Aviat Networks(US:AVNW)2026-02-03 21:17Revenue Performance - Total revenue for the second quarter of fiscal 2026 decreased by $6.7 million, or 5.7%, compared to the same period in fiscal 2025, while total revenue for the first six months increased by $12.2 million, or 5.9%[106] - Revenue in North America decreased by $5.1 million, or 8.7%, in the second quarter, but increased by $5.4 million, or 5.4%, in the first six months of fiscal 2026 compared to fiscal 2025[106] - Revenue in Africa and the Middle East increased by $2.0 million, or 15.4%, in the second quarter and by $4.3 million, or 18.6%, in the first six months of fiscal 2026 compared to fiscal 2025[107] - Revenue in Europe increased by $3.1 million, or 36.9%, in the second quarter and by $5.0 million, or 36.1%, in the first six months of fiscal 2026 compared to fiscal 2025[108] - Revenue in Latin America and Asia Pacific decreased by $6.7 million, or 17.1%, in the second quarter and by $2.5 million, or 3.6%, in the first six months of fiscal 2026 compared to fiscal 2025[109] Gross Margin and Expenses - Gross margin for the second quarter of fiscal 2026 decreased by $4.8 million, or 11.7%, compared to the same quarter in fiscal 2025, while gross margin for the first six months increased by $11.1 million, or 18.3%[111] - Research and development expenses decreased by $3.8 million, or 37.3%, in the second quarter and by $7.1 million, or 34.5%, in the first six months of fiscal 2026 compared to fiscal 2025[112] - Selling and administrative expenses increased by $1.1 million (5.2%) for Q2 fiscal 2026 compared to Q2 fiscal 2025, primarily due to higher administrative costs[113] Interest and Other Financial Metrics - Interest expense, net increased by $0.3 million (20.8%) for Q2 fiscal 2026 and by $0.9 million (34.3%) for the first six months, mainly due to incremental Term Loan borrowings[114] - Other (income) expense, net decreased by $3.0 million (1,120.1%) for Q2 fiscal 2026 and by $2.8 million (280.9%) for the first six months, primarily due to foreign exchange rate movements[115] - Income before income taxes increased by $2.0 million (32.7%) for Q2 fiscal 2026 compared to Q2 fiscal 2025, while the provision for income taxes increased by $0.8 million (47.9%) in the same period[116] Cash Flow and Financing - As of December 26, 2025, the Company had total cash and cash equivalents of $86.5 million, with $33.3 million held in the U.S. and $53.2 million (62%) held outside the U.S.[118] - Net cash provided by operating activities was $12.2 million for the first six months of fiscal 2026, a $18.6 million increase compared to $(6.4) million in the prior year[119] - Net cash used in investing activities was $3.2 million for the first six months of fiscal 2026, a decrease of $20.3 million compared to $23.5 million in the prior year due to the absence of acquisition payments[120] - Net cash provided by financing activities was $17.1 million for the first six months of fiscal 2026, a decrease of $1.5 million compared to $18.6 million in the prior year[121] - The Company had $91.0 million outstanding under its Term Loan as of December 26, 2025, with $20.0 million borrowed and $2.1 million repaid during the first six months of fiscal 2026[124] - A 10% change in interest rates is estimated to have a $0.6 million impact on annual interest expense on the Company's outstanding long-term debt as of December 26, 2025[135] Strategic Initiatives - The company supported 5G and LTE deployments, with a focus on increasing capacity for subscriber growth in both North America and international markets[105] - The company operates an e-commerce platform to provide low-cost services and fast delivery to mobile operators and private network customers[105] - The company aims to mitigate the impact of U.S. tariffs on foreign imports while facing ongoing pricing pressures from competition and macroeconomic conditions[105]