Earnings release
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NEWS RELEASE ADTRAN Holdings, Inc. reports third quarter 2026 nancial results 2026-11-02 HUNTSVILLE, Ala.--(BUSINESS WIRE)-- ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) (“ADTRAN Holdings” “ADTRAN” or the “Company”) today announced its unaudited nancial results for the third quarter ended September 30, 2026. Revenue: $281.2 million, up 0.6 % year-over-year. GAAP gross margin of 38.5%; non-GAAP gross margin of 42.1%, including bene t of approximately 200 basis points from IEEPA 1 refunds. GAAP operating margin of -0.3 %; non-GAAP operating margin of 5.0%. Net cash used in operating activities of $24.5 million. GAAP diluted loss per share of $0.10; non-GAAP diluted earnings per share of $0.09. Cash, cash equivalents and restricted cash of $71.7 million. ADTRAN Holdings Chairman and Chief Executive O cer Tom Stanton stated, “Third quarter revenue came in slightly below the midpoint of our guidance range as we continued to navigate a challenging supply environment. Despite these pressures, we saw encouraging developments across the business, including continued growth in optical networking and increasing growth with hyperscale customers. The rapid expansion of AI infrastructure is reshaping network investment priorities, creating opportunities for ADTRAN not only in cloud infrastructure but also across our traditional service provider markets.” “Looking ahead, we see signi cant opportunities to build on this momentum as customers invest in network capacity, performance and security,” Stanton continued. “Our focus is on addressing the supply and cost pressures a ecting our business, maintaining nancial discipline and translating these opportunities into stronger revenue growth, pro tability and cash generation.” Business outlook2 For the fourth quarter of 2026, the Company expects revenue to be within a range of $272.0 million to $292.0 million. Non-GAAP operating margin is expected to be within a range of 1.0% to 5.0% re ecting historical seasonality, availability of supply and timing of large customer projects. 1International Emergency Economic Powers Act 2 Non-GAAP operating margin (which is calculated as non-GAAP operating income (loss) divided by revenue) is f f 1
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a non-GAAP nancial measure. The Company has provided guidance for its fourth quarter 2026 non-GAAP operating margin. This measure excludes from the corresponding GAAP nancial measure the e ect of adjustments as described below. The Company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot predict and quantify without unreasonable e ort all of the adjustments that may occur during the period due to the di culty of predicting the timing and amounts of various items within a reasonable range. In particular, non-GAAP operating margin excludes certain items, such as acquisition related expenses, amortization and adjustments, stock-based compensation expense, deferred compensation adjustments, professional fees and other expenses, amortization of pension actuarial losses, the tax e ect of these adjustments to net loss and purchases of property, plant and equipment, and developed technologies, that the Company is unable to quantitatively predict. Depending on the materiality of these items, they could have a signi cant impact on the Company's GAAP nancial results. Conference call The Company will hold a conference call to discuss its third quarter 2026 results on Tuesday, November 3, 2026, at 7:30 a.m. Central Time (2:30 p.m. Central European Time). The Company will webcast this conference call, or you may dial in to participate. To listen, visit the events and presentations section of ADTRAN Holdings, Inc. Investor Relations site at https://events.q4inc.com/attendee/684798638 approximately 10 minutes before the start of the call, or you may dial 1-833-461-5787 (Toll-Free US) or 1-585-542-9983, and use Conference ID 684798638. An online replay of the Company’s conference call, as well as the transcript of the call, will be available on the Investor Relations site https://investors.adtran.com/ shortly following the call and will remain available for at least 12 months. For more information, visit investors.adtran.com or email investor.relations@adtran.com. Upcoming conference schedule November 17, 2026: Craig-Hallum Alpha Select Conference – New York January 12, 2027: Needham 29th Annual Growth Conference – New York About Adtran ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) is the parent company of Adtran, Inc., a leading global provider of open, disaggregated networking and communications solutions that enable voice, data, video and internet communications across any network infrastructure. From the cloud edge to the subscriber edge, Adtran empowers communications service providers around the world to manage and scale services that connect people, places and things. Adtran solutions are used by service providers, private enterprises, government organizations and millions of individual users worldwide. ADTRAN Holdings, Inc. is also the majority shareholder of Adtran Networks SE, formerly ADVA Optical Networking SE (“Adtran Networks”). Find more at Adtran.com, LinkedIn and X. Cautionary note regarding forward-looking statements Statements and graphics contained in this press release and the accompanying earnings call which are not historical facts, such as those relating to market trends, future demand across end markets, future demand driver growth (including with respect to expected hyperscale demand for data center interconnect and next- generation connectivity) and ADTRAN Holdings’ strategy, outlook and nancial guidance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can also generally be identi ed by the use of words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could,” “look forward,” and similar expressions. In addition, ADTRAN Holdings, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such projections and other forward-looking information speak only as of the date hereof, and ADTRAN Holdings undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise, except to the extent as may be required by law. All such forward-looking statements are estimates and re ect management’s best judgment based upon current information. Actual events or results may di er materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to 2
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identify all such factors, factors which have caused and may in the future cause actual events or results to di er materially from those estimated by ADTRAN Holdings include, but are not limited to: (i) risks and uncertainties relating to our ability to remain in compliance with the covenants set forth in and satisfy the payment obligations under our credit agreement and convertible notes, to satisfy our payment obligations to Adtran Networks’ minority shareholders under the Domination and Pro t and Loss Transfer Agreement between us and Adtran Networks (the “DPLTA”), and to make payments to Adtran Networks in order to absorb its annual net loss pursuant to the DPLTA; (ii) the risk of uctuations in revenue due to lengthy sales and approval processes required by major and other service providers for new products, as well as shifting customer spending patterns; (iii) risks and uncertainties related to our inventory practices and ability to match customer demand; (iv) risks and uncertainties relating to our level of indebtedness and our ability to generate cash; (v) risks and uncertainties relating to ongoing material weaknesses in our internal control over nancial reporting; (vi) risks posed by changes in general economic conditions and monetary, scal and trade policies, including tari s; (vii) risks and uncertainties relating to our international operations, including potential exposure to ongoing military con icts (including the con icts in Iran, Ukraine, and Israel and the surrounding areas); (viii) risks posed by potential breaches of information systems and cyber-attacks; (ix) the risk that we may not be able to e ectively compete, including through product improvements and development; and (x) the other risks set forth in our public lings made with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K for the year ended December 31, 2025, our Form 10-Q for the quarterly period ended March 31, 2026, our Form 10-Q for the quarterly period ended June 30, 2026 and our Form 10-Q for the quarterly period ended September 30, 2026 to be led with the SEC. Explanation of use of non-GAAP nancial measures Set forth in the tables below under the heading “Supplemental Information” are reconciliations of cost of revenue, gross pro t, gross margin, operating expenses, operating (loss) income, operating margin, other income (expense), net (loss) income inclusive of the non-controlling interest, net loss attributable to the Company, and loss per share - basic and diluted, attributable to the Company, and net cash provided by operating activities, in each case as reported based on generally accepted accounting principles in the United States (“GAAP”), to non-GAAP cost of revenue, non-GAAP gross pro t, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP other expense, non- GAAP net income inclusive of the non-controlling interest, non-GAAP net income (loss) attributable to the Company, non-GAAP net earnings (loss) per share - basic and diluted, attributable to the Company, and free cash ow, respectively. Such non-GAAP measures exclude acquisition-related expenses, amortizations and adjustments (consisting of intangible amortization of backlog, developed technology, customer relationships, and trade names acquired in connection with business combinations), stock-based compensation expense, professional fees and other expenses, restructuring expenses, deferred compensation adjustments, amortization of pension actuarial losses, the tax e ect of these adjustments to net loss and purchases of property, plant and equipment, and developed technologies. These measures are used by management in our ongoing planning and annual budgeting processes. Additionally, we believe the presentation of these non- GAAP measures, when combined with the presentation of the most directly comparable GAAP nancial measure, is bene cial to the overall understanding of ongoing operating performance of the Company. These non-GAAP nancial measures are not prepared in accordance with, or an alternative for, GAAP and therefore should not be considered in isolation or as a substitution for analysis of our results as reported under GAAP. Furthermore, our calculation of non-GAAP measures may not be comparable to similar measures calculated by other companies. 3
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Condensed Consolidated Balance Sheets(Unaudited)(In thousands)September 30,December 31,2026 2025 AssetsCurrent AssetsCash and cash equivalents$ 64,627$ 95,696Restricted cash 7,097 —Accounts receivable, net 235,081210,687Other receivables 9,326 7,046Inventory, net 227,369215,736Income tax receivable 2,526 3,667Prepaid expenses and other current assets60,073 55,317Short-term investments - deferred compensation38,808 35,174Assets held for sale 11,901 11,901 Total Current Assets 656,808635,224Property, plant and equipment, net119,824124,384Goodwill 57,869 59,983Intangible assets, net 259,280294,047Deferred tax assets 16,223 16,481Other non-current assets 65,811 73,352Long-term investments 1,044 1,022 Total Assets $ 1,176,859$ 1,204,493 Liabilities, Redeemable Non-Controlling Interest and EquityCurrent LiabilitiesAccounts payable $ 179,046$ 167,337Unearned revenue 72,495 87,541Accrued expenses and other liabilities26,036 33,690Accrued wages and bene ts 24,982 32,203Deferred compensation liability40,567 37,447Income tax payable 5,105 3,642 Total Current Liabilities 348,231361,860Non-current revolving credit agreement82,961 25,000Non-current convertible senior notes, net of debt issuance costs194,223193,038Deferred tax liabilities 25,601 27,453Non-current unearned revenue28,607 27,143Non-current pension liability 6,414 6,277Non-current lease obligations 23,511 27,000Other non-current liabilities 7,468 17,564 Total Liabilities 717,016685,335Redeemable Non-Controlling Interest340,225373,328EquityCommon stock 815 802Additional paid-in capital 808,838801,269Accumulated other comprehensive income59,437 78,877Retained de cit (744,457) (730,010)Treasury stock (5,015) (5,108) Total Equity 119,618145,830 Total Liabilities, Redeemable Non-Controlling Interest and Equity$ 1,176,859$ 1,204,493 4
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Condensed Consolidated Statements of Loss(Unaudited)(In thousands, except per share amounts)Three Months EndedNine Months EndedSeptember 30,September 30,2026 2025 2026 2025 RevenueNetwork Solutions $ 231,222$ 232,543$ 702,061$ 654,258Services & Support 49,94546,892146,338137,989 Total Revenue 281,167279,435848,399792,247Cost of RevenueNetwork Solutions 153,979153,107466,212434,669Services & Support 18,95619,20257,01656,352 Total Cost of Revenue172,935172,309523,228491,021Gross Pro t 108,232107,126325,171301,226Selling, general and administrative expenses56,98358,234173,062168,866Research and development expenses52,00351,680156,559152,434 Operating Loss (754) (2,788) (4,450) (20,074)Interest and dividend income608 291 1,305 618Interest expense (5,253) (5,499) (13,728) (14,824)Net investment (loss) gain(154) 2,1864,2703,575Other income (expense), net993 (745) 2,974(2,437) Loss Before Income Taxes(4,560) (6,555) (9,629) (33,142)Income tax expense (2,583) (1,202) (5,288) (1,821) Net Loss $ (7,143)$ (7,757)$ (14,917)$ (34,963)Less: Net Income attributable to non- controlling interest (1) 2,0852,5056,5377,097 Net Loss attributable to ADTRAN Holdings, Inc.$ (9,228)$ (10,262)$ (21,454)$ (42,060) Weighted average shares outstanding – basic81,22279,80380,83679,696Weighted average shares outstanding – diluted81,22279,80380,83679,696Loss per common share attributable to ADTRAN Holdings, Inc. – basic(2) $ (0.10)$ (0.12)$ (0.24)$ (0.50)Loss per common share attributable to ADTRAN Holdings, Inc. – diluted (2) $ (0.10)$ (0.12)$ (0.24)$ (0.50)(1) For the three and nine months ended September 30, 2026 we accrued $2.1 million and $6.5 million,respectively, net income attributable to non-controlling interest, representing the recurring cash compensationearned by non-controlling interest shareholders post-DPLTA. For the three and nine months ended September30, 2025, we accrued $2.5 million and $7.5 million, respectively, representing the recurring cash compensationearned by non-controlling interest shareholders post-DPLTA.(2) Loss per common share attributable to ADTRAN Holdings, Inc. - basic and diluted - re ects a $1.0 millionand $1.9 million e ect of redemption of RNCI for the three and nine months ended September 30, 2026,respectively, and a $0.5 million and a $2.0 million e ect of redemption of RNCI for the three and nine monthsended September 30, 2025. 5
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Condensed Consolidated Statements of Cash Flows(Unaudited)(In thousands)Nine Months EndedSeptember 30,2026 2025 Cash ows from operating activities:Net loss $ (14,917)$ (34,963)Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization76,65768,316Amortization of debt issuance cost2,501 975Amortization of convertible notes issuance costs1,197 45Gain on investments, net (4,531) (3,828)Net loss on disposal of property, plant and equipment82 38Stock-based compensation expense7,6268,738Deferred income taxes (1,205) 715Inventory reserves 2,6558,754Changes in operating assets and liabilities:Accounts receivable, net (29,897) 12,295Other receivables (4,989) 1,769Income taxes receivable, net 1,695(752)Inventory (18,684) 45,426Prepaid expenses, other current assets and other assets2,8397,162Accounts payable 15,332585Accrued expenses and other liabilities(25,706) (26,589)Income taxes payable 3,460(1,157) Net cash provided by operating activities14,11587,529 Cash ows from investing activities:Purchases of property, plant and equipment(22,198) (20,066)Intangibles - internally developed technology(25,895) (29,491)Proceeds from sales and maturities of available-for-sale investments1,113 960Purchases of available-for-sale investments(202) (318)Net payments for bene cial interests in securitized accounts receivable(412) (232) Net cash used in investing activities(47,594) (49,147) Cash ows from nancing activities:Tax withholdings related to stock-based compensation settlements(1,622) (1,313)Proceeds from stock option exercises6,7381,434Payments on nancing agreement(2,800) —Redemption of redeemable non-controlling interest(31,902) (19,364)Payment of annual recurring compensation to non-controlling interest(8,881) (10,053)Proceeds from draw on revolving credit agreements87,96124,000Repayment of revolving credit agreements(30,000) (189,000)Proceeds from issuance of convertible notes— 201,250Payments for capped call transactions related to convertible senior notes— (17,650)Payment of debt issuance costs(6,422) (7,350) Net cash provided by (used in) nancing activities13,072(18,046) Net (decrease) increase in cash and cash equivalents(20,407) 20,336E ect of exchange rate changes(3,565) 4,872Cash and cash equivalents, beginning of period95,69676,021 Cash, cash equivalents and restricted cash, end of period$ 71,724$ 101,229 Supplemental disclosure of cash nancing activities:Cash paid for interest expense$ 11,145$ 13,335Cash paid for income taxes, net$ 4,038$ 2,407Cash used in operating activities related to operating leases$ 7,028$ 7,737Supplemental disclosure of non-cash investing and nancing activities:Redemption of redeemable non-controlling interest$ 1,914$ 2,010Right-of-use assets obtained in exchange for lease obligations$ 1,311$ 3,689Purchases of property, plant and equipment included in accounts payable$ 804$ 4,874Purchases of property, plant and equipment included in other non-currentliabilities $ —$ 5,157Debt issuance costs included in accrued expenses and other liabilities$ —$ 1,493 6
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Supplemental InformationReconciliation of Cost of Revenue Gross Pro t and Gross Margin toNon-GAAP Cost of Revenue, Non-GAAP Gross Pro t and Non-GAAP Gross Margin(Unaudited)(In thousands)Three Months EndedNine Months Ended September30, June 30,September30, September30, September30,202620262025 2026 2025 Total Revenue$281,167$281,146$279,435$848,399$792,247Cost of Revenue$172,935$177,195$172,309$523,228$491,021Acquisition-related expenses, amortizations and adjustments(1) (9,849) (9,949) (10,140) (29,819) (30,570)Stock-based compensation expense(226) (181) (265) (547) (754)Professional fees and other expenses(2) — (438) — (438) — Non-GAAP Cost of Revenue$162,860$166,627$161,904$492,424$459,697 Gross Pro t $108,232$103,951$107,126$325,171$301,226Non-GAAP Gross Pro t$118,307$114,519$117,531$355,975$332,550Gross Margin 38.5% 37.0% 38.3% 38.3% 38.0%Non-GAAP Gross Margin42.1% 40.7% 42.1% 42.0% 42.0%(1) Includes intangible amortization of backlog, developed technology, customer relationships, and tradenames acquired in connection with business combinations. We incur charges relating to the amortization ofintangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such chargesare signi cantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for thepurpose of calculating our non-GAAP measures, primarily because they are noncash expenses and our internalbenchmarking analyses evidence that many industry participants and peers present non-GAAP nancialmeasures excluding intangible asset amortization. Although this does not directly a ect our cash position, theloss in value of intangible assets over time can have a material impact on the equivalent GAAP earningsmeasure.(2) Included in cost of revenue on the condensed consolidated statements of loss. Includes $0.4 million inrelated employee exit costs. 7
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Supplemental InformationReconciliation of Operating Expenses to Non-GAAP Operating Expenses(Unaudited)(In thousands)Three Months EndedNine Months Ended September30, June 30,September30, September30, September30,2026 2026 2025 2026 2025 Operating Expenses$108,986$114,022$109,914$329,621$321,300Acquisition-related expenses,amortizations and adjustments(1) (1,642)(2) (1,630)(6) (1,898) (9) (4,913)(12) (6,322)(15) Stock-based compensationexpense (2,735)(3) (2,675)(7) (2,589)(10) (7,089)(13) (7,983)(16) Restructuring expenses— — — — 284(17) Deferred compensation adjustments(4) 2,017(5,494) (2,317) (3,466) (3,804) Business transformation(5) (2,403) — — (2,403) —Professional fees and otherexpenses — (307)(8) (694)(11) (337)(14) (3,847)(18) Non-GAAP OperatingExpenses $104,223$103,916$102,416$311,413$299,628 (1) We incur charges relating to the amortization of intangible assets and exclude these charges for purposesof calculating our non-GAAP measures. Such charges are signi cantly impacted by the timing and magnitude ofour acquisitions. We exclude these charges for the purpose of calculating our non-GAAP measures, primarilybecause they are noncash expenses and our internal benchmarking analyses evidence that many industryparticipants and peers present non-GAAP nancial measures excluding intangible asset amortization. Althoughthis does not directly a ect our cash position, the loss in value of intangible assets over time can have amaterial impact on the equivalent GAAP earnings measure.(2) Includes intangible amortization of developed technology, customer relationships, and trade namesacquired in connection with business combinations, of which $1.4 million is included in selling, general andadministrative expenses and $0.2 million is included in research and development expenses on the condensedconsolidated statements of loss.(3) $1.9 million is included in selling, general and administrative expenses and $0.8 million is included inresearch and development expenses on the condensed consolidated statements of loss.(4) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. DeferredCompensation Program for Employees, all of which is included in selling, general and administrative expenseson the condensed consolidated statement of loss.(5) Includes $2.4 million in selling, general and administrative on the condensed consolidated statements ofloss. This relates to expenses associated with the global ERP go-live and restructuring costs resulting from thatproject.(6) Includes intangible amortization of developed technology, customer relationships, and trade namesacquired in connection with business combinations, of which $1.4 million is included in selling, general andadministrative expenses and $0.2 million is included in research and development expenses on the condensedconsolidated statements of loss.(7) $2.0 million is included in selling, general and administrative expenses and $0.7 million is included inresearch and development expenses on the condensed consolidated statements of loss.(8) Included in selling, general and administrative expenses on the condensed consolidated statements of loss.Includes one-time professional fees and business expenses.(9) Includes intangible amortization of developed technology, customer relationships, and trade namesacquired in connection with business combinations, of which $1.4 million is included in selling, general andadministrative expenses and $0.5 million is included in research and development expenses on the condensedconsolidated statements of loss acquired in connection with business combinations.(10) $1.8 million is included in selling, general and administrative expenses and $0.8 million is included inresearch and development expenses on the condensed consolidated statements of loss.(11) Included in selling, general and administrative expenses on the condensed consolidated statements of lossand includes professional fees related to an internal investigation and related employee exit costs, fees relatingto other one-time professional fees and business expenses.(12) Includes intangible amortization of developed technology, customer relationships, and trade namesacquired in connection with business combinations, of which $4.3 million is included in selling, general andadministrative expenses and $0.6 million is included in research and development expenses on the condensedconsolidated statements of loss.(13) $5.1 million is included in selling, general and administrative expenses and $2.0 million is included inresearch and development expenses on the condensed consolidated statements of loss.(14) Included in selling, general and administrative and research and development expenses on the condensedconsolidated statements of loss. Includes $0.1 million in one-time professional fees and business expenses,$1.0 million in related employee exit costs and o set by a $1.4 million reversal of a provision in connectionwith a 401(k) plan corrective action which the Company received a compliance statement from the IRS i t ti d tt tth tt 8
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approving a retroactive amendment to correct the matter.(15) Includes intangible amortization of developed technology, customer relationships, and trade namesacquired in connection with business combinations, of which $4.9 million is included in selling, general andadministrative expenses and $1.4 million is included in research and development expenses on the condensedconsolidated statements of loss.(16) $5.6 million is included in selling, general and administrative expenses and $2.4 million is included inresearch and development expenses on the condensed consolidated statements of loss.(17) Includes true-up of expenses for a Business E ciency Program designed to optimize the assets andbusiness processes following the business combination with Adtran Networks. Other than the Company's aimof selling buildings of its headquarters, the Business E ciency Program was completed as of December 31,2024.(18) $3.8 million is included in selling, general and administrative expenses on the condensed consolidatedstatements of loss. Includes professional fees related to an internal investigation and related employee exitcosts, fees relating to other one-time professional fees and business expenses. 9
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Supplemental InformationReconciliation of Operating Loss and Operating Margin to Non-GAAP Operating Incomeand Non-GAAP Operating Margin(Unaudited)(In thousands)Three Months EndedNine Months Ended September30, June 30,September30, September30, September30,20262026 2025 2026 2025 Total Revenue$281,167$281,146$279,435$848,399$792,247Operating Loss$ (754) $(10,071) $ (2,788) $ (4,450) $ (20,074)Acquisition related expenses,amortizations and adjustments(1) 11,49211,57912,03834,73336,892Stock-based compensationexpense 2,9602,856 2,855 7,635 8,738Restructuring expenses— — — — (284)Deferred compensation adjustments(2) (2,017) 5,494 2,317 3,466 3,804Business transformation(3) 2,403 — — 2,403 —Professional fees and otherexpenses — 745(4) 694(5) 775(4) 3,847(5) Non-GAAP Operating Income$ 14,084$10,603$ 15,116$ 44,562$ 32,923 Operating Margin-0.3% -3.6% -1.0% -0.5% -2.5%Non-GAAP Operating Margin5.0% 3.8% 5.4% 5.3% 4.2%(1) Includes intangible amortization of backlog, developed technology, customer relationships, and tradenames acquired in connection with business combinations. We incur charges relating to the amortization ofintangible assets and exclude these charges for purposes of calculating our non-GAAP measures. Such chargesare signi cantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for thepurpose of calculating our non-GAAP measures, primarily because they are noncash expenses and our internalbenchmarking analyses evidence that many industry participants and peers present non-GAAP nancialmeasures excluding intangible asset amortization. Although this does not directly a ect our cash position, theloss in value of intangible assets over time can have a material impact on the equivalent GAAP earningsmeasure.(2) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. DeferredCompensation Program for certain employees, all of which is included in selling, general and administrativeexpenses on the condensed consolidated statement of loss.(3) Includes $2.4 million in selling, general and administrative on the condensed consolidated statements ofloss. This relates to expenses associated with the global ERP go-live and restructuring costs resulting from thatproject.(4) Included in cost of revenue, selling, general and administrative and research and development expenses onthe condensed consolidated statements of loss. Includes $0.1 million in one-time professional fees andbusiness expenses, $2.0 million in related employee exit costs and o set by a $1.4 million reversal of aprovision in connection with a 401(k) plan corrective action which the Company received a compliancestatement from the IRS approving a retroactive amendment to correct the matter.(5) Included in selling, general and administrative expenses on the condensed consolidated statements of loss.Includes one-time professional fees and business expenses.(6) Included in cost of revenue, selling, general and administrative and research and development expenses onthe condensed consolidated statements of loss. Includes $0.1 million in one-time professional fees andbusiness expenses, $2.1 million in related employee exit costs and o set by a $1.4 million reversal of aprovision in connection with a 401(k) plan corrective action which the Company received a compliancestatement from the IRS approving a retroactive amendment to correct the matter. 10
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Supplemental InformationReconciliation of Other (Expense) Income to Non-GAAP Other Expense(Unaudited)(In thousands)Three Months EndedNine Months Ended September30, June 30,September30, September30, September30,20262026202520262025 Interest and dividend income$ 608$ 397$ 291$ 1,305$ 618Interest expense (5,253) (4,234) (5,499) (13,728) (14,824)Net investment gain (loss)(154) 5,2742,1864,2703,575 Other income (expense), net993 718 (745) 2,974(2,437) Total Other (Expense) Income$ (3,806)$ 2,155$ (3,767)$ (5,179)$ (13,068) Deferred compensation adjustments(1) 198(5,154) (2,210) (3,944) (3,529)Extinguishment of debt (2) 1,508 - - 1,508 - Pension expense(3) (20) (20) 13 (60) 35 Non-GAAP Other Expense$ (2,120)$ (3,019)$ (5,964)$ (7,675)$ (16,562) (1) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. DeferredCompensation Program for Employees.(2) Includes write-o of unamortized debt issuance costs upon the extinguishment of the Wells Fargo RevolvingCredit Agreement on July 21, 2026.(3) Includes amortization of actuarial losses related to the Company's pension plan for employees in certainforeign countries. 11
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Supplemental InformationReconciliation of Net Loss inclusive of Non-Controlling Interest toNon-GAAP Net Income inclusive of Non-Controlling Interest(Unaudited)andReconciliation of Net Loss attributable to ADTRAN Holdings, Inc. andLoss per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted toNon-GAAP Net Income attributable to ADTRAN Holdings, Inc. andNon-GAAP Earnings per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted(Unaudited)(In thousands, except per share amounts)Three Months EndedNine Months Ended September30, June 30,September30, September30, September30,20262026 2025 2026 2025 Net Loss attributable to ADTRANHoldings, Inc. commonstockholders$ (8,199)$(10,321) $ (9,743) $ (19,540) $ (40,050) E ect of redemption of RNCI (1) (1,029) (584) (519) (1,914) (2,010) Net Loss attributable to ADTRANHoldings, Inc.$ (9,228)$(10,905) $ (10,262) $ (21,454) $ (42,060)Net Income attributable to non- controlling interest(2) 2,0852,2012,505 6,5377,097 Net Loss inclusive of non-controlling interest$ (7,143)$ (8,704) $ (7,757) $ (14,917) $ (34,963)Acquisition related expenses, amortizations and adjustments (3) 11,49211,57912,03834,73336,892Stock-based compensationexpense 2,9602,8562,855 7,6358,738Deferred compensation adjustments(4) (1,819) 340 107 (478) 275 Pension adjustments(5) (20) (20) 13 (60) 35 Restructuring expenses(6) — — — — (284) Extinguishment of debt(7) 1,508 — — 1,508 — Business transformation(8) 2,403 — — 2,403 —Professional fees and otherexpenses — 745(9) 694(10) 775(9) 3,847(11) Tax e ect of adjustments to netloss (1,177) (1,765) (2,301) (5,451) (3,893) Non-GAAP Net Income inclusiveof non-controlling interest$ 8,204$ 5,031$ 5,649$ 26,148$ 10,647Net Income attributable to non- controlling interest(2) 2,0852,2012,505 6,5377,097 Non-GAAP Net Incomeattributable to ADTRANHoldings, Inc.$ 6,119$ 2,830$ 3,144$ 19,611$ 3,550 E ect of redemption of RNCI (1) 1,029584 519 1,9142,010 Non-GAAP Net Incomeattributable to ADTRANHoldings, Inc. commonstockholders$ 7,148$ 3,414$ 3,663$ 21,525$ 5,560 Weighted average sharesoutstanding – basic81,22280,94879,80380,83679,696Weighted average sharesoutstanding – diluted81,22280,94879,80380,83679,696Loss per common shareattributable to ADTRANHoldings, Inc. – basic$ (0.10)$ (0.13) $ (0.12) $ (0.24) $ (0.50)Loss per common shareattributable to ADTRANHoldings, Inc. – diluted$ (0.10)$ (0.13) $ (0.12) $ (0.24) $ (0.50)Non-GAAP Earnings per commonshare attributable to ADTRAN –basic $ 0.09$ 0.04$ 0.05$ 0.27$ 0.07Non-GAAP Earnings per commonshare attributable to ADTRAN –diltd $ 009$ 004$ 005 $ 027$ 007 12
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diluted $ 0.09$ 0.04$ 0.05$ 0.27$ 0.07(1) Loss per common share attributable to ADTRAN Holdings, Inc. - basic and diluted - re ects a $1.0 millionand $1.9 million e ect of redemption of RNCI for the three and nine months ended September 30, 2026. Lossper common share attributable to ADTRAN Holdings, Inc. - basic and diluted - re ects a $0.5 million and a $2.0million e ect of redemption of RNCI for the three and nine months ended September 30, 2025. Loss percommon share attributable to ADTRAN Holdings, Inc. - basic and diluted - re ects a $0.6 million e ect ofredemption of RNCI for the three months ended June 30, 2026.(2) Represents the non-controlling interest portion of the Company's ownership of Adtran Networks pre-DPLTAand the annual recurring compensation earned by redeemable non-controlling interests and accrued by theCompany post-DPLTA.(3) We incur charges relating to the amortization of intangible assets and exclude these charges for purposesof calculating our non-GAAP measures. Such charges are signi cantly impacted by the timing and magnitude ofour acquisitions. We exclude these charges for the purpose of calculating our non-GAAP measures, primarilybecause they are noncash expenses and our internal benchmarking analyses evidence that many industryparticipants and peers present non-GAAP nancial measures excluding intangible asset amortization. Althoughthis does not directly a ect our cash position, the loss in value of intangible assets over time can have amaterial impact on the equivalent GAAP earnings measure.(4) Includes non-cash change in fair value of equity investments held in deferred compensation plans o eredto certain employees.(5) Includes amortization of actuarial losses related to the Company's pension plan for employees in certainforeign countries.(6) Includes reduced previously accrued cost for the Company's Business E ciency Program, which wasdesigned to optimize the assets and business processes following the business combination with AdtranNetworks. The Business E ciency Program was completed as of December 31, 2024.(7) Includes write-o of unamortized debt issuance costs upon the extinguishment of debt.(8) Includes $2.4 million in selling, general and administrative on the condensed consolidated statements ofloss. This relates to expenses associated with the global ERP go-live and restructuring costs resulting from thatproject.(9) Included in cost of revenue, selling, general and administrative and research and development expenses onthe condensed consolidated statements of loss. Includes $0.1 million in one-time professional fees andbusiness expenses, $2.0 million in related employee exit costs and o set by a $1.4 million reversal of aprovision in connection with a 401(k) plan corrective action which the Company received a compliancestatement from the IRS approving a retroactive amendment to correct the matter.(10) Included in selling, general and administrative expenses on the condensed consolidated statements ofloss. Includes one-time professional fees and business expenses.(11) Included in cost of revenue, selling, general and administrative and research and development expenseson the condensed consolidated statements of loss. Includes $0.1 million in one-time professional fees andbusiness expenses, $2.1 million in related employee exit costs and o set by a $1.4 million reversal of aprovision in connection with a 401(k) plan corrective action which the Company received a compliancestatement from the IRS approving a retroactive amendment to correct the matter.(12) Included in selling, general and administrative expenses on the condensed consolidated statements ofloss. Includes professional fees related to an internal investigation and related employee exit costs, feesrelating to other one-time professional fees and business expenses. Supplemental InformationReconciliation of Net Cash Provided By Operating Activities to Free Cash Flow(Unaudited)(In thousands)Three Months EndedNine Months Ended September30, June 30,September30, September30, September30,202620262025 20262025 Net cash (used in) provided by operatingactivities $ (24,470)$ 25,915$ 12,188$ 14,115$ 87,529Purchases of property, plant and equipment and developed technologies(1) (14,916) (17,237) (17,029) (48,093) (49,557) Free cash ow (Non-GAAP)$ (39,386)$ 8,678$ (4,841) $ (33,978)$ 37,972 (1) Purchases related to capital expenditures and developed technologies. Published by ADTRAN Holdings, Inc. www.adtran.com Media contact h 13
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Gareth Spence +44 1904 699 358 public.relations@adtran.com Investor contact Rob Fink investor.relations@adtran.com Source: ADTRAN Holdings, Inc. 14