ADTRAN (ADTN) Reports Wider Q2 Loss on Lower Revenues Y/Y

Core Viewpoint - ADTRAN Holdings Inc. reported disappointing results for Q2 2024, with a wider net loss than expected, although revenues met estimates due to customer growth in fiber networking solutions in the U.S. and Europe [1]. Financial Performance - The GAAP net loss for Q2 was $49.9 million, or a loss of 63 cents per share, compared to a loss of $39.1 million, or 50 cents per share, in the same quarter last year. The non-GAAP net loss was $18.8 million, or 24 cents per share, which was worse than the Zacks Consensus Estimate of a 10-cent loss [2]. - Total revenues decreased to $226 million from $327.4 million year-over-year, primarily due to weak demand in the network solutions sector, but aligned with consensus estimates. Revenues from Network Solutions were $179.2 million, down from $283 million a year ago, while Services and Support revenues increased to $46.8 million from $44.4 million [4]. Cost and Profitability - Total cost of sales fell from $234.8 million to $144.4 million. GAAP gross profit was $81.6 million, down from $92.6 million in the prior year. The operating loss for the quarter was $38.3 million, an improvement from a loss of $44.6 million in the previous year [5]. - Non-GAAP gross margin improved to 41.9% from 38.6% year-over-year, while the non-GAAP operating margin decreased to 0.7% from 1.1% [5]. Cash Flow and Liquidity - In the first half of 2024, ADTRAN generated $56.5 million in cash from operating activities, compared to a cash utilization of $36.2 million in the same period last year. As of June 30, 2024, the company had $111.2 million in cash and cash equivalents, with a deferred compensation liability of $30.6 million [6]. Future Outlook - For Q3 2024, management anticipates revenues between $215 million and $235 million, with a non-GAAP operating margin expected to range from -1% to +3% [7].