Subscriber Solutions increased 17% year over year and 3% sequentially, driven by demand for residential fiber customer premises equipment as customers connected more subscribers.Access and aggregation revenue rose 9% year over year and 6% sequentially, supported by continued fiber access investment across U.S. and European operators.Optical networking solutions grew 33% year over year. Santo said optical was the “largest and fastest contributor,” increasing by $26.9 million from the prior year. Management a ...

ADTRAN (NasdaqGS:ADTN) Q4 2025 Earnings call February 26, 2026 08:30 AM ET Company ParticipantsPeter Schuman - VP of Investor RelationsTim Santo - Senior Vice President and CFOTom Stanton - Chairman of the Board and CEOConference Call ParticipantsChristian Schwab - Senior Research AnalystDave Kang - Senior Research AnalystGeorge Notter - Managing Director and Senior Research AnalystMichael Genovese - Senior Research AnalystRyan Koontz - Senior AnalystOperatorGood morning. My name is Julianne, and I will be ...

ADTRAN (NasdaqGS:ADTN) Q4 2025 Earnings call February 26, 2026 08:30 AM ET Company ParticipantsPeter Schuman - VP of Investor RelationsTim Santo - Senior Vice President and CFOTom Stanton - Chairman of the Board and CEOConference Call ParticipantsChristian Schwab - Senior Research AnalystDave Kang - Senior Research AnalystGeorge Notter - Managing Director and Senior Research AnalystMichael Genovese - Senior Research AnalystRyan Koontz - Senior AnalystOperatorGood morning. My name is Julianne, and I will be ...

ADTRAN (NasdaqGS:ADTN) Q4 2025 Earnings call February 26, 2026 08:30 AM ET Speaker4Good morning. My name is Julianne, and I will be your conference operator. At this time, I would like to welcome everyone to ADTRAN Holdings' fourth quarter and full year 2025 financial results conference call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. To ask a question at this time, you'll need to press star, followed by the 1 on your telephone key ...

Corporate Structure and Governance - The Company executed a Domination and Profit and Loss Transfer Agreement (DPLTA) with Adtran Networks, effective January 16, 2023, establishing effective control over Adtran Networks [38]. - The company’s executive team includes Thomas R. Stanton as CEO and Chairman, and Timothy Santo as CFO, with significant experience in their respective roles [108]. Financial Performance and Revenue - The Company operates two reportable segments: Network Solutions and Services & Support, focusing on revenue and gross profit analysis [40]. - The Company reported that one customer accounted for over 10% of its revenue in 2025, with the next five largest customers contributing 20.4% of total revenue [60]. - Seasonal fluctuations in revenue are observed, particularly with lower spending in the first fiscal quarter as customers finalize budgets [80]. - As of December 31, 2025, the company had $92.0 million in cash and cash equivalents exceeding government insured depository limits, with minimal credit risk assessed [399]. - Approximately $0.6 million of cash and investments are sensitive to interest rate changes, with a hypothetical 50 basis point decline potentially reducing annualized interest income by less than $0.1 million [400]. - A hypothetical 10% movement in foreign exchange rates could impact the company by approximately $6.3 million for the year ended December 31, 2025 [401]. - The company incurs approximately 44.0% of total operating expenses in non-USD local currencies, exposing it to foreign currency fluctuations [401]. - Changes in monetary exchange rates for non-functional currencies could result in a combined hypothetical gain or loss of $8.1 million if the U.S. dollar fluctuates by 10% against billing currencies [402]. Research and Development - Research and development expenditures totaled $204.3 million in 2025, down from $258.3 million in 2023, indicating a strategic focus on cost management [67]. - The Company launched several new products in 2025, including a 50G C-band pluggable transceiver and expanded its Wi-Fi 7 portfolio, enhancing its competitive position in the market [71]. - The company has approximately 1,000 patents worldwide, with expiration dates ranging from 2026 to 2044, and over 50 additional pending patent applications [102]. Market Position and Competition - The global demand for bandwidth is increasing, driven by the rise of connected devices and the transition to cloud-based services, necessitating investments in fiber-based broadband solutions [54]. - The Company aims to lead in fiber networking and plans to increase its focus on North America and EMEA markets for growth [58]. - The company competes with major players like Calix, Ciena, and Nokia across various product categories, including Subscriber Solutions and Optical Networking [79]. Operations and Supply Chain - The Services & Support segment provides a comprehensive portfolio of network design and maintenance services, enhancing operational efficiency for customers [42]. - Manufacturing processes include sourcing materials globally, with certain key components available from limited suppliers, which has previously caused delivery delays [74][75]. - The company ships products primarily from its Huntsville, Alabama facility, with international logistics hubs in Meiningen, Germany, and York, United Kingdom [76]. - Recent increases in costs for critical raw materials due to tariffs have negatively impacted financial results, with potential future tariffs posing additional risks [77]. Sustainability and Compliance - The Company emphasizes sustainability in its operations, targeting science-based emissions reductions and eco-design in product development [58]. - The company is committed to sustainability, with programs aimed at reducing waste and emissions, and plans to issue a sustainability report in early 2026 [91][92]. - Compliance with various government regulations, including environmental and telecommunications standards, is a priority for the company [85][86]. Human Resources and Talent Development - As of December 31, 2025, the company employed 3,338 individuals, with a significant portion in engineering and technical roles [94]. - The company invests in talent development, providing numerous training opportunities to enhance employee competencies and leadership potential [100]. - The company offers a comprehensive compensation and benefits program, including long-term equity incentives and various health and wellness benefits [99]. Legal and Risk Management - The company is exposed to patent litigation risks, which could have a material adverse effect on its business and operating results [105]. - The company maintains substantial inventories to support customer demand, which also increases the risk of obsolescence [83].

Adtran Holdings (Nasdaq: ADTN) February 26, 2026 Investor presentation Cautionary note regarding forward-looking statements This investor presentation contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, statements and graphics reflecting the Company's beliefs and expectations relating to future customer spending and market trends; future fiber and cloud ...

Core Viewpoint - ADTRAN Holdings, Inc. reported strong financial results for Q4 2025, highlighting significant revenue growth and improved margins [1] Financial Performance - Revenue for Q4 2025 reached $291.6 million, representing a year-over-year increase of 20.1% [1] - GAAP gross margin was reported at 39.0%, while Non-GAAP gross margin was 42.5%, reflecting increases of 213 and 122 basis points year-over-year, respectively [1] - The GAAP operating margin stood at 1.5%, with a Non-GAAP operating margin of 6.4% [1]

Revenue Expectations - Preliminary revenue for Q4 2025 is expected to be between $290.0 million and $293.0 million, exceeding the previous guidance of $275.0 million to $285.0 million[3] - Full year preliminary U.S. GAAP revenue is expected to be between $1,082.2 million and $1,085.2 million[3] Operating Margin - Preliminary GAAP operating margin for Q4 is expected to be between 1.4% and 1.7%, while non-GAAP operating margin is expected to be between 6.0% and 6.9%[4] - Full year preliminary GAAP operating margin is expected to be between (1.5)% and (1.4)%, with non-GAAP operating margin expected to be between 4.6% and 4.9%[4] Earnings Per Share - The company anticipates that Q4 non-GAAP earnings per share will exceed current analyst consensus estimates, though the exact variance is not confirmed[5] Performance Insights - The preliminary results reflect higher demand and strong execution, outperforming expectations amid typical year-end seasonality[6] Reporting Schedule - The final financial results for Q4 and full year 2025 will be reported on February 25, 2026[6] - The company will conduct a conference call on February 26, 2026, to discuss the results in detail[6] Risks - The company is subject to various risks that could cause actual results to differ materially from the preliminary estimates provided[10]

Core Viewpoint - ADTRAN Holdings, Inc. is expected to outperform its previously issued revenue guidance for the fourth quarter and full year of 2025, with preliminary unaudited revenue figures indicating significant growth [2][3]. Revenue Summary - For the fourth quarter of 2025, preliminary revenue is projected to be between $290.0 million and $293.0 million, surpassing the prior guidance of $275.0 million to $285.0 million [3]. - Full year preliminary U.S. GAAP revenue is anticipated to be between $1,082.2 million and $1,085.2 million [3]. Operating Margin Summary - Preliminary GAAP operating margin for the fourth quarter is expected to range from 1.4% to 1.7% [4]. - Preliminary non-GAAP operating margin for the fourth quarter is projected to be between 6.0% and 6.9%, aligning with the previously announced guidance of 3.5% to 7.5% [4]. - For the full year, preliminary GAAP operating margin is expected to be between (1.5)% and (1.4)%, while preliminary non-GAAP operating margin is projected to be between 4.6% and 4.9% [4]. Earnings Per Share Summary - The company anticipates that fourth quarter non-GAAP earnings per share will exceed current analyst consensus estimates, although the specific variance cannot be confirmed at this time [5]. Management Commentary - The Chairman and CEO, Tom Stanton, noted that the preliminary fourth quarter results reflect higher demand and strong execution, indicating an outperformance amid typical year-end seasonality [6].

Core Insights - The ongoing replacement of Huawei equipment in Europe presents an annual opportunity of approximately $800 million, with strong activity and strategic discussions ongoing [1][5][6] Company Performance and Outlook - ADTRAN executives reported improving demand trends, expanding optical momentum, and a growing set of opportunities in Europe, particularly as they enter 2026 [4] - The company feels more optimistic entering 2026 compared to previous years, attributing this to a return to normal spending patterns and increased activity from customers [3][4] - Profitability metrics are improving, with gross margins trending towards a range of 42-43% and a goal of achieving double-digit operating margins [5][10] Market Dynamics - The replacement of Huawei equipment is expected to unfold in phases, with a significant focus on funding mechanisms for the removal and replacement of an estimated $10 billion worth of installed base [6][5] - Italy has been highlighted as a notable market where ADTRAN has secured contracts for both optical and access components, indicating a shift in market dynamics [7] Customer and Inventory Insights - Customers are currently purchasing what they need without significant inventory overhang, and the timing of orders can be variable [9] - The U.S. broadband buildout supported by BEAD is expected to gradually ramp up revenue contributions, particularly in the second half of the year [8] Financial Strategies - ADTRAN executed a ~$200 million convertible financing to reduce higher-cost debt and improve balance sheet flexibility [5][12] - The company is pursuing asset dispositions, including the sale of its North South Tower property, to capitalize on local market activity [13] Technological Advancements - ADTRAN has launched an AI tool named "Clarity" aimed at improving network maintenance and troubleshooting, which is currently in beta testing [14] - The company anticipates that AI-driven demand will necessitate upgrades to its optical equipment as carriers enhance their networks [15] Competitive Landscape - ADTRAN perceives a favorable competitive environment with fewer competitors in the access market and believes it has a next-generation product advantage [16] - The company has noted that early revenue from new opportunities may be minimal initially but is expected to build over the next two to three years [16][17]