ADTRAN Misses Q2 Earnings Estimates Despite Higher Revenues

ADTRAN Holdings, Inc. ADTN reported mixed second-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same.

The company recorded a top-line expansion year over year, driven by solid demand trends in both segments. Management’s focus on cost optimization and enhancing its operating model to ensure higher long-term shareholder returns is positive. However, macroeconomic headwinds are worrisome.

Net Income

On a GAAP basis, net loss in the June quarter was $20.5 million or a loss of 24 cents per share compared with a net loss of $49.7 million or a loss of 63 cents per share in the prior-year quarter. The narrower loss was attributable to top-line growth.

Non-GAAP net loss was $0.3 million or a loss of 0.3 cents compared with a net loss of $9.9 million or a loss of 13 cents per share a year ago. The bottom line missed the Zacks Consensus Estimate of earnings of 1 cent.

Revenues

Quarterly total revenues improved to $265.1 million from $226 million in the prior-year quarter, driven by diligent execution of operational plans and increasing demand for state-of-the-art solutions for cloud, AI and edge computing. ADTRAN witnessed growth across all major revenue categories and gained market share in key areas. The top line beat the consensus estimate of $257 million.

Network Solutions contributed $219.5 million in revenues compared with $179.2 million in the prior-year quarter. Services and Support revenues were $45.6 million, marginally down from $46.8 million in the year-earlier quarter.

Other Details

Non-GAAP gross margin in the reported quarter was 41.4% compared with 41.8% in the prior-year quarter. Non-GAAP operating income was $8 million compared with $1.4 million in the year-ago quarter.

Cash Flow & Liquidity

In the first six months of 2025, ADTRAN generated $75.3 million of cash from operating activities compared with $57.8 million in the prior-year period. As of June 30, 2025, the company had $106.3 million in cash and cash equivalents compared with $27.8 million of non-current lease obligations.

Outlook

For the third quarter of 2025, ADTRAN expects revenues in the range of $270-$280 million. Non-GAAP operating margin is expected to be in the band of 3% to 7%.

Zacks Rank

ADTRAN currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release third-quarter 2025 earnings on Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, suggesting a growth of 6.4% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 12%. Keysight delivered an average earnings surprise of 8.2% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at $1.55 per share, indicating a 1.9% decline from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 8%. Akamai delivered an average earnings surprise of 4.8% in the last four reported quarters.

Pinterest, Inc. PINS is set to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, implying a growth of 17.2% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.3%. Pinterest delivered an average earnings surprise of 0.5% in the last four reported quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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