The following is a summary of the Aviat Networks, Inc. (AVNW) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Aviat Networks reported Q2 revenue of $95 million, a 4.8% YoY increase.

• Gross margins for the quarter were 38.8%, up from 35.5% in the prior year.

• GAAP operating expenses for the quarter increased by $8.3 million due to M&A related deal costs and higher R&D investments.

• Operating income was $5.0 million on a GAAP basis, a decrease of 42% from the prior year.

• GAAP net income for the quarter was down to $2.9 million from $6 million due to M&A related expenses.

• Non-GAAP net income increased 7.3% to $11.9 million.

Business Progress:

• The company completed the acquisition of NEC Wireless, now referred to as the Pasolink business.

• Aviat has integrated the Pasolink business into their operating model framework and product offerings.

• The company has a solid synergy roadmap to enhance their cost structure and improve gross margins, especially within the Pasolink business.

• The company plans to reduce inventory levels to target levels, which would provide significant cash flow enhancement.

• Supply chain improvements aiming at reduced lead times, lower working capital, and improved costs are in progress, estimated to take several quarters.

• The company also announced a partnership with Smartfren Telecom to deliver wireless connectivity services in Indonesia.

• Guidance for fiscal year 2024 has been raised to a revenue range of $425 million to $432 million, and adjusted EBITDA to be in the range of $51 million to $56 million. The Pasolink business is expected to contribute to this increased revenue.

More details: Aviat Networks IR

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