Ceragon : 2020 Q4 & Full Year Conference Call Remarks

Ceragon Networks - Q4 2020 Conference Call Script

February 8, 2021

Welcome - Operator

Greetings and welcome to Ceragon Networks Limited Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen- only mode. A brief question-and-answer session will follow the formal presentation.

[OPERATOR INSTRUCTIONS]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Maya Lustig, Head of Investor Relations of Ceragon. Thank you, you may begin.

Safe Harbor - Maya

Thank you, operator, and good morning everyone. I am joined by Ira Palti, Ceragon's President & Chief Executive Officer, and Ran Vered, Ceragon's Chief Financial Officer.

Before we start, I would like to note that this call includes information that constitutes "forward-looking statements" within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended, and the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations therefrom will not be material. Such statements involve risks and uncertainties that may cause future results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, such risks, uncertainties and other factors that could affect our results as detailed in our press release that was published earlier today and as further detailed in Ceragon's most recent Annual Report on Form 20-F and in Ceragon's other filings with the Securities and Exchange Commission.

Such forward-looking statements represent our views only as of the date they are made and should not be relied upon as representing our views as of any

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subsequent date. Such forward-looking statements do not purport to be predictions of future events or results, and there can be no assurance that they will prove to be accurate. Ceragon may elect to update these forward-looking statements at some point in the future, but it specifically disclaims any obligation to do so.

Ceragon's public filings are available on the Securities and Exchange Commission's website at www.sec.gov, and may also be obtained from Ceragon's website at www.ceragon.com.

Also, today's call will include certain non-GAAP numbers. For a reconciliation between GAAP and non-GAAP results, please see the table attached to the press release that was issued earlier today.

I will now turn the call over to Ira. Please go ahead.

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Overview Commentary - Ira

Thank you Maya, and good morning everyone.

In the fourth quarter of 2020 as well as almost the entire year, the macro environment remained challenging. Fast-forward to the present, the vaccine roll- out in Israel is inspiring, setting a world record and an example to other nations. I got my second shot already and I'm happy to share with you that I'm feeling perfectly fine.

For Ceragon, the fourth quarter was a relatively good end to a volatile year, with revenues and business activities returning to their normal run rate. Ran will give you the details later in the call.

I'd like to take the opportunity to say a few words about our most recent technology focus, the evolving market, and our emerging roadmap. 2020 was a unique year for business - and as an economist once said, a crisis is a terrible thing to waste. A big opportunity for us this past year was to be a key player in moving the 5G evolution from hype to reality.

As you would agree, 2020 created a deep cultural change in our global society. Due to all the lockdowns, limited face-to-face interactions, and reduced travel, online services became the lifeline. We all adopted new ways of communicating, doing business, shopping, entertaining ourselves, and more. This has generated massive traffic and complexity that strain existing networks, creating an urgent need for more network capacity.

To keep pace, operators are pushing 5G from initial trials into the field - and this is what we have been waiting for and are very excited about.

We believe we are poised to provide operators with the technology, expertise, and services they need to make this transition happen. And we foresee a significant opportunity to grow and take market share.

At Ceragon, we have a history of benefitting from the transition between wireless generations.

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As 5G services and networks build momentum, we believe that once again we will do what we do best - leverage this transition and continue our successful company story in 2021 and beyond.

When we look back, we see that the three main technological breakthroughs that empowered us to become a true global player were Wireless SDH, Wireless IP, and compact multi-coreAll-Outdoor wireless backhaul solutions. And more than that: we became present in all corners of the world, positioned to benefit from the wave when it occurs, where it occurs which is something our best-of breed competitors cannot boast.

Our first big revenue jump was a decade and a half ago, when our wireless SDH solutions drove the transition from 2G to 3G. This almost tripled our revenues at the time, from $55 million to above $160 million per year. We were the first to introduce wireless SDH technologies - a game changer that opened a world of possibilities for operators to bring the internet to mobile devices.

Our next big step was over the next 10 years, when we were the first to introduce wireless IP hauling, compact all-outdoor solutions, dual-core chipsets which allowed us to ride the 4G wave globally, and took us from $160 million to a yearly revenue run-rate of about $300 million.

And that's exactly the position we're in today. We expect to continue to be a key enabler of the exciting 5G evolution.

I'd now like to spend just a few minutes to explain why. Especially for those of you who are new to Ceragon, it might help to break down the elements that contribute to our 5G positioning.

5G networks require massive capacity, density, and flexibility with extremely low latency, and we believe our differentiated solutions lead the market in all of these areas.

We enable operators to utilize a much wider range of spectrum, and our open- networks architecture supports more flexible and operationally efficient network roll-outs and quicker time-to-revenues.

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