Aviat Networks: MDU Order Lands, But Component Inflation Bites
A $25–30M MDU win and record backlog anchor FY27 guidance, even as cost pressure squeezes margins.
AVNW · Earnings Call · 2026-08-27
A Strong Finish with a Tangible MDU Win
Aviat Networks closed fiscal 2026 with a solid quarter: revenue reached $120.9 million, up 4.8% YoY, and year-end backlog rose 14% to $367 million. The company achieved its sixth consecutive year of revenue growth and, for the first time in over a decade, posted four quarters with revenue above $100 million. The real headline, however, is the multi-dwelling unit (MDU) opportunity, which has matured from a trial concept into a concrete order.
We are establishing our outlook as follows: full year revenues to be in the range of $455 million to $470 million; full year adjusted EBITDA to be in the range of $50 million to $55 million.
Management confirmed an order from an existing customer in the $25–30 million range, with all revenue expected in fiscal 2027. “We announced an order received from an existing customer in the range of $25 million to $30 million. We expect all of this revenue in fiscal 2027.” — Peter Smith, CEO · 2026-08-27 This is a meaningful step up from the previous characterization of an “8-figure opportunity” as Pete Smith noted on the prior call: “we would be comfortable saying it's an 8-figure opportunity in fiscal year '27.” — Peter Smith, Chief Executive Officer · 2026-05-04 The order, tied to subscriber growth in MDU deployments, could eventually scale to $100 million annually if the customer achieves its subscriber targets and Aviat maintains share.
Supply Chain and Margin Pressure: The Cost of Growth
Despite the top-line strength, gross margins felt the sting of component shortages and cost inflation. “Like others in the technology hardware space, Aviat has not been immune from component shortages and cost inflation.” — Peter Smith, CEO · 2026-08-27 The company is actively managing these headwinds by leveraging its COVID-era playbook and planning to pass through price increases. “We plan to pass along these price increases to our customers to help offset these rising costs.” — Peter Smith, CEO · 2026-08-27 The impact was visible: Q4 gross margin came in at 30.8% GAAP, down from 34.2% a year ago. Gross margin has declined notably over the past year, with the latest filed quarter (Q3 FY2026) showing 29.3%, down 5.6pp YoY . The company expects partial recovery in Q2 as pricing actions take effect, but the near-term trajectory remains a watchpoint. Component shortage and cost inflation are recurring themes that will directly influence margins in the coming quarters.
LEO, Private Networks, and the Backlog Flywheel
Beyond the MDU, Aviat is positioning itself in adjacent growth areas. The company sees low-earth-orbit (LEO) satellite as complementary, not competitive, opening a niche for integrated solutions. “Most exciting is the new functionality that LEO brings. LEO offers redundant communications.” — Peter Smith, CEO · 2026-08-27 Trials are underway to demonstrate the value proposition of combining LEO with terrestrial microwave and cellular router solutions. Meanwhile, the BEAD program is finally moving from theory to practice. “we are getting significantly more encouraged about BEAD” — Peter Smith, Chief Executive Officer · 2025-11-04 , as customer conversations have become specific and deployment plans are being formed. The company's Private Network business remains a core growth engine, bolstered by the exit of European competitors and strong demand in public safety and utility segments.
With record backlog and a clear growth roadmap, Aviat enters fiscal 2027 with momentum, even as margin pressures linger. The MDU order validates the strategic pivot, and the potential for follow-on orders and BEAD upside could drive revenue toward the high end of guidance.