ADTRAN Holdings, Inc. Q1 FY2026 earnings call

AdTran delivered solid first quarter results with revenue of $286.1 million, up 15.5% year-over-year. Demand drivers underpinning the business continue to strengthen, with broadband expansion in the U.S. and high-risk vendor displacement in Europe. The company showcased an expanding portfolio addressing cloud and AI infrastructure connectivity, including the introduction of LightWave 800. Optical networking revenue is expected to build throughout the year, access and aggregation solutions show steady progress, and subscriber solutions see healthy demand. Operations face challenges like elevated memory pricing and freight costs, but non-GAAP operating margin reached a high since 2020.

Optical networking solutions revenue was $97.3 million in the first quarter, up 24% year-over-year, accounting for 34% of total revenue. Access and aggregation solutions revenue was $90.5 million, up 2% year-over-year and 14% sequentially, accounting for 32% of total revenue. Subscriber Solutions revenue was $98.2 million, up 22% year-over-year, accounting for 34% of total revenue.

Expects Q2 2026 revenue to be between $283 and $303 million and non-GAAP operating margin within 5% to 9% range.

Risks include successful development and market acceptance of products, ability of third-party suppliers to supply components, ability to convert backlog to revenue, maintain delivery schedules, competitive pricing and acceptance, intellectual property matters, effect of economic conditions, impact of tariffs and trade policy, etc.

Q: Mike Genovese with Rosenblatt Securities asked about LightWave 800, timing, margin expectations, new products like AI edge platform.

A: Tom Stanton said LightWave 800 market reaction is fantastic, expect to hit production level numbers in about a year, AI edge platform feedback is positive.

Q: Irvin Liu with Evercore asked about R&D and go-to-market investments for AI infrastructure, momentum in regional service provider segment for software products.

A: Tom Stanton said R&D and sales resources within current budget, IntelliFi has been doing well with over 100 customers.

Q: George Nodder with Wolf Research asked about percentage of sales from cloud operators, product sets sold to cloud.

A: Tom Stanton said they don't break out specific cloud operator sales percentage, biggest piece is optical, momentum around 100 ZR plug.

Q: Ryan Kuntz with Needham & Company asked about optical demand in Europe, gross margin, consumer CPE in subscriber solutions, milestones for Bede projects.

A: Tom Stanton said 400 and 800 gig products play well in Europe, consumer CPE is north of 50% of subscriber segment, funding flowing for Bede, seeing purchase orders starting.

Q: Christian Schwab with Greg Helm asked about potential peak revenue for Bede program, revenue range opportunity over multi - year, impact of Middle East conflict.

A: Tom Stanton said hard to quantify exact peak revenue, Middle East conflict impacted freight and revenues, less than 5% revenue impact.

Q: Tim Savageau with Northland Capital Markets asked about Bede offsetting access and ag seasonal pattern, incremental contribution.

A: Tom Stanton said Bede will be helpful, Europe expected stronger than previous years.

Q: Bill DeZellum with Titan Capital asked about carryover of LightWave 800 power - saving knowledge to other products, application areas.

A: Tom Stanton said power - saving technology in pluggable space, applications inside data centers mainly.

Q: Dave Kang with B. Riley asked about impact of Middle East conflict, operator margin guide, price increase plans.

A: Tom Stanton said Middle East conflict impacted freight and revenues, operator margin guide assumes similar freight and memory impact, raised prices to reflect component costs.