ADTRAN Holdings (ADTN) Up 2.8% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for ADTRAN Holdings (ADTN). Shares have added about 2.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is ADTRAN Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

ADTRAN Misses Q3 Earnings Estimates, Beats on Revenues
 
ADTRAN 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 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%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a flat trend in estimates revision.

VGM Scores

At this time, ADTRAN Holdings has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. 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

ADTRAN Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

ADTRAN Holdings is part of the Zacks Communication - Components industry. Over the past month, Viav Solutions (VIAV), a stock from the same industry, has gained 4.8%. The company reported its results for the quarter ended September 2025 more than a month ago.

Viav Solutions reported revenues of $299.1 million in the last reported quarter, representing a year-over-year change of +25.6%. EPS of $0.15 for the same period compares with $0.06 a year ago.

For the current quarter, Viav Solutions is expected to post earnings of $0.19 per share, indicating a change of +46.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Viav Solutions. Also, the stock has a VGM Score of C.

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

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