second quarter 2026
Filed Aug 4, 2026ADTRAN Holdings, Inc. reports second quarter 2026 financial results
Revenue increased 6.1% year-over-year and non-GAAP profitability remained positive, but the Company reported a GAAP operating margin of -3.6% and a GAAP diluted loss per share of $0.13. Third-quarter revenue guidance spans $275.0 million to $295.0 million and non-GAAP operating-margin guidance spans 1.5% to 5.5%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $281.1 million | – | up 6.1% year-over-year |
| Gross marginGAAP | 37.0% | – | – |
| Gross marginnon-GAAP | 40.7% | – | – |
| Operating marginGAAP | -3.6% | – | – |
| Operating marginnon-GAAP | 3.8% | – | – |
| Diluted loss per shareGAAP | $0.13 | – | – |
| Diluted earnings per sharenon-GAAP | $0.04 | – | – |
| Net cash provided by operating activitiesGAAP | $25.9 million | – | – |
| Cash and cash equivalentsGAAP | $79.2 million | – | – |
third quarter of 2026 outlook
- Revenue$275.0 million to $295.0 million
- NoteNon-GAAP operating margin: 1.5% to 5.5%
What drove it
- Demand across end markets remained strong during the quarter, led by Optical Networking Solutions.
- Revenue from cloud providers/hyperscalers, enterprise, and government customers grew 47% year-over-year.
- Management cited increasing customer diversity across cloud providers/hyperscalers, enterprise, and government customers.
- Management said its strategic priorities remained on track and that it continued to gain momentum in optical networking.
Concerns
- Second-quarter results were affected by a specific set of near-term factors, according to management.
- GAAP operating margin was -3.6%.
- The Company reported a GAAP diluted loss per share of $0.13.
- The filing identifies risks related to credit-agreement covenants, convertible-note obligations, payment obligations under the DPLTA, indebtedness, and the ability to generate cash.
- The filing identifies ongoing material weaknesses in internal control over financial reporting.
What to watch
- Third-quarter revenue delivery against the guided range of $275.0 million to $295.0 million.
- Third-quarter non-GAAP operating margin delivery against the guided range of 1.5% to 5.5%.
- Whether the near-term factors affecting second-quarter results persist.
- Demand and revenue growth among cloud providers/hyperscalers, enterprise, and government customers.
- Progress in optical networking and customer diversification.
Balance sheet and cash flow
- Cash and cash equivalents: $79,236 (June 30, 2026); $95,696 (December 31, 2025).
- Accounts receivable, net: $205,761 (June 30, 2026); $210,687 (December 31, 2025).
- Inventory, net: $208,778 (June 30, 2026); $215,736 (December 31, 2025).
- Total Current Assets: $617,786 (June 30, 2026); $635,224 (December 31, 2025).
- Total Assets: $1,149,961 (June 30, 2026); $1,204,493 (December 31, 2025).
- Total Current Liabilities: $344,805 (June 30, 2026); $361,860 (December 31, 2025).
- Net cash provided by operating activities: $25.9 million.
Analysis
ADTRAN reported second-quarter revenue of $281.1 million, up 6.1% year-over-year. Management characterized demand across its end markets as strong and said Optical Networking Solutions led the quarter. It also cited 47% year-over-year revenue growth from cloud providers/hyperscalers, enterprise, and government customers, framing the period around optical-networking momentum and a more diversified customer base.
Profitability was positive on the non-GAAP measures disclosed in the release, with gross margin of 40.7%, operating margin of 3.8%, and diluted earnings per share of $0.04. GAAP results remained loss-making, however, with gross margin of 37.0%, operating margin of -3.6%, and diluted loss per share of $0.13. Management attributed the quarter's results to a specific set of near-term factors while maintaining that the underlying business trajectory remained intact.
Cash generation was positive, with net cash provided by operating activities of $25.9 million. Cash and cash equivalents were reported as $79.2 million in the earnings highlights, while the balance sheet reports $79,236 as of June 30, 2026, compared with $95,696 at December 31, 2025. The release did not disclose capital-return activity. The filing also identifies indebtedness, cash-generation capacity, credit-agreement obligations, DPLTA obligations, and ongoing material weaknesses in internal control over financial reporting as risks.
For the third quarter of 2026, ADTRAN expects revenue of $275.0 million to $295.0 million and non-GAAP operating margin of 1.5% to 5.5%. The guided profitability range places attention on the durability of non-GAAP operating performance following the reported 3.8% second-quarter margin, while revenue delivery will test management's stated optical-networking and diversified-customer demand drivers.
The central items to monitor are the persistence of the near-term factors cited for the second quarter, execution against the third-quarter ranges, and continued demand from cloud providers/hyperscalers, enterprise, and government customers. The release provides no prior outlook, so reported second-quarter results cannot be assessed against prior Company guidance from the materials provided.
Management, verbatim
Demand across our end markets remained strong during the quarter led by the results of our Optical Networking Solutions business. While our second quarter results were affected by a specific set of near-term factors, it does not change the underlying strength or trajectory of our business.
Tom Stanton, Chairman and Chief Executive Officer
Our strategic priorities remain on track. We continue to gain momentum in optical networking while increasing diversity across cloud providers/hyperscalers, enterprise, and government customers, with revenue from these customers growing 47% year-over-year. We remain committed to our long-term operating model and remain confident that our strategy will deliver long-term shareholder value.
Tom Stanton, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided; comparison of actual results with prior guidance is unavailable.
- Segment revenue, segment revenue comparisons, and segment-level profitability were not provided in the supplied filing text.
- GAAP and non-GAAP gross profit, cost of revenue, operating income, operating expenses, net income, and free cash flow were referenced as reconciled measures but their figures were not included in the supplied filing text.
- Prior-year and prior-quarter amounts for revenue, margins, earnings per share, operating cash flow, and cash flow metrics were not provided on the corresponding metric lines in the supplied filing text.
- Capital returns, including share repurchases and dividends, were not provided.
- Complete debt balances were not available because the supplied balance-sheet text is truncated at the non-current revolving credit agreement line.
- Third-quarter guidance for GAAP measures, gross margin, operating expenses, tax rate, earnings per share, operating cash flow, free cash flow, capital expenditures, and capital returns was not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.