ADTRAN (ADTN) investor relations material

Executive summary

• Revenue reached $265.1 million in Q2 2025, up 17% year-over-year, with growth across all major categories and market share gains in key areas, driven by normalized customer spending and fiber expansion.

• Net loss attributable to shareholders narrowed to $20.5 million in Q2 2025 from $49.7 million in Q2 2024, reflecting improved profitability and cost controls.

• Gross profit margin rose to 37.3% GAAP and 41.4% non-GAAP, supported by cost controls and the completion of a Business Efficiency Program.

• Strong cash generation led to $32.2 million in operating cash and a cash position of $106.3 million.

• Confident outlook for continued growth, profitability, and cash generation in the second half of the year.

Financial highlights

• Q2 2025 revenue: $265.1 million, up 17% year-over-year and 7% sequentially, exceeding guidance.

• Network Solutions revenue was $219.5 million (83% of total), up 22% year-over-year; Services & Support at $45.6 million (17%), nearly flat year-over-year.

• Non-GAAP gross margin was 41.4%, up from 38.4% a year ago; GAAP gross margin was 37.3%.

• Non-GAAP operating profit was $8 million (3% of revenue), up from $1.4 million a year ago; GAAP operating margin was -5.0%.

• Free cash flow for the quarter was $18.3 million, up from $3.9 million a year ago.

Outlook and guidance

• Q3 2025 revenue expected between $270 million and $280 million; non-GAAP operating margin forecasted at 3% to 7%.

• Guidance excludes potential tariff impacts due to global trade policy uncertainty.

• Management expects continued revenue and billing growth for the remainder of 2025 as customer demand recovers and inventory levels normalize.