Ceragon Networks Ltd. (NASDAQ:CRNT), a leading provider of wireless backhaul solutions, reported a robust fourth quarter for the fiscal year 2023, surpassing revenue expectations and achieving a record non-GAAP operating income. The company's recent acquisition of Siklu is expected to bolster growth, targeting private networks and Tier 1 and Tier 2 customers. Ceragon closed the year with strong cash generation, reporting over $30 million from operations and $10 million in free cash flow. With a solid performance in North America and India, the company is optimistic about maintaining double-digit revenue growth and significant margin expansion in 2024.
Key Takeaways
- Q4 revenue reached $90.4 million, with a significant contribution from North America and India.
- Non-GAAP operating income hit a record high, with gross margin at 35.1%.
- Ceragon secured a new customer in India for a network modernization project expected to last 2 years.
- Siklu acquisition integration is progressing, with $25-29 million in revenue expected in 2024 and a gross margin of 36%.
- Company targets an 11% to 17% revenue growth and a non-GAAP operating margin of at least 10% for 2024.
- Ceragon aims to introduce new products, expand into new markets, and maintain self-sustaining cash flows.
Company Outlook
- Double-digit revenue growth anticipated in 2024, with a focus on millimeter wave products, private networks, and managed services.
- Revenue growth of 11% to 17% targeted for 2024.
- Non-GAAP operating margin goal set at a minimum of 10%.
- Expansion into new domains and introduction of new products planned to enhance market presence.
Bearish Highlights
- Increase in sales and marketing expenses expected.
- Inventory reduction and stable Days Sales Outstanding (DSO) are operational goals.
Bullish Highlights
- Record non-GAAP operating income achieved in the fourth quarter.
- Strong cash flow performance with over $30 million generated from operations.
- Successful Siklu acquisition with projected revenue contribution and margin maintenance.
- Optimism regarding the stand-alone Siklu business and integration benefits.
Misses
- No specific misses were reported from the earnings call summary.
Q&A Highlights
- Future updates on profitability and margin expansion to be provided in upcoming calls.
- Focus on financial stability and product usability improvements post-Siklu acquisition.
- Anticipation of showcasing new products at the Mobile World Congress.
Ceragon Networks has laid out a clear strategy for growth in the coming year, with the Siklu acquisition playing a pivotal role. The company's financial stability and strategic focus on expanding its product portfolio, particularly in the millimeter wave spectrum, are key drivers for its optimistic outlook. With a new customer win in India and a strong presence in North America, Ceragon is well-positioned to capitalize on the growing demand for wireless backhaul solutions. As the company continues to execute its integration plans and explore cross-selling opportunities, investors and stakeholders can expect to see Ceragon's market presence and profitability strengthen in 2024.
InvestingPro Insights
Ceragon Networks Ltd. (CRNT) has shown promising signs of growth, with its recent quarterly performance indicating a strong upward trajectory. According to InvestingPro data, the company has a market capitalization of $233.77 million and has achieved an impressive 11.75% revenue growth over the last twelve months as of Q3 2023. This growth is in line with the company's own targets for 2024, which include maintaining double-digit revenue growth.
InvestingPro Tips suggest that while Ceragon has not been profitable over the last twelve months, analysts are optimistic about the company's future, predicting profitability this year. This aligns with Ceragon's reported record non-GAAP operating income and its strategic acquisitions aimed at expanding its market reach.
Additionally, the stock is currently trading near its 52-week high, with a price percentage of 96.01% of this peak, reflecting strong investor confidence. With a significant return over the last week of 10.36% and an even more impressive three-month price total return of 50.54%, the momentum behind CRNT appears robust.
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Full transcript - Ceragon Networks (CRNT) Q4 2023:
Operator: Welcome to Ceragon Networks Fourth Quarter 2023 Earnings Conference. At this time, all participants are in a listen-only mode. Following management prepared remarks, we will host a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce you your host Rob Fink of FNK IR.
Rob Fink: Thank you, operator, and good morning, everyone. Hosting today's call is Doron Arazi, Ceragon's Chief Executive Officer and Ronen Stein, Chief Financial Officer. Before we start, I would like to note that certain statements made on this call, including projected financial information and other 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 accounting related matters constitute forward-looking statements within the meaning of the Securities Act 1933, as amended and the Securities Exchange Act of 1934, as amended and the safe-harbor provisions and the Securities Litigation Reform Act of 1995. Ceragon intends forward-looking terminology, such as believes, expects, may, will, should, anticipates, plans or similar expressions to identify forward-looking statements. Such statements reflect only current beliefs, expectations, and assumptions of Ceragon's management, the actual results, performance or achievements of Ceragon may differ materially, as they are subject to certain risks and uncertainties, which could cause the actual results to differ materially from those projected in such forward-looking statements. Such risks and uncertainties are described in Ceragon's most recent annual report on Form 20-F and as may be supplemented from time to time in Ceragon's other filings with the SEC, including today's earlier filing of the earnings press release, 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 results, and there could be no assurances that they will prove accurate. And Ceragon takes 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 from Ceragon's website at ceragon.com. Also, today's call will include non-GAAP financial measures. For reconciliation between GAAP and non-GAAP results, please see the table attached to the press release that was issued earlier this morning, which is also posted on the investor relations section of Ceragon's website. With all that said, I can now turn the call over to Doron. Doron, the call is yours.
Doron Arazi: Thank you, Rob, and good morning, everyone. This was a significant quarter in the evolution of Ceragon. We closed the strategic acquisition that we believe will accelerate our growth, especially in key markets. We exceeded our guidance for revenue and delivered record full year non-GAAP operating income, giving us great momentum and confidence as evidenced by our guidance for significant growth and margin expansion in 2024. Major parts of our strategy are steadily coming together, while we increased our footprint in North America and grow our business with private networks around the world. This might be the right moment to discuss some of the KPIs that are giving us confidence that we are making progress in the execution of our strategy. For example, our bookings from private networks this year were nearly $40 million. This is a very substantial number for us. But even more importantly, while this consists of slightly above 10% of our total booking, the total bookings from new private network customers was above 30% of the company's total new bookings from new customers, three times higher. In terms of the number of new customers, the progress is even more impressive. Approximately 50% of our total new customers this year were private networks customers. As part of our plans, we aspire to double the amount of private network booking in 2024. In parallel, we continue to increase our business in Tier 1 and Tier 2 customers. This has been our bread and butter for many years in existing as well as new customers, such as the most recently noted new customer in India. With a few of our long-standing customers, we are in advanced discussions of selling software-led managed services, and we hope for more business with them in 2024. According to analyst reports, the millimeter wave market segment had the highest growth rate within wireless transport market with a compound annual growth rate of 35% for the last 4 quarters ended September 30, 2023. This particular market segment is expected to continue outpacing the total wireless transport market growth in the coming years. I believe that some of the actions we took in 2023 are positioning Ceragon to monetize on this expected continued high growth. We continue deploying our IP-50E in different regions. We developed our optimized total cost of ownership driven IP-50EX that is expected to be launched in the coming weeks, and we have started the design of the next-generation millimeter wave product that will be based on our new system-on-a-chip, enabling us up to 100 gigabit per second wireless transport link. Last, but not least, we acquired Siklu, further expanding our millimeter wave offering to additional market segments and enhancing our end-to-end solution. With all these actions taken, we believe we will maintain the broadest and strongest millimeter wave products in our market with the richest price performance range. In early December, we completed the acquisition of Siklu. The integration is well underway. Siklu contributed only a modest amount of revenue in the nearly one month they were part of Ceragon and the majority of our growth was organic. However, after closing the acquisition, we received a significant purchase order for - from one of Siklu's largest customer and important vote of confidence for us. The financial key indicators of the acquisition have come in as expected. During 2023, Ceragon generated more than $30 million in cash from operations on a full year basis and $10 million in free cash flow for the full year, even including the cash impact related to the acquisition of Siklu. In the fourth quarter, Ceragon grew revenue nearly 20% to $90.4 million, our highest quarterly revenue level of the year. Again, since the acquisition of Siklu closed only in early December, Siklu's contribution to this revenue was essentially insignificant. We delivered non-GAAP operating income of $7.8 million, the third consecutive quarter above $7 million. On a GAAP basis, our operating income was $4.2 million. Our non-GAAP net income was $3.7 million, the fourth consecutive quarter of non-GAAP net income exceeding $3 million. This strong end to the year enabled us to grow revenue more than 18% for the full year to $347 million, exceeding our full year guidance of $333 million - sorry, $338 million to $346 million. Even excluding the nearly one month of Siklu, we would have achieved our full year revenue guidance with revenue at the high end of the provided range. For the full year, we delivered operating income of $29 million on a non-GAAP basis, an all-time record for Ceragon. On a GAAP basis, operating income was $21.2 million. Net income on a non-GAAP basis was $16.7 million and $6.2 million on a GAAP basis. Clearly, Ceragon has successfully navigated macroeconomic challenges impacting our industry. Continued strong demand for our solutions, especially in North America and India, has enabled us to continue robust growth as we take market share and deliver consistent profitability. In fact, we grew revenue in North America by 43% in 2023 compared to 2022. We continue to believe that our growth strategy, expanding our addressable market beyond Tier 1 and Tier 2 customers is coming into clear focus. The acquisition of Siklu is expected to accelerate this initiative. Our performance in 2023, combined with improving visibility and the expected synergies from Siklu has given us the confidence to guide to continue double-digit revenue growth. We are also targeting significant margin expansion in 2024. Ronen, will speak to our guidance in more details during his comments. In the next few weeks, two new products are expected to be introduced, providing our customers with a lower total cost of ownership and excellent performance attributes. We believe these new additional products will help us further expand our market presence and offer tangible benefits to our customers. In addition, they are expected to also help us with our long-term goal of improving gross margins. We continue with the testing of our new system-on-a-chip named Neptune and expecting to launch the first product using this chip by the end of 2024. As we already announced, it is our intention to demonstrate some of the Neptune capabilities at Mobile World Congress exhibition in Barcelona next week. In particular, we will have a live demonstration of our upcoming Neptune based millimeter wave technology, which we believe far surpasses competitors' capabilities. We will also display our IP-50CX microwave radio and IP-50EX millimeter wave radios, both radios demonstrate a dedication to delivering high performance in compact packages for an optimized total cost of ownership. As we have said, this system-on-a-chip platform represents a meaningful competitive advantage, which should help us further take market share in the future. I'd now like to provide an overview of our Q4 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, we have continued to expand our business in the private network market. We pursue additional opportunities in the enterprise domain, large campuses, including universities, as well as municipalities. Importantly, these contracts typically have a greater component of services and specifically managed services, which is expected to improve the visibility of our backlog and reduce the lumpiness of our business. North America revenue was $24.5 million. Our solutions are in demand even as service providers more cautiously in their capital expenditures. Bookings in North America were in line with expectations in this quarter, adding to our backlog and reflecting several private network wins and strong demand from our largest service provider customer. Siklu North America benefited from a strong finish to the year, reflecting solid demand for Siklu millimeter wave solutions. In India, we have continued to see strong demand for our solutions, even as others report softness. Revenue from India was $30.5 million, and bookings were strong, increasing our backlog. We signed a deal in India, valued at approximately $150 million with a potential for additional revenue over time. Ceragon collaborated with a large global integrator on this project, which will support a network modernization project for a Tier 1 operator in India. This is a brand-new customer for Ceragon and this customer will be the first to deploy our new solutions. The agreement involves planning, product delivery and deployment services, as well as a multiyear contract for Ceragon's managed services that covers day-to-day monitoring management and maintenance oversight of the microwave and millimeter wave network. We expect to begin the delivery and deployment of the new sites in the second quarter and deployment is expected to complete within approximately 2 years. Approximately 75% of the project value expected to be recognized during this time frame. The remaining approximately 25% of the contract value is for managed services and maintenance and is expected to start being recognized over the time of the agreement beginning a year post deployment. This project will certainly benefit our presence in India. And while this win includes margins typical to India, we do not expect this win to be a drag on plans to continue improving our consolidated gross margins. Clearly, we continue to be successful in India and North America, and we anticipate this trend to continue in 2024. With that, I'll turn the call over to Ronen Stein, our CFO, to discuss the results in more detail. Ronen?
Ronen Stein: Thank you, Doron, and good morning, everyone. As Doron outlined, the fourth quarter represented a solid end to a strong year for Ceragon. For the year, we grew revenue by 18% to $347.2 million, expanded our gross and operating profit margins and delivered positive GAAP and non-GAAP net income, along with positive free cash flow. This demonstrates the progress we have made in unlocking the earnings power of Ceragon. 2023 was a very strong year for Ceragon and we enter 2024 with accelerating momentum. We remain a project-driven business with inherent variability in results from quarter-to-quarter, but we delivered four strong quarters each with revenue over $80 million and each with a non-GAAP net income of above $3 million. On an annual basis, we were profitable on a GAAP basis for 2023, the first time since 2018. 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 you to today's press release. Let me now review the actual results. Revenues were $90.4 million, up 20% from $75.5 million in the fourth quarter of 2022. Sequentially, revenue increased approximately 3.6% from $87.3 million in the third quarter of 2023. Our strongest regions in terms of revenues for the quarter were India and North America with $30.5 million and $24.5 million, respectively, in line with the continuous strong demand we see in these regions. Our third strongest region in terms of revenues was Latin America with $11.8 million. We had two customers in the fourth quarter that contributed more than 10% of our revenues. Gross profit for the fourth quarter on a non-GAAP basis was $31.8 million, an increase of 27.1% compared to $25 million in Q4 2022 and up 4.4% compared to $30.4 million in Q4 2023. Our non-GAAP gross margin was 35.1% compared to a gross margin of 33.1% in Q4 2022 and 34.9% in Q3 2023. We continue to achieve high gross margins, mainly as revenues from North America continue to maintain its high level and product mix continue to be favorable while we keep costs under control. Our gross margins continue to fluctuate from quarter-to-quarter due to changes in product and regional mix, as well as other operational factors. However, we continue to see a positive trajectory. As for our operating expenses, research and development expenses for the fourth quarter on a non-GAAP basis were $7.7 million, down from $7.9 million in Q4 2022 and up from $7.3 million in Q3 2023. As a percentage of revenue, our R&D expenses were 8.5% in the fourth quarter compared to 10.4% in the fourth quarter of last year. Sales and marketing expenses for the fourth quarter on a non-GAAP basis were $10.2 million, up from $8.6 million in Q4 2022 and from $9.7 million in Q3 2023. As a percent of revenue, sales and marketing expenses were 11.3% in the fourth quarter compared to 11.4% in fourth quarter last year. General and administrative expenses for the fourth quarter on a non-GAAP basis were $6.1 million, down from $17.6 million in Q4 2022, which included a $12.3 million credit loss provision for a specific customer and up from $5.5 million in Q3 2023. As a percent of revenues, G&A expenses were 6.7% in the fourth quarter compared to 23.4% in the fourth quarter last year. Our non-GAAP operating expenses are expected to increase in 2024 due to the full consolidation of Siklu. However, as we have already said, with our growth plan and the added business from Siklu, we are targeting operating margin expansion. We will continue to be disciplined in regards to our operating expenses to drive increased operating leverage. Our goal is to achieve at least 10% non-GAAP operating margin for 2024 at the midpoint of our revenue guidance. We expect to utilize our strong cash flow to invest in our strategic initiatives to expand our addressable market and target private network customers. We continue to believe that such investments can better position us to see further growth in these segments in 2024. Operating profit for the fourth quarter on a non-GAAP basis was $7.8 million compared with operating loss of $9.1 million for Q4 2022 and a profit of $8 million for Q3 2023. Financial and other expenses for the fourth quarter on a non-GAAP basis were $2.5 million, slightly higher than we expected due to currency losses from our operations in Africa. Our tax expenses for the fourth quarter on a non-GAAP basis increased to $1.5 million, mainly due to an update in our FIN 48 provisions following tax assessments in one of the territories in which we operate. Net income on a non-GAAP basis for the quarter was $3.7 million or $0.04 per diluted share compared to a net loss of $12.5 million or $0.15 per diluted share for Q4 2022 and net income of $5 million or $0.06 per diluted share for Q3 2023. GAAP net loss for the fourth quarter was $1.2 million, negatively impacted mainly by $1.6 million charges related with the acquisition of Siklu and the $1.2 million onetime charge related to a termination of long-term agreement with a third party for a joint development of 5G technologies. In accordance with the terms of this termination, we remained the sole owner of the developed technologies in return for waiving $1.2 million future payments by the third party. This agreement termination also had a significant balance sheet effect on our noncurrent assets and deferred revenues. It is important noting that it does not have any impact on our future revenue projections. Turning to the full year results. Revenues were $347.2 million, up 17.6% from $295.2 million in 2022. The growth is mainly attributable to a substantial growth in North America and India. Gross profit on a non-GAAP basis was $120.9 million, up $27 million from $93.9 million in 2022, giving us a gross margin of 34.8% compared with a gross margin of 31.8% in 2022. This substantial improvement in gross profits as compared with 2022 is mainly attributable to the substantial increase in revenues while maintaining same or higher margins in most regions, keeping general operational costs under tight control, improved supply chain costs, partially offset by higher inventory write-offs. Operating income on a non-GAAP basis was an all-time record at $29 million compared with operating loss of $3 million for 2022. Once again, this demonstrates the progress we have made in unlocking the earnings power of Ceragon and our ability to increase operating leverage. Net income on a non-GAAP basis was $16.7 million or $0.20 per diluted share compared with a net loss of $12.7 million or $0.15 per diluted share for 2022. As for our balance sheet, our cash position at the end of the fourth quarter was $28.2 million compared to $22.9 million at the end of 2022. Short-term loans were $32.6 million compared to $37.5 million as of December 31, 2022. We believe we have cash and facilities that are sufficient for our operations and working capital needs. Our inventory at the end of Q4 2023 was $68.8 million, down from the $72 million at the end of December 2022. We continue to monitor inventory levels, taking into consideration the improvements in availability of components and expected changes in demand. Our trade receivables are at $104.3 million as compared to $100 million at the end of December 2022. Our DSO now stands at 110 days. The main impacts of consolidating Siklu into our balance sheet include the increase of intangible assets and goodwill, the increase of other long-term payables, the impact on our cash position and additional inventory. As for our cash flow, net cash flow generated by operations and investing activities, excluding the $8 million impact of Siklu business combination, net of cash acquired in Q4 2023 was $7.8 million. We generated nearly $11 million in cash from operations in the fourth quarter and nearly $31 million for the full year. As Doron indicated at the top of this call, we believe that the demand in our business will continue to be strong. For 2024, with a caveat of lumpiness between quarters, we expect revenue of $385 million to $405 million, representing growth of 11% to 17% compared to 2023. This guidance includes the contribution from Siklu. 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 cash flow for the full year of 2024. With that, I now open the call for your questions. Operator?
Operator: [Operator Instructions] Our first question today comes from the line of Alex. You may speak.
Unidentified Analyst: Great. Am I up? Can you hear me?
Rob Fink: Yes. If you can speak a little louder, Alex, it will be even better.
Doron Arazi: Good morning, Alex.
Unidentified Analyst: I can certainly do that. So start with congratulations on a great year and a great quarter. Really good job this year, and it looks like the Siklu acquisition was quite strong. So good news all around. So a couple of quick questions. What would be the organic growth rate, excluding Siklu and if you could give us any update on your estimation of the Siklu revenues for the full year?
Ronen Stein: So first of all, we were talking about this when we announced the deal, we're talking about an amount of $25 million to $29 million of revenue that we believe we'll be able to generate in 2024. I think for the sake of the assessment of the organic growth, this is still a good number if we kind of carve it out from the revenue range that we projected. In general, it's not in our intention to start splitting the numbers every quarter because the idea is to really have a very, I would say, tight integration where we go to the market with both products lines, offering solutions. And I think it will be a bit of misleading if we separate that for the future. But the outset, as I said, you should deduct this revenue range, and this should be the relevant gross of modal [ph] growth we expect organically.
Unidentified Analyst: Yes. So no changes in the Siklu revenue guide. Great. Second question, if I could. You've obviously got a bias to higher margins. Can you give us any sense of what kind of margin range we're looking at in terms of gross margins in '24? I assume that it's probably, what, 35% to 36%, something like that. Could you give some guidance there?
Ronen Stein: I think that we will be around 36%. Some quarters will be shy below, some quarters maybe shy above. Of course, there could be lumpiness between quarters. So this is in general. But in a specific quarter, it could jump or be a little bit lower. But this is more or less around the 36%, which is what we see as the annual one.
Unidentified Analyst: And then can you give us some sense of what the growth rate is in between R&D and sales and marketing, G&A? I assume it's double-digit in both sales and marketing and R&D, but probably low single digits in G&A with more expense upfront and then trimming it as you bring that Siklu integration cost down. Is that a fair assessment?
Ronen Stein: So I would say the following. In general, we target, as we said, the total operating profit to be on the midpoint above 10%. The split between the R&D and sales and marketing, I think that we will see a bit higher sales and marketing - a shift to higher sales and marketing, mainly due to the fact that the - our strategy shift into the lower tiers requires more sales and marketing. While in the R&D, there will be some increase, but it's modest - relatively modest, and we keep R&D more or less in the same level, trying not to exceed the R&D levels.
Unidentified Analyst: Okay. And back on the balance sheet. Obviously, there's an opportunity here to bring some inventory down as the supply chain normalizes and your ARRs still look pretty rich. So can you talk about what your expectations are for those two lines as we go through the year?
Ronen Stein: So regarding inventory, we continue to try to achieve a reduction in inventory. For sure, inventory as a percentage of revenues will decrease even if we have only a slight reduction in inventory because at the end, we expect to increase revenues. On the ARR, we expect to see more or less the same level, trying to reduce a bit. It will be a bit challenging, while India, big projects are coming and it might be a little bit challenging on that, but we still expect to be around the same numbers last year - the same DSO to keep the same DSO.
Unidentified Analyst: Last question, and then I'll see the floor. Can you give us any guidance on the tax line and on the interest line? What are we expecting for the full year on those two items?
Ronen Stein: Well, on one hand, we had the $8 million, which we did not increase the - so much - only half of it went into our loans and which we could take the loans down, which will obviously will benefit us on the interest rates. Also, we see some interest rate relief. So it's a little bit going down. So we expect the interest expenses to go down. It's very difficult, as you know, to expect the exchange rate differences as a global company and the effects on certain operational, but we don't see them as a big numbers. This is for the financial expenses. With respect to the tax expenses, I think that this year was a bit higher than the regular and we are working to align our tax structure as much as possible. And hopefully, we will even reduce tax expenses from this year.
Unidentified Analyst: So just to round that out, so tax line about the same or down a hair, and then interest line, what? $2 million a quarter kind of thing?
Ronen Stein: Something like that would be reasonable.
Unidentified Analyst: Thank you. I'll see the floor.
Rob Fink: Thank you so much, Alex.
Operator: Our next question come of the line of Romel Joncio [ph] you may speak.
Unidentified Analyst: Good morning. I wonder if you could just discuss in a little more detail of the integration plans for Siklu, just in terms of combining marketing forces, management, some of the infrastructure that they're bringing in. And I realize there's significant cross-selling opportunities, obviously, with your existing sales force. So I wonder if you could just give us a little more granularity on that, please? Thank you.
Doron Arazi: Yes. Hi, Romel, so the plans, as I said, are basically - or the execution of our plans is underway. What we see at the outset is that there is a strong demand for Siklu products from the original markets they were at. You may understand from the deal structure that they were in some, I would say, financial distress before we bought them. And that actually inhibited their ability to supply the demand. So first of all, the high level, we expect to see the - so to speak, stand-alone Siklu business ramping up because, obviously, we released all the ropes of financial difficulties and so on and so forth. And this is primarily driven by the sales team of Siklu that is part of our region. In parallel, we are seeing opportunities for quick wins especially in customers that are seeking for both microwave and millimeter web solution. Up until recently, when Siklu was a stand-alone company that were not able to offer microwave solutions from their portfolio. And now we see this as an opportunity for us to also boost our microwave business sales in existing customers of Siklu. The other side of it is actually introducing Siklu solutions and products to some of our customers. So far, the initial feedback from the market is very positive, especially looking into the point to multipoint Terragraph solutions that can be used for fixed wireless access. And all in all, we see a lot of interest in Mobile World Congress. We intend to dedicate a big portion of our booth to explain and to show what these products and solutions can do and how they can help. So all in all, we are very optimistic. Our sales team is also learning. We have done a lot of training activities so that we boost also the sales of Siklu products within our sales team and by that, having a multiple or multiplying the sales force that is out there to sell Siklu product. This is for the short run. For the long run, there's much more strategic thoughts that I don't think it's the right time to start discussing them. The only thing I would say is that I'm sure that with the Siklu's acquisition on the Ceragon side, our ease of use in terms of our product is going to improve very significantly because these guys did an amazing job in terms of GUI [ph] design, in terms of alignment when you are doing installation. So this is a part of the integration that we intend to endopt [ph] also on Ceragon product, which means faster deployment by far and also better configuration or easier configuration of our products as well. I think I will stop here.
Unidentified Analyst: Great. That's very helpful. Thanks so much Doron.
Doron Arazi: Sure. Thank you, Romel.
Rob Fink: You have no further question. Doron, please proceed.
Doron Arazi: Thank you. So this was an encouraging year for Ceragon. We're increasing our footprint in multiple domains and expect to continue delivering significant revenue growth. The overall wireless transport market continues to grow based on projections from independent industry analysts and the expectation is that growth will continue in coming years. We believe we can grow much faster than the market growth by focusing on the parts of the market that are expected to grow faster and expanding into new domains. Beyond delivering strong radio products to this market and primarily focusing on millimeter wave that is expected to outpace the market growth, we're expanding our business in other focus domains, which are private networks, as well as the software-led managed services. This growth profile serves as the basis for our expectations for double-digit growth going forward. We are solidly profitable and expect to further expand our margins in 2024. We believe that we are well positioned to continue 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.
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