AVIAT NETWORKS, INC. (AVNW)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY26 revenue $107.3M, up 21.4% YoY, with GAAP gross margin 33.2% (non-GAAP 33.8%); non-GAAP EPS $0.43 and Adjusted EBITDA $9.1M, marking a strong rebound versus the year-ago loss .
• Results beat S&P Global consensus on revenue ($107.3M vs $102.6M*) and non-GAAP EPS ($0.43 vs $0.285*); full-year FY26 guidance maintained at revenue $440–$460M and Adjusted EBITDA $45–$55M .
• Mix and volume drove margin expansion; North America grew 24.7% to $52.6M on public safety/private networks strength; International rose 18.3% to $54.7M on MNO timing .
• Product updates and adjacencies: Aprisa LTE/5G vehicle router launched for public safety; partnership with Intracom Telecom targets mmWave FWA — both expand exposure to high-growth, adjacent markets .
• Near-term watch items: potential federal shutdown timing effects (minor mix shift across Q2/Q3), BEAD still back-half CY26, and cautious tone on sequential Q2 despite underlying private networks strength .

What Went Well and What Went Wrong

• What Went Well

  • Material recovery vs year-ago: revenue +21.4% YoY; GAAP to non-GAAP margin uplift (33.2%/33.8% vs 22.4%/23.2% YoY) on regional/product mix and volume .
  • Private networks momentum: “U.S. public safety is perhaps the strongest…that’s going to give us a quarter-over-quarter lift” (CEO) .
  • New adjacency: launch of Aprisa LTE/5G vehicle router with USA manufacturing and FirstNet/carrier certifications; strong initial interest in ~10 large police/public safety customers .

• What Went Wrong

  • Federal shutdown timing noise: management flagged some pull-ins in Q1 and potential push-outs from Q2 to Q3; exposure small (~5% of business), but creates forecasting noise .
  • Elevated interest/other expense and tax provision weighed on GAAP EPS ($0.01) versus non-GAAP; non-GAAP adds back SBC and M&A expenses, pro forma tax adjustment .
  • BEAD remains a “tomorrow story”: increasingly constructive state-level allocations to fixed wireless, but revenue impact still expected calendar 2026 (back half) .

Financial Results

Income statement snapshot (oldest → newest)

Consensus vs actual (Q1 2026)

Values retrieved from S&P Global.
Note: Company reports Adjusted EBITDA; S&P’s “EBITDA” estimate may reflect a different definition.

Revenue mix and geography

KPIs

Quarterly trend (oldest → newest)

Guidance Changes

Management reiterates seasonal cadence: Q1 lowest, build through year, Q4 strongest (prior call) .

Earnings Call Themes & Trends

Management Commentary

• “U.S. public safety is perhaps the strongest, and that’s going to give us a quarter-over-quarter lift.” — Pete Smith, CEO .
• “We still anticipate that Aviat will not see any benefit from BEAD until calendar 2026, likely in the back half of the year.” — Pete Smith .
• “This [Aprisa LTE/5G router]…addresses a critical segment…entirely new to Aviat…made in the USA…supports all major frequency bands including FirstNet, and is certified by all of the major carriers in the US.” — Pete Smith .
• “Our goal with the tariff impact…will be to be margin neutral through productivity, sourcing, manufacturing footprint and price.” — Michael/Management .

Q&A Highlights

• Sequential outlook: conservative for Q2 despite strong U.S. public safety; shutdown could push some revenue to Q3 .
• 4RF/Aprisa cross-sell: limited customer overlap (~11%) created strong channel synergy; early traction in utilities; router opportunity targets ~$800M of a $2.8B TAM .
• India: favorable Q1 mix; remains mid-single-digit contribution; potential upgrade cycle beyond FY26 .
• Gross margin trajectory: opportunity to trend toward mid-30s% by year-end; not necessarily linear each quarter .
• Shutdown impact quantification: worst-case Q2 pull-in ~1%, push-out 4–5%; small overall federal exposure (~5% of business) .

Estimates Context

• Q1 FY26 beat on revenue and non-GAAP EPS relative to S&P Global consensus (Revenue: $107.3M vs $102.6M*; EPS: $0.43 vs $0.285*) .
• EBITDA comparability: company reports Adjusted EBITDA $9.1M; S&P “EBITDA” estimate 7.68M* likely reflects a different definition; avoid apples-to-oranges conclusions .
• FY26 guidance unchanged; Street may nudge outer-quarter estimates higher on public safety momentum, but management remains conservative pending shutdown/seasonality resolution .

Values retrieved from S&P Global.

Key Takeaways for Investors

• Solid reset: strong YoY recovery with mix-driven margin expansion; multi-quarter margin work evident (non-GAAP GM 33.8% vs 23.2% YoY) .
• Beat-and-raise absent but constructive: revenue/EPS beat; full-year guide maintained as management prioritizes credibility and navigates minor shutdown timing noise .
• Private networks as catalyst: U.S. public safety is the near-term driver; watch for QoQ lift and backlog conversion through FY26 .
• Adjacency optionality: Aprisa LTE/5G router and mmWave FWA partnership expand TAM beyond backhaul; early customer interest could build into FY26 exit/FY27 .
• BEAD is 2026 story: state allocations increasingly wireless/hybrid-friendly, but revenue impact back-half CY26; keep expectations calibrated .
• Risk checks: small federal exposure; tariff mitigation in place; GAAP/non-GAAP bridge includes SBC and M&A addbacks—monitor sustainability of non-GAAP outperformance .
• Trading lens: narrative improving on public safety and margin trajectory; catalysts include router wins, Tier-1 project awards, and evidence of BEAD-funded FWA orders .

Non-GAAP adjustments (impact)

• Q1 FY26 non-GAAP operating income $7.9M vs GAAP $5.2M; adds back SBC ($1.56M) and M&A/other ($1.19M). Non-GAAP net income $5.52M vs GAAP $0.16M after “other expense, net,” and pro forma tax adjustment .

Additional Reference Releases (Q1 FY26 period)

• Aprisa LTE/5G router for public safety vehicles launched (product + software + services) .
• Intracom Telecom partnership for 28/39 GHz mmWave FWA solutions (multi‑Gbps) .
• Earnings date/IR events (logistics) .