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    CRNT
    Earnings call· Jun 2026(Q2 FY26)

    CERAGON NETWORKS Q2 FY26 earnings call CRNT

    Aug 11, 2026 Source

    Executive summary

    Ceragon Q2 FY26 — Strong Bookings and E-Band Demand Drive Growth

    Ceragon delivered a strong second quarter, marked by record bookings and robust demand for its E-Band products and private network solutions, particularly in India and North America. Despite persistent supply chain challenges and resulting gross margin pressure, the company is capitalizing on a shifting competitive landscape and expanding its market reach through new technologies and managed services. Management remains confident in its long-term growth trajectory, driven by increasing TAM and strategic initiatives.

    Highlights

    5

    • Revenue increased 14% year-over-year to $93.9 million, driven by strong demand in India and North America.

    • Bookings reached their highest level since Q1 2024, with H1 2026 book-to-bill ratio being the highest in 10 years.

    • Secured approximately $120 million in orders from Indian operators through late July, primarily for 4G/5G network expansion and modernization.

    • Private network bookings in North America reached a record high, reflecting accelerating global opportunities.

    • Secured a 5-year, up to $70 million agreement with a Tier-1 mobile operator in APAC, demonstrating long-term strategic relationships.

    Concerns

    4

    • Non-GAAP gross margin declined to 32.2% from 35.2% in Q2 2025, negatively impacted by geographical/product mix and cost pressures.

    • Non-GAAP operating income decreased to $4 million (4.2% of revenue) from $4.7 million (5.7% of revenue) in Q2 2025, also impacted by adverse foreign currency movement.

    • Full-year 2026 gross margin guidance lowered to 33.5%-34.5% (from 35.5%) and operating margin to 5%-6% (from 6.5%-7.5%) due to anticipated cost pressures.

    • Supply chain challenges, including component costs and lead times, are expected to persist and pressure gross margins over the remainder of 2026.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $355 million to $385 million
    high materiality
    High
    Full-year 2026 Non-GAAP Gross Margin
    33.5% to 34.5%
    high materiality
    High
    Full-year 2026 Non-GAAP Operating Margin
    5% to 6%
    high materiality
    High
    Revenue impact from new Tier-1 North America customer
    Meaningful revenue
    medium materiality
    Medium
    Long-term Revenue Growth
    High single-digit growth
    high materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    India
    Strongest region for revenue, driven by 4G/5G network expansion and modernization, and fixed wireless access. Exceptionally strong bookings in H1 2026.
    Bookings (YTD through July): $120 millionBookings (H1 2026): Highest in 10 years
    		$45 million———
    North America
    Strongest region for revenue alongside India. Revenue from key Tier-1 carrier was slightly higher than anticipated, despite some Q2 shipments shifting to Q3. Private network opportunities accelerating with record bookings.
    Private network bookings: Record high
    		$21 million———
    EMEA
    Seeing payoff from recent leadership changes and investments, with Q2 bookings reaching a near 3-year high.
    Bookings (Q2 2026): Highest in almost 3 years
    		————
    Latin America
    Secured a significant managed services contract with a major mobile operator in Mexico, expanding relationship beyond equipment.
    Managed Services contract: $3.5 million over 2 years
    		————
    APAC
    Secured a long-term agreement with a Tier-1 mobile operator, validating ability to build strategic relationships.
    Tier-1 mobile operator agreement: Up to $70 million over 5 years
    		————

    Operational metrics

    21
    Revenue
    $93.9 millionup 14.2% YoY from $82.3 million
    Q2 FY26

    Strongest regions for revenue were India and North America.

    Non-GAAP Gross Profit
    $30.3 millionup 4.4% YoY from $29 million
    Q2 FY26

    Gross profit for the second quarter on a non-GAAP basis.

    Non-GAAP Gross Margin
    32.2%vs 35.2% in Q2 FY25
    Q2 FY26

    Expects continued pressure over remainder of 2026.

    Non-GAAP R&D Expenses
    $8.2 millionup from $7.2 million in Q2 FY25
    Q2 FY26

    Non-GAAP R&D expenses for the second quarter.

    Non-GAAP Sales and Marketing Expenses
    $12.3 millionup from $11.1 million in Q2 FY25
    Q2 FY26

    Non-GAAP sales and marketing expenses for the second quarter.

    Non-GAAP G&A Expenses
    $5.7 millionvs $5.9 million in Q2 FY25
    Q2 FY26

    Non-GAAP G&A expenses for the second quarter.

    Non-GAAP Operating Income
    $4 millionvs $4.7 million for Q2 FY25
    Q2 FY26

    Non-GAAP operating income for the second quarter.

    Non-GAAP Financial and Other Expenses
    $1.6 millionvs $1.7 million in Q2 FY25
    Q2 FY26

    Non-GAAP financial and other expenses for the second quarter. Foreign exchange conditions stabilized.

    Non-GAAP Tax Expenses
    $0.7 million
    Q2 FY26

    Non-GAAP tax expenses for the second quarter.

    Non-GAAP Net Income
    $1.7 millionvs $2.5 million for Q2 FY25
    Q2 FY26

    Non-GAAP net income for the second quarter.

    Non-GAAP EPS
    $0.02vs $0.03 for Q2 FY25
    Q2 FY26

    Non-GAAP diluted EPS for the second quarter.

    Cash and investments balance
    $34.8 millionvs $38.4 million at end of FY25
    Q2 FY26

    Cash position at the end of the second quarter.

    Short-term loans
    $12 millionvs $19 million at end of FY25
    Q2 FY26

    Short-term loans at the end of Q2 2026.

    Net cash position
    $22.8 millionvs $19.4 million at end of FY25
    Q2 FY26

    Net positive cash position at the end of the second quarter.

    Inventory
    $59.5 milliondown from $61.6 million at end of FY25
    Q2 FY26

    Inventory at the end of the second quarter.

    Trade receivables
    $101.3 millionup from $99.7 million at end of FY25
    Q2 FY26

    Trade receivables at the end of the second quarter.

    DSO
    107 days
    Q2 FY26

    Days Sales Outstanding.

    Net cash generated by operations and investing activities
    $0.3 millionvs $5.6 million in Q2 FY25
    Q2 FY26

    Net cash generated by operations and investing activities for the second quarter.

    Net cash provided by operating activities
    $5.1 millionvs $10.8 million in Q2 FY25
    Q2 FY26

    Net cash provided by operating activities for the second quarter.

    Net cash used in investing activities
    $4.8 millionvs $5.1 million in Q2 FY25
    Q2 FY26

    Net cash used in investing activities for the second quarter.

    Customer concentration
    2
    Q2 FY26

    Two customers contributed more than 10% of revenues in Q2 2026.

    Industry KPIs

    8
    MetricValueDetails
    Backlog order book—
    Book to bill ratioHighest in 10 years
    Orders backlog qualityHighest in 10 years
    Product orders order growth$120 millionUSD
    Ai cloud infrastructure orders—
    Recurring software service revenue—
    Revenue mix by product customer typeIndia: $45 million; North America: $21 millionUSD
    Design wins product cycle transitionsSuccessful

    Orderbook & backlog

    2
    BookingsHighest level since Q1 2024Q2 FY26

    Bookings and the book-to-bill ratio in the first half of 2026 represent the highest in the last 10 years for any first half period.

    India Orders$120 millionlate July

    booked approximately $120 million in orders from operators in India through late July. These orders are primarily driven by 2 of the country's leading mobile operators and support both the expansion and modernization of nationwide 4G and 5G transport networks.

    Deals & partnerships

    2
    Major mobile operator in MexicoManaged Services contract$3.5 million2 years

    Demonstrates opportunity to increase value provided to customers and build a more diversified revenue base.

    Tier-1 mobile operator in APAC5-year agreement renewalup to $70 million5 years

    Renewal of a significant long-term engagement.

    Risks & headwinds

    3
    Supply chain challenges and component cost pressuresover the remainder of 2026

    Gross margin was negatively impacted by geographical and product mixtures, along with some cost pressures. full year 2026 gross margin to be between 33.5% to 34.5% versus 35.5% previously

    Mitigation: Implementing mitigation initiatives across procurement, product design, and supply chain; focusing on increased software sales; exploring price increases in future contract renewals.

    Adverse foreign currency movementQ2 FY26

    operating income was also negatively impacted versus 2025 due to adverse foreign currency movement in the Israeli shekel.

    Mitigation: Foreign exchange conditions stabilized during the quarter.

    AI explosion creating perfect storm for chipsCurrent and ongoing

    the AI explosion has created a perfect storm in the domain of chips and active components for many industries.

    Mitigation: Impacts ability to convert orders to revenue; management is implementing mitigation initiatives across procurement, product design, and supply chain.

    What to watch in Q3 FY26

    4

    New North America Tier-1 customer orders

    Q3 FY26
    CurrentProof-of-concept field trials successful, in commercialization discussions
    TargetOrders received

    Why it matters

    Securing orders from this new Tier-1 customer is crucial for future revenue growth, with meaningful impact expected in 2027.

    I do believe that we'll start getting the orders quite soon, maybe even in Q3.

    Q&A highlights

    6

    Why is the 2026 revenue guidance reiterated as flattish for H2 vs H1, despite strong bookings and India strength, and what are the swing factors?

    The reiterated guidance is due to supply chain disruptions and component lead times, not demand. The "AI explosion" has created a perfect storm for chips, making it difficult to convert strong orders into revenue in a timely manner.

    “The issue is not the demand. The issue is not the visibility. The issue is the disruption in the supply chain and time line of getting components. Let's not forget, the AI explosion has created a perfect storm in the domain of chips and active components for many industries.”

    asked by Scott Searle · answered by Doron Arazi

    2 min read6 chapters

    Detailed Narrative

    01

    Competitive Landscape Shift

    Ceragon is benefiting from significant changes in the competitive landscape, with two major competitors lacking visible technological continuity and a third having uncertain future commitment. This situation is creating new opportunities, leading to increased engagement in RFPs and bids for new use cases, as customers seek established technology leaders.

    02

    E-Band Product Adoption and Private Network Growth

    Demand for Ceragon's innovative E-Band wide portfolio, including the IP-50EX platform and multi-band solutions, is very strong, particularly in India for fiber-like capacity. Private network opportunities are accelerating globally, with record bookings in North America. These projects combine advanced wireless transport with technologies like private 5G and LTE for IoT and mission-critical applications, with industry estimates predicting over 30% CAGR for private networks in the next four years.

    03

    India Market Strength

    India continues to be a region of strong demand, driven by mobile operators expanding and modernizing 4G and 5G transport networks, and increasing fixed wireless access (FWA) deployments. The exceptionally strong bookings in the first half of 2026 suggest that 2026 could be one of the strongest bookings years in India in quite some time.

    04

    North America Carrier and Private Network Momentum

    The North American market remains strong, with revenue from a key Tier-1 carrier customer slightly exceeding expectations despite some Q2 shipments shifting to Q3 due to supply chain timing. Ceragon successfully completed proof-of-concept field trials for its 5G FR2 solution with a new Tier-1 carrier and is in commercialization discussions, expecting meaningful revenue from this relationship in 2027.

    05

    Expanding Services and Long-Term Engagements

    Ceragon is expanding its service offerings beyond traditional wireless transport. This includes securing a 2-year, $3.5 million managed services contract in Mexico and a 5-year, up to $70 million agreement with a Tier-1 mobile operator in APAC. These wins demonstrate the company's ability to build long-term strategic relationships and diversify its revenue base through broader service engagements.

    06

    Supply Chain and Cost Pressures

    The supply chain environment remains challenging, with persistent cost and lead time issues, exacerbated by the "AI explosion" impacting chip and active component availability. These pressures negatively impacted gross margins in Q2 2026 and are expected to continue through the remainder of the year, leading to revised full-year gross and operating margin guidance. Management is implementing mitigation initiatives and focusing on increased software sales.

    AI-generated summary of the company’s earnings call. Not investment advice.