ADTRAN (ADTN) investor relations material

Executive summary

• Q1 2026 revenue reached $286.1 million, up 15.5% year-over-year, driven by strong demand in core markets, broadband expansion in the U.S., and high-risk vendor displacement in Europe.

• Non-GAAP operating margin improved to 6.9%, up 300 basis points year-over-year; GAAP operating margin was 2.2%.

• Net loss attributable to shareholders narrowed to $1.3 million from $11.3 million in Q1 2025, with non-GAAP EPS at $0.14.

• New products like LiteWave800 and Mosaic One Clarity launched, targeting AI data center and fiber markets, with strong market feedback.

• Healthy demand across service provider, cloud, and enterprise segments, with AI and quantum-safe solutions gaining traction.

Financial highlights

• Q1 2026 revenue: $286.1 million, up 15.5% year-over-year; non-GAAP gross margin: 43.0%, up 55 basis points year-over-year.

• Non-GAAP operating income: $19.9 million (6.9% margin); GAAP operating income: $6.4 million (2.2% margin).

• Non-GAAP net income: $11 million or $0.14 per diluted share; GAAP diluted loss per share: $0.01.

• Operating cash flow: $12.7 million; free cash flow: negative $3.3 million due to inventory purchases.

• Cash and cash equivalents at quarter-end: $88.3 million.

Outlook and guidance

• Q2 2026 revenue expected between $283 million and $303 million.

• Non-GAAP operating margin guidance for Q2: 5%–9%, assuming similar cost environment.

• BEAD funding and AI/cloud initiatives expected to drive more meaningful revenue in late 2026 and into 2027.

• Liquidity and access to capital are sufficient to meet obligations for at least the next twelve months.