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ADTN Nasdaq· ADTRAN Holdings Inc.
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ADTN Nasdaq· ADTRAN Holdings Inc.
Earnings report Q3 2023

ADTN Reports Decrease in Domestic Revenue but Overall Revenue Growth in Latest Quarter

Segments of Revenue

ADTN's revenue for the three months ended September 30, 2023, decreased by 20.1% to $272.3 million compared to the same period last year. However, for the nine months ended September 30, 2023, revenue increased by 38.4% to $923.6 million. The decrease in revenue for the latest quarter was primarily driven by a $63.0 million decrease in sales volume related to ADTRAN, Inc. operations, as customers focused on reducing inventory levels. Additionally, there was a $5.4 million decrease in revenue generated outside of the U.S. due to the strengthened U.S. dollar.

Strengths

Despite the decrease in domestic revenue for the latest quarter, ADTN experienced overall revenue growth for the nine-month period. This growth was primarily due to higher sales volume of software services and business solutions services. The company's management highlighted the increase in sales activity from the Business services segment as a key driver of the revenue growth. ADTN's focus on software services and business solutions seems to have paid off, contributing to the overall positive revenue trend.

Challenges

ADTN faced a significant challenge in the form of a 34.3% decrease in domestic revenue for the latest quarter. This decrease was primarily attributed to lower sales volume of residential solutions products, as customers focused on reducing inventory levels in the Subscriber Solutions segment. The company needs to address this weakness and find ways to boost sales in the domestic market to ensure sustained revenue growth.

Noteworthy

It is noteworthy that ADTN's revenue growth for the nine months ended September 30, 2023, outpaced the decrease in revenue for the latest quarter. This indicates that the company's overall performance remains positive, despite the challenges faced in the domestic market. ADTN's focus on software services and business solutions has helped drive revenue growth, and the management's comments suggest that they are actively addressing the challenges in the Subscriber Solutions segment.

Summary

ADTN reported a decrease in domestic revenue for the latest quarter, primarily due to lower sales volume of residential solutions products. However, the company's overall revenue for the nine-month period showed growth, driven by higher sales volume of software services and business solutions services. ADTN's focus on these segments has been a strength, contributing to the positive revenue trend. The company needs to address the challenges in the Subscriber Solutions segment and find ways to boost sales in the domestic market to ensure sustained revenue growth. Overall, ADTN's performance remains positive, with noteworthy revenue growth for the nine-month period.

Source documents

Form 10-Q  filed on Nov 09, 2023
117 pages scanned

Reference data

Company financials Q3 revenue 225M
Analyst estimates Q3 EPS beat by 938.10%
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