The following is a summary of the ADTRAN Holdings, Inc. (ADTN) Q3 2024 Earnings Call Transcript:

Financial Performance:

• ADTRAN Holdings reported a Q3 2024 revenue of $227.7 million, marking a sequential increase.

• Non-GAAP gross margin in Q3 2024 improved to 42.1%, reflecting ongoing efforts to optimize the supply chain.

• The company achieved a non-GAAP operating profit of $2.5 million, or 1.1% of revenues.

• Free cash flow in Q3 2024 was positive at $23.2 million.

Business Progress:

• ADTRAN Holdings continued to grow its customer base, adding 13 new carrier customers for optical networking solutions and 11 new customers for its latest Wi-Fi platforms.

• Anticipates further growth in revenue from Access & Aggregation solutions in upcoming quarters.

• Launched customer trials for 50-gig PON connectivity, demonstrating progress in high-speed access technology.

• Continuing to drive profitability improvements through operational efficiencies, including site and product consolidation.

Opportunities:

• Expansion into global markets, particularly in EMEA and APAC regions, which have shown higher demand and are expecting further revenue growth.

• Introduction of higher speed access technologies, like 50-gig PON and XGS-PON, to meet growing demands for faster broadband services.

Risks:

• Customer cautious spending patterns, which may continue to impact revenue growth and forecasts. ADTRAN is taking a cautious approach to forecasting due to the uncertain macroeconomic environment.

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