Adtran Holdings, Inc. · NASDAQ:ADTN
Adtran — Q4 2024 Earnings Presentation
31 slides from Adtran's earnings presentation, Feb 27, 2025
Slide 1: Adtran Holdings Investor Presentation
Adtran Holdings (Nasdaq: ADTN) Investor Presentation February 26, 2025
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Statements contained in this investor presentation which are not historical facts, such as those relating to expectations regarding future revenue and future non-GAAP operating margin; future service provider spending; future profitability, and gr
Slide 3: Introduction and business model
Introduction and business model
Slide 4: Who is Adtran?
3,100+ Employees worldwide 1,000+ Global technology patents $923M Revenue1 50 35+ Years of experience Α — Ω End-to-end solutions portfolio Who is Adtran? Your trusted partner for the fiber everywhere era Worldwide locations HQ = Huntsville, AL “Our vision is to enable a fully-connected world, where
Slide 5: Market trends
Market trends Industry update Continued growth in scalable, secure and AI-optimized fiber networks Fiber everywhere era continues Mix of public and private funding remains strong Connecting all homes, business, 5G sites and critical infrastructure AI infrastructure reshaping networks Rapid expansion
Slide 6: Adtran is a global vendor with scale and diversity
Business model Adtran is a global vendor with scale and diversity Portfolio differentiation Customer diversity Global presence Trusted vendor Optical core to customer premise End-to-end automation & insights Enhanced security and assurance Balanced mix of national SPs, regional SPs, enterprise, and
Slide 7: Adtran portfolio: from the core through the door
Adtran portfolio From the core through the door 5G Data-driven intelligence for operations and support Subscriber experience Access domain Optical domain Subscriber Solutions Cloud-managed Wi-Fi 7 Residential and business fiber CPE Data collection Data-driven insights Access and Aggregation Solution
Slide 8: Addressable markets
Addressable MArkets Fiber networking market forecasts CAGR*: ~3.6% CAGR*: ~4.4% CAGR*: ~6.8% *3-year 2025 - 2028 Sources: PON OLT+ONT: Dell’Oro 5-yr Broadband Access and Home Networking Report (Feb 2025) Metro WDM: Omdia Optical Network Forecast (May 2024) Carrier Ethernet: Omdia Service Provider Sw
Slide 9: Factors expected to drive long-term growth
Business model Factors expected to drive long-term growth Expansion of fiber networks Strong mix of public and private funds to build out fiber to homes, businesses, 5G sites, and critical infrastructure In-home networks upgrading to multi-Gig Wi-Fi to match access network speeds Adtran has strong p
Slide 10: Business update
Business update
Slide 11: Preliminary Q4 2024 highlights
business update Preliminary Q4 2004 highlights Revenue of $243m, up sequentially and above mid-point of outlook ($230m-$245m) Revenue above mid-point of guidance range Q4 24 Non-GAAP gross margin of 42.0%, decreased 11 bps QoQ and up 10 bps YoY Strong non-GAAP gross margin Operating cash flow of $5m
Slide 12: Q4 2024 technology update
Q4 2024 business update Technology update Subscriber solutions Strong demand in 10 Gig ONTs, 10 Gig Carrier Ethernet CPE and multi-Gig Wi-Fi 7 platforms Rapidly expanding customer base with Intellifi cloud-managed Wi-Fi solutions Access and aggregation solutions Customers expanding and upgrading to
Slide 13: Preliminary revenue by segment, category and region
Q4 2024 business update Preliminary revenue by segment, category and region Category Region Q4 2023 Q4 2024 $225.5 $242.9 Services & Support Network Solutions Q3 2024 Q4 2024 $227.7 $242.9 Y-o-Y Q-o-Q Q4 2023 Q4 2024 $225.5 $242.9 Access & Aggregation Subscriber Solutions Optical Networking Solution
Slide 14: Well diversified across technology, markets and customer base
Q4 2024 business update Well diversified across technology, markets and customer base Categories Optical networking solutions Subscriber solutions Access & aggregation solutions Market Customers Large SPs Regional SPs Enterprise / ICP / OEM U.S. Non-U.S. Note: Potential differences may be due to rou
Slide 15: Preliminary financial information
Q4 2024 business update Preliminary financial information Q4 2023 Q3 2024 Q4 2024 +7.7% +6.7% Q4 2023 Q3 2024 Q4 2024 41.9% 42.1% 42.0% +10bps -11bps Q4 2023 Q3 2024 Q4 2024 -3.7% 0.7% Q4 2023 Q3 2024 Q4 2024 Q4 2023 Q3 2024 Q4 2024 Note: All results are approximate due to the preliminary nature of
Slide 16: Preliminary balance sheet highlights
Q4 2024 business update Preliminary balance sheet highlights Trade Accounts Receivables $m Q4 2023 Q3 2024 Q4 2024 Trade Accounts Payables $m Q4 2023 Q3 2024 Q4 2024 Inventories $m Q4 2023 Q3 2024 Q4 2024 Net Working Capital $m Q4 2023 Q3 2024 Q4 2024 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 DSO DPO Rolling DS
Slide 17: Preliminary cash flow highlights
Q4 2024 business update Preliminary cash flow highlights Operating Cash flow $m (2023 vs. 2024) 2023 2024 Non-GAAP Free cash flow1 $m (2023 vs. 2024) 2023 2024 -$89 Cash ($m) Q4 2023 Q3 2024 Q4 2024 Operating Cash flow $m (Q3 vs. Q4) Q3 2024 Q4 2024 $42 Non-GAAP Free cash flow1 $m (Q3 vs. Q4) Q3 202
Slide 18: 2025 outlook
18 Inventory conditions have materially recovered. Booking trends continue to improve. A return to normalized spending is expected over the coming quarters. Increasing fiber infrastructure growth due to fiber expansion, vendor consolidation, a shift away from high-risk Chinese vendors, and investmen
Slide 19: Outlook for Q1 2025
Outlook for Q1 2025 Previous outlook (for Q4 2024) Current outlook (for Q1 2025) Revenue $230m – $245m $237.5m – $252.5m Non-GAAP operating margin 0% – +4% 0% – +4%
Slide 20: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation
Slide 21: Non-GAAP cost of revenue, gross profit and gross margin reconciliation
Non-GAAP cost of revenue, gross profit and gross margin reconciliation (1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations. We incur charges relating to the
Slide 22: Non-GAAP operating expense reconciliation
Non-GAAP operating expense reconciliation See footnotes on following page
Slide 23: Non-GAAP operating expense reconciliation footnotes
Non-GAAP operating expense reconciliation footnotes (1) We incur charges relating to the amortization of intangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of our acquisitions. We exclude
Slide 24: Non-GAAP operating loss reconciliation
Non-GAAP operating loss reconciliation (1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations. We incur charges relating to the amortization of intangible asset
Slide 25: Non-GAAP other expense reconciliation
Non-GAAP other expense reconciliation (1) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. Deferred Compensation Program for Employees. (2) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign c
Slide 26: Non-GAAP net income (loss) and per share reconciliation
Non-GAAP net income (loss) and income (loss) per share attributable of non-controlling interest reconciliation (1) Loss per common share attributable to ADTRAN Holdings, Inc. - basic and diluted - reflects a $5 thousand and $3.0 million effect of redemption for the three months ended December 31, 20
Slide 27: Free cash flow reconciliation
Free cash flow reconciliation (1) Purchases related to capital expenditures and developed technologies.
Slide 28: Appendix
Appendix
Slide 29: 2025 Financial calendar
2025 Financial calendar Needham 27th Annual Growth Conference – New York January 14 Stifel 2025 NYC One-on-One Conference – New York March 11 37th Annual ROTH Conference – Dana Point, California March 18
Slide 30: Explanation of use of non-GAAP financial measures
Explanation of use of non-GAAP financial measures Set forth in the tables below are reconciliations of gross profit, gross margin, operating expenses, operating loss, other (expense) income, net loss inclusive of the non-controlling interest, net income attributable to the non-controlling interest,
Slide 31: Thank you
Thank you - woncesece / /