Thank you for joining us for Ceragon Networks' Q1 2022 Earnings Call. I will now turn it over to our first speaker, Ms. Maya Lustig from Investor Relations. Please proceed.

Thank you, operator, and good morning, everyone. I am joined by Doron Arazi, Ceragon's Chief Executive Officer; and Ran Vered, Ceragon's Chief Financial Officer. Before we start, I would like to note that this call includes information that constitutes forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations therefrom will not be material. Such statements involve risks and uncertainties that may cause future results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, such risks, uncertainties, and other factors that could affect our results, as detailed in our press release that was published earlier today, and as further detailed in Ceragon's most recent Annual Report on Form 20-F, and in Ceragon's other filings with the Securities and Exchange Commission. Such forward-looking statements represent our views only as of the day they are made and should not be relied upon as representing our views as of any subsequent date. Such forward-looking statements do not purport to be predictions of future events or results, and there can be no assurance that they would prove to be accurate. Ceragon may elect to update these forward-looking statements at any point in the future, but it specifically disclaims any obligation to do so. Ceragon's public filings are available on the Securities and Exchange Commission's website at www.sec.gov, and may also be obtained from Ceragon's website at www.ceragon.com. Also, today's call will include certain non-GAAP numbers. For a reconciliation between GAAP and non-GAAP results, please see the table attached to the press release that was issued earlier today. I will now turn the call over to Doron. Please go ahead.

Thank you, Maya, and good morning, everyone. We began the year with strong momentum that has built up since the beginning of 2021, especially in North America and Europe. We saw exceptionally strong bookings in Q1 2022, the highest in the last 4 years, and on par with the second quarter of last year. We continue to make good progress in all three of our strategic pillars together, which constitute our growth strategy, as you may recall from earlier discussions. Our first strategic pillar has to do with increasing our traditional business, which is the best-in-class all-outdoor microwave and millimeter-wave market segments. With the massive ongoing 5G network rollouts in North America and Europe, we received significant orders this past quarter. Our second pillar involves expanding our business into Open Network architecture domains. Our IP-50FX Disaggregated Cell Site Gateway or DCSG solution, launched in the first quarter, uses best-of-breed software and hardware to integrate a cell site router and a radio indoor unit, offering both in a single solution. This quarter, we already received a purchase order for IP50 FX from a large Tier 1 operator in Latin America. And our third pillar is strengthening our Managed Services offering to deepen our relationships with our customers. This offering has garnered considerable attention from operators, private networks, and carriers in North America, Latin America, and Europe. In fact, the results of our most recent customer survey, which was conducted in the first quarter, demonstrate that 28% of our existing customers would be interested in our Managed Services. And we are already seeing this interest turn into POCs and orders for NOC support, connectivity as a service, and more, across different regions. Our customer survey also shows that our product satisfaction rate stands at a competitive 85%. That 85% of our customers think our main advantage is us being their 'Trusted advisor,' and they rate us among the top three technology leaders in the industry. In addition, a staggering 97% report that they are likely to increase or maintain their business with us. According to them, what sets us apart is our product quality, ease of use, and reliability. These results allow us to confirm our continued confidence in the strong demand for our solutions in 2022. I will now give you an overview per region. In North America, we experienced high demand and received healthy bookings. Based on the current outlook, we anticipate another record year in this region. As we announced earlier today, we signed a contract with DISH and started receiving orders worth multimillion dollars. DISH will leverage our ultra-high-capacity IP-50C microwave and IP50E millimeter wave transport solutions to support its nationwide 5G network rollout. We will also provide them with deployment services for smooth rollout and network asset management. DISH is America’s first cloud-native 5G network service provider, and we feel proud to be their partner of choice. Also, in the first quarter, we won a deal with a large North American carrier to provide them with our all-indoor technologies. In this region, in addition to the accelerated 5G rollout by large operators, we are seeing the ISPs and private networks market expand. In Q1, we enhanced and grew our sales funnel significantly, winning a tender in this domain as well. In India, the continued high demand is reflected in the strong orders and the bookings we received. Here, we mainly work with the region’s Tier 1 operators, helping them with fast site upgrades and network expansion to prepare for the 5G era and deliver uninterrupted connectivity. In February, a leading Tier 1 operator placed orders for our all-outdoor 5G-ready multicore solution, with delivery scheduled for Q2 and Q3 2022. Countrywide, the 5G spectrum tender is on track. E-Band spectrum release for backhauling is on its way, which presents a significant opportunity for us. We believe that our long-time market leadership and reputed name will help us have a decent market share in this domain. In Europe, we had an exceptionally strong quarter. In fact, it was a record quarter in the past 2 years. Here, as large operators begin their 5G field trials, we provide them with our latest capabilities and technologies. A leading Tier 1 operator and a third-party DCSG have tested our RAON, which proved that our RAON software works well with other open network elements. We also finished a successful POC with a Tier 1 global operator as part of their TIP activity. In addition, we acquired a new Tier 2 customer. We will be supporting them with their nationwide 5G projects. In APAC, we saw an improvement in the business environment compared to the last quarter. Post-Covid, countries are opening up, and the market is working its way back to normal, except for China. This past quarter, we acquired two new private network customers in this region. Bookings were strong. In Latin America, we experienced a very strong start to the year, thanks to strong bookings. The pandemic seems to be behind us, and businesses are recovering. Despite some political instability, which has an impact on business decisions and ongoing projects, investments are beginning to increase in several different countries. We received purchase orders for our IP50 FX from leading Tier 1 operators in Paraguay and Argentina. In Africa, we had a slow quarter, in line with our expectations, due to seasonality. On the delivery and gross margin front, this quarter, we continued to experience the challenges we spoke about in our previous call. These challenges caused our revenue to be somewhat lower than our expectations. So was the gross margin. This quarter, an issue that stood out was shipping costs relative to our expectations. We have been analyzing the main reasons for this specific cost increase in order to take action where we can and to get a better control of it. As stated in our previous analyst call, we believe that these challenges are temporary. Improvement in our gross margin is expected only during the second half of the year, assuming gradual improvement in our supply chain and shipping constraints and costs. Our main goal is to continue to meet the increased demand we are seeing from our customers and maintain and expand our market share. That said, we are doing our utmost to improve our gross margin via short, mid, and long-term cost reduction initiatives, as well as price increases, where applicable. Looking ahead, we feel confident about our core domain products, as well as our newer products such as IP50 FX, which help us leverage the fast-growing open networks trend. We believe that our positioning as best-in-class providers for microwave and millimeter wave technologies, as well as a leader in the new, disaggregated market, will continue to drive positive returns. As I mentioned earlier, these two areas cover the first two pillars of our growth strategy. In addition, expansion in the third pillar, which is Managed Services, will bring us more recurring business and revenues and improve our gross margin. Our belief is that together, increased activity in all three pillars will help us achieve margin expansion, which is our core aim. The bottom line is that demand looks strong, and we see opportunities to increase our market share. Thus, in spite of the challenges associated with deliveries and cost increases, we are optimistic about the future. With that, let me now turn the call over to Ran to discuss the financials for the quarter. Ran?

Thank you, Doron, and good morning, everyone. To help you understand the results, I will be referring mainly to non-GAAP numbers. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures, we refer you to today’s press release. Like Doron mentioned, during Q1 2022, we saw strong bookings coming from North America, Europe, India, and Latin America. We see strong continued demand overall. Let me now review the actual numbers with you. Revenues for the first quarter were $70.3 million, up by 2.9% compared with $68.3 million in Q1 last year, somewhat lower than expected. In Q1, we experienced several challenges which included delivering some of our products on time due to component shortages and supply chain disruptions. That said, as I mentioned earlier, demand continues to be high. Our strongest region in terms of revenues for the quarter is India with $15.6 million, reflecting ongoing deliveries for our main customers and in line with the strong demand we see in this region. Our second and third strongest regions in terms of revenues for the quarter were Latin America and North America with revenues of $13.9 million and $13.3 million, respectively. As Doron mentioned, in Latin America the pandemic seems to be behind us, and business is recovering. We had two above 10% customers in the first quarter. Gross profit for the first quarter on a non-GAAP basis was $19.5 million, giving us a non-GAAP gross margin of 27.7%, lower by almost 2% than the first quarter of 2021. The relatively low gross profit is mainly due to expedited costs derived from component shortages and increased shipping costs. Operating expenses on a non-GAAP basis for the first quarter were $20.1 million, in line with our expectations. Research & development expenses for the first quarter on a non-GAAP basis were $6.8 million, lower than in Q1 2021. We expect an increase in our R&D expenses in the next quarter as part of the continued productization efforts for our new chip. Sales & marketing expenses for the first quarter on a non-GAAP basis were $8.5 million, compared to $8.2 million in Q1 2021. General and administrative expenses for the first quarter on a non-GAAP basis were $4.8 million, the same as our expectations. Financial and other expenses for the first quarter on a non-GAAP basis were $1.2 million, lower than our expectations. Our tax expenses for the first quarter on a non-GAAP basis were $0.1 million. This is in line with our expectations. The net loss on a non-GAAP basis for the quarter was $1.2 million, or $0.02 per diluted share. As for our balance sheet, our inventory at the end of Q1 2022 was $58.1 million, up from $48.5 million at the end of Q1 2021, but lower than Q4 2021. The level of inventory still reflects our need to stock long lead-time and strategic items as a result of increased customer orders as well as the ongoing component shortages. We strive to keep our inventory levels lower, but given the current environment, sometimes the need to stock key and long-lead items arises. Our trade receivables are now at $120.7 million, up from $106.7 million at the end of Q1 2021. Our DSOs now stand at 150 days, higher than the 141 days in Q1 2021. This quarter, we were able to better control our cash flow from operations and investing activities compared to Q4 2021. We have a strong balance sheet including $25 million of cash and have available unused credit facilities of $23 million. Net cash used in operating and investing activities for the first quarter was $4.5 million. Net cash provided by financing activities for the first quarter was $12.2 million. Looking forward, we see strong operator demand. But as the year unfolds, we also see that the global component shortage, supply chain disruptions, and shipping issues continue to create business challenges as well as fluctuations in our gross margin. Although the situation remains volatile, we are constantly taking measures to counter the challenges and are well positioned to take full advantage of long-term opportunities. We continue to target revenue growth in 2022. Assuming an improvement in the components, supply chain, and shipping drawbacks, we now expect yearly revenue to be between $300 million to $315 million. Improvement in our gross margin is expected only during the second half of the year, assuming gradual improvement in our supply chain and shipping constraints and costs. With that, I now open the call for your questions.

Our first question today will come from Alex Henderson from Needham. Please go ahead.

Great. Can you hear me?

Hi, Alex.

Hi, Alex.

So, a couple of quick questions. One, if you were not supply constrained in the quarter, what kind of revenue could you have produced? And two, on the gross margins? How much of the pressure was a function of the inflation in shipping costs and parts that might be mitigated in future periods? In other words, do you expect the parts prices that are increasing to stay up at these levels? If that's the case, then don't back that out. But if you expect some improvement in parts that you're not expediting, do back that out?

Yes, so let's start one by one. First of all, our plan at the beginning of the quarter was to generate $75 million or even more. And in terms of the impact of the shipment costs and the expedite fees that we're paying for components, the impact in terms of percentage on gross margin this quarter was something between 3% to 4%.

Okay. So just going back to your comment about $75 million plus, to be clear, that still was a supply constrained guide. So, had you been fully available to buy any part you wanted to and ship anything you wanted to, I assume that it would have been higher than the $75 million, is that correct? And …

Yes.

I'm trying to understand what the actual underlying revenues would have been if there hadn't been any supply constraints.

Yes, let me kind of back up for a second. Our backlog is great. It's huge. What's holding us is all these constraints. And originally, we planned in our AOP for even higher revenue than the $75 million. Once we moved forward and had to provide our projection, in the last call, in the previous call, we took some prudent steps and said, okay, let's reduce a bit. And then we reached the $75 million. And even that was not able to be achieved only because of the constraints that we have in terms of our component shortages. And obviously, even the parts that we are able to overcome, the shipment costs went up dramatically because we wanted to supply to our customers on time. And we had in some cases to use more air than sea.

Just, Alex, just to complement Doron, if I may, the part of the erosion in the gross margin was the rise for our decision to expedite shipments in order to satisfy the customer. So, I will say that part of it is in our control in order to make sure that our customers are provided by the equipment as part of their deployment plan, and it's in our control. Yes, it cost us money. But we do think that we're taking the right decisions because we know in this market, the cost of gaining new customers is by far higher than maintaining customers, and with our Tier 1 long-standing customer relationships, we thought that this quarter that it's the right decision to pay these expedite fees in order to maintain our market share in these customers.

Yes, that's an important observation. I want to emphasize that we are not making decisions without careful consideration. We're assessing situations in real-time, and it's challenging to predict the overall outcome of the quarter while making daily decisions. However, we are making informed choices about spending additional resources to preserve and even grow our market share rather than risk losing customers to competitors.

A couple of quick questions. Any exposure to Ukraine, Russia as a result of the war? And then second, has there been any change in the demand as a result of that, particularly in EMEA or other markets that might be impacted by the economic consequences of that war?

So, I will pick up the first one, Alex, and will let Doron comment on the second. So, almost, I will say zero impact of the war in Russia and Ukraine, both I will say on the business side of things and also on the balance sheet. Because we have a negligence, I will say, amounts in our real estate. In regards to these customers and the level of activities, we have is also very small. So, I will say almost zero impact on these customers with respect to Russia and Ukraine.

Yes. And regarding your second question, Alex, so far, we haven't seen any impact. Actually, Europe, this quarter came very, very strong with a record booking quarter for the last 2 years. So far, we don't see the impact on the rest of Europe.

Okay. One last question then I'll cede the floor. The DISH win, obviously, congratulations, that's great news. Can you give us some sense of the scale of that on an annual basis, as you're rolling out that program? What it could be this year, what it could be, say, 3 or 4 years from now? What's the size of this transaction?

Based on what we've seen so far and the initial orders we have started receiving, I think this year could probably add something within more or less a two-digit $10 million of booking this quarter. I think that it's also yet to be seen, because this is just the first stage. So, it's very unclear how things will play out later. But if you ask me, I would assume a double-digit amount of millions of dollars, single-low double-digit.

So just to be clear, the gross margins in the U.S. tend to be higher, this should be consistent with that? And then second, are you the lead supplier to DISH?

To the best of our knowledge, we are the primary supplier. We have a significant majority of the equipment, likely around 100%. We are also leading the installation and providing services, including managing all the boxes with our NMS system. Regarding margins, you're correct that U.S. margins are typically higher. However, since we are in a ramp-up stage for services and did not have a substantial services business in the U.S. until now, our fixed costs may negatively impact our gross margin in the short term. That said, we see potential for growth in these services for both Tier 1s and lower tiers, as well as in critical infrastructure. As we progress, the services component will grow, leading to a decrease in fixed costs as a portion of our expenses, which will enhance our gross margins.

Got it. Thank you very much for the response. I will get back in queue. Thanks.

Thanks.

Thanks, Alex.

Thank you. Our next question comes from the line of George Iwanyc from Oppenheimer. Please go ahead.

Hello, Doron and Ran. Can you hear me?

Yes.

Hey, George, how are you?

All right. Thank you. So, kind of picking up on Alex's questions, when you look at the supply chain and visibility as the year progresses, it looks like your adjustments to the annual guidance is mostly related to the first quarter. But do you see improvement in the second quarter or is most of the revenue growth anticipated to come in the second half of the year?

At this point, because we're in the midst of the storm, we assume we are very prudent. We're trying to be very careful. We assume that the second part of the year is where we are going to see a bigger portion of the growth.

As well as improvement in the gross margin, of course, as a result of that.

Okay. When you…

Yes, sorry. We are in an environment where we expect improvement in both parts.

When you have discussions with your suppliers, what kind of visibility are they giving you and to the timing of availability?

Yes, let me explain to you the situation. You get, I would say a reasonable visibility and we thought it's improving. However, there's two things that are impacting this visibility and can create surprises for us. And this is why we're very cautious. One, even if the component vendors commit to a certain specific day, they may decline this commitment sometimes as late as 2 weeks before the delivery date. Now, we are working primarily with a contract manufacturer in Singapore that buys most of the components, the regular components for us. If he faces this kind of situation, he has nothing to do with it; he just can let us know that this is happening, and that's it. That said, we think that they can improve the visibility as opposed to what we've seen in the last couple of quarters. And by the way, one of the goals I have is to meet with them this quarter and discuss how we can improve the visibility coming from them so that we can come up, I would say, with better estimations about the revenue we'll be able to generate.

When you look at the pricing environment and the expedite, extra costs from a shipping perspective, how much are you able to either transfer some of those costs, or have discussions with your customers on the potential to raising prices and/or like temporarily offsetting some of the shipping costs?

I would say that this is an ongoing discussion with all of our customers. And as you can understand, every day is a new day. And just looking at the graph of the increase in air freight and sea freight just in the last couple of months, you can understand that the environment is very, very volatile. I can tell you that we have successes, almost in each and every region we have successes of either increasing prices or doing some changes in shipment terms. But it's not a walk in the park because let's not forget 70% of our business is coming from Tier 1 operators and Tier 2 operators, which have by far a bigger leverage and commercial power over Ceragon, not only Ceragon; its competition is waiting aside, and I have not seen a very intensive price increase coming from the competition. So, we're doing it one by one. I can tell you that I'm quite satisfied with the progress we've made. But now after seeing the shipping cost increase, we might make a decision to go back to our customers for a second or third round.

Could you provide an update on the 5G developments, specifically if we have gained any new design wins? Also, regarding the new chipset, what timeline can we anticipate for product innovation?

I mentioned on the conference call that we've noticed strong interest in our new IP50 FX, which functions like a virtual indoor unit and has impressed us with its reception. We’re making significant progress with major potential customers in Europe. Additionally, this particular disaggregated cell site router is attracting considerable attention in Latin America, and we are contemplating launching a lower-cost version in the future. It is also gaining traction in India, showing very promising early signs of success, though it is still too early to make definitive claims. Regarding the chip, we are advancing according to our plan and are in the productization phase, preparing to begin validation tests soon. We aim to complete productization by the end of 2022. This component faces competition from other chip designers regarding substrate and manufacturing resources, which is why I'm expressing this cautiously. We anticipate minimal delays despite potential market challenges. Once we can work with the chips, we intend to accelerate the rollout of our new 100 series products, which we expect to launch by early 2024.

Okay. Two more questions. So, Ran, you mentioned that R&D is expected to increase in the next quarter. How do you look at your overall OpEx spend? Are you able to maybe save a little bit on the G&A side?

Yes, thank you for the question, George. The straightforward answer is yes. We are reevaluating our operational expenses and aiming to be more disciplined regarding our spending, particularly in the general and administrative area. We plan to maintain this approach in the upcoming quarters, especially given the fluctuations in the market affecting our gross margin. We have already implemented more disciplined spending on OpEx, especially in G&A.

Okay. And last question. So, Ran, thank you for the conversations and all the work over the years. And I wish you well. So, Doron, how is the CFO transition search going? Can you give us an update on what you're looking for?

Yes, we are currently in the process of searching for a new CFO and have identified a couple of strong candidates. This is a collaborative effort involving some of our Board Directors who will also be interviewing potential candidates. I believe we are nearing the final stages of this process, although it may still take some additional time. We are looking for individuals with business experience, not just those focused solely on accounting and finance, as the financial aspect plays a significant role in our business success. Ideally, we would like candidates who have experience in the telecommunications industry or with vendors in this sector.

I appreciate the kind words, George. I have a couple of additional comments. First, while I may be leaving, I have a strong team, including some members I personally recruited, and others who were brought on during my previous role as CFO, and we have been able to retain them. Second, even after my departure, I am committed to ensuring a smooth transition with the new CFO, in alignment with Doron and the Board.

Thank you very much.

Thank you. Our next question comes from Alex Henderson from Needham. Please go ahead.

Great. Thanks. Clearly, the supply chain issues have been a big problem in the rearview mirror, but looking in the headlights, there's a lot of risk coming out of China these days, locking down. I don't know, what is it $400 million in Shanghai, and now they're doing Beijing, I don't know whether they get a lockdown 800 or what, but I can't imagine living in an environment where somebody from the government comes and padlocks you into your office or your apartment. But those points aside, what's the impact do you think of this on you and how much have you been able to diversify away from that risk?

Yes. So, I need to distinguish between a direct impact and an indirect impact. When I'm saying direct impact, I refer to some Chinese vendors who are supplying to us certain elements of our solution directly. In this respect, the exposure at this point is low. At least one of the vendors has two sides, one of them is out of China, and we were able to remove most of the activity to the site that is out of China. And with the other one, we have started and embarked on a process of finding an ultimate solution outside of China. And at this point, assuming the lockdown is not going to linger forever, the direct impact is not big. The indirect impact is something that we cannot access, and I will explain to you why. If our contract manufacturer buys certain components from the Chinese market, we are not aware of each and every nitty-gritty element and component in our solution, and it could be that they may have some, I would say, challenges. So far we haven't seen a big deterioration coming from the CM and based on that we assume that the impact, if any, is already included in their estimations.

So, it sounds like the exposure on parts is lower. What about on the travel side of it, the freight side? Do you expect the freight costs to start to trim down? Or do you expect the problems in Russia/China to cause freight to stay a big problem in through the second quarter at least?

It's quite difficult to determine. I can share that we've observed an increase in freight costs to India in the first quarter, but it now appears that there is some easing of those costs. Beyond that, it's hard to predict; our assumption at this time has led us to revise our outlook for the year, indicating that this situation will persist for some time, with any easing likely occurring later in the year, but not in a significant way.

And then on the T&E side, 3 weeks ago, I hadn't traveled in two years now, I've got 10 trips scheduled over the next quarter. So, I assume that you guys have similar kind of improvement and/or costs increase to cope with, but also hopefully productivity that you generated from that. Can you talk about what your assumptions are for the year in terms of T&E rebounding? Is it 60%, 70% of where it was in 2019? Is that the new normal? How do we think about that?

In the first quarter, we are seeing some signs of recovery in travel and expenses, but it's not significant. The travel projections are still much lower than 2018 levels. To give you a rough estimate, it's more than 50% less than what we saw in 2019. The travel we're observing is primarily focused on installations, full training, and knowledge transfer, with fewer trips for internal meetings. This situation is still not fully developed at this time.

So, is that a new normal? Or what do you think the new normal is going to be?

Yes. When we planned 2022, my guidance to management was, guys, we got used to close deals via Zoom, via Teams. And I'm not saying that we should stay contained in our rooms forever, but this is a very effective tool. And yes, there is no substitute to physical proximity. And obviously, the more important parts of meeting closing deals and so forth could and should be done face-to-face. But the budget that was instructed is more or less 50% of the level of travel expenses we've seen in 2019. I think that Ceragon has proven itself, especially on the OpEx, to be a very disciplined company. And this is what I expect from the management and employees.

So, kind of a new normal is a much lower level on it?

Yes.

Going to the exchange rate, can you remind us where you are on the hedging? And I mean, the shekel has certainly been helping things at this point, if you are not shocked?

Yes, unfortunately, regarding some of the expenses, I say unfortunately because we have already hedged 2022 at an average rate of around 3.15. Given the dollar strategy against the shekel, we are already hedged, which does help us. I will note that for balance sheet items that are not hedged and are denominated in shekels, this is why you see our financial expenses this quarter significantly lower than in previous quarters.

One more question, then I'll cede the floor again. Churn, staffing churn and wage inflation, what do you see in?

I'm pleased to share that in the first quarter, particularly in our R&D department, we have noticed a decrease in employee attrition. The improvement in the balance between hiring and turnover is significant, which is encouraging news for us. Additionally, there are reports indicating an increase in demand for workers, which suggests that the challenging conditions might start to ease. This could lead to more reasonable salary levels, although I do not anticipate this change happening quickly. I still expect this year to remain somewhat difficult. In other key regions, particularly Romania and India, we are observing similar trends. In India, there has been considerable turnover, not just within Ceragon but across the industry as employees seek better terms. Romania is experiencing a comparable situation to some extent. Currently, we are managing this scenario effectively by implementing salary increases alongside efficiency measures to ensure our workforce is performing at maximum productivity. This strategy has allowed us to maintain our budget in line with our original plans.

I’ve just one more last question. I apologize, I forgot to ask. So, most of my companies in the networking and telco space have been talking to the magnitude of their backlog on a full year basis. For instance, Ciena is running a backlog that's equal to roughly 100% of its annual product Sales. Juniper's well over 50%. This has become kind of a standard comment. Are you willing to give us some gauge of what your backlog is relative to the full year product revenue guide?

So, Alex, you asked this question so politely, I cannot deny or refuse to answer this. It's above 50% and I would say no more.

That's very helpful. Thank you so much for that. And, Ran, I understand you've got a great new gig. Congratulations. I look forward to maybe working with you wherever we end up. Thanks.

Thank you, Alex. It was a pleasure working with you as well.

Thank you. We have no further questions. Please proceed.

Thank you. In closing, we will continue to stay focused in the areas that add value to our business and market leadership in the medium and long-term. We will continue to sharpen our competitive edges, which are our technology leadership, our growing managed services offering, and our reputation that spans over 25 years. Our latest product IP50 FX, our newest customers, orders, and bookings are all testaments to our strengths and to the trust our customers continue to place in us. As 2022 unfolds, we will continue to build on and amplify these distinctions through our growth strategy and by focusing on the best opportunities in each region. I look forward to updating you further on our next call. Have a good day, everyone.