Adtran Holdings (Adtran Holdings) Free Cash Flow

: $-89 Mil (TTM As of Dec. 2023)

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Adtran Holdings's total free cash flow for the months ended in Dec. 2023 was $-26 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Dec. 2023 was $-89 Mil.

Adtran Holdings's Free Cash Flow per Share for the months ended in Dec. 2023 was $-0.33. Its free cash flow per share for the trailing twelve months (TTM) ended in Dec. 2023 was $-1.13.

During the past 3 years, the average Free Cash Flow per Share Growth Rate was -33.50% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Adtran Holdings's highest 3-Year average Free Cash Flow per Share Growth Rate was 171.40% per year. The lowest was -57.80% per year. And the median was 3.40% per year.

Adtran Holdings Free Cash Flow Historical Data

The historical data trend for Adtran Holdings's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Adtran Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Free Cash Flow

-11.97

-22.93

-2.66

-61.30

-88.73

Adtran Holdings Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Free Cash Flow																-8.43	-28.37	-27.91	-6.71	-25.74

Adtran Holdings Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Adtran Holdings's Free Cash Flow for the fiscal year that ended in Dec. 2023 is calculated as

Free Cash Flow (A: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	-45.604	+	-43.121
	=	-89

Adtran Holdings's Free Cash Flow for the quarter that ended in Dec. 2023 is calculated as

Free Cash Flow (Q: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	-16.29	+	-9.447
	=	-26

Free Cash Flow for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $-89 Mil.

Adtran Holdings (NAS:ADTN) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Dec23, Adtran Holdings's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Dec23)	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	0.31104762	/	7.34	+	-0.1175
	=	-7.51 %

Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.

Adtran Holdings Free Cash Flow Related Terms

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Adtran Holdings (Adtran Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Adtran Holdings Inc (NAS:ADTN) » Definitions » Free Cash Flow

Comparable Companies

Traded in Other Exchanges

QH9:Germany QH9:Germany QH9:Germany ATN:Germany ADTN:Austria

Address

901 Explorer Boulevard, Huntsville, AL, USA, 35806-2807

Website

https://www.adtran.com

Adtran Inc is a provider of networking and communications platforms, software, and services focused on the broadband access market. It operates under two reportable segments: Network Solutions, which includes hardware and software products, and Services & Support, which includes a portfolio of network implementation services, support services, and cloud-hosted SaaS applications that complement the product portfolio and can be utilized to support other platforms as well. These two segments span across their three revenue categories: Access & Aggregation, Subscriber Solutions, and Optical Networking Solutions.

Executives

Ulrich Dopfer	officer: Chief Financial Officer	901 EXPLORER BOULEVARD, HUNTSVILLE AL 35806
Thomas R Stanton	officer: Vice President & Gen. Mgr.	C/O ADTRAN, 901 EXPLORER BLVD., HUNTSVILLE AL 35806
Gregory James Mccray	director	422 HANDEL COURT, WHEATON IL 60187
Wilson James Denson Jr	officer: Chief Revenue Officer	901 EXPLORER BLVD, HUNTSVILLE AL 35806
Christoph Glingener	officer: CEO of ADVA	901 EXPLORER BOULEVARD, HUNTSVILLE AL 35806
Michael Foliano	officer: CFO	901 EXPLORER BLVD, HUNTSVILLE AL 35806
Brian Protiva	director, officer: CEO of ADVA	901 EXPLORER BOULEVARD, HUNTSVILLE AL 35806
James Denson Wilson Jr	Chief Revenue Officer
Nikos Theodosopoulos	director	C/O ARISTA NETWORKS, INC., 5453 GREAT AMERICA PARKWAY, SANTA CLARA CA 95054
Johanna Hey	director	901 EXPLORER BOULEVARD, HUNTSVILLE AL 35806
Marc Kimpe	officer: SVP, Research & Development	131 HERITAGE LANE, MADISON AL 35758
Ray Harris	officer: Chief Information Officer	9811 RITCHIE CT, IJAMSVILLE MD 21754
Balan Nair	director	901 EXPLORER BOULEVARD, HUNTSVILLE AL 35806
Robert Conger	officer: SVP, Technology & Strategy	901 EXPLORER BLVD, HUNTSVILLE AL 35806
Eduard Scheiterer	officer: SVP, Research & Development	901 EXPLORER DRIVE, HUNTSVILLE AL 35806