We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is ADTRAN Holdings (ADTN) Down 14.7% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for ADTRAN Holdings (ADTN - Free Report) . Shares have lost about 14.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ADTRAN Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ADTRAN Q1 Earnings Beat Estimates on Strong Revenue Growth
ADTRAN reported strong first-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Non-GAAP earnings came in at 14 cents per share, beating the consensus estimate of 9 cents.
Revenues of $286.1 million edged past the consensus estimate of $285 million by 0.4% and increased 15.5% year over year, driven by solid demand across core markets and improved operating leverage.
ADTN Delivers Solid Top-Line Growth
ADTRAN generated total revenues of $286.1 million in the first quarter, reflecting a 15.5% year-over-year increase from $247.7 million. Growth was broad-based, supported by strength across its Network Solutions and Services & Support segments.
Network Solutions revenues rose to $237.9 million from $202.2 million in the prior-year quarter, while Services & Support contributed $48.1 million compared with $45.5 million a year ago. The expansion highlights improving demand trends across fiber, cloud and edge networking infrastructure.
ADTRAN Expands Margins on Operating Leverage
Profitability improved meaningfully during the quarter. GAAP gross margin expanded to 39.5% from 38.4% in the year-ago period, while non-GAAP gross margin rose to 43.0%, reflecting operational efficiencies and better cost control.
Operating performance also strengthened. GAAP operating margin turned positive at 2.2% compared with a negative 1.6% last year. Non-GAAP operating margin improved to 6.9% from 3.9%, indicating enhanced scalability of the company’s business model.
On a GAAP basis, ADTRAN reported a net loss attributable to shareholders of $1.3 million or 1 cent per share, narrower than a loss of $11.3 million or 14 cents per share in the prior-year quarter.
Adjusted earnings were significantly stronger at 14 cents per share, reflecting the exclusion of acquisition-related costs, stock-based compensation and other one-time items. The earnings beat was driven by higher revenues and improved cost structure, which helped offset ongoing expenses related to growth initiatives.
ADTRAN Cash Flow and Balance Sheet Position
ADTRAN generated $12.7 million in cash from operating activities during the quarter, though lower than the prior-year period due to working capital changes. Free cash flow was negative $3.3 million, reflecting continued investments in property, equipment and technology development.
The company ended the quarter with cash and cash equivalents of $88.3 million, compared with $95.7 million at the end of 2025. Total assets stood at $1.19 billion, indicating a stable balance sheet despite ongoing investment activity.
ADTN Sees Strong Demand Drivers Ahead
Management highlighted continued momentum in key markets. In the United States, broadband expansion remains a key growth driver, supported by government funding initiatives such as BEAD. In Europe, vendor replacement trends and regulatory developments are creating additional opportunities.
The company also introduced its LiteWave800 solution, targeting AI-driven data center infrastructure. This product innovation underscores ADTRAN’s focus on next-generation networking technologies and positions it to benefit from rising AI-related demand.
ADTRAN Outlook Signals Continued Momentum
For the second quarter of 2026, ADTRAN expects revenues in the range of $283 million to $303 million. Non-GAAP operating margin is projected between 5.0% and 9.0%, indicating sustained profitability improvement.
The outlook reflects confidence in underlying demand trends and continued execution of operational strategies. Management expects ongoing benefits from operating leverage as revenue growth aligns with disciplined cost management.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -95.83% due to these changes.
VGM Scores
At this time, ADTRAN Holdings has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise ADTRAN Holdings has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
View the Zacks #1 Rank List
Image: Bigstock
Why Is ADTRAN Holdings (ADTN) Down 14.7% Since Last Earnings Report?
It has been about a month since the last earnings report for ADTRAN Holdings (ADTN - Free Report) . Shares have lost about 14.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ADTRAN Holdings due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ADTRAN Q1 Earnings Beat Estimates on Strong Revenue Growth
ADTRAN reported strong first-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Non-GAAP earnings came in at 14 cents per share, beating the consensus estimate of 9 cents.
Revenues of $286.1 million edged past the consensus estimate of $285 million by 0.4% and increased 15.5% year over year, driven by solid demand across core markets and improved operating leverage.
ADTN Delivers Solid Top-Line Growth
ADTRAN generated total revenues of $286.1 million in the first quarter, reflecting a 15.5% year-over-year increase from $247.7 million. Growth was broad-based, supported by strength across its Network Solutions and Services & Support segments.
Network Solutions revenues rose to $237.9 million from $202.2 million in the prior-year quarter, while Services & Support contributed $48.1 million compared with $45.5 million a year ago. The expansion highlights improving demand trends across fiber, cloud and edge networking infrastructure.
ADTRAN Expands Margins on Operating Leverage
Profitability improved meaningfully during the quarter. GAAP gross margin expanded to 39.5% from 38.4% in the year-ago period, while non-GAAP gross margin rose to 43.0%, reflecting operational efficiencies and better cost control.
Operating performance also strengthened. GAAP operating margin turned positive at 2.2% compared with a negative 1.6% last year. Non-GAAP operating margin improved to 6.9% from 3.9%, indicating enhanced scalability of the company’s business model.
ADTN Earnings Performance Reflects Cost Discipline
On a GAAP basis, ADTRAN reported a net loss attributable to shareholders of $1.3 million or 1 cent per share, narrower than a loss of $11.3 million or 14 cents per share in the prior-year quarter.
Adjusted earnings were significantly stronger at 14 cents per share, reflecting the exclusion of acquisition-related costs, stock-based compensation and other one-time items. The earnings beat was driven by higher revenues and improved cost structure, which helped offset ongoing expenses related to growth initiatives.
ADTRAN Cash Flow and Balance Sheet Position
ADTRAN generated $12.7 million in cash from operating activities during the quarter, though lower than the prior-year period due to working capital changes. Free cash flow was negative $3.3 million, reflecting continued investments in property, equipment and technology development.
The company ended the quarter with cash and cash equivalents of $88.3 million, compared with $95.7 million at the end of 2025. Total assets stood at $1.19 billion, indicating a stable balance sheet despite ongoing investment activity.
ADTN Sees Strong Demand Drivers Ahead
Management highlighted continued momentum in key markets. In the United States, broadband expansion remains a key growth driver, supported by government funding initiatives such as BEAD. In Europe, vendor replacement trends and regulatory developments are creating additional opportunities.
The company also introduced its LiteWave800 solution, targeting AI-driven data center infrastructure. This product innovation underscores ADTRAN’s focus on next-generation networking technologies and positions it to benefit from rising AI-related demand.
ADTRAN Outlook Signals Continued Momentum
For the second quarter of 2026, ADTRAN expects revenues in the range of $283 million to $303 million. Non-GAAP operating margin is projected between 5.0% and 9.0%, indicating sustained profitability improvement.
The outlook reflects confidence in underlying demand trends and continued execution of operational strategies. Management expects ongoing benefits from operating leverage as revenue growth aligns with disciplined cost management.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -95.83% due to these changes.
VGM Scores
At this time, ADTRAN Holdings has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise ADTRAN Holdings has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.