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What changed in CERAGON NETWORKS LTD's 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of CERAGON NETWORKS LTD's 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+822 added−325 removedSource: 20-F (2026-04-15) vs 20-F (2025-03-25)

Top changes in CERAGON NETWORKS LTD's 2025 20-F

822 paragraphs added · 325 removed · 225 edited across 2 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

149 edited+326 added−86 removed275 unchanged
Biggest changeIn addition, part of our inventory may be written off, which would increase our cost of revenues; • risks related to fluctuations in currency exchange rates and restrictions related to foreign currency exchange controls; • the expansion of our service offering to new areas, including managed services, software-based services (SaaS) and solutions for wireless communication networks design, might pose product development, marketing, sales, operation, implementation and support challenges that might result in significant losses and may adversely affect our financial results and achievement of projected revenues levels; • risks related to expansion into new market segments, such as the private networks market, the development and commercialization of new products, and the rapid change in the markets for our products and in related technologies and operational concepts development; • risks relating to the failure to attract or retain qualified and skilled “talents” and personnel and the intense competition for such “talents” and personnel; • difficulties in predicting our gross margin as it is exposed to significant fluctuations as a result of potential changes in the various geographical locations where we generate revenues as well as product mix and software and services portions; • our engagement in providing installation or rollout projects for our customers and end users whether directly or via third party prime contractor, which are long-term projects that are subject to inherent risks, including early delivery of our products with delayed payment terms, delays or failures in acceptance testing procedures, and potential significant collection risk from our customers all of which may result in substantial period-to-period fluctuations in our results of operations, cash flow and financial condition; • We are exposed to risks associated with integrating artificial intelligence tools into our operations; • changes in privacy and data protection laws and regulations could have an adverse effect on our business prospects, results of operations, and financial condition; 4 • the impact of complex and evolving regulatory requirements in which we operate, on our business, results of operations and financial condition; • We have significant operations globally, including in countries that may be adversely affected by political or economic instability, major hostilities or acts of terrorism, which expose us to risks and challenges associated with conducting business internationally; • risks relating to macro and micro adverse effects on the global and European markets in which we operate due to the invasion of Ukraine by Russia, such as, among others, cancellation or suspension of orders placed by Russian customers or for Russian end-users, disruption of delivery of raw materials, oil and gas, goods, and supplies’ price increases, disruption to deliveries, shipping and transportation, imposition of sanctions, export control restrictions and embargoes, loss of business, cyber-attacks, commodity shortages and other effects that could have an adverse effect on us, our business, suppliers and customers; • the occurrence of international, political, regulatory or economic events in emerging markets, where the majority of our sales are made; • risks relating to disagreements with tax authorities regarding tax positions that we have taken which may result in increased tax liabilities; • the impact of industry downturn, reduction in our customers’ profitability due to increased regulation or new mobile services requirements; • the impact of the latest Israel-Hamas war, as well as the conditions in the Middle East, could impede our ability to sell, operate and develop, manufacture and deliver products and components and harm our business and financial results; and • risks relating to attempts for a hostile takeover, or shareholder activism, which may, divert our management’s and Board’s attention and resources from our business and could give rise to perceived uncertainties as to our future direction, could result in the loss of potential business opportunities, limit our ability to raise funds and make it more difficult for us to attract and retain qualified personnel for positions in both management and Board levels.
Biggest changeIn addition, part of our inventory may be written off, which would increase our cost of revenues; • risks related to fluctuations in currency exchange rates and restrictions related to foreign currency exchange controls; • the expansion of our service offering to new areas, including managed services and software offerings that might pose product development, marketing, sales, operation, implementation and support challenges; • risks related to expansion into new fields, such as the private networks market, the development and commercialization of new products, and the rapid change in the markets for our products and in related technologies and operational concepts development; • risks relating to the failure to attract or retain qualified and skilled “talents” and personnel and the intense competition for such “talents” and personnel; • our engagement in providing installation or rollout projects for our customers and end users whether directly or via third party prime contractor, which are long-term projects that are subject to inherent risks, including early delivery of our products with delayed payment terms, delays or failures in acceptance testing procedures, and potential significant collection risk from our customers all of which may result in substantial period-to-period fluctuations in our results of operations, cash flow and financial condition; • We are exposed to risks associated with integrating AI tools into our products, solutions, and operations; • changes in privacy and data protection laws and regulations could have an adverse effect on our business prospects, results of operations, and financial condition; • the impact of complex and evolving regulatory requirements in which we operate, on our business, results of operations and financial condition; • We have significant operations globally, including in countries that may be adversely affected by political or economic instability, major hostilities or acts of terrorism, which expose us to risks and challenges associated with conducting business internationally; • Our products and certain components they are comprised of are subject to certain export controls and sanctions regimes that could adversely impact our competitive position and our business ; • risks relating to disagreements with tax authorities regarding tax positions that we have taken which may result in increased tax liabilities; • the occurrence of international, political, regulatory or economic events in emerging markets, where the majority of our sales are made; • the impact of industry downturn, reduction in our customers’ profitability due to increased regulation or new mobile services requirements; and • risks relating to attempts for a hostile takeover, or shareholder activism, which may, divert our management’s and Board’s attention and resources from our business and could give rise to perceived uncertainties as to our future direction, could result in the loss of potential business opportunities, limit our ability to raise funds and make it more difficult for us to attract and retain qualified personnel for positions in both management and Board levels. 4 These and other risk factors are further described and elaborated herein below.
Some of the principal disadvantages of and point-to-multipoint wireless technologies that may make other technologies more appealing include suboptimal operations in extreme weather conditions and limitations in connection with the need to establish line of sight between antennas and limitations in site acquisition for multiple links, or the perception that fiber-optic solutions are more “environmentally-friendly” predominantly in populated areas, favoring other technologies.
Some of the principal disadvantages of point-to-point and point-to-multipoint wireless technologies that may make other technologies more appealing include suboptimal operations in extreme weather conditions and limitations in connection with the need to establish line of sight between antennas and limitations in site acquisition for multiple links, or the perception that fiber-optic solutions are more “environmentally-friendly” predominantly in populated areas, favoring other technologies.
The lack of sufficient production facilities and capacity of the semiconductor foundry industry to meet such demand, which created a shortage in chipsets, electronic equipment and components, has already caused, and may to continue to cause, price increases and extensions of delivery time.
The lack of sufficient production facilities and capacity of the semiconductor foundry industry to meet such demand, which created a shortage in chipsets, electronic equipment and components, has already caused, and may continue to cause, price increases and extensions of delivery time.
We cannot assure you that we will continue to be successful in providing these necessary software-based capabilities in a cost-effective manner, which could affect our business performance. Additionally, we have established technological cooperation with third parties to address some of these capabilities, but we cannot assure that such technological cooperation will be successful or achieve the expected results.
We cannot assure you that we will continue to be successful in providing these necessary software-based capabilities in a cost-effective manner, which could affect our business performance. Additionally, we have established technological cooperation with third parties to address some of these capabilities, but we cannot assure that such cooperation will be successful or achieve the expected results.
In addition, these strategic transactions involve numerous risks, which can jeopardize or even eliminate the benefits entailed in such transactions, such as: • we may not be able to discover, or the target company may fail to provide us with, all relevant information and documents in relation to the transaction, which could lead to a failure to achieve the objectives of acquisition and to a substantial loss; • we may fail to reveal that the due diligence materials and documents provided contain untrue statements of material facts or omit to state a material fact necessary to make the statements therein not misleading, hence fail to achieve the objectives of acquisition and suffer a substantial loss; • we may fail to correctly assess the due diligence investigation findings, establish a correct investment thesis or establish a correct post-merger integration plan; • the process of integrating an acquired business including, for example, the operations, systems, technologies, products, and personnel of the combined companies, particularly companies with large and widespread operations and/or complex products, may be prolonged due to unforeseen difficulties; • the implementation of the transaction may distract and divert management’s attention from the normal daily operations of our business; • we may sustain and record significant expenditure and costs associated with outstanding transactions that either did not or will not materialize or would fail to achieve its objectives; • there will be increased expenses associated with the transaction, and we may need to use a substantial portion of our cash resources or incur debt in order to cover such expenses; expenses which the combined merged companies may not be sufficient to offset; 8 • we may generate negative cash flow as a result of such transaction, which may require fund raising that may not be available for us; • we may incur unexpected accounting and other expenses associated with the transaction, such as tax expenses, write offs, amortization expenses related to intangible assets, restructuring costs, litigation costs or such other costs derived from the acquisition; • the transaction may harm our business as currently conducted (for example, there may be a temporary loss of revenues, we may experience loss of current key employees, customers, resellers, vendors and other business partners or companies with whom we engage today or which relate to any acquired company); • we may be required to issue ordinary shares as part of the transaction, which would dilute our current shareholders; • we may need to assume material liabilities of the merged entity; • in certain cases, mergers and acquisitions require special approvals, or are subject to scrutiny by the local authorities, and failing to comply with such requirements or to receive such approvals, may prevent or limit our ability to complete the acquisitions as well as expose us to legal proceedings prior or following the consummation of such acquisitions.
In addition, these strategic transactions involve numerous risks, which can jeopardize or even eliminate the benefits entailed in such transactions, such as: • we may not be able to discover, or the target company may fail to provide us with, all relevant information and documents in relation to the transaction, which could lead to a failure to achieve the objectives of acquisition and to a substantial loss; • we may fail to reveal that the due diligence materials and documents provided contain untrue statements of material facts or omit to state a material fact necessary to make the statements therein not misleading, hence fail to achieve the objectives of acquisition and suffer a substantial loss; • we may fail to correctly assess the due diligence investigation findings, establish a correct investment thesis or establish a correct post-merger integration plan; • the process of integrating an acquired business including, for example, the operations, systems, technologies, products, and personnel of the combined companies, particularly companies with large and widespread operations and/or complex products, may be prolonged due to unforeseen difficulties; • the implementation of the transaction may distract and divert management’s attention from the normal daily operations of our business; • we may sustain and record significant expenditure and costs associated with outstanding transactions that either did not or will not materialize or would fail to achieve its objectives; • there will be increased expenses associated with the transaction, and we may need to use a substantial portion of our cash resources or incur debt in order to cover such expenses; expenses which the combined merged companies may not be sufficient to offset; • we may generate negative cash flow as a result of such transaction, which may require fund raising that may not be available for us; • we may incur unexpected accounting and other expenses associated with the transaction, such as tax expenses, write offs, amortization expenses related to intangible assets, restructuring costs, litigation costs or such other costs derived from the acquisition; • the transaction may harm our business as currently conducted (for example, there may be a temporary loss of revenues, we may experience loss of current key employees, customers, resellers, vendors and other business partners or companies with whom we engage today or which relate to any acquired company); • we may be required to issue ordinary shares as part of the transaction, which would dilute our current shareholders; • we may need to assume material liabilities of the merged entity; • in certain cases, mergers and acquisitions require special approvals, or are subject to scrutiny by the local authorities, and failing to comply with such requirements or to receive such approvals, may prevent or limit our ability to complete the acquisitions as well as expose us to legal proceedings prior or following the consummation of such acquisitions.
Below are the main risks and challenges that we face as a result of operating in emerging markets: • unexpected or inconsistent changes in regulatory requirements, including security regulations, licensing and allocation processes; • unexpected changes in or imposition of tax, tariffs, customs levies or other barriers and restrictions; • fluctuations in foreign currency exchange rates; • restrictions on currency and cash repatriation; • the burden of complying with a variety of foreign laws, including foreign import restrictions which may be applicable to our products; • difficulties in protecting intellectual property; 21 • laws and business practices favoring local competitors; • collection delays and uncertainties; • difficulties in transferring or obtaining funds from certain countries within these emerging markets; • requirements to do business in local currency; and • judicial systems that do not apply the principles of natural justice with regard to disputes with foreign nationals.
Below are the main risks and challenges that we face as a result of operating in emerging markets: • unexpected or inconsistent changes in regulatory requirements, including security regulations, licensing and allocation processes; • unexpected changes in or imposition of tax, tariffs, customs levies or other barriers and restrictions; • fluctuations in foreign currency exchange rates; • restrictions on currency and cash repatriation; • the burden of complying with a variety of foreign laws, including foreign import restrictions which may be applicable to our products; • difficulties in protecting intellectual property; • laws and business practices favoring local competitors; • collection delays and uncertainties; • difficulties in transferring or obtaining funds from certain countries within these emerging markets; • requirements to do business in local currency; and • judicial systems that do not apply the principles of natural justice with regard to disputes with foreign nationals.
We have a shelf registration statement on Form F-3 on file with the SEC which allows us to offer and sell, from time to time, in one or more offerings, our ordinary shares, rights, warrants, debt securities and units comprising any combination of these securities with an aggregate offering price of up to U.S.$150 million (the “Shelf Registration Statement”).
We have a shelf registration statement on Form F-3 on file with the SEC 1 which allows us to offer and sell, from time to time, in one or more offerings, our ordinary shares, rights, warrants, debt securities and units comprising any combination of these securities with an aggregate offering price of up to U.S.$150 million (the “Shelf Registration Statement”).
Our business, and our customers’ businesses, are sensitive to macroeconomic conditions. 5 Economic factors, such as interest rates, inflation, currency exchange rates, changes in monetary and related policies, market volatility, customer confidence, recession or recessionary indicators, supply chain issues, unemployment rates and real wages, are among the most significant factors that impact customer spending behavior.
Our business, and our customers’ businesses, are sensitive to macroeconomic conditions. Economic factors, such as interest rates, inflation, currency exchange rates, changes in monetary and related policies, market volatility, customer confidence, recession or recessionary indicators, supply chain issues, unemployment rates and real wages, are among the most significant factors that impact customer spending behavior.
The completion of the installation and testing of the customer’s networks and the completion of all other suppliers’ network elements are subject to the customer’s timing and efforts, and other factors outside our control, such as site readiness for installation or availability of power and access to sites, which may prevent us from making predictions of revenue with any certainty. 17 Also, as we usually engage subcontractors, third party service providers and temporary employees to perform a significant part of the work (such as installation, supervision, on-site testing, commissioning, repair and replacement services), we are dependent on such service providers’ and temporary employees’ timely and quality performance, including with respect to the fulfillment of or default under their back-to-back obligations to those we may have undertaken vis-à-vis our customers, as well as pricing that may fluctuate significantly due to various factors.
The completion of the installation and testing of the customer’s networks and the completion of all other suppliers’ network elements are subject to the customer’s timing and efforts, and other factors outside our control, such as site readiness for installation or availability of power and access to sites, which may prevent us from making predictions of revenue with any certainty. 18 Also, as we usually engage subcontractors, third party service providers and temporary employees to perform a significant part of the work (such as installation, supervision, on-site testing, commissioning, repair and replacement services), we are dependent on such service providers’ and temporary employees’ timely and quality performance, including with respect to the fulfillment of or default under their back-to-back obligations to those we may have undertaken vis-à-vis our customers, as well as pricing that may fluctuate significantly due to various factors.
However, the duration, severity and global implications (including potential inflation and devaluation consequences) of these and other geopolitical conflicts that may arise in the future, cannot be predicted at this time and could have an effect on our business, exchange rate exposure, supply chain, operational costs and commercial presence in these markets.
The duration, severity and global implications (including potential inflation and devaluation consequences) of these and other geopolitical conflicts that may arise in the future, cannot be predicted at this time and could have an effect on our business, exchange rate exposure, supply chain, operational costs and commercial presence in these markets.
We monitor closely the directives of the Israeli National Emergency Management Authority and where needed, make required adjustments to our operations in accordance with such directives, including by instructing our workforce to work remotely. 27 Our headquarters, a substantial part of our research and development facilities and some of our contract manufacturers’ facilities are located in Israel.
We monitor closely the directives of the Israeli National Emergency Management Authority and where needed, make required adjustments to our operations in accordance with such directives, including by instructing our workforce to work remotely. Our headquarters, a substantial part of our research and development facilities and some of our contract manufacturers’ facilities are located in Israel.
In some cases, we may face regulatory, tax, accounting or corporate restrictions on money transfer from the country from which consideration should have been paid to us (or to our respective selling subsidiary) or revenues could have accumulated and allocated to us, or could face general restriction on foreign currency transfer outside of such country.
In some cases, we may face regulatory, tax, accounting or corporate restrictions on money transfer from the country from which consideration should have been paid to us (or to our respective selling subsidiary) or revenues could have accumulated and allocated to us or could face general restrictions on foreign currency transfer outside of such country.
Additionally, while in 2024 and 2023 we have taken measures to improve our gross profit, reduce our operating expenses, ratio, improve our working capital management and secure more booking, the implementation of such measures is lengthy, may be delayed as a result of the other risks and uncertainties detailed in this Annual Report on Form 20-F and there is no assurance that such measures will be sufficient or successful or that we will be able to preserve the increase in our revenues, and not return to experiencing a decline in our revenues, incur substantial losses and generate negative cash flows or that a decline, losses and negative cash flow will not occur.
Additionally, while in 2025, 2024 and 2023 we have taken measures to improve our gross profit, reduce our operating expenses, improve our working capital management and secure more booking, the implementation of such measures is lengthy, may be delayed as a result of the other risks and uncertainties detailed in this Annual Report on Form 20-F and there is no assurance that such measures will be sufficient or successful or that we will be able to preserve the increase in our revenues, and not return to experiencing a decline in our revenues, incur substantial losses and generate negative cash flows or that a decline, losses and negative cash flow will not occur.
If we are unable to obtain such resources nor generate positive cash flow from our operations, our liquidity and ability to fund operations could be impaired. We face intense competition from other wireless equipment providers and from other communication solutions that compete with our wireless solutions.
If we are unable to obtain such resources nor generate positive cash flow from our operations, our liquidity and ability to fund operations could be impaired. 7 We face intense competition from other wireless equipment providers and from other communication solutions that compete with our wireless solutions.
Due to the nature of our business and environmental risks, we cannot provide assurance that any such material liability will not arise in the future. 19 Our wireless communications products emit electromagnetic radiation.
Due to the nature of our business and environmental risks, we cannot provide assurance that any such material liability will not arise in the future. Our wireless communications products emit electromagnetic radiation.
A variety of factors may affect the market price and trading volume of our ordinary shares, including: • announcements of technological innovations or new commercial products by us or by our competitors; • announcement of significant deals won by us or by our competitors; • competitors’ positions and other events related to our market; • changes in the Company’s estimations regarding forward looking statements and/or announcement of actual results that vary significantly from such estimations; • the announcement of corporate transactions, merger and acquisition activities or other similar events by companies in our field or industry; • changes and developments effecting our field or industry; • period to period fluctuations in our results of operations and cash flow; • changes in financial estimates by securities analysts; • our earnings releases and the earnings releases of our competitors; • our ability to show and accurately predict revenues; • our need to raise additional funds and the success or failure thereof; 25 • other announcements, whether by the Company or others, referring to the Company’s financial condition, results of operations and changes in strategy; • changes in senior management or the board of directors; • the general state of the securities markets (with a particular emphasis on the technology and Israeli sectors thereof); • the general state of the credit markets, the volatility of which could have an adverse effect on our investments; • developments concerning material proprietary rights, including material patents; • whether we or our competitors receive or are denied regulatory approvals; and • global and local macroeconomic developments, components shortage, effects of the Russia-Ukraine war, the conflict between China and Taiwan, and the state of war declared in Israel in October 2023, and other global occurrences, such as an outbreak of pandemic with similar effect.
A variety of factors may affect the market price and trading volume of our ordinary shares, including: • announcements of technological innovations or new commercial products by us or by our competitors; • announcement of significant deals won by us or by our competitors; • competitors’ positions and other events related to our market; • changes in the Company’s estimations regarding forward looking statements and/or announcement of actual results that vary significantly from such estimations; • the announcement of corporate transactions, merger and acquisition activities or other similar events by companies in our field or industry; • changes and developments effecting our field or industry; • period to period fluctuations in our results of operations and cash flow; • changes in financial estimates by securities analysts; 27 • our earnings releases and the earnings releases of our competitors; • our ability to show and accurately predict revenues; • our need to raise additional funds and the success or failure thereof; • other announcements, whether by the Company or others, referring to the Company’s financial condition, results of operations and changes in strategy; • changes in senior management or the board of directors; • the general state of the securities markets (with a particular emphasis on the technology and Israeli sectors thereof); • the general state of the credit markets, the volatility of which could have an adverse effect on our investments; • developments concerning material proprietary rights, including material patents; • whether we or our competitors receive or are denied regulatory approvals; and • global and local macroeconomic developments, components shortage, effects of the Russia-Ukraine war, the conflict between China and Taiwan, and the state of war declared in Israel in October 2023, the military confrontation between Israel and Iran, and other global occurrences, such as an outbreak of pandemic with similar effect.
Liquidity and Capital Resources.” In addition, the credit facility is provided by the syndication with each bank agreeing severally (and not jointly) to make its agreed portion of the credit loans to us.
Liquidity and Capital Resources.” 25 In addition, the credit facility is provided by the syndication with each bank agreeing severally (and not jointly) to make its agreed portion of the credit loans to us.
The above-mentioned risks are exacerbated in the case of raw materials or component parts that are purchased from a single-source supplier. 11 The global supply of electronic components, including integrated circles, has experienced, and may continue to experience an increase in demand, while production capacity remains limited, which had, and may continue to have, an adverse effect on the lead-time for our components and increase in their prices.
The above-mentioned risks are exacerbated in the case of raw materials or component parts that are purchased from a single-source supplier. 13 The global supply of electronic components, including integrated circles, has experienced, and may continue to experience an increase in demand, while production capacity remains limited, which had, and may continue to have, an adverse effect on the lead-time for our components and increase in their prices.
Furthermore, if we invest substantial time and resources into such expansion and are unable to achieve the desired results, our business, financial condition, and operating results could be adversely affected.
If we invest substantial time and resources into such expansion and are unable to achieve the desired results, our business, financial condition, and operating results could be adversely affected.
Such claims may harm our development efforts and competitive advantage and expose us to copyright infringement claims that could be expensive and could disrupt our business. 24 Risks Relating to Our Ordinary Shares Holders of our ordinary shares who are U.S. residents may be required to pay additional U.S. income taxes if we are classified as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.
Such claims may harm our development efforts and competitive advantage and expose us to copyright infringement claims that could be expensive and could disrupt our business. 26 Risks Relating to Our Ordinary Shares Holders of our ordinary shares who are U.S. residents may be required to pay additional U.S. income taxes if we are classified as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.
Based on our analysis of our income, assets, activities and market capitalization, we do not believe that we were a PFIC for the taxable year ended December 31, 2024. However, there can be no assurance that the United States Internal Revenue Service (“IRS”) will not challenge our analysis or our conclusion regarding our PFIC status.
Based on our analysis of our income, assets, activities and market capitalization, we do not believe that we were a PFIC for the taxable year ended December 31, 2025. However, there can be no assurance that the United States Internal Revenue Service (“IRS”) will not challenge our analysis or our conclusion regarding our PFIC status.
In addition to these primary competitors, a number of smaller wireless transport specialists, mainly including Aviat Networks Inc. (“Aviat”) and SIAE Microelectronica S.P.A., offer, or are developing, competing products. We also face competition in the private networks segment from mobile operators, system integrators and hardware vendors.
In addition to these primary competitors, a number of smaller wireless transport specialists, mainly including Aviat Networks Inc. (“Aviat”) and SIAE Microelectronica S.P.A., offer, or are developing, competing products. We also face competition in the private networks field from mobile operators, system integrators and hardware vendors.
We may lose our status as a foreign private issuer, which would increase our compliance costs and could negatively impact our operations results.
We may lose our status as a foreign private issuer, which would increase our compliance costs and could negatively impact on our operations results.
There is also a risk that we were a PFIC for one or more prior taxable years or that we will be a PFIC in future years, including 2025. If we were a PFIC during any prior years, U.S. shareholders who acquired or held our ordinary shares during such years will generally be subject to the PFIC rules.
There is also a risk that we were a PFIC for one or more prior taxable years or that we will be a PFIC in future years, including 2026. If we were a PFIC during any prior years, U.S. shareholders who acquired or held our ordinary shares during such years will generally be subject to the PFIC rules.
The amount, if any, by which our tax liability would increase will depend upon the rate of any tax increase, the amount of any tax rate benefit reduction, and the amount of any taxable income that we may earn in the future. For a description of legislation regarding “Preferred Enterprise” see Item 10.
The amount, if any, by which our tax liability would increase will depend upon the rate of any tax increase, the amount of any tax rate benefit reduction, and the amount of any taxable income that we may earn in the future. For a description of legislation regarding “Preferred Enterprise” see Item 10. “ADDITIONAL INFORMATION”.
These disruptions are reflected both in price increases and shortages impacting our contract manufacturers and suppliers, and adversely affect our production and supply chain costs and timelines. The international environment in which we operate is affected by inter-country trade agreements and tariffs.
These disruptions are reflected both in price increases and shortages impacting our contract manufacturers and suppliers, and adversely affect our production and supply chain costs and timelines. The international environment in which we operate is affected by international trade agreements and tariffs.
We cannot assure you that despite our efforts we will be able to successfully or effectively assure that all of our suppliers, agent and resellers will adhere, or will succeed in making sure that their suppliers or customers adhere, to the regulatory requirements that flow down to them.
We cannot assure you that despite our efforts we will be able to successfully or effectively assure that all of our suppliers, agents and resellers will adhere, or will succeed in making sure that their suppliers or customers adhere, to the regulatory requirements that flow down to them.
As such, we are exempt from certain provisions under the Exchange Act applicable to U.S. public companies, including: • the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q and current reports on Form 8-K; • the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of securities registered under the Exchange Act, including extensive disclosure of compensation paid or payable to certain of our highly compensated executives as well as disclosure of the compensation determination process; • the provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; and • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profit realized from any “short-swing” trading transaction (a purchase and sale, or sale and purchase, of the issuer’s equity securities within less than six months).
As such, we are exempt from certain provisions under the Exchange Act applicable to U.S. public companies, including: • the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q and current reports on Form 8-K; • the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of securities registered under the Exchange Act, including extensive disclosure of compensation paid or payable to certain of our highly compensated executives as well as disclosure of the compensation determination process; • the provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; and • the sections of the Exchange Act establishing insider liability for profit realized from any “short-swing” trading transaction (a purchase and sale, or sale and purchase, of the issuer’s equity securities within less than six months).
For example, many U.S. federal and state and foreign government bodies and agencies have introduced and/or are currently considering additional laws and regulations governing the use of AI technologies.
Many U.S. federal and state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations governing the use of AI technologies.
The rate of accumulation may increase in a period of economic downturn. Our international operations expose us to the risk of fluctuations in currency exchange rates and restrictions related to foreign currency exchange controls. We are a global company that operates in a multi-currency environment.
The rate of accumulation may increase in a period of economic downturn. Our international operations expose us to the risk of fluctuations in currency exchange rates and restrictions related to foreign currency exchange controls. We are a global company operating in a multi-currency environment.
Accordingly, our operations and information technology systems could be materially and adversely affected by acts of terrorism, including through cybersecurity threats, or if major hostilities were to occur in the Middle East or trade between Israel and its present trading partners were materially impaired, including as a result of acts of terrorism in the United States or elsewhere.
Accordingly, our operations and information technology systems could be materially and adversely affected by acts of terrorism, including through cybersecurity threats, or if trade between Israel and its present trading partners were materially impaired due to escalating hostilities in the Middle East, including as a result of acts of terrorism in the United States or elsewhere.
Nonetheless, the pace of the transition to 5G technologies and 5G rollout is hard to predict, as it depends on numerous factors which are uncertain and beyond our control including, economic factors, financial conditions of operators and the development of 5G use cases.
Nonetheless, the pace of the transition to 5G technologies and 5G rollout, as well as the timeline for 6G development, is hard to predict, as it depends on numerous factors which are uncertain and beyond our control including, economic factors, financial conditions of operators and the development of 5G use cases.
The wireless transport equipment industry is characterized by rapid technological developments, changing customer needs that expect increase in product performance and evolving industry standards, as well as increasing pressure to produce more cost-effective products.
The wireless transport equipment industry is characterized by rapid technological developments, changing customer needs that expect increases in product performance, evolving industry standards, and increasing pressure to produce more cost-effective products.
Although during 2024, we have invested efforts in diversifying our manufacturers and suppliers base, and despite our policy to maintain at least a second source for all of our products’ components, disruption in deliveries or in operations of these and other third-party suppliers or service providers, as a result of, for example, capacity constraints, production disruptions, price increases, regulatory restrictions, force majeure events, as well as quality control problems related to components, may all cause such third parties not to comply with their contractual obligations to us.
Although during 2025 , we have invested efforts in diversifying our manufacturers and suppliers base, including through our initiative to shift certain manufacturing operations to India, and despite our policy to maintain at least a second source for all of our products’ components, disruption in deliveries or in operations of these and other third-party suppliers or service providers, as a result of, for example, capacity constraints, production disruptions, price increases, regulatory restrictions, force majeure events, as well as quality control problems related to components, may all cause such third parties not to comply with their contractual obligations to us.
If indeed such cooperation will not be successful, we shall have to consider other alternatives, and such investigation and entering into new cooperation in lieu of the failed ones, might cause a delay in the introduction of such capabilities.
If such cooperation is not successful, we will have to consider other alternatives, and such investigation and entering into new cooperation in lieu of the failed ones might cause a delay in the introduction of such capabilities.
The Houthi movement in Yemen has targeted marine vessels in the Red Sea, affecting those enroute to Israel or partly owned by Israeli businesses. This has led shipping companies to reroute or halt shipments to Israel.
The Houthi movement in Yemen, an Iranian-backed proxy, has targeted marine vessels in the Red Sea, affecting those enroute to Israel or partly owned by Israeli businesses. This has led shipping companies to reroute or halt shipments to Israel.
As a result, our gross margins and results of operations could be adversely affected. 12 Inventory of raw materials, work in-process or finished products located either at our warehouses or our customers’ sites as part of the network build-up may accumulate in the future, and we may encounter losses due to a variety of factors, including: • new generations of products replacing older ones, including changes in products because of technological advances and cost reduction measures; and • the need of our contract manufacturers to order raw materials that have long lead times, our need to order a Last Time Buy of end of life components and our inability to estimate exact amounts and types of items thus needed.
Inventory of raw materials, work in-process or finished products located either at our warehouses or our customers’ sites as part of the network build-up may accumulate in the future, and we may encounter losses due to a variety of factors, including: • new generations of products replacing older ones, including changes in products because of technological advances and cost reduction measures; and • the need of our contract manufacturers to order raw materials that have long lead times, our need to order a Last Time Buy of end of life components and our inability to estimate exact amounts and types of items thus needed.
Even after we have completed the transaction, we cannot assure that we will be able to integrate the operations of the acquired business without encountering difficulty regarding different business strategies with respect to marketing and integration of personnel with disparate business backgrounds and corporate cultures.
Even after we have completed the transaction, we cannot assure that we will be able to integrate the operations of the acquired business without encountering difficulty regarding different business strategies with respect to marketing and integration of personnel with disparate business backgrounds and corporate cultures. The integration of E2E is still in progress.
We anticipate that a portion of our expenses will continue to be denominated in NIS. Devaluation of the U.S. dollar against the NIS, could have a negative impact on our results of operations.
We anticipate that a portion of our expenses will continue to be denominated in NIS. Devaluation of the U.S. dollar against the NIS, as experienced in recent months, could have a negative impact on our results of operations.
For additional information see “ The global supply of electronic components has experienced, and may continue to experience, a sharp increase in demand, while production capacity remains limited, which had, and may continue to have, an adverse effect on the lead-time for our components and increased their prices” .
For additional information see “ The global supply of electronic components, including integrated circles, has experienced, and may continue to experience, an increase in demand, while production capacity remains limited, which had, and may continue to have, an adverse effect on the lead-time for our components and increase their prices” .
Furthermore, the increasingly growing capabilities of artificial intelligence (“AI”) and its availability for public use and adoption, may be used to identify vulnerabilities in our systems craft sophisticated cyberattacks.
Furthermore, the increasingly growing capabilities of AI and its availability for public use and adoption, may be used to identify vulnerabilities in our systems craft sophisticated cyberattacks.
During 2024, we incurred losses in the amount of $3.5 million as a result of exchange rate fluctuations that have not been fully offset by our hedging policy. The volatility in the foreign currency markets may make it challenging to hedge our foreign currency exposures effectively.
During 2025, we incurred losses in the amount of $2.0 million as a result of exchange rate fluctuations that have not been fully offset by our hedging policy. The volatility in the foreign currency markets may make it challenging to hedge our foreign currency exposures effectively.
However, the mass production and productization of the IP-100E platform is planned for 2026, and therefore, we do not expect significant commercialization of the IP-100E platform in 2025. Also, any delays in the launch of new SoC-based products may cause us to lose our competitive advantage.
However, the mass production and productization of the IP-100E platform is planned for late 2026, and therefore, we do not expect significant commercialization of the IP-100E platform before that time. Any delays in the launch of new SoC-based products may cause us to lose our competitive advantage.
Although some of these risks derive inherently from the concentration of our business, certain risks may be attributed also to the geographical territories in which we operate as detailed under the risk “ Due to the volume of our sales in emerging markets, we are susceptible to a number of political, economic and regulatory risks that could have a material adverse effect on our business, reputation, financial condition and results of operations ” . 6 Our business is subject to significant volatility, primarily due to fluctuations in market demand.
Although some of these risks derive inherently from the concentration of our business, certain risks may be attributed also to the geographical territories in which we operate as detailed under the risk “ Due to the volume of our sales in emerging markets, we are susceptible to a number of political, economic and regulatory risks that could have a material adverse effect on our business, reputation, financial condition and results of operations .
If our competitors or new market entrants will develop products for this market that are, or are perceived to be, more advantageous to our customers from a technological and/or financial (i.e., cost-benefit) perspective, or if they introduce and market their products prior to us doing so, they may be able to better position themselves in the market and we may lose potential or existing market share, which could have a material adverse effect on our business, financial results and financial condition.
If our competitors or new market entrants develop products for this market that are, or are perceived to be, more advantageous to our customers from a technological or financial perspective, or if they introduce and market their products prior to us doing so, they may be able to better position themselves in the market, and we may lose potential or existing market share, which could have a material adverse effect on our business, financial results, and financial condition. 16 We are continuously seeking to develop new products and enhance our existing products.
The changes include but are not limited to: (i) further expansion of coverage; expansion out of metro, as well as other urban and suburban areas to rural areas; (ii) densification and optimization of the 4G networks to provide faster speeds; (iii) introduction of 5G services as well as expansion and densification of the 5G networks; and (iv) 2G and/or 3G networks shutdown, which is expected to take place within the next several years and designed to free spectrum for the delivery of 5G services.
The changes include but are not limited to: (i) further expansion of coverage; expansion out of metro, as well as other urban and suburban areas to rural areas; (ii) densification and optimization of the 4G networks to provide faster speeds; (iii) introduction of 5G services as well as expansion and densification of the 5G networks; and (iv) 2G and/or 3G networks shutdown, which is already taking place and designed to free spectrum for the delivery of 5G services.
We may, therefore, be denied access to our customers or suppliers or denied the ability to ship products as a result of a closing of the borders of the countries in which we sell our products, or in which our or our suppliers’ operations are located, due to economic, legislative, political and military conditions, including hostilities and acts of terror, in such countries.
We may, therefore, be denied access to our customers or suppliers or denied the ability to ship products as a result of a closing of the borders of the countries in which we sell our products, or in which our or our suppliers’ operations are located, due to economic, legislative, political and military conditions, including hostilities and acts of terror, in such countries. 21 Our corporate headquarters and a portion of our manufacturing activities are located in Israel.
In addition, failure to comply with the Israeli Privacy Protection Law 1981 and its regulations (PPL), as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrative fines, civil claims (including class actions) and, in certain cases, criminal liability. In August 2025, a comprehensive amendment to the PPL is expected to enter into effect.
In addition, failure to comply with the Israeli Privacy Protection Law 1981 and its regulations (PPL), as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrative fines, civil claims (including class actions) and, in certain cases, criminal liability. In August 2025, a comprehensive amendment to the PPL became effective.
In addition, some of our contract manufacturers currently obtain key components from a limited number of suppliers. Our contract manufacturers’ dependence on a single or sole source supplier, or on a limited number of suppliers, subjects us to the following risks: • The component suppliers may experience shortages in components and interrupt or delay their shipments to our contract manufacturers.
Our contract manufacturers’ dependence on a single or sole source supplier, or on a limited number of suppliers, subjects us to the following risks: • The component suppliers may experience shortages in components and interrupt or delay their shipments to our contract manufacturers.
Furthermore, as noted above, we consider the wireless market transition from 4G to 5G technologies to be one of our main growth engines in the foreseeable future.
We consider the wireless market transition from 4G to 5G technologies to be one of our main growth engines in the foreseeable future.
In the two-year period ended December 31, 2024, the price of our ordinary shares has ranged from a high of $5 per share to a low of $1.55 per share.
In the two-year period ended December 31, 2025, the price of our ordinary shares has ranged from a high of $5.48 per share to a low of $1.84 per share.
In addition, most recently Israel has been involved in an armed operation with armed groups in the West Bank, which also included mobilization of armed forces.
In addition, Israel has been involved in an armed operations with armed groups in the West Bank, which also included mobilization of armed forces.
Any such failure or inability to obtain or maintain adequate protection of our intellectual property rights, for any reason, could have a material adverse effect on our business, results of operations and financial condition.
Any such failure or inability to obtain or maintain adequate protection of our intellectual property rights, for any reason, could have a material adverse effect on our business, results of operations and financial condition. Defending against intellectual property infringement claims could be expensive and could disrupt our business.
Further, increases in interest rates, lead us, and our customers, to experience higher financing costs, which may, in turn, negatively affect our business, financial condition and results of operations. The global economy has also been impacted by fluctuating foreign exchange rates and geopolitical tensions, which could result in supply chain disruptions.
Further, elevated or rising interest rates, lead us, and our customers, to experience higher financing costs, which may, in turn, negatively affect our business, financial condition and results of operations. The global economy has also been impacted by fluctuating foreign exchange rates and geopolitical tensions.
If operators fail to monetize new services, fail to introduce new business models or experience a decline in operator revenues or profitability, their willingness or ability to invest further in their network systems may decrease, which will reduce their demand for our products and services and may have an adverse effect on our business, operating results and financial condition. 22 Our sales cycles in connection with competitive bids or to prospective customers are lengthy.
If operators fail to monetize new services, fail to introduce new business models or experience a decline in operator revenues or profitability, their willingness or ability to invest further in their network systems may decrease, which will reduce their demand for our products and services and may have an adverse effect on our business, operating results and financial condition.
A major portion of our business concentrates on a limited number of large mobile operators. The significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect our business, financial condition and results of operations. A significant portion of our business is concentrated with certain customers.
The significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect our business, financial condition and results of operations. A significant portion of our business is concentrated with certain customers.
This amendment aims to strengthen the Israeli Privacy Protection Authority’s enforcement powers and grant it significant authority to impose administrative fines for non-compliance. The amendment is also expected to introduce broader oversight capabilities, alongside mechanisms for monitoring adherence to privacy guidelines, thereby heightening the compliance requirements for organizations that handle personal data in Israel.
This amendment enhanced the Israeli Privacy Protection Authority’s enforcement powers, granting it significant authority to impose administrative fines for non-compliance. The amendment also introduced broader oversight capabilities, alongside mechanisms for monitoring adherence to privacy guidelines, thereby heightening the compliance requirements for organizations that handle personal data in Israel.
If we are unable to compete effectively, our business, financial condition and results of operations would be materially adversely affected. For more information on the “best-of-breed” market, please refer to Item 4. INFORMATION ON THE COMPANY; B. Business Overview – “Wireless Transport; Short-haul, Long-haul and Small Cells Transport”.
If we are unable to compete effectively, our business, financial condition and results of operations would be materially adversely affected. For more information on the “best-of-breed” market, please refer to Item 4. INFORMATION ON THE COMPANY; B.
Therefore, there is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs, and we cannot predict whether, and to what extent, U.S. trade policies will change in the future, including as a result of changes by the new U.S. presidential administration.
Therefore, there is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs, and we cannot predict whether, and to what extent, U.S. trade policies will change in the future.
If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact by an expert witness, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above.
If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact by an expert witness, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.
As of the date hereof, we operate continuously, and so far, the situation in Israel has not had a material effect on our operations and business.
None of our employees were directly harmed as a result of the war. As of the date hereof, we operate continuously, and so far, the situation in Israel has not had a material effect on our operations and business.
Alternatively, if we underestimate our requirements and our actual orders from customers are significantly larger than our planned forecast, we may be required to accelerate the production and purchase of supplies, which may result in additional costs of buying components at less attractive prices, paying expediting fees and excess shipment costs, overtime and other manufacturing expenses.
This may cause additional write offs and may have a negative impact on our results of operations and cash flow. 14 Alternatively, if we underestimate our requirements and our actual orders from customers are significantly larger than our planned forecast, we may be required to accelerate the production and purchase of supplies, which may result in additional costs of buying components at less attractive prices, paying expediting fees and excess shipment costs, overtime and other manufacturing expenses.
We have significant operations globally, including in countries that may be adversely affected by political or economic instability, major hostilities or acts of terrorism, which expose us to risks and challenges associated with conducting business internationally.
We have significant operations globally, including in countries that may be adversely affected by political or economic instability, major hostilities or acts of terrorism, which expose us to risks and challenges associated with conducting business internationally. Some of the regions where we operate may be more susceptible to political and economic instability, such as the Middle East.
“FINANCIAL INFORMATION – Legal Proceedings”. 26 If we sell ordinary shares in future financings, shareholders may experience immediate dilution and as a result our share price may decline.
For more information see below in Item 8. “FINANCIAL INFORMATION – Legal Proceedings”. 28 If we sell ordinary shares in future financings, shareholders may experience immediate dilution and as a result our share price may decline.
The state of war declared in Israel in October 2023, and the military activity and regional conflicts, may result in disruption to our operations and facilities, such as our manufacturing and R&D facilities located in Israel, and impact our employees, some of which are military reservists being called to active military duty, and impact the economic, social and political stability of Israel.
The recent escalation of hostilities involving Israel, Iran, the United States, and the military activity and regional conflicts, may result in disruption to our operations and facilities, such as our manufacturing and R&D facilities located in Israel, and impact our employees, some of which are military reservists being called to active military duty, and impact the economic, social and political stability of Israel.
As of December 31, 2024, the 14 years have passed for the three Approved Enterprise programs. The Company believes it will continue to be eligible to enjoy the tax benefits in accordance with the provisions of the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”).
As of December 31, 2025, the 14 years have passed pateit will continue to be eligible to enjoy the tax benefits in accordance with the provisions of the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”).
Further deterioration of Israel’s relationship with the Palestinians or countries in the Middle East could expand the disruption of international trading activities in Israel, may materially and negatively affect our business conditions, could harm our results of operations and adversely affect the Company’s share price.
Further deterioration of Israel’s relationship with the Palestinians or countries in the Middle East could expand the disruption of international trading activities in Israel, may materially and negatively affect our business conditions, could harm our results of operation and adversely affect the Company’s share price. Our business may also be disturbed by the obligation of personnel to perform military service.
Although we maintain high levels of cyber-security aware development processes, we cannot assure that such attacks, or other breaches of security through our products, will fail and therefore may negatively affect our customers’ business.
Cyber-attacks, or other breaches of security on our customers’ networks, may be initiated at any network location or device including initiation through our products. Although we maintain high levels of cyber-security aware development processes, we cannot assure that such attacks, or other breaches of security through our products, will fail and therefore may negatively affect our customers’ business.
This may have a material adverse effect on our business and results of operation. Lastly, we cannot assure that we will successfully forecast technology trends or that we will anticipate innovations made by other companies and respond with our own innovation in a timely manner, which could affect our competitiveness in the market.
We cannot assure that we will successfully forecast technology trends or that we will anticipate innovations made by other companies and respond with our own innovation in a timely manner, which could affect our competitiveness in the market.
While we believe we comply with applicable tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law and impose additional taxes.
While we believe we comply with applicable tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law and impose additional taxes. In 2025 we received two tax assessments from local tax authorities in two territories in which we operate.
To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations and our ability to raise additional funds, if deemed necessary by our management and board of directors, and to attract or retain qualified and skilled “talents” and personnel. 28 Moreover, it is widely believed that the ongoing “Swords of Iron” war has had and is anticipated to continue to have adverse effects on the Israeli economy.
To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations and our ability to raise additional funds, if deemed necessary by our management and board of directors, and to attract or retain qualified and skilled “talents” and personnel.
These satellite networks could sidestep the necessity for widespread terrestrial cellular infrastructure by offering an alternate mode of connectivity directly to consumers. Consequently, mobile operators might assess their infrastructure strategies and opt to scale back investments in terrestrial networks.
The rise of LEO satellite systems as a contender in providing direct-to-consumer broadband connectivity presents an additional risk to our business. These satellite networks could sidestep the necessity for widespread terrestrial cellular infrastructure by offering an alternate mode of connectivity directly to consumers. Consequently, mobile operators might assess their infrastructure strategies and opt to scale back investments in terrestrial networks.
Specifically, due to the complexity of our supply chain, we have experienced and may continue to experience increase in shipment costs, due to macroeconomic and geopolitical issues (such as the recent hostilities effecting maritime shipment in the Red Sea, causing increases in shipment costs and delays in lead-time, as well as increase in related insurance policies’ premiums), regulatory actions, including sanctions and trade restrictions, labor disturbances and approval delays, which impacted our ability to timely meet demand in certain instances.
Specifically, due to the complexity of our supply chain, we have experienced and may continue to experience increase in shipment costs, due to macroeconomic and geopolitical issues, regulatory actions, including sanctions, tariffs, and trade restrictions, labor disturbances and approval delays, which impacted our ability to timely meet demand in certain instances.
In 2024, approximately 47.7% of our total revenues were attributed to three customers, in 2023, approximately 44.8% of our total revenues were attributed to two customers and in 2022, approximately 31.3% of our total revenues were attributed to two customers.
In 2025, approximately 47.9% of our total revenues were attributed to three customers, in 2024, approximately 49.2% of our total revenues were attributed to three customers and in 2023, approximately 44.8% of our total revenues were attributed to two customers.
Hence, if this segment of the market or the service providers enter into a negative cycle, or our market share in the market shrinks, while we have yet to implement our new business strategy, our sales and revenues may decline, and our results of operations and cash flow may be significantly and adversely affected.
If this market segment or service providers enter a negative cycle, or our market share shrinks before our new business strategy is fully implemented, our sales and revenues may decline, and our results of operations and cash flow may be significantly and adversely affected.
It typically takes from three to twelve months after we first begin discussions with a prospective customer, before we receive an order from that customer, if an order is received at all.
Our sales cycles in connection with competitive bids or to prospective customers are lengthy. It typically takes from three to eighteen months after we first begin discussions with a prospective customer, before we receive an order from that customer, if an order is received at all.
Even if we conclude that our internal controls over financial reporting are adequate, any internal control or procedure, no matter how well designed and operated, can only provide reasonable assurance of achieving desired control objectives and cannot prevent all mistakes or intentional misconduct or fraud. 23 We could be adversely affected by our failure to comply with the covenants in our credit agreement or by the failure of any bank to provide us with credit under committed credit facilities.
Even if we conclude that our internal controls over financial reporting are adequate, any internal control or procedure, no matter how well designed and operated, can only provide reasonable assurance of achieving desired control objectives and cannot prevent all mistakes or intentional misconduct or fraud.
We have a committed credit facility available for our use from a syndicate of several banks. Our credit agreement contains financial and other covenants. Any failure to comply with the covenants, including due to poor financial performance, may constitute a default under the credit facility, which may have a material adverse effect on our financial condition.
Any failure to comply with the covenants, including due to poor financial performance, may constitute a default under the credit facility, which may have a material adverse effect on our financial condition.
Our R&D efforts may not yield new products that can be commercialized. • Market Acceptance: There is a risk that new products may not achieve market acceptance, as our target markets may not be receptive to our new products, or competitors may offer superior or more cost-effective products. • Intellectual Property Risks: There is the risk associated with protecting new intellectual property and potential infringement upon the intellectual property rights of others.
Our R&D efforts may not yield new products that can be commercialized, and there is a risk that new products may not achieve market acceptance if our target markets are not receptive to our new products or competitors offer superior or more cost-effective alternatives.
AI/ML models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct. This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor “poisons” the AI/ML with bad inputs or logic), or if the logic of the AI/ML is flawed.
This may occur if the inputs that the model relied on were themselves inaccurate, incomplete, or flawed - including if a bad actor "poisons" the AI/ML with bad inputs or logic - or if the underlying logic of the model is flawed.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn 2024, our $26.2 million in cash provided by operating activities was affected by the following principal factors: • Net income of $24.1 million; • $26.9 million increase in trade and other accounts payable and accrued expenses, net; • $12.1 million of depreciation and amortization expenses; • $7.6 million decrease in inventories; • $4.6 million decrease in operating lease right-of-use assets; • $4.3 million share-based compensation expenses; and • $0.3 million of loss from sale of property and equipment, net 57 These factors were offset mainly by: • $44.9 increase in trade and other accounts receivable and prepaid expenses, net; • $4.2 million decrease in operating lease liability; • $3.6 million decrease in deferred revenues; and • $1.0 million decrease in accrued severance pay and pensions, net In 2023, our $30.9 million in cash provided by operating activities was affected by the following principal factors: • Net income of $6.2 million; • $14.6 million decrease in trade and other accounts receivable and prepaid expenses, net; • $10.0 million of depreciation and amortization expenses; • $6.3 million decrease in inventories; and • $4.0 million share-based compensation expenses; and • $3.8 million decrease in operating lease right-of-use assets.
Biggest changeIn 2024, our $26.2 million in cash provided by operating activities was affected by the following principal factors: • Net income of $24.1 million; • $26.9 million increase in trade and other accounts payable and accrued expenses, net; • $12.1 million of depreciation and amortization expenses; • $7.6 million decrease in inventories; • $4.6 million decrease in operating lease right-of-use assets; • $4.3 million share-based compensation expenses; and • $0.3 million of loss from sale of property and equipment, net.
Our taxes on income consist of current corporate tax expenses in various locations and changes in tax deferred assets and liabilities, as well as reserves for uncertain tax positions. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S (“U.S. GAAP”).
Taxes . Our taxes on income consist of current corporate tax expenses in various locations and changes in tax deferred assets and liabilities, as well as reserves for uncertain tax positions. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S (“U.S. GAAP”).
“KEY INFORMATION” – Risk Factors – “We are subject to complex and evolving regulatory requirements that may be difficult and expensive to comply with and that could adversely impact our business, results of operations and financial condition”, “As part of our business are located throughout Europe, we are exposed to the negative impact of invasion of Ukraine by Russia on the European markets in which we operate and on our operations”, “Our international operations expose us to the risk of fluctuations in currency exchange rates and restrictions related to foreign currency exchange controls” and “Due to the volume of our sales in emerging markets, we are susceptible to a number of political, economic and regulatory risks that could have a material adverse effect on our business, reputation, financial condition and results of operations”.
“KEY INFORMATION” – Risk Factors – “We are subject to complex and evolving regulatory requirements that may be difficult and expensive to comply with and that could adversely impact our business, results of operations and financial condition”, “As part of our business are located throughout Europe, we are exposed to the negative impact of invasion of Ukraine by Russia on the European markets in which we operate and on our operations”, “Our international operations expose us to the risk of fluctuations in currency exchange rates and restrictions related to foreign currency exchange controls” and “Due to the volume of our sales in emerging markets, we are susceptible to a number of political, economic and regulatory risks that could have a material adverse effect on our business, reputation, financial condition and results of operations.
Business Overview - The Israel Innovation Authority.” Our research and development department provides us with the ability to design and develop most of the aspects of our proprietary solutions, from the chip-level, including both ASICs and RFICs, to full system integration.
Business Overview - The Israel Innovation Authority.” Our research and development department provides us with the ability to design and develop most of the aspects of our proprietary solutions, from chip-level, including both ASICs and RFICs, to full system integration.
Actual results and the timing of certain events may differ significantly from those projected in such forward-looking statements due to a number of factors, including those set forth in “Risk Factors” and elsewhere in this annual report. Our consolidated financial statements are prepared in conformity with U.S. GAAP.
Actual results and the timing of certain events may differ significantly from those projected in such forward-looking statements due to a number of factors, including those set forth in “Risk Factors” and elsewhere in this annual report. Our consolidated financial statements are prepared in conformity with U.S.
We believe that continued investment in research and development is essential to attaining our strategic objectives. Sales and Marketing Expenses. Our sales and marketing expenses consist primarily of compensation and related costs for sales and marketing personnel, trade show and exhibit expenses, travel expenses, commissions and promotional materials. General and Administrative Expenses.
We believe that continued investment in research and development is essential to attaining our strategic objectives. 55 Sales and Marketing Expenses. Our sales and marketing expenses consist primarily of compensation and related costs for sales and marketing personnel, trade show and exhibit expenses, travel expenses, commissions and promotional materials. General and Administrative Expenses.
Network virtualization requirements are addressed with layer 3 capabilities and SDN support. 49 • OPEN RAN transforms Radio Access Network (RAN) technology from design to operation of the network. OPEN RAN creates the possibility of an open RAN environment, with interoperability between different vendors over defined interfaces.
Network virtualization requirements are addressed with layer 3 capabilities and SDN support. • OPEN RAN transforms Radio Access Network (RAN) technology from design to operation of the network. OPEN RAN creates the possibility of an open RAN environment, with interoperability between different vendors over defined interfaces.
In a legacy mobile network ecosystem, RAN is proprietary where a single vendor provides proprietary radio hardware, software, and interface to enable the mobile network to function. • RAN ecosystem is evolving towards proving the competitive landscape of RAN supplier ecosystem and network operators embracing the transformation.
In a legacy mobile network ecosystem, RAN is proprietary where a single vendor provides proprietary radio hardware, software, and interface to enable the mobile network to function. 53 • RAN ecosystem is evolving towards proving the competitive landscape of RAN supplier ecosystem and network operators embracing the transformation.
In addition, we pay salaries and related costs to our employees and fees to subcontractors relating to installation, maintenance, and other professional services. 51 Significant Expenses Research and Development Expenses, net.
In addition, we pay salaries and related costs to our employees and fees to subcontractors relating to installation, maintenance, and other professional services. Significant Expenses Research and Development Expenses, net.
This trend is expected to increase the size of Best-of-Breed segment (on the account of the end-to-end market segment) that Ceragon is focusing on. • Software Defined Networking (SDN) is an emerging concept aimed at simplifying network operations and allowing network engineers and administrators to quickly respond to a fast-changing business environment.
This trend is expected to increase the size of Best-of-Breed segment (on the account of the end-to-end market segment) that Ceragon is focusing on. • Software Defined Networking (SDN) is a concept aimed at simplifying network operations and allowing network engineers and administrators to quickly respond to a fast-changing business environment.
Other operating expenses. Other operating expenses totaled $1.2 million in 2024, as compared to $0.0 million in 2023, related to the provision for the settlement of a class action claim (see Note 1C of our audited consolidated financial statements). Financial and other expenses, Net.
Other operating expenses totaled $0.0 million in 2025, as compared to $1.2 million in 2024, related to the provision for the settlement of a class action claim (see Note 1C of our audited consolidated financial statements). Financial and other expenses, Net.
As of December 31, 2024, our research, development and engineering staff consisted of 260 employees globally. Our research and development team includes highly specialized engineers and technicians with expertise in the fields of millimeter-wave design, modem and signal processing, data communications, system management and networking solutions. The IIA sometimes participate in our R&D funding for our Israel-based company.
As of December 31, 2025, our research, development and engineering staff consisted of 257 employees globally. Our research and development team includes highly specialized engineers and technicians with expertise in the fields of millimeter-wave design, modem and signal processing, data communications, system management and networking solutions. The IIA sometimes participate in our R&D funding for our Israel-based company.
We place considerable emphasis on research and development to improve and expand the capabilities of our existing products, to develop new products (with particular emphasis on equipment for emerging IP-based networks) and to lower the cost of producing both existing and future products.
Research and Development, Patents and Licenses, Etc. We place considerable emphasis on research and development to improve and expand the capabilities of our existing products, to develop new products (with particular emphasis on equipment for emerging IP-based networks) and to lower the cost of producing both existing and future products.
“Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 21, 2024. A. Operating Results Overview We are the number one wireless transport specialist in terms of unit shipments and global distribution of our business.
“Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 25, 2025. A. Operating Results Overview We are the number one wireless transport specialist in terms of unit shipments and global distribution of our business.
B. Liquidity and Capital Resources Since our initial public offering in August 2000, we have financed our operations primarily through the proceeds of that initial public offering, follow-on offerings, cash provided by operating activities, and various loans and facilities from banks, including factoring and grants from the IIA.
Liquidity and Capital Resources Since our initial public offering in August 2000, we have financed our operations primarily through the proceeds of that initial public offering, proceeds from exercise of stock options, follow-on offerings, cash provided by operating activities, and various loans and facilities from banks, including factoring and grants from the IIA.
Integration-related expenses represent incremental costs related to combining the Company and its business acquisitions, such as third-party consulting and other third-party services related to merging the previously separate companies' systems and processes. Financial and other expenses, net.
Integration-related expenses represent incremental costs related to combining the Company and its business acquisitions, primarily third-party consulting and other third-party services related to merging the previously separate companies' systems and processes. Financial and other expenses, net.
In addition, we intend to continue to comply with industry standards and, in order to participate in the formulation of European standards, we are full members of the European Telecommunications Standards Institute. Our research and development activities are conducted mainly at our facilities in Rosh Ha’Ayin, Israel, and also at our subsidiaries in Greece and Romania.
In addition, we intend to continue to comply with industry standards and, in order to participate in the formulation of European standards, we are full members of the European Telecommunications Standards Institute. Our research and development activities are conducted mainly at our facilities in Rosh Ha’Ayin, Israel, and also at our sites in Greece, Romania and India (Bangalore).
Our financial and other expenses, net, consist primarily of gains and losses arising from the re-measurement of transactions and balances denominated in non-dollar currencies into dollars, gains and losses from our currency hedging activity, interest paid on bank loans and factoring activities, other fees and commissions paid to banks, actuarial losses and other expenses. Taxes .
Our financial and other expenses, net, consist primarily of gains and losses arising from the re-measurement of transactions and balances denominated in non-dollar currencies into dollars, gains and losses from our currency hedging activity, interest paid on bank loans and factoring activities, holdback amount fair value adjustments other fees and commissions paid to banks, actuarial losses and other expenses.
National lock-ins for large parts of the population and labor market trends brought many businesses to exercise company-wide work-from-home activities with massive use of video conferencing and cloud network communication. Entire families stay longer at home and extensively consume video streaming and online gaming, along with video chats with friends and relatives.
National lock-ins for large parts of the population and labor market trends brought many businesses to exercise company-wide work-from-home activities with massive use of video conferencing and cloud network communication. Entire families stay longer at home and extensively consume video streaming and online gaming, along with video chats with friends and relatives. The result is an increase in broadband demand.
Effect of Recent Accounting Pronouncements See Note 2, Significant Accounting Policies, in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report, for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial condition and results of operations, which is incorporated herein by reference.
Critical Accounting Estimates See Item 5 “Critical Accounting Policies and Estimates” above. 62 Effect of Recent Accounting Pronouncements See Note 2, Significant Accounting Policies, in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Report, for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial condition and results of operations, which is incorporated herein by reference.
For a discussion of our results of operations for the year ended December 31, 2023, including a year-to-year comparison between 2022 and 2023, and a discussion of our liquidity and capital resources for the year ended December 31, 2022, refer to Item 5.
GAAP. 52 For a discussion of our results of operations for the year ended December 31, 2024, including a year-to-year comparison between 2023 and 2024, and a discussion of our liquidity and capital resources for the year ended December 31, 2023, refer to Item 5.
In 2023, the U.S. dollar appreciated in relation to the NIS at a rate of 3.1%, from NIS 3.519 per $1 on December 31, 2022, to NIS 3.627 per $1 on December 31, 2023. The annual rate of inflation in Israel was 3.2% in 2024 and 3.0% in 2023.
In 2024, the U.S. dollar appreciated in relation to the NIS at a rate of 0.6%, from NIS 3.627 per $1 on December 31, 2023, to NIS 3.647 per $1 on December 31, 2024. The annual rate of inflation in Israel was 2.6% in 2025 and 3.2% in 2024.
As a percentage of revenues, net income was 6.1% in 2024 compared to a net income of 1.8% in 2023. 55 Impact of Currency Fluctuations The majority of our revenues are denominated in U.S. dollars, and to a lesser extent, in INR (Indian Rupee), Euro, and in other currencies.
As a percentage of revenues, net loss was (0.6%) in 2025 compared to a net income of 6.1% in 2024. Impact of Currency Fluctuations The majority of our revenues are denominated in U.S. dollars, and to a lesser extent, in INR (Indian Rupee), Euro, and in other currencies.
Year Ended December 31 2024 2023 Revenues 100 % 100 % Cost of revenues 65.3 65.5 Gross profit 34.7 34.5 Operating expenses: Research and development, net 8.9 9.3 Sales and marketing 11.3 11.7 General and administrative 3.6 6.9 Restructuring and related charges 0.4 0.3 Acquisition and integration-related charges 0.4 0.3 Other operating expenses 0.3 - Total operating expenses 24.9 28.5 Operating income 9.8 6.1 Financial and other expenses, net 2.9 2.4 Taxes on income 0.8 1.9 Net Income 6.1 % 1.8 % Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues.
Year Ended December 31 2025 2024 Revenues 100 % 100 % Cost of revenues 66.2 65.3 Gross profit 33.8 34.7 Operating expenses: Research and development, net 9.0 8.9 Sales and marketing 14.4 11.3 General and administrative 7.2 3.6 Restructuring and related charges 1.1 0.4 Acquisition and integration-related charges - 0.4 Other operating expenses - 0.3 Total operating expenses 31.7 24.9 Operating income 2.1 9.8 Financial expenses and others, net 1.9 2.9 Taxes on income 0.8 0.8 Net Income (Loss) (0.6 )% 6.1 % 57 Year ended December 31, 2025 compared to year ended December 31, 2024 Revenues.
Restructuring expenses consist primarily of costs associated with reduction in workforce, establishment of new research and development centers in additional countries, consolidation of excess facilities, termination of contracts and the restructuring of certain business functions. Restructuring and related expenses are reported separately in the consolidated statements of operations. Acquisition and integration-related charges.
Restructuring expenses consist primarily of costs associated with reduction in workforce, consolidation of excess facilities, termination of contracts and the restructuring of certain business functions. Restructuring and related expenses are reported separately in the consolidated statements of operations. Acquisition and integration-related charges.
These factors were offset mainly by: • $9.6 million decrease in deferred revenues; • $4.0 million decrease in operating lease liability; • $0.2 million decrease in trade and other accounts payable and accrued expenses, net; and • $0.2 million decrease in accrued severance pay and pensions, net Net cash used in investing activities was approximately $16.5 million for the year ended December 31, 2024, as compared to net cash used in investing activities of approximately $20.9 million for the year ended December 31, 2023.
These factors were offset mainly by: • $44.9 increase in trade and other accounts receivable and prepaid expenses, net; • $4.2 million decrease in operating lease liability; • $3.6 million decrease in deferred revenues; and $1.0 million decrease in accrued severance pay and pensions, net Net cash used in investing activities was approximately $24 million for the year ending December 31, 2025, as compared to net cash used in investing activities of approximately $16.5 million for the year ended December 31, 2024.
As a percentage of revenues, financial and other expenses, net, were 2.9% in 2024 compared to 2.4% in 2023. Taxes on income . Tax expenses were $3.2 million in 2024, compared to $6.5 million in 2023, resulting in a decrease of $3.3 million.
As a percentage of revenues, financial and other expenses, net, were 1.9% in 2025 compared to 2.9% in 2024. Taxes on income . Tax expenses were $2.8 million in 2025, compared to $3.2 million in 2024, resulting in a decrease of $0.4 million.
Business Combination . We apply the provisions of ASC 805, “Business Combination,” and we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.
We apply the provisions of ASC 805, “Business Combination,” and we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
In 2024, the U.S. dollar appreciated in relation to the NIS at a rate of 0.6%, from NIS 3.627 per $1 on December 31, 2023, to NIS 3.647 per $1 on December 31, 2024.
In 2025, the U.S. dollar appreciated in relation to the NIS at a rate of -12.5%, from NIS 3.647 per $1 on December 31, 2024, to NIS 3.19 per $1 on December 31, 2025.
In December 2023, in connection with the acquisition of Siklu, the Company signed an amendment to the Credit Facility in which it obtained the approval of the syndication of banks to carry out Siklu's acquisition and added additional bank, Bank Mizrahi Tefahot Ltd., to the syndication agreement. 56 In June 2024, the Company signed an amendment to the Credit Facility pursuant to which the term of the Credit Facility was extended by an additional 2 years to June 30, 2026.
In December 2023, in connection with the acquisition of Siklu, the Company signed an amendment to the Credit Facility in which it obtained the approval of the syndication of banks to carry out Siklu's acquisition and added additional bank, Bank Mizrahi Tefahot Ltd., to the syndication agreement.
Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. 53 Impact of recently adopted accounting standards The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on the consolidated financial statements as a result of their future adoption.
Impact of recently adopted accounting standards The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on the consolidated financial statements as a result of their future adoption (see Note 2 of our audited consolidated financial statements).
The result is an increase in home broadband demand, while today’s home broadband networks are not designed for such usage patterns. Some countries, even developed ones, lack broadband communication networks in rural areas. As a result, service providers are required to increase network investment to match the network capabilities to the surge in broadband demand.
Some countries, even developed ones, lack broadband communication networks in rural areas. As a result, service providers are required to increase network investment to match the network capabilities to the surge in broadband demand.
In addition, as most of our deliveries occur before we are able to collect the consideration for such projects, it poses further financial and customer credit risk, as well as collection and liquidity risks of such customers. In 2022, revenues slightly increased.
In addition, as most of our deliveries occur before we are able to collect the consideration for such projects, it poses further financial and customer credit risk, as well as collection and liquidity risks of such customers. Results of Operations Revenues. We generate revenues primarily from the sale of our products, and, to a lesser extent, services.
The increase was primarily due to an increase of $33.2 million related to material costs, mainly resulted from the higher volume of revenues, an increase of $2.9 million related to shipping and storage costs, and an increase of $0.5 million in salaries and employee-related expenses, offset by a decrease of $3.8 million related to inventory write-off, a decrease of $2.4 million in service costs, and a decrease of $0.4 million in other production costs.
The decrease was primarily due to a decrease of $35.5 million related to material costs, mainly resulted from the lower volume of revenues, a decrease of $1.1 million related to salaries and employee-related expenses, a decrease of $0.8 million in shipping and storage costs (net of increase in cost), offset by an increase of $3.2 million in service costs, an increase of $1.0 of million in Amortization of intangibles and increase of $0.1 in other Expenses.
Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates.
When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates.
If future demand or market conditions are less favorable than our projections, additional inventory write-offs may be required and would be reflected in cost of revenues in the period the revision is made. Provision for credit loss. We are exposed to credit losses primarily through sales to customers.
If future demand or market conditions are less favorable than our projections, additional inventory write-offs may be required and would be reflected in cost of revenues in the period the revision is made. Business Combination .
During 2024, the credit lines carried interest rates in the range of 6.12% and 7.95%. As of December 31, 2024, the total credit facilities for bank guarantees and for loans is $117.8 million. The Credit Facility is secured by a floating charge over all Company assets as well as several customary fixed charges on specific assets.
As of December 31, 2025, the total credit facilities for bank guarantees and for loans is $117.9 million. The Credit Facility is secured by a floating charge over all Company assets as well as several customary fixed charges on specific assets.
As a percentage of revenues, general and administrative expenses were 3.6% in 2024 compared to 6.9% in 2023. Restructuring and related charges. Restructuring and related charges totaled $1.4 million in 2024, as compared to $0.9 million in 2023. The increase was primarily attributed to contractual and termination severance pay and other related costs for the impacted employees.
Restructuring and related charges totaled $3.7 million in 2025, as compared to $1.4 million in 2024. The increase was primarily attributed to contractual and termination severance pay and other related costs for the impacted employees.
The effects of foreign currency re-measurements are reported in our consolidated statements of operations. For a discussion of our hedging transactions, please see Item 11.”QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK”.
We partially reduce currency exposure to NIS by entering into hedging transactions and may do so for other currencies in the future. The effects of foreign currency re-measurements are reported in our consolidated statements of operations. For a discussion of our hedging transactions, please see Item 11.”QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK”.
Transactions and balances in currencies other than U.S. dollars are re-measured into U.S. dollars according to the principles in ASC Topic 830, “Foreign Currency Matters.” Gains and losses arising from re-measurement are recorded as financial income or expense, as applicable.
Transactions and balances in currencies other than U.S. dollars are re-measured into U.S. dollars according to the principles in ASC Topic 830, “Foreign Currency Matters.” Gains and losses arising from re-measurement are recorded as financial income or expense, as applicable. 59 Effects of Government Regulations and Location on the Company’s Business For a discussion of the effects of governmental regulation and our location in Israel on our business, see Item 3.
These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. 52 Our management believes the accounting policies that affect its more significant judgments and estimates used in the preparation of its consolidated financial statements and which are the most critical to aid in fully understanding and evaluating our reported financial results include the following: • Revenue recognition; • Inventory valuation; • Provision for credit loss (doubtful debts); and • Business combination.
Our management believes the accounting policies that affect its more significant judgments and estimates used in the preparation of its consolidated financial statements and which are the most critical to aid in fully understanding and evaluating our reported financial results include the following: • Revenue recognition; • Inventory valuation; and • Business combination.
We believe that the current working capital, cash and cash equivalent balances together with the Credit Facility available with the five financial institutions, will be sufficient for our expected requirements through at least the next 12 months. C. Research and Development, Patents and Licenses, Etc.
We plan on continuing to raise capital as we may require, subject to changes in our business activities. We believe that the current working capital, cash and cash equivalent balances together with the Credit Facility available with the five financial institutions, will be sufficient for our expected requirements through at least the next 12 months. C.
The increase was mainly attributed to an increase of $2.9 million in exchange rate differences, and an increase of $1.6 million related to mark-to-market revaluation of acquisition-related holdback liability, offset by a decrease of $1.2 million in interest on loans and a decrease of $0.3 million in other financial expenses.
The decrease was mainly attributed to a favorable change of $3.5 million related to mark-to-market revaluation of acquisition-related holdback liability, which resulted in income in 2025 compared to expenses in 2024, a decrease of $1.2 million in interest on loans and factoring fees, a decrease of $0.1 million in exchange rate differences, and a decrease of $0.1 million in other financial expenses.
This amendment also included a decrease of $5 million to the bank guarantees credit lines to $40.8 million and an increase of $9.8 million to $77 million to the Credit Facility for Loans. As of December 31, 2024, the Company has utilized $25.2 million of the $77 million available under the Credit Facility for short-term loans.
This amendment also included a decrease of $5 million to the bank guarantees credit lines to $40.9 million. As of December 31, 2025, the Company has utilized $19.0 million of the $77 million available under the Credit Facility for short-term loans. During 2025, the credit lines carried interest rates in the range of 4.94% and 6.44%.
Our research and development efforts are a key element of our strategy and are essential to our success. We intend to maintain or slightly increase our commitment to research and development, and an increase or a decrease in our total revenue would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures.
We intend to maintain or slightly increase our commitment to research and development, and an increase or a decrease in our total revenue would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures. As a percentage of revenues, research and development expenses represent 9.0% and 8.9% in 2025 and 2024.
Our target market is characterized by vigorous, worldwide competition for market share and rapid technological development. These factors have resulted in aggressive pricing practices and downward pricing pressures and growing competition. • Regional pricing pressures. A significant portion of our sales derives from India, in response to the rapid build-out of cellular networks in that country.
Our target market is characterized by vigorous, worldwide competition of large and aggressive competitors for market share and rapid technological development. These factors have resulted in aggressive pricing practices and downward pricing pressures and growing competition. • Regional pricing pressures.
The revenues from customer support and extended warranty are recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. Revenues from network roll-out and professional services are recognized when the Company's performance obligation is satisfied, usually upon customer acceptance.
Revenues from network roll-out and professional services are recognized when the Company's performance obligation is satisfied, usually upon customer acceptance.
For example, in recent years we have suffered a significant adverse impact on our financial results due to fluctuation in the exchange rates of the U.S. dollar compared to the NGN (Nigerian Naira) and the ARS (Argentine Peso). We partially reduce currency exposure to NIS by entering into hedging transactions and may do so for other currencies in the future.
For example, in recent years we have suffered a significant adverse impact on our financial results due to fluctuation in the exchange rates of the U.S. dollar compared to the INR (Indian Rupee), New Israeli Shekel (NIS), NOK (Norwegian Kroner), NGN (Nigerian Naira) and the ARS (Argentine Peso).
Our research and development projects currently in process include extensions to our leading IP-based networking product lines and development of new technologies to support future product concepts.
Our research and development projects currently in process include extensions to our leading IP-based networking product lines and development of new technologies to support future product concepts. In addition, our engineers continually work to redesign our products with the goal of improving their manufacturability and testability while reducing costs.
Additionally, due to the nature of our global presence and operations, we are subject to the law and jurisdiction in the countries where our branches or subsidiaries are located or in which we conduct our operations. For a discussion of the effects of governmental regulation and our global spread and operation of our business, see Item 3.
“KEY INFORMATION” – Risk Factors – “Risks Relating to Operations in Israel”. Additionally, due to the nature of our global presence and operations, we are subject to the law and jurisdiction in the countries where our branches or subsidiaries are located or in which we conduct our operations.
Trend Information For a description of the trend information relevant to us see discussions in Parts A and B of Item 5. “OPERATING AND FINANCIAL REVIEW AND PROSPECTS”. E. Critical Accounting Estimates See Item 5 “Critical Accounting Policies and Estimates” above.
Intellectual Property For a description of our intellectual property see Item 4. “INFORMATION ON THE COMPANY – B. Business Overview - Intellectual Property”. D. Trend Information For a description of the trend information relevant to us see discussions in Parts A and B of Item 5. “OPERATING AND FINANCIAL REVIEW AND PROSPECTS”. E.
This demand is driven by the need of service providers to connect more communities in order to bridge the digital divide, using 4G and even 5G services. • Subscriber growth continues mainly in emerging markets such as India, Africa and Latin America, but is getting close to saturation. 50 We are also experiencing pressure on our sale prices as a result of several factors: • Increased competition.
This demand is driven by the need of service providers to connect more communities in order to bridge the digital divide, using 4G and even 5G services. • Subscriber growth continues mainly in emerging markets such as India, Africa and Latin America, but is getting close to saturation. 54 • The adoption of AI across the telecommunications industry is accelerating and is expected to be a key driver of future network evolution, particularly in the context of 5G and emerging 6G architectures.
As a percentage of revenues, research and development expenses represent 8.9% and 9.3% in 2024 and 2023. Sales and Marketing Expenses . Sales and marketing expenses totaled $44.7 million in 2024, as compared to $40.6 million in 2023, an increase of $4.1 million, or 10.2%.
Sales and Marketing Expenses . Sales and marketing expenses totaled $48.7 million in 2025, as compared to $44.7 million in 2024, an increase of $4.0 million, or 8.9%.
In the year ended December 31, 2023, our investing activities were comprised of $8.0 million of cash paid as cash consideration for the acquisition of Siklu, $10.0 million paid for purchases of property and equipment and $2.9 million of software development costs capitalized. 58 Net cash used in financing activities was approximately $1.5 million for the year ended December 31, 2024, as compared to approximately $4.9 million net cash used in financing activities for the year ended December 31, 2023.
In the year ended December 31, 2025, our investing activities were comprised of $13.6 million paid for purchases of property and equipment, $6.6 million paid as cash consideration for the acquisition of E2E, and $3.8 million of software development costs capitalized.
As part of our business, we are engaged in supplying installation and other services for our customers, often in emerging markets.
As we continue to focus on operational improvements, these price pressures may have a negative impact on our gross margins. As part of our business, we are engaged in supplying installation and other services for our customers, often in emerging markets.
Our capital requirements are dependent on many factors, including working capital requirements to finance the business activity of the Company, and the allocation of resources to research and development, marketing and sales activities. We plan on continuing to raise capital as we may require, subject to changes in our business activities.
As of December 31, 2025, the Company had outstanding inventory purchase orders with its suppliers in the amount of $18.2 million. Our capital requirements are dependent on many factors, including working capital requirements to finance the business activity of the Company, and the allocation of resources to research and development, marketing and sales activities.
Our lease obligations consist of the commitments under the lease agreements for offices and warehouses for our facilities worldwide, as well as car leases. Our facilities are leased under several lease agreements with various expiration dates. Our leasing expenses were $4.6 million in 2024, $4.0 million in 2023, and $4.5 million in 2022.
As of December 31, 2025, the total remaining contractual obligations are approximately $17.7 million, of which $4.9 million is for the next 12 months. Our lease obligations consist of the commitments under the lease agreements for offices and warehouses for our facilities worldwide, as well as car leases. Our facilities are leased under several lease agreements with various expiration dates.
As of December 31, 2024 and 2023, the Company met all of its covenants. As of December 31, 2024, we had approximately $35.3 million in cash and cash equivalents.
As of December 31, 2025 and 2024, the Company met all of its covenants.
Financial and other expenses, net totaled $11.5 million in 2024 as compared to $8.5 million in 2023, an increase of $3.0 million, or 35.5%.
Financial expenses and others, net totaled $6.5 million in 2025 as compared to $11.5 million in 2024, a decrease of $4.9 million, or 43.0%.
The Credit Facility has been renewed and amended several times during the past years according to the Company’s needs and financial position.
The Credit Facility has been renewed and amended several times during the past years according to the Company’s needs and financial position. In June 2023, the Company signed an amendment to the Credit Facility pursuant to which the term of the Credit Facility was extended by additional year to June 30, 2024.
Our net research and development expenses totaled $35.0 million in 2024 as compared to $32.3 million in 2023, resulting in an increase of $2.7 million, or 8.3%.
Our net research and development expenses totaled $30.4 million in 2025 as compared to $35.0 million in 2024, resulting in a decrease of $4.5 million, or 12.9%. The decrease was primarily due to a decrease of $4.7 million in salaries and related expenses, and was offset by an increase of $0.2 others research and development expenses.
The Company allocates the transaction price to each distinct performance obligation, based on their relative standalone selling price. Revenue from tangible products is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied).
The Company allocates the transaction price to each distinct performance obligation, based on their relative standalone selling price.
Our purchase obligations consist primarily of commitments for our operating activities and working capital needs. Our operating expenses were $98.1 million in 2024, $98.7 million in 2023 and $104.0 million in 2022. As of December 31, 2024, the Company had outstanding inventory purchase orders with its suppliers in the amount of $45.2 million.
Our leasing expenses were $4.5 million in 2025, $4.6 million in 2024, and $4.0 million in 2023. Our purchase obligations consist primarily of commitments for our operating activities and working capital needs. Our operating expenses were $107.3 million in 2025, $98.1 million in 2024 and $98.7 million in 2023.
For the years ended December 31, 2024 and 2023, 42.5% and 30.9%, respectively, of our revenues were earned in India. Sales of our products in these markets are generally at lower gross margins in comparison to other regions. As we continue to focus on operational improvements, these price pressures may have a negative impact on our gross margins.
A significant portion of our sales derives from India, in response to the rapid build-out of cellular networks in that country. For the years ended December 31, 2025 and 2024, 34.4% and 42.5%, respectively, of our revenues were earned in India. Sales of our products in these markets are usually at lower gross margins in comparison to other regions.
Our capital expenditure primarily consists of purchases of manufacturing and test equipment, computers and peripheral equipment, office furniture and equipment. Our capital expenditures were $14.6 million in 2024, $10.0 million in 2023 and $10.5 million in 2022. We will continue to make capital expenditures to meet the expected growth of our business.
Our capital expenditures were $13.6 million in 2025, $14.6 million in 2024 and $10.0 million in 2023. We will continue to make capital expenditures to meet the expected growth of our business. 61 During the normal course of business, we enter into certain lease contracts with lease terms through 2034.
The increase was primarily attributed to an increase of $2.5 million in salaries and related expenses, an increase of $0.9 million in trade shows, an increase of $0.6 million in acquired-intangible amortization, an increase of $0.3 million in travel costs, and an increase of $0.3 million in other sales and marketing expenses (all of which were impacted from additional costs associated with the acquisition of Siklu at the end of 2023), offset by a decrease of $0.4 million related to sales commission.
The increase was primarily attributed to an increase of $2.5 million in salaries and related expenses, an increase of $0.6 million in travel costs, an increase of $0.3 million in software and hardware maintenance, an increase of $0.3 million in depreciation expenses, and an increase of $0.3 million in other sales and marketing expenses.
In the year ended December 31, 2023, our net cash used in financing activities was primarily due to repayments of bank credits and loans of $4.9 million. Our material cash requirements as of December 31, 2024, and any subsequent interim period, primarily include our capital expenditures, lease obligations and purchase obligations.
In the year ended December 31, 2025, our net cash used in financing activities was primarily due to repayments of bank credits and loans of $6.2 million offset by proceeds from exercise of stock options of $0.7 million.
Gross Profit. Gross profit increased to $136.9 million or 34.7% as a percentage of revenues in 2024 from $119.9 million or 34.5% in 2023.
Our cost of revenue includes the impact of the acquisition of E2E by way of merger at the beginning of 2025. Gross Profit. Gross profit decreased to $114.6 million or 33.8% as a percentage of revenues in 2025 from $136.9 million or 34.7% in 2024.
Effects of Government Regulations and Location on the Company’s Business For a discussion of the effects of governmental regulation and our location in Israel on our business, see Item 3. “KEY INFORMATION” – Risk Factors – “Risks Relating to Operations in Israel”.
For a discussion of the effects of governmental regulation and our global spread and operation of our business, see Item 3.
General and Administrative Expenses . General and administrative expenses totaled $14.2 million in 2024 as compared to $23.8 million in 2023, a decrease of $9.6 million, or 40.2%.
Cost of Revenues. Cost of revenue totaled $224.2 million in 2025 as compared to $257.3 million in 2024, a decrease of $33.2 million, or 12.9%.
Revenues totaled $394.2 million in 2024 as compared to $347.2 million in 2023, an increase of $47.0 million, or 13.5%. Revenues in India increased to $167.6 million in 2024, from $107.4 million in 2023. Revenues in EMEA increased to $65.0 million in 2024, from $62.0 million in 2023.
Revenues totaled $338.7 million in 2025 as compared to $394.2 million in 2024, a decrease of $55.5 million, or 14.1%. Revenues in North America increased to $112.8 million in 2025, from $89.9 million in 2024. Revenues in India decreased to $116.7 million in 2025, from $167.6 million in 2024.
The decrease was primarily due to a $10.6 million improvement in credit loss expenses, substantially impacted by recovery of $9.1 million from a single customer in Latin America, offset by an increase of $0.5 million in share-based compensation costs, an increase of $0.3 million in salaries and related expenses, and an increase of $0.2 million in other general and administrative expenses.
The increase was primarily attributed to a change of $9.3 million in credit loss expenses. The change in credit loss expenses was mainly attributed to the fact that 2024 included a recovery of $9.1 million from a single customer in Latin America, which significantly reduced credit loss expenses in that period.
The decrease was mainly attributable to a decrease of $2.4 million in deferred taxes, a decrease of $0.5 million in current taxes, and a decrease of $0.4 million in uncertain tax positions. Net Income . In 2024, the Company had $24.1 million in net income as compared to net income of $6.2 million in 2023.
Taxes on income are dependent upon where our profits are generated, such as the location and taxation of our subsidiaries. The decrease primarily reflects reduced profitability. Net Income . In 2025, the Company had a net loss of $2.1 million compared to a net income of $24.1 million in 2024.
This improvement in gross profits 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, alongside lower inventory write-offs. 54 Research and Development Expenses, Net .
This decrease in gross profit is mainly attributable to the decline in revenues compared to the prior year, partially offset by better regional mixture with increase in revenues from North America and reduction in revenues from India, tight control over general operational costs, and improved supply chain costs. Research and Development Expenses, Net .
Acquisition and integration-related charges . Acquisition and integration-related charges totaled $1.7 million in 2024, as compared to $1.1 million in 2023.
These expenses are not incurred on a consistent basis and may vary from period to period depending on the scope and nature of restructuring programs implemented. Acquisition and integration-related charges . Acquisition and integration-related charges totaled $0.1 million in 2025, as compared to $1.7 million in 2024.
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The increase was mainly in North America, as part of our increased focus on this region and to a lesser extent in Asia-Pacific offset by decreases in all other regions, mainly in India. 2022 growth was adversely affected by supply chain challenges and component shortages which affected our ability to fulfill strong bookings.
Added
Industry participants are increasingly incorporating AI capabilities into network infrastructure to enable enhanced automation, real-time optimization, predictive maintenance, and improved energy efficiency. These developments are contributing to the transition toward more autonomous, software-driven, and programmable networks, including the emergence of AI-native and AI-assisted radio access network (“RAN”) architectures.
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In 2023, revenues increased mainly in North America and India, as part of our continued focus on these regions. This growth is primarily attributed to the increased demand both for our IP-20 and software solutions by our customers in these regions.
Added
As operators seek to manage growing data traffic, complexity, and performance requirements, demand is increasing for solutions that integrate AI across network planning, deployment, and operations.

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