ADTRAN (ADTN) - 2024 Q4 - Annual Results

Revenue and Earnings - Revenue for Q4 2024 was $242.9 million, representing a 7$242.85 million, a 7.5% increase from $225.48 million in the same period of 2023[17] - The company expects Q1 2025 revenue to be in the range of$237.5 million to $252.5 million, with a non-GAAP operating margin forecasted between 0$0.58 and a non-GAAP diluted earnings per share of $0.00[8] - Net loss for the twelve months ended December 31, 2024, was$441.05 million, compared to a net loss of $259.34 million for the same period in 2023[19] - Non-GAAP net income (loss) attributable to ADTRAN Holdings, Inc. for the twelve months ended December 31, 2024, was$(31.272) million, compared to $(47.290) million for the previous year[55] - The company reported a loss per common share attributable to ADTRAN Holdings, Inc. of$(0.58) for the three months ended December 31, 2024[55] - Non-GAAP earnings (loss) per common share attributable to ADTRAN Holdings, Inc. was $0.00 for the three months ended December 31, 2024, compared to$(0.05) in the previous quarter[55] Margins and Profitability - GAAP gross margin was 37.6%, while non-GAAP gross margin was 42.0%[8] - Operating margin improved sequentially on both GAAP and non-GAAP bases, surpassing the mid-point of the outlook[8] - Gross profit for the three months ended December 31, 2024, was $91.23 million, up from$78.47 million in the same period of 2023, reflecting a gross margin of 37.6%[20] - Non-GAAP gross profit for the twelve months ended December 31, 2024, was $386.51 million, down from$451.30 million in 2023[20] - Operating loss for the twelve months ended December 31, 2024, was $417.10 million, significantly higher than the operating loss of$221.27 million in 2023[17] - Non-GAAP operating income for the twelve months ended December 31, 2024, was $3,228,000, compared to a loss of$9,867,000 for the same period in 2023, showing a significant turnaround[46] Expenses and Liabilities - Research and development expenses for the twelve months ended December 31, 2024, totaled $221.46 million, down from$258.31 million in 2023[17] - Operating expenses for the three months ended December 31, 2024, were $106,365,000, a decrease from$116,080,000 for the same period in 2023, representing a reduction of approximately 8.5%[23] - Non-GAAP operating expenses for the twelve months ended December 31, 2024, were $383,286,000, compared to$461,164,000 for the same period in 2023, indicating a decrease of about 16.9%[23] - The company incurred $62,959,000 in acquisition-related expenses for the twelve months ended December 31, 2024, compared to$107,267,000 for the same period in 2023, reflecting a decrease of approximately 41.3%[46] - Restructuring expenses for the twelve months ended December 31, 2024, totaled $44,681,000, down from$46,554,000 in the previous year, indicating a slight reduction[46] - Current liabilities increased from $278.1 million in 2023 to$292.5 million in 2024[15] Cash Flow and Assets - Cash flows from operating activities for the twelve months ended December 31, 2024, provided $103.07 million, compared to cash used of$45.60 million in 2023[19] - Free cash flow for the twelve months ended December 31, 2024, was $39.945 million, a significant improvement from$(88.725) million in the previous year[62] - Total assets decreased from $1,682.5 million in 2023 to$1,178.3 million in 2024[15] - Net cash provided by operating activities for the three months ended December 31, 2024, was $4.544 million, a decrease from$42.030 million in the previous quarter[62] Business Developments - Positive momentum was noted in the business, driven by higher service provider spending and a growing customer base[2] - The company finished 2024 with expectations of higher revenue in Q1 2025, overcoming typical seasonality[2] - The company plans to continue its Business Efficiency Program, which includes restructuring efforts and the discontinuation of certain product lines[21] - The company plans to close a facility in Greifswald, Germany, as part of its Business Efficiency Program, which was substantially completed in late 2024[26][43] - The restructuring program initiated after the business combination with Adtran Networks SE was substantially completed in late 2024, optimizing assets and business processes[26][43] Goodwill and Impairments - The company incurred goodwill impairment of $292.58 million for the twelve months ended December 31, 2024, compared to$37.87 million in 2023[19] - Goodwill impairment for the twelve months ended December 31, 2024, was $292,583,000, primarily due to a decrease in projected revenue growth rates and economic uncertainty[46][50]