This article first appeared on GuruFocus .
Release Date: August 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ceragon Networks Ltd ( NASDAQ:CRNT ) delivered a strong Q2 2026 with revenue of $93.9 million, up 14% year-over-year, and achieved the highest bookings since Q1 2024.
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The company reported record first-half 2026 bookings and book-to-bill ratio in the last 10 years, driven by strong demand in India, including approximately $120 million in orders from operators.
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Ceragon Networks Ltd ( NASDAQ:CRNT ) is benefiting from a favorable competitive landscape, as two major competitors are effectively out of the market and a third's commitment is uncertain, opening new opportunities.
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The company is seeing strong adoption of its innovative E-band and multi-band solutions, which are winning business in India and other markets due to their high capacity and cost-effectiveness.
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Ceragon Networks Ltd ( NASDAQ:CRNT ) is expanding into high-growth areas like private networks and managed services, with record private network bookings in North America and new long-term contracts, including a $70 million APAC deal.
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The company maintains a net positive cash position of $22.8 million and generated positive free cash flow in Q2 2026, despite supply chain challenges.
Negative Points
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Ceragon Networks Ltd ( NASDAQ:CRNT ) experienced a decline in non-GAAP gross margin to 32.2% in Q2 2026 from 35.2% in Q2 2025, due to geographical and product mix and cost pressures.
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The company faces ongoing supply chain challenges, including component cost increases and lead time extensions, which are expected to continue pressuring gross margins for the remainder of 2026.
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Ceragon Networks Ltd ( NASDAQ:CRNT ) lowered its full-year 2026 gross margin guidance to 33.5%-34.5% (from 35.5%) and operating margin to 5%-6% (from 6.5%-7.5%), reflecting cost pressures.
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Non-GAAP operating income decreased to $4 million in Q2 2026 from $4.7 million in Q2 2025, and net income fell to $1.7 million from $2.5 million, impacted by adverse foreign currency movements.
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The company's days sales outstanding (DSO) increased to 107 days, and trade receivables rose to $101.3 million, indicating potential cash flow collection issues.
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Revenue from a key North American Tier 1 carrier was delayed from Q2 to Q3 due to supply chain timing issues, and the company expects only gradual improvement in cost pressures in 2027.
Q & A Highlights
Q: Given the strong Q2 performance and reiterated 2026 revenue guidance, the lower end implies flattish second-half versus first-half results. What are the swing factors that get you from the low end to the high end of the range? A: Doron (CEO) explained that the issue is not demand or visibility but rather disruption in the supply chain and timelines for getting components. The AI explosion has created a "perfect storm" in the domain of chips and active components, leading to lingering delivery timelines and reduced confidence in meeting them. Therefore, the company prefers to keep revenue guidance within the current frame, as the main visibility problem is the ability to get components in time to convert orders into revenue.
Q: Can you provide any idea how much of the $120 million bookings year-to-date in India would you expect to convert to revenue this year? And is the second-half gross margin impact largely component supply chain related or also from a stronger mix in India? A: Ronen (CFO) stated that the $120 million is expected to be mostly converted this year, with some already converted. Doron (CEO) added that while North America revenue is expected to be stronger in the second half, helping to improve gross margins, the overall gross margin guidance reflects a better mix between North America and India. Ronen (CFO) also noted that the cost pressures are expected to persist through the second half of 2026, with no significant improvement on the cost side, but the company is focusing on increased software sales and pushing for higher prices in future contract renewals.
Q: With regards to India, what are you seeing in terms of changes in mix and use cases? Is this mostly for rural coverage, FWA in urban areas, or other use cases? A: Doron (CEO) explained that the business in India is driven by two main phenomena. First, some operators have not yet completed upgrading their networks even to 4G. Second, for more advanced operators in the 5G era, they are looking to expand connectivity to residential areas and enterprises, which means more fixed wireless access (FWA) use cases. These require much higher capacity for backhaul, leading to the use of Ceragon's IXA product or multi-band solutions that ensure minimum connectivity with much bigger capacity on average.
Q: On the US side, it sounds like your new Tier 1 carrier is ramping. Are you working through operational and commercial processes, and do you still have a good shot at seeing share gains in 2027? A: Doron (CEO) confirmed that the strengthening relationship with the new Tier 1 operator will start driving meaningful revenue in 2027. He believes the company will start getting orders quite soon, possibly even in Q3, but the impact on revenue will become meaningful in 2027.
Q: Regarding SpaceX's potential terrestrial network, is that something Ceragon could participate in, or is it strictly the microwave backhaul part you would address? A: Doron (CEO) stated that Ceragon is addressing predominantly the backhaul or transport part of any network, which is its main competency. He noted that if SpaceX builds a terrestrial network, the backhaul will become a very important element in the architecture, especially as they aggregate more data. He believes there can be an opportunity for players in the millimeter wave and microwave domain to help build the network very fast with a level of service that can compete with incumbents.
Q: On the LEO impacts, are you seeing any slowdown in rural builds from US incumbent mobile operators collaborating with LEO providers like AST Space Mobile? A: Doron (CEO) said the company does not see any slowdown. He reiterated that based on public announcements, the fundamental limitation of LEO technology is area spectral efficiency (bits per square kilometer). For very high capacity needs, LEO is not a great solution. He views LEO as complementary for increasing coverage, particularly in very rural areas, rather than a substitute for terrestrial high-capacity backhaul.
Q: How does this demand environment shape up to ones in years past, and what are your initial thoughts on 2027? A: Doron (CEO) stated that without giving specific guidance, the company continues to assume that high single-digit growth in revenue is a reasonable assumption. If the company can accelerate execution of its private network strategy, it could become a driver for even higher growth. On the legacy CSP/ISP business, new opportunities from a diluted competitive environment could also outpace the expected low single-digit growth. Overall, the company is increasing its TAM by expanding beyond point-to-point products into private networks and end-to-end solutions.
Q: With your updated supply chain timelines, do we expect to see any directional rebound in gross margins into Q4? Do you expect these challenges to persist into 2027? A: Ronen (CFO) said he cannot guide on a quarterly basis, but the second half is already covered in the annual guidance. The company does not see much improvement on the cost side in 2026. For 2027, the company has more initiatives, including cost initiatives and pushing for higher prices upon contract renewals, as the industry understands that current prices cannot be sustained if costs continue to rise. Doron (CEO) added that the "perfect storm" is not sustainable for a very long time, and the company expects gradual improvement in 2027 from more efficient product designs (BOM cost) and price increases.
Q: In North America, how did private networks progress sequentially from March to June, and are there any opportunities created from Starlink's potential terrestrial network? A: Doron (CEO) noted that North America looks good, with the second half, predominantly Q3, expected to be better. Regarding private networks, the business is growing nicely, but conversion of private network projects into revenue is much slower than traditional equipment sales to Tier 1 operators. The impact of strong bookings and backlog in private networks will not be significant in the short term. On Starlink, he said it is still early to assess how the terrestrial network will play out, but if they build a network quickly, backhaul will become a critical element, potentially creating opportunities for Ceragon.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
