，至少到目前為止，我們的政策是不公開此分區。所以你必須原諒我沒有回答你問題的第二部分。

As to the qualitative question about what is the potential there, I would say that the potential is significant, but it also entails a market education. Tier-1 operators have their own reasons for buying a CapEx model versus OpEx model. At the same token, they are exploring seriously different use cases, where it makes sense for them to pay a periodical fee or based on success fee to companies like us for improving also their operating results.

至於潛力有多大的定性問題，我想說潛力是巨大的，但它也需要市場教育。一級運營商購買資本支出模型與運營支出模型有自己的理由。同樣，他們正在探索截然不同的用例，在這些用例中，他們向像我們這樣的公司支付定期費用或基於成功費用以改善其營運表現是有意義的。

And so Tier 1 is something that we believe can generate a significant amount of revenues in the future. Yet the adoption of this concept is going to take us time. But the fact that the software is already there and available for immediate use in these models, in my view, is nearing the time where we'll be able to use it.

因此，我們相信第一層可以在未來產生大量收入。然而，採用這一概念需要時間。但在我看來，該軟體已經存在並且可以立即在這些模型中使用，這一事實已經接近我們能夠使用它的時間。

If I look at the other segment, which is the -- I would say, either smaller players, ISPs and also private networks, I think that the results of such kind of capabilities in terms of new commercials, recurring models will come faster. And as I mentioned also in our press release, one of the customers that adopted this software is a smaller player that decided to go already for a term license. From my perspective, this is a very strong signal that there is a good chance to enjoy the fruits of this kind of technology with a recurring business model.

如果我看看其他細分市場，我會說，無論是較小的參與者、ISP 還是專用網絡，我認為這種能力在新廣告、重複模型方面的結果將會更快。正如我在新聞稿中提到的，採用該軟體的客戶之一是一家規模較小的公司，他們已經決定購買期限許可證。在我看來，這是一個非常強烈的信號，表明我們有很好的機會透過重複的商業模式來享受這種技術的成果。

All right. Thank you. Germany passed a rip and replace Huawei law this quarter -- or last quarter, excuse me, I believe. Is there any traction with that movement in any other geographies in the world, other parts of Europe or maybe even Southeast Asia, where people are concerned about data security? And is there any opportunity for us to take that kind of market share back from when they were giving product away 10 years ago?

好的。謝謝。德國在本季或上季通過了一項撕裂並取代華為的法律，我相信。在世界其他地區、歐洲其他地區甚至東南亞，人們擔心資料安全的地方，這項運動是否有任何吸引力？我們是否有機會奪回 10 年前他們免費贈送產品時的市佔率？

The short answer is yes. Just to give you slightly more color, just in Europe, since you mentioned Europe and you also mentioned Germany, we are engaged with at least two or three new prospects relatively sizable that are interested in our solutions as a result of the ban on the Chinese that is starting to take place in Europe.

簡短的回答是肯定的。只是為了給你多一點色彩，就在歐洲，既然你提到了歐洲，也提到了德國，我們正在與至少兩到三個規模相對較大的新潛在客戶進行接觸，他們由於對中國的禁令而對我們的解決方案感興趣這正在歐洲開始發生。

At the same token, I must tell you -- and I don't want to offend anyone -- the European are much lower to kind of deploy these instructions. So I think it will take more time. But all in all, we have started the discussions with new prospect, which is a good signal for us.

同樣，我必須告訴你——我不想冒犯任何人——歐洲人在部署這些指令方面的能力要低得多。所以我認為這需要更多時間。但總而言之，我們已經開始了新前景的討論，這對我們來說是一個很好的訊號。

Thank you. Regarding Tier 1s in the US, I believe we only service one. Is there any chance we could get any material business out of the other two.

謝謝。關於美國的一級，我相信我們只為一級提供服務。我們是否有機會從另外兩家公司獲得任何實質業務？

So if I need to be very precise, we are not serving just one, but the other one that we are serving, the business there is not meaningful enough to have a grand discussion about it. But I must tell you that in that case, the nice thing about it is that we were the only vendor to resolve a very unique situation for them or a very unique use case to be more precise with them, and that puts us in terms of technology, innovation and a customer-oriented approach, probably in the front line.

所以如果我需要非常精確的話，我們不是只服務一個，而是我們正在服務的另一個，那裡的業務沒有足夠的意義來進行大討論。但我必須告訴你，在這種情況下，好處是我們是唯一一家能夠為他們解決非常獨特的情況或非常獨特的用例（更準確地說）的供應商，這使我們能夠技術、創新和以客戶為導向的方法，可能是最重要的。

We will continue this dialogue with them. But you need to also bear in mind that the other, I would say, two Tier-1 operators have a huge fiber network piece that they own. And therefore, their economics is slightly different.

我們將繼續與他們進行對話。但您還需要記住，我想說的是，另外兩家一級營運商擁有龐大的光纖網路。因此，他們的經濟學略有不同。

Thank you. Regarding acquisitions, Siklu has turned out to be a gem. Congratulations on that. The balance sheet can afford some small bolt-on deals if they're done without risk and very accretively. Is there anything in the works for the rest of this year that might give us a little revenue bump for 2025 in the acquisition department?

謝謝。在收購方面，Siklu 被證明是一顆寶石。對此表示祝賀。如果這些交易是在沒有風險且非常增值的情況下完成的，那麼資產負債表可以承受一些小型的補充交易。今年剩下的時間裡，是否有任何事情可能會讓我們在 2025 年收購部門的收入有所成長？

I cannot be that specific. I will only say that we continue to pursue opportunities for small M&As and in order to augment our execution or our organic execution of our strategy. And I'm quite encouraged by the funnel. And I would say that this is enough for this question.

我不能說得那麼具體。我只想說，我們將繼續尋求小型併購機會，以增強我們的執行力或策略的有機執行力。我對這個漏斗感到非常鼓舞。我想說這對於這個問題來說已經足夠了。

Alex Henderson, Needham & Company.

亞歷克斯·亨德森，李約瑟公司。

I just wanted to address the question of the gain that shows up in the G&A, the $0.07 number versus the $0.11 number. Hopefully everybody will be on the same page, but it seems to me that having a $1 million G&A number in the second quarter just sets up a ridiculous comp into '25, because obviously, that really is a one-time event. And I don't understand why you didn't back it out of the numbers -- why are we not using $0.07 as the non-GAAP number instead of $0.11?

我只是想解決 G&A 中顯示的收益問題，即 0.07 美元的數字與 0.11 美元的數字。希望每個人都能達成共識，但在我看來，第二季度 100 萬美元的 G&A 數字只會為 25 年帶來可笑的補償，因為顯然，這確實是一次性事件。我不明白為什麼你沒有從數字中證明這一點——為什麼我們不使用 0.07 美元而不是 0.11 美元作為非 GAAP 數字？

We need to be consistent with our accounting also when we are talking about non-GAAP. If you look back into comparative numbers, and that's clearly seen in our investor presentation, and after consulting with the with our lawyers, an allowance for a credit loss cannot be taken out from the non-GAAP.

當我們談論非公認會計原則時，我們也需要與我們的會計保持一致。如果你回顧一下比較數字，這在我們的投資者演示中可以清楚地看到，並且在諮詢我們的律師後，信用損失準備金不能從非公認會計準則中扣除。

And when we accounted for that, yes, it was late or beginning of 2023, we had to keep it in our numbers and you will see it in our comparable numbers. So when it's positive, we need to keep it also in the non-GAAP. However, in our prepared comments, we mentioned specifically the results without this one-liner item.

當我們考慮到這一點時，是的，那是 2023 年末或年初，我們必須將其保留在我們的數據中，您將在我們的可比較數據中看到它。因此，當它是積極的時，我們也需要將其保留在非公認會計準則中。然而，在我們準備好的評論中，我們特別提到了沒有這一單行項目的結果。

So do you think the Street would be better off using the $0.11 number going forward or the $0.07 number for the baseline as opposed to the $0.11 for the simple reason that it sets up a very odd comparison and overinflates the '24 numbers, which make the 25 numbers look a lot softer in terms of appreciation? It seems to me that the $0.07 number is probably the right number to be using.

那麼，您是否認為華爾街最好使用 0.11 美元的數字或 0.07 美元的數字作為基準，而不是 0.11 美元，原因很簡單，它建立了一個非常奇怪的比較並過度誇大了 24 年的數字，這使得25號在升值方面看起來柔和很多？在我看來，0.07 美元的數字可能是正確的數字。

From my perspective, the normal course of business, if I need to use this term because we don't write off $12 million of every now and then -- the normal course of business should be probably taking the $0.07 and not the $0.11. And therefore, we are paying a lot of attention to this item, and you'll be able to see that in our investor presentation very clearly.

從我的角度來看，正常業務流程，如果我需要使用這個術語，因為我們不會不時註銷 1200 萬美元，那麼正常業務過程可能應該取 0.07 美元，而不是 0.11 美元。因此，我們非常關注這個項目，您將能夠在我們的投資者演示中非常清楚地看到這一點。

Gunther Karger.

岡瑟·卡格.

Thank you. First of all, congratulations on excellent execution and particularly probably with the advice of Fink.

謝謝。首先，恭喜您出色的執行力，特別是芬克的建議。

My question is chipsets. You did mention this in your earlier comments, but on a competitive basis, do you see any other companies coming out with chipsets that would to encroach on your expectations for your systems?

我的問題是晶片組。您在先前的評論中確實提到了這一點，但在競爭的基礎上，您是否看到其他公司推出的晶片組會侵犯您對系統的期望？

So thank you, Gunther. Thank you for this question. To the best of our knowledge, the Chinese probably have their own chip. And as for the rest of the competition, they use usually MaxLinear chip.

謝謝你，岡瑟。謝謝你提出這個問題。據我們所知，中國人可能擁有自己的晶片。至於其餘的競爭對手，他們通常使用 MaxLinear 晶片。

I am not aware -- at least not at this point -- of any development of a chip -- of a next-generation chip other than MaxLinear. And as I answered the previous question regarding the chip, we don't really know where MaxLinear is in this development. We still believe that we have probably two to three years advantage with our own chip ahead of the competition.

我不知道——至少目前不知道——除 MaxLinear 之外的下一代晶片的任何開發。正如我回答之前有關晶片的問題一樣，我們並不真正知道 MaxLinear 在這項開發中處於什麼位置。我們仍然相信，憑藉我們自己的晶片，我們可能領先競爭對手兩到三年。

Thank you. And to follow up on that, do you still anticipate some of your products that are coming on later on this year to incorporate your new chip?

謝謝。接下來，您是否仍預計今年稍後推出的一些產品將採用您的新晶片？

So as I said, we will probably start seeing the chip being used especially for commercial deployments during 2025 and that hasn't changed.

正如我所說，我們可能會在 2025 年開始看到該晶片專門用於商業部署，這一點並沒有改變。

Robert Marson, TB Partners.

羅伯特·馬森，TB Partners。

To follow up on that, Doron, saying that you're going to ship commercially is one thing, but 2% of your product versus 30% of your product is a different thing. Are the shipments using Neptune next year going to be material?

跟進這一點，Doron，說你要進行商業運輸是一回事，但 2% 的產品與 30% 的產品是另一回事。明年使用 Neptune 的出貨量會很大嗎？

So first of all, I want to make sure everybody is on the same page, because it looks to me that we need to put the chip development and commercialization in context. It’s not the first chip Ceragon has developed, and it's probably not going to be the last year. We believe that this chip will create once again, a significant advantage over the competition for a few years.

首先，我想確保每個人都達成共識，因為在我看來，我們需要將晶片開發和商業化放在上下文中。這不是 Ceragon 開發的第一款晶片​​，也可能不會是最後一年。我們相信，這款晶片將在幾年內再次創造相對於競爭對手的顯著優勢。

Would that change the company totally? No. And therefore, we do expect to see significant business, but the implementation of such chip is gradual. It's not going to make the numbers suddenly become 50% growth. If someone thinks that these are the numbers, we should talk about -- 50.

這會徹底改變公司嗎？不。因此，我們確實預計會看到大量業務，但此類晶片的實施是漸進的。它不會讓數字突然增加 50%。如果有人認為這些就是數字，我們應該談論——50。

I think that next year, we will start seeing a business. I'm not sure to what extent the business is going to be very significant. Let's not forget; the first product is going to be at least 25 gigabit per second in the box. This this is going to be the first version. Based on my experience in the industry now, there's hardly any -- most of the use cases are up to 10 gigabit per second. And therefore, while there is an interest, we'll start seeing the impact gradually.

我想明年我們就會開始做生意。我不確定這項業務會在多大程度上變得非常重要。我們不要忘記；第一款產品的傳輸速度至少為每秒 25 Gb。這將是第一個版本。根據我現在在該行業的經驗，幾乎沒有——大多數用例都達到每秒 10 吉比特。因此，儘管存在興趣，但我們將開始逐漸看到其影響。

Okay. So a gradual ramp in '25 and more impact on the revenue and income statement in '26 and '27.

好的。因此，25 年的逐步成長對 26 年和 27 年的收入和損益表產生了更大的影響。

Exactly.

確切地。

Okay. There are no further questions. I would like now to hand over the call to Doron for closing remarks.

好的。沒有其他問題了。現在我想將會議轉交多倫致閉幕詞。

Ceragon's competitive position continues to improve, and we continue to deliver on our strategic plan for growth and profitability. Our new products and solutions are gaining meaningful traction and our wins in private networks are encouraging. We believe that our new products and solutions as well as our roadmap, including the Neptune-based future products, are positioning us for long-term growth as they are expected to result in increasing market share in our space. I look forward to updating you further on our next quarterly call. Have a good day, everyone.

Ceragon 的競爭地位不斷提高，我們持續實現成長和獲利的策略計畫。我們的新產品和解決方案正在獲得有意義的關注，我們在專用網路方面的勝利令人鼓舞。我們相信，我們的新產品和解決方案以及我們的路線圖，包括基於海王星的未來產品，將為我們的長期成長做好準備，因為它們預計將增加我們領域的市場份額。我期待在下一次季度電話會議上向您進一步通報最新情況。祝大家有美好的一天。