Executive Summary

Aviat delivered Q3 FY25 revenue of $112.640M, up 1.6% YoY and ahead of S&P Global consensus $104.831M by ~7.5%; non-GAAP EPS was $0.88 vs $0.284 consensus, a major beat, and adjusted EBITDA set a quarterly record at $14.879M, driven by software mix and OpEx discipline . Estimates from S&P Global noted with asterisk below.*
Management maintained FY25 guidance (revenue $430–$470M; adjusted EBITDA $30–$40M) and said Q4 should approximate current Street consensus given macro/tariff uncertainty, avoiding raising expectations near-term .
Mix supported gross margin improvement YoY (GAAP 34.9%, non-GAAP 35.8%), aided by Pasolink software and Aprisa contribution; North America strength offset softer international timing comps (APAC) .
Tariff exposure is being mitigated with inventory, supply-base actions, and potential pass-through; management frames near-term gross margin pressure but “EPS neutral,” and sees possible U.S.-footprint share gains over ~12 months as a positive offset .

What Went Well and What Went Wrong

What Went Well
- Record adjusted EBITDA ($14.879M) on strong margins and cost control; non-GAAP EPS up 13% YoY to $0.88 .
- Software traction: initial ProVision Plus sales to Pasolink customers; management cites software mix supporting margins .
- OpEx discipline: non-GAAP OpEx down YoY; OpEx ~24% of sales, the lowest in 2+ years; cost pruning and NEC TSA roll-off helping .
What Went Wrong
- International revenues -4.8% YoY on timing of MNO capex (APAC tough comp), partially offsetting North America growth .
- Tariffs present near-term gross margin headwinds (2–2.5% of COGS upper bound) before mitigation; Q4 gross margin unlikely to “accelerate” vs Q3 .
- U.S. Tier 1 remains “between projects,” with management looking for an uptick a couple of quarters after perceived capex bottom; Africa constrained by currencies until rates moderate .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$88.429	$118.197	$112.640
GAAP Gross Margin %	22.4%	34.6%	34.9%
Non-GAAP Gross Margin %	23.2%	35.3%	35.8%
GAAP Operating Expenses ($M)	$35.356	$32.916	$30.002
Non-GAAP Operating Expenses ($M)	$30.000	$29.066	$27.241
GAAP Operating Income ($M)	$(15.568)	$7.970	$9.294
Non-GAAP Operating Income ($M)	$(9.515)	$12.566	$13.049
GAAP Diluted EPS	$(0.94)	$0.35	$0.27
Non-GAAP Diluted EPS	$(0.87)	$0.82	$0.88
Adjusted EBITDA ($M)	$(7.685)	$14.841	$14.879
Cash & Equivalents ($M)	$51.034	$52.583	$49.429
Total Debt ($M)	$83.375	$74.853	$73.923
Net Debt ($M)	~$32.3 (company disclosure)	$22.3	$24.5

Geographic revenue mix

Geography ($M)	Q1 2025	Q2 2025	Q3 2025
North America	$42.225	$57.962	$49.402
International	$46.204	$60.235	$63.238
Total	$88.429	$118.197	$112.640

Estimate comparison (S&P Global)

Metric	Q3 2025 Consensus	Actual
Revenue ($M)	$104.831*	$112.640
EPS (Primary/Non-GAAP)	$0.284*	$0.88
EBITDA ($M)	$7.050*	$14.879 (Adj. EBITDA)

Values retrieved from S&P Global.*

Notes:

Management cited record adjusted EBITDA in Q3; consensus EBITDA likely refers to EBITDA vs company-reported adjusted EBITDA; investors should reconcile definitions .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025	$430–$470M	$430–$470M	Maintained
Adjusted EBITDA	FY2025	$30–$40M	$30–$40M	Maintained

Management indicated Q4 should approximate current Street consensus and retained practice of annual guidance updates in August given macro/tariff uncertainty .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Tariffs and mitigation	Not explicit in Q1 PR; Q2 PR did not quantify tariff effects	Near-term COGS impact upper bound 2–2.5%; strategy: inventory, supply-base, footprint moves; aim for EPS neutral; possible U.S.-footprint share gains in ~12 months	Managing headwind; medium-term opportunity
U.S. Tier 1 capex	Q1 NA down on Tier 1 timing; “between projects”	Capex likely bottomed; expect demand uptick in ~2 quarters; no single customer >6.5% of revenue; potential 2.5–5% revenue lift when next project starts	Stabilizing; potential improvement
Software and ProVision Plus	Q2: Pasolink orders >$35M; run-rate ~$140M; record EBITDA aided by mix	Initial sales of ProVision Plus to Pasolink customers; software aiding margins	Positive mix tailwind
Private networks (public safety, utilities)	Q1: began shipping statewide private network; 4RF/Aprisa launch	Strong North America private networks; utilities cross-sell of Aprisa + routers with microwave	Solid demand
Regional dynamics (APAC/Africa)	Q1: International +44% YoY on Pasolink; Q2: International +39.8% YoY	International -4.8% YoY on tough APAC comp; Africa currency constrained until rates moderate	Mixed; Africa soft
OpEx discipline/NEC TSA	Q1/Q2 elevated OpEx due to M&A; guidance to lower 2H with TSA roll-off	Non-GAAP OpEx down YoY; OpEx ~24% of sales (2+ year low)	Improving cost structure
Cybersecurity/software quality	—	Enhanced SSDLC and SVA service to strengthen software security posture	Strengthening platform

Management Commentary

“Total revenue of $112.6 million, non-GAAP gross margin of 35.8%, record adjusted EBITDA of $14.9 million... Non-GAAP EPS of $0.88, up 13% year-over-year” — Peter Smith, CEO .
“We have not seen any cancellations to date with our U.S. federal government customers... our goal with the tariff impact... will be to be margin neutral through productivity, sourcing, manufacturing footprint and price.” — Peter Smith .
“Gross margins improved thanks to regional mix and software mix... Pasolink... and the APRISA business... mixes us up.” — Michael Connaway, CFO .
“As it relates to tariffs... near term, it could be as high as roughly somewhere between 2% and 2.5% of our COGS... we do not anticipate any per share earnings leakage.” — Michael Connaway .
“We are pleased with the results... we expect to approximate the current full-year consensus estimate on revenue and EBITDA.” — Peter Smith .

Q&A Highlights

Guidance cadence and Q4 setup: Company maintained FY25 range and intends to track consensus for Q4 given macro/tariff uncertainty; potential pull-ins to beat tariffs may occur, but not embedded in guidance .
Tariffs: Near-term COGS headwind 2–2.5% upper bound; multi-pronged mitigation with supply base and footprint; intend EPS-neutral outcomes with some gross margin pressure possible .
U.S. Tier 1: Capex cycle likely bottomed; uptick in ~two quarters; currently between projects; no customer >6.5% of revenue .
Mix and margins: Q3 had a strong software quarter; not expected to persist at same level into Q4; gross margin may step back given macro/tariffs .
OpEx: Year-over-year declines as % of sales (≈24%); benefits from NEC TSA roll-off and cost pruning expected to sustain .

Estimates Context

Q3 FY25 beats: Revenue $112.640M vs $104.831M consensus; EPS $0.88 vs $0.284 consensus; adjusted EBITDA $14.879M vs EBITDA consensus $7.050M (note definitional differences) . Values retrieved from S&P Global.*
Revisions risk: Given the magnitude of beats and management’s commentary on software mix, OpEx discipline, and tariff mitigation, Street models may lift FY25 non-GAAP EPS and adjusted EBITDA near-term, while Q4 margin assumptions may remain conservative due to tariff timing and less robust software mix .

Key Takeaways for Investors

Quality beat: Aviat delivered broad-based beats on revenue and non-GAAP EPS with record adjusted EBITDA, underpinned by software and disciplined OpEx, signaling operating leverage as integrations mature .
Tariffs manageable: Management outlined a credible COVID-era playbook—inventory, sourcing shifts, selective pass-through—targeting EPS neutrality despite some gross margin pressure, de-risking headline sensitivity .
Tier 1 optionality: With U.S. capex likely bottomed, a ramp in ~two quarters could add 2.5–5% to revenue when the next project starts, providing upside not embedded in current outlook .
Private networks resilience: Public safety and utilities remain healthy in North America; cross-selling Aprisa access radios/routers with microwave is expanding the funnel .
Mix matters: Q3 software strength boosted margins; management does not assume that same level in Q4, advising conservative short-term margin expectations .
Guidance prudence: FY25 ranges maintained and management aims to “approximate” consensus in Q4; watch August for the formal annual update cadence .
Security differentiation: New SSDLC and SVA services enhance software trust for mission-critical networks—supporting long-term software monetization and stickiness .

Citations:

Q3 FY25 press release (financials, guidance):
Q3 FY25 earnings call transcript (themes, quotes):
Q2 FY25 press release (trend):
Q1 FY25 press release (trend):
Cybersecurity PR (Q3 period relevant):

S&P Global estimates disclaimer: Values retrieved from S&P Global.*

AVIAT NETWORKS, INC. (AVNW)·Q3 2025 Earnings Summary