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ADTRAN Holdings, Inc. (NASDAQ:ADTN), a networking equipment provider with a market capitalization of $682 million, announced today that its financial statements for the fiscal years ended December 31, 2024, and December 31, 2023, should no longer be relied upon due to an inventory adjustment identified by its majority-owned subsidiary, Adtran Networks SE. This adjustment led to a €5.7 million increase in the reported loss for 2024. According to InvestingPro data, the company was already facing profitability challenges, with a negative EPS of $1.67 in the last twelve months.
The Audit Committee of ADTRAN Holdings has concluded that the financial statements for the years in question, as well as the unaudited condensed financial statements for the interim periods within 2024, contained errors and will be restated. The company disclosed that the restatements are expected to be consistent with the preliminary earnings released on May 7, 2025. Despite these challenges, InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 2.03, indicating sufficient assets to cover short-term obligations. Get access to over 30 additional key metrics and exclusive insights with InvestingPro’s comprehensive research report.
ADTRAN Holdings has also identified at least one additional material weakness in its internal control over financial reporting and has acknowledged that its disclosure controls and procedures were not effective as of September 30, 2022, and for subsequent periods.
The company is currently working on restating the affected financial statements and plans to file a Notification of Late Filing with the SEC to extend the deadline for its Quarterly Report for the first quarter of 2025. The restated financials are expected to be filed on or before May 19, 2025.
In light of these developments, ADTRAN Holdings has postponed its 2025 annual meeting of stockholders, originally scheduled for May 14, 2025. The company will announce a new date and time for the meeting after the restatement process is complete.
The company’s management and Audit Committee have communicated these issues with their independent registered public accounting firm, PricewaterhouseCoopers LLP, and have advised that previous financial statements and auditor’s opinions for the affected periods should not be relied upon.
Investors and stakeholders are advised to consider this information when evaluating the company’s financial position. While the company faces current challenges, including a 10.18% revenue decline in the last twelve months, analysts maintain a positive outlook with a consensus price target ranging from $9 to $15 per share. This announcement is based on a press release statement and InvestingPro data, which provides detailed financial analysis and Fair Value estimates for over 1,400 US stocks.
In other recent news, ADTRAN Holdings reported a robust financial performance for Q1 2025, surpassing earnings and revenue forecasts. The company achieved earnings per share of $0.03, outperforming the anticipated -$0.0325, and recorded revenue of $247.74 million, exceeding expectations by $12.1 million. Despite these positive results, the company’s stock experienced a decline in after-hours trading. Concurrently, ADTRAN Holdings announced an amendment to its credit agreement, reducing total commitments from $374 million to $350 million, with adjustments to the German Borrower’s sublimit and commitment reduction threshold. The company also prepaid $24 million of outstanding revolving loans, and certain defaults related to financial statement inaccuracies were waived by the lenders. ADTRAN’s strategic focus on innovation and diversification has bolstered its market position, particularly in Europe, where demand has been strong. The company provided Q2 2025 revenue guidance between $247.5 million and $262.5 million, with an expected non-GAAP operating margin of 0% to 4%. Analyst firms have not made any recent changes to their ratings, but the company’s strategic initiatives and market demand suggest a positive outlook.
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