ADTRAN Misses Q3 Earnings Estimates, Beats on Revenues

ADTRAN Holdings, Inc. ADTN reported mixed third-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 September quarter was $10.3 million or a loss of 12 cents per share compared with a net loss of $33.3 million or a loss of 38 cents per share in the prior-year quarter. The narrower loss was attributable to top-line growth.

Excluding non-recurring items, non-GAAP earnings for the reported quarter were $3.7 million or 5 cents per share against a net loss of $5.3 million or a loss of 7 cents per share a year ago. The bottom line missed the Zacks Consensus Estimate by a penny.

Revenues

Quarterly total revenues jumped to $279.4 million from $227.7 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 $275 million.

Network Solutions contributed $232.5 million in revenues compared with $181.5 million in the prior-year quarter. Services and Support revenues were $46.9 million, up from $46.2 million in the year-earlier quarter.

Other Details

Non-GAAP gross margin in the reported quarter was 42.1% compared with 41.1% in the prior-year quarter. Non-GAAP operating income surged to $15.1 million from $0.5 million in the year-ago quarter for respective margins of 5.4% and 0.2%.

Cash Flow & Liquidity

In the first nine months of 2025, ADTRAN generated $87.5 million of cash from operating activities compared with $101.1 million in the prior-year period. As of Sept. 30, 2025, the company had $93.7 million in cash and cash equivalents compared with $25.9 million of non-current lease obligations.

Outlook

For the fourth quarter of 2025, ADTRAN expects revenues in the range of $275-$285 million. Non-GAAP operating margin is expected to be in the band of 3.5% to 7.5%.

Zacks Rank & Stock to Consider

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

Arista Networks Inc. ANET is scheduled to release third-quarter 2025 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 72 cents per share, suggesting a growth of 20% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 18.7%. Arista delivered an average earnings surprise of 12.8% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release third-quarter 2025 earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.64 per share, indicating a 3.1% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 4.9%. Akamai delivered an average earnings surprise of 7.1% in the last four reported quarters.

Pinterest, Inc. PINS is set to release third-quarter 2025 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 42 cents per share, implying a growth of 5% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.9%. Pinterest delivered an average negative earnings surprise of 1.1% in the last four reported quarters.

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

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