Aviat Networks Announces Fiscal 2024 First Quarter Financial Results

Aviat Networks, Inc. ("Aviat Networks," "Aviat," or the "Company"), (Nasdaq: AVNW), the leading expert in wireless transport solutions, today reported financial results for its fiscal 2024 first quarter ended September 29, 2023.

First Quarter Highlights

Executed on key long-term strategic objectives resulting in continued year-over-year growth in quarterly revenues, gross margins, net income and non-GAAP Adjusted EBITDA.
Strong cash generation in the quarter; cash on hand of $35.5 million versus $22.2 million last quarter
Record Q1 bookings in North America

First Quarter Financial Highlights

Total Revenues: $87.6 million, up 7.8% from the same quarter last yearNorth America: $55.5 million, up 13.6% from the same quarter last year
International: $32.1 million, down (1.1)% from the same quarter last year

• GAAP Results: Gross Margin 36.4%; Operating Expenses $26.3 million; Operating Income $5.5 million; Net Income $4.0 million; Net Income per diluted share ("Net Income per share") $0.34
• Non-GAAP Results: Adjusted EBITDA $12.1 million; Gross Margin 36.6%; Operating Expenses $21.3 million; Operating Income $10.7 million; Net Income $10.3 million; Net Income per share $0.87
• Net Cash: $35.5 million; no loans outstanding at quarter-end

"This was another successful quarter of revenue growth and expanding profitability in the business" said Pete Smith, President and Chief Executive Officer of Aviat Networks. "In the first quarter of fiscal 2024, we had a record bookings quarter in our North American private networks business."

Mr. Smith continued, "Our strong results are a testament to the Aviat Operating Model. We've been able to continue to grow the top and bottom lines because of the team's focus on disciplined execution and continuous improvement. The Aviat Operating Model will remain a critical framework for us achieving our short and long-term goals."

Fiscal 2024 vs. Fiscal 2023 First Quarter Comparison

Revenues
The Company reported total revenues of $87.6 million for its fiscal 2024 first quarter, compared to $81.3 million in the fiscal 2023 first quarter, an increase of $6.3 million or 7.8%. North America revenue of $55.5 million increased by $6.7 million or 13.6%, compared to $48.8 million in the prior year. International revenue of $32.1 million decreased by $(0.3) million or (1.1)%, compared to $32.4 million in the prior year due to capex cyclicality of African mobile network operators partially offset by strong growth in Europe.

Gross Margins
In the fiscal 2024 first quarter, the Company reported GAAP gross margin of 36.4% and non-GAAP gross margin of 36.6%. This compares to GAAP gross margin of 36.3% and non-GAAP gross margin of 36.5% in the fiscal 2023 first quarter, an increase of 10 basis points for both GAAP and non-GAAP. The improvement was driven by strong growth in higher margin North America business.

Operating Expenses
The Company reported GAAP total operating expenses of $26.3 million for the fiscal 2024 first quarter, compared to $25.5 million in the fiscal 2023 first quarter, an increase of $0.8 million or 3.0%.  Non-GAAP total operating expenses, excluding the impact of restructuring charges, share-based compensation, and merger and acquisition expenses for the fiscal 2024 first quarter were $21.3 million, compared to $20.4 million in the prior year, an increase of $0.9 million or 4.6%. The increases in both GAAP and non-GAAP operating expenses were driven by increased R&D investment.

Operating Income
The Company reported GAAP operating income of $5.5 million for the fiscal 2024 first quarter, compared to $3.9 million in the fiscal 2023 first quarter, an increase of $1.6 million or 41.8%. On a non-GAAP basis, the Company reported operating income of $10.7 million for the fiscal 2024 first quarter, compared to $9.2 million in the prior year, an increase of $1.5 million or 16.5%.

Income Taxes
The Company reported GAAP income tax expense of $0.6 million in the fiscal 2024 first quarter, compared to $3.9 million in the fiscal 2023 first quarter, a decrease of $(3.2) million or (83.5)%.  The decrease was driven by non-recurrence of a $2.6 million deferred tax liability in the prior year related to legal entity restructuring.

Net Income (Loss) / Net Income (Loss) Per Share
The Company reported GAAP net income of $4.0 million in the fiscal 2024 first quarter or GAAP net income per share of $0.34. This compared to GAAP net loss of $(2.7) million or GAAP net loss per share of $(0.25) in the fiscal 2023 first quarter. On a non-GAAP basis, the Company reported net income of $10.3 million or non-GAAP net income per share of $0.87, compared to non-GAAP net income of $8.8 million or $0.75 per share in the prior year.

Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") for the fiscal 2024 first quarter was $12.1 million, compared to $10.7 million in the fiscal 2023 first quarter, an increase of $1.4 million or 13.1%.

Balance Sheet Highlights
The Company reported $35.5 million in cash as of September 29, 2023, compared to $22.2 million as of June 30, 2023. As of September 29, 2023, the Company had no loans outstanding. Positive cash generation was driven by core earnings coupled with continued improvement in Accounts Receivable and Inventory.

Fiscal 2024 Full Year Outlook
The Company reaffirms its fiscal 2024 full year revenue and Adjusted EBITDA guidance as follows:

Full year Revenue between $367 and $374 million
Full year Adjusted EBITDA between $51.0 and $56.0 million1