Aviat Networks — Fiscal 2026 Fourth Quarter Earnings Summary

Financial Performance

• Q4 total revenue reached $120.9 million, a 4.8% increase year-over-year from $115.3 million; full-year FY26 revenue was $439.7 million, up 1.2% from $434.6 million.
• Q4 GAAP operating income was $5.8 million (4.8% margin), down from $8.9 million (7.7% margin) in the prior year; Non-GAAP operating income was $10.0 million (8.3% margin), down from $12.9 million (11.2% margin).
• Full-year GAAP operating income was $19.2 million (4.4% margin), up 81.9% from $10.6 million; Non-GAAP operating income was $30.6 million (6.9% margin), up 5.2% from $29.0 million.
• Q4 GAAP net loss was $1.3 million ($0.10 per diluted share), compared to net income of $5.2 million ($0.40 per share) in the prior year; Non-GAAP net income was $8.3 million ($0.64 per share), down from $10.7 million ($0.83 per share).
• Full-year GAAP net income was $2.5 million ($0.19 per share), up from $1.3 million ($0.10 per share); Non-GAAP net income was $21.6 million ($1.66 per share), nearly flat from $21.4 million ($1.67 per share).
• Q4 GAAP gross margin was 30.8% (down 340 basis points YoY); Non-GAAP gross margin was 30.9% (down 380 basis points YoY). Full-year GAAP gross margin was 31.5% (down 60 basis points); Non-GAAP gross margin was 31.8% (down 100 basis points).
• Q4 Adjusted EBITDA was $11.9 million, down from $15.1 million; Full-year Adjusted EBITDA was $36.7 million, down from $37.1 million.
• Cash and cash equivalents were $72.8 million as of July 3, 2026; total debt was $97.0 million, resulting in net debt of $24.2 million.
• Q4 operating expenses were $31.4 million (GAAP) and $27.3 million (Non-GAAP); full-year operating expenses were $119.1 million (GAAP) and $109.2 million (Non-GAAP).

Guidance and Future Outlook

• Established FY27 full-year revenue guidance between $455 million and $470 million.
• Established FY27 full-year Adjusted EBITDA guidance between $50 million and $55 million.

Business Segments and Product Lines

• North America revenue in Q4 was $68.3 million, up 17.8% year-over-year, driven by growth with mobile service providers and private network customers; full-year North America revenue was $220.0 million, up 6.0%.
• International revenue in Q4 was $52.6 million, down 8.3% year-over-year due to timing of certain mobile network projects; full-year international revenue was $219.7 million, down 3.2%.
• Company completed its sixth consecutive fiscal year of revenue growth.
• Secured a significant order from an existing U.S. customer valued between $25.0 million and $30.0 million.
• Maintained a trailing-twelve-month book-to-bill ratio greater than 1 in the quarter.
• Fiscal 2026 backlog finished at $367 million, up 14% year-over-year.

Market and Competitive Landscape

• The company operates in the wireless transport and access solutions market, serving communications service providers and private network operators including government and defense organizations.
• Product and customer mix fluctuations drove the decrease in gross margins compared to the prior year.

Risks and Challenges

• Potential disruption to customers, vendors, and business partners from the integration of 4RF and NEC transactions, with uncertainty regarding the ability to fully realize expected synergies on the expected timeline.
• Ongoing geopolitical conflicts, including Russia-Ukraine and Israel, may cause disruptions.
• Continued price and margin erosion in the microwave transmission industry.
• Risks related to volume, timing, and customer/product/geographic mix of product orders.
• Potential inability to meet financial covenant requirements or product development dates.
• Supply chain constraints, including component shortages and supplier performance issues.
• Inflation, currency and interest rate risks, and potential trade wars or tariff impacts.
• Risks associated with customer acceptance of new products, subcontractor performance, and retention of key personnel.
• Uncertainty regarding the global economy, telecommunications sector consolidation, and government regulations.

Management Commentary and Tone

• Management highlighted the completion of six consecutive years of revenue growth and the achievement of a book-to-bill ratio greater than 1.
• The tone reflects confidence in North American growth while acknowledging international timing delays.
• Peter Smith (CEO), Andy Schmidt (CFO), Jonanna Mikulenka (CAO), and Andrew Fredrickson (VP Corporate Finance) participated in the conference call.

Other Key Points

• Repurchased $2.2 million of shares in Q4 at an average price of $16.55 per share.
• Conference call held on August 27, 2026, at 8:30 a.m. ET, with a webcast available at investors.aviatnetworks.com/events-and-presentations/events.
• The company reported restructuring charges of $1.8 million in Q4 and $2.1 million for the full year.
• Litigation and other expenses were $0.7 million in Q4 and $3.0 million for the full year.
• Share-based compensation was $1.7 million in Q4 and $6.2 million for the full year.