Ceragon Networks Ltd.

Welcome to Saragon Network's fourth quarter and full year 2021 earnings conference call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation, in which time, if you wish to ask a question, you will be able to raise your hand using your Zoom mobile or desktop application and wait for your name to be announced. As a reminder, this conference is being recorded today. It is now my pleasure to introduce your host, Maya Lustig, Head of Investor Relations for Saragon. Thank you. Now may I begin.

Thank you, Operator, and good morning, everyone. I am joined by Daron Arazi, Saragon's Chief Executive Officer, and Ron Barrett, Saragon's Chief Financial Officer. Before we start, I would like to note that this call includes information that constitutes forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviation therefrom will not be material. Such statements involve risks and uncertainties that may cause future results to differ materially from those anticipated. These risks and uncertainties include but are not limited to such risks, uncertainties, and other factors that could affect our results as detailed in our press release that was published earlier today and as further detailed in Saragon's most recent annual report on Form 20F and in Saragon's other filings with the Securities and Exchange Commission. Such forward-looking statements represent our views only as of the day they are made and should not be relied upon as representing our views as of any subsequent date. Such forward-looking statements do not purport to be predictions of future events or results and there can be no assurance that they will prove to be accurate. Seregon may elect to update his forward-looking statements at any point in the future but it specifically declaims any obligation to do so. Seregon's public filings are available on the Securities and Exchange Commission's website at www.sec.gov and may also be obtained from Seregon's website at www.seregon.com. Also, today's call will include certain non-GAAP numbers For a reconciliation between gap and non-gap results, please see the table attached to the press release that was issued earlier today. I will now turn the call over to Doron. Please go ahead.

Thank you, Maya, and good morning, everyone. We had a relatively good end to a highly challenging year. I'm pleased to share with you that we delivered at the high end of our projected annual revenue range at $291 million. But our best efforts and success in delivering revenues were overshadowed by the many challenges the business world experienced in 2021. As I mentioned in our previous calls, the global component shortages, supply chain disruptions, and shipping bottlenecks have rattled many industries, including ours. They led to increased prices. As such, our financials have been materially impacted throughout 2021. Our gross margin for the fourth quarter was 29%. It is our belief that if it weren't for such strong turbulence in these industries, our gross margin would have been around 3% higher. We maintained our strong position in the market, but it came at a cost. Looking ahead, we have an optimistic view. We believe the crisis will eventually come down and we will see improvements in the second half of 2022. Until then, we are looking to overcome component shortages and looking into new ways to improve the cost competitiveness of our products without compromising on quality and performance. We are also working on optimizing our shipping costs. This is all part of our delivery through margin expansion strategy. Looking at our overall financial results for Q4, I am pleased to report that we have been on track with our expectations all the way down to the operating income on a non-GAAP basis. In fact, we would have been at a break-even point for the second half of 2021 if it weren't for higher than expected financial expenses. Ron will elaborate on this further. In 2021, the majority of our business came for 4G. That said, 5G is growing fast, especially in North America, Europe, and to a certain degree in APAC. I am very pleased with the fact that in these regions, our 5G bookings made up for over one-third of all bookings. In two to three years, we expect our business to mostly come from 5G. This past year, we continued to win in our domain by focusing on best-in-class all outdoor microwave and millimeter wave market segments. Our recent products, such as the IP50e, and the IP50C with our SDN suite made strides in the market. We engaged with UPOC's trials and orders with an increasing number of prominent market players and other T1s. We ended this year selling quite significant quantities of IP50E and IP50C equipment. This is a great achievement, especially given the relative short time passed since their launch, and given the fact that we don't have all frequencies available yet. Beyond our core domain, I'm pleased to share with you that the 5G era provides us with many opportunities. From open RAN to disaggregated sense site routers and to disaggregated wireless transport, the trend towards opening the network is strong. Our product strategy for disaggregated wireless transport with the round software and layer 3 routing capabilities position us ahead of the curve. In Q4, we partnered with IP Infusion. Through this partnership, we are delivering the industry's first radio-aware disaggregated cell site router. In parallel, we just launched our IP50SX disaggregated cell site gateway solution. It is now generally available for sale and deployment. Disaggregated routing is an open wireless transport architecture that decouples the hardware and the software elements of routers. The IP50FX uses best-of-breed software as well as best-in-class hardware. Beyond that, it also integrates two essential cell site elements into a single scalable product, a cell site router and a radio indoor unit. It provides mobile service providers and private networks a faster, more cost-effective way to deploy and upgrade 4G and 5G cell sites. I'm also proud to share with you that our new IP50FX has been awarded the prestigious Telcom Infra project Requirement Compliance Ribbon, and is listed on TIP Exchange. TIP is a diverse global community of communication solutions and service providers whose goal is to advance high-quality connectivity worldwide. They do so by accelerating the deployment of open, disaggregated, and standards-based solutions. The IP50FX is the only wireless transport equipment that has received this award so far. The market timelines of IP50FX and its steep ribbon is a testament to our technological leadership, our passion for innovation, as well as our understanding of the industry's direction and the adjustments we need to make to maintain our technological edge. IP50FX gives us the first mover advantage, helping us to grow market share in the $4 billion wireless transport and in the $2 billion cell site routing market. As 5G brings more network complexity, more and more companies are turning to us to manage their wireless transport with our managed services offering. While smaller carriers and private networks benefit the most from this, Large companies turn to us as well to provide them with either partial or full services for operating the transport network. One example is our recent engagement with Globacom, on which I will elaborate later. We have a presence in 140-plus countries, 50 of them strongly so. We have served more than 2,000 customers throughout the years. So, you see, on top of our technological capabilities and software tools, we have the resources and the experience to become a one-stop shop for our existing customers as well as new ones. Our decision to focus on strengthening our managed services offering, leveraging our software tools, will strengthen our relationship with our customers, increase our recurring revenue, giving us more visibility, reduce the lumpiness of our business results, and improve our gross margins. We have just ratified our mid- and long-term strategy with our board of directors. This strategy, which is comprised of increasing our traditional business and expanding into managed services business as well as new markets, such as the sell-side routing market, is designed to guide us to a new phase of growth through margin expansion. With our now more optimistic view about the main challenges we faced in 2021, we expect our revenue for 2022 to range between $305 and $320 million. Let me now give you an overview per region. In North America, although bookings in Q4 are a bit lower than in previous ones. Overall, 2021 was a record year for us. Our 5G Design Wind customers generated more than 50% of the booking for this region. In Q4, I'm pleased to report that our lab tests with our T1 operator customers continued and have been successful so far. We expect the testing process to continue during the first half of the year. Looking ahead, in North America, we see significant federal investments to expand networks to rural North America. We see the region's critical infrastructure markets grow. Our goal is to leverage these developments, and to that end, we are restructuring our organization in this region. In India, Q4 was a healthy quarter for us. On an annual basis, we had a very strong year, surpassing our record since 2018. This industry performed strongly as post-COVID recovery continued. We saw sustained demand for network upgrades and expansion. We believe the future of 5G in India is bright. As 5G corridors are developed in the region, we will be there to participate in the RFP. In Europe, we had another strong quarter. We won two tenders with Rayway, Italy's national TV and radio network provider, to renew and maintain their wireless transport network infrastructure. We successfully finished IP50-FX POC with a leading tier one operator. We will be undertaking SDN trials with another operator and IP50-FX trials with a third operator. The future of 5G in Europe is strong, and we feel confident about all these trials. When we look at our activity in European continent on an annual basis, 2021 was a record year, surpassing the last eight years in terms of bookings. Our 5G design win customers generated more than 30% of the annual bookings for this region. In APAC, while there have been signs of a new momentum, 2021 was a difficult year. Many business decisions were pushed to 2022. That said, we continued building a solid pipeline for potential future partnerships. In Latin America, the macro environment remained challenging. The South Pole was adversely impacted by the economic crisis. The rest of Latin America, too, experience a variety of different challenges, including COVID. All that said, we have a new customer in Mexico who is expected to evaluate our IP50FX in Q1 2022. We also built a solid pipeline of government-funded projects in Mexico and Peru. There are initiatives to close the digital divide between different communities. We are doing our best to take part in such projects. In Africa, we had a very strong second half. We received booking from a Tier 1 operator worth $5 million. We signed and received POs for a multi-million dollar deal with Globacom, a Tier 1 Nigerian telecom operator. We will be providing Globacom with a customized solution that covers long-haul rural areas, high-capacity metro, as well as the access network. We will help them to not only enhance their existing subscribers' quality of experience, but also to expand their reach to further grow their market share. We will also be providing them with deployment services and managed services for monitoring the health of their network as well as first-tier support. With that, let me now turn the call over to Ran to discuss the financials for the quarter. Ran?