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1. Company Snapshot

1.a. Company Description

ADTRAN Holdings, Inc., through its subsidiaries, provides end-to-end fiber networking solutions for communications service provider, enterprises, and government customers in the United States, Germany, the United Kingdom, Mexico, and internationally.It operates through two segments, Network Solutions, and Services & Support.The company offers fiber access and fiber to the node platforms; transceivers, cables, and other miscellaneous materials; passive optical network optical line terminals; fiber to the distribution point Gfast distribution point units; cabinet and outside plant enclosures and services; packet optical transports; fixed wireless access platforms; and network management and subscriber services, and control and orchestration software.


It also provides broadband customer premises solutions, ethernet switches and routers, residential gateways, cloud-based software-as-a-service management platforms, virtual wireless local area networks, Internet of Things gateways, pre-sale and post-sale technical support, and multi-gigabit mesh Wi-Fi gateways.In addition, the company offers time division multiplexed and asynchronous transfer mode-based aggregation systems and customer devices; and high-bit-rate and asymmetric digital subscriber line, and other technologies.Further, it provides other access and aggregation, subscriber and experience, and traditional and other products, software, and services.


Additionally, the company engages in the provision of planning, engineering, program management, maintenance, installation, and commissioning services to implement customer network solutions; and customer devices solutions into consumer, small business, and enterprise locations.ADTRAN Holdings, Inc.is headquartered in Huntsville, Alabama.

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1.b. Last Insights on ADTN

ADTRAN Holdings' recent performance was driven by strong Q4 2024 earnings, with revenue up 7% sequentially and above the mid-point of outlook, backed by healthy demand trends across the portfolio in several regions. The company's gross margin and operating margin also improved sequentially on a GAAP and non-GAAP basis, above the mid-point of outlook. Additionally, ADTRAN secured new contracts, including a deal with Titan Telecom to boost connectivity infrastructure in South East Australia and a partnership with ACE Fiber to support network expansion in New Albany.

1.c. Company Highlights

2. ADTRAN's Q3 Results: A Strong Performance

ADTRAN reported a revenue of $279.4 million, near the upper end of their guidance, reflecting a strong year-over-year growth across all three revenue categories. This marks the fifth consecutive quarter of sequential growth and fourth consecutive quarter of year-over-year improvement. The company's operating profit exceeded the midpoint of their outlook, driven by disciplined execution and a focus on leveraging financial performance. The actual EPS came out at $0.05, slightly lower than the estimated $0.06. The company's non-GAAP operating margin was also higher, underscoring the solid execution and financial management.

Publication Date: Nov -24

📋 Highlights
  • Q3 Revenue Growth:: ADTRAN reported $279.4 million in revenue, reflecting strong year-over-year growth across all three revenue categories, with five consecutive quarters of sequential growth and four of YoY improvement.
  • Optical Networking Momentum:: Optical Networking solutions grew 47% YoY and 15% sequentially, driven by 15 new European customers, including deployments with a major service provider.
  • Margin Expansion Target:: Operating profit exceeded guidance, with a goal to reach 43% non-GAAP operating margin, deemed "line of sight" for achievement next year.
  • Capital Structure Strengthening:: A $201 million financing transaction reduced borrowing costs and improved liquidity, enhancing flexibility for long-term strategic goals.
  • BEAD Program Impact:: Anticipates improved BEAD spending by 2026, with orders expected in H1 2026, expected to drive operating margin expansion and eventually double-digit margins.

Segment Performance

The Optical Networking solutions grew 47% year-over-year and 15% sequentially, driven by strong momentum in Europe, including deployments with a new large service provider. The company added 15 new optical customers in the quarter, reflecting continued share gains and the expanding reach of their portfolio. Demand remains robust and geographically diverse, supporting a wide range of applications.

Financial Flexibility

The company closed on a $201 million financing transaction that lowered their borrowing cost and increased financial flexibility, strengthening their capital structure and positioning them to execute confidently on longer-term strategic objectives. As Tom Stanton mentioned, "We remain disciplined on terms and timing, and we'll provide updates as appropriate."

Outlook and Valuation

The company expects revenue between $275 million and $285 million and anticipates a non-GAAP operating margin of 3.5% to 7.5%. Analysts estimate next year's revenue growth at 8.5%. With a P/S Ratio of 0.56 and an EV/EBITDA of -15.59, the market seems to be pricing in a relatively modest growth expectation. The company's goal is to reach a non-GAAP margin of 43%, and they expect to bump up against this goal next year.

Growth Drivers

The company's growth is driven by the increasing demand for fiber networking solutions, particularly in Europe, where they are gaining significant market share. As Thomas Stanton mentioned, "there's a significant market share disruption that's happening in Europe right now, and we are the #1 winner in that market share grab." The optical space may see increased momentum earlier than the access space due to its project-by-project basis.

Margins and Expenses

The company has managed to keep gross margins constant despite some impact from memory prices. They expect OpEx to remain relatively flat compared to Q3. The company's goal is to reach double-digit margins eventually, with operating margin expansion expected in '26.

3. NewsRoom

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Henderson Municipal Power & Light builds multigigabit FTTH network with Adtran fiber access technology

Nov -25

Source: businesswire.com

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ACE Fiber uses Adtran's Mosaic One Clarity AI solution for proactive assurance, faster resolution and fewer truck rolls

Nov -18

Source: businesswire.com

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ADTRAN Holdings, Inc. (ADTN) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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ADTRAN Misses Q3 Earnings Estimates, Beats on Revenues

Nov -04

Source: zacks.com

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AlphaQuest LLC Has $163,000 Holdings in ADTRAN Holdings, Inc. $ADTN

Nov -04

Source: defenseworld.net

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ADTRAN Holdings, Inc. reports third quarter 2025 financial results

Nov -04

Source: businesswire.com

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ADTRAN (NASDAQ:ADTN) vs. Cannabix Technologies (OTCMKTS:BLOZF) Critical Analysis

Oct -24

Source: defenseworld.net

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Adtran launches industry-first Galileo OSNMA authentication for Oscilloquartz timing solutions

Oct -23

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.39%)

6. Segments

Network Solutions

Expected Growth: 12%

ADTRAN's Network Solutions segment growth is driven by increasing demand for fiber-based broadband infrastructure, 5G network deployments, and rising need for scalable and reliable network solutions. Additionally, the company's focus on software-defined access and fiber-to-the-premises solutions, as well as its strong relationships with Tier 1 carriers, contribute to its 12% growth.

Services & Support

Expected Growth: 8%

ADTRAN's Services & Support segment growth is driven by increasing demand for network infrastructure upgrades, expansion of fiber-based broadband services, and growing need for managed services. Additionally, the company's strategic partnerships, innovative solutions, and strong customer relationships contribute to its 8% growth rate.

7. Detailed Products

Mosaic One

A software-defined networking (SDN) and network functions virtualization (NFV) platform that enables service providers to create, deploy, and manage network services

Total Access 5000 (TA5000)

A fiber-based multi-service access node that provides high-speed broadband services to residential and business customers

NetVanta

A family of managed Ethernet switches, routers, and IP business gateways that provide secure, reliable, and scalable network infrastructure

ADTRAN Mosaic Cloud Platform

A cloud-based platform that enables service providers to create, deploy, and manage cloud-based network services

Optical Networking Edge (ONE)

A family of optical networking products that provide high-speed, high-capacity optical transport solutions

8. ADTRAN Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ADTRAN Holdings, Inc. faces moderate threat from substitutes due to the presence of alternative networking solutions and technologies.

Bargaining Power Of Customers

ADTRAN Holdings, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

ADTRAN Holdings, Inc. relies on a few key suppliers for components, which gives them some bargaining power, but the company's size and scale also give it negotiating power.

Threat Of New Entrants

The telecommunications equipment industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which reduces the threat of new entrants.

Intensity Of Rivalry

The telecommunications equipment industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.45%
Debt Cost 6.21%
Equity Weight 74.55%
Equity Cost 9.62%
WACC 8.75%
Leverage 34.14%

11. Quality Control: ADTRAN Holdings, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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NETGEAR

A-Score: 4.8/10

Value: 8.0

Growth: 4.2

Quality: 3.1

Yield: 0.0

Momentum: 9.0

Volatility: 4.3

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A-Score: 4.5/10

Value: 7.8

Growth: 3.8

Quality: 3.5

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

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A-Score: 4.2/10

Value: 1.8

Growth: 5.1

Quality: 5.6

Yield: 0.0

Momentum: 8.5

Volatility: 4.0

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ADTRAN Holdings

A-Score: 4.1/10

Value: 5.7

Growth: 3.4

Quality: 2.4

Yield: 1.0

Momentum: 9.0

Volatility: 3.0

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Inseego

A-Score: 3.6/10

Value: 5.7

Growth: 5.7

Quality: 6.0

Yield: 0.0

Momentum: 3.0

Volatility: 1.3

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AmpliTech

A-Score: 2.9/10

Value: 7.4

Growth: 1.7

Quality: 3.2

Yield: 0.0

Momentum: 5.0

Volatility: 0.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.53$

Current Price

8.53$

Potential

-0.00%

Expected Cash-Flows