Aviat Networks(US:AVNW)2021-08-26 02:20Financial Data and Key Metrics Changes - The company reported total revenues of $71.7 million for Q4 2021, an increase of 14.4% from $62.7 million in Q4 2020 [20] - Full fiscal year 2021 revenue was $274.9 million, up 15.2% from $238.6 million in fiscal year 2020 [20] - Adjusted EBITDA for Q4 2021 was $7.0 million, improving by $1.4 million from $5.5 million in Q4 2020, with adjusted EBITDA margins at 9.7% [9][25] - Full fiscal year 2021 adjusted EBITDA was $32.8 million, more than doubling from $13.5 million in fiscal year 2020, with adjusted EBITDA margins at 11.9% [8][25] Business Line Data and Key Metrics Changes - North American revenue for Q4 2021 was $46.4 million, a 21.4% increase from $38.2 million in Q4 2020, driven by Private Networks and Rural Broadband [20] - For the full fiscal year 2021, North American revenue was $183.1 million, up 20.7% from $151.7 million in fiscal year 2020 [21] - International revenue for Q4 2021 was $25.3 million, a 3.5% increase from $24.4 million in Q4 2020, while full fiscal year 2021 international revenue was $91.8 million, up 5.6% from $86.9 million [21] Market Data and Key Metrics Changes - The company added 150 new Rural Broadband accounts in fiscal year 2021, becoming the leading wireless backhaul provider in the USA for this segment [17] - The company is seeing positive activity in Asia Pacific, breaking into two new countries with new operator wins [14] - In Africa, the company has re-entered access networks of two major Tier 1 accounts, previously shut out, due to multi-band solutions [14] Company Strategy and Development Direction - The company is focused on three significant revenue drivers: 5G, Private Networks, and Rural Broadband, with a strong emphasis on differentiated products and services [18] - The WTM 4000 platform is highlighted as a key differentiator, enabling growth in 5G and Rural Broadband markets [10][15] - The company anticipates benefiting from government funding initiatives, including the $9 billion 5G Fund for Rural America and the $20 billion Rural Digital Opportunity Fund [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate supply chain challenges and expects to see improvements in the second half of fiscal year 2022 [27] - The company anticipates revenues for fiscal 2022 to be in the range of $283 million to $293 million, with adjusted EBITDA expected between $35 million and $38 million [26] - Management noted that the supply chain environment remains a key challenge, impacting gross margins and revenue potential [27] Other Important Information - The company reported a solid balance sheet with net cash of $47.9 million, increasing by $2.1 million sequentially from the last quarter [8][25] - The gross margin for Q4 2021 was 36.1%, up from 34.9% in Q4 2020, driven by higher volumes in Private Networks and improved international business [22] Q&A Session Summary Question: Can you provide insight into the product mix between mobile backhaul and Private Networks? - Management indicated that Private Networks constitute about two-thirds of the business, with some inflation impacting gross margins by approximately 100 basis points [29] Question: What is the impact of RDOF funding on Rural Broadband opportunities? - Management stated that RDOF funding effects will primarily be seen in calendar year 2022, with some exceptions where customers have borrowed against future funding [31] Question: How is the competitive landscape in Europe evolving? - Management noted that they are starting to gain share in Western Europe, particularly due to differentiation and the marginalization of competitors like Huawei [33] Question: What are the expectations for gross margins in the upcoming quarters? - Management expects gross margins to be lower in the first half of fiscal year 2022 due to supply chain challenges but hopes for improvement in the second half [37] Question: How is the supply chain impacting fiscal 2022 outlook? - Management acknowledged that supply chain constraints could affect revenue, but they are pursuing price increases to offset higher costs [42] Question: Can you elaborate on the recent wins in Africa? - Management indicated that the multi-band radio solutions are resonating well with African operators, contributing to growth [69]