Ceragon Networks Reports First Quarter 2018 Financial Results
May 7, 2018

CERAGON NETWORKS REPORTS FIRST QUARTER 2018
FINANCIAL RESULTS
Strong Q1 bookings and revenue, with particular strength coming from India
Little Falls, New Jersey, May 7, 2018 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wirelessbackhaul specialist, today reported results for the first quarter ended March 31, 2018.
First Quarter 2018 Highlights
Revenues - $83.3 million, up 9.5% from the first quarter of 2017, and down 3.9% from the fourth quarter of2017.
Gross margin – 33.1%, compared to 29.3% in the first quarter of 2017 and 33.6% in the fourth quarter of2017.
Operating income - $5.4 million, compared to $2.0 million in the first quarter of 2017 and $7.5 million in
the fourth quarter of 2017.
Net income )loss) - net income of $2.1 million, or $0.03 per diluted share for the first quarter of 2018. Net
loss for the first quarter of 2017 was $(0.1) million, or $(0.00) per diluted share. Net income for the fourthquarter of 2017 was $7.2 million or $0.09 per diluted share.
Non-GAAP results - gross margin was 33.2%, operating income was $5.7 million, and net income was $3.0million, or $0.04 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.
Cash and cash equivalents - $26.0 million at March 31, 2018, compared to $25.9 million at December 31,
2017.
“We are beginning 2018 with a strong quarter in all respects,” said Ira Palti, president and CEO of Ceragon.
“We had strong bookings in Q1, with particular strength coming from India. Revenue increased 9.5% year
over year, and we now have enough visibility to raise our quarterly run rate expectations to $80 to $85
million during the balance of this year. We won several important new projects in Q1 and our objective is tocontinue to gradually gain market share. Our financial goal is to make 2018 the fourth consecutive year ofincreasing net income, despite facing some challenges with factors we can’t control such as currency
headwinds and shortages of passive components.”

1

Ceragon Networks Reports First Quarter 2018 Financial Results
May 7, 2018

Supplemental revenue breakouts by geography:
First quarter 2018:•Europe:12%•Africa:2%•North America:11%•Latin America:

13%•India:46%•APAC:16%

A conference call to discuss the results will begin at 9:00 a.m. EDT. Investors are invited to join theCompany’s teleconference by calling USA: (800) 398-9367 or International: +1 (612) 288-0337, from 8:50
a.m. EDT. The call-in lines will be available on a first-come, first-serve basis.
Investors can also listen to the call live via the Internet by accessing Ceragon Networks’ website at theinvestors’ page: https://www.ceragon.com/about-ceragon/investor-relations/events-webcasts/,
selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: USA: (800) 475-6701 or International +1(320) 365-3844 Access Code: 446862. A replay of both the call and the webcast will be available throughJune 7, 2018.

About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT) is the world’s #1 wireless backhaul specialist. We help
operators and other service providers worldwide increase operational efficiency and enhance end customers’
quality of experience with innovative wireless backhaul solutions. Our customers include wireless service
providers, public safety organizations, government agencies and utility companies, which use our solutions
to deliver 4G, mission-critical multimedia services and other applications at high reliability and speed.
Ceragon’s unique multicore technology provides highly reliable, high-capacity 4G wireless backhaul withminimal use of spectrum, power and other resources. It enables increased productivity, as well as simple andquick network modernization. We deliver a range of professional services that ensure efficient network
rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by morethan 460 service providers, as well as hundreds of private network owners, in more than 130 countries.
Join the DiscussionCeragon Networks® and FibeAir® are registered trademarks of Ceragon Networks Ltd. in the United Statesand other countries. CERAGON ® is a trademark of Ceragon Networks Ltd., registered in various countries.
Other names mentioned are owned by their respective holders.
This press release contains statements concerning Ceragon's future prospects that are "forward-lookingstatements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on the current beliefs, expectations and assumptions of Ceragon's management.
Examples of forward-looking statements include: projections of revenues, net income, gross margin, capital2

Ceragon Networks Reports First Quarter 2018 Financial Results
May 7, 2018

expenditures and liquidity, competitive pressures, growth prospects, product development, financial
resources, cost savings and other financial matters. You may identify these and other forward-looking
statements by the use of words such as "may", "plans", "anticipates", "believes", "estimates", "targets","expects", "intends", "potential" or the negative of such terms, or other comparable terminology. These
forward-looking statements are subject to risks and uncertainties that may cause actual results to differ
materially, including risks associated with a decline in revenues due to our focus on a single market
segment; risks relating to the concentration of Ceragon's business in certain geographic regions such as
India, and in other developing nations; political, economic and regulatory risks from doing business in thosedeveloping regions, including potential currency restrictions and fluctuations; risks related to our ability tomeet the demand for our products due shortages in raw materials including certain passive components;
risks associated with a change in Ceragon’s gross margin as a result of changes in the geographic mix ofrevenues and/or as a results of increase in costs of raw material, including certain passive components; risks
associated with the loss of a single customer or customer group, which represents a significant portion of
Ceragon’s revenues; risks associated with Ceragon’s failure to effectively compete with other wirelessequipment providers; and other risks and uncertainties detailed from time to time in Ceragon's Annual
Report on Form 20-F and Ceragon's other filings with the Securities and Exchange Commission thatrepresent our views only as of the date they are made and should not be relied upon as representing ourviews as of any subsequent date. We do not assume any obligation to update any forward-looking statements.

Investors:
Doron Arazi+972 3 5431 660

dorona@ceragon.com

orClaudia Gatlin+1 212 830-9080

claudiag@ceragon.com

Media:
Tanya Solomon+972 3 5431163

tanyas@ceragon.com-tables follow-3Ceragon Reports First Quarter 2018 Results

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(U.S. dollars in thousands, except share and per share data)(Unaudited)Three months ended
March 31,2018
2017
Revenues
Cost of revenues$

83,27555,671$

76,02153,717Gross profit

27,60422,304

Operating expenses:
Research and development, net
Selling and marketing
General and administrative

7,214
10,562
4,459

6,107
9,735
4,505

Total operating expenses$22,235$

20,347

Operating income
Financial expenses, net

5,369
2,034

1,957
1,598

Income before taxes

3,335

359

Taxes on income

1,265487

Net income (loss)$2,070$(128)

Basic net income (loss) per share

$

0.03

$

(0.00)

Diluted net income (loss) per share

$

0.03

$

(0.00)

Weighted average number of shares used incomputing basic net income (loss) per share

78,080,146

77,796,425

Weighted average number of shares used incomputing diluted net income (loss) per share

80,065,171

77,796,425

4Ceragon Reports First Quarter 2018 ResultsCONDENSED CONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Trade receivables, net
Other accounts receivable and prepaid expenses
Inventories$March 31,
2018

December 31,
2017

Unaudited

Audited25,956116,002
14,08149,676$25,877
113,719
17,052
54,164

Total current assets

205,715

210,812NON-CURRENT ASSETS:
Long-term bank deposits
Deferred tax assets
Severance pay and pension funds
Property and equipment, net
Intangible assets, net
Other non-current assets

996
505
5,445
29,367
2,656
3,506

996
988
5,459
29,8702,199
3,269

Total non-current assets

42,47542,781

Total assets$248,190$

253,593

LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:
Trade payables
Deferred revenues
Other accounts payable and accrued expenses$

63,0076,130
28,548$75,476
5,193
24,781

Total current liabilities

97,685

105,450

LONG-TERM LIABILITIES:Deferred tax liability
Accrued severance pay and pension
Other long term payables

132
10,2794,033

141
10,085
4,019

Total long-term liabilities

14,444

14,245SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares
Additional paid-in capital
Treasury shares at cost
Other comprehensive loss
Accumulated deficits

214
411,270(20,091)(7,601)(247,731)

214
410,817(20,091)(7,171)(249,871)

Total shareholders' equity

136,061

133,898

Total liabilities and shareholders' equity$

5248,190$

253,593

Ceragon Reports First Quarter 2018 Results

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)(Unaudited)Three months ended
March 31,2018
2017
Cash flow from operating activities:
Net Income (loss)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization
Stock-based compensation expense
Decrease in trade and other receivables, net
Decrease (increase) in inventory, net of write-off
Decrease (increase) in deferred tax asset, net
Increase (decrease) in trade payables and accrued
liabilities
Increase (decrease) in deferred revenues
Other adjustments
Net cash provided by operating activities
Cash flow from investing activities:
Purchase of property and equipment, netPurchase of intangible assets, net
Net cash used in investing activities

$

2,070

2,345
358
7,231
(4,984)
(15)
3,997

940
208
$

(1,035)
12
7,781

$

(2,309)(2,309)4,373$(3,299)(1,086)(4,385)

Proceeds from exercise of options

(128)

1,511
353
183
4,488
474
(5,854)$

Cash flow from financing activities:
Repayment of loans from financial institutions$-(5,500)

100

74

Net cash provided by (used in) financing activities

$100

$

(5,426)

Translation adjustments on cash and cash equivalents$)9($76

Increase in cash and cash equivalents

$79

$122

Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

625,877$

25,95636,338$36,460

Ceragon Reports First Quarter 2018 Results

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS(U.S. dollars in thousands)(Unaudited)Three months ended
March 31,2018
2017
GAAP cost of revenues
Amortization of intangible assets
Stock based compensation expenses
Changes in pre-acquisition indirect tax positions
Non-GAAP cost of revenues$GAAP gross profitGross profit adjustments
Non-GAAP gross profit$

GAAP Research and development expenses
Stock based compensation expenses
Non-GAAP Research and development expenses$

GAAP Sales and Marketing expenses
Amortization of intangible assets
Stock based compensation expenses
Non-GAAP Sales and Marketing expenses$

GAAP General and Administrative expenses
Stock based compensation expenses
Non-GAAP General and Administrative expenses$

GAAP taxes on income
Non-cash tax adjustments
Non-GAAP taxes on income

$$$

$$$

$

755,671(17))15(55,639$

27,60432
27,636$

7,214(60)7,154$

10,562(144)
10,418$4,459(132)
4,327$

1,265)564(701$$$$$$$53,717
(303)
(20)
(162)
53,232
22,304
485
22,789
6,107
(78)
6,029
9,735(71)
(78)
9,586
4,505
(182)
4,323
487
(98)
389

Ceragon Reports First Quarter 2018 Results

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS(U.S. dollars in thousands, except share and per share data)(Unaudited)Three months ended
March 31,2018
2017
GAAP net income (loss)
Stock based compensation expenses
Amortization of intangible assets
Changes in pre-acquisition indirect tax positions
Non-cash tax adjustment$2,070353
15564$

(128)
358
374
16298

Non-GAAP net income$3,002$864

GAAP basic net income (loss) per share$0.03$(0.00)GAAP diluted net income (loss) per share$0.03$(0.00)

Non-GAAP basic and diluted net income per share

$0.04

$

0.01

Weighted average number of shares used in computing
GAAP basic net income (loss) per share

78,080,146

77,796,425

Weighted average number of shares used in computing
GAAP diluted net income (loss) per share

80,065,17177,796,425

Weighted average number of shares used in computing
Non-GAAP basic and diluted net income per share

80,377,797

80,751,956

8