Ceragon Networks Ltd. CRNT reported fourth-quarter 2024 adjusted earnings per share (EPS) of 9 cents, which missed the Zacks Consensus Estimate by 10%. The bottom line increased 125% year over year.

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Revenues rose 18.3% year over year to $106.9 million. Also, the top line surpassed the Zacks Consensus Estimate by 2.8%. Revenues for the  quarter reached its highest quarterly level since the fourth quarter of 2014.

Ceragon Networks Ltd. Price, Consensus and EPS Surprise

Ceragon Networks Ltd. price-consensus-eps-surprise-chart | Ceragon Networks Ltd. Quote

On Feb. 7, 2025, Ceragon completed the acquisition of End 2 End (E2E) Technologies, a U.S. systems integration and software firm serving Private Networks in the Energy and Utilities sectors. E2E brings expertise in radio frequency communications, broadband, narrowband and industrial applications. On Jan. 14, 2025, the company signed a definitive agreement to acquire E2E Technologies. The transaction is valued at approximately $8.5 million, with an additional potential payment of up to $4.3 million contingent on the company meeting specific financial targets in 2025, to be paid primarily in 2026.

Upon closing, Ceragon plans to fund the cash portion using its existing cash reserves and available credit facilities while issuing around 215,000 ordinary shares. This acquisition is projected to contribute an incremental $15-19 million in revenues for Ceragon in 2025. The acquisition is expected to be accretive to Ceragon’s non-GAAP earnings by the second half of this year.

Management stated that E2E Technologies strengthens its telecom connectivity solutions with system integration and a unique network management platform, enhancing private networks in North America.

CRNT’s Segment Results

India: The segment generated revenues of $$55.6 million (contributing 52% to total revenues), up from $50.5 million reported in the previous quarter. CRNT generated record quarterly revenues from India market. Visibility in the region is improving as commercial terms for 2025 are being finalized with two major customers. The new IP-50EXA product, incorporating features requested by existing customers in India and other markets, is expected to be delivered in the second half of 2025. Additionally, competitive advantages are being driven by pricing strategies and operational efficiency.

Europe, the Middle East and Africa (EMEA): The segment generated revenues of $16.2 million (contributing 15% to total revenues).

North America: The segment generated revenues of $13.4 million (contributing 12% to total revenues). North America saw an increase in bookings in the quarter under review. Higher bookings from this segment, particularly from tier-1 service providers, helped offset delays from private network customers.

Asia–Pacific (APAC): contributing 11% to total revenues. APAC had a strong quarter, securing new business that included Siklu by Ceragon products.

Latin America: contributed 10% to total revenues.

CRNT’s Operating Details

In the reported quarter, non-GAAP gross profit increased 15.5% to $36.7 million on a year-over-year basis. Non-GAAP Gross margin for the fourth quarter was 34.3% compared with 35.1% in the same period last year. Despite changes in the regional revenue mix, the company maintained gross margin by increasing revenues, continuously improving product costs and effectively managing fixed costs.

In the fourth quarter, non-GAAP research and development (R&D) expenses totaled $8.8 million, an increase from $7.7 million in the year-ago quarter. Non-GAAP Sales and marketing expenses for the quarter amounted to $10.6 million, up from $10.2 million. Non-GAAP General and administrative (G&A) expenses were $5.1 million, down from $6.1 million a year ago.

Adjusted operating income for the quarter was $12.2 million, up from $7.8 million.

CRNT’s Balance Sheet & Cash Flow

As of Dec. 31, 2024, cash and cash equivalents were $35.3 million compared with $28.2 million as of Dec. 31, 2023. Net trade receivables increased to $149.6 million from $104.3 million over the same period.

CRNT generated an operating cash flow of $1.1 million for the fourth quarter compared with $11 million in the year-ago quarter.

CRNT’s Outlook

Management has provided revenue and operating margin guidance for 2025, projecting revenues between $390 million and $430 million, including contributions from the E2E acquisition. Non-GAAP operating margins are expected to be at least 10% at the lower end of this range, with improved free cash flow compared with 2024.

Zacks Rank

Currently, CRNT has a Zacks Rank #3 (Hold). Shares of the company have surged 30% in the past six months against the Zacks Wireless Non-US industry's decline of 6.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Recent Performance of Other Companies in Broader Tech Space

Plexus Corp PLXS reported first-quarter fiscal 2025 adjusted EPS of $1.73, up 40.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.59 per share.

In the past year, shares of PLXS have gained 50.8%.

Seagate Technology Holdings plc STX reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.

In the past year, STX shares have gained 12.3%.

America Movil, S.A.B. de C.V. AMX reported net income per ADR of 15 cents for the fourth quarter of 2024, down from 33 cents in the prior-year quarter. The earnings figure missed the Zacks Consensus Estimate by 51.6%.

Shares of AMX have declined 12.7% in the past year.

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