ADTRAN Holdings, Inc. reports preliminary first quarter 2025 financial results
-
Revenue:
$247.7 million , higher by 10% year-over-year, and above the mid-point of outlook. - Gross margin: GAAP gross margin: 38.5%; non-GAAP gross margin: 42.6%.
- Operating margin: at the high end of outlook.
-
GAAP diluted loss per share of
$0.13 ; non-GAAP diluted earnings per share$0.03 . -
Net cash provided by operating activities of
$41.6 million . -
Cash and cash equivalents of
$101.3 million , an increase of$23.8 million sequentially.
Adtran Holdings’ Chairman and Chief Executive Officer
The information contained in this press release is preliminary. Investors should refer to our Quarterly Report on Form 10-Q for the period ended
Business outlook1
For the second quarter of 2025, the Company expects revenue to be within a range of
1 Non-GAAP operating margin (which is calculated as non-GAAP operating income (loss) divided by revenue) is a non-GAAP financial measure. The Company has provided second quarter 2025 guidance with regard to non-GAAP operating margin. This measure excludes from the corresponding GAAP financial measure the effect of adjustments as described below. The Company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot predict and quantify without unreasonable effort all of the adjustments that may occur during the period due to the difficulty of predicting the timing and amounts of various items within a reasonable range. In particular, non-GAAP operating margin excludes certain items, such as acquisition related expenses, amortizations and adjustments, stock-based compensation expense, restructuring expenses, integration expenses, deferred compensation adjustments, and goodwill impairment that the Company is unable to quantitatively predict. Depending on the materiality of these items, they could have a significant impact on the Company's GAAP financial results.
Conference call
The Company will hold a conference call to discuss its preliminary first quarter 2025 results on
An online replay of the Company’s conference call, as well as the transcript of the call, will be available on the Investor Relations site https://investors.adtran.com/ shortly following the call and will remain available for at least 12 months. For more information, visit investors.adtran.com or email investor.relations@adtran.com.
Upcoming conference schedule
About Adtran
Cautionary note regarding forward-looking statements
Statements contained in this press release and the accompanying earnings call which are not historical facts, such as those relating to expectations regarding future revenue and future non-GAAP operating margin; future service provider spending; future profitability, and growth, including customer acquisition and booking trends, as well as future end market growth; future market trends and customer inventory levels; future operational leverage and cash generation; and ADTRAN Holdings’ strategy and outlook, outlook and financial guidance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can also generally be identified by the use of words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could” and similar expressions. In addition,
Additionally, the financial measures presented herein are preliminary estimates, remain subject to our internal controls and procedures, and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between the Company’s actual results and the preliminary financial information set forth herein may be material.
Explanation of use of non-GAAP financial measures
Set forth in the tables below are reconciliations of gross profit, gross margin, operating expenses, operating loss, other expense, net loss inclusive of the non-controlling interest, net income attributable to the non-controlling interest, net loss attributable to the Company, and loss per share - basic and diluted, attributable to the Company, and net cash provided by operating activities, in each case as reported based on generally accepted accounting principles in
Published by
www.adtran.com
Revision of Previously Issued Consolidated Financial Statements
Following the first quarter of 2025, the Company identified errors in its previously issued consolidated financial statements primarily impacting inventory and cost of revenue. The Company has evaluated the errors and determined that the related impacts were not material to the previously issued consolidated financial statements for any prior period. A summary description of the errors in the Company's Preliminary Condensed Consolidated Financial Statements for the periods ended
a) For the year ended
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended
b) Pursuant to the terms of the DPLTA, each Adtran Networks shareholder (other than the Company) is entitled to receive from us an Annual Recurring Compensation payment of €0.52 per share. The Company erroneously accrued this liability every quarter at €0.59 per share, overstating the associated accrual, the net income attributable to non-controlling interest and the net loss attributable to
c) For the period ended
The Company will be revising its previously issued 2024 interim financial statements and 2024 annual financial statements in connection with its future filings on Form 10-Q for the periods ended
The following tables reflect the expected impact of the revisions to the specific line items presented in the Company's previously reported (i) balance sheets as of
Revised Line Items in the Condensed Consolidated Balance Sheet as of
|
|
|
|
|
||||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
Revision |
|
As Revised |
||||||
|
Inventory, net |
|
|
$ |
322,147 |
|
|
$ |
(3,460 |
) |
(a) |
$ |
318,687 |
|
|
Total Current Assets |
|
|
$ |
696,958 |
|
|
$ |
(3,460 |
) |
|
$ |
693,498 |
|
|
Total Assets |
|
|
$ |
1,327,906 |
|
|
$ |
(3,460 |
) |
|
$ |
1,324,446 |
|
|
Accrued Expenses and Other Liabilities |
|
|
$ |
36,404 |
|
|
$ |
(1,403 |
) |
(b) |
$ |
35,001 |
|
|
Total Current Liabilities |
|
|
$ |
282,746 |
|
|
$ |
(1,403 |
) |
|
$ |
281,343 |
|
|
Other non-current liabilities |
|
|
$ |
35,375 |
|
|
$ |
(350 |
) |
(b) |
$ |
35,025 |
|
|
Total Liabilities |
|
|
$ |
620,488 |
|
|
$ |
(1,753 |
) |
|
$ |
618,735 |
|
|
Redeemable Non-Controlling Interest |
|
|
$ |
441,635 |
|
|
$ |
511 |
|
(c) |
$ |
442,146 |
|
|
Accumulated Other Comprehensive Income |
|
|
$ |
29,656 |
|
|
$ |
19 |
|
(a)(b) |
$ |
29,675 |
|
|
Retained Deficit |
|
|
$ |
(558,363 |
) |
|
$ |
(2,237 |
) |
(a)(b)
|
$ |
(560,600 |
) |
|
Total Equity |
|
|
$ |
265,783 |
|
|
$ |
(2,218 |
) |
|
$ |
263,565 |
|
|
Total Liabilities, Redeemable Non-Controlling Interest and Equity |
|
|
$ |
1,327,906 |
|
|
$ |
(3,460 |
) |
|
$ |
1,324,446 |
|
Revised Line Items in the Condensed Consolidated Statement of Loss and Condensed Consolidated Statement of Comprehensive Loss for the fiscal quarter ended
|
|
|
|
For the Three Months Ended |
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Cost of Revenue - Network Solutions |
|
|
$ |
126,326 |
|
|
$ |
1,952 |
|
(a) |
$ |
128,278 |
|
|
Total Cost of Revenue |
|
|
$ |
153,918 |
|
|
$ |
1,952 |
|
|
$ |
155,870 |
|
|
Gross Profit |
|
|
$ |
72,255 |
|
|
$ |
(1,952 |
) |
|
$ |
70,303 |
|
|
Operating Loss |
|
|
$ |
(339,679 |
) |
|
$ |
(1,952 |
) |
|
$ |
(341,631 |
) |
|
Loss before Income Taxes |
|
|
$ |
(340,317 |
) |
|
$ |
(1,952 |
) |
|
$ |
(342,269 |
) |
|
Net Loss |
|
|
$ |
(321,670 |
) |
|
$ |
(1,952 |
) |
|
$ |
(323,622 |
) |
|
Less: Net Income attributable to non-controlling interest |
|
|
$ |
2,880 |
|
|
$ |
(349 |
) |
(b) |
$ |
2,531 |
|
|
Net Loss attributable to |
|
|
$ |
(324,550 |
) |
|
$ |
(1,603 |
) |
|
$ |
(326,153 |
) |
|
Loss per common share attributable to |
|
|
$ |
(4.12 |
) |
|
$ |
(0.02 |
) |
|
$ |
(4.14 |
) |
|
Loss per common share attributable to |
|
|
$ |
(4.12 |
) |
|
$ |
(0.02 |
) |
|
$ |
(4.14 |
) |
|
Net Loss |
|
|
$ |
(321,670 |
) |
|
$ |
(1,952 |
) |
|
$ |
(323,622 |
) |
|
Foreign currency translation loss |
|
|
$ |
(17,745 |
) |
|
$ |
15 |
|
(a)(b) |
$ |
(17,730 |
) |
|
Other Comprehensive Loss, net of tax |
|
|
$ |
(17,805 |
) |
|
$ |
15 |
|
|
$ |
(17,790 |
) |
|
Comprehensive Loss, net of tax |
|
|
$ |
(339,475 |
) |
|
$ |
(1,937 |
) |
|
$ |
(341,412 |
) |
|
Less: Comprehensive Income attributable to non-controlling interest, net of tax |
|
|
$ |
2,880 |
|
|
$ |
(349 |
) |
(b) |
$ |
2,531 |
|
|
Comprehensive Loss attributable to |
|
|
$ |
(342,355 |
) |
|
$ |
(1,588 |
) |
|
$ |
(343,943 |
) |
Revised Line Items in the Condensed Consolidated Statement of Loss for the fiscal quarter ended
|
|
|
|
For the Three Months Ended |
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Cost of Revenue - Network Solutions |
|
|
$ |
134,184 |
|
|
$ |
1,974 |
|
(a) |
$ |
136,158 |
|
|
Total Cost of Revenue |
|
|
$ |
151,619 |
|
|
$ |
1,974 |
|
|
$ |
153,593 |
|
|
Gross Profit |
|
|
$ |
91,233 |
|
|
$ |
(1,974 |
) |
|
$ |
89,259 |
|
|
Operating Loss |
|
|
$ |
(15,132 |
) |
|
$ |
(1,974 |
) |
|
$ |
(17,106 |
) |
|
Loss before Income Taxes |
|
|
$ |
(18,604 |
) |
|
$ |
(1,974 |
) |
|
$ |
(20,578 |
) |
|
Net Loss |
|
|
$ |
(43,509 |
) |
|
$ |
(1,974 |
) |
|
$ |
(45,483 |
) |
|
Net Loss attributable to |
|
|
$ |
(45,916 |
) |
|
$ |
(1,974 |
) |
|
$ |
(47,890 |
) |
|
Loss per common share attributable to |
|
|
$ |
(0.58 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.61 |
) |
|
Loss per common share attributable to |
|
|
$ |
(0.58 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.61 |
) |
Revised Line Items in the Consolidated Balance Sheet as of
|
|
|
|
|
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Inventory, net |
|
|
$ |
269,337 |
|
|
$ |
(7,683 |
) |
(a) |
$ |
261,654 |
|
|
Total Current Assets |
|
|
$ |
610,605 |
|
|
$ |
(7,683 |
) |
|
$ |
602,922 |
|
|
Total Assets |
|
|
$ |
1,179,372 |
|
|
$ |
(7,683 |
) |
|
$ |
1,171,689 |
|
|
Accumulated Other Comprehensive Income |
|
|
$ |
10,897 |
|
|
$ |
322 |
|
(a) |
$ |
11,219 |
|
|
Retained Deficit |
|
|
$ |
(680,993 |
) |
|
$ |
(8,005 |
) |
(a) |
$ |
(688,998 |
) |
|
Total Equity |
|
|
$ |
134,414 |
|
|
$ |
(7,683 |
) |
|
$ |
126,731 |
|
|
Total Liabilities, Redeemable Non-Controlling Interest and Equity |
|
|
$ |
1,179,372 |
|
|
$ |
(7,683 |
) |
|
$ |
1,171,689 |
|
Revised Line Items in the Consolidated Statement of Loss and Consolidated Statement of Comprehensive Loss for the fiscal year ended
|
|
|
|
For the Year Ended |
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Cost of Revenue - Network Solutions |
|
|
$ |
511,070 |
|
|
$ |
6,483 |
|
(a) |
$ |
517,553 |
|
|
Total Cost of Revenue |
|
|
$ |
592,406 |
|
|
$ |
6,483 |
|
|
$ |
598,889 |
|
|
Gross Profit |
|
|
$ |
330,314 |
|
|
$ |
(6,483 |
) |
|
$ |
323,831 |
|
|
Operating Loss |
|
|
$ |
(417,101 |
) |
|
$ |
(6,483 |
) |
|
$ |
(423,584 |
) |
|
Loss before Income Taxes |
|
|
$ |
(432,263 |
) |
|
$ |
(6,483 |
) |
|
$ |
(438,746 |
) |
|
Net Loss |
|
|
$ |
(441,048 |
) |
|
$ |
(6,483 |
) |
|
$ |
(447,531 |
) |
|
Net Loss attributable to |
|
|
$ |
(450,872 |
) |
|
$ |
(6,483 |
) |
|
$ |
(457,355 |
) |
|
Loss per common share attributable to |
|
|
$ |
(5.67 |
) |
|
$ |
(0.08 |
) |
|
$ |
(5.75 |
) |
|
Loss per common share attributable to |
|
|
$ |
(5.67 |
) |
|
$ |
(0.08 |
) |
|
$ |
(5.75 |
) |
|
Net Loss |
|
|
$ |
(441,048 |
) |
|
$ |
(6,483 |
) |
|
$ |
(447,531 |
) |
|
Foreign currency translation loss |
|
|
$ |
(38,047 |
) |
|
$ |
322 |
|
(a) |
$ |
(37,725 |
) |
|
Other Comprehensive Loss, net of tax |
|
|
$ |
(36,568 |
) |
|
$ |
322 |
|
|
$ |
(36,246 |
) |
|
Comprehensive Loss, net of tax |
|
|
$ |
(477,616 |
) |
|
$ |
(6,161 |
) |
|
$ |
(483,777 |
) |
|
Comprehensive Loss attributable to |
|
|
$ |
(487,440 |
) |
|
$ |
(8,015 |
) |
|
$ |
(495,455 |
) |
Revised Line Items in the Condensed Consolidated Statement of Changes in Stockholders Equity as of
|
|
|
|
Retained Deficit |
|
|
Accumulated Other Comprehensive Income |
|
||||||||||||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
||||||
|
Balance as of |
|
|
$ |
(243,908 |
) |
|
$ |
9,481 |
|
(b) |
$ |
(234,427 |
) |
|
$ |
47,461 |
|
|
$ |
4 |
|
(b) |
$ |
47,465 |
|
|
Net loss |
|
|
$ |
(321,670 |
) |
|
$ |
(1,952 |
) |
(a) |
$ |
(323,622 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Annual recurring compensation earned |
|
|
$ |
(2,880 |
) |
|
$ |
349 |
|
(b) |
$ |
(2,531 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Other comprehensive loss, net of tax |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(17,805 |
) |
|
$ |
15 |
|
(a)
|
$ |
(17,790 |
) |
|
Foreign currency remeasurement of redeemable non-controlling interest |
|
|
$ |
10,115 |
|
|
$ |
(10,115 |
) |
(c) |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Balance as of |
|
|
$ |
(558,363 |
) |
|
$ |
(2,237 |
) |
|
$ |
(560,600 |
) |
|
$ |
29,656 |
|
|
$ |
19 |
|
|
$ |
29,675 |
|
Revised Line Items in the Consolidated Statement of Changes in Stockholders Equity as of
|
|
|
|
Retained Deficit |
|
|
Accumulated Other Comprehensive Income |
|
||||||||||||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
||||||
|
Balance as of |
|
|
$ |
(232,905 |
) |
|
$ |
(1,522 |
) |
(a) |
$ |
(234,427 |
) |
|
$ |
47,465 |
|
|
$ |
- |
|
|
$ |
47,465 |
|
|
Net loss |
|
|
$ |
(441,048 |
) |
|
$ |
(6,483 |
) |
(a) |
$ |
(447,531 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
Other comprehensive income, net of tax |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(36,568 |
) |
|
$ |
322 |
|
(a) |
$ |
(36,246 |
) |
|
Balance as of |
|
|
$ |
(680,993 |
) |
|
$ |
(8,005 |
) |
|
$ |
(688,998 |
) |
|
$ |
10,897 |
|
|
$ |
322 |
|
|
$ |
11,219 |
|
Revised Line Items in the Condensed Consolidated Statement of Cash Flows for the quarter ended
|
|
|
|
Three months ended |
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Net Loss |
|
|
$ |
(321,670 |
) |
|
$ |
(1,952 |
) |
(a) |
$ |
(323,622 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|||
|
Inventory reserves |
|
|
$ |
1,837 |
|
|
$ |
157 |
|
(a) |
$ |
1,994 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|||
|
Inventory |
|
|
$ |
30,426 |
|
|
$ |
1,795 |
|
(a) |
$ |
32,221 |
|
|
Net Cash Provided by operating activities |
|
|
$ |
36,598 |
|
|
$ |
— |
|
|
$ |
36,598 |
|
Revised Line Items in the Consolidated Statement of Cash Flows for the year ended
|
|
|
|
Year ended |
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Net Loss |
|
|
$ |
(441,048 |
) |
|
$ |
(6,483 |
) |
(a) |
$ |
(447,531 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|||
|
Inventory reserves |
|
|
$ |
3,980 |
|
|
$ |
352 |
|
(a) |
$ |
4,332 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|||
|
Inventory |
|
|
$ |
75,171 |
|
|
$ |
6,100 |
|
(a) |
$ |
81,271 |
|
|
Net Cash Provided by operating activities |
|
|
$ |
103,070 |
|
|
$ |
(31 |
) |
|
$ |
103,039 |
|
|
Effect of exchange rate changes |
|
|
$ |
(451 |
) |
|
$ |
31 |
|
|
$ |
(420 |
) |
Revised Net Cash Provided by Operating Activities for the quarter ended
|
|
|
|
Three months ended |
|
|||||||||
|
(In thousands) |
|
|
As Previously Reported |
|
|
Revision |
|
|
As Revised |
|
|||
|
Net Cash Provided by operating activities |
|
|
$ |
4,544 |
|
|
$ |
12 |
|
(a) |
$ |
4,556 |
|
For additional information, please refer to our note 1 to the Condensed Consolidated Financial Statement set forth in the Form 10-Q for the quarterly period ended
|
Condensed Consolidated Balance Sheets (Preliminary, Unaudited) (In thousands) |
|||||||
|
|
|
|
|
||||
|
|
2025 |
|
2024 |
||||
|
Assets |
|
|
|
||||
|
Current Assets |
|
|
|
||||
|
Cash and cash equivalents |
$ |
101,321 |
|
|
$ |
77,567 |
|
|
Accounts receivable, net |
|
166,519 |
|
|
|
178,030 |
|
|
Other receivables |
|
9,613 |
|
|
|
9,775 |
|
|
Income tax receivable |
|
6,632 |
|
|
|
5,461 |
|
|
Inventory, net |
|
254,055 |
|
|
|
261,654 |
|
|
Assets held for sale |
|
11,901 |
|
|
|
11,901 |
|
|
Prepaid expenses and other current assets |
|
64,456 |
|
|
|
58,534 |
|
|
Total Current Assets |
|
614,497 |
|
|
|
602,922 |
|
|
Property, plant and equipment, net |
|
105,940 |
|
|
|
102,942 |
|
|
Deferred tax assets |
|
17,826 |
|
|
|
17,826 |
|
|
|
|
55,261 |
|
|
|
52,918 |
|
|
Intangibles, net |
|
293,064 |
|
|
|
284,893 |
|
|
Other non-current assets |
|
75,659 |
|
|
|
78,128 |
|
|
Long-term investments |
|
29,973 |
|
|
|
32,060 |
|
|
Total Assets |
$ |
1,192,220 |
|
|
$ |
1,171,689 |
|
|
|
|
|
|
||||
|
Liabilities, Redeemable Non-Controlling Interest and Equity |
|
|
|
||||
|
Current Liabilities |
|
|
|
||||
|
Accounts payable |
$ |
170,477 |
|
|
$ |
170,451 |
|
|
Unearned revenue |
|
66,459 |
|
|
|
52,701 |
|
|
Accrued expenses and other liabilities |
|
38,161 |
|
|
|
35,704 |
|
|
Accrued wages and benefits |
|
25,910 |
|
|
|
32,853 |
|
|
Income tax payable, net |
|
999 |
|
|
|
1,936 |
|
|
Total Current Liabilities |
|
302,006 |
|
|
|
293,645 |
|
|
Non-current revolving credit agreement outstanding |
|
190,085 |
|
|
|
189,576 |
|
|
Deferred tax liabilities |
|
30,768 |
|
|
|
30,690 |
|
|
Non-current unearned revenue |
|
24,082 |
|
|
|
22,065 |
|
|
Non-current pension liability |
|
8,886 |
|
|
|
8,983 |
|
|
Deferred compensation liability |
|
31,283 |
|
|
|
33,203 |
|
|
Non-current lease obligations |
|
26,369 |
|
|
|
25,925 |
|
|
Other non-current liabilities |
|
16,531 |
|
|
|
17,928 |
|
|
Total Liabilities |
|
630,010 |
|
|
|
622,015 |
|
|
Redeemable Non-Controlling Interest |
|
422,934 |
|
|
|
422,943 |
|
|
Equity |
|
|
|
||||
|
Common stock |
|
800 |
|
|
|
795 |
|
|
Additional paid-in capital |
|
812,071 |
|
|
|
808,913 |
|
|
Accumulated other comprehensive income |
|
31,601 |
|
|
|
11,219 |
|
|
Retained deficit |
|
(700,088 |
) |
|
|
(688,998 |
) |
|
|
|
(5,108 |
) |
|
|
(5,198 |
) |
|
Total Equity |
|
139,276 |
|
|
|
126,731 |
|
|
Total Liabilities, Redeemable Non-Controlling Interest and Equity |
$ |
1,192,220 |
|
|
$ |
1,171,689 |
|
|
Condensed Consolidated Statements of Loss (Preliminary, Unaudited) (In thousands, except per share amounts) |
|||||||||
|
|
|
Three Months Ended |
|
||||||
|
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
|
||||
|
Revenue |
|
|
|
|
|
||||
|
Network Solutions |
|
$ |
202,217 |
|
|
$ |
181,273 |
|
|
|
Services & Support |
|
|
45,527 |
|
|
|
44,900 |
|
|
|
Total Revenue |
|
|
247,744 |
|
|
|
226,173 |
|
|
|
Cost of Revenue |
|
|
|
|
|
||||
|
Network Solutions |
|
|
133,925 |
|
|
|
128,278 |
|
|
|
Network Solutions - charges and inventory write-down |
|
|
— |
|
|
|
8,782 |
|
|
|
Services & Support |
|
|
18,327 |
|
|
|
18,810 |
|
|
|
Total Cost of Revenue |
|
|
152,252 |
|
|
|
155,870 |
|
|
|
Gross Profit |
|
|
95,492 |
|
|
|
70,303 |
|
|
|
Selling, general and administrative expenses |
|
|
50,285 |
|
|
|
59,100 |
|
|
|
Research and development expenses |
|
|
48,859 |
|
|
|
60,251 |
|
|
|
|
|
|
— |
|
|
|
292,583 |
|
|
|
Operating Loss |
|
|
(3,652 |
) |
|
|
(341,631 |
) |
|
|
Interest and dividend income |
|
|
126 |
|
|
|
397 |
|
|
|
Interest expense |
|
|
(4,761 |
) |
|
|
(4,598 |
) |
|
|
Net investment (loss) gain |
|
|
(1,686 |
) |
|
|
2,253 |
|
|
|
Other income, net |
|
|
944 |
|
|
|
1,310 |
|
|
|
Loss Before Income Taxes |
|
|
(9,029 |
) |
|
|
(342,269 |
) |
|
|
Income tax benefit |
|
|
715 |
|
|
|
18,647 |
|
|
|
Net Loss |
|
$ |
(8,314 |
) |
|
$ |
(323,622 |
) |
|
|
Less: Net Income attributable to non-controlling interest (1) |
|
|
2,319 |
|
|
|
2,531 |
|
|
|
Net Loss attributable to |
|
$ |
(10,633 |
) |
|
$ |
(326,153 |
) |
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding – basic |
|
|
79,534 |
|
|
|
78,814 |
|
|
|
Weighted average shares outstanding – diluted |
|
|
79,534 |
|
|
|
78,814 |
|
|
|
|
|
|
|
|
|
||||
|
Loss per common share attributable to |
|
$ |
(0.13 |
) |
(2) |
$ |
(4.14 |
) |
|
|
Loss per common share attributable to |
|
$ |
(0.13 |
) |
(2) |
$ |
(4.14 |
) |
|
|
(1) For the three months ended
(2) Loss per common share attributable to |
|||||||||
|
Condensed Consolidated Statements of Cash Flows (Preliminary, Unaudited) (In thousands) |
||||||||
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
||||
|
Cash flows from operating activities: |
|
|
|
|
||||
|
Net loss |
|
$ |
(8,314 |
) |
|
$ |
(323,622 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
|
Depreciation and amortization |
|
|
21,596 |
|
|
|
22,528 |
|
|
|
|
|
— |
|
|
|
292,583 |
|
|
Amortization of debt issuance cost |
|
|
320 |
|
|
|
1,013 |
|
|
Loss (Gain) on investments, net |
|
|
1,631 |
|
|
|
(2,621 |
) |
|
Net loss on disposal of property, plant and equipment |
|
|
13 |
|
|
|
150 |
|
|
Stock-based compensation expense |
|
|
3,210 |
|
|
|
3,957 |
|
|
Deferred income taxes |
|
|
(475 |
) |
|
|
(19,738 |
) |
|
Other, net |
|
|
— |
|
|
|
545 |
|
|
Inventory write down - business efficiency program |
|
|
— |
|
|
|
3,992 |
|
|
Inventory reserves |
|
|
3,339 |
|
|
|
1,994 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
|
Accounts receivable, net |
|
|
16,019 |
|
|
|
26,002 |
|
|
Other receivables |
|
|
(1,731 |
) |
|
|
5,605 |
|
|
Income taxes receivable, net |
|
|
(100 |
) |
|
|
(1,296 |
) |
|
Inventory |
|
|
10,030 |
|
|
|
32,221 |
|
|
Prepaid expenses, other current assets and other assets |
|
|
1,504 |
|
|
|
(15,882 |
) |
|
Accounts payable |
|
|
(4,222 |
) |
|
|
553 |
|
|
Accrued expenses and other liabilities |
|
|
(1,196 |
) |
|
|
7,459 |
|
|
Income taxes payable, net |
|
|
18 |
|
|
|
1,155 |
|
|
Net cash provided by operating activities |
|
|
41,642 |
|
|
|
36,598 |
|
|
|
|
|
|
|
||||
|
Cash flows from investing activities: |
|
|
|
|
||||
|
Purchases of property, plant and equipment |
|
|
(7,399 |
) |
|
|
(12,180 |
) |
|
Purchases of intangibles - developed technology |
|
|
(11,296 |
) |
|
|
(1,194 |
) |
|
Proceeds from sales and maturities of available-for-sale investments |
|
|
660 |
|
|
|
873 |
|
|
Purchases of available-for-sale investments |
|
|
(170 |
) |
|
|
(44 |
) |
|
Payments for beneficial interests in securitized accounts receivable |
|
|
(133 |
) |
|
|
— |
|
|
Net cash used in investing activities |
|
|
(18,338 |
) |
|
|
(12,545 |
) |
|
|
|
|
|
|
||||
|
Cash flows from financing activities: |
|
|
|
|
||||
|
Tax withholdings related to stock-based compensation settlements |
|
|
(420 |
) |
|
|
(176 |
) |
|
Proceeds from stock option exercises |
|
|
756 |
|
|
|
219 |
|
|
Proceeds from receivables purchase agreement |
|
|
— |
|
|
|
30,231 |
|
|
Repayments on receivables purchase agreement |
|
|
— |
|
|
|
(32,437 |
) |
|
Payment for redemption of redeemable non-controlling interest |
|
|
(12 |
) |
|
|
(5 |
) |
|
Payment of debt issuance cost |
|
|
— |
|
|
|
(1,994 |
) |
|
Net cash provided by (used in) financing activities |
|
|
324 |
|
|
|
(4,162 |
) |
|
|
|
|
|
|
||||
|
Net increase in cash and cash equivalents |
|
|
23,628 |
|
|
|
19,891 |
|
|
Effect of exchange rate changes |
|
|
126 |
|
|
|
(301 |
) |
|
Cash and cash equivalents, beginning of period |
|
|
77,567 |
|
|
|
87,167 |
|
|
Cash and cash equivalents, end of period |
|
$ |
101,321 |
|
|
$ |
106,757 |
|
|
|
|
|
|
|
||||
|
Supplemental disclosure of cash financing activities: |
|
|
|
|
||||
|
Cash paid for interest |
|
$ |
4,129 |
|
|
$ |
5,243 |
|
|
Cash paid for income taxes |
|
$ |
1,849 |
|
|
$ |
2,315 |
|
|
Cash used in operating activities related to operating leases |
|
$ |
2,696 |
|
|
$ |
2,384 |
|
|
Supplemental disclosure of non-cash investing activities: |
|
|
|
|
||||
|
Redemption of redeemable non-controlling interest |
|
$ |
(3 |
) |
|
$ |
— |
|
|
Right-of-use assets obtained in exchange for lease obligations |
|
$ |
1,893 |
|
|
$ |
842 |
|
|
Purchases of property, plant and equipment included in accounts payable |
|
$ |
1,162 |
|
|
$ |
1,689 |
|
|
Supplemental Information Reconciliation of Preliminary Gross Profit and Preliminary Gross Margin to Preliminary Non-GAAP Gross Profit and Preliminary Non-GAAP Gross Margin (Unaudited) (In thousands) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
|
2024 |
||||||
|
Total Revenue |
|
$ |
247,744 |
|
|
$ |
242,852 |
|
|
$ |
226,173 |
|
|
|
|
|
|
|
|
|
||||||
|
Cost of Revenue |
|
|
152,252 |
|
|
|
153,593 |
|
|
|
155,870 |
|
|
Acquisition-related expenses, amortizations and adjustments (1) |
|
|
(9,831 |
) |
|
|
(9,980 |
) |
|
|
(10,177 |
) |
|
Stock-based compensation expense |
|
|
(267 |
) |
|
|
(317 |
) |
|
|
(275 |
) |
|
Restructuring expenses (2) |
|
|
— |
|
|
|
(538 |
) |
|
|
(11,247 |
) |
|
Integration expenses (3) |
|
|
— |
|
|
|
123 |
|
|
|
(35 |
) |
|
Non-GAAP Cost of Revenue |
|
$ |
142,154 |
|
|
$ |
142,881 |
|
|
$ |
134,136 |
|
|
|
|
|
|
|
|
|
||||||
|
Gross Profit |
|
$ |
95,492 |
|
|
$ |
89,259 |
|
|
$ |
70,303 |
|
|
Non-GAAP Gross Profit |
|
$ |
105,590 |
|
|
$ |
99,971 |
|
|
$ |
92,037 |
|
|
|
|
|
|
|
|
|
||||||
|
Gross Margin |
|
|
38.5 |
% |
|
|
36.8 |
% |
|
|
31.1 |
% |
|
Non-GAAP Gross Margin |
|
|
42.6 |
% |
|
|
41.2 |
% |
|
|
40.7 |
% |
|
(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations. We incur charges relating to the amortization of intangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for the purpose of calculating our non-GAAP measures, primarily because they are noncash expenses and our internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect our cash position, the loss in value of intangible assets overtime can have a material impact on the equivalent GAAP earnings measure.
(2) Includes expenses for a Business Efficiency Program designed to optimize the assets and business processes following the business combination with Adtran Networks. Other than the Company's aim of selling its headquarters, the Business Efficiency Program was completed as of
(3) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks which was completed as of |
||||||||||||
|
Supplemental Information Reconciliation of Preliminary Operating Expenses to Preliminary Non-GAAP Operating Expenses (Unaudited) (In thousands) |
|||||||||||||
|
|
|
Three Months Ended |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
2025 |
|
|
2024 |
|
|
2024 |
|
|
|||
|
Operating Expenses |
|
$ |
99,144 |
|
|
$ |
106,365 |
|
|
$ |
411,934 |
|
|
|
Acquisition-related expenses, amortizations and adjustments (1) |
|
|
(2,249 |
) |
(2) |
|
(5,294 |
) |
(7) |
|
(4,881 |
) |
(11) |
|
Stock-based compensation expense |
|
|
(2,943 |
) |
(3) |
|
(3,351 |
) |
(8) |
|
(3,447 |
) |
(12) |
|
Restructuring expenses |
|
|
— |
|
(4) |
|
(3,567 |
) |
(9) |
|
(5,862 |
) |
(13) |
|
Integration expenses |
|
|
— |
|
(5) |
|
(586 |
) |
(10) |
|
(480 |
) |
(14) |
|
Deferred compensation adjustments (6) |
|
|
1,547 |
|
|
|
451 |
|
|
|
(1,940 |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(292,583 |
) |
(15) |
|
Non-GAAP Operating Expenses |
|
$ |
95,499 |
|
|
$ |
94,018 |
|
|
$ |
102,741 |
|
|
|
(1) We incur charges relating to the amortization of intangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for the purpose of calculating our non-GAAP measures, primarily because they are non-cash expenses and our internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect our cash position, the loss in value of intangible assets over time can have a material impact on the equivalent GAAP earnings measure.
(2) Includes
(3)
(4) Other than the Company's aim of selling its headquarters, the Business Efficiency Program was completed as of
(5) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks and which was completed as of
(6) Includes non-cash change in fair value of equity investments held in the
(7) Includes
(8)
(9)
(10)
(11) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which
(12)
(13)
(14)
(15) Non-cash impairment of goodwill in our Network Solutions reporting unit, necessitated by factors such as a decrease in the Company's market capitalization, cautious service provider spending due to economic uncertainty and continued elevated customer inventory adjustments. |
|||||||||||||
|
Supplemental Information Reconciliation of Preliminary Operating Loss to Preliminary Non-GAAP Operating Income (Loss) (Unaudited) (In thousands) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
|
2024 |
||||||
|
Operating Loss |
|
$ |
(3,652 |
) |
|
$ |
(17,106 |
) |
|
$ |
(341,631 |
) |
|
Acquisition related expenses, amortizations and adjustments (1) |
|
|
12,080 |
|
|
|
15,274 |
|
|
|
15,058 |
|
|
Stock-based compensation expense |
|
|
3,210 |
|
|
|
3,668 |
|
|
|
3,722 |
|
|
Restructuring expenses (2) |
|
|
— |
|
|
|
4,105 |
|
|
|
17,110 |
|
|
Integration expenses (3) |
|
|
— |
|
|
|
464 |
|
|
|
514 |
|
|
Deferred compensation adjustments (4) |
|
|
(1,547 |
) |
|
|
(451 |
) |
|
|
1,940 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
292,583 |
|
|
Non-GAAP Operating Income (Loss) |
|
$ |
10,091 |
|
|
$ |
5,954 |
|
|
$ |
(10,704 |
) |
|
|
|
|
|
|
|
|
||||||
|
(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations. We incur charges relating to the amortization of intangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for the purpose of calculating our non-GAAP measures, primarily because they are non-cash expenses and our internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect our cash position, the loss in value of intangible assets overtime can have a material impact on the equivalent GAAP earnings measure.
(2) Includes expenses for a Business Efficiency Program designed to optimize the assets and business processes following the business combination with Adtran Networks. Other than the Company's aim of selling its headquarters, the Business Efficiency Program was completed as of
(3) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a results of the business combination with Adtran Networks.
(4) Includes non-cash change in fair value of equity investments held in the
(5) Non-cash impairment of goodwill in our Network Solutions reporting unit, necessitated by factors such as a decrease in the Company's market capitalization, cautious service provider spending due to economic uncertainty and continued elevated customer inventory adjustments. |
||||||||||||
|
Supplemental Information Reconciliation of Preliminary Other Expense to Preliminary Non-GAAP Other Expense (Unaudited) (In thousands) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
|
2024 |
||||||
|
Interest and dividend income |
|
$ |
126 |
|
|
$ |
1,631 |
|
|
$ |
397 |
|
|
Interest expense |
|
|
(4,761 |
) |
|
|
(4,870 |
) |
|
|
(4,598 |
) |
|
Net investment (loss) gain |
|
|
(1,686 |
) |
|
|
(920 |
) |
|
|
2,253 |
|
|
Other income, net |
|
|
944 |
|
|
|
687 |
|
|
|
1,310 |
|
|
Total Other Expense |
|
$ |
(5,377 |
) |
|
$ |
(3,472 |
) |
|
$ |
(638 |
) |
|
Deferred compensation adjustments (1) |
|
|
1,649 |
|
|
|
1,090 |
|
|
|
(2,439 |
) |
|
Pension expense (2) |
|
|
11 |
|
|
|
7 |
|
|
|
7 |
|
|
Non-GAAP Other Expense |
|
$ |
(3,717 |
) |
|
$ |
(2,375 |
) |
|
$ |
(3,070 |
) |
|
(1) Includes non-cash change in fair value of equity investments held in the
(2) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries. |
||||||||||||
|
Supplemental Information
Reconciliation of Preliminary Net Loss inclusive of Non-Controlling Interest to Preliminary Non-GAAP Net Income (Loss) inclusive of Non-Controlling Interest (Unaudited) and
Reconciliation of Preliminary Net Loss attributable to
Preliminary Loss per Common Share attributable to
Preliminary Non-GAAP Net Income (Loss) attributable to
Preliminary Non-GAAP Earnings (Loss) per Common Share attributable to (Unaudited) (In thousands, except per share amounts) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
|
2024 |
||||||
|
Net Loss attributable to |
|
$ |
(10,636 |
) |
|
$ |
(47,885 |
) |
|
$ |
(326,153 |
) |
|
Effect of redemption of RNCI (1) |
|
|
3 |
|
|
|
(5 |
) |
|
|
— |
|
|
Net Loss attributable to |
|
$ |
(10,633 |
) |
|
$ |
(47,890 |
) |
|
$ |
(326,153 |
) |
|
Net Income attributable to non-controlling interest (2) |
|
|
2,319 |
|
|
|
2,407 |
|
|
|
2,531 |
|
|
Net Loss inclusive of non-controlling interest |
|
$ |
(8,314 |
) |
|
$ |
(45,483 |
) |
|
$ |
(323,622 |
) |
|
Acquisition related expenses, amortizations and adjustments (3) |
|
|
12,080 |
|
|
|
15,274 |
|
|
|
15,058 |
|
|
Stock-based compensation expense |
|
|
3,210 |
|
|
|
3,668 |
|
|
|
3,722 |
|
|
Deferred compensation adjustments (4) |
|
|
102 |
|
|
|
639 |
|
|
|
(499 |
) |
|
Pension adjustments (5) |
|
|
11 |
|
|
|
7 |
|
|
|
7 |
|
|
Restructuring expenses (6) |
|
|
— |
|
|
|
4,105 |
|
|
|
17,110 |
|
|
Integration expenses (7) |
|
|
— |
|
|
|
464 |
|
|
|
514 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
292,583 |
|
|
Tax effect of adjustments to net loss (8) |
|
|
(2,393 |
) |
|
|
22,071 |
|
|
|
(18,481 |
) |
|
Non-GAAP Net Income (Loss) inclusive of non-controlling interest |
|
$ |
4,696 |
|
|
$ |
745 |
|
|
$ |
(13,608 |
) |
|
Net Income attributable to non-controlling interest (2) |
|
|
2,319 |
|
|
|
2,407 |
|
|
|
2,531 |
|
|
Non-GAAP Net Income (Loss) attributable to |
|
$ |
2,377 |
|
|
$ |
(1,662 |
) |
|
$ |
(16,139 |
) |
|
Effect of redemption of RNCI (1) |
|
|
(3 |
) |
|
|
5 |
|
|
|
- |
|
|
Non-GAAP Net Income (Loss) attributable to |
|
$ |
2,374 |
|
|
$ |
(1,657 |
) |
|
$ |
(16,139 |
) |
|
|
|
|
|
|
|
|
||||||
|
Weighted average shares outstanding – basic |
|
|
79,534 |
|
|
|
79,091 |
|
|
|
78,814 |
|
|
Weighted average shares outstanding – diluted |
|
|
79,534 |
|
|
|
79,091 |
|
|
|
78,814 |
|
|
|
|
|
|
|
|
|
||||||
|
Loss per common share attributable to |
|
$ |
(0.13 |
) |
|
$ |
(0.61 |
) |
|
$ |
(4.14 |
) |
|
Loss per common share attributable to |
|
$ |
(0.13 |
) |
|
$ |
(0.61 |
) |
|
$ |
(4.14 |
) |
|
|
|
|
|
|
|
|
||||||
|
Non-GAAP Earnings (Loss) per common share attributable to ADTRAN – basic |
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.20 |
) |
|
Non-GAAP Earnings (Loss) per common share attributable to ADTRAN – diluted |
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.20 |
) |
|
(1) Loss per common share attributable to
(2) Represents the non-controlling interest portion of the Company's ownership of Adtran Networks pre-DPLTA and the annual recurring compensation earned by redeemable non-controlling interests and accrued by the Company post-DPLTA.
(3) We incur charges relating to the amortization of intangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for the purpose of calculating our non-GAAP measures, primarily because they are non-cash expenses and our internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect our cash position, the loss in value of intangible assets over time can have a material impact on the equivalent GAAP earnings measure.
(4) Includes non-cash change in fair value of equity investments held in deferred compensation plans offered to certain employees.
(5) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries.
(6) Includes expenses for a Business Efficiency Program designed to optimize the assets and business processes following the business combination with Adtran Networks. Other than the Company's aim of selling its headquarters, the Business Efficiency Program was completed as of
(7) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a results of the business combination with Adtran Networks. Includes fees incurred for the expansion of internal controls at Adtran Networks and the implementation of the DPTLA which was completed as of
(8) Represents the tax effect of non-GAAP adjustments. Beginning in the period ended |
||||||||||||
|
Supplemental Information Reconciliation of Preliminary Net Cash Provided By Operating Activities to Preliminary Free Cash Flow (Unaudited) (In thousands) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
2025 |
|
2024 |
|
2024 |
||||||
|
|
|
$ |
41,642 |
|
|
$ |
4,556 |
|
|
$ |
36,598 |
|
|
Purchases of property, plant and equipment and developed technologies (1) |
|
|
(18,695 |
) |
|
|
(14,942 |
) |
|
|
(13,374 |
) |
|
Free cash flow (Non-GAAP) |
|
$ |
22,947 |
|
|
$ |
(10,386 |
) |
|
$ |
23,224 |
|
|
(1) Purchases related to capital expenditures and developed technologies. |
||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250507467289/en/
For media
+44 1904 699 358
public.relations@adtran.com
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+1 256 963 6305
investor.relations@adtran.com
Source:
