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ADTRAN Holdings, Inc. Announces Proposed Convertible Senior Notes Offering
Businesswire· 2025-09-15 21:00
Core Viewpoint - ADTRAN Holdings, Inc. plans to offer $150 million in convertible senior notes due 2030 in a private offering to qualified institutional buyers [1] Group 1 - The offering is subject to market and other conditions [1] - The notes will be offered under Rule 144A of the Securities Act of 1933 [1] - The company expects to grant the initial purchasers a 30-day option to purchase additional notes [1]
ADTRAN Holdings (ADTN) Up 16.1% Since Last Earnings Report: Can It Continue?
ZACKS· 2025-09-03 16:31
Core Viewpoint - ADTRAN Holdings reported mixed Q2 2025 results, with revenue exceeding estimates but net income falling short, indicating a complex financial landscape influenced by both operational performance and macroeconomic challenges [2][3]. Financial Performance - The company recorded a net loss of $20.5 million or 24 cents per share in Q2 2025, an improvement from a net loss of $49.7 million or 63 cents per share in the same quarter last year, attributed to revenue growth [3]. - Total revenues increased to $265.1 million from $226 million year-over-year, driven by strong demand for cloud, AI, and edge computing solutions, surpassing the consensus estimate of $257 million [4]. - Network Solutions generated $219.5 million in revenues, up from $179.2 million in the prior-year quarter, while Services and Support revenues slightly decreased to $45.6 million from $46.8 million [5]. Operational Metrics - Non-GAAP gross margin for the quarter was 41.4%, a slight decrease from 41.8% in the prior-year quarter, while non-GAAP operating income rose to $8 million from $1.4 million year-over-year [6]. - Cash generated from operating activities in the first half of 2025 was $75.3 million, compared to $57.8 million in the same period last year, with cash and cash equivalents at $106.3 million as of June 30, 2025 [7]. Future Outlook - For Q3 2025, ADTRAN anticipates revenues between $270 million and $280 million, with a non-GAAP operating margin expected to range from 3% to 7% [8]. - Analysts have not made any earnings estimate revisions in the past two months, indicating a period of stability in expectations [9]. Investment Scores - ADTRAN Holdings has a strong Growth Score of A but is rated F on the Momentum Score, with an overall VGM Score of A, placing it in the top 40% for value investment strategy [10]. - The company holds a Zacks Rank of 4 (Sell), suggesting expectations of below-average returns in the coming months [11].
Adtran (ADTN) Q2 Revenue Jumps 17%
The Motley Fool· 2025-08-06 05:02
Core Viewpoint - Adtran reported strong Q2 2025 results with revenue exceeding expectations, but profitability remains a challenge despite improvements in certain metrics [1][5][12] Financial Performance - Q2 2025 GAAP revenue reached $265.1 million, surpassing management's guidance and analyst estimates of $260.2 million, marking a 17.3% increase from $226.0 million in Q2 2024 [1][2][5] - Non-GAAP operating margin improved to 3.0%, up from 0.6% in the prior year [2][6] - Free cash flow (non-GAAP) increased significantly from $3.9 million in Q2 2024 to $18.3 million [2][7] - Adjusted earnings per share (non-GAAP) were break-even, showing a 100% improvement from a loss of $0.13 in Q2 2024 [2] Business Segments - The Network Solutions business, focusing on fiber networking products, grew by 22.5% year-over-year, reaching $219.5 million [5] - The Services & Support segment saw a decline of 2.6% to $45.6 million compared to Q2 2024 [5] Operational Efficiency - Operating cash flow (GAAP) increased to $32.2 million from $19.9 million in Q2 2024 [7] - Research and development spending (GAAP) decreased to $51.9 million from $60.4 million in Q2 2024, while selling, general, and administrative costs remained stable [8] Market Position and Strategy - Adtran focuses on becoming a leader in fiber networking and expanding into international markets, emphasizing innovation and operational efficiency [4][10] - The company competes with larger providers like Nokia, Huawei, and Ciena, maintaining non-GAAP gross margins above 40% [11] Future Outlook - Management projects Q3 2025 revenue between $270.0 million and $280.0 million, indicating a sequential growth of 3.7% [12] - Non-GAAP operating margin is expected to range from 3.0% to 7.0%, aiming to build on recent improvements [12] - Key areas for investors include monitoring margin sustainability, R&D spending, and progress towards profitability [13]
ADTRAN (ADTN) - 2025 Q2 - Earnings Call Transcript
2025-08-05 15:30
Financial Data and Key Metrics Changes - ADTRAN reported second quarter revenue of $265.1 million, representing a 17% year-over-year increase and a 7% sequential increase, exceeding the high end of previous guidance [21][7] - Non-GAAP gross margin for the quarter was 41.4%, with a slight decline attributed to product mix and higher transportation costs [24][26] - Non-GAAP operating profit was $8 million, or 3% of revenue, compared to $1.4 million, or 0.6% of revenue, in the same quarter last year [25][27] - Cash from operations was $32.2 million, and free cash flow was $18.3 million, reflecting solid improvement in liquidity [29][19] Business Line Data and Key Metrics Changes - Optical Networking Solutions revenue was $90.1 million, accounting for 34% of total revenue, with a 22% year-over-year growth [22][8] - Access and Aggregation revenue reached $91.2 million, also 34% of total revenue, increasing by 30% year-over-year [22][10] - Subscriber Solutions revenue was $83.8 million, or 32% of total revenue, with a 2% year-over-year increase [22][12] Market Data and Key Metrics Changes - Non-U.S. revenue accounted for 55% of total revenue, while U.S. revenue comprised 45% [23] - The company added 18 new optical customers during the quarter, indicating strong customer acquisition [9] Company Strategy and Development Direction - The company is focused on strengthening its capital structure and enhancing financial capabilities while deepening engagement with stakeholders [18][20] - Continued investments in next-generation optical, fiber access, and subscriber solutions are expected to drive future growth [14][15] - The company aims to achieve a positive net cash position and is evaluating opportunities to monetize non-core assets [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustained growth due to improving demand trends across key market segments [6][15] - The outlook for the second half of the year remains positive, with expectations for continued revenue growth and improved profitability [33][15] Other Important Information - The company is actively working on a robust foreign exchange hedging strategy to manage currency fluctuations [26][50] - The company is exploring a sale-leaseback transaction on its East Tower as part of its capital management strategy [70][30] Q&A Session Summary Question: Strength in large service providers in Europe - Management confirmed strength in both European and U.S. large service providers, with ongoing positive momentum in the market [36][38] Question: Emerging DCI opportunities and Mosa networks - Management acknowledged significant activity in RFPs related to data center interconnectivity, indicating early-stage business wins [40][42] Question: Balance sheet and share redemptions - Management clarified that share redemptions were well-managed and reduced shares outstanding, which is viewed positively for long-term value [43][44] Question: Market share gains - Management reported gaining market share in the U.S. tier two space and added several new customers in both optical and subscriber solutions [47][48] Question: Operating leverage and FX management - Management indicated that operating leverage is expected to improve, with ongoing efforts to manage foreign exchange impacts [49][54] Question: U.S. revenue strength and BCS bankruptcy - Management confirmed that the bankruptcy of BCS has led to increased demand, positively impacting U.S. revenue [59][60] Question: Sale of North Star Tower - Management clarified that negotiations for the North Star Tower are ongoing, with efforts to explore additional offers [68][70] Question: Growth expectations for subscriber solutions - Management expressed confidence in continued growth for subscriber solutions, driven by backlog and strong demand [73][75]
ADTRAN (ADTN) - 2025 Q2 - Quarterly Report
2025-08-05 15:14
[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Registrant Information](index=1&type=section&id=Registrant%20Information) ADTRAN Holdings, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025, and is incorporated in Delaware with common stock listed on NASDAQ - ADTRAN Holdings, Inc. is an **accelerated filer** and not a large accelerated filer, non-accelerated filer, smaller reporting company, or emerging growth company[3](index=3&type=chunk)[4](index=4&type=chunk) Common Stock Outstanding | Date | Shares Outstanding | | :--- | :--- | | July 31, 2025 | 80,052,167 | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) [Glossary of Selected Terms](index=3&type=section&id=GLOSSARY%20OF%20SELECTED%20TERMS) [Key Acronyms and Concepts](index=3&type=section&id=Key%20Acronyms%20and%20Concepts) This section defines key acronyms and concepts used in the report, ensuring clarity of industry-specific language Selected Terms and Meanings | Acronym/Concept/Defined Term | Meaning | | :--- | :--- | | AI | Artificial intelligence | | DPLTA | Domination and Profit and Loss Transfer Agreement | | DSO | Days Sales Outstanding | | GDPR | General Data Protection Regulation | | MSO | Multiple System Operator | | ODM | Original Design Manufacturing | | RNCI | Redeemable Non-Controlling Interest | | SaaS | Software as a Service | | SEC | Securities and Exchange Commission | | Service Provider | Entity that provides voice, data or video services to consumers and businesses | | SLA | Service Level Agreement | | SMB | Small and Mid-Sized Business | | SOFR | Secured Overnight Financing Rate | | Systems Integrator | Person or company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together | | U.S. | United States of America | [General Company Information](index=4&type=section&id=GENERAL) [Company and Subsidiary References](index=4&type=section&id=Company%20and%20Subsidiary%20References) This section clarifies company references, distinguishing between ADTRAN, Inc. and ADTRAN Holdings, Inc. before and after the July 2022 merger - References to 'ADTRAN,' 'Company,' 'we,' 'us,' and 'our' refer to ADTRAN, Inc. and its consolidated subsidiaries prior to the **July 8, 2022 merger**, and to ADTRAN Holdings, Inc. and its consolidated subsidiaries following the merger[10](index=10&type=chunk) - References to 'Adtran Networks' refer to Adtran Networks SE (formerly ADVA Optical Networking SE)[10](index=10&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section provides a safe harbor for forward-looking statements, cautioning that actual results may differ materially from projections due to various uncertainties - Forward-looking statements are protected by the **Private Securities Litigation Reform Act of 1995**[11](index=11&type=chunk) - Statements are identified by words such as 'believe', 'expect', 'intend', 'estimate', 'anticipate', 'would', 'will', 'may', 'might', 'could', 'should', 'can', 'future', 'assume', 'plan', 'seek', 'predict', 'potential', 'objective', 'expect', 'target', 'project', 'outlook', 'forecast' and similar expressions[11](index=11&type=chunk) - Actual results may differ materially due to various risks and uncertainties, as these statements are based on management's current expectations, assumptions, and available information[11](index=11&type=chunk) [Risks Related to Financial Results and Company Success](index=4&type=section&id=Risks%20Related%20to%20Financial%20Results%20and%20Company%20Success) The company faces various financial and operational risks, including debt covenant compliance, revenue fluctuations, inventory management, and dependence on key customers and suppliers - Obligation to comply with Wells Fargo Credit Agreement covenants; failure could accelerate debt - Significant fluctuations in revenue may continue, impacting operating results - Challenges in matching inventory levels to customer demand, potentially leading to write-offs - Heavy dependence on sales to certain customers; loss could significantly reduce revenue and net income - Dependence on a limited number of suppliers and potential supply shortages could adversely affect operations and customer relations [Risks Related to Control Environment and Telecommunications Industry](index=5&type=section&id=Risks%20Related%20to%20Control%20Environment%20and%20Telecommunications%20Industry) The company's control environment is at risk due to material weaknesses in internal control over financial reporting, alongside operational and industry-specific challenges - Material weaknesses in internal control over financial reporting identified, leading to restatements and potential adverse effects on investor confidence and business - International operations expose the company to additional risks and costs, affecting operating results and cash flows - Success depends on attracting and retaining key personnel - Need to continuously update and improve products and develop new ones to keep pace with communications technology - Dependence on a third-party cloud platform provider for Mosaic One SaaS and other operating platforms; disruptions could harm business and reputation [Risks Related to Stock Price and Regulatory Environments](index=6&type=section&id=Risks%20Related%20to%20Stock%20Price%20and%20Regulatory%20Environments) The company's stock price is subject to volatility, and it faces complex, evolving U.S. and foreign laws, regulations, and trade policies - Stock price has been volatile and may continue to fluctuate significantly - Subject to complex and evolving U.S. and foreign laws, regulations, and standards; violations may harm business and lead to penalties - Changes in trade policy, including additional tariffs, may adversely impact gross profits, gross margins, results of operations, and financial condition - New or revised tax regulations, changes in effective tax rate, or tax audits may adversely impact results - Further downgrades of the U.S. credit rating, automatic spending cuts, or government shutdowns could negatively impact liquidity, financial condition, and earnings [PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for ADTRAN Holdings, Inc., including balance sheets, statements of loss, comprehensive income, equity, and cash flows, with accompanying notes [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $106,271 | $76,021 | | Accounts receivable, net | $164,768 | $178,030 | | Inventory, net | $240,081 | $261,557 | | Total Current Assets | $607,228 | $599,140 | | Property, plant and equipment, net | $111,936 | $106,454 | | Goodwill | $60,194 | $52,918 | | Intangible assets, net | $310,169 | $284,893 | | Total Assets | $1,216,295 | $1,171,419 | | LIABILITIES AND EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accounts payable | $178,287 | $171,825 | | Unearned revenue | $62,695 | $52,701 | | Total Current Liabilities | $309,660 | $293,473 | | Non-current revolving credit agreement | $190,180 | $189,576 | | Total Liabilities | $644,593 | $621,525 | | Redeemable Non-Controlling Interest | $402,089 | $422,943 | | Total Equity | $169,613 | $126,951 | | Total Liabilities and Equity | $1,216,295 | $1,171,419 | [Condensed Consolidated Statements of Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) Condensed Consolidated Statements of Loss (in thousands, except per share amounts) | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 (Restated) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $265,068 | $225,991 | $512,812 | $452,164 | | Total Cost of Revenue | $166,144 | $144,732 | $318,712 | $300,590 | | Gross Profit | $98,924 | $81,259 | $194,100 | $151,574 | | Selling, general and administrative expenses | $60,347 | $59,364 | $110,632 | $118,355 | | Research and development expenses | $51,895 | $60,352 | $100,754 | $120,567 | | Goodwill impairment | — | — | — | $297,353 | | Operating Loss | $(13,318) | $(38,457) | $(17,286) | $(384,701) | | Loss Before Income Taxes | $(17,242) | $(45,026) | $(26,587) | $(391,908) | | Net Loss | $(18,258) | $(47,162) | $(27,206) | $(375,397) | | Net Loss attributable to ADTRAN Holdings, Inc. | $(20,531) | $(49,667) | $(31,798) | $(380,432) | | Loss per common share attributable to ADTRAN Holdings, Inc. – basic | $(0.24) | $(0.63) | $(0.38) | $(4.83) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 (Restated) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(18,258) | $(47,162) | $(27,206) | $(375,397) | | Other Comprehensive Income (Loss), net of tax | $46,723 | $(1,449) | $67,101 | $(19,282) | | Comprehensive Income (Loss), net of tax | $28,465 | $(48,611) | $39,895 | $(394,679) | | Comprehensive Income (Loss) attributable to ADTRAN Holdings, Inc., net of tax | $26,192 | $(51,115) | $35,303 | $(399,714) | [Condensed Consolidated Statements of Changes in Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Condensed Consolidated Statements of Changes in Equity (in thousands) | (in thousands) | Balance as of Dec 31, 2024 | Balance as of Mar 31, 2025 | Balance as of Jun 30, 2025 | | :--- | :--- | :--- | :--- | | Total Equity | $126,951 | $138,893 | $169,613 | | Net loss (Q2 2025) | - | $(18,258) | $(18,258) | | Other comprehensive income, net of tax (Q2 2025) | - | - | $46,723 | | ADTRAN stock-based compensation expense (Q2 2025) | - | - | $2,678 | | Redemption of redeemable non-controlling interest (Q2 2025) | - | - | $1,494 | | (in thousands) | Balance as of Dec 31, 2023 | Balance as of Mar 31, 2024 | Balance as of Jun 30, 2024 (Restated) | | :--- | :--- | :--- | :--- | | Total Equity | $605,257 | $260,849 | $213,628 | | Net loss (Q2 2024) | - | $(47,162) | $(47,162) | | Other comprehensive loss, net of tax (Q2 2024) | - | - | $(1,382) | | ADTRAN stock-based compensation expense (Q2 2024) | - | - | $3,836 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | | Net cash provided by operating activities | $75,341 | $57,809 | | Net cash used in investing activities | $(32,093) | $(29,861) | | Net cash used in financing activities | $(19,487) | $(4,832) | | Net increase in cash and cash equivalents | $23,761 | $23,116 | | Cash and cash equivalents, end of period | $106,271 | $111,185 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [General Business Description](index=13&type=section&id=General%20Business%20Description) ADTRAN Holdings, Inc. is a global provider of networking and communications platforms, software, systems, and services focused on the broadband access market - ADTRAN Holdings, Inc. is a global provider of networking and communications platforms, software, systems, and services focused on the **broadband access market**[37](index=37&type=chunk) - The Company serves diverse domestic and international customers including Service Providers, utilities, municipalities, fiber overbuilders, cable/MSOs, SMBs, distributed enterprises, and government agencies[37](index=37&type=chunk) - ADTRAN Holdings, Inc. solely owns ADTRAN, Inc. and is the majority shareholder of Adtran Networks SE, aiming to address customer needs for high-speed connectivity from the network core to the end consumer[38](index=38&type=chunk) [Liquidity, Domination and Profit and Loss Transfer Agreement and Credit Facility](index=13&type=section&id=Liquidity%20Domination%20and%20Profit%20and%20Loss%20Transfer%20Agreement%20and%20Credit%20Facility) This section details the DPLTA with Adtran Networks SE, compensation options for shareholders, ongoing appraisal proceedings, and the company's credit facility and liquidity outlook - The DPLTA with Adtran Networks SE became effective on **January 16, 2023**, entitling ADTRAN Holdings to issue binding instructions, receive annual profits, and absorb annual net losses of Adtran Networks[39](index=39&type=chunk)[40](index=40&type=chunk) - Adtran Networks shareholders (excluding ADTRAN Holdings) can elect either: * Annual Recurring Compensation: **€0.52 per share annually** * Exit Compensation: **€17.21 per share** plus guaranteed interest (**5.0% + 2.27% variable** as of June 30, 2025) - Appraisal proceedings initiated in 2023 challenge the adequacy of compensation under the DPLTA, extending the tender period for Exit Compensation until two months after a final court decision, which is not expected before **2027-2028**[41](index=41&type=chunk) DPLTA Compensation Accruals and Payments (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Annual Recurring Compensation Accrued | $2.4 | $2.5 | $4.8 | $5.0 | | Exit Compensation Payments | $19.4 | $0.02 | $19.4 | $0.025 | - As of June 30, 2025, the Company does not have sufficient liquidity to meet the substantial majority of its payment obligations under the DPLTA pertaining to Exit Compensation, but believes the probability of a large number of shareholders electing Exit Compensation in the next 12 months is remote[45](index=45&type=chunk) - The Company's Credit Facility provides **$350.0 million** in secured revolving credit, with **$66.8 million** available for additional borrowings as of June 30, 2025, based on debt covenant compliance[43](index=43&type=chunk) - Management expects revenue to continue increasing in the remainder of 2025, following increases in the first half, driven by customer inventory replenishment and increasing demand[46](index=46&type=chunk) - The Business Efficiency Program was completed as of **December 31, 2024**, and the Company expects to sell its Huntsville headquarters within the next twelve months to preserve cash liquidity[46](index=46&type=chunk) [1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the company's significant accounting policies, including the unaudited nature of interim statements, restatement details, and critical estimates - No significant changes to critical accounting policies occurred during the **six months ended June 30, 2025**[48](index=48&type=chunk) - The financial statements are unaudited and prepared under SEC rules for interim information, omitting some U.S. GAAP disclosures for complete annual statements[49](index=49&type=chunk) - The Company restated previously issued financial statements for errors related to inventory, cost of goods sold, Annual Recurring Compensation accrual, RNCI remeasurement, and goodwill/income tax receivable[51](index=51&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) - The SEC's Atlanta regional office initiated a non-public, fact-finding inquiry regarding the internal investigation into the restatement circumstances[52](index=52&type=chunk) - Management makes significant estimates affecting financial statements, including allowances for credit losses, inventory reserves, warranty reserves, deferred revenue, income tax provisions, goodwill impairment, and pension liabilities[60](index=60&type=chunk) - New accounting pronouncements not yet adopted include ASU 2024-03 (Disaggregation of Income Statement Expenses) and ASU 2023-09 (Improvements to Income Tax Disclosures), with effective dates after **December 15, 2026**, and **December 15, 2024**, respectively. The Company is evaluating their impact[62](index=62&type=chunk)[63](index=63&type=chunk) [2. REVENUE](index=16&type=section&id=2.%20REVENUE) This section details revenue generation from two reportable segments: Network Solutions and Services & Support, and provides information on remaining performance obligations and factoring agreements - Revenue is generated from two reportable segments: Network Solutions (hardware and software for Subscriber, Access & Aggregation, and Optical Networking) and Services & Support (network design, implementation, maintenance, and cloud-hosted services)[65](index=65&type=chunk)[66](index=66&type=chunk) Revenue by Reportable Segment and Category (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Network Solutions** | | | | Subscriber Solutions | $75,537 | $73,615 | | Access & Aggregation Solutions | $77,353 | $54,112 | | Optical Networking Solutions | $66,608 | $51,467 | | **Services & Support** | | | | Subscriber Solutions | $8,221 | $8,782 | | Access & Aggregation Solutions | $13,859 | $15,795 | | Optical Networking Solutions | $23,490 | $22,220 | | **Total Revenue** | **$265,068** | **$225,991** | | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Network Solutions** | | | | Subscriber Solutions | $147,285 | $133,984 | | Access & Aggregation Solutions | $153,200 | $121,889 | | Optical Networking Solutions | $121,230 | $104,594 | | **Services & Support** | | | | Subscriber Solutions | $16,884 | $18,181 | | Access & Aggregation Solutions | $27,148 | $29,330 | | Optical Networking Solutions | $47,065 | $44,186 | | **Total Revenue** | **$512,812** | **$452,164** | - Remaining performance obligations for contracts exceeding one year amounted to **$264.9 million** as of June 30, 2025, with approximately **62.8%** expected to be recognized over the next 12 months[71](index=71&type=chunk) Accounts Receivable, Contract Assets, and Unearned Revenue (in thousands) | (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Accounts receivable, net | $164,768 | $178,030 | | Contract assets | $510 | $631 | | Unearned revenue | $62,695 | $52,701 | | Non-current unearned revenue | $24,429 | $22,065 | - The Company entered into a Factoring Agreement on **July 1, 2024**, providing up to **$40.0 million** in factoring capacity, with **$18.4 million** factored as of June 30, 2025[75](index=75&type=chunk) [3. INCOME TAXES](index=18&type=section&id=3.%20INCOME%20TAXES) This section details the company's effective tax rate changes and the impact of deferred tax assets and valuation allowances Effective Tax Rate Changes | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | 5.9% (expense) | 4.7% (expense) | | Six Months Ended | 2.3% (expense) | 4.2% (benefit) | - Changes in the effective tax rate were primarily due to limited recognition of tax benefits on pre-tax losses in loss jurisdictions, resulting from a valuation allowance[79](index=79&type=chunk) Deferred Tax Assets and Valuation Allowance (in millions) | (in millions) | As of June 30, 2025 | | :--- | :--- | | Net deferred tax assets | $100.7 | | Valuation allowance | $115.7 | [4. STOCK-BASED COMPENSATION](index=18&type=section&id=4.%20STOCK-BASED%20COMPENSATION) This section outlines stock-based compensation expenses, including activity for PSUs, RSUs, restricted stock, and stock options, following the approval of new incentive plans - Stockholders approved the **2024 Employee Stock Incentive Plan (4.0 million shares)** and **2024 Directors Stock Plan (0.7 million shares)** on May 8, 2024[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) Stock-Based Compensation Expense (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $2.7 | $3.8 | | Six Months Ended | $5.9 | $7.8 | PSUs, RSUs and Restricted Stock Activity (in thousands) | (in thousands) | Number of Shares | Weighted Avg. Grant Date Fair Value (per share) | | :--- | :--- | :--- | | Unvested outstanding, Dec 31, 2024 | 2,335 | $13.22 | | Granted | 1,278 | $10.35 | | Vested | (509) | $11.59 | | Forfeited | (148) | $11.06 | | Unvested outstanding, Jun 30, 2025 | 2,956 | $11.44 | - Total unrecognized compensation expense for non-vested market-based PSUs, RSUs, and restricted stock was **$17.8 million** as of June 30, 2025, to be recognized over **2.7 years**[86](index=86&type=chunk) Stock Options Activity (in thousands) | (in thousands) | Number of Stock Options | Weighted Avg. Exercise Price (per share) | Weighted Avg. Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Outstanding, Dec 31, 2024 | 2,944 | $9.86 | 5.0 | $3,762 | | Exercised | (172) | $6.76 | - | - | | Forfeited | (98) | $9.62 | - | - | | Expired | (17) | $14.12 | - | - | | Outstanding, Jun 30, 2025 | 2,657 | $10.04 | 4.6 | $4,200 | | Exercisable, Jun 30, 2025 | 1,750 | $9.82 | 3.5 | $2,141 | - Unrecognized compensation expense for stock options was **$1.3 million** as of June 30, 2025, to be recognized over **0.6 years**[87](index=87&type=chunk) [5. LONG TERM INVESTMENTS](index=20&type=section&id=5.%20LONG%20TERM%20INVESTMENTS) This section provides fair value measurements for cash equivalents and investments, all classified as Level 1 in the fair value hierarchy Fair Value Measurements of Cash Equivalents and Investments (in thousands) | (in thousands) | Fair Value as of June 30, 2025 | Fair Value as of December 31, 2024 | | :--- | :--- | :--- | | Money market funds | $238 | $5,538 | | Marketable equity securities | $1,072 | $1,068 | | Deferred compensation plan assets | $32,044 | $30,991 | | **Total** | **$33,354** | **$37,597** | - All listed investments are classified as **Level 1** in the fair value hierarchy, meaning their values are based on unadjusted quoted prices for identical assets in active markets[91](index=91&type=chunk)[92](index=92&type=chunk) [6. INVENTORY, NET](index=21&type=section&id=6.%20INVENTORY,%20NET) This section details the composition of inventory, net, and the company's approach to inventory reserves and write-downs Inventory Composition (in thousands) | (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $85,043 | $106,384 | | Work in process | $11,530 | $9,724 | | Finished goods | $143,508 | $145,449 | | **Total inventory, net** | **$240,081** | **$261,557** | - Inventory reserves are established for estimated excess and obsolete inventory based on historical usage, trends, age, and market conditions[93](index=93&type=chunk) - During the twelve months ended December 31, 2024, the Company recorded an **$8.6 million** inventory write-down due to a strategy shift and product discontinuances under the Business Efficiency Program[94](index=94&type=chunk) [7. PROPERTY, PLANT AND EQUIPMENT, NET](index=21&type=section&id=7.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) This section presents the net value of property, plant, and equipment, along with depreciation and amortization expenses, and details the classification of the Huntsville headquarters as an asset held for sale Property, Plant and Equipment, Net (in thousands) | (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total property, plant and equipment | $439,684 | $412,768 | | Less: accumulated depreciation and amortization | $(327,748) | $(306,314) | | **Total property, plant and equipment, net** | **$111,936** | **$106,454** | Depreciation and Amortization Expense (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $7.6 | $7.0 | | Six Months Ended | $14.5 | $14.1 | - The Company classified its Huntsville headquarters property as 'assets held for sale' as of **December 31, 2024**, with a carrying value of **$11.9 million**, and expects to dispose of it within the next twelve months[97](index=97&type=chunk)[98](index=98&type=chunk) [8. GOODWILL](index=21&type=section&id=8.%20GOODWILL) This section details the carrying amount of goodwill, including foreign currency translation adjustments, and reports on impairment charges Goodwill Carrying Amount (in thousands) | (in thousands) | Services & Support | | :--- | :--- | | As of December 31, 2024 | $52,918 | | Foreign currency translation adjustments | $7,276 | | **As of June 30, 2025** | **$60,194** | - No goodwill impairment was recognized during the three and six months ended June 30, 2025, or the three months ended June 30, 2024[103](index=103&type=chunk) - During the first quarter of 2024, a **$297.4 million** non-cash goodwill impairment charge was recognized for the Network Solutions reporting unit due to qualitative factors like decreased market capitalization and lower service provider spending[102](index=102&type=chunk) - Accumulated goodwill impairment losses totaled **$335.3 million** as of June 30, 2025[103](index=103&type=chunk) [9. INTANGIBLE ASSETS, NET](index=22&type=section&id=9.%20INTANGIBLE%20ASSETS,%20NET) This section presents the net book value of intangible assets, including customer relationships and developed technology, along with amortization expenses and estimated future amortization Intangible Assets, Net (in thousands) | (in thousands) | Net Book Value as of June 30, 2025 | Net Book Value as of December 31, 2024 | | :--- | :--- | :--- | | Customer relationships | $33,469 | $32,387 | | Backlog | $135 | $1,581 | | Developed technology | $273,903 | $247,335 | | Licensed technology | $1,120 | $1,448 | | Licensed agreements | $133 | $153 | | Trade names | $1,409 | $1,989 | | **Total** | **$310,169** | **$284,893** | - No impairment losses related to intangible assets were recorded during the three and six months ended June 30, 2025 and 2024[105](index=105&type=chunk) Amortization Expense (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $15.7 | $15.3 | | Six Months Ended | $30.6 | $30.4 | Estimated Future Amortization Expense (in thousands) | (in thousands) | As of June 30, 2025 | | :--- | :--- | | 2025 | $32,368 | | 2026 | $64,772 | | 2027 | $59,150 | | 2028 | $49,561 | | 2029 | $46,025 | | Thereafter | $58,293 | | **Total** | **$310,169** | [10. CREDIT AGREEMENTS](index=23&type=section&id=10.%20CREDIT%20AGREEMENTS) This section details the company's non-current revolving credit facility, including available borrowings, interest rates, and compliance with financial covenants Non-Current Revolving Credit Facility (in thousands) | (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Wells Fargo credit agreement | $190,180 | $189,576 | | **Total non-current revolving credit facility** | **$190,180** | **$189,576** | - The Amended Credit Agreement provides a secured revolving credit facility of up to **$350.0 million**, maturing in **July 2027**, with **$50.0 million** available to Adtran Networks as a sublimit[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - As of June 30, 2025, borrowings totaled **$190.2 million**, with **$66.8 million** available for future borrowings based on debt covenant compliance[108](index=108&type=chunk) - The weighted average interest rate on revolving credit agreements was **8.55%** as of June 30, 2025[110](index=110&type=chunk) - The Company must maintain specific financial covenants: * Consolidated Total Net Leverage Ratio of **5.00x** * Consolidated Senior Secured Net Leverage Ratio of **3.25x** (**4.0x to 3.5x** during a Springing Covenant Period) * Consolidated Fixed Charge Coverage Ratio of **1.25x** - The Company was in compliance with all covenants as of **June 30, 2025**[111](index=111&type=chunk) [11. EMPLOYEE BENEFIT PLANS](index=24&type=section&id=11.%20EMPLOYEE%20BENEFIT%20PLANS) This section outlines the company's pension benefit plan liabilities and net periodic pension costs, including contributions made to defined benefit plans Pension Benefit Plan Liability (in thousands) | (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Non-current pension asset | $588 | $517 | | Current pension liability | $(345) | $(303) | | Non-current pension liability | $(9,686) | $(8,983) | | **Total** | **$(9,443)** | **$(8,769)** | Net Periodic Pension Cost (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Service cost | $421 | $333 | $810 | $673 | | Interest cost | $525 | $281 | $1,011 | $566 | | Expected return on plan assets | $(635) | $(354) | $(1,223) | $(713) | | Amortization of actuarial losses | $12 | $2 | $23 | $5 | | **Net periodic pension cost** | **$323** | **$262** | **$621** | **$531** | - The Company made contributions of **$2.0 million** and **$2.2 million** to defined benefit pension plans during the six months ended June 30, 2025 and 2024, respectively[115](index=115&type=chunk) [12. EQUITY](index=25&type=section&id=12.%20EQUITY) This section details the components of accumulated other comprehensive income, including unrealized gains/losses, defined benefit plan adjustments, and foreign currency translation adjustments Accumulated Other Comprehensive Income (in thousands) | (in thousands) | Balance as of June 30, 2025 | Balance as of June 30, 2024 (Restated) | | :--- | :--- | :--- | | Unrealized (Losses) Gains on Available-for-Sale Securities | $(382) | $(382) | | Defined Benefit Plan Adjustments | $(628) | $(2,573) | | Foreign Currency Translation Adjustments | $78,980 | $30,885 | | ASU 2018-02 Adoption | $385 | $385 | | **Total** | **$78,355** | **$28,315** | Reclassifications Out of Accumulated Other Comprehensive Income (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net realized gain on sales of securities | $38 | $7 | | Defined benefit plan adjustments – actuarial gain (loss) | $388 | $(10) | | Total reclassifications, before tax | $426 | $(3) | | Tax expense (benefit) | $(130) | $1 | | **Total reclassifications, net of tax** | **$296** | **$(2)** | Reclassifications Out of Accumulated Other Comprehensive Income (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net realized loss (gain) on sales of securities | $(27) | $168 | | Defined benefit plan adjustments – actuarial gain (loss) | $578 | $(97) | | Total reclassifications, before tax | $551 | $71 | | Tax expense | $(172) | $(14) | | **Total reclassifications, net of tax** | **$379** | **$57** | [13. REDEEMABLE NON-CONTROLLING INTEREST](index=29&type=section&id=13.%20REDEEMABLE%20NON-CONTROLLING%20INTEREST) This section details the equity ownership of non-controlling Adtran Networks stockholders and the activity related to redeemable non-controlling interest - As of June 30, 2025, non-controlling Adtran Networks stockholders held approximately **31.4%** equity ownership[121](index=121&type=chunk) Redeemable Non-Controlling Interest Activity (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | For the Year Ended December 31, 2024 | | :--- | :--- | :--- | | Balance at beginning of period | $422,943 | $443,327 | | Redemption of redeemable non-controlling interest | $(20,854) | $(20,384) | | Net income attributable to redeemable non-controlling interests | $4,592 | $9,824 | | Annual recurring compensation earned | $(4,592) | $(9,824) | | **Balance at end of period** | **$402,089** | **$422,943** | - Annual Recurring Compensation of **$10.1 million** for fiscal year 2024 was paid on **July 1, 2025**, and the 2025 accrual will be paid in 2026[121](index=121&type=chunk) [14. LOSS PER SHARE](index=29&type=section&id=14.%20LOSS%20PER%20SHARE) This section presents the calculation of basic and diluted loss per share attributable to ADTRAN Holdings, Inc. common stockholders Loss Per Share Calculation (in thousands, except per share amounts) | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 (Restated) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | :--- | :--- | | Net loss attributable to ADTRAN Holdings, Inc. | $(20,531) | $(49,667) | $(31,798) | $(380,432) | | Effect of redemption of RNCI | $1,494 | — | $1,491 | — | | **Net loss attributable to ADTRAN Holdings, Inc. common stockholders** | **$(19,037)** | **$(49,667)** | **$(30,307)** | **$(380,432)** | | Weighted average number of shares – basic | 79,748 | 78,852 | 79,642 | 78,803 | | Weighted average number of shares – diluted | 79,748 | 78,852 | 79,642 | 78,803 | | **Loss per share attributable to ADTRAN Holdings, Inc. – basic** | **$(0.24)** | **$(0.63)** | **$(0.38)** | **$(4.83)** | | **Loss per share attributable to ADTRAN Holdings, Inc. – diluted** | **$(0.24)** | **$(0.63)** | **$(0.38)** | **$(4.83)** | - Unvested PSUs, RSUs, restricted stock, and outstanding stock options were excluded from diluted EPS calculation due to their anti-dilutive effect[123](index=123&type=chunk) [15. SEGMENT INFORMATION](index=30&type=section&id=15.%20SEGMENT%20INFORMATION) This section provides financial performance data for the company's two reportable segments: Network Solutions and Services & Support, and revenue by geographic area - The Company's financial performance is reviewed based on two reportable segments: **Network Solutions** (hardware and software products) and **Services & Support** (network design, implementation, maintenance, and cloud-hosted services)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) Revenue and Gross Profit by Reportable Segment (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | | **Network Solutions** | | | | Revenue | $219,498 | $179,194 | | Cost of Revenue | $147,321 | $124,916 | | Gross Profit | $72,177 | $54,278 | | **Services & Support** | | | | Revenue | $45,570 | $46,797 | | Cost of Revenue | $18,823 | $19,816 | | Gross Profit | $26,747 | $26,981 | | **Total** | | | | Revenue | $265,068 | $225,991 | | Cost of Revenue | $166,144 | $144,732 | | Gross Profit | $98,924 | $81,259 | | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | | **Network Solutions** | | | | Revenue | $421,715 | $360,467 | | Cost of Revenue | $281,562 | $261,964 | | Gross Profit | $140,153 | $98,503 | | **Services & Support** | | | | Revenue | $91,097 | $91,697 | | Cost of Revenue | $37,150 | $38,626 | | Gross Profit | $53,947 | $53,071 | | **Total** | | | | Revenue | $512,812 | $452,164 | | Cost of Revenue | $318,712 | $300,590 | | Gross Profit | $194,100 | $151,574 | Revenue by Geographic Area (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | United States | $120,340 | $107,604 | $223,529 | $190,894 | | United Kingdom | $56,249 | $43,560 | $119,158 | $96,300 | | Germany | $31,205 | $24,542 | $58,393 | $64,283 | | Other international | $57,274 | $50,285 | $111,732 | $100,687 | | **Total** | **$265,068** | **$225,991** | **$512,812** | **$452,164** | [16. COMMITMENTS AND CONTINGENCIES](index=31&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This section details the company's legal matters, DPLTA appraisal proceedings, performance bonds, and purchase obligations - The Company is involved in various legal matters, including patent rights, regulatory compliance, and contractual disputes, but believes the outcome will not have a material adverse effect on its consolidated financial position[132](index=132&type=chunk) - DPLTA appraisal proceedings challenge the adequacy of both Exit Compensation (**€17.21 per share** plus interest) and Annual Recurring Compensation (**€0.52 per share**); a final decision is not expected before **2027-2028**, and a ruling requiring significant additional compensation could materially impact financial position[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) Annual Recurring Compensation Accrued (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $2.4 | $2.5 | | Six Months Ended | $4.8 | $5.0 | Exit Compensation Payments (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $19.4 | $0.02 | | Six Months Ended | $19.4 | $0.025 | - The Company had commitments related to performance bonds totaling **$16.9 million** as of June 30, 2025, expiring through **April 2029**, with a remote probability of default liability[139](index=139&type=chunk) - Purchase obligations totaled **$192.7 million** as of June 30, 2025, for product manufacturing requirements and commitments to suppliers[140](index=140&type=chunk) [17. RESTRUCTURING](index=32&type=section&id=17.%20RESTRUCTURING) This section details the Business Efficiency Program, initiated to reduce operating expenses and enhance capital efficiency, which was completed as of December 31, 2024 - The Business Efficiency Program, initiated on **November 6, 2023**, to reduce operating expenses and enhance capital efficiency, was completed as of **December 31, 2024**[141](index=141&type=chunk) - The program included salary reductions, an early retirement program, site consolidation, sale of owned real estate (including headquarters), inventory write-downs, and suspension of quarterly dividends[141](index=141&type=chunk) Restructuring Costs and Accruals (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Costs recognized | $(284) (reduction) | $(284) (reduction) | $17,530 | $34,640 | | Balance of restructuring liabilities as of June 30, 2025 | $2,641 | $2,641 | - | - | - Future cash payments for previously accrued severance, outplacement fees, and site consolidation costs are anticipated to be approximately **$2.6 million**[143](index=143&type=chunk) [18. RESTATEMENT OF QUARTERLY FINANCIAL INFORMATION](index=34&type=section&id=18.%20RESTATEMENT%20OF%20QUARTERLY%20FINANCIAL%20INFORMATION) This section details the restatement of previously issued financial statements due to errors related to inventory, cost of goods sold, Annual Recurring Compensation, RNCI remeasurement, and goodwill/income tax receivable - The Company restated previously issued financial statements for errors related to inventory and cost of goods sold, Annual Recurring Compensation accrual, RNCI remeasurement, and goodwill/income tax receivable[145](index=145&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) Impact of Restatement on Balance Sheet as of June 30, 2024 (in thousands) | (in thousands) | As Reported | Adjustment | As Restated | | :--- | :--- | :--- | :--- | | Total Current Assets | $668,319 | $(12,145) | $656,174 | | Total Assets | $1,290,782 | $(4,632) | $1,286,150 | | Total Current Liabilities | $289,712 | $(1,304) | $288,408 | | Total Liabilities | $630,810 | $(1,585) | $629,225 | | Redeemable Non-Controlling Interest | $439,743 | $3,554 | $443,297 | | Total Equity | $220,229 | $(6,601) | $213,628 | Impact of Restatement on Statements of Loss for Three Months Ended June 30, 2024 (in thousands) | (in thousands) | As Reported | Adjustment | As Restated | | :--- | :--- | :--- | :--- | | Total Revenue | $225,991 | — | $225,991 | | Total Cost of Revenue | $144,416 | $316 | $144,732 | | Gross Profit | $81,575 | $(316) | $81,259 | | Operating Loss | $(38,306) | $(151) | $(38,457) | | Net Loss | $(47,011) | $(151) | $(47,162) | | Net Loss attributable to ADTRAN Holdings, Inc. | $(49,865) | $198 | $(49,667) | Impact of Restatement on Statements of Cash Flows for Six Months Ended June 30, 2024 (in thousands) | (in thousands) | As Reported | Adjustment | As Restated | | :--- | :--- | :--- | :--- | | Net Loss | $(368,681) | $(6,716) | $(375,397) | | Net cash provided by operating activities | $56,496 | $1,313 | $57,809 | | Net cash used in investing activities | $(28,534) | $(1,327) | $(29,861) | | Net increase in cash and cash equivalents | $23,130 | $(14) | $23,116 | [19. SUBSEQUENT EVENTS](index=37&type=section&id=19.%20SUBSEQUENT%20EVENTS) This section reports on significant events occurring after the reporting period, including DPLTA compensation payments and new tax legislation - On **July 1, 2025**, the Company paid **$10.1 million** for the 2024 fiscal year Annual Recurring Compensation under the DPLTA[150](index=150&type=chunk) - The 'One Big Beautiful Bill Act' (OBBBA) was signed into law on **July 4, 2025**, restoring **100% bonus depreciation** and expensing of domestic R&E expenditures, among other tax provisions; the Company is evaluating its financial impact[151](index=151&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's analysis of the company's financial condition and operating results for the three and six months ended June 30, 2025, highlighting key trends, programs, and risks [Overview](index=39&type=section&id=OVERVIEW) ADTRAN Holdings, Inc. is a global provider of networking and communications platforms, software, systems, and services, operating in two segments with DPLTA obligations - ADTRAN Holdings, Inc. is a leading global provider of networking and communications platforms, software, systems, and services focused on the **broadband access market**[157](index=157&type=chunk) - The Company operates in two reportable segments: Network Solutions and Services & Support, and reports revenue across three categories: Subscriber Solutions, Access & Aggregation Solutions, and Optical Networking Solutions[160](index=160&type=chunk) - The DPLTA with Adtran Networks SE, effective **January 16, 2023**, grants ADTRAN Holdings control, profit transfer, and loss absorption responsibilities[164](index=164&type=chunk)[165](index=165&type=chunk) - Minority shareholders of Adtran Networks can elect Annual Recurring Compensation (**€0.52/share**) or Exit Compensation (**€17.21/share** plus interest), with appraisal proceedings challenging the adequacy of these compensations[166](index=166&type=chunk) - As of June 30, 2025, ADTRAN Holdings holds **68.6%** of Adtran Networks outstanding shares[170](index=170&type=chunk) [Financial Performance and Trends](index=41&type=section&id=FINANCIAL%20PERFORMANCE%20AND%20TRENDS) Revenue increased year-over-year due to normalized customer spending and infrastructure demand, while the Business Efficiency Program improved operating results - Revenue increased **17.3% year-over-year** for Q2 2025, driven by normalized customer spending, fiber expansion, vendor consolidation, and demand for modernizing infrastructure and AI applications[172](index=172&type=chunk) - U.S. revenue increased by **11.8% year-over-year**[172](index=172&type=chunk) - International revenue increased by **22.2% year-over-year**[172](index=172&type=chunk) - The Business Efficiency Program was completed as of **December 31, 2024**, contributing to improved operating results through tight operational cost controls[173](index=173&type=chunk) - The anticipated near-term impact of the BEAD Program has decreased due to a comprehensive federal agency review and associated delays in grant awards[175](index=175&type=chunk) - Trade policy actions, including increased import tariffs, pose risks of increased input costs, reduced margins, and shifts in customer behavior, which the Company mitigates by diversifying its supply chain[176](index=176&type=chunk) - No goodwill impairment was recognized in Q2 2025, but a **$297.4 million** non-cash goodwill impairment charge was recognized for the Network Solutions reporting unit during the six months ended June 30, 2024[180](index=180&type=chunk) [Business Efficiency Program](index=42&type=section&id=BUSINESS%20EFFICIENCY%20PROGRAM) The Business Efficiency Program, initiated in November 2023 to reduce operating expenses and enhance capital efficiency, was completed by December 2024 - The Business Efficiency Program, initiated on **November 6, 2023**, to reduce operating expenses and enhance capital efficiency, was completed as of **December 31, 2024**[182](index=182&type=chunk) - No Business Efficiency Program costs were incurred during the three and six months ended June 30, 2025; however, previously accrued costs were reduced by **$0.3 million**[183](index=183&type=chunk) Business Efficiency Program Costs (in millions) | Period | June 30, 2024 | | :--- | :--- | | Three Months Ended | $17.5 | | Six Months Ended | $34.6 | - Future cash payments for accrued severance, outplacement fees, and site consolidation costs are anticipated to be approximately **$2.6 million**[183](index=183&type=chunk) [Results of Operations – Q2 2025 vs. Q2 2024](index=43&type=section&id=RESULTS%20OF%20OPERATIONS%20%E2%80%93%20THREE%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030,%202025,%20COMPARED%20TO%20THE%20THREE%20AND%20SIX%20MONTHS%20ENDED%20JUNE%2030,%202024) [Revenue Analysis](index=43&type=section&id=Revenue%20Analysis) Total revenue increased significantly year-over-year, driven by normalized customer spending, fiber expansion, and demand for infrastructure modernization and AI applications Total Revenue (in millions) | Period | June 30, 2025 | June 30, 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Three Months Ended | $265.1 | $226.0 | +17.3% | | Six Months Ended | $512.8 | $452.2 | +13.4% | - Revenue increase driven by normalized customer spending, fiber expansion, vendor consolidation, shift from high-risk vendors, and increased demand for infrastructure modernization and AI applications[188](index=188&type=chunk) Revenue by Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Network Solutions | $219.5 | $179.2 | +22.5% | | Services & Support | $45.6 | $46.8 | -2.6% | | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Network Solutions | $421.7 | $360.5 | +17.0% | | Services & Support | $91.1 | $91.7 | -0.7% | Revenue by Geographic Area (in millions) | Geographic Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | United States | $120.3 | $107.6 | +11.8% | | International | $144.7 | $118.4 | +22.2% | - Changes in foreign currencies relative to the U.S. dollar increased net revenue by approximately **$6.1 million** for the three months and **$4.5 million** for the six months ended June 30, 2025[192](index=192&type=chunk) [Cost of Revenue Analysis](index=44&type=section&id=Cost%20of%20Revenue%20Analysis) Cost of revenue as a percentage of total revenue decreased, primarily due to reduced restructuring and labor costs from the Business Efficiency Program Cost of Revenue as % of Total Revenue | Period | June 30, 2025 | June 30, 2024 (Restated) | Change (pp) | | :--- | :--- | :--- | :--- | | Three Months Ended | 62.7% | 64.0% | -1.3 | | Six Months Ended | 62.1% | 66.5% | -4.4 | - Decrease in cost of revenue as a percentage of revenue primarily due to a **2.9% decrease** in restructuring and labor costs from the Business Efficiency Program for the three months ended June 30, 2025[194](index=194&type=chunk) - Network Solutions cost of revenue as a percentage of segment revenue decreased from **69.7% to 67.1%** for the three months ended June 30, 2025, driven by changes in customer/product mix and restructuring efficiencies[195](index=195&type=chunk) - Services & Support cost of revenue as a percentage of segment revenue decreased from **42.3% to 41.3%** for the three months ended June 30, 2025, mainly due to reduced restructuring and labor costs[196](index=196&type=chunk) [Gross Profit Analysis](index=45&type=section&id=Gross%20Profit%20Analysis) Gross profit as a percentage of total revenue increased, driven by decreased restructuring and labor costs and favorable foreign currency changes Gross Profit as % of Total Revenue | Period | June 30, 2025 | June 30, 2024 (Restated) | Change (pp) | | :--- | :--- | :--- | :--- | | Three Months Ended | 37.3% | 36.0% | +1.3 | | Six Months Ended | 37.9% | 33.5% | +4.4 | - Increase in gross profit percentage for the three months ended June 30, 2025, was attributable to a **2.9% increase** from decreased restructuring and labor costs, and a **1.4% increase** from foreign currency changes, partially offset by a **3.0% decrease** from customer and product mix changes[198](index=198&type=chunk) - Network Solutions gross profit as a percentage of segment revenue increased from **30.3% to 32.9%** for the three months ended June 30, 2025[199](index=199&type=chunk) - Services & Support gross profit as a percentage of segment revenue increased from **57.7% to 58.7%** for the three months ended June 30, 2025[200](index=200&type=chunk) [Operating Expenses Analysis](index=46&type=section&id=Operating%20Expenses%20Analysis) Selling, general and administrative expenses increased slightly, while research and development expenses decreased due to the Business Efficiency Program Selling, General and Administrative Expenses (in millions) | Period | June 30, 2025 | June 30, 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Three Months Ended | $60.3 | $59.4 | +1.7% | | Six Months Ended | $110.6 | $118.4 | -6.5% | - Q2 2025 increase in SG&A primarily due to a **$4.0 million increase** in professional and legal services, partially offset by a **$2.5 million decrease** in amortization of intangible assets[203](index=203&type=chunk) Research and Development Expenses (in millions) | Period | June 30, 2025 | June 30, 2024 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Three Months Ended | $51.9 | $60.4 | -14.0% | | Six Months Ended | $100.8 | $120.6 | -16.4% | - Decrease in R&D expenses primarily attributable to a reduction of employee-related costs from the Business Efficiency Program (**$6.3 million** for Q2 2025, **$15.4 million** for H1 2025)[205](index=205&type=chunk) Government Grants as R&D Expense Reduction (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $3.1 | $2.2 | | Six Months Ended | $5.3 | $4.1 | - No goodwill impairment was recognized during the three and six months ended June 30, 2025, or for the three months ended June 30, 2024; a **$297.4 million** non-cash goodwill impairment charge was recognized for the Network Solutions reporting unit during the six months ended June 30, 2024[208](index=208&type=chunk) [Other Income and Expense Analysis](index=46&type=section&id=Other%20Income%20and%20Expense%20Analysis) Interest and dividend income decreased, while interest expense also declined due to lower program fees and reduced credit agreement expenses Interest and Dividend Income (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $0.2 | $0.4 | | Six Months Ended | $0.3 | $0.8 | - Decrease in interest and dividend income primarily due to fluctuations in investment balances and a decrease in the rate of return[210](index=210&type=chunk) Interest Expense (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $4.6 | $6.9 | | Six Months Ended | $9.3 | $11.5 | - Decrease in interest expense driven by lower program fee expenses related to the accounts receivable factoring program and reduced expense from amending the revolving credit agreement[211](index=211&type=chunk) Net Investment Gain (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $3.1 | $0.9 | | Six Months Ended | $1.4 | $3.1 | - Fluctuations in net investment gain primarily attributable to changes in the fair value of securities[212](index=212&type=chunk) Other (Expense) Income, Net (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $(2.6) | $(0.9) | | Six Months Ended | $(1.7) | $0.4 | - Other (expense) income, net, primarily consisted of gains and losses on foreign currency transactions and income from excess material sales[213](index=213&type=chunk) Income Tax (Expense) Benefit as % of Pre-Tax Loss | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | 5.9% (expense) | 4.7% (expense) | | Six Months Ended | 2.3% (expense) | 4.2% (benefit) | - Changes in effective tax rate driven by non-deductible impairment charges and limited tax benefits on pre-tax losses in loss jurisdictions[214](index=214&type=chunk) Net Loss Attributable to ADTRAN Holdings, Inc. (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Three Months Ended | $(20.5) | $(49.7) | | Six Months Ended | $(31.8) | $(380.4) | [Liquidity and Capital Resources](index=47&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company finances operations through existing cash, investments, credit arrangements, and cash flow, with improved operating cash flow and sufficient liquidity for the next twelve months - The Company finances operations with existing cash, investments, credit arrangements, and cash flow from operations[216](index=216&type=chunk) Cash and Cash Equivalents (in millions) | (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total Cash on Hand | $106.3 | $76.0 | | Cash held by foreign subsidiaries | $87.2 | $52.6 | - Net cash provided by operating activities improved by **$17.5 million** to **$75.3 million** during the six months ended June 30, 2025, compared to **$57.8 million** in the prior year[235](index=235&type=chunk) - The Company believes its liquidity sources will be adequate to meet operating requirements, capital expenditures, DPLTA obligations, and debt covenants for at least the next twelve months[226](index=226&type=chunk) - The Amended Credit Agreement provides a secured revolving credit facility of up to **$350.0 million**, with **$66.8 million** available for additional borrowings as of June 30, 2025, based on debt covenant compliance[227](index=227&type=chunk)[228](index=228&type=chunk) - Quarterly accounts receivable DSO decreased from **67 days** (Dec 31, 2024) to **57 days** (June 30, 2025), primarily due to customer and geographical mix of commercial terms[236](index=236&type=chunk) - Inventory decreased **8.2%** to **$240.1 million** as of June 30, 2025, primarily due to reduced component purchases and utilization of buffer stock[238](index=238&type=chunk) Capital Expenditures (in millions) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Six Months Ended | $32.5 | $30.7 | - The Company has no authorized stock repurchase program for ADTRAN Holdings, Inc. shares[242](index=242&type=chunk) Material Short- and Long-Term Cash Requirements (in thousands) | (in thousands) | Total | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Wells Fargo credit agreement | $190,180 | $0 | $0 | $190,180 | $0 | $0 | $0 | | Purchase obligations | $192,693 | $164,411 | $26,845 | $1,312 | $125 | $0 | $0 | | Operating lease obligations | $44,323 | $4,839 | $8,750 | $7,728 | $6,642 | $3,683 | $12,681 | | **Totals** | **$427,196** | **$169,250** | **$35,595** | **$199,220** | **$6,767** | **$3,683** | **$12,681** | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=55&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's exposure to interest rate and foreign currency exchange rate risks, and its use of derivative transactions to manage currency volatility - The Company is exposed to financial market risks, including changes in foreign currency rates and prices of marketable equity and fixed-income securities, with a primary objective to preserve principal[267](index=267&type=chunk) - A hypothetical **50 basis point increase** in interest rates would increase annual interest expense by **$1.0 million** on its **$190.2 million** revolving credit agreements as of June 30, 2025[269](index=269&type=chunk) - A hypothetical **10% movement** in foreign exchange rates would result in a before-tax positive or negative impact of approximately **$7.0 million** for the six months ended June 30, 2025[270](index=270&type=chunk) - The Company uses foreign currency forward contracts to reduce the impact of currency exchange rate movements, holding **1 outstanding contract** with a fair value of **$0.1 million** as of June 30, 2025[272](index=272&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=56&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting, for which remediation plans are underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2025, due to material weaknesses in internal control over financial reporting[275](index=275&type=chunk) - Identified material weaknesses include: * Ineffective controls in response to risks of material misstatement * Ineffective controls relating to communicating accurate information internally and with governance * Ineffective controls over financial statement preparation, presentation, and disclosure * Ineffective controls to address initial application of complex accounting standards and non-routine transactions (e.g., non-controlling interest, receivable purchase agreements) * Ineffective controls over an inventory suspense account - These material weaknesses led to restatements and revisions of financial statements for multiple prior periods[277](index=277&type=chunk) - Remediation efforts include new/enhanced controls over financial statement reconciliation, global process review, increased training, and improved communication policies[278](index=278&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[284](index=284&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=58&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section incorporates by reference information regarding DPLTA Appraisal Proceedings from Note 16, 'Commitments and Contingencies,' in Part I, Item 1 of this report - Information on DPLTA Appraisal Proceedings is incorporated by reference from Note 16, 'Commitments and Contingencies'[286](index=286&type=chunk) [ITEM 1A. RISK FACTORS](index=58&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates risk factors from the 2024 Form 10-K/A, focusing on complex and evolving regulatory environments, trade policies, and potential impacts of U.S. credit rating downgrades - No material changes to risk factors from the 2024 Form 10-K/A, other than those described in this section[287](index=287&type=chunk) - Subject to complex and evolving U.S. and foreign laws, regulations, and standards, including communications regulations, import/export controls, and data protection laws (GDPR, U.K. GDPR, DUAA); violations or changes could harm business and lead to penalties[288](index=288&type=chunk)[289](index=289&type=chunk) - Changes in trade policy, including increased import tariffs (e.g., on semiconductors, critical raw minerals), may adversely impact gross profits, gross margins, results of operations, and financial condition; the Company is diversifying its supply chain to mitigate this[291](index=291&type=chunk)[297](index=297&type=chunk) - Further downgrades of the U.S. credit rating (e.g., Moody's downgrade to Aa1), automatic spending cuts, or government shutdowns could negatively impact liquidity, financial condition, and earnings[298](index=298&type=chunk)[300](index=300&type=chunk) - The U.S. government temporarily paused FCPA enforcement on **February 10, 2025**, and issued new guidelines on **June 9, 2025**, focusing on narrower misconduct and prioritizing individual prosecution[293](index=293&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=60&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During the three months ended June 30, 2025, the Company did not repurchase any shares of its common stock, and there is no authorized stock repurchase program in place - No shares of common stock were repurchased during the three months ended June 30, 2025[301](index=301&type=chunk) - There is no current authorization to repurchase common stock[301](index=301&type=chunk) [ITEM 5. OTHER INFORMATION](index=61&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section announces the 2026 Annual Meeting of Stockholders, provides deadlines for stockholder proposals and director nominations, and confirms no Rule 10b5-1 trading arrangements were adopted or terminated - The 2026 Annual Meeting of Stockholders is set for **May 13, 2026**, as a virtual meeting[303](index=303&type=chunk) - Deadline for stockholder proposals under Rule 14a-8 for the 2026 Annual Meeting is **December 1, 2025**[305](index=305&type=chunk) - Deadline for director nominations or other business proposals under Company bylaws is between **January 13, 2026**, and **February 12, 2026**[306](index=306&type=chunk) - No directors or executive officers adopted or terminated any Rule 10b5-1(c) trading arrangements during the fiscal quarter ended June 30, 2025[307](index=307&type=chunk) [ITEM 6. EXHIBITS](index=62&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, stock agreements, certifications, and XBRL financial statements - Exhibit 3.1: Amended and Restated Certificate of Incorporation of ADTRAN Holdings, Inc - Exhibit 3.2: Second Amended and Restated Bylaws of ADTRAN Holdings, Inc - Exhibits 10.1* to 10.4*: Settlement Agreement and various forms of stock unit agreements for the CEO under the 2024 Employee Stock Incentive Plan - Exhibits 31* and 32*: Rule 13a-14(a)/15d-14(a) Certifications and Section 1350 Certifications - Exhibit 101: Inline XBRL formatted financial statements, including Condensed Consolidated Balance Sheets, Statements of Loss, Comprehensive Loss, Changes in Equity, and Cash Flows, along wit
ADTRAN (ADTN) - 2025 Q2 - Quarterly Results
2025-08-05 11:30
ADTRAN Holdings, Inc. Form 8-K (July 16, 2025) [Item 2.02 Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) ADTRAN Holdings, Inc. announced preliminary Q2 2025 revenue on July 16, 2025 - ADTRAN announced its preliminary revenue for the fiscal quarter ended June 30, 2025[6](index=6&type=chunk) - The announcement was made via a press release on July 16, 2025, which is attached as Exhibit 99.1[6](index=6&type=chunk) [Item 7.01 Regulation FD Disclosure](index=3&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) ADTRAN issued an ad hoc announcement in Germany on July 16, 2025, disclosing preliminary Q2 2025 revenue to comply with EU Market Abuse Regulation - Due to its listing on the Frankfurt Stock Exchange, ADTRAN is subject to German and European securities laws, specifically the Market Abuse Regulation (MAR)[7](index=7&type=chunk) - MAR requires real-time disclosure if management's expected results significantly deviate from prior guidance or analyst consensus[7](index=7&type=chunk) - In compliance with MAR, ADTRAN published an ad hoc announcement in Germany on July 16, 2025, disclosing preliminary revenue for Q2 2025. This announcement is attached as Exhibit 99.2[7](index=7&type=chunk)[8](index=8&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists documents filed with the Form 8-K, including a press release, ad hoc notification, and interactive data file List of Exhibits | Exhibit Number | Description | | :--- | :--- | | 99.1 | Press Release dated July 16, 2025 | | 99.2 | Ad Hoc Notification dated July 16, 2025 (English translation) | | 104 | Cover Page Interactive Data File – the cover page iXBRL tags are embedded within the Inline XBRL document |
ADTRAN (ADTN) - 2025 FY - Earnings Call Transcript
2025-07-24 17:30
Financial Data and Key Metrics Changes - The past year was characterized by operational discipline and strategic investment, leading to tangible improvements in financial performance and a stronger market position, especially in the second half of 2024 [3] - The company entered 2025 with improved financial fundamentals, including cash flow generation [3] Business Line Data and Key Metrics Changes - Specific business line performance data was not detailed in the provided content, but the overall focus was on the company's differentiated portfolio offering and its commitment to operational excellence [4] Market Data and Key Metrics Changes - There is strong support for fiber infrastructure expansion, particularly in key U.S. and European markets, indicating positive market conditions for the company [4] Company Strategy and Development Direction - The company is committed to disciplined execution, innovation, and operational excellence to create long-term value for stockholders [4] - The management expressed confidence in the company's position to capitalize on the reinvestment by communication service providers in their networks following a recent market slowdown [4] Management Comments on Operating Environment and Future Outlook - Management noted that the momentum is expected to continue into the second half of 2025, driven by the reinvestment in networks by communication service providers [4] - The company emphasized its resilience and commitment to building a stronger, more agile organization poised for long-term success [5] Other Important Information - The meeting included the election of directors, an advisory vote on executive compensation, and the ratification of the independent auditor, PricewaterhouseCoopers LLP, for the fiscal year ending December 31, 2025 [10][12] Q&A Session Summary - No specific questions and answers were provided in the content, as the focus was primarily on the meeting proceedings and voting outcomes.
ADTRAN Holdings (ADTN) Moves 9.2% Higher: Will This Strength Last?
ZACKS· 2025-07-17 11:31
Company Overview - ADTRAN Holdings (ADTN) shares increased by 9.2% to $9.66 in the last trading session, with a notable trading volume, and have gained 13.5% over the past four weeks [1][2] Financial Performance - Preliminary second-quarter 2025 revenue estimates for ADTRAN are between $262.5 million and $267.5 million, surpassing previous guidance of $247.5 million to $262.5 million, driven by improved market conditions and rising product demand [2][3] - The company anticipates quarterly earnings of $0.01 per share, reflecting a year-over-year increase of 104.2%, with expected revenues of $257 million, a 13.7% rise from the same quarter last year [3] Market Sentiment - Management believes that favorable business conditions are contributing to higher demand trends [3] - The consensus EPS estimate for ADTRAN has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [5] Industry Context - ADTRAN is part of the Zacks Technology Services industry, where another company, Jamf Holding (JAMF), saw a 3.5% increase in its stock price but has returned -13.2% over the past month [5][6] - Jamf Holding's consensus EPS estimate has also remained unchanged, with a year-over-year change of +21.4% expected [6]
Is the Options Market Predicting a Spike in ADTRAN Holdings Stock?
ZACKS· 2025-07-08 13:36
Group 1 - The stock of ADTRAN Holdings, Inc. (ADTN) is experiencing significant attention due to high implied volatility in the options market, particularly the Jul 18, 2025 $10 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in ADTRAN's stock price, potentially due to an upcoming event [2] - Currently, ADTRAN Holdings holds a Zacks Rank 3 (Hold) in the Technology Services industry, which is in the top 18% of the Zacks Industry Rank, but analysts have not increased earnings estimates for the current quarter, with a consensus estimate dropping from 5 cents to 1 cent per share [3][4] Group 2 - The high implied volatility surrounding ADTRAN could indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay, hoping the stock does not move as much as expected by expiration [4]
ADTRAN (ADTN) Earnings Call Presentation
2025-06-18 09:50
Company Overview - Adtran's fiscal year 2024 revenue reached $923 million[6] - The company has over 3,100 employees worldwide and operates in 50 locations[6] - Adtran has over 1,000 global technology patents and over 35 years of experience[6] Market Trends and Outlook - The company anticipates increasing fiber infrastructure growth due to fiber expansion, vendor consolidation, a shift away from high-risk Chinese vendors, and investments focused on AI[5] - The Carrier Ethernet market is projected to reach $5 billion, with a CAGR of 3.6% between 2025 and 2028[21] - The PON OLT+ONT market is projected to reach $5 billion, with a CAGR of 6.8% between 2025 and 2028[21] - The Metro WDM market is projected to reach $600 million between 2025 and 2028[21] Q1 2025 Financial Performance - Q1 2025 revenue was $247.7 million[26, 33] - Non-GAAP gross margin for Q1 2025 was 42.5%[26, 41] - Q1 2025 non-GAAP operating margin was 3.9%[26, 41] - Operating cash flow for Q1 2025 was $43.2 million[26]