ADTRAN (ADTN) investor relations material

Executive summary

• Q3 2025 revenue reached $279.4 million, up 23% year-over-year, near the upper end of guidance, driven by double-digit growth in all business categories and normalized customer spending.

• Operating results improved with higher margins, cost controls, and end-market recovery following a business efficiency program.

• Strong performance in optical networking and subscriber solutions; access and aggregation impacted by seasonal buying patterns of two large European customers, expected to rebound late Q4 or early next year.

• Issued $201.3 million in convertible senior notes due 2030, lowering borrowing costs and increasing financial flexibility.

• Added new customers across all segments, reflecting continued share gains and expanding reach.

Financial highlights

• Q3 2025 revenue was $279.4 million, up from $227.7 million in Q3 2024; nine-month revenue: $792.2 million, up from $679.9 million.

• Non-GAAP gross margin improved to 42.1%, while GAAP gross margin was 38.3%; non-GAAP operating margin was 5.4%, GAAP operating margin -1.0%.

• Non-GAAP operating profit rose to $15.1 million (5.4% of revenue); net loss attributable to shareholders was $10.3 million, improved from $33.3 million loss in Q3 2024.

• Non-GAAP EPS was $0.05; GAAP diluted loss per share was $0.12.

• Cash, cash equivalents, and restricted cash at quarter end: $101.2 million; operating cash flow was $12.2 million.

Outlook and guidance

• Q4 2025 revenue expected between $275 and $285 million; non-GAAP operating margin anticipated at 3.5%-7.5%.

• OPEX expected to remain relatively flat compared to Q3.

• Management expects continued margin expansion and earnings growth through 2026, with a long-term gross margin target of 43%.

• Liquidity and credit access are sufficient to meet obligations for at least the next 12 months.

• BEAD spending environment expected to positively impact orders in the first half of 2026, though program impact is delayed.