ADTRAN HOLDINGS, INC., 10-Q filed on 11/9/2022
Quarterly Report
v3.22.2.2
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2022
Nov. 07, 2022
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q3  
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   77,655,939
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 $0.01 per share  
Security Exchange Name NASDAQ  
v3.22.2.2
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Current Assets    
Cash and cash equivalents $ 111,099 $ 56,603
Restricted cash   215
Short-term investments (includes $803 and $350 of available-for-sale securities as of September 30, 2022 and December 31, 2021, respectively, reported at fair value) 803 350
Accounts receivable, less allowance for credit looses of $281 and $0 as of September 30, 2022 and December 31, 2021, respectively 302,401 158,742
Other receivables 14,350 11,228
Inventory, net 416,163 139,891
Prepaid expenses and other current assets 30,739 9,296
Total Current Assets 875,555 376,325
Property, plant and equipment, net 104,577 55,766
Deferred tax assets, net   9,079
Goodwill 357,869 6,968
Intangibles, net 393,575 19,293
Other non-current assets 56,347 30,971
Long-term investments (includes $27,860 and $29,717 of available-for-sale securities as of September 30, 2022 and December 31, 2021, respectively, reported at fair value) 50,131 70,615
Total Assets 1,838,054 569,017
Current Liabilities    
Accounts payable 276,026 102,489
Revolving credit agreements outstanding 84,503  
Notes Payable 29,782  
Unearned revenue 40,993 17,737
Accrued expenses and other liabilities 25,554 13,673
Accrued wages and benefits 41,595 14,900
Income tax payable, net 26,838 6,560
Total Current Liabilities 525,291 155,359
Deferred tax liabilities, net 36,884  
Non-current unearned revenue 18,269 9,271
Pension liability 16,220 11,402
Deferred compensation liability 25,376 31,383
Non-current lease obligations 21,490 3,269
Other non-current liabilities 9,697 1,231
Total Liabilities 653,227 211,915
Commitments and contingencies (see Note 20)
Equity    
Common stock, par value $0.01 per share; 200,000 shares authorized; 77,619 shares issued and outstanding as of September 30, 2022 and 79,652 shares issued and 49,063 shares outstanding as of December 31, 2021 776 797
Additional paid-in capital 883,210 288,946
Accumulated other comprehensive loss (40,288) (11,914)
Retained earnings 31,535 740,820
Treasury stock at cost: 197 and 30,590 shares as of September 30, 2022 and December 31, 2021, respectively (4,083) (661,547)
Non-controlling interest 313,677  
Total Equity 1,184,827 357,102
Total Liabilities and Equity $ 1,838,054 $ 569,017
v3.22.2.2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Short-term investments, available-for-sale securities at fair value $ 803 $ 350
Accounts receivable, allowance for credit losses 218 0
Long-term investments, available-for-sale securities fair value $ 27,860 $ 29,717
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 77,619,000 79,652,000
Common stock, shares outstanding 77,619,000 49,063,000
Treasury stock, shares 197,000 30,590,000
v3.22.2.2
Condensed Consolidated Statements of Loss (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Revenue        
Total Revenue $ 340,709 $ 138,081 $ 667,265 $ 408,846
Cost of Revenue        
Total Cost of Revenue 237,682 90,408 447,416 244,904
Gross Profit 103,027 47,673 219,849 163,942
Selling, general and administrative expenses 74,880 30,972 130,646 89,273
Research and development expenses 59,196 26,759 112,187 82,131
Asset impairments 16,969   16,969  
Operating Loss (48,018) (10,058) (39,953) (7,462)
Interest and dividend income 347 344 768 887
Interest expense (1,303) (6) (1,427) (18)
Net investment (loss) gain (2,691) (63) (10,752) 2,942
Other income, net 2,494 648 2,949 2,673
Loss Before Income Taxes (49,171) (9,135) (48,415) (978)
Income tax benefit (expense) 4,312 (1,292) 4,572 (3,467)
Net Loss (44,859) (10,427) (43,843) (4,445)
Less: Net Loss attributable to non-controlling interest (2,925)   (2,925)  
Net Loss attributable to ADTRAN Holdings, Inc. $ (41,934) $ (10,427) $ (40,918) $ (4,445)
Weighted average shares outstanding – basic 73,036 48,609 57,175 48,470
Weighted average shares outstanding – diluted 73,036 48,609 57,175 48,470
Loss per common share attributable to ADTRAN Holdings, Inc. - basic $ (0.57) $ (0.21) $ (0.72) $ (0.09)
Loss per common share attributable to ADTRAN Holdings, Inc. - diluted $ (0.57) $ (0.21) $ (0.72) $ (0.09)
Network Solutions [Member]        
Revenue        
Total Revenue $ 304,940 $ 120,767 $ 599,306 $ 360,025
Cost of Revenue        
Total Cost of Revenue 222,606 81,029 413,180 216,044
Gross Profit 82,334 39,738 186,126 143,981
Services & Support [Member]        
Revenue        
Total Revenue 35,769 17,314 67,959 48,821
Cost of Revenue        
Total Cost of Revenue 15,076 9,379 34,236 28,860
Gross Profit $ 20,693 $ 7,935 $ 33,723 $ 19,961
v3.22.2.2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Statement of Comprehensive Income [Abstract]        
Net Loss $ (44,859) $ (10,427) $ (43,843) $ (4,445)
Other Comprehensive Loss, net of tax        
Net unrealized loss on available-for-sale securities (396) (61) (1,320) (348)
Defined benefit plan adjustments 118 124 (218) 435
Foreign currency translation loss (23,172) (1,389) (26,930) (2,914)
Other Comprehensive Loss, net of tax (23,686) (1,326) (28,468) (2,827)
Less: Comprehensive Loss attributable to non-controlling interest, net of tax (94)   (94)  
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax $ (68,451) $ (11,753) $ (72,217) $ (7,272)
v3.22.2.2
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Total
ADVA Optical Networking SE, [Member]
Common Stock [Member]
Common Stock [Member]
ADVA Optical Networking SE, [Member]
Additional Paid-In Capital [Member]
Additional Paid-In Capital [Member]
ADVA Optical Networking SE, [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Accumulated Other Comprehensive Loss [Member]
Non-controlling Interest [Member]
Non-controlling Interest [Member]
ADVA Optical Networking SE, [Member]
Beginning Balance at Dec. 31, 2020 $ 372,944   $ 797   $ 281,466   $ 781,813 $ (679,493) $ (11,639)    
Beginning Balance, Shares at Dec. 31, 2020     79,652                
Net income (loss) 896           896        
Other comprehensive income (loss), net of tax (1,956)               (1,956)    
Dividend payments ($0.09 per share) (4,361)           (4,361)        
Dividends accrued on unvested RSUs (68)           (68)        
Deferred compensation adjustments, net of tax (50)             (50)      
PSUs, RSUs and restricted stock vested (81)           (1,683) 1,602      
Stock options exercised 1,244           (476) 1,720      
Stock-based compensation expense 1,807       1,807            
Ending Balance at Mar. 31, 2021 370,375   $ 797   283,273   776,121 (676,221) (13,595)    
Ending Balance, Shares at Mar. 31, 2021     79,652                
Beginning Balance at Dec. 31, 2020 372,944   $ 797   281,466   781,813 (679,493) (11,639)    
Beginning Balance, Shares at Dec. 31, 2020     79,652                
Net income (loss) (4,445)                    
Other comprehensive income (loss), net of tax (2,827)                    
Ending Balance at Sep. 30, 2021 363,753   $ 797   286,923   760,398 (669,899) (14,466)    
Ending Balance, Shares at Sep. 30, 2021     79,652                
Beginning Balance at Mar. 31, 2021 370,375   $ 797   283,273   776,121 (676,221) (13,595)    
Beginning Balance, Shares at Mar. 31, 2021     79,652                
Net income (loss) 5,086           5,086        
Other comprehensive income (loss), net of tax 455               455    
Dividend payments ($0.09 per share) (4,374)           (4,374)        
Dividends accrued on unvested RSUs (128)           (128)        
Deferred compensation adjustments, net of tax (12)             (12)      
PSUs, RSUs and restricted stock vested (3)           (32) 29      
Stock options exercised 2,308           (619) 2,927      
Stock-based compensation expense 1,808       1,808            
Ending Balance at Jun. 30, 2021 375,515   $ 797   285,081   776,054 (673,277) (13,140)    
Ending Balance, Shares at Jun. 30, 2021     79,652                
Net income (loss) (10,427)           (10,427)        
Other comprehensive income (loss), net of tax (1,326)               (1,326)    
Dividend payments ($0.09 per share) (4,389)           (4,389)        
Dividends accrued on unvested RSUs 2           2        
Deferred compensation adjustments, net of tax (12)             (12)      
PSUs, RSUs and restricted stock vested (11)           (185) 174      
Stock options exercised 2,559           (657) 3,216      
Stock-based compensation expense 1,842       1,842            
Ending Balance at Sep. 30, 2021 363,753   $ 797   286,923   760,398 (669,899) (14,466)    
Ending Balance, Shares at Sep. 30, 2021     79,652                
Beginning Balance at Dec. 31, 2021 $ 357,102   $ 797   288,946   740,820 (661,547) (11,914)    
Beginning Balance, Shares at Dec. 31, 2021 79,652   79,652                
Net income (loss) $ (1,127)           (1,127)        
Other comprehensive income (loss), net of tax (1,642)               (1,642)    
Dividend payments ($0.09 per share) (4,438)           (4,438)        
Dividends accrued on unvested RSUs 32           32        
Deferred compensation adjustments, net of tax (18)             (18)      
PSUs, RSUs and restricted stock vested (54)           (895) 841      
Stock options exercised 568           (143) 711      
Stock-based compensation expense 1,893       1,893            
Ending Balance at Mar. 31, 2022 352,316   $ 797   290,839   734,249 (660,013) (13,556)    
Ending Balance, Shares at Mar. 31, 2022     79,652                
Beginning Balance at Dec. 31, 2021 $ 357,102   $ 797   288,946   740,820 (661,547) (11,914)    
Beginning Balance, Shares at Dec. 31, 2021 79,652   79,652                
Net income (loss) $ (43,843)                    
Other comprehensive income (loss), net of tax $ (28,468)                    
Stock options exercised, Shares 439                    
Ending Balance at Sep. 30, 2022 $ 1,184,827   $ 776   883,210   31,535 (4,083) (40,288) $ 313,677  
Ending Balance, Shares at Sep. 30, 2022 77,619   77,619                
Beginning Balance at Mar. 31, 2022 $ 352,316   $ 797   290,839   734,249 (660,013) (13,556)    
Beginning Balance, Shares at Mar. 31, 2022     79,652                
Net income (loss) 2,143           2,143        
Other comprehensive income (loss), net of tax (3,140)               (3,140)    
Dividend payments ($0.09 per share) (4,439)           (4,439)        
Dividends accrued on unvested RSUs (23)           (23)        
Deferred compensation adjustments, net of tax 24             24      
PSUs, RSUs and restricted stock vested (300)           (90) (210)      
Stock options exercised 68           (19) 87      
Stock-based compensation expense 1,888       1,888            
Ending Balance at Jun. 30, 2022 348,537   $ 797   292,727   731,821 (660,112) (16,696)    
Ending Balance, Shares at Jun. 30, 2022     79,652                
Net income (loss) (44,859)           (41,934)     (2,925)  
Acquisition of ADVA   $ 894,675   $ 280   $ 577,980         $ 316,415
Acquisition of ADVA, Shares       27,995              
Retirement of treasury stock     $ (303)       (655,761) 656,064      
Retirement of treasury stock, Shares     (30,330)                
Other comprehensive income (loss), net of tax (23,686)               (23,592) (94)  
Dividend payments ($0.09 per share) (6,982)           (6,982)        
Deferred compensation adjustments, net of tax (35)             (35)      
PSUs, RSUs and restricted stock vested (40)           (40)        
PSUs, RSUs and restricted stock vested, Shares     4                
Stock options exercised 4,433 365 $ 2     236 4,431       129
Stock options exercised, Shares     298                
Stock-based compensation expense 11,195 $ 938     11,195 $ 885         $ 53
Reclassification of ADVA stock options 286       187         99  
Ending Balance at Sep. 30, 2022 $ 1,184,827   $ 776   $ 883,210   $ 31,535 $ (4,083) $ (40,288) $ 313,677  
Ending Balance, Shares at Sep. 30, 2022 77,619   77,619                
v3.22.2.2
Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares
3 Months Ended
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Statement of Stockholders' Equity [Abstract]            
Dividend payments $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09
v3.22.2.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Cash flows from operating activities:    
Net Loss $ (43,843) $ (4,445)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Depreciation and amortization 34,783 12,246
Asset impairments 16,969  
Amortization of debt issuance cost 200  
Loss (gain) on investments, net 10,395 (3,320)
Stock-based compensation expense 15,912 5,457
Deferred income taxes (26,366) 437
Other, net 32 89
Inventory reserves (6,681) (4,789)
Changes in operating assets and liabilities:    
Accounts receivable, net (34,535) (26,346)
Other receivables (2,154) 11,152
Inventory (76,293) 2,120
Prepaid expenses, other current assets and other assets 610 (8,514)
Accounts payable 70,381 29,614
Accrued expenses and other liabilities (23,005) 10,392
Income taxes payable, net 20,862 4,798
Net cash (used in) provided by operating activities (42,733) 28,891
Cash flows from investing activities:    
Purchases of property, plant and equipment (10,141) (3,572)
Proceeds from sales and maturities of available-for-sale investments 30,474 28,305
Purchases of available-for-sale investments (22,215) (28,853)
Proceeds from beneficial interests in securitized accounts receivable 1,294  
Proceeds from disposals of property, plant and equipment 12  
Insurance proceeds received   500
Acquisition of business, net of cash acquired 43,957  
Net cash provided by (used in) investing activities 43,381 (3,620)
Cash flows from financing activities:    
Tax withholdings related to stock-based compensation settlements (515) (113)
Proceeds from stock option exercises 5,434 6,111
Dividend payments (15,859) (13,124)
Proceeds from draw on revolving credit agreements 133,141  
Repayment of revolving credit agreements (48,000)  
Payment of debt issuance cost 3,015  
Repayment of notes payable (10,057)  
Net cash provided by (used in) financing activities 61,129 (7,126)
Net increase in cash, cash equivalents and restricted cash 61,777 18,145
Effect of exchange rate changes (7,496) (2,719)
Cash, cash equivalents and restricted cash, beginning of period 56,818 60,179
Cash, cash equivalents and restricted cash, end of period 111,099 75,605
Supplemental disclosure of cash financing activities:    
Cash paid for interest 633  
Supplemental disclosure of non-cash investing activities:    
Right-of-use assets obtained in exchange for lease obligations 904 1,833
Purchases of property, plant and equipment included in accounts payable 1,037 $ 100
ADVA common shares exchanged in acquisition 565,491  
ADVA options issued in acquisition 12,769  
Noncontrolling interest related to ADVA $ 316,415  
v3.22.2.2
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

GENERAL

On July 8, 2022, Acorn MergeCo, Inc. (“Merger Sub”), a Delaware corporation and wholly-owned direct subsidiary of ADTRAN Holdings, Inc. (f/k/a Acorn HoldCo, Inc.), merged with and into ADTRAN, Inc., with ADTRAN, Inc. surviving the merger as a wholly-owned direct subsidiary of ADTRAN Holdings, Inc. (the “Merger”). The Merger was consummated pursuant to the Business Combination Agreement, dated as of August 30, 2021 (the “Business Combination Agreement”), by and among ADTRAN Holdings, Inc., ADTRAN, Inc., ADVA Optical Networking SE, a company organized and existing under the laws of Germany (“ADVA”), and Merger Sub. In accordance with the Business Combination Agreement, ADTRAN Holdings, Inc. made a public offer to exchange each issued and outstanding no-par value bearer share of ADVA for 0.8244 shares of common stock, par value $0.01 per share (the “Company Common Stock”), of ADTRAN Holdings, Inc. (the “Exchange Offer” and, together with the Merger, the “Business Combination”). On July 15, 2022 (the “Exchange Offer Settlement Date”), ADTRAN Holdings, Inc. completed the Exchange Offer, in which ADTRAN Holdings, Inc. acquired 34.0 million bearer shares of ADVA, or 65.43% of ADVA’s outstanding bearer shares as of the Exchange Offer Settlement Date, in exchange for the issuance of an aggregate of 28.0 million shares of Company Common Stock. See Note 2 for additional information.

On October 18, 2022, the Board of Directors of the Company and the management board of ADVA agreed on a final draft of a domination and profit and loss transfer agreement (the “DPLTA”) between the Company, as the controlling company, and ADVA, as the controlled company. The parties’ execution of the DPLTA remains subject to approval of the DPLTA by shareholders of ADVA with 75% of the votes cast in an extraordinary general meeting, which is scheduled to be held on November 30, 2022. If and when signed, effectiveness of the DPLTA is subject to the subsequent registration of the DPLTA with the commercial register (Handelsregister) of the local court (Amtsgericht) at the registered offices of ADVA, with such effectiveness to occur no earlier than January 1, 2023. The Company currently holds 33,957,538 shares of ADVA, representing 65.35% of ADVA’s outstanding shares on September 30, 2022. Unless the context otherwise indicates or requires, references in this Quarterly Report on Form 10-Q to “ADTRAN,” the “Company,” “we,” “us” and “our” refer to ADTRAN, Inc. and its consolidated subsidiaries prior to the Merger on July 8, 2022, and to ADTRAN Holdings, Inc. and its consolidated subsidiaries following the Merger.

 

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. Certain prior year amounts have been reclassified to conform to the current period presentation. The December 31, 2021 Condensed Consolidated Balance Sheet is derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

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, Inc. Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022.

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, estimated pension liability and fair value of investments. 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 the SARS-CoV-2 coronavirus/COVID-19 global pandemic (or variants of the SARS-CoV-2 coronavirus), supply chain constraints, inflationary pressures, the energy crisis, currency fluctuations and political tensions as of September 30, 2022 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 assets, revenue recognition and costs of revenue. Future conditions related to the magnitude and duration of the COVID-19 pandemic, as well as other factors, including supply chain constraints and inflationary pressures could result in further impacts to the Company's consolidated financial statements in future reporting periods.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which would require an acquirer to recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its pre-acquisition financial statements in accordance with Topic 606, Revenue Recognition. The Company early adopted ASU 2021-08 on July 1, 2022 and the standard was applied retrospectively beginning with January 1, 2022. The effect of the adoption of this standard on the Company's Condensed Consolidated Financial Statements as of the date of this report is included in Note 2 of the Notes to Condensed Consolidated Financial Statements.

Recent Accounting Pronouncements Not Yet Adopted

There are currently no accounting pronouncements not yet adopted that had a material effect on the Condensed Consolidated Financial Statements.

v3.22.2.2
Business Combination
9 Months Ended
Sep. 30, 2022
Business Combinations [Abstract]  
Business Combination

2. BUSINESS COMBINATION

 

ADVA Optical Networking SE

 

On August 30, 2021, ADTRAN and ADVA, entered into a Business Combination Agreement, pursuant to which both companies agreed to combine their respective businesses and each become subsidiaries of a new holding company, ADTRAN Holdings, Inc. (formerly known as Acorn HoldCo, Inc.) which was formed as a wholly-owned subsidiary of ADTRAN in order to consummate the transactions under the Business Combination Agreement. Under the terms of the Business Combination Agreement, on July 8, 2022, Acorn MergeCo, Inc, a Delaware corporation and wholly-owned direct subsidiary of the Company, merged with and into ADTRAN Holdings, Inc. with ADTRAN Holdings, Inc. surviving the Business Combination as a wholly-owned direct subsidiary of the Company.

 

Additionally, pursuant to the Business Combination Agreement, the Company made a public offer to exchange each issued and outstanding no-par value bearer share of ADVA for 0.8244 shares of Company Common Stock, par value $0.01 per share of the Company. The Exchange Offer was settled on Exchange Offer Settlement Date, on which date the Company acquired 33,957,538 bearer shares of ADVA, or 65.43% of ADVA’s outstanding bearer shares as of the Exchange Offer Settlement Date, in exchange for the issuance of an aggregate of 27,994,595 shares of Company Common Stock. Additionally, pursuant to the Business Combination Agreement, ADVA stock option holders were entitled to have their ADVA stock options assumed by ADTRAN Holdings, Inc. (applying the exchange ratio in the Business Combination Agreement), thereafter representing options to acquire stock of ADTRAN, Inc. The fair value of the ADVA stock options assumed by ADTRAN, Inc. was $12.8 million, estimated using the Monte Carlo method.

 

ADTRAN, Inc. and ADVA became subsidiaries of ADTRAN Holdings, Inc. as a result of the Business Combination. ADTRAN was determined to be the accounting acquirer of ADVA based on ADTRAN shareholders’ majority equity stake in the combined company, the composition of the board of directors and senior management of the combined company, among other factors. The Business Combination of ADVA has been accounted for using the acquisition method of accounting as per the provisions of Accounting Standards Codification 805, “Business Combinations” (“ASC 805”). The Business Combination Agreement used a fixed exchange ratio of Company Common Stock for ADVA shares of common stock, which resulted in a 36% equity stake for ADVA stockholders and 64% equity stake for ADTRAN stockholders in the post-closing combined company (calculated on a fully diluted basis and utilizing the tender of 65.43% of ADVA’s current issued and outstanding share capital). Therefore, ADTRAN shareholders continue to hold a majority interest in the combined company after the Business Combination was completed. Additionally, the Board of Directors is comprised of six members from ADTRAN and three members from ADVA; the current ADTRAN chief executive officer acts as the chairman of the Board of Directors and the former ADVA chief executive officer as the vice chairman of the Board of Directors. Additionally, the current ADTRAN chief executive officer and ADTRAN chief financial officer hold these positions within the combined company. After these and other considerations as outlined in ASC 805, ADTRAN represents the accounting acquirer.

 

 

The following table summarizes the purchase price for the ADVA business combination:

 

(In thousands, except shares, share price and exchange ratio)

 

Purchase Price

 

ADVA shares exchanged

 

 

33,957,538

 

Exchange ratio

 

 

0.8244

 

ADTRAN Holdings, Inc. shares issued

 

 

27,994,595

 

ADTRAN Holdings, Inc. share price on July 15, 2022

 

$

20.20

 

Purchase price paid for ADVA shares

 

$

565,491

 

Equity compensation (1)

 

$

12,769

 

Total purchase price

 

$

578,260

 

(1) Represents the portion of replacement share-based payment awards that relates to pre-combination vesting.

 

Assets acquired and liabilities assumed were recognized at their respective fair values as of July 15, 2022. The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed in the acquisition of ADVA (in thousands):

 

(In thousands)

 

 

 

Total purchase price

 

$

578,260

 

Non-controlling interest

 

$

316,415

 

Net Assets:

 

 

 

Cash and cash equivalents

 

$

44,003

 

Accounts receivable

 

 

114,659

 

Other receivables

 

 

1,457

 

Inventory

 

 

200,532

 

Prepaid expenses and other current assets

 

 

29,474

 

Property plant and equipment

 

 

52,796

 

Deferred tax assets

 

 

1,599

 

Intangibles

 

 

405,385

 

Other non-current assets

 

 

30,588

 

Accounts payable

 

 

(98,587

)

Current unearned revenue

 

 

(26,047

)

Accrued expenses and other liabilities

 

 

(59,600

)

Current portion of notes payable

 

 

(25,254

)

Income tax payable

 

 

(1,400

)

Non-current unearned revenue

 

 

(11,498

)

Pension liability

 

 

(6,820

)

Other non-current liabilities

 

 

(6,094

)

Non-current portion of revolving credit agreements and notes payable

 

 

(15,250

)

Non-current lease obligations

 

 

(20,046

)

Deferred tax liabilities

 

 

(74,379

)

Total net assets acquired

 

$

535,518

 

Goodwill

 

$

359,157

 

 

The allocation of the purchase price and fair value assessment of goodwill, property, plant and equipment, intangible assets, inventory, deferred tax assets, and deferred tax liabilities is preliminary as a result of ongoing valuation procedures on the assets acquired and liabilities assumed. The acquisition accounting is subject to revision once the Company receives final information. It is possible that the final assessment of fair value may differ materially from the preliminary assessment. If the final assessment differs from this preliminary assessment, the measurement period adjustments will be recorded in the period in which they are determined as if they had been completed at the acquisition date.

 

The preliminary fair value of the assets acquired include accounts receivable of $114.7 million and other receivables of $1.5 million. The unpaid principal balance under these receivables is $118.5 million and $1.5 million, respectively. The difference between the fair value and the unpaid principal balance primarily represents amounts expected to be uncollectible.

 

The fair value of the intangible assets acquired as of the acquisition date:

 

(In thousands)

Estimated-average useful life (in years) (1)

 

 

Fair value

 

 

Income Statement Amortization Classification

Developed technology

 

8.5

 

 

$

293,530

 

 

Cost of revenue - Network Solutions

Backlog

 

1.4

 

 

 

52,165

 

 

Cost of revenue - Network Solutions and Services & Support

Customer relationships

 

10.5

 

 

 

32,704

 

 

Selling, general and administrative expenses

Trade name

 

2.8

 

 

 

26,986

 

 

Selling, general and administrative expenses

Total

 

 

 

$

405,385

 

 

 

 

(1) Determination of the weighted average period of the individual categories of intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with definite lives is recognized over the period of time the assets are expected to contribute to future cash flows.

 

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. Based on preliminary estimates, the ADVA acquisition resulted in the recognition of goodwill of $359.2 million, which the Company believes is attributable to the value driven by the Company’s expected growth of the business, synergies, and expanded market and product opportunities. Goodwill created as a result of the ADVA acquisition is not deductible for tax purposes.

 

After the Business Combination, the chief operating decision maker assessed and will continue to assess the Company’s performance and allocate resources to its two segments (1) Network Solutions and (2) Services & Support. Based on preliminary estimates, the goodwill resulting from the Business Combination of $270.6 million was allocated to the Network Solutions segment, and $88.6 million was allocated to the Services & Support segment. See Note 18 of the Notes to Condensed Consolidated Financial Statements, included in Part I, Item 1 of this report for more information about the Company’s segments.

 

As of the acquisition date, the fair value of the non-controlling interest was approximately $316.4 million and determined using a market approach. As a portion of ADVA shares will remain trading after the Business Combination, the non-controlling interest was calculated using 17,941,496 ADVA shares held by non-controlling interest multiplied by the ADVA closing share price of €17.58 ($17.64 using the July 15, 2022 EUR to USD conversion rate of $1.00318) on July 15, 2022.

 

The Company included the financial results of ADVA in its consolidated financial statements since July 15, 2022, the acquisition date. The net revenue and net loss from the ADVA business since July 15, 2022, were $163.8 million and $8.4 million, respectively, which are included in the Company’s Condensed Consolidated Statement of Loss. The net loss attributable to non-controlling interest from the ADVA business for the three and nine months ended September 30, 2022 was $2.9 million.

 

As of September 30, 2022, the Company has incurred $25.2 million of transaction costs related to the Business Combination, of which $10.6 million and $5.1 million were incurred during the three months ended September 30, 2022 and 2021, respectively and $13.3 million and $6.4 million were incurred during the nine months ended September, 30 2022 and 2021, respectively. The Company expects to incur an estimated $1.1 million of additional transaction costs related to the Business Combination. These transaction costs are recorded in selling, general and administrative expense in the Condensed Consolidated Statements of Loss.

 

Supplemental Pro Forma Information (Unaudited)

 

The unaudited pro forma financial information in the table below summarizes the combined results of operations for ADTRAN and ADVA as though the Business Combination had occurred on January 1, 2021. The pro forma amounts have been adjusted for differences in basis of accounting which are determined before taking into effect the impacts of purchase accounting and Business Combination accounting impacts.

 

 

The following unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the results of operations of future periods, the results of operations that actually would have been realized had the entities been a single company as of January 1, 2021, or the future operating results of the combined entities. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the Company may incur related to the acquisition as part of combining the operations of the companies.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

(In thousands)

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

$

368,192

 

 

$

317,067

 

 

$

1,053,510

 

 

$

942,003

 

Net income (loss)

$

(48,084

)

 

$

(44,154

)

 

$

(60,494

)

 

$

(133,321

)

v3.22.2.2
Cash, Cash Equivalents and Restricted Cash
9 Months Ended
Sep. 30, 2022
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents and Restricted Cash

3. CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Cash and cash equivalents

 

$

111,099

 

 

$

56,603

 

Restricted cash

 

 

 

 

 

215

 

Cash, cash equivalents and restricted cash

 

$

111,099

 

 

$

56,818

 

 

v3.22.2.2
Revenue
9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
Revenue

4. 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.

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 the Company's reportable segments, revenue is also reported for the following three categories – Subscriber Solutions, Access & Aggregation Solutions and Optical Networking Solutions.

Prior to the Business Combination with ADVA on July 15, 2022, ADTRAN reported revenue across the following three categories: (1) Access & Aggregation, (2) Subscriber Solutions & Experience and (3) Traditional & Other Products. Following the Business Combination with ADVA, we have recast these revenues such that ADTRAN’s former Access & Aggregation revenue is combined with a portion of the applicable ADVA solutions to create Access & Aggregation Solutions, ADTRAN’s former Subscriber Solutions & Experience revenue is combined with a portion of the applicable ADVA 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 is a new revenue category added to represent a meaningful portion of ADVA’s 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 tables disaggregate revenue by reportable segment and revenue category. Prior year amounts presented below have been reclassified to conform to the current period revenue category presentation:

 

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

125,338

 

 

$

8,337

 

 

$

133,675

 

 

$

42,704

 

 

$

4,163

 

 

$

46,867

 

Access & Aggregation Solutions

 

 

76,591

 

 

 

11,598

 

 

 

88,189

 

 

 

78,063

 

 

 

13,151

 

 

 

91,214

 

Optical Networking Solutions

 

 

103,011

 

 

 

15,834

 

 

 

118,845

 

 

 

 

 

 

 

 

 

 

Total

 

$

304,940

 

 

$

35,769

 

 

$

340,709

 

 

$

120,767

 

 

$

17,314

 

 

$

138,081

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

252,899

 

 

$

17,248

 

 

$

270,147

 

 

$

140,257

 

 

$

12,232

 

 

$

152,489

 

Access & Aggregation Solutions

 

 

243,396

 

 

 

34,877

 

 

 

278,273

 

 

 

219,768

 

 

 

36,589

 

 

 

256,357

 

Optical Networking Solutions

 

 

103,011

 

 

 

15,834

 

 

 

118,845

 

 

 

 

 

 

 

 

 

 

Total

 

$

599,306

 

 

$

67,959

 

 

$

667,265

 

 

$

360,025

 

 

$

48,821

 

 

$

408,846

 

 

The aggregate amount of transaction price allocated to remaining performance obligations that have not been satisfied as of September 30, 2022 and December 31, 2021 related to contractual maintenance agreements, contractual SaaS and subscription services, and hardware contracts that exceed one year in duration amounted to $276.5 million and $101.1 million, respectively. As of September 30, 2022, approximately 82% 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 September 30, 2022 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 receivables, contract assets and unearned revenue from contracts with customers:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Accounts receivable, net

 

$

302,401

 

 

$

158,742

 

Contract assets(1)

 

$

1,790

 

 

$

464

 

Unearned revenue

 

$

40,993

 

 

$

17,737

 

Non-current unearned revenue

 

$

18,269

 

 

$

9,271

 

 

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

The Company is party to a receivables purchase agreement with a financial institution (the “Factor”). Pursuant to the terms of the arrangement, the Company, on a revolving basis, sells to the Factor certain of its accounts receivable balances without recourse. On each sale date, the Factor retains from the sale price a default reserve, up to a required balance, which are held by the Factor in a reserve account and pledged to the Company. The Factor is entitled to withdraw from the reserve account the sale price of a defaulted receivable. As of September 30, 2022, accounts receivable totaling $16.1 million were sold, of which $1.3 million was retained by the Factor in the reserve account. The balance in the reserve account is included in other assets on the Condensed Consolidated Balance Sheets. As of September 30, 2022, the Company has an allowance for doubtful accounts related to factored accounts receivable totaling $0.1 million. As of September 30, 2022, accounts receivables include $31.1 million related to the existing sale of receivables for which the transfer of the receivable has not taken place. 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 and nine months ended September 30, 2022.

Of the outstanding unearned revenue balances as of December 31, 2021, $2.8 million and $12.3 million was recognized as revenue during the three and nine months ended September 30, 2022, respectively. Of the $14.1 million of outstanding unearned revenue balances as of December 31, 2020, $2.0 million and $9.8 million was recognized as revenue during the three and nine months ended September 30, 2021, respectively.

Accounts Receivable

The Company records accounts receivable in the normal course of business as products are shipped or services are performed and invoiced, but payment has not yet been remitted by the customer. Accounts receivable balances are considered past due when payment has not been received by the date indicated on the relevant invoice or based on agreed upon terms between the customer and the Company.

As of September 30, 2022 and December 31, 2021, the Company’s outstanding accounts receivable balance was $302.4 million, and $158.7 million, respectively. The Company assessed the need for an allowance for credit losses related to its outstanding accounts receivable using the historical loss-rate method as well as assessing asset-specific risks. The assessment of asset-specific risks included the evaluation of relevant available information, from internal and external sources, relating to current conditions that may affect a customer’s ability to pay, such as the customer’s current financial condition, credit rating by geographic location, as provided by a third party and/or by customer, if needed, and the overall macro-economic conditions in which the customer operates. The Company pooled assets by geographic location to determine if an allowance should be applied to its accounts receivable balance, assessing the specific country risk rating and overall economics of that particular country. If elevated risk existed, or customer specific risk indicated the accounts receivable balance was at risk, the Company further analyzed the need for an allowance related to specific accounts receivable balances. Additionally, the Company determined that significant changes to customer country risk rating from period-to-period and from the end of the prior year to the end of the current quarter would require further review and analysis by the Company.

The allowance for credit losses was $0.2 million as of September 30, 2022 related to accounts receivable. No allowance for credit losses was recorded as of December 31, 2021 related to accounts receivable.

 

Contract Assets

The Company records contract assets when it has recognized revenue but has not yet billed the customer. As of September 30, 2022 and December 31, 2021, the Company’s outstanding contract asset balance was $1.8 million and $0.5 million, respectively, which is included in other receivables on the Consolidated Balance Sheets. The Company assessed the need for an allowance for credit losses related to its outstanding contract assets using the historical loss-rate method as well as asset-specific risks. The Company’s historical losses related to contract assets receivable have been immaterial as evidenced by historical write-offs due to collectability. Asset-specific risk included the evaluation of relevant available information, from internal and external sources, relating to current conditions that may affect a customer’s ability to pay once invoiced, such as the customer’s financial condition, credit rating by geographic location as provided by a third party and/or by customer, if needed, and the overall macro-economic conditions in which the customer operates. The Company pooled assets by geographic location to determine if an allowance should be applied to its contract asset balance, assessing the specific country risk rating and the overall economics of that particular country. If elevated risk existed, or customer specific risk indicated the contract balance was at risk, the Company further analyzed the need for an allowance related to specific customer balances. Additionally, the Company determined that significant changes to customer country risk rating from period-to-period and from the end of the prior year to the end of the current quarter would be subject to further review and analysis by the Company.

No allowance for credit losses was recorded for the year ended September 30, 2022 and December 31, 2021 related to contract assets.

v3.22.2.2
Income Taxes
9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

5. INCOME TAXES

 

The Company's effective tax rate changed from an expense of 14.1% of pre-tax income for the three months ended September 30, 2021, to a benefit of 8.8% of pre-tax income for the three months ended September 30, 2022 and changed from an expense of 354.5% of pre-tax income for the nine months ended September 30, 2021, to a benefit of 9.4% of pre-tax income for the nine months ended September 30, 2022. The change in the effective tax rate for the three and nine months ended September 30, 2022, was driven primarily by a change in our estimated tax rate as a result of the closing of the Business Combination with ADVA during the third quarter of 2022, the requirement to begin capitalizing Research and Development expenses for U.S. tax purposes beginning in 2022 as previously passed as part of the Tax Cuts and Jobs Act in December 2017 and the associated impact of those changes on our previously established valuation allowance.

 

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 September 30, 2022, the Company had net deferred tax assets totaling $29.2 million, and a valuation allowance totaling $66.1 million against those deferred tax assets. The remaining $36.9 million in deferred tax liabilities are primarily related to purchase price intangibles from the Business Combination closed with ADVA during the third quarter of 2022. During the nine months ended September 30, 2022, the total change in the valuation allowance against our domestic and international deferred tax assets was recorded in the amount of $15.8 million and $0.2 million, respectively. 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.

 

Supplemental balance sheet information related to deferred tax assets (liabilities) is as follows:

 

 

 

As of September 30, 2022

 

(In thousands)

 

Deferred Tax Assets (Liabilities)

 

 

Valuation Allowance

 

 

Deferred Tax Liabilities, net

 

Domestic

 

$

68,723

 

 

$

(64,054

)

 

$

4,669

 

International

 

 

(39,493

)

 

 

(2,060

)

 

 

(41,553

)

Total

 

$

29,230

 

 

$

(66,114

)

 

$

(36,884

)

 

 

 

As of December 31, 2021

 

(In thousands)

 

Deferred Tax Assets

 

 

Valuation Allowance

 

 

Deferred Tax Assets, net

 

Domestic

 

$

48,265

 

 

$

(48,265

)

 

$

 

International

 

 

11,378

 

 

 

(2,299

)

 

 

9,079

 

Total

 

$

59,643

 

 

$

(50,564

)

 

$

9,079

 

v3.22.2.2
Stock-Based Compensation
9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

6. STOCK-BASED COMPENSATION

For the three months ended September 30, 2022 and 2021, stock-based compensation expense was $12.1 million and $1.8 million, respectively. For the nine months ended September 30, 2022 and 2021, stock-based compensation expense was $15.9 million and $5.5 million, respectively.

PSUs, RSUs and Restricted Stock - ADTRAN Holdings, Inc.

The following table summarizes the RSUs and restricted stock outstanding as of December 31, 2021 and September 30, 2022 and the changes that occurred during the nine months ended September 30, 2022:

 

 

 

Number of
Shares
(in thousands)

 

 

Weighted Avg. Grant Date Fair Value
(per share)

 

Unvested RSUs and restricted stock outstanding, December 31, 2021

 

 

1,930

 

 

$

14.11

 

RSUs and restricted stock granted

 

 

545

 

 

$

19.96

 

RSUs and restricted stock vested

 

 

(20

)

 

$

13.67

 

RSUs and restricted stock forfeited

 

 

(46

)

 

$

14.18

 

Unvested RSUs and restricted stock outstanding, September 30, 2022

 

 

2,409

 

 

$

17.36

 

 

During each of the nine months ended September 30, 2022 and 2021, the Company granted 0.3 million performance-based PSUs to its executive officers and certain employees. The grant-date fair value of these performance-based awards was based on the closing price of the Company’s stock on the date of grant. These awards vest over one-year, two-year and three-year periods, respectively, subject to the grantee’s continued employment, with the ability to earn shares in a range of 0% to 142.8% of the awarded number of PSUs based on the achievement of defined performance targets. Equity-based compensation expense with respect to these awards may be adjusted over the vesting period to reflect the probability of achievement of performance targets defined in the award agreements. Pursuant to the Business Combination, the unearned performance-based PSUs converted to time-based RSUs which was treated as an award modification during the third quarter of 2022. This resulted in incremental compensation and unrecognized compensation expense totaling $17.8 million of which $8.9 million was recognized during the three months ended September 30, 2022 and the remainder will be recognized over the remaining service period of 0.3 years. Unrecognized compensation expense will be adjusted for actual forfeitures.

 

Pursuant to the Business Combination, 0.3 million shares of market-based PSU awards converted to time-based RSU's awards which was treated as an award modification during the third quarter of 2022. Given that the fair value of these awards after the modification was less than the fair value of the awards immediately before the modification, no incremental compensation expense was recognized. The Company continued to recognize compensation expense based on the award's original grant date fair value. As of September 30, 2022, there was $2.1 million of unrecognized compensation expense related to these awards which will be recognized over the weighted average remaining service period of 1.1 years.

 

The fair value of RSUs and restricted stock is equal to the closing price of its 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 September 30, 2022, total unrecognized compensation expense related to non-vested market-based RSUs and restricted stock was approximately $24.6 million, which will be recognized over the remaining weighted-average period of 1.6 years.

 

As of September 30, 2022, 3.4 million shares were available for issuance under stockholder-approved equity plans.

Stock Options - ADTRAN Holdings, Inc.

The following table summarizes ADTRAN Holdings, Inc. stock options outstanding as of December 31, 2021 and September 30, 2022 and the changes that occurred during the nine months ended September 30, 2022:

 

 

 

Number of
Stock Options
(in thousands)

 

 

Weighted Avg.
Exercise Price
(per share)

 

 

Weighted Avg.
Remaining
Contractual
Life
(in years)

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Stock options outstanding, December 31, 2021

 

 

1,721

 

 

$

19.37

 

 

 

2.4

 

 

$

6,669

 

ADVA stock options replaced by ADTRAN Holdings stock options(1)

 

 

1,980

 

 

$

11.16

 

 

 

 

 

 

 

Stock options exercised

 

 

(439

)

 

$

16.16

 

 

 

 

 

 

 

Stock options forfeited

 

 

(12

)

 

$

11.08

 

 

 

 

 

 

 

Stock options expired

 

 

(70

)

 

$

26.38

 

 

 

 

 

 

 

Stock options outstanding, September 30, 2022

 

 

3,180

 

 

$

14.58

 

 

 

3.5

 

 

$

17,839

 

Stock options exercisable, September 30, 2022

 

 

1,627

 

 

$

16.85

 

 

 

2.0

 

 

$

6,375

 

(1) Each ADVA stock option surrendered was exchanged for 0.8244 ADTRAN Holdings stock options.

As of September 30, 2022, there was $9.0 million of unrecognized compensation expense related to stock options which will be recognized over the remaining weighted-average period of 2.7 years.

Pursuant to the Business Combination, which closed on July 15, 2022, ADVA stock option holders were entitled to have their ADVA stock options assumed by ADTRAN Holdings (applying the exchange ratio in the Business Combination Agreement), thereafter representing options to acquire stock of ADTRAN Holdings. The maximum number of shares of ADTRAN Holdings stock potentially issuable upon such assumption was 2.1 million shares. The period in which such options could be assumed ended July 22, 2022. A total of 2.0 million shares of ADTRAN Holdings stock are subject to assumed ADVA options. The determination of the fair value of stock options assumed 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 ADTRAN’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 September 30, 2022. The amount of aggregate intrinsic value was $17.8 million as of September 30, 2022 and will change based on the fair market value of ADTRAN’s stock. The total pre-tax intrinsic value of options exercised during the nine months ended September 30, 2022 was $3.4 million.

 

Stock Options - ADVA Optical Networking SE

The following table summarizes ADVA Optical Networking SE stock options outstanding as of July 15, 2022 (the Business Combination closing date) and September 30, 2022 and the changes that occurred between July 15, 2022 and September 30, 2022:

 

 

 

Number of
Stock Options
(in thousands)

 

 

Weighted Avg.
Exercise Price
(per share)

 

 

Weighted Avg.
Remaining
Contractual
Life
(in years)

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Stock options outstanding, July 15, 2022

 

 

2,745

 

 

$

9.09

 

 

 

4.6

 

 

$

27,205

 

Stock options exercised

 

 

(56

)

 

$

6.79

 

 

 

 

 

 

 

ADVA stock options replaced by ADTRAN Holdings stock options(1)

 

 

(2,403

)

 

$

9.25

 

 

 

 

 

 

 

Stock options forfeited

 

 

(4

)

 

$

7.91

 

 

 

 

 

 

 

Stock options outstanding, September 30, 2022

 

 

282

 

 

$

8.45

 

 

 

3.9

 

 

$

2,976

 

Stock options exercisable, September 30, 2022

 

 

32

 

 

$

7.72

 

 

 

1.2

 

 

$

363

 

(1) Each ADVA stock option surrendered was exchanged for 0.8244 ADTRAN Holdings stock options.

As of September 30, 2022, there was $0.3 million of unrecognized compensation expense related to stock options which will be recognized over the remaining weighted-average period of 1.1 years.

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 ADVA'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 September 30, 2022. The amount of aggregate intrinsic value was $3.0 million as of September 30, 2022 and will change based on the fair market value of ADVA's stock. The total pre-tax intrinsic value of options exercised during the period July 15, 2022 through September 30, 2022 was $0.7 million.

v3.22.2.2
Investments
9 Months Ended
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Investments

7. INVESTMENTS

Debt Securities and Other Investments

The following debt securities and other investments were included on the Condensed Consolidated Balance Sheets and recorded at fair value:

 

 

 

As of September 30, 2022

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

9,358

 

 

$

 

 

$

(374

)

 

$

8,984

 

Municipal fixed-rate bonds

 

 

1,411

 

 

 

 

 

 

(54

)

 

 

1,357

 

Asset-backed bonds

 

 

2,988

 

 

 

 

 

 

(77

)

 

 

2,911

 

Mortgage/Agency-backed bonds

 

 

4,720

 

 

 

 

 

 

(280

)

 

 

4,440

 

U.S. government bonds

 

 

11,231

 

 

 

 

 

 

(642

)

 

 

10,589

 

Foreign government bonds

 

 

409

 

 

 

 

 

 

(27

)

 

 

382

 

Available-for-sale debt securities held at fair value

 

$

30,117

 

 

$

 

 

$

(1,454

)

 

$

28,663

 

 

 

 

As of December 31, 2021

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

10,776

 

 

$

6

 

 

$

(35

)

 

$

10,747

 

Municipal fixed-rate bonds

 

 

1,553

 

 

 

2

 

 

 

(4

)

 

 

1,551

 

Asset-backed bonds

 

 

322

 

 

 

3

 

 

 

(3

)

 

 

322

 

Mortgage/Agency-backed bonds

 

 

4,754

 

 

 

15

 

 

 

(33

)

 

 

4,736

 

U.S. government bonds

 

 

12,251

 

 

 

12

 

 

 

(92

)

 

 

12,171

 

Foreign government bonds

 

 

543

 

 

 

 

 

 

(4

)

 

 

539

 

Available-for-sale debt securities held at fair value

 

$

30,199

 

 

$

38

 

 

$

(171

)

 

$

30,066

 

 

 

The contractual maturities related to debt securities and other investments were as follows:

 

 

 

As of September 30, 2022

(In thousands)

 

Corporate
bonds

 

 

Municipal
fixed-rate
bonds

 

 

Asset-
backed
bonds

 

 

Mortgage/
Agency-
backed bonds

 

 

U.S. government
bonds

 

 

Foreign government bonds

 

 

Less than one year

 

$

96

 

 

$

525

 

 

$

 

 

$

182

 

 

$

 

 

$

 

 

One to two years

 

 

5,371

 

 

 

722

 

 

 

95

 

 

 

464

 

 

 

7,421

 

 

 

275

 

 

Two to three years

 

 

3,517

 

 

 

110

 

 

 

715

 

 

 

1,321

 

 

 

2,889

 

 

 

107

 

 

Three to five years

 

 

 

 

 

 

 

 

1,306

 

 

 

166

 

 

 

279

 

 

 

 

 

Five to ten years

 

 

 

 

 

 

 

 

382

 

 

 

810

 

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

413

 

 

 

1,497

 

 

 

 

 

 

 

 

Total

 

$

8,984

 

 

$

1,357

 

 

$

2,911

 

 

$

4,440

 

 

$

10,589

 

 

$

382

 

 

 

Actual maturities may differ from contractual maturities as some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Realized gains and losses on sales of debt securities are computed under the specific identification method. The following table presents the gross realized gains and losses related to its debt securities:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

     Gross realized gain on debt securities

 

$

1

 

 

$

22

 

 

$

14

 

 

$

206

 

     Gross realized loss on debt securities

 

 

(116

)

 

 

(17

)

 

 

(242

)

 

 

(53

)

Total (loss) gain recognized, net

 

$

(115

)

 

$

5

 

 

$

(228

)

 

$

153

 

Income generated from available-for-sale debt securities was recorded as interest and dividend income in the Condensed Consolidated Statements of Loss. No allowance for credit losses was recorded for the nine months ended September 30, 2022 and 2021 related to available-for-sale debt securities. The Company’s investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of its total investment portfolio. The Company did not purchase any available-for-sale debt security with credit deterioration during the nine months ended September 30, 2022.

Realized and unrealized gains and losses related to marketable equity securities were as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

     Realized (loss) gain on equity securities sold

 

$

(1,358

)

 

$

 

 

$

(1,675

)

 

$

(55

)

     Unrealized (loss) gain on equity securities held

 

 

(1,217

)

 

 

(68

)

 

 

(8,849

)

 

 

2,844

 

Total (loss) gain recognized, net

 

$

(2,575

)

 

$

(68

)

 

$

(10,524

)

 

$

2,789

 

 

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 1 – Observable outputs; values based on unadjusted quoted prices for identical assets or liabilities in an active market;

• 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 September 30, 2022 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices
in Active
Market for
Identical
Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

698

 

 

$

698

 

 

$

 

 

$

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

8,984

 

 

 

 

 

 

8,984

 

 

 

 

Municipal fixed-rate bonds

 

 

1,357

 

 

 

 

 

 

1,357

 

 

 

 

Asset-backed bonds

 

 

2,911

 

 

 

 

 

 

2,911

 

 

 

 

Mortgage/Agency-backed bonds

 

 

4,440

 

 

 

 

 

 

4,440

 

 

 

 

U.S. government bonds

 

 

10,589

 

 

 

10,589

 

 

 

 

 

 

 

Foreign government securities

 

 

382

 

 

 

 

 

 

382

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

760

 

 

 

760

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

21,511

 

 

 

21,511

 

 

 

 

 

 

 

Total

 

$

51,632

 

 

$

33,558

 

 

$

18,074

 

 

$

 

 

 

 

 

 

 

Fair Value Measurements as of December 31, 2021 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices
in Active
Market for
Identical
Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

652

 

 

$

652

 

 

$

 

 

$

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

10,747

 

 

 

 

 

 

10,747

 

 

 

 

Municipal fixed-rate bonds

 

 

1,551

 

 

 

 

 

 

1,551

 

 

 

 

Asset-backed bonds

 

 

322

 

 

 

 

 

 

322

 

 

 

 

Mortgage/Agency-backed bonds

 

 

4,736

 

 

 

 

 

 

4,736

 

 

 

 

U.S. government bonds

 

 

12,171

 

 

 

12,171

 

 

 

 

 

 

 

Foreign government bonds

 

 

539

 

 

 

 

 

 

539

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

12,606

 

 

 

12,606

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

26,935

 

 

 

26,935

 

 

 

 

 

 

 

Total

 

$

70,259

 

 

$

52,364

 

 

$

17,895

 

 

$

 

 

The fair value of its Level 2 securities is calculated using a weighted average market price for each security. 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.

v3.22.2.2
Inventory
9 Months Ended
Sep. 30, 2022
Inventory Disclosure [Abstract]  
Inventory

8. INVENTORY

Inventory consisted of the following:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Raw materials

 

$

177,554

 

 

$

74,709

 

Work in process

 

 

10,625

 

 

 

2,143

 

Finished goods

 

 

227,984

 

 

 

63,039

 

Total inventory, net

 

$

416,163

 

 

$

139,891

 

 

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. As of September 30, 2022 and December 31, 2021, inventory reserves were $51.3 million and $44.6 million, respectively.

v3.22.2.2
Property, Plant and Equipment
9 Months Ended
Sep. 30, 2022
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment

9. PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consisted of the following:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Engineering and other equipment

 

$

162,445

 

 

$

134,771

 

Building

 

 

80,807

 

 

 

68,157

 

Computer hardware and software

 

 

79,990

 

 

 

72,274

 

Building and land improvements

 

 

40,132

 

 

 

35,578

 

Furniture and fixtures

 

 

20,891

 

 

 

19,917

 

Land

 

 

5,298

 

 

 

4,575

 

Other assets

 

 

4,835

 

 

 

 

     Total property, plant and equipment

 

 

394,398

 

 

 

335,272

 

Less: accumulated depreciation

 

 

(289,821

)

 

 

(279,506

)

     Total property, plant and equipment, net

 

$

104,577

 

 

$

55,766

 

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. In connection with the planned integration of information technology following the Business Combination, we determined that certain projects no longer fit our needs. As a result the Company recognized impairment charges of $17.0 million during the three and nine months ended September 30, 2022 related to capitalized implementation costs for a cloud computing arrangement. The impairment charges were determined based on actual costs incurred.

Depreciation expense was $7.1 million and $3.0 million for the three months ended September 30, 2022 and 2021, respectively, and $12.6 million and $9.1 million for the nine months ended September 30, 2022 and 2021, 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.

v3.22.2.2
Goodwill
9 Months Ended
Sep. 30, 2022
Goodwill Disclosure [Abstract]  
Goodwill

10. GOODWILL

The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 are as follows:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

As of December 31, 2021

 

$

6,568

 

 

$

400

 

 

$

6,968

 

Goodwill from Business Combination with ADVA

 

 

270,568

 

 

 

88,589

 

 

 

359,157

 

Foreign currency translation adjustments

 

 

(6,220

)

 

 

(2,036

)

 

 

(8,256

)

As of September 30, 2022

 

$

270,916

 

 

$

86,953

 

 

$

357,869

 

 

Goodwill represents the excess purchase price over the fair value of net assets acquired. We qualitatively assess the carrying value of goodwill each reporting period for events or circumstance changes that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Based on its assessment of certain qualitative factors such as macro-economic conditions, industry and market considerations, costs factors and overall financial performance, management concluded that no such events or circumstance changes were identified that would suggest that the fair value of the goodwill was more likely than not greater than its carrying amount as of September 30, 2022. No impairment of goodwill was recorded during the three and nine months ended September 30, 2022 and 2021.

v3.22.2.2
Intangible Assets
9 Months Ended
Sep. 30, 2022
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
Intangible Assets

11. INTANGIBLE ASSETS

Intangible assets consisted of the following:

 

 

 

 

 

As of September 30, 2022

 

 

As of December 31, 2021

 

(In thousands)

Weighted Average Useful Life
(in years)

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

 

Customer relationships

 

10.9

 

 

$

52,139

 

 

$

(11,207

)

 

$

40,932

 

 

$

20,796

 

 

$

(9,906

)

 

$

10,890

 

Backlog

 

1.4

 

 

 

50,966

 

 

 

(9,325

)

 

 

41,641

 

 

 

 

 

 

 

 

 

 

Developed technology

 

8.5

 

 

 

294,983

 

 

 

(11,565

)

 

 

283,418

 

 

 

8,200

 

 

 

(3,683

)

 

 

4,517

 

Licensed technology

 

9.0

 

 

 

5,900

 

 

 

(2,977

)

 

 

2,923

 

 

 

5,900

 

 

 

(2,486

)

 

 

3,414

 

Licensing agreements

 

8.5

 

 

 

560

 

 

 

(280

)

 

 

280

 

 

 

560

 

 

 

(225

)

 

 

335

 

Patents

 

7.3

 

 

 

500

 

 

 

(414

)

 

 

86

 

 

 

500

 

 

 

(363

)

 

 

137

 

Trade names

 

2.8

 

 

 

26,575

 

 

 

(2,280

)

 

 

24,295

 

 

 

210

 

 

 

(210

)

 

 

 

     Total

 

 

 

$

431,623

 

 

$

(38,048

)

 

$

393,575

 

 

$

36,166

 

 

$

(16,873

)

 

$

19,293

 

The Company evaluates the carrying value of intangible assets 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. Due to the current economic environment, particularly related to COVID-19, the Company assessed impairment triggers related to intangible assets during each financial period in 2022 and 2021. As a result, no quantitative impairment test of long-lived assets was performed as of September 30, 2022 and 2021, and no impairment losses of intangible assets were recorded during the three and nine months ended September 30, 2022 and 2021.

 

Amortization expense was $20.4 million and $1.0 million in the three months ended September 30, 2022 and 2021, respectively, and $22.2 million and $3.1 million in the nine months ended September 30, 2022 and 2021, 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 was as follows:

 

 

 

As of

 

(In thousands)

 

September 30, 2022

 

2022

 

$

23,691

 

2023

 

 

75,677

 

2024

 

 

53,021

 

2025

 

 

42,623

 

2026

 

 

39,505

 

Thereafter

 

 

159,058

 

     Total

 

$

393,575

 

v3.22.2.2
Leases
9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Leases

12. LEASES

We have operating leases for office space, automobiles and various other equipment in the U.S. and in certain international locations. Other contracts, such as manufacturing agreements and service agreements, are reviewed to determine if they contain potential embedded leases. These other contracts are specifically reviewed to determine whether we have the right to substantially all of the economic benefit from the use of any specified assets or the right to direct the use of any specified assets, either of which would indicate the existence of a lease.

As of September 30, 2022, our operating leases had remaining lease terms ranging from one month to seventy-eight months, some of which included options to extend the leases for up to five years, and some of which included options to terminate the leases within three months. For those leases that are reasonably assured to be renewed, we have included the option to extend as part of our right of use asset and lease liability. Supplemental balance sheet information related to operating leases is as follows:

 

(In thousands)

 

Classification

 

September 30, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

 

 

Operating lease asset

 

Other assets

 

$

28,081

 

 

$

4,922

 

   Total lease asset

 

 

 

$

28,081

 

 

$

4,922

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current operating lease liability

 

Accrued expenses

 

$

6,604

 

 

$

1,730

 

Non-current operating lease liability

 

Non-current lease obligations

 

 

21,490

 

 

 

3,269

 

   Total lease liability

 

 

 

$

28,094

 

 

$

4,999

 

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet and the lease expense for these leases is recognized on a straight-line basis over the lease term. Lease expense related to these short-term leases was less than $0.1 million for the three and nine months ended September 30, 2022 and 2021, and is included in cost of revenue, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Loss. Lease expense related to variable lease payments that do not depend on an index or rate, such as real estate taxes and insurance reimbursements, was $0.2 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively, and $0.5 million and $0.4 million for the nine months ended September 30, 2022 and 2021, respectively. For lease agreements entered into or reassessed after the adoption of Topic 842, we elected to not separate lease and non-lease components. Our lease agreements do not contain any material residual value guarantees.

 

The components of lease expense included in the Condensed Consolidated Statements of Loss were as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Selling, general and administrative expenses

 

$

1,444

 

 

$

196

 

 

$

1,704

 

 

$

645

 

Research and development expenses

 

 

228

 

 

 

261

 

 

 

719

 

 

 

815

 

Cost of sales

 

 

20

 

 

 

14

 

 

 

59

 

 

 

38

 

Total operating lease expense

 

$

1,692

 

 

$

471

 

 

$

2,482

 

 

$

1,498

 

 

As of September 30, 2022 and December 31, 2021, operating lease liabilities included on the Condensed Consolidated Balance Sheets by future maturity were as follows:

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

2022

 

$

2,209

 

 

$

1,767

 

2023

 

 

8,421

 

 

 

1,419

 

2024

 

 

7,098

 

 

 

1,188

 

2025

 

 

5,838

 

 

 

710

 

2026

 

 

3,354

 

 

 

 

Thereafter

 

 

5,107

 

 

 

 

Total lease payments

 

 

32,027

 

 

 

5,084

 

Less: Interest

 

 

(3,933

)

 

 

(85

)

Present value of lease liabilities

 

$

28,094

 

 

$

4,999

 

 

Future operating lease payments include $4.5 million related to options to extend lease terms that are reasonably certain of being exercised. There are material legally binding leases that have not yet commenced.

 

An incremental borrowing rate is used based on information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is determined on a portfolio basis by grouping leases with similar terms, as well as grouping leases based on a U.S. dollar or Euro functional currency. The following table provides information about our weighted average lease terms and weighted average discount rates:

 

 

 

As of September 30, 2022

 

Weighted average remaining lease term (in years)

 

 

 

     Operating leases with USD functional currency

 

 

1.6

 

     Operating leases with Euro functional currency

 

 

4.5

 

Weighted average discount rate

 

 

 

     Operating leases with USD functional currency

 

 

3.93

%

     Operating leases with Euro functional currency

 

 

4.05

%

 

For the nine months ended September 30, 2022 and 2021, the Company used $2.3 million and $1.4 million of cash in operating activities related to operating leases, respectively.

 

Net Investment in Sales-Type Leases

 

We are the lessor in sales-type lease arrangements for network equipment, which consisted of the following:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Current minimum lease payments receivable(1)

 

$

11

 

 

$

92

 

Non-current minimum lease payments receivable(2)

 

 

 

 

 

4

 

     Total minimum lease payments receivable

 

 

11

 

 

 

96

 

Less: Current unearned revenue(1)

 

 

5

 

 

 

70

 

Less: Non-current unearned revenue(2)

 

 

 

 

 

1

 

     Net investment in sales-type leases

 

$

6

 

 

$

25

 

 

(1)
Included in other receivables on the Condensed Consolidated Balance Sheets.
(2)
Included in other assets on the Condensed Consolidated Balance Sheets.
v3.22.2.2
Revolving Credit Agreements
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Revolving Credit Agreements

13. REVOLVING CREDIT AGREEMENTS

The carrying amounts of the Company's revolving credit agreements in its Condensed Consolidated Balance Sheets were as follows:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Wells Fargo credit agreement

 

$

60,000

 

 

$

 

Nord/LB revolving line of credit

 

 

14,702

 

 

 

 

Syndicated credit agreement working capital line of credit

 

 

9,801

 

 

 

 

Wells Fargo revolving credit agreement

 

 

 

 

 

 

Cadence revolving credit agreement

 

 

 

 

 

 

Total revolving credit agreements

 

$

84,503

 

 

$

 

 

As of September 30, 2022, the weighted average interest rate on our revolving credit agreements was 4.05%

 

Wells Fargo Credit Agreement

 

On July 18, 2022, ADTRAN Holdings, Inc. and ADTRAN, Inc., as the borrower, 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”). The Credit Agreement allows for borrowings of up to $100 million in aggregate principal amount, subject to being increased to up to $400 million in aggregate principal amount upon the Company or Borrower’s execution of a DPLTA with ADVA or a parent of ADVA, among other conditions (the “Senior Credit Facilities Increase”). On October 18, 2022, the Board of Directors of the Company. and the management board of ADVA, agreed on a final draft of a DPLTA between the Company, as the controlling company, and ADVA, as the controlled company. See Note 21 of the Notes to Condensed Consolidated Financial Statements for further information.

The Credit Agreement replaced the Cadence Revolving Credit Agreement and the Wells Fargo Revolving Credit Agreement. In connection with the entry into the Credit Agreement, all outstanding borrowings under such credit agreements have been repaid and the agreements terminated.

As of September 30, 2022, ADTRAN, Inc.’s borrowings under the revolving line of credit were $60.0 million in tranches that mature during the fourth quarter of 2022 and can either be repaid or borrowed again for a one month, three month or six month period. In addition, we may issue up to $25 million in letters of credit against our $100 million dollar total facility. As of September 30, 2022, we had a total of $16.0 million in letters of credit with ADTRAN, Inc. outstanding against our eligible borrowings, leaving a net amount of $24.0 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.

All U.S. borrowings under the Credit Agreement (other than swingline loans, which will bear interest at the Base Rate (as defined below)) will bear interest, at the Company’s option, at a rate per annum equal to (A)(i) 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%, (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%, plus (ii) the applicable rate, ranging from 0.5% to 1.25% (the “Base Rate”), or (B) the sum of the Adjusted Term SOFR (as defined in the Credit Agreement) plus the applicable rate, ranging from 1.4% to 2.15%, provided that such sum is subject to a 0.0% floor (such loans utilizing this interest rate, “SOFR Loans”). All E.U. borrowings under the Credit Agreement (other than swingline loans) will bear interest at a rate per annum equal to the sum of the Euro Interbank Offered Rate as administered by the European Money Markets Institute (or a comparable or successor administrator approved by the Administrative Agent) plus the applicable rate, ranging from 1.5% to 2.25%, provided that such sum is subject to a 0.0% floor (such loans utilizing this interest rate, “EURIBOR Loans”). The applicable rate is based on the consolidated net leverage ratio of the Company and its subsidiaries as determined pursuant to the terms of the Credit Agreement. Default interest is 2.00% per annum in excess of the rate otherwise applicable in the case of any overdue principal or any other overdue amount.

In addition to paying interest on outstanding principal under the Credit Agreement, the Company is required to pay a commitment fee to the lenders under the Credit Agreement in respect of unutilized revolving loan commitments and an additional commitment ticking fee at a rate of 0.25% on the commitment amounts of each lender until the earliest of (i) the date of the Senior Credit Facilities Increase, (ii) the Company’s voluntary termination of the credit facility commitment, and (iii) December 31, 2023. 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 participations in letters of credit at the then applicable rate for SOFR Loans.

The Credit Agreement permits the Company to prepay any or all of the outstanding loans or to reduce the commitments under the Credit Agreement without incurring premiums or penalties (except breakage costs with respect to SOFR Loans and EURIBOR Loans). The Credit Agreement contains 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, pay dividends or other payments on capital stock, make restricted payments, engage in mergers or consolidations, engage in transactions with affiliates, modify its organizational documents, and enter into certain restrictive agreements. It also contains customary events of default (subject to customary cure periods and materiality thresholds). Furthermore, the Credit Agreement requires that the consolidated total net leverage ratio (as defined in the Credit Agreement) of the Company and its subsidiaries tested on the last day of each fiscal quarter not exceed 3.25 to 1.0 through September 30, 2024 and 2.75 to 1.00 from December 31, 2024 and thereafter, subject to certain exceptions. The Credit Agreement also requires that the consolidated interest coverage ratio (as defined in the Credit Agreement) of the Company and its subsidiaries tested on the last day of each fiscal quarter not fall below 3.00 to 1.00. As of September 30, 2022, the Company was in compliance with all material covenants. The Credit Agreement matures in July 2027 but provides the Company with an option to request extensions subject to customary conditions.

Finally, pursuant to a Collateral Agreement, dated as of July 18, 2022, among the Company, ADTRAN, Inc. and the Administrative Agent, ADTRAN, Inc.’s obligations under the Credit Agreement are secured by substantially all of the assets of ADTRAN, Inc. and the Company. In addition, the Company has guaranteed ADTRAN, Inc.’s obligations under the Credit Agreement pursuant to a Guaranty Agreement, dated as of July 18, 2022, by ADTRAN, Inc. and the Company in favor of the Administrative Agent.

 

Nord/LB Revolving Line of Credit

 

August 8, 2022, ADVA entered into a $14.7 million revolving line of credit with Norddeutsche Landesbark - Girozentrale (Nord/LB) that bears interest of Euro Short Term Rate + 1.4% and which matures in August 2023. During the term of the loan, ADVA is obligated to maintain an adjusted net debt to cover ratio that is equal to or less than 2.75. As of September 30, 2022, The Company was in compliance with the adjusted net debt to cover ratio. The revolving line of credit grants Nord/LB a lien on assets of any kind which come into the possession of ADVA. Assets of any kind includes goods, foreign exchange, securities including interest, annuity and

profit notes, collective securities deposits, subscription rights, checks, bills of exchange, bills of lading, storage and loading slips. As of September 30, 2022, ADVA’s borrowings under the revolving line of credit were $14.7 million, with no amounts available for future borrowings.

Syndicated Credit Agreement Working Capital Line of Credit

In September 2018, ADVA entered into a syndicated credit agreement with Bayerische Landesbank and Deutsche Bank AG Branch German Business to borrow up to $9.8 million as part of a working capital line of credit. The interest rate for the working capital line of credit is adjusted periodically based on a defined leverage ratio and is currently EURIBOR plus 1.35% as of September 30, 2022. The working capital line of credit matures in September 2023. As of September 30, 2022, borrowings under the working capital line of credit totaled $9.8 million, with no amounts available for future borrowings.

Prior Wells Fargo Revolving Credit Agreement

On April 1, 2022, ADTRAN, Inc. entered into a Credit Agreement and related Revolving Line of Credit Note (together, the “Prior Wells Revolving Credit Agreement”) in favor of Wells Fargo Bank, National Association, as lender (the “Wells Lender”). The Wells Revolving Credit Agreement provided the Company with a $25.0 million secured revolving credit facility. During the first nine months of 2022, the Company made draws totaling $10.0 million under the Prior Wells Revolving Credit Agreement all of which had been repaid as of September 30, 2022. The Wells Fargo Credit Agreement replaced the Prior Wells Fargo Revolving Credit Agreement and all outstanding borrowings have been repaid and the prior agreement was terminated.

Prior Cadence Revolving Credit Agreement

On May 19, 2022, ADTRAN, Inc., as borrower, modified its Revolving Credit and Security Agreement and related Promissory Note (together, the “Cadence Revolving Credit Agreement”) with Cadence Bank, N.A., as lender (the “Cadence Lender”). The modified Prior Cadence Revolving Credit Agreement provided the Company with a $25.0 million secured revolving credit facility. During the first nine months of 2022, the Company made draws totaling $18.0 million under the Prior Cadence Revolving Credit Agreement all of which had been repaid as of September 30, 2022. The Wells Fargo Credit Agreement replaced the Prior Cadence Revolving Credit Agreement and all outstanding borrowings have been repaid and the prior agreement was terminated.

v3.22.2.2
Notes Payable
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Notes Payable

14. NOTES PAYABLE

The carrying amounts of the Company's notes payable in its Condensed Consolidated Balance Sheets were as follows:

 

 

 

Fair Value as of

 

 

Carrying Value as of

 

 

Carrying Value as of

 

(In thousands)

 

September 30, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

Syndicated credit agreement note payable

 

$

29,611

 

 

$

29,782

 

 

$

 

Deutsche Bank term loan

 

 

 

 

 

 

 

 

 

Total Notes Payable

 

$

29,611

 

 

$

29,782

 

 

$

 

 

Syndicated Credit Agreement Note Payable

 

In September 2018, ADVA entered into a syndicated credit agreement with Bayerische Landesbank and Deutsche Bank AG Branch German Business to borrow $63.7 million. The interest rate for the note payable is adjusted periodically based on a defined leverage ratio and is currently EURIBOR plus 1.35% as of September 30, 2022. The note payable matures in September 2023.

 

Deutsche Bank Term Loan

In October 2019, ADVA entered into a $9.8 million revolving line of credit with Deutsche Bank that bears interest of EURIBOR plus 1.1%. The line of credit matured in September 2022 and was repaid as of September 30, 2022.

v3.22.2.2
Employee Benefit Plans
9 Months Ended
Sep. 30, 2022
Retirement Benefits [Abstract]  
Employee Benefit Plans

15. EMPLOYEE BENEFIT PLANS

 

We maintain defined benefit pension plans covering employees in certain foreign countries. Pension benefit plan obligations are based on various assumptions used by its actuaries in calculating these amounts. These assumptions include discount rates, compensation rate increases, expected return on plan assets, retirement rates and mortality rates. Actual results that differ from the assumptions and changes in assumptions could affect future expenses and obligations. The Company's net pension liability totaled $16.2 million and $11.4 million as of September 30, 2022 and December 31, 2021, respectively.

 

The following table summarizes the components of net periodic pension cost related to a defined benefit pension plan covering employees in certain foreign countries:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Service cost

 

$

478

 

 

$

307

 

 

$

981

 

 

$

931

 

Interest cost

 

 

204

 

 

 

84

 

 

 

638

 

 

 

257

 

Expected return on plan assets

 

 

(465

)

 

 

(460

)

 

 

(1,384

)

 

 

(1,396

)

Amortization of actuarial losses

 

 

81

 

 

 

272

 

 

 

254

 

 

 

825

 

Net periodic pension cost

 

$

298

 

 

$

203

 

 

$

489

 

 

$

617

 

 

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 during the nine months ending September 30, 2022. Contributions to the defined benefit pension plans for the remainder of 2022 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 $0.6 million.

v3.22.2.2
Equity
9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Equity

16. EQUITY

 

Non-Controlling Interest

 

Non-controlling interest represents the equity interest in ADVA held by holders other than the Company. On July 15, 2022, upon the closing of the Business Combination, the ADVA stockholders’ equity ownership percentage in ADVA was 34.57%. The Company has consolidated the financial position and results of operations of ADVA and reflected the proportionate interest held by the ADVA stockholders as non-controlling interest in the accompanying Condensed Consolidated Balance Sheet. As of September 30, 2022, the ADVA stockholders’ equity ownership percentage in ADVA was 34.65%.

 

Stock Repurchase Program

During the nine months ended September 30, 2022, the Company did not repurchase any shares of Company Common Stock and there is no current authorization to repurchase Company Common Stock.

Accumulated Other Comprehensive Loss

The following tables present the changes in accumulated other comprehensive loss, net of tax, by component:

 

 

 

Three Months Ended September 30, 2022

 

(In thousands)

 

Unrealized
(Losses) Gains
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

Balance as of June 30, 2022

 

$

(1,476

)

 

$

(5,713

)

 

$

(9,892

)

 

$

385

 

 

$

(16,696

)

Other comprehensive loss before
   reclassifications

 

 

(254

)

 

 

 

 

 

(23,172

)

 

 

 

 

 

(23,426

)

Amounts reclassified from accumulated other
   comprehensive (loss) income

 

 

(142

)

 

 

(118

)

 

 

 

 

 

 

 

 

(260

)

Net current period other comprehensive (loss) income

 

 

(396

)

 

 

(118

)

 

 

(23,172

)

 

 

 

 

 

(23,686

)

Less: Comprehensive Loss attributable to non-controlling interest, net of tax

 

 

 

 

 

 

 

 

(94

)

 

 

 

 

 

(94

)

Balance as of September 30, 2022

 

$

(1,872

)

 

$

(5,831

)

 

$

(32,970

)

 

$

385

 

 

$

(40,288

)

 

 

 

 

Three Months Ended September 30, 2021

 

(In thousands)

 

Unrealized
Gains
(Losses)
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

Balance as of June 30, 2021

 

$

(255

)

 

$

(9,310

)

 

$

(3,960

)

 

$

385

 

 

$

(13,140

)

Other comprehensive loss before
   reclassifications

 

 

(29

)

 

 

 

 

 

(1,389

)

 

 

 

 

 

(1,418

)

Amounts reclassified from accumulated other
   comprehensive (loss) income

 

 

(32

)

 

 

124

 

 

 

 

 

 

 

 

 

92

 

Net current period other comprehensive (loss) income

 

 

(61

)

 

 

124

 

 

 

(1,389

)

 

 

 

 

 

(1,326

)

Balance as of September 30, 2021

 

$

(316

)

 

$

(9,186

)

 

$

(5,349

)

 

$

385

 

 

$

(14,466

)

 

 

 

Nine Months Ended September 30, 2022

 

(In thousands)

 

Unrealized
Gains
(Losses)
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

As of December 31, 2021

 

$

(552

)

 

$

(5,613

)

 

$

(6,134

)

 

$

385

 

 

$

(11,914

)

Other comprehensive loss before
   reclassifications

 

 

(1,818

)

 

 

 

 

 

(26,930

)

 

 

 

 

 

(28,748

)

Amounts reclassified from accumulated other
   comprehensive income (loss)

 

 

498

 

 

 

(218

)

 

 

 

 

 

 

 

 

280

 

Net current period other comprehensive loss

 

 

(1,320

)

 

 

(218

)

 

 

(26,930

)

 

 

 

 

 

(28,468

)

Less: Comprehensive Loss attributable to non-controlling interest, net of tax

 

 

 

 

 

 

 

 

(94

)

 

 

 

 

 

(94

)

As of September 30, 2022

 

$

(1,872

)

 

$

(5,831

)

 

$

(32,970

)

 

$

385

 

 

$

(40,288

)

 

 

 

Nine Months Ended September 30, 2021

 

(In thousands)

 

Unrealized
Gains
(Losses)
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

As of December 31, 2020

 

$

32

 

 

$

(9,621

)

 

$

(2,435

)

 

$

385

 

 

$

(11,639

)

Other comprehensive loss before
   reclassifications

 

 

(358

)

 

 

 

 

 

(2,914

)

 

 

 

 

 

(3,272

)

Amounts reclassified from accumulated other
   comprehensive income

 

 

10

 

 

 

435

 

 

 

 

 

 

 

 

 

445

 

Net current period other comprehensive (loss) income

 

 

(348

)

 

 

435

 

 

 

(2,914

)

 

 

 

 

 

(2,827

)

As of September 30, 2021

 

$

(316

)

 

$

(9,186

)

 

$

(5,349

)

 

$

385

 

 

$

(14,466

)

 

The following tables present the details of reclassifications out of accumulated other comprehensive loss:

 

 

 

Three Months Ended September 30, 2022

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive
(Loss) Income

 

 

Affected Line Item in the
Statement Where Net
(Loss) Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized loss on sales of securities

 

$

187

 

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial loss

 

 

171

 

 

(1)

Total reclassifications for the period, before tax

 

 

358

 

 

 

Tax benefit

 

 

(98

)

 

 

Total reclassifications for the period, net of tax

 

$

260

 

 

 

(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 September 30, 2021

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive
(Loss) Income

 

 

Affected Line Item in the
Statement Where Net
(Loss) Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized loss on sales of securities

 

$

42

 

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial gain

 

 

(180

)

 

(1)

Total reclassifications for the period, before tax

 

 

(138

)

 

 

Tax expense

 

 

46

 

 

 

Total reclassifications for the period, net of tax

 

$

(92

)

 

 

(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.

 

 

 

Nine Months Ended September 30, 2022

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive
(Loss) Income

 

 

Affected Line Item in the
Statement Where Net (Loss)
Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized gain on sales of securities

 

$

(655

)

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial loss

 

 

316

 

 

(1)

Total reclassifications for the period, before tax

 

 

(339

)

 

 

Tax expense

 

 

59

 

 

 

Total reclassifications for the period, net of tax

 

$

(280

)

 

 

(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.

 

 

 

Nine Months Ended September 30, 2021

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive (Loss)
Income

 

 

Affected Line Item in the
Statement Where Net (Loss)
Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized gain on sales of securities

 

$

(13

)

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial gain

 

 

(630

)

 

(1)

Total reclassifications for the period, before tax

 

 

(643

)

 

 

Tax expense

 

 

198

 

 

 

Total reclassifications for the period, net of tax

 

$

(445

)

 

 

(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 tables present the tax effects related to the change in each component of other comprehensive loss:

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

Unrealized loss on available-for-sale
   securities

 

$

(334

)

 

$

80

 

 

$

(254

)

 

$

(38

)

 

$

9

 

 

$

(29

)

Reclassification adjustment for amounts related to
   available-for-sale investments included in net
   loss

 

 

(187

)

 

 

45

 

 

 

(142

)

 

 

(42

)

 

 

10

 

 

 

(32

)

Reclassification adjustment for amounts related to
   defined benefit plan adjustments included in net
   (loss) gain

 

 

(171

)

 

 

53

 

 

 

(118

)

 

 

180

 

 

 

(56

)

 

 

124

 

Foreign currency translation adjustments

 

 

(23,172

)

 

 

 

 

 

(23,172

)

 

 

(1,389

)

 

 

 

 

 

(1,389

)

Total Other Comprehensive Loss

 

$

(23,864

)

 

$

178

 

 

$

(23,686

)

 

$

(1,289

)

 

$

(37

)

 

$

(1,326

)

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

Unrealized loss on available-for-sale
   securities

 

$

(2,392

)

 

$

574

 

 

$

(1,818

)

 

$

(471

)

 

$

113

 

 

$

(358

)

Reclassification adjustment for amounts related to
   available-for-sale investments included in net
   gain

 

 

655

 

 

 

(157

)

 

 

498

 

 

 

13

 

 

 

(3

)

 

 

10

 

Reclassification adjustment for amounts related to
   defined benefit plan adjustments included in net
  (loss) gain

 

 

(316

)

 

 

98

 

 

 

(218

)

 

 

630

 

 

 

(195

)

 

 

435

 

Foreign currency translation adjustments

 

 

(26,930

)

 

 

 

 

 

(26,930

)

 

 

(2,914

)

 

 

 

 

 

(2,914

)

Total Other Comprehensive Loss

 

$

(28,983

)

 

$

515

 

 

$

(28,468

)

 

$

(2,742

)

 

$

(85

)

 

$

(2,827

)

v3.22.2.2
Loss Per Share
9 Months Ended
Sep. 30, 2022
Earnings Per Share [Abstract]  
Loss Per Share

17. LOSS PER SHARE

The calculation of basic and diluted loss per share is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to ADTRAN Holdings, Inc.

 

$

(41,934

)

 

$

(10,427

)

 

$

(40,918

)

 

$

(4,445

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

73,036

 

 

 

48,609

 

 

 

57,175

 

 

 

48,470

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

 

 

 

 

 

 

 

PSUs, RSUs and restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – diluted

 

 

73,036

 

 

 

48,609

 

 

 

57,175

 

 

 

48,470

 

Loss per share attributable to ADTRAN Holdings, Inc. – basic

 

$

(0.57

)

 

$

(0.21

)

 

$

(0.72

)

 

$

(0.09

)

Loss per share attributable to ADTRAN Holdings, Inc. – diluted

 

$

(0.57

)

 

$

(0.21

)

 

$

(0.72

)

 

$

(0.09

)

 

For the three months ended September 30, 2022 and 2021, four thousand and less than one thousand shares, respectively, and for the nine months ended September 30, 2022 and 2021, four thousand shares 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 September 30, 2022 and 2021, 0.1 million and 0.2 million stock options, respectively, and for the nine months ended September 30, 2022 and 2021, 0.2 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.

v3.22.2.2
Segment Information
9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information

18. 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. 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 Company supports traditional chassis-based network solutions, such as the Total Access 5000 and hiX 5600. The Company accelerates the industry’s transition to open, disaggregated fiber access solutions with our SDX Series. Data is aggregated via its XG400 product family and synchronized by its Oscilloquartz offerings (“Access and Aggregation Solutions”). All resulting traffic requires transport through fiber-based networks as supported by its FSP 3000 and MicroMux product families while the underlying infrastructure is monitored by its ALM product offering (“Optical Networking Solutions”). The Company's customers can use its Mosaic and Ensemble software suites to manage and orchestrate its complete portfolio of subscriber solutions, access and aggregation solutions and optical networking solutions. The Mosaic and Ensemble software suites includes a mix of orchestration and management solutions that simplify the deployment and virtualization of next generation fiber networks.

 

The Services & Support segment offers a comprehensive portfolio of network design, implementation, maintenance and cloud-hosted services supporting its Subscriber, Access and 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 its Mosaic One platform that manages end-to-end network and service optimization for both fiber access infrastructure and mesh Wi-Fi connectivity. We back these services with a global support organization that offers on-site and off-site support services with varying SLAs. By pairing the Company's network solutions with its global services and support organization, customers can turn to the Company as their single turnkey partner to assist with the deployment and maintenance of modern fiber-based networks to connect homes, businesses and datacenters with the metro or network core.

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 (loss) gain, other income, net and income tax benefit (expense) 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 its reportable segments:

 

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Revenue

 

 

Gross Profit

 

 

Revenue

 

 

Gross Profit

 

Network Solutions

 

$

304,940

 

 

$

82,334

 

 

$

120,767

 

 

$

39,738

 

Services & Support

 

 

35,769

 

 

 

20,693

 

 

 

17,314

 

 

 

7,935

 

Total

 

$

340,709

 

 

$

103,027

 

 

$

138,081

 

 

$

47,673

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Revenue

 

 

Gross Profit

 

 

Revenue

 

 

Gross Profit

 

Network Solutions

 

$

599,306

 

 

$

186,126

 

 

$

360,025

 

 

$

143,981

 

Services & Support

 

 

67,959

 

 

 

33,723

 

 

 

48,821

 

 

 

19,961

 

Total

 

$

667,265

 

 

$

219,849

 

 

$

408,846

 

 

$

163,942

 

 

Revenue by Category

In addition to its reportable segments, revenue is also reported for the following three categories – Subscriber Solutions, Access & Aggregation Solutions, and Optical Networking Solutions.

Prior to the Business Combination with ADVA on July 15, 2022, ADTRAN reported revenue across the following three categories: (1) Access & Aggregation, (2) Subscriber Solutions & Experience and (3) Traditional & Other Products. Following the Business Combination with ADVA, we have recast these revenues such that ADTRAN’s former Access & Aggregation revenue is combined with a portion of the applicable ADVA solutions to create Access & Aggregation Solutions, ADTRAN’s former Subscriber Solutions & Experience revenue is combined with a portion of the applicable ADVA 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 is a new revenue category added to represent a meaningful portion of ADVA’s 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 table below presents revenue information by category. Prior year amounts presented below have been reclassified to conform to the current period revenue category presentation:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Subscriber Solutions

 

$

133,675

 

 

$

46,867

 

 

$

270,147

 

 

$

152,489

 

Access & Aggregation Solutions

 

 

88,189

 

 

 

91,214

 

 

 

278,273

 

 

 

256,357

 

Optical Networking Solutions

 

 

118,845

 

 

 

 

 

 

118,845

 

 

 

 

Total

 

$

340,709

 

 

$

138,081

 

 

$

667,265

 

 

$

408,846

 

 

 

Revenue by Geographic Area

 

The following table presents revenue information by geographic area:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

United States

 

$

169,669

 

 

$

91,868

 

 

$

374,470

 

 

$

273,009

 

United Kingdom

 

 

64,234

 

 

 

12,504

 

 

 

123,477

 

 

 

34,006

 

Germany

 

 

46,569

 

 

 

17,782

 

 

 

71,945

 

 

 

50,737

 

Other international

 

 

60,237

 

 

 

15,927

 

 

 

97,373

 

 

 

51,094

 

Total

 

$

340,709

 

 

$

138,081

 

 

$

667,265

 

 

$

408,846

 

v3.22.2.2
Liability for Warranty Returns
9 Months Ended
Sep. 30, 2022
Product Warranties Disclosures [Abstract]  
Liability for Warranty Returns

19. 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 $8.6 million and $5.4 million as of September 30, 2022 and December 31, 2021, respectively, and is included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets. During the three months ended September 30, 2021, the Company had a net reversal of prior provisions related to warranty expirations the impact of which is reflected in the table below. The warranty expense and write-off activity for the three and nine months ended September 30, 2022 and 2021 are summarized as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Balance at beginning of period

 

$

4,842

 

 

$

5,997

 

 

$

5,403

 

 

$

7,146

 

Plus: ADVA acquisition

 

 

3,756

 

 

 

 

 

 

3,756

 

 

 

 

Plus: Amounts charged to cost and expenses

 

 

616

 

 

 

472

 

 

 

1,727

 

 

 

253

 

Less: Deductions

 

 

(613

)

 

 

(822

)

 

 

(2,285

)

 

 

(1,752

)

Balance at end of period

 

$

8,601

 

 

$

5,647

 

 

$

8,601

 

 

$

5,647

 

v3.22.2.2
Commitments and Contingencies
9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

20. COMMITMENTS AND CONTINGENCIES

 

Legal Maters

 

From time to time we are 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, we are unable to predict the outcome of or estimate the possible loss or range of loss, if any, associated with such legal matters.

 

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 September 30, 2022 and December 31, 2021, we had commitments related to these bonds totaling $21.1 million and $22.9 million, respectively, which expire at various dates through April 2025. 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 Commitments

 

We purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. Our inventory purchase commitments are for short-term product manufacturing requirements as well as for commitments to suppliers to secure manufacturing capacity. Certain of our inventory purchase commitments with contract manufacturers and suppliers relate to arrangements to secure supply and pricing for certain product components for multi-year periods. As of September 30, 2022, purchase commitments totaled $454.1 million.

 

Investment Commitment

 

We have committed to invest up to an aggregate of $5.0 million in a private equity fund, of which $4.9 million has been invested as of September 30, 2022.

v3.22.2.2
Subsequent Events
9 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events

21. SUBSEQUENT EVENTS

Dividend Approval

On November 7, 2022, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to the Company’s stockholders of record as of the close of business on November 22, 2022. The payment date will be December 6, 2022 in the aggregate amount of approximately $7.0 million.

Assumed ADVA Options

Pursuant to the Business Combination which closed on July 15, 2022, ADVA stock option holders were entitled to have their ADVA stock options assumed by ADTRAN Holdings, Inc. (applying the exchange ratio in the Business Combination Agreement), thereafter representing options to acquire stock of ADTRAN Holdings, Inc. The period in which such options could be assumed ended July 22, 2022. However, that period was subsequently extended and a total of 0.1 million shares of ADTRAN Holdings, Inc. stock are subject to additional assumed ADVA options. The fair value of the stock options assumed by ADTRAN Holdings, Inc. will be estimated using a Black-Scholes model. The valuation of this component of consideration is not yet complete.

Approval of Proposed Domination and Profit and Loss Transfer Agreement

On October 18, 2022, the Board of Directors of the Company and the management board of ADVA, agreed on a final draft of a domination and profit and loss transfer agreement (the “DPLTA”) between the Company, as the controlling company, and ADVA, as the controlled company. The parties’ execution of the DPLTA remains subject to the approval of the DPLTA by shareholders of ADVA with 75% of the votes cast in an extraordinary general meeting, which is scheduled to be held on November 30, 2022. The Company currently holds 33,957,538 shares of ADVA, representing 65.35% of ADVA’s outstanding shares as of September 30, 2022.

Subject to the approval of the DPLTA shareholders and the subsequent registration of the DPLTA with the commercial register of the local court at ADVA’s registered offices, the Company will offer, at the election of each shareholder of ADVA (other than the Company), (i) to acquire the shares of such shareholder for a compensation (Abfindung) of EUR 17.21 per share pursuant to Sec. 305 German Stock Corporation Akt (Aktiengesetz, “AktG”), or (ii) to pay such shareholder a fixed annual recurring compensation payment (Ausgleichszahlung) pursuant to Sec. 304 AktG in an amount of EUR 0.59 (EUR 0.52 net under the current taxation regime), subject to adjustment prior to execution of the DPLTA due to changes in interest rates and borrowing costs prior to November 30, 2022, which is the reference date for the valuation of ADVA shares ("Annual Recurring Compensation").

The amount of the Annual Recurring Compensation payment of EUR 0.59 (EUR 0.52 net) is determined on the basis of a rounded annuity interest rate (Verrentungszinssatz) of 3.00% and still subject to an adjustment in case of a change of interest rates and borrowing costs prior to November 30, 2022 which is the reference date for the valuation. An increase of borrowing costs could lead to an increase of the Annual Recurring Compensation payment. The potential increase ranges from EUR 0.62 (EUR 0.54 net), if the annuity interest rate is increased by 25 basis points to 3.25%, up to an Annual Recurring Compensation payment at the amount of EUR 1.00 (EUR 0.87 net), if the annuity interest rate is increased by 250 basis points to 5.50%.

Board Approval Purchase of ADVA Common Stock

On October 18, 2022, the Company's Board of Directors authorized the Company to purchase additional shares of ADVA through open market purchases not to exceed 15,346,544 shares.

 

Foreign Currency Hedging Agreement

On November 3, 2022, the Company entered into a Euro/U.S. dollar cross-currency swap arrangement (the “Swap”) with Wells Fargo Bank, N.A. (the “Hedge Counterparty”). The Swap, 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 Swap, 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 $0.98286 to $1.03290. The aggregate amount of $160.0 million will be divided into eight quarterly tranches of $20.0 million. 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 Swap 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.

 

v3.22.2.2
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2022
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. Certain prior year amounts have been reclassified to conform to the current period presentation. The December 31, 2021 Condensed Consolidated Balance Sheet is derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

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, Inc. Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022.

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, estimated pension liability and fair value of investments. 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 the SARS-CoV-2 coronavirus/COVID-19 global pandemic (or variants of the SARS-CoV-2 coronavirus), supply chain constraints, inflationary pressures, the energy crisis, currency fluctuations and political tensions as of September 30, 2022 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 assets, revenue recognition and costs of revenue. Future conditions related to the magnitude and duration of the COVID-19 pandemic, as well as other factors, including supply chain constraints and inflationary pressures could result in further impacts to the Company's consolidated financial statements in future reporting periods.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which would require an acquirer to recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its pre-acquisition financial statements in accordance with Topic 606, Revenue Recognition. The Company early adopted ASU 2021-08 on July 1, 2022 and the standard was applied retrospectively beginning with January 1, 2022. The effect of the adoption of this standard on the Company's Condensed Consolidated Financial Statements as of the date of this report is included in Note 2 of the Notes to Condensed Consolidated Financial Statements.

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted

There are currently no accounting pronouncements not yet adopted that had a material effect on the Condensed Consolidated Financial Statements.

v3.22.2.2
Business Combination (Tables)
9 Months Ended
Sep. 30, 2022
Business Combinations [Abstract]  
Summary of Purchase Price for Business Combination

The following table summarizes the purchase price for the ADVA business combination:

 

(In thousands, except shares, share price and exchange ratio)

 

Purchase Price

 

ADVA shares exchanged

 

 

33,957,538

 

Exchange ratio

 

 

0.8244

 

ADTRAN Holdings, Inc. shares issued

 

 

27,994,595

 

ADTRAN Holdings, Inc. share price on July 15, 2022

 

$

20.20

 

Purchase price paid for ADVA shares

 

$

565,491

 

Equity compensation (1)

 

$

12,769

 

Total purchase price

 

$

578,260

 

(1) Represents the portion of replacement share-based payment awards that relates to pre-combination vesting.

Summary of Purchase Price Allocation of Assets Acquired and Liabilities Assumed The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed in the acquisition of ADVA (in thousands):

 

(In thousands)

 

 

 

Total purchase price

 

$

578,260

 

Non-controlling interest

 

$

316,415

 

Net Assets:

 

 

 

Cash and cash equivalents

 

$

44,003

 

Accounts receivable

 

 

114,659

 

Other receivables

 

 

1,457

 

Inventory

 

 

200,532

 

Prepaid expenses and other current assets

 

 

29,474

 

Property plant and equipment

 

 

52,796

 

Deferred tax assets

 

 

1,599

 

Intangibles

 

 

405,385

 

Other non-current assets

 

 

30,588

 

Accounts payable

 

 

(98,587

)

Current unearned revenue

 

 

(26,047

)

Accrued expenses and other liabilities

 

 

(59,600

)

Current portion of notes payable

 

 

(25,254

)

Income tax payable

 

 

(1,400

)

Non-current unearned revenue

 

 

(11,498

)

Pension liability

 

 

(6,820

)

Other non-current liabilities

 

 

(6,094

)

Non-current portion of revolving credit agreements and notes payable

 

 

(15,250

)

Non-current lease obligations

 

 

(20,046

)

Deferred tax liabilities

 

 

(74,379

)

Total net assets acquired

 

$

535,518

 

Goodwill

 

$

359,157

 

Summary of Fair Value of Intangible Assets Acquired

The fair value of the intangible assets acquired as of the acquisition date:

 

(In thousands)

Estimated-average useful life (in years) (1)

 

 

Fair value

 

 

Income Statement Amortization Classification

Developed technology

 

8.5

 

 

$

293,530

 

 

Cost of revenue - Network Solutions

Backlog

 

1.4

 

 

 

52,165

 

 

Cost of revenue - Network Solutions and Services & Support

Customer relationships

 

10.5

 

 

 

32,704

 

 

Selling, general and administrative expenses

Trade name

 

2.8

 

 

 

26,986

 

 

Selling, general and administrative expenses

Total

 

 

 

$

405,385

 

 

 

 

(1) Determination of the weighted average period of the individual categories of intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with definite lives is recognized over the period of time the assets are expected to contribute to future cash flows.

Summary of Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results of operations for ADTRAN and ADVA as though the Business Combination had occurred on January 1, 2021.

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

(In thousands)

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

$

368,192

 

 

$

317,067

 

 

$

1,053,510

 

 

$

942,003

 

Net income (loss)

$

(48,084

)

 

$

(44,154

)

 

$

(60,494

)

 

$

(133,321

)

v3.22.2.2
Cash, Cash Equivalents and Restricted Cash (Tables)
9 Months Ended
Sep. 30, 2022
Cash and Cash Equivalents [Abstract]  
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Cash and cash equivalents

 

$

111,099

 

 

$

56,603

 

Restricted cash

 

 

 

 

 

215

 

Cash, cash equivalents and restricted cash

 

$

111,099

 

 

$

56,818

 

v3.22.2.2
Revenue (Tables)
9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
Disaggregate of Revenue by Reportable Segment and Revenue Category

The following tables disaggregate revenue by reportable segment and revenue category. Prior year amounts presented below have been reclassified to conform to the current period revenue category presentation:

 

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

125,338

 

 

$

8,337

 

 

$

133,675

 

 

$

42,704

 

 

$

4,163

 

 

$

46,867

 

Access & Aggregation Solutions

 

 

76,591

 

 

 

11,598

 

 

 

88,189

 

 

 

78,063

 

 

 

13,151

 

 

 

91,214

 

Optical Networking Solutions

 

 

103,011

 

 

 

15,834

 

 

 

118,845

 

 

 

 

 

 

 

 

 

 

Total

 

$

304,940

 

 

$

35,769

 

 

$

340,709

 

 

$

120,767

 

 

$

17,314

 

 

$

138,081

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

252,899

 

 

$

17,248

 

 

$

270,147

 

 

$

140,257

 

 

$

12,232

 

 

$

152,489

 

Access & Aggregation Solutions

 

 

243,396

 

 

 

34,877

 

 

 

278,273

 

 

 

219,768

 

 

 

36,589

 

 

 

256,357

 

Optical Networking Solutions

 

 

103,011

 

 

 

15,834

 

 

 

118,845

 

 

 

 

 

 

 

 

 

 

Total

 

$

599,306

 

 

$

67,959

 

 

$

667,265

 

 

$

360,025

 

 

$

48,821

 

 

$

408,846

 

 

The table below presents revenue information by category. Prior year amounts presented below have been reclassified to conform to the current period revenue category presentation:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Subscriber Solutions

 

$

133,675

 

 

$

46,867

 

 

$

270,147

 

 

$

152,489

 

Access & Aggregation Solutions

 

 

88,189

 

 

 

91,214

 

 

 

278,273

 

 

 

256,357

 

Optical Networking Solutions

 

 

118,845

 

 

 

 

 

 

118,845

 

 

 

 

Total

 

$

340,709

 

 

$

138,081

 

 

$

667,265

 

 

$

408,846

 

 

 

Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers

The following table provides information about receivables, contract assets and unearned revenue from contracts with customers:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Accounts receivable, net

 

$

302,401

 

 

$

158,742

 

Contract assets(1)

 

$

1,790

 

 

$

464

 

Unearned revenue

 

$

40,993

 

 

$

17,737

 

Non-current unearned revenue

 

$

18,269

 

 

$

9,271

 

v3.22.2.2
Income Taxes (Tables)
9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Summary of Supplemental Balance Sheet Information Related to Deferred Tax Assets (Liabilities)

Supplemental balance sheet information related to deferred tax assets (liabilities) is as follows:

 

 

 

As of September 30, 2022

 

(In thousands)

 

Deferred Tax Assets (Liabilities)

 

 

Valuation Allowance

 

 

Deferred Tax Liabilities, net

 

Domestic

 

$

68,723

 

 

$

(64,054

)

 

$

4,669

 

International

 

 

(39,493

)

 

 

(2,060

)

 

 

(41,553

)

Total

 

$

29,230

 

 

$

(66,114

)

 

$

(36,884

)

 

 

 

As of December 31, 2021

 

(In thousands)

 

Deferred Tax Assets

 

 

Valuation Allowance

 

 

Deferred Tax Assets, net

 

Domestic

 

$

48,265

 

 

$

(48,265

)

 

$

 

International

 

 

11,378

 

 

 

(2,299

)

 

 

9,079

 

Total

 

$

59,643

 

 

$

(50,564

)

 

$

9,079

 

v3.22.2.2
Stock-Based Compensation (Tables)
9 Months Ended
Sep. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Stock-Based Compensation Expense Related to Stock Options, RSUs and Restricted Stock

The following table summarizes the RSUs and restricted stock outstanding as of December 31, 2021 and September 30, 2022 and the changes that occurred during the nine months ended September 30, 2022:

 

 

 

Number of
Shares
(in thousands)

 

 

Weighted Avg. Grant Date Fair Value
(per share)

 

Unvested RSUs and restricted stock outstanding, December 31, 2021

 

 

1,930

 

 

$

14.11

 

RSUs and restricted stock granted

 

 

545

 

 

$

19.96

 

RSUs and restricted stock vested

 

 

(20

)

 

$

13.67

 

RSUs and restricted stock forfeited

 

 

(46

)

 

$

14.18

 

Unvested RSUs and restricted stock outstanding, September 30, 2022

 

 

2,409

 

 

$

17.36

 

Summary of Stock Options Outstanding

The following table summarizes ADTRAN Holdings, Inc. stock options outstanding as of December 31, 2021 and September 30, 2022 and the changes that occurred during the nine months ended September 30, 2022:

 

 

 

Number of
Stock Options
(in thousands)

 

 

Weighted Avg.
Exercise Price
(per share)

 

 

Weighted Avg.
Remaining
Contractual
Life
(in years)

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Stock options outstanding, December 31, 2021

 

 

1,721

 

 

$

19.37

 

 

 

2.4

 

 

$

6,669

 

ADVA stock options replaced by ADTRAN Holdings stock options(1)

 

 

1,980

 

 

$

11.16

 

 

 

 

 

 

 

Stock options exercised

 

 

(439

)

 

$

16.16

 

 

 

 

 

 

 

Stock options forfeited

 

 

(12

)

 

$

11.08

 

 

 

 

 

 

 

Stock options expired

 

 

(70

)

 

$

26.38

 

 

 

 

 

 

 

Stock options outstanding, September 30, 2022

 

 

3,180

 

 

$

14.58

 

 

 

3.5

 

 

$

17,839

 

Stock options exercisable, September 30, 2022

 

 

1,627

 

 

$

16.85

 

 

 

2.0

 

 

$

6,375

 

(1) Each ADVA stock option surrendered was exchanged for 0.8244 ADTRAN Holdings stock options.

ADVA Optical Networking SE [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Summary of Stock Options Outstanding

The following table summarizes ADVA Optical Networking SE stock options outstanding as of July 15, 2022 (the Business Combination closing date) and September 30, 2022 and the changes that occurred between July 15, 2022 and September 30, 2022:

 

 

 

Number of
Stock Options
(in thousands)

 

 

Weighted Avg.
Exercise Price
(per share)

 

 

Weighted Avg.
Remaining
Contractual
Life
(in years)

 

 

Aggregate
Intrinsic Value
(in thousands)

 

Stock options outstanding, July 15, 2022

 

 

2,745

 

 

$

9.09

 

 

 

4.6

 

 

$

27,205

 

Stock options exercised

 

 

(56

)

 

$

6.79

 

 

 

 

 

 

 

ADVA stock options replaced by ADTRAN Holdings stock options(1)

 

 

(2,403

)

 

$

9.25

 

 

 

 

 

 

 

Stock options forfeited

 

 

(4

)

 

$

7.91

 

 

 

 

 

 

 

Stock options outstanding, September 30, 2022

 

 

282

 

 

$

8.45

 

 

 

3.9

 

 

$

2,976

 

Stock options exercisable, September 30, 2022

 

 

32

 

 

$

7.72

 

 

 

1.2

 

 

$

363

 

(1) Each ADVA stock option surrendered was exchanged for 0.8244 ADTRAN Holdings stock options.

v3.22.2.2
Investments (Tables)
9 Months Ended
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Debt Securities and Other Investments, Included on Condensed Consolidated Balance Sheet and Recorded at Fair Value

Debt Securities and Other Investments

The following debt securities and other investments were included on the Condensed Consolidated Balance Sheets and recorded at fair value:

 

 

 

As of September 30, 2022

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

9,358

 

 

$

 

 

$

(374

)

 

$

8,984

 

Municipal fixed-rate bonds

 

 

1,411

 

 

 

 

 

 

(54

)

 

 

1,357

 

Asset-backed bonds

 

 

2,988

 

 

 

 

 

 

(77

)

 

 

2,911

 

Mortgage/Agency-backed bonds

 

 

4,720

 

 

 

 

 

 

(280

)

 

 

4,440

 

U.S. government bonds

 

 

11,231

 

 

 

 

 

 

(642

)

 

 

10,589

 

Foreign government bonds

 

 

409

 

 

 

 

 

 

(27

)

 

 

382

 

Available-for-sale debt securities held at fair value

 

$

30,117

 

 

$

 

 

$

(1,454

)

 

$

28,663

 

 

 

 

As of December 31, 2021

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

10,776

 

 

$

6

 

 

$

(35

)

 

$

10,747

 

Municipal fixed-rate bonds

 

 

1,553

 

 

 

2

 

 

 

(4

)

 

 

1,551

 

Asset-backed bonds

 

 

322

 

 

 

3

 

 

 

(3

)

 

 

322

 

Mortgage/Agency-backed bonds

 

 

4,754

 

 

 

15

 

 

 

(33

)

 

 

4,736

 

U.S. government bonds

 

 

12,251

 

 

 

12

 

 

 

(92

)

 

 

12,171

 

Foreign government bonds

 

 

543

 

 

 

 

 

 

(4

)

 

 

539

 

Available-for-sale debt securities held at fair value

 

$

30,199

 

 

$

38

 

 

$

(171

)

 

$

30,066

 

 

Contractual Maturities of Debt Securities and Other Investments

The contractual maturities related to debt securities and other investments were as follows:

 

 

 

As of September 30, 2022

(In thousands)

 

Corporate
bonds

 

 

Municipal
fixed-rate
bonds

 

 

Asset-
backed
bonds

 

 

Mortgage/
Agency-
backed bonds

 

 

U.S. government
bonds

 

 

Foreign government bonds

 

 

Less than one year

 

$

96

 

 

$

525

 

 

$

 

 

$

182

 

 

$

 

 

$

 

 

One to two years

 

 

5,371

 

 

 

722

 

 

 

95

 

 

 

464

 

 

 

7,421

 

 

 

275

 

 

Two to three years

 

 

3,517

 

 

 

110

 

 

 

715

 

 

 

1,321

 

 

 

2,889

 

 

 

107

 

 

Three to five years

 

 

 

 

 

 

 

 

1,306

 

 

 

166

 

 

 

279

 

 

 

 

 

Five to ten years

 

 

 

 

 

 

 

 

382

 

 

 

810

 

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

413

 

 

 

1,497

 

 

 

 

 

 

 

 

Total

 

$

8,984

 

 

$

1,357

 

 

$

2,911

 

 

$

4,440

 

 

$

10,589

 

 

$

382

 

 

Gross Realized Gains and Losses on Sale of Debt Securities The following table presents the gross realized gains and losses related to its debt securities:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

     Gross realized gain on debt securities

 

$

1

 

 

$

22

 

 

$

14

 

 

$

206

 

     Gross realized loss on debt securities

 

 

(116

)

 

 

(17

)

 

 

(242

)

 

 

(53

)

Total (loss) gain recognized, net

 

$

(115

)

 

$

5

 

 

$

(228

)

 

$

153

 

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

     Realized (loss) gain on equity securities sold

 

$

(1,358

)

 

$

 

 

$

(1,675

)

 

$

(55

)

     Unrealized (loss) gain on equity securities held

 

 

(1,217

)

 

 

(68

)

 

 

(8,849

)

 

 

2,844

 

Total (loss) gain recognized, net

 

$

(2,575

)

 

$

(68

)

 

$

(10,524

)

 

$

2,789

 

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 September 30, 2022 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices
in Active
Market for
Identical
Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

698

 

 

$

698

 

 

$

 

 

$

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

8,984

 

 

 

 

 

 

8,984

 

 

 

 

Municipal fixed-rate bonds

 

 

1,357

 

 

 

 

 

 

1,357

 

 

 

 

Asset-backed bonds

 

 

2,911

 

 

 

 

 

 

2,911

 

 

 

 

Mortgage/Agency-backed bonds

 

 

4,440

 

 

 

 

 

 

4,440

 

 

 

 

U.S. government bonds

 

 

10,589

 

 

 

10,589

 

 

 

 

 

 

 

Foreign government securities

 

 

382

 

 

 

 

 

 

382

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

760

 

 

 

760

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

21,511

 

 

 

21,511

 

 

 

 

 

 

 

Total

 

$

51,632

 

 

$

33,558

 

 

$

18,074

 

 

$

 

 

 

 

 

 

 

Fair Value Measurements as of December 31, 2021 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices
in Active
Market for
Identical
Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

652

 

 

$

652

 

 

$

 

 

$

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

10,747

 

 

 

 

 

 

10,747

 

 

 

 

Municipal fixed-rate bonds

 

 

1,551

 

 

 

 

 

 

1,551

 

 

 

 

Asset-backed bonds

 

 

322

 

 

 

 

 

 

322

 

 

 

 

Mortgage/Agency-backed bonds

 

 

4,736

 

 

 

 

 

 

4,736

 

 

 

 

U.S. government bonds

 

 

12,171

 

 

 

12,171

 

 

 

 

 

 

 

Foreign government bonds

 

 

539

 

 

 

 

 

 

539

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

12,606

 

 

 

12,606

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

26,935

 

 

 

26,935

 

 

 

 

 

 

 

Total

 

$

70,259

 

 

$

52,364

 

 

$

17,895

 

 

$

 

v3.22.2.2
Inventory (Tables)
9 Months Ended
Sep. 30, 2022
Inventory Disclosure [Abstract]  
Components of Inventory

Inventory consisted of the following:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Raw materials

 

$

177,554

 

 

$

74,709

 

Work in process

 

 

10,625

 

 

 

2,143

 

Finished goods

 

 

227,984

 

 

 

63,039

 

Total inventory, net

 

$

416,163

 

 

$

139,891

 

 

v3.22.2.2
Property, Plant and Equipment (Tables)
9 Months Ended
Sep. 30, 2022
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment

Property, plant and equipment consisted of the following:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Engineering and other equipment

 

$

162,445

 

 

$

134,771

 

Building

 

 

80,807

 

 

 

68,157

 

Computer hardware and software

 

 

79,990

 

 

 

72,274

 

Building and land improvements

 

 

40,132

 

 

 

35,578

 

Furniture and fixtures

 

 

20,891

 

 

 

19,917

 

Land

 

 

5,298

 

 

 

4,575

 

Other assets

 

 

4,835

 

 

 

 

     Total property, plant and equipment

 

 

394,398

 

 

 

335,272

 

Less: accumulated depreciation

 

 

(289,821

)

 

 

(279,506

)

     Total property, plant and equipment, net

 

$

104,577

 

 

$

55,766

 

v3.22.2.2
Goodwill (Tables)
9 Months Ended
Sep. 30, 2022
Goodwill Disclosure [Abstract]  
Summary of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 are as follows:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

As of December 31, 2021

 

$

6,568

 

 

$

400

 

 

$

6,968

 

Goodwill from Business Combination with ADVA

 

 

270,568

 

 

 

88,589

 

 

 

359,157

 

Foreign currency translation adjustments

 

 

(6,220

)

 

 

(2,036

)

 

 

(8,256

)

As of September 30, 2022

 

$

270,916

 

 

$

86,953

 

 

$

357,869

 

 

v3.22.2.2
Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2022
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
Summary of Intangible Assets

Intangible assets consisted of the following:

 

 

 

 

 

As of September 30, 2022

 

 

As of December 31, 2021

 

(In thousands)

Weighted Average Useful Life
(in years)

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Book Value

 

Customer relationships

 

10.9

 

 

$

52,139

 

 

$

(11,207

)

 

$

40,932

 

 

$

20,796

 

 

$

(9,906

)

 

$

10,890

 

Backlog

 

1.4

 

 

 

50,966

 

 

 

(9,325

)

 

 

41,641

 

 

 

 

 

 

 

 

 

 

Developed technology

 

8.5

 

 

 

294,983

 

 

 

(11,565

)

 

 

283,418

 

 

 

8,200

 

 

 

(3,683

)

 

 

4,517

 

Licensed technology

 

9.0

 

 

 

5,900

 

 

 

(2,977

)

 

 

2,923

 

 

 

5,900

 

 

 

(2,486

)

 

 

3,414

 

Licensing agreements

 

8.5

 

 

 

560

 

 

 

(280

)

 

 

280

 

 

 

560

 

 

 

(225

)

 

 

335

 

Patents

 

7.3

 

 

 

500

 

 

 

(414

)

 

 

86

 

 

 

500

 

 

 

(363

)

 

 

137

 

Trade names

 

2.8

 

 

 

26,575

 

 

 

(2,280

)

 

 

24,295

 

 

 

210

 

 

 

(210

)

 

 

 

     Total

 

 

 

$

431,623

 

 

$

(38,048

)

 

$

393,575

 

 

$

36,166

 

 

$

(16,873

)

 

$

19,293

 

Estimated Future Amortization Expense Related to Intangible Assets

Estimated future amortization expense of intangible assets was as follows:

 

 

 

As of

 

(In thousands)

 

September 30, 2022

 

2022

 

$

23,691

 

2023

 

 

75,677

 

2024

 

 

53,021

 

2025

 

 

42,623

 

2026

 

 

39,505

 

Thereafter

 

 

159,058

 

     Total

 

$

393,575

 

v3.22.2.2
Leases (Tables)
9 Months Ended
Sep. 30, 2022
Leases [Abstract]  
Schedule of Supplemental Balance Sheet Information Related to Operating Leases Supplemental balance sheet information related to operating leases is as follows:

 

(In thousands)

 

Classification

 

September 30, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

 

 

Operating lease asset

 

Other assets

 

$

28,081

 

 

$

4,922

 

   Total lease asset

 

 

 

$

28,081

 

 

$

4,922

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current operating lease liability

 

Accrued expenses

 

$

6,604

 

 

$

1,730

 

Non-current operating lease liability

 

Non-current lease obligations

 

 

21,490

 

 

 

3,269

 

   Total lease liability

 

 

 

$

28,094

 

 

$

4,999

 

Components of Lease Expense included in Consolidated Statements of Loss

The components of lease expense included in the Condensed Consolidated Statements of Loss were as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Selling, general and administrative expenses

 

$

1,444

 

 

$

196

 

 

$

1,704

 

 

$

645

 

Research and development expenses

 

 

228

 

 

 

261

 

 

 

719

 

 

 

815

 

Cost of sales

 

 

20

 

 

 

14

 

 

 

59

 

 

 

38

 

Total operating lease expense

 

$

1,692

 

 

$

471

 

 

$

2,482

 

 

$

1,498

 

Schedule of Maturity of Operating Lease Liabilities

As of September 30, 2022 and December 31, 2021, operating lease liabilities included on the Condensed Consolidated Balance Sheets by future maturity were as follows:

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

2022

 

$

2,209

 

 

$

1,767

 

2023

 

 

8,421

 

 

 

1,419

 

2024

 

 

7,098

 

 

 

1,188

 

2025

 

 

5,838

 

 

 

710

 

2026

 

 

3,354

 

 

 

 

Thereafter

 

 

5,107

 

 

 

 

Total lease payments

 

 

32,027

 

 

 

5,084

 

Less: Interest

 

 

(3,933

)

 

 

(85

)

Present value of lease liabilities

 

$

28,094

 

 

$

4,999

 

Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates The following table provides information about our weighted average lease terms and weighted average discount rates:

 

 

 

As of September 30, 2022

 

Weighted average remaining lease term (in years)

 

 

 

     Operating leases with USD functional currency

 

 

1.6

 

     Operating leases with Euro functional currency

 

 

4.5

 

Weighted average discount rate

 

 

 

     Operating leases with USD functional currency

 

 

3.93

%

     Operating leases with Euro functional currency

 

 

4.05

%

Net Investment in Sales-Type Leases

We are the lessor in sales-type lease arrangements for network equipment, which consisted of the following:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Current minimum lease payments receivable(1)

 

$

11

 

 

$

92

 

Non-current minimum lease payments receivable(2)

 

 

 

 

 

4

 

     Total minimum lease payments receivable

 

 

11

 

 

 

96

 

Less: Current unearned revenue(1)

 

 

5

 

 

 

70

 

Less: Non-current unearned revenue(2)

 

 

 

 

 

1

 

     Net investment in sales-type leases

 

$

6

 

 

$

25

 

 

(1)
Included in other receivables on the Condensed Consolidated Balance Sheets.
(2)
Included in other assets on the Condensed Consolidated Balance Sheets.
v3.22.2.2
Revolving Credit Agreement (Tables)
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Carrying Amount of Revolving Agreement

The carrying amounts of the Company's revolving credit agreements in its Condensed Consolidated Balance Sheets were as follows:

 

 

 

As of

 

 

As of

 

(In thousands)

 

September 30, 2022

 

 

December 31, 2021

 

Wells Fargo credit agreement

 

$

60,000

 

 

$

 

Nord/LB revolving line of credit

 

 

14,702

 

 

 

 

Syndicated credit agreement working capital line of credit

 

 

9,801

 

 

 

 

Wells Fargo revolving credit agreement

 

 

 

 

 

 

Cadence revolving credit agreement

 

 

 

 

 

 

Total revolving credit agreements

 

$

84,503

 

 

$

 

v3.22.2.2
Notes Payable (Tables)
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Carrying Amounts of Notes Payables

The carrying amounts of the Company's notes payable in its Condensed Consolidated Balance Sheets were as follows:

 

 

 

Fair Value as of

 

 

Carrying Value as of

 

 

Carrying Value as of

 

(In thousands)

 

September 30, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

Syndicated credit agreement note payable

 

$

29,611

 

 

$

29,782

 

 

$

 

Deutsche Bank term loan

 

 

 

 

 

 

 

 

 

Total Notes Payable

 

$

29,611

 

 

$

29,782

 

 

$

 

v3.22.2.2
Employee Benefit Plans (Tables)
9 Months Ended
Sep. 30, 2022
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 a defined benefit pension plan covering employees in certain foreign countries:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Service cost

 

$

478

 

 

$

307

 

 

$

981

 

 

$

931

 

Interest cost

 

 

204

 

 

 

84

 

 

 

638

 

 

 

257

 

Expected return on plan assets

 

 

(465

)

 

 

(460

)

 

 

(1,384

)

 

 

(1,396

)

Amortization of actuarial losses

 

 

81

 

 

 

272

 

 

 

254

 

 

 

825

 

Net periodic pension cost

 

$

298

 

 

$

203

 

 

$

489

 

 

$

617

 

v3.22.2.2
Equity (Tables)
9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
Changes in Accumulated Other Comprehensive Loss, Net of Tax, by Component

The following tables present the changes in accumulated other comprehensive loss, net of tax, by component:

 

 

 

Three Months Ended September 30, 2022

 

(In thousands)

 

Unrealized
(Losses) Gains
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

Balance as of June 30, 2022

 

$

(1,476

)

 

$

(5,713

)

 

$

(9,892

)

 

$

385

 

 

$

(16,696

)

Other comprehensive loss before
   reclassifications

 

 

(254

)

 

 

 

 

 

(23,172

)

 

 

 

 

 

(23,426

)

Amounts reclassified from accumulated other
   comprehensive (loss) income

 

 

(142

)

 

 

(118

)

 

 

 

 

 

 

 

 

(260

)

Net current period other comprehensive (loss) income

 

 

(396

)

 

 

(118

)

 

 

(23,172

)

 

 

 

 

 

(23,686

)

Less: Comprehensive Loss attributable to non-controlling interest, net of tax

 

 

 

 

 

 

 

 

(94

)

 

 

 

 

 

(94

)

Balance as of September 30, 2022

 

$

(1,872

)

 

$

(5,831

)

 

$

(32,970

)

 

$

385

 

 

$

(40,288

)

 

 

 

 

Three Months Ended September 30, 2021

 

(In thousands)

 

Unrealized
Gains
(Losses)
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

Balance as of June 30, 2021

 

$

(255

)

 

$

(9,310

)

 

$

(3,960

)

 

$

385

 

 

$

(13,140

)

Other comprehensive loss before
   reclassifications

 

 

(29

)

 

 

 

 

 

(1,389

)

 

 

 

 

 

(1,418

)

Amounts reclassified from accumulated other
   comprehensive (loss) income

 

 

(32

)

 

 

124

 

 

 

 

 

 

 

 

 

92

 

Net current period other comprehensive (loss) income

 

 

(61

)

 

 

124

 

 

 

(1,389

)

 

 

 

 

 

(1,326

)

Balance as of September 30, 2021

 

$

(316

)

 

$

(9,186

)

 

$

(5,349

)

 

$

385

 

 

$

(14,466

)

 

 

 

Nine Months Ended September 30, 2022

 

(In thousands)

 

Unrealized
Gains
(Losses)
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

As of December 31, 2021

 

$

(552

)

 

$

(5,613

)

 

$

(6,134

)

 

$

385

 

 

$

(11,914

)

Other comprehensive loss before
   reclassifications

 

 

(1,818

)

 

 

 

 

 

(26,930

)

 

 

 

 

 

(28,748

)

Amounts reclassified from accumulated other
   comprehensive income (loss)

 

 

498

 

 

 

(218

)

 

 

 

 

 

 

 

 

280

 

Net current period other comprehensive loss

 

 

(1,320

)

 

 

(218

)

 

 

(26,930

)

 

 

 

 

 

(28,468

)

Less: Comprehensive Loss attributable to non-controlling interest, net of tax

 

 

 

 

 

 

 

 

(94

)

 

 

 

 

 

(94

)

As of September 30, 2022

 

$

(1,872

)

 

$

(5,831

)

 

$

(32,970

)

 

$

385

 

 

$

(40,288

)

 

 

 

Nine Months Ended September 30, 2021

 

(In thousands)

 

Unrealized
Gains
(Losses)
on
Available-
for-Sale
Securities

 

 

Defined
Benefit Plan
Adjustments

 

 

Foreign
Currency
Adjustments

 

 

ASU 2018-02 Adoption

 

 

Total

 

As of December 31, 2020

 

$

32

 

 

$

(9,621

)

 

$

(2,435

)

 

$

385

 

 

$

(11,639

)

Other comprehensive loss before
   reclassifications

 

 

(358

)

 

 

 

 

 

(2,914

)

 

 

 

 

 

(3,272

)

Amounts reclassified from accumulated other
   comprehensive income

 

 

10

 

 

 

435

 

 

 

 

 

 

 

 

 

445

 

Net current period other comprehensive (loss) income

 

 

(348

)

 

 

435

 

 

 

(2,914

)

 

 

 

 

 

(2,827

)

As of September 30, 2021

 

$

(316

)

 

$

(9,186

)

 

$

(5,349

)

 

$

385

 

 

$

(14,466

)

 

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The following tables present the details of reclassifications out of accumulated other comprehensive loss:

 

 

 

Three Months Ended September 30, 2022

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive
(Loss) Income

 

 

Affected Line Item in the
Statement Where Net
(Loss) Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized loss on sales of securities

 

$

187

 

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial loss

 

 

171

 

 

(1)

Total reclassifications for the period, before tax

 

 

358

 

 

 

Tax benefit

 

 

(98

)

 

 

Total reclassifications for the period, net of tax

 

$

260

 

 

 

(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 September 30, 2021

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive
(Loss) Income

 

 

Affected Line Item in the
Statement Where Net
(Loss) Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized loss on sales of securities

 

$

42

 

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial gain

 

 

(180

)

 

(1)

Total reclassifications for the period, before tax

 

 

(138

)

 

 

Tax expense

 

 

46

 

 

 

Total reclassifications for the period, net of tax

 

$

(92

)

 

 

(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.

 

 

 

Nine Months Ended September 30, 2022

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive
(Loss) Income

 

 

Affected Line Item in the
Statement Where Net (Loss)
Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized gain on sales of securities

 

$

(655

)

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial loss

 

 

316

 

 

(1)

Total reclassifications for the period, before tax

 

 

(339

)

 

 

Tax expense

 

 

59

 

 

 

Total reclassifications for the period, net of tax

 

$

(280

)

 

 

(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.

 

 

 

Nine Months Ended September 30, 2021

(In thousands)

 

Amount
Reclassified
from
Accumulated
Other
Comprehensive (Loss)
Income

 

 

Affected Line Item in the
Statement Where Net (Loss)
Income Is Presented

Unrealized gain (loss) on available-for-sale securities:

 

 

 

 

 

Net realized gain on sales of securities

 

$

(13

)

 

Net investment (loss) gain

Defined benefit plan adjustments – actuarial gain

 

 

(630

)

 

(1)

Total reclassifications for the period, before tax

 

 

(643

)

 

 

Tax expense

 

 

198

 

 

 

Total reclassifications for the period, net of tax

 

$

(445

)

 

 

(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 Loss

The following tables present the tax effects related to the change in each component of other comprehensive loss:

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

Unrealized loss on available-for-sale
   securities

 

$

(334

)

 

$

80

 

 

$

(254

)

 

$

(38

)

 

$

9

 

 

$

(29

)

Reclassification adjustment for amounts related to
   available-for-sale investments included in net
   loss

 

 

(187

)

 

 

45

 

 

 

(142

)

 

 

(42

)

 

 

10

 

 

 

(32

)

Reclassification adjustment for amounts related to
   defined benefit plan adjustments included in net
   (loss) gain

 

 

(171

)

 

 

53

 

 

 

(118

)

 

 

180

 

 

 

(56

)

 

 

124

 

Foreign currency translation adjustments

 

 

(23,172

)

 

 

 

 

 

(23,172

)

 

 

(1,389

)

 

 

 

 

 

(1,389

)

Total Other Comprehensive Loss

 

$

(23,864

)

 

$

178

 

 

$

(23,686

)

 

$

(1,289

)

 

$

(37

)

 

$

(1,326

)

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

 

Before-Tax
Amount

 

 

Tax
(Expense)
Benefit

 

 

Net-of-Tax
Amount

 

Unrealized loss on available-for-sale
   securities

 

$

(2,392

)

 

$

574

 

 

$

(1,818

)

 

$

(471

)

 

$

113

 

 

$

(358

)

Reclassification adjustment for amounts related to
   available-for-sale investments included in net
   gain

 

 

655

 

 

 

(157

)

 

 

498

 

 

 

13

 

 

 

(3

)

 

 

10

 

Reclassification adjustment for amounts related to
   defined benefit plan adjustments included in net
  (loss) gain

 

 

(316

)

 

 

98

 

 

 

(218

)

 

 

630

 

 

 

(195

)

 

 

435

 

Foreign currency translation adjustments

 

 

(26,930

)

 

 

 

 

 

(26,930

)

 

 

(2,914

)

 

 

 

 

 

(2,914

)

Total Other Comprehensive Loss

 

$

(28,983

)

 

$

515

 

 

$

(28,468

)

 

$

(2,742

)

 

$

(85

)

 

$

(2,827

)

v3.22.2.2
Loss Per Share (Tables)
9 Months Ended
Sep. 30, 2022
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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to ADTRAN Holdings, Inc.

 

$

(41,934

)

 

$

(10,427

)

 

$

(40,918

)

 

$

(4,445

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

73,036

 

 

 

48,609

 

 

 

57,175

 

 

 

48,470

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

 

 

 

 

 

 

 

PSUs, RSUs and restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – diluted

 

 

73,036

 

 

 

48,609

 

 

 

57,175

 

 

 

48,470

 

Loss per share attributable to ADTRAN Holdings, Inc. – basic

 

$

(0.57

)

 

$

(0.21

)

 

$

(0.72

)

 

$

(0.09

)

Loss per share attributable to ADTRAN Holdings, Inc. – diluted

 

$

(0.57

)

 

$

(0.21

)

 

$

(0.72

)

 

$

(0.09

)

 

v3.22.2.2
Segment Information (Tables)
9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Revenue and Gross Profit of Reportable Segments

The following tables present information about the revenue and gross profit of its reportable segments:

 

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Revenue

 

 

Gross Profit

 

 

Revenue

 

 

Gross Profit

 

Network Solutions

 

$

304,940

 

 

$

82,334

 

 

$

120,767

 

 

$

39,738

 

Services & Support

 

 

35,769

 

 

 

20,693

 

 

 

17,314

 

 

 

7,935

 

Total

 

$

340,709

 

 

$

103,027

 

 

$

138,081

 

 

$

47,673

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Revenue

 

 

Gross Profit

 

 

Revenue

 

 

Gross Profit

 

Network Solutions

 

$

599,306

 

 

$

186,126

 

 

$

360,025

 

 

$

143,981

 

Services & Support

 

 

67,959

 

 

 

33,723

 

 

 

48,821

 

 

 

19,961

 

Total

 

$

667,265

 

 

$

219,849

 

 

$

408,846

 

 

$

163,942

 

Disaggregate of Revenue by Reportable Segment and Revenue Category

The following tables disaggregate revenue by reportable segment and revenue category. Prior year amounts presented below have been reclassified to conform to the current period revenue category presentation:

 

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

125,338

 

 

$

8,337

 

 

$

133,675

 

 

$

42,704

 

 

$

4,163

 

 

$

46,867

 

Access & Aggregation Solutions

 

 

76,591

 

 

 

11,598

 

 

 

88,189

 

 

 

78,063

 

 

 

13,151

 

 

 

91,214

 

Optical Networking Solutions

 

 

103,011

 

 

 

15,834

 

 

 

118,845

 

 

 

 

 

 

 

 

 

 

Total

 

$

304,940

 

 

$

35,769

 

 

$

340,709

 

 

$

120,767

 

 

$

17,314

 

 

$

138,081

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2022

 

 

September 30, 2021

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

252,899

 

 

$

17,248

 

 

$

270,147

 

 

$

140,257

 

 

$

12,232

 

 

$

152,489

 

Access & Aggregation Solutions

 

 

243,396

 

 

 

34,877

 

 

 

278,273

 

 

 

219,768

 

 

 

36,589

 

 

 

256,357

 

Optical Networking Solutions

 

 

103,011

 

 

 

15,834

 

 

 

118,845

 

 

 

 

 

 

 

 

 

 

Total

 

$

599,306

 

 

$

67,959

 

 

$

667,265

 

 

$

360,025

 

 

$

48,821

 

 

$

408,846

 

 

The table below presents revenue information by category. Prior year amounts presented below have been reclassified to conform to the current period revenue category presentation:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Subscriber Solutions

 

$

133,675

 

 

$

46,867

 

 

$

270,147

 

 

$

152,489

 

Access & Aggregation Solutions

 

 

88,189

 

 

 

91,214

 

 

 

278,273

 

 

 

256,357

 

Optical Networking Solutions

 

 

118,845

 

 

 

 

 

 

118,845

 

 

 

 

Total

 

$

340,709

 

 

$

138,081

 

 

$

667,265

 

 

$

408,846

 

 

 

Revenue Information by Geographic Area

The following table presents revenue information by geographic area:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

United States

 

$

169,669

 

 

$

91,868

 

 

$

374,470

 

 

$

273,009

 

United Kingdom

 

 

64,234

 

 

 

12,504

 

 

 

123,477

 

 

 

34,006

 

Germany

 

 

46,569

 

 

 

17,782

 

 

 

71,945

 

 

 

50,737

 

Other international

 

 

60,237

 

 

 

15,927

 

 

 

97,373

 

 

 

51,094

 

Total

 

$

340,709

 

 

$

138,081

 

 

$

667,265

 

 

$

408,846

 

v3.22.2.2
Liability for Warranty Returns (Tables)
9 Months Ended
Sep. 30, 2022
Product Warranties Disclosures [Abstract]  
Summary of Warranty Expense and Write-off Activity The warranty expense and write-off activity for the three and nine months ended September 30, 2022 and 2021 are summarized as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Balance at beginning of period

 

$

4,842

 

 

$

5,997

 

 

$

5,403

 

 

$

7,146

 

Plus: ADVA acquisition

 

 

3,756

 

 

 

 

 

 

3,756

 

 

 

 

Plus: Amounts charged to cost and expenses

 

 

616

 

 

 

472

 

 

 

1,727

 

 

 

253

 

Less: Deductions

 

 

(613

)

 

 

(822

)

 

 

(2,285

)

 

 

(1,752

)

Balance at end of period

 

$

8,601

 

 

$

5,647

 

 

$

8,601

 

 

$

5,647

 

v3.22.2.2
Summary of Significant Accounting Policies - Additional Information (Details) - $ / shares
9 Months Ended
Jul. 15, 2022
Aug. 30, 2021
Sep. 30, 2022
Oct. 18, 2022
Dec. 31, 2021
Summary Of Significant Accounting Policy [Line Items]          
Common stock, par value   $ 0.01 $ 0.01   $ 0.01
Common stock, shares outstanding     77,619,000   49,063,000
Issuance of shares of common stock 28,000,000.0 27,994,595      
Subsequent Event [Member] | DPLTA [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Percentage of required voting interest       75.00%  
Acorn HoldCo, Inc., [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Business combination date of agreement   Aug. 30, 2021      
Number of shares issuable for each share of acquired entity 100,000        
Common stock, par value   $ 0.01      
Common stock, shares outstanding 34,000,000.0   33,957,538    
Percentage of outstanding bearer shares 65.43%   65.35%    
Acorn HoldCo, Inc., [Member] | ADVA Optical Networking SE [Member] | Common Stock [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Number of shares issuable for each share of acquired entity   0.8244      
v3.22.2.2
Business Combination - Additional Information (Details)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Jul. 15, 2022
USD ($)
$ / shares
shares
Aug. 30, 2021
USD ($)
$ / shares
shares
Sep. 30, 2022
USD ($)
$ / shares
shares
Sep. 30, 2021
USD ($)
Sep. 30, 2022
USD ($)
$ / shares
shares
Sep. 30, 2021
USD ($)
Dec. 31, 2021
USD ($)
$ / shares
shares
Aug. 30, 2021
€ / shares
shares
Business Acquisition [Line Items]                
Common stock, par value | $ / shares   $ 0.01 $ 0.01   $ 0.01   $ 0.01  
Exchange offer settled date Jul. 15, 2022              
Common stock, shares outstanding | shares     77,619,000   77,619,000   49,063,000  
Common stock, reserved for future issuance | shares 28,000,000.0 27,994,595           27,994,595
Goodwill     $ 357,869   $ 357,869   $ 6,968  
Net revenue     340,709 $ 138,081 667,265 $ 408,846    
Net loss attributable to ADTRAN Holdings, Inc.     (41,934) (10,427) (40,918) (4,445)    
Net loss attributable to non-controlling interest     (2,925)   (2,925)      
Network Solutions [Member]                
Business Acquisition [Line Items]                
Goodwill     270,916   270,916   6,568  
Net revenue     304,940 120,767 599,306 360,025    
Services & Support [Member]                
Business Acquisition [Line Items]                
Goodwill     86,953   86,953   $ 400  
Net revenue     35,769 17,314 67,959 48,821    
Common Stock [Member]                
Business Acquisition [Line Items]                
Percentage of common stock exchanged   64.00%            
ADVA Optical Networking SE [Member]                
Business Acquisition [Line Items]                
Business combination date of agreement   Aug. 30, 2021            
Common stock, shares outstanding | shares   33,957,538           33,957,538
Percentage of outstanding bearer shares   65.43%            
Fair value of stock options assumed   $ 12,800            
Goodwill $ 359,157   359,200   359,200      
Accounts receivable 114,659              
Other receivables 1,457              
Unpaid principal balance of account receivable 118,500              
Unpaid principal balance of other receivable 1,500              
Fair value of noncontrolling interest 316,415              
Net revenue 163,800              
Net loss attributable to ADTRAN Holdings, Inc. $ 8,400              
Net loss attributable to non-controlling interest     (2,900)   (2,900)      
Shares held by noncontrolling interest | shares   17,941,496           17,941,496
Closing share price | (per share) $ 20.20 $ 17.64           € 17.58
Currency conversion rate 1.00318              
ADVA Optical Networking SE [Member] | Selling, General and Administrative Expense [Member]                
Business Acquisition [Line Items]                
Transaction costs incurred         25,200      
Transaction costs related to the business combination     $ 10,600 $ 5,100 13,300 $ 6,400    
Estimated additional transaction costs to be incurred         $ 1,100      
ADVA Optical Networking SE [Member] | Network Solutions [Member]                
Business Acquisition [Line Items]                
Goodwill $ 270,600              
ADVA Optical Networking SE [Member] | Services & Support [Member]                
Business Acquisition [Line Items]                
Goodwill $ 88,600              
ADVA Optical Networking SE [Member] | Common Stock [Member]                
Business Acquisition [Line Items]                
Number of shares issuable for each share of acquired entity | shares   0.8244            
Percentage of common stock exchanged   36.00%            
v3.22.2.2
Business Combination - Summary of Purchase Price for Business Combination (Details) - ADVA Optical Networking SE [Member]
$ / shares in Units, $ in Thousands
Jul. 15, 2022
USD ($)
$ / shares
shares
Aug. 30, 2021
$ / shares
Aug. 30, 2021
€ / shares
Business Acquisition [Line Items]      
ADVA shares exchanged | shares 33,957,538    
Exchange ratio 0.8244    
ADTRAN Holdings, Inc. shares issued | shares 27,994,595    
ADTRAN Holdings, Inc. share price on July 15, 2022 | (per share) $ 20.20 $ 17.64 € 17.58
Purchase price paid for ADVA shares $ 565,491    
Equity compensation 12,769    
Total purchase price $ 578,260    
v3.22.2.2
Business Combination - Summary of Purchase Price Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Jul. 15, 2022
Dec. 31, 2021
Net Assets:      
Goodwill $ 357,869   $ 6,968
ADVA Optical Networking SE [Member]      
Business Acquisition [Line Items]      
Total purchase price   $ 578,260  
Noncontrolling interest   316,415  
Net Assets:      
Cash and cash equivalents   44,003  
Accounts receivable   114,659  
Other receivables   1,457  
Inventory   200,532  
Prepaid expenses and other current assets   29,474  
Property plant and equipment   52,796  
Deferred tax assets   1,599  
Intangibles   405,385  
Other non-current assets   30,588  
Accounts payable   (98,587)  
Current unearned revenue   (26,047)  
Accrued expenses and other liabilities   (59,600)  
Current portion of notes payable   (25,254)  
Income tax payable   (1,400)  
Non-current unearned revenue   (11,498)  
Pension liability   (6,820)  
Other non-current liabilities   (6,094)  
Non-current portion of revolving credit agreements and notes payable   (15,250)  
Non-current lease obligations   (20,046)  
Deferred tax liabilities   (74,379)  
Total net assets acquired   535,518  
Goodwill $ 359,200 $ 359,157  
v3.22.2.2
Business Combination - Summary of Fair Value of Intangible Assets Acquired (Details) - ADVA Optical Networking SE [Member]
$ in Thousands
Jul. 15, 2022
USD ($)
Business Acquisition [Line Items]  
Fair value $ 405,385
Cost of Revenue [Member] | Network Solutions [Member] | Developed Technology [Member]  
Business Acquisition [Line Items]  
Estimated-average useful life (in years) 8 years 6 months [1]
Fair value $ 293,530
Cost of Revenue [Member] | Network Solutions and Services & Support [Member] | Backlog [Member]  
Business Acquisition [Line Items]  
Estimated-average useful life (in years) 1 year 4 months 24 days [1]
Fair value $ 52,165
Selling, General and Administrative Expense [Member] | Customer Relationships [Member]  
Business Acquisition [Line Items]  
Estimated-average useful life (in years) 10 years 6 months [1]
Fair value $ 32,704
Selling, General and Administrative Expense [Member] | Trade Name [Member]  
Business Acquisition [Line Items]  
Estimated-average useful life (in years) 2 years 9 months 18 days [1]
Fair value $ 26,986
[1] Determination of the weighted average period of the individual categories of intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with definite lives is recognized over the period of time the assets are expected to contribute to future cash flows.
v3.22.2.2
Business Combination - Summary of Unaudited Pro Forma Financial Information (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Business Combinations [Abstract]        
Revenue $ 368,192 $ 317,067 $ 1,053,510 $ 942,003
Net income (loss) $ (48,084) $ (44,154) $ (60,494) $ (133,321)
v3.22.2.2
Cash, Cash Equivalents and Restricted Cash - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Cash and Cash Equivalents [Abstract]    
Cash and cash equivalents $ 111,099 $ 56,603
Restricted cash   215
Cash, cash equivalents and restricted cash $ 111,099 $ 56,818
v3.22.2.2
Revenue - Additional Information (Detail)
3 Months Ended 9 Months Ended
Sep. 30, 2022
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2022
USD ($)
Category
Sep. 30, 2021
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Revenue [Line Items]            
Number of categories | Category     3      
Increase in accounts receivable     $ 34,535,000 $ 26,346,000    
Accounts receivable, net $ 302,401,000   302,401,000   $ 158,742,000  
Accounts receivable, allowance for doubtful accounts 218,000   218,000   0  
Recognized revenue 2,800,000 $ 2,000,000.0 12,300,000 $ 9,800,000    
Outstanding unearned revenue           $ 14,100,000
Contract assets, allowance for credit losses 0   0   0  
Purchase Agreement [Member] | Factor [Member]            
Revenue [Line Items]            
Accounts receivable sold 16,100,000   16,100,000      
Accounts receivable, allowance for doubtful accounts 100,000   100,000      
Interest expense [Member] | Purchase Agreement [Member] | Factor [Member]            
Revenue [Line Items]            
Cost of receivables 300,000   300,000      
Other assets [Member] | Purchase Agreement [Member] | Factor [Member]            
Revenue [Line Items]            
Accounts receivable gross 1,300,000   1,300,000      
Existing sale of receivables [Member] | Purchase Agreement [Member] | Factor [Member]            
Revenue [Line Items]            
Accounts receivable, net 31,100,000   31,100,000      
Contractual Maintenance Agreements, Contractual SaaS and Subscription Services and Hardware Contracts [Member]            
Revenue [Line Items]            
Remaining performance obligations $ 276,500,000   $ 276,500,000   $ 101,100,000  
v3.22.2.2
Revenue - Disaggregate of Revenue by Reportable Segment and Revenue Category (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Disaggregation Of Revenue [Line Items]        
Revenue $ 340,709 $ 138,081 $ 667,265 $ 408,846
Subscriber Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue 133,675 46,867 270,147 152,489
Access & Aggregation Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 88,189 91,214 278,273 256,357
Optical Networking Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue 118,845   118,845  
Network Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 304,940 120,767 599,306 360,025
Network Solutions [Member] | Subscriber Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue 125,338 42,704 252,899 140,257
Network Solutions [Member] | Access & Aggregation Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 76,591 78,063 243,396 219,768
Network Solutions [Member] | Optical Networking Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue 103,011   103,011  
Services & Support [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 35,769 17,314 67,959 48,821
Services & Support [Member] | Subscriber Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue 8,337 4,163 17,248 12,232
Services & Support [Member] | Access & Aggregation Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 11,598 $ 13,151 34,877 $ 36,589
Services & Support [Member] | Optical Networking Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue $ 15,834   $ 15,834  
v3.22.2.2
Revenue - Additional Information (Detail1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01
Sep. 30, 2022
Revenue [Line Items]  
Remaining performance obligations, percentage 82.00%
Remaining performance obligations, period 12 months
v3.22.2.2
Revenue - Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]    
Accounts receivable, net $ 302,401 $ 158,742
Contract assets 1,790 464
Unearned revenue 40,993 17,737
Non-current unearned revenue $ 18,269 $ 9,271
v3.22.2.2
Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Income Tax Disclosure [Line Items]          
Effective tax rate expense (benefit) 8.80% 14.10% 9.40% 354.50%  
Deferred tax assets $ 29,200   $ 29,200   $ 9,079
Valuation allowance established against deferred tax assets 66,114   66,114   50,564
Deferred tax liabilities 36,884   36,884    
Domestic [Member]          
Income Tax Disclosure [Line Items]          
Deferred tax assets 4,669   4,669    
Valuation allowance established against deferred tax assets 64,054   64,054   48,265
Change in deferred tax asset valuation allowance     15,800    
International [Member]          
Income Tax Disclosure [Line Items]          
Deferred tax assets         9,079
Valuation allowance established against deferred tax assets 2,060   2,060   $ 2,299
Deferred tax liabilities $ 41,553   41,553    
Change in deferred tax asset valuation allowance     $ 200    
v3.22.2.2
Income Taxes - Summary of Supplemental Balance Sheet Information Related to Deferred Tax Assets (Liabilities) (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Operating Loss Carryforwards [Line Items]    
Deferred Tax Assets $ 29,230 $ 59,643
Valuation Allowance (66,114) (50,564)
Deferred Tax Assets, net 29,200 9,079
Deferred Tax Liabilities, net (36,884)  
Domestic [Member]    
Operating Loss Carryforwards [Line Items]    
Deferred Tax Assets 68,723 48,265
Valuation Allowance (64,054) (48,265)
Deferred Tax Assets, net 4,669  
International [Member]    
Operating Loss Carryforwards [Line Items]    
Deferred Tax Assets   11,378
Deferred Tax Liabilities (39,493)  
Valuation Allowance (2,060) (2,299)
Deferred Tax Assets, net   $ 9,079
Deferred Tax Liabilities, net $ (41,553)  
v3.22.2.2
Stock-Based Compensation - Stock-Based Compensation Expense Related to Stock Options, RSUs and Restricted Stock (Detail)
shares in Thousands
9 Months Ended
Sep. 30, 2022
$ / shares
shares
Share-Based Payment Arrangement [Abstract]  
Number of Shares, Unvested RSUs and restricted stock outstanding, beginning balance | shares 1,930
Number of Shares, RSUs and restricted stock granted | shares 545
Number of Shares, RSUs and restricted stock vested | shares (20)
Number of Shares, RSUs and restricted stock forfeited | shares (46)
Number of Shares, Unvested RSUs and restricted stock outstanding, ending balance | shares 2,409
Weighted Avg. Grant Date Fair Value, Unvested RSUs and restricted stock outstanding, Beginning Balance | $ / shares $ 14.11
Weighted Avg. Grant Date Fair Value, RSUs and restricted stock granted | $ / shares 19.96
Weighted Avg. Grant Date Fair Value, RSUs and restricted stock vested | $ / shares 13.67
Weighted Avg. Grant Date Fair Value, RSUs and restricted stock forfeited | $ / shares 14.18
Weighted Avg. Grant Date Fair Value, Unvested RSUs and restricted stock outstanding, Ending Balance | $ / shares $ 17.36
v3.22.2.2
Stock-Based Compensation (PSUs, RSUs and Restricted Stock) - Additional Information (Detail) - USD ($)
$ in Millions
9 Months Ended
Jul. 15, 2022
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2020
Jul. 22, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Share granted   545,000      
Recognition period of unvested compensation expense   2 years 8 months 12 days      
Options available for issuance under stockholders-approved equity plan   3,400,000      
ADVA Optical Networking SE, [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Recognition period of unvested compensation expense   1 year 1 month 6 days      
Number of market based PSU awards converted to time based RSU awards 300,000        
Options available for issuance under stockholders-approved equity plan         2,000,000.0
Maximum [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Options available for issuance under stockholders-approved equity plan   2,100,000      
Performance Stock Units (PSUs) [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Share granted   300,000 300,000    
Vesting period   1 year 2 years 3 years  
Performance Stock Units (PSUs) [Member] | Minimum [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Percentage of performance stock units granted   0.00% 0.00% 0.00%  
Performance Stock Units (PSUs) [Member] | Maximum [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Percentage of performance stock units granted   142.80% 142.80% 142.80%  
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   $ 24.6      
Recognition period of unvested compensation expense   1 year 7 months 6 days      
Time-Based RSUs [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Unrecognized compensation expense related to other than options $ 17.8 $ 8.9      
Recognition period of unvested compensation expense 3 months 18 days        
Time-Based RSUs [Member] | ADVA Optical Networking SE, [Member]          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Unrecognized compensation expense related to other than options   $ 2.1      
Recognition period of unvested compensation expense   1 year 1 month 6 days      
v3.22.2.2
Stock-Based Compensation - Summary of Stock Options Outstanding (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended 12 Months Ended
Jul. 15, 2022
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Number of Stock Options, Stock options outstanding, Beginning Balance     1,721  
Number of Stock Options, Stock options exercised     (439)  
Number of Stock Options, Stock options forfeited     (12)  
Number of Stock Options, Stock options expired     (70)  
Number of Stock Options, Stock options outstanding, Ending Balance   3,180 3,180 1,721
Number of Stock Options, Stock options exercisable   1,627 1,627  
Weighted Avg. Exercise Price, Stock options outstanding, Beginning Balance     $ 19.37  
Weighted Avg. Exercise Price, Stock options exercised     16.16  
Weighted Avg. Exercise Price, Stock options forfeited     11.08  
Weighted Avg. Exercise Price, Stock options expired     26.38  
Weighted Avg. Exercise Price, Stock options outstanding, Ending Balance   $ 14.58 14.58 $ 19.37
Weighted Avg. Exercise Price, Stock options exercisable   $ 16.85 $ 16.85  
Weighted Avg. Remaining Contractual Life In Years, Stock options outstanding     3 years 6 months 2 years 4 months 24 days
Weighted Avg. Remaining Contractual Life in Years, Stock options exercisable     2 years  
Aggregate Intrinsic Value, Stock options outstanding     $ 6,669  
Aggregate Intrinsic Value, Stock options outstanding   $ 17,839 17,839 $ 6,669
Aggregate Intrinsic Value, Stock options exercisable   $ 6,375 $ 6,375  
ADVA Optical Networking SE [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Number of Stock Options, Stock options outstanding, Beginning Balance   2,745    
Number of Stock Options, Stock options replaced [1]   (2,403) 1,980  
Number of Stock Options, Stock options exercised   (56)    
Number of Stock Options, Stock options forfeited   (4)    
Number of Stock Options, Stock options outstanding, Ending Balance 2,745 282 282  
Number of Stock Options, Stock options exercisable   32 32  
Weighted Avg. Exercise Price, Stock options outstanding, Beginning Balance   $ 9.09    
Weighted Avg. Exercise Price, Stock options replaced [1]   9.25 $ 11.16  
Weighted Avg. Exercise Price, Stock options exercised   6.79    
Weighted Avg. Exercise Price, Stock options forfeited   7.91    
Weighted Avg. Exercise Price, Stock options outstanding, Ending Balance $ 9.09 8.45 8.45  
Weighted Avg. Exercise Price, Stock options exercisable   $ 7.72 $ 7.72  
Weighted Avg. Remaining Contractual Life In Years, Stock options outstanding 4 years 7 months 6 days 3 years 10 months 24 days    
Weighted Avg. Remaining Contractual Life in Years, Stock options exercisable   1 year 2 months 12 days    
Aggregate Intrinsic Value, Stock options outstanding   $ 27,205    
Aggregate Intrinsic Value, Stock options outstanding $ 27,205 2,976 $ 2,976  
Aggregate Intrinsic Value, Stock options exercisable   $ 363 $ 363  
[1] Each ADVA stock option surrendered was exchanged for 0.8244 ADTRAN Holdings stock options.
v3.22.2.2
Stock-Based Compensation - Summary of Stock Options Outstanding (Parenthetical) (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2022
ADVA Optical Networking SE, [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Stock option surrendered, exchange ratio 0.8244 0.8244
v3.22.2.2
Stock-Based Compensation (Stock Options) - Additional Information (Detail) - USD ($)
$ in Thousands, shares in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Jul. 22, 2022
Jul. 15, 2022
Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Stock-based compensation expense   $ 12,100 $ 1,800 $ 15,900 $ 5,500      
Unrecognized compensation expense related to stock options $ 9,000 $ 9,000   $ 9,000        
Recognition period of unvested compensation expense       2 years 8 months 12 days        
Options available for issuance under stockholders-approved equity plan 3.4 3.4   3.4        
Aggregate intrinsic value based on fair market value $ 17,839 $ 17,839   $ 17,839       $ 6,669
Total pre-tax intrinsic value of options exercised       $ 3,400        
Maximum [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Options available for issuance under stockholders-approved equity plan 2.1 2.1   2.1        
ADVA Optical Networking SE [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Unrecognized compensation expense related to stock options $ 300 $ 300   $ 300        
Recognition period of unvested compensation expense       1 year 1 month 6 days        
Options available for issuance under stockholders-approved equity plan           2.0    
Aggregate intrinsic value based on fair market value 2,976 $ 2,976   $ 2,976     $ 27,205  
Total pre-tax intrinsic value of options exercised $ 700              
v3.22.2.2
Investments - Debt Securities and Other Investments, Included on Condensed Consolidated Balance Sheet and Recorded at Fair Value (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 30,117 $ 30,199
Gross Unrealized Gains   38
Gross Unrealized Losses (1,454) (171)
Fair Value 28,663 30,066
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 9,358 10,776
Gross Unrealized Gains   6
Gross Unrealized Losses (374) (35)
Fair Value 8,984 10,747
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 1,411 1,553
Gross Unrealized Gains   2
Gross Unrealized Losses (54) (4)
Fair Value 1,357 1,551
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 2,988 322
Gross Unrealized Gains   3
Gross Unrealized Losses (77) (3)
Fair Value 2,911 322
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 4,720 4,754
Gross Unrealized Gains   15
Gross Unrealized Losses (280) (33)
Fair Value 4,440 4,736
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 11,231 12,251
Gross Unrealized Gains   12
Gross Unrealized Losses (642) (92)
Fair Value 10,589 12,171
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 409 543
Gross Unrealized Losses (27) (4)
Fair Value $ 382 $ 539
v3.22.2.2
Investments - Contractual Maturities of Debt Securities and Other Investments (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities, Fair Value/Carrying Value $ 28,663 $ 30,066
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 96  
One to two years 5,371  
Two to three years 3,517  
Available-for-sale debt securities, Fair Value/Carrying Value 8,984 10,747
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 525  
One to two years 722  
Two to three years 110  
Available-for-sale debt securities, Fair Value/Carrying Value 1,357 1,551
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 95  
Two to three years 715  
Three to five years 1,306  
Five to ten years 382  
More than ten years 413  
Available-for-sale debt securities, Fair Value/Carrying Value 2,911 322
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 182  
One to two years 464  
Two to three years 1,321  
Three to five years 166  
Five to ten years 810  
More than ten years 1,497  
Available-for-sale debt securities, Fair Value/Carrying Value 4,440 4,736
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 7,421  
Two to three years 2,889  
Three to five years 279  
Available-for-sale debt securities, Fair Value/Carrying Value 10,589 12,171
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 275  
Two to three years 107  
Available-for-sale debt securities, Fair Value/Carrying Value $ 382 $ 539
v3.22.2.2
Investments - Gross Realized Gains and Losses on Sale of Debt Securities (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract]        
Gross realized gain on debt securities $ 1 $ 22 $ 14 $ 206
Gross realized loss on debt securities (116) (17) (242) (53)
Total (loss) gain recognized, net $ (115) $ 5 $ (228) $ 153
v3.22.2.2
Investments - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Sep. 30, 2021
Schedule of Investments [Line Items]      
Available-for-sale debt securities, allowance for credit losses $ 0 $ 0 $ 0
Purchase an available-for-sale debt securities with credit deterioration   0  
Asset impairments $ 16,969,000 $ 16,969,000  
Investment [Member] | Issuer Concentration [Member] | Market Value of Total Investment Portfolio [Member]      
Schedule of Investments [Line Items]      
Investment concentration risk percentage   5.00%  
v3.22.2.2
Investments - Realized and Unrealized Gains and Losses related to Marketable Equity Securities (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract]        
Realized (loss) gain on equity securities sold $ (1,358)   $ (1,675) $ (55)
Unrealized (loss) gain on equity securities held (1,217) $ (68) (8,849) 2,844
Total (loss) gain recognized, net $ (2,575) $ (68) $ (10,524) $ 2,789
v3.22.2.2
Investments - Cash Equivalents and Investments held at Fair Value (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities $ 28,663 $ 30,066
Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Total 51,632 70,259
Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Total 33,558 52,364
Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Total 18,074 17,895
Money Market Funds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 698 652
Money Market Funds [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 698 652
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 8,984 10,747
Corporate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 8,984 10,747
Corporate Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 8,984 10,747
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 1,357 1,551
Municipal Fixed-Rate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 1,357 1,551
Municipal Fixed-Rate Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 1,357 1,551
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 2,911 322
Asset-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 2,911 322
Asset-Backed Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 2,911 322
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 4,440 4,736
Mortgage/Agency-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 4,440 4,736
Mortgage/Agency-Backed Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 4,440 4,736
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 10,589 12,171
U.S. Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 10,589 12,171
U.S. Government Bonds [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 10,589 12,171
Foreign Government Securities / Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 382 539
Foreign Government Securities / Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 382 539
Foreign Government Securities / Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities 382 539
Marketable Equity Securities - Various Industries [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 760 12,606
Marketable Equity Securities - Various Industries [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 760 12,606
Deferred Compensation Plan Assets [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 21,511 26,935
Deferred Compensation Plan Assets [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities $ 21,511 $ 26,935
v3.22.2.2
Inventory - Components of Inventory (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Raw materials $ 177,554 $ 74,709
Work in process 10,625 2,143
Finished goods 227,984 63,039
Total Inventory, net $ 416,163 $ 139,891
v3.22.2.2
Inventory - Additional Information (Detail) - USD ($)
$ in Millions
Sep. 30, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Inventory valuation reserves $ 51.3 $ 44.6
v3.22.2.2
Property, Plant and Equipment - Property, Plant and Equipment (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Property, Plant and Equipment [Abstract]    
Engineering and other equipment $ 162,445 $ 134,771
Building 80,807 68,157
Computer hardware and software 79,990 72,274
Building and land improvements 40,132 35,578
Furniture and fixtures 20,891 19,917
Land 5,298 4,575
Other assets 4,835  
Total property, plant and equipment 394,398 335,272
Less: accumulated depreciation (289,821) (279,506)
Total property, plant and equipment, net $ 104,577 $ 55,766
v3.22.2.2
Property, Plant and Equipment - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Property, Plant and Equipment [Line Items]          
Property, plant and equipment $ 104,577   $ 104,577   $ 55,766
Asset impairments 16,969   16,969    
Depreciation 7,100 $ 3,000 12,600 $ 9,100  
ADVA Optical Networking SE [Member]          
Property, Plant and Equipment [Line Items]          
Asset impairments $ 17,000   $ 17,000    
v3.22.2.2
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Detail)
$ in Thousands
9 Months Ended
Sep. 30, 2022
USD ($)
Goodwill [Line Items]  
Goodwill, Beginning balance $ 6,968
Foreign currency translation adjustment (8,256)
Goodwill, Ending balance 357,869
ADVA Optical Networking SE, [Member]  
Goodwill [Line Items]  
Goodwill from Business Combination with ADVA 359,157
Goodwill, Ending balance 359,200
Network Solutions [Member]  
Goodwill [Line Items]  
Goodwill, Beginning balance 6,568
Foreign currency translation adjustment (6,220)
Goodwill, Ending balance 270,916
Network Solutions [Member] | ADVA Optical Networking SE, [Member]  
Goodwill [Line Items]  
Goodwill from Business Combination with ADVA 270,568
Services & Support [Member]  
Goodwill [Line Items]  
Goodwill, Beginning balance 400
Foreign currency translation adjustment (2,036)
Goodwill, Ending balance 86,953
Services & Support [Member] | ADVA Optical Networking SE, [Member]  
Goodwill [Line Items]  
Goodwill from Business Combination with ADVA $ 88,589
v3.22.2.2
Goodwill - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Goodwill [Line Items]        
Impairment of goodwill $ 0 $ 0 $ 0 $ 0
v3.22.2.2
Intangible Assets - Summary of Intangible Assets (Detail) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Finite Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 431,623 $ 36,166
Accumulated Amortization (38,048) (16,873)
Net Book Value $ 393,575 19,293
Customer Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Useful Life (in years) 10 years 10 months 24 days  
Gross Carrying Amount $ 52,139 20,796
Accumulated Amortization (11,207) (9,906)
Net Book Value $ 40,932 10,890
Backlog [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Useful Life (in years) 1 year 4 months 24 days  
Gross Carrying Amount $ 50,966  
Accumulated Amortization (9,325)  
Net Book Value $ 41,641  
Developed Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Useful Life (in years) 8 years 6 months  
Gross Carrying Amount $ 294,983 8,200
Accumulated Amortization (11,565) (3,683)
Net Book Value $ 283,418 4,517
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 (2,977) (2,486)
Net Book Value $ 2,923 3,414
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 (280) (225)
Net Book Value $ 280 335
Patent [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Useful Life (in years) 7 years 3 months 18 days  
Gross Carrying Amount $ 500 500
Accumulated Amortization (414) (363)
Net Book Value $ 86 137
Trade Names [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Useful Life (in years) 2 years 9 months 18 days  
Gross Carrying Amount $ 26,575 210
Accumulated Amortization (2,280) (210)
Net Book Value $ 24,295
v3.22.2.2
Intangible Assets - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Acquired Finite-Lived Intangible Assets [Line Items]        
Impairment losses of long-lived assets     $ 0 $ 0
Impairment losses of intangible assets $ 0 $ 0 0 0
Amortization expense $ 20,400,000 $ 1,000,000.0 $ 22,200,000 $ 3,100,000
v3.22.2.2
Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]    
2022 $ 23,691  
2023 75,677  
2024 53,021  
2025 42,623  
2026 39,505  
Thereafter 159,058  
Net Book Value $ 393,575 $ 19,293
v3.22.2.2
Leases - Additional Information (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Lessee, Lease, Description [Line Items]        
Operating lease, option to extend, existence     true  
Operating lease, option to terminate, existence     true  
Variable lease cost $ 0.2 $ 0.1 $ 0.5 $ 0.4
Future operating lease payments relating to extension of lease term $ 4.5   4.5  
Cash used in operating activities related to operating leases     $ 2.3 1.4
Minimum [Member]        
Lessee, Lease, Description [Line Items]        
Operating lease, remaining lease terms 1 month   1 month  
Operating lease, options to terminate term     3 months  
Maximum [Member]        
Lessee, Lease, Description [Line Items]        
Operating lease, remaining lease terms 78 months   78 months  
Operating lease, renewal term 5 years   5 years  
Short-term lease cost $ 0.1 $ 0.1 $ 0.1 $ 0.1
v3.22.2.2
Leases - Schedule of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Assets [Abstract]    
Operating lease assets $ 28,081 $ 4,922
Operating lease, right-of-use asset, statement of financial position [extensible list] Other non-current assets Other non-current assets
Liabilities [Abstract]    
Current operating lease liability $ 6,604 $ 1,730
Operating lease, liability, current, statement of financial position [extensible list] Accrued expenses and other liabilities Accrued expenses and other liabilities
Non-current operating lease liability $ 21,490 $ 3,269
Operating lease, liability, noncurrent, statement of financial position [extensible list] Non-current lease obligations Non-current lease obligations
Total lease liability $ 28,094 $ 4,999
v3.22.2.2
Leases - Components of Lease Expense included in Consolidated Statements of Loss (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Lessee, Lease, Description [Line Items]        
Total operating lease expense $ 1,692 $ 471 $ 2,482 $ 1,498
Selling, General and Administrative Expenses [Member]        
Lessee, Lease, Description [Line Items]        
Total operating lease expense 1,444 196 1,704 645
Research and Development Expense [Member]        
Lessee, Lease, Description [Line Items]        
Total operating lease expense 228 261 719 815
Cost of Sales [Member]        
Lessee, Lease, Description [Line Items]        
Total operating lease expense $ 20 $ 14 $ 59 $ 38
v3.22.2.2
Leases - Schedule of Maturity of Operating Lease Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Lessee, Operating Lease, Liability, to be Paid [Abstract]    
2022 $ 2,209  
2023/2022 8,421 $ 1,767
2024/2023 7,098 1,419
2025/2024 5,838 1,188
2026/2025 3,354 710
Thereafter 5,107  
Total lease payments 32,027 5,084
Less: Interest (3,933) (85)
Total lease liability $ 28,094 $ 4,999
v3.22.2.2
Leases - Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Details)
Sep. 30, 2022
USD  
Weighted average remaining lease term (years)  
Operating leases with functional currency 1 year 7 months 6 days
Weighted average discount rate  
Operating leases with functional currency 3.93%
EUR  
Weighted average remaining lease term (years)  
Operating leases with functional currency 4 years 6 months
Weighted average discount rate  
Operating leases with functional currency 4.05%
v3.22.2.2
Leases - Net Investment in Sales-Type Leases (Detail) - USD ($)
$ in Thousands
Sep. 30, 2022
Dec. 31, 2021
Sales-Type Lease, Net Investment in Lease, before Allowance for Credit Loss [Abstract]    
Current minimum lease payments receivable $ 11 $ 92
Non-current minimum lease payments receivable   4
Total minimum lease payments receivable 11 96
Less: Current unearned revenue 5 70
Less: Non-current unearned revenue   1
Net investment in sales-type leases $ 6 $ 25
v3.22.2.2
Revolving Credit Agreements - Carrying Amount of Revolving Agreements (Details) - USD ($)
$ in Thousands
Sep. 30, 2022
Aug. 08, 2022
Line of Credit Facility [Line Items]    
Revolving credit agreements $ 84,503  
Wells Fargo Credit Agreement [Member]    
Line of Credit Facility [Line Items]    
Revolving credit agreements 60,000  
Nord/LB Revolving Line of Credit [Member]    
Line of Credit Facility [Line Items]    
Revolving credit agreements 14,702 $ 14,700
Syndicated Credit Agreement Working Capital Line of Credit [Member]    
Line of Credit Facility [Line Items]    
Revolving credit agreements $ 9,801  
v3.22.2.2
Revolving Credit Agreements - Additional Information (Detail)
$ in Thousands
1 Months Ended 9 Months Ended
Aug. 08, 2022
USD ($)
Aug. 05, 2022
Dec. 31, 2024
Sep. 30, 2024
Oct. 31, 2019
USD ($)
Sep. 30, 2022
USD ($)
Jul. 18, 2022
USD ($)
May 19, 2022
USD ($)
Apr. 01, 2022
USD ($)
Sep. 30, 2018
USD ($)
Line Of Credit Facility [Line Items]                    
Weighted average interest rate           4.05%        
Repayment of debt under revolving credit agreements           $ 48,000        
Revolving line of credit           $ 84,503        
Debt instrument default interest rate percentage           2.00%        
Daily Simple SOFR [Member]                    
Line Of Credit Facility [Line Items]                    
Credit facility, floor rate           0.00%        
EURIBOR [Member]                    
Line Of Credit Facility [Line Items]                    
Credit facility, floor rate           0.00%        
Maximum [Member] | Daily Simple SOFR [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           2.15%        
Maximum [Member] | Base Rate [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           1.25%        
Maximum [Member] | EURIBOR [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           2.25%        
Minimum [Member] | Daily Simple SOFR [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           1.40%        
Minimum [Member] | Base Rate [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           0.50%        
Minimum [Member] | EURIBOR [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           1.50%        
Wells Fargo Credit Agreement [Member]                    
Line Of Credit Facility [Line Items]                    
Revolving line of credit           $ 60,000        
Line of credit facility maturity and frequency of payment and borrowing frequency           in tranches that mature during the fourth quarter of 2022 and can either be repaid or borrowed again for a one month, three month or six month period        
Commitment fee percentage           0.25%        
Net leverage ratio   3.00                
Line of credit maturity period month and year           2027-07        
Wells Fargo Credit Agreement [Member] | Daily Simple SOFR [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           1.00%        
Wells Fargo Credit Agreement [Member] | Federal Reserve Bank Advances [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate           1.00%        
Syndicated Credit Agreement Working Capital Line of Credit [Member]                    
Line Of Credit Facility [Line Items]                    
Revolving line of credit           $ 9,801        
Nord/LB Revolving Line of Credit [Member]                    
Line Of Credit Facility [Line Items]                    
Revolving line of credit $ 14,700         14,702        
Available for future borrowings           0        
Line of credit maturity period month and year 2023-08                  
Debt cover ratio 2.75                  
Nord/LB Revolving Line of Credit [Member] | Euro Short Term Rate [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate 1.40%                  
Acorn HoldCo, Inc., [Member] | Wells Fargo Credit Agreement [Member]                    
Line Of Credit Facility [Line Items]                    
Secured revolving credit facility amount           100,000 $ 100,000      
New secured revolving credit facility amount           100,000 $ 100,000      
Revolving line of credit           60,000        
Credit facility, average outstanding amount           16,000        
Letters of credit may be issued           25,000        
Available for future borrowings           24,000        
Acorn HoldCo, Inc., [Member] | Wells Fargo Credit Agreement [Member] | Maximum [Member]                    
Line Of Credit Facility [Line Items]                    
Credit agreement current borrowing capacity           400,000        
Cadence Bank, N.A [Member] | Secured Revolving Credit Facility [Member] | Revolving Credit and Security Agreement (The "Cadence Revolving Credit Agreement") [Member]                    
Line Of Credit Facility [Line Items]                    
Secured revolving credit facility amount               $ 25,000    
New secured revolving credit facility amount               $ 25,000    
Repayment of debt under revolving credit agreements           18,000        
Wells Fargo Bank [Member] | Secured Revolving Credit Facility [Member] | Revolving Credit and Security Agreement (The "Cadence Revolving Credit Agreement") [Member]                    
Line Of Credit Facility [Line Items]                    
Repayment of debt under revolving credit agreements           10,000        
Wells Fargo Bank [Member] | Secured Revolving Credit Facility [Member] | Credit Agreement and Revolving Line of Credit Note (The "Wells Revolving Credit Agreement") [Member]                    
Line Of Credit Facility [Line Items]                    
Secured revolving credit facility amount                 $ 25,000  
New secured revolving credit facility amount                 $ 25,000  
Deutsche Bank [Member]                    
Line Of Credit Facility [Line Items]                    
Revolving line of credit         $ 9,800          
Deutsche Bank [Member] | EURIBOR [Member]                    
Line Of Credit Facility [Line Items]                    
Applicable margin rate         1.10%          
Bayerische Landesbank and Deutsche Bank | Syndicated Credit Agreement Working Capital Line of Credit [Member]                    
Line Of Credit Facility [Line Items]                    
Secured revolving credit facility amount                   $ 9,800
New secured revolving credit facility amount                   $ 9,800
Revolving line of credit           9,800        
Available for future borrowings           $ 0        
Applicable margin rate           1.35%        
Scenario Forecast [Member] | Wells Fargo Credit Agreement [Member]                    
Line Of Credit Facility [Line Items]                    
Net leverage ratio     2.75 3.25            
v3.22.2.2
Notes Payable - Carrying Amounts of Note Payables (Details)
$ in Thousands
Sep. 30, 2022
USD ($)
Debt Instrument [Line Items]  
Fair Value $ 29,611
Carrying Value 29,782
Syndicated Credit Agreement Note Payable [Member]  
Debt Instrument [Line Items]  
Fair Value 29,611
Carrying Value $ 29,782
v3.22.2.2
Notes Payable - Additional Information (Details) - USD ($)
$ in Thousands
1 Months Ended 9 Months Ended
Oct. 31, 2019
Sep. 30, 2022
Sep. 30, 2018
Debt Instrument [Line Items]      
Revolving line of credit   $ 84,503  
Notes Payable   29,782  
Deutsche Bank [Member]      
Debt Instrument [Line Items]      
Revolving line of credit $ 9,800    
Deutsche Bank [Member] | EURIBOR [Member]      
Debt Instrument [Line Items]      
Applicable margin rate 1.10%    
Syndicated Credit Agreement Note Payable [Member]      
Debt Instrument [Line Items]      
Notes Payable   $ 29,782  
Syndicated Credit Agreement Note Payable [Member] | Bayerische Landesbank and Deutsche Bank [Member]      
Debt Instrument [Line Items]      
Notes payable borrowings     $ 63,700
Syndicated Credit Agreement Note Payable [Member] | Bayerische Landesbank and Deutsche Bank [Member] | EURIBOR [Member]      
Debt Instrument [Line Items]      
Applicable margin rate   1.35%  
v3.22.2.2
Employee Benefit Plans - Additional Information (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Defined Benefit Plan Disclosure [Line Items]    
Pension liability $ 16,220 $ 11,402
Contributions to defined benefit pension plans 1,200  
Defined benefit pension plans for the remainder of fiscal year $ 600  
v3.22.2.2
Employee Benefit Plans - Schedule of the Components of Net Periodic Pension Cost (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]        
Service cost $ 478 $ 307 $ 981 $ 931
Interest cost 204 84 638 257
Expected return on plan assets (465) (460) (1,384) (1,396)
Amortization of actuarial losses 81 272 254 825
Net periodic benefit cost $ 298 $ 203 $ 489 $ 617
v3.22.2.2
Equity - Additional Information (Detail) - shares
9 Months Ended
Sep. 30, 2022
Jul. 15, 2022
Subsidiary or Equity Method Investee [Line Items]    
Stock repurchased, shares 0  
Maximum shares authorized for repurchase, prior and new announcements and total after new announcement 0  
ADVA    
Subsidiary or Equity Method Investee [Line Items]    
Equity method ownership percentage 34.65% 34.57%
v3.22.2.2
Equity - Changes in Accumulated Other Comprehensive Loss, Net of Tax, by Component (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance $ 348,537 $ 375,515 $ 357,102 $ 372,944
Other comprehensive loss before reclassifications (23,426) (1,418) (28,748) (3,272)
Amounts reclassified from accumulated other comprehensive (loss) income (260) 92 280 445
Net current period other comprehensive (loss) income (23,686) (1,326) (28,468) (2,827)
Less: Comprehensive Loss attributable to non-controlling interest, net of tax (94)   (94)  
Ending Balance 1,184,827 363,753 1,184,827 363,753
ASU 2018-02 [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance 385 385 385 385
Ending Balance 385 385 385 385
Accumulated Other Comprehensive Loss [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (16,696) (13,140) (11,914) (11,639)
Ending Balance (40,288) (14,466) (40,288) (14,466)
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (1,476) (255) (552) 32
Other comprehensive loss before reclassifications (254) (29) (1,818) (358)
Amounts reclassified from accumulated other comprehensive (loss) income (142) (32) 498 10
Net current period other comprehensive (loss) income (396) (61) (1,320) (348)
Ending Balance (1,872) (316) (1,872) (316)
Defined Benefit Plan Adjustments [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (5,713) (9,310) (5,613) (9,621)
Amounts reclassified from accumulated other comprehensive (loss) income 118 124 (218) 435
Net current period other comprehensive (loss) income 118 124 (218) 435
Ending Balance (5,831) (9,186) (5,831) (9,186)
Foreign Currency Adjustments [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (9,892) (3,960) (6,134) (2,435)
Other comprehensive loss before reclassifications (23,172) (1,389) (26,930) (2,914)
Net current period other comprehensive (loss) income (23,172) (1,389) (26,930) (2,914)
Less: Comprehensive Loss attributable to non-controlling interest, net of tax (94)   (94)  
Ending Balance $ (32,970) $ (5,349) $ (32,970) $ (5,349)
v3.22.2.2
Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Loss Before Income Taxes $ (49,171) $ (9,135) $ (48,415) $ (978)
Tax benefit (expense) 4,312 (1,292) 4,572 (3,467)
Net Loss attributable to ADTRAN Holdings, Inc. (41,934) (10,427) (40,918) (4,445)
Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Loss Before Income Taxes 358 (138) (339) (643)
Tax benefit (expense) (98) 46 59 198
Net Loss attributable to ADTRAN Holdings, Inc. 260 (92) (280) (445)
Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member] | Unrealized Gains (Losses) on Available-for-Sale Securities [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Net investment (loss) gain 187 42 (655) (13)
Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member] | Other Income (Expense), Net [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Defined benefit plan adjustments - actuarial gain (loss) $ (171) $ (180) $ 316 $ (630)
v3.22.2.2
Equity - Tax Effects Related to the Change in Each Component of Other Comprehensive Loss (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Sep. 30, 2022
Sep. 30, 2021
Equity [Abstract]                
Unrealized gain (loss) on available-for-sale securities, Before-Tax Amount $ (334)     $ (38)     $ (2,392) $ (471)
Unrealized gain (loss) on available-for-sale securities, Tax (Expense) Benefit 80     9     574 113
Unrealized gain (loss) on available-for-sale securities, Net-of-Tax Amount (254)     (29)     (1,818) (358)
Reclassification adjustment for amounts related to available-for-sale investments included in net loss, Before-Tax Amount (187)     (42)     655 13
Reclassification adjustment for amounts related to available-for-sale investments included in net loss, Tax (Expense) Benefit 45     10     (157) (3)
Reclassification adjustment for amounts related to available-for-sale investments included in net loss, Net-of-Tax Amount (142)     (32)     498 10
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss, Before-Tax Amount 171     180     (316) 630
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss, Tax (Expense) Benefit (53)     (56)     98 (195)
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss, Net-of-Tax Amount 118     124     (218) 435
Foreign currency translation adjustment, Before-Tax Amount (23,172)     (1,389)     (26,930) (2,914)
Foreign currency translation adjustment, Net-of-Tax Amount (23,172)     (1,389)     (26,930) (2,914)
Total Other Comprehensive Income (Loss), Before-Tax Amount (23,864)     (1,289)     (28,983) (2,742)
Total Other Comprehensive Income (Loss), Tax (Expense) Benefit 178     (37)     515 (85)
Other Comprehensive Loss, net of tax $ (23,686) $ (3,140) $ (1,642) $ (1,326) $ 455 $ (1,956) $ (28,468) $ (2,827)
v3.22.2.2
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 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Numerator        
Net loss attributable to ADTRAN Holdings, Inc. $ (41,934) $ (10,427) $ (40,918) $ (4,445)
Denominator        
Weighted average number of shares – basic 73,036 48,609 57,175 48,470
Effect of dilutive securities        
Weighted average number of shares – diluted 73,036 48,609 57,175 48,470
Loss per share attributable to ADTRAN Holdings, Inc.- basic $ (0.57) $ (0.21) $ (0.72) $ (0.09)
Loss per share attributable to ADTRAN Holdings, Inc. - diluted $ (0.57) $ (0.21) $ (0.72) $ (0.09)
v3.22.2.2
Loss Per Share - Additional Information (Detail) - shares
shares in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Anti-dilutive effect excluded calculation of diluted earnings per share 100 200 200 400
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 4   4 4
Unvested Stock Options, PSUs, RSUs and Restricted Stock [Member] | Maximum [Member]        
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Anti-dilutive effect excluded calculation of diluted earnings per share   1    
v3.22.2.2
Segment Information - Additional Information (Detail)
9 Months Ended
Sep. 30, 2022
Segment
Category
Segment Reporting [Abstract]  
Number of reportable segments | Segment 2
Number of categories | Category 3
v3.22.2.2
Segment Information - Revenue and Gross Profit of Reportable Segments (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Segment Reporting Information [Line Items]        
Revenue $ 340,709 $ 138,081 $ 667,265 $ 408,846
Gross Profit 103,027 47,673 219,849 163,942
Network Solutions [Member]        
Segment Reporting Information [Line Items]        
Revenue 304,940 120,767 599,306 360,025
Gross Profit 82,334 39,738 186,126 143,981
Services & Support [Member]        
Segment Reporting Information [Line Items]        
Revenue 35,769 17,314 67,959 48,821
Gross Profit $ 20,693 $ 7,935 $ 33,723 $ 19,961
v3.22.2.2
Segment Information - Revenue Information by Category (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Disaggregation Of Revenue [Line Items]        
Revenue $ 340,709 $ 138,081 $ 667,265 $ 408,846
Subscriber Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 133,675 46,867 270,147 152,489
Access & Aggregation Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 88,189 $ 91,214 278,273 $ 256,357
Optical Networking Solutions        
Disaggregation Of Revenue [Line Items]        
Revenue $ 118,845   $ 118,845  
v3.22.2.2
Segment Information - Revenue Information by Geographic Area (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Revenue from External Customer [Line Items]        
Revenue $ 340,709 $ 138,081 $ 667,265 $ 408,846
United States [Member]        
Revenue from External Customer [Line Items]        
Revenue 169,669 91,868 374,470 273,009
United Kingdom [Member]        
Revenue from External Customer [Line Items]        
Revenue 64,234 12,504 123,477 34,006
Germany [Member]        
Revenue from External Customer [Line Items]        
Revenue 46,569 17,782 71,945 50,737
Other International [Member]        
Revenue from External Customer [Line Items]        
Revenue $ 60,237 $ 15,927 $ 97,373 $ 51,094
v3.22.2.2
Liability for Warranty Returns - Additional Information (Detail) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Dec. 31, 2020
Product Warranties Disclosures [Abstract]            
Period of assurance-based warranty for product defects 90 days to five years          
Liability for warranty obligations $ 8,601 $ 4,842 $ 5,403 $ 5,647 $ 5,997 $ 7,146
v3.22.2.2
Liability for Warranty Returns - Summary of Warranty Expense and Write-off Activity (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Product Warranties Disclosures [Abstract]        
Balance at beginning of period $ 4,842 $ 5,997 $ 5,403 $ 7,146
Plus: ADVA acquisition 3,756   3,756  
Plus: Amounts charged to cost and expenses 616 472 1,727 253
Less: Deductions (613) (822) (2,285) (1,752)
Balance at end of period $ 8,601 $ 5,647 $ 8,601 $ 5,647
v3.22.2.2
Commitments and Contingencies - Additional Information (Detail) - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Contingencies And Commitments [Line Items]    
Commitments related to performance bonds $ 21.1 $ 22.9
Commitments related to performance bonds expiration month and year 2025-04  
Purchase commitments $ 454.1  
Commitments towards private equity funds 4.9  
Investment Commitments [Member]    
Contingencies And Commitments [Line Items]    
Aggregate investment committed in private equity funds $ 5.0  
v3.22.2.2
Subsequent Events - Additional Information (Detail)
$ / shares in Units, $ in Millions
9 Months Ended
Nov. 07, 2022
$ / shares
Oct. 18, 2022
$ / shares
shares
Jul. 15, 2022
shares
Aug. 30, 2021
Sep. 30, 2022
shares
Dec. 31, 2022
USD ($)
Nov. 03, 2022
USD ($)
Oct. 18, 2022
€ / shares
Dec. 31, 2021
shares
Subsequent Event [Line Items]                  
Exchange offer settled date     Jul. 15, 2022            
Common stock, shares outstanding | shares         77,619,000       49,063,000
Scenario Forecast [Member]                  
Subsequent Event [Line Items]                  
Quarterly dividend payable, aggregate amount | $           $ 7.0      
Subsequent Event [Member]                  
Subsequent Event [Line Items]                  
Common stock dividends per share declared | $ / shares $ 0.09                
Subsequent Event [Member] | DPLTA [Member]                  
Subsequent Event [Line Items]                  
Percentage of required voting interest   75.00%           75.00%  
Subsequent Event [Member] | Cross-Currency Swap Arrangement [Member]                  
Subsequent Event [Line Items]                  
Aggregate notional amount | $             $ 160.0    
Subsequent Event [Member] | Cross-Currency Swap Arrangement [Member] | Maximum [Member]                  
Subsequent Event [Line Items]                  
Aggregate notional amount, daily fixed forward conversion rate             0.98286    
Subsequent Event [Member] | Cross-Currency Swap Arrangement [Member] | Minimum [Member]                  
Subsequent Event [Line Items]                  
Aggregate notional amount, daily fixed forward conversion rate             1.03290    
Subsequent Event [Member] | Cross-Currency Swap Arrangement [Member] | Eight Quarterly Tranches [Member]                  
Subsequent Event [Line Items]                  
Aggregate notional amount | $             $ 20.0    
ADVA Optical Networking SE [Member] | Subsequent Event [Member] | Maximum [Member]                  
Subsequent Event [Line Items]                  
Number of additional shares authorized to purchase | shares   15,346,544              
ADVA Optical Networking SE [Member] | Subsequent Event [Member] | DPLTA [Member]                  
Subsequent Event [Line Items]                  
Price per share | $ / shares   $ 17.21              
Annual recurring compensation per share               € 0.59  
Annual recurring compensation net per share               € 0.52  
ADVA Optical Networking SE [Member] | Subsequent Event [Member] | DPLTA [Member] | Annuity Interest Rate 3.00% [Member]                  
Subsequent Event [Line Items]                  
Annual recurring compensation per share | $ / shares   0.59              
Annual recurring compensation net per share | $ / shares   $ 0.52              
Annuity interest rate   3.00%           3.00%  
ADVA Optical Networking SE [Member] | Subsequent Event [Member] | DPLTA [Member] | Annuity Interest Rate 3.25% [Member]                  
Subsequent Event [Line Items]                  
Annual recurring compensation per share               € 0.62  
Annual recurring compensation net per share               € 0.54  
Annuity interest rate   3.25%           3.25%  
ADVA Optical Networking SE [Member] | Subsequent Event [Member] | DPLTA [Member] | Annuity Interest Rate 5.50% [Member]                  
Subsequent Event [Line Items]                  
Annual recurring compensation per share               € 1.00  
Annual recurring compensation net per share               € 0.87  
Annuity interest rate   5.50%           5.50%  
Acorn HoldCo, Inc., [Member]                  
Subsequent Event [Line Items]                  
Business Acquisition, Date of Acquisition Agreement       Aug. 30, 2021          
Number of shares subject to additional assumed options | shares     100,000            
Common stock, shares outstanding | shares     34,000,000.0   33,957,538        
Percentage of outstanding bearer shares     65.43%   65.35%