Adtran Holdings, Inc. · NASDAQ:ADTN
Adtran — Q1 2025 Earnings Presentation
32 slides from Adtran's earnings presentation, May 28, 2025
Slide 1: Adtran Holdings Investor Presentation May 27, 2025
Adtran Holdings (Nasdaq: ADTN) Investor Presentation May 27, 2025
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This investor presentation contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among other things, statements
Slide 3: Introduction and business model
Introduction and business model
Slide 4: 2025 outlook
4 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 investment
Slide 5: Who is Adtran?
3,100+ Employees worldwide 1,000+ Global technology patents $923M FY’24 Revenue 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, w
Slide 6: 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 expected to remain strong Connecting all homes, business, 5G sites and critical infrastructure AI infrastructure reshaping networks Rapi
Slide 7: Business model: 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 8: Adtran portfolio
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 9: Addressable Markets
Addressable MArkets Fiber networking market forecasts CAGR*: ~3.6% CAGR*: ~5.5% CAGR*: ~6.8% *3-year 2025 - 2028 Sources: PON OLT+ONT: Dell’Oro 5-yr Broadband Access and Home Networking Report (January 2025) Metro WDM: Omdia Optical Network Forecast (November 2024) Carrier Ethernet: Omdia Service Pr
Slide 10: 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 11: Business update
Business update
Slide 12: Q1 2025 highlights
business update Q1 2025 highlights Revenue of $247.7m, up q-o-q & y-o-y and above mid-point of prior outlook ($237.5m-$252.5m) Revenue above mid-point of guidance range Q1 25 Non-GAAP gross margin of 42.5%, increased 121 bps q-o-q and 180 bps y-o-y Strong non-GAAP gross margin Operating cash flow of
Slide 13: Technology update
Q1 2025 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 14: Revenue by segment, category and region
Q1 2025 business update Revenue by segment, category and region Category Region Q1 2024 Q1 2025 $226.2 $247.7 Services & Support Network Solutions Q4 2024 Q1 2025 $242.9 $247.7 Y-o-Y Q-o-Q Q1 2024 Q1 2025 $226.2 $247.7 Access & Aggregation Subscriber Solutions Optical Networking Solutions Q4 2024 Q1
Slide 15: Well diversified across technology, markets and customer base
Q1 2025 business update Well diversified across technology, markets and customer base Product Categories Optical networking solutions Subscriber solutions Access & aggregation solutions Market Customers Large SPs Regional SPs Enterprise / ICP U.S. Non-U.S. Note: Potential differences may be due to r
Slide 16: Financial information
Q1 2025 business update Financial information Q1 2024 Q4 2024 Q1 2025 +9.5% +2.0% Q1 2024 Q4 2024 Q1 2025 40.7% 41.3% 42.5% +180bps +121bps Q1 2024 Q4 2024 Q1 2025 -6.9% +1.1% Q4 2023 Q3 2024 Q4 2024 Q1 2024 Q4 2024 Q1 2025 2.4% 3.9% Note: Potential differences may be due to rounding. Note: A reconc
Slide 17: Balance sheet highlights
Q1 2025 business update Balance sheet highlights Trade Accounts Receivables $m Q1 2024 Q4 2024 Q1 2025 Trade Accounts Payables $m Q1 2024 Q4 2024 Q1 2025 Inventories $m Q1 2024 Q4 2024 Q1 2025 Net Working Capital $m Q1 2024 Q4 2024 Q1 2025 Note:Potential differences may be due to rounding.
Slide 18: Cash flow highlights
Q1 2025 business update Cash flow highlights Cash ($m) Q1 2024 Q4 2024 Q1 2025 Operating Cash flow $m Q1 2024 Q4 2024 Q1 2025 $38 $43 Non-GAAP Free cash flow1 $m Q1 2024 Q4 2024 Q1 2025 Note: Potential differences may be due to rounding. 1Non-GAAP free cash flow is operating cash flow less purchases
Slide 19: Outlook for Q2 2025
Outlook for Q2 2025 Previous outlook (for Q1 2025) Current outlook (for Q2 2025) Revenue $237.5m – $252.5m $247.5m – $262.5m Non-GAAP operating margin 0% – +4% 0% – +4%
Slide 20: Long-term target operating model
Long-term target operating model ~42% – 43% Non-GAAP gross margin ~29% – 31% Non-GAAP Operating Expenses ~12% – 13% Non-GAAP Operating Margin < 1.5x Gross Leverage Note: A reconciliation of each non-GAAP financial measure to the most comparable GAAP measure is included in the appendix of this presen
Slide 21: GAAP to non-GAAP reconciliations
GAAP to non-GAAP reconciliations
Slide 22: 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 23: Non-GAAP operating expense reconciliation
Non-GAAP operating expense reconciliation See footnotes on following page
Slide 24: 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 25: Non-GAAP operating income (loss) and operating margin reconciliation
Non-GAAP operating income (loss) and operating 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 am
Slide 26: 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 27: Non-GAAP net income (loss) and earnings (loss) per share reconciliation
Non-GAAP net income (loss) and earnings (loss) per share reconciliation (1) Loss per common share attributable to ADTRAN Holdings, Inc. - basic and diluted - reflects a $3 thousand and $5 thousand effect of redemption for the three months ended March 31, 2025 and December 31, 2024 respectively. (2)
Slide 28: Free cash flow reconciliation
Free cash flow reconciliation (1) Purchases related to capital expenditures and developed technologies.
Slide 29: Appendix
Appendix
Slide 30: 2025 Financial calendar
2025 Financial calendar Needham Technology Virtual One-on-One Conference May 12 22nd Annual Craig-Hallum Institutional Investor Conference – Minneapolis, Minnesota May 28 Northland Capital Virtual One-on-One Conference June 25
Slide 31: Explanation of use of non-GAAP financial measures
Explanation of use of non-GAAP financial measures Set forth in the tables above are reconciliations of gross profit, gross margin, operating expenses, operating loss, operating margin, other expense, net loss inclusive of the non-controlling interest, net income attributable to the non-controlling i
Slide 32: Thank you
Thank you - woncesece / /