HUNTSVILLE, Ala.--(BUSINESS WIRE)--February 25, 2026--
ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) ("ADTRAN Holdings" "ADTRAN" or the "Company") today announced its unaudited financial results for the fourth quarter ended December 31, 2025.
-- Revenue: $291.6 million, up 20.1% year-over-year.
-- GAAP gross margin of 39.0%; Non-GAAP gross margin of 42.5%; up 213 and
122 basis points year-over-year, respectively.
-- Operating margin: GAAP operating margin of 1.5%; non-GAAP operating
margin of 6.4%.
-- Net cash provided by operating activities of $42.2 million.
-- GAAP diluted loss per share of $0.02; non-GAAP diluted earnings per
share of $0.16.
-- Cash and cash equivalents of $95.7 million.
ADTRAN Holdings Chairman and Chief Executive Officer Tom Stanton stated, "We delivered a strong fourth quarter, with revenue above our outlook and growth across all three revenue categories. Performance reflected solid execution and sustained fiber investment across our core markets."
Mr. Stanton added, "As we look at 2026, we see solid momentum with cloud and enterprise customers, strong broadband activity in the US and increasing high-risk vendor replacement initiatives in Europe. Our priorities remain focused on expanding operating margin, cash generation, and converting the customer opportunities we are seeing across our portfolio."
Business outlook(1)
For the first quarter of 2026, the Company expects revenue to be within a range of $275.0 to $295.0 million. Non-GAAP operating margin is expected to be within a range of 4.0% to 8.0%.
(1) Non-GAAP operating margin (which is calculated as non-GAAP operating income (loss) divided by revenue) is a non-GAAP financial measure. The Company has provided guidance for its first quarter 2026 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, such as acquisition related expenses, amortizations and adjustments, stock-based compensation expense, restructuring expenses, integration expenses, deferred compensation adjustments, professional fees and other expenses, and goodwill impairment, 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.
Conference call
The Company will hold a conference call to discuss its fourth quarter and full year 2025 results on Thursday, February 26, 2026, at 7:30 a.m. Central Time (2:30 p.m. Central European Time). The Company will webcast this conference call at the events and presentations section of ADTRAN Holdings, Inc. Investor Relations website at https://events.q4inc.com/attendee/203363753 approximately 10 minutes before the start of the call, or you may dial 1-888-330-2391 (Toll-Free US) or 1-240-789-2702, and use Conference ID 8936454.
An online replay of the Company's conference call, as well as the transcript of the call, will be available on the Investor Relations site https://investors.adtran.com/shortly 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.
Upcoming conference schedule
March 10, 2026: Stifel 2026 One-on-One Conference -- New York
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 majority shareholder of Adtran Networks SE, formerly ADVA Optical Networking SE ("Adtran Networks"). Find more at Adtran.com, LinkedIn and X.
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 future market conditions, future priorities, customer demand, (including with respect to future fiber investments, upgrade activity in the U.S. and Europe, and future customer opportunities), and ADTRAN Holdings' strategy, 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," "look forward," 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 our ability to remain in compliance with the covenants set forth in and satisfy the payment obligations under our credit agreement and convertible notes, to satisfy our payment obligations to Adtran Networks' minority shareholders under the Domination and Profit and Loss Transfer Agreement between us and Adtran Networks (the "DPLTA"), and to make payments to Adtran Networks in order to absorb its annual net loss pursuant to the DPLTA; (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 shifting customer spending patterns; (iii) risks and uncertainties related to our inventory practices and ability to match customer demand; (iv) risks and uncertainties relating to our level of indebtedness and our ability to generate cash; (v) risks and uncertainties relating to ongoing material weaknesses in our internal control over financial reporting; (vi) risks posed by changes in general economic conditions and monetary, fiscal and trade policies, including tariffs; (vii) risks posed by potential breaches of information systems and cyber-attacks; (viii) the risk that we may not be able to effectively compete, including through product improvements and development; and (ix) the other risks set forth in our public filings made with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K for the year ended December 31, 2024, as amended, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025, June 30, 2025, and September 30, 2025, and our Annual Reporting on Form 10-K for the year ended December 31, 2025 to be filed with the SEC.
Explanation of use of non-GAAP financial measures
Set forth in the tables below under the heading "Supplemental Information" are reconciliations of gross profit, gross margin, operating expenses, operating income (loss), operating margin, other expense, net loss inclusive of the non-controlling interest, net loss attributable to the Company, and loss per share - basic and diluted, attributable to the Company, and net cash provided by 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 operating margin, non-GAAP other expense, non-GAAP net income (loss) inclusive of the non-controlling interest, non-GAAP net income (loss) attributable to the Company, non-GAAP net earnings (loss) per share - basic and diluted, attributable to the Company, and free cash flow, respectively. Such non-GAAP measures exclude acquisition-related expenses, amortization and adjustments (consisting of intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations), stock-based compensation expense, restructuring expenses, integration expenses, deferred compensation adjustments, goodwill impairments, professional fees and other expenses, amortization of pension actuarial losses, the tax effect of these adjustments to net loss and purchases of property, plant and equipment, and developed technologies. 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. 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
(Unaudited)
(In thousands)
December 31, December 31,
ASSETS 2025 2024
-------------- --------------
Current Assets
Cash and cash equivalents $ 95,696 $ 76,021
Accounts receivable, net 210,687 178,030
Other receivables 7,046 9,775
Inventory, net 215,736 261,557
Income tax receivable 3,667 5,461
Prepaid expenses and other
current assets 55,317 56,395
Short-term investments -
deferred compensation 35,174 --
Assets held for sale 11,901 11,901
--------- ---------
Total Current Assets 635,224 599,140
Property, plant and equipment,
net 124,384 106,454
Goodwill 59,983 52,918
Intangibles, net 294,047 284,893
Deferred tax assets 16,481 17,826
Other non-current assets 73,352 78,128
Long-term investments 1,022 32,060
--------- ---------
Total Assets $ 1,204,493 $ 1,171,419
========= =========
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 167,337 $ 171,825
Unearned revenue 87,541 52,701
Accrued expenses and other
liabilities 33,690 34,158
Accrued wages and benefits 32,203 32,853
Deferred compensation liability 37,447 --
Income tax payable 3,642 1,936
--------- ---------
Total Current Liabilities 361,860 293,473
Non-current revolving credit
agreement outstanding 25,000 189,576
Non-current convertible senior
notes, net of debt issuance
costs 193,038 --
Deferred tax liabilities 27,453 30,372
Non-current unearned revenue 27,143 22,065
Non-current pension liability 6,277 8,983
Non-current deferred
compensation liability -- 33,203
Non-current lease obligations 27,000 25,925
Other non-current liabilities 17,564 17,928
--------- ---------
Total Liabilities 685,335 621,525
Redeemable Non-Controlling Interest 373,328 422,943
Equity
Common stock 802 795
Additional paid-in capital 801,269 808,913
Accumulated other comprehensive
income 78,877 11,254
Retained deficit (730,010) (688,813)
Treasury stock (5,108) (5,198)
--------- ---------
Total Equity 145,830 126,951
--------- ---------
Total Liabilities and Equity $ 1,204,493 $ 1,171,419
========= =========
Condensed Consolidated Statements of Loss
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------- ------------------------------
2025 2024 2025 2024
--------- --------- ----------- ------------
Revenue
Network Solutions $242,653 $197,009 $ 896,911 $ 738,964
Services & Support 48,907 45,843 186,896 183,756
------- ------- --------- --------
Total Revenue 291,560 242,852 1,083,807 922,720
Cost of Revenue
Network Solutions 157,472 135,861 592,141 517,220
Network Solutions -
charges and
inventory
write-down -- -- -- 8,597
Services & Support 20,359 17,435 76,711 72,739
------- ------- --------- --------
Total Cost of
Revenue 177,831 153,296 668,852 598,556
Gross Profit 113,729 89,556 414,955 324,164
Selling, general and
administrative
expenses 57,409 57,013 226,275 232,918
Research and
development
expenses 51,842 49,314 204,276 221,458
Goodwill impairment -- -- -- 297,353
------- ------- --------- --------
Operating Income
(Loss) 4,478 (16,771) (15,596) (427,565)
Interest and dividend
income 1,703 1,631 2,321 3,058
Interest expense (4,520) (4,870) (19,344) (22,053)
Net investment (loss)
gain (574) (920) 3,001 3,587
Other income
(expense), net 805 687 (1,632) 246
------- ------- --------- --------
Income (Loss)
Before Income
Taxes 1,892 (20,243) (31,250) (442,727)
Income tax expense (3,172) (23,461) (4,993) (7,340)
------- ------- --------- --------
Net Loss $ (1,280) $(43,704) $ (36,243) $(450,067)
Net Income
attributable to
non-controlling
interest (1) 2,316 2,407 9,413 9,824
------- ------- --------- --------
Net Loss
attributable to
ADTRAN Holdings,
Inc. $ (3,596) $(46,111) $ (45,656) $(459,891)
======= ======= ========= ========
Weighted average
shares outstanding
-- basic 79,877 79,091 79,742 78,928
Weighted average
shares outstanding
-- diluted 79,877 79,091 79,742 78,928
Loss per common share
attributable to
ADTRAN Holdings,
Inc. -- basic $ (0.02) (2 () $ (0.58) $ (0.52) (1 () $ (5.79)
Loss per common share
attributable to
ADTRAN Holdings,
Inc. -- diluted $ (0.02) (2 () $ (0.58) $ (0.52) (1 () $ (5.79)
(1) For the three and twelve months ended December 31, 2025 we accrued $2.3 million
and $9.3 million, respectively, net income attributable to non-controlling interest,
representing the recurring cash compensation earned by non-controlling interest
shareholders post-DPLTA. For the three and twelve months ended December 31, 2024, we
accrued $2.4 million and $9.8 million, respectively, representing the recurring cash
compensation earned by non-controlling interest shareholders post-DPLTA.
(2) Loss per common share attributable to ADTRAN Holdings, Inc. - basic and diluted -
reflects $2.1 million and $4.1 million effect of redemption of RNCI for the three and
twelve months ended December 31, 2025 and $0 and $3.0 million effect of redemption of
RNCI for the three and twelve months ended December 31, 2024.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Twelve Months Ended
December 31,
2025 2024
--------- ---------
Cash flows from operating activities:
Net Loss $ (36,243) $(450,067)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 92,546 90,529
Goodwill impairment -- 297,353
Amortization of revolving credit
facility issuance costs 1,351 3,950
Amortization of convertible notes
issuance costs 441 --
Gain on investments (4,740) (5,030)
Net loss on disposal of property,
plant and equipment 228 1,371
Stock-based compensation expense 10,062 15,988
Deferred income taxes (3,847) 5,576
Inventory write down - business
efficiency program -- 4,135
Inventory reserves (2,541) 5,316
Change in operating assets and
liabilities:
Accounts receivable, net (18,301) 46,108
Other receivables 5,767 10,713
Income taxes receivable 2,034 648
Inventory 64,494 79,985
Prepaid expenses other current
assets and other assets 19,223 (13,445)
Accounts payable 17,982 10,238
Accrued expenses and other
liabilities (17,967) 4,873
Income taxes payable (722) (4,670)
-------- --------
Net cash provided by operating activities 129,767 103,571
-------- --------
Cash flows from investing activities:
Purchases of property, plant and
equipment (31,737) (34,501)
Purchases of intangibles - developed
technology (37,528) (30,671)
Proceeds from sales and maturities of
available-for-sale investments 1,019 1,240
Purchases of available-for-sale
investments (383) (268)
Payments for beneficial interests in
securitized accounts receivable (539) (55)
-------- --------
Net cash used in investing activities (69,168) (64,255)
-------- --------
Cash flows from financing activities:
Tax withholdings related to
stock-based compensation settlements (1,478) (1,143)
Proceeds from stock option exercises 1,829 824
Proceeds from receivables purchase
agreement -- 68,556
Repayments on receivables purchase
agreement -- (83,772)
Proceeds from draw on revolving credit
agreements 49,000 26,000
Repayment of revolving credit
agreements (214,000) (31,000)
Redemption of redeemable
non-controlling interest (46,575) (17,398)
Payment of annual recurring
compensation to non-controlling
interest (10,053) (10,084)
Payment of debt issuance cost (9,003) (1,994)
Proceeds from issuance of senior
convertible notes 201,250 --
Payments for capped call transactions
related to convertible senior notes (17,650) --
-------- --------
Net cash used in financing activities (46,680) (50,011)
-------- --------
Net increase (decrease) in cash and
cash equivalents 13,919 (10,695)
Effect of exchange rate changes 5,756 (451)
Cash and cash equivalents, beginning
of year 76,021 87,167
-------- --------
Cash and cash equivalents, end of year $ 95,696 $ 76,021
======== ========
Supplemental disclosure of cash financing
activities:
Cash paid for interest $ 13,273 $ 20,884
Cash used in operating activities
related to operating leases $ 10,216 $ 9,274
Supplemental disclosure of non-cash
investing activities and financing
activities:
Right-of-use assets obtained in
exchange for lease obligations $ 6,432 $ 5,317
Purchases of property, plant and
equipment included in accounts
payable $ 3,716 $ 2,635
Purchases of property, plant and
equipment included in other
non-current liabilities $ 5,119 $ --
Redemption of redeemable
non-controlling interest $ 4,085 $ 2,986
Supplemental Information
Reconciliation of Gross Profit and Gross Margin to
Non-GAAP Gross Profit and Non-GAAP Gross Margin
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
--------------------------------------- ------------------------
December December
December September 31, December 31,
31, 2025 30, 2025 2024 31, 2025 2024
--------- ---------- -------- ---------- --------
Total Revenue $ 291,560 $ 279,435 $242,852 $1,083,807 $922,720
Cost of Revenue $ 177,831 $ 172,309 $153,296 $ 668,852 $598,556
Acquisition-related
expenses,
amortization and
adjustments (1) (9,964) (10,140) (9,980) (40,534) (40,497)
Stock-based
compensation
expense (232) (265) (317) (986) (1,142)
Restructuring
expenses (2) -- -- (538) -- (14,580)
Integration expenses
(3) -- -- 123 -- 19
-------- --------- ------- --------- -------
Non-GAAP Cost of
Revenue $ 167,635 $ 161,904 $142,584 $ 627,332 $542,356
======== ========= ======= ========= =======
Gross Profit $ 113,729 $ 107,126 $ 89,556 $ 414,955 $324,164
Non-GAAP Gross Profit $ 123,925 $ 117,531 $100,268 $ 456,475 $380,364
Gross Margin 39.0% 38.3% 36.9% 38.3% 35.1%
Non-GAAP Gross Margin 42.5% 42.1% 41.3% 42.1% 41.2%
(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 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 these charges for the
purpose of calculating our non-GAAP measures, primarily because they are noncash expenses and
our internal benchmarking analyses evidence that many industry participants and peers present
non-GAAP financial measures excluding intangible asset amortization. Although this does not
directly affect our cash position, the loss in value of intangible assets over time can have a
material impact on the equivalent GAAP earnings measure.
(2) Includes expenses for a Business Efficiency Program designed to optimize the assets and
business processes following the business combination with Adtran Networks. The Business
Efficiency Program was completed as of 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, which bonus
program was completed as of December 31, 2024.
Supplemental Information
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
-------------------------------------------- ---------------------------
December
December September 31, December December
31, 2025 30, 2025 2024 31, 2025 31, 2024
--------- ---------- -------- --------- ---------
Operating Expenses $ 109,251 $ 109,914 $106,327 $ 430,551 $ 751,729
Acquisition-related
expenses,
amortization and
adjustments (1) (1,805) (2) (1,898) (8) (5,294) (11) (8,127) (15) (22,462) (19)
Stock-based
compensation
expense (1,092) (3) (2,589) (9) (2,853) (12) (9,076) (16) (12,810) (20)
Restructuring
expenses (4) -- -- (3,567) (13) 284 (17) (30,101) (21)
Integration expenses
(5) -- -- (586) (14) -- (1,930) (22)
Deferred
compensation
adjustments (6) 781 (2,317) 451 (3,023) (3,808)
Goodwill impairment -- -- -- -- (297,353) (23)
Professional fees
and other expenses (1,988) (7) (694) (10) -- (5,835) (18) --
-------- --------- ------- -------- --------
Non-GAAP Operating
Expenses $ 105,147 $ 102,416 $ 94,478 $ 404,774 $ 383,265
======== ========= ======= ======== ========
(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 these charges for the purpose of calculating our non-GAAP measures, primarily
because they are noncash expenses and our internal benchmarking analyses evidence that many industry
participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although
this does not directly affect our cash position, the loss in value of intangible assets over time can have a
material impact on the equivalent GAAP earnings measure.
(2) Includes intangible amortization of developed technology, customer relationships, and trade names
acquired in connection with business combinations, of which $1.4 million is included in selling, general and
administrative expenses and $0.4 million is included in research and development expenses on the condensed
consolidated statements of loss.
(3) $0.4 million is included in selling, general and administrative expenses and $0.7 million is included in
research and development expenses on the condensed consolidated statements of loss.
(4) Includes expenses for a Business Efficiency Program designed to optimize the assets and business
processes following the business combination with Adtran Networks. The Business Efficiency Program was
completed as of December 31, 2024.
(5) 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, which was completed as of December 31,
2024.
(6) 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.
(7) $2.0 million is included in selling, general and administrative expenses on the condensed consolidated
statements of loss. Includes professional fees related to an internal investigation and a related SEC
inquiry, a provision in connection with a potential 401(k) plan corrective action, and fees relating to other
one-time professional fees and business expenses.
(8) Includes intangible amortization of developed technology, customer relationships, and trade names
acquired in connection with business combinations, of which $1.4 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.
(9) $1.8 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.
(10) $0.7 million is included in selling, general and administrative expenses on the condensed consolidated
statements of loss. Includes professional fees related to an internal investigation and a related SEC
inquiry, as well as fees relating to other one-time professional fees and business expenses.
(11) Includes $4.3 million of intangible amortization of developed technology, customer relationships, and
trade names acquired in connection with business combinations and $1.0 million of legal and advisory fees
related to a potential strategic transaction which are included in selling, general and administrative
expenses on the condensed consolidated statements of loss.
(12) $1.9 million is included in selling, general and administrative expenses and $1.0 million is included in
research and development expenses on the condensed consolidated statements of loss.
(13) $1.2 million is included in selling, general and administrative expenses and $2.4 million is included in
research and development expenses on the condensed consolidated statements of loss. Includes expenses for
restructuring program designed to optimize the assets and business processes following the business
combination with Adtran Networks SE. The restructuring program commenced upon the closing of the business
combination with Adtran Networks SE and was substantially completed in late 2024. Additionally, as part of
the Business Efficiency Program, management determined to close a facility in Greifswald, Germany which
occurred in December 2024. The Business Efficiency Program was completed as of December 31, 2024.
(14) $0.6 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 SE which bonus
program was completed as of December 31, 2024.
(15) Includes intangible amortization of developed technology, customer relationships, and trade names
acquired in connection with business combinations, of which $6.4 million is included in selling, general and
administrative expenses and $1.7 million is included in research and development expenses on the condensed
consolidated statements of loss.
(16) $6.0 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.
(17) Includes a true-up of expenses on the condensed consolidated statements of loss for a Business
Efficiency Program designed to optimize the assets and business processes following the business combination
with Adtran Networks. The Business Efficiency Program was completed as of December 31, 2024.
(18) $5.8 million is included in selling, general and administrative expenses on the condensed consolidated
statements of loss. Includes professional fees related to an internal investigation and a related SEC
inquiry, a provision in connection with a potential 401(k) plan corrective action, employee exit costs and
fees relating to other one-time professional fees and business expenses.
(19) Includes $17.6 million of intangible amortization of developed technology, customer relationships, and
trade names acquired in connection with business combinations and $4.9 million of legal and advisory fees
related to a potential strategic transaction which are included in selling, general and administrative
expenses on the condensed consolidated statements of loss.
(20) $9.0 million is included in selling, general and administrative expenses and $3.8 million is included in
research and development expenses on the condensed consolidated statements of loss.
(21) $9.1 million is included in selling, general and administrative expenses and $21.0 million is included
in research and development expenses on the condensed consolidated statements of loss. Includes expenses for
restructuring program designed to optimize the assets and business processes following the business
combination with Adtran Networks SE. The restructuring program commenced upon the closing of the business
combination with Adtran Networks SE and was substantially completed in late 2024. Additionally, as part of
the Business Efficiency Program, management determined to close a facility in Greifswald, Germany which
occurred in December 2024. The Business Efficiency Program was completed as of December 31, 2024.
(22) $1.8 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, 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 SE.
(23) 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.
Supplemental Information Reconciliation of Operating Income (Loss) and Operating Margin to
Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin (Unaudited) (In thousands)
Three Months Ended Twelve Months Ended
--------------------------------------- -------------------------
December
December September 31, December December
31, 2025 30, 2025 2024 31, 2025 31, 2024
--------- ---------- -------- ---------- ---------
Total Revenue $ 291,560 $ 279,435 $242,852 $1,083,807 $ 922,720
Operating
Income
(Loss) $ 4,478 $ (2,788) $(16,771) $ (15,596) $(427,565)
Acquisition
related
expenses,
amortizations
and
adjustments
(1) 11,769 12,038 15,274 48,661 62,959
Stock-based
compensation
expense 1,324 2,855 3,169 10,062 13,951
Restructuring
expenses (2) -- -- 4,105 (284) 44,681
Integration
expenses (3) -- -- 464 -- 1,911
Deferred
compensation
adjustments
(4) (781) 2,317 (451) 3,023 3,808
Goodwill
impairment
(5) -- -- -- -- 297,353
Professional
fees and
other
expenses (6) 1,988 694 -- 5,835 --
-------- --------- ------- --------- --------
Non-GAAP
Operating
Income
(Loss) $ 18,778 $ 15,116 $ 5,790 $ 51,701 $ (2,902)
======== ========= ======= ========= ========
Operating
Margin 1.5% -1.0% -6.9% -1.4% -46.3%
Non-GAAP
Operating
Margin 6.4% 5.4% 2.4% 4.8% -0.3%
(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 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 these
charges for the purpose of calculating our non-GAAP measures, primarily because they are
noncash expenses and our internal benchmarking analyses evidence that many industry
participants and peers present non-GAAP financial measures excluding intangible asset
amortization. Although this does not directly affect our cash position, the loss in value of
intangible assets over time can have a material impact on the equivalent GAAP earnings
measure.
(2) Includes expenses for the Company's Business Efficiency Program, which was designed to
optimize the assets and business processes following the business combination with Adtran
Networks. The Business Efficiency Program was completed as of December 31, 2024.
(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, which bonus program was completed as of December 31, 2024.
(4) Includes non-cash change in fair value of equity investments held in the ADTRAN
Holdings, Inc. Deferred Compensation Program for certain 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 elevated customer inventory adjustments.
(6) Includes professional fees related to an internal investigation and a related SEC
inquiry, a provision in connection with a potential 401(k) plan corrective action, employee
exit costs and fees relating to other one-time professional fees and business expenses.
Supplemental Information
Reconciliation of Other Expense to Non-GAAP Other Expense
(Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
----------------------------------- --------------------
December
December September December December 31,
31, 2025 30, 2025 31, 2024 31, 2025 2024
--------- ---------- ---------- --------- --------
Interest and
dividend
income $ 1,703 $ 291 $ 1,631 $ 2,321 $ 3,058
Interest
expense (4,520) (5,499) (4,870) (19,344) (22,053)
Net investment
(loss) gain (574) 2,186 (920) 3,001 3,587
Other income
(expense),
net 805 (745) 687 (1,632) 246
-------- --------- ------ -------- -------
Total Other
Expense $ (2,586) $ (3,767) $ (3,472) $ (15,654) $(15,162)
Deferred
compensation
adjustments
(1) 601 (2,210) 1,090 (2,928) (3,539)
Pension
expense (2) 12 13 7 47 28
-------- --------- ------ -------- -------
Non-GAAP Other
Expense $ (1,973) $ (5,964) $ (2,375) $ (18,535) $(18,673)
======== ========= ====== ======== =======
(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 Net Loss inclusive of
Non-Controlling Interest to Non-GAAP Net Income (Loss) inclusive of
Non-Controlling Interest (Unaudited) and Reconciliation of Net Loss
attributable to ADTRAN Holdings, Inc. and Loss per Common Share attributable to
ADTRAN Holdings, Inc. -- Basic and Diluted to Non-GAAP Net Income (Loss)
attributable to ADTRAN Holdings, Inc. and Non-GAAP Earnings (Loss) per Common
Share attributable to ADTRAN Holdings, Inc. -- Basic and Diluted (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
--------------------------------- ---------------------
December
December September 31, December December
31, 2025 30, 2025 2024 31, 2025 31, 2024
--------- ---------- -------- --------- ---------
Net Loss
attributable to
ADTRAN Holdings,
Inc. common
stockholders $ (1,521) $ (9,743) $(46,106) $ (41,571) $(456,910)
Effect of
redemption of
RNCI (1) (2,075) (519) (5) (4,085) (2,981)
-------- --------- ------- -------- --------
Net Loss
attributable to
ADTRAN Holdings,
Inc. $ (3,596) $ (10,262) $(46,111) $ (45,656) $(459,891)
Net Income
attributable to
non-controlling
interest (2) 2,316 2,505 2,407 9,413 9,824
-------- --------- ------- -------- --------
Net Loss
inclusive of
non-controlling
interest $ (1,280) $ (7,757) $(43,704) $ (36,243) $(450,067)
Acquisition
related
expenses,
amortization and
adjustments (3) 11,769 12,038 15,274 48,661 62,959
Stock-based
compensation
expense 1,324 2,855 3,169 10,062 13,951
Deferred
compensation
adjustments (4) (180) 107 639 95 269
Pension
adjustments (5) 12 13 7 47 28
Restructuring
expenses (6) -- -- 4,105 (284) 44,681
Integration
expenses (7) -- -- 464 -- 1,911
Goodwill
impairment -- -- -- -- 297,353
Professional fees
and other
expenses (8) 1,988 694 -- 5,835 --
Tax effect of
adjustments to
net loss (628) (2,301) 20,675 (4,521) 2,709
-------- --------- ------- -------- --------
Non-GAAP Net
Income (Loss)
inclusive of
non-controlling
interest $ 13,005 $ 5,649 $ 629 $ 23,652 $ (26,206)
Net Income
attributable to
non-controlling
interest (2) 2,316 2,505 2,407 9,413 9,824
-------- --------- ------- -------- --------
Non-GAAP Net
Income (Loss)
attributable to
ADTRAN Holdings,
Inc. $ 10,689 $ 3,144 $ (1,778) $ 14,239 $ (36,030)
======== ========= ======= ======== ========
Effect of
redemption of
RNCI (1) 2,075 519 5 4,085 2,981
-------- --------- ------- -------- --------
Non-GAAP Net
Income (Loss)
attributable to
ADTRAN Holdings,
Inc. common
stockholders $ 12,764 $ 3,663 $ (1,773) $ 18,324 $ (33,049)
======== ========= ======= ======== ========
Weighted average
shares
outstanding --
basic 79,877 79,803 79,091 79,742 78,928
Weighted average
shares
outstanding --
diluted 79,877 79,803 79,091 79,742 78,928
Loss per common
share
attributable to
ADTRAN Holdings,
Inc. - basic $ (0.02) $ (0.12) $ (0.58) $ (0.52) $ (5.79)
Loss per common
share
attributable to
ADTRAN Holdings,
Inc. - diluted $ (0.02) $ (0.12) $ (0.58) $ (0.52) $ (5.79)
Non-GAAP Earnings
(Loss) per
common share
attributable to
ADTRAN Holdings,
Inc. - basic $ 0.16 $ 0.05 $ (0.02) $ 0.23 $ (0.42)
Non-GAAP Earnings
(Loss) per
common share
attributable to
ADTRAN Holdings,
Inc. - diluted $ 0.16 $ 0.05 $ (0.02) $ 0.23 $ (0.42)
(1) Loss per common share attributable to ADTRAN Holdings, Inc. - basic and
diluted - reflects a $2.1 million and a $4.1 million effect of redemption of
RNCI for the three and twelve months ended December 31, 2025 and a $0 and a
$3.0 million effect of redemption of RNCI for the three and twelve months ended
December 31, 2024.
(2) 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.
(3) 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 these charges for the purpose of calculating our
non-GAAP measures, primarily because they are noncash expenses and our internal
benchmarking analyses evidence that many industry participants and peers
present non-GAAP financial measures excluding intangible asset amortization.
Although this does not directly affect our cash position, the loss in value of
intangible assets over time can have a material impact on the equivalent GAAP
earnings measure.
(4) Includes non-cash change in fair value of equity investments held in
deferred compensation plans offered to certain employees.
(5) Includes amortization of actuarial losses related to the Company's pension
plan for employees in certain foreign countries.
(6) Includes expenses for a Business Efficiency Program designed to optimize
the assets and business processes following the business combination with
Adtran Networks. The Business Efficiency Program was completed as of December
31, 2024.
(7) 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. Includes fees incurred for the expansion of
internal controls at Adtran Networks and the implementation of the DPLTA which
was completed as of December 31, 2024.
(8) Includes professional fees related to an internal investigation and a
related SEC inquiry, a provision in connection with a potential 401(k) plan
corrective action, employee exit costs and fees relating to other one-time
professional fees and business expenses.
Supplemental Information Reconciliation of Net Cash Provided By Operating
Activities to Free Cash Flow (Unaudited) (In thousands)
Three Months Ended Twelve Months Ended
--------------------------------- --------------------
December September December December December
31, 30, 31, 31, 31,
2025 2025 2024 2025 2024
--------- ---------- -------- --------- --------
Net cash
provided by
operating
activities $ 42,238 $ 12,188 $ 2,438 $ 129,767 $103,571
Purchases of
property,
plant and
equipment and
developed
technologies
(1) (19,708) (17,029) (14,335) (69,265) (65,172)
-------- --------- ------- -------- -------
Free cash flow
(Non-GAAP) $ 22,530 $ (4,841) $(11,897) $ 60,502 $ 38,399
======== ========= ======= ======== =======
(1) Purchases related to capital expenditures and developed technologies.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260225454653/en/
CONTACT: For media
Gareth Spence
+44 1904 699 358
public.relations@adtran.com
For investors
Peter Schuman, IRC
+1 256 963 6305
investor.relations@adtran.com
(END) Dow Jones Newswires
February 25, 2026 23:00 ET (04:00 GMT)
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