Aviat Networks(AVNW) - 2025 Q4 - Annual Results

Fiscal 2025 Fourth Quarter and Twelve Months Financial Results Overview This section provides an overview of Aviat Networks' financial performance for the fourth quarter and full fiscal year 2025, highlighting key revenue, income, and EBITDA figures Fourth Quarter Highlights Aviat Networks reported a strong fiscal 2025 fourth quarter, achieving significant GAAP net income growth and a third consecutive record for quarterly Adjusted EBITDA, despite a slight decrease in total revenue - Grew quarterly GAAP Net Income to $5.2 million, an increase of $3.6 million or 236% versus the same period a year ago[9] - Achieved the third consecutive record for quarterly Adjusted EBITDA with $15.1 million at 13.0% margin[9] Fiscal 2025 Fourth Quarter Key Financials (in millions) | Metric | GAAP Result | Non-GAAP Result | | :-------------------------- | :---------- | :-------------- | | Total Revenues | $115.3 million | N/A | | Gross Margin | 34.2% | 34.7% | | Operating Expenses | $30.6 million | $27.1 million | | Operating Income | $8.9 million | $12.9 million | | Net Income | $5.2 million | $10.7 million | | Net Income per diluted share | $0.40 | $0.83 | | Adjusted EBITDA | N/A | $15.1 million | | Cash and Cash Equivalents | $59.7 million | N/A | | Net Debt | $27.9 million | N/A | Full Year Financial Highlights For the full fiscal year 2025, Aviat Networks completed its fifth consecutive year of revenue growth, reaching $434.6 million, although GAAP net income and Adjusted EBITDA saw declines compared to the prior year - Completed fifth consecutive fiscal year of revenue growth[9] Fiscal 2025 Full Year Key Financials (in millions) | Metric | GAAP Result | Non-GAAP Result | | :-------------------------- | :---------- | :-------------- | | Total Revenues | $434.6 million | N/A | | Gross Margin | 32.1% | 32.8% | | Operating Expenses | $128.9 million | $113.5 million | | Operating Income | $10.6 million | $29.0 million | | Net Income | $1.3 million | $21.4 million | | Net Income per diluted share | $0.10 | $1.67 | | Adjusted EBITDA | N/A | $37.1 million | Detailed Financial Performance This section provides an in-depth analysis of Aviat Networks' revenues, gross margins, operating expenses, operating income, income taxes, net income, and Adjusted EBITDA for both the fourth quarter and full fiscal year 2025 Revenues Total revenues for Q4 FY25 slightly decreased by 1.1% year-over-year, primarily due to a decline in international revenue, offset by growth in North America's private network business. For the full fiscal year 2025, total revenue increased by 6.5%, driven by strong international growth Fourth Quarter Revenues Fourth quarter revenues saw a slight overall decrease, with North America showing growth in private networks while international revenues declined due to project timing Fourth Quarter Revenues (in millions) | Metric | FY25 Q4 | FY24 Q4 | Change (Millions) | Change (%) | | :---------------- | :------ | :------ | :---------------- | :--------- | | Total Revenues | $115.3 | $116.7 | $(1.3) | (1.1)% | | North America | $58.0 | $56.2 | $1.8 | 3.2% | | International | $57.3 | $60.5 | $(3.1) | (5.2)% | - North America revenue growth was due to growth in private network business[4] - International revenue decrease was due to timing of certain mobile network projects[4] Twelve Months Revenues Full year revenues increased by 6.5%, primarily driven by strong international growth, with North America also contributing to the overall increase Twelve Months Revenues (in millions) | Metric | FY25 | FY24 | Change (Millions) | Change (%) | | :---------------- | :----- | :----- | :---------------- | :--------- | | Total Revenues | $434.6 | $408.1 | $26.5 | 6.5% | | North America | $207.6 | $206.1 | $1.5 | 0.7% | | International | $227.0 | $202.0 | $25.0 | 12.4% | Gross Margins Both GAAP and non-GAAP gross margins decreased in Q4 FY25 and for the full fiscal year 2025 compared to the prior year, primarily due to fluctuations in project and regional customer mix Fourth Quarter Gross Margins Fourth quarter GAAP and non-GAAP gross margins both declined, influenced by changes in project and regional customer mix Fourth Quarter Gross Margins | Metric | FY25 Q4 | FY24 Q4 | Change (bps) | | :---------------- | :------ | :------ | :----------- | | GAAP Gross Margin | 34.2% | 35.3% | (110) | | Non-GAAP Gross Margin | 34.7% | 35.9% | (120) | - Gross margin fluctuations were driven by project and regional customer mix[6] Twelve Months Gross Margins Full year GAAP and non-GAAP gross margins both decreased compared to the prior fiscal year Twelve Months Gross Margins | Metric | FY25 | FY24 | | :---------------- | :----- | :----- | | GAAP Gross Margin | 32.1% | 35.5% | | Non-GAAP Gross Margin | 32.8% | 36.4% | Operating Expenses Total GAAP and non-GAAP operating expenses decreased significantly in Q4 FY25, reflecting a 14.3% and 13.2% reduction respectively. However, for the full fiscal year 2025, both GAAP and non-GAAP operating expenses increased by 2.8% and 7.7% respectively Fourth Quarter Operating Expenses Fourth quarter GAAP and non-GAAP operating expenses both saw significant year-over-year decreases Fourth Quarter Operating Expenses (in millions) | Metric | FY25 Q4 | FY24 Q4 | Change (Millions) | Change (%) | | :----------------------- | :------ | :------ | :---------------- | :--------- | | GAAP Operating Expenses | $30.6 | $35.7 | $(5.1) | (14.3)% | | Non-GAAP Operating Expenses | $27.1 | $31.3 | $(4.1) | (13.2)% | Twelve Months Operating Expenses Full year GAAP and non-GAAP operating expenses increased compared to the prior fiscal year Twelve Months Operating Expenses (in millions) | Metric | FY25 | FY24 | Change (Millions) | Change (%) | | :----------------------- | :----- | :----- | :---------------- | :--------- | | GAAP Operating Expenses | $128.9 | $125.3 | $3.5 | 2.8% | | Non-GAAP Operating Expenses | $113.5 | $105.4 | $8.1 | 7.7% | Operating Income Aviat Networks saw a substantial increase in operating income for Q4 FY25, with GAAP operating income up 62.8% and non-GAAP up 21.9%. Conversely, for the full fiscal year 2025, operating income decreased significantly, primarily due to merger and acquisition related expenses Fourth Quarter Operating Income Fourth quarter GAAP and non-GAAP operating income both increased significantly year-over-year Fourth Quarter Operating Income (in millions) | Metric | FY25 Q4 | FY24 Q4 | Change (Millions) | Change (%) | | :------------------- | :------ | :------ | :---------------- | :--------- | | GAAP Operating Income | $8.9 | $5.5 | $3.4 | 62.8% | | Non-GAAP Operating Income | $12.9 | $10.6 | $2.3 | 21.9% | Twelve Months Operating Income Full year GAAP and non-GAAP operating income decreased substantially, primarily due to merger and acquisition related expenses Twelve Months Operating Income (in millions) | Metric | FY25 | FY24 | Change (Millions) | Change (%) | | :------------------- | :----- | :----- | :---------------- | :--------- | | GAAP Operating Income | $10.6 | $19.4 | $(8.8) | (45.5)% | | Non-GAAP Operating Income | $29.0 | $43.1 | $(14.1) | (32.7)% | - Operating income decreased primarily due to merger and acquisition related expenses[13] Income Taxes GAAP income tax expense increased in Q4 FY25 compared to the prior year, while for the full fiscal year 2025, it decreased significantly Fourth Quarter Income Taxes Fourth quarter GAAP income tax expense increased year-over-year Fourth Quarter Income Tax Expense (in millions) | Metric | FY25 Q4 | FY24 Q4 | | :------------------- | :------ | :------ | | GAAP Income Tax Expense | $5.0 | $3.1 | Twelve Months Income Taxes Full year GAAP income tax expense decreased significantly compared to the prior fiscal year Twelve Months Income Tax Expense (in millions) | Metric | FY25 | FY24 | | :------------------- | :----- | :----- | | GAAP Income Tax Expense | $2.2 | $6.1 | Net Income / Net Income Per Share Aviat Networks reported a substantial increase in GAAP net income and EPS for Q4 FY25, alongside growth in non-GAAP net income and EPS. However, for the full fiscal year 2025, both GAAP and non-GAAP net income and EPS saw significant declines compared to the prior year Fourth Quarter Net Income / Net Income Per Share Fourth quarter GAAP and non-GAAP net income and diluted EPS all increased significantly year-over-year Fourth Quarter Net Income / EPS | Metric | FY25 Q4 | FY24 Q4 | | :----------------------- | :------ | :------ | | GAAP Net Income (Millions) | $5.2 | $1.5 | | GAAP Diluted EPS | $0.40 | $0.12 | | Non-GAAP Net Income (Millions) | $10.7 | $9.2 | | Non-GAAP Diluted EPS | $0.83 | $0.72 | Twelve Months Net Income / Net Income Per Share Full year GAAP and non-GAAP net income and diluted EPS decreased substantially compared to the prior fiscal year Twelve Months Net Income / EPS | Metric | FY25 | FY24 | | :----------------------- | :----- | :----- | | GAAP Net Income (Millions) | $1.3 | $10.8 | | GAAP Diluted EPS | $0.10 | $0.86 | | Non-GAAP Net Income (Millions) | $21.4 | $39.2 | | Non-GAAP Diluted EPS | $1.67 | $3.15 | Adjusted EBITDA Adjusted EBITDA increased significantly in Q4 FY25, reaching a record high, but decreased for the full fiscal year 2025 compared to the prior year Fourth Quarter Adjusted EBITDA Fourth quarter Adjusted EBITDA increased significantly year-over-year, setting a new quarterly record Fourth Quarter Adjusted EBITDA (in millions) | Metric | FY25 Q4 | FY24 Q4 | | :-------------- | :------ | :------ | | Adjusted EBITDA | $15.1 | $11.9 | Twelve Months Adjusted EBITDA Full year Adjusted EBITDA decreased compared to the prior fiscal year Twelve Months Adjusted EBITDA (in millions) | Metric | FY25 | FY24 | | :-------------- | :----- | :----- | | Adjusted EBITDA | $37.1 | $48.1 | Balance Sheet Highlights This section summarizes key balance sheet figures, including cash and cash equivalents and total debt, as of the end of fiscal year 2025 Balance Sheet Summary As of June 27, 2025, Aviat Networks reported an increase in cash and cash equivalents compared to the previous quarter, with total debt standing at $87.6 million Balance Sheet Highlights (in millions) | Metric | As of June 27, 2025 | As of March 28, 2025 | | :---------------------- | :------------------ | :------------------- | | Cash and Cash Equivalents | $59.7 | $49.4 | | Total Debt | $87.6 | N/A | Fiscal 2026 Full Year Guidance This section provides Aviat Networks' financial outlook and projections for the full fiscal year 2026 FY26 Guidance Overview Aviat Networks provided its full-year guidance for fiscal 2026, projecting revenue between $440 million and $460 million, and Adjusted EBITDA between $45.0 million and $55.0 million Fiscal 2026 Full Year Guidance (in millions) | Metric | Guidance Range | | :---------------- | :------------- | | Full year Revenue | $440 - $460 | | Full year Adjusted EBITDA | $45.0 - $55.0 | Corporate Information & Events This section details corporate communications, upcoming investor engagements, company background, and investor relations contact information Conference Call Details Aviat Networks hosted a conference call to discuss its financial results, with key executives participating and providing access details for investors - Aviat Networks hosted a conference call on September 10, 2025, at 4:15 p.m. ET to discuss its fiscal 2025 fourth quarter financial results[19] - Participating on the call were Peter Smith (President and CEO), Michael Connaway (Sr. Vice President and CFO), and Andrew Fredrickson (Vice President, Corporate Finance and Interim CFO)[19] - Interested parties could access the call live via webcast through Aviat Network's Investor Relations website or participate via telephone by registering online[20] Upcoming Events Aviat Networks announced its participation in an upcoming investor conference - Aviat will participate in the 9th Annual Lake Street Capital Markets Best Ideas Growth Conference on September 11, 2025, in New York, NY[21] About Aviat Networks Aviat Networks is a leading global provider of wireless transport and access solutions, serving a diverse customer base with over 70 years of innovation and comprehensive support services - Aviat Networks, Inc. is the leading expert in wireless transport and access solutions[23] - The company has sold over one million systems into 170 countries worldwide, serving communications service providers and private network operators (state/local government, utility, federal government, and defense organizations)[23] - Aviat provides a comprehensive suite of localized professional and support services and is headquartered in Austin, Texas[23] Investor Relations Contact Contact information for investor relations inquiries is provided - Investor Relations contact: Andrew Fredrickson, Email: investorinfo@aviatnet.com[27] Forward-Looking Statements and Risk Factors This section provides a disclaimer regarding forward-looking statements and outlines key risk factors that could materially impact future financial results Forward-Looking Statements Disclaimer This section outlines the nature of forward-looking statements within the report, emphasizing that actual results may differ materially due to various important factors and risks, including those detailed in the company's Form 10-K - The report includes forward-looking statements regarding Aviat's outlook, business conditions, new product solutions, future orders, profitability, acquisitions, and financial projections[24] - Forward-looking statements are based on current beliefs, expectations, and assumptions of senior management, but involve risks and uncertainties that could cause actual results to differ materially[24] - Important factors include disruptions from acquisitions (4RF and NEC), integration challenges, geopolitical conflicts, price and margin erosion, supply chain constraints, inflation, and global economic weakness. Investors should refer to the 'Risk Factors' section in Aviat's Form 10-K for more information[25][26] Condensed Consolidated Financial Statements (GAAP) This section presents the unaudited GAAP condensed consolidated statements of operations and balance sheets for the specified periods Condensed Consolidated Statements of Operations This section presents the unaudited GAAP condensed consolidated statements of operations for the three and twelve months ended June 27, 2025, and June 28, 2024 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | Product sales | $67,405 | $78,795 | $287,657 | $274,205 | | Services | $47,935 | $37,865 | $146,949 | $133,878 | | Total revenues | $115,340 | $116,660 | $434,606 | $408,083 | | Total cost of revenues | $75,874 | $75,521 | $295,170 | $263,351 | | Gross margin | $39,466 | $41,139 | $139,436 | $144,732 | | Total operating expenses | $30,587 | $35,684 | $128,861 | $125,331 | | Operating income | $8,879 | $5,455 | $10,575 | $19,401 | | Income before income taxes | $10,179 | $4,609 | $3,576 | $16,906 | | Provision for income taxes | $4,982 | $3,060 | $2,235 | $6,146 | | Net income | $5,197 | $1,549 | $1,341 | $10,760 | | Diluted Net income per share | $0.40 | $0.12 | $0.10 | $0.86 | Condensed Consolidated Balance Sheets This section presents the unaudited GAAP condensed consolidated balance sheets as of June 27, 2025, and June 28, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | As of June 27, 2025 | As of June 28, 2024 | | :-------------------------- | :------------------ | :------------------ | | Cash and cash equivalents | $59,690 | $64,622 | | Accounts receivable, net | $180,321 | $158,013 | | Inventories | $83,979 | $62,267 | | Total current assets | $463,575 | $405,223 | | Goodwill | $19,655 | $8,217 | | Total assets | $633,296 | $535,223 | | Accounts payable | $148,093 | $92,854 | | Current portion of long-term debt | $18,624 | $2,396 | | Total current liabilities | $282,196 | $218,857 | | Long-term debt | $68,966 | $45,954 | | Total liabilities | $370,113 | $279,338 | | Total stockholders' equity | $263,183 | $255,885 | | Total liabilities and stockholders' equity | $633,296 | $535,223 | Reconciliation of Non-GAAP Financial Measures This section provides detailed reconciliations of non-GAAP financial measures to their most comparable GAAP equivalents, offering additional insights into operational performance Non-GAAP Measures Overview This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, including gross margin, operating expenses, operating income, net income, and Adjusted EBITDA. These non-GAAP measures are presented to offer investors additional insights into period-over-period operating results, excluding certain non-recurring or non-cash items - Non-GAAP financial measures are provided to supplement GAAP consolidated financial statements, offering information useful to investors in understanding period-over-period operating results separate from items with disproportionate impacts[33] - Adjustments typically exclude share-based compensation, merger and acquisition related expenses, and restructuring charges[33][37] - Reconciliations of forward-looking Adjusted EBITDA guidance are not provided due to the high variability and difficulty in making accurate forecasts for items like merger and acquisition costs and share-based compensation[34] Non-GAAP Gross Margin Reconciliation Reconciliation of GAAP gross margin to non-GAAP gross margin, adjusting for share-based compensation and merger and acquisition related expenses Non-GAAP Gross Margin Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP gross margin | $39,466 (34.2%) | $41,139 (35.3%) | $139,436 (32.1%) | $144,732 (35.5%) | | Share-based compensation | $19 | $96 | $233 | $406 | | Merger and acquisition related expense | $595 | $650 | $2,890 | $3,409 | | Non-GAAP gross margin | $40,080 (34.7%) | $41,885 (35.9%) | $142,559 (32.8%) | $148,547 (36.4%) | Non-GAAP Operating Expenses Reconciliation Reconciliation of GAAP operating expenses to non-GAAP operating expenses, adjusting for share-based compensation, merger and acquisition related expenses, and restructuring charges Non-GAAP Operating Expenses Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP operating expense | $30,587 (26.5%) | $35,684 (30.6%) | $128,861 (29.7%) | $125,331 (30.7%) | | Share-based compensation | $(1,422) | $(1,700) | $(6,834) | $(6,935) | | Merger and acquisition and other expenses | $(6) | $(1,070) | $(4,896) | $(9,121) | | Restructuring (charges) recovery | $(2,019) | $(1,640) | $(3,611) | $(3,867) | | Non-GAAP operating expense | $27,140 (23.5%) | $31,274 (26.8%) | $113,520 (26.1%) | $105,408 (25.8%) | Non-GAAP Operating Income Reconciliation Reconciliation of GAAP operating income to non-GAAP operating income, adjusting for share-based compensation, merger and acquisition related expenses, and restructuring charges Non-GAAP Operating Income Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP operating income | $8,879 (7.7%) | $5,455 (4.7%) | $10,575 (2.4%) | $19,401 (4.8%) | | Share-based compensation | $1,441 | $1,796 | $7,067 | $7,341 | | Merger and acquisition related expense | $601 | $1,720 | $7,786 | $12,530 | | Restructuring charges | $2,019 | $1,640 | $3,611 | $3,867 | | Non-GAAP operating income | $12,940 (11.2%) | $10,611 (9.1%) | $29,039 (6.7%) | $43,139 (10.6%) | Non-GAAP Net Income Reconciliation Reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS, adjusting for various non-recurring items and pro forma tax rates Non-GAAP Net Income Reconciliation (in thousands, except per share amounts) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP net income | $5,197 (4.5%) | $1,549 (1.3%) | $1,341 (0.3%) | $10,760 (2.6%) | | Share-based compensation | $1,441 | $1,796 | $7,067 | $7,341 | | Merger and acquisition related expense | $601 | $1,720 | $7,786 | $12,530 | | Restructuring charges | $2,019 | $1,640 | $3,611 | $3,867 | | Other (income) expense, net | $(3,106) | $(70) | $941 | $158 | | Adjustment to reflect pro forma tax rate | $4,582 | $2,560 | $635 | $4,546 | | Non-GAAP net income | $10,734 (9.3%) | $9,195 (7.9%) | $21,381 (4.9%) | $39,202 (9.6%) | | GAAP Diluted EPS | $0.40 | $0.12 | $0.10 | $0.86 | | Non-GAAP Diluted EPS | $0.83 | $0.72 | $1.67 | $3.15 | Adjusted EBITDA Reconciliation Reconciliation of GAAP net income to Adjusted EBITDA, by adding back depreciation, amortization, interest, taxes, and non-GAAP pre-tax adjustments Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP net income | $5,197 (4.5%) | $1,549 (1.3%) | $1,341 (0.3%) | $10,760 (2.6%) | | Depreciation and amortization | $2,110 | $1,265 | $8,045 | $4,993 | | Interest expense, net | $1,806 | $916 | $6,058 | $2,337 | | Other (income) expense, net | $(3,106) | $(70) | $941 | $158 | | Share-based compensation | $1,441 | $1,796 | $7,067 | $7,341 | | Merger and acquisition related expense | $601 | $1,720 | $7,786 | $12,530 | | Restructuring charges | $2,019 | $1,640 | $3,611 | $3,867 | | Provision for income taxes | $4,982 | $3,060 | $2,235 | $6,146 | | Adjusted EBITDA | $15,050 (13.0%) | $11,876 (10.2%) | $37,084 (8.5%) | $48,132 (11.8%) | Supplemental Schedule of Revenue by Geographical Area This section provides a detailed breakdown of Aviat Networks' revenues segmented by geographical region for both quarterly and annual periods Revenue by Geographical Area This chapter provides a breakdown of Aviat Networks' revenues by geographical area for both the three and twelve months ended June 27, 2025, and June 28, 2024, showing contributions from North America and various international regions Supplemental Schedule of Revenue by Geographical Area (in thousands) | Region | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | North America | $58,017 | $56,194 | $207,606 | $206,073 | | Africa and the Middle East | $11,218 | $13,063 | $49,428 | $48,884 | | Europe | $8,337 | $7,231 | $31,713 | $24,608 | | Latin America and Asia Pacific | $37,768 | $40,172 | $145,859 | $128,518 | | Total international | $57,323 | $60,466 | $227,000 | $202,010 | | Total revenue | $115,340 | $116,660 | $434,606 | $408,083 |