ADTRAN Q1 Earnings Beat Estimates on Solid Revenue Growth

ADTRAN, Inc. ADTN reported strong first-quarter 2025 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate.

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 March quarter was $10.6 million or a loss of 13 cents per share compared with a net loss of $326.2 million or a loss of $4.14 per share in the prior-year quarter. The narrower loss was attributable to top-line growth.

Non-GAAP net income was $2.4 million or 3 cents per share against a net loss of $16.1 million or a loss of 20 cents per share a year ago. The bottom line beat the Zacks Consensus Estimate by 5 cents.(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Revenues

Quarterly total revenues improved to $247.7 million from $226.2 million in the prior-year quarter. Increasing service provider spending and lower customer inventories are driving growth. The top line beat the consensus estimate of $245 million.

Network Solutions contributed $202.2 million in revenues compared with $181.3 million in the prior-year quarter. Services and Support revenues were $45.5 million, up from $44.9 million a year ago.

Other Details

Non-GAAP gross margin in the reported quarter was 42.6% compared with 40.7% in the prior-year quarter. Non-GAAP operating income was $10.1 million against an operating loss of $10.7 million in the year-ago quarter.

Cash Flow & Liquidity

In the first quarter, ADTRAN generated $41.6 million of cash from operating activities compared with $36.6 million in the prior-year period. As of March 31, 2025, the company had $101.3 million in cash and cash equivalents compared with $26.4 million of non-current lease obligations.

Outlook

For the second quarter of 2025, ADTRAN expects revenues in the range of $247.5-$262.5 million. Non-GAAP operating margin is expected to be in the band of 0% to 4%. 

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

AST SpaceMobile ASTS is scheduled to release first-quarter 2025 earnings on May 12. The Zacks Consensus Estimate for earnings is pegged at a loss of 17 cents per share, indicating a decline of 6.25% from the year-ago figure. 

Keysight Technologies, Inc.  KEYS is scheduled to release second-quarter fiscal 2025 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $1.17 per share, indicating growth of 25.81% from the year-ago figure. 

Workday, Inc. WDAY is scheduled to release first-quarter fiscal 2026 earnings on May 22. The Zacks Consensus Estimate for earnings is pegged at $1.99 per share, indicating growth of 14.37% from the year-ago figure.

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

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