Aviat Networks Announces Fiscal 2025 Third Quarter and Nine Month Financial Results
Total Revenue of $112.6 million; Up 1.6% Year-Over-Year
Operating Income of $9.3 million; Non-GAAP Operating Income of $13.0 million
Net Income of $3.5 million; Adjusted EBITDA of $14.9 million
Diluted Earnings per Share of $0.27; Non-GAAP Diluted Earnings per Share of $0.88
AUSTIN, Texas, May 6, 2025 /PRNewswire/ -- Aviat Networks, Inc. ("Aviat Networks," "Aviat," or the "Company"), (Nasdaq: AVNW), the leading expert in wireless transport and access solutions, today reported financial results for its fiscal 2025 third quarter ended March 28, 2025.
Third Quarter Highlights
-- Accomplished 19th consecutive quarter of trailing twelve month revenue
growth
-- Grew GAAP operating income by 64% year-over-year
-- Set new record for quarterly Adjusted EBITDA driven by strong margins
and operating expense cost management
-- Accepted first orders for ProVision Plus network management software
from Pasolink customers, marking initial steps in capturing a $50
million opportunity over the next five years
Third Quarter Financial Highlights
-- Total Revenues: $112.6 million, up 1.6% from the same quarter last year
-- GAAP Results: Gross Margin 34.9%; Operating Expenses $30.0 million;
Operating Income $9.3 million; Net Income $3.5 million; Net Income per
diluted share ("Net Income per share") $0.27
-- Non-GAAP Results: Adjusted EBITDA $14.9 million; Gross Margin 35.8%;
Operating Expenses $27.2 million; Operating Income $13.0 million; Net
Income $11.3 million; Net Income per share $0.88
-- Cash and cash equivalents: $49.4 million
-- Net debt: $24.5 million
Fiscal 2025 Third Quarter and Nine Months Ended March 28, 2025
Revenues
The Company reported total revenues of $112.6 million for its fiscal 2025 third quarter, compared to $110.8 million in the fiscal 2024 third quarter, an increase of $1.8 million or 1.6%. North America revenue of $49.4 million increased by $5.0 million or 11.3%, compared to $44.4 million in the prior year due to strength from private networks projects. International revenue of $63.2 million decreased by $(3.2) million or (4.8)%, compared to $66.4 million in the prior year, primarily due to timing of capital expenditure plans of mobile network operators.
For the nine months ended March 28, 2025, revenue increased 9.6% to $319.3 million, compared to $291.4 million in the same period of fiscal 2024.
Gross Margins
In the fiscal 2025 third quarter, the Company reported GAAP gross margin of 34.9% and non-GAAP gross margin of 35.8%. This compares to GAAP gross margin of 32.5% and non-GAAP gross margin of 35.1% in the fiscal 2024 third quarter, an increase of 240 and 70 basis points, respectively. The increase was driven by regional and product mix in the quarter.
For the nine months ended March 28, 2025, the Company reported GAAP gross margin of 31.3% and non-GAAP gross margin of 32.1%. This compares to GAAP gross margin of 35.5% and non-GAAP gross margin of 36.6% in the same period of fiscal 2024, a decrease of (420) and (450) basis points, respectively.
Operating Expenses
The Company reported GAAP total operating expenses of $30.0 million for the fiscal 2025 third quarter, compared to $30.4 million in the fiscal 2024 third quarter. Non-GAAP total operating expenses, excluding the impact of restructuring charges, share-based compensation, and merger and acquisition and other expenses for the fiscal 2025 third quarter were $27.2 million, compared to $27.4 million in the prior year, a decrease of $(0.2) million or (0.6)%.
For the nine months ended March 28, 2025, the Company reported GAAP total operating expenses of $98.3 million, compared to $89.6 million in the same period of fiscal 2024, an increase of $8.6 million or 9.6%. Non-GAAP total operating expenses, excluding the impact of restructuring charges, share-based compensation, and merger and acquisition and other expenses for the nine months ended March 28, 2025 were $86.4 million, compared to $74.1 million in the same period of fiscal 2024, an increase of $12.2 million or 16.5%.
Operating Income
The Company reported GAAP operating income of $9.3 million for the fiscal 2025 third quarter, compared to GAAP operating income of $5.7 million in the fiscal 2024 third quarter, an increase of $3.6 million. Operating income increased primarily due to higher gross margin dollars and flat operating expenses. On a non-GAAP basis, the Company reported operating income of $13.0 million for the fiscal 2025 third quarter, compared to non-GAAP operating income of $11.4 million in the prior year, an increase of $1.6 million.
For the nine months ended March 28, 2025, the Company reported GAAP operating income of $1.7 million, compared to $13.9 million in the same period of fiscal 2024, a decrease of $(12.3) million. On a non-GAAP basis, the Company reported operating income of $16.1 million, compared to $32.5 million in the same period of fiscal 2024, a decrease of $(16.4) million.
Income Taxes
The Company reported GAAP income tax expense of $1.1 million in the fiscal 2025 third quarter, compared to GAAP income tax expense of $0.8 million in the fiscal 2024 third quarter.
For the nine months ended March 28, 2025, the Company reported a GAAP income tax benefit of $(2.7) million compared to GAAP income tax expense of $3.1 million in the same period of fiscal 2024, a decrease of $(5.8) million.
Net Income / Net Income Per Share
The Company reported GAAP net income of $3.5 million in the fiscal 2025 third quarter or GAAP net income per share of $0.27. This compared to GAAP net income of $3.9 million or GAAP net income per share of $0.30 in the fiscal 2024 third quarter. On a non-GAAP basis, the Company reported non-GAAP net income of $11.3 million or non-GAAP net income per share of $0.88, compared to non-GAAP net income of $10.0 million or $0.78 per share in the prior year.
The Company reported a GAAP net loss of $(3.9) million for the nine months ended March 28, 2025, or GAAP net loss per diluted share of $(0.30). This compared to GAAP net income of $9.2 million or $0.75 per share in the comparable fiscal 2024 period. On a non-GAAP basis, the Company reported net income of $10.6 million or net income per share of $0.83 for the nine months ended March 28, 2025, compared to non-GAAP net income of $30.0 million or $2.43 per share in the comparable fiscal 2024 period.
Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") for the fiscal 2025 third quarter was $14.9 million, compared to $12.7 million in the fiscal 2024 third quarter, an increase of $2.2 million.
Balance Sheet Highlights
The Company reported $49.4 million in cash and cash equivalents as of March 28, 2025, compared to $64.6 million as of June 28, 2024. As of March 28, 2025, total debt was $73.9 million, an increase of $25.6 million from June 28, 2024.
Fiscal 2025 Full Year Outlook
The Company is leaving its fiscal 2025 full year guidance as previously stated:
-- Full year Revenue between $430 and $470 million
-- Full year Adjusted EBITDA between $30.0 and $40.0 million
Conference Call Details
Aviat Networks will host a conference call at 5:00 p.m. Eastern Time (ET) today, May 6, 2025, to discuss its financial and operational results for the fiscal 2025 third quarter ended March 28, 2025. Participating on the call will be Peter Smith, President and Chief Executive Officer; Michael Connaway, Sr. Vice President and Chief Financial Officer; and Andrew Fredrickson, Director of Corporate Development and Investor Relations. Following management's remarks, there will be a question and answer period.
Interested parties may access the conference call live via the webcast through Aviat Network's Investor Relations website at investors.aviatnetworks.com/events-and-presentations/events, or may participate via telephone by registering using this online form. Once registered, telephone participants will receive the dial-in number along with a unique PIN number that must be used to access the call. A replay of the conference call webcast will be available after the call on the Company's investor relations website.
About Aviat Networks
Aviat Networks, Inc. is the leading expert in wireless transport and access solutions and works to provide dependable products, services and support to its customers. With more than one million systems sold into 170 countries worldwide, communications service providers and private network operators including state/local government, utility, federal government and defense organizations trust Aviat with their critical applications. Coupled with a long history of microwave innovations, Aviat provides a comprehensive suite of localized professional and support services enabling customers to drastically simplify both their networks and their lives. For more than 70 years, the experts at Aviat have delivered high performance products, simplified operations, and the best overall customer experience. Aviat is headquartered in Austin, Texas. For more information, visit www.aviatnetworks.com or connect with Aviat Networks on Facebook and LinkedIn.
Forward-Looking Statements
The information contained in this Current Report on Form 8-K includes forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including Aviat's beliefs and expectations regarding outlook, business conditions, new product solutions, customer positioning, future orders, bookings, new contracts, cost structure, profitability in fiscal 2025, its recent acquisitions and acquisition strategy, process improvements, measures designed to improve internal controls, its ability to maintain effective internal control over financial reporting and management systems and remediate material weaknesses, plans and objectives of management, realignment plans and review of strategic alternatives and expectations regarding future revenue, gross margin, Adjusted EBITDA, operating income or earnings or loss per share. All statements, trend analyses and other information contained herein regarding the foregoing beliefs and expectations, as well as about the markets for the services and products of Aviat and trends in revenue, and other statements identified by the use of forward-looking terminology, including "anticipate," "believe," "plan," "estimate," "expect," "goal," "will," "see," "continue," "delivering," "view," and "intend," or the negative of these terms or other similar expressions, constitute forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, forward-looking statements are based on estimates reflecting the current beliefs, expectations and assumptions of the senior management of Aviat regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Such forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should therefore be considered in light of various important factors, including those set forth in this document. Therefore, you should not rely on any of these forward-looking statements.
Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include the following: the disruption the 4RF and NEC transactions may cause to customers, vendors, business partners and our ongoing business; our ability to integrate the operations of the acquired 4RF and NEC businesses with our existing operations and fully realize the expected synergies of the 4RF and NEC transactions on the expected timeline; disruptions relating to the ongoing conflict between Russia and Ukraine and the conflict in Israel and surrounding areas; continued price and margin erosion in the microwave transmission industry; the impact of the volume, timing, and customer, product, and geographic mix of our product orders; our ability to meet financial covenant requirements; the timing of our receipt of payment; our ability to meet product development dates or anticipated cost reductions of products; our suppliers' inability to perform and deliver on time, component shortages, or other supply chain constraints; the effects of inflation; customer acceptance of new products; the ability of our subcontractors to timely perform; weakness in the global economy affecting customer spending; retention of our key personnel; our ability to manage and maintain key customer relationships; uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation; our failure to protect our intellectual property rights or defend against intellectual property infringement claims; the results of our restructuring efforts; the effects of currency and interest rate risks; the ability to preserve and use our net operating loss carryforwards; the effects of current and future government regulations; general economic conditions, including uncertainty regarding the timing, pace and extent of an economic recovery in the United States and other countries where we conduct business; the conduct of unethical business practices in developing countries; the impact of political turmoil in countries where we have significant business; our ability to realize the anticipated benefits of any proposed or recent acquisitions; the impact of tariffs, the adoption of trade restrictions affecting our products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, the closing of border crossings, and other changes in trade regulations or relationships; our ability to implement our stock repurchase program or that it will enhance long-term stockholder value; and the impact of adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions.
For more information regarding the risks and uncertainties for Aviat's business, see "Risk Factors" in Aviat's Form 10-K for the fiscal year ended June 28, 2024 filed with the U.S. Securities and Exchange Commission ("SEC") on October 4, 2024, as well as other reports filed by Aviat with the SEC from time to time. Aviat undertakes no obligation to update publicly any forward-looking statement, whether written or oral, for any reason, except as required by law, even as new information becomes available or other events occur in the future.
Investor Relations:
Andrew Fredrickson
Director, Corporate Development & Investor Relations
Phone: (512) 582-4626
Email: andrew.fredrickson@aviatnet.com
Table 1
AVIAT NETWORKS, INC.
Fiscal Year 2025 Third Quarter Summary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
(In thousands, except per share amounts) March 28, March 29, March 28, March 29,
2025 2024 2025 2024
Revenues:
Product sales $76,824 $70,844 $220,252 $195,410
Services 35,816 39,978 99,014 96,013
Total revenues 112,640 110,822 319,266 291,423
Cost of revenues:
Product sales 51,370 47,783 158,540 120,989
Services 21,974 26,968 60,756 66,841
Total cost of revenues 73,344 74,751 219,296 187,830
Gross margin 39,296 36,071 99,970 103,593
Operating expenses:
Research and development 7,704 10,623 28,334 25,441
Selling and administrative 22,121 20,198 68,348 61,979
Restructuring charges (recovery) 177 (417) 1,592 2,227
Total operating expenses 30,002 30,404 98,274 89,647
Operating income 9,294 5,667 1,696 13,946
Interest expense, net 1,557 928 4,252 1,421
Other expense, net 3,068 63 4,047 228
Income (loss) before income taxes 4,669 4,676 (6,603) 12,297
Provision for (benefit from) income taxes 1,141 806 (2,747) 3,086
Net income (loss) $3,528 $3,870 $(3,856) $9,211
Net income (loss) per share of common stock outstanding:
Basic $0.28 $0.31 $(0.30) $0.76
Diluted $0.27 $0.30 $(0.30) $0.75
Weighted-average shares outstanding:
Basic 12,689 12,555 12,672 12,043
Diluted 12,838 12,779 12,672 12,325
Table 2
AVIAT NETWORKS, INC.
Fiscal Year 2025 Third Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands) March 28, June 28,
2025 2024
ASSETS
Current Assets:
Cash and cash equivalents $49,429 $64,622
Accounts receivable, net 178,036 158,013
Unbilled receivables 101,406 90,525
Inventories 93,158 62,267
Assets held for sale - 2,720
Other current assets 34,575 27,076
Total current assets 456,604 405,223
Property, plant and equipment, net 15,633 9,480
Goodwill 19,188 8,217
Intangible assets, net 26,817 13,644
Deferred income taxes 92,377 83,112
Right-of-use assets 3,406 3,710
Other assets 14,312 11,837
Total long-term assets 171,733 130,000
Total assets $628,337 $535,223
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $137,730 $92,854
Accrued expenses 40,525 42,148
Short-term lease liabilities 1,163 1,006
Advance payments and unearned revenue 85,658 58,839
Other current liabilities 13,299 21,614
Current portion of long-term debt 3,719 2,396
Total current liabilities 282,094 218,857
Long-term debt 70,204 45,954
Unearned revenue 7,670 7,413
Long-term operating lease liabilities 2,402 2,823
Other long-term liabilities 427 394
Reserve for uncertain tax positions 2,887 3,485
Deferred income taxes 6,537 412
Total liabilities 372,221 279,338
Commitments and contingencies
Stockholder's equity:
Preferred stock -
Common stock 127 126
Treasury stock (7,077) (6,479)
Additional paid-in-capital 864,910 860,071
Accumulated deficit (582,369) (578,513)
Accumulated other comprehensive loss (19,475) (19,320)
Total stockholders' equity 256,116 255,885
Total liabilities and stockholders' equity $628,337 $535,223
AVIAT NETWORKS, INC.
Fiscal Year 2025 Third Quarter Summary
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE
To supplement the consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (GAAP), we provide additional measures of gross margin, research and development expenses, selling and administrative expenses, operating expenses, operating income, provision for or benefit from income taxes, net income, net income per share, and adjusted income before interest, tax, depreciation and amortization (Adjusted EBITDA), in each case, adjusted to exclude certain costs, charges, gains and losses, as set forth below.
We believe that these non-GAAP financial measures, when considered together with the GAAP financial measures provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionate positive or negative impact on results in any particular period. We also believe these non-GAAP measures enhance the ability of investors to analyze trends in our business and to understand our performance. In addition, we may utilize non-GAAP financial measures as a guide in our
forecasting, budgeting and long-term planning process and to measure operating performance for some management compensation purposes. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP follow.
(1)We have not reconciled Adjusted EBITDA guidance to its corresponding GAAP measure due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to merger and acquisition costs and share-based compensation. In particular, share-based compensation expense is affected by future hiring, turnover, and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to change. Accordingly, reconciliations of forward-looking Adjusted EBITDA are not
available without unreasonable effort.
Table 3
AVIAT NETWORKS, INC.
Fiscal Year 2025 Third Quarter Summary
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (1)
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
Nine Months Ended
March 28, % of March 29, % of March 28, 2025 % of March 29, 2024 % of
2025 2024
Revenue Revenue Revenue Revenue
(In thousands, except percentages and per share amounts)
GAAP gross margin $39,296 34.9 % $36,071 32.5 % $99,970 31.3 % $103,593 35.5 %
Share-based compensation (1) 126 214 310
Merger and acquisition and other expenses 995 2,650 2,295 2,759
Non-GAAP gross margin 40,290 35.8 % 38,847 35.1 % 102,479 32.1 % 106,662 36.6 %
GAAP research and development expenses $7,704 6.8 % $10,623 9.6 % $28,334 8.9 % $25,441 8.7 %
Share-based compensation (149) (155) (456) (452)
Non-GAAP research and development expenses 7,555 6.7 % 10,468 9.4 % 27,878 8.7 % 24,989 8.6 %
GAAP selling and administrative expenses $22,121 19.6 % $20,198 18.2 % $68,348 21.4 % $61,979 21.3 %
Share-based compensation (1,840) (1,605) (4,956) (4,783)
Merger and acquisition and other expenses (595) (1,657) (4,890) (8,051)
Non-GAAP selling and administrative expenses 19,686 17.5 % 16,936 15.3 % 58,502 18.3 % 49,145 16.9 %
GAAP operating expense $30,002 26.6 % $30,404 27.4 % $98,274 30.8 % $89,647 30.8 %
Share-based compensation (1,989) (1,760) (5,412) (5,235)
Merger and acquisition and other expenses (595) (1,657) (4,890) (8,051)
Restructuring (charges) recovery (177) 417 (1,592) (2,227)
Non-GAAP operating expense 27,241 24.2 % 27,404 24.7 % 86,380 27.1 % 74,134 25.4 %
GAAP operating income $9,294 8.3 % $5,667 5.1 % $1,696 0.5 % $13,946 4.8 %
Share-based compensation 1,988 1,886 5,626 5,545
Merger and acquisition and other expenses 1,590 4,307 7,185 10,810
Restructuring charges (recovery) 177 (417) 1,592 2,227
Non-GAAP operating income 13,049 11.6 % 11,443 10.3 % 16,099 5.0 % 32,528 11.2 %
GAAP income tax provision (benefit) $1,141 1.0 % $806 0.7 % $(2,747) (0.9) % $3,086 1.1 %
Adjustment to reflect pro forma tax rate (941) (306) 3,947 (1,986)
Non-GAAP income tax provision 200 0.2 % 500 0.5 % 1,200 0.4 % 1,100 0.4 %
GAAP net income (loss) $3,528 3.1 % $3,870 3.5 % $(3,856) (1.2) % $9,211 3.2 %
Share-based compensation 1,988 1,886 5,626 5,545
Merger and acquisition and other expenses 1,590 4,307 7,185 10,810
Restructuring charges (recovery) 177 (417) 1,592 2,227
Other expense, net 3,068 63 4,047 228
Adjustment to reflect pro forma tax rate 941 306 (3,947) 1,986
Non-GAAP net income $11,292 10.0 % $10,015 9.0 % $10,647 3.3 % $30,007 10.3 %
Diluted net income (loss) per share:
GAAP $0.27 $0.30 $(0.30) $0.75
Non-GAAP $0.88 $0.78 $0.83 $2.43
Shares used in computing diluted net income (loss) per share
GAAP 12,838 12,779 12,672 12,325
Non-GAAP 12,838 12,779 12,818 12,325
Adjusted EBITDA:
---
GAAP net income (loss) $3,528 3.1 % $3,870 3.5 % $(3,856) (1.2) % $9,211 3.2 %
Depreciation and amortization of property, plant 1,830 1,244 5,935 3,728
and equipment and intangible assets
Interest expense, net 1,557 928 4,252 1,421
Other expense, net 3,068 63 4,047 228
Share-based compensation 1,988 1,886 5,626 5,545
Merger and acquisition and other expenses 1,590 4,307 7,185 10,810
Restructuring charges (recovery) 177 (417) 1,592 2,227
Provision for (benefit from) for income taxes 1,141 806 (2,747) 3,086
Adjusted EBITDA $14,879 13.2 % $12,687 11.4 % $22,034 6.9 % $36,256 12.4 %
(1) The adjustments above reconcile our GAAP financial results to the non-GAAP financial measures used by us. Our non-GAAP net income excluded share-based compensation, and other non-recurring charges (recovery). Adjusted EBITDA
was determined by excluding depreciation and amortization on property, plant and equipment, interest, provision for or benefit from income taxes, and non-GAAP pre-tax adjustments, as set forth above, from GAAP net income. We
believe that the presentation of these non-GAAP items provides meaningful supplemental information to investors, when viewed in conjunction with, and not in lieu of, our GAAP results. However, the non-GAAP financial measures
have not been prepared under a comprehensive set of accounting rules or principles. Non-GAAP information should not be considered in isolation from, or as a substitute for, information prepared in accordance with GAAP. Moreover,
there are material limitations associated with the use of non-GAAP financial measures.
Table 4
AVIAT NETWORKS, INC.
Fiscal Year 2025 Third Quarter Summary
SUPPLEMENTAL SCHEDULE OF REVENUE BY GEOGRAPHICAL AREA
(Unaudited)
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
2025 2024 2025 2024
(In thousands)
North America $49,402 $44,400 $149,589 $149,868
International:
Africa and the Middle East 15,086 11,401 38,210 35,848
Europe 9,429 6,549 23,376 17,378
Latin America and Asia Pacific 38,723 48,472 108,091 88,329
Total international 63,238 66,422 169,677 141,555
Total revenue $112,640 $110,822 $319,266 $291,423
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