Aviat Networks, Inc. Q1 FY2026 earnings call

• Total revenues of $107.3 million, up 21.4% year-over-year. Non-GAAP gross margin of 33.8%, adjusted EBITDA of $9.1 million, non-GAAP EPS of $0.43.
• Private networks focus: Secured project bookings in public safety and utility networks; utility vertical saw meaningful bookings including an $8 million multistate/multiphase network modernization project; launched Aprisa LTE 5G router solution for public safety vehicles.
• U.S. federal government shutdown: Roughly 5% of business, with some opportunities accelerated to beat shutdown and some pushed out, but not expected to significantly impact FY '26 business.
• Mobile service provider market: Gaining traction in North America and globally; BEAD program expected to have impact in calendar 2026 back half.
• Financial results: GAAP net income $0.2 million, non-GAAP net income $5.5 million, non-GAAP EPS $0.43, adjusted EBITDA $9.1 million.

Total revenues for the first quarter were $107.3 million, up 21.4% versus the year ago period. North America comprised 49.1% of total revenues, amounting to $52.6 million, an increase of $10.4 million or 24.7% from the same period last year. International revenues were $54.7 million for the quarter, an increase of $8.5 million or 18.3% from the same period last year. GAAP gross margin was 33.2% and non-GAAP gross margin was 33.8%. GAAP operating expenses were $30.5 million, down from $35.4 million in the year ago period. Non-GAAP operating expenses were $28.4 million, a decrease of $1.7 million versus the prior year.

• Maintained annual fiscal 2026 guidance unchanged: Full year revenues in the range of $440 million to $460 million, full year adjusted EBITDA in the range of $45 million to $55 million.

• Impact of U.S. federal government shutdown if extended, which could make it harder to predict business impact. - Forward-looking statements involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements.

Q: Comment on sequential outlook into December and strength sources?

A: U.S. private networks, principally public safety, provide quarter-over-quarter lift; cautious due to early year and government shutdown.

Q: Thoughts on 4RF opportunity and MDUs?

A: 4RF has good traction with utilities; MDU opportunity demonstrated performance but focused on Tier 1s now.

Q: India's role in fiscal '26?

A: India was mid-single-digit contributor last year, expected to be similar this year; upgrade cycle in India could be a growth driver beyond fiscal '26.

Q: Aprisa Router competitive displacement?

A: Mobile cellular router market is $2.8 billion growing at 12%; Aviat aims to engage $800 million of this opportunity with public safety channel strength.

Q: Federal impact quantification?

A: Worst case 1% pull in, 4%-5% push out; conservative due to uncertainty of shutdown duration.

Q: Aprisa Router driver for public safety?

A: Dissatisfaction with incumbents' price and OpEx model; Aviat's hardware, software, and customer relationships make it an attractive offering.

Q: Verizon's acquisition of Starry Group and impact on Aviat?

A: Validates Aviat's MDU effort; Aviat is a couple of generations ahead of Starry's hardware in MDU space.

Q: BEAD program progress?

A: Customers are talking about BEAD funding/deployments; growing non-fiber support in states like Utah, Arizona, New Mexico, etc., bodes well for Aviat capturing BEAD funding.

Q: Intercom telecom partnership?

A: Partnership is ongoing and working, but no specific quantitative estimates or timing provided.