Willdan Group Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 7, 2024

There are 8 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Ceragon Networks conference call. Our presentation today will be followed by a question and answer session. If you wish to ask a question, you'll need to raise your hand using your mobile or desktop application or press star 9 on your telephone keypad I must advise you that this call is being recorded. I'd now like to hand it over to Rob Fink, Head of Investor Relations. Please go ahead, sir.

Speaker 1

Thank you, operator, and good morning, everyone. Hosting today's call is Doron Orazi, Ceragon'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, 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 accounted related matters constitute 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. Ceragon intends forward looking statements. Terminology such as believes, expects, may, will, should, anticipates, plans, or similar expressions to identify forward looking statements.

Speaker 1

Such statements reflect only current beliefs, expectations and assumptions of Ceragon's management. Actual results, performance or achievement of Ceragon may differ materially as they are subject to certain risks and uncertainties, which could cause Ceragon's actual results to differ materially from those projected in such forward looking statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties that are described in Ceragon's most recent Annual Report on Form 20F and may be supplemented from time to time in Ceragon's other filings with the SEC, including today's earlier filing. The earnings PR, all of which are expressly incorporated herein by reference, forward looking statements relate to the date initially made, do not purport to be predictions of future events or results, and there can be no assurances that they will prove to be accurate, and Ceragon undertakes no obligation to update them. Ceragon's public filings are available on the Security and Exchange Commission's website at sec.gov and may also be obtained from Ceragon's website at ceragon.com.

Speaker 1

Also, today's call will include certain non GAAP numbers. For reconciliation between GAAP and non GAAP results, please see the tables attached to the press release that was issued earlier today, which is posted on the Investor Relations section of Ceragon's website. With all that said, I would now like to turn the call over to Doron. Doron, please go ahead.

Speaker 2

Thank you, Rob, and good morning, everyone. This was a solid start to 2024 for Ceragon. We are executing against our strategic plan and are on pace to achieve our full year growth and profitability targets. Demand for our solutions is strong and growing in North America and India in particular, and we are expanding our presence with private network customers globally. We grew revenue year over year, expanded our gross profit margins, and delivered another profitable quarter with positive free cash flow.

Speaker 2

The quarter was highlighted by particularly strong booking level. The large scale network modernization project for a Tier 1 operator in India was a major contributor to the higher bookings as we received significant initial orders against the agreement. We continued to generate strong bookings in North America as well, and we generated improved bookings in all other regions sequentially. The strong bookings give us visibility and optimism that we will achieve our full year growth and profitability targets. Our new products and solutions are serving as a catalyst for our business.

Speaker 2

As expected, our new offerings are creating higher customer interest and are starting to translate the bookings and revenue. We used Mobile World Congress as a venue to showcase our next generation solutions. We also started delivering significant quantities of 1 of our new products in the Q1. Some of the new solutions in our portfolio that are worth highlighting include: 1st, our multi hole or fixed wireless access family of point to multipoint solutions that operate in the V band frequency, opening doors to diverse applications through its use of unlicensed spectrum, along with its high capacity and short range characteristics. These quantities are ideal for both private networks and service providers aiming to establish swift connections in confined dense areas such as cities and campuses.

Speaker 2

Next, the IP50 CX, the most compact universal microwave radio in the industry. This all outdoor radio with its unparalleled versatility has the capability to form the entire network, from small cells to large scale aggregation sites, significantly simplifying network architecture, reducing costs, and accelerating time to revenue. Finally, there is the IP50EX, an ultra compact, high capacity, even radio which is ideally suited for a variety of use cases, especially when small size and low opex are priorities. As I'm sure you know, MWC is the largest most influential connectivity event in our industry. Our goals at MWC were to demonstrate our technology, communicate our millimeter wave solution, which is the industry's broadest, and also demonstrate our recent advances in microwave and millimeter wave transport and fixed wireless access.

Speaker 2

We achieved each of these goals. We had a record number of face to face meetings with customers and prospects, received great affirmations of our upcoming next gen technology, and received strong indications that we are well aligned with market needs. We provided an industry first live demonstration of the capabilities of our soon to be 100 gigabit per second e band link that is based on our new system on a chip with great feedback. We also showcased end to end private networks offering with a unique display of our broadband luminaires that integrate gigabit speed wireless connectivity into lightning infrastructure to enable smart city connectivity. Visitors to our booth learned about our professional and managed services offering and saw a demonstration of our Ceragon Digital Twin solution and how it optimizes networks for reduced costs and improved user experiences.

Speaker 2

As it relates to private networks, we made particular strides in the energy sector during the quarter. We signed new deals serving the energy industry across multiple regions with an aggregate deal value of nearly $10,000,000 These energy sector agreements underscore role we play in advancing digital or digital transformation within the energy industry facilitating the goal of network operators to achieve high capacity at reduced costs. In the second half of twenty twenty three, we expanded our talent center approach to better position Ceragon for profitable growth. In addition to our existing and very successful talent centers in Israel and Romania, we have now opened 2 new talent centers, one in Bangalore, India and one in Asuncion, Paraguay. The primary goal of these talent centers is to improve our access to the talent market, as well as to support our long term targets of growth and expanded operating margins.

Speaker 2

I'd now like to provide an overview of our Q1 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 $28,900,000 We continue to maintain our presence with large carriers and other major customers. Specifically, we saw significant demand from large ISPs for cyclus millimeter wave solutions. The headwinds service providers face have been well documented and CapEx spending by large networks has been more volatile.

Speaker 2

We continue to navigate these challenges better than many in the space, though it has reduced our line of sight to converting bookings to revenue and elongated our sales cycles somewhat. In private networks, we've made important first steps in a few new accounts, receiving initial orders and we expect the number of new customers to increase in Q2. Also, our expanded marketing initiatives in North America are just now accelerating and we hope to start seeing the fruits of these investments later this year. In India, revenue was $26,000,000 with record bookings again related to large agreement we discussed last quarter as well as high value of orders received from 1 of our long standing customers. We continue to expect delivery and deployment of new customer orders to begin in the Q2 and deployment is expected to take approximately 2 years with about 75% of the project value expected to be recognized during this timeframe.

Speaker 2

Clearly, we continue to be successful in India and North America and this is facilitating our growth and profitability. With that, I'll turn the call over to Ronen Stein, our CFO, to discuss the results in more details. Ronen, over to you.

Speaker 3

Thank you, Doron, and good morning, everyone. As Doron outlined, the Q1 represented a solid start to the year for Ceragon. 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 to today's press release. Let me now review the actual results.

Speaker 3

Revenues were $88,500,000 up 6% from $83,400,000 in Q1 2023. Our strongest regions in terms of revenues for the quarter were North America and India with $28,900,000 and $26,000,000 respectively, in line with the continuous strong demand we see in these regions. Our 3rd strongest region in terms of revenues was EMEA with $14,900,000 We had 2 customers in the Q1 that contributed more than 10% of our revenues. Gross profit for the Q1 on a non GAAP basis was $32,500,000 an increase of 14.7 percent compared to $28,400,000 in Q1 2023. Our non GAAP gross margin was 36.7%, compared with gross margin of 34% in Q1 2023.

Speaker 3

We continue to achieve high gross margins, mainly as North America becomes the strongest region in terms of revenue, with record quarterly revenues and product mix continue to be favorable while we keep costs under control. Our gross margins may continue to As for the operating expenses, in general, this quarter's operating expenses fully include the Seclu acquisition impact. Research and development expenses for the Q1 on a non GAAP basis were $8,700,000 up from $7,700,000 in Q1 2023. As a percentage of revenue, our R and D expenses were 9.8% in the Q1 compared to 9.2% in the Q1 last year. Sales and marketing expenses for the Q1 on a non GAAP basis were $10,700,000 up from $9,800,000 in Q1 2023.

Speaker 3

As a percentage of revenue, sales and marketing expenses were 12.1% in the first quarter compared to 11.8% in the Q1 last year. General and administrative expenses for the Q1 on a non GAAP basis were $5,500,000 compared to $5,000,000 in Q1 2023. As a percentage of revenues, G and A expenses were 6.3% in the Q1 compared to 5.9% in the Q1 last year. I'd note that our GAAP operating expenses include restructuring expenses associated with organizational changes, the establishment of the 2 new centers of excellence Doron mentioned earlier, as well as integration costs related to Ciflu. These charges are backed out of our non GAAP operating expenses.

Speaker 3

Operating income for the Q1 on a non GAAP basis was $7,600,000 compared with $5,900,000 for Q1 2023. As a percentage of revenues, non GAAP operating income was 8.6% in the Q1 compared to 7.1% in the Q1 last year. Financial and other expenses for for the Q1 on a non GAAP basis were $2,300,000 Our tax expenses for the Q1 on a non GAAP basis were $500,000 Net income for the Q1 on a non GAAP basis was $4,700,000 or $0.05 per diluted share compared to $3,600,000 or $0.04 per diluted share for Q1 2023. As for our balance sheet. Our cash position at the end of the Q1 was 28 $800,000 compared to $28,200,000 at the end of 2023.

Speaker 3

Short term loans were $30,500,000 compared to $32,600,000 as of December 31, 2023. We believe we have cash and facilities that are sufficient for our operations and working capital needs. Our inventory at the end of Q1 2024 was $61,000,000 down from the $68,800,000 at the end of December 2023. The reduction is mainly as our efforts during 2023 to streamline inventory levels following the improvement in components availability have materialized. We continue to monitor inventory levels, taking into consideration the improvements in availability of components and expected changes in demand.

Speaker 3

Our trade receivables are at $97,400,000 as compared to $104,300,000 at the end of December 2023. Our S0 now stands at 101 days. As for our cash flow. Net cash flow generated by operations and vesting activities in Q1 was $2,400,000 We are reiterating our full year outlook. For 2024, we expect revenue of $385,000,000 to $405,000,000 representing growth of 11% to 17% compared to 2023.

Speaker 3

This guidance includes the contribution from CECLU. Non GAAP operating margins are targeted to be at least 10% at the midpoint of the revenue guidance. 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 free cash flow for the full year of 2024. With that, I now open the call for your questions.

Speaker 3

Operator?

Operator

Thank you. In order to ask a question, please raise your hand using your mobile or desktop application and wait for your name to be announced. First question will be from Alex Henderson from Needham and Company. Alex, please go ahead.

Speaker 4

Thanks. I hope you can hear me okay.

Speaker 2

Yes, Alex. Good morning. Good morning.

Speaker 4

Good morning.

Speaker 1

Good morning.

Speaker 4

So just a couple of questions very quickly on the commentary. The 100 gig system on a chip product that's still on scheduled to be GA this year, is that correct?

Speaker 2

We intend to launch this product by the end of 2024 indeed.

Speaker 4

Okay. Perfect. And then the second, you've made a comment about the new products launched recently launched that one of them was seeing significant orders. Can you give us some more granularity around which one of the products it was and what kind of orders are you seeing and what are the ramp of those two products that were you know, such important products that were launched here in the current quarter? What's the ramp look like?

Speaker 2

Yes. So regarding the first one that we already started delivering significant quantities, it's our new all outdoor, probably the tiniest one in the industry microwave product and it gets a lot of traction IP-20C that is kind of in relative advanced stages. And definitely, we see a lot of traction. And obviously, the first links were launched with the frequencies that are associated with the Indian market because of the huge demand. But we do expect to basically have this product with much more frequencies in the coming quarters and we believe it will also ramp up very nicely in the rest of the world.

Speaker 2

As to the other product, we are talking about a smaller and more cost efficient E band that is suitable very nicely to Tier 1 operators, but also to smaller ISPs. This one we already started production and delivery, but the quantities were very minimal. And we expect this product to start contributing to our business in this quarter and definitely more significance in the 2nd part of 2024.

Speaker 4

Can you talk a little bit about the linearity that you expect over the course of the year and give us some sense of I'm assuming that the June quarter is sub $100,000,000 but up nicely from the seasonally soft this quarter of the year, the March quarter. Can you talk a little bit about linearity over the year?

Speaker 2

So look, one major factor that will impact the linearity is obviously the fact that in Q2 we are starting to deliver our products and obviously also starting the installation of the big contract we won with the new customer in India. And that by itself should put us in a level of revenue that is higher. Generally speaking, following Q1 booking, Basically, the backlog we have enabled us to get to $100,000,000 The main, so to speak, 2 factors that will define whether we will be able to kind of create a more rationalized quarter over quarter revenues are basically 2. 1, the customer demand and the pace they want us to deliver these orders. And second, our ability and capacity to manufacture the products in a timely fashion.

Speaker 2

Now in terms of manufacturing capacity, we have no issue. But yet as a very cautious company, until we receive the large orders or the initial large orders from India, we are very careful in terms of component buying. And that may cause certain delays that I think that within less than a quarter we'll be able to overcome. So to summarize, in Q2, we do expect a ramp in the business or in the revenue generation. But I think that during the second half of the year, assuming customers continue with the same, so to speak, expectations of delivery timeline, we will probably be achieving beyond $100,000,000 a quarter in this second part.

Speaker 4

And the gross margin numbers, 36.7% in the quarter. I'm assuming that you're not going to be doing that again here in the June quarter or even in the back half with the mix shifting towards India, which generally a lower margin. Is it reasonable to think that that's more on the 35.5ish range for the next couple of quarters as that kicks in and you have start up costs with your new products?

Speaker 3

Yes. Hi, Alex, it's Onan. As I said in the previous call, I think that we would be around between the 35% to 37%. On average, we will we opt to target to reach the 36%. So, yes, something in between the 35.5% 36% as an average is reasonable.

Speaker 3

It might go down to around 35%, but it might go up also to 37, depending on the specific quarter, specific mixture by regions and a specific product mixture or services mixture, whether we give more software or not, very much dependent on how backlog is being the very good backlog that we have is converted depending on the specific needs in each quarter of the customers.

Speaker 2

Just to add on top of it, I think in the last in the previous call, we said that we are planning for further improvement in our gross margin on an annual basis. Last year, we ended up with a gross margin that is slightly shy of 35% non GAAP. And as we said in the previous conference call, we are shooting and we believe that with the right, so to speak, mix, no big changes in what we expect, We are nearing we will be nearing the 36% and that's our minimum goal for this year.

Speaker 4

One last question, then I'll cede the floor and get back in queue. Can you remind us where we are on the book to bill in the as we exited 'twenty three and what the book to bill looked like in the Q1?

Speaker 2

Yes. Look, first of all, we did not specifically refer to that in the last two quarters because I think that on a quarterly basis it may mislead. Last quarter and for the full year of 2023, we were with book to bill above 1. And also after this quarter, and I think that my prepared comments were alluding to that very strongly, we had a huge book to bill that is hugely above 1. And I don't want to kind of create a situation where people are maybe misled by this because obviously getting this amount of orders from India in advance in order to prepare us to the very big volumes of delivery is not necessarily indicating what we expect to happen each and every quarter.

Speaker 2

So all in all, very strong end of 2023, very strong beginning of Q1 2024. I think that the way to look at the bookings is more on a trailing 12 month approach. And definitely on a trailing 12 month period, we are way above 1 in terms of book to bill.

Speaker 4

That's very helpful. Thank you so much. I'll let anybody else get into the queue here.

Operator

Thank you. Our next question is from Rommel Dioniso of Aegis Capital. Rommel, please go ahead. Rommel?

Speaker 2

Rommel, hi, we cannot hear you.

Speaker 5

Doron, can you hear me okay?

Speaker 2

Yes, I can hear you. Hi, Romain.

Speaker 5

Sorry about that.

Speaker 4

I had

Speaker 2

you on mute.

Speaker 5

Thank you. So, you've obviously made significant progress on the private network. So I wonder if you could just give us a little more color on that. Obviously, some significant events here over the last several months and the business prospects both in North America and Europe for that. Thank you.

Speaker 2

So, I will start with what I was saying in the previous conference call. We ended up last year with $40,000,000 booking in the Private Networks and we aspire to double this amount in 2024. This plan has not changed and we definitely see a path for getting to this level of booking. I think this quarter was characterized by a lot of good results of hard work, especially in the Energy segment, where we received nearly $10,000,000 value of orders from this segment. And I think that with our unique solution plus the fact that we have a good brand of some sort of system integrator concept in this particular segment.

Speaker 2

We are seeing the fruits of focusing on this segment that is going through huge transformation, digital transformation across all segments. So that's definitely encouraging. On top of that, we look at the funnel and our funnel is increasing very, very nicely and that means that we have very strong signals that we are getting traction with our solutions, our marketing efforts that we started in much higher pace towards the end of last year, but also increased it as part of our budget in Q1 are also showing very strong signs of traction. And therefore, I'm quite optimistic about our ability to achieve this double number doubling the number of booking in this year and maybe even exceeding it.

Speaker 5

Great. Thanks very much for the color.

Operator

Okay. Once again, in order to ask a question, please raise your hand using your mobile or desktop application and wait for your name to be announced. Our next question is from Gunther Karger. Please go ahead, Gunther.

Speaker 3

Hi, Gunther. Hi, Gunther.

Operator

Please unmute. Okay. So maybe we'll move along for now to Alex Henderson. Alex, go ahead.

Speaker 2

Alex, we cannot hear you. Can you check your, your side of the connection?

Speaker 6

Unmute. Can you hear me now?

Speaker 2

Yes. Yes, Gunther, go ahead.

Speaker 6

Sorry. Regarding the medical industry, a specific market, there's been a rise of interest in the artificial intelligence, the diagnostic areas and such things. With regard to the short range, millimeter range systems and diagnostic data transmissions, has there been any notice of market interest in that area?

Speaker 2

So I would say the following. First of all, what we are seeing following the acquisition of CECLOO that, by the way, is actually heading or moving forward as planned and even slightly better. There's a lot of traction for short millimeter wave transport solutions and fixed wireless access, especially in dense areas. And that's obviously definitely encouraging because this was the purpose of the acquisition. So in this respect, we see a lot of traction and we believe that we can increase our business in this domain, definitely leveraging our position following the acquisition of Seclue.

Speaker 2

In terms of AI, I know that people are asking questions. Some of these questions are coming via e mail. Guys, we have already AI embedded in our software, and we have different use cases where AI can be used for optimization of either the network or the wireless transport piece. And with our digital twin, we can even expand it beyond just the transport itself. So we are already using this kind of tools, and it's our intention to continue leverage these kind of capabilities into our software solutions and our products.

Speaker 6

Thank you and good luck on that. It's a big growing market.

Speaker 2

Thank you.

Operator

Our next question is from Alex Henderson from Needham and Company. Go ahead.

Speaker 4

I think I'm unmuted, right?

Speaker 2

Yes. Yes. Now you're good.

Speaker 4

Yeah. It didn't pop up on mute in a timely fashion earlier. So I get it that you've had some very large orders, here. I get it that, the timing of that heavily skewed to the Q1 sets you up for very strong deployments over not just to the back half of this year but also into 'twenty five. But I was wondering, given that those orders, is your pipeline of additional deals still healthy?

Speaker 4

And you know, or is there enough heft in that to continue to build more order flow over the course of the remainder of

Speaker 2

the year? What does the pipeline look like? So the pipeline looks quite healthy. And we also actually made that comment in my prepared comment. We're also encouraged by the progress we made in other regions.

Speaker 2

It was kind of the Q1 in this year and probably for a few quarters where all other regions without any exception had a sequential growth in the booking versus the obviously previous quarter. So that's also a good sign for us. We see a healthy pipeline in most of the regions. We see a nice pipeline, as I said, in the private networks and increasing. And this give us the confidence, the level of confidence that we need to feel comfortable in the path and in the target we set to ourselves for 2024.

Speaker 4

Okay. And just going back to the inventory, I think your inventory is still a little higher than normal. How do you see that feathering down over the year? And is that going to be tied to the shipments into India? Or is that just normal course of business?

Speaker 4

How do we think about it?

Speaker 3

So Alex, first of all, thank you for the question because yes, indeed, inventory reduced substantially this quarter. We reduced inventories from $69,000,000 to $61,000,000 So it's a positive sign because it's for quite a few quarters. I think that the last time we were in this level was around 2022. And we made a lot of progress in 2023 to come to this stage where inventories come down. And we believe that there is more room to decrease inventory.

Speaker 3

I'm not sure about quarter to quarter levels, but over the year to continue to decrease and we have a plan to continue to decrease the inventories by at least a few couples of 1,000,000. This is associated, of course, with the fact that we built up inventories for the new products that are now being materialized and that we are now going to start to sell over this year, and then we can streamline the new products as well as coming back from the post COVID-nineteen building of inventories due to the challenges that we had of sourcing of components at these years.

Speaker 2

Alex, just to add on top of Ronen's comment, the only issue of managing our inventory that is obviously a big item on our balance sheet has stepped up dramatically since we started seeing the component market rationalizing. And there's a lot, a lot of activities of, on the one hand, building our plans to more of a just in time delivery of components. Obviously, looking at some excess and working with this excess inventory very fast in the process and not waiting too long. And all of that is creating a much more meticulous handling of our inventory. So I truly believe that we will be able to continue in this trend.

Speaker 2

There's only 2 factors that you need to take into account. 1 is that we need also to look at the inventory as a percentage of our volume of business. So if we are ramping up and we'll go to the $400,000,000 revenue and maybe even exceed it, we might see the inventory rationalizing as a percentage of revenue. Definitely, if the part of the revenue that is associated with our hardware product is the one that is growing significantly. And the other thing is that sometimes I'm making decisions on a quarterly basis to get equipped with some level of inventory in advance, expecting some capacity or overcoming some capacity issues that may come because of deliveries that are specific for a specific quarter.

Speaker 2

So these are the 2 caveats. The bottom line is, yes, we do expect to continue rationalizing our inventory and we do expect to see further better results down the road.

Speaker 4

Yes. In that context, obviously, you've got a very large order ramping for India. And then second, you've got 2 new products that are ramping now and then another one that slated to launch late in the year. Should we be looking at some start up costs associated with those? Or is that embedded in your thinking at this point?

Speaker 4

And what size of a cost is that, that will eventually fall out as those products hit the normalized production level? So these costs are already embedded in our projections.

Speaker 2

We took them into account. Usually, we try to rationalize these costs and to make these costs happen gradually so they don't have a big impact on a specific quarter. If that happens, obviously, we are going to disclose this kind of situation, but we don't expect that. So eventually, when we are talking about our gross margins for the rest of the year, We have taken into account the fact that we launched the 2 new products. I don't think that the new 100 gigabit E band will have an impact on this year.

Speaker 2

But as for the other products, it's taken into account and I do expect our gross margins from these products to improve almost by the quarter as we're able to improve our performance in terms of manufacturing and BOM cost.

Speaker 4

What I was trying to calibrate was the to what extent that abnormally large amount of startup costs in 2024 would then fall out in 2025 as the as these products are normalized and whether that would then imply some further upside in the gross margin in the out year. I know you don't want to give guidance for 25%, but conceptually, is that a logical conclusion?

Speaker 2

Look, the startup cost that you would see are actually categorized into 1 is our investment in CapEx to build the testing equipment or to enhance the testing equipment to feed the new products. And that you will see in some investment in CapEx. But generally speaking, I don't think that investment in CapEx is going to be that different from previous years. And the other set of costs that are actually going to the expenses immediately, I would not give them more than, I don't know, half a percent of the gross margin.

Speaker 4

Okay. Thank you.

Operator

Okay. Our next question is from Jeff Rosenberg from Rail Splitter Capital. Jeff, please go ahead and unmute.

Speaker 2

Hi, Jeff.

Operator

Yeah, Please go ahead

Speaker 7

and unmute.

Operator

Jeff, we can't hear you.

Speaker 7

Oh, I think you guys muted me and

Speaker 5

then unmuted me. Sorry. Can you hear me now?

Speaker 2

Yes, Jeff.

Speaker 7

Good morning. Good morning. I just wanted to ask if you could tell us what the contribution was from CECLUE in the Q1?

Speaker 2

Look, we do not include and we don't want to separate the cyclo contribution for a very simple reason. This is a tiny transaction and the integration is so fast and so to speak deep that it's almost becoming impossible to separate the numbers. Yet just in a quality fashion, I can tell you that in the Q1 the contribution to the gross margin of SIKLU was even slightly higher than our expectation. And in terms of the business and the booking, it was also as strong as we were expecting. And I'll just remind you that our projection for 2024 was that Siglu will contribute from their specific products between $25,000,000 to $29,000,000 in 2024.

Speaker 2

I think that we are on a path to achieve it. And if all stars align, maybe in the 2nd part of the year, we'll be able even to exceed this number.

Speaker 7

Great. And yes, and the reason I was asking was just about looking at the year over year or even sequential growth because I think you got some contribution from ZCLU in Q4. The growth looked a little slower, but I just I know it's uneven and seasonality and so maybe the comparison against last year was difficult. So maybe just to kind of talk about the just overall strength in terms of revenue in the Q1 versus obviously very good bookings and building visibility for the year.

Speaker 2

So Jeff, if you are willing to sign an NDA and join our finance team next quarter, I would love to have you on board because you hit the nail on the head. There were a few moving factors that we thought that eventually if we try to explain them, we just get everyone confused. First of all, usually Q1 is weaker and last year was a bit different for us to the good side, primarily because of some delays in delivery of some of the products that were supposed to come or to be delivered in Q4 of 2022. So starting to put all these ingredients moving up and down and trying to give a more rationalized analysis of the growth, we thought that it will just confuse anyone. I think that the most important thing, especially after Alex's comment about, okay, how rationalized and aligned the revenue growth between quarters, that was indicating that we may see some fluctuations.

Speaker 2

So I would not be impressed by the percentage of the Q1 versus Q1 in 2023 In terms of projecting, how the full year of 2024 is going to look like?

Speaker 3

I would add that the most important thing that we gave guidance for this year and the guidance was for revenues between $3,000,000 $3,85,000,000 to $400,500,000,000 And we are still we still expect to reach this guidance. And we as Doron mentioned in the prepared comments, we have better visibility due to the higher volume of bookings. So we are on target at this stage.

Speaker 7

Great. Well, thanks for that color. Appreciate it.

Operator

Thank you. There are no further questions, so please proceed.

Speaker 2

So as I said, this was an encouraging quarter and a solid start to the year for Ceragon. We are executing against our growth strategy and capturing market share. We believe that we are well positioned 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.

Powered by Quartr
Earnings Conference Call
Willdan Group Q1 2024
00:00 / 00:00