• Total Revenue of $111.6 million; Up 33.7% Year-Over-Year
• Adjusted EBITDA of $12.0 million; Up 11.1% Year-Over-Year
• Cash from Operations of $15.3 million in current quarter, $22.2 million year-to-date

AUSTIN, Texas – 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 2024 third quarter ended March 29, 2024.

Third Quarter Highlights

• Grew core Aviat revenue by 7%, driven by strong international sales and private network growth
• Achieved 15th consecutive quarter of growth in both revenue and Adjusted EBITDA on a trailing twelve-month basis
• Generated positive free cash flow in the quarter from both the core Aviat and Pasolink businesses
• Secured first India microwave backhaul radio orders adding an addressable segment of $200 million

Third Quarter Financial Highlights

• Total Revenues: $111.6 million, up 33.7% from the same quarter last year
• GAAP Results: Gross Margin 32.7%; Operating Expenses $31.5 million; Operating Income $5.0 million; Net Income $3.4 million; Net Income per diluted share ("Net Income per share") $0.27
• Non-GAAP Results: Adjusted EBITDA $12.0 million; Gross Margin 35.2%; Operating Expenses $28.5 million; Operating Income $10.8 million; Net Income $9.4 million; Net Income per share $0.73
• Net cash and marketable securities: $59.2 million; cash net of debt: $10.2 million

"This quarter Aviat achieved continued organic revenue and profitability growth," said Pete Smith, President and Chief Executive Officer of Aviat Networks. "We focused on our customers' needs and maintained discipline on our costs."

Mr. Smith continued, "The company continues to integrate the recently acquired Pasolink business. We are currently ahead of plan from a profitability and cash flow standpoint and are set to exceed our planned internal rate of return for the acquisition."

Fiscal 2024 Third Quarter and Nine Months Ended March 29, 2024 

Revenues
The Company reported total revenues of $111.6 million for its fiscal 2024 third quarter, compared to $83.5 million in the fiscal 2023 third quarter, an increase of $28.1 million or 33.7%. North America revenue of $44.4 million decreased by $(1.7) million or (3.6)%, compared to $46.1 million in the prior year due to the near completion of a large tier 1 project. International revenue of $67.2 million increased by $29.8 million or 79.6%, compared to $37.4 million in the prior year. This growth was due to the addition of the Pasolink business and strong core Aviat revenues in Latin America and Asia Pacific regions.

For the nine months ended March 29, 2024, revenue increased by 15.2% to $294.2 million, compared to $255.4 million in the same period of fiscal 2023. North America revenue of $151.2 million increased by $4.3 million or 2.9%, compared to $147.0 million in the same period of fiscal 2023. International revenue of $143.0 million increased by $34.5 million or 31.8% as compared to $108.5 million in the same period of fiscal 2023.

Gross Margins
In the fiscal 2024 third quarter, the Company reported GAAP gross margin of 32.7% and non-GAAP gross margin of 35.2%. This compares to GAAP gross margin of 35.7% and non-GAAP gross margin of 35.9% in the fiscal 2023 third quarter, a decrease of (300) and (70) basis points, respectively. The decrease was driven by expected near term dilution from the Pasolink business.

For the nine months ended March 29, 2024, the Company reported GAAP gross margin of 35.8% and non-GAAP gross margin of 36.8%. This compares to GAAP gross margin of 35.8% and non-GAAP gross margin of 36.0% in the same period of fiscal 2023. GAAP gross margin was flat to the prior year comparison period, and non-GAAP gross margin increased 80 basis points.

Operating Expenses
The Company reported GAAP total operating expenses of $31.5 million for the fiscal 2024 third quarter, compared to $22.3 million in the fiscal 2023 third quarter, an increase of $9.2 million or 41.0%. Non-GAAP total operating expenses, excluding the impact of restructuring charges, share-based compensation, and merger and acquisition expenses for the fiscal 2024 third quarter were $28.5 million, compared to $20.7 million in the prior year, an increase of $7.8 million or 37.9%.

For the nine months ended March 29, 2024, the Company reported total operating expenses of $89.6 million, compared to $71.4 million in the same period of fiscal 2023, an increase of $18.2 million or 25.5%. Non-GAAP total operating expenses, excluding the impact of restructuring charges, share-based compensation, and merger and acquisition expenses for the nine months ended March 29, 2024 were $74.1 million, as compared to $62.1 million in the same period of fiscal 2023, an increase of $12.0 million or 19.4%.

Operating Income
The Company reported GAAP operating income of $5.0 million for the fiscal 2024 third quarter, compared to $7.5 million in the fiscal 2023 third quarter, a decrease of $(2.5) million or (32.9)%. Operating income decreased primarily due to merger and acquisition related expenses. On a non-GAAP basis, the Company reported operating income of $10.8 million for the fiscal 2024 third quarter, compared to $9.3 million in the prior year, an increase of $1.5 million or 16.2%.

For the nine months ended March 29, 2024, the Company reported GAAP operating income of $15.6 million, as compared to $20.1 million in the same period of fiscal 2023, a decrease of $(4.5) million or (22.5)%. Operating income decreased primarily due to merger and acquisition related expenses. On a non-GAAP basis, the Company reported operating income of $34.2 million, compared to $29.9 million in the same period of fiscal 2023, an increase of $4.3 million or 14.3%.

Income Taxes
The Company reported GAAP income tax expense of $0.6 million in the fiscal 2024 third quarter, compared to $2.2 million in the fiscal 2023 third quarter, a decrease of $(1.6) million or (71.6)%.

For the nine months ended March 29, 2024, the Company reported GAAP income tax expense of $3.6 million compared to $9.1 million in the same period of fiscal 2023, a decrease of $(5.5) million or (60.6)%. The decrease was driven by non-recurrence of a $2.6 million deferred tax liability in the prior year related to legal entity restructuring.

Net Income / Net Income Per Share
The Company reported GAAP net income of $3.4 million in the fiscal 2024 third quarter or GAAP net income per share of $0.27. This compared to GAAP net income of $4.9 million or GAAP net income per share of $0.41 in the fiscal 2023 third quarter. On a non-GAAP basis, the Company reported net income of $9.4 million or non-GAAP net income per share of $0.73, compared to non-GAAP net income of $8.9 million or $0.75 per share in the prior year.

The Company reported GAAP net income of $10.3 million for the nine months ended March 29, 2024, or GAAP net income per fully diluted share of $0.84. This compared to GAAP net income of $8.2 million or $0.69 per share in the comparable fiscal 2023 period. On a non-GAAP basis, the Company reported net income of $31.6 million or net income per share of $2.57 for the nine months ended March 29, 2024, as compared to non-GAAP net income of $28.8 million or $2.43 per share in the comparable fiscal 2023 period.

Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") for the fiscal 2024 third quarter was $12.0 million, compared to $10.8 million in the fiscal 2023 third quarter, an increase of $1.2 million or 11.1%.

For the nine months ended March 29, 2024, the Company reported Adjusted EBITDA of $37.9 million, as compared to $34.4 million in the comparable fiscal 2023 period, an increase of $3.4 million, or 10.0%.

Balance Sheet Highlights
The Company reported $59.2 million in cash and marketable securities as of March 29, 2024, compared to $22.2 million as of June 30, 2023. Accounts receivable and unbilled receivables declined by $14.1 million in the fiscal 2024 third quarter, and inventory declined by $10.0 million. As of March 29, 2024, total debt was $48.9 million, a decrease of $0.6 million from December 29, 2023.

Fiscal 2024 Full Year Outlook
The Company is updating its fiscal 2024 full year guidance as follows:

• Full year Revenue between $408 and $418 million
• Full year Adjusted EBITDA range remains unchanged between $51.0 and $56.0 million