ADTRAN Reports 17.3% Revenue Growth to $265.1 Million in Q2 2025

ADTRAN Holdings, Inc. reported a significant increase in financial performance for the second quarter of 2025, with total revenue reaching $265.1 million, a 17.3% increase compared to $225.9 million in the same period last year. The company's Network Solutions segment contributed $219.5 million, up 22.5% year-over-year, while Services & Support revenue slightly decreased by 2.6% to $45.6 million. For the first half of 2025, total revenue was $512.8 million, reflecting a 13.4% increase from $452.2 million in the prior year. Despite the revenue growth, ADTRAN reported a net loss of $20.5 million for the quarter, a notable improvement from a loss of $49.7 million in Q2 2024.

The company experienced operational improvements driven by a return to normalized customer spending and increased demand for fiber expansion, particularly in the U.S. and international markets. U.S. revenue increased by 11.8% to $120.3 million, while international revenue surged by 22.2% to $144.7 million. The growth was attributed to increased sales activity across various product lines, including Access & Aggregation and Optical Networking Solutions. However, the Services & Support segment faced challenges, primarily due to a decline in installation and system integration services.

ADTRAN's operational efficiency was further enhanced by the completion of its Business Efficiency Program, which aimed to reduce ongoing operating expenses and improve capital efficiency. The program, completed by the end of 2024, included measures such as salary reductions and site consolidations. As a result, selling, general, and administrative expenses as a percentage of revenue decreased from 26.3% in Q2 2024 to 22.8% in Q2 2025. Research and development expenses also saw a decline, reflecting the company's focus on cost management.

In terms of liquidity, ADTRAN reported cash and cash equivalents of $106.3 million as of June 30, 2025, an increase from $76.0 million at the end of 2024. The company has access to a $350 million revolving credit facility, with $190.2 million drawn as of the reporting date. However, it faces ongoing obligations under the Domination and Profit and Loss Transfer Agreement (DPLTA) with Adtran Networks, which includes absorbing annual net losses and providing annual recurring compensation to minority shareholders. The company accrued $4.8 million in annual recurring compensation for the first half of 2025.

Looking ahead, ADTRAN anticipates continued revenue growth driven by increased customer demand and market expansion. The company is focused on maintaining compliance with its debt covenants and managing its liquidity effectively, especially in light of potential impacts from ongoing appraisal proceedings related to the DPLTA. Management expects to leverage its cash reserves and credit facilities to support operational needs and strategic initiatives in the coming months.