Core Insights - Aviat Networks has announced the IRU600 indoor microwave radio, which supports the highest transmitter power in the industry at +40 dBm, enabling longer links, increased capacity, and reduced costs for both private and public network applications worldwide [1][2] Product Features - The IRU600 operates in the 4 to 11 GHz bands and provides up to 10W of output power, which is over five times more than alternative indoor radio solutions, allowing for the use of antennas that are 50% smaller and 75% lighter [2] - The compact 2RU (44mm) high rack mount unit includes two independent radios and an integrated antenna coupling unit (ACU), making it suitable for mission-critical applications [4] Market Position - The IRU600 has been the leading all-indoor radio in North America for the past 15 years, with over 100,000 units shipped to customers in public safety, utility, and service provider networks across the US and Canada [3] - The product's reliability and high transmitter power have made it a preferred choice for customers, helping them reduce tower-related costs [3] Compliance and Availability - The IRU600 is now available and compliant with ETSI standards, supporting international frequency bands [5]

Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in auditing with PricewaterhouseCoopers before transitioning to day trading nearly 20 years ago [2] - Successfully navigated significant market events such as the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2]

Company Overview - Aviat Networks (NASDAQ: AVNW) is a specialist in microwave backhaul, focusing on wireless transport solutions [1] - The company is well-positioned to benefit from several industry tailwinds, including increasing demand for rural broadband, the rollout of 5G technology, and the rise of private LTE/5G networks [1] Industry Trends - There is a surging demand for rural broadband, which is expected to drive growth for companies like Aviat Networks [1] - The ongoing rollout of 5G technology is contributing to increased demand for wireless transport solutions [1] - The rise of private LTE/5G networks is also creating additional opportunities for growth in the industry [1]

Company Performance - Aviat Networks, Inc. reported quarterly earnings of $0.88 per share, significantly exceeding the Zacks Consensus Estimate of $0.23 per share, and up from $0.73 per share a year ago, representing an earnings surprise of 282.61% [1] - The company posted revenues of $112.64 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 7.66% and showing a slight increase from $111.61 million year-over-year [2] - Over the last four quarters, Aviat Networks has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance - Aviat Networks shares have increased approximately 4.9% since the beginning of the year, contrasting with the S&P 500's decline of 3.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $123.18 million, and for the current fiscal year, it is $1.04 on revenues of $434.41 million [7] Industry Outlook - The Wireless Equipment industry, to which Aviat Networks belongs, is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $112.6 million, an increase of $1.8 million or 1.6% year over year [12] - Non-GAAP gross margin was 35.8%, up from 35.1% in the prior year [13] - Record adjusted EBITDA of $14.9 million, up 17% compared to the same period last year [5][15] - Non-GAAP EPS was $0.88, reflecting a 12.8% increase year over year [15] Business Line Data and Key Metrics Changes - North America revenue was $49.4 million, an increase of $5 million or 11% year over year, driven by growth in private networks [12] - International revenues decreased by $3.2 million or 5% to $63.2 million, attributed to a tough year-over-year comparison with APAC's record performance in the previous year [13] - Gross margins improved due to a favorable regional and software mix [14] Market Data and Key Metrics Changes - The mobile service provider market showed strong performance, with good software volumes contributing to improved gross margins [6] - The company maintained its share in the private networks segment in North America and expanded its sales funnel internationally [7] - No cancellations were reported from U.S. Federal government customers despite spending reduction efforts [8] Company Strategy and Development Direction - The company is focused on growing its scale and has seen success with its disciplined operating model [5] - Strategic discussions with U.S. headquartered Fortune 500 companies are ongoing, which may lead to increased business in the U.S. market [10] - The company is working to mitigate tariff impacts through inventory management and optimizing manufacturing locations [11] Management's Comments on Operating Environment and Future Outlook - Management believes the CapEx cycle for U.S. Tier one customers has bottomed out, with expectations for an uptick in demand in the coming quarters [24] - The company is maintaining its annual guidance and expects to meet current consensus estimates for revenue and EBITDA [16] - Management expressed confidence in the demand environment despite macroeconomic uncertainties [66] Other Important Information - The company has approximately $450 million in net operating losses, which will help minimize cash tax payments for the foreseeable future [15] - Operating expenses were managed effectively, remaining flat year over year due to disciplined cost management [49] Q&A Session Summary Question: What factors could swing guidance to the high end versus the low end? - Management indicated that potential pull-ins to avoid tariffs could positively impact results, while maintaining annual guidance [20] Question: What is the outlook for the U.S. Tier one market? - Management believes the CapEx cycle has bottomed and expects an uptick in demand in a couple of quarters [24] Question: Can gross margins continue to improve? - Management noted that while Q3 gross margins were strong, they do not expect further acceleration in Q4 due to macro uncertainties and tariff impacts [27] Question: What is the impact of tariffs on gross margins? - Management estimated a potential impact of 2% to 2.5% on COGS due to tariffs, but does not anticipate earnings leakage [36] Question: What is the outlook for North America and Tier one customers? - Management reported good private network business but noted they are currently between projects with U.S. Tier one customers [32][68] Question: What are the opportunities with large Tier one customers in MDUs? - Management highlighted the trend towards fixed wireless access in apartment buildings, which could drive future backhaul needs [42]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $112.6 million, an increase of $1.8 million or 1.6% year over year [12] - Non-GAAP gross margin was 35.8%, up from 35.1% in the prior year [13] - Record adjusted EBITDA of $14.9 million, up 17% compared to the previous year [4][15] - Non-GAAP EPS was $0.88, reflecting a 12.8% increase year over year [15] Business Line Data and Key Metrics Changes - Mobile service provider market performed well, with software volumes contributing to improved gross margins [5] - Initial sales of ProVision Plus software were reported during the quarter, indicating progress in servicing Tier one customers [6] - Private networks maintained demand share in North America and expanded internationally [6] Market Data and Key Metrics Changes - North America accounted for 44% of total revenues, with revenues of $49.4 million, an increase of 11% year over year [12] - International revenues were $63.2 million, a decrease of 5% year over year, primarily due to tough comparisons with a strong prior year in APAC [13] Company Strategy and Development Direction - The company is focused on maintaining a disciplined operating model and improving operational efficiencies [4][14] - Strategic discussions with U.S. Fortune 500 companies are ongoing, potentially leading to increased business in the U.S. market [10] - The company aims to remain margin neutral despite tariff impacts through productivity and sourcing adjustments [11] Management's Comments on Operating Environment and Future Outlook - Management believes the CapEx cycle for U.S. Tier one customers has bottomed out, with expectations for an uptick in demand in the coming quarters [25] - The company is cautious about the macro environment and tariffs, maintaining guidance for fiscal year 2025 within previously provided ranges [17][18] Other Important Information - The company has approximately $450 million in net operating losses, which will minimize cash tax payments for the foreseeable future [15] - Operating expenses were managed effectively, with a decrease year over year due to disciplined cost management [14][49] Q&A Session Summary Question: What factors could swing guidance to the high end versus the low end? - Management indicated that potential pull-ins to avoid tariffs could positively impact results, while maintaining annual guidance [20][22] Question: What is the current state of the U.S. Tier one market? - Management believes the CapEx cycle has likely bottomed and expects an uptick in demand in the next couple of quarters [25][26] Question: Can gross margins continue to improve? - Management noted that while Q3 gross margins were strong, they do not expect further acceleration in Q4 due to macro uncertainties and tariff impacts [28] Question: What is the outlook for North America? - The company is optimistic about private network demand and anticipates that the next U.S. Tier one project will kick in soon [34] Question: What is the impact of tariffs on the business? - Management provided an upper bound of 2% to 2.5% on COGS due to tariffs, but they do not anticipate any earnings leakage [35][76] Question: What is the status of strategic communications with U.S. customers? - Management indicated that discussions are ongoing and could lead to increased business opportunities in the U.S. market [51] Question: What is the outlook for the fourth quarter? - Management affirmed that they are guiding to consensus estimates, with expectations for a sequential build in revenues but not a significant increase [65][66]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported total revenues of $112.6 million for Q3 FY2025, but a net loss of $3.9 million for the nine months, driven by higher costs and expenses, with increased assets and liabilities, and negative operating cash flow Condensed Consolidated Statements of Operations (Unaudited) | (In thousands, except per share amounts) | Three Months Ended March 28, 2025 | Three Months Ended March 29, 2024 | Nine Months Ended March 28, 2025 | Nine Months Ended March 29, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $112,640 | $110,822 | $319,266 | $291,423 | | **Gross margin** | $39,296 | $36,071 | $99,970 | $103,593 | | **Operating income** | $9,294 | $5,667 | $1,696 | $13,946 | | **Net income (loss)** | $3,528 | $3,870 | $(3,856) | $9,211 | | **Diluted EPS** | $0.27 | $0.30 | $(0.30) | $0.75 | Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | March 28, 2025 | June 28, 2024 | | :--- | :--- | :--- | | **Total current assets** | $456,604 | $405,223 | | **Total assets** | $628,337 | $535,223 | | **Total current liabilities** | $282,094 | $218,857 | | **Total liabilities** | $372,221 | $279,338 | | **Total stockholders' equity** | $256,116 | $255,885 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Nine Months Ended March 28, 2025 | Nine Months Ended March 29, 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(4,790) | $22,229 | | **Net cash used in investing activities** | $(26,264) | $(34,953) | | **Net cash provided by financing activities** | $17,585 | $49,279 | | **Net (decrease) increase in cash** | $(13,255) | $35,958 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail the company's accounting policies, recent acquisitions, debt structure, and contingencies, including the acquisition of 4RF Limited and NEC's wireless transport business, amendments to the credit facility, and revisions to prior fiscal 2024 financial statements due to immaterial errors - On July 2, 2024, the Company acquired 4RF Limited for **$18.2 million** in an all-cash transaction, net of cash acquired. This acquisition expands Aviat's product offering in industrial wireless access markets, including Private LTE/5G[76](index=76&type=chunk)[120](index=120&type=chunk) - The acquisition of NEC's wireless transport business was completed on November 30, 2023, for consideration of **$32.2 million** in cash and **736,750 shares** of common stock valued at **$22.3 million**. An additional **$13.2 million** is estimated for post-closing adjustments[78](index=78&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - The company's credit facility was amended to provide a **$75.0 million** revolving credit facility and a **$75.0 million** Term Loan Facility. As of March 28, 2025, available credit under the Revolver was **$66.3 million**, and **$74.1 million** was outstanding under the Term Loan[51](index=51&type=chunk)[53](index=53&type=chunk)[158](index=158&type=chunk) - The company identified and corrected errors in its fiscal 2024 quarterly financial statements related to revenue recognition and contract cost estimates. The impacts were determined not to be material, and prior period statements have been revised for comparability[28](index=28&type=chunk)[106](index=106&type=chunk)[124](index=124&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes **9.6%** revenue growth for the first nine months of fiscal 2025 to the NEC acquisition and international volumes, despite a gross margin decline to **31.3%** and increased operating expenses, while maintaining solid liquidity of **$49.4 million** cash and **$66.3 million** available credit [Results of Operations](index=31&type=section&id=Results%20of%20Operations) For the nine months ended March 28, 2025, total revenue increased **9.6%** to **$319.3 million** driven by acquisitions and international growth, while gross margin declined to **31.3%** and operating expenses rose, leading to a sharp drop in operating income and a net loss Revenue by Region (Nine Months Ended) | (In thousands) | March 28, 2025 | March 29, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | North America | $149,589 | $149,868 | $(279) | (0.2)% | | Africa and the Middle East | $38,210 | $35,848 | $2,362 | 6.6% | | Europe | $23,376 | $17,378 | $5,998 | 34.5% | | Latin America and Asia Pacific | $108,091 | $88,329 | $19,762 | 22.4% | | **Total revenue** | **$319,266** | **$291,423** | **$27,843** | **9.6%** | Gross Margin Analysis (Nine Months Ended) | (In thousands, except percentages) | March 28, 2025 | March 29, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $319,266 | $291,423 | $27,843 | 9.6% | | Gross margin | $99,970 | $103,593 | $(3,623) | (3.5)% | | **Gross margin %** | **31.3%** | **35.5%** | | | - For the first nine months of fiscal 2025, R&D expenses increased by **$2.9 million** (**11.4%**) primarily due to development activity related to the NEC Transaction[133](index=133&type=chunk) - For the first nine months of fiscal 2025, S&A expenses increased by **$6.4 million** (**10.3%**) primarily due to merger and acquisition expenses and additional costs from the NEC and 4RF transactions[134](index=134&type=chunk) [Liquidity, Capital Resources, and Financial Strategies](index=35&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Strategies) As of March 28, 2025, the company's liquidity included **$49.4 million** cash and **$66.3 million** available credit, with **74%** of cash held outside the U.S., while operating cash flow turned negative by **$4.8 million** due to increased working capital and lower earnings, though liquidity is deemed sufficient for the next 12 months - As of March 28, 2025, total cash and cash equivalents were **$49.4 million**, with **$36.8 million** (**74%**) held outside the United States[142](index=142&type=chunk) - Net cash used in operating activities was **$4.8 million** for the first nine months of fiscal 2025, a decrease of **$27.0 million** from the **$22.2 million** provided by operating activities in the prior year, primarily due to increases in working capital and decreased earnings[143](index=143&type=chunk) - The company believes existing cash, available borrowings under its Credit Facility, and future cash collections will be sufficient to provide for its anticipated requirements for at least the next 12 months[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates and interest rates, managing foreign currency risk through derivatives when needed, and estimating a **$0.5 million** impact on annual interest expense from a hypothetical **10%** change in interest rates on its variable-rate borrowings - The company is exposed to foreign currency risks as it conducts business globally in numerous currencies. The cumulative translation adjustment decreased stockholders' equity by **$19.5 million** as of March 28, 2025[152](index=152&type=chunk)[154](index=154&type=chunk) - Interest rate risk exposure comes from borrowings under the Credit Facility. As of March 28, 2025, the company had **$74.1 million** outstanding under its Term Loan with a variable interest rate. A **10%** change in interest rates is estimated to impact annual interest expense by **$0.5 million**[155](index=155&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 28, 2025, due to un-remediated material weaknesses in internal control over financial reporting, with ongoing remediation efforts including training and control redesign - Management concluded that disclosure controls and procedures were not effective as of March 28, 2025, due to material weaknesses in internal control over financial reporting that are not yet fully remediated[161](index=161&type=chunk)[164](index=164&type=chunk) - Remediation actions are underway, including providing training, redesigning controls over revenue recognition and journal entries, and implementing a formal monitoring program[162](index=162&type=chunk) - The material weaknesses will not be considered remediated until the associated controls operate effectively for a sufficient period of time and are confirmed through management testing[163](index=163&type=chunk) [Part II. Other Information](index=39&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal claims and litigation in the normal course of business, including an enforcement action in India, though management believes none will have a material adverse effect on its financial position - For details on legal proceedings, the report refers to Note 12, which discusses disputes and an enforcement action by the Indian Department of Revenue against the company's Indian subsidiary[94](index=94&type=chunk)[168](index=168&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for fiscal year 2024, directing investors to that report for a full discussion - No material changes have occurred from the risk factors described in the company's fiscal 2024 Annual Report on Form 10-K[169](index=169&type=chunk)[170](index=170&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a stock repurchase program authorized for up to **$10.0 million**, under which **5,200 shares** were repurchased for approximately **$0.1 million** during Q3 FY2025, with **$6.3 million** remaining available Stock Repurchase Activity (Q3 FY2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet be Purchased (in thousands) | | :--- | :--- | :--- | :--- | | Feb 22, 2025 — Mar 28, 2025 | 5,200 | $19.12 | $6,330 | | **Total** | **5,200** | | **$6,330** | - As of March 28, 2025, **$6.3 million** remains available under the company's **$10.0 million** stock repurchase program[171](index=171&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) On March 7, 2025, General Counsel Erin Boase adopted a new Rule 10b5-1 trading plan to sell up to **11,770 shares**, effective until March 7, 2026, with no other officers or directors adopting, modifying, or terminating such plans during the quarter - On March 7, 2025, General Counsel Erin Boase adopted a Rule 10b5-1 trading plan to sell up to **11,770 shares**, effective until March 7, 2026[175](index=175&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files, and incorporates by reference the company's Amended and Restated Certificate of Incorporation and Bylaws - Key exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[178](index=178&type=chunk)

[Third Quarter Highlights](index=1&type=section&id=Third%20Quarter%20Highlights) Aviat Networks achieved its 19th consecutive quarter of trailing twelve-month revenue growth, record Adjusted EBITDA, and a 64% increase in GAAP operating income Q3 FY2025 Key Financial Metrics | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | **Revenue** | $112.6M | - | | **Gross Margin** | **34.9%** | **35.8%** | | **Operating Income** | $9.3M | $13.0M | | **Net Income** | $3.5M | $11.3M | | **Diluted EPS** | $0.27 | $0.88 | | **Adjusted EBITDA** | - | $14.9M | - Achieved the **19th consecutive quarter** of trailing twelve-month revenue growth[10](index=10&type=chunk) - Grew **GAAP operating income by 64%** year-over-year[10](index=10&type=chunk) - Set a new record for **quarterly Adjusted EBITDA**[10](index=10&type=chunk) - Secured initial orders for ProVision Plus network management software from Pasolink customers, targeting a **$50 million opportunity** over five years[10](index=10&type=chunk) [Detailed Financial Performance (Q3 & Nine Months FY2025)](index=1&type=section&id=Detailed%20Financial%20Performance) Q3 FY2025 saw revenue and operating income growth, while the nine-month period experienced revenue growth but declines in operating and net income [Revenues](index=1&type=section&id=Revenues) Q3 revenue increased 1.6% to $112.6 million, driven by North America's growth offsetting international declines, with nine-month revenue up 9.6% Revenue Performance (YoY) | Period | Total Revenue | YoY Change | North America Revenue | YoY Change | International Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Q3 FY2025** | $112.6M | **+1.6%** | $49.4M | **+11.3%** | $63.2M | **-4.8%** | | **Nine Months FY2025** | $319.3M | **+9.6%** | - | - | - | - | [Gross Margins](index=1&type=section&id=Gross%20Margins) Q3 FY2025 GAAP gross margin improved to 34.9% and non-GAAP to 35.8% due to favorable mix, contrasting with a nine-month GAAP gross margin decrease to 31.3% Gross Margin Comparison | Period | GAAP Gross Margin | YoY Change (bps) | Non-GAAP Gross Margin | YoY Change (bps) | | :--- | :--- | :--- | :--- | :--- | | **Q3 FY2025** | **34.9%** | **+240** | **35.8%** | **+70** | | **Nine Months FY2025** | **31.3%** | **-420** | **32.1%** | **-450** | [Operating Expenses](index=1&type=section&id=Operating%20Expenses) Q3 GAAP operating expenses remained flat at $30.0 million, while nine-month GAAP operating expenses increased 9.6% and non-GAAP rose 16.5% Operating Expense Comparison (GAAP) | Period | GAAP Operating Expenses | YoY Change | | :--- | :--- | :--- | | **Q3 FY2025** | $30.0M | **-1.3%** | | **Nine Months FY2025** | $98.3M | **+9.6%** | [Operating Income](index=2&type=section&id=Operating%20Income) Q3 GAAP operating income grew 64% to $9.3 million, while nine-month GAAP operating income fell sharply to $1.7 million Operating Income Comparison (GAAP vs. Non-GAAP) | Period | GAAP Operating Income | YoY Change | Non-GAAP Operating Income | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Q3 FY2025** | $9.3M | **+63.5%** | $13.0M | **+14.0%** | | **Nine Months FY2025** | $1.7M | **-87.8%** | $16.1M | **-50.5%** | [Net Income / Net Income Per Share](index=2&type=section&id=Net%20Income%20%2F%20Net%20Income%20Per%20Share) Q3 FY2025 GAAP net income decreased to $3.5 million, while non-GAAP net income increased to $11.3 million, and the nine-month period reported a GAAP net loss of $3.9 million Net Income and EPS Comparison (GAAP vs. Non-GAAP) | Period | GAAP Net Income | GAAP Diluted EPS | Non-GAAP Net Income | Non-GAAP Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | **Q3 FY2025** | $3.5M | $0.27 | $11.3M | $0.88 | | **Q3 FY2024** | $3.9M | $0.30 | $10.0M | $0.78 | | **Nine Months FY2025** | ($3.9M) | ($0.30) | $10.6M | $0.83 | | **Nine Months FY2024** | $9.2M | $0.75 | $30.0M | $2.43 | [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Q3 FY2025 Adjusted EBITDA reached a record $14.9 million, marking a 17.3% increase from $12.7 million YoY - **Q3 FY2025 Adjusted EBITDA** increased by **$2.2 million** to **$14.9 million**, compared to **$12.7 million** in **Q3 FY2024**[16](index=16&type=chunk) [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) As of March 28, 2025, cash decreased to $49.4 million, total debt increased to $73.9 million, resulting in a net debt position of $24.5 million Balance Sheet Key Items Comparison | Account | March 28, 2025 | June 28, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $49.4M | $64.6M | | **Total debt** | $73.9M | $48.3M (derived) | | **Net debt** | $24.5M | ($16.3M) (net cash) | [Fiscal 2025 Full Year Outlook](index=2&type=section&id=Fiscal%202025%20Full%20Year%20Outlook) Aviat Networks reaffirmed its FY2025 guidance, projecting total revenue between $430 million and $470 million, and Adjusted EBITDA between $30 million and $40 million FY2025 Guidance | Metric | Guidance Range | | :--- | :--- | | **Full Year Revenue** | $430M - $470M | | **Full Year Adjusted EBITDA** | $30.0M - $40.0M | [Financial Statements and Supplemental Data](index=4&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) This section provides detailed unaudited financial statements, including Statements of Operations, Balance Sheets, Non-GAAP reconciliations, and revenue by geography [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The statement details revenue, costs, and expenses, showing Q3 FY2025 net income of $3.5 million, down YoY, and a nine-month net loss of $3.9 million Statement of Operations Summary (in thousands) | Line Item | Q3 FY2025 | Q3 FY2024 | Nine Months FY2025 | Nine Months FY2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $112,640 | $110,822 | $319,266 | $291,423 | | **Gross margin** | $39,296 | $36,071 | $99,970 | $103,593 | | **Operating income** | $9,294 | $5,667 | $1,696 | $13,946 | | **Net income (loss)** | $3,528 | $3,870 | $(3,856) | $9,211 | | **Diluted EPS** | $0.27 | $0.30 | $(0.30) | $0.75 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet as of March 28, 2025, shows total assets of $628.3 million and total liabilities of $372.2 million, with key increases in accounts receivable, inventories, and total debt Balance Sheet Summary (in thousands) | Account | March 28, 2025 | June 28, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $49,429 | $64,622 | | **Total current assets** | $456,604 | $405,223 | | **Total assets** | $628,337 | $535,223 | | **Total current liabilities** | $282,094 | $218,857 | | **Total liabilities** | $372,221 | $279,338 | | **Total stockholders' equity** | $256,116 | $255,885 | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) This section reconciles GAAP to non-GAAP measures, excluding items like share-based compensation and M&A expenses, showing Q3 GAAP net income of $3.5 million reconciled to non-GAAP net income of $11.3 million and Adjusted EBITDA of $14.9 million Q3 FY2025 GAAP Net Income to Adjusted EBITDA Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | **GAAP net income** | **$3,528** | | Depreciation and amortization | $1,830 | | Interest expense, net | $1,557 | | Other expense, net | $3,068 | | Share-based compensation | $1,988 | | Merger and acquisition and other expenses | $1,590 | | Restructuring charges | $177 | | Provision for income taxes | $1,141 | | **Adjusted EBITDA** | **$14,879** | [Supplemental Schedule of Revenue by Geographical Area](index=8&type=section&id=SUPPLEMENTAL%20SCHEDULE%20OF%20REVENUE%20BY%20GEOGRAPHICAL%20AREA) Q3 FY2025 North America revenue grew 11.3% to $49.4 million, while International revenue decreased 4.8% to $63.2 million, with nine-month International revenue showing strong growth of 19.9% Revenue by Geography (in thousands) | Region | Q3 FY2025 | Q3 FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | **North America** | $49,402 | $44,400 | **+11.3%** | | **International** | $63,238 | $66,422 | **-4.8%** | | *Africa and the Middle East* | $15,086 | $11,401 | **+32.3%** | | *Europe* | $9,429 | $6,549 | **+44.0%** | | *Latin America and Asia Pacific* | $38,723 | $48,472 | **-20.1%** | | **Total revenue** | **$112,640** | **$110,822** | **+1.6%** |

Company Overview - Aviat Networks is a leading provider of wireless transport and access solutions[4] - The company's last twelve months (LTM) revenue is $436 million[7] - Aviat Networks serves private networks (61%) and mobile networks (39%)[8] - The company has over 3,000 customers worldwide[10] Financial Performance (Q3 Fiscal Year 2025) - Revenue reached $112.6 million, a 1.6% increase compared to the same period last year[58] - Adjusted EBITDA was $14.9 million, up 17.3% compared to the same period last year[58] - Non-GAAP gross margin was 35.8%[55] Market Opportunity - Aviat Networks addresses an $11 billion total addressable market (TAM)[15] - The private LTE/5G market is projected to reach $8 billion by 2027[35] - The microwave radio market for global 5G transport is expected to grow at a 39% compound annual growth rate (CAGR) through calendar year 2025[35] Growth and Strategy - Aviat Networks has experienced a 13% revenue CAGR since calendar year 2019[15] - The company's operating model drives continuous improvement and successful acquisitions[15] - Aviat Networks estimates the USA rural broadband segment to be a ~$420 million TAM[45]

Core Insights - Aviat Networks reported total revenues of $112.6 million for the fiscal 2025 third quarter, reflecting a year-over-year increase of 1.6% from $110.8 million in the same quarter of fiscal 2024 [2] - The company achieved a GAAP operating income of $9.3 million for the third quarter, up from $5.7 million in the prior year, driven by higher gross margin dollars and stable operating expenses [8] - Non-GAAP net income for the third quarter was $11.3 million, or $0.88 per diluted share, compared to $10.0 million, or $0.78 per diluted share, in the same quarter of the previous year [11] Revenue Performance - Total revenues for the nine months ended March 28, 2025, increased by 9.6% to $319.3 million, compared to $291.4 million in the same period of fiscal 2024 [3] - North America revenue rose by 11.3% to $49.4 million, attributed to strong performance in private networks projects, while international revenue decreased by 4.8% to $63.2 million due to timing issues with capital expenditures from mobile network operators [2] Gross Margins - The GAAP gross margin for the fiscal 2025 third quarter was reported at 34.9%, an increase from 32.5% in the same quarter of fiscal 2024, while the non-GAAP gross margin improved to 35.8% from 35.1% [4] - For the nine months ended March 28, 2025, GAAP gross margin decreased to 31.3% from 35.5% in the same period of fiscal 2024 [5] Operating Expenses - GAAP total operating expenses for the third quarter were $30.0 million, a slight decrease from $30.4 million in the prior year, while non-GAAP operating expenses were $27.2 million, down from $27.4 million [6] - For the nine months ended March 28, 2025, GAAP total operating expenses increased to $98.3 million from $89.6 million in the same period of fiscal 2024, reflecting a 9.6% rise [7] Income and Earnings - The company reported a GAAP net income of $3.5 million for the third quarter, down from $3.9 million in the same quarter of fiscal 2024 [11] - For the nine months ended March 28, 2025, the company experienced a GAAP net loss of $(3.9) million, compared to a net income of $9.2 million in the same period of fiscal 2024 [13] Adjusted EBITDA - Adjusted EBITDA for the fiscal 2025 third quarter was $14.9 million, an increase from $12.7 million in the same quarter of fiscal 2024 [14] Balance Sheet Highlights - As of March 28, 2025, the company reported cash and cash equivalents of $49.4 million, down from $64.6 million as of June 28, 2024, with total debt increasing to $73.9 million [15] Full Year Outlook - The company maintained its fiscal 2025 full-year guidance, projecting revenues between $430 million and $470 million and Adjusted EBITDA between $30 million and $40 million [22]