ADTRAN, Inc. (NASDAQ:ADTN) Q1 2019 Earnings Conference Call Transcript

Apr 18, 2019 • 09:30 am ET

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ADTRAN, Inc. (NASDAQ:ADTN) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to ADTRAN's First Quarter 2019 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period. (Operator Instructions).

During the course of the conference call, ADTRAN representatives expect to make forward-looking statements which reflect management's best judgment based on factors currently known. However, these statements involve risks and uncertainties, including the successful development and market acceptance of core products, the degree of competition in the market for such products, the product and channel mix, component costs, manufacturing efficiencies and other risks detailed in our annual report on Form 10-K for the year ended December 31, 2018. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements which may be made during the call. In addition, ADTRAN will webcast this conference live through our website at www.adtran.com.

It is now my pleasure to turn the call over to Tom Stanton, Chief Executive Officer of ADTRAN. Sir, please go ahead.

Executive
Thomas R. Stanton

Thank you, Priscilla. Good morning, everyone. We appreciate you joining us for our first quarter 2019 conference call. And I'm joined today by ADTRAN's, CFO, Mike Foliano. Following my opening remarks, Mike will review the quarterly financial performance in detail and then we'll take your questions.

We are pleased with our progress in the first quarter of 2019. We executed well towards our goals to meet our financial objectives, strengthen our customer, product and geographic diversification. Ensure seamless integration of our smart RG team and their first full quarter as part of ADTRAN and accelerate customer traction with our fiber, broadband and subscriber experience solutions. From a top line perspective, revenue for the quarter was $143.8 million, up 19% on a year-over-year basis. Network Solutions accounted for the majority, at $125.8 million, a 19.5% increase over the same quarter in 2018. Global Services and Support revenue contributed $18 million or 12.5% of total company revenue for the quarter, this is a 15.5% year-over-year increase.

The timing of key customer infrastructure projects resulted in nearly 50% of our revenue for the quarter, coming from international markets. We finished the quarter with three 10% of revenue customers located in three different markets, LATAM, Europe and North America. Underscoring the impact ADTRAN is having as we help our customers build their best networks.

I'd like to mention a few achievements from Q1 that highlight our focus to help our customers grow revenue, further simplify network operations and accelerate service velocity. A central focus for us over the last few years has been to expand EPON portfolio and Fiber-to-the-Premise customer base. I am pleased with our progress as our Fibre-to-the-Prem product revenue grew more than 52% year-over-year, we now have partnered with well over 300 different operators to roll out EPON to enable residential, business and mobile applications.

We continue to gain momentum in selling software applications that enable service providers to use intelligence within