Spirent Communications (SPT) Trading Update summary

Trading performance and market environment

• First half 2024 revenue was $197 million, down 12% year-on-year, mainly due to industry-wide slowdown and customer hesitancy after the Keysight acquisition offer.

• Operating profit decline was partially offset by cost-saving measures implemented over the past year.

• EMEA region saw good order growth, but this was insufficient to counteract weakness in other regions, especially China, where trade compliance and economic softness persisted.

• No order cancellations were reported, but contract placements were delayed as customers processed the acquisition news.

• Cash position at period end was $131 million, reflecting continued focus on financial management.

Strategic initiatives and product development

• Continued investment in product roadmaps to support customer R&D and future sector recovery.

• Talent retention remained a priority during the transition period.

• Diversification strategy advanced, with new contract wins in Financial Services assurance, automation, and test.

• Launched new Positioning product (PNT X) in April and introduced new Wi-Fi 7 products in the first half.

Outlook and sector trends

• Challenging market conditions are expected to persist into the second half of 2024.

• Confidence in 5G as a long-term growth driver remains, with acceleration in 5G Standalone launches anticipated in 2025.

• Core network spending, including cloud and high-speed Ethernet upgrades, is expected to increase through at least 2027, supporting new capabilities like satellite connectivity and XR.

• Spirent is positioned to capitalize on these trends through its leadership in HSE test and core network assurance.