Ladies and gentlemen, thank you for standing by, and welcome to Ceragon Networks earnings call. [Operator Instructions] I must advise you that this call is being recorded. I'd now like to hand over the call to our first speaker today, Rob Fink, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Hosting the call today is Doron Arazi, Ceragon's Chief Executive Officer; and Ronen Stein, Chief Financial Officer. Before we start, I would like to remind everyone that statements made on this call may constitute forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the safe provision harbors of the Private Securities Litigation Reform Act of 1995. Such statements reflect current expectations and assumptions of Ceragon's management. Actual results may differ materially as they are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in forward-looking statements. These risks and uncertainties include, but are not limited to, company's forward-looking forecast with respect to which there is no assurance that such forecasts will materialize, the company's ability to future plan, business, marketing and product strategies on the forecast evolution of the market developments, such as market and territory trends, future use cases, business concept, technologies, future demand and necessary inventory levels, the effects of evolving geopolitical situation in Israel and the related evolving regional conflicts, the effects of global economic trends, risks associated with integration and deployment of acquired businesses, risks associated with the transition and rollout of 5G technologies, risks related to the concentration of our business on a limited number of large mobile operators, risks resulting from the volatility in our revenues, margins and working capital needs, disagreements with taxes authorities, the high volatility and supply chain needs of our customers, which from time to time lead to delivery issues and other such risks, uncertainties and other factors that could affect results of operations as further detailed in Ceragon's most recent annual report on Form 20-F as published on March 25, 2025, as well as other documents that may be subsequently filed by Ceragon from time to time with the Securities and Exchange Commission. 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 Ceragon undertakes no obligation to update them. Ceragon's public filings are available on the Securities and Exchange Commission's website at sec.gov, and they may also be obtained on Ceragon's website at ceragon.com. Today's call will also include certain non-GAAP financial measures. A reconciliation between GAAP and non-GAAP results is included in the table attached to the press release that was issued earlier this morning, which is posted on the Investor Relations section of Ceragon's website. With that, I will now turn the call over to Doron. Doron, the call is yours.

Thank you, Rob, and good morning, everyone. On the surface, Ceragon's second quarter revenue was below expectations, but this is primarily tied to a single region, India, and is largely being driven by one key customer that is navigating well-publicized financial challenges. This has temporarily halted this customer's order activity and limited near-term visibility as path forward are not yet established. Based on what we know today, we expect that this will just be a timing issue with market demand and our share of the market essentially unchanged. Beneath that headline, I believe the Ceragon story is far more encouraging, reflecting the substantial improvements we have made in our business over the past 2 years as well as the benefits of continued innovation in our solutions. We delivered $0.03 in non-GAAP earnings per share and maintained healthy operating margins even in the face of the disruption in India, a clear demonstration of the operational strength, cost discipline and resilience we have built into Ceragon. At the same time, our broader momentum continues to build. In fact, the second quarter was an encouraging period for Ceragon with our differentiated technology demonstrating meaningful capabilities that we believe outpaces our competitors. These durable competitive advantages are actively positioning us for new opportunities and use cases that can drive incremental revenue and market share gains across multiple geographies. Customer needs and market trends are aligning with our technological road map. We are proving our value through field trials and proof-of-concept engagements, and this is beginning to fuel potential growth in our pipeline and bookings in real time. This dynamic is especially evident in North America, where our recent introduced technologies are proving applicable to both service providers, carriers and private network operators alike. In fact, during the second quarter, we secured a multimillion dollar…

Thank you, Doron, and good morning, everyone. The second quarter was impacted by revenue headwinds in India, as Doron described, with improving strength in North America and continued progress against our strategy to create sustainable profitability. 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 investors to today's press release. Let me now review the second quarter results. Revenue for the second quarter was $82.3 million, down 14.4% from $96.1 million in the second quarter of 2024. North America was the strongest region in terms of revenue and contributed $26.8 million. India contributed $24.8 million in Q2 2025 and was the second strongest region. We had 2 customers in the second quarter that contributed at least 10% of our revenue. Gross profit in the second quarter on a non-GAAP basis was $29 million, which was down 14.2% from $33.8 million in Q2 2024. Our non-GAAP gross margin was 35.2%, unchanged from the prior year period. The sustained gross margin even on lower revenue was mainly attributable to our success in North America. Moving on to operating expenses. I'd note that we have now consolidated E2E into our results, impacting total operating expenses. Research and development expenses in Q2 2025 on a non-GAAP basis were $7.2 million, down from $8.2 million in Q2 2024. As a percentage of revenue, R&D expenses on a non-GAAP basis were 8.8% in the second quarter versus 8.5% in the prior year period. Sales and marketing expenses on a non-GAAP basis in the second quarter were $11.1 million, up from $11 million in Q2 2024. As a percentage of revenue, sales and marketing expenses on a non-GAAP basis were 13.5% in the second quarter…

Thanks, Ronen. Before we open the call for questions, I want to briefly summarize the key takeaways and update our outlook. Q2 highlighted the strength of the foundation we have built as we delivered non-GAAP profitability and generated free cash flow despite the revenue headwinds while advancing our strategic road map. Traction across regions is growing, and our technology is opening new doors across both service provider and private network segments. Our strategy has not changed and challenges primarily in India do not necessitate changes. We are on the right path, positioned to navigate these timing issues while expanding our strategic position globally. Turning now to our outlook. Our visibility this quarter has been adversely impacted primarily by dynamics in India as discussed. As a result, we are not currently in a position to reaffirm our prior guidance or provide an updated range. That said, we believe this is a matter of timing. In the meantime, this has placed greater weight on individual projects in other regions, some of which were expected to contribute meaningfully to our revenue and are currently delayed. Importantly, we strongly believe we have not lost market share in India or globally. In fact, we are expanding our opportunity set, particularly in North America, primarily due to technological leadership, delivering stronger radio performance at a lower total cost of ownership. Looking ahead, we assume second half revenue to be roughly in line with the first half. Based on this assumption, we believe we can deliver non-GAAP profit and generate cash while continuing to invest in our strategic pillars, advanced wireless connectivity solutions, private networks and managed services. With that, I'll now open the call for questions.

[Operator Instructions] Our first question will be from Scott Searle from ROTH Capital.

Apologies. Doron, maybe just to dive in on India, the obvious region talked about. What gives you the confidence that this isn't a share loss that this isn't some sort of permanent impairment in terms of some of the customer relationships there? And could you extrapolate a little bit in terms of your visibility into the second half as it relates to India? You did about $25 million in the current quarter. Is that a sustainable level accounting for customers that are, I think, doing a little bit better from an economic standpoint now. And this '26 opportunity, I'm wondering if you could maybe gauge the size and timing of when we should see that really starting to play into the P&L?

Okay. So thank you for this question, Scott. So let's start with the competitive landscape and our stake in this market. We have very strong inroads into this market, and we have a constant dialogue with all of our customers, both existing and potential. And Ceragon, generally speaking, is perceived as one of the strongest vendor to this industry. And we are aware of the main drivers for the changes in the pace or in the cases where our projects are stalled, talking to our customers constantly. And it's clear to us based on these discussions that it's not that they are now preferring other vendors over us. It's just a matter of the rollout pace that is driven by other factors that are totally not associated with our strength in this market. So that's the main, so to speak, indications we have for not losing market share. I would even dare say that in some new opportunities with new technology, we already finished the technical phase and we're now talking about commercials. And that can also fuel our business in 2026. I was referring more explicitly to a new opportunity that is not that one, but it's another one, more on the traditional microwave business. And that opportunity is in terms of tens of millions of dollars to be, I would say, delivered during 2026 or I would say the majority of this opportunity will be delivered during 2026. Obviously, the RFP is still out there and we don't know the results. Of course, we don't know the results yet. But we believe that we are in a very good position to win at least a big portion of this opportunity. So all in all, when I look at the trends, I would say the following. The loss of the -- I would say, the interim loss of the business from this specific provider or service provider that stopped the investment due to its financial issues is something that we cannot predict the resumption yet. And we are not baking or hardly baking any potential revenue from this one into our second half of the year. With the others, each and every one has its own, so to speak, pace that is driven by different factors. And I would say that $25 million that we have seen in Q2 might even be the high end in our most likely scenario. But still, there's so many unknowns that this number could fluctuate easily up and down. And if it fluctuates up, I can assure you that we have a very good, so to speak, operational preparation and readiness to capture and capitalize on any trend up that will happen if indeed this happens during the second half of the year. For 2026, I'm by far much more optimistic.

Great. Very helpful. And if I could, maybe shifting to a healthier region. North America was a great quarter. I think it's the best quarter you've had in 5 or 6 quarters. How sustainable is that as we're looking into the second half of this year? And maybe give us an idea, I think you've referenced private networks being strong, but maybe a little bit more color on that front versus the work with the Tier 1 operator. It sounds like you've got a second Tier 1 that's now starting to play into the mix.

Sure. Thank you for this question. So look, obviously, the business in Ceragon is still based on relatively imminent orders. And based on what we see today and the pattern and the pace of the business, we believe that the second part of the year can be more or less at the same level of the first part of the year. It is based on, first of all, the backlog we have accumulated, as of the end of this quarter, and obviously, some forecasts that we have for Q3 and for Q4 from different customers. In terms of private networks, generally speaking, we are very excited about some new opportunities. And we just finished a few POCs that we see a very clear path that this will return into significant orders. And I hope that this will happen shortly. I don't want to kind of be ahead of my skis, but it looks very promising. I would say that we hardly build on these opportunities for the second part of the year. Obviously, if this happens, it will definitely fuel our business in North America further. But if not, I think it could be a very strong baseline for increased business from private networks in North America in 2026.

Our next question is from Ryan Koontz from Needham.

In terms of your 10% customers, maybe some housekeeping upfront. Were those both from India region, your 10% customers or different regions? Ronen Stein The 10% customers are coming from both -- from India and North America.

Great. And you discussed some emerging Tier 1 North American opportunities here. Can maybe you kind of outline what kind of shape and timing you think those opportunities might present you and how you're investing in terms of those emerging opportunities?

Yes. Actually, I'm very excited with this particular win and some other opportunities that I see. Just to generalize the trend that we see, and I would even dare saying that I see that as almost a global trend. One of the big observations I had is that the FR2 as part of the 5G rollout is being looked at from various angles and operators are looking in different ways to use and to utilize these frequencies other than just mobility. And that opens up many new use cases in North America, but also outside North America. Starting from a very simple model of frequency preservation, just to make sure that they have the license and they can use it later on and all the way into fixed wireless access, multi-dwelling units. And as I said, this is a phenomenon that we see not only in North America. I referred to our success in India in a previous question. It's more or less the same story there. And there, we are also in a great position since we have passed all the technical barriers, so to speak. And now we are starting to discuss commercials. So I'm obviously very optimistic. Specifically, the one we won is expected to add to our revenue quite significantly in North America in 2026. And as we speak, we see more operators looking for very similar solutions in this region.

That's a great update. Appreciate that. Maybe one last one, if I can squeeze it in. On your acquisition of end-to-end recently, how is that business trending in terms of private networks? And I think you were penetrating the energy sector with that. Can you maybe give us a few updates on how that business is performing?

Yes. So, so far, [indiscernible] plan. I would even -- they're saying that in terms of booking, we are ahead of our plan. And that's even, I would say, despite some slowdown that we have seen in the private networks in different segments in North America due to the tariffs and many other things that have different implications on different segments in the private networks. So the bottom line is that we are progressing in accordance with the plan. And in terms of booking, we are even exceeding it.

Right. So you're saying the tariffs, not necessarily on your product, but tariffs on core business, yes.

Exactly. It's not necessarily associated with communication, infrastructure and with our product, particularly. Sometimes there are other factors that are impacting these industries, and that may create certain delays in the decision to move forward on the connectivity part.

Our next question is from Christian Schwab from Craig-Hallum.

It's Christian here. Given the near term, I appreciate the fact that we'll still be profitable and generate cash this year. But given the revenue headwinds this year, at what point would it take for you to address OpEx, which looks heavy for these revenue levels?

So I would start by giving a general comment and maybe Ronen can complement. Look, we are investing in our new strategy, and we intend to continue investing in our new strategy, especially after we have seen so many strong signals that this is -- this strategy is probably the right strategy for Ceragon. So that as long as we are profitable and generating cash, it is our intention to continue investing in these strategic initiatives. Obviously, if at a certain point, we see a situation that the relevant parameters for us deteriorate significantly, we'll reconsider. But this is our intention to keep our investment act because of the momentum and because of our belief that this is the right path for this company. And as we already said, we believe that the situation is a temporary situation, and we can resume growth as early as 2026. Ronen Stein Let me just add Christian, let me just add that in the last 2 years, I would say, we have been restructuring our operating models and operating expenses, and we were very disciplined. So we shifted budgets. We opened new centers of excellence, both in Paraguay and in India. And we have been able now to reduce our OpEx while still continue to, as Doron mentioned, still continue to spend and invest on growth initiatives. So I think that with the assumptions on our revenues for the second half and the fact that we expect North America to more or less continue in the same level, we think that gross margin should be okay and to cover and enable us the profitability that we just mentioned.

Our next question is from Theodore O'Neill from Hills Research. Theodore Rudd O’Neill: Yes. First question about the Siklu point to multipoint solution. I think you've given us -- I think you previously talked about use case examples, but can you give us some use case examples and what the potential market size is for those -- for that product line?

Yes. Sure. Look, the most common use cases we have seen so far are around smart cities and public safety. This product is very suitable for a situation where you need to carry data from video cameras either in relatively short distances or using a mesh technology that can help very nicely in building a network or an access network that, on the one hand, is very strong in terms of capacity, very high capacity. And at the same token is very cheap at street level connectivity. So we see that in projects of smart cities. One of them is in North America. There's another one -- the biggest one I was talking about in Latin America. And we see more of that coming from other regions. So this is a very common use case. And it can also develop to other ideas such as managing traffic lights and other things that are associated with improved, so to speak, quality of managing city public services elements. The other piece that we see as an opportunity, and we have trialed for a relatively long time by now with huge success is actually in the CSP domain. And while I tend to give this opportunity slightly less emphasis in terms of volumes, we are talking about street-level connectivity as a solution for small cells backhauling. We have seen that predominantly in Europe, in countries where, generally speaking, it's very difficult to bring the fiber to the last point. And it's also even very difficult to put microwave and millimeter wave, the traditional one over the roofs. And that could also become a very common alternative in such cases. Based on the opportunities we are engaged at this could become tens of millions of dollars a year. Obviously, it depends on the size of the project. But at this point, I would say that it's between a few single million dollars to tens of millions of dollars a year. Theodore Rudd O’Neill: Okay. And you mentioned your participation in multiple RFPs. How do you see the probability for winning these? And what's the competitive landscape look like?

Yes. So I mentioned that particularly referring to EMEA and Latin America. I think the audience is aware that these are 2 regions where the Chinese are not, I would say, totally banned. And therefore, the competition continues to be a relatively fierce competition, especially when Chinese decide to go for a dumping price strategy, which happens quite frequently. Why I'm more enthusiastic about these opportunities is basically because of 2 reasons. One, we start seeing a phenomena where just using the Chinese as a single vendor is not working that well to many of the operators, both in Latin America and in EMEA. And therefore, these RFPs could create an opportunity for us to chime in and to take the second seat, which is also quite significant. The other reason is that with our new product families, the EX, the CX and the IP-50GP, these products are much more, I would say, price performance effective than our older generations. And that gives us, I would say, a good starting point to win in an environment where the prices are relatively low. I would just generalize and say that for a few years, we have not invested that much in split-mount. And still, when you look at the market, split-mount still consists around 60% of this market. Now after we finished to develop the NepTune chip, and obviously, we're working on the first product that will be publicized or launched based on this chip, we have basically directed resources from R&D to work on our next-generation split mount. The IP-50GP is the first -- the early bird in what I believe is a strong road map that if we execute on, will also help us gaining a bigger market share in the split-mount business.

Our next question is from Rommel Dionisio from Aegis.

So 2 questions, if I could. First, you've obviously made significant progress on -- in North America on Managed Services business and private networks. And I wonder if you could talk about private networks, the opportunity in Europe and just the progress you've made there. And second, I appreciate your comments earlier about continuing to invest in the core business. What about acquisitions? Does the temporary delay in orders from India slow down your acquisition pace in upcoming periods?

So let me start with the acquisition question, and then I will move to a discussion about the private network in Europe. In terms of acquisition, we have not slowed down -- and actually, the positive cash flow and the reduction in the loans or the credit line that is utilized is just creating for us a better, so to speak, funding opportunities to do more acquisitions. I think it's more of finding the suitable acquisitions rather than slowing down or accelerating the pace. We have a funnel. I think the funnel looks good. It will take time to make, obviously, decisions. And I can tell you that during the last couple of months, we looked at a few potential acquisitions, and we reached the conclusion that they are not suitable to us. So it is our strong intention to continue pursuing acquisitions. It's just a matter of suitability. As to the private networks in Europe, we see also many opportunities there. I think that we are quite successful actually in Europe and by the way, in Africa, in utilities and to a certain degree, in defense and in energy. So generally speaking, we see there many opportunities as well. And obviously, this gives us even stronger signals that we are on the right, so to speak, strategic path.

There are no further questions.

So thank you so much, everyone, for participating in our conference call and looking forward to talk to you again in the conference call for Q3 results.