Summary of Aviat Networks Q4 2026 Earnings Call

1Key Financial Results and Metrics

Q4 Revenue: $121 million, a 4.8% increase year-over-year.

Full Year Revenue: $440 million, up 1.2% from FY 2025, marking the sixth consecutive year of revenue growth.

Adjusted EBITDA: $11.9 million for Q4; full year adjusted EBITDA was $36.7 million.

Non-GAAP EPS: $0.64 for Q4; GAAP net loss of $1.3 million.

Gross Margins: Q4 gross margins were 30.8% GAAP and 30.9% non-GAAP, down from 34.2% GAAP in Q4 FY 2025.

Backlog: Year-end backlog of $367 million, up 14% year-over-year.

Cash and Debt: Cash and marketable securities at $72.8 million; outstanding debt of $97 million.

2Strategic Updates and Business Highlights

Diversification: Significant growth in non-microwave products, particularly in mission-critical access.

Market Opportunities: Strong sales in the U.S. with a focus on multi-dwelling units (MDUs) and private networks, particularly in public safety and utilities.

International Growth: EMEA revenues increased by 53% in Q4 and 33% for FY 2026, driven by private network wins.

Supply Chain Management: Addressing component shortages and cost inflation through strategic supplier engagement.

3Forward Guidance and Outlook

FY 2027 Revenue Guidance: Expected between $455 million to $470 million.

Adjusted EBITDA Guidance: Anticipated in the range of $50 million to $55 million.

Seasonality: Q1 is expected to be the lowest revenue quarter, with growth anticipated in Q2 and Q4.

4Bad News, Challenges, or Points of Concern

Gross Margin Pressure: Declining gross margins due to component shortages and inflation, with expectations for continued headwinds in Q1 FY 2027.

Competitive Landscape: Ongoing competition in private networks and potential impacts from a major European competitor exiting the microwave business.

LEO Networks: No immediate revenue contribution from low earth orbit (LEO) networks factored into FY 2027 guidance, indicating a cautious approach to new opportunities.

5Notable Q&A Insights

MDU Contributions: Expected ramp-up in contributions from MDUs in Q2 FY 2027, with a significant order of $25 million to $30 million already secured.

European Competitor Exit: Anticipated benefits from a competitor exiting the microwave space, with increased opportunities expected in the coming quarters.

BEAD Program: Minimal revenue from the BEAD program included in FY 2027 guidance, with a potential for future revisions based on actual impacts.

Subscriber Growth: The MDU opportunity is closely tied to subscriber growth, with a potential annual opportunity estimated around $100 million. Overall, Aviat Networks demonstrated solid financial performance and strategic growth initiatives in Q4 2026, while also facing challenges related to gross margins and competitive pressures. The outlook for FY 2027 appears optimistic, with a focus on expanding market opportunities and managing supply chain issues.