Amira Manai

Amira Manai from ODDO BHF requested details on ADTRAN's supply chain exposure to Asia, the reasons for Europe's outperformance, and the company's competitive positioning in key technology areas.

Answer

CEO Thomas Stanton stated that ADTRAN has proactively moved most of its finished goods manufacturing out of China, minimizing tariff impacts. He attributed Europe's strong performance to a robust market environment rather than U.S. weakness. Technologically, he highlighted ADTRAN's advantages in mid-network optical transport, its scalable fiber access platform, and its comprehensive Mosaic One software suite.

Amira Manai asked about the factors that could cause the Q1 non-GAAP operating margin to fall to the lower end of the 0% to 4% guidance range. She also inquired about the current status of the BEAD program and its potential impact on ADTRAN's business.

Answer

CFO Ulrich Dopfer explained that achieving revenue at the lower end of the guidance would naturally push operating margin toward the lower end of its range. He also cited potential variability in gross margin and a slight increase in operating expenses from normalized payroll and benefit adjustments as factors. CEO Thomas Stanton stated that the BEAD program has no significant impact on the company's current-year forecast, and any delays would not materially affect their plans.