Spirent Communications (SPT) H2 2023 earnings summary

Executive summary

• Revenue fell to $474.3m from $607.5m as customer spending conditions weakened; adjusted operating profit was $45.2m, with margin at 9.5%.

• The board unanimously recommended VIAVI’s 175p-per-share cash offer, including a 2.5p special dividend, valuing the equity at £1,005m; completion was expected in H2 2024, subject to clearances.

• Long-term growth drivers were reiterated, alongside continued uncertainty over telco spending recovery and near-term revenue and profitability.

Financial highlights

• FY 2023 revenue was $474.3m vs $607.5m in 2022; gross profit was $343.6m vs $437.1m, while gross margin improved to 72.4% from 72.0%.

• Adjusted operating profit was $45.2m vs $129.5m; adjusted operating margin was 9.5% vs 21.3%. Reported operating profit was $18.4m vs $112.7m.

• Profit before tax was $22.9m vs $114.6m; profit after tax was $25.2m vs $99.9m. Adjusted basic EPS was 7.55 cents vs 18.86 cents.

• Closing orderbook rose to $293.7m from $288.1m, while order intake was $477.0m vs $625.7m; cash ended the year at $108.1m vs $209.6m.

Outlook and guidance

• Long-term guidance was reiterated, supported by attractive market trends, customer diversification beyond telecoms, focused R&D investment and disciplined cost management.

• Near-term customer budget reviews and difficult-to-predict telco spending recovery constrain visibility; revenue and profitability returning to 2022 levels in the short-to-medium term remained uncertain.

• Effective tax rate outlook was approximately 11–13%.