ADTRAN Reports Wider-Than-Expected Q3 Loss on Lower Revenues

Core Viewpoint - ADTRAN Holdings Inc. reported disappointing third-quarter 2024 results, with both adjusted earnings and revenues falling short of Zacks Consensus Estimates [1] Financial Performance - The company experienced a year-over-year revenue decline to $227.7 million from $272.3 million, primarily due to weak demand trends in the Network Solutions business [4] - On a GAAP basis, ADTRAN incurred a net loss of $31.2 million or 36 cents per share, an improvement from a net loss of $78.2 million or $1.00 per share in the same quarter last year [3] - Non-GAAP net loss was $6.7 million or 5 cents per share, compared to a loss of $13.9 million or 18 cents per share in the prior-year quarter, which was wider than the Zacks Consensus Estimate of 2 cents [3] Revenue Breakdown - Network Solutions revenues fell to $181.5 million from $228.6 million year-over-year, impacted by macroeconomic challenges and inventory adjustments [5] - Services and Support revenues increased to $46.2 million from $43.8 million in the prior-year quarter [5] Operational Metrics - Gross margin on a GAAP basis improved to 37.4% from 27.3% in the year-ago quarter [6] - Operating loss decreased to $24 million from $89.3 million in the previous year [6] Cash Flow and Liquidity - In the first nine months of 2024, ADTRAN generated $98.5 million in cash from operating activities, compared to a cash utilization of $29.3 million in the prior-year period [7] - As of September 30, 2024, the company had $88.5 million in cash and cash equivalents [7] Future Outlook - For the fourth quarter of 2024, management expects net sales to be in the range of $230-$245 million, with non-GAAP operating margin projected between 0% and 4% [8]