ADTRAN (ADTN) investor relations material

Executive summary

• Q3 revenue was $281.2M, up 0.6% YoY and slightly below guidance midpoint amid supply constraints.

• Optical, hyperscale, and enterprise demand supported growth, while weaker subscriber and U.S. access trends and constrained shipments weighed on results.

• Non-GAAP operating income was $14.1M and diluted EPS was $0.09; the long-term non-GAAP operating margin target remains 10%.

Financial highlights

• Q3 revenue was $281.2M versus $279.4M in Q3 2025; GAAP operating loss narrowed to $0.8M from $2.8M, while non-GAAP operating income was $14.1M versus $15.1M.

• GAAP gross margin was 38.5% versus 38.3% YoY; non-GAAP gross margin was 42.1%, flat YoY and up 140 bps QoQ, including a ~200 bps IEEPA tariff refund benefit.

• GAAP net loss attributable to common stockholders was $9.2M; non-GAAP net income attributable to common stockholders was $7.1M, or $0.09 per diluted share versus $0.05 YoY and $0.04 QoQ.

• GAAP diluted loss per share was $0.10; non-GAAP operating margin was 5.0%, versus 5.4% YoY and 3.8% QoQ.

• Nine-month revenue rose 7.1% to $848.4M, and net loss attributable to shareholders narrowed to $21.5M from $42.1M.

Outlook and guidance

• Q4 revenue guidance is $272M–$292M, with non-GAAP operating margin guidance of 1%–5%; outlook reflects seasonality, supply availability, and large-project timing.

• A smaller tariff refund benefit is expected in Q4; cost savings, pricing adjustments, and product redesigns are intended to address margin pressure.

• Large access-customer orders are expected to normalize in Q1 2027; access activity is expected to be fairly strong in H1 2027, and residential CPE is expected to strengthen in Q4.

• BEAD is expected to contribute more in 2027 than in 2026 and remain a multi-year program.

• LiteWave 800 trials are expected in H1 2027, with production scaling in H2; MicroMux Quattro is on track for a 1H27 release.