ADTRAN pre-announces financial results for the Third Quarter of 2021
Oct 15, 2021
HUNTSVILLE, Ala.--(BUSINESS WIRE)-- ADTRAN, Inc. (NASDAQ: ADTN) (“ADTRAN” or the “Company”), today announced certain preliminary financial results for the third quarter ended September 30, 2021. All figures in this release are approximate due to the preliminary nature of the announcement.
For the third quarter, revenue is expected to be $138 million, gross margin is expected to be 34.5%, non-GAAP gross margin is expected to be 34.6%, operating loss is expected to be $10.1 million and non-GAAP operating loss is expected to be $2.6 million. This lower gross margin and decreased profitability, as compared to prior guidance, was attributed to approximately $9 million in quantifiable supply chain constraint-related expenses incurred during the quarter. Without these expenses gross margin would be within our third quarter guidance range.
ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, “ We are experiencing record demand for our solutions with Q3 setting an all-time high for bookings in a quarter . This increased demand comes from a diverse mix of global Tier 1 and regional service providers planning to deploy our fiber access platforms, in-home service delivery platforms and SaaS applications. We expect this growth to accelerate. During the third quarter we secured two additional Tier 1 fiber customers, and previously announced Tier 1 fiber customers significantly increased their bookings for our fiber access platforms. Although our revenue growth and profitability in the near-term are impacted by the supply chain issues, our long-term outlook continues to strengthen given the record demand and the supply outlook.”
The Company’s overall bookings in the third quarter were up 43% year-over-year with a book-to-bill ratio of 1.43 for the quarter, and 1.34 for the nine months ended September 30, 2021. The increased demand continues to suggest that we are in the early stages of a significant and sustained growth cycle.
ADTRAN is working closely with our suppliers and customers to address the near-term supply chain challenges facing the industry. We believe these challenges are peaking during the second half of 2021 and will begin to normalize by mid-2022. Importantly, we expect the impact on ADTRAN’s results to be largely transitory. We are encouraged by the continuation of strong demand and expect to convert today’s bookings to revenue as supply-related pressures ease.
Our long-term strategy and outlook for the business remains unchanged. We remain excited about the significant upside from our announced combination with ADVA. Joining our two businesses will create compelling value for both companies’ shareholders by significantly enhancing our ability to serve customers and capitalize on the unprecedented fiber investment opportunity now taking place globally.
Non-GAAP gross margin and non-GAAP operating income (loss) exclude acquisition-related expenses, amortizations and adjustments, stock-based compensation expense, and non-cash deferred compensation. Reconciliations between gross margin and operating loss and the respective non-GAAP measures are set forth in the tables provided below. All figures in this release are approximate and subject to the completion of our quarterly financial closing and review procedures.
ADTRAN will hold a conference call to discuss its third quarter and more detailed business outlook for the fourth quarter on October 15, 2021, at 9:00 a.m. Central Time. ADTRAN will webcast this conference call. To listen, simply visit ADTRAN’s Investor Relations site at www.adtran.com/investor approximately ten minutes prior to the start of the call, click on the event “ADTRAN Pre-Announces **** Financial Results for the Third Quarter of 2021 and Provides Current Outlook,” and click on the Webcast link.
An online replay of the Company’s conference call, as well as the text of the Company's conference call, will be available on the Investor Relations site approximately 24 hours following the call and will remain available for at least 12 months. For more information, visit www.adtran.com/investor or email at [email protected] .
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