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]

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]

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]

Core Viewpoint - ADTRAN Holdings (ADTN) shares have increased by approximately 3.2% over the past month, which is underperforming compared to the S&P 500 index [1] Group 1: Recent Performance - The stock has shown a positive trend in the last month, but there are concerns about whether this will continue leading up to the next earnings release [1] - The company is currently facing a downward trend in estimates revisions over the past month [2]

Group 1 - Pomerantz LLP is investigating claims on behalf of investors of ADTRAN Holdings, Inc. regarding potential securities fraud or unlawful business practices by the company and its officers or directors [1] - On May 13, 2025, ADTRAN disclosed that its audited consolidated financial statements for the years ended December 31, 2024, and December 31, 2023, as well as its unaudited condensed financial statements for interim periods, should no longer be relied upon and would be restated [3] - Following the announcement of the financial restatement, ADTRAN's stock price fell by $0.41 per share, or 4.79%, closing at $8.15 per share on May 14, 2025 [3] Group 2 - The Pomerantz Firm is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of fighting for the rights of victims of securities fraud and corporate misconduct [4] - The firm has a track record of recovering multimillion-dollar damages awards on behalf of class members [4]

Core Viewpoint - The Schall Law Firm is investigating ADTRAN Holdings, Inc. for potential violations of securities laws related to misleading financial statements and disclosures [1][2]. Group 1: Investigation Details - The investigation centers on whether ADTRAN issued false or misleading statements and failed to disclose critical information to investors [2]. - ADTRAN's Audit Committee concluded that the financial results for the non-controlling interest and net loss were materially misstated in several quarterly reports for the periods ending March 31, 2023, June 30, 2023, and September 30, 2023 [2]. Group 2: Financial Reporting Issues - The financial statements from the Non-Reliance Periods should no longer be relied upon due to the identified misstatements [2].

Financial Performance - Revenue for Q1 2025 was $247.7 million, an increase of 10% year-over-year, exceeding the midpoint of the outlook[9] - Non-GAAP diluted earnings per share for Q1 2025 was $0.03, compared to a GAAP diluted loss per share of $0.13[9] - Total revenue for Q1 2025 was $247.744 million, a 9.3% increase from $226.173 million in Q1 2024[28] - Gross profit for Q1 2025 was $95.492 million, compared to $70.303 million in Q1 2024, reflecting a significant improvement[28] - Net loss attributable to ADTRAN Holdings, Inc. for Q1 2025 was $10.633 million, a decrease from a net loss of $326.153 million in Q1 2024[28] - Non-GAAP gross profit for Q1 2025 was $105.590 million, with a non-GAAP gross margin of 42.6%[31] - The company reported a net loss attributable to common shareholders of $10,636,000 in Q1 2025, an improvement from a loss of $47,885,000 in Q4 2024 and $326,153,000 in Q1 2024[54] - Non-GAAP net income attributable to ADTRAN Holdings, Inc. was $2,377,000 in Q1 2025, compared to a loss of $1,662,000 in Q4 2024 and a loss of $16,139,000 in Q1 2024[54] Cash Flow and Assets - Net cash provided by operating activities in Q1 2025 was $41.6 million, with cash and cash equivalents increasing to $101.3 million, up $23.8 million sequentially[9] - Cash and cash equivalents increased to $101.321 million as of March 31, 2025, up from $77.567 million at the end of 2024[30] - Total assets rose to $1.192 billion as of March 31, 2025, compared to $1.171 billion at the end of 2024[26] - The company reported a net cash provided by operating activities of $41.642 million for Q1 2025, compared to $36.598 million in Q1 2024[30] - For the year ended December 31, 2024, net cash provided by operating activities was reported as $103,039 thousand, after a revision of $(31) thousand[24] Cost and Expenses - GAAP gross margin was 38.5%, while non-GAAP gross margin reached 42.6%[9] - Research and development expenses for Q1 2025 were $48.859 million, down from $60.251 million in Q1 2024[28] - Operating expenses for Q1 2025 were $99,144,000, a decrease from $106,365,000 in Q4 2024 and $411,934,000 in Q1 2024[34] - Non-GAAP operating expenses for Q1 2025 were $95,499,000, compared to $94,018,000 in Q4 2024 and $102,741,000 in Q1 2024[34] - The company incurred acquisition-related expenses of $12,080,000 in Q1 2025, down from $15,274,000 in Q4 2024 and $15,058,000 in Q1 2024[54] Financial Statement Revisions - The company identified errors in previously issued financial statements, primarily affecting inventory and cost of revenue, but determined these were not material[16] - The company will revise its previously issued 2024 interim financial statements in future filings[19] - For the fiscal quarter ended March 31, 2024, the net loss attributable to ADTRAN Holdings, Inc. was $326,153 thousand, reflecting a revision of $1,603 thousand from the previously reported figure[22] - The total cost of revenue for the same quarter was revised to $155,870 thousand, an increase of $1,952 thousand from the previous report[22] - For the fiscal year ended December 31, 2024, the net loss attributable to ADTRAN Holdings, Inc. was $457,355 thousand, revised down by $6,483 thousand[23] - The total cost of revenue for the year ended December 31, 2024, was adjusted to $598,889 thousand, reflecting an increase of $6,483 thousand[23] - As of December 31, 2024, total assets were revised to $1,171,689 thousand, a decrease of $7,683 thousand from the previously reported figure[22] - The gross profit for the fiscal year ended December 31, 2024, was revised to $323,831 thousand, a decrease of $6,483 thousand from the previous report[23] - The operating loss for the fiscal quarter ended March 31, 2024, was revised to $(341,631) thousand, reflecting an increase of $1,952 thousand[22] - The loss per common share attributable to ADTRAN Holdings, Inc. for the fiscal year ended December 31, 2024, was revised to $(5.75), an increase of $(0.08) from the previously reported figure[23] Future Outlook - The company expects Q2 2025 revenue to be between $247.5 million and $262.5 million, with a non-GAAP operating margin forecasted between 0% and 4%[4] - The company will hold a conference call on May 8, 2025, to discuss its preliminary Q1 2025 results[6] Strategic Positioning - The company is well-positioned to capitalize on shifts in trade policy due to its globally diverse supply chain and strong customer relationships[3] Tax and Compliance - The company changed its method of calculating non-GAAP income taxes, applying a blended statutory tax rate of 0% for loss jurisdictions and 30% for other jurisdictions[60] - Prior periods have been adjusted to reflect the new tax calculation method, impacting the reported tax effect of non-GAAP net loss[60] - The tax effect of the adjustment to non-GAAP net loss was previously reported as $5.6 million for the three months ended March 31, 2024[60] Integration and Control - The company is focusing on expanding internal controls at Adtran Networks as part of its integration strategy[59] - The implementation of the DPTLA was completed as of December 31, 2024[59]

Core Viewpoint - ADTRAN Holdings, Inc. is under investigation for potential violations of federal securities laws and unlawful business practices, following the disclosure of issues with its financial statements [1][2]. Financial Disclosure - On May 13, 2025, ADTRAN announced that its audited consolidated financial statements for the years ended December 31, 2024, and December 31, 2023, as well as its unaudited condensed financial statements for interim periods in 2024, should no longer be relied upon and would be restated [2]. - The company identified at least one additional material weakness in its internal control over financial reporting as of December 31, 2024 [2]. - Following this announcement, ADTRAN's stock price decreased by $0.41, or 4.79%, closing at $8.15 per share on May 14, 2025 [2]. Legal Investigation - Bragar Eagel & Squire, P.C. is investigating potential claims on behalf of ADTRAN stockholders who may have suffered losses due to the company's financial disclosures [1][3].

Financial Performance - For the three months ended March 31, 2025, the company reported a revenue of $150 million, a decrease of 10% compared to $166.67 million in the same period of 2024[7] - The gross margin for the quarter was 35%, down from 40% in the previous year, indicating increased cost pressures[8] - Cash flow from operations for the quarter was $20 million, compared to $30 million in the same quarter last year, showing a decline of 33%[10] - The company has experienced significant fluctuations in revenue, which may continue in the future, impacting operating results[12] - Ongoing inflationary pressures have negatively impacted revenue and profitability, indicating a challenging economic environment[15] Operational Challenges - The company experienced a Days Sales Outstanding (DSO) of 45 days, an increase from 40 days year-over-year, reflecting challenges in collecting receivables[9] - The lengthy sales and approval process for new products has resulted in revenue fluctuations, potentially affecting future earnings[12] - The company expects gross margins to continue to vary over time, indicating potential challenges in maintaining sustainable margins[12] - The company relies heavily on sales to certain customers, and the loss of any major customer could significantly reduce revenue and net income[12] - The company faces risks related to managing inventory, including potential write-downs of excess or obsolete inventory[15] Strategic Initiatives - The company plans to launch two new products in Q3 2025, aiming to capture a 5% increase in market share within the next year[11] - Future guidance estimates revenue growth of 5% to 7% for the fiscal year 2025, contingent on market conditions and product launches[12] - The company is focusing on expanding its market presence in Europe, targeting a 15% increase in sales from that region by the end of 2025[13] - A strategic acquisition is planned to enhance technology capabilities, with an expected completion date in Q4 2025[14] - The company has allocated $10 million for research and development in 2025, a 20% increase from the previous year, to drive innovation[15] Economic and Market Risks - The management highlighted ongoing inflationary pressures that could impact future profitability and operational costs[16] - The company is exposed to adverse currency exchange rate fluctuations, which could harm financial results and cash flows[15] - Future issuances of additional equity securities could result in dilution of existing stockholders' equity ownership[19] - The company has recognized impairment charges related to goodwill and other intangible assets, which may recur in the future[15] - The company must continue to update and improve products to compete effectively in the telecommunications market[15]

Core Viewpoint - ADTRAN Holdings, Inc. is under investigation for potential securities fraud and unlawful business practices following the disclosure of issues with its financial statements [1][2]. Financial Disclosure - On May 13, 2025, ADTRAN announced that its audited consolidated financial statements for Fiscal 2024 and Fiscal 2023, as well as unaudited interim financial statements for specific periods in 2024, should no longer be relied upon and would be restated [2]. - The company identified at least one additional material weakness in its internal control over financial reporting as of December 31, 2024 [2]. Stock Market Reaction - Following the announcement of the financial statement issues, ADTRAN's stock price decreased by $0.41 per share, representing a 4.79% decline, closing at $8.15 per share on May 14, 2025 [2]. Legal Context - Pomerantz LLP is investigating claims on behalf of ADTRAN investors, indicating potential legal actions related to the company's financial disclosures [1].