I must advise you that this call is being recorded. I'd now like to hand over the call to our first speaker today, Rob Fink, Head of Investor Relations. Rob, please go ahead.
Thank you, operator, and good morning, everyone. Hosting today's call is Doron Arazi, Ceragon's Chief Executive Officer, and Ronen Stein, Chief Financial Officer. Before we start, please note that today's discussion includes forward-looking statements within the meaning of the Securities Act of 1933, as amended, Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, projected financial performance, future initiatives, business outlook, development efforts, anticipated results, timelines, and other matters. Forward-looking statements are based on current expectations and subject to assumptions, and involve risks and uncertainties that could cause actual results to differ materially.
These risks and uncertainties include, among other things, global and regional economic conditions, conditions in Israel and the region, fluctuations in exchange rate, customer concentration, ordering patterns, and supply chain challenges, as further detailed in Ceragon's most recent annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. Forward-looking statements are accurate only as of the date they are made, and Ceragon undertakes no obligation to update them. Ceragon's public filings are available on the Securities and Exchange Commission's website at sec.gov and on Ceragon's website at ceragon.com. Also, today's call will include certain non-GAAP measures. For a reconciliation between GAAP and non-GAAP results, please see the table attached to the press release issued earlier today, which is posted in the Investor Relations section of Ceragon's website. With that, I will now turn the call over to Doron. Doron, the call is yours.
Thank you, Rob. Morning, everyone. As expected, the results we are reporting today align with the preliminary results we shared in January. Revenue in Q4, 2025 was $82.3 million, consistent with the range we previously provided, and non-GAAP EPS for Q4 was $0.02. For the full year, revenue was $338.7 million, and non-GAAP EPS was $0.09. We ended the year with $38.4 million in cash and equivalents and a net cash position of $19.4 million, up from a net cash position of $10.1 million at the end of 2024. Our balance sheet improvement reflects disciplined execution and stronger cash generation over the course of the year.
Given that we provided a detailed update in January, today, I'll focus on confirming execution and discuss what we are seeing early in 2026. Our view on 2026 is unchanged from a month ago. Early activity in the year supports our confidence that we remain on track with the outlook we shared in January. Execution in North America continues to be solid, supported by CSP activity, and we see numerous emerging private network opportunities. In India, activity continues to track at the run rate we discussed, with early bookings in the year reinforcing our confidence in the base level of demand. We are not seeing anything today that changes our business view of the year or introduces new dynamics relative to what we previously discussed. In 2026, we plan to launch four new products, with some expected to generate initial revenue this year.
These launches are driven by clear, recently observed demand in our addressable markets and aligned with tangible revenue opportunities. Our R&D and go-to-market investments remain focused on execution, differentiation, and conversion. We continue to prioritize opportunities where we see clear potential customer demand and a path to revenue. Mobile World Congress in March is an important industry event for Ceragon and for the broader ecosystem. We will be showcasing several products we plan to introduce in 2026, and the level of inbound interest and meeting activity heading into the show has been strong. Historically, MWC has been a meaningful demand generation event for us, helping convert customer engagement into trials and, over time, revenue. We expect it to be a constructive commercial catalyst again this year.
Based on our current visibility, we are reiterating our full year 2026 revenue guidance of $355 million-$385 million. This guidance is based on us advancing our backlog in North America, assumes a baseline of $100 million in annualized revenue from India and additional demand from our two existing customers, potential timely RFP wins, and reasonable recoveries in other regions.... I would like to give one brief example of how execution is showing up in the private network space. We recently booked a multi-million-dollar private network order in APAC with an electricity transmission utility, following a competitive win announced last year. The award reflects our ability to deliver a full turnkey solution and provides both near-term revenue in 2026 and long-term expansion potential as additional sites are deployed.
This represents how private network opportunities are moving from pipeline to backlog and into revenue. In summary, we are focused on execution, not reinvention. We delivered results in line with what we communicated in January. Our outlook for 2026 remains intact, and early activity in the year supports our confidence in continued progress on revenue cadence, margins, and cash generation. With that, I'll now turn the call over to our CFO, Ronen Stein, to review the financial results in greater detail.
Thank you, Doron, and good morning, everyone. Q4 2025 was another profitable quarter on a non-GAAP basis, with positive free cash flow in excess of $7 million. To help you understand the results, I will be referring primarily to non-GAAP financials. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer investors to today's press release. Let me now review the fourth quarter results. Revenues for the fourth quarter were $82.3 million, down 23% from $106.9 million in Q4 2024. Our strongest regions in terms of revenue for the quarter were North America and India, at $32.3 million and $24.7 million, respectively. We had two customers in the fourth quarter that contributed more than 10% of our revenues.
Gross profit for the fourth quarter on a non-GAAP basis was $28.2 million, a decrease of 23.2% compared to $36.7 million in Q4 2024. Our non-GAAP gross margin was 34.3%, the same as the non-GAAP gross margin of 34.3% in Q4 2024. Turning to operating expenses, as a reminder, the 2025 operating expenses include the impact of E2E, whereas last year's results do not. Research and development expenses for the fourth quarter on a non-GAAP basis were $7.7 million, down from $8.8 million in Q4 2024. As a percentage of revenue, our non-GAAP R&D expenses were 9.3% in the fourth quarter, compared to 8.2% in the fourth quarter last year.
Sales and marketing expenses for the fourth quarter on a non-GAAP basis were $11.4 million, up from $10.6 million in Q4 2024. As a percentage of revenue, sales and marketing expenses on a non-GAAP basis were 13.8% in the fourth quarter, compared to 9.9% in the fourth quarter last year. General and administrative expenses for the fourth quarter on a non-GAAP basis were $5.8 million, compared to $5.1 million in Q4 2024. As a percentage of revenues, non-GAAP G&A expenses were 7% in the fourth quarter, compared to 4.8% in the fourth quarter last year. Operating income for the fourth quarter on a non-GAAP basis was $3.4 million, compared to $12.2 million for Q4 2024.
As a percentage of revenues, non-GAAP operating income was 4.2% in the fourth quarter, compared to 11.4% in the fourth quarter last year. Financial and other expenses for the fourth quarter on a non-GAAP basis were $1.4 million, as compared to $3.5 million in the fourth quarter last year. Our tax expenses for the fourth quarter on a non-GAAP basis were $0.6 million. Net income for the fourth quarter on a non-GAAP basis was $1.4 million, or $0.02 per diluted share, compared to $7.7 million, or $0.09 per diluted share for Q4 2024.
Turning to our full-year results, revenues were $338.7 million, a decline of 14.1% from $394.2 million in 2024. Gross profit for 2025 on a non-GAAP basis was $116.8 million, a decrease of 15.5% compared to $138.2 million in 2024. Our non-GAAP gross margin was 34.5%, compared with gross margin of 35.1% in 2024. Operating income for 2025 on a non-GAAP basis was $18 million, compared to $48.8 million in 2024. As a percentage of revenue, non-GAAP operating income was 5.3% in 2025, compared to 12.4% in 2024.
Net income for 2025 on a Non-GAAP basis was $8.2 million, or $0.09 per diluted share, compared to $36.4 million, or $0.41 per diluted share in 2024. As for our balance sheet, our cash position at the end of 2025 was $38.4 million, compared to $35.3 million at the end of 2024. Short-term loans at the end of 2025 were $19 million, compared to $25.2 million at the end of 2024. Thus, at the end of 2025, we had a net positive cash position of $19.4 million, as compared to a net cash position of $10.1 million at the end of 2024.
We believe we have cash and facilities that are sufficient for operations and working capital needs. Our inventory at the end of 2025 was $61.6 million, up slightly from $59.7 million at the end of 2024. Our trade receivables at the end of 2025 were $99.7 million, down significantly from $149.6 million at the end of 2024. Our DSO now stands at 107 days. With respect to our cash flow, net cash flow generated by operations and investing activities was $7.3 million in Q4 2025, and $15.1 million in 2025, excluding the cost of acquisition of E2E.
Turning to our 2026 guidance, as Doron reiterated, we expect 2026 revenue to be between $355 million and $385 million, consistent with the guided revenues range we shared in early January. We also see an improvement of approximately 1 percentage point in our non-GAAP gross margin at the midpoint of our provided revenue range, primarily driven by improved revenue mix between North America and India, as well as additional cost reduction initiatives we are working on. This effort also includes a plan to overcome the recent spike in the price of memory components in the market. All in all, we expect our non-GAAP operating margin for 2026 to be between 6.5% and 7.5% at the midpoint of the revenue range.
This margin outlook reflects the currency assumptions established in January, and we will closely monitor and evaluate currency fluctuations as the year progresses. That concludes my prepared remarks, and I'd like to now turn the call back over to Doron for any remaining comments. Doron?
Thanks, Ronen. In closing, we continue to see steady traction across our markets, reflected in customer engagement, awards, and initial orders. Our priorities in 2026 are clear: execute on conversion, improve revenue cadence, and continue strengthening profitability and cash generation. We are reiterating our 2026 revenue guidance, and we believe our balance sheet strength gives us the flexibility to invest behind highest ROI opportunities while remaining disciplined on capital allocation. With that, I now open the call for questions.
To ask a question, please raise your hand using your mobile or desktop application, or press star nine on your telephone keypad and wait for your name to be announced. Our first question comes from Christian Schwab, from Craig-Hallum. Christian, please go ahead.
Great, thanks for taking my question. I just have one question. Doron, what would be needed to hit the high end of your 26 guidance? You know, would that be stronger strength in North America, you know, given that the backlog is materially greater than where we started last year? Would that be India coming in a little bit better, or geographically, would it be a different area? Just looking for, you know, what you're thinking about, the one or two things that we can monitor that might get us towards the high end of the guidance.
Thanks, Christian, for this question. Actually, I see various scenarios where we can reach the high end of the range. Obviously, it could be a combination of both, and... But I can also see a situation where we get to the high end of the range by only having one of the regions being strong. I would say that, in essence, we need North America and India to be relatively stronger. And obviously, with some recovery we expect in other regions, we can get to this high end of the range. I don't think it's beyond reach.
Great. Thank you. No other questions. Thanks, Doron.
Our next question is from Scott Searle from Roth Capital. Scott, please go ahead.
Hey, good morning, good afternoon. Thanks for taking the questions. Hey, maybe just quickly in terms of just some of the financial management, Ronen, could you talk about dollar to shekel issues and how you guys are handling that, and what kind of challenges that poses? And then, Doron, just in terms of the update, it's nice to see that nothing has changed and sounds like it's on the margin getting a little bit better from the January update. But in terms of the first half outlook versus the second half, kind of how are you seeing the balance right now? And given some of the orders that have started to come in, where the backlog is, how are you feeling about traditional seasonality in the first quarter and the first half? And then I had a follow-up.
Well, good morning, Scott. Thank you for the question. I'll start with the issue of the foreign exchange. We are monitoring that, and we have a hedging policy, so, we are hedged. The longer the period is, we are less hedged at this point, but we continue to monitor that. I would say as a rule of thumb, that, on an annualized basis, any 1% change would take 0.1% on an annualized basis from our operating margin. But, we continue to monitor that with a combination of hedging and, this is where we are. Hopefully, we do have enough time also for changes in the Forex, also to the other direction.
Hi, Scott, to your second question, yes, we started the year with a relatively strong booking, but obviously, it's not something that usually impacts the same current quarter that dramatically. We do believe that Q1, in terms of revenue, will take into account the regular seasonality we've seen in Q1, and maybe some delays in orders that were supposed to come in Q4, but were only received in Q1. I think that I still believe that the second part of the year will be much stronger than the first part, but I'm very much encouraged by the business that has already come from India and supposedly also coming in the upcoming months or so.
This increased our level of confidence in the, at least in the low end of the range for India very much, which is very encouraging.
Very helpful. Thank you. And if I could just to follow up, private network win in Asia-Pacific is interesting 'cause I think most of the activity has been North American focused and European focused. I'm wondering if you could comment in terms of the level of activity that's going on in that region for private networks and kind of the magnitude of some of those opportunities. Are they bigger? Are they smaller? How quickly do they deploy, just in terms of some of the characteristics around it? And then if I could just put on the back end of that, looking at point- to- multipoint solutions available in new frequencies, how is just the general tone there for Siklu in some of these other bands, be it India and, or North America? Thanks.
Sure. So let's start by saying that, in private network, we see multiple opportunities, basically in all regions. Obviously, taking a more of a staggered approach and making sure that we develop our business while still looking at the bottom line, we are putting more focus in certain regions as opposed to other regions. Particularly in APAC, there's many opportunities we see. We see opportunities in mining, some of them were already won. We see opportunities in the energy business, and therefore, I'm quite encouraged by the number of opportunities we see in this region. By the way, it's not only that region, we also see very nice opportunities in Europe and so on and so forth. So all in all, this is not a North America's strategy.
This is a global strategy that we execute on, and I'm quite encouraged by the progress both in North America and in other regions. Referring to our point-to-multipoint solution, so I would say that we see a few use cases that are creating a demand for us, and I would even say that the demand is growing as well, you know, the customers realize that that this solution is probably the most cost-effective one. So the 60 GHz point-to-multipoint product that was bought as part of the Siklu acquisition is primarily getting traction in what I would call security and safety use cases, and that is something that we see globally.
The other use case that this particular product is kind of creating an increased level of interest is either small cell backhaul or fixed wireless access in certain areas where the distances are short, and it doesn't make sense economically to put anything but these boxes that are very small. And this is with regard to the 60 GHz. We also see an increased demand and interest in a basically similar product in FR2, and obviously we are in advanced discussion with different customers about this a potential business. And accordingly, we are moving forward in terms of research and development of this product.
I believe that once we feel comfortable the demand is large enough and there we can basically come very fast in relative terms with such product in FR2.
Thanks so much. I'll get back in the queue.
Our next question is from Ryan Koontz from Needham. Ryan, please go ahead.
Great. Thank you. Maybe focusing on your North America larger opportunities here, your major Tier 1 in North America, can you maybe, you know, expand on what you see happening in that account for you in terms of budget and competitive landscape and, you know, customers' willingness to spend? It seems like, kind of, you know, around press reports that, you know, the customer has been in a relatively positive spending trajectory. Maybe you can expand on, you know, how, how you see your, your market opportunity there with your big U.S. Tier 1. Thank you.
So, Ryan, thank you for this question. Look, generally speaking, we see the customer continuing to invest in their network, and obviously, we are also attentive to the news and publications that this customer is giving us. We know from the past that this customer has some, so to speak, on trends or tendency to make short-term decisions, whether for much higher volumes or much lower volumes. So far, based on what we know today, we think that 2026 can be as good with this customer as 2025. One thing that is encouraging is that we basically see an opportunity that is materializing gradually for new use case with this customer, which is around network resiliency or fiber backup.
If we will see some slowdown in the traditional rollout, this could augment the volume of the business to be similar to the average we've seen in previous years.
Helpful. Thank you. With regards to your, your second North American Tier 1, can you update us there on your progress and expectations for the year in terms of progressing with the trials, et cetera?
Look, we're moving forward. We're making progress. The level of engagement is very high. We are actually having a weekly and bi-weekly follow-up discussion with the customer as they are looking into, so to speak, tuning the solution to be the best solution for their specific case. And in parallel, we are moving and discussing with the customer other opportunities. And generally speaking, I'm quite satisfied with the progress and with the level of intimacy we have created with this customer.
That's great to hear. Maybe just one last one, if I could get it in. With regards to supply chain and memory costs, sounds like you have some hardware cost reductions kind of moving through the process. How are you thinking about availability of memory? Any risk there around supply chain for this year, and what are you doing to compensate for the, you know, skyrocketing costs?
So far, the issue of the memory is more of a price issue rather than a supply issue. I hope that this remains the same. We have a plan that is combined of a building second and third source to our main vendor, and some quick changes we can do in our products to basically accommodate for this situation, while still having the performance of this products unhurt, and that's what we are doing. It will probably take us something like a quarter or so, but this is something that we are on top of, and obviously watching closely the evolution and the development in the market.
Got it. Thanks so much. That's all I got.
Our next question is from Theodore O'Neill, from Hills Research. Theodore, please go ahead.
Thanks very much. Doron, I was wondering if you could give us some color on how you're able to improve accounts receivable by 30% year-on-year?
Well, I will hand over this to Ronen, because this is something that is on his shoulder, and he was doing an amazing job. So Ronen, please go ahead.
So, Theodore, thank you for the question, and good morning. We have done a lot of work in with customers, mainly in India, to improve and catch up on payments. As you know, India is sometimes a challenge, and it's a lot of focus, a lot of focus and follow-ups to ensure that we reduce it, whether with new projects and improving the DSO in new projects as well as older projects.
Okay, a follow-up question here on the memory costs, just what could the impact be financially? I mean, I can't believe it's a huge part of the build for your equipment, but just can you give us a sort of a 30,000-foot view in terms of the dollar impact, if, say, memory prices stay where they are relative to where they've been in the past?
I don't think it's material enough, and we don't want to disclose exactly because it discloses information that is competitive, has a competitive implications. It's not material enough, and with our plans to mitigate this challenge, I don't think it's something that we need to disclose exact numbers.
Okay, fair enough. Thanks very much.
Okay, there are no further questions. Doron, I'd like to hand back to you for closing remarks.
So, thank you everyone for joining this call. Those who are planning to be in MWC, please come and visit us in our booth, and I wish a good day to everyone. Thank you.