Aviat Networks(AVNW) - 2025 Q3 - Quarterly Results

Third Quarter Highlights 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] - Grew GAAP operating income by 64% year-over-year[10] - Set a new record for quarterly Adjusted EBITDA[10] - Secured initial orders for ProVision Plus network management software from Pasolink customers, targeting a $50 million opportunity over five years[10] Detailed Financial Performance (Q3 & Nine Months FY2025) Q3 FY2025 saw revenue and operating income growth, while the nine-month period experienced revenue growth but declines in operating and net income 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 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 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 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 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 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] Balance Sheet Highlights 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 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 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 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 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 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 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% |