XML 24 R14.htm IDEA: XBRL DOCUMENT v3.24.0.1
Revenue
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue

Note 3 - 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 and Aggregation, and Optical Networking Solutions.

Services & Support Segment - Includes network design, implementation, maintenance and cloud-hosted services supporting the Company's Subscriber, Access and Aggregation, and Optical Networking Solutions.

Revenue by Category

In addition to operating under two reportable segments, the Company also reports revenue across three categories – Subscriber Solutions, Access & Aggregation Solutions and Optical Networking Solutions.

Prior to the Business Combination with Adtran Networks on July 15, 2022, ADTRAN, Inc. reported revenue across the following three categories: (1) Access & Aggregation, (2) Subscriber Solutions & Experience and (3) Traditional & Other Products. Following the Business Combination with Adtran Networks, we have recast these revenues such that ADTRAN, Inc.'s former Access & Aggregation revenue is combined with a portion of the applicable Adtran Networks solutions to create Access & Aggregation Solutions, ADTRAN’s former Subscriber Solutions & Experience revenue is combined with a portion of the applicable Adtran Networks solutions to create Subscriber Solutions, and the revenue from Traditional & Other products is now included in the applicable Access & Aggregation Solutions or Subscriber Solutions category. Optical Networking Solutions was added as a new revenue category to represent a meaningful portion of Adtran Networks' portfolio.

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 for the year ended December 31, 2023:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

263,192

 

 

$

34,516

 

 

$

297,708

 

Access & Aggregation Solutions

 

 

304,074

 

 

 

54,344

 

 

 

358,418

 

Optical Networking Solutions

 

 

407,123

 

 

 

85,851

 

 

 

492,974

 

Total

 

$

974,389

 

 

$

174,711

 

 

$

1,149,100

 

 

The following table disaggregates revenue by reportable segment and revenue category for the year ended December 31, 2022:

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

364,238

 

 

$

26,216

 

 

$

390,454

 

Access & Aggregation Solutions

 

 

326,934

 

 

 

47,068

 

 

 

374,002

 

Optical Networking Solutions

 

 

225,621

 

 

 

35,459

 

 

 

261,080

 

Total

 

$

916,793

 

 

$

108,743

 

 

$

1,025,536

 

 

The following table disaggregates revenue by reportable segment and revenue category for the year ended December 31, 2021:

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

189,825

 

 

$

16,385

 

 

$

206,210

 

Access & Aggregation Solutions

 

 

309,009

 

 

 

47,785

 

 

 

356,794

 

Optical Networking Solutions

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

498,834

 

 

$

64,170

 

 

$

563,004

 

The aggregate amount of transaction price allocated to remaining performance obligations that have not been satisfied as of December 31, 2023 and December 31, 2022 related to contractual maintenance agreements, contractual SaaS and subscription services, and hardware contracts that exceed one year in duration amounted to $314.8 million and $277.2 million, respectively. As of December 31, 2023, approximately 55% is expected to be recognized over the next 12 months, and the remainder recognized thereafter. The majority of the Company's remaining performance obligations at December 31, 2023 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:

 

(In thousands)

 

December 31, 2023

 

 

December 31, 2022

 

Accounts receivable

 

$

216,445

 

 

$

279,435

 

Contract assets(1)

 

$

691

 

 

$

1,852

 

Unearned revenue

 

$

46,731

 

 

$

41,193

 

Non-current unearned revenue

 

$

25,109

 

 

$

19,239

 

(1) Included in other receivables on the Consolidated Balance Sheets.

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. Total accounts receivables factored as of the end of December 31, 2022, totaled $14.9 million of which $1.2 million was retained pursuant to the Factoring Agreement in the reserve account. 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 Consolidated Statements of Loss and totaled $0.9 million and $0.3 million for the years ended December 31, 2023 and December 31, 2022, respectively.

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 $14.3 million as of December 31, 2023, leaving $25.4 million available for future borrowings. Accounts receivable pledged as collateral related to the secured borrowings were $16.9 million as of December 31, 2023. For the year ended December 31, 2023, the Company incurred program fee expenses of $13 thousand. As of December 31, 2023, the program fee rate was 6.9% percent for receivables denominated in the U.S. dollar and 5.5% for receivables denominated in the Euro.

Of the outstanding unearned revenue balances as of December 31, 2022, $36.2 million was recognized as revenue during the year ended December 31, 2023. Of the outstanding unearned revenue balances as of December 31, 2021, $14.0 million was recognized as revenue during the year ended December 31, 2022.