Q4 2026 Aviat Networks Inc Earnings Call Transcript
Key Points
- Aviat Networks Inc (AVNW) reported a strong Q4 with revenue of $121 million, up 4.8% year-over-year, and full-year revenue of $440 million, marking its sixth consecutive year of growth.
- The company achieved record backlog of $367 million, up 14% year-over-year, providing strong visibility for fiscal 2027.
- Aviat Networks Inc (AVNW) secured a significant $25-30 million MDU order, expected to contribute fully in fiscal 2027, with potential for further expansion.
- International business, particularly in EMEA, showed strong growth with Q4 revenues up 53% and full-year up 33%, driven by private network wins.
- The company fully remediated its past five material weaknesses, improving its control environment and balance sheet, with net debt reduced to $24.2 million.
- Aviat Networks Inc (AVNW) is well-positioned to benefit from LEO satellite integration, offering complementary solutions for redundancy in private networks, with no LEO revenue in guidance yet.
- The company has over $420 million in NOLs, which will minimize cash tax payments for the foreseeable future.
- Gross margins declined to 30.9% non-GAAP in Q4, down from 34.7% year-over-year, due to component shortages and cost inflation.
- The company faces ongoing supply chain challenges, including shortages in memory, PCBs, capacitors, and FPGAs, which may impact margins and delivery timelines.
- Fiscal 2027 guidance implies modest revenue growth of 3.5-6.9%, with Q1 expected to be the weakest quarter due to supply chain ramp-up and MDU deployment timing.
- International revenues declined 3.3% in fiscal 2026, with APAC only stabilizing, indicating ongoing weakness outside EMEA.
- The MDU opportunity is dependent on subscriber growth and competitive share, with no guarantee of reaching the $100 million potential, and the company is not sole source.
- BEAD funding is modeled conservatively in guidance, with only a small amount factored in, and any significant impact is not expected until December quarter.
- The company plans to pass on component cost increases to customers, which could face resistance and impact customer relationships.
Welcome to Aviat Network's fourth quarter fiscal 2026 earnings conference call. (Operator Instructions) Please note, this conference is being recorded.
I will now turn the conference over to your host, Mr. Andrew Fredrickson, Vice President, Corporate Finance. You may begin.
Thank you and welcome to Aviat Networks fourth quarter fiscal 2026 results conference call and webcast. You can find our press release and updated investor presentation in the IR section of our website at www.aviotnetworks.com along with the replay of today's call.
With me today are Pete Smith, Aviat's President and CEO, who will begin with opening remarks on the company's fiscal quarter, followed by Andy Schmidt, CFO, to review financial results for the quarter. Pete will then provide closing remarks on Aviat's strategy and outlook.
As a reminder, during today's call and webcast, management may make forward-looking
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