Aviat Networks, Inc. Q4 FY2025 earnings call

• Total revenues were $115.3 million, non-GAAP gross margin was 34.7%, and adjusted EBITDA was $15.1 million, up 26.7% year-over-year. - In private networks, Aviat serves public safety and critical infrastructure, with funding growth in city and state budgets aligning with demand for backhaul radios, routers, and services. - Mobile service provider market saw rebound in U.S. Tier 1 and Pasolink revenues at $140 million annualized. - Rural broadband: increasing utilization of wireless solutions, with states like New Mexico, Washington, and Kansas awarding significant portions to wireless access. - Tariffs: Minimal impact on profitability due to supply moves from China to mitigate tariffs. - Product development: Introduced ETSI-compliant radio, opening international market opportunities with industry-leading power and all-indoor design.

Total revenues for the fourth quarter were $115.3 million. North America contributed 50% of total revenues, amounting to $58.0 million, an increase of $1.8 million or 3.2% from the same period last year. International revenues were $57.3 million, a decrease of $3.1 million or 5.2% from the prior year. Non-GAAP gross margin was 34.7%, adjusted EBITDA was $15.1 million, which was a 26.7% increase versus the year-ago period. Non-GAAP EPS was $0.83, up 15% year-over-year.

Fiscal 2026 full year revenues are expected to be in the range of $440 million to $460 million. Full year adjusted EBITDA is expected to be in the range of $45 million to $55 million. The first quarter is anticipated to be the lowest revenue quarter, and the fourth quarter is expected to be the strongest revenue quarter.

Material weaknesses in the controlled environment were identified during year-end audit. Further investment in resources, processes, and testing is needed to remediate these material weaknesses.

Q: About fixed wireless access for business and multi-dwelling units, driving factors and BEAD program.

A: Peter Smith mentioned multi-dwelling units achieving price points as a driver, and that BEAD program is moving along with positive signs of funding flowing, though impact won't be in guidance until 2026.

Q: Fiscal '26 outlook, growth drivers and conservatism.

A: Peter Smith noted environmental drivers like funding increases but said they want to be conservative and prove growth before getting ahead.

Q: Tier 1 carrier environment and private vs carrier growth.

A: Peter Smith stated private network growth is expected to be better than carrier, with North American wireless having slight growth and emerging markets favorable for connectivity.

Q: Revenue mix, services vs product, and September quarter outlook.

A: Andrew Fredrickson talked about services margin improvement across regions, and Peter Smith discussed revenue seasonality with Q1 likely low, Q4 highest, due to project-based business.