Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 02, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | ADTRAN Holdings, Inc. | |
Trading Symbol | ADTN | |
Entity Central Index Key | 0000926282 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 79,116,535 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-41446 | |
Entity Tax Identification Number | 87-2164282 | |
Entity Address, Address Line One | 901 Explorer Boulevard | |
Entity Address, City or Town | Huntsville | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 35806-2807 | |
City Area Code | 256 | |
Local Phone Number | 963-8000 | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, Par Value $0.01 per share | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current Assets | ||
Cash and cash equivalents | $ 106,757 | $ 87,167 |
Accounts receivable, less allowance for credit losses of $367 and $400 as of March 31, 2024 and December 31, 2023, respectively | 187,554 | 216,445 |
Other receivables | 12,116 | 17,450 |
Income tax receivable | 8,717 | 7,933 |
Inventory, net | 322,147 | 362,295 |
Prepaid expenses and other current assets | 59,667 | 45,566 |
Total Current Assets | 696,958 | 736,856 |
Property, plant and equipment, net | 126,969 | 123,020 |
Deferred tax assets | 25,421 | 25,787 |
Goodwill | 55,129 | 353,415 |
Intangibles, net | 306,448 | 327,985 |
Other non-current assets | 87,729 | 87,706 |
Long-term investments | 29,252 | 27,743 |
Total Assets | 1,327,906 | 1,682,512 |
Current Liabilities | ||
Accounts payable | 159,083 | 162,922 |
Unearned revenue | 55,124 | 46,731 |
Accrued expenses and other liabilities | 36,404 | 37,607 |
Accrued wages and benefits | 25,869 | 27,030 |
Income tax payable, net | 6,266 | 5,221 |
Total Current Liabilities | 282,746 | 279,511 |
Non-current revolving credit agreement outstanding | 195,000 | 195,000 |
Deferred tax liabilities | 15,414 | 35,655 |
Non-current unearned revenue | 22,884 | 25,109 |
Non-current pension liability | 11,692 | 12,543 |
Deferred compensation liability | 29,709 | 29,039 |
Non-current lease obligations | 27,668 | 31,420 |
Other non-current liabilities | 35,375 | 28,657 |
Total Liabilities | 620,488 | 636,934 |
Commitments and contingencies (see Note 18) | ||
Redeemable Non-Controlling Interest | 441,635 | 451,756 |
Equity | ||
Common stock, par value $0.01 per share; 200,000 shares authorized; 79,116 shares issued and 78,850 outstanding as of March 31, 2024 and 78,970 shares issued and 78,674 outstanding as of December 31, 2023 | 791 | 790 |
Additional paid-in capital | 798,897 | 795,304 |
Accumulated other comprehensive income | 29,656 | 47,461 |
Retained deficit | (558,363) | (243,908) |
Treasury stock at cost: 265 and 297 shares as of March 31, 2024 and December 31, 2023, respectively | (5,198) | (5,825) |
Total Equity | 265,783 | 593,822 |
Total Liabilities, Redeemable Non-Controlling Interest and Equity | $ 1,327,906 | $ 1,682,512 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit losses | $ 367 | $ 400 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 79,116,000 | 78,970,000 |
Common stock, shares outstanding | 78,850,000 | 78,674,000 |
Treasury stock, shares | 265,000 | 297,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Loss (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Revenue | |||
Total Revenue | $ 226,173,000 | $ 323,912,000 | |
Cost of Revenue | |||
Total Cost of Revenue | 153,918,000 | 236,104,000 | |
Gross Profit | 72,255,000 | 87,808,000 | |
Selling, general and administrative expenses | 59,100,000 | 67,397,000 | |
Research and development expenses | 60,251,000 | 70,143,000 | |
Goodwill impairment | 292,583,000 | 0 | |
Operating Loss | (339,679,000) | (49,732,000) | |
Interest and dividend income | 397,000 | 304,000 | |
Interest expense | (4,598,000) | (3,287,000) | |
Net investment gain | 2,253,000 | 1,252,000 | |
Other income (expense), net | 1,310,000 | (303,000) | |
Loss Before Income Taxes | (340,317,000) | (51,766,000) | |
Income tax benefit | 18,647,000 | 11,313,000 | |
Net Loss | (321,670,000) | (40,453,000) | |
Less: Net Income (Loss) attributable to non-controlling interest | [1] | 2,880,000 | (370,000) |
Net Loss attributable to ADTRAN Holdings, Inc. | $ (324,550,000) | $ (40,083,000) | |
Weighted average shares outstanding – basic | 78,814 | 78,358 | |
Weighted average shares outstanding – diluted | 78,814 | 78,358 | |
Loss per common share attributable to ADTRAN Holdings, Inc. - basic | $ (4.12) | $ (0.51) | |
Loss per common share attributable to ADTRAN Holdings, Inc. - diluted | $ (4.12) | $ (0.51) | |
Network Solutions [Member] | |||
Revenue | |||
Total Revenue | $ 181,273,000 | $ 282,418,000 | |
Cost of Revenue | |||
Total Cost of Revenue | 126,326,000 | 219,130,000 | |
Gross Profit | 46,165,000 | 63,288,000 | |
Goodwill impairment | 292,600,000 | ||
Network Solutions - Inventory Write Down and Other Charges [Member] | |||
Cost of Revenue | |||
Total Cost of Revenue | 8,782,000 | ||
Services & Support [Member] | |||
Revenue | |||
Total Revenue | 44,900,000 | 41,494,000 | |
Cost of Revenue | |||
Total Cost of Revenue | 18,810,000 | 16,974,000 | |
Gross Profit | 26,090,000 | $ 24,520,000 | |
Goodwill impairment | $ 0 | ||
[1] For the three months ended March 31, 2024, we recognized $ 2.9 million of net gain attributable to non-controlling interest, representing the recurring cash compensation earned by non-controlling interest shareholders post-DPLTA. For the three months ended March 31, 2023, we recognized $ 3.2 million of net loss attributable to non-controlling interest pre-DPLTA, partially offset by $ 2.8 million, representing the recurring cash compensation earned by non-controlling interest shareholders post-DPLTA. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Net gain (loss) attributable to redeemable non-controlling interest | [1] | $ 2,880 | $ (370) |
Annual recurring compensation earned | (2,880) | ||
Pre-DPLTA [Member] | |||
Net gain (loss) attributable to redeemable non-controlling interest | (3,200) | ||
Post-DPLTA [Member] | |||
Recurring cash compensation earned | $ 2,800 | ||
Net gain (loss) attributable to redeemable non-controlling interest | $ 2,900 | ||
[1] For the three months ended March 31, 2024, we recognized $ 2.9 million of net gain attributable to non-controlling interest, representing the recurring cash compensation earned by non-controlling interest shareholders post-DPLTA. For the three months ended March 31, 2023, we recognized $ 3.2 million of net loss attributable to non-controlling interest pre-DPLTA, partially offset by $ 2.8 million, representing the recurring cash compensation earned by non-controlling interest shareholders post-DPLTA. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (321,670) | $ (40,453) |
Other Comprehensive (Loss) Income, net of tax | ||
Net unrealized gain on available-for-sale securities | 69 | |
Defined benefit plan adjustments | (60) | 35 |
Foreign currency translation (loss) gain | (17,745) | 8,678 |
Other Comprehensive (Loss) Income, net of tax | (17,805) | 8,782 |
Comprehensive Loss, net of tax | (339,475) | (31,671) |
Less: Comprehensive Income attributable to non-controlling interest, net of tax | 2,880 | 12 |
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax | $ (342,355) | $ (31,683) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | ADVA Optical Networking SE [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] ADVA Optical Networking SE [Member] | Retained Deficit Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income [Member] | Non-controlling Interest [Member] |
Beginning Balance at Dec. 31, 2022 | $ 1,303,613 | $ 781 | $ 895,834 | $ 55,338 | $ (4,125) | $ 26,126 | $ 329,659 | ||
Beginning Balance, Shares at Dec. 31, 2022 | 78,088 | ||||||||
Net (loss) income | (40,453) | (37,274) | (3,179) | ||||||
Annual recurring compensation earned | (2,809) | (2,809) | |||||||
Reclassification and remeasurement from equity to mezzanine equity for non-controlling interests in ADVA | (443,757) | (116,895) | (326,862) | ||||||
Other comprehensive income (loss), net of tax | 8,782 | 8,400 | $ 382 | ||||||
Dividend payments to ADTRAN Holdings, Inc. shareholders ($0.09 per share) | (7,076) | (7,076) | |||||||
Deferred compensation adjustments, net of tax | (1,792) | (1,792) | |||||||
ADTRAN RSUs and restricted stock vested | (138) | $ 6 | (144) | ||||||
ADTRAN RSUs and restricted stock vested, Shares | 561 | ||||||||
ADTRAN Stock options exercised | 58 | 58 | |||||||
ADTRAN Stock options exercised, Shares | 6 | ||||||||
ADTRAN Stock-based compensation expense | 3,812 | $ 9 | 3,812 | $ 9 | |||||
Redemption of redeemable non-controlling interest | 343 | 343 | |||||||
Foreign currency remeasurement of redeemable non-controlling interest | (430) | (430) | |||||||
Ending Balance at Mar. 31, 2023 | 820,162 | $ 787 | 782,760 | 8,006 | (5,917) | 34,526 | |||
Ending Balance, Shares at Mar. 31, 2023 | 78,655 | ||||||||
Beginning Balance at Dec. 31, 2023 | $ 593,822 | $ 790 | 795,304 | (243,908) | (5,825) | 47,461 | |||
Beginning Balance, Shares at Dec. 31, 2023 | 78,970 | 78,970 | |||||||
Net (loss) income | $ (321,670) | (321,670) | |||||||
Annual recurring compensation earned | (2,880) | (2,880) | |||||||
Other comprehensive income (loss), net of tax | (17,805) | (17,805) | |||||||
Deferred compensation adjustments, net of tax | 262 | (368) | 3 | 627 | |||||
ADTRAN RSUs and restricted stock vested | (242) | $ 1 | (243) | ||||||
ADTRAN RSUs and restricted stock vested, Shares | 110 | ||||||||
ADTRAN Stock options exercised | $ 219 | 219 | |||||||
ADTRAN Stock options exercised, Shares | 36 | 36 | |||||||
ADTRAN Stock-based compensation expense | $ 3,957 | $ 4 | 3,957 | $ 4 | |||||
Redemption of redeemable non-controlling interest | 1 | 1 | |||||||
Foreign currency remeasurement of redeemable non-controlling interest | 10,115 | 10,115 | |||||||
Ending Balance at Mar. 31, 2024 | $ 265,783 | $ 791 | $ 798,897 | $ (558,363) | $ (5,198) | $ 29,656 | |||
Ending Balance, Shares at Mar. 31, 2024 | 79,116 | 79,116 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividend payments | $ 0.09 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (321,670) | $ (40,453) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 22,528 | 33,402 |
Goodwill Impairment | 292,583 | 0 |
Amortization of debt issuance cost | 1,013 | 146 |
Gain on investments, net | (2,621) | (3,154) |
Net loss on disposal of property, plant and equipment | 150 | |
Stock-based compensation expense | 3,957 | 3,812 |
Deferred income taxes | (19,738) | (24,019) |
Other, net | 545 | (1) |
Inventory write down | 3,992 | 0 |
Inventory reserves | 1,837 | 16,051 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 26,002 | 17,658 |
Other receivables | 5,605 | 1,980 |
Income taxes receivable, net | (1,296) | |
Inventory | 30,426 | (2,764) |
Prepaid expenses, other current assets and other assets | (15,882) | 1,118 |
Accounts payable | 553 | (40,367) |
Accrued expenses and other liabilities | 7,459 | 6,349 |
Income taxes payable, net | 1,155 | 10,316 |
Net cash provided by (used in) operating activities | 36,598 | (19,926) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (13,374) | (8,439) |
Proceeds from sales and maturities of available-for-sale investments | 873 | 930 |
Purchases of available-for-sale investments | (44) | (516) |
Payment for beneficial interests in securitized accounts receivable | 1,231 | |
Net cash used in investing activities | (12,545) | (6,794) |
Cash flows from financing activities: | ||
Tax withholdings related to stock-based compensation settlements | (176) | (6,258) |
Proceeds from stock option exercises | 219 | 58 |
Dividend payments | (7,076) | |
Proceeds from receivables purchase agreement | 30,231 | |
Repayments on receivables purchase agreement | (32,437) | |
Proceeds from draw on revolving credit agreements | 138,236 | |
Repayment of revolving credit agreements | (43,464) | |
Payment for redemption of redeemable non-controlling interest | (5) | (1,176) |
Payment of debt issuance cost | (1,994) | |
Repayment of notes payable | (24,692) | |
Net cash (used in) provided by financing activities | (4,162) | 55,628 |
Net increase in cash and cash equivalents | 19,891 | 28,908 |
Effect of exchange rate changes | (301) | (1,095) |
Cash and cash equivalents, beginning of period | 87,167 | 108,644 |
Cash and cash equivalents, end of period | 106,757 | 136,457 |
Supplemental disclosure of cash financing activities: | ||
Cash paid for interest | 5,243 | 1,610 |
Cash paid for income taxes | 2,315 | 1,251 |
Cash used in operating activities related to operating leases | 2,384 | 4,057 |
Supplemental disclosure of non-cash investing activities: | ||
Right-of-use assets obtained in exchange for lease obligations | 842 | 486 |
Purchases of property, plant and equipment included in accounts payable | $ 1,689 | $ 4,354 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (324,550) | $ (40,083) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | GENERAL ADTRAN Holdings, Inc. (“ADTRAN” or the “Company”) is a leading global provider of networking and communications platforms, software, systems and services focused on the broadband access market, serving a diverse domestic and international customer base in multiple countries that includes large, medium and small Service Providers, alternative Service Providers, such as utilities, municipalities and fiber overbuilders, cable/MSOs, SMBs and distributed enterprises. Our innovative solutions and services enable voice, data, video and internet-communications across a variety of network infrastructures and are currently in use by millions worldwide. We support our customers through our direct global sales organization and our distribution networks. Our success depends upon our ability to increase unit volume and market share through the introduction of new products and succeeding generations of products having optimal selling prices and increased functionality as compared to both the prior generation of a product and to the products of competitors in order to gain market share. To service our customers and grow revenue, we are continually conducting research and developing new products addressing customer needs and testing those products for the specific requirements of the particular customers. We offer a broad portfolio of flexible software and hardware network solutions and services that enable Service Providers to meet today’s service demands, while enabling them to transition to the fully converged, scalable, highly-automated, cloud-controlled voice, data, internet and video network of the future. In addition to our global headquarters in Huntsville, Alabama, and our European headquarters in Munich, Germany, we have sales and research and development facilities in strategic global locations. The Company solely owns ADTRAN, Inc. and is the majority shareholder of Adtran Networks (formerly ADVA Optical Networking SE). ADTRAN, Inc. is a leading global provider of open, disaggregated networking and communications solutions. Adtran Networks is a global provider of network solutions for data, storage, voice and video services. We believe that the combined technology portfolio can best address current and future customer needs for high-speed connectivity from the network core to the end consumer and in particular upon the convergence of solutions at the network edge. Liquidity, Domination and Profit and Loss Transfer Agreement and Credit Facility The DPLTA between the Company, as the controlling company, and Adtran Networks SE ("Adtran Networks"), as the controlled company, as executed on December 1, 2022, became effective on January 16, 2023, as a result of its registration with the commercial register ( Handelsregister ) of the local court ( Amtsgericht ) at the registered seat of Adtran Networks (Jena). Under the DPLTA, subject to certain limitations pursuant to applicable law and the specific terms of the DPLTA, (i) the Company is entitled to issue binding instructions to the management board of Adtran Networks, (ii) Adtran Networks will transfer its annual profit to the Company, subject to, among other things, the creation or dissolution of certain reserves, and (iii) the Company will generally absorb the annual net loss incurred by Adtran Networks. The obligation of the Company to absorb Adtran Networks’ annual net loss applied for the first time to the loss generated in 2023. Pursuant to the terms of the DPLTA, each Adtran Networks shareholder (other than the Company) has received an offer to elect either (1) to remain an Adtran Networks shareholder and receive from us an Annual Recurring Compensation payment, or (2) to receive Exit Compensation plus guaranteed interest. The guaranteed interest under the Exit Compensation is calculated from the effective date of the DPLTA to the date the shares are tendered, less any Annual Recurring Compensation paid. The guaranteed interest rate is 5.0 % plus a variable component (according to the German Civil Code) that was 3.62 % as of March 31, 2024. Assuming all the minority holders of currently outstanding Adtran Networks shares were to elect the second option, we would be obligated to make aggregate Exit Compensation payments, including guaranteed interest, of approximately € 338.9 million or approximately $ 365.7 million, based on an exchange rate as of March 31, 2024 and reflecting interest accrued through March 31, 2024 during the pendency of the appraisal proceedings discussed below. Shareholders electing the first option of Annual Recurring Compensation may later elect the second option. The opportunity for outside Adtran Networks shareholders to tender Adtran Networks shares in exchange for Exit Compensation had been scheduled to expire on March 16, 2023 . However, due to the appraisal proceedings that have been initiated in accordance with applicable German law, this time period for tendering shares has been extended pursuant to the German Stock Corporation Act (Aktiengesetz) and will end two months after the date on which a final decision in such appraisal proceedings has been published in the Federal Gazette (Bundesanzeiger). We are also obligated to absorb any annual net loss of Adtran Networks under the DPLTA. Additionally, our obligation to pay Annual Recurring Compensation under the DPLTA is a continuing payment obligation, which will amount to approximately € 10.6 million or $ 11.5 million (based on the current exchange rate) per year assuming none of the minority Adtran Networks shareholders were to elect Exit Compensation. The foregoing amounts do not reflect any potential increase in payment obligations that we may have depending on the outcome of ongoing appraisal proceedings in Germany. During the three months ended March 31, 2024 and 2023, we accrued $ 2.9 million and $ 2.8 million, respectively, in Annual Recurring Compensation, which was reflected as an increase to retained deficit. With respect to the year ended December 31, 2023, we are obligated to pay $ 11.5 million in Annual Recurring Compensation on the third banking day following the 2024 ordinary general shareholders’ meeting of Adtran Networks, which is expected to occur on June 28, 2024 (but in any event within eight months following December 31, 2023). On October 18, 2022, the Company's Board of Directors authorized the Company to purchase additional shares of Adtran Networks through open market purchases not to exceed 15,346,544 shares. For the three months ended March 31, 2024 and 2023, less than one thousand and 62 thousand shares, respectively, of Adtran Networks stock was tendered to the Company and Exit Compensation payments of approximately € 4 thousand and € 1.1 million, respectively, or approximately $ 5 thousand and $ 1.2 million based on an exchange rate as of March 31, 2024 and 2023, respectively, were paid to Adtran Networks shareholders. On July 18, 2022, ADTRAN, Inc., as the borrower, and ADTRAN Holdings, Inc. entered into a credit agreement with a syndicate of banks, including Wells Fargo Bank, National Association, as administrative agent (“Administrative Agent”), and the other lenders named therein (the “Credit Agreement”), which has since been amended three times. Pursuant to the terms of the Credit Agreement, as amended, the Company, ADTRAN, Inc., and the subsidiary guarantors (together, the “Credit Parties”) are subject to a liquidity covenant, which provides that, during the fourth quarter of 2023 through and including the third quarter of 2024 (the “Covenant Relief Period”) or a Springing Covenant Period (i.e., the period beginning upon the purchase by the Company of at least 60% of the outstanding shares of Adtran Networks not owned by the Company as of August 9, 2023 and the three consecutive quarterly test periods after such date ), as of the last day of any fiscal quarter, the cash and cash equivalents of the Credit Parties must be at least $ 50.0 million and the cash and cash equivalents of the Company and its subsidiaries must be at least $ 75.0 million, limiting our ability to pay the obligations under the DPLTA. The Company had access to $ 203.0 million on its Credit Facility for future borrowings; however, as of March 31, 2024, the Company was limited to additional borrowings of $ 22.7 million based on debt covenant compliance metrics. See Note 11, Revolving Credit Agreements for additional information regarding the terms of the Wells Fargo Credit Agreement and its amendments. As of March 31, 2024, and as of the date of issuance of these financial statements, the Company does not have sufficient liquidity to meet payment obligations under the DPLTA pertaining to Exit Compensation. For the three months ended March 31, 2024 and 2023, less than one thousand and 62 thousand shares, respectively, of Adtran Networks stock was tendered to the Company and Exit Compensation payments of approximately € 4 thousand and € 1.1 million, respectively, or approximately $ 5 thousand and $ 1.2 million based on an exchange rate as of March 31, 2024 and 2023, respectively, were paid to Adtran Networks shareholders. We believe the probability that more than a small minority of Adtran Networks shareholders elect to receive Exit Compensation in the next twelve months is remote based on the diverse base of shareholders that must make this election on an individual shareholder basis, the current ongoing appraisal proceedings involving a dispute on the value of the Exit Compensation which is expected to take 24-32 months to resolve, the current guaranteed Annual Recurring Compensation payment plus the interest earned on such shares during the ongoing appraisal proceedings, and the current trading value of Adtran Networks shares. The Company experienced revenue declines in the year ended December 31, 2023 and during the three months ended March 31, 2024. To the extent that the Company is further impacted by the uncertain macroeconomic environment related to continued elevated interest rates and ongoing inflationary pressures, the Company has established plans to preserve cash liquidity and maintain compliance with the Company’s covenants. The Company has suspended dividend payments and is continuing to implement a business efficiency program, which includes, but is not limited to planned reductions in operating expenses and a site consolidation plan. In connection with the site consolidation plan, the Company is also exploring a potential sale of portions of our headquarters in Huntsville. There can be no assurance that the Company will be successful in effecting this action on commercially reasonable terms or at all. We may need to further reduce capital expenditures and/or take other steps to preserve working capital in order to ensure that we can meet our needs and obligations and maintain compliance with our debt covenants. In summary, the Company believes that its cash and cash equivalents, investments, working capital management initiatives and availability to access cash under the Wells Fargo credit facility, including (i) the additional funding provided for under the First Amendment to the Wells Fargo Credit Facility that was signed on August 9, 2023, (ii) the additional covenant headroom during the Covenant Relief Period provided for under the Second Amendment to Wells Fargo Credit Facility, and (iii) the exclusion of the Factoring Agreement as debt for purposes of the Credit Facility’s financial covenants as provided for under the Third Amendment to the Wells Fargo Credit Facility will be adequate to meet our business operating requirements, our capital expenditures and our expected obligations under the DPLTA, including anticipated levels of Exit Compensation and ability to continue to comply with our debt covenants under the Credit Facility, for at least the next twelve months, from the issuance of these financial statements. See Note 11, Revolving Credit Agreements, for additional information regarding the terms of the First, Second and Third Amendments of the Wells Fargo Credit agreement. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of ADTRAN Holdings, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information presented in Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements are not included herein. The December 31, 2023 Condensed Consolidated Balance Sheet is derived from audited financial statements but does not include all disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in ADTRAN Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2023 , filed with the SEC on March 15, 2024. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Significant estimates include allowance for credit losses on accounts receivable and contract assets, excess and obsolete inventory reserves, warranty reserves, customer rebates, determination and accrual of the deferred revenue related to performance obligations under contracts with customers, estimated costs to complete obligations associated with deferred and accrued revenues and network installations, estimated income tax provision and income tax contingencies, fair value of stock-based compensation, assessment of goodwill and other intangibles for impairment, estimated lives of intangible assets, estimates of intangible assets upon measurement, estimated pension liability and fair value of investments and estimated contingent liabilities. Actual amounts could differ significantly from these estimates. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of ongoing inflationary pressures, the energy crisis, currency fluctuations and political tensions as of March 31, 2024, and through the date of this report. The accounting matters assessed included, but were not limited to, the allowance for credit losses, stock-based compensation, carrying value of goodwill, intangibles and other long-lived assets, financial assets, valuation allowances for tax as sets, revenue recognition and costs of revenue. Future conditions related to ongoing inflationary pressures, the energy crisis, continued elevated interest rates, instability in the financial services industry, currency fluctuations and political tensions could result in further impacts to the Company's consolidated financial statements in future reporting periods . Accounts Receivable Factoring New Accounts Receivable Factoring Agreement On December 19, 2023, the Company entered into a new factoring agreement with a third-party financial institution to replace the Company’s prior accounts receivable purchase agreement, to sell on a revolving basis, undivided interests in the Company’s accounts receivable. The new factoring agreement qualifies for treatment as a secured borrowing with a pledge of collateral under Accounting Standards Codification ("ASC") Topic 810, Consolidations, as the Company is considered the primary beneficiary in a variable interest entity created to hold the factored receivables and the Company retains a residual claim on reserves related to the factored receivables . Within the Condensed Consolidated Balance Sheets, the receivables factored continue to be carried in accounts receivable, less allowance for credit losses, and the secured borrowings are carried as a current liability within accounts payable. The proceeds and repayments of secured borrowings are reflected as cash flows provided by (used in) financing activities within the Condensed Consolidated Statements of Cash Flows, and program fees are recorded as interest expense in the Consolidated Statements of Loss. The short-term liability classification of the secured borrowings is based on the estimated timing of the collection of the accounts receivable which are expected to be received within 12 months. See Note 2 for additional information. Previous Accounts Receivable Factoring Agreement The Company had previously entered into a factoring agreement to sell certain receivables to an unrelated third-party financial institution on a non-recourse basis. These transactions were accounted for in accordance with ASC Topic 860 and resulted in a reduction in accounts receivable because the agreement transferred effective control over and risk related to the receivables to the buyers. Trade accounts receivables balances sold were removed from the Condensed Consolidated Balance Sheets and cash received was reflected as cash flows provided by (used in) operating activities in the Condensed Consolidated Statements of Cash Flow. Factoring related interest expense was recorded to interest expense on the Condensed Consolidated Statements of Loss. On each sale date, the financial institution retained from the sale price a default reserve, up to a required balance, which was held by the financial institution in a reserve account and pledged to the Company. The financial institution was entitled to withdraw from the reserve account the sale price of a defaulted receivable. The balance in the reserve account was included in other assets on the Condensed Consolidated Balance Sheets. Redeemable Non-Controlling Interest As of March 31, 2024 and December 31, 2023, the non-controlling Adtran Networks stockholders’ equity ownership percentage in Adtran Networks was approximately 34.7 % for each period. As a result of the effectiveness of the DPLTA on January 16, 2023, the Adtran Networks shares, representing the equity interest in Adtran Networks held by holders other than the Company, can be tendered at any time and are, therefore, redeemable and must be classified outside stockholders’ equity. Therefore, the permanent equity noncontrolling interest balance was reclassified to redeemable non-controlling interest on January 16, 2023 and was remeasured to fair value based on the trading market price of the Adtran Networks shares. Subsequently, the carrying value of the RNCI is adjusted to its maximum redemption value at each reporting date when the maximum redemption value is greater than the initial carrying amount of the RNCI. However, the RNCI will be remeasured using the current exchange rate at each reporting date as long as the RNCI is currently redeemable. For the period of time that the DPLTA is in effect, the RNCI will continue to be presented as RNCI outside of stockholders’ equity in the Condensed Consolidated Balance Sheets. See Note 14 for additional information on RNCI . Recent Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The Company is currently evaluating the effect that adoption of ASU 2023-09 will have on our disclosures. In November 2023, the FASB issued ASU 2023-7, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company expect to adopt the new disclosures as required for the year ended December 31, 2024. The Company is currently evaluating the impact on the related disclosures. Recent Final Rules Not Yet Adopted In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which requires registrants to provide certain climate-related information in their registration statements and annual reports. The rules require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks will also include disclosure of a registrant's greenhouse gas emissions. In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements. These requirements are effective for the Company in various fiscal years, starting with its fiscal year beginning January 1, 2025. Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. The Company is currently evaluating the impact of these final rules on its consolidated financial statements and disclosures. On April 12, 2024, the final rules were indefinitely delayed pending the completion of judicial review in consolidated proceedings in the U.S. Court of Appeals, Eighth Circuit. Recently Adopted Accounting Pronouncements There are currently no recently adopted accounting pronouncements that are expected to have a material effect on the Condensed Consolidated Financial Statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. REVENUE The following is a description of the principal activities from which revenue is generated by reportable segment: Network Solutions Segment - Includes hardware and software products that enable a digital future which support the Company's Subscriber, Access & Aggregation, and Optical Networking Solutions. Services & Support Segment - Includes network design, implementation, maintenance and cloud-hosted services supporting the Company's Subscriber, Access & Aggregation, and Optical Networking Solutions. Revenue by Category In addition to the Company's reportable segments, revenue is also reported for the following three categories – Subscriber Solutions, Access & Aggregation Solutions and Optical Networking Solutions. Our Subscriber Solutions portfolio is used by Service Providers to terminate their access services infrastructure at the customer premises while providing an immersive and interactive experience for residential, business and wholesale subscribers. This revenue category includes hardware- and software-based products and services. These solutions include fiber termination solutions for residential, business and wholesale subscribers, Wi-Fi access solutions for residential and business subscribers, Ethernet switching and network edge virtualization solutions for business subscribers, and cloud software solutions covering a mix of subscriber types. Our Access & Aggregation Solutions are solutions that are used by communications Service Providers to connect residential subscribers, business subscribers and mobile radio networks to the Service Providers’ metro network, primarily through fiber-based connectivity. This revenue category includes hardware- and software-based products and services. Our solutions within this category are a mix of fiber access and aggregation platforms, precision network synchronization and timing solutions, and access orchestration solutions that ensure highly reliable and efficient network performance. Our Optical Networking Solutions are used by communications Service Providers, internet content providers and large-scale enterprises to securely interconnect metro and regional networks over fiber. This revenue category includes hardware- and software-based products and services. Our solutions within this category include open optical terminals, open line systems, optical subsystems and modules, network infrastructure assurance systems, and automation platforms that are used to build high-scale, secure and assured optical networks. The following table disaggregates revenue by reportable segment and revenue category: Three Months Ended March 31, 2024 March 31, 2023 (In thousands) Network Solutions Services & Support Total Network Solutions Services & Support Total Subscriber Solutions $ 60,369 $ 9,399 $ 69,767 $ 70,287 $ 9,049 $ 79,336 Access & Aggregation Solutions 67,777 13,535 81,312 84,554 12,266 96,820 Optical Networking Solutions 53,127 21,966 75,094 127,577 20,179 147,756 Total $ 181,273 $ 44,900 $ 226,173 $ 282,418 $ 41,494 $ 323,912 The aggregate amount of transaction price allocated to remaining performance obligations that have not been satisfied as of March 31, 2024 and December 31, 2023 related to contractual maintenance agreements, contractual SaaS and subscription services, and hardware contracts that exceed one year in duration amounted to $ 346.9 million and $ 314.8 million, respectively. As of March 31, 2024, approximately 61.0 % is expected to be recognized over the next 12 months and the remainder recognized thereafter. The majority of the Company's remaining performance obligations as of March 31, 2024 are related to contracts or orders that have an original expected duration of one year or less, for which the Company is electing to utilize the practical expedient available within the guidance, and are excluded from the transaction price related to these future obligations. The Company will generally satisfy the remaining performance obligations as we transfer control of the products ordered or services to our customers, excluding maintenance services, which are satisfied over time. The following table provides information about accounts receivable, contract assets and unearned revenue from contracts with customers: As of As of (In thousands) March 31, 2024 December 31, 2023 Accounts receivable, net $ 187,554 $ 216,445 Contract assets (1) $ 815 $ 691 Unearned revenue $ 55,124 $ 46,731 Non-current unearned revenue $ 22,884 $ 25,109 (1) Included in other receivables on the Condensed Consolidated Balance Sheets. Accounts Receivable The allowance for credit losses was $ 0.4 million as of March 31, 2024 and December 31, 2023, related to accounts receivable. Contract Assets No allowance for credit losses was recorded for the three months ended March 31, 2024 and 2023 related to contract assets. Receivables Purchase Agreement The Company was party to a receivable purchase agreement with a third-party financial institution (the “Factor”), which accelerates receivable collection and helps to better manage cash flow . As of December 31, 2023 no accounts receivable were factored under the agreement or held in the reserve account. The cost of receivables purchase agreement is included in interest expense in the Condensed Consolidated Statements of Loss and totaled $ 0.3 million for the three months ended March 31, 2023. On December 19, 2023, the agreement with the Factor was terminated and the Company, entered into a receivables purchase agreement with a third-party financial institution (the “New Factor”) to replace the Company’s prior accounts receivable purchase agreement and to sell, on a revolving basis, undivided interests in the Company’s accounts receivable. The New Factor provides for up to $ 40.0 million in borrowing capacity, subject to eligible receivables and reserve requirements, secured by the receivables. The New Factor qualifies for treatment as a secured borrowing with a pledge of collateral under Accounting Standards Codification ("ASC") Topic 810, Consolidations . Total secured borrowings under the agreement were $ 12.6 million and $ 14.3 million as of March 31, 2024 and December 31, 2023, respectively, leaving $ 27.2 million and $ 25.4 million available for future borrowings as of March 31, 2024 and December 31, 2023, respectively. Accounts receivable pledged as collateral related to the secured borrowings were $ 16.4 million and $ 16.8 million as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024, the Company incurred program fee expenses of $ 0.3 million. As of March 31, 2024, the program fee rate was 6.88 % percent. Of the outstanding unearned revenue balances as of December 31, 2023, $ 19.7 million were recognized as revenue during the three months ended March 31, 2024 . Of the $ 60.4 million of outstanding unearned revenue balances as of December 31, 2022, $ 25.6 million were recognized as revenue during the three months ended March 31, 2023 . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 3. INCOME TAXES The Company’s effective tax rate changed from a benefit of 21.9 % of pre-tax loss for the three months ended March 31, 2023 , to a benefit of 5.5 % of pre-tax loss for the three months ended March 31, 2024. The change in the effective tax rate for the three months ended March 31, 2024, was driven primarily by a loss jurisdiction for which no tax benefits were recognized on its pre-tax losses during the first quarter of 2024. The Company continually reviews the adequacy of its valuation allowance and recognizes the benefits of deferred tax assets only as the assessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC 740, Income Taxes. As of March 31, 2024, the Company had net deferred tax assets totaling $ 96.5 million, and a valuation allowance totaling $ 86.5 million against those deferred tax assets. Our assessment of the realizability of our deferred tax assets includes the evaluation of historical operating results, as well as the evaluation of evidence which requires significant judgment, including the evaluation of our three-year cumulative income position, future taxable income projections and tax planning strategies. Should management’s conclusion change in the future and an additional valuation allowance, or a partial or full release of the valuation allowance becomes necessary, it may have a material effect on our consolidated financial statements. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 4. STOCK-BASED COMPENSATION For the three months ended March 31, 2024 and 2023 , stock-based compensation expense was $ 4.0 million and $ 2.6 million, respectively. PSUs, RSUs and Restricted Stock - ADTRAN Holdings, Inc. The following table summarizes the PSUs, RSUs and restricted stock outstanding as of December 31, 2023 and March 31, 2024 and the changes that occurred during the three months ended March 31, 2024: Number of Weighted Avg. Grant Date Fair Value Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2023 1,942 $ 17.46 PSUs, RSUs and restricted stock granted 966 $ 7.22 PSUs, RSUs and restricted stock vested ( 102 ) $ 18.47 PSUs, RSUs and restricted stock forfeited ( 32 ) $ 17.36 Unvested PSUs RSUs and restricted stock outstanding, March 31, 2024 2,774 $ 13.79 The fair value of PSUs with performance conditions, RSUs and restricted stock is equal to the closing price of the Company's stock on the date of grant. The fair value of PSUs with market conditions is calculated using a Monte Carlo simulation valuation method. As of March 31, 2024 , total unrecognized compensation expense related to non-vested portion of performance-based PSUs (considered probable), market-based PSUs, RSUs and restricted stock was approximately $ 19.4 million, which will be recognized over the remaining weighted-average period of 1.8 years. As of March 31, 2024, there was $ 10.2 million of unrecognized compensation expense related to unvested performance-based PSUs (not-considered probable), which will be recognized over the remaining requisite service period of 1.8 years if achievement of the performance obligation becomes probable. Unrecognized compensation expense will be adjusted for actual forfeitures. As of March 31, 2024, 0.5 million shares were available for issuance under stockholder-approved equity plans. Stock Options - ADTRAN Holdings, Inc. The following table summarizes the ADTRAN Holdings, Inc. stock options outstanding as of December 31, 2023 and March 31, 2024 and the changes that occurred during the three months ended March 31, 2024: Number of Weighted Avg. Weighted Avg. Aggregate Stock options outstanding, December 31, 2023 3,894 $ 10.32 5.25 $ 3,087 Stock options exercised ( 36 ) $ 6.06 Stock options forfeited ( 58 ) $ 6.68 Stock options expired ( 178 ) $ 7.89 Stock options outstanding, March 31, 2024 3,622 $ 10.54 5.18 $ 268 Stock options exercisable, March 31, 2024 1,264 $ 13.30 1.43 $ — As of March 31, 2024 , there was $ 6.6 million of unrecognized compensation expense related to stock options which will be recognized over the remaining weighted-average period of 1.6 years. The determination of the fair value of stock options assumed or granted by ADTRAN Holdings was estimated using the Monte Carlo method and is affected by its stock price, as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate. The stock option pricing model requires the use of several assumptions that impact the fair value estimate. These variables include, but are not limited to, the volatility of the Company's stock price and employee exercise behaviors. All of the options were previously issued at exercise prices that approximated fair market value at the date of grant. The aggregate intrinsic value of stock options represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2024 . The amount of aggregate intrinsic value was $ 0.3 million as of March 31, 2024, which will change based on the fair market value of the Company's stock. The total pre-tax intrinsic value of options exercised during the three months ended March 31, 2024 and 2023 was $ 34 thousand and $ 43 thousand, respectively. No stock options vested during the three months ended March 31, 2024 and 2023. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 5. INVESTMENTS Debt Securities and Other Investments The Company did no t have any debt securities and other investments as of March 31, 2024. Realized gains and losses on sales of debt securities are computed under the specific identification method. The following tab le presents the gross realized gains and losses related to its debt securities: Three Months Ended March 31, (In thousands) 2024 2023 Gross realized gain on debt securities $ — $ 4 Gross realized loss on debt securities — ( 11 ) Total loss recognized, net $ — $ ( 7 ) Realized and unrealized gains and losses related to marketable equity securities were as follows: Three Months Ended March 31, (In thousands) 2024 2023 Realized gain on equity securities sold $ 123 $ 13 Unrealized gain on equity securities held 2,130 1,246 Total gain recognized, net $ 2,253 $ 1,259 Income generated from marketable equity securities was recorded as interest and dividend income in the Condensed Consolidated Statements of Loss. U.S. GAAP establishes a three-level valuation hierarchy based upon observable and unobservable inputs for fair value measurement of financial instruments: Level 2 – Significant inputs that are observable; values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly; Level 3 – Significant unobservable inputs; values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs could include information supplied by investees. The Company’s cash equivalents and investments held at fair value are categorized into this hierarchy as follows: Fair Value Measurements as of March 31, 2024 Using (In thousands) Fair Value Quoted Prices Significant Significant Unobservable Inputs Cash equivalents Money market funds $ 5,375 $ 5,375 $ — $ — Marketable equity securities Marketable equity securities – various industries 987 987 — — Deferred compensation plan assets 28,265 28,265 — — Total $ 34,627 $ 34,627 $ — $ — Fair Value Measurements as of December 31, 2023 Using (In thousands) Fair Value Quoted Prices Significant Significant Unobservable Inputs Cash equivalents Money market funds $ 5,302 $ 5,302 $ — $ — Marketable equity securities Marketable equity securities – various industries 905 905 — — Deferred compensation plan assets 26,838 26,838 — — Total $ 33,045 $ 33,045 $ — $ — Market prices are obtained from a variety of industry standard data providers, large financial institutions and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Inventory | 6. INVENTORY Inventory consisted of the following: As of As of (In thousands) March 31, 2024 December 31, 2023 Raw materials $ 130,977 $ 152,140 Work in process 14,856 17,239 Finished goods 176,314 192,916 Total inventory, net $ 322,147 $ 362,295 Inventory reserves are established for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on estimated reserve percentages, which considers historical usage, known trends, inventory age and market conditions. During the three months ended March 31, 2024, we incurred total charges of $ 8.8 million as a result of a strategy shift which included discontinuance of certain product lines in connection with the Business Efficiency Program, of which, $ 4.0 million relates to inventory write-downs and $ 4.8 million relates to other charges, and are included in cost of revenue in the Condensed Consolidated Statements of Loss. There were no write-downs of inventory during the three months ended March 31, 2023. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 7. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: As of As of (In thousands) March 31, 2024 December 31, 2023 Engineering and other equipment $ 184,330 $ 183,336 Building 79,159 79,215 Computer hardware and software 111,354 101,572 Building and land improvements 57,491 58,238 Furniture and fixtures 21,536 21,368 Land 5,227 5,242 Total property, plant and equipment 459,097 448,971 Less: accumulated depreciation ( 332,128 ) ( 325,951 ) Total property, plant and equipment, net $ 126,969 $ 123,020 Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the undiscounted cash flows estimated to be generated by the asset are less than the asset’s carrying value. Depreciation expense was $ 7.2 million and $ 7.6 million for the three months ended March 31, 2024 and 2023 , respectively, which is recorded in cost of revenue, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Loss. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill Disclosure [Abstract] | |
Goodwill | 8. GOODWILL The changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows: (In thousands) Network Solutions Services & Support Total As of December 31, 2023 $ 297,031 $ 56,384 $ 353,415 Goodwill impairment ( 290,528 ) — ( 290,528 ) Foreign currency translation adjustments ( 6,503 ) ( 1,255 ) ( 7,758 ) As of March 31, 2024 $ — $ 55,129 $ 55,129 Goodwill represents the excess purchase price over the fair value of net assets acquired. The Company performs its annual goodwill impairment assessment on the first day of the fourth quarter. In addition, the Company performs an interim impairment assessment prior to our October 1st annual measurement date whenever events or changes in circumstances indicate that the carrying amount of such assets (or group of assets) may not be recoverable. During the third quarter of 2023, the Company identified a triggering event due to a decrease in the Company’s market capitalization and changes in projections (decrease in estimated cash flows). While the quantitative impairment analysis indicated that there was no impairment of Network Solutions goodwill, the Company determined that a $ 37.9 million non-cash impairment charge for goodwill was warranted for the Services & Support reporting unit. During the fourth quarter of 2023, the Company completed its annual impairment test. There were no significant market changes or changes to cash flow projections, as such no triggering event was identified during the fourth quarter of 2023. During the first quarter of 2024, qualitative factors such as a decrease in the Company’s market capitalization, lower service provider spending and delayed holding patterns of inventory with respect to customers caused us to reduce our forecasts, triggering a quantitative impairment assessment for our reporting units. The Company determined the fair value of each reporting unit using a combination of an income approach and a market based peer group analysis. The significant inputs and assumptions used in the determination of the fair value of our reporting units based on future cash flows for the reporting units, requires significant judgment and the use of estimates and assumptions related to cash flow projections, discount rate, peer group determination and market multiple selection. The Company determined upon its quantitative impairment assessment to recognize a $ 292.6 million non-cash goodwill impairment charge for the Network Solutions reporting unit. The quantitative impairment analysis indicated there was no impairment of the Services & Support goodwill. No impairment of goodwill was recorded during the three months ended March 31, 2023. As of March 31, 2024, accumulated goodwill impairment losses totaled $ 330.5 million. Subsequent to March 31, 2024, the Company has experienced volatility in its stock price which reduced the market value of the Company’s common stock as of this filing. The Company will continue to monitor its stock price, operating results and other macroeconomic factors to determine if there is further indication of a sustained decline in fair value requiring an event driven assessment of the recoverability of its remaining goodwill prior to the annual assessment. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | 9. INTANGIBLE ASSETS Intangible assets consisted of the following: As of March 31, 2024 As of December 31, 2023 (In thousands) Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Customer relationships 10.9 $ 52,754 $ ( 15,725 ) $ 37,029 $ 54,856 $ ( 15,943 ) $ 38,913 Backlog 1.6 56,106 ( 51,712 ) 4,394 57,391 ( 52,022 ) 5,369 Developed technology 8.5 322,176 ( 69,549 ) 252,627 329,369 ( 61,271 ) 268,098 Licensed technology 9.0 5,900 ( 3,961 ) 1,939 5,900 ( 3,797 ) 2,103 Licensing agreements 8.5 560 ( 378 ) 182 560 ( 368 ) 192 Trade names 3.0 29,024 ( 18,747 ) 10,277 29,689 ( 16,379 ) 13,310 Total $ 466,520 $ ( 160,072 ) $ 306,448 $ 477,765 $ ( 149,780 ) $ 327,985 Intangible assets are reviewed for impairment whenever events and circumstances indicate impairment may have occurred. The Company assessed impairment triggers related to intangible assets during each financial period in 2024 and 2023. During the first quarter of 2024, qualitative factors such as a decrease in the Company’s market capitalization, cautious service provider spending due to economic uncertainty and continued customer inventory adjustments triggered a quantitative reassessment of our estimated future undiscounted cash flows for our Network Solutions reporting unit. The Company determined that our estimated future undiscounted cash flows exceeded the carrying value of our Network Solutions reporting unit as of March 31, 2024. Our Services & Support asset group is a stable business with gross margins of 58 %, the Company has sufficient cash flows that exceed the carrying value as of March 31, 2024. No impairment losses related to intangible assets were recorded during the three months ended March 31, 2024 and 2023. Amortization expense was $ 14.6 million and $ 25.8 million in the three months ended March 31, 2024 and 2023, respectively, and was included in cost of revenue, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Loss. Estimated future amortization expense of intangible assets is as follows: As of (In thousands) March 31, 2024 2024 $ 43,396 2025 46,346 2026 43,089 2027 41,725 2028 41,578 Thereafter 90,314 Total $ 306,448 |
Hedging
Hedging | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging | 10. HEDGING The Company has certain forward rate agreements to hedge foreign currency exposure of expected future cash flows in foreign currency. The Company does not hold or issue derivative instruments for trading or other speculative purposes. Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. All changes in the fair value of derivative instruments are recognized as other income (expense) in the Consolidated Statements of Loss and are classified as Level II under the fair value hierarchy. The derivative instruments are not subject to master netting agreements and are not offset in the Consolidated Balance Sheets. We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under forward exchange contracts and expect all counter parties to meet their obligations. We have not experienced credit losses from our counterparties. As of March 31, 2024, the Company had 45 fo rward rate contracts outstanding. Foreign Currency Hedging Arrangements On November 3, 2022, the Company entered into a euro/U.S. dollar forward contract arrangement (the "Initial Forward") with Wells Fargo Bank, N.A. (the “Hedge Counterparty”). The Initial Forward, which is governed by the provisions of an ISDA Master Agreement (including schedules thereto and transaction confirmations that supplement such agreement) entered into between the Company and the Hedge Counterparty, enable the Company to convert a portion of its euro denominated payment obligations under the proposed DPLTA into U.S. Dollars. Under the Initial Forward, the Company agreed to exchange an aggregate notional amount of € 160.0 million for U.S. dollars at a daily fixed forward rate ranging from $ 1.01 to $ 1.03 . The aggregate amount of € 160.0 million is divided into eight quarterly tranches of € 20.0 million, which commenced in the fourth quarter of 2022. During the three months ended March 31, 2024, the Company settled one € 20.0 million forward contract tranches and the remaining amount will be divided into three quarterly tranches of € 20.0 million over the remainder of 2024. The Company, at its sole discretion, may exchange all or part of each tranche on any given day within the applicable quarter; provided, however, that it must exchange the full tranche by the end of such quarter. The Initial Forward may be accelerated or terminated early for a number of reasons, including but not limited to (i) non-payment by the Company or the Hedge Counterparty, (ii) breach of representation or warranty or covenant by either party or (iii) insolvency or bankruptcy of either party. On March 21, 2023, the Company entered into a euro/U.S. dollar forward contract arrangement (the “Forward”) with the Hedge Counterparty. Under the Forward, which is governed by the provisions of an ISDA Master Agreement (including schedules thereto and transaction confirmations that supplement such agreement) entered into between the Company and the Hedge Counterparty, the Company will exchange an aggregate notional amount of € 160.0 million U.S. dollars for euros at a daily fixed forward rate ranging from $ 1.09 to $ 1.10 per € 1.00 . During the three months ended March 31, 2024, the Company settled one $ 20.0 million forward contract tranches and the remaining amount will be divided into three quarterly tranches of $ 20.0 million. These forward contracts were executed on March 21, 2023 (to sell EUR/buy USD) and were entered into for the purpose of unwinding the Initial Forward (to buy EUR/sell USD). The drawdown dates of the Initial Forward are set to the same date as the maturity of the new offsetting Forward. The fair values of the Company's derivative instruments recorded in the Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023 were as follows: (In thousands) Balance Sheet Location March 31, 2024 December 31, 2023 Derivatives Not Designated as Hedging Instruments (Level 2): Foreign exchange contracts – derivative assets Other receivables $ 4,088 $ 7,125 Foreign exchange contracts – derivative liabilities Accounts payable $ ( 16 ) $ ( 2,277 ) Total derivatives $ 4,072 $ 4,848 The change in the fair values of the Company's derivative instruments recorded in the Condensed Consolidated Statements of Loss during the three months ended March 31, 2024 and 2023 were as follows: Three Months Ended March 31, (In thousands) Income Statement 2024 2023 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Other income (expense), net $ 766 $ ( 69 ) |
Revolving Credit Agreements
Revolving Credit Agreements | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Revolving Credit Agreements | 11. REVOLVING CREDIT AGREEMENTS The carrying amounts of the Company's non-current revolving credit agreements in its Condensed Consolidated Balance Sheets were as follows: As of As of (In thousands) March 31, 2024 December 31, 2023 Wells Fargo credit agreement $ 195,000 $ 195,000 Total non-current revolving credit agreement $ 195,000 $ 195,000 As of March 31, 2024 , the weighted average interest rate on our revolving credit agreements was 8.46 %. Wells Fargo Credit Agreement On July 18, 2022, ADTRAN, Inc., as the borrower, and ADTRAN Holdings, Inc. entered into a credit agreement with a syndicate of banks, including Wells Fargo Bank, National Association, as administrative agent (“Administrative Agent”), and the other lenders named therein (the “Credit Agreement”). As of the date of this filing, the Credit Agreement allows for revolving credit borrowings of up to $ 400.0 million in aggregate principal amount, as well as the $ 50.0 million delayed draw term loan facility described below. On August 9, 2023, (the "First Amendment Effective Date") the Company, its wholly-owned direct subsidiary, ADTRAN, Inc. and the Administrative Agent entered into a First Amendment to the Credit Agreement (the “First Amendment” and together with the Credit Agreement, the "Credit Facility"). The First Amendment, provided for, among other things, a new $ 50.0 million delayed draw term loan (“DDTL”), which (subject to certain conditions) is available for borrowing in the event of the purchase by the Company of at least sixty percent ( 60.0 %) of the outstanding shares of Adtran Networks SE that were not owned by the Company and its subsidiaries as of the First Amendment Effective Date (such event, a “Springing Covenant Event”). Proceeds of the DDTL may only be used to repurchase minority shares of Adtran Networks SE. The DDTL remains available for borrowing from the occurrence of a Springing Covenant Event through August 9, 2024. The First Amendment further added additional financial flexibility by permitting, subject to certain requirements, the incurrence of convertible indebtedness by the Company in an aggregate principal amount of up to $ 172.5 million. Any such convertible indebtedness must, among other things, be incurred in pro forma compliance with the financial covenants in the Credit Agreement, be unsecured, and otherwise rank junior to borrowings under the Credit Agreement, and have a stated maturity date of at least 91 days after the latest scheduled maturity date of loans and commitments under the Credit Agreement. Net cash proceeds from any incurrence of convertible indebtedness must be used to repurchase minority shares of Adtran Networks or repay revolver borrowings under the Credit Agreement. On January 16, 2024, the Company entered into a Second Amendment to the Credit Agreement and First Amendment to the Collateral Agreement. The Second Amendment, among other things, provides the Company and its subsidiaries with additional covenant headroom for the fourth quarter of 2023 through the third quarter of 2024 (the "Covenant Relief Period") and adds certain other financial covenants which are described below. On March 12, 2024, the Company entered into a Third Amendment to the Credit Agreement. The Third Amendment, among other things, amends the definition of “Consolidated Funded Indebtedness” (which is used in the calculation of the Consolidated Total Net Leverage Ratio and the Consolidated Senior Secured Net Leverage Ratio) to exclude obligations of the Company and its subsidiaries under certain factoring arrangements when calculated for the fiscal quarters ending March 31, 2024 and June 30, 2024. As of March 31, 2024, ADTRAN, Inc.’s borrowings under the revolving line of credit were $ 195.0 million. As of March 31, 2024, there were no borrowings under the DDTL. The Credit Facility matures in July 2027; however, the Company has an option to request extensions subject to customary conditions. In addition, we may issue up to $ 50.0 million in letters of credit against our $ 400.0 million total facility. As of March 31, 2024, we had a total of $ 2.0 million in letters of credit under ADTRAN, Inc. outstanding against our eligible borrowings, leaving a net amount of $ 203.0 million available for future borrowings. Any future credit extensions under the Credit Agreement are subject to customary conditions precedent. The proceeds of any loans are expected to be used for general corporate purposes and to pay a portion of the Exchange Offer consideration. As of March 31, 2024, the Company was in compliance with all covenants. Revolving Line of Credit Interest Rate All U.S. dollar borrowings under the revolving line of credit (other than swingline loans, which bear interest at the Base Rate (as defined below plus the applicable margin) bear interest, at the Company’s option, at a rate per annum equal to either (A) the Base Rate plus an applicable margin ranging from 0.65 % to 1.65 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (or, during the Covenant Relief Period, an applicable margin of 2.15 % per annum), or (B) Adjusted Term SOFR (as defined below) plus an applicable margin ranging from 1.65 % to 2.65 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (or, during the Covenant Relief Period, an applicable margin of 3.15 % per annum). “Base Rate” means the highest of (a) the federal funds rate (i.e., for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the business day next succeeding such day) plus ½ of 1.0 %, (b) the prime commercial lending rate of the Administrative Agent, as established from time to time at its principal U.S. office (which such rate is an index or base rate and will not necessarily be its lowest or best rate charged to its customers or other banks), and (c) the daily Adjusted Term SOFR (as defined in the Credit Agreement) for a one-month tenor plus 1.0 %. The Base Rate is subject to a floor of 1.00 % per annum. “Adjusted Term SOFR” means Term SOFR for the applicable interest period plus 0.10 % per annum. Adjusted Term SOFR is subject to a floor of 0.00 % per annum. All Euro borrowings under the revolving line of credit bear interest at a rate per annum equal to EURIBOR (as defined in the Credit Agreement and subject to a 0.00 % per annum floor) plus an applicable margin ranging from 1.75 % to 2.75 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (or, during the Covenant Relief Period, an applicable margin of 3.25 % per annum). In addition, (x) if on or prior to December 31, 2024 we have not reduced the aggregate revolving credit commitment to $ 340.0 million or less, the applicable margin for all loans shall be increased by 1.00 % per annum, and (y) if on or prior to June 30, 2025 we have not reduced the aggregate revolving credit commitment to $ 300.0 million or less, the applicable margin for all loans shall be increased by 1.00 % per annum. In addition to paying interest on outstanding principal under the Credit Agreement, the Company is required to pay a quarterly commitment fee to the lenders under the Credit Agreement in respect of unutilized revolving loan commitments on the average daily unused portion of the revolving credit commitment of each lender, which commitment fee ranges from 0.20 % to 0.25 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (or, during the Covenant Relief Period, is equal to 0.25 % per annum). The Company is also required to pay a participation fee to the Administrative Agent for the account of each lender with respect to the Company’s participation in letters of credit at the then applicable rate for Adjusted Term SOFR Loans or EURIBOR Loans, and other customary fronting, issuance and administration fees with respect to letters of credit. The increases in the commitment fee and margin rates during the Covenant Relief Period (referenced above) continue until the first date when each of the following conditions have been met (the period during which such increases are in place is hereinafter referred to as the “Applicable Margin Interest Period”): (a) the Covenant Relief Period has ended, (b) since the Second Amendment effective date, the Company has repaid the revolving credit outstanding borrowings by a principal amount of at least $ 75.0 million, (c) the Company has reduced the aggregate revolving credit commitment to an amount no greater than $ 300.0 million and (d) the Company is in compliance with all financial covenants based on the financial statements for the most recently completed reference period. Default interest is 2.0 % per annum in excess of the rate otherwise applicable. DDTL Interest Rate All U.S. dollar borrowings under the DDTL bear interest, at the Company’s option, at a rate per annum equal to either (A) the Base Rate plus an applicable margin ranging from 0.90 % to 1.90 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (or, during the Covenant Relief Period, an applicable margin of 2.40 % per annum), or (B) Adjusted Term SOFR plus an applicable margin ranging from 1.90 % to 2.90 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (or, during the Covenant Relief Period, an applicable margin of 3.40 % per annum). In addition, (x) if on or prior to December 31, 2024 we have not reduced the aggregate revolving credit commitment to $ 340.0 million or less, the applicable margin for all loans shall be increased by 1.00 % per annum, and (y) if on or prior to June 30, 2025 we have not reduced the aggregate revolving credit commitment to $ 300.0 million or less, the applicable margin for all loans shall be increased by 1.00 % per annum. In addition to paying interest on outstanding principal under the DDTL loan, the Company is required to pay a quarterly commitment fee to the lenders under the Credit Agreement in respect of unutilized DDTL commitments at a rate of 0.25 % per annum on the daily unused portion of the aggregate DDTL commitment. The increases in the commitment fee and margin rates during the Covenant Relief Period (referenced above) continue until the first date when each of the following conditions have been met (the period during which such increases are in place is hereinafter referred to as the “Applicable Margin Interest Period”): (a) the Covenant Relief Period has ended, (b) since the Second Amendment effective date, the Company has repaid the revolving credit outstanding borrowings by a principal amount of at least $ 75.0 million, (c) the Company has reduced the aggregate revolving credit commitment to an amount no greater than $ 300.0 million and (d) the Company is in compliance with all financial covenants based on the financial statements for the most recently completed reference period. Default interest is 2.0 % per annum in excess of the rate otherwise applicable. Covenants Under the Credit Agreement The financial covenants under the Credit Agreement, as amended, include the following (capitalized terms used in this subsection and not otherwise defined herein have the meanings assigned to them in the Credit Agreement or its amendments, as applicable):: • As of the last day of any fiscal quarter, commencing with the fiscal quarter ended December 31, 2023, the Consolidated Total Net Leverage Ratio may not exceed 5.00 x. • As of the last day of any fiscal quarter, commencing with the fiscal quarter ended December 31, 2023, the Consolidated Senior Secured Net Leverage Ratio may not exceed: • In the event of the purchase by the Company of at least sixty percent ( 60 %) of the outstanding shares of Adtran Networks SE not owned by the Company as of August 9, 2023 that have been tendered (such event, a “Springing Covenant Event” and the fiscal quarter in which the Springing Covenant Event Occurs and the three consecutive quarterly test periods thereafter, the “Springing Covenant Period”), the following covenant levels: • First fiscal quarter ending after a Springing Covenant Event: 4.00 x • Second fiscal quarter ending after a Springing Covenant Event: 3.75 x • Third and fourth fiscal quarters ending after a Springing Covenant Event: 3.50 x • If the Company or any of its subsidiaries incurs certain unsecured indebtedness in excess of $ 50,000,000 in connection with a transaction that is a Springing Covenant Event or during a Springing Covenant Period, the Consolidated Senor Secured Net Leverage Ratio covenant will step down to 3.50 x at the time of such incurrence. • If a Springing Covenant Period is not in effect, the following covenant levels: • From December 31, 2023 through and including March 31, 2024: 3.25 x. • From April 1, 2024 through and including June 30, 2024: 3.50 x. • From July 1, 2024 and thereafter: 3.25 x. • As of the last day of any fiscal quarter, commencing with the fiscal quarter ended December 31, 2023, the Consolidated Fixed Charge Coverage Ratio may not exceed 1.25 x. • During the Covenant Relief Period or a Springing Covenant Period, as of the last day of any fiscal quarter (i) cash and cash equivalents of the Credit Parties must be at least $ 50.0 million and (ii) cash and cash equivalents of the Company and its subsidiaries must be at least $ 75.0 million. The Credit Agreement is guaranteed by certain domestic subsidiaries of the Company, and the Company is also required to add certain additional domestic and international subsidiaries as guarantors under the Credit Agreement (such existing and new guarantors, collectively, the “Guarantors”). In addition to the guarantees provided by the Guarantors, the Guarantors have granted (or will grant) security interests in favor of the Administrative Agent over substantially all tangible and intangible assets, and the Borrower will grant mortgages in favor of the Administrative Agent over certain owned real estate assets. The Company is currently in negotiations with the Administrative Agent regarding a potential further amendment to the Credit Agreement to address the addition of certain foreign subsidiary guarantors. The Credit Agreement provides for revolving borrowings of up to $ 400.0 million in aggregate principal amount, as well as an additional $ 50.0 million delayed draw term loan tranche that would be available upon a Springing Covenant Event. It also continues to permit the Company to prepay any or all of the outstanding loans or to reduce the commitments under the Credit Agreement subject to certain limitations and minimum payment thresholds. During the Covenant Relief Period, the Company is not permitted to make certain dividend payments to the Company's Stockholders or certain other Restricted Payments. However, the Company is permitted to make the Recurring Compensation Payment to each Adtran Networks shareholder (other than the Company), pursuant to the terms of the DPLTA. Furthermore, the Credit Agreement, as amended, contain customary affirmative and negative covenants, including incurrence covenants and certain other limitations on the ability of the Company and the Company’s subsidiaries to incur additional debt, guarantee other obligations, grant liens on assets, make investments, dispose of assets, make restricted payments, engage in mergers or consolidations, engage in transactions with affiliates, modify its organizational documents, and enter into certain restrictive agreements. The negative covenants are subject to various exceptions and carveouts; however, certain of the exceptions and carveouts are not permitted to be used during the Covenant Relief Period. It also contains customary events of default, such as misrepresentation and a default in the performance or observance of any covenant (subject to customary cure periods and materiality thresholds). Upon the occurrence and during the continuance of an event of default, the Administrative Agent is entitled to take various actions, including the acceleration of all amounts due under the Credit Agreement. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 12. EMPLOYEE BENEFIT PLANS Pension Benefit Plan We maintain a defined benefit pension plan covering employees in certain foreign countries. The Company's net non-current pension liability for all defined benefit pension plans totaled $ 11.7 million and $ 12.5 million as of March 31, 2024 and December 31, 2023 , respectively and the net current pension liability for all defined benefit pension plans totaled $ 0.1 million as of March 31, 2024 and December 31, 2023, which is included in accounts payable on the Condensed Consolidated Balance Sheets. The Company's defined benefit pension liability represents the projected benefit obligation, which is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of retirement. The following table summarizes the components of net periodic pension cost related to the Company's defined benefit pension plans: Three Months Ended March 31, (In thousands) 2024 2023 Service cost $ 340 $ 398 Interest cost 285 ( 32 ) Expected return on plan assets ( 360 ) 58 Amortization of actuarial losses 2 6 Net periodic pension cost $ 267 $ 430 The components of net periodic pension cost, other than the service cost component, are included in other income, net in the Condensed Consolidated Statements of Loss. Service cost is included in cost of revenue, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Loss. The Company made contributions to the defined benefit pension plans totaling $ 1.2 million and $ 1.0 million during the three months ended March 31, 2024 and 2023, respectively. Contributions to the defined benefit pension plans for the remainder of 2024 will be limited to benefit payments to retirees which are paid out of the operating cash flows of the Company and are expected to be approximately $ 3.5 million. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Equity | 13. EQUITY Accumulated Other Comprehensive Income The following tables present the changes in accumulated other comprehensive income, net of tax, by component: Three Months Ended March 31, 2024 (In thousands) Unrealized Defined Foreign ASU 2018-02 Adoption Total Balance as of December 31, 2023 $ ( 382 ) $ ( 2,506 ) $ 49,964 $ 385 $ 47,461 Other comprehensive loss before ( 119 ) — ( 17,745 ) — ( 17,864 ) Amounts reclassified from accumulated other 119 ( 60 ) — — 59 Net current period other comprehensive loss — ( 60 ) ( 17,745 ) — ( 17,805 ) Balance as of March 31, 2024 $ ( 382 ) $ ( 2,566 ) $ 32,219 $ 385 $ 29,656 Three Months Ended March 31, 2023 (In thousands) Unrealized Defined Foreign ASU 2018-02 Adoption Total Balance as of December 31, 2022 $ ( 836 ) $ ( 1,016 ) $ 27,593 $ 385 $ 26,126 Other comprehensive income before 83 — 8,678 — 8,761 Amounts reclassified from accumulated other ( 14 ) 35 — — 21 Net current period other comprehensive income 69 35 8,678 — 8,782 Less: Comprehensive income attributable to non-controlling interest, net of tax — — 382 — 382 Balance as of March 31, 2023 $ ( 767 ) $ ( 981 ) $ 35,889 $ 385 $ 34,526 The following tables present the details of reclassifications out of accumulated other comprehensive income: Three Months Ended March 31, 2024 (In thousands) Amount Affected Line Item in the Unrealized gain (loss) on available-for-sale securities: Net realized loss on sales of securities $ ( 161 ) Net investment gain Defined benefit plan adjustments – actuarial gain 87 (1) Total reclassifications for the period, before tax ( 74 ) Tax benefit 15 Total reclassifications for the period, net of tax $ ( 59 ) (1) A part of the computation of net periodic pension cost, which is included in other income, net in the Condensed Consolidated Statements of Loss. Three Months Ended March 31, 2023 (In thousands) Amount Affected Line Item in the Unrealized gain (loss) on available-for-sale securities: Net realized gain on sales of securities $ 18 Net investment gain Defined benefit plan adjustments – actuarial loss ( 51 ) (1) Total reclassifications for the period, before tax ( 33 ) Tax benefit 12 Total reclassifications for the period, net of tax $ ( 21 ) (1) A part of the computation of net periodic pension cost, which is included in other income, net in the Condensed Consolidated Statements of Loss. The following table presents the tax effects related to the change in each component of other comprehensive (loss) income: Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 (In thousands) Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Unrealized (loss) gain on available-for-sale $ ( 161 ) $ 42 $ ( 119 ) $ 109 $ ( 26 ) $ 83 Reclassification adjustment for amounts related to available-for-sale investments included in net gain (loss) 161 ( 42 ) 119 ( 18 ) 4 ( 14 ) Reclassification adjustment for amounts related to defined benefit plan adjustments included in net (loss) gain ( 87 ) 27 ( 60 ) 51 ( 16 ) 35 Foreign currency translation adjustments ( 17,745 ) — ( 17,745 ) 8,678 — 8,678 Total Other Comprehensive (Loss) Income $ ( 17,832 ) $ 27 $ ( 17,805 ) $ 8,820 $ ( 38 ) $ 8,782 |
Redeemable Non-controlling Inte
Redeemable Non-controlling Interest | 3 Months Ended |
Mar. 31, 2024 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | |
Redeemable Non-controlling Interest | 14. REDEEMABLE NON-CONTROLLING INTEREST As of March 31, 2024, the non-controlling Adtran Networks stockholders’ equity ownership percentage in Adtran Networks was approximately 35 %. The following table summarizes the redeemable non-controlling interest activity for the three months ended March 31, 2024 and for the year ended December 31, 2023: Three Months Ended For the Year Ended (In thousands) March 31, 2024 December 31, 2023 Balance at beginning of period $ 451,756 $ — Reclassification of non-controlling interests — 443,757 Fair value on redemption of redeemable non-controlling interest ( 6 ) ( 1,657 ) Net income attributable to redeemable non-controlling interests 2,880 11,525 Annual recurring compensation earned ( 2,880 ) ( 11,525 ) Adtran Networks stock option exercises — 52 Translation adjustment ( 10,115 ) 9,604 Balance at end of period $ 441,635 $ 451,756 Annual recurring compensation payable on untendered outstanding shares under the DPLTA must be recognized as it is accrued. For the three months ended March 31, 2024 , we have recognized $ 2.9 million, representing the portion of the annual recurring cash compensation to the non-controlling shareholders accrued during such periods, which will be paid after the ordinary general shareholders' meeting of Adtran Networks beginning in 2025. For the year ended December 31, 2023, we have recognized $ 11.5 million representing the portion of the annual recurring cash compensation to the non-controlling shareholders accrued during such periods, which will be paid after the ordinary general shareholders' meeting of Adtran Networks beginning in 2024. See Note 1 for additional information on RNCI and the annual dividend . |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 15. LOSS PER SHARE The calculation of basic and diluted loss per share is as follows: Three Months Ended March 31, (In thousands, except per share amounts) 2024 2023 Numerator Net loss attributable to ADTRAN Holdings, Inc. $ ( 324,550 ) $ ( 40,083 ) Denominator Weighted average number of shares – basic 78,814 78,358 Effect of dilutive securities Stock options — — PSUs, RSUs and restricted stock — — Weighted average number of shares – diluted 78,814 78,358 Loss per share attributable to ADTRAN Holdings, Inc. – basic $ ( 4.12 ) $ ( 0.51 ) Loss per share attributable to ADTRAN Holdings, Inc. – diluted $ ( 4.12 ) $ ( 0.51 ) For the three months ended March 31, 2024 and 2023 , 1.1 million and 0.1 million shares, respectively, of unvested PSUs, RSUs and restricted stock were excluded from the calculation of diluted earnings per share due to their anti-dilutive effect. For the three months ended March 31, 2024 and 2023 , 3.5 million and 0.4 million stock options, respectively, were outstanding but were not included in the computation of diluted earnings per share. These stock options were excluded because their exercise prices were greater than the average market price of the common shares during the applicable period, making them anti-dilutive under the treasury stock method. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | 16. SEGMENT INFORMATION The chief operating decision maker regularly reviews the Company’s financial performance based on two reportable segments: (1) Network Solutions and (2) Services & Support. The Network Solutions segment includes hardware and software products that enable a digital future which support the Company's Subscriber, Access & Aggregation, and Optical Networking Solutions. The Company's cloud-managed Wi-Fi gateways, virtualization software, and switches provide a mix of wired and wireless connectivity at the customer premises. In addition, its Carrier Ethernet products support a variety of applications at the network edge ranging from mobile backhaul to connecting enterprise customers (“Subscriber Solutions"). The Company's portfolio includes products for multi-gigabit service delivery over fiber or alternative media to homes and businesses. The Services & Support segment offers a comprehensive portfolio of network design, implementation, maintenance and cloud-hosted services supporting its Subscriber, Access & Aggregation, and Optical Networking Solutions. These services assist operators in the deployment of multi-vendor networks while reducing their cost to maintain these networks. The cloud-hosted services include a suite of SaaS applications under the Company's Mosaic One platform that manages end-to-end network and service optimization for both fiber access infrastructure and mesh Wi-Fi connectivity. The Company backs these services with a global support organization that offers on-site and off-site support services with varying SLAs. The performance of these segments is evaluated based on revenue, gross profit and gross margin; therefore, selling, general and administrative expenses, research and development expenses, interest and dividend income, interest expense, net investment gain, other income (expense), net and income tax benefit are reported on a Company-wide basis only. There is no inter-segment revenue. Asset information by reportable segment is not produced and, therefore, is not reported. The following tables present information about the revenue and gross profit of the Company's reportable segments: Three Months Ended March 31, 2024 March 31, 2023 (In thousands) Revenue Gross Profit Revenue Gross Profit Network Solutions $ 181,273 $ 46,165 $ 282,418 $ 63,288 Services & Support 44,900 26,090 41,494 24,520 Total $ 226,173 $ 72,255 $ 323,912 $ 87,808 For the three months ended March 31, 2024 and 2023 , $ 1.6 million and $ 1.5 million, respectively, of depreciation expense was included in gross profit for our Network Solutions segment. For the three months ended March 31, 2024 and 2023 , $ 8 and $ 2 Revenue by Geographic Area The following table presents revenue information by geographic area: Three Months Ended March 31, (In thousands) 2024 2023 United States $ 83,290 $ 131,466 Germany 39,741 76,286 United Kingdom 52,740 57,397 Other international 50,402 58,763 Total $ 226,173 $ 323,912 |
Liability for Warranty Returns
Liability for Warranty Returns | 3 Months Ended |
Mar. 31, 2024 | |
Product Warranties Disclosures [Abstract] | |
Liability for Warranty Returns | 17. LIABILITY FOR WARRANTY RETURNS The Company's products generally include warranties of 90 days to five years for product defects. The Company accrues for warranty returns at the time of product shipment based on its historical return rate and estimate of the cost to repair or replace the defective products. The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers. The increasing complexity of the Company's products may cause warranty incidences, when they arise, to be more costly. Estimates regarding future warranty obligations may change due to product failure rates, material usage and other rework costs incurred in correcting a product failure. In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should the Company's actual experience relative to these factors be worse than its estimates, the Company will be required to record additional warranty expense. The liability for warranty obligations totaled $ 6.2 million and $ 6.4 million as of March 31, 2024 and December 31, 2023 , respectively, and is included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets. The warranty expense and write-off activity for the three months ended March 31, 2024 and 2023 are summarized as follows: Three Months Ended March 31, (In thousands) 2024 2023 Balance at beginning of period $ 6,445 $ 7,196 Plus: Amounts charged to cost and expenses 646 1,077 Plus: Foreign currency translation adjustments ( 54 ) 26 Less: Deductions ( 816 ) ( 1,099 ) Balance at end of period $ 6,221 $ 7,200 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is subject to or otherwise involved in various lawsuits, claims, investigations and legal proceedings that arise out of or are incidental to the conduct of our business (collectively, “Legal Matters”), including those relating to employment matters, patent rights, regulatory compliance matters, stockholder claims, and contractual and other commercial disputes. Such Legal Matters, even if not meritorious, could result in the expenditure of significant financial and managerial resources. Additionally, an unfavorable outcome in a legal matter, including in a patent dispute, could require the Company to pay damages, entitle claimants to other relief, such as royalties, or could prevent the Company from selling some of its products in certain jurisdictions. At this time, the Company is unable to predict the outcome of or estimate the possible loss or range of loss, if any, associated with such legal matters. DPLTA Exit and Recurring Compensation Costs Pursuant to the terms of the DPLTA, each Adtran Networks shareholder (other than the Company) has received an offer to elect either (1) to remain an Adtran Networks shareholder and receive from us an Annual Recurring Compensation payment, or (2) to receive Exit Compensation plus guaranteed interest. The guaranteed interest under the Exit Compensation is calculated from the effective date of the DPLTA to the date the shares are tendered, less any Annual Recurring Compensation paid. The guaranteed interest rate is 5.0 % plus a variable component (according to the German Civil Code) that was 3.62 % as of March 31, 2024. Assuming all the minority holders of currently outstanding Adtran Networks shares were to elect the second option, we would be obligated to make aggregate Exit Compensation payments, including guaranteed interest, of approximately € 338.9 million or approximately $ 365.7 million, based on an exchange rate as of March 31, 2024 and reflecting interest accrued through March 31, 2024 during the pendency of the appraisal proceedings discussed below. Shareholders electing the first option of Annual Recurring Compensation may later elect the second option. The opportunity for outside Adtran Networks shareholders to tender Adtran Networks shares in exchange for Exit Compensation had been scheduled to expire on March 16, 2023 . However, due to the appraisal proceedings that have been initiated in accordance with applicable German law, this time period for tendering shares has been extended pursuant to the German Stock Corporation Act (Aktiengesetz) and will end two months after the date on which a final decision in such appraisal proceedings has been published in the Federal Gazette (Bundesanzeiger). Our obligation to pay Annual Recurring Compensation under the DPLTA is a continuing payment obligation, which will amount to approximately € 10.6 million or $ 11.5 million (based on the current exchange rate) per year assuming none of the minority Adtran Networks shareholders were to elect Exit Compensation. The foregoing amounts do not reflect any potential increase in payment obligations that we may have depending on the outcome of ongoing appraisal proceedings in Germany. During the three months ended March 31, 2024 and 2023, we accrued $ 2.9 million and $ 2.8 million, respectively, in Annual Recurring Compensation, which was reflected as an increase to retained deficit. With respect to the year ended December 31, 2023, we are obligated to pay $ 11.5 million in Annual Recurring Compensation on the third banking day following the 2024 ordinary general shareholders’ meeting of Adtran Networks, which is expected to occur on June 28, 2024 (but in any event within eight months following December 31, 2023). For the three months ended March 31, 2024 and 2023, less than one thousand and 62 thousand shares, respectively, of Adtran Networks stock was tendered to the Company and Exit Compensation payments of approximately € 4 thousand and € 1.1 million, respectively, or approximately $ 5 thousand and $ 1.2 million based on an exchange rate as of March 31, 2024 and 2023, respectively, were paid to Adtran Networks shareholders. Performance Bonds Certain contracts, customers and jurisdictions in which we do business require us to provide various guarantees of performance such as bid bonds, performance bonds and customs bonds. As of March 31, 2024 and December 31, 2023, we had commitments related to these bonds totaling $ 10.6 million and $ 10.8 million, respectively, which expire at various dates through April 2031 . In general, we would only be liable for the amount of these guarantees in the event of default under each contract, the probability of which we believe is remote. Purchase Obligations The Company purchases components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. Our inventory purchase obligations are for short-term product manufacturing requirements, as well as for commitments to suppliers to secure manufacturing capacity. Certain of our inventory purchase obligations with contract manufacturers and suppliers relate to arrangements to secure supply and pricing for certain product components for multi-year periods. As of March 31, 2024, purchase obligations totaled $ 238.0 million. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 19. RESTRUCTURING During the fourth quarter of 2022, the Company initiated a restructuring program designed to optimize the assets, business processes, and information technology systems of the Company in relation to the Business Combination with Adtran Networks. The restructuring program is expected to maximize cost synergies by realizing operation scale, combining sales channels, streamlining corporate and general and administrative functions, including human capital resources and combining sourcing and production costs. This restructuring program is expected to be completed in late 2024 and includes expenses specifically associated with achieving run-rate synergies as well as Business Efficiency Program expenses described below. On November 6, 2023, due to the uncertainty around the current macroeconomic environment and its impact on customer spending levels, the Company’s management decided to implement a business efficiency program (the “Business Efficiency Program”) targeting the reduction of ongoing operating expenses and focusing on capital efficiency inclusive of certain salary reductions, an early retirement program, a site consolidation plan to include lease impairments and the partial sale of owned real estate (including the potential sale of portions of our headquarters), inventory write downs from product discontinuances, and the suspension of the quarterly dividend. The Business Efficiency Program expands upon other recently implemented restructuring efforts and synergy costs following the Business Combination. For instance, on August 17, 2023, the Company’s management determined to discontinue its copper-based Digital Subscriber Line broadband access technology products and its fixed wireless access products in its Network Solutions segment. Furthermore, on September 29, 2023, the Company’s management decided to exit the "IoT" gateway market (indoor and outdoor), a subset of the broader IoT market (together with the other product discontinuations, the “Discontinuations”). On October 25, 2023, all employees were informed of certain personnel measures, which included the reduction of salary for select management, a reduction of approximately 5 % of the workforce, an early retirement program and a hiring freeze. Additionally, on April 11, 2024, management determined to close a facility in Greifswald, Germany. The closure of the facility is expected to be substantially completed by June 30, 2024. During the three months ended March 31, 2024, we recognized $ 17.1 million of costs related to the Business Efficiency Program. The costs recognized during the three months ended March 31, 2024, included charges of $ 8.8 million as a result of a strategy shift which included discontinuance of certain items in connection with the Business Efficiency Program, of which, $ 4.0 million relates to inventory write-downs and $ 4.8 million relates to other charges, and are included in cost of revenue in the Condensed Consolidated Statements of Loss. Since the inception of the Business Efficiency Program, we recognized $ 42.2 million of costs. We expect costs in the second quarter 2024 and thereafter relating to the Business Efficiency Program to range between $ 20.6 million and $ 35.8 million. Management expects these planned costs to include severance costs ranging from $ 17.3 million to $ 28.3 million in connection with an early retirement program and reductions in workforce and site consolidation transaction expenses (primarily brokers fees and Greifswald exit costs) ranging from $ 3.3 million to $ 7.5 million. Future cash payments include: severance costs and outplacement fees that are anticipated to be in the range of $ 18.1 million to $ 29.1 million and payments relating to the site consolidation transaction expenses that are anticipated to be in the range of $ 3.1 million to $ 7.3 million. We may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the Business Efficiency Program, including potential impairment charges related to the discontinuance of additional product lines, regulatory requirements related to personnel measures, and site closures. However, we are not able to estimate the amount or range of amounts of such potential incremental charges as of the date of this filing. If required, we will amend this disclosure at such time as management is able in good faith to estimate the amount, or range of amounts, of these charges. For the three months ended March 31, 2023, we recognized $ 2.4 million of restructuring costs relating to the Business Combination under the multi-year integration program and synergy realization that are included in cost of revenue, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statement of Loss. A reconciliation of the beginning and ending restructuring liabilities, which is included in accrued wages and benefits and accounts payable in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, is as follows: Three Months Ended (In thousands) March 31, 2024 Balance at beginning of period $ 8,309 Plus: Amounts charged to cost and expense 13,118 Less: Amounts paid ( 11,075 ) Balance as of March 31, 2024 $ 10,352 For the Year Ended (In thousands) December 31, 2023 Balance as of December 31, 2022 $ 159 Plus: Amounts charged to cost and expense 22,241 Less: Amounts paid ( 14,091 ) Balance as of December 31, 2023 $ 8,309 Restructuring expenses included in the Condensed Consolidated Statements of Loss are for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, (In thousands) 2024 2023 Network Solutions - Cost of revenue $ 2,318 $ 58 Network Solutions - inventory write-down 8,782 — Services & Support - Cost of revenue 148 18 Cost of revenue $ 11,248 $ 76 Selling, general and administrative expenses 1,801 2,180 Research and development expenses 4,061 181 Total restructuring expenses $ 17,110 $ 2,437 The following table represents the components of restructuring expenses by geographic area for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, (In thousands) 2024 2023 United States $ 15,060 $ 1,119 International 2,050 1,318 Total restructuring expenses $ 17,110 $ 2,437 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. SUBSEQUENT EVENTS Facility Closure In connection with the Business Efficiency Program, management of the Company determined on April 11, 2024 to close the Company’s facility in Greifswald, Germany. The closure of the facility is expected to be substantially completed by June 30, 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of ADTRAN Holdings, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information presented in Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements are not included herein. The December 31, 2023 Condensed Consolidated Balance Sheet is derived from audited financial statements but does not include all disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in ADTRAN Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2023 , filed with the SEC on March 15, 2024. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Significant estimates include allowance for credit losses on accounts receivable and contract assets, excess and obsolete inventory reserves, warranty reserves, customer rebates, determination and accrual of the deferred revenue related to performance obligations under contracts with customers, estimated costs to complete obligations associated with deferred and accrued revenues and network installations, estimated income tax provision and income tax contingencies, fair value of stock-based compensation, assessment of goodwill and other intangibles for impairment, estimated lives of intangible assets, estimates of intangible assets upon measurement, estimated pension liability and fair value of investments and estimated contingent liabilities. Actual amounts could differ significantly from these estimates. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of ongoing inflationary pressures, the energy crisis, currency fluctuations and political tensions as of March 31, 2024, and through the date of this report. The accounting matters assessed included, but were not limited to, the allowance for credit losses, stock-based compensation, carrying value of goodwill, intangibles and other long-lived assets, financial assets, valuation allowances for tax as sets, revenue recognition and costs of revenue. Future conditions related to ongoing inflationary pressures, the energy crisis, continued elevated interest rates, instability in the financial services industry, currency fluctuations and political tensions could result in further impacts to the Company's consolidated financial statements in future reporting periods |
Accounts Receivable Factoring | Accounts Receivable Factoring New Accounts Receivable Factoring Agreement On December 19, 2023, the Company entered into a new factoring agreement with a third-party financial institution to replace the Company’s prior accounts receivable purchase agreement, to sell on a revolving basis, undivided interests in the Company’s accounts receivable. The new factoring agreement qualifies for treatment as a secured borrowing with a pledge of collateral under Accounting Standards Codification ("ASC") Topic 810, Consolidations, as the Company is considered the primary beneficiary in a variable interest entity created to hold the factored receivables and the Company retains a residual claim on reserves related to the factored receivables . Within the Condensed Consolidated Balance Sheets, the receivables factored continue to be carried in accounts receivable, less allowance for credit losses, and the secured borrowings are carried as a current liability within accounts payable. The proceeds and repayments of secured borrowings are reflected as cash flows provided by (used in) financing activities within the Condensed Consolidated Statements of Cash Flows, and program fees are recorded as interest expense in the Consolidated Statements of Loss. The short-term liability classification of the secured borrowings is based on the estimated timing of the collection of the accounts receivable which are expected to be received within 12 months. See Note 2 for additional information. Previous Accounts Receivable Factoring Agreement The Company had previously entered into a factoring agreement to sell certain receivables to an unrelated third-party financial institution on a non-recourse basis. These transactions were accounted for in accordance with ASC Topic 860 and resulted in a reduction in accounts receivable because the agreement transferred effective control over and risk related to the receivables to the buyers. Trade accounts receivables balances sold were removed from the Condensed Consolidated Balance Sheets and cash received was reflected as cash flows provided by (used in) operating activities in the Condensed Consolidated Statements of Cash Flow. Factoring related interest expense was recorded to interest expense on the Condensed Consolidated Statements of Loss. On each sale date, the financial institution retained from the sale price a default reserve, up to a required balance, which was held by the financial institution in a reserve account and pledged to the Company. The financial institution was entitled to withdraw from the reserve account the sale price of a defaulted receivable. The balance in the reserve account was included in other assets on the Condensed Consolidated Balance Sheets. |
Redeemable Non-Controlling Interest | Redeemable Non-Controlling Interest As of March 31, 2024 and December 31, 2023, the non-controlling Adtran Networks stockholders’ equity ownership percentage in Adtran Networks was approximately 34.7 % for each period. As a result of the effectiveness of the DPLTA on January 16, 2023, the Adtran Networks shares, representing the equity interest in Adtran Networks held by holders other than the Company, can be tendered at any time and are, therefore, redeemable and must be classified outside stockholders’ equity. Therefore, the permanent equity noncontrolling interest balance was reclassified to redeemable non-controlling interest on January 16, 2023 and was remeasured to fair value based on the trading market price of the Adtran Networks shares. Subsequently, the carrying value of the RNCI is adjusted to its maximum redemption value at each reporting date when the maximum redemption value is greater than the initial carrying amount of the RNCI. However, the RNCI will be remeasured using the current exchange rate at each reporting date as long as the RNCI is currently redeemable. For the period of time that the DPLTA is in effect, the RNCI will continue to be presented as RNCI outside of stockholders’ equity in the Condensed Consolidated Balance Sheets. See Note 14 for additional information on RNCI . |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The Company is currently evaluating the effect that adoption of ASU 2023-09 will have on our disclosures. In November 2023, the FASB issued ASU 2023-7, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company expect to adopt the new disclosures as required for the year ended December 31, 2024. The Company is currently evaluating the impact on the related disclosures. Recent Final Rules Not Yet Adopted In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which requires registrants to provide certain climate-related information in their registration statements and annual reports. The rules require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks will also include disclosure of a registrant's greenhouse gas emissions. In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements. These requirements are effective for the Company in various fiscal years, starting with its fiscal year beginning January 1, 2025. Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. The Company is currently evaluating the impact of these final rules on its consolidated financial statements and disclosures. On April 12, 2024, the final rules were indefinitely delayed pending the completion of judicial review in consolidated proceedings in the U.S. Court of Appeals, Eighth Circuit. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There are currently no recently adopted accounting pronouncements that are expected to have a material effect on the Condensed Consolidated Financial Statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregate of Revenue by Reportable Segment and Revenue Category | The following table disaggregates revenue by reportable segment and revenue category: Three Months Ended March 31, 2024 March 31, 2023 (In thousands) Network Solutions Services & Support Total Network Solutions Services & Support Total Subscriber Solutions $ 60,369 $ 9,399 $ 69,767 $ 70,287 $ 9,049 $ 79,336 Access & Aggregation Solutions 67,777 13,535 81,312 84,554 12,266 96,820 Optical Networking Solutions 53,127 21,966 75,094 127,577 20,179 147,756 Total $ 181,273 $ 44,900 $ 226,173 $ 282,418 $ 41,494 $ 323,912 |
Information about Receivable, Contract Assets, and Unearned Revenue from Contracts with Customers | The following table provides information about accounts receivable, contract assets and unearned revenue from contracts with customers: As of As of (In thousands) March 31, 2024 December 31, 2023 Accounts receivable, net $ 187,554 $ 216,445 Contract assets (1) $ 815 $ 691 Unearned revenue $ 55,124 $ 46,731 Non-current unearned revenue $ 22,884 $ 25,109 (1) Included in other receivables on the Condensed Consolidated Balance Sheets. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock-Based Compensation Expense Related to Stock Options, PSUs, RSUs and Restricted Stock | The following table summarizes the PSUs, RSUs and restricted stock outstanding as of December 31, 2023 and March 31, 2024 and the changes that occurred during the three months ended March 31, 2024: Number of Weighted Avg. Grant Date Fair Value Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2023 1,942 $ 17.46 PSUs, RSUs and restricted stock granted 966 $ 7.22 PSUs, RSUs and restricted stock vested ( 102 ) $ 18.47 PSUs, RSUs and restricted stock forfeited ( 32 ) $ 17.36 Unvested PSUs RSUs and restricted stock outstanding, March 31, 2024 2,774 $ 13.79 |
Summary of Stock Options Outstanding | The following table summarizes the ADTRAN Holdings, Inc. stock options outstanding as of December 31, 2023 and March 31, 2024 and the changes that occurred during the three months ended March 31, 2024: Number of Weighted Avg. Weighted Avg. Aggregate Stock options outstanding, December 31, 2023 3,894 $ 10.32 5.25 $ 3,087 Stock options exercised ( 36 ) $ 6.06 Stock options forfeited ( 58 ) $ 6.68 Stock options expired ( 178 ) $ 7.89 Stock options outstanding, March 31, 2024 3,622 $ 10.54 5.18 $ 268 Stock options exercisable, March 31, 2024 1,264 $ 13.30 1.43 $ — |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Gross Realized Gains and Losses on Sale of Debt Securities | The following tab le presents the gross realized gains and losses related to its debt securities: Three Months Ended March 31, (In thousands) 2024 2023 Gross realized gain on debt securities $ — $ 4 Gross realized loss on debt securities — ( 11 ) Total loss recognized, net $ — $ ( 7 ) |
Realized and Unrealized Gains and Losses related to Marketable Equity Securities | Realized and unrealized gains and losses related to marketable equity securities were as follows: Three Months Ended March 31, (In thousands) 2024 2023 Realized gain on equity securities sold $ 123 $ 13 Unrealized gain on equity securities held 2,130 1,246 Total gain recognized, net $ 2,253 $ 1,259 |
Cash Equivalents and Investments held at Fair Value | The Company’s cash equivalents and investments held at fair value are categorized into this hierarchy as follows: Fair Value Measurements as of March 31, 2024 Using (In thousands) Fair Value Quoted Prices Significant Significant Unobservable Inputs Cash equivalents Money market funds $ 5,375 $ 5,375 $ — $ — Marketable equity securities Marketable equity securities – various industries 987 987 — — Deferred compensation plan assets 28,265 28,265 — — Total $ 34,627 $ 34,627 $ — $ — Fair Value Measurements as of December 31, 2023 Using (In thousands) Fair Value Quoted Prices Significant Significant Unobservable Inputs Cash equivalents Money market funds $ 5,302 $ 5,302 $ — $ — Marketable equity securities Marketable equity securities – various industries 905 905 — — Deferred compensation plan assets 26,838 26,838 — — Total $ 33,045 $ 33,045 $ — $ — |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventory consisted of the following: As of As of (In thousands) March 31, 2024 December 31, 2023 Raw materials $ 130,977 $ 152,140 Work in process 14,856 17,239 Finished goods 176,314 192,916 Total inventory, net $ 322,147 $ 362,295 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consisted of the following: As of As of (In thousands) March 31, 2024 December 31, 2023 Engineering and other equipment $ 184,330 $ 183,336 Building 79,159 79,215 Computer hardware and software 111,354 101,572 Building and land improvements 57,491 58,238 Furniture and fixtures 21,536 21,368 Land 5,227 5,242 Total property, plant and equipment 459,097 448,971 Less: accumulated depreciation ( 332,128 ) ( 325,951 ) Total property, plant and equipment, net $ 126,969 $ 123,020 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows: (In thousands) Network Solutions Services & Support Total As of December 31, 2023 $ 297,031 $ 56,384 $ 353,415 Goodwill impairment ( 290,528 ) — ( 290,528 ) Foreign currency translation adjustments ( 6,503 ) ( 1,255 ) ( 7,758 ) As of March 31, 2024 $ — $ 55,129 $ 55,129 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Summary of Intangible Assets | Intangible assets consisted of the following: As of March 31, 2024 As of December 31, 2023 (In thousands) Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Customer relationships 10.9 $ 52,754 $ ( 15,725 ) $ 37,029 $ 54,856 $ ( 15,943 ) $ 38,913 Backlog 1.6 56,106 ( 51,712 ) 4,394 57,391 ( 52,022 ) 5,369 Developed technology 8.5 322,176 ( 69,549 ) 252,627 329,369 ( 61,271 ) 268,098 Licensed technology 9.0 5,900 ( 3,961 ) 1,939 5,900 ( 3,797 ) 2,103 Licensing agreements 8.5 560 ( 378 ) 182 560 ( 368 ) 192 Trade names 3.0 29,024 ( 18,747 ) 10,277 29,689 ( 16,379 ) 13,310 Total $ 466,520 $ ( 160,072 ) $ 306,448 $ 477,765 $ ( 149,780 ) $ 327,985 |
Estimated Future Amortization Expense Related to Intangible Assets | Estimated future amortization expense of intangible assets is as follows: As of (In thousands) March 31, 2024 2024 $ 43,396 2025 46,346 2026 43,089 2027 41,725 2028 41,578 Thereafter 90,314 Total $ 306,448 |
Hedging (Tables)
Hedging (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Derivative Instruments | The fair values of the Company's derivative instruments recorded in the Condensed Consolidated Balance Sheet as of March 31, 2024 and December 31, 2023 were as follows: (In thousands) Balance Sheet Location March 31, 2024 December 31, 2023 Derivatives Not Designated as Hedging Instruments (Level 2): Foreign exchange contracts – derivative assets Other receivables $ 4,088 $ 7,125 Foreign exchange contracts – derivative liabilities Accounts payable $ ( 16 ) $ ( 2,277 ) Total derivatives $ 4,072 $ 4,848 The change in the fair values of the Company's derivative instruments recorded in the Condensed Consolidated Statements of Loss during the three months ended March 31, 2024 and 2023 were as follows: Three Months Ended March 31, (In thousands) Income Statement 2024 2023 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Other income (expense), net $ 766 $ ( 69 ) |
Revolving Credit Agreements (Ta
Revolving Credit Agreements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Carrying Amount of Non-Current Revolving Agreements | The carrying amounts of the Company's non-current revolving credit agreements in its Condensed Consolidated Balance Sheets were as follows: As of As of (In thousands) March 31, 2024 December 31, 2023 Wells Fargo credit agreement $ 195,000 $ 195,000 Total non-current revolving credit agreement $ 195,000 $ 195,000 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
Schedule of the Components of Net Periodic Pension Cost | The following table summarizes the components of net periodic pension cost related to the Company's defined benefit pension plans: Three Months Ended March 31, (In thousands) 2024 2023 Service cost $ 340 $ 398 Interest cost 285 ( 32 ) Expected return on plan assets ( 360 ) 58 Amortization of actuarial losses 2 6 Net periodic pension cost $ 267 $ 430 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income, Net of Tax, by Component | The following tables present the changes in accumulated other comprehensive income, net of tax, by component: Three Months Ended March 31, 2024 (In thousands) Unrealized Defined Foreign ASU 2018-02 Adoption Total Balance as of December 31, 2023 $ ( 382 ) $ ( 2,506 ) $ 49,964 $ 385 $ 47,461 Other comprehensive loss before ( 119 ) — ( 17,745 ) — ( 17,864 ) Amounts reclassified from accumulated other 119 ( 60 ) — — 59 Net current period other comprehensive loss — ( 60 ) ( 17,745 ) — ( 17,805 ) Balance as of March 31, 2024 $ ( 382 ) $ ( 2,566 ) $ 32,219 $ 385 $ 29,656 Three Months Ended March 31, 2023 (In thousands) Unrealized Defined Foreign ASU 2018-02 Adoption Total Balance as of December 31, 2022 $ ( 836 ) $ ( 1,016 ) $ 27,593 $ 385 $ 26,126 Other comprehensive income before 83 — 8,678 — 8,761 Amounts reclassified from accumulated other ( 14 ) 35 — — 21 Net current period other comprehensive income 69 35 8,678 — 8,782 Less: Comprehensive income attributable to non-controlling interest, net of tax — — 382 — 382 Balance as of March 31, 2023 $ ( 767 ) $ ( 981 ) $ 35,889 $ 385 $ 34,526 |
Reclassifications Out of Accumulated Other Comprehensive Income | The following tables present the details of reclassifications out of accumulated other comprehensive income: Three Months Ended March 31, 2024 (In thousands) Amount Affected Line Item in the Unrealized gain (loss) on available-for-sale securities: Net realized loss on sales of securities $ ( 161 ) Net investment gain Defined benefit plan adjustments – actuarial gain 87 (1) Total reclassifications for the period, before tax ( 74 ) Tax benefit 15 Total reclassifications for the period, net of tax $ ( 59 ) (1) A part of the computation of net periodic pension cost, which is included in other income, net in the Condensed Consolidated Statements of Loss. Three Months Ended March 31, 2023 (In thousands) Amount Affected Line Item in the Unrealized gain (loss) on available-for-sale securities: Net realized gain on sales of securities $ 18 Net investment gain Defined benefit plan adjustments – actuarial loss ( 51 ) (1) Total reclassifications for the period, before tax ( 33 ) Tax benefit 12 Total reclassifications for the period, net of tax $ ( 21 ) (1) A part of the computation of net periodic pension cost, which is included in other income, net in the Condensed Consolidated Statements of Loss. |
Tax Effects Related to the Change in Each Component of Other Comprehensive Income (Loss) | The following table presents the tax effects related to the change in each component of other comprehensive (loss) income: Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 (In thousands) Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Unrealized (loss) gain on available-for-sale $ ( 161 ) $ 42 $ ( 119 ) $ 109 $ ( 26 ) $ 83 Reclassification adjustment for amounts related to available-for-sale investments included in net gain (loss) 161 ( 42 ) 119 ( 18 ) 4 ( 14 ) Reclassification adjustment for amounts related to defined benefit plan adjustments included in net (loss) gain ( 87 ) 27 ( 60 ) 51 ( 16 ) 35 Foreign currency translation adjustments ( 17,745 ) — ( 17,745 ) 8,678 — 8,678 Total Other Comprehensive (Loss) Income $ ( 17,832 ) $ 27 $ ( 17,805 ) $ 8,820 $ ( 38 ) $ 8,782 |
Redeemable Non-controlling In_2
Redeemable Non-controlling Interest (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | |
Summary of Redeemable Non-controlling Interest Activity | The following table summarizes the redeemable non-controlling interest activity for the three months ended March 31, 2024 and for the year ended December 31, 2023: Three Months Ended For the Year Ended (In thousands) March 31, 2024 December 31, 2023 Balance at beginning of period $ 451,756 $ — Reclassification of non-controlling interests — 443,757 Fair value on redemption of redeemable non-controlling interest ( 6 ) ( 1,657 ) Net income attributable to redeemable non-controlling interests 2,880 11,525 Annual recurring compensation earned ( 2,880 ) ( 11,525 ) Adtran Networks stock option exercises — 52 Translation adjustment ( 10,115 ) 9,604 Balance at end of period $ 441,635 $ 451,756 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Basic and Diluted Loss Per Share | The calculation of basic and diluted loss per share is as follows: Three Months Ended March 31, (In thousands, except per share amounts) 2024 2023 Numerator Net loss attributable to ADTRAN Holdings, Inc. $ ( 324,550 ) $ ( 40,083 ) Denominator Weighted average number of shares – basic 78,814 78,358 Effect of dilutive securities Stock options — — PSUs, RSUs and restricted stock — — Weighted average number of shares – diluted 78,814 78,358 Loss per share attributable to ADTRAN Holdings, Inc. – basic $ ( 4.12 ) $ ( 0.51 ) Loss per share attributable to ADTRAN Holdings, Inc. – diluted $ ( 4.12 ) $ ( 0.51 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Revenue and Gross Profit of Reportable Segments | The following tables present information about the revenue and gross profit of the Company's reportable segments: Three Months Ended March 31, 2024 March 31, 2023 (In thousands) Revenue Gross Profit Revenue Gross Profit Network Solutions $ 181,273 $ 46,165 $ 282,418 $ 63,288 Services & Support 44,900 26,090 41,494 24,520 Total $ 226,173 $ 72,255 $ 323,912 $ 87,808 |
Revenue Information by Geographic Area | The following table presents revenue information by geographic area: Three Months Ended March 31, (In thousands) 2024 2023 United States $ 83,290 $ 131,466 Germany 39,741 76,286 United Kingdom 52,740 57,397 Other international 50,402 58,763 Total $ 226,173 $ 323,912 |
Liability for Warranty Returns
Liability for Warranty Returns (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Product Warranties Disclosures [Abstract] | |
Summary of Warranty Expense and Write-off Activity | The warranty expense and write-off activity for the three months ended March 31, 2024 and 2023 are summarized as follows: Three Months Ended March 31, (In thousands) 2024 2023 Balance at beginning of period $ 6,445 $ 7,196 Plus: Amounts charged to cost and expenses 646 1,077 Plus: Foreign currency translation adjustments ( 54 ) 26 Less: Deductions ( 816 ) ( 1,099 ) Balance at end of period $ 6,221 $ 7,200 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Reconciliation of Restructuring Liabilities | A reconciliation of the beginning and ending restructuring liabilities, which is included in accrued wages and benefits and accounts payable in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, is as follows: Three Months Ended (In thousands) March 31, 2024 Balance at beginning of period $ 8,309 Plus: Amounts charged to cost and expense 13,118 Less: Amounts paid ( 11,075 ) Balance as of March 31, 2024 $ 10,352 For the Year Ended (In thousands) December 31, 2023 Balance as of December 31, 2022 $ 159 Plus: Amounts charged to cost and expense 22,241 Less: Amounts paid ( 14,091 ) Balance as of December 31, 2023 $ 8,309 |
Schedule of Components of Restructuring Expenses | Restructuring expenses included in the Condensed Consolidated Statements of Loss are for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, (In thousands) 2024 2023 Network Solutions - Cost of revenue $ 2,318 $ 58 Network Solutions - inventory write-down 8,782 — Services & Support - Cost of revenue 148 18 Cost of revenue $ 11,248 $ 76 Selling, general and administrative expenses 1,801 2,180 Research and development expenses 4,061 181 Total restructuring expenses $ 17,110 $ 2,437 The following table represents the components of restructuring expenses by geographic area for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, (In thousands) 2024 2023 United States $ 15,060 $ 1,119 International 2,050 1,318 Total restructuring expenses $ 17,110 $ 2,437 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) € in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2024 USD ($) shares | Mar. 31, 2024 EUR (€) shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2023 EUR (€) shares | Dec. 31, 2023 USD ($) | Mar. 31, 2024 EUR (€) | Oct. 18, 2022 shares | Jul. 18, 2022 USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Percentage of guaranteed interest rate | 5% | 5% | ||||||
Percentage of guaranteed interest rate plus a variable component | 3.62% | 3.62% | ||||||
Aggregate exit compensation payments obligation including guaranteed interest | $ 365,700 | € 338,900 | ||||||
Expire date of exit compensation | Mar. 16, 2023 | Mar. 16, 2023 | ||||||
Annual recurring compensation obligation | $ 11,500 | € 10,600 | $ 11,500 | |||||
Accrued annual recurring compensation obligation | $ 2,900 | $ 2,800 | 11,500 | |||||
Number of shares tendered | shares | 1,000 | 1,000 | 62,000 | 62,000 | ||||
Exit compensation payments | $ 5 | € 4 | $ 1,200 | € 1,100 | ||||
Cash and cash equivalents | $ 106,757 | $ 87,167 | ||||||
Wells Fargo Credit Agreement [Member] | ||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Covenant relief period, description | the period beginning upon the purchase by the Company of at least 60% of the outstanding shares of Adtran Networks not owned by the Company as of August 9, 2023 and the three consecutive quarterly test periods after such date | the period beginning upon the purchase by the Company of at least 60% of the outstanding shares of Adtran Networks not owned by the Company as of August 9, 2023 and the three consecutive quarterly test periods after such date | ||||||
Wells Fargo Credit Agreement [Member] | Credit Parties [Member] | ||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Cash and cash equivalents | $ 50,000 | |||||||
Wells Fargo Credit Agreement [Member] | Company and Subsidiaries [Member] | ||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Cash and cash equivalents | $ 75,000 | |||||||
Wells Fargo Credit Agreement [Member] | Acorn HoldCo, Inc., [Member] | ||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Available for future borrowings | $ 203,000 | |||||||
Credit agreement current borrowing capacity | 22,700 | |||||||
Adtran Networks [Member] | ||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Number of shares tendered | shares | 62,000 | 62,000 | ||||||
Exit compensation payments | $ 5 | € 4 | $ 1,200 | € 1,100 | ||||
Equity ownership percentage | 34.70% | 34.70% | 34.70% | |||||
Adtran Networks [Member] | Maximum [Member] | ||||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||||
Number of additional shares authorized to purchase | shares | 15,346,544 | |||||||
Number of shares tendered | shares | 1,000 | 1,000 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 USD ($) Category | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 19, 2023 USD ($) | |
Revenue [Line Items] | |||||
Number of categories | Category | 3 | ||||
Accounts receivable, allowance for credit losses | $ 367,000 | $ 400,000 | |||
Allowance for credit losses related to contract assets | 0 | $ 0 | |||
Recognized revenue | 19,700,000 | 25,600,000 | $ 60,400,000 | ||
Factor [Member] | Purchase Agreement [Member] | Interest expense [Member] | |||||
Revenue [Line Items] | |||||
Cost of receivables | $ 300,000 | ||||
Factor [Member] | Purchase Agreement [Member] | Other Assets [Member] | |||||
Revenue [Line Items] | |||||
Accounts receivable gross | 0 | ||||
New Factor [Member] | Purchase Agreement [Member] | |||||
Revenue [Line Items] | |||||
Secured revolving credit facility amount | $ 40,000,000 | ||||
Secured borrowings current borrowing capacity | 12,600,000 | 14,300,000 | |||
Secured borrowings, available for future borrowings | 27,200,000 | 25,400,000 | |||
Secured borrowings, account receivable pledged as collateral | 16,400,000 | 16,800,000 | |||
Secured borrowings, fee expense incurred | $ 300,000 | ||||
Program fee rate percent for receivables | 6.88% | ||||
Contractual Maintenance Agreements, Contractual SaaS and Subscription Services and Hardware Orders [Member] | |||||
Revenue [Line Items] | |||||
Remaining performance obligations | $ 346,900,000 | $ 314,800,000 |
Revenue - Additional Informat_2
Revenue - Additional Information (Detail1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-04-01 | Mar. 31, 2024 |
Revenue [Line Items] | |
Remaining performance obligations, percentage | 61% |
Remaining performance obligations, period | 12 months |
Revenue - Disaggregate of Reven
Revenue - Disaggregate of Revenue by Reportable Segment and Revenue Category (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 226,173 | $ 323,912 |
Subscriber Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 69,767 | 79,336 |
Access & Aggregation Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 81,312 | 96,820 |
Optical Networking Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 75,094 | 147,756 |
Network Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 181,273 | 282,418 |
Network Solutions [Member] | Subscriber Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 60,369 | 70,287 |
Network Solutions [Member] | Access & Aggregation Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 67,777 | 84,554 |
Network Solutions [Member] | Optical Networking Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 53,127 | 127,577 |
Services & Support [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 44,900 | 41,494 |
Services & Support [Member] | Subscriber Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 9,399 | 9,049 |
Services & Support [Member] | Access & Aggregation Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 13,535 | 12,266 |
Services & Support [Member] | Optical Networking Solutions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 21,966 | $ 20,179 |
Revenue - Information about Rec
Revenue - Information about Receivable, Contract Assets, and Unearned Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 187,554 | $ 216,445 | |
Contract assets | [1] | 815 | 691 |
Unearned revenue | 55,124 | 46,731 | |
Non-current unearned revenue | $ 22,884 | $ 25,109 | |
[1] Included in other receivables on the Condensed Consolidated Balance Sheets. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Line Items] | ||
Effective tax rate expense (benefit) | (5.50%) | (21.90%) |
Deferred tax assets | $ 96.5 | |
Valuation allowance established against deferred tax assets | $ 86.5 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense Related to Stock Options, PSUs, RSUs and Restricted Stock (Detail) shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, beginning balance | shares | 1,942 |
Number of Shares, PSUs, RSUs and restricted stock granted | shares | 966 |
Number of Shares, PSUs, RSUs and restricted stock vested | shares | (102) |
Number of Shares, PSUs, RSUs and restricted stock forfeited | shares | (32) |
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, ending balance | shares | 2,774 |
Weighted Avg. Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Beginning Balance | $ / shares | $ 17.46 |
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock granted | $ / shares | 7.22 |
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock vested | $ / shares | 18.47 |
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock forfeited | $ / shares | 17.36 |
Weighted Avg. Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Ending Balance | $ / shares | $ 13.79 |
Stock-Based Compensation (PSUs,
Stock-Based Compensation (PSUs, RSUs and Restricted Stock) - Additional Information (Detail) shares in Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Options available for issuance under stockholders-approved equity plan | shares | 0.5 |
Market-Based PSUs, RSUs and Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense related to other than options | $ 19.4 |
Recognition period of unvested compensation expense | 1 year 9 months 18 days |
Performance Stock Units (PSUs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense related to stock options | $ 10.2 |
Recognition period of unvested compensation expense | 1 year 9 months 18 days |
Time-Based RSUs [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense related to stock options | $ 6.6 |
Recognition period of unvested compensation expense | 1 year 7 months 6 days |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Outstanding (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of Stock Options, Stock options outstanding, Beginning Balance | 3,894 | |
Number of Stock Options, Stock options exercised | (36) | |
Number of Stock Options, Stock options forfeited | (58) | |
Number of Stock Options, Stock options expired | (178) | |
Number of Stock Options, Stock options outstanding, Ending Balance | 3,622 | 3,894 |
Number of Stock Options, Stock options exercisable | 1,264 | |
Weighted Avg. Exercise Price, Stock options outstanding, Beginning Balance | $ 10.32 | |
Weighted Avg. Exercise Price, Stock options exercised | 6.06 | |
Weighted Avg. Exercise Price, Stock options forfeited | 6.68 | |
Weighted Avg. Exercise Price, Stock options expired | 7.89 | |
Weighted Avg. Exercise Price, Stock options outstanding, Ending Balance | 10.54 | $ 10.32 |
Weighted Avg. Exercise Price, Stock options exercisable | $ 13.3 | |
Weighted Avg. Remaining Contractual Life In Years, Stock options outstanding | 5 years 2 months 4 days | 5 years 3 months |
Weighted Avg. Remaining Contractual Life in Years, Stock options exercisable | 1 year 5 months 4 days | |
Aggregate Intrinsic Value, Stock options outstanding | $ 268 | $ 3,087 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options) - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 4,000,000 | $ 2,600,000 | |
Aggregate intrinsic value based on fair market value | 268,000 | $ 3,087,000 | |
Total pre-tax intrinsic value of options exercised | 34,000 | 43,000 | |
Stoct option vested | $ 0 | $ 0 |
Investments - Gross Realized Ga
Investments - Gross Realized Gains and Losses on Sale of Debt Securities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Gross realized gain on debt securities | $ 4 |
Gross realized loss on debt securities | (11) |
Total loss recognized, net | $ (7) |
Investments - Additional Inform
Investments - Additional Information (Detail) | Mar. 31, 2024 USD ($) |
Schedule of Investments [Line Items] | |
Available-for-sale debt securities | $ 0 |
Other investments | $ 0 |
Investments - Realized and Unre
Investments - Realized and Unrealized Gains and Losses related to Marketable Equity Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||
Realized gain on equity securities sold | $ 123 | $ 13 |
Unrealized gain on equity securities held | 2,130 | 1,246 |
Total gain recognized, net | $ 2,253 | $ 1,259 |
Investments - Cash Equivalents
Investments - Cash Equivalents and Investments held at Fair Value (Detail) - Fair Value, Measurements [Member] - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Available-for-sale Securities [Line Items] | ||
Total | $ 34,627 | $ 33,045 |
Quoted Prices in Active Market for Identical Assets (Level 1) [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total | 34,627 | 33,045 |
Money Market Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash equivalents | 5,375 | 5,302 |
Money Market Funds [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash equivalents | 5,375 | 5,302 |
Marketable Equity Securities - Various Industries [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable equity securities | 987 | 905 |
Marketable Equity Securities - Various Industries [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable equity securities | 987 | 905 |
Deferred Compensation Plan Assets [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable equity securities | 28,265 | 26,838 |
Deferred Compensation Plan Assets [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable equity securities | $ 28,265 | $ 26,838 |
Inventory - Components of Inven
Inventory - Components of Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 130,977 | $ 152,140 |
Work in process | 14,856 | 17,239 |
Finished goods | 176,314 | 192,916 |
Total Inventory, net | $ 322,147 | $ 362,295 |
Inventory - Additional Informat
Inventory - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Inventory [Line Items] | ||
Inventory write down | $ 3,992 | $ 0 |
Business Efficiency Program | ||
Inventory [Line Items] | ||
Strategy shift charges | 8,800 | |
Inventory write down | 4,000 | |
Other charges | $ 4,800 |
Property, Plant and Equipment -
Property, Plant and Equipment - Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Abstract] | ||
Engineering and other equipment | $ 184,330 | $ 183,336 |
Building | 79,159 | 79,215 |
Computer hardware and software | 111,354 | 101,572 |
Building and land improvements | 57,491 | 58,238 |
Furniture and fixtures | 21,536 | 21,368 |
Land | 5,227 | 5,242 |
Total property, plant and equipment | 459,097 | 448,971 |
Less: accumulated depreciation | (332,128) | (325,951) |
Total property, plant and equipment, net | $ 126,969 | $ 123,020 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 7.2 | $ 7.6 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | $ 353,415 |
Goodwill impairment | (290,528) |
Foreign currency translation adjustments | (7,758) |
Goodwill, Ending balance | 55,129 |
Network Solutions [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 297,031 |
Goodwill impairment | (290,528) |
Foreign currency translation adjustments | (6,503) |
Goodwill, Ending balance | 0 |
Services & Support [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 56,384 |
Foreign currency translation adjustments | (1,255) |
Goodwill, Ending balance | $ 55,129 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Sep. 30, 2023 | Mar. 31, 2023 | |
Goodwill [Line Items] | |||
Impairment charges related to goodwill | $ 292,583,000 | $ 0 | |
Accumulated goodwill impairment losses | 330,500,000 | ||
Network Solutions [Member] | |||
Goodwill [Line Items] | |||
Impairment charges related to goodwill | 292,600,000 | ||
Services & Support [Member] | |||
Goodwill [Line Items] | |||
Impairment charges related to goodwill | $ 0 | $ 37,900,000 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 466,520 | $ 477,765 |
Accumulated Amortization | (160,072) | (149,780) |
Net Book Value | $ 306,448 | 327,985 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 10 years 10 months 24 days | |
Gross Carrying Amount | $ 52,754 | 54,856 |
Accumulated Amortization | (15,725) | (15,943) |
Net Book Value | $ 37,029 | 38,913 |
Backlog [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 1 year 7 months 6 days | |
Gross Carrying Amount | $ 56,106 | 57,391 |
Accumulated Amortization | (51,712) | (52,022) |
Net Book Value | $ 4,394 | 5,369 |
Developed Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 8 years 6 months | |
Gross Carrying Amount | $ 322,176 | 329,369 |
Accumulated Amortization | (69,549) | (61,271) |
Net Book Value | $ 252,627 | 268,098 |
Licensed Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 9 years | |
Gross Carrying Amount | $ 5,900 | 5,900 |
Accumulated Amortization | (3,961) | (3,797) |
Net Book Value | $ 1,939 | 2,103 |
Licensing Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 8 years 6 months | |
Gross Carrying Amount | $ 560 | 560 |
Accumulated Amortization | (378) | (368) |
Net Book Value | $ 182 | 192 |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 29,024 | 29,689 |
Accumulated Amortization | (18,747) | (16,379) |
Net Book Value | $ 10,277 | $ 13,310 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment losses of intangible assets | $ 0 | $ 0 |
Amortization expense | $ 14,600,000 | $ 25,800,000 |
Services & Support [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage of gross margins | 58% |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2024 | $ 43,396 | |
2025 | 46,346 | |
2026 | 43,089 | |
2027 | 41,725 | |
2028 | 41,578 | |
Thereafter | 90,314 | |
Net Book Value | $ 306,448 | $ 327,985 |
Hedging - Additional Informatio
Hedging - Additional Information (Detail) € in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 EUR (€) ForwardContracts | Mar. 21, 2023 EUR (€) | Mar. 21, 2023 USD ($) | |
Foreign Exchange Forward [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of forward rate contracts outstanding | ForwardContracts | 45 | ||
Cross-Currency Swap Arrangement [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Aggregate notional amount | € 160 | € 160 | |
Forward contract tranche settled on hedge | 20 | ||
Aggregate notional amount, daily fixed forward conversion rate | 1 | 1 | |
Cross-Currency Swap Arrangement [Member] | Eight Quarterly Tranches [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Aggregate notional amount | 20 | ||
Cross-Currency Swap Arrangement [Member] | Three Quarterly Tranches [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Aggregate notional amount | € 20 | $ 20 | |
Cross-Currency Swap Arrangement [Member] | Minimum [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Aggregate notional amount, daily fixed forward conversion rate | 1.01 | 1.09 | 1.09 |
Cross-Currency Swap Arrangement [Member] | Maximum [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Aggregate notional amount, daily fixed forward conversion rate | 1.03 | 1.1 | 1.1 |
Hedging - Schedule of Fair Valu
Hedging - Schedule of Fair Values of Derivative Instruments (Detail) - Derivatives Not Designated as Hedging Instruments [Member] - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Other income (expense), net | |||
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |||
Foreign exchange contracts | $ 766 | $ (69) | |
Level 2 [Member] | |||
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |||
Total derivatives | 4,072 | $ 4,848 | |
Level 2 [Member] | Other Receivables [Member] | |||
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |||
Foreign exchange contracts - derivative assets | 4,088 | 7,125 | |
Level 2 [Member] | Accounts Payable [Member] | |||
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |||
Foreign exchange contracts - derivative liabilities | $ (16) | $ (2,277) |
Revolving Credit Agreements - C
Revolving Credit Agreements - Carrying Amount of Non-Current Revolving Agreements (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Total non-current revolving credit agreement | $ 195,000 | $ 195,000 |
Wells Fargo Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Total non-current revolving credit agreement | $ 195,000 | $ 195,000 |
Revolving Credit Agreements - A
Revolving Credit Agreements - Additional Information (Detail) | 3 Months Ended | |||||
Jun. 30, 2025 USD ($) | Dec. 31, 2024 USD ($) | Aug. 09, 2023 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Jul. 18, 2022 USD ($) | |
Line Of Credit Facility [Line Items] | ||||||
Weighted average interest rate | 8.46% | |||||
Revolving line of credit | $ 195,000,000 | $ 195,000,000 | ||||
Debt instrument default interest rate percentage | 2% | |||||
Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Credit facility, floor rate | 0% | |||||
Applicable margin rate | 3.15% | |||||
Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 2.15% | |||||
EURIBOR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Credit facility, floor rate | 0% | |||||
Applicable margin rate | 3.25% | |||||
Maximum [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 2.65% | |||||
Maximum [Member] | Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1.65% | |||||
Maximum [Member] | EURIBOR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 2.75% | |||||
Minimum [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1.65% | |||||
Minimum [Member] | Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 0.65% | |||||
Minimum [Member] | EURIBOR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1.75% | |||||
DDTL Interest Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Debt instrument default interest rate percentage | 2% | |||||
Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Revolving line of credit | $ 195,000,000 | $ 195,000,000 | ||||
Commitment fee percentage | 0.25% | |||||
Wells Fargo Credit Agreement [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 0.10% | |||||
Wells Fargo Credit Agreement [Member] | Maximum [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.25% | |||||
Net leverage ratio | 0.05 | 0.05 | ||||
Fixed charge coverage ratio | 0.0125 | 0.0125 | ||||
Wells Fargo Credit Agreement [Member] | Minimum [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.20% | |||||
Wells Fargo Credit Agreement [Member] | Federal Reserve Bank Advances [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1% | |||||
Wells Fargo Credit Agreement [Member] | Federal Reserve Bank Advances [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1% | |||||
Wells Fargo Credit Agreement [Member] | Federal Reserve Bank Advances [Member] | Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.25% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 3.40% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 2.40% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | Maximum [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 2.90% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | Maximum [Member] | Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1.90% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | Minimum [Member] | Daily Simple SOFR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1.90% | |||||
Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | Minimum [Member] | Base Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 0.90% | |||||
Wells Fargo Credit Agreement Amendment [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Secured revolving credit facility amount | $ 50,000,000 | |||||
Percentage available for borrowing | 60% | |||||
Aggregate principal amount | $ 172,500,000 | |||||
Wells Fargo Credit Agreement Amendment [Member] | Maximum [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Revolving line of credit | $ 300,000,000 | |||||
Credit agreement current borrowing capacity | 400,000,000 | |||||
Wells Fargo Credit Agreement Amendment [Member] | Minimum [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Aggregate principal amount | 75,000,000 | |||||
Net leverage ratio | 0.035 | |||||
Wells Fargo Credit Agreement Amendment [Member] | Delayed Draw Term Loan [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Revolving line of credit | $ 50,000,000 | 50,000,000 | $ 50,000,000 | |||
Percentage available for borrowing | 60% | |||||
Wells Fargo Credit Agreement Amendment [Member] | DDTL Interest Rate [Member] | Maximum [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Revolving line of credit | 300,000,000 | |||||
Wells Fargo Credit Agreement Amendment [Member] | DDTL Interest Rate [Member] | Minimum [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Aggregate principal amount | 75,000,000 | |||||
Acorn HoldCo, Inc., [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Secured revolving credit facility amount | 400,000,000 | $ 400,000,000 | ||||
Revolving line of credit | 195,000,000 | |||||
Credit facility, average outstanding amount | 2,000,000 | |||||
Letters of credit may be issued | 50,000,000 | |||||
Available for future borrowings | 203,000,000 | |||||
Credit agreement current borrowing capacity | $ 22,700,000 | |||||
Scenario Forecast [Member] | EURIBOR [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1% | 1% | ||||
Scenario Forecast [Member] | DDTL Interest Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Applicable margin rate | 1% | 1% | ||||
Scenario Forecast [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Secured revolving credit facility amount | $ 300,000,000 | $ 340,000,000 | ||||
Scenario Forecast [Member] | Wells Fargo Credit Agreement [Member] | DDTL Interest Rate [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Secured revolving credit facility amount | $ 300,000,000 | $ 340,000,000 | ||||
First Quarter Ending Springing Covenant Period [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Net leverage ratio | 0.04 | |||||
Second Quarter Ending Springing Covenant Event [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Net leverage ratio | 0.0375 | |||||
Third and Fourth Quarters Ending Springing Covenant Event [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Net leverage ratio | 0.035 | |||||
From December 31, 2023 Through and Including March 31, 2024 [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Net leverage ratio | 0.0325 | |||||
From April 1, 2024 Through and Including June 30, 2024 [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Net leverage ratio | 0.035 | |||||
From July 1, 2024 and Thereafter [Member] | Wells Fargo Credit Agreement [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Net leverage ratio | 0.0325 |
Revolving Credit Agreements -_2
Revolving Credit Agreements - Additional Information (Detail1) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Cash and cash equivalents | $ 106,757 | $ 87,167 |
Wells Fargo Credit Agreement Amendment [Member] | Credit Parties [Member] | ||
Line of Credit Facility [Line Items] | ||
Cash and cash equivalents | 50,000 | 50,000 |
Wells Fargo Credit Agreement Amendment [Member] | Company and Subsidiaries [Member] | ||
Line of Credit Facility [Line Items] | ||
Cash and cash equivalents | $ 75,000 | $ 75,000 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Non-current pension liability | $ 11,692 | $ 12,543 | |
Current pension liability | 100 | $ 100 | |
Contributions to defined benefit pension plans | 1,200 | $ 1,000 | |
Defined benefit pension plans for the remainder of fiscal year | $ 3,500 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of the Components of Net Periodic Pension Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 340 | $ 398 |
Interest cost | $ 285 | $ (32) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Expected return on plan assets | $ (360) | $ 58 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Amortization of actuarial losses | $ 2 | $ 6 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Net periodic benefit cost | $ 267 | $ 430 |
Equity - Changes in Accumulated
Equity - Changes in Accumulated Other Comprehensive Income, Net of Tax, by Component (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | $ 593,822 | $ 1,303,613 |
Other comprehensive (loss) income before reclassifications | (17,864) | 8,761 |
Amounts reclassified from accumulated other comprehensive income (loss) | 59 | 21 |
Net current period other comprehensive loss | (17,805) | 8,782 |
Less: Comprehensive income attributable to non-controlling interest, net of tax | 382 | |
Ending Balance | 265,783 | 820,162 |
ASU 2018-02 [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 385 | 385 |
Ending Balance | 385 | 385 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 47,461 | 26,126 |
Ending Balance | 29,656 | 34,526 |
Unrealized (Losses) Gains on Available-for-Sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | (382) | (836) |
Other comprehensive (loss) income before reclassifications | (119) | 83 |
Amounts reclassified from accumulated other comprehensive income (loss) | 119 | (14) |
Net current period other comprehensive loss | 69 | |
Ending Balance | (382) | (767) |
Defined Benefit Plan Adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | (2,506) | (1,016) |
Amounts reclassified from accumulated other comprehensive income (loss) | (60) | 35 |
Net current period other comprehensive loss | (60) | 35 |
Ending Balance | (2,566) | (981) |
Foreign Currency Adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 49,964 | 27,593 |
Other comprehensive (loss) income before reclassifications | (17,745) | 8,678 |
Net current period other comprehensive loss | (17,745) | 8,678 |
Less: Comprehensive income attributable to non-controlling interest, net of tax | 382 | |
Ending Balance | $ 32,219 | $ 35,889 |
Equity - Reclassifications Out
Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Loss Before Income Taxes | $ (340,317) | $ (51,766) |
Tax benefit | 18,647 | 11,313 |
Net Loss attributable to ADTRAN Holdings, Inc. | (324,550) | (40,083) |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Defined benefit plan adjustments - actuarial gain (loss) | 87 | (51) |
Loss Before Income Taxes | (74) | (33) |
Tax benefit | 15 | 12 |
Net Loss attributable to ADTRAN Holdings, Inc. | (59) | (21) |
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized (Losses) Gains on Available-for-Sale Securities [Member] | ||
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net realized gain (loss) on sales of securities | $ (161) | $ 18 |
Equity - Tax Effects Related to
Equity - Tax Effects Related to the Change in Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Equity [Abstract] | ||
Unrealized (loss) gain on available-for-sale securities, Before-Tax Amount | $ (161) | $ 109 |
Unrealized (loss) gain on available-for-sale securities, Tax (Expense) Benefit | 42 | (26) |
Unrealized (loss) gain on available-for-sale securities, Net-of-Tax Amount | (119) | 83 |
Reclassification adjustment for amounts related to available-for-sale investments included in net gain (loss), Before-Tax Amount | 161 | (18) |
Reclassification adjustment for amounts related to available-for-sale investments included in net gain (loss), Tax (Expense) Benefit | (42) | 4 |
Reclassification adjustment for amounts related to available-for-sale investments included in net gain (loss), Net-of-Tax Amount | 119 | (14) |
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net (loss) gain, Before-Tax Amount | (87) | 51 |
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net (loss) gain, Tax (Expense) Benefit | 27 | (16) |
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net (loss) gain, Net-of-Tax Amount | (60) | 35 |
Foreign currency translation adjustment, Before-Tax Amount | (17,745) | 8,678 |
Foreign currency translation adjustment, Net-of-Tax Amount | (17,745) | 8,678 |
Total Other Comprehensive (Loss) Income, Before-Tax Amount | (17,832) | 8,820 |
Total Other Comprehensive (Loss) Income, Tax (Expense) Benefit | 27 | (38) |
Other Comprehensive (Loss) Income, net of tax | $ (17,805) | $ 8,782 |
Redeemable Non-controlling In_3
Redeemable Non-controlling Interest - Summary of Redeemable Non-controlling Interest Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Redeemable Noncontrolling Interest [Line Items] | ||
Balance at beginning of period | $ 451,756 | |
Reclassification of non-controlling interests | $ 443,757 | |
Fair value on redemption of redeemable non-controlling interest | (6) | (1,657) |
Net income attributable to redeemable non-controlling interests | 2,880 | 11,525 |
Annual recurring compensation earned | (2,880) | (11,525) |
Translation adjustment | (10,115) | 9,604 |
Balance at end of period | $ 441,635 | 451,756 |
Adtran Networks [Member] | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Stock option exercises | $ 52 |
Redeemable Non-controlling In_4
Redeemable Non-controlling Interest - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Redeemable Noncontrolling Interest [Line Items] | ||
Annual dividend recognized to redeemable non-controlling shareholders | $ 2.9 | $ 11.5 |
Adtran Networks [Member] | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Equity ownership percentage | 34.70% | 34.70% |
Loss Per Share - Summary of Cal
Loss Per Share - Summary of Calculation of Basic and Diluted Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator | ||
Net Loss attributable to ADTRAN Holdings, Inc. | $ (324,550) | $ (40,083) |
Denominator | ||
Weighted average number of shares – basic | 78,814 | 78,358 |
Effect of dilutive securities | ||
Weighted average number of shares – diluted | 78,814 | 78,358 |
Loss per share attributable to ADTRAN Holdings, Inc. - basic | $ (4.12) | $ (0.51) |
Loss per share attributable to ADTRAN Holdings, Inc. - diluted | $ (4.12) | $ (0.51) |
Loss Per Share - Additional Inf
Loss Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive effect excluded calculation of diluted earnings per share | 3.5 | 0.4 |
Unvested Stock Options, PSUs, RSUs and Restricted Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive effect excluded calculation of diluted earnings per share | 1.1 | 0.1 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Segment | Mar. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | Segment | 2 | |
Depreciation expense | $ 7,200 | $ 7,600 |
Network Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | 1,600 | 1,500 |
Services & Support [Member] | ||
Segment Reporting Information [Line Items] | ||
Depreciation expense | $ 8 | $ 2 |
Segment Information - Revenue a
Segment Information - Revenue and Gross Profit of Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 226,173 | $ 323,912 |
Gross Profit | 72,255 | 87,808 |
Network Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 181,273 | 282,418 |
Gross Profit | 46,165 | 63,288 |
Services & Support [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 44,900 | 41,494 |
Gross Profit | $ 26,090 | $ 24,520 |
Segment Information - Revenue I
Segment Information - Revenue Information by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 226,173 | $ 323,912 |
United States [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 83,290 | 131,466 |
Germany [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 39,741 | 76,286 |
United Kingdom [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 52,740 | 57,397 |
Other International [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 50,402 | $ 58,763 |
Liability for Warranty Return_2
Liability for Warranty Returns - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | ||||
Period of assurance-based warranty for product defects | 90 days to five years | |||
Liability for warranty obligations | $ 6,221 | $ 6,445 | $ 7,200 | $ 7,196 |
Liability for Warranty Return_3
Liability for Warranty Returns - Summary of Warranty Expense and Write-off Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Product Warranties Disclosures [Abstract] | ||
Balance at beginning of period | $ 6,445 | $ 7,196 |
Plus: Amounts charged to cost and expenses | 646 | 1,077 |
Plus: Foreign currency translation adjustments | (54) | 26 |
Less: Deductions | (816) | (1,099) |
Balance at end of period | $ 6,221 | $ 7,200 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) € in Thousands, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2024 EUR (€) shares | Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 EUR (€) shares | Mar. 31, 2023 USD ($) shares | Dec. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Aggregate exit compensation payments obligation including guaranteed interest | € 338,900 | $ 365,700 | ||||
Number of shares tendered | shares | 1 | 1 | 62 | 62 | ||
Exit compensation payments | € 4 | $ 5 | € 1,100 | $ 1,200 | ||
Percentage of guaranteed interest rate | 5% | 5% | ||||
Percentage of guaranteed interest rate plus a variable component | 3.62% | 3.62% | ||||
Expire date of exit compensation | Mar. 16, 2023 | Mar. 16, 2023 | ||||
Annual recurring compensation obligation | € 10,600 | $ 11,500 | $ 11,500 | |||
Accrued annual recurring compensation obligation | $ 2,900 | $ 2,800 | 11,500 | |||
Commitments related to performance bonds | $ 10,800 | $ 10,600 | ||||
Commitments related to performance bonds expiration month and year | 2031-04 | 2031-04 | ||||
Purchase obligations | $ 238,000 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Nov. 06, 2023 | May 10, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Oct. 25, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||||
Reduction of workforce and hiring freeze | 5% | ||||
Inventory write down | $ 3,992 | $ 0 | |||
Restructuring Costs | $ 42,200 | 17,100 | |||
Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected costs in first quarter 2024 | 35,800 | ||||
Severance costs | 28,300 | ||||
Site consolidation transaction expenses | 7,500 | ||||
Maximum [Member] | Subsequent Event [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs | $ 29,100 | ||||
Site consolidation transaction expenses | 7,300 | ||||
Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected costs in first quarter 2024 | 20,600 | ||||
Severance costs | 17,300 | ||||
Site consolidation transaction expenses | $ 3,300 | ||||
Minimum [Member] | Subsequent Event [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs | 18,100 | ||||
Site consolidation transaction expenses | $ 3,100 | ||||
Multi-Year Integration Program and Synergy Realization [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs related to Business Combination | $ 2,400 | ||||
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Goods and Services Sold, Research and Development Expense, Selling, General and Administrative Expense | ||||
Business Efficiency Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Strategy shift charges | $ 8,800 | ||||
Inventory write down | 4,000 | ||||
Other charges | $ 4,800 |
Restructuring - Schedule of Rec
Restructuring - Schedule of Reconciliation of Restructuring Liability (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | ||
Balance at beginning of period | $ 8,309 | $ 159 |
Plus: Amounts charged to cost and expense | 13,118 | 22,241 |
Less: Amounts paid | (11,075) | (14,091) |
Balance at end of period | $ 10,352 | $ 8,309 |
Restructuring - Schedule of Com
Restructuring - Schedule of Components of Restructuring Expenses Including in Condensed Consolidated Statements of (Loss) Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | $ 17,110 | $ 2,437 |
Cost of Sales [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | 11,248 | 76 |
Cost of Sales [Member] | Network Solutions [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | 2,318 | 58 |
Cost of Sales [Member] | Services & Support [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | 148 | 18 |
Inventory Write Down [Member] | Network Solutions [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | 8,782 | |
Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | 1,801 | 2,180 |
Research and Development Expenses [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | $ 4,061 | $ 181 |
Restructuring - Schedule of C_2
Restructuring - Schedule of Components of Restructuring Expense by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | $ 17,110 | $ 2,437 |
United States [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | 15,060 | 1,119 |
International [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring expenses | $ 2,050 | $ 1,318 |