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ADTRAN Holdings, Inc. Reports Preliminary Third Quarter 2024 Financial Results

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ADTRAN Holdings reported preliminary Q3 2024 results with revenue of $227.7 million, exceeding guidance midpoint. The company posted GAAP gross margin of 37.4% and Non-GAAP gross margin of 42.1%, showing sequential improvements. Despite a GAAP operating margin of -10.5% and Non-GAAP operating margin of 1.1%, the company expects continued growth in Q4 with projected revenue between $230-245 million. Management highlighted improving end markets, growing customer base, and normalizing inventory levels as positive indicators. The company anticipates leveraging these improvements for increased profitability and cash generation.

ADTRAN Holdings ha riportato risultati preliminari per il terzo trimestre del 2024 con un fatturato di 227,7 milioni di dollari, superando il punto medio della guida. L'azienda ha registrato un margine lordo GAAP del 37,4% e un margine lordo Non-GAAP del 42,1%, mostrando miglioramenti sequenziali. Nonostante un margine operativo GAAP del -10,5% e un margine operativo Non-GAAP dell'1,1%, l'azienda si aspetta una crescita continua nel quarto trimestre con un fatturato previsto compreso tra 230-245 milioni di dollari. La direzione ha messo in evidenza il miglioramento dei mercati finali, l'aumento della base clienti e la normalizzazione dei livelli di inventario come indicatori positivi. L'azienda prevede di sfruttare questi miglioramenti per aumentare la redditività e la generazione di cassa.

ADTRAN Holdings reportó resultados preliminares del tercer trimestre de 2024 con ingresos de 227.7 millones de dólares, superando el punto medio de la guía. La compañía presentó un margen bruto GAAP del 37.4% y un margen bruto No GAAP del 42.1%, mostrando mejoras secuenciales. A pesar de un margen operativo GAAP del -10.5% y un margen operativo No GAAP del 1.1%, la empresa espera un crecimiento continuo en el cuarto trimestre con ingresos proyectados entre 230-245 millones de dólares. La dirección destacó la mejora en los mercados finales, el aumento de la base de clientes y la normalización de los niveles de inventario como indicadores positivos. La empresa anticipa aprovechar estas mejoras para aumentar la rentabilidad y la generación de efectivo.

ADTRAN Holdings는 2024년 3분기 preliminarily 결과를 발표하며 2억 2,770만 달러의 수익을 보고했습니다. 이는 가이던스의 중간값을 초과한 수치입니다. 회사는 GAAP 총 마진이 37.4%, 비-GAAP 총 마진은 42.1%로, 순차적인 개선을 보였습니다. GAAP 운영 마진은 -10.5%, 비-GAAP 운영 마진은 1.1%임에도 불구하고, 회사는 4분기에 예상 수익이 2억 3천만-2억 4천 5백만 달러 사이에 있을 것으로 보아 지속적인 성장을 기대하고 있습니다. 경영진은 개선되는 최종 시장, 증가하는 고객 기반, 그리고 재고 수준의 정상화가 긍정적인 지표로 작용하고 있다고 강조했습니다. 회사는 이러한 개선을 활용하여 수익성과 현금 생성 증가를 기대하고 있습니다.

ADTRAN Holdings a annoncé des résultats préliminaires pour le troisième trimestre 2024 avec des revenus de 227,7 millions de dollars, dépassant le point médian des prévisions. L'entreprise a affiché une marge brute GAAP de 37,4 % et une marge brute Non-GAAP de 42,1 %, montrant des améliorations séquentielles. Malgré une marge opérationnelle GAAP de -10,5 % et une marge opérationnelle Non-GAAP de 1,1 %, l'entreprise s'attend à une croissance continue au quatrième trimestre, avec des revenus prévus entre 230-245 millions de dollars. La direction a souligné l'amélioration des marchés finals, l'accroissement de la base de clients et la normalisation des niveaux de stocks comme des indicateurs positifs. L'entreprise prévoit de tirer parti de ces améliorations pour augmenter sa rentabilité et sa génération de trésorerie.

ADTRAN Holdings hat vorläufige Ergebnisse für das 3. Quartal 2024 gemeldet, mit einem Umsatz von 227,7 Millionen Dollar, der den Mittelpunkt der Prognose übersteigt. Das Unternehmen verzeichnete eine GAAP-Bruttomarge von 37,4 % und eine Non-GAAP-Bruttomarge von 42,1 %, was sequenzielle Verbesserungen zeigt. Trotz einer GAAP-Betriebsgewinne von -10,5 % und einer Non-GAAP-Betriebsgewinne von 1,1 % erwartet das Unternehmen ein kontinuierliches Wachstum im 4. Quartal mit einem prognostizierten Umsatz von 230-245 Millionen Dollar. Das Management hob die Verbesserung der Endmärkte, die wachsende Kundenbasis und die Normalisierung der Bestandsniveaus als positive Indikatoren hervor. Das Unternehmen plant, diese Verbesserungen zur Steigerung der Rentabilität und Cash-Generierung zu nutzen.

Positive
  • Revenue increased to $227.7 million, exceeding guidance
  • Sequential improvement in gross margins (GAAP: 37.4%, Non-GAAP: 42.1%)
  • Q4 2024 revenue guidance of $230-245 million indicates continued growth
  • Growing customer base and improving end-market conditions
  • Sequential improvement in operating margins
Negative
  • GAAP operating margin remains negative at -10.5%
  • GAAP diluted loss per share of $0.36
  • Non-GAAP diluted loss per share of $0.05
  • Low Non-GAAP operating margin at 1.1% despite improvements

Insights

The Q3 results show mixed performance with some positive trends emerging. Revenue of $227.7 million exceeded guidance expectations, while non-GAAP gross margin improved to 42.1%. However, the company still posted losses with a non-GAAP diluted loss per share of $0.05.

The forward guidance of $230-245 million revenue for Q4 and projected non-GAAP operating margin of 0-4% suggests continued sequential improvement. Key positives include customer base expansion, normalizing inventory levels and growing demand for fiber access solutions. However, the negative GAAP operating margin of -10.5% remains a concern, though showing sequential improvement.

The company's strategic positioning in fiber access and optical transport markets, combined with customer transitions away from high-risk vendors, provides potential growth catalysts. The focus on operational leverage could drive improved profitability, but execution will be important given current market conditions.

HUNTSVILLE, Ala.--(BUSINESS WIRE)-- ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) (“ADTRAN Holdings” or the “Company”) today announced its preliminary unaudited financial results for the third quarter of 2024.

  • Revenue: $227.7 million, up sequentially and above the mid-point of guidance.
  • Gross margin: GAAP gross margin: 37.4%; Non-GAAP gross margin: 42.1%, a sequential increase of 134 and 17 basis points, respectively.
  • Operating margin: GAAP operating margin negative 10.5% up sequentially; Non-GAAP operating margin positive 1.1%, up sequentially and above the mid-point of guidance.
  • GAAP diluted loss per share of $0.36; Non-GAAP diluted loss per share $0.05.

ADTRAN Holdings’ Chairman and Chief Executive Officer Tom Stanton stated, “We delivered higher sequential revenue and expanded gross and operating margins in the third quarter. Importantly, we are seeing improvements in our key end markets as we continue to grow our customer base. With the gradual recovery in service provider spending, the success we are having in customer acquisition, and encouraging booking trends, we expect sequential revenue growth to continue in the fourth quarter. This outlook, coupled with improving visibility, gives us confidence our end-markets should continue to improve.”

“ADTRAN remains well-positioned for sustainable and profitable growth as customer inventory levels normalize,” added Mr. Stanton. “The continued trend to increase fiber access and optical transport, combined with the ongoing transition from higher risk vendors to providers like ADTRAN, serve as durable secular catalysts. As we grow, we are confident we can unlock meaningful operational leverage, driving accelerated profitability and increased cash generation.”

Business Outlook1

For the fourth quarter of 2024, the Company expects revenue to be within a range of $230 million to $245 million. Non-GAAP operating margin is expected to be within a range of 0% to 4%.

1GAAP earnings guidance is not provided. Please see the Explanation of Use of Non-GAAP Financial Measures at the end of this press release for an explanation regarding the Company’s omission of both GAAP earnings guidance and the applicable reconciliation table. In addition, please see the Explanation of Use of Non-GAAP Financial Measures and the Supplemental Information Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures at the end of this press release for detailed information on calculating the non-GAAP measures referenced herein.

The Company will hold a conference call to discuss its preliminary third quarter results on Thursday, November 07, 2024, at 9:30 a.m. Central Time, or 4:30 p.m. Central European Time. The Company will webcast this conference call. To listen, simply visit our Investor Relations site at investors.adtran.com approximately 10 minutes prior to the start of the call, click on the event “ADTRAN Holdings Releases 3rd Quarter 2024 Financial Results and Earnings Call”, and click on the webcast link.

An online replay of the Company’s conference call, as well as the transcript of the Company's conference call, will be available on the Investor Relations site approximately 24 hours following the call and will remain available for at least 12 months. For more information, visit investors.adtran.com or email investor.relations@adtran.com.

About Adtran

ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) is the parent company of Adtran, Inc., a leading global provider of open, disaggregated networking and communications solutions that enable voice, data, video and internet communications across any network infrastructure. From the cloud edge to the subscriber edge, Adtran empowers communications service providers around the world to manage and scale services that connect people, places and things. Adtran solutions are used by service providers, private enterprises, government organizations and millions of individual users worldwide. ADTRAN Holdings, Inc. is also the largest shareholder of Adtran Networks SE, formerly ADVA Optical Networking SE. Find more at Adtran, LinkedIn and Twitter.

Cautionary Note Regarding Forward-Looking Statements

Statements contained in this press release and the accompanying earnings call 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 growth, including customer acquisition and booking trends, as well as future end market growth; future market trends and customer inventory levels; future operational leverage and cash generation; and ADTRAN Holdings’ strategy and outlook, outlook and financial guidance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can also generally be identified by the use of words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could” and similar expressions. In addition, ADTRAN Holdings, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such projections and other forward-looking information speak only as of the date hereof, and ADTRAN Holdings undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise, except to the extent as may be required by law. All such forward-looking statements are necessarily estimates and reflect management’s best judgment based upon current information. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which have caused and may in the future cause actual events or results to differ materially from those estimated by ADTRAN Holdings include, but are not limited to: (i) risks and uncertainties relating to ADTRAN Holdings’ ability to continue to reduce expenditures and the impact of such reductions on its financial results and financial condition; (ii) the risk of fluctuations in revenue due to lengthy sales and approval processes required by major and other service providers for new products, as well as ongoing tighter inventory management of ADTRAN Holdings’ customers; (iii) risks and uncertainties relating to ongoing material weaknesses in our internal control over financial reporting; (iv) risks and uncertainties relating to our ability to comply with the covenants set forth in our credit facility and to satisfy our payment obligations to Adtran Networks’ minority shareholders under the Domination and Profit and Loss Transfer Agreement between us and Adtran Networks; (v) risks posed by potential breaches of information systems and cyber-attacks; (vi) the risk that ADTRAN Holdings may not be able to effectively compete, including through product improvements and development; and (vii) other risks set forth in ADTRAN Holdings’ public filings made with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2023, its Quarterly Report on Form 10-Q for the second quarter ended June 30, 2024, and risks to be disclosed in its Form 10-Q for the quarterly period ended September 30, 2024 to be filed with the SEC.

Additionally, the financial measures presented herein are preliminary estimates, remain subject to our internal controls and procedures, and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between the Company’s actual results and the preliminary financial information set forth herein may be material.

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 loss attributable to the Company, net income attributable to the non-controlling interest, and loss per share - basic and diluted, attributable to the Company, and net cash provided by (used in) operating activities, in each case as reported based on generally accepted accounting principles in the United States (“GAAP”), to non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP other expense, non-GAAP net loss inclusive of the non-controlling interest, non-GAAP net loss attributable to the Company, non-GAAP net income attributable to the non-controlling interest, non-GAAP loss per share - basic and diluted, attributable to the Company, respectively, and non-GAAP free cash flow. Such non-GAAP measures exclude acquisition-related expenses, amortization and adjustments (consisting of intangible amortization of backlog, developed technology, customer relationships, and trade names acquired in connection with business combinations and amortization of inventory fair value adjustments as well as legal and advisory fees related to a potential significant transaction), stock-based compensation expense, amortization of pension actuarial losses, deferred compensation adjustments, integration expenses, restructuring expenses, goodwill impairments, the tax effect of these adjustments to net loss and purchases of property, plant and equipment. These measures are used by management in our ongoing planning and annual budgeting processes. Additionally, we believe the presentation of these non-GAAP measures, when combined with the presentation of the most directly comparable GAAP financial measure, is beneficial to the overall understanding of ongoing operating performance of the Company.

1Non-GAAP operating margin (which is calculated as non-GAAP operating loss divided by revenue) is a non-GAAP financial measure. The Company has provided fourth quarter guidance with regard to non-GAAP operating margin. This measure excludes from the corresponding GAAP financial measure the effect of adjustments as described below. The Company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot predict and quantify without unreasonable effort all of the adjustments that may occur during the period due to the difficulty of predicting the timing and amounts of various items within a reasonable range. In particular, non-GAAP operating margin excludes certain items, including continued restructuring expenses, that will continue to evolve as our business efficiency program is implemented that the Company is unable to quantitatively predict. Depending on the materiality of these items, they could have a significant impact on the Company's GAAP financial results.

These non-GAAP financial measures are not prepared in accordance with, or an alternative for, GAAP and therefore should not be considered in isolation or as a substitution for analysis of our results as reported under GAAP. Additionally, our calculation of non-GAAP measures may not be comparable to similar measures calculated by other companies..

Published by

ADTRAN Holdings, Inc.

www.adtran.com

Condensed Consolidated Balance Sheets

(Preliminary, Unaudited)

(In thousands)

 

 

September 30,

 

December 31,

 

2024

 

2023

Assets

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

88,456

 

 

$

87,167

 

Accounts receivable, net

 

172,025

 

 

 

216,445

 

Other receivables

 

12,871

 

 

 

17,450

 

Income tax receivable

 

13,466

 

 

 

7,933

 

Inventory, net

 

282,926

 

 

 

362,295

 

Prepaid expenses and other current assets

 

69,112

 

 

 

45,566

 

Total Current Assets

 

638,856

 

 

 

736,856

 

Property, plant and equipment, net

 

147,428

 

 

 

123,020

 

Deferred tax assets

 

25,697

 

 

 

25,787

 

Goodwill

 

56,884

 

 

 

353,415

 

Intangibles, net

 

286,098

 

 

 

327,985

 

Other non-current assets

 

86,677

 

 

 

87,706

 

Long-term investments

 

31,506

 

 

 

27,743

 

Total Assets

$

1,273,146

 

 

$

1,682,512

 

 

 

 

 

 

 

Liabilities, Redeemable Non-Controlling Interest and Equity

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable

$

173,354

 

 

$

162,922

 

Unearned revenue

 

54,615

 

 

 

46,731

 

Accrued expenses and other liabilities

 

34,482

 

 

 

36,204

 

Accrued wages and benefits

 

40,366

 

 

 

27,030

 

Income tax payable, net

 

2,007

 

 

 

5,221

 

Total Current Liabilities

 

304,824

 

 

 

278,108

 

Non-current revolving credit agreement outstanding

 

189,849

 

 

 

195,000

 

Deferred tax liabilities

 

21,483

 

 

 

35,655

 

Non-current unearned revenue

 

24,901

 

 

 

25,109

 

Non-current pension liability

 

12,149

 

 

 

12,543

 

Deferred compensation liability

 

32,046

 

 

 

29,039

 

Non-current lease obligations

 

25,635

 

 

 

31,420

 

Other non-current liabilities

 

26,489

 

 

 

28,657

 

Total Liabilities

 

637,376

 

 

 

635,531

 

Redeemable Non-Controlling Interest

 

421,776

 

 

 

442,152

 

Equity

 

 

 

 

 

Common stock

 

792

 

 

 

790

 

Additional paid-in capital

 

806,187

 

 

 

795,304

 

Accumulated other comprehensive income

 

47,377

 

 

 

47,465

 

Retained deficit

 

(635,164

)

 

 

(232,905

)

Treasury stock

 

(5,198

)

 

 

(5,825

)

Total Equity

 

213,994

 

 

 

604,829

 

Total Liabilities, Redeemable Non-Controlling Interest and Equity

$

1,273,146

 

 

$

1,682,512

 

Condensed Consolidated Statements of Loss

(Preliminary, Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

2024

 

2023

 

2024

 

 

2023

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Network Solutions

 

$

181,488

 

 

$

228,564

 

 

$

541,955

 

 

$

793,984

 

Services & Support

 

 

46,216

 

 

 

43,767

 

 

 

137,913

 

 

 

129,637

 

Total Revenue

 

 

227,704

 

 

 

272,331

 

 

 

679,868

 

 

 

923,621

 

Cost of Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Network Solutions

 

 

126,103

 

 

 

160,244

 

 

 

376,886

 

 

 

596,334

 

Network Solutions - other (credits), charges and inventory write-down

 

 

(328

)

 

 

21,043

 

 

 

8,597

 

 

 

21,043

 

Services & Support

 

 

16,678

 

 

 

16,807

 

 

 

55,304

 

 

 

51,646

 

Total Cost of Revenue

 

 

142,453

 

 

 

198,094

 

 

 

440,787

 

 

 

669,023

 

Gross Profit

 

 

85,251

 

 

 

74,237

 

 

 

239,081

 

 

 

254,598

 

Selling, general and administrative expenses

 

 

57,620

 

 

 

62,907

 

 

 

176,214

 

 

 

196,887

 

Research and development expenses

 

 

51,615

 

 

 

62,752

 

 

 

172,253

 

 

 

203,493

 

Goodwill impairment

 

 

 

 

 

37,874

 

 

 

292,583

 

 

 

37,874

 

Operating Loss

 

 

(23,984

)

 

 

(89,296

)

 

 

(401,969

)

 

 

(183,656

)

Interest and dividend income

 

 

664

 

 

 

521

 

 

 

1,427

 

 

 

1,183

 

Interest expense

 

 

(5,679

)

 

 

(4,507

)

 

 

(17,183

)

 

 

(11,858

)

Net investment gain (loss)

 

 

1,382

 

 

 

(1,443

)

 

 

4,507

 

 

 

1,071

 

Other (expense) income, net

 

 

(850

)

 

 

2,523

 

 

 

(441

)

 

 

4,714

 

Loss Before Income Taxes

 

 

(28,467

)

 

 

(92,202

)

 

 

(413,659

)

 

 

(188,546

)

Income tax (expense) benefit

 

 

(390

)

 

 

16,553

 

 

 

16,121

 

 

 

36,229

 

Net Loss

 

$

(28,857

)

 

$

(75,649

)

 

$

(397,538

)

 

$

(152,317

)

Less: Net (Loss) Income attributable to non-controlling interest

 

 

2,382

 

 

 

2,561

 

 

 

7,417

 

 

 

4,380

 

Net Loss attributable to ADTRAN Holdings, Inc.

 

$

(31,239

)

 

$

(78,210

)

 

$

(404,955

)

 

$

(156,697

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

78,952

 

 

 

78,389

 

 

 

78,873

 

 

 

78,378

 

Weighted average shares outstanding – diluted

 

 

78,952

 

 

 

78,389

 

 

 

78,873

 

 

 

78,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share attributable to ADTRAN Holdings, Inc. – basic

 

$

(0.36

)

(1)

$

(1.00

)

 

$

(5.10

)

(1)

$

(2.00

)

Loss per common share attributable to ADTRAN Holdings, Inc. – diluted

 

$

(0.36

)

(1)

$

(1.00

)

 

$

(5.10

)

(1)

$

(2.00

)

(1) Loss per common share attributable to ADTRAN Holdings, Inc. reflects $3.0 million gain on redemption of redeemable non-controlling interest for the three and nine months ended September 30, 2024.

Condensed Consolidated Statements of Cash Flows

(Preliminary, Unaudited)

(In thousands)

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(397,538

)

 

$

(152,317

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

68,421

 

 

 

91,422

 

Goodwill impairment

 

 

292,583

 

 

 

37,874

 

Amortization of debt issuance cost

 

 

1,013

 

 

 

607

 

Gain on investments, net

 

 

(4,238

)

 

 

(3,316

)

Net loss on disposal of property, plant and equipment

 

 

203

 

 

 

 

Stock-based compensation expense

 

 

11,417

 

 

 

12,229

 

Deferred income taxes

 

 

(13,399

)

 

 

(45,941

)

Other, net

 

 

(267

)

 

 

204

 

Inventory write down - business efficiency program

 

 

4,135

 

 

 

21,043

 

Inventory reserves

 

 

6,667

 

 

 

29,836

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

59,446

 

 

 

47,347

 

Other receivables

 

 

4,875

 

 

 

8,340

 

Income taxes receivable, net

 

 

(5,682

)

 

 

 

Inventory

 

 

69,412

 

 

 

536

 

Prepaid expenses, other current assets and other assets

 

 

(20,083

)

 

 

1,816

 

Accounts payable

 

 

9,697

 

 

 

(87,903

)

Accrued expenses and other liabilities

 

 

15,039

 

 

 

6,476

 

Income taxes payable, net

 

 

(3,175

)

 

 

2,433

 

Net cash provided by (used in) operating activities

 

 

98,526

 

 

 

(29,314

)

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(48,183

)

 

 

(33,674

)

Proceeds from sales and maturities of available-for-sale investments

 

 

1,195

 

 

 

10,545

 

Purchases of available-for-sale investments

 

 

(195

)

 

 

(807

)

Proceeds from beneficial interests in securitized accounts receivable

 

 

282

 

 

 

1,178

 

Net cash used in investing activities

 

 

(46,901

)

 

 

(22,758

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Tax withholdings related to stock-based compensation settlements

 

 

(189

)

 

 

(6,331

)

Proceeds from stock option exercises

 

 

219

 

 

 

187

 

Dividend payments

 

 

 

 

 

(21,237

)

Proceeds from receivables purchase agreement

 

 

68,556

 

 

 

 

Repayments on receivables purchase agreement

 

 

(83,772

)

 

 

 

Proceeds from draw on revolving credit agreements

 

 

 

 

 

163,760

 

Repayment of revolving credit agreements

 

 

(5,000

)

 

 

(49,233

)

Payment for redemption of redeemable non-controlling interest

 

 

(17,395

)

 

 

(1,196

)

Payment for annual recurring compensation to non-controlling interest

 

 

(10,084

)

 

 

 

Payment of debt issuance cost

 

 

(1,994

)

 

 

(708

)

Repayment of notes payable

 

 

 

 

 

(24,931

)

Net cash (used in) provided by financing activities

 

 

(49,659

)

 

 

60,311

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

1,966

 

 

 

8,239

 

Effect of exchange rate changes

 

 

(677

)

 

 

(791

)

Cash and cash equivalents, beginning of period

 

 

87,167

 

 

 

108,644

 

Cash and cash equivalents, end of period

 

$

88,456

 

 

$

116,092

 

 

 

 

 

 

 

 

Supplemental disclosure of cash financing activities:

 

 

 

 

 

 

Cash paid for interest

 

$

18,225

 

 

$

8,540

 

Cash paid for income taxes

 

$

9,122

 

 

$

 

Cash used in operating activities related to operating leases

 

$

7,380

 

 

$

7,378

 

Supplemental disclosure of non-cash investing activities:

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations

 

$

2,122

 

 

$

8,490

 

Purchases of property, plant and equipment included in accounts payable

 

$

952

 

 

$

2,508

 

Revision of Previously Issued Condensed Consolidated Financial Statements

Following the third quarter of 2024, the Company identified errors primarily impacting the carrying values of the redeemable non-controlling interest, retained deficit, the net income attributable to the non-controlling interest and the net loss attributable to the Company and, as a consequence, of the loss per common share attributable to the Company. The Company has evaluated the errors and determined that the related impacts were not material to the previously issued consolidated financial statements for any prior period. A summary of the corrections to the Company's Condensed Consolidated Financial Statements for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024, is as follows:

  1. Pursuant to the terms of the DPLTA, each Adtran Networks shareholder (other than the Company) is entitled to receive from us an Annual Recurring Compensation payment of €0.52 per share. The Company erroneously accrued this liability every quarter at €0.59 per share, overstating the associated accrual, the net income attributable to non-controlling interest and the net loss attributable to ADTRAN Holdings, Inc. for fiscal periods beginning with the quarter ended March 31, 2023 through the quarter ended June 30, 2024.
  2. For the periods beginning with the quarter ended March 31, 2023 through the quarter ended June 30, 2024 the Company remeasured the redeemable non-controlling interest each quarter-end at the current exchange rate of Euros to U.S. Dollar. The Company treated the redeemable non-controlling interest as a monetary mezzanine equity instrument but should have treated it as a non-monetary mezzanine equity instrument not subject to remeasurement.

For additional information, please see our Note 1 to the Condensed Consolidated Financial Statements set forth in the Form 10-Q for the quarterly period ended September 30, 2024 to be filed with the SEC.

Supplemental Information

Reconciliation of Preliminary Gross Profit and Preliminary Gross Margin to

Preliminary Non-GAAP Gross Profit and Preliminary Non-GAAP Gross Margin

(Preliminary, Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

 

September 30,
2024

 

September 30,
2023

Total Revenue

 

$

227,704

 

 

$

225,991

 

 

$

272,331

 

 

 

$

679,868

 

 

$

923,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue

 

$

142,453

 

 

$

144,416

 

 

$

198,094

 

 

 

$

440,787

 

 

$

669,023

 

Acquisition-related expenses, amortizations and adjustments(1)

 

 

(10,276

)

 

 

(10,064

)

 

 

(13,537

)

 

 

 

(30,517

)

 

 

(79,554

)

Stock-based compensation expense

 

 

(270

)

 

 

(280

)

 

 

(279

)

 

 

 

(825

)

 

 

(854

)

Restructuring expenses(2)

 

 

(7

)

 

 

(2,788

)

 

 

(21,630

)

 

 

 

(14,042

)

 

 

(21,706

)

Integration expenses(3)

 

 

(34

)

 

 

(35

)

 

 

(154

)

 

 

 

(104

)

 

 

(154

)

Non-GAAP Cost of Revenue

 

$

131,866

 

 

$

131,249

 

 

$

162,494

 

 

 

$

395,299

 

 

$

566,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

85,251

 

 

$

81,575

 

 

$

74,237

 

 

 

$

239,081

 

 

$

254,598

 

Non-GAAP Gross Profit

 

$

95,838

 

 

$

94,742

 

 

$

109,837

 

 

 

$

284,569

 

 

$

356,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

 

 

37.4

%

 

 

36.1

%

 

 

27.3

%

 

 

 

35.2

%

 

 

27.6

%

Non-GAAP Gross Margin

 

 

42.1

%

 

 

41.9

%

 

 

40.3

%

 

 

 

41.9

%

 

 

38.6

%

(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations.

(2) Includes expenses for restructuring program designed to optimize the assets and business processes following the business combination with Adtran Networks. These expenses include inventory write down and other charges of $8.6 million for the nine months ended September 30, 2024, incurred as a result of a strategy shift which included discontinuance of certain product lines in connection with the Business Efficiency Program. The restructuring program commenced upon the closing of the business combination with Adtran Networks and is expected to be substantially completed in late 2024. Additionally, as part of the Business Efficiency Program, management determined to close a facility in Greifswald, Germany. These expenses include restructuring wage charges of $4.9 million for the nine months ended September 30, 2024. The closure of the facility is expected to be completed by December 31, 2024.

(3) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks.

Supplemental Information

Reconciliation of Preliminary Operating Expenses to Preliminary Non-GAAP Operating Expenses

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

September 30,

 

 

 

2024

 

2024

 

2023

 

 

2024

 

2023

 

Operating Expenses

 

$

109,235

 

 

$

119,881

 

 

$

163,533

 

 

 

$

641,050

 

 

$

438,254

 

 

Acquisition-related expenses, amortizations and adjustments

 

 

(5,054

)

(1)

 

(7,233

)

(6)

 

(4,534

)

(10)

 

 

(17,168

)

(14)

 

(13,516

)

(19)

Stock-based compensation expense

 

 

(3,126

)

(2)

 

(3,321

)

(7)

 

(3,251

)

(11)

 

 

(9,894

)

(15)

 

(10,683

)

(20)

Restructuring expenses

 

 

(5,930

)

(3)

 

(14,742

)

(8)

 

(3,242

)

(12)

 

 

(26,534

)

(16)

 

(11,471

)

(21)

Integration expenses

 

 

(333

)

(4)

 

(531

)

(9)

 

(1,485

)

(13)

 

 

(1,344

)

(17)

 

(2,897

)

(22)

Deferred compensation adjustments(5)

 

 

(1,471

)

 

 

(848

)

 

 

1,801

 

 

 

 

(4,259

)

 

 

1,714

 

 

Goodwill impairment(18)

 

 

 

 

 

 

 

 

(37,874

)

 

 

 

(292,583

)

 

 

(37,874

)

 

Non-GAAP Operating Expenses

 

$

93,321

 

 

$

93,206

 

 

$

114,948

 

 

 

$

289,268

 

 

$

363,527

 

 

(1) Includes $4.0M of intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations and $0.6 million of legal and advisory fees related to a potential strategic transaction which are both included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of loss.

(2) $2.2 million is included in selling, general and administrative expenses and $0.9 million is included in research and development expenses on the condensed consolidated statements of loss.

(3) $2.7 million is included in selling, general and administrative expenses and $3.2 million is included in research and development expenses on the condensed consolidated statements of loss. Includes expenses of $3.2 million of wage related and other charges due to the Greifswald facility closure of which $0.8 million is included in selling, general and administrative and $2.4 million is included in research and development expenses on the condensed consolidated statements of loss.

(4) $0.3 million is included in selling, general and administrative expenses on the condensed consolidated statements of loss, and is primarily related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks.

(5) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. Deferred Compensation Program for Employees, all of which is included in selling, general and administrative expenses on the condensed consolidated statement of loss.

(6) Includes $3.9M of intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations and $2.8 million of legal and advisory fees related to a contemplated strategic transaction which are both included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of loss.

(7) $2.4 million is included in selling, general and administrative expenses and $0.9 million is included in research and development expenses on the condensed consolidated statements of loss.

(8) $3.5 million is included in selling, general and administrative expenses and $11.3 million is included in research and development expenses on the condensed consolidated statements of loss. Includes expenses of $13.5 million of wage related and other charges due to the Greifswald facility closure of which $2.6 million is included in selling, general and administrative and $10.9 million is included in research and development expenses on the condensed consolidated statements of loss.

(9) $0.5 million is included in selling, general and administrative expenses on the condensed consolidated statements of loss, and is primarily related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks.

(10) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which $4.0 million is included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of loss.

(11) $2.4 million is included in selling, general and administrative expenses and $0.8 million is included in research and development expenses on the condensed consolidated statements of loss.

(12) $3.4 million is included in selling, general and administrative expenses and $(0.2) million is included in research and development expenses on the condensed consolidated statements of loss.

(13) $1.4 million is included in selling, general and administrative expenses and $0.1 million is included in research and development expenses on the condensed consolidated statements of loss. Includes fees relating to the expansion of internal controls at Adtran Networks and the implementation of the DPLTA. Additionally, includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks of which $0.5 million is stock compensation expense for the program.

(14) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which $15.8 million is included in selling, general and administrative expenses and $1.4 million is included in research and development expenses on the condensed consolidated statements of loss.

(15) $7.1 million is included in selling, general and administrative expenses and $2.8 million is included in research and development expenses on the condensed consolidated statements of loss.

(16) $8.0 million is included in selling, general and administrative expenses and $18.6 million is included in research and development expenses on the condensed consolidated statements of loss. Includes expenses of $16.5 million of wage related and other charges due to the Greifswald facility closure of which $3.2 million is included in selling, general and administrative and $13.3 million is included in research and development expenses on the condensed consolidated statements of loss.

(17) $1.3 million is included in selling, general and administrative expenses on the condensed consolidated statements of loss. Includes fees relating to the expansion of internal controls at Adtran Networks and the implementation of the DPLTA. Additionally, includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks of which $0.7 million is stock compensation expense for the program.

(18) Non-cash impairment of goodwill in our Network Solutions reporting unit, necessitated by factors such as a decrease in the Company's market capitalization, cautious service provider spending due to economic uncertainty and continued elevated customer inventory adjustments.

(19) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which $12.0 million is included in selling, general and administrative expenses and $1.5 million is included in research and development expenses on the condensed consolidated statements of loss.

(20) $7.6 million is included in selling, general and administrative expenses and $3.1 million is included in research and development expenses on the condensed consolidated statements of loss.

(21) $7.0 million is included in selling, general and administrative expenses and $4.5 million is included in research and development expenses on the condensed consolidated statements of loss.

(22) $2.8 million is included in selling, general and administrative expenses and $0.1 million is included in research and development expenses on the condensed consolidated statements of loss. Includes fees relating to the expansion of internal controls at Adtran Networks and the implementation of the DPLTA. Additionally, includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks of which $0.5 million is stock compensation expense for the program.

Supplemental Information

Reconciliation of Preliminary Operating Loss to Preliminary Non-GAAP Operating Income (Loss)

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

September 30,

 

 

2024

 

2024

 

2023

 

 

2024

 

2023

Operating Loss

 

$

(23,984

)

 

$

(38,306

)

 

$

(89,296

)

 

 

$

(401,969

)

 

$

(183,656

)

Acquisition related expenses, amortizations and adjustments(1)

 

 

15,330

 

 

 

17,297

 

 

 

18,070

 

 

 

 

47,685

 

 

 

93,069

 

Stock-based compensation expense

 

 

3,396

 

 

 

3,601

 

 

 

3,530

 

 

 

 

10,719

 

 

 

11,537

 

Restructuring expenses(2)

 

 

5,936

 

 

 

17,530

 

 

 

24,873

 

 

 

 

40,576

 

 

 

33,178

 

Integration expenses(3)

 

 

367

 

 

 

566

 

 

 

1,639

 

 

 

 

1,447

 

 

 

3,051

 

Deferred compensation adjustments(4)

 

 

1,471

 

 

 

848

 

 

 

(1,801

)

 

 

 

4,259

 

 

 

(1,714

)

Goodwill impairment(5)

 

 

 

 

 

 

 

 

37,874

 

 

 

 

292,583

 

 

 

37,874

 

Non-GAAP Operating Income (Loss)

 

$

2,516

 

 

$

1,536

 

 

$

(5,111

)

 

 

$

(4,700

)

 

$

(6,661

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations.

(2) Includes expenses for restructuring program designed to optimize the assets and business processes following the business combination with Adtran Networks. These expenses include inventory write down and other charges incurred as a result of a strategic shift in certain product lines in connection with the restructuring program. Additionally, includes expenses related to the closure of the Greifswald facility.

(3) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a results of the business combination with Adtran Networks. Includes fees incurred for the expansion of internal controls at Adtran Networks and the implementation of the DPTLA.

(4) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. Deferred Compensation Program for Employees, all of which is included in selling, general and administrative expenses on the condensed consolidated statement of loss.

(5) Non-cash impairment of goodwill in our Network Solutions reporting unit, necessitated by factors such as a decrease in the Company’s market capitalization, cautious service provider spending due to economic uncertainty and continued customer inventory adjustments.

Supplemental Information

Reconciliation of Preliminary Other Expense to Preliminary Non-GAAP Other Expense

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

 

September 30,
2024

 

September 30,
2023

Interest and dividend income

 

$

664

 

 

$

366

 

 

$

521

 

 

 

$

1,427

 

 

$

1,183

 

Interest expense

 

 

(5,679

)

 

 

(6,906

)

 

 

(4,507

)

 

 

 

(17,183

)

 

 

(11,858

)

Net investment gain (loss)

 

 

1,382

 

 

 

872

 

 

 

(1,443

)

 

 

 

4,507

 

 

 

1,071

 

Other (expense) income, net

 

 

(850

)

 

 

(901

)

 

 

2,523

 

 

 

 

(441

)

 

 

4,714

 

Total Other Expense

 

$

(4,483

)

 

$

(6,569

)

 

$

(2,906

)

 

 

$

(11,690

)

 

$

(4,890

)

Deferred compensation adjustments (1)

 

 

(1,294

)

 

 

(896

)

 

 

1,117

 

 

 

 

(4,629

)

 

 

(1,387

)

Pension expense (2)

 

 

7

 

 

 

7

 

 

 

7

 

 

 

 

21

 

 

 

20

 

Non-GAAP Other Expense

 

$

(5,770

)

 

$

(7,458

)

 

$

(1,782

)

 

 

$

(16,298

)

 

$

(6,257

)

(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 countries.

Supplemental Information

Reconciliation of Preliminary Net Loss inclusive of Non-Controlling Interest to

Preliminary Non-GAAP Net (Loss) Income inclusive of Non-Controlling Interest

(Unaudited)

 

and

 

Reconciliation of Preliminary Net Income attributable to Non-Controlling Interest to

Preliminary Non-GAAP Net Income attributable to Non-Controlling Interest

(Unaudited)

 

and

 

Reconciliation of Preliminary Net Loss attributable to ADTRAN Holdings, Inc. and

Preliminary Loss per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted to

Preliminary Non-GAAP Net Loss attributable to ADTRAN Holdings, Inc. and

Preliminary Non-GAAP Loss per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

 

September 30,
2024

 

September 30,
2023

Net Loss attributable to ADTRAN Holdings, Inc.

 

 

(31,239

)

 

$

(49,515

)

 

$

(78,210

)

 

 

$

(404,955

)

 

$

(156,697

)

Plus: Net (Loss) Income attributable to non-controlling interest (1)

 

 

2,382

 

 

 

2,504

 

 

 

2,561

 

 

 

 

7,417

 

 

 

4,380

 

Net Loss inclusive of non-controlling interest

 

$

(28,857

)

 

$

(47,011

)

 

$

(75,649

)

 

 

$

(397,538

)

 

$

(152,317

)

Acquisition related expenses, amortizations and adjustments

 

 

15,330

 

 

 

17,297

 

 

 

18,070

 

 

 

 

47,685

 

 

 

93,069

 

Stock-based compensation expense

 

 

3,396

 

 

 

3,601

 

 

 

3,530

 

 

 

 

10,719

 

 

 

11,537

 

Deferred compensation adjustments (2)

 

 

177

 

 

 

(48

)

 

 

(684

)

 

 

 

(370

)

 

 

(3,101

)

Pension adjustments (3)

 

 

7

 

 

 

7

 

 

 

7

 

 

 

 

21

 

 

 

20

 

Restructuring expenses

 

 

5,936

 

 

 

17,530

 

 

 

24,873

 

 

 

 

40,576

 

 

 

33,178

 

Integration expenses

 

 

367

 

 

 

566

 

 

 

1,639

 

 

 

 

1,447

 

 

 

3,051

 

Goodwill impairment

 

 

 

 

 

 

 

 

37,874

 

 

 

 

292,583

 

 

 

37,874

 

Tax effect of adjustments to net loss (4)

 

 

(712

)

 

 

755

 

 

 

(21,024

)

 

 

 

(19,022

)

 

 

(50,146

)

Non-GAAP Net Loss inclusive of non-controlling interest

 

$

(4,356

)

 

$

(7,303

)

 

$

(11,364

)

 

 

$

(23,899

)

 

$

(26,835

)

Less: Non-GAAP Net (Loss) Income attributable to non-controlling interest (1)

 

 

2,382

 

 

 

2,504

 

 

 

2,561

 

 

 

 

7,417

 

 

 

5,909

 

Non-GAAP Net Loss attributable to ADTRAN Holdings, Inc.

 

$

(6,738

)

 

$

(9,807

)

 

$

(13,925

)

 

 

$

(31,316

)

 

$

(32,744

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net Income attributable to non-controlling interest (1)

 

$

2,382

 

 

$

2,504

 

 

$

2,561

 

 

 

$

7,417

 

 

$

4,380

 

Acquisition related expenses, amortizations and adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,457

 

Restructuring expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29

 

Integration expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

 

Non-GAAP Net Income attributable to non-controlling interest (1)

 

$

2,382

 

 

$

2,504

 

 

$

2,561

 

 

 

$

7,417

 

 

$

5,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

78,952

 

 

 

78,852

 

 

 

78,389

 

 

 

 

78,873

 

 

 

78,378

 

Weighted average shares outstanding – diluted

 

 

78,952

 

 

 

78,852

 

 

 

78,389

 

 

 

 

78,873

 

 

 

78,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share attributable to ADTRAN Holdings, Inc. – basic

 

$

(0.36

)

(5)

$

(0.63

)

 

$

(1.00

)

 

 

$

(5.10

)

(5)

$

(2.00

)

Loss per common share attributable to ADTRAN Holdings, Inc. – diluted

 

$

(0.36

)

(5)

$

(0.63

)

 

$

(1.00

)

 

 

$

(5.10

)

(5)

$

(2.00

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Loss per common share attributable to ADTRAN – basic

 

$

(0.05

)

(5)

$

(0.12

)

 

$

(0.18

)

 

 

$

(0.36

)

(5)

$

(0.42

)

Non-GAAP Loss per common share attributable to ADTRAN – diluted

 

$

(0.05

)

(5)

$

(0.12

)

 

$

(0.18

)

 

 

$

(0.36

)

(5)

$

(0.42

)

(1) Represents the non-controlling interest portion of the Company's ownership of Adtran Networks pre-DPLTA and the annual recurring compensation earned by redeemable non-controlling interests and accrued by the Company post-DPLTA.

(2) Includes non-cash change in fair value of equity investments held in deferred compensation plans offered to certain employees.

(3) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries.

(4) Represents the tax effect of non-GAAP adjustments. Beginning in period ending September 30, 2024, the Company changed its method of calculating non-GAAP income taxes by applying blended statutory tax rates to non-GAAP losses before income taxes in order to include current and deferred income tax expenses that are commensurate with the non-GAAP measure of profitability. The blended statutory tax rate is calculated using 0%, resulting in no tax benefits net of impact of valuation allowance, for the loss jurisdiction’s non-GAAP losses before income taxes and 30% for all remaining jurisdictions’ non-GAAP income before income taxes. Prior periods have been adjusted to reflect the application of blended statutory tax rates, net of impact of valuation allowance, to non-GAAP losses before income taxes as opposed to the previous application of blended statutory and effective tax rates to separate non-GAAP adjustments. We previously reported the tax effect of the adjustment to non-GAAP net loss under the prior method of $7.9 million, $49.1 million and $21.0 million for the three and nine months ended September 30, 2023 and for the three months ended June 30, 2024, respectively.

(5) Loss per common share attributable to ADTRAN Holdings, Inc. and Non-GAAP Loss per common share attributable to ADTRAN Holdings, Inc reflects $3.0 million of gain on redemption of redeemable non-controlling interest for the three and nine months ended September 30, 2024.

Supplemental Information

Reconciliation of Preliminary Net Cash Provided By (Used In) Operating Activities to Preliminary Free Cash Flow

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

September 30,

 

 

2024

 

2024

 

2023

 

 

2024

 

2023

Net Cash provided by (used in) operating activities

 

$

42,030

 

 

$

19,898

 

 

$

6,846

 

 

 

$

98,526

 

 

$

(29,314

)

Purchases of property, plant and equipment(1)

 

 

(18,814

)

 

 

(15,995

)

 

 

(13,556

)

 

 

 

(48,183

)

 

 

(33,674

)

Free cash flow

 

$

23,216

 

 

$

3,903

 

 

$

(6,710

)

 

 

$

50,343

 

 

$

(62,988

)

 

(1) Purchases related to capital expenditures.

 

For media

Gareth Spence

+44 1904 699 358

public.relations@adtran.com

For investors

Peter Schuman

+1 650 743 7948

investor.relations@adtran.com

Source: ADTRAN Holdings, Inc.

FAQ

What was ADTRAN's (ADTN) revenue in Q3 2024?

ADTRAN Holdings reported revenue of $227.7 million in Q3 2024, which was above the mid-point of guidance and showed sequential growth.

What is ADTRAN's (ADTN) revenue guidance for Q4 2024?

ADTRAN Holdings expects Q4 2024 revenue to be between $230 million and $245 million.

What were ADTRAN's (ADTN) Q3 2024 earnings per share?

ADTRAN reported a GAAP diluted loss per share of $0.36 and a Non-GAAP diluted loss per share of $0.05 in Q3 2024.

What was ADTRAN's (ADTN) gross margin in Q3 2024?

ADTRAN's Q3 2024 GAAP gross margin was 37.4%, while Non-GAAP gross margin was 42.1%, showing sequential increases of 134 and 17 basis points respectively.

ADTRAN Holdings, Inc.

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