Aviat Networks, Inc. (NASDAQ: AVNW) reported strong financial results for its second quarter of fiscal 2026, ended December 26, 2025. The wireless transport expert surpassed revenue expectations and achieved its highest second-quarter bookings in over a decade, signaling a robust demand for its specialized networking solutions.
Despite a slight year-over-year revenue dip, the company demonstrated improved profitability and significant cash generation, bolstered by strategic wins in the U.S. Tier 1 operator market.
Key Financial Highlights: Q2 2026
Aviat delivered a solid “beat” on the top line, supported by disciplined cost management and a favorable product mix.
Total Revenue: $111.5 million, exceeding the consensus estimate of $109.67 million.
GAAP Net Income: $5.7 million, or $0.44 per diluted share (a 27.2% increase year-over-year).
Non-GAAP Diluted EPS: $0.54, reflecting strong operational execution.
Adjusted EBITDA: $11.3 million, maintaining steady profitability.
Operating Cash Flow: $23.9 million generated during the quarter, highlighting excellent liquidity.
Gross Margin: Reported at 32.4% (GAAP), with non-GAAP margins at 32.9%.
Strategic Highlights & Bookings
The quarter was defined by record-breaking commercial activity and a breakthrough in the 5G infrastructure space.
Record Bookings: Aviat achieved its highest level of second-quarter bookings in over 10 years, suggesting a healthy pipeline for the second half of fiscal 2026.
Tier 1 Operator Win: The company secured its initial purchase order from a U.S. Tier 1 operator for its multi-dwelling unit (MDU) solution. This deal provides multi-gigabit 5G-based services using high-capacity millimeter-wave spectrum, a key growth area for Aviat.
Acquisition Synergies: Management noted ongoing progress in integrating recent acquisitions (4RF and NEC’s microwave business), which are helping to expand the company’s total addressable market (TAM).
Management Commentary
CEO Pete Smith emphasized the company’s ability to win market share through innovation and localized support.
“We are pleased with our performance in the second quarter, highlighted by record bookings and a return to strong net income growth,” said Pete Smith. “Securing our first MDU order from a U.S. Tier 1 operator is a major milestone. It validates our technology leadership in the millimeter-wave space and opens a significant new revenue stream for the company.”
CFO Andy Schmidt highlighted the company’s financial health, noting that the $23.9 million in quarterly cash flow provides “ample flexibility to continue our disciplined approach to capital allocation and debt management.”
Key Takeaways for Investors
Strong Order Visibility: The decade-high bookings provide a significant cushion for the remainder of 2026, reducing the risk of a revenue shortfall in upcoming quarters.
Tier 1 Momentum: Moving from “trial” to “initial purchase order” with a U.S. Tier 1 operator is a massive de-risking event. Successful deployment here could lead to much larger rollouts.
Profitability Over Volume: While revenue was slightly lower than the prior year, the 27% jump in GAAP net income shows that Aviat is successfully shifting its mix toward higher-margin software and service-heavy contracts.
Resilient Cash Engine: Generating nearly $24 million in cash in a single quarter is exceptional for a company of Aviat’s size, supporting potential future buybacks or strategic M&A.
Conclusion
Aviat Networks has successfully turned the corner on profitability. With a record backlog and a foothold in the Tier 1 5G market, the company is proving that its focused “wireless transport expert” niche is a winning strategy in a crowded hardware landscape.
Aviat Networks’ Q2 2026 results reflect a company in transition, balancing short-term revenue headwinds with long-term demand momentum and improved operational efficiency. Solid profitability growth, robust bookings, and disciplined expense control paint a picture of a business strengthening its core while positioning for growth in wireless transport and next-generation access solutions.
