ADTRAN's GAAP Operating Loss Narrows as Supply Pressures Persist

The Tip Desk · November 10, 2026 · 2 min read

Third-quarter revenue was $281.2 million, up 0.6% year over year, as the company posted a $0.8 million GAAP operating loss and guided fourth-quarter sales to $272.0 million to $292.0 million.

ADTRAN Holdings, Inc. (ADTN), a provider of open networking and communications solutions, reported third-quarter revenue of $281.2 million, up 0.6% from a year earlier, after a 6.1% year-over-year increase in the second quarter.

The company said third-quarter revenue came in slightly below the midpoint of its guidance range as it continued to navigate a challenging supply environment. Chairman and Chief Executive Officer Tom Stanton said the company saw continued growth in optical networking and increasing growth with hyperscale customers, and that rapid expansion of AI infrastructure is reshaping network investment priorities.

GAAP operating loss narrowed to $0.8 million from $2.8 million a year earlier. GAAP operating margin improved to -0.3% from -3.6% in the prior quarter. Non-GAAP operating margin was 5.0%, up from 3.8%. Non-GAAP operating income was $14.1 million, down from $15.1 million a year earlier.

GAAP gross margin rose to 38.5% from 37.0% in the second quarter. Non-GAAP gross margin was 42.1%, including a benefit of approximately 200 basis points from IEEPA refunds, versus 40.7% in the prior quarter.

Network Solutions revenue was $231.2 million, down from $232.5 million a year earlier. Services & Support revenue was $49.9 million, up from $46.9 million.

GAAP diluted loss per share attributable to ADTRAN Holdings was $0.10, versus $0.13 in the prior quarter. Non-GAAP diluted earnings per share were $0.09, versus $0.04. Net loss attributable to the company was $9.2 million, versus $10.3 million a year earlier.

A $2.4 million business-transformation charge related to a global ERP go-live and related restructuring appeared in the quarter.

Net cash used in operating activities was $24.5 million, reversing $25.9 million of cash provided in the second quarter. Cash and cash equivalents was $64.6 million, down from $79.2 million at the prior quarter-end. The non-current revolving credit agreement balance was $83.0 million at September 30, 2026, versus $25.0 million at December 31, 2025.

For the fourth quarter of 2026, the company expects revenue of $272.0 million to $292.0 million. Non-GAAP operating margin is expected to be 1.0% to 5.0%, reflecting historical seasonality, availability of supply and timing of large customer projects.

Stanton said the company’s focus is on addressing supply and cost pressures, maintaining financial discipline and translating opportunities into stronger revenue growth, profitability and cash generation.