Financial Data and Key Metrics Changes - Total revenues for Q2 2026 were $111.5 million, a decrease from $118.2 million in Q2 2025, but a 5.9% increase in total revenues for the first half of fiscal 2026 compared to the prior six-month period [11][12] - Adjusted EBITDA for Q2 was $11.3 million, representing 10.1% of revenues, with a significant improvement of $13.2 million in adjusted EBITDA for the first half of fiscal 2026 compared to the same period last year [14][15] - Non-GAAP EPS for Q2 was $0.54, while GAAP EPS was $0.44, both showing an increase of over a dollar compared to the previous year [4][14] Business Line Data and Key Metrics Changes - In private networks, Aviat remains a leader, with a new product launch (Aprisa LTE 5G router) targeting a market worth approximately $1.6 billion, and initial orders have been received [5][6] - The mobile networks segment is expanding, with ongoing 5G upgrade cycles and initial purchase orders for a multi-dwelling unit solution, indicating a new market segment for Aviat [6][7] Market Data and Key Metrics Changes - North America accounted for 47.5% of total revenues in Q2, amounting to $52.9 million, while international revenues made up 52.5% at $58.6 million [12] - Gross margins for Q2 were 32.4% on a GAAP basis and 32.9% on a non-GAAP basis, down from 34.6% and 35.3% respectively in the prior year [12][13] Company Strategy and Development Direction - The company is focused on capturing demand in private networks and expanding its market share in mobile networks, with a strong emphasis on organic growth opportunities [5][17] - Fiscal 2026 guidance remains unchanged, with expected full-year revenues between $440 million and $460 million and adjusted EBITDA between $45 million and $55 million [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the BEAD program, anticipating a positive impact in fiscal 2027, while remaining cautious about including it in current guidance [8][9] - The company is encouraged by the strong bookings and market leadership, positioning itself well for the second half of fiscal 2026 [17] Other Important Information - The company has over $450 million in net operating losses, which will minimize cash tax payments for the foreseeable future [14] - Cash generated from operations was $23.9 million in Q2, contributing to a net debt position improvement to $18.9 million [15][16] Q&A Session Summary Question: Outlook for the second half of the year - Management discussed organic opportunities, including BEAD and the MDU project, indicating that while BEAD is not included in guidance, there is growing confidence in its potential impact [21][24] Question: Details on MDU opportunity and guidance - The MDU project is still in early stages, with minimal impact on guidance, while the 5G router is also not expected to contribute significantly yet [27][28] Question: Gross margin pressures and cash flow - Management clarified that gross margin fluctuations are due to product mix rather than pressure on services, and they anticipate continued strong cash performance [30][32] Question: Update on backlog and bookings - Management confirmed that Q2 had the highest bookings in 10 years, with a book-to-bill ratio over one, indicating strong demand across service providers and private networks [38][39] Question: Strength in Europe - The success in Europe is attributed to a new EMEA leader driving focus on private networks, resulting in improved performance [51]