Ceragon Networks Ltd.

Ladies and gentlemen, thank you for standing by and welcome to Ceregon Network's earnings call. Our presentation today will be followed by a question and answer session, at which time, if you wish to ask a question, you'll either raise your hand using your mobile or desktop application, or press asterisk on your mobile keypad and wait for your name to be announced. I must advise you that this call is being recorded today. I'd like to hand over the call now to our first speaker today, Rob Fink, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Hosting today's call is Daron Arazi, Saragon's Chief Executive Officer, and Ronen Stein, Chief Financial Officer. Before we start, I'd 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 private securities litigation reform act of 1995. saragon intends forward-looking terminology such as believes expect may will should anticipates plans or similar expressions to identify forward-looking statements Such statements reflect current expectations and assumptions of surrogate management. Actual results may differ materially as they are certain 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 Saragon's most recent annual report on Form 20F, and as may be supplemented from time to time in Saragon'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. Forward-looking statements relate to the date initially made, and they are not predictions of future events or results, and there can be no assurance that they will prove to be accurate, and Saragon undertakes no obligation to update them. Saragon's public filings are available on the Securities Exchange Commission's website at scc.gov, and they may also be obtained from Saragon's website at saragon.com. On today's call, we will include certain 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 Saragon's website. With all that said, I'd now like to turn the call over to Daron. Daron, the call is yours.

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. 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. 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 Ciklio acquisition has continued in accordance with our plans and has been helping to enhance our competitive position with ISP and private networks customers. 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 tier 1 operators primarily in India and North America. 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 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. 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 IP50EX, 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. 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. 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. We continue to release more frequencies of our 50CX, 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. I'd now like to provide an overview for 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. 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 C-CLU by Ceregon products, primarily to ISPs. 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 T1 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 one customers. We were successful in this quarter and we are encouraged by the trends. 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 longstanding 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. 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. 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 significant growth in private network business. This is very encouraging, especially in light of the first competition against Chinese vendors in those regions. With that, I'll turn the call over to Ronen Stein, our CFO, to discuss the results in more detail. Ronen, over to you.